Key Economic Updates: GST Reforms, Job Market Data & More

Modi 3.0 Government Unveils ₹2.88 Lakh Crore Stimulus Package

The Modi 3.0 BJP-led NDA Government is placing significant bets on the economy with a comprehensive ₹2.88 lakh crore stimulus package. This initiative, along with revisions to key economic indicators and a focus on job market data, demonstrates the administration's commitment to gaining a clear view of the economic landscape. However, challenges such as a potential slowdown in global demand for goods and the need for a revamped poverty line loom large. Read Key Economic Updates compiled by Team TICE NEW from various media reports and press releases.

Government Pumps ₹2.88 Lakh Crore into Economy

• The Indian government has announced a substantial stimulus package exceeding ₹2.88 lakh crore to invigorate economic activity. Key measures include increased Minimum Support Prices (MSPs) for farmers, the development of a new greenfield port, and the expansion of Varanasi airport. This significant expenditure marks the initiation of the promised initiatives within the first 100 days of Prime Minister Narendra Modi's third term.

Economic Gauges Get a Revamp

• The Ministry of Statistics and Programme Implementation (MoSPI) is finalizing base year revisions for crucial economic indicators such as the Consumer Price Index (CPI), Index of Industrial Production (IIP), and Gross Domestic Product (GDP) by the end of the year. These revisions aim to provide a more accurate picture of the current economic landscape.

Job Market Under the Microscope

• Formal job creation, as indicated by Employees’ State Insurance Corporation (ESIC) data, saw a decline in April 2024. Nevertheless, a significant portion of the new jobs were filled by young workers (under 25), indicating a potential shift in the job market. The government is also considering increasing the frequency of job data surveys, which would provide valuable insights for policymakers and job seekers.

Global Headwinds: Slowing Demand for Goods

• A report by Axis Bank Research has warned of a potential slowdown in global demand for goods, which could impact Indian exports. Businesses will need to adapt to this evolving landscape.

Strengthening Financial Stability

• Several measures are being implemented to enhance financial stability. A study suggests faster claim settlements for the deposit insurance system, thereby safeguarding depositors' money. Additionally, the RBI is inviting applications for self-regulatory organizations (SROs) to oversee non-banking finance companies (NBFCs), promoting greater accountability in the sector.

Employee Buzz: 8th Pay Commission on the Horizon?

• A proposal for the 8th Pay Commission has been submitted, aiming to revise salaries and benefits for central government employees.

GST Update: Reforms and Growing Acceptance

• The GST Council is considering several key reforms, including interest waivers and streamlining dispute resolution. A Deloitte survey reveals an increasingly positive perception of GST among executives, though there remains room for improvement, particularly in tax rate rationalization.

Infrastructure Boost: From Forensics to Ports

• The government has approved a ₹2,254 crore scheme to enhance forensic capabilities. Although asset monetization fell short of the target in 2023-24, infrastructure development is ongoing, with the approval of a massive ₹76,000 crore port project.

Regulatory Tweaks and Industry Engagement

• Stricter regulations for guarantors of bankrupt firms and efforts to improve business ease through reduced compliance burdens are on the agenda.

Electric Vehicles: FAME 3 Gets Tougher, Discounts Lure Buyers

• Automakers under FAME 3 will face penalties for not adhering to localization norms. Meanwhile, slowing sales have prompted record-high discounts to attract car buyers.

Sectoral Spotlight: SUVs Drive Growth, MSP Hike for Farmers

• The Indian auto industry witnessed significant growth, driven by a surge in SUV sales. Additionally, the government announced an increase in MSPs for Kharif crops, potentially benefiting farmers' incomes.

Energy Mix: Coal Power on the Rise, Wind Power Gets a Boost

• India is set to add significant coal power capacity to meet electricity demand. However, the government is also supporting clean energy with a ₹7,453 crore scheme for offshore wind energy projects. Coal imports are likely to increase due to lower hydro power generation.

Refining Sector Faces Challenges

• Despite strong profitability among state oil companies, India's refining sector faces numerous challenges. Developments in this space will be closely monitored.

Telecom Boom Continues

• India's telecom subscriber base surpassed 1.2 billion, with Reliance Jio leading the pack.

Despite various challenges, India is taking steps to strengthen financial stability, boost infrastructure, and engage with industry. The focus on clean energy alongside a continued reliance on coal underscores the balancing act the country is performing. From record-breaking subscriber numbers in the telecom sector to the potential 8th Pay Commission for government employees, there is much to watch in the ever-evolving Indian business landscape.