Latest news with #ELI
Time of India
a day ago
- Business
- Time of India
Mid-2025 Indian economy cautiously optimistic: Finance ministry
(AI image) New Delhi: The Indian economy in mid-2025 presents a picture of cautious optimism, a finance ministry report said on Monday, but it cautioned that in the medium term, given the ongoing momentous shifts in global supply chains in semiconductor chips, rare earths, and magnets, India has its task cut out. "Despite global headwinds marked by trade tensions, geopolitical volatility, and external uncertainties, India's macroeconomic fundamentals remained resilient," said the finance ministry's monthly economic outlook for June. "Aided by robust domestic demand, fiscal prudence, and monetary support, India appears poised to continue as one of the fastest-growing major economies," the report said, adding that various forecasts projected economic growth for FY26 in the 6.2-6.5% range. The report stated that despite monetary easing and a strong bank balance sheet, credit growth slowed, reflecting cautious borrower sentiment and possibly risk-averse lender behaviour. "A growing preference for bond markets, particularly commercial papers among corporates due to lower borrowing costs, may also explain the shift. Piggybacking on initiatives like the Employment Linked Incentive (ELI) scheme, it is time for corporates to set the ball in motion," said the report. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Indonesia: Unsold Sofas Prices May Surprise You (Prices May Surprise You) Sofas | Search Ads Search Now Undo The report also cautioned that despite the broadly positive outlook, downside risks remain. "While geopolitical tensions have not elevated further, the global slowdown, particularly in the US (which shrank by 0.5% in Q1 2025), could dampen further demand for Indian exports," said the report. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
The Print
a day ago
- Business
- The Print
Indian economy has look and feel of ‘steady as she goes' for FY26: FinMin
With inflation remaining within the target range and monsoon progress on track, the domestic economy enters the second quarter of FY26 on a relatively firm footing. In its monthly economic review, the ministry said the first quarter of fiscal 2025-26 (FY26) presents a picture of resilient domestic supply and demand fundamentals. New Delhi, Jul 28 (PTI) Indian economy has the look and feel of 'steady as she goes' for the current fiscal, the finance ministry said on Monday even as it flagged slowing credit growth. While geopolitical tensions have not elevated further, the global slowdown, particularly in the US (which shrank by 0.5 per cent in Q1 2025), could dampen further demand for Indian exports. 'Continued uncertainty on the US tariff front may weigh on India's trade performance in the coming quarters. Slow credit growth and private investment appetite may restrict acceleration in economic momentum,' it said. Further, given the deflationary trend in the wholesale price index, one has to observe economic momentum in nominal quantities. Measured in constant prices, economic activity may appear healthier than it is, the review report said. 'All that said, the economy has the look and feel of 'steady as she goes' as far as FY26 is concerned,' it said. The report noted despite monetary easing and a strong bank balance sheet, credit growth has slowed, reflecting cautious borrower sentiment and possibly risk-averse lender behaviour. 'A growing preference for bond markets, particularly commercial papers among corporates due to lower borrowing costs, may also explain the shift,' it said. Piggybacking on initiatives like the Employment Linked Incentive (ELI) scheme, the ministry said it is time for corporates to set the ball in motion. The Reserve Bank has cumulatively reduced the short-term lending rate (repo) by 100 basis points since February. With an outlay of Rs 99,446 crore, the ELI scheme aims to incentivise the creation of more than 3.5 crore jobs in the country over a period of 2 years, with special focus on the manufacturing sector. The report said that despite global headwinds marked by trade tensions, geopolitical volatility, and external uncertainties, India's macroeconomic fundamentals have remained resilient. Aided by robust domestic demand, fiscal prudence and monetary support, India appears poised to continue as one of the fastest-growing major economies, with various forecasters, including S&P, ICRA, and the RBI's Survey of Professional Forecasters, projecting GDP growth rates for FY26 in the range of 6.2 per cent and 6.5 per cent, it said. The report said high-frequency indicators reflected broad-based strength, registering strong year-on-year growth. While the manufacturing and construction sectors continued to expand, the services sector anchored the overall economic growth in Q1 of FY26. As of now, favourable progress in the southwest monsoon has bolstered agricultural activity, leading to higher kharif sowing compared to the previous year. Adequate fertiliser availability and comfortable reservoir levels augur well for a healthy harvest outlook, providing fresh impetus to rural incomes and consumption, the ministry said. PTI NKD HVA This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Time of India
a day ago
- Business
- Time of India
Economy outlook: Finance ministry pegs FY26 as ‘steady as she goes'; credit slowdown, tariff risks in focus
India's economy appears to be on stable footing heading into the second quarter of FY26, supported by resilient domestic supply and demand fundamentals, even as challenges such as weak credit growth and global uncertainty persist, the finance ministry said in its latest monthly economic review. "All that said, the economy has the look and feel of 'steady as she goes' as far as FY26 is concerned," the ministry said, summing up the outlook for the current fiscal, reported PTI. Inflation remains within the Reserve Bank's target range, and monsoon progress is on track, the review noted, adding that macroeconomic fundamentals continue to show resilience despite external headwinds. These include a global economic slowdown — particularly in the US, which contracted by 0.5% in the first quarter of 2025 — and uncertainty over tariffs that may impact export momentum in the coming quarters. 'Continued uncertainty on the US tariff front may weigh on India's trade performance in the coming quarters. Slow credit growth and private investment appetite may restrict acceleration in economic momentum,' the report said. The ministry noted that economic activity might appear stronger in constant prices than in nominal terms due to deflationary trends in the wholesale price index. 'Measured in constant prices, economic activity may appear healthier than it is,' it said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Boost Mobile covers around 1 million km² more than any other mobile network. Boost Mobile Australia Learn More Undo While the first quarter presented a favourable picture overall, the report flagged that credit growth has slowed, despite monetary easing and healthy bank balance sheets. The Reserve Bank of India has reduced the repo rate by 100 basis points since February. 'Despite monetary easing and a strong bank balance sheet, credit growth has slowed, reflecting cautious borrower sentiment and possibly risk-averse lender behaviour,' the report said. It added that 'a growing preference for bond markets, particularly commercial papers among corporates due to lower borrowing costs, may also explain the shift.' On the investment side, the report emphasised the importance of leveraging government schemes like the Employment Linked Incentive (ELI), which has a budget outlay of Rs 99,446 crore. The scheme aims to create more than 3.5 crore jobs over two years, with a particular focus on manufacturing. 'Piggybacking on initiatives like the Employment Linked Incentive (ELI) scheme, it is time for corporates to set the ball in motion,' the ministry said. High-frequency indicators continue to signal broad-based year-on-year growth across sectors. While manufacturing and construction maintained their upward trajectory, the services sector remained the primary driver of overall economic growth in the April–June quarter. Agriculture, too, is showing signs of improvement, helped by favourable monsoon progress, higher kharif sowing, adequate fertiliser supply and comfortable reservoir levels. These factors are expected to support rural incomes and boost consumption. Despite global challenges, the ministry reiterated that India is well-positioned to remain among the fastest-growing major economies. Multiple agencies including S&P, ICRA, and the RBI's Survey of Professional Forecasters have projected GDP growth for FY26 in the range of 6.2% to 6.5%. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
2 days ago
- Business
- Mint
Easing inflation widens space for further rate cuts: Finmin June Economic Review
New Delhi: The finance ministry on Monday held out hopes of further interest rate cuts, citing muted core inflation, coupled with headline inflation falling well below the Reserve Bank of India's (RBI's) 4% target. 'Core inflation remains subdued, and overall inflation is comfortably below the RBI's 4% target, affording room for the easing cycle to be sustained,' the ministry noted in its June Monthly Economic Review. The RBI has projected headline inflation at 3.4% for the second quarter of FY26, while actual inflation in Q1 came in below the central bank's target. 'It appears likely that the full fiscal year inflation rate would undershoot the central bank's expectation of 3.7%,' the ministry added. With price pressures easing and growth remaining a priority, the RBI has cut policy rates three times in 2025, lowering the repo rate by a cumulative 100 basis points from 6.50% to 5.50%. The easing cycle began with a 25-basis point cut in February, followed by another in April and a sharper 50-basis point reduction in June, marking a decisive turn towards an accommodative stance. Between January and June 2025, retail inflation eased steadily, offering crucial support to the RBI's rate-cutting cycle. Headline CPI inflation declined from 4.31% in January to a 77-month low of 2.10% in June, driven largely by a sharp fall in food prices, especially vegetables and a favourable base effect. Food inflation turned negative in June, pulling down overall price pressures, even as core inflation remained sticky, hovering around 4.4%. However, despite monetary easing and improved banking sector balance sheets, credit growth has shown signs of slowing, reflecting a mix of cautious borrower sentiment and risk-averse lender behaviour, the economic review said. "A growing preference for bond markets, particularly commercial papers among corporates due to lower borrowing costs, may also explain the shift," it said. "Piggybacking on initiatives like the Employment Linked Incentive (ELI) scheme, it is time for corporates to set the ball in motion," it added. To be sure, despite the potential on the domestic front, global geopolitical and economic risks remained elevated. The war in Ukraine, with renewed Russian offensives, along with rising instability in West Asia, continued to cloud the global economic outlook, adding pressure on supply chains and investor sentiment. "Despite the broadly positive outlook, downside risks remain. While geopolitical tensions have not elevated further, the global slowdown, particularly in the US (which shrank by 0.5% in Q1 2025), could dampen further demand for Indian exports," the review said. "Continued uncertainty on the US tariff front may weigh on India's trade performance in the coming quarters," it added. India and the US, meanwhile, have been negotiating trade deal, working to an end-of-August deadline. Meanwhile, the review cautioned that slow credit and tepid private investment may constrain growth acceleration, even as deflation in wholesale prices skews real economic indicators. 'Measured in constant prices, economic activity may appear healthier than it is. All that said, the economy has the look and feel of 'steady as she goes' as far as FY26 is concerned,' it said. 'In the medium term, given the ongoing momentous shifts in global supply chains in the areas of semiconductor chips, rare earths and magnets, India has its task cut out,' it added.
Economic Times
2 days ago
- Business
- Economic Times
Indian economy has look and feel of 'steady as she goes' for FY26: Finance ministry
ANI Representational image Indian economy has the look and feel of "steady as she goes" for the current fiscal, the finance ministry said on Monday even as it flagged slowing credit growth. In its monthly economic review, the ministry said the first quarter of fiscal 2025-26 (FY26) presents a picture of resilient domestic supply and demand fundamentals. With inflation remaining within the target range and monsoon progress on track, the domestic economy enters the second quarter of FY26 on a relatively firm footing. While geopolitical tensions have not elevated further, the global slowdown, particularly in the US (which shrank by 0.5 per cent in Q1 2025), could dampen further demand for Indian exports. "Continued uncertainty on the US tariff front may weigh on India's trade performance in the coming quarters. Slow credit growth and private investment appetite may restrict acceleration in economic momentum," it said. Further, given the deflationary trend in the wholesale price index, one has to observe economic momentum in nominal quantities. Measured in constant prices, economic activity may appear healthier than it is, the review report said. "All that said, the economy has the look and feel of 'steady as she goes' as far as FY26 is concerned," it said. The report noted despite monetary easing and a strong bank balance sheet, credit growth has slowed, reflecting cautious borrower sentiment and possibly risk-averse lender behaviour. "A growing preference for bond markets, particularly commercial papers among corporates due to lower borrowing costs, may also explain the shift," it said. Piggybacking on initiatives like the Employment Linked Incentive (ELI) scheme, the ministry said it is time for corporates to set the ball in motion. The Reserve Bank has cumulatively reduced the short-term lending rate (repo) by 100 basis points since February. With an outlay of Rs 99,446 crore, the ELI scheme aims to incentivise the creation of more than 3.5 crore jobs in the country over a period of 2 years, with special focus on the manufacturing sector. The report said that despite global headwinds marked by trade tensions, geopolitical volatility, and external uncertainties, India's macroeconomic fundamentals have remained resilient. Aided by robust domestic demand, fiscal prudence and monetary support, India appears poised to continue as one of the fastest-growing major economies, with various forecasters, including S&P, ICRA, and the RBI's Survey of Professional Forecasters, projecting GDP growth rates for FY26 in the range of 6.2 per cent and 6.5 per cent, it said. The report said high-frequency indicators reflected broad-based strength, registering strong year-on-year growth. While the manufacturing and construction sectors continued to expand, the services sector anchored the overall economic growth in Q1 of FY26. As of now, favourable progress in the southwest monsoon has bolstered agricultural activity, leading to higher kharif sowing compared to the previous year. Adequate fertiliser availability and comfortable reservoir levels augur well for a healthy harvest outlook, providing fresh impetus to rural incomes and consumption, the ministry said.
