Updates on Indian Economy

Updates on Indian economy

1. According to RBI data. India’s foreign exchange reserves touched a life time high of $555.12 billion after it surged by $3.615 billion in the week ended October 16.

2. Foreign institutional investors’ holdings in Reliance Industries (RIL) rose to a record high of 27.2% in the quarter ended September 30. Foreign portfolio investors hold165.8 crore shares, or 25.2% of the total shareholding.

3. In order to meet the GST compensation shortfalls faced by States, the Centre on Friday borrowed and transferred ₹6,000 crore to 16 States as well as the Union Territories of Delhi and J&K. The central government have planned to release ₹6,000 crore every week to the States till the approved borrowings to meet the shortfall are met. It could take about 13 weeks or about three months to complete the envisaged borrowing. Seven States — including Kerala, West Bengal and Punjab — have yet to convey their acceptance to the Centre’s proposed solution to meet the GST shortfalls.

4. China was the biggest buyer of Indian steel in the first six months of the current financial year, accounting for 29% of Indian steel exports during the period.

5. State Bank of India (SBI), the leading public sector bank had a deposit base of over ₹34 trillion with a CASA ratio of more than 45% and advances (loans) of nearly ₹24 trillion as on 30 June 2020. The number of customers using internet banking facilities is about 76 million and mobile banking users stand at a little more than 17 million.

SBI commands a nearly 34% market share in home loans and nearly 33% in the auto loans segment. The bank has the largest network of more than 22,100 branches in India with an ATM/cash deposit machinenetwork of over 58,500 and total business correspondent outlets of more than 62,200. 

6.  According to a report publish by Oxfam International’s Indian arm, the onset of the covid-19 pandemic could have worsened inequality between men and women in terms of income and time. It estimated that women and girls put in 3.26 billion hours of unpaid care work each and every day. It is equivalent to the contribution of ₹19 lakh crore (trillion) a year to the Indian economy. 

In India, women’s contribution to the GDP is one of the lowest in the world at 17%. However, when compared with the total amount of work done by women, it is much higher and contributes a lot more to the Indian economy. In China, women’s work contributes to 41% of the GDP, and the same is for Eastern Europe and Central Asia. Sub-Saharan Africa too fared better than India at 39% with the world average at 37%.

Notes:

*A foreign institutional investor (FII) is an investor or investment fund investing in a country outside of the one in which it is registered or headquartered. The term foreign institutional investor is probably most commonly used in India, where it refers to outside entities investing in the nation's financial markets.

*Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence the foreign exchange rate of its currency, and to maintain confidence in financial markets. Reserves are held in one or more reserve currencies, nowadays mostly the United States dollar and to a lesser extent the euro. Foreign exchange reserves assets can comprise banknotes, deposits, bonds, treasury bills and other government securities of the reserve currency.

*CASA ratio stands for current and savings account ratio. CASA ratio of a bank is the ratio of deposits in current and saving accounts to total deposits. A higher CASA ratio indicates a lower cost of funds, because banks do not usually give any interests on current account deposits and the interest on saving accounts is usually very low 3-4%. If a large part of a bank's deposits comes from these funds, it means that the bank is getting those funds at a relative lower cost. 

*Oxfam International was formed in 1995 by a group of independent non-governmental organizations. They joined together as a confederation to maximize efficiency and achieve greater impact to reduce global poverty and injustice.

The name “Oxfam” comes from the Oxford Committee for Famine Relief, founded in Britain in 1942. The group campaigned for food supplies to be sent through an allied naval blockade to starving women and children in enemy-occupied Greece during the Second World War.