businessline's State of the Economy Podcast

India, which is the fastest growing large economy in the world, has now set its sights on becoming a $ 7 trillion economy by 2030. Given the Centre’s focus on Capex-led growth strategy in the last few years, the economy is well on course to achieve the $ 5 trillion mark by 2026-2027, going by the latest Finance Ministry report on ‘Indian Economy: A Review”.

With the Finance Minister Nirmala Sitharaman slated to present her sixth consecutive budget —equalling a record set by former Prime Minister Morarji Desai— there is tremendous excitement and high expectations on how the budget (albeit a Vote on Account) will bring cheers to the country’s women, youth, poor, farmers and the middle class.

BusinessLine spoke to Upasana Bhardwaj, Chief Economist, Kotak Mahindra Bank, to get her perspective on what’s in store from the interim budget for various stakeholders including foreign investors.

One clear takeaway from the conversation with Upasna is that the aspiration of $ 7 trillion economy by 2030 is achievable given that dollar denominated growth of Indian economy over the last six years has been over 7 percent. “I think a CAGR of 7% plus in dollar terms for next six years is doable and somewhere close to $ 7 trillion can be achieved”.

The stage is set, foundation has been laid and over last six to seven years a lot of remedial measures has been taken to address the various weaknesses in the economy, she noted.

Upasna expects interim budget to present a strong message on government’s commitment to adhere to its fiscal consolidation commitment. It may even be a bit aggressive in pegging the fiscal deficit target for 2024-25 at a level below the anticipated 5.4 percent. As for the current fiscal, the Centre will stick to its earlier announced target rate of 5.9 percent and this may sound music to the ears of investing community.

After India’s inclusion in global bond indices, it has become much more important to be fiscally prudent. It gives India less headroom to be relaxed on that front given that foreign investors will now be viewing fiscal parameters closely, according to Upasna.

India’s fiscal deficit consolidation strategy for 2024-35 would be led by pruning of expenditure and toning down of growth in Capex for next year.

If you look at India’s macro fundamentals, apart from fiscal deficit, every other metric is a shining star. It’s only debt to gdp ratio and fiscal deficit that are on weak spots. It is something that government will focus attention on and therefore the expectation is to peg the fiscal deficit target at 5.4 percent or below that.

“I do believe expenditure pruning is important piece of fiscal consolidation strategy given the lower tax buoyancy this year (2023-24) as compared to last year”.

Listen in to the BL State of Economy Podcast with Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.

(Host: Srivats K R, Producer: Nabodita Ganguly)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

Smart meters have been making headlines in recent times. In this episode of the State of the Economy Podcast, Girishkumar Kadam, Senior Vice President and Group Head of Corporate Sector Ratings, ICRA, sheds light on the status and significance of the smart meter installation project in India's power sector.  

The podcast emphasises the crucial role of smart meters in minimising billing and collection inefficiencies, reducing aggregate technical and commercial losses, and enhancing grid operations. He highlights the target of installing 25 crore smart meters by 2025 and the potential benefits for demand forecasting and overall power sector efficiency. 

Addressing the financial challenges faced by distribution utilities, Girish explains how smart meters can contribute to lowering losses, improving cash collections, and ultimately enhancing their financial health. He emphasises the importance of a Public-Private Partnership (PPP) model, where the installation is carried out by third-party service providers with no upfront cost for utilities. 

The discussion also explains the slow progress of smart meter installation, attributing it to challenges such as state-specific variations, inadequate proactive support from state governments, and issues related to integrating smart metering infrastructure with legacy billing systems. 

He anticipates a positive outlook for the future, expecting the pace of smart meter installations to gradually increase over the next two to four years. The podcast raises the need for continued budgetary support, grants, and proactive efforts from both central and state governments to ensure the success of the smart metering initiative and address financial concerns in the power distribution sector. 

 ( Host: Rishi Ranjan Kala, Producers: Anjana PV & Siddharth Mathew Cherian)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups

In this podcast, BusinessLine’s Jyoti Banthia delves into the realm of climate tech investments in India with Angad Daryani, founder and CEO at Praan, and Seema Chaturvedi, founder of AWE Funds.

Over the past few years, climate tech investments in India have been on the rise, albeit not yet reaching the desired growth stage. To shed light on the sector's nuances and prospects, Banthia poses the first question to Chaturvedi, acknowledging the impressive growth trajectory of funds and investments. Chaturvedi attributes this surge to a heightened awareness of the urgent need to address climate change's negative impact. She emphasises the emergence of frugal innovations in India, presenting solutions that not only cater to domestic climate challenges but also have the potential for global impact.

Daryani echoes the excitement, highlighting India as a strategic hub for building climate-tech solutions. He emphasises the unique advantage India holds in terms of unit economic oversight in manufacturing, which is challenging to achieve in China. The discussion then shifts to the challenges faced by climate tech startups in securing growth-stage investments, with both guests pointing to the need for larger checks and increased attention from investors.

The conversation unfolds with insights into groundbreaking innovations emerging from India. Daryani shares examples of paradigm-shifting technologies, such as filterless air purification and innovative battery technology, positioning India as a source of frugal innovations with global scalability.

Moving forward, the speakers discuss challenges faced by the sector, emphasising the importance of corporate partnerships and the need for scalability beyond the early stages. They highlight the role of networks and connections in navigating the complex landscape of climate tech investments in India. Listen in.

(Host: Jyoti Banthia, Producer: Nabodita Ganguly)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

In this State of the Economy Podcast, Subramani Rao Mancombu and Kishore Narne, Director of Commodities & Currencies at Motilal Oswal Financial Services, explores the world of commodities and their 2024 outlook.

Narne discusses the dynamic changes witnessed in the Indian commodity markets, emphasizing the momentum gained after the introduction of options trading, particularly in crude oil and gas.

The commodities market has experienced significant shifts since the onset of the COVID-19 pandemic, and geopolitical events, such as the Ukraine war, have added further complexity.

The conversation expands to global markets, addressing the turmoil in the energy sector amidst the Russia-Ukraine conflict and the Israel-Hamas standoff. Despite these challenges, Narne explains why crude oil and natural gas prices haven't witnessed a substantial surge, attributing it to sluggish demand, particularly from China.

As the discussion unfolds, Narne provides a comprehensive overview of various commodities, including gold, silver, copper, and other metals. He reflects on the anticipated rate cuts and recessionary fears that drove gold prices to record highs, only to see a tapering off towards the end of 2023. 

Meanwhile, non-ferrous industrial metals like nickel, zinc, and copper show positive signs, buoyed by increased demand from China after the COVID-19 reopening.

The podcast explores the global economic scenario, analysing the slowdown in certain regions, such as Europe, and the potential upside and downside risks associated with these market trends. Narne emphasises the impact of the US Federal Reserve's rate decisions on the dollar and, consequently, on commodities.

Looking ahead to 2024, Narne shares insights into the expected performance of commodities in India.In the latter half of 2024, the anticipated impact of a US Federal Reserve rate cut is expected to bolster the prices of both gold and silver. Gold prices may potentially surge to ₹70,000 per 10 gm, while silver prices are likely to surpass ₹80,000 per kg.

Listen in to know more!

Host: Subramani Ra Mancombu; Producer: Siddharth MC

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups

In this State of the Economy podcast, Parvatha Vardhini, Editor, bl.portfolio talks to Rajeev Radhakrishnan, Chief Investment Officer, Fixed Income at SBI Mutual Fund to understand the various nuances of the debt market. 

Radhakrishnan reflects on the challenges and opportunities presented by the current market conditions. Radhakrishnan talks about the complexities of global market dynamics, giving insights on the volatility and expectations on the Fed rate that have defined the last few months. 

Shifting the focus to India, the discussion explores expectations around the repo rate for the year. Radhakrishnan provides a comprehensive overview and dispels notions of the RBI mimicking the Fed's approach and emphasises that India's central bank is more likely to maintain a pause, considering the country's specific growth and inflation dynamics. 

As the podcast unfolds, Rajeev discusses the impact of JP Morgan index inclusion, citing ongoing flows and potential positive factors influencing demand for bonds. This has kept yields range- bound, he reasons.

Investors seeking practical guidance will find Radhakrishnan's insights valuable.  Radhakrishnan addresses crucial questions for investors — whether to focus on duration or accrual. In the near term, Rajeev recommends exploring high-grade, shorter-term bonds for investors with a lower risk appetite. This advice aligns with his expectation of an extended pause in Indian monetary policy, coupled with a potential shift in liquidity stance later in the year. Rajeev points to the attractive spreads of AAA PSU / PFI bonds over government securities as an opportunity for investors to capitalise on.

(Host: Parvatha Vardhini, Producer: Siddharth MC)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

In this episode for the State of the Economy podcast, Dalip Singh talks to Rajinder Singh Bhatia, newly appointed President of Society of Indian Defence Manufacturers (SIDM), the apex body of Indian defence industry, about how the defence industry is poised to meet the service requirements for mainstay weapons and next-generation systems, along with the government's push for exports and expectations from budget 2024.

The podcast begins with a discussion on the government's viewpoint toward the defence industry, emphasising its role as a crucial pillar for India's strategic self-reliance. Bhatia,  who is also Chairman, Defence Business, Kalyani Group, underscores the need for a comprehensive defence industrial base, combining the strengths of both the public and private sectors to achieve the goal of Atmanirbhar Bharat. 

The conversation touches upon India's push for exports which is expected to touch Rs 20,000 crore in FY24 and for that Bhatia says the SIDM is going to set up an Export Promotion Council to facilitate that. He also informs that India is soon going to sign Security of Supply Arrangements (SOSA) with the United States of America, a step forward to get rid of regulatory hurdles for seeking access to their defence market and the strategic agreements required to integrate Indian companies into the global supply chain. The discussion also sheds light on the challenges and opportunities in European markets for defence exports.

The conversation goes on to talk about the challenges faced by the Indian defence industry, exploring topics such as the need for self-reliance in core defence technology. Bhatia shares his views on the critical role of startups in the defence sector. The conversation also touches upon the funding challenges faced by startups and the ongoing efforts to streamline the acquisition process to reduce the induction time since futuristic weapons have lesser shelf life.

Ahead of Interim Budget, he wishes the government should look into the fact that capital budget goes into addressing contractual liability and incentivises investment in R&D. The episode concludes over shifting global perception of India's military industrial capacity and capability. 

( Host: Dalip Singh, Producers: Amitha Rajkumar)

In this State of the Economy podcast, Govindarajan Bashyam, Chief Operating Officer of Tirwin Management Services (P) Ltd, delves into the challenges faced by airports and airlines in North India, particularly Delhi, due to dense fog causing flight delays. The conversation highlights the recurring nature of this issue during winter and explores the unique difficulties faced by both airports and airlines in managing the situation. 

Bashyam provides insights into the historical context of such challenges, emphasizing that it is not a new phenomenon for the region. The primary contributor to the problem is identified as the closure of one of the runways for re-carpeting work, affecting the airport's capacity to handle winter operations efficiently. 

The discussion touches upon the lack of preparedness and the need for proper planning and foresight by airport authorities. The closure of a crucial runway is criticised, and concerns are raised about the impact on flight schedules, leading to widespread frustration among passengers. 

 The discussion expands to address the social media outcry and public dissatisfaction, with incidents such as passengers using the tarmac as a recreational area during delays. Bashyam argues that such actions pose security and safety risks, and there's a call for more stringent measures to prevent such incidents. 

The conversation also delves into the role of fines imposed by civil aviation authorities on airlines and airports for non-compliance. While acknowledging the fines, Bashyam questions their effectiveness, suggesting that the penalties should be more significant to deter repeat offenses. The lack of passenger compensation and clear regulations for flight delays is also discussed, with a call for more comprehensive measures to address passenger grievances. Listen in.

Host: TE Raja Simhan; Producer: Nabodita Ganguly.

In this State of the Economy podcast, businessline’s Jyoti Datta discusses the potential impact of the upcoming budget on the healthcare and pharmaceutical sector with guest Shuchi Ray, Partner, Deloitte India. The discussion highlights the significance of healthcare in the context of the budget, especially given the ongoing election year.

Ray acknowledges the government's focus on healthcare in recent years, citing initiatives such as the Ayushman Bharat programme and various health-related schemes. She anticipates continued emphasis on the healthcare sector in the upcoming budget, with increased spending expected, particularly in areas like health insurance and Ayushman Bharat.

The conversation touches on the importance of demonstrating increased spending in healthcare, considering the current allocation is only about 2.1 per cent of GDP, lower than in developed countries. The discussion extends to the need for investment in healthcare infrastructure and awareness programmes to effectively implement existing schemes.

Addressing concerns within the pharmaceutical industry, Ray discusses the impact of GST rates on active pharmaceutical ingredients (APIs) and formulations. The misalignment in GST rates poses challenges for companies involved in importing APIs, leading to credit accumulation and impacting working capital.

 The discussion concludes with considerations for the healthcare sector beyond tax-related issues, such as enhancing health insurance coverage, addressing the shortage of healthcare practitioners through upskilling, and leveraging technology for improved accessibility. Listen in.

( Host: Jyoti Datta PT, Producers: Nabodita Ganguly & Siddharth Mathew Cherian)

In this episode of the State of the Economy Podcast, Subramani Ra Mancombu and Matthew Biggin, a commodities analyst from BMI based in London, talk about the volatile world of sugar markets, and the factors shaping the industry's future in 2024. 

In recent times, the sugar market has been on a rollercoaster ride, with global supplies dwindling and prices oscillating. Join Subramani Ra Mancombu and Matthew Biggin, a commodities analyst from BMI based in London, as they dissect the complexities of the sugar market and provide valuable insights for businesses and investors. 

With sugar prices around $0.22 per pound, there's concern over supply shortages, particularly due to issues in India, Brazil, and the impact of El Nino on Asian supplies. The conversation then shifts to the key question: How will the sugar market behave in 2024.  

According to Matthew, despite a recent decline in prices, there's an expectation of continued elevation compared to historical averages. He attributes this to India's decision to restrict sugar cane use in ethanol production and Brazil's record-breaking sugar exports. The discussion unfolds with a focus on Brazil's dominance in the global sugar trade and the potential challenges it might face in the coming months. 

How will the market balance for 2024 be for 2024? Matthew elaborates on the global sugar surplus of approximately 0.5 million tonnes, driven by Brazil's increased production. However, he hints at a potential deficit in the 2025 season, emphasising the role of India and Brazil as critical players in determining global supply dynamics. 

Also discussed during the conversation is the impact of El Nino on sugar cane. Matthew details how this phenomenon has influenced global sugar prices, particularly in India and Thailand. While there's optimism about an easing El Nino, the repercussions on the 2024-2025 crop are already visible. 

Matthew explains the influence of policy changes, pricing dynamics, and global energy trends on the allocation of sugar cane for ethanol production, especially in Brazil.

The podcast concludes with a closer look at India's role in the sugar market, its production challenges, and the delicate balance it maintains between domestic priorities and global market influence. 

Host: Subramani Ra Mancombu; Producer: Siddharth Mathew Cherian

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups

As we step into 2024, the rate-hike cycle by global central banks is almost done. But when will global interest rates begin to trend lower? How will it impact growth? In the latest episode of State of the Economy podcast, businessline’s Lokeshwarri SK, speaks to Achala Jethmalani, Economist, RBL Bank, on various aspects of global and domestic economy. The conversation covers topics including the global growth outlook, interest rates, bond yields, and the trajectory of major currencies like the US dollar and the Indian rupee. She also shares crucial insights on the upcoming interim budget including the likely market borrowing of the Centre.

Jethmalani emphasises that 2023 marked the peak of policy rates in advanced economies, and as 2024 begins, central banks are expected to initiate a phase of rate cuts. The discussion revolves around the pace and timing of these cuts, with a focus on the US Federal Reserve, which is anticipated to deliver its first rate cut in June. 

The discussion details the potential risks to the projected growth, including geopolitical tensions, supply chain disruptions, and the impact of elections globally, especially in the US and India. Jethmalani also addresses the potential for inflation spikes, citing factors such as geopolitical issues and disruptions in the Red Sea logistical aspect. 

The podcast also discusses the movement of the US dollar, with insights into its current strength and the factors influencing it. The inclusion of Indian bonds in global indices by JP Morgan and Bloomberg is discussed as a potential driver for significant capital flows into the Indian debt market. 

Jethmalani also gives us an idea of what to expect from the Union budget this year, especially about government borrowing figures. She expresses optimism about the debt market in 2024, expecting it to be favourable with subdued supply and potential positive surprises. 

The podcast provides a comprehensive analysis of the global economic landscape for January 2024, touching on key factors shaping growth, inflation, currency movements, and the outlook for financial markets. 

(Host: Lokeswarri SK, Producer: Anjana PV)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups