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Slow recovery of low income households slowed down India’s economic recovery



The slow economic recovery of the low income households post Covid-19 pandemic has resulted in the overall economic recovery of the country, said Kotak Securities Ltd.

In a research report, Kotak Securities said, post Covid-19 pandemic, India’s economic recovery seems to be lukewarm on a three-year compounded annual growth rate (CAGR) basis.

The major economic parameters reveal slow post-pandemic recovery, with gross domestic product (GDP), goods and services tax (GST) collections, electricity demand, credit growth and auto sales growing somewhat slowly as against the expectations.

Kotak Securities attribute the weaker-than-expected recovery to the slow ‘repair’ in the income of low-income households.

“It may take a few more quarters for growth to recover to full potential,” the report said.

India’s 1QFY23 GDP grew at 1.3 per cent CAGR over the past three years, despite growing 13.5 per cent year-on-year (YoY).

According to the report, the survey-based employment data suggests that India has not completely recouped all the jobs lost during the pandemic.

“While formal job creation has been robust, the employment conditions remain frail in the lower-income groups, as employment-seeking under MNREGA is yet to reach pre-pandemic levels,” the report said.

It may take a few more quarters for employment and income to recover to pre-pandemic levels.

The six month GST collections in FY23 logged a growth of 13.8 per cent on a three-year CAGR basis.

The high wholesale price index (WPI) in the last couple of years may have helped higher GST collections in this period. The expectation is that the WPI will sharply trend lower over the next several months.

Collections have grown at a higher pace than nominal GDP growth rate (9.5 per cent on a three-year CAGR), suggesting some widening of the tax base.

On the industrial growth front, India’s indicators look rosy on a yoy basis but lose their sheen when examined on a three-year CAGR basis.

In particular, diesel consumption in 5MFY23 declined by 0.4 per cent and electricity demand grew at 4.7 per cent on a three-year CAGR basis.

Meanwhile, gross fixed capital formation (GFCF) has seen a muted 2.2 per cent CAGR over the past three years, despite strong government and household investment.

Household investment in real estate was a key driver, seeing a 14 per cent three-year CAGR in major cities, while the Central government capex increased at 23 per cent three-year CAGR. As such, industrial production and private-sector investment are yet to show a meaningful recovery.

Private consumption has not seen much of a recovery, with private final consumption expenditure (PFCE) growing at 3.2 per cent on a three-year CAGR basis, Kotak Securities said.

The shallowness of the recovery is prominent in the automobile sector, especially in two wheelers as their sales volumes have declined at six per cent CAGR over the past three years (5MFY23 over 5MFY20), while hatchback (entry segment) volumes have increased at 3.2 per cent CAGR in the same period.

Air passenger traffic has also not seen a complete recovery in 5MFY23.

“We note that retail credit growth has been resilient at 15.3 per c ent CAGR, but not enough to pick up the slack in overall bank credit growth,” Kotak Securities said.


Google Play introduces UPI Autopay payment in India




Google announced on Tuesday that it is introducing UPI Autopay as a payment option for subscription-based purchases on Google Play in India.

Introduced under UPI 2.0 by NPCI (National Payments Corporation of India), UPI Autopay helps customers make recurring payments using any UPI application that supports the feature.

“With the introduction of UPI Autopay on the platform, we aim to extend the convenience of UPI to subscription-based purchases, helping many more people access helpful and delightful services – while enabling local developers to grow their subscription-based businesses on Google Play,” Saurabh Agarwal, Head of Google Play Retail & Payments Activation – India, Vietnam, Australia and New Zealand said in a statement.

Moreover, UPI Autopay makes setting up subscriptions easy.

Users need to simply tap on the payment method in the cart, select “Pay with UPI,” and then approve the purchase in their supported UPI app after selecting a subscription plan to purchase.

Google Play helps consumers transact safely and seamlessly in more than 170 markets, according to the report.

Also, the platform supports over 300 local payment methods in over 60 countries, removing complexities associated with finding and integrating local payments.

UPI is one such payment option, introduced on the Play Store in India in 2019.

In India, UPI has transformed the mobile payment framework, and on Google Play as well, many people are enjoying and using apps that take advantage of UPI-based transactions, the statement added.

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Invest Karnataka 2022 paved way for Rs 9.82 lakh cr investment: CM Bommai




Karnataka Chief Minister Basavaraj Bommai announced at the concluding ceremony of the 3-day Global Investors Meet (GIM) in Bengaluru that “investments totaling about Rs 9.82 lakh have been committed in diverse sectors in the state.” Bommai thanked the participants in the event and investors.

Addressing the gathering, the CM said, “This GIM is different from other such Investor Meets as this has been organised during challenging times and has succeeded in showing us the way forward. What Karnataka thinks today, India thinks tomorrow. We will work with the investors shoulder to shoulder to make all these investments fructify on the ground.”

Thanking all the investors and delegates who participated in the GIM 2022, Karnataka Large and Medium Industries Minister, Murugesh Nirani, said “Invest Karnataka has laid a strong foundation for the development of Karnataka in the next five years. I am happy that we have met the core objective of this GIM, which is to bring in investments in diverse sectors and create jobs, and take industries beyond Bengaluru.”

The valedictory session was also attended by Bhagwanth Khuba, Union Minister of State for New and Renewable Energy, Chemicals & Fertilizers.

Inaugurated by Prime Minister Narendra Modi virtually on Wednesday, the event culminated on Friday with the valedictory session in which Chief Minister Basavaraj Bommai re-assured investors from all across the world of sustained support by his government.

Among top industrialists, Chairman of Jindal Group, Sajjan Jindal; Vice Chairman of Toyota Kirloskar Motor Pvt Ltd, Vikram S. Kirloskar; Chairman, Wipro, Rishad Premji; Vice Chairman, Bharti Enterprises, Rajan Bharti Mittal; CEO, Adani Ports and SEZ, Karan Adani and MD, Sterlite Power, Pratik Agarwal shared their experience in Karnataka and expressed continued interest in the state.

The Global Investors Meet witnessed 30+ immersive sessions spread across three days. These sessions were a mix of innovative formats such as panel discussions, fireside chats, and TED-style talks.

In addition to the speaker sessions, a number of networking events, cultural performances, business exhibitions (with 300+ exhibitors), and country sessions ran parallelly across the 3 days. The country sessions were hosted by partner countries — France, Germany, Netherlands, South Korea, Japan and Australia.

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Unfortunately, there is no choice: Musk on Twitter layoffs




Elon Musk on Saturday said that there is no choice other than brutally firing half of Twitter’s workforce as the company is losing over $4 million a day.

After axing nearly 3,800 employees across the globe, including in India, the new Twitter CEO said that he has given three months of severance to everyone who has been asked to go.

“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day,” Musk tweeted.

“Everyone exited was offered 3 months of severance, which is 50 per cent more than legally required,” he added.

Musk has laid off people across the departments at Twitter, eliminating several teams across the globe.

He also said that Twitter has seen a massive drop in revenue as activist groups are putting undue pressure on its advertisers.

“Again, to be crystal clear, Twitter’s strong commitment to content moderation remains absolutely unchanged. In fact, we have actually seen hateful speech at times this week decline below our prior norms, contrary to what you may read in the press,” he posted.

“Twitter will not censor accurate information about anything,” said Musk.

On charging $8 for the Blue subscription service, he said: “Trash me all day, but it’ll cost $8.”

The company lost $270 million in the April-June period after revenue slipped 1 per cent to $1.18 billion, reflecting advertising industry headwinds.

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