Can India's Middle Class Reshape the Global Economic Landscape?

Good Morning ☕

Picture this: a land of vibrant spices, intricate saris, and an endless array of mouthwatering curries. But behind the kaleidoscope of colors and flavors lies a quieter revolution, one that's positioning India on the cusp of an economic spectacle. Imagine a country where the middle class isn't just a demographic, but a bustling force of well-educated, English-wielding enthusiasts. They're not just consumers; they're creators, driving world-class IT innovations and crafting life-saving pharmaceutical potions.

Important News of the Day

1. Prime Hurdles For India To Become An Economic Superpower

India is quietly laying claim to economic superpower status, with a large, well-educated, often English-speaking middle class, world-class IT and pharmaceutical sectors, and strong consumer demand accounting for about 55% of the economy. However, there are doubts about whether India's population growth will lead to a growth in wealth and influence. India's ability to grow its manufacturing sector and challenge China as the world's No. 1 exporter will be key to its continued rise. While India could become an economic superpower by 2047, it will not be easy and there are other factors to consider.

2. India's Plan To Replace Dollar With Rupee For It's Trade

India is pushing to promote the Indian rupee as an alternative to the dollar and other currencies in international trade. The country's commerce secretary, Sunil Barthwal, announced that India is willing to trade in rupees with countries facing currency shortages or a dollar crunch. This move aims to boost India's exports and provide support to countries in need. India's new foreign trade policy, set to be adopted from April 1, includes measures to promote rupee trade and increase exports. The country has also signed an agreement with the United Arab Emirates to settle trade in rupees instead of dollars

3. CPI Inflation at 15-month peak pushes rate cut target to FY25

India's retail inflation rate based on the Consumer Price Index (CPI) surged to a 15-month high of 7.44% in July 2023, breaching the Reserve Bank of India's (RBI) tolerance level of 6%. The RBI had estimated average inflation slightly above 5% for FY2024, but the recent surge in inflation has pushed the target for rate cuts to FY25. Economists predict that the RBI may hike the repo rate after the CPI inflation breached the upper tolerance band. The RBI is likely to remain on a wait-and-watch mode, and the chance of any rate cuts in FY24 seems slim for now.

4. Legal-tech startup LegalPay launches online dispute resolution platform

LegalPay, India's largest litigation financier, has launched an online dispute resolution platform to manage and solve 1 lakh cases by the end of December 2023. The platform aims to decongest the Indian legal system by enabling litigants to communicate about disputes online and reach a resolution outside the courthouse in an agreement that can be authorized and enforced by the courts. LegalPay's advanced reporting tool allows users to view batched transactions, online statements, chargebacks, and retrieval data in one safe and secure place.

5. Germany, Spain join Mazagon Dock, L&T in contest for Rs 40,000 crore Indian submarine deal

Thyssenkrupp AG from Germany and Spain's Navantia are vying for a $4.8 billion contract to construct six submarines in India. This is part of India's plan to boost its naval strength amidst China's growing naval influence in the Indo-Pacific. India aims for technology transfer and enhanced submarine tech. Moving away from Russian military gear due to geopolitical tensions, India desires to be a defense tech manufacturing hub. Currently, India has 16 submarines but needs 24 to counter China. Bid evaluations are underway, involving both local and international entities.

6. Insurers will place a vital role in India’s green-energy transition

Insurers will play a vital role in India's green energy transition, according to a recent opinion piece in LiveMint. The article argues that insurers can help address environmental and social challenges by mitigating climate risk, advancing the energy transition, building societal resilience, and driving affordable insurance with digital solutions. The insurance industry can assist in improving the bankability of various renewable energy projects, which will help India scale up renewable energy, develop green hydrogen, and stimulate climate finance for low-carbon energy investments.

7. Cabinet approves ₹13,000-crore Vishwakarma Yojana

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the 'PM Vishwakarma Yojana' which aims to provide subsidized loans up to Rs 2 lakh to craftsmen. The scheme is part of a unique package of innovative schemes for farmers with a total outlay of Rs 3,70,128.7 crore. The Cabinet also approved the establishment of the National Research Foundation (NRF) to promote research and development in India's universities, colleges, research institutions, and laboratories. The NRF will be headed by the Prime Minister and will comprise eminent researchers and professionals.

8. PM e-Bus Seva Scheme announced, 10000 electric buses to be deployed in 100 cities

The Indian Cabinet, led by Prime Minister Narendra Modi, approved the PM e-Bus Sewa Scheme, allocating Rs 57,613 crore for it. The scheme aims to introduce 10,000 electric buses in 100 cities to promote green mobility. The central government will contribute Rs 20,000 crore, with state governments covering the rest. The scheme will prioritize cities without organized bus services and will operate on a public-private partnership model until 2037. The government is also planning to come up with an electric bus tender to procure around 3,500 new e-buses for nine cities with a population of over 4 million each.

9. Cabinet approves outlay of Rs 14,903 crore to expand Digital India programme

The Indian government has approved the Vishwakarma Scheme, which will be launched in September with an allocation of Rs 13,000 to 15,000 crore ($1.7 to $2 billion). The scheme aims to improve the quality, scale, and reach of the products and services of artisans and craftspeople, integrating them into the global market. The scheme is part of the government's efforts to support traditional skills and promote entrepreneurship.

10. Cabinet approves 7 projects for Indian railways with an outlay of Rs 32,500 cr

The Indian Cabinet, under PM Narendra Modi, approved seven railway projects worth Rs 32,500 crore. These projects, to be built using the EPC mode, will extend the railway network by 2,339 km. The funding, entirely from the central government, will span 35 districts in multiple states. These projects aim to enhance operations, ease congestion, and add freight capacity of 200 million tonnes per year. The interdependence of these projects was highlighted by Railway Minister Ashwini Vaishnaw. The government stated that these projects will generate employment of 7.06 crore person-days in the selected states.

World News 🌎

• The Netherlands falls into a technical recession

• Germany to invest 5mn euros in India to promote tourism

• President Xi under pressure to take bold steps as China's economy slows after surprise rate cut

• Cargo ship exits Ukraine port despite threat from Russian navy

• China hides youth unemployment figures as economy falters

• Kim Jong Un writes to President Putin, vows deeper ties between N Korea, Russia

• UN envoy says ICC should prosecute Taliban for crimes against humanity for denying girls education

• US: Donald Trump denounces fourth indictment, says will present 'irrefutable' report

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