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Dear Readers

We have celebrated Janmashtami, birth of Lord Krishna. As an incarnation of Lord Vishnu, He was born as a son of Vasudev and Devaki, as they were granted a boon for their severe penance (worshipping without food and living in austerity). They wanted Lord Vishnu as their son. Lord Krishna came eliminating all the evil forces who were destroying the good elements and personalities. He developed environment, dairy and cattle rearing for prosperity.

Lord Kirshna’s main teachings – “Do the Karma (work) with best of efforts and ability as an offering to the Lord. See Me in everything and everything in Me. One who leaves the body remembering whatever objects attains that object in another life. Always remember Me and do your duties. Fix your mind and intellect on Me. Welfare of my devotees is taken care by Me. Setting aside all Dharma just surrender completely to My will with firm faith and loving contemplation. Do not grieve for the demised one as the body dies but the soul is immortal.”

Lord Vishwakarma’s (Lord of Engineering) puja is also celebrated in the month of September. The birth of Lord Ganesha will be celebrated on 7th September. Lord Ganesha grants fortune and destroys all the evil forces and is remembered before starting a business / enterprise or a journey / or any other difficulties.

Cover Story: Banks have played and has got an important role in the growth of economy, agriculture and all sectors; by taking deposits of the savings of people and subsequently lending that for the growth of the economy. Banks and financial services are governed and monitored by the Central Bank, Reserve Bank of India. RBI claims that the banking sector in India is actively capitalized and well regulated.

Indian commercial banking system consists of 12 Public Sector Banks, 21 Private Sector Banks, 44 Foreign Banks and 12 Small Finance Banks.

Indian Fintech industry is estimated to be at USD 150 billion by 2025. India has the 3rd largest FinTech ecosystem globally. India is one of the fastest growing Fintech markets. There are currently more than 2,000 DPIIT-recognized Financial Technology (FinTech) businesses in India, and this number is rapidly increasing. In 2023, total assets in the public and private banking sectors were USD 1,686.70 billion and USD 1,016.39 billion respectively.

The Indian digital consumer lending market is projected to surpass USD 720 billion by 2030, representing nearly 55% of the total USD 1.3 trillion digital lending market opportunity in the country.

Indian Economy: Moody's has raised India's GDP growth rate to7.2% from 6.8%. There is a general anticipation that rural demand would significantly improve and recover. Fitch has kept unchanged India’s sovereign credit rating at ‘BBB-‘(BBB minus) with a stable outlook. Fitch also noted that India is to remain among the fastest growing nations with a GDP growth of 7.2% in FY25 and 6.5% in FY26.

Public Works Capex is still a major factor in growth. Construction work in infrastructure and real estate is expected to stay robust. Manufacturing investment might also rise, especially in particular sectors like electronics.

According to chief economic advisor V. Anantha Nageswaran, the economy is expected to increase by 6.5-7% in the current fiscal year. Due to a decrease in the production of natural gas and crude oil, decrease in government spending and private investment, the growth of the core sector, which consists of eight important infrastructure businesses, slowed to 6.1% in July.

However, over the next two years, India's GDP is predicted to expand by more than 6%, indicating the country's high economic potential. With an 8% yearly growth rate, India's economy might reach USD 55 trillion by 2047.

The GDP is predicted by most experts to expand by 7% or just slightly less for the entire fiscal year 2025. This is marginally less than the 7.2% RBI estimate. Additionally, economists cautioned that regulatory actions regarding unsecured lending and the delayed effects of rising interest rates would reduce discretionary demand.

A base effect and lower food costs have caused retail inflation to drop to a five-year low of 3.54%. Fiscal shortfall for FY25 might be less than anticipated.  The strongest rate of growth in over five quarters was seen in FDI inflows, which increased to USD 22.4 billion from April to June 2024, up 26.4% (year-on-year), amid indications that cross-border investment is expanding globally.

Governor of RBI Shaktikanta Das anticipates a rise in government spending in the second and third quarters, which would accelerate the GDP growth rate, which had fallen to 6.7% in the April-June quarter from 8.2% in the same period last year.

In his third term, Prime Minister Modi-ji promised to accelerate government activity. He emphasized that the world's economic progress depended on India's, and that country is a ray of hope and prosperity in an uncertain world. According to him, collaboration between the government and the private sector will be the key to India's growth trajectory.

Policy interest rate reductions should not significantly affect India Inc's profitability. Steel and power generating will be two of the major industries. The industries that stand to benefit most from any reduction in lending rates are paper, textiles and agricultural chemicals. Debt's involvement in the expansion cycle has decreased since private capital expenditures have been meager since the Covid pandemic and IBC process.

With an anticipated investment of Rs.28,602 crore, the Cabinet Committee on Economic Affairs, presided over by Prime Minister Modi-ji, has approved the creation of 12 industrial smart cities spread over 6 main industrial corridors in 10 states.

Central government’s fiscal deficit in the first four months (April-July) of the current financial year stands at Rs. 2.77 lakh crore which works out to 17.2% of the full year target and is lower than the corresponding figure of 33.9% in the same period last year.

India has a trade deficit with 75 countries, including China and Russia, in the first half of this year, while it has a trade surplus with 151 countries, including the US and the Netherlands.

Conclusion: Modi-ji stated at the ET World Leaders Forum that India is currently a land of opportunity and that the government is encouraging all efforts.  Today, Bharat is creating a singular success narrative. The nation’s economic performance clearly demonstrates the effects of the regulatory changes. In actuality, Bharat has frequently surpassed both its rivals and forecasts.

Here, I would like to mention that the banking sector of any country has also a social responsibility. They should not be like the character Shylock from William Shakespeare’s Merchant of Venice. Banks should not be harsh with borrowers facing difficult situations and need to bear with them as historically ups and downs, good and bad are bound to happen. Government and bankers / lenders should consider how to save an enterprise by restructuring and allow time to the debtors to pay back instead of opting for IBC process where the enterprise remains a going concern continuing to make losses or even stop production entirely, thus affecting employment and the chances of revival of the borrowing company.