Dear Readers

On 15th August 2023 India had celebrated the completion of Her 76th
Year of Independence. The Nation is on the path of growth and on the path
of becoming one of the world’s 3rd largest economy. By 2047, the country
will become one of the powerful nations. On 23rd August 2023, India
created history by becoming the first Nation to soft-land a spacecraft near
the moon’s South Pole. India’s Chandrayaan-3 mission has been hailed as
a great success by the entire world. It is the fourth country to achieve the
milestone after Russia, US and China. Chandrayan-3 project cost stood at
around ` 615 crore whereas the cost of Chandrayan-2 project was around `
980 crore. All Indians felt the pride for this great scientific success. We
hear the story that Baby Lord Krishna asked His mother to bring the moon
to Him. In no way she could stop His weeping. At last Maa Yashoda
showed the moon in a big plate on water which was a reflection of moon
making Baby Lord happy. It might have happened to many children all
over the world.
Chandrayaan-3 is a giant leap for India’s space ambition. India made a
towering effort to be on the moon and Moon Tourism may one day
become a reality in addition to carrying out extensive research on moon.
The landing spot being named as “Shiva Shakti” by honourable PM Modiji
shows a sense of connectedness from Himalaya to Kanyakumari. The
name also shows faith in Gods and Goddesses and Nationalism.
Indian Economy: Moody’s investor service affirms India’s sovereign
credit rating to Baa3 and maintained a ‘stable’ outlook despite high debts.
India’s fiscal deficit was brought down from 9.2% in FY21 to 6.7% in
FY22 and then to 6.4% in FY23, and it is expected to go further down to
5.9% in FY24. For the week ending on 18 August 2023, the forex reserves
fell by USD 7.2 billion to USD 594.8 billion, and Reserve Bank of India

(RBI), the central bank, is likely to increase market intervention to curb
volatility in the rupee’s exchange rate. Moody expects high nominal GDP
growth and ongoing fiscal consolidation to stabilize government debt
burden at high levels.
Investment Information and Credit Rating Agency ICRA has projected
India’s growth rate in Q1 FY24 at 8.5%, higher than SBI’s projection of
8.3% and RBI’s 8%. Inflation in food items is likely to remain transitory
due to government measures and arrival of fresh crops. Prices of onions
and tomatoes and other food items are transitory since those are not grown
during the rainy season from time immemorial. Some dry parts of the
country might have produced the crops. Consumers are not to blame the
farmers. It is better to eat seasonal vegetables for health benefits. Also, for
steady round-the-year supply of vegetables at reasonable prices, the
government must create a robust pan-India network of cold storages, either
on its own or by mobilising private investments through a conducive
policy framework.
The Finance Minister Nirmala Sitharaman said that using interest rates as
the only tool to deal with inflation is not right all the time and supply line
has to be increased. Despite good growth rate, enough jobs are not being
created. Both public and private sectors’ animal spirit needs to be
unleashed. Private sectors entrepreneurs’ interests must be protected from
the vagaries of external factors by providing timely approvals while
undertaking new projects and by allowing debt restructuring facilities. RBI
has advised banks to have better communication with the borrowers and
not to impose high rate of penal interest and other charges.
FM has advised RBI to keep growth priority in mind and not to use
interest rate as the only tool to tame inflation.
Inflation may be due to global uncertainty and domestic disruptions and
may continue in the coming months. The recent price surge in certain food
items is expected to be transitory.

World Economy: The US Federal Reserve may need to raise interest rates
further to ensure inflation is contained. Policymakers are entering a new
phase of their campaign to bring inflation back to the Fed’s 2% target and
have signalled wrapping up rate hikes.
India Inc: India Inc has been on a debt reduction spree thereby bringing
down cost of interest and increasing profit. Risk of external factors affects
many and thereby endangers timely servicing of debt.
G-20 members agreed to an action plan on mapping global value chain and
increasing participation of small industries in exports and digitization of
trade documents to further global trade. USD 4.5 trillion will be needed
over the next 7-10 years to finance all the development goals.
Government has given subsidy of ` 200 to LPG cylinder to tame inflation.
Government should also reduce GST on consumer items etc. to curb
inflation. Hike in interest rates, increase in the cost of production, capital
expenditure, logistics cost and others will only restrain economic growth.
Debt distress has not only given anguish to the entrepreneurs but also to
their family who are in great hardship. Several NRIs have come to India to
invest their hard earned money to set up business ventures, but due to
several factors lost every penny falling in debt trap, inability to service
debt, and ultimately coming under the glare of investigative agencies.
Many times, organised campaigns to defame such individuals are carried
out. Police cases are filed against them leading to ED inquiries under
PMLA Act 2002.
According to Ruchir Sharma, Chairman, Rockefeller International and
Founder of Breakout Capital, there is fear among domestic businesses.
Both economically and politically, if there’s one thing which should
concern the Modi government, it is the weaponisation of the investigative
agencies which has resulted in wanton destruction of wealth and
entrepreneurship. Sharma said that India is currently facing the fourth
wave of foreign capital inflows since 1991 economic reforms. Indian
market is very diverse and has been generating quality companies giving

very good returns. The way digitization has been embraced is definitely
something which has propelled India and the markets ahead.
Conclusion: Government and RBI should have consistency on reform
policy and considerate attitude for the enterprises affected by external
factors in servicing the debts so that the wealth and job creators do not
become adverse and lose their animal spirit. Family young members’
entrepreneurship should not be destroyed. They should not become job
seekers instead of jobs creators. Capital expenditure from both public and
private sectors is needed to keep the growth engine running and to serve
the increasing population by creating new employment and income.

Dr. H.P. Kanoria

Editor