06

Dear Readers,

World Environment Day was celebrated on June 5th to protect Mother Earth. Ratha Yatra was also celebrated on 27th of June where Lord Jagannatha, His elder brother Balabhadra and sister Shubhadra are placed on a decorated chariot and taken to Gundicha Temple. The Ratha Yatra is held at the city of Puri annually, in the state of Odisha.

Guru Purnima is falling on the 10th of July. This is a day to honour our spiritual guru/teachers who have imparted us with wisdom, awaken inner power, balance out power and ignite humanity.

Indian Economy: In FY 2024-25, India’s GDP grew by 6.5%, solidifying its standing as the major country with the quickest rate of growth. For FY 2025–26, the RBI predicts 6.5% GDP growth. The World Bank and IMF predict India’s GDP to grow by 6.3% and 6.5% respectively in the upcoming fiscal year.That ensures India’s ‘fastest growing global economy’ status for one more year.

UBS has revised India’s FY26 GDP growth forecast upwards to 6.4% from 6%. However, there are reports of reduction in capital expenditure due to global uncertainty. In rural areas, household spending will recover due to good monsoon and lower food prices. But due to rising global trade barriers exports will be weak, investment growth will be slow with uncertain and impractical policies and regulations. It is said that inflation remains contained. Fiscal consolidation is expected to continue with growing tax revenue and declining capital expenditure. India’s external debt has increased to USD 736.3 bn, that is 91% of GDP at the end of March 31, 2025, which is higher than USD 668.8bn a year ago. US dollar debt is the largest part of India’s external debt. FM Nirmala Sitharaman said India is not a tariff king as said by US president Donald Trump. India and the US are in a considerable trade negotiation at present having a high reciprocal relationship. External challenges may hit India’s growth. She further added the service sector continues to be the main driver of growth. “We need to do a lot more to boost merchandise exports. The country still suffers from many taxes at the state and local levels that are not fully eliminated for exporting firms. Manufacturing, whether employment intensive or automation driven, will be given policy support. But these lines are becoming thin. There is fluidity in the labour market”, FM said.

She also said that multiple reforms towards reducing the burden on trade were carried out by cutting down tariffs to support manufacturing and value addition, promote exports and facilitate trade. India is not just about exporting raw foods or commodities. It is exporting today well engineered products which meet high standards.

Government maintains its growth outlook for FY26 in the range of 6.3-6.8% supported by consumption, especially in the rural areas, and service exports. India’s current account balance is having a surplus of USD 13.5 bn in the fourth quarter of FY25. Overall CAD (current account deficit) stood at USD23.3 bn (0.6% of GDP) during FY25, compared to USD 26 bn during FY24.

IMF has predicted India will surpass Japan by the end of 2025 and will overtake Germany by 2028.

Animal spirit of the entrepreneurs for taking risks has still not revived. Credit growth has fallen. Bank credit growth slows down significantly to 9.6% in June 2025, but MSME lending rises to 17.8%. Tata group has said that they will not spend on expansion by taking any debt. India’s overseas financial assets surged in 2024-25, driven by outbound direct investments, currency, deposits, and reserve assets.

IBC: Government will finalise the changes in Insolvency and Bankruptcy Code (IBC) code with approval from the Prime Minister’s Office (PMO). The proposed amendments include creditors-led resolution, cross-border insolvency and corporate group bankruptcy. A cabinet note for approval will soon be moved and the amendments are expected in the monsoon session of parliament.The aim is to reduce timelines, value erosion and increase investors’ participation. It also aims to empower the Committee of Creditors (CoC) towards directing the resolution process. The CoC in India’s IBC process has seen recent updates focused on enhancing transparency, accountability and efficiency. Key changes include mandatory formation of a Monitoring Committee to oversee resolution plan implementation, guidelines for CoC conduct, and increased accountability for CoC members. Instead of taking haircuts (as high as 82%), lenders, in order to achieve better outcomes, need to undertake restructuring of debt with reduction in interest rates, and use simple interest rate instead of compounded interest rate.

Entrepreneurs will have confidence if lenders are supportive when the enterprises are affected by external factors which are beyond their control. Support by lenders at critical times will be instrumental in reviving the animal spirit in investors and this, in turn, will boost employment and growth in the economy and restrain eroding national assets. The lenders need to support the entrepreneurs during the time of distress for the greater good of the economy.

Global Economy: Global growth is projected to slow down to 2.9% both during 2025 and 2026. As Indermit Gill, Chief Economist, World Bank has said the world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep.

Indian Healthcare Sector: India has over 1.4 bn population. All are not getting proper healthcare facilities and treatment. Challenges include inadequate infrastructure, lack of healthcare professionals, shortage due to lack of healthcare education, and others. Lakhs of Indian students are going overseas for healthcare education. It has the potential to become the largest sector for employment and economic growth. Well-to-do persons are going overseas for treatment. Private sector investment in the sector is not much due to various regulations and obstacles.

Indian government spending on healthcare is not adequate. The healthcare budget is kept at 1.97% of GDP in FY26, marginally higher than 1.9% of GDP in FY25. Healthcare insurance has high premiums, not covering many diseases and past illnesses, and also leading to delayed claim settlements.

Lakhs of Indians are working overseas in the healthcare industry. Many are in top positions. India’s healthcare sector has the ability to blend the traditional with modern. Traditional yoga, ayurveda and herbal science can be blended and further developed to supplement modern medicines and healthcare technologies.

The increasing intervention of AI across technologies, industries and services has opened up vast opportunities for the healthcare industry which is undergoing a digital transformation with technological advancement.

As said by Swami Vivekananda India will be one of the largest nations by 2047. It is essential to encourage the entrepreneurs to revive their animal spirit so that they come forward to invest with their own and mobilised funds. It is essential for lenders as well to support them during hard times and not to show aversion.