Dear Readers,
Introduction: Celebration of Raksha Bandhan, Independence Day, Birthday of Supreme Lord Krishna and Lord Ganesha were celebrated happily with distribution of sweets. Devotion and worship of Maa Durga will be from 22nd September to 1st Octoberand will be over with Dusshera on 2nd October 2025 when Lord Rama killed the demon king Ravana to rescue his wife, Ma Sita who was being kidnapped by King Ravana. This day in eastern India is also celebrated as “Vijoya Dashami” when Maa Durga had killed demon ‘Mahishasura’ and his army to release humanity from bondages and evil doings. It is one of the auspicious Hindu festivals celebrated all over India. ‘Bharatvaasis’ living overseas also celebrates the festival with grandeur. The idol of Maa Durga sitting on her celestial mount the Lion in a fierce form killing ‘Mahishasura’ is made up of clay and straw and is decorated with beautiful ornaments giving an ethereal touch.
Pitra Paksha (also called Shraddha Paksha) is a 16-day period in the Hindu calendar (this year from 9th to 20th September) when people pay homage to their parents / ancestors through rituals and offerings. It is a time for expressing gratitude and remembrance of departed souls.
Cover Story – Travel and Tourism: Travel and tourism industries have been contributing to the growth of the economy.In 2024 it had contributed around 6.6% of GDP. It has been creating innumerable jobs and is predicted to further support towards creating another 48 mn jobs approximately in near future.
Tourism is contributing significantly to India’s GDP growth, job creation and infrastructure development. World Travel & Tourism Council (WTTC) estimates that with the right government support it could grow its annual GDP contribution to ` 43.25 trn by 2034 representing 7.6% of the Indian economy and could potentially employ almost 63 mn people across the country. The sector has been driving growth of logistics, healthcare, handicrafts, hospitality and other locally made goods. It has been promoting medical tourism as well. The treatment cost is cheaper by 50-70% in India with quality hospitals equipped with modern facilities, highly qualified medical doctors and highly trained paramedics along with ultra-modern labs providing upgraded treatment. India also has been a hub for Ayurveda, Naturopathy, Homoeopathy and Panchakarma since ages. Diagnostics centres in India are well equipped with trained technicians. Tier II & III cities like Pune, Ahmedabad, Jaipur, Kochi Vijaywada and Bhubaneshwar are rapidly transforming themselves as medical tourism centres along with large cities like Mumbai, Delhi, Chennai and Bangalore. NRIs have been coming to India for treatment driven by affordability, family relations and cultural familiarity. Notably, India’s medical tourism is experiencing a remarkable growth; valued at USD 7.69 bn in 2024, it is projected to reach USD 16.21 bn by 2030.
Spiritual tourism to various locations across the country is on the rise. Not only Indians from overseas are joining for festivals; domestic travelers are looking out for spiritual quests. From time immemorial spiritual tourism has been in existence in the country and it is now becoming very popular. Even middle class and poorer strata of the society have been showing interest in spiritual tourism. ‘Char Dham Yatra’ (The 4 sacred pilgrimage sites in India), that is travelling to the revered Hindu shrines of Yamunotri, Gangotri, Kedarnath and Badrinath and also other sacred places of Rameshwaram and Kanyakumari, is becoming very popular. Remote and hard-to-access places are also becoming popular for spiritual tourism. Key places to perform ‘Pinda Daan’, a Hindu ritual being performed for the deceased in Gaya (Bihar), is also becoming popular for spiritual tourism. Rajgir is a place of pilgrimage for the Jain community. Bodh Gaya is a place of pilgrimage for the Buddhists.
Luxury tourism is also growing in India. This is reflected in the expansion of operations by global hospitality chains like Mariott International, Accor, Hyatt Hotels Corporation, Hilton Worldwide, Radisson Hotel Group and others who are now even foraying into the sub-Tier-1 cities in India.
Indian Economy: Domestic consumption, structural reforms, fiscal support and controlled inflation all seem to be driving India’s economy as it enters September 2025. India’s Q1 FY26 GDP figure has come at 7.8% - highest in the last 5 quarters. Multilateral agencies and consultancies agree that growth in FY2025–26 will be between 6.3% and 6.7%.
However, market confidence and foreign demand may be tempered by the impending prospect of high core inflation, severe U.S. tariffs, and continued global econo-mic uncertainty. However, India’s fundamentals remain strong, as evidenced by market confidence, budgetary restraint, and credit rating upgrades, and these imply that India is well-positioned to withstand any shocks.
The IMF forecasts 6.4% GDP growth in 2025 and 2026, solidifying India’s standing as the world’s fastest-growing major economy. The OECD projects India’s GDP to grow 6.3% in FY 2025-26 and 6.4% in FY 2026–27. Citing flexibility in the face of uncertainty, the RBI main-tained a neutral stance and kept the repo rate at 5.50%.
Around 6.5% GDP growth is anticipated by RBI, although external demand is at danger due to US tariffs. Forecasts from the OECD included possible further policy easing before the end of 2025 and inflation of about 4%. The 2025 Union Budget aims to reduce taxes (with 0% income tax on up to Rs. 12 lakh), increase public capital spending, and maintain a fiscal deficit of 4.4% of GDP.
Due to declining food prices, retail inflation fell to an eight-year low in July. However, core inflation is still marginally higher than the RBI’s 4% objective. Strong domestic consumption, which makes up more than 61% of GDP, and resurgence in private investment activity in select sectors, bolstered by a workforce with digital skills and services exports, is reported by Deloitte. However, there is a real risk that U.S. tariffs can disrupt Indian exports which can shave off GDP growth by as much as 1%.
Nevertheless, based on solid fundamentals and a steady outlook, S&P Global Ratings raised India’s long-term sovereign credit rating to ‘BBB’ from ‘BBB-’, with the short-term rating upgraded to ‘A-2’ from ‘A-3’. Both the RBI and S&P Global Ratings emphasised structural reforms and robust domestic demand as pillars that support long-term development in the face of trade concerns. Analysts see profit downgrades in Indian companies, mostly because of uncertainties brought on by tariffs in important industries like consumer goods and textiles. On the plus side, the market is anticipated to be strengthened in H2 2025 by reforms, GST reductions, and more liquidity.
India’s capital markets staged a recovery in FY2025 – equities rebounded strongly with renewed FPI and domestic investor participation.
Global Economy: Global GDP growth is expected to be the slowest since the COVID recovery, at 2.3% to 3.0%. Global trade and investment are being slowed by trade disputes, especially those involving U.S. tariffs. Supply chains are being disrupted by rising protectionism and tariff battles, particularly those between the United States and China. The OECD cautions that trade fragmentation may cause a 0.3% yearly decline in global output. IMF predicts global inflation to decrease to about 4.2%in 2025 and even lower to 3.6% in 2026. Southeast Asia and India exhibit comparatively robust economies. Significant risks include currency volatility, oil prices, and geopolitical conflicts.
IBC: The credit off take from banks has fallen sharply. Banks are flooded with funds as loan credit offtake
is very low or marginal. Entrepreneurs are not taking any risks as a chance failure of the enterprise (even if it is for external reasons which are beyond control of the entrepreneur) gets tagged as fraud with adverse ramifications for the entrepreneur’s family members. Lenders are not ready to give any time to the entre-preneur to cope with the problem or even allow restructuring of the loan along with giving time for payment. RBI Governor Sanjay Malhotra is concerned on the matter as this will affect private investment resulting in unemployment and a fall in GDP. Capital market indicates there will be ups and downs for any enterprise. But an enterprise can also get affected by multiple factors like the following:
1. External effects ― (a) global competition, (b) dump-ing of goods, (c) go slow, strikes, low productivity, (d) unions’ militancy, (e) non-payment or delayed payment by debtors, internal and external, (f) fall in demand, (g) rise in cost of production, (h) creation of excess capacity, (i) incentives like tax holiday, etc. in some region to promote the setting up of new industry ignoring the impact on existing industries.
2. Changes in government regulations and ad-ministrative delays/no action ― (a) frequent policy changes, (b) cancellation of license like that of coal mines, (c) non-payment or long delays in payment by the government and their agencies, (d) reneging on contracts by the government and their agencies, and changing perceptions/assumptions, (e) multi-level and multifold approvals leading to administrative delays, (f) fear psychosis in decision making, (g) public hearing for green environment, (h) imports allowed in spite of the ‘Make in India’ campaign.
3. Changes in banking regulations ― (a) inadequate funding, (b) high rates of front charges compounded every month and penalties, (c) stringent RBI provisioning norms not aligned to market realities, (d) frequent policy changes and compliance norms by regulatory authority, (e) administrative delays leading to heavy cost overrun, (f) errors in judgments by professionals in loan evaluations, (g) inadequate fund given for modernization and/or balancing equipment.
The lender needs to bear with an enterprise in such a situation patiently. But in the event of delay in loan repayment or no payment, the banks term the account as fraud instead of extending support. Entrepreneurs take risks for investment but negative consequences can kill their animal spirit. Their families have been looking for employment outside or prefer to shift overseas.
The Supreme Court, in its judgement, has said the following: –
Further stress and unemployment are created, often killing the animal spirit of entrepreneurs and investors as the account gets branded instead of any support. The product which was being manufactured by the stressed unit gets imported from overseas causing stress in forex reserves if enough domestic producers are not available.
Since the outbreak of the Covid-19 pandemic, for 5 years production of numerous enterprises has fallen. Payment has not been received from the customers; workers had not turned out largely. Default / delay in payments temporarily cannot be termed as fraud. An enterprise’s loss because of external factors cannot be termed as fraud. Loss from non-receipt of pending payments from customers, falling demand and production cannot be termed as fraud.
When TATA Group declaredno new debt will be taken for expansion, other big conglomerates are also trying to become debt free. Many have reduced debts. Stock market has been booming. There have been several IPOs even with large amounts.
Conclusion: Swami Vivekananda, in around 1895, had made inspirational predictions about India’s rise again as a great spiritual power. He had said India will be independent in the year 1947 and by 2047 ‘Bharat’ will become the 3rd largest global country. Prime Minister Narendra Modi has also been declaring that India will become the 3rd largest economy (after the US and China) by that time.
Kumar Mangalam Birla, Chairman, Aditya Birla Group has said “despite risks from global markets, volatility, geopolitical developments and fragmented trade relations, India’s strong fundamentals, resilient financial system and policy focus on long term stability will position it well to sustain growth.” To combat the impact of high tariffs by the US, the urgent need is to boost private investment for increasing the production for further investment. Lenders need to be supportive and patient towards borrowers who are facing temporary difficulties from external shocks. Banking regulations should empower banks to bear with the recovery process and not term all defaults as fraud.
Dr. Arvind Panagariya, Chairman of the 16th Finance Commission of India, highlighting his views on fiscal decentralisation, state finances and governance called for aggressive structural reforms and trade resolution for growth.
