India’s Economic Growth Supported by Domestic Engines
Despite global tensions, India’s growth outlook remains strong, according to the Reserve Bank of India’s (RBI) monthly bulletin. However, some indicators showed a slowdown in the second quarter of 2024-25 due to factors like heavy rains in August and September.
Private Investment and Consumer Spending
Private investment is showing positive signs, and consumer spending is expected to rise during the festival season, especially in smaller towns and cities. Although high prices are affecting enthusiasm, many consumers are focusing on discounts and spending on items like clothing, electronics, and home decor.
Inflation and E-commerce
Inflation increased in September due to a statistical base effect and rising food prices. While initial e-commerce sales were disappointing, retailers anticipate a late-season boost. Consumer spending is projected to be 25% higher than last year’s Dussehra Diwali.
Foreign Investments and IPO Market
Foreign portfolio investments in equities and debt were strong from June to September 2024, driven by India’s growth story and a booming IPO market. India has led the global IPO market in 2024, with significant contributions from SMEs and the mainboard segment. However, in October, foreign investors have been net sellers, offloading Rs 3,734 crore worth of equities.
Doubts Revealed
RBI -: RBI stands for Reserve Bank of India. It is the central bank of India, which means it manages the country’s money and financial system.
Domestic Engines -: Domestic engines refer to the factors within India that help the country’s economy grow, like people buying things and companies investing money.
Global Tensions -: Global tensions mean problems or conflicts happening in the world that can affect countries, like wars or trade disputes.
Inflation -: Inflation is when the prices of things we buy go up, so we need more money to buy the same things.
E-commerce -: E-commerce is buying and selling things online, like when you shop on websites like Amazon or Flipkart.
IPO -: IPO stands for Initial Public Offering. It’s when a company sells its shares to the public for the first time to raise money.
Net Selling -: Net selling means that more shares or investments are being sold than bought, which can affect the stock market.