Inflation Eases, Growth Picks Up, Crisil’s Economic Forecast For FY26

by with No Comment Economy

India’s economy is poised to grow at 6.5 percent in the financial year 2025-26 (FY26), slightly surpassing the 6.4 percent growth forecast for the current fiscal year, according to a recent report by Crisil.

The report underscores that a combination of lower inflation and anticipated rate cuts by the Reserve Bank of India (RBI) will support economic growth, assuming there are no major global shocks and the country experiences a normal monsoon.

“Lower inflation and the RBI’s rate cuts are expected to lift growth next fiscal, assuming a normal monsoon and lower crude oil prices,” the report said.

While government spending will continue to be a key growth driver, Crisil highlighted that the fiscal impulse will weaken as fiscal consolidation advances. A critical factor for sustaining growth would be the revival of private sector investments, which need to gain momentum.

Export prospects, however, face headwinds due to global trade challenges, including tariff hikes by the United States.

On the inflation front, Consumer Price Index (CPI) inflation is projected to decline from 4.7 percent in FY25 to 4.4 percent in FY26, largely due to favorable monsoon expectations, a high base effect in food inflation, and softer global commodity prices. Nevertheless, non-food inflation may see a slight uptick due to an adverse base effect.

If inflation approaches the RBI’s target of 4 percent, it could pave the way for further rate cuts, potentially boosting economic activity.

India’s fiscal deficit, which stood at 5.6 percent of GDP in FY24, is expected to decrease to 4.8 percent in FY25 and further to 4.4 percent in FY26. This improvement will be driven by controlled revenue spending while maintaining a strong emphasis on capital expenditure.

On the external front, the current account deficit (CAD) is expected to widen from 1.0 percent of GDP in FY25 to 1.3 percent in FY26, primarily due to export challenges linked to U.S. trade policies. Despite this, a strong services trade balance, steady remittances, and lower crude oil prices are anticipated to limit the deficit’s expansion.

The Indian rupee is projected to depreciate gradually, averaging Rs 86 per dollar in FY25 and Rs 87 per dollar in FY26. Crisil warned that geopolitical uncertainties could lead to currency market volatility despite the CAD remaining under control.

(Inputs from ANI)

Asian Stocks Slump, Dollar Soars As Trump Tariffs Trigger Trade War Fear

by with No Comment Banking & FinanceEconomy

Asian stock markets slumped on Monday and U.S. equity futures pointed sharply lower after U.S. President Donald Trump’s tariffs on Canada, Mexico and China triggered fears of a broad trade war and hit to global growth.

The U.S. dollar shot to a record peak against the Chinese yuan in offshore trading, and its highest against Canada’s currency since 2003 and the strongest against the Mexican peso since 2022.

Japan’s Nikkei share average tumbled as much as 2.3% in early trading, and Australia’s benchmark – which often functions as a proxy for Chinese markets – slumped more than 2%.

Stocks in Hong Kong, which include listings of Chinese companies, fell 1.9% after a Lunar New Year holiday. China’s markets resume trading following the holidays on Wednesday.

Pan-European STOXX 50 futures  sank 2.7%.

Trump followed through with threats to slap Canada and Mexico with duties of 25% and China with a 10% levy at the weekend, calling them necessary to combat the flow of migrants and fentanyl into the U.S..

Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump’s levies at the World Trade Organization.

The tariffs, outlined in three executive orders, are due to take effect at 12:01 a.m. ET (0501 GMT) on Tuesday.

Trump’s move was the first strike in what could usher in a destructive global trade war and drive a surge in U.S. inflation that would “come even faster and be larger than we initially expected,” said Paul Ashworth of Capital Economics.

A model gauging the economic impact of Trump’s tariff plan from EY chief economist Greg Daco suggests it would reduce U.S. economic growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in “stagflation” at home.

Barclays strategists previously estimated that the tariffs could create a 2.8% drag on S&P 500 company earnings, including the projected fallout from retaliatory measures from the targeted countries.

S&P 500 futures slid 1.6%, after a 0.5% retreat for the cash index on Friday, when the White House reiterated Trump’s plan to announce tariffs on Saturday. Nasdaq futures slumped 2.2%, following Friday’s 0.3% loss for the cash index.

The U.S. dollar was up 0.5% at 7.3538 yuan in the offshore market in Asia, having earlier hit a record high of 7.3765. Onshore trading remains shut for holidays.

The U.S. currency climbed 2.8% to 21.2547 Mexican pesos, the highest since March 2022, and rose as much as 1.4% to C$1.4755, a level not seen since 2003.

The euro dropped as much as 2.3% to $1.0125 – the lowest level since November 2022 as Europe potentially stands in Trump’s tariff crosshairs.

U.S. two-year Treasury yields rose as much as 3.6 basis points to 4.274%, a one-week high, on concerns tariffs will stoke U.S. inflation and delay interest-rate cuts.

Two-year Japanese government bond yields rose in sympathy, reaching their highest levels since October 2008.

The cryptocurrency bitcoin tumbled to as low as $92,997.86, a three-week trough.

(Reuters)

Centre To Introduce New Income Tax Bill

by with No Comment Banking & Finance

In a major announcement, Finance Minister Nirmala Sitharaman said the government will introduce a new Income Tax Bill next week.

The new Income Tax Code will be announced next week, and the I-T Department will “trust first, scrutinise later”, the Finance Minister said while presenting the Budget 2025-26.

The Finance Minister also announced that the FDI limit for the insurance sector will be raised to 100 per cent and the enhanced limit for the insurance sector is to be applicable to those that invest entire premium in the country.

The government has, in the past, introduced faceless assessment, faster tax returns and five ‘Vivad Se Vishwas’ schemes.

FM Sitharaman said during her Budget speech that speedy approvals for company mergers will be ensured and the scope of such norms to be expanded.

“The government has shown steadfast commitment to ease of doing business and we will develop modern, people friendly, trust-based regulatory framework,” the Finance Minister mentioned.

The ‘Export Promotion Mission’ with sectorial and ministerial targets has also been launched.

“Digital public infrastructure for international trade will be set up for financing solutions and support will be provided for domestic manufacturing to join global supply chains,” said the Finance Minister.

Jan Vishwas Bill 2.0 will be introduced to decriminalise over 100 provisions and an investment-friendly index of states will also be launched this year.

The Budget Session of Parliament, which commenced on Friday, will be conducted in two phases – the first started on January 31 and will conclude on February 13, while the second phase will begin on March 10 and end on April 4.

(IANS)

 

250+ Cyclists led by Union Minister Dr. Mansukh Mandaviya Come Together to Support Prime Minister Narendra Modi’s Message to Fight Obesity

by with No Comment Health and CommunitySports

Union Minister of Youth Affairs & Sports Dr. Mansukh Mandaviya led a diverse group of cyclists here on Sunday, taking forward Hon’ble Prime Minister Shri Narendra Modi’s call to fight obesity in India. This week’s Fit India Sundays on Cycle event at the Major Dhyanchand Stadium saw participation a from myriad group of doctors and nutritionists, who took forward the message.

Also present was Paris Paralympics medalist Rubina Francis as well as several youngsters from the Bharati College Delhi and the Soniya Vihar Water Sports Club

“Obesity is a major issue and a big challenge for the youth. The World Health Organisation (WHO) says one out of eight people are obese. Therefore, exercise and playing sports is very important these days. Hon’ble Prime Minister Shri Narendra Modi mentioned about the same at the 38th National Games in Dehradun. We have to lessen our oil consumption and be very conscious of our diet. Cycling consistently will play a beneficial role in this fight against obesity. Through Fit India, we can win this fight,” mentioned Dr Mandaviya on Sunday morning.

Rubina Francis expressed how the Fit India Sundays on Cycle event is a great step in moving towards this fight against obesity. “Initiatives like this makes the country move towards good health and fight against obesity. Not only will cycling or doing yoga early in the morning bring a lot of positivity in life but also help in the mission towards an obesity-free India. As an athlete, this morning routine has helped me a lot and I feel adapting the same will help the general public as well,” said Rubina, bronze medalist in the P2 10m air pistol SH1 event at Paris 2024.

Dr Tribhuvan Gulati, Diabetes and Obesity specialist, who was a part of the group of riders, shed light on several health risks obesity plays, “Obesity brings along with it 130 different diseases like osteoarthritis, kidney diseases, liver diseases, fatty liver, pre-diabetes, diabetes, PCOD in women, sexual dysfunction in both men and women, and more. WHO has labelled obesity as a disease in 2016. It is not an aesthetic or cosmetic problem. India labelled obesity as a disease in 2018 that should not be left untreated. This is a big health issue.”

Dr Piyush Jain, senior paediatrician and a member of Indian Medical Association (IMA), mentioned that cycling is a positive step in combating obesity. “There has been a lot of inactivity among the kids today because of mobile phones and no outdoor games. Sensitising the public on this through the cycling movement is very important. Right now, 20% Indian people are diabetic and by 2030, it will be 35%. We are getting away from healthy food and exercise. Once you start cycling or any other exercise, it increases the metabolism of the body. Energy is consumed and from the moment we start losing weight, the person also becomes more motivated,” said Dr Jain.

Sports nutritionists from SAI National Centre for Sports Science and Research (NCSSR) were also part of the group of riders. Anshu Malik, Sports Nutritionist, SAI NCSSR said, “When we cycle regularly, our heart rate increases. Once it happens, the overall body toning takes places and the overall BMR also increases. When BMR increases, the weight automatically normalises. Therefore, weight management is also taken care of. Apart from that, as a nutritionist I can say that cycling will make you look young forever.”

Dr Mandaviya launched this unique cycling drive at the same venue on December 17 last year and several cycling drives have been conducted pan-India every week thereafter. The event has been staged at more than 3500 locations across the country with the participation of more than 3 lakh riders. Events are simultaneously held nationwide at SAI Regional Centres, National Centres of Excellence (NCOEs) and the Khelo India centres (KICs).

The Fit India Sundays on Cycle, organised by the Ministry of Youth Affairs and Sports (MYAS), in collaboration with the Cycling Federation of India (CFI) and MY Bharat, promotes cycling as a sustainable, healthy and environment-friendly mode of transportation.