218th Issue

TEAM IBS TIMES

EDITOR’S LETTER

After being elected for the second term in 2019, the Modi government had set a grand target- taking the Indian economy to USD $5 trillion in 5 years, 2024 to be exact. Fast forward to a year after, we are reeling from the effects of an already slow economy further worsened by the pandemic. With the GDP growth at -23.9%, reduced production and tackling the Chinese achieving the target seems to have hit a roadblock.

Or has it?

The government has taken several measures to revive the economy and bring it back on track to its 5-year goal. In this edition of our magazine, we attempt to look at these measures and the extent to which they can help India grow as a country. We also look at the silver lining in these tough times- the stock market that continues to do well and reasons behind the same.

As an editor it gives us immense pleasure when we hear from our readers. We intend to improve ourselves every step of the day and we invite you, our readers to support the same. Keep following us on https://www.finstreetibshyd.in/ as well. Please write to us and become a part of the discussion.

Email ID: editor.ibstimes@gmail.com Neha Thampi (Senior Editor, Magazine) POC, IBS Times

CONTENTS Index of Industrial Production: A Journey of Ups and Downs

By PVSN Yamini Apoorva Gold Rush By: SATYA SHREE Will India Get Through To $5 Trillion Mark?

By: Amritanshu Suman The Unavoidable Disparity By: Anish Das Vaccine to The Share Market and Economy By: Pradeep Gupta Being Independent By: Dishant Mehta Pre And Post Covid-19 By: Anjali Arun Can India checkmate the Dragon?

By: Rashika Ravichandran Infrastructure- The Building Blocks By: Supriya Reddy Dendi Opening Arms to FIIs By: Mohit Aggarwal Get… Set… Go… By: Mohit Rao More Money on Moneylenders Table By- Agnit Chatterjee Inflation, Eating Up Consumer’s Pockets By- Mohammed Abdullah Afridi Travel, A Key To Revival By- Meghana Gummuluru Unemployment By: L.H Vadiraj The Effect of Black Swarn on Markets By: Ankush Kapoor Relief Packages- A Lifeline?

By - Suraj Bhat

Index of Industrial Production: A Journey of Ups and Downs

By PVSN Yamini Apoorva Introduction: Many economies around the world, immensely rely on industries for the overall growth and development of a nation and India is no different. The industry sector holds the 2nd position in terms of contribution in GST. In the year 2019, the Industry sector contributed almost 30% of the GST. So, what happens when a pandemic takes over the world? How does that affect industrial production and why should one be concerned?

Background: Industrial production determines the output of businesses in the industrial sector of the economy such as manufacturing, mining, and power businesses. All India Index of Industrial Production (IIP), is an index that acts as a composite indicator that measures the short-term changes in the production volume of a basket of industrial products during a given period, concerning the relevant base period.

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI) are responsible for compiling and publishing this data every month. The data for the reference month is published 6 weeks after the end of the month.

The level of IIP depicts the magnitude of production in the given period in comparison to the base period. Such short-term indicators play a very crucial role in assisting the authorities to frame relevant policies and enable economic growth. The current base period used to calculate IIP is 2011-2012.

Trend line depicting IIP

Pre - COVID: Even before the world-shattering virus entered the picture industrial production was already having a bumpy path in 2019. After months of contraction in IIP, it was only in November 2019, that unexpectedly IIP increased 1.8% year-on-year.

Continuing the positive trend, India’s Industrial production jumped 2% year-on-year in January 2020, owing to a surprise rebound in the manufacturing sector (tobacco, basic metals, and furniture manufacturing recording biggest growth). Output in electricity also bounced back (3.1% vs -0.1%), while mining rose at a slower pace (4.4% vs 5.7%).

February 2020 witnessed a 4% increase, exceeding all the market expectations. It can also be noted that 13 out of 23 industry groups have shown positive growth in comparison with production in the previous month. According to Use-based classification, growth rates for February 2020, compared to 2019, were as follows: 7.4% in Primary goods, a decline of 9.7% in Capital goods, 22.4% in Intermediate goods, and 0.1% in Infrastructure goods. Consumer durables witnessed a decline of 6.4% and non-durables remained stagnant.

COVID Impact: February was the last month in the year 2020 to show growth in output after which the world was gripped by the virus forcing most activities in the country to come to a sudden halt. With the entire country going into a precautionary lockdown, industrial production took a major hit like most other sectors of the economy.

Industrial output faced its first and drastic dip for 2020 in March, with IIP contracting 16.7% year-on-year. Only mining output was unaffected by the initial impact of Covid-19 and was stable at recorded growth of 9.7% in February. On the other hand, the manufacturing sector declined drastically with negative 20.6% growth, and electricity also decreasing by 6.8%.

Output contracted by 3.1% in primary goods, 35.6% in capital goods, 18.5% in intermediary goods, and 23.8% in infrastructure output. Consistent with other categories, both consumer durables and non-durables showed a decline in output by 33.1% and 16.2% respectively.

By the beginning of April, industries had minimal activity and even the MoS refused to release complete data for April stating it unfair to compare this data with pre-pandemic data. Despite the incomplete data released by the Government, it is evident that April witnessed the sharpest fall in output with IIP 56.7% (Y-o-Y).

Fast forward to June and IIP continued to deteriorate, with a 16.6% decline when compared to June 2019. The output from manufacturing, mining, and electricity declined by 17.1%, 19.8%, and 10% respectively. With still no sign of growth, use-based classification showed a contraction in output (Y-o-Y) of primary goods by 14.6%, capital goods by 36.9%, intermediary goods by 25.1%, and infrastructure goods by 21.3%. While consumer durable goods output resulted in a decline of 35.5%, non-durables showed positive growth of 14%.

Reports state that for the period from April to June, output amounted to an overall decline of 35.9%. A sharp decline can be noted in the production of capital goods more than in primary and intermediary goods.

How does this affect the Indian economy?

In the short run, weak IIP leads to a fall in stock prices, and in the long run, it might lead to a decrease in investments once again leading to a decline in stock prices.

Furthermore, IIP also affects banking sector growth because of reduced borrowings. Therefore, one can conclude that even though IIP cannot be the sole indicator to analyse a country’s economic performance, it sure is an important indicator.

Journey to Rebound: Despite falling GDP, contracting IIP, and an overall shrinking economy, all is not lost. The government is taking several steps to boost different sectors, release a financial stimulus package of Rs. 20 Lakh Crores approximately, which includes aid for industries, MSMEs, labour, etc. The idea to commercialize mining is also on its way to getting implemented and this will ignite a strong appetite among private investors and depending on its result might also attract foreign investors. Privatization of power distribution in Union territories is another noted step which will ensure better quality and reduce losses as is proven in Delhi.

Additionally, with gradual ease in lockdowns across the country, economic activities are resuming their operations. Many corporate leaders and industry analysts are highly optimistic about their rebound and have expressed that by the end of 2021 many industries might even reach the pre-COVID level of performance. Do you think the optimism displayed by the corporate leaders can be transformed into a reality and if so, how soon?

Gold Rush By: SATYA SHREE There are numerous variables behind the current rising cost of gold. Gold is viewed as a place of refuge for speculators. Gold is likewise a way that has some genuine worth instead of being useless like the FIAT cash that we own which isn't supported by any worth. It is only a guarantee to get merchandise worth the assumed worth of the cash.

PAST SITUATION: On the off chance, we take a look at the 20-year outline of Gold starts a Bull-Run when there is a significant emergency in the economy.

1. In the below diagram, we can observe that the cost of gold began to ascend in 2008 as the economy confronted the biggest securities exchange crash because of the lodging Investors lost confidence in the securities exchanges and began depending on physical hard resources like gold and silver that can't fail for the time being.

2. This Bull run crested and a downtrend began in 2012, In this period the securities exchange was booming.

3. speculators lost confidence in the financial exchanges and began depending on physical hard resources like gold and silver that can't crash for the time being.

4. This Bull run topped and a downtrend began in 2012, In this period the financial exchange was rising consequently, individuals were not accepting gold any longer because the securities exchange was compensating them more than.

CONTEMPORARY SITUATION The current situation can also be considered as a recession and investors from all over the world are worried about the fate of their investments this year as the world is witnessing something that has never happened before.

1. Bank deposit interests are at an all-time low, The U.S dollar is crashing, bond prices are high.

2. Global economies were shut down for an extended period that has led to more than 2.7 trillion loss.

3. The U.S FED is printing and issuing trillions of dollars as helicopter money.

4. There are trade wars between China and half of the world.

5. We can see Inflation rising, Unemployment expanding, G.D.P diminishing, Medical Expenses Increases, and so on.

So, on the off chance that a stock market crash is foreseen soon, at that point by what method would it be a good idea for us to be set up to protect our cash?

It is easy to hold whatever doesn't lose it's worth short-term or something that doesn't go down in an incentive with the economy all the while.

"The enchantment anything is GOLD.” It is because gold is not only considered as a haven for investors but also considered as a hedge against inflation which means a continuous increase in the price and fall in the purchasing value.

In today’s scenario where we can see inflation increasing and people getting more worried to put their money in the stock markets Gold is the GoTo asset that investors are relying on. This is the reason Gold has increased by more than 50% from the previous year and is currently at its all-time highs.

HISTORICAL PRICES OF COMMON COMMODITY CURRENCIES HISTORICAL PRICES OF COMMON COMMODITY CURRENCIES SILVER PRICE/oz GOLD PRICE/oz JUNE 1920 $12.64 $253.07 JUNE 1970 $10.79 $241.59 JUNE 2020 $17.59 $1,722.00

Why Gold?

1. In case of unforeseen situations (demonetization, Corona Lock Down, Midnight hospitalization, etc.), you can sell gold and get money. Gold is a hedge for your investment. People see gold as a manner to pass on and hold their wealth from one technology to the next.

2. Gold is visible as an excellent save of price so humans can be advocated to shop for gold once they agree with that their neighbourhood forex is dropping the price.

3. For example, let’s take USD INR Chart In 2010, the value of USD/INR was 45. (You pay 45 rupees to get 1 US dollar) In 2020, it's 75. That means the value of INR has decreased over time. For 1$, you must pay more and more Rupees every year. (Rupee devaluation).

Accordingly, gold which gets imported into India is getting expensive as well. In 2010, gold was 18500.

Today it's 50,000. gold doubled every 8 years in India (Historically)

This doubling protects us against our Rupee devaluation, mentioned below.

ITEM USD/INR GOLD

2010 45/USD 18,500

2020 75/USD 50000

%change -25% 170%

FUTURE: Considering excessive demand, vulnerable mining activities, political and monetary uncertainties withinside the world, human beings are probable to hedge their different property in gold. This will probably make the rate cross higher. Gold costs screen the country’s financial health. When today's gold prices are high, that signals the economy is not healthy. Investors purchase gold as safety from both a monetary crisis or inflation. The low gold value suggests the economic system is healthy.

Will India Get Through To $5 Trillion Mark?

By: Amritanshu Suman PM had proclaimed an ambitious goal of a $5 trillion economy for India by 2024. If conquered, India will become the third-largest economy in the world.

Though the Vision is laudable, the growth figures do not motivate a lot. India’s economy expanded by just 4.7% between July and September, it’s 7th consecutive quarter of slowing growth. Citing a sharper-than-expected slowdown in local demand and strain in NBFC sector.

INITIATIVES UNDERTAKEN FOR ACHIEVING $5 TRILLION ECONOMY The Government is working hard to realize dream of transforming the country a five trilliondollar economy by 2024 and has taken steps to overcome the phase of economic slowdown.

The country is witnessing a unique sense of dynamism and several initiatives are being taken in line with Modi’s vision of ‘New India’. Principal Secretary Pramod Mishra recently revealed that several fundamental and path breaking changes have been made in the form of Insolvency and Bankruptcy Code and GST, continuous opening up and liberalization of FDI have affected in unprecedented inflows of FDI into the nation.

WAY FORWARD Going forward what steps can Government take to get near to its target, outlined by Niti Aayog: 1. Increase Ease of Business Over the last 4 years, the government has discarded over 1,300 antiquated law! Through a chain of reforms, India has climbed up 65 positions in The World Bank Ease of Doing Business, but our challenge is that in the next two years India must get in the top 50 and in the next five years get in the top 25.

2. Urbanization Cities account for less than 5% of the land mass, but they account for over 75 % of the global GDP! So, Urbanization in cities is very necessary as they are centers of economic growth. In the next 5 decades, India will have to do more Urbanization than what we’ve done in the last 500 years.

3. Globalization for growth India exists in a globalized and interdependent world. Like in Japan, Korea and China, Globalization has helped large sections of population to be elevated above the poverty line. India’s share in global export is hardly 2%. So, India must learn the skill of size and scale, of manufacturing to size of scale and to penetrating.

4. Women Participation is key India cannot develop at high rates over a 3-decade period without gender parity. In India, only 26% of the women works in a firm. If such a major chunk of the population is not working and we consciously don’t put women into positions of power, it will be very hard for India to grow.

5. Agriculture Reforms in vital It’s not viable to grow over long period without some very major structural reforms in the agriculture sector because that’s where close to 60% of India resides. Farmers can’t grow on subsidies, help or without using technology, contract farming etc.

From academician’s view: Right to Uniform Education The Right to Education is a reform that has helped many students but the full effect of it has not been implemented yet. It must be changed to Right to Uniform Education, a fundamental right to provide uniform education to every child in India. It must not only focus on school education but also help graduates to enhance their skill levels.

Empower Communities The government must help these communities to enhance their social activities by ensuring compliance with the laws governing their operations. The authority to control and use Natural Resources & Minerals in the respective states must be given to the communities. They must work together with the industries to use these resources effectively in a proper manner.

Increase Economic Stability The current economic climate is very uncertain. To calm down the situation and to boost investments, some steps are needed to be taken by the government; like 1. The flow of Capital and Liquidity should be increased.

2. Most of the NBFCs are in a difficult situation.

Is the "$5 trillion" target realistic?

The goal is in denomination of dollar, so there are two main variables which can impact India's growth towards achieving this goal:

1. Inflation rate 2. Rupee-dollar exchange rate An extend in inflation means that prices have risen. With growth in inflation, there is a decline in the purchasing power of money, which decreases consumption and therefore negatively impacts GDP growth.

Similarly, the rupee-dollar exchange rate also needs to be examined to make India achieve the desired goal of $5 trillion. If rupee decreases further, it will adversely affect India's GDP growth in dollar terms.

The Indian economy is on the right track. India's nominal GDP in dollar denomination was about $388 billion in 1996, more than doubled in the next ten years to reach $920 billion in 2006. It again increased to more than doubled to $2.3 trillion in 2016, another 10 years, thus making India a $5 trillion nation is not an uphill task.

To conquer this target India needs to grow at an annual average growth rate of 11.5 per cent in dollar terms for the next five years.

India witnessed a dip in its real GDP in rupee denomination during 2018-19, as the economy grew by just 6.8 % as compared to 7.2 % in the previous fiscal. Hence according to economists, even if India's real GDP grows as per the predicted growth rate of around 7.5 per cent in rupee terms for the next five years, it can easily cross the $5 trillion mark by 2024 as the target is in nominal GDP terms, which includes 7-7.5 per cent of real GDP growth and an average inflation rate of about 4-4.5 per cent, translated into a nominal growth of 11.5 per cent.

Although this pandemic has filled the roads with difficulties, but not impossible to walk upon.

It’s going to be interesting to watch India walk down a path of $5 trillion.

The Unavoidable Disparity By: Anish Das Major Challenges to Counteract Demand-Supply Disruption With the COVID-19 pandemic creating a huge crisis with the closure of businesses all across the globe, policymakers are trying to ease down the condition to mitigate the loss. In the alarming wake of COVID 19, Governments responded with a quick lockdown along with safety measures and countries like India are not an exception to this rule. Workers are forced to stay indoors and the daily wage earners are the worst sufferers. This has been a huge shocker for the suppliers since the production got seized. This has a direct impact on consumer demand.

Workers in various factories have started losing power which leads to the fall in demand.

Electronic Sector-Change in the Working Mode and Newly Implemented Government Schemes The Indian electronic sector is mostly dependent enormously on the Chinese imports which are worth around $60 billion dollars every year. Sadly, the influx is stopped. Lockdown has compelled the Chinese vendors to increase the price of various electronics by 2-3 percent due to a shortage of supplies which lead to price elevation of electronic products in India.

The pandemic forced our life to revolve around electronics thus business is likely to bounce back during Q3 and Q4 of this year. In order to yield more benefits, the Government introduced the PLI scheme (Production Linked Initiative) to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components such as Packaging Units, Testing, Assembly, etc. Under this scheme, there will be an incentive of 46% on the incremental sales for the goods manufactured in India.

IT Industries-Remote Working Seems to be a New Normal Work From Home facility seems to be in vogue during the COVID 19 outbreak. WFH complies with various guidelines as released by WHO as far as social distancing and isolation are concerned. As per estimated results, work from home has reduced the operating cost by almost 50-70%. Most of the people working in the IT sector find it effective and is the best strategy to recover from losses post-COVID 19 situations. Transition to work from home turns out to be a seamless process since productivity is not hampered. However, not all sectors can continue with work from home. In that scenario, even after the post COVID era, there might be a reduction in job opportunities for the daily wage earners.

Oil Sector- Coping up with the COVID 19 Outbreak The ongoing challenge to counteract the COVID19 has led to a decrease in oil supply in the country. There was a reduction in the oil price of 0.21 percent to 213,686 thousand tonnes (TMT) in 2019-20. However, in March 2020 the price drastically fell to 18 percent to 16,083 Thousand Tonne (TMT). Demand and supply will recover as and when this pandemic situation recedes. However, to deal with the present demand-supply issue, authorities should concentrate more on health emergencies and the allied risks of economic depression.

Lower production has continued till June but right after the Unlock Phase 1 started, there has been steady recovery. There is a revival of the petroleum and diesel market up to 8 percent after the unlock phase and is expected to return to normalcy. Refiners have raised Crude processing and demand will likely revive with the revival of transport and communication.

FMCG Sector-Disruption in the Supply Chain As the world economy is undergoing a sea change during this COVID 19 pandemic, the majority of the companies are facing problems to maintain a steady flow of goods and services.

Be it grocery or frozen foods, the supply chain has been disrupted. Firms are facing problems as far as a demand-supply mismatch is concerned along with the development of a resilient supply chain. When the country went into a nationwide lockdown, people bought the entire stock of food in one go. The majority of the shops are closed in the first phase of Lockdown.

So as a result, supply was deficient since the production was stopped. However, there was a huge demand among people for the FMCG products leading to a demand-supply mismatch in the subsequent phases of Lockdown.

In the post COVID era, firms have to re-evaluate sourcing strategies in real-time. With AI and machine learning in action, there are certain tools in analysing the supply chain framework.

These tools will help in extracting signals regarding the hurdles faced and will help the firms to formulate meaningful insights to predict disruptions and prepare necessary actions. To mitigate the demand-supply issue and recover the major losses, many FMCG companies have diversified their product portfolio as per consumer behaviour.

Retail Sector- Opportunity to Plunge in With the growing fear of nationwide lockdown, food-based retail chains and essential commodity providers are coming up as big players. With the growing demand for daily essentials and various immunity-boosting products have broadened the scope for the company.

Market players like Dabur, Zandu, P&G, etc organic breeds are launching more products and variants in the health segment as well. This is followed by a door-step delivery service.

Medical Sector- Demand and Supply Mismatch The majority of the COVID 19 patients require ventilation support along with renal support in the form of dialysis. But there has been a less amount of supply. Since there is a huge chunk of people entering the intensive care of the unit, there are challenges to cope up with the demand.

So, to deter this issue, facilities should check the desired capacity and match this to patients as per need.

Indian Government is focusing on to meet the heavy demand for essential items like healthcare facilities and infrastructure. The entire world is undergoing a sea change due to this pandemic but investment in this sector can be a win to win situation in the foreseeable future. There is a surge in the demand for various medical equipment such as Oximeters, PPE, masks, etc. This is because the number of infected individuals has increased with mild symptoms and kept in home isolation. Some of the start-ups and firms try to use this as a good opportunity to enhance their revenue by changing the market mix. Many companies have come up with innovative ideas for the long-run benefit.

Companies like Infosys acquire US-based company Kaleidoscope Innovation for about $308 crore. This acquisition helps in developing various medical devices like drug delivery, as well as in surgery. Now with digitalization in hand, this deal will ultimately help in bolstering the digital offerings combining the Infosys product engineering and Kaleidoscope innovation.

Infosys will benefit from the combination of Kaleidoscope's strong upstream offerings of product innovation and design.

Aviation Sector-Spur in the Private Jets One of the major pitfalls of COVID 19 is the Aviation sector. Airlines faced a plethora of challenges like fleet maintenance costs, optimal load cost, leasing cost, etc. However, with the start of the Unlock phases, the Indian Aviation industry has managed to counteract with the commercial air travel being revitalized. Maintaining social distancing and sanitization will be at the forefront, whether it is a commercial or business aviation.

With the rise of domestic flights, private jets flights are also experiencing huge demand. Clients are looking for Charter flights since they don't want to get themselves exposed to hundreds of passengers with varied travel history. With the announcement of 20 lakh crore for the economic revival with the easing of restrictions of Indian Air Space along with privatization of six major airports, the Indian Aviation sector is taking a new stride forward towards the revival of the economy.

A Ray of Silver Lining Amidst the Economic Slowdown Although there have been major drawbacks in various sectors, the Indian Economy is showing signs of revival. Various initiatives have been adopted by the Indian Government to streamline the business models and to achieve greater heights. Maybe it's too early to comment on what lay in store in the upcoming days. However, with the ongoing Unlock Phase, there have been certain improvements in different sectors and slowly India will revive the lost glory of the economy through these baby steps

Vaccine to The Share Market and Economy By: Pradeep Gupta The moment a person gets injured or doesn’t feel well is rushed to a doctor for its cure similarly the market and economy was hit hard this time all because of the global pandemic COVID 19 and the pharmaceutical industry is the one which is playing the role of a doctor to help the nation survive.

India is the global leader for providing generic drugs, supplies over 50% of the global demand for multiple vaccines.40% of generic demand in the US, and 25% of all medicine in the UK. It is estimated and expected that the pharma sector will grow to US$ 100 billion by 2025. In FY 20 the exports from India stood at US$ 20.70 billion which included export of bulk drugs, intermediates, drug formulations, biologicals, and herbal products.

Figure showing year on year market size of pharma sector in India

Indian pharmaceutical sector is expected to grow to US$ 100 billion, while the medical device market is expected to grow US$ 25 billion by 2025. India has also planned to boost the Indian pharma companies to develop and manufacture pharmaceutical ingredients domestically by providing a fund of Rs 1 lakh Cr. Also 100% FDI is allowed under this sector by the Indian government and between April 2000 to March 2020 the cumulative FDI inflow in the pharma sector worth US$ 16.50 billion.

The pharmaceutical industry was never such well known by the people, but the moment this pandemic started spreading every individual was in search of this industry to provide support in all means be it by curing a person or making the market breathe. The whole world was expecting from the companies to come up with the vaccine and even the companies were hitting as hard as possible to develop the vaccine.

Prior to the pandemic pharma industry was never been considered that important and even people would not prefer to invest in the companies. As one of the reasons for the fluctuations in the market price or the share price is the information flow or how many times the company is getting highlighted in the market. The more positive/negative the information about the company is, the more its share is traded in the market which leads to various ups and downs in the prices, and the pharma industry is the one whose news or information related to the company is rarely being floated is not considered much. Whereas in these months the headlines were the pharma companies, be it local, national, or an international company. Each and every pharma company participated in the race of manufacturing the vaccine as soon as possible, as

this would help boost their corporate image, brand value, market share, awareness amongst the people, and also one of the most important things the share price of the company. Companies didn’t just focus on developing a vaccine but also kept on launching immunity booster tablets and supplying its existing immunity booster medicines.

If we have, a look at the data during the pandemic from 24th March 2020 to 31st July 2020 of the S&P BSE Healthcare Index which shows the list of the companies involved in developing medicines. The highest price at which the shares of pharma companies were traded is Rs. 18,327.4 and the lowest price is Rs. 11093.93. Whereas if we take a glimpse of data of the same index prior to COVID 19 widespread i.e. from 1st November 2019 to 29th February 2020 the peak trading price went up to Rs. 14663.74 and the least to Rs. 12858.14. With this, we can derive that during the pandemic time which is still existing, the information related to the companies was being shared globally be it positive or negative which attracted the traders to buy or sell the shares which resulted in a periodic fluctuation of Rs. 7233.11 and before the widespread of the disease the period fluctuation was just Rs. 1805.6 which directs us that the pharma industry wasn’t prospering much well in the share market.

Graph showing quarterly rise in prices of S&P BSE Healthcare Index

The top 5 pharma companies by index weight are: 1. Sun Pharmaceutical Industries Ltd. 2. Dr. Reddy's Laboratories Ltd 3. Cipla Ltd/India 4. Divi's Laboratories Ltd 5. Aurobindo Pharma Ltd As of July 31, 2020, there are around 72 companies registered under the S&P BSE Healthcare Index with the maximum market capitalization of Rs. 1,27,579.91 Cr and minimum market capitalization of Rs. 87.72 Cr. Another reason for fluctuating prices is the sudden increase in the number of Demat accounts as due to this lockdown and heavy government restrictions to various activities people went attracted to an additional or side income and considered the share market the best option for that.

In all, seven pharma companies in India have participated in the race to develop a vaccine for the disease, they are: 1. Bharat Biotech 2. Serum Institute 3. Zydus Catila

4. Panacea Biotech 5. Indian Immunologists 6. Mynvax 7. Biological E Possibly, China has used COVID 19 as a bioweapon against the world taking many lives and with this, they have also completely shattered the economy of various nations and their respective share market. But the pharma industry is the one who will act as a SANJEEVANI to all the nations and assist them to come out of this situation. The underrated sector has now taken the charge in its hand and is competing against the industry of other nations to develop a vaccine. Once the vaccine is available in the market the share market will shoot up like a rocket and will maintain its position. Even WHO has shown its hopes from Indian companies to come up with the vaccine by looking at the previous records of INDIA.

Being Independent By: Dishant Mehta If there is one place on the face of earth where all the dreams of living men have found a home from the very earliest days when man began the dream of existence, it is India - Romain Rolland Why was the ‘Make in India’ initiative introduced?

Make in India is an initiative to decide for the top business investors all across the world for investment in India. It is an enormous chance for all the investors to line up their businesses in any field, any place within the country. It also encourages companies to manufacture their products in India and build the best in class manufacturing infrastructure in the country. The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India is leading the Make in India campaign. The vision was to raise the contribution of the manufacturing sector to 25% of the Gross Domestic Product (GDP) by the year 2025.

“Come make in India. Sell everywhere but Make in India” is the motto of this campaign.

Which sectors are covered under ‘Make in India’?

The Make in India initiative focused on 25 economic sectors for job creation and skill enhancement. Those 25 economic sectors are automobiles, automobile components, biotechnology, chemicals, aviation, construction, defence manufacturing electrical machinery, electronic systems, food processing, IT & BPM, leather, media and entertainment, mining, oil and gas, pharmaceuticals, ports, and shipping, railways, renewable energy, roads and highways, space, textile and garments, thermal power, tourism and hospitality, and wellness.

What Growth and Development in India occurred until now?

1. India came 48th position in the 2020 edition of the Global Innovation Index (GII).

2. In 2019-20, there was a decline in Merchandise export and import (in US$ terms) by 4.8% and 9.1% respectively.

3. In 2019-20, Gross tax revenue stood at Rs 15.04 lakh crore (US$ 215.28 billion) and it includes income tax collection which around Rs 4.80 lakh crore (US$ 68.14 billion) 4. In 2019, companies in India raised through 17 Initial Public Offers (IPO) which is around $2.5 billion.

5. In 2019-20, India’s Index of Industrial Production (IIP) stood at 129.2 6. In March 2020, the combined index of eight core industries stood at 137 whereas its cumulative growth was 0.6 percent in 2019-20.

7. Consumer Price Index (CPI) – Combined inflation was 5.9 percent in March 2020 as compared to 6.6 percent in February 2020. The annual consumer price inflation increased to 4.8 percent in 2019-20 from 3.4 percent in 2018-19.

8. In 2020, India stands in the top 15 in indicators namely ICT (Information and Communication Technology) services exports, government online services, graduates in science and engineering, and R&D-intensive global companies.

9. By the year 2025, India will have 100000 start-ups and will generate employment for 3.25 million people with $500 billion as per Chairman of Manipal Global Education Mr. T V Mohan Das Pa 10. India improved its ranking in the World Bank's Doing Business Report by 14 spots over last year and was ranked 63 among 190 countries in the 2020 edition of the report.

Why does Bharat need to be Atma Nirbhar?

Due to the COVID 19 pandemic, the nation was fully locked down. The pandemic brought with it a completely new set of disruption and required the country like the rest of the world to take a step back instead of a step forward. While the requirement for severe consistency to lockdown measures has made it challenging, the efforts of the industry send out a strong wave of optimism for a gradual but strong revival.

Atma Nirbhar Bharat is the dream of the Prime Minister of India Narendra Modi of making India an independent country. The first reference of this dream came in the form of the 'Atma Nirbhar Bharat Abhiyan' or 'Self-Reliant India Mission' during the declaration of the coronavirus pandemic related economic package on 12 May 2020. This self-reliant policy does not aim to be protectionist and as the Finance Minister clarified, "self-reliant India does not mean cutting off from rest of the world", the law and IT minister, Ravi Shankar Prasad, said that self-reliant does not mean segregating away from the world. Foreign investment as well as technology and innovation is welcome self-reliant India means being a greater and more significant aspect of the worldwide economy.

What initiatives were taken for making Bharat Atma Nirbhar?

India's Reliance Jio announced ‘Made in India’ 5G network in July 2020. Mukesh Ambani proclaimed in mid-July "Jio has created a complete 5G solution from scratch that will enable us to launch a world-class 5G service in India, using 100 percent home-grown technologies and solutions". Various investments came from other companies such as Facebook, Silver Lake, Vista, TPG, KKR, General Atlantic, Mubadala, Abu Dhabi Investments, L Catterton, PIF, Intel Capital. Also, recently Reliance Jio has acquired Future Group.

The Defence Minister Rajnath Singh reported that the Defence Ministry is now ready for a major push to Atma Nirbhar Bharat activity by forcing an import ban on 101 things in an organized way over a time of 5 years, in August 2020.

By 2025, there will be an increase in public health spending to 2.5% of the GDP, said by the government.

India is predicted to draw in the investment of around US$ 100 billion in building up the oil and gas infrastructure during 2019-23.

Pradhan Mantri Garib Kalyan Package (PMGK) was introduced in April 2020 to provide relief to the underprivileged and help them fight the battle against COVID-19. The budget assigned to the scheme was Rs 1.70 lakh crore (US$ 24.12 billion).

The Prime Minister of India, Mr. Narendra Modi announced various economic packages, having a cumulative worth of around Rs 20 lakh crore (US$ 283.73 billion) and being almost 10 percent of India's GDP. What should a plan look like?

As 2025 arrives, India's GDP is likely to reach $5 trillion and also accomplish upper-middleincome status on the back of digitization, globalization, favourable demographics, and reforms.

India is additionally concentrating on renewable sources to generate energy. It is planning to accomplish 40% of its energy from non-fossil sources by 2030, which is currently 30%, and has strategies to increase its renewable energy capacity from 175 gigawatts (GW) by 2022.

India may become the third-largest consumer economy as its consumption may significantly increase to $4 trillion by 2025, owing to a shift in consumer behaviour and expenditure pattern.

Make in India is a long-term ambitious project, however; it will help in the economic development of the country. To make India free of unemployment by bringing development and growth this initiative is the urgent need. We can scale down poverty in India to an

incredible level by solving the unemployment issue for youths. Thus, the country's economy will achieve a new height after the success of this campaign. This, in turn, may solve different social issues in the country.

Pre And Post Covid-19 By: Anjali Arun If you have never failed, you have been never tested and then you haven’t seen you yet. A set back is only an opportunity for you to come back stronger. Deep Malhotra, BeckFriends Nowadays, most of us across the whole world is going through the difficult phase of our life.

Human beings consider themselves the most evolved and dominant species and through their intellectual evolution and technological know-how claim to dominate nature and its wealth.

However, once in a century some phenomenon occurs which takes a real test of this argument and tends to turn the table upside down. One such phenomenon is the COVID-19 pandemic which has caused havoc on this planet taking lakhs of life and bringing the global economy to a standstill. The novel coronavirus is a respiratory virus causing world-wide panic. The outbreak of coronavirus was first identified in Wuhan, China in December 2019. And since then has spread across the whole world which resulted in the biggest lockdown in world history.

The most affected countries with the highest number of COVID-19 cases include Brazil, India, Russia, South Africa, Mexico, Peru, Colombia, Chile, Iran, and the USA with the highest number of deaths i.e,184,796. The COVID-19 pandemic is an unpredictable epidemic in which we cannot predict it and are not prepared to deal effectively with it.

Economically, the world is slipping into recession according to estimates from the International Monetary Fund (IMF) and the World Bank and the ensuing economic crisis is much worse than the Great Depression of the 1930s. Economies in different nations have been contracting with millions losing their jobs.

INDIAN ECONOMY BEFORE COVID-19 Even before the coronavirus outbreak, the Indian economy was in its worst period, with growth in the gross domestic product (GDP) dropping to an 11-year low of 4.2% in 2019-20. The economy expanded by 3.1% in the 2019-2020 quarter of January-March, down from 5.7% a year earlier at the same time, the slowest growth in at least eight years. For three consecutive years beginning in 2017-18, the Indian economy was losing momentum in growth. GDP growth in 2016-17 was 8.3%. In 2017-18, it dropped to 7%, in 2018-19 to 6.1% and in 2019-20 to 4.2%. Since 1991-92 the economy has never lost momentum in growth for three consecutive years. And it has just happened twice before. Between 1989-90 and 1991-92, and then from 1970-71 until 1972-73.

According to data from the National Statistical Office, the manufacturing sector in FY 201920 just grew by 0.03% compared to 5.7% in the previous year. Building sector growth, which is responsible for a spill over effect on several other industries, has too declined to 1.3%. "Due to a 2.8% decline in investment and a 3.6% decline in exports, real GDP growth in 2019-20 dropped to 4.2%, the lowest since 2008-09, when it was 3.1%. On the output side, a decline has mainly occurred in manufacturing, construction as well as in the two heavyweight services sectors — trade, hotels, etc., and financial and real estate services, said D.K. Srivastava, the chief policy advisor at EY India.

The policy response from the government until 2019-20 has been primarily a supply-side response. The Government cut corporate tax rates in September 2019. This was expected to promote investment and boost the economy. RBI has mostly either reduced interest rates or kept them stable. This was expected to reduce capital costs and encourage investment. Gross Fixed Capital Formation (GFCF) the investment part of GDP has now been contracting for three consecutive quarters.

The unemployment rate in February stood at 7.76% a month before the government launched the first nationwide lockdown beginning on March 25. India's unemployment rate dropped from a record high of 23.5% in the previous two months to 11% in June 2020, as several companies resumed operations after weeks of closures due to the coronavirus pandemic. The unemployment rate in urban areas fell from 25.8% to 12.0%, while it was down from 22.5% in rural areas to 10.5%.

INDIAN ECONOMY AFTER COVID How will the economy be different after COVID-19 from what we have in recent decades?

Will things be better in the future? These are difficult questions and we have no immediate answers. One clear thing is that business won't stay the same anymore.

We know they leave a lasting scar from previous financial crises, said Andy Haldane, the chief economist from Bank of England post the 2008 global financial crisis. This time, possibly, won't be different. After a stringent shutdown was enforced in March to halt Covid-19's expansion, an already slowing Indian economy was derailed from its growth track. Although the jury is still out on whether the lockdown has dented the virus' development, it has hurt the economy. India's GDP this year is expected to contract between 5% and 10% everywhere-for the first time in four decades.

Some of the harm would, of course, be long-lasting. If India's economy is rising at 7% between 2022 and 2024, the permanent loss will be 10%, according to a recent study by CRISIL, a credit rating agency based in Mumbai. Average GDP growth will be expected to catch up to 11% over the next three taxpayers, something that has never happened before.

While that huge challenge is looming, some analysts and economists agree that the next six to nine months may see a rebound on the cards. It's probably not going to be straight forward.

Economic activity came to a grinding halt in India from the end of March with factories, transportation, stores, and malls locked. Nearly wiped out domestic demand, which accounts for about 57% of GDP. Pay cuts and layoffs, along with retail shortages, drained the market entirely.

The decision by the Indian government to lift most of the restrictions has given companies, large and small, much-needed relief. Despite this, it is anticipated that the demand scenario will remain sluggish for most of the current financial year. But next year it could make a comeback.

"Restoring normal economic activity would drive a lot of growth," said Vishrut Rana, an economist with S&P Global rating headquarters in New York. Households would spend more regularly in the face of the Covid-19 outbreak as opposed to conservative and restricted spending. Firms will also restart delayed investments. And as demand revives, credit rating agencies expect a turnaround in India's economic growth.

Also, taking the credit route relying on India's financial system, which continues to clean up the rubble of past bad lending. Indian banks have already been battered into the Covid-19 war, and their situation is expected to deteriorate further as bad loans dent their profitability under current economic conditions. "If these conditions prevail beyond fiscal 2021, continued risk aversion, particularly from the more selective private-sector banks, might stymie credit growth," S&P Global Ratings said last month in a study. "It would place an additional brake on economic recovery."

India's digital transformation currently underway is expected to boost e-commerce growth, transforming the landscape of the retail consumer market over the next decade. This draws leading global technology and e-commerce multinationals into the Indian market.

No matter how much falls on us, we keep ploughing ahead. That’s the only way to keep the roads clear.

Can India checkmate the Dragon? By: Rashika Ravichandran The ‘world’s factory’ China’s products are facing a ban after the military aggression which led to casualties from both sides. 59 of its apps have banned by the GoI to counter the threat being posed by these apps to the country’s sovereignty and security and stopped or blocked contracts with Chinese contracts. Nine of ten Indians favor a complete ban on all China-made goods but the question which remains to be addressed is – Can India fulfil its pledge of Atmanirbhar Bharat and completely oust China from its market?

Trade Relations between India-China India and China’s trade relationship goes back almost 2000 years and the two neighbors have shared a healthy trade relationship despite the Sino-Indo war of ’62 and on-off skirmishes on the diplomatic or international level. Out of the $442 billion trade, India imported $62.3 billion just from China in April – February FY’20. More than 14% of India’s imports come from China with goods ranging from nuclear reactors, boilers to mere household items. India relies heavily on China for many of its needs.

The two Asian giants have long related to each other historically via the Silk Road which also helped in the transmission of Buddhism to India from China. Even dynasties such as the Cholas maintained good relations with the Song dynasty. The India-China relations were further

bolstered during the British Raj and the opium wars. And thus, began a trade partnership between the two countries which would be touted to be strong but ultimately would not stand the test of time.

The major falling out between India and China came during the Galwan Valley clash between PLA and the Indian forces brought forth a tremendous wave of Anti-China sentiment.

Contracts given to Chinese conglomerates and companies got cancelled and various tenders given to Chinese origin companies were revalued. The major trade blow came when the GOI decided to ban Chinese apps such as TikTok. But the major question arises whether India can effectively block Chinese products?

China – World’s Producer or Economy Destroyer?

A major part of why China is referred to as the world’s manufacturing hub has lots to do with the ubiquity of its products. Although we often wonder why everything is ‘Made in China’ the fact that China realized the importance of inviting FDI much earlier than India, its efficient supply chain dynamics and cheap abundant labour makes it a preferred global destination for investors who China began attracting with its investor-friendly policies.

China's business ecosystem of networked suppliers, component manufacturers, and distributors has evolved to make it a more efficient and cost-effective place to manufacture products.

Chinese manufacturers generally operate under a much more permissive regulatory environment. China has been accused of artificially depressing the value of its currency to keep the price of its goods lower than those produced by its counterparts. China has been accused of artificially depressing the value of its currency to keep the price of its goods lower than those produced by U.S. competitors.

The innocuous transaction of People’s Bank of China (PBoC) in HDFC Ltd which reportedly sent its equity in HDFC past 1% sent alarm bells ringing. Hurried notifications to SEBI were sent and the next move by New Delhi was not much surprising. The commerce ministry’s Department for Promotion of Industry and Internal Trade (DPIIT) amended FDI guidelines to curb any untoward investment from China. The commerce ministry's Department for Promotion of Industry and Internal Trade (DPIIT) amended foreign direct investment (FDI) guidelines to apply curbs on investments from China. Aimed at preventing any opportunistic takeover from across the border, any fresh FDI from China now requires a specific nod from the government.

Although the new set of norms for FDI investment will naturally have to abided by Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan, given the low inflow of capital from these countries it is particularly evident that the government is keener to stop the predatory behavior of Chinese corporates and start reviewing the business environment for signs of any kind of exploitative behavior. China has hit back at India calling the new FDI norms against the WTO’s principle of non-discrimination.

The Government has ample reasons to justify its skepticism. Since 2015, China has strategically ramped up its investment into India.

According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), the amount of FDI that has flowed into India from Chinese investors between 2015 and 2019 was pegged at $1.8 billion.

In 2015, overall investment into India from China was recorded at $494.7 million, while the following year saw an additional $461.40 million come in. Automobile Sector seems to have caught the fancy of the Chinese companies receiving a massive investment of almost $876.30 Mn followed not very closely by Electrical equipment, book printing, service sector and electronics.

Atmanirbhar Bharat- Reality or Rhetoric?

After the Galwan valley standoff on June 15 India that left 20 brave soldiers martyred, India banned 59 apps of Chinese origin citing data security and national sovereignty concerns on June 29. These include popular ones such as TikTok, SHAREIt, UC Browser, CamScanner, Helo, Weibo, WeChat, and Club Factory. The government also added 118 apps to the list which also included the popular game PUBG which the government claimed to be a digital strike against Chinese skirmishes.

Many have lauded the government for having a strong approach towards the Chinese, but the main question is whether India can dethrone China as the world’s main manufacturer?

India took a step in the direction of strengthening MSMEs and indigenous products by announcing the ambitious Atmanirbhar Bharat Scheme whose motive is not just to produce for India but to produce for the world.

But this ambitious scheme may face hurdles in the form of ease of doing business, red tape, and efficient administrative policies. It remains to be seen whether India can garner support for its scheme and turn the tide.

The ‘world’s factory’ China’s products are facing a ban after the military aggression which led to casualties from both sides. 59 of its apps have banned by the GoI to counter the thread being posed by these apps to the country’s sovereignty and security and stopped or blocked contracts with Chinese contracts. Nine of ten Indians favour a complete ban on all China made goods but the question which remains to be addressed is – Can India fulfil its pledge of Atmanirbhar Bharat and completely oust China from its market?

Infrastructure- The Building Blocks By: Supriya Reddy Dendi Infrastructure is the amenities needed for a Nation to hasten steadily and for Economic and social enlargement to take place in a country. So as the meaning suggests it defines some major considerations for the nation and standard of living.

In India Infrastructure is a key driver of overall development of the economy. It’s majorly split into six types they are power, market irrigation, health, transportation, education and recreation facilities. All these provisions cooperatively constitute the infrastructure of the country.

However, the development of a country largely depends upon the development of agriculture and industry.

Conventionally, it is the responsibility of the government to provide infrastructure services for various reasons. A number of these reasons are huge capital investments, long incubation periods, externalities, high level of risks, and also low returns on investment. Over the years, the government of India decided that it doesn't want to continue the monopoly in infrastructure.

Within the ownership of the government, the infrastructure was proved inefficient and corrupt.

Further, in India, the demand for infrastructure always outpaces availability.

Like other countries, the developmental process of India put much emphasis on the expansion of infrastructure. Thus Government has recently announced guidelines for private investment in highway development through the Build Operate Transfer (BOT) route. Besides simplifying procedures and providing more financial concessions, these measures would facilitate the preparation of detailed feasibility reports, clearances for the proper way of land, relocation of utility services, resettlement and relocation of the affected establishments, environmental clearance and equity participation within the highway sector.

Increased impulsion to develop infrastructure within the country is attracting both domestic and international players. The private sector is becoming a potential player across various infrastructure segments, ranging from roads and communications to power and airports. To boost the event of buildings within the country, the government of India has decided to come up with one window clearance facility to accord speedy approval of construction projects. India ranked second within the 2019 Agility Emerging Markets Logistics Index. In 2019, the sector witnessed seven mergers and acquisition (M&A) deals worth US$ 1,461 million.

ROADS The private sector has emerged as a magnate player in the development of road infrastructure in India. The Government’s policy to extend private sector participation has proved to be a boon for the infrastructure industry with many private players entering the business through the public-private partnership model.

With the government permitting 100% Foreign Direct Investment (FDI) within the road sector, several foreign companies have formed partnerships with Indian players to capitalise on the sector's growth. The Government’s move to chop GST rates on construction equipment from 28% to 18% is predicted to relinquish a lift to the industry. Construction of highways in India progressed at 21.44% CAGR between FY16-FY19

RAILWAYS Government of India has emphasized investing in railway infrastructure by making investorfriendly policies. It’s hastened to enable FDI in railways to enhance the infrastructure for freight and high-speed trains. At the moment, domestic and foreign companies are also looking to invest in Indian rail projects. Indian Railways have issued letters of intent for ownership, operation and management of two luxury trains in private sector Foreign Direct Investment (FDI) inflow in Railways Related Components stood at US$ 1,107.60 million from April 2000 to March 2020.

POWER India is the second-largest consumer and third-largest producer of electricity in the world and had an installed power capacity of 371.05 gigawatts (GW) as of June 2020. Electricity production reached 1,252.61 billion units (BU) in FY20. India was ranked fourth in wind power, fifth in solar energy and fifth in renewable power installed capacity in 2018. India’s rank jumped to 22 in 2019 from 137 in 2014 on World Bank’s Ease of Doing Business "Getting Electricity" rankings.

TELECOMMUNICATIONS: India is currently the world’s second-largest telecommunications market with a subscriber base of 1.20 billion and has registered strong growth within the last decade. Sweeping reforms introduced by successive Indian governments over the last 20 years have dramatically changed the nature of telecommunications in India. Gross sales of the telecom sector stood at Rs 185,291 crore in FY20.FDI cap in the telecom sector has been increased to 100% from 74%. FDI inflow within the telecom sector totalled US$ 37.27 billion during April 2000-March 2020. The government of India, through its National Digital Communications Policy, foresee investment worth US$ 100 billion within the telecommunications sector by 2022.

URBAN INFRASTRUCTURE The Government has introduced a special package for Housing Construction and Services, which can facilitate the development of urban infrastructure. To enhance urban infrastructure, the government enhanced the tax benefits for housing and also extended tax holiday to urban infrastructure.

AVIATION The aviation industry in India has emerged as one of the rapid-growing industries in the country during the last three years. India is predicted to become the world’s third-largest aviation market by 2024. To cater to the rapidly growing demand, airline operators are expanding their capacity. The expenditure of Indian travelers is predicted to grow to Rs 9.5 lakh crore by 2021.

The government of India launched a regional connectivity scheme named UDAN to make flying affordable for a standard man. Government has opened the airport sector to private participation as six airports across major cities are being developed under the public-private partnership model. Investment to the tune of Rs 42,000-45,000 crore is predicted in India’s airport infrastructure between FY18-23.

Infrastructure is imperative for the advancement of a country. As a network, it immediately affects all commercial enterprises by augmenting the productivity of the circumstances of composition and enhancing the standard of life.

As India progresses towards innovation, the melioration is required for the standard foundation, holding insight they are about their environmental consequence, will have to be discussed. The reform strategies by implementing several authorizations and purposes, directed at bringing the private sector in global and international investors especially. While evaluating the two foundations like health and energy. It’s explicit that there is the sector for even admittance to infrastructure for everybody.

Opening Arms To FIIs By: Mohit Aggarwal Foreign Direct Investment (FDI) is often seen as a key substance for economic evolution in developing countries like India. FDIs are considered as a progressive tool, which helps to attain self-sustainability among various sectors and the overall growth of the economy. After LPG i.e. liberalization, Privatization and Globalization of the economy in 1991 to the outside world, India observed a humungous increase in the flow of FDI. It plays an important role in the longterm development of the country not only as a source of income but also in promoting local economic competitiveness through technology transfer, strengthening infrastructure, productivity growth and job creation. FDI strengthens the production capability of the economy with the help of cash inflows from various overseas institutions who invest in Indian based companies. FDI and growth of the economy have long been a long-lasting subject of concern in the field of international growth. In a time of global fluctuations, FDI’s stability emerges as a catalyst for rapid growth in developing countries. In 2014 the Govt. of India made changes to the FDI policy in collaboration with Make In India initiative. Under the amended FDI policy 25 sectors were liberalized. FDI helped the Indian economy in as many ways some of which are helping in balancing international payments, boosting development in various fields and areas, generation of greater employment openings for the people of India, also encouraging export from other countries. Apart from these mentioned advantages, FDI helps in creating a competitive business environment in the country which leads to higher efficiency and superior quality of products and services.

FDI IN INDIA Investors see India as an emerging opportunity with strong economic growth potential. Since the creation of the world, FDIs (Foreign Direct Investment) has been an important driver of economic growth, building a solid foundation and seeing positive growth. Major non-credit financing, FIIs / FPIs have invested around Rs 12.30 lakh crore (US $ 174.55 billion) in India from FY2002 to FY2021 (until June 09, 2020). FDI annual revenue in the country is expected to increase to US $ 75 billion over the next five years according to a UBS report. India, today is part of the top 100 club in Ease of Doing Business (EoDB) and globally ranked first in the Greenfield FDI rankings.

ROUTES WHERE INDIA ACQUIRES FDI 1. Automatic route: A non-residential company or Indian company does not need to be a prior nod from the RBI or Indian FDI government.

FIIs Investing Types 1. Hedge Funds 2. Foreign Mutual Funds 3. Sovereign Wealth Funds 4. Pension Funds 5. Trusts 6. Asset Management Companies 7. Endowments, University Funds

2. Government approach: Government enforcement is compulsory. The company will have to apply through the Portal Foreign Facilitation Portal, which provides one opening window. The application is then forwarded to the relevant department, which will have to approve/reject the application in consultation with the Department of Industrial Development and Internal Trade (DPIIT), the Department of Trade. DPIIT will issue a Standard Operating Procedure (SOP) for processing applications under the existing FDI policy.

According to the Department of Industry Promotion and Internal Trade (DPIIT), FDI's equity incursion made India stand at US $ 469.99 billion in April 2000 and March 2020, indicating

that the Government's efforts to facilitate business and streamline FDI processes are having positive results.

FDI revenue in India was US $ 49.97 billion in 2019-20. 2019-20 data shows that the service sector attracted the highest FDI revenue of US $ 7.85 billion, followed by computer and hardware-software at US $ 7.67 billion, telecommunications sector at US $ 4.44 billion, and US $ 4.57 billion.

During 2019-20, India received the largest share of FDI revenue from Singapore (US $ 14.67 billion), followed by Mauritius (US $ 8.24 billion), Netherlands (US $ 6.50 billion), USA (US $ 4.22 billion) and Japan (US $ 3.22 billion).

GOVERNMENT MEASURES The Indian government aims to secure a $ 100 billion FDI inflow over the next two years. The Indian government has been planning to process 100% FDI for insurance mediators in India to strengthen the sector and attract more funds.

In 2018-19, India is ranked seventh with an M-cap of US $ 2.1 trillion. Local institutional (DII) investors and foreign portfolio investors (FPIs) together invested Rs 1.43 lakh crore (approximately US $ 20 billion) by 2019. Investment of FPIs in major Indian markets reached Rs 10,312 crore (US $ 1.48 billion) in June 2019. FPIs invested Rs 1,937.54 crore (US $ 277.23 million) in the debt segment by August 1-9, 2019. In 2019, FPI's investment in India's currency affected five years of Rs 101,122 crore (US $ 14.47 billion). In 2019-20, institutional investment in Indian real estate stood at US $ 4.48 billion. In the first week of June 2020, FPIs impelled Rs 18,589 crore (US $ 2.77 billion) on the Indian market. In September 2018, Embassy Office Parks filed papers for Real Estate Investment Trust in India (REIT). In September 2019, the Embassy Office Parks announced plans to expand its portfolio to Hyderabad and Chennai and accumulate a second national REIT list for 2020-21.

Get... Set... Go… By: Mohit Rao The government of India had made a grand plan to reach a GDP of $5 Trillion by 2025. As of September 2020, the GDP was only $2.72 Trillion. With a negative growth rate of -23.9% in quarter 1 (April-June) due to the Covid19 crisis, it does not look possible for India to reach its grandiose target by 2025. There are, however, many interesting opportunities that arose that will surely see India continue its previously unprecedented growth trajectory.

Electric Vehicles With more countries in the world pulling away from doing business in China, India has gained a fantastic opportunity in many sectors, one of them being the electric vehicle industry. The Telangana government as well the Gujarat government both posted coalition letters to support EV policies in their respective states.

Both Tata Motors and Mahindra Electric, two big players in the Indian automobile sector joined in as signatories. The main goal is to advance electric mobility in India and reach a target for private and commercial vehicles sold by 2030. This coalition is a stepping stone to meeting India’s objectives to create jobs and reduce air pollution as well as continue prime minister Narendra Modi’s Atmanirbhar Bharat (self-reliant India) campaign.

Technology Manufacturing Speaking of India’s opportunities gained from countries moving away from China, 24 companies plan to shift their production units to India. The government of India had announced the production linked incentive scheme to boost domestic manufacturing of large-scale electronics and to attract large scale investment in mobile phone manufacturing in India. Both Samsung and Apple have already begun shifting plants to India. Samsung already had a manufacturing plant in Noida but with this new scheme are planning to shift more units from China and Vietnam to India in a plan that could see $40 Billion worth of devices made in India.

Apple had previously made several iPhones in India, with this new scheme, however, its new flagship phone will now be made in India. The iPhone 11 will be assembled in the company’s Foxconn plant in Chennai (Tamil Nadu) and will see a great leap for the make in India initiative.

Agriculture Agriculture in India currently contributes to just over 14% of the national GDP and also provides livelihoods to 40% of the nation’s workforce. With Prime minister, Modi’s Agriculture Infrastructure Fund of RS 1 lakh Crore launched in August 2020 the goal of reaching a 5 trillion-dollar economy should certainly be closer. The fund aims to develop agricultural infrastructure by building warehouses, cold storage and helping to develop areas such as animal husbandry and irrigation facilities. This fund will help the farming sector in their planning of medium to long term debt financing and also improve the post-harvest management of crops. Currently, it is estimated that 40% of food produced in India goes to waste and 190 million Indians are undernourished. Improving the post-harvest management systems in place will surely reduce this number. This fund will improve the Indian GDP by increasing the global export from the agriculture sector and reducing the balance of payments of India.

It must also be mentioned that India has chosen Israel as its partner in the field of agriculture.

Seeing as Israel is at the forefront in Agro-tech, India will surely benefit greatly from their expertise in the field. The Indo-Israel Agricultural Project will see improvements in India’s crop diversity as well as more efficient use of water in horticulture. Learning from each other

and sharing technology will certainly help enhance both countries, even after the 12-year cooperation with Israel’s MASHAV (Agency for International Development Cooperation) ended in 2018.

ISRO The Indian Space Research Organization’s contribution to the GDP of the country is often overlooked since estimating the extent of the space sectors contribution is difficult and not clearly defined. However, ISRO can continually drive India forward in the space race, that too at a fraction of the cost of other space agencies across the world. ISRO’s launch of 104 satellites on a single rocket in 2017 as well as the numerous communication satellites launched for national broadcasting and weather forecasting have surely made a significant difference on the economy; not to mention the amount of research conducted by ISRO, even if the extent of this cannot be currently estimated.

The commercial arm of ISRO known as Antrix Corporation is estimating revenue of Rs 20002200 Crore in the upcoming fiscal year as well, though it remains to be seen how much this can contribute to the economy after considering the costs involved.

Making the unorganized sector organized The informal or unorganized sector is defined as “all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers”. These include street vendors, local markets and most of the rural community. It is estimated that 90% of India’s workforce is in the informal sector of India and therefore do not contribute to the country’s economy. For India to increase its GDP immensely it must take into account more of the unorganized sector. With the COVID19 pandemic, E-payment apps have seen an increase in use and more of the transactions in the unorganized sector are now accounted for. This is a great start to tracking transactions but is still a small portion of the total unorganized transactions. To continue on this path a nationwide portal can be implemented to keep a database of day labourers and migrant workers through implementing this will be a gargantuan mission to undertake.

To conclude, India has seen several opportunities, especially during this pandemic, to improve upon problem areas. Even though the economy has slowed down immensely India has the potential to reduce in the balance of payments and reach its incredible goal of a 5 trillion-dollar economy. If the above opportunities can be taken advantage of then this dream can surely become a reality within the next decade. Do you think India can reach this objective?

More Money on Moneylenders Table By- Agnit Chatterjee Few people wanted to place their money in bank accounts because of such low interest from deposits. They did not want to make stock investments, either, amid fears of losing money.

There is widespread prejudice on a stock investment, and many consider it as a high-risk, highreturn investment. A lot of private banks, especially the top ones have a healthy contribution coming from the subsidiaries. So, take ICICI Bank or Kotak Bank. About 30-40% of the value comes from subsidiaries which are doing very well -- be it the life, general insurance, or the AMC business. That would hold these banks in good stead in case there is further trouble going ahead from that point. private sector banks would be stocks I would play in the sector because these will be the survivors of a bad cycle and will make merry in the next one, two, three years as and when things come back perfectly to normalcy.

Public sector banks' assets stood at Rs 72.59 lakh crore (US $ 1,038.76 billion) in the financial year 2019. During FY16-FY20, credit take-off increased by 13.93% at CAGR. By FY20, total credit had increased to US $ 1,936.29 billion. During FY16-FY20, deposits grew by 6.81% at CAGR and reached US $ 1.90 trillion by FY20. Credit provided to the non-food industries rose by 3.3 percent to $ 1.26 trillion on February 28, 2020 and $ 1.42 trillion on March 13, 2020.

For a sector where institutional investors are talking about value and a bet on India, it is a sector which is a rising market gains the least and in a falling market, the first to fall.

Two kinds of damages can happen; one is structural, the other is cyclical. For example, the damage to accrue to them would be more cyclical than structural because if we look at the top banks -- HDFC Bank, ICICI Bank -- their PPOP is more than 5-6%.

Probably HDFC Bank is in its six months of profit or nine months of profit from that point of view. So, it will be more a one-year phenomenon in terms of the overall damage the banks have to take on their books and how one needs to see all these banks.

For example, suppose in the case of HDFC Bank, the market cap before the correction was Rs 7 lakh crore, currently it is Rs 5 lakh crore. So, HDFC Bank has taken a Rs 2 lakh crore knock.

But from an intrinsic value point, HDFC Bank makes Rs 25,000 crore profit. So maybe, HDFC Bank will not make for one year, does that mean the intrinsic value comes down by Rs 2 lakh crore? The answer is no.

After mortgage lender HDFC Ltd and private sector ICICI Bank, the People's Bank of China has now made an equity investment in one of India's largest NBFCs Bajaj Finance. There is no bar on Chinese portfolio investment in India, but relations between the two countries have worsened in the last six months. The Chinese central bank's investment in mortgage lender HDFC Ltd had created a furor in the financial market. That was followed by the People's Bank of China investment last month in private sector bank ICICI Bank amid the border skirmishes.

The Indian banking industry has recently witnessed innovative banking models such as payments and small finance banks. RBI's new measures are expected to go a long way in helping to restructure the domestic banking industry. The digital payment system in India is one of the most advanced in 25 countries, with the Indian Instant Payment Service (IMPS) being the only system at level 5 in the Fast Payment Innovation Index (FPII).

The investment in Bajaj financial services arm is less than 1.0 percent, and hence not reflected in the shareholding pattern of the company filed with the stock exchanges. Chinese banks entered at the right time as the NBFC's share price had plunged from around Rs 4,800 to around Rs 2,200 because of the COVID-19 impact on the stock market. Amid anti-China sentiment, the government tightened foreign portfolio investment rules, especially on investments coming from neighboring countries with a Chinese connection. The rules were issued to prevent any 'opportunistic takeovers.

Currently, there is no bar on Chinese portfolio investment in India, but the relations between the two countries have worsened in the last six months. India has banned over 100 apps including WeChat, shareit, TikTok, PUBG Also, some private sector banks are available at closer to a one-time price to book. So, the comfort of the valuation side in these banks even though one does not know how the book will behave. Expert suggests that it makes a good sense for Chinese Central Bank, which is flush with funds, to diversify part of its war chest in countries like India rather than stay invested in US and European countries. The market regulator Sebi is also scanning the portfolio investments from China as well as from investors of Chinese origin via Hong Kong and other countries.

Inflation, Eating Up Consumer’s Pockets By- Mohammed Abdullah Afridi Inflation in simple terms means a rise in price level when compared to the availability of goods that change the purchasing power of consumers. In short, if you had 100 rupees in 1958, the value of that money in 2020 will be 1 rupee 20 paise. Inflation is a necessary evil for any kind of economy. It's good if the percentage of the inflation rate is less than 2% then the country's economy is evolving and growth is not stagnant. Everything goes haywire when the inflation rate increases by a large percentage. With the increase in demand, prices and the cost of living will also increase and the purchasing power of customers will fall. This ultimately leads to a deceleration in economic growth. In 2008, Zimbabwe had a very large percentage of inflation, to cope up with the rising prices of goods government had to print money with large denominations, as large as 1 trillion-dollar currency note. This 1 trillion-dollar note was valued just 1US dollar in the international market. Such adverse is the impact of inflation.

Now we see who are the gainers and losers during inflation. Losers due to inflation are people who have cash savings, workers on fixed-wage contracts, borrowers on the variable mortgage rate, exporters, and also the economy in the long run. Cash savers and fixed wage-earners lose because as price increases, the value of money will fall. As result savings and fixed-wage earnings will be worthless as they do not change in the near future. Exporters lose because when price increases, their goods become less competitive in the international market due to an increase in cost. Due to uncertainty in investments, economic growth will be lower and there will be a rise in unemployment in the long run. Top gainers are debtors with fixed repayment plans, governments with debts, and owners of physical assets. Inflation will not affect on debtors as they have to pay fixed repayments on their loans. The government can reduce the real value of its debts. For example, if the present inflation is low and the government has sold bonds at a low rate of interest. After few years if inflation kicks in and that inflation is higher than the yield on government bonds then the owners of the bond will see a decrease in the value of the bond whereas the government will see a decrease in the value of the debt.

During January 2020, India’s core inflation was 5.026%, while the retail inflation was 7.3%.

This retail inflation was 5 years high and this was mostly due to a shortage of onions. The hike in inflation was mainly seen in vegetable categories which were 60.5% when compared to December 2018. The onion prices skyrocketed to more than Rs100 per KG mark. The overall food inflation increased by by14.12%. High prices of pulses, meat, and fish contributed to the retail inflation spike. Now let us see, how core inflation increases? Suppose a barrel of crude oil cost $73 now. In the next few years, the crude oil price has increased to $85 a barrel. As oil prices increase, transportation fuel prices increase, companies will increase the cost of the products to compensate for the fuel price increase, and in the end, the consumer pays the cost.

Thus in this way inflation rips the consumers’ pockets in real-time.

Effect of COVID 19 on inflation in India.

Due to COVID 19, strict lockdowns were imposed in India to stop the spread of the virus. This imposition of lockdown proved challenging for India. Due to lockdown businesses came to a halt as suppliers were not able to supply the goods to different locations and also consumers stopped buying nonessential goods. This led to a sudden demand and supply shock. All of the businesses stopped producing and only essential items like groceries, vegetables, and milk were sold.

During this time India's economic growth slowed down rapidly. Now the question is how inflation was affected by these lockdowns?

According to the Reserve Bank of India, inflation remains ambiguous and cannot be predicted. RBI told that the inflation rate will depend upon the speed at which this outbreak can be contained and the economic activity resume. The risk of inflation seems to be balanced at this point, but it could also alter shortly. According to economists, initially, India will see deflationary prices as demand is very low and it would take time to repair the demand and supply chain. When the economic activity resumes, supply shock will decrease but demand shock will remain. As a result, core inflation will decrease. Analysts expect inflation to fall sharply by around 2.5% to 3% this year. Some economists also indicate that when markets open post lockdown, businesses will sell the goods at a higher price to compensate for losses they have made during the lockdown. If this happens the inflation will increase and it will have a negative impact on both society and the economy.

Although core inflation is expected to decrease, retail inflation rose to 7.22%. This happened because the supply of essential goods decreased and the demand increased. It was seen that oil, meat, pulses had elevated prices but prices of perishable goods like vegetables and fruits did not increase. This led to higher retail inflation. Overall, due to low economic activity during the pandemic, the GDP is expected to decrease by 6.3% to 8% in FY2021. Due to economic growth, core inflation is expected to decrease and retail inflation is expected to remain constant.

Retail inflation is expected to remain constant because there has been an increase in Kharif sowing this year and the government is holding significantly more buffer stocks.

The government can reduce inflation by controlling monetary policies. They could also use price control to fight inflation but this could lead to an increase in unemployment and can also cause a recession if continued for a long period. In this pandemic scenario, core inflation is expected to decrease and this may lead to a decrease in prices. However, retail inflation has increased and the government should come up with a new policy to control this inflation before it becomes a burden for consumers. Thomas Sowell, an American economist quoted inflation as "It is a way to take people's wealth from them without having to openly raise taxes. Inflation is the most universal tax of all�.

Travel, A Key To Revival By- Meghana Gummuluru COVID-19 pandemic has spread with alarm speed, bringing economic activity to a near standstill, hospitality, travel and tourism is not exempted from this blow as hit the hardest due to travel restrictions across the world and in India.

PRE-COVID SCENARIO

There are so many such employees who had lost their work in the hotel industry. Around the world top Hotels like Marriott International, Hilton Hotels notified that they would be borrowing a precautionary $1.75bn under a revolving loan to maintain flexibility.

The revenue per available room in the United States has fallen to 11.6% by the end of March 7th, 2020, while in China the rate fell 89% by the end of January 2020. US hotel companies are seeking roughly $ 150 billion in direct aid for their employees amid an unprecedented drop in demand, with an estimated loss of $ 1.5 billion since mid-February. MGM Resorts International also announced a temporary suspension of operations at its Las Vegas properties, with casino operations closing on March 16, followed by hotel operations. Since March 1, 2020, the occupancy rate of hotels in Germany has fallen by more than 36%. Italian cities, including Rome, have been inadvertently affected by a current occupancy rate of 6%, while London remains the most stable with an occupancy rate of around 47%. Overall, the COVID19 crisis has led to international distortions for the hospitality industry and major collapses for the European hotel market.

Tourism, it is one such industry that was hit the most because of the pandemic. In history, this is the only industry that has not seen loss or got any job loss or lost booming growth. Tourism for the past few months has been losing its fame and craze. People who love to travel have become helpless and the person whose bread and butter depend on this industry has been taken off from them.

As a direct consequence of COVID-19, the World Travel and Tourism Council has warned that 50 million jobs in the global travel and tourism sector could be at risk.

In Europe, the European Tourism Manifesto alliance, which brings together more than 50 European public and private organizations from the travel and tourism sector, has underlined the need for urgent action. These include temporary state aid to the tourism and travel sector from national governments, as well as quick and easy access to short- and medium-term loans to overcome liquidity shortages, including the funds made available by the EU under the Corona Response Investment Initiative, and the relief. The alliance also called for the launch of the European unemployment reinsurance program.

Vietnam's tourism sector is estimated to suffer a loss of $ 5 billion if the pandemic of COVID19 extends into the second quarter of 2020.

In addition, the Philippines are forecasting a slowdown of 0.3 to 0.7% of the country's annual GDP. In the United States, restricting all non-essential travel, closing the Canada-U.S. Border, and suspending visa services may accelerate the disruption of the U.S. economy. In the UK many parks are now closing to strengthen social distancing as they have done in Italy.

Let us have look at the post Covid scenario which are predicted,

It is predicted that within 18 to 24 months it may grow up to 13% and some sources even responded and predicted that in or around 6 months the growth may rise to 53%. The above presented bar graph shows the post COVID scenario.

With cruise tourism halted following COVID-19, but likely to resume in 2021. The relevance of these forms of tourism and propose future development alternatives aligned with the deglobalization and shrinking of the industry. Power relations with destination communities can be criticized using the concepts of global mobility and local mobility to show that the former, imperative for the deployment of mass cruise tourism, is a weakness for the industry in a postpandemic perspective of reduced mobility. Destinations must use the industry's reliance on global mobility as a lever to transform the balance of power in their favour and promote local mobility. They must adopt radical solutions to take control of their territory to promote a transition from "growth for development" to "de-growth for habitability". Host territories, relying on national and regional governance, should gradually ban or restrict the arrival of mega-cruise ships, implement policies promoting the development of a niche cruise tourism industry (NCTI) with small vessels and develop a fleet controlled by local players.

Medical Tourism refers to people who are travelling abroad to obtain medical treatment. These were generally those who travelled from less developed countries to major medical centres in highly developed countries for treatment not available at home.

In 2015, India was the third most popular destination for medical tourism, while the industry was worth $ 3 billion. The number of foreign tourists entering the country on medical visas was nearly 234,000 that year. In 2017, the number of arrivals more than doubled to 495,056, according to government figures.

As of mid-2020, the medical tourism sector in India was estimated at US $ 5-6 billion. In 2017, 495,056 patients travelled to India for medical treatment Aviation, a part of international tourism and hospitality which is experiencing a downfall like the other the other industries. The travel industry is grappling with an unprecedented wave of cancellations and a significant drop in demand under strict instructions from the government to implement social distancing and restriction of unnecessary travel. Globally, border closures are on the rise. In the United States, all foreign nationals from China, Iran, and some EU countries are prohibited from entering.

This ban applies to anyone who has visited these countries in the 14 days prior to their trip to the United States. The British Foreign Office has also advised British nationals against all international travel except essentials.

In Europe, the president of the European Commission has proposed that all non-essential travel from outside the EU be suspended for 30 days. Travel suspensions have also been implemented in Asia and Africa.

In light of these events, Malaysia's airport reported a 30% drop in international passenger traffic in February. Most recently, Airlines for America called for a government bailout that included $ 25 billion in grants, $ 25 billion in loans, and significant tax breaks to ensure its survival.

Netherlands ministers also signaled the implementation of strategies to ensure the continued operation of Air France-KLM and Amsterdam-Schiphol Airport, while the Italian government is reportedly poised to take the lead. Full control of the ailing airline Alitalia.

Tourism in India is important to the country's economy and is growing rapidly. The tourism industry contributes 7.3% of GDP and 6.5% of total exports. In addition, this tourism sector accounts for 2.7 percent of total employment in the economy. The World Travel and Tourism Council calculated that tourism generated â‚š 16.91 lakh crore ($ 240 billion) or 9.2% of India's GDP in 2018 and supported 42.673 million jobs or 8.1% of its total employment. This pandemic caused a huge blow to such a large sector.

Unemployment in India By: L.H Vadiraj You take my life when you take the means whereby, I live -William Shakespeare Unemployment is a situation wherein a person is willing to work but is not able to find the work at the current rate of wage level. Unemployment is a universal feature of capitalist societies. It does not mean ‘No employment’. It means ‘Lack of employment’. Well, what do you think? Are we in the middle of a pandemic? The answer is No. We are in the middle of a job epidemic. Once the job is lost it's difficult to be retrieved until the skills are upgraded to get back on to the track. Increasing unemployment is a grave concern for us. India had been facing an unemployment crisis even before the pandemic. The country is going through a serious employment crisis as crucial sectors of the industry including small, medium, and micro-enterprises like hotels and restaurants, multiplexes, retail, airlines, manufacturing, and media are severely affected by the COVID 19 pandemic.

In India, 120 million workers including small traders and daily wage earners lost their jobs in April because of the nationwide lockdown. People such as rickshaw pullers and construction workers are the worst hit whose home runs on the daily business. The migrant laborers are suffering. About 90% of India's 500-million strong workforce toils in unregulated businesses and jobs. Those working as house help and personal drivers, as well as the self-employed in the service industry. They may be slightly better than the daily wage earners, but maybe living on the edge as they may not have savings to survive long."

Taking into consideration the current COVID scenario the unemployment has been affected drastically. As we are aware of the falling GDP which will directly or indirectly have a huge impact on small-medium scale industries or enterprises.

In the Pre COVID period, the employment rate stood at 39%. However, for the week ending on July 5, the employment rate stood at 36.9% which was an improvement over the 35.9% recorded in June 2020. India's unemployment rate for the 2017-2018 FY was spruced at 6.1 percent, the highest in 45 years. A month before the government implemented the first nationwide lockdown starting March 25 the unemployment rate stood at 7.76% in February.

The unemployment rate rose just 0.1 percentage points in the week ended June 28 to 8.6% and 0.3 percentage points for the week ended July 3 to 8.9%, after it fell sharply from the peak of 23.5% in May 2020 to 11% in June.

According to data from the centre for Monitoring Indian Economy (CME), the overall unemployment rate stood at 7.43 percent in July. There was a spike in the country’s unemployment rate to 23.48% for the week ended May 3, up from the fewer than 7% level before the start of the pandemic in mid-March. In the urban areas, the unemployment rate was the highest at 25.79%, as against 22.89% for the rural areas. There is still cause for concern among the major states, in Bihar it accounts for 12.19%, Andhra Pradesh 8.35%, Rajasthan15.23%, Telangana 9.05%, and Delhi accounts to around 20.3%, all of them have recorded rates markedly higher than the national average.

India's unemployment rate fell to 11 percent in June 2020 from a record high of 23.5 percent in the previous two months, as many businesses resumed operations following weeks of closures due to the corona virus pandemic. The jobless rate in urban areas dropped to 12.0 percent from 25.8 percent, while those in rural areas were right down to 10.5 percent from 22.5 percent.

Unavailability of capital can also be considered as one of the causes of increasing unemployment. Various other factors such as the unavailability of required skills, lower wage rates and lack of FDI and manufacturing plants in India are a few of the other reasons behind the increasing unemployment. Though the increasing population is one of the most blamed reasons in India. We should take into consideration that it can be used as one of our strong pros. as easy availability of labour and cheap labour cost can cause cost minimization. Legal complexities, inadequate state support, low infrastructural, financial, and market linkages to small businesses making such enterprises unviable with cost and compliance overruns.

The Regulatory Measures were taken by the Government of India to reduce the unemployment level: •

“Atal Beema Vyakti Kalyan Yojan” – This yojana provides unemployment insurance to workers who have already subscribed to ESI Schemes. ESI is a self-financing scheme for formal sector workers. During this pandemic, these workers will get insured.

•

MNREGA workers: The wage rate increase from INR 182/- to INR 202/-. The increase will benefit around 50 million families. The increase in amount will benefit the workers as an additional income of INR 2,000/- per worker.

•

The welfare fund for building and construction workers will be used by the State governments as per the directions. Those who are facing disruption because of the lockdown then the fund worth INR 310 billion will be used for their help. Within 45 days MSME is due to be cleared.

•

Liquidity infusion for NBFCs/HFCs/MFIs of INR30k crore (USD 3.9 bn).

•

Partial credit guarantee scheme for NBFCs.

•

Equity infusion of INR50k crore for MSMEs having growth potential and viability through Fund of Funds Stressed MSMEs to get INR20k crore (USD 2.6 bn) subordinate debt New definition of MSMEs – investment limit revised upwards; additional criteria of turnover introduced.

•

There will be no global tenders for government contracts up to INR200 crore.

•

Promotion of E-markets as the replacement of trade fairs and exhibitions.

•

Liquidity infusion of INR90k crore to DISCOMs to discharge liabilities to power generating firms.

•

The 3 months moratorium to be allowed on the repayment of instalments for term loans which were outstanding as on March 1, 2020, by all lending institutions.

•

Lending institutions permitted to allow deferment of 3 months on payment of interest w.r.t all such working capital facilities o/s as of March 1, 2020

•

Moratorium period to be excluded while computing 90 Day NPA norm for asset downgrade.

•

The period allowed Under the RBI framework for resolution extended by 90 days (210 + 90 days).

•

Further deferring implementation of the last tranche of 0.625 % of capital conservation buffer to Sept. 30, 2020.

•

The extension is provided by all Central Agencies of up to 6 months.

•

The Government agencies may partially release guarantees; to the extent, contracts are partially completed.

•

There is an extension by up to 6 months for all registered real estate projects for its Registration and completion.

The Effect of the Black Swan on Indian Stock Market

By Ankush Kapoor Introduction On 09-03-2020 we witnessed the worst drop in the market since the recession of 2008. The reason is pretty obvious, isn’t it? Yes, it’s the COVID-19 Pandemic. The COVID-19 crisis is an unprecedented one in the history of the world. Many pundits have declared COVID-19 as the “Black Swan” of 2020. Industries that have successfully digitalized are thriving, while those businesses that are unable to do so are in danger of collapsing and bringing a significant piece of the economy down with them also it has impacted the financial markets worldwide.

Implications of COVID-19 Exhibit 1

Data Source- BSEIndia: 2020 data till July 22nd, 2020 There is something strange happening in the stock markets across the globe, especially India.

To say the least, it seems like the markets are either not paying adequate seriousness to the pandemic or anticipating the discovery of a vaccine more optimistically when compared to the rest of the world. The bounce back to pre-COVID levels has left many investors in ambiguity.

At the start of 2020, we saw both NSE and BSE trade at their highest peaks of 12,362 and 42,273 respectively. During the 2nd week of January 2020, 30 companies were expected to file IPO’s. The market conditions were in their favour. But then the unimaginable happened.

Following the crash of the worldwide markets, BSE Sensex and Nifty fell by 38%. The effects of this were felt in the coming days. Sensex and Nifty crashed around 8% on the same day.

Intraday records show that Sensex crashed 3304.3 points, its biggest single-day drop in history and the mid-cap index fell by 26%. Companies started scaling back, employee compensation started declining significantly, and then came the layoffs.

Generally, with the drop in the price of oil, we expect to see the automobile index to climb up, but this was not the case this time. Since mid-2018, the Indian auto sector has been under stress. The automobile industry which accounts for about 10% of the GDP and employs around 40 million people was already seeing the worst drop in sales since January’20 due to the upgradation from BS4 to BS6 engines. The Nifty Auto Index dropped constantly for 3 months

and reached it’s lowest ever of 10264.72. If we look at the NSE Auto Index, it has given (20.39%) return from January 2020 to July 2020. Auto major Mahindra and Mahindra (M&M) and MG Motors reported 0 domestic sales in the month of April due to the corona virus led nationwide lockdown. M&M reached the lowest ever of 264.40 in April i.e. a drop of 23%.

Exhibit 2 shows the fall in the volume of auto sector sales: Exhibit 2 Category

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

Passenger Vehicles

26,01,23 6

27,89,20 8

30,47,58 2

32,88,58 1

33,77,38 9

27,73,57 5

Commercial Vehicles

6,14,948

6,85,704

7,14,082

8,56,916

10,07,31 1

7,17,688

Three Wheelers

5,32,626

5,38,208

5,11,879

6,35,698

7,01,005

6,36,569

Two Wheelers

159,75,5 61

164,55,8 51

175,89,7 38

202,00,1 17

211,79,8 47

174,17,6 16

Grand Total

197,24,3 71

204,68,9 71

218,63,2 81

249,81,3 12

262,65,5 52

215,45,4 48

Data Source: SIAM The third quarter of the financial year 2020 in India saw the lowest growth of the FMCG sector in the last seven quarters, with the growth being valued at only 6.6% (shown in exhibit 3). The NIFTY FMCG fell from 31,502.81 to 22,563.73 from February’20 to March’20. There were multiple reasons attributed to this. Some of them were lower GDP of the country, rising inflation, and weak rural demand, which lead to lower household spending. However, the rural India story is one that cannot be ignored.

Exhibit 3

Data Source: MoneyControl Nifty FMCG

The Tourism sector and Aviation contribute around 9% and 2.4% to India’s GDP and employ 42.7 million people combined. Due to the lockdown imposed by the government, these industries were impacted the most and millions of people were left unemployed. With the ease in the restrictions imposed by the government, the aviation stocks have started to climb again but at a slow pace, whereas the tourism sector is still struggling.

Even the IT industry which plays a major role in the Indian markets was not immune to this crisis as the majority of the business secured by them comes from the European and North American countries which were severely affected by the rise of COIVD-19 cases in their respective countries.

One of the only sectors to benefit from this pandemic was the Pharma sector. The Indian pharma sector is the 3rd largest in the whole world. It is responsible for the manufacturing of 60% of vaccines used globally. The Indian Pharma sector is expected to grow to $100 billion by 2025. The S&P BSE Healthcare Index shows the highest price traded during in July to be Rs. 18,327.4. The major players in the pharma sector include Sun Pharmaceuticals Industries Ltd highest traded at Rs. 564.90, Cipla Ltd highest traded at 814.50, and Dr. Reddy’s Laboratories 4758.60.

Conclusion It would be foolish to expect a quick rebound from the current effects of the COVID-19 pandemic. The financial crisis is inevitable, but keeping in mind the efforts and steps taken by the central bank and the fiscal authority to avoid the deep economic slump might prove to be helpful. The problem in the current scenario is that the situation is new and economists cannot predict the endgame. Trade in 2020 is expected to fall steeply in every region of the world and basically across all sectors. But the global trade could rebound rapidly after this crisis since the European and North American countries have almost ended the restrictions imposed. However, it also depends on how quickly the pandemic is brought under control and the policy choices which the governments took to support their economies. Once this pandemic is over with normalcy returning to business and economy, the stock market will start moving in a positive direction, and as witnessed in the past, the recovery will be faster than expected. It is true about the market whether it is the growth or the correction, both phases make the stock market interesting and worth taking exposures. I’d highly suggest not to jump into the market or do not try to catch the falling knife.

Relief Packages- A Lifeline? By - Suraj Bhat The ultimate resource in economic development is people. It is people not capital or raw material that develop an economy.

Peter Drucker From the last 6 months, there are uncommonly troublesome occasions for our country and the world. Individuals are grasped with the dread of illness and passing from COVID-19. This dread is pervasive and rises above geography, class, and religion. The failure of countries to control the spread of the novel COVID and the absence of an affirmed solution for the ailment have exacerbated individuals' interests. Such an uplifted feeling of uneasiness among individuals can cause gigantic changes in the working of social orders. Subsequently, interruption of the typical social request will affect vocations and the bigger economy.

The economic turmoil due to COVID-19 has been highly examined. There is unanimity among financial specialists that the worldwide economy will encounter one of its most noticeably terrible years ever. India is no exemption and can't avoid the pattern. It is obvious, that there will be a significant contraction in India’s economy.

Relief Packages Introduced To Minimize The Impact.

The mega package of Rs 20 lakh crore announced by prime minister Narinder Modi has a budgetary improvement bundle to fight the COVID pandemic spreading its limbs the nation over.

This package will focus on labour, land, liquidity, and laws to restore the economy that has halted due to the COVID lockdown.

The Rs 20 lakh crore bundle incorporates Rs 1.7 lakh crore bundle of free food grains to poor and money to helpless ladies and older, declared in March, just as the Reserve Bank's liquidity measures and loan cost cuts.

•

• •

As a component of the Rs 1.70 lakh crore Pradhan Mantri Garib Kalyan Package (PMGKP), the legislature declared free wheat, rice, and pluses to the poor just as a money instalment to farmers, ladies, and helpless senior residents over a time of a quarter of a year till June.

As indicated by the most recent government information, Rs 34,800 crore budgetary help utilizing digital payment instalment framework was given to around 39 crore recipients.

36 states/UTs have lifted 67.65 lakh MT of food grains under the Pradhan Mantri Garib Kalyan Ann Yojana. It is estimated around 16 LMT of food grains have been distributed, featuring 60.33 crore recipients by 36 states/UTs.

PM Narendra Modi had said the Indian economy has begun seeing "green fires" of recuperation and the nation stays one of the most open economies on the planet. Finance minister Nirmala Sitharaman had stated that "Every option is open...interventions will streamline in future,

guaranteeing the business that the government will take steps to ensure in early recovery of the economy.

A Post-Pandemic Economy Plan The Indian government means to embrace changes across eight segments as a component of the Prime Minister's Aatmanirbhar Bharat conspire—a postpandemic economy plan that is planned for helping the economy recuperate from the effect of Covid-19. Finance Minister Nirmala Sitharaman itemized these changes, some of which have been reported before or are now work-inprogress. Changes were declared across parts including coal, minerals, civil aviation, defense, power conveyance, social foundation, space, and nuclear vitality. The present measures are centered around auxiliary changes for divisions which will be new skylines for development, as Prime Minister's Aatmanirbhar Bharat plan is proposed to make India confident and self-reliant.

•

Commercial Coal Mining

Commercial mining will be presented in the area on an income sharing premise rather than a fixed rupee/ton premise, nearly 50 squares will be offered promptly for business mining alongside somewhat investigated squares. The administration will likewise put Rs 50,000 crore in a coal-related foundation.

•

Minerals

A composite investigation mining-creation system will be presented and 500 mining squares will be offered through an open and straightforward closeout measure under these principles.

The differentiation among hostage and non-hostage mines will likewise be eliminated and stamp obligation payable at the hour of a grant of mining leases will think.

•

Defense Production

The foreign direct investment limit will be raised to 74 per cent from 19 per cent in defense manufacturing under the automatic route. The administration will inform a rundown of weapons/stages which will be put under an import boycott to energize local production and procurement.

•

Civil Aviation

The government has declared opening up of airspace accessibility and said that six additional air terminals will be privatized. Just 60 per cent of Indian airspace is freely accessible.

Limitations on the use of Indian airspace will presently be eased. This will spare Rs 1000 crore in flying expenses.

•

Power Distribution Companies

The government will find a way to privatize power dispersion organizations in association domains. Shortcomings of the dispersion organizations won't be permitted to hurt consumers.

Privatization of DISCOMS in union territories is positive for companies like Torrent Power, Tata Power and CESC Privatization in Delhi has done well where Tata Power has minimized transmission losses from 60 per cent to 12 per cent.

•

Social Infrastructure

The government will upgrade funding for social sector projects to 30 per cent of the absolute venture costs against 20 per cent for different divisions. This will include an all-out expense of Rs 8,100 crore •

Space

Private support in the space area will be helped by giving a level battleground in satellite, dispatches, and space-based administrations Private division will be permitted to utilize ISRO offices and future ventures for planetary investigation will be opened for them. A liberal geospatial information strategy will likewise be presented.

•

Nuclear vitality

An examination reactor will be set up in open private association mode for the creation of clinical isotopes. Also, offices will plague up under PPP mode to utilize light innovation for food protection.

Will It Be Enough?

According to some economists, this stimulus package may not be sufficient to move the needle on the economic impact from the lockdown.

India will probably require something much larger than Rs20 lakh crore of support. 60% of India’s economy is under lockdown since March 2020. It could be much longer, simply because the public health system in India is so stretched, which have had had a shocking impact on the GDP figure of India.

It is estimated that we might see some relief packages ahead to the re-stabilize economy and reach the estimated GDP targets in 2022.

The mega package of Rs 20 lakh crore announced by prime minister Narinder Modi has a budgetary improvement bundle to fight the Covid pandemic spreading its limbs the nation over.

This package will focus on labour, land, liquidity, and laws to restore the economy that has halted due to the Covid lockdown.

FINANCIAL TRIVIA

MONEY FOR THOUGHT: Uncertainty in every turns of life keep us on our toes all the time which result in becoming more cautious on what is happening around the world. COVID is a black-swan effect which distorted the flow of world economy and India is no exception. Luckily the GDP deceleration did not fence people to detach from market. This, we call ‘the leap of hope’ which will keep our economy rolling. The reasons for mending people’s faith include the enormous global investments in Indian companies like Zomato, Reliance etc. helping them reach billions as market value, the line-up IPOs of Burger King (India) Limited, Kalyan Jewelers, LIC etc., the government policies like production linked incentive scheme (PLI) and the future plans of companies like Apple and Samsung to shift from China to India etc.

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