The government will roll out a new electronic policy to boost electronic manufacturing and create an inclusive ecosystem for promoting digital economy in the country, Ravi Shankar Prasad, Union minister for electronics & IT and law & justice, said at an industry consultation round table to build a $1-trillion digital economy, on Friday. Key areas of priority will also include software product policy, data security and data protection, start-up cluster, and robust dispute resolution mechanism, according to Prasad. The minister emphasised on shortening the timeline of the digital economy to 3-4 year from more than 7 years to create a $1-trillion digital economy in India that will boost digital skilled employment and growth of sectors such as communication, e-commerce, BPO, and IoT. Industry stakeholders added that the government will work toward digital skilling of workforce in India. Increased electronic manufacturing can make India nodal in mobile manufacturing, Prasad added. The new electronic policy will focus on e-health, education and agriculture. The government seeks to more than double the digital economy to $1.12 trillion from $413 billion. Industries such as electronics, telecom and IT will be at the forefront of digital employment with 8.9 million, 8.8 million and 6.5 million jobs respectively. The start-up movement will boost e-commerce and digital payments and push their share to $150 billion and $50 billion, respectively, by 2024-25.
India’s current account deficit is expected to be around 1.4 per cent of GDP in 2017 compared to 0.6 per cent in 2016, owing to stronger domestic growth, says a report. The Japanese financial services major Nomura has revised India’s 2017 CAD forecast to 1.4 per cent of GDP from 1.6 per cent earlier, but still expects current account deficit to be higher than the 2016 figure. Nomura expects India’s CAD to widen in 2017 against last year as import growth should pick up in the second half 2017 due to a stronger domestic recovery, even as protectionist policies will likely hurt services exports. “We are revising our 2017 CAD forecast to 1.4 per cent of GDP (as against 1.6 per cent earlier) but we still expect it to be wider than in 2016 (0.6 per cent) owing to stronger domestic growth,” Nomura said in a research note. The key risks to this outlook are rise in protectionism, weaker global growth or a surge in oil prices. According to Reserve Bank of India, the current account deficit soared to $3.4 billion, or 0.6 per cent of gross domestic product (GDP) in the fourth quarter of fiscal 2017, compared to $0.3 billion a year ago. For the full fiscal 2017, CAD narrowed to 0.7 per cent of GDP compared to 1.1 per cent in the previous fiscal on the back of a contraction in trade deficit. Commenting on the first quarter CAD data, Nomura said it was better than expected and the positive surprise was led by a narrower merchandise trade deficit and moderation in investment outflows.
Foreign investors have pumped in a staggering $3.55 billion in the Indian capital market this month so far due to finalisation of GST rates for bulk of the items and forecast of a normal monsoon. Interestingly, most of the funds have been invested in debt markets by foreign portfolio investors (FPIs). “The differential spread between 10-year bond yields in the US and India is still around 4.5-5 per cent. This, coupled with stable outlook for the Indian currency bodes well for FPI flows into debt market,” Sharekhan Head Advisory Hemang Jani said. According to latest depository data, FPIs have invested Rs 4,022 crore in equities during June 1-16, while they poured in Rs 18,821 crore in debt markets during the period under review, translating into a net inflow of Rs 22,844 crore ($3.55 billion). This comes following a net inflow of more than Rs 1.33 lakh crore in the last four months (February-May) on several factors, including expectations that BJP’s victory in Assembly polls would accelerate the pace of reforms. Prior to that, foreign investors had pulled out over Rs 3,496 crore from the markets in January. “The most prominent reason for FPIs’ net inflow is expectation from the government that it would speed up development and economic reforms in their last two years in office before going for elections in 2019. “The government finalising GST rates and expectation that it will be rolled out on time, in addition to forecast of normal monsoon also led to positive sentiment,” Himanshu Srivastava, Senior Analyst Manager Research at Morningstar India said.