The positive intent shown by the Indian government recently on key reforms such as foreign direct investment in key sectors such as insurance, retail, aviation and urban infrastructure seems to have enthused the country's central bank.
In its annual report released on Thursday, the Reserve Bank of India (RBI) said while the economic growth scenario was still gloomy, there was a ray of hope that growth would pick up later in the year. That hope, of course, hinges on how fast the government delivers on its promises.
In sync with its wholesale price counterpart, India's retail-price inflation declined to 9.86 percent in July from 9.93 percent in June, on the back of easing of fuel and light inflation.
However, food inflation ticked up further.
Inflation in urban areas remained in double digits, but eased a little to 10.10 percent in July from 10.44 percent in June. In rural areas, however, inflation inched up in July to 9.76 percent from 9.65 percent in the previous month.
With the India Meteorological Department IMD repeatedly failing in accurately predicting the monsoon, India Inc has called for a change in the methodology followed by the country's weather forecaster. A CII expert group, constituted in the aftermath of this year's low rainfall, also suggested a re-look at the current cropping pattern and delivery of farm products, given erratic monsoon. The group also advocated immediate permission to Foreign Direct Investment (FDI) in food retail to streamline supply chains and infuse efficiency.
The Indian government has finally decided to bite the bullet on allowing 51 percent foreign direct investment (FDI) in multi-brand retail, albeit in a different format. The long-pending Cabinet decision is set to be notified by the second week of September, after the Parliament's monsoon session is over, with a clear message that the execution of the decision would lie in the court of the states.
Consumer confidence levels in India have resumed upward momentum after experiencing the first decline of 2012 in June, according to a new study.
BluFin, the financial information provider, and TNS, the research group, polled 4,000 adults in 18 cities, and found the regular barometer of popular sentiment stood at 41.1 points, on a scale where returns over 50 points were indicative of a positive outlook.
India Inc's decade long strong 20 percent compounded growth (2002-2012) is led by sectors that foretell consumption story of luxury-prone middle class.
The fast-growing sectors were air transport services, automobiles, housing construction, gems and jewellery, healthcare, retail and telecom services. The software services sector, with 30 percent compounded growth since 2002 has financed the ambitious and well-educated middle class.
Global ratings firm Fitch Ratings has revised the outlook for the Indian retail sector for the second half of this year from stable to negative, owing to a sustained fall in the discretionary spending ability of consumers, which, according to the firm, is unlikely to improve over the short term.
Only four states and UTs have so far indicated their support for allowing FDI in multi-brand retail, a development which will further delay entry of global chains like Walmart and Carrefour in India.
Notwithstanding the current slowdown, India's retail industry is poised to become a USD1.3 trillion opportunity by 2020, driven largely by modern trade, a joint report by industry body The Federation of Indian Chambers of Commerce and Industry (FICCI) and Tata Consultancy Services (TCS) said.
"The estimated value of the retail sector at the present juncture is about USD500 billion. Penetration level of modern retail, which stands at 5 percent at present, will grow about six times from the current USD27b to USD220b in 2020," the report said.
The rush of new stores and malls in Indian cities such as Pune, Mumbai, and Chennai is eating into sales of existing outlets of retailers such as Shoppers Stop, the Future Group and others.