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There’s bullishness on consumption demand in India as income levels of the middle class are increasing, said Shanti Lal Jain, Managing Director (MD) and Chief Executive Officer (CEO) of the Indian Bank.
“India has 1.4 billion people. Their income levels are increasing. The middle class is increasing, and their spending is up. As a result, demand is growing. This is good for all the world, including India, and more particularly for the banks,” said Jain.
There are a number of reasons to be bullish on the Indian market. “GST collections, PMI, current account deficits, and foreign exchange reserves are comfortable. There is political stability in the country,” said Jain.
India’s relations with the rest of the world are also a positive, he added.
This is a good time for the financial sector, including banks, to grow, he pointed out.
He said that during stable times, investment flows into the country, which in turn results in heightened business activity. Naturally, the banking sector prospers during such times. “Therefore, we are very bullish on India,” he said.
On July 27, Indian Bank reported a 40.8 percent rise in net profit to Rs 1,708.8 crore for the April-June quarter of FY24 (Q1 FY24), compared to Rs 1,213 crore a year ago.
The public sector lender’s gross non-performing assets (GNPAs) declined to 5.47 percent from 8.13 percent during the quarter, while net non-performing assets (NNPAs) fell to 0.70 percent from 2.21 percent.
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The International Monetary Fund (IMF) has raised its GDP growth forecast for India for 2023-24 to 6.1 percent from 5.9 percent due to the blowout growth number for January-March.
“Growth in India is projected at 6.1 percent in 2023, a 0.2 percentage point upward revision compared with the April projection, reflecting momentum from stronger-than-expected growth in the fourth quarter of 2022 (financial year 2022-23) as a result of stronger domestic investment,” the multilateral agency said on July 25 in an update to its World Economic Outlook (WEO) report.
Data released on May 31 showed India’s GDP growth for Q1 FY23 rose to 6.1 percent, comfortably beating all expectations and forcing the statistics ministry to raise its estimate for growth in FY23 by 20 basis points (bps) to 7.2 percent.
The Indian economy may have grown faster in 2022-23 than the statistics ministry’s estimate of 7 percent, Reserve Bank of India (RBI) Governor Shaktikanta Das said on May 24.
“For the year that has just ended, 2022-23, the estimates are that it (GDP growth) will be 7 percent. But there is a possibility that it could be even more,” Das said at the CII Annual Session in New Delhi.
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“According to all recent trends, it will not be a surprise if GDP growth for last year comes to slightly more than 7 percent. But let’s stick to 7 percent for the time being,” he added.
As per the statistics ministry’s second advance estimates released on February 28, India’s GDP is estimated to have grown by 7 percent in 2022-23.
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