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Economic Survey projects 7 per cent growth rate for financial year 2019-20

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Economic Survey projects 7 per cent growth rate for financial year 2019-20

The Economic Survey, tabled in Parliament today (Thursday, July 4) by finance minister Nirmala Sitharaman has projected a 7 per cent growth rate for GDP (gross domestic product) in the 2019-20 financial year.

This indicates a higher than the estimated 6.8 per cent growth rate for the previous year ended March 31. The Economic Survey cited investment rate picking up in FY20 on higher credit growth and improved demand as the factors for the higher growth rate.

The projected growth rate could help India overtake China and regain the status of world’s fastest-growing major economy.

Prepared by Chief Economic Adviser (CEA) Krishnamurthy Subramanian, today’s Economic Survey is the first by the re-elected Narendra Modi government. The release of Economic Survey 2018-19 comes a day ahead of the presentation of Union Budget in Parliament.

“Given the macro-economic situation and the structural reforms being undertaken by the government, the economy is projected to grow at 7% in 2019-20. Growth in investment, which had slowed down for many years, has bottomed out and has started to recover since 2017-18,” the Survey said.

Growth is expected to pick up in 2019-20 as macroeconomic conditions continue to be stable while structural reforms initiated in the previous few years are continuing on course. The survey said India maintained its macro-economic stability by containing inflation within 4% and by maintaining a manageable current account deficit to GDP ratio. “The current account deficit to GDP was higher in 2018-19 as compared to 2017-18, primarily due to higher oil prices, which were about $14/barrel higher in 2018-19 vis-à-vis the previous year. However, the CAD started to narrow in the third quarter of the year,” it added.

It also highlighted that lower global oil prices are expected to decline in FY20. Lower global growth and increased uncertainty over trade tension may hit exports, it added.

Sharing his view on the survey, Prime Minister Narendra Modi tweeted: “The Economic Survey 2019 outlines a vision to achieve a $5 trillion economy. It also depicts the gains from advancement in the social sector, adoption of technology and energy security.”

CEA Subramanian said: “Our team has put in a lot of effort with a lot of dedication. I hope results are good, and we are able to contribute to the ideas for the economy.”

This year’s survey brings “an effective minimum wage policy that targets the vulnerable bottom rung of wage earners can help in driving up aggregate demand and building and strengthening the middle class,” he added.

In a series of tweets, CEA Subramanian stated that the survey “is inspired by (Mahatma) Gandhiji’s Talisman: ‘…Recall the face of the poorest man [woman], and ask yourself, if the step you contemplate is going to be of any use to him [her].’

He also mentioned that “one of the biggest hurdles to $5 trillion economy is poor enforcement of contracts and dispute resolution. Steps to speed up legal process should be top priority.”

He added that the survey “is imbued by the spirit ‘blue sky thinking’ in thinking about the appropriate economic model for India. This is reflected in the sky blue cover of the survey.”

“The theme of the survey – ‘Shifting Gears’ – is intended to achieve a sustained growth rate of 8 per cent. Using the learning from the Global Financial Crisis, the Survey departs from traditional thinking to view the economy in either a vicious or a virtuous cycle,” said Subramanian. “The Survey makes a sincere effort to live up to the expectation of being an indispensable guide for following, understanding and thinking about the Indian economy.”

Rural wages growth seems to have bottomed out and has started to increase since mid-2018. Further growth in rural wages should help spur rural demand, according to the Economic Survey.

Investment rate, which was declining from 2011-12, seems to have bottomed out and is expected to pick up in the year 2019-20 on the back of higher credit growth, said the Economic Survey.

The government stood by its path of fiscal consolidation in financial year 2018-19, stated the Economic Survey, which expects the general fiscal deficit at 5.8 per cent in 2018-19 as against 6.4 per cent in 2017-18.

The projections come after some disheartening trends earlier this year. In January-March, annual growth slumped to 5.8 per cent, the slowest pace in 20 quarters. Growth for the financial year that ended in March was 6.8 per cent, also a five-year low, and indicators such as plummeting industrial output and automobile sales have stoked fears of a deeper slowdown.

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Google announces country-specific domain names for its search page

This transition to a centralised domain may help Google optimise AI performance in delivering relevant search results.

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In a significant move aimed at unifying its search experience, Google has announced plans to phase out country-level domain names, such as google.ng for Nigeria and google.com.br for Brazil. Instead, the tech giant will redirect users globally to a standardised domain, google.com. This decision aligns with Google’s ongoing effort to enhance search functionality and accessibility, building on the improvement in local search capabilities introduced in 2017.

In a recent blog post, Google explained that it will begin redirecting traffic from these country code top-level domains (ccTLDs) to google.com. This transition will be implemented gradually over the coming months. Users may be prompted to adjust their search preferences during this process, as the company works to streamline the user experience.

“Historically, our approach to delivering localised search results relied on ccTLDs,” Google stated. “However, our capability to offer localised experiences has evolved significantly, making these distinctions unnecessary.” The company reassured users that the core functionality of its search platform will remain unchanged and that compliance with various national regulations will continue.

This initiative reflects Google’s commitment to improving how search results are tailored to individual users without the need for separate country-specific domains. While the official rationale emphasises enhancing global user experience, some industry experts speculate that the change may also be motivated by a desire to better integrate artificial intelligence (AI) into search results, potentially leading to reduced operational costs.

Google employs AI Overviews, a tool designed to aggregate information from a broad range of online sources to provide concise responses to user inquiries. This transition to a centralised domain may help Google optimise AI performance in delivering relevant search results.

Overall, as Google implements this shift, users can expect a more unified search experience. While changes in browser addresses may occur, Google emphasises that the way search operates and its compliance with national laws will remain consistent. This strategic shift signifies Google’s ongoing efforts to adapt to the evolving digital landscape and user needs globally.

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In HUL vs HCL defamation case, Delhi HC orders take down of Lakme sunscreen ad disparaging Derma Co

Honasa, in its plea to the Delhi High Court, argued that HUL’s claims are misleading and disparage competitors, damaging their reputation. In retaliation, HUL filed a countersuit against Honasa in the Bombay High Court, escalating the corporate feud.

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A legal showdown between Honasa Consumer Ltd. (HCL), the parent company of Mamaearth, and Hindustan Unilever Ltd. (HUL), which owns Lakmé, reached the Delhi High Court this week, with both FMCG giants filing defamation lawsuits against each other. On Thursday, the court ordered HUL to pull its current Lakmé sunscreen advertisements, prompting the company to agree to revise its campaign by removing references to “online bestseller” and altering the depicted packaging colours.

The dispute centres on Lakmé’s recent “SPF Lie Detector Test” campaign, which HCL alleges unfairly targets its Derma Co. sunscreen by questioning the efficacy of rival products.

In the ads, HUL claims that some “online bestseller” sunscreens, marketed as SPF 50, provide protection closer to SPF 20, based on in-vivo testing data from the past decade. While no brands are explicitly named, visuals juxtaposing yellow bottles—resembling Derma Co.’s packaging—against Lakmé’s sparked Honasa’s ire.

Honasa, in its plea to the Delhi High Court, argued that HUL’s claims are misleading and disparage competitors, damaging their reputation. In retaliation, HUL filed a countersuit against Honasa in the Bombay High Court, escalating the corporate feud.

The controversy erupted when Ghazal Alagh, co-founder of Honasa, took to LinkedIn to criticise the FMCG sector’s lack of competitive drive, suggesting that legacy brands like HUL have grown complacent. Her comments were seen as a direct jab at Lakmé’s campaign, which challenges the SPF claims of newer sunscreen brands dominating online markets. “The industry needs fresh competition to shake things up,” Alagh wrote, igniting a public spat.

Lakmé’s campaign asserts that some top-selling sunscreens falsely claim in vivo testing—a method involving live organisms like humans or animals—while delivering subpar protection. In a social media statement, Lakmé doubled down, saying, “Certain online bestsellers advertise SPF 50, but their in-market samples test closer to SPF 20.”

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Sensex and Nifty jump nearly 2% as US suspends additional 26% tariffs on India until July 9

Foreign Institutional Investors (FIIs) had sold equities worth ₹4,358.02 crore on Wednesday, signaling caution, but Friday’s momentum suggested a shift in sentiment.

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Indian stock markets staged a robust rally on Friday, with the BSE Sensex skyrocketing 1,310.11 points, a 1.77% gain, to close at 75,157.26. The NSE Nifty followed suit, climbing 429.40 points or 1.92% to settle at 22,828.55, breaching the 22,900 mark during intra-day trading. The surge came on the heels of a White House announcement suspending additional tariffs on India for 90 days until July 9, offering a reprieve amid global trade tensions.

The US decision, detailed in recent executive orders, pauses levies that President Donald Trump had imposed on April 2, targeting India and roughly 60 other nations. Those duties threatened Indian exports ranging from steel to shrimp, raising concerns about competitiveness in the US, the world’s largest economy. The temporary suspension sparked optimism among Indian investors, propelling gains across major sectors.

Leading the charge among Sensex constituents were heavyweights like Tata Steel, Reliance Industries, Power Grid, NTPC, Kotak Mahindra Bank, and Adani Ports. However, not all stocks joined the rally—Asian Paints and Tata Consultancy Services lagged behind, unable to capitalize on the upbeat mood.

Vinod Nair, Head of Research at Geojit Investments Limited, attributed the market’s buoyancy to the tariff relief. “The unexpected pause on US tariffs provided a much-needed breather amid global uncertainties,” Nair noted. He added that while a major IT firm’s recent results fell short of expectations, its robust order book signaled potential growth in the latter half of FY26.

The Indian markets’ performance stood in stark contrast to global trends, where fears of a US-China tariff war cast a shadow. On Friday, China escalated its trade spat with the US, hiking tariffs on American imports to 125% in response to Washington’s 145% levies on Chinese goods.

Asian markets reflected the unease, with Tokyo’s Nikkei 225 plunging nearly 3% and South Korea’s Kospi slipping, though Shanghai’s SSE Composite and Hong Kong’s Hang Seng bucked the trend with gains. European markets traded lower, while US indices had closed sharply down on Thursday, with the Nasdaq tumbling 4.31%, the S&P 500 falling 3.46%, and the Dow Jones shedding 2.50%.

Back home, the rally followed a lackluster Wednesday, when the Sensex dipped 379.93 points to 73,847.15 and the Nifty fell 136.70 points to 22,399.15. Thursday’s market holiday for Shri Mahavir Jayanti gave investors a pause before Friday’s surge. Foreign Institutional Investors (FIIs) had sold equities worth ₹4,358.02 crore on Wednesday, signaling caution, but Friday’s momentum suggested a shift in sentiment.

Elsewhere, global oil prices edged up, with Brent crude rising 0.32% to $63.53 a barrel, reflecting ongoing volatility in commodity markets.

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