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Good news from Govt: GDP growth touches 8.2 percent in Q1 of 2018-19

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6 years ago

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Good news from Govt: GDP growth touches 8.2 percent in Q1 of 2018-19

Amid reports of falling rupee, rising fuel prices and joblessness, the Narendra Modi government finally has some good news that it came out with on Friday, August 31: the Indian economy recorded fastest growth in over two years to touch 8.2 per cent in the first quarter (April-June) of the 2018-19 fiscal.

Strong performance in manufacturing and consumer spending contributed to the growth that cemented India’s position as the fastest growing major economy ahead of China’s 6.7 per cent.

The gross domestic product (GDP) at constant (2011-12) prices in the first quarter of 2018-19 is estimated at Rs 33.74 trillion, as against Rs 31.18 trillion in Q1 of 2017-18, showing a growth rate of 8.2 per cent, according to a statement from Central Statistics Office (CSO).

Releasing the data, the CSO said in its statement that areas such as manufacturing, electricity and gas registered growth of over 7 per cent during the period.

“We are the fastest growing economy… Our economy is back on the track,” Economic Affairs Secretary Subhash Chandra Garg said. He also expressed hope growth could exceed estimates of 7.5 per cent this fiscal year.

“The GDP growth rate…indicates clearly that several structural reforms introduced such as GST have started giving rich dividends,” Finance Secretary Hasmukh Adhia said.

The high growth rate is aided by a low base effect — it stood at 5.6 per cent in April-June 2017.

In terms of Gross Value Added (GVA), the economy grew at 8 per cent in April-June this year compared with 5.6 per cent in April-June 2017. GVA represents the total output and income in the economy. As per the new methodology followed by CSO, the GDP is calculated by adding product taxes to the GVA at basic prices, and removing subsidies.

Manufacturing growth picked up significantly at 13.5 per cent during the period on the back of higher government expenditure giving households more money to spend. The manufacturing sector had witnessed a contraction of 1.8 per cent in Q1 last financial year. Private final consumption expenditure jumped 8.6 per cent in Q1 FY19 compared with 6.9 per cent in Q1 FY18.

For the full year, the government expects the economy to grow about 7.5 per cent. The RBI has forecast a GDP growth rate of 7.4 per cent for 2018-19. External headwinds including high oil prices that bring along the risks of imported inflation, and increased trade protectionism may impact exports.

“India’s GDP for the first quarter this year growing at 8.2% in otherwise an environment of global turmoil represents the potential of New India. Reforms and fiscal prudence are serving us well. India is witnessing an expansion of the neo middle class,” Finance Minister Arun Jaitley said in a tweet.

The construction sector growth jumped 8.7 per cent in Q1 FY19, from 1.8 per cent in Q1 FY18. Agricultural, forestry and fishing sector recorded growth of 5.3 per cent, up from 3.0 per cent, mainly due to more than a 15 per cent increase in production of rice, coarse cereals and pulses during rabi reason.

While manufacturing, construction and farm growth picked up pace, services sector growth largely fell during the quarter. Mining sector growth went down significantly to 0.1 per cent in Q1 FY 19, in contrast to 1.7 per cent in Q1 FY 18.

Analysts said since the first quarter growth was aided by low base year growth in first quarter, full growth is estimated at around 7.5 per cent.

Department of Economic Affairs Secretary Subhash Chandra Garg said that the V-shaped recovery of growth in Indian economy is complete now. “The Indian economy should grow at robust and steady state in full year, remaining the fastest economy in the world. Robust GDP performance in Q1 raises hope of exceeding estimates of 7.5 per cent for current fiscal,” he said.

Former Finance Minister P. Chidambaram said he is happy that the growth rate has quickened but it is based on the lowest base year growth of 5.6 per cent in the last eight quarters. “Going forward, the base effect will not be so favourable. And when we reach Q3 and Q4, the rate of growth may decline and the annual growth rate may be more or less like last year’s,” he said in a tweet.

Bibek Debroy, Chairman of the Economic Advisory Council to Prime Minister (EAC-PM), said that the growth numbers indicate “superior acceleration in India’s growth trajectory” and validate that the economic fundamentals remain robust.

“The encouraging growth rates in agriculture, manufacturing and construction show that the growth momentum continues to be broad-based. In addition, one also expects favourable monsoons to further boost agricultural output and rural consumption in the coming quarters,” Debroy said.

“While the recent fall in the rupee is likely to provide some support to exporters, rising global protectionism and slower global growth might limit the pickup in exports this year. Therefore, the major support to growth needs to come from a sustainable recovery in private consumption and investment,” CARE Ratings was reported to have said in a note ahead of release of GDP growth data release.

Key Highlights

  1. The growth in GDP is the highest growth in two years; strongest since Q1FY16.
  2. The economic activities which registered growth of over 7 per cent in Q1 of 2018-19 over Q1 of 2017-18 are ‘manufacturing, ‘electricity, gas, water supply & other utility services’ ‘construction’ and ‘public administration, defence and other services’.
  3. The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘Trade, hotels, transport, communication and services related to broadcasting’ and financial, real estate and professional services is estimated to be 5.3 per cent, 0.1 per cent, 6.7 per cent, and 6.5 per cent respectively during this period.
  4. Quarterly GVA at basic prices for Q1 2018-19 from ‘agriculture, forestry and fishing’ sector grew by 5.3 per cent as compared to growth of 3.0 per cent in Q1 2017-18.
  5. Quarterly GVA at basic prices for Q1 2018-19 from ‘manufacturing’ sector grew by 13.5 per cent as compared to growth of (-) 1.8 per cent in Q1 2017-18.
  6. Quarterly GVA at basic prices for Q1 2018-19 from ‘Electricity, Gas, water supply and other utility services’ sector grew by 7.3 per cent as compared to growth of 7.1 per cent in Q1 2017-18.
  7. Quarterly GVA at basic prices for Q1 2018-19 from ‘Construction’ sector grew by 8.7 per cent as compared to growth of 1.8 per cent in Q1 2017-18.

Core sector data

Eight core sectors grew by 6.6 per cent in July pushed by healthy output in coal, refinery products, cement and fertiliser. The eight core sector – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — had registered a growth of 2.9 per cent in July last year.

The output of coal, refinery products, fertiliser and cement grew by 9.7 per cent, 12.3 per cent, 1.3 per cent and 10.8 per cent respectively in July 2018.

However, growth rate in production of crude oil and natural gas recorded negative growth in the month of July.

On the other hand, steel sector expansion came down to 6 per cent, as against 9.4 per cent in July 2017.

During the April-July period of the current fiscal, these 8 sectors grew by 5.8 per cent as against 2.6 per cent in the year-ago period. In June, they grew by 7.6 per cent.

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Google reduces 10% of managerial staff to enhance efficiency and ‘Googleyness’

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6 days ago

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December 20, 2024

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Google has pruned its managerial workforce, reducing it by 10% in a move aimed at streamlining operations and redefining its corporate culture in a year-long push. This pruning, part of a broader efficiency drive, includes a 10% cut at manager, director, and vice president levels.

Reports indicate that during an all-hands meeting, CEO Sundar Pichai outlined the rationale behind the decision, emphasizing the need for efficiency and redefining the company’s core values, often referred to as “Googleyness.”

A Google spokesperson revealed that some affected employees would transition to individual contributor roles, while others faced role eliminations. These adjustments come amidst growing challenges in the tech industry, particularly with rapid developments in artificial intelligence (AI) and fierce competition from rivals like OpenAI.

The AI race and Google’s response

The tech giant has recently intensified its focus on AI innovations, unveiling Gemini 2.0, its most advanced AI model yet. Sundar Pichai described the new model as heralding a “new agentic era” in which AI systems are designed to comprehend and make decisions about the world.

This announcement boosted Google’s stock, which surged by over 4% following the news, a day after a 3.5% increase attributed to breakthroughs in its quantum chip technology.

Previous layoffs in 2024

The latest layoffs mark Google’s fourth round of job cuts in 2024. Earlier in January, Google eliminated several hundred positions in its global advertisements team. In June, its cloud unit also saw workforce reductions. By January of this year, Google had already cut 12,000 roles, equivalent to 6.4% of its global workforce.

In a letter addressed to employees during the earlier layoffs, Pichai took responsibility for the decisions, stating that the company had experienced dramatic growth that required adjustments to sustain operations. Despite efforts, he acknowledged the process could have been managed better.

Redefining ‘Googleyness’

At the same meeting, Pichai stressed the need to revisit and reshape the concept of “Googleyness.” This term, often used to define the company’s unique culture and hiring philosophy, will now play a pivotal role in transforming corporate dynamics to adapt to new challenges.

The adjustments highlight Google’s commitment to staying competitive while reshaping its operational framework to remain aligned with its long-term vision.

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Zomato introduces Food Rescue feature

“We don’t encourage order cancellation at Zomato, because it leads to a tremendous amount of food wastage,” he said.

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2 months ago

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November 10, 2024

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Zomato has introduced a new feature called Food Rescue to minimise food wastage, announced the food delivery platform CEO Deepinder Goyal on Sunday.

Announcing the new feature on X, Goyal said the decision, to introduce the new feature, was taken to prevent the tremendous amount of food wastage due to order cancellation on the platform.

Committed to minimising food wastage, the Zomato boss said: “We don’t encourage order cancellation at Zomato, because it leads to a tremendous amount of food wastage.”

Goyal said despite having stringent policies, and a no-refund policy for cancellations, more than 4 lakh perfectly good orders get cancelled, for various reasons by customers.

He said the top concern for the online food delivery platform, the restaurant industry, and even the customers who cancel these orders, is to somehow save the food from going to waste.

With the launch of the new feature, Food Rescue, cancelled orders will now pop up for nearby customers, who can grab them at an unbeatable price, in their original untampered packaging, and receive them in just minutes.

According to Zomato, the cancelled order will pop up on the app for customers within a 3 km radius of the delivery partner carrying the order. To ensure freshness, the option to claim will only be available for a few minutes.

The online food delivery platform will not keep any proceeds except the required government taxes and the amount paid by the new customer will be shared with the original customer (if they made payment online) and with the restaurant partner.

Orders containing items sensitive to distances or temperature such as ice creams, shakes, smoothies, and certain perishable items, will not be eligible for Food Rescue.

Restaurant partners will continue to receive compensation for the original cancelled order, plus a portion of the amount paid by the new customer if the order is claimed, the company said. “Most restaurants have opted in for this feature, and can opt of it easily whenever they want, directly from their control panels,” it added.

The delivery partners will be compensated fully for the entire trip, from the initial pickup to the final drop-off at the new customer’s location, it said.

Food Rescue will show up on the customers’ home page automatically if there’s a cancelled order available for them to grab. The Customers have to refresh the home page to check for any newly available orders which need to be rescued.

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Adani, Torrent compete to purchase Gujarat Titans from CVC Capital

The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

Published

5 months ago

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July 19, 2024

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The Adani Group and Torrent Group are currently negotiating a deal with private equity firm CVC Capital Partners to offload a controlling stake in the Indian Premier League franchise Gujarat Titans. According to sources, close to the development, reports say CVC Capital Partners will be looking to sell a majority interest while retaining a minority share in the franchise.

This becomes important because it is aligned with the end of the lock-in period by the Board of Control for Cricket in India (BCCI), which restricts any new teams from selling stakes until February 2025. The three-year-old franchise Gujarat Titans is reportedly worth $1 billion to $1.5 billion. CVC Capital Partners had paid ₹5,625 crore for the franchise in 2021.

A source close to the development pointed out that IPL franchises have attracted many investors’ interest since the league has proved an asset with a good reputation for money-making capabilities and cash flows. This growing interest of investors embodies the financial value and stability that come with the IPL franchises.

Gautam Adani, who owns teams in the Women’s Premier League and UAE-based International League T20, is understood to be one of the serious buyers. In 2023, Adani’s group won the Ahmedabad franchise in the WPL with a bid of Rs1,289 crore, the highest offer. His interests in this potential deal signal his commitment to expanding his footprint in the cricketing world.

Arvinder Singh, COO of Gujarat Titans, exuded confidence in the financial future of the franchise. He said the team was confident of turning profitable in the next media rights cycle, referring to even the original ten IPL franchises that took four to five years to turn profitable. He added confidently that the Gujarat Titans would not only turn profitable but significantly enhance in brand value.
 
This surging interest of investors in it is evidence of the growing financial attractiveness of IPL franchises, driven by healthy revenue streams and an increasing global footprint. The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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