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Development Watch – Week #4 July ’23

Development News

Growth forecast raised to 6.1%

The International Monetary Fund (IMF) has raised India’s growth forecast for FY ’24 in it’s July update of the World Economic Outlook (WEO). This is based on strong domestic investment. The IMF has also cautioned that the global economy is not “out of the woods” yet. The world’s battle against inflation is far from over. IMF is a multilateral lender. It foresees growth in India at 6.1% in 2023. This is a 0.2 percentage point upward revision compared with April projections. That reflects momentum from stronger than expected growth in 4th quarter of 2022, mainly as a result of domestic investment.

Mixed results in India’s exports

India’s engineering exports to major markets like the US, EU and China, continued to decline in June 2023. This reflects a challenging global trade environment, as per Engineering Exports Promotion Council of India (EEPC). India’s shipments to West Asia and North Africa (WANA), NE Asia, and CIS countries, however, showed positive trend during this period. India’s engineering exports declined for 3rd straight month in June 2023. This indicates a fall of 11% YoY to USD 8.53 billion. But there has been a 3-fold increase in engineering exports to Russia touched $116.9 million in June 2023. Global demand has weakened in the metal sector, particularly steel. This in part is owed to China’s construction sector. Engineering products such as iron and steel, non-ferrous products, industrial machinery and parts, 2 & 3 wheelers, auto component parts, tyres, railway transport and hand tolls saw declines in exports during June 2023 in comparison to last year.

High demand for flexible office spaces

India has emerged one of the fastest-growing flexible office space markets across the world. There is rising demand for managed space solutions from both large enterprises and agile startups. This is a common trend across geographies especially after the Covid19 pandemic. The operational flexible office stock across top 7 cities of India touched over 53 million sq ft with nearly 75% growth from pre-pandemic level of around 30.3 million sq ft.

Sale of affordable homes see a decline

Sales in affordable housing category, below Rs. 40 lakhs, has declined 18% to 46,650 units in the first half of 2023. This is mainly due to lower supplies and a rise in mortgage rates, as per Anarock. In the previous year, sales of affordable homes stood at 57,060 units. Share of affordable housing overall fell to 20% from 31% last year. In the broader market however, total housing sales increased by almost 20% from 1.84 lakh units to 2.28 lakhs units.

In a related development, Adani Enterprises is planning to rehabilitate 700,000 dwellers in Dharavi, Asia’s largest slum. Rehabilitation of livelihoods would also involve a combination of training centers focused on upskilling, common facility centres for product-based and service based entrepreneurship models, R&D centres, data centres and MSME helpdesks, among other things. The project could also include the creation of organized and systemic marketplaces in line with Open Network for Digital Commerce (ONDC). Amenities like gas, water, electricity, sanitation, healthcare and recreational facilities, open spaces, world-class hospitals and a school. There are numerous existing industries like leather, pottery, textiles.

Post-flood discounted accommodation in HP

Himachal Pradesh Tourism Development Corporation (HTDPC) announced 50% discount on hotel room rents. The announcement comes days after the state government evacuated more than 70,000 stranded tourists after landslides and flash floods. Discounts in HTDPC hotels will be effective till 15 September. Presently the tourist occupancy is almost nil after heavy rains that occurred between 7-14 July. The situation is improving fast and roads are being opened.

Growing transactions in ONDC

Open Network for Digital Commerce (ONDC) has witnessed an increase in transactions. The volume of orders for brands which have joined ONDC has also grown. These findings are as per studies done by ICICI. Most companies were initially testing the waters of ONDC. Growth in the order volume as well as improvements in the service level has been observed recently. Hence, more and more number of both suppliers and brands are adopting the service.

Schengen information System

Schengen information system is the most widely used and the largest information sharing system for security and border management in Europe. SIS compensates for border controls. Apart from the EU countries, SIS is also operational in Switzerland, Norway, Liechtenstein, Iceland and Cyprus. It is also the most successful cooperation tool for border, immigration, police, customs and judicial authorities in the EU. 2nd Generation of SIS was rolled out in 2013.

It has additional functionalities like adding fingerprints, palm prints, DNA records, and photographs. It also helps in sharing information on counter-terrorism. Other organizations which use SIS are the National Police, the Public Prosecutor’s Office, Border Surveillance Organizations, and Immigration Authorities. SIS is also helpful in Visa issuance process, asylum applications and enabling border control collaboration.

Navi Mumbai airport to be operational next year

Navi Mumbai airport may become operational by 2024. Planes will be able to take off by August next year. Navi Mumbai will start functioning from August next year.

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