Fitch sees momentum tapering off:
Fitch Ratings is expecting India's growth to slow down to 6.5% over 2023-2026 after an initial strong recovery.
According to the agency, muted demand and supply-side constraints are still prevalent. Limited fiscal support from the government has also hampered India's growth potential.
Fitch believes that the financial sector's bad asset woes will also continue to undermine the efforts of a bounce back for India’s economy.
The economy is feared to slow down after a swift recovery from the lows. We have already seen the signs of it. The industrial production contracted by -1.9% in November while services PMI also fell down.
As the pent-up demand is waning off, the government is facing a challenge to sustain economic activity. For that, the government needs to put money in the hands of people. And, only the budget with strong fiscal stimulus can help in achieving that in our opinion.
Infosys' hiring plans:
India’s second-largest IT service provider Infosys is looking at double-digit growth in FY22. The company is also expanding its hiring activities. It has given an estimate of hiring up to 24,000 freshers in the next fiscal.
The company has won a record amount of large deals and sees positive momentum building up over the next couple of years. As a reason, Infosys has ramped up its fresher hiring plans from 15,000 currently.
Before Infosys, even TCS had expressed a similar positivity. It has announced the hiring of 40,000 freshers in FY22. It has also expected to hire the same number of freshers in FY23 as well.
The recruitment drive reflects upon the strong project pipeline these companies have. The ambitious plans of the top two IT companies have further strengthened the bullish outlook on the sector.
Is the EV market slipping away for Domestic players? :
MG Motor India is in line to launch their next electric vehicle in India next year. The company is estimating this new vehicle to cost around Rs 20 lakh, cheaper than their current EV offering.
The company is currently working on a battery assembly facility with an investment of ~ Rs 4,000 crore. The plant is likely to begin its operations by 2022.
MG Motors' new EV plans have come immediately after Tesla's entry in India. MG Motors' estimated EV price at ~20 lakh is way below Tesla's (Expected in the range of 55-60 lakh). MG’s current EV car MG ZS EV is also priced in the range of 19-21 lakhs.
The worrisome factor here is the absence of domestic manufacturers from this race. Although not expected to see increased adoption in the immediate future, EVs are expected to be the future of transport.
Indian automakers are lagging far behind in terms of developing EV infrastructure. And, we are afraid, they are at risk of losing India’s auto sector future to these foreign entities.
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