Here is my brief look at India.

1. GOVERNMENT AND
ECONOMIC POLICIES – INDIA
BY: PAUL YOUNG, CPA, CGA
DATE: NOVEMBER 24, 2020

2. This presentation will discuss the India economy as well as government policies that will
support economic growth. India is an emerging market that is expected to grow at a pace of
7.6%+ for the next 10+ years.

3. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4, FN2, MU1. and
MS2)
• SME – Risk Management
• SME – Close, Consolidate and
Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Macro/Micro Indicators
• SME – Supply Chain Management
Contact information: paul.young@ca.ibm.com

4. AGENDA

5. GLOBAL FORECAST
http://www.gbm.scotiabank.com/English/bns_econ/
globaloutlook.pdf
The world’s top-20 largest
economies account for 75% of global
GDP (measured
in purchasing power parity terms).
Led by China and India, and to a
lesser extent
Indonesia, the fast-growing Asia-
Pacific nations represent a dominant
47% of the
top-20 group. Brazil and Mexico in
the Americas, and the Russian
Federation and
Turkey in the Euro Asian region also
belong to the core group of
emerging-market
economies, yet growth rates in these
four economies still represent a
fraction of
their Asian counterparts

6. INDIA / GDP

7. CHINA AND INDIA GROWTH
• ACCORDING TO A REPORT BY NCAER, THE INDIAN ECONOMY EXPANDED AT 7.6 PERCENT IN
2015-16 WHILE ON THE OTHER HAND IT ANTICIPATED IMPROVEMENT IN AGRICULTURAL
SECTOR AND ASSOCIATED INCREASE IN RURAL DEMAND TO GIVE AN UPWARD PUSH TO
ECONOMIC GROWTH.
• IT ALSO INDICATED THAT THE DOMESTIC AVIATION SECTOR GROWTH CONTINUES TO BE
ROBUST.
• "FOOD INFLATION IS ALSO SHOWING SIGNS OF DAMPENING IN THE LATTER PART OF THE
SECOND QUARTER. HOWEVER, FUEL INFLATION MAY REVIVE. ALTHOUGH URBAN DEMAND IS
PREDICTED TO REMAIN STRONG, EXTERNAL DEMAND CONTINUES TO BE VOLATILE," ADDS THE
NCAER STATEMENT.
• IT FURTHER SAID THAT INDIA'S FISCAL POSITION REMAINED UNDER STRESS DURING FIRST HALF
OF THE CURRENT FISCAL.
• DESPITE HEALTHY GROWTH IN TAX REVENUES, THE COMBINATION OF RISING EXPENDITURE AND
LOWER-THAN-EXPECTED NON-TAX REVENUES IS LIKELY TO TEST THE GOVERNMENT'S RESOLVE
TO ABIDE BY THE FISCAL DEFICIT TARGET SET OUT IN BUDGET 2016-17, NCAER ADDED.
SOURCE – HTTP://WWW.BUSINESS-STANDARD.COM/ARTICLE/NEWS-ANI/NCAER-INDICATES-
INDIA-S-GDP-GROWTH-AT-7-6-PCT-IN-2016-17-116110600427_1.HTML

8. INDIA / MANUFACTURING SECTOR
Issues:
1. Poor Roads
2. Reliability of Power
3. Skill Labor
4. Access to Credit
5. Land availability
PMI – India - https://www.bloombergquint.com/business/india-manufacturing-pmi-
climbs-to-the-highest-in-over-a-decade

9. INDIA /
RETAIL
SALES

10. RETAIL SALES – ECOMMERCE
• WITH 36 MILLION UNITS IN INDIA UNDER THE MICRO, SMALL AND MEDIUM
ENTERPRISES CATEGORY AS PER GOVERNMENT DATA, THE OPPORTUNITY FOR
DIGITAL PLATFORMS AGGREGATING THEIR REQUIREMENTS IS MASSIVE. INDIA’S B2C
ECOMMERCE SECTOR “IS EXPECTED TO BE SOMEWHERE BETWEEN $100 BILLION AND
$150 BILLION IN FIVE YEARS AND B2B IS LIKELY TO EXCEED THAT,” SAID SUMIT JAIN,
PARTNER AT KALAARI CAPITAL, AN INVESTOR IN INDUSTRY BUYING AND
POWER2SME.
• THIS YEAR SO FAR, DOMESTIC B2B ECOMMERCE COMPANIES HAVE RAISED $79
MILLION FROM INVESTORS, NEAR FIVE-FOLD INCREASE FROM ALL OF LAST YEAR A
VALIDATION OF THE SECTOR’S IMPROVING POTENTIAL. THAT’S STILL A FRACTION
OF THE ESTIMATED $9 BILLION DOMESTIC CONSUMER FACING ONLINE RETAILERS
RAISED IN 2015.

11. INDIA DEBT
Source: https://www.dbs.com or
https://www.bloomberg.com/news/articl
es/2020-10-27/indian-states-rising-
debt-pose-risk-to-their-finances-rbi-
says

12. INDIA / BANKING SECTOR
• India’s state-owned banks need to merge into a half dozen well-capitalized
institutions than can underwrite economic growth, said the head of the new
Banks Board Bureau.
• In addition to the $3.7 billion earmarked in the 2016/17 budget, the
government is ready to inject fresh funds into the banking sector, Vinod Rai,
the veteran bureaucrat appointed this year oversee the sector’s overhaul, told
Reuters.
• Prime Minister Narendra Modi has made restoring the banks to health a major
initiative of his government. Healthy banks will be able to provide the lending
and investment needed to create jobs for the million young Indians who join
the labor market each month.
• However, the state banks hold most of India’s $120 billion in troubled loans.
Yet, they also control about 70% of all lending in Asia’s third largest
economy, according to Reuters. The government set up the Banks Board
Bureau in April to drive balance sheet improvement and consolidate the
sector.

13. INDIA / TAXATION

14. INDIA / OECD – TAX AVOIDANCE
• Indian transfer pricing regulations have been heavily affected by the changing global tax and transfer
pricing environment prompted by the OECD's BEPS Project.
• India has been one of the strongest supporters of the BEPS project, quickly adopting many BEPS
measures despite not being an OECD member country. India adopted BEPS Action 13 to introduce the
master file, local file and country-by-country reporting (CbCR) into its local legislation from April 1
2016. It further signed the multilateral competent authority agreement for the automatic exchange
of CbCR.
• "There is heightened early-stage anxiety on the part of companies that will be required to comply
with CbCR, as the extensive nature of reporting and the implications from a BEPS-risk assessment
standpoint has dawned on them," said Gokul Chaudhri, head of direct tax at BMR Advisors, Taxand
India.
http://www.worldtransferpricing.com/India/

15. INDIA TRADE
• RECENTLY-RELEASED DATA RELATED TO INDIA’S EXTERNAL SECTOR SHOWED THAT THE TRADE DEFICIT
TOTALED USD 8.3 BILLION IN SEPTEMBER, WHICH WAS A SMALLER SHORTFALL THAN THE USD 10.2 BILLION
GAP RECORDED IN SEPTEMBER 2015 (AUGUST 2016: USD 7.7 BILLION DEFICIT). THE ROLLING 12-MONTH
TRADE DEFICIT NARROWED FROM USD 95.4 BILLION IN AUGUST TO USD 93.5 BILLION IN SEPTEMBER, WHICH IS
THE SMALLEST ACCUMULATED SHORTFALL SINCE DECEMBER 2009.
• THE IMPROVEMENT IN TRADE DATA CAME ON THE BACK OF A PICK-UP IN EXPORT GROWTH AND A SLIGHT
CONTRACTION IN IMPORTS. IMPORTS TOTALED USD 31.2 BILLION IN SEPTEMBER, WHICH REPRESENTED A 2.5%
FALL FROM THE SAME MONTH LAST YEAR (AUGUST 2016: -13.5% YEAR-ON-YEAR; SEPTEMBER 2015: -26.1%
YOY).
• MEANWHILE, EXPORT GROWTH PICKED UP STEAM, RISING FROM AUGUST’S 1.2% OVER THE SAME MONTH LAST
YEAR TO 4.6% (SEPTEMBER 2015: -24.2% YOY). INDIA’S SHIPMENTS ABROAD TOTALED USD 31.2 BILLION,
WHICH REPRESENTED AN OVER ONE-YEAR HIGH.
• SOURCE - HTTPS://WWW.FOCUS-ECONOMICS.COM/COUNTRY-INDICATOR/INDIA/TRADE-BALANCE

16. INDIA / FDI
SOURCE - HTTP://ECONOMICTIMES.INDIATIMES.COM/NEWS/ECONOMY/FINANCE/FDI-IN-INDIA-RISES-30-PER-CENT-TO-21-6-BILLION-IN-APRIL-SEP/ARTICLESHOW/55271609.CMS OR
HTTPS://ECONOMICTIMES.INDIATIMES.COM/NEWS/ECONOMY/FINANCE/INDIA-CAN-ATTRACT-120-160-BILLION-FDI-ANNUALLY-BY-2025-CII-EY-REPORT/ARTICLESHOW/79372992.CMS

17. CANADA AND INDIA TRADE
• CANADA AND INDIA NEED TO COMPLETE FIPA AND TRADE AGREEMENT
• ACCESSING THE INDIA MARKET WHICH IS GROWING AT 7.6%+ IS VERY IMPORTANT FOR
CANADIAN BUSINESS LIKE FORESTRY, FOOD PROCESSING, OIL AND GAS, METALS, ETC.
SOURCE - HTTP://WWW.PRODUCER.COM/2016/10/CANADA-NEEDS-TRADE-DEALS-
WITH-INDIA-CHINA/ OR HTTPS://NEWS.GOV.BC.CA/RELEASES/2016FIN0045-002049
OR HTTPS://WWW2.SLIDESHARE.NET/PAULYOUNGCGA/2019-ELECTION-FOREIGN-
TRADE-AND-RELATIONS-CANADA-AND-INDIA-JULY-2019

18. OTHER SOURCES