On Tuesday the government released new GDP data for the three months to June. And while the figures meet most estimates, they’re also the lowest in six quarters. The country’s economy expanded 7.7% in the first quarter. In the previous quarter it grew 7.8%. Since the latest numbers don’t show a steep fall, they may nudge the Reserve Bank towards more rate hikes next month. But all is not what it seems. India’s economy achieved the 7.7% in the figure in the first quarter only because growth in last year’s base quarter was revised downwards.
Moving to corporate, Anil Ambani’s firm Reliance Capital plans to drastically expand its partnership with Nippon Life Insurance. The two companies have signed an agreement to work together in financial services businesses. In a statement, they said Nippon Life would evaluate opportunities including strategic partnerships in all of RCaps financial operations. Back in March, Nippon Life had bought a maximum-allowed 26% stake in RCap’s subsidiary, Reliance Life Insurance.
The government could soon simplify they way it allocates money during the budget every year. A panel led by C. Rangarajan, the Prime Minister’s chief economic advisor has proposed the government maintain just one category of spending. It has recommended an end to the division of Plan and non-Plan expenditure. The panel says the move will allow for planning over several years and for budgeting based on outcomes. Plan expenditure usually makes up nearly a third of all spending. It goes into productive assets while non-Plan expenditures goes into things like subsidies and interest payments.
The Unique Identity Authority has government approval to gather biometric data from citizens. On Thursday home minister P. Chidambaram said a cabinet committee had allowed it collect data until the National Population Registry gets started.
Factory output has slowed down to its lowest in two years. The HSBC Markit Purchasing Managers Index for August was at just 52.6. In July it was at 53.6.