Made In India Laptops, Tablets, PCs, Mobiles | India likely to grow 13.7% next year: Moody's

Описание: Made In India Laptops, Tablets, PCs, Mobiles | India likely to grow 13.7% next year: Moody's
The Indian government approved a Rs 7,350-crore scheme to boost production of laptops, tablets, all-in-one PCs and servers in the country, as it sought to nudge global and domestic players to take advantage of India's manufacturing prowess.
The PLI push is expected to bolster electronics ecosystem in India, at a time when globally manufacturing is undergoing a shift and companies across the world are looking to diversify their manufacturing base, to mitigate the risk involved in depending on a single location.
At the same time, work and study from home during the pandemic has put the PC market in India on a solid growth trajectory.
Production worth Rs 3.26 lakh crore and exports of Rs 2.45 lakh crore are estimated over the next four years under the new scheme, which is expected to create 1.80 lakh jobs.
Briefing reporters after a meeting of the Cabinet, Communications and IT Minister Ravi Shankar Prasad said the Production Linked Incentive (PLI) scheme has been approved for IT hardware products that would cover laptops, tablets, all-in-one PCs and servers.
The Rs 7,350-crore scheme aims to position India as a global hub for hardware manufacturing.
The PLI plan could also prompt US tech giant Apple Inc to assemble some of its iPad tablets in India, say market watchers. While there have been reports of Apple looking at manufacturing opportunities here, the company has not commented on it yet.
Increase in both domestic manufacturing and local value addition will help offset large foreign exchange outgo that India will have to otherwise incur.
At present, the laptop and tablet demand in India is largely met through imports valued at Rs 29,470 crore and at Rs 2,870 crore, respectively.
The PLI scheme is also also expected to contribute significantly to achieving the USD 1 trillion digital economy and USD 5 trillion GDP target by 2025.
India likely to grow 13.7% next year: Moody's
The Indian economy is expected to grow 13.7 per cent in the financial year 2021-22 (FY22), registering a strong rebound from a 7 per cent contraction this fiscal year, said Moody’s on Thursday, adding the country’s fiscal position would remain weak in 2021, posing a key credit challenge.
Moody’s had in November last year projected the economy to contract 10.6 per cent in FY21 and return to growth of 10.8 per cent in FY22.
The upgrade in growth forecast comes on the back of normalisation of activity and growing confidence in the market with the rollout of Covid-19 vaccine.
On fiscal consolidation, the global rating agency said the prospects remain weak, particularly given the government’s mixed track record of implementing revenue-raising measures.
Meanwhile, ICRA, Moody's Indian affiliate, said it expects a considerable rebound in India's economic growth in FY22 on the back of higher central government spending, and a pick-up, albeit uneven, in consumption.
Overall, ICRA projects real GDP to grow 10.5 per cent in FY22 and nominal GDP to expand 14.5 per cent as the pandemic recedes.
Moody's said the central government's fiscal deficit for FY21 and FY22 should be lower than projected. This is on the back of stronger revenue generation in the fourth quarter of FY21 and higher nominal GDP growth in FY22.
Referring to fiscal consolidation, Moody’s said the government has not provided an explicit medium-term fiscal consolidation road map. But, according to the Budget (for 2021-22) it targets a fiscal deficit of 4.5 per cent of GDP by FY26. This amounts to an average annual deficit reduction of about 0.5 per cent of GDP over four years.
The rating agency said given India's very high debt burden, this gradual pace of consolidation will prevent material strengthening in the government's fiscal position over the medium term. The scenario could be different if nominal GDP growth picks up sustainably to reach much higher rates than historically recorded.
An economic recovery in underway in India, but the consumption recovery remains uneven.
ICRA said the recent economic data signals a broadening of the economic rebound in the third quarter. The most-tracked indicators in Q3FY21 showed improvements from the year-ago period. Data for the current quarter also suggests a stable economic momentum.
Meanwhile, near-term prospects for the agricultural sector are bright, in ICRA's assessment, with many regions recording healthy precipitation and reservoir levels, increasing acreage of rabi crops and healthy procurement trends.

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