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INTRODUCTION AND OVERVIEW

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

? Indias nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 232.15 trillion (US$ 3.12 trillion) in FY22.

? India is the third-largest unicorn base in the world with over 100 unicorns with a total valuation of US$ 332.7 billion.

? India needs to increase its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030s, for productivity and economic growth according to McKinsey Global Institute. The net employment rate needs to grow by 1.5% per year from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030.

? According to data from the Department of Economic Affairs, as of January 28, 2022, foreign exchange reserves in India reached the US$ 634.287 billion mark.

RECENT ECONOMIC DEVELOPMENTS IN INDIA ARE AS FOLLOWS:

? With an improvement in the economic scenario, there have been investments across various sectors of the economy. The private equity - venture capital (PE-VC) sector recorded investments worth US$ 5.8 billion across 117 deals in February 2022, 24% higher than in January 2022. Some of the important recent developments in the Indian economy are as follows:

? Indias merchandise exports were at an all-time high of US$ 417.81 billion in FY22. In April 2022, the Manufacturing Purchasing Managers Index (PMI) in India stood at 54.7.

? The gross Goods and Services Tax (GST) revenue collection hit an all-time high of Rs. 1.68 trillion (US$ 21.73 billion) in April 2022. This is a 20% increase over the previous year.

? According to the Department for Promotion of Industry and Internal Trade (DPIIT), FDI equity inflow in India stood at US$ 572.80 billion between April 2000-December 2021.

? Indias Index of Industrial Production (IIP) for January 2022 stood at 138.4 against 136.6 for January 2021.

? Consumer Food Price Index (CFPI) Combined inflation was 2.9% in 2021-22 (April-December) against 9.1% in the corresponding period last year.

? Consumer Price Index (CPI) Combined inflation was 5.20% in 2021-2022 (April-December) against 6.6% in 2020-21

? Foreign portfolio investors (FPIs) invested Rs.50,009 crore (US$ 6.68 billion) in the Calendar year 2021.

? The wheat procurement in Rabi 2021-22 and the anticipated paddy purchase in Kharif 2021-22 would include 1208 lakh (120.8 million) metric tonnes of wheat and paddy from 163 lakh (16.7 million) farmers, as well as a direct payment of MSP value of Rs. 2.37 lakh crore (US$ 31.74 billion) to their accounts.

THE GOVERNMENT OF INDIA HAS TAKEN SEVERAL INITIATIVES TO IMPROVE THE ECONOMIC CONDITION OF THE COUNTRY. SOME OF THESE ARE:

? As of April 2022, India signed 13 Free Trade Agreements (FTAs) with its trading partners including major trade agreements like the India-UAE Comprehensive Partnership Agreement (CEPA) and the India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA). ? The Union Budget of 2022-23 was presented on February 1, 2022, by the Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman. The budget had four priorities PM GatiShakti, Inclusive Development, Productivity Enhancement and Investment and Financing of Investments. In the Union Budget 2022-23, effective

12^th Annual General Meeting capital expenditure is expected to increase by 27% at Rs. 10.68 lakh crore (US$ 142.93 billion) to boost the economy. This will be 4.1% of the total Gross Domestic Production (GDP).

? Under PM GatiShakti Master Plan the National Highway Network will develop 25,000 km of new highways network which will be worth Rs. 20,000 crore (US$ 2.67 billion). In 2022-23. Increased government expenditure is expected to attract private investments, with a production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded, and measured policy support is anticipated to boost the Indian economy.

? In February 2022, Minister for Finance and Corporate Affairs Ms. Nirmala Sitharaman said that productivity linked incentive (PLI) schemes would be extended to 14 sectors to achieve the mission of AtmaNirbhar Bharat and create 60 lakh jobs with an additional production capacity of Rs. 30 lakh crore (US$ 401.49 billion) in the next five years.

? In the Union Budget of 2022-23, the government announced funding for the production linked incentive (PLI) scheme for domestic solar cells and module manufacturing of Rs. 24,000 crore (US$ 3.21 billion).

? In the Union Budget of 2022-23, the government announced a production linked incentive (PLI) scheme for Bulk Drugs which was an investment of Rs. 2500 crore (US$ 334.60 million).

? In the Union Budget of 2022, Minister for Finance & Corporate Affairs Ms. Nirmala Sitharaman announced that a scheme for design-led manufacturing in 5G would be launched as part of the PLI scheme.

? In September 2021, Union Cabinet approved major reforms in the telecom sector, which are expected to boost employment, growth, competition, and consumer interests. Key reforms include rationalization of adjusted gross revenue, rationalization of bank guarantees (BGs), and encouragement of spectrum sharing.

? In the Union Budget of 2022-23, the government has allocated Rs. 44,720 crore (US$ 5.98 billion) to Bharat Sanchar Nigam Limited (BSNL) for capital investments in the 4G spectrum.

? Minister for Finance & Corporate Affairs Ms. Nirmala Sitharaman allocated Rs. 650 crore (US$ 86.69 million) for the Deep Ocean mission that seeks to explore vast marine living and non-living resources. Department of Space (DoS) has got Rs. 13,700 crore (US$ 1.83 billion) in 2022-23 for several key space missions like Gaganyaan, Chandrayaan-3, and Aditya L-1 (sun).

? In May 2021, the government approved the production linked incentive (PLI) scheme for manufacturing advanced chemistry cell (ACC) batteries at an estimated outlay of Rs. 18,100 crore (US$ 2.44 billion); this move is expected to attract domestic and foreign investments worth Rs. 45,000 crore (US$ 6.07 billion).

? Minister for Finance & Corporate Affairs Ms Nirmala Sitharaman announced in the Union Budget of 2022-23 that the Reserve Bank of India (RBI) would issue Digital Rupee using blockchain and other technologies.

? In the Union Budget of 2022-23, Railway got an investment of Rs. 2.38 lakh crore (US$ 31.88 billion) and over 400 new high-speed trains were announced. The concept of "One Station, One Product" was also introduced.

? To boost competitiveness, Budget 2022-23 has announced reforming the 16-year-old Special Economic Zone (SEZ) act. ? In June 2021, the RBI (Reserve Bank of India) announced that the investment limit for FPI (foreign portfolio investors) in the State Development Loans (SDLs) and government securities (G-secs) would persist unaffected at 2% and 6%, respectively, in FY22.

? To boost the overall audit quality and transparency and add value to businesses, in April 2021, the RBI issued a notice on new norms to appoint statutory and central auditors for commercial banks, large urban co-operatives, and large non-banks and housing finance firms.

? In May 2021, the Government of India allocated Rs. 2,250 crore (US$ 306.80 million) for the development of the horticulture sector in 2021-22. ? In November 2020, the Government of India announced Rs. 2.65 lakh crore (US$ 36 billion) stimulus package to generate job opportunities and provide liquidity support to various sectors such as tourism, aviation, construction, and housing. Also, Indias cabinet approved the production-linked incentives (PLI) scheme to provide ~Rs. 2 trillion (US$ 27 billion) over five years to create jobs and boost production in the country.

? Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Prime Minister of India Mr. Narendra Modi launched the Make in India initiative with an aim to boost the countrys manufacturing sector and increase the purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The

12^th Annual General Meeting

Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. Besides, the government has also come up with the Digital India initiative, which focuses on three core components: the creation of digital infrastructure, delivering services digitally, and increasing digital literacy.

? On January 29, 2022, the National Asset Reconstruction Company Ltd (NARCL) will acquire bad loans worth up to Rs. 50,000 crore (US$ 6.69 billion) about 15 accounts by March 31, 2022. India Debt Resolution Co. Ltd (IDRCL) will control the resolution process. This will clean up Indias financial system and help fuel liquidity and boost the Indian economy.

? National Bank for Financing Infrastructure and Development (NaBFID) is a bank that will provide non-recourse infrastructure financing and is expected to support projects from the first quarter of FY2022-23; it is expected to raise Rs. 4 lakh crore (US$ 53.58 billion) in the next three years.

? By November 1, 2021, India and the United Kingdom hope to begin negotiations on a free trade agreement. The proposed FTA between these two countries is likely to unlock business opportunities and generate jobs. Both sides have renewed their commitment to boost trade in a manner that benefits all.

? In August 2021, NITI Aayog and Cisco collaborated to encourage womens entrepreneurship in India.

? In August 2021, Prime Minister Mr. Narendra Modi announced an initiative to start a national mission to reach the US$ 400 billion merchandise export target by FY22.

? In August 2021, Prime Minister Mr. Narendra Modi launched a digital payment solution, e-RUPI, a contactless and cashless instrument for digital payments.

? In June 2021, RBI Governor Mr. Shaktikanta Das announced the policy repo rate unchanged at 4%. He also announced various measures, including Rs. 15,000 crores (US$ 2.05 billion) liquidity support to contact-intensive sectors such as tourism and hospitality.

? In June 2021, Finance Ministers of G-7 countries, including the US, the UK, Japan, Italy, Germany, France and Canada, attained a historic contract on taxing multinational firms as per which the minimum global tax rate would be at least 15%. The move is expected to benefit India by increasing foreign direct investments in the country.

? In June 2021, the Indian government signed a US$ 32 million loan with World Bank for improving healthcare services in Mizoram.

? In May 2021, the Government of India (GoI) and European Investment Bank (EIB) signed the finance contract for the second tranche of EUR 150 million (US$ 182.30 million) for the Pune Metro Rail project.

? According to an official source, as of September 15, 2021, 52 companies have filed applications under the Rs. 5,866 crore (US$ 796.19 million) production-linked incentive scheme for the white goods (air conditioners and LED lights) sector.

? In May 2021, Union Cabinet approved the signing of a memorandum of understanding (MoU) on migration and mobility partnership between the Government of India, the United Kingdom of Great Britain and Northern Ireland.

? In April 2021, Minister for Railways and Commerce & Industry and Consumer Affairs, Food & Public Distribution, Mr. Piyush Goyal, launched the DGFT Trade Facilitation app to provide instant access to exporters/importers anytime and anywhere.

? In April 2021, Dr. Ahmed Abdul Rahman AlBanna, Ambassador of the UAE to India and Founding Patron of IFIICC, stated that trilateral trade between India, the UAE and Israel is expected to reach US$ 110 billion by 2030.

? India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23.

? The Government of India is going to increase public health spending to 2.5% of the GDP by 2025.

ROAD AHEAD

Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution Mr. Piyush Goyal, on January 21, 2022 said that Indian industry to raise 75 unicorns in the 75 weeks leading up to the countrys 75th anniversary next year. Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles Mr. Piyush

Goyal said that India will achieve exports worth US$ 1 trillion by 2030.

Indias electronic exports are expected to reach US$ 300 billion by 2025-26. This will be nearly 40 times the FY2021-22 exports (till December 2021) of US$ 67 billion. As per the data published in a Department of Economic Affairs report, in the first quarter of FY22, Indias output recorded a 20.1% YoY growth, recovering >90% of the pre-pandemic output in the first quarter of FY20. Indias real gross value added (GVA) also recorded an 18.8% YoY increase in the first quarter of FY22, posting a recovery of >92% of its corresponding pre-pandemic level (in the first quarter of FY20). Also, in FY21, India recorded a current account surplus of 0.9% of the GDP. The growth in the economic recovery is due to the governments continued efforts to accelerate vaccination coverage among citizens. This also provided an optimistic outlook to further revive industrial activities.

As per RBIs revised estimates for July 2021, the real GDP growth of the country is estimated at 21.4% for the first quarter of FY22. The increase in the tax collection, along with the governments budget support to states, strengthened the overall growth of the Indian economy. India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030. In line with this, in May 2021, India, along with the UK, jointly launched a Roadmap 2030 to collaborate and combat climate change by 2030. India is expected to be the third-largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to a shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report. It is estimated to surpass the USA to become the second-largest economy in terms of purchasing power parity (PPP) by 2040, as per a report by PricewaterhouseCoopers.

(Source: https://www.ibef.org/economy/indian-economy-overview)

INDIAN ECONOMY

Introduction

In FY 2022-23, the World Economic Outlook (WEO) of the International Monetary Fund (IMF) projects India to be the fastest-growing economy at 8.2%, owing to strong growth in economic activity in April. This can be seen in the robust performance of e-way bill generation, ETC toll collection, electricity consumption, PMI manufacturing and PMI services. While inflation is expected to be elevated in FY 2022-23, mitigating action taken by the Government and RBI may reduce its duration. Evidence on consumption patterns further suggests that inflation in India has a lesser impact on low-income strata than on high-income groups. Further, since aggregate demand is recovering only gradually, the risk of sustained high inflation is low. Global economy is still in the process of reversing supply-side disruptions caused by the COVID-19 pandemic and it would have been far more comfortably placed in the absence of the Russia-Ukraine conflict, and the economic sanctions it has led to. A 40 basis points hike in the repo rate by the RBI, an increase in the Cash Reserve Ratio (CRR) requirement for banks, and a 50 basis points increase in the benchmark interest rate by the US Federal Reserve were among the most visible measures that central banks have taken in the beginning of May 2022 to curb inflation.

Indian Economy

In May 2022, the following key frequency indicators highlighted improved performances:

? Private consumption stood at 57.5% of the nominal GDP for FY22, indicating that it is becoming a macro growth driver. ? Rice, wheat, gramme, and maize production are expected to be at record highs. According to the second advance projections of foodgrain production for FY22, overall foodgrains production is expected to reach a record high of 316.1 million tonnes, 2.85% higher than the objective set, thanks to higher output of kharif crops and record acreage under rabi crops.

12^th Annual General Meeting

? The food price inflation (combined for rural and urban) surged to a 17-month high of 8.38% in April 2022 from 7.68% in March 2022.

? In April 2022, the Manufacturing Purchasing Managers Index (PMI) in India stood at 54.7, up from 54 in March

2022.

? PMI Services was at 57.9 in April 2022, as compared to 53.6 in March 2022.

? In April 2022, power demand grew by 11.5% on a YoY basis amid the early onset of summer season and a spurt in commercial and industrial activities.

? In February 2022, the overall IIP (Index of Industrial Production) registered a 1.7% increase. The mining sector showed a growth of 4.5%, the manufacturing sector showed a growth of 0.8% and the electricity sector showed a growth of 4.5% YoY.

? The cumulative growth of IIP for the period April 2021-February 2022 stood at 12.5%, as compared to (-) 11.1% in April 2020-February 2021.

? In March 2022, the eight sectors output index stood at 157.3 based on provisional data, which was an increase of 4.3% YoY compared to March 2021, indicating the resumption of economic activities.

? Traffic handled at major ports stood at 64,960 thousand tonnes in April 2022

. ? In March 2022, freight movement increased by 0.3% compared to the previous year, indicating that the increase in air freight and traffic activity has been maintained.

? Railway freight traffic growth increased by 9.4% YoY in FY22, driven primarily by incremental loading of coal, foodgrains and fertilizers.

? 78.1 million e-way bills were raised during March 2022, which is 13% higher as compared to February 2022.

? In April 2022, the government approved the participation of 61 companies in the PLI scheme for textiles, with a proposed total investment of Rs. 19,077 crore (US$ 2.46 billion), and an expected turnover of Rs. 1.84 lakh crore (US$ 23.74 billion), leading to employment generation for about 2.4 lakh people.

? The gross GST collection in April 2022 rose to Rs. 1.68 lakh crore (US$ 21.91 billion) and this collection has been the highest since implementation of the GST regime.

? In April 2022, UPI transactions were valued at Rs. 9.83 lakh crore (US$ 126.71 billion), as compared to Rs. 9.60 lakh crore (US$ 123.75 billion) in March 2022.

? In May 2022, the Indian basket of crude oil reached US$ 108.27 a barrel, as compared to US$ 102.97 in April 2022.

? In April 2022, Indias merchandise and service exports stood at US$ 67.79 billion (a 38.9% YoY increase) driven by a strong performance from critical sectors such as petroleum products, electronic goods, processed food, coffee, leather products.

? In the second half of February through March 2022 (up to March 13), daily liquidity absorptions under the liquidity adjustment facility (LAF) averaged Rs. 8.4 lakh crore (US$ 111.27 billion), up from Rs 7.4 lakh crore (US$ 98.02 billion) in the second fortnight of January to mid-February 2022.

? As of April 22, 2022, reserve money stood at Rs. 4,002,311 crore (US$ 523.6 billion).

? As of April 22, 2022, currency in circulation (CiC) registered at Rs. 3,209,394 crore (US$ 419.86 billion).

? In May 2022 (until May 27), Foreign Portfolio Investment (FPI) outflows stood at Rs. 35,848 crore (US$ 4.62 billion).

? Rupee strength reached Rs. 77.52/US$ 1, as on May 30, 2022.

? From January-March 2022, India received a total of US$ 22.04 billion in foreign direct investment.

? As of May 20, 2022, foreign exchange reserves in India stood at US$ 597.51 billion.

? Non-food bank credit registered a growth of 9.7% in March 2022 as compared to 4.5% in March 2021. Despite the third wave of COVID-19, overall economic activity remained stable, indicating that India has learned to cope with virus-related restrictions. Several high frequency indicators, such as electricity consumption, PMI manufacturing, exports, and e-way bill creation, reflect this. The economys confidence has been bolstered even more by the rapid pace of immunisation. In addition, the Union Budget commitment to asset creation (public infrastructure development) in 2022-23 will re-energise the virtuous cycle of investment and crowd in private investment with huge multiplier effects, boosting inclusive and sustainable growth. Consumption will rise up once the uncertainty and worry caused by the COVID-19 virus has passed, and the demand rebound will allow the private sector to step in with investments to boost production to satisfy the rising demand. This scenario should play out for the Indian economy in 2022-23, barring geopolitical and economic surprises. Between April-October 2021, the central government finances registered improved performances. In the review period, the corporation tax recorded 91.6% YoY growth. Between April-October 2021, custom revenue collection registered 122.3% YoY growth, and the IGST collection to the Centre increased by 40% YoY, primarily due to the recovery of economic activities. Net collections of direct taxes in FY 2021-22 (until March 16, 2022), stood at Rs. 13.63 trillion (US$ 175.83 billion), compared to Rs. 9.18 trillion (US$ 118.42 billion) in FY 2020-21.

Note: Conversion rate used for May 2022 (as on 30th May, 2022) is Rs. 1 = US$ 0.013

(Source: https://www.ibef.org/economy/monthly-economic-report)

Indias Economic Performance in 2020-21

Ms. Nirmala Sitharaman, Union Minister for Finance presented the Economic Survey 2021-22 in the Parliament on January 31, 2022. The key highlights of the Economic Survey 2021-22 are as follows:

Widespread Vaccine Coverage

? Vaccination has had a crucial role in reducing the number of deaths, restoring confidence in the economy, and decreasing the effects of the second wave on Indias economy.

? On the 16th of January 2022, India completed one year of its COVID-19 vaccination effort, administering more than 1.56 billion doses of vaccine. ? There are almost 880 million people in India (93% of the adult population) who have received the first dose and 660 million people (70% of the adult population) who are fully vaccinated. ? Between May 2021 and January 2021, the daily vaccination rate on average has grown fourfold from 1.93 million to 7.54 million.

SECTOR REFORMS

? Instead of relying on demand management, India has been concentrating on reforms on the supply-side, such as:

o Deregulation of numerous sectors o Simplification of processes o Removal of legacy issues like ‘retrospective tax o Privatisation

? These are a few of the major reforms in different sectors:

o Over a four-year period from 2021-22 to 2024-25, the Central Governments key assets have a total monetisation potential of Rs. 6 lakh crore (US$ 80.39 billion). o Setting up of Production Linked Incentive (PLI) schemes for 13 sectors including Automobile, Telecom and pharmaceuticals drugs.

o Increasing private sector engagement in conventional satellite communication and remote sensing industries by liberalising them. o The automatic route increased FDI in the defence sector by 74%, while the government route increased it by 100%. o Deposit insurance has been enhanced per depositor per bank from Rs. 1 lakh (US$ 1339.30) to Rs. 5 lakh (US$ 6696.51). As a result, 98.1 % accounts were completely secured by the end of March 2021, and 50.9 % deposits were guaranteed.

CURRENT STATE OF THE ECONOMY

? Following a contraction of 7.3% in 2020-21, the Indian economy is expected to grow by 9.2% in real terms in

2021-22 (according to initial advanced projections).

? GDP is expected to grow in real terms by 8-8.5% in 2022-23.

? The coming year is expected to see an increase in private sector investment with the financial system in strong shape to support the countrys economic recovery.

? The projection is equivalent to the World Banks and Asian Development Banks recent predictions of 8.7% and 7.5% real GDP growth for 2022-23, respectively.

? According to the IMFs latest World Economic Outlook projections, Indias real GDP will grow at 9% in 2021-22 and 2022-23, and 7.1% in 2023-2024, making it the worlds fastest growing major economy for all three years.

? In 2021-22, agriculture and allied industries are predicted to grow by 3.9%, industry by 11.8%, and services by 8.2%

. ? In 2021-22, demand for consumption is expected to increase by 7.0%, Gross Fixed Capital Formation (GFCF) by 15%, exports by 16.5%, and imports by 29.4%.

? Indicators of macroeconomic stability imply that the Indian economy is well positioned to meet the challenges of 2022-23.

? In 2022-23, a combination of large foreign exchange reserves, continued foreign direct investment, and expanding export revenues will provide an effective cushion against a potential global liquidity withdrawal.

? The "second waves" economic effect was significantly less than the full lockdown in 2020-21, but the health consequences were far more severe.

? The Indian governments unique reaction included safety-nets to soften the impact on vulnerable sectors of society and the business sector, a major increase in capital investment to promote growth, and supply-side reforms to ensure long-term expansion.

? In a climate of severe unpredictability, the governments flexible and multi-layered reaction is based in part of an "Agile" framework that employs feedback loops and the usage of 80 High Frequency Indicators (HFIs). ? In 2021-22, agriculture and allied industries are predicted to grow by 3.9%, industry by 11.8%, and services by 8.2%.

FISCAL DEVELOPMENTS

? From April to November 2021, the Central Governments revenue receipts increased by 67.2% (YoY), compared to a 9.6% increase predicted in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals). ? In terms of YoY growth, gross tax revenue increased by more than 50% from April to November 2021. This is also a strong performance when compared to pre-pandemic levels in 2019-2020.

? Capex increased by 13.5% (YoY) from April to November 2021, with a heavy focus on infrastructure-intensive sectors.

? Continued tax collection and a targeted expenditure approach has helped to keep the budget deficit for April to November 2021 at 46.2% of BE. ? The Central Government debt has increased from 49.1% of GDP in 2019-20 to 59.3% of GDP in 2020-21 as an outcome of increased borrowings for COVID-19, but it is expected to decline as the economy recovers.

EXTERNAL SECTORS

? After China, Japan, and Switzerland, India was the worlds fourth largest FX reserve holding as of the end of November 2021.

? In the first half of 2021-22, foreign exchange reserves surpassed US$ 600 billion, reaching US$ 633.6 billion as of December 31, 2021.

? Despite dismal tourism income, there was a large increase in net services, with both receipts and payments surpassing pre-pandemic levels.

? During the current fiscal year, Indias merchandise exports and imports rebounded rapidly, surpassing pre-COVID

92 levels.

? Net capital flows increased to US$ 65.6 billion in the first half of 2021-22, owing to ongoing foreign investment inflows, a resurgence in net external commercial borrowings, increased banking capital, and additional special drawing rights (SDR) allocation. ? Indias external debt increased to US$ 593.1 billion at the end of September 2021, up from US$ 556.8 billion in 2020-21, as a result of the IMFs increased Special Drawing Right (SDR) allocation and greater commercial borrowings.

MONETARY MANAGEMENT AND FINANCIAL INTERMEDIATION

? Indian markets outperformed counterparts among key developing market economies from April to December 2021.

? On October 18, 2021, the Sensex and Nifty reached new highs of 61,766 and 18,477, respectively.

? The systems liquidity remained in surplus. ? In 2021-22, the repo rate was maintained at 4%.

? To provide additional liquidity, the RBI implemented several initiatives such as the G-Sec Acquisition Program and Special Long-Term Repo Operations.

? The commercial banking system has handled the economic blow of the epidemic well.

? In 2021-22, YoY bank credit growth increased steadily, from 5.3% in April 2021 to 9.2% on December 31, 2021.

? Scheduled Commercial Banks (SCBs) had a Gross Non-Performing Advances ratio of 6.9% at the end of September 2021, down from 11.2% at the end of 2017-18.

PRICES AND INFLATION

? The average headline CPI-Combined inflation reduced to 5.2% in 2021-22 (April- December) from 6.6% in 2020-21 to 5.2% in 2021-22 (April-December).

? Food inflation eased, resulting in a decrease in retail inflation. ? Food Inflation averaged 2.9% in 2021-22 (April to December), compared to 9.1% the previous year. ? Throughout the year, effective supply-side management kept the prices of most important commodities under control.

? To keep the price of pulses and edible oils from rising too high, proactive measures were implemented. ? The reduction in national excise and subsequent reductions in Value Added Tax by most states helped to bring down the price of gasoline and diesel.

? Wholesale inflation, as measured by the Wholesale Price Index (WPI), increased to 12.5% in 2021-22. (April to December). This has been attributed to: Previous years low base, increase in economic activity, sharp rise in the price of crude oil and other imported commodities on the worldwide market, and high freight costs.

? Difference between CPI-C and WPI Inflation: The difference rose to 9.6% points in May 2020. However, this years disparity reversed, with retail inflation sliding 8.0% points behind wholesale inflation in December 2021.

? This difference can be explained by factors such as: Variations related to the base effect, differences in the scope and coverage of the two indices, price collections, items covered, commodity weights, and the WPI being more sensitive to cost-push inflation driven by imported inputs. ? As the base impact in WPI gradually fades, the disparity between CPI-C and WPI is likely to shrink.

SUSTAINABLE DEVELOPMENT AND CLIMATE CHANGE

? Indias total score on the NITI Aayog SDG India Index and Dashboard improved to 66 in 2020-21 up from 60 in 2019-20 and 57 in 2018-19.

? The number of Front Runners (scores 65-99) increased from 10 states in 2019-20 to 22 in 2020-21.

? In the NITI Aayog North-Eastern Region District SDG Index 2021-22, 64 districts were Front Runners and 39 districts were Performers in North East India.

? India possesses the tenth largest forest area in the world.

? From 2010 to 2020, India placed third in the world in terms of increasing forest acreage.

? Accounting for 2% of the worlds total forest area, the forests covered 24% of Indias total geographical, in 2020.

? The Plastic Waste Management Amendment Rules, 2021, were notified in August 2021, with the goal of eliminating single-use plastic by 2022. ? Notification on Extended Producer Responsibility for plastic packaging was drafted.

? The compliance rate of Grossly Polluting Industries (GPIs) in the Ganga main stem and its tributaries increased from 39% in 2017 to 81% in 2020.

? As a result, wastewater discharge has decreased from 349.13 million litres per day (MLD) in 2017 to 280.20 MLD in 2020.

? As part of the national declaration presented at the 26th Conference of Parties (COP 26) in Glasgow in November 2021, the Prime Minister declared aggressive targets to be met by 2030 to allow for further emissions reductions. ? The need of launching the one-word movement LIFE (Lifestyle for Environment), which promotes thoughtful and purposeful consumption over mindless and destructive consumption, was emphasized.

INDUSTRY AND INFRASTRUCTURE

? During April-November 2021, the Index of Industrial Production (IIP) increased by 17.4% YoY, compared to a contraction of 15.3% in April-November 2020.

? The Indian railways capital spending grew to Rs. 155,181 crores (US$ 20.78 billion) in 2020-21, up from an average yearly of Rs. 45,980 crores (US$ 6.15 billion) between 2009-14, and it is expected to rise to Rs. 215,058 crores (US$ 28.80 billion) in 2021-22, a five-fold increase over the 2014 figure. ? The amount of road construction per day grew by 30.4% in 2020-21, from 28 kms per day in 2019-20 to 36.5 kms per day in 2020-21.

? Despite the pandemic, the net profit to sales ratio of large corporations reached an all-time high of 10.6% in the July-September quarter of 2021-22 (according to RBI Study).

? The introduction of the Production Linked Incentive (PLI) plan, massive infrastructure boosts - both physical and digital, as well as steps to minimise transaction costs and increase ease of doing business all will help to speed up the recovery of the economy. SERVICES

? In the July-September quarter of 2021-22, the GVA of services surpassed the pre-pandemic level; nevertheless, the GVA of contact intensive sectors such as commerce, transportation, and others remained below the pre-pandemic level.

? In 2021-22, the whole service sector GVA is predicted to expand by 8.2%.

? Rail freight crossed its pre-pandemic level between April-December 2021, while air freight and port traffic virtually reached pre-pandemic levels, and domestic air and rail passenger traffic is gradually increasing indicating that the second waves impact was far more subdued than the first waves.

? The service sector received over US$ 16.7 billion in FDI in the first half of 2021-22, accounting for about 54% of total FDI inflows into India.

? Revenue from IT-BPM services reached US$ 194 billion in 2020-21, with 138,000 new people hired during that time.

? The removal of telecom rules in the IT-BPO industry and the opening up of the space sector to private companies are two major government changes.

? In the January-March quarter of 2020-21, services exports surpassed pre-pandemic levels, and in the first half of 2021-22, they climbed by 21.6%, boosted by global demand for software and IT services exports.

? After the United States and China, India has become the worlds third largest start-up ecosystem. From 733 in 2016-17, the number of new recognized start-ups climbed to over 14000 in 2021-22.

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12^th Annual General Meeting

? In 2021, 44 Indian start-ups earned unicorn status, bringing the total number of unicorns to 83, the majority of which will be in the services sector.

SOCIAL INFRASTRUCTURE AND EMPLOYMENT

? As of January 16, 2022, 1.57 billion doses of COVID-19 vaccinations have been provided, with 913.9 million first doses and 660.5 million second doses.

? With the recovery of the economy, employment statistics in the last quarter of 2020-21 returned to pre-pandemic levels.

? According to data from the quarterly Periodic Labour Force Survey (PFLS) up to March 2021, employment in the pandemic-affected urban sector has nearly restored to pre-pandemic levels.

? According to Employees Provident Fund Organisation (EPFO) data, job formalisation continued throughout the second COVID wave, with the negative impact of COVID on work formalisation being substantially smaller than during the first COVID wave.

? The proportion of GDP spent on social services (health, education, and others) by the Centre and States climbed from 6.2% in 2014-15 to 8.6% in 2021-22 (BE).

? According to the National Family Health Survey 5: o The total fertility rate (TFR) decreased from 2.2 in 2015-16 to 2 in 2019-21. o Infant Mortality Rate (IMR), under-five mortality rate, and institutional births all improved in 2019-21 over 2015-16.

? 83 districts have been designated as Har Ghar Jal districts under the Jal Jeevan Mission (JJM).

? Funding for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) has been increased to create a cushion for unorganised labour in rural regions throughout the epidemic.

(Source: https://www.ibef.org/economy/economic-survey-2021-22)

References: Media reports, Press releases, Press Information Bureau (PIB), Joint Plant Committee (JPC)

Human Resource and Industrial Relations

Industrial relations of the company were cordial during the year and continue to remain peaceful at the factory & office at Indore and the corporate office at Mumbai and all the employees are working with the company for a common objective.

Cautionary Statement

Statements in this Management Discussion and Analysis describing your Company‘s objectives, projections, estimates and expectations, may be forward looking statements‘ are within the meaning of the applicable laws and regulations. Actual results might differ substantially or materially from those expressed and implied. Important development that could affect your Company‘s operations include a downtrend in the international market, fall in onsite, offshore rate and significant changes in political and economic environment, environment standards, tax laws, litigations and labour relations.