Rating agency predicts strong growth in Indian economy
A leading rating agency has raised its growth forecast for the Indian economy, based on stronger domestic demand and increased business confidence.
Fitch expects the Indian economy to continue its strong expansion, with real GDP forecast to increase by 7% for fiscal 2025, which starts in April 2024. This represents a 50 basis points increase from its December forecast, it said in its latest report.
India’s economy grew 8.4% in the final three months of 2023, the fastest pace in 18 months, led by strong manufacturing and construction sectors.
“With GDP growth having exceeded 8% for three consecutive quarters, we expect an easing in growth momentum in the final quarter of the current fiscal year, implying an estimate of 7.8% for growth in FY23/24,” Fitch said.
The rating agency’s forecast for fiscal 2024, which ends this month, is above the Indian government’s revised estimate of 7.6%.
Fitch’s report added: “Domestic demand, especially investment, will be the main driver of growth, amid sustained levels of business and consumer confidence.
“Our forecasts imply that growth in the short term will outpace the economy’s estimated potential, and that the pace of growth of activity will then moderate towards trend in FY25.”
Fitch said it expects retail inflation to steadily slow to 4% by the end of 2024, assuming that recent food price volatility will subside.
It now expects India’s central bank, Reserve Bank of India, to cut interest rates in the second half of the calendar year, lowering its estimate to 50 basis points of rate cuts, from 75 basis points in December, due to the stronger growth outlook.
UK toughens up regs for Indian nationals
The UK has introduced major changes to its visa regulations which will have big implications for Indian nationals working or wanting to work in the country.
The government in Westminster said the changes are vital to prevent the exploitation of workers in the care sector, who have been offered visas under false pretences, often for non-existent jobs or wages below the minimum required.
The UK government said that “care workers will now be restricted from bringing dependants, after a disproportionate 120,000 dependants accompanied 100,000 workers on the route last year.
It added: “Care providers in England acting as sponsors for migrants will also be required to register with the Care Quality Commission (CQC) – the industry regulator for Health and Social Care – in order to crack down on worker exploitation and abuse within the sector.”
The new rules include restrictions on postgraduate research students from bringing dependents to the UK, a much higher salary threshold for foreign workers to access skilled visas, and raising the minimum income for family visas.
From 4 April, the minimum salary required for those arriving on the Skilled Worker visa will increase from £26,200 to £38,700 (about Rs 41,000,000) – a 48% increase.
The minimum income requirement for family visas will also rise, starting at £29,000 from 11 April. By early 2025 this will be increased to £38,700, helping to ensure dependants brought to the UK are supported financially.
Indian nationals represent the largest group of students granted leave in the post-study graduate visa route and also have the second-highest number of dependents in the UK. These rules will also impact Indians, as medics on health and care visas will no longer be able to bring any family members into the UK.
A review of the Graduate Route for international students has been commissioned to ensure its effectiveness, with Indian nationals representing the largest group benefiting from this visa.
The UK government’s Minister for Social Care, Helen Whately MP, said: “International care workers make an invaluable contribution caring for our loved ones, but international recruitment and more immigration are not long-term solutions to our social care needs. These rules provide a more ethical and sustainable approach.
“We are boosting our homegrown workforce by reforming social care careers. These include the first ever national career path for care workers and a new care qualification.
“Our reforms will grow the domestic workforce and build on our success over the last year that saw more people working in social care, fewer vacancies and lower staff turnover.”