Page 50 - BCML AR 2019-20

Management

discussion and analysis

Global economic overview

The pace of global economic activity result, global growth was 2.9% in 2019,
remained weak in 2019 owing to a the lowest since 2008–09. The world
slowdown in the momentum of the appeared to be perched at the precipice
manufacturing sector coupled with of a recession in 2020 following the
a global financial sluggishness. As a outbreak of the Covid-19 pandemic.

According Review of the Indian economy
to UN, India
emerged as According to estimates of CSO, the Indian the first time since the Monetary Policy
the third most economy grew at an 11- year low of Committee.
4.2% in FY2019-20, compared to 6.8% in
attractive FY2018-19. This reflects muted corporate Despite the slowdown, India was among
investment performance and subdued tax collection. the top 10 recipients of Foreign Direct
destination after Manufacturing growth was seen at 2% Investment (FDI) in 2019, attracting $49
billion in inflows, a 16% increase over the
China and the year-on-year, a 15-year low as against 6.9% previous year. The majority of this FDI
US. The year growth in FY19. went into service industries, including
also witnessed The nominal per capita net national information technology; the country saw
parliamentary income was estimated at C1,34,226 in all-time high private equity investments
elections 2019-20, up 6.09% from C126,521 in at $49 billion in 2019, mainly on account
with NDA 2018-19. The government’s fiscal deficit of the infrastructure sector accounting for
30% of all investments by value in 2019
government widened to 4.6% against the target of 3.8% compared to 12% in 2018.
entering because of declining revenues due to cut
its second in corporate tax rates. Since February 2019, India emerged as the fifth largest world
economy in 2019, overtaking the UK and
the RBI cumulatively cut rates by 135 bps
consecutive five times in a row to 5.15%, the lowest France with a gross domestic product
term. since March 2010. (GDP) of US$2.94 trillion. India jumped 14
places to 63 in the 2020 World Bank’s Ease
A sharp deceleration in economic
growth and surge in inflation weighed of Doing Business ranking.
on the rupee exchange rate with the According to UN, India emerged as
Indian rupee becoming one of the worst the third most attractive investment
performers among Asian peers, marked destination after China and the US.
by a depreciation of nearly 2% since The year also witnessed parliamentary
January 2019. Retail inflation climbed to a elections with the NDA government
six-year high of 7.35% in December 2019, entering its second consecutive term.
breaching the RBI’s upper band of 6% for

48 | Balrampur Chini Mills Limited