{"id":125020,"date":"2021-08-10T19:43:01","date_gmt":"2021-08-10T14:13:01","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=125020"},"modified":"2021-08-12T14:13:22","modified_gmt":"2021-08-12T08:43:22","slug":"the-foreign-stimulus","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-foreign-stimulus\/","title":{"rendered":"The foreign stimulus"},"content":{"rendered":"<p><b>Source<\/b><span style=\"font-weight: 400;\">: <a href=\"https:\/\/www.business-standard.com\/article\/opinion\/the-foreign-stimulus-121080901997_1.html\" target=\"_blank\" rel=\"noopener\">Business Standard\u00a0<\/a><\/span><\/p>\n<h5><b>Synopsis<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<p><span style=\"font-weight: 400;\">Foreign money pouring into the start-up universe may finally provide the stimulus to the economy that the government was unable to provide. This money would help the country to achieve a sustained growth rate of 7% for the coming years.<\/span><\/p>\n<h5><b>Background<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Indian start-up scene is on fire.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">In the first six months of calendar 2021, $10 billion was raised by start-ups and private companies in India.\u00a0<\/span><span style=\"font-weight: 400;\">In July, another $10 billion was raised,<\/span><b> led by the mammoth $3.6 billion by Flipkart, the single largest fundraising by a private company in India.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">At this rate, in 2021, we may see almost $40 billion being pumped into the Indian private company universe by global capital. This surge points to the faith shown by investors in the Indian Economy.<\/span><\/li>\n<\/ul>\n<p><b>Factors pointing towards a robust future growth of the Indian Economy<\/b><span style=\"font-weight: 400;\">:<\/span><\/p>\n<p><b>First<\/b><span style=\"font-weight: 400;\">, <\/span><b>money <\/b><span style=\"font-weight: 400;\">raised by the start-up\/private ecosystem<\/span><span style=\"font-weight: 400;\">\u00a0will be spent to hire people, build infrastructure, strengthen the core tech, accelerate demand and build the brand.<\/span><\/p>\n<p><b>Second<\/b><span style=\"font-weight: 400;\">, experts have predicted <\/span><b>a strong revival of the IT sector.<\/b><span style=\"font-weight: 400;\"> Attrition has rocketed (Cognizant just reported attrition of 31%) and salary hikes are accelerating.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Attrition is defined as the natural process by which employees leave the workforce (through resignation or retirement) and are not immediately replaced.<\/span><\/li>\n<\/ul>\n<p><b>Third<\/b><span style=\"font-weight: 400;\">, there is a<\/span><b> clear trend of higher value-added manufacturing relocating to India.<\/b><span style=\"font-weight: 400;\"> The trend is a result of the Production Linked Incentives schemes, China+1 strategy adopted by most MNC\u2019s or structural industry change.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">It is noticeable particularly in specialty chemicals, API, precision manufacturing in automotive and light engineering, and textiles. As a result, exports will accelerate, after almost five years of no growth.<\/span><\/li>\n<\/ul>\n<p><b>Fourth<\/b><span style=\"font-weight: 400;\">, there is a<\/span><b> clear reversal in the real estate sector<\/b><span style=\"font-weight: 400;\">. Housing demand is strong and pricing is improving. It is only a matter of time before new construction begins to pick up.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">This sector has been under serious stress for almost five years now. A recovery here will be a big multiplier, as it creates low-skill jobs and pulls in demand for cement\/steel, and helps clean up the non-performing asset mess.<\/span><\/li>\n<\/ul>\n<h5><b>Way Forward:<\/b><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India must make sure tha<\/span><b>t it does not shoot itself in the foot and inadvertently take measures to temper foreign enthusiasm<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><span style=\"font-weight: 400;\">The enthusiasm is very high towards India due to the apparent next wave of innovation and a high degree of mistrust over China post the pandemic.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The proposed pricing and valuation of some new issuance in the start-up space seem quite rich. It is inevitable that a few issues will fail and investors, including retail, will lose money.\u00a0<\/span><span style=\"font-weight: 400;\">However, even if some companies fail, we cannot shut the door to IPOs by the start-up ecosystem or raise significant hurdles to list.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">We must also<\/span><b> be careful to guard against the perception of a lack of a level playing field.\u00a0<\/b><span style=\"font-weight: 400;\">Many global investors are continually worried that domestic lobbies can make the operating and regulatory environment difficult for foreign-funded companies. There should be no discriminatory treatment of such companies in order to ensure a continuous flow.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source: Business Standard\u00a0 Synopsis: Foreign money pouring into the start-up universe may finally provide the stimulus to the economy that the government was unable to provide. This money would help the country to achieve a sustained growth rate of 7% for the coming years. Background: The Indian start-up scene is on fire.\u00a0In the first six&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/the-foreign-stimulus\/\">Continue reading <span class=\"screen-reader-text\">The foreign stimulus<\/span><\/a><\/p>\n","protected":false},"author":10322,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[3574,4177,216],"class_list":["post-125020","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-economic-growth","tag-fdi-inflow","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704664277},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/125020","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10322"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=125020"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/125020\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=125020"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=125020"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=125020"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}