Current Affairs - Economy

The Cabinet has approved a 3% increase in ethanol procurement prices for public sector Oil Marketing Companies (OMCs), effective from November 1, 2024, under the Ethanol Blended Petrol (EBP) Programme. This revision raises the price of ethanol derived from C Heavy Molasses from ₹56.58 to ₹57.97 per litre. The move is aimed at enhancing ethanol supply, supporting India’s ethanol blending targets, and providing economic benefits to ethanol producers and sugarcane farmers while also contributing to environmental sustainability.

India’s share of global consumption is expected to increase from 9% in 2023 to 16% by 2050, making it the second-largest contributor after North America, which stands at 17%. This growth is attributed to India’s youthful and expanding population, coupled with rising incomes. Meanwhile, advanced economies are seeing declining fertility rates, shifting global demographic attention to regions like India.

India has emerged as the seventh-largest coffee producer globally, showcasing significant growth in the sector. In the last financial year, India’s coffee exports reached 1.29 billion dollars, nearly doubling from 719 million dollars in 2020-21. Karnataka leads in coffee production, followed by Kerala and Tamil Nadu, which are key contributors to this achievement. This growth highlights India's increasing importance in the global coffee industry and the country’s capability to expand its presence in international markets.

Moody’s has revised India’s GDP growth forecast for FY25 to 7%, a decrease from the 8.2% growth observed in the previous fiscal year. This revision reflects a combination of global and domestic economic slowdowns, including weaker-than-expected performance in key sectors. Despite this forecast, India’s GDP per capita at purchasing power parity increased by 11% year-on-year, indicating a positive trend in the standard of living. The revision aligns with similar adjustments made by other organizations like FICCI and the Asian Development Bank.

The International Monetary Fund (IMF) has reduced India’s FY25 growth forecast to 6.5%, citing challenges like an industrial slowdown. This adjustment aligns with similar revisions by the Reserve Bank of India (RBI) and the Statistics Ministry, which estimate a slightly higher growth of 6.6%. Factors such as a depreciating rupee have impacted inflation and export competitiveness. Globally, economic growth for 2025-26 is projected at a moderate 3.3%, reflecting widespread challenges in maintaining robust growth rates.