Current Affairs - Economy

The Indian government has retained the interest rate on Employees' Provident Fund (EPF) deposits at 8.25% for FY2024-25, as approved by the Ministry of Finance following the Central Board of Trustees’ recommendation. This rate matches the previous year’s rate, ensuring steady returns for over 7 crore EPFO subscribers. EPF is a mandatory retirement savings scheme where both employee and employer contribute 12% of the basic salary. Maintaining this attractive interest rate supports financial security for salaried employees and sustains confidence in EPF as a reliable long-term investment.

Fitch Ratings has raised India's medium-term GDP growth outlook to 6.4% till FY2026, up from its earlier estimate of 6.2%. This upward revision is primarily attributed to an increase in labour force participation, reflecting structural improvements in India’s employment landscape. The update sets India apart from many other emerging markets, whose growth forecasts have been revised downward. While some concerns remain regarding slower labour productivity growth, Fitch believes India’s Total Factor Productivity will stabilize at 1.5%. The revision underscores India's post-pandemic resilience and positions it as a strong performer in the global economic landscape.

Morgan Stanley has updated its GDP growth projection for India for the fiscal year 2026 to 6.2%, an adjustment from its earlier forecast of 6.3%. This revision reflects optimism fueled by robust domestic demand, supportive policy measures, and a more favourable global trade environment due to easing tensions between the US and China. These factors are expected to improve external demand for Indian exports. Additionally, the Reserve Bank of India is anticipated to maintain a growth-supportive stance by implementing further monetary easing, with two projected rate cuts of 25 basis points each. These combined elements underpin the improved outlook.

India is expected to become the largest producer of potatoes globally by 2050, according to experts from the International Potato Centre (CIP). Currently producing about 60 million tonnes annually, India’s potato output is projected to increase to 100 million tonnes by 2050. This growth is driven by scientific innovations, strategic partnerships, government agricultural reforms, and sustained investments in research and food security. Potatoes and other tuber crops play a vital role in climate resilience, nutrition, and rural development, making India’s rise in potato production significant for its economic and social progress.

The proposed legislation introduced in the US Congress suggests a 5% excise tax on all international remittances made by non-citizens, including H-1B and F-1 visa holders. This provision, outlined in Section 112105 of the bill titled “The One Big Beautiful Bill,” would primarily impact immigrant communities such as the Indian diaspora, which remitted over $23 billion to India in 2023 alone. The tax aims to generate revenue by applying a $50 charge for every $1,000 transferred abroad. The measure has sparked concerns over economic fairness, the risk of increased use of informal transfer channels, and potential burdens on immigrant workers and their families.