Issue: 1000
ECONOMY
& FINANCE
For the first time in decades, gold is beating US Treasuries in
central banks’ vaults: For
the first time since the 1990s, central banks, that’s the 'big banks of
countries,' now hold more gold than US government bonds (called Treasuries). Think of it like this: every country keeps a
treasure chest for safety. In it, they store different things, mostly US
dollars, some euros, some government bonds, and a bit of gold. Recently,
they’ve been filling that chest with more gold than US bonds. The European Central Bank’s International Role
of the Euro 2025 report says central banks together hold around 36,000 tonnes
of gold. At today’s prices, that stash is worth over 3.6 trillion dollars, more
than what they hold in US Treasuries.
(Moneycontrol)
Private capex likely to rise 21.5% to Rs 2.67 lakh crore in
FY26: RBI article: Capital
investment by the private sector is likely to rise 21.5 per cent to Rs 2.67
lakh crore in 2025-26 aided by robust macroeconomic fundamentals, and a 100-bps
policy rate cut, according to an RBI article. Despite
global uncertainties, Indian firms entered the 2025-26 fiscal year with
healthier balance sheets, higher cash buffer, improved profitability, and
greater access to diversified funding sources, said the article ’Private
Corporate Investment: Growth in 2024-25 and Outlook for 2025-26’ published in
the Reserve Bank of India’s (RBI’s) August bulletin.
(Moneycontrol)
Modi, Xi agree on need for ‘dragon and elephant’ to come
together amidst Trump tariffs: Attempting to
shake off over five years of mistrust and strained ties following the Galwan
valley clashes, Prime Minister Narendra Modi and Chinese President Xi Jinping
reinforced the need for the two countries to be “good friends” and advance
relations, including trade and investment, based on “mutual trust” amidst
tariff woes unleashed by US President Donald Trump. “The Kailash Mansarovar Yatra has resumed. Direct flights are also
being resumed between the two countries. Our cooperation is linked to the
interests of 2.8 billion people of our two countries,” Modi said during his
bilateral meeting with Xi in Tianjin on Sunday, his first visit to China in
seven years as relations soured after the Galwan confrontation in 2020. In his
speech, Xi pointed out that the world was undergoing transformation and China
and India were two of the most civilizational countries, populous nations and
key members of the Global South.
(Business Line)
Nominal GDP growth hits 3-quarter low; Flat WPI pushes deflator
to 23-quarter low: Even as the real growth rate hit a
five-quarter high in April-June quarter this fiscal, nominal growth rate has
dipped to a three-quarter low. Fiscal deficit could be impacted if it is lower
at an annualised basis. Meanwhile, a dip in inflation impacted the GDP deflator
which is now 0.9 per cent compared to 3.1 per cent in Q4. GDP deflator is at
its lowest in 23 quarters. According to data from the
Statistics Ministry, the nominal GDP growth rate for April-June quarter stood
at a three-quarter low of 8.8 per cent compared to 9.7 per cent in the
corresponding quarter of the last fiscal. Even on a sequential basis, it is
lower than 10.8 per cent in the January-March quarter. Nominal GDP growth rate
takes into account value of goods and services at current price. In absolute
term, value of nominal GDP was over ?86.05 lakh crore in the April-June quarter
of FY26, compared to over ?88 lakh crore in the January-March quarter of FY25
and over ?79 lakh crore in the April-June quarter of FY25. Key fiscal ratios, such as fiscal deficit are measured at nominal GDP.
For the current financial year, fiscal deficit has been pegged at ?15.69 lakh
crore or 4.4 per cent of the estimated GDP value of around ?357 lakh crore for
FY26. The growth rate of nominal GDP has been projected at 10.1 per cent. Any
dip in nominal GDP will impact the fiscal deficit.
(Business Line)
BANKING
& FINANCE
FinMin proposes removing condition of Indian residents holding
key positions in insurance companies for investment: The
Finance Ministry has proposed to erase provisions related to the condition of
Indian residents holding majority of directors and key managerial positions in
insurance companies with foreign investment. Draft for Changes in Indian
Insurance Companies (Foreign Investment) Rules, 2015, is being considered as a
precursor for amending the law of 100 per cent foreign direct investment (FDI).
However, a senior government official told businessline, “Once the draft is
converted into final rules, it will be applicable for existing companies as
well.” As on date, FDI of up to 74 per cent is
permitted in the insurance sector. Finance Minister Nirmala Sitharaman, in her
Budget speech for FY26, proposed 100 per cent FDI for the sector.
(Business Line)
CMS Info Systems to replace 1,000 ATMs for India Post Payments
Bank: "One of the big wins we had was with the
department of post. This was a former customer of AGS, and when they shut down,
the department decided to close their sites and relaunch," said Anush
Raghavan, chief business officer, CMS, in an interaction with ET. "We
helped evacuate the old ATMs, won the contract, and are now deploying 1,000 new
machines across post office locations."
(Economic Times)
Operational creditors trail financial lenders in spurring
insolvency cases: Data reveals a shift in insolvency case
initiations, with operational creditors now trailing financial creditors for
the first time since fiscal 2017, suggesting a growing preference for
out-of-court settlements. While financial creditors initiated slightly more
cases overall, operational creditors dominated resolutions for smaller
defaults, indicating a strategic approach to debt recovery. Cumulatively,
creditors recovered ?3.96 lakh crore in resolved cases.
(Economic Times)
Net ECB inflows rise to $4.6 billion in Apr-Jun 2025, shows RBI
data: The net inflows of foreign resources via External
Commercial Borrowings (ECBs) rose to $4.6 billion in April-June period of the
financial year 2025-26 (Q1FY26) from $ 2.8 billion in the same period previous
year, the Reserve Bank of India data showed. RBI, in its monthly August
bulletin, said the registrations of ECBs moderated in Q1FY26, although inflows
continued to outpace outflows, resulting in positive net inflows. The ECB
registrations slowed to $9.1 billion in Q1FY26, down from $11.1 billion in
Q1FY25. Funds raised through ECBs and initial public offering for capex
purposes were slightly lower than in the previous quarter, it added.
(Business Standard)
BUSINESS
& INDUSTRY
US tariffs: Govt to provide short, medium, long-term support to
industry: The Commerce Department has framed a three-tiered
action plan, focusing on short, medium and long-term measures, to respond to
the fallout of tariff escalation by the US, official sources said. “The
measures focus on providing immediate liquidity and compliance relief to
exporters, including SEZ flexibility, maintaining order levels and employment
in vulnerable sectors, building resilience in supply chains through structural
reforms and leveraging existing trade agreements and new market access
opportunities,” an official source told.
(Business Line)
Govt may bet on MSMEs to power silicon dreams with fresh
incentives: The upcoming $15 billion (around ?1.3 trillion)
second phase of the India Semiconductor Mission (ISM) is expected to carve out
special incentives for micro, small, and medium enterprises (MSMEs),
encouraging them to become suppliers of critical raw materials for global
chipmakers, according to senior government officials. “Our focus now is to help
build homegrown raw material suppliers for semiconductor companies. That will
be one of the focus areas of ISM 2. The overall priority remains on building a
complete ecosystem for semiconductors,” one official said.
(Business Standard)
OMCs cut commercial LPG cylinder prices by ?51.50 from September
1: Oil marketing companies (OMCs) have reduced the
price of 19 kg commercial liquefied petroleum gas (LPG) cylinders by ?51.50,
effective September 1, 2025. In Delhi, the revised price now stands at ?1,580. However,
the prices of 14.2 kg domestic cylinders remain unchanged. This marks the
latest in a series of price cuts in recent months. On August 1, OMCs reduced
LPG cylinder prices by ?33.50, following a cut of ?58.50 on July 1. Earlier,
prices were lowered by about ?24 in June, ?41 in April, and ?7 in February. In
March, however, cylinder prices increased slightly by around ?6.
(Business Standard)
REGULATIONS
& DEVELOPMENT
India Post announces suspension of all US-bound mail bookings
amid regulatory uncertainty: The
Department of Posts, in a statement issued on Sunday, said that it has
suspended the booking of all categories of mail destined for the United States,
including letters, documents, and gift items valued up to $100, citing the
carriers’ inability to transport consignments and the absence of defined
regulatory mechanisms. The decision follows an earlier public notice issued on
August 22, which had allowed the booking of certain low-value postal items
despite a broader suspension. That relaxation has now been withdrawn, bringing
all categories of US-bound mail under suspension.
(Moneycontrol)
PRYMA Aerospace gets DGCA nod for Arjuna drone to aid
agriculture: Drone manufacturer PRYMA Aerospace has received the Directorate General
of Civil Aviation's (DGCA) certification for its Arjuna drone, which will
enable the company to deploy the machine for agriculture-related activities. The
development comes close on the heels of the aviation safety regulator recently
approving the group's Drone School of Excellence as a Remote Pilot Training
Organisation (RPTO) and making it India's first end-to-end pathway for drone
manufacturing, pilot training, and large-scale deployment through Salam Kisan's
nationwide platform, PRYM Group's founder and CEO, Dhanashree Mandhani said.
(Business Standard)
Govt set to roll out 'Adi Vaani', AI translator for tribal
languages: The Tribal Affairs Ministry will soon launch "Adi Vaani",
India's first artificial intelligence (AI)-powered translator for tribal
languages, in a move aimed at preserving the country's rich linguistic
diversity and empowering tribal communities. Developed by IIT Delhi, BITS
Pilani, IIIT Hyderabad and IIIT Nava Raipur, in collaboration with Tribal
Research Institutes (TRIs), the initiative combines advanced AI tools with
community participation to bridge communication gaps and safeguard endangered
tribal languages. The app will be available on the Play Store with an iOS
version coming soon. It will initially support Santali (Odisha), Bhili (Madhya
Pradesh), Mundari (Jharkhand) and Gondi (Chhattisgarh). Languages such as Kui
and Garo will be added in the next phase.
(Business Standard)
TODAY’S CONCEPT
INDIFFERENCE CURVE
v An indifference curve is a
chart that tracks various combinations of two goods or commodities that
consumers can choose. Points along the curve represent combinations that will
leave the consumer equally well off. A consumer is indifferent to changes in a
combination as long as it falls somewhere along the curve.
v Standard indifference curve analysis uses a simple two-dimensional chart. Each axis represents one type of economic good. A consumer will have no preference between any of the combinations of goods represented by points on the curve because the combination of goods on an indifference curve provides the same level of utility to the consumer.
KEY INDICES
RBI KEY RATES:
Repo
Rate: 5.50%
SDF:
5.25%
MSF
/Bank Rate: 5.75%
CRR:
4.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR /
1 USD : 87.8514
INR /
1 GBP : 118.5760
INR /
1 EUR : 102.4728
INR
/100 JPY: 59.7600
EQUITY INDEX
Sensex: 79809.65 (-270.92)
NIFTY: 24426.85 (-74.05)
Bnk NIFTY: 53655.65 (-164.70)
TODAY’S IMPORTANCE
National Nutrition Day: The government of
India has introduced 1st September as the National Nutrition Day to make the
public aware of the paramount significance of proper health and nutrition.
Historical events: On September 1st, the invasion of Poland by Germany in 1939, triggering World War II, is a major world history event. In Indian history, the adoption of Indian Standard Time in 1947 on this day established a unified temporal framework across the nation. Other global events include the discovery of the asteroid Juno in 1804, and the 1985 discovery of the Titanic wreck.
****Have a nice Day****
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