📊 India's GDP outlook

NSO posts Q4 GDP results, Noyb declares war on cookies, Plum raises Series A, and some more updates.

the mesha tribe

Jun 01, 2021

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There’s so much to cover today so let’s get started.

First up,

Market Snapshot 📈

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Bitcoin: $36,629.63

Top Stories 📰

1. India's GDP shrinks 7.3% in FY21 📉

The latest estimates by the National Statistical Office suggest that while India's GDP advanced 1.6% in Q4, the economy fell nearly 7.3% for the whole year as the second coronavirus wave ravaged the country.

Meanwhile, the gross value added (GVA) — which measures the contribution of area, industry or sector — gained 3.7% in Q4. Overall, it fell 6.2% for the year, compared to a 4.1% rise in the previous year.

Stats that matter:

India's eight core sectors grew 56% YoY in April but declined 15% on a sequential basis.
The fiscal deficit stood at 9.2% — 0.3% below the Union government's revised target.
Gross fixed capital formation contracted 10.7%, compared to 5.4% growth last year.

Additionally, economists and rating agencies said that India's economy is unlikely to see double-digit growth in FY22 mainly due to states' stringent restrictions, slow vaccination process, and a possibility of a third wave.

How did we get here? While India's downward spiral may seem obvious considering the pandemic, it started way before that...in 2016. Experts suggest that the government's decision to demonetise 86% of India's currency overnight and its hasty implementation of the Goods and Service Tax (GST) may have triggered the downfall.

Why it matters? Contrary to the Union government's positive claims about the economy. India's fundamentals show a pretty bleak picture. Falling GDP per capita, record unemployment rates, depreciating Indian rupee, rising inflation, and growing fiscal deficit suggest that the country's GDP may take several years to return to pre-pandemic levels.

2. War on cookies 🍪

Privacy rights group Noyb has issued 500 draft complaints to companies that deliberately use misleading cookie banners. The group — whose name is an acronym for "none of your business" — says that they want to simplify the acceptance into "a clear yes/no option."

But first, what are cookies? They're small pieces of data — like usernames and passwords — saved by your browser so it can recognize your device in the future. While they're mainly used for managing your sessions and personalization, third-party advertisers use them to track and follow users from website to website to place their ads, which raises privacy concerns.

As per the complaint, the group claims most banners did not comply with the General Data Protection Regulation (GDPR) requirements. Of the 500 pages in its first batch of complaints, 81% didn’t offer a “reject” option on the initial pages, while 73% used deceptive colours and contrasts to make people click on the "agree" option.

The group is first issuing draft complaints to 10,000 of Europe's most visited website, along with instructions on how to change software settings. Firms have a month to comply, after which the group will file official complaints with law enforcement. Failure to comply would lead to fines up to €20 million or 4% of the total revenue, whichever is higher.

Why it matters? Cookies have received some backlash in recent times due to increasing tracking and privacy concerns, with many people calling for them to be replaced by another system. In fact, Google has already started working on a cookie replacement mechanism for Chrome.

3. Today’s big deals 🎉

Insuretech startup Wefox raises Series C
German digital insurance startup Wefox has raised its largest, $650 million Series C funding round at a $3 billion valuation. Existing shareholders such as Mountain Partners, G Squared, OMERS Ventures, and new shareholder, including Ace & Co and FinTLV, participated in the round, led by Target Global. Wefox sells personal insurance products like motor insurance, household insurance, and personal liability insurance. The company, which is disrupting a $5.2 trillion insurance industry, reported $140 million in revenue last year. It has around 700 agents and nearly 5000 associate selling its products. With this capital, Wefox is looking to expand into new insurance products and new markets, starting with Italy. It's also working on automating processes to reduce operational costs and improve overall efficiency.
Plum raises $15.6 million in Series A
India's health insurance firm Plum has raised $15.6 million in its Series A funding round, led by Tiger Global — an investment firm that has supported more than 20 Indian unicorns so far. Existing investors like Tanglin Venture Partners, Sequoia Capital India’s Surge, Gemba Capital, Incubate Fund, and Cred founder Kunal Shah, among others, participated in the fundraising. The latest round brings Plum's total capital raised to $20.6 million. The company operates on a B2B2C model, collaborating with small firms to provide health insurance coverage to their employees. In fact, it has recently partnered with payment solutions firm RazorPay to offer its clients a three-click signup option for insurance coverage. Plum plans to use the capital to expand its offerings — domestically and internationally — and hopes to provide insurance coverage for 10 million Indians by 2025.