Why Is The Global Economy Growing?
The global economy is growing nearly as fast as before US President Donald Trump got going with his tariff blitz
On Episode 712 of The Core Report, financial journalist Govindraj Ethiraj talks to Madhavi Arora, Lead Economist at Emkay Global Financial Services as well as Chokkalingam G, Founder at Equinomics Research Pvt Ltd. For our Build on Blockchain segment we feature Suraj Teja, Founder at Sow & Reap.
SHOW NOTES
(00:00) Stories of the Day
(00:50) Why is the global economy growing?
(04:19) Why banking stocks are doing well and the big bet on PSU banks
(12:50) What explains India’s upward growth projections?
(21:58) Amazon’s job cuts and what they mean
(25:13) Build on Blockchain
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.
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Good morning, it's Wednesday, the 29th of October and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital,
Our top stories and themes.
Why is the global economy growing despite all projections otherwise?
Amazon's job cuts and what they mean in the larger corporate context.
Why banking stocks are doing well and the big bet on PSU banks.
What explains India's upward growth projections?
Why or How Is The World Economy Growing?
A current activity indicator from investment bank Goldman Sachs says that after slumping in the spring, the global economy is growing nearly as fast as before US President Donald Trump got going with his tariff blitz. According to The Economist, the JP Morgan Global Composite PMI, a high-frequency gauge of activity, looks strong. In August, it hit a 14-month high.
A real-time measure from the Federal Reserve Bank of Atlanta suggests that in the third quarter of 2025, America's GDP grew by 3.9% at an annualised rate, a strong performance, though everyone expects the fourth quarter to be weaker. Just one OECD country, Finland, says The Economist is in recession compared with 8 in early 2023. In April, economists downgraded their forecasts for global economic growth in 2025 to 2.2%, but the consensus now is 2.6%, where it was at the beginning of the year.
Is India being revised upwards? We will come to that in a moment. The global economy is doing well in part because Mr Trump's tariff war is turning out to be less brutal than expected, says The Economist. His policies in April had implied an effective American duty as high as 28%, but today that figure is down to a little over 10%.
On the other hand, thanks to strong fiscal policy measures, particularly in America, there is strong demand. Now, all of this could slow down or end as Mr Trump could slap fresh tariffs at any moment, as he did certainly with countries like China just recently, and that may change things. But for now, financial markets believe that the economic momentum will continue.
More importantly, investors are expecting sound corporate earnings seasons for the third quarter of this year after a second quarter where global company profits grew 7% year above the historical average. The MSCI ACWI, which is an index of global stocks which he referred to here, on occasion is of course at an all-time high. Even stocks of cyclical firms are doing well, which is not the case usually when there is a contraction or expected to be one.
Within the US, some part of the investment frenzy leading to GDP growth is AI driven, but The Economist argues this is not the case elsewhere in the world and surely not in India. So where does India stand? The Indian economy will also grow slightly faster than previously expected this fiscal year, according to a Reuters poll, as economists in an October 15-24 poll raised their forecasts for a second straight month following a surprise 7.8% expansion in the April-June quarter. GDP growth has been forecast to average 6.7% this fiscal year, according to that poll of 40 economists and their forecasts.
Now, this is above the 6.6% estimate from last month's Reuters poll and a jump from the 6.3% projected in August, before the April-June figures were released. So why is this happening? We will come to that in a moment. But before that, what does it mean for markets, at least to the extent that some of this growth in consumption and earnings in India will be studied to positive, and maybe the markets will hit an all-time high soon and more on that in a moment.
Let's take stock of Monday. It was a choppy day and the benchmark indices were lower led amongst others by IT, financial services, and consumer durables. The Sensex was down 150 points finally after, like we said, it was a choppy day to close at 84,628.
NSE Nifty 50 was down 29 points to close at 25,936. In the broader market, the Nifty mid-cap was down very marginally, that's less than a percent. The Nifty small-cap was up slightly, again, less than a percent.
So to return to the question of where the markets can go now, remember, we are near the all-time highs hit in September 2024, more than a year ago. And what would it take to sustain that, particularly in the context of this global and India economic growth that we've been talking about? To discuss that and also why banking stocks were looking strong right now in the context of the overall health of the banking system, I reached out to G. Chokkalingam, founder of Economics Research, and I began by asking him where he was seeing, or rather, when he was seeing the next all-time highs.
INTERVIEW TRANSCRIPT
G Chokkalingam: Certainly, I mean I am absolutely confident that by end of December, we will see a very considerable record high. When I say considerable, I mean we will breach the previous record high by significant margin. From here, Sensex and Nifty should move up at least by about 4 to 5 percent by end of December.
Sensex can breach 88,000, Nifty can breach 27,000. The reasons are two or three, you can say. One, fundamental economic or domestic growth story.
And second, the flow of retail investors. Continuously, more than 6 to 7 lakh investors are entering the market every week now. Third, even the FEI has outturned buyer of Indian equities of late.
And all this would lead to record level of indices levels within two, three months.
Govindraj Ethiraj: What's driving both these factors, the continuing flow of retail investors or new retail investors as well as foreign portfolio investment, which was obviously negative for most part of the year?
G Chokkalingam: Yeah, so that itself is one of the reasons. I mean, historically, if you see from Lehman period, so whenever market was cheap, they were exiting the Indian market. And after that feeling of missing the market and then they come back when market rises.
Of course, that is a tactical. But fundamental reason is that when our market has given hardly 5.5% return on year-on-year basis, Chinese market has given 18% on year-on-year basis. So we are underperform.
That itself is a relative attraction for foreigners because now with the tariff war, it is quite difficult to expect the foreign investors to continue to take money out of India and go to China. Rather, reverse flow also possible because of the tariff war and substantial rise in the Chinese equity in the last one year. Another reason is that a couple of days back, we saw even IMF saying that the domestic growth story, particularly the GST reform, all that can outweigh the adverse impact of US tariff war.
I also believe to a large extent, these things can mitigate. So the fundamentals are also changing. We had excellent monsoon.
Water storage is again at a record high level. So the rubbery crop is also going to be good. Inflation rate is likely to remain low.
The reversal of interest rate cycle would continue. And GST reform is also making a big impact, which we saw in terms of automobile sales, overall sales from the retail shops, all that. So FIS would be convinced.
And I don't expect a mega rally from the FIS in terms of fund flow, but marginally it would start improving.
Govindraj Ethiraj: How are you seeing overall valuations, I mean, whether in the benchmark indices or in the broader indices, given that we are still at close to highs, and this is precisely the reason many investors had started selling? Yeah, it is true.
G Chokkalingam: Last two, three quarters, we have been suffering from what I used to call single digit growth syndrome. We had a single digit volume growth syndrome in many sectors like cement, FMCG, automobile. Then in IT sector, dollar revenue was growing and poor single digit.
But now, with the direct tax reform in the last budget and the GST reform, things are looking better. October to December quarter, we might see the corporate earning improving. So that would address the concern of the overvaluation.
Right now, Sensex is around a 23.3 on a trailing basis P ratio, which is one of the highest in the world markets and also slightly above recent historical average. But then point is that we always enjoyed the premium. But now with all these factors, which I outlined like monsoon GST, direct tax reform, and also most important fact is that as we are speaking, the oil is also cheaper by 21% from 52 week high.
So all this would augur well for corporate earning to improve from Q3, that is October, December quarter. So certainly 10 to 15% year on year growth in profit is possible from October to December quarter. So that would suppress the trailing PE and that would give us more comfort and confidence and even the FIs would get confidence.
So that would address the concern of overvaluation, which is there for last two, three quarters quite strongly.
Govindraj Ethiraj: Right. Are you seeing any sectors that are undervalued or sectors that are looking interesting to you at this point?
G Chokkalingam: I don't think any sector is undervalued for that matter. There may be individual stock. Because, you know, after spending nearly three decades, what I see is that there is a euphoria.
I mean, whatever is happening with the US tariff war, I have a tremendous confidence in the medium to long term story. This kind of confidence I have not seen. So whether even you talk to institutional client, wealth management firms, so everybody is now talking of the future stories here and, you know, how to capitalise the opportunity which is going to come from one to three years.
I'm not saying next one to two quarters. So therefore, it is in the prices. A lot of stocks are already.
Still in relative terms, I would say that banking sector is cheaper. I would tell you a very interesting insight. I've been tracking the banking sector from 2002.
In fact, 1993 and from 2002 quite aggressively. Historically, if you see, the banking industry used to have a net NP of 4 to even 8%. In a bull market, they used to command 1.3, 1.5 times price to adjusted book value. But now in the last 10 years, they brought down the net NP. A majority of the PSB banks have net NP less than 1%, around 0.5, 0.6. They improve the quality of assets. Some of the banks are growing the credit on par with the private banks, which was not the case in the past.
Still, there are many PSB banks trading at around 1 time, 1.1 times price to book value. So according to me, the structural change in the industry is not reflected in the valuation. The consolidation of PSB banks have improved the productivity.
Now we are talking of another consolidation. And the reversal of interest rate is going to continue because of the low inflation. And also interestingly, the access to low cost deposit is very high for PSB banks.
What was considered as a pain point, that is having a lot of branch network, not addressing digital, that has become a positive now for the PSB banks. I don't know how many people have realised, because of historically what we used to call as a burden has become a blessing. The huge branch network is helping them to retain the low cost deposit.
Many banks have 45 to 50%. That is also helping them on profitability. Public sector banks is the one segment I consider as cheapest in valuation.
Govindraj Ethiraj: That would represent roughly 65-70% of the Indian banking sector?
G Chokkalingam: Yeah, because you have SBI alone. I have not worked out, but it could be 55 to 60%.
Govindraj Ethiraj: Got it. Is that also the reason why we've seen so much of foreign direct investment come into some banks like recently with RBL and S-Bank and others? The banking industry is one of the few sectors to grow double digit growth.
G Chokkalingam: Credit is still growing in double digit at around 11%. Now, that is not a great insight. What is the insight is that, you know, since I've been tracking for three decades, there has been a lot of criticism that if any bank doesn't have promoter, it is difficult to acquire those banks, partially, even partially.
But now, these two banks, RBL and S-Bank, these banks do not have a promoter at all. Public stake is 100%. Still, the foreigners have come in.
So, this is another structural change, I would call it. This is the beginning of consolidation process where you have five to six old private sector banks where most of them do not have an identifiable promoter. Some of them have zero promoter stake.
So, after seeing such a large bank, you know, from West Asia and Japan taking stake in those two banks where no promoter is, that tells me that a lot more things to happen. So, on one hand, you have an attractive valuation. On the other hand, these guys are interested.
So, therefore, banking sector will be a bankable sector for the next one year. Right.
Govindraj Ethiraj: Thank you so much for joining me.
G Chokkalingam: Thank you.
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And now to come back to the economy.
First, industrial growth, as indicated by the Index of Industrial Production, eased marginally to 4% on-year in September from 4.1% in August. Rating agency Crisil said the key reason for this was slower growth in primary goods at 1.4% versus 5.4% after a slowdown in mining and also sluggish electricity consumption. Crisil ratings also said that other categories like consumer durables saw a sharp pick-up and there was a marginal improvement in infrastructure and construction goods and also intermediate goods and capital goods.
Consumer non-durables continued to see negative growth, but the pace has softened relative to August. Crisil says in coming quarters they see downside risks to growth due to external factors. Remember, exports to the United States shrank almost 12% year-on-year in September as those higher tariffs kicked in.
Of course, if there is a trade deal with the United States, as many expect or hope, then that could mitigate some of that impact. Overall, Crisil says they expect India's GDP growth at 6.5% for the current fiscal, with risks tilted to the downside. So, this figure obviously is a little lower than that median poll of economists by Reuters.
Now, we did speak of that somewhat puzzling growth in global economy. India is not so much of a puzzle, but it's growing too. So, what is driving it and what's the outlook looking like even as we understand what's behind the numbers? Once again, while the projections are not high, the fact that this is a positive reversal of expectations from projections that GDP growth numbers will go down to now going up merits a question.
I reached out to Madhavi Arora, Chief Economist at Emkay Securities, and I asked her what explained this turnaround, even though the variation was still low.
INTERVIEW TRANSCRIPT
Madhavi Arora: Govind, there are two or three things that have played out in the last six months, right? One, of course, is the deflator factor, which is sort of leg up to the real GDP while having reduced the uptick for nominal GDP. There's an artificial effect that has played out.
Second, of course, is the front-loaded government spending, which is also playing a part in better outcome in the last quarter and probably this quarter as well. And thirdly, there was also, at least in the first four months of the year, an export which was largely front-loaded again because tariffs were nearing in the month of August. So all of that, at any way, upped the first quarter or the first four or five months outlook for India much better than what we all had anticipated, to the extent that, given the way deflator is at this point in time, in the second quarter of the year, we are likely to see GDP growth for the second quarter even crossing more than 7% for all you know.
Second half would be probably slower because of the base effect. But again, the second half, at least the third quarter onwards, you'd also see the GST-led delayed spending effect, which probably has played out very well in the early part of October to have sort of kicked off some bit of a consumerism and could lead to a much more secular growth story from the consumerism point of view, given that tax incidences come off, would also probably help in terms of upping the growth story from the consumer consumption point of view. But that said, again, as you said, it's a very marginal increase. To a large extent, I think the improvement in the growth picture is happening on account of deflator effect and not necessarily on account of change in the macro dynamics in a more structural way.
Of course, there are some headwinds which could probably play out in the rest of the year if tariff remains penal for India. But at the same time, as we were discussing earlier, the GST-led fall in tax incidents could be a driver for consumerism in general. Whether that sustains or not has to be seen.
There's a lot of noise in the data at this point in time. As I said, there were a lot of front-loading of cum-in-spending sports that had laid out and all of that had clouded the growth story in the near term and made it look much better than what actually it is. So once the data collective comes, once we understand that this recent Navratri and Diwali spending that also got bunched up because of GST impact, all of that, whether it is sustained beyond the Navratri and Diwali effect, and if that does happen, then probably does it really change the consumer behaviour altogether?
Govindraj Ethiraj: Right. So quick question, just for those who don't perhaps fully follow this. Can you explain the deflator effect and how it's playing out or plays out when we compute GDP?
That's one. And the second question is, best case situation, how much would consumer spending impact GDP numbers? I mean, when we say, for example, if it goes up by 0.1%, is there a way of looking back and saying, okay, this means consumer spending went up by this much?
Or conversely, if you say consumer spending went up X percent, because of lower taxes, then what would be the impact on GDP?
Madhavi Arora: On the first question on the deflator effect, because we're talking about the real and the nominal GDP differentiation here, all nominal indicators are actually deflated or adjusted for inflation. Now, you know, in a normal parlance, manufacturing inflation would be deflated by manufacturing led factors. Services indicator would be deflated by services inflation.
Unfortunately, in India, we don't have services inflation indices, which are placed. So we end up essentially deflating manufacturing as well as services using largely WPI led indices, which is the wholesale price index, which basically represent the producer prices to a large extent. So whenever there's a commodity up cycle that happens, whenever the global producer prices or global quantity inflation is higher, it leads to a higher WPI or higher commodity led inflation.
And it tends to sort of deflate the GDP growth much more than otherwise would happen in the case, because as I said, we don't have a services deflator. So what tends to happen through the whole of GDP series is that almost 70% of the GDP series, the nominal GDP series gets adjusted for inflation using the WPI, which is 70% of the weight of the deflator and 30% is using the CPI, which is a retail inflation. So as I said, whenever the up cycles and commodities happen, the WPI goes up, real GDP actually starts looking much more lower.
In the reverse case, when the commodity cycles actually go down owing to base effect or structural factors, real GDP tends to bump up artificially. So that's what is happening at this point in time, because versus last year, the WPI currently is running sub 0.5%. In fact, last quarter, it was largely negative. And CPI inflation itself is not running much lower than what we initially anticipate.
For the whole year, we are looking at even CPI inflation close to around 2% and WPI as low as 0.5 or even lower than that, which basically means that nominal GDP in India itself would not grow more than 7.5%. And real GDP, consequently, with the lower deflator effect would look very, very close to nominal GDP. Otherwise, if you recall, India is on an average of 3.5-4% inflation economy. So if the nominal GDP is growing at 12%, real GDP will probably be going at 8% or so.
That kind of a gap used to be always there. But because of these commodity cycles, like artificial deflation that has happened in the economy, and other factors which have led to even the retail inflation going down, the adjusted nominal GDP, which is adjusted for inflation is the real GDP, which will start looking much better optically than actually it is.
Govindraj Ethiraj: Right. And last question, what's your outlook as things stand now? You've explained why the numbers could be like this and why the numbers could be higher than what we perhaps earlier expected or projected.
So what is your outlook like at this point looking ahead?
Madhavi Arora: The economic outlook in the near term is still clouded with a lot of uncertainties. We still don't know whether the consumer-led spending spurt is going to sustain. If that happens, then obviously it could lead to a much better virtuous cycle in consumption and investment segment of the economy.
We still don't know how the tariff or the trade war actually plays out for India, and for the world for that matter, how impacted our exports are going to be or whether we will also find a way to basically transship our exports via other nations and not necessarily take as much hit as we are expecting them to be. We still don't know how deep the reserve bank rate trajectory is going to be. We are still expecting two more rate cuts, a maximum of course, but the transmission is still going on.
So I think I would wait and see how these trends really play out. As of now, my sense is with the policy interjection with regard to fiscal policy specifically, what we've really seen is that the consumer segment, which was largely the urban consumer segment, which was actually getting marred owing to a very weak income outlook, has found some base with regard to upticks. I don't expect them to further weaken from here on, but I'm not expecting the urban consumption to also look at a V-shaped recovery either.
So there's going to be more drag, U-shaped recovery in consumption that you will see. Investment, on the other hand, probably would be more drag because I think the private segment is largely looking at two or three factors, one of those being tariff, second one being durability of the consumer rebound. And then we'll see how things play out.
I think consumption will be the first leg of uptick from here on. But again, it won't be a V-shaped recovery, more U-shaped one. I think this has largely dropped out in terms of the weak consumer sentiments that we were seeing six months ago.
As of now, we're still looking at a 6.5% GDP growth. I think there is an upside risk to that. A part of it would again be because of deflator, then big structural moves as such.
But nonetheless, I think the worst is behind us.
Govindraj Ethiraj: Right, Madhavi. Thank you so much for joining me.
Madhavi Arora: Thank you.
Amazon's Job Cuts
Amazon said on Tuesday it will lay off about 14,000 corporate employees, and this would be the latest cuts in the company's multi-year effort to bring down costs.
The layoffs are expected to be ultimately the largest corporate job cuts in Amazon's history, according to CNBC. Now, Reuters had reported that the cuts could hit as many as 30,000 employees, and that report came the day before. In a blog post, Amazon wrote, now remember we are talking about Amazon globally, that the layoffs are being carried out to help make the company leaner and less bureaucratic, while it looks to invest in our biggest bets, including generative artificial intelligence.
The company said that they are convinced they need to be organised more leanly with fewer layers and more ownership to move as quickly as possible for customers and businesses. Amazon is about 350,000 corporate and tech employees, meaning the 14,000 job cuts represent about 4% of that segment of its workforce, according to a CNBC report, which added that the company, that's Amazon, would continue to lay off employees in the coming year, even as it plans to keep hiring in key strategic areas. Amazon CEO Andy Jassy said in June that the company's workforce would shrink further as a result of embracing generative AI, and he told staffers they would need fewer people doing some of the jobs that are being done today and more people doing other kinds of jobs, which of course is the unanswered question, at least to some extent right now.
So how much is AI actually responsible for a reduction in jobs, and how specifically so? AI applications in human resources, for instance, where a good chunk of the layoffs seem to be driven by the fact that the people who are there were really doing very manual processes like filtering job applications or screening them. Many of those tasks seem to have been taken over by AI, but once again, we don't know exactly how much. Now, Amazon is also America's second largest private employer with more than 1.5 million staffers globally at the end of the second quarter, and that figure, according to CNBC, is made up of mostly warehouse workforce.
So if job application screening is really being taken away by AI, what else could be in future? And that's a question for corporations world over, including in India, to ponder in the very, very near future. And the other question is, were corporations indeed employing so many people in what in hindsight would mean repeatable jobs or repeatable tasks? So Amazon laid off around 27,000 employees between 2022 and 2023, that's 2022, and job reductions have continued since. Meanwhile, the United Parcel Service, or UPS, said it has reduced its management workforce by about 14,000 positions this year and an operational workforce by about 34,000 positions, according to a Wall Street Journal report.
The company just disclosed these workforce reductions, which were a combination of layoffs and buyouts. UPS has said that it's well positioned to navigate the coming holiday shipping season, and restructuring efforts have resulted in cost savings of about $2.2 billion so far this year. In April, UPS had said that it planned to cut about 20,000 jobs, citing the reconfiguration of its U.S. network, and the staff revamp came after UPS said it was cutting volumes from Amazon.com, which at that time was its biggest customer, according to that Wall Street Journal report.
Building On Blockchain
climate tech startup Sow & Reap has been granted more than 37,000 carbon credits by Global Certification Body Gold Standard for a paddy cultivation programme it spearheaded in Telangana state using Alternate Wetting and Drying, or AWD method, to cut down on methane emissions. Now, this project is spread across eight districts, and the Sustainable Paddy Cultivation Project across thousands of acres used AWD method and leveraged a blockchain-powered digital measurement reporting and verification solution. I reached out of the Hyderabad-based SoAndReP, and I asked him how he was creating verifiable digital trails for every crop.
TRANSCRIPT
Govindraj Ethiraj: Suraj, thank you so much for joining me today. So, I'm going to ask you about Sow and Reap, but before I do that, tell us about what attracted you to agriculture as a larger theme from the world that you were in earlier, which was really building hospitals.
Suraj Teja: What attracted me towards agriculture, the credit goes to my grandfather, because we come from a farming background and I was closely associated with my grandfather being the eldest grandson in the family. I always grown up with him in my summer holidays and spent most of my time fascinated by the hard work he used to do in field and I was always mesmerised by his lifestyle because I used to see the contrast growing up in the city and then going to villages which had very basic infrastructure that always had my attention or my interest or my curiosity towards farming and farmer's life. So, that was the major initiative or the drive which helped me to start Sow and Reap.
Govindraj Ethiraj: Right, what is the problem that you saw or identified at that time and which made you actually start this venture?
Suraj Teja: The basic problem is most of the Indian farmers are from socio-economic backward farmers. I always wanted to do something better to farmers and when I saw the opportunity that the hardship the farmers go through, all the hard work they put on in the field and then it is the kind of the problems these farmers face. I've seen multiple times that when the harvest was ready to take and there was a huge flash floods which came in or the yield was not to the desired level, the discomfort or the displeasure the farmers used to feel.
I used to feel very bad with that. So, I thought if there is a chance for us to improve the farmer's life by improving their degenerated lands to regeneration and if we could help in increasing the yield for the farmers which will also impact the environment by reducing greenhouse gas emissions. I thought there is a play for us to take an initiative there and that's how the whole thing started with Sow and Reap.
Govindraj Ethiraj: Got it and tell us about how blockchain is enabling you to connect or complete this cycle. The blockchain comes at a later stage because it's a web3 application.
Suraj Teja: Basically, the solution what we're talking about is an in-house digital measurement reporting verification software which is a web2 solution. So, we have built this web2 solution which onboards the farmer then we implement the methodology. When we go into the practises of this AWD mechanism, we do three different cycles.
One is the first primary cycle is after finishing the KYC, we geofence and geotag the each and every farmland of the farmer who are there on board. So, if I say if we have 1 lakh acres, 1 lakh plots were mapped and they have done geofencing and geotagging is done. After that, we go into the actual procedure which is installation of AWD pipe in each and every plot which is mapped and the cost for that AWD pipe is also borne by the company.
There's zero cost for the farmer at every stage and once the AWD pipe is installed, that also has to be mapped on the platform on the DMRV platform. This happens typically after 20 days of the sowing is done. Once the AWD pipe is installed, we go for monitoring of two cycles of drying which is typically each cycle is a five days of drying.
When this drying cycle happens which happens typically after 20 days after the pipe installation, the first drying, there's an alert which goes to the executive level app that all the farmers from the sowing date, the 20th day monitoring has started and they have to go reach out to the farmers and tell the farmers that this is the time they have to reduce, stop putting water into the field and when they actually do that, when the five days drying happens, we take the evidence of that, that each field has started drying on first day, second day, third day, fourth day, fifth day. By the fifth day, you will see that the pipe which is six inches inside the ground and six inches above the ground, the water is depleted to the floor of the six inches which is inside the ground because that adds as a water measurement tool. It is a safe distance that the water is just six inches below the ground and the roots are still getting water below that.
So they shouldn't go beyond that. The moment the water recedes to the depth of the pipe, they start back filling up the water into the field. That is called safe cropping period for the farmer.
So when they do this for the two cycles, every evidence is recorded on the DMRV and all this data is put into the evidence and then the blockchain kicks in now when the project is completed from the KYCs and the geotagging and the pipe installation and the evidence of first cycle and second cycle. We finish the whole data which is in real time, which is being captured on field, which goes on to our blockchain platform. Once it is blockchain, the entire data which has been recorded so far is immutable and that helps the validator to validate the project that whatever has happened because the validation happens post the project is concluded.
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And look out for more insights on blockchain and how it can transform businesses as we count down to the third Algorand India Summit 2025 to be held on December 6th and 7th at the ITC Gardenia in Bangalore, where we and the Corps will be there.
