Business News at 05:30 pm on 30th May, 2024

Let’s begin…Bharat Sanchar Nigam (BSNL) narrowed its net loss to Rs 5,367 crore in FY24 from Rs 8,161 crore in FY23, on the back of lower expenses, especially finance cost, and higher non-operating income. Revenue from operations grew 1% to Rs 19,343.6 crore, missing the target of Rs 20,008 crore, set by the government as part of the Rs 3.2 trillion revival package. The company missed the government’s target of Rs 20,008 crore. Total expenses fell 2.5% to Rs 26,683 crore. Of this, employee cost, which includes salaries, wages, allowances, and other benefits, was at Rs 8,304 crore, an increase of 4.4% from FY23. Employee cost accounts for 31.1% of the total expenses and 43% of the operating revenue of BSNL.
Moving on, The current state of the labour market in India depicts the presence of low to moderate “underemployment”, a paper by the statistics ministry said on Wednesday, in an official acknowledgement of the dismal jobs scenario in the country. The paper measures underemployment using a multidimensional approach, and not just based on hours worked by a person; and suggests that quantifying underemployment could help in making important policy decisions. The labour dynamics of a nation are frequently assessed by the volume of job seekers and the number of individuals who have successfully secured employment. However, we often overlook those who are employed but endure profound hardships due to various deficiencies in their working conditions, said the paper authored by Sonakhya Samadda.
In other news, Continuing its scrutiny of banks and other financial entities, and the imposition of restrictions, the RBI on Wednesday barred Edelweiss Asset Reconstruction Company from acquiring financial assets. It also directed ECL Finance not to undertake any structured transactions for its wholesale exposures. The actions followed errant behavior by group entities that had entered into a series of transactions by which stressed exposures of ECL Finance were being evergreened using the EARCL platform and connected alternative investment funds (AIFs). The central bank noted in a release that the transactions were “circumventing applicable regulations”. The strictures against the Edelweiss Group companies follow similar measures taken by the RBI against JM Financial Products and IIFL Finance.
Next up, Concerned about the Reserve Bank of India’s draft proposal that will require lenders to set aside 5% initially as provision for infrastructure projects – both existing and new – some public sector banks have started hedging the risk. Sources said some lenders, including Canara Bank, Union Bank of India and Bank of India, are considering introducing a new clause for fresh loans, specifying that the lender may pass on any additional cost they may incur. Canara Bank is understood to have taken steps in this regard. An official said, quote, ‘We have already inserted a clause while making fresh sanctions. Any extra cost arising out of regulatory requirement can be passed on,’ end quote.
In another development, The government may reduce import duty on wheat after six years to boost domestic supplies so that it would not have to dip into the stocks much for carrying out market intervention programme.Sources said the decision to cut import duty on wheat would be taken up only after June, when the current procurement season officially ends, while a smaller quantity of grain is likely to be allowed to be imported. Dharmendra Jain, vice-president, roller flour millers federation of India, told FE, quote, “We have requested the government to cut import duty on wheat so that domestic supplies could improve without depletion of government stocks,” end quote. Food ministry officials said the government is keeping a close watch on market prices of wheat.
Up next, The delay in nearly 40% of infrastructure projects, coupled with escalating costs, could strain banks and non-banking financial companies, increasing the risk of non-performing loans. According to a recent report by the ministry of statistics and programme implementation, these project delays have resulted in a cost overrun of Rs 5 trillion. Out of the total of 1,873 infrastructure projects, with an investment of Rs 26.9 trillion, 779 projects are delayed. This delay has increased the total cost of these projects to Rs 31.9 trillion, reflecting a 19% cost overrun. Head of wholesale banking of a public sector bank told FE, quote, “Large infra projects financed by banks or NBFCs are expected to generate cash flows upon their completion,” end quote.
Lastly, GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a lacklustre opening on Thursday. Here is all you need to know before the market opens. GIFT Nifty traded up by 15 points or 0.07% at 22,735 indicating a lacklustre opening for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Previously, on Wednesday, the NSE Nifty 50 ended down by 183.45 or 0.80% to settle at 22,704.15 while the BSE Sensex plunged 667.56 points or 0.89% to 74,502.90. Meanwhile, The US Dollar Index (DXY), which measures the value of the dollar against a basket of six foreign currencies, traded up by 0.46% at 105.14.