Business News at 09:30 am on 16th October 2023

With 95% of the Budget allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme having already been utilised so far in the current fiscal, the Centre will likely provide an additional Rs 30,000-40,000 crore for the flagship scheme soon, as per sources. The government will also try and plug leakages in the scheme, given the instances of misappropriation being reported. Approval for the extra allocation would be sought in the first Supplementary Demand for Grants to be presented in the winter session of Parliament in December. In the interim, the government will ensure fund flows to run the scheme smoothly without disruptions, the sources said. The Centre has so far released Rs 56,994 crore or 95% of the Budget estimate for MNREGS in FY24.
Meanwhile, Tata Consultancy Services on Sunday night reported that the investigation into bribe-for-job scandal has found involvement of 19 employees. The IT major has removed 16 employees out of the 19 and barred six vendor entities from doing business with the company, it said in a filing with BSE. The filing stated, quote, “Our investigation found 19 employees to be involved and action has been taken against all as detailed here – 16 employees have been separated from the company for code of conduct violations, and 3 employees have been removed from the resource management function. Also, 6 vendor entities, their owners and affiliates have been debarred from doing any business with TCS,” unquote.
Moving on. With the festive season around the corner and inventories rising to five-year highs, automakers are doling out mouth-watering discounts to car buyers. Attractive offers are galore, ranging from Rs 20,000 to Rs 200,000. These include cash discounts, exchange, loyalty bonuses and corporate discounts. In addition, dealers are also doing their bit by offering discounts on accessories. While festive offers are valid till October 31, some have been going on for slow-moving models, especially compact hatchback and sedans. What is interesting is that discounts are being offered even in the sport utility vehicles and CNG-powered models – both perceived as high demand segments. This could be an indicator of the sluggishness in the retail demand.
In some more industrial news, E-commerce giant Flipkart said it has recorded 1.4 billion customer visits over the eight days of its festive sale, with sellers seeing 2.5x growth in their businesses as compared to usual business days. Flipkart’s Big Billion Days sale began on 8th October, with early access available to its premium members since the day before. Early data from rival e-commerce sites such as Amazon and Meesho, which hosted their festive sale events last week, also indicate a significant surge in consumer demand. Flipkart said its top-selling products came from categories such as televisions, audio devices, smartphones and grooming products. The company in a media statement said, quote, “Choices in Smartphones, Laptops, Tablets and Home Appliances indicate a strong premiumisation trend PAN-India this year,” unquote.
Over to economy. The government stated on Sunday that it is actively reviewing the decision to impose the MEP of $1200/tonne on basmati rice shipments. A statement by the food ministry said, quote, “The review of free on board value for the issue of registration–cum– allocation certificate for basmati rice by the Agricultural and Processed Food Products Authority is under active consideration of the government.” unquote. The ministry said that measures to make basmati rice exports to be valued at $1200/tonne or above for registration of the RCAC were implemented on August 25 to prevent ‘misclassification’ and ‘illegal’ export of non-basmati white rice, which had been banned on July 20.
In other news, The department of telecommunications is evaluating around 440 proposals worth over Rs 1,000 crore for funding under the Telecom Technology Development Fund scheme. The TTDF was instituted on October 1, 2022 to support rural-specific communication applications as well as promote technology ownership, indigenous manufacturing, and creation of intellectual property for telecom products and solutions. The evaluation is being done on parameters such as technical feasibility of the solutions proposed, market size and impact on target segment of consumers, potential for import substitution, originality and national importance, go-to-market plan, and team expertise. So far, the government has disbursed Rs 300 crore to about 400 companies under the scheme, government officials said.
Lastly, let’s see which stocks you need to watch out for today. These include Tata Motors, M&M, Mankind, Delta Corp, and Reliance among others. For those unaware, Tata Motors has entered into share-purchase agreements with certain investors for the sale of a 9.9% stake in its subsidiary Tata Technologies for Rs 1,613.7 crore. Mahindra & Mahindra on the other hand, has announced total production of 79,410 units for September, growing 21.9 percent over the year-ago period. Sales during the month increased by 18.1 percent YoY to 73,185 units, but exports declined 4.7 percent to 2,419 units in the same period.