Business News at 09:30 am on 20th October 2023

Let’s begin. The government on Thursday sought to allay the concerns over the decision to put imports of certain computer hardware in restricted category, with mandatory licensing, by coming up with a liberal authorisation process. In what would provide relief to the importers, which include the likes of Apple, Dell, HP and Samsung, the new system doesn’t put any immediate cap on the volume or value of imports either at the firm or the aggregate level. Also, there won’t be any restrictions for now with respect to imports from any particular country. The new system, to take effect from November 1, would run till September next year, and data captured will be used for deciding on the next course of action, if any.
Meanwhile, The government is unlikely to seek Parliament’s approval for the amendments it had prepared over a year ago to the Insolvency and Bankruptcy Code during its tenure, as “it is not on the priority list,” an official source said. The relevant Bill which was said to be withdrawn from the agenda of the Monsoon session at the last minute, is unlikely to be tabled even in the Winter Session, the source added. The clutch of amendments proposed includes the one seeking to extend the so-called pre-packaged scheme to larger firms and a customised regime for the real estate sector. The Bill may see the light of the day only after the 2024 general elections.
ON to banking. Bank of Baroda has started investigating the role of business correspondents in ‘BoB World’ mobile app fiasco. The focus of the investigation will be on how business correspondents were able to get personal data of customers, which was purportedly misused by adding them to the app without seeking permission. Sources told FE that the bank is investigating the possibility of its managers colluding with business correspondents to achieve their targets. A source told FE, quote, “Business correspondents are used by bank officials to meet their ambitious targets. Some managers used their friendly relations with BCs to expand business. Others also use their influential position to force them to onboard new customers to the mobile app,” unquote.
Seeking to improve cash management, the finance ministry has allowed ministries and departments to fully leverage existing sanctions to fund central sector schemes, before seeking fresh ones. Sanction orders will be released to new agencies under the Public Finance Management System, a mandatory requirement to receive central funding, by a token money of Re 1 to facilitate this. The Central Nodal Agency for each scheme could then assign them drawing rights from the existing pool of resources. Currently, CNAs for CSSs get funds equivalent to sanctions by the ministry. For example, if the sanction is Rs 1,000 crore for a scheme through five agencies, CNA gets that sum. It then distributes the drawing rights among the five who draw funds just in time for actual spending.
Moving on. With the Integration of credit lines and access to loans through the UPI platforms, companies in UPI space have started seeing signs of a self-sustainable business model, Ambarish Kenghe, vice president of Google Pay, told FE. The statement from Kenghe assumes significance, given that currently regular UPI transactions are not chargeable but only merchants have to pay 1.1% MDR (merchant discount rate) for payments above Rs 2,000 when received through wallets, credit cards, and debit cards. However, there is an infrastructure cost, marketing costs, and people cost that banks and UPI firms incur to facilitate those transactions.
Over to technology. As Google announced its plans to manufacture Pixel smartphones in India, communications and IT minister Ashwini Vaishnaw has asked the company to also start manufacturing the Tensor chipset in the country within the next three years. Google Tensor is the custom-built chip that goes into Pixel smartphones to perform advanced tasks. Vaishnaw also asked Google to bring its premium foldable Pixel phone to India and to establish their supply chain partners here to strengthen the components ecosystem. The government’s push to attract chip design and manufacturing in India is critical at a time when major semiconductor companies are looking at geographies to establish their ecosystem in a bid to move away from China.
Lastly, watch out for the stocks in focus. These include Tata Motors, ITC, HUL, ICICI Bank, JSW Steel, and RVNL among others. Hindustan Unilever has recorded a 3.9 percent on-year growth in standalone profit at Rs 2,717 crore for the quarter ended September FY24 with better-than-expected operating margin performance and lower input cost. ITC recorded standalone profit at Rs 4,927 crore for the quarter ended September FY24, rising 10.3 percent over a year-ago period driven by higher other income. The Tata Group company has entered into share purchase agreements and other agreements to acquire a 26.79 percent stake in logistics solutions company Freight Commerce Solutions for Rs 150 crore.