Business News at 10:00 am on 10th January, 2024

Let’s begin. The government may earmark around Rs 90,000 crore for the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme in the Budget estimate for 2024-25, an increase of 50% over 2023-24 BE, in a strong signal to the poor ahead of approaching general elections. Rampant misappropriation of funds allocated under the flagship scheme was one of the main triggers for the Centre to make a five-year-low provision of Rs 60,000 crore in the FY24BE for the jobs programme. A likely higher upfront allocation for the jobs guarantee programme for FY25 means the government would largely stick to it through the year, without seeking supplementary grants, an official said.
On the eve of the tenth edition of the Vibrant Gujarat Global Summit, Prime Minister Narendra Modi actively wooed the heads of state and corporate head honchos to invest in India across sectors from semiconductors to automobiles and from infrastructure to green energy here today. On a three-day tour of Gujarat to participate in the VGGS, which commemorates 20 years this year, the PM spent the morning interacting with some of the top global CEOs including executives of Suzuki Motor Corp, Micron Technology and AP Moller and discussed industry issues and investment opportunities. Maruti Suzuki is looking to set up a second car manufacturing plant in Gujarat. This will be the firm’s fifth plant in the country.
Meanwhile, the World Bank has retained India’s economic growth forecast at 6.3% for the current financial year, and 6.4% for the next, citing slow post-pandemic recovery. The bank in its Global Economic Prospects report said, quote, “India is anticipated to maintain the fastest growth rate among the world’s largest economies, but its post-pandemic recovery is expected to slow, with estimated growth of 6.3% in FY2023/24,” unquote. The multilateral agency has stuck to the growth estimate for India made it June, despite the National Statistical Office in its first advance estimates recently pegging the country’s real GDP expansion in the current fiscal year, at 7.3%. The report noted that the slowdown in India’s growth to 7.2% in 2022-23 was primarily due to a weakening post-pandemic rebound.
Moving on. Even though India’s overall unemployment rate has declined in 2023 as compared to 2022, the joblessness within youth has started to rise again, according to data released by the Centre for Monitoring Indian Economy for October-December quarter. For those in the age group between 20 to 34 years, the unemployment rate across the country has seen a sharp increase in Q3 FY24. The rate for 20-24 years group stood at 44.49% in October-December as against 43.65% in the previous quarter, while in the 25-29 years category, it stood at a 14-quarter high of 14.33% compared to 13.35% in July-September. In the 30-34 years group, the joblessness rate was at a 10-quarter high of 2.49% as against 2.06% in the quarter before.
Over to economy. Indian exporters are yet to see any large-scale rejection of export consignments or demand to re-negotiate contracts as a result of the Red Sea blockade, but are increasingly worried that any inordinate delay in the resolution of the crisis might seriously jeopardise their business. Exporters of textiles and apparel have already started witnessing an increase in transit time in some cases, and a rise in freight, but still have the buyers’ confidence intact. In most cases, it is the buyer who pays for transport, sources from the exporting community say. Managing director of Joyti Apparels said that sensing delays, some of the buyers are opting to take cargo by air, especially of seasonal fashion items because any delay will mean missed sales.
Next up, industry. Bengaluru-based fintech platform Slice’s revenue grew threefold to Rs 847 crore during FY23 from Rs 283 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies show. However, its losses grew by over 50% to Rs 406 crore in FY23, up from Rs 254 crore it had incurred in FY22. The platform, which provides physical and virtual credit cards focused on students and salaried professionals, makes most of its revenue from interest income received on portfolio loans. This accounted for 56% of the company’s total revenue, which surged over three-and-a-half times to Rs 472 crore in FY23, up from Rs 134 crore in FY22.
Lastly, let’s talk about the stocks in focus today. These include Mahindra and Mahindra, Delta Corp, IRCTC, BEML, Lupin, and Power Fin Corp among others. Mahindra and Mahindra announced a strategic collaboration with US-based automobile technology company Mobileye. The partnership aims to explore the development of a full-stack autonomous driving system and the implementation of software solutions in Mahindra’s vehicles. Meanwhile Power Finance Corp has received a no-objection letter from the Reserve Bank of India to establish a finance company in the International Financial Services Centre located in GIFT City, Gujarat.