Business News at 10:00 am on 12th March, 2024

Let’s begin – India can exercise the option of withdrawing tariff concessions granted to the four-nation European Free Trade Association under the Trade and Economic Partnership Agreement in case of non-fulfillment of $100 billion investment obligation only after 18 years, and that too after a three-stage consultation process. Though the investments have to flow in 15 years – $50 billion in the first 10 years and another $ 5 billion in the next five – TEPA provides for a three-year grace period to EFTA, according to the agreement documents reviewed by FE. The consultation procedure can be invoked by India if the investment target is not achieved in 15 years, but only after the grace period.

Up next – The Centre’s fiscal deficit, in absolute terms, may come in close to Rs 17 trillion in the current financial year, lower than Rs 17.3 trillion pegged in the revised estimate, on account of a sharp rise in total receipts of the Centre, say economists. This would mean, the Centre’s fiscal deficit as a percentage of GDP would be similar to that pegged in the RE, that’s 5.8%. Presently, according to the second advance estimate of GDP released by the statistics ministry last month, the Centre’s fiscal deficit may come in at 5.9% of the GDP in FY24. But a Rs 17 trillion fiscal deficit assumption would pull down the fiscal deficit-to-GDP ratio by 10 basis points.

Moving on – The Dharavi Redevelopment Project management said it will start the survey to collect data from the informal tenement residents of the slum in Mumbai on March 18. The data will be used by the state government to determine the residents’ eligibility criteria. The survey will also create “Digital Dharavi”, a first-of-its-kind advanced library of the 625-acre informal settlement, which is among the world’s largest. The survey will begin from Kamla Raman Nagar. A team will visit every residence with an indigenously-developed application to scan documents. A unique number will be given to each informal tenement. This will be followed by ‘Lidar Survey’, which will involve mapping of each lane.

Meanwhile – The recent reduction in compressed natural gas prices by city gas retailers in Delhi and Mumbai — Indraprastha Gas and Mahanagar Gas, respectively — are unlikely to impact the margins and profitability of these companies, according to analysts. The price cuts have been in line with the softening of the spot LNG prices and would hardly pinch CGD companies’ margins, ICICI Securities said in its latest report. Last week, both MGL and IGL announced a cut of Rs 2.5 per kg in the retail prices of CNG. Prices of LNG have currently been trading below $9 per MMbtu against the average price of $15.2 per MMbtu in the third quarter of the current financial year.

In other news – Bharti Airtel, India’s second largest telecom operator, is expected to spend the highest among all operators in the upcoming spectrum auction in May, thereby piping Jio and Vodafone Idea, analysts said. This is because besides acquiring the spectrum which is up for renewal, Airtel is expected to acquire additional spectrum in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, and 2300 MHz, analysts said. The same will not only help Airtel to boost its market share and up stake in rural areas, but also help it transition to 5G standalone architecture without even waiting for 600 MHz band and the expensive 700 MHz band, analysts said.

Moving ahead – The Reserve Bank of India took delivery of $5-billion dollar/rupee swap that matured on Monday, releasing over Rs 40,000 crore of durable liquidity in the system. Sustained dollar flows and tight liquidity have prompted the central bank to take delivery of the swap, say bankers. The move will boost foreign exchange reserves. “There was no notification from the RBI last week to roll over this swap which was an indication that the RBI will take the delivery on Monday,” V Ramachandra Reddy, head of treasury, Karur Vysya Bank told FE. “The liquidity coming into the banking system will be durable, it will stay in the system for a longer period,” he further added.

Lastly – GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a muted opening. GIFT Nifty traded marginally higher as the index was up 10.00 points or 0.04% at 22,423.50 indicating a subdued start for domestic indices NSE Nifty 50 and BSE Sensex on Tuesday. Previously, on Monday, the NSE Nifty 50 lost 160.90 points or 0.72% to settle at 22,332.65, while the BSE Sensex closed 616.75 points or 0.83% lower at 73,502.64. The key stocks to watch in trade are L&T Finance, ITC, LTIMindtree, Aditya Birla, Adani Green Energy, GAIL, Vedanta, PSP Projects, Wipro, Bharti Airtel, and Imagicaaworld Entertainment among others.