Business News at 10:00 am on 15th January, 2024

Lets begin – The Build Operate Transfer model for highway construction is back, with the National Highways Authority of India calling bids for projects entailing combined investments of Rs 31,000 crore via this route. In all, 8 key highway stretches including a greenfield access-controlled expressway are proposed to be developed in the BOT model, which has been dormant for several years due to risk aversion among private investors. The total length of highways for which bids have been invited is 517.4 km and the total project cost is expected to be Rs 30,975 crore. These projects were part of the list of 15 highway stretches of 937 km that were to be awarded under BOT this financial year.

Next up – The Reserve Bank of India’s monetary policy action may be credited for reducing core Consumer Price Index inflation in the recent months, but a sub-4% core print also denotes weak demand conditions in the country at an aggregate level, say economists. Curiously, this is also a bit at odds with the RBI’s assesment in its November bulletin that “investment demand appears to be resilient given the government’s infrastructure spending, an uptick in private capex and digitalisation.” Data released on Friday showed core CPI inflation fell to a 48-month low of 3.9% in December from 4.1% in November, while CPI inflation rose to a four month high of 5.69% from 5.55%.

In another development – Hyundai Motor India, the country’s second-largest carmaker, will invest Rs 7,000 crore in the inoperative General Motors plant located near Pune, Maharashtra deputy chief minister Devendra Fadnavis announced. Fadnavis met managing director and chief executive officer of Hyundai Motor India, Kim Unsoo along with the company’s executive director JW Ryu and other senior officials of the company on Saturday. This will be the first investment in vehicle capacity creation by the South Korea-based company outside Tamil Nadu. The General Motors plant had a capacity of 130,000 units per annum and was one of the two plants set up by the US-based carmaker in India.

Meanwhile, among the recommendations for the Interim Budget echoing through the halls of financial ministry is a proposal that could significantly impact the lives of salaried individuals – a potential expansion of house rent allowance deductions. HRA serves as a tool for salaried individuals residing in rented accommodations to mitigate their tax liabilities. The current formula for HRA deduction is the minimum of three criteria: (a) Actual HRA received by the employer or company; (b) 50% of basic salary + DA (40% for non-metros), or (c) actual rent paid minus 10% of salary. Currently, the definition of metro cities encompasses Delhi, Mumbai, Chennai, and Kolkata. However, anticipation surrounds the possibility to include urban hubs like Bengaluru, Pune, Hyderabad, and Ahmedabad.

In another news – India’s export of petroleum products to Europe has declined substantially in January so far owing to the rising tensions in the Red Sea, dropping to just 100 thousand barrel a day (kbd) from 350-400 thousand barrel a day in November and December. Many tankers have instead opted for the longer route via the Cape of Good Hope for the delivery which has resulted in increased shipping costs. The escalating threats to cargo vessels at the Red Sea has changed India’s export destinations of petroleum products as the country has started rapid supply more to East Asia and Africa now compared with its supplies to Europe.

Next up – The government is likely to set an agriculture credit target of Rs 22 trillion for the next financial year, up 10% from the current year’s target which may be overshot, sources said. Of the current year’s farm credit target of Rs 20 trillion, the commercial banks, cooperative banks, and regional rural banks have disbursed Rs 16.37 trillion, 81% of the target in the first three-quarters of FY24. In FY23, Rs 1.19 trillion of agriculture credit was towards allied sectors such as animal husbandry, dairy, poultry, and fisheries out of total disbursal of Rs 18.5 trillion. In the current fiscal a sub-target of Rs. 2.93 trillion of credit has been set for the animal husbandry sector.

Lately, let’s take a look at how the markets will perform today – GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a positive opening on Monday. GIFT Nifty traded up by 69 points or 0.31% at 22,044 indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex on Monday. Previously, on Friday, the NSE Nifty 50 gained 247.35 points or 1.14% to settle at 21,894.55, while the BSE Sensex ended higher by 847.27 points or 1.18% to 72,568.45. The Nifty index exhibited significant strength, securing a notable breakout on the daily chart as it surpassed the key resistance level of 21,800.