Business News at 10:00 am on 19th March, 2024

Let’s begin – Expenditure by state governments on asset creation may have risen more than a third on year in first ten months of the current financial year, compared with a 7% rise in the year-ago period. A review of the finances of 18 large states by FE showed that their capex in April-January this fiscal was up a solid 37% on year. This augurs well for overall public capex and the economy as a whole. It shows states have only only quickly reversed the slump in capital expenditure witnessed in FY21, but also have consolidated the trend. The development also bears out the notion that the withdrawal of GST compensation hasn’t dented the states’ revenues or spending power much.

Up next – A lack of clarity on the interchange fee structure, and lower adoption among smaller merchants has weighed on credit through unified payments interface volumes, say experts. While National Payments Corporation of India has not officially disclosed volumes for credit on UPI, industry experts acknowledge that the volumes have been negligible so far. “Since credit has associated cost, it is not free and a fee is levied on the merchants in the form of merchant discount rate for each transaction,” says Rohan Lakhaiyar, Partner, Grant Thornton Bharat. He added that since merchants are used to free UPI payments through bank account, the adoption on demand side of the payment flow is limited.

Moving on – The government is in the final stages of developing a dedicated policy to foster deep-tech startups, Rajesh Kumar Singh, secretary, department for promotion of industry and internal trade, said on Monday. Delivering inaugural address at the Startup Mahakumbh, he said inter-ministerial consultations are under way and the policy could be released soon. “What matters in startups is the ability to commercialise and develop intellectual property rights, it’s not enough to do innovation. Deep tech and extensive R&D are the answer to that. And for same, the government is in the process of creating a separate dedicated deep-tech startup policy,” he said. After the policy release, the government will work on releasing a dedicated fund for the sector.

Meanwhile – Most of the agricultural credit is used for boosting production, and more of these funds should be earmarked for investments in infrastructure creation, Shaji K V, chairman, National Bank for Agriculture and Rural Development said on Monday. “Almost 80% of our balance sheet is for the production credit, we need to reorient that to more investment credit,” Shaji told FE at the sidelines of ‘Startup Mahakumbh’ is being organised here. “We are not sure whether they (farmers) are actually using it for production as we are not tagging it with output sensor,” he said. Investment credits in agricultural sectors are those loans which are repaid over the 10-15 years.

Moving ahead – Among the consumer companies in India, beauty startups continue to be an interesting theme for all investors, Archana Jahagirdar, managing partner of Rukam Capital, told FE in an interaction. The early-stage venture capital firm has a Rs 150 crore fund for consumer startups and has recently launched a Rs 100 crore tech-focused fund. Besides beauty, Jahagirdar is bullish on consumer companies which are solving for gut health and pain management in India. “Medicine has only a certain answer to it, which are long-term problems people are dealing with. There are a lot of solutions, some of which are quasi-medical, some are anecdotal. Consumer should have the ability to choose the solution they are looking for,” she said.
“In other news – The cement demand is expected to decline in the fourth quarter as compared to the year-ago period due to slowdown in construction, extended winter and uncertainty over upcoming elections. Further, higher supply and intense competition would result in pricing pressure, which could affect sales volumes in Q4. Cement prices have already dwindled by Rs 2- Rs 4 per bag in January and `10-`12 per bag in February, much in contrast to the usual trend of price hikes during these months. Calendar year 2023 was the third consecutive year of growth, with the industry recording a 13% rise in demand at 433-435 million tonne.

Meanwhile – GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a negative opening on Tuesday. GIFT Nifty traded down by 39.50 points or 0.18% at 22,097 indicating a negative opening for domestic indices NSE Nifty 50 and BSE Sensex on Tuesday. Previously, on Monday, the NSE Nifty 50 ended up by 32.35 points or 0.15% to settle at 22,055.70, while the BSE Sensex gained 104.99 points or 0.14% to 72,748.42. The key stocks to watch in trade are L&T Finance, Aditya Birla Sun Life AMC, Adani Group, Tata Steel, Poonawalla Fincorp, HG Infra Engineering, IOL Chemicals and Pharmaceuticals among others.