Business News at 10:00 am on 1st February, 2024

The interim Budget to be presented in Parliament today will have some “guiding points” for the country’s economic growth trajectory, Prime Minister Narendra Modi said on Wednesday, adding that the “journey of inclusive development” would continue. Sounding optimistic about the return of his government to present a full budget in July, Modi said, “I am confident that the country is consistently progressing, reaching new heights of development, and undergoing comprehensive and all-encompassing growth. A journey of inclusive development is under way. I hope this trajectory continues with the blessings of the public.” Many analysts including rating agency Fitch expect the ruling dispensation to return to power for a third term after the general election in April-May.

Moving on – Finance Minister Nirmala Sitharaman will present the interim Budget 2024 in Parliament today. We explain what the interim Budget is, and how it differs from a general Budget, along with a brief glossary of the Budget heads of the financial accounts of the government. An interim budget is presented ahead of the general election, when the incumbent government needs Parliament’s approval to draw money from the Consolidated Fund, for a new financial year that runs beyond its term. This approval will be valid for the period till a new government takes charge and presents the Budget for the full year. To be sure, a Vote on Account is obtained through an Appropriation Bill for the period concerned.
“Next up – India’s fourth largest IT firm, Wipro, has started downsizing its mid-level staff to improve its margins, which is the lowest among the top four IT services companies. The process will see hundreds of people losing their jobs, sources said. Mostly employees who are likely to be laid off are in non-billable sections. There are also some in the billable sections whose role can be automated. Sources said that Wipro’s move to downsize headcount is part of a “Left-Shift” strategy. Herein the work of a level 3 employee is shifted to a level 2 employee, who is given appropriate tools. A level 1 employee does the level 2 work, and the work of level 1 employee is automated.

In other news – The gross Goods and Services Tax collections in January came in at Rs 1.72 trillion, the second-highest monthly mop-up ever since the inception of the regime in July FY17, the finance ministry said on Wednesday. The January mop-up, largely about December transactions, is up 10.4% on the year, but could be revised upwards, sources said. January marks the third month in the current financial year when the gross collections crossed the Rs 1.70 trillion mark. The highest GST collection of Rs 1.87 trillion was recorded in April 2023. Meanwhile, Corporate tax mop-up during April-December came in at Rs 7.2 trillion, up 18.7% on year.

Meanwhile, India’s export of petroleum products fell to a 15-month low at 1.02 million barrels a day in January as the escalating tensions over the Red Sea prompted exporters to hold back shipments last month, data from data intelligence firm Kpler showed. January export volumes were the lowest since October 2022, when the country’s export of refined oil products stood at around 887,000 barrels a day, it added. Moreover, India’s shipments to Europe declined in January as many tankers had opted for the longer route via the Cape of Good Hope for the delivery, resulting in higher shipping costs. Africa’s Cape of Good Hope shipping route can extend voyages for up to 14 days or beyond.

Moving ahead, the eight core industries’ output growth eased to a 14-month low of 3.8% in December from 7.9% in November, on account of the statistical effect of a high base, data released by the commerce ministry showed on Wednesday. In December 2022, the core sector’s output had grown 8.3%. On a month-on-month basis, the core sector’s output rose 5.9% in December, slightly higher than the 5.8% sequential growth recorded between the two months in the last 12 years. Among the eight sectors, the output growth of six eased from the levels recorded in November, but that was due to a high base as sequentially, all the sectors witnessed an increase in production during December.

Lastly, GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a lackluster opening on Thursday when the Interim Budget 2024 will be announced. GIFT Nifty traded up by just 2 points or 0.01% at 21,789 indicating a lackluster opening for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Previously, on Wednesday, the NSE Nifty 50 gained 203.60 points or 0.95% to settle at 21,725.70, while the BSE Sensex surged by 612.21 points or 0.86% to 71,752.11. Key stocks to watch in trade are Paytm, UltraTech Cement, Infosys, Paras Defence and Space Technologies, Havells India and Aether Industries among others.