Business News at 10:00 am on 9th February, 2024

Let’s begin, RBI on Thursday stoutly defended its January 31 action on Paytm Payments Bank by saying that the bank had compliance issues across various parameters, and not just KYC. RBI Governor Shaktikanta Das, at the post-monetary policy committee conference, said, “The regulations are there in place and are robust. It is not a case where there were regulatory deficiencies or regulatory corrections required. It is an issue of non-compliance with various parameters, not just KYC,” he said. RBI deputy governor Swaminathan J said RBI actions take place after ‘months and at times, years of bilateral engagement with the regulated entity where we not only point out the deficiencies but also provide enough time for them to take corrective actions’.

Up next, The Indian Railways has seen its passenger revenues grow 65% from Rs 44,283 crore in 2015-16 to an estimated Rs 73,000 crore in 2023-24, a growth rate that lagged nominal GDP growth, and the growth in competing segments like aviation revenues during the 9 years. The share of the passenger segment in the railways’ gross traffic revenues hovered in the range of 25-28% during the last decade, excluding the pandemic years when it understandably shrank to a trickle. Railways is expecting to earn Rs 106.67 per passenger in 2024-25, almost double the rate of Rs 54.62 in 2015-16. The number of railway passengers in FY24 is estimated at 6.8 billion, much lower than pre-pandemic period.
Moving on, The corporate income tax collections for the upcoming fiscal year FY25 might fall below the projected 13% outlined in the interim Budget, as government’s priority is on expediting the resolution of appeals and issuing refunds, a senior official told FE. “We may not achieve the 13% growth in corporate tax collections in FY25, as our focus is on bigger appeals. We want the bigger appeals to be decided fast, and issue refunds, wherever required,” the official said, asking not to be idenitified. “From this year (FY24), appeals have picked up.” According to reports, the count of appeals pending with the income tax department as of March 31, 2023, rose to 516,000 from 496,000 as of March 31, 2022.
“Meanwhile, The Reserve Bank of India on Thursday kept the repo rate unchanged for the sixth time in a row, banks may further increase their short-term fixed deposit rates to attract more money, as the loan growth has been robust and liquidity remains tight. Experts say there will be a clamour for short-term deposits, with the one-year rates nudging higher and longer-term rates possibly staying flat. Banks are increasingly focusing on mobilising retail deposits to meet their credit growth requirements, with several lenders raising rates even for deposits ranging from 200 to 300 days. Four banks ―Axis Bank, Punjab National Bank, HDFC Bank, and IndusInd Bank – have increased their short-term fixed deposit rates this month.

Moving ahead, State-owned ONGC is looking for partnership for the development of its explored rigs, the company’s Director Technical & Field Services, Om Prakash Singh said. “Our major experience is on drilling part. We are very comfortable on drilling. We are looking for a reputed partner for technology sharing,” Singh said on the sidelines of the India Energy Week. ONGC is engaging with numerous technology partners, including Schlumberger and Halliburton, to explore a tie up focusing on offshore rig development. “In exploration business and production business, now our cost is increasing,” Singh said. He added that ONGC aims to increase the operational efficiency by 20% and reduce its costs by the same percentage through these partnerships.

In other news,Nestle India expects a growth in demand for FMCG products this year on the back of government’s investment push and a more benign inflation. Speaking at a media roundtable on Thursday, chairman and managing director, Suresh Narayanan, however added that there are some stress points in the sector and the last festival season was not as buoyant as expected. “I think overall headline inflation is certainly down but food inflation continues to be choppy. If there is stability in some of the commodity prices then actually you might start seeing the uptick in consumption taking place,” He also hoped that as the general election approaches, there would be economic activities, which would give a fillip to demand.

Lastly, GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a negative opening on Friday. GIFT Nifty traded down by 36.50 points or 0.17% at 21,774.50 indicating a negative opening for domestic indices NSE Nifty 50 and BSE Sensex on Friday. Previously, on Thursday, the NSE Nifty 50 ended down by 212.55 points or 0.97% to settle at 21,717.95, while the BSE Sensex plunged by 723.57 points or 1% to 71,428.43. The key stocks to watch in trade are Reliance Industries, Bharti Airtel, Vodafone Idea, Zee Entertainment Enterprise, Bharat Heavy Electricals, TVS Motor and Cello World