Weekly News Roundup at 10:00 am on 17th February 2024

Let’s begin. Aided by interest-free loans from the Centre, capital expenditure by states jumped by 40% on year in the first nine months of the current financial year compared with a 7% rise in the year-ago period.These states — Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Bihar, Gujarat, West Bengal, Andhra Pradesh, Haryana, Karnataka, Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Assam, Uttarakhand, Telangana, Chattisgarh and Jharkhand — reported Rs 4.14-trillion investment in April-December 2024 against Rs 2.96 trillion a year ago. In April-December this year, the Centre provided around Rs 61,500 crore in long-term loans to these states for asset creation. In terms of quantum, UP was the biggest investor with Rs 68,993 crore in April-December 2024 compared with Rs 43,071 crore a year ago.

Meanwhile, India’s wholesale price index-based inflation came at 0.27 per cent for the month of January 2024 as against 0.73 per cent month-on-month, stated provisional data released by the Ministry of Commerce & Industry. Positive rate of inflation in January 2024, it added, is primarily due to increase in prices of food articles, machinery & equipment, other manufacturing, minerals, other transport equipment, etc. A Reuters poll had estimated the index would rise 0.53 per cent. The WPI inflation was at a nine-month high of 0.73 per cent in December 2023, and at 0.26 per cent in November 2023. The average WPI inflation for 2023-24 as a whole had remained in the deflationary zone at -1.1 per cent.

Moving on. Foreign brokerage CLSA sees foreign flows into India doubling to 1% of the GDP, from the 0.4% during 2014-22. In a note, CLSA analyst Indranil Sengupta says the rupee’s annual depreciation could be limited to 2.5% (compared to the annual 5% from 2010-20), thanks to Reserve Bank of India governor Shaktikanta Das shoring up forex reserves to an adequate level of $600 billion. Equity FPI flows averaged 1.2% of GDP in 2004-08, as a high 14-month import cover strengthened the rupee. As forex reserves came off to 7 months in FY12-14, an 11% depreciation in the rupee pulled down equity FPI flows to 0.2% of GDP between FY15-23.

Over to industry. The Tata Group’s Rs 25,000-crore semiconductor packaging plant in Assam, may soon get government’s approval, making it the first domestic firm to set up a chip plant in the country following the government’s Rs 76,000-crore incentive scheme for the sector. Once approved, it will be the second big semiconductor project to get approval after the $2.75 billion Micron’s assembly, testing, marking, and packaging project. Minister of state for electronics and IT, Rajeev Chandrasekhar said on Thursday that the Group’s approval is in the final stages of evaluation after which it would be sent to the Cabinet for final clearance. The Group, under Tata Electronics, had in December submitted an application to set up an Outsourced Semiconductor Assembly and Test facility in Assam.

In some more industry news, Airtel Payments Bank has seen a significant surge in new customers applying online for various services, including bank account openings and FASTags, over the past few days, managing director and chief executive officer Anubrata Biswas told FE. Biswas’ comments came in the backdrop of the Reserve Bank of India’s action against Paytm Payments Bank on January 31, when the regulator directed it to stop offering fresh deposits, credit and top-ups in FasTag accounts after February 29. Biswas said quote, “We are seeing, over the last few weeks and days, a significant uptick in customers applying to us. Online applications for our digital products, including savings account and FASTags, have grown five times each,” unquote.

Over to technology. Redmi A3, the new entry-level smartphone from the house of Xiaomi, has officially launched in India this week. It maybe a budget phone, but it doesn’t quite look like it. Rather, it looks way more premium than what its price tag will have you believe. The spec-sheet, too, is good enough especially for a phone that costs less than Rs 7,500. Successor to the Redmi A2, the Redmi A3 introduces a brand-new “halo” design with a rounded camera assembly somewhat reminiscent of Xiaomi’s pricier ultra flagship phones. You can get it in a choice of three colours — olive green, midnight black, and lake blue. Xiaomi says the last two are made of glass while the first uses fake leather.

Lastly, the automobile sector. Honda Cars India has announced the launch of its official merchandise ‘Honda Collection’. The Honda Collection features a diverse range of merchandise, from T-shirts, Jackets and caps. Commenting on the launch of the merchandise, Yuichi Murata, Director of Marketing and Sales at Honda Cars India Ltd, said, quote, “The Honda Collection embodies our commitment to providing our discerning customers with the ultimate expression of style and sophistication. Each item in this collection reflects the ethos of the Honda Brand, allowing enthusiasts to embrace Honda in every aspect of their lives,” unquote.

Moving forward – 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.

Up next – The Parliamentary Standing Committee on communications and information technology has expressed concern over a significant increase in television channel pricing by broadcasters and recommended more freedom of choice to consumers for selecting individual TV channels. In its 56th report on the regulation of cable television in India, the committee said that the central concern within the purview of cable TV regulations pertains to prevalent practice of broadcasters implementing substantial discounts in pricing channel bouquets. Besides, pricing of a-la-carte channels, which are outside of the bouquet, continue to see increase in prices by broadcasters, the committee said. The observations have come after the implementation of the new tariff order, which came into effect from February 1, 2023

The government on Wednesday informed that the number of Vande Bharat trains has been boosted to 82, with efforts underway to enhance their speed to 160 kilometres per hour on the New Delhi-Mumbai and New Delhi-Howrah routes. Railway Minister Ashwini Vaishnaw, in a written response to queries from 10 MPs in the Lok Sabha regarding Vande Bharat train services, stated, “As of January 31, 2024, there are 82 Vande Bharat train services operational throughout the Indian Railways, linking states with a Broad Gauge electrified network. He further mentioned, “Additionally, the provision for halting train services and the introduction of new train services, including Vande Bharat, are continual processes on the Indian Railways, contingent upon traffic demand, resource availability, etc.”

Meanwhile, Railway stocks, including Rail Vikas Nigam Ltd, Ircon International Ltd, Indian Railway Finance Corporation Ltd, Titagarh Rail Systems Ltd, and Texmaco Rail & Engineering Ltd, are expected to experience significant gains following the recent Budget 2024 announcements made by Union Finance Minister Nirmala Sitharaman. During her interim budget presentation on February 1, Sitharaman unveiled plans to convert approximately 40,000 rail bogies to Vande Bharat standards, signaling potential benefits for the mentioned railway companies. A substantial capital expenditure of Rs 2.55 lakh crore has been allocated for the Indian Railways in the new financial year. The Finance Minister highlighted the conversion of 40,000 normal rail bogies to Vande Bharat standards as a measure to enhance passenger comfort, convenience, and safety.

Moving on, Sonalika Tractors, which is one of the leading tractor manufacturers in the country has launched its newest range of ‘Tiger’ advanced heavy-duty tractors in the 40 – 75 HP segment. It has unveiled 10 new products, which it says have been ‘designed in Europe’ with 5 new engines options including widest range of 5 different multi-speed transmissions to handle different operations and 3 different advanced & intelligent 5G hydraulics giving a choice of over 140 auto settings. The company says the perfect combination of heavy-duty engines will deliver the most optimum performance for farmers as it also offers zero RPM drop resulting in the best-in-class fuel efficiency.

Lastly, 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, 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.