The most important news of the week of Expresso Business and Finance from June 22, 2024

Expresso business and financial news The most important events of the week of June 22, 2024. Transcript

Let’s get started – the government is modernizing manufacturing-linked incentives, relaxing norms on the release of funds, adding more sectors to the program’s scope and extending benefits to small and medium-sized enterprises in many labor-intensive sectors through special carve-outs. The restructuring will also include incentives for research and development to create a manufacturing ecosystem, even if the overall program budget is not cut, official sources said. Although the program was launched over three years ago and covers as many as 14 sectors, only about 5% of the funds allocated for it have been paid so far. According to sources, the government has just started accepting applications for activation of incentives on a quarterly basis.

Up next – According to National Bank of India, customers of mid-sized universal banks including RBL Bank, India Post Payments Bank, Punjab & Sind Bank, Bandhan Bank and Central Bank of India saw higher transaction failure rates under Unified last year Payments Interface. Payments Corporation of India data. According to the data, on the reporting banks side, Baroda UP Gramin Bank had the highest technical default rate, averaging 16% during May 2023 to April 2024, followed by RBL Bank, Andhra Pragathi Grameena Bank and IPPB on level of 5.3%. 4.9% and 4.47% respectively. On the beneficiary bank side, Baroda UP Gramin Bank again topped the list with a TD rate of 12%.

Moving on, Bharti Airtel bought about 1% stake in Indus Towers, acquiring about 26.95 million shares, thus increasing its stake to 48.95% from 47.95% held earlier. The shares were acquired by Bharti after Britain’s Vodafone Plc sold an 18% stake in the tower company for €1.7 billion. The shares were sold at Rs 310-341. Britain’s Vodafone, which owns a 21.5% stake in the tower company, initially planned to sell a 10% stake, but strong demand from investors caused sales volume to almost double, sources said. After the transaction, Vodafone’s share dropped to 3.1%. The company will use most of the proceeds to repay 1.8 billion euros of outstanding bank loans raised against Vodafone’s assets in India.

In its next release, Fitch Ratings has raised India’s GDP growth projection for the current financial year to 7.2% from the earlier estimate of 7%, mainly on the assumption of a revival in consumer spending. In its June “Global Economic Outlook” report, the global ratings agency said investment will continue to grow but “slower” than in the final quarters of FY25, while consumer spending will “recover amid elevated consumer confidence.” Fitch’s growth forecast is in line with the Reserve Bank of India’s forecast of 7.2% for the current fiscal and well above the International Monetary Fund’s forecast of 6.8%. Most economists, however, expect growth to be below 7% in FY25.

Meanwhile – Fast-growing consumer goods companies hope that the upcoming budget will improve the purchasing power of rural consumers as companies expect a faster recovery in the market. Market researcher NielsenIQ said that in January-March this year, rural growth outpaced urban growth for the first time in five quarters. Companies hope this pace will pick up thanks to a consumption-friendly budget and good monsoons likely. CII has proposed initiatives such as industry involvement in the National Rural Life Mission and creation of rural industrial parks to boost development. It suggests that the Center encourages states to reduce stamp duty on land transfer to 3-5% to reduce the cost of business acquisition.

In other news – Just over a decade ago, Nykaa disrupted the beauty space by creating a specialized platform in a segment where none existed. But now that shine is fading and the competition is quickly catching up. Reliance Retail-owned Tira has raised the competitive heat in India’s $19-20 billion cosmetics and personal care (BPC) market over the past year, along with players such as Tata Cliq Palette, Myntra and Shoppers Stop. Bengaluru-based Redseer Strategy Consultants estimates that India’s BPC market will reach $30 billion by 2027, accounting for about 5% of the global opportunity, as Indian consumers look to look and feel good with organized beauty products, both domestic and internationally.

And finally – Since bilateral consultations with the EU held earlier this month failed to resolve the confusion surrounding the extension of safeguard tariffs on steel exports, India has “reserved the right” to retaliate equally by imposing additional tariffs on imports from the bloc 27 countries . The EU has extended safeguard tariffs on steel imports, which expire this month, for another two years until 2026. This is the second extension of tariff quota protections, which were first imposed in 2018. With the latest extension, the protection would last for eight years. Under WTO rules, no other safeguard measure could then be introduced for these categories of steel products for another eight years.