Today’s Latest Business News Transcript at 10:00 AM on 7 May 2024
Let’s begin. India’s households’ net financial savings plunged to a five-year low of Rs 14.2 trillion in FY23, sharply down from Rs 17.1 trillion in FY22, primarily owing to a sharp rise in short-term credit, data released by the statistics ministry showed on Monday. The fall could be attributed to “a lot more leveraged consumption and spending” due to greater and faster access to credit, economists said. As a percentage of GDP, however, the households’ net financial savings in FY23 was at 5.3%, the lowest in around five decades. Between FY12- FY22 (excluding FY21), the net financial savings hovered between 7-8%. The gross financial savings of households stood at Rs 29.7 trillion in FY23, while the financial liabilities stood at Rs 15.6 trillion.
Next up, industry. To the extent India’s PLIs are targeted at larger firms, rather than smaller, “inefficient” ones, these shouldn’t be equated with indiscriminate protection for domestic industry, Arvind Panagariya, chairman of the 16th Finance Commission, said on Monday. He, however, cautioned that if the incentives were made available to all sectors and everybody, with focus on import-substitution industries, it would amount to punishing competitive export industries. Pangariya said, quote, “If we use PLIs as tool for overall industrialisation, I think that’s a hard thing to do. The capital is limited… the whole industry or sectors you can’t expand by subsidising everybody. You have to ultimately rely on expansion of the industry into the global market place,” unquote.
Moving on. Godrej Consumer on Monday reported a surprise consolidated net loss of Rs 1,893 crore for the quarter ended March 31, 2024, versus a net profit of Rs 452.14 crore reported in the year-ago period. This was due to exceptional items to the tune of Rs 2,376 crore reported during the quarter. Bloomberg consensus estimates had pegged a net profit for the period at Rs 507 crore. The exceptional items included a loss on the sale of investment in Godrej East Africa Holdings of Rs 792.6 crore and an impairment provision for a diminution in the value of investment in Godrej Mauritius Africa Holdings of Rs 273.9 crore. The losses were incurred following changes in the business model and long-term strategy for Africa.
Bugged with spam calls asking for your vote? Well, the ongoing parliamentary elections may be the last one when political parties will be able to make such random calls, making a fervent pitch for their candidates, by sourcing your phone number from third party agencies. While the Digital Personal Data Protection law is in place, in the absence of supporting rules, the same has not been implemented so far. However, once the new government assumes office in June, the rules are expected to be finalised, which will put an end to such practices. At the most such calls will bug subscribers for the next few assembly elections, but not beyond that, officials said.
In some more industry news. Telecom operators – Bharti Airtel, Reliance Jio and Vodafone Idea, have submitted their applications for participating in the upcoming spectrum auction scheduled for June 6. The department of telecommunications has not received an application from any other company to participate in the auction, unlike the last spectrum auction when Adani Data Networks also participated in the auction. As per the notice inviting applications, May 6 was the last date for companies to submit their applications for participating in the auction. The mock auction will be held on June 3. Officials said, the applications submitted were on expected lines as no major bidding is expected during the auctions, and only spectrum which is up for renewal will be taken.
In other news, The government is planning to amend the Income Tax Act to comply with the FATF, that is the Financial Action Task Force, guidelines on beneficial ownership of trusts, a senior finance ministry official told FE. The official said that the FATF guidance is on finding the beneficial ownership of trusts. The idea is to put a structured burden on all the countries for meeting the beneficial ownership standards. There will be vetting of countries against these guidance in the fifth round of FATF evaluation next year. To comply with it, the Income Tax department in India has to bring out some changes.
Lastly, the stocks that are in focus today. These include Godrej Consumer, Lupin, Route Mobile, Wipro, Gujarat Gas, Bajaj FinServ, and Dr Reddy’s Lab among others. Lupin reported a 52% year-on-year increase in consolidated net profit for fourth quarter of FY24, reaching Rs 359.43 crore. Revenue also saw a significant uptick, rising by 13% to Rs 4,895.11 crore. Gujarat Gas reported an 11% increase in net profit to Rs 409.54 crore for the quarter ended March 31, up from Rs 369.22 crore in the same period last year. Sequentially, the profit surged by 85.9% from Rs 220.34 crore in the December quarter.