Month: January 2022

Abatement of pandemic to kick in virtuous investment cycle, generate jobs: Chief Economic Advisor

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Pinning hopes on rapid vaccination drive, newly appointed Chief Economic Advisor (CEA) V Anantha Nageswaran on Monday said abatement of the COVID-19 pandemic would kick in virtuous cycle investment leading to job creation.

The government has taken various steps to support lower-income categories, he said in an interaction with the media on the Survey tabled in Parliament by Finance Minister Nirmala Sitharaman earlier in the day.

Naturally, he said, it will take time to regain confidence because the slowdown in consumption spending is not only a function of the lack of income growth, but also because of the uncertainty caused by the pandemic and health impact etc.

Also Read: Economic Survey 2021-22 warns India needs to be wary of imported inflation

“So once the pandemic cloud itself is lifted, and many of the contact services come back into their pre-pandemic level…we hope that along with the various measures that the government has taken and private sector capex also kicking in, we will go into a virtuous circle of income generation and employment generation,” he said.

He said the construction sector is beginning to revive and that’s one of the highest employers in the country. Nageswaran expressed hope the consumption share of GDP which is about 97 percent, compared to the pre-pandemic level, especially in the second half of the new financial year, should come back into stream assuming that the subsequent impacts of pandemic turns out to be “milder and milder”.

“The government has pursued the four-pronged approach — the short term support to the economy especially to the vulnerable section during these uncertain times, while keeping a firm eye on the fiscal stability. At the same time, never to let go the opportunity that a crisis provides to initiate structural and supply-side reforms. The government has undertaken several measures as well,” he said.

Also Read: Economic Survey 2021-22: Air India sale to boost privatisation; need to encourage private participation across sectors

There’s been considerable attention and emphasis on process reforms as well, he said, adding, so these are the four pillars of the government’s approach in dealing with the pandemic and also to prepare the economy for a post- pandemic world. Asked about inflation, Principal Economic Adviser Sanjeev Sanyal said CPI has been in the tolerance zone.

Overall, Sanyal said macro-economic stability indicators suggest that the Indian economy is well placed to take on the challenges of 2022-23. The last two years have been particularly challenging for policy-making around the world with repeated waves from a mutating virus, travel restrictions, supply-chain disruptions and, more recently, global inflation.

“Faced with all this uncertainty, the Government of India opted for a ‘Barbell Strategy’ that combined a bouquet of safety-nets to cushion the impact on vulnerable sections of society/business, with a flexible policy response based on a Bayesian updating of information,” he said.

Also Read: Economic Survey terms infrastructure as backbone of economy; says 13,327 km National Highways/roads constructed in 2020-21

As explained in last year’s Economic Survey, he said this is a common strategy used in financial markets to deal with extreme uncertainty by combining two seemingly disparate legs.

As some readers will have guessed, the iterative leg of this strategy is the same as the “Agile” approach that uses feedback-loops, and real-time adjustment, he said, adding, the Agile approach is a well-established intellectual framework that is increasingly used in fields like project management and technology development.

In an uncertain environment, the Agile framework responds by assessing outcomes in short iterations and constantly adjusting incrementally, he said.

“It is important here to distinguish Agile from the Waterfall framework which has been the conventional method for framing policy in India and most of the world. The Waterfall approach entails a detailed, initial assessment of the problem followed by a rigid upfront plan for implementation. This methodology works on the premise that all requirements can be understood at the beginning and therefore pre-commits to a certain path of action,” he said.

This is the thinking reflected in five-year economic plans and rigid urban master plans, he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Eco Survey 2022: Telecom reforms to spur liquidity, create enabling environment for 5G investments

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The telecom sector reforms are poised to boost 4G proliferation, infuse liquidity and create an enabling environment for investment into 5G networks, according to Economic Survey 2021-22. In the wake of “outstanding performance” of the telecom sector in meeting COVID-19 challenges and with a huge surge in data consumption due to online education and work from home, the reform measures will bolster proliferation and penetration of broadband and telecom connectivity, said the Economic Survey tabled in Parliament on Monday.

In addition to telecom infrastructure expansion, a slew of measures have been taken to bring about reforms, the survey said, outlining the structural and procedural reforms undertaken in the Indian telecom sector that represents the world’s second-largest telecommunication market. “The reforms are also expected to boost 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks,” it added.

A strong and responsive regulatory framework has kept service access at reasonable prices, with the government taking further measures to ensure fair competition among service providers with the view to benefit the consumers. Telecom is among the most powerful sectors impacting the social and economic development of a country, the survey said observing that the relevance of the sector has “increased immensely”.

Also Read | Economic Survey 2022: Indian aviation on path to gradual recovery; international tourism uncertain

The same is reflected in key metrics, such as growth in total telephone subscriber base, steady increase in internet subscribers, and broadband connections. In the last few years, the telecom sector in India has become data-driven following reducing costs of data due to the fierce competition in the sector. This has boosted data usage further. A case in point is the average wireless data usage in a gigabyte (GB) per data user per month that has increased “tremendously” to a whopping 14.1 GB per month in Q1 FY22, from just 1.24 GB per month in Q1 FY18.

The number of mobile towers has risen substantially to reach levels of 6.93 lakhs towers in December 2021, “reflecting that the telecom operators have well realised the potential in the sector and seized the opportunity to build up an infrastructure that will be fundamental in boosting the government’s Digital India campaign”.

Listing out the progress on the connectivity front, it said that under the flagship BharatNet project, 5.46 lakh km optical fibre cable has been laid, a total of 1.73 lakh Gram Panchayats (GP) have been connected by Optical Fiber Cable (OFC) and 1.59 lakh Gram Panchayats are service-ready on OFC, as of September 27, 2021.

A boost to the telecom infrastructure is also being given under the aspirational district scheme while thrust on the provision of submarine optical fibre cable infrastructure will spur high-speed internet and broadband connectivity.

Read more from CNBC-TV18’s budget coverage here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2022: When and where to watch Finance Minister Nirmala Sitharaman’s speech live

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance Minister Nirmala Sitharaman will present the Union Budget 2022 at 11 am on February 1, 2022 in Parliament. This will be her fourth budget presentation. The FM will be presenting a paperless budget this year as well, after she ditched the traditional ‘Bahi Khata’ that she had carried along with her in previous budgets. She had carried a Made in India tablet to present her budget last year, amid the COVID-19 pandemic.

Catch all the latest updates on the 2022-23 Union Budget here.

When and where to watch Finance Minister Nirmala Sitharaman’s Budget Speech LIVE?

The Budget 2022 will be presented on February 1 at 11 am. It will be telecast live on Lok Sabha TV (Sansad TV) the official parliament channel and on Doordarshan. You can click here to watch the Budget Speech LIVE on CNBCTV18.com at 11 am. The speech can be viewed on Twitter and YouTube as well.

The 2022-23 Union Budget session of Parliament commenced on January 31 with President Ram Nath Kovind’s address to both Houses. Following the president’s speech, Sitharaman tabled the Economic Survey 2021-22 in Parliament. The survey has forecast an 8% to 8.5% economic growth for the FY22-23.

Brief history of India’s Union Budget

The first budget in Independent India was presented by then Finance Minister RK Shanmukham Chetty on November 26, 1947. Since then, there have been 73 annual budgets, 14 interim budgets and four special or mini budgets.

Even as Budget speeches last for close to the two hours, Sitharaman has delivered lengthy speeches so far. In 2020, she spoke for 2.40 hours. Although her speech commenced at 11 am, she ended it around 1:40 pm, despite a few pages remaining as the speech was incomplete. She had broken her own 2019 record of making India’s longest Budget speech.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2022: Liquidity and demand boosting sops critical for hospitality sector

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hospitality remains one of the worst-hit sectors from the COVID19 pandemic. The industry has been affected by the pandemic-related lockdowns/restrictions on mobility by various states and increased wariness to travel due to fear of infection contagion. With steep drop in demand, discounts in room rates was inevitable and RevPARs for 9M FY2022 were at a 50-55 percent discount to pre-COVID levels, despite the faster-than-expected ramp up post COVID 2.0 in Q2 and Q3 FY2022.

The ongoing Omicron wave has dampened industry sentiments again. With a sharp rise in infections in the last few weeks and several states imposing partial lockdowns, hoteliers are witnessing cancellations in bookings and the enquiries for the next few weeks have come down.

High capital intensity and relatively high fixed costs lead to a significant contraction in profits and cash flows during downcycles. The hotel industry reported operating losses in FY2021 and is expected to report cash losses in FY2022 as well. Given that the travel and tourism industry accounted for 6.9 percent of the Indian gross domestic production (GDP) and for about 8.8 percent of employment in the country in CY2019 (Source: World Travel and Tourism Council) pre-pandemic, its importance to the economy cannot be neglected.

The industry has been a key beneficiary of the RBI moratorium and the ECLGS scheme provided as part of the pandemic relief since March 2020. Various state governments have also provided waivers in property taxes, electricity demand charges waivers and industry status, in addition to this. However, the sector did not receive any major sops in the Union Budget 2021-22, although indirect benefits from increasing vaccination pace, infrastructure development and economic revival benefitted hotels.

Increase in moratorium for the ECLGS loans taken (considering that repayment of ECLGS 1.0 and 2.0 loans have commenced already), a special resolution framework for restructuring of loans or a stimulus package would come as an instant relief for the smaller hotels, given the limited liquidity buffer currently.

Lenders are cautious as far as this sector is concerned, and incremental external funding is largely expected to be based on promoter comfort. Softer interest rates, longer repayment tenor or easier access to funds by making hospitality a priority sector from a lending perspective would also be beneficial. Reducing property taxes/license fees, waivers in operational costs and tax holidays will directly add to accruals.

We expect announcements to boost consumption/spending and significant spend on safety and health in the upcoming budget. The hotel sector will be an indirect beneficiary of this improved optimism. Given that road travel has witnessed sharp increase in the last one year, infrastructure and connectivity improvement measures will impact hotel demand positively.

From an international traveller’s perspective, reduction in GST rates can make room rates competitive to other overseas destinations. While recovery in foreign tourist arrivals is still a few quarters away, this could help the industry capitalise on international demand as soon as it starts picking up.

Infrastructure status is available to hotel projects of over Rs 200 crore currently. However, smaller hotel projects do not enjoy the benefits. An infrastructure status will give hotels benefits of lower taxation, electricity rates and simplified approval process for projects, apart from a favourable repayment structure.

Further, given the number of approvals required for new hotels, single window clearance for hotel projects will improve operational ease and reduce delays in hotel commencement for new hotels.

Overall, we believe that liquidity-boosting measures, if any, will benefit the sector in the immediate term, but proactive demand improvement and expense waivers will come a long way in reviving the COVID-battered sector.

The author Vinutaa S is an Assistant Vice President & Sector Head – Corporate Ratings at ICRA Limited. Views expressed are personal.

Read more from CNBC-TV18’s budget coverage here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

EV revolution good news for environment, but will cost govt in short term

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Across the globe, there is a perceptible shift from petrol/diesel-powered vehicles towards those which run on electricity. EVs are in a minority at the moment, but all indications that they will be rubbing shoulders with their internal combustion engine counterparts before long.

This is good news when seen from the perspective of meeting lower carbon emission targets, but in the short term it spells bad news for the government’s tax revenues if demand for petroleum products drops.

1. FAME II subsidy

The government has approved Phase-II of the FAME Scheme with an outlay of Rs 10,000 crore for a period of 3 years commencing from 1st April 2019. In all probability could get extended beyond April 2022 as this stipulated Rs 10,000 crore has not yet been exhausted.

Also Read | Explained: Why EV fires are rare but more dangerous

2. How much does petroleum products contribute to State and Centre Taxes?

a. Centre taxes from petroleum products was between 14 percent and 20 percent of total gross tax revenue
In FY20, it was Rs 2,87,500 crore which was 14.3 percent of the total gross tax revenue of the Centre
In FY21, it was Rs 4,19,800 crore which was 20.7 percent of the total gross tax revenue of Centre

b. State taxes from petroleum products was approximate 11 percent of total gross tax revenue
In FY20, it was at Rs.2,07,800 crore which was 11.1 percent of the total tax revenue of states
In FY21, it was Rs 2,09,100 crore, which was 11.4 percent of the total tax revenue of states

Also Read | 100 EVs can be charged at one time at India’s largest facility in Gurugram

3. Government owns a majority stake in BPCL, HPCL, IOC, ONGC and OIL and the shift to EVs will affect volume sales of these companies and thereby prospects of some of the divestments that have been lined up

Company            GOI stake
BPCL                     52.98
HPCL                     54.90
IOC                         51.50
ONGC                    60.41
OIL India              56.66

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Indian economy contracts by 6.6% in 2020-21: NSO data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian economy contracted by 6.6 percent in 2020-21 as against the earlier estimate of 7.3 percent decline, showing that the COVID-19 pandemic hit economy did not perform as badly as was initially worked out.

As per the provisional estimates released in May 2021, the GDP had contracted by 7.3 percent during 2020-21 on account of the outbreak of COVID-19 and subsequent nationwide lockdown to contain the pandemic.

The National Statistical Office has also revised downward the real GDP growth number for 2019-20 to 3.7 percent as against the earlier estimate of 4 percent. “Real GDP or GDP at constant (2011-12) prices for the years 2020-21 and 2019-20 stands at Rs 135.58 lakh crore and Rs 145.16 lakh crore, respectively, showing a contraction of 6.6 percent during 2020-21 as compared to growth of 3.7 percent during 2019-20,” National Statistical Office said in the revised national account data released on Monday.

Also Read: Economic Survey 2021-22 forecasts GDP growth for FY23 at 8-8.5%

Under the first revision released in January 2021, real GDP or GDP at constant (2011-12) prices for the years 2019-20 was pegged at Rs 145.69 lakh crore, showing growth of 4 percent during 2019-20. “In terms of real GVA (gross value added), i.e., GVA at constant (2011-12) basic prices, there has been a contraction of 4.8 percent in 2020-21, as against growth of 3.8 percent in 2019-20,” NSO stated.

Also Read: Economic Survey: Sanjeev Sanyal says contact-based services hit hard by COVID, needs free road to grow

During 2020-21, the growth rates of the primary sector (comprising agriculture, forestry, fishing and mining & quarrying), secondary sector (comprising manufacturing, electricity, gas, water supply & other utility services, and construction) and tertiary sector (services) have been estimated as 1.6 percent, (-) 2.8 percent and (-) 7.8 percent as against a growth of 1.9 percent, (-) 6.8 percent and (-) 8.4 percent, respectively, in the previous year. Nominal Net National Income (NNI) or NNI at current prices for the year 2020-21 stands at Rs 171.94 lakh crore as against Rs 177.17 lakh crore in 2019-20, showing a contraction of 2.9 percent during 2020-21 as against growth of 6 percent in the previous year, it stated.

Also Read: Budget 2022: A few bold steps needed on Tax amendments towards ‘Ease of doing Business’

Per Capita Income i.e. Per Capita Net National Income at current prices is estimated at Rs 1,32,115 and Rs 1,26,855 respectively for the years 2019-20 and 2020-21, it stated.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2022 | Economic Survey pegs FY23 GDP growth at 8-8.5%; fintechs call for relaxed tax norms, digital infra boost and more

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Just one day to go for Nirmala Sitharaman to make the Budget 2022 speech and for the country to find out what the government has decided for each industry for FY23 and how the reforms will impact the common man.

In this edition of Budget Podcast, CNBCTV18.com’s Kanishka Sarkar will not only share what various sectors are expecting from tomorrow’s announcement but also about the Economic Survey 2021-2022 tabled by Union Finance Minister Nirmala Sitharaman in Parliament on Monday

The survey has projected India’s growth for the financial year 2023 at 8-8.5 percent whereas the FY22 GDP growth is seen at 9.2 percent.

It survey states the economy is in a good position to see this growth with the COVID-19 vaccination programme having covered the bulk of the population, economic momentum building back, and the likely long-term benefits of supply-side reforms that are in the pipeline. However, the economy needs to remain wary of imported inflation, the survey flagged.

India’s Consumer Price Index inflation stood at 5.6 percent YoY in December 2021, which is within the targeted tolerance band. Wholesale price inflation, however, has been running in double-digits.

Though the high WPI inflation is partly due to base effects, which will even out, India must remain cautious against imported inflation, especially from elevated global energy prices, it said.

In an exclusive interview with CNBC-TV18, Niti Aayog Vice-Chairman Rajiv Kumar said the 8-8.85 percent GDP growth forecast seemed “just about right” and that he expects investment in the private sector to take off. He added that exports, domestic investment, and consumption will all drive growth towards the target estimate.

While many sectors are looking for reforms in the GST levied on several products and services, MS Mani, Partner- GST, Deloitte India has highlighted that the Budget only provides directional clarity and that the future reform in GST is something which people should wait and watch carefully.

According to Akash Sinha, founder and CEO of CashFree Payments, if there’s one thing we know from the PM’s call for a fintech revolution, financial inclusion and empowerment along with digitalisation will rule the roost this Union Budget. He says the govt must consider relaxing tax norms and infusing funds. It should also focus on creating an active banking population.

Tune in to the Budget 2022 Podcast for more

In case you have any queries or suggestions, please write to us at cnbctv18podcast@nw18.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Supreme Court to pronounce judgment on Future Group plea today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Supreme Court is scheduled to pronounce on Tuesday (February 1) its judgment on a batch of pleas filed by Future Group firms against a Delhi High Court order declining stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the Singapore International Arbitration Centre (SIAC).

The Chief Justice N V Ramana-led SC bench is expected to pronounce its judgment at 10:30 am on Tuesday.

The apex court has been hearing pleas including the fresh petition of Future Group against the Delhi High Court’s recent order declining its plea for stay on an arbitration tribunal decision refusing to interfere with the SIAC’s EA, which restrained it from going ahead with the Rs 24,731 crore merger deal with Reliance Retail.

Also Read: Depositors may file petition in SC challenging terms of PMC Bank-Unity Small Finance Bank merger

The SIAC, in the EA, had granted relief to US e-commerce major Amazon by restraining the Future from going ahead with the Rs 24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail. Amazon had dragged Future Group to arbitration at SIAC in October last year, arguing that FRL had violated their contract by entering into the deal with rival Reliance Retail.

On October 21 last year, a duly-constituted panel of arbitrators at the SIAC reiterated the EA’s decision. On October 29, 2021, the Delhi High Court declined Future Group’s plea for a stay on the arbitration tribunal.

The high court sought a response from Amazon which had challenged the merger before the SIAC and listed the appeals by Future Coupons Private Ltd
(FCPL) and FRL for further hearing on January 4, 2022. FRL and FCPL moved the top court recently against the order with fresh pleas.

Also Read: Noida twin towers: SC deadline for Supertech to refund money to homebuyers ends today; details here

Kishore Biyani and 15 others including FRL and FCPL have been embroiled in a series of litigations with Amazon, an investor in FCPL, over the deal with Reliance. Following the EA, subsequently, a three-member arbitral tribunal was constituted to decide the issues arising from the deal.

On September 9, last year, the apex court had stayed for four weeks all proceedings before the high court in relation to the implementation of the EA and also directed statutory authorities like National Company Law Tribunal (NCLT), Competition Commission of India (CCI) and Securities and Exchange Board of India (Sebi) not to pass any final order related to the merger deal in the meantime.

Subsequently, the arbitration tribunal under the SIAC rejected on October 21, last year, the FRL plea to lift the interim stay granted by its EA on October 25, 2020, observing that “the Award was correctly granted”.

Also Read: Rs 2,300 crore cheating case: Former Religare CMD Sunil Godhwani denied bail

The FRL and FCPL had moved the top court against the high court order of August 17, 2021, which said that it would implement the earlier order by its single-judge restraining FRL from going ahead with the deal in pursuance of the EA’s award. The high court had said that in the absence of a stay, it would have to enforce the order passed by its single judge, Justice J R Midha, on March 18, 2021.

On March 18, besides restraining FRL from going ahead with its deal with Reliance Retail, the court had imposed costs of Rs 20 lakh on the Future Group and others associated with it and ordered attachment of their properties.

On August 6, last year, the Supreme Court gave the verdict in favour of Amazon and held that EA award, restraining the Rs 24,731 crore FRL-Reliance Retail merger deal, is valid and enforceable under Indian arbitration laws.

The apex court had also set aside the two orders of February 8 and March 22, 2021, of the division bench of the Delhi High Court order which had lifted the single judge’s orders staying the FRL-RRL merger.

A bench headed by Justice R F Nariman, since retired, had dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

EC eases COVID norms for public meets, door-to-door campaigns; roadshow ban to stay till Feb 11

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Election Commission (EC) on January 31 eased some of the COVID-19 restrictions in the five poll-bound states of Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh. While the ban on roadshows, padyatras, vehicle rallies and processions will continue till February 11, the norms for door-to-door campaigning and physical public meetings for all phases have been relaxed.

Among the new set of relaxations, the number of people allowed for door-to-door campaigning has been raised from 10 people to 20, excluding security personnel, while a maximum of 1,000 people can attend physical public meetings.

Also read: Uttar Pradesh: A look at the poll-bound state and it’s overall condition

The poll panel also allowed a maximum of 500 persons to attend indoor meetings from the present 300. It said during a virtual review meeting, all state chief secretaries informed the EC about reports of COVID infections either plateauing out or tapering as on date. They also said the positivity rate is coming down and hospitalisation numbers are also registering a declining trend. 

“The state officers, however, said that COVID protocol precautions need to be continued to be observed so that no undue spurt takes place due to intense public contact because of heightened political activity,” the Election Commission said in a statement.

Also read: Akhilesh Yadav to file nomination from Karhal; says 2022 Uttar Pradesh polls to write history of next century

Inputs from the Union Health Secretary were also taken. The EC said after a comprehensive review of the present COVID situation in the poll-bound states of Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh, it has been decided that no roadshows, padyatras, and cycle, bike or vehicle rallies and processions will be allowed till February 11.

The Commission also decided to allow physical public meetings of political parties or contesting candidates in designated open spaces with a maximum of 1,000 people, instead of existing 500 people, or 50 percent of the capacity of the ground, or the prescribed limit set by state disaster management authorities, whichever number is lesser, from February 1 “for all phases.”

While Uttar Pradesh will have polls in seven phases between February 10 and March 7, Manipur will have polls in two phases on February 27 and March 3. Uttarakhand and Goa will have single-phase polling on February 14. Punjab too will have a single-phase election on February 20. 

Also read: Channi or Sidhu? Rahul Gandhi says decision on Congress CM face for Punjab Assembly elections soon

“The Commission has now granted relaxation for the political parties to the extent that indoor meetings of a maximum of 500 persons (instead of existing 300 persons) or 50 percent of the capacity of the hall or the prescribed limit set by SDMA is allowed,” it said. The EC statement said all remaining restrictions, which were part of the revised broad guidelines for conduct of elections issued on January 8, will continue to operate.

Responding to a query on the ban on physical rallies, a senior official said events which are attended by thousands of people during electioneering are not allowed. Only “physical public meetings” with a cap of 1,000 people are allowed. Discussions were also held on the topics of current vaccination status of eligible persons in the respective states and the arrangements for polling personnel, the EC said.

Also read: Omicron News LIVE Updates: Bengal schools, colleges to reopen on Feb 3; Mumbai logs less than 1,000 new COVID-19 cases

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sustaining growth momentum of essence in Budget 2022: Franklin Templeton’s Radhakrishnan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With all eyes on Budget 2022, Anand Radhakrishnan, Managing Director & Chief Investment Officer — Emerging Markets Equity — India, Franklin Templeton believes that sustaining growth momentum and addressing the weak consumption trend would be crucial factors that the government might need to address urgently.

“Sustaining growth momentum will be of essence for the government while trying to balance the fiscal situation in the budget. Thrust to investment-driven growth has been emphasised through measures like corporate tax rationalisation and supportive schemes including EODB and PLI. Further measures would be needed to sustain growth in capex across segments including private sector and household capex, especially in the real estate sector and affordable housing sector,” he said.

Radhakrishnan added that “Addressing the household capex growth could have significant multiplier effect on the economy. Another area of concern is the weak consumption trend in both urban and rural segments. As a key step to resurrect consumption, stimulus measures will need to be announced. This could be achieved through rebates to taxpayers, concessions for discretionary spends, reforms in agri-sector and measures to improve farm income sustainably among other steps”.

There is some nervousness ahead of the Budget, yet several participants remain positive about the market edging higher. Financialisation of savings has led to highest flows into mutual funds by domestic investors in 2021, Radhakrishnan pointed out.

“Gradual inclination towards disciplined investing is emphasised by the fact that monthly SIP flows have grown in the past year and risen to an all-time high of Rs 11,000 crore (51 percent YoY). There is a 40 percent (YoY) rise in number of SIPs added during the year 2021 to a record level of 4.78 crore and the highlight being an increase in average ticket size of SIP” he said.

This rising SIP trend is reflective of long term orientation of retail investors and disciplined investment view that investors are now beginning to shift away from one-off or unstructured lump-sum investing.

One cannot deny that the run up in the market over the last year and a half has also encouraged investors to devote money for SIPs. “That said, the interim market volatilities could less likely have a significant impact on retail flows coming via SIP route,” the market veteran highlighted.

“Our portfolios adopt a bottom-up stock picking approach with valuation levels and growth sustainability factors playing important role in the investment decisions. While this approach to core portfolio building remains the same regardless of market cycles, valuation driven portfolio actions are taken opportunistically,” Radhakrishnan said.

He added that relatively cheaper valuation in select sectors including consumer businesses and utilities has opened opportunities in these sectors whereas expensive valuation has led Franklin Templeton to trim positions in select sectors including technology and materials. Investment opportunities in the form of new age technology-based companies are also being considered in select portfolios, he pointed out.

Macro-economic scenario through the lens of Radhakrishnan:

Broader data suggests that economic recovery is gaining strength, though the speed of recovery varies within each sector. While manufacturing was early to bounce back, services sector is now playing catch up. Consumption growth remains patchy, especially in the rural sector. Improving asset quality of banks and better NPA management is empowering banks with their lending activities and a potential pick up in private capex should aid credit growth. Private sector capex could fuel the next round of economic growth. Support from structural reform measures is building a conducive backdrop for long term sustainable growth momentum for the economy.

Improving domestic and global demand recovery, better capacity utilisation and factors to facilitate ease of doing business including policies, interest rates, lending capacity of financial institutions could foster a productive private sector capex upcycle. Surveys indicate that corporates are keen to invest and are providing for budgets for capacity expansion. This together with government spending as well as a boost to household capex growth led by improving demand and low interest rates could usher a well-balanced capex growth trend, something that has not happened in the previous growth cycles. Positive multiplier effect of capex ratios could lead to all-round productivity growth through increased employment opportunities, income growth leading to consumption recovery — a virtuous growth cycle.

Risks

Speaking of risks, threat from virus variants could present near term shocks to recovery, said Radhakrishnan. Spill-over effect of global commodity inflation trends on domestic economy could potentially impinge on the growth recovery. An eventual tightening of accommodative monetary policy stance by global central banks could weigh on flows to emerging market. Meanwhile, consumer confidence remains at multi-year lows versus pre-covid period. This could be tackled with some stimulus push by the government, he added.

Businesses that Radhakrishnan is bullish on

Domestic cyclical businesses hold scope for sustaining growth momentum as the economy continues on the path to recovery. He is reasonably constructive on lending financials given the great combination of structural tailwinds of financialisation, premiumisation and formalisation combined with a cyclical turnaround for the sector — both from a growth as well as asset quality perspective. Within discretionary sectors, bigger companies in the organised space have gained market share during the pandemic and have consolidated their market presence and are well poised to benefit from the growth from FY23 onwards. Key sub-segments include automobiles, textiles, internet & direct marketing retail, specialty retail. He has also maintained a positive stance on industrials including construction and engineering, aerospace and defense, construction materials and telecom sectors.

Three golden rules that Radhakrishnan believes in:

(1) Follow your own investment style, but keep refining it; (2) Markets are like voting machine in the short run but weighing machine in the long run; and (3) Leave some money on the table meaning do not wait to catch the top to sell.

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