Biotech panel approves field trials of GM mustard for eventual commercial release
The Genetic Engineering Appraisal Committee, India’s biotech regulator, has recommended the environmental release of a genetically modified mustard variety called Dhara Mustard Hybrid 11, paving the way for the commercialization of the country’s first GM food crop. The panel said the recommendation was valid for four years. Further studies and field trials will have to be conducted jointly with the Indian Council of Agriculture Research within two years, according to the minutes of a GEAC meeting.
Why it’s important: Genetically modified varieties of food crops are a contentious issue. The move by the regulator is expected to face stiff opposition by environmentalists and groups such as the Swadeshi Jagran Manch, an affiliate of the Rashtriya Swayamsevak Sangh.
Consumer inflation to moderate by March as base effect takes hold
India’s retail inflation rate will ease to within the central bank’s tolerance band of 2-6 percent by March, even if prices continue to rise for the rest of the year, as per the trend of past five years due to the statistical effect of a favorable base, according to calculations by Mint. If retail prices rise each month at the same average sequential pace seen in the past five years, consumer inflation will ease to 5.7 percent in March 2023 after staying above 6 percent for 14 consecutive months.
Why it’s important: Although the easing in retail inflation does not necessarily mean a decline in prices from current levels, it will be helpful for the Reserve Bank since it is mandated to keep the price hike rate within 6 percent, which has not been the case for three quarters now.
Fairfax looks to sell entire stake in Bangalore airport for $ 1.5 billion
Fairfax Financial Holdings, controlled by Canadian billionaire Prem Watsa, plans to sell its entire stake in Bangalore International Airport Ltd for at least $ 1.5 billion. It had infused about $ 1 billion into BIAL, making it Watsa’s largest investment in India. Fairfax expects a premium of 40-50 percent as air passenger traffic is set to increase, and the airport is capable of accommodating a much larger number of flights.
Why it’s important: If completed, it will be Fairfax’s largest exit in India. The plan to sell stake could be a part of Fairfax’s larger India consolidation strategy.
Automakers see car sales soar during this year’s festival season
The festival season has brought cheer to passenger vehicle makers as sales have jumped because consumers usually make big-ticket purchases during the season, which begins with Onam and peaks with Navratri and Diwali. The top four carmakers, which have an 80 percent share in the market, saw retail sales or deliveries to customers grow in high double digits compared with last year. Deliveries of market leader Maruti Suzuki India rose to 190,000 units compared to 130,000 units last year. Unlike last year, when sales were hit because of an acute shortage of chips, improved availability helped firms ramp up production and meet the strong demand.
Why it’s important: Festive season sales are critical for auto firms as they account for a fourth of annual sales. If not for the still low supply of semiconductors, this would have been a record-breaking season.
Rising deposit rates to squeeze margins of commercial banks in coming quarters
The September quarter could be the final three months of high profits for banks in the near future, as the repricing of deposits indicates a coming squeeze in net interest margins. Most banks reported better profit numbers and stronger margins in the September quarter, aided by the combination of frontloaded loan rate hikes and delayed deposit rate increases. The repricing is to happen gradually over the next year as existing deposits get renewed over time and fresh deposits come at a higher cost.
Why it’s important: Banks have been until now reluctant to raise deposit rates but that is set to change as the abundant liquidity in the banking system has nearly become a deficit even as credit demand remains high.
Antitrust regulator to get legal powers before merger with anti-profiteering authority
The central government is working on increasing legal powers of the Competition Commission of India by modifying key provisions of anti-profiteering regulations on goods and services tax before the two regulators merge. The move assumes significance as the National Anti-profiteering Authority’s term ends in November, with no further extension being planned. The government had early this year decided to subsume the GST anti-profiteering watchdog into the fair0trade regulator.
Why it’s important: Currently, the commission lacks legal powers and qualifications to deal with offences related to GST. The merger could be delayed if the changes are not made before end of November.
Demand for air travel fail to touch pre-pandemic levels despite festive season
The demand for air travel during the peak festival season has failed to cross the pre-pandemic level. Average daily air passenger traffic in October remained at some 360,000 air passengers, as against the pre-Covid level of nearly 400,000 passengers. It was also lower than the average number of daily air passengers recorded in the festival month of October 2019, when the average number of daily air traffic was around 397,000 passengers.
Why it’s important: The aviation sector was particularly hit hard due to mobility restriction during the pandemic. As Covid-19 receded, there were hopes that the industry will make a full recovery, but that will now have to wait a little longer.
Dabur India acquires majority stake in spices maker Badshah Masala
Packaged consumer goods firm Dabur India has bought a 51 percent stake in Badshah Masala for Rs 587.52 crore. The transaction, which values Mumbai-based Badshah Masala at Rs 1,152 crore, is expected to be completed the current financial year. Dabur said the purchase aligns with its strategic intent to expand its foods business to Rs 500 crore in three years.
Why it’s important: With this acquisition, Dabur enters the branded spices and seasoning market, which is worth over Rs 25,000 crore in India and is expected to see continued growth in the coming years.
Global investors rattled due to muddle over forming Andhra Pradesh’s capital city
The dispute over whether Andhra Pradesh will have three capital cities, a first for any state in India, or a conventional single-city-based headquarter at Amaravati continues. The three-capital plan could be a potentially crippling public finance misadventure as the state have huge borrowing needs.
Why it’s important: Scrapping the idea of Amravati as the sole capital is not considered positive move for the confidence of overseas investors. If a state government changes lead to the end of advanced projects of such magnitude, then it is bound to shake investor confidence.
World to miss 1.5 degrees Celsius target at present rate of climate action
The plans of national governments to reduce greenhouse gas emissions are not enough to avoid catastrophic global warming, with the planet on track to heat up between 2.1 and 2.9 degrees Celsius by the end of the century compared to preindustrial times, according to a new report from the United Nations Framework Convention on Climate Change. Despite some progress in the last year, governments need to do more by 2030 to ensure that the global temperature increase is below 2 degrees, the goal set in the 2015 Paris Agreement.
Why it’s important: Scientific estimates show that human-caused greenhouse gas emissions should halve by the end of this decade to prevent catastrophic climate change. Today’s warming of 1.1 degrees above preindustrial times has already resulted in irreversible changes. More action is urgently needed.
