CEO poll shows capital expenditure tops India’s corporate agenda in 2023
Indian firms are planning to increase investments in the new year to expand capacity, acquire companies and hire more people, according to a survey of 35 CEOs by the Business Standard. Rising costs, weak consumer demand and increasing interest rates as major concerns for 2023, they said. As many as 97 per cent of the CEOs said their companies would invest in expanding capacity in 2023 as their current capacity is nearly at a peak. Almost 89 per cent said they plan to hire more this year to man expanded operations.
Why it’s important: Capital spending in India’s private sector has been muted in the recent couple of years. A positive reversal would mean business confidence is returning unless the headwinds prove to be too strong.
Tata remains top business house, Adani shines the brightest
The Tata group remained the country’s top business in terms of market capitalization in 2022. Adani group companies were among the biggest gainers on the bourses for the second consecutive year. Tata companies ended 2022 with a combined group m-cap of Rs 21.2 lakh crore, down 9.4 per cent on year. The Adani group overtook Mukesh Ambani’s firms to become India’s second-biggest business house in m-cap, which more than doubled to Rs 19.66 lakh crore. Reliance Industries’ market value rose to Rs 17.54 lakh crore.
Why it’s important: The bounce back of the Indian economy after the pandemic has been mainly concentrated at the top. It’s unsurprising that this trend was mirrored in the stock market as well. However, 2022 was tough for family businesses as their rise slowed down during the year.
GST collections rise 15 per cent on year to Rs 1.5 lakh crore
India’s goods and services tax revenue almost hit Rs 1.5 lakh crore in December, rising 15 per cent from a year earlier on higher sales of automobiles and a pick-up in services activity. The cess collected remained at Rs 11,005 crore, showing strong performance of items in the 28 per cent slab that attracts the levy. The total revenue of the Centre and the states after regular settlements in December stood at Rs 63,380 crore and Rs 64,451 crore, respectively, according to the finance ministry.
Why it’s important: The buoyancy in tax collections enables starting the new year on a strong note. It indicates economic resilience in the country despite a deepening global slowdown.
Parliamentary committee on finance to recommend stronger regulators
After recommending big changes to India’s bankruptcy code and antitrust regulation, the parliamentary standing committee on finance may examine the issue of state finances, the working of market and banking regulators and the menace of cybercrimes, according to chairperson Jayant Sinha. Dominant digital market players, to be identified as digital gatekeepers, will have to file annual compliance reports to the regulator under a proposed legal framework called Digital Competition Act that will set fair conduct norms for these entities, Sinha said in an interview.
Why it’s important: The digital transformation of India’s economy in recent years requires stronger regulators as the country continues to grow rapidly. The parliamentary panel is on the right track.
Torrent in discussions to purchase 1.1GW of clean power projects from ReNew
Torrent Power is in talks to buy clean power projects totaling 1.1 GW from ReNew Energy Global at an enterprise value of around $ 1.2 billion. Ahmedabad-based Torrent Power has submitted a non-binding offer for ReNew’s solar and wind power assets of 350 MW and 750MW, respectively, at an equity value of around $ 450 million. The discussions on valuation are continuing.
Why it’s important: Torrent Power, which has a presence in generation, transmission, and distribution, has been active in India’s green energy deals. It is now taking an inorganic route to expand its business.
Oil arm of bankrupt Videocon Industries to get improved offer of Rs 1,200 crore
State-promoted National Asset Reconstruction Company Ltd will soon submit an improved offer of Rs 1,200 crore for the debt of VOVL, the oil and gas exploration unit of insolvent Videocon Industries. Industrialist Venugopal Dhoot promoted VOVL, which was earlier known as Videocon Oil and Ventures Ltd. It has been undergoing corporate insolvency since 2019. Dhoot was recently arrested over his alleged role in a ICICI loans scam. Lenders rejected NARCL’s offer of Rs 860 crore in mid-November as too low.
Why it’s important: If the improved offer of the bidder is accepted, it will be the largest debt acquisition of a single company by any asset reconstruction company in the country.
Apple suppliers created 50,000 direct jobs in India since August 2021
Apple Inc’s contract manufacturers and component suppliers have created nearly 50,000 direct jobs in India since the smartphone production-linked incentive scheme came into effect in August 2021, according to government officials. Besides the direct jobs, nearly 100,000 indirect jobs could also have been created by the Apple manufacturing ecosystem in the country, they said, citing data submitted by the companies.
Why it’s important: Through its contract manufacturers, Apple may have become the largest provider of blue-collar jobs in India’s fast-growing electronics sector. It is in line with the firm’s pivot away from China.
Government may raise budgetary support for railways to record levels
The central government is likely to provide record budgetary support to strengthen the infrastructure of Indian Railways. The gross budgetary support for railways is likely to increase by 29 per cent to Rs 1.8 lakh crore in the year starting 1 April from Rs 1.4 lakh crore in the current financial year. The railway ministry expects total capital expenditure to rise more than 20 per cent to exceed Rs 3 lakh crore in 2023-24 on higher budget allocation, increased revenue from subsidiaries, and higher borrowings.
Why it’s important: The modernization of Indian Railways is long overdue. It needs to strengthen its track network, bolster its freight corridors, and introduce more high-speed trains.
TikTok ban by India sets precedence for other nations to follow, US official says
India has set an important precedent by banning TikTok and this is a guide star for other countries, a top US official has said. In view of the concerns over the Chinese short video app being a threat to national security, nothing short of a blanket ban will work, said Brendan Carr, Commissioner of the United States Federal Communications Commission.
Why it’s important: If the blanket ban on TikTok imposed by India is followed by the US, it would spell big trouble for the Chinese firm. More nations could follow suit.
More women to get factory and front-facing jobs in India in 2023
More women in India are likely to be recruited for shop floor and front-facing jobs this year, with firms like Samsung, Flipkart, Volkswagen, and KFC working to create a more enabling environment for them. Most of these firms are pushing for diversity by hiring more women for shop floor jobs, their plants, and stores, while others are considering opening outlets run only by women, company executives said.
Why it’s important: Workforce participation of women in India is surprisingly low, given its economic trajectory. Private sector initiatives could correct the imbalance in a significant way.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
