Morning Scan: All the big stories to get you started for the day

A round-up of top newspaper stories.

The Reserve Bank of India is likely to keep policy rates unchanged at its three-day meeting this week because inflation has moderated into the central bank’s tolerance zone. The six-member rate-setting panel would maintain the benchmark policy repo rate at 6.50 percent during the June 6-8 meeting, marking the second consecutive pause, according to a poll of 16 respondents by Economic Times. All 10 economists polled by Mint expected policy rates to remain unchanged.

Why it’s important: Another pause in raising policy rates would be welcomed by both corporate and retail borrowers. The central bank may even soften its monetary policy stance if it sees inflation cooling further.

The GST Council, which is scheduled to meet later in June, might clear the operational framework of the much-awaited GST appellate tribunal. The groundwork was done by amending the GST law during the budget session of Parliament. The approval would mean setting up benches in each state as well as having a national appellate tribunal.

Why it’s important: The proposed tribunal would deal with tax disputes and hopefully hasten and streamline resolutions. Taxpayers contesting rulings are currently required to move high courts, which leads to delays as they do not have a specialized benches to deal with indirect tax matters.

The Railway Board has recommended a probe by the Central Bureau of Investigation into the Balasore train accident that claimed about 300 lives, minister Ashwini Vaishnaw has said. He had earlier in the day said the root cause of the accident and the people responsible have been identified. Railway Board member Jaya Varma Sinha has said speed limits were exceeded but preliminary findings indicate there were some issues with the signaling systems.

Why it’s important: The CBI handling the investigation instead of the Commission of Railway Safety is an unusual move. Although it is important to find out what went wrong and punish the guilty to prevent such horrific mishaps, it is unclear if the federal sleuths have the technical expertise to probe the matter.

The government is working on a production-linked incentive scheme worth Rs 15,000 crore to encourage the setting up of grid-scale battery storage, with the draft expected to be released within a month. Grid-scale battery storage systems can store renewable energy and release it at times of high demand to maintain grid stability. All the available technologies ranging from lithium-ion to sodium-ion to vanadium redox batteries would be eligible for the incentive if they are economically viable.

Why it’s important: Grid-scale batteries are an essential element in India’s increasing reliance on renewable energy as they provide stability to the inherent intermittent source. Financial incentives will encourage investments in this emerging area.

Consumer goods firms across sectors are placing over 10 percent higher orders to manufacturers for the upcoming festive season compared to last year, signaling they are positively inclined about a revival in consumer spending by then, according to industry executives. Most companies undertake their festive season stock planning in May and June, and place orders so that production can begin in June.

Why it’s important: Festive season sales make up for a significant portion of annual sales of consumers products. The anticipated demand revival would depend on the performance of the monsoon as well as a lowering trajectory in the rate of price rise that has shrunk disposable incomes.

India is ready to give the UK access to its passenger vehicle market but wants to place a limit on the number of units that will be allowed to enter India once the deal is struck. India has proposed a tariff rate quota that will impose a ceiling on the number of cars under 100,000 units to be allowed to be imported on a concessional tariff. Given that domestic passenger vehicle sales were 3.89 million in 2022-23, the proposed limit could be less than 3 percent.

Why it’s important: A cap would ensure there is no sudden influx of imports once the trade agreement kicks in. The British imports would in any case likely to focus on the top end of the market.

An impasse between the Securities and Exchange Board of India and the Securities Appellate Tribunal over interpretation of a specific provision of the securities law on listing conditions has reached the Supreme Court. The tribunal has overturned more than half a dozen orders related to listing-agreement violations, and the regulator has appealed these judgements in the Supreme Court.

Why it’s important: A serious disagreement on what constitute listing conditions for companies should ideally be sorted out at the regulatory level. A public spat in courts could have been avoided.

A lobby group representing Coca-Cola, PepsiCo, Red Bull, Dabur, and Tetra Pak is of the view that recent World Health Organization guidelines on non-sugar sweeteners are not scientifically rigorous. The global health body has had said non-sugar sweeteners such as aspartame and stevia do not help in weight loss, while increasing risk of certain diseases. Health groups have called for restrictive use only messages on all foods and drinks with artificial sweeteners. The sellers are saying it is a disservice to public health to not recognize the role of low or no-calorie sweeteners in reducing sugar intake.

Why it’s important: Soda pop sellers are in a tizzy because restrictive use labels could impact sales. Citing a disservice to public health from firms that profit from supercharged sugary drinks does not really hold much water.

India may impose a countervailing duty on stainless steel imports to deter the flood of cheap imports and protect local manufacturers. The steel ministry backed a levy on steel, and the commerce ministry’s directorate general of trade remedies has recommended a 19 percent duty to the finance ministry, which will take a final call on the matter.

Why it’s important: A countervailing duty typically protects local firms that cannot compete with cheap imports which gain from subsidies given by the exporting nation. The countries in this instance are China and Russia.

The UPI payments system has emerged as the most preferred payment method for Indians and consumers are no longer too keen to use debit cards, official data show. For every Rs 100 spent on debit cards, consumers spent over Rs 1,900 via UPI in the year ended March 31. Debit card transaction volumes have been declining over the past few years from 4 billion in 2020-21 to 3.4 billion in 2022-23. In comparison, UPI transaction volume in 2022-23 was at 83.8 billion.

Why it’s important: Consumers like UPI because they don’t have to carry wallets to make payments. Merchants like it because of zero merchant discount rate fees. UPI will continue to surge in popularity, particularly for micro payments.