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

A round-up of top newspaper stories.

Inflation based on the Consumer Price Index cooled to 4.25 percent in May from 4.7 percent in the previous month, the lowest in 25 months and inching closer to the Reserve Bank of India’s 4 percent medium-term target. The Index of Industrial Production, driven by a manufacturing rebound, showed a growth of 4.2 percent in April, rising from a five-month low of 1.7 percent in the preceding month.

Why it’s important: The recovery in April factory output and the lower retail inflation in May indicate the economic momentum has carried over from the March quarter, when GDP grew at 6.1 percent. This comes on the back of the central bank holding policy rates in two successive rate-setting

meetings.

The central government has launched an investigation into an alleged data breach after personal data of vaccinated citizens, including VIPs, from the CoWin website was leaked via a Telegram messenger channel. The government said the CoWin website, a repository of all data of those who have been vaccinated against Covid-19, maintains strong data privacy safeguards. It labelled reports on social media that individuals’ data can be accessed from a Telegram bot without any basis and mischievous in nature.

Why it’s important: The extent of the data breach is unknown since the government denies any leak has taken place. There is certainly need for laws and processes that protect privacy and fixes accountability.

India’s GDP reached $3.75 lakh crore in 2023 from around $2 lakh crore in 2014, finance minister Nirmala Sitharaman’s office has said in a tweet. India has moved from tenth to the fifth-largest economy in the world, it said. Highlighting the nine years of reforms under the National Democratic Alliance government, it said India is now being called a bright spot in the global economy.

Why it’s important: India becoming the fifth-largest economy in 2023 is heartening news. The expansion was practically inevitable, given the rules of calculating compounded annual growth rate.

The Securities and Exchange Board of India has barred Zee Entertainment Enterprises promoters Subhash Chandra and son Punit Goenka from holding key roles, including board positions, in any publicly traded firm. The directions come after the regulator found them guilty of siphoning funds from the listed entity for their personal benefit. The promoters are likely to challenge the order.

Why it’s important: The order by the market watchdog comes when the company law tribunal is deciding on the proposed merger between Zee Entertainment and Sony Pictures Networks India.

Mauritius plans to take up the issue of angel tax exemption with Indian authorities with the minister of financial service, Mahen Kumar Seeruttun, intending to seek clarifications on its exclusion from the list of countries where investors are not required to pay taxes on their investments in Indian startups.

In May, the Central Board of Direct Taxes exempted 21 foreign jurisdictions from paying angel tax provisions but excluded Mauritius from the list, even though it is a key source of foreign direct investment into India.

Why it’s important: The Indian government is keen to prevent money laundering and roundtripping of funds into the country. The tax haven of Mauritius has long been suspected to be a conduit for such activities, which might explain its exclusion from the angel tax exemption list.

The government has asked Chinese mobile phone manufacturers to induct Indian equity partners in their local operations. The companies have also been asked to appoint Indian executives in key roles such as chief executive officer, chief operating officer, chief financial officer, and chief technical

officer. The government has also directed them to appoint Indian contract manufacturers, increase local manufacturing through joint ventures, expand exports and appoint local distributors.

Why it’s important: India has been cracking the whip on Chinese firms in the country after bilateral ties took a nosedive following a protracted border standoff. The hardening stance seems to continue.

The market concentration in the country’s telecom sector continues to scale heights despite government bailouts of public-sector Bharat Sanchar Nigam and Mahanagar Telephone Nigam, and private-sector Vodafone Idea. The combined revenue share of Bharti Airtel and Reliance Jio in the

sector’s total reached an all-time high of nearly 72 percent in the year ended March 31 from 70.4 percent in the preceding financial year and around 60 percent in 2019-20.

Why it’s important: India’s telecom sector has become a duopoly of Jio and Airtel despite efforts to revive other wireless operators that have failed to garner sufficient market share. This limits consumer choice.

Local airfares have fallen over the past week on several routes after the civil aviation minister asked airlines to contain prices. While they are off last month’s highs, fares on several routes are still higher than this time last year. Airfares surged last month as growing demand for travel was met with a cutback in supply as Go First suspended operations on May 3 and some carriers grounded planes.

Why it’s important: The rapidly expanding demand for air travel amid shrinking supply was bound to raise ticket prices. But beyond a level, higher airfares are sure to start impacting demand.

India is in talks with Gulf countries, including Bahrain and Saudi Arabia, to expand its Unified Payments Interface service. While the discussions are in the preliminary stages, many nations have shown interest in advancing the talks. The National Payments Corporation of India is spearheading the talks with Gulf countries to establish bank-to-bank transfer systems for cross-border remittances since millions of Indians live and work in the region.

Why it’s important: The ease of using UPI has made it a widely popular payment option in India in a relatively short period of time. The same convenience could now be expanded to nations where Indians have a sizable presence.

The recruitment sentiment appears to have improved as the job market is likely to see an uptick in July-September, signaling a turnaround after two consecutive quarters of cooling down, a survey of 3,020 employers has revealed. In all, 49 percent of employers covered in the latest ManpowerGroup

Employment Outlook Survey said they would hire more people in the September quarter, while 13 percent said they expected a fall in hiring intent or had no plans to backfill.

Why it’s important: Rising unemployment despite robust economic growth has been a big concern in India for long. The overall situation is unlikely to change despite short-term improvement in recruitment sentiment unless there are systemic reforms.