#1. Inflation may remain high in coming months, requires greater vigilance
Global uncertainties and domestic disruptions may keep inflationary pressures elevated in the coming months, warranting greater vigilance by the government and Reserve Bank of India, the finance ministry has said in its monthly economic report for July. The recent price surge in food items could be transitory, it said. Retail inflation spiked to a 15-month high of 7.44 percent in July, mainly due to higher prices of vegetables, pulses, cereals, and spices.
Why it’s important: The government is trying to ease price pressures by intervening in the food market. The central bank has also cautioned retail inflation would remain high in the short term.
#2. India to become growth engines for the world, says Prime Minister Narendra Modi
India will become the growth engine for the world in the coming years, Prime Minister Narendra Modi said, and the ease of doing business in the country has improved through reforms undertaken by the government. The country will become a $5 trillion economy, he told a gathering of business leaders of the BRICS group of nations.
Why it’s important: India has already emerged as a bright spot in the midst of a global slowdown. It should be able to maintain the growth momentum on strong fundamentals.
#3. Indian economy likely grew 7.8 percent in fiscal first quarter on higher local demand
The economy likely expanded 7.8 percent in the June quarter, according to the median forecast of a poll of 20 economists. Resilient domestic demand, government capital expenditure and a nascent revival in private investment supported growth in the quarter amid a global slowdown. The estimated range in the poll was 7.5-8.5 percent. The economy grew 7.2 percent in 2022-23, and 6.1 percent in the March quarter.
Why it’s important: The forecast is lower than the Reserve Bank’s estimate of 8 percent growth in the June quarter. The momentum may not continue in the coming quarters, as transmission of higher interest rates and global slowdown provide headwinds to growth.
#4. Government to procure 2 lakh additional tons of onion to soothe farmer protests
Days after imposing a 40 percent export levy on onions to cool soaring prices, which triggered protests across the main growing belts, the central government has now decided to procure an additional 2 lakh tons of onions at Rs 2,410 per quintal for its buffer stock from farmers. The Centre maintains a buffer stock of 300,000 tons of onions, which will now be expanded to 500,000 tons.
Why it’s important: The government’s procurement rate for onions is remarkably close to the price at which they were being exported before the export duty was imposed to ease inflationary pressures.
#5. Torrent Pharma joins race with Blackstone and Baring to acquire Hamied family stake in Cipla
Torrent Pharma has joined the race to buy out the Hamied family’s stake in Cipla. Sixth-ranked Torrent is aiming to take control of the fourth-ranked Indian drugmaker. The competition includes Blackstone, the biggest buyout fund, and Baring PE Asia-EQT. Torrent, advised by JP Morgan, is looking to form a consortium with private equity funds and has held preliminary discussions with a few.
Why it’s important: If Torrent succeeds in acquiring Cipla, it will create India’s second-largest drugs firm by revenue after Sun Pharma. The transaction could be the biggest pharma deal since 2014.
#6. Medicine store chain PharmEasy to raise Rs 3,500 crore through rights issue
Pharmacy chain PharmEasy will raise Rs 3,500 crore through a rights issue next week to repay a big chunk of its loans to Goldman Sachs. Temasek Holdings, TPG, Prosus, CDPQ, Eight Roads, LGT, Abu Dhabi sovereign wealth fund ADQ, Amansa, OrbiMed and Sunil Kant Munjal’s family office have committed to invest Rs 2,000 crore. Manipal Health founder Ranjan Pai’s family office may invest Rs 1,200 crore.
Why it’s important: The pricing values the company at around $500 million, a sharp decline from its peak valuation of $5.6 billion. It tried to raise funds in 2022-23 but shelved plans due to poor market conditions.
#7. India’s drugs regulator warns of counterfeit diabetes drug used in weight loss
Counterfeit versions of a diabetes drug, also used to treat weight loss, are making the rounds in India, prompting the drug overseer to warn doctors, chemists, and patients. The Drugs Controller General of India has raised an alert about fake versions of Glucagon-Like Peptide 1 Receptor Agonist products sold at outlets and over social media after a warning from the World Health Organization last week.
Why it’s important: Increasing obesity and low body image issues have seen a rush to lose weight by many through drugs, which counterfeiters are exploiting. A better alternative would be regular exercise and healthier eating habits.
#8. India may impose further restrictions on rice exports in response to escalating prices
The government is considering extending duty restrictions to exports of non-basmati parboiled rice and imposing a minimum export price for basmati following the ban on white rice exports in response to escalating prices of the staple. The government may impose a 20 percent duty on non-basmati, parboiled rice exports, while a minimum export price of around $1,250 per ton could be levied on basmati varieties.
Why it’s important: The government is intervening aggressively in the food market as it seeks to destress household budgets ahead of an important polling season that culminates in the 2024 general election.
#9. Online gaming industry fears tax demand may rise by as much as 400 percent
The online gaming industry is concerned that it may face a Vodafone-like situation because the government demands 28 percent GST from companies such as Gameskraft Technology for the period when the amended law was not in force. Tax on a retrospective basis was imposed on Vodafone. The tax liability on online gaming companies could increase over 400 percent.
Why it’s important: The fear of retrospective demand may come to haunt the online gaming industry. The government is yet to provide clarity over the matter.
#10. India to have homegrown crash testing standards to make deadly roads safer
The government in partnership with London-based Global NCAP is set to introduce the Bharat New Car Assessment Program crash testing standards for vehicles starting October to boost road safety. Transport minister Nitin Gadkari has unveiled the program aimed at crash testing motor vehicles up to 3.5 tons and assigning star ratings based on performance. As many as 30 models have already submitted for testing under the new tests, the minister said.
Why it’s important: India has one of the world’s deadliest roads, seeing a staggering half million accidents and 150,000 deaths. Better crash standards would improve safety but must be backed up by stricter driving discipline.
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