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

A round-up of the biggest articles from newspapers

June 16, 2021 / 07:51 AM IST

Below is a shortlist of all the important articles from newspapers.

Nearly 10k mobile stores shut

In the past year, thousands of handset retail stores, about 8 per cent of the total of 120,000, have shut as a result of lockdowns and e-commerce giants enticing consumers with discounted phones, Business Standard reports citing PredictiVu study.

What it is showing: The north India region has seen the worst, with close to 10 per cent of outlets closing.

North India typically contributes over 35 per cent of the total handset sales.

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The western region, contributing nearly 30 per cent of sales, has seen 9 per cent of shops shut, followed by 6 per cent in the south and 3 per cent in the east.

Unlock spree gives truck rentals a high

Showing the clear indication of economic activities picking up in the country, truck rentals have risen sharply across key trunk routes in the past fortnight as states started unlocking in phases, Business Standard reports.

How it is important: Helped by an increase in the factory output of most bulk goods and last year´s low base, freight rates rose by an average 12 per cent.

This is the highest jump in the fortnightly rental seeing since March.

But analysts are cautious.

Though the increase in the freight rates looked encouraging, the road to full recovery would be long.

While it does reflect the demand recovery to some extent, a lot of it is a natural pass through due to the hike in diesel prices.

The demand and supply dynamics will define the future trajectory of freight rates.

India to be global hub for eSIMs with IDEMIA’s help

Leading French augmented identity and SIM card maker IDEMIA to make India a global hub for manufacturing embedded SIMs, Business Standard reports.

How it is important: IDEMIA, with revenues of 2.3 billion euros, is building its Embedded SIM (eSIM) manufacturing capacity across the world and has already put in one-fifth of its annual capacity of 60 million in a plant in Noida.

What´s more, the company plans to expand the capacity and make the plant into one of its largest eSIM factories.

It has also committed to spending 200 million euros every year in India for the next five years for research and development.

IDEMIA made a big bet in India with the standard SIM cards. Currently, it manufactures over 600 million SIMs in the country, which accounts for over 67 per cent of its global production and its largest plant in Noida.

It has provided over one billion standard SIMs to Indian customers and controls over 40 per cent of this market.

India´s eSIM market is still in its infancy, with around 1 million users, although all three Indian mobile operators offer the service to their customers.

IT portal 2.0 may allow payments by UPI, cards

The new income tax portal is likely to add more private banks to collect taxes and any other amount, such as fees, penalty, and refunds payable under the IT Act, says Business Standard.

How it is important: The portal will also provide multiple payment options, including through Unified Payment Interface (UPI) and credit cards.

Currently, taxpayers have the option to make payments through net-banking of large private and public sector banks, making it difficult for those whose banks are not part of the portal.

Transactions via debit cards are allowed but not widely used.

The new e-filing portal 2.0, launched on June 7, is developing many such features to ease the tax-filing process and give options to taxpayers.

‘PSA oxygen generators at hospitals not a panacea’

In an interview with Business Standard, Moloy Banerjee, head of gases-South Asia, Linde South Asia, talks about capacity building and the merits of setting up PSA plants to meet medical oxygen demand.

Among those supplying a sizeable percentage of medical oxygen was Linde Plc through its subsidiaries Linde India and Praxair India.

The company is planning to set up an additional 1,000 tonne-a-day separation capacity to beef up oxygen, nitrogen and argon production, with about 75 per cent of that being oxygen capacity.

He added that the PSA (pressure swing adsorption) oxygen generator is not a panacea or a solution to all problems.

When a hospital is treating Covid patients and when the demand goes up, it ramps up to 711 times.

And when Covid subsides, economic considerations will come to the forefront for hospitals.

That’s the whole risk about putting in PSA oxygen generators.

The second issue with PSA oxygen generators is that they use technology that uses molecular sieves, which degrade over time.

Prices of pulses, edible oils rise, hit household budgets

Household budgets have been hit hard by a sharp increase in prices of edible oil and pulses for the past few months due to a string of factors, including a jump in global commodity prices, says The Times of India.

How it is important: The build of price pressures has come at a time when the economy is witnessing a sharp slowdown and households are combating reduced salaries, job losses and uncertainty against the backdrop of the second wave of the Covid-19 pandemic.

The flare-up in food prices has taken economists by surprise. Adding to the problem is the increase in core inflation, which is minus food and fuel, while the increase in fuel prices have also added to the price pressures.

Over the last one year, sunflower oil has seen a surge of over 50% across metros (77% in Kolkata), while mustard oil, palm oil and other edible oils now cost at least 30% more.

In case of pulses, too, there is pressure with Kolkata seeing a significant increase. Gram dal and tur dal have seen a spike of 25% and 24% in Kolkata over the past one year. It’s a similar story across India.

Economists expect food prices to moderate as lockdown restrictions ease and expectations of a robust monsoon which could have a calming impact on food prices.

JAL lenders make fresh loan recast bid

Nearly four years after the RBI ordered bankruptcy action against Jaiprakash Associates (JAL), the parent of Jaypee Infratech, banks led by ICICI Bank have been slow in pursuing the case in the National Company Law Tribunal, amid fresh attempts to restructure the company’s loans, reports The Times of India.

How it is important: A loan restructuring, for which a meeting of lenders will be convened over the next few days, will provide relief to the promoters led by the Gaur family, which has lost Jaypee Infratech, its crown jewel that had a massive land bank, running from Noida to Agra along expressways.

The proposal has been on the table for months but so far the lenders have failed to make much headway.

Even as lenders deliberate a restructuring, the company’s stock has been on fire in recent days, surging almost 70% from Rs 8.86 on May 31 to nearly Rs15, when it again hit the upper circuit on the BSE.

Volumes too have shot up, creating fresh surprise in the market.

While the exchanges had sought an explanation for the recent rise, JAL said it had been making the requisite disclosures and was not aware of any reasons.

While the buzz around a loan restructuring is one of the triggers, possible conversion of an FCCB is said to be the other reason for the rise.

Regulatory system for digital banking intermediaries likely

India’s burgeoning digital banking ecosystem could soon come within a more formalised regulatory and supervisory mandate specified by the central bank, says The Economic Times.

How it is important: The regulator looks to accommodate roles for entities beyond conventional banks and non-banking finance companies (NBFC).

An internal team at the RBI is studying the scope of various classes of digital intermediaries functioning at the interface of India’s technology and financial industries.

It is seeking to provide definitions to these emerging entities and listing down compliance yardsticks.

These entities include fintechs aspiring to be lenders but don’t want to be a bank, service providers embedded with banks, and Application Programming Interface (API) banking entities, which in some western markets are known as ‘neo banks.’

FMCG sales show signs of revival as Covid curbs ease

Relaxation of Covid restrictions led to a 15-20% increase in sales of fast-moving consumer goods (FMCG) across grocery stores in general trade and a 25-30% jump in supermarkets and standalone modern trade outlets in the past week from the month earlier, The Economic Times reports.

How it is important: Some shops have reopened and others have extended operating hours as curbs eased.

Products being stocked at grocery stores have risen to 65% of pre-pandemic levels, compared with about 30% in May, when the second Covid wave was at its peak.

They are seeing higher consumer offtake and primary sales in the past week across both general and modern retail.

This is a direct consequence of retail stores being allowed to operate for longer hours.

This is a comeback of sorts from April and May when companies were struggling with last-mile logistics amid curbs on operating hours and a steep rise in infections.

India has an estimated 12 million-plus neighbourhood stores and despite double-digit growth in online grocery, offline still contributes more than 90% of overall FMCG sales.

Vehicle buying ready to move into higher gear

Activity is picking up in the passenger vehicle market after several weeks as states have started unwinding restrictions, The Economic Times reports.

How it is working: Out of around 25,000 auto retail outlets in India, more than 20,000 were open.

Companies said enquiries, bookings and deliveries were improving day by day, while order cancellations were less than normal.

Manufacturers that had shut factories amid the second wave are reworking their production schedules based on the market feedback.

Shops are witnessing some reasonable increase in demand as walk-ins and booking have been increasing as against earlier weeks.

The industry also expects pent-up demand when the Covid-19 situation improves further.

Companies set to splurge on ads from July

Large companies are likely to revive their marketing and advertising spend from July, The Economic Times reports. How it is important: It is to build up momentum for the crucial festive season, buoyed by the drop in infection rates and the opening of shops and malls.

Consumer electronics, telecom, FMCG, auto and e-commerce sectors will drive this advertising revival by hiking their spends by up to 20% compared with the same period in the pre-Covid year of 2019.

Global advertising agency Dentsu India chairman Ashish Bhasin said there had been no national lockdown in the second wave and as the economy opens up things will only become better. He said if there is a good monsoon, business would do well as rural demand will pick up.

FMCG companies – the highest contributor to advertising revenues in India – are planning to double down on advertising in the next two quarters.

‘While we adapted to the covid crisis, we continued to invest in future’

TV Narendran CEO & MD, Tata Steel in a guest column in The Economic Times explains how his company prepared for the pandemic in India. “Leveraging our robust risk framework and early insights from our footprint in Europe, where the virus had struck earlier, we responded to the evolving situation with agility and prepared our ecosystem including employees and the community to embrace the new normal,” he said.

“We set up a senior management committee which met daily to review the safety and health of our employees, their families, the community and operations at our plant and mining locations.

When the lockdown was first declared, we had permission to keep our steel plants operational under the Essential Services Act.

The foremost challenge was to ensure the safety of employees reporting to work at plant and mine sites

We introduced various protocols for office and plant employees: social distancing, wearing masks, no physical meetings while effecting regular communication with all stakeholders.”

Tata Steel has also responded to the national urgency and supplied 61,000+ tonnes of liquid medical oxygen (till June 12, 2021) to various Indian states and hospitals.

Peripheral areas are the new hot realty destinations in cities

The pandemic has changed consumer behaviour in the real estate business with the city peripheral areas now emerging as the topmost choice for homebuyers as well as developers, The Economic Times reports.

What it shows: The pattern emerging over the last 12-15 months clearly reveals that the supply is chasing demand.

As much as 58% of around 149,000 homes launched in 2020-21 are located in the peripheral areas of the top seven property markets.

The proportion of these launches in peripheral areas has been rising since the past two years but the pandemic has exacerbated the change.

The sales pattern also reveal a rising demand in such locations as around 54% of over 151,000 units sold across the top seven cities in 2020-21 were in the peripheral areas.

Inflation may obstruct RBI’s focus on growth

The surprise spike in retail inflation is expected to make it harder for the central bank to prioritise growth, Mint reports.

How it is important: It put its interest rate setting committee in a wait-and-watch mode at its next meeting on 4-6 August.

Economists believe that though the monetary policy committee (MPC) would not increase rates or change its stance at the meeting, it would raise an alert over rising inflation.

An increase in repo rate, they believe, is not likely before 2022, although there could be a reverse repo hike in the December quarter.

The consensus among economists is that the rate-setting committee will perhaps slightly raise its inflation forecast of 5.1% for fiscal 2022.

They also expect discussions on the road map for exiting the accommodative stance.

MFs raise holdings in state-run banks despite NPA fears

Mutual fund houses are raising their holdings in the banking sector, especially state-run banks, Mint reports.

What it means: It underscores the growing optimism about the health of these financial institutions.

These funds have increased investments in public sector banks (PSBs) over the past seven months, despite fears of bad loans amid the turbulence caused by the covid-19 pandemic.

The increased investments saw the sector, in the 13th position a year ago, climb to the ninth rank in the allocation of investments by mutual funds.

Private banks at 18% held the top rank among sectoral holdings for mutual funds in May, followed by technology (11%), healthcare (7.6%), and non-banking financial companies (7.4%).

Builders plan big residential launches as Second wave ebbs

Top property developers have lined up a slew of housing projects for launch from July as they await a complete lifting of lockdown curbs imposed during the second wave of the pandemic, Mint reports.

What it shows: Sales of new residential properties that rose steadily since the coronavirus outbreak last year stalled when the second wave struck in March, prompting builders to defer launches.

While this quarter would be a washout for both sales and launches, it is expected that the bulk of FY22 sales may come from fresh launches scheduled in the second half of this fiscal.

DLF Ltd had launched projects totalling 1.5 million sq. ft in 2020-21.

Similarly, Bengaluru-based Prestige Estates Projects Ltd has planned 12-15 million sq. ft of residential launches between July and December across south India, Noida and Mumbai.

Macrotech Developers Ltd, which operates under the ‘Lodha’ brand, plans to launch around 4.3 million sq. ft of new projects in the Mumbai Metropolitan Region and Pune.

Oberoi Realty Ltd, is planning new launches in Thane.

Govt builds an online repository of local, global education courses

The Union government and several private entities are jointly building a repository of online education which will host thousands of courses from domestic and global education platforms and standalone online education providers, Mint reports.

How it is important: Several courses, including those from top education aggregators such as edX and Coursera, will also be mapped to Indian university curriculums.

Given the huge demand and acceptance of technology-enabled learning and courses, such a repository will help in mapping individual learners’ choice to available courses, universities and mentors.

This will also aid the virtual university idea, and the academic bank model of education that authorities have been talking about for the last four months.

1.8 times more likely to get jab in urban India than rural areas

India’s massive vaccination drive is becoming skewed towards cities and towns, with the rural parts of the country being increasingly left behind, Hindustan Times reports.

What it means: It is a matter of concern because around 65% of the country’s population currently resides in rural districts.

The even more worrying trend is that the gap between the coverage of population between the two groups is currently the highest ever recorded, and continues to rise.

A person living in urban India is at least 1.8 times more likely to receive a shot of the Covid-19 vaccine than their counterpart in the rural hinterland.

While urban districts account for 13.6% of the population, 27.2% have received at least one shot till Monday night.

In rural districts, where 72.8% of the population lives, only 14.7% have had one shot of the vaccine. P8

Experts said that if this rural-urban gap continues to widen, then it risks hampering India’s goal of vaccinating 60-70% of the country’s population by the end of the year, as a large majority of the population lives in villages.
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