Indian companies gear up to ride out pandemic third wave
The rapid rise in Omicron cases in Delhi and Mumbai has triggered fears of a sweeping third wave, pushing businesses to take measures to protect their workforce while ensuring minimal disruptions. Companies are strengthening work-from-home mandates, reviewing safety protocols, and checking the vaccination status of employees.
Why it’s important: Having coped with a severe second wave of the pandemic, Indian corporates are confident that another spike can be managed but they are not taking any chances. Some are even planning to ask eligible, fully vaccinated employees to take additional shots when enrolment begins.
GST Council may roll back hike in indirect taxes on textile items
The sharp increase in goods and services tax on textiles, scheduled to come into force from 1 January, is expected to be rolled back due to pressure from businesses and traders. The tax rate was increased from 5 percent to 12 percent on several items used in the textiles sector.
Why it’s important: Although the government said the tax increase addressed the distortions in tax administration, the fact that the textile sector is a significant employer and a price increase on apparel and footwear may depress demand is forcing a review.
Foreign holdings of domestic mutual funds surge 229 percent
Mutual funds’ investment in shares of companies listed abroad surged in 2021, increasing to Rs 331 billion in November from Rs 100 billion in December 2020. The sharp climb comes despite a ceiling on mutual fund investment in foreign companies, which has remained unchanged at $7 billion since 2008.
Why it’s important: Investors are increasingly putting in money in such funds because of the opportunity to diversify, like investing in a currency other than the rupee. Foreign holdings appreciate in value if the rupee falls.
Housing sales are likely to increase by 15-20 percent
Property developers expect the 2021 sale momentum to continue in 2022 as demand for residences in gated communities continues to expand. Despite business disruptions due to the coronavirus pandemic, the realty sector saw a strong rebound.
Why it’s important: India’s construction sector is one of the biggest drivers of growth and employment, of which residential development forms a big part. The prices of homes have not been rising for the past few years, leaving many developers in the red. An increased demand will provide much-needed relief to the sector.
Working professionals finding it hard to cope with pandemic
Prolonged pandemic-induced fatigue, continued social isolation, and dragging uncertainty are adding to mental and emotional stress of working professionals in India who, according to a recent study, are more impacted by Covid-19 than their peers elsewhere.
Why it’s important: A third wave looks imminent with the rapid increase in the new Omicron variant infections, pushing back a return to normalcy. Many corporates have found that work from home increases productivity by people need to manage isolation stress. Remote working looks to continue to be the new normal.
Technology start-ups will continue IPO rush in 2022
The rush for initial public offerings by India’s technology startups is set to continue in 2022. While logistics firm Delhivery, online pharmacy PharmEasy, e-commerce company Snapdeal, hotel aggregator OYO and a host of others have already filed their IPO prospectuses, unicorns like Ola, Capillary and OfBusiness are expected to join the party in 2022.
Why it’s important: One of the factors expected to drive the IPO momentum in 2022 will be several pro-industry policies in the anticipated in the national budget. However, listings in the stock exchanges many not always be smooth, as was seen in several instances in 2021.
Price of gold price may cross Rs 55,000 per 10 gm in 2022
Gold lost its attractiveness to an extent in the second half of 2021. It is likely to regain momentum in the new year and cross the Rs 55,000 per 10 grams amid pandemic woes, inflation worries and stronger US dollar.
Why it’s important: Rising inflation tends to drive gold demand. Gold is perceived as a strong hedge against inflation and decades of data supports this assumption, analysts said. However, rising interest rates could cap some of the gains as they increase the opportunity cost of holding gold.
Spending on credit cards decline almost 12 percent after record high in October
Credit card spends, which had hit a record high in October, dipped 11.6 percent in November on a monthly basis, but rose by 43 percent on an annual basis, thanks to recovery in economic activity and a rise in the share of e-commerce transactions.
Why it’s important: The pandemic restrictions have seen a rise in credit card spends, particularly since July after the second wave receded. They have been even higher than the pre-pandemic levels. New credit card additions topped 1 million for the third consecutive month in November, taking the total credit cards in the market to 67.58 million.
Panel formed to prepare energy transition roadmap for India
The government is planning to draw up an energy transition roadmap for the oil and gas sector that could prove to be a key step on India's path to net-zero emissions by 2070. The oil ministry has set up the Energy Transition Advisory Committee headed by former petroleum secretary Tarun Kapoor to draft the strategy.
Why it’s important: Oil and gas are key in energy transition and meeting the net-zero target. The International Energy Agency's outlook for India found that its current policies would see a huge expansion in the transport sector. An extra 25 million trucks are expected on the road by 2040 and more than 300 million vehicles will be added to India's fleet by that time. Unless there is a dramatic shift toward e-vehicles, the projections suggest India's fossil fuel import bill will triple over the next two decades.
IT minister launches India’s semiconductor mission
Information Technology Minister Ashwini Vaishnaw has launched the India Semiconductor Mission. Companies interested in tapping the Rs 760 billion incentives earmarked by the central government for development of semiconductors and display manufacturing ecosystem in India can begin applying from January 1.
Why it’s important: A financial support for six years from the date of approval of up to 50 percent of project cost has been approved for setting up certain variants of silicon-based semiconductor fabs in India. A support of up t0 Rs 120 billion per fab has been earmarked under the scheme for setting up display making factories.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.