Expresso Business and Finance News Highlights of the Week on 13 July 2024

Expresso Business and Finance News Highlights of the Week on 13 July 2024 Transcript

Let’s begin, the Union Budget for 2024 may announce a set of measures to placate the middle class, and the low-income population, which are hit by sticky food inflation and an income stagnation. While policymakers are working out the incentives, official sources said these could include personal income tax reliefs, higher retention level of Agniveers in the regular defence services, and more government support for urban housing to boost labour-intensive constriction sector. The government will also likely announce steps including an assured pension option as part of the increasing pensionary benefits to the government staff under the National Pension System. Quote Besides the poor, the budget will likely announce measures to soothe the middle class who are probably miffed unquote an official said.

Moving on, The government has approved the sale of wheat and rice in the open market for bulk buyers from next month from buffer stocks, in a bid to improve domestic supplies and preempt rise in the prices of the two staple cereals in the coming months, The food ministry has asked the Food Corporation of India to start offloading wheat and rice at a price excluding transportation at Rs 2325/quintal and Rs 2800/quintal respectively from August 1. According to an official note, the exact quantity of grain stocks to be offloaded will be decided by FCI in consultation with the ministry after keeping the stock for requirement under the public distribution system, buffer norms and additional quantity of 2 MT.

Next from Industry news, after tasting success in urban centres, quick commerce startups are now looking at Tier 2 and 3 markets as the next growth frontier. Replicating their Tier-1 success in smaller towns and cities, however, could take as long as five to seven years. And while the opportunity is huge, it will come with region-specific challenges, say analysts. Quote While convenience as a value proposition should hold in Tier 2 and 3 cities as well, lower AOV (average order value) and concentration of demand due to lower population density and a slow change in consumer behaviour, could adversely impact unit economics unquote Pankaj Makkar, managing director, Bertelsmann India Investments, told FE. The e-commerce market share of these geographies has been steadily increasing.

Meanwhile, As much as 40% of the budget allocation for the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme has already been utilised, implying that the government may have to increase the outlay for the demand-driven scheme from Rs 86,000 crore estimated in the interim Budget. However, it may still choose to retain the MGNREGS outlay at the same level in the full Budget to be presented later this month, as it has the option to provide supplementary funds as and when required, and account for these in the revised estimate. Till July 10, the Centre has spent Rs 34,056 crore for the scheme.

In other news, Indian dealmaking witnessed a total of 501 deals in Q2 2024, valued at $21.4 billion, stated Grant Thornton Bharat Dealtracker, Q2 2024 report. The Q2 recorded the highest quarterly volumes since Q2 2022, while values declined due to absence of big-ticket M&A transactions. Per the details, M&A and PE deals together stood at 467, valued at $14.9 billion. This reflects a 9 per cent increase in volumes, however, in value terms, deals posted a decrease of 28 per cent, primarily due to the previous quarter’s $8.5 billion Reliance-Disney mega-merger. The quarter featured one-billion-dollar deal and 30 high-value deals, marking a 58 per cent increase in high-value deals compared to the previous quarter, which had only 19 high-value deals including three billion-dollar deals.

Up next, the four Tata Group airlines have completed the harmonisation of operating manuals in the run-up to the Vistara-Air India merger and amalgamation of AIX Connect with Air India Express, a company statement said on Monday. Following the completion of the harmonisation of the operating manuals, Air India said there will be two separate manuals, one for the full-service carrier Air India and the other for the low-cost cost-carrier, Air India Express. Before this, all four airlines had separate operating manuals. The harmonisation will enable Tata Group airlines’ to align best practices and adopt common operating procedures. Over the last 18 months, a team of more than 100 members have worked to align on the best practices and adopt common operating procedures, Air India said.

Lastly, Maruti Suzuki has revamped its warranty programs in a move that significantly bolsters customer confidence. Effective for all vehicles delivered on and after 9 July 2024, the company has introduced a wider set of warranty packages. Previously, Maruti Suzuki offered a standard warranty of 2 years or 40,000 kilometres, whichever came first. This provided a safety net for essential components like the engine, transmission, electricals, and AC, but only for a limited period. Recognizing the need for more comprehensive coverage, the Indo-Japanese carmaker has generously extended the standard warranty to 3 years or 100,000 kilometres, whichever comes first. It’s important to note that consumables like brake pads, clutch plates, and wiper blades are excluded from the standard warranty coverage.