Welcome to Seventh Newsletter of WII
Boosting Domestic Manufacturing
The Department for Promotion of Industry and Internal Trade (DPIIT) has proposed raising the minimum local content requirement for public procurement from the current 50% to a higher percentage. This move aims to bolster domestic manufacturing and reduce imports, aligning with the government's Atmanirbhar Bharat initiative.
The existing Public Procurement (Preference to Make in India) Order 2017 categorizes suppliers based on their local content percentage. 'Class-I local suppliers' offer items with ≥50% local content, 'Class-II local suppliers' offer items with ≥20% but <50% local content, and 'Non-local suppliers' offer items with <20% local content. The order grants purchase preference to Class-I local suppliers, allowing them to match the lowest price if their bid is within 20% of the lowest price.
Nodal ministries have the authority to prescribe a higher minimum local content percentage.The proposed increase in the local content threshold is expected to provide a significant boost to the 24 key manufacturing sub-sectors identified under Make in India 2.0.
By incentivizing domestic manufacturing and reducing reliance on imports, the move aims to strengthen India's manufacturing capabilities and promote self-reliance in strategic sectors. The DPIIT's proposal aligns with the government's broader vision of transforming India into a global manufacturing hub and reducing its trade deficit.
Rs.4.2 Trillion Investment
India requires an investment of Rs 4.2 trillion to propel its broadband connectivity ambitions, essential for enhancing the nation's telecom infrastructure to deliver high-speed internet access universally. In the fiscal year 2024, the government has earmarked Rs 975.8 billion for the telecommunications ministry, representing a 19% annual increase and 2% of the total budget. Notably, Rs 530 billion has been allocated for capital infusion into BSNL.
The Universal Service Obligation Fund (USOF) has disbursed approximately Rs 559 billion from fiscal 2014 to December 2023 for initiatives targeting telecom services in rural and remote regions.
The Digital India initiative, initiated in 2015, has garnered a cumulative investment of Rs 290 billion since fiscal 2017, with a budget of Rs 48 billion set for fiscal 2024. This underscores the government's dedication to fortifying the nation's digital infrastructure, fostering a knowledge-based economy, and empowering a digitally inclusive society.
India's potential to cultivate a $1 trillion digital economy by 2025 hinges on providing widespread, cost-effective internet access and fostering new digital ecosystems. However, states like Bihar, Jharkhand, Madhya Pradesh, and Uttar Pradesh exhibit the lowest internet penetration rates, ranging from 22% to 26%.
To realize its digital transformation objectives, India has identified 30 digital themes aligned with nine national priorities, encompassing 21st-century IT infrastructure, e-governance, healthcare, education, energy, and financial services. These digital interventions, if executed comprehensively, possess the capacity to elevate productivity, unlock efficiencies, eliminate growth impediments, and enhance the quality of life for millions across the nation.
Revolutionary India's Telecommunication Partnership
Airtel's recent partnership with Google Cloud in India marks a significant step towards enhancing its service offerings through cloud and Gen AI solutions. This collaboration emphasizes Airtel's strategic focus on leveraging Google Cloud's advanced technologies to elevate its service delivery in the competitive Indian market.
As a prominent player in the telecommunications industry, Airtel's decision to join forces with Google Cloud highlights its commitment to innovation and customer-centric solutions. By integrating Google Cloud's expertise in cloud computing and artificial intelligence, Airtel aims to revolutionize its service portfolio, catering to the evolving needs of its diverse customer base.
This partnership shows that Airtel is quick to use new technologies and commitment of staying ahead in the changing digital world. Through this partnership, Airtel is ready to unlock new opportunities for growth, efficiency, and customer engagement. By harnessing the power of cloud and AI solutions, Airtel can streamline its operations, enhance service quality, and deliver personalized experiences to its customers.
This strategic alliance with Google Cloud positions Airtel as a frontrunner in adopting transformative technologies to drive business success and customer satisfaction in the dynamic Indian market.
In essence, Airtel's collaboration with Google Cloud represents a strategic move towards harnessing the potential of cloud and AI solutions to redefine the telecommunications landscape in India, setting a new standard for innovation and customer-centric service delivery.
Tata Motors overtakes TCS
Tata Motors, the automotive giant, has reclaimed its position as the most profitable company within the Tata Group after a decade. In the fiscal year 2022, Tata Motors reported a staggering profit of Rs 41,749 crore, surpassing its long-time rival, TCS, which recorded a profit of Rs 38,327 crore during the same period.
This remarkable achievement by Tata Motors can be attributed to its strategic focus on high-margin SUVs, which have gained immense popularity among consumers. Additionally, the company has successfully reduced its break-even volume threshold, allowing it to maintain profitability even during challenging market conditions.
Furthermore, Tata Motors' foray into the electric vehicle (EV) sector has been a game-changer, positioning the company for future growth and profitability. As the demand for eco-friendly transportation solutions continues to rise, Tata Motors' investments in EV technology have positioned it as a leader in the Indian market.
This shift in profitability within the Tata Group highlights Tata Motors' successful turnaround and its ability to adapt to changing market dynamics. The company's focus on innovation, cost optimization, and strategic decision-making has paid off, making it the most profitable firm within the group.
As Tata Motors continues to grow and expand its operations, it will be interesting to see how it maintains its competitive edge and sustains its profitability in the years to come.
Fed Rate Cuts
Federal Reserve Chair Jerome Powell indicated that due to ongoing high inflation levels, any potential interest rate cuts by the Fed are likely to be postponed until later in 2024. Powell expressed concerns that the current inflationary pressures may persist, leading to a delay in the Fed's ability to confidently reduce interest rates.
Recent economic data has not provided sufficient evidence of a significant decline in inflation, prompting Powell to suggest that the Fed could maintain its current interest rate position for an extended period if inflation remains elevated. This marks a departure from Powell's earlier statements in March, where he hinted at the possibility of rate cuts being imminent.
Inflation has continued to exceed the Fed's 2% target, with year-over-year inflation reaching 3.5% in March and core prices, excluding food and energy, rising for the third consecutive month. The strong economic growth further complicates the decision-making process for the Fed regarding interest rates.
Market expectations have adjusted accordingly, with forecasts now indicating only two rate cuts in 2024, with the first potentially occurring in September, a significant shift from initial projections of up to six cuts by the end of the year. While the Fed acknowledges the persistent inflationary pressures, they remain cautious about the timing of any rate adjustments, emphasizing the need to balance economic growth with inflation control.
Powell's remarks suggest a potential need for a prolonged period of higher interest rates to combat inflation, with the possibility of adjustments based on unforeseen changes in the labor market.
TRAI Stricter Measures
The Telecom Regulatory Authority of India (TRAI) is taking significant action to combat unsolicited commercial communications (UCC), commonly known as "pesky calls and messages". The regulator is proposing measures to enhance the effectiveness of telecom service providers (telcos) and telemarketers in preventing and resolving this issue.
Telcos will be required to implement robust controls and checks to proactively identify and block UCC sources. They will also need to strengthen their UCC detection and prevention mechanisms by upgrading their technology, employing advanced analytics, and implementing sophisticated algorithms. This will enable telcos to identify and filter out UCC at the source, providing consumers with a more effective solution.
To ensure compliance, TRAI is considering stricter penalties for telcos that fail to curb UCC originating from their networks. These penalties may include monetary fines or other punitive actions, incentivizing telcos to take proactive measures to prevent UCC and adhere to regulations. Telemarketers will also be held more accountable for sending unsolicited communications, with stricter registration requirements, mandatory disclosures, and penalties for non-compliance.
TRAI aims to enhance the communication process between telcos and the regulator to enable early detection and reporting of UCC issues, allowing for timely intervention and resolution. By empowering consumers to report and seek redressal for UCC-related complaints, TRAI is committed to providing them with more effective means to address this nuisance.
Through these measures, TRAI is determined to significantly reduce the number of pesky calls and messages received by consumers by enhancing compliance and accountability among telcos and telemarketers. The regulator's efforts demonstrate a strong commitment to protecting consumer rights and ensuring a more favorable communication landscape in India.
Quick View👀
BEML Ltd bags order worth Rs 250 crore from Northern Coalfields for rear dump trucks
India's forex reserves rose for the second straight week, up by $2.56 bn totalling to $644.15 bn as of May 10.
PB Fintech's top executives, Alok Bansal and Yashish Dahiya, sold 83.7 lakh shares that is 1.86 per cent stake in the insurance aggregator for ₹1,109 crore in block deals.
Vodafone Idea CEO Akshaya Moondra on Friday said the company is planning to incur a capital expenditure of Rs 50,000-55,000 crore over the next three years, on the back of recent equity fundraise and proposed bank funding.
IOC, BPCL and HPCL collectively posted a record profit of around Rs 81,000 crore in the financial year 2023-24, surpassing their earnings in pre-oil crisis years, with IOC alone reporting a standalone net profit of Rs 39,618.84 crore, BPCL at Rs 26,673.50 crore, and HPCL at Rs 14,693.83 crore.
The JK Cement Q4 results show a significant increase in YoY net profit by 101% to ₹220 crore, with the company also declaring a dividend of ₹20 per share.
In April, India's retail inflation slightly decreased to an 11-month low of 4.83%, as reported by the Ministry of Statistics and Programme Implementation.
Unemployment Rate in India’s urban areas decreased from 6.8% to 6.7% during January March 2023 to January March 2024 for persons of age 15 years and above.
The government is aiming to develop a skilled workforce of about 600,000 people over the next six years to power its ambitious project of ₹20,000 crore National Green Hydrogen Mission.
Bharti Airtel reported a 31% drop in net profit to Rs 2,071.60 crore for Q4 fiscal year 2024, it can be due to currency devaluation in Africa.
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