Latest news with #GoI
Economic Times
9 hours ago
- Automotive
- Economic Times
Tryst with EVs
iStock More than three decades ago, India saw an automobile revolution unfolding. GoI's pro-liberalisation policy thrust, which subsequently led to the opening up of the market, helped create an entire manufacturing ecosystem, making it possible to produce quality and affordable passenger cars. This enabled millions of Indians to fulfill their dream of owning a car. Today, personal mobility in India – and the world – is poised on the threshold of a tectonic transformation. It is now a globally acknowledged fact that reducing reliance on fossil fuels by replacing vehicles running on conventional internal combustion engines (ICE) with EVs is the need of the hour. Furthermore, for a country like India that has abundant sun, wind and water for RE and enough coal for thermal power, there is an absolute need to become self-reliant and stop importing millions and millions of barrels of oil. While government support has played an important role in creating a market for EVs so far, a 2023 McKinsey survey suggests that consumer preferences are also now driving the demand for electric cars. More than two-thirds of customers in the survey considered buying an EV as their next car purchase. The market is responding to this emerging EV demand. Car manufacturers in India are making considerable efforts towards designing and manufacturing EVs that are safe, comfortable, and offer quality features and style as preferred by Indian customers. Original equipment manufacturers (OEMs) are also building charging infrastructure at a record pace to ensure that the EVs have uninterrupted and adequate power supply. As of FY25, there are about 25k charging stations in India, a 2x growth since last over 50 mn passenger cars on the road, India is now the third largest passenger car market in the world, behind China and the US. The Indian PV market is expected to grow at 6-7% CAGR over the next 5 years, adding 5-6 mn cars a year. It is the need of the hour for a significant portion of these cars to be EVs. Not only are EVs better for our planet and air quality, but also for our current account, reducing our dependence on imports in a meaningful is encouraging to see that India is taking important policy strides to enable EV adoption. The government has given generous subsidies, such as the FAME (Faster Adoption and Manufacturing of EVs) scheme and lower GST rates, on EVs to stimulate consumer demand. Incentives to boost the manufacturing of batteries for EVs have also been provided. Moreover, OEMs, as a community, are working together to further EV awareness and effective policy measure is the corporate average fuel efficiency (CAFE) norm that mandates OEMs to manufacture more fuel-efficient vehicles, thereby limiting the carbon dioxide emitted by the total fleet produced by them in a year. Manufacturing and selling more EVs—which have zero tailpipe emissions compared to petrol or diesel cars—allows OEMs to comfortably meet their annual CAFE is now seeking to strengthen CAFE norms in existence since 2022, with an updated version that aims to significantly improve the fuel efficiency benchmark in India. Such a move will be a major turning point, as it will spur more carmakers to make an aggressive shift towards EVs, helping the ecosystem grow. Also, faster EV adoption will help create economies of scale, thereby improving the global competitiveness of India's auto industry. According to estimates, India's passenger EV market is expected to grow to 1.0 mn vehicles by at the crossroads of clean mobility and energy view electric vehicles not just as a technological shift, but as a strategic win for business, the economy, and the planet. This is the foundation of their commitment to the growth of the EV ecosystem in India. But unlocking their full potential will require collective and collaborative action—from both GoI and the entire manufacturing ecosystem. Policy interventions such as CAFE and other supply-side mandates to manufacture more EVs have played and will continue to play a critical role in this journey. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. From near bankruptcy to blockbuster drug: How Khorakiwala turned around Wockhardt Paid less than plumbers? The real story of freshers' salaries at Infy, TCS. As deposit ground slips under PSU banks' feet, they chase the wealthy If data is the new oil, are data centres the smokestacks of the digital age? Stock Radar: M&M likely to break out from 1-year consolidation range; time to buy? Will consumer stocks see a comeback this festive season? 12 stocks to keep an eye on even when analysts are not bullish Don't fear volatility, focus on businesses: 5 mid-cap stocks from different sectors with upside potential of up to 27% Best way to deal with volatility, just ' Hold' for wealth creation: 7 large-cap stocks with an upside potential of up to 41%
Economic Times
21 hours ago
- Business
- Economic Times
Air pollution norms went up in smoke
Bringing a decade-old tussle to a close, MoEF last week scrapped its 2015 norms for SO₂ emissions from coal-fired power plants (CFPPs), the chief source of these emissions. The rollback is significant given the country's reliance on coal, and it plans to add 80 GW of capacity by 2031-32. The country has been the world's top SO₂ emitter since 2017. Following this decision, NTPC asked BHEL to halt flue gas desulphurisation (FGD) installations at five under-construction CFPPs after GoI exempted most thermal plants from FGD requirements. As of February, 537 thermal units totalling 204 GW capacity were identified for installation of FGDs. The rollback raises key questions on the role of science in policymaking, the priority given to environmental and human wellbeing and gaps in regulation. MoEF claims its decision is 'based in science', suggesting the 2015 norms were not. The new rules classify SO₂ as a pollutant based on geography, not plant size or emissions. About 11% of plants-those within 10 km of Delhi-NCR or million-plus cities-must install FGDs by December 2027. Another 11% may or may not, depending on an expert review committee. Ambient air quality now takes precedence over pollution-at-source, which National Clean Air Programme (NCAP) had emphasised. None of the studies cited for the new rules were commissioned by the environment ministry. Weak implementation of continuous emissions monitoring made it difficult to challenge the rollback with source-level data. The real roadblock was who would foot the desulphurisation bill. Studies peg the cost at ₹0.5-1 crore/MW, adding ₹0.25-0.75/kWh to tariffs. Instead of addressing whether this cost would be passed on to consumers or subsidised, GoI returned to the old binary of cost versus environmental and human health.
Economic Times
21 hours ago
- Business
- Economic Times
Unexpected taxes: Are small merchants in India rejecting UPI due to GST overreach?
Digital disruption Until recently, GoI would have us believe, nothing was more certain than UPI and GST. This was not a bad thing. The former has allowed 300 mn Indians to enjoy the convenience and speed of digital payments, the transaction value of which topped ₹260 tn in FY2025 while the latter has allowed indirect tax payments to exponentially increase, achieving a record ₹22 tn in the same when the former is used to forcibly induce the latter, it is likely to stir rejection and resistance. Such is the case with the mounting volume of visible and anecdotal evidence in India-most recently observed in Bengaluru-of smaller merchants putting up 'No UPI, Only Cash' signboards. This is not a good sign. Digital payments operate in a two-sided market: users must discover enough merchants that accept this form of payment and merchants must experience material benefit to continue to accept the same. Thanks to the efforts of private operators, UPI user adoption and merchant acceptance grew exponentially. Any residual friction-usually the result of the fear of affordability-was minimised with the elimination of merchant discount rate (MDR). But while consumers enjoyed the ability to make payments via mobile phones, many small and medium physical merchants (SMPMs) have not seen a material uptick in their businesses on account of UPI-neither higher sales from the same cluster of patrons nor via the addition of new customers. Most accepted UPI because it cost nothing, and because small denomination notes were hard to come by. So, when the government, especially state governments, began to use UPI transaction data to present small merchants with a consolidated GST bill, merchant outrage was a result of being asked to pay a levy they had never been expected to suffer before, and a lingering suspicion that they had been won over with honest freebies only to be betrayed in taxing could have been managed differently. As a class, SMPMs are no different from early 20th century Americans. For the longest time, I-T had been deemed unconstitutional. Even after the passage of the 16th Amendment in 1913, when individual and small proprietorship earnings could be officially taxed (corporate tax for larger companies had only been introduced in 1909), less than 1% of the population complied. This continued, without state harassment until, in 1943, another Act allowed employers to withhold tax, making tax collection easy, frictionless and efficient. Another 25 years would elapse before the concept of an alternative minimum tax (AMT) absorbed those still remaining outside the tax net in the such, current SMPM misgivings are not without merit. Those that were forced to register for GST find that the simplified, but higher, tax rates eat into profits. Moreover, other complexities like technological integration, compliance requirements and working capital challenges linked to paying a one-time monthly bill have made many qualifying merchants-even those with a sense of probity-shy away from exploring the advantages of this simplified tax many SMPMs, originally exempted because their annual turnover did not exceed the minimum threshold of ₹40 lakh (₹20 lakh in the northeastern states), are being coerced by officials into paying a tax they cannot comprehend, and whose basis they vociferously deny. To this end, there is probably some truth in the rumour that state governments (especially those not aligned with the Centre) looking to make good on astronomical electoral promises, are trying to extract incremental state GST (SGST) -an intra-state toll within their control-from local merchants, to subsidise these profligate welfare schemes. And all on account of UPI transaction data. Merchant rejection of UPI is a worrying sign. It comes at a time when user growth is slowing, merchant onboarding is lagging and payment players have little incentive to boost usage. Meanwhile, RBI has mandated that ATMs carry more lower-denomination notes-making cash more accessible. Much better that GoI rationalises GST rates for SMPMs, possibly creating a low and automatically deducted AMT after reducing GST threshold criteria, to make the levy both near-universal and palatable (a few coppers could be shared with payments ecosystem to sustain UPI momentum). GoI would not, after all, want to declare that either UPI growth or GST coverage was uncertain. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. What's keeping real retail investors out of the Nvidia rally If data is the new oil, are data centres the smokestacks of the digital age? The hybrid vs. EV rivalry: Why Maruti and Mahindra pull in different directions. What's best? Instagram and YouTube make billions off creators. Should they pay up for their mental health? Trent trips on the ramp. Is it still worth the splurge or time to change brands? Best way to deal with volatility, just ' Hold' for wealth creation: 7 large-cap stocks with an upside potential of up to 41% Stock picks of the week: 5 stocks with consistent score improvement with an upside potential of 16 to 38% in 1 year Headwinds, yes, but long-term story intact. 7 stocks from the engineering sector with upside potential from 21 to 42%
Economic Times
a day ago
- Business
- Economic Times
Malhotra's surprise rate cut sparks big expectations, but RBI's limits are showing
Agencies Monetary policy is a spectator sport. It wasn't always. Once upon a time, the actions of the central bank only electrified dealing rooms and jumpy traders. Today, they stir the hopes and ruffle the plans of homemakers, school teachers, shopkeepers and pensioners who react like never before when interest rates change. Household debts are well over 40% of GDP, up from about 30% a decade ago. Homes bought with borrowed money are the most longed-for asset after gold. With more people trusting the stock market to lift their fortunes as secured fixed-benefit pensions fade away and a high tax claws away meagre returns from FDs, RBI faces a vocal and burgeoning constituency. A faceless multitude, anticipating that life won't get any tougher, absorbs live TV commentaries, text messages from banks and brokers, and the rise and fall of stocks that follow policy announcements. It can overwhelm a central banker already dealing with nudges from GoI and unrealistic expectations from corporates. As governments have become less reliable, expectations from monetary authorities—often perceived to be more powerful than they are—have soared. Like in the days after the global meltdown, central banks have regained some of their lost ground in recent years by giving out forward guidance and handholding markets since Covid. But while they are expected to deliver, sometimes the unachievable, they have a bewildering job in a world that is more unpredictable and even threatening to alter the economic order that generations never questioned. In such a world, a central banker, particularly someone who is yet to fully grasp the lay of the land, is tempted to experiment, make a quick difference, and thus walk into a spot, leaving markets confused and everyone guessing what he would do next. That, many believe, is where Sanjay Malhotra finds himself now. As the new governor, Malhotra wanted to leave his mark. In June, he surprised markets with a half-point rate cut (against the widely expected quarter-point) coupled with a reduction in the reserve ratio, which released liquidity by letting banks park less cash with the RBI. He reminded many of Shaktikanta Das who, less than a year after joining, took the unorthodox step of lowering the benchmark interest rate by 35 basis points, a departure from the convention of changing rates by either 25 or 50 points. More significantly, Malhotra changed the policy 'stance' from 'accommodative' to 'neutral'. A stance in monetary policy is somewhat like the 'outlook' in a sovereign rating. Roughly put, the market interprets 'neutral' as either a hike or cut in the next policy, compared with either a cut or status quo under an accommodative stance. For Malhotra, 'neutral' was possibly a hint that there would be no cut in August, and perhaps a way to keep the doors open to a slim chance of a hike if tariffs or crude prices hardened. But since June, inflation has fallen a little more than expected. And, with Malhotra having said that RBI would be 'data dependent', the obvious question to crop up is: shouldn't he cut rates in August? With early festivals, when usually loans take off, shouldn't RBI make the most of the space created by softer inflation? RBI may prefer banks and borrowers to absorb the earlier actions, which could take 3 to 6 months to play out, before cutting again. But would that risk missing out on an opportunity to boost demand? Are lower rates the real trigger for borrowers? And should central banks become more light-footed and flexible with shorter pauses, reacting as and when surprises are thrown at them? There are no easy answers, though perhaps few would have raised questions had RBI let its stance remain 'accommodative' in June. Interest rate actions are transmitted through bank loans and bond prices, which haven't fully responded to the June measures. Loan demand is yet to pick up, and banks have parked idle funds, for which they could not find enough borrowers, with with the central bank mopping up unused liquidity, the interbank rate, a key money market indicator, hasn't dipped beyond a point. Having taken the uncommon step in June, there's only so much the central bank can do. The unfolding story is a reminder that GoI, businesses and consumers must temper expectations from RBI, which, in turn, should not shy away from spelling out its limitations in a world of mercurial presidents, climate change and a looming battle of tariffs and currencies. Financial markets must realise that the central bank's forward guidance, which they have become so used to since the pandemic years, won't last forever. And, like everything else, monetary policy, too, can change. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. What's keeping real retail investors out of the Nvidia rally If data is the new oil, are data centres the smokestacks of the digital age? The hybrid vs. EV rivalry: Why Maruti and Mahindra pull in different directions. What's best? Instagram and YouTube make billions off creators. Should they pay up for their mental health? Trent trips on the ramp. Is it still worth the splurge or time to change brands? Best way to deal with volatility, just ' Hold' for wealth creation: 7 large-cap stocks with an upside potential of up to 41% Stock picks of the week: 5 stocks with consistent score improvement with an upside potential of 16 to 38% in 1 year Headwinds, yes, but long-term story intact. 7 stocks from the engineering sector with upside potential from 21 to 42%
Economic Times
4 days ago
- Business
- Economic Times
Adding muscle to SBI's core strength
SBI is raising equity from institutional investors to bolster its capital base amid a strong cycle, with the ₹25,000 cr Qualified Institutional Placement (QIP) having started on Wednesday. The share sale will be followed by a ₹20,000 cr bond issue, together amounting to ₹45,000 cr and strengthening the country's largest has seen its market capitalisation more than double since the pandemic, but its capital adequacy has been trailing profits. The equity and bond issues are designed to set that balance right. The bank maintains a higher capital buffer because of its systemic importance, and this round of fundraising will augment it. GoI's stake in the bank will come down slightly but will stay well above a majority issue represents a strengthening of the health of PSBs that GoI had to recapitalise during a bad loan crisis a decade ago. But in recent years, state-owned banks have outpaced their private sector rivals in feeding India's post-Covid credit recovery Their financial metrics are improving, and they will find the capital markets supportive. Tapping markets is also a good option when the pace of raising deposits trails credit growth. Banks have been lending aggressively to households to feed a consumption boom. Economic and demographic changes are affecting household savings behaviour and diverting a bigger share into SBI issue also provides GoI a pathway to trim its holdings in PSBs to desirable levels. GoI has adjusted its divestment priorities from balancing the budget to a more holistic approach incorporating PSU asset value, earnings potential and capacity sector disinvestment has proved to be difficult. With banking being in one of its strongest cyclical phases, the SBI issue could be a precursor to capital-raising by other PSBs. They are also being encouraged to scale up subsidiaries in insurance and MFs prior to listing, which supports a gradual approach to divestment that yields higher value.
