The Union Cabinet has approved a Rs38,000 crore subsidy for non-urea fertilisers during the 2023 Kharif season so that output is not impacted. During the Rabi season of 2022, government had provided similar subsidy of Rs52,000 crore. The government proposes to provide subsidy of Rs76/KG for nitrogen, Rs41/KG for phosphorus and Rs15/KG for potassic. Compared to last year, the subsidy bill has come down in line with the falling international prices of fertilizers. This will shield the farmers from global price volatility.
India’s current account deficit (CAD) is expected to narrow to 1.4% of GDP for 2023, compared to 3.2% of GDP in 2022. The absolute CAD expected in 2023 is $50 billion. As per a Goldman report, the trick could be done by global remittances which touched 3.2% of GDP in 2022 at $110 billion. In addition, Goldman report also expects the CAD to reduce because of a sharp boost to the services exports. India’s forex reserves have bounced back to $596 billion and the lower CAD should also keep our global ratings secure.
SBI Funds Management secured RBI approval to acquire up to 9.99% stake in HDFC Bank. RBI has advised the AMC to complete the stake buy within 6 months. It is known that HDFC Bank is currently in the middle of a merger deal with HDFC Ltd in a $40 billion deal to be completed by September 2023. RBI has asked SBI Funds to ensure that its holdings in HDFC bank stays below 10% mark. SBI Funds is already the largest Indian mutual fund by AUM, HDFC Bank will continue to be the second largest Indian bank post-merger.
In line with net-zero targets by 2070, India plans to achieve 500 GW of energy production from non-fossil renewable energy. For this, India will need 200 GW/H of battery storage by 2030. Currently batteries storage costs Rs10 per unit, against pump storage of Rs6 per unit. That is also the focus of government special PLI scheme. Currently, 172.54 GW of renewable energy is available in India, including 67 GW Solar, 43 GW Wind, 51 GW Hydro and 11 GW from bioenergy. Nearly 284GW is currently under implementation.
RBI has now clarified that spending in foreign exchange through international credit cards will come under the ambit of the RBI liberalised remittance scheme (LRS); with its annual limit of $250,000. Currently, the usage of international credit cards is not covered by the LRS limit. That means; even global card swipes will attract TCS of 20%, other than for education and medical purposes. Thus, international credit cards can no longer be used to skirt LRS limit of $250,000, effective immediately. This includes business travel.
Aditya Birla Capital launched Udyog Plus, an MSME-focused portal, to provide capital and other business solutions. This portal offers online loans up to Rs10 lakhs to MSMEs through product like supply chain finance and transaction-based loans. Loans up to Rs2 lakhs will need no collateral or documentation. The Udyog Plus is currently accessible through its web platform, with a mobile app to be launched soon. The MSME sector contributes about 30% of India’s GDP but has low credit penetration and this fills that gap.
Supreme Court granted SEBI time till 14th August 2023 to complete its probe into the allegations of stock price manipulation by Adani group. This direction was issued by a bench headed by Chief Justice DY Chandrachud. The court also directed the report submitted to the court be shared with concerned parties. Supreme Court had ordered the formation of a 6-member committee to probe allegations of stock manipulation against Adani Group. These were alleged by US based short-seller, Hindenburg Research.
The stock of LIC crashed 40% from its issue price in the last one year since its IPO. In the process, nearly Rs1.93 trillion of investor wealth got eroded. The iconic IPO had raised Rs20,557 crore from the IPO market in May 2022. Against the issue price of Rs949, the stock is currently trading around Rs570, which is close to its 52-week low price. That also meant that LIC has fallen out of the top-10 by market cap list. To add to its woes, LIC has also been hit badly by the new tax regime, which is showing in its monthly NBP flows.