In partnership with

Good morning. the government must do three things to revive India’s economy; evident excitement in the stock market about India’s information technology (IT) services companies; and is clean air in India becoming a luxury? 

In other news, 2024 Wrapped — Spotify is out and it has been a good year for our daily podcast The Core Report. We saw a 266% gain in listeners and 564% gain in followers in the past year. We also had an average rating of 4.9! Needless to say, we’re thankful for all the love. For those of you who are yet to tune in, you can listen to it daily here. 

JANUS VIEW

How To Boost India’s Economy? If It Is To Prosper, India Must Urbanise 

A slowdown in India’s economic growth has been the main question with inflation running above India’s central bank, the Reserve Bank of India’s tolerance of 6%. Indians are feeling the pinch of it with high expenses including fluctuating vegetable prices. 

All parameters seem tepid. Manufacturing growth has been 2.2%, mining has contracted. At 3.5%, agricultural growth alone, of all sectors, turned out to be higher than in the comparable period of last year. Corporate results are subdued, urban consumption, anaemic. While government expenditure could have brought in momentum, data shows government capital expenditure, seven months into the fiscal year, has been only 42% of the total budgeted for the fiscal year. 

The government needs to do three things, for the economy to break out of its torpor. One, it needs to translate biggish budgetary outlays on capital expenditure into realised spending. Two, it needs to create a new public-private-partnership framework for infrastructure, to boost private investment in infrastructure. And, three, it needs to ask the RBI to hand over control and supervision of the government bond market to markets regulator the Securities and Exchange Board Of India (SEBI) to facilitate the creation of a more wholesome and integrated bond market.

What kind of infrastructure should the government be looking at? The answer lies in building new towns and increasing urbanisation.

PODCAST

FIIs Kick Off A 3,000-Point Surge In Sensex

On Episode 451 of The Core Report, financial journalist Govindraj Ethiraj talks to Alok Sama, former President & CFO of SoftBank Group International.

• FIIs kick off a 3,000-point surge in Sensex in hot December.

• Rupee projected to go below Rs 85 to the USD.

• Low air cargo capacity out of India will constrain smartphone exports.

• Sugar prices have fallen sharply.

• Understanding Masayoshi Son, the man behind Softbank..

  Listen online

CO:RELATION

Tailwind time for IT

The shares of Indian IT services companies are back to leading the charge in the stock market. The Nifty IT index has convincingly outperformed the Nifty 50 in 2024. A significant surge in IT shares started when Donald Trump won the general election last month. The Nifty IT jumped over 10%, while the Nifty 50 rose only 2%. With the US economy on an upswing and the US dollar strengthening against major currencies, major Indian IT services companies like TCS, Infosys, and Wipro shares are tracking the gains in the US markets. As the Indian Rupee touches record lows, that is considered a significant tailwind. 

It appears that investor expectations are already high for the December 2024 quarter financial performance. You can see the story clearly if you compare charts of the Nifty 50, Nifty IT and the US S&P 500. The Nifty IT index is now moving in tandem with the US S&P 500 and diverging from the Nifty 50. If you follow stock exchange announcements, you will see Indian IT services companies informing shareholders about institutional investor events held virtually or physically. The excitement is evident.

MESSAGE FROM OUR PARTNER

Learn AI in 5 Minutes a Day

AI Tool Report is one of the fastest-growing and most respected newsletters in the world, with over 550,000 readers from companies like OpenAI, Nvidia, Meta, Microsoft, and more.

Our research team spends hundreds of hours a week summarizing the latest news, and finding you the best opportunities to save time and earn more using AI.

Sign up with 1-Click

CORE NUMBER

$1.06 billion

This is the total value of Indian government bonds bought by foreign investors in four sessions till Wednesday, reported Reuters. This was in anticipation of easing of monetary policy by India’s central bank, the RBI after data showed weaker than expected growth. These bonds were bought under the fully accessible route through which foreign investors are allowed to buy certain government securities without restrictions. While these investors had sold bonds throughout November, there was a slight change in tactic ahead of RBI’s Friday policy meet.

FROM THE PERIPHERY

—❗Amid a proposal for change of GST rates for the apparel sector, the Clothing Manufacturers Association of India (CMAI) has raised concerns saying this would disrupt the formal retail sector and push consumers and businesses toward informal channels. The statement also said that this would be a problem for micro, small and medium enterprises (MSMEs) in the retail sector that are already facing losses and little profitability. The statement comes days after India's parliament was informed that 61,469 MSMEs registered under the government's Udyam Registration portal had closed as of November 15, 2022. Last year The Core had reported on how small and medium businesses in all sectors face challenges to keep afloat. 

—😷 Clean air now a luxury? New Delhi, India’s most polluted city, got a slight break from bad air on Wednesday, but a social media post by an American millionaire highlighted how that isn’t much cause to rejoice. The CEO popular for his project to reverse aging has posted repeatedly about the bad air in India during his trip, and how normalised it was for Indians. On Wednesday he posted on X a photo of a screen showing the air quality inside a Bengaluru hotel, The Oberoi, with the caption, “Hotel selling clean air as a service.” However, hotels aren’t the only ones using clean air as a selling point. Recently, Delhi’s Select City Mall posted a reel on its Instagram page, inviting shoppers to visit that mall as it offers “the luxury of breathing clean”. 

—💰 Russia is set to invest in manufacturing operations in India, signalling stronger economic ties. At the 15th VTB Russia Calling Investment Forum, President Vladimir Putin praised India's 'Make in India' initiative and the stable environment for growth, especially for Small and Medium Enterprises (SMEs), under Prime Minister Modi’s leadership. Key sectors for collaboration include IT, pharmaceuticals, railways, aviation and cybersecurity. Putin also mentioned Rosneft’s $20 billion investment in India and Russia's emerging domestic brands following Western exits. 

MESSAGE FROM OUR SPONSOR

Tired of Waking Up Tired? This Gummy Can Help

Craving knockout rest that doesn’t leave you groggy?

CBDistillery’s Enhanced Deep Sleep Gummies are formulated to relax your body and mind and keep you asleep through the night. Try them risk-free and save 25% on your first order with code SLP25.

Save 25%, Sleep Better

SUPPORT THE CORE

Dear Readers,

Some of you have written to us expressing your intent to contribute to The Core’s journalism. While we currently do not have a subscription or membership plan, you can still support us by clicking the link below.

Another way to support The Core is by sharing this newsletter with like-minded people in your communities, colleagues, friend and family.

Was this email forwarded to you? Subscribe