Business News at 10:00 am on 1st July, 2024

Let’s begin with the major update, The government is unlikely to make any change in the structure of capital gains taxes in the coming Budget, as it intends to defer the much-talked-about recast of these taxes to the budget for the next financial year, official sources indicated. The July Budget, however, might not include any changes in capital gains tax regime. Industry and tax experts have told the government that there is an urgent need to bring uniformity in capital gain tax rates among different asset classes to the extent possible, because currently there is no consistency in tax rates or holding periods for different types of instruments. Even within items in same asset class, there are disparate rates and tenures.

Moving on, The Centre will likely ramp up its target for monetisation of brownfield assets in the current finacial year to a record Rs 2 trillion in 2024-25, up from the original goal of Rs 1.67 trillion, in a move that will help ease the pressure on the Budget funds for infrastructure and welfare measures over the medium term. It had set an ambitious Rs 6 trillion asset recycling target under the National Monetisation Pipeline (NMP) over the four years through FY25, by monetisation (long-term leasing) of operational assets in sectors like roads, mining, power, petroleum and airports. After the general elections, the ministries have been sensitised about their goals as well and the revised plan will likely be firmed up shortly, the official said.

In other news, IPO-bound Ola Electric expects its electric vehicles (EVs) to be powered by in-house manufactured lithium-ion battery cells by early next year, according to the company’s chairman and managing director Bhavish Aggarwal. Quote, Early next year is when you can see our own cells in our own products, unquote, Aggarwal said at a press conference at the company’s headquarters in Bengaluru on Saturday. He further added that the company is in the final stages of the whole process and is only a few months away from finalising the production process and commercialisation. Ola Electric is ramping up the Ola Gigafactory, a 110-acre cell manufacturing plant located closer to its EV two-wheeler manufacturing plant in Tamil Nadu’s Krishnagiri district.

Meanwhile, The revival of the monsoon after a deficient June spell is good news for the fast-moving consumer goods (FMCG) market, especially in rural areas, top executives have told FE. But a closer look at rural inflation and real wage growth suggests rural revival will be gradual as consumers in the hinterland contend with shrinking wages and higher prices. Latest available data from the Centre for Monitoring Indian Economy shows that real rural wages contracted in as many as 25 of the 27 months up to February 2024. February, in particular, saw a big contraction, of 3.1%. The highest contraction recorded before this was 2.9% in September 2022, CMIE says. Rural inflation has outpaced urban inflation for 11 months in a row to May 2024.

Up next, Investments by companies and departmental agencies of the Central government (CPSEs) fell by a third on year to Rs 96,000 crore in April-May of the current financial year, reflecting the impact of the slowdown in spending during general elections. In April, the CPSEs’ investment showed an increase of 6.5% on-year to Rs 50,206 crore, before slowing down in May, the busiest period of the elections. The CPSEs, having annual capex target of Rs 100 crore and above have set a combined target of investing Rs 7.8 trillion in FY25. Railways Board and the National Highways Authority of India, whose capex are largely funded through the budget, account for Rs 4.29 trillion or 55% of the CPSEs’ capex estimate for FY25.

Moving ahead, Coal stocks at the country’s imported coal-based power plants, with combined capacity of 17.9 gigawatt (GW), fell to just 47% of the normative level, at 2.28 million tonnes as on June 28, data from the Central Electricity Authority showed. Moreover, as many as 184 thermal plants of the country – including domestic and imported coal based plants – with a total capacity of 211 GW have fuel stocks of just 66% the normative level at 46.8 million tonnes. This comes amid the rising demand for power and apprehensions of supply constraints as the monsoon season progresses. The government is fearing lower supplies of coal to thermal plants due to logistic issues during the monsoon season.

Lately, let’s take a look at the key stocks for today. GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a muted opening on Monday. GIFT Nifty traded lower as the index was down 4.50 points or 0.02% at 24,115.50 indicating a flat start for domestic indices NSE Nifty 50 and BSE Sensex on Monday. Previously, on Friday, the NSE Nifty 50 fell 33.90 points or 0.14% to settle at 24,011, while the BSE Sensex dropped 211 points or 0.27% to close at 79,033. Here’s a look at the key stocks to watch in trade – BEL, Future Retail, ITC, Tata Steel, Cochin Shipyard.