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Expresso Business and Financial News Highlights of the Week for June 16, 2024
Expresso Business and Financial News Highlights of the Week of June 16, 2024 Transcript
Let’s begin: India’s retail inflation based on the Consumer Price Index likely rose to a three-month high of 5% in May, mainly due to the rise in vegetable and pulse prices, according to a survey median with 18 economists led by FE. In April 2024, global inflation was 4.82%, and in May 2023, it was 4.31%. The Office of National Statistics will release CPI data for May on Wednesday. Economists’ estimates for the May CPI print ranged from 4.5% to 5.2%. If the headline reaches 5%, the overall index will increase 0.7% month over month, at the highest pace in 10 months.
Next – The Center has revealed cost overruns in excess of Rs 5.5 lakh crore in 448 infrastructure projects in April 2024. Notably, the proportion of cost overruns in central government projects has increased to a maximum of 12 months of 20.09% in April, up from 18.65 percent. in the previous month. Of the 1,838 projects assessed, 448 reported cost overruns and 792 experienced delays. The original cost of these 1,838 projects, each valued at Rs 150 crore or more, was Rs 27,64,246.50 crore. However, the anticipated completion cost is now projected at Rs 33,19,601.84 crore, marking an increase of Rs 5.6 lakh crore over the original estimates. The report also noted that the number of delayed projects decreased to 514 when calculated based on the latest completion schedule.
Moving on – the Adani Group, which is setting up two wind power projects in Sri Lanka totaling 484 MW, has offered to supply renewable energy at LKR 24.75 per unit, much lower than the country’s existing tariffs. This offer is significantly lower than the tariffs for existing renewable and traditional energy sources in the country, which vary between 8.75 and 26.99 cents, according to a compilation of energy tariffs. The Sri Lankan government has entered into a 20-year power purchase agreement with Adani Green Energy for power from wind farms in Mannar and Pooneryn. AGEL is the entity through which the Indian conglomerate is implementing renewable energy projects in Sri Lanka.
In another development – packaged food major Nestlé India said it would pay royalties to its parent company Société des Produits Nestlé at the current rate of 4.5%. The announcement comes after more than 57% of shareholders last month rejected the company’s proposal to increase the royalty rate to 5.25% over five years. Proxy consultancy IiAS also advised shareholders to vote against the proposal. Nestlé said its decision to continue with the current royalty rate was made “respecting the decision of members and feedback from other stakeholders”. If the proposal to increase royalties had been carried out, Nestlé’s royalty rate would have been among the highest in the country’s rapidly evolving consumer goods industry.
Meanwhile – Fueled by economic diversification, rising consumer demand and the reversal of migration patterns accelerated by the pandemic, the property markets of Tier 2 cities are witnessing remarkable growth trends, and these once-neglected urban centers are quickly closing the gap with its Tier 2. 1 counterpart urban centers, according to Housing.com’s ‘The Bharat in India’ report. This increase can be attributed to the growing economic potential of these cities, attracting a growing flow of residents. Namely, this trend gained momentum following the pandemic and was fueled by the phenomenon of reverse migration. Economic dynamism has had a multiplier effect on the real estate market in Tier-2 cities, especially in the retail, warehousing and residential segments.
In other news – With wide brands available across online and offline platforms, consumers tend to get confused about what to buy and what not to buy. In fact, 76% of consumers in India feel inundated by too many options, while 74% say they are bombarded by advertising, resulting in 88% of the masses abandoning purchases in the last three months of 2023, reveals latest Accenture report . The report is based on a survey of 19,000 consumers in 12 countries. It highlighted that 67% of people see no improvement or even see an increase in the time and effort needed to make a purchasing decision. This consists of the 40% who think it has become more difficult, 28% who see no change and 33% who think it takes less time and effort.
Lastly – Indian universities and higher education institutions will now be able to offer admissions twice a year, similar to the practice in foreign universities, following approval from the University Grants Commission, the university body’s head Jagadesh Kumar announced. The two admission cycles will be scheduled for July-August and January-February, starting with the 2024-25 academic term. According to Kumar, semesterly admissions in universities will help students maintain motivation as they will not have to wait for an entire year to get admission if they miss out on admission in the current cycle. With semester admissions in place, industries can also conduct on-campus recruitment twice a year, improving employment opportunities for graduates.