businessline's State of the Economy Podcast

In this State of the Economy podcast, Dr B K Singh, Director BKC Aggregators Pvt Ltd, ex-Founder SKYMET and businessline’s Subramani Ra Mancombu discuss the outlook for the current Kharif season in India, following a challenging period of drought and dry conditions due to El Niño from June 2023 to May 2024.  

The Indian Meteorological Department (IMD) forecasts above-normal rainfall, and international agencies predict La Niña, which could bring abundant rains to India, though low reservoir levels remain a concern. 

Dr. Singh highlights that the monsoon is expected to be irregular. The forecast indicates normal rainfall in Western India, covering Maharashtra, Gujarat, Goa, and Karnataka, while deficits are expected in the eastern regions such as Orissa and Jharkhand, and parts of Madhya Pradesh. The monsoon's distribution might improve from July to September in the southern and western regions, but deficits could persist in the east. This irregular pattern could pose challenges for farmers during critical periods of crop growth. 

Paddy sowing has already begun, and Dr. Singh expects a good crop this year, despite initial challenges in transplantation in regions like Uttar Pradesh, West Bengal, and parts of Madhya Pradesh due to expected rainfall deficits. Cotton, groundnut, and maize are anticipated to benefit from the favourable rainfall patterns. However, soybeans might face issues due to irregular rainfall in Madhya Pradesh, which is crucial during the post-sowing germination and grain formation stages. 

Reservoir levels, particularly in the southern region, are currently low, posing a threat to water availability for both drinking and agricultural purposes. The storage capacity utilisation is notably low, with southern reservoirs at only 13 per cent capacity. Dr. Singh anticipates good rainfall in the catchment areas from July to September will help replenish these reservoirs, mitigating some of the current shortages by August. 

Despite rising input costs, particularly in northern India, farmers are likely to continue cultivating cotton due to good prices. Dr. Singh is optimistic about the cotton scenario, particularly in regions like Punjab and southern India. He also hopes that the government will allow free export of rice to ensure better returns for farmers.  

(Host: Subramani Ra Mancombu, Producer: Anjana PV)

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

In this episode of ‘State of Economy’, businesslines’s Shishir Sinha speaks to Rishi Shah, Partner and Senior Economist, Grant Thornton, to discuss the latest high-frequency economic indicators released over the past week. 

The conversation starts with an analysis of GDP numbers for FY24 and Q4 FY24, which have surpassed expectations. Rishi discusses the strengths in manufacturing and services sectors while addressing concerns about data discrepancies, particularly the gap between Gross Value Added (GVA) and GDP.

Regarding mixed signals in consumption patterns, Rishi mentions that while high-end consumption is on the rise, overall consumption remains subdued. The decline in entry-level vehicle sales and the increase in higher-end vehicle sales indicate income transitions.

Examination of the revised fiscal deficit estimate for FY24 at 5.63%, down from 5.8%, and the FY25 budget estimate of 5.1%. Rishi emphasises the need for continued government spending on public welfare and infrastructure, despite potential surplus transfers from the RBI and profits from public sector banks (PSBs) and central public sector enterprises (CPSEs).

Rishi talks about the May GST collection of ₹1.73 lakh crore, following a record high in April. The conversation later shift to whether this reflects increased pricing or a shift towards higher-end consumption rather than broad-based consumption growth.

Interpretation of the PMI manufacturing figure, shows a slight dip to 57.5 but remains in expansion territory. Rishi explains why, despite the downtick, it indicates positive manufacturing activity.

Predictions for retail inflation, expected to stay around 5%, influenced by core inflation trends and volatile food prices. Rishi anticipates some volatility in food prices due to seasonal factors, impacting the overall inflation trend.

Listen in.

In the latest State of the Economy podcast, Kurmanath KV and Vishal Salvi, CEO of Quick Heal Technologies Limited look at the issue of cybersecurity threats during elections.

The episode, which is the first of a new series of podcasts on cybersecurity, looks at how and why hackers are targeting elections globally, including recent events in India, and discusses the sophisticated methods used to manipulate election outcomes and extract valuable information. Salvi outlines two primary areas of concern in election-related cybersecurity.

First, the manipulation of narratives through social media and other digital platforms, which can significantly influence election outcomes. “The manipulation and the method that threat actors use can only be countered by solutions provided by cybersecurity,” says Salvi.

The conversation highlights the evolution of cyber threats with the advancement of artificial intelligence (AI).

AI has made it easier for hackers to create sophisticated phishing emails, multilingual scams, and deepfake videos that are difficult to distinguish from real content. “Now, with the advent of AI, the way phishing emails are written is so clever that they appear more genuine than even a real email,” Salvi points out. He emphasises that AI is a double-edged sword: while it empowers attackers, while also offering tools for defenders to counter these threats.

The podcast also throws light on the use of analytical software to gauge public opinion and deepfake technology to create misleading videos. “These algorithms are so clever and so efficient that you can create a real-looking video with a fake narrative,” he notes. Salvi stresses the importance of robust cybersecurity solutions that can detect and prevent such manipulations.

Cyber threats are global now, with malware often being written overseas but executed locally, creating a complex ecosystem of cybercriminal activities. “In the digital and cybersecurity world, there are no boundaries. You don’t need a passport or a visa to enter one computer from another, and because of the internet, everything is connected,” says Salvi.

Salvi advocates for a multi-faceted approach to cybersecurity during elections, involving proactive government policies, public awareness campaigns, and advanced technological solutions. He commends the Indian government’s proactive steps before the recent elections but calls for ongoing efforts to establish a comprehensive policy framework to ensure all stakeholders, especially ISPs, are held accountable for monitoring and removing malicious content.

To conclude, Salvi calls for collective effort to address the systemic issue of cybersecurity in the digital age. He emphasises that the threat extends beyond elections and requires a combination of policy, awareness, and technology to protect against the ever-evolving landscape of cyber threats.

Listen in! 

(Host: Kurmanath KV, Producer: Siddharth Mathew Cherian)

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About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

In this episode of the State of the Economy podcast, businessline’s Haripriya Sureban, talks to Ritesh Tyagi, Vice President & Global Head, VLSI Practice & Engineering Wipro, Ameer Saithu, Executive Vice President at HCLTech, Siva Polimetla, Head ER&D, nasscom and Ashish Kushu, CTO, LTTS about India's growing prominence in the global semiconductor engineering research and development sector.  

The podcast begins by mentioning the opportunities for Indian service providers, highlighting the global talent shortage in chip design as an opportunity for Indian service providers. 

Saithu emphasises the importance of supply chain resilience and the boom in investments across various segments of the semiconductor industry, driven by technological advancements like AI.  

The podcast goes on to mention global semiconductor industry trends, discussing the increased demand due to factors like AI adoption, supply chain disruptions leading to a focus on resilience, and increased investment in chip manufacturing across the ecosystem. 

The episode concludes with a discussion on the government's role in supporting semiconductor R&D in India. The experts propose matching grants for priority sectors, developing R&D infrastructure, and creating specialised skill development programs to address the diverse needs of the semiconductor value chain. 

Host: Haripriya Sureban; Producer: Amitha Rajkumar

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About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups 

In this episode of the State of the Economy Podcast, host Rishi Ranjan Kala discusses India's rising power demand with Anujesh Dwivedi, Partner, Deloitte India, an expert in the power utilities and renewables sector. Dwivedi highlights the rapid growth in India's power demand, which has been increasing by over 5 per cent annually and saw a 12-13 per cent rise last year. In May 2024, India recorded its highest ever peak demand of 246.1 gigawatts, driven by searing heat waves across northwestern and central India. 

Dwivedi explains that the daytime peak demand is largely met due to the substantial solar capacity in the country, while the challenge lies in the evening when solar power is not available. He commends the government's efforts in managing this demand through various measures, such as mandating coal and gas-based plants to be available during summer months, rescheduling plant maintenance, and increasing coal production. These steps have helped ensure that the demand is met despite the challenges. 

Renewables, particularly solar energy, have played a crucial role in managing daytime peak demand. However, evening peaks still rely heavily on thermal power. Dwivedi also discusses the potential of renewable energy combined with storage solutions to provide reliable, dispatchable power. He notes that while renewable energy tariffs are competitive, the integration of gas-based power, especially if GST is removed from gas, could further support the power sector. 

Urbanisation and economic growth are major drivers of increasing power demand. Dwivedi emphasises the correlation between development and energy consumption, predicting that as India's per capita GDP rises, so will its electricity consumption. The conversation concludes with a look at the future impact of electric vehicles and AI-driven data centers on power demand, highlighting the need for continued innovation and adaptation in the sector. 

 (Host: Rishi Ranjan Kala, Producers: Anjana PV & Siddharth Mathew Cherian)

The Competition Act 2002 governs mergers, acquisitions, and amalgamations to prevent anti-competitive practices and ensure fair competition. 

Traditionally, the Competition Act uses asset and turnover thresholds to determine if a transaction needs to be notified to the Competition Commission of India (CCI). 

However, this approach has faced criticism, especially with the advent of digital markets where high-value transactions may involve companies with low tangible assets or revenue, potentially escaping regulatory scrutiny.

To address this gap, the Indian government introduced the concept of “deal value thresholds” (DVTs) through the Competition (Amendment) Act 2023. 

So what are DVTs? Put Simply, DVTs require transactions above a certain deal value to be notified to the CCI, regardless of the asset or turnover of the companies involved. 

This aims to capture high-value transactions in the digital and other sectors, where companies like startups might have high valuations due to data or intellectual property but low traditional financial metrics.

Implications for Digital Markets

The introduction of DVTs holds significant implications for digital markets. It would lead to increased scrutiny —High-value acquisitions, especially involving startups or tech firms with valuable data or IP, will be scrutinized to prevent monopolistic practices.

The introduction of DVTs also ensures level playing field. Smaller but highly valued companies will be subject to regulatory checks, ensuring that larger firms cannot bypass competition laws by acquiring emerging competitors.

The other implication is on Market Dynamics. Investors and companies might adjust their strategies, considering the additional regulatory requirements and potential delays in deal finalizations.

Utility of Deal Value Thresholds

DVTs can help capture High-Value Transactions: By focusing on deal value, the CCI can better oversee mergers and acquisitions that might affect market competition, regardless of traditional financial metrics.

DVTs can help in Future-Proofing Regulation. As digital and tech markets evolve, DVTs offer a flexible mechanism to adapt to new business models and market structures.

DVTs also encourage innovation. By ensuring that competitive dynamics are preserved, DVTs can foster an environment where innovation thrives without the fear of monopolistic dominance.

Challenges in Implementation

Defining Deal Value: Accurately assessing the deal value, especially in complex transactions involving stock options, earn-outs, or multi-stage investments, can be challenging.

Legal Uncertainty: Implementing DVTs might lead to legal ambiguities and disputes over valuation methods, necessitating clear guidelines and robust frameworks.

Market Reaction: Businesses might find ways to structure deals to avoid crossing the threshold, potentially complicating regulatory efforts.

While DVTs offer substantial benefits in capturing high-value, low-revenue transactions and preserving competitive market dynamics, their implementation poses challenges. 

Addressing these effectively will require clear guidelines, enhanced regulatory capacity, and continuous dialogue with industry stakeholders to ensure that the objectives of fair competition and market innovation are met.

So what are the unresolved issues and concerns around introduction of DVTs? When do the DVTs specified in the Competition law go live in the country?

What other implications would this move have for oversight of digital markets in India? Does DVT have implications for other sectors too?

To get a deep dive into world of DVTs, Listen in to the BL State of Economy Podcast with Dinoo Muthappa, Partner at Delhi Office of law firm Talwar, Thakore & Associates (TTA).

Host: Srivats KR, Producers: Rowan Barnett, Siddharth Mathew

In this episode of businessline's state of economy podcast, we discuss the T20 World Cup in the US and West Indies, the rise of new cricketing nations, and the impact of IPL's success on the sport's growth worldwide.

Host: Chitra Narayanan; Producer: Amitha Rajkumar

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About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups 

In this State of the Economy podcast, bl.portfolio Editor Parvatha Vardhini C, talks to Aashish Somaiyaa, CEO of WhiteOak Capital AMC on the current market dynamics and the post - election outlook. 

The discussion looks at the market’s recent performance influenced by election related volatility as well as record highs. Aashish highlights that market engagement is often driven by anticipation, saying, “It’s always interesting or exciting when there is something to look forward to. That keeps the market engaged and keeps it going.” 

About the recent market rally, “My sense is that from February-March 2024 onwards, the market has become a little more discerning, with a tilt towards good governance and quality. But before that, everything was just going up unilaterally,” he explains. 

Emphasising the importance of stock selection, Aashish notes that the market’s discerning nature means that not all sectors or stocks are performing uniformly. He points out the shift in market dynamics. 

Aashish discusses the performance of hot sectors like defence, PSUs, real estate, and autos, likening market behaviour to a pendulum swinging between extremes. He finds more margin of safety in private banks now, he says.

The podcast also looks at the Q4 earnings season, with Aashish observing sustained positive trajectories and no significant slowdowns. He predicts that financial, manufacturing, and industrial sectors will drive growth in FY25, despite external economic headwinds. 

On consumption, Aashish comments on the K-shaped recovery post-COVID, where urban and discretionary spending have seen more traction. “ Unfortunately, we haven’t seen a turnaround in rural demand yet,” he notes, suggesting that broader economic stimuli are necessary for inclusive growth. 

Talking on both gold and equities touching new highs at around the same time, Aashish critiques the industry’s skew towards equities in multi-asset funds, which often undermines the intended diversification. 

Listen in! 

(Host: Parvatha Vardhini C, Producers: Amitha Rajkumar, Siddharth Mathew Cherian)

About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups. 

In this episode of the State of the Economy podcast, businessline’s PT Jyothi Datta speaks to Dr. Sanish Davis, President, Indian Society for Clinical Research, to understand the Indian clinical trial landscape and how it stacks up against the global ecosystem.

"If you look at the number of studies that were done prior to the pandemic and the number of studies that are being done currently, there's definitely an uptick in the number of studies.", says Dr. Davis. He emphasises the increasing focus on unmet medical needs in oncology, immunology, and rare diseases.

Reflecting on past and present trial numbers, Dr. Davis remarks, "The reality is that the companies who are doing studies in India are very sure that these products will be marketed in India," highlighting India's growing prominence as a hub for clinical research. 

Davis talks about the regulatory landscape, explaining the significance of the 2019 New Drugs and Clinical Trial Rules. He underscores the need for streamlined approval processes. 

"We need regulations which actually can work for these innovations when they come out," says Dr. Davis on emerging therapies, underscoring the importance of aligning regulatory frameworks with scientific advancements. 

Addressing participant safety, he highlights India's unique provisions for medical management and compensation in case of trial-related injuries. "India is probably the only unique country in the world where a clinical trial safety net is there,".

Listen in!

(Host: PT Jyothi Datta; Producers: Amitha Rajkumar, Siddharth Mathew Cherian)

In this State of the Economy podcast, businessline’s Raja Simhan talks to Dhriti Prasanna Mahanta, Vice President and Business Head of TeamLease Degree Apprenticeship about the dynamic world of India's logistics sector, exploring its rapid growth, job creation potential, and the transformative impact of technology and government initiatives.   

The podcast starts by focusing on the employment opportunities generated by the logistics sector, particularly in Tier 2 and Tier 3 cities. Mahanta shares his background, emphasising his role in promoting apprenticeships and skill development. He discusses the vital role logistics plays in India's economy, highlighting government initiatives like the Gati Shakti plan that have boosted the sector. 

Mahanta goes on to highlight the strategic importance of cities like Chandigarh, Nashik, Indore, and Coimbatore, which serve as logistics hubs due to their geographic advantages. These cities facilitate the efficient distribution of goods, contributing to the sector's overall growth and creating numerous job opportunities. 

The discussion wraps up by emphasising the critical role of the logistics sector in India's economy and its potential to create diverse job opportunities.  

(Host: Raja Simhan, Producer: Amitha Rajkumar)    

About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.