businessline's State of the Economy Podcast

In this State of the Economy podcast, businessline’s Abhishek Law chats with Sidharth Menda, member of the supervisory board at RMZ Corporation, a pioneering real estate firm in India. 

They begin the conversation by discussing what's really going on in India's property market post-COVID. Sidharth shares that, as a result of the establishment of Global Capability Centres (GCC) and new foreign businesses in India, there has been a shift from working from home to working from the office, which in turn has become one of the leading factors in the commercial office real estate boom. He breaks down why India's office sector is thriving despite global trends suggesting otherwise and how new homes are seeing a surge in demand from new buyers.

But, it's not just about homes and offices. They also explore areas like industrial warehouses and data centres. Due to India's geographical location, Sidharth explains why India is becoming a major hub for data centres in South Asia. Then they discuss why big businesses are flocking to India and what's driving the growth of these new sectors. 

As they turn to the hospitality industry, they look at why hotels are enjoying a resurgence in footfalls, with people travelling more than ever and spending big on vacations. And even though real estate costs are going up, it seems like there's still plenty of room for growth in the hospitality sector. 

Tune in to know more on what's happening in India's real estate world.

In this State of Economy Podcast, businessline’s Haripriya Sureban talks to Vikas Bhalla, President and Head of Insurance Business at EXL, and Srikanth Srinivasan, Vice President and Head of Membership and Outreach at nasscom, on the impact of generative AI on India's BPM (Business Process Management) sector. 

Srikanth kicks things off by painting a picture of India's impressive tech landscape, highlighting how the BPM industry is a key player, contributing billions to the economy and holding a top spot in global services rankings. 

“AI has played a significant role in enhancing productivity, ensuring high performance, enabling predictability, and advancing personalization from pure to hyper and even nano levels. Industries have leveraged technology extensively to create exceptional customer experiences,” said, Srikanth Srinivasan, Vice President & Head – Membership & Outreach, nasscom. 

Vikas helps break down how generative AI is shaking things up in BPM. “Every time there has been a new disruptive technology which has emerged, the BPM industry in India has adopted it extremely well and has also taken a leadership position in it. From automation to data and now to AI, this has been done in two ways - using new technologies to improve the existing set of services that it has and creating new sets of services based on these technologies,” said Vikas Bhalla, President, and Head of Insurance Business, EXL. 

But what about jobs? Vikas and Srikanth dive into the nitty-gritty, addressing concerns about automation while shining a light on the exciting new opportunities AI brings. They stress the importance of learning new skills and staying adaptable in a rapidly changing industry. 

Listen in to know more. 

Host: Haripriya Sureban, Producer: Siddharth Mathew

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 businessline State of The Economy Podcast, Rishi Ranjan Kala speaks with Arindam Ghosh, Partner Power Advisory at Nangia Anderson India, about the influence of artificial intelligence (AI) on the power sector.

“AI is becoming an integral part of all industries, including the power sector. Its ability to perform high-level cognitive processes is transformative for managing large-scale power systems,” Ghosh notes.

The discussion covers various AI applications within the power sector, such as grid optimisation, predictive maintenance, and cybersecurity. Ghosh adds, “AI-driven analytics can enhance grid reliability and security, effectively mitigating cyber threats.”

Ghosh discusses AI’s role in optimising energy consumption and minimising wastage in power systems. “Energy-efficient algorithms and smart grid technologies can significantly reduce energy consumption and improve overall system efficiency,” he emphasises.

He also addresses the challenges posed by AI’s escalating power consumption and its implications for power infrastructure. “Balancing growing electricity demand with efforts to enhance energy efficiency is crucial for sustainable power management,” he points out.

Moreover, Ghosh examines the ramifications of integrating AI into power systems, advocating for leveraging AI to optimise distribution networks and augment revenue collection. “AI can help identify areas of power theft and improve revenue collection for distribution companies,” he notes.

Host: Rishi Ranjan Kala, Producer: Amitha Rajkumar, Edit: 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

From the Fed's pivot in monetary policy to the likely stance of central banks worldwide, businessline’s Lokeshwarri S K discusses the shifting market sentiments along with Devang Shah, Head Fixed income at Axis Mutual Fund, in this State of the Economy podcast.  

The podcast navigates through the maze of macroeconomic data, exploring the interplay between geopolitical risks, inflationary pressures, and growth projections. Shah provides valuable insights into the bond market dynamics, shedding light on the factors influencing yields and the potential trajectory of interest rates. 

The discussion goes on to examine the ripple effects of Fed policy on global central banks. From the European Central Bank to emerging economies like China and India, they assess the different paths taken by policymakers in response to unique economic challenges.  

As the conversation draws to an end, the spotlight shines on the RBI's monetary policy stance amidst evolving global trends. Shah provides insightful commentary on how the RBI is navigating the complex terrain of interest rates, inflation dynamics, and external risks. 

In this State of the Economy podcast, TE Raja Simhan speaks to R Satyanarayanan, Sundram Fasteners Associate Professor, Marketing at IFMR GSB, Krea University, about the indispensable role logistics plays in ensuring the smooth conduct of elections across India's diverse landscape.

As the world's largest democracy undertakes this monumental exercise, the significance of logistics becomes increasingly apparent. 

Sathyanarayanan talks about the foundational connection between democracy and logistics. With 543 parliamentary constituencies spanning diverse terrains, from plains to mountains, deserts, and islands, conducting elections emerges as a large logistical challenge. 

During the podcast, Sathyanarayanan looks at the historical evolution of India's electoral process, tracing back to the ballot-based elections during the Chola dynasty and the transition to electronic voting machines (EVMs) in modern times. Satyanarayanan highlights the logistical complexities involved in deploying EVMs and election paraphernalia to over 10.5 lakh polling stations across the country, ensuring accessibility even in the remotest corners. 

The discussion reveals the multifaceted logistics of elections, encompassing the movement of election officials, security personnel, and campaign materials. Satyanarayanan details the meticulous planning required to navigate India's diverse geography, employing various modes of transportation, from helicopters and trains to mules and boats, to reach every polling station. 

Satyanarayanan also reflects on India's electoral journey, from ballot boxes to electronic voting machines, underscoring the pivotal role of a robust multimodal logistics system in sustaining the democratic process. 

Listen in. 

Host: TE Raja Simhan, Producers: Rowan Barnett, 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

India’s start-up ecosystem has experienced exponential growth over the past decade, emerging as the third largest globally.  India today has over 100 unicorns among the over 1 lakh registered start-ups in the country.

This burgeoning sector, while promising, confronts numerous challenges, particularly in the realm of governance. There have been several high profile governance lapses that caught the attention of global investing community, leading to sharp fall in valuations of few mature start-ups and compelled the government and policymakers to rethink the governance structures and standards. 

The governance framework for Indian start-ups is often characterised by nascent, if not rudimentary, structures. Many start-ups, initially family-owned or tightly-held, lack robust governance mechanisms typically seen in more mature corporations. This includes limited oversight roles, underdeveloped compliance procedures, and an absence of independent board members. 

Consequently, the governance in these entities sometimes struggles to keep pace with rapid growth, scaling, and the complexities of larger operations and broader investor pools.

Challenges 

The primary challenge lies in balancing agility with accountability. Startups are naturally inclined towards rapid decision-making and less bureaucratic frameworks which, while beneficial for growth and innovation, may compromise governance. Issues such as conflicts of interest, lack of transparency, financial mismanagement, and regulatory compliance are prevalent. The absence of stringent governance practices can deter global venture capital (VC) and private equity (PE) firms, who see governance as critical to investment security and operational sustainability.

Another significant challenge is the alignment of interests among founders, investors, and other stakeholders. Misalignments can lead to power struggles and strategic misdirection, affecting long-term growth and stability.

Regulatory Reforms Needed

To improve outcomes, India needs targeted regulatory reforms that reinforce start-up governance without stifling innovation. 

Some of the suggestions worth contemplating include Introducing requirements for independent directors and audit committees in start-ups that reach a certain size or investment level could ensure better oversight.

Start-ups should also be encouraged, if not mandated, to adopt higher levels of disclosure about financials, board decisions, and investor relations to build trust and accountability.

The government could consider incentives like tax breaks or funding support for start-ups demonstrating robust governance frameworks.

Global VC and PE Perception

Globally, VC and PE investors regard governance standards as a litmus test for investment decisions. The perception of India's start-up governance standards is mixed. While the market potential and the high rate of innovation attract investment, concerns about transparency, financial disclosures, and board integrity can deter it. Establishing clearer, enforced governance frameworks could not only attract more foreign investment but also improve the valuation of start-ups.

In conclusion, while India's start-up ecosystem thrives on its vibrant entrepreneurial spirit, strengthening governance standards is crucial to sustaining growth and attracting global investment. Regulatory reforms tailored to the unique needs of start-ups will play a pivotal role in shaping a more resilient and globally competitive landscape.

To get a deep dive on the governance issues around start-ups and what can be done to improve the situation, businessline spoke to Nikhil Bedi, Partner and Leader—Forensic, Financial Advisory, Deloitte India. 

Bedi, who has over 20 years of experience in fraud investigations, FCPA diligence, business intelligence and transaction diligence, has advised large private equity clients in the region on pre/post investment and operational risk mitigation strategies from a reputational perspective. 

In the latest episode of the State of the Economy Podcast, PT Jyothi Datta along with Dr. Hasmukh Jain, Professor of Medical Oncology at Tata Memorial Hospital, talk about the home-grown CAR-T cell therapy product and its use in treating cancer.

This product, locally developed through an industry-academia collaboration, involves key players such as the Indian Institute of Technology (IIT) Bombay, Tata Memorial Hospital, and industry partner ImmunoACT, (in which Hyderabad-based Laurus Labs holds about 34 percent equity). 

Tata Memorial’s Dr Hasmukh Jain explains that CAR-T cell therapy works on a personalised approach, where a patient’s T cells are genetically engineered and re-introduced to target and eliminate cancer cells effectively.

Since its approval last October in India and launch in December, approximately 25 patients have been treated with positive results consistent with clinical trial outcomes. Differentiating CAR-T cell therapy from stem cell therapy, Dr Jain explains its potential to cure a specific type of blood cancer. He highlights the therapy's effectiveness in treating B-cell acute lymphoblastic leukemia and lymphomas, which historically had dismal outcomes with conventional treatments. 

The podcast also looks at the cost and accessibility of CAR-T cell therapy. While the locally developed version is more affordable than its international counterparts, it remains expensive for many patients. However, efforts are underway to make it more accessible through governmental assistance, CSR funds, and insurance coverage. 

Challenges such as scaling up production and managing post-infusion complications are addressed. Dr Jain explains the need for skilled manpower and continuous monitoring to ensure patient safety. 

Looking forward, Dr Jain discusses ongoing research to expand CAR-T cell therapy's application to other cancers and autoimmune disorders. Additionally, advancements in manufacturing processes aim to enhance scalability and reduce costs further.

(Host: PT Jyothi Datta, Producer: Siddharth Mathew Cherian)

In this episode of the State of the Economy podcast, the focus was on the potential impact of generative AI on the Indian tech sector. businessline's Kurmanath K V spoke to Sudha Reddy, co-founder of Rava.AI, and Jaspreet Bindra, founder of Tech Whisperer and a prominent figure in generative AI from INDIA, who shared insights and perspectives on this transformative technology.

The discussion highlighted how generative AI holds promise across insidious such as education, healthcare, e-commerce, and logistics. Investments in generative AI are expected to drive significant growth in IT spending by 2024, according to Gartner research.

While India may have been slower to embrace the AI revolution, there are substantial opportunities for growth, especially with an emerging startup ecosystem and increased investments in generative AI capabilities by IT companies. Reddy introduced Rava.AI's Marketing Copilot, a generative AI-powered solution aimed at revolutionising marketing strategies for startups.

Bindra emphasised the importance of bold ambitions to leverage generative AI effectively, envisioning a future where such technology is accessible to Indian users at affordable rates through innovative approaches. The conversation also touched on challenges faced by startups adopting generative AI solutions, such as talent shortages and technology adoption hurdles, with both speakers stressing the need to focus on India's strengths to deliver scalable solutions.

The episode highlighted the importance of inclusiveness, teamwork, and setting high standards in integrating generative AI into the Indian tech scene, exploring the limitless possibilities of this technology and its impact on the economy and society.

In this State of the Economy podcast, businessline's MR Subramani speaks to Kunal Lagu and Parag Lagu, Directors of Lagu Bandhu , on the recent surge in gold prices, and its implications for global commodities.

The podcast explores various topics, including escalating geopolitical tensions, conflicts between Israel and Hamas, to the ripple effects of US interest rate adjustments, the consequential impact of a weakening dollar, and their impact on gold prices. Kunal and Parag Lagu talk about the complexities of the gold market, offering insights on the evolving dynamics, particularly within the context of India's economic landscape.

As the nation anticipates the onset of the forthcoming wedding season and eagerly awaits the highly anticipated Asia's gold expo, the speakers analyse the convergence of these events with the current surge in gold prices and explore the potential implications for consumers and businesses, shedding light on emerging trends and strategic considerations.

Analysing consumer behaviour, the conversation also looks at diverse strategies adopted amidst fluctuating prices. From cautious buyers awaiting price stabilisation to the emergence of innovative trends in jewellery design favouring lighter and more accessible pieces.

Furthermore, the speakers also scrutinise the impact of the ongoing Rabi harvest season on gold demand, unravelling the cyclical nature of consumer spending patterns. With a focus on India's tier two and tier three cities, the podcast highlights the enduring allure of gold as a preferred investment avenue amidst changing economic landscapes.

In this edition of businessline’s monthly SOE Personal Finance podcast, Rahul Bhagat, CEO of DSP Pension Fund Managers, shares insights on some unknown aspects of the National Pension System (NPS) with Aarati Krishnan, Consulting Editor, businessline.

Why should an investor even consider the NPS when there are mutual funds to invest in the same market-linked instruments? Rahul cites four advantages.

The first is the very low cost/management fee in NPS, which ranges from 0.03-0.09 per cent a year for different pension managers. Mutual funds charge upto 2 per cent a year. Two, the many risk controls in the NPS, which require fund managers to invest only in the BSE 200 stocks and bonds with ratings of AA and above. Three, the tax breaks under NPS which are not available with mutual funds. Finally, switches between asset classes in the NPS attract no tax and that’s a big plus for periodic rebalancing.

Elaborating on NPS tax breaks, Rahul explains that investments in NPS by private individuals upto Rs 1.5 lakh a year are exempt under section 80C. Besides, under section 8OCCD, an additional Rs 50,000 can be invested or tax breaks. Not many people are aware that NPS offers other tax benefits too.

If you enrol for a corporate NPS with your employer, the employer can contribute upto 10 per cent of your basic pay into your NPS account, fetching you a tax exemption. This is subject to the cap of Rs 7.5 lakh a year.

On the investment strategy of NPS managers, Rahul explains that DSP Pension Fund Managers is very focused on alpha generation. Though NPS managers are only allowed to invest in BSE200 stocks and some of them take a fairly passive approach to their NPS portfolios, DSP Pension Fund adopts a concentrated and risk-controlled strategy to aim at alpha for investors. It filters companies for zero debt, good capital return ratios and other parameters and holds a 30-40 stock portfolio, to deliver better performance. He states that the predictability of inflows and outflows in the case of NPS gives its fund managers greater leeway not to manage for short-term returns.

Talking of NPS features, he explains how the scheme has gotten more attractive over years. He specifically discusses the rules for early withdrawal. Recent changes in NPS rules have allowed investors to withdraw from the scheme after a 5-year lock in period, provided 80 per cent of the proceeds can be used to buy an annuity. He also explains why buying an annuity out of the retirement proceeds is not such a bad deal for investors.

Tune in to the podcast to know more about the NPS.