businessline's State of the Economy Podcast

In this episode of the State of the Economy podcast, businessline's S Ronendra Singh discusses the tractor market in India with Gaurav Saxena, Director & CEO - International Business at International Tractors Limited.

In September, the retail sales of tractors in the domestic market experienced a 10% year-on-year decline to 54,492 units, compared to 60,321 units in September 2022. However, the market displayed 14 per cent year-on-year growth in the first half of the current fiscal year, reaching 444,340 units, up from 389,850 units during the same April-September period in the previous year. Despite the recent slowdown, tractor sales have contributed to the overall growth of the Indian automobile industry.

This performance not only signals strong market demand but also fosters a positive sentiment in the domestic tractor market, especially during the festive season. In contrast, export markets have witnessed declining sales over the last six months of the current fiscal year, with companies like Mahindra and Mahindra and Escorts Kubota facing a 35% year-on-year drop in sales.

International Tractors Limited, based in Hoshiarpur, has emerged as the top exporter, shipping 17,004 units during the April-September period. The company aims to double its exports in the coming years, targeting 1 lakh units by 2030. It also aspires to become the number one tractor company in 25 countries by the same year.

Regarding the domestic market, key regions such as Bihar, Madhya Pradesh, Chhattisgarh, and Maharashtra are experiencing growth, while Andhra Pradesh, Karnataka, and Tamil Nadu are becoming focus markets. The 60-260 HP segment dominates the Indian market, while exports see demand for below 30 HP and above 60 HP tractors.

As for developed markets, the USA is the largest market for tractors outside India, with other countries in Western Europe, Latin America, and South Africa also becoming focus areas.

The podcast also touches on future trends, such as autonomous tractors, which are in their early stages, and alternative fuels, including biofuels. The impact of rising raw material and parts costs on the tractor industry is discussed, with a focus on the recent drop in commodity prices and logistics costs.

The overall outlook for the tractor market in India and exports is positive, with an expected growth of 15% to 20% next year, provided global conflicts do not disrupt the industry.

In this episode of the ‘State of the Economy’ podcast, Dhruv Agarwala, CEO, REA India, discusses the current state of the Indian real estate market and its outlook. The conversation covers various aspects of the market, including the effects of the festive season, consumer trends, price dynamics, and global economic factors. 

The podcast begins by emphasising the significance of the festive season in India, which traditionally sees increased consumer spending. During this period, people tend to invest in various products, including real estate. Developers often provide enticing offers to motivate consumers to make property purchases. The festive season has historically been a time of high demand for housing and other consumer goods. 

The discussion also highlights the role of the Reserve Bank of India which has maintained stable interest rates for home loans. This stable interest rate environment encourages prospective buyers to consider investing in real estate. The consistency in interest rates creates a sense of financial security, driving people to make home purchases. 

Despite multiple rate hikes and the challenges posed by the COVID-19 pandemic, the real estate market has experienced strong demand. This pent-up demand is attributed to the period of uncertainty caused by the pandemic. Consumers who were hesitant to invest in property during the pandemic are now eager to make purchases, contributing to robust market growth. 

The introduction of the Real Estate Regulatory Act (RERA) has been instrumental in restoring consumer confidence in the real estate market. It has addressed concerns about property transactions and provided consumers with increased protection and transparency. As a result, more people are considering homeownership. 

The conversation also highlights a trend of people looking to purchase homes in Tier 2 cities. This shift is driven by changing post-pandemic preferences, including the desire for larger homes due to remote work and a focus on hometowns. Cities like Lucknow, Jaipur, and Indore have emerged as prime locations for prospective homebuyers. 

The podcast explores the impact of global economic conditions on the Indian real estate market. India is seen as a promising destination for foreign capital, with its strong economic growth and resilience. However, the discussion acknowledges that geopolitical instability and rising oil prices may lead to uncertainties in the global economy. Investors might hold back on cross-border investments, which could affect capital flows and potentially lead to interest rate hikes. 

The Indian real estate market is currently marked by strong demand, stable interest rates, and changing consumer preferences. The market has shown resilience, improved affordability, and increased foreign investment. However, uncertainties related to global economic conditions, including geopolitical instability and oil prices, could pose challenges in the future. 

(Host: Abhishek Law, Producer: Anjana PV, 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 State of the Economy podcast, businessline’s Chitra Narayanan talks to Shiv Shivakumar, Operating Partner, Advent International, a global PE firm and former Nokia and Pepsico India chief and Meenakshi Menon, founder of India’s first marketing audit and advisory company Spatial Access on the need for marketers to focus on the silver generation. This generation belongs to the age between 65 to 69.

The podcast explores the opportunities and challenges in targeting the silver generation, or older people, in India. They discuss how this demographic, often overlooked by marketers, represents a significant market segment with great potential.

Shivakumar starts by emphasising that the world predominantly celebrates youth and youthful energy, focusing on the design of products and services primarily for younger demographics. He highlights that products have seldom been designed with the silver generation in mind, and that the lack of proper infrastructure and facilities, such as ramps for wheelchair users, further compounds the issue.

Shivakumar points out that digital marketing, which is a mainstream approach to reach people, is not effectively reaching the silver generation, as many of them are not on smartphones or the internet. He suggests that alternative marketing strategies like relationship marketing and community marketing may be more effective.

Meenakshi offers a nuanced perspective, stating that not all seniors are looking for assisted living. She emphasises that the 60-75 age group is often overlooked by marketers, even though they have significant spending power and fewer responsibilities than younger age groups. She highlights the need for better communication and products tailored to this segment.

The conversation then delves into why marketers have been slow to target this demographic. Meenakshi explains that many brands continue to focus on the mass market, where there are still untapped opportunities. However, she notes that seniors are now becoming more vocal about their needs and preferences.

The guests also discuss the potential for change in advertising, breaking stereotypes, and portraying active seniors. They mention that Amitabh Bachchan is an exception, being involved in advertising for various brands and showing that seniors can be digitally savvy.

The podcast concludes with the hosts emphasising that the silver generation has time, money, and loyalty. Meenakshi encourages marketers to build long-term relationships with this group, while Shivakumar suggests rethinking marketing approaches, creating a new playbook, and focusing on building habits with this demographic.

The podcast highlights the untapped potential of marketing to the older generation in India, the need to break stereotypes in advertising, and the importance of creating a new marketing playbook to connect with this demographic effectively.

(Host: Chitra Narayanan, 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.

The Indian economy has experienced substantial growth since the 1980s, transitioning millions from agriculture to manufacturing and services. However, not all segments of society have equally benefited. Factors like gender, caste, and family dynamics profoundly influence access to education and the workforce. A recent report by Azim Premji University sheds light on these complexities.

In this State of the Economy podcast, V Nivedita talks to authors Amit Basole and Rosa Abraham about the report, titled "State of Working India 2023". Basole, heading the Centre for Sustainable Employment, specialises in India's "jobless growth." Abraham focuses on informal work and women's employment in India's labour market.

The report presents positive shifts, including reduced caste-based segregation and gender-based earnings disparities. Yet, challenges persist, such as high unemployment rates and inadequate representation of women in the workforce. Notably, lower-caste entrepreneurs remain underrepresented.

The study highlights movements from agriculture to casual and salaried work, with distinctions in opportunities across communities. Access to quality education, social networks, and discrimination contribute to varying outcomes. Muslims, often engaged in traditional crafts, face barriers to diversifying their livelihoods.

Policies like the Mudra scheme aim to support self-employment, but their impact on expanding businesses remains limited. The gender pay gap has narrowed, attributed to increased education and women's concentration in higher-quality jobs. However, it coexists with declining female workforce participation.

The discussion underscores the need for policies addressing educational disparities, skilling, and expanding quality employment opportunities. The report emphasizes the nuanced realities of India's labor market, advocating for inclusive economic growth.

In the latest episode of the State of the Economy podcast, Amiti Sen talks to Ajay Srivastava, former Indian Trade Service officer and Founder, Global Trade Research Initiative, to understand the recent conflict between Hamas and Israel and its potential economic implications for India. The discussion centres on India's trade relations with Israel and the uncertainties arising from the ongoing crisis. 

Srivatsava offers his expertise to provide insights into India's trade ties with Israel and the potential economic consequences of the ongoing conflict. Srivatsava clarifies that Israel is not a major trade partner for India, with the total trade volume amounting to $12 billion, representing a mere 0.75 per cent of India's total trade. He elaborates on India's exports to Israel, which predominantly consist of diesel and cut and polished diamonds, explaining that these two products make up 80 per cent of India's exports to Israel. 

He predicts that the ongoing conflict is unlikely to have a significant economic impact, primarily causing increased shipping and insurance costs and primarily affecting the diamond trade. 

The discussion then delves into the possibility of rising insurance costs and government intervention, with Srivatsava explaining that decisions regarding insurance costs are typically made by the Export Credit Guarantee Corporation (ECGC). While the government is not expected to intervene extensively, any potential cost-sharing discussions may occur between diamond traders and the government. 

The podcast further explores the potential impact on Indian companies and the country's arms trade with Israel. Srivatsava suggests that Indian intelligence must remain vigilant, given the potential for copycat attempts globally. 

The discussion also touches on the India-Middle East-Europe economic corridor, suggesting that the current conflict could disrupt the normalisation process between Saudi Arabia and Israel, which was a foundation for the corridor. However, it remains uncertain at this stage. 

In conclusion, the podcast addresses how Indian exporters and importers can deal with the uncertainty that lies ahead. Srivatsava believes that for India, which primarily exports diesel and diamonds to Israel, there is not much to worry about at this stage other than potential increased insurance and shipping costs. He maintains that the situation may evolve if the conflict escalates, but, for now, the impact on India's trade with Israel appears limited. 

(Host: Amiti Sen; Producer: Nabodita Ganguly)

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.

The Centre’s focus on improving infrastructure, rapid formalisation and burgeoning rural demand has put the logistics sector in the spotlight in India. In fact, data from staffing TeamLease Services, a staffing company, shows that the sector is expected to create nearly 10 million jobs in the country by 2027. In this episode of the “State of the Economy” podcast, TE Raja Simhan talks to A Balasubramanian, Vice President and Business Head, TeamLease Services, to understand how the future of the logistics sector in India will shape up.

In the podcast, Balasubramanian sheds light on the logistics job market. He said that the cost of logistics in India is about 14 per cent of the GDP, while the global average is around 8 per cent. However, the industry is not known for its high wages. He noted the high cost and low efficiency of the industry must be addressed. Skilling workers is another issue that must be addressed as a significant portion of the workforce in logistics is categorized as unskilled, he noted. Basic skills, like digital literacy and English comprehension, are increasingly important in the sector he noted.

He also said that technology adoption, including that of Artificial Intelligence and Machine Learning, is transforming the sector, creating new jobs in areas like data analytics, software development and automation.

In the podcast, Raja Simhan and Balasubramanian also discussed the formalisation the sector is currently undergoing. They talk about the growing trend of organized players entering the industry. This has led to increased investments in technology, improving productivity and reducing costs.

Balasubramanian observed that the demand for workforce is high at the entry-level, encompassing roles such as warehouse operations personnel, packers, movers, loaders, and last-mile delivery personnel. This accounts for the majority of the workforce in the logistics space, he noted. He also pointed out that the demand for labour increases seasonally and there is a higher demand for workers around the festive seasons.

Listen in to know more about how government initiatives like the National Logistics Policy, PM Gati Shakti scheme, and Production Linked Incentive Policy are key drivers to enhance efficiency, productivity, and competitiveness in the logistics sector.

(Host: TE Rajasimhan; Producers: V Nivedita, Siddharth MC)

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 recent months, the soaring prices of everyday staples like tomatoes and onions have made headlines, causing concern among consumers and farmers alike. Farmers have grappled with the uncertainty of prices, leading to concerns about their livelihoods. Fortunately, a potential solution has emerged in the form of India's food processing sector.

In this episode of the State of Economy Podcast Subramani Ra Mancombu delves into the world of food processing in India, where he explores its advantages, drawbacks, and future prospects. He is joined by Vicky Dodani, the founder of Agrizy, an agri-startup.  

India's food processing sector is a behemoth, with an expected output of $535 billion by 2025-26, making it one of the largest in the world. It provides employment for 20.3% of the workforce.  

Despite these impressive statistics, there's immense untapped potential. Vicky Dodani explains how food processing can be a game-changer for farmers and consumers alike.  

By processing perishable products during their harvest season and increasing their shelf life, India can significantly reduce wastage and provide stable incomes for farmers. Dodani gives an example of tomato processing, where a kilo of tomatoes can be transformed into tomato paste, preserving nutrient value and increasing profitability for both farmers and processors.

Moreover, the government's "One District, One Product" initiative aims to bolster specific product clusters and create a seamless link between global demand and India's abundant agricultural resources. This approach can reduce wastage, increase income for farmers, and enhance the country's overall food processing capabilities.

While there are challenges to overcome, including infrastructure limitations and changing consumer perceptions about processed foods, the future looks promising. With government support, digitalisation, and the quest for global markets, India's food processing sector is poised for growth.

(Host: Subramani Ra Mancombu; Producers: Nabodita Ganguly, Siddharth MC)

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, Jyoti Banthia talks to Nandini Chopra, Managing Director at Alvarez & Marsal Corporate Finance, and Bharat Anand, Partner at Khaitan & Co., to explore the changing landscape of mergers and acquisitions (M&A) in India and how it plays a pivotal role in driving economic growth and innovation.

 Over the past few years, M&A activity in India has experienced a significant surge. In 2022 alone, nearly 20 deals were completed, accounting for approximately $112 billion.

 Domestic M&A transactions dominated the scene with a total of 355 deals, while outbound transactions aggregated to about 61. Despite global headwinds like rising interest rates and elevated inflation, strategic M&A in India remains resilient, backed by robust domestic demand and healthy balance sheets.

 According to Nandini Chopra, the surge in M&A can be attributed to pent-up dry powder from private equity post-COVID recovery, which has fueled inbound transactions. While the IPO market has remained muted, private equity investments have played a significant role in capital requirements and valuations. The "China plus one" strategy has also attracted substantial foreign direct investments in India.

 Bharat Anand adds that investor confidence is driving M&A decisions, with many believing in India's upward trajectory. Sectors such as healthcare, pharma, and auto have witnessed significant M&A activity. The advent of Indian strategies consolidating and foreign sellers exiting Indian counterparts has added an interesting dynamic to the landscape.

 Looking ahead, the M&A landscape in India is up for evolution. Regulatory changes, including government disinvestments, competition amendments, and foreign direct investment rules, are expected to influence deal structures and activity. Additionally, a shift towards ESG compliance and environmental concerns is likely to reshape industries such as green energy and the circular economy.

 Despite uncertainties surrounding the upcoming elections, the overall outlook for M&A in India remains optimistic. M&A is not only driving economic growth but also contributing to job creation and innovation. As India continues to position itself geopolitically and strengthen international relationships, investor confidence in the nation's economic potential remains high.

 Listen in to learn more.

(Host: Jyoti Banthia, Producer: Siddharth MC & Nabodita Ganguly)

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.

The Competition Commission of India (CCI) recently rolled out draft Settlement & Commitment regulations. The aim is to expedite the resolution of anti-competitive cases, promote compliance, and contribute to a more competitive and fair business environment in India.

The move is very timely as the Indian system is clogged with delays sometimes running into a decade in certain competition cases, frustrating the hope for faster market corrections. 

So when the markets are dynamic and if relief comes after say ten years, then it doesn’t help anybody’s cause.

These draft regulations—issued under the aegis of Competition (amendment) Act 2023–therefore are looking to address the delay issue, giving corporates a window to quickly correct their market behaviour.

Currently, the entire process is time consuming as CCI after taking a prima facie view will order its investigation arm to investigate the matter. 

After a lengthy investigation, the DG (investigation) will submit a report and the report will thereafter be shared with  parties inviting their suggestions and objections. Thereafter all parties will be heard and rulings will be issued. This ruling will invariably be challenged before National Company Law Appellate Tribunal (NCLAT) and thereafter also further appeal is provided before the Supreme Court of India. 

So if we have look at present mechanism under the Competition Act, it takes decades for a matter to attain finality. Just to give an example, the CCI’s first intervention against a big tech issued in 2018 are still stuck at NCLAT level. 

Once the NCLAT gives a ruling, the aggrieved party will go to Supreme Court. Similarly CCI issued two high decibels orders against the same tech giant in October last year — still there is no market correction, there is no relief to consumers and there is no finality to the issue.

Considering these aspects and the delays caused in investigation and inquiry and the hierarchical appellate system, the government has decided to bring fast track system where parties can offer commitments or settlements in lieu of discounts of penalties levied by the regulator.

So Settlement & Commitment is a mechanism whereby parties will be induced for voluntary remedies to the regulator. 

Of course, the scope of the draft regulations has brought to the fore its share of controversies and uncertainties. For instance, cartels have been kept outside the scope of the Settlement & Commitment regulations. Cartel activity is considered to be a pernicious wrong. So the Settlement & Commitment regulations apply only when there is an abuse of dominance or there is anti competitive agreement other than cartel (horizontal agreements).

To get a better understanding of this proposed settlement and commitment mechanism, BusinessLine spoke to Samir Gandhi, a competition law expert with over two decades of experience and Co-founder Axiom5 Law Chambers, a law firm.

Listen in to the BL State of Economy Podcast  with Samir Gandhi to get a deep dive on proposed Settlement and Commitment regulations.

In this episode of the State of the Economy podcast, businessline’s Shishir Sinha discusses the latest high-frequency economic indicators with Devendra Kumar Pant, Chief Economist at India Ratings and Research. The conversation covers three key economic indicators: Goods and Services tax (GST), the core sector numbers, and the fiscal deficit. 

The episode begins by highlighting the recent high-frequency economic indicators released. Pant emphasises the importance of looking beyond monthly year-on-year growth figures and considering year-to-date trends. He addresses the issue of whether April should be considered as part of March or a separate month in deficit calculations. 

Analysing the first half of the fiscal year, henotes that while growth peaked in June, it is still in line with budget assumptions. However, he cautions that the real GDP growth is likely to decline in the following quarters, and inflation patterns, particularly in the wholesale price index (WPI), may affect nominal GDP growth and GST collections. 

Pant points out disparities in the consumption patterns, with higher-income groups driving consumption growth while lower-income segments lag. He also highlights variations in GST growth across different states, indicating regional disparities. 

The podcast details consumption demand and also about the recent uptick in GST collections. Pant urges caution, stating that past trends have shown short-lived growth spurts in consumption. He emphasises the need for sustainable growth and expresses concerns about potential shocks to the system if inflation remains high. 

Pant acknowledges the increase in capital expenditure in the podcast. He attributes this to governments front-loading their capital projects, leading to quicker returns on investments. However, he mentions the government's limited capacity for sustained fiscal stimulus, especially with a high deficit. 

The conversation touches on the unpredictability of corporate and income tax collections, citing fluctuations and the need to analyse longer-term trends rather than monthly variations. 

Regarding achieving the fiscal deficit target, Pant focuses on the role of disinvestment as a key factor. He notes that if disinvestment proceeds are substantial, the government may adhere to its deficit target. He also mentions the importance of cash management to avoid last-minute expenditure surges. 

Pant anticipates an inflation rate of 5.9% for September, considering factors like oil prices, fruit prices, and the pass-through effect on consumers. He highlights the persistent double-digit inflation in cereals, which affects those with a higher share of food expenses and can impact consumption and interest rates. 

Pant points out the need for sustainable consumption growth, the challenges in managing the fiscal deficit, and the impact of inflation on different segments of the population. It also highlights the significance of disinvestment and cash management in achieving fiscal targets. 

(Host: Shishir Sinha, 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.