POLITICS, P7 COMPANIES, P4 INTERNATIONAL, P11 FOREIGN MINISTER MEET AI SUMMIT RACE TO 10 DOWNING STREET India and China agree: Situation along LAC not in either side's interest ‘Dry powder’ of `16,000 cr ready for AI startups, says Peak XV’s Anandan Britons vote in election expected to propel Labour to power BENGALURU, FRIDAY, JULY 5, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVII 64, 24 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 80,049.69 ▲ 62.89 NIFTY: 24,302.15 ▲ 15.65 NIKKEI 225: 40,913.65 ▲ 332.89 HANG SENG: 18,028.28 ▲ 49.71 `/$: 83.50 ▲ 0.03 `/€: 90.16 ▼ 0.32 BRENT: $87.13 ▼ $0.21 GOLD: `72,169 ▲ `194 IN THE NEWS PRODUCER PRICE INDEX ON CARDS, TO REPLACE WPI THE COUNTRY WILL have a Producer Price Index (PPI) to gauge the price pressures in the next few months, in addition to the extant consumer price index, and wholesale price index may be on its way out, reports Mukesh Jagota. The model for the proposed PPI, onc ready, will be examined by the National Statistical Commission. ■ PAGE 2 NITI COUNCIL MEET IN AUG TO DISCUSS ‘VIKSIT BHARAT’ THE NINTH GOVERNING Council meeting of Niti Aayog may meet next month to discuss the ‘Viksit Bharat @2047’ vision document to make India a developed nation, reports Prasanta Sahu. The council is chaired by Prime Minister Narendra Modi and comprises state chief ministers. ■ PAGE 2 USING GENERATIVE AI TO ENHANCE PROCESSES: L&T LARSEN & TOUBRO (L&T) is using generative artificial intelligence to enhance its processes across the project life cycle, company's chairman and managing director SN Subrahmanyan said on Thursday. He was speaking said during the 79th annual general meeting of L&T. ■ PAGE 5 FE S P E C I A L Why onion prices are making you cry Farmers are releasing the stocks in a calibrated manner in anticipation of higher prices ■ EXPLAINER, P9 MORE VISA RELIEF FOR CHINESE WORKERS Govt looks at easing FDI policy further RUN-UP TO THE BUDGET 2024-25 MUKESH JAGOTA New Delhi, July 4 THE GOVERNMENT IS looking at a multi-pronged strategy to address the decline in foreign direct investment (FDI) inflows. “Internal discussions are on for furtherliberalisationofFDI,”Rajesh Kumar Singh, secretary at the department of promotion of industry and internal trade (DPIIT) said on Thursday, without elaborating on the manner of relaxation or the sectoral policies being reviewed. According to sources, possible changes include raising ordispensingwith equitylimits that still exist for FDI investors in a few residual sectors,and removing the cumbersomeconditionswhereverpossible. The government may also go slow on the importsubstitution (high tariffs) policy,that is inflating thecostsofimportofintermediates, and capital equipment by foreign investors in high-potential areas. Continued on Page 7 POLICY PUSH ■ Print media, broadcast services and vegetable cultivation are areas where liberalisation is long due ■ Two areas needing FDI liberalisation are multi-brand retail and e-commerce ■ Govt may also go slow on import substitution (high tariffs) policy 49% cap in civil aviation can also be considered Ministry backs pitch for removal of angel tax MUKESH JAGOTA New Delhi, July 4 IN THE RUN-UP to the Union Budget, the ministry of commerce and industry has backed the industry’s pitch for removal of the so-called “angel tax”, which firms say has a crippling effect on the startup ecosystem. “Based on consultations with startups, we have recommended that (removal of angel tax) in the past aswell.We have recommended the same this time also,” depart- ment for promotion of industry and internal trade (DPIIT) secretary Rajesh KumarSingh said onThursday.“Ultimately,an integratedview (on the issue) will be taken by the finance ministry,”he added. Angel tax was introduced in 2012, via Section 56(2)(viib) of the Income-Tax Act. The levy — which is income tax at the rate of 30.6% — is leviedwhen an unlisted company issuessharestoaninvestorataprice higher than its fair market value. Continued on Page 7 INDEX CLOSES ABOVE 80,000 FOR THE FIRST TIME Sensex up 11% post LS verdict VIVEK KUMAR M Mumbai, July 4 POLLVAULT INVESTORS MAY HAVE to prune their expectations of returns from equities after the Budget as the market could enter a consolidation phase after the bumper post-election results rallyseen in the last one month,said market experts. As the BSE Sensex closed above thehistoric80,000markforthefirst time onThursday,it also set another record: The 30-stock index registered its best post-election results rallysince2009withover11%gains in a month.In this one month since votes were counted,investor wealth hassoaredby`52.5trillion,risingin all but three trading sessions. On Thursday, the Sensex closed 0.1% higher at 80,049.67 points. The Niftyalsoended 0.1% higherat 24,302.15 points. Market participants said investors seem to have factored in most of the positives Poll result day Sensex return 1-month after poll results Return (%) Oct 05, 1999 May 13, 2004 May 16, 2009 May 16, 2014 May 23, 2019 Jun 04, 2024 -2.3 -9.8 22.2 5.4 0.2 11.0 ahead of the Budget, leaving little room for upside in the near term if the announcements in the Budget are along expected lines. Andrew Holland, CEO of Aven- Tesla may have hit the brakes on India investment plans U-TURN? INDIA DOESN’T EXPECT Tesla to move forwardwith an investment in the country any time soon after executives at Elon Musk’s electric carmakerstopped contacting them, according to people familiar with the matter. Musk’s team hasn’t made any further inquiries with officials in New Delhi after the billionaire postponed avisit to India in lateApril,the people said, asking not to be identified because they’re not authorised to speak publicly.The government is given to understand that Tesla has capital issues and doesn’t plan on pledgingfreshinvestmentintoIndia in the near future,they said. ThelossofinterestinIndiacomes as Tesla reported a second consecutivedropinquarterlydeliveriesglobally and faces heightened competition in China. Musk announced major staff reductions in April, the EV maker’s first new model in years, the Cybertruck, has been slow to ramp upwhile construction of a new plant in Mexico has been delayed. ■ Investor wealth has soared by `52.5 trn in last month ■ It has risen in all but three trading sessions since result day I N S I D E Editorial: Irrational exuberance ■ PAGE 8 NO CONTACT FROM MUSK’S TEAM SINCE APRIL RUCHI BHATIA July 4 ● A MAXIMUM CITY WELCOME FOR TEAM INDIA postponedvisit to India, planned after EVimport dutieswere cut ■ InApril, Musk dus Capital Alternate Strategy, expects 15% return from the market in FY25. Continued on Page 7 A sea of fans welcomes the T20 World Cup-winning Indian cricket team at Marine Drive in Mumbai on Thursday. The two-hour open bus victory parade brought traffic to a standstill, before the team reached Wankhede Stadium to celebrate the title triumph. Earlier in the day, Prime Minister Narendra Modi hosted Team India for breakfast. "An excellent meeting with our Champions … Had a memorable conversation on their experiences through the tournament," Modi posted on 'X' PTI Sebi: Tell us about mischief makers PRESS TRUST OF INDIA Mumbai, July 4 SEBI CHAIRPERSON MADHABI Puri Buch on Thursday urged market participants to inform the regulatorabout mischief makers in capital markets. She said reporting those involved inwrongful conduct isinthe“self-interest”ofthe market participant. The Securities and Exchange Board of India’s (Sebi’s) interest is to act as soon as possible on anywrong conduct before it blows up into a systemic issue and forces the regulator to “come back with a heavy hand”, she said, addressing portfolio managers in Mumbai. Recalling her own experience as an industryparticipant,Buchsaid it is “frustrating” for the law-abiding participant when he or she discovers an industry peer gaining using bad practices. “Good guys need to win. You guys need to tell us aboutwhat mischief is going on so thatwe can stop it early on. It’s in your own selfinterest to come and tell the regulator what are some of the bad practices happening in the market.” Buch said when any mischief happens, trust is eroded and this leads to two broad outcomes. It takes a really long to rebuild trust, MADHABI PURI BUCH, SEBI CHAIRPERSON GOOD GUYS NEED TO WIN… IT'S IN YOUR OWN SELF-INTEREST TO COME AND TELL THE REGULATOR (ABOUT) BAD PRACTICES HAPPENING IN THE MARKET INSIDE CJI advices Sebi, SAT to stay cautious PAGE 6 she said, and the second impact is that there is a strong regulatory response to the wrongdoings. Maintaining trust isveryimportant for every participant in the financial ecosystem,Buch said. Continued on Page 7 Viability gap funding for GPU procurement M&A deals in FMCG sector on the fast track Pay salaries or face audit, NCLT directs Byju's THE GOVERNMENT IS banking on the private sector to create the capacity of GPUs and central processing units, reports Jatin Grover. Instead of directly procuring GPUs and giving them to startups, the government has finalised a viability gap funding model. ■ Page 4 THE MERGER AND acquisition (M&A) activity in the fastmoving consumer goods (FMCG) sector has gathered pace in the first half of calendar year 2024, touching $938 million in terms of value — the highest in four years — reports Viveat Susan Pinto. ■ Page 4 THE NATIONAL COMPANY Law Tribunal on Thursday directed Byju’s to pay salaries irrespective of the firm having access to the funds raised through its rights issue,reportsAnees Hussain. The tribunal warned of an audit by the ICAI if the company failed to pay the staff. ■ Page 5 Govt plans more surveys, 13 more in FY25 alone PRIYANSH VERMA New Delhi, July 4 THE COUNTRY'S SOCIOECONOMIC survey architecture is set for a major upgrade. Apart from conventional surveys like those to track household consumption expenditure, labour force participation, and the annual surveyofindustries,awholenewset of activities is going to be surveyed on a periodic basis. According toofficial sources,the National Sample Survey Office (NSSO), an arm of the ministry of statistics,has identified“exportand import data of small traders”, “income and living standards of sanitation workers,”“unpaid activityof individualsworking in households”amongseveralactivitiestobe tracked for more informed policymaking. “All these requests (for surveys) from differentministrieshave been pending with us for the past two years. We will start work on them soon,”an official said. Thirteen new surveys are likely to be conducted, starting this year (2024-25),onaperiodicbasisbythe NSSO. FE had reported earlier that several ministries, including agriculture,commerce,labour,tourism, health,and social justice,have separatelywritten to the ministryof statistics and programme implementation (MoSPI) to conduct surveys for them. The areas covered in the proposedsurveysincludetourismfootfall surveys of different states, ailments among the elderly,and price estimation of industrial inputs, a source had said earlier. Thedelayinstartingtheexercise was mainly due to disagreement between MoSPI and the National Statistical Commission (NSC). Continued on Page 7 ■ Tesla said to be facing capital issues, ■ India has announced major staffcuts ■ Carmaker has seen second consecutive drop in quarterly deliveries Representatives from the ministryof heavyindustries,which oversees the automobile sector, and the ministries of finance,and commerce and industry, didn’t respond to requestsforcomment.Teslaalsodidn’trespondtoarequestforcomment. Musk inApril scrapped a planned visit to India that would have included a meetingwith Prime Minister Narendra Modi,citing pressing issues at the company. He had originally announced the visit just weeks ■ Ramp-up of Cybertruck, its first new model in years, has been slow banking onTata Motors, Mahindra & Mahindra to boost EV production after India lowered the import taxes on EVs from foreign carmakers that pledge to investat least `4,150 crore and start EV production from a local factorywithin three years. Instead, the government is pinning its hopes on domestic firms like TataMotorsandMahindra&Mahindra to boost EV production,the people said. Should Musk decide to reengage,Teslawould still be welcome to avail itself of the new import tax policy,they added. — BLOOMBERG BENGALURU