ECONOMY, P2 MARKETS, P6 BACK PAGE, P16 FOCUS ON THREE SCHEMES SURESH TENDULKAR LECTURE NO NATIONAL SECURITY THREAT SEEN Govt sets tall targets to widen workers' social security cover Central banks should have freedom on price stability, says New York Fed chief OpenAI's internal AI design details stolen in 2023 breach BENGALURU, SATURDAY, JULY 6, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVII 65, 16 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: 79,996.60 ▼ 53.07 NIFTY: 24,323.85 ▲ 21.70 NIKKEI 225: 40912.37 ▼ 1.28 HANG SENG: 17799.61 ▼ 228.67 `/$: 83.49 ▲ 0.01 `/€: 90.39 ▼ 0.23 BRENT: $87.39 ▼ $0.04 GOLD: `72,348 ▼ `179 FMCG MAJORS SEE REVENUE GROWTH IMPROVING IN Q1 LEADING FASTMOVING consumer goods (FMCG) companies such as Marico, Dabur and Adani Wilmar expect revenue growth to improve in the June quarter (Q1FY25) on the back of a revival in rural demand, reports Viveat Susan Pinto. Urban demand, they say, will be stable. ■ PAGE 4 HDFC BANK MULLS SELLING LOAN PORTFOLIO HDFC BANK IS mulling the sale of a loans portfolio, according to people familiar with the matter, amid heightened regulatory scrutiny on the nation’s lenders as their credit growth surges, reports Bloomberg. ■ PAGE 6 JSW ENERGY PLANS TO SPEND `1.15 TRN OVER SIX YEARS JSW ENERGY PLANS to increase its capex over the next six years as it fast-tracks capacity additions, chairman & managing director Sajjan Jindal said on Friday, reports Raghavendra Kamath. The company plans to bump its capex to `1.15 trillion to reach its goal of 20 GW by 2030 and 40 GWh. ■ PAGE 5 FE S P E C I A L S Best car in the world,at the best hotel in the world A road trip from Delhi to the Rambagh Palace, Jaipur, in the Mercedes-Benz C 300 ■ MOTOBAHN, P9 Prevent your policy from lapsing with two add-ons Premium holiday & premium delay riders help in case of a temporary financial crisis ■ PERSONAL FINANCE, P9 GERMAN CARMAKER VOLKSWAGEN (VW) is believed to be in preliminary talks with Mahindra and Mahindra (M&M) to scale up their supply agreement on components to a joint venture. The development comes amid reports in international media thatVWis looking to sell its stake in its India business to a local company. In February, the two companies signed a supply agreement on components of the VW’s vehicle platform for M&M’s purpose-built electric platform called INGLO.The deal covers the supply of certain electric components as well as unified cells. The first of several electric SUVs on the INGLO platform is set to be launched later this year. At a Reuters Events Automotive Europe conference in Munich in May, VW group’s finance chief Arno Antlitz said it is engaged in “concrete discus- ■ At a conference in Munich in May,VW group's finance chiefArnoAntlitz said the firm is engaged in "concrete discussions" for a tie-up for passenger car production in India ■ In February, the two inked supply agreement on components ofVW’s vehicle platform for M&M’s purposebuilt electric platform INGLO ■ VW, with Skoda, has a market share of less than 2% of the Indian passenger vehicle market ■ Both companies had said they would continue to evaluate a "potential expansion of the collaboration” Newly elected British Prime Minister Keir Starmer and his wife, Victoria, greet Labour Party supporters as they arrive at Downing Street in London on Friday. Labour stormed to power, winning 412 seats in the 650-strong House, and ending the Conservative Party’s 14 years in office. Labour also created history by picking Rachel Reeves as the country’s first-ever female finance minister AP/PTI sions” for a potential partnership for PV production in India. When announcing the supply agreement in February,VW had said that “both companies will continue to evaluate a Unsold inventory for carmakers soars to `60,000 crore SWARAJ BAGGONKAR Mumbai, July 5 RETAIL SALES AUTOMAKERS AND DEALERS have started to feel the pinch of the slowdown in demand forcars and sports utilityvehicles (SUV), with inventory of around `60,000 crore lying unsold with dealers. The passenger vehicle (PV) industry is sitting at an all-time high inventoryof 6267 days. Despite improved product availability and substantial discounts to stimulate demand,market sentiment remains subdued, with extreme heat resulting in 15% fewer showroom walk-ins. In anticipation of a pick-up in demand after the general elections aided by a favourable monsoon, passenger vehicle makers have been adding stock forseveral weeks. Dealer partners, however, have been asking them to curb supplies. The monsoon season generally sees reduced consumer offtake. Manish Raj Singhania, president, Federation ofAutomobile DealersAssociation (FADA), said,“The total unsold inventory in the market will be 600,000-650,000 units and their average ticket size should be `9.5 lakh. The last two months itself saw stock get pushed up by 77,000.” TotalwholesaledispatchesduringJune were around 341,000 units, a growth of 4%. Actual retails (vehicle registrations) during the same month, however, were Chg (%) (units) June 2023 June 2024 Two-wheelers 1,314,628 5 1,375,889 Passenger vehicles 5 71,029 EXPRESSING ITS UNWILLINGNESS to conduct the NEET-UG examination again, the Centre has told the Supreme Court that “scrapping the exam in entirety would seriously jeopardise the lakhs of honest candidates who attempted the question paper in 2024”. ■ PAGE 13 STORY SO FAR 99,148 CENTRE OPPOSES DEMANDS TO CANCEL NEET-UG FE BUREAU Mumbai, July 5 94,321 AWEEK AFTER select government securities were included in JPMorgan global bond index, foreign investors have poured more than `5,200 crore ($627 million) into fully accessible route (FAR) bonds, reports Sachin Kumar. ■ PAGE 2 89,743 FPIS BUY MORE THAN `5,200 CRORE ‘FAR’ BONDS IN AWEEK Volkswagen, M&M in talks for joint venture 281,566 NEWS GERMAN FIRM IS LOOKING TO SELL STAKE IN INDIA UNIT 302,000 IN THE 28 Threewheelers Tractor Commercial vehicle 76,364 7 72,747 5 Source: FADA 281,600 units, highlighting the gap between market demand and supplies by manufacturers. Continued on Page 5 Bajaj CNG bike for `95K BAJAJ AUTO ON Friday launched the world’s first CNG motorcycle,report VikramChaudhary&GeetaNair. TheFreedom125comesinthreevariants,priced between `95,000to `1.1 lakh, ex-showroom. The Freedom 125 can offer as much as 50% cost savings by significantly reducing fuel expenses, as compared to similar petrol motorcycles,BajajAuto claims. ■ Page 4 potential expansion of the collaboration”. The existing alliance has made M&M the ideal choice for a partnership forVW. Continued on Page 13 HC dismisses Big 4 plea against ICAI MANU KAUSHIK New Delhi, July 5 IN A SETBACK to Price Waterhouse & Co andKPMGaffiliateBSRandAssociates,the Delhi High Court has held that not just theirpartners,but the firms,too,would be liable to reply to notices issued by the disciplinarycommittee at the Institute of the Chartered Accountants of India (ICAI). In a July3 order,the court said the ICAI is“fullyempowered”totake action against theprofessionalmisconductoftheseaudit firms in accordance with law. The ruling serves to put the implementation of the Chartered Accountants, the CostandWorksAccountantsandtheCompanySecretaries(Amendment)Act,passed in April 2022, on the fast track. The court directed the government to notify the amendments,according towhich the proceedings for misconduct could be held against CA firms also, rather than just the accountants. The court asked the ICAI to start the consultation process to devise a framework for multinational accounting firms to operate. “Such firms contribute in bringingglobalbestpracticestoIndiawith immense opportunities for youngsters. They also render services to Indian businesses even at a global scale.Thus,the provisions relating to licensing agreements, brand usage etc., also need to be looked into,”the order noted. The order comes as a lot a clarity has emerged on how ICAI and the National Financial Reporting Authority (NFRA) share audit regulatory functions. While ICAI has the authorityto scrutinise audits, NFRAsupervisesauditorsoflistedentities. The court also said that the 10 writ petitions filed by the partners at these audit firms are not tenable and,therefore, the stay orders do not deserve to be continued as well. Emails seeking replies from PwC and KPMG didn’t elicit response. Continued on Page 5 Labour govt may be ‘surefooted’ on FTA INDIA-UK ECONOMIC TIES MUKESH JAGOTA New Delhi, July 5 Merchandise ($ bn) A LABOUR GOVERNMENT in London could give a shot in the arm to the India-UK free trade agreement (FTA) negotiations, given that economic recoverywould be the newdispensation’s top priority,analysts said. One of the electoral promises of incoming Prime MinisterKeirStarmer,theysaid,was to forge a “new strategic partnership”with the world’s fastest-growing major economy, which would include the FTA, and building stronger ties with the Indian diaspora. “The UK has been facing economic headwinds since the pandemic,and with political stability, the economic recovery will be hastened. For an economy that is dependent on global markets, getting into a strategic partnership with the rest of the world will be important,trade expert Biswajit Dhar said. Labour,Dharsaid, has come back to power on a mandate for change,and how it proceeds istobewatched.“Iexpectbothsides(Indiaand theUK)tobeequallycommittedtogettheFTA dealdone.PoliticalstabilitywillallowtheUKto goforwardontheFTAinasurefootedmanner.” Continued on Page 5 Exports Imports 11.4 10.4 7.0 2021-22 12.9 8.9 2022-23 8.4 2023-24 Services (2023, $ bn) 17.28 Exports Investments (between FY21-FY24, $ bn) 12.4 Imports UK investment in India 34 India’s investment in UK 19 INSIDE Labour landslide sinks Tories PAGE 7 Editorial: Reinvented Labour PAGE 8 Naidu, Nitish demand `48,000 cr from Centre long-term loans offered to all states for infrastructure spending to `1 trillion,according to thedocumentandthesource.Thegovernment TWO KEYALLIESofPrimeMinisterNarendra hassetaside`1.3trillioninloanstostatesinits Modi — Telugu Desam Party and Janata Dal interimBudgetinFebruary,ofwhichmorethan (United) — have asked for about halfisconditionalontheimplemen`48,000croreinfundsfortheirhome tation of certain economic reforms. INSIDE states, pressuring the Centre to raise Naidu calls Thestatesalsowantmoreheadroom spendingwhenitpresentstheBudget to borrowfunds from the market. on FM laterthismonth,accordingtoadocuThe Union finance ministry did ment reviewed by Reuters and a seeking aid notimmediatelyrespondtoaReuters ■ PAGE 2 source familiarwith the matter. request forcomment on the matter. TDP and JD(U) are now demandBihar is also seeking funds for ing `48,000 crore for Andhra Pradesh and nine new airports, two power projects, two Bihar,respectively,inadditionalfundsforFY25, riverwaterprogrammes and setting up seven according to the document — which listed medical colleges,according to the document. demandsfromoneofthestategovernments— Andhra Pradesh has sought funds for develand the source. In addition, both states have oping its capital city and a key irrigation proaskedtheCentretonearlydoubleunconditional ject,the source said. — REUTERS SARITA CHAGANTI SINGH & NIKUNJ OHRI New Delhi, July 5 LOGISTICS FIRMS SEE COST, TIME BENEFITS IN DRONE MODEL In 3 years, a third of q-comm deliveries may be by drones S SHANTHI Bengaluru, July 5 IMAGINE RECEIVING YOUR next online shopping parcel via drone. Sounds far-fetched? With the pace at which quick commerce is growing in urban centres,drone deliveries may soon become the norm. According to industry predictions,by2027,around 30% of all qcommerce deliveries in majorcities will be conducted through drones. “For quick commerce players, drones can cut delivery times by up to 50%, slashing costs by 30%,” Rohan Dani, investment professional,BlackSoil told FE. As per analysts, operating costs for a drone delivery service are 4070% lower than a vehicle delivery TAKING WING 40-70% lower operating costs, 50-75% faster delivery times than vehicle delivery, say experts ■ India's drone industry expected to grow from `2,900 cr in 2020 to `81,600 cr in 2025 520 grams ■ 'Sky pods' set up in residential societies for drones with parcels up to 10kg to land ■ Delivery executive of carbon emission saved with every drone delivery, according to Skye Air service model. Many logistics playerssuchasEcomExpress,Shiprocket areexperimentingwithdronedeliveries by partnering with startups that offer drone-as-a-service. HOW ITWORKS stationed to collect, deliver these parcels to customers’ houses Thewaydrone deliverieswork is simple. Drone startups set up ‘sky pods’ in residential societies where the drone, carrying parcels of up to 10 kg, lands. A delivery executive, often called a ‘skywalker’, is stationed there to collect and deliver the parcels to customers’homes. Forinstance,drone startup Skye Air has partnered with around four logistics companies to take their packages to residential societies in Gurugram. The startup has set up sky pods in over 70 residential societies, which are currently mapped. Three of the societies are active, whereover1,000packagesadayare being delivered by drones. The startup plans to scale this to 10,000+ packages per day in the National Capital Region to 100+ societies by the end of this year. “The goal for the company is to make last mile logistics faster,more sustainable, more efficient and cost-effective moving forward, for every package that we deliver,” Ankit Kumar, founder and CEO, Skye Air Mobility said. Every parcel delivered via drone saves around 520 grams of carbon emission. “This means for 1,000 shipments a day, we can save around 80 tonne of carbon emission,”Kumar said.The current shift to quick commerce, with major players like Flipkart and JioMart also entering the segment, will boost drone deliveries like never before,he added. The civil aviation ministry is expected to unveil a setof measures to make drones mainstream faster. Theyarealreadyallowedforservices like vaccine delivery, inspection of oil pipelines and power transmission lines, anti-locust operations, agricultural spraying, survey of mines,and land mapping. Continued on Page 5 BENGALURU