BACK PAGE | PAGE 16 EFE | PAGE 10 Long-brewing issues add to microfinance woes INTERNATIONAL | PAGE 3 EVboom to charge up chip demand KOLKATA, MONDAY, DECEMBER 2, 2024 Trump picks Indian-origin Kash Patel to lead FBI FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 34 NO. 26, 16 PAGES, `12.00 (NORTH EAST STATES `12.00 & ANDAMAN `17.00) 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 STARING AT MISSING the target on capex loans to states due to a delayed start to the programme, the Centre has accelerated disbursements under the `1.5-lakh crore 50year interest-free loans to states to boost economic activity and job creation, reports Prasanta Sahu. ■ PAGE 2 FE S P E C I A L S ■ BRANDWAGON, P9 The big switch Why are Indian creator brands unable to match their global peers? ■ PERSONAL FINANCE, P15 Dynamic bond funds an ideal bet now Capitalise on bond price appreciation when rates fall ■ Explainer, P7 Whywe need more foreign insurers The government plans to hike the FDI limit in the insurance sector to 100% from 74% Export 35.8 51.6 28.8 2020-21 2021-22 US PRESIDENT-ELECT DONALD Trump has threatened the ninemember Brics bloc with 100% tariffsifthecountrieswentaheadwith their plan to create a new currency or back any other currency to rival the US dollar. Trade experts, however, called the move not only counter-productive but also impractical. India is a key member of Brics along with Brazil, Russia, China, South Africa, Iran, Egypt, Ethiopia and the UAE.Brics nations are making an attempt to encourage use of local currencies in financial transactions between membercountries and their trading partners. Trump had called India a tariff exports to the US amounted to $77.5 billion in FY24 53 2019-20 MUKESH JAGOTA New Delhi, December 1 ■ India's merchandise Import 76.1 43.3 2022-23 ■ Dollar’s dominance is a key impediment for emerging market economies 78.5 50.8 2023-24 ■ The US dollar dominates global trade accounting for 90% of the transactions 77.5 42.1 Trade surplus ($ billion) 17.2 22.7 FY20 FY21 32.8 27.6 35.3 FY22 FY23 FY24 king earlier,but this is the first time he indicated any adverse tariff action against New Delhi after being elected as the 47th president of the US last month. Dollar’s dominance is one of the key impediments for emerging market economies, as they seek to enhance their share in world trade and tilt the economic gains from trade in goods and services, as well as capital flows,in their favour. Continued on Page 6 GST mop-up risesby8.5% Cardispatches PMinternship up6%inNov schemeputoff GROSS GOODS AND Services Tax (GST) collections in November stood at `1.82 lakh crore, 8.5% higher on year,data released by the finance ministry showed on Sunday.Therisewasprimarilydrivenby domesticactivity,reportsPriyansh Verma.The mop-up in FY25 so far stood at `14.6 lakh crore. ■ PAGE 2 AFTERTWOCONSECUTIVEmonths of muted supplies to dealers, automakers marginally increased theirvehicledispatchesyear-on-year in November, report Swaraj Baggonkar & Raghav Aggarwal. Fiveautomakerswhichcontrol75% ofthedomesticmarketsaw6%y-oyrise in dispatches. ■ PAGE 4 THE LAUNCH OF the ambitious PM Internship Scheme has been postponed,two sources in the ministryof corporate affairs confirmed to FE, evenastheyinsistedthedecisionhad little to do with response to the scheme from companies and jobseekers, report Manu Kaushik and Priyansh Verma. ■ PAGE 2 ● Rise in CPI inflation to make central bank cautious: Economists ANUPREKSHA JAIN & SACHIN KUMAR Mumbai, December 1 THE SHARP DECLINE in gross domestic product (GDP) growth — at a seven-quarter low— in the second quarter of this financial year has added pressure on the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) to consider loweringratesinits meeting beginning this Friday. However, economists believe that the fall in GDP alone is not enough to tilt the balance in favour of a rate cut. In a poll of 14 econo- TO CUT OR NOT TO CUT Real GDP growth Y-o-Y % change CPI inflation Y-o-Y % change 8.6 Q3, FY24 8.2 Q1 FY24 5.4 Q2 FY25 2024 ($ billion) Pressure mounts after GDP dip but RBI maynot budge Apr May Jun Jul Aug Sep Oct mists, only one expected a rate cut this week, while the majority believed a status quo was likely. Data released on November 29 showed GDP growth moderating sharplyto5.4%intheJuly-Septem- berquarter,butthespikeintheconsumer price index in October to a 14-monthhighof 6.21% islikelyto make the central bank cautious. Continued on Page 6 EPFOwageceilingtobedoubled ● Limit likelyto be set at `30,000/month PRIYANSH VERMA New Delhi, December 1 THE GOVERNMENT IS likely to raise the wage ceiling for mandatory inclusion of workers under the Employees’ Provident Fund (EPF) and the Employees’State Insurance Corporation (ESIC) schemes soon. The move will bring nearly 10 million more employees under the ambit of the social security net. Currently, the wage ceiling is `15,000 per month for EPFO and `21,000 per month for ESIC. The thresholds forboth the schemes are likely to be raised to `30,000 per month,official sources said. Deliberations on raising the wage ceilingwere held at a meeting of the Employees’ Provident Fund Organisation (EPFO) Central Board of Trustees (CBT) on Saturday. “Most members and the labour ministry are in favour of doubling the current ceiling. A final call is expected to be taken in the CBT’s meeting in February,” a source who attended the board’s meeting said. The EPFO wage ceiling was last revised in 2014, from `6,500 to `15,000 per month. Continued on Page 6 WIDEN THE NET ■ Monthly wage ceiling under EPFO was last raised in 2014, from `6,500 to `15,000 Current EPFO ■ At present, monthly ESIC subscribers number around wage ceiling at 9 million `21,000 India Inc’s interest coverage ratio down to 7-quarter low WITHADECLINE in profitability,the interest coverage ratio (ICR) of 1,314 manufacturing and services companies (excluding banks and finance companies) has fallen to a seven-quarterlow of 4.27 times in Q2FY25.The analysis considered companieswith net sales of at least `100 crore and interest costs incurred during Q2FY25.The aggregate interest cost for these firms rose 8.2% in Q2, while theirprofit before interest and tax declined by 0.7%,marking the lowest year-on-yeargrowth in six quarters,even as net sales rose 6.4%.AlowerICR indicates loweroperating profits are available to meet interest payments. Compiled by KishorKadam Interest cost (` cr) Interest coverage ratio (in times) 4.7 3.8 4.2 4.5 4.9 4.6 4.5 4.8 4.8 4.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY23 FY25 FY24 Sample of 1,314 manufacturing and services companies (excluding banks, finance), having `100 crore net sales in Q2FY25 and incurred interest cost, were considered Top 10 interest paying companies in Q2FY25 Interest cost (` cr) Interest coverage ratio (in times) Vodafone Idea* Reliance Industries Bharti Airtel ONGC NTPC Grasim Industries Vedanta IOCL Power Grid Corp Larsen & Toubro 6,614 6,017 5,424 3,749 3,621 2,951 2,667 2,546 2,441 2,439 *made losses 5.2 2.1 4.4 2.9 1.7 3.9 0.8 2.9 3.3 Source: CapitalinePlus National Capital Region sees maximum spike in both, experts cite buyer apathy Strange bedfellows: As pollution levels soar, so do housing prices RAGHAVENDRA KAMATH & SANDIP DAS Mumbai/New Delhi, December 1 REALESTATE PRICESandrisingpollution levels seem to be making strange bedfellows. The National Capital Region (NCR) has seen one of the steepest rise in real estate prices in the past few years along with a sharp decline in the airqualitylevel. AccordingtoAnarockPropertyConsultants,average residential prices have gone up 57% between 2019 and the end of Q3FY25. At the end of the September quarter, average prices in NCR touched `7,200 per square feet. ResidentialpricesinGurugramjumped the most in the past fiveyears from `7,500 per sq ft in 2019 to `19,500 per sq ft in 2024,ariseof160%,accordingtodataanalytics firm PropEquity.It’s a strange coincidence that Gurugram’s airqualitylevel has also been declining at an alarming pace. Gulam Zia, executive director at propertyconsultant Knight Frank,puts the nail on the head by pointing out buyer apathy. Buyers,hesays,simplydon’tcareaboutthe THE REALITY OF REAL ESTATE Average residential prices (`/sq. ft.) Top cities 2019 Q3 2024 % change Pollution level Mumbai 10,610 16,300 54 63 Moderate Bengaluru 4,975 8,130 Pune 5,510 7,600 Delhi-NCR 4,580 7,200 Hyderabad 4,195 7,150 Chennai 4,935 6,680 Moderate 57 Poor – very poor 70 Poor 35 Moderate Kolkata 4,285 5,700 33 Lucknow 3,510 5,480 Kochi 4,100 5,320 Ahmedabad 3,010 4,350 Satisfactory 38 56 30 45 Moderate Satisfactory Satisfactory Moderate Source: Anarock Research quality of air or water.“People don’t mind buying apartments in front of a burial ground or crematorium.This is the reality of real estate,”he said.Zerodha co-founder Nithin Kamath recently proposed linking 4.83 4.80 5.08 3.60 3.65 5.49 6.21 Source: Mospi 97,626 Centre accelerates release of capex loans to states as impractical and counter-productive 91,305 FAST-MOVING CONSUMER GOODS (FMCG) companies continue to see sluggish growth in OctoberNovember, led largely by an urban slowdown, company executives said. While most executives expect a turnaround in market growth rates by March-April next year, for now, the picture is dismal, reports Viveat Susan Pinto. ■ PAGE 6 TRADE HANGS IN THE BALANCE 91,178 FMCG companies continue to see slow growth in Oct-Nov ● Experts flay move 85,926 90,260 91,999 FOREIGN PORTFOLIO INVESTORS (FPIs) have rolled over most of the short positions held in the November derivatives series to December in a sign that they expect slowing economic and earnings growth amid rising global uncertainties, reports Vivek Kumar M. ■ PAGE 7 Trump’s latest: 100% tariff on Brics nations 75,620 81,827 83,631 FPIs carry forward bearish bets to Dec amid uncertainties WARNINGAGAINSTACTIONTO CHALLENGE DOLLAR 69,762 IN THE NEWS property prices to air and water quality in cities.He also mooted a“discount on propertyprices”to solve the pollution problem. Continued on Page 12 Kolkata