BRANDWAGON, P11 COMPANIES, P4 INTERNATIONAL, P5 NO ROOM FOR HALF MEASURES THE BIG PICTURE CHANGES WILL ONCE AGAIN Oyo is trying hard to live down the perception problem While the latest round goes to Ultratech, the cement fight goes on Warren Buffett’s donations to Gates Foundation to end when he dies CHENNAI/KOCHI, MONDAY, JULY 1, 2024 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOL NO. XLV 47, 18 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 GEN UPENDRA DWIVEDI on Sunday assumed charge as the 30th Chief of the Army Staff at a time India is facing myriad security challenges including along the Line of Actual Control (LAC). Gen Dwivedi succeeds Gen Manoj Pande, who superannuated after more than four decades of service. GOVT DEVELOPING INDICATOR FOR EXTREME POVERTY THE GOVERNMENT IS developing a national indicator to measure extreme poverty, as it aims to eradicate the same for the entire population of the country by 2030, reports Priyansh Verma. The government reckons anyone with income below $1.25/a day as living in ‘extreme poverty’. ■ PAGE 2 FRANCE VOTES IN POLLTHAT COULD USHER IN FAR RIGHT FRENCH VOTERS FLOCKED to the polls on Sunday in the first round of a snap parliamentary election that could usher in the country's first far-right government since World War Two, a potential sea change at the heart of the European Union. ■ PAGE 5 SKODATO GIVE SHAPE TO NEW INDIA STRATEGY SKODAAUTO PLANS to renew its India strategy to gain more market share via new affordable mass market vehicles like a sub-4-metre compact SUV and enhanced touch points, reports Rohit Vaid. The plan, said CEO Klaus Zellmer, includes introducing a slew of vehicles in the next few years. ■ PAGE 13 Rejig of capital gains tax likely to be deferred RUN-UP TO THE Set for July 5 rollout, motorcycle said to cut running cost by half ON FRIDAY, BAJAJ Auto, India’s fourth largest two-wheeler manufacturer, will unveiltheworld’sfirstmotorcyclepowered bycompressednaturalgas(CNG).ThePunebased automakerwill pitch the newbike to mileage-consciousbuyers,inanattemptto challenge mileage leaderHero MotoCorp. Capable of running on both petrol and CNG like a typical bi-fuel vehicle, the new motorcycleclaimstohalvetherunningcost when compared to a petrol-only variant through better efficiency. There is also a 50%reductioninCO2 and75%reduction in carbon monoxide emissions. Though the power, efficiency details ■ Govt wary of market volatility since restructuring might result in tax increases 2024-25 PRIYANSH VERMA New Delhi, June 30 THE GOVERNMENT IS unlikely to make any change in the structure of capital gains taxes in the coming Budget, as it intends to defer the much-talked-about recast of these taxes to the Budget forthe next financialyear,official sources indicated. “We have received representations (for streamlining taxation of capital gains across asset classes), from the industry… these are not new,” an official said. The July Budget, however, might not include any changes in capital gains tax regime,the person said. Industry and tax experts have told the government there is an urgent need to bring uniformity in capital gains tax rates among different asset classes, because there is no consistencyin tax rates orholding periods for different types of instruments. Even within items in the same asset class, there are disparate rates and tenures.Even the indexation benefit varies in different situations. The decision to postpone the changes is also because the government thinks it might send wrong signals to investors, since the streamlining might result in tax increases in many important categories. Also, the government doesn’t intend to restructure the tax regime in the middle of the year, one of the sources said, and added that the capital market volatility is best ■ Doesn’t want to change tax regime in the middle of the year ■ Industry, experts have sought uniformity in capital gains tax rates among different asset classes 66% ■ Bajaj CNG bike expected to be entry level / commuter model with sub-125 cc engine andotherspecificationsoftheproductwill be out on the day of the launch, the bike is expected to be an entry level/commuter model with a sub-125 cc engine.The bike has been developed from the ground up to run on CNG, and is not a modified version of any of existing Bajaj product.The company is expected to price it at a premium compared to otherbikes in its class. 16% Continued on Page 13 ■ They say rejig will PRASANTA SAHU New Delhi, June 30 encourage higher compliance, reduce litigation between taxpayers and tax officers THE MONETISATION PIPELINE THE CENTRE WILL likely ramp up its target formonetisationofbrownfieldassetsthisfiscal to a record `2 trillion, up from the original goal of `1.67 trillion. The move is expected to help ease the pressure on the Budget funds for infrastructure and welfare measures over the medium term. The government had set an ambitious `6 trillion asset recycling target under the National Monetisation Pipeline (NMP) over thefouryearsthroughFY25,bymonetisation (long-term leasing) of operational assets in sectors like roads, mining, power, petroleum and airports. “Aftermaking considerable progress in the assetmonetisationprogrammeinthelastthree years and a robust pipeline,we aim to achieve closeto`2trillioninthecurrentfinancialyear,” aseniorofficialsaid.Afterthegeneralelections, theministrieshavebeensensitisedabouttheir goals as well and the revised plan will likely be firmedup shortly,the official said. Despite railways lagging massively compared to its share in overall asset monetisation, the NMP achievement has been `3.85 trillion or90% of the `4.3 trillion targeted in the first three years in upfront revenues, as well as revenue sharing from operations and capex from private parties. Themonetisationofcoalandothermining avoided for now. Currently, long-term capital gains are in general taxed at 20%, but in the case of equities, the rate is 10%, if the total gain in a financialyear exceeds `1 lakh. The short-term capital gains tax rate for equities and related assets is 15%. The tax rate also depends on whether the securities transaction tax (STT) was paid or not. Continued on Page 13 ● BCCI announces `125-crore cash prize for T20 World Cup triumph (` trillion) Target Achievement FY22 FY23 ■ Expected to be priced at a premium compared to other bikes in the class Rajiv Bajaj, managing director, Bajaj Auto,hadearliersaidtherunningcostofthe CNGbikewillbe50%ofapetrolbike.Ifthe averagerunofapetrol-powered125ccbike in a month is 500 km, its cost of running will be `950-1,100 per month.With the CNGbike,thiswillbe`450-500permonth. consistency in rates, holding periods and indexation benefit ■ Flag lack of Bajaj share in FY24 ■ `450-500 a month running cost compared to `950-1,100 for petrol bike, claims Bajaj Monetisation goal for FY25 to rise to `2 trn 2* FY24 FY25 *likely assetsisexpected to fetch more than `61,000 crore in FY25 as against the original target of `10,600 crore.The mining sector had yielded upfront revenues and capital expenditure of `58,000croreinFY22,`60,000croreinFY23 and ` 60,884crore in FY24.The target forthis segmentwasenhancedto`37,500crorefrom the initial goal of `6,060 crore for FY23. In FY22the targetwas `3,394 crore. Continued on Page 13 TISS withdraws termination notices sent to 100 employees FE BUREAU New Delhi, June 30 TWO DAYS AFTER issuing termination notices to over 100 staff members across its four campuses, Tata Institute of Social Sciences’ (TISS)withdrewthe notices on Sunday.The reason for the termination was funds shortfall from the Tata Education Trust The reason (TET). TISS has four for the campuses in termination Mumbai and Tul- was funds japur, Hyderabad shortfall and Guwahati. Among the from Tata staffers issued Education notices were 55 Trust teachers and 60 non-teaching staff members. Among the teachers, 20 were dismissed from the Mumbai campus, 15 from Hyderabad, 14 from Guwahati, and six from Tuljapur. A statement issued by the institute on Sunday said,“TET has committed to releasing funds for the salaries ofTETproject/ programme faculty and non-teaching staff.” In-house cells for Ola EVs next yr AI EXPRESS UNION ALLEGES UNFAIR LABOUR PRACTICES NARAYANAN V Bengaluru, June 30 AIR INDIA EXPRESS' cabin crew union has alleged unfair labour practices by the airline, including in issuance of charge sheets to its members, and sought the intervention of the labour commissioner to resolve the issues. ■ PAGE 4 FE S P E C I A L S share of sub-125 cc segment controlled by Hero MotoCorp in FY24 SWARAJ BAGGONKAR Mumbai, June 30 FOR A SIMPLER STRUCTURE BUDGET MAKING AN EFFICIENCY PLAY 1.8 1.56 NEW CHIEF OF ARMY STAFF TAKES CHARGE Bajaj CNG bike to take on Hero 1.62 1.32 NEWS REVIEW SLATED FOR BUDGET FY26 0.88 0.97 IN THE IPO-BOUND OLA Electricexpectsitselectric vehicles (EVs) to be powered by lithium-ion battery cells manufactured in-house,by next year. “Earlynextyeariswhenyoucanseeour own cells in our own products,” chairman and managing director BhavishAggarwal saidatapressconferenceattheEVmaker’s headquarters in Bengaluru on Saturday. The company is just a few months away fromfinalisingtheproductionprocessand commercialisation,he said. The country’s largest selling electric two-wheeler manufacturer is ramping up Ola Gigafactory, a 110-acre cell manufacturing plant near its electric two-wheeler Cricket fans spill onto the streets to celebrate India’s victory in the ICC Men’s T20 World Cup, near India Gate in New Delhi early on Sunday. The victory around midnight sparked celebrations across the country. While Prime Minister Narendra Modi conveyed his congratulations on phone, BCCI secretary Jay Shah announced a cash prize of `125 crore for the team. ● THE ROAD TO T20 GLORY, PAGE 18 PTI plant in Tamil Nadu’s Krishnagiri district. Ola Gigafactory has commenced operations with an initial capacity of 5 GWh BHAVISH AGGARWAL, CHAIRMAN & MD, OLA ELECTRIC BATTERY PACKS COST 35-40% OF EV 2-WHEELER COSTS…VERTICAL INTEGRATION WILL HELP US IN COST REDUCTION (GigaWatthours),whichwillbescaledupto 100 GWh in phases. Currently, 1.5 GWh of the capacity is operational as part of Phase 1A. The companyislookingtoexpanditto5GWh(Phase 1B) bythe end of theyear. “We have invested close to $100 million for Phase A of the gigafactory expansion,”Aggarwal said. Providingaroughcalculation,he said an electric two-wheeler requires 3 kW (kilowatts) of energy and 5 GWh can power up to eight million scooters.“We can easily serve ourselves and other customers both in India and even otherpartsof theworld,”Aggarwal said. Continued on Page 13 BANK ON MONSOON REVIVAL TO BOOST DEMAND ‘Practical use cases to boost enterprise AI PC adoption’ Interview with VIinay Sinha, corporate VP, India Sales, AMD (figures in %, y-o-y change) (figures in %, y-o-y change) FMCG growth: urban vs rural Urban Rural 8 Source: Kantar Rural inflation, meanwhile, has outpaced urban inflation for 11 months in a row to May 2024, according to the Ministry of Statistics and Programme Implementa- Source: MoSPI tion (MoSPI). It stood at 5.3% in May, exceeding urban inflation by 110 basis points. As rural households tend to spend more on food,the proportion 0.4 0.8 -0.3 -0.4 0 -0.9 -1.3 -1.3 -1.1 May ‘24 Apr ‘24 Mar ‘23 Jun ‘23 Sep ‘23 Dec ‘23 Mar ‘24 Mar ‘24 2.4 (Quarter ended) Rural -0.9 -1.2 (figures in %, y-o-y chg) -0.8 5.8 Feb ‘24 4.8 4.7 Jan ‘24 5.8 5.6 Dec ‘23 5 Nov ‘23 5.9 Urban Real rural wages: Where it stands 4.7 5.3 4.6 5.1 5.3 5.9 5.5 5.9 4.9 5.3 4.8 5.3 4.1 5.5 4.1 5.4 4.2 5.3 11.8 Oct ‘23 ■ eFE, P12 THE REVIVALOFthemonsoonafter a deficient June spell is good news forthefast-movingconsumergoods (FMCG) market, especially in rural areas, top executives have told FE. But a closer look at rural inflation andrealwagegrowthsuggestsrural revivalwillbegradualasconsumers in the hinterland contend with shrinkingwages and higher prices. Latest available data from the Centre for Monitoring Indian Economy (CMIE) shows that real rural wagescontractedinasmanyas25of the27monthsuptoFebruary2024. February,inparticular,sawabigcontraction, of 3.1%.The highest contraction recorded before this was 2.9%inSeptember2022,CMIEsays. Consumer price index: urban vs rural inflation Sep ‘23 These provide higher returns when interest rates fall DECODING DEMAND Aug ‘23 ■ PERSONAL FINANCE, P9 Go for long-term bonds for capital appreciation VIVEAT SUSAN PINTO & SAIKAT NEOGI Mumbai/New Delhi, June 30 7.2 7.6 6.6 7.0 Operators have spent a huge sum of money acquiring 5G spectrum in 2022 FMCG firms see rural green shoots, but wage stress weighs Jul ‘23 ■ EXPLAINER, P8 Why telcos finally went for a tariff hike -3.1 Feb ‘23 Mar ‘23 Apr ‘23 May ‘23 Jun ‘23 Jul ‘23 Aug ‘23 Sep ‘23 Oct ‘23 Nov ‘23 Dec ‘23 Jan ‘24 Feb ‘24 Source: CMIE Economic Outlook of food and beverages in the rural basket is more than half at 54.18%, compared with 36.29% for urban areas, say experts. So, changes in food inflation tend to affect rural inflation more than anything else. Yet, there are concerns, admits Mohit Malhotra, chief executive officer (CEO) at Dabur India, among the country’s leading FMCG companies with a high exposure to rural areas. While the FMCG industry derives around a third of its sales from rural areas, Dabur and Hindustan Unilever (HUL) get about 40% of their sales from rural areas, according to sector analysts. “Real wage growth is a concern because it could hurt FMCG consumption in rural areas. For now, though,we’ve been seeing a revival in rural areas,which we believe will get a fillip with the monsoon getting back on track,”Malhotra says. Market researchers Kantar and Nielsen sayrural markets have been a“bright star”for the FMCG sector, with rural growth overtaking urban growth in the January-March 2024 period in five quarters. Continued on Page 13 CHENNAI/KOCHI