BRANDWAGON, P9 COMPANIES, P4 BACK PAGE, P16 RAKING IN VIEWS HARNESSING AI, DATA ANALYSIS DRIVING SYNERGIES Poll season: TV news channels could see a 15% rise in ad revenue Digitising manufacturing to be future-ready, says Hindustan Unilever CEO CarTrade Tech sees OLX Autos buyout as a game-changer CHENNAI/KOCHI, MONDAY, JUNE 3, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 23, 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 IN THE NEWS KEJRIWAL RETURNS TO TIHAR AS BAIL ENDS AFTER POLLS DELHI CHIEF Minister Arvind Kejriwal surrendered at Tihar Jail on Sunday, a day after his interim bail granted by the Supreme Court in the Delhi excise policy case ended. ■ PAGE 7 OPEC+ TO EXTEND OUTPUT CUTS TO SUPPORT PRICES OPEC+ AGREED TO extend its oil supply cuts, delegates said, as the group continues its efforts to avert a global surplus and shore up prices. The so-called “voluntary” cuts were set to expire at the end of June. ■ PAGE 3 INFRA COMPANIES, ALLIED FIRMS HIKE CAPEX FOR FY25 BUOYANT ON A RISING economy and demand that is aided by various government initiatives, infrastructure and allied firms are hiking their capital expenditure for FY25, report Rajesh Kurup & Kishor Kadam. ■ PAGE 4 RBI LIKELYTO MAINTAIN STATUS QUO: ECONOMISTS THE RBI’S SIX-member monetary policy committee is likely to maintain status quo on repo rate at 6.50% and “withdrawal of accommodation” stance in its upcoming meeting, 13 economists polled by FE said unanimously, reports Piyush Shukla. ■ PAGE 6 BIG PLAYERS SETTO APPLY FOR FINTECH SRO LICENCES WITH THE RESERVE Bank of India(RBI) leaving the door open for multiple selfregulatory organisations(SROs), several entities are looking to seek approval for ‘SRO’ licences in the fintech industry, reports Ajay Ramanathan. ■ PAGE 6 WHEAT STOCKS FALLTO LOWEST SINCE 2008 WHEAT STOCKS IN the central pool held by the Food Corporation of India and state agencies dipped to 30.09 MT at the start of this month, the lowest since 2008, reports Sandip Das. ■ PAGE 2 FE S P E C I A L S SPECTRUM ALLOCATION RULES AWAITED OneWeb, Starlink, Jio satcom launch likely only in 2025 ● AFTER MEDITATION, IT’S ACTION TIME PTI JATIN GROVER New Delhi, June 2 SATELLITE INTERNET SERVICE companies, includingBharti-ownedEutelsatOneWeband JioSatellite,mayhavetowaituntil2025toroll out theirservices as spectrum allocation rules are expected to take time. Elon Musk owned Starlink and Amazon’s Project Kuiper are also in the fray to offer satcom services. The department of telecommunications (DoT) is expected to send the pricing framework forspectrum to theTelecom Regulatory Authority of India (Trai) only after the rules on satellite spectrum allocation under the telecom law are finalised,officials said. AfterDoT’sreference,Traiwillstartconsultations with stakeholders, which will take at least six months.As such, recommendations are not expected before the end of the year. “Trai will start working on the satellite spectrum allocation terms once it gets clarity on the rules,”a DoT official said.Besides pricing, DoT is discussing the revenue share licence fee and spectrum usage charge,which satellite service providers should pay. One issue which needs to be resolved is whethersatelliteservicesshouldbetreatedon a par with the very small aperture terminal (VSAT) service licence, officials said.VSAT is a satellite communication technologywhich is useful to provide data connectivityto remote and inaccessible locationswhere there is limited or no terrestrial connectivity. Currently, ATMs use VSAT services. “There aremanycomplex issues regarding the licencing framework forsatellite services, pricing, etc. We are not in a hurry to allocate THE HOLD-UP ■ DoT to send pricing framework to Trai only after rules on satellite spectrum allocation are finalised ■ DoT also ■ Trai will then start consultations with stakeholders, which will take at least six months ■ Recommendations thus not expected before the end of the year discussing revenue share licence fee, spectrum usage charge that satellite service providers should pay the spectrum,”another DoT official said. Satellite internet services are best suited for far-flung areas, but to make them affordable,companies may need some form of governmentsubsidy.Thefocusoninternetbroadband services,in areaswhere telecom services are difficult to provide,also reduces the target market size of the nascent industry. Continued on Page 14 Lenders pitch lower infra default to RBI SACHIN KUMAR & JOYDEEP GHOSH Mumbai, June 2 THE STORY SO FAR LENDERS PLAN TO approach the Reserve Bank of India (RBI) forlowerprovisioning for infrastructure loans,citing the probability of default or PD,which has been falling consistently to 2% or even lower in the sector over the past five years. “WeareintouchwithRBIaboutthis number(PD),asithasfallensignificantlyinthepast fewyears.Iftheyacceptthisnumber,thenour problemwill be solved,”said one banker. PDisakeycomponentincreditriskassessment and used in the calculation of expected credit losses. It is a measure of the likelihood that a borrower will be unable to meet their debt obligations over a specified period. The banker said over a 10-year period, the PDcomesto5%.Butthisisprimarilybecauseof theabnormalriseinthenon-performingassets (NPAs)forthree-fouryearsaftertheassetqualityreview(AQR) guidelinescameinto play. Earlier,duetocorporatedebtrestructuring, the banking system saw postponement of NPAs during 2011- 2014. Following RBI’s announcementoftheAQRin2015,thesystem experienced a surge in bad loans as the new rulemandatedbankstoidentifyandrecognise stressed assets that had previously not been classified as NPAs. “Loans,which should have been classified Dec 2015 RBI announces Asset Quality Review (AQR), banks see spike in NPAs 11.2 Sept 2023 Gross NPAs of banks fall to decadal low of Triple treat for D-St HIMALAYAN WINS BJP wins third term in a row in Arunachal Exit poll results, GDP and GST data may power rally THE BJP ON Sunday returned to power in Arunachal Pradesh,with a decisive victory that saw it increase its tally from 41 to 46 in the 60member House,cementing its position as the most dominant party in thestate.Thisisthemostcommanding win for a party in the state since 1999 when the Congress won 53 seats.The statesawthenearwipeout of the Congress,which is down to a single legislator. ■ Page 7 SKM storms back to power in Sikkim THE SIKKIM KRANTIKARI Morcha (SKM) retained power in the Himalayan state with a landslide victory on Sunday, winning 31 of the 32 Assembly seats, restricting the Sikkim Democratic Front (SDF) to just one seat. SKM chief PremSinghTamangsaidonSunday his party remained “a part of the BJP-led NDA”. ■ Page 7 GREEN SIGNAL Markets likely to reverse 2% decline seen last week, say experts VIVEK KUMAR M Mumbai, June 2 EQUITIES ARE SET for a triple treat at the start of this week,with exit polls predicting a landslide victory for the incumbent government, FY24 GDP growth topping expectations and robust GST collections. If the exit poll numbers turn out to be accurate,benchmarkscouldbeheadingforfreshrecordhighs this week,according to market experts. The exit polls for the general elections — oneofthebiggesteventsforD-Streetthisyear — indicate a landslide victory for the BJP-led National DemocraticAlliance (NDA).Thiswill likelyhelp release some tension that has been building up over the last six weeks. “My initial feeling is that the market is down 2% last week — that is the first gap that’sgoingtobetakenout. Andthen,FIIswill need to cover their (short) positions at some point,”saidAndrew Holland,CEO ofAvendus Capital Alternate Strategy. Holland expects around 3% gains on Monday,and more if the results are better than exit polls. Healsohighlightedpositiveglobalfactors, including gains on Wall Street on Friday and talks of a ceasefire in Gaza,which could provide further impetus to bulls. “The exit polls indicate stability. It means thatiftheseexitpollsholdgoodeven90-95%, ■ Nifty is 2.6% away from lifetime high of 23,110.8 points ■ Sensex is 2.8% below its peak of 76,009.68 ■ Exit polls seen reducing uncertainty over ruling party's margin of victory points there will be no short-term uncertainty anymore.As faras policycontinuityis concerned, reforms can happen at a much quicker pace. All these things are good for the market,”said DPSingh,joint CEO of SBI Mutual Fund. The benchmark Nifty 50 and Sensex fell around2%each lastweek,whichmarketparticipants believe will likely be reversed with the major overhang behind. Continued on Page 14 Sops for deep tech in July Budget March 2018 Gross NPAs of banks touch Prime Minister Narendra Modi chairs a meeting to review the situation after Cyclone Remal, in New Delhi on Sunday. The PM chaired several meetings during the day, including one with top bureaucrats to review the 100-day agenda plan of the new government, and another to inspect the heatwave situation in the country. ■ Page 7 % 3.2 % May 3 RBI issues draft guidelines on project finance June 15 Last date to submit comments on draft norms asNPAsin2011or2012,werepostponedand became NPAs only 2015 onwards. So, if you take past 10 years, the PD will come to 5%. ThisseemstohavepromptedtheRBItocome up with the 5% provision on project finance loans,” said the banker. He said once this abnormal surge is taken out of the equation, things look much better. Continued on Page 14 MUKESH JAGOTA New Delhi June 2 HELPING HAND THE GOVERNMENT HAS firmed up plans to unveil a national policy to encourage deep tech startups with assorted tax concessions and other incentives, official sources told FE. The full Budget,likelyto be presented bymid-July,might announce an outlayforarelatedscheme,besidesafunding mechanism forsuch units,theysaid. The idea is give them a helping hand to improve their viability till they reach the commercial arena. The National Deep Tech Startup Policy (NDTSP) would also include differentiated treatment of these units from the other startups,and steps to reduce their costs by way of Customs duty exemptions or reduced tariffs on imported equipment, machinery, and raw material, as per the draftofthepolicy.Specialsupportwouldbe ■ Cabinet note in the works for national policy on deep tech startups ■ Budget to include outlay for related deep tech scheme, besides funding mechanism for startups ■ Special support in manufacturing, technologyintensive sectors ■ Tenure of funds to be longer, due to longer gestation period of these firms given to firms operating in manufacturing ortechnology-intensive sectors. The consultation process on the draft of thepolicyhasalreadybeencompletedanda Cabinetnoteonitisbeingprepared,asenior official said,on conditionof anonymity. Thepolicyfirstseekstodefinedeeptech ■ Customs duty exemptions or reduced tariffs on imported equipment, raw material startups and provide them support in sync withtheirrequirements. Typically,theseare earlystage startups based on scientific and engineering advancements that are yet to be developed forcommercial applications. Continued on Page 14 TECHNOLOGY CANNOT REPLACE HUMAN NUANCE, INNOVATION, SAY EXPERTS For coders,AI not a threat but a ladder up the value chain ■ EXPLAINER, P6 Why market rumours need to be verified The new Sebi rules will help in better price discovery ■ PERSONAL FINANCE, P11 ‘Increase SIP amounts by 8-12% every year’ Choose a diversified mutual fund instead of timing switches between large, mid and small cap funds, says PPFAS Mutual Fund’s Rajeev Thakkar S SHANTHI & PADMINI DHRUVARAJ Bengaluru, June 2 ARYAN KUMAR (NAME changed), a mid-level coder, has no fears of artificial intelligence (AI) taking over his job. “AI is helping coders like me to automate certain tasks. Beyond that,you need a human to verify the results generated for accountability, accuracy and for complex tasks,” he says. Many data scientists and AI experts echo Aryan’s thoughts. They feel that AI is helping coders enhance their job performance rather than taking over their roles. “AI frees up coders to focus on designing robust architectures, solving complex problems and improving user experiences. Essentially, AI acts as an assistant, HOWAI HELPS CODERS ■ Code suggestions: What the next line ofcode should be Run tests to ensure the code isworking ■ Automated testing: Creating tests for code automatically and running them to look for flaws ■ Syntax correction: Automatically correct mistakes ■ Bug fixing: Identify and fix errors enabling coders to achieve more with their time and skills,” Krish Ramineni,CEO Fireflies.ai,told FE. Tools like GitHub Copilot, Microsoft 365 Copilot and Replit help coders by suggesting the next line of code,correcting the syntax, ■ Debugging: fixing bugs and running debugging on top of the code.This speeds up the coding process and allows coders to concentrate on more significant aspects of their projects. AI is also used by programmes like DeepCode to examine the code for possible errors and make corrective suggestions. “Debugging and correcting code errors can be like trying to find a needle in a haystack. Debuggers with AI built into them can examineyourcode,find poten- tial problems and provide solutions. It’s similar to having a professional standing overyou,pointing out the precise locations of the problems,” Kamlesh Patil, a programmer at CoRover. Other specific tasks taken care of by AI include generating docstrings,adding comments,formatting code and creating unit tests.AI can also make things fasterbywriting a blueprint of the initial version, which the coder can edit to make things more specialised. We also have tools that will turn a simple UI-UX design into code. However, experts said that AI cannot replace the nuanced understanding and innovative thinking that human coders bring to problem-solving.“There are tasks that AI cannot handle, such as understanding human emotions,culture and values, which are crucial for designing user-centric applications,” Kartik Narayan, CEO, Staffing,Teamlease Services, said. Another area where AI will help coders rather than replace them is code testing. This is an essential, but time-consuming task. AI can create tests for the code automatically and run them to look for flaws.“Much like editing an essay,” Patil said. WhileAI has also proven instrumental in automating laborious processes like developing boilerplate code and carrying out extensive testing, it cannot perform hardcore coding that involves complex logic and architecture design.Such tasks will continue to require human expertise. Continued on Page 14 CHENNAI/KOCHI