POLITICS | PAGE 11 BRANDWAGON | PAGE 9 Jaishankar in US for talks on deepening relations Buying jewellery today is akin to fine dining: Indriya CEO BENGALURU, WEDNESDAY, DECEMBER 25, 2024 VOL NO. XXXVII 210, 16 PAGES, `12 INTERNATIONAL | PAGE 7 Chinamulls$411-bnspecial treasurybondissuance FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 78,472.87 ▼ 67.30 NIFTY: 23,727.65 ▼ 25.80 NIKKEI 225: 39,036.85 ▼ 124.49 HANG SENG: 20,098.29 ▲ 215.16 `/$: 85.20 ▼ 0.08 `/€: 88.56 ▲ 0.04 BRENT: $73.55 ▲ $0.92 GOLD: `75,640 ▼ `31 IN THE NEWS Economic growth likely to pick up in H2: RBI bulletin THE COUNTRY’S ECONOMIC growth trajectory will likely pick up in the second half of the current financial year, driven by domestic private consumption and a sustained revival of rural demand, the Reserve Bank of India (RBI) said in its monthly bulletin released on Tuesday. ■ PAGE 2 Rabi sowing marginally lower than last year WITH JUST A few weeks left for the season to be over, the sowing of rabi or winter crops such as wheat, pulses, oilseeds and coarse cereals has been a tad below last year's level so far, as the area under oilseeds has seen a decline, reports Sandip Das. ■ PAGE 2 Tata Capital listing hopes drive group company shares SHARES OF TATA Group rose on Tuesday after reports suggested that the salt-to-software group has begun the groundwork to list its financial services arm— Tata Capital—through an IPO of $2 billion or around `17,000 crore, reports Anupreksha Jain. ■ PAGE 6 PRE-BUDGETMEETINGWITH PM EconomistsseekFTAs, land&labourreforms ● Stress the need to return to 7-8% GDP growth PRASANTA SAHU New Delhi, December 24 ECONOMISTSONTUESDAYmadea strong pitch for a new set of reforms toseamlesslyintegrateIndiawiththe global supply chains, including an aggressivepursuitoffreetradeagreements (FTAs), easing of land and labourmarket rigidities,and steps to raise farm income and overall consumption.Intheirpre-Budgetmeeting with Prime Minister Narendra Modi, the economists also stressed the need to return to 7-8% gross domesticproduct(GDP)growth,and the “next phase of development cycle”,sources said. Modi met 19 economists from various sectors to seek their suggestions,aheadofBudgetFY26,whichis tobepresentedinthebackgroundof slowing of economic growth, tepid urbanconsumption,persistingexternal volatility, and the threat of high tariffs further impeding world trade and stoking global inflation. India’s GDP rose by 5.4% in JulySeptember, the lowest rate in seven quarters, as weaker expansions in Prime Minister Narendra Modi chairs a meeting with economists on Tuesday. FM Nirmala Sitharaman, Niti Aayog vice-chairman Suman Bery (far right), and PM’s principal secretary PK Mishra were also present manufacturing and consumption hurt the economy. Modiencouragedtheeconomists togiveboldsuggestionsandemphasised that Viksit Bharat can be achieved through a fundamental change in mindset which is focused towards making India developed by 2047, a source who attended the meeting said. “We should aggressively go for FTAs with more countries.Somepeopleevensuggestedwe should join the RCEP because without getting into global value chains, we will not be able to break through the next development cycle,”one of theeconomists,presentinthemeetingwith the PM,said. The government has decided not to join the Regional Comprehensive Economic Partnership (RCEP) after the Galwan clash with China. RCEP was originally being negotiated between16countries—Aseanmembers and countries with which they have free trade agreements (FTAs), namelyAustralia,China,Korea,Japan, NewZealand and India. Continued on Page 11 ● STARRY, STARRYNIGHT Happiest Minds sees slower revenue growth in FY25 M ADHABI PURI BUCH won’t forget 2024 in a hurry.In an interview to a business magazine at the beginning of the year,she had proudly proclaimed that she knew exactly“where all the skeletons are hidden”.Just about six months after that statement, the world turned upside down for the first woman chairperson of the Securities and Exchange Board of India (Sebi),with many questioning whether the socalled“skeletons”were actually hidden in her cupboard. Most of the questions raised about her integrity are still mere allegations as they have not yet been proven but her position as a markets regulator who would often talk to the regulated about the virtues of governance and proper disclosure has become uncomfortable. That the highprofileBuchisfeelingthepressure is evident from her relatively fewer appearances in public forums after the allegations started flying thick and fast,even though the government seems to bebackingher.Notevenherworst detractors would describe her as media-shy; yet, she has started avoiding direct media interactions and didn’t hold the postboard meet presser since October — a rare deviation. It all started going awry from August this year when US-based short seller Hindenburg Research accused Buch and her husband of complicity with the Adani Group, pointing out that the couple used the ‘exact ● Companies include Google-backed Pixxel,Tata arm NIVEDITA BHATTACHARJEE Bengaluru, December 24 Crowds throng the decked-up Bow Barracks area in Kolkata, on Christmas eve ■ EXPLAINER, P9 JOYDEEP GHOSH Mumbai, December 24 NEWSMAKERS OF THE YEAR - II ● Buch is the first person from the private sector to head Sebi; hopefully she won’t be the last one »INSIDE« KEYTHEMES: A MIDDLE-CLASS MELTDOWN PAGE 16 same funds used byVinod Adani, brother of Gautam Adani’ to invest — which it interpreted as a key reason for Sebi’s inaction against the group. The Congress caught on to the allegations and made several of their own, many bordering on being ridiculous, but it nevertheless kept the pot boiling and continues to do so. The Buch couple has vehemently denied all the charges. There were also allegations about conflicts of interest due to a 99% ownership in the Indian consulting firm Agora Advisory, which continued to earn revenues despite herappointment as Sebi’s whole-time director and chairperson. Again, these were denied by the Buchs,but the continuous uproar has definitely crimped Buch’s style of operation. Clearly, she is yet to win the perception game. Her second-biggest setback was the handling of employee protests. After reports accused senior Sebi officials of misbehaviour,themarketsregulatordidthe unthinkable — first, issued an official statement accusing employees of being influenced by outsiders,and thenwithdrewit as outraged employees continued to protest – a PR and HR disaster. Like former Sebi chairman M Damodaran told FE in a recent interview:“Whenyouissueapress release, you should be able to stand byit later.It is an unfortunate development.” Among other things, Buch’s grand plan to implement T+0 settlement—the first globally— simply fell flat. Continued on Page 11 Localsatellitespush draws30aspirants FE S P E C I A L Irregular employment and low wages make PM-SMY unaffordable for unorganised workers Walking into a minefield SHYAM KUMAR PRASAD HAPPIEST MINDS TECHNOLOGIES anticipates its revenue growth for fiscal 2025 to be at the lower end of the guided range of 30-35%, Venkatraman Narayanan, managing director and CFO of the company said, reports Padmini Dhruvaraj. ■ PAGE 4 Why informal workers don’t contribute to pension schemes ● MADHABI PURI BUCH, CHAIRPERSON, SEBI PTI Unincorporated Household sector adds 11 mn liabilities rise jobs in 2023-24 to 6.4% ofGDP 5G: Emerging tech firms eye 600 MHz band THE UNINCORPORATED NONagricultural sector in India has added about 11 million more jobs in October 2023-September 2024 with respect to the year-ago period, with the addition of 8.4 million establishments,official data on Tuesday showed, reports Priyansh Verma. THECRUCIAL600MHZband,which didnotfindanytakersinthe20225G spectrum auctions, is now seeing interestfromindustriessuchasaudio programme making and special events as well as broadcasting, officials said.This comes amid talks on updatingthenationalfrequencyallocation plan,reports JatinGrover. ■ PAGE 2 THE NET FINANCIAL liabilities of India’s households went up to `18.79 lakh crore in FY24 or 6.4% ofGDP,ariseoverthepreviousyear’s `15.96 lakh crore or 5.9% of GDP, data from RBI showed.At the same time, the net financial assets of households went up to `15.52 lakh crore or 5.3% of GDP. ■ PAGE 2 ■ PAGE 4 THIRTY DOMESTIC COMPANIES have answered the space regulator’s call to build and operate constellationsofEarthobservation(EO)satellites in a groundbreaking privatepublic partnership to reduce the country’srelianceonforeigndatafor defence,infrastructuremanagement and othercritical mapping needs. “We have received 9 applications...Each applicant represents a consortium, involving a total of 30 companies,” said Pawan Goenka, chairman of the Indian National SpacePromotionandAuthorisation Centre,or IN-SPACe. The regulator had sought “expressions of interest” (EoIs) in July to build home-grown satellite constellations as part of a broader strategy to monetise the sector and ensure data sovereignty. The government is doubling SPACE AGE ■ N-SPACe had sought EoIs in July to build home-grown satellite constellations ■ Govt to loan up to `350 crore NFRA slaps `2-cr fine on Deloitte Haskins for Zee audit MANU KAUSHIK New Delhi, December 24 down on the small satellite and data services market to carve out a leadingroleintheglobalcommercialisation of space. The market for such services, increasingly key for industries ranging from telecom to climate monitoring, is projected to reach $45 billion by2030. THE NATIONAL FINANCIAL Reporting Authority (NFRA) has imposed a fine of `2 crore on Deloitte Haskins & Sells,and penalties on two chartered accountants (CAs) for lapses in the auditing of Zee Entertainment Enterprises (ZEEL) for FY19 and FY20. The audit regulator found that Deloitte’s auditors failed to identify and report misrepresentation, and were“grosslynegligent”. Ina30-pageorder,theNFRAsaid thatprimafacie,theauditorshadnot discharged theirprofessional duties under the Companies Act as well as the standards on auditing (SA). ADeloittespokespersonsaid:“We havereceivedtheorderissuedbythe NFRA against the firm and two retired partners. We are currently reviewing it to determine our next course of action. We remain committed to maintaining the highest standards of audit quality.” Continued on Page 11 Continued on Page 11 to the winner; private firm to cover remaining cost ■ Baring Private Equitybacked SatSure among the applicants Significant import content in several sectors, sharper drop in other currencies to play spoilsport Labour-intensive exports: Gains likely to be short-lived ONTHE FACE ofit,therupee’songoing depreciation — it fell 9 paise to close at a new record low of 85.2 against the dollar on Tuesday — (in %) Korean won 12 6.5 4.5 Indonesian rupiah Philippine peso NARAYANAN V, KRISHNA BAROT & MUKESH JAGOTA Chennai, Ahmedabad, New Delhi, December 24 ■ In Apr-Nov this fiscal, India’s textile exports rose 6% y-o-y to hit ■ India's monthly Chinese yuan 2.7 STORM-II CURRENCY DROP IN 2024 Rupee 2 THE RUPEE shouldhavecomeasashotinthearm for India’s labour-intensive exports. The local currency’s decline came at an opportune moment, as some of these sectors like textiles-and-clothing were on the cusp of a gradual revival aftera prolonged slump. But the reality is much more nuanced: many sectors, including textiles and leather,have significant import content, which somewhat balances out the gains for onward shipments from a weaker local currency.Moreover,sincemanycompeting countries, including China, already have an edge over India in termsofeconomiesofscaleandcosts, with their currencies also falling as muchormorethantherupeeagainst thegreenback,thegainsforIndiaare either tenuous or non-existent in most markets. KVenkatachalam,chiefadviserat theTamil Nadu Spinning MillsAssociation,pointed out that while India exports yarn and readymade garments, it also imports significant readymade garment exports average at only $23.33 bn $1.1 bn ■ In comparison, China's are at $13 bn ■ Turmoil-hit Bangladesh also exports 3 times more than India amounts of cotton and other raw materialsindollarterms.Thisoffsets thebenefitsofexports,renderingthe revenuesituation(exportrealisation) neutral even amid the latest bout of rupee depreciation. ■ This contrasted with a decline in shipments in FY24 “If we start exporting finished goods with Indian raw materials alone, it will be beneficial for exporters,butthecurrentsituationis notthat,”hesays,addingthatamajor part of the raw materials used in export of yarns, including contamination-freeandextralong-staplecotton predominantly comes from the US,Brazil and westAfrica.According to industry estimates, around 3040%oftherawmaterialsusedincotton yarn intended for exports from India typicallydepend on imports. Therupee’sfallisthelowestwhen compared to the currencies of competing countries in Asia such as Korea,China,Indonesia,Philippines and Indonesia. In 2024, the Indian rupeehasfallenalittleover2%,while the Chinese yuan has been down 2.7%, Indonesian rupiah 4.5%, Philippine peso 6.5%, and Korean won12%.“Exportersarenotgaining much,”AjaySahai,CEO and directorgeneral at the Federation of Indian Export Organisations (FIEO),says. Prabhu Damodaran,convener of the Coimbatore-based Indian Texpreneurs Federation (ITF), however, says the rupee’s depreciation may have provided a modest advantage, butaddsthatthismaynotbeasignificant growth driver for textile exports. ITF,which has 500 companies as members, represents the entire textile manufacturing value chain,includingstandalonespinning firms,weavingunits,andappareland home-textile exporters.Damodaran says while buyers from Europe and America are already seeking longterm industrial partnerships with India,thecountrylacksthemanufacturing scale of China to fully meet even the existing demand. Continued on Page 11 BENGALURU