Arvind’s Newsletter

1.UPI transactions hit a new record with ₹18.23 lakh crore in Dec; 54% higher

The volume of UPI (Unified Payments Interface) transactions continues to rise month after month as the total monthly transaction amount touched ₹18.23 lakh crore in Dec last year, 54 percent higher than the corresponding data of 2022.

In terms of the number of transactions, the figure reached 12.02 billion, witnessing 42 percent higher than the previous year figure.

It is noteworthy that the transaction amount had hit ₹17.40 lakh crore in November and ₹17.16 lakh crore in October.

2.Jefferies Optimistic On India Citing Wave Of A Multi-Year Capex Upswing

India became the fastest-growing large economy in the world over the last two years mainly due to a renewed capex cycle, a well-capitalised banking system, robust credit growth, an upturn in the housing sector, robust domestic consumption and growing services exports, according to Jefferies. The long dormant capex cycle, both in housing and corporate, has just started picking up and should be a significant growth driver over the remainder of the decade, it said.

The visibility of India's cyclical upturn, full-blown capex cycle, robust demand and expected interest rate easing in 2HCY24 gives us enough confidence in Indian companies to deliver 15% plus earnings growth next year, the research firm said. Multiple large drivers such as supply chain diversification and production-linked incentive schemes will lead to capex, driving optimism across industries.

New project announcement data shows a surge in the chemicals industry, a key beneficiary of the supply chain split. The order flow with the capital goods majors—Larsen & Toubro Ltd., Siemens Ltd., ABB India Ltd., and Thermax Ltd.—has risen by an average of 28% year-on-year for the last six quarters and up 63% YoY in 2QFY24. The spurt in housing construction bodes well for a long supply chain of building materials, including electrical, cement, tile, etc.

Read more at: https://www.ndtvprofit.com/economy-finance/jefferies-optimistic-on-india-citing-wave-of-a-multi-year-capex-upswing
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3.India’s Food-Security Problem Is the World’s, Too

Climate change is already beginning to reshape global agriculture. India, the world’s most populous country, looks particularly vulnerable: not just because of extreme weather, but because of government price controls.

Fixing the problem is becoming more urgent, both for India and the world—because India is a big food exporter, too. But politics makes that very difficult.

In early December, India banned overseas shipments of onions until March in an effort to tame domestic prices. That is on top of export restrictions on rice, wheat and sugar already imposed over the past 18 months. And since India is the world’s largest rice exporter, second-largest sugar and onion exporter, and a significant wheat producer, the bans are wreaking havoc globally. Thai rice prices had risen 14% and Vietnam rice prices had risen 22% from July levels by October, according to the International Food Policy Research Institute. Malaysia and the Philippines introduced their own measures to damp rising prices after India’s curbs on rice exports in July.

Climate change will almost certainly pose a major problem for India’s food supply. India’s Ministry of Agriculture and Farmers Welfare recently estimated that, in the absence of adaptation measures, rain-fed rice yields could fall 20% by 2050.

But domestic agricultural policies are almost as big a problem.

At present, the government sets price floors for two dozen crops, guarantees purchases of certain agricultural products, and provides subsidies to farmers for fertilizers, electricity and transportation. All that might seem positive for food security, but on net it probably hampers investment and food supply growth. Price floors mean that supply might sometimes exceed final buyers’ willingness to pay during slow times, leading to wastage. And restrictions on exports artificially depress domestic prices when global demand is hot.

4.This month’s elections in Bangladesh and Taiwan kick off a year in which more than 2 billion people will cast ballots worldwide. 

The votes, from highly rated democracies such as Finland to autocracies like Russia, will culminate in the world’s most important election, that of the United States: “309 days that will change the world” according to the American journalist James Fallows. The “marvelous act of political agency”,as the Indian expert Pratap Bhanu Mehta put it, nevertheless sparked worries worldwide, including the implications of a return of Donald Trump, ascendant nationalism, and the impact of culture wars globally. “The case for foreboding,” he wrote in The Indian Express, “is strong.”

5.Sony, Canon, and Nikon to develop digital signatures for photographs, distinguishing shots from AI-generated images

The three camera giants have agreed on a global standard for digital signatures, which will make them compatible with a web-based tool called Verify. This tool, launched by an alliance of global news organizations, technology companies, and camera makers, will allow anyone to check the credentials of an image for free. Verify will display the relevant information if an image has a digital signature. If artificial intelligence creates or alters an image, Verify will flag it as having "No Content Credentials."

The need for such technology is evident, as deepfakes of prominent figures like former US President Donald Trump and Japanese Prime Minister Fumio Kishida have gone viral this year, raising questions about the trustworthiness of online content. Moreover, China's Tsinghua University researchers have developed a new generative AI technology called a latent consistency model, which can produce about 700,000 images daily.

6.Top travel trends for 2024 will include “star bathing” and home swapping, Condé Nast Traveller predicted. 

After 2022 and 2023 saw a return to normal travel — and more — following the pandemic years, in 2024 “travellers will be putting what is important front and centre in their travel plans.”That includes more eco-friendly options — scuba diving to work on conservation projects, for instance — as well as appreciating the natural world, such as by going to places where you can really see the stars. The rise of distance working means more people will travel for longer periods, exchanging homes for a month or more to get to know a new city.

7.Tata Sons taps private equity funds for a stake sale in Tata Digital

Tata Sons is set to start the formal process of selling a minority stake in Tata Digital Pvt. Ltd (TDPL), the company that operates the Tata Neu super app, to potentially raise around $1 billion from global private equity funds.

TDPL is a subsidiary of Tata Sons and was incorporated in 2019 to develop a consolidated e-commerce platform under the ‘Tata Neu’ brand, which hosts diversified businesses of Tata companies to connect to and service the needs of consumers on a single platform. “If things remain on track, a deal can be expected before March this year.”

In addition to the Tata Neu digital platform, consumer brands such as Croma, as well as loyalty programmes of various brands and digital payment services such as Big Basket, Croma, IHCL, Starbucks, Westside, Vistara and Tata Cliq, are housed in TDPL. The company also owns controlling stakes in e-grocer Big Basket and e-pharmacy 1mg.