Arvind's Newsletter

1.UPI transactions cross 100 billion mark in FY24; clock 131 billion

In a testament to the digital transaction boom, Unified Payment Interface (UPI) transactions in India posted a record 57 per cent rise in volume and 44 per cent rise in value in 2023-24 compared to the previous financial year. In March 2024, transactions saw a 55 per cent increase in volume to 13.44 billion and 40 per cent in value to Rs 19.78 trillion compared to March 2023.

This was the first time that UPI transactions crossed 100 billion, finishing at 131 billion in a financial year, up from 84 billion in 2022-23. The year also saw a record value of Rs 199.89 trillion, compared to Rs 139.1 trillion. In February 2024, transactions stood at 12.10 billion and Rs 18.28 trillion, respectively. In January 2024, they were 12.20 billion and Rs 18.41 trillion, in terms of volume and value.

2.Private equity investment falls 6-year low to $24.2 billion in FY24

Private equity (PE) investments in India have fallen to a 6-year low at $24.2 billion in the financial year ending March 2024. Investments via PE deals are down 47 per cent compared to FY23, when private equity deals worth $45.8 billion were signed.

Multiple factors contributed to this trend, including lack of liquidity in the international markets. The other factors are increasing interest rates, volatile market conditions, funding winter, geopolitical uncertainties and tight private markets.

Despite the slowdown in the financial year gone by, private equity firms and bankers are optimistic about the future.

US-based private equity major KKR said it is planning to invest a significant portion of its new $6.4-billion Asia-focused fund in the Indian infrastructure sector — roads, highways, and renewables. It has already invested $10 billion in the country.

Another US-based PE firm, Blackstone plans to assemble a $25 billion portfolio of Indian PE assets over the next five years, Bloomberg reported recently.

Singapore’s Temasek has invested $17 billion in India so far, and plans to pump in another $9-10 billion in the next three years. These will be in healthcare, IT, SaaS, and fintech sectors, its executives said in July last year.

The head of Sequoia Capital’s former India unit says the country is getting a huge boost from investors moving their money away from China as geopolitical tensions reshape the global venture capital market.

Shailendra Singh, managing director of Peak XV, one of Asia’s biggest tech investors with $9bn in assets under management, told Financial Times that investment activity had picked up pace and he hoped to this year double the dollars deployed in 2023.

3.Indian Oil Corporation prepares for Energy Transition with investment in Lithium ion Batteries joint venture with Japan’s Panasonic

Panasonic Energy, a group firm of the Japanese electronics giant, is set to enter a joint venture with government-owned Indian Oil Corporation to manufacture cylindrical lithium-ion batteries, which are used in electronics as well as in electric two- and three-wheelers.

 Panasonic Energy has been making automotive batteries since it was set up in 2022 and is one of Tesla’s strategic partners. Currently, battery packs are only assembled in India with cells being imported, however, the venture is being carried out in anticipation of increasing demand for electric vehicle batteries. 

4.What 10 Years of Modi Rule Has Meant for India’s Economy, opines Alex Travelli of New York Times

Narendra Modi has kept India on its swift upward path among the world’s largest economies. Many Indians are better off, though wealth gaps have widened.

Now as Mr. Modi stands set to secure another term as prime minister in elections starting on April 19, the value of India’s stock market has grown threefold since he first took office. India’s economy is almost twice as big as it was.

Stocks have risen so much because the number of Indians with enough wealth and appetite for investment risk has jumped — to nearly 5 percent of the population from barely 2 percent.

But the economic gains have been widely unequal. The bulk of India’s growth depends on those at the top of the income ladder, including a coterie of huge and tightly controlled businesses.

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5.China economy -green shoots? Chinese manufacturing activity expanded in March for the first time in six months, boosting hopes of an economic recovery, even as the country’s slumping property market remains a drag on growth.

The latest data follows an increase in exports and strong industrial output for January and February, leading several analysts to upgrade their annual growth forecasts for China. The indicators suggest the industrial sector may be central to the country’s recovery, though experts have urged policymakers to prioritise consumer spending. Beijing is also looking to make headway in the high-tech sector: “What China really wants to be is the leader of the next industrial revolution,” a China tech analyst told The Economist.

Even as Xi Jinping took on the role of salesman-in-chief last week as he sought to persuade a group of visiting US chief executives that China was still a good investment, reported the Financial Times.

6.OpenAI will not release its latest artificial intelligence tool, which it says can convincingly imitate real humans’ voices given small samples of audio, over misuse concerns. 

The company released a preview of Voice Engine, but said it hoped the quality of that preview demonstrated the need to “bolster societal resilience” against the potential harms of generative AI. Voice-cloning can be used to overcome voice authentication, such as for banks, Ars Technica noted. Voice Engine is not the first AI voice synthesis tool — Meta and Microsoft have both released their own in the last couple of years — but OpenAI’s worries about its impacts reveal a growing nervousness about AI misinformation.

7.Mumbai in 36 hours by Saumya Roy in New York Times

8.The rise of the Super-commuter; Emma Jacobs in Financial Times

More people are embracing longer work commute to enjoy better quality of life.

The proportion of commuters globally doing a journey of 90-120 minutes at least once a week has risen from 2.4 per cent in 2020 to just over 4 per cent in 2024, according to Euromonitor. Those with a commute of more than 120 minutes rose from 2.7 per cent to 3.4 per cent.

Some employers are attempting to ease the financial burden on long-distance commuters beyond allowing them to work part of the week from home and offering rail season ticket loans.

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