Decoding the data behind GDP, capex and telecom tariffs

Story #1

ride on investment

India’s GDP grew 8.4% in the quarter ended September, data released on Tuesday showed. The growth exceeded most forecasts, including the Reserve Bank of India’s estimate of 7.9%. The main factor was the rapid revival in investment. The proxy gross fixed capital formation (GFCF) for investments jumped to 102 per cent in the same quarter two years ago. Worryingly, private consumption and government final consumption remained well below pre-pandemic levels.

Story #2

Tariff Games 20-25%

This is the range of tariff hikes announced by major telcos in the last few days after providing extremely cheap services for years. Reliance Jio, which impressed a race to zero since its entry in 2016, on Sunday joined the list of telecom companies to hike tariffs. The company hiked its prepaid plan tariff by 21%, which is enough to match the prices offered by rivals Bharti Airtel and Vodafone Idea. The tariff hike, while burdening consumers, is expected to help telcos strengthen their balance sheets. Indian telcos have offered some of the lowest tariffs globally over the years, and this is haunting them.

Story #3

Jobs Jinx

India’s urban unemployment rate fell to 9.4% in the March quarter, data released this week showed. This was a major improvement since the jobs crisis during the first nationwide lockdown. However, recovery was not the same for men and women. While unemployment for urban men has dropped to a pre-pandemic level of 8.7%, it is still higher at 11.8 percent for women, compared to 10.5 percent a year ago.

Story #4

trailing target

The year began with both the Center and the states announcing huge capital expenditure plans to help the economy recover faster from the pandemic. However, halfway through the fiscal year, most states have spent a third or less of what is estimated in the budget. The Center is also lagging behind, having spent only 46% of the budget capex in the first seven months. However, backloading of capex in the coming months cannot be ruled out.

Story #5

foggy year

The late arrival of monsoon this year meant relatively clean air for the national capital in October. However, the situation deteriorated sharply in November. The air quality in Delhi hit its worst level in seven years due to stubble burning during the month. The city witnessed “severe” air quality in 11 days and not a single “good” air quality day.

Story #6

Omicron scares

The new version of the coronavirus, Omicron, is headed for travel restrictions again. India, which saw a disastrous second wave this year, is also taking precautionary measures, barely five days after the government announced it has withdrawn its plan to resume scheduled international flights from December 15. Several states are also enforcing strict protocols at airports. These measures could impede the revival in airline passenger traffic.

Story #7

$18 billion

Nissan Motor Co. plans to invest over the next five years to strengthen its lineup and drive long-term growth through battery-powered cars. Bloomberg reported that the company said it would introduce 23 new models by fiscal year 2030, which would include 15 new electric vehicles. Nissan was one of the first to mass-produce electric vehicles with the launch of the five-seater hatchback Leaf in 2010. The company now aims to electrify half of its fleet by the end of the decade.

Weekly Chart: on top

Indian,The original Parag Agarwal has taken over as Twitter’s chief executive officer, joining a growing list of such executives who run top US companies. Satya Nadella is running Microsoft, America’s second most valuable company. Sundar Pichai runs Alphabet, the third most valuable company.

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