According to market analysts, India’s stock market is just getting off on a big bull run. Healthy corporate profit growth over the next few years, combined with favourable demographics, could propel the indices to new heights in the coming years. In a May 27 note, Agrawal, co-founder and joint managing director of Motilal Oswal Financial Services (MOFSL), predicted that the S&P BSE Sensex will reach 200,000 in the next ten years, up nearly four times (4x) from its current level of around 51,500, and advised investors not to bet against India. Agrawal expects corporate profits to rise at a compound annualised rate (CAGR) of 15% over the next ten years, slightly higher than the country’s GDP, which he estimates at 12–13%. (nominal GDP). He assumes that future market returns will be in line with corporate profit growth.
According to Agrawal, the S&P BSE has returned a modest 10% CAGR over the last ten years, rising from 19,445 in March 2011 to 49,509 in March 2021. During this time, the market has weathered crises such as demonetisation, the ILFS debacle, and Covid. According to him, the Indian economy grew at a CAGR of 4% from 1.7 trillion in 2010 to 2.6 trillion in 2020E, while China’s economy grew at a 10% CAGR from 13.2 trillion in 2010 to 13.2 trillion in 2020E. He expects India’s economy to hit $5 trillion by 2029.
Several years ago, investor Rakesh Jhunjhunwala dubbed the market rally “the mother of all bull runs.
” According to Motilal Oswal’s Agrawal, the government now needs to vigorously divest its public-sector assets. He said the government should remove all ‘barriers’ to the divestment process and concentrate on job creation and development.
He argues that Covid is now a “well-known beast,” with vaccination signalling the start of the pandemic’s end. He predicts a K-shaped recovery, with larger companies recovering faster from the pandemic’s effects. As an investment strategy, Agrawal advises investors to pursue ‘value migration,’ in which value (i.e. income and market capitalization) migrates from outmoded to superior business models. He assumed that value migration presents a tremendous opportunity for sectors that experience value inflow. Telecom, information technology (IT), private banks, and private life insurance, he believes, are the sectors to invest in. the industries that will benefit from the economy’s reopening as a result of the Covid effect. He expects that pent-up demand will be released in these industries. Automobiles, consumer durables, paints, and select industrials are among them.
Open Network for digital commerce
How ONDC aims to change the Indian e-commerce industry.
Khushi Shah – Mumbai Uncensored, 3rd June 2022
The lockdown brought about a dramatic growth of e-commerce in the past few years, which has hampered the business of physical retailers.With super high class companies who have invested billions of dollars in research and development in India we have been going through the abuse of ‘aggregator superpower’ a monopolising model of e-commerce. Allegations by CAIT and others have ranged from predatory pricing and prioritising certain sellers to the foreign ownership of Amazon and Flipkart.
An attempt by the Indian government is being made to break down giant monopolies like amazon, flip kart, swiggy and so on with the introduction of ONDC which is supposed to be as revolutionary as UPI itself. It will not just be limited to products but also to services such as mobility, grocery, food order and delivery, hotel booking and travel, and many others.
ONDC is an open technology network based on open protocol which is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers.
The official government note was circumspect. “ONDC is a globally first-of-its-kind initiative that aims to democratise digital commerce, moving it from a platform-centric model to an open network,” it said. “[It] will enable buyers and sellers to be digitally visible and transact through an open network. No matter what platform or application they use.”
E-commerce is a complex business where every business has its unique supply chain and processes and standardisation is a challenge. It would require reconfiguration, including a complete revamp of their systems and losing advantages like control over the user interface and consumer behaviour insights. For the government however it will provide better control over what is sold and bought. In UPI, a recent government stipulation set a market share limit of 40 per cent for any service provider, which immediately dampens the growth of a market leader PhonePe which is owned by Walmart outside India.
In a marketplace-centric model, a buyer first selects a platform and then searches for a product there where then platform acts as an intermediary for the buyer and seller. In the new model, the buyer will search for the product first and then pick the right seller offering that item. The platform the seller is on becomes secondary. It aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. This provides all the small and medium fishes in the ocean with an opportunity to grow big, and simultaneously give a boost to Make in India.
“It’s (Open Network for Digital Commerce) an idea whose time has come. We owe it to the millions of small sellers to show an easy way to participate in the new high-growth area of digital commerce,” Nilekani, the co-founder and non-executive chairman of Infosys, himself supported this platform.
This makes it the most potent weapon the ruling dispensation has yet unleashed on India’s e-commerce duopoly.
Pet breeders stand to lose license if unregistered
Khushi Shah – Mumbai Uncensored, 24th May 2022
More than three years after the Prevention of Cruelty to Animals (Pet Shop) Rules, 2018, making it mandatory for pet shops to be registered with the respective State Animal Welfare Board (SAWB) companies still go one to flout laws.
On June 13, 2021 Corporation officials said they are now keeping a close eye on the pet trade and are ready to seize the shops if the owners do not get valid registration and trade licences.
As per the Prevention of Cruelty to Animals (Pet Shop) Rules, 2018, no person should sell or trade in pet animals, whether retail or wholesale, or establish operate a pet shop, or any other establishment engaged in sale, purchase or exchange of pets without obtaining a certificate of registration from the State Animal Welfare Board (AWB).
On 26th august 2021 the petitioner’s counsel Sanjukta Dey told the bench that she had visited shops in Crawford Market and Kurla as recently as three days ago and found violations of the earlier high court order, which had directed immediate closure of such illegal shops. The shops require permission from the State Animal Welfare Board and they had seen puppies being drugged and animals kept out in the sun or out in the rain with no food or water. Due to the continued lack of regulation, illegal pet shops have mushroomed all over the city. It is alleged that such establishments are keeping animals domesticated as well as wildlife from India and abroad in “utterly unhygienic conditions” and the life and liberty of thousands of animals are at stake as they languish and die in miserable conditions in unlicensed and unregulated pet shops. They are also often taken away from mothers a a young age.
May 23 (PTI) The Delhi High Court on Monday sought the Delhi government’s stand on a public interest litigation seeking directions on dealing with unregulated, unlicensed and illegal pet shops operating in the city.
“The non-implementation of the Prevention of Cruelty to Animals (Pet Shop) Rules, 2018 is a complete dereliction of duty by the respondents (authorities), and by doing so, the respondents’ actions are affecting animal welfare negatively and preventing the compliance of the Prevention of Cruelty to Animals Act, 1960 and the Wildlife (Protection) Act, 1972,” the petition filed through lawyers Supriya Juneja and Aditya Singla said.
Many pet shops and breeders operating in Mumbai are not licensed and the state urges pet owners to bring home pets only from licensed breeders.
Govt. Plans to Cut Cooking Oil Tax
The Indian market after seeing an unprecedented rise in the prices of edible oils plans to cut taxes on edible oil to keep the prices in check.
Khushi shah – Mumbai Uncensored, 5th May 2022
The war, combined with weather disruptions that limited harvests in other vegetable oil-producing regions, led to a supply shortage of sunflower oil. The ban by the world’s biggest palm oil producer and exporter on 28th April 2022, on the export on the widely used edible oil and all the conflicts between Russia and Ukraine that already upended the global agricultural trade in the world, sent oil prices skyrocketing in the market.
India is particularly sensitive to rising vegetable oil prices as it is dependent on imports for 60% of its needs. Inorder to keep the prices in check ,India, the world’s top importer of vegetable oils is planning to cut taxes on some edible oils to cool the domestic market after the war in Ukraine.
India has tried to reduce prices in the past, including reducing import duties on palm, soybean oil and sunflower oil, and limiting inventory to prevent stocking the oil.[ In September 2021] The import taxes on palm oil had been slashed to 2.5% from 10 %, while soy oil and sunflower oil had been reduced to 2.5 per cent from 7.5 per cent.
The reduction in these taxes were aimed at bringing down prices of the edible oils in India and boost consumption, effectively increasing overseas buying by the south Asian country.It would also bring down edible oil prices ahead of key festivals, when edible oil demand rises in the country
However, The moves so far have not been effective enough to cut down the rates of oil in the market
India, the world’s top importer of vegetable oils, wants to reduce the agricultural infrastructure and development cess on imports of crude palm oil to below 5% . According to reports, it is said that the government is now considering reducing import duties on crude varieties of canola oil, olive oil, rice bran oil and palm kernel oil from 35% to 5% to help boost domestic supplies. The new tax amount is still being deliberated The cess is levied over and above basic tax rates on certain items, and is used to finance agriculture infrastructure projects. The base import duty on crude palm oil has already been scrapped.
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