- #RBI cracks down on #Paytm Payments Bank after audit reveals consistent non-compliance
- #GST collections in January continue to be robust
All this and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive
Guest List:
Santosh Rao, Partner - Head of Research, Manhattan Venture Partners
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- #GST collections in January continue to be robust
All this and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive
Guest List:
Santosh Rao, Partner - Head of Research, Manhattan Venture Partners
______________________________________________________
For more videos subscribe to our channel: https://www.youtube.com/@NDTVProfitIndia
Visit NDTV Profit for more news: https://www.ndtvprofit.com/
Don't enter the stock market unaware. Read all Research Reports here: https://www.ndtvprofit.com/research-reports
Follow NDTV Profit here
Twitter: https://twitter.com/NDTVProfitIndia , https://twitter.com/NDTVProfit
LinkedIn: https://www.linkedin.com/company/ndtvprofit
Instagram: https://www.instagram.com/ndtvprofit/
#ndtvprofit #stockmarket #news #ndtv #business #finance #mutualfunds #sharemarket
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TVTranscript
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01:52 >> It is a matter of truth that the 1st February 24 budget that will be
01:57 announced will just be a vote on account.
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02:05 By 2047, India should reach a $30 trillion economy size.
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02:16 >> For the growing population, growing youth, young who need more skills,
02:21 who need to upgrade their skills.
02:23 You need the newer areas also to get priority.
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02:46 >> Good morning and welcome.
02:47 This is NDTV Prophet.
02:48 My name is Alex Matthew and you're watching All You Need To Know.
02:51 Today is the 1st of February and you know what that means, it's budget day.
02:55 It's when the government lays down the roadmap for the year ahead.
02:59 There are implications for companies, for the markets, and
03:02 most importantly for you, the investor and taxpayer.
03:05 Stay with NDTV Prophet for the sharpest coverage of union budget.
03:10 But first, let's start with the headlines this morning.
03:13 The Fed keeps policy rates unchanged for a fourth time in a row,
03:16 rules out rate cuts in March.
03:18 Markets hope of a rate cut shift to June.
03:23 US equities fall and the bond yields fall below 4%.
03:28 The RBI cracks down on PTM once again, imposes stringent curbs,
03:33 stops just short of canceling its payment bank license.
03:36 As India prepares for the next 25 years, SJ Shankar says it will compete and
03:43 take an independent stance on the world stage.
03:46 That's based on an exclusive interview.
03:50 GST collections in January continue to be robust.
03:53 The government records the second highest monthly collections at 1.72
03:58 lakh crore rupees.
04:00 Now before we start setting you up for the budget,
04:04 let's take a look at the big news overnight.
04:06 And the US Federal Reserve kept its policy rate unchanged for
04:10 a fourth time in a row, and also signaled cuts this year.
04:14 But it indicated that it is not in a rush to cut rates.
04:18 The FOMC unanimously decided to hold the key interest rate at 5.25 to 5.5%,
04:26 citing slower economic activity, and also easing but elevated inflation.
04:32 That's according to a statement that was issued yesterday.
04:35 It also removed any reference to future rate hikes.
04:39 Here's some of what Fed Chair Powell had to say.
04:42 >> It's not that we don't have any confidence.
04:46 We have growing confidence, but not to the point where we feel like
04:52 it's a highly consequential decision to start the process of dialing back on
04:57 restriction, and we wanna get that right.
04:59 And we feel like the strong economy, strong labor market,
05:01 inflation coming down, it gives us the ability to do that.
05:03 We think that's the best way we can serve the public,
05:06 because ultimately we've made a lot of progress on inflation.
05:11 We just wanna make sure that we do get the job done in a sustainable way.
05:14 That's how we're thinking about it.
05:16 >> All right, and also overnight you saw the US bond yields across
05:21 the yield curve come off.
05:23 Of course, that was not related to what the Fed Chair said.
05:27 You had earlier on in the session a regional bank in the US
05:31 that posted surprisingly weak set of numbers.
05:35 It posted a loss.
05:37 And that led to some expectations on Wall Street that the banking sector
05:41 as a whole is heading for troubled waters.
05:44 That resulted in a flight to safety, to safe havens, and
05:47 you saw yields come off very sharply.
05:50 You saw the 10-year yield fall below 4%.
05:53 Of course, when Fed Chair Jerome Powell started to speak and
05:56 pushed back on those rate cut expectations,
05:59 you saw bond yields rise a bit across the board, but not by very much.
06:03 In the Asia Pacific region this morning as well,
06:07 you've had a bit of a muted start to trade.
06:10 Of course, the Hang Seng is trading flat at this juncture.
06:13 The early rises were two of them, in fact, were trading lower.
06:17 That continues to be the case, the Nikkei 225 down about eight-tenths of a percent,
06:21 and the Chinese markets have opened lower by about 1% or thereabouts.
06:26 Let's shift attention to the Indian equity markets.
06:28 Of course, apart from the fact that you had the presentation of the union budget,
06:32 it is also the weekly expiry for options to take into account.
06:36 That's also something that we have to take into account, and
06:39 Agam is here to tell you about the latest cues from that space.
06:43 Agam, chop and churn, we've seen all through the last week, week and a half.
06:47 How do we look at today's session?
06:49 >> Well, we did see advances yesterday, Alex, and that perhaps is a positive.
06:55 Because things have changed a little bit, at least in the underlying.
06:59 So the Nifty did advance by around 1%.
07:01 Sure, we didn't see any change in open interest, but the Bank Nifty too,
07:05 which advanced by around 1.5% nearly, which also saw unwinding coming through.
07:10 So at the moment, over the past couple of days, what we've seen is a lot of traders,
07:14 well, square off their positions as we moved into the interim budget.
07:18 Do remember that until before the FM speech,
07:22 you will have the most amount of traction in terms of expansion in option premiums.
07:29 And once you start seeing the speech,
07:31 perhaps you start seeing a little bit of more contraction coming through.
07:34 Speaking of option premiums, yesterday was a day where the Nifty advanced, and
07:39 because of that, we saw a little bit more of writing around the put side.
07:45 But it was also a choppy day of trade, which is why we really can't make out
07:51 in terms of additional subtraction in options.
07:55 But we're still working with a 500 point range, and
07:58 on the higher end, 22,000 is what we're keeping an eye on.
08:02 Moving on, as far as stocks go, in today's day of trade,
08:05 we'll be watching out for something like a Pidilite and Cormandel.
08:09 Pardon me, Pidilite and Cholamandalam, which saw shorts.
08:12 And Longsbuilding and DRL, Maxfin, and of course, several other companies.
08:18 And in terms of stocks, we saw short covering.
08:21 We saw Exide, Federal Bank, M&M Financial, PNB, and E-Smart Finance Bank.
08:25 Overall, Alex, we're keeping an eye on the benchmarks, of course, and
08:29 the Nifty, perhaps.
08:30 It will be a choppy day, and it could, in fact,
08:34 lead to increased volatility considering it is also the weekly options expiring.
08:38 Certainly, and in fact, the Nifty Bank gained over a percent in trade yesterday.
08:42 Agam, a couple of financial names are going to be watched very closely today.
08:46 Of course, HDFC Bank saw a little bit of breather in selling, and
08:50 it gained in trade yesterday.
08:52 It gained over a percent and lent quite a bit of support.
08:54 But in today's trade, you're going to watch out for
08:57 Paytm because there was a major announcement by the central bank yesterday.
09:03 It's announced further restrictions against Paytm Payments Bank because
09:09 there are updates that they have found from an audit report that have
09:15 pointed to persistent non-compliance and continued material supervisory concerns.
09:20 That's from the statement that was issued yesterday.
09:22 But to tell you what it means, and also to tell you what it means if you're
09:26 a customer, Vishwanath Nair is joining in to give you some perspective.
09:30 Vishy, what can you tell us this morning?
09:32 Good morning, Alex.
09:33 So what the RBI essentially did was block any further deposits or
09:38 credit into Paytm Payments Bank accounts from the 29th of February.
09:44 So remember that customers still have time till the end of this month to make
09:49 any kind of transactions that they want to do on their Paytm Payments Bank account.
09:52 Which are the accounts that are covered in this?
09:54 Well, any of the Paytm Payments Bank accounts.
09:57 If you have a wallet account, if you have any kind of a Fastag account with
10:01 Paytm Payments Bank, then all of those accounts are affected by these new
10:05 strictures that the RBI has brought in.
10:08 As you mentioned during your introduction that there were persistent
10:12 non-compliance issues as well as major supervisory concerns that the RBI found
10:15 with Paytm Payments Bank.
10:17 This dates back to March 2022 when the RBI had stopped Paytm Payments Bank
10:21 from onboarding new customers.
10:23 So over the last two odd years, Paytm Payments Bank has not been bringing up
10:28 customers on to its business, but the RBI has also found material issues which
10:34 continue on the Paytm Payments Bank system.
10:37 This is after they conducted an audit.
10:39 What should customers do?
10:40 Well, they have time till the 29th of February to make further deposits into
10:45 their Payments Bank account with Paytm.
10:49 However, after 29th of February, they will not be able to make further deposits
10:53 into those accounts.
10:54 If you have an existing balance in those accounts, then you can continue to use
10:57 them, you can continue to withdraw that money.
10:59 Those things have been allowed, but other than that, all other banking services
11:03 have been stopped by the RBI from the 29th of February.
11:06 That is till the end of this month.
11:08 All right.
11:08 Thanks so much, Vishy, for bringing us those details.
11:11 Certainly, one to watch out for in trade today.
11:13 It has, of course, sent out a clarification saying that it's working towards what the
11:19 RBI has pointed out as concerns, but we'll see how the stocks reacts in trade today.
11:24 We have to step into a very quick break, but on the other side, we'll bring you a
11:28 ground report on what to expect from Budget 2024.
11:32 Do stay tuned.
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13:21 Welcome back.
13:23 You're watching the coverage ahead of Budget 2024.
13:27 And as we told you, we have a ground report set up for you.
13:32 Janani, in fact, is reporting live from North Block, where the budget is set to be presented in just a few hours.
13:39 Janani, if you can hear me, what are you picking up?
13:44 Hello, can't hear.
13:46 OK, so let's try and get Janani back with us in just a bit.
13:52 In the meanwhile, let's turn to a few of the big voices that spoke to your channel ahead of the presentation of the budget.
13:59 And of course, there are several expectations to take into account.
14:03 Listen in to a few of those big voices.
14:06 I continue to think, of course, that there's going to be a lot more of what they've already done to carry that forward.
14:14 So I expect, number one, continued investment in defense indigenization, in railways indigenization.
14:22 So we are going to get a lot more, either the PSUs or the private plans, getting a lot more business from the railways in order to improve the mix,
14:32 which was largely currently buying stuff and then getting services also from companies abroad,
14:39 which is now changed to buying some stuff from companies abroad, but doing the majority of the work in India.
14:46 So I think a lot more projects are on the way.
14:49 And plus, you've got a lot of stuff that's still not finished.
14:52 Right. You've got a dedicated freight corridor.
14:55 The DFC still continues to be in progress.
14:58 So I think that has to be continued and needs budgetary allocation as well.
15:05 Apart from that, you've got the defense programs, a lot more of the ships that have been ordered,
15:12 and then their movement towards more indigenization of technology on some of the air equipment as well.
15:21 I think all of this will continue.
15:23 This is like business as usual, but in the sense of this was a process that started about three or four years ago and that will continue.
15:31 That's quite clear from how the market has been bidding up the railway stocks, the defense related stocks.
15:39 Infrastructure has done quite well.
15:42 Banking has lagged because of reduced margins to some extent.
15:48 But I think banking and the entire financial pack will also be a participant in that.
15:54 And then auto, as the rural economy picks up steam again this year, two wheelers, tractors should see an uptick unless you get another bad monsoon,
16:08 in which case the government's hands will be full in terms of stimulating rural demand.
16:15 So those are very clear in the market and a lot of expectation is there.
16:21 In fact, there could be a bit of a sell off if the allocations are lower in railways or defense vis-a-vis what is expected,
16:32 or the overall capex number will be watched.
16:35 Last year was a big plus and I don't expect that kind of a growth, but we could still have growth and not a cut this year.
16:48 So let's wait and watch.
16:50 I think within those, what we were talking, we have to look at capital, which is the financials.
16:58 We have to look at capex, which is all these sectors, the infrastructure providers, construction companies,
17:05 who are putting up roads, bridges, ports, companies, transport, logistics, as well as defense and railways, modernization, indigenization play.
17:17 I think that's a multi-year play that's going on.
17:21 And finally, consumer. The consumer has suffered because demand, both at the lower end of the pyramid in urban sphere,
17:30 as well as the rural demand, has not kept pace.
17:34 So we have a problem with aggregate demand, but in a year where we are expecting rate cuts,
17:41 with the macro continuing at about an 11 to 12 percent in nominal terms,
17:47 we are expecting that there will be money going into these sectors.
17:52 There will be some redistribution as well as generating surpluses, and that will help.
17:59 All right. Now, from an economic standpoint, we also spoke with HSBC's chief India economist, Pranjal Bhandari,
18:06 about how state capex has been a standout highlight in FY24 and how she expects a fiscal drag in FY25. Listen in.
18:16 Actually, the real story of FY24 wasn't central government doing capex.
18:21 The real story was state governments doing capex. And a lot of people missed that out.
18:26 You know, state governments, which were literally not spending, you know, in the pandemic and the one or two years after pandemic,
18:32 suddenly started spending in FY24 and capex spend rose 45 percent year on year.
18:39 Very strong numbers. And I think that has been a huge source of growth, particularly construction jobs,
18:46 particularly rural demand over the last 12 months.
18:50 So we should always think of capex as center plus state combined.
18:54 And if you combine the two, my sense is we are at our best in terms of growth rate right now.
18:59 Next year, the growth may not be as high, but in terms of percent of GDP, the thrust will be maintained.
19:06 I wanted to make this important point that, you know, there's something called fiscal impulse that economists talk about.
19:11 That's the impact of fiscal policy on growth. Since FY19, the fiscal impulse has been positive for India.
19:18 The government has been contributing to GDP growth. FY25 will probably be the first year in which there's going to be a fiscal drag.
19:26 The government will not be contributing to GDP growth.
19:29 And that is because it's wanting to bring down its fiscal deficit.
19:33 And, you know, when you bring down your fiscal deficit, you cut spending and then you don't positively impact GDP growth.
19:40 So my sense is FY25 will be the first year in many years in which the fiscal policy will take a step back.
19:47 But I also think it is the right stage for the monetary policy to take a step forward and lose in monetary conditions.
19:54 I see this not only because fiscal will be taking a step back. I also see this because inflation is really coming off.
20:02 All right. Now, one particular sector that has seen tremendous growth over the last year is the real estate pack.
20:09 And there is a lot of interest in the residential space.
20:13 We spoke with Irfan Razak of the Prestige Group, and he talked about the potential of giving developers the incentive to make smaller homes
20:22 in order to make housing more affordable. Listen in.
20:25 The important thing is if we can give some incentive to developers to make smaller homes,
20:32 like in the past we had something called 80 IB exemption in the income tax that encouraged developers to make smaller homes and get tax rebates.
20:41 Similarly, there's one demand, but of course, it's nothing to do with this budget. It's on GST.
20:47 And now, see, there used to be an input credit on GST, which the developers used to get, and the end product used to be taxed.
20:55 I believe that the end product today is being taxed at 5%.
20:59 If that input credit can be restored, it will definitely reduce the cost of the home,
21:05 and eventually the offering will be much lesser to the consumer.
21:12 And of course, they can do a balance, do it only for X amount of size of house,
21:17 and that really will help things, and that will sort of spur up the entire construction for smaller homes.
21:24 And that's where the actual need is. And I believe if that is addressed, it will be a big thing for the housing industry
21:31 and for the home buyers and for the people who really aspire to have a home.
21:35 And it will definitely fructify the dream of Housing for All, which is our dear Prime Minister's vision and mission.
21:47 And I think that should get done.
21:49 We also spoke with representatives of the Confederation of Indian Industry, and that, of course, ahead of the budget.
21:57 Sanjeev Puri, the President-designate of the CII, said that the body supports the need for subsidy welfare measures.
22:06 He spoke with my colleague, Tamanna Inamdar. Listen in.
22:11 Better targeting will bring in efficiencies, and better instruments of targeting also will bring in efficiencies.
22:20 I think the government has very, very wisely used the digital infrastructure to actually do direct benefit transfer, for example.
22:28 So it's more about sharper targeting and better instruments to provide that support to those who need it.
22:35 And we completely, you know, CII completely supports the fact that these welfare measures need to happen
22:41 and need to be strengthened as we go along.
22:44 But the idea is really to target it more sharply and move more towards direct benefit transfer.
22:52 I believe the PLI scheme has been very successful for three, four reasons.
22:56 I think people are, first of all, India has obviously become this an issue of most companies to look at.
23:03 One, for its domestic market. And secondly, with the focus on the infrastructure and the cost of doing business, its own competitiveness.
23:10 Therefore, in that background, I think the PLI scheme is like adding, I would call it the most,
23:17 the sweetener for people to come in and start investing in India. In that background, this has been successful.
23:25 The second issue is that what do we see as action at the ground?
23:30 And if you look at it, I think there have been, I mean, these are all, I would call it big decisions for people to make,
23:36 especially considering that they have been integrated into very many global value chains across the world.
23:41 And therefore, I think it's very difficult to take a decision or take a view from a one or two year period.
23:48 So our view is that at least it should actually be extended.
23:52 And there is a greater opportunity to attract even more investments to come in, not just from overseas companies,
23:59 but also Indian companies who wish to participate and become part of this global value chains.
24:04 Therefore, in my view, the scheme is being quite successful.
24:09 It needs to be further continued and this will create a large opportunity for both global and Indian companies to invest in India
24:18 and become part of global value chains.
24:21 All right. We promised you this earlier on in the show, a ground report from North Block and Janani is in fact joining us.
24:28 Janani, what's the word on the street on, you know, on North Block?
24:33 What could we expect today?
24:35 Well, anticipation and expectations are quite high despite it being an interim budget.
24:44 But the word on the street is as simple as this, that firstly on the subsidies front,
24:49 the food subsidy could be looking at an increase considering the NFSA Act led initiative.
24:56 The PMGKY scheme has been extended for five years as announced by the prime minister.
25:00 So that's a certainty on that front that it could see an increased allotment.
25:03 There's also word that petroleum subsidy would be increased considering that the government has increased 200 rupees per cylinder
25:10 for Ujjwala beneficiaries and however, fertilizer subsidy might see a bit of a cut considering that global prices are simmering down
25:18 and it might be a better year. If not a cut, it will be similar to FY24 estimates in FY25.
25:25 But the next up is also the tax related incentives, something that we've all been looking at.
25:30 Now, will the government do something to make the new tax regime sweeter?
25:34 Currently, individuals who have an income level of up to 7.5 lakhs have a standard deduction option
25:40 and up to a 7.5 lakh limit, they don't pay taxes.
25:43 Whether the government will make this sweeter, perhaps increase the standard deduction is something we'll be watching out for.
25:50 Another one, of course, is the concessional tax regime for manufacturing units, for corporates who are setting up camp.
25:56 Now, this was on the back of the COVID-19 pandemic, a scheme that came about.
26:00 Whether this will in fact be extended, considering that its sunset is now in 2024 March, is something we'll also be looking at.
26:08 And lastly, of course, some of the schemes that have already been agreed upon, say the PM Surya Udhya Ujjwala.
26:14 If you remember, this is the one where the Prime Minister had promised 10 million household rooftop solar projects.
26:22 And this, of course, will require an outlay.
26:25 This is one of the things that we're getting. And last but not the least, the FAME scheme.
26:30 So there might be also an increased outlay for EV vehicles is what we're getting to hear.
26:35 Back to you, Alex.
26:36 Fantastic. Thanks so much, Janani, for breaking that down for us and setting this up.
26:40 In fact, there's a lot more to talk about before the finance minister takes the stage.
26:45 And you'll find all of that right here on NDTV Profits. So do stay tuned.
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