Development Watch – Week #5 August ’23
Development News
ONGC to invest for meeting net-zero emissions goal
The Oil and Natural Gas Corporation (ONGC) will need to invest Rs. 2 Lakh Crores to reach its net zero emissions target by 2038. Half of the required Rs. 2 lakh crores investment will be made by 2030. Funding these projects wont be difficult as the company has low debts. ONGC can also access green bonds where cost of borrowing is much lower then others. The company plans to invest in a range of green projects, including green ammonia, hydrogen, solar and offshore wind. ONGC is yet to receive $130 million of dividends from its Russian projects. Though most of these dividends would be used in ONGC’s project expenditure in Russia itself.
EV Infrastructure under priority sector lending
EV infrastructure would be included under priority sector lending. The government is looking at the prospect as a move to boost for the sector. In India, EV sales crossed 700,000 in the first half of 2023. The government has received a representation to include EV infra in the priority sector. They are considering to rework the priority sector lending (PSL) requirements for banks. The issue would also be discussed with RBI. The power ministry has written to the Department of Financial Services in this regard.
Rising demand for EVs from E-commerce companies
Demand for electric vehicles (EVs) has doubled among e-commerce companies and consumer goods makers. They also seek to reduce costs and meet carbon emission reduction targets. Companies like Amazon, Hindustan Unilever, and Coca Cola are switching to EVs for deliveries. The list of such companies also includes Zomato, Amul, Flipkart BigBasket and Bisleri. The operating costs of EVs are much lower than diesel or CNG vehicles. This has led to a substantial savings for operators. Over 100,00 electric cars and 1,000,000 (1 million) electric two-wheelers are expected to be sold in India this year.
Rise in Housing Prices in Cities in Q1 of FY24
Housing prices rose in 43 cities in the first quarter of 2023-04. The rates of residential units also fell in 7 cities, according to National Housing Bank (NHB). The NHB is the regulator for housing finance companies and has published a Housing Price Index. The 50-city HPI is based on prices of properties collected from banks and housing finance companies. The HPI @ Assessment Prices report has recorded an annual increase (YoY) of 4.8 per cent during first quarter of FY24. A year ago, this was 7% per cent.
The NHB has said that home loan rates are still lower than the pre-pandemic rates, which is leading to a healthy affordability overall. Key primary residential markets in 8 cities witnessed appreciation, highest being 9.1% in Ahmedabad. Bengaluru saw 8.9% increase while Kolkata saw a rise of 7.8% during April-June 2023 period. Delhi saw only 0.8% rise, while Gurgaon saw 20.1% increment. On the other hand, Ludhiana saw a decline of 19%. Of the 50 cities recorded, 36of them saw price rise, while others saw a decline.
First woman CEO of the Railway Board
The government has appointed Jaya Verma Sinha as the CEO and Chairpoerson of the Railway Board, the first woman to do so. Railway Board is the apex decision-making body for the national railways. The Appointments Committee of the Cabinet (ACC) has approved the appointment of Jaya Sinha, Indian Railways Management Services (IRMS), Member (Operations & Business Development), Railway Board, to the post of Chairman and CEO. Ms. Sinha was at the centre of media interactions. She also explained the complex signalling system after the tragic Balasore accident in Odisha which killed nearly 300 people. Ms. Sinha will assume charge on September 1 with a year-long tenure until August 31, 2024.
20 national waterways being developed in the north east
Union Ministry of Ports, Shipping and Waterways has quoted that 20 national waterways are being developed in the north east. The projects cost more than Rs. 800 Crores being implemented for development of these national waterways in the region. The Ministry’s MoU is aimed at powering PM Gati Shakti National Master Plan to boost India’s Act East Policy. NRL will export around 10,000 MT of petroleum and petrochemical products per month from IWAI Jogighopa multi-modal terminal. NRL will set up POL Oil Terminal at Jogighopa Logistics Park with rail connectivity. The MoU would also fulfill the “Hydrocarbon Vision 2030 for Northeast” by enabling inland waterways transportation via NW2 and IBPR. This would also unveil a new chapter of EXIM trade for the NE region.