Development Watch – Week #2 November ’23

Development News

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Farm labour adhere to NREGS due to erratic rains

The demand for work under the government’s flagship rural job scheme grew at a fast pace in the monsoon season this fiscal year. It was subdued in the key summer months when such demand typically stays elevated. Erratic seasonal rains in 2023 have prevented the typical large scale migration of rural workers into farming. This has forced them to hold onto work under MGNREG Scheme. India witnessed “below normal” monsoon in 2023, which is the first in 4 years, as overall rainfall touched 94% of a benchmark long period average. The slow depth of industrial recovery also kept a large section of workforce dependent on other sectors.

Air India to induct new aircrafts and run new flights

Air India has announced its plans to induct over 30 new planes and operate routes to four new international destinations over next 6 months. The Tata-owned airlines expects to expand routes to North America, Europe and SE Asia. It will also add 400 weekly flights to its domestic and international route network until March 2024. This would be part of the winter schedule, effective from October 29 to March 30, 2024.

Railway earns freight revenue of Rs. 96,000 Crores

Indian Railways has hauled 887.25 metric tonnes of freight between April and October, which is an increase of over 31 MT over the same period last year. There has been an improvement in revenues of Rs. 3,585 Crores over the same period last year. During the month of October, an originating frieght loading of 129.03 MT has been achieved against 118.95 MT in October last year, which is an improvement of 8.5%

Strong economy a factor to lure Indian tourists

Countries like Thailand, Saudi Arabia, Australia, Turkey, Vietnam and Sri Lanka are among countries banking on Indian travellers, and looking to ease their entry. If India follows China’s outbound travel trajectory, then Indian tourists could make 80 to 90 million trips by 2040. Thailand announced this week that Indian travellers would not require a visa between November 10 and May 10. Saudi Arabia, which is promoting itself as a global tourism destination, had 1 million visitors from India this year, up to September and is aiming for 2.4 million in 2024 from the country. IPL sponsorship is also being used to increase awareness and boost Indian visitors. In Australia, total Indian tourist spends of Indian Tourists amounts to Rs. 12,000 Crores. A study by McKinsey has shown that globetrotters from India are set to grow in number. The report is titled “From India to the World: Unleashing the potential of India’s tourists”.

Construction Equipment sales rise by 31% in Q2-FY24

India’s construction equipment industry has seen a 31% rise in sale to 30,078 units in the 2nd quarter of the current FY. As per data released by Indian Construction Equipment Manufacturers Association (ICEMA), the construction equipment industry had sold 22,941 units in Q2 of FY 2022-23. Of the 30,000 units, domestic sales accounted for 27,400 units while 2,600 units were exported. The growth in sales during 2nd quarter of current fiscal comes on back of positive growth in all 5 of construction industry’s major equipment segments like earth movers, road construction eqpmt, material handling and processing, and concrete equipment. Earth moving equipment has 70% share in total sales. Sales growth is a result of increased momentum implementation of infrastructure projects.

Electric planes to become a reality

Early on, electric aircrafts are expected to compete mainly with helicopters and cars and trucks. For most of aviation history, electric aircraft have been little more than a fantasy. But technological advancements particularly in batteries, and billions of dollars of investments have helped make short distance electric air travel feasible. It is hoped that it would be commercially viable too. US-based Electric airplane maker Beta has raised more than $800 million from investors such as Fidelity, Amazon’s Climate Pledge Fund, and PE firm TPG Capital. The company employs 600 people and built a factory in Burlington where it plans to mass produce aircraft. They are yet to be certified by Federal Aviation Administration. Their model CX300 would be a sleek, futuristic plane with 50 ft wingspan, large curved windows and a rear propeller. In California, Joby Aviation and Archer Aviation are developing battery-powered aircraft capable of vertical flight. They are backed by Toyota, Stellantis, United Airlines, Delta Airlines, etc. Established manufacturers like Airbus, Boeing and Embraer are also working on electric aircraft.

Local taxes in India to avoid EU carbon levy

The European Union is planning to impose a carbon-levy from 2026 on high-carbon goods such as steel and iron ore. This was approved in April 2023 and has drawn concerns from India. India is looking at potentially taxing high-carbon goods locally, and then using proceeds to support green energy transition. This would help India avoid the European Union’s carbon tax on imports. According to Trade Minister Mr. Piyush Goyal, there would be no additional levy if the exporting nation taxes carbon locally. A solution is being worked around a domestic tax to take care of equating with European taxes on carbon emissions. If we collect the tax in India itself and use it for green energy transition, there will be no additional Carbon Border Adjustment Mechanism (CBAM) tax. This would indirectly help export companies as they transition to cleaner energy and bring down costs.

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