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Development Watch – Week #3 November ’23

Development News

India’s rural labour market undergoing structural transformation

According to a report by SBI research, India’s labour market is undergoing a deep structural transformation with self-entrepreneurship across all echelons. Higher education is emerging as a key enabler. The recently released 6th annual PLFS report from the NSSO gauging unemployment rates across rural and urban areas for pan-India, as also states with different levels revealed a significant decline in the unemployment rate from 6.1% in FY18 to 3.2% in FY’23. There has been an accompanying increase in Labour Force Participation Rate from 36.9% to 42.4%. The Female Labour Force Participation Rate has by far outperformed the overall gains.

India on track to meet annual green energy bid 50 GW target

India is on track to achieve its annual target for renewable energy capacity auction of 50 GW. The target has been set for 5 years to March 2028, according to Ministry of New and Renewable Energy. In April 2023, the Government had announced the plan to invite bids for 50 GW renewable energy capacity annually for 5 years. This includes wind power capacity of at least 10 GW per year. In 2023, bids for around 27 GW of renewable energy capacity have already been floated till October. The balance will be called by March 2024. Regarding the availability of modules and cells, the Ministry expressed confidence that sufficient domestic capacities will be added in due course. This would cater to the demand for renewable energy project developers. Around 60-80 GW integrated capacity from polysilicon to solar modules and wafer to solar modules is likely to be available in the country by 2026-27.

Incentive for local manufacturing of EVs extended

The central government has said that any incentive extended to facilitate local manufacturing of electric vehicles will be equal for foreign as well as domestic investors. This comes amid concerns raised by automakers in India over possible concessions in import duty to Tesla, the American carmaker. According to senior government officials, Tesla has sought provisional tariff concessions as a prerequisite for setting up a manufacturing facility in India. However, the government is not in favour of any company-specific exemptions. India has very strong domestic companies in this sector and any incentive would be equal for domestic and foreign investors. The government is also in the process of drawing up a policy to incentivize local manufacturing of electric cars.

Senior living projects on the rise

The share of senior citizens in India’s total population is expected to double to 20% by the year 2050. This is expected to result in an increased age-dependency ratio (dependents:working-age population) which may reach 34% by 2050. India’s current population of senior citizens is over 10 Crores, and senior living market penetration in the country is less than 1%, compared to 6% in mature markets like USA. The senior living segment of real estate holds immense potential for investment and development. Factors driving the need for senior living include rise of nuclear families, increased mobility for career opportunities, growing demand for medical services, and changing views towards asset classes. India’s southern cities have 68% share of senior living market, mainly due to superior healthcare infrastructure, strong connectivity, favourable climatic conditions, etc.

500 Vande Bharat trains planned for 2024

Indian Railways is planning to roll out nearly 500 Vande Bharat trains next year. The railways is also taking steps to enhance passenger safety by introducing anti-injury fittings in coaches. It plans to replace ICF-design coaches with German-designed Linke Hoffman Busch (LHB) coaches, featuring that don’t climb on each other in the event of an accident. Integral Coach Factory (ICF), Chennai, is targeting 500-550 VB trains next year. For this year, it plans to manufacture a total of 75 trains, of which 63 are 8-car versions and 12 are 16-car versions. The railways is also working hard to reduce possibilities of injuries in the rail accidents. Anti-injury fittings will be introduced in all coaches to prevent damages caused by sharp edges. This would also provide protection within coaches during unforeseen incidents or sudden braking.

‘Airport Village’ being set up in Mangaluru

The Mangaluru International Airport has undertaken an innovative initiative known as ‘airport village’ project in its front yard. This is aimed at offering a comprehensive range of food and beverage options. It would also include retail and gaming opportunities for both passengers and visitors. This forward thinking project marks a departure from convention of restricting such facilities to passengers, and those with terminal access. The airport village will be open to experience to all those who frequent the airport, including city dwellers.

Investment of $553 million by US in Sri Lanka port

The US will provide $553 million in financing for a port terminal in Sri Lanka’s capital. It is being developed by Indian billionaire Gautam Adani. This is seen as a move to curtail the influence of China in South Asia. The financing from International Development Finance Corp. for the deepwater West Container Terminal in Colombo is the US Government agency‘s latest infrastructure investment in Asia. Its regional economic integration, including with India, is a key partner to both countries. The funding is part of a global acceleration of DFC investments that totaled $9.3 billion in 2023. China has invested $2.2 billion in Sri Lanka, as of 2022. this is seen as China’s debt-trap diplomacy.

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