News Paper Editorials: from All Papers for Feb 07, 2024

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All Newspaper editorials in one place – February 07, 2024

 

 

THE HINDU

February 7, 2024

A travesty

Manipulation of Chandigarh mayor poll has grave implications for democracy

 

The Supreme Court of India’s stinging remarks on the manner in which the Mayor of Chandigarh was elected has confirmed suspicion that the victory of Manoj Sonkar, the Bharatiya Janata Party (BJP) candidate was obtained through manipulation. After viewing footage of the videographed electoral process, the Chief Justice of India found it appalling that the presiding officer himself appeared to be defacing the ballots, and termed it a “mockery of democracy”. Many had noted as soon as the election was called in favour of the BJP that it was a travesty that took place on January 30, as eight votes cast by elected councillors were declared invalid. The election held on January 30 itself was based on a direction from the Punjab and Haryana High Court. Earlier, it was due to be held on January 18, but it was deferred to February 6 at the last minute as it was disclosed that Anil Masih, a nominated councillor and a BJP minority wing functionary, fell ill. However, thanks to the court’s intervention, it was advanced to January 30. The Congress and the Aam Aadmi Party (AAP) allege that the election was put off only because two parties, which were contesting jointly, were set to win. AAP has 13 members and the Congress seven in the Corporation, but the AAP candidate Kuldeep Kumar polled only 12 votes, with eight votes being declared invalid. Mr. Sonkar, with 16 votes, was declared the winner.

 

The Mayor is chosen by the 35 elected Councillors and the Member of Parliament for Chandigarh. A simple method for a comparatively small elected body choosing its mayor is by a show of hands or the members rising in support of the respective candidates. That they had to record their preferences through voting slips indicates that there was suspicion of possible cross-voting. What made the process dubious was that Mr. Masih, who presided over the election, was accused of not showing the ‘invalid’ ballot papers to the candidates. As a result, no one knew why exactly these votes, presumably those that ought to have gone to the AAP candidate, were declared invalid. The apex court has done the right thing in ordering the ballots and the records be handed over to the High Court’s Registrar-General and the proposed Corporation meeting postponed until further orders. The development may concern only one municipal corporation in the country, but the idea that an election can be so brazenly rigged has grave implications for democracy. A political party seeking to be re-elected for a third consecutive term at the national level cannot be seen as manipulating any election in this manner. Only a verdict invalidating the election and ordering a fresh one, with safeguards against manipulation, will be in the interest of justice.

 

 

 

 

THE HINDU

February 7, 2024

Mint Street musings

The interim Budget gives the central bank some more room to manoeuvre

 

The latest bi-monthly meeting of the Reserve Bank of India’s Monetary Policy Committee (MPC), whose outcomes will be revealed by RBI Governor Shaktikanta Das on Thursday, is widely expected to result in a status quo on interest rates yet again. At its last review in early December, five of the six MPC members had voted to persist with the ‘withdrawal of accommodation’ stance and the panel had raised its GDP growth forecast for the year to 7% from 6.5%. Hopes of a stance shift to ‘neutral’ are slim, but it would be instructive to see if the growth estimate is revisited in light of the National Statistical Office projection of a 7.3% uptick in 2023-24. The US Federal Reserve held interest rates for the fourth straight review last week, and chairman Jerome Powell was vague about the proximity of much-anticipated rate cuts this year, seeking more data to establish that inflation had been reined in sustainably. India’s policymakers may not take a direct cue from the US Fed, but the concerns are similar as Governor Das had articulated in December. The 4% inflation target remains elusive for now — December’s inflation rate hit a four-month high of 5.7%. The RBI expects inflation to average 5.2% in this quarter, which it only expects it to cool to 4% in the July-September phase, providing a window for a rate cut consideration if the monsoon is normal.

 

Finance Minister Nirmala Sitharaman’s interim Budget for 2024-25, however, could give the central bank some more room to ease liquidity constraints in the economy. While the government did not provide a prop for weak consumption trends, it is also not adding to inflation pressures. A stronger than expected pursuit of fiscal consolidation in this year and the next, and a promise to lower gross market borrowings from ₹15.4 lakh crore this year to a tad over ₹14 lakh crore in 2024-25, should help. The Minister asserted that this will free up more credit for the private sector now that industry is beginning to invest ‘at scale’. Gross market borrowings as a share of the fiscal deficit will also drop below 84% from 89% this year. With foreign capital inflows into Indian government bonds likely to spike following their inclusion in global bond indices, banks which are the major holders of these securities and are facing elevated credit to deposit ratio growth rates, should get more space to lend. Economists expect this to help lower borrowing costs for the entire economy. Yields on government bonds have already dropped from 7.14% ahead of the Budget to about 7.05% and could drop further, even as systemic liquidity has improved a tad. For Mint Street hawks, that is no small comfort.

 

 

 

 

THE INDIAN EXPRESS

February 7, 2024

Law is not enough

Bill to curb cheating in public service exams is welcome. But more needs to be done to acknowledge and address a chronic breakdown

 

On Tuesday, Lok Sabha passed the Public Examinations (Prevention of Unfair Means) Bill, 2024 in Parliament. The legislation is an attempt to address a disturbing state of affairs. Examination malpractices tar the credibility of the public recruitment system. An investigation by this newspaper found more than 40 instances of paper leaks in 15 states over the last five years. The cascading effects touched the lives of at least 1.4 crore applicants for about 1 lakh posts. Paper leaks lead to either the cancellation or postponement of exams, adversely affecting the prospects of the aspirants — in seven cases investigated by this newspaper, candidates are still awaiting a re-examination. Some states do have anti-cheating laws, but they haven’t proved to be effective deterrents. The Centre’s Bill is intended as a “model draft”, which aims to introduce “greater transparency and fairness”. This is a much-needed step — accountability for paper leaks must be fixed. Much more, however, needs to be done to make sure that unfair practices have no place in the government recruitment system.

 

In recent years, several states have witnessed public outrage over the disruption of examination schedules. This issue was among the talking points in the recent state assembly elections in Rajasthan, Telangana and Madhya Pradesh. In Rajasthan, the BJP alleged that members of the then-ruling Congress were complicit in the paper leaks. The Congress hurled similar accusations against Telangana’s BRS government. However, alleviating the anxieties of the young public service aspirants has never gone beyond trading charges, it is yet to become a major election issue — say, like the demands of caste groups. The political class’s shortage of ideas on this issue is disturbing in a country that proclaims its intention to reap its demographic dividend in the next quarter century.

 

Even after more than 30 years of liberalisation, a large section of the country’s young population, especially those from the middle and lower-middle classes, seek the safety of a government job. Regular salaries and social security benefits enhance the appeal of these jobs and multiple pay commissions have reduced the gap between private and public sector salaries. In large parts of the country, working for the government is seen as the most assured route of upward mobility. The number of aspirants for such jobs seems to have grown after the economic crises of 2008 and 2013 and the pandemic-induced disruption. At the same time, however, the government employment pie has been shrinking across states. This demand-supply gap creates fertile grounds for the job mafia and exam fixers. Comparatively, examinations conducted for the elite All India Services, IITs and medical institutions have been less prone to such controversies or scams. Introducing the new Bill, Minister of State for Personnel, Public Grievances and Pensions Jitender Singh said that “the government is aware of the concerns of youth regarding irregularity in examinations”. The Lok Sabha has passed the bill without much debate. The discussions in the Upper House will hopefully suggest a way forward on framing broader and durable solutions to a longstanding problem.

 

 

 

 
THE INDIAN EXPRESS

February 7, 2024

Signal from industry

Data shows employment picked up after Covid. But pace of job creation remains a challenge

 

On Monday, the Ministry of Statistics and Programme Implementation released the results for the Annual Survey of Industries (ASI) for 2020-21 and 2021-22. These surveys cover factories employing 10 or more workers using power and those employing 20 or more workers without power. As such, they form a critical source of information on the registered organised manufacturing sector in the economy. As both these years — 2020-21 and 2021-22 — were marked by disruptions in economic activities on account of the pandemic, these surveys, by providing granular information, help in understanding how industry fared during those years.

 

At the aggregate level, gross value added grew by 8.8 per cent in 2020-21 (in current prices), after registering a fall the year before. Growth in value added was driven by a sharper fall in input (at 4.07 per cent) than output (which fell by 1.9 per cent). In 2021-22, as the economy rebounded, value added grew by 26.6 per cent, with output growing at 35.4 per cent. In both these years, the registered organised manufacturing sector grew at a faster pace than the unorganised sector. The industries that drove growth during 2021-22 were manufacture of basic metal, coke and refined petroleum products, pharmaceuticals, motor vehicles, and chemicals — value added by these industries grew by 34.4 per cent. Profits, which were also depressed in 2019-20, bounced back during this period.

 

The estimates of employment show that during the first year of the pandemic, total persons engaged fell marginally by 3.2 per cent — from 1.66 crore in 2019-20 to 1.6 crore in 2020-21. Employment picked up thereafter, with total persons engaged rising to 1.7 crore in 2021-22 — an increase of 7 per cent. This pick up in employment is encouraging. However, the pace at which quality jobs are being generated across all sectors at the aggregate all-India level leaves much to be desired. Between 2017-18 and 2022-23, while the labour force participation rate (15 years and above) saw a steady increase, rising from 49.8 per cent to 57.9 per cent, a greater percentage of workers were self-employed, not engaged in regular salaried or casual wage employment, as per the periodic labour force surveys.

 

The share of workers that were self-employed rose from 52.2 per cent in 2017-18 to 57.3 per cent in 2022-23. Over the same period, the share of workers in manufacturing declined from 12.1 per cent to 11.4 per cent. This jobs dilemma has been, and will remain, the principal policy challenge.

 

 

 

 

THE INDIAN EXPRESS

February 7, 2024

Target: Gobi manchurian

In seeking to ban the dish, Mapusa may be missing the gobi for the manchurian

 

For lovers of gobi manchurian, its siren-red hue is a beacon, calling to them to indulge in its crispy deliciousness. Yet, for the councillors of the north Goan town of Mapusa, that same colour is an indication of what is wrong with the popular snack and is one reason why it has reportedly been banned from being sold at street stalls during a “zatra” (temple festival). Besides the use of synthetic colour, other concerns raised were poor-quality sauces and unhygienic conditions of preparation.

 

The cold logic of health and safety standards is hard to argue with, but the fact is that street food consumption is not driven by calculations about which food is healthier. It’s not as if those who partake of roadside chaat and kebabs are unaware of all the ways in which these indulgences could be the stuff of cardiac and insulin-resistant nightmares. From oil that is reused multiple times to ingredients that are exposed to the elements, eating any kind of street fare is a gamble. The question, then, is: Why is gobi manchurian a target, when every other street food, too, can pose a health risk? Or is the ban not so much about enforcing safety standards, but targeting a food that is seen as non-native, or non-Indian?

 

This is not the first time that gobi manchurian has attracted official ire in Goa. The municipal councils of Bicholim and Marmugao have previously raised similar concerns to prevent street stalls from serving gobi manchurian at festivals. It could be asked whether those who have sought to ban this dish believe that all other kinds of street foods — many of which are also as greasy and additive-laden as gobi manchurian — unfailingly meet these same standards. Rather than banning one dish and disrupting the livelihoods of small vendors, better implementation of existing regulations is needed. Clearly, the municipal council of Mapusa has missed the gobi for the manchurian.

 

 

 

 

THE TIMES OF INDIA

February 7, 2024

Good/Bad Start

U’khand’s UCC ticks some boxes. But it also encourages moral policing & coddles a few social taboos

 

Uttarakhand on Tuesday tabled a bill to introduce a uniform civil code (UCC) in the state. This paper has long argued for UCC as the best way to bring about gender justice in marriage, divorce and inheritance across communities. Uttarakhand, therefore, has shown the right intent. But not always the right spirit.

 

States have the right | There’s no legal bar on Uttarakhand enacting a UCC. States have earlier taken the initiative to offset discriminatory personal laws. For example, Kerala in 1975 reformed Hindu law to give women equal inheritance rights. Other southern states and Maharashtra followed suit.

 

Not quite uniform | This UCC keeps tribals out of its purview. That however is not the only exception. A sound UCC should not provide bypasses in its application. Uttarakhand fails on this count. For example, it details a list of “degrees of prohibited relationship” based on customs of some communities. The bar on marriage under this custom applies only to people who belong to groups where it’s been practised. Others are exempt. Application of this will be tricky.

 

Privacy matters | The state’s marriage register is open to scrutiny by any person. Why? And how does it help in reforming personal laws? In a digital era, state authorities can instantaneously verify the marital status of every applicant to ensure polygamy is prevented. Allowing unrelated people to poke around will only encourage vigilantism.

 

Buckling under social tyranny | Sections governing live-in relationships are the most regressive parts of the bill. UCC has no business in trying to regulate live-in relationships. These sections of the bill are a thinly veiled attempt at moral policing. For example, a delay in registration of live-in relationships can even lead to imprisonment and fines. A law should lay out the rights of an individual against other individuals and also society at large. By this measure, provisions on live-in relationships mimic a medieval social code rather than a modern law.

 

Can’t let go | Uttarakhand’s UCC also covers residents who live outside the state, they are even encouraged to register live-in relationships. In a country where migration is increasing, states shouldn’t exercise this level of control.

 

UCC does well to end polygamy and bring about a greater level of fairness in inheritance across communities. However, what India needs is a national UCC instead of patchy efforts.

 

 

 

THE TIMES OF INDIA

February 7, 2024

In Gobi’s Company

Is your meal up to an authenticity check? It matters little if you like the taste

 

Indians’ palates are definitely getting more experimental. So purists are suffering serious heartburn. What these taste czars should remember is today’s favourites are only around thanks to yesterday’s innovators. Think dal makhani, kathi roll, Chicken 65, the nation’s top ordered dish – biryani, and gobi manchurian. This last has fallen out of flavour with a Goa municipal council.

 

Chindian is good egg | Indo-Chinese cuisine does not curry favour with visitors from China. So who cares? Certainly not the proliferating fandoms of manchurian, which besides gobi comes in paneer, pasta, chicken, corn, tofu, idli and numerous other avatars. As much as desis are gobbling up all this yellow-orange-red variety outside, they are also constantly experimenting in their own kitchens. Grocery lists now daily see Korean gochujang next to tamarind chutney, blueberries accompanying oranges.

 

Sour grapes are big cheese | Doomsayers will have you believe that fusion cuisines are a death knell for authenticity. That’s nuts. If one person seeks adventure and Instagram hits from her restaurant outing, another looks for home-cooked vibes. And the two can switch moods as easy as slicing bread. Then again, given how food-obsessed we are, storms in teacups are to be expected. Like the internet losing it over a Maggi milkshake.

 

Pie is in sky | A Pennsylvania chemistry professor recently caused a transcontinental storm by suggesting that the secret to a perfect cup of tea is salt! Smaller squalls are happening all the time. Like when Emily in Paris went gaga over an industrially produced McBaguette. Or a millennial has her rice with avocado instead of her mum’s dal and a Michelin star chef adds makhni gravy to ice cream. Purism remains a valid school. But it can’t stop people from eating whatever takes their fancy.

 

 

 

 

THE ECONOMIC TIMES

February 7, 2024

Metamorphosis, Tech Gets Its Mojo Back

Magnificent 7’s kept the rally intact on Wall St

 

Frontline US technology stocks made remarkable gains last week with some results beating market expectations. The surge was led by Meta Platforms, which not only put out outstanding quarterly numbers but also topped it off by announcing its maiden dividend. Amazon gained from strong festival spending during the quarter. This is a radical departure from a year ago when technology companies were grappling with a bloated workforce that was acting as a drag on valuations as demand for services subsided with employees returning to offices after the pandemic. Big Tech has since set its payroll in order, and is riding extraordinary investor interest for generative AI. The Magnificent Seven have kept the rally intact on Wall Street for a better part of last year, and a lot was dependent on the December quarter’s results, which turned out to be a mixed bag. Apple has had to sit out the latest leg of the rally because of underwhelming iPhone sales in China. Alphabet’s shares slid when Google’s advertising revenue showed little impact of AI deployment.

 

Investors are guided by commentary from Big Tech about investments in AI. Meta was the loudest drummer, announcing extraordinary budgets for AI and the metaverse, which had sapped investor appetite a year ago. Meta was at that point struggling with user engagement, and its investments in augmented reality seemed a bit of a stretch. AI has turned that argument on its head. Apple and Nvidia are gaining from their expanded AI plans. Microsoft has pierced Apple’s valuation principally via its investment in ChatGPT maker OpenAI, despite its boardroom battle involving CEO Sam Altman’s spin out and in of its San Francisco HQ’s revolving doors. Both Microsoft and Google have issued guidance of increasing costs to gain dominance of the AI products market.

 

For now, Wall Street’s enthusiasm for AI remains largely undeterred by its performance, or cost warnings of its creators. Meta’s single-day valuation gain of $197 billion bears out Elon Musk’s succinct view of the market: crazy times.

 

 

 

 

THE ECONOMIC TIMES

February 7, 2024

Your Honour, It Was Never About Marriage

 

In an anachronistic, indeed, regressive, understanding of the ever-evolving idea of ‘family’ and ‘parenthood’, the Supreme Court has denied a 44-year-old single woman the right to have a child via surrogacy. Despite her commitment and ability to provide for the child, the court denied her petition, citing some very odd reasons: ‘to save the institution of marriage’ because India ‘cannot go the West’s way’. Rather than recognising that socially-curated norms like marriage are expanding from its one-format ‘2 parents+kid(s)’, as Indian society circa 2024 itself is changing, keeping a cookie-cutter to measure ‘motherhood’ is unfortunate.

 

The Surrogacy (Regulation) Act states that only widowed and divorced women between 35 and 45 years can avail the surrogacy route. Implying that single unmarried women can’t go down this road. Because she does not wish to be married — a wish that is part of her agency — surrogacy was her choice, not the arduous route of adoption. Rather than recognise that restrictions put on single women opting for surrogate children is an infringement of one’s rights to have a family— any unit that cares for its members, no matter its size or composition — the court chose to question the woman’s choices regarding her career path and disinterest in marriage.

 

For the law, welfare of the child is paramount, as it should be. But the court has equated welfare to having two married parents. This is not just placing the cart before the horse but deciding that there is only one kind of vehicle. What should have been solely about the woman’s ability to tend to the child has been turned into protecting nebulous ideas like ‘only married parents’ and staving off the ‘West’s way’ (sic). Preaching isn’t the court’s job anyway.

 

 

 

THE HINDU BUSINESSLINE

February 7, 2024

Unhealthy practices

Reforms needed to make health policies truly cashless

 

Despite the proliferation of insurers and products, health insurance policies in India which are supposed to provide cashless reimbursement of hospital bills, rarely serve their intended purpose. Fortunately, the General Insurance Council, the industry body, has finally initiated steps to try and resolve at least one impediment to cashless treatment, which is the requirement that the policyholder use a hospital from the insurer’s approved network.

 

The Council has data showing that as many as 37 per cent of health insurance customers incur out-of-pocket expenses on hospitalisation because they are unable to avail of cashless treatment. It is now proposing a ‘cashless-everywhere’ facility that will allow patients to file insurance claims, irrespective of whether they take treatment in a hospital in the insurer’s approved network or outside it. If this facility takes effect, policyholders will get much-needed flexibility to choose their hospital based on their comfort with the treating doctor and proximity, which is critical in emergencies. However, the transition to cashless-everywhere is unlikely to be easy. To avail of it, the industry expects a customer who is undergoing elective surgery to intimate his insurer 48 hours before admission. Emergency treatments are to be intimated within 48 hours after admission. The hospital is expected to share its treatment costs with the insurer ahead of treatment, so that the two parties sign off on a Memorandum of Understanding pre-authorising the claim.

 

Given that agreement on tariffs is the main stumbling block to the expeditious settlement of claims even in network hospitals, it is moot if the MoU will go through smoothly in the new system. If it fails to materialise, the customer will be back to square one. India has small hospitals and clinics in every nook and corner with minimal standardisation in their treatments, procedures and tariffs. Therefore, there is also the question of whether insurers will accept claims from any healthcare provider. Patients are anyway subjected to interminable waits at the time of discharge, as the insurer and hospital wrangle over the bill. Third-party administrators’ numbers and capacity to service claims has to increase manifold.

 

The insurance industry will also have to do much more than waive the network hospital requirement, if it is to deliver on the promise of cashless treatment. Cashless mediclaim is a misnomer because full reimbursement of hospital bills is the exception rather than the rule. The claim settlement ratios of health insurers hover in the 60-80 per cent range, while it is upwards of 95 per cent for life insurers. Complaints lodged with the insurance ombudsman show that health and general insurers often take refuge in fine print on policy exclusions and ambiguity on pre-existing medical conditions, to turn down claims. The Insurance Regulatory and Development Authority of India also needs to crack the whip on insurers, so that they are upfront with customers on their actual claims record.

 

 

 

 

BUSINESS STANDARD

February 7, 2024

Leveraging research

India needs to push R&D expenditure

 

The 2024 Interim Budget speech, by Union Finance Minister Nirmala Sitharaman, underscored the government’s focus on fostering entrepreneurship and innovation. Notably, Ms Sitharaman announced the establishment of a Rs 1 trillion corpus to incentivise innovation and research in sunrise sectors. The fund will provide financing and refinancing for long tenures with low or zero interest rates, thereby enabling the private sector to scale up research and innovation. While this is indeed a welcome move, especially for Indian tech startups, which are facing a funding winter, it may not be enough to push investment in research and development (R&D) to the level desired. In terms of both product and process innovation, India lags behind most major economies of the world.

 

India’s per capita R&D expenditure is one of the lowest in the world. Gross expenditure on R&D as a percentage of gross domestic product (GDP) was at a meagre 0.64 per cent for India in 2020-21, far lower than the world average of 2.71 per cent. For instance, an analysis by the co-chairperson of Forbes Marshall, Naushad Forbes, published in this newspaper, showed that the top two software firms in the country invested only 1.4 per cent and 0.5 per cent of sales in R&D, respectively. In contrast, the corresponding numbers for IT software firms in countries like the US, China, Japan, and Germany ranged between 6.5 per cent and 21 per cent. According to the World Intellectual Property Organization’s global innovation index, India retains its 40th rank in 2023, suggesting its inability to step up in research and innovation. Fitting into the broader picture, low R&D by India Inc has dragged down the overall share of expenditure on research in India’s GDP. Low investment by the private sector leaves most of the heavy lifting for the government, which has other pressing demands on the Budget. It is no surprise that the country cannot boast too many global firms in contemporary times — the ones associated with great products and a premium position in the global markets.

 

It is thus worth noting that without the private sector stepping up efforts in R&D and improving innovation output, India cannot possibly move up in the global supply chain. An underdeveloped intellectual property rights regime, uncertainty around data protection, and fear of imitation by smaller firms discourage large private-sector firms from increasing their R&D spending. Notwithstanding impediments, a few global companies are developing R&D capacity in India. For instance, GE Healthcare opened its first 5G innovation lab in Bengaluru in 2022. The same year, another health care firm opened its first surgical robotics centre in the Asia-Pacific region in Gurugram. However, while some of these global capability centres will increase overall R&D activity, it is worth noting that research and innovation breakthroughs in most cases would belong to overseas firms.

 

Since large corporations in India are not short of cash, the new funds should be expected to help small new-age firms. To encourage higher activity in research, the government must work with the private sector to address their needs and concerns. The establishment of the National Research Foundation will also help in this context. However, as argued by several experts, its operations should be professional. Bureaucratic interference will hamper operations and outcomes. In a world that is increasingly driven by technology, only firms and countries focusing on innovation will prosper.

 

 

 

 

BUSINESS STANDARD

February 7, 2024

Valuation surge

Turnaround in Tata Motors is driving share prices

 

The market capitalisation of Tata Motors briefly overtook that of Maruti Suzuki India Ltd (MSIL) last week, making the Tata company the most valuable listed automobile company in India. The share price of MSIL has since gained enough to recover top position. The movements in these two shares illustrate an interesting quirk in valuation. While share prices are indeed tied to prospects of profits, investors are usually prepared to bet more on a possible turnaround in a loss-making company than in a business that’s already doing well. In the past 12 months, MSIL’s share has gained 19.6 per cent while Tata Motors (share with voting rights) and Tata Motors DVR (differential voting rights) have gained 99 per cent and 160 per cent, respectively. Tata Motors is now valued at roughly Rs 3.10 trillion while MSIL has a market capitalisation of Rs 3.34 trillion.

 

Both have overseas exposure. In MSIL’s case, this is due to the Japanese promoter, which means imported components, dividends, and other payments to the promoter. Movements in yen-rupee rates have a bearing on its financials. In Tata Motors, however, external exposure is much larger than the domestic business. The overseas subsidiary, JLR (Jaguar Land Rover), has a larger balance sheet and far more revenues than standalone Tata Motors. The standalone business contributes only 28 per cent of consolidated revenues. MSIL has been consistently profitable and retains over a 40 per cent market share across all segments of the passenger-vehicle market. In FY22, MSIL reported net profits of Rs 3,770 crore on revenues of Rs 88,300 crore and it reported net profits of Rs 8,050 crore on revenues of Rs 1.2 trillion in FY23. While MSIL has improved margins, demand in the key small car segments where it has a dominant presence is down.

 

Tata Motors has a presence across many domestic segments including trucks and other commercial vehicles, as well as passenger cars, where it is usually at number three on unit sales. But it has struggled for years. In FY22, consolidated net losses amounted to Rs 11,308 crore on revenues of about Rs 2.8 trillion and it turned net profits of Rs 2,689 crore on revenues of Rs 3.5 trillion in FY23. In FY24, it promises to see a surge in profitability based on a strong revenue expansion, better margins, and higher volumes for domestic and overseas sales. Analysts say it could report over Rs 21,000 crore consolidated net profits on revenues of roughly Rs 4.3 trillion. Margins for JLR will be better than domestic margins, going by the last nine months.

 

Like all auto companies, both suffered from semiconductor shortages, high commodity prices, and disrupted supply chains during the past three financial years. But both managements seem to think these issues have been overcome. MSIL’s growth rate is being impacted by the changing demand pattern, which has been apparent in the recent past while Tata JLR will gain from gradually improving global demand as well as a presence in the domestic commercial vehicles and mid/high passenger segments. Tata has also made significant gains in the electric-vehicle market. The difference in share-price performance between MSIL and Tata Motors is worth noting. This rerating phenomenon where the valuation of a loss-making company spikes on a turnaround is very often seen in cyclical sectors. Sustaining the new level of valuation would depend on sustained financial performance.

 

 

 

FINANCIAL EXPRESS

February 7, 2024

Chandigarh tragedy

Strong words used by apex court on mayoral election should be a wake-up call

 

The conduct of the presiding officer in the recent mayoral election in Chandigarh casts a cloud on the fundamental contract between the State and citizens on free and fair elections. After viewing alleged defacing of ballots by Anil Masih, a BJP councillor who presided over the poll, the Supreme Court’s oral remarks were stinging—the apex court termed it “a murder of democracy”. The BJP was declared the winner after eight votes by Congress-AAP councillors were junked as “invalid” by Masih. Such mockery of electoral democracy, sadly, hasn’t happened for the first time. Recall the panchayat elections in Bengal in 2018 and 2023. Opposition parties in the state had alleged rigging, ballot looting, etc, by the ruling party.

 

A mayoral or a panchayat election may be conducted very differently from an Assembly or a parliamentary poll, but the erosion of faith at the grassroot level will stoke the electorate’s distrust of the latter. The ruling party at the Centre must, therefore, act quickly to address any malfeasance by the people representing it, even in local elections. The general elections are due in a few months. While the party may be confident enough of its good work to say it will win 370 seats by itself and 400 as a coalition, it can ill-afford to let such a victory be overshadowed by any doubt over fairly-conducted elections. More so, when the opposition parties have, time and again, raised the bogey of manipulation of electronic voting machines (EVMs). The image of India’s electoral democracy can’t afford such assaults.

 

That said, free and fair elections are not the responsibility of political parties alone. The Chandigarh episode exposes the reluctance of the judiciary to take a fair stand on the issue. The Punjab and Haryana High Court must bear some blame for how things unfolded. The Congress party and AAP had approached the court on January 17, fearing tampering and malfeasance in the election originally scheduled to happen on January 18. They had requested a court-appointed supervisor. The election was delayed by the presiding officer, but when the HC ordered that the polls be held on January 30, it refused to appoint a supervisor. There was blatant violation of the regulations—though the rule calls for the counting of the votes by the presiding officer along with designated members, it was only the presiding officer who counted these. Yet, when these violations were pointed out to the HC on January 31, it refused to grant interim relief by staying the election. Such hesitation on carrying out its mandate—or worse, abdication of the same—injures not just trust in the elections but also in legal remedy.

 

Loss of faith in the fairness of polls would be catastrophic for a democracy like India’s, especially when it is as prone to polarisation as now. The SC has rightly termed the “purity of the election process” as the “great stabilising force in the country”. Trust in the electoral process has been built across the decades, with the Election Commission, the political parties, the executive and the judiciary, each playing their role in bolstering it. Indeed, a Freedom House report gives full marks to India’s electoral process even as other factors such as full political rights and electoral opportunities for all the sections of the population didn’t have such a stellar showing. That trust needs to be protected.

 

 
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