RBI's crackdown affects off-roll workers, India's love affair with cotton
Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Monday, November 18, 2024. This is Nelson John, let's get started.
Stock markets have been brutal of late. Investors have lost a cumulative ₹50 trillion over the past seven weeks, during which the Nifty and Sensex have fallen 10% from their peaks. Ram Sahgal reports that foreign investors are pulling out in hordes. Poor Q2 results across the board haven’t helped, either. Analysts have remained optimistic of a rebound but are worried about the long-term sustainability of the bull runs that we have seen until a couple of weeks ago.
A tax on crude oil and fuel exports is being scrapped soon. Rituraj Baruah, Gireesh Chandra Prasad and Utpal Bhaskar report that this tax was originally imposed in 2022 following a surge in prices after the Russia-Ukraine war broke out. As oil prices have remained low, the union government wants to reduce and eventually eliminate it entirely. This decision will benefit oil companies in India, allowing them to compete globally.
The RBI’s crackdown on unsecured personal loans has led to a reduced demand for off-roll workers in the banking sector. Shayan Ghosh and Devina Sengupta report that the in-house shift of KYC norms has also affected this type of employment. These roles typically did KYC, loans sales and loan collections. While the RBI's change aims to increase compliance and prevent money laundering, it may inadvertently push borrowers towards unregulated money lenders.
India's roads are dangerous. A road accident in Dehradun last week resulted in 6 deaths and one critical injury. Sumant Banerji writes that 171,000 people died in road accidents in 2022 alone—accounting for nearly 12% of global road fatalities. Key causes include speeding and careless driving, which account for more than 87% of incidents. Unsurprisingly, two-wheeler riders are the most vulnerable. Despite these startling facts, education on road safety remains inadequate.
More than 60% of India's domestic textile demand is for cotton. In a humid country like ours, it's not difficult to see why. Things are different across the world. Man-made fibers such as polyester are much more common in countries such as. China, Taiwan, and Vietnam, which already cornered a lion's share of that market. N. Madhavan writes about these man-made fabrics, their endless potential, and the limitations in the Indian manufacturing and consumer verticals that might prevent them from succeeding like their East Asian counterparts. The government, for its part, has announced a PLI scheme for these fabrics that exceeds ₹10,000 crore. It has already found takers for nearly double that amount. But will it work?