RBI to launch Unified Lending Interface; The future of Ola Electric and Bhavish Aggarwal
Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Tuesday, 27 August 2024. My name is Nelson John. Let's get started.
The Indian stock market saw solid gains on Monday, with the Nifty and the Sensex climbing nearly 1 per cent each.
India is setting the stage to enhance its local manufacturing with a new initiative called 'Rapid', which stands for Research, Analysis, Programme Implementation and Data Intelligence. Mint’s Shouvik Das and Mihir Mishra write that the mission aims to boost domestic private-sector research and development through strategic incentives. ‘Rapid’ will target key sectors like automobiles, electronics, medical devices, and aerospace. Chaired by Pawan Goenka - who is also at the helm of INSPACE - the initiative is part of India's broader strategy to build a design-led manufacturing ecosystem. This is essential for advancing India's manufacturing goals and aligning with its ambitious targets to grow the economy to $5 trillion by FY28.
Last year, India briefly banned imports of certain IT hardware products like laptops, desktops, and tablets. This decision was quickly reversed after pressure from industry leaders such as Dell, HP, Lenovo, and the US Trade Representative. However, the government is now reassessing whether to extend deadlines for import restrictions, reports Gulveen Aulakh. This comes as local manufacturing shows signs of improvement, though not fast enough to fully replace imports. Through the Production-Linked Incentive scheme, local production has increased. About 30-35 per cent of laptops sold in India in 2023 were made domestically. This figure is expected to rise above 40 per cent. Global manufacturers are expanding their local production bases. Yet, most won’t start significant production until next year. With ongoing analysis of import and production data, the government has not made a final decision on extending import restrictions.
The recruitment industry is hitting a rough patch after the post-pandemic hiring boom. Companies like Teamlease have to tighten their belts, adjust team sizes and tweak incentive targets because projects are drying up, clients are squeezing costs, and the deadlines to fill positions are stretching out. This shake-up has led to a shortage of hiring agents, with sourcing fees dipping well below the usual 8.33 per cent of a candidate’s annual salary, reports Mint’s workplace correspondent Devina Sengupta. This slowdown marks a stark shift from the 'Great Resignation' era when the demand for recruiters surged. Firms are now refining their strategies; for example, ABC Consultants is zeroing in on senior management roles, while Xpheno pivots towards contract staffing, especially targeting global captive centres. This shift comes as IT bigwigs like TCS, Infosys, and Wipro scale back their workforces significantly.
Reserve Bank of India Governor Shaktikanta Das announced plans for a nationwide rollout of the Unified Lending Interface, or ULI, aimed at transforming credit distribution like UPI transformed payments. Speaking at a conference in Bengaluru, Das outlined that ULI would expedite loan processing, especially for smaller and rural borrowers, by integrating various data sources through a seamless digital platform. The platform, which has evolved from pilot projects like digitizing Kisan Credit Card loans, promises quicker loan approvals with reduced paperwork by connecting banks with diverse data services, reports Mint’s banking editor, Gopika Gopakumar. The RBI's initiative is set to simplify borrowing, reflecting a significant shift towards digital infrastructure in banking, enhancing efficiency and accessibility of credit.
Ola Electric recently launched a successful IPO, which was oversubscribed by 4.27 times, raising more than 6,000 crore rupees. This move solidified the company's standing as India’s premier electric two-wheeler maker, a title it has held since its explosive entry into the market in 2022. The IPO not only raised substantial funds but also significantly boosted the profile of its CEO, Bhavish Aggarwal, who has been a prominent figure in India’s entrepreneurial scene, transitioning from Ola Cabs to Ola Electric, and now to AI with his new venture Krutrim. Mint’s Sumant Benerjee and Abhishek Mukherjee examine Ola Electric’s future, answering questions about the future of the company’s CEO Bhavish Aggarwal.