Sat, June 7, 2025

Editorial     

Soaring GST, suffering citizen

It is ironic that while the government’s revenues are shooting up with GST and other taxes even on the common man’s fare like milk, buttermilk, idli-dosa- upma and sabudana khichdi, the poor and lower middle-class are being crushed under the increasing inflationary price spiral. Call it a tragi-comedy if you will, a so-called welfare state ostensibly dedicated to serving the public is squeezing the common man to fill the government’s election piggy bank ahead of the forthcoming general elections.

With every monthly rise in GST collections, the government turns jubilant — at the cost of the happiness of the common Indian. Ironically, the government’s swollen kitty is then used to sway the hapless Indian voter. But the reality is that this cynical approach is actually killing the dreams of the common man and also crushing his happiness.

Have you heard of a tax on milk for infants? Or a tax on buttermilk, the mainstay source of nutrition for a poor family? Prices of vegetables have shot up to such a high level that it has become extremely difficult for a poor or low-income family to run its modest household. Trust cynical politicians, especially of the ruling class, to divert funds to finance elections at the cost of vital issues like health and education.

Some state governments have in fact slashed funds to universities, forcing the latter to hike their fees. For example, the Hissar-based Chaudhary Charan Singh Agriculture University has increased its fees by 100-150 per cent after the government slashed funding. In such a scenario, how can aspiring poor and lower middle-class families afford expensive fees to educate their children?

For the lucky few in India, inflation is simply a moving point on a graph, an abstraction and a topic for chit-chat in elegant drawing rooms. For the not-so-lucky, it is the mathematical representation of a silent everyday despair that strips away the common man’s dignity and erases his dreams and hopes.

From villages to small towns to metropolises, inflation has not spared low-income groups – the story repeated in a million voices, each unique in its private despair but each sharing the same slow fading of hope.

Interestingly, in 2022, inflation peaked at a level unheard of in the last four decades. Prices boomed more rapidly for certain items than others, especially in the case of food, fuel and air fares.

Some of those swings were due to external factors like snarled supply channels, labour shortages, burgeoning consumer demand and the Russian invasion of Ukraine. But the Indian government did not take any imaginative and effective steps to mitigate the effect of these factors. Unfortunately, the worst-hit in 2022 was the school meal scheme. The price of a meal at elementary and secondary schools spiked by a whopping 305 per cent, triggered by the overall hike in food prices.

Other items which have seen, and continue to see, a rapid rise in prices include eggs, margarine, fuel oil and motor fuels, butter and other dairy products, and items as disparate as airline fares and lettuce.

It is the misfortune of Indians that the government does not think inflation is a problem and is, consciously or otherwise, making the lives of poor and lower-income people miserable. The tragedy is that the government is itself culpable of igniting the inflationary price spiral. If GST on items of day-to-day use is done away with, there would be tremendous relief for the common man.

At another level, there is an urgent need to scrap excise duty, or to keep it at a minimum rate, on petrol and diesel. This will go a long way in containing inflationary pressures in the economy. If the government looks within and ceases to be a profiteer by raising prices every now and then, it would have a salutary impact on the lives of millions of ordinary Indians.

written by

Deven Malkan

Cover story     

Carbon black the new gold

Farfrom being the most visible or glamorous segment of India’s economy, the domestic carbon black segment is growing by leaps and bounds on the back accelerating growth in automobiles, rising disposable incomes and a growing population. That is unsurprising, given that carbon black is an essential component in the manufacturing of parts such as tyres, belts and hoses, making it an essential cog in the automotive supply chain.

Corporate Grapevine         

Abu Dhabi fund ‘loves’ Adani!

Abu Dhabi-based IHC has increased its stake in the Adani group’s flagship incubator Adani Enterprises to above 5% and has been a consistent buyer in the stock over the past few months, lapping up the shares of this group company from the open market. The value of its holding in the company stands at around Rs 14,000 crore.

RIL Retail listing early next year, Jio in 2025

Reliance Retail will be listed by next year at a valuation of $100 bn. The listing will unlock value for RIL shareholders as RIL owns a 85 per cent stake in the company. This will be the biggest listing in recent times as RlL plans to sell a 10 pc stake for $ 10 bn (Rs 83,000 crore).

Loan row delays Zee-Sony merger

Sony Corporation of Japan is expecting a delay in the merger of its India business with Zee Entertainment Enterprises due to litigation over a loan default by Zee’s promoters.

Agarwal’s demerger route red-flagged

Anil Agarwal announced a vertical split of different businesses into six different entities in the group’s pursuit of ‘unlocking value’. But lenders say this would reduce the fungibility of cash flows across businesses and increase earnings volatility, which is a cause for concern for them.

Corporate Development     

Will GLS holders bite Nirma carrot ?

In just over two years of listing its subsidiary, Glenmark Life Sciences (GLS), on NSE and BSE, holding company Glenmark Pharmaceuticals (GPL) has entered into a definitive agreement with Ahmedabad-based Nirma Ltd to divest 75% stake in GLS out of 82.84% it holds in the company. GPL intends to continue with the balance 7.84% stake in GLS. At Rs 615 per share, GPL will get an aggregate consideration of Rs 5,651.50 crore.

Fortune Scrip     

In fast lane of depository services: Riding demat side of market boom

Instead of looking at ‘regular’ corporate entities, this time we have decided to track a new and unique segment where there are only two players and only one of them is listed on a recognized stock exchange. It is Central Depository Services Ltd, popularly known by its abbreviated form — CDSL. Though initially promoted by BSE, the shares of CDSL have been divested to leading banks and BSE now holds just a 20 per cent stake. As per SEBI rules, BSE will have to reduce its stake further to 15 per cent.

Portfolio Choice         

‘Explosive’ growth on horizon - PREMIER EXPLOSIVES

Secunderabad (Telangana)-headquartered Premier Explosives Ltd is a leading manufacturer of highenergy materials and allied products for the defence, space, mining and infrastructure industries. Broadly speaking, the company operates in three business divisions; viz. (1) explosives (catering mainly to the mining and infrastructure sectors); (2) defence (engaged in developing and manufacturing solid propellants for rockets like Pinaka, tactical missiles like Astra, Akash, LRSAM/MRSAM/QRSAM, Brahmos etc., strategic missiles like Agni, Veda and also strap-motor vehicles).

King of cooling solutions - VOLTAS

The six decade-old, Mumbai-headquartered Voltas Ltd, belonging to the illustrious industrial house of the Tatas, is an Indian multinational company engaged in the manufacture of home appliances and consumer electronics. The company designs, develops, manufactures and markets products including air conditioners, air coolers, refrigerators, washing machines, dishwashers, microwaves, air purifiers and water dispensers. Interestingly, the company also enjoys a strong position in the projects business both at home and abroad.

Slowly coming out of the red - PORWAL AUTO COMPONENTS

With its registered office in Indore and factory in Pithampur (both in Madhya Pradesh), Porwal Auto Components was incorporated in 1992 as an ancillary unit of Eicher Motors (now VE Commercial Vehicles Ltd, a Volvo group and Eicher Motors joint venture). The company has established itself as a trusted supplier of quality castings and gained recognition from its customers for outstanding contribution to the parts development supply chain management.

Corporate Development     

Riding global demand for OFCs

HFCL, a leading technology enterprise with operations in manufacturing high-end telecom equipment, optical fibre, optical fibre cables and communication network solutions for the telco, defence and railway sectors, has fared better in its Q1June 2023 performance. Though in Q1 the revenue has gone down marginally from Rs 1,051 crore (Q1 FY23) to Rs 995 crore, its EBITDA margin has increased to 16.04% as compared to 12.35% in the previous year.

May 15, 2025 - First Issue

Industry Review

VOL XVI - 15
May 01-15, 2025

Formerly Fortune India Managing Editor Deven Malkan Assistant Editor A.K. Batha President Bhupendra Shah Circulation Executive Warren Sequeira Art Director Prakash S. Acharekar Graphic Designer Madhukar Thakur Investment Analysis CI Research Bureau Anvicon Research DD Research Bureau Manager (Special Projects) Bhagwan Bhosale Editorial Associates New Delhi Ranjana Arora Bureau Chief Kolkata Anirbahn Chawdhory Gujarat Pranav Brahmbhatt Bureau Cheif Mobile: 098251-49108 Bangalore Jaya Padmanabhan Bureau Chief Chennai S Gururajan Bureau Chief (Tamil Nadu) Ludhiana Ajitkumar Vijh Bhubaneshwar Braja Bandhu Behera

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