Tesla executives to meet government officials on May 17
Tesla’s top executives are flying to India to talk with government officials about more local outsourcing.
What it implies: The government had refused to agree to Tesla’s request to reduce import duties on luxury cars to 40 per cent. Instead, it wanted Tesla to assemble the vehicles under the Completely Knocked Down (CKD) norms, and since then, there have been no updates from either side. The current visit could yield some results as the government is keen on increasing the outsourcing of automobile components from India.
Highway construction falls again; it gets off to a poor start in FY2024
According to data from the ministry of road transport and highways, highway construction in April dropped 75 per cent sequentially to just over 500 km, signalling a poor start to the government’s road-building goal for the year, a Mint report said.
In contrast, 2,250 kilometres of highways were constructed in March, which may have resulted from government agencies rushing to meet their fiscal year-end goals. Ahead of the general election in FY24, the April data raises concerns that road construction targets may be missed for the third consecutive year.
What it implies: During FY 2023, the construction of highways fell by 13.70 per cent compared with the targetted 12,500 km to 10,993 km. While national highway (NH) construction in the country reached a record high of 37 kilometres per day in 2020-21, it slowed to 30.11 kilometres per day in 2022-23.
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The National Highways Authority of India (NHAI) and the National Highways and Infrastructure Development Corporation Ltd (NHIDCL) are responsible for building national highways and motorways in India.
According to the government, it made 10,237 kilometres in 2019-20, 13,327 km in 2020-21, and 10,457km in 2021-22. With the government allocating the highest-ever budget for capex in the latest union budget of ₹10 lakh crore, an increase of over 37.4 per cent, to boost infrastructure, it remains to be seen whether there will be any shortfall this year too. According to analysts, one of the main reasons for the shortfall is land acquisition issues and unpaid dues to contractors.
Tata Sons expected to reap a record dividend of ₹33,500 crore
The payout from Tata Consultancy Services forms a significant part of the ₹33,500 crore dividend for Tata Sons, a 130 per cent increase over last year, according to a report in Business Standard.
What it implies: Tata Sons owns over 264 crore shares of TCS, and most of the dividend payouts from the software services company are expected to strengthen the group companies’ digital and consumption businesses.
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Forecasters differ again on the onset of the monsoon
The southwest monsoon is expected to arrive over Kerala on June 4 with a model error of four days, according to the Indian Meteorological Department (IMD) on Tuesday. (May 16) This comes a day after Skymet, a private forecaster, predicted a delayed and weak monsoon. Meanwhile, Skymet forecasted immediately after the IMD’s estimate that the monsoon would arrive a week later, on June 7, with an error margin of three days.
What it implies: Skymet released its monsoon forecast 2023 on April 10, announcing it to be below average with seasonal rainfall 94 per cent of its long period average (LPA) of 868.6mm. The next day, April 11, India Meteorological Department also proclaimed the seasonal forecast stating it to be typical with rainfall of 96 per cent of LPA. Both estimates have a model error of +/- 5 per cent.
According to a report on its website, Skymet’s forecast is on the higher end of ‘below normal’, and IMD’s forecast is on the lowest end of ‘normal’. The difference between the two amounts to a rainfall of 18mm for the 4-month-long session, which is otherwise just two days of rain in the core monsoon months of the season. There can hardly be any better consensus between two independent weather agencies on the monsoon forecast.
Hitting the bull’s eye and issuing a matching forecast is impossible. The report said that cards would open only at the end of the season to ascertain monsoon status, Normal-Below Normal-Above Normal or otherwise.
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Hospitality industry to add 12,000 rooms in 2023
A real estate consulting firm, CBRE South Asia Pvt. Ltd., has said that the outlook for the hospitality sector improved and put it on a recovery path after a strong vaccination programme, reopening of borders, removal of travel restrictions, and sustained economic growth.
Over $ 2.3 billion in investments are expected over the next 2 to 5 years. The report also states that 12,000 rooms will likely be added in 2023, and the number of rooms is expected to grow at a CAGR of 3.3 per cent by 2025. It is estimated that a recovery in demand will remain ahead of supply addition, which will augur well for the key metrics of the hotel sector’s performance.
Over the next few years, the need will likely be more equilateral and broad-based rather than centred across only select cities/markets. CBRE expects this steady supply growth to continue for the next few years. Increasing investor interest has been one of the significant drivers of growth for the Indian hospitality space in the past couple of years.
In addition, Indian companies are also participating actively in this segment by way of investing or expanding their presence. The international presence and acceptance of Indian chains have established these brands’ service levels and visibility. Further, the report states that all industry KPIs, such as the percentage of rooms occupied / occupancy rate, average daily rate (ADR) / average rental revenue per occupied room at a given time, and revenue per available room (RevPAR) / revenue generated by one room are expected to surpass pre-pandemic levels this year.la executives to meet government officials on May 17