‘Strengthening liberal democracy essential for growth’ - Business Guardian
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‘Strengthening liberal democracy essential for growth’



The notion that democracy holds back economic development is wrong and India’s future lies in strengthening its liberal democracy and institutions, former RBI Governor Raghuram Rajan said.

“There is a feeling among some quarters in Indian society today that democracy holds back Indian group, India needs strong even authoritarian leadership with few checks and balances on it to grow. We seem to be drifting in some direction. I believe this argument is totally wrong. It is based on an outdated model of development that emphasises goods and capital, not people and ideas,” Rajan said here. Explaining the economic rationale of liberal argumentative democracy, Former RBI governor said, “India is a bounding today though the consequences of war in Ukraine. Inflation, rising interest rates around the world are all casting a shadow, now any growth we have should be celebrated but we can’t ignore the fact the rebound that we have is from disastrous number posted in last two fiscal years.”

Talking to ANI, Rajan said India has sufficient foreign exchange (forex) reserves, external debts are low and the country is not having the economic problems like Sri Lanka and Pakistan.

“We have sufficient foreign exchange reserves. RBI has done a good job in increasing the reserves. We are not having problems like Sri Lanka and Pakistan. Our foreign debts are also less,” Rajan told ANI.

According to the latest RBI data, India’s foreign exchange (forex) reserves stood at $571.56 billion for the week ended July 22.

At end-March 2022, India’s external debt stood at $620.7 billion, as per the latest RBI data. The external debt to GDP ratio declined to 19.9 per cent at end-March 2022 from 21.2 per cent at end-March 2021.

According to Rajan, low foreign debt and high foreign exchange reserves make Indian economy resilient. The countries like Sri Lanka and Pakistan are facing deep financial troubles due to very low forex reserves and mounting external debts.

Usable forex reserves of Sri Lanka recently dipped below $50 million forcing the country to suspend payments on foreign loans. The situation in Pakistan is equally bad. Pakistan’s forex reserves dipped by $754 million to $8.57 billion for the week ended 22nd July 2022, as per Pakistan central bank’s latest data.

On inflation, Rajan said the hike in policy rates by the Reserve Bank of India would help in reducing the inflationary pressure.

At present, there is inflation all over the world. RBI is increasing interest rate which will help in reducing inflation. Most inflation is in food and fuel. As we can see food inflation is coming down in world & will decrease in India also, he said.

The former RBI governor said fuel and food have been among the major factors for high inflation.

He said high food inflation has been due to seasonal factors and are likely to come down.

According to Rajan, the hike in policy rates by the RBI would help in bringing down core inflation.

India’s retail inflation eased to 7.01 per cent in June from 7.04 per cent in the previous month helped by softening crude and edible oil prices, according to data released by the National Statistical Office (NSO) recently.

The RBI has hiked policy repo rate by 90 basis points or 0.90 per cent since the beginning of the current financial year.

In its off-cycle monetary policy review announced in May the central bank hiked policy repo rate by 40 basis points or 0.40 per cent to 4.4 per cent. This was the first increase in policy repo rate in nearly two years.

The repo rate is the interest rate at which the RBI lends short-term funds to banks.

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Air India unveils enhanced loyalty program: Elevating customer rewards



Private carrier Air India on Wednesday launched a revamped loyalty programme with a simplified structure, offering more rewards and added.

On Wednesday, Air India, a private carrier, introduced a redesigned loyalty program featuring a simplified structure, providing enhanced rewards and benefits to its clientele. This overhaul, the first in over a decade, transforms the loyalty program, Flying Returns, from a traditional miles-based system to a more equitable spend-based model, as stated by Air India. Members of the programme will now be able to avail the benefits and collect points based on the new structure, starting Wednesday, it said without divulging the number of the existing members.

Some of the features of the revamped programme include no expiry of points for active members, no blackout dates, same tier privileges, collection and redemption across Star Alliance partner airlines worldwide and new customer-friendly digital interface to provide a one-stop platform for transactions, among others, it said.

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Apple devices prior to iOS/iPadOS 17.4.1 & macOS 13.6.6 at risk



India’s cybersecurity agency, CERT-In, has issued a warning regarding a significant vulnerability found in Apple products, particularly affecting iPhone and iPad devices running on iOS and iPadOS versions prior to 17.4.1. The agency has rated the severity of the vulnerability as “high,” indicating the potential risk posed by hackers exploiting this security flaw.

According to CERT-In, the vulnerability, categorized as a “remote code execution vulnerability,” allows hackers to gain remote access to the targeted device and execute arbitrary code. This vulnerability also extends to Apple Safari versions preceding 17.4.1, impacting macOS Monterey and macOS Ventura users, as well as MacBook users on macOS Ventura versions prior to 13.6.6, and macOS Sonoma versions before 14.4.1.

The vulnerability stems from an “out-of-bounds write issue in WebRTC and CoreMedia,” as reported by India Today. This implies that attackers could potentially lure unsuspecting users into visiting malicious links, enabling them to exploit the vulnerability remotely. Successful exploitation could result in hackers executing arbitrary code on the compromised device, posing serious security risks to users’ data and privacy.

To mitigate the risk posed by this vulnerability, CERT-In has recommended several security measures for Apple device users. These include keeping iOS and iPadOS devices updated with the latest software patches provided by Apple, prioritizing secure network connections over unsecured or public Wi-Fi networks, enabling two-factor authentication (2FA) for enhanced security, and regularly backing up data to safeguard against potential data loss resulting from security breaches or system failures. These proactive steps are crucial for users to protect their Apple devices and ensure their cybersecurity in an increasingly interconnected digital landscape.

In response to the vulnerability, Apple is expected to address the issue promptly by releasing security patches and software updates to mitigate the risk for its users. It’s imperative for Apple device owners to remain vigilant and implement the recommended security measures to safeguard their devices against potential cyber threats.

Cybersecurity threats continue to evolve, emphasizing the importance of maintaining robust security practices and staying informed about emerging vulnerabilities. Collaborative efforts between users, cybersecurity agencies like CERT-In, and technology companies are essential in effectively addressing and mitigating cybersecurity risks to protect individuals and organizations from potential harm.

By adhering to best practices for device security, including regular software updates, practicing safe internet browsing habits, and enabling additional security features like two-factor authentication, users can enhance the resilience of their devices and minimize the likelihood of falling victim to cyberattacks. With proactive measures in place, individuals can navigate the digital landscape with greater confidence and peace of mind.

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Maruti Suzuki dominates India, produces over 3 crore cars in record time



Suzuki Motor Corporation announced on Wednesday that its subsidiary, Maruti Suzuki India, has achieved a significant milestone by crossing the cumulative production mark of 3 crore units in India. This achievement positions India as the second country, after Japan, where Suzuki has accomplished this feat. Notably, India reached this milestone even faster than Japan, accomplishing it in just 40 years and 4 months since commencing production in December 1983. The production journey in India commenced with the iconic Maruti 800 under the joint venture between Suzuki and the Government of India.

Presently, Maruti Suzuki India Ltd operates manufacturing facilities in Gurugram, Manesar (Haryana), and Hansalpur (Gujarat), contributing to the production and rollout of vehicles. The company highlighted that over 2.68 crore vehicles have been manufactured at its Haryana-based facilities, while over 32 lakh vehicles were produced at Suzuki Motor Gujarat, a wholly-owned subsidiary of MSIL. The Maruti 800, renowned for revolutionizing personal mobility in the country, emerged as a significant contributor to this milestone, with over 29 lakh units produced. Other top-performing models include Alto 800, Alto K10, Swift, Wagon R, Dzire, Omni, Baleno, Eeco, Brezza, and Ertiga.

The company reiterated its commitment to the ‘Make in India’ initiative emphasizing its role in strengthening operations to cater to both domestic and global markets. Currently, Maruti Suzuki India contributes nearly 40% to the total vehicle exports from India. MSIL’s Managing Director & CEO, Hisashi Takeuchi, expressed the company’s dedication to meet customer demand and aspirations amidst India’s emergence as the world’s third-largest passenger vehicle market.

Takeuchi outlined plans to invest further and increase annual production capacity to 4 million units by FY 2030-31. To achieve this target, the company plans to establish two new greenfield manufacturing plants, each with a capacity of 10 lakh units, in Kharkhoda, Haryana, and Gujarat. Additionally, the company aims to expand its model range from the current 18 to 28 by FY 2030-31.

In January, Maruti Suzuki India announced an investment of Rs 35,000 crore to establish its second plant in Gujarat, reinforcing its commitment to expanding manufacturing capabilities. Earlier in 2022, the company had disclosed plans to invest Rs 18,000 crore in a new manufacturing unit at Kharkhoda. These investments underscore the company’s long-term vision and commitment to further enhancing its manufacturing capabilities in India.

Maruti Suzuki India’s investment plans align with its strategic vision to bolster its manufacturing footprint and meet the evolving demands of the automotive market. By expanding production capacities and diversifying its product range, the company aims to maintain its leadership position in the Indian automotive industry.

The significant milestone of crossing 3 crore units in cumulative production underscores the success of Maruti Suzuki India’s longstanding presence and deep-rooted commitment to the Indian market. It reflects the company’s resilience, innovation, and unwavering dedication to providing high-quality vehicles to customers across the nation.

As Maruti Suzuki India continues to forge ahead on its growth trajectory, the achievement of this milestone serves as a testament to its enduring legacy and paves the way for future milestones in the journey towards automotive excellence. With its robust manufacturing capabilities, innovative offerings, and customer-centric approach, Maruti Suzuki India remains poised to shape the future of mobility in India and beyond.

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PepsiCo India investing Rs 1,266 cr in Madhya Pradesh facility



PepsiCo India on Tuesday announced an investment of Rs 1,266 crore to build a new flavour manufacturing facility in Ujjain, Madhya Pradesh.

PepsiCo India has announced plans to invest Rs 1,266 crore in the construction of a new flavor manufacturing facility in Ujjain, Madhya Pradesh. This initiative aims to boost the company’s beverage production capacity in India. The Ujjain facility will be PepsiCo India’s second manufacturing site in the country, focusing on producing beverage flavors tailored specifically for the Indian market. Currently, PepsiCo operates a similar plant in Channo, Punjab.

Construction of the Ujjain plant is set to commence in 2024, with completion expected by the first quarter of 2026. PepsiCo’s beverage bottling operations in India primarily rely on Varun Beverages Ltd, one of the company’s largest bottlers globally.

Jagrut Kotecha, CEO of PepsiCo India & South Asia, emphasized the company’s commitment to the “Make in India” vision and sustainability. He stated that the new flavor manufacturing facility aims to contribute to the comprehensive development and welfare of the communities they serve.

This announcement aligns with PepsiCo’s broader strategy to enhance its production capabilities in India’s growing packaged food and beverage sector. In recent years, other multinational corporations like Nestle and Mondelez have also increased their investments in India in response to rising demand for their products. For example, Nestle inaugurated a food processing unit in Odisha worth Rs 894.10 crore last year, while Mondelez committed to investing Rs 4,000 crore in India over four years.

PepsiCo India has been actively investing in the country as well. Last year, the company announced a Rs 778 crore investment to establish a food manufacturing plant in Assam, expected to become operational in 2025. Additionally, in 2022, PepsiCo India announced a Rs 186 crore investment to expand its largest greenfield food manufacturing facility in Kosi Kalan, Mathura, Uttar Pradesh, which produces Lay’s potato chips.

In the fiscal year 2023, PepsiCo India reported a surge in profit to Rs 255 crore from Rs 27.8 crore in the previous year, according to filings with the Registrar of Companies. Revenue also increased by 28.5% year-on-year to Rs 8,128 crore, driven by robust sales of both its food and beverage products, including Lay’s chips and the Pepsi, Mirinda, and Tropicana beverage brands.

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Over 150,000 jobs created in Apple’s Indian ecosystem since Aug 2021, says report



In a recent development, it has been reported that Apple has significantly bolstered employment opportunities within India’s tech sector since its participation in the country’s production-linked incentive (PLI) scheme for smartphones in August 2021. According to insights from an Economic Times report, Apple’s direct employment within its ecosystem in India has surged to an estimated 150,000 individuals. Remarkably, the majority of these employed individuals are young first-time job seekers aged between 19 and 24 years, as highlighted by estimates from government officials and industry experts.

Moreover, the report indicates that an additional 300,000 individuals have found indirect employment opportunities through companies benefiting from the PLI scheme. Apple’s direct employment within India currently stands at 3,000 individuals, with its iOS application development alone supporting over 1 million jobs, as per officials familiar with the matter. This signifies a substantial contribution to the Indian job market over the past 32 months, with the Apple ecosystem estimated to have created over 400,000 jobs, both directly and indirectly.

Despite facing challenges in key markets such as the United States and China, Apple has strategically intensified its focus on India, which ranks as the world’s second-largest smartphone market. Since commencing iPhone manufacturing operations in India back in 2017, Apple has steadily expanded its local production activities in alignment with the PLI scheme. Collaborating with renowned suppliers such as Foxconn, Wistron, and Pegatron, Apple has played a pivotal role in enhancing manufacturing capabilities within the country.

According to the report, Apple has cultivated a robust supplier ecosystem across various states in India, generating over 77,000 direct jobs. Leading collaborators include Foxconn, which has created 41,000 jobs, followed by Wistron with 27,300 jobs and Pegatron with 9,200 jobs. Additionally, other significant contributors such as Tata Electronics and Salcomp Technologies have played integral roles in the production of essential iPhone components, resulting in the creation of over 70,000 direct jobs.

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India Inc’s credit boosted by Domestic demand, govt investment: ICRA



ICRA’s latest report highlighted India Inc’s credit profile in the 2023-24 fiscal year, citing domestic consumption demand and infrastructure.

ICRA, a leading rating agency, reported on Monday that India’s domestic consumption demand, government infrastructure spending, and robust balance sheets provided vital support to the credit profiles of businesses in the fiscal year 2023-24. Despite challenges such as increased borrowing costs, sluggish exports, and global uncertainties, the credit landscape remained relatively stable. Throughout the fiscal year, ICRA observed a trend of upgrading two entities for every one downgraded, extending the momentum initiated in the previous fiscal year.

Notably, sectors such as aviation, hospitality, automotive, and banking witnessed rating upgrades, primarily driven by favorable industry conditions. Despite facing numerous challenges including inflation, higher borrowing costs, adverse weather conditions, and global conflicts, Indian businesses navigated through the obstacles with resilience. The sustained domestic consumption demand, government investments in infrastructure, and strong financial positions of companies provided a buffer against external pressures.

K Ravichandran, ICRA’s Chief Rating Officer, highlighted that most rating upgrades were attributable to company-specific factors such as market expansion, improved cost structures, and strengthened balance sheets through equity infusion. ICRA expressed optimism about the hospitality sector’s prospects for 2024- 25 while identifying challenges in sectors like chemicals, diamonds, and bulk tea. Moreover, the fiscal health of businesses showed significant improvement, with instances of defaults declining to five in FY24 from 22 in FY23 and 42 in FY22.

Despite projecting a slightly lower GDP growth of 6.5% for the current fiscal year compared to the previous year’s 7.6%, ICRA remains positive about corporate resilience amid rising borrowing costs. The asset quality of banks and non-banking financial companies (NBFCs) reached a decade-long peak, with profitability and capitalization indicators expected to remain robust in the near term. Ravichandran emphasized the importance of regulatory measures taken by RBI and Sebi in strengthening the financial system and capital markets. However, uncertainties related to monsoon patterns and geopolitical dynamics could pose challenges moving forward.

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