The big stories of the week gone by – in charts
Capex by Indian companies slowed in the September quarter; travel plans are picking up; and more allocations planned for road safety.
Every week, Plain Facts publishes a compilation of data-based insights—complete with easy-to-read visual charts—to help you delve deeper into the stories reported by Mint. Capital expenditure by Indian companies slowed in the September quarter due to external factors hovering over the economy. Travel plans are picking up as Indians look to make the best of the fag end of the year. And, the government is planning to ramp up budget allocations for road safety.
Capex slowdown
Capital expenditure plans of Indian companies slowed in the September-ended quarter amid monetary policy tightening around the world and disruptions caused by the Russia-Ukraine war. Government and private companies announced capex projects worth ₹3.3 trillion during the quarter, a sequential decline of 25.8%, showed the latest data from CMIE. On a year-on-year basis, the decline was 58% in the just-ended quarter, led by a drop of 79% in the government sector.
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Why is the growth subdued in the services sector?
Seasonal uptick
Domestic air traffic rose by 2% in September, to 10.3 million passengers, up from 10.1 million in August. The start of the festival season in various parts of the country in the last week has resulted in an increase in air travel. Domestic air traffic is expected to increase further in October, according to analysts. The month has already begun on a high note, with daily domestic air traffic reaching 386,612 passengers on 1 October, 96.6% of pre-covid levels, Mint reported.
Backing out
$4.7 billion: That was the value of the deal to buy BillDesk that was called off by global investor Prosus NV just hours before the deadline, shocking shareholders and setting up a possible legal battle between the two parties, Mint reported. The deal was announced more than a year ago to create an Indian fintech giant that would handle payments worth $147 billion. Its subsidiary, PayU, said in a statement that the transaction was cancelled because certain preconditions for closing were not met.
Upbeat but slowing
The pace of manufacturing activity growth in India moderated to a three-month low in September, with the purchasing managers’ index falling to 55.1 from 56.2 in August. Despite the slowdown, the rate of expansion remained "historically high" reporting the 15th straight month of growth. The benchmark reading that separates expansion and contraction is 50. The services PMI has also come in above 50 for the 14th month in a row, despite slowing to a six-month low.
Safer roads?
The Ministry of Road Transport and Highways plans to raise the budget for road maintenance and repairs to about 10% of the ministry’s allocation from the coming financial year in an effort to solve the problem of potholes in the country, Mint reported, quoting unidentified officials. This will be an increase from the current 4% of the allocations for road maintenance and repairs. India fares the worst globally on the number of road accidents.
UPI records
₹11 trillion: That is the amount of UPI payments made in September, setting a new high ahead of the festive season. The figure was up 71% year-on-year. UPI has been the primary driver of growth in digital payments in India for the last few years. It accounted for more than 83% of all digital payments in India in the June quarter, according to a report by digital payments service provider Worldline.
Funding fall
Investments by venture capital (VC) and private equity (PE) firms dropped in the week ending 30 September to $257 million from $756 million investment made in the preceding week, VCCircle reported. The number of recorded deals also dropped to 23 from 32 last week. The week saw seven mergers and acquisitions and witnessed deal-making primarily in early-stage startups, with the value ranging from $100,000 to $4 million.
Chart of the Week: Out of reach
Apple began assembling iPhone 14 phones in India last week. Would this mean that an India-made iPhone could save costs for Indian consumers? Unlikely, feel analysts, as most of the handset’s components will still be imported, attracting customs duties. This, coupled with high taxes, may keep the iPhone’s price exorbitant in India.
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