Economy
Data recap: Travel drop, services PMI, fuel spike, and more
Summary
- News and developments from the week gone by, through numbers and charts.
Every Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you delve deeper into the stories reported by Mint in the week gone by. The purchasing managers’ index for the services sector showed a slowdown, the number of international passengers checking into India's airports reclaimed its pre-pandemic highs, and aviation turbine fuel turned costlier. The Centre approved funds for a new scheme to roll out 10,000 electric buses in 169 cities.
Industry report
The pace of growth in India’s services sector output slowed in August after a 13-year high in July, the purchasing managers’ index released by S&P Global showed. The PMI last month was 60.1, down from 62.3 in July. The sector has been in the expansionary zone—that is, has been recording a 50-plus reading—every month since August 2021, the longest such stretch in over a decade, Mint reported. Even though the overall score took a dip, Indian firms recorded one of the best sales performances last month despite inflation pressures, according to S&P Global.
Rough start
Listed on 21 August, Jio Financial Services has had its share of volatile performance at the bourses. The stock is the third-most valued among non-banking financial companies (NBFCs), but its price-to-book value—a measure of how it is valued with respect to its assets—is well below its peers in the sector, an analysis by howindialives.com showed. The stock was dropped from various indices on the National Stock Exchange on Thursday days after a similar action by the BSE.
Hydro goals
₹3.1 trillion: That is the potential value of investments proposed by contenders for pumped storage projects (PSPs) in the country, Mint reported. NHPC, Tata Power, Adani Green Energy and JSW Energy are among the companies that have proposed to build these PSPs, with capacity totalling up to 39 GW. In PSPs, excess energy is used to pump water to an upper reservoir when power demand is low, and water is released to turn a turbine when demand rises. Some companies, including Tata Power, Adani Green Energy, and JSW Energy, have already signed memorandums of understanding with certain states to ramp up PSP capacity.
Power boost
In a boost for the renewable energy sector, the government approved a ₹3,760-crore viability gap fund (VGF) for battery energy storage systems (BESS) on Wednesday. As part of the programme, the government will offer financial backing for up to 40% of the capital cost of BESS projects, amounting to 4,000 megawatt-hours (MWh) until 2030-31. The Union Cabinet said the VGF would be disbursed in five tranches linked with various stages of implementation of such projects. It also aims to reduce costs of storage, making it a viable option to manage peak power demand.
New-gen leaders
The Brics member countries have seen a consistent rise in their share of global economic growth, throughout the existence of the bloc. Meanwhile, the traditionally dominant advanced economies (G7) have experienced a decline. An analysis by Mint showed Brics' share in incremental global GDP in the decade ended 2022 was 42%, as against 27% for the G7 bloc (at constant 2015 dollars). Several countries expressed interest to join Brics recently, a reminder that the bloc represents the 21st century growth capitals of the world.
Funding buses
₹57,613 crore: That's the amount the Centre has approved for the PM-eBus Sewa scheme, which plans to roll out 10,000 electric buses in 169 cities. The funds will be released over a period of seven years based on the distance travelled by the buses, Mint reported. The Union Cabinet has approved the programme in a public-private partnership mode. The central government will provide ₹20,000 crore of the total amount. The states will run the bus services and pay bus operators, and the Centre will support the operations through subsidies.
Travel downturn?
In July, Indian airports served 5.78 million international passengers, marking a 1.3% increase compared to July 2019. This was the first time the figure crossed pre-pandemic levels, eight months after domestic air travel marked the same feat. However, the modest rebound in July failed to lift the overall figure for the fiscal year 2023-24 till now, a Mint analysis showed. During the April-July period, international passenger footfall totalled 22 million, down 2.5% since the same period of 2019. Domestic passenger numbers reached 101 million, up 11%.
Chart of the week: Fuel pinch
The surging prices of jet fuel have become a significant concern for the aviation industry. In Delhi, the price of aviation turbine fuel (ATF) spiked by 14.1% to ₹1.12 lakh per kilolitre in the beginning of September, as compared to ₹98,508.3 in August. Similar trends were observed in other major cities like Mumbai, Kolkata and Chennai as well.
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