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Bihar Chief Minister and Janata Dal (United) supremo Nitish Kumar ended his party's alliance with Bharatiya Janata Party in Bihar. Nitish Kumar has sought an appointment with Governor Phagu Chauhan at 4 pm, sources close to the development said.

JD(U) sources said Nitish Kumar is unlikely to resign from the chief ministership and may simply seek to replace BJP ministers with those of other parties, which may support his party in continuing the government.

A parallel meeting of the Rashtriya Janata Dal (RJD) legislators convened by party leader Tejashwi Yadav at his mother Rabri Devi's Circular Road bungalow, a stone's throw from the CM's residence, is likely to endorse joining the JD(U)-led coalition.

Earlier, the Congress and Left parties handed over the lists of their legislators to Tejashwi Yadav.

Mandan Mohan Singh, the state president of Congress said: "We will support Nitish Kumar if he leaves the BJP and forms a new government with the help of Mahagathbandhan. We have also given the list of all 19 MLAs of our party to RJD leader Tejashwi Yadav."

Mahboob Alam, the MLA of CPI (ML) said: "We have also given the list to Tejashwi Yadav. We will uproot the BJP from power. We are giving support to Nitish Kumar for the formation of a new government."

Currently, BJP holds 77 seats in the Bihar Assembly. JD(U) holds 45, the Congress 19, the Left led by CPIML(L) has 16 and the RJD 79.

Rising internal consumption and hoarding have kept Indian black pepper prices at a higher level, encouraging illegal imports.

Black pepper prices touched Rs 500 per kg in November last year after a gap of several years, following the easing of COVID-19 restrictions and a rebound in demand. It reached a high of Rs 532 per kg on November 24 on fears of a lower crop.

But production this year, estimated to be around 65,000 tonnes, is said to be normal. The arrival of a new pepper crop, however, has not pushed down prices, which are currently hovering in the range of Rs 485-505 per kg.

“There is good demand in the domestic markets as restaurants have opened. Indian production has not kept pace with the mounting domestic consumption,” said Cherian Xavier, chairman of All India Spices Exporters Forum.

Higher black pepper prices in India have spurred illegal imports. While Indian variety rules around Rs 500 per kg, pepper from other major producing countries like Vietnam, Brazil, Indonesia, and Sri Lanka hover in the range of Rs 300-400 per kg.

“Large quantities of Vietnamese and Brazilian pepper have reached the consuming markets of Delhi, Mumbai, Kanpur, Ahmedabad, and Indore, after being misdeclared as scrap iron, scrap plastic waste and paper waste as well as waste clothes, and are being sold in the domestic market. These lots evade GST and import duty of above 50 percent from Vietnam and 70 percent duty from Brazil,’’ said Kishor Shamji, pepper exporter and Kerala coordinator of Indian Spice Traders, Growers and Planters Consortium.

Pepper is also being imported from Sri Lanka by circumventing the import price restrictions through Chennai, Nava Sheva and Mundra ports and inland container depots in Kanpur and Ludhiana. Despite an import duty of 8 percent, social welfare cess of 2 percent and minimum import duty charge of Rs 500 per kg, imports from Sri Lanka touched 513 tonnes in June this year, he said.

While local Sri Lankan pepper prices are at $5,300 per tonne, Indian prices are around $6,700 per tonne.

Vietnamese and Brazilian pepper are also being smuggled from Myanmar to India. These pepper consignments are being sold in the North Indian market, traders pointed out.

But the arrival of Indian-origin pepper to the local market has thinned in the last few weeks though the harvest season is over. “Farmers could be holding stock in anticipation of higher prices,’’ said Jojan Malayil, CEO of Bafna Enterprises.

Demand is expected to go up with the onset of festival season in India by October.

Percentage of Indian pepper in exports down

In the last few years, the percentage of Indian pepper in exports has come down sharply as prices are higher in the international market. “Nearly 95 percent of the black pepper exports from India is imported pepper after value-addition,” Malayil said.

Indian black pepper exports touched 21,882 tonnes in FY22, reaching above 20,000 tonnes after five years. Higher shipments were made possible by the slump in pepper prices in Vietnam, the biggest producer, in the first few months of last year. But in 2022, a slightly lower crop in Vietnam has pushed up prices.

“Higher prices of imported pepper with a huge increase in freight costs have made Indian black pepper export uncompetitive,’’ Xavier said. As a result, shipments have been sluggish in the last few weeks.

Shamji said it must be specifically mentioned in each consignment that imported pepper is being re-exported to make it clear to the authorities of the importing country that it is not Indian pepper. The matter was represented to the Commerce Minister during his recent visit to the Spices Board, he said.

Nedspice, a Netherlands-based spice processing and distribution company with branches worldwide, including in Vietnam and India, pegs the global pepper production at 509,000 tonnes in 2022. But with carry-over stock, it comes to 576,000 tonnes above the global demand of 520,000 tonnes.

Lower crop in Vietnam due to unfavourable weather is balanced with good crop in other origins. It further said that the potential slowing of demand on account of sufficient stocks in consuming countries could also offset lower crop in Vietnam. Consequently, the market is fragile and price volatility can be expected, it said.

According to Nedspice, Vietnam pepper production will be down by over 6 percent to 188,000 tonnes while that of Brazil, the second-biggest producer, will be up by 10 percent to 98,000 tonnes this year, while pepper output in India, the next largest producer, will increase marginally to 68,000 tonnes.

The government is not considering setting up 8th Pay Commission for central government employees, Minister of State for Finance Pankaj Chaudhary informed Lok Sabha on Monday.

"No such proposal is under consideration with the government for constitution of 8th Central Pay Commission for the central government employees," Chaudhary said in a written reply to a question if the government proposes to ensure timely constitution of Pay Commission for central government employees so that it could be implemented on January 1, 2026.

ln order to compensate central government employees for erosion in the real value of their salaries on account of inflation, dearness allowances (DA) is paid to them and the rate of DA is revised periodically every six months on the basis of rate of inflation as per All lndia Consumer Price lndex for Industrial Workers released by Labour Bureau under the Ministry of Labour & Employment, he said.

The government had set up 7th Pay Commission in February, 2014. The recommendations of the panel were effective from January 1, 2016.

What is a Pay Commission?

A Pay Commission is a body set up by the government to recommend changes to the salary structure of government employees. It was first constituted in January 1946 and submitted its report in May 1947, under the chairmanship of Srinivasa Varadachariar.

The Commission is usually given 18 months to submit its recommendations. It reviews and makes suggestions for the pay structure of civil as well as military divisions of the government of India. It is headquartered in New Delhi.

The recommendations are based on several factors including inflation. The dearness allowance (DA), fitment factor as well as basic pay are discussed in the commission's report.

In 2013, then finance minister P Chidambaram announced the setting up of the 7th Pay Commission. Justice AK Mathur was chosen to head the commission.

On June 29, 2016, the Narendra Moda government accepted the recommendations of the commission to hike the salary of its employees by 14 per cent.

Further on November 9, 2017, the maximum limit for borrowing for the purpose of buying a house was raised to Rs 2.5 million from Rs 7.5 lakh earlier, for government employees. The rate of interest for the borrowed amount was set at 8.5 per cent.

For armed forces, the 7th Pay Commission had recommended separate pay matrices and allowance systems for armed forces and civil defence forces.

The government has not abandoned the target of increasing its non-fossil energy capacity to 500 gigawatts (GW) by 2030 while revising its commitment to the United Nations Framework Convention on Climate Change (UNFCCC), and the Energy Conservation (Amendment) Bill 2022 aims to help achieve these goals, Power Minister RK Singh said in the parliament. 

The Energy Conservation (Amendment) Bill 2022 was passed by the Lok Sabha on August 8. The bill aims to boost clean energy and help in achieving India’s commitments towards climate change.

On August 3, the Union Cabinet chaired by Prime Minister Narendra Modi approved India’s updated Nationally Determined Contribution (NDC) to be communicated to UNFCCC. According to the updated NDC, India now aims to reduce the emission intensity of its GDP by 45 percent by 2030 from 2005 levels, and source 50 percent of electricity from non-fossil sources. The NDC did not mention the commitment of adding 500 GW in absolute terms, which made the opposition question if the target was dropped. 

“The Prime Minister had made a pledge that by 2030, 500GW of non-fossil fuel-based capacity will be added. We stand by the commitment,” Singh said.

India’s non-fossil fuel-based capacity stands at 167 GW, which accounts for 41 percent of its total installed capacity.

Telecom major Bharti Airtel on Monday reported 466% surge in consolidated net profit (attributable to owners of the parent) at Rs 1,607 crore for the quarter ending June 30, 2022, boosted by subscriber additions. It reported net profit of Rs 284 crore in the year-ago period.

The company's consolidated revenue from operations rose 21% to Rs 32,805 crore in Q1FY23 as compared to Rs 27,064 crore in Q1FY22. Bharti Airtel's mobile services revenue in India grew 27% year-on-year to Rs 18,220 crore for the first quarter from Rs 14,305.6 crore.

The company's average revenue per user (ARPU) increased to Rs 183 in Q1FY23 as against Rs 146 in Q1FY22. ARPU of rivals Reliance Jio and Vodafone Idea for the same period was Rs 175.7 and Rs 128, respectively.

The company said in November, when it announced tariff hikes, that mobile ARPU needed to be at Rs 200 and ultimately at Rs 300, for a financially healthy business model.

On Monday, the company's scrip on BSE closed nearly flat at Rs 704.35.

Gopal Vittal, MD and CEO, said: “This has been another solid quarter. We continue to deliver strong and sustained growth at 4.5% sequentially. EBITDA margins are now at 50.6%. Our enterprise and homes business has strong momentum and delivered strong double digit growth, improving the diversity of the overall portfolio. Airtel’s strategy of winning with quality customers continues to yield good results with an industry beating ARPU at Rs 183.

"As India gets ready to launch 5G, we are well positioned to raise the bar on innovation. We are also confident of meeting the emerging needs of discerning customers looking for speed, coverage and latency. Our astute spectrum strategy over the last few years as we bolstered mid band spectrum is designed to deliver the best experience at the lowest total cost of ownership.”

The firm said its 4G customers rose by 20.8 million on an annual basis and by 4.5 million on a sequential basis.

Mobile data consumption rose by 16.6% YoY, consumption per mobile data customer at 19.5 GB per month, said Airtel.

"Airtel to lead India’s 5G revolution with acquisition of ideal spectrum bank at least cost for best 5Gexperience and 100x capacity enhancement; procured 19,867.8 MHz spectrum for Rs 43,040 crore in the recently concluded 5G spectrum," the company said in a stock exchange filing.

The company has been raising money to fund its digital ambitions, including developing home broadband, data centres, cloud adoption as it prepares to launch its next-generation 5G services in the country.

Indians are more optimistic than ever on the prospects of their country’s economic growth than they were six months ago but they are far from opening up their purses and spending as they did before the pandemic.

A look at the Reserve Bank of India’s consumer sentiment survey shows that optimism about the current situation as well as future outlook has increased over the past six months. That said, if we scratch the surface and look into sub-categories that form the headline indices, this optimism gives way to caution. Consumers may be more hopeful about employment and incomes but they are not ready yet to indulge in discretionary spending. That means India is yet to get her spenders that would boost the economic growth through demand. The following five charts lay out the good and the non-so-good parts of consumer sentiment:

The current situation index is now at its highest level since March 2020 when the COVID-19 pandemic hit. The future expectations index though is still below pre-pandemic levels but it is getting there. Economic growth has recovered smartly over the past one year from the impact of the pandemic. In fact, most high frequency indicators are well above their pre-pandemic levels. Consumption demand has revived, visible through the rebound in consumer durables, services and even personal loans of banks. This has led to consumers being hopeful about future employment prospects as well.

The government on August 8 introduced the Electricity (Amendment) Bill, 2022 in the Lok Sabha amid protests by opposition parties.

Power minister RK Singh said the bill would be sent to a standing committee for detailed discussion. Moneycontrol has exclusively reported on August 5 that the government is likely to introduce the much-awaited Electricity (Amendment) Bill 2022, which aims to streamline the payment framework, empower regulators and encourage competition in the sector, this week.

The opposition parties protested against the Bill, citing that it will allow several power companies to distribute powers in any license area. They also said that it was against the interest of farmers.

Responding to the opposition, Minister Singh said that the bill will be discussed in detail in the standing committee. He also said that the bill makes no provision to stop electricity subsidies for farmers. 

The Bill proposes changes to allow operation of more than one power distributor in a supply area, which will give consumers the option to choose electricity suppliers and encourage competition. The minister said that this was first proposed in the 2003 bill.

The proposed amendments are to the Electricity Act, 2003 which was enacted to consolidate the laws relating to the generation, transmission, distribution, trading, and use of electricity and generally for taking measures conducive to the development of electricity.

“The amendments to the Act are also necessary in view of the importance of green energy for our environment in the context of global climate change concerns and our international commitments to increase the share of renewable energy. Further, it has become necessary to strengthen the regulatory mechanism, an adjudicatory mechanism in the Act and to bring administrative reforms through improved corporate governance of distribution licensees," the government said.

The Bill proposes that power distribution licensees will be allowed to use the networks of other licensees. This will boost competition as it will help new distributors to overcome infrastructure hurdles and also improve the efficiency of the power distribution network. 

The government also hopes to insert a new section that will enable the management of power purchase and cross-subsidy in case of multiple distribution licensees in the same area of supply.

The Bill also proposes to enable regulators to fix a minimum tariff ceiling to discourage unhealthy pricing wars among distributors and a maximum ceiling to ensure consumers are protected against price increase shock.

Among other amendments, the government is also making changes to strengthen the functioning of the National Load Despatch Centre for ensuring the safety and security of the grid and for the economic and efficient operation of the power system in the country.

Meanwhile, All  India Power Engineers Federation (AIPEF) said that lakhs of electricity employees and engineers from across the country have joined hands to observe a protest demonstration against the Electricity (Amendment) Bill 2022. The association is against the privatization of power distribution and believes that the bill will negatively impact the farmers and also lead to a rise in power bills for households. The association said in a statement that power sector employees and  engineers exercised their democratic right by boycotting their official duties and holding gate meetings in all the union territories and states like Jammu and Kashmir, Haryana, Uttar Pradesh, Maharashtra, Gujarat, Assam, Telangana, Tamil Nadu, Andhra Pradesh, Kerala, West Bengal, Karnataka, Chhattisgarh, Ladakh, among others. 

India’s plan to expand its corporate bond market faces an unexpected impediment because the regulator is considering tightening control of trading platforms that allow investments in company debt in just a few clicks.

While the proposed framework is designed to protect investors and is therefore being welcomed by some, a few of the proposals by the Securities and Exchange Board of India could actually prove counterproductive and hurt liquidity, according to experts who spoke to Bloomberg. That’s because the sale of unlisted debt would be banned, platforms would be forbidden to sell privately placed corporate notes on to non-institutional investors soon after acquiring them, and trades would need to be settled via routes that today are not commonly used.

Market participants have until Aug. 12. to give officials their input on the matter.

“The trade off is very often between creating depth in the market and ensuring investor protection,” said Shilpa Mankar Ahluwalia, a partner at law firm Shardul Amarchand Mangaldas & Co. “The regulator ideally needs to strike a fine balance between investor protection and innovation, also recognizing that online bond platforms have the potential to widen access and deepen the corporate bond market.”

Opening up India’s corporate bond market is an important part of Prime Minister Narendra Modi’s pledge to almost double the size of the economy to $5 trillion by 2025. As it stands, the local-currency bond market offers easier access only for the top-rated issuers, with big local banks and brokers doing deals based on long-standing relationships.

Bond platforms, either start-ups or businesses backed by banks or brokers, have boomed in India with more than a dozen financial technology platforms emerging in the last three years, competing for a share of the $1.9 trillion market for time deposits. They mainly target individual investors with a promise of much higher interest rates by putting money into company debt, and allow for minimum investments that can be as low as 10,000 rupees ($126).

Easy access through an interface similar to that of online shopping websites and the prospect of higher returns can be appealing to novices. The platforms, though tiny, have grown more than six times over two years with debt mainly sold to non-institutional investors, Sebi said in a consultation paper last month.

Six-Month Lock-in

• Sebi proposes to bar platforms from selling privately placed corporate bonds to non-institutional investors within six months of allotment
• The proposal comes after the regulator found that in some cases the entire privately placed issue was sold to more than 200 investors within 15 days of allotment, making it more akin to a public issue
• “The regulator is concerned about private placements becoming shadow public offerings via distribution on online platforms given that the rules, compliance and disclosure requirements for a public offering are much more stringent and detailed,” said Shardul Amarchand’s Ahluwalia
• But Ankit Gupta, who founded BondsIndia.com, said institutions would be required to maintain a huge balance sheet to buy and hold notes for six months
• Because of this, Gupta said there’s a risk of platforms’ ability to participate in primary issuance will be limited, thereby affecting liquidity. He will reach out to the regulator for more clarity.

Trade Settlement

• Sebi has proposed transactions on these platforms be settled either through the debt segments of exchanges or through request for quote platforms
• The regulator found that in some cases these platforms accepted funds directly from the client, bypassing procedural norms
• But market participants argue the two routes suggested by Sebi aren’t regularly used by bigger participants to settle over-the-counter trades
• “In cases where platforms are settling trades through clearing corporation, the party that buys bonds credits money in clearing corporation’s account directly and the seller supplies the debt securities,” said Aditi Mittal, co-founder at IndiaBonds.com and director at one of India’s leading broker A.K. Capital Services Ltd., adding only if the deal matches, respective accounts are debited and credited
• “This system is working beautifully as nothing is paid into the platforms’ account. Hence, the concern regarding tweaking the settlement structure needs to be discussed and deliberated,” she said.