Around the market.

Ram Mandir Inauguration: Demand for firecrackers increased

Ayodhya is all set for the inauguration ceremony of the Ram temple on January 22. There is tremendous enthusiasm for this across the country and the demand for fireworks to celebrate it has increased. Industry sources say traders in Tamil Nadu's Sivakashi city are seeing a 20 to 30 per cent increase in demand from North India alone compared to last year. 90 percent of the crackers in the country are made in Sivakashi. However, despite the huge demand, manufacturers are not confident that the sales of crackers will be very high as adverse weather has affected their production in the last few days. Due to the recent rains and cyclonic storms in Tamil Nadu, not enough firecrackers have been produced. There was no production from Diwali to Pongal as the conditions were very bad due to incessant rains. Firecracker business in Sivakashi provides direct employment to about 3 lakh people and indirect employment to 5 lakh people.

Negotiations with Brazil for Technical Partnership on Ethanol

India is in talks with Brazil for a technical partnership to increase the use of ethanol amid efforts to promote alternative fuels to reduce carbon emissions. Brazil has been using ethanol in vehicles for a long time. There is a need to create awareness about alternative fuels to replace fossil fuels. Apart from sugarcane, ethanol can also be produced using broken rice and corn. Sustainable aviation fuel is also being emphasized and tested in flight. The biggest challenge facing us today is which alternative fuel we should adopt and how to change the mindset towards it. Brazil and India have been conducting technical talks on ethanol for three years. India will seek to further develop this technology partnership and seek new partners. So that bio-fuel ethanol can be used on a large scale. Brazil is ready to share its technology and its experience with India.

AI needs to be used properly

Rapid advances in artificial intelligence (AI) are making false propaganda look more credible, Swiss President Viola Emhard told the annual meeting of the World Economic Forum. AI, if used correctly, can help build trust. Switzerland is particularly committed to promoting the global deployment of artificial intelligence. Those who base their policies on lies and ideologies. Good policies are based on verified facts and take into account scientific findings. The theme of this year's annual meeting, 'Rebuilding Trust', is not just a phrase, but it clearly reflects that mutual trust in the global community is at a low level.

Increase employment through service sector

The service sector accounted for almost half of the total jobs created by the industry in FY 2023. This includes information technology, banking and finance sectors. At the same time, the pace of job creation in manufacturing, infrastructure and consumption sectors has been slow. According to a study, companies and firms in India created 81.2 lakh new jobs, of which the service sector accounted for 39.1 lakh (48.2 percent). 20.6 lakh jobs have been created in the IT sector, 12.5 lakh in banking and 5.75 lakh in the finance sector. In this study, data from 19 to 23 of 3,000 private companies was taken.

Expect a change in the Reserve Bank's stance on policy rates

Bond market participants are expecting a change in the Reserve Bank of India's stance on policy rates in February. Given the frequent Variable Rate Repo (VRR) auctions, the market expects the RBI to revert to its accommodative stance and adopt a neutral stance. The central bank is taking an all-inclusive stance on cash, which has given the market hope. The Reserve Bank wants to adjust liquidity and bring it all to neutral or zero. As the Reserve Bank said in the last policy statement, it doesn't look like they will be hiking any time soon. Jayant Verma, an external member of the Monetary Policy Committee, also favored a neutral stance in the December policy review. Dealers said the market continued to take strategic long positions in the government bond market.

Consider imposing income tax on rich farmers

Reserve Bank of India's Monetary Policy Committee member Ashima Goyal has said that after taking care of poor farmers by sending money into their accounts, the government may consider imposing income tax on rich farmers to make the tax structure fairer. The transfer of funds from the government to the farmers is like a negative income tax. Additionally, a positive income tax could be implemented for rich farmers as part of a move towards a data-rich system with lower tax rates and minimal exemptions.

Long-term debt funds will benefit if rates fall

Last year, debt funds underperformed equity funds and gold, but many long-term debt funds could post double-digit returns in 2024 if policy rates are cut as expected. According to experts, there are many reasons for good returns in these funds. Rate reduction is the biggest reason for this. Market experts believe that there is a strong possibility of a rate cut this year. Core inflation has already fallen to around four percent. If the monsoon is good, consumer price index-based inflation may also come close to four percent. In that case, the Reserve Bank can cut rates at least twice. The Reserve Bank's decision will also depend on the actions of central banks around the world. If inflation continues to decline, there is every possibility of a rate cut in mid-2024. If rates fall, bond prices will rise, leading to better returns for debt funds. Indian government bonds are now included in global bond indices. This will cause money from foreign funds to flow into the Indian market and bond prices will increase.