1. Residential real estate prices in major Indian cities have gone nowhere since 2014. Except Hyderabad.
Some interesting facts about housing prices
According to real estate consultancy Knight Frank India, for every 100 basis points increase in interest rates, the EMI (equated monthly installment) on home loans goes up by 7.76%, while the affordability index (EMI/household income) reduces by 2.23%. Not to mention, construction costs have also shot up with the high inflation... the annualised rise in weighted average prices of builder projects in the Mumbai region was about 17% in the 2009 to 2014 period. Between 2014 and 2022, however, it is a negative 1%.
This stagnation has had a positive effect on housing affordability, defined in terms of ratio of EMI to household income, across Indian cities
The rising interest rates threaten to reverse the affordability trend.
2. Debashis Basu points to serious corporate governance issues in India's newly listed startup companies,
A few days ago, online food delivery platform Zomato acquired quick-commerce grocery delivery platform Blinkit (earlier Grofers) for Rs 4,447 crore (about $568 million) in an all-stock deal. The deal has raised a lot of eyebrows. For one, Zomato has just about Rs 1,250 crore on its balance sheet and is badly haemorrhaging, losing Rs 750 crore of cash from its operations in 2021-22 alone. Second, the acquisition comes at a time when Zomato’s own future is cloudy. Last year, it reported a loss of almost Rs 1,100 crore and under the current business model, there is no chance that it will make a profit soon. If so, its own existence is in doubt unless it can find new cash to carry on. Third, there are various conflicts of interest in the Blinkit deal. The chief executive officer (CEO) of Blinkit, Albinder Dhindsa, was the head of international operations in Zomato and is the spouse of Zomato’s cofounder (and former chief financial officer) Akriti Chopra. Zomato owned more than a 9 per cent equity in Blinkit. Zomato and CEO Deepinder Goyal was himself a 10 per cent shareholder of Blinkit until last year before selling it to Tiger Global. Finally, the valuation seems to be based on just two months of unaudited results when even a small-time valuer insists on audited results to even start valuation work.
3. India's impressive export growth rate may be deceptive,
India’s merchandise exports increased strongly to an all-time high of $421 billion in 2021-22... an annual growth of 44.7%, the highest ever since independence... Based on 25 major commodity groups that account for more than 90% of total exports, our calculations suggest that... while nominal exports grew by 25.5% year-on-year in April and May, following a surge of 44.7% in 2021-22, real exports rose by only 2.9% during the two month period, following a growth of 21.4% in 2021-22. Further, although nominal exports have posted a growth of 8.5% in fiscal years 2020-22 (during the covid period), compared with 8% in the pre-covid period (fiscal years 2017-19), real exports have grown slower at 1.2% compared with 3% in the corresponding period...It suggests that global inflation has played a very important role in pushing India’s nominal exports higher. This conclusion is also confirmed by the fact that while India’s exports have risen very strongly, its share in global exports moved up only slightly from 1.71% in 2019 to 1.77% in 2021. It means that higher prices have led to higher export numbers almost everywhere in the world... Our analysis suggests neither real exports nor real imports have grown at an exceptional rate in recent months or during the past three years, as inflation has played a major role in driving Indian trade figures to record highs.
4. Rana Faroohar points to the declining labour force participation of women in the US,
Indeed, female labour force participation in the US was 1.4 percentage points lower at the end of 2021 than it was before 2000. This puts America very much at odds with the rest of the rich world. During that same period, women’s labour force participation increased 5.3 percentage points in France, 5.4 points in Canada, 6.7 points in the UK, and a whopping 14.3 points in Japan... What’s going on? To sum it up in a word, childcare — or more particularly, a lack of decent, affordable childcare. Commerce department statistics show that mothers with children under the age of five at home generally have lower participation in work outside the home, but that’s particularly true for women with less education and lower pay.
5. MLA salaries across Indian states
And how it compares with percapita income of the state
7. India trucking industry facts of the day
According to a NITI Aayog report of 2021, commercial activities in India generate about 4.6 billion tonnes of freight annually, which results in over 3 trillion tonne-km of road transportation demand at a cost of ₹9.5 trillion. The logistics sector employs more than 20 million people. According to trucking industry estimates, there are nearly 15 million operational commercial vehicles across India... Eight out of 10 trucks that run in the country are owned by small fleet owners, who own just five trucks or less. A fragmented market implies that small fleet owners are unable to optimise driving patterns nor bring in required efficiencies. India is a long-distance trucking market, with 95% trucks moving intercity. But truck productivity is low: a truck travels 300 km a day on an average in India compared to the global average of 500-800 km a day. Much of that—40%—is dead miles. This is a measure of empty trucks out on the road, either because they have no shipment or are travelling empty to pick up freight, or are returning after delivering a consignment but have not found a return load.
In this fragmented market, aggregators like Blackbuck, Truckbhejo, and Raaho have an important role in matching customers wanting to transport goods by road with fleet owners who have ready capacity.
8. The Economist highlights vertical integration within Tesla through its "digger-to-dealership" control,
Tesla’s industrial system is at first glance an embrace of Silicon Valley’s “full stack”—internalising all aspects of production, and therefore all the profits... In an echo of Fordism, Tesla has struck recent deals with lithium miners and graphite suppliers, and last month confirmed a deal with Vale, a Brazilian mining giant, to purchase nickel... It plans to make more cells on its own at its three other gigafactories around the world... Tesla has also pulled other bits of the powertrain in-house. It makes its own motors and a lot of its own electronics, giving it more control over costs as well as over the technology... Tesla designs its own semiconductors and has closer links than other carmakers with those who manufacture them. That has helped it weather the global chip shortage better than rivals. Tesla’s software engineers have created a centralised computing architecture to run on those chips, ensuring smooth integration with the four-wheeled hardware. Mr Musk has even ditched the dealership-based sales model, instead opening his own swanky Tesla stores... This reverses decades of outsourcing to big suppliers such as Bosch, Continental and Denso in order to concentrate on managing supply chains, integrating separate parts, design and marketing... Mercedes-Benz estimates its value-added split at 70-30 in favour of suppliers. Established car firms now want their ratios to more closely resemble Tesla’s, which Philippe Houchois of Jefferies, an investment bank, puts at 50-50 and rising in favour of in-house.
9. The student learning loss due to school closures during the pandemic may well turn out to be its longest lasting legacy. It's impact is already very bad.
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