Newspaper Summary 210126

 

Centre’s non-tax revenue tops ₹77,000 cr on CPSEs’ dividend, stake sale, InvIT earnings

Despite sluggish tax collection, the Finance Ministry may find relief in robust returns from Central Public Sector Enterprises’ (CPSEs) dividends and asset monetisation. The government has already secured over ₹77,000 crore against its ₹1.16 lakh crore target, with the majority coming from dividends.

Energy Sector Top Contributors The Budget set a specific target of ₹69,000 crore from ‘CPSE Dividends’ and ₹47,000 crore via ‘Miscellaneous Capital Receipts’. To date, dividend collections have reached ₹49,600 crore, or 72 per cent of the Budget Estimate (BE). Officials are optimistic that total receipts will not only exceed the BE but will likely surpass the ₹70,000 crore mark, with the oil, power, and coal sectors remaining the primary contributors to the dividend pool.

Significant Policy Shift The government’s 2024 policy marks a major departure from the previous framework, which required CPSEs to pay the higher of 30 per cent of Profit After Tax (PAT) or 30 per cent of the government’s equity. The new guidelines pivot towards net worth as a key benchmark, requiring the higher of 30 per cent of PAT or 4 per cent of net worth. However, a consistent 30 per cent PAT floor is maintained for financial sector CPSEs such as NBFCs.

UTI Stake Sale and InvIT Earnings CPSE stake sales are now categorized under the head ‘Miscellaneous Capital Receipts’ rather than using the word ‘disinvestment’. Stake sales and remittances from the Specified Undertaking of the Unit Trust of India (SUUTI) contributed over ₹8,700 crore. Additionally, approximately ₹18,800 crore in InvIT earnings brought the total mop-up for this category to ₹27,600 crore, representing 59 per cent of the BE.

(Author: Shishir Sinha, New Delhi)

BRICS reality: China, followed by India, dominates CBDC race

India, acting as BRICS Chair this year, may propose an mBridge-like system utilizing central bank digital currencies (CBDCs) to settle cross-border trade as a means to bypass the dollar. Current data indicates that China and India are far ahead of their other BRICS peers regarding the innovation and adoption of these digital currencies.

Global Leadership and Scale China remains the global leader in terms of scale, with CBDC transactions exceeding $980 billion by 2024. This was supported by the mBridge system, which allows for real-time cross-border settlements between participating central banks, including those from the UAE, Thailand, Saudi Arabia, and Hong Kong.

India has established the world’s second-largest CBDC pilot, surpassing $111.8 million in transaction value by March 2025. The value of India’s e₹ transactions has seen rapid growth, increasing over four times year-on-year from $26 million in 2024 to $112 million in 2025.

The India Model vs. China There is a distinct difference in strategy between the two leaders:

• China’s "digital yuan" has primarily been driven by wholesale and institutional use cases.
• India’s "e₹" pilot is driven mainly by retail demand, utilizing the nation’s extensive digital payments ecosystem.

This retail-led adoption is considered crucial for scaling cross-border use later, as it builds a broad user base and daily transaction familiarity.

BRICS Preparedness Other BRICS nations trail significantly behind the two leaders. Brazil and South Africa remain in the planning or early pilot stages. While Russia’s e-ruble transactions grew by 226 per cent year-on-year, they rose from a very small base of 17,500 in 2023 to only 57,000 in 2024. Consequently, any initial BRICS-level CBDC bridge would rely heavily on Chinese scale and Indian participation depth.

Benefits and Concerns CBDCs are digital versions of sovereign currency that combine the safety of cash with the efficiency of electronic payments. They offer several advantages over traditional bank transfers, including:

• Lower transaction costs.
• Improved settlement speed.
• Enhanced transparency.

However, they also prompt concerns regarding privacy, cybersecurity, and the evolving role of banks within a fully digital monetary system.

Global Trends Domestic and cross-border CBDC transactions are rising globally, even though the US has decided to stop all work on CBDCs under President Trump. In 2020, only 35 countries were considering a CBDC; by 2025, that number has jumped to 137 countries, signaling a major shift in how payments and trade may be settled in the future.

(Author: Sourashis Banerjee, Chennai)

Trump vows not to go back on Greenland

US President Donald Trump stated on Tuesday there is “no going back” on his objective to control Greenland, and he has refused to rule out the use of force to take the Arctic island. This push to wrest sovereignty from Denmark threatens to dismantle the NATO alliance that has served as the foundation for Western security for decades. Trump utilized social media to share mock-up AI images of himself holding a US flag in Greenland and maps depicting Canada and Greenland as US territory.

Trade War Tensions Following talks with NATO Secretary General Mark Rutte, Trump maintained that Greenland is imperative for national and world security. The tension has reignited a trade war with Europe, specifically involving Trump’s threat to impose 200 per cent tariffs on French wines and champagnes after President Emmanuel Macron questioned his motives. In response, the European Union has signaled it may hit back with tariffs on $109 billion of US imports or by deploying its anti-coercion instrument (ACI) to restrict trade in services, a sector where the US currently holds a surplus.

European Response Danish Prime Minister Mette Frederiksen told her parliament in Copenhagen that the “worst may still lie ahead”. European Commission President Ursula von der Leyen addressed the World Economic Forum in Davos, calling for the construction of a “new independent Europe” to capitalize on these permanent geopolitical shifts.

National Security Outlook US Treasury Secretary Scott Bessent suggested that a solution would eventually be found to ensure security for both regions, urging leaders to "sit back, relax" and avoid further escalation. He dismissed concerns regarding Europe potentially offloading US Treasuries as a "false narrative" that defies logic. Despite these reassurances, Trump’s administration continues to prepare plans for the “complete and total purchase” of the territory, which the President views as psychologically necessary for success.

(Source: Reuters Davos/Copenhagen)

RMZ Group to invest $10 b in GCC park, data centre in AP

RMZ Group has announced an investment of $10 billion to establish a global capability centre (GCC) park and a 1GW data centre in Andhra Pradesh over the next five to six years. The New Delhi-based company and the Andhra government made this announcement at the World Economic Forum Summit in Davos on Tuesday.

Infrastructure Development The company intends to develop large-scale, mixed-use digital and industrial infrastructure across the state. The proposed GCC Park will be located at Kapuluppada Phase-1 IT Park in Visakhapatnam, featuring a potential built-up area of 10 million sq ft across 50 acres to attract global enterprises. Additionally, the group plans to set up a hyperscale data centre cluster in Visakhapatnam with a targeted capacity of up to 1GW, requiring 500 to 700 acres in the region. These facilities will support next-generation digital and AI workloads with a focus on sustainability and green power integration.

Regional Impact and Job Creation RMZ Group also proposes to develop an industrial and logistics park at Tekulodu spanning 1,000 acres to promote manufacturing and warehousing in the Rayalaseema region. Collectively, these projects are expected to generate approximately one lakh jobs across the IT, data centre, industrial, and logistics sectors.

Broader Tech Collaborations During the summit, Andhra Pradesh Chief Minister N Chandrababu Naidu held further discussions with global tech leaders. He met with IBM Chairman and CEO Arvind Krishna to discuss a quantum computing centre in Amaravati, a quantum innovation centre, and training one million youth in AI skills. Additionally, Naidu met with Google Cloud CEO Thomas Kurian to fast-track the proposed Google AI Data Centre in Visakhapatnam.

(Source: Our Bureau, Hyderabad)

Tiger Global — corporate governance as farce

The decade following the Global Financial Crisis was defined by an unprecedented abundance of capital, creating a world where money was not just cheap, but impatient. In this environment, a new class of mega-funds emerged to capture "moonshot" growth, and Tiger Global stood out by behaving perfectly in tune with the market logic of its time. This period provides a lens to examine how capital abundance reshapes governance and how investors respond when speed becomes a primary virtue.

The Dilution of Governance When capital is plentiful, diligence becomes negotiable, leading to lighter term sheets and softened information rights. This "diligence-lite" investing was justified by a FOMO capital cascade, where governance safeguards were eventually viewed as friction rather than protection. For late-stage private companies, the role of directors shifted from stewardship to symbolic validation, where high valuations were taken as confirmation that all was well.

The Marquee Investor Fallacy When capital becomes impatient, governance becomes ornamental; it exists and meets, but it no longer bites. A significant myth of this era was the marquee investor fallacy, where the presence of blue-chip institutional investors was treated as a substitute for actual scrutiny. Independent directors often deferred to the reputation of global funds, causing substantive challenges to soften into consensus. The result was governance theatre, where board meetings were held and compliance boxes ticked, but the kind of challenge that forces recalibration was absent.

Private Markets and Delayed Accountability Under the Companies Act, 2013, directors hold personal duties of care and independent judgment that are not discharged by passive deference to an investor's pedigree. While public markets provide continuous feedback loops and quick valuation corrections, private markets allow problems to be buried under successive funding rounds at rising valuations. The law eventually enters the picture, as seen in the Supreme Court’s judgment in the Tiger Global case, which reaffirmed that transactional form yields to substance when sovereign taxing power is engaged. This mismatch is a structural feature of private markets, where the lesson is often one of delayed accountability.

India’s Ecosystem at a Juncture India’s growth has relied heavily on foreign institutional capital, which delivered speed but also imported governance norms from elsewhere. As domestic capital seeks to emulate global strategies, the risk is uncritical imitation. Replicating aggressive capital deployment without absorbing the lessons of governance failures would be costly and risks eroding trust in the startup-to-IPO pipeline.

The Virtue of Restraint Institutional investors cannot retreat behind the fiction that governance is solely a board’s problem. Their presence shapes behavior, and their duty includes asking inconvenient questions about controls, culture, and sustainability. Markets periodically rediscover the undervalued virtue of restraint, where the most disciplined act is to walk away or insist on terms that may cost a deal. The Tiger Global phase should be remembered as a lesson on the non-negotiable link between capital abundance and governance rigour. This choice determines whether capital remains merely powerful or becomes genuinely wise.

(Author: Rajasekhar VK, lawyer and former Judicial Member of the National Company Law Tribunal)

Time to sell India’s nuclear power plants

Now that the government has opened the nuclear power sector to private participation, the key question is how private investment can be pulled in quickly. The answer is simple and almost obvious: sell existing, operating nuclear power plants.

Current Inventory Government-owned Nuclear Power Corporation of India Ltd (NPCIL) currently operates 24 nuclear power reactors with a total capacity of 8,780 MW; another eight reactors, totalling 6,600 MW, are under construction. Of the operating reactors, 14 are under IAEA safeguards, while the remaining 10 are pressurised heavy water reactors (PHWRs) built using indigenous technology.

There is merit in putting the 14 safeguarded reactors and the eight under-construction units under the hammer. The unsafeguarded reactors are arguably of strategic and defence relevance and should remain with NPCIL.

The Benefits Selling these plants offers two immediate advantages: it strengthens the government’s asset monetisation programme and brings the private sector into the nuclear business without delay. In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced a second National Asset Monetisation Plan (2025–2030) with an ambitious target of raising ₹10 lakh crore.

The SHANTI Act, 2025, has provided a fresh catalogue of assets to monetise. Because building new plants is time-consuming, the private sector—particularly steel and cement companies under pressure to "green" their products—is likely to pay a premium for clean, reliable baseload power.

Valuation and Strategy According to rating agency ICRA, it currently costs ₹15 crore to set up a 700-MW plant and ₹35 crore for a 1,000-MW plant, while Small Modular Reactors (SMRs) will likely cost at least ₹30 crore. SPECULATIVE estimates suggest the government could raise at least ₹2 lakh crore through the sale of existing and under-construction assets. These plants could be individually corporatised and sold independently, similar to how the Ordnance Factory Board was split into seven companies.

Efficiency Improvements While NPCIL has operated its fleet reasonably efficiently with an average plant load factor (PLF) above 85 per cent, it operates under a cost-plus regime that results in relatively high tariffs. For example, the Rajasthan Atomic Power Project Unit 7 earns a tariff of ₹4.83 per kWh. With private operators, these "cosy arrangements" would likely end, leading to sharper cost control and better project execution. NPCIL’s own track record is mixed; for instance, Madras Atomic Power Station Unit 1 has been under prolonged shutdown since April 2018.

NPCIL’s Evolving Role The sector is clearly profitable; in 2024-25, NPCIL achieved a turnover of ₹20,350 crore and a net profit of ₹4,737 crore. Selling these plants does not mean the end of NPCIL. The SHANTI Act reserves heavy water production and uranium enrichment exclusively for the government. NPCIL will also continue to operate unsafeguarded reactors for strategic interests and serve as a consultant of choice for new private operators.

(Author: M Ramesh)

Only 9.5% of Indian households invest in markets: SEBI survey

India’s decade-long boom in capital markets has yet to translate into broad household participation, with only 9.5 per cent of households investing in securities market products, according to the SEBI Investor Survey 2025. This leaves over 30 crore households outside the formal market ecosystem. Of the 33.72 crore households in the country, 53.5 per cent are aware of securities market products but choose not to invest, while 37 per cent are completely unaware. Among those who are aware but do not currently invest, 22 per cent intend to do so within the next 12 months, suggesting a sizeable pipeline of potential new participants.

Urban Skew The survey highlights that market participation remains sharply skewed towards urban India. Urban household penetration stands at 15 per cent, which is more than double the 6 per cent penetration seen in rural areas. Within urban centers, the top nine metros report the highest participation at 23 per cent, followed by towns with populations between 10 lakh and 40 lakh at 16 per cent, and towns with 5-10 lakh residents at 14 per cent.

Intent vs. Participation While current participation is urban-centric, the intent to invest tells a different story. Nearly 50 per cent of all "intenders" come from rural India, whereas the top nine metros account for only 12 per cent of the total intender base. Among the states, Uttar Pradesh leads in investor intent at 11 per cent, followed by Maharashtra at 10 per cent and Tamil Nadu at 9 per cent.

Product Preferences Mutual funds and ETFs have emerged as the most popular entry products for households, as they are perceived as balanced risk-return options. Conversely, participation in futures and options remains marginal, with penetration sitting below 1 per cent.

Investor Awareness and Barriers Despite 63 per cent of households being aware of securities market products, only 8.5 per cent actually hold a demat account, indicating a significant awareness-participation gap. Engagement among current investors is also uneven; 60 per cent are active, while 40 per cent are dormant, having made no fresh investments in the past year. Gender disparity is also evident, with 11 per cent participation for men compared to 7 per cent for women. Key barriers to entry include complexity and a lack of confidence, with many potential investors citing they are still in a "learning stage".

(Author: Akshata Gorde, Mumbai)

SHADOW OIL FLEETS: WHO GAINS THE MOST

With the recent U.S. invasion of Venezuela and ongoing sanction threats against Iran, the global "shadow fleet" of oil tankers has returned to the forefront of international trade. This fleet, used primarily to transport oil from countries under Western sanctions, now accounts for an estimated 18.5% of total global tanker capacity. By the end of 2025, the size of this fleet had grown to approximately 3,313 vessels, a massive increase from just 97 vessels in 2022.

Major Buyers: India and China While Russia and Iran are the primary sanctioned sellers, India and China have emerged as the major buyers of this crude. Between October and December 2025, these two nations accounted for roughly a fifth of all imports conducted via the shadow fleet.

• China led with 34 million barrels (a 12.9% share).
• India followed with 23.8 million barrels (a 9.0% share).

China’s imports of Iranian oil often involve an opaque process where ships offload cargo to a second set of vessels in Southeast Asian waters before heading to Chinese ports.

Major Exporters: Russian Dominance The shadow fleet was largely initiated by Russia to evade global sanctions. In November 2025 alone, Russia accounted for 63.1 million barrels of the 299 million barrels shipped by the fleet. At the top end of the fleet (tankers over 27,000 tonnes), Russia holds a dominant 60% share of ownership. Other notable exporters utilizing these networks include the U.S., Turkey, Venezuela, Iraq, and Saudi Arabia.

Economic Impact and Operating Model In 2025, the shadow fleet moved approximately $100 billion worth of crude oil, representing 6-7% of global oil flows. The fleet operates as a "structural layer of global trade" rather than an anomaly, utilizing obfuscation tactics such as frequently changing ship names, switching flags, and turning off transponders to evade GPS detection. These vessels are typically much older than standard cargo ships and are frequently uninsured.

The India Connection Russia has provided 30-40% of India’s monthly oil imports over the past two years. In 2024, it was estimated that 9.5% of crude oil flows from Russia to India were moved using the shadow fleet. However, following U.S. tariffs in April 2025, India has noticeably reduced its reliance on Russian crude; Russia’s share of India’s imports fell from 45% in July 2024 to 32% by December 2025.

Outlook for 2026 Experts believe the shadow fleet is unlikely to shrink dramatically in 2026 because China remains the epicentre of demand and sanctions on major exporters like Russia and Iran are expected to persist. While a reduction might occur if sanctions on Venezuela are lifted, the fleet has become an operationally robust network supported by permissive jurisdictions and parallel service providers.

(Source: Kpler, S&P Global, HowIndiaLives.com)

Nostalgia is the vibe: Gen Z rewinds to reclaim yesteryear blockbusters

Films from the 1970s, ’80s and ’90s are finding a significant cultural afterlife among younger millennials and zillennials. This demographic is rediscovering yesteryear blockbusters specifically for their simple themes, timeless music, and the availability of restored streaming prints.

The Rediscovery Engine Social media acts as a powerful catalyst for this trend, with fan edits, reels, memes, and online film-appreciation threads sparking curiosity among those too young to have seen the films during their original release. Saurabh Srivastava, COO at media conglomerate Shemaroo Entertainment, notes that much of what Gen Z discovers today comes through "indirect familiarity".

Curated Time Travel Experts describe this behavior as "curated time travel," where Gen Z samples the past in a unique way. Devarshi Shah, chief growth officer at OML (Only Much Louder), explains that these viewers usually discover these cinematic worlds in fragments first—through a short clip or a reel—before building deeper interest.

Leisure vs. Binge Viewing The viewing habits for nostalgic content differ from modern releases:

• New content is "binge-driven": Viewers watch with high intent, finishing seasons quickly before moving to the next thing.
• Nostalgic content is "leisure-led": Viewers dip in and out, watching selectively or returning to familiar scenes and songs.

This relaxed engagement style helps build connections across generations and extends the time spent on streaming platforms.

Key Titles and Trends While classics like Pyaasa (1957), Half Ticket (1962), and Mother India (1957) are being rediscovered, the post-2000 Hindi blockbusters (such as Lagaan) remain the most-watched titles on platforms like Ultra Play. According to the Ultra Media OTT Insights Report 2025, this renewed interest in the past has not displaced newer favorites but has created a coexistence between old classics and modern hits.

(Author: Lata Jha, New Delhi)