Newspaper Summary 110826

 

Household savings move to cash, deposits as equity flows decline

By Yashaswani Chauhan, New Delhi

Households in India are shifting towards safer and more liquid assets. In FY26, investments in bank deposits stood at ₹15.3 lakh crore, representing a 22 per cent increase from the previous year, according to a businessline analysis of the RBI monthly bulletin.

Currency holdings have also nearly doubled to ₹4.15 lakh crore, while equity flows turned negative. From an inflow of ₹40,353 crore in FY25, the equity asset class saw an outflow of ₹79,890 crore in the year ended March 2026. Ramkumar Subramanian, Partner at Grant Thornton Bharat, noted that uncertainty regarding the crisis in West Asia has spooked investors, leading to uncertainty about investment returns.

A STOPGAP CHOICE

Vikram Chhabra, Senior Economist at 360 ONE Asset, suggested that the rise in deposits and cash may not be a "structural shift" in preferences, but rather a temporary parking place for savings.

Over a longer period, the changing composition of household savings becomes more evident:

• Bank Deposits: Share in household financial asset flows increased to 36.6 per cent in FY26 from 32.2 per cent four years ago.
• Life Insurance: Share fell to 13.4 per cent from 18.8 per cent in the same period. Flows declined 10.9 per cent to ₹5.62 lakh crore in FY26.
• Provident and Pension Funds: Remained a major component, accounting for 20.7 per cent of financial asset flows in FY26 (compared to 21.3 per cent in FY22).

Subramanian attributed the decline in life insurance to subdued returns amid falling interest rates and the nature of these products as "pure risk" and "push" products.

RESILIENT MFS

While direct equity flows were negative, mutual funds remained resilient. Flows into mutual funds rose marginally to ₹5.47 lakh crore in FY26. The asset class's share in household financial asset flows more than doubled to 13.1 per cent in the four years leading to March 2026.

Chhabra credited this resilience partly to systematic investment plans (SIPs), which saw contributions rise to ₹3.5 lakh crore in FY26 from ₹2.9 lakh crore the previous year. He noted that unlike mutual funds, direct equity investments are more cyclical and sentiment-driven.

No bar on airport operators owning airlines, clarifies govt

CONTRACT CLAUSES. Says PPP airport agreements can prevent such cross-ownership. POLICY CLARITY. The clarification assumes significance amid controversy over a purported communication from the Adani Group seeking permission to enter the airline business.

By Rohit Vaid, New Delhi

The government on Monday clarified in Parliament that there is no policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines, but acknowledged that contractual restrictions in some public-private partnership (PPP) airport agreements could prevent such cross-ownership.

The clarification assumes significance amid the controversy over a purported communication from the Adani Group seeking permission to enter the airline business, which TMC MP Mahua Moitra circulated on Monday. The Adani Group had earlier denied seeking such permission.

Replying to a Rajya Sabha question specifically on cross-ownership of airports and airlines, Minister of State for Civil Aviation Murlidhar Mohol said there was no government policy barring airport operators from owning or operating a scheduled airline. However, he noted, “The extant contractual agreements relating to some airports under public private partnership (PPP) contain certain restrictions” on scheduled airlines and their group entities or associates holding equity in the airport concessionaire.

NO WAIVER REQUEST

More significantly, the government disclosed that the Airports Authority of India (AAI) had received a request seeking waiver of the relevant contractual provision. “The matter has not yet been examined by the Ministry of Civil Aviation,” the Minister told Parliament.

Last month, businessline had reported that the Centre was working on a package of sweeping aviation reforms aimed at easing entry into the airline sector. Among the various steps outlined to encourage private participation in setting up new airlines was lifting restrictions under existing concession agreements, such as the one entered into by Adani Airports and GMR Airports that constrain airport operators from operating airlines. The government’s response in Parliament on Monday did not identify the airport operator that had sought the waiver.

The parliamentary question, raised by CPI(M) MP John Brittas, asked whether the government was considering relaxing the policy restricting major airport operators from holding substantial equity in or operating scheduled airlines. It also sought details on requests for such relaxation and whether the government had assessed the implications for competition, conflicts of interest, slot allocation, airport charges, ground handling, and fair access to airport infrastructure.

BAN VS RESTRICTION

The government’s answer effectively drew a distinction between a government-imposed prohibition and restrictions embedded in individual airport concession agreements. It said the former does not exist, while acknowledging that the latter did, and that at least one request for a waiver had reached the AAI.

How a Mumbai start-up cracked missile cooling tech

The lean manufacturing success story opens a high-value defence export market

By Dalip Singh, New Delhi

A homegrown 10-gram cooling technology for missile seekers has broken a tightly guarded Western monopoly on such products. The journey to this lean manufacturing success story began with a chance meeting between IIT-Bombay alumnus Dr Pravin Salinkar, Co-owner of Techno Defence Pvt Ltd, and a lab director from the Defence Research and Development Organisation (DRDO) sometime between 2017 and 2018. It led to him accepting a critical defence manufacturing challenge.

CRYOGENIC BREAKTHROUGH

Engineers and technicians, mostly women, successfully built the strategic missile-cooling capability, known as the Joule-Thomson (JT) Cooler. It is a compact, miniature, lightweight, and vibration-free device that rapidly chills infrared (IR) sensors and focal plane arrays (FPAs) of missiles down to cryogenic temperatures around -196 °C.

Salinkar, 75, received funding under the Technology Development Fund (TDF) scheme of the DRDO in 2020 for the indigenous design and development of the device. This cooling is necessary because at ambient temperature, the infrared sensor or seeker—often called the ‘eye of the missile’—generates its own thermal energy, producing background noise (dark current). This noise overpowers the weak IR signatures emitted by distant targets. The technology provides missiles with precise target detection and tracking.

COMPLEX PROJECT

A complex engineering project, Techno Defence’s JT Cooler uses a design distinct from those of foreign players. The company developed specialised production techniques and equipment, leveraging small-scale and cottage industries. Assembly requires highly skilled work under a microscope, using pure materials in clean environments, backed by stringent quality controls to meet defence-grade reliability standards. This technology is not required for missiles fitted with seekers that rely on other systems, such as satellite navigation.

UPI is not a ‘cost’ to be recovered

The “someone must pay” argument is misplaced. Large foreign platforms such as Google Pay and PhonePe should bear the cost of UPI, not Indian merchants or consumers.

By Ajay Srivastava

The government has introduced a Bill in the Lok Sabha that could fundamentally change India’s free digital-payment system. By amending Section 10A of the Payment and Settlement Systems Act, 2007, it would allow the government to introduce processing fees or a merchant discount rate (MDR) on UPI and RuPay debit-card transactions through future notifications, without another legal amendment.

The likely first step is an MDR of 0.25-0.4 per cent on UPI payments above ₹2,000 made to businesses, but the charges could later be extended to other transactions. While the official argument is that UPI must become financially self-sustaining, the move also comes amid sustained US pressure over Indian policies that have eroded the profitable businesses of Visa and Mastercard.

Visa and Mastercard generally do not issue cards or lend money; they operate networks that connect customers’ banks, merchants’ banks, and payment processors. When a customer pays by card, the merchant usually pays 1-3 per cent of the transaction value, a fee shared among the banks, the processor, and the card network. UPI disrupted this model by allowing customers to transfer money directly from their bank accounts via a QR code, at no cost to either the customer or the merchant. Even a roadside vendor can accept a ₹20 payment without a card machine. UPI therefore replaced cash and millions of payments that might otherwise have used Visa or Mastercard.

RuPay increased the competition further. Its debit cards were widely distributed through public-sector banks and financial-inclusion programmes. Since RuPay debit cards and UPI payments had no MDR, merchants had a strong reason to prefer them over costlier international card networks. RuPay credit cards linked to UPI pose an even greater challenge, allowing customers to scan a normal UPI QR code and pay up to ₹2,000 from their credit limit without any merchant charge.

RuPay’s share of new credit cards reportedly rose from about 3 per cent in 2023 to nearly 16 per cent in 2025. The share of UPI-linked RuPay cards in credit-card transactions increased from about 10 per cent in FY24 to nearly 40 per cent in FY25. This explains the criticism in the US Trade Representative’s 2026 National Trade Estimate report, which objects to India’s zero-MDR policy and data-localisation rules. Put simply, Visa and Mastercard are losing fee income and want the Indian government to help restore it.

Brazil offers a warning. The US criticised Pix, Brazil’s successful instant-payment system, and even cited it when imposing an additional 25 per cent tariff on Brazilian goods. Despite tariffs, Brazil refused to weaken Pix, treating it as essential public infrastructure. India should show similar resolve.

Supporters of UPI fees argue that banks, the National Payments Corporation of India (NPCI), and payment companies incur costs for servers, cybersecurity, and expansion. However, this argument misses the point. UPI is national infrastructure, like roads, courts, or currency — not merely a service provided by NPCI. The government funds roads because the economic activity and tax revenue they generate far exceed their cost. UPI provides similar benefits: it creates a digital record of transactions, expands the formal economy, improves GST compliance, and helps small merchants build records needed to obtain loans.

CASH IS COSTLY

The RBI spent ₹4,875 crore in FY26 on printing banknotes alone. This excludes the cost of transporting, storing, guarding, counting, and replacing cash, including 23.8 billion soiled notes withdrawn each year. Cash is India’s costliest payment system, while UPI is its cheapest. Charging for UPI and pushing people back to cash would therefore make little financial sense.

Ironically, India has already given American technology companies wide access to its payment infrastructure. Google Pay and Walmart-owned PhonePe process more than 80 per cent of UPI transactions. Business is shifting from one group of American companies — Visa and Mastercard — to another group that uses India’s publicly funded payment system. PhonePe could be the biggest immediate beneficiary if the Bill becomes law, as a share of MDR could provide substantial revenue and increase its IPO valuation.

The “someone must pay” argument is misplaced. Large foreign platforms such as Google Pay and PhonePe should bear the cost of UPI, not Indian merchants or consumers. India could charge them an annual participation fee of perhaps $100 million. These platforms gain huge transaction volumes and valuable insights into the spending habits of millions of Indians through a system funded by Indian taxpayers.

India should also enforce NPCI’s 30 per cent market-share cap, now scheduled for December 2026, to prevent any foreign-controlled app from dominating this critical infrastructure. Payment-data localisation rules should also remain to protect public revenue and India’s digital sovereignty.

UPI is already available in countries like Bhutan, Nepal, Singapore, Sri Lanka, France, Mauritius, and the UAE, with others likely to follow. India should not weaken its most successful digital public infrastructure merely to collect a small fee or satisfy US pressure. The modest cost of running UPI is far outweighed by its benefits. India should treat UPI as national infrastructure and a strategic global asset — keep UPI free, keep RuPay strong, and keep India’s payments policy sovereign.

Spacetech enters the second phase as start-ups build infra

NEW DEMAND. Earth observation, downstream applications set to gain traction. NEXT STEP. The shift is being driven by companies expanding beyond individual products across propulsion, spacecraft manufacturing, testing, and data applications.

By Jyoti Banthia, Bengaluru

India’s private space sector is entering a new phase, with start-ups shifting focus from proving launch and satellite technologies to building the infrastructure, manufacturing capabilities, and downstream applications needed to support a sustained commercial space economy.

“India’s private space sector is entering a clear second phase,” said Moin SPM, Co-founder and COO of Agnikul Cosmos. “Over the next 2-3 years, expect the ecosystem’s focus to shift from proving flight capability to building what a launch enables afterward”.

INTEGRATED CAPABILITIES

Agnikul is developing an integrated approach spanning design, manufacturing, testing, and flight. The company stated its in-house manufacturing capabilities have reduced engine production time to about seven days, a 90-97 per cent reduction compared to traditional assembly. This full-stack approach has also reportedly reduced the cost of building for space by roughly 50-60 per cent.

The company is also working on booster-stage recovery and an upper-stage architecture designed to remain useful in orbit to improve the economics of space missions. Moin predicts that the next wave of investment will target areas where single capabilities can serve multiple purposes, noting that “Propulsion and orbital computing will likely see the strongest investment”.

SCALING PHASE

The expansion extends beyond launch infrastructure into Earth observation and other downstream applications, which are expected to grow as demand increases from sectors such as defence, disaster management, and infrastructure monitoring.

“The next phase will be about scaling manufacturing, strengthening supply chains, developing supporting infrastructure and, importantly, building more capabilities in-house,” said Suyash Singh, Co-founder and CEO of GalaxEye.

However, industry players highlight remaining gaps in advanced manufacturing, specialised supply chains, and testing, which could become more significant as companies transition to higher-volume production.

Sony Pictures focusing on regional play, expansion of multilingual content: CEO

By Meenakshi Verma Ambwani, New Delhi

Sony Pictures Networks India (SPNI) is sharply focusing on strengthening its regional play in the country. The company stated it will be in “investment mode” for its regional business, which it expects to become a “profit engine” in the next few years.

The broadcast network is gearing up to launch its Tamil channel later this year, with a Telugu channel planned for next year.

STRONG FY26

SPNI recorded a strong performance in FY26, with consolidated total income of ₹7,064.08 crore (up 9.4 per cent year-on-year) and a consolidated net profit of ₹556.10 crore (up 15.6 per cent).

Responding to queries on the future growth outlook, Gaurav Banerjee, Managing Director & CEO of SPNI, noted that the growing middle class and its increasing purchasing power are driving consumers to spend more time on high-quality content.

“I remain confident that we will continue to see growth in television. We have been seeing growth in digital in a very big way... We also expect to see growth in our regional business," Banerjee said. He added that while the regional business will be in investment mode for the next couple of years, it is expected to become a profit engine thereafter.

CONTENT SLATE

Ahead of the festival season, SPNI announced its content slate across entertainment and sports. Highlights include:

• A show marking the entertainment debut of cricketer Rohit Sharma.
• Ajay Devgn hosting the true-crime series Crime Patrol 2026.
• Madhuri Dixit hosting Kon Honar Crorepati, the Marathi edition of Kaun Banega Crorepati.
• Sony LIV presenting MasterChef Tamil featuring Samantha Ruth Prabhu, and Tamil Idol with AR Rahman.

Banerjee emphasized that the company is building a wider and more diversified content portfolio across Marathi, Bengali, Tamil, and Telugu languages.

On the changing dynamics of the industry, he stated, “We need to expand the definition of television. It cannot just mean pay television. It must also mean free television as well as connected television”.

The company’s upcoming sports content includes the India tour of Sri Lanka, the Women's T20 Asia Cup, the Asian Games, and India’s all-format tour of New Zealand.