Newspaper Summary 170626

 

Tata Motors FY26 free cash flow ‘negative’ on JLR woes

Amit Vijay Mohile Mumbai

Tata Motors reported negative free cash flow of ₹26,823 crore in FY26, compared with positive free cash flow of ₹22,236 crore a year earlier, as challenges at Jaguar Land Rover (JLR) weighed heavily on the group’s finances. The company’s consolidated balance sheet moved from a net cash position of ₹1,018 crore to net debt of ₹30,710 crore, reflecting weaker cash generation at JLR and continued investment across the business.

ANNUAL REPORT

Despite the financial pressure, Tata Motors maintained a strong investment programme, committing ₹36,236 crore in capital expenditure and ₹34,562 crore in research and development during the year, according to its 81st Integrated Annual Report. The biggest drag on performance came from JLR, where a cyber incident led to a five-week production shutdown and tariff-related pressures affected key export markets.

Wholesale volumes declined 23.2 per cent year-on-year to 307,915 units, excluding the China joint venture, while revenue fell 20.9 per cent to £22.9 billion from £29 billion in FY25.

The impact was visible at the group level. Consolidated revenue stood at ₹3,35,582 crore, while profit before tax before exceptional items dropped sharply to ₹2,519 crore from ₹28,650 crore a year earlier. Even as profitability weakened, Tata Motors continued to invest in future products and technologies.

Intangible assets under development, covering vehicle programmes and technologies across JLR and Tata Motors Passenger Vehicles, rose to ₹76,154 crore as of March 31 from ₹48,182 crore a year earlier.

“Rapid global advances in digital technologies and AI are transforming how mobility products are designed, experienced and supported,” said Chairman N Chandrasekaran in his message to shareholders. He noted that clean-energy transition, safety requirements and supply-chain shifts are reshaping competitiveness in the global auto industry.

RECOVERY SIGNS

There were signs of recovery towards the end of the year. Following the resumption of production, Q4 revenue reached ₹1,05,447 crore and profit before tax before exceptional items improved to ₹7,167 crore.

While JLR struggled, Tata Motors’ domestic passenger vehicle business provided support. Revenue rose 20.7 per cent to ₹58,465 crore and profit before tax before exceptional items increased 32.6 per cent to ₹1,436 crore. Electric vehicle sales climbed 43.4 per cent to 92,179 units, helping the company retain a 40.2 per cent share of India’s EV market.

Meeting on G7 sidelines, Modi and Trump to discuss FTA, sailors’ deaths

Amiti Sen New Delhi

When US President Donald Trump meets Prime Minister Narendra Modi on the sidelines of the G7 summit in Evian, France, on Wednesday, the push for an expeditious conclusion of the India-US interim trade deal will take centre stage. However, New Delhi will still wait to ensure that sticky issues, including the US’ penal tariffs on Indian exports and India’s competitive edge over rivals, are satisfactorily addressed.

“India is in favour of an interim deal but it has to first know what the US tariffs on its goods would be. Moreover, the deal has to be such that it gives Indian exporters a guaranteed edge over competitors such as Vietnam, Bangladesh and Indonesia. The Modi-Trump meet will at best result in an exchange of good intentions on the deal,” a source tracking the matter told businessline.

KEY ISSUES Significantly, the leaders, who will meet face-to-face after 16 months, are also expected to discuss the situation in West Asia in the light of the recent killing of three Indian sailors by US forces in the Gulf of Oman and the proposed US’ deal with Iran to end the war and the Strait of Hormuz blockade. Other issues likely to be taken up include partnership in critical minerals and securing supply chains, increased trade in energy, co-operation in AI and digital infrastructure, and securing navigation.

SJM’S ANGER There is pressure on Modi from several quarters, including Opposition leaders, bodies such as the seafarers’ association and family members of the victims, to take up the matter with Trump.

Swadeshi Jagran Manch (SJM), the economic wing of the RSS (the ruling BJP’s ideological mentor), lashed out against the US action that resulted in the mariners’ deaths, in a letter to the US Ambassador to India Sergio Gor on Monday.

“These incidents have sent a wave of disbelief and anger among the people of India. US administration added insult to injury by an insensitive and irresponsible response, hurting Indian sentiments further, who had always considered US to be a great friend... It is a serious violation of the international law governing the seas, armed conflict and human rights,” wrote Ashwini Mahajan, Co-convenor, SJM.

Centre’s foodgrain reserves at a record high as El Nino threatens kharif production

Prabhudatta Mishra New Delhi

Foodgrain reserves in the Central Pool surged to a record high of 122 million tonnes (mt) as of June 1. Equal to the country’s entire annual rice consumption, this massive stockpile gives the government a critical buffer just as El Nino risks disrupting the 2026 kharif crop.

Given that the country’s free foodgrain schemes for over 80 crore beneficiaries require an annual offtake of 56 mt (based on 2025-26 data), the current reserves are sufficient to comfortably sustain these welfare programmes for at least two years.

“The stock in the Central Pool, although higher than requirement, assures the country of food security. There is no cause of concern as far as basic food availability is concerned even if the monsoon is below normal. The stocks can also be off-loaded under the open market sale scheme to bulk consumers, including State governments,” said Union Food Secretary Sanjeev Chopra.

OMSS PROGRAMME

What Chopra is saying suggests that the Centre may release grains to the States for bulk consumers under the Open Market Sale Scheme (OMSS). Despite the “below normal” monsoon forecast, at 90 per cent of the long period average, the government is targeting a kharif foodgrain production during 2026-27 of 176.16 mt, against the actual output of 176.04 mt in 2025-26.

The target for 2026-27 also includes 123.15 mt of rice, 8.4 mt of pulses, 28.92 mt of oilseeds, 13.56 mt of nutri cereals and 31.04 mt of maize.

“We may need higher allocation under OMSS also to check food inflation. So, the allocation of rice for ethanol at highly subsidised price of ₹2,320 per quintal needs to be drastically reduced from about 5.2 mt announced earlier,” said former Agriculture Secretary Siraj Hussain.

FIA backs SEBI’s options strike framework

Our Bureau Mumbai

The Futures Industry Association (FIA) has stated that SEBI’s proposal to allow exchanges to add strike prices in line with market movement will improve price discovery and risk management for participants.

“We support the proposal to introduce new strikes intra-day in the direction of price movement. This would address a long-standing operational and risk-management issue for market participants,” the FIA said in its submission to the regulator.

STRIKE PREDICTABILITY

The association, which represents clearing firms, exchanges, trading firms, and other derivatives market participants globally, noted that the framework would improve the predictability and availability of option strikes, especially during periods of heightened volatility. It added that a consistent approach across exchanges would enhance operational efficiency.

However, the FIA emphasized that the effectiveness of this framework depends on a “high degree of consistency” in implementation. It recommended that SEBI prescribe minimum common standards for:

• Strike publication timing and terminology.
• File formats and intra-day notification protocols.
• Transparency in strike addition rules.
• Uniform minimum requirements on the range and number of in-the-money (ITM) and out-of-the-money (OTM) strikes across products.

Without these standards, the FIA warned that exchange-level discretion could lead to uneven outcomes and increased operational complexity.

MARGIN EFFICIENCY

A primary concern for the association relates to existing positions. The FIA cautioned against removing or disabling strikes where open interest continues to exist, as this could force participants into inefficient exits.

“If a strike is purged, disabled, removed or otherwise made unavailable while open interest remains, participants may be left with exercise or expiry as the only practical means of exit,” the association stated.

It recommended that these strikes should remain available for trading, hedging, or closing out positions until open interest is extinguished. This approach would avoid unnecessary margin lock-ups and preserve risk management flexibility.

The FIA further suggested that intra-day strike additions be disseminated via existing automated exchange channels, such as FIX and binary market data feeds, to ensure seamless integration into trading systems without manual intervention.

Finally, the association called for an annual review mechanism for strike frameworks involving market participants and suggested that SEBI provide a reasonable transition period for implementation so that systems and processes can be properly upgraded.

‘India’s 5G subscription to reach 1.1 b by 2031’

S Ronendra Singh New Delhi

5G subscriptions are expected to reach more than 1.1 billion by the end of 2031, reaching 81 per cent subscription penetration as adoption in the country continues to grow rapidly, according to the Ericsson Mobility Report (EMR) released on Tuesday.

The growth is driven by the availability of affordable 5G-enabled smartphones and devices, expanded network coverage across almost all districts, and the increasing rollout of 5G fixed wireless access (FWA) services.

The report stated that 5G subscriptions reached 430 million at the end of 2025, accounting for 35 per cent of total mobile subscriptions. While 4G remains the dominant technology at 46 per cent, subscriptions are forecast to decline from around 570 million in 2025 to nearly 160 million by 2031 as users migrate to 5G.

GLOBAL LEAD

India continues to lead globally in mobile data consumption per smartphone, with average monthly usage already at 37 GB and expected to nearly double to 70 GB by 2031.

“India’s rapidly growing 5G adoption based on enhanced mobile broadband and 5G FWA is transforming consumer experiences. The robust and secure 5G infrastructure in the country is driving inclusion, governance and innovation at scale, and is serving as a powerful foundation for digital India,” said Nitin Bansal, Managing Director, Ericsson India.

NETWORK SLICING

In a significant development, a service provider (Bharti Airtel) in India recently launched differentiated connectivity services based on network slicing for its postpaid 5G customers, signalling the evolution of advanced 5G use cases in the market.

The June 2026 report covered the same period (2025-2031) as the November 2025 edition, but with updated statistics and forecasts. It further noted that global 5G mobile subscriptions passed the three-billion mark during the first quarter of 2026. This global figure is expected to grow rapidly and is forecast to more than double to 6.4 billion by the end of 2031.

Western Europe, North America, North-East Asia and the GCC countries are forecast to have 5G mobile subscription adoption close to, or above, 90 per cent by the end of 2031.

6G OUTLOOK

The report also touched upon the future, stating that the first implementable 6G specifications are expected to be finalised by the end of 2028 or early 2029. The first commercial 6G services are expected to follow around 2030, with the US, China, Japan, South Korea and the GCC countries expected to be early adopters.

‘Poor data quality is hurting AI ambitions’

Vallari Sanzgiri Mumbai

Low quality of data is the biggest hindrance in the enterprise leap from pilot stage AI-systems to production ready AI agents, said Anand Ramamoorthy, Director APAC Data Governance and Quality at Informatica from Salesforce, in an exclusive conversation with businessline.

Following the company’s Data and AI Summit in Mumbai on June 11, Ramamoorthy said many enterprises had voiced concern about the quality of their data, with one company flagging 73 per cent of its data as “bad”.

DATA GOVERNANCE

“Data quality is the biggest impediment to translating these agents that you’re building to make it production-ready. It’s critical to have a data governance capability. The problem is the manual effort slows things down. So, even though it’s critical, they lose patience thinking that they’re not getting the value,” said Ramamoorthy.

Despite this hurdle, Ramamoorthy pointed out that traditional data management norms expect humans to be in the loop of workflows or in the interpreting of data. This means that the context when using data needs to be set by a human that can understand nuance rather than an AI agent that is liable to hallucinate.

“Data itself is not always incorrect. It is sometimes ambiguous, depending on the usage, the interpretation can be different. So, when you apply the agents on top of that, it amplifies that problem. That can lead to hallucination, the outcomes can be different,” he said.

THREE KEY PILLARS

To address these concerns, Ramamoorthy suggested three key pillars in the world of agentic AI:

• Machine readable metadata with trusted context.
• AI-ready data products.
• AI-assisted data stewards that take up the task of providing governance policies around ownership, accountability, definitions, etc.

“It’s about how do we unlock the value of these data stewards who are good at functional and business-oriented conversations. How do we instil that into the manual effort rather than focus on mundane, repeatable manual tasks?” he said.

‘States’ own taxes grow to more than half of total revenue receipts’

Shishir Sinha New Delhi

The share of States’ own tax revenue in their revenue receipts grew to over 50 per cent during FY25 but with lower buoyancy, said the office of the Comptroller & Auditor General (CAG) in its report on State finances. Meanwhile, the States are getting more from the Centre as part of devolution.

CAG K Sanjay Murthy released the third edition of the Publication on State Finances 2024-25 on Tuesday. According to the report, States Own Tax Revenue (SOTR), the largest component of revenue receipts, increased significantly in absolute terms and its share to 50.13 per cent in FY25 from about 49.55 per cent in FY24.

However, its buoyancy — the ratio of change in tax revenue in relation to change in gross state domestic product — weakened to 0.67 in FY25 over 0.92 of FY24 and 1.43 of FY23. During FY25, the top seven States whose SOTR contributed up to 60 per cent of revenue receipts were Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Tamil Nadu and Telangana. On the other hand, Arunachal Pradesh, Manipur, Mizoram, Nagaland, Sikkim and Tripura had SOTR of less than 20 per cent of their total revenue receipts. The average annual growth of SOTR of all the States combined was 11.05 per cent during the period 2018-19 to 2024-25.

UDAY IMPACT

According to the report, in FY25, capital expenditure of ₹8.49 lakh crore constituted 16.59 per cent of the total expenditure by the States, the remaining 83.41 per cent being revenue expenditure.

During the 10-year period, a spurt in share of capital expenditure was evident in FY 2015-16 and FY 2016-17. “The rise in capital expenditure during these two financial years was mainly driven by States investing in the equity of State power undertakings and by the extension of loans to power utilities, following the takeover of 75 per cent of the debt of State-owned power distribution companies by 14 State governments under the Ujwal Discom Assurance Yojana (UDAY),” the report said.

SHARE OF SUBSIDIES

On an average, capital expenditure of the States has remained in the range of 13–20 per cent of the total budgetary spending in the 10-year period of FY16 and FY25.

The report highlighted that subsidies at ₹4.37 lakh crore was one of the major components of revenue expenditure in several States. The principal subsidy outgo was to energy utilities and agriculture. The decadal trend shows that in most years the share of subsidy expenditure has been in the region of 8-10 per cent of the total revenue expenditure of all States combined.

On liabilities, as on March 31, 2025, there was a wide variation from 15.79 per cent of GSDP in case of Odisha to 52.84 per cent of GSDP in case of Arunachal Pradesh. During the period FY16 to FY25 as a percentage of GSDP, total liabilities increased to 27.89 per cent from 24.19 per cent. In FY25, all States were in fiscal deficit ranging from 1.66 per cent of GSDP in the case of Goa to 8.69 per cent in Meghalaya.

TRENDS IN STATES’ EXPENDITURE

• Committed + Subsidies + GIA Salary: ₹26.12 lakh crore (61.17% of revenue expenditure).
• Subsidy growth: Grew 214 per cent from ₹1.39 lakh crore in FY16 to ₹4.37 lakh crore in FY25.
• Growth parity: Both revenue and committed expenditure grew 137 per cent.
• Committed expenditure: 14 States had committed expenditure more than 50 per cent of their revenue expenditure.

Beyond the wage: Building a workforce for Viksit Bharat

R Balasubramaniam

Ravi, a young worker in Coimbatore, six months into his first formal job at a small manufacturing unit, recently received credit of ₹7,500 in his bank account, separate from his monthly salary. The amount was disbursed automatically following completion of six months of continuous employment. His family had previously been engaged only in informal work, without contracts, provident fund contributions or any documented record of employment, and this was the first occasion on which his employment had been formally recorded and accompanied by a benefit of this kind.

The payment he received is his first installment under Part A of the Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), introduced in the Union Budget 2024-25 as part of the Prime Minister’s Package for Employment and Skilling. Under this provision, first-time employees joining EPFO-registered establishments with monthly earnings below ₹1 lakh receive a cash incentive of up to ₹15,000, disbursed in two installments, the first after six months of work and the second after twelve months. The payment is made via direct benefit transfer, linked to the worker’s Universal Account Number on the EPFO portal, and deposited into a savings instrument to build a financial cushion for the worker.

For Ravi, these six months were not merely a qualifying period. They were the months in which he gained familiarity with his workplace, acquired the basic skills of his trade and began to build an employment record where none had existed before.

BENEFITING SMALL BIZ

This period mattered for his employer too, a small manufacturing unit that had taken him on as part of its expansion. Part B of PM-VBRY provides that employers who create employment above their existing baseline receive a government contribution of up to ₹3,000 per additional employee per month, over two years across sectors and over four years in manufacturing. The contribution offsets part of the cost that a firm bears in the early months of a new hire, when onboarding and training are underway and a worker without prior formal experience is still becoming productive.

By easing this initial cost, the provision extends the scheme’s reach to small businesses of the kind that employed Ravi. For a country with India’s demographic profile, a young and growing workforce presents an opportunity to drive economic growth through employment-led development toward a Viksit Bharat by 2047. The extent to which new entrants enter formal employment, with access to social security and institutional protections, will influence how the benefits of growth are experienced across households and communities. PM-VBRY aims to strengthen the bridge from Swatantra Bharat to Samriddha Bharat and seeks to incentivise the creation of more than 3.5 crore formal jobs over two years.

Since becoming operational, 60 lakh first-time employees have joined the formal workforce through the scheme. Of these, 43.26 lakh, nearly 71 per cent, are in the 18 to 30 age group, and 18.04 lakh, close to 30 per cent, are women entering formal employment for the first time. These workers span expert services, engineering, trading, construction, education, healthcare, textiles and hospitality, reflecting uptake across a wide spread of formal establishments.

SOCIAL SECURITY

Beyond the incentive itself, what Ravi has gained is access to a broader net of social security — through provident fund contributions, insurance protections and statutory employment benefits. For many first-time formal workers like him, this represents an entry into social security coverage and a structured employment relationship. The six-month continuous employment condition is intended to ensure that jobs created under the scheme translate into genuine career foundations. Sustained formal employment builds transferable skills, instils professional norms and strengthens future employability, generating benefits that extend beyond the period of support provided under the scheme.

The creation of employment opportunities is an important policy objective. Equally important is ensuring that workers like Ravi are able to establish a sustained presence within the formal economy, where employment is accompanied by social security coverage and institutional protections.

As more workers complete six months, a year, and beyond in formal jobs, a larger share of the workforce enters the social security net, and small establishments build the habit of formal hiring. With more than 3.5 crore jobs projected under the scheme, this gradual widening of the formal economy represents a critical step toward building a workforce capable of powering India’s development journey.

In a first, US pips Qatar as India’s largest LNG supplier during March-May

Rishi Ranjan Kala New Delhi

The first 90 days of the West Asia conflict significantly altered India’s liquefied natural gas (LNG) imports trade, albeit in the short term, with the US emerging as the largest supplier for the first time, piping Qatar.

Data from Kpler show that during the March-May 2026 quarter, Washington supplied 1.5 million tonnes (mt) of LNG to India, compared to a mere 0.1 mt by Qatar. This is against Qatar supplying 3 mt during March-May 2025 against 0.5 mt by the US.

The global real time data and analytics provider pointed out that LNG imports weakened in March 2026 before recovering in April-May. Qatar’s share dropped sharply in recent months, while the US, Oman, Nigeria and Angola became more important sources of supply.

CUMULATIVE IMPORTS

India’s cumulative LNG imports for the first 90 days (March-May 2026) stood at 5.8 mt, a decline of 6.5 per cent on an annual basis.

In terms of import share, Washington surged to the top, accounting for more than one-fourth (25.86 per cent) of India’s cumulative LNG imports during March to May this year, compared to a little over 8 per cent in the year-ago period. On the other hand, Qatar’s share slipped from more than 48 per cent during March-May 2025 to just 1.72 per cent during March-May 2026.

The conflict also significantly impacted the share of top suppliers in West Asia (Qatar, the UAE, Saudi Arabia and Kuwait), which fell to 29.31 per cent in March-May 2026 from a whopping 74.2 per cent a year ago. Asian buyers were forced to secure higher-priced volumes to offset disrupted long-term LNG deliveries from Qatar and the UAE.

In March–April 2026, nearly 100 spot cargo tenders were issued in Asia, up from 89 in the same period in 2025, with India issuing tenders for 44 cargoes, double a year earlier, the Gas Exporting Countries Forum (GECF) said.

KEY SUPPLIER

Analysts and trade sources said that Washington emerged as the key balancing actor in the global LNG market after the West Asia conflict led to closure of the Strait of Hormuz (SoH), effectively choking half of India’s natural gas requirement.

As per Gastech, the world’s fourth-largest importer of LNG purchased 27 mt of LNG in FY25, of which 11.2 mt were sourced almost entirely from Ras Laffan. The attack on QatarEnergy’s Ras Laffan facility by Iran in April caused wide-scale damages and choked almost half of India’s LNG consumption. For comparison, about 93 per cent of Qatar’s and 96 per cent of the UAE’s LNG exports transited through the SoH, representing almost one-fifth of global LNG trade in 2025. There are no alternative routes to bring these volumes to market, said the International Energy Agency (IEA).

In 2025, Ras Laffan produced 112 billion cubic metres (bcm) of LNG, as well as 300,000 barrels per day of liquefied petroleum gas (LPG) and 180,000 barrels per day of condensate, the IEA said.

The GECF said that US LNG exports increased by 2.4 mt and 1.6 mt year-on-year in March and April 2026, respectively, supported by the ramp-up of production at recently commissioned LNG facilities. While Europe remained the largest destination, incremental volumes were increasingly redirected to Asia, reflecting tighter regional balances and stronger price signals in Asian spot markets. Destination flexibility of US LNG enables off-takers to redirect cargoes to markets offering the highest netback prices, enhancing short-term supply responsiveness, it added.

INDIA'S LNG IMPORTS (MARCH-MAY 2026 VS MARCH-MAY 2025)

Country	March-May 2026 (mt)	Import Share (%)	March-May 2025 (mt)	Import Share (%)
US	1.5	25.86	0.5	8.07
Oman	1.4	24.14	0.5	8.07
Nigeria	1.3	22.41	0.5	8.07
Angola	0.9	15.52	0.1	1.60
UAE	0.2	3.45	1.1	17.74
Qatar	0.1	1.72	3.0	48.39

Source: Kpler; MT: Million Tonnes; %: Percentage Share

Ageing population and rising debt could push TN towards a fiscal trap, warns White Paper

Sindhu Hariharan Chennai

Tamil Nadu’s fiscal position has deteriorated sharply since 2021, marked by rising debt, record revenue deficits, slowing growth in own-tax revenues and mounting committed expenditure, according to a White Paper on State finances released by the newly elected TVK government on Tuesday.

The report identifies plugging revenue leakages through better administration as a key priority even as the government seeks to restore fiscal health while honouring its welfare-oriented electoral commitments. Releasing the report, Finance Minister N Marie Wilson said the deterioration for fiscal correction was particularly urgent as Tamil Nadu is ageing faster than any other large State, leading to a shrinking tax base and rising social security and healthcare obligations.

6 KEY FINDINGS

Among its six principal findings, the report noted that Tamil Nadu’s total debt was projected to cross ₹10 lakh crore in FY26. Including off-Budget liabilities, contingent liabilities and guarantees, the State's total fiscal exposure had risen to ₹13.18 lakh crore.

The debt-GSDP ratio stood at 28.3 per cent, remaining consistently elevated and higher than that of peers. Furthermore, committed expenditure had risen from about 60 per cent of revenue receipts to 64 per cent, leaving limited fiscal space for capital expenditure.

REVENUE DEFICIT

The White Paper estimated the revenue deficit in FY26 at 2.22 per cent of the GSDP, the highest in six years and, in absolute terms, higher even than during the Covid-hit FY21. This deficit is estimated to be approximately 2.5 times that of Karnataka and Maharashtra.

According to the report, the widening revenue deficit since FY23 is attributable to the introduction of new recurring expenditure commitments without corresponding revenue mobilisation, the deferral of certain own-tax reforms, and other structural fiscal pressures.

PEER COMPARISON: OUTSTANDING DEBT AND LIABILITIES (AS % TO GSDP)

State	2021-22	2025-26 RE
Tamil Nadu	28.8	28.3
Karnataka	23.8	23.4
Maharashtra	19.8	19.7
Gujarat	19.3	17.6

Source: White Paper on the Fiscal Management of Tamil Nadu