The week in charts: Inflation, Haldiram’s sale, India Inc promotion outlook

Food inflation eases but prices still pinch  

India's retail inflation eased to a seven-month low of 3.61% in February, driven by a fall in food prices. Vegetables saw 1.07% deflation in February, reflecting the usual seasonal price drop with new crop arrivals. However, consumers may still feel pressure from high inflation in several areas. A Mint analysis shows that despite the headline inflation easing, over one-fifth of the items still recorded inflation above 6%, with gold among major items recording 35.56% inflation. Interestingly, despite deflation in vegetables, potato and onion recorded double-digit inflation in February.

Also read | Inflation: In RBI's control at last?

Zero-for-zero tariffs

While India and the US negotiate a trade pact amid reciprocal tariffs threats, a 'zero-for-zero' tariff approach is viewed as a better alternative, Mint reported .This involves India eliminating import duties on specific products in exchange for the US doing the same. The Global Trade Research Initiative, which proposed the concept, said this could reduce India's high tariffs —a bone of contention for the US—more quickly than a trade pact, which takes longer and involves contentious issues such as opening up India's agriculture sector.

Also read: No reprieve from steel tariffs in sight despite lobbying efforts

Temasek bags a savoury deal

₹8,500 crore: That’s what the Singapore government’s private-equity arm Temasek has agreed to pay for a 10% stake in snack food maker Haldiram's, Mint reported. Haldiram's currently sells more than 400 varieties of namkeen (savoury snacks), confectionery and ready-to-eat food in 100 countries. The business may sell another 5% stake to Blackstone and consortium or Alphawave Global, possibly on similar terms to those of Temasek. 

The Temasek agreement, which will be one of the largest private-equity deals in the Indian snacks and savouries market, signals confidence in Haldiram's growth prospects.

Gold rush puts government in a fix

The recent rally in gold prices amid a fall in equities is set to increase the Indian government's payout liabilities significantly under its sovereign gold bond (SGB) and gold monetisation schemes over the next decade, a Mint analysis showed. Government payouts under these schemes totalled ₹2.39 trillion between 2017-18 and 2023-24. Another ₹1.4 trillion has been budgeted for 2024-25 and 2025-26. The government faces redemption obligations equivalent to 132,000 kg of gold under the SGB scheme alone between 2025 and 2032.

Also read: Why RBI has allowed premature redemption of sovereign gold bonds

Promotion? Take a hike!

India Inc is likely to see slimmer pay hikes and fewer promotions in FY25 owing to economic uncertainty, Mint reported. Deloitte estimates a 25% decline in promotions compared to the previous fiscal, with sectors including IT, financial services and manufacturing expected to see fewer elevations. Companies across sectors have experienced slower growth in recent quarters, which has affected promotions while they manage fixed costs. Moreover, US President Donald Trump’s proposed reciprocal-tariffs threats, which could affect multiple sectors, have made companies even more cautious.

Govt weighs LIC stake sale

2-3%: That is the stake the government could divest in Life Insurance Corporation (LIC) in FY26, subject to market conditions, Mint reported. This is part of its broader strategy to achieve the regulatory requirement of 10% public shareholding by 2027. 

Also read | Govt eyes insurance law revamp: Composite licensing, fair play for PSU insurers

The sale may be conducted in instalments to optimise the value of the government's remaining shares. It currently holds a 96.5% stake in LIC after selling 3.5% in the company's initial public offering in May 2022.

Summer cheer for consumer companies?

Consumer-focused companies, which have been battling a slowdown in urban consumption, could get a boost during a hotter-than-usual summer this year, a Mint analysis showed. FMCG companies in particular have borne the brunt of the slowdown, having seen single-digit quarterly net sales growth for nearly two years. Strong sales of ice creams, beverages and other cooling products offer a potential lift for these companies. However, risks may emerge in the rural segment, where growth is more vulnerable to extreme heat.

Also read: Can Adani Wilmar’s FMCG bet deliver long-term gains?

Chart of the week: Slow demographic shift in PSUs

The number of independent directors under 50 at public sector undertakings (PSUs) has risen from six in FY21 to 22 in FY24, shows the latest Excellence Enablers’ survey, which analysed corporate governance practices across 13 Maharatna and 20 Navratna companies. Despite the shift, most directors at these companies were aged between 50 and 65.