In this week's wrapup, we talk about CCI, the Global Biofuel Alliance, reversing nature loss and more.
No Markets edition this week. So hop on to see what we wrote over the week.
Do we need a Global Biofuel Alliance?
Biofuels can be extracted from plant based substances. There’s ethanol that comes from sugarcane, bamboo or other grains. And biodiesel which can be made from cooking oil and even restaurant grease! Yup, it’s quite the practical application of best out of waste.
And the reason why India is so eager about alternative fuels is because it wants to reduce its dependence on importing expensive barrels of oil from the Middle East and elsewhere. We can’t do that by producing in-house because we aren’t big producers. So we need proxies. The best way to do that is to root for biofuels.
There’s absolutely no petroleum involved. We can produce them domestically. And over the last 9 years, we’ve actually saved a whopping ₹73,000 crores just by relying on them. They also don’t contribute to pollution that much. So that’s a cherry on the cake.
On the 9th of September though, India made a big announcement at the G20 — the formation of a Global Biofuel Alliance (GBA). India, the US, and Brazil would be the founding members with 19 other countries joining in. But we can do this alone, right? Then why do we even need an alliance?
We answered that in our Monday’s story here.
CCI is getting a makeover. But…
Whenever companies operating in India think of a merger or acquisition they have to run it by the Competition Commission of India (CCI). Of course, there’s a threshold beyond which the CCI takes up cases. It checks to make sure that the potential combination doesn’t hurt competition in the market.
But that’s not the only role it plays. The CCI also keeps an eye on how different companies control the market outside of acquisitions. It could be Google abusing its dominant position, forcing phone makers to pre-package their devices with its software. Or even an online travel agent like MakeMyTrip who sides with someone like OYO, restricting other hotel networks from accessing its platform. The CCI just ensures that no deals in the market reek of monopoly.
And soon it’s going to get more powerful. It could have a say in matters if it feels like it could be detrimental to business. That means that if Facebook acquired WhatsApp now rather than in 2014, CCI might’ve gotten involved. After all, out of the 600 million users WhatsApp had globally back then, 70 million active users were in India.
So yeah, arming CCI with more powers is a fantastic idea. But there’s a problem with that. And that’s what we wrote about in our Tuesday’s newsletter. If you’re curious, you can read it here.
How brands can reverse nature loss
If you’re a Finshots regular you probably remember our story on forever chemicals and the fast fashion destruction. We told you how apparel and personal care products like detergents destroy the environment. They depend a lot on natural resources.
A basic cotton t-shirt guzzles 2,700 litres of water. A pair of denims need around 40% more water, if not more. And even your shampoo is basically 80% water with chemicals. So even after you dispose of the bottle, these chemicals could remain for years together, threatening every aspect of the food chain.
But consumer products don’t always have to affect the environment so much. They could be less harmful if they become nature-positive. A recent report from the World Economic Forum suggests how personal care brands and fast fashion can do their bit to undo the environmental damage they cause. So we took a look at it and broke it down for you on Wednesday. Here.
An explainer on Off-Budget Borrowings
When the centre or state governments present their budgets they allocate blocks of money for different purposes. But when these receipts aren’t enough to support routine and capital expenditure, governments borrow from the central bank. Or even raise money from the public in the form of bonds.
And this extra spending creates something called a fiscal deficit. The lower the fiscal deficit, the better it is for the government. It shows how prudent it is and also improves its creditworthiness. This means that if the government needs more money it can’t simply keep borrowing. So, what does it do?
It resorts to something called an off-budget borrowing. You could think of this as debt which doesn’t directly show up in its books.
A recent paper by the Centre for Social and Economic Progress (CSEP) highlighted that off-budget borrowings may have gotten states to go off their debt tracks. So we thought of doing an explainer on it. Here’s the story.
India wants a bigger bite of the MICE tourism pie
G20’s success in India has gotten the government excited about a new avenue for tourism ― meetings, incentives, conferences and exhibitions or events. It’s all about attracting tourists from the world over to meet in India. It could be work or intergovernmental meetings. Holidays that companies organise to reward their employees’ performance. Or even fairs that exhibit India’s art and culture.
You see, a lot of money is poured into making it comfortable for guests who participate in such events. There are lavish hotel bookings and tour itineraries before and after the event. And sometimes business trips could also extend as leisure trips. This can generate a lot of revenue for India’s hospitality sector.
Unfortunately, we only command less than 1% of the global MICE business. But that’s not really bad news. Because it means there’s room for growth. So how does the government plan on increasing its market share in the MICE industry? Take a look here.
We hope you enjoyed our weekly wrapup. Have a great weekend!