TMSEp488: Petrochemical PLI, farm export ban, markets, no-confidence motion

The government is considering a production-linked incentive scheme for the chemicals and petrochemicals sector. The aim is to transform India into a prominent manufacturing hub for these crucial products. But does this sector really need a PLI boost?  

Industry experts usually hail PLIs. And they believe that it will work wonders for the chemicals and petrochem sector too, and boost its export. Meanwhile, exports of agricultural and processed food products shot up by 9% in Financial Year 2023. It was driven by a spike in shipment of rice, fruits, vegetables and dairy products. But the government recently banned the export of non-Basmati white rice. This latest ban comes just over a year after a similar ban was imposed on the export of wheat. While the move may help the government keep inflation in check, it may hit the famers hard. But why so?  

IMF, meanwhile, has urged India to reverse the export ban. Moving on, monthly flows by foreign investors into equities slowed in July. From over 52,000-crore rupee worth of equity buying in June, FPIs have purchased equities worth only 33,600-crore rupee so far this month. Is this a sign of buying fatigue? And will the pace of flow into equities slow even more as the market valuation becomes stretched? 

Political stability is one of key things that FIIs look for before investing money in any country. A stable government means continuation of policies. The BJP-led government at the Centre, meanwhile, is gearing up for a floor test. A no-confidence motion was recently moved against it by the Opposition. But what exactly is a no-confidence motion? Listen to this episode of the podcast to know more.