Why Sony’s new head has a tough job ahead

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Wednesday, July 10, 2024. My name is Nelson John. Let's get started:   India’s stock market benchmarks- the Nifty 50 and the Sensex - hit fresh highs on Tuesday despite mixed global cues. Both indices saw a rise of just under half a percentage point from their previous day’s close.    India's journey towards electric mobility has hit a bit of a speed bump. After a promising start, sales of electric vehicles, or EVs, are beginning to stagnate, largely because subsidies were slashed earlier this year. This has shifted a lot of expectations onto the upcoming third phase of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles—or FAME—scheme, which everyone is eyeing ahead of the budget announcement on July 23. The FAME scheme first rolled out in 2015 and has been a cornerstone of India’s push to get more electric and hybrid vehicles on the road. It saw a significant boost in 2019 with FAME II, which pumped in ₹10,000 crore to support the adoption of EVs across various segments, from buses to two-wheelers. The impact of these initiatives? Pretty impressive initially. From selling just under 2,400 units in FY2015, EV sales soared, breaking the 100,000 mark in FY19 and reaching a whopping 1.68 million units by FY24. So, what’s the buzz around FAME III? Mint’s Sumant Banerji explains in today’s Mint Primer. The industry is hoping it will not only bring back better subsidies for individual car buyers and two-wheelers but also expand support to include trucks.     India's recent net surplus in its current account, at $5.7 billion for the first quarter of 2024, is quite the headline. But it's not just about more money coming in than going out; it's a story that calls for a deeper look. Typically, India runs a current account deficit because our massive investment needs outpace the collective savings of our households, businesses, and the government. In fact, barring the first pandemic year, this year's deficit, projected at $23 billion, or 0.7% of GDP, is on track to be the second-lowest in two decades. Now, you might think this sounds like great news, but here’s where it gets complex. The Reserve Bank of India pointed out an uptick in investments, particularly driven by higher government spending and a surge in the housing sector. With investments pegged at 33.7% of GDP, that's a big deal because it means we're saving at a rate of 33% to maintain a current account deficit of just 0.7%. When the savings rate climbs, it opens the door for more substantial investments without widening the current account deficit. Picture this: with a modest 2% deficit and a savings rate of 33%, we're looking at an investment rate of 35%. That translates to a whopping ₹6 trillion directed towards nation-building efforts. So, a deficit isn't necessarily a bad thing when it stems from strong savings and solid investment. Deepa Vasudevan from Mint’s data team explores why having a current account deficit is good for the economy.    The national rural job guarantee scheme, a crucial lifeline for millions in rural India, isn't expected to receive increased funding in this year's Union budget, according to two officials. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) will likely see its budget allocations hold steady as per earlier estimates. The scheme provides a financial safety net to rural households. These funds could be adjusted later based on job demands and requirements in rural areas. The budget originally earmarked ₹60,000 crore for FY24 and projected ₹86,000 crore for FY25. However, actual spending for FY24 exceeded the estimates significantly, reaching more than one trillion rupees, underscoring a strong demand for rural employment. This increase reflects the ongoing challenges in rural consumption and stagnant growth in the FMCG sector, with many economists pointing out the disparities affecting rural markets compared to urban centres. For anyone who grew up in the 90s and mid 2000s, Aahat remains to be one of the most iconic shows from their childhood. The horror show, which used to air on Sony, was one of the pre-saas-bahu era gems of Indian TV. Sony - the home to to such popular shows is now facing a challenge. Sony runs a vast media empire in India, including 26 TV channels, the SonyLIV streaming platform, a movie distribution and production business, a music label, and a talent management vertical. Despite these extensive operations, Sony’s revenue growth has been sluggish, increasing just 2% to ₹6,909.2 crore in the fiscal year 2022-23. In an effort to invigorate the brand, Sony has brought on Gaurav Banerjee as the new chief steward, hoping his fresh approach can turn things around. Will Banerjee’s advent at Sony turn things around for the Indian operations of the Japanese media giant? Lata Jha takes a deep dive to find out, in today’s Long Story.      Management consultant Sharan Hegde was just 25 in July 2021 when Mint first wrote about the rise of financial influencers, or ‘finfluencers’ as they've come to be known. Hegde was a budding 'finfluencer' working at PwC and just starting to earn more from his Instagram promotions than his regular job. Fast forward to 2024, and he's a powerhouse in India’s financial influencer landscape with six million followers and a staggering Rs 60 crore in annual revenue, predominantly from his 'One Percent Club' courses. But Hegde's journey didn't stop at social media. He ventured into the more regulated world of financial advising by starting an RIA (Registered Investment Advisory) business. This move, however, raises significant questions about the role of social media influencers in the regulated financial space. How should the Securities and Exchange Board of India (Sebi) handle advertising codes for RIAs when they are run by influencers like Hegde? Mint Money’s Neil Borate and Shashind Ningthoukhongjam tackle the question.     We'd love to hear your feedback on this podcast. Let us know by writing to us at [email protected]. You may send us feedback, tips or anything that you feel we should be covering from your vantage point in the world of business and finance.   That’s all for today. Thank you for listening.   We're eagerly looking forward to our next Top of the Morning episode, which will be packed with fresh business news. Until then, have a great day!     Show notes:   Mint Primer: How the budget can push electric vehicle sales Why a current account deficit is good for India Budget 2024: MGNREGS unlikely to see higher allocation; lakhpati didi scheme to Picture imperfect: Why Gaurav Banerjee has an arduous job at Sony Why Sharan Hegde’s financial advisory business is a test for Sebi's ad rules Learn more about your ad choices. Visit megaphone.fm/adchoices