Manmohan Singh's Death, Rupee Plunge, GST Council Decisions, RBI's AI Committee — The Week That Was

The death of Manmohan Singh, the country's former prime minister and the man behind trailblazing economic reforms, was the biggest news of the week that went by.

The Christmas-shortened week also witnessed some other major headlines, including the Indian rupee plunging to a record low, and the RBI setting up a committee on artificial intelligence.

The decisions taken by the GST Council also dominated the headlines in the early part of the week. Although the council met over the weekend, its decisions related to tax on popcorn and sale of used cars remained in the news this week.

The primary market also remained abuzz with companies like DAM Capital Advisors Ltd., Concord Enviro System Ltd., Mamata Machinery Ltd., Transrail Lighting Ltd. and Sanathan Textiles Ltd. debuting on the bourses with a significant premium.

NDTV Profit, in its weekly news wrap every Friday, brings you the major events shaping businesses, industries, and global markets.

Manmohan Singh, the prime minister between 2004 and 2014, and architect of India's economic liberalisation, passed away at the age of 92 on Dec. 26.

Singh, who studied economics at both Oxford and Cambridge universities, is the only Indian to have served as central bank governor, finance minister and prime minister.

During his tenure as the PM, the country implemented an array of welfare schemes including the Mahatma Gandhi National Rural Employment Guarantee Act.

Earlier, Singh served as the finance minister under the Narsimha Rao-led government in the critical period of early 1990s. He was credited for effectively addressing the 1991 economic crisis, which led India to embrace liberalisation, privatisation and globalisation.

The Indian rupee weakened sharply on Friday, hitting a fresh record closing low of 85.54 against the US dollar. This marked its steepest single-day decline since February 2023. The domestic currency, during the trading session, had depreciated 53 paise to hit its lowest ever value of 85.81.

Month-end dollar demand from importers and oil marketing companies, coupled with global dollar strength, exerted significant pressure on the rupee. The currency has depreciated by 2.9% so far in 2024, but remains one of the least volatile among Asian peers.

Caramel popcorn and used vehicles were under the limelight after the 55th meeting of the GST Council held in Jaisalmer, chaired by Union Finance Minister Nirmala Sitharaman.

The "essential character" caramel-coated popcorn shifts to that of sugar confectionery. As a result, caramel popcorn and similar offerings will attract a higher GST of 18%.

Savory popcorn—mixed with salt and spices—retains the essential character of namkeens, this means a GST of 5% applies if it is supplied loose or unpackaged, while 12% GST kicks in for pre-packaged and labeled popcorn.

For sale of old and used vehicles including electric vehicles, the GST Council has recommended GST rate on the margin value at 18%. No tax will be levied when a used vehicle is sold by the owner to another individual. However, registered businesses dealing with resale of cars will be liable to pay 18% on margin value, from the current 12%.

The Reserve Bank of India has set up a committee, which will be called as FREE-AI, to develop the framework for responsible and ethical enablement of artificial intelligence. The eight member panel chaired by Pushpak Bhattacharyya from the Department of Computer Science and Engineering, IIT Bombay, will identify potential risks associated with AI, if any and recommend an evaluation, mitigation and monitoring framework.

The committee will be required to submit its report within six months from the date of its first meeting. The aim of the committee will be to assess the current level of adoption of AI in financial services, globally and in India.

One of the biggest pieces of business news this week is that Nissan Motor Co. and Honda Motor Co. have signed a memorandum of understanding to merge, aiming to become the world’s third-largest automaker by sales. The two Japanese companies plan a joint holding company, to be listed on Tokyo Stock Exchange’s Prime Market in August 2026, marking a major milestone for Japanese automakers.

While, in India Jubilant Bhartia Group's subsidiary Jubilant Foodworks Ltd. has announced that it has entered into a memorandum of understanding with Coca-Cola India Pvt. to buy the portfolio of sparkling beverage and other products from the company's authorised bottlers. The two companies will execute a master agreement starting from April 2025.

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Tata Group plans to create five lakh manufacturing jobs over the next five years in battery, semiconductors, electric vehicles and solar industries, said N Chandrasekaran, the chairman of Tata Sons, wrote in his annual letter to the staff.

The International Cricket Council announced the fixtures and the groupings for the upcoming Champions Trophy 2025 this week. The tournament is scheduled to start on Feb. 19, 2025 in Pakistan's Karachi, with the final match to be held on Mar. 9. India's first game of the tournament is scheduled for Feb. 20, when the team will take on Bangladesh in Dubai.

The much-awaited India vs. Pakistan contest has been scheduled for Feb. 23. The game will also be played in Dubai.