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Inside the $30 billion Maha Kumbh economy
- 2025/01/22
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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, January 22, 2025. This is Nelson John, let's get started. The Reserve Bank of India is making strides towards making the rupee and international currency by allowing non-residents to open rupee accounts in the overseas branches of authorized Indian banks. This move, part of a broader effort to encourage cross-border transactions in the rupee, follows the RBI's consultation with the central government and builds on recommendations from a 2022 RBI committee aimed at integrating the rupee into the global financial system more effectively. Now, non-residents can manage both current and capital transactions with Indian residents through these accounts and also use them to invest in rupee assets, Gopika Gopakumar reports. For example, a non-resident Indian in the U.S. can hold rupees received from exports to India and use them for various payments, including imports back into India. This flexibility could significantly streamline the management of trade finances. However, bankers are cautiously optimistic, noting that the rupee's non-convertible nature might slow its adoption for international transactions. The Union Budget for FY26 is expected to significantly increase financial support for startups and small businesses, which are crucial to India’s economy, accounting for nearly one-third of its GDP. The government plans to bolster working capital, trade finance, and growth funding through favourable terms under various schemes managed by the Department of Promotion of Industry and Internal Trade and the Ministry of MSMEs. These sectors are particularly important as they employ over 247 million people amidst India’s ongoing job-creation challenges. Expected initiatives include more robust financial backing under existing DPIIT and MSME schemes. India's top IT firms are charting different courses in their AI journeys. Companies such as Infosys and Tech Mahindra are crafting small AI models that are perfect for specific, cost-sensitive tasks. These smaller models use less data, making them quicker and cheaper to operate. For instance, Infosys has created distinct models for industries such as banking and cybersecurity by combining their rich internal data with some carefully selected external datasets. Meanwhile, other players such as Tata Consultancy Services, Wipro, and HCL Technologies are choosing to expand on existing, broad-scope AI tools known as large language models (LLMs). Jas Bardia writes that this highlights a fundamental choice in AI development between specialisation and scalability. Smaller models offer precise solutions at lower costs, while larger models deliver extensive capabilities but come with higher operational expenses and risks.At Prayagraj's Maha Kumbh Mela, a grand spiritual gathering attracting over 400 million visitors this year, businesses are seizing the opportunity to cater to the massive influx. The festival, held once every 12 years, not only promises spiritual fulfilment but has also turned into a bustling economic hub. According to Sprout Research, the event is expected to generate financial transactions worth around $30 billion. Amidst this, social media influencers are earning significant sums by promoting everything from local businesses to spiritual activities. They look to capture the festival's essence through videos and posts, and charge up to ₹30,000 for a single post. Local tour operators are also capitalizing on the event, offering packages that include holy dips with sadhus for anywhere from ₹50,000 to ₹1 lakh. Even large corporations and banks such as the Reserve Bank of India and Bank of Baroda are using the event to promote digital privacy, cybersecurity and digital payments. Advertising has spiked, with costs for promotional spaces significantly higher than in previous years. Read Devina Sengupta’s detailed report on India’s unique mela economy from the grounds of the Mahakumbh in Prayagraj. India's bullet train network is set to expand, with the government planning to create new high-speed rail corridors across the country. According to railway minister Ashwini Vaishaw, this expansion will harness indigenous technology developed in collaboration with Japanese experts, building on the experience gained from the Mumbai-Ahmedabad project. The National High Speed Rail Corporation Ltd has already identified seven additional corridors, with detailed project reports for most of them submitted or scheduled for completion soon. This initiative aims to connect major cities via a golden quadrilateral of bullet trains, enhancing connectivity and reducing travel times significantly. The government is also focusing on increasing the indigenization of high-speed rail technology to reduce costs and promote local manufacturing. There are also plans to upgrade the domestically produced Vande Bharat trains to higher...
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