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The <keyword id="21627536" type="General" weightage="100" keywordseo="gold-loan-market" source="keywords">gold loan market</keyword> in <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> is on the cusp of substantial growth, driven by rising per-gram gold rates and increasing customer demand. Currently, the market is predominantly controlled by the <keyword id="21485305" type="General" weightage="20" keywordseo="unorganized-sector" source="keywords">unorganized sector</keyword>, which holds a 63 % share, while <keyword id="22789155" type="General" weightage="20" keywordseo="organized-players" source="keywords">organized players</keyword>, including banks and Non-Banking Financial Companies (<keyword id="19938300" type="General" weightage="20" keywordseo="NBFCs" source="keywords">NBFCs</keyword>), account for the remaining 37 %, according to a recent <keyword id="20055667" type="General" weightage="20" keywordseo="PwC" source="keywords" meta.keywordsubtype="org" meta.entityname="PwC" meta.hostid="83" meta.entityid="PwC">PwC</keyword> report. Indian households are estimated to possess approximately 25,000 tonnes of gold, valued at around Rs 126 lakh crore. Despite this vast wealth, the existing gold loan market through organized channels is valued at just Rs 7.1 lakh crore. With the market penetration of gold loans in India currently at only 5.6%, there is considerable untapped potential within <keyword id="22902023" type="General" weightage="20" keywordseo="household-gold-holdings" source="keywords">household gold holdings</keyword>. Although not all gold is available for pledging--due to factors such as religious significance, emotional value, or lack of financial need--there remains substantial opportunity for growth in the gold loan sector. The gold loan market in India has historically been dominated by the unorganized sector. However, in recent years, organised players, particularly NBFCs, have begun to gain market share. Banks, too, have been making inroads, especially through retail gold loans and a continued focus on agricultural gold loans. This shift is expected to continue as organised players leverage their formal lending structures, transparency, and customer trust to capture a larger share of the market. Shaji Varghese, CEO, Muthoot FinCorp Limited, "Gold loan assets have been growing steadily and the potential to grow further is high since a major part of the country's gold loan market is still in the unorganized sector. <keyword id="19910265" type="General" weightage="20" keywordseo="gold-prices" source="keywords">Gold prices</keyword> have been rising over the years. There is also a paradigm shift on how buying gold is perceived today. Traditionally gold was purchased for historical, cultural and societal reasons and while that continues, people have started buying gold as an investment and also as a convenient option to raise funds for financial requirements." India remains one of the world's largest consumers of gold, with total demand reaching 747 tonnes in 2023. However, this represented a 3% decrease compared to the previous year, primarily due to the surge in gold prices, which dampened demand for gold jewellery. The price of gold in India increased from Rs 55,375 to Rs 66,532 per 10 grams (22 carats) between November 2023 and May 2024, prompting a shift towards lightweight or lower-carat jewellery items. Globally, the demand for gold grew by 3 % in 2023, with China emerging as the largest market. The global market's expansion presents opportunities for Indian gold loan financiers to explore new avenues for growth beyond domestic borders. Gold's relationship with the US dollar is a key factor influencing gold prices in India. A weakening rupee often leads to an increase in gold prices, as gold is priced in USD internationally. This dynamic drives higher imports and increases the cost of gold in rupees, further fuelling demand as investors seek a safe haven against currency fluctuations. V.P. Nandakumar, Managing Director and Chief Executive Officer, Manappuram Finance Ltd, "Of late, the sharp increase in gold prices has imparted some stability to the gold loan book of most players and we do not expect gold prices to come down due to geo-political factors, the accumulation of gold by central banks as well as the lasting allure of the yellow metal." The securitisation of gold through various financial instruments offers new avenues for gold loan players to diversify their offerings. By using gold-based security as collateral, established players can introduce new loan products that leverage the intrinsic value of physical gold.

India's gold loan market set for rapid growth amid rising prices; unorganized sector holds 63% share, notes recent PwC report

<keyword id="175632" type="UNKNOWN" weightage="20" keywordseo="MSME-sector">MSME sector</keyword> is one of the most neglected sectors with respect to public policy but has immense potential. It is because MSMEs are the backbone of any industrial economy. Across the world, most transformations have happened on the back of robust industrial sector, and MSMEs have played a critical role in these transformations. 
 In India, the <keyword id="6395867" type="UNKNOWN" weightage="20" keywordseo="manufacturing-sector">manufacturing sector</keyword> has been lagged behind and the government has envisaged an ambitious '<keyword id="6354869" type="UNKNOWN" weightage="20" keywordseo="make-in-India">Make in India</keyword>' program to give the sector a boost. The 'Make in India' program cannot do well without the MSME sector overall doing well because the sector, at present, provides employment roughly to one in 15 people in India and is responsible for roughly 45 per cent of India's exports. Despite all this, the sector remains highly troubled. 
 
It is because there are several unique problems that the sector faces in India. Most of these emanate from the fact that roughly 95 percent of enterprises in the sector are still unregistered. It means these enterprises are outside the ambit of formal schemes and programs of the government. 
 
For this, the government recently launched the Udyog Aadhar Scheme, which aims to register unregistered enterprises and bring them with the ambit of schemes and policies of the government. It is a major initiative and may help enterprises become part of the formal system. 
 
The second issue is that the unorganized nature of the sector results in the lack of marketing support at the national and international level and lack of integration in the global value chains. It has resulted in restriction of goods and services to only local markets that results in loss of revenue to the people employed in the value chain of the overall network. A collaborative approach between the stakeholders of the MSME ecosystem can help in improving quality as well as give an access to markets for a large number of MSME enterprises. 
 
The third major issue is the feeling of trust between an agglomeration of firms/enterprises and even between a firm and the government. 
 
Firms feel that the government is taking information from them to get taxes or harass them rather than to build a database for helping the enterprises achieve their true potential. It is even seen in the last year's national innovation survey that saw a large amount of enterprises talking about government as a major barrier to innovation. 
 
Also, another major problem is with respect to labour laws in the sector, which makes the firms perceive the government as a problem rather than as a helper/collaborator. The inhibition of trust has hampered and continues to hamper the growth of the MSME sector and the Indian economy. 
 
Fourth is the issue of credit flow to the sector. The RBI has adopted the recommendations of the PM's task force on MSMEs in 2010 and continues to use it for schemes to benefit MSME sector, but the implementation of these by banks and benefits to the individual firms are seen as major challenges that are seen on the ground. 
 
Fifth issue is innovation in the MSME sector. India's overall approach to innovation in MSMEs has been built around the idea that technology and R&amp;D are innovation. While technology and R&amp;D can be used to support or result in innovation, they are not innovation. Similarly, some government institutions and MSME sector are misaligned. It is because government CSIR labs produce technologies and R&amp;D that is very rarely taken up by the MSME sector. It makes R&amp;D and innovation in MSME's quite antithetical. 
 
Finally, there are several institutions at the innovation level in the country that are simply defunct. These include institutions like the National Innovation Council and the National Manufacturing Competitiveness Council (NMCC) that are without the head of institutions at present. These should see appointments at the earliest or should be completely dismantled. 
 
Over the next few decades a critical factor in making India competitive will be making MSMEs competitive. It will happen only when the government and firms resolve some of the issues mentioned here. A process driven and systematic approach to bridging the trust deficit will help MSME become more competitive. 
 
(The article is co-authored with Sankalp Sharma, Senior Researcher at the Institute for Competitiveness, India. Amit Kapoor is Chair, Institute for Competitiveness &amp; Editor of Thinkers. The views expressed are personal. Amit can be reached at <a href="mailto:amit.kapoor@competitiveness.in">amit.kapoor@competitiveness.in</a> and tweets @kautiliya)

Here’s why the MSME sector is lagging behind

E-tailers like <a href="http://www.businessinsider.in/searchresult.cms?query=Flipkart%2C+Amazon">Flipkart, Amazon</a> and <keyword id="964794" type="COMPANY" weightage="100" keywordseo="BigBasket">BigBasket</keyword> want to satisfy their customers by fulfilling their demands on time and for that they need commercial vehicles. They have found a suitable ride in on-demand truck despatch platforms, keeping a closer tab on shipment costs. 
 
Around a dozen <a href="http://www.businessinsider.in/searchresult.cms?query=commercial-vehicle+aggregators+">commercial-vehicle aggregators</a> have sprung up because e-Commerce is appearing as a promising business segment for steady revenues. Their business is to get trucks on a mobile platform and let customers hail away as they would do for a cab. 
 
It is a technology access point for a highly unorganized but lucrative market estimated to be around Rs 39,000 crore ($6 billion), the money aggregately earned by light commercial vehicle operators in one year. 
 While there are seniors in the business like Mumbai's The Porter and Shippr in <keyword id="6354321" type="CITY" weightage="20" keywordseo="Bengaluru">Bengaluru</keyword>, Chennai's home-grown player GoGo Truck entered e-Commerce within six months into the business. 
 
GoGo Truck has about 200 trucks on its platform. It is expanding its business into smaller cities such as Coimbatore and Erode. The company has contracts with <a href="http://www.businessinsider.in/searchresult.cms?query=e-Commerce+">e-Commerce</a> majors <keyword id="18635" type="CITY" weightage="100" keywordseo="Amazon">Amazon</keyword> and BigBasket for dedicated trucks. 
 
While Amazon will utilize GoGo Truck for movement between its fulfillment centers, <a href="http://www.businessinsider.in/searchresult.cms?query=e-Commerce+">BigBasket</a> is planning to go beyond — using commercial vehicles for linking the last mile. 
 
Having a dedicated fleet on demand will rid e-Commerce firms of the task of deciding prices with individual fleet owners or last-minute haggling at the eleventh hour. "The advantage in this model is the stability of pricing and tracking. If you need a Tata Ace or an <a href="http://www.businessinsider.in/searchresult.cms?query=Ashok+Leyland">Ashok Leyland</a>…in half an hour, it is possible in this model," says A Vasister, Founder and CEO of GoGo. 
 
Amazon Logistics is working with over one vehicle aggregator helping in transport within, and between, cities. It believes vehicle tracking has levers focused on the customer. 
 
Samuel Thomas, director transportation at Amazon India, is of the opinion that in case of inter-city deliveries, the GPS can be a big game changer as it enables us to track the vehicles' movements and helps in managing and tracking the inventory. “Additionally, it enhances route planning and thereby timeliness of deliveries. We can also keep the customer informed,” he said. 
 
Pranav Goel, the entrepreneur at the helm of The Porter, says his trucks can offer data to clients about the loading and unloading capacities of their hubs. With every stop or breakdown and the idle periods captured real-time, e-tailers can know which hubs suffer delays in cargo handling. 
 
"More hubs mean less visibility at every node of the supply chain. This leads to cost leakages in the system. The data we provide can help them spot congested hubs," said Goel. His company recently completed a Rs 35-crore Series-A round. 
 
(Image: Indiatimes)

Flipkart, Snapdeal and Amazon’s rapid growth is fuelling startups in an unassuming sector

<ul><li>Around 25% of the organizations are planning to include <keyword id="60251" type="General" weightage="20" keywordseo="variable-pay" source="Orion">variable pay</keyword> in the wage definition.</li><li>One out of three organizations in <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword> are also likely to increase the <keyword id="312732" type="General" weightage="20" keywordseo="basic-pay" source="Orion">basic pay</keyword>, as per <keyword id="11979993" type="General" weightage="20" keywordseo="WTW-report" source="Orion">WTW report</keyword>.</li><li>40% of organizations are expecting to have a significant impact on their profit and loss statement due to gratuity.</li></ul>Companies in India are still adapting to the new Labour Code, which will be implemented from July 1 this year. However, a majority of organizations are reviewing retirement or long-term benefits and looking for new ways to package them. In fact, 25% of the organizations are planning to include variable pay in the wage definition. But, a similar percentage of them are also unsure about what to do, reveals a new WTW report on ‘State of Retirement benefits in India’. Variable pay is also known as performance pay and is given to an employee based on the results of their performance. It is usually offered in addition to the employee's fixed salary on completion of certain targets. One out of three organizations in India are also likely to increase the basic pay as a part of the new wage code. The four <keyword id="9986984" type="General" weightage="20" keywordseo="New-labour-codes" source="Orion">new labour codes</keyword> approved by the President of India are — Code on <keyword id="6356975" type="General" weightage="100" keywordseo="wages" source="Orion">Wages</keyword>, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. These four codes will replace the existing 29 labour laws in India. Code on Wages will ensure timely payment of salaries and wages both in organized and unorganized sectors. Industrial Relations Code expands the definition of worker to be included under — skilled, unskilled, manual, technical, clerical and operational workers. Code on Social Security is about social security schemes like EPF, EPS, ESI — which are beneficial to the employees and workers. <cmsannotation type="cmsannotation" annotationid="Gratuity pay would rise" comment="subhead" text="Gratuity pay would rise">Gratuity pay would rise</cmsannotation> According to the report, 40% of organizations are expecting the code to have a significant impact on their profits; and are considering options to update their gratuity policy to mitigate the impact. While 28% say that they will not change their gratuity policy and are not expecting any change in their P&amp;L. Gratuity benefits are projected to have the largest impact in the new definition of wages. It is paid to employees who exit their companies after working for over five years. In the new code, the gratuity is expected to increase significantly, particularly for organizations where the basic pay to gross pay ratio has been quite low previously. <cmsannotation type="cmsannotation" annotationid="No change in PF contributions" comment="subhead" text="No change in PF contributions">No change in PF contributions</cmsannotation> The report further suggests that over 46% of the organizations would continue to contribute 12% of basic salary as per prevailing regulation in the provident fund. However, 8% say that they will restrict the PF upto ₹15,000 per month. As many as 32% of the organizations are unsure about what to do with the provident funds for its employees, says the report. During COVID-19 pandemic, a lot of companies had provided extra sick leaves to their employees as the infection required proper isolation and rest. This has led three out 10 organizations to restructure their leave policies, the report says. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/mid-cap-stocks-will-remain-under-pressure-for-few-more-months-say-experts/articleshow/92387603.cms">Mid cap stocks will remain under pressure for few more months, say experts</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/article/not-just-health-tobacco-products-also-degrades-ecosystem-integrity-who-report/articleshow/92380121.cms">Not just health, tobacco products also degrades ecosystem integrity: WHO report</a>

One in four organizations plan to make variable a part of the wages

<ul><li>“McDonald’s India is now set to dominate the <keyword id="1300827" type="PERSON" weightage="20" keywordseo="fried-chicken">fried chicken</keyword> market,” read its press statement. </li><li>The food giant is eyeing to capture both organised and unorganised markets. </li></ul>After UK and US-based chains like Southern Fried Chicken, Texas Chicken and Genuine Broaster Chicken re-entered India to eat into <keyword id="6376241" type="ORGANIZATION" weightage="20" keywordseo="kfc">KFC</keyword>’s market, the recent addition in the race is <keyword id="126895" type="CITY" weightage="20" keywordseo="McDonald">McDonald</keyword>’s India. The food giant has forayed into the fried chicken category, a market that KFC is known for. Globally, take-Out Fried Chicken Market is expected to register a CAGR of 5.47% to reach USD 8,252.9 Million by 2025. Whereas in India, the organised fried <a href="https://www.thehindubusinessline.com/companies/in-their-second-coming-global-chicken-chains-look-to-take-on-kfc-in-india/article9766123.ece#:~:text=%E2%80%9CThe%20organised%20fried%20chicken%20segment,CAGR%20of%2020%20per%20cent.">chicken </a>segment is estimated at ₹1,500 crore, growing at a CAGR of 20 per cent. Speaking on the brand’s foray into this new Chicken category, Smita Jatia, MD, Hardcastle Restaurants Pvt Ltd said, “Since our inception, we have been leading menu innovation to offer our customers products that are unique and clutter-breaking. The new McSpicy Fried Chicken has been launched post very extensive and comprehensive customer research that revealed that our customers in South India like their chicken to be crunchy, spicy and flavourful till the last bite, and we gave them just that. Through this new offering, we aim to recruit new customers from both the organized and the unorganized sector. We are very encouraged by the customer response and are excited about the opportunities that lie ahead.”

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India's gold loan market set for rapid growth amid rising prices; unorganized sector holds 63% share, notes recent PwC report

ANI

Here’s why the MSME sector is lagging behind

Amit Kapoor

Flipkart, Snapdeal and Amazon’s rapid growth is fuelling startups in an unassuming sector

BI India Bureau

One in four organizations plan to make variable a part of the wages

Vaamanaa Sethi

McDonald's eyes to capture KFC's market with the launch of Fried Chicken in India

BI India Partner

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