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India's worst period of macro instability is possibly over, and both consumer inflation and trade deficit are expected to moderate albeit gradually, Morgan Stanley said.

"Global commodity prices were largely steady last month, with the exception of oil prices which continued to decline," Upasana Chachra, chief India economist at Morgan Stanley, said in the note on Wednesday.

"We believe the worst of macro instability is behind us now, though moderation in inflation and narrowing of India's trade deficit will be gradual."

The note pointed out that the indexes measuring global commodity prices, food prices and metal prices had stabilised in August and were down 9%-25% from their peak. Oil prices, meanwhile, had declined 8% month-on-month.

"These fuel-related global commodities constitute 13.2% of India's CPI (consumer price index) and 33.8% of the WPI (wholesale price index) basket," Chachra said. The rupee had also been relatively stable in August, she said.

Chachra reckons India's consumer inflation rate will rise to 7%-7.2% in August and remain at 7% in September before moderating gradually. The inflation rate has remained above the Reserve Bank of India's tolerance band for seven straight months.

The research house reckons India's trade deficitit likely peaked at $30 billion in July. The record trade deficit has prompted economists to revise India's current account deficit and balance of payments projections.

"We believe that lower commodity prices and a partial roll back of taxes on petroleum products will help improve the trade balance trend," Chachra said.

Telecom companies were issued allocation letters within hours after paying the first installment for 5G spectrum, prompting Bharti Enterprises Chairman Sunil Bharti Mittal to praise the government for the ease of doing business.

“No fuss, no follow up, no running around the corridors and no tall claims. This is ease of doing business at work in its full glory. In my over 30 years of first-hand experience with the DoT (Department of Telecommunications), this is a first! Business as it should be,” Mittal said in a statement on Thursday.

Telecom companies paid over Rs 17, 873 crore towards 5G spectrum dues.

Nearly half of the amount (Rs 8,312.4 crore) was paid by Bharti Airtel, which made advance payments for four years to free up cash for future investments.

Mittal said Airtel was provided the allocation letter for the designated frequency bands within hours of payment. E band allocation was given along with spectrum as promised.

“Leadership at work—right at the top and at the helm of telecom. What a change! Change that can transform this nation – power its dreams to be a developed nation,” Mittal said in his statement.

Airtel, which plans to roll out commercial 5G service later this month, acquired 19,867 MHz of spectrum in various bands worth Rs 43,084 crore in the recent auction of 5G spectrum. This includes spectrum in 3.5 GHz, 26 GHz, and certain low and mid-bands.

India’s government is studying a slower retirement of aging coal-fired power plants as it also adds newer sites, a move that would keep fossil fuel capacity higher for years and potentially stall efforts to hit climate goals.

Officials are considering a proposal to shutter less than 5 gigawatts of existing capacity by the end of the decade as the nation grapples with surging electricity demand and a global energy shortage, according to people familiar with the matter. That compares with plans drawn up in 2020 that proposed shuttering about 25 gigawatts by the same date.

Spokespeople for India’s power ministry and environment ministry didn’t respond to emails and text messages seeking comment.

India currently has about 204 gigawatts of coal power capacity and the plans under discussion would see that total expand to more than 250 gigawatts over the next decade, according to two of the people, who asked not to be named as the discussions are private. No final decisions have been made, the people said.

“Any rupee invested in new coal infrastructure takes India away from its net zero goals,” said Sunil Dahiya, an analyst with the Centre for Research on Energy and Clean Air, which supports the faster adoption of less-polluting fuels. “It will load the power system with redundant capacities and hinder investments in clean power projects.”

A pipeline of 30 gigawatts of coal projects that are in advanced stages of construction should be used to replace old and inefficient plants, and India should prioritize investments in expanding its grid and on decarbonization projects, Dahiya said.

Under the proposals being considered, India’s coal plants -- which currently account for almost 70% of electricity generation -- would continue to handle peak evening power demand, even as solar and wind projects become increasingly able to fulfill day-time requirements, according to the people.

The world’s third-largest emitter doesn’t envisage hitting net-zero until 2070, and is aiming only for half of its electricity generation capacity to use clean fuels by 2030, giving the nation scope to continue relying on coal for decades more. Together with China, India frustrated efforts to set a date to phase out the use of unabated coal power at last year’s Glasgow climate talks.

Prime Minister Narendra Modi’s government aims to build 500 gigawatts of clean power capacity by 2030, and to ultimately become a global hub for solar, energy storage and green hydrogen. In the shorter term, ministers are seeking to ensure stable energy supply to consumers and industry.

With gas prices stubbornly high, many new hydropower projects proving too complex and a planned roll-out of renewables in its early stages, policymakers see a need to extend reliance on the country’s coal fleet. Other nations globally have also been responding to high demand and severe shortages of natural gas by burning more coal.