??Strong equity inflows depot market pain, tax reforms and SC's stern freebie warning ?? Read it all in our Editor's Picks Newsletter!

Dear Reader,

A dramatic rebound on the markets after they plunged to new lows earlier today provided some relief for harassed Indian investors. The Sensex recovered nearly 800 points from the day's low,?ending just 44 points down from yesterday, reports Neeshita Beura. Perhaps the confidence booster came from strong equity mutual fund inflows in January, defying market volatility and expectations. New mutual data released today show that inflows totalled Rs 39,688 crore last month, reports Abhinav Kaul. Of this, systematic ?investment plans or SIPs contributed Rs 26,400 crore. Kaul writes that despite warnings about overvaluation, the riskier smallcap and midcap funds saw record-high inflows, with Rs 5,720.87 crore and Rs 5,147.87 crore, respectively.

Turning to tax reforms, the new income tax Bill, set to be introduced in Parliament tomorrow, promises to simplify compliance and make life easier for taxpayers. The bill will replace the confusing "assessment year" with a straightforward "tax year", aligning with the financial year from April 1 to March 31, reports Meghna Mittal. Additionally, the bill will update rules for digital transactions and cryptocurrencies?and will consider virtual digital assets as "undisclosed income" during searches.

A day before meeting US President Donald Trump, Prime Minister Narendra Modi sealed a deal with French President Emmanuel Macron for India and France to jointly develop advanced nuclear reactors, reports Moneycontrol. Modi now heads to Washington at a time when Donald Trump is demolishing ?the established rules of the global order with a sledgehammer. Defence analyst Shruti Pandalai breaks down what’s at stake for India in Washington?as it seeks to prioritise its asks on advanced technologies and weapons with Trump's transactional approach. Also check out Vivek Y Kelkar’s long view piece on the importance of Modi’s Washington visit for India’s strategic positioning, especially in the context of US-China rivalry.

In economic news, the Reserve Bank of India's decision to cut interest rates for the first time in five years seems to have paid off as retail inflation cooled to a five-month low of 4.31 percent in January, reports Ishaan Gera. The RBI is projecting inflation to settle lower in the coming months, with an estimate of 4.5 percent in the first quarter of the next fiscal year and further easing to 4 percent in the following three months and 3.8 percent in the third quarter. This slowdown in inflation could pave the way for further rate cuts.

In deals news, Prudential Plc is weighing an IPO for ICICI Prudential Asset Management, a move that could unlock significant value for the British insurer's Indian unit. ICICI Prudential is India’s second largest asset management company - with assets under management of Rs 8.67 lakh crore - and ?the listing may involve a partial divestment of Prudential's shares, reports Ashwin Mohan.

In the oil sector, ?state-run Bharat Petroleum ?is in ?talks with Saudi Arabia for a 15-20-year crude oil supply pact for its upcoming ?refinery in Andhra Pradesh. This deal could see BPCL diluting a 20-25 percent stake for a joint venture, reports Shubhangi Mathur. The talks are still in the preliminary stages, but if successful, this partnership would be a major step in India's plans to boost its refining capacity.

As gig work becomes the new norm, a new report shows that?India’s gig worker population has shot up by 30 percent over the last five years?to hit 10 million. More than three-quarters of Indian gig workers earn less than Rs 2.5 lakh per annum, reports Aryaman Gupta.

And finally, as politicians vie for votes by freely offering freebies, the Supreme Court today called out the practice in rather strong language, saying it's creating a "class of parasites"?who rely on handouts. Ishaan Gera's analysis shows that the Delhi government's welfare programmes, including the cash guarantee scheme for women, will require an additional Rs 13,000 crore in funding. What's more, Maharashtra and Bihar may struggle to afford similar schemes, with Maharashtra expected to spend an additional Rs 35,000 crore to fulfil poll promises and Bihar facing a burden of nearly 1.3 percent of its state GDP if it implements a Rs 2,500 handout to poor women.

Regards,

Nalin Mehta

Managing Editor

Moneycontrol