AIR SURCHARGE OF RS 4.00 FOR AGARTALA, RS 6.00 FOR PORT BLAIR & SILCHAR AND RS 5.00 FOR GUWAHATI & IMPHAL KOLKATA l WEDNESDAY l JANUARY 11 l 2017 VOL XXVI NO 62 I 18 PAGES I Rs 5.00 READ TO LEAD Former RBI governor Jalan bats for central bank autonomy Comes a day after another ex-governor, Reddy, flagged ‘reputational risk’ Page 10 INDICES Closing Up/down S&P BSE Sensex 26,899.56 ▲173.01 CNX Nifty ▲ 52.55 8,288.60 No treaty benefits for nations that fail to sign new BIT pact INDIA said investments from the countries which fail to renegotiate investment protection agreement by April 1 will not get any benefit under any treaty, reports fe Bureau in New Delhi. The Centre said all nations, including EU, were advised well in advance to renegotiate those pacts on the basis of the new draft text of bilateral investment treaty (BIT). Prabhu comes out with steps to boost non-fare revenue TO boost the non-fare revenue and digital transactions in the Indian Railways, Union minister Suresh Prabhu on Tuesday inaugurated various initiatives, reports fe Bureau in New Delhi. Initiatives such as advertising on trains and other assets, including bridges and setting up of ATMs were announced. 2016 fuel sales growth highest in at least 16 years INDIA’S fuel demand in 2016 grew at its highest pace in at least 16 years as low oil prices for most of the year boosted demand, reports Reuters. Consumption of fuels, a proxy for oil demand, surged 10.7% to 196.48 million tonnes in 2016. However, refined fuel demand grew at 4.3% in December, its slowest pace in three months. FE Specials FinancialExpress.com E-trade funding at three-year low ■ Inflow in ’16 a tad above that in a ’15 quarter fe Bureau Mumbai, Jan 10 M ONEY raised by internet companies dropped to a three-year low in the December quarter, with less than $300 million coming in. In fact, funds were hard to come by in 2016 and the $2.7 billion that was invested was 50% lower than the amount invested in 2015. For a perspective on how cautious investors have become, they had infused $2.6 billion in a single quarter in the three months to September 2015. According to Jefferies, e-retailers will focus on profitability this year; the brokerage believes consolidation in the sector would continue. Market watchers point outtheslowdowninfunding is not surprising given the large losses posted by e-commerce players in 2015-16. A clutch of 14 companies, which included e-retailers, furniture sellers, travel portals and food ordering and delivery players, reported losses of R10,670 crore in 2015-16, up 138%, according to Kotak InstitutionalEquities. While players were able to grow their top lines, the increase in FY16 was similar to that in the previous year, indicating that businesses were not being scaled up quite as fast as expected. In fact, going by the sharp jump in expenses on advertising and promotions, revenues were heavilydependentonthese. $260 mn raised in 3QFY17 vs $1bn+ in most of the quarters in last FY PE/VC funding raised by Indian internet companies ($ mn) 79 163 317 294 383 2,648 1,829 1,479 1,331 900 Note: Only deals in internet sector of $5 mn and above considered Source: Jefferies, Media reports 476 The share of e-tailing in the fund-raising in 2016 shrank from a peak of 74% in 2014 to 37%. Among the segments that gained share were travel, social networks, services, fintech and classifieds. For instance, Hike was able to pull in $175 million while Ibibo attracted $250 mil- 784 453 263 lion. Mobikwik raised $90 million and Byju’s Classes mopped up $140 million. Analysts at Jefferies say the spaces that are likely to attract infusions this year are fintech and online content. According to PwC, the funding of fintechs — across the globe — more than doubled in 2015 to $12.2 billionupfrom$5.6billionin 2014. In India, investments rose to $1.2 billion in 2015 from$145millionin2014. Post-demonetisation, electronic transactions have been on the rise and the increasing popularity of channels such as the Unified Payments Interface, together with the larger number of smartphones in use, is expected to further digital transactions. India's payments market (excluding interbank clearing and CCIL) is expected to see rapid changes in payments channels while growing at around 12% compounded, from an estimated $15.5 trillion in FY15, Bank of America Merrill Lynch notedinareport. Edit PAGE 8 IS THE DOLLAR RALLY ENDING? Deceleration due to demonetisation Auto sales in December slipped to a 16-year low The US trade deficit ain’t going away any time soon, and the market knows it JamalMecklai Car sales at Total vehicle sales at 12,21,929 units declined 18.66% compared to same month last year Passenger vehicle sales at 1,58,617 units 2,27,824 units Two-wheeler sales at Scooter sales at units declined 22.04%: Sharpest since 1997 declined 26.38%: Biggest since March 2001 declined 8.14%: Lowest since April 2014 9,10,235 Exclusive PAGE 16 POLISHING THE FLOOR Supervisors put off finalising reforms to bank-capital rules Motorcycle sales at 5,61,690 units declined 22.5%: Biggest since Dec 2008 The I-T department is busy scrutinising post-demonetisation deposits of potentially tax-evaded income in banks. While the depositors can report these evasions and come clean by paying 50% tax and letting 25% be locked in for 4 years under Pradhan Mantri Garib Kalyan Yojana 2016, the taxman can slap stiffer penalties in other cases Likely tax-evaded income deposited in banks in demonetised currencies Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec 2013 2014 2015 2016 Illustration: SHYAM Notes, note ban and the numbers R3-4 lakh cr 1,190 1,024 declined 1.36%: Biggest since October 2014 2,84,384 units Commercial vehicles sales at 53,966 units declined 5.06% Source: SIAM QUICKPICKS PropTiger, Housing.com to merge: Statement All CFI benefits, services may need Aadhaar soon Centre to raise up to R6,000 cr via ETF FFO PROPTIGER.COM and Housing.com will merge to create what the companies said would be the biggest player in the segment, reports Reuters. News Corp is PropTiger’s biggest shareholder, while SoftBank Group is the largest investor in Housing.com. As part of the deal, Australia’s REA Group, 61.6% owned by News Corp, will invest $50 million in the combined entity, while an affiliate of SoftBank will invest $5 million, a joint statement said. ■ P6 DON’T be surprised if in the near future filing a police complaint would require a person to produce his or her Aadhaar number as all services, benefits and subsidies that are paid out of the Consolidated Fund of India will necessarily require the unique identity, reports Saurabh Kumar in New Delhi. After making Aadhaar must for availing senior citizen discount on railway tickets, MGNREGS and Employees’ Provident Fund, the government may soon make Aadhaar a required identity proof for all such services. ■ P2 AFTER a gap of nearly three years, the Centre will raise up to R6,000 crore via a follow-on fund offer of an existing CPSE exchange-traded fund this fiscal, reports fe Bureau in New Delhi. The issue will be open for subscription from January 17 to 20. “The ETF FFO issue size (is of) R4,500 crore plus green-shoe option of R1,500 crore,” an official said. As much as 5% discount would be given to investors while the issue would open for anchor investors on January 17. ■ P2 International, Page 16 International, Page 16 P U B L I S H E D F R O M : A H M E DA B A D, B E N G A LU R U, C H A N D I G A R H , C H E N N A I , H Y D E R A B A D, KO C H I , KO L K ATA , LU C K N OW, M U M B A I , N E W D E L H I , P U N E In the news SPOTIFY OFFERS OBAMA JOB AS ‘PRESIDENT OF PLAYLISTS’ TRUMP’S SON-IN-LAW KUSHNER NAMED SENIOR WHITE HOUSE ADVISER 60 lakh Accounts received >R2 lakh R7.34 lakh cr Total deposits in these accounts R10,700 cr Deposits in 7 northeastern states R16,000 cr Deposited in co-op banks R25,000 cr Deposits in dormant accounts, including Jan Dhan accounts R80,000 cr Repayment of loans using demonetised currencies (All figures for the 50-day window till Dec 30 for depositing cash in demonetised currencies) Source: PTI twitter.com/FinancialXpress facebook.com/TheFinancialExpress FinancialExpress/Apps Bharti files additional affidavit with TDSAT in Trai, Jio fight fe Bureau New Delhi, Jan 10 I NTENSIFYING its attack on the Telecom Regulatory Authority of India for being a mute spectator to the gross violations committed by Reliance Jio Infocomm of all its regulatory orders, Bharti Airtel on Tuesday filed an additional affidavit in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) charging the regulator with killing competition in the sector just for the sake of one operator. Bharti had on December 23 moved TDSAT against Trai for not acting against Jio despite the latter violating its regulatory orders that restrainoperatorsfromoffering free voice calls and providing its promotional plan beyond aninitial90-dayperiod. TDSAT has asked Trai to furnish a reply for which the latter has sought some time even as it has sent a notice to Jio. The next date for hearing the matter is February 1. Meanwhile, TDSAT has allowed Jio to also become party to the case so the the operator will also be filing its application on the matter. “It is respectfully submitted that the present appeal is What’s Bharti’s complaint against Trai? That it has allowed Jio to offer free voice calls for life Regulation says call rates cannot be lower than 14 paise per minute ItsaysthatJiohasbeenallowedtooffer promotionalofferbeyond90-dayperiod Allowing such anti-competitive measures will drive out competition So, Trai is failing in its duty as a regulator Onfreevoicecalls ....The IUC regime specified by the Authority reflects the underlying costs providing the service. Also, the IUC charges as specified will implicitly function as a floor to the retail tariffs and thereby scope for predatory pricing or crosssubsidization is limited” —TTO 2004 quoted by Bharti in its original petition at a very initial stage and pleadings are yet to be completed. The appellant is filing the present additional affidavit only to bring on record certain additional grounds of challenge. Since the present appealisataninitialstageand the pleadings are yet to be completed, no prejudice whatsoever will be caused to the respondent if the present affidavit is taken on record. Moreover, the said grounds are essential to the adjudication of the present appeal and thus grave prejudice will be caused to the appellant if the present affidavit is not taken on record,” Bharti has said in itsadditionalaffidavit. Bharti has once again alleged that the free services being offered by Jio are predatory as they have been introduced only to kill competition rather than encourage it. It has said that the free voice services, given that they are being offered at below the interconnect usage charge (IUC) fixed by Trai itself, are intended to solely drive out competition. ■ Continued on Page 2
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