OPINION, P8 COMPANIES, P6 FIRST OFFER BY COMPANY The new normal: Less rain and floods in the same area within days JanDhan has done very well, but can do much better if food subsidies are routed through it POST-KALANICK Infosys: Some promoters may take part in buyback EDITORIAL INTERNATIONAL, P16 Uber picks Expedia’s Dara Khosrowshahi as next CEO NEW DELHI, TUESDAY, AUGUST 29, 2017 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOLUME XLIII NO. 154, 22 PAGES, `5.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U 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 , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E READ TO LEAD SENSEX: 31,750.82 ▲ 154.76 NIFTY: 9,912.80 ▲ 55.75 NIKKEI 225: 19,449.90 ▼ 2.71 HANG SENG: 27,863.29 ▲ 15.13 `/$: 63.91 ▲ 0.12 `/€: 76.24 ▼ 0.72 BRENT: $52.58 ▲ $0.17 GOLD: `29,140.00 ▼ `261.00 EARLY GST ESTIMATE `65,000 cr collected for July 36.5 lakh Businesses registered on GSTN, including 71 lakh migrants and 16 lakh new taxpayers 87 lakh Those who have paid GST for July by Monday morning `12,000 crore Likely monthly proceeds from cess on demerit goods meant for states’ compensation SUMIT JHA New Delhi, August 28 IN THE NEWS Dera chief gets 20 years in jail for two rapes GOING BY THE initial trend of tax collections under the goods and services tax (GST), the government seems to have little to worry about on the revenue front. The new regime could be revenue-neutral,if not revenueenhancing. Even as 40% of the 87 lakh taxpayers registered on the GST Network (GSTN) filed their returns and paid taxes, about `65,000 crorewas collected,PTI reported early on Monday. Ex- A SPECIAL CBI court on Monday sentenced Dera Sacha Sauda chief Gurmeet Ram Rahim Singh to 10 years each in prison after his conviction in two rape cases, reports PTI. Both 10-year sentences will run consecutively for a total of 20 years in jail. ` 8.8 lakh crore The estimated total GST-equivalent tax base in 2015-16, equally divided between Centre and states; 14% annual growth over this is termed revenue-neutral ILLUSTRATION: SHYAM trapolating this figure for all 87 lakh GSTN registrants, the collections would reach `1,62,500 crore. And these pertain to July, the first month after the GST roll-out,which followed Mayand June,two months that sawheavy discounting by vast sections of businesses to de-stock. FE has computed that the revenue-neutral monthly collections from GST at `1.42 Special Features Most `1,000 notes back THE RUPEE on Monday saw its biggest one-day appreciation in almost three weeks with the currency closing at 63.91 to the dollar following a significant weakening of the greenback, reports fe Bureau in Mumbai. The currency appreciated 0.19% against the dollar on Monday. The dollar fell against most of its peers after the market failed to find any guidance on the US monetary policy in Fed chief Janet Yellen’s speech at the Jackson Hole summit on Friday. PAGE 10 ` Govt to sell 5% in NTPC at `168 a share today IN ONE of the biggest offer for sale in recent times, the Centre on Monday announced 5% stake sale in thermal power major NTPC with a green-shoe option to retain another 5%, which together could fetch the Centre about `13,852 crore disinvestment revenue, reports fe Bureau in New Delhi. The issue will be open for subscription by institutional investors on Tuesday, a senior government official said. Retail investors can bid in the OFS on Wednesday. On Monday, the company’s shares closed at `173.35. PAGE 11 Boeing offers to set up production facility for F/A18 in India US AEROSPACE major Boeing made a push for its F/A-18 Super Hornet to meet the Indian Naval Carrier platform requirement, and said they could be produced in India under the ‘Make in India’ initiative, reports fe Bureau in New Delhi. Vice-president of F/A-18 and EA Programmes, Boeing, Dan Gillian, said “a platform like the Super Hornet under the Make in India programme will help the Indian industry to position itself for the manufacture of Advanced Medium Combat Aircraft”. PAGE 6 India and China end face-off Source: RBI Database on Indian Economy FE BUREAU New Delhi, August 28 March 31, 2016 `6,32,568 cr `8,925 cr POWERING JAIPRAKASH POWER Banks seek buyer for 30% stake LENDERS TO JAIPRAKASH Power Ventures (JPVL) are looking to sell at least a 30% stake in the company and have mandated SBI Capital Markets and consultancy firm EY to scout for a buyer, according to a document seeking investors. “The core committee (CC) on behalf of the joint lenders’forum (JLF) of the Company has appointed SBI Capital Markets and EY,collectivelyreferred to as‘advisors’ to assist in sale of minimum 30% equity stake held by the consortium lenders,”it said. JPVL’s standalone debt stood at `9,609 crore in FY17 and it re- Share price on BSE (`) (` cr) 10 Net revenue Ebitda Net loss 8 5.84 6 4.15 4 2 Jun 1, 2017 Aug 28, 2017 ported a net loss of `761 crore on revenues of `2,879 crore in the sameperiod.Whileitwasnotpossible to ascertain thevaluation of the company, it is expected that FY16 FY17 -750 FE BUREAU Mumbai, August 28 -300 Rupee sees biggest 1-day rise against dollar in 3 weeks DOKLAM CRISIS March 31, 2017 Value of `1,000 notes 1,050 QuickPicks Minister of state for commerce & industry Nirmala Sitharaman, NITI Aayog CEO Amitabh Kant and minister for electronics & IT and law & justice Ravi Shankar Prasad at the launch of the Ease of Doing Business Report in New Delhi on Monday Interview with Sitharaman, Page 2 Breakthrough as both sides agree to withdraw troops; MEA says process of disengagement almost complete 2,450 Any news of stability would have been good, and that makes Nandan’s appointment a positive. Stock’s attractively valued given that strategic direction is unchanged and business momentum robust. ■ Investor, P15 Based on data from the Reserve Bank of India, of the `6.3 lakh crore in `1,000 notes that were with the public on March 31, 2016, most have come back into the banking system after demonetisation on November 8, 2016. According to RBI’s Database on Indian Economy, just `8,925 crore of `1,000 notes remained with the public on March 31, 2017. The database shows the value of currency held in `500 notes fell from `7.9 lakh crore in March 2016 to `2.9 lakh crore in March 2017, but since new `500 notes were issued, it is not possible to determine how much of the old `500 notes did not return. 3,900 Infosys: With new chairman in place, repair starts BHAVIK NAIR 2,850 Equity savings fund offers growth potential of equity, tax efficiency and income. It combines potential for capital appreciation with regular income and medium market volatility ■ Personal Finance, P15 Talking terms Continued on Page 2 Paper money trail How equity savings schemes benefit risk-averse investors lakh crore. The Centre’s indirect tax collection target for the current financial year is `9.26 lakh crore, which includes `72,150 crore to be generated from the basic customs duty that is not subsumed in GST. So, forGSTto be revenue-neutral for it, the Centre needs to collect `8.54 lakh crore from GST/taxes that collapsed into GSTin 201718, or about `71,200 crore a month. A sum roughly equal to this will need to be collected by all states for their overall revenue-neutrality, given that the GST base is divided equally between the Centre and states.The GST Council had earlier defined revenue-neutrality on the basis of a 2015-16 Centre-state (50:50) revenue base of `8.8 lakh crore and 14% annual growth over it. Source: Bid document thestakecouldbevaluedatalittle more than one-third of the company’s enterprise value. Continued on Page 2 A QUICK RECAP ● US ACTION Dr Reddy’s faces class action suit FE BUREAU Hyderabad, August 28 Indian Army sources here too confirmed to FE that the process of disengagement was in progress. Chinese foreign ministry spokesperson Hua Chunying stated that “Indian troops and equipment have all withdrawn to the Indian side of the border area in Doklam on Monday afternoon”, but she was not categorical about the withdrawal of Chinese troops. Hua said: “China will continue to exercise its territorial sovereignty in accordance with historical conventions.” DR REDDY’S LABORATORIES (DRL) has said that a law firm representing a purported investorhas filed a class action suit against the company and its key executives in a US court for alleged violations of American federal securities laws. Inaregulatoryfiling,thecompany said that the case has been filed in the US district court for thedistrictofNewJersey.Thelawsuitrepresentsaclassofinvestors who purchased or otherwise acquired the company’s publicly traded shares on the New York StockExchangebetweenJune15, 2015, and August 10, 2017, DRL said in a stock exchange filing. “The lawsuit alleges the company made materially false and/or misleading statements or omissions in connection with its corporate quality system and specifically in connection with a warning letter from the US Food and Drug Administration dated November 6, 2015, and a letter from the Regierung von Oberbayern in GermanydatedAugust 10,2017.The lawsuit seeks damages to compensate the purportedclassofinvestorsforapurported decline in the company’s share price allegedly caused by the alleged misstatements or omissions,”DRLsaid in the filing. Continued on Page 2 Continued on Page 2 ■ Nearly 350 Indian soldiers have been standing face-to-face with 300 Chinese PLA personnel in the area since June 16 ■ The tensions had begun when Chinese PLA troops began constructing a concrete road in Doklam in Bhutanese territory IN A BREAKTHROUGH, India and China on Monday agreed to withdraw their troops from the face-off site at Doklam near the Sikkim border, ending nearly three months of tension that seriously threatened to mar friendly relations between the two neighbours. The development comes ahead of the BRICS summit to be held at Xiamen in China on September 3-4, which Prime Minister Narendra Modi is expected to attend. “In recent weeks, India and China have maintained diplomatic communication in respect of the incident at Doklam. During these communications, we were able to express our views and convey our concerns and interests.On this basis,expeditious disengagement of border personnel at the face-off site in Doklam has been agreed-to and is ongoing,” the ministry of external affairs (MEA) said in a press statement posted on Twitter. ■ Indian troops promptly halted the construction work, to maintain the ‘status-quo’ MEAL TICKET DBT-food a non-starter as states prefer to look the other way SANDIP DAS New Delhi, August 28 DESPITE THE REMARKABLE success of the PAHAL scheme for deliveryofLPGsubsidytobeneficiary bank accounts — over `50,000 crore transferred and close to `29,500 crore saved by the Centre till FY17 — the direct benefittransfer(DBT)schemefor food subsidy is in jeopardy. Even beforetheSupremeCourtverdict making privacy a fundamental right cast clouds on use of Aadhaarfordisbursalofassortedsops bythegovernment,DBT-foodhas hardlyprogressed from the three small pilot projects launched in October2015incertainlocalities in the Union territories (UTs) of Chandigarh, Puducherry and Dadra and Nagar Haveli. While annual savings to the Centre on its food subsidy bill from DBT-food is estimated to be `30,000 crore, sources said most state governments have been reluctant to roll out the scheme as it would entail winding up of their respective civil supplies corporations, a vestige `30,000 cr Estimated annual savings for the Centre on food subsidy if DBT is rolled out across the country 9 lakh Beneficiaries under DBTfood pilot projects 82 cr Total PDS beneficiaries in the country ILLUSTRATION: ROHNIT PHORE From 40% of base; monthly inflow seen at `1.62 lakh cr, versus revenueneutral `1.42 lakh cr of political patronage. The DBTfood scheme could help reduce Food Corporation of India’s (FCI) operational costs significantly. While there are a total of 82 crore beneficiaries underthe National Food Security Act (NFSA), the DBT-food pilot projects have so far covered just 9 lakh people, and resulted in subsidy savings of `12 crore.The plan was to extend the scheme to at least one district in each state by last year, but thatwas not to be.The diversion of foodgrain from the public distribution system (PDS) is seen at 30-40%. Official sources said that while the Union food ministry last year asked states to initiate DBT-food‘pilot’in a district or in a block,the responses from them have been rather lukewarm. Although digitisation of more than 23 crore ration cards have been completed and more than 18 crore cards have been seeded with beneficiaries’ Aadhaar numbers, DBT-food has been a virtual non-starter. Continued on Page 2
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