OPINION, P8 ECONOMY, P2 REVIEW PROCESS EDITORIAL Central PSU cash pool doesn’t solve FCI/AI problems Commodity prices boost India Inc sales even as overall demand remains weak INTERNATIONAL, P16 AUTO SALES Gadkari asks NHAI to suspend scrapping of road projects Renault CEO Ghosn says car ownership here to stay NEW DELHI, FRIDAY, NOVEMBER 10, 2017 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOLUME XLIII NO. 216, 32 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 SENSEX: 33,250.93 ▲ 32.12 NIFTY: 10,308.95 ▲ 5.80 NIKKEI 225: 22,868.71 ▼ 45.11 HANG SENG: 29,136.57 ▲ 228.97 `/$: 64.94 ▲ 0.13 `/€: 75.54 ▼ 0.20 BRENT: $63.56 ▲ $0.07 GOLD: `29,391.00 ▼ `9.00 EXPRESS PHOTO: TASHI TOBGYAL NO KITE-FLYING It’s a go: IT hub gets its first trade union TATA MOTORS on Thursday posted a nearly threefold jump in its consolidated net profit to `2,503 crore on a year-on-year basis for the three months ended September 30, beating street estimates, reports fe Bureau in Mumbai. The impressive rise is on account of higher sales volumes across all vehicle segments at Tata Motors as well as its luxury offering Jaguar Land Rover. Net sales during the period were up over 10% y-o-y to `70,156 crore, way above analyst estimates, with sales of commercial and passenger vehicles, including exports, rising 14% to 1.53 lakh units during July-September. PAGE 6 HPCL Q2 net profit soars 147% to `1,735 crore HINDUSTAN PETROLEUM CORPORATION (HPCL) on Thursday reported a 147% jump in its secondquarter net profit on account of higher refinery margins and inventory gains, reports PTI. Net profit in July-September at `1,735 crore was 147% higher than the `701 crore in the same period a year ago, HPCL chairman and managing director Mukesh K Surana told reporters in New Delhi. The company earned $7.61 on turning every barrel of crude oil into fuel in the quarter, versus $3.23 per barrel gross refining margin in the same period a year ago. PAGE 6 SAIL’s net loss narrows to `539 crore in second quarter DOMESTIC STEEL major SAIL on Thursday said its standalone net loss narrowed to `539.06 crore for the September quarter of the current fiscal, reports PTI. The steelmaker had clocked a net loss of `731.58 crore in the corresponding quarter of 2016-17, the company said in a BSE filing. Total standalone income of the Maharatna firm rose 8% to `13,666.05 crore in the July-September period of this fiscal from `12,645.76 crore during the similar quarter in 2016-17. The company’s total expenses also rose 2.72% to `14,108.84 crore in the quarter under review. Tax on 140 items to reduce from 28% Quarterly returns for all, hike in compositionscheme threshold to `1.5 crore likely FE BUREAU New Delhi, November 9 THE GOODS AND Services Tax (GST) Council could bring down the tax rate on as many as 140 items from the highest slab of 28% as it meets in Guwahati on Friday, leaving only 40-odd items in this category,according to government officials. The items most likely to see a lower rate include sanitaryware,detergents, furniture, electrical switches, and plastic and ceramic pipes,among others. The councilwill deliberate on a key proposal made by a group of state finance ministers (GoM) which called for allowing all taxpayers to file returns quarterly even as they pay taxes on a monthly basis. At the last meeting,the coun- NEW RULES ■ Flat composition tax rate of 1% likely; interstate supplies may also be allowed ■ All restaurants to be taxed at 12% instead of 18% currently levied for AC ■ May mandate GST to be shown in MRP as included cil had decided to allow taxpayers belowthe `1.5-crore revenue threshold to file returns quarterly.This covered nearly90% of all taxpayers registered on the GST Network portal. The council had in May fixed 28% rate for nearly 230 items out of a total 1,211 items under GST on the basis of recommendations by a rate fitment committee.In subsequent meetings, it has cut rates on nearly 100 items including 47 in the 28% category. Continued on Page 2 ● REALTY BITES Lenders’, creditors’ claims on Essar Steel cross `77,700 cr No takers for 3.5 L flats in Mumbai area Of this, resolution professional had till October 18 acknowledged `50,000 crore PRIYANKA GHOSH Mumbai, November 9 Going for broke (` cr) Amount claimed 13,652.8 13,131 SBI Amount admitted Edelweiss Asset Reconstruction 5,527.2 5,328.9 Canara Bank Total claims including operational creditors 3,913.1 3,798 Standard Chartered Bank FINANCIAL CLAIMS RECEIVED bytheresolutionprofessional(RP) forEssarSteel from lenders,operational creditors and employees have crossed `77,770 crore. Of this,theRPhadtillOctober18acknowledged `50,000 crore, according to a statement on the company’swebsite. Thebiggestchunkofclaims— `54,851 crore — was made by49 financial creditors while operational creditors had sought `22,914 crore. Employees of the Total of 49 financial creditors 5,177.7 4,739.7 IDBI Bank SHAYAN GHOSH Mumbai, November 9 3,563.3 3,557.4 3,010.4 2,913.7 PNB 2,481.5 2,230.7 ICICI Bank companywere looking to get `20 crore.Amongbanks,StateBankof India (SBI) had claimed an amount of `13,652.8 crorewhile Source: Essar Steel IDBI Bank was looking to recover for`5,177.7 crore. Continued on Page 2 Direct benefit transfers FE BUREAU A big leap With as many as 251 schemes added to an earlier 142, beneficiaries of direct benefit transfer (DBT) shot up 33% in April-October of FY18 compared with the whole of FY17. DBT disbursals might reach `1 lakh crore in FY18 against `74,608 crore last fiscal. Funds released Beneficiaries Transfers (` crore) RHS MGNREGS NSAP PAHAL Scholarship schemes Others No of schemes 800 61,942 600 0 53,544 60 38,926 400 200 80 74,607 7,368 34 28 2013-14 ‘14-15 393 59 ‘15-16 40 PAHAL MGNREGS Scholarship schemes 50 142 ‘17-18* 31.25 30 10 0 0 Continued on Page 2 Total stock Unsold 47.52 35.7 22.82 20 20 ‘16-17 NSAP Others No of beneficiary (in crore) 40 MORETHAN HALFtheregistered apartments in the Mumbai Metropolitan Region (MMR) of 6.7 lakh or approximately 3.5 lakh homes have not found buyers so far, according to data on the MahaRERAwebsite. Iftheinventoryappearsbigger than that estimated by consultancyfirms that pegged it at close to 1.4 lakh units in 2016, that’s because their surveys were limited.The information from MahaRERA, industry experts say, would be more comprehensive. The high inventory levels could be one reason prices of residentialpropertyhavebeenbyand large stable,experts say,pointing outthatdevelopersarelookingfor more affordable locations. New launcheshavelostsomemomentum in the last six months with the newrules coming into force. At the end of August 31, as many as 5,620 projects or 6,70,339unitswereregisteredon the MahaRERAwebsite. 52 53 Inventory overhang (in %) 10.81 2013-14 ‘14-15 ‘15-16 ‘16-17 ‘17-18* *Upto October 1 BHK 2 BHK 51 37,615 Tata Motors net rises threefold on higher sales volumes GST COUNCIL MEET INSOLVENCY PROCEEDING 37,615 QuickPicks Continued on Page 2 The odd-even car rationing scheme will be rolled out in Delhi (in picture) for five days from November 13 as part of a plan to tackle its severe pollution, the state government said on Thursday. While the NGT banned construction and industrial activity in Delhi-NCR till November 14, the NHRC sent notices to central and state governments and ministries. Report on Page 19 9,040 The front-heavy styling offers a powerful look to the Suzuki Intruder 155cc motorcycle, even though the rear has a love-me-orhate-me design. The engine is a gem ■ Motobahn, P15 tivities will not be allowed in the IT sector. Now Bengaluru’s image will be hurt and Karnataka will be affected as existing companieswill think twice before expanding,”Pai said. Earlier he had tweeted: “Big menace to jobs: sad for Karnataka.” While IT services players are clearly not happy with the presenceofaunion,theydonotseetoo many employees becoming its members.“Not many employees are likely to join the union voluntarily,” a seniorITexecutive said. Karnataka IT minister Priyank Kharge told FE thatwhile Red alert 73,755 A small cruiser that can cover large distances 1.5 million employees from the IT industry 287,450 Special Features ■ Bengaluru has around 152,349 IN A BID to give a fillip to the housing sector, the government has raised the maximum amount a central government employee can borrow from the government for housebuilding to `25 lakh, from `7.5 lakh earlier, reports fe Bureau in New Delhi. It has also increased the amount that a central government employee can borrow for expansion of their homes to 34 months of basic pay to a maximum of `10 lakh, from `1.8 lakh earlier. ■ KITU is backed by Centre of Indian Trade Unions 300,094 Housing package for govt staff around 250 members 156,049 ATATIME when the information technology (IT) sector is hiring fewer people,companies in Bengaluru will have to deal with a recognised trade union. The Karnataka state IT/ITeS Employees Union (KITU) has received its registration from the State LabourCommission under the Trade Union Act, 1926, and the Karnataka Trade Unions Regulations,1958. The state government had earlier indicated it was not in favour of trade unionism in the sector.Karnatakagoestothepolls in 2018; the state is currently ruled by the Congress which came to power in mid-2013. In 2014, the state government underSection 14 of the Industrial Employment (Standing Order) Act, 1946, had exempted the IT industry on certain requirements like formation of a union for a period of five years. TV Mohandas Pai, former board member and HR head of Infosys, told FE the Karnataka government has broken its promise.“It had said union ac- ■ KITU currently has 49,108 FE BUREAU Bengaluru, November 9 Employees Union (KITU) is the first such registered entity in the state 50,778.9 INDIA’S GOLD DEMAND in the third quarter fell 24% to 145.9 tonnes as the implementation of the goods and services tax and anti-money laundering legislation around jewellery retail transactions kept buyers away, according to the World Gold Council (WGC), reports PTI. Gold demand in India stood at 193 tonnes during the third quarter of 2016, said WGC. In value terms, demand declined by 30% to `38,540 crore, against `55,390 crore in the same period of 2016. ■ Karnataka State IT/ITeS 54,851.2 IN THE NEWS India’s Q3 gold demand drops 24%, says WGC COMPUTE THIS currentlythe standing orderdoes not allow union activity within the legal framework, it did not mean the government was not interested in protecting employee rights.“Manyassociations are in touch with the government and I have also asked them to come back to me on the charterof demands andwhat theyexpect from us,”Kharge said. The minister said the labour commission can give permission to form a union but there is an Act which has to be amended so that these unions canwork.“The labour commission may have recognised that there is a problem and may have accepted the forum,”he added. Thepaceofemployeeaddition by the Indian IT industry has dropped to below 5% from double-digit growth a few years ago. Firms like Infosys and Cognizant haveseentheirheadcountreduce since April while Wipro saw its employee headcount drop at the end of the September quarter. In 2016-17,the industry had taken on 170,000 people, taking the tallyofemployeesto3.8millionin March2017.TheNationalAssociation of Software and Services Companies has forecast that the sector will create about 20-38% fewerjobs in the current fiscal. The union has been formed to address the concerns of employees, specifically layoffs and employee harassment. KITU general secretary Vineeth Vakil said the union was registered as a general ITindustryunion body with 250 members. 77,785.8 State government goes back on 2014 stand; IT players not pleased but do not see too many employees joining the union 52 3 BHK >3 BHK COOKING UP A STORM Government’s free LPG scheme fuels growth of ancillary industries SAURABH KUMAR New Delhi, November 9 THE NARENDRA MODI government’s flagship Pradhan Mantri UjjwalaYojana(PMUY),whichhas providedmorethan3croreliquefied petroleum gas (LPG) connections to poor households over the last one and a halfyears,has had a multipliereffectonthemanufacturersofequipmentsuchascylinders, pressure regulators, stoves andtubing—mostofwhichfallin the micro,small and medium enterprises (MSME) segment. The number of cylinder makersacrossthecountryin2014-15 was 102, which has gone up to 146 in 2016-17 and this industry’s turnover has surged from `3,491croreto`5,258croreduringtheperiod.Similarly,thenumber of stove manufacturers has gone up from 39 to 45 and the corresponding increase in turnover has been from `2,253 crore to `2,728 crore. Overall, the total turnover of companies manufacturing cylinders, pressure regulators, stoves and connecting tubes has in- Industry turnover (` crore) 6,000 2014-15 5,258 2016-17 4,500 % increase 3,491 3,000 2,253 2,728 1,500 0 250 497 51 Cylinders 99 Pressure regulators 246 375 21 Stoves 52 Hose pipes creased by 42% between 201415 and 2016-17 from `6,240 crore to `8,858 crore. For the six months between April and September, 2017, the combined turnoveroftheseindustriesstood at `4,281 crore. The ministry of petroleum and natural gas under minister Dharmendra Pradhan launched PMUY in May 2016 to provide subsidised LPG connections to women belonging to the belowpoverty-line category. The government is targeting to provide 5 crore LPG connections by May 2019 under the scheme with the ministry of finance providing a support of `8,000 crore. As reported by FE earlier, the petroleum ministry is in the process of getting Cabinet approval to add another3crorebeneficiariesatan additional cost of `4,800 crore. AccordingtoAnishDe,partner at consultancy firm KPMG, growth in the equipment manufacturingsegmentislikelytocontinueatleasttill2019astherewill be a continued push. Continued on Page 2
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