OPINION, P6 ECONOMY, P2 INTERNATIONAL, P8 PLANNING A CHANGE CHRISTMAS MESSAGE Separate licence may not be needed for import of telecom equipment Pope laments ‘winds of war’ blowing around the world EDITORIAL Telcos hoping to sue govt must read SC judgment first PSU banks steadily losing market share in CASA—even amongst government sector MUMBAI, TUESDAY, DECEMBER 26, 2017 VOLUME XXXXXV NO. 240, 12 PAGES, `6.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD 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 RAIL PROCUREMENT IN THE NEWS Rationalise global, local branches, finmin asks PSBs Get approval before global tender, IR told THE FINANCE ministry has asked public-sector banks to look at rationalising their domestic and overseas branches as part of the reform process to strengthen their financials, reports PTI. The banks have been advised to pursue closure of loss-making domestic and international branches as part of capital saving exercise, sources said. PMO directive on local purchases, firm stance by steel ministry’s standing committee threaten to hit railways’ capex plans Govt asks NGOs to open bank a/c THE HOME ministry has directed all NGOs, business entities and individuals who receive funds from abroad to open accounts in any of the 32 designated banks, including one foreign, within a month for higher level of transparency, reports PTI. It also asked them to ensure that such funds are not utilised for activities detrimental to the national interest. 2015-16 Through the looking glass Former Indian Navy officer Kulbhushan Jadhav, on death row in Pakistan for alleged spying, meets his wife and mother at the Pakistan Foreign Office in Islamabad on Monday Report on Page 11 FALLING GST REVENUE Special Features Retail lending set to scale up in 2018 Decline in lending rates, focus on growth and credit metrics in retail lending, P2P lending norms, more focus on digitisation and steps towards affordable housing are helping set strong base for retail lending ■ Personal Finance, P9 Rewind mode: #DeMon, #GST aftermath As the year comes to an end, BrandWagon gets eminent industry stalwarts to review the effects of the two big economic developments of 2017 — note ban’s rollover effect from late 2016 and levying of GST — on the consumption of goods and services QuickPicks EXPRESS PHOTO: DILIP KAGDA CBEC asks officials to go after non-filers The missive, third from CBEC in less than a month, shows its anxiety over‘high’ transitional claims FE BUREAU New Delhi, December 25 IN WHAT SHOWED the government’s anxiety over the “high” transitional credit claims and absence of invoice-matching hitting the goods and services tax (GST) collections, the Central Board of Excise and Customs (CBEC) has sent another missive —thethirdinlessthanamonth— to its field formations, warning against any laxity in the credit verification process. CBEC chairperson Vanaja N Sarna asked tax officials “to ensurenon-filersofGSTR-3B(summary returns) are brought into thefoldandmadetofilethesereturns”.Tax needs to be paid or nil tax liability claimed with the filing of GSTR-3B. Despite a gradual rise in the taxpayers registering on the GST Network (GSTN) to over 95 lakh, the first four months (July-October) saw only about 60 lakh of TAXING TIMES ■ With the relaxations on reverse charge mechanism and comprehensive returns filing, taxman has virtually no mechanism to identify evasion and plug revenue leakages ■ Earlier this month, GST Council advanced implementation of electronic way bill, but other suspended compliance provisions unlikely to be activated before next fiscal thesefilingeventhesummaryreturns.The more detailed ones — which include the invoice-wise details on inward and outward supplies—have anyway been suspended till March-end. While the government has relaxed many stringent compliance requirements including reverse charge mechanism, comprehensive returns filing, electronic way bill and tax collected at source,it has left the department with virtually no mechanism to identify evasion and plug revenue leakages. Continued on Page 2 INDIAN RAILWAYS, WHOSE capexbudgethasmultipliedinrecent years, has just got a slap on the wrist from a government panelfornottakingitspermission before floating global tenders to procure 4.87 lakh tonnes of rails, hamstringing the transporter in its efforts to cut expansion costs and expedite modernisation. The move by the standing committee on Domestically Manufactured Iron and Steel Policy (DMI&SP), 2017, at the steel ministryis despite the continuing gap between the railway’s rising demand forrails and domestic availability of these products (see table). The DMI&SPmakes it obligatoryforgovernmentprojectswith iron and steel cost of `50 crore and above to purchase steel from only domestic manufacturers — forthe record,aviolation is tolerated if the specific grades of steel required for the projects are not locally available or nor produced wrotetoRameshAbhishek,secretary,departmentofindustrialpolicy and promotion, expressing concernoverthe“verydisturbing” situation where many governmentdepartmentsarenotadhering to the Public Procurement (Preference to Make in India) Order,2017,which also is meant to provideanassuredmarketfordomestic manufacturers of various products.“Therequirementofsignificant global experience in terms of trade performance may eliminate many domestic manufacturers.Anytender,whichisnot sensitive to Make in India message deserves scrutiny,” hewrote. APPLE LOOKS LIKE it’s having a not-so Merry Christmas. Analysts have lowered iPhone X shipment projections for the first quarter of next year, citing signs of lacklustre demand at the end of the holiday shopping season. Sinolink Securities analyst Zhang Bin said in a report on Monday that handset shipments in the period may be as low as 35 million,or10million,lessthanhe previously estimated.“After the firstwaveofdemandhasbeenfulfilled,themarketnowworriesthat thehighpriceoftheiPhoneXmay weaken demand in the first quarter,” Zhangwrote. JL Warren Capital said shipments will drop to 25 million units in the first quarter of 2018 from 30 million in the fourth quarter, citing reduced orders at someApplesuppliers.Thedropreflects “weak demand because of iPhone X’s high price point and a lack of interesting innovations,” theNewYork-basedresearchfirm said in a note to clients on Friday. “Badnewshereisthathighlypublicised and promoted X didn’t boost the global demand for iPhoneX,” according to the note. Apple has been counting on a redesigned 10th anniversary iPhone to boost shipments as its market value advances toward $1 trillion. Continued on Page 2 Continued on Page 2 8.12 2016-17 (Lakh tonne) Track demand by IR Supply by SAIL 10.05 6.2 2017-18 14.59 11.45* *committed It is very disturbing that the broad message (of the Public Procurement Order, 2017) has not been appreciated by various departments... each tender must be examined from the point of view of the interest of Indian manufacturers SURYA SARATHI RAY New Delhi, December 25 Analysts cut iPhone X shipment forecasts BLOOMBERG Beijing, December 25 Glaring gap 6.46 ● ‘DULL DEMAND’ — PM’s principal secretary Nripendra Misra (in photo) to DIPP secretary Ramesh Abhishek in the required quantities.Earlier this month, the standing committee gave the Indian Railways (IR) an ex post facto exemption from DMI&SP compliance for its global tender for rails floated on October 18, but sternly told the transporter that it is a “one-time exception, (which is) not to be used as precedent for rails or any other(steel)productscoveredunderDMI&SP”.“Itisadvisedthatin future, the ministry of railways should obtain priorwaiver under DMI&SP policy before floating any global tender for procurement of rails,”it added. Asifthatwasn’tenough,principal secretary to the Prime Minister, Nripendra Misra, recently ● RAIL NEER FROM MINES ● ENERGY PLAY IRCTC’s J’khand unit IOC, BPCL keen to buy to process CIL water GAIL, it prefers ONGC SAURABH KUMAR & ANUPAM CHATTERJEE New Delhi, December 25 PRESS TRUST OF INDIA New Delhi, December 25 (Lakh cusec/year) CIL’s mine water THE INDIAN RAILWAY Catering and Tourism Corporation (IRCTC) and Coal India (CIL) are joining hands for a project to use the excess groundwater from the latter’s mines to produce purified packaged water being sold under IRCTC’s popular Rail Neer brand. A site has been identified at Argada near Ranchi in the coal-rich state of Jharkhand to set up a bottling plant of IRCTC. “Water will be supplied from the adjoining coal mines to this plant for purification. Mines have surplus groundwaterwhich Own use by CIL mines 5,717 2,589 Community water supply by CIL: 1,091 Surplus: 2,037 16 LAKH BOTTLES Daily demand of packaged water by railway commuters 37% Rail Neer’s supply against demand comes out as a result of coal extraction,”said a railway official. Continued on Page 2 INDIAN OIL (IOC) and Bharat Petroleum (BPCL) are both keen to acquire gas utility GAIL India to become fully integrated energy companies. IOC and BPCL have separately indicated to the petroleum ministry their interest in taking over GAIL to help add natural gas transportation and marketing business to their kitty, official sources said. GAIL, on the other hand, feels a merger with oil and gas producer ONGC would be more appropriate. The merger options were indicated following finance minis- terArun Jaitley’s announcement in the 2017-18 Budget speech on the government’s plan to create integrated public-sector oil majors that will be “able to match the performance of international and domestic private sector oil and gas companies”. ONGC, India’s largest oil and gas producer,proposedtoacquireoilrefiner and fuel marketing company HPCL, which was approved by the Cabinet. Oil and Natural Gas Corp (ONGC) is currently in the process of acquiring the government’s 51.11% stake inHPCL,whichatcurrentpricesis worth over`33,000 crore. Continued on Page 2 ON THE MOVE Passengers on board India’s first AC local train, which began its services from Borivali to Churchgate, in Mumbai on Monday Safeguard duty probe on solar cells INDIA HAS started a probe to determine imposition of safeguard duty on surging imports of solar cells with a view to protect domestic manufacturers, reports PTI. Domestic manufacturers have approached the Directorate General of Safeguards (DGS) with a complaint that their market share has remained stagnant despite rapid expansion in demand for solar cells in the country. PAGE 3 Profitable PSUs may be divested too THE GOVERNMENT may include some profitable Central Public Sector Enterprises (CPSEs) — which are not of much strategic importance — in the list of entities targeted for disinvestment in 2018, along with sick and loss-making units, a top official has said, reports PTI. The government was so far focussed on strategic sale of sick and loss-making CPSEs. PAGE 4 Road project deals moved in the slow lane, may pick up pace in 2018 2017 REWIND ROADS ROUHAN SHARMA Mumbai, December 25 DEALS IN THE roads sector remained in the slow lane in 2017 with private equity investors mostly keeping an eye on projects coming up for bidding under the toll-operate-transfer (TOT) model. There were only six deals of note during the year, against eight in 2016, and most were residual stake transactions. But, there were two big transactions: Brookfield’s purchase of two toll expressway projects for `1,900 crore and the purchase of Dilip Buildcon’s 24 road projects by first-timer Shrem Group for `1,600 crore. Industry watchers are also a bit circumspect about a significant pick-up in deals in the com- ing months.Shubham Jain,vicepresident at research and ratings agency Icra, said deals may still not conclude in the imme- Six acquisition deals in 2017 versus eight in 2016 diate future, although valuations have improved in 2017,on account of strong traffic growth and reducing interest rates. Valuations improved about 14-15% in 2017 “Some buyers (especially pension funds) are also interested in the TOT model. They are planning to acquire a few assets About 35 road projects valued at `13,000-14,000 cr up for sale Deal flow could improve in 2018 through this route.Their success in the first round will determine whether they would prefer to wait for more TOT projects or if they will engage in discussions with promoters for various toll roads,” he explained. According to Icra, as many as 35projectswithanequityinvestment of `4,000-4,500 crore are on the block; the total value of theseprojectsisaround`13,00014,000crore.Ofthese,12areunder construction while 23 have been generating revenue for a three to five-year period. Continued on Page 2
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