OPINION, P8 NATION, P3 JAMAL MECKLAI ` will be very volatile, ranging from 61.5 to 70 to the dollar M&M, P10 EDITORIAL CASHLESS PUSH INTERVIEW Probing McDonald’s for anti-profiteering means firms need costsheets for all products Rlys to launch co-branded debit card; 100% cashback through lottery Loans under CLSS account for 20-25% of individual loans, says Keki Mistry KOLKATA, TUESDAY, JANUARY 2, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE VOLUME XXVII NO. 54, 16 PAGES, `5.00 (NORTH EAST STATES & ANDAMAN `10.00) 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 SENSEX: 33,812.75 ▼ 244.08 NIFTY: 10,435.55 ▼ 95.15 NIKKEI 225: 22,764.94 ▼ 19.04 HANG SENG: 29,919.15 ▲ 55.44 `/$: 63.68 ▲ 0.20 `/€: 76.40 ▲ 0.13 BRENT: $66.87 ▲ $0.15 GOLD: `29,363.00 ▲ `111.00 ANTI-PROFITEERING ACTION McDonald’s, Honda & HUL dealers in the net THE GOVERNMENT HAD said the goods and services tax (GST) law’s ‘anti-profiteering’ clause will seldom be invoked and used onlyin cases of mass importance and of a national import, but barelya month into its existence, the Director-General of Safeguards (DG-S),the investigating arm of the authority concerned, has already got cracking. The firms that have received notices from the DG-S include not only a large franchisee of multinational fast-food chain McDonald’s and a multi-brand retailer but even a Jaipur-based cosmetics trader.In what indicated that the National Anti-Profiteering Authority (NAA) may not have a lenient and non-intrusive approach, it has even questioned the extent of price reduction in a couple of cases. THE BENCHMARK Sensex shed 244 points on Monday, the first session of 2018, after a late sell-off in auto, banking, and IT shares, reports fe Bureau in Mumbai. The Sensex ended down 0.72% at 33,812.75, while the Nifty fell by 0.90% to end the session at 10,435.55. This is the worst beginning session for the Indian stock markets in more than 17 years. Trump slams Pak, says it has given US 'lies & deceit' PRESIDENT DONALD Trump on Monday tore into Pakistan, accusing it of giving nothing to the US but ‘lies and deceit’ and providing ‘safe haven’ to terrorists in return for $33-billion aid over the last 15 years, thinking ofAmerican leaders as ‘fools’, reports PTI. In his first tweet of the year, Trump also appeared to suggest he could cut off foreign aid to Pakistan. His remarks come days after The New York Times reported that the US is considering withholding $225 million in aid to Pakistan. received 169 complaints of profiteering after introduction of GST ■ Another 70 complaints of ‘local nature’ received by state-level screening committees ■ In the absence of clear rules, industry and tax officials unsure on how to dispose of the cases, analysts say and warn of rise in litigation Also, the DG-S has sought a volume of information from these firms including balancesheets and profit and loss account statements for 2016-17, GST returns for July-December, details of invoice-wise outward taxable supplies,two sample in- Intra-day on BSE (`), Jan 1 EVEN AFTER THE tax department casting a critical eye on the unexpectedly high claims of transitional credits by businesses paying the goods and Special Features Technology will be key to drive product innovation The broad focus on digitalisation, agency expansion, bancassurance and government policies is expected to support the life insurance industry this year ■ Personal Finance, P15 Omni-channel retail’s balancing act in India Today, customers don’t distinguish between channels — they demand the same experience at all touchpoints. Thus, offline retail brands are upping their game when it comes to the digital revolution QuickPicks SBI cuts base rate by 30 bps; PNB, BOB hike deposit rates STATE BANK of India (SBI) on Monday reduced its base rate by 30 basis points (bps) to 8.65% in response to a large number of its older borrowers switching to the marginal cost of funds-based lending rate (MCLR) regime, reports fe Bureau in Mumbai. The base rate cut comes, ironically, at a time when most lenders have begun to raise rates on bulk deposits. Effective Monday, the two largest state-owned lenders after SBI, Punjab National Bank (PNB) and Bank of Baroda (BoB), raised rates on deposits of over `1 crore. PAGE 10 Eight core sectors record 6.8% growth in November EIGHT CORE sectors grew by 6.8% in November 2017, mainly helped by a robust performance in segments like refinery, steel and cement, official data showed on Monday, reports PTI. The eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — had witnessed a growth of 3.2% in November 2016. PAGE 2 services tax (GST),such credits have soared to upwards of `90,000 crore till the December 27 deadline, up nearly 40% from September,sources told FE. The facility to avail these credits — for the taxes like 9.70 9.40 9.10 8.50 Open Close excise, service tax and state VAT paid in the year prior to the GST launch — has been staggered to avoid a big revenue impact in a shorter period. Continued on Page 2 % chg Apr-Dec 2017 1,19,286 Hyundai 40,158 M&M (PV) 12.1 0.3 65,367 1,29,964 16.0 % chg 15.5 4.6 1,76,875 2,07,778 35.4 Royal Enfield 3,98,219 26.0 12,642 TVS Motor 12,26,418 -7.0 15,543 Honda Cars MUCH LIKETHEYdid in November, automakers in general bounced back from the demonetisation blues ayearago to clock in some reasonably good wholesale numbers in December.However, the performances within segments were mixed with some playersdoingbriskbusinesswhile others lagged behind.TVS Motor POWER PRODUCER JSW ENERGY has decided not to go ahead with the proposed acquisition of the 500 mega-watt Bina thermal power plant from Jaiprakash Power Ventures, the company said in a filing to the stock exchanges on Monday. The deal, now in the making for more than two years, was valued at an enterprise value of `2,700 crore or `5.4 crore per MW in July 2016,when JSW Energy agreed to acquire two thermal units of 250 MW each. The transaction had already been pushed back once from May 31, 2017 till December 31, 2017. The Sajjan Jindal-promoted company had wanted to add to its capacity although analysts had pointed out at the time that the plant load factor at Bina was relatively low. In fact,soon afterJSWEnergy expressed interest in buying the Bina units, lenders to JP Power initiated an SDR (strategic debt restructuring) scheme on July 26, 2016.Analysts had noted at the time Bina had a debt of close to `2,000 crore as of March, 2015 and an equity of around `1,005 crore.Bankers to JPVLinclude State Bank of India (SBI) and its subsidiaries, Bank of India, Canara Bank, Punjab National Bank (PNB), IDBI Bank, ICICI Bank, UCO Bank, Union Bank of India, Central Bank of India among others. Continued on Page 2 Maruti Suzuki 4.0 20.0 25,07,000 5,79,462 14.0 21.0 FE BUREAU Mumbai, January 1 FE BUREAU Mumbai, January 1 NCLT rejects Tata plea against firm THE HYDERABAD BENCH of the National Company Law Tribunal (NCLT) has rejected Tata Power’s insolvency petition against Meenakshi Energy,citing pending arbitration proceedings between the companies.an order bythe bench noted there is an arbitration proceeding pending between the parties and the arbitration has not come to an end. In their arguments, Meenakshi Energy had contested Tata Power’s insolvency application. The bench noted “...there is a valid and legal dispute raised by the corporate debtor (Meenakshi Energy), and ....”the order said. Tata Power had filed the ap- 9.21 8.80 MEENAKSHI ENERGY SHAYAN GHOSH Mumbai, January 1 9.93 10.00 Pre-GST credits soar to `90,000 cr SUMIT JHA New Delhi, January 1 Prev. close:9.52 10.30 WARM WINTER FOR SOME (Sales volume) Dec 2017 turned in splendidvolumes — up 38% y-o-y — as exports of two wheelers surged 53% y-o-y. In the passenger vehicles space,Maruti Suzuki and Honda Cars reported strong numbers comparedwith Hyundai Motors, whose sales were flat and Mahindra and Mahindra (M&M) which saw a 7% year-on-year drop in volumes. Nonetheless,there appears to be a fair amount of underlying demand prompting analysts to say retail sales for December could be fairly good. Continued on Page 2 A colourful start People release balloons to welcome the new year outside a church in the Maninagar area of Ahmedabad on Monday EXPRESS PHOTO: JAVED RAJA Continued on Page 2 Rev-ved up data plication as an operational creditor claiming Meenakshi Energy owed it over `22 crore for operation and maintenance (O&M) of its power plant. “The operational creditorrendered services to corporate debtor (Meenakshi Energy) for operation and maintenance of thermal power project..,”the order said. Emails sent to Tata Power and Meenakshi Energy remained unanswered till the time of going to press. The orderadded that in October2016,Meenakshi Energyhad issued a lettertoTata Powerseeking closure of its O&M agreement as the “energy sector has been experiencing severe hardships for its day to day survival”. FE BUREAU Telcos dial high data revenue for 2 quarters in row Things are finally looking up for telcos. Trai's latest performance indicator report for Q2FY18 reveals that data revenue during the quarter rose 59% to `11,900 crore on a sequential basis. This is the second consecutive quarter when data revenues have climbed. ■ Page 6 DATA VOICE Revenue (` crore) 9,400 8,100 Revenue (` crore) 11,900 6,900 7,500 17,000 SUMIT JHA New Delhi, January 1 ■ The Centre has The reasonably good volumes suggest underlying demand driven by dealer discounts as also wedding season purchases JP Power Ventures 19,600 Sensex has worst opening day in 17 years UNDER SCANNER voices for sale and purchase of goods and price lists before and after November 15. Tax experts said complying with these notices could be cumbersome for businesses; also, they pointed out, the manufacturer/trader firms cannot always be faulted for the distribution chain not passing on the price cuts to the consumer. Finance secretary Hasmukh Adhia had earlier said that the NAA would investigate only those cases that have mass impact and not small cases of alleged undue profits. The anti-profiteering mechanism that comprises the NAA, DG-S and a standing committee at the national level and screening committees at states, is tasked to ensure that a reduction in tax incidence due to rate cuts or the benefit of input tax credit has been passed on to customers byway of commensurate reduction in prices. If the authority confirms the necessityof applying anti-profiteering measures, it has the powerto orderthe business concerned to reduce its prices or return the undue benefit availed along with interest to the recipient of the goods or service. Some in the fast lane, others yet to pick up pace 20,200 Firms asked to submit FY17 P&L, balance sheets and invoices of raw materials used in the products JSW Energy cancels deal to buy JPVL's Bina plant 23,200 STATE-OWNED Oil and Natural Gas Corp (ONGC) has made a significant oil and gas discovery to the west of its prime Mumbai High fields in the Arabian Sea, petroleum minister Dharmendra Pradhan said on Monday, reports PTI. In a written reply to a question in the Lok Sabha, he said the discovery was made in the well WO-24-3 (WO-24C) drilled west of Mumbai High fields. AUTO SALES IN DECEMBER ● CALLED OFF 25,700 IN THE NEWS ONGC makes key oil, gas discovery in Arabian Sea 29 24 19 21 33 121 104 83 80 84 Q2 Q3 FY17 Q4 Q1 Q2 Q2 Q3 FY17 Q4 Q1 ARPU (`) ARPU (`) FY18 Source: Trai, Kotak Institutional Equities Continued on Page 2 Q2 FY18 ● `6,000-CRORE GARMENTS PACKAGE Gains fall short of ambitious targets MORE THAN A YEAR after its launch,the`6,000-crorepackage forthelabour-intensivegarments sector,whichincludedfreedomto mills to have fixed-term employees, has accomplished much less than envisaged, Surya Sarathi Ray & Banikinkar Pattanayak report.Just655unitshaveavailed thebenefitsofar,andthenumber ofbeneficiariesstoodat1,55,564, accordingtolabourministrydata. And not all are newemployment. ■ Detailed report on Page 2 YEAR OF DISCONTENT Bollywood scripts a dull tale,viewers drawn to video streaming ANUSHREE BHATTACHARYYA New Delhi, January 1 DESPITE FEWER BLOCKBUSTERS, 2017 wasn’t a bad year for Bollywood though online video streaming is becoming increasingly popular with viewers. The big five films (sans Baahubali 2) took home around `770.2 crore which is about a fourth less than the collections forthe top five films of 2016 – of `1,041.9 crore, data released by Box Office India shows. Of course,the bottom line mayhave been very different had Padmavat been released as scheduled on December 1. But while the collections were reasonably good, the writ- ing is on thewall.Unless the content is exceptional, films will increasingly be viewed on video streaming platforms.“Audiences are seeking’ big theatrical expeDangal Bahubaali 2 375 510 riences’ to come into theatres big ideas, new concepts and visual extravaganzas,” said Vijay Singh, CEO, Fox Star Studios. SS Rajamouli’s Baahubali 2 is a Sultan 301 Golmaal Again 205 M.S. Dhoni 119 2016 1,042 (` crore) 2017 2017 770 1,152 Without Baahubali 2 With Baahubali 2 case in point; the blockbuster raked in `510.3 crore at the box office.With ticket prices becoming very expensive and even unaffordable, industry experts say Toilet Ek Prem Katha 132 Box office collections Rustom (` crore) Airlift Tiger Zinda Hai 172 Judwaa 2 132 124 123 Tiger Zinda Hai collection is based on first 5 days of earnings Source: Box Office India film buffs appear to have stayed away from the theatres preferring instead to watch films on video streaming platforms. As Nachiket Pantvaidya, Group COO,Balaji Telefilms,observes with data costs having fallen sharply, more and more viewers are catching their favourite films online.“Theyprefer to watch content at home rather than going out to the theatres,”Pantvaidya said. Since video streaming platforms are nowacquiring telecast rights for films faster than before, viewers don’t need to wait too long towatch a film.“The latest content can be viewed much sooner than before when a movie would make it to televi- sion screens almost after six months of the theatrical release,” Pantvaidya said. Jehil Thakkar, partner, Deloittebelievesthatwithalotmore content now available on video streaming platforms viewers are turningextremelyselectiveabout what they want to watch. “However,viewers are ready to pay for English content and therefore, Hollywood films continue to be popular,”Thakkar said. The year 2017 saw fewer blockbusters unlike 2016,when AamirKhan starrerDangal made about `374.5 crore and Salman Khan’s Sultan earned about `300.6 crore. Continued on Page 2
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.