OPINION, P8 ECONOMY, P2 SURJIT BHALLA Reforms critical if rural distress is to be alleviated PRICE REDUCTION ‘DOUBLE WHAMMY’ Critics must note, the sharp jump in direct tax collections is a direct result of DeMo EDITORIAL INTERNATIONAL, P16 Sanjiv Mehta-led HUL receives GST profiteering notice Airbus’ Enders slams Brexit, Trump as double protectionist threat MUMBAI, WEDNESDAY, JANUARY 17, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 259, 22 PAGES, `6.00 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: 34,771.05 ▼ 72.46 NIFTY: 10,700.45 ▼ 41.10 NIKKEI 225: 23,951.81 ▲ 236.93 HANG SENG: 31,904.75 ▲ 565.88 `/$: 64.04 ▼ 0.55 `/€: 78.23 ▼ 0.36 BRENT: $69.38 ▼ $0.88 GOLD: `30,056.00 ▲ `218.00 GILTS TRIP Bond markets get a bout of Viral fever IN THE NEWS Merrill Lynch sells Airtel shares worth `1,931 cr MERRILL LYNCH on Tuesday offloaded shares worth `1,931 crore in telecom operator Bharti Airtel through an open market transaction, reports PTI. According to the bulk deal data available with the BSE, Merrill Lynch Markets Singapore sold 3.87 crore shares, amounting to a 0.97% stake, in Bharti Airtel. The shares were disposed of at an average price of `499.1 apiece, valuing the transaction at `1,931.23 crore, the data showed. PM launches HPCL refinery in Rajasthan WHILE KICK-STARTING work at the `43,129-crore HPCL’s Rajasthan refinery on Tuesday, PM Narendra Modi said the refinery would be crucial in fulfilling India’s energy requirements, and at the same time, would bring a wave of development in the desert areas of the state, reports Saurabh Kumar in Barmer. RBI deputy governor Viral Acharya’s hawkish tone sends bond markets into a tizzy Benchmark yield (%) 7.730 7.55 7.337 7.375 7.020 Jan 1, ‘18 6.73 6.310 BONDS SOLD OFF sharply on Tuesday, spooked by Reserve BankofIndia(RBI)deputygovernor Viral Acharya’s comments the interest rate risk of banks could not be managed over and over again by the regulator. Acharya had observed late on Monday that large holdings of G-Secs and state development loans by banks exposes them to“re-pricing of governments’borrowing costs which could rise due to inflationary, fiscal or other domestic as well as global macroeconomic developments”. The DG was speaking at an annual dinner hosted by the Fixed Income Money Market and Derivatives Association of India. Acharya asserted that the trend of regular use of ex-post regulatorydispensationtoease the interest rate risk of banks was not desirable from the point of view of efficient price discovery in the G-Sec market andeffectivemarketdiscipline ontheG-Secissuer.“Italsodoes not augurwell fordeveloping a sound risk management culture at banks,”he said. 63.87 64.04 63.75 64.00 6.665 BHAVIK NAIR Mumbai, January 16 63.50 Jan 16, 2018 May 12, 2017 64.25 Inverted scale Jan 16, Dec 29, 2018 2017 Source: Bloomberg Recourse to such asymmetric options is akin to the use of steroids. They get addictive...even though their use may be justified to relieve occasional intense pain — VIRAL ACHARYA RBI DY GOVERNOR The yield on the more widely-traded benchmark surged to 7.58% intra-day before ending the session at 7.55%, the highest level since it was introduced in May last year. Should the yields stay at these levels, not only will the government’s borrowing costs go up, banks too could refrain from lowering interest rates on loans. Already, the central bank has in the past one month twice deferred a part of the bond auctions. In late Decem- ber, it did not accept any bids for two sets of gilts worth `11,000 crore; only `4,000 crore of supply hit the market. In the firstweek of January,the RBI did not accept bids for two long-dated papers worth `4,000 crore. Banks, whose bond portfolios have already been hit with the yield moving by 90 basis points between October and December, could be staring at bigger losses. Continued on Page 2 STREAMLINING LOGISTICS Special Feature Take a ladder approach for your investment portfolio Investment in securities maturing as per your requirement of funds, with focus on preservation followed by growth, leads to perfect laddering ■ Personal Finance, P15 QuickPicks Russia lowers LNG price for India INDIA ON Tuesday got Russia to lower the price of liquefied natural gas (LNG), making the fuel’s import even cheaper than the recently renegotiated deals with Qatar and Australia, reports PTI. State gas utility GAIL (India) has convinced Russia's Gazprom to lower price of gas under a 20-year deal. PAGE 14 Patanjali enters online sales BABA RAMDEV-LED Patanjali Ayurved on Tuesday announced its partnership with eight ecommerce companies in a move to push sales of its products, reports fe Bureau in New Delhi. The entire range of Patanjali products would now be available on the platforms of Amazon, Grofers, Shopclues, Flipkart, BigBasket, 1mg, Paytm Mall and Netmeds. PAGE 6 Trial version of e-way bill gets on the road FE BUREAU New Delhi, January 16 THE TRIAL RUN for the e-way bill — an electronic mechanism for tracking transportation of goods under the goods and services tax — began on Tuesday with 11 states participating. The system, which is expected to plug revenue leakages currently plaguing indirect tax revenue collection,will become mandatory for all states from February 1. Generating an e-way bill will now be mandatory for all interstate movement of goods beyond 10 km and a value of more than `50,000.Although the GST Council had earlier deferred the introduction of the e-way bill to April, reports of widespread tax evasion amid declining GST revenue collections appear to have forced it to advance the launch by two months. “The e-way bill can be generated either by the supplier, recipient or transporter of PILOT PROJECT ■ Trial run begins with 11 states on board ■ Karnataka, Rajasthan, Haryana, Maha among others, implement mechanism ■ Will be mandatory for all states from Feb 1 ■ Govt hopes to plug tax evasion by tracking movement of goods goods through various modes including online at the GST Network portal, android mobile app, SMS and API (application programming interface)-based site to site integration,” GST Network (GSTN) said in a statement. GSTN runs the ITbackbone for GST and will also provide services for the e-way bill. Continued on Page 2 JOBS GROWTH EPFO data say 5.5 m jobs created in FY18 FE BUREAU New Delhi, January 16 NEW DATA DERIVED from Employees’ Provident Fund Organisation (EPFO) accounts suggestthat,contrarytothejobless-growthnarrative,Indiacreated at least 5.5 million jobs in theformalsectorinFY18,ontop ofaround4.5millioninFY17— that is,not onlyare the number of jobs created many times greater than that put out by organisations such as the LabourBureau,eventhegrowth is significantlyhigherthan that suggested bythem. Theanalysis,byPulakGhosh High jobs as per EPFO... (Million) Labour Bureau says only 4.2 lakh jobs created in FY17 4.5 5.5 ...don't jell with ...or consumption poor GDP growth... & investment data (At 2011-12 prices) 8.0 % y-o-y 7.5 7.0 6.5 6.5 6.0 5.5 FY17 FY18* *Based on April-Nov data (At 2011-12 prices) % y-o-y Pvt final 10 consumption expenditure 8 5.5 5.0 of IIM Bangalore and Soumya Kanti Ghosh of State Bank of India,was released onTuesday. FY18 (AE) 4.5 4 2 5.5 FY13 6 0 6.3 4.9 FY13 Gross fixed capital formation FY18 (AE) Thedataareatvariancewith not just headline GDP data, it doesn’tjellwithconsumptionor CJI met four senior-most judges of SC: Sources PRESS TRUST OF INDIA New Delhi, January 16 `/$ 63.25 ● COURT IN A FLUX investmentdataeither.Afterall, if investment is so sluggish, where are these jobs being created? And if this is the level of jobs creation,why is consumption growth so sluggish? But the problem is that the traditional LabourBureau-type data don’t capture what is happeningeither.ArvindSinghalof consultancy firm Technopak estimates,basedonaboutseven jobs for each `1 crore of turnover,that the retail sector alone (both organised and unorganised) generated 2-2.5 million jobs overthe last 12 months. Continued on Page 2 IN A BID to resolve their differences,Chief Justice of India (CJI) Dipak Misra on Tuesday met the four most senior judges of the Supreme Court who had hurled several accusations against him including on the issue of allocation of public interest litigations of a sensitive nature. The apex court sources said the chief justice met the four judges — justices J Chelameswar, Ranjan Gogoi, MB Lokur and Kurian Joseph — for about 15 minutes before starting the normalwork of the day. After the meeting, the CJI andthefourjudgeswentahead with their listed business. Despite optimism expressed on Monday by legal bodies, the crisis in the Supreme Court over complaintsagainstthechiefjustice seemedfarfromover.Atapress conference last week, the four judges had flagged certain problems, including the assigning of cases by the CJI, and said there were certain issues afflicting the country’s highest court. Continued on Page 2 Land of opportunity Israeli Prime Minister Benjamin Netanyahu and his wife Sara at the Taj Mahal in Agra on Tuesday, the third day of their India visit CASH-BACK OFFERS Jio keeps up telcos’ free-for-all FE BUREAU New Delhi, January 16 RELIANCE JIO MAY have started charging its customers but continues to keep up thepressureonincumbentsby frequently coming out with offers like cash-backs that virtually continues to keep its services free. In another such move RECHARGE, NO CHARGE ■ For recharges of `398 and above made between Jan 16 and 31, cash-back of `400 ■ If recharge through Mobikwik, cash-back of an additional `300 whichwouldforceincumbents to revise their tariffs downwards, Jio has come up with a cash-back offer of up to 100% on recharges worth `398 and above made between January 16 and 31. For instance, a consumer makingarechargeof`398will get a cash-back of `400. 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.