OPINION, P6 ECONOMY, P2 EDITORIAL Learn lessons from US’s energy success and India’s failure SPECTRUM AUCTION WEF AT DAVOS Simplifying GST filing will be a big relief, and anti-evasion steps are justified by low mop-up BHAMY V SHENOY INTERNATIONAL, P4 Open-minded on timing, will await Trai report: Sundararajan Europe readies riposte to Trump's ‘America First’ push NEW DELHI, MONDAY, JANUARY 22, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XLIII NO. 278, 16 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 Q3 EARLY BIRDS ● HPCL BUY ONGC's maiden debt limit raised to `35,000 cr Most companies meet expectations Q4 Q1 Q2 Q3 Sample of 90 companies (excluding banks & financials) EARNINGS SEASON HAS got off to a moderately good start withmostcompaniesreporting results in line with the Street’s expectations for Q3FY18,with a few disappointments. The numbers, however, need to be seen in the context of the very weak base quarter in Q3FY17 when the acute shortage of cash, following the withdrawal of high denomination notes, disrupted the economy. Whathasbeenhearteningis themanagementcommentary fromHindustanUnileverwhich suggests consumer sentiment isimprovinggradually.Butrealisations from other businesses suggest there isn’t too much pricing power; at UltraTech,for instance, prices were flat year- 124.87 79.54 371.88 (bps, chg y-o-y) 630.36 25.09 8.50 8.18 57.62 12.20 9.36 16.30 -352.17 Q4 Q1 Q2 Q3 RM to sales -8.72 Q4 Q1 Q2 Q3 (bps, chg y-o-y) (% chg y-o-y) 70.44 FE BUREAU Mumbai, January 21 (% chg y-o-y) Net profit OPM -125.17 ELECTION COMMISSIONER OM Prakash Rawat was on Sunday appointed the next chief election commissioner succeeding AK Joti who retires on Monday, the law ministry said, reports PTI. The government also appointed former finance secretary Ashok Lawasa an election commissioner. The appointment of the election commissioner was made as a vacancy would have arisen in the threemember poll panel after Joti's retirement. Net sales 9.83 IN THE NEWS Rawat named CEC, Lawasa EC Consumer demand on recovery mode, but pricing power subdued in many industries Q4 Q1 Q2 Q3 Source: Capitaline on-yearandfell5%quarter-onquarter. Most heavyweights appear to be adjusting to some change orthe otherin the environment — either globally or locally which is probably why there are no surprises. Continued on Page 2 BUDGET 2018-19 Special Feature Triumph of technology at Sri Venkateswara Swamy Temple Tirumala Tirupati Devasthanams, which manages the Sri Venkateswara Swamy Temple in AP plans to incorporate the latest tech tools to provide enhanced services to pilgrims ■ EFE, P8 QuickPicks IL&FS arm plans to sell `4k-cr project to Canada pension fund IL&FS TRANSPORTATION Networks (ITNL) is in talks with the Canadian Pension Plan and Investment Board to sell its ownership stake in the Chenani-Nashri tunnel-way in J&K, reports Rouhan Sharma in Mumbai. ITNL, the road development arm of infrastructure development and finance major IL&FS, said the company is looking at both options of either selling the project or refinancing. PAGE 5 Steel ministry seeks import duty waiver for coking coal AHEAD OF the Union Budget 2018-19, the steel ministry has sought waiver of the import duty on coking coal to boost the sector, reports PTI. "We have written to the finance ministry to bring to zero the import duty on coking coal from the present 2.5%," steel secretary Aruna Sharma said. The ministry in its recommendations has also suggested to bring down the import duty on steel scrap to nil, Sharma said. PAGE 3 Sops could elude SEZs, yet again BANIKINKAR PATTANAYAK New Delhi, January 21 THE ANTICIPATED PUSH for exports in the upcoming Budget to boost jobs is unlikely to include substantial relief to special economic zones (SEZs) that were once the growth engine for the country’s outbound shipments. The minimumalternatetax(MAT)onSEZ unitsanddevelopers,whichhas jeopardised the tax-free status of these enclaves and severely underminedtheirexportpotential,is unlikelyto be removed in theBudgetfor2018-19despite freshrequestsbythecommerce department,officialsourcestold FE. Fearing potential revenue losses, the finance ministry is even reluctant to endorse the commerce department’s suggestion to cut MAT for SEZs by just over a half and bring parity with the rate applicable for the InternationalFinancialServices Centre (IFSC) in Gujarat. The commerce ministry hasalsoproposedthatthesunset date to scrap tax incentives to SEZ units that sign in after end-March 2020,be removed. “There is still uncertainty about indirect tax collection No special treatment ■ Revenue dept unwilling to halve MAT for SEZs to bring parity with IFSC ■ Uncertainty over demand to remove sunset date for I-T exemption ■ SEZs won't be allowed to sell products in domestic market at lowest FTA tariffs ■ Abolition of DDT for SEZ developers on a par with firms in IFSC unlikely growth after the implementationoftheGSTandsubsequent rate cuts. The government is already hard-pressed to maintain fiscal deficit target.So this may not be an ideal time to scrap MAT on SEZs and dent the direct tax kittyaswell,”said a government official. The revenue department is also unlikely to scrap the dividenddistributiontax(DDT)for SEZ developers and treat them on a par with the companies located in the IFSC, said the one of the officials. Continued on Page 2 FUNDS FLOW E-tailers raise over $7 bn in 2017, up 170% y-o-y ANUSHREE BHATTACHARYYA New Delhi, January 21 A FAIRLY HEFTY $7 billion flowed into e-commerce ventures in 2017, data put together by research firm Jefferies shows, suggesting Indian e-retailers are living up to their promise. After a somewhat dull 2016, when the e-commerce space attracted just $3 billion in investments, 2017 saw private equity (PE) players and venture capitalists firms top up their exposure to e-tailers. Funds raised ($ billion) 7.4 5.9 4.2 @ 2.7 0.9 2013 2014 2015 2016 2017 Note: Only deals in internet sector of $5m & above considered Source: Jefferies, Media reports The stand-out investor last year was undoubtedly Japanese conglomerate SoftBank Bank Group which committed $4 billion to three companies — Flipkart, Ola and Paytm. The Masayoshi Son-led Softbank has bet close to $6 billion in the last three years, data from Traxn shows. Other big players such as Tencent and Alibaba were also supportive of ecommerce ventures last year. Meanwhile, Amazon, which has committed $5 billion to its India venture, continues to infuse capital arm from time to time. While e-tailing continued to account for the largest share of the investments in value terms, travel, fintech and gaming businesses also managed to raise a fair bit as part of larger rounds of fund raising of $50 million or more. Continued on Page 2 FE BUREAU New Delhi, January 21 STATE-RUN ONGC HASgotits borrowing limit raised to `35,000croretofunditsacquisition of the government’s entire 51.1% stake in Hindustan Petroleum (HPCL) in an off-market deal. Earlier, the debt-free firm was given approval for mobilising `25,000crorefromthemarket. ONGC’s CMD Shashi Shanker, however, said the companyhaskeptallfinancing options open. “There are the optionsofinternalaccruals,liquid assets and short-term borrowings. We will exercise the most beneficial option available with us,”he said. Details on Page 2 RURAL FOCUS Agriculture credit target to be increased by 20% Move in sync with govt’s intent to mitigate rural distress, boost consumption Farm credit (` lakh crore) Target Actual 12 10.65 10 8.5 8 6 PRABHUDATTA MISHRA New Delhi, January 21 4 FINANCE MINISTER ARUN Jaitley may announce agricultural credit target of `12 lakh crore for 2018-19, up 20% from the level for the current year, as he lends focus to addressing rural distress in the comingBudget.Whilethefarm credit targets have been overachievedinrecentyears,thedisbursalbyOctoberendthisfiscal was 67% of the annual plan. 0 8.8 6.1 5.8 7.1 7 8 8.5 9 12 10 6.71* 2 Nil 2012-13 ‘13-14 ‘14-15 Source: Govt of India/Nabard The government is confident of exceeding the farm credit target by end of March. “There may be an increase of 20% in the target as this is the last full Budget before the (government’s) tenure ends in May 2019.The UPA-II govern- ‘15-16 ‘16-17 ‘17-18 ‘18-19^ ^Likely; *Upto Oct. 31, 2017 ment had also raised the target by 20% in its last year in office,”an official said. Jaitley had asked banks and cooperatives to lend `10 lakh crore in FY18 as farm loan. Continued on Page 2
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