OPINION, P8 ECONOMY, P2 INTERNATIONAL, P16 AFFORDABLE HOUSING FUND DIGITAL LIABILITY Govt to raise `25k cr in extra-budgetary resources by 2022 Central banks must act against cryptocurrencies, says BIS head Carstens EDITORIAL DigitalPay gets Tez, WhatsApp moment still to come! Can UDAY targets be enforced using a tariff policy as is being envisaged? MUMBAI, WEDNESDAY, FEBRUARY 7, 2018 VOLUME XXXXXV NO. 276, 28 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 SENSEX: 34,195.94 ▼ 561.22 NIFTY: 10,498.25 ▼ 168.30 NIKKEI 225: 21,610.24 ▼ 1071.84 HANG SENG: 30,595.42 ▼ 1649.80 `/$: 64.25 ▼ 0.18 `/€: 79.72 ▲ 0.12 BRENT: $66.79 ▼ $0.83 GOLD: `30,433.00 ▲ `166.00 BULLS-DOZED World stock sell-off runs to $4 trn Sensex, Nifty slide for sixth session; European markets drop 2.5%; Wall Street futures point to more falls after choppy moves; Nikkei ends down almost 5%, ex-Japan Asia down 3.5% REUTERS London/Mumbai/Tokyo, February 6 WORLD STOCK MARKETS nosedivedforafourthdayrunning on Tuesday, having seen nerves about higher interest rates and overcooked valuations wipe $4 trillion off what just eight days ago had been record highs. Indian shares slid as the global market rout whacked sentiment, adding to existing investor concerns ahead of a central bank meeting this week and a new capital gains tax later in the year. The broader NSE Nifty and the benchmark BSE Sensex each fell about 1.6% on Tues- Open 33,753.78 34,757.16 — HASMUKH ADHIA, FINANCE SECRETARY Close 34,195.94 Hang Seng Close Jakarta Comp Fall (%) -5.1 Close 30,595.42 Taiwan TAIEX Sensex -5 10,404 Nikkei 225 Nifty -4.7 -3.4 -1.6 3,370.65 day, marking a sixth consecutive session of falls afterearlier falling as much as 3.7% each. KOSPI A man reacts after looking at an electronic stock board outside a securities firm in Tokyo on Tuesday. Japan’s broad Topix index and blue-chip Nikkei were poised to enter a correction as its shares headed for the biggest decline since June 2016 BLOOMBERG underthreatfollowingthegovernment’s announcement of a 10% long-term capital gains The slump in Wall Street overnight comes as India’s record-settingsharerallycame tax in equities, which starts in April.That has raised concerns about a drop in foreign invest- 2,453.31 ment into India. Meanwhile, fears are rising the Reserve Bank of India (RBI) HERO MOTOCORP on Tuesday reported a healthy growth in revenues of 14.8% to `7,305 crore for the quarter ended December 31, 2017, reports fe Bureau in Mumbai. The growth was driven by a 16% growth in two-wheeler volumes to 17,09,107 units in the quarter. Profits lagged, however, growing at just 4.3% due to a 17% decline in other income and higher material costs at 67% of sales, up 200 basis points from the corresponding quarter of the previous year. PAGE 6 Latest from Reliance Jio: 200% cashback on recharge of `398 RELIANCE JIO has once again ambushed incumbents by launching a new cashback offer under which a subscriber who recharges with a plan for `398 or more stands to get a cashback of up to 200% in the form of vouchers, reports fe Bureau in New Delhi. In January, the company had come up with a cashback offer of up to 100% on recharges worth `398 and above made between January 16 and 31. PAGE 6 Centre (Budget) CPSEs 0 3,00,441 4,76,858* 3,38,097 2,73,445 1,00,000 2,86,282 2,00,000 3,11,447 4,00,000 3,00,000 4,78,271* 5,00,000 FY14 FY15 FY16 FY17 FY18RE FY19BE *The sharp jump is owing to the inclusion of nearly `72,000 crore expended by FCI for procurement operations capex by the government in the current fiscal year would be `4,04,863 crore, against `4,76,858 crore shown in the Budget.In other words,inclusion of FCI borrowings has inflated off-Budget public capital spending in the cur- rent year by around 18%. For the next financial year too, the extra-Budget public capex figure envisaged of `4,78,271 crore includes a similar“capital outlay”by FCI. Continued on Page 2 Aiming hire AMID A HOST of measures proposed in the Budget to boost employment generation, the proposal that the governmentwill bearemployers’ entire 12% Employees’ Provident Fund contribution for all new industrial workers earning `15,000 a month for three years,under the PMRPY scheme,will create 5 lakh new jobs in 2018-19 alone, according to the government’s estimate. Finance minister Arun Jaitley has allocated `1,652 crore for 2018-19 for the jobincentivising Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), first launched in August 2016, against an estimated `500-crore actual outlay in 2017-18. PMRPY Establishments Continued on Page 2 PMPRPY (textile) Centre raises sugar import duty to 100% FE BUREAU New Delhi, February 6 These new jobs, essentially formal in nature, will further add to the “formal” nature of thejobsthatthecountry’sestimated 24 crore non-agricultural workforce have. THE GOVERNMENT ON Tuesdaydoubledtheimportdutyon rawandrefinedsugarto100%, a move aimed at preventing dumping of heavily-subsidised sweetener from Pakistan at a time Indian production is expected to exceed consumption. It also raised the import dutyon chick-pea to 40% from 30%earlier,asagoodlocalharvest has dragged down local prices to below benchmark prices in manyareas. Saddledwithsurplusstocks in 2017-18, Pakistan recently hiked the quantityof sugareligible foran export subsidyto 2 million tonnes from 0.5 million tonnes earlier. Continued on Page 2 Continued on Page 2 28,475 595 Covering beneficiaries 21,54,806 1,77,284 Financial benefits (` cr) 309.48 13.05 Source: Labour ministry TEZ THRUST Digital payments to grow to $1 trillion by 2023: Credit Suisse SHRITAMA BOSE Mumbai, February 6 DIGITAL PAYMENTS IN India, currently estimated at around $200 billion, are projected to rise fivefold in the next five years to touch $1 trillion, according to an estimate made by Credit Suisse.At this point, the value of digital payments will rise from around 10% right now to around 25%, the study adds. While Google’s Tez app has alreadyplayed a big role in catapulting digital payments, a big boost will come from UPI now growing very Tez Usage jumps dramatically after Google launched Tez app 160 140 120 100 80 60 40 20 0 UPI volumes (in million) Apr 2016 Dec 2017 WhatsApp and Facebook and othermessagingappsbuilding this into their platforms. Growing steadily since the 140 120 100 80 60 40 20 0 UPI value 100 UPI values (in ` bn) 80 60 40 20 Apr 2016 Dec 2017 launch of the BHIM or Bharat InterfaceforMoneyappandby leaps and bounds since Google Tez took it up,the Unified Pay- 0 M-wallet value UPI beats wallets (in ` bn) Apr 2017 96.4 93.88 Hero MotoCorp sees Q3 sales rise 15%, but profit lags ONE POSITIVE SURPRISE in the latest Budget was a massive `91,832 crore or 24% jump in FY18 off-Budget public capex from the level estimated a year ago — this has more than offset a `36,356-crore shortfall in budgetary capex from the level envisaged — but the impressive increase was aided byan odd piece of accounting. A sum of 71,995 crore borrowed by Food Corporation of India (FCI) to undertake procurement of grains and other farm commodities was added by the finance ministry to the capital outlay by public enterprises, a practice without any precedent or patent justification. Minus the FCI entry,extra-budgetary (` crore) 21.91 74.42 AFTER A DROP in 2016, India’s gold demand rebounded last year with a 9% rise to 727 tonnes when global consumption hit an eight-year low, showed data released by the World Gold Council (WGC) on Tuesday, reports fe Bureau in New Delhi. However, domestic demand still trailed a 10-year average of 840 tonnes. WGC managing director (India) Somasundaram PR said demand in India, the world’s second-largest consumer, would remain in the range of 700-800 tonnes in 2018. PAGE 14 SURYA SARATHI RAY New Delhi, February 6 Public capex 2,53,022 Indian gold demand rebounds in 2017, but trails 10-year average PRASANTA SAHU New Delhi, February 6 couldbecomemorehawkishas inflation accelerates and the government raises investments in rural sectors and healthcare. The RBI is set to conclude its two-day policy meeting on Wednesday and is expected to leave rates on hold but could issue stronger warnings about inflation. Europe’s main bourses were down around 2.5% and Wall Street futures pointed to more losses too as “fear gauges” of market volatility leapt to their highest level since a surprise devaluation of China’s currency in 2015. The Dow Jones Industrial Average opened almost another 2% lower on Tuesday after two days of heavy losses that have undermined faith in the US stock market’s almost decade-long rally. The Dow Jones Industrial Average fell 536.97 points, or 2.21%, to 23,808.78, before bouncing back. The S&P 500 lost 49.06 points, or 1.85%, to 2,599.88 and the tech-heavy Nasdaq Composite dropped 128.97 points,or 1.85%,to 6,838.56. The flashing warning signs left investorswith little option but to seek traditional refuges such as gold and the dollar. ● LEVY DOUBLED Odd FCI entry boosts off-Budget PF plan will create 5L jobs in just FY19: Govt public capex in FY18 by 18% 2,29,067 QuickPicks -1.5 PAYROLL PAYOFF 1,96,681 Book profits on your equity investments just as they hit the `1 lakh tax-free mark and reinvest them immediately to benefit from the power of compounding ■ Personal Finance, P15 -1.6 10,498.25 2,63,094 New LTCG tax reality: Book profits regularly at `1 lakh -1.7 34,195.94 21,610.24 Shanghai Comp Fall (%) 6,478.54 AGAINST CONVENTION Special Feature 1,000000 Previous close What happened...was mainly because of global shake-up that was happening... but the government will look into what it can do 1,87,675 B-SCHOOLS IN MUMBAI SENSEX 30 25 20 15 Nov 2017 ments Interface (UPI) channel has overtaken mobile wallets in terms of the monthly value of transactions. 10 UPI+wallet as 25.11 % of debit/credit cards as PoS 13.64 Apr 2017 Nov 2017 According to data released by the Reserve Bank of India, November 2017 saw a total of 105 million UPI transac- tions worth `9,640 crore, against 187 million mobile wallet transactions worth `9,388 crore. What’s more, taken together, the UPI and mobile-wallet transaction values are now equivalent to a quarter of the value of card transactions made at point of sale terminals. In November, UPI and wallets were used for transactions worth `19,028 crore, while the combined value of debit and credit card transactions stood at `75,779 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.