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APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOLUME XLIII NO. 293, 26 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 READ TO LEAD SENSEX: 34,082.71 ▼ 113.23 NIFTY: 10,476.70 ▼ 21.55 NIKKEI 225: 21,645.37 ▲ 35.13 HANG SENG: 30,323.20 ▼ 272.22 `/$: 64.29 ▼ 0.04 `/€: 79.37 ▲ 0.35 BRENT: $66.81 ▼ $0.05 GOLD: `30,182.00 ▼ `251.00 IBBI amends valuation norms for insolvency THE INSOLVENCY and Bankruptcy Board of India (IBBI) has made it mandatory for a resolution professional to appoint two registered valuers to determine both the fair as well as liquidation value of a stressed company, instead of the existing practice of assessing only the liquidation value, reports fe Bureau in New Delhi. The changes through amendments to IBBI’s Insolvency Resolution Process for Corporate Persons Regulations has come amid differences between lenders and bidders on the proper valuation of a stressed company. Two groups keen on Aamby Valley, liquidator says TWO INDIAN companies — Mahindra Lifespace Developer and the Piramal Group — have shown interest in purchasing Sahara’s `34,000 crore-worth Aamby Valley properties in Pune district, the Supreme Court was informed on Wednesday, reports PTI. The official liquidator of the Bombay High Court told the apex court that both these companies have shown interest in purchasing the properties, but at present, they are conducting the due diligence. MSP-based deficiency payments could cost `80,000 crore or more Rice* Wheat^ Bajra Gram Masur are lowerthan the C2 costs the MS Swaminathan report had recommended. Though the ‘NEUTRAL’ STANCE RBI keeps policy rate unchanged Also raises inflation forecast, lowers GVA; governor Patel says current data trends do not necessitate change in rate or stance FE BUREAU Mumbai, February 7 WITH BOND YIELDS having spurted by about 75 basis points in the last two months, and banks starting to increase loan rates, money has become costlier even without the Reserve Bank of India (RBI) changing its stance. Wednesday’s muchexpectedstatusquoontherepo andaneutralstance,therefore, left stocks and bonds virtually unmoved. The yield on the benchmark 10-year bond fell 5 basis points (bps) to end the session at 7.69%. Most economists believe the RBIwill keep rates on hold. But with corporate bond rates up about 50 bps in the last four months, it’s clear borrowers will have to start paying more. The RBI raised its inflation forecast for Q4FY18 to 5.1%, calling for vigilance. It also lowered the gross value added (GVA) for growth estimates for 2017-18 to 6.6% and projected a growth of 7.2% for 2018-19. Sonal Varma, MD and chief economist, Nomura, said she expectstheRBItoleaverateson hold through 2018 because of anamplerealratecushion.“The OTHER MOVES ■ Relief for MSME borrowers who have registered under GST ■ Harmonising of bench- mark rate methodology ■ Ombudsman scheme for customers of NBFCs ■ Review of the currency management system ■ Removal of credit caps on MSME (services) under priority sector RBI governor Urjit Patel Special Feature into the market, this will depress prices further ■ Cotton MSP has to be hiked 18%, paddy 11% ■ Bureaucrats will now take bribes to register farmers for the deficiency payments and to release them 6,382 5,527 1,472 2,732 4,349 Tur ■ Hiking MSP, by even statements suggest that while the RBI is growing more confidentonthegrowthrecovery,its inflationary concerns are also rising.However,itiswaitingfor more clarity on the costing details of the new MSP (minimum support price) mechanismtoascertaintheimpacton inflation,”Varma said. RBI governor Urjit Patel noted that current data trends did not necessitate a change in therateorthestance.Theinflation outlook was clouded, he said by several factors such as the fiscal slippage, the secondround effects of housing rent allowance (HRA) hikes in the states, a rise in crude oil prices, possible impact of proposed MSP hikes, the impact of the hikes in customs duties and a potential loss of investorconfidencefollowingthenormalisationofmonetarypolicybysome majoradvanced economies. “The deterioration in public finances risks crowding out private financing and investment,”Patel said. For 2018-19, inflation as measured by the Consumer Price Index is estimated in the range of 5.1-5.6% in the first half of the fiscal, including diminishing statistical HRA impact of central government employees, and 4.5-4.6% in the second half, with risks tilted to the upside. Continued on Page 2 Urad the lower A2+FL cost, will lower export competitiveness Moong Ground- Soya- Rapeseed/ nut bean Mustard *Roughly 60 million tonnes is not procured; ^Roughly 40 million tonnes is not procured new MSPs — also a Budget promise — are based on 1.5 times the A2+FL costs which Maize where this is being tried, traders have ensured prices fell dramatically 7,448 0 2,550 4,000 8,210 8,000 ■ All producers will want to avail the new price crore 20,000 12,000 ■ In Madhya Pradesh `82,276 (` crore) 16,000 CULTIVATING CORRUPTION Total Cost of deficiency payments scheme 5,338 THE BUDGET’S PROMISE of minimum support pricebased deficiency payments, should the government not be able to procure all crops at MSP, could cost around `80,000 crore based on conservative estimates.It will also trap the farm sectorin massive bureaucracyand corruption as farmers will need to be registered to get these sops and some babu will need to clear the payments. The estimates are based on current MSPs,not on the hikes thatwill need to be made if the PROCUREMENT PANGS 2,468 SUNIL JAIN New Delhi, February 7 13,880 THE CENTRE is in the process of linking driving licences with Aadhaar to weed out fake licences and a software for this covering all states on a real-time basis is under preparation, the Supreme Court was told on Wednesday, reports PTI. A bench comprising justices Madan B Lokur and Deepak Gupta was informed about it by a courtappointed committee on road safety headed by Supreme Court ex-judge KS Radhakrishnan. This assumes significance as a five-judge Constitution bench headed by Chief Justice Dipak Misra is hearing a clutch of petitions challenging the constitutional validity ofAadhaar and the enabling 2016 law. BUDGET PROMISE 18,600 IN THE NEWS Driving licence to be linked with Aadhaar: SC told ■ If all produce comes Budget did not specify which cost will be used, chances are thelowerA2+FLwillbeused.In the case of paddy,for instance, MSPs will need to be raised by around 11%, 18% in the case ● 10 BPs HIKE VIOLATION OF JUDGMENT Signalling an uptrend, HDFC Bank raises MCLR FE BUREAU Mumbai, February 7 INADEFINITEindicationloans are turning costlier, HDFC Bank onWednesdayraised the marginal cost of funds-based lending rate (MCLR) by 10 basis points for some tenures. The one-year MCLR was raised to 8.2% and matches that at ICICI Bank. However, StateBankofIndia(SBI)charges alower7.95%.AxisBank,which last month became the first large lender to raise its MCLRs since the pricing mechanism came into effect on April 1, 2016,charges 8.3%. At HDFC Bank, the sixmonth, two-year and threeyearMCLRs are now8%,8.3% and 8.5%,respectively. With yields in the bond market rising nearly 100 basis points in the last few months, banks have found it more expensive to issue certificates of deposit (CDs). At the same time, the higher cost of borrowing from the markets may have nudged some corporates to return to banks,allowingthelattersome headroom to raise rates. Paresh Sukthankar,deputy managing director at HDFC Bank,hadsaidlastmonthafter the bank’s third-quarter results that interest rates were set for a rise. Continued on Page 2 of cotton, 41% for jowar, etc, using even this lower cost as the base. A simple exercise has been done, assuming that all production will be eligible for the deficiency payments — fruit and vegetables have not been included in the calculations. In the case of wheat and rice, where substantial procurementtakesplace,onlythat portion of the crop that is not procured has been used forthe exercise. Of the 105-110 million tonnes of both kharif and rabi rice, only 60 million tonnes has been assumed in the calculations for deficiency payments. Continued on Page 2 SC cancels iron ore mining leases of 88 firms in Goa Directs Centre, Goa to grant fresh green clearances, not second renewals, as per earlier ruling PRESS TRUST OF INDIA New Delhi, February 7 THE SUPREME COURT on Wednesdayquashedthesecond renewal of iron ore mining leases given to 88 companies in Goa in 2015. The apex court directedtheCentreandtheGoa governmenttograntfreshenvironmental clearances to them. Itsaidthestategovernment was obliged to grant fresh min- IN A HOLE ■ The apex court directed setting up of a special investigation team and a team of chartered accountants to recover the amount from mining companies that were allowed to extract ore in violation of the law ■ The judgment came on a petition filed by an NGO, Goa Foundation ing leases in accordance with law,inviewofitspreviousjudgment,and not second renewals to mining leaseholders. The apex court had said in previous judgments that only fresh leasesweretobegrantedbythe Goa government, not second renewals. Abench of justices Madan B Lokur and Deepak Gupta said mining leaseholders that have been granted a second renewal inviolationofitspreviousdecisionanddirections,aregranted time to manage their affairs andmaycontinueminingoperations till March 15 thisyear. “However,theyare directed to stop all mining operations with effect from March 16, 2018,untilfreshminingleases (not fresh renewals or other renewals)aregrantedandfresh environmental clearances are granted,”the bench said. Continued on Page 2 ● FIGHTING TALK NPAs are the Congress’ sins, says Modi PRESS TRUST OF INDIA New Delhi, February 7 SQUARELY BLAMING THE previous UPA government for the non-performing asset (NPA)situationinbanks,Prime Minister Narendra Modi on Wednesday said his government was wrongly criticised for the “sins” of the Congress which even hid the exactvalue of these stressed assets. ReplyingintheLokSabhato the motion of thanks on the President’saddress,Modiclaim- People should now know the truth... It is the interest on what you squandered away. These are your sins — NARENDRA MODI PRIME MINISTER ed if he had revealed the staggering figure of NPAs earlier, it wouldhavehittheeconomybut he was doing so now with evidence as banks were returning to health. He said the Congress gavewrongfiguresasNPAswere 82% and not 36%. Modi said thatthetotaladvancesmadeby banks rose from `18 lakh crore to `52 lakh crore. “People should now know the truth... It is the interest on what you squandered away. These are your sins,”Modi said targeting the Congress, and alleged that loans were given away to people who were close to those in power. Continued on Page 2 AUTO EXPO Our priority is to make people healthier Fitbit India country general manager Alok Shankar says his wearables brand has software, hardware and the platform to help its customers stay healthier ■ eFE, P15 QuickPicks Cognizant revenue up 9.8% in Q4, new US tax hits profit COGNIZANT, THE Nasdaq-listed IT firm with most of its staff based in India, reported a loss of $18 million for the Q4FY17, reports fe Bureau in Bengaluru. The loss was caused by a one-time incremental outgo of $617 million after the implementation of the US’ new Tax Reform Act. However, it posted a consolidated revenue of $14.81 billion, up 9.8% from 2016. PAGE 5 IndiGo looks to upstage rivals with aircraft upgrade IN A MOVE aimed at giving it an edge over its competition, India’s largest carrier IndiGo is set to upgrade a part of its existing order of 250 A320neos to A321LRs, industry sources told Manisha Singhal in Mumbai. The move will enable the carrier to expand the number of seats per flight and also deploy the aircraft on short overseas routes. PAGE 4 It’s compact SUVs for the shorter drive, EVs for the road ahead VIKRAM CHAUDHARY & DEEPAK KUMAR New Delhi, February 7 IF THE FUTURE is electric, the present is totally focused on compact sports utilityvehicles andpremiumhatchbacks.This is what a quick perusal of launches,previews and unveiling of concepts by the country’sleadingautomanufacturers at theAuto Expo that began on Wednesday shows. With electric vehicles (EVs) the latest fad in the auto sector, almost all the players talked of theirplanstodevelopsuchvehicles, with some seeking more clarityandapolicyinthisregard before they embark on their electricjourney.However,compactSUVsandpremiumhatchbacks,whichhavebeenfuelling the growth of auto sales for the past two to three years, are clearly to be the focus area to remaincompetitiveinthemarket. Entry-level small cars and even mid-size sedans are no more the focus areas. For instance, the country’s largestcarmakerMarutiSuzuki Indiaunveileditsconceptcompact carwith SUVtraits.Named ConceptFutureS,itisauniquely styledcompactcarwithdistinct BOSSES’ DAY OUT: On the opening day of the Auto Expo, the top brass of leading auto companies like Hero MotoCorp, Maruti Suzuki, Hyundai Motor India, Tata Motors and Mahindra & Mahindra took the stage to showcase their future and concept vehicles, in Greater Noida on Wednesday SUV-like characters and will define the next generation of design for compact vehicles in the country,the companysaid. “Compact is the natural choice of India’s carcustomers. Compact needs a fresh design language,one that is bold,con- fident and dynamic. Our designers have created this brandnewdesign,aggressiveon the outside,and bold and inviting interiors,” Maruti Suzuki Indiamanagingdirector&CEO Kenichi Ayukawa said at the unveiling. It also unveiled its electric concept compact SUV, e-Survivor, which demonstrates its efforts in the direction of electric mobility and presentsaninnovative,futuristicvision,the companysaid. Marutihasalreadysaidthat it would launch its first EV in the country in 2020. Hyundai Motor India’s strategy is no different from that of Maruti.On Wednesday it launched a newversion of its premium compact hatchback Elite i20 priced between `5.34 lakh and `9.15 lakh (ex- showroom Delhi). It also unveiled its global EV Ioniq. The company has already said that its first EV in the country would be launched in 2019. Continued on Page 2 ■ Related reports, Page 6
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