OPINION, P8 ECONOMY, P2 CHANDRA BHUSHAN India must urgently act on antibiotic resistance INTERNATIONAL, P16 SUNIL JAIN PRICING WAR CHALLENGING MURDOCH Privatise PSBs as they continue to do poorly. Pvt banks have to lend to agri, MSMEs anyway Telcos free to take legal measures, says Trai chairman Brian Roberts-led Comcast offers $31 billion for Sky NEW DELHI, WEDNESDAY, FEBRUARY 28, 2018 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOLUME XLIII NO. 310, 26 PAGES, `5.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 34,346.39 ▼ 99.36 NIFTY: 10,554.30 ▼ 28.30 NIKKEI 225: 22,389.86 ▲ 236.23 HANG SENG: 31,268.66 ▼ 229.94 `/$: 64.89 ▼ 0.09 `/€: 79.96 ▼ 0.01 BRENT: $67.30 ▼ $0.20 GOLD: `30,496.00 ▼ `77.00 FINMIN ORDER TO PSBs Scan NPAs over `50 cr for fraud Also sets 15-day deadline for ‘preemptive action’ to identify gaps, brace for rising risks to banking system TO-DO LIST Take preemptive action on fraud and identify gaps in 15 days CVOs to coordinate with CBI for frauds over `50 crore FE BUREAU New Delhi, February 27 IN THE NEWS AIIB okays $1.5 bn in loans for India THE ASIAN Infrastructure Investment Bank (AIIB) has approved $1.5 billion in loans to India for infrastructure projects in 2018, a senior official of the Beijing-based bank said on Tuesday, reports fe Bureau in New Delhi. The funds are meant for investment in energy, roads and urban development projects. STUNG BY A flare-up of the crisis at Punjab National Bank (PNB), the finance ministry on Tuesdaydirectedpublic-sector banks (PSBs) to scan theirnonperforming asset (NPA) accountsworth over`50 crore forpossiblefraudandreferany such fraud cases to the Central Bureau of Investigation (CBI). The ministry has also given PSBs a 15-day deadline to take “pre-emptive action” to identify gaps and brace up for increasing operational and technical risks to the banking Reported frauds to be examined for wilful default Status report to be sought from CEIB when an account turns NPA ED, DRI have to be involved if conditions warrant system. PNB has now revealed that additional letters of undertakings (LoUs)worth `1,251 crore were issued illegally to Gitanjali group of companies prompted by jeweller Mehul Choksi, thus taking the size of the fraud detected so far to `12,656 crore. Revealing the government’s “framework for timely detection,reporting,investigation of large-value bank frauds”, financial services secretary Rajeev Kumar tweeted: “CVO(chiefvigilanceofficer)to vet complaint and coordinate with CBI for frauds exceeding `50 crore; NPA cases above `50 crore to be examined for fraud.” The secretary said the reported frauds in this whole exercise have to be examined forwilful default. The identification of fraud has to be prompt and action has to be initiated within prescribed time lines. Banks have to seek the borrower status report from the Central Economic Intelligence Bureau (CEIB) when accounts turn NPAs and the CEIB has to get back within a week, Kumar said. Enforcement directorate/department of revenue intelligence will have to be involved, if the situation so warrants. THE INTERNATIONAL JEWELLERY business that’s part of the empire controlled by Nirav Modi has filed for bankruptcy in the US just as the Indian lender at the heart of the scam revised up its fraud estimate. Firestar Diamond blamed liquidity and supply chain ● LOW-COST ANDROID Special Features Why investing in dividend paying stocks is a good move Dividend paying stocks are ideal for younger investors as dividends could possibly help to offset the potential decline in stock prices and offer tangible returns ■ Personal Finance, P15 HungerBox processes 200 orders a minute The foodtech B2B start-up operates more than 75 digital cafeterias for corporate clients such as Accenture, Qualcomm and Microsoft, says founder Sandipan Mitra ■ Start-ups, P15 QuickPicks India has potential to grow at 7-8%, says Jaitley INDIAWILL remain one of the fastest-growing large economies over the next 10-20 years and it has potential to expand at 7-8% on reforms and supportive global environment, finance minister Arun Jaitley said on Tuesday, reports fe Bureau in New Delhi. “India has demonstrated that it has, even in a global environment of adversity, a potential to self-correct itself, to continue to take difficult decisions and maintain a high growth trajectory,” he said at the India-Korea Business Summit. PAGE 2 IndusInd looks to diversify, may set up insurance, MF subsidiaries PRIVATE-SECTOR lender IndusInd Bank is looking at diversifying its business by setting up insurance and mutual fund subsidiaries, its managing director and chief executive officer Romesh Sobti told Shamik Paul in Mumbai during an exclusive interview. The Mumbai-headquartered bank is currently in the process of scouting for acquisition targets in the insurance and mutual fund sectors to start the new subsidiaries. PAGE 10 Foodgrain output to hit record 277.5 mt; wheat may drop BACKED BY a higher production of winter-grown crops, India’s foodgrain output is estimated to reach a record 277.49 million tonnes (mt) in 2017-18 while the crucial wheat harvest may see a marginal decline, reports fe Bureau in New Delhi. According to the second advance estimate released by the agriculture ministry on Tuesday, the country’s wheat production may be 97.11 mt in 2017-18 crop year (JulyJune) compared with 98.51 mt in the previous year. PAGE 14 challenges and listed up to $100 million in assets and debt,according to Chapter 11 documents filed on Monday in a bankruptcy court in NewYork. The bankruptcy filing 250 PNB Share price on BSE (`) 150 100 50 99.25 June 23, 2016 98.35 Feb 27, 2018 FE BUREAU Mumbai, February 27 includes Firestar’sAJaffe wedding jewellery affiliate and Fantasyaffiliate,andestimates the numbers of creditors at between 50 and 99. Details on Page 6 Continued on Page 2 Continued on Page 2 Related reports on Pages 10 and 11 Stagnant GST revenue ups concern for the Centre PRESS TRUST OF INDIA New Delhi, February 27 FE BUREAU New Delhi, February 27 BHARTI AIRTEL ON Tuesday said it has partnered Google to bringlow-costAndroidOreo(Go edition) smartphones to India. Google had in December last year unveiled theAndroid Oreo Go edition for smartphones with 1 GB RAM orless. These low-cost phones, whichcomewithanewrangeof apps designed to run faster while using less data, are expected to play an important role in furtherexpanding internet adoption. As part of the collaboration, entry-level 4G smartphones under Airtel’s ‘Mera Pehla Smartphone’ programme will beshippedwithAndroidOreoas standard operating system from March,Airtel said. THE GOODSAND services tax (GST) collections for January fell marginally to `86,318 crore from `86,703 crore in the previous month, belying the government’s expectations that a shrinking of transitional credit claims and an expansion of the base might have taken the revenue to a higher orbit.Analysts felt that lower-than-expected GST revenue for the first month of 2018 might force the government to hasten the introduction of anti-evasion measures such as invoice-matching and reverse charge on transactions with unregistered dealers, besides the e-way bill,which is slated to be rolled out from April.The stagnation in collections might also lead to tighter scrutiny of residual transi- Continued on Page 2 (` crore) 36,887* 54,491 January 2018 Avg monthly revenue for 2018-19 (BE) *`25,560 cr as CGST and `11,327 cr as IGST `1.6 lakh cr Transitional credits claimed so far against CGST tionalcreditsandaslowerpace in refunding the tax to exporters, even though they are expecting a pick-up in refunds towards the end of the financial year. PRASANTA SAHU AND PRABHUDATTA MISHRA New Delhi, February 27 AFTER PUTTING A lid on the runawaypetroleum subsidyby decontrolling petrol and diesel prices and limiting LPG subsidy to the really needy, the Centre has quietly put in place a mechanism to curb its fertiliser subsidy outgo. So far, fertiliser outlets in 31 states/UTs in the country have installed electronic point of sale (ePoS) devices linked to Aadhaar. And, according to preliminary estimates, the subsidy outgo on these farm inputs has reduced by around a third thanks to the new mechanism — flagged as in-kind direct benefit transfer (DBT) — that weeded out Fertiliser sales (Lakh tonne) mostunintendedbeneficiaries (see chart). EPoS facilities make it impossible for retailers to sell subsidised fertilisers without authenticating the deliveries with the Aadhaar-validated thumb impressions of the farmer being captured on the machines with each purchase. Earlier, fertiliser companies used to get the subsidy amountsoncethesoilnutrient reached a district and it was not based on actual sales.Now, the Centre is releasing the subsidy to a company based on sales data after actual sales are recorded through ePoS machines. Infact,ePoS-enabledsaleof fertilisers to farmers had resulted in some savings to the exchequer in 2017-18 itself. Since the coverage of the facility has increased considerably during the last two quarters of the fiscal,the fertilisersubsidy came down from an estimated `70,000 crore (budget estimate) to `6,5000 crore (revised estimate) in 2017-18. Continued on Page 2 Fertiliser subsidy 2016 (Pre-DBT) (` crore) 2017 (Post-DBT) FY09 6.43 99,495 FY16 Airtel taps Google for smartphones Centre's GST revenue Roll-out almost complete; savings from weeding out most unintended beneficiaries Nov 14.3 JANUARY COLLECTIONS A BIG GAP TO BE BRIDGED Subsidy savings seen at ~30% 200 THE VALUE OF fraudulent transactions at Punjab National Bank (PNB) could be getting biggerwith the lender saying the quantum of reported unauthorised transactions could increase by $204.25 million or approximately `1,325 crore. This would take the total value of funds misappropriated, allegedly by the Nirav Modi Group Gitanjali Gems,to close to $2 billion or around `13,000 crore. Modi’s Firestar Diamond files for bankruptcy in US BLOOMBERG Mumbai/Wilmington, Delaware, February 27 PNB says scam may be bigger ‘IN-KIND FERTILISER DBT’ The possibility of significant rate cuts at the GSTCouncil’sMarch10meetinghasalso been dented, given the lack of strong evidence suggesting lower rates will boost compliance to an extent necessary to add incremental pace to revenue growth. According to a government statement,69%ofeligibletaxpayers — nearly 58 lakh — had filed returns for January by February 25, slightly higher than the previous month.This was even as over 1 crore businesses are now registered for GST ( just over 87 lakh taxpayers are required to file the monthly returns). The total collection under central GST and state GST for January stood at `25,560 crore and `33,440 crore, respectively. Continued on Page 2 Dec 53.2 Jan 54.5 2017 72,415 FY17 66,313 FY18RE 65,000 FY19BE 70,080 24.6 39.4 2018 DBT-fertiliser in-kind started in September 2017 with rollout in Delhi; in November, the coverage expanded to 14 states/UTs, to 19 states/ UTs in December and to 25 states/UTs in Jan; so far, 31 states/UTs have got covered; by March-end, the pan-India roll-out will be complete ● UPI INTERFACE As Google partners SBI, it could be the bigger gainer SHRITAMA BOSE Mumbai, February 27 WHILE THE RELATIONSHIP between Google India’s Tez app, which runs on the Unified Payments Interface (UPI), and banks joining the platform is largelysymbiotic,analysts say Google may be the bigger gainer. What the alliance with banks — State Bank of India (SBI) is the latest joinee — does for Google is give it mounds of data on consumer spending patterns. While the internet gianthasmanagedtoaccessthe mobile-savvycustomerthanks to tie-ups with HDFC Bank, ICICIBankandAxisBank,inSBI it has found a way to reach out into the hinterland. For banks,teaming up with Tezhelpsloweroperatingcosts and saves saves them the trouble of maintaining high quality technology infrastructure. Continued on Page 2 ROUND TABLE MEET ‘NPA resolution to help consolidation in steel industry in 2018’ FE BUREAU New Delhi, February 27 STATING THAT INDIA is moving closer to become the world’s second largest steel producer, steel minister ChaudharyBirenderSinghsaid on Tuesday that the target of more than doubling domestic steel-making capacity to 300 million tonnes (mt) by 2030-31, asenvisagedinthe New Steel Policy 2017, could be met smoothly. However, he cautioned that Indian steel companies need to have raw material linkages at affordable prices in order to become globally competitive. “It is important to have some degree of predictabilityin iron ore prices,”he said,adding that a committee set up byhis ministrywasworking on this issue. According to the minister, 2018 is going to be a landmark yearforthe Indian steel indus- try, as consolidation will be helped by non-performing asset (NPA) resolution. “This (consolidation)will lead to better capacity utilisation, synergy improvement and economies of scale,”he said. “Oursteelindustryishighly dependent on coking coal imports. These imports stood at 41 mt in 2016-17, compared with 44 mt in 2015-16. While there was a 6.5% decrease in the volume of imports, the value increased 45% due to the high volatility in the global coking coal prices,” the minister said at a round table organised byFE,in association with the steel ministry. Singh also stressed that efforts were being made to reduce reliance on imported coking coal by producing more steel in the “BF-BOF (blast furnace-basic oxygen furnace) route”. According to him, the ministry is carrying out a technical EXPRESS PHOTO BYANIL SHARMA Steel minister Chaudhary Birender Singh acccepts a likeness of his as mines secretary Arun Kumar (left) and steel secretary Aruna Sharma look on in New Delhi on Tuesday assessment of methanol production and coal gasification processtomakeintegratedsteel plants more lucrative.It has set up a task force to explore the feasibility of producing methanolfromcoalatMozambiqueandIndia,replacementof natural gas by coal-gas in steel plants and carbon dioxide capturing to produce methanol. Indiadrawsitscompetitive- nessinsteelfromthevastavailability of iron ore in the country,henoted.“Wewillneed437 mt of iron ore to grow the steel capacity to 300 mt by 203031,”the minister said. Singh also said that since raw materials like iron ore and coal as also finished steel productsare transportedinbulkvia rail,lowering freight and maximising availability of rakes could play a decisive role in increasing the steel industry’s competitiveness. The steel ministry, he said, has formed a task force with representatives from the ministriesofrailways,urbandevelopment, road transport and highways and shipping to prepare a roadmap on increasing theuseofsteelinvariousinfrastructure sectors. The bulk of infrastructure-relateddemand will come from government projects, he noted. While government-aided and government-initiated projects are on course, private sector investments also need to growfaster. Continued on Page 2
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