OPINION, P6 ECONOMY, P3 PNB FRAUD Can’t resolve power NPAs without fixing the causes for this Commercial courts, arbitration laws a good start, but need to ensure they work BEIJING DIARIES Patel-led RBI initiates special audit of PSBs with focus on trade finance EDITORIAL INTERNATIONAL, P4 Xi Jinping to rule China for life as lawmakers repeal 2-term limit LUCKNOW, MONDAY, MARCH 12, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XI NO. 164, 16 PAGES, `5.00 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 STATES COMPRESS CAPEX April-Jan spend just half of yearly target IN THE NEWS PMO calls meet over exporters' GST refunds THE PRIME MINISTER'S Office has called a meeting of top officials of commerce and finance ministries on Monday over GST refunds delay, reports PTI. Exporters claim that 70% of their refunds are still stuck even after eight months of rollout of the new tax regime. The meeting would also assess the impact of delay. ISRO looking at Chandrayaan-2 launch by April THE ISRO ON Sunday said it is aiming for an April launch of the Chandrayaan-2 satellite to the moon, this time it plans to send a rover to explore the lunar surface, reports PTI. If the April launch is not possible, then the ISRO will aim for a launch by October. UP spent just 37% of its annual capex budget in first 10 months of FY18, Maharashtra at 38% and Punjab at 23% `4.13 lakh cr Capex target of 19 states studied by FE Achievement by the 19 states Maharashtra Uttar Pradesh Punjab PRASANTA SAHU New Delhi, March 11 WHILE THE CENTRE has put brakes on capital expenditure in the later months of FY18 to avoid a big fiscal slippage, the states have compressed capex even more aggressively to finance their rising revenue expendituresandcurbborrowings.Data reviewed byFE of 19 states show that their aggregatecapexinApril-Januarythis fiscalwas`2.12lakhcrore,half their full-year target of `4.13 lakhcrore,andevenlowerthan `2.18 lakh crore was achieved in the year-ago period. In case of some states, the deceleration of capex was unprecedentedly steep: Uttar Pradesh,forinstance,spentjust 37%ofitsannualcapexbudget inthefirst10monthsofthisfiscal, while Maharashtra’s achievement was 38% and Punjab’sjust23%.Infact,capex by Punjab in April-January was 51% (Apr-Jan, FY18) 23% 37% 38% FY18 capex budget by all states (` lakh cr) 4.7 Punjab UP States with sharpest y-o-y fall in capex (Apr-Jan, FY18) 59% 62% Source: CAG a huge 62% lower than a year ago, and UP’s spending was down by52%y-o-y. As reported by FE earlier, what propped up public capex during the year despite such niggardliness by states is a jump in investments by central PSUs.The national income data released lately showed growth in gross fixed capital formation picking up from 1.6% in Q1FY18 to 6.9% in Q2 and an impressive 12% in Q3,thanks to CPSEs and some private firms. Coaxed by the promoter, these PSUs and otherdepartmental undertakings like NHAI with annual capex plans of `500 crore and above have invested `1.93 lakh crore in April-December this year, 60% of the annual target forthese firms.While all CPSEs — including those below the `500-crore capex threshold — rolled out capital investments of `3.4 lakh crore in 2016-17,the figure jumped 18% to a little over `4 lakh crore in 2017-18 (revised estimate), under the Centre’s prodding and a similar amount is budgeted for next fiscal as well. (Of course, the budget shows 2017-18 PSU capex to be `4.76 lakh crore, with the inclusion of Food Corporation of India’s procurement spending, but this is barely of capex variety). Among states, the achievement of some other states namely Rajasthan, Himachal Pradesh,BiharandChhattisgarh during April-January were also muchbelow50%oftherespective full-yearcapex targets. Continued on Page 2 AIR INDIA DISINVESTMENT Special Features We have put our best innovations in Galaxy S9/S9+ Samsung Electronics Corporate VP Asim Warsi says the high-end smartphone market is the most exciting segment and the fountainhead of innovation. ■ eFE, P8 Investing in volatile markets? Look at stock SIPs Stock systematic investment plans can help an investor avoid timing the market, accumulate stocks over a longer term and iron out price volatility ■ Personal Finance, P9 QuickPick IMF: India seems to be recovering from note ban, GST disruptions THE INDIAN ECONOMY now seems to be on its way to recovering from disruptions caused by demonetisation and roll-out of GST, the IMF said on Sunday, reports PTI. “India's economy has expanded strongly in recent years, thanks to macroeconomic policies that emphasise stability and efforts to tackle supplyside bottlenecks and structural reforms. Disruptions from demonetisation and the rollout of the GST did slow growth," Tao Zhang, deputy managing director of IMF, said. PAGE 2 Consortium of Jet, Air France-KLM & Delta keen to bid PRESS TRUST OF INDIA New Delhi, March 11 A CONSORTIUM OF Jet Airways,AirFrance-KLMandDelta Air Lines is understood to have expressed interest in the disinvestmentofnationalcarrierAir India,according to sources. Moving ahead with the strategic disinvestment of loss-makingAirIndia,the government is expected to soon invite expressions of interest (EoI) from the bidders. Against this backdrop, sources said a consortium of threefullservices,includingJet Airways,arekeentoputintheir bid forthe national carrier. Jet Airways along with Air France-KLMandDeltaAirLines areinterestedinparticipatingin AirIndiadisinvestment,sources said.When contacted,a Jet Airways spokesperson said the airlinewould not like to comment onspeculations.Queriessentto Air France-KLM and Delta also went unanswered. JetAirways’possible bid for Air India by way of a consortium also comes less than four months after the airline enhanced cooperation agreementwith theAirFrance-KLM `50,000 cr is the debt burden of the ailing national carrier `30,231 cr the amount Air India will get up to 2021 under the govt’s turnaround plan, subject to riders `26,545 cr the sum infused by the govt into the carrier so far Group. Interestingly, Jet Airways CEO Vinay Dube had a decade-long careerat DeltaAir Lines before joining the Indian carrier last year. Immediately beforecomingtoJetAirways,he was seniorvice-president (Asia Pacific)attheAmericanairline. Air France-KLM and its partners Delta and Alitalia operate the largest TransAtlantic joint-venture with over 270 daily flights. ThoughAirIndia is saddled with huge debt, acquiring the airline can help boost the acquirer in terms of foot print and bilateral rights. AD REVENUES Now OTT players gain in subscriptions too ANUSHREE BHATTACHARYYA New Delhi, March 11 WHILE ADVERTISERS WERE always expected to move to digital channels what’s surprising is that subscriptions too are coming in. While, in 2016, they accounted for less than 3% of advertising revenues, at `2,000 crore, they would be about a tenth of advertising revenues by 2020. While Hotstar costs `199 per month, Amazon’s Prime Video is even cheaperat `999 annually.AltBalajiisavailable at `60 per month while Zee5 comes for `150 a (in billion) 203.6 89.2 114.9 20.1 145.5 2.6 2016 2017 2018E 2020E Advertising Source: FICCI EY 2018 report 3.9 5.7 2016 2017 2018E 2020E Subscription month. Netflix is the most expensive at `650 per month. Several over the top (OTT) platforms come free; for instance, VOOT from the Viacom18 stable. Some like SonyLiv charge onlyfora part of the content. With OTT players teaming up with telcos,consumers may get better deals. For instance, a post-paid Airtel consumer, on the `499 per month plan, has access to Amazon Prime for a year. Vivek Couto, ED, Media PartnersAsia,saidthebundling of content and mobile phone gives the consumer an easier payment option. Continued on Page 2 PRICE SUPPORT TO FARMERS ● SOLAR PROJECTS States roll out schemes even as Centre has a pan-India plan PRABHU DATTA MISHRA New Delhi, March 11 AT LEAST FIVE state governmentsarerollingoutinnovative schemes to help farmers realise remunerative returns, even as the Centre has started working onaplantoensurethatfarmers getminimumsupportpricesfor their produce, whether or not the items are procured by the designated agencies. The states have estimated the expenditures on these schemestobemuchlowerthan what such largesse, if implementedinearnest,couldpoten- Madhya Pradesh Bhavantar Bhugtan Yojana `1,525 cr already disbursed to 10.5 lakh farmers Crops: Pulses, oilseeds Haryana Bhavantar Bharpai Yojana Over 5,000 farmers registered Crops: Onion, potato, tomato and cauliflower tially cost. FE had estimated, assuming a 20% differential between the market price and MSP and the crop quantities that could potentially need suchsupport,thatifthecurrent Telangana Input Assistance scheme Cost seen at `8,500 cr annually, to benefit 70 lakh farmers; Direct transfer of `8,000/acre annually to land owning farmers Karnataka Raita Belaku Direct transfer of `5,000-10,000/hectare to farmers in rainfed areas MSPs are to be ensured for all the relevant crops, the cost to the exchequer could be around `80,000 crore. Continued on Page 2 GST SUMIT JHA Has tax net widened? GST has increased the relevant tax net by more than a half* going by the number of businesses registered. However, since a quarter of the GST registrants doesn't file returns or pay tax and 40% of the filers claim nil tax liability, the tax net may not have been cast as wide as expected Among the GST registrants, share of firms below `1.5 cr turnover in revenue mopped up is just 1.03 crore ` Taxpayers are now registered on GSTN portal Including 64.4 lakh Migrated from the earlier regime (excise/ service tax and state VAT) 39.6 lakh New registrants 16.4 lakh But.. 20-25 lakh Registered assesses fail to file returns 40% of total returns Under composition- filed show nil tax liability scheme 5.5% And firms with annual turnover `5-100 cr have a share in revenue of 11% Top 5 states/UTs in terms of returns-filing (% of registrants) 83 77 75 Punjab Chandigarh Gujarat 75 75 UP Haryana *Actual increase could be higher given that earlier a section of the firms may have registered for both excise and state VAT Centre calls for less-risky funds, outlines 10-point plan FE BUREAU New Delhi, March 11 THE NDA GOVERNMENT on Sunday called for concessional financing and less-risky funds for solar projects to raise the share of solar power in the energybasket,providecheaper electricityandcutcarbonemissions to fight climate change. With French President Emmanuel Macron by his side at the founding conference of the India-initiated International Solar Alliance (ISA), PrimeMinisterNarendraModi presented a 10-point action plan to promote the use of solar energy available to all nations, which included raising the share of electricitygenerated from photovoltaic cells in the energy mix, framing of regulations and standards and consultancysupport forbankable solar projects. Speakingattheplenarysession of the conference in the presence 23 heads of nations and 10 ministerial representatives gathered in New Delhi, Modisaidthereshouldbeafull ecosystem for availability and development of technology, economic resources, and development of storage technology, mass manufacturing and innovation. Continued on Page 2
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