OPINION, P6 ECONOMY, P2 SUNIL JAIN CIL, mining will be badly hit if Modi doesn’t intervene INTERNATIONAL, P4 TS VISHWANATH EXPORTERS’ WOES DATA MISUSE India has to come up with a scheme that helps exporters and is WTO-compliant Prabhu says e-wallet will address GST refunds issue Facebook faces new calls for regulation, investigation NEW DELHI, MONDAY, MARCH 19, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 14, 18 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 FY18 REVIEW IN THE NEWS MNP revamp: Trai discussion paper by month-end States not to revert to fiscal deficit below 3% NETWORK PORT-OUT is set to become faster and simpler, as Trai is planning to initiate a review of the mobile number portability regime, reports PTI. By month-end, Trai will issue a consultation paper that will look at reducing the time taken to switch from one network to another, and will also seek to simplify the entire process. Subdued revenue growth, lack of requisite control on less productive spending upset ambitious consolidation plan Global trade issue to be taken up at WTO meet today PRASANTA SAHU New Delhi, March 18 THE GOVERNMENT SAID 50 nations will engage in talks on global trade this week to explore the options for resolving various issues and re-invigorating the WTO, reports PTI. Representatives will gather in New Delhi on March 19-20 for an informal WTO ministerial meeting. WITH THE UDAY burden off, state governments in aggregatewere expected to revert to well below 3% fiscal deficit in the current financial year, but an analysis by FE of 14 state budgets presented recently suggeststheymightnot.Asthe yearisdrawingtoaclose,seven Of 14 states which presented budgets recently, 7.5 States which slipped the most (Fiscal deficit as % of GDP) Budget estimate Revised estimate 7reported 3 fiscal slippage 2.8 for FY18 Bihar 3.5 2.9 3.5 2.9 1.9 WB ■ 9 states have reduced capex from the budgeted level in 2017-18; the sharpest cuts by Tamil Nadu (20.5%), Telangana (18%) and Madhya Pradesh (16%) of these states have revised their FY18 fiscal deficits to be higher than projected a year ago,with the slippage ranging AP Rajasthan ■ Salary, pension and interest expenditure accounted for over 56% of revenue expenditure for both Uttar Pradesh and Maharashtra in 2017-18 from a marginal 0.1 to profligate 4.63 percentage points. Unless the other states in aggregatedoremarkablybetter COFFEE CHAINS Special Features SmartGaon app helps Bharat inch closer to India An app called SmartGaon has transformed a small hamlet in Uttar Pradesh to a tech-savvy village that boasts of a Wi-Fi zone, CCTV cameras and online listing of farm produce. ■ EFE, P8 Why the 10% LTCG tax isn’t that big a blow The longer the holding period, on a CAGR basis, the impact of long term capital gains tax on your equity returns comes down, due to the compounding effect ■ Personal Finance, P9 SHUTTING DOWN LOSSMAKING stores has helped leading coffee chains like Barista,Costa Coffee,Tata Starbucks and Cafe Coffee Day improveprofitability,andinthe case of a few,turn the corner. Boutonniere Hospitality, which operates coffee chain Barista, reported a profit of `0.63 crore in FY17 aided by a tax credit in the year (loss of `36 lakh before tax credit), compared to a loss of `3.45 crore in FY16. The revenue of the company grew 491% to `71.60 crore in the fiscal. The company presently operates 45 stores, after having closed down more that twice that Continued on Page 2 ● IN THE NEWS Closure of loss-making stores boosts profit JHARNA MAZUMDAR Mumbai, March 18 than assumed — there are slim chances of this —, the combined fiscal deficit of states in FY18 could turn out to be substantially higher than the estimated 2.69% of the gross domesticproduct,andpossibly, cross the 3% threshold, prescribed under the respective Fiscal Responsibility and Budget Management (FRBM) Acts andthe14thFinanceCommission,bya good margin. Worse, the slippage is despite nine of the 14 states reducingtheircapitalexpenditure from the budgeted level. Among the states reviewed, theonessettomisstheirdeficit targets for the current fiscal by the widest margins are Bihar andWest Bengal (see chart). Cafe Coffee Day shut 30 stores and opened 100 stores in the last one year, 1,704 outlets operational at present IOC, BPCL may buy 26% stake each in GAIL PRESS TRUST OF INDIA New Delhi, March 18 number, most of them company-owned. STATE-OWNED INDIAN Oil (IOC) and Bharat Petroleum (BPCL) may buy 26% stake each in gas utility GAIL India, paying the government over `20,000 crore each to become integrated energy firms. Following finance minister Arun Jaitley’s February 2017 Budget announcement of creating integrated oil majors, IOC and BPCL had submitted separate proposals to buy the government’s 54.89% stake in India’s biggest gas marketing and transportation firm, GAIL. Continued on Page 2 Details on Page 5 Costa Coffee currently has 46 stores operational, shut 50 stores in the last one year Barista shut 100 stores in the last one year, curently 45 stores operational, plans to add 500 franchisee stores in next five years Starbucks currently operates 106 stores, shut 2 stores in 2016 Revving it up Women dressed in traditional clothes take part in a procession celebrating ‘Gudi Padwa' or the Maharashtrian New Year in Mumbai on Sunday POWER PLANTS IN CRISIS SBI: Let Gujarat supply coal to troubled state’s units Lead lender for Mundra units of Tata and Adani, and Essar’s Salaya plant also suggests tariff hike with discom’s consent ANUPAM CHATTERJEE New Delhi, March 18 STATE BANK OFIndia(SBI)has comeoutwithasetofworkable solutions to salvage three imported fuel-based power plantsinGujarat—theMundra units of Tatas and Adani and EssarPower’sSalayaunit—that areintroubleaftertheSupreme Court struck down regulator- Outstanding debt^ (` crore) PLF (%) 28,753* 15,000* Tata Power 6,500 Essar Power Feb Feb 2017 2018 Adani Power Adani Power 86 22 Essar Power 59 0 *June 2017 ^Of Mundra and Salaya units granted compensatory tariffs. At a recent brainstorming session in Ahmedabad, SBI, the lead lender for all three units, has proposed the state government buy imported coal and supply to the plants while only paying the generators the fixed cost — 40% of the tariff.While the state government requested for some time to assess the suggestion and its potential impact on the state’s finances, the viability of “tariff correction” under a bilateral agreement between the generators and state-run discom GUVNL, the committed longterm buyer of electricity from these plants, is also being explored, sources privy to the mattertold FE. Continued on Page 2
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