OPINION, P8 COMPANIES, P6 EXIT ROUTE EDITORIAL Fine-tune IBC process, given the complaints against it MP junking its MSPdeficiency scheme should be a lesson for the Centre INTERNATIONAL, P16 $13-BILLION DEAL RIL sells Texas shale assets for $100 million to Sundance Energy Emma Walmsley-led GSK buys Novartis out of their JV MUMBAI, WEDNESDAY, MARCH 28, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 317, 42 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 33,174.39 ▲ 107.98 NIFTY: 10,184.15 ▲ 53.50 NIKKEI 225: 21,317.32 ▲ 551.22 HANG SENG: 30,790.83 ▲ 242.06 `/$: 64.97 ▼ 0.11 `/€: 80.50 < > 0.00 BRENT: $70.83 ▲ $0.71 GOLD: `30,718.00 ▼ `38.00 — CLEANING UP THE SYSTEM Bank privatisation not feasible: Debroy IN THE NEWS India, China to renegotiate investment pact BANIKINKAR PATTANAYAK New Delhi, March 27 INDIAAND China have agreed to renegotiate a bilateral investment agreement, apart from working on a roadmap to reduce the massive trade imbalance in favour of the world’s second-largest economy as the two countries pledged to bolster relations amid threats of a looming global trade war, official sources told FE. China has also pledged to look into the issue of greater market access to Indian farm products and agreed to resolve issues that hurt the prospect of Indian pharmaceutical exports at a meeting between commerce and industry minister Suresh Prabhu and China’s trade minister Zhong Shan on Monday. The meeting under the China-India Joint Group on Economic Relations, Trade, Science & Technology came amid an escalating threat of a global trade war. Detailed report on Page 2 THE WINNERS’ CIRCLE: The awardees of the second edition of the FE CFO Awards at the function in Mumbai on Tuesday FE BUREAU Mumbai, March 27 GOVERNANCE ISSUES HAD been evident in public sector banks and the banking sector needed to be cleaned up in more ways than one, Bibek Debroy, chairman, economic advisory council to the Prime Minister, said on Tuesday at the FE CFO awards. Providing greater clarity on the government’s thinking on the banking sector against the backdrop of the scam at Punjab National Bank,Debroy said,“The banking sector needs to be cleaned up in more ways than one,” adding that while governance issues were evident in public sector banks, it was not that “the private sector banks has covered itself in glory”. However, he clearly stated that rationalisation of public sector banks is required and that the recapitalisation of banks was linked to their restructuring, the details of which would be revealed in due course. Debroy said that while making suggestions about privatisation of public sector banks experts failed to recognise the realitythat until these PRICE SUPPORT FOR FARMERS Special Feature Buying life insurance? First understand the fine print You must take time to understand the terms and conditions of insurance plans, the sum assured and mode of payment and only then sign the proposal form ■ Personal Finance, P15 QuickPicks Bonds surge most since 2013 after govt cuts spending TRADERS IN the embattled Indian sovereign bond market finally have something to cheer, reports Bloomberg. The government announced it would auction just 48% of its planned annual bond sales in the first six months of the financial year starting April 1. That’s less than the 60-65% it typically raised in previous years. The size of the annual debt sale was also cut by `50,000 crore. The yield on the benchmark debt fell 29 basis points, the biggest slide since November 2013, to 7.33% Tuesday. PAGE 10 Bandhan Bank shares make stellar debut, up over 27% SHARES OF Bandhan Bank made a stellar debut on the bourses on Tuesday and ended over 27% higher against its issue price of `375, reports PTI. The stock listed at `485, a sharp gain of 29.33% over the issue price on the BSE. Intra-day, it jumped 32.90% to `498.40. It finally ended at `477.20, up 27.25%. On the NSE, shares of the company zoomed 27.16% to settle at `476.85. In terms of equity volume, 139.07 lakh shares of the company were traded on BSE during the day. PAGE 11 Karnataka goes to polls on May 12, counting on May 15 THE ELECTION Commission on Tuesday announced that the Karnataka assembly elections will be held on May 12, beginning the countdown to the crucial electoral battle that will decide whether the BJP's juggernaut will breach the last major Congress fortress, reports PTI. The votes — which will determine whether chief minister Siddaramaiah will beat back the saffron tide in Karnataka — will be counted on May 15, chief election commissioner OP Rawat said. EXPRESS PHOTOS: PRASHANT NADKAR entities are restructured the price the government will get would be far from attractive. He also pointed to the central bank and the finance ministry working towards finding betterways to regulate banks. Clockwise from top: Lifetime achievement winner Bharat Doshi, CFO of the year Seshagiri Rao and Newsmaker of the Year Anshula Kant with Hiranandani Group founder-chairman Niranjan Hiranandani and chief guest Bibek Debroy In an interactive session, Debroy also spoke on other aspects including the government’s ambitious national healthscheme.Hesaidthatthe scheme needs to be portable across all states and that the fiscal cost for the base scheme will come from the central government, while state governments will be free to supplement them with plans of their own. He pointed out that the scheme, the largest of its kind in theworld,will provide cashlessbenefitsforprescribeddis- eases to a specified beneficiary segment. States will be free to adddiseasesorincreaseapplicability to a wider base. On the budgetary allocation, Debroy clarified that it was not cast in stone,though a roll-out was not expected across all states at one go. He also offered some perspective on government’s thinking on issues like minimum support price-linked benefit,jobgrowthandprotectionism.The last,hewas hopefulwould not escalate and better sense would prevail. SETTLEMENT OUTSIDE TRIBUNAL Even with caps, package NCLT asks CoC to consider to cost up to `1.1 lakh cr Binani Industries plea PRABHUDATTA MISHRA New Delhi, March 27 AN OFFICIAL ESTIMATE on the cost to the exchequer of implementing 150%-of-cost minimum support prices (MSPs) and price-deficiency support schemes promised to farmers in the recent Budget has confirmed fears that it would be prohibitively large. Even afterlimiting the bounty to 40% of the marketable surplus of crops (roughly a third of production) and imposing a cap of 25% on the “price loss” to be borne by the government — a NITI Aayog paper reviewed by FE has recommended these ceilings,in a major dilution of the Budget announcement — the Centre and states,between them,will have to shell out a whopping `1,11,000 crore if all crops, including rice and wheat, are covered under a “market assurance scheme (MAS)”. If rice and wheat are excluded, and assuming only some states will adopt MAS (which involves procurement and remitting MSP into farmers'bank accounts),and others choose a price-deficiency payment scheme or PDPS (under which farmers are paid the difference between MSP and sale price at mandis sans procurement),the financial burden on the exchequer could be lower, but still a considerable `45,000 crore, according to NITI Aayog. A third scheme where the private sectorwill be encouragedtoprocurecropsat MSP with assorted incentives — states will be nudged to adopt this scheme through a financial aid — would help reduce the cost to the exchequer by two-thirds, the think tank said. The financial sup- FE BUREAU Kolkata, March 27 MSP SCHEMES ON THE CARDS Only 40% of marketable surplus qualifies ■ Price loss compensation capped at 25% ■ Centre States 1,11,318 (` crore) 75,140 97,403 61,225 13,915 13,915 Marker Assurance Scheme* Price Deficiency Payment Scheme# (*If all 23 MSP crops including rice and wheat are covered and “price loss” (MSP-farm harvest price differential) of 25% is compensated; Centre to bear admn cost of 15%, 100% of price-loss cost up to 15% and 50% of such cost between 15-25%, States only half of the priceloss cost of 15-25%; #Centre to bear admn expenses of 2%, full price-loss cost up to 15%, and half that cost between 15-25%, states to meet half of price-loss cost between 15-25%) port for states under the schemes should be linked to agriculture marketing reforms,it added. Meanwhile, after marathon discussions over two consecutive days,a group of six ministers headed by home minister Rajnath Singh on Tuesday approved all three price-support schemes for agricultural crops formulated by NITIAayog.The move is in sync with a Budget announcement and the Narendra Modi government’s stated objective to double farmers’ incomes. A subgroup of three of the minis- Cost to the exchequer to be ~`45,000 crore if rice and wheat are excluded and some states adopt MAS and others PDPS 15% Likely rise in farm-level prices due to the package 24% Likely rise in farmers' income ters — Singh,transport minister Nitin Gadkari and agriculture minister Radha Mohan Singh — would fine-tune the schemes’ parameters on Wednesday and the proposals would be taken to the fuller Cabinet as early as next week, official sources told FE. A key question that is to be addressed, sources said, was whether the 25% price loss ceiling proposed should be enhanced.Recently,the prices of some key pulses plunged more than a quarter below the MSP in some key markets. Continued on Page 2 THE KOLKATA BENCH of the National Company Law Tribunal(NCLT)onTuesdayasked the committee of creditors (CoC)whetheritcouldconsider the application filed by Binani Industries, the parent firm of Binani Cement, for a settlement outside the tribunal. While fixing the next hearing on April 2, the NCLT judge said that in the larger interest of the creditors, the CoC could give it consideration. The counsel appearing on behalfofBinaniIndustriestold the bench that the company had now found the means to payits creditors,mostlybanks, within twoweeks.Objecting to this, counsel appearing on behalf of Dalmia Bharat said Binani Industries was a third party, and not associated with the resolution process. The CoC counsel asked whether the ongoing resolution process once admitted couldbehalted,andifthesame canbeallowedundertheInsolvency and Bankruptcy Code. Continued on Page 2 NCLT adjourns hearing of pleas on Essar Steel bids: P3 GST REVENUE STAGNANT February collections drop to `85,175 cr FE BUREAU New Delhi, March 27 GOODS AND SERVICES tax (GST) collections for February fell to `85,174 crore from `86,318 crore a month earlier, heightening the government’s anxiety over revenue being far below projections.The average monthlycentralGST(CGST)collections in July-February has been just `23,177 crore while the Centre’s monthly GST revenue forFY19 is budgeted to be more than double that at `50,325 crore. Of course, integrated GST (IGST), roughly half of which has to go to the Centre’s kitty eventually, would give it another `10,100 crore a month, going by the trend so far.Buteventhatwouldtakethe Centre’s average monthly GST revenue so far to only `33,300 `23,177 cr Average monthly CGST collection in July-February WHO STANDS WHERE ■ Binani: Wants termina- tion of insolvency as it has found means to pay creditors ■ Dalmia: Says Binani has no locus standi to seek termination ■ NCLT: With 98% stake Binani does have locus standi; CoC could consider termination in larger interest of creditors ● WELFARE SCHEMES No Aadhaar deadline extension: SC PRESS TRUST OF INDIA New Delhi, March 27 crore, two-thirds of the budget estimate fornextyear. THE SUPREME COURT on Tuesday refused to pass an interim order extending the deadline of March 31 for linkingofAadhaarwiththewelfare schemes where benefits are transferredtocitizensfromthe Consolidated Fund of India. ThetopcourthadonMarch 13 extended indefinitely the March 31 deadline for linking bank accounts and mobile phone numberswithAadhaar. However,it had allowed the government and its agencies to link the 12-digit national biometricidentifiernumberof the beneficiariesfortransferof benefits of schemes funded from this fund. Continued on Page 2 Continued on Page 2 `33,300 cr Estimated monthly GST revenue to Centre so far, including its share of IGST `50,325 cr Monthly GST revenue for Centre for FY 19 (BE) 52% Growth required to meet Budget target
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.