OPINION, P8 POLITICS, P16 DEFAMATION CASE EDITORIAL Be careful not to spook bankers, will hit lending Few jobs created as KLEMS database shows— won’t happen till jobsintensive sectors grow INTERNATIONAL, P14 ESCALATING TRADE WAR Jaitley accepts apologies of Kejriwal, 4 other AAP leaders Defying Prez Trump, China’s Xi slaps tariffs on 128 US products MUMBAI, TUESDAY, APRIL 3, 2018 VOLUME XXXXXV NO. 322, 18 PAGES, `7.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD 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: 33,255.36 ▲ 286.68 NIFTY: 10,211.80 ▲ 98.10 NIKKEI 225: 21,388.58 ▼ 65.72 HANG SENG: 30,093.38 ▲ 70.85 `/$: 65.18 ▼ 0.21 `/€: 80.81 ▼ 0.31 BRENT: $68.86 ▼ $1.41 GOLD: `30,443.00 ▼ `187.00 IN THE NEWS Paytm Mall gets `2,900 cr from SoftBank, Alibaba FISCAL DEFICIT PAYTM MALL has raised nearly `2,900 crore from SoftBank and Alibaba.com, a move that will give the online shopping venture of Paytm more financial muscle to take on giants like Flipkart and Amazon, reports PTI. Market watchers say the deal values Paytm Mall at $2 billion. Improved buoyancy and slow refunds take direct tax collections to `10L crore; fiscal deficit lower than RE, tweets DEA secy Core sector growth up 5.3% in February FE BUREAU New Delhi, April 2 FY18 tax mop-up on target ON COURSE 6,00,000 3,00,000 IN WHAT GAVE some credence to the government’s claim that the crackdown on black money through various means including demonetisation has boosted revenue buoyancy, direct tax collections grew17.1% in 2018-19, thefastestpacesince2010-11, while the goods and services tax (GST) collections, though much below targets, appeared to gradually recover from the December trough. Direct tax buoyancy rose sharplyfrom0.7in2015-16to 1.8 in 2017-18, reflecting enhanced efficiency of the tax mop-up exercise and, to an extent,a widening base. The Narendra Modi government has undertaken a series of steps to encourage formalisation of the economy: demonetisation, GST, income disclosure schemes and promotion of digital payments. In the financial year that EIGHT INFRASTRUCTURE sectors grew by 5.3% in February, mainly helped by a robust performance of refinery products, fertiliser and cement segments, reports PTI. The 8 sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — had grown by just 0.6% in February 2017. 10% import duty on smartphone components THE GOVERNMENT on Monday imposed a 10% duty on import of key smartphone components like camera module and printed circuit board assembly, with a view to boost domestic manufacturing, reports PTI. In Budget 2018-19, the government had hiked customs duty on mobiles to 20% from 15%. 6,38,543 9,00,000 14.3 0 2013-14 Y-o-Y rise % 20 17.7 ~10,00,000* Collections (` cr) 12,00,000 Buoyancy 2.0 1.8 1.6 10 1.2 1.1 5 2017-18 15 0.8 FE BUREAU New Delhi, April 2 growthincollectionswaspartly enabledbyasignificantslowing of refunds in 2017-18 comparedwiththepreviousyear:as against1.62lakhcrorein201617, only `1.49 lakh crore was refunded in 2017-18. THE GOVERNMENTON Monday said the reintroduction of the e-way bill system for the goods and services tax (GST) has been smoothwith no technical glitches. On the second day after the roll-out of the mechanismtotrackinter-state cargo movements, 2.89 lakh bills were generated till the afternoon. On Sunday, 2.59 lakh such billswere generated. The government said that nearly 11.2 lakh taxpayers haveregisteredontheportalso far. Additionally, over 20,000 transporters have also signed up.The portal fore-waybill has been designed by National InformaticsCentre(NIC)andit is being run by GST Network – the IT backbone for GST. The system currently generates about 60,000 bills every hour on inter-state movements. FinancesecretaryHasmukh Adhiasaidthesystemwouldbe implemented, as announced earlier, for intra-state movement of goods as well. Continued on Page 2 JSW Steel,Vedanta join the fray for Essar Steel Both Numetal & ArcelorMittal are believed to have taken action to make themselves ‘eligible’ to bid MEN OF STEEL ■ JSW Steel confirms partnering with Numetal for Essar Steel bid ■ Deadline for second round of bids for Essar Steel ended on Monday ■ Numetal, ArcelorMittal National Company Law Tribunal(NCLT)andwerewiththe resolution professional (RP). Data on Essar Steel’s website show financial creditors had claimed `54,857.22 crore, whileclaimsworth`49,212.56 crore were admitted by the NCLTas on February23,2018. Persons familiar with the bidding process explained since it had not submitted an expression of interest (EoI) in October2017,JSWSteelwould be eligible to bid for the stressed steelmaker only if it partneredanothereligiblebidder. Having lost out to Tata Steel in the race for Bhushan Steel, JSW Steel would be keen to get control of Essar Steel, analysts opined. ArcelorMittal is believed to have paid almost `3,000 crore to Uttam Galva to help it settle its dueswith lenders,to ensure itiseligibletoparticipateinthe purchase process for Essar Steel,undertherulesoftheIBC (Insolvency and Bankruptcy Code). It is not clear, however, whether the NCLT will accept ArcelorMittal is eligible. Continued on Page 2 0 0.4 *Likely 2013-14 2017-18 We have broadly met the targets (REs) for direct and indirect taxes and are very much on course to achieve the fiscal deficit target ... No major spending cuts but there may have been natural savings if some departments could not spend (amounts allocated) — HASMUKH ADHIA FINANCE SECRETARY just ended, close to `10 lakh crore (`9.95 lakh crore at last count and at least another `5,000 crore may finally be accounted for) has been collected as direct taxes net of refunds, against the target (revised estimate) of `10.05 lakh crore. Of course, the Close to 11.5 lakh registered for e-way bill SECOND ROUND Special Features Direct Benefit Transfer Smart investing: Six common mistakes investors should avoid and Vedanta submit bids in the second round SHAMIK PAUL Mumbai, April 2 ARCELORMITTAL, A VTB Bank-led Numetal-JSW Steel andVedanta have thrown their hats in the ring for the bankruptEssarSteel,asthedeadline for the second round of bids expired on Monday evening. ArcelorMittal has teamed upwith Nippon Steel & Sumitomo Metal Corporation (NSSMC) in its attempt to get control of Essar Steel. The two will jointly acquire and manage the Indian steel firm. Anil Agarwal-promoted Vedanta, which is likely to get control of the Kolkata-based Electrosteel Steels, having been declared the highest bidder, was a surprise entrant in the fray. The Sajjan Jindal-led JSW Steel, ■ Tata Steel refrained from bidding in the second round ■ Bids not to be opened before NCLT hearing on April 4 ■ NCLTAhmedabad is hearing Numetal and ArcelorMittal's plea against dismissal in the first round which did not bid for Essar Steel in the first round, confirmed it was partnering Numetal Steel. Bankers explained the bids could not be opened before April 4 as directed by the Continued on Page 2 Half of subsidy/dole now via DBT 437 74,707 61,942 38,926 150 35 0 FY15FY16FY17FY18 172.8k 115.2k 100 80 60 40 57.6k 20 0 0k ^including fertiliser subsidy BINANI CEMENT 121.1 120 31.1 35.5 7 dead in Dalit protests 22.6 FY15 FY16 FY17 FY18 A nationwide bandh by Dalits against the alleged dilution of the SC/ST (Prevention of Atrocities) Act turned violent on Monday, with at least 7 killed and scores injured. ■ P16 ^including fertiliser subsidy *Sum total of DBT beneficiaries across chemes TELECOM NCLT ruling may Trai rule on tariff offers could help UltraTech cost telcos `10-12,000 crore ■ NCLT tells bankers to consider out-oftribunal solutions followed a proposal by UltraTech Cement which agreed to buy out the majority stake of 98.47% in the cement manufacturer for `7,266 crore. The Kolkata bench of NCLT had said:“Talk ofsettlement,ifany, is at the liberty of the CoC.The time is granted.”UltraTech had offered a letter of comfort to Binani Industries and said that its offer to buy Binani Cement is subject to the termination of the insolvency proceedings in the NCLT. Continued on Page 2 ■ Trai rules that offers have to be made to all users, not a handful ■ If balance 650 m customers are to pay even `15 less, that’s a `11,700-cr hit per year the number of porting requests canbeusedasaproxy.Around56 million porting requests were Continued on Page 2 NO DIALLING BACK TELCO PAIN Idea Bharti TCOM (` m) Revenues Ebitda 240,000 100,000 180,000 120,000 196,146 219,346 20,000 78,600 67,053 75,000 81,261 61,239 60,000 0 PBT 42,937 41,563 Source: Kotak Institutional Equities 0 50,000 25,000 0 10,000 6,070 9,448 21,199 5,024 -10,000 -20,000 -30,000 10,006 800 578 -3,791 -8,052 -24,664 3QFY18 ■ UltraTech got CCI approval for the deal want to port each month. Telcos rush to match/better offers 4QFY18E ■ Meanwhile, UltraTech announced it had agreed to Binani’s request to take over the cement firm ■ 5-6 m subscribers 2QFY18 the bid for Binani. UltraTech cried foul, approached NCLT THE TELECOM REGULATORY Authorityof India’s (Trai) regulation that telcos can no longer makeanoffertoselectclients— segmented offers, in jargon — but have to extend them to all subscribers could potentially cost the industry `10,00012,000 crore in ayear. Rightnow,whenasubscriber threatens to move to another telco—port,injargon—theoriginal telco offers to match,even better the offer being made. There’s no firm data on how many segmented offers have beenmadebyvarioustelcos,but 1QFY18 ■ Dalmia Bharat won made every month over the last year, though the number went uptoaround10millioninOctober2017toJanuary2018. As per Trai, the offers made to 60-72 million people have to be made to all existing subscribers.Since that won’t apply to RJio — it is in response to RJio’stariffsthatsubscribersare threatening to port, mostly — this means the segmented offers have to be extended to another650 million orso.If the offer results in tariffs falling by even `15 per month, that’s an additionallossof`11,700crore in revenues everyyear. 4QFY17 CASE FILES TRAI-ING TIMES 4QFY18E THE KOLKATA BENCH of the National Company Law Tribunal(NCLT)onMondayreiterated that bankers to Binani Cementshouldconsideranoutof-tribunal settlement in response to a plea from the company’s promoters, within thedeadlineofApril9.Thecommittee of creditors (CoC) had soughtmoretimetoresolvethe issue as it received the NCLT’s orderdated March 27,late. The NCLT’s willingness to permit an out-of-court settlement and allow the lenders to explore fresh solutions — after Dalmia Bharat was declared the highest bidder — is of significance given the IBC (insolvencyand BankruptcyCode) is in its early days. “In the larger interest of all the stakeholders,possibilityof having a harmonious settlement is to be considered...partiesarefreetoconsideritoutof tribunal,”the bench had said in its order dated March 27. Binani Industries, promoters of Binani Cement, had on March 27,offered to payoff all the dues of the financial and operational creditors of Binani Cementwithintwoweeks.This RISHI RANJAN KALA New Delhi, April 2 3QFY18 MITHUN DASGUPTA Kolkata, April 2 2QFY18 FOOD TECHNOLOGY firm Zomato’s founder and CEO Deepinder Goyal on Monday announced that the company has posted 45% jump in gross revenue to $74 million in FY18 from $51 million in FY17, reports fe Bureau in New Delhi. Goyal made the announcement via the company’s official blog — Zomato Blog. The company’s operating burn (loss) dropped 26% to $11 million in FY18 from $15 million in FY17. PAGE 6 450 140 1QFY18 Food tech firm Zomato posts 45% growth in FY18 revenue 1,88,993 PMAYG 4QFY17 THE RESERVE Bank of India (RBI) on Monday allowed banks the option to spread provisioning for mark-to-market (MTM) losses made in the third and fourth quarters on investments held in the available-for-sale (AFS) and held-for-trading (HFT) category equally over four quarters, keeping in view the systemic impact of the sharp rise in G-sec yields, reports fe Bureau in Mumbai. PAGE 10 230.4k 600 NSAP 4QFY18E RBI lets banks spread Q3, Q4 bond losses over 4 quarters No of schemes (lhs) PAHAL MGNREGS Scholarship Schemes PDS Others^ 3QFY18 UNIFIED PAYMENTS Interface (UPI) closed FY18 with transaction volumes a tad shy of the 1-billion mark at 913.5 million, showed data released by the National Payments Corporation of India (NPCI), reports fe Bureau in Mumbai. The value of transactions did cross the `1 lakh-crore mark, settling at `1.09 lakh crore for the full year. The volume of UPI transactions rose about 4% month-on-month (m-o-m) to 178.05 million in March. PAGE 10 PMAYG Others^ Beneficiaries No. of beneficiaries* (in cr) 2QFY18 UPI volumes tad shy of 1-bn mark in FY18; value crosses `1L cr PDS NSAP 1QFY18 QuickPicks PAHAL MGNREGS Scholarship Schemes 300 Martech: The key to the future for bold brands Bold brands are finding creative ways to use technologies such as AR, AI, geofencing and NFC. We put together examples where smart international brands have used martech innovatively Fund transfer (` cr, rhs) 4QFY17 Instead of making guesses about upswings and bad turns, it is a good idea to smooth out volatility by investing in equities regularly, irrespective of the market movement ■ Personal Finance, P13 The Centre's FY18 direct benefit transfers (cash and in-kind schemes) rose an impressive 2.5 times to `1.89 lakh crore, with nearly half of its annual spending on subsidies and other doles. DBT-enabled savings were `25,957 crore in April-Jan FY18 BY PRASANTA SAHU ● SOLAR PROJECT SoftBank, GCL tie up for $930-m India JV REUTERS Beijing, April 2 SOFTBANK HAS AGREED tolauncha$930-millionIndian joint solar energy venture with Chinese company GCL System Integration Technology as part of its ambitious solar investment road map forIndia. The venture will work on photovoltaic technology, which is used in solar panels. GCL will provide technology and SoftBank will assist in obtaining land and regulatory approvals, GCL said in a filing to the Shenzhen stock exchange dated Friday. SoftBank said in 2015 that it would invest up to $20 billion along with Foxconn Technology and Bharti Enterprises in solarprojects in India,which has a goal of generating 100 gigawatts (GW) of power from solar by 2022. SoftBank and GCL’s new venture will eventually have a capacity of 4GW and will be implemented in two 2GW phases.The Japanese company will hold 60% of the venture’s shares and GCLwill own 40%. Continued on Page 2
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