OPINION, P8 COMPANIES, P6 NOT IN RACE FOR AIR INDIA RBI signals no rate hikes, scope for a cut later in the year Fake news spreads faster online but a regulator is not the solution for the malaise US-CHINA TRADE TENSION IndiGo’s Ghosh says we don’t have capability to turn around carrier EDITORIAL INTERNATIONAL, P14 Trump adviser Kudlow says negotiations 'could have great ending' NEW DELHI, FRIDAY, APRIL 6, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 30, 20 PAGES, `6.00 (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: 33,596.80 ▲ 577.73 NIFTY: 10,325.15 ▲ 196.75 NIKKEI 225: 21,645.42 ▲ 325.87 HANG SENG: 29,518.69 ▼ 661.41 `/$: 64.96 ▲ 0.19 `/€: 79.67 ▲ 0.38 BRENT: $68.90 ▲ $0.88 GOLD: `30,491.00 ▼ `353.00 NEUTRAL STANCE RBI hints at end to rate tightening IN THE NEWS Migrating HNIs a ‘substantial’ tax risk, says CBDT FE BUREAU New Delhi, April 5 AFTER A RECENT global survey, quoted by Morgan Stanley's Ruchir Sharma at an event here, said as many as 23,000 high net worth individuals (HNIs) have left India since 2014 including 7,000 in 2017 alone (the highest numbers for any country), the government has commenced a process to evaluate the “substantial task risk” such migrations pose and formulate a policy response. According to an office order issued by the Central Board of Direct Taxes (CBDT) on Tuesday, “for examining the taxation aspects of such (HNIs), a (five-member) Working Group has been constituted”. The committee will hold its first meeting here on Friday. Being non-resident has major tax benefits as India, like most other countries (with the notable exception of the US), follows a residence-based tax system. Continued on Page 2 Holds policy rate, lowers inflation projections; banks say loans not to get cheaper right away; no cut seen till Aug SHAYAN GHOSH Mumbai, April 5 THE RESERVE BANK of India’s (RBI) lower inflation projections for 2018-19, announced on Thursday,suggest an end to the rate-tightening cycle.However,bankers have ruled out anycuts in loan rates immediately, wary of a possible shortage of liquidity as also the need to keep interest rates on deposits at attractive levels so as not to lose out on savings. PK Gupta, MD, State Bank of India (SBI), told a business news channel that even while theRBIwasraisingrates,banks had not really tinkered with their rates because there was enough liquidity available in the market.“I think liquidity did tighten up a little bit and so some banks started raising rates, forcing other banks to raise rates as well. Liquidity is going to remain comfortable and for the first six months I don’t see the rates moving eitherway,”Gupta said. A senior private sector banker told FE, “While loan rates are unlikely to be hiked if liquidity is abundant, we are not in a position to trim them STAR BAGS MEDIA, BRAGGING RIGHTS Star India once again outbid Sony and Reliance Jio by bagging the media rights of the Indian cricket team's bilateral home series and domestic cricket for the next five years, till 2023 Star India's winning bid `6,138.1 cr 2012 winning bid `3,851 cr Star India Day 1 April 3 Closing bid `4,442 cr Day 2 April 4 Closing bid `6,032.5 cr Other players who were in the fray: Sony Pictures and Reliance QuickPicks Services PMI back on growth track INDIAN SERVICES sector activity returned to its growth track in March, driven by greater inflows of new work, following which firms increased their staffing levels at the fastest pace in 7 years, reports PTI. The seasonally adjusted Nikkei India Services Business Activity Index improved from 47.8 in February to 50.3 in March, indicating that business activity stabilised during the month. PAGE 3 ‘Delayed sops behind UDAY lapses’ STATE-RUN POWER distribution companies have attributed their failure to meet the performance targets set under the UDAY scheme to delays in disbursal of subsidies by the state governments, reports Anupam Chatterjee in New Delhi. Discom representatives pointed out that delayed receipts reflect adversely on AT&C figures because it deflates the revenue against the units of electricity sold. PAGE 3 10-year bond yield (%) Sensex 7.4 33,800 Prev. close: 7.294 7.295 7.3 7.127 7.2 Rajiv Kochhar stopped at Mumbai airport by CBI Prev. close: 33,019.07 33,596.8 33,289.96 33,400 Intra-day Apr 5 7.1 7.0 33,600 ● ABORTED FLIGHT? Open Prev. close: 24,129.5 25,000 24,750 33,200 Close Bank Nifty 24,759.8 24,394.45 24,500 24,250 24,000 Intra-day Apr 5 Open Intra-day Apr 5 Close 33,000 Open Close CPI inflation RBI forecast and actual (%) 10 9 8 7 6 5 4 3 2 1 3 month ahead forecast Actual Mar-14 Jun-17 Sources: Economic Survey Vol. II BOND BOND RASHMI RAJPUT & DEEPTIMAN TIWARY Mumbai, April 5 THE CENTRAL BUREAU of Investigation (CBI) on Thursday stopped Rajiv Kochhar, brother-in-law of ICICI Bank MD and CEO Chanda Kochhar, at the Chhatrapati Shivaji Maharaj International Airport (CSIA) in Mumbai while he was about to board a flight to Singapore. Kochharwas then brought to the agency’s headquarters at the Bandra Kurla Complex in Mumbai and examined until late evening. Sources said that he is likely to be called on Friday to join the investigation. Kochhar along with his brother Deepak are being probed by the central agency in `3,250-crore bank loan granted by ICICI Bank to the Videocon Group in 2012.The agency is probing the allegation of an alleged ‘quid pro quo’ in the loan granted to Videocon by ICICI Bank. Apreliminary enquiry into the case is already registered by the Delhi unit of the CBI. right now.” InMarch,threeofthecountry’s largest banks — SBI,ICICI Bank and Punjab National Bank (PNB) — had raised their marginal cost of funds-based lending rates (MCLRs). SBI raised the one-year MCLR by 20 basis points (bps) to 8.15%, ICICI Bank by 10 bps to 8.3% and PNB by 15 bps to 8.3%. Bankers believe despite the lower inflation trajectory projected, the central bank will wait for more data till August before cutting the repo rates. “The banks toowillwait before they act,” the private banker explained. ● RELIEF FOR RCOM ASST USTR VISIT Continued on Page 2 Related reports on P10 & 11 Continued on Page 2 SC allows sale of some assets to Jio Indo-US export talks on April 11 FE BUREAU New Delhi, April 5 BANIKINKAR PATTANAYAK New Delhi, April 5 THE SUPREME COURT on Thursday allowed Reliance Communications(RCom)togo ahead with the sale of its wireless assets to Reliance Jio Infocomm as it set aside the Bombay High Court’s March order that upheld an arbitration tribunal’s interim order barring the sale ortransferof its assets. Asofnow,theapexcourthas allowed creditors to proceed withthesaleofspectrum,media convergence nodes (MCNs) and real estate that were subject matterofthedisputebeforethe arbitral tribunal.However,with regard to the sale of tower subsidiary Reliance Infratel where the National Company LawTribunalhadearlierstayedthesale on the petition of HSBC Daisy Investments (Mauritius) which has a minority 4% stake in the tower firm,the SC said that the companyneeds to appeal in the National Company Law AppellateTribunal forrelief. IN THE FIRST visit of a senior US trade official to this country since the Trump administration slapped curbs on steel and aluminium supplies from India and some others, assistant US trade representative Mark Linscottwill land in New Delhi to huddle with senior commerce ministry officials on April 9,sources told FE. Separately, both the countries will hold the first formal consultation meeting at the World Trade Organisation (WTO) on April 11 over the US complaint to the multilateral body last month that New Delhi had been offering illegal export subsidies, said the sources. The US claimed that India’s export subsidies,worth around $7 billion ayear,“harm American workers by creating an uneven playing field on which they must compete”. The meeting with Linscott on Monday, aimed at setting the stage for the crucial trade policy forum (TPF) meeting to Continued on Page 2 TIES UNDER TEST ■ Both nations to hold first WTO consultation on April 11 over India's export subsidies ■ US may link GSP benefits to India to greater market access for its products and ask India to correct trade imbalance be held laterthisyear,comes at atimewhenatradewarinvolving the top two economies,the US and China,threatens to spiral out of control, with the US seeking to step up the offensive against countries with which it runs a trade deficit. Continued on Page 2 DATA LEAK As numbers rise, Facebook says 5.62 lakh likely hit in India PRESS TRUST OF INDIA New Delhi, April 5 US-BASED SOCIAL MEDIA giant Facebook on Thursday admitted that nearly5.62 lakh people in India were “potentiallyaffected”byitsglobaldata breach involving Cambridge Analytica,andassertedthatthe UK-based firm’s use of such data did not have its consent. In response to the Indian governmentonthedatabreach scandal,Facebookhasinformed that“only 335 people”in India were directly affected through the installation of an app and another 562,120 people were “potentially affected” as friends of those users. Facebook has over 20 crore users in India. “Cambridge Analytica’s acquisition of Facebook data through the app developed by Dr Aleksandr Kogan and his company Global Science Research Limited (GSR) happened without our autho- ILLUSTRATION: SHYAM risationandwasanexplicitviolationofourPlatformpolicies,” a Facebook spokesperson said in a statement. “At no time did Facebook agree to Cambridge Analytica’s use of any Facebook user data that may havebeencollectedbythis app, including with respect to users located in India,” the spokesperson added. The company said the total numberofpotentiallyimpacted users (562,455 people) is 0.6% of the global number of potentiallyaffectedpeople.Theapp— mydigitallife — was installed by 335 people in India, which is estimated to be 0.1% of the app’s total worldwide installs. Facebook’sresponsecomesa dayafteritsaiddataofabout87 million people — mostly in the US—mayhavebeenimproperly sharedwith CambridgeAnalytica,upfromthe50millionithad previouslyreported. Continued on Page 2 OUT-OF-COURT SETTLEMENT Binani Industries looks to clinch deal before April 9 SHAMIK PAUL & MITHUN DASGUPTA Mumbai, April 5 BINANI INDUSTRIES, WHICH hasbeenpushingforanout-ofcourt settlement for Binani Cement, is expected to submit a revised resolution plan to Binani Cement’s committee of creditors(CoC)onFridaytowin its approval for an out-of-tribunal settlement,sourceswith direct knowledge of the development told FE. This even as the tussle over Binani Cement heats up ahead of the next hearing on its insolvency resolution onApril 9,when Dalmia Bharat is expected to push for its proposal to be accepted. “The CoC has asked for certain clarifications, and Binani Industries is working on the response. If it is done by today evening,the revised resolution plan will be sent to the CoC today; otherwise,itwill be submitted tomorrow,” one of the sources mentioned above said ■ Binani Industries likely to pay `8,000 crore to clear dues of lenders, operational creditors ■ Binani likely to submit revised resolution plan to lenders on Friday ■ UltraTech likely to go ahead with Binani deal only if IBC proceeding is terminated ■ UltraTech unlikely to pay more than previously-agreed `7,266 crore on condition of anonymity. “Only if Binani can get the IBC (Insolvency and Bankruptcy Code) proceeding terminated does UltraTech’s deal with them stand. However, there is no revision in the amount of money that will be paid for the transaction. If Binani is saying that they will pay the full amount (to lenders),what is the justification for asking for more money,” a source close to PE/VC FUNDS FE BUREAU UltraTech Cement said. However, a lender said BinaniIndustrieshasagreedto pay around `8,000 crore to clear dues of not just the lenders but also of all operationalcreditors(thathavebeen admittedundertheinsolvency process), which is higher than the `7,266 crore it is expected to receive from UltraTech as part of its arrangement. Continued on Page 2 Special Feature Investments soar 60% in 2017 Investments by PE & VC funds surged 60% y-o-y to a record $26 billion in 2017. Exits also were at a record high PE/VC investments in India $ billion No. of deals 2015 22.9 1,049 2016 16.8 976 2017 26.4 Top 3 deals $ billion Flipkart 2.5 Axis Bank 1.7 682 Paytm Notes: Includes real estate, PIPE and VC deals; 2017 calendar year 1.4 Source: Bain PE Report 2018 Reforms in health sector; benefits for masses NHPS is set to trigger long-pending reforms like standardisation of treatment protocols and cost rationalisation ■ Personal Finance, P13
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