OPINION, P6 ECONOMY, P2 J KRISHNAMURTY & A KUMAR Older workers will mar the demographic dividend in India INTERNATIONAL, P4 EDITORIAL ECONOMIC REFORMS TRADE WAR THREAT Important to ensure defaulters don't get to buy firms at IBC at cut-rate prices India likely to grow over 7.4% in FY19: DEA secretary Garg US Treasury secy Mnuchin hints at truce with China NEW DELHI, MONDAY, APRIL 23, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 44, 18 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 WATER USE FOR FARMING Why Punjab shouldn’t be India’s rice bowl and Maharashtra must shun cane TOTAL DEPOSITS IN Jan Dhan accounts crossed the `80,000-crore mark with more people joining the flagship financial inclusion programme, according to official data, reports PTI. The deposits, which have been steadily rising since March 2017, were at `80,545.70 crore on April 11, 2018, said a finance ministry data. 5,263 60 3000 1500 0 30 1400 15 19 Bihar W Bengal Punjab 0 agriculture consumes a disproportionate more than three-fourths of the country’s fresh water resources. And At long last, MTNL being wound up Turnover E-comm think tank to hold first meet tomorrow THE THINK TANK set up by the Centre to deliberate on issues in the e-commerce sector and cross-border digital trade will hold its first meeting on April 24, reports PTI. Issues that would be taken up include crossborder data flow, nondiscriminatory treatment of digital products, data localisation, among others. `19,510 cr Debt of MTNL; no operating margin to cover interest cost Icrier discussed the issue in luciddetailandcalledforaparadigm shift in water use for agriculture,with the objective 2,648 2,870 -2,941 FY17 `11,202 cr 92% Amount MTNL requires to pay govt in early 2019 for 2G spectrum renewal fees, etc Ratio of wage cost to annual turnover as against industry average of 5-7% Export growth may falter in FY19 Dealing with data: Banks need to tread with caution FE BUREAU New Delhi, April 22 Financial institutions have always been in the forefront of adopting new technology but this also brings in its own set of challenges, says an Accenture study ■ EFE, P8 Export share in GDP at 14-year low* (%, in nominal terms) MERCHANDISE EXPORTS HIT a three-year high in 2017-18 but slowing growth in shipments of manufacturing goods and raw materials, collateral impact of a global trade war, unfavourable base effect for roughly half the year and temporary discomfort to traders due to last month’s ban on the widely-used letters of undertakings (LoUs) pose risks to export growth in the current fiscal year. GST refunds, unless expedited, would be an additional dampener for exporters to sail through in 2018-19 and sustain the almost doubledigit growth achieved in the last fiscal. Ignore short-term volatility and stay invested Investors must moderate their return expectations for the current year since market valuations are still trading higher. But longterm outlook continues to remain positive ■ Personal Finance, P9 27 25 23 18.9 21 19 17 15 17.6 2004-05 2017-18 *Goods and services Based on advance GDP estimate Core exports rise faster in FY18 % change (y-o-y) 2016-17 2017-18 Manufacturing export growth eased to 4.1% yearon-year on a three-month moving average basis in March, against 8.3% in February, while expansion in farm exports contracted by 4.2 10.7 Non-oil, non-bullion exports -3.1% from 2.3% while growth in other commodities (mostly raw inputs) continued to decelerate, according to an estimate by Nomura. Continued on Page 2 CHART-TOPPERS Music streaming apps: It takes a telco to tango JIOMUSIC, THE FREE-TOUSE music app, topped the charts in terms of unique visitors which stood at 19 million in February this year. But it was on the Bharti Airtel-operated Wynk that listeners spent the most time at 1,679 million minutes, data from research agency ComScore revealed. The total time spent on Saavn by users was just 194 million minutes and the Unique listeners (million) 19 20 18 JioMusic 15 17 11 Gaana 6 0 Wynk 3 Mar 2017 1,800 1,679 1,500 1,200 10 5 4 Time spent (million minutes) 4 Saavn Feb 2018 music app had just 4 million unique visitors. In the last week of March, music app Saavn —promoted 900 251 563 600 341 300 0 Gaana 962 545 194 164 Mar 2017 by Rishi Malhotra and others — decided it wanted to team up with JioMusic, a purely commercial decision. JioMusic Wynk Saavn Feb 2018 Source: comScore ANUSHREE BHATTACHARYYA New Delhi, April 22 Acquiring customers can be costly at `50 per download but if there is support from a mobile services provider the actioninordertomakecultivationofriceandsugarcanemore profitabletofarmersinregions where the crops’ irrigation water productivity/economic waterproductivityare high. Tamil Nadu, for instance, may have high land productivityforirrigatedricecomparable to Punjab’s, but Bihar is seen more suited for rice cultivation than both the states as the state’s irrigationwaterproductivityforriceis`56kg/lakhlitre compared with Tamil Nadu’s `39 kg and Punjab’s 19 kg. POST-UDAY DISCIPLINE RISKS ABOUND Special Features Source: Icrier working paper of shifting water-intensive crops to regionswhere the naturalresourceisabundant.“The price-based subsidy existing forinputsatpresentmustshift to income-directed policies, wherein the input subsidies/benefits must be directly transferred to the farmer’s account rather than getting reflected in the price of the particular input,” Ashok Gulati and Gayathri Mohan wrote in the paper titled, “Towards sustainable,productive and profitable agriculture: Cases of rice and sugarcane”. The idea is to take policy 60% of irrigationwateris used forrice and sugarcane,the two most water-guzzling crops. A recent working paper by Continued on Page 2 FY16 Sources told FE that closing MTNL’s operations is feasible from all angles barring one — it has a huge staff strength of 27,919whichneedstobetaken careof.BarringthegroupAofficerswhoaremostlyIndianTelecomServiceofficersondeputation from the department of telecommunications, bulk of the workforce belongs to the company and this segment wouldresistanyattemptofclo- (Sugar cane 100% irrigated in Maharashtra) Continued on Page 2 -1,948 FY15 0.4 sure.As far as the firm’s mobile subscribersareconcerned,they can easily port out to other operators which has happened oflatewhensomeprivateoperators shut down theirservices. MTNL’s landline business can be assigned to fellow PSU, BSNLwhich currentlydoes not have presence in Delhi and Mumbai. -2,893 -3,000 Bihar 60% of irrigation water used for just two crops—rice 0 UP Maharashtra and sugarcane 0.46 MARKETS WATCHDOG SEBI is mulling getting a forensic examination done on financial statements and disclosures made by ICICI Bank in the last few years amid a controversy over alleged conflict of interest involving the lender’s CEO Chanda Kochhar and her husband. According to top officials, Sebi will also consult RBI on the matter to avoid any intraregulatory jurisdiction issues. The forensic examination willfocusonvariousdisclosures made by the top private sector bankoverthelastfewyears,visa-vis the clarifications submitted by ICICI Bank to the stock exchanges in reply to queries made in the backdrop of a controversyregardingcertainloans extended as part of a consortium toVideocon. Officials said the examination will also cover the disclosures made at the time of Kochhar being appointed as CEO and MD in 2009. 0 PRASANTA SAHU New Delhi, April 22 0 0.8 3/4th of the country's fresh water resources owing to faulty policies; PRESS TRUST OF INDIA New Delhi, April 22 Net profit 2,639 1,500 3,124 3,000 -1,500 AS STATE-OWNED MAHANAGAR Telephone Nigam (MTNL), which provides telecom services in Delhi and Mumbai circles, continues to struggle with declining revenues and mounting losses in a fiercely competitive market, the government is finally exploring the option of shutting down the debt-laden firm and monetise its land, buildings and tower business.What has forced the government to explore the option is that MTNL’s20-yearlicencefeewill come up for renewal in April nextyear,whichwould require the company to pay an unaffordable `11,000 crore. Employee cost 700 1.2 Sebi may seek audit of ICICI Bank’s books 4,500 2,631 PETROL PRICE ON Sunday hit `74.40 a litre — the highest level under the BJP-led government — while diesel rates touched a record high of `65.65, renewing calls for a cut in excise duty, reports PTI. State-owned oil firms on Sunday raised petrol and diesel rates by 19 paise per litre each in Delhi. (` crore) 3,398 Telco in dire straits with losses higher than revenue, but latest trigger is hefty licence renewal fee 1 Even as large parts of India witness acute water scarcity and depletion of water tables, agriculture consumes a disproportionate more than ● CONFLICT OF INTEREST CHARGES MOUNTING LOSSES At `74.70, petrol hits highest level under BJP govt 1.25 45 2100 799 42 4500 2,179 56 6000 Irrigation water used for producing 1 kg of sugar (litres) Sugar water productivity (kg/cubic metre) 1.6 2800 1,000 IN THE NEWS Deposits in Jan Dhan accounts cross `80,000 cr Irrigation water used for producing 1 kg of rice (litres) Irrigation water productivity (kg/lakh litres, RHS) 2,393 PUNJABFARMERS,HELPEDby near-total irrigation, stick to rice cultivation since it is profitableforthem.Freepowerprovided by the state government and an assured paddy procurement mechanism keep them going. This is when rice could havebeengrownwithsubstantially lesser use of irrigation water in the eastern states of Bihar and West Bengal. Similarly, farmers in Maharashtra, despite the state’s abysmally low irrigation coverage (18%), choose water-guzzling sugarcane over other crops like cotton, tur and groundnut which produce highervalue of output perunit of irrigationwater.The reason:Sugarcaneis100%irrigated in Maharashtra and the crop’sprofitabilityisassuredby a clutch of sugarmills that provides the farmers sort of an assured market. Both these paradoxes lay bare how misdirected government policies are aggravating India’s grave water crisis.Even as large parts of the country witness acute water scarcity and depletion of water tables, 1,786 PRABHUDATTA MISHRA New Delhi, April 22 cost falls dramatically — by 60 % to `20 per download. Given the high cost of running the operations and the heightened competitive intensity — there are at least half a dozen in the market — it’s hard to make ends meet. Although Saavn posted a 47% jump in revenue from operations to `39.5 crore for the year ended December 31, 2016, the expenses soared 50% leaving profits flat at `1 crore, according to RoC filings. Continued on Page 2 Continued on Page 2 Now, complacency to cost electricity discoms dear ANUPAM CHATTERJEE New Delhi, April 22 IF THE STATE governments still wanted to keep electricity subsidies, they should give these to the intended beneficiaries via the direct benefit transfer (DBT) route, rather than burden the distribution companies (discoms) by making them the transfer agents, power minister RK Singh said. In an exclusive interview with FE, the minister said one reason for the worsening of the aggregate technical and commercial (AT&C) losses in some states and many others failing to meet the targets set under the UDAY scheme for reducing these losses is constant delays in disbursal of subsidies by state governments. Delayed receipts reflect adversely on AT&C figures because it deflates the revenue against the units of electricity sold. Singh asserted that there wouldbenogoingbackonthe government’splanstoincul- The perennial problem with the power sector has been the dichotomy between the laws and their implementation. I have conveyed my resolution to rigorously implement the existing laws, to the states and the regulators. — RK SINGH POWER MINISTER cate discipline in discoms. Cross subsidywould be capped at 20% effective January2019 and discoms would be denied compensation for AT&C losses above 15% in tariff orders from the next fiscal,the minister said, adding that, starting FY20, gratuitous load-sheddingwould invite penal action. “The perennial problem with the power sector has been the lacuna between the laws and theirpractical implementation,”Singh said.“I have conveyed my resolution to rigorously implement the existing laws,to the states and the regulators,” he added. A policy draft that spells out these measures is expected to be considered by the Cabinet approval soon (some of the regulatory changes proposed require amendments to the Electricity Act,2003),the ministersaid. The idea is to introduce the changes in the monsoon session of Parliament. Continued on Page 2
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