OPINION, P8 COMPANIES, P6 EDITORIAL Poor farm policies hit BJP as much as Opposition unity COMMODITIES, P12 ASHISH GUPTA PHILANTHROPIC INITIATIVE AGGRESSIVE ACTION Govt needs to infuse more funds in PSU banks if they are to grow even modestly Infosys chief Nilekani pledges more than half his wealth to charity Trump slaps steel tariffs on closest allies as tensions rise NEW DELHI, FRIDAY, JUNE 1, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 78, 40 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: 35,322.38 ▲ 416.27 NIFTY: 10,736.15 ▲ 10,736.15 NIKKEI 225: 22,201.82 ▲ 22,201.82 HANG SENG: 30,468.56 ▲ 411.77 `/$: 67.41 ▲ 0.037 `/€: 78.69 ▲ 0.0127 BRENT: $76.14 ▲ $0.75 GOLD: `30,904 ▼ `131 GDP ESTIMATE ● LAND TRANSFER Growth speeds up; 7.7% in Q4FY18 Private investment, govt consumption drive growth to 7-quarter high; IN THE NEWS Centre plays down Petrol price cut by oil shock in FY19 7 paise, diesel by 5 paise per litre THE PRICE of petrol was on Thursday cut by 7 paise a litre and diesel by 5 paise — the second reduction in as many days after Wednesday’s 1-paisa cut — on the back of softening international oil rates, reports PTI. Petrol in Delhi now costs `78.35 a litre, down from `78.42, according to a price notification issued by state-owned oil firms. Diesel rates have been cut to `69.25 per litre from `69.30. Idea completes sale of towers to ATC for `4k cr TELECOM OPERATOR Idea Cellular on Thursday said it has completed the sale of approximately 9,900 mobile towers to American Tower Corporation’s (ATC) Indian arm for `4,000 crore, reports PTI. "...completion of sale of its (Idea) panIndia standalone tower business, by way of divesting its entire stake in ICISL, 100% subsidiary of Idea, to ATC Telecom Infrastructure Private Limited”, Idea said in a statement. INDIA’S GROSS DOMESTIC product (GDP) grew at 7.7% in the final quarter of the last financial year (Q4FY18), the fastest pace in seven quarters, aided by the gradual broad-basing of a recovery in private investments and a sustained push from government expenditure, especially of the consumption variety. According to data released by the Central Statistics Office (CSO)onThursday,theQ4FY18 GDP expansion that came on a 6.1% growth in the year-ago quarter was much higher than (a revised) 7% in the previous quarter(Q3FY18).However,the last fiscal still witnessed the lowesteconomicgrowthunder the National Democratic Alliancegovernment’swatch,as the first two quarters of the year,alongwiththelastquarter of FY17, saw the adverse impactsofdemonetisationand the goods and services tax’s transition blues, both of which have since faded. Among individual sectors, manufacturing and construction did well in the March quarter with year-on-year growth rates of 9.1% and 11.5% respectively, although the latter’s performance was onaweakbase(-3.9%).Inwhat 8 8 7 GDP (% real growth, y-o-y) 8.2 7 6.7 6 5.5 2017-18* *Second advance estimate (% real growth, y-o-y) 25 20 6.1 7.6 6 5 2012-13 7.7 GVA GDP 6 Q1 Q4 2016-17 PFCE Q2 Q3 Q4 2017-18 GFCE GFCF 16.8 22.4 15 10 14.4 6 5 0 6.7 4.2 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 PFCE: Private final consumption expenditure; GFCE: Government final consumption expenditure; GFCF: Gross fixed capital formation Source: MoSPI indicated sustained government consumption, “public administration, defence and other services”grew spectacularlyat 13.3% on a robust base of 16.4% growth. Growth increased 70 basis points sequentially in each of the three quarters to Q4. An unusual rolling back of the subsidies — as per Controller General of Accounts (CGA) data released separately, the Centre’s expenditure on subsidies in FY18 was `23,735 crore lower than the figures released for AprilDecember 2018 period, indicating the sum was returned to the exchequer by the agencies concerned — also made the GDP figure look rosier. The gross value added (GVA),the CSO said,grew7.6% in Q4FY18. While analysts are wary of the rising crude prices hitting India’s growth in FY19 (Moody’s had on Wednesday trimmed its India growth forecast to 7.3% for calendar year 2018 from a previous projection of 7.5%, citing higher oil prices and tighter financial conditions),economic affairs secretary Subhash Chandra Garg said that therewasn’t any direct correlation between oil prices and the country’s economic growth. Based on the current indicators,he said,the country could “maintain (Q4FY18) kind of growth level in FY19”. THE NATIONAL COMPANY LawAppellateTribunal(NCLAT) on Thursday admitted JaiprakashAssociates’(JAL)plea challenging the Allahabad National Company Law Tribunal’s (NCLT) May 16 order that directed it to transfer 760 acre of mortgaged land back to its subsidiary firm Jaiprakash Infratech (JIL). It has listed the matter for further hearing on July 13 and issued notices to the resolution professional (RP)Anuj Jain. The NCLAT on May 24 had stayed the NCLT’s order on the plea of JAL’s lenders — Axis Bank, Standard Chartered Bank and ICICI Bank — and fixed July13 as the next date of hearing.Soeffectivelythepetition of the lenders and JALwill not be clubbed by the NCLAT for hearing. The stay order will continue. Continued on Page 2 ■ Orient Cement calls off deal to buy Jaypee units, P6 Govt’s ambitious Air India stake sale fails to take off No bids received at the end of the Thursday deadline; next course of action to be decided STUCK ON THE TARMAC FE BUREAUS Mumbai/New Delhi, May 31 Air India losses in FY16-17 THE GOVERNMENT HAS drawn a blank on the 76% stake sale in Air India (AI) with not a single player putting in an expression of interest (EoI) to buy the state-owned carrier before the deadline ended on Thursday. There is no plan to extend the deadline and a spokesperson for the government said on Thursday a “further courseofactionwillbedecided appropriately”. Industrywatcherssaidthose interested in buying AI were probably spooked by the government’s insistence on retaininga24%stakedespitesuggestions it should exit the airline completely.Although thiswas a minorityholding,buyersfeared a lot of interference. `5,765 crore Total assets with AI in FY16-17 `4,591.5 crore Total debt as on Mar 2017 Total contingent liabilities `48,781 `2,841 crore crore Areas of concern which prevented pvt parties from bidding ■ Govt retaining 24% stake in the carrier after sale ■ Buyers could not create synergies if they had other aviation business “Partneringthegovernment inaconsumer-centricbusiness, overloadedwithpeople,wasnot a comforting proposition,” explained an industryexpert. Moreover, analysts said, it would be difficult to leverage AI’s bilateral agreements and the presence on prime routes, both in India and overseas, if it was to be run an “arm’s BYPOLL RESULTS ■ Adebt burden of `24,576 crore would be transferred to the buyer ■ No clear road map on employee structure post sale length” basis. That would not have allowed for synergies with the buyers’ existing airline operations. Disallowingforeignentities from holding a share of more than 49% of the 76% equity being sold was also a dampener,sectorwatchers said. Continued on Page 2 ● AIRASIA CASE BJP gets second reminder of Opposition unity effect Mistry says dragging his name is ‘ridiculous’ Continued on Page 2 COMPLETE ROLL-OUT Special Feature New Mahindra XUV5OO is much more than a facelift It’s got the bulk befitting an SUV, it’s even got a more powerful engine and drives better, but the cabin design, and to an extent quality, still doesn’t live up to expectations ■ Motobahn, P13 QuickPicks Eight infra sectors record 4.7% growth in April EIGHT INFRASTRUCTURE industries recorded a 4.7% growth in April helped by healthy performance in segments like coal, natural gas and cement, reports PTI. The growth rate of eight core sectors, which also include fertilisers and steel, was 2.6% in April 2017, according to data released by the commerce and industry ministry on Thursday. Coal, natural gas, refinery products and cement grew by 16%, 7.4%, 2.7%, and 16.6% in April this year, respectively. Non-food credit growth rises to 10.7% for April: RBI THE RESERVE Bank of India on Thursday said non-food credit growth accelerated to 10.7% for April compared with 4.5%in the same period a year earlier, led by retail and the services sector, reports PTI. Non-food credit grew 10.7% to `76,130 billion as on April 27, the central bank said. Gross bank credit, including food credit, was up 10.4% during the same period, compared with 3.8% in the yearago period. PAGE 10 Centre’s FY18 fiscal deficit at 3.53%, a tad higher than RE THE CENTRE’S fiscal deficit for FY18 came in at 3.53% of gross domestic product (GDP), marginally higher than the revised estimate (RE) of 3.5% when Budget FY19 was presented on February 1, reports fe Bureau in New Delhi. The higher deficit is despite a reduction of `75,000 crore (3.4%) in expenditure from the RE level of `22.18 lakh crore and a marginal upward revision in nominal GDP. Revenues too fell short of target. PAGE 2 % FE BUREAU New Delhi, May 31 Economy tides over demo, GST woes (% real growth, y-o-y) 2015-16 9 5 FE BUREAU New Delhi, May 31 NCLAT admits JAL plea against NCLT order GROUNDED All states on e-way bill route by June 3 FE BUREAU New Delhi, May 31 EIGHTSTATEGOVERNMENTS on Thursday announced their pans to roll out the electronic way bill (e-way bill) mechanism for transport of goods within their territories by June 3,a move thatwould lead to pan-India implementation of the crucial ant-evasion system under the goods and services tax (GST). E-way bills are currently required for interstate movement of merchandise above a threshold value of `50,000 and also for such intrastate transport in 29 states/union territories. Generation of intrastate eway bills will become mandatory for Chhattisgarh, Goa, Jammu and Kashmir, Mizoram, Odisha and Punjab on June 1. Tamil Nadu and West Bengal would implement the same on June 2 and 3, respectively. An e-way bill contains details of origin and destination of cargo movement along with the specification of the vehicle carrying it. The measure is expected to plug revenue leakages.According to an estimate, nearly `10,000 crore could be added to GST collections thanks to the mechanism. However,government officials said that the GSTrevenue collections for April may not reflecttheimpactofe-waybills as tax officials across states have been going slow on enforcement in the first month to allowtaxpayers time to familiarise themselves with the system. The government said that ■ Generation of intrastate e-way bills will be mandatory in Chhattisgarh, Goa, J&K, Mizoram, Odisha and Punjab on June 1 ■ Tamil Nadu and West Bengal would implement the system on June 2 and 3, respectively ■ GST revenue for April may not reflect the impact of e-way bill as tax officials have been lenient on its enforcement more than 6.3 crore e-waybills have been generated till May 30, including more than 2 crore intrastate bills. SinceApril1,thee-wayportal, developed by National Informatics Centre and managed by GST Network, has worked without any glitch unlike the earlier attempt to implement the system on February 1. The system had crashed on the first day as it wasn’t designed to accommodate the user traffic it encountered. GST collections for March (collected in April) came in at `1,03,458 crore, compared with a monthly average of around `90,000 crore in July-March. Continued on Page 2 Cyrus Mistry, former Tata Sons chairman FE BUREAU Mumbai, May 31 Opposition supporters celebrate the victory in Kairana bypolls EXPRESS NEWS SERVICE New Delhi, May 31 ADDING TO THE BJP’s string of electoral reverses in bypolls, Opposition parties Thursday won11of14assemblyandLok Sabha seats, including the Kairana parliamentary constituency in Uttar Pradesh, to send the ruling party a wakeup call in the run-up to the 2019 general elections. The saving grace forthe BJP camefromMaharashtrawhere it defeated the Shiv Sena in a keen contest for the Palghar Lok Sabha seat. In Uttarakhand, the BJP won the Tharali assembly seat while NDA part- ner NDPP took the Nagaland Lok Sabha seat. Of the four Lok Sabha seats where bypolls were held, the scorewas2-2fortheOpposition andtheNDA—allthefourseats were with the NDA earlier.The RLD-SP-BSP-Congresscombine wrested Kairana from the BJP and the NCP-Congress alliance snatched the BhandaraGondiya Lok Sabha seat in Maharashtra. But the silver lining for the BJPwasitsperformanceinWest Bengalwhere it pushed the Left Frontcandidatetothethirdspot in the Maheshtala assembly election where the Trinamool Congress emergedvictorious. Barring the Tharali seat,the BJP and its allies were defeated in the other nine assembly bypolls.TheBJPlosttheNoorpur seat in Uttar Pradesh to the SP whilealliesShiromaniAkaliDal and JD(U) lost a seat each to the CongressandtheRJDinPunjab andBihar.TheCongressbagged three seats — one each in Meghalaya,KarnatakaandPunjab — while other Opposition partieswontheremainingsix— JMM took two in Jharkhand; CPI(M), SP, RJD and Trinamool Congress one each in Kerala, Uttar Pradesh, Bihar and West Bengal,respectively. FORMER TATA SONS chairman Cyrus Mistry has rebutted AirAsia India’s non-executive director R Venkataramanan’s allegations against him saying, “This ridiculous attempt to question the independence of the CBI (Central Bureau of Investigation) and to cloak his (Venkataramanan’s) alleged misadventures by using my name is treated with the contempt it deserves.” Venkataramanan had said on Wednesday: “Emails purportedly written by me have been circulated in the media in the context of the issue of 5/20 (rule) in the aviation sector.” Continued on Page 2 Continued on Page 2 EXPRESS PHOTO: GAJENDRAYADAV SUGAR CRISIS Paswan says 30-lakh-tonne buffer stock soon FE BUREAU New Delhi, May 31 TO HELPCLEAR massive cane arrears to farmers, the Centre is building a buffersugarstock of 30 lakh tonnes, food and consumer affairs minister Ram Vilas Paswan said on Thursday. The move will cut the large inventory with sugar mills and help contain a slide in the prices of the sweetener and boost the mills’margins. Accordingtoanestimate,the government will have to bear a carrying cost of `1,200 crore a yearforthe proposed facility. ~`22,000 cr Sugarcane arrears for 2017-18 season `1,200 cr per annum Carrying cost of 3 million tonnes of sugar buffer Althoughanewsugarpackage being firmed up by the government is learnt to include an interest subsidy of more than `1,300 crore on loans to sugar mills to raise their ethanol production capacity, the minister did not confirmthis.Paswan,however, said his ministry was considering “fresh options” to help cane growers. He said mills have so far refrained from exports though it is mandatory for them to ship out certain portion of theirstocks.Earlierthismonth, the Centre approved production assistance of `5.50 per quintal directly to cane farmers, a move that would lower the mills’cane arrears. Continued on Page 2
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