OPINION, P8 MONEY & MARKETS, P11 EDITORIAL Not just the CAD, even the BoP is looking shaky now INTERNATIONAL, P14 M BUTANI/A KOTHA BRIGHTER FUTURE THE RACE HEATS UP A sugar cess is both contentious and on shaky legal grounds, so GoI must be cautious NSE head Limaye says bourse could get listed in FY19 Roberts-led Comcast offers $65 bn to lure Fox from Disney bid MUMBAI, FRIDAY, JUNE 15, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO.141, 18 PAGES, `7.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 35,599.82 ▼ 139.34 NIFTY: 10,808.05 ▼ 48.65 NIKKEI 225: 22,738.61 ▼ 227.77 HANG SENG: 30,440.17 ▼ 284.98 `/$: 67.63 ▲ 0.01 `/€: 79.97 ▼ 0.45 BRENT: $76.85 ▲ $0.11 GOLD: `31,049.00 ▲ `664.00 BITTER BLOW Sugar recontrolled Food dept brings back quota system, stokes fears of licence raj; mills to report sales by 10th of next month ● VODA MERGER THE DEPARTMENT OF food has reintroduced the monthly sugar sales quota system that was abolished in 2013,stoking panic among mills that view the move as a throwback to the licence raj era. To start with, the sales quota for June has been fixed foreach of the 528 operational sugarunits across the country. They have been asked to submit information on sales in a particular month by the 10th of the next month. “Anyviolationofthisorder would attract the penal provisions underthe Essential Commodities Act, 1955, as amended from time to time,” says the order by the directorate of sugar under the department of food on June 7. Such limits used to be imposed earlier by the food ministry to control sugar sales through the so-called release order mechanism that was scrapped in April 2013,as part of the government’s move to loosen control over the sugar sectorfollowingtheRangarajan panel’srecommendations. While the Indian Sugar Mills Association (Isma) feels the move is against the intent of the Cabinet Committee on Eco- DoT seeks `2,100-cr guarantee from Idea PRESS TRUST OF INDIA New Delhi, June 14 THE DEPARTMENT OF telecommunications(DoT)willseek a bank guarantee of around `2,100croretoclearIdeaCellular’splannedmergerwithVodafoneIndia,agovernmentsource saidonThursday.“DoTwillraise demand for around `2,100 crorebankguaranteefromIdea Cellular before merger of VodafoneIndia.Theamountpertains toone-timespectrumfeeofIdea Cellular. Idea Cellular will be asked to replace one-year bank guarantee of Vodafone India submitted for deferred spectrumpayment,”thesourcesaid. Continued on Page 2 nomic Affairs’ (CCEA) decision last week,a senior food department official insists it’s in sync with the CCEAdirective. Mills feel the curb on monthly sales will impair their abilitytoimprovecashflowand potentially delay the clearance of cane arrears that have exceeded a staggering `22,000 crore. Mills’ ability to service debt will also be compromised. Themassivearrearshaveresur- ■ In April ’13, govt ended levy sugar, sales quota but kept cane price fixing along with states ■ Mills say quota move doesn’t help in clearing cane dues ■ Ex-mill prices dropped below even levy sugar rates during 2006-08 ■ Food dept says quota ensures equity among big, small mills Continued on Page 2 TAX COLLECTIONS Special Features The race to break the 300-mph barrier is real But does it really matter? Most modern car buyers are obsessed with luxury SUVs and autonomous driving, not the idea of an obscure car hitting a speed that’s almost theoretical ■ Motobahn, P13 Going abroad? Use your credit cards wisely Most Indian credit cards are accepted abroad, but there are currency and network-based charges associated with every foreign transaction, whether offline or online ■ Personal Finance, P13 QuickPicks ‘Rising Kashmir’ editor Shujaat Bukhari shot dead in Srinagar VETERAN JOURNALIST and Rising Kashmir editor Shujaat Bukhari was shot dead on Thursday by unidentified gunmen outside his office in Srinagar, reports Express News Service. While one of his personal security officers was also killed, another policeman and a civilian were injured, police said. Bukhari was leaving his office for an Iftar party when he was shot. PAGE 17 Costly fuel pushes WPI inflation to 14-month high of 4.43% INFLATION BASED on wholesale prices shot up to a 14-month high of 4.43% in May on increasing prices of petrol and diesel, prompting industry to demand action from policymakers to keep fuel prices under check, reports PTI. The Wholesale Price Index (WPI)-based inflation stood at 3.18% in April and 2.26% in May last year. PAGE 2 Lenders put Coastal Energen plant with `7k-cr debt on sale A CONSORTIUM of lenders led by State Bank of India has put on sale a 1,200 MW thermal power plant in Tamil Nadu set up by Coastal Energen, according to a bid document, reports Shritama Bose in Mumbai. The plant’s outstanding term debt as on December 30, 2016, was `6,132.14 crore and the working capital outstanding as on March 31, 2017, was `831.53 crore. PAGE 10 CBIC field staff miffed by Adhia's critique SUMIT JHA New Delhi, June 14 FINANCE SECRETARY Hasmukh Adhia’s missive to the Central Board of Indirect Taxes andCustoms(CBIC),askingwhy the performance of its field formations have been inferior to their counterparts in the states underthegoodsandservicestax (GST)regime,hasputtheformer in a bind.A large section of the CBIC’s 4,000 ranges has sent detailed responses to Adhia's assessment,mostlystatingwhy the comparisonwas unfair. Onesuchresponse,comparing the field-level data sent by the CBIC’s Hyderabad zone to the CBIC’s member-budget highlightedthatastate-leveltax official has jurisdiction over a largertaxpayerbasethanoneat theCentre,implyingtheformer wasboundtoreporthigherrevenue figures. But Adhia’s point washardlytherevenuecollected per official, but the month-onmonth growth in collections. Also, he had pointed out that a larger percentage of taxpayers underthestates’jurisdictionare filing the returns, compared with those underthe Centre. Central vs state GST officials Hyderabad zone Range Average no. of taxpayers Staff strength Vehicles Circle 807 2,086 2 2-3 Singer-songwriter Robbie Williams performs during the opening ceremony of the FIFAWorld Cup in Moscow’s Luzhniki Stadium before hosts Russia took on Saudi Arabia in the first match NEW INDEX ● GOING FOR BROKE As many as 14 states below par in handling water FE BUREAU New Delhi, June 14 WHILE THE COUNTRY is in the throes of the “worst water crisis in its history”, waterscarce states are more efficient than others in managing the resource.According to a Composite Water Management Index developed by NITI Aayog, Gujarat topped among states in efficiency of water management in 2016-17,followed by Madhya Pradesh, Andhra Pradesh, Karnataka and Maharashtra. However, among the “low performers” are the populous northern states including Uttar Pradesh, Bihar and Rajasthan, whicharehometoover600millionpeopleor50%ofthecountry's population. “These (lowperformer) states also account DATA ON TAP ~60% ~50% Best performers of the states were 'low performers' with less than 50% score on the Water Management Index of the country's population and its agriculture baskets are in these low-performing states ~60% of the 24 states included in the index have improved their scores in FY17 over FY16 ■ Gujarat ■ Madhya Pradesh ■ Andhra Pradesh ■ Karnataka ■ Maharashtra Worst performers ■ Jharkhand ■ Haryana ■ Uttar Pradesh ■ Bihar ■ Odisha Source: NITI Aayog’s Water Management Index, FY17 for 20-30% of India’s agricultural output. Given the combination of rapidly declining groundwater levels and limited policyaction,thisisalsolikelyto be a significant food security risk for the country going forward,” the think tank said. The water index scores for FY17varyfrom 76 (Gujarat) to 26 (Meghalaya), with the median score being about 49 for non-Himalayan states and about 31 for others. 15-20 Nil Kicking off with some music Range and circle are smallest field units for central and state-tax administrations, respectively The Hyderabad zone has, however, informed that a superintendent-level central official heading a range is assisted by a single inspector and lacks anyministerial staff. On the other hand, an equivalent state official has 14-20 staff members at his/her disposal, which includes executive as well as ministerial support staff. Additionally, a central official in charge of a range in the Hyderabad zone has no access to vehicle while two to three vehicles are available to his/her state-official counterpart. Continued on Page 2 A good score Continued on Page 2 FE BUREAU Sharing that growing feeling Infosys listed on the bourses on June 14, 1993, and an investment of `10,000 made then is now worth over `2 crore. The company has not only enhanced shareholder value through bonus issues, most of them in the ratio of 1:1, it has also done share buybacks. 1,238.7 1,400 June 14, 2018 1,200 1,000 800 600 400 0.31 200 June 14, 1993 0 Infosys share price on BSE (`) ICICI Bank, SBI differ on IBC for Punj Lloyd FE BUREAU New Delhi, June 14 PRIVATE SECTOR LENDER ICICI Bank on Thursday urged theNationalCompanyLawTribunal (NCLT) to initiate insolvency proceedings against Punj Lloyd as the infrastructure developer had defaulted on loans worth `853 crore. However, other lenders to the engineering company, led by State Bank of India (SBI), objected to the plea.Punj Lloyd owed banks `5,640 crore at the end of March 2018. Lenders argued Punj Lloyd currently owns only a few assets from which they can recoverthe dues.Theinitiation of the insolvency process,they said,could halt the completion of the company’s 20 ongoing projects, resulting in smaller recoveries for banks. The counsel appearing on behalf of SBI also pointed out the six-month period granted to the corporate debtors for debt resolution outside Insolvency and Bankruptcy Code (IBC), as per the Reserve Bank ofIndia’s(RBI)February12circular,was yet to expire. ICICI Bank said it has extended Punj Lloyd a total of `853.83 crore through working capital, term loan and other facilities since 2010. However,the companystarted defaulting on payments of both the principal and interest components since 2015. In 2016, ICICI classified the account as a non-performing asset (NPA). Continued on Page 2 PROOF OF CONCEPT Nothing boring about it: Musk wins bid to build high-speed system REUTERS June 14 THE CITY OF Chicago has selected billionaire entrepreneur Elon Musk’s The Boring Companytobuildahigh-speed underground commuter system from the Loop to O’Hare International Airport, one of the world’s busiest, media reported on Wednesday. Thesystemwillcompriseof 16-passengervehiclesthatwill travel up to 240 km per hour through a tunnel that will cut the current 30- to 45-minute trip between the airport and Chicago’s business district downto12minutes,according to Boring’s website. The Chicago Tribune and Bloomberg first reported the deal, citing unnamed sources. Reuters has not been able to reach the city or the company for immediate comment. Boring has promised that the project will be “100% privately funded”. Musk and Chicago mayor RahmEmanuelareexpectedto announce the proposal on Thursday in Chicago, the Tribune reported. The deal comes about a ILLUSTRATION: ROHNIT PHORE BANIKINKAR PATTANAYAK New Delhi, June 14 faced in regular intervals,especially in years subdued sugar prices, thanks to exorbitantly high cane prices fixedyearafter year by both the Centre and states like UttarPradesh. In a letter to food and consumer affairs minister Ram Vilas Paswan on June 8, Isma directorgeneralAbinashVerma said: “We feel the Sugar Directorate seems to have misinterpretedtheapprovaloftheCCEA, and instead of restricting its ordertospecifythesugarstocks at the end of June 2018, it has distributed sales quota, too, whichistantamounttotheregulatedreleaseordermechanism whichexistedpriorto2013.”He said if the government intends tokeepundercontroltheretail prices,which are in any case over a third higher than ex-factoryrates of sugar, it should devise a different mechanism to reduce this huge gap. The CCEA approved a clutch of proposals last week,including fixing the minimum sale price of refined sugar at `29 per kg, aimed at reversing a slide in rates of the sweetener and improving mills’ margin. “This will not affect the availability of sugarto consumers at reasonable prices and the government will put in place a mechanism to ensure that the retail prices of sugar are kept fully under control. month after Musk unveiled a plan to burrow a high-speed network of“personalised mass transit” tunnels under Los Angeles that he said could be built without disturbance or noise at the surface. Boring’s effort to win fasttrack city approval of a 4.34km-long tunnel beneath a busy stretch of Los Angeles’ West Side has drawn a court challenge from two neighbourhood organisations. Resistancetohistunnelling projectmarksasomewhatnew type of challenge for Musk. Opponents say the exemption Boring seeks from a lengthy environmental review of the LosAngelestesttunnelviolates state law forbidding such waivers for large-scope projects on a piecemeal basis. The Chicago and Los AngelesprojectscomeasMuskwrestles with production problems for the roll-out of his highly anticipated Model 3 sedan at Tesla,withsomeinvestorsconcerned his overlapping leadership roles at Boring and his rocket-building firm SpaceX has him spread too thin. Continued on Page 2
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.