OPINION, P8 NATION, P24 K PATIDAR/A SUBRAMANIAN GST tax buoyancy of 1.2 is impressive, and in the first year INTERNATIONAL, P14 EDITORIAL DEFENCE CONTRACT UNDER INVESTIGATION Chanda Kochhar probe will now start, but ICICI's board has already failed all tests RFI for `32,640-cr minesweepers expected soon Tesla CEO Elon Musk emails staff alleging employee 'sabotage' MUMBAI, WEDNESDAY, JUNE 20, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 145, 26 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: 35,286.74 ▼ 261.52 NIFTY: 10,710.45 ▼ 89.40 NIKKEI 225: 22,278.48 ▼ 401.85 HANG SENG: 29,468.15 ▼ 841.34 `/$:68.38 ▼ 39.00 `/€: 78.96 ▲ 0.03 BRENT: $74.95 ▼ $0.39 GOLD: `30,757 ▲ `64 GOYAL MEETS BANK CHIEFS ● GROUNDED Set IBC-like voting threshold at 66% to approve a plan in consortium lending PRESS TRUST OF INDIA New Delhi, June 19 PSBs to help MSMEs, genuine borrowers THE SECOND TRANCHE of Bharat-22 ETF follow-on offer was lapped up by institutional investors on Tuesday, reports PTI. The portion reserved for anchor bidders was subscribed 3.44 times to the tune of `5,163 crore. The Centre on Tuesday launched the FFO of Bharat-22 ETF, comprising shares of 22 companies, to raise up to `8,400 crore from the market. On top of $50 billion announced on Friday; China vows to retaliate ‘forcefully’ MSCI Asia (ex Japan) 709 708.11 708 707 706 705 BLOOMBERG Washington/Hong Kong, June 19 ‘Brazil, India corp debt most at risk from rate hikes’ TRADETENSIONS BETWEEN the world’s two biggest economies intensified, with China vowing to retaliate “forcefully” against US President Donald Trump’s threatened tariffs on another $200 billion in Chinese imports. “If the US loses its senses and publishes such a list, China will have to take comprehensive quantitative and qualitative measures,”according to a statement from the A 200-BASIS-POINT increase in interest rates could cause a sharp rise in emergingmarket corporate debt at risk of default, reports Reuters. A report from McKinsey Global Institute showed Brazilian and Indian companies are most vulnerable to rate hikes. 705.93 704 703 702 5.30 AM 6.29 PM ministry of commerce. It labelled the move “extreme pressure and blackmail”, and said it would retaliate with counter-measures. Trump ordered up identification of $200 billion in Chinese imports for additional tariffs of 10% — with another $200 billion after that if Beijing retaliates. While the $50 billion in tariffs already announced on Friday were mainlyonindustrialgoods,the broader move would push up prices for toys, tools, T-shirts and a lot more forUS shoppers. Markets soured as economistswarnedofdamagedbusiness confidence, a blow to China’s growth prospects and rippleeffectsthroughitssupply chains.Thebenchmarkindexof Chinese stocks fell almost 4%, other Asian share markets declined and US equity futures traded lower,while safe havens including the yen, gold and Treasuries climbed. “Itspsychologicaleffects,its effects in increasing uncertainty,couldbeveryseriousand we’recertainlygettinglaterina cycle of escalation,” former US Treasury secretary Lawrence Summers said in an interview on BloombergTelevision. Continued on Page 2 Special Features Buck up TCS buyback of shares: Should you go for it? Rupee gives up 39 paise This is the second year in a row when TCS is going for buyback of shares. The buyback price has been fixed at `2,100 a share, a 15% premium over current market price ■ Personal Finance, P13 Hatch wants to be the Netflix of mobile game streaming The Finnish firm has developed a game streaming service where users stream the content instead of downloading it on their phones, a model perfect for Indian users ■ eFE, P13 QuickPicks Kraft mulls $1-bn Complan sale KRAFT HEINZ is considering a sale of children’s milk drink brand Complan in India, which could fetch about $1 billion, people familiar with the matter said, reports Bloomberg. Kraft Heinz is working with an adviser to gauge interest in the business, according to the people. The brand could attract local companies and private equity firms. Deliberations are at an early stage, and Kraft Heinz could decide to keep the business, the people added. PAGE 6 NHAI’s land acquisition stalls THE NATIONAL Highways Authority of India’s progress in land acquisition has somewhat stalled in the last couple of years, reports Rouhan Sharma in Mumbai. The reasons behind the stagnant land acquisition are rising land costs and the amendment in 2015 to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act. PAGE 2 FE BUREAU The rupee on Tuesday plummeted to 68.38 against the dollar, giving up 39 paise over Monday's close. These levels were last seen on May 23. So far in 2018, the Indian currency has lost 7.9% against the greenback. 66.5 67.0 `/$ 67.5 68.0 68.5 68.12 (inverted scale) 69.0 May 21, 2018 68.38 June 19, 2018 ● SERIOUS CHARGES AirAsia board says former CEO to blame FE BUREAU Mumbai, June 19 THE BOARD OF directors of AirAsia Group (AAGB) on Tuesday rebutted all allegations levelled against the airline’s top brass including group CEO Tony Fernandes, deputy group CEO Bo Lingam and also AAGB and AirAsia India (AAI). AAGB holds 49% in a joint venture with the Tatas, which runs the budget carrier AAI. The statement noted that under the watch of ex-CEO Mittu Chandilya,“funds were illegally siphoned out of the company through...unauthorised contracts”.“All contracts entered into by AirAsia India at the relevant time were under the watch of the then CEO Mittu Chandilya… AirAsia India has lodged an FIR against Mr Mittu Chandilya,” it added. Continued on Page 2 1 demand formore power,Goyal said: “We believe that powers are available with the RBI and that is the conversation that the government and Reserve Bankwill have amongst themselves. If there are more additional powers required, the government is open to that.” RBI governor Urjit Patel last week reportedly told a parliamentary panel that the central bank required more powers to regulatePSBsproperly.Patelwas called to offer his take on huge bad loans with state-run banks andthe$2.2-billionfraudatthe Punjab National Bank (PNB). Continued on Page 2 Continued on Page 2 3.6 1 0.3 -0.3 -1.4 -1.2 -9 Source: RBI ond stage. The decision is aimedataddressingapprehension that since 11 of the 21 PSBsareunderthepromptcorrectiveactionframeworkofthe Reserve Bank of India (RBI), theirabilitytolendtospureconomicgrowthislimited.Twoof these stressed PSBs,in fact,are facing restriction to lend. State Bank of India chairman Rajnish Kumar said he has shared his bank’s experience on mergers and there is a genuine need for further consolidation in the banking sector.However,it’suptotheindividual board of PSBs to consider this issue,he added. Asked about the RBI’s Large units Trump targets $200 billion in fresh tariffs on China Apr ‘17 Apr ‘18 Medium units TRADE WAR HOTS UP IN THE NEWS Anchor investors lap up Bharat-22 ETF follow-on offer THE GOVERNMENT HAS decided not to go ahead with Air India stake sale in an election year and will provide required funds for its operations, a senior official said on Tuesday. The decision comes less than three weeks after the proposed 76% strategic stake sale in the debt-laden national carrier failed to attract any bidders. Air India will very soon get funds from the government for its day-to-day operations andwill even place orders fora couple of aircraft,the government official said. The decision was taken at a high-level meeting convened by Union minister Arun Jaitley on Monday. The meeting was attended by Piyush Goyal, who has been temporarily given the charge of the finance ministry, civil aviation minister Suresh Prabhu, transport minister Nitin Gadkari and other senior officials of the finance and civil aviation ministries. “The airline is posting operational profits. None of the flights go empty. With all the cost-efficient mechanism in place, we will continue improving its operational efficiency.There is no need to rush in fordisinvestment as of now,” the official told PTI. (% growth, y-o-y) Micro & small units Outgoing Jammu and Kashmir chief minister Mehbooba Mufti addressing a press conference in Srinagar on Tuesday Reports on Page 16 Credit offtake up but loans to industry still muted Industry State of the matter IN A MOVE that would unclog credit flows to investors,public sector banks (PSBs) have resolvedthatanydecisiontaken by 66% of creditors under the consortium lending arrangement will be accepted by all. After meeting the chiefs of 13 PSBs to discuss how best to improve credit availability to industry, interim finance minister Piyush Goyal said the threshold,insyncwithasimilar rule under the Insolvency and Bankruptcy Code to approve a resolution plan,will help banks address anyissue fast. The minister also stressed that the deposits with staterun banks are“100% safe”and the government will provide adequate capital to all of them, if required. All 21 PSBs have decided to support genuine borrowers and MSMEs that are in need of morecreditintwostages,Goyal said.In the first stage,theywill scan around 4,500 genuine accounts with an exposure between `200 crore and `2,000 crore and see if these companies need fresh loans to support growth. Those with exposure up to `200 crore will alsobegivenathrustinthesec- 4.5 Non-food credit FE BUREAU New Delhi, June 19 10.7 Govt puts off Air India stake sale for now RBI governor has expressed his views about powers of regulation and supervision (of PSBs). We believe that powers are already available with RBI. And if there are many additional powers required (to be given to RBI), the govt is open to that. — PIYUSH GOYAL INTERIM FINANCE MINISTER GST RETURNS-FILING Compliance optimal now at 70%, says GSTN’s Kumar SUMIT JHA New Delhi, June 19 WITH CLOSE TO 70% of the 1.1 crore businesses registered for the goods and services tax (GST) filing the returns by the deadline,thecompliancelevelis nowsatisfactory,GSTNetwork’s chief executive officer Prakash Kumar told FE,adding that the vexed issue of delays in refunds to exporters has also been fully resolvedforthosepayintegrated GSTand seek to get it back. In the initial months since GST’sJuly2017launch,justalittle over half of the registered taxpayers used to file returns (andpaytax)bythedeadline(the 20th of the next month).While overall taxpayer base has expanded over months from around 64 lakh at the start,the number of monthly return-filers also has risen.According to Kumar,almostalltaxpayerswho haveataxliabilityarenowfiling thereturns.“Thesenumbersare in line with what we had in the VAT regime.Even in the case of incometaxreturns,thereare25 With automated and expedited refund process for exporters paying IGST, a large number of businesses are switching to this route instead of claiming ITC on exported goods. — PRAKASH KUMAR GST NETWORK CEO crorePANsbutonlyover6crore people who actually file the returns,” he added. Amongexporters,thosewho pay integrated GST (IGST) and file refund applications with “the correct details”were getting the refunds in four to five working days, he added. The prospect of prompt refunds,he said, encouraged exporters to use the fully automated IGST route rather than the letter of undertakingroute,whichdoesn’tinvolvetaxpaymentbutonly refund of input tax credits. Exportersareeligibleforrefund oftaxcontentinexportgoodsas such such sales overseas are zero-rated. “Refund process for claims filed since February has largely been smooth. We have been clearingrefundseverydayandit has become relatively errorfree,” Kumar said. Exporters have to declare the identical details to the customs department as well as to the IT backboneforGSTrefundsbutfailure to match details in earlier days hadledtorefundsgettingstuck. Continued on Page 2 ROBO-SERVICE Amazon’s Alexa will now butler at Marriott hotels REUTERS June 19 AMAZON.COM ONTUESDAY said that it has partnered with Marriott International to help increase guest access to amenities with the e-commerce giant’svirtual assistant Alexa, through its voicecontrolled device Echo, in an attempt to expand its presence in the hospitality industry. Alexa for hospitality would assist in providing guests’services ranging from ordering room service to requesting housekeeping or calling the concierge for dinner recommendations without having to pick up the phone. The company said the partnership will start this summer at Marriott’s select properties and the service will be available by invitation to other hotel chains. Several media reports had said that Marriott had tested both Apple’s Siri assistant and Amazon’s Alexa to select what was best suited for its hotels. Marriott did not comment specifically on Apple, but said it has “great relationships with a number of technology companies and is always open to exploring opportunities to innovate and better the guest experience”. Amazonhasneverdisclosed the exact sales figure for its Echo devices. However, the companyinJanuarysaiditsold “millions” of Amazon devices and that the Echo Dot device was the best-selling product among Prime members. The company’s move to tie-up with hotels is another strategy to woo more users for its Echo devices. Amazon Echo owners spend an average of $1,700 a year on Amazon, more than the $1,300 Amazon Prime members are estimated to be spending a year on the e-commerce site, CNBC reported earlier this year, citing a report by Consumer Intelligence Research Partners.
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