OPINION, P6 ECONOMY, P2 A GULATI/ R JUNEJA Dairy development critical for raising farmer incomes INTERNATIONAL, P4 EDITORIAL GREEN SIGNAL IMMIGRATION POLICY RBI does well to not give special treatment for power sector NPAs — use IBC for them PM okays Sreedharan panel to lay down Metro rail standards US says still working to reunite 2,053 children with families MUMBAI, MONDAY, JUNE 25, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 149, 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 TELANGANA’S RYTHU BANDU SCHEME ● INFRA BOOST Over `5,000 cr paid to farmers over 6 weeks BV MAHALAKSHMI Hyderabad, June 24 IN THE NEWS A clarification WITH REGARD TO the news report "VID rollout: RBI asks banks to tweak systems by June 30", carried in the edition dated June 23, the Reserve Bank of India has denied that it has asked all banks to tweak their systems by June 30 to enable the use of virtual IDs in lieu of Aadhaar, and migrate to the limited know-yourcustomer mechanism. The error is regretted. THE TELANGANA GOVERNMENT has disbursed a considerable sum of `5,000 crore to over 47.5 lakh land-holding farmers in the state since the May10launchofitsambitious ‘crop investment support’ scheme Rythu Bandu. The scheme’s roaring start has borne out its higher efficiency as well as better efficacy compared with farm loan waivers and the promised MSP-based deficiency payments, when it comes to giving succour to the farmingcommunity.“Tilldate, of the `6,000 crore allotted to banks under this programme in the first phase,some `5,000 crore has been encashed by over 47.5 lakh farmers in the state,”an official source said. While six states have since March last year unveiled loan waivers amounting to a total of `1.5 lakh crore for farmers FE SPECIALS Land owners only 35% of farm workers Cultivators 3.2 m 35% 65% 5.9 m Agri labourers Split of 9.1m farm workers Benefit as % of cash cost Cotton Paddy Maize Groundnut Red gram Green gram Soyabean 0 Indian language internet users are expected to reach 536 mn in 2021. And regional content creators are taking note ■ eFE, P8 Google cloud gets takers in India Google is strengthening its cloud platform at a time when Amazon and Microsoft are sharpening their focus on India ■ INVESTOR, P9 On strong footing vis-a-vis peers Its diverse retail-dominated business mix and access to SBI’s >22k branches offer SBI Life a unique competitive advantage ■ PERSONAL FINANCE, P9 How to grow insurance industry Potential customers and insurance needs must be redefined to ensure that the industry grows at an accelerated pace ■ INFRASTRUCTURE, P11 On top of the world The railways is conducting surveys for four strategic lines to be built on the Indo-China border, at a cost of `2 lakh crore Continued on Page 2 Continued on Page 2 Source: Census 2011, Credit Suisse estimates Driving forward A Bahraini woman takes a selfie as she celebrates with Saudi and Bahraini women the lifting of the driving ban on women, in east Saudi Arabia on Sunday. This ushers in the end of the world's last ban on female drivers REUTERS (manyothersseemtohavesimilarplans),the roll-out has been partial; price-support schemes that will ensure that farmers receivethedifferentialbetween the (lower) market prices and MSPsregardlessofwhetherthe governmentprocuresthecrops are still on the drawing board. The Centre and states are reportedlyweighingthecostsof the schemes,which are seen to be prohibitive by many analysts, especially since the Modi government has promised MSPstobeatleast150%ofthe crop production costs. Apart from the immediate and timely relief to farmers that Rythu Bandu allows, it is also simpler to administer, besidesbeingfarlessinflationary and agnostic to the farmers'choices of crop. The Telangana government has set aside `12,000 crore in the2018-19budgetexclusively for the scheme, under which farmers with land titles are given`8,000/acreayearbytwo equalpay-orderchequesissued ahead of the two crop seasons. Continued on Page 2 UTI SBI/LIC pitch for UTI chairmanship CHIRAG MADIA Mumbai, June 24 The rise of regional content they make better commissions.Ashish Bhasin,chairman & CEO,Dentsu Aegis Network, estimates advertising revenues fordigital platformswill grow at three times the industry average around 10%. THE ASIAN INFRASTRUCTURE Investment Bank (AIIB) is likely to invest $200 million in a fund of funds set up by India to take interest in infra projects, a top government official said on Sunday. The proposed fund will come in two tranches of $100 million each and will go into a fund of funds to be floated by the NIIF, top finance ministry officials said on Sunday. “The AIIB board has approved an investment in the NIIF, and the first tranche of $100 million has got approved today(Sunday),whichwouldbe followed by a similar tranche on call,”interim finance minister Piyush Goyal said. India for the first time is hosting a two-day annual meet of AIIB’s board of governors in Mumbai from Monday. Economic affairs secretary SC Garg said there can be a leverage of 10-12 times on the money to be invested by the AIIB,which means nearly $2.4 billion of investments can take place in the sector. Garg said the money will come into the fund of funds like the green growth equity fund backed by the British government and will act as a platform to invest into other funds that will invest in infra projects. AIIB vice-president Danny Alexander said the multilateral bank is also interested in the fund of funds as it will lead to a higher inflows into the infra sector. The 2016-incorporated, Beijing-headquartered AIIB has approved $4.4 billion investments in the country so far — its second largest shareholder after China-which includes the earlier approved $1.2 billion, and making the country the largest beneficiary so far. 5 10 15 20 25 30 35 US investor T Rowe Price complains to finance ministry which refers case to Sebi ■ BRANDWAGON, P10 PRESS TRUST OF INDIA Mumbai, June 24 18-34% of cash costs covered by Rythu Bandhu scheme BOTH LIC AND SBI have written to the board of UTI Asset ManagementCompany(AMC), asking it to allow the term of Leo Puri, the current MD and CEO,to expire and to appoint a non-executive chairman from amongthe“independentdirectors”. The so-called independent directors are nominees of the PSU financial institutions that, together, own 73% of UTI’s shares.At present, there are two nominees each from LIC and SBI and one from PNB. The directions to the UTI Asset Management Company’s board is interesting because, under Sebi rules, anyone that already runs a mutual fund — a ‘sponsor’injargon—cannotbea part of another mutual fund. While a special carve-out was giventothefourPSUs—LIC,SBI, PNBandBankofBaroda—marketregulatorSebihadcomeout with guidelines “on avoiding conflictofinterestbetweenUTI MF and the sponsors”in 2003. POINT OF DISCORD ■ SBI & LIC want the term of current MD & CEO Leo Puri to expire ■ Under Sebi rules anyone that runs an MF can’t be part of another ■ Special carve out given to four PSUs but guidelines are there to avoid conflict of interest between UTI MF & the sponsors US investment firm T Rowe Price has cited these guidelines initscomplaintagainstthePSU sponsorsmadetobothSebiand the finance ministry. Theguidelinessaidsponsors “should not nominate any employee working with them ontheBoardoftheAMCandthe trustee company or any committeeoftheUTIMutualFund”. Continued on Page 2 TV vs OTT Hotstar did it with IPL, OTT is closing in on regular TV! With over 200 mn watching IPL on Hotstar, OTT apps tasted their first big success Video advertising in India Size of video ad market (` cr) 1,249 2016 Total ad market in India Digital ad market ANUSHREE BHATTACHARYYA New Delhi, June 24 WHILE IT MIGHT seem unthinkable today, there are those willing to bet the audience for video streaming platforms will close in on that for television channels in less than five years. For sure claims by Hotstar that 202 million watchedtheIPLarenotauthenticatedbyathirdparty.Butthen the number of 4G users is expected to hit 700 million or more by 2023, from 400 millioncurrently.Thatwouldprobably be some distance away 30% 80% 1,558 2017 2017 2016 20% Source: DAN E4M report 2016, 2017 Good start to the relief scheme, seen to be more efficient and less inflationary than alternatives AIIB to invest $200 million into an NIIF fund of funds 70% YouTube & Facebook Hotstar, Voot & SonyLiv 2016 2017 56,398 55,960 6,825* 8,202^ *12% of the total ad market fromtheestimated900million television viewers at the time. But getting to 750 million may not be such a stretch. It’s true much of the hype around onlinevideoviewing— and theadvertising revenues it could generate — is created by media agencies partlybecause ^15% of the total ad market UDAY OUTCOME Discoms in four states out of the red ANUPAM CHATTERJEE New Delhi, June 24 Discoms profits/losses (` crore) HELPED BYTHEUDAYscheme, electricity distribution companies (discoms) in four states — Maharashtra, Rajasthan, HaryanaandAndhraPradesh— have swung to profit in FY18, tiding over a phase of heavy loss-making that had lasted for several years.Among them,the four states’ discoms made a combined profit of `1,565.5 croreinFY18comparedwithan aggregatelossof`10,203crore in FY17. If the trend is sustained and discoms in other states (31 states had signed up for the Maharashtra Rajasthan Haryana AT&C losses (%) 18.9 17.5 2,568 848 4,468 26 19.7 588 25.4 20.3 387 115 2,780 Andhra Pradesh 15 FY17 (losses) FY18 (profits) revivalschemesinceNovember 2015) also return to the black soon, it could herald a new era for these state-owned entities, traditionallythe“weakest link” 11 8.7 FY17 FY18 in the power chain. Also, this could be good news for private power generators, burdened with stressed assets worth nearly `2 lakh crore. Payment discipline by discoms — the combined outstanding dues of these entities to generators is currently pegged at `14,000 crore — could help salvage the sectoras awhole. WhentheUDAYschemefor reviving the discoms was launched in 2015, the combined annual (FY16) losses of these entities were a staggering `52,000 crore.Gujaratwas the onlystate to sign up forthe scheme with its discoms already profitable. West Bengal, which too had profitable state-owned discoms then,did not join the scheme. Continued on Page 2 BOX OFFICE COAI flags concerns over Trai’s draft pesky call guidelines THE CELLULAR Operators' Association of India has raised concerns over Trai's draft rules to curb pesky calls, stating that they do not effectively deal with pain-points faced by users, reports PTI. It has insisted on a “cost-benefit analysis” before financially-stressed telcos are asked to overhaul the existing system. PAGE 3 DESPITETWO BIGhitsinPadmavat and Race 3, footfalls in the country’s cinema halls are falling.At 115 million in 2018 so far, they compare poorly with 313 million in 2017 when Bahubali raked in a staggering `510 crore and Tiger Zinda Hai made `339 crore. Footfalls were at an alltime high of 343 million in 2013 which saw three blockbusters like Dhoom 3, Krrish 3 and Chennai Express — the three together netted `644 crore at the box office. While it is true the second halfoftheyearisthebetterhalf — the big Diwali releasewill be Aamir Khan’s — footfalls may not cross 300 million, say industry experts. Even 2015, which saw the release of the Salman Khan starrer Bajrangi Bhaijan, had BOX OFFICE COLLECTION Total releases Net earning 4,000 (` cr) 3,000 2,000 1,000 2008 ‘10 ‘12 ‘14 ‘16 2018* Source: Box Office India, Industry estimates 0 Total footfall (million) Rhs 400 115 230.5 300 200 2008 ‘10 1,500 HEADS OF 11 state-owned banks will apprise a parliamentary committee about the problems of mounting bad loans and increasing fraud cases on Tuesday, reports PTI. They will be appearing before the Standing Committee on Finance. Bank officials will make presentations before the House panel and respond to queries on June 26. PAGE 2 FE BUREAU New Delhi, June 24 1,161 Heads of 11 PSBs to appear before House panel tomorrow Even Padmavat, Dangal, Sultan not enough to really revive the magic 130 140 160 159 165 185 201 204 226 245 92 QuickPicks 100 0 ‘12 ‘14 ‘16 2018* *From Jan-Jun 15, 2018 just 287 million viewers, an 8% drop over that in the previous year when Aamir Khan’s PK raked in `338 crore at the box office. The fewer footfalls are probably the result of a lot more variety on television, year-round cricket tournaments and of course expensive tickets.What has probablyalso kept viewers away from the theatres is the much shorter interval between theatre releases and the television premieres. Thatthisshouldbehappening is strange given the growth in the below-35 population and their rising disposable incomes and greater expenditure on entertainment. But since 2013 footfalls have steadilydeclined save in 2017. The industry,however,continues to make money, though net earnings, according to Box OfficeIndia,wereflatinthefour years between 2013 and 2016. Continued on Page 2
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