OPINION, P8 MONEY & MARKETS, P10 INTERNATIONAL, P14 RBI COMPLIANCE TRADE WAR Founder Uday Kotak trims stake in Kotak Mahindra Bank to 19.7% China unveils proposed retaliatory tariffs on $60 bn of US goods EDITORIAL Putting the SC/ST Act in 9th Schedule is itself an atrocity Once the National Health Stack takes off, India's healthcare will never be the same NEW DELHI, SATURDAY, AUGUST 4, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 133, 24 PAGES, `10.00 (PATNA `9.00, RAIPUR `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 37,556.16 ▲ 391.00 NIFTY: 11,360.80 ▲ 116.10 NIKKEI 225: 22,525.18 ▲ 12.65 HANG SENG: 27,676.32 ▼ 38.24 `/$: 68.62 ▲ 0.09 `/€: 79.59 ▲ 0.22 BRENT: $73.55 ▲ $0.10 GOLD: `29,428 ▼ `149 `25,000-CR ASSET SALE KHARIF 2018 Hopes of robust crop get a boost WITH REFERENCE TO the report 'Speeding up process: NCLT may move cases to other benches', which appeared in the edition dated August 1, the Insolvency and Bankruptcy Board of India has clarified that it is a regulator with specific statutory responsibilities, which does not include shifting of proceedings from one bench to another. Besides, it has no intention to do so. 106 88 86 97 95 (% change in rainfall from LPA, June 1-Aug 3) 95 East/North-east North-west -4 0 Central India -1 South peninsula All India -8^ -26 2013 2014 2015 2016 2017 2018* ^The deficit was 3% till July 27 Source: IMD *Based on actual rainfall in June-July and forecast for Aug-Sept; # long period average is 89 cm, 96-104% of LPA is seen as 'normal' Sowing picks up, oilseeds area up 6% y-o-y (Area in lakh hectares) 114 870 Aug 3, ‘18 855 « 50 51 110 158 149 156 151 TOTAL Aug 3, ‘17 1.8% Paddy Pulses Coarse Oilseeds cereals Cane Source: Ministry of agriculture Cotton Blockchain can bridge the gap to integrated transport Mobility as a Service (MaaS) is a new business model that is gaining traction in the transport sector, and has the potential to change how we travel ■ Motobahn, P13 96% (plus/minus 9%) of LPA and expected to be higher than (94%) predicted in June. Quantitatively,the rainfall for the country as a whole during the second half of the season is likely to be 95% of LPAwith a model error of plus or minus 8%,”the India Meteorological Department (IMD) said in a statement. The rainfall was 94% of LPA in the critical June-July period. The distribution of rains was good in most parts of the country key to kharif performance, barring Bihar, Jharkhand and North-East. Continued on Page 2 NHAI to raise `25k cr from SBI 14 Prev. close: 14.84 crore towards deferred spectrum liabilities, which will get transferred to Reliance Jio, as thenewownerofthespectrum. The payment byJiowill also enable RCom to reinstate the bank guarantees that were encashedbythedepartmentof telecommunications earlier this year on account of deferred payment liabilities. In the next phase,the company plans to raise around `3,700 crore by selling its Close October 1 SC will hear the insolvency case remaining 850 MHz spectrum assets to Jio. It also plans to monetise its 133-acre Dhirubhai Ambani Knowledge City campusinNaviMumbaiandits 4-acrepropertyinNewDelhito raise around `10,000 crore. WhileapprovingtheRCom’s proposal for settlement of dispute with telecom equipment manufacturer Ericsson India,a benchledbyjusticeRFNariman said as per the National Company Law Appellate Tribunal’s Continued on Page 2 REUTERS New Delhi, August 3 DOWDUPONT HAS TOLD India it is putting off trials needed forthe approval to sell a genetically modified variety of corn,taking a cue from US rival Monsantothathasalsopulleda similarapplicationduetointellectual property concerns. In a letteraddressed to the environment ministry, the Indian arm of DowDuPont said it had obtainedpermissiontoconduct trialsgrowingasmallcropofthe corninPunjabbutwouldliketo “deferthe undertaking”. 8.51% and `5,000 cr from NSSF at 8.33% IN A BREAK from convention, theNationalHighwaysAuthority of India (NHAI) on Friday concluded an agreement with StateBankofIndia(SBI)toraise `25,000 crore from the country’s largest bank as an unsecured loan, mainly to finance fully-state-fundedengineering procurementandconstruction (EPC) projects. NHAI, which implements Tata Sons chairman N Chandrasekaran with Tata Motors CEO Guenter Butschek (right) and Tata Motors CFO PB Balaji (left) at the 73rd Tata Motors annual general meeting, in Mumbai on Friday Report on Page 6 EXPRESS PHOTO: PRASHANT NADKAR With the bank and financial stocks witnessing renewed buying interests, the Nifty rose 116.10 points on Friday to hit yet another record high of 11,360.80, adding close to 8% gains in 2018 so far. The Sensex put on 391 points to end the session at 37,556.16, which is 50 points shy of its all-time high of 37,606.58 that it had hit on July 31. Report on Page 11 ■ NHAI recently raised `4,000 cr from LIC at FE BUREAU New Delhi, August 3 Motoring on FE BUREAU around a third of highwayprojects via the EPC route, gets a third of the funds from the Union budget and its borrowings have largelybeen through government-guaranteed bonds,lapped up bythe likes of LIC and EPFO. The authority has already raised `10,160 crore through bonds against its `62,000crore borrowing target for this fiscal. S&P BSE Sensex 11,360.80 11,500 Nifty50 Intra-day, Aug 3 37,650 37,556.16 11,250 37,500 11,000 10,500 10,250 Continued on Page 2 37,350 37,327.16 10,750 10,657.30 Prev. close: 37,165.16 July 2, 2018 Aug 3, 2018 Open Close 37,200 37,050 REVENUE BASE About 45% of GST paid by 0.07% of assessees than `1,500 crore. Of course, the companies below the `20-lakh turnover aren’t even required to register for GST but the incentives of 60 % of regular GST registrants (96 lakh) Contribution to govt's GST revenue (%) 30 20 10 0 Up to `20 lakh`20 lakh `1 cr 0.07 40 0.32 16.81 50 3.28 18.01 SOME 6,700 FIRMSoraminuscule 0.07% of the over 96 lakh registeredforthegoodsandservices tax (GST) underits regular scheme contribute nearly 45% of the GST revenue collected by the Centre and states.So,if GST collectedforamonthis`95,000 crore (for June 2018 the collections by the due date was `96,483 crore),about `43,000 crore would come from these largebusinesses,withaturnover above `500 crore. OverhalfoftheregularGST registrants report turnovers of less than `20 lakh annually and their tax payment is only 1.56% to the total GST collections. In other words, in a monthwhere GSTcollection is `95,000 crore, over 48,000 taxpayers together pay less 3.05 4.53 SUMIT JHA New Delhi, August 3 15.13 9.17 DELHI GRABBED the top spot among states in potential to attract fresh investments, according to think-tank National Council ofApplied Economic Research (NCAER), reports fe Bureau in New Delhi. Gujarat slipped two notches from last year to occupy the third position after Tamil Nadu that moved up four places. The NCAER State Investment Potential Index 2018 is based on six pillars — land, labour, infrastructure, economic climate, political stability and governance —, and perceptions of a conducive business climate. PAGE 2 August 3 SC asks RCom to pay `550 cr to Ericsson by September 30 15.69 Open Nifty at a new lifetime high ■ Has raised `10,160 cr so far against its `62,000-cr borrowing target for FY19 25.91 Delhi best place for attracting fresh investments: NCAER 14.84 Record run to finance fully-state-funded EPC projects 5.2 FIAT CHRYSLER Automobiles NV filed a US trade complaint seeking to prevent Mahindra & Mahindra from importing an off-road vehicle that looks like its iconic Jeep, reports Bloomberg. The Fiat Chrysler group filed the complaint on August 1 at the US International Trade Commission, claiming that the Mahindra Roxor infringes key characteristics of Jeep’s signature trade dress — namely the “boxy body shape with flat-appearing vertical sides and rear body ending at about the same height as the hood”. PAGE 6 Dec 28, 2017 RCom announced sale of its assets to RJio for `25,000 cr RCom Intra-day, Aug 03 May30order,itisclearthatEricsson India,an operational creditor,iswillingtosettleitsdebtof over`1,500crorefor`550crore which is to be paid within 120 days i.e.bySeptember30. “Needless to say, the sale of assets concerned will go through as has been stated in the NCLT and NCLAT orders,” the apex court said while asking RCom to strictly adhere to the timeline for payment of `550 crore to be made on or before September 30. It also directedchairmanAnilAmbani to give an undertaking within one week to pay to Ericsson as per the settlement arrived at. The matterhas been posted forfurtherhearing on October 1, when the court will decide on the insolvency issue. The NCLAT had on May 30 orderedthattheinsolvencyplea byEricssonIndiaagainstRCom would be put on hold,in favour of a settlement plan being discussed between the two. DowDuPont 'defers' field trials to seek sale in India 52.24 Fiat Chrysler looking to block Mahindra Jeep ‘knock-off’ ANIL AMBANI'S RELIANCE CommunicationsonFridaygot a huge relief from the Supreme Court, which cleared its asset sale to Reliance Jio Infocomm. The move paves thewayforthe completion of the company's assetmonetisationprogramme under which RCom will sell its assets like spectrum, telecom towers and optical fibre to Jio. This will bring down the company's overall debt of `45,000 crore by`25,000 crore. The `25,000 crore which RCom will receive from Jio includesaround`18,000crore in cash and another `7,000 ■ Fund to be used mainly 1.56 INDIA’S MAIN SERVICES index rose at the fastest pace in 21 months in July as improving demand in the country’s dominant sector underpinned growth, reports Bloomberg. The seasonally adjusted Nikkei India Services Index rose to 54.2 in July from 52.6 in June, suggesting a strong start to the economy in Q2FY19 that began in April. The pick-up in activity was accompanied by a rise in inflationary pressures, the survey showed, giving policy makers more reason to remain vigilant about prices in coming months. May 15 NCLT admits insolvency plea by Ericsson India against RCom INDU BHAN New Delhi, August 3 ROAD MAP cheaper than those raised from LIC and NSSF recently Services index at 21-month high on strong demand May 30 NCLAT stays insolvency proceedings against RCom to explore out of court settlement Detailed report on Page 12 ■ 10-year loan from SBI is competitively priced at 7.99%, QuickPicks May 29 RCom offers for an outof-court settlement with Ericsson ● GM CORN SEED 137 lakh hectare as farmers in Maharashtra are likelyto go for urad as an inter-crop in their cottonandsoyabeanfields,officials said. Urad area has declined 11.28% so far in the ongoing sowing season. India last year produced record 24.5 million tonne of pulses on an increased area of 288.3 lakh hectares. “Coffee and Tea planters in the south of India have some respite from excess rainfall received in the region until last week, as the monsoon winds start moving to the north,” CARE Ratings wrote on Friday. “The rainfall during August 2018 is likely to be UNSECURED LOAN Special Feature RCom will now be able to reinstate bank guarantees encashed by DoT earlier this year 44.71 A clarification DESPITE INCREASED CHANCES of the monsoon rains this yeartobeatadbelownormal— about 95% of the long-period average (LPA) against the‘normal’ of 96-104% of LPA —, good distribution of rains coupled with the incentive of higher and assured minimum supportpriceshaveboostedthe prospect of the 2018 kharif outputbeingatparwiththelast summer crop’s. Also, higher waterreserves in keyreservoirs across the country could help the next rabi (winter) crop. As on Friday,kharif sowing areawas down just 1.8% from the year-ago period, from a widergap of 7.5% prevailing a week earlier. Among major crops, sowing areas for paddy, pulses and cotton are nowjust 4% below the levels a year ago compared with 12%, 9% and 8%, respectively, a week ago, but the area under oilseeds is now 6% higher than a year ago, a marked improvement from down 1% last week. Government officials are relieved on the recoveryin area under tur, which is now 1.3% higher than year-ago level.The pulses area may match last year’s kharif acreage of about Rain deficit widens (% of LPA#) 120 116 ANTIGUA'S ASSERTION THAT India did not give any adverse report to stall granting of citizenship to Mehul Choksi last year evoked sharp reactions from New Delhi, reports PTI. The government on Friday maintained the police verification report of the bank fraud accused was “clear” in 2017. A CBI official said the agency has sent an extradition request to the government to be forwarded to Antigua to bring him back. FE BUREAU New Delhi, August 3 MONSOON RAINS 274 263 IN THE NEWS Choksi citizenship: Antigua, India in war of words Sowing picks up on dispersed rains; ample water reserves good news for rabi crop SC paves way for RCom-RJio deal `1 cr5 cr `5 cr10 cr `10 cr100 cr `100 cr500 cr Above `500 cr availability of input tax credit and the fact that registered suppliers are preferred by larger procurers over unregisteredonesarethemainreasons for these firms to be in the net. “Thenumberoftaxpayersin thehighestslabandtheir(large) contributionmaylooklopsided compared with the rest of the assessees but this is the norm for all the countries and jurisdictions,”a tax official said. In the pre-GSTregime,over 60% of assessees under the central (excise and service) and state tax (VAT) laws were reporting less than `20 lakh as an annual revenue. Continued on Page 2 BHUSHAN POWER Tata Steel moves SC on revised bid order INDU BHAN New Delhi, August 3 TATA STEEL ON Friday knocked the doors of the Supreme Court seeking a stay on the August 1 order of the National CompanyLawAppellate Tribunal (NCLAT) that allowed the three bidders — Tata Steel, JSW Steel and Liberty House — to submit revised bids in the fray for bankrupt Bhushan Power and Steel (BPSL). Though the SC declined an urgent hearing on the matter as sought by the company since the deadline for submitting revised bid is August 6, it agreed to hear the matter on August 10. Meanwhile, Tata Steel also moved the NCLATto seek extension of time for submitting the revised bids, which will come up for hearing on August 6 itself. Seeking to restrain the resolution professional and the committee of creditors from considering any fresh revised bids,Tata Steel said in its petition that its “compliant resolution plan” had received the highest score by the CoC at its meeting on June 11 and that was prior to the appellate tribunal’s July 20 order that directed the NCLT to consider top two viable bids. It further told the apex court that it had participated in the process in a bonafide manner, abiding by all laws, timelines and requirements Bid race July 20: NCLAT asked the CoC to select H1 & H2 bidders July 27: CoC allowed JSW Steel to submit revised offer July 30: Tata Steel challenged this in NCLAT July 31: CoC selected Tata Steel as H1 & JSW Steel as H2 bidder August 1: NCLAT asked all three bidders to make revised offer by August 6 August 3: Tata Steel moved NCLAT to seek extension for submitting revised bid, plea to be heard on August 6 August 3: It also moved SC challenging NCLAT's revised bid order ■ SC declined urgent hearing, matter to be heard on August 10 prescribed in the Insolvency and Bankruptcy Code, 2016, and also those prescribed by the CoC and the RP. The NCLAT’s August 1 order had said that the CoC will consider and evaluate the revised bids and identify the highest bidder, but put it in a sealed cover until the appellate tribunal passes an order on the original petition of Tata Steel which is whether the late submission of bid by Liberty House initially should be seen valid or not. The case of Bhushan Power and Steel has gone through several twists and turns in the last few months. Continued on Page 2
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