OPINION, P8 ECONOMY, P2 SUNIL JAIN Talk of SC/ST being historically backward doesn’t always hold COMPANIES, P6 RENU KOHLI BACK SOON RIDE-HAILING RACE Off-budget public capex seems to be pressurising the long-term bond yields Jaitley likely to resume office in August third week Bhavish Aggarwal’s Ola takes rivalry with Uber to UK MUMBAI, WEDNESDAY, AUGUST 8, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 187, 24 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: 37,665.80 ▼ 26.09 NIFTY: 11,389.45 ▲ 2.35 NIKKEI 225: 22,662.74 ▲ 155.42 HANG SENG: 28,248.88 ▲ 429.32 `/$: 68.69 ▲ 0.20 `/€: 79.65 ▼ 0.22 BRENT: $74.76 ▲ $1.01 GOLD: `29,521.00 ▲▼ `30.00 STRESSED POWER ASSETS OPEN ACREAGE AUCTION Vedanta Cairn gets Panel: RBI should amend order 41 blocks, ONGC 2 IN THE NEWS Govt withdraws FRDI Bill from LS NEARLY A year after introducing it in the Lok Sabha, the government on Tuesday withdrew the Financial Resolution and Deposit Insurance (FRDI) Bill following widespread concerns over certain provisions in the proposed legislation, reports PTI. The Bill was introduced on August 10, 2017. New single-licence regime for all forms of hydrocarbons and revenuesharing critical to raising India’s oil output 59,282 sq km Total exploration acreage under 55 OALP blocks ■ Cairn's keen interest in FE BUREAU New Delhi, August 7 PETROL PRICES have crossed the `77-a-litre mark for the first time in two months due to firming international rates, reports PTI. The price of petrol in Delhi was on Tuesday hiked by 9 paise a litre to `77.06, while diesel rates went up by 6 p to `68.50 per litre. VEDANTA CAIRN, OPERATOR of the prolific Barmer field in Rajasthan,is set to bag an impressive 41 out of the 55 hydrocarbon blocks offered under the Open Acreage Licensing Policy(OALP),a critical part of the March 2016launched Hydrocarbon Exploration Licensing Policy(HELP). An empowered committee of secretaries (ECS) is learnt to have recommended the award of these blocks to the Anil Agarwal-led firm,nine to public-sector Oil India and just two to ONGC. While the first OALP round didnotseeanyforeignoilgiant bidding — domestic major Reliance Industries also opted Special Feature OALP (it had bid for all 55 blocks on offer, while foreign energy giants and RIL opted out) a redeeming feature for the country's plans to augment domestic oil and gas output for oil from around 80% now to 67% by 2022 and 50% by 2030. HELP’shallmarksaresingle licence for exploration of all forms of hydrocarbons (including shale gas and coal bed methane), a simple revenue-sharing model and marketing and pricing freedom for the developers. ONGC had bid for 37 blocks under OALP-1 and OIL for 22 (both either individually or through a consortium) while Vedanta Cairn had put in bids for all the 55 areas that were on offer.As many as 110 bids were received in total — 92 bids were received for 46 on-land blocks, 18 bids came in for nine offshore blocks. Apart from the firms mentioned above, the other bidders for the first round of OALP either individually or through a consortium include Bharat Petro Resources,Selan Exploration Technology, Hindustan Oil Exploration Company and Sun Petro. The ECS recommendations will now have to be cleared by the petroleum minister and the finance minister. Jobs tracker Petrol crosses `77 per litre ■ India has set a target to cut import dependence for oil from around 80% now to 67% by 2022 and 50% by 2030 out — the bullish approach by Vedanta Cairn could potentially make the new policy reasonablysuccessfulandprovide at least incremental pace to India’s stagnant hydrocarbon output growth. Prime Minister Narendra Modi has set a target to cut the country’s import dependence A PARLIAMENTARY PANEL has said the Reserve Bank of India’s (RBI) February circular that mandates early detection and time-bound resolution of stressed assets is “discriminatoryinapproachtotheexisting promoters” and asserted that any forced sale of power assets through insolvency proceedings “would be baffling and disastrous”. In a seeming endorsement ● LONG RECOVERY PNB posts `940-crore loss in Q1 number (in m) and ■ employment growth (in %) 6.6% 147 4.29 Source: CARE Ratings FY16 FY17 FY18 4.57 *Sample of 700 companies with aggregate turnover of `33.08 lakh crore in F18, employees covered: 4.57 million 3.98 7.7% 95 GE Aviation,Vistara ink $340-m agreement for GEnx engines LEADING AIRCRAFT engine maker GE Aviation has signed a deal worth over $340 million with Tata-SIA airline Vistara for the supply of its GEnx-1B engines for the latter's Boeing 787 fleet, reports PTI. The engines are expected to be delivered to Air Vistara between 2020 and 2021, GE Aviation said in a release issued on Tuesday. The firm engine order is Vistara's first for GEnx-powered aircraft. PAGE 5 Growing India biz: Harley seeks partner for lightweight bikes HARLEY-DAVIDSON is scouting for a partner with a manufacturing and distribution footprint to make lightweight motorcycles for use in India and other Asian markets, a top company executive told Reuters. The Milwaukee-based company last week said it would launch a 250-500 cc motorcycle in India to boost sales in the world’s largest two-wheeler market. PAGE 6 Robust employment growth mostly in large companies (`1,000 cr plus) FE BUREAU New Delhi, August 7 $7 billion India's imports of textiles, garments in FY18, a record $2.9 billion India's textile and garment imports from China vs exports of only $1.36 bn in FY18 OBITUARY MUTHUVEL KARUNANIDHI, A titan of modern Indian history, whose 75-year career in politics — as five-term CM of Tamil Nadu and DMK president for 50 years — deepened the idea of federalism and inspired regional assertion and self respect in politics like no one else, passed away on Tuesday evening. “With deep anguish, we announce the demise of our beloved Kalaignar Dr M Karunanidhi on August 8, 2018 at 6.10 pm. Despite the best possible efforts by our team of doctors and nurses to resuscitate him, he failed to respond. We profoundly mourn the loss of one of the tallest leaders of India and we share the grief of family members and fellow Tamilians worldwide,” said a statement issued by Dr Aravindan Selvaraj,executive director, Kauvery Hospital, Chennai. The announcement triggered mourning across Tamil Nadu, and among the hundreds of DMK workers who PORTRAIT: SHYAM KUMAR PRASAD M Karunanidhi, who scripted much of TN politics, dies at 94 EXPRESS NEWS SERVICE Chennai, August 7 34 of the stance taken bythe ministries of power and finance, the parliamentary committee on energy has recommended that the central bank amend its guidelines to “make them amenable in an unbiased manner” to adequately address the sector-specific issues encountered by independent powerproducers,and salvage the electricity sector Continued on Page 2 ■ SC refuses to stay Allahabad HC proceedings, Page 2 MUMBAI PROJECT Monorail running cost to go up, commuters spared Continued on Page 2 Crude oil, alcohol, finance, telecom, construction materials (all >15%) saw high employment growth Govt raises import duty on 328 textile items INDIA ON TUESDAY doubled import duties on 328 textile products to 20%, the second such hike in a month, as the world’s largest cotton producer sought to curb soaring imports from China and focus more on local value addition in the labour-intensive sector. The move comes amid mounting concerns that a trade war between the US and China would further aggravate dumping of cheaper products from the world’s sec- 20,317 MW Total Continued on Page 2 191 0-5% Agriculture, iron & steel, plastics (<0), textiles, healthcare, FMCG, infra, trading (0-5%) among sectors with less than average job growth ● ANTI-DUMPING MOVE QuickPicks With PPA 23,550 MW ond-biggest economy despite a weak rupee. 267 Negative 5-10% 15,320 MW Commissioned THE COST OF running Mumbai’s monorail project is expectedtoshootupwithoperators demanding a higher rate. While earliertheywere making `3,131 for a run of 9 km, they are nowlooking at `18,000 for a stretch of 19.5 km. But commuters will be spared, Mumbai Metropolitan RegionDevelopmentAuthority (MMRDA) officials said, with fares remaining the same. For travelling one station, the fare will be `5 while for travelling a distance of six stations or more on the seven-station route, it remains `11. The monorail, Number of companieswitnessing employment growth 10+% Under-construction 38,870 MW PUNJAB NATIONAL BANK (PNB)onTuesdayreportedanet loss of `940 crore in the AprilJune period,its second straight quarterly loss, as it struggles to rebound from a `14,357-crore fraud it had announced in February,involving jewellers Nirav Modi and Mehul Choksi. The bank recovered from the record loss of `13,417 crore in the March quarter when its provisioning quadrupled to cover half of the fraud losses,apart from having to set aside funds for losses in its bond portfolio. It had posted a net profit of `343.40 crore in the June quarter last fiscal. PNB shares plunged 8.1% on the BSE onTuesday,against a marginal fall in the Sensex. Interestingly, PNB’s losses would have been starkerbut for two factors.First,its provisioning for half the fraud amount thatwas to be spread overthree quarters(startingwiththethree monthsthroughJune)wasactually less than a third in the June quarter. This means the bank hastosetasidemoreinthenext twoquartersforthefraudlosses than what it has done now (in the June quarter,it provided for only `1,863.46 crore against `2,392.81crore,whichisathird of the remaining fraud losses). Second, PNB could write back`9.13croreinitsprofitand lossaccount,thankstoaReserve Bank of India (RBI) clarification in July on spreading banks’ lossesontheirbondportfolio.So while the additional provisioning for mark-to-market losses on its investments in available for sale and held for trading bond categories needed for the Junequarterwas`724.63crore, PNBhadsetaside`733.76crore in the March quarter. Continued on Page 2 fe Bureau ■ Permanent employee Capacity out of the ongoing stressed asset scenario. The committee observed that in case of a forced sale via the insolvency law, “the deep pocketsmayenterthefray,stake their bids, pocket the projects and later when the demand for the electricity goes up,theywill sell these projects at high prices andsiphonoffthemoneywithout doing anything”. Recently,thehighestofferof `2,500 crore quoted forGMR’s 1,370-MW thermal power plantinChhattisgarhunderthe insolvency resolution process has put the cost of the plant at `1.8croreperMW,significantly lower than the actual figure of `6 crore perMW. ROUHAN SHARMA Mumbai, August 7 Employment growth in a cross-section* of corporate India in FY18 was 6.6%, down from 7.7% in FY17, according to CARE Ratings From buying a policy to raising a claim to assessing risks more accurately, tech such as AI & IoT can make it easier for customers and insurers ■ Personal Finance, P13 FE BUREAU New Delhi, August 7 Stressed power projects FE BUREAU New Delhi, August 7 Muted growth How tech can help insurance Says ‘those with deep pockets could bag projects for a song, resell them to make a killing’ had gathered outside the hospital over the last few days. Leading the tributes to the DMK chief, Prime Minister Narendra Modi posted on Twitter:“Deeply saddened by the passing away of Kalaignar Karunanidhi. He was one of the senior most leaders of India. We have lost a deeprooted mass leader, prolific thinker, accomplished writer and a stalwart whose life was devoted to the welfare of the poor and the marginalised.” Continued on Page 2 Daily ridership 16,00017,000 Estimated ridership after Phase II 200,000 Project cost `2,460 cr Stations 7 sponsored byMMRDA,restarts operations from September 1 afterclose to ayear. MMRDA needs to pay the monorail operators, the consortium of L&T and Scomi Engineering (LTSE), a fee to operate the monorail every time it traverses the 9-km route,which is the rate pertrip. Continued on Page 2
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