OPINION, P6 COMPANIES, P4 AMID THREATS After WhatsApp, will govt now go after JioChat etc? Govt has enough levers to keep food prices low, so must free farm exports fully GOOD SHOW Kharola-led Air India clears allowance of pilots for June EDITORIAL INTERNATIONAL, P8 Lei Jun-led Xiaomi delivers growth in first results NEW DELHI, THURSDAY, AUGUST 23, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL.XLIV NO. 149, 18 PAGES, `6.00 (PATNA `6.00, RAIPUR `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 Continued on Page 2 Continued on Page 2 TREND REVERSAL Special Feature How Swiggy is disrupting food delivery with ML & AI Online food delivery app Swiggy generates terabytes of data every week and leverages this data for delivery efficiency and to connect customers to the right restaurant ■ eFE, P9 QuickPicks US duty on Indian metal pipes THE US has announced hefty preliminary antidumping duties on metal pipes imported from India, China and four other countries, in an aggressive tactic by the Trump administration to protect the American industry and lower the trade deficit, reports PTI. Six American pipe manufacturers had filed the antidumping complaint with the commerce department in January. India has been slapped with an anti-dumping duty of 50.55%. PAGE 10 ` fall not a risk for sovereign credit THE CONTINUING rupee plunge, which touched 70.15 levels last week, does not pose much risks to the sovereign rating, according to a study, reports PTI. "The impact of the rupee weakness on sovereign credit is limited with relatively strong external finances, especially the low level of external debt. But this could add to existing pressures in corporate and banking sectors," global rating agency Fitch said in a report. FPIs turn sellers in bond market TUSHAR GOENKA Mumbai, August 22 FPI investment Amount ($ billion) IN A SLIGHT trend reversal, foreign portfolio investors have turned sellers in the debt market, offloading bonds worth nearly $400 million in the five sessions to August 20. This follow purchases of $854.48 million tillAugust 10 and $104 million in July. The equity market too has seenforeignfundssellingstocks and in August so far they have sold a small amount of $141 million. Market watchers believesomeofthesellinghasto do with the weakening domestic currency. On August 16, the rupeeclosedatitslowesteverat 70.1575.This month so far,the rupee has lost 2.03% against the dollar and has given up 8.52% since January. Theweakening rupee could prompt foreign investors to offload more bonds, market observers said,since otherwise their portfolios would continue to lose value. C Venkat Nageswar, deputy managing 1.47 Jan 0.17 Feb 0.802 March 2.1 April 2.62 May 1.62 June 0.104 July 0.47 Aug* *(till Aug 20, 2018) Rupee movement 67 68 67.99 `/$ 69.83 69 70 71 Inverted scale Jun 21, 2018 Aug 21, 2018 Source: Bloomberg director, State Bank of India (global markets), said the level of 70.5 might not be breached. Continued on Page 2 DIGITAL DIVIDEND Mobile transaction values near `2L cr in June Value (` crore) 210,000 150,000 120,000 90,000 60,000 250 200 150 116 100 30,000 0 300 50 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2017 2018 ber. In April this year the value was `1.3 lakh crore,increasing to `1.8 lakh crore in May,data releasedbytheReserveBankof India (RBI) show. 0 Experts saytransactionvalues andvolumes maybe rising owing to the several digital payments options that consumersnowhave.Forinstance, SOURCE: RBI 180,000 Volume (million) 306 350 1,89,466 MOBILE BANKINGTRANSACTIONS have doubled between October 2017 and June when they crossed the 300million mark to clock over 306 million transactions. Moreover,value of transactions via the mobile banking channel inched close to `2 lakh crore for the first time in overayear.Theaggregatevalue of mobile banking transactions in June stood at `1.9 lakh crore, the highest since May 2017, when transactions worth `2.13 lakh crore were reported.After a downtrend in value after May 2017, they started picking up in Septem- Mobile banking transactions 180,765 SHRITAMA BOSE Mumbai, August 22 Google Tez joined the Unified Payments Interface (UPI) platform in September2017.Even before that PhonePe — Flipkart’s UPI app — made its debut. Paytm Payments Bank, launched in November 2017, recorded 47 million transactions in January 2018, accounting for nearly 22% of all transactions made through the mobile banking channel. While bank-wise data on mobilebankingtransactionsfor June are not availableyet,numbers for transactions made in January2018suggestthatsome of the growth in volumes may have come from Paytm’s conversion to a payments bank. Continued on Page 2 No monsoon blues for construction The monsoon didn't hit road construction in July as much as it did last year. Construction in Q1FY19 was near the EPC/ HAM-driven pace achieved in the second half of last fiscal. Awards 75 Construction Source: Ministry of road transport and highways 26 Q1FY19 17 2017-18 23.3 2016-17 % change (km) 2015-16 April-July, ‘17 April-July, ‘18 Construction/day 2014-15 14.74 15.7 11.6 12 16.6 22.5 26.9 (km) 2013-14 July'17 July'18 2012-13 the government pays the entire budgeted food subsidy amount for FY19 (to FCI) by March 2019 and provides an additional `26,000 crore on account of higher minimum support prices and servicing the second NSSF loan — unlikely options given the pledge to stick to the fiscal deficit target — it will have to take another loan for FCI in the currentyear.“Normal government expenditure is being substitutedwith loans instead of cash on fears that fiscal deficit will go for a toss if it is shown as the government borrowing,” an official said. FE BUREAU 12.3 with the agency taking shortterm (90 days) loans and cash credit to meet its expenses; in FY17, the government chose to end this ad hoc mechanism by arranging a five-year loan from NSSF of `70,000 crore at a high rate of 8.8% per annum at its own cost. Although idea was to clear the arrears to FCI, that did not materialise and the Centre had to take another NSSF loan of `65,000 crore in FY18 at 8.4% interest to not only meet the FCI’s expenses but also to service the previous loan. The outstanding in the loan account is currently `1.21 lakh crore. So, unless Highways 5.5 *In FY17-FY18, loan of `1.35 lakh crore from the National Small Savings Fund arranged for FCI; loan servicing by the Centre; another loan of `72,000 crore likely this fiscal, from NSSF or otherwise to a porn actress and a former Playboy model,all but naming Trump as having ordered himtodoit.Momentsafterthe charges were read aloud 2011-12 FY19 INDICTED: Trump’s former lawyer Michael Cohen (left) and former campaign chairman Paul Manafort AGENCIES 2010-11 FY18* DONALD TRUMP SUFFERED through perhaps theworst day of his presidency Tuesday as his personal lawyerimplicated him in a crime at almost the same moment his former campaign chairman became a convicted felon. Trump’s former lawyer Michael Cohen pleaded guilty to illegal campaign finance charges over hush money paid 2,672 3,066 (Estimate) ~2,00,000 1,64,123 1,38,123 1,35,000 1,18,000 61,982 FY17* BLOOMBERG Washington, August 22 412 721 FY16 81,000 1,15,693 Oustanding dues to FCI Two Trump lieutenants found guilty, president implicated 1,332 1,105 THE GOVERNMENT IS facing the spectre of a loan trap in order to undertake the food procurement,transportation and storage operations under the National Food Security Act uninterruptedly. On the one hand, it will likely have dues of an all-time-high `2 lakh crore to Food Corporation of India (FCI) by the end of the current fiscal (assuming that it will defer, as in the past two years, close to onethird of the subsidy payments to the corporation to control the fiscal deficit); on the other, for the third year in a row, it will have to resort to expensive National Small Savings Fund (NSSF) loan of `60,000-70,000 crore to ensure that FCI’s operations are unaffected. As the gap between the subsidy amounts released to FCI and its actual operational expenses widened over the years, it used to be bridged Subsidy amount allocated to FCI Subsidy expenses of FCI R 78,335 PRABHUDATTA MISHRA & PRASANTA SAHU New Delhi, August 22 (` crore) R Double whammy for Donald Trump « THE BOARD OF troubled carrier Jet Airways will consider cost reduction initiatives and turnaround plan along with its June quarter results at its meeting on August 27, according to a regulatoryfiling on Wednesday. The company, which is financially facing a hard time, has been looking at ways to reduce costs amid high oil prices and intense competition but not met much success so far. On August 9, its board of directors deferred the announcement of unaudited financial results for the AprilJune quarter and the same would now be taken up on August 27. The delay in announcement of financial results has come under the regulatory scanner and the ministry of corporate affairs has sought clarifications from the auditors of Jet and markets regulator is also looking into the issue,sources had said. Widening gap R R 61,000 FE BUREAU Mumbai, August 22 Difficult options: Violate fiscal target or allow dues to rise to over `2 L cr and take ~`70,000-cr loan for 3rd year 1,02,425 Jet board to discuss costcut plan on August 27 1,12,000 ● TROUBLE IN THE AIR Dues to FCI: Centre facing a debt trap TERRIBLE TUESDAY 278 213 RISING LOAD READ TO LEAD inaManhattancourtroom,the president’s former campaign chairman Paul Manafort was convicted on eight counts of tax and bank fraud charges, boosting special counsel RobertMueller’sinvestigation. The duelling sagaswere the clearest signyet of the political and legal peril that is increasingly threatening Trump’s presidency. While the legal ramifications will take more time to unfold, the political damage is already being felt, with Democrats seizing on the rulings. “The White House looks increasingly like a criminal enterprise with the convictions today of President Trump’s former campaign managerand personal lawyer,” Democratic senator Richard Blumenthal of Connecticut said in a statement. Continued on Page 2 ● BUILDING BLOCKS GIC acquires 49% stake in Provenance for `1,000 cr PRESS TRUST OF INDIA New Delhi, August 22 SINGAPORE'S SOVEREIGN WEALTH fund GIC has acquired a 49% stake in realty firm Provenance Land for an estimated `1,000 crore, according to sources. GIC has been investing heavilyin the Indian real estate market in the past few years. It had in December last year boughta33.34%stakeinDLF’s rental arm DLF Cyber City Developers (DCCDL) for about `9,000 crore. DCCDL holds 27 million sq ft of price commercial assets earning an annual rental income of `2,400 crore. Provenance owns 4.5 acres at Worli in central Mumbai where the company already has a five-star Four Seasons Hotel which has 202 rooms. It plans to develop Four Seasons Private Residences and a office towerwith 700,000 sq ft area. Continued on Page 2
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