OPINION, P8 BACK PAGE, P24 RENU KOHLI Hard to show DeMo raised tax compliance or cut cash-intensity INTERNATIONAL, P14 S SUBRAMANIAN NEXT IN COMMAND MARKET CAPITALISATION Demonising Rajan to defend DeMo is fine, but at least come up with a good argument CJI Misra recommends justice Ranjan Gogoi as his successor Amazon becomes second US firm to cross $1-trillion mark NEW DELHI, WEDNESDAY, SEPTEMBER 5, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 160, 28 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 38,157.92 ▼ 154.60 NIFTY: 11,520.30 ▼ 62.05 NIKKEI 225: 22,696.90 ▼ 10.48 HANG SENG: 27,973.34 ▲ 260.80 `/$: 71.57 ▼ 0.36 `/€: 82.71 ▼ 0.04 BRENT: $78.81 ▲ $0.66 GOLD: `30,191 ▼ `35 DEPARTMENT OF FOOD & SUPPLIES GOVERNMENT OF WEST BENGAL A RED initiative appears in today’s edition of The Financial Express. This magazine is an initiative of the marketing solutions team of The Indian Express Group. 24% of an average airline's cost structure 34% GST is levied on economy and business class air tickets, respectively Juniac pointed out that the steep rise in the prices of aviation turbine fuel together with the fall in the value of rupee were pressuring profits of airlines. He also pointed out that levying the goods and services tax on international tickets violates the principles of International $1.9 bn Civil Aviation Organisation. The IATAchief’s comments come on the heels of aviation consulting firm CAPAestimating the combined losses of domestic airlines in the current fiscal at around $1.9 billion (nearly `14,000 crore). Continued on Page 2 Govt guarantee of `2,100 cr for Air India FE BUREAU New Delhi, September 4 STATE-OWNED, LOSS-MAKINGAirIndia has been assured of `2,100 crore from the government in the form of guaranteed borrowing, civil avia- Shivinder moves NCLT against brother Malvinder, Godhwani Former Fortis Healthcare promoter Shivinder Singh said on Tuesday he has moved NCLT against elder brother Malvinder and ex-Religare chief Sunil Godhwani, while dissociating from his brother as business partner, reports PTI. Shivinder also alleged that collective and ongoing actions of his elder brother and Godhwani led to a systemic undermining of the interests of companies and their shareholders. QuickPicks RCEP talks: India manages a major breakthrough INDIAWILL have a time-frame of over 20 years to eliminate tariff on key items for China, Australia and New Zealand, reports fe Bureau in New Delhi. Members of the 16-nation Regional Comprehensive Economic Partnership (RCEP) agreed to it last week in Singapore, marking a major progress in talks. Such a move is aimed at addressing concerns by the domestic industry that has been opposing the RCEP pact on fears of dumping of cheaper products by China. PAGE 2 Lockheed Martin to produce F-16 fighter jet wings in India IN A major boost to the 'Make in India' initiative, the wings of Lockheed Martin's F-16 fighter jets will be produced in India, the American security and aerospace giant announced on Tuesday, reports PTI. US-based Lockheed Martin has entered into an agreement with Tata Advanced Systems for the production of the wings. Lockheed officials insisted that the planned F-16 wing production to India is not contingent on India selecting the F-16 for the Indian Air Force. PAGE 6 TCS becomes second firm to hit `8-lakh-crore m-cap mark TATA CONSULTANCY Services on Tuesday became the second Indian company to attain a market valuation of over `8 lakh crore following a surge in its share price, reports PTI. At the close of trade on Tuesday, TCS' market valuation stood at `8,01,397.36 crore on the BSE. Earlier on August 23, Reliance Industries became the first Indian company to cross the `8-lakh-crore market-capitalisation mark. PAGE 10 tionsecretaryRNChoubeysaid on Tuesday. So far this year, the government has provided `1,630 crore, including supplementary provision of `980 crore in August, to Air India as comparedtotheBudgetestimateof only `650 crore to tide over cash shortage. Rising ATF price has been hurting airlines for over a year. AI’s fuel bill in FY17 was `6,338 crore and could have gone up by 10% in FY18, according to anAI official. RULE ON NRI-RUN FPIs Finmin downplays fears of outflows FE BUREAU New Delhi, September 4 THE FINANCE MINISTRY on Tuesdaysoughttoallayfearsof foreign investors over an April 10 circular of Securities and Exchange Board of India (Sebi) on beneficial ownership of offshore funds, with economic affairs secretary Subhash Chandra Garg saying the regulator’s directive has no immediate implications. Asset Managers Roundtable Of India (AMRI), an investor lobby group, warned onMondaythatSebi’snewKYC norms stipulated in the circular,ifnottweaked,couldleadto as much as $75 billion flowing out of India, hurting the domestic currencyand stocks. Some analysts have said it’s not about disclosure of end beneficiaries but the restrictions the circular imposes on FPIs being managed by nonresident Indians (NRIs) and MAKING IT CLEAR ■ Garg says NRIs are already allowed to invest in Indian securities, with a cap of 5% in single security ■ AMRI has warned Sebi’s circular could lead to $75 billion flowing out of India, hurting rupee and stocks FE BUREAU New Delhi, September 4 QATAR AIRWAYS WILL wait foranother12 months to see if the rules relating to foreign direct investment (FDI) in airlines become more favourable, onlythenwilltheairlinelaunch a subsidiary in the country, group CEO Al Baker said on Tuesday.Hetermedthecurrent FDI rules in the aviation sector as“ambiguous”. “What we are given to understandisthataforeignairline cannot own 100% but a foreignercan.Idon’tknowwhat is the difference between a foreignerand an airline,”he said. Al Baker’s comment comes three months after he had first said that the Gulf carrierwould soon be moving an application tolaunchafull-serviceairlinein India for domestic operations. He said if Qatar Investment Authority(QIA)owns51%and Qatar Airways has 49% in an airline that is not allowed. Continued on Page 2 Retail sale price in Delhi (`/litre) Central excise duty* State VAT/sales tax* (` crore) 83 FE BUREAU New Delhi, September 4 FY15 THE RETAIL PRICES of petrol and diesel may have risen for the tenth consecutive day on Tuesday, but the Centre has no plan to reduce the excise duties on the two auto fuels as it reckons that it can’t afford to miss the fiscal deficit target forthe current financial year. “We already know that there will be a hit on current account. Knowing that we can’t disturb the fiscal deficit, we should rather be fiscally prudent,” a finance ministry official said. Petrol and diesel prices touched fresh highs on Tuesday — `79.31 and `71.34/litre, respectively, in Delhi — as the rupee dipped to a record low of 71.54 against the US dollar, making imports costlier. Petrol price has risen FY16 2,29,019 1,84,091 In India it is around 5% & 12% Receipts from taxes on petroleum products 2,42,691 1,66,378 CIVIL AVIATION SECRETARY RN Choubey said on Tuesday thatthegovernmentwasworking on a relief package for airlines to try and bring down theiroperatingcoststhoughno specific measures were outlinedandnodeadlinespecified. He was responding to observations by Alexandre de Juniac, director-general and CEO of International Air Transport Association (IATA). Juniac said excessiveleviesandcostsbeing borne by airlines,coupled with infrastructure constraints, were limiting growth. Jet fuel accounts for Prices built up by ‘excessive taxes’, says Opposition; can’t afford fiscal slippage when CAD is taking a hit, feels govt FY17 FY18 38,500 by `2.17 per litre since August 16 while diesel rates have climbed by `2.62 — the biggest increase in rates witnessed in any fortnight since the launch of daily price revision in mid-June last year. “Relentless rise in prices of petrol and diesel is not inevitable.Because the price is built up by excessive taxes on petrol and diesel. If taxes are cut, prices will decline signifi- FE BUREAU 10-year bond yield (%) `/$ 8.063 68.00 38,157.92 8.100 68.62 (inverted scale) 7.800 37,500 Aug 3 Sep 4 7.700 7.763 Aug 3 people of Indian origin (PIO) that is troubling the investors. Continued on Page 2 LIC board explores open offer for IDBI stake, Page 2 CONTINUING THE CRACKDOWN onshellcompanies,the government has identified an additional2.25lakhsuchfirms in the current financial year andislikelytostrikeoffaround one lakh of them by mid-September. Last year, the govern- 65 Aug 15, 2018 Sept 4, 2018 Source: PPAC cantly,” former finance ministerPChidambaramhadsaidon Twitter earlier in the day. However, the finance ministry official quoted above added that there were are not many avenues for the government to cut expenditure in order to meet the FY19 fiscal deficit target of 3.3% of the gross domestic product. Continued on Page 2 ● EXPORT CURBS Tomato prices crash in Maha NANDA KASABE Pune, September 4 Continued on Page 2 Aug 3 Sep 4 Over a lakh more to be off-register in H1 ment had struck off over 2.26 lakh shell companies for nonfilingoffinancialstatementsor annual returns for a continuous period of 2 years or more. According to a senior government official,as part of the second drive launched during the current financial year as many as 60,000 companies have already been weeded out 71.34 71 68.72 Continued on Page 2 72.00 ● CRACKDOWN ON SHELL FIRMS SURBHI PRASAD New Delhi, September 4 Diesel of the system. These and another 40,000 chosen for removal from the register of companies under Section 248 of the Companies Act by the end of the first half had failed to file their financial statements or annual returns for FY16 and FY17. 71.00 Sep 4 74 THE SUSPENSION OFtradevia roads between Pakistan and India and the consequent supply glut has sent local tomato prices crashing. Wholesale priceshavecrashedtosome`23/kg at Pimpalgaon Baswant and Lasalgaon, key markets in Maharashtra. Even top quality tomatoes are now being sold at just `6-7 per kg. In Nashik district,thepricescrashedtoathird in just overaweek. Pakistan used to import nearly 50,000 tonnes of tomatoes from India annually and Bangladeshupto35000tonnes. While political tension betweenIndiaandPakistanled to the suspension of exports via land to Pakistan,exports to Bangladesh are hit afterDhaka increased the import duty on agricultural produces to 48%. 71.57 70.00 7.900 38,000 37,000 69.00 8.000 37,556.16 79.31 77.14 *Excise duty receipts constitute over 80% of the total Central taxes from petroleum products, other levies are Customs duty on crude oil, service tax, royalty and cess; VAT constitutes 88% of states’ taxes on petroleum products The benchmark yield soared to 8.063% as investors feared the RBI would hike policy rates as early as October. Stocks fell as the currency hit a new low of 71.565. 39,000 77 Petrol DIESEL Yield soars, stocks fall and rupee at new low S&P BSE Sensex 80 68 PETROL MACRO MESS AD REVENUES With only a slight lead, Google races to parry Facebook’s India rise REUTERS San Francisco/Mumbai, September 4 GOOGLE RETAINS ONLY a slightleadoverFacebookinthe competition for digital ad dollarsinthecrucialIndiamarket, sources familiar with the figures say, even though the search giant has been in the country far longer and has avoided the controversies that have dogged its rival. Facebook’s success has shaken Alphabet’s Google, led byanIndian-bornCEO,Sundar Pichai,who has made developing markets a priority. Google officials in India earlier this year were alarmed to learn that Facebook was likely to generate about $980 million in revenue in the country in 2018, according to one of the sources. Google’s India revenues reached $1 billion only last year. ILLUSTRATION: SHYAM MANISHA SINGHAL New Delhi, September 4 In Apr-June Jet Airways CAPA net loss estimates stood at combined `1,323 cr, losses of Indigo's domestic airlines in the profit was down current fiscal 97% to be around Qatar Airways awaits clarity on FDI before India venture 1,78,591 1,42,848 To IATA chief’s concern, civil aviation secy says financial relief package in works Revenue-wary govt rules out excise cuts on petrol, diesel 1,37,157 ‘Govt levies choking airlines’ PRUDENT PATH 99,184 TURBULENCE Facebook and Google declined to comment on Indian revenue figures or the competition between the two companies. Google is now pushing back, attempting to lure customers with better ad-buying tools and more localised services. The revamped strategy mirrors initiatives that have succeededinboostingthetime Indian consumers spend with Google services. The battle in India reflects an epic challenge forGoogle in developing markets around theworldthatarecrucialtothe company’s long-term growth – many consumers in those country’s are gravitating to Facebook and it’s siblings, Instagram and WhatsApp, at the expense of Google search and YouTube, and advertising dollars are quick to follow. Continued on Page 2
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