OPINION, P6 NATION, P3 INTERNATIONAL, P4 VIVIAN FERNANDES DIGITAL ECONOMY BREXIT WOUNDS CSE is wrong—import of GM food is not unregulated. GEAC is empowered to do this Google CEO Pichai urges India to allow cross-border data flow May wraps 'suicide vest' around UK, says Johnson SHOBHANA SUBRAMANIAN Meaningful capex only by 2020-21, expect slow growth in FY19 NEW DELHI, MONDAY, SEPTEMBER 10, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 164, 14 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 CONTENT TIE-UPS ● MARCH QUARTER Bharti snapping at Reliance Jio’s heels With Netflix tie-up, Airtel ups the ante and is fast catching up with its rival THE RBI IS likely to conduct an open market operation (OMO) purchase this week to infuse liquidity into the banking system, reports PTI. Bankers say the liquidity shortfall at present is pegged at around `60,000 crore, on account of intervention by RBI in the forex market. FE SPECIALS Content tie-ups of leading telcos Live TV content Jio Airtel Zee network Star network Sony network Viacom18 network OTT platforms Hotstar Sony Liv Zee5 Hooq Eros Now Hungama Play ALT Balaji Top video OTT apps Playstore Hotstar, Zee5, JioTV, free Voot, Airtel TV Source: CLSA Continued on Page 2 MATTER OF CONCERN Bank deposit growth lags 10% for a year SHRITAMA BOSE Mumbai, September 9 ■ BRANDWAGON, P10 Nokia: Playing the value game With heavy competition from established brands, can Nokia carve a place for itself once again in India? ■ eFE, P8 Improving hospital health At Apollo Hospitals, tech from Oracle is enriching employee experience and engagement, and improving care quality ■ INVESTOR, P9 August numbers were subdued CIL’s 5MFY19 production/offtake rose 12/9.5%; implied run-rate for meeting FY19F targets is achievable; retain ‘Buy’ ■ INFRASTRUCTURE, P11 Safety and speed the priorities The Indian Railways is aiming to mechanise the track maintenance process on its entire network by 2024 ■ SCIENCE & TECH, P12 Manufacturing in space Optical fibre made in orbit should be better than the terrestrial sort. It will have fewer flaws and longer lengths QuickPicks Sebi may summon Kochhars soon for regulatory lapses probe CAPITAL MARKETS regulator Sebi may soon summon ICICI Bank's on-leave CEO Chanda Kochhar and her husband with regard to a probe into alleged regulatory lapses with regard to his business dealings, officials said on Sunday, reports PTI. Besides, some other top officials of the bank, as also from Videocon, are also likely to be called. PAGE 3 A `10k-cr govt scheme soon to ensure MSP to oilseeds growers THE CENTRE is likely to announce an over `10,000-crore scheme under which oilseeds farmers will be compensated if the rates fall below the MSP, reports PTI. The government has prepared a cabinet note proposing a new mechanism on the lines of Madhya Pradesh's Bhavantar Bhugtan Yojana. PAGE 2 DOUBLE-DIGIT GROWTH IN deposits has eluded banks fora year now with the rate of growth of households savings moderating and more surpluses finding their way into mutual funds. Data released on a fortnightly basis by the Reserve Bank of India (RBI) showed that bank deposits grewbetween 3 and 10%yearon-year (y-o-y) in the fortnights between August 18, 2017 and August 17,2018. The last time the banking system reported a more than 10% growth in deposits was during the fortnight ended August 18, when the increase was 10.3%.At the same time, deposit growth has recovered from the lows of 3-5% y-o-y growth witnessed during November2017-January2018, when the effect of a demonetisation-inducedhighbasecame intoplay.Thelatestfortnightfor which data is available, ended August 17, saw bank deposits growing at 8.3% to `115.11 lakh crore. As a share of gross national disposable income (GNDI) deposits have fallen to 2.9%in2017-18from6.3%in 2016-17. In recent months, bankers, too, have flagged the slow Deposit growth Fortnight ended (%, y-o-y) 20 15.46 15 10 8.31 5 0 Dec 9, ‘16 Aug 17, ‘18 Source: Anand Rathi growth in deposits. Rajnish Kumar, chairman, SBI, said bankslosingsavingstothemarkets is a matter of concern. Addressing an event, Kumar observed that while the previous year had seen current account and savings account (CASA) deposits grow as much as 26%, growth had slipped to 9% in the current year.“Term deposits are not growing as muchandthereasonisthatthe ratesofinterestwhichbanksare today offering on a fixed deposit, when compared to many other competing products, particularly the flow of funds to the mutual fund industry,thegrowthhasslowed down,”Kumarsaid. Continued on Page 2 September 3 were higher by 12% and 15%, respectively, fromthelevelsonApril1,states’ revenue saw a quantum jump. Maharashtra, for instance, collected `5.49 crore more from salestaxonthetwofuelsonSeptember3comparedwithwhatit garnered onApril 1. TRAI HAS IMPOSED penalties on major telecom operators, including Reliance Jio, Bharti Airtel, Vodafone and Idea Cellular (now merged), for slipping on various service quality benchmarks for the March quarter, according to multiple sources. The fines cover various parameters and service areas, and all the operators are in the process of making the payment, sources said. About `34 lakh fine has been imposed forMarch 2018 quarter on Reliance Jio, the aggressive playerwhose offerings since 2016 have shaken the market and triggered a bruising tariff war among operators. The penalty on the Mukesh Ambani-led firm is on account of Trai-defined service quality parameters, including Point of Interconnect congestion, accessibility of call centres or customer care, and percentage of calls answered by operators (voice to voice) in a set timeframe. An e-mail sent to Jio seeking its response on the penalty did not elicit a response. Maintaining its watch on service quality in the sector, the Trai had tightened the rules and asked players to abide byits new quality of service (QoS) benchmarks from October 1, 2017. The latest assessment reflects how the operators have fared between January and March 2018 onTrai’s new service quality benchmarks. Bharti Airtel — which was the largest telecom operator in the country till the merger of Vodafone and Idea Cellular shuffled the pecking order late last month — has been fined to the tune of about `11 lakh for the three months to March, as per sources. Continued on Page 2 Continued on Page 2 New high An attendant updates the fuel prices at a fuel station in Guwahati on Sunday. Petrol and diesel prices hit a new high on Sunday with 12 paise and 10 paise per litre increase. This pushes the petrol rate in Delhi to `80.50 and diesel to `72.61 a litre PTI AD VALOREM TAXES Skyrocketing fuel prices add crores to states’ kitty With VAT levied on ad valorem basis, states’ tax revenue from the two fuels rise in tandem with the increase in their prices Daily gains as extra VAT/sales tax revenue* from costlier petrol and diesel (` crore) Maharashtra Tamil Nadu West Bengal 0.97 5.43 3.69 2.06 *Collections on September 3, 2018 versus April 1, 2018, thanks to 12% and 15% increases in prices to dealers of petrol and diesel respectivel, between the days. Figures are approximations. Source: PPAC, FE Analysis States with highest VAT/sales tax on petrol (%) EVEN AS SKYROCKETING prices of petrol and diesel is a political hot potato, with the Opposition raising the heat on the NDA government at the Centre citing the large component of central taxes in these prices, state governments are quietly making a killing. With the state-level value added tax (VAT)/sales tax being levied on an ad valorem basis, states’taxrevenuefromthetwo fuels rise in tandem with the Sales tax/VAT range among states/UTs Petrol Delhi SAURABH KUMAR & VIKAS SRIVASTAVA New Delhi/Mumbai, September 9 ^Mumbai, Thane & Navi Mumbai Diesel 6-28% 39.12 38.11 35.78 35.77 Maharashtra^ Rest of the state Madhya Pradesh Andhra Pradesh increaseintheirprices.Elevated fuel prices,however,don’t help the Centre much as the excise duties on petrol and diesel, through which it mobilises the bulkoftheindirecttaxrevenue from the oil sector, are specific (quantity-wise). According to an FE analysis, since prices to the dealer (base prices) of petrol and diesel on 6-39% AFTERMATH OF FRAUD PNB recovers record `11,378 cr in 5 months BANIKINKAR PATTANAYAK New Delhi, September 9 FRAUD-HIT PUNJAB National Bank (PNB) recovered a record `11,378 crore from defaulters in the first five months of this fiscal, which is more than the state-runlender’stotalrecovery in the twoyears through 201718,accordingtothebank’sdata. Desperate to return to profitabilityand avoid featuring on the Reserve Bank of India’s watchlistafterrecordlosseslast fiscal, mainly due to the `14,357-crore fraud involving jewellersNiravModiandMehul Choksi, PNB has stepped up efforts to get back money from Key accounts (Recovery amount in ` cr) 3,081 Bhushan Steel Electrosteel 335 Monnet Ispat 110 Shree Sidhbali Ispat 107 GTL Indo Rama Synthetics 84 52 Recoveries (` crore) 5,643 5,618 11,378 2016-17 2017-18 2018-19* defaulters.Ithadmadearecoveryof`5,618croreintheentire 2017-18 and `5,643 crore in the previousyear. ` *April-August While the bank has set up a dedicatedstressedassetvertical thisfiscalanddeployedasmany as 3,000 employees to pursue recovery from various defaulters, its unprecedented efforts were duly bolstered by the emergence of the Insolvency and the BankruptcyCode (IBC). PNB was one of the biggest beneficiariesoftheacquisition of debt-laden Bhushan Steel bytheTatas through the insolvency process, as it received `3,081 crore. It recovered almost `335 crore from Electrosteel and `110 crore from Monnet Ispat through the IBC. Italsogotbackmoneyfroma numberofotheraccountsusing othermodessuchone-timesettlementswith borrowers. Continued on Page 2 HINDI GEC CONTENT Declining ad spends: Star Plus and Colors battle it out for eyeballs ANIRBAN ROY CHOUDHURY Mumbai, September 9 THE HINDI GENERAL entertainment genre — which commands a bulk in terms of both viewership and advertising on TV—maynotbegoingthrough its best times. As per a recent KPMG report, the advertising expenditure (AdEx) on Hindi GECs declined by 9.05% in FY18 over the previous fiscal. The genre accounted for over 30.5% of the total AdEx on TV in FY17, which reduced to 27.7% in FY18. “In general,a big portion of the ad spends now get allocated towards IPL. Last year, rightafterIPLtherewasGST,so the budget reallocation which should have happened towards GECs from sports didn’t happen as the spends were restricted,”says Girish Menon, partner and head— media and entertainment,KPMG India. This isn’t, however, an impediment to investing in big budgetprojects.Colorsrecently announced the launch of Bigg Boss’12th season,for example. Star Plus, the current leader in the urban Hindi speaking market (HSM), is preparing to TOP CHANNELS IN 2018 Number of weeks on top HSM RBI may conduct OMO this week to ease liquidity WHEN IT COMES to content amongst mobile operators, Reliance Jio is the undoubted numero uno. However, in the last one year Bharti Airtel has played the catch-up game well and seems to be snapping at Jio’s heels.In fact,it has beaten the leader in some aspects like its tie-upwith Netflix recently. The two offer the same number of live TV channels on their respective apps — Jio TV andAirtelTV.StarNetworkand Sony Network are available on bothbutZeeisonlyavailableon Airtel andViacom only on Jio. However, when it comes to OTTplatforms,Bhartiscoresas of the eight popular OTTs, six are available onAirtelTVwhile only three are on Jio TV. Sony Liv, Zee5, and Hooq are not available on Jio but are on Airtel. In addition, Airtel has recently tied up with Netflix which is not present on Jio. However,iftheoverallcount of TV channels and movies available are concerned, Jio retains its lead over Airtel.The former has 580 TV channels and110HDchannels.Airtelhas 375liveTVchannels.Onmovie channels though Airtel has recentlyracedpastJiobyhaving alibraryof10,000moviescom- HSM Urban RELIANCE RETAIL HAS purchased a 16.31% stake in readymade garment wholesaler and retailer Genesis Colors (GCL) for `34.80 crore, reports PTI. Reliance Retail Ventures (RRVL) is a subsidiary of RIL. The stake buy by the group in GCL is in addition to the 49.46% stake already held by Reliance Brands, a subsidiary of RRVL. RISHI RAJ New Delhi, September 9 PRESS TRUST OF INDIA New Delhi, September 9 HSM Rural IN THE NEWS Reliance Retail buys 16.31% in Genesis Colors pared to 6,000 movies on offeron Jio. Analysts said in the last one year Bharti has focused big time on developing content partnerships and this reflects in its data traffic and rise in 3G/4G subscribers. Average monthlydatausageatBhartiis now at 8GB, which is up three timesyear-on-yearbasis.However, here it is still behind Jio where the average monthly data consumption is at 10GB. Similarly, its 3G/4G subscriber base at 85 million is up 73% year-on-year. It has also helped it lower subscriber churn at 2%, which is nearly halfofwhatitwaslastyearat end of June quarter. Since Jio is a fully 4G network, its entire 215 million users are 4G subscribers so it will continue to haveanedgeoverBharti for many more years. “We believe competition in the mobile space is set to move beyondtariffsandadding new use cases for data like content will become increasingly important to boostbothdataadoptionand usage which in turn will drive Arpufortelcos,”arecentnoteby brokerage firm CLSAobserved. Trai slaps fine on Jio, Airtel, others for not meeting QoS norms 26 6 1 1 22 6 4 2 (Up to week 34) 34 Source: BARC India launch the sequel of the Balaji Telefilms-backed Kasautii Zindagii Kay. ZeeTV’s Kumkum Bhagya and its spin off Kundali Bhagyaarekeepingthechannel in the running aswell. StarPlus’reign overthe top slot has been consistent for the last four weeks, prior to which Colors was leading the chartsintermsofmarket share in 2018 forthe bulk of theyearso far.ZeeTV,in the meantime,also had its runatthetopslotforHindi GECs for six weeks, as per BARCIndiadata.Outofthe 34 weeks gone past thus far in 2018, Colors held the top slot for 22 weeks in urban HSM. While many attribute Colors’ performance to the current top show Naagin (3), Viacom18 group COO Raj Nayak has a different spin to it.“Yes, Naagin is one of our biggest shows, but to stay at number one, we need a healthy mix in programming.”And to get this mix right,an expensive proposition like Bigg Boss hosted by actor Salman Khan is needed for Colors,feels Nayak. Continued on Page 2
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.