OPINION, P8 COMPANIES, P6 INDRANIL SEN GUPTA NRI bonds and RBI OMOs are key to stabilising the ` INTERNATIONAL, P14 EDITORIAL INTELLECTUAL PROPERTY STATE OF THE UNION ADDRESS Poll sops like MSPscheme & ethanol prices OK for now, need genuine reforms US to probe M&M over Fiat Chrysler Jeep complaint Juncker calls on EU to flex muscle as US retreats MUMBAI, THURSDAY, SEPTEMBER 13, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 218, 18 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: 37,717.96 ▲ 304.83 NIFTY: 11,369.90 ▲ 82.40 NIKKEI 225: 22,604.61 ▼ 60.08 HANG SENG: 26,345.04 ▼ 77.51 `/$: 72.19 ▲ 0.51 `/€: 83.64 ▲ 0.57 BRENT: $79.48 ▲ $0.42 GOLD: `30,478.00 ▼ `127.00 CABINET BRIEFING GOVT SIGNALS POLL SEASON Farmers get enhanced crop price support Farmers benefited from procurement at MSPs Oilseeds Pulses Wheat Paddy DAILY CHANGE in fuel prices was an "economic policy decision" of the central government and the courts must remain away from it, the Delhi High Court said on Wednesday, reports PTI. A bench of chief justice Rajendra Menon and justice VK Rao made it clear it was not inclined to interfere with the government's decision, saying "there are larger economic issues" involved. 95,90,119 74,23,783 IN A SLEW of decisions on Wednesday, the Union Cabinet sought to help farmers with increased assurance on the minimum support prices (MSPs), reduce the pains to sugar industry and cane farmersowingtosurplusproduction of the sweetener,cut costlyedible oil imports and spur higher recoveryfromageinghydrocarbonfields.Whileitsoundedthe poll bugle with the price support package forfarmers,other decisionsincluding100%electrification of railway lines by FY22 seemed on economic rationale, although some analysts said the sharp hikes in ethanolpricescouldhaveunin- Bank deposits grow 8.9%, credit up 13.49% BANK DEPOSITS grew 8.9% year-on-year to `116.45 lakh crore, while bank credit rose by 13.49% to `87,89,259 crore in the fortnight to August 31, Reserve Bank of India data showed, reports fe Bureau in Mumbai. Special Features Our partners make us stronger in the market Microsoft India’s Rajiv Sodhi says creating an approach of selling with partners not only helps the IT giant expand capacity but makes it stronger in the market ■ eFE, P13 Poco F1: Can this new Xiaomi sub-brand challenge OnePlus 6? Poco is trying to carve a niche in the `20,000-30,000 price range where the options can often vary in terms of performance, camera and battery life. And Poco F1 may just help it do it. ■ Gadgets, P13 QuickPicks Second round of DSF bids: DGH hopes for $1.2-bn investments THE DIRECTORATE General of Hydrocarbons (DGH) is hopeful of achieving $1.2 billion worth of investments after the second round of bidding of Discovered Small Field (DSF) is completed, reports fe Bureau in Hyderabad. The government launched the Bid Round II under DSF for international competitive bidding on August 9 which opens new opportunity for new players to enter the sector with minimal risk. PAGE 3 Exports rise 19.21% in August; trade deficit slips to $17.4 bn INDIA'S EXPORTS grew by 19.21% to $27.84 billion in August on account of healthy growth in petroleum shipments, reports PTI. Merchandise imports too rose by 25.41% in August to $45.24 billion due to the rising crude oil prices, leaving a trade deficit of $17.4 billion. In July, trade deficit soared to a nearfive-year high of $18.02 billion. During April-August this fiscal, exports recorded a growth of 16.13%. Corp governance, Kochhar probe dominate ICICI Bank AGM ICICI BANK held its 24th annual general meeting in Vadodara on Wednesday after it was postponed by nearly a month over corporate governance issues and allegations of regulatory lapses involving its managing director and CEO Chanda Kochhar, reports fe Bureau in Vadodara. The AGM left shareholders anxious as they sought clarity on both the contentious issues. PAGE 10 6,20,125 12,23,646 31,87,229 67,85,739 Petroleum minister Dharmendra Pradhan, railway minister Piyush Goyal and agriculture minister Radha Mohan Singh in New Delhi on Wednesday. EXPRESS PHOTO: RENUKA PURI 2017-18 2016-17 FE BUREAU New Delhi, September 12 PRESS TRUST OF INDIA London, September 12 11,816,739 1,12,030 7,540 20,46,766 Up to 25% hike in ethanol prices to shrink OMC margins, boost mills tended negative effect on oil companies. Rollingoutapackage—PMAASHA — of price deficiency support schemes for agricultural crops, the government announced an extra Budget outlayofover`15,000crorefor procurement of non-National Food Security Act (NFSA) crops during the June 2018-July 2019cropyear.Italsoenhanced the government guarantee for Nafed to undertake procurement of pulses and oilseeds by `16,550croreto`45,450crore this fiscal. Continued on Page 2 Cabinet approves 100% electrification of railway lines: P2 Sops for oil producers for higher recovery: P2 FE BUREAU New Delhi, September 12 INARELIEF to the sugarindustry struggling to cope with exorbitant state-fixed cane prices,the Cabinet Committee on Economic Affairs (CCEA) on Wednesdaydecidedtoraisethe rate of ethanol produced directly from sugarcane juice by 25% from the rate announced in June, for blending with petrol. The move is aimed at incentivising mills to cut surplus sugar production thatwouldpropuppricesofthe sweetener,andproportionately TREND REVERSES Rupee, bond yields get some succour FE BUREAU Mumbai, September 12 THE MARKETS WERE comforted by the possibility the government would in coordination with the Reserve Bank ofIndia(RBI)takeaseriesoffiscal and monetary measures to ease the pressure on the currency and arrest the rise in bond yields.The Prime Minister is expected be holding meetingswithhisadvisersover the weekend. The yield on the benchmark bond fell by5 basis points on Wednesday, closing at 8.13%. The rupee on Wednesday recovered by 73 paise from new intra-day lows before ending the session at 72.1850 to the dollar, up 51 paise over Tuesday’s close.The rupeehasnowlost11.5%since `/$ 68.00 January.The Sensex opened in the red but regained some groundandendedat37717.96 points, up nearly 305 points overTuesday's close. Treasurers are anxious about the sharp jump in yields on commercial paper, certificates of deposit and corporate bonds; in September so far they have risen by 25-30 basis points. Banks are worried about the losses on their bond portfolios. The markets are concernedabouttheinflationary impact of the weakening currencyortheimportedinflation. They believe the RBI will hike the key policy rate at the nextmonetarypolicymeeting. The central bank raised rates by 25 basis points each at its last two monetarypolicycommittee meetings. Inverted scale 68.57 69.00 70.00 71.00 72.19 72.00 73.00 Mallya: Met FM; FM: Chance RS encounter Says never gave baron appointment since 2014, misused MP’s privilege Package of 3 schemes underfunded, purchase losses could overburden govt IN THE NEWS HC declines to interfere with fuel price issue FIGHTING EXTRADITION July 12, ‘18 Sept 12, ‘18 What new ethanol prices mean for OMCs* `2,489 cr If entire supplies of ethanol are made of C-heavy molasses `540 cr If entire supplies of ethanol are made of B-heavy molasses `918 cr If entire supplies of ethanol are made of cane juice `2,002 cr If 75% of supplies of ethanol are made of C-heavy molasses and 25% of B-heavy molasses (Profit) (Profit) (Loss) (Profit) *Assuming petrol prices stay at `80.73/litre, the same as now, and ethanol demand for blending remains unchanged at 163 crore litres in 2018-19 ethanol year trimmingoilimportsthathave weighedonthecountry’strade balance and the rupee. Similarly,theCCEAhikedthe price of ethanol made of the so- calledB-heavymolassesbyover 11% from the level declared in June to `52.43 perlitre. Continued on Page 2 EMBATTLED LIQUOR TYCOON Vijay Mallya on Wednesdaysaidthathemetthe financeministerbeforeleaving India, a claim denied by Arun Jaitleyas“factuallyfalse”. The 62-year-old former Kingfisher Airline boss, who arrived here to appear before the Westminster Magistrates’ Court in a case regarding his extradition to India to face the trialonfraudandmoney-laundering charges, was asked by reporters if he was “tipped off” to leave the country. “IleftbecauseIhadascheduled meeting in Geneva. I met the finance minister before I left, repeated my offer to settle with the banks. That is the truth,” he responded, without naming the minister. Arun Jaitley, who was the finance ministerin 2016when Mallya left India, denied the liquorbaron’s claim. “Since 2014, I have never given him any appointment to meetmeandthequestionofhis having met me does not arise,” Jaitleysaid in a Facebook post. “The statement is factually false in as much as it does not IIP/CPI FE BUREAU Inflation cools to below RBI's medium-term target Retail inflation fell below the RBI's medium-term target in August, but analysts still don't rule out another hike in interest rates by the central bank in October after raising them at its past two meetings. Factory output grew 6.6% in July versus 6.9% in June. 9 8 7 6 5 4 (% rise, y-o-y) 6.6 IIP 2.18 Jul ‘18 3.69 May ‘17 Aug ‘18 2.9 May ‘17 CPI inflation 3 0 -1 Continued on Page 2 ● SC HEARING Numetal challenges Arcelor’s three-day time frame —HARISH SALVE UP TO `8,831 CRORE Essar Steel in BoI’s NPA sale list SHRITAMA BOSE Mumbai, September 12 BANK OF INDIA (BoI) on Wednesdayputonsaleitsexposures to Essar Steel, Bhushan PowerandSteelandAlokIndustries along with 38 other nonperformingassets(NPAs)worth a total `8,831 crore.Although EssarSteelhasattractedafairly reasonablybidof`42,000crore fromArcelorMittal,BoIisprobablyconcerned about the delay in the resolution process. All three accounts, part of the Reserve Bank of India’s (RBI) first list of large NPAs, remain unresolvedoverayearsincethe HOW THEY COMPARE Plans reflect truth,”he asserted. Jaitley said Mallya “misused” the privilege of being a Rajya Sabha MPto catch him in corridors of Parliament on one occasion while he was walking out of the House to go to his room. He said Mallya,while walking alongside,“uttered a sentencethat‘Iammakinganoffer of settlement’. Having being fully briefed about his ‘bluff offers’,withoutallowinghimto proceed with the conversation, I curtly told him ‘there was no pointtalkingtomeandhemust make offers to his bankers’.” Numetal is not eligible to bid 1 Five largest exposures put on sale by Bank of India Total outstanding (` crore) 2,440.68 Bhushan Power & Steel* Continued on Page 2 Alok Industries 484.03 321.76 *Including foreign currency exposures `399 now `448 @ `299* `458 & `479 `398^ Data offerings 1.5 GB/ 1.4 GB/ 1.4 & 1.5 1.4 GB/ day day GB/day day Validity 84 days 82 days 84 days 70 days *`100 instant discount comprises 2 components ■ `50 instant discount for Jio Prepaid users who have `50 cashback vouchers from Jio on recharging via MyJio App ■ `50 instant cashback when payment is done via PhonePe, inside MyJio App ^Offers the plan for validity of 84 days to select customers back of `100,so effectively the cost comes down to `299.The otherbenefitsofthepack—1.5 GB data per day through the validityperiodof84days—stay the same. Jio’s`399offercoupledwith thedatabenefitwasanywaythe cheapestinthemarketinasegment that attracts the maximum number of subscribers. Now by reducing the price further by `100,incumbents may be forced to revise their offers, thus taking a further hit on their realisations. As a result INDU BHAN New Delhi, September 12 Continued on Page 2 562.2 list was issued amid several rounds of litigation. BoI’sexposuretoEssarSteel, including foreign currency —Justice Nariman sharesofBhartiAirtelandVodafone Idea tanked on Wednesday. While Airtel’s share price closed down 1.3% at `375 on the BSE after falling 2% in intra-day trade, the Idea Cellular stock closed flat at `46.25 aftera fall of nearly3% intra-day. At the moment the offer is for a limited period, that is, it ends on September 21, which means that the recharge needs to be done bythis date. GMR Chhattisgarh Energy AMW Motors Why don't you worry about yourself first EVENASTHE SUPREME Court hears ArcelorMittal’s appeal against the National Company Law Appellate Tribunal (NCLAT) order relating to its eligibility to bid for bankrupt Essar Steel, rival Numetal also onWednesdaymoved the apex court challenging the the three-day time frame given by the appellate tribunal to ArcelorMittal to cure its bid of its infirmity. While the NCLAT had approved the eligibility of the second round of bid put in by Numetal, it said that ArcelorMittal first needed to clear dues of `7,000 crore of firms it was previously associated with by September 11 to be eligible to bid. Numetal’s petition states that there is no such provision under the Insolvency and Bankruptcy Code which allows three days’time time to clear dues by defaulting bidders to become a qualified bidder. According to it, ArcelorMittal should have paid the dues before submitting its bids. Numetal’s appeal will be taken up for hearing on Tuesday. 1,491.66 Essar Steel India* Source: Bank loanstoitsCaymanIslandssubsidiary,stands at `1,492 crore. Continued on Page 2 Jio’s new price points portend fresh pain points for rivals AFTER A GAP of four months, Reliance Jio has once again brought in a disruptive tariff schemewhichwillhurtincumbents Bharti Airtel and Vodafone Idea.To mark the second anniversary of its commercial launch,JioonWednesdayeffectivelyreducedby`100theprice ofitsmostpopularprepaidpack of `399. Consumers who will recharge through PhonePe using MyJio app will get a cash — VIJAY MALLYA BUSINESSMAN IN THE COURT 2 FARE WAR SHUBHRATANDON Mumbai, September 12 I have said before that I am a political football. There is nothing that I can do about it. My conscience is clear
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