OPINION, P8 M&M, P10 BASEL-III REGULATIONS EDITORIAL Unions push govt against commercial coal mining, trip up reforms Banks must reclassify exposure to IL&FS as NPAs and ask it sell its assets INTERNATIONAL, P14 STAFF DEPARTURES Rana Kapoor-led Yes Bank to raise `3,042 cr via bonds Pichai-led Google's China plan spurs inquiry from US lawmakers NEW DELHI, SATURDAY, SEPTEMBER 15, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 169, 18 PAGES, `10.00 (PATNA `9.00, RAIPUR `10.00) 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: 38,090.64 ▲ 372.68 NIFTY: 11,515.20 ▲ 145.30 NIKKEI 225: 23,094.67 ▲ 273.35 HANG SENG: 27,286.41 ▲ 271.92 `/$: 71.86 ▲ 0.33 `/€: 84.04 ▼ 0.40 BRENT: $78.10 ▼ $0.08 GOLD: `30,558.00 ▲▼ `80.00 REVIEW OF ECONOMY Govt announces steps to control CAD IN THE NEWS Markets rally on macro data, rupee recovery THE BENCHMARK Sensex spurted around 373 points on Friday to reclaim the 38,000 mark as better-thanexpected macro data and further recovery in the rupee triggered widespread buying, reports PTI. The NSE Nifty too breached the 11,500 level with a jump of 145.30 points. All sectoral indices ended in the green, led by realty, power, consumer durables and metals. Fuel rates scale new highs PETROLAND diesel prices on Friday scaled new highs as rates were raised on account of the rupee depreciating and a rise in international oil rates, reports PTI. While the petrol price was hiked by 28 paise a litre, that for diesel rose by 22 paise, according to a price notification of state-owned oil marketing companies. Petrol and diesel now cost `81.28 and `73.30 a litre in Delhi, respectively. NRI bonds to stem rupee’s fall, curbs on non-essential imports, review of projects on agenda FE BUREAU New Delhi, September 14 ASTHEPRIMEMinister’sOffice (PMO) and finance ministry heldbusypreparatorymeetings on Friday ahead of the weekend’scrucialreviewoftheeconomy by Prime Minister Narendra Modi, it was clear that the governmentwouldavoidbeing seenjitteryovertherecentslide of the rupee or the pressure on the twin deficits. Rather than anyhaphazard,overblownreactiontothecurrencyvolatility— even as the rupee has turned out to be Asia’s weakest currency in 2018, economists reckon that it has undergone only a natural correction after being overvalued for long — what could come out of Saturday’s meeting is a rejigging of the government’s expenditure priorities and a calibrated plan to check import surges in certain items to rein in the current account deficit (CAD). Official sources maintained that a cut in excise taxes on fuel was not on the agenda, given the need to maintain fiscal produce and keep budget spending strong when elections were around the corner WHAT FINMIN SAYS Manufacturing entities will be allowed to access ECB of up to $50 million for maturity of one year To exempt masala bonds issued in FY19 from withholding tax Items identified where exports can be promoted and curb non-essential imports All measures announced on Friday will have an impact of $8-10 billion and a capacity overhang that continued to hamper privatesector investments. Theprogressoflargeprojects launched by the NDA government would be critically reviewed in the meeting, the sources added. According to a source, the PMO had sought “status reports on completed, commissioned, under-implementation projects”among the onesinauguratedorfoundation stoneslaidbythePM.Itsentletters in this regard to Rail Board, theministriesofroadtransport andhighways,power,steel,shipping,housingandurbanaffairs, food processing industries,and health and familywelfare. Reserve Bank of India (RBI) governor Urjit Patel has also beencalledtothecapitalforthe reviewsessionwhichwouldalso be attended by the NITI Aayog and the prime minister’s economic advisory council, apart fromfinanceministerArunJaitley and senior finance ministry officials. Options such as NRI bonds to prop up the rupee are also under consideration and a conditional go-ahead may be given to the RBI in this regard. However, whether and when these would be exercised would be decided after gauging the market, the sources added. Of the top ten ministries in terms of spending capacity,six including rural development, roads and highways, agriculture and railways registered handsome increases in expenditure in the first quarter of FY19, reflecting the Narendra Modi government’s priority areasaheadofthegeneralelections next year. ISRO SPY CASE ● SIBLING FEUD NCLT allows Shivinder to withdraw petition SC awards `50 lakh damages to ex-scientist Narayanan Says ‘arrested unnecessarily, harassed and subjected to mental cruelty’ FE BUREAU New Delhi, September 14 THE NATIONAL COMPANY Law Tribunal (NCLT) on Friday allowed former Fortis Healthcare promoter Shivinder Singh towithdrawhispetitionagainst elder brother Malvinder Singh andex-ReligarechiefSunilGodhwani. However,a counsel for ReligareEnterprises,whichwasalso a respondent in the case, said there were allegations against thecompanyofsiphoningoffof fundsbytheSinghbrothers.“We want to recover that amount from them,” said seniorcounsel Abhinav Vashistha appearing for Religare. On this, the NCLT said,“If you wish to initiate any proceedings, move a separate application.” “TheNCLTonFridaygranted my request to withdraw the petition of oppression and mismanagementIhadfiledagainst mybrotherMalvinder,andGodhwani,” Shivinder Singh said in a statement. FE BUREAU New Delhi, September 14 THE SUPREME COURT on Friday asked the Kerala government to pay`50 lakh compensationtoaformerIndianSpace Research Organisation (Isro) scientist and also ordered a probe into the role of senior police officers involved in framing him in the “Isro espionage scandal” that broke out in 1994 and shook the state and national politics, but was later proven to be fabricated and false. Holding that“reputation of We hate traffic jams, but are oddly tolerant of them To see traffic jams purely as a waste of time is to miss something. To economists, every hour spent in traffic is an hour not spent being productive ■ Motobahn, P13 June 27: The state government issues a notification for reinvestigation by Kerala police Jan- Nov 1994: Two FIRs filed against two Maldivian nationals, probe taken over by SIT headed by Kerala DIG, crime 1998: SC quashes notification, says it was against good governance; all accused freed ofcharges; grants `1 lakh compensation to each 2001 QuickPicks M&M aims to go carbonneutral by 2040 MAHINDRA AND Mahindra (M&M) on Friday said it aims to become a carbon-neutral company by 2040 with a focus on energy efficiency and usage of renewable power, reports PTI. The company will work on its carbon neutrality commitment with international non-profit organisation Environmental Defense Fund (EDF), M&M said in a statement. M&M will leverage the latest technological advances and its recently-announced Carbon Price to work towards being carbon-neutral by 2040, Mahindra Group chairman Anand Mahindra said. Paddy sowing up 2.27% so far; area up in Karnataka, others AREA SOWN to paddy, the main kharif crop, has gone up by 2.27% to 383.34 lakh hectares so far in the 2018-19 kharif season, on higher acreage in states like Karnataka, Telangana and Tamil Nadu, according to agriculture ministry data released on Friday, reports PTI. Paddy acreage stood at 374.81 lakh hectares in the year-ago period. Kharif sowing begins with the onset of the southwest monsoon from June and harvesting starts from October. Higher coverage of paddy area has been reported in Telangana, Karnataka, West Bengal, MP, Punjab and Haryana, among others. PAGE 12 IL&FS’ largest shareholder LIC may throw it a lifeline With one default behind it, the beleaguered Infrastructure Leasing & Financial Services (IL&FS) will be looking for a lifeline from its shareholders at the board meeting on Saturday, reports fe Bureau in Mumbai. The company's largest shareholder, Life Insurance Corporation of India (LIC), is understood to be considering a loan to the defaulting Mumbai-based firm. However, only if there is a convincing turnaround strategy will LIC throw it a lifeline, sources said. Shareholders will ask IL&FS for a business plan outlining the extent of internal accruals, sources said . PAGE 6 2012 1996 Nov: Isro scientists D Sasikumaran and S Nambi Narayanan, two others arrested on charges of spying; probe transferred to CBI Continued on Page 2 Nov 27: HC upholds notification to reinvestigate 1998 1994 2015 2001: NHRC orders `10 lakh compensation against `1 crore as sought by Narayanan Sep 7, 2012: HC asks the Kerala govt to pay `10 lakhwithin threeweeks May 2015: HC refuses to direct state govt to take any disciplinary action against the erring police officers after 15 years ● NOTE BAN CMIE’s Vyas says 3.5 m jobs lost, PMEAC’s Bhalla demurs FE BUREAU New Delhi, September 14 Continued on Page 2 India’s Iran oil buys to almost halve behind top buyer China, does notrecognisethereimposedUS sanctions,butwinningawaiver INDIAN REFINERS WILL cut from the restrictions is a must their monthly crude loadings for New Delhi to protect its from Iran for September and widerexposuretotheUSfinanOctoberbynearlyhalffromear- cial system.India’s oil ministry lierthisyearasNewDelhiworks in June told refiners to prepare to win waivers on the oil export for a“drastic reduction or zero” sanctions Washingimports from Iran ton plans to reimfrom November. pose on Tehran in “Some refiners November. have either already India’s loadings exhausted or frontfrom Iran for this loaded their term India lifted about monthandnextwill contract to a large 658,000 bpd drop to less than 12 extent,whichallows from Iran in Aprilmillionbarrelseach, them the flexibility August afterpurchasesover to go to zero if April-August had required, or until September, been boosted in clarity on the October average anticipation of the waivers emerge,” seen at 360,000reductions. Amrita Sen,chief oil 370,000 bpd The United analyst at Energy States is renewing Aspect,toldReuters. sanctions on Iran after withWashington will consider drawing from a nuclear deal waivers for Iranian oil buyers forgedin2015betweenTehran such as India but they must and world powers.Washington eventually halt crude imports reimposedsomeofthefinancial from Tehran, US secretary of sanctions from August 6,while state Mike Pompeo said last thoseaffectingIran’spetroleum week in New Delhi after a sectorwillcomeintoforcefrom meeting of high level officials. November4. India, Iran’s No. 2 oil client Continued on Page 2 Continued on Page 2 A SCANDAL THAT NEVER WAS May 2, 1996: Kerala court accepts CBI report that charges against scientists false.All accused discharged US SANCTIONS Special Feature an individual is an insegregable facet of his right to life with dignity”, a three-judge bench led by Chief Justice Dipak Misra said that the 76year-old Nambi Narayanan was “arrested unnecessarily, harassed and subjected to mental cruelty”. The court asked the state government to pay the compensation within eight weeks. REUTERS New Delhi, September 14 A dose of spirituality Prime Minister Narendra Modi exchanges greetings with Syedna Mufaddal Saifuddin, the spiritual head of the Dawoodi Bohra community, during an Ashura Mubarak programme in Indore on Friday. Report on Page 2 Core issue WPI inflation eases to 4-month low Disinflation in food items drove WPI inflation down to a four-month low of 4.53% in August. However, the risks to CPI inflation outlook from the rupee's fall, high crude prices and MSPs may still bring another rate hike in October. FE BUREAU 6 (% rise, y-o-y) CPI inflation 4.53 5 4 2.26 3 WPI inflation 3.69 2 1 2.18 0 May 2017 Aug 2018 DEMONETISATION MAY HAVE caused job losses of at least 3.5 million and the damaging impactonlabourforcewaseven starker, Centre for Monitoring Indian Economy (CMIE) chief executive Mahesh Vyas said on Friday,citingaCMIEsurveythat coversaround1.72lakhhouseholds across the country. The note ban also hit the participation of young people in the labour force and hurt women more than men,he added. Prime Minister’s Economic Advisory Council member Surjit Bhalla,however,said according to the CMIE data,the share of women in the labour market is just 10%.This is too abysmal to believe and compared with 25%peggedbypreviousNationalSampleSurveyOffice(NSSO) surveys, hinting that the CMIE data couldn’t be solely relied upon while gauging the true state of the employment in the country. He cautioned against over-interpretation of the employmentscenario,basedon incomplete and partial data. Participating in a discussion on employment in India organised at the India International Centre on Friday, Vyas said the survey of people employed in the four months before and after demonetisation in November 2016 suggested job losses of 3.5 million following the note ban. Continued on Page 2 END OF THE ROAD After seven decades,Volkswagen decides to squish its iconic Beetle BLOOMBERG New York/Frankfurt/ Southfield, Michigan, September 14 HERBIE IS GOING on hiatus. Volkswagen is ending worldwide production of its iconic Beetle, the model once so popular in North America that it prompted the German automakertobuilditsfirstfactory on the continent in the 1960s.The last one will roll off the line from the company’s factory in the state of Puebla, Mexico,in July 2019. VW had been pulling the Beetle from select markets as part of a broader effort by the German giant to rein in its bloated product range, which spans more than 300 different vehicles and variants, including heavy trucks, motorbikes and passenger cars. Cutting back on product complexity is one of the key ways the company is trimming costs and gettingleanerinthewakeofits diesel emissions scandal. On Friday, Handelsblatt reported VW also plans to halt production for a week next month of the Golf at its huge factory inWolfsburg,Germany. The model’swoes include more complex emission tests and planstoreplacethecurrentversion of the hatchback. Chief executive officer Herbert Diess has been a driving force behind this slimming down since he started leading themainVWcarbrandin2015. Demand for the Beetle and other hatchbacks like the Golf hascomeunderpressureascustomer appetite has shifted toward sport utilityvehicles. “The market is moving on,” said John Wolkonowicz, an independent auto analyst and industry historian in Boston. “Thepeoplewhowantedthem, mostly baby boomer women, bought them, enjoyed them and they’re on to something else. Younger people don’t knowwhat the point is.” The Beetle played the starring role of Herbie in the 1968 Disneyfilm,“TheLoveBug”.The sentient race car sporting red, white and blue racing stripes fromthefronttothebackbumperheadlinedseveralfollow-up films and a television series. Continued on Page 2
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