OPINION, P6 ECONOMY, P2 ASHOK GULATI & SHWETA SAINI Direct income support for farmers better than MSP,loan waivers INTERNATIONAL, P4 SUNIL JAIN GAME-CHANGER EXIT WOUNDS UP’s cow cess is proof of havoc wrought by gaurakshaks and BJP’s cattle trading rules Jaitley: Aadhaar savings can fund 3 schemes the size of Ayushman Bharat PM May says if Brexit deal is rejected, UK will be in uncharted territory LUCKNOW, MONDAY, JANUARY 7, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XII NO. 49, 18 PAGES, `6.00 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 INSOLVENCY LAW Operational creditors to get more teeth Making them part of CoC, granting voting rights, IN THE NEWS provisions to Oil block auction: secure their Launch of second financial interest, among options, to round today empower them AFTER MONTHS OF delay, India will on Monday launch the second auction of 14 blocks for prospecting of oil and gas in an attempt to raise domestic output to cut imports, reports PTI. The Open Acreage Licensing Policy bid round-II has 14 blocks measuring 29,333 sq kilometres in aggregrate area on offer. GST panel nod to Kerala levying 1% ‘calamity cess’ A MINISTERIAL PANEL on Sunday approved the levy of 1% 'calamity cess' by Kerala for two years to fund rehabilitation work in the state hit by floods, reports PTI. The goods and services, which will attract the 1% cess, would be decided by Kerala. BANIKINKAR PATTANAYAK New Delhi, January 6 OPERATIONAL CREDITORS (OCS), mostly MSMEs, may soonceasetogetshortshriftby the financial creditors, their mightier counterparts. The government is set to equip the OCs with more power under the Insolvency and Bankruptcy Code (IBC). Sources told FE that the plans include according voting rights to OCs like raw material suppliers in proportion to their claims from the defaulter (as admittedbytheNCLT)andmakingthempartofthecommittee of creditors (CoC). Also on the anvil are certain safeguards for them to receive proceeds as stressedfirmsgoforliquidation. Currently, only financial creditorsarepartoftheCoCthat decidesonaresolutionplanand FE SPECIALS GETTING A LEG-UP `2,015 crore S RAMADORAI former chairman, TCS Instances where OCs fought for rights ■ Binani Cement NCLAT ruled that OCs can't be discriminated against in insolvency proceedings. This led to UltraTech Cement's late bid for Binani Cement getting approval over that of the already-declared highest bidder Dalmia Bharat. The SC later upheld NCLAT verdict. selectsthewinningbidder.Also, as OCs are typically unsecured and placed behind financial creditors (who account for a largeshareofthedefaultclaims) togetliquidationproceeds,they practicallyendupgettingnothing in most cases. While financial creditors will still call the shot in the CoC ■ Bhushan Steel L&T had to move NCLT/NCLAT to recover `900 crore. Its plea for higher priority for debt settlement was, however, rejected by NCLAT, paving the way for Tata Steel's acquisition of Bhushan Steel in most cases due to theiroverwhelmingly large share in default amounts,voting rights to operational creditors will enhancetheirrole,especiallyin cases of small stressed companies that rely heavily on commodity supplies. Continued on Page 2 FUNDRAISING Urban bodies’ finances likely to get big push Estimated resource needs for urban infrastructure services in FY16-FY31 period India's municipal bond market grossly underdeveloped (Bond issued, $ bn, 2018) 2,058 3,800 ■ INFRASTRUCTURE, P11 835 ■ BRANDWAGON, P10 When meals mean business Subscription-based meal delivery services are trying to get their foot in the door amid competition from food aggregators ■ eFE, P8 Flaunting style & tech on the wrist The future of wearables will be individualised, data-driven and analytics-intensive devices ■ PERSONAL FINANCE, P9 Investment strategy for election year Markets could be volatile. Your investment behaviour with respect to cash flows and asset allocation is important now ■ SCIENCE & TECH, P12 Tempting the Whole Foods crowd A GM plant that traps common carcinogens in the air could help change the negative opinion about gene modification Bhubaneswar 500 500 South Delhi Lucknow 200 200 Surat 40 ^Of 2017, ^of FY15 Current pipeline of municipal bonds (` cr) Ghaziabad Municipal bonds US 1.9 0.3 Japan^^ Brazil China^ Canada India PRASANTA SAHU New Delhi, January 6 ASURBANINFRASTRUCTURE services are estimated to need investments of `40 lakh crore by FY31, the NITI Aayog is preparing a blueprint for the resource-scarce urban local bodies to live up to the task of raisingthesefunds.Theproposalsunderconsiderationinclude raising the taxes that have not been subsumed in the goods and services tax (GST) and earmarking a certain part of the GST proceeds for these organisations, the third administrativestratum,butthemostproximate to the citydwellers. Accordingtoofficialsources, these urban bodies may also be nudgedtotakestepstoincrease their own revenue by tapping othersourcesliketradelicences, Jabalpur 200 100 *Of about 8,000 cities/towns; about half this amount is additionally needed for maintenance of the facilities taxesonentertainment,mobile towers,solidwasteusercharges, watercharges and parking fees, etc,withoutfail.Puttinginplace efficient water-metering systems for residences (which willreducepilferagethatisreckonedtobeabove50%inmajorityofthecities/towns)isseento be a revenue stream that holds great potential. Sources said the think-tank has identified non-devolution of relevant taxation powers to the urban bodies by the state governments as a major problem, despite clear Constitutional mandate in this regard. Currently, roughly 60% of therevenueofmunicipalbodies inthecountry—about8,000in number — comes from devolution bythe Centre and states. Continued on Page 2 700 MHz SPECTRUM Rlys, DoT on collision course over reservation KIRAN RATHEE & SAURABH KUMAR New Delhi, January 6 THE DEPARTMENT OF telecommunications and railways are on a collision course over reservation of 10 MHz, premium 4G spectrum in the 700 MHz band,for the latter. The railways want 10 MHz spectrum for their internal communications but the DoT feels that itwon’t be prudent to give the same for free as it is worth`65,680crore(according to Trai’s recommended reserve price). DoT is also citing the Supreme Court ruling of 2012 NOT ON TRACK ■ DoT not in favour of giving spectrum without auctions ■ Cites SC's 2012 order on allocation of natural resources ■ Rlys says it is not for commercial purposes so there should be no charge ■ Telecom industry says any further fragmentation will leave nothing for it which mandates that natural resources should be allocated onlythrough auctions. SHARAD SHARMA founder, iSpirt R SHANKAR RAMAN, chief financial officer, Larsen & Toubro FE BUREAU New Delhi, January 6 `40 lakh cr* The Krishnapatnam port in Nellore district of Andhra has emerged as the largest transshipment port on the east coast LEO PURI MD, UTI Asset Management Recovery by financial creditors from the 32 cases, or 55% of their claims Of 1,198 cases under IBC up to Sept 30, 2018 was initiated by operational creditors, against 52% by financial creditors/ corporate debtors A place in the sun THE JURY IS IN, COUNTDOWN BEGINS `47,768 crore Recovery by operational creditors from 32 cases that were resolved by end-June 2018, or 61% of their claims 48% FE BEST BANKS However, sources said that the finance ministryhas given a green signal to the proposal as it is not forcommercial purposes.The railwayswant to use the spectrum fortheirinternal communications and enhancing the security in trains. The airwaves would be utilised for live feed of CCTVs, communications between officials and tracking the trains in real time. “The spectrum will be utilised only for internal communications and no commercial use will be undertaken,” sources said. In this regard, a draft Cabinet note was also prepared by the railways a fewmonths ago. Continued on Page 2 INDIA’S BANKS TODAY face many challenges among them an increasingly digitised environmentandmoredemanding and aspirational customers. Thanks to digitisiation, the competitionamongintermediaries is now more keen than ever. While some have taken theirtimetocomeupthecurve, others have grasped the opportunity quickly. These are the lenders that quicklytailor their productsandprocessestomeet the needs of their customers. Indeed,theFEBestBanksjury’s task is becoming harder by the day as banks turn out one winning products afteranother. But chairman S Ramadorai, former chairman Tata Consultancy Services, and his team — theFEBestBanksjuryfor201617—puttheirmindstothetask spending an afternoon checking out not only the performances of the banks, NBFCs and fintechs but also various products and services on offer. Continued on Page 2 B MAHAPATRA former executive director, RBI BANKER OFTHE YEAR Romesh Sobti, IndusInd Bank WINNER Nationalised Bank Kishor Kharat, Indian Bank Private Sector Bank Aditya Puri, HDFC Bank Foreign Bank Pramit Jhaveri, Citi India RUNNER-UP Private Sector Bank C S Ghosh, Bandhan Bank WINNER: NBFC Rajeev Jain, Bajaj Finance RUNNER-UP: NBFC Sarada Kumar Hota, CanFin Homes WINNER BEST DIGITAL BANK Rajiv Anand, Axis Bank SAVING PRODUCT Virat Diwanji, KMB HOME LOAN PRODUCT Ashok Kumar Garg, BoB FINTECH Sanjiv Singhal, Scripbox Abhishek Agarwal, CreditVidya Yashish Dahiya, PolicyBazaar.com
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