OPINION, P8 ECONOMY, P2 EDITORIAL CAG did well to criticise Centre’s offbudget financing INTERNATIONAL, P14 SHWETA SAINI PANELSPEAK EYE ON CHINA Direct Income Transfer to farmers must only target the vulnerable agri-households RBI accountable to govt, says former governor Jalan Diess-led Volkswagen spearheads $300-bn global e-car drive PUNE, FRIDAY, JANUARY 11, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.IX NO. 259, 18 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 36,106.50 ▼ 106.41 NIFTY: 10,821.60 ▼ 33.55 NIKKEI 225: 20,163.80 ▼ 263.26 HANG SENG: 26,521.43 ▲ 59.11 `/$: 70.41 ▲ 0.06 `/€: 81.21 ▼ 0.52 BRENT: $60.92 ▼ $0.52 GOLD: `32,116 ▲ `253 FE BEST BANKS ‘Don’t allow litigation to kill IBC’s spirit’ SOPS GALORE Big relief for MSMEs as GST ambit shrinks FE BUREAU New Delhi, January 10 BRACING ITSELF FOR the general elections,the Narendra Modigovernmentisshowering goodies on the micro, small and medium enterprises (MSMEs)andsmalltradersthat have suffered under the note ban and a hastilyimplemented GST. Over 20 lakh GST-registrant businesses dealing in goods have now got the option tomoveoutofthetax’sambitas the GST Council on Thursday raised the aggregate turnover thresholdforexemptionto`40 lakhfromthepresent`20lakh. Also, a few lakh more taxpayers — over and above around 18 lakh at present — QuickPicks RBI defers capital buffer norms; leaves `37k cr in banks’ hands Agri market: Finally, e-NAM begins for inter-state trade STATE BANK of India has selected underwriters for an institutional share sale that could raise at least `10,000 crore, sources said, reports Bloomberg. Bank of America, CLSA and HSBC Holdings were picked to arrange the offering, according to sources. Kotak Mahindra Bank and SBI Capital Markets were also chosen to work on the deal. PAGE 10 `20 lakh & `40 lakh ■ While the idea is to converge tax slabs, new rate of 6% introduced for small service providers will benefit from the benign, easy-compliance composition scheme as the council opened ittothosewithaturnoverofup to `1.5 crore (the earlier limit was `1 crore),effectiveApril 1. For the first time, the composition scheme has been made available to service providers and businesses who dealinbothgoodsandservices, Continued on Page 2 ■ Reduction of the tax base militates against the concept of comprehensive net, formalisation of the economy ■ Calamity cess of 1% for Kerala could set a bad precedent Q3 EARNINGS TCS misses estimates as companies rein in spending BLOOMBERG Bengaluru, January 10 TATA CONSULTANCY SERVICES (TCS) posted a lowerthan-expected 24% rise in quarterly profit that missed analyst estimates as it contended with a slowdown in IT spending.Asia’slargestsoftware outsourcing provider reported net income of `8,110 crore ($1.2 billion) in the three monthsendedDecember,compared with the `8,190-crore averageofestimates.Salescame to `37,340 crore. A weaker rupee, among Asia’s worst performers last year,was expected tohaveboostedthebottomline of companies such asTCS. TCS managed to lift earnings growth above 20% in the previous two quarters as well despite a challenging business environment.Like closest rival Infosys, it’s wrestling with clients’ changing technology (` cr) Q2FY19 Q3FY19 % change Net Revenue Operating income profit 1.3 Operating Margins (%) 2.1 2.6 25.6 26.5 « SBI selects advisers for `10,000-crore share sale Continued on Page 2 Tax's structural purity compromised further « THE GOVERNMENT’S flagship programme electronic national agriculture market (e-NAM) has started inter-state trade on its platform, facilitating traders of one state to buy produce of a different state, reports fe Bureau in New Delhi. Uttarakhand and UP have allowed trading via e-NAM following which farmers have been able to sell produce to traders outside the state. PAGE 2 subject to an annual turnover limit of `50 lakh. While the manufacturers and traders underthecompositionscheme pay tax at 1% of the turnover sans input tax credit, service providers will have to shell out 6% given the higher value addition in their business. IN AN UNPRECEDENTED move,the high-powered committee led bythe Prime Minister that met on Thursday to decide on the fate of CBI director Alok Verma decided to remove him from the post on charges of corruption and dereliction of duty. The decision, which was based on a report bythe Central Vigilance Commission (CVC) thatlistedeightchargesagainst theagency’schief,makesVerma thefirstCBIdirectortofacesuch anaction.Vermahasbeenasked to take over as D-G, Delhi Fire Services and Home Guard. The move came just a day after Verma returned to take charge based on a Supreme Courtorderafterhewassenton leave on October 23, 2018, following a bitterspatwith his No. 2 Rakesh Asthana.While both the officers were sent on leave, Verma won a favourable ruling in the SC and Asthana’s plea comes up for a verdict in the Delhi High Court on Friday. Mainly on the compliance front. Taxpayers who will freshly move out of the mandatory tax net/regular taxes are in millions but contribute very little to government's GST revenue « THE RBI deferred the rollout of the last tranche of capital conservation buffer by a year, reports PTI. The move would leave about `37,000 crore capital in the hands of banks and would help them raise lending by over `3.5 lakh crore by leveraging ten times of the capital. Accordingly, minimum capital conservation ratios of 2.5% would be applicable from March 31, 2020. PAGE 11 EXPRESS NEWS SERVICE New Delhi, January 10 Benefits to taxpayers ■ States given freedom to keep the exemption threshold between of a recovery and companies need funds for investments, banksshouldnotleavethecor- porate sector to fend for itself. A new precedent needs to be created for bank lending to the corporatesector,moresowhen development banking institutions have perished. The Express Group chairman and managing director ViveckGoenkasaidtheIBChas forever changed “the balance of powerbetween bankers and lenders”. Banks have got back around`2.5lakhcroreofover- ● FUNDRAISING Verma sacked Steadview pumps in by selection over `520 crore in Ola committee PRESS TRUST OF INDIA cumulative‘Series J’preference 8,105 Council raises exemption threshold to `40 lakh, launches benign-tax scheme for service providers, widens its scope for others theretailsegmentatthecostof thecorporatesector.Giventhat the economy is showing signs ● CBI DIRECTOR 7,901 THE SUPREME COURT on Thursday favoured setting up of a three-member highpowered committee comprising Nandan Nilekani to suggest reforms for conducting of competitive examinations fairly by government bodies, reports PTI. The top court said it would not vacate the stay on the declaration of result of SSC combined graduate level and combined higher secondary level examinations held in 2017, in which lakhs of students had appeared. increasing tendency of bad loan-hit banks to turn riskaverseandimproveexposureto 9,771 Govt exams: SC for panel with Nilekani to suggest reforms dismissing the challenges to insolvencyresolutionprocessas teething troubles, efforts must be made to address them expeditiously,he added. Arecentcentralbankreport had suggested that the recovery through the IBC was more than three times of that via other routes, including Board of Industrial and Financial Reconstruction (BIFR). Vaghul highlighted the 9,564 THE GOVERNMENT IS considering providing transport subsidy to states for promoting agriculture exports, commerce minister Suresh Prabhu said on Thursday, reports PTI. The issue of providing transport subsidy along with various other matters were discussed at the meeting of the Council for Trade Development and Promotion, he added. Representatives from several states, including Karnataka, Punjab and Tamil Nadu, participated in the meeting. Winners of the FE Best Banks Awards with chief guest Narayanan Vaghul and The Express Group CMD Viveck Goenka; (right) former SBI chairman Arundhati Bhattacharya receiving the Lifetime Achievement Award « States may get transport sops to up agri exports THE INSOLVENCY AND Bankruptcy Code (IBC) is a landmark law that has altered the way the bad loan menace and industrial sickness are tackled in the country and is way better than earlier mechanisms like BIFR where the recovery process was too tedious to yield anything worthwhile, former ICICI Bank chairman Narayanan Vaghul said on Thursday. However,toomuchoflitigation is delaying the resolution processunderthetwo-year-old IBC (which stipulates a timebound resolution of stressed assets),“taking the spirit of the lawaway”,he said at the FE Best Banks Awards here. Without 37,338 THE UNION CABINET on Thursday approved a proposal for a $75-billion bilateral swap arrangement between India and Japan, reports PTI. The move is aimed at enhancing the RBI's ability to manage exchange rate volatility. The arrangement authorises the RBI to sign the agreement for bilateral swap arrangement between the RBI and the Bank of Japan for a maximum amount of $75 billion. FE BUREAU Mumbai, January 10 36,854 IN THE NEWS Cabinet nod to India-Japan $75-bn swap arrangement EXPRESS PHOTO: NARENDRAVASKAR EXPRESS PHOTO: NIRMAL HARINDRAN Source: Company needs and a shift toward automation.Other headwinds includecurbsontheH-1Bvisas used to get Indian software workers into the key US market,the increased cost of localisation, employee training expenses and Britain’s exit from the European Union. Worldwide IT spending growth is expected to slip to 3.2% overall this year from an estimated 4.5% in 2018, according to Gartner. Uncertainty around Brexit and the economy may affect clients’ 2019 IT budgets,Anurag Rana, aseniortechnologyanalystwith Bloomberg Intelligence,said in a report this month.“Europe is the main area expected to see a slowdown,” Rana said. TCS is the first of India’s IT services giants to report quarterly earnings. Closest rival Infosys follows on Friday and Wipro next week. TCS chief executive officer Rajesh Gopinathan has argued that IT outsourcers should think creatively to evolve from the lowcost infrastructure maintenance and technology support services of the past. Continued on Page 2 New Delhi, January 10 CAB HAILING PLATFORM Ola has issued 2.45 lakh shares worthover`520croretoSteadviewCapitalMauritius,analternative asset management firm and an existing investor in the company, according to documents filed with the corporate affairsministry.“...245,082fully and compulsorily convertible, shares...is hereby allotted at a subscription price of `21,250 perseries‘J’preferenceshare...to Steadview Capital Mauritius,” the documents showed. The resolution was passed at a board meeting of ANI Technologies’—theentitythat runs Ola — on January 9, the documents added. Detailed report on Page 6 due loans already and another `50,000 crore-60,000 crore should get resolved in another few months,he added. Arundhati Bhattacharya, former chairman of SBI who received life-time achievement award for her contributiontobanking,saidtheIndian banking industry has the ability and resilience to get out of the current bad loan mess, or any other challenge that is thrown at it. Earlierinapaneldiscussion on whether the digital will destroy traditional banking models, moderated by FE’s managing editor Sunil Jain, participants said there is enough space to grow for both banks and fintech players and they complement each other, although there could be some tension at times. Outgoing Axis Bank chief executive Shikha Sharma stressedtheindispensabilityof a partnership between banks and fintech companies and added that there should not be much of a worry as to who should control what. Continued on Page 2 BRANDWAGON 15 ‘Virality and engagement can be bought’ Fork Media’s Samar Verma on the need for data and intelligence in content creation, and more
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