OPINION, P8 COMPANIES, P7 INTERNATIONAL, P14 EDITORIAL MURKY LINKS HIGHER SALES ED claims corporate lobbyist Deepak Talwar has links with Mallya ArcelorMittal Q4 net income rises 16% to $1.19 billion Congress plays cow politics, ignores farmers’ concerns RBI cuts repo rate, but a glut of govt paper means interest rates may not fall PUNE, FRIDAY, FEBRUARY 8, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.IX NO. 283, 24 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 36,971.09 ▼ 4.14 NIFTY: 11,069.40 ▲ 6.95 NIKKEI 225: 20,751.28 ▼ 122.78 HANG SENG: 27,990.21 ▲ 59.47 `/$: 71.46 ▲ 0.11 `/€: 80.99 ▲ 0.51 BRENT: $62.19 ▼ $0.50 GOLD: `33,000.00 ▼ `210.00 JLR WOES MINDING GROWTH RBI cuts repo rate by 25 bps REFLECTING THE reforms implemented by the country's policymakers towards building and sustaining an innovation ecosystem for domestic entrepreneurs and foreign investors alike, India has climbed eight places in the annual International Intellectual Property (IP) Index which analyses the IP climate in 50 world economies, reports Sajan C Kumar in Chennai. The seventh edition of the index shows India moving to 36th of 50 economies in 2018 in 2019. funds via ECB to repay rupee loans of firms under IBC ■ Collateral-free farm loan limit raised to `1.6 lakh from `1 lakh, working group to review farm credit RBI governor Shaktikanta Das at a press conference after the Monetary Policy Review meeting in Mumbai on Thursday EXPRESS PHOTO: PRASHANT NADKAR down,RBIraisedthelimitofcollateral-free agriculture loans to `1.6 lakh from the current `1 lakh (an income support scheme costing `95,000 through FY20 was announced for small and marginal farmers in the recent Budget).The sixth bimonthly review also allowed corporateresolutionapplicants under the government’s crown jewel Insolvency and Bankruptcy Code (IBC) to raise ECB fundstorepaytherupeeloansof the target companies. RBI,however,alsoshowedits regulatoryrigourandobstinacy by ruling out any relaxation of the February 12,2018,circular that mandates banks to refer any default case where they are unable to find resolution in six months to the IBC process.The circular, challenged at the Supreme Court, was a bone of contention between RBI under UrjitPatelandthegovernment, with the latter and top-notch PSBs pitching for a relief to at least the power producers from its“stringent”provisions. Finance minister Piyush Goyal said the latest policy action and other RBI steps SHAKTIKANTA DAS GOVERNOR, RBI At the moment, there is no proposal to modify the February 12 circular (Circular forces banks to recognise 1-day default, fast-track IBC process; a point of discord with govt) would“giveaboosttotheeconomy, lead to affordable credit forsmallbusinesses,homebuyers etc. and further boost employment opportunities. EconomicaffairssecretarySubhash Chandra Garg said,“It is a very balanced and pragmatic policy statement.” Industry body CII said it is hopeful that “the rate easing cycle would continue going forward to provideaboosttodemandatatime when inflation is down”. Amidlargeoutflowsofportfolio funds from the Indian debt market, the RBI sought to arrest this trend by removing therulethatsaidaforeignportfolio investor (FPI) should not have exposure of more than 20%ofitscorporatebondportfolio in a single corporate.This could give the much-needed leeway to many investors and possiblyspurinflows. Bonds rallied on Thursday withtheyieldontheoldbenchmark bond — the 7.17% yield- ■ Interest rate derivative norms to be rationalised to achieve consistency and ease of access ■ Hedging of forex risk reviewed; draft rule proposes to merge facilities for residents and non-residents into a single unified facility for all users ing notes maturing in 2028 — falling as much as nine basis points during the day, but experts sounded a note of caution on the fiscal front and felt thecyclemightremainshallow. TheSensexandNiftyendedflat. Helped by persistent deflation in major constituents of the food basket,retail inflation fell to an 18-month blow of 2.2% in December, while the core inflation (excluding food and fuel) remained somewhat stickyat5.7%.Takingintoconsideration the benign shorttermoutlookforfoodinflation, dissipated effect of HRA increase for central government employees, moderation inhouseholdinflationexpectations (down a seminal 130 bps fora12-month-aheadhorizon), and assuming a normal monsoonin2019,theMPChasprojected retail inflation at 2.8% forthe current quarter. Continued on Page 2 SAFEGUARD DUTY IMPACT Special Feature ‘Our offline stores act as conversion channels’ Ashish Goel, Urban Ladder's founder and CEO, talks about the company’s growth plans, offline expansion, trends in online furniture buying, the entry of IKEA, and more ■ BrandWagon, P13 QuickPicks Political ads on Facebook to carry labels offering info on advertiser FACEBOOK ON Thursday said political advertisements on its platform will carry a ‘disclaimer’ offering details about those responsible for running the ad as the social media giant looks to bring transparency into political ads ahead of elections in India, reports PTI. “Starting today (Thursday), people will begin to see political ads with ‘published by’ or ‘paid for by’ disclaimers specified by advertisers,” the company said. PAGE 6 New pension scheme only for workers up to 40 years of age THE SUBSIDISED pension scheme for unorganised sector workers, Pradhan Mantri Shram-Yogi Maandhan (PMSYM), announced in the Budget will not be available to those above 40 years of age, reports Surya Sarathi Ray in New Delhi. According to sources, workers up to 40 years and with a monthly income of less than `15,000 will be able to enrol under the scheme. A 40-year old will have to contribute `200 a month to avail an assured monthly pension of `3,000 upon completion of 60 years. PAGE 2 Voda-Idea to increase cost of acquiring new SIM connections IN A move to further enhance its Arpu (average revenue per user), Vodafone Idea (VIL) has decided to substantially increase the cost of acquiring new SIM connections, reports Shubhra Tandon in Mumbai. The increased cost will now be made uniform across all the 22 circles, the company management told analysts a day after it posted a wider net loss at `5,005 crore during the OctoberDecember quarter. PAGE 6 PMSPEAK ANUPAM CHATTERJEE New Delhi, February 7 PRESS TRUST OF INDIA New Delhi, February 7 WHILE THE SAFEGUARD duty imposed in July last year on solar module imports from China and Malaysia and ‘developed countries’ has put the brakes on shipments from these locations, the imports have since surged from a few other countries, including Vietnam, Singapore and Thailand. In April-November 2018, imports of solarcells and modules from Singapore (`489 crore), Vietnam (`263 crore) and Thailand (`155 crore) recordedanannualgrowthrate of 242%, 440% and 2,711%, respectively. Even though the import volumes from these countries are still low compared with the overall imports (in April-November the total imports stood at `8,947 crore, (April-Nov FY19) Total `8,947 cr Imports from.. (` crore) Singapore 489 242% 41% y-o-y Thailand 155 2,711% Vietnam 263 down 41% year-on-year), the continued imports of Chinese modules for the Central government-run projects (read NTPC and SECI), where the safeguard duty costs are allowed as a pass-through, is somewhat negating the benefit of the duty for local manufacturers of solar equipment. The value of solar imports 440% increased at a compounded annual growth rate of 47.6% duringFY16-18.About88%of module requirements were met through imports in FY18, mostly from China. Solar imports from China fell by about 48% inApril-November 2018 to `6,974 crore. Continued on Page 2 PTI IN A FRONTAL attack on the Congress, Prime Minister Narendra Modi on Thursday alleged that those who imposed Emergency,“bullied” the judiciary and insulted the Army were accusing him of destroying institutions. The PM also hit back at the Congress over the Rafale issue, which has been repeatedlyraised by its chief Rahul Gandhi,as he alleged that the party didn’t want the Indian Air Force to be strong and asked “which companies are they bidding for that theyare acting so shamefully”. Modi took potshots at attempts to cobble a grand allianceofOppositionpartiesto takeontheBJP,sayingthatpeople do not want a mahamilavat (highly adulterated) governmentastheyhaveseenhowthe PM Narendra Modi addresses the Lok Sabha on Thursday NDA government,which has a majority,can deliver. “Congress imposed the Emergency, but they say Modi isdestroyinginstitutions.Congress insults Army, calls the Army chief a goonda but they sayModi is destroying institutions,” the PM said in a hardhitting reply to a debate on motion of thanks to the President’s address in Lok Sabha. Continued on Page 2 and firms — Dynamic Realty, DB Realty and Nihar Constructions,to file theirresponses. The two individuals and three companies along with others including former telecom minister A Raja and DMK MPKanimozhi were acquitted by the trial court in the ED’s money laundering case. The court directed them to appearbefore the forest officer concerned on February 15 for planting the trees in the South Delhi area.The companies will be represented through their 1,215 -26,961 8.5 11.5 -300 bps problem for us, but what we havedonethereistakenaseries of actions during this quarter. One,we have aligned with the dealers and got our complete agreement on what is going to beourapproachgoingforward. Instead of focusing on sales it would be profitability of dealers, and ensuring retail sales andnotwholesale,andbuilding the brand further. So, we see gradual improvement in China going forward,” Balaji added. JLR retail sales during quarter were down by 6.4% y-o-y at 1,44,602 units. In fact, the company shut down one of its plants in the UKdue toweakening demand. Italsoannouncedaproduction cut in April,2018. Moody’s Investors Services, S&PRatings and Fitch have put Tata Motors’ credit rating on a negativewatchduetoincreased risks on account of Brexit. Continued on Page 2 1.5L persons declare income of over `1 cr OVER 1.5 LAKH persons have declared annual income above `1 crore so far in assessment year 2018-19, up 69% from AY2014-15, Central Board of DirectTaxes (CBDT) chairman Sushil Chandra said on Thursday, but noted that the number was still too low for a large and fast-growing economy like India. Taxpayers declaring gross total income Growth above `1 crore AY13-14 AY14-15 (%, y-o-y) 82,836 88,650 AY15-16 1,08,333 AY16-17 AY17-18 HC asks Balwa to plant 3k trees for seeking time to file reply THE DELHI HIGH COURT on Thursday ordered two persons and three companies to plant 3,000 trees each for seeking moretimetofiletheirresponses on the Enforcement Directorate’s(ED)appealchallenging theiracquittalina2Gscamcase. JusticeNajmiWazirigranted one last opportunity to Swan Telecom’s promoter Shahid Balwa,KusegaonFruitsandVegetablesdirectorRajeevAgarwal, Ebitda margin (%) -24 FE BUREAU New Delhi, February 7 2G CASE PRESS TRUST OF INDIA New Delhi, February 7 3.8 ● AY2018-19 Solar imports from Thailand, ‘People don’t want Singapore & Vietnam surge mahamilavat govt’ IMPORTS OF SOLAR EQUIPMENT Ebitda Net profit/ loss « ■ Bidders to be allowed to raise ■ Das says RBI Act provides for interim dividend; it's the govt's right to ask for it from RBI and use it the way it wants Net sales « INDICATING A GREATER willingness under new governor ShaktikantaDastoaddressthe objectiveofgrowthwhilebeing tenacious to the inflation-targeting framework,the Reserve BankofIndia(RBI)onThursday unexpectedly lowered the repo rate by 25 bps to 6.25%, simultaneously enabling with a shift in the monetary policy stance to ‘neutral’ from ‘calibrated tightening’. A 4-2 majority vote at the Monetary Policy Committee (MPC) preceded the rate call, whilethechangeinstancewasa unanimousdecisionofthecommittee—theMPChasmarkedly lowered its inflation forecasts through Q3YF20.At the postpolicy media conference, Das hinted that further rate reductions might materialise in the cycle if inflation remained on the benign trajectory predicted and expressed an intent to coax banks on policytransmission. The central bank also announcedaslewofstepstoboost capitalflowstothefinancialsystemandthewidereconomyand making it easier for well-rated NBFCs to access credit. In signs of RBI/MPC policy line aligning itself more decisively with the government's and that Das, a long-time finance-ministry bureaucrat before assuming governor's role, is indeed putting his foot ■ RBI says oil price outlook hazy, trade tensions to weigh on global growth; Budget proposals to boost demand but only 'over a period of time' TATA MOTORS ON Thursday posted a shocking and its biggestconsolidatednetlossat `26,961 crore during the October-December quarter on the back of a non-cash asset impairment of `27,838 crore for JLR. Bloomberg consensus estimates had pegged a net profit of `773 crore.The company had posted a net profit of `1,215 crore during the same period last year, however, this was its third straight quarterly loss during the current fiscal with the JLR continuing to struggle due to weakening demand in China,lowdemand for diesel vehicles in Europe and Brexit worries. Tata Motors attributed the one-time impairment to slowingChinasales,technologydisruptionsandrisingcostofdebt. “This reduces ourdepreciation and amortisation by almost 300 million GBP (pound) perannum.It is a right steptakenintermsofreducing our cost, improving our break even and ensuring our competitiveness,”PB Balaji said in a media conference call. Jaguar Land Rover, which contributesaround72%ofthe company's overall revenues, has been going through problems during the year with falling sales due to a decline in demand of diesel vehicles, slowing business in a key market like China and uncertainties over Brexit. The unit posted a loss of £3,129 million during the quarterwithrevenuesfallingby 1.4%y-o-yat £6.2 billion.“The China market has really been a 8,544 ■ FY20 GDP growth pegged at 7.4% against 7.2% this fiscal FE BUREAUS Mumbai/New Delhi, Feb 7 ■ Major categories of NBFCs like asset finance companies, loan companies and investment companies to be considered a single segment Q3FY19 Q3FY18 % change (` cr) 6,522 ■ Inflation forecast at 2.8% for March quarter, 3.2-3.4% for H1FY20 and 3.9% for Q3FY20 FE BUREAU Mumbai, February 7 77,001 exposure limit for an FPI to a single entity to be withdrawn ■ Rated exposures of banks to all NBFCs, barring core investment companies, would be risk-weighted as per ratings 74,156 ■ 20% corporate bond The company took one-time impairment due to JLR’s weakening demand in China ■ Task force on offshore rupee markets to be set up to ensure stability in currency ILLUSTRATION: ROHNIT PHORE India jumps 8 places in global IP ranking cut (Viral Acharya, Chetan Ghate wanted status quo), unanimous on change in stance « RETAIL PASSENGER vehicle (PV) sales grew 34% monthon-month (m-o-m) in January, fuelled by the massive yearend discounts on 2018manufactured cars and new launches by Maruti Suzuki, Tata Motors and Nissan India, according to the Federation ofAutomobile Dealers Associations, reports fe Bureau in New Delhi. Wholesale volumes, however, remained under pressure with the top five carmakers reporting negative or flat sales growth in January. IN A NUTSHELL ■ MPC votes 4:2 in favour of rate « IN THE NEWS PV retail sales rise 34% m-o-m in January Sharply lowers inflation forecast after consistently undershooting estimates; slew of steps to boost capital inflows, credit growth Tata Motors posts record `27k-cr loss 11.7 7.0 22.2 1,20,103 10.9 1,40,139 16.7 The number has now hit 1,50,000 (so far in AY18-19) Source : CBDT authorised signatory. The court listed the matter forfurtherhearingonMarch26. AspecialcourtonDecember 21, 2017, had acquitted Raja, Kanimozhi and others in the CBI and ED cases.It had acquitted 17 others, including DMK supremoMKarunanidhi’swife Dayalu Ammal,Vinod Goenka, AsifBalwa,filmproducerKarim Morani, P Amirtham and Sharad Kumar, director of KalaignarTVin the ED case. “The department is detecting under-declaration of income through an analysis of consumption patterns,” Chandra said at a conference organised by Assocham. Further, he said,while many of the people with income above `1 crore weresalaried, notmanyfirmsor associations were reporting income above the threshold. This was not commensurate with expenditure patterns being reported in the economy. Continued on Page 2 Continued on Page 2
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