OPINION, P6 ECONOMY, P2 VIVIAN FERNANDES Scrapping Railway Budget has helped Railways evade scrutiny INTERNATIONAL, P4 SUNIL JAIN ONBOARDING PACE ROAD TO BREXIT SEWA-INBI pilots in MP showed UBI improved living standards in a sustained way Trai chief Sharma: 9 cr out of 17 cr TV homes migrate to new tariff regime UK's May to promise new debate in push for more negotiating time KOLKATA, MONDAY, FEBRUARY 11, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XXVIII NO. 87, 12 PAGES, `6.00 (NORTH EAST STATES & ANDAMAN `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 `14,000-CR PURCHASE ● ECONOMIC DATA PFC to tap `10,000-cr reserves for REC buy Drops an earlier move to fund the acquisition via borrowings alone; plan to hit lending to power projects ■ PFC won't be accorded the title of promoter of REC, as it would upset overseas bonds holders ■ Deal to materialse by month-end, to bolster govt's disinvestment Total reserves of PFC receipts as on end March IN THE NEWS Finmin asks RBI to transfer `27,380 crore THE FINANCE MINISTRY has sought from the RBI `27,380 crore that was withheld by the central bank towards risks and reserves in the previous years, reports PTI. The RBI had retained `13,190 crore towards risks and reserves during 2016-17. It increased to `14,190 crore in 2017-18. Together, the retained amount is `27,380 crore. CONTRARY TO AN earlier plan to fund its acquisition of the Centre’s 52.63% stake in Rural Electrification Corporation(REC)mainlythroughborrowings, state-run Power Finance Corporation (PFC)will likelydraw`10,000crorefrom its ‘reserves and surplus’ to carry out the `14,000-crore purchase.The dealwill materialise later this month, making a major contribution to the Centre’s disinvestment kitty for the year. Sources said the acquisition is likely to be debtfunded by only to the tune of `4,000 crore Last year,a similar PSU-PSU deal where ONGC acquired the Centre’s51%stakeinHPCLhad alargecomponentofdebtfunding; while the transaction was worth `37,000 crore,the staterun explorer resorted to debt to raise some `25,000 crore. far.Backed bythe lawministry, the petroleum ministry has now asked HPCL to recognise ONGC as its promoter and put the same on record with the stock exchanges. Use of reserves, however, could constrain PFC’s lending ability to the power sector if additional capital is not infused into the company. Between REC and PFC, they lend a considerable `1,50,000 crore/annum to the powersector.“Thisislikelytocomedown to `80,000 crore or thereabouts,” an official familiar with the matter said. Continued on Page 2 Continued on Page 2 2018, of which `13,428 cr BOND 8X Bond parked as surplus and general reserves PFC's likely debt-equity ratio if REC buy is fully debt-funded (6.4X at present), according to Icra The sources added that despite spending such a large sum, PFC won’t get the tag of the promoter of REC and the government would continue to hold the status to avoid a possible backlash from its overseas bonds holders, who could demand higheryields on these instruments if the sovereign backing is diluted. Bond issuances by state-run firms overseas have a clause that investors will be compensated if the government of India's shareholding in these companies go below 50%. Incidentally,ONGChasalso not been named as the promoter of oil marketer HPCL so PRASANTA SAHU New Delhi, February 10 AMID THE ROW over the alleged suppression or window dressing of economic data bythe Modi government, NITI Aayog vice-chairman Rajiv Kumar said the think tank would step in and seek a ‘formal role’ for itself to improve the quality of data. “One of the principal mandates of the NITI Aayog should be to improve the quality of the data in the system,” Kumar told FE in an interview,dismissing the criticism about the think tank’s involvement in the alleged vetting and release of various sets of data. Statingthatthe“wholenarrative that there is job loss in the economy is bogus”, he addedthatifthatisthefinding of the NSSO Survey, even that shouldbequestionedwhenthe report is finally released. The Planning Commission, the predecessor of the NITI Aayog, used to involve itself in data releases, Kumar said, adding that this was a regular feature under the then Commission deputy chairman Montek Singh Ahluwalia. `37,221 cr SAURABH KUMAR & PRASANTA SAHU New Delhi, February 10 NITI Aayog will seek a formal role to improve quality: Kumar LARGER PACKAGE Extra `6,000-cr subsidised loans for sugar mills likely BANIKINKAR PATTANAYAK New Delhi, February 10 AS PARTOF its renewed efforts to address farm distress, the government is considering extendingadditionalsubsidised loans of at least `6,000 crore to sugarmillsandotherstoexpand theirethanolproductioncapacity — a move that is aimed at helping the mills diversifytheir product basket away from its over-dependence on sugar,and bolstering their ability to clear cane dues to farmers. The food ministry has floated a proposal to facilitate cheaperloansto142moresugar unitsbelongingtovariouscompanies—ontopofthe114units that have already been selected to avail of such loans worth `6,139 crore under a scheme approved by the Cabinet last year, an official source told FE. Not just sugar mills but even EXTRA SWEETENER ■ Cheaper loans to 142 more sugar units, on top of 114 units selected to get such loans of `6,139 crore to expand ethanol capacity ■ Standalone producers that source excess molasses from sugar mills to make ethanol may also be covered ■ Govt to offer up to 6% interest subsidy on loans for five years ■ Cane arrears zoomed to `20,000 crore as of Jan 15 from just `6,500 crore a month before, as cane crushing picked up standalone ethanol production units,whicharenotinthesugar business but typically source excess molasses from sugar mills to manufacture the biofuel,are proposed to be covered bythe loan scheme this time. The eligible units will get an interestsubsidyofupto6%ora half of the actual interest they pay for the loan offered to expand ethanol capacity, whichever is lower.The Centre willoffertheinterestsubsidyfor five years, within which the loans have to be repaid bymills. Continued on Page 2 QuickPicks India offers 23 oil blocks IndiGo continues to cancel multiple flights in OALP-III bid round THE PETROLEUM and natural gas ministry on Sunday launched the third bidding round under the Open Acreage Licensing Policy (OALP), reports fe Bureau in New Delhi. Under OALP-III, the government is offering 23 hydrocarbon blocks covering an area of over 31,000 sq km for exploration. PAGE 2 INDIGO CONTINUED to cancel multiple domestic flights across the country on Sunday as its flight operations have been “badly disrupted” after hailstorm lashed parts of north India earlier this week, reports PTI. It cancelled around 15 flights on Saturday and around seven on Sunday. PAGE 5
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