NEW DELHI l WEDNESDAY l MAY 7 l 2014 VOL XXXX NO 57 26PAGES I Rs 4.00 READ TO LEAD P 8 M O N E Y & P 12 M A R K E T S INDIA’S GROWTH RATE WILL PICK UP SOON, SAYS RBI GOVERNOR RAGHURAM RAJAN Bayer to buy Merck arm in $14.2-billion deal P U B L I S H E D F R O M : A H M E DA B A D, B A N G A LO R E , 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, KO C H I , KO L K ATA , LU C K N OW, M U M B A I , N E W D E L H I , P U N E In the news INDICES Closing Up/down S&P BSE Sensex 22,508.42 ▲ 63.30 CNX Nifty ▲ 15.95 6,715.30 AI plans to raise R10,000 cr via issue of tax-free bonds DEBT-LADEN Air India is looking at raising around R10,000 crore by issuing tax-free bonds in the current fiscal to retire its high-cost loans to meet working capital needs, reports Rhik Kundu in Mumbai. According to an AI official, the proposal would require the finance ministry’s approval, and would be taken up once a new government assumes office. This is significant since a similar proposal was earlier rejected by the ministry. Rising bad loans threaten India’s recovery: OECD INDIA’S economy will likely make a gradual recovery this year, helped by a rebound in capital investments as well as a pick-up in private consumption, but rising bad loans at its banks threaten to choke the recovery, the OECD has said, reports Reuters. In its latest economic outlook, the Paris-based think tank said growth in India’s economy was expected to edge up to 4.9% in calendar year 2014 from 4.5% a year earlier and accelerate further to 5.9% in 2015. EDIT P6 P 4 I N T E R N A T I O N A L FinancialExpress.com C O R P O R A T E S BHARGAVA-LED MARUTI SUZUKI PLANS TO LAUNCH NEW ALTO K10 MODEL TO BOOST VOLUMES twitter.com/FinancialXpress facebook.com/TheFinancialExpress NTPC to snap supply to Delhi’s cash-strapped BSES from June SEATS UP FOR GRABS ■ Andhra Pradesh Regulator says SC or ATE to decide on pace of repaying regulatory assets to discoms fe Bureau New Delhi, May 6 D ELHI’S power crisis worsened with the Supreme Court allowing NTPC to cut supply to BSES electricity distribution companies (discoms) in case BSES’ firms BSES Rajdhani Power (BRPL) and BSES Yamuna Power (BYPL) are unable to clear R788 crore of dues by the end of the month. In addition, NTPC will present another bill of around R400 crore to BSES in June for electricity supplied in May . An SC bench comprising justices SS Nijjar and AK Sikri on Tuesday directed the two BSES discoms to pay up “as per the figures, duly signed by both NTPC and BSES firms, submitted to the court... Now that you are agreeingonthefiguresyourself,youshouldclearthecurrent dues. All this is (of) your own making. The other company (Tata Power Delhi Distribution or TPDDL) doesn’t have any problem. We are talking about present dues and not past dues... We have to balance the equity ...” ...BSES DISCOMS CAN’T PAY EVEN THEIR CURRENT DUES DELHI’S DEFICIT (R crore) (Projected, May end) 1,482 1,200 With a rising revenue gap... (FY13, R cr) BRPL Gap BYPL TPDDL 1,623 1,285 421 (FY14, R cr) ...large regulatory assets... Delhi Transco Damodar Valley Corporation Aravali Power Company 1,283 # 5,489 814 ...and rising revenue requirements... Annual revenue 9,361 5,527 requirement* 6,079 TOTAL (including others) *Projected FY15, R cr Though the current discussion in the Supreme Court is only about NTPC’s dues, several other suppliers who have not been paid — as of March 31, BSES’ # #as on March 31, 2014 dues were R6,412 crore — may also start cutting off supply .DamodarValleyCorporation is in the Supreme Court against BSES and Aravali Power is at the Appel- 910 557 13,454 8,250 Balance # Indraprastha Power Generation # # 6,412# late Tribunal for Electricity . BSES, for its part, has said it does not have the money to pay as the R10,000crore loan it has approached Power Finance Financial Technologies set to lose voting rights in MCX T HE FMC has issued a new set of norms for commodity futures bourses, which could strip Financial Technologies (India) of its voting rights in Multi Commodity Exchange in which it has a 26% stake, reports fe Bureau in New Delhi. If a commodity exchange has completed five years of operation, any person who ceases to be “fit and proper” will have to divest his shareholding to a maximum of 2%. ■ P10 BAD LABOUR LAWS, TOUGH LAND ACQUISITION? DIPP POINTS TO SOLUTIONS IN VARIOUS STATES W HEN the next government comes to power, it doesn’t need to look too far for solutions to vexing problems like rigid labour laws or tough land acquisition processes, reports fe Bureau in New Delhi. A Department of Industrial Promotion and Policy (DIPP) study finds the solutions have already been implemented in one state or another. The more dynamic states in India and consequently the fastest-growing ones have Pragati Power Corp NTPC found ways to cut the red tape and make it easier for companies to do business. Among the ideas that have worked well are Maharashtra’s singlewindow clearances for industrial units and labour management, found to be the best in the country. Gujarat, on the other hand, has excelled on land acquisition and pollution control. The findings of a joint study by the DIPP and management consultancy Accenture found Karnataka’s integrated and comprehensive indirect tax management system the best in India. It also believes the singlewindow clearances in Rajasthan and Punjab have been a success. States that have streamlined clearances and improved governance have benefited from higher economic growth — Maharashtra and Gujarat have each grown by over 9% between 200506 and 2012-13 even as the overall GDP growth of the country averaged 7.6%. Corporation and Rural Electrification Corporation for is contingent on the Delhi Electricity Regulatory Commission (DERC) hiking its tariffs so that it can quickly get back R20,700 crore due to it by way of ‘regulatory assets’. In addition, BSES also runs up a deficit — the difference between its costs and the revenues it gets from customers — each month, which prevents it from paying even the recurring bills of suppliers. In the case of BRPL, in JanuaryMarch2014,ithadadeficitof R440 crore while the figure was R500 crore for BYPL. While DERC has put out an eight-year schedule for discharging R8,000 crore of the regulatory assets, the lenders are learnt to have said they need DERC to shorten the period by way of higher electricity tariffs. When contacted, DERC chairman PD Sudhakar said, “We have clarified our position to PFC/REC... They appeared satisfied, but if they want more discussion, they can come.” ■ Continued on Page 2 THE PENULTIMATE ROUND GENERAL ELECTION 2014 THE 9TH PHASE COVERS 64 PARLIAMENTARY CONSTITUENCIES, SPREAD OVER 7 STATES Exclusive! A new wrinkle Bidders for Botox’s maker took advantage of gaps in the takeover rules ■ P12 25 7 Himachal Pradesh 4 Jammu & Kashmir 2 Uttar Pradesh 5 West Bengal RAM VILAS PASWAN Congress Amethi 15 Uttarakhand RAHUL GANDHI LJP Hajipur 6 THE CRUCIAL CONTEST ● Amethi: Rahul Gandhi will contest against Smriti Irani (BJP) and Kumar Vishwas (Aam Aadmi Party) RAJIV SHANTA PRATAP RUDY KUMAR BJP Saran BJP Kangra OTHER FACTS ● These are the last Lok Sabha ● 72 candidates are contest- ● In Uttarakhand, three former BJP chief ministers — Bhuvan Chandra Khanduri, Bhagat Singh Koshiyari and Ramesh Pokhriyal Nishank — are among those contesting ● Both Himachal Pradesh and Assembly polls being held in the undivided Andhra Pradesh. Telangana will come into being as the 29th state of the country on June 2 ing across six seats in West Bengal, while 118 candidates are contesting across 7 seats in Bihar. In UP, 243 candidates are contesting across 15 seats and Uttarakhand will see a single-phase election, given the low number of seats. Himachal Pradesh has 4 seats, while Uttarakhand has 5 QUICK PICKS ECONOMY, PG 2 INDIA’S SERVICES DOWNTURN EASES IN APRIL A CTIVITY in India’s services industry contracted for a 10th consecutive month in April, pushing firms to put hiring plans on hold for the first time since November, a business survey showed on Tuesday. The HSBC Services SUBDUED SHOW The Indian Express Group Editor-in-Chief Shekhar Gupta (right) with former disinvestment minister Arun Shourie at the release of the former’s book Anticipating India: The Best of National Interest, in Mumbai on Tuesday CORPORATES, PG 4 ECONOMY, PG 2 Suzlon Energy plans to list German subsidiary Senvion SC upholds its detention order, Subrata Roy to remain in jail AHARA Group chairman Subrata Roy suffered a huge setback on Tuesday after the Supreme Court rejected his bail plea and criticised him for repeatedly defying its orders and “playing psychological games”, reports fe Bureau in New Delhi. A bench said that Roy’s petition was not maintainable in law and that he deserved no relief. S Surjit S Bhalla THE HEAVYWEIGHTS Bihar UZLON Energy plans to list its German subsidiary Senvion SE, reports Pallavi Ail in Mumbai. Kirti Vagadia, the company’s group head of finance, told FE that the unit — Suzlon’s strongest asset — has maintained profitability despite strong headwinds in the sector globally. “Senvion is our strongest asset and it has been profit-making and growing in revenue terms,” Vagadia said. Singh, Congress commit hara-kiri FinancialExpress/Apps S Purchasing Managers’ Index, compiled by Markit, rose to 48.5 in April from 47.5 in March, but held stubbornly below the 50 mark that divides growth from contraction, reports Reuters. Tuesday’s business survey also showed input costs and prices charged by services companies increased at a quicker pace last month. In contrast, input and output prices rose at the slowest pace in about a year among Indian factories, a similar poll of manufacturers found last week. All officials equal, no govt sanction needed to probe: SC India-Romania A RED Initiative appears in today’s edition of The Finanacial Express. These pages are an initiative of the marketing solutions team of The Indian Express Group and contain content paid for by the advertisers. These pages should be read as advertisement. C HECKING corruption in high places, which was becoming difficult for the Central Bureau of Investigation (CBI) as bureaucrats managed to take cover under Section 6A of the Delhi Special Police Establishment Act (DSPEA), might be easier now with the Supreme Court on Tuesday taking away that cover. “Status or position” cannot shield an officer of the level of joint secretary and above from unconstrained probe by the CBI in cases of corruption, the Supreme Court ruled on Tuesday, quashing a law that requires the agency to go to the government to seek approval for the investigation. A five-judge constitution bench led by Chief Justice RM Lodha ruled that Section 6A of the DSPEA, which shackles investigations without sanctions, was “discriminatory” and “impedes tracking down corrupt senior bureaucrats”. The court said that “the protection in Section 6A has propensity of shielding the corrupt”. The provision “suffers from the vice of classifying offenders differently for treatment thereunder for inquiry and investigation of offences, according to their status in life”, it said. Over the past year 15 cases had piled up, sources said but the CBI had been unable to pursue them. Cases that were awaiting the cen- tral government’s approval include those of Parimal Rai, an IAS officer being investigated for his Illustration: ROHNIT PHORE Rahul Tripathi New Delhi, May 6 alleged role in the 2010 Commonwealth Games scam. The CBI had sought sanction from the ministry of home affairs (MHA) last year but so far no decision has been taken. Rai, considered close to former Delhi chief minister Sheila Dikshit, is posted in Goa. The CBI, the Supreme Court added, could not be insulated from “political and bureaucratic control and influence because the approval is to be taken from the central government, which would involve leaks and disclosures at every stage”. “Office of public power cannot be the workshop of personal gain. Probity in public life is of great importance. How can two public servants against whom there are allegations of corruption or graft or bribe-taking or criminal misconduct under the PC Act be made to be treated differently because one happens to be a junior officer and the other a senior decision maker?” the bench asked. CBI director Ranjit Sinha told The Indian Express the judgment had given the CBI more responsibility. “The CBI will now have to see to it that no innocent civil servant is harassed. The decision to examine any civil servant will be done with utmost due diligence and be taken only by an officer of the rank of joint director or above,” he said. ■ Continued on Page 2
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