OPINION, P6 COMPANIES, P4 A LAHIRI & UR PATEL India must have ubiquitous Covid-19 testing INTERNATIONAL, P8 EDITORIAL LETTER TO SHAREHOLDERS COVID BLUES Cyclone Amphan shows pandemic readiness & climate change/disaster readiness can't be mutually exclusive Only 25% of TCS workforce to work from premises by 2025 Rolls-Royce plans 9,000 job cuts on collapse in air travel NEW DELHI, THURSDAY, MAY 21, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 69, 12 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) 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: 30,818.61 ▲ 622.44 NIFTY: 9,066.55 ▲ 187.45 NIKKEI 225: 20,595.15 ▲ 161.70 HANG SENG: 24,399.95 ▲ 11.82 `/$: 75.80 ▼ 0.16 `/€: 82.96 ▼ 0.32 BRENT: $35.46 ▲ $0.81 GOLD: `47,165 ▲ `115 CABINET APPROVAL Ola to lay off 1,400 employees Weaker NBFCs to gain from easy PCGS criteria Low-rated NBFCs can tackle temporary liquidity mismatch; move to aid last-mile financing of MSMEs LIQUIDITY BOOST Under the proposed `30,000-cr scheme, RBI to indirectly buy debt sold by shadow lenders `45,000-cr partial credit guarantee FE BUREAU New Delhi, May 20 scheme 2.0 for NBFCs, govt to bear first 20% loss THE CABINET ON Wednesday approved the proposed partial creditguaranteescheme(PCGS) 2.0 worth `45,000 crore to improve liquidity for low-rated shadow lenders,and eased certain criteria for the pooled purchase of NBFC assets by staterun banks under the existing PCGS 1.0. The Cabinet also approved a special liquidity scheme worth `30,000 crore, under which the Reserve Bank ofIndiawillindirectlypurchase debtsoldbynon-bankingfinancialcompanies(NBFCs),housing finance companies (HFCs) and micro-finance institutions (MFIs), a senior government official said. A large state-run bank will set up a special purpose vehicle (SPV) to manage a stressed asset fund,which will raise money by issuing securities worth `30,000 crore guaranteed by the government. These securities will be pur- PCGS 1.0 extended by 9 months to Mar 2021, eligibility relaxed Assets ofNBFCs under SMA-1 on technical ground one year beforeAug 2018 to be covered chasedonlybytheRBI.TheCentre will contribute `5 crore towards the equityof the SPV. “Beyond that (`5 crore towardsSPVequity),thereisno financial implication for the government until the guarantee involved is invoked. However, on invocation, the extent of government liability would be equal to the amount of default subject to the guarantee ceiling,” according to an official statement. Continued on Page 2 RESTARTING OPERATIONS ● COVID IMPACT Revenue share model for coal auction gets nod FE BUREAU New Delhi, May 20 INDICATING ITS READINESS to forego a large part of its revenue from coal mining if it results in a jump in the country’s coal production,the government on Wednesday approved a newmarket-determined revenue share model for auctioning off coal assets, ending the fixed fee/tonne regime that turned off private investors, even as the sector has gradually been opened up to them in recent years. However, a coal miner in India still has to pay assorted taxes to the central, state and local governments — including royalties, a hefty `400/tonne GST compensation cess and contribution to districtmineralfunds—which work out to more than 50% of the base priceof the fuel,much higher than in other coal-rich countries like Australia (7%), SouthAfrica (11%) and the US (4%),analysts said. With coal imports surging and becoming a drag on the country’s current account Maruti, Hyundai focus on deliveries; production low FE BUREAU New Delhi, May 20 Most automakers have about a month’s stock of vehicles in their yards and with dealers (imports were $24.5 billion in FY19 and $18.3 billion in April-January, financial year 2019-20), the government has over the last more than two years taken a series of steps to populate the sector with more investors and technology players. ONLINE TAXI AGGREGATOR Ola said on Wednesday it has decided to let go of 1,400 employees as the Covid-19 pandemic has dealt a severe blow to its businesses. Revenues for the Bengaluru-based firm have reduced 95% in the past two months, co-founder & CEO Bhavish Aggarwal wrote in a note to employees. The job cuts will be implemented across mobilitywhich accountsforabout80% ofrevenues and foods and financial services verticals. Aggarwal, however, said the downsizing would be a“one-time exercise” and no more Covid-related cuts will be done. The process will be completed by the end of this week forIndiamobilitybusinessand bythe end of nextweek forOla foods and Ola Financial Services,the company said. “The prognosis ahead for our business is very unclear and uncertain. It is going to take a long time for people to go out and about like before. Social distancing, anxiety, and an abundance of caution will be the operating principles for everyone,”Aggarwal said. Continued on Page 2 Continued on Page 2 COAL IMPORTS (in $ billion) 21.5 24.5 18.3 13.2 14.9 FY16 FY17 FY18 FY19 FY20* *April-January Domestic coal production (in MT) FY16 639.2 FY17 657.9 FY18 675.4 FY19 728.7 FY20 729.1 Special Features Teams has more than 75 million daily active users How to clean your phone the right way & keep it Covid-safe B2B entities exempted from certain digital payment modes THE CBDT said entities that primarily transacted with other businesses (B2B) electronically are exempt from installing facilities for digital payment like Rupay debit card, unified payment interface (UPI) and UPI QR code as such businesses usually transact in large amount for which these modes were impractical, reports fe Bureau in New Delhi. Last year, it was mandated that any entity with an over `50-crore turnover in the preceding year had to provide aforementioned payment facilities. FCs recovered over 64% of admitted claims via IBC in Q4 FINANCIAL CREDITORS (FCs) realised 64% of their admitted claims through insolvency in January-March, much higher than the historical average of about 46% over the period up to December 2019, reports fe Bureau in Mumbai. The improved realisation was due in large part to the Jaypee Infratech resolution, where FCs recovered `23,223 crore, over 100% of the amount claimed, showed an Insolvency and Bankruptcy Board of India newsletter. PAGE 10 ‘Over 70% cos may continue work from home for 6 months’ OVER 70% of companies are likely to continue the work-from-home policy for a percentage of their total staff for the next six months to maintain social distancing and for business continuity, according to a survey by Knight Frank, reports PTI. Most respondents said their company productivity was not affected due to the forced work-from-home arrangement since the lockdown. The survey, however, found out that connectivity and distraction from family were two critical challenges. Amphan makes landfall COVID-19 UPDATE 1,06,750 TOTAL CASES FY18 POWER SHOCK 3,303 UDAY scheme fared even worse? ANUPAM CHATTERJEE New Delhi, May 20 THE UDAY SCHEME could have had even lesser efficacy than claimed by the central government in nursing the stressed electricity discoms back to health. Though data put out by the states and compiled by the Union power ministry showed a reduction in the combined financial losses of Discoms' losses (` cr) As submitted by states 51,562 FY16 38,080 FY17 15,132 FY18 28,036 FY19 *Icra 30,000 FY20* projection As audited by PFC FY16 FY17 FY18 48,619 38,460 33,365 DEATHS SO FAR 5,611 NEWCASES discoms — from `51,562 crore in the financial year 2015-16 to `15,132 crore in the financial year 2017-18 — state-run Power Finance Corporation (PFC), the principal lender to these entities, has now found that their combined losses stood at `33,365 crore in FY18,more than double the level reported earlier (see chart). Continued on Page 2 has opened 3 out of its 5 plants ■ Has PV inventory of 20,000 units M&M has opened 3 out of its 6 auto plants ■ Has PV inventory of 15,000 units The two plants during normal times produce 5,000vehicles every day but as the companyhas around 1,30,000cars in its inventory network – stockyards as well as dealers – the first attempt is to clear it. Sources said that at the time of lockdown on March 25,there were around 67,000 bookings and this needs to be Hyundai has opened its plant at Sriperumbudur ■ Has capacity to produce 2,000 vehicles a day ■ Currently producing 200 a day ■ Has inventory of 35,000 units ■ Has 4,367 new bookings completed. Post-lockdown, almost half of these consumers are still interested in going ahead with theirpurchase.So far,the company has been able to open around 1,350 dealerships and delivered around 5,000 vehicles. Continued on Page 2 Domestic flights to start again from May 25; guidelines today Continued on Page 2 A cycle rickshaw on the Howrah Bridge in Kolkata on Wednesday. Packing winds of up to 190 kmph, cyclone Amphan roared into West Bengal, dumping heavy rain and leaving a trail of destruction that left at least two people dead has opened two plants: Manesar & Gurgaon ■ Both together have capacity to produce 5,000 vehicles a day ■ Production lines still not working ■ Has inventory of 130,000 units ■ Had 67,000 bookings at the time of lockdown on March 25 IN THE TIME OF COVID TWOMONTHSAFTERthegovernment suspended domestic flight operations,Union minister for civil aviation Hardeep Singh Puri on Wednesday said domestic passenger flights would resume “in a calibrated manner”nextweekonwards.By Thursday,the Directorate GeneralofCivilAviation(DGCA)will issuedetailedguidelinesonhow the flightswillrecommence. Puri had earlier told airlines to stop taking ticket bookings till the government’s go-ahead. Flights were stopped in a bid to limit the spread of Covid-19, which has caused over 3,300 deaths in the country. ■ eFE, P9 QuickPicks AUTO MANUFACTURERS MAY have reopened their factories and spruced up their showrooms but are unlikely to step up production until they've cleared inventories. A quick poll reveals most automakers have about a month’s stock of vehicles in theiryards and with dealers. Maruti Suzuki, for instance,is not producing any cars just yet at either of its two plants. Although it has been permitted bythe Haryana government to employ 100% of its workers, it is working with just 33% for the moment. Maruti had earlier this week started operations at its second plant at Gurgaon after resuming operations at Manesar from May 12. FE BUREAU Mumbai, May 20 The “remote everything” trend will sustain, and tech intensity will continue to accelerate, says Microsoft’s Samik Roy, talking about how top companies as well as kids are using Microsoft Teams Don’t spray a sanitiser or disinfectant directly on your phone. Wet a wipe with a non-abrasive or alcoholbased disinfectant to clean it, and don’t forget to clean your smartphone case too ■ Gadgets, P9 FE BUREAU New Delhi, May 20 Tata Motors Maruti Are Delhi’s infection levels at 7% or 22%? ISHAAN GERA New Delhi, May 20 GOING BY THE figures of Covid-19 infections that the Delhigovernmentreportsinits medical bulletin, the capital’s infectionlevels—proportionof thosetestingpositivetothetotal tests done daily — were around 8.2% at the end of the third DELHI DISCREPANCY (difference between data given to Delhi High Court & Medical Bulletin) Tests done per day 12,000 As per medical bulletin 6,391 9,000 6,000 4,082 3,000 1,807 As per 0 1,373 High Court May 6 May 14 lockdown (L3). While that is muchlowerthanMaharashtra’s 21.4 — 61% of Maharashtra’s infections are from Mumbai — another set of figures being reported by the Delhi government, to the Delhi High Court, suggest the infection is around 22%.Which is correct? Continued on Page 2 Infection levels (Infected people as share of tests done) 10.5 May 6 31.2 8.5 May 7 12.8 8.2 May 8 20.9 7.8 May 9 15.5 4 May 10 20.9 8 May 11 17.1 4.8 May 12 31.9 5 May 13 21.7 7.4 May 14 26.1 As per medical bulletin As per High Court 75% of testing kits now procured locally ABANTIKA GHOSH New Delhi, May 20 INDIA IS NOW procuring about 75% of its testing kits from domestic manufacturers, officials said on Wednesday.Whilethenumberofsamples tested crossed 1 lakh for the second day on Tuesday, efforts are on to further raise dailytesting,maybeevendouble it by the end of June.Amid projections of cases rising in June-July, self-sufficiency in testing kits forms an important part of the central government’s Covid-19 strategy. “In the first fortnight of April, wewerestrugglingalittlewith supplies,”saidCKMishra,environment secretary. Continued on Page 2 China’s new outbreak shows signs virus could be changing, Page 8 ADD TO CART Facebook’s Zuckerberg recommits to commerce with ‘Shops’ KURTWAGNER San Francisco, May 20 FACEBOOK IS MAKING another run at building a shopping empire — and this time it has the direct involvement of the company’s most important executive, Mark Zuckerberg. The Facebook chief executive officerannounced a handful of updates on Tuesday signaling the company’s commitment to online shopping and commerce,one of the areas he highlighted as a priorityforthisyear.Themainproduct, called Shops, is a new version of an existing Facebook feature with a similar name, and will let retailers upload product catalogs to their Facebook page or Instagram profile.Users can find these Shops directly from the retailer’s page, or by clicking on an ad that will redirect them to a Shop inside Facebook instead of the retailer’s own website. Eventually, Zuckerberg says,these Shopswill be acces- This is really the first very major push that we’re going to be making into that next step around commerce. All these tools are open for business even when your physical storefront can’t be. —MARK ZUCKERBERG FACEBOOK CEO sible across the Facebook family, including Messenger and WhatsApp, giving retailers a wayto reach Facebook’s nearly 3 billion users with one product catalog. “This is really the first very majorpush thatwe’re going to be making into that next step around commerce,” Zuckerberg said in an interview on Monday. He also highlighted the importance of Shops for small businesses, almost all of which are operating exclusivelyonline during the Covid- 19 pandemic.The“vast majority”ofFacebookadvertisersare small businesses, Zuckerberg said, so ensuring they can operate is important to Facebook’s business as well. “All these tools are open for businessevenwhenyourphysical storefront can’t be,”he said on a livestream on Tuesday announcing the new feature. Facebook stock rose more than 3% after the news, adding to gains from earlier in the day. Continued on Page 2
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