OPINION, P6 ECONOMY, P2 RENU KOHLI Falling output, inflationary pressures stare India in the face INTERNATIONAL, P8 EDITORIAL CRUDE PRICE CRASH REVAMPED STRATEGY Coal-fired power plants are set to miss the 2022 deadline for tackling pollutants like NOx, SO2 Govt mulls cess, royalty relief for domestic oil and gas companies Sanofi adds firepower in exiting $13-billion Regeneron stake NEW DELHI, WEDNESDAY, MAY 27, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 74, 18 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 30,609.30 ▼ 63.29 NIFTY: 9,029.05 ▼ 10.20 NIKKEI 225: 21,271.17 ▲ 529.52 HANG SENG: 23,384.66 ▲ 432.42 `/$: 75.67 ▲ 0.29 `/€: 82.79 ▲ 0.05 BRENT: $36.38 ▲ $0.85 GOLD FUTURE: `46,807 ▼ `166 Fitch projects economy to contract 5% FITCH RATINGS on Tuesday forecast a 5% contraction of the economy in the current fiscal on account of slump in economic activities and very stringent lockdown policy, reports PTI. This is substantially lower than 0.8% growth for the 2020-21 fiscal projected in April. Rajasthan restores 8-hour working in factories THE RAJASTHAN government has restored the working hours for factory workers to eight hours per day, according to an official statement, reports PTI. On April 24, the government had increased the working hours to 12 from 8 hours per day to reduce the requirement of workers in all the registered factories. IN A SIGN that business activities are looking up,albeit gradually,the average number of eway bills generated per day on theGoodsandServicesTaxNetwork (GSTN) portal rose to 9.4 lakh in the third week of the current month (May 18-25), compared with 8.2 lakh and 6 lakh respectively for the two precedingweeks. Ofcourse,stilltheeconomic transactions are way behind what could be considered normal—inMaylastyear,17.4lakh e-way bills were generated on GSTN portal and subsequent monthssawthisgoingupdueto a drive by the authorities to improve compliance - but it is nevertheless clearthatwith the lockdown rules being relaxed, the transactions have been on the rise from early May. The transactions in the economy have crossed the half-waymark 6 May 11-17 8.2 May 18-25 9.5 May 2019 *(total lockdown) 17.4 ofthebusinessasusualscenario. In April, the month which saw strict observance of the lockdown,e-way bills on GSTN had plungedto lessthan3lakh/day. In February, an average of 19.7 lakh e-way bills were issued by the portal on a daily basis.However,inMarch,which is otherwise the busiest month ofthefinancialyear,theaverage e-way bills generated dropped to 13.1 lakh/day due to lockdown imposed in the last week of the month. Analysts have opined that thenation-widelockdownsince March 25 and a Covid-induced slowdown in economic activity even earlier may have dragged down growth in the range of 1.2-1.9%in Q4FY20. Continued on Page 2 Mobile network FE BUREAU Usage soars but speed slows With data usage increasing by 25-30% during the lockdown, as most people are working from home, the 4G download speed of all operators has slowed in March and April compared with February. This is because the network load has shifted from enterprises to mobile networks. 4G download speed 25 20 15 10 5 0 (Mbps) February March April Reliance Jio Bharti Vodafone Airtel Idea Source: My speed portal of Trai BORROWING PLANS Long-term gilt funds a good investment choice now Gilt Funds E-way bill generation: Daily average (lakh) 2.9 May 4-10 SUMIT JHA New Delhi, May 26 Special Feature ` ON THE RISE April 1May 3* Gilt funds are attractive in a falling interest rate regime as bond prices are inversely proportional to interest rates. Stay invested for a long time to benefit from a cycle of rising and falling interest rates ■ Personal Finance, P9 QuickPicks KMB to raise `7,460 crore via stake sale at `1,147.75/share KOTAK MAHINDRA Bank (KMB) on Tuesday disclosed the floor price for its qualified institutional placement (QIP) at `1,147.75 per share for raising capital by a fresh issue of 6.5 crore shares, the lender informed stock exchanges by a release, reports fe Bureau in Mumbai. “The bank may at its discretion consider offering a discount of not more than 5% on the floor price so calculated for the issue,” the private lender further said. At the floor price of `1,147.75, the size of the issue works out to `7,460 crore. PAGE 10 E-commerce transactions grow up to 25% in May second week DIGITALTRANSACTIONS on e-commerce picked up in the second week of May as lockdown restrictions were eased in some parts of the country, say industry players, reports Shritama Bose in Mumbai. As more people placed orders for products like electronic goods and even flight tickets, some platforms reported an up to 25% rise in transactions between the first and second weeks of May. Soon after the lockdown was announced, digital payments had seen a drop in volumes through the second half of March and the whole of April. PAGE 10 FOREIGN FUNDS HAVE cut their holdings of government bonds to the lowest in three years amid dwindling returns, just as the countryembarks on a mammoth borrowing plan. The amount of sovereign securities held by global funds has slumped `76,700 crore from this year’s peak in February as steep hedging costs diminished pay-offs in one of Asia’shighest-yieldingmarkets. Therupee’splungebyabout6% in 2020 further reduced the appealof Indian debt. “While the dollar cost of funding has come down for overseas investors, the cost of India now stands fourth in the world As India added 6,500 infections, data show only the US, Russia & Brazil have more infections ISHAAN GERA New Delhi, May 26 THOUGHTHEPURPOSEofthe lockdownwas to slowdown the spread of the coronavirus,after the fourth lockdown was announced, India has become oneofthetopfoureconomiesin terms of daily infections. On Tuesday, as India added 6,500 infections, Our World in Data figures show that only the US, Russia and Brazil had more infections.Braziland the US are the only two countries to be adding over 10,000 infections everyday. India seems to be fourth in termsofdailydeathsaswell.On Tuesday, the country reported 146 deaths, behind Brazil, the USandMexico.Ifweaccountfor 7-day rolling averages, India’s dailyinfectionadditionishigher than what China, France. Germany, Italy or the UK had achievedatthepeakofthevirus. But that may not mean that the lockdown hasn’t worked. If infections were growing exponentially,India would be closer toreporting20,000casesevery day,asagainst7,000itisreporting today. Brazil is a classic exampleofhowabungledlockdown led to a rise in infections. Brazilreporteditsfirstinfection on February 26, a full 28 days after India reported its first infection.OnTuesday,Brazilwas averaging 17,000 daily infections and 800 dailydeaths. India, however, cannot breatheasighofrelief.While10 districts account for a majority of infections,cases are rising in other parts where migrants are returninghome.Chhattisgarhis Thousands of migrant workers from Mumbai queue up to board a Shramik Special train, outside the CSMT station on Tuesday EXPRESS PHOTO: GANESH SHIRSEKAR Rising burden Daily infections Bangladesh Iran Saudi Arabia Mexico Peru Chile India Russia Brazil US 1,975 2,023 2,235 2,485 4,020 4,895 6,535 8,946 11,687 19,064 Data as of May 26 Source: Our World in Data COVID-19 UPDATE 1,50,671 TOTAL CASES 4,348 DEATHS SO FAR 5,918 NEWCASES reporting a doubling of cases every four days,so are Uttarakhand andAssam. Continued on Page 2 Uber India lays off 600 workers as Covid-19 impacts business FE BUREAU New Delhi, May 26 UBER INDIA ON Tuesday said it has decided to let go of 600 permanent employees across operations due to the “impact of Covid-19 and the unpredictable nature of the recovery”. The downsizing is part of the global job cuts announced earlier this month, the company said in a statement. The reductioninworkforcehasprimarily impacted job roles in MSMEs may seek own insolvency NO MAJOR side effects of hydroxychloroquine (HCQ) have been found in studies inIndiaandits useshouldbe continued in preventive treatment for Covid-19, the ICMR said on Tuesday. Locusts present in 5 states and spreading FE BUREAU Pune/New Delhi, May 26 BANIKINKAR PATTANAYAK New Delhi, May 26 hedging foreign currency risk hasstayedstubbornlyhigh,”said Harihar Krishnamoorthy, treasurer at FirstRand Bank in Mumbai. “On a fully hedged basis, the spreads on government bonds could even be negative forshort-term paper,thus appetite from foreign investors is going to belacklustre.” Foreigners hold about `1.1 lakh crore or less than 2% of the total outstanding debt. While the government has taken steps to bring in more overseas buyers to soak up its record `22,00,000 crore of central and state government debt, foreigners have found few incentives to buy. Continued on Page 2 Continued on Page 2 AT A TIME when growers of fruits and vegetables in the country are staring at losses due to reduced market access and large-scale crop damages, their problem has been compounded by swarms of locust. The lethal migratory pests have shown their menacing presence in five states namely Rajasthan, Punjab, Haryana and Madhya Pradesh and Maharashtra already and could potentially spread to more states in a jiffy. Unless emergencysteps are taken and spread of locusts is checked, the kharif crops including cotton maybe under risk as sowing is set to start in the northern region from midJune. Government sources in New Delhi said the Centre was keeping a watch on the pest’s movement and taking steps to contain its spread. MILLENNIALS HOOKED ON social media apps but still proud of Swadeshi brand, especially when the foreign product happens to be Chinese,may now have a choice.A student of IIT Roorkee has developed the Mitron app which works exactly the same as ChineseTikTok.It is gaining ● COVID-19 IMPACT ‘Catch-up to trend GDP difficult in 3 years’ FE BUREAU New Delhi, May 26 Continued on Page 2 Continued on Page 2 More than half of Rajasthan’s 33 districts are affected by the invasion of crop-munching locusts Modi in his speeches.No wonder the Mitron app has within a month of its release seen over 5 million downloads from the Google Play Store and also taken the number two spot. Though it is still far behind TikTok's nearly 600 million downloads in India so far, the catchy name and similar usage format maygive the Chinese rival a run for its money. GLENMARK PHARMACEUTICALS on Tuesday said it would begin a clinical trial in Indiatotestacombinationof two anti-viral drugs, favipiravir and umifenovir, as a potential Covid treatment. Though TikTok is popular in India,it has had its share of controversies also over the kind of content it posts. Controversies relate to vulgarity and child pornography for which even the government has sent notices to it in the past. Another controversy relates to whether it stores its data in China. Continued on Page 2 Time ticking for TikTok as Mitron poses a challenge popularityamongtheyounger lot for making and posting short videos. With anti-Chinese sentiment running high even among the millennials, especially after the coronavirus pandemic, the desi Mitron mayfind readytakers as it has an added appeal — the term mitron, meaning firends, has often been used by Prime Minister Narendra Continued on Page 2 THE COVID-19 pandemic will likelyinflict a 10% permanent loss to real GDP, so a catch-up to the pre-crisis trend level of GDPwon’t be possible overthe next three fiscal years, Crisil has said.Afterthe global financial crisis,a sharp growth spurt helped catch upwith the trend withintwoyears.However,this time around, things could be different, the agency said, alluding to the fact that the loss of GDP this time around could be much steeper. GDP grew 8.2% on average in the two fiscals following the global financial crisis. Massive fiscal spending,monetary easing and swift global recovery played a role in a V-shaped recovery then. “To catch up would (now) require average GDP growth to surge to 11% over the next three fiscals, something that has neverhappened before,”the agencysaid. According to the agency, India’s growth is likelyto fall off the cliff and contract 5% in fiscal 2021, mowed down by the Covid-19pandemic.“Economic conditions have precipitously slippedsinceourmid-Aprilforecast of 1.8% GDP growth.The firstquarterwillsufferamassive contractionof25%,”itsaid. In the past 69 years, India has seen a recession only thrice — as per available data — in fiscals 1958,1966 and 1980.The reason was the same each time — a monsoon shock that hit agriculture,then a sizeable part of the economy. SHORT VIDEOS FE BUREAU New Delhi, May 26 the driver and rider support segments, business development,legal,finance,policyand marketing verticals. The total employee count prior to this exercise stood at nearly 2,400. Public transport services in India had been in suspension since the imposition of the lockdown starting March 25. Cab aggregators like Uber and Ola were allowed to resume partial operations only in early May. ICMR: No major side Glenmark to study effects of HCQ Covid drug combo THREAT TO CROPS ● GOVT PROPOSAL WHILE INSOLVENCY PROCEEDINGS against fresh defaulters are proposed to be suspended for a year to soften the Covid-19 blow, the government is considering a proposal to allow MSMEs to approach the adjudicating authority to declare them insolvent if they so wish to pursue a resolution of their stressed assets. However, creditors can’t drag MSMEs to the National Company Law Tribunal (NCLT) during this one year. If approved, the move will be part of a special framework under Section 240-A of the Insolvency and Bankruptcy Code (IBC) that the government has proposed to bring in to offer certain flexibilities to MSMEs battered by the pandemic, sources told FE. FPIs flee India’s bonds when it needed them KARTIK GOYAL Mumbai, May 26 DAILY COVID CASES ILLUSTRATION: ROHNIT PHORE AIRPORTS ACROSS the country handled 325 departures and 283 arrivals with 41,673 passengers till 5 pm on Tuesday even as flight cancellations continued with passengers facing difficulties, reports PTI. Moreover, domestic operations resumed in Andhra Pradesh on Tuesday, a day after the restart of air travel across India. West Bengal was the only state where no domestic services took place. Since the lockdown relaxations in early May, e-way bill generation on GSTN portal has risen steadily 13.3 Day 2: 325 flights depart till 5 pm, cancellations on GST compliance rises to half of usual level 8 6.2 5.5 8 6.7 5.6 6.3 5.1 5.4 THE SUPREME Court on Tuesday asked the Centre and Reserve Bank of India (RBI) to respond to a plea challenging levy of interest on loans during the moratorium period, which has now been extended by another three months till August 31 due to the coronavirus pandemic, reports PTI. TRANSACTIONS UP 21.5 19.6 IN THE NEWS Interest on loans in moratorium: SC notice to govt, RBI
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