OPINION, P6 ECONOMY, P2 SURJIT S BHALLA Economic package combines structural reforms with macro-policy INTERNATIONAL, P4 S SUBRAMANIAN ON TRACK ‘CURRENT FORMAT OUTDATED’ Boost banks’ equity bases and get them to lend; else the economy will sink further Railways resuming regular passenger services from today Trump defers G7 summit, wants India, South Korea, Australia in grouping NEW DELHI, MONDAY, JUNE 1, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 78, 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 IN THE NEWS Govt notifies ITR forms for 2019-20 MUMBAI GETS ‘JUMBO’ HOSPITALS … (% of bed capacity used) (%) 100 96% 20 1,437 beds 6,099 beds 40 New “Jumbo facilities” have 4,000 beds 0 DCH* DCHC** *For co-morbid & severe cases **For moderate cases Mumbai milestones The Mahalaxmi race course parking space has been converted into a quarantine and hospital facility for treating Covid-19 positive patients EXPRESS PHOTO: GANESH SHIRSEKAR Shifting landscape: Rural India gets infected, green areas turn red FE SPECIALS ■ BRANDWAGON, P10 Not business as usual Beauty salons reopen to offer basic services, but struggle with rising costs and low footfall ■ eFE, P8 Firing up the innovation engine Several IISc incubated startups have developed niche solutions to contain the Covid-19 outbreak ■ PERSONAL FINANCE, P9 Banking & PSU funds a safer bet Banking & PSU funds invest in bonds and debentures of banks and PSUs, thus offering a better credit profile for investment ■ INFRASTRUCTURE, P11 Racing against time and Covid-19 Despite a delay due to the lockdown, the UP govt is pushing to complete the 341-km Purvanchal Expressway by year-end QuickPicks Yes Bank restructures salaries of senior leadership team YES BANK on Sunday restructured the salaries of its senior leadership team, wherein nearly a third of their yearly compensation will be moved to the “variable pay” category, reports PTI. The move to allocate 30% of the total cost to company as variable pay is applicable to the “leadership team” for FY21, an official statement from the bank said. Its larger rival Kotak Mahindra Bank has announced pay cuts for all the employees earning above `25 lakh per annum. PAGE 3 Green zones turn red Rural infections rise June 30 and July 31 are projections Red Zone (% share of infected persons in India) 88.4 87.1 80.5 70.1 (% share of infected persons in India) 1.9 3.3 Orange Zone Lockdown 3 (May 3-17) Green Zone Urban Lockdown 4 (till May 28) tricts as rural or urban, so we haveclassifiedanydistrictwith more than a 30% urban population-share as ‘urban’; in keeping with the average urban-ruralshareforthecountry, and one that has between 20-30% urban population as ‘semi-urban’,therestare‘rural’. Based on this, it turns out that in the last 11 days — between the end of Lockdown 3 on May 5.9 7.5 14.8 26.1 15 45.4 June 30 and July 31 are projections 5.7 5.4 4.7 3.8 73 AS INDIA GETS ready to open up more of the economy,with restrictions such as those on malls and cinema halls likelyto remain in force for some more time, the geography of the Covid-19infectionsischanging quite rapidly.There is no alternativetoopeningtheeconomy, butithasimplicationsinterms ofwhereIndianeedstorampup medical infrastructure. Urban India accounts for around 90% of all infections today, but if infection levels rise as theyare right now,rural areas will account for as much as 15% of all infectionswithin a month, and 26% by the end of July (see graphic). Keep in mind, there is just one functioning primary healthcare centre (PHC) for every 64,800 persons and one PHC doctor for every 38,000. India does not classify dis- More red, more rural 46.1 ISHAAN GERA New Delhi, May 31 Semiurban Rural June 30 July 31 17andMay28—infectionlevels in rural India grew by a compound growth rate of 7.2% per day compared to 4.8%forurban India.Agrowth intheshareofinfectedpersons across the country from 5.9% on May 17 to 7.5% on May 28 may not seem much in itself, but that’s a 27% jump. Continued on Page 2 6,130 7,536 36,000 27,000 18,000 9,000 6,457 May 31 0 May 28 2,500 May 19 5,000 April 29 May 4 7,500 3,229 4,750 10,000 11,536* DCH/DCHC beds Positive cases (RHS) 45,000 12,500 38,220 0 *Including Jumbo facilities PM: Labourers, workers worst hit; penance shouldn’t be in vain EXPRESS NEWS SERVICE New Delhi, May 31 PRIME MINISTER NARENDRA ModionSundayacknowledged the“difficulties”thattheCovid19 pandemic had caused, and said that the “most gravely affected by the crisis are the underprivileged labourers and workers”.Aday after the Centre announced guidelines for the latestphaseoftheexitfromthe lockdown, the Prime Minister cautioned, once again, that “becoming careless or lackadaisicalcannotbeanoption”– and that “after so many hardships, the country’s deft handling of the situation should not go invain”. Inhisthirdmonthlyaddress onradio,MannkiBaat,sincethe lockdown began, Modi said, “There is no stratum in our countryunaffected bythe difficultiescausedbytheaffliction– themostgravelyaffectedbythe crisis are the underprivileged labourers and workers. “Their agony, their pain, their ordeal NET ADDITION HALVES cannot be expressed in words. Whoamongstuscannotunderstand and feel what they and theirfamiliesaregoingthrough! Allofusaretryingtosharetheir distress; the torment… the entire countryis doing that.” However,“all of us also have to bear in mind that after such austere penance, and after so many hardships, the country’s deft handling of the situation shouldnotgoinvain,”Modisaid. “We must not let this fight weaken. Becoming careless or lackadaisical cannot be an option.Thefightagainstcorona is still equallyserious.” “You,your family, may still facegravedangerfromcorona,” thePMsaid.“Wehavetosavethe lifeofeveryhumanbeing;therefore, distancing of two yards, face masks, and washing of hands are the precautions that are to be meticulously followed in the same manner as we have beenobservingthemsofar.Iam surethatyouwilltaketheseprecautionsforyourself,yourloved ones and foryourcountry.” As per RBI index, the rupee was still ‘over-valued’ by almost 16% in April among 36 currencies BANIKINKAR PATTANAYAK New Delhi, May 31 A5.6% DEPRECIATION of the rupee against the greenback since Januaryhas hardlycome as a solace to exporters,as they struggle to cope with an unprecedented cancellation of orders following demand crash in thewake of the Covid19 outbreak and patchy implementation of the home ministry’s lockdown orders by states to facilitate the resumption of manufacturing. Importantly, according to the RBI’s real effective exchange rate (REER) index, based on the export-weighted average of 36 currencies, the rupee was “over-valued” by almost 16% in April, despite the depreciation in recent months. The domestic currency had remained overvalued by just over 16% in FY19 and close to 20% in FY20, according to the index. As such, fresh orders from the EU and the US,the top two markets that have borne the THE THREAT OF Covid-19 that rose in early March resulting in nationwide lockdown in the final week of the month had an immediate, material adverse impact on jobs creation if not jobs themselves, going by the Employees Provident Fund (EPF) payroll data. Net addition to the EPF subscriber base fell sharply from 9.99 lakh in January and 10.21 lakh in Februaryto 5.73 Net addition* to EPF payroll data (lakh) 2020 Jan Feb 5.73 Mar 9.99 10.21 Monthly average (lakh) Sept 2017March 2018 2.21 5.1 March 2019 April 2020 6.54 April 2018-March 2019 * Net addition is new subscribers plus those rejoined minus those who stopped contributing lakh in March. The Centre for Monitoring Indian Economy has recently reported that the unemployment rate in the country shot up to 27.1% in theweek ended May 3, the highest rate ever, owing to a surge in the labour participation rate from the previous week. The CMIE also prognosticated that a further rise in the unemployment rate for the subsequent week, since the lockdown continued. Continued on Page 2 ● ELEVEN YEARS OF NPS Voluntary subscribers at just 13 lakh SURYA SARATHI RAY New Delhi, May 31 ELEVEN YEARS AFTER the NationalPensionScheme(NPS) wasmadeavailabletoallIndian workers and despite its initial hard-sellingbythegovernment as an attractive and credible social-security cover, the pension scheme has seen just 12.7 lakh voluntary subscribers, otherthantheemployeesinthe government sector (where it is mustfornewrecruitssinceJanuary 1,2004),and the employees in the private corporate sector. Compare this to India’s workforce of 45 crore, and it’s evident that the scheme hasn’t caught the fancy of the average Indian worker. As many as 68 lakh government employees withtheCentre,statesandPSUs are nowenrolled underNPS. Continued on Page 2 KIRAN RATHEE New Delhi, May 31 CALL IT THE pandemic effect or the tariff rise effect, but it seems the Telecom Regulatory Authority of India (Trai) has shelved the idea of putting in place floor prices for data and voice tariffs to help the industry tide overits financial crisis. Sources said that even the government,which had last year in November in the aftermath of the Supreme Court’sverdict on adjusted gross revenue dues pushed for the idea, is no more keen on it. Trai,onitspart,hadissueda consultation paperon the subject and the three major telecom operators — Bharti Airtel, RelianceJio,andVodafoneIdea — had submitted their proposal,outlining floorprices for data and voice services. As -5.88 Malaysian ringgit Indian rupee -5.60 -5.09 AS THE ECONOMY slowly starts to reopen, fashion brands such as Marks & Spencer, United Colors of Benetton, Jack & Jones and Vero Moda are strategising to resume operations. While some of them have introduced discounts to entice consumers into buying, others are focus- Discounts galore 50% 50% up to 50% up to 50% up to 60% Vero Moda up to ONLY up to Jack & Jones AND H&M Singapore dollar -4.70 Source: Bloomberg required undertheTrainorms, the regulator was then supposed to conduct open house sessions at four major centres in the country and then issue the order setting the floor. Since tariff is Trai’s domain, it does not need to send any recommendation to the government for approval. However, before the open house sessions could be conducted, Covid led to lockdown. Operators have sincewritten to the Trai to conduct the open house sessions online. But Trai has turned down the proposal.Trai chairman RS Sharma told Economic Times last week,“It may be a betteroption that anyfurther discussion on the issue (floor tariff) is held after the lockdown is completely lifted and normalcy is restored.” Pakistani rupee -0.47 Vietnamese dong -0.06 Bangladeshi taka ● FASAL BIMA Payout slow, insurers yet to pay `6k-cr kharif claims PRABHUDATTA MISHRA New Delhi, May 31 SUGAR Cosmetics. Bestseller brandsJack&Jones,VeroModa and ONLYare alsooffering discounts up to 50%, whereas H&M has discounted its merchandise up to 60%. Apparel retail is among the worst-hit sectors due to the country-wide lockdown imposed to checkthe spread of Covid-19. EVEN AS SOWING for the kharif season of 2020-21 crop year (July-June) is about to begin in a fewdays,settlement of crop insurance claims pertaining to the last kharif season is progressing at a tardy pace despite farmers being already hit by Covid-19. Only 61% of the claims of `15,044 crore have so far been paid by the insurers, a source said. Kharif harvesting is usually complete by January and the government’s stated policy is that the claims will be settled within three months. Of course, in some states, namely Tamil Nadu, Chhattisgarh, Karnataka, Himachal Pradesh, Uttar Pradesh, HarayanaandMaharashtra,insurers havecleared84%ormoreofthe claimsmade byfarmers. The claims honoured by insurance companies for kharif 2019 crop damages reported by farmers under the PMFasalBimaYojana(PMFBY) and Weather-Based Crop Insurance Scheme (WBCIS) were `9,144 crore across the country till May 26. Jharkhand and Karnataka would complete the compilation of data by mid-June,while itmaytakemoretimeinAssam, Madhya Pradesh, Andhra Pradesh and Telangana,where farmers are yet to be paid any claims,the sources said. Continued on Page 2 Continued on Page 2 Continued on Page 2 Fashion retailers turn to discounting, loyal customers ing on their loyal customer base to ring in the sales. Shoppers Stop, which has reopened six stores in the country, is offering discounts upto 50%on brandslikeCelio, Levi’s, Pepe Jeans, Cover Story, AND, Fratini Women, Gipsy, Life and Madame. The company is also running offers on beautybrands like Maybelline, Revlon, Lakmé Cosmetics, L'Oréal, FACES Cosmetics and Indonesian rupiah -4.74 RECOVERY ROAD DEVIKA SINGH New Delhi, May 31 Continued on Page 2 Hardly a breather EPF data reflects sharp job losses Trai shelves plan to define tariff floors SURYA SARATHI RAY New Delhi, May 31 maximum brunt of the pandemic, are barely flowing in, exporters told FE. Merchandise exports contracted by as much as 35% in March and 60% in April. Currencies of some of India’s competitors, too, have weakened against the dollar, blunting the advantage for New Delhi. The Malaysian ringgit has depreciated by 5.9% since January,while the Indonesian rupiah has dropped by 5.1%. The Singapore dollar and the Pakistani rupee have weakened by 4.7% each. In software services exports, roughly 28% of payments are made in currencies other than the dollar. According to Ravi Sehgal, chairman of the engineering exporters’ body EEPC, since hardly any exports are taking place, the rupee depreciation doesn’t count much. Engineering goods are the largest segment, making up for over a quarter of the country’s goods export basket. Although the Bangladeshi rupee has held steady and Vietnam’s currencyhas weakened only by 0.5% against the dollar since January, they enjoy much greater cost advantage than India in labour and logistics. (% change vs US dollar since January) COVID EFFECT ILLUSTRATION: ROHNIT PHORE AMID PRESSURE ON tax collection, the all-powerful GST Council meeting is likely to be held on June 14, the first such meeting after the outbreak of Covid-19, reports PTI. Tax collection has been hit due to the lockdown. According to sources, the GST Council meeting planned for June 14 will be held through video conference. 60 12.1 12.4 12 8.5 GST Council meet likely to be held on June 14 80% 80 86 84.4 THE DoT HAS called a meeting of telecom equipment makers, including foreign firms like Samsung and Huawei, to discuss formulation of product link incentive scheme on June 3, according to official sources, reports PTI. A similar scheme was notified on April 1, with an incentive of about `41,000 crore to push electronics manufacturing in the country with special focus on the mobile devices segment. Rupee fall doesn’t suffice to allay exporters’woes Occupancy levels THE GOVERNMENT HAS notified income tax return forms for 2019-20 and made it mandatory for entities to file ITR if deposits in a current account exceed `1 crore or electricity bill in the fiscal is over `1 lakh or spent above `2 lakh on foreign travels, reports PTI. The CBDT has also revised the forms to allow assessees to avail benefits of various timeline extension granted by the government. The government has already extended the deadline for filing all ITRs for the FY20 till November 30. Also the deadline for filing the tax audit report has been extended by a month till October 31. DoT to meet telecom gear makers on June 3 DEMAND SLUMP BITES … As city reaches bursting point
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