OPINION, P6 ECONOMY, P2 EDITORIAL Don’t bar whistleblowers from flagging competition violations ‘BOLD REFORMS NEEDED’ COVID CRISIS S&P’s projected 8.5% for FY22 is a stretch with few robust levers of growth VINOD DHALL INTERNATIONAL, P8 PM says reliance on imports should wane Lufthansa plans to cut 22,000 jobs as demand plunges NEW DELHI, FRIDAY, JUNE 12, 2020 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOL. XLVI NO. 88, 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: 33,538.37 ▼ 708.68 NIFTY: 9,902.00 ▼ 214.15 NIKKEI 225: 22,472.91 ▼ 652.04 HANG SENG: 24,480.15 ▼ 569.58 `/$: 75.78 ▼ 0.19 `/€: 86.19 ▼ 0.25 BRENT: $39.49 ▼ $2.24 GOLD: `47,000 ▲ `374 CORONA INFECTIONS AGR DUES This is lower than in other countries, is good news as it means fatality rates are just 0.08% SC pulls up DoT for raising `4L-cr demand on PSUs; wants telcos to furnish guarantees to avail deferred payment Around 1 cr Indians were infected, sero-survey finds SARTHAK RAY New Delhi, June 11 RUSSIA INDU BHAN New Delhi, June 11 A medical team at Dharavi in Mumbai on Thursday Deaths Infected persons 2.8% ...what sero-survey tells us 0.73% Had Covid at some point Infection fatality rate 0.08% crore people were infected by Covid-19 and did not even report it,it suggests the level of the infection is quite mild, or easilytreated. Continued on Page 2 Special Feature ‘We’ll focus on ensuring accessible price points’ L’Oréal India’s Kavita Angre on how VR could boost online sales of cosmetics, and why firms must have products that fit across the price pyramid ■ BrandWagon, P9 QuickPicks Hotels as Covid hospitals: HC forms panel to look at feasibility THE DELHI High Court on Thursday formed a two-member committee, comprising AIIMS director Randeep Guleria and NITI Aayog member VK Paul, to look into the issues being faced by Hotel Surya and Crowne Plaza for converting their premises into hospitals to treat Covid-19 positive cases, reports Rishi Ranjan Kala in New Delhi. The panel will suggest whether such an exercise is feasible or not. Continuing the hearing on petitions of Crowne Plaza and Surya, the court asked whether the Delhi government had done a study before passing the May 29 order. PAGE 4 Petrol, diesel prices increased for fifth straight day PETROL AND diesel prices on Thursday were hiked by 60 paise per litre each — the fifth straight daily increase in rates since oil PSUs ended an 82-day hiatus in rate revision, reports PTI. Petrol price in Delhi was hiked to `74 per litre from `73.40 while diesel rates were increased to `72.22 a litre from `71.62, according to a price notification of state oil marketing companies. Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT. Price fixing: Third suit filed in US against Sun Pharma,Lupin,others AS PART of an ongoing investigation, a third complaint has been filed in the US District Court for Connecticut against 26 drug manufacturers, including Aurobindo Pharma, Sun Pharma, Glenmark, Wockhardt, and Lupin, among others, accusing them of conspiring to reduce competition and drive up generic drug prices, reports fe Bureau in Hyderabad. The lawsuit follows similar cases over generic drug prices brought in 2016 and 2019. The first complaint, still pending in the US District Court in the Eastern District of Pennsylvania, was filed in 2016 and the second, also pending in the same court, was filed in 2019. PAGE 4 ISHAAN GERA New Delhi, June 11 DESPITE NEARLY 70 LAKH migrants returning to their homes in rural India, infection levels have not increased at the ratesfearedbymany.Aroundan eighth of those infected with Covid-19aretobefoundinrural areas on Thursday compared with overa tenth on May28. A total of 18.7% of the infected are to be found in rural and semi-urban India,up from 16.8% on May 28. While complete data from 734 districts was not available earlier, an analysis of 430 districts for which the data was Going rural (% of infected persons) May 28 June 10 Urban Semi-urban 12.2 8,103 10.5 Case fatality rate 6.5 2,80,000 6.3 What we know so far... An eighth of infected people in rural India 83.2 Corona pathways EXPRESS PHOTO:GANESH SHIRSEKAR 81.2 AROUND A CRORE Indians — 0.73%ofthepopulation—were exposed to Covid-19, the first part of ICMR’s sero-survey found.Thesecondpart,toexamine the spread in containment zones,is ongoing,though some media reports had earlier reported the interim findings. Thesurveydidn’tgivedetailsfor urban and rural areas, but said the risk of getting infected in urban areas and urban slums was higher.The date of the survey is not clear; all that ICMR says is itwas conducted in May. A one crore number is 35 times higherthan the280,000 infected that the country reports based on the conventional RT-PCR tests, but contrary to what it suggests, the infection level is a good thing (see graphic). Based on the RT-PCR data, with 8,103 people dying of Covid-19,Indiahasa‘casefatalityrate’of2.8%.Whenthesame numberofdeathsaredividedby the number got from the serosurvey, the ‘infection fatality rate’ drops to a much lower 0.08%.Those requiring hospitalisationorwhoarecriticalwill alsofallaccordingly.Indeed,if1 Non-telecom PSUs sail through, but fate of telcos remains unclear Rural available showed that on May 28, 7.5% of the infections came from rural India; this numberwas 5% on May 3. Continued on Page 2 TESTING TIMES India has 'gold standard' in debt servicing: CEA FE BUREAU New Delhi, June 11 Growth V-shaped recovery possible, as was witnessed after Spanish flu, which was far more devastating than Covid-19 followedbyaV-shapedrecovery, he had said, drawing a parallel with a similar rebound witnessedaftertheSpanishfluoutbreak,which was,in fact,much more devastating. Continued on Page 2 AGR dues paid Bharti 43,980 Airtel 18,000 Vodafone Idea 58,254 6,854 Tata 16,798 Tele 4,197 Bharti, Vodafone Idea & Tata Tele had done self-assessment of dues ues which were lower than DoT's but the SC rejected it on March 18 (` crore) `1.72 lakh crore 48,489 Gail India Oil India 22,063 15,020 5,482 PowerGrid GNFC DMRC Vodafone Idea 12 11 Bharti Airtel Intra-day on BSE (`) 585 11.17 9.39 10 9 8 7 575 Intra-day on BSE (`) 571.95 551.60 565 555 545 Prev close: 10.82 Open Close responsible for issuing demand notices to the PSUs. “We will request you to withdrawthe demand on PSUs otherwise we will take strict action. It’s an outright misuse ofourverdict.Youaremakinga demand of `4-lakh-crore.This iswhollyandtotallyimpermis- 535 Prev close: 567.25 Open Close sible,”Justice Mishra said. On the plea of the telecom operators who are seeking (and the government is supporting) to pay their dues in instalments spread over a 20year period as the amount totals a staggering `1.67 lakh crore, the bench sought to FE BUREAU Households saving more, borrowing less Households saved a lot more in 2019-20 even as they borrowed less as reflected in the muted demand for home loans in parts of the year. Given the uncertainty over incomes and jobs, savings could continue to stay high in the current year; the already high level of savings parked with banks as deposits could increase further. Net ﬁnancial assets of households (As % to nominal GDP) 20 (%) Composition of household ﬁnancial assets* - outstanding position (As at end-March 2020) 13.4 10 Life insurance funds 5 0 -5 MFs Currency 15 Finmin has evaluated pros & cons of several options; monetising deficit is one of them Have to sort out existing issues, else a bad bank will just be another addition to the already existing 28ARCs Total AGR dues as per DoT Uncertainty Funding deficit Bad bank (` crore) Demand raised on some of the PSUs THE NON-TELECOM PSUs got a major relief from the Supreme Court on Thursday but the fate of telecom operatorslikeBhartiAirtelandVodafone Idea continued to hang in balance in the adjusted gross revenue (AGR) dues matter. Coming down heavily on the department of telecommunications (DoT) for issuing demand notices of around `4lakh-crore to a clutch of PSUs having telecom licences and spectrum, a bench led by JusticeArunMishrasaidthemove was a grossmisuseof its earlier ruling on the matter.Thejudge saidthattheoriginalorderpertained to the telecom operators and did not apply to the PSUsandthereforewas“totally impermissible”. It asked the DoT to withdraw the demand and gave it three days to file a reply.The court also warned of action against the official CEA-SPEAK DAYS AFTER RATING agencies predictedasharpspikeinIndia’s debt levels to 80-84% of GDP, chief economic adviser (CEA) KrishnamurthyVSubramanian on Thursday asserted that the country’srecordinbothwillingnessandabilitytopayoffdebtis nothingshortof“goldstandard”. Evenwhenthecountryfaced itsworstbalanceofpaymentcrisis in 1991,it honoured its debt commitment by mortgaging gold,hesaid.MostofIndia’sdebt is in the domestic currency,and not foreign currency,he added. The CEA refrained from offering a precise growth forecast forthe current fiscal due to the existence of several variables.However,he said the time ofarecoverywilldecidewhether the country will witness a contractioninthisfiscalornot.Earlier, he had predicted 1.5-2% growthforFY21,withacontraction in the first half.This will be DoT demand & payments made by telcos Gross ﬁnancial assets Net ﬁnancial assets Gross ﬁnancial liabilities June 2017 Feb 2020 Source: RBI Bulletin June 2020 23.2 Mkts extend losses as investors assess higher valuations 34,200 52.6 Cooperative banks 3.8 Commercial bank deposits *Outstanding data have been provided for select ﬁnancial instruments for which data are available 33,800 33,600 33,400 BIOFUEL BOOST 10,175 10,100 Nitin Gadkari petroleum, food, agriculture and MSME, and chairman of the food corporation of India (FCI) this week in this regard. Once the proposal is finally implemented,it will be for the first time that the countrywill be using grains fit for human consumption to manufacture bio-fuel, industry executives say. This also signals a fundamentalshift inthe approachof the government that had in the past refrained from such a move for fear of jeopardising food security. Continued on Page 2 1 IIT Madras 83.88 2 IISc Bangalore 82.28 3 IIT Delhi 78.69 4 IIT Bombay 78.62 5 IIT Kharagpur 74.31 the country, followed by IIM Bangalore and Calcutta. Union HRD minister Ramesh Pokhriyal 'Nishank' announced that Miranda Col- TOP 5 | UNIVERSITIES 1 IISc Bangalore 82.28 2 JNU Delhi 68.68 3 BHU Varanasi 64.55 4 UoH Hyderabad 61.85 5 CU Kolkata 60.87 legebaggedthetoprankamong colleges, followed by Lady Sri RamCollegeforWomen,Hindu CollegeandStStephen’sCollege. As per the rankings,the top TOP 5 | MANAGEMENT INST. IIM Bangalore 81.34 1 2 IIM Ahmedabad 80.61 3 IIM Calcutta 79.05 4 IIM Lucknow 67.29 5 IIM Indore 67.01 three engineering colleges in the countryare IITMadras,IIT Delhi and IIT Bombay. Continued on Page 2 New Delhi Previous close 34,247.05 Open Close Intra-day, June 11 10,094.1 10,025 9,800 Govt to allow ethanol production from surplus rice, says Gadkari TRANSPORTAND MSME ministerNitinGadkarionThursday said the government is consideringallowingethanolproduction from surplus rice, and not justfromcanejuiceormolasses. Gadkarisaidhehadameeting with PK Sinha, principal adviser to Prime Minister Narendra Modi, and secretariesfromthedepartmentsof 33,538.37 Nifty50 9,875 FE BUREAU New Delhi, June 11 Intra-day, June 11 34,214.69 34,000 (%) 9,950 TOP 5 | OVERALL IISc Bangalore, Jawaharlal Nehru University and Banaras Hindu University. IIM Ahmedabad has been ranked as the top B-School in ● TAKING A TUMBLE 34,400 IIT-Madras best institution in country; 7 IITs in top 10 IIT-MADRAS, IISC BANGALORE andIIT-Delhibaggedthe top three positions among educational institutions in the country in the HRD ministry’s NationalInstitutionalRanking Framework (NIRF) announced on Thursday. The top 10 higher educationinstitutionsinthecountry included seven Indian Institutes of Technology (IITs). As perthe annual rankings, the top three universities are Continued on Page 2 Sensex 7 HRD RANKINGS PRESS TRUST OF INDIA New Delhi, June 11 know how can they securitise the amount.It wanted the telcos to furnish bank guarantees or the directors of the companies involved to give personal guarantees. The SC asked them to file their replies by nextThursday(when the matter will be taken up again) on their roadmap to pay the dues — how much time they want and what kind of securities can they provide. Putting across the government’splanofallowingthetelcos to pay up in a staggered manner over a 20-year period, solicitorgeneralTusharMehta said that one-time recovery of the amount would hit the operations of the telcos and even send some into liquidation and the network of the otherplayers is not that robust thatitwould beableto takethe load of subscribers of the bust company thus leading to consumer inconvenience. Clearly unimpressed and insisting for some form of guarantee, the bench asked, “Who knowswhatwill happen in 20 years?” Mukul Rohatgi,counsel for Vodafone Idea, said that spectrum and licences were the best guarantee and if the company failed to pay up, the governmentcancancelitslicences and take back the spectrum. Previous close 10,116.15 Open 9,902 Close BLOOMBERG Mumbai, June 11 STOCKS FELL ON Thursday, extending their earlier losses, as investors weighed whether valuations have become too stretched following two straight weeks of gains. Sensex fell 2.1% to end at 33,538.37,while Niftyslipped by the same magnitude. Both measures have rebounded about 30% since their record slide on March 23. The price-to-earnings ratio for Sensex has already returned to its long-term average for the past seven years and in the previous two days, the index has failed to cross its 100-day moving average, seen as a technical threshold for a bullish streak to continue. “After a 30% rally, I don’t think there is major value left in the market,” said AK Prabhakar,head of research at IDBI Capital Market Services in Mumbai.“The run-up in prices has spread to some companies thatmightnotsurvivethenext fewyears.” Eleven out of 34 Nifty 50 companies that have reported quarterly results so far have beaten or matched analyst estimates. The yield on the mosttraded 6.45% 2029 bond rose by one basis point to 5.99%, while the rupee dropped 0.3% to 75.7850 per dollar.
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