OPINION, P6 ECONOMY, P2 EDITORIAL The US’s subpar savings will impact dollar value TIGHTENING IMPORTS IN TIMES OF COVID Decision to open up the space sector was taken in 2000, nothing had moved since STEPHEN S ROACH BACK PAGE, P18 India to check power equipment from China for malware Amazon India to hire 20,000 temporary staff in customer service NEW DELHI, MONDAY, JUNE 29, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 102, 26 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 THE GOVERNMENT HAS again extended the deadline to bid for Air India by two months till August 31 as Covid has disrupted economic activities globally, reports PTI. This is the third time the deadline has been extended. The divestment process for the national carrier was initiated on January 27. India among top-3 Swiss partners for tax info exchange INDIA FIGURES AMONG the top-three countries getting detailed information from Switzerland about bank accounts and beneficiary ownership of entities established by their residents in the Alpine nation, according to the latest study by OECD's Global Forum, reports PTI. 1,164 339 223 892 966 1,390 41,547 55,729 4,262 Vietnam 4G tender: BSNL objects to ban on foreign vendors 5,029 Total goods 1,530 5,973 Exports to EU (In 2019, $m) India IN THE NEWS Govt extends Air India bid deadline till August 31 EXPRESS PHOTO BY GAJENDRA YADAV Indian exporters to feel the heat, China may gain 1,248 845 A RED initiative appears in today’s edition of The Financial Express. This page is an initiative of the marketing solutions team of The Indian Express Group and contains content paid for by advertisers. This page should be read as an advertisement. EU-VIETNAM FTA 586 1,272 FUTURE OF EDUCATION KIRAN RATHEE New Delhi, June 28 LEAVE ME ALONE STATE-OWNED, LOSS-MAKINGBSNLisunderstoodtobein Leather, Rubber Plastics Seafood Clothing Footwear Coffee & items a protest mode on anymove by etc the government to bar foreign 8 9.6 7.5 8 4.5 6.5 3 vendors from participating in Import duty on India (%) its forthcoming tender for Duty may vary within the same product category rollingout4Gnetwork.Though Sources: Ministry of commerce; General Statistics Office of Vietnam; EC the government has not offiucts, plastics, rubber, leather cially taken any such decision, Beijing ramping up and coffee (See the chart). its think tank body, Niti Aayog Importantly,Vietnam will get hasrecentlyrecommendedthat investments in the duty-free access to the EU for BSNL’s 4G network be made SE Asian country 71% of its goods from day one using only locally designed, and 99% after seven years but to overcome barriers Indiansupplieswillcontinueto developed and manufactured (IDDM) products. to its direct EU trade attract up to 9.6% duty (the However,BSNLofficials feel maximum, among the prod- thatifanysuchdecisionistaken uctsfromlabour-intensivesec- by the government and imposed on it, it would BANIKINKAR PATTANAYAK tors,is on garments). New Delhi, June 28 Moreover,tradeana- RULES furthercripple the telco and its revival despite a lysts expect a further OF PANDEMIC-HITINDIANEXPO- jump in investments by TRADE government bailout package of over RTERS, especially in labour- ChinaandothersinVietintensive sectors,areexpecting nam to take advantage of its `70,000 crore.The risk of any their fortune to plummet fur- duty-freeaccesstotheEU,atthe movetobarforeignvendorslike ther,askeycompetitorVietnam cost of India.As such,according Nokia, Ericsson, Samsung, ZTE has clinched a free trade agree- to a Nomura report last year,as orHuaweifromparticipatingin ment (FTA)with the EU. many as 26 of 56 companies thetenderwouldmeandelayas The pact will raise competi- that relocated out of China well as cost escalation in protionbetweentheAsianrivalsfor betweenApril2018andAugust curement of equipment by more than 25%. Officials said the lucrative EU market in a 2019,set up shop inVietnam. that it is ironical that the govrange of products such as garernment which is providing ments, footwear, marine prod- Continued on Page 13 FE SPECIALS EARLY ADJUSTMENT ■ BSNL feels move to bar foreign vendors like Nokia, Ericsson, Samsung, ZTE or Huawei from participating could jack up procurement cost by over 25% ■ PSU says it has come out with the tender after due deliberations and any external interference in the process is not fair money to the PSU for revival should favour any move which escalates costs as well as delays in rollout of the network. Further, officials point out that if there’s no bar on the private telcos on procuring equipmentfromforeignvendorswhy should it be on a PSU which is expectedtocompetewiththem. BSNLpointed out that it has come out with the tender after duedeliberationsregardingthe latest specifications of technology and any external interferenceintheprocessisnotfairfor acompanywhichissupposedto run on commercial lines. Continued on Page 13 ● MANN KI BAAT Buying Covid-19 health cover While Irdai has allowed insurers to sell short-term Covid–19 health cover, one must go for comprehensive health plan ■ INFRASTRUCTURE, P11 Work moving in high gear Construction has started on a 497-km stretch of the 1,261-km Delhi-Mumbai Expressway, expected to be ready by 2023-24 ■ SCIENCE & TECH, P12 Sink the clipper Why check source codes, check apps too. But create a system for it first Increase in tax devolution to states (%, 5-year FC award period over previous FC period) Continued on Page 13 Increase in devolution as a share of divisible tax pool (pps) 12th FC 127 1 13th FC 105 126 10 (` crore) FY20 FY21 1.5 14th FC Monthly tax devolution 49,544 ■ PERSONAL FINANCE, P9 42,000 Quantum computers will disrupt multiple businesses and create vaulable solutions, says Honeywell’s Akshay Bellare 49,544 Business of quantum computing 46,083 ■ eFE, P8 THE CENTRE HAStriedtomitigate the state governments’ pain from an unmanageable revenue decline in Aril-May by generouslytransferringalmost double the gross amount it collected during the period to the states as their share of central taxes.However,this has proven to be unsustainable; June tax transfers to states are understood to be 9% less than the monthly transfer of `46,083 croreintheApril-Mayperiod,at around `42,000 crore. The customary pattern is the Centre makes adjustments on state tax transfers based on actualreceiptsonlyduringFeb- 49,544 Fintech companies are launching services to digitise general trade stores, but monetisation will be tricky PRESS TRUST OF INDIA New Delhi, June 28 ruary-March, the final two months of a fiscal.Till then the states get their shares as budgeted. Since states are facing a huge shortfall in their own tax revenue (including S-GST collections the shortfalls ofwhich are not duly compensated owing to the overall decline in GSTrevenue growth),the deviationfromthispracticesoearly in the fiscal will hit them hard. Also,the Centre’s claim that it has transferred the entire budgeted amount to states as tax devolution in April-May maynotstrictlyholdtrue,given that in the comparable period in FY20, the monthly transfer was higherat `49,544 crore. 46,083 Courting the kiranas PM: In unlock phase, focus on defeating virus, boosting economy PRASANTA SAHU New Delhi, June 28 ■ BRANDWAGON, P10 Centre cuts June tax transfers to states by 9% April May June Tax devolution budgeted for FY21 is `7.84 lakh crore versus `6.5 lakh crore released in FY20 THE COUNTRY WILL have to focusondefeatingcoronavirus and bolstering the economyas it exits from the lockdown and enters the “unlock” phase, PrimeMinisterNarendraModi said on Sunday underscoring the need to keep guard against the deadlyvirus. He stressed that India has always transformed adversities into stepping stones to success and thisyearwon’t be different. “Duringthis unlock period,one will have to focus on two points — defeating coronavirus and strengthening the economy,” Modi said in his monthlyMann ki Baat radio address. He said during the unlock period, people have to remain morevigilant.Hisremarkscome against the backdrop of rising cases of coronavirus. “Always remember,if you do not wear a mask, do not observe the twoyard social distancing norms or do not take other precautions, you are putting others at risk besides yourselves, especially the elderly and children at home,” he cautioned. Sardar Patel Covid Centre with a 10,000-bed facility in New Delhi’s Chhatarpur on Sunday TRUE PICTURE More testing may see Mumbai become corona capital again Spurt in Delhi’s testing caused jump in virus cases ISHAAN GERA New Delhi, June 28 Brisk June sowing brightens farm sector growth prospects THE NORMAL onset and steady progress of monsoon have increased the sowing area under kharif crops to more than double the level a year ago until June 26, reports fe Bureau in New Delhi. By June 19, the increase was 39%. This has boosted the prospects of another year of record grains production in the country. PAGE 2 Now, claim I-T exemption on conveyance allowance THE GOVERNMENT has allowed individuals under new lower tax regime to claim I-T exemption on conveyance allowance received from employers, reports PTI. The CBDT has now amended income-tax rules to prescribe certain exemptions which can be availed by the employees. ASTHEMOVIEtheatrebusiness came to a standstill due to the pandemic,the demand for theatre screens plummeted. This made UK-based Harkness Screens devise a new way of keeping its factories running andworkers occupied in India. Aftermuch deliberations,it has started manufacturing medicalcurtains,tableclothfor restaurantsandscreenbarriers which can be used between desks in offices, between seats in theatres or between two tablesinrestaurants—allfrom the same PVC material used in Delhi GUNJAN SHARMA New Delhi, June 28 6,045 3,800 Mumbai 5,311 0 Jun 01 Home-based testing kits could soon be a reality and this fell to 27 in the latest week. Since Delhi did, on an average, 12,000 more tests than Mumbai every day for the last week, this means 84,000 extra overtheweek. HOME-BASED COVID-19 TESTING kits could soon be a realitywiththeIndianInstitute of Technology (IIT) Delhi and the National Chemical Laboratory (NCL) Pune working on an alternative testing method which will also deliver quick results.The collaborative projectwith the NCL,which comes undertheaegisoftheCouncilof Scientific and Industrial Research (CSIR), has also receivedfinancialsupportfrom MicrosoftIndiaandisexpected to be readyin a month’s time. According to the team, the projectaimstodevelopanELISA (EnzymeLinkedImmunoassay) based diagnostic serological assay against Covid. If successful,itwill create an economical, commercial process for manufacturing the antigens used in ELISA and home-based diagnostic kits to offer an effective, quick, robust and affordable diagnostic solution to manage the Covid outbreak. — PTI Continued on Page 17 Continued on Page 17 Jun 25 …push infection levels 4,800 3,788 4,000 3,200 2,400 1,600 800 0 Delhi 1,295 1,244 Mumbai Jun 01 1,144 Jun 25 Source: BMC data, Delhi's Medical Bulletins COVID-19 UPDATE 5,28,859 TOTAL CASES 16,095 DEATHS SO FAR 19,906 NEWCASES FCI LOANS Interest outgo jumps, inflates NFSA cost PRABHUDATTA MISHRA New Delhi, June 28 THE STEADYAND steep rise in borrowings by the Food CorporationofIndia(FCI)overthepast fewyears to keep its operations uninterrupted by a liquidity crunchcausedbydelayed/inadequate release of funds by the government is inflating an already high food subsidy bill evenfurther.Asthechartshows, stepped-up FCI borrowings, Over 6% of the economic cost of the rice distributed under food security law is now on account of the interest outgo on FCI debt though it largely comprises National Small Savings Fund loans,havestillledtoasteeprise in FCI’s debt servicingcost. Given that the Centre is the guarantor for these loans, its FCI’s debt stood at a whopping `3.3 lakh crore at FY20-end, a large part of this is NSSF loans interest cost on these FCI loans is now a tidy sum and increasingly a significant element of the economic cost of grains. Continued on Page 2 ● DISPARATE QUALITY Lockdown forces companies to innovate SHUBHRATANDON Mumbai, June 28 15,000 5,000 MUMBAI’S SUCCESS IN controlling the spread in slums like Dharavi has played a big roleinthecity’sslowingCovid19 infections, but that is not the only reason why the nation’s capital has also become the country’s Covid capital; on Thursday, with 70,390 infections,Delhi overtook Mumbai which had 69,625 infections. An equally big reason for this, however,was also the fact thatwhileDelhihasrampedup testing levels from 6,045 on June 1 to 17,533 on June 21, Mumbai has been almost stagnant,withthelevelofdailytesting rising from 3,066 to just 4,206 during the same period. Agoodwaytoseehowmany extrainfectionsMumbaiwould have had were more testing to be done is to examine the‘positivity’ levels, or the number of freshinfectionsasaproportion ofthenumberoftests.Thepositivity rates in Mumbai were 33.6 in the first week of June 19,057 20,000 10,000 NEW VISTAS QuickPicks Delhi tests soaring… 25,000 making cinema screens. For what it could not produce with screen material, it sourced from outside,which is thePETusedinmakingcold drink bottles, to make face shields. Preetham Daniel,seniorvicepresident (Asia), Harkness Screens,told FE that he feels these face shields will be in great demand once its core client base — movie theatres – start opening up. “One of the advantages that we had was that our PVC was always anti-microbial in nature and the fact thatitisPVCitcanbeeasilysanitised,” Daniel said. According to Daniel, the innovation has led the companytoworkwithmanydifferent industries like retail, airports, hospitals, hotels and even the government. “PVR has placed an order with us for face shields while we are approaching ITC hotels who are converting some of their hotels into quarantine centres.They may not want to use expensive curtains on the windows and which is where we feel our medical curtains could be of use,”he said. ILLUSTRATION: ROHNIT PHORE Continued on Page 17 In rural India, degrees don’t make doctors ARJUN MUKHERJEE New Delhi, June 28 NEARLY 75% OF villages in India have at least one healthcare provider, as per a study. However,thebulkofthehealthcare providers in the villages — 68%—don’thaveformalmedical education degrees, while 24% are qualified Ayush practitioners, and only 8% are MBBS degree-holders. The studyled byresearchers at the Delhi-based Centre for Policy Research, Georgetown University, and University of California-San Diego — covering 1,519 villages in India’s 19 New Delhi State of the matter ■ Over two thirds of healthcare providers in India's villages lack formal medical degrees, according to a study most populous states — found that private sector healthcare providers,including those who don’tholdformalqualifications, dominateruralhealthcaremarketplace,makingup86%ofthe providerpopulation. Continued on Page 17