OPINION, P8 ECONOMY, P3 EDITORIAL Covid impact on supply alone doesn’t explain food inflation showing BANKRUPTCY PROCEEDINGS MORE HEADWINDS Bhushan contempt case signals intolerance; good that AG stopped this against Swara Bhasker RENU KOHLI INTERNATIONAL, P10 PNB receives `24 cr from 3 Nirav Modi companies: Govt Xi warns 'period of turbulent change' as external risks rise NEW DELHI, WEDNESDAY, AUGUST 26, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 152, 22 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: 38843.88 ▲ 44.80 NIFTY: 11472.25 ▲ 5.80 NIKKEI 225: 23296.77 ▲ 311.26 HANG SENG: 25486.22 ▼ 65.36 `/$: 74.32 < > 0.005 `/€: 87.84 ▼ 0.03 BRENT: $45.68 ▲ $0.55 GOLD: `51635.00 ▼ `389.00 — ● NPS DATA New govt employment in June down 60% from FY20 level FE BUREAU New Delhi, August 25 NEW EMPLOYMENT IN the government sector fell by over 60% in June 2020 compared withthemonthlyaverageofthe lastfinancialyear,datareleased by National Statistical Office (NSO) onTuesdayshowed. The Central government had introduced the National Pension System (NPS) with effect from January 1, 2004 (except for armed forces) on a mandatory basis. All the employees of Central autonomous bodies who have joined on or after the above mentioned date are also mandatorily covered under government sector of NPS. Subsequent to Central government, various state governments also adopted this architecture and implemented NPS with effect from different dates. As per the latest NSO data, only 3,537 new subscribers joined in the NPS from the central government sector compared with the monthly average of 9,213 in FY19 and 9,904 in FY20. Continued on Page 2 STIMULUS FM hints at GST cut on two-wheelers Also says govt needs to move fast on PSU sales, including banks FMSPEAK ■ Structural reforms a key priority, govt reaching out to industry to address concerns Open to more changes in the FE BUREAU New Delhi, August 25 `3-lakh-crore EVEN AS THE government is battling a much-reduced tax buoyancy and a yawning revenue deficit,finance minister Nirmala Sitharam on Tuesday kept alive industry’s hopes for further tax cuts.Responding to an observation made by attendees at a CII event, on the need for lowering the rate on two-wheelers, the minister said it was “indeed a good suggestion,as this category is neither a luxury nor a sin good and hence merits a rate revision”. credit guarantee scheme ■ There can’t be a better time (than this) for exemplary cooperation between govt, regulators and industry ■ Home secy has urged states not to curb movement of goods & people ■ With post-Covid reset, fresh investments can flow into FinTech Continued on Page 2 NPA-IMPACT Moody's downgrades State Bank to ba2 ■ However, the Agency attributes downgrade to an expected delay in recovery in asset quality, profitability FE BUREAU Mumbai, August 25 MOODY’S INVESTORS SERVICE said on Tuesday it has downgraded State Bank of India’s baseline credit assessment (BCA) and adjusted BCA to ba2 from ba1. The agency attributed the downgrade to an expected delay in the recovery in asset quality and profitability at the country’s largest lender due to the deepening economic slowdown. rating outlook could be changed to stable if India’s rating outlook is changed to stable Moody's downgraded SBI’s baseline credit assessment (BCA) and adjusted BCA Moody’s said it was unlikely the rating would be upgraded in the next 12-18 months Moody’s said it was unlikely the rating would be upgraded in the next 12-18 months though the rating outlook could be changed to stable if India’s rating outlook is changed to stable. Moody’s could downgrade SBI’s ratings Continued on Page 2 if India’s sovereign rating is downgraded. The downgrade reflects Moody’s view that the bank’s asset quality and profitability will deteriorate. Continued on Page 2 Recovery is losing strength, says RBI PRESS TRUST OF INDIA Mumbai, August 25 FE BUREAU Mumbai, August 25 THE GOVERNMENT MAY look at introducing a second set of fiscal stimulus measures once the Covid-19 infections abate and the psychological fears in people’s mindsebb,atopfinanceministry official said on Tuesday. The government has also observed 40% of the cash transfers directly into the beneficiaries’accountsrecentlyhavebeensaved,notspent. Continued on Page 2 THE RESERVE BANK of India saidonTuesday,theupticksin high-frequency indicators thatbecamevisibleinMayand June after the lockdown were eased in several parts of India, appeartohaveloststrengthin JulyandAugust,mainlydueto re-impositionorstricterimposition of lockdowns.This suggested the contraction in economic activity will likely prolong into Q2,theRBI said. Shaktikanta Das, governor, RBI Detailed reports on P12 700 600 500 400 300 200 100 0 12,500 TATA MOTORS (TML) chairman N Chandrasekaran on Tuesdaysaidthatthecompany is targeting to be a near zero debtcompanyinthenextthree yearsbyreducingexpensesand selling non-core assets. The company’s net automotive debt stands at `48,000 crore. Speaking at the company’s 75th annual general meeting, Chandrasekaran said that while carving out the passengervehicle business is on track and should be completed it in thecurrentfinancialyear,there isnointentiontosellthatbusiness or that of Jaguar Land Rover (JLR). “We have already taken steps andhave a target forTML Grouptogeneratepositivefree cashflowsfromFY22onwards. Overall investments of the group have reduced by 50% during this fiscal year, and we Jul Oct RT-PCR tests* 10,000 7,500 2,500 Jan Mar 0 Apr Jul Oct FM RADIO PTI Jan Mar Operation Twist BLOOMBERG Sovereign bonds gain as RBI steps in QuickPicks Apple to start selling online in India next month APPLE IS poised to open an online store for the first time in the fast-growing smartphone market of India next month, according to a person with knowledge of the matter, taking advantage of a relaxation of once-strict prohibitions against foreign direct retail, reports Bloomberg. The online store will be ready for operations just ahead of the Dussehra-Diwali spending season, according to the person, who asked not to be named discussing confidential plans. The company, which lobbied New Delhi for years to get around regulations that force companies such as Apple to source 30% of components locally, had originally planned to start online sales within months after the government relaxed the rule last year. P6 Sovereign bonds gained after the RBI said it would step in with debt purchases amid rising yields. The rupee was steady after a sharp rally late on Monday. The yield on the most traded 5.79% 2030 bond fell 7bps to 6.16%; the new 5.77% 2030 bond yield was down 4bps to 6.13%. The RBI will resume its Operation Twist after weak demand at two successive auctions and inflation concerns drove up yields. Aug 24, 2020 ISHAAN GERA New Delhi, August 25 Finance minister Nirmala Sitharaman and MoS of finance, Anurag Thakur, with deputy secretaries of the Department of Financial Services in New Delhi Source: Crisil Research Overall positivity rate # (RHS) July 3, 2020 10-year bond yield Intra-day (%), August 25 6.150 6.135 6.129 6.083 6.120 6.105 6.090 6.075 6.060 Open Close ON TUESDAY, WITH 1,061 people testing Covid-positive of the 11,910 tests done, Delhi recorded a positivity rate of 8.9%.The last time the capital showed a similar positivity rate was July 20 when the positivity was 8.3%. So, are infection levels once again rising in the city — they had fallen to a low of 5.1% on August 7— or is it a change in the kind of tests being done? Delhi’s positivity levels started falling when it began conducting more Rapid Antigen Tests (RAT). From 21.4% on June 2,when there were no RAT tests,the positivity fell to 12.8% on June 30 by when the share of RAT had climbed to 45%; and on July 31, when RATfurtherincreased to 70%, the positivity fell to 6.3%. Continued on Page 2 Intra-day (BSE), Aug 25 130 Prev. close: 121.2 126 122 127.05 121.55 118 Open Close Tata Motors to reduce automotive debt in 3 years Plans to sell non-core assets ■ No plans to sell passenger vehicle or JLR business ■ PV business cash positive from FY23 onwards ■ Difficult to reverse TML and JLR losses of Q1 in the remaining year ■ JLR cash positive from FY22 onwards will continue to manage this tightlygoingforward.TheTML Group will also look to unlock non-coreinvestments,”hesaid. Continued on Page 2 ● BHUSHAN CASE 5,000 Apr Tata Motors 114 FE BUREAU Mumbai, August 25 When Delhi tests more, it ﬁnds more FY21 FY20 FY19 Average monthly wage rates over April-July this ﬁscal increased 12% on-year (₹ per day) FY21 205 FY20 200 FY19 195 190 185 180 175 170 165 160 155 Will save costs of £2.5 billion at JLR and `6,000 crore in domestic business during FY21 Infections up, or is it more RT-PCR tests? Average increase in work under MGNREGA over April-July this ﬁscal jumped 46% on-year (million person days) Tata Motors aims to nearly wipe out debt in 3 years ● COVID IN DELHI Worker incomes double to `1,000 per month MORE THAN ANYTHING else, theruraljobsguaranteescheme is aiding the rural people, includingthemigrantsrecently returned, at this time of grave crisis. The average monthly incomeofapersonwhotookup the work offered under the schemenearlydoubledtoaperfect`1,000inApril-Julythisfiscal, from `509 in the year-ago period, CRISIL Research has estimated. This feat was enabled by a 46% growth onyear in person-days of work, coupled with an increase of 12%inaveragewageunderthe scheme,it added. could downgrade SBI’s ratings if India’s sovereign rating is downgraded Next stimulus post-Covid only ● MGNREGA SURYA SARATHI RAY New Delhi, August 25 ■ Moody’s 75TH AGM 15 * RT-PCR test data is calculated 12 using ﬁve-day moving average 9 # Overall positivity rate 6 shows daily cases upon daily 3 tests (including RAT) 0 Source: Delhi Medical Bulletin Oxford vaccine data could go to regulators this year ALISTAIR SMOUT & SARAH YOUNG London, August 25 TRIAL DATA FOR the University of Oxford and AstraZeneca’s possible coronavirus vaccine could be given to regulators this year but corners cannot be cut to speed up approval for emergency use, a scientist leading the trials said on Tuesday. The Oxford vaccine produced an immune response in its first human trials. Continued on Page 2 SC reserves judgment, AG hopes for leniency FE BUREAU New Delhi, August 25 THE SUPREME COURT on Tuesdayappeared the most circumspect, almost reluctant, to mete out punishment to activist-lawyer Prashant Bhushan,who it held guilty of contemptofcourtforhistweets in June,‘against’ the judiciary includingoneonawidelycirculatedpictureshowingChiefJustice SA Bobde astride a heavy bike.TheconvictionofBhushan had generated a body of disapproving opinion, including those expressed in newspaper editorials and in social media commentaries. While reserving its judgment on the punishment, a BenchledbyJusticeArunMishra observed on Tuesday that“if you are hurting someone,then what is wrong in apologising.” Theremarkwasevenasathreedaywindowgiven to the lawyer to retract or apologise for his tweets had ended on Monday. Refusingtoretractorapologise, Bhushan iterated the tweets “represented”a“bonafidebelief that I continue to hold”and“an apology for expression of these beliefs,conditional or unconditional,would be insincere”and “contempt of myconscience”. Continued on Page 2 MARKET DEBUT SHYCOCAN DEBUTS New hope for neutralizing Covid-19 indoors Ant files for IPO, looking at $225-bn valuation SRINATH SRINIVASAN Bengaluru, August 25 A DEVICE HAVING the ability to neutralise 99.9% of the coronavirus that might be floating in the air in closed spaces, was officially launched on Tuesday. The device — Scalene Hypercharge Corona Canon (Shycocan) — has been invented by Bengaluru-based organisation De Scalene, and can be used to prevent infection and is not medicine or an alterna- ■ Scalene Hypercharge Corona Canon has the ability to neutralise 99.9% of the coronavirus that might be floating in the air in closed spaces ■ The device has been invented by Bengaluru-based organisation De Scalene ■ The device can be used to prevent infection; it is not medicine or an alternative to a vaccine tive to a vaccine that can cure infected people. It can contain the spread of coronavirus in the Indian andAsian region.The product has been launched by Medwin Healthcare and Eureka Forbes, which are two of the several licensees of the product. The device has been designed by a team led by Dr Rajah Vijay Kumar, who had earlier designed Cytotron, a machine to treat cancer more effectively, and does not emit any harmful radiation. “On August 15, all our licensees rolled out the product in the market and Medwin has formally launched the product on Tuesday,” Kumar told FE. Continued on Page 2 BLOOMBERG August 25 BILLIONAIRE JACK MA’S Ant Group filed for an initial public offering in Hong Kong and Shanghai to bankroll its expansion in financial services and bolsteritsleadasChina’slargest online payments platform. The Hangzhou-based companywillissuenolessthan10% innewsharesofitstotalcapital, according to its filing with the Shanghai exchange.Ant generated 72.5 billion yuan ($10.5 billion) in revenue in the first ■ The IPO is meant to bankroll Ant Group's expansion in financial services and bolster its lead as China’s largest online payments platform ■ The Hangzhoubased company will issue no less than 10% in new shares ofits total capital half,afterfull-yearsalesof120.6 billionyuanin2019,itsaid.The firm posted a profit of 21.2 billionyuan in the first half. The crown jewel of the sprawling Alibaba empire,Ant ■ Ant generated 72.5 billion yuan in revenue in the first half, after full-year sales of 120.6 billion yuan in 2019 has been accelerating its evolution into an online mall for everything from loans and travel services to food delivery, inabidtowinbackshopperslost to Tencent Holdings.With data New Delhi from a billion users of itsAlipay app at its back,Ant is pushing broadly into financial services, delivering technology such as artificial intelligence, robo investing and lending platforms.Thesimultaneouslisting could mark one of the biggest debuts in years, and even top Saudi Aramco’s record $29 billion IPO, a person familiar has said.The firm is targeting avaluation of about $225 billion, people familiar with the matter have said. Full report: Page 10
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