OPINION, P6 COMPANIES, P4 EDITORIAL Centre should borrow to pay GST compensation, instead of asking states PLEA DISMISSED LOOKING BEYOND US At a time when govt needs to be spending `10-12 lakh cr more, its spending is slowing M GOVINDA RAO INTERNATIONAL, P8 SC asks govt to ensure Mallya’s presence in court on Oct 5 Buffett looks to Japan with $6-bn bet on five biggest trading firms NEW DELHI, TUESDAY, SEPTEMBER 1, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 157, 24 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 38628.29 ▼ 839.02 NIFTY: 11387.50 ▼ 260.10 NIKKEI 225: 23139.76 ▲ 257.11 HANG SENG: 25177.05 ▼ 245.01 `/$: 73.62 ▼ 0.22 `/€: 87.51 ▼ 0.10 BRENT: $46.40 ▲ $0.59 GOLD: `51353.00 ▲ `372.00 ● CONTEMPT SC lets off Bhushan with just `1 fine Prashant Bhushan addresses a press conference in New Delhi on Monday FE BUREAU New Delhi, August 31 THE SUPREME COURT on Mondayimposedatokenfineof `1 on activist lawyer Prashant Bhushanasapunishmentinthe contempt case for his derogatorytweetsagainstthejudiciary, including one on Chief Justice SABobde astridea heavybike. A bench headed by Justice Arun Mishra asked Bhushan to deposit the fine by September 15,failing which he will attract a jail term of three months and debarmentfromlawpracticefor threeyears.“Though a faircriticismofjudgmentispermissible in law, a person cannot exceed theright…Righttofaircriticism is contrasted against acting in malice or attempting to bring down the reputation of the institutionof administrationof justice,” said the bench. Continued on Page 13 MUMBAI AIRPORT Adani is top airport firm with GVK buy In terms of number of passengers, though, GVK will rank second after the GMR Group FE BUREAUS New Delhi/Mumbai, August 31 THE ADANI GROUP is set to emerge as the largest player in the airports business in terms of number of projects as it struck a deal on Monday to acquire the controlling 74% stakeinMumbaiInternational Airport (Mial) from the GVK Group and other partners. As part of the deal,itwill also have control of 74% in the Navi Mumbai airport project. TheAdaniGroupthroughits Adani Airport Holdings (AAHL) will take over GVK Airport Developers’ debts, and also acquire Bidvest and Airports CompanyofSouthAfrica'sstake in MIAL. GVK ADL is the holding company through which GVK Group holds 50.50% equity stake in Mumbai Inter- Moratorium seekers FE BUREAU Most firms stressed, pre-Covid Even as the moratorium ended on Monday, the demand outlook for most sectors remains muted, CRISIL said, adding firms in the low resilience sector would continue to be stressed over the next 2-3 quarters.The number of firms with a revenue of `300-1,500 crore, opting for the moratorium, was more than thrice those with a turnover of `1,500 crore and more, it noted. Share of companies (%) Investment grade Sub-investment grade 25% 75% Source: Crisil QuickPicks L&T completes sale of its electrical and automation biz LARSEN & Toubro (L&T) has completed the strategic divestment of its electrical & automation (L&T E&A) business to Schneider Electric, a global player in energy management and automation, reports fe Bureau in Mumbai. The all cash deal was struck in May 2018 for `14,000 crore. The company in a statement said that it continuously evaluates its business portfolio and takes capital allocation decisions from a long-term perspective. P4 CG Power lenders approve Tube Investment’s `700-cr bid THE LENDERS of CG Power and Industrial Solutions have approved the `705-crore bid of Murugappa group’s Tube Investments, sources close to development told FE, reports Ankur Mishra in Mumbai. “No other suitor could outbid Tube Investment's offer during the Swiss Challenge, so we have approved the resolution plan of existing bidder,” the source added. P10 NHAI awards 774 km projects for April-August period HAVING AWARDED a record 744 km of highway projects for the April-August period, the National Hig-hways Authority of India (NHAI) on Monday said its project awards is likely to exceed the targeted 4,500 km in the current fiscal, reports fe Bureau in New Delhi. “During April to August 2020, NHAI has awarded 26 projects of 744 km length compared to 676 km in FY20, 368 km in FY19 and 504 km in FY18,” NHAI said in a statement. P2 Mumbai International Airport Ltd shareholding (in %) Bidvest: 13.5 Airports Company of South Africa: 10 GVK Group 50.5 Airports Authority of India: 26 Debt: Mumbai International Airport: `8,029 crore ■ GVK Airport Developers: `2,818 crore BHARAT’S RATNA COVID IMPACT GDP shrinks by quarter in Former president Q1, yet govt slows spend Mukherjee dies If govt doesn’t hike spending in a big way now, expect more damage to economy, and longer-lasting Unprecedented collapase (% growth, y-o-y) 10 5 0 7.1 6.2 5.6 5.7 THE PANDEMIC THAT befell the world almost like a bolt from the blue has expectedly taken a heavy toll on India’s gross domestic product (GDP) — it contracted by a quarter, an unprecedented 23.9% to be precise,in the June quarter. This was on the higher side of analyst estimates of the dip, which varied between 1526% roughly. In no quarter since India 4.4 4.1 3.1 GDP -15 FE BUREAU New Delhi, August 31 5.2 -5 -10 -20 -23.9 -25 -30 PRESS TRUST OF INDIA New Delhi, August 31 (% growth, y-o-y) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY19 FY20 FY21 20 10 0 -10 -20 -30 -40 -50 -60 16.4 -26.7 Govt consumption Pvt consumption Fixed investment -47.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY19 FY20 FY21 Source: MoSPI began releasing quarterly GDP data in FY96, the economy shrank – the previous worst quarterly growth figure was 0.2% reported in Q4FY09,following the global financial meltdown. The gross value added (GVA), which basically captures what accrues to the producer/service provider before a product or service is sold,shrank at an unheard-of rate of 22.8% in Q1, as per data put out by the National Statistical Office (NSO). Continued on Page 2 ■ Airport bids won by Adani Group under PPP: Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapu ram, and Mangaluru RBI spurs banks’ bond buying after yields surge BLOOMBERG Mumbai, August 31 THE CENTRAL BANK will inject money and encourage lenders to buy more government bonds after sovereign yields surged by the most in more than twoyears. Banks can now hold as much as 22% of debt pur- national Airport,which in turn holds 74% equitystake in Navi Mumbai InternationalAirport. Continued on Page 2 10-year bond yield 6.200 (%) 6.150 6.100 6.050 5.951 6.117 6.000 5.950 5.900 Aug 17, 2020 Source: Bloomberg Aug 31, 2020 chases without marking to market, up from 19.5%, the RBI said in a statement on Monday. It also announced a combined`1.2trillionofrepoand open-market operations. Thiscomesafterunderwriters had to buy almost all bonds offeredatanauctionlastweek. Continued on Page 2 FORMER PRESIDENT PRANAB Mukherjee, one of India's most cerebral and respected politicians, died on Monday evening following a 21-day battle with multiple ailments. He was 84.Mukherjee,who was admitted to the Army's ResearchandReferralHospital onAugust10andwasoperated for a removal of a clot in the brain the same day,is survived bytwosonsandadaughter.The long-time Congress leader and seven-time parliamentarian had tested positive for Covid19 at the time of his admission andwasbeingtreatedforalung infection. He had suffered a septic shock on Sunday due to it.Doctors said he died of a cardiac arrest at 4.30 pm. His son Abhijit Mukherjee was the first to break the news of the death of the veteran politician."WithaHeavyHeart, this is to inform you that my father Shri Pranab Mukherjee has just passed away inspite of the best efforts of Doctors of RR Hospital and prayers, duas and prarthanas from people throughout India!Ithankallof You,"he said on Twitter. As condolences poured in forIndia's 13th president,who servedasthecountry'sfirstcit- LADAKH Continued on Page 2 NANDA KASABE Pune, August 31 collectanupfront 20%margin for cash market transactions. Theregulatoralsocameupwith a new set of guidelines on how clients could use existing securities in their account to fund their margin requirements. Market participants have been seeking a deferral of both the imposition of20%marginsoncashmarket transactions and implementationofthenewpledgingnorms. THE HOLE IN the sugar economyshowsup.Sugarmillsinthe country owe nearly `17,500 crore to cane farmers at last count,mostofwhichdefaultsby Uttar Pradesh’s corporatised sugar sector. In Maharashtra’s cooperatives-run sugar industry,mills have paid over99% of last season’s dues to farmers, who themselves are stakeholders in the mills, but have withheld salaries to workers for several months now. AsMaharashtramills’salary dues to workers have touched `500 crore, worker bodies are threatening agitation.“Around 40-45 factories have not paid wagestoworkersforover10-20 months.Wehadapproachedthe previous state government run by BJP for a resolution,but that was to no avail.Now,we’re taking up the matter with the incumbent Maha Vikas Aghadi government.The new season is slatedtostartnextmonth.Ifthe issue is not resolved by then, workers will have no other option, but to resort to agitation”, said Maharashtra Rajya Kamgar Pratinidhi Mandal presidentTatyasaheb Kale. Full report on Page 10 Continued on Page 12 Fresh tensions ■ This is the latest friction point between the two armies ever since the standoff began early May ■ Until now, troops were facing on the north bank of Pangong Tso where the Chinese are reluctant to disengage after coming in 8 km west of Finger 8, which India says marks the LAC ■ Sources say Indian troops have positioned themselves at a more advantageous location to prevent Chinese troops from coming in ON GUARD Army vehicles moving along the Manali-Leh highway in Kullu on Monday. Tensions soared in Ladakh after a clash with the Chinese army ANI ● GST SHORTFALL ● MARGIN OBLIGATION More states want Centre to borrow Market participants ask Sebi for more time FE BUREAU New Delhi, August 31 unilaterally change facts on ground. The Indian Army is committed to maintaining peace and tranquility through dialogue, but is also equally determined to protect its territorial integrity.A Brigade Commander level Flag Meeting is in progress at Chushul to resolve theissues,”theIndianArmysaid. AT LEAST TWO states have writtentotheCentreaskingitto borrowtomobiliseresourcesfor compensation payment under GST while Punjab has said that Centre’s proposed borrowing plan for states be discussed in the next GSTCouncil ora group of ministers be constituted to find alternative solutions. Continued on Page 12 Full report on Page 2 MALINI BHUPTA Mumbai, August 31 MARKET PARTICIPANTS MET with the Securities & Exchange Board of India (Sebi)onMondayseeking moretimetoim-plement the new rules on margin obligationsthataresettokick in from September1. FEhaslearnedthattheregulatorisunlikelytoconcedetothe demand, as enough time has beengivenalready.Sebihadsaid last year brokers would need to ● MGNREGS LOOKING AHEAD Brand launches to spur ads in festive season HOPING TO CATER for pentup demand and revive consumersentiment in the festive season, companies are readying a slewof product launches. Given this isn’t going to be easy, media buyers expect companies to spend liberally on pushing their products; as peraMadisonMediastudy,the total ad spend in 2020-2021 is pegged at `55,000-58,000 izen from 2012 to 2017,President Ram Nath Kovind described Mukherjee's demise as the passing of an era. “A colossus in public life,he served Mother India with the spirit of a sage. The nation mourns losing one of its worthiest sons.Condolences to his family, friends & all citizens,” Kovind said on Twitter. Endowedwithperspicacityand wisdom, Bharat Ratna Mukherjeecombinedtradition and modernity,Kovind said. UP can’t pay farmers, Maharashtra mills can’t pay workers KRISHN KAUSHIK & NIRUPAMA SUBRAMANIAN New Delhi, Mumbai, August 31 VENKATA SUSMITA BISWAS Mumbai, August 31 1935-2020 ● SUGAR MILLS New standoff, Army says steps taken to thwart China designs TENSIONS SOARED IN Ladakh after the Indian Army Mondayannouncedthatithad taken“measures to strengthen our positions and thwart Chinese intentions”to change the statusquoonthesouthbankof Pangong Tso. This is the latest friction point between the two armies ever since the standoff began early May. Until now, troops were facing on the north bank of Pangong Tso where the Chinesearereluctanttodisengage after coming in 8 km west of Finger 8, which India says marks the LAC. The IndianArmy,in a statement, said: “On the Night of 29/30 August 2020, PLA troops violated the previous consensus arrived at during military and diplomatic engagements during the ongoing standoff in Eastern Ladakh and carried out provocative military movements to change the status quo.” “Indian troops pre-empted this PLA activity on the Southern Bank of Pangong Tso Lake, undertook measures to strengthen our positions and thwart Chinese intentions to PRANAB MUKHERJEE Medium TV Digital Print Radio Outdoor Cinema Total Forecast (` cr) Growth (%) 21,000-22,300 17,300-18,250 12,800-13,800 1,350-1,600 1,750-2,300 400-650 55,000 - 58,000 -12 to -17 12 to 18 -31 to -36 -30 to -40 -35 to -50 -40 to -60 -14 to -18 Source: Pitch Madison Advertising Report crore.Ad spends in the second half of 2020,the biggest shopping season,are expected to be 6-13% higheryear-on-year.In 2019, the months of OctoberDecember saw spends of Surge over, 60% less jobs in August versus July `20,000-25,000 crore.About 40% of annual ad spends take place during the festive season that kicks off with Ganesh Chaturthi and Onam and continue right up until the new year. Typically,the festive season brings in more than 40% of annual sales. Hence, many companies set aside a sizable chunkoftheirannualadvertising budget for this season. SURYA SARATHI RAY New Delhi, August 31 AFTER THE SURGE witnessed for 3 straight months (MayJune-July), person days of work generated under the Mahatma Gandhi National Ru-ral Employment Guarantee Scheme (MG-NREGS) slowed in August,as per the official dashboard. In August last year,15.3 crorepersondayswerecreated. Continued on Page 13 Continued on Page 2 New Delhi Persondays generated under MG-NREGS (in cr) 2019 27.4 Apr 14.13 2020 36.95 May 56.87 32.14 Jun 64.08 19.42 July 39.14 15.3 Aug 14.97 Total 131.21 189.19