OPINION, P6 ECONOMY, P2 EDITORIAL Strengthen primary healthcare systems for post-Covid care INSOLVENCY CODE REGULATORY SCRUTINY If govt wants to tackle Google-style 'monopoly rents', it should fund R&D to create India's own Google K SRINATH REDDY INTERNATIONAL, P8 Company ownership no more a divine right, says CAG Murmu Google to pay publishers $1 billion over 3 years for their content NEW DELHI, FRIDAY, OCTOBER 2, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 184, 18 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 38,697.05 ▲ 629.12 NIFTY: 11,416.95 ▲ 169.40 NIKKEI 225: 23,185.12 < > 0.00 HANG SENG: 23,459.05 ▲ 183.52 `/$: 73.14 ▲ 0.63 `/€: 85.82 ▲ 0.69 BRENT: $41.58 ▼ $0.72 GOLD: `50,249 ▼ `76 — 33.4 M&M 40,692 34,351 Toyota Kirloskar Motor 10,203 8,116 Ashok Leyland 7,847 7,851 Bajaj Auto 23.6 Continued on Page 2 1,12,500 1,50,040 Sept 2019 Sept 2020 % change (y-o-y) (units) -16 -20.4 -0.05 6 2,15,501 2,28,731 HARD LABOUR GRADUAL RECOVERY Economy inching back to normalcy Sept 2020 Note: Reading below 50 suggests contraction & above it indicates expansion Source: Nikkei; IHS Markit Petrol sales 3,000 (’000 tonnes) 2,456 2,500 2,419 2,000 1,500 1,000 500 973 Jan Apr Sept* *Extrapolated from PSU retail sales acloseproxyofeconomicactivities, rose for the first time in seven months in September, registering a decent 4.6% growth,onyear. Railway freight earnings were up 13.5% on year in the month, bucking the trend of being in deep negative territory Aug 2020 125 100 75 50 25 0 Sept % chg, y-o-y (RHS) 4.6 -23.2 Jan Sept Apr Railway freight 20 10 0 -10 -20 -30 (% chg, y-o-y) Loading Revenue 15.4 6.5 1.9 THE SUPREME COURT on Thursdayquashed the Gujarat government’s April notification that allowed factories to extend work shifts to up to 12 hours from the 8 hours earlier, citing “extreme financial exigencies arising due to the spread of Covid-19 pandemic” and the need to “safeguard the businesses”. The move could have ramifications for the new labour Codes that have recently received President’s assent, as these seek to buttress the powers of states to resort to steps like suspension of labour laws, citing exigencies. (Billion units) 3.9 30 15 0 -15 -30 -45 -60 91,916 86,449 98,202 87,422 1,02,083 July Power demand FE BUREAU New Delhi, October 1 FY21 113.5 56.8 60 51.4 50 40 30 20 Sept 2019 90,917 99,939 June 105.2 FORGET THE PERCEIVED fall in India’s potential growth rate fornow,somecredibleevidence seemstohaveemergedlatelyof a return towhat could be called economicnormalcy.Thisisabig positive, and exhibits the resilience of each segment of the economy to overcome a gripping crisis. In May, as it was becoming clear how prolonged and severe the pandemic-induced shocktotheindustrywouldbe, several corporate leaders glumly predicted a recovery may take a year or more. September saw a steeper jump in activities than July or August, leaving far behind the nadir hit in April. Manufacturingactivity,asmeasuredbyPurchasing Managers Index (PMI), jumped to its highest level in overeightyearsinSeptember,as flow of new orders saw a strong rebound.Electricitygeneration, May April SC quashes Guj fiat on extra work hours 95,480 Manufacturing PMI FY20 62,151 FE BUREAU New Delhi, October 1 1,20,000 1,00,000 80,000 60,000 40,000 20,000 0 1,00,289 GST collections (` cr) 32,172 Railway freight, exports, power consumption, fuel sales & GST signal acceleration 1,13,865 Nonetheless, auto majors remain optimistic the pentup demand will result in a good festive season. In a sign of a pick-up in economic activity,Ashok Leyland dispatched 7,847 vehicles in September, a 35% jump over the August numbers,though flatyear-on-year. With despatches of 1,50,040 vehicles, up 33.4% y-o-y and 30% month-onmonth, Maruti Suzuki clocked its historical monthly average for the first time in nine months. Hyundai Motor India reported domestic despatches of 50,313, up nearly 10% mo-m and a sharp 23.6% y-o-y. « Hyundai 40,705 Motor India 50,313 « THE NEWLY-APPOINTED chairman ofTrai, PD Vaghela, on Thursday took charge at the helm of the telecom and broadcasting regulatory body, reports PTI. Vaghela has been appointed the Telecom Regulatory Authority of India chief for 3 years or till he attains the age of 65. Maruti Suzuki « Vaghela takes charge as Trai chairman AHEAD OF THE festive season, wholesale despatches of cars, commercial vehicles (CVs) and two-wheelers’ automakers gained momentum in September. Industry experts attributed a big part of the increases to depleted inventories with dealers and also a low base. They cautioned that retail sales would not be as good. “Stocks with dealers have dropped to belowthe required levels,” an industry insider explained.He pointed out that due to the inauspicious period — shraadh and adhikmaas — retail sales in September have been somewhat subdued. « STEEPLY FALLING revenues and central grants amid rising expenditure to fight the coronavirus pandemic led to 18 of the largest states reporting a collective revenue deficit of 285% of Budget Estimates in AprilJune against 12.9% a year ago, as per a report by India Ratings, reports PTI. FE BUREAU Mumbai, October 1 « Ind-Ra: Collective revenue deficit of 18 states at 285% Strong September for automakers « LENDERS HAVE disbursed as much as `1,32,246 crore to 2.7 million borrowers under a `3-lakh-crore credit guarantee scheme, which was rolled out on June 1 to help mainly small businesses and professionals tide over the Covid-19 shock, reports fe Bureau in New Delhi. WHOLESALES « IN THE NEWS `1.32-lakh crore loans disbursed under key scheme Continued on Page 2 13.5 -35.6 Apr -43.7 Feb 2020 INDIA IS OPEN to launching its own mobile app store or expanding an existing one if it receives enough demand from domestic firms for an alternative to Apple and Google platforms, a senior government official said on Thursday,reports Reuters. during March-Julyand improving significantly upon the marginal decline seen even in August. Freight tonnage had turned the corner in July itself, buttherecoverywaspartlyaided bydiscountstobulkconsumers. Continued on Page 2 MODERNAWILLNOTbeready to apply for emergency authorisation for its potential Covid-19 vaccine before the US presidential election in November, the Financial Times reported, citing the company’s chief executive officer. Stéphane Bancel told FT that he did not expect to have full approval to distribute the drug to all sections of the US population until next spring. Moderna did not immedi- ately respond to Reuters request for comment. Moderna will not be ready to seek emergency use authorisation from the Food and Drug Administration before November 25 at the earliest, the report said,citing Bancel. The company’s experimentalvaccine is among the leaders in the race to develop a safe and effective vaccine to tackle the Covid-19 pandemic. Continued on Page 2 ■ Oxford-Astra vaccine review to start in Europe, P8 Special Feature ‘Home delivery will be a game changer for liquor’ Abhishek Shahabadi of Diageo India on how the easing of restrictions on dine-ins and social gatherings, and home delivery will shape the liquor industry ■ BrandWagon, P9 QuickPicks Dhanlaxmi Bank MD & CEO Sunil Gurbaxani resigns DHANLAXMI BANK on Thursday said in a regulatory filing that RBI has approved a three-member panel till a new MD and CEO takes charge, reports Rajesh Ravi in Kochi. The committee of directors will be constituted with G Subramonia Iyer as chairman, G Rajagopalan Nair and PK Vijayakumar as members. RBI has directed that the interim arrangement will not continue beyond 4 months. CEO and MD Sunil Gurbaxani resigned on Thursday, a day after the bank’s shareholders voted him out. His appointment had been approved by RBI in February. PAGE 10 IPL opens at 29% higher viewership than last year THE TOTAL advertising volume for the first week of the Dream 11 IPL 2020 was up 15% y-o-y with 1.95 lakh seconds of FCT (free commercial time), reports fe Bureau in Mumbai. Throughout the first week, there was a 12-23% rise in FCT everyday. The opening match between Mumbai Indians and Chennai Super Kings got 52 million impressions, a 29% rise over 2019. PAGE 4 FE BUREAU Mumbai, October 1 RELIANCE INDUSTRIES (RIL) on Thursday said Abu DhabibasedsovereigninvestorMubadala Investment Company will invest`6,247.5croreinitssubsidiary,RelianceRetailVentures (RRVL),fora1.40% stake. The investment values Reliance Retail at a pre-money equity value of `4.285 lakh crore.This is the second-largest investment in RIL’s retail arm aftertworoundsofinvestments earlier made by US private equityfirm SilverLake. This marks the second investment by Mubadala into an RIL subsidiary. It earlier invested `9,093.60 crore in Jio Platforms fora 1.85% stake. The investment in RRVL by Mubadalacomesjustadayafter US private equity firm General Atlantic announced its investmentinRelianceRetail,andSil- Full refund for tickets booked during lockdown Investment Stake Valuations (` crore) (%) (lakh) Mubadala 6,247.5 Silver Lake* 1,875 General Atlantic 3,675 KKR 5,550 Silver Lake 7,500 Total 24,847.5 1.40 4.285 0.38 4.285 0.84 4.285 1.28 4.21 1.75 4.21 5.68 NA Investments in Jio Platform Total 1,18,318.45 25.24 *additional investment ver Lake announced an additional investment in the companyof`1,875crore.Thisisthe fifth investment in RIL’s retail armwithina month. Continued on Page 2 FY22 Budget exercise from Oct 16 FE BUREAU New Delhi, October 1 THE FINANCE MINISTRY will start a crucial exercise from October 16 to prepare the annual Budget for FY22. This will also enable the government to reassess its finances forfirming up the revised estimates of its account for the current fiscal,which has gone haywire in the wake of the Covid-19 outbreak. The exercise comes at the most challenging time when the pandemic has ravaged the economy and caused a slide in revenue collection, limiting the government’sabilitytostir growth through a massive public expenditure drive. Continued on Page 13 The country has some 500 million smartphone users, most of whom use Google’s Android platform, but Indian start-ups have criticised the company for policies they say stifle their growth. ■ Report on Page 4 ● SC ORDER ‘Moderna vaccine won’t Mubadala pays `6,248 cr be ready before US polls’ for stake in RIL retail arm REUTERS October 1 —JUSTICE DY CHANDRACHUD Govt open to launching own app store Sept 2020 BIG BET ● CORONA CURE “This court is cognizant that the state aimed to ameliorate the financial exigencies that were caused due to the pandemic and the subsequent lockdown... financial losses cannot be offset on the weary shoulders of the labouring worker, who provides the backbone of the economy. FE BUREAU New Delhi, October 1 ROUGHED UP Congress leader Rahul Gandhi slumps after police personnel allegedly manhandled him while he was on his way to meet the family of the Hathras gang-rape and murder victim On a high FE BUREAU Stocks rise, bonds rally, rupee firm Equities rose smartly on Thursday, especially banking stocks, with investors anticipating a favourable verdict from the courts in the 'interest on interest' case. Bonds rallied after the Centre left the borrowing plan for FY21 unchanged. ■ Page 10 Sensex Nifty50 `/$ Intra-day, October 1 Intra-day, October 1 Intra-day, October 1 11,440 72.90 38,800 38,700 38,697.05 38,410.2 11,420 11,416.95 11,364.45 10-year bond yield Intra-day, October 1 (%) (Inverted scale) 6.010 73.14 73.05 6.000 38,500 73.20 11,380 38,600 11,400 73.35 73.50 5.996 5.980 11,360 5.966 5.970 73.60 38,400 5.990 11,340 5.960 73.65 Previous close Previous close Previous close 38,067.93 11,247.55 73.77 11,320 5.950 73.80 38,300 Open Close Open Close Open Close Previous close 6.011 Open Close ACCEPTING THE DIRECTORATE General of Civil Aviation’s(DGCA)schemeforrefund ofairticketsbookedpriortothe lockdown, the Supreme Court on Thursday ruled that airlines will have to refund tickets that were cancelled due to restrictions (from March 25-May 24) without any cancellation charges within three weeks from the date of cancellation. The airlines also have the optiontocreateacreditshellin the name of the passenger which can be availed for travel on any route before March 31, 2021.Thejudgmentappliesfor bookings made for both domestic and international tickets during the period. The SC Bench comprising justices Ashok Bhushan, RS Reddy and MR Shah took into consideration the recommendations of the DGCA and approved a credit shell scheme which will be valid till March 31,2021.“…such formulations are workable solutions in these peculiar circumstances which are prevailing in the country,”it said. Continued on Page 13 CAVEAT EMPTOR Users seek better disclosures on pay-later schemes from e-tailers SHRITAMA BOSE Mumbai, October 1 THE PANDEMICAND theassociated lockdowns have led to an increase in the use of ‘buy now, pay later’ schemes on ecommerce platforms. Consumers availing of this convenient facility, however, are often unaware of the fact that they are in effect creating a loan account at the back end. Shopperswhoboughtproducts discovered that even after they had paid for the products, their credit reports showed a large loan against their names. Theonlineshoppingplatforms in these instances had at no point disclosed that the shopper was in effect being given a loan by a bank to avail of the ‘pay-later’ option.While offering a shopper the option to makeadeferredpayment,anecommerceplatformmusthave a tie-upwith a lenderonwhose bookstheamountsitsasaloan. Ishwar Nalawade, who had made a `5,000 purchase on Flipkart in November 2019, Flipkart's Buy Now Pay Later option has a tie-up with IDFC First Bank to offer a loan against the pay-later purchase In version 1.0 of the product, a personal loan of `60,000 reflected in the credit report as the aggregate sanctioned limit for a year Shoppers were taken aback by the loan showing up on their credit reports In June 2020, version 2.0 was released, with only the monthly sanctioned limit of `5,000 reflected in the credit report ` realised he had been issued a credit product only in August 2020, when he approached a differentbankforaneducation loan.“I then got in touch with IDFC First Bank, whose loan it was, and they promptly closed the account.When I asked why therehadbeennocommunication from them aboutthe loan, theytoldmethatthedetailsare thereinFAQsonFlipkart’swebsite,”Nalawade told FE. Emailed queries to Flipkart did not elicit a response till the time of going to press. After repeatedcomplaintsfromcustomers,Flipkart and IDFCFirst Bank tweaked the option to ensure that only the amount which was pending was displayed as the‘current balance’ in the borrower’s credit report. Socialmediaisfloodedwith complaints from people like Nalawade who discovered a `60,000 personal loan from IDFC First Bank in their credit report, which they had never applied for. Continued on Page 13
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