OPINION, P6 ECONOMY, P2 UTTAM GUPTA Can’t curb urea diversion without price reforms,DBT INTERNATIONAL, P14 SUNIL JAIN POLLUTION PROBLEM DESPERATE EFFORT Govt must spend now; those focusing on deficit must realise this will rise, in relation to the GDP size, if growth slows No overnight solution, continuous efforts needed: Javadekar Trump leans into fear tactics in bid to win Midwest states KOLKATA, MONDAY, OCTOBER 19, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.29 NO. 300, 14 PAGES, `6.00, (NORTH EAST STATES & ANDAMAN `10.00) 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 Revenue Ebitda Net loss RISHI RAJ New Delhi, October 18 WITH RELIANCE JIO and BhartiAirtelplayingthewaiting game and being in no hurry to raise tariffs,Vodafone Idea has been caught in a bind.While Jio and Bharti can afford to delay taking a decision on hiking tariffs, the same cannot be said about Vodafone Idea. While companiesarenotcommenting on their strategy and timing of announcing a hike in tariffs, analysts have noted that any delay on the part of Vodafone Idea is going to cost the companydearly. Telecom operators were hoping that the Telecom Regulatory Authority of India (Trai) will come out with a regulation fixing floor price for tariffs which would take care of the hikes.However,with chances of suchamovefadingwithtime – with a new chairman taking charge only earlier this month, ifatallsuchamovematerialises, itwouldtakequitealongtime– the ball is back in the operators' 10,659 4,098 -25,467 Total AGR dues AGR dues paid Outstanding AGR dues Gross debt FY21 target, only `2.1 lakh cr half ofdisinvestmentmay be realised this amount Likely strategic sales* Centre’s stake being sold (%) BPCL 50,250 IDBI Bank `1.18 lakh cr court. Thelasttimethethreeoperators had raised tariffs by up to 50%was in December,2019. "We do not think Vodafone Idea (VIL) can raise enough risk capitaltosurvivewithoutaprice hike for too long.The viability challenge facing VIL is real and massive.A moratorium here, a deferral there, a small cash inflow from Indus stake sale to Bharti Infratel, some inflows from fiber monetisation,residual contracted cash inflow of a billiondollarfromVodafonePlc pertaining to regulatory liabilities, etc do not change the big picture,” Kotak Institutional Equitieswroteinarecentreport. Continued on Page 2 FE SPECIALS Kia Motors’ hinterland drive The automaker is making inroads into tier IV towns, but its low brand awareness could come in the way ■ eFE, P8 AI is reinventing business models Al can deliver solutions fast but actual decision still belongs to humans, says Genpact’s Sanjay Srivastava ■ PERSONAL FINANCE, P9 Keep it simple: Saral Jeevan Bima ConCor 6,957 30.8 Shipping Corp. 63.75 0 1,353 54.03 *No revenue from Air India privatisation, only the Centre’s debt liability will reduce; Centre’s stakes in BPCL and Concor were worth `60,000 crore and `11,000 crore respectively in November 2019; stake sales are expected at a premium to current market prices been factored in. While bulk of the shortfall willbeduetoalikelydeferment of the mega IPO of Life Insurance Corporation (a 10% stake sale could have fetched around `80,000 crore), the Air India privatisation won’t yield any revenue to the Centre. While the government hasn’t officiallyputofftheLIClisting,the paceofprocessclearlyindicates thereceiptswon’tcomeinearly enough to be budgeted for the current year. Withhalfoftheyearalready over,theCentreisnowmakinga determined effort to sell its 52.98% stake in BPCL, which wasworth`39,069croreatlast 40 20.25 20 1,547 BEML 500 318 326.65 400 300 BPCL 200 (BSE, `) 100 0 May 15, Oct 15 2020 2020 60 33.6 IDBI Bank (BSE, `) May 15, 2020 Oct 15 2020 500 378.2 357.35 400 300 ConCor 200 (BSE, `) 100 0 May 15, Oct 15 2020 2020 Friday’s closing price. The process is on despite the BPCL stock losing 35% invalue from about`60,000croreinNovember 2019, around the time the stake sale proposal was approvedbytheUnionCabinet. However, the actual receipts will depend on valuation and consideration of a premium (ONGC had bought the Centre’s stake in HPCL in FY18 at a premium of 14% to the stock’s price). The Centre recently extended the expression of interest submission deadline from potential bidders for BPCL to November 16. Continued on Page 2 SHUBHRATANDON Mumbai, October 18 BUSINESS ACTIVITY MAY not have recovered to pre-pandemiclevelsbut,at0.5million, openings for blue collar workers in the July-September periodwere reasonablystrong. Some of this relates to the upcoming festive season but a large part of this demand is for permanent jobs. Experts say it’s likely 2020 could end with 1.4 million vacancies being filled. Data ILLUSTRATION: ROHNIT PHORE sourced from Betterplace, a technology platform for managing the lifecycle of informal and semi-formal workforce, shows nine million interviews have been targeted. The demand in segments such as delivery and healthcare seg- ment is expected to surpass January2020 levels. The good news is that nearly80% of the jobs on offer are for full-time employment, Pravin Agarwala, co-founder and CEO, Betterplace told FE. “The demand during the festive season stems mainlyfrom the retail sector so some some of this is for temporary jobs. But demand for full-time jobs is expected to sustain post the festive season,”Agarwala said. Continued on Page 2 COVID-19 Festivals are super spreaders ISHAAN GERA New Delhi, October 18 WHILE FESTIVITIES ACROSS thecountryhavebeensubdued, the government is justified in tellingpeopletomaintainsocial distancingandaskingthemnot assembleinlargenumbersduring the festival season. An FE analysis of infections during GaneshChaturthiinMaharashtraandMumbaishowsfestivals can be superspreaders. Continued on Page 2 Maha celebrations, maha infections Daily growth in cases (%, compounded daily growth rate, RHS) Case additions over the fortnight 40,000 30,000 20,000 1.6 1.28 28,578 1.2 1.01 0.8 15,777 10,000 0 0.4 23 July 5 Aug 18 3 17 Sept 30 13 Oct 0 Kerala sees big surge in infections KERALA WAS considered a model state in terms of managing the coronavirus but last week it became the eighth state in India to cross three lakh infections, reports FE Bureau. Only two months ago,it had one of the lowest infection rates in the country but now it ranks third in terms of daily case infections. ■ Page 2 ● EXCISE/CESS Centre to rake in 90% more from auto fuels in FY21 ANUPAM CHATTERJEE New Delhi, October 18 ■ BRANDWAGON, P10 18,995 47.1 PRASANTA SAHU New Delhi, October 18 DESPITE THE MARKETconditions not being conducive,the Centre will strive to garner at least `1 lakh crore from disinvestment this year. Yet, this represents a big slippage from theall-timehighBudgettarget of `2.1 lakh crore. Strategic sales in fuel retailer-refiner BPCL, Container Corporation (ConCor) and IDBI Bank would be completed in the year, an official source said. Recently, while the Centre has announced its decision to not alter the enhanced borrowing limit of `12 lakh crore when it unveiled the H2 calendar,economic affairs secretary Tarun Bajaj said it factored in potential stimulus requirement and lower-thanexpected disinvestment revenues. FE has learnt that a slippage of over `1 lakh crore in disinvestment revenue has 39,069 52.98 58,250 8,000 Market value (` cr) (as on Oct 16, 2020) Strong demand for blue-collar workers, full-time jobs on offer BOTH THE CENTRE and states are facing unprecedented tax revenue deficits this year, but petrol and diesel will still be a cash cowforthem.The Centre’s tax revenue from the two auto fuels, post-transfers to the states,could be `3.8 lakh crore in FY21, up a whopping 90%, accordingtoanFEestimate.The states could also find their tax revenue from the fuels rising in the year – an estimated 10% is stilladecentgrowthinthepandemic year. The estimates are basedonlatestsalesprojections Boon in difficult times Tax revenue from petrol & diesel (post-devolution) (` lakh crore) Change (y-o-y) Centre 4.0 3.0 2.0 1.0 0.0 States 93% 10% 2.2 Vodafone Idea (` crore) April-June Mop-up to be almost half the target, Centre to rely mainly on privatisation of BPCL, IDBI Bank 2.0 The top two operators feel a hike at this stage would help VIL revive itself Plans afoot to raise `1 lakh crore in FY21 PATH TO REVIVAL 3.8 Vodafone Idea in a bind as Jio,Bharti delay tariff hikes DISINVESTMENT 1.97 NO CALL YET FY20 FY21(E) FY20 FY21(E) for the year (annual sales are seendownby11%byCrisil)and the sharp increase in tax rates (mainlybyCentre) compared to the rates prevailed in FY20. Continued on Page 2 ● START OF SEASON Most summer crops being sold below support prices Saral Jeevan Bima will be offered by all insurers as a standard individual term life insurance policy but the price may vary PRABHUDATTA MISHRA New Delhi, October 18 ■ INFRASTRUCTURE, P11 MANDI PRICES OF seven among the 10 key summersown crops are ruling below their minimum support prices (MSPs),indicatingthatprocurement by the designated agencies hasn’t yet gathered momentum.Kharif harvesting season started a fortnight ago. An analysis of prices by FE showedthatfarmerssoldseven kharif crops including jowar, bajra, maize, moong and soy- Hydrogen gains traction for storage With expensive batteries a hurdle in adoption of green energy, the use of hydrogen technology promises a viable alternative ■ SCIENCE & TECH, P12 Digitally ready Start-ups need to factor in the cost of cybersecurity, "all is well" approach will not work abean at prices 8-38% below their MSPs during October 115.Onlyarharanduradarecostlier to wholesalers than their MSPs,whiletherateforpaddyis closerto the MSP. Continued on Page 2 FARM LAWS Govt’s massive outreach to dispel myths PRABHUDATTA MISHRA New Delhi, October 18 WHILETHE POLITICALbroadside against the new farm laws continues unabated, the government has decided to wage a strong, orchestrated countercampaign.Whileseniorgovernment functionaries, including theprimeminister,haverepeatedly assured farmers that the new laws would help increase their income and won’t undermine the APMC mandis or the minimum support price (MSP) operations, a detailed plan has now been chalked out,to reach ILLUSTRATION: ROHNIT PHORE out to farmers through various central government agencies and state government officials and local leaders. Under the plan,agriculture minister Narendra Singh Tomarwillwrite letters to over 2.6 lakh sarpanches (head of panchayats) and gram pradhans (village heads) articulating merits of the laws and also dispelling the notion that mandis would be closed, sources said. These letters will be in English,Hindi and major regional languages. The panchayatirajministryhasalready shared the data of grass-root level leaders who will spearhead the campaign, with the agriculture ministry “The minister (Tomar) is taking care of the political management since opposition parties have made it political issue.He is personallyinvolved in this outreach programme implementation,” an agriculture ministry official said requesting anonymity. Continued on Page 2 Kolkata
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