OPINION, P6 COMPANIES, P4 MUKESH BUTANI & TARUN JAIN Sans larger accord, India must go for bilateral digital tax deals INTERNATIONAL, P8 EDITORIAL AIR INDIA SALE STARLINKED Time to relook PSU policy. These accounted for 22.5% of BSE’s M-cap in 2014; now, this is just 9% Govt working on giving flexibility to bidders to decide on debt: Pandey Microsoft, SpaceX tie up to woo space customers CHENNAI, WEDNESDAY, OCTOBER 21, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XLII NO. 143, 18 PAGES, `6.00 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: 40,544.37 ▲ 112.77 NIFTY: 11,896.80 ▲ 23.75 NIKKEI 225: 23,567.04 ▼ 104.09 HANG SENG: 24,569.54 ▲ 27.28 `/$: 73.47 ▼ 0.10 `/€: 86.54 ▼ 0.45 BRENT: $42.36 ▼ $0.26 GOLD: `50,637 ▼ `191 IN THE NEWS Retail inflation eases a tad for farm, rural workers THE RETAIL INFLATION for farm workers and rural labourers eased only marginally to 6.25% and 6.1%, respectively, in September on high food prices, reports PTI. In August, the point-to-point rate of inflation based on CPIAL and CPI-RLwas at 6.32% and 6.28%, respectively. Onion costliest at `73/kg in Chennai among metros RETAIL ONION PRICES on Tuesday surged to `73 per kg in Chennai — the highest among the metro cities — as supply disruption due to rains in producing areas have flared up rates across the country, reports PTI. Onion prices ruled at `51 per kg in Delhi, at `65 per kg in Kolkata and at `67 per kg in Mumbai on Tuesday. ‘FDI rises 16% to $27.1 billion in April-August’ FOREIGN DIRECT investment (FDI) in India has increased by 16% y-o-y to $27.1 billion during April-August this year, the commerce and industry ministry said on Tuesday, reports PTI. The ministry said that the total FDI grew by 13% to $35.73 billion. LOOKING AHEAD HUL says worst may be behind it Rural demand picking up pace, but urban demand still a concern FE BUREAU Mumbai, October 20 IN SOME CAUTIOUS but positive commentary, Hindustan Unilever(HUL)onTuesdaysaid theworstseemstobebehindit. Ruraldemand,whichhadbeen muted before the pandemic struck, the management said, hadbeenshowinggoodgrowth and appeared resilient. However, urban demand remained a tad uncertain. Underlying domestic consumerbusinesssales(excluding the impact of business combinations) grew 3% in the September quarter.HUL posted an 8.7% y-o-y rise in net profit to `2,009croreforQ2FY21,onthe back of a smart rise in revenues thatrose16%y-o-yto`11,442 crore. The numbers include those forthe GSKportfolio. SanjivMehta,chairmanand MD,said the steps taken by the government and good harvest had clearly played a part in ensuring rural consumption remained resilient. However, urbandemandwasimpactedby confinedliving.Hebelievesthat In Sept quarter, underlying sales grew 3% management says the ‘worst is behind us’ ■ Net profit up 8.7% y-o-y to `2,009 crore ■ Rural growth resilient while urban remains uncertain Revenues increase 16% y-o-y to `11,442 crore Sanjiv Mehta, chairman & MD ‘Virus still here,caution must during festivities’ UK plans Covid ‘challenge’ trials that deliberately infect volunteers PRESS TRUST OF INDIA New Delhi, October 20 WITH THE ONSET of festival season, Prime Minister Narendra Modi on Tuesday made an impassioned appeal to people to follow Covid-19 guidelines, saying this is not the time to be careless as the virus is still around and even a small negligence can dampen the festive spirit. In his seventh address to the nation following the Covid-19 outbreak,Modi cited examples of the US and several European countries to note that the coronavirus cases there have seen a sudden and worrisome rise after witnessing a fall, as he cautioned citizens against anylaxityuntil an effective cure is found. He said pictures and videos have of late emerged showing that many people have either stopped following precautions like wearing masks or have once people start moving out thediscretionarycategorieswill getafurtherimpetus.“However, there are manyvariables still at play,”Mehta said, adding trade pipelines had been betterin the September quarter than in the June quarter. KATE KELLAND London, October 20 become negligent. “This is absolutely not right.Those who have become negligent and are moving around without masks are putting themselves and their families, including children and elderly, at risk,” he said in his televised speech. BRITAIN WILL HELP to fund trials using a manufactured Covid-19 virus to deliberately infect young healthy volunteers with the hope of accelerating the development of vaccines against it. The government said on Tuesday it will invest £33.6 million ($43.5 million) in the so-called “human challenge” trials in partnership with ImperialCollegeLondon,laboratory and trial services companyhVIVO and the Royal Free LondonNHSFoundationTrust. Continued on Page 14 Detailed report on Page 8 Narendra Modi, Prime Minister Serum seeks customs duty waiver for local supplies of vaccine PUNE-BASED SERUM INSTITUTE of India (SII) has sought customs duty waiver for domestic supply of products from its facilitysituated in the special economic zone Detailed report on Page 4 (SEZ) near Pune, sources in the government said. Goods sold from SEZ into the domestic tariff area (DTA) are treated as imports and attract customs duty, reports Sumit Jha in New Delhi. The government has been considering such a relief since April, especially for the pharmaceutical industry. ■ Page 2 MARKET MONOPOLY US hits Google with biggest antitrust lawsuit in 2 decades Claims tech giant acted unlawfully to maintain position in search and search advertising DIANE BARTZ & DAVID SHEPARDSON Washington, October 20 THE US JUSTICE department and 11 states filed an antitrust lawsuit against Alphabet’s GoogleonTuesdayforallegedly breaking the law in using its marketpowertofendoffrivals, and called for action. The lawsuit marks the biggest antitrust case in a generation,comparabletothelawsuit against Microsoft filed in 1998 and the 1974 case against AT&T which led to the breakup of the Bell System. The lawsuit claims that Google acted unlawfully to maintain its position in search and search advertising on the internet. It states that “absent a court order,Google will continue executing its anticompetitive strategy,crippling the competitive process,reducing consumer choice, and stifling innovation”. “Google is now the unchal- POWER STRUGGLE Special Features Spend or save? Finding the perfect balance this season Standard budgeting rule ■ HUL PM-SPEAK Even as you shop this festive season, adopt the 50:30:20 rule.Allocate 50% of your income to essential expenses, 30% to buying things you want and 20% to savings for the future ■ Personal Finance, P9 Powering cloud solutions for businesses in pandemic times Prague-headquartered IceWarp has helped numerous Indian companies sail through this crisis with its secure team collaboration and email solutions. It has also invested in two data centres in India ■ eFE, P9 QuickPicks I-T survey only after nod from high-ranked officers: CBDT INCOME TAX surveys to collect information for scrutiny assessment will be undertaken by the tax deducted at source (TDS) directorate only after approval from principal chief commissioner or chief commissioner level officer, the CBDT has said, reports PTI. Pursuant to 'The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020', CBDT has issued an internal order on exercising the power of survey by tax officers under Section 133A of the I-TAct. PAGE 2 Credit growth being bolstered by commercial papers, bonds FUNDRAISING THROUGH the money markets may be helping banks deploy their idle funds in a year, when non-food credit growth has been bound within the 5-6% range, reports Shritama Bose in Mumbai. While incremental credit growth was negative through the first six months of FY21 — in repetition of the FY20 trend --- a sharp rise in bond and commercial paper (CP) issuances resulted in a five-fold rise in consolidated credit in September, showed the data compiled by CARE Ratings. PAGE 10 Sebi amends alternative investment fund rules MARKETS REGULATOR Sebi has amended norms pertaining to alternative investment funds (AIFs), including defining relevant professional qualifications, reports PTI. Under the new norms, qualification and experience criteria of the investment team may be fulfilled individually or collectively by personnel of key investment team of the manager. The move comes after the Sei board approved amendments in this regard. PAGE 11 THE COVID-19 PANDEMIC seems to have caused a further slippage in payment discipline amongelectricityconsumersin severalstates,posingarenewed threat to the financial status of distribution utilities (discoms). UttarPradesh’sfivediscoms, huddled under umbrella entity Uttar Pradesh Power Corporation, piled up an additional `14,000 crore (40%) as overduestogencosinthefirsthalfof the current fiscal. As a result, over-dues to gencos rose from `34,000 crore at FY20 end to over `37,000 crore by September end, despite these entities having paid `10,500 crore received as soft loan from PFCREC under a special liquidity facility to central sector gencos and private powerproducers. The Union power ministry hasrecentlyincreasedthesizeof the package to `1.2 lakh crore ■ Covid-19 pandemic seems to have caused a further slippage in payment discipline among electricity consumers in several states Didi lines up 2021 IPO in Hong Kong, targets more than $60-bn valuation CHINA’STOPRIDE-HAILING firm Didi Chuxing is considering Hong Kong for a multibillion-dollar initial public offering next year, dropping previous aims to list in New YorkamidrisingSino-UStension, people with knowledge of the matter said, reports Reuters. Backed by technology investment giants SoftBank,Alibaba and Tencent,it has started initial talks with investment banks for the long-awaited IPO, according to three people. ■ Page 8 lenged gatewayto the internet forbillions of usersworldwide ... For the sake of American consumers,advertisers,and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition”. Continued on Page 13 Continued on Page 13 Continued on Page 13 ■ Total over-dues stood at Continued on Page 14 ■ Also, it will keep crippling competitive process, reducing consumer choice, and stifling innovation nod to the legislations. The Bills were passed and the resolution adopted unanimously after over five hours of discussionontheseconddayof a special assembly session called by the Congress government. The opposition Shiromani Akali Dal, Aam Aadmi Party and Lok Insaaf MLAs backed the Bills and the resolution.ThetwoBJPMLAswerenot present in the House. piled up by UPdiscoms in H1 from `90,000 crore planned initially; the Centre and PFCREChavealsobeenratherquick in sanctioning funds under the scheme (`1.1lakh crore so far). ■ Further, absent a court order, the tech giant will continue executing its anticompetitive strategy MOODY’S INVESTORS SERVICE on Tuesday placed Vedanta Resources’ rating under review for downgrade following its failed attempt to delist the Indian listed subsidiary. Moody’s placed the London-based firm’s B1 corporate family rating (CFR) under review for downgrade. The same action was also initiated for the B3 ratings on the senior unsecured bonds issued by Vedanta and those by its wholly-owned subsidiary Vedanta Resources Finance II,and guaranteed by Vedanta,affecting $4.2 billion in outstanding debt. “The ratings outlook was changed to ratings under review from negative,” the global rating agency said in a statement. The review, Moody’s said, follows an increase in refinancing risk and significant funding needs at the holding company level following Vedanta Resources’ failure to acquire the balance shareholding in key subsidiary Vedanta Ltd that would have improved access to group cash. `14,000 crore rural consumers have paid their bills at least once. breaks law in using its market power to fend off rivals FE BUREAU New Delhi, October 20 Fresh over-dues to gencos of ■ SinceApril this year, only 18% of ■ Lawsuit claims Google Moody's puts Vedanta Resources under review for downgrade Caught in a vortex `37,000 crore by September end, despite `10,500 crore released to Centre-owned power producers under special liquidity facility US justice dept and 11 states filed the lawsuit against Google ● FAILED DELISTING UP discoms’ dues to gencos keep piling up DEEPA JAINANI Lucknow, October 20 NOT SO SOCIAL A CLASS APART A police constable teaches the children of migrant labourers as schools remain shut due to Covid, at a temple near Red Fort, in New Delhi on Tuesday PRAVEEN KHANNA STATE OF THE MATTER Punjab Assembly passes Bills to ‘negate’ Centre’s farm laws PRESS TRUST OF INDIA Chandigarh, October 20 THE PUNJAB ASSEMBLY on Tuesday adopted a resolution rejecting the Centre’s newfarm lawsandpassedfourBillsitsaid willcounterthecontentiouslegislation enacted byParliament. Punjab chief minister Amarinder Singh on Tuesday met governor VP Singh Badnore after the state assembly unanimously passed the Bills and hoped that he will give his Punjab chief minister Captain Amarinder Singh speaks during the second day of the Special Vidhan Sabha Session on Tuesday DRIVING DEMAND Keeping it festive, small-town India is a big shopper online ASMITA DEY New Delhi, October 20 WITH MUCH OF India still home-bound,agoodpartofthe shopping for the festive season was expected to be done online. What wasn’t expected was that so many of the first-timers would hail from small towns. Goingbyreportsfromthemajor shopping platforms, smalltown India seems to be playing a big part in this year’s festive sales.They’re seeing customers from Jhumri Telaiya, Cumbum Thottiyam,TawangJaunpurand Mokokchung transact on their marketplaces. While nearly 50%ofthenewcustomerswho shopped on Flipkart on the first day of the ongoing sale hailed from tier-3 cities and beyond, and in case of Amazon, this sharewas over90%. Fashion retailer Cantabil that sells men’s apparel said tier-2 and tier-3 cities have contributed about 80% of the sales. Ravindra Singh Negi, ILLUSTRATION: ROHNIT PHORE president (electrical consumer durables) at Havells India,said a significant share of online revenues has been recorded in tier-2 and tier-3 cities. That’s not surprising according to retail expertswho point outthatwhilecustomers in the smaller cities and towns may not be familiar with the Englishlanguage,itisnolonger a barrier since everything’s accessible in the vernacular. Withethnicappareltheflavour of the season, Fashion retailer BibaconfirmedtoFEthatsmall towns are clocking higher onlinesalesthisyear.Whilethe penetration of smartphones has increased outside of the metros,thereisagrowingcomfort with digital payments, even among the middle-aged. “The real reason for the increaseinvolumesisthatpeoplearenowbecomingcomfortablewithshoppingonline,”said Ankur Pahwa,partner at EY. Continued on Page 14 CHENNAI
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