OPINION, P6 ECONOMY, P2 MADAN SABNAVIS Does India even need new players in the banking sector? NATION, P14 SHOBHANA SUBRAMANIAN ECONOMIC REFORMS POST-COVID COMPLICATIONS Allowing business houses to own banks is fraught with risk, given India's lax supervisory system Momentum to continue, more steps in the works: FM Three-time Assam chief minister Tarun Gogoi dies at 84 NEW DELHI, TUESDAY, NOVEMBER 24, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 229, 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: 44,077.15 ▲ 194.90 NIFTY: 12,926.45 ▲ 67.40 NIKKEI 225: 25,527.37 ▼ 106.97 HANG SENG: 26,486.20 ▲ 34.66 `/$: 74.10 ▲ 0.05 `/€: 88.01 ▼ 0.09 BRENT: $45.59 ▲ $0.63 GOLD: `50,180 ▼ `19 ASSERTING THAT the 2014-29 period between the 16th to 18th Lok Sabha is "very important" for a young democracy like India, Prime Minister Narendra Modi on Monday said the last six years have been "historic" for the country's development and a lot remains to be done in the remaining period, reports PTI. Don’t be costcentric: Gadkari to auto parts makers UNION ROAD transport minister Nitin Gadkari on Monday asked the auto component industry to refrain from a cost-centric approach and instead focus on the quality of the products on the lines of international manufacturing standards, reports fe Bureau in Chennai. ‘India may have current account surplus this FY’ CHIEF ECONOMIC Adviser KV Subramanian on Monday said India is likely to post current account surplus in the current fiscal as there is moderation in imports due to under-heating of the economy triggered by the Covid-19 crisis, reports PTI. TAX HOLIDAY Start-ups to not get extra relief Finance ministry said to have turned down DPIIT proposal to extend tax holiday window FE BUREAU New Delhi, November 23 THE FINANCE MINISTRY is learnt to have turned down a proposalofthedepartmentfor the promotionof industryand internal trade (DPIIT) to extend the cutoff date for the incorporation of start-ups to be eligible for the income tax holiday by five years from April 2021. This has dashed hopes of industry executives who were eyeing extended tax relief to help proliferation of start-ups. Currently,start-upsthatare incorporated between April 1, 2016,and March 31,2021,are allowed to apply for the I-T relief and the eligible ones get it fora block of three out of the first 10 years. The revenue department believes that in sync with the government’spolicyobjectives in recent years, the myriad exemptions need to be phased outandtaxratesrationalisedso that a much simpler and more efficienttaxregimecanbeush- Tips on how to choose the mutual funds ideal for you Debt fund Moderate Moderate High Low to moderate LOW High Very High Start-ups incorporated fromApr 2016 to Mar 2021 can apply for I-Trelief DPIITwants cutoffdate to be extended by five years ■ I-Tdept feels exemptions need to be phased out to make tax regime simpler ■ Eligible start-ups get tax holiday in a block of 3 out offirst 10 years ■ Only avery tiny section of start-ups got the benefit ` ered in.Already,the cutoff date wasonceextendedbytwoyears through March 2021. In its proposal forthe FY22 Budget, the DPIIT, however, wanted the relaxation to continue for another five years to enable a wider pool of startups to get the benefits, especially in the light of the Covid19 pandemic. Meanwhile, industry executives complain that only about a very tinysection of the start-ups has so far got the tax benefit, thanks to a “rigid” approval process. Continued on Page 2 ● AMID PANDEMIC Special Feature Equity fund DIFFERENT STROKES From the risk-o-meter rating to performance indicators such as Alpha and Beta along with the Sharpe and Treynor ratios, each helps identify the mutual fund ideal for you ■ Personal Finance, P9 QuickPicks Fake invoices: GST registration process likely to be overhauled THE GOODS and Services Tax Council will soon consider comprehensive changes to the registration process for new applicants which will make the process stringent for those not opting for the Aadhaar-based authentication, government sources said, reports fe Bureau in New Delhi. The new regulations are aimed at curbing fly-by-night operators who use fake invoices to avail input tax credit (ITC). Sources said that suggestion are based on need to curb fake invoice menace while retaining simple compliance norms under GST. PAGE 2 Promoter reclassification as public shareholder: Sebi relaxes rules SEBI ON Monday proposed to change the minimum threshold for voting rights for reclassification of a promoter as a public shareholder and suggested all promoter entities disclose shareholding even in case of 'nil' holding, reports PTI. Under the proposal, Sebi said the reclassification condition on shareholding should be amended such that the promoter and related persons seeking reclassification should not together hold 15% or more of the total voting rights in the listed entity. Rice exports see a surge; shipments up 36% in H1 PRABHUDATTA MISHRA New Delhi, November 23 EVEN AMID THE pandemic, India’s rice exports registered an exponential growth of 70% to 7.5 million tonne during the first six months of this fiscal, thanks to a doubling of non-basmati shipments backed by strong demand from countries in West Africa and south-east Asia. Indollarterm,theexportsof thegraingrew36%to$4.08billion during the period,while a 43% growth to `30,609 crore was seen in rupee term. Rice exports would have been even higher, had freight movements been eased, exporters said. Rice shipments are poised for a growth of over 60% to 15.5 million tonne this fiscal,theyadded. “Considering the growth in exports during H1, the nonbasmatishipmentsaregoingto exceed 10 million tonne in FY21, which will be a record,” said BV Krishna Rao, president of the Rice Exporters Association. The previous annual record for non-basmati rice exports was 8.6 million tonne reported in 2017-18. Continued on Page 2 SHARP REACTIONS COVID SHIELD Vaccine for limited use likely Dec end Maximum retail rate to be `1,000 a dose; govt to buy for `250 FE BUREAU Pune, November 23 EVEN AS ASTRAZENECA on Monday announced interim results of clinical trials for the Covid-19 vaccine saying it was 70% effective on average, Serum Institute of India (SII) indicated it could supply doses of the vaccine for emergency and limited use by December end following regulatorynod. SII has already manufactured 40 million doses and expects to go up to 100 million by January 2021. By July, it could supply 400 million doses,it added. Corporates owning banks: S&P, Rajan red-flag concerns The vaccine’s simple supply chain and our no-profit pledge and commitment to broad, equitable and timely access means it will be affordable and globally available. FE BUREAU Mumbai, November 23 —PASCAL SORIOT, CEO, ASTRAZENECA ■ The AstraZeneca vaccine was 90% effective in preventing Covid-19 when it was administered as a half dose followed by a full dose at least a month later ■ The vaccine's cost to ED and CEO Adar Poonawalla told a news channel SII hopes to win an India approval foremergencyuse by 2020 end. The maximum retail price forthe private market,Poonawalla said,would be `1,000 a dose while the governmentwould be buying it at `250.“We are at the finishing line,”he tweeted. AstraZeneca said the trials forthevaccine,beingdeveloped with the University of Oxford, had revealed it was 70% effective on average. governments works out at just a few dollars a shot, a fraction of the price of shots from Pfizer and Moderna Continued on Page 2 ■ AstraZeneca says vaccine can be 90% effective, Page 8 Rising cases: SC asks Delhi, Guj, PM likely to hold virtual Centre to file status reports meeting with states today THE COVID-19 pandemic has“worsened”in Delhi and gone “out of control” in Gujarat, the Supreme Court said on Monday,directing theCentreandallstatestoappriseitwithintwo days of the steps taken to contain the situation nationwide,reports PTI.The situation is likely toworseninDecemberandallstateshavetobe readyto“combat”it,theSCsaid. ■ Page 3 PRIME MINISTER Narendra Modi is likely to meet with CMs and other representatives of states and UTs via video-conferencing on TuesdaytoreviewtheCovid-19situationand discuss the vaccine distribution strategy, sources told PTI.Thosewhowould attend the meeting include Delhi CM Arvind Kejriwal andWest Bengal CM Mamata Banerjee. Employment BLOOMBERG 122 m Jobs are slowly coming back people had gone jobless in April because of the lockdown Jobs are returning in India as the economy recovers from lockdown-related losses. Quess Corp, which claims to be the country's largest private-sector employer, saw its workforce rise in October for the first time since the outbreak. “We are seeing a rebound definitely in the employment market,” Quess chiefAjit Isaac said. 480 m people in Indian workforce ILLUSTRATION: ROHNIT PHORE IN THE NEWS 2014-29 period 'very important' for India: PM 6.98% 60 m India's unemployment rate in October, down from as high as 23.5% inApril ~220 m of them work on farms people have returned to their work spots, according to Quess chairman Ajit Isaac 120 m comprise internal migrants 4G NETWORK 'Don't force BSNL to go local’ KIRAN RATHEE New Delhi, November 23 FORMER TOP OFFICIALS of the department of telecommunications (DoT) and Bharat Sanchar Nigam (BSNL) have expressed concerns over the government’s stance that the core 4G network of BSNL should be built by domestic vendors and not global firms like Ericsson or Nokia. So far domestic vendors have not commissioned the core network of any telecom operator in the country. Such an experiment in the case of BSNLwhen it’s ventur- If we want BSNL to function in a competitive environment, it should not be subjected to conditions that are not applicable to private telecom operators. —R CHANDRASHEKHAR, FORMER SECRETARY, DoT ing into 4G services almost three-four years late compared with its private-sector peers, will not only escalate costs forthe companybut also competitively put it at a huge disadvantage. The officials told FE that giving preference to local companies should be pro- moted but it should happen in a phased manner for all the telecom companies, not just BSNL. An empowered technology group (ETG) is scheduled to take a decision around BSNL’s 4G tender later this week. Continued on Page 2 THE RESERVE BANK of India (RBI) working group’s recommendation to allow corporate housestoownbankshasdrawn sharp reactions from experts, who have red-flagged risks associated with such a move. Rating agency S&P Global on Monday said it was sceptical of allowing corporate ownership in banks given India’s weak corporate governance amid large corporate defaults over the past few years. “In addition, RBI will face challenges in supervising nonfinancial sector entities and supervisoryresources could be furtherstrainedatatimewhen the health of India’s financial sector is weak,” the ratings agency said. Former RBI governor Raghuram Rajan and exdeputygovernorViralAcharya argued against allowing companies to own banks because it would allow non-financial businesses to gain easy access to financing and encourage connected lending and because it could lead to further concentration of economic and political power in certain business houses. ADANI POWER has won short-term contacts forsupply of 6,100 mega-watt (MW) of electricity under auctionsheldbyPunjabgovernment for procuring a total of 7,000 MW, reports AnupamChatterjeeinNew Delhi. Though the tariffs US PRESIDENT Donald Trump’s hopes of reversing his election loss hungbyathreadonMondayasMichigan and Pennsylvania looked to push ahead with certifying results, while President-elect Joe Biden prepared to namemembersofhisincoming administration. Trump, a Republican, lost both election battleground states in the Nov.3 vote, but he has refused to Donald Trump & Joe Biden Continued on Page 2 —RAGHURAM RAJAN & VIRAL ACHARYA In a LinkedIn post, Rajan and Acharya also laid out likely motivationsfortherecommendations,thefirstbeingtoenable the privatisation of PSU banks. Continued on Page 2 quoted by the firm are immediatelyknown,sources said the deals were struck,at rates rangingaround`3.353.59 perunit,which are generallya tad lowerthan shortterm prices discovered in recent months. ■ Report on Page 4 AGGRESSIVE BIDDING Solar tariff hits a new low of `2 per unit ANUPAM CHATTERJEE New Delhi, November 23 THE LATEST ROUND of solar auctions in the country — conductedbystate-runSeciforsuppliestoconsumersinRajasthan —hasdiscoveredtariffof`2per unit,a newlow. The previous lowest tariff was`2.36perunitfoundunder pan-India auctionsheld in July. The winning developers bid aggressively to win contracts to set up a total capacity of 1,070 MW, marking a shift from the recent trend of solar tenders being under-subscribed. According to sources, Saudi Arabia-based Al Jomaih Energy andWaterandGreenInfraWind Energy, a unit of Singaporebased Sembcorp Industries, quoted the lowest tariff for building200MWand 400MW solar projects, respectively. State-runNTPCwillbeawarded the remaining capacity put up Trump hopes of overturning election fade concede defeat and is fighting a legal battletooverturntheresultsthereand inothercloseracesacrossthecountry. Trump’s effort to prevent Biden,a Democrat, from taking office on Jan. 20 likely will be doomed if officials confirm Biden as the winner of the votes in Michigan and Pennsylvania. Biden beat Trump in Michigan by more than 150,000 votes, or almost 3 percentage points, and the election canvassing board is required to validate the count. Why is there urgency to change the regulation? After all, committees are rarely set up out of the blue. Is there some dramatic change in perception that it is responding to? Adani Power wins big Punjab contracts A LOST BATTLE JAMES OLIPHANT Washington, November 23 RBI will face challenges in supervising nonfinancial sector entities and supervisory resources could be further strained at a time when the health of India's financial sector is weak. —S&P GLOBAL Blinken is Biden's pick as secretary of state JOE BIDEN will pick Antony Blinken as US secretaryof state, a person close to the presidentelect’s transition said on Sunday, elevating one of his most seasonedandtrustedaidesashe prepares to undo President Donald Trump’s foreign policy, reports Reuters. Blinken is a longtime Biden confidant who served as No. 2 at the State Department. ■ Page 8 New Delhi Saudi Arabia's Al Jomaih and Singapore-based Sembcorp lowest bidders NTPC gets around 600 MW too, quotes second lowest rate Assured buyers led to aggressive bidding for supplies to Rajasthan forauction,at `2.01 perunit. Industry watchers said having an assured buyer for power wasakeydrivertothediscovery ofrecordlowtariff.Asitwaswith thelastmajorsolartendersauctioned by Seci in February and July, most winning developers are backed byforeign capital. Continued on Page 2