OPINION, P6 ECONOMY, P2 SUNIL JAIN Budget FY22 not as fiscally expansionary as believed initially AHEAD OF POLLS IMMIGRATION POLICY Govt must not tie its fate to telcos' viability; junk deferred payments for spectrum & allow spectrum hypothecation MADAN SABNAVIS BACK PAGE, P14 PM Modi flags off `4,700-cr projects in West Bengal Biden ends deals with Central America restricting asylum NEW DELHI, MONDAY, FEBRUARY 8, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 294, 14 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 Continued on Page 2 through this route, has drawn up a list of 100 more operationalhighwaystretcheswitha total length of 7,000 km to be monetised through the tolloperate-transfer(TOT)mechanism by 2024-25.The target is to raise `65,000 crore. NHAIisyettoexerciseInvIT and toll securitisation routes for asset monetisation. Continued on Page 2 Solid support FE BUREAU Paddy procurement up 18%; 33% jump in Punjab Even as agitating farmers apprehend undermining of the MSP system, the government has stepped up procurement of crops. Paddy purchases by staterun agencies, including FCI for the 2020-21 crop year, was up 17.6% on year, or 91% of the annual target as on February 4. The sharpest increase in procurement is reported in Punjab (up 33.2%). Procurement of rice* in major states (million tonne) 13.6 3.8 33.2 *Rice-Paddy ratio is 6.7:10 9.2 UP 4.3 10.5 Punjab Continued on Page 2 Paddy procurement^ (million tonne) Telangana 3.2 7.9 ~52 61.2 Chhattisgarh 4 2.2 3.1 9.7 5.6 7.6 2019-20 2020-21 Andhra Odisha 40.9 All-India 2014-15 2015-16 45,471 30,624 42,866 55,129 98,995 70,241 2016-17 2017-18 2018-19 2019-20 44,342 32,066 48,661 40,816 50,520 69,846 2020-21 1,33,027 33,737* 2021-22 53,987 (Estimate) *(revised) Communications receipts (` crore) Estimate Actual ^till Feb 4 Most companies report robust top-line growth FE BUREAU New Delhi, February 7 INDIAINCCONTINUEStoturn out encouraging numbers for the Q3FY21 earnings season withveryfewdisappointments. The good news is that most companies have managed to notch up a very good top-line growthwhetherthroughbetter Net sales Total expenditure (% chg y-o-y) (% chg y-o-y) Q4 Q1 Q2 Q3 FY20 FY21 Q4 Q1 Q2 Q3 FY20 FY21 Sample of 779 companies (excluding banks & financials) volumesorpriceincreasesor,in some cases, both. Even manufacturers of capital goods that wereexpectedtoseeafallinrevenueshavesurprisedtheStreet. Withcompaniescontinuing OPM (bps, chg y-o-y) Q4 Q1 Q2 Q3 FY20 FY21 Source: Capitaline to cut costs, margins have expanded — up by 400 bps y-o-y — even where sales may nothavegrownsoimpressively. Continued on Page 2 WEEKS AFTER THE formal Brexit agreement, India has revived dialogues with the EU andlaunchedtalkswiththeUK in a bid to expedite trade deals and aid economic growth in the post-Covid era. InavirtualmeetingwithEU trade commissioner Valdis Dombrovskis on February 5, commerceandindustryminister Piyush Goyal pitched for a quick “early-harvest deal” followedbyatime-boundandbalanced free trade agreement (FTA), formal negotiations for whichhavebeenstuckoverdifferences since 2013. The EU, including the UK, was India’s largest export destination last fiscal,with a 17% share in the overall outbound shipments. Goyal also sought the EU’s endorsementofajointproposal movedbyIndiaandSouthAfrica at the WTO, to get a temporary CALIBRATED STIMULUS measures in the wake of the Covid-19 pandemic and a sharp hike in capex in the Budget for FY22 reflect the government’s economic strategy of rebuilding battereddemandwhileensuring that the supply side is ● NEW BILL Easy access to power distribution biz proposed ANUPAM CHATTERJEE New Delhi, February 7 CONTRARY TO expectations, farmers’interest in crop insurance schemes hasn’t ebbed much after the enrolment was made voluntary for loanees effective 2020-21 crop year (July-June).Atotalof5.96farmers joined either of the two schemes, PMFBY and RWBCIS, in 2020-21 against 6.1 crore in 2019-20, down just 2.4%, reports Prabhudatta Mishra inNewDelhi.Thisisdespitethe fact the schemesweren’t rolled outinGujarat,AndhraPradesh, Telangana and Jharkhand. ■ Full report on Page 2 Continued on Page 2 `1.15 lakh crore Spend on paddy procurement so far in current crop year ● VOLUNTARY OPTION No big drop in Fasal Bima enrolment BOLLYWOOD IN 2021 Theatrical releases back but some may still pick OTT ASMITA DEY New Delhi, February 7 BOLLYWOOD MAY STAGE a strong comeback in the theatres in 2021, but the pandemic has forever changed an established practice that saw films move from one channel to another — theatres, television and so on — in a pattern. With cinema halls still half-empty many producers are opting to release their films on streaming platforms without waiting for a theatrical release; ‘windowing’ is, in effect, out the window. As Jehil Thakkar, partner at Deloitte India, observes,“The days when every film,without exception, would first go to the cinemas may not ever come back.Windowing is now up in the air.” Rakesh Jariwala, partner at EY,believes contentwill nowbe Source: Film trade analysts/company inputs Renewed push In talks with EU trade commissioner, Goyal pitched for an ‘early-harvest deal’, followed by a broader FTA Formal FTAtalks with EU stuck since 2013; now to be reviewed monthly Separately, Goyal held talkswith UK’s international trade secretary Unlike EU, UK may not insist India scrap duties on auto, wine, etc; so a deal can be firmed up soon waiver of the restrictive TRIPS agreement to ensure adequate supply of Covid-19 vaccines in developing countries. Continued on Page 2 ‘Govt committed to high capex for 3 yrs’ A NEW BILL to amend the Electricity Act tabled in Parliament proposes to usher in the long-elusive competition in power distribution business. To provide more choices to consumers and bring higher efficiency in the sector, the Bill seeks to de-license the powerdistribution business and allow any entity to run distribution companies (discoms) anywhere in the country. The incumbent state-run discoms will have to “provide non-discriminatory access to theirdistribution system to all discoms registered within the same area of supply”,in return for wheeling charges to be determined by state power regulators. Of course,the newoperator can set up its own parallel distribution network, but with a condition that it can’t be for exclusive use, and needs to be shared if otherparties demand access to it. 17.6 Low target shows 5G auction unlikely in FY22 BYFIXINGAlowrevenuereceipt target of `53,987 crore from telecommunicationservicesfor FY22,theCentrehassignalledit doesn’tplantoholdauctionsfor 5G spectrum in the 3.5 GHz bandinthenextfiscal.Itplansto hold auctions for 4G spectrum inMarch,theproceedsofwhich would be accounted for in the nextfiscal.Thisauctionisfor4G bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2,300 MHz and 2,500MHz. As of February 4; season began in late September 2020, to run for a year Haryana ● SPECTRUM RECEIPTS KIRAN RATHEE New Delhi, February 7 Change, %, y-o-y Few disappointments; FMCG players, upstream firms impress 396.97 Value to be realised by leveraging IOCL's crude, product and gas pipelines Q3FY21 653.66 ~`95,000 cr A massive flood hits a dam near Tapovan in Chamoli, Uttarakhand, after a glacier broke off on Sunday. Several labourers working at the project site are feared dead -72.3 Potential value of 7,000 km of operational highway stretches to be transferred to private parties by TOT model by FY25 TRAGEDY IN THE HILLS -529.2 ~`65,000 cr -4.81 Monetisation plans over 10 years drawn up for dedicated freight corridors -15.14 SEVERAL GOVERNMENTSECTOR entities, including large companies, are set to chart out detailed plans for monetisation of their brownfield assets to raise tens of thousands of crores of rupees each. If all the plans materialise, these entities among themselves could mobilise lakhs of crores of rupees over the next 5-10 years as nondebtcapital,reducingthepressure on taxpayers to find budgetary resources for investments in capital-intensive infrastructure projects. The move follows the recent Union Budget seeking to bolster the capital available forfinancing of infrastructure projects through this not-yetwidely-used route. The National Highways Authority of India (NHAI), one ofthepioneersinassetmonetisationventures having already raised about `14,700 crore ~`1,00,000 cr -33.52 NIVEDITA MUKHERJEE, SURYA SARATHI RAY & ANUPAM CHATTERJEE New Delhi, February 7 BANIKINKAR PATTANAYAK New Delhi, February 7 0.01 FINANCE MINISTER Nirmala SitharamanonSundaysaidthe governmentwillworkwith the Reserve Bank of India (RBI) for execution of the bank privatisation plan announced in the Budget. Speaking to reporters in Mumbai, she also said the government has no plan to form any bank investment companyto house the government stakes in banks. In the Union Budget presented last week, the FM had announcedtheprivatisationof two banks as part of its disinvestment plan. Bank unions have opposed the move.“The details are being worked out. Ihavemadetheannouncement but we are working together with RBI,” she said,when asked about the proposal. NHAI, DFCCIL, IOC, HPCL, PowerGrid look to tap into brownfield projects India restarts trade talks with EU & UK -0.18 PRESS TRUST OF INDIA Mumbai, February 7 Mega plans to leverage assets -8.37 Nirmala Sitharaman AFTER BREXIT -34.08 Privatisation of banks: Govt to work with RBI, says FM MONETISATION -5.72 ● DIVESTMENT PLAN increasingly created keeping in minditssuitabilitytoaparticularscreenandthebudgetsstructured accordingly. “There is a growingrealisationthatadirect release to OTT can also be a viablemodel.Wehaveseenthat some of the big players do have adequate resources to compensateproducersforthetheatrical window if the situation so demands,” Jariwala says. Consequently, even as cinema theatres start attracting biggeraudiences, OTT deals will continue to happen. Continued on Page 2 New Delhi expandedenough to move in tandem, principal economic adviser Sanjeev Sanyal toldBanikinkarPattanayak in NewDelhi. Detailed report on Page 2