OPINION, P6 ECONOMY, P2 UTTAM GUPTA Budget FY22 misses the chance to reform fertiliser subsidy INTERNATIONAL, P8 SUNIL JAIN POSITIVE INDICATORS HIGH HOPES PM busts farm law canards, but saying that MSP, food subsidy will continue goes against real reform Economy witnessing sustained recovery, says finmin report Huawei’s founder confident of weathering US curbs in Biden era KOLKATA, WEDNESDAY, FEBRUARY 10, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL. 30 NO. 86, 24 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 READ TO LEAD SENSEX: 51329.08 ▼ 19.69 NIFTY: 15,109.30 ▼ 6.50 NIKKEI 225: 29,505.93 ▲ 117.43 HANG SENG: 29,476.19 ▲ 156.72 `/$: 72.89 ▲ 0.08 `/€: 88.25 ▼ 0.48 BRENT: $60.63 ▲ $0.07 GOLD: `47,862 ▲ `405 Spectrum auction: Jio, Airtel, Vi apply for participation THE THREE private telecom operators, Reliance Jio, Bharti Airtel and Vodafone Idea, have put in applications for participation in the spectrum auction, scheduled to begin on March 1, reports fe Bureau in New Delhi. All-India vehicle registrations y-o-y (%) Slowdown due to price hikes, shortage of vehicles 2,975 74,439 54,662 « 17,63,011 -9.7 21.9 15,92,636 3,626 55,835 60,754 Others 63,785 -25 CVs 2,81,666 31,059 67% of capex target achieved till Jan end; depleting internal investible resources could reflect in FY22 « Tractors 12,75,308 PRASANTA SAHU New Delhi, February 9 -4.5 PVs 11,63,322 -51.3 3Ws -8.8 2Ws Jan 2020 Capex by CPSEs* `3.35 lakh crore Or 67% of the FY21 target achieved in April-Jan TOP INVESTORS Jan 2021 Source: Fada Research like semiconductors has hit production and that is leading to longer waiting periods. Industry executives say Maruti Suzukihasbookingsforaround 2.15 lakh vehicles while Hyundai has bookings for 1 lakhcars;foranypopularmodel a customer needs to wait for around 4-6 weeks longer than thenormalperiodof7-10days. Continued on Page 2 LARGE CENTRAL PUBLICSECTOR entities — companies and undertakings (CPSEs) —achieved 67% of their capital expenditure target for FY21 in April-January of the financial year by spending `3.35 lakh crore,according to official sources.This is indeed a creditable achievement in Achievement in April-Jan as % of annual target (RHS) April-Jan FY21 (` crore) 1,25,000 1,00,000 75,000 11.1 « RETAILSALES OFautomobiles slipped into negative territory in January, falling nearly 10% year-on-year after registering an increase in December.Sales of passenger vehicles (PVs), which have shown growth in somemonthsduringthefiscal, declined by 4.46% y-o-y. The fall has been attributed to a shortage of vehicles with manufacturers running out of semiconductors and other components, fading pent-up demandandrecentpricehikes. Experts said there was bit of a lull after the festive season. The Federation of Automobile DealersAssociations (Fada) observed inventory for PVs was relatively low and down to 1015days.Thatwouldimplysales of available vehicles have been brisk; there have been some reports of long waiting list for some models. Typically, PV inventory for manufacturers likeMarutiSuzukiandHyundai Motoris about 30-35 days. Manufacturers point out a shortage of key components « 2,94,817 FE BUREAU Chennai, February 9 CPSEs weather blow, regain capex pace « THE DEPARTMENT ofTelecom (DoT) has not prepared a Cabinet note for the adoption of PPP mode to expedite implementation of rural broadband project BharatNet even after over a year of Digital Communication Commission's approval, the Standing Committee on Information Technology said in a report, reports PTI. Retail auto sales stay slow in Jan « BharatNet: Panel pulls up DoT for Cabinet note delay COVID IMPACT « TATA STEEL swung back into black in the October-December quarter, posting a consolidated profit of `4,010.94 crore for the quarter on the back of increased income, reports PTI. The company had clocked a loss of `1,228.53 crore in the year-ago quarter, Tata Steel said in a BSE filing. LOSING SPEED « IN THE NEWS Tata Steel back in black, Q3 profit at `4,011 crore 50,000 1,00,000 84 90,000 62 61 64 Railways NHAI 100 80 60 20,000 25,000 0 81 16,000 17,000 ONGC IOC NTPC 40 20 0 *Data of CPSEs and departmental undertakings with annual capex budget of at least `500 cr the pandemic-ravagedyear,as it reflects a sharp pick-up after the lockdown period (Q1 capex by these entities were just 7% of the annual target) and its immediate aftermath. The normal pace of CPSE capex in the crisis period is catalysed by the Centre’s constant prodding and monitoring of projects. Continued on Page 2 FDI norms for e-commerce: Govt may issue clarification THE GOVERNMENTIS considering issuing a clarification on its FDI rules fore-commerce, commerce and industry minister Piyush Goyal said on Tuesday, reports fe Bureau in New Delhi. The statement comes amid reportsthegovernmentcouldtightenthepolicy that could force players like Amazon and Flipkart to restructure their existing marketing tie-ups.Goyal said Indiawill resume talks on a trade deal with the US once a new trade representative assumes office there. Despite differencesoveroffers,bothIndia and the US negotiated a mini deal for months, before the Americanelectionpurportedly slowed down the process.The USwasthelargestsinglemarket for India, with bilateral goods tradeworth $89 billion in FY20. ■ Full report on Page 2 LABOUR UNREST Wistron to restart Karnataka factory SANKALP PHARTIYAL, AFTAB AHMED & BEN BLANCHARD New Delhi, February 9 APPLE ON TUESDAY said supplier Wistron Corp will restart operations at its factory in Karnataka afterviolence at the site ledtoitsshutdownlatelastyear, thoughtheTaiwanesecompany would remain on probation. Cupertino,California-based Apple, which uses Wistron to assembleitssecond-generation iPhoneSE,saiditsstaffandindependentauditorshadbeenworking for the past eight weeks to ensureallsystemsandprocesses wereinplaceatthefactoryinthe Narasapura industrial area. “As Wistron begins the processofhiringteammembers and restarting theiroperations, everyoneatthefacilitywillundergoanewtrainingprogramme toensuretheyunderstandtheir rights and how they can raise ■ Wistron to remain on probation, Applewill track progress Apple uses Wistron to assemble its secondgeneration iPhone SE ■ The plant in Karnatakawas damaged during staffprotests in Dec 2020 over unpaidwages anyconcerns,”Apple said. Continued on Page 2 Cairn Energy CEO to meet FM next week CAIRN ENERGYCEO Simon Thomson will meet India’s financeministernextweekto discuss the $1.4-billion arbitration award it won against India’s retrospective tax demandandtheseizingofits assets;innoothercaseofret- rospective demand were assetsseized.Shouldthetalks fail, Cairn has the option of tryingtoattachIndianassets overseasaswasdonesuccessfully by ConocoPhillips against the Venezeulan oil PSU in 2018. ● CLEAN-UP IDBI Bank to mull setting off accumulated losses as on April 1, 2021 FE BUREAU Mumbai, February 9 SWING KING England’s James Anderson celebrates the wicket of India’s Ajinkya Rahane on the final day of the first Test match, in Chennai on Tuesday. England won by a massive 227-run margin QuickPicks Equity MFs see outflows for CPSEs: Govt’s returns from 7th straight month in Jan capital investments plunge EQUITY SCHEMES continued to see outflows for the seventh straight month in January with investors choosing to take home some profits, reports fe Bureau in Mumbai. The net outflows from open-ended equity schemes were `9,253.22 crore, Amfi data showed, though inflows into systematic investment plans (SIPs) were strong at `8,023.39 crore. The combined outflows from open and close-ended equity schemes were `12,194.18 crore. Debt schemes saw an outflow of `33,408.76 crore during the month. PAGE 10 THE GOVERNMENT'S gains from capital investments in CPSEs seem to be on a perpetual decline, going by a recent audit report by the comptroller and auditor general (CAG), reports fe Bureau in New Delhi. The consolidated returns on government investment in 53 listed CPSEs fell from 190.24% in 2016-17 to 182.53% in 2017-18 to 159.31% in 2018-19, the CAG observed in a report tabled in Parliament on Tuesday. In fact, the consolidated ROI (annual average rate) had been declining from 469% since 2007-08, the final year of the economic boon in early 2000s. PAGE 2 IDBI BANK ON Tuesdaysaid it will be holding a board meeting on Friday to consider setting off its accumulated losses as on April 1, 2021. The move gains significance at a time when the bank claims that it satisfies all conditions forexiting the central bank’s prompt corrective action (PCA) framework and the government has expressed its intention to privatise the bank. As per the Reserve Bank of India’s (RBI) rules, IDBI Bank is classified as a private bank but it is still effectivelypublicsector in nature, majorityowned as it is by the Life Insurance Corporation (LIC) of India. In a notification to the exchanges, the bank said, “In terms of Regulation 29 of the Sebi (LODR) Regulations, 2015, it is hereby informed that a proposal for setting off the accumulated losses of the bank...shall be considered at the meeting of board of directors of IDBI Bank Ltd.to be held on Friday, February 12, 2021.” Continued on Page 2 TOUGH LOVE Rose exports hit by pandemic, higher freight FE BUREAU Pune, February 9 IN THE RUN-UP to the Valentine’sDaycelebrations,exports of roses to the UK, Europe and Australia have been hit by the Covid-19 pandemic and are likelyto see a drop of 50%. Lastyear,around 10 million rose stems were exported, Praveen Sharma, president, Indian Society of Floriculture Professionals (ISFP), said. The Valentine season typically accounts for 20-30% of the Yearly exports (` lakh) 8,000 6,000 5,797 5,747 4,000 4,987 38% 3,080 2,000 0 annual revenues. Indian roses sellat18-50eurocentsperstem with the lengths varying from 40-70cm.Rosessolddirectlyto florists command a premium 2017-18 2018-19 2019 2020 Jan-Nov while the flowers sold in supermarkets are mass products, Sharma pointed out. The Pune region alone exports around 5 million stems ■ Wistron said it has paid all workers and introduced new hiring and payroll system butmayexportonly2-3million this season. Freight costs for flowershavemorethandoubled since the outbreak of Covid-19; shippingcoststoEuropeandestinationsfrommajorproducing regions such as Bengaluru and Pune have now reached `200225 a kg from `70-80 perkg in the pre-Covid period. The UK accounts for 35% of Indian exports followed by Japan (19%) and Australia (18%). Continued on Page 2 Kolkata