OPINION, P6 ECONOMY, P2 AJAY CHHIBBER Govt must create a five-year plan on PSU privatisation INTERNATIONAL, P8 EDITORIAL RIGHT DIRECTION POLICY CHANGES India Inc soars with pent-up demand and the formal sector gaining market share, but that can’t last PM says agri reforms will benefit small, marginal farmers Biden faces pressure as US sets new course on immigration AHMEDABAD, WEDNESDAY, FEBRUARY 17, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XV-218, 16 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: 52,104.17 ▼ 49.96 NIFTY: 15,313.45 ▼ 1.25 NIKKEI 225: 30,467.75 ▲ 383.60 HANG SENG: 30,746.66 ▲ 573.09 `/$: 72.70 ▼ 0.01 `/€: 88.36 ▼ 0.16 BRENT: $63.04 ▼ $0.26 GOLD: `47,257 ▲ `62 FINANCE MINISTER NIRMALA Sitharaman on Tuesday explained the government's priorities to the RBI's central board during their first meeting after presentation of the Union Budget 2021-22, reports PTI. Bitcoin soars above $50,000-mark for first time ever BITCOIN SOARED ABOVE $50,000 on Tuesday to an all-time high, adding steam to a rally fuelled by signs that the world's biggest cryptocurrency is gaining acceptance among mainstream investors and companies, reports Reuters. Arbitrage funds find more takers amid volatility Buy cash market Equity Arbitrage funds Debt Dynamic asset allocation funds 38.3 15.5 0.7 Borrowings -30 -1.4 0 -14.5 15 -15 FY21 *Data of 15 big states reviewed by FE compared with `1.95 lakh crore in the year-ago period, down22%.TheFY21capextarget for all states as per the state budgets was `6.5 lakh crore, 30% more than the achieved spending in FY20. The curbing of capex bythe states is primarily due to the acuterevenueconstraints they are facing (see chart). Continued on Page 2 $1.2-BN ARBITRATION Cairn files case in US to push India to pay ADITYA KALRA & ADITI SHAH New Delhi, February 16 CAIRN ENERGY HAS filed a case in a US court to enforce a $1.2-billion arbitration award it won in a tax dispute against India,a court document showed, ratcheting up pressure on thegovernmenttopayitsdues. In December,an arbitration body awarded the British firm damages of more than $1.2 billion plus interest and costs.The tribunalruledIndiabreachedan investment treaty with Britain andsaidNewDelhiwasliableto pay.Cairn asked the US court to recognise and confirm the award,includingpaymentsdue since 2014 and interest compounded semi-annually,according to the February 12 filing Fresh default on payment towards NCDs, says Future Consumer Govt mulls new panel to hasten privatisation SIDDHARTHA SINGH February 16 THE GOVERNMENT IS considering setting up a body comprising of independent experts that will take over the role of privatising state-run companies once the government decides to divest, according to people with knowledge of the matter. The panel will replace bureaucrats, who currently manage privatisation, as well as minority stake sales, the people said asking not to be identified because the discussions are private. The proposal is at an early stage and a final decision hasn’t been taken, they said. An external panel will help accelerate the asset sale process and bypass red tape, according to the people. India still hasn’t manage to find a buyerfordebt-riddenAirIndia FE BUREAU Mumbai, February 16 EVEN AS THE beleaguered Future Group remains embroiledinalegal tusslewith Amazon overthe sale of assets, one of its group companies Future Consumer on Tuesday reported a default. The company said in a regulatory filing it has been unable to service its obligations due on February 15, 2021, which include a principal redemption of `11.76 crore and and interest on nonconvertible debentures(NCDs) of `5.58 crore. The company also mentioned that an interest obligation of `13.89 crore, due on NCDs upto November 15, 2020, remains unpaid. Future Consumer had issued debt securities — NCDs with a tenure of seven years — worth `200 crore. The company is now indebted to the tune of `526 crore as on January 31. Amazon had earlier approached the Supreme Court against a Delhi High Court order that vacated the status quo on Future Group’s proposed `24,713-crore deal with Reliance Industries. TAX TANGLE In Dec 2020, an arbitration body ruled New Delhiwas liable to pay $1.2 bn plus interest and costs Britain's Cairn asked the US court to recognise and confirm the award It also asked for payments due since 2014 and interest compounded semi-annually seen byReuters. Continued on Page 2 SAT stays Sebi's order banning Biyani THE SECURITIES APPELLATE Tribunal (SAT) has stayed the order passed by market regulator SEBI, that had put a one-year ban on Future Retail Chairperson Kishore Biyani and some other promoters from the GOVERNANCE ● RISING DEBT securities market, reports PTI.SAThasalsodirectedthe Future Group promoters to depositasumof`11croreas aninterimmeasure.Thecase willnowcomeuponApril12, 2021 before SATforthe next hearing. ■ Page 4 Market volatility helped arbitrage funds and dynamic asset allocation funds deliver better returns compared to liquid funds as risk-averse investors looked for better yields ■ Personal Finance, P9 AMAZON ON TUESDAY said that it will begin manufacturing its devices, including FireTVsticks,inChennailater thisyear,in partnershipwith Foxconn’s subsidiary Cloud NetworkTechnology,reports fe Bureau in NewDelhi. Continued on Page 2 Buying and managing a farm now made easywith tech Bengaluru-based agri-tech firm Hosachiguru gives you a chance to own a farmland, grow trees/crops, and spend your weekends at the farm, all supported by GIS monitoring and spectral imaging ■ eFE, P9 QuickPicks Tata Group to buy majority stake in BigBasket for `9,500 crore TATA GROUP will buy a 68% stake in online grocery startup BigBasket for about `9,500 crore, a television channel said on Tuesday, citing sources, reports Reuters. The salt-to-software conglomerate has been planning to launch a "super app" that will tie in all its consumer businesses, according to media reports, as it competes against Amazon and RIL in India's booming e-commerce market. Bengaluru-based BigBasket competes with Flipkart and Amazon's "Fresh" service. PAGE 4 Centre tells SC: Contemplating ‘some action’ on regulating OTTs THE CENTRE on Tuesday told the Supreme Court that it was contemplating “some action" on the issue of regulating OTT platforms such as Netflix and Amazon Prime, reports PTI. A bench comprising Chief Justice SA Bobde and justices AS Bopanna and V Ramasubramanian, which was initially of the view that the petitioner should approach the Centre for the remedy, asked the government to file its response within six weeks to the PIL seeking OTT regulation by an autonomous body. PAGE 3 SBI Union Bank 5,850 Bank of Baroda 4,708 Axis Bank 4,242 IDBI Bank Total for 18 banks 2,809 25,539 Source: Banks gory even as it continues to make efforts to recover the amount involved. The other kind is when the bank takes the loan off its books altogether while providing fully for it. Continued on Page 2 29, outstanding non-food credit stood at `106.17 lakh crore, data from Reserve Bank of India (RBI) showed. Deposits with the banking systemcontinuedtogrowata fastclipandstoodat`147.98 lakh crore, up 11.06% y-o-y. The credit-deposit ratio was 71.75%. ■ Page 10 PITCH PERFECT Indian team celebrates after beating England in the second Test by 317 runs, in Chennai on Tuesday. India drew level in the four-match series BCCI TWITTER Spike in auto fuel taxes FE BUREAU Centre to garner `1.9 lakh crore extra in FY21 Retail price of petrol in Delhi touched `89.29/litre, an all-time-high. The Centre doesn't benefit from rising prices, as the taxes it levies on the fuels are specific (quantity-wise). Yet, thanks to the steep hikes in tax rates in March-May 2020, it mobilised an extra `1.9 lakh crore (95%), as pre-devolution revenue from taxes on the two auto fuels in FY21. Unless the taxes are cut, the Centre's mop-up will get a further boost from higher consumption in FY22. Centre's pre-devolution revenue from excise duty and other imposts on petrol and diesel (` lakh cr) Extra revenue# from taxes on the auto fuels due to rate hikes in March and May, 2020 (` lakh cr) FY22 (E) FY22 (E) 4.3 FY21 (E) 4 FY20 2.2 2 FY21 (E) 1.9 # as per consumption estimates by govt for FY21 and Icra for FY22 even after Prime Minister Narendra Modi’s cabinet approved the sale in 2017. Continued on Page 2 The manufacturing line, whichisafirstforthee-commerce major in the country will be able to produce“hundredsofthousands”ofFireTV stickdeviceseveryyear,catering to the demand of Indian customers. ■ Page 4 Centre's taxes* on the two auto fuels (`/litre) As in Feb, 2020 Current 32.98 31.83 19.98 15.83 Petrol Diesel *Excise duty, special additional excise, road and infra cess and agri infra cess, which came into effect on February 1, 2021 THE ICMR IS making efforts to test the efficacy of the vaccine against the South African and Brazilian strains of the Covid19virus,BalramBhargava,DG, ICMR,said on Tuesday. Bhargava said four cases of South African strain and one case of the Brazilian strain have been found in the countrysofar.Alltravellersandcontacts,he confirmed,have been tested and isolated. Meanwhile,India has completed nearlynine millionvaccinations and, at the current pace,would complete ten million vaccinations by Friday, data released by the government showed. Of those who received their first dose four weeks ago, only 37.5% have received the second dose, in the first three days. The rollout of the programme has not uniform across the country with Bihar having covered 81% of its healthcare workers but Delhi having vaccinated only 42.36%. In Punjab and Tamil Nadu, the levels are below 40%. Continued on Page 2 ● INTELLIGENCE REPORT COVID BLUES Ad spend fell a fifth due to the pandemic FE BUREAU Mumbai, February 16 n isio Estimated ad spend break-up in 2021 (` crore) ev Tel al it Dig 0 int Pr 1,57 r oo 7 td 1,68 Ou io ud A 520 a em Cin crore bythe end of 2020. Fresh estimates indicate that advertising investment in 12,731 27 ,7 00 4 INDIA’SADVERTISINGEXPENDITURE plummeted 21.5% in 2020 on account of the Covid19 pandemic, according to marketingservicesconglomerate GroupM.India,which is the second fastest growing advertising market in the world, clocked`65,053croreinmedia spends lastyear. At the beginning of 2020, GroupM had estimated the market to be worth `91,641 selling stakes in state-run companies in FY22 FE BUREAU New Delhi, February 16 9,986 ,91 L&T FINANCE Holdings (LTFH) on Tuesday said it has closed its rights issue and has raised over `2,998 crore, reports PTI. The rights issue was oversubscribed by approximately 15%, it said in a release. The allotment of shares will take place next week on the same day, the company said, adding the shares will be listed on the BSE and NSE on or by February 26. The NBFC is present in businesses, including rural finance, housing finance, infrastructure finance and investment management. PAGE 10 (` crore, Q3FY21) Non-food credit growth slips below 6% LOAN GROWTH IS slowing across financial markets. Growth in non-food credit slipped back below the 6% mark to 5.92% year-on-year (y-o-y) during the fortnight ended January 29 from 6.35% y-o-y in the previous fortnight, reports fe Bureau in Mumbai. As on January `1.75 lakh crore ICMR testing efficacy of vaccine against new virus strains 35 L&T Finance Holdings raises `2,998 cr through rights issue A CLUTCH OF banks have together written off loans worth `25,539 crore in the December quarter, even as an interim judicial stay on the recognition of bad loans after August 31 kept slippages in check. Data for 18 banks compiled by FE showed that write-offs remain a key tool for banks to reduce the amount of non-performing assets (NPAs) on their books at a time when the process and timelines for settlement and recovery have become elongated. Banks typically make two categories of write-offs. A technical write-off is made when the bank removes an account from the NPA cate- Panel to replace bureaucrats, who currently manage privatisation, minority stake sales Proposal is at an early stage and a final decision hasn’t been taken External panel to help accelerate asset sale process, bypass red tape Govt plans to raise ● COVID-19 Banks wrote off loans worth over `25,500 crore in Q3 by FE BUREAU Mumbai, February 16 ON THE TABLE Amazon to make Fire TV Stick in India NPA WATCH Special Features Sell derivatives market FY20 30 Tax revenues BUDGETARYCAPITALEXPENDITURE by state governments mighthavedroppedbynearlya quarteronyearinApril-December FY21 and it could fall further in January-March due to revenue constraints,according to a review of the data from fifteen large states byFE. This contrasts with a 31% year-on-year increase in the Centre capital expenditure in the current year to `4.39 lakh crore (revised estimate) and large central public sector undertakings (CPSEs) achieving 67% of their capex target in April-January by spending `3.35 lakh crore. Among them, the fifteen states — Uttar Pradesh, Tamil Nadu,MadhyaPradesh,Andhra Pradesh,Karnataka,Rajasthan, Odisha,Telangana,Kerala,West Bengal,Gujarat,Punjab,Chhattisgarh,HaryanaandJharkhand — reported combined capital expenditureof`1.53lakhcrore in April-December of FY21, (April-December, growth %, y-o-y) Total expenditure PRASANTA SAHU New Delhi, February 16 45 8.8 1.3 2.1 In contrast, Centre sees a 30% rise in capex in FY21, and budgets a 26% jump for FY22 States’ finances Revenue expenditure FM addresses RBI board, explains priorities of govt States’ capex down nearly a quarter -3.1 -21.5 THE EPFO IS likely to announce the rate of interest on provident fund deposits for financial year 2020-21, on March 4, when its Central Board ofTrustees will meet at Srinagar, reports PTI. Speculation is rife that it may lower interest on PF deposits for FY21, from 8.5% it provided for FY20,in view of more withdrawals and lesser contribution due to Covid. APR-DEC FY21 Capex IN THE NEWS EPFO may declare interest rate on PF deposits on Mar 4 Source: GroupM 2021 will grow by 23.2% to reach an estimated `80,123 crorethiscalendaryear.Digital media, whose growth was accelerated in 2020,will claim 35% of media spends, second only to television which is expected to attract 45% of the `80,123-crore investment. Digital media will claim 40% share of the `15,000crore of incremental ad spend in 2021. Advertisers are expected to invest a total of `27,700 crore on digital media and `35,914 crore on television ads. Continued on Page 2 ‘N Korean hackers tried to steal Pfizer vaccine data’ SANGMI CHA & HYONHEE SHIN Seoul, February 16 SOUTH KOREA'S INTELLIGENCE agency has said North Korea attempted to steal information on coronavirus vaccines and treatments by hacking Pfizer, a lawmaker briefed by the agency said on Tuesday.Digital espionage targeting health bodies, vaccine scientists and drugmakers has surged during the Covid-19 pandemicasstate-backedhacking groups scramble to secure the latest research and information about the outbreak.HaTae-keung, an opposition member of the parliamentary intelligencepanel,saidthe pharmaceutical giant was among those hacked in the bid tostealinformationonvaccines and treatments. Continued on Page 2 Ahmedabad