OPINION, P6 ECONOMY, P2 SUNIL JAIN Agriculture in India needs to get more market-oriented NEW GUIDELINES RAJAN-SPEAK Just like the sedition and retrospective tax laws, the new laws on digital media open up the possibility of abuse SHWETA SAINI & ASHOK GULATI NATION, P3 Govt never threatened social media employees with jail terms: IT min ‘Drastic changes in MPC framework can upset bond market’ NEW DELHI, MONDAY, MARCH 15, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 12, 16 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 RIDING ON the upbeat market sentiment, as many as five companies are set to come out with IPOs this week to raise an estimated `3,764 crore, reports PTI. The companies are expecting to benefit from an equity market which is flush with liquidity and has seen a sharp rise in new retail investors. PLI: Applications invited in Round 2 for electronics THE GOVERNMENT has started inviting applications for the second round of large-scale electronics manufacturing under the production-linked incentive (PLI) scheme with focus on some electronic components like motherboards, semiconductor devices, among others, reports PTI. Complete delayed projects first: Panel to highways min REWARDS 2021 SHUBHRATANDON Mumbai, March 14 THE GOOD NEWS is there’s total consensus more companieswouldbewillingtorollout increments in 2021 compared with 2020. There’s less of a consensus in the amounts but most HR consultancies forecast an increase of about 7-7.7% in 2021.In sum,2021 could be a good year for corporate executives with Anandorup Ghose,partner,Deloitte India, estimating that 92% of companies plan to reward employees financially versus only 60% in 2020. However, what could set 2021 apart is that only star performers and target achieverswould be rewarded and not all employees.“This year will seeanaccelerationoftheexisting trend of sharperdifferentiation and more incentivebased awards than fixed cost increases,”Ghose told FE. Sudeep Sen,business head, BANKING OPERATIONS across the country could be impacted on Monday and Tuesday as United Forum of Bank Unions (UFBU) has given a call for a nationwide strike to protest against the proposed privatisation of Death rate higher in rich, urbanised states instance, Indore on Sunday reported 247 fresh cases — a five-fold increase over the last month. The share of urban infections has risen from 62% in October to 65.1% currently. Urban centres also now account for 73% of India’s total deaths with the richer, more urbanised states reporting more deaths per capita. Continued on Page 2 584.6 India: 428.9 Delhi Tamil Nadu Karnataka 309 122.7 161.1 Maharashtra Less urban Punjab Madhya Pradesh West Bengal Andhra Pradesh Rajasthan Uttar Pradesh Odisha Bihar 200.8 (Deaths per million) 133.2 183.3 103.3 12.4 41.4 36.8 34.4 45.5 Chandigarh 115.7 deaths per million Kerala Urban areas have higher deaths expected to reward staff against 60% in 2020 ■ Increments expected to be in 7-7.7% range in 2021 ■ More incentive-based rewards expected TeamLease Services, too, believes the approach will be to pay for skills and KPI achievements. Continued on Page 2 Nationwide bank strike today, tomorrow COVID-19 ONLY A THIRD of India’s population lives in urban areas, but they account for nearly two-thirds of the country’s infections. The recent surge — over 25,320 infections reported on Sunday — extends beyond megacities like Mumbai, Delhi, Chennai and Bengaluru, spilling over to other urban pockets. For ■ More than 90% of firms More urban QuickPicks Govt to sell remaining stake in Delhi, Mum, B’luru, Hyd airports THE CENTRE plans to sell its residual stake in already privatised Delhi, Mumbai, Bengaluru and Hyderabad airports as part of its ambitious `2.5-lakh-crore asset monetisation pipeline, sources told PTI. The sale of AAI’s remaining stake in the four airports and also 13 more airports have been identified for privatisation in the 2021-22 fiscal. PAGE 4 two state-owned lenders, reports PTI. Services such as deposits andwithdrawal at branches, cheque clearance and loan approvals would be affected due to the strike. ■ Page 4 HIT TO EXPORTS Recovery continues Exporters fear low RoDTEP refunds but losing tempo Better pay hikes for top achievers UNHAPPY OVER delayed highway projects amounting to `3.15 lakh crore, a parliamentary panel has asked the ministry of road transport and highways to prioritise their completion instead of announcing new projects, reports PTI. The 888 delayed projects pertain to construction of 27,665 km of NHs. ISHAAN GERA New Delhi, March 14 ECONOMY ILLUSTRATION: SHYAM KUMAR PRASAD IN THE NEWS Five IPOs hit mkts this week, seek to raise `3,764 cr Labour-intensive sectors still remain sluggish FE BUREAU New Delhi, March 14 THE CONTRACTION OF1.6% in the factory output for January comes way below expectations,suggesting there are several pockets of frailty within thebroaderrecovery.Theslowdown was broad-based — both capital and consumer goods fared poorly. The bad news is thatlabour-intensivesectorsof the economyremain sluggish. TheNomuraIndiaBusiness Resumption Index (NIBRI) fell to 95.2 for the week ending March 7 from 98.1 in the previous week with the gap from thepre-pandemicnormalslipping to 4.8 pp from only0.7 pp a fortnight earlier. While the services sector is pickingup—theFebruarycomposite PMI was up at 57.3 from 55.8 in January — the loss of momentumelsewhereisaconcernatatimewhenthereisfresh surge of infections especially in keystates like Maharashtra. A new round of lockdowns could slow the revival. Continued on Page 2 THE RECOVERY IS ON... Services sector picking up (PMI services) 80 53.3 60 40 20 0 Dec 2019 55.3 Feb 2021 Source: IHS Markit GST collections rising (` crore) 1,60,000 1,10,828 1,20,000 80,000 40,000 0 Jan 2020 BANIKINKAR PATTANAYAK New Delhi, March 14 Order book-to-sales ratio rises 6 5 4 3 2 1 0 Q4 Q2 Q4 Q2 Q4 Q2 FY19 FY21 FY19 FY21 FY19 FY21 Roads Diversified Aggregate Source: Crisil Exports grow 1,13,143 Feb 2021 Source: GST Council (% chg, y-o-y) 20 1.8 0 -20 -40 -60 -80 Dec 2019 6.2 -60.3 Apr ‘20 Jan 2021 ...BUT SOME LOSS IN MOMENTUM E-way bills show a flattening (Number in crore) 8 6.2 6 5.5 4 0 3.1 -30 Dec 2019 Feb 2021 Labour participation falls (in %) 43 41 39 37 35 (% chg, y-o-y) 15 0.1 -15 2 0 Core sector weak May 12, 2019 Jan 31, 2021 Source: Nomura Retail auto sales down (% chg, y-o-y) 30 0 -30 -60 -90 PVs 2-W May 2020 -37.9 Dec 2019 Apr ‘20 Loan growth still weak (% chg, y-o-y) 7.5 7.0 6.5 6.29 6.0 5.5 5.0 Feb 14, 2020 Source: RBI NIBRI stumbles 10.6 -16.1 Source: Fada -45 Feb 2021 Jan 2021 6.61 Feb 12, 2021 Nomura India Business Resumption Index 100 90 80 70 60 50 40 Aug 30, 2020 Feb 28, 2021 AS THE GOVERNMENT prepares to notify refund rates under the Remission of Duties andTaxesonExportedProducts (RoDTEP) scheme, exporters feartheratesmayturnouttobe lower than recommended by a technical committee. Inadequate remission of taxeswould result in residual embedded taxesinexportproductsandhit the Indian industry’s competitiveness in world markets at a time shipments arewitnessing a nascent recovery,theywarn. The government has budgeted only `13,000 crore for the RoDTEP scheme for FY22, which is way below the scheme’s initial estimated annual cost of `50,000 crore. Also, it’s only a third of the `39,097crorethegovernment approved for exporters in FY20 under the Merchandise Exports from India Scheme (MEIS) for manysectors. The GK Pillai committee, tasked with recommending the RoDTEP rates, will submit its report to the government onMonday.Theschemeissupposed to reimburse various embedded levies (not subsumed by GST) paid on inputs consumed in exports. Pillai told FE:“RoDTEP is an entirely new scheme meant for remissionoftaxesembeddedin exports.It cannot be compared ZERO MDR P2M volumes more than debit cards SHRITAMA BOSE Mumbai, March 14 THAT THE VALUE of peer-tomerchant (P2M) transactions through Unified Payments Interface (UPI) has exceeded that of transactions made using credit cards or debit cards at points of sale (PoS) is much the result of the zero merchant discount rate(MDR) regime. Innovations in merchant alert systems have also done a lot to boost merchant transactions over the channel. UPI had been known more forrunninguphighvolumesin peer-to-peer (P2P) payments withtheP2Mpieceaccounting for 20-30%. That seems to have changed with social distancing norms and lockdowns across the country compelling a chunk of peopleto makepayments digitally. As Vivek Belgavi, partner & leader-fintech,PwCIndia,said, the upswing in UPI P2M has come from the digitisation of offlinemerchantsbypayments and even non-payments players.“In parallel, there are companies trying to provide supply chain solutions.Between those two trends, we could expect more growth going forward,” Belgavi added. The zero MDR regime has seensmallmerchantspreferUPI July 2020 (` crore) 39,393 45,568 49,840 Aug 41,874 50,319 54,277 Sept 46,626 51,140 54,847 Oct 55,423 64,651 68,591 Nov 61,046 62,350 67,357 68,170 63,601 64,676 Dec 2020 UPI P2M transactions Credit cards at PoS Debit cards at PoS Source: NPCI, RBI over other modes of digital transactions.Besides,companies like Paytm and PhonePe have come up with solutions like the Soundbox and voice alerts, respectively,whichgivethemerchant an instant audio notificationforasuccessfultransaction. AsMandarAgashe,founder,MD &vice-chairman,SarvatraTechnologies, says, obviously these offergreatercomfortthanother paymentmodes. Continued on Page 2 ● INTERVIEW: PAWAN MUNJAL, chairman & CEO, Hero MotoCorp ‘We are confident of capitalising on the upswing’ Having clocked its highest-ever volumes in Q3FY21, Hero MotoCorphasutilisedtheCovid19 crisis to prepare itself for future challenges. Chairman & CEO Pawan Munjal tells Rishi Ranjan Kala the company is ready to make the most of the recovery. Edited excerpts from the interview: FE After your swift recovery, especially in motorcycles, do you expect the momentum to be maintained? We were among the very first companiestoanticipatethecrisisduetoCovid-19andhadcon- stituted a business continuity taskforce under my direct supervision. This state of preparednessenabledustobounce backwhenthelockdownended, with the company leading the way in resuming operations.In October2020,weregisteredour highest-ever monthly sales of over 800,000 two-wheeler units.Ourrevenue in the third quarter (October-December) was the highest-ever for any quarter.Theagility,resilience andleadershipdemonstrated by our teams convince me that we are on the right track. We havecomealongwayinthepast year, making significant progressinouroperations,work culture and organisational structure.This means we are in great shape to tackle anyfuture challenges. Withtheglobalagenciesand think-tanks projecting a strong recoveryinFY22,wearepositive abouttheprospectsforpersonal mobility and consumer demand.And our exciting products and strong brand equity across domestic and global markets make us confident of capitalising on this economicupswing. Continued on Page 2 New Delhi SEEKING RELIEF Small exporters fear refund rates under RoDTEP would be lower than MEIS incentives Export bodies say final RoDTEP rates shouldn’t be lower than the ones suggested by GK Pillai panel, to fit into budgetary outlay Govt has earmarked only `13,000 cr for RoDTEP for FY22, way below initial forecast of `50,000 cr/year RoDTEP can’t be compared with MEIS, which was an incentive scheme... Budget won't be a constraint for the new scheme as much of the amounts (to be reimbursed to exporters) could be in the form of drawbacks (which will get reflected in the net tax income of the govt) —GK PILLAI, FORMER COMMERCE SECRETARY & HEAD OF COMMITTEE WHICH DETERMINES RoDTEP RATES with the MEIS, which was an incentive scheme, where the benefits could have been extended in an arbitrarymanner.” Continued on Page 2
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