OPINION, P6 ECONOMY, P2 SONALVARMA & AURODEEP NANDI Second wave of Covid-19 unlikely to dampen recovery INTERNATIONAL, P4 EDITORIAL STAND-UP INDIA SECURITY BREACH Need to work on Covid-19 vaccine for children; else, lost school-years will impoverish millions in their later years Finmin: Banks sanction `25,586 cr to 1.14 lakh accounts in 5 years Facebook data on over 500 m accounts found online NEW DELHI, MONDAY, APRIL 5, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 29, 12 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 Reliance-BP seeks buyers for gas from KG-D6 RELIANCE INDUSTRIES and its partner BP Plc of UK have sought bids for sale of 5.5 mmscmd of additional natural gas to be available for sale from their eastern offshore KG-D6 block, reports PTI. The e-auction is slated for April 23 and the supply will start from late April or early May. PRESS TRUST OF INDIA New Delhi, April 4 PRIME MINISTER Narendra Modi on Sunday reviewed the Covid-19situationandvaccination exercise in the country amid an “alarming rate of growth” in infections and deaths, with 10 states contributing to over91% of them. Modi directed that central teams consisting of public health specialists be sent to Maharashtra, Punjab and Chhattisgarh,where the situationwasofseriousconcern,and said the five-fold strategy of testing, tracing, treatment, Covid-appropriate behaviour and vaccination, if implemented with utmost seriousness and commitment,would be effective in curbing the pandemic’s spread,according to an official statement.The meeting came on a day India recorded 93,249 new infections, the highestsingle-dayrisesofarthis year that took the total cases to 1,24,85,509, according to Union health ministrydata. Thereasonsforthesharprise in cases could be mainly attrib- FE SPECIALS Maha: Weekend lockdown as daily cases cross 57k THEMAHARASHTRAgovernment on Sunday announcedaweekendlockdown in the state from 8 pm on Friday to 7 am on Monday. Besides, strict restrictions will be in force from Monday 8 pm. Private offices, except in the banking and insurance sectors, will remain shut from Monday night,a state ministersaid. On Sunday, Maharashtra reported the highest single-dayriseof57,074cases and 222 deaths. uted to the severe decline in compliance of Covid-appropriate behaviour, especially in the useofmasksandsocialdistancing,pandemic fatigue and lack of effective implementation of containment measures at the field level, said the statement released after the PM’s review meetingwith seniorofficials. Continued on Page 2 ● RAJASTHAN BLOCK Govt to slap recovery notice on Cairn PRESS TRUST OF INDIA New Delhi, April 4 ■ BRANDWAGON, P10 E-scooter segment in top gear Brands launch affordable, more efficient electric two-wheelers to woo daily commuters ■ eFE, P8 Pandemic boosts demand for PCs COVID-19 accelerated digital transformation across companies, says AMD India's Vinay Sinha ■ PERSONAL FINANCE, P9 Keeping accredited investors safe An accredited investor will be able to navigate market related risks in direct plans of mutual funds ■ INFRASTRUCTURE, P11 Meeting RE target an uphill task Covid-19 has hit capacity addition momentum further, with as much as 83 GW still to be installed by December next year ■ SCIENCE & TECH, P12 Virus origin hunters fight criticism The criticism of their report, even from within the WHO, means politics over the pandemic is back front and centre QuickPicks SC order on interest waiver: PSBs may have to take `2,000-cr hit PUBLIC SECTOR banks (PSBs) may have to bear a burden of `1,800-2,000 crore arising due to a recent Supreme Court judgment on the waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020, sources told PTI. It covers loans above `2 crore as loans below this got blanket interest on interest waiver in November. PAGE 5 Discoms’ dues to power gencos rise nearly 17% in February TOTAL DUES owed by electricity distribution companies to power producers rose nearly 17% to `1,02,684 crore in February this year, reflecting persistent stress in the sector, reports PTI. Discoms owed a total of `87,888 crore to power generation firms in February 2020, according to portal PRAAPTI. PAGE 3 THE PETROLEUM MINISTRY will seek tens of millions of dollars from Vedanta’s Cairn Oil & Gas after the Delhi High Court held that the firm was liable to pay higher profit share to the government in lieu of its Rajasthan oil and gas block licence being extended beyond initial term, a top official said. In the interim, the firm’s Barmer basin block licence, whose initial 25-year term ended on May 15, 2020, has been given an eighth interim extension,the official, who wished not to be identified,said. “Now that the Delhi High Court has upheld the government policy, we will issue recovery notices seeking higher profit petroleum since May 15,2020,”he said. “The exact amount is being calculated but it will be in tens of millions of dollars,” the official added. When contacted, a company spokesperson said, “We are in the process of reviewing the court’s order, will assess any next course of action”after that. Continued on Page 2 CAMPAIGN FRENZY (Clockwise from top left) FM Nirmala Sitharaman campaigns in Thiruvalla, Kerala; West Bengal CM Mamata Banerjee in Baruipur; security personnel queue up to collect duty passes in Guwahati; DMK chief MK Stalin during a roadshow in Chennai. Campaigning ended in Kerala, TN, Assam and Puducherry on Sunday TOUGH FY21 States to buck trend, report capex decline Capital spending by 16 states reviewed was down 16% on year in April-February PRASANTA SAHU New Delhi, April 4 CAPITAL EXPENDITURE BY state governments will likely shrink in FY21, bucking the trend of robust growth in fixed assetcreationreportedbymost oftheminrecentyears.According to an FE review of budgetary spending by 16 major states, their capex was down 16% onyearinApril-February, compared with a negative growth of 5% in FY20. According to RBI’s customary study of state finances,the totalcapexroll-outbyallstates stood at `4.97 lakh crore in States' ﬁnances* (April-February growth, %, y-o-y) 60 FY20 48 FY21 40 20 9 0 2 7 14 0.1 2 -5 -20 -13 -16 Borrowings MUTUAL FUNDS invested `2,476 crore in equities in March, making it the first such infusion in 10 months, as consolidation in the market provided investment opportunities to fund managers, reprots PTI. Prior to the inflows, MFs had been withdrawing money from equities since June 2020, Sebi data showed. FE BUREAU New Delhi, April 4 PM reviews situation as India records biggest daily spike of 93,249, asks states to take stringent steps Total expenditure Tax revenues Mutual funds turn net buyers, invest `2,476 cr in March Pre-pack framework, MSME scheme soon Central teams to be rushed to 3 states Revenue expenditure POLICE RECOVERED bulletriddled bodies of 20 jawans in the jungles of Chattisgarh Sunday, raising to 22 the number of security personnel killed in a fierce gunbattle with Naxals the previous day — the biggest massacre in more than a year that also left 31 injured, reports PTI. INSOLVENCY COVID-19 Capex IN THE NEWS Chhattisgarh: 22 security personnel die in Maoist attack *Of 16 major states reviewed by FE FY20, down 20% from the budget estimate of `6.22 lakh crore the previous year, but it was still up 2% on year. The16statesreviewedbyFE reported combined capital expenditureof`2.16lakhcrore inApril-FebruaryofFY21,com- pared with `2.56 lakh crore in theyear-agoperiod.Thismeans that against their combined annualcapextargetof`4.7lakh crore for the year, these states achieved only a dismal 46% in the first 11 months of FY21. Clearly, acute revenue constraintsandCovid-relatedwelfare spends have forced these states to cut the capex.The 16 states reviewed are Uttar Pradesh,West Bengal,Madhya Pradesh, Gujarat, Andhra Pradesh,Karnataka,Rajasthan, Odisha, Telangana, Kerala, Maharashtra, Punjab, Chhattisgarh, Haryana, Jharkhand and Uttarakhand. The effect of the sharp drop in state capex on the economy will be more evident in the context that FY21 capex target forall statesaspertheirBudget Estimates (BEs) was `6.5 lakh crore,up 30% on year. Continued on Page 2 THE GOVERNMENT AND the regulator are in the process of finalising a so-called pre-pack insolvencyscheme,whileaspecial framework formicro,small and medium enterprises (MSMEs) is almost ready, sources told FE. As authorities brace for a potential rise in bad loan cases withthe lifting ofa suspension of insolvency proceedings against Covid-related defaults on March 25, the schemes are being tailored to incentivise early identification of stress, facilitate fast resolution and reduce costs and litigation. “Work is on. Stakeholders’ comments on pre-pack insolvency scheme have been ob- NEWAVENUE Pre-pack scheme to offer greater leeway to honest promoters, who will submit the first resolution plan The plan of the eligible promoter will then face a Swiss challenge Under special framework for MSMEs, only the debtors can trigger insolvency process tained.Both the schemes could be notified soon,” a source said. TheInsolvencyandBankruptcy Code(IBC)needstobeamended forthe pre-pack scheme. Continued on Page 2 CROP SHOP Mandi prices subdued as rabi arrivals peak PRABHUDATTA MISHRA New Delhi, April 4 MANDI PRICES OF most rabi crops ruled below their minimum support prices (MSPs) during the last month,even as more than half of the winter crop has been harvested (see chart). While wheat prices may firm up once the official procurement begins in all the producing states, the govern- ment will have to implement a robust procurement system for other crops to support the prices fetched by farmers. Farm-gate prices normally tend to come down when arrivals gain momentum. Since the new farm laws are stayed by the Supreme Court, purchases by private players have been hit too. Continued on Page 2 Mandi prices during March 2021 (% change against MSP) All India State (Highest arrival) Wheat -7.6 -8.6 (MP) 10 (Rajasthan) 8.8 Mustard -8 -8.5 (MP) Chana Masur (MP) 0.6 1.6 (Rajasthan) -14.9 Barley -13.4 Rabi crops harvesting % Area harvested* Wheat 31.3 Mustard 94.9 Chana 82.5 Masur 95.3 43.5 Barley *As of March 31 Source: Agmarknet/Agriculture ministry COVID RESURGENCE ● SAVERS LOSERS Real returns from FDs Retailers seek rental concessions remain in the red as businesses get affected again FE BUREAU Mumbai, April 4 THE GOVERNMENT MAY have reversed its decision to lower rates of small savings schemes, but savers who rely on bank depositscontinuetolose.Februarywasthe10thstraightmonth of negative real returns from fixeddeposits(FDs).Whilesome lenders like State Bank of India (SBI)andHousingDevelopment Finance Corp (HDFC) have raised deposit rates in recent months,next week’s monetary policy review could determine the future course of rates. The return on a one-year retail term depositwith SBI adjusted for tax and inflation stood at -1.53% in August.A oneyear deposit with the country’s Real returns ASMITA DEY New Delhi, April 4 (in %) 0 -0.7 -1.36 -1.4 -1.53 -2.1 -2.8 -3.5 -4.2 -4.9 -4.18 May 2020 Oct Feb 2021 Source: SBI, NSO largestlenderearnedinterestat therateof5%,whichworksout to a 3.5% effective yield, assuming a tax rate of 30%. Continued on Page 2 ■ Second AS LOCAL AUTHORITIES in many parts of the country are imposing fresh restrictions to tackle a renewed surge in coronavirus infections, upsetting business recovery,retailers are back to the negotiating table with mall-owners and highstreet landlords, seeking an extension of concession on rental payments. Malls, many of which had supported brands with full rental waivers during the lockdown period last year and reasonable discounts on rents after unlock are, however, somewhat reluctant to offer furtherrelaxations.“We do not Covid wave has derailed sales recovery ■ Biba has seen an over 60% decline in business in Maharashtra alone ■ Retailers say concessions on rental payments needed at least for the next three months ■ Some malls are reluctant to extend further support, say they booked heavy losses last FY ■ Recovery will need unconventional solutions and government support, says RAI have any capacity left in us to offeranywaiverfromApril.Earlier, lockdown was very tough but our payouts were fixed. It created a big dent in our pockets,”says GurvineetSingh,CEO atMumbai-basedVivianaMall. The company that operates in Thanewasallowedresumption of services onlyin September. Singh’s reasoning is that business which was merely half of pre-Covid levels in the first month after opening touched nearly 80% of preCovid levels in February. The increase in business, the CEO says, was not driven by more footfalls but due to a rise in average spend per person. Continued on Page 2 DEFYING THE PANDEMIC Buoyant exports of ‘core’ products signal trade edge BANIKINKAR PATTANAYAK New Delhi, April 4 INDIA’SEXPORTSOF‘core’products,orgoodsexcludingpetroleumandgems&jewellery,have accelerated at a quicker pace than that of overall merchandiseexportsmonthaftermonth since May 2019, defying even Covid-induced disruptions. The ‘core’ exports, which reflect the economy’s competitivenessinexternaltrade,grew 60.7%,year-on-year,in March to$27.3billion,comparedwith a record 58.2% jump in overall goods exports to $34 billion, accordingtoapreliminaryestimate of the commerce ministry. Of course, the record surge in March was greatly aided by a base effect (exports had crashed in March 2020 due to the pandemic and the beginningofalockdown).Nevertheless, the pace of growth was still encouraging. While Covid-19 has hit exports of all products, what comes as a relief is the sustenance of the greater momen- (% change, y-o-y) 75 50 25 60.7 58.2 Core exports* 13.8 0 -25 -50 -75 11.6 Total goods exports March 2019 *Goods, excluding petroleum and gems & jewellery; Mar 2021 data based on preliminary estimate of the commerce ministry Source: DGCIS; FE analysis March 2021 tum in core exports than in overall outboundshipments. In February 2020, when Covid-19wasyettotakerootsin India,coreexportshadgrownat 5.7%,while total goods exports had inched up by only 3.3%, showed the data available with theDirectorateGeneralofCommercial Intelligence and Statistics. However, as oil prices pick upandasgoldimportsspike,the value of petroleum and gem & jewellery exports may rise and threaten to reverse this trend, say analysts.Already,gems and New Delhi jewellery exports jumped by about76%inMarchto$1.5billion. Gold imports,which were hitbythepandemicandaspurt inpricesearlierlastfiscal,surged by584%toalmost$7.2billion. Gems and jewellery exports collapsed by almost 34% till February last fiscal, as a panIndia lockdown and migration of workers from key cities like Surat disrupted operations of most jewellers,especiallyin initial months. Continued on Page 2
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