OPINION, P6 RENU KOHLI NATION, P11 Govt must urgently reform subsidies to create fiscal space INTERNATIONAL, P8 EDITORIAL PANDEMIC BLUES SPACE EXPLORATION Lenders must not be forced to consider Wadhawan proposal, this would create a moral hazard Uday Kotak pitches for fiscal package to deal with Covid impact Musk’s Mars ambition could be the riskiest human quest ever NEW DELHI, THURSDAY, MAY 27, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 74, 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 SENSEX: 51,017.52 ▲ 379.99 NIFTY: 15,301.45 ▲ 93 NIKKEI 225: 28,642.19 ▲ 88.21 HANG SENG: 29,166.01 ▲ 255.15 `/$: 72.78 ▲ 0.19 `/€: 89.20 ▼ 0.11 BRENT: $68.26 ▼ $0.39 GOLD: `49,051 ▲ `569 IN THE NEWS Social media firms told to submit IT rules’ compliance THE MINISTRY OF electronics and IT has written to all significant social media firms like Facebook, WhatsApp, Twitter, Instagram, etc, to submit compliance of the new intermediary rules, as soon as possible, preferably by end ofWednesday itself, reports Kiran Rathee in New Delhi. NBCC says ready to submit new offer for Jaypee NBCC ON WEDNESDAY in a letter to Anuj Jain, the interim resolution professional of Jaypee Infratech, said if the CoC decides to call for revised bids later this week, the company will submit the same, after taking into account all the observations made by him, reports Rishi Ranjan Kala in New Delhi. Punjab, Haryana farmers mark 6 months of protests FARMERS IN PUNJAB and Haryana put up black flags atop their houses and held protests on Wednesday, joining a 'black day' call given by farmer unions to mark six months of agitation at Delhi borders against the farm laws, reports PTI. Special Features Applying GIS to fight the pandemic Esri India is using dashboards, maps and geographic information systems (GIS) to help government agencies monitor the Covid-19 situation and take decisions more efficiently ■ eFE, P7 Fast streaming, less clutter, more control Available for `3,999, the latest Amazon Fire TV Stick impresses with its strong app offering, new user interface and good overall performance. Perfect to keep boredom at bay ■ Gadgets, P7 MESSAGE TRACING ● MILESTONE WhatsApp challenges new IT rules in Delhi High Court Against the clause which requires it to provide originator of ‘mischievous messages’ FE BUREAU New Delhi, May 26 WHATSAPP HAS CHALLENGED a clause of the new intermediary guidelines notified by the government under the Information Technology Act,whichrequiresittoprovide the first originator of what is deemed as mischievous messages by the government. The newguidelines came into force fromWednesday.Thecompany, which filed the petition in the Delhi High Court on Tuesday evening,hasstatedthatthenew requirement under Rule 4(2) is Tracing first originator of messages is against privacy principles, infringes fundamental rights and is unconstitutional So,will be forced to build the ability to identify the first originator for every message sent in India on its platform End-to-end encryption designed to help ensure that nobody other than the person you are talking to can say that you sent a particular message “unconstitutional”,“illegal”,and “ultravires the ITAct”. WhatsApphaslongresisted theinclusionoftheclausewith some support from civil society activists, on the pretext that it forces it “to break endto-end encryption on its messaging service, as well as the Pension corpus under PFRDA swells over `6 lakh crore PRESS TRUST OF INDIA New Delhi, May 26 No way to predict which message will be the subject of such a tracing order It may force private companies to collect and store who said what and who shared what for billions of messages sent each day Traceability would reveal who sent what to whom This could lead to platforms to collect more data than they need on the pretext that law enforcement agencies may need it privacy principles underlying it,and infringes upon the fundamental rights to privacyand free speech of the hundreds of millions of citizens using WhatsApp to communicate privately and securely”. Referring to Rule 4(2), WhatsApp has stated it “infringes upon the fundamental right to privacy without satisfying the three-part test set forth by the Supreme Court: (i) legality; (ii) necessity; and (iii) proportionality”,in the KS Puttaswamyvs Union of India,(2017) ruling. Continued on Page 2 Govt says new rules not against privacy, will be used in exceptional cases THE MINISTRY OF electronics and information technology (MeitY) on Wednesday strongly rebutted WhatsApp’s contention that Rule 4(2) of the new intermediaryguidelines is“unconstitutional”,“illegal”,and“ultravires the ITAct”,reports fe Bureau in NewDelhi. The central government, the ministry said categorically,has no intention to violate the right to privacy of users in instances when WhatsApp would be required to disclose the origin of a particular message. The ministry said the requirement for traceability of messages would arise in extreme cases like prevention, investigation or punishment of very serious offences related to the sovereignty and integrityof the country,and in relationwith rape,sexuallyexplicit material or child sexual abuse. ■ Page 2 THE PENSION FUND RegulatoryandDevelopmentAuthority(PFRDA)onWednesdaysaid the asset under management (AUM) generated by pension schemes has crossed the `6lakh-crore milestone. The AUM crossed the milestone of `6 lakh crore under the National Pension System (NPS) and Atal Pension Yojana (APY) after 13 years since the PFRDA came into being, an official statement said. The AUM growth of last `1 lakhcrorehasbeenachievedin just 7 months, it added. It is to be noted that the total pension fund under the management had swelled to `5 lakh crore in October 2020. PFRDA has witnessed remarkable growth in NPS subscribers over the years, with 74.10 lakh government employees in the scheme and 28.37 lakh individuals joining fromthenon-governmentsector,it said. It added that the total subscriber base of PFRDA has increased to 4.28 crore. As of May 21, 2021, the AUM has grown to `603,667.02 crore. Continued on Page 2 TAX REFUND Outlay for key export scheme to be raised Total allocation may finally jump to about `25,000-30,000 cr for 2021-22 BANIKINKAR PATTANAYAK New Delhi, May 26 THE GOVERNMENT WILL likely raise the allocation for its flagship export tax refund scheme from the budgetted `13,000 crore for FY22, as the currentoutlayisexpectedtofall way short of the amount required to implement recommendations of the GK Pillai panel,anofficialsourcetoldFE. While the revenue department will take a final call on the hike, sources said total allocation for FY22mayfinallyjumptoabout `25,000-30,000 crore. The Pillai committee was tasked with the job of recommending rates for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.It is supposed to reimbursevarious embedded levies (notsubsumedbytheGST)paid oninputsconsumedinexports. The suggestions are being vetted by both the revenue and commerce departments. The RoDTEP rates are expected to be announced in two weeks. However, the RoDTEP outlay is expected to be much COVID TRACKER AS DELHI GRAPPLES with a shortage of coronavirus vaccines, chief minister Arvind Kejriwal on Wednesday said the makers of Sputnik V will supply anti-Covid jabs to the city but the quantity is yet to be decided. He also said there were around 620 cases of black fungus or mucormycosis in Delhi, butAmphotericin-B injections used in its treatment are in short supply. “Talks with the makers of SputnikVare on.Theywill give usvaccines,but the quantityis yet to be decided. Our officials and the representatives of the manufacturers met on Tuesday,too,”the CM told reporters at the launch of Delhi’s first drive-through vaccination centreatVegasMallinDwarka. The Centre has asked states to procure vaccines from the BOOSTER DOSE SputnikVmakers say will supply jabs to the city but quantity is yet to be decided ■ Centre has asked states to procure vaccines from the international market ■ But states have not been able to purchase even 'one additional vaccine' so far ■ CM also says anti-Covid shots by both Moderna and Pfizer suitable for children He adds Centre should procure thesevaccines in a large number tovaccinate kids international market, but no state government has been able to purchase even “one additional vaccine” so far, the chief minister said. Continued on Page 2 SEEKING A FAST-TRACK approval for its vaccine, US major Pfizer has told Indian authoritiesthatitsjabhasshown“high effectiveness" against the SARS-CoV-2 variant prevalent inIndiaandonpeopleofIndian ethnicityornationality,whileit issuitableforeveryoneaged12 yearsoraboveandcanbestored for a month at 2-8 degrees, sources said onWednesday. It has also stated that the Pfizer vaccine has undergone significant development over the last six months which includes improvement in storage conditions at 208 degrees for over one month (31 days) at the site ofvaccination. — PTI India crosses 20-crore mark in vaccines administered ROYAL ENFIELD HAS decided to shut its three plants in Tamil Nadu for three days, between May 27-29, in order to safeguard employees amid rising cases of Covid, reports PTI. The company has taken the stand due to the Covid situation in Chennai and the subsequent lockdown. INDIA CROSSED THE 20-crore mark in cumulative vaccine doses administered on Wednesday,reportsfeBureauinPune.Ithas taken 130 days to reach this milestone since start of the vaccination drive on January 16. AftertheUS,whichtook124days,Indiaisthe second countryto reach this mark. ■ Page 2 RBI not in favour of Wadhawan offer THE RESERVE Bank of India (RBI) was never in favour of considering Kapil Wadhawan’s settlement offer for Dewan Housing Finance Corporation (DHFL), reports Ankur Mishra in Mumbai. The stance of the regulator was made clear during RBI's submission before the Mumbai bench of the National Company Law Tribunal (NCLT) on January 15, 2021. PAGE 9 Koo raises $30 m in Series B funding HOMEGROWN MICROBLOGGING platform Koo has raised $30 million in series B funding, led by Tiger Global with existing investors Accel Partners, Kalaari Capital, Blume Ventures and Dream Incubator, reports fe Bureau in New Delhi. IIFL and Mirae Assets are other new investors who have come on board the cap table with this round. PAGE 4 for FY21 inadequate to adopt Pillai panel suggestions ■ Sources say FY21 outlay may be raised to about `25,000-30,000 cr Revenue dept to take a final call on the hike RoDTEP rates to be announced in twoweeks lower than that for the Merchandise Exports from India Scheme (MEIS), which was replaced by this scheme. The government has approved `39,097 crore for MEIS for FY20. Of course, both the schemes are not strictly comparable. While RoDTEP is an export levy refund scheme, MEIS was typically an incentive programme. Continued on Page 2 Higher rates likely on pan masala and gutkha to curb tax evasion Seeking fast-track vaccine approval, Pfizer says its jab highly effective on variant in India Royal Enfield to shut its plants in Tamil Nadu for three days QuickPicks `13,000 cr ● DEMERIT GOODS Sputnik V makers to supply vaccine to Delhi: Kejriwal PRESS TRUST OF INDIA New Delhi, May 26 Bigger the better ■ Budgetted RoDTEPoutlay of FE BUREAU New Delhi, May 26 WASHED AWAY A woman stands next to her stall damaged by heavy winds at a shore ahead of Cyclone Yaas in Bichitrapur in Balasore district, Odisha, on Wednesday Market cap FE BUREAU Nifty50 hits $3-trillion milestone Even as the Nifty50 closed 13 points away from its February peak on Wednesday, its market capitalisation hit a milestone of $3 trillion. Interestingly, the latest $1-trillion market cap has been added in just four years against a decade taken to add a similar value in 2017 3.5 NSE Mcap ($ trillion) 3.0 2.5 Major milestones NSE Mcap ($ trillion) 3.0 3.0 2.01 2.17 2.0 1.5 1.0 1.02 Mar 23, ‘20 July 5, July 13, May 26, 2007 2017 2021 1.32 Jan 1, 2020 May 26, 2021 Source: Bloomberg DEMERIT GOODS ARE set to attract even higher rates under thegoodsandservicestax(GST). A group of ministers (GoM),led by Odisha finance minister Niranjan Pujari, will examine thefeasibilityoflevyingGSTon products such as pan masala and gutkha on the basis of the installedmanufacturingcapacity,ratherthan production. Themoveisexpectedtohelp check massive tax evasion in these sectors. Currently, assorted tobacco items, pan masala and aerated water are amongtheproductsthatattract thehighestGSTrateof28%and also ‘compensation cess’. The rateofcessontobaccoproducts is 4,170 per 1,000 sticks or 290%advalorem,whilethaton panmasalais135%advalorem. “(The GoM) to examine the possibility to levy of GST based on the capacity of manufacturing unit and special composition schemes in certain evasion prone sectors like pan masala andgutkha withreferencetothe current legal provisions,” according to an office memorandum issued by the Union finance ministry. Continued on Page 2 STREAMING WAR Amazon buying MGM will ‘reimagine’ storied movie, TV brands JEFFREY DASTIN May 26 AMAZON.COM SAID ON Wednesday it is buying MGM, the fabled US movie studio home to the James Bond franchise, for $8.45 billion, giving ita huge libraryof films andTV showsandrampingupcompetitionwithstreamingrivalsled by Netflix and Disney+. Privately-held MGM, or Metro Goldwyn Mayer, was founded in 1924, owns the Epix cable channel and makes popular TV shows, including Fargo,Vikings and Shark Tank. The deal is designed to help Amazon supercharge its Amazon Prime Video service by keeping customers engaged and paying an annual subscription that also guarantees rapid delivery of purchases from its online store. “The real financial value behind this deal is the treasure trove of (intellectual property) in the deep catalog that we plan to reimagine and develop togetherwith MGM’s talented ILLUSTRATION: ROHNIT PHORE team.It’sveryexcitingandprovides so many opportunities for high-quality storytelling,” said Mike Hopkins,senior vice president of Prime Video and Amazon Studios. Amazon’s Prime Video faces a long list of competitors including Netflix Inc,WaltDisney’s Disney+ , HBO Max and Apple Inc’s Apple TV+. The companies are increasing spending and expanding in international markets,aiming to capture the pandemicled shift to binge-watching New Delhi shows online. Amazon has also made big betscourtingfansoflivesports and has picked up lucrative licenses to stream games, including a long-term deal with the National Football League that was estimated to cost about $1 billion peryear. The proliferating streaming services are also scrambling for brands that they can expand and libraries of older shows and movies. Continued on Page 2
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.