OPINION, P6 COMPANIES, P4 M GOVINDA RAO A meaningful economic recovery needs a strong fiscal response COVID BLUES REGULATORY NOD Changing GST rates no panacea for lowering cost of Covid essentials, boosting supply would help SAUGATA BHATTACHARYA INTERNATIONAL, P8 Ashok Leyland plants to operate only for 5 to 10 days in June Moderna seeks full FDA approval for its vaccine NEW DELHI, WEDNESDAY, JUNE 2, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 79, 14 PAGES, `8.00 (PATNA `8.00, RAIPUR `8.00) 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: 51,934.88 ▼ 2.56 NIFTY: 15,574.85 ▼ 7.95 NIKKEI 225: 28,814.34 ▼ 45.74 HANG SENG: 29,468 ▲ 316.20 `/$: 72.90 ▼ 0.28 `/€: 89.18 ▼ 0.68 BRENT: $71.08 ▲ $1.76 GOLD: `49,173 ▲ `240 Continued on Page 2 PMI FE BUREAU Manufacturing growth hits 10-month low in May Manufacturing rose at its slowest pace in 10 months in May, as the second Covid wave hurt the flow of new orders, weighed down raw material purchases and accelerated job shedding. The Nikkei Manufacturing PMI dropped to 50.8 in May from 55.5 in April. 70 Manufacturing PMI 50 30.8 54 40 April ‘21 30 Services PMI 20 10 0 12.6 May 2020 Source: IHS Markit ● OIL ON BOIL Investing in NFO? Four key factors you need to know IPO May 2021 Note: Reading below 50 suggests contraction and above it indicates expansion Special Feature NFO 50.8 60 Check the new mutual fund scheme’s investment thesis, asset allocation strategy, stock selection rationale and the track record of the fund house and the fund manager before investing in it ■ Personal Finance, P7 QuickPicks HC quashes AI move terminating pilots, orders reinstatement COMING TO the aid of all Air India pilots, permanent as well as on contract, whose services were terminated last year, the Delhi High Court on Tuesday quashed the national carrier's decision and directed their reinstatement, reports PTI. The direction was issued by justice Jyoti Singh who also ordered that back wages would have to be paid to the reinstated pilots. The high court said that the back wages, including allowances, have to be paid at par with what in-service pilots were receiving and in accordance with the government rules. PAGE 4 Unemployment rate soars to 11.9% in May, 10 m jobs lost THE SECOND wave has led to a sudden spike in India’s unemployment rate — it rose to 11.9% in May from 7.97% in the previous month, reports Surya Sarathi Ray in New Delhi. The rate had last reached double digits in June last year, when it was 10.18%. According to the CMIE data, barring April, May and June last year, the monthly unemployment had never breached the double-digit mark at least since January, 2016. It reached its peak of 23.52% in April last year amidst country-wide lockdown, but started falling from the next month onwards. In May last year, country's unemployment rate was 21.73%. PAGE 2 Brent at $71.33, hits highest since March OILPRICES ROSE onTuesday, with Brent hitting above $71 and trading at its highest since March, on expectations for growing fuel demand during the summer driving season in the US as OPEC+ agreed to boost output,reports Reuters. Prices were also boosted by Chinese data showing that the country’s factoryactivitygrew at its fastest this year in May. Brent crude futures forAugust gained $2.01 to $71.33 a barrel by 1401 GMT, its highest intra-day price since March 8. US West Texas Intermediate crude for Julywas at $68.85. Detailed report on Page 9 Sales skid May ‘21 For perspective, the country's largest passenger car manufacturer,which posted a sales of 33,771 vehicles in May in the domestic market had sold just 13,865 units a year ago. In normal times, Maruti sells around 1,30,0001,50,000 vehicles. In the rarest of rare case does its monthly volumes is below 1,00,000 units. Manufacturers said that the road ahead would purely depend on the Covid scenario and the gradual opening up of showrooms. Continued on Page 11 Chg (%) Hero MotoCorp M&M 39 Tata Motors 94 12,778 2,738 12,138 707 « 75 Bajaj Auto 2,35,824 79 60,830 Toyota Ashok Motor Leyland 74 « Maruti Hyundai Suzuki Motor 25 1,59,561 « 41 40,155 24,552 6,37,319 « 72 May ‘19 « (Units) 15,512 Al Jomaih and India’s Jakson Power —,stating that since no action was taken by the firms after they “consented for the extension of the bid period validity till March 31, 2021”, the bids have become “timebarred and infructuous”. LOCKDOWN IN SEVERAL states and districts, which led to shutdown of showrooms andannualmaintenanceshutdown of plants byseveral companies, saw auto manufacturers post a double-digit decline in May compared to the same month in 2019, as well as preceding months this year. A comparison with May 2019 will not give the right picture as there was a nationwide,totallockdownduetothe pandemic a year ago, so the sales were very skeletal. 20,608 UPNEDA itself says lower tariff discovered in recent auctions held for Rajasthan and Gujarat also prompted the move. THE CENTRAL ELECTRICITY Regulatory Commission (CERC) has proposed a mechanism which allows load dispatch centres to procure a part of power to be used for ‘ancillary services’ from the spot market through electricity exchanges. Ancillary services are used by power systems operators to enhance the reliability and security of the electricity grid and they also work towards restoring the grid frequency and relieving congestion in transmission networks In its latest draft ancillary services regulations,CERC said thatfortertiaryreserveancillary service, the national load dispatch centre will have to notify power exchanges the quantum of electricity requirement on a day-ahead basis before commencement of the day-aheadmarketorthereal-time-market. According to experts, the demand for tertiary ancillary services from the spot market willrangebetween1,500megawatt (MW) and 2,000 MW,and in extreme cases, it can rise to around 5,000MW. « Industry sources say the charge is baseless, in fact the agency was required to issue Letters of Intent within 3 moths after bidding FE BUREAU Mumbai, June 1 42,502 THE CENTRE ON Tuesday decided to cancel the CBSE Class 12 board exams amid the continuing pandemic siatuation, reports PTI. Prime Minister Narendra Modi said the decision has been taken in the interest of students and the anxiety among students, parents and teachers must be put to an end. SOLAR POWER AUCTIONS are losing their sanctity and developers their confidence, with Uttar Pradesh becoming the latest state to cancel winningbidswithoutanyvalidreason,otherthanthelureoflower tariffs discovered in subsequent auctions. On receipt of letter of cancellation of the bids from the UttarPradeshNewandRenewable Energy Development Agency (UPNEDA) on Monday, thethreewinnersofthereverse auction held in February 2020 areplanningtomovetheappellate tribunal for electricity (Aptel) against the move.They may also write to the prime minister seeking his intervention to remedythe situation. UPNEDA wrote to three firms — Vijay Printing Press, NV Vogt Singapore and a consortium of SaudiArabia-based UPNEDAwrites toVijay Printing Press, NVVogt Singapore andAlJomaih stating that since no actionwas taken by the firms after they “consented for the extension of the bid periodvalidity till March 31, 2021,” theirwinning bids (ofFeb 2020) have become “time barred and infructuous" « Centre decides to scrap CBSE Class 12 exams DEEPA JAINANI & ANUPAM CHATTERJEE Lucknow/New Delhi, June 1 SOLAR ECLIPSE Auto sales see double-digit decline in May 25,001 THE SOUTHWEST MONSOON is likely to be normal in north and south India, above-normal in central India and below-normal in east and northeast India, the Met department said on Tuesday, reports PTI. June is likely to witness normal monsoon, which is also the sowing season. Developers to move tribunal against state renewable agency’s move to cancel bids, appeal to PM ● CURRENT AFFAIRS CERC looks at buying balancing power from spot markets « Monsoon likely to be normal in north & south UP does an AP, denies rights LOCKDOWN BRAKE 1,21,018 33,771 INDIAN ECONOMYWOULD rebound in the current fiscal ending March 2022 and clock a growth of 9.3%, reports PTI. But a severe second wave has increased risks to India's credit profile and rated entities, Moody's Investors Service said on Tuesday. SOLAR BIDS « IN THE NEWS Indian economy to grow 9.3% in FY22: Moody’s Note: Numbers for May 2021 and May 2020 are not comparable as production and sales were impacted due to nationwide lockdown last year because of Covid-19 outbreak Source: Companies data FE BUREAU New Delhi, June 1 Continued on Page 11 DHFL RESOLUTION Wadhawan moves SC, wants lenders to consider bid ANKUR MISHRA & INDU BHAN Mumbai/New Delhi, June 1 KAPILWADHAWAN, THE formerpromoterof Dewan Housing Finance (DHFL), on Tuesday moved the Supreme Court against a National Company Law Appellate Tribunal’s interim order that asked the lenders not to considerhis settlement offer for now, as directed by the tribunal. The NCLAT,on May25,had stayed the NCLT Mumbai bench's May 19 order directing lenders to consider a `91,000-crore settlement offer from Wadhawan. The appellate tribunal had also directed NCLT to expedite the approval of the resolution plan submitted by lenders. Wadhawan has repeatedly accused DHFL’s lenders of sell- ■ NCLAT’s interim order asked lenders to not considerWadhawan's `91,000-cr settlement offer for now ■ Appellate tribunal had also directed NCLT to expedite approval of the resolution plan submitted by lenders ■ Wadhawan has repeatedly accused DHFL’s lenders of selling it much below its fair value ■ He says CoC acted contrary to objective of maximising value by approving Piramal's bid ing the company much below its fairvalue. Continued on Page 2 DoT addresses equipment PLI concerns AS THE GUIDELINES for PLI scheme for telecom equipment have not been notified yet,theDoThasclarifiedthat incremental investment and production starting April 1 for the companies which would be selected would be taken into account, reports Kiran Rathee in NewDelhi. TheresponsefromDoTcame after certain firms expressed apprehension that the delay in issuance of guidelines,couldmeansmallerwindowfor meeting targets. ■ Page 4 COVID TRACKER STATION FACELIFT For unlock, positivity in a district has to be less than 5%, 70% of over 60 must be vaccinated as also those over 45 with other illnesses CSMT makeover One crore vaccination per day by Adani and GMR July; entire country by December among 9 in fray for FE BUREAU Pune, June 1 THE COUNTRY WILL be able to vaccinate more than a crore people per day by early to mid Julyand the entire countrywill be covered by December, Dr Balram Bhargava, DG, Indian Council of Medical Research, said on Tuesday. The country is still in the midst of a ferocious second wave of the Covid pandemic and although it is abating because of the containment and testing, the country cannotreturntobusiness asusual, Bhargava warned.For opening FE BUREAU New Delhi, June 1 A consignment of three million doses of Russia's Covid vaccine Sputnik V landed at the Rajiv Gandhi International Airport, in Hyderabad on Tuesday up a district,test positivityhas to be less than 5%,vaccination of 70% of those above60years and those above 45 years with comorbidities should bevaccinated, and Covid-appropriate behaviour continues at all levels, Bhargava said. Unlocking hastodonepatientlyguidedby theamountofvaccinationthat has been done for the vulnerable group,he said. Continued on Page 2 Eli Lilly gets nod for emergency use of antibody drugs combination in India ELI LILLY ON Tuesday said it has received permission for emergencyuseofitsantibody drugs combination used for treatment of mild to moderate Covid, reports PTI. It has received permission for restricted emergency use of its monoclonal antibody drugs,bamlanivimab700mg and etesevimab 1400 mg, used together for the treatmentofpatientswithmildto moderate Covid. ■ Page 4 SC stays HC's quashing of IGST on import of oxygen concentrators FE BUREAU New Delhi, June 1 THE SUPREME COURT on Tuesday stayed the Delhi High Court order that quashed the Centre’s decision to impose 12%IGSTonimportofoxygen concentratorsforpersonaluse, as“unconstitutional”. A bench led by Justice DY Chandrachudsought response from the PIL petitioner on an appeal by thefinance ministry against the high court’s May 21 decision. Detailed report on Page 3 NINE COMPANIES, INCLUDINGGodrejProperties,AnchorageInfrastructureInvestments Holdings, Oberoi Realty and AdaniRailwaysTransport,have emergedasprospectivebidders forredevelopmentoftheChhatrapati Shivaji Maharaj Terminus RailwayStation. Kalpataru Power Transmission,GMREnterprises,ISQAsia InfrastructureInvestmentsPte, Moribus Holdings Pte and BIF IVInfrastructureHoldingDIFC aretheotherbiddersshortlisted by the Indian Railway Stations DevelopmentCorporationafter theevaluationoftherequestfor qualification applications submittedbythebidders.Theredevelopment cost of the CSMT station, including the cost of financing and contingency, is `1,642 crore and the project will be undertaken on the design-build-finance-operate and transferbasis. “Nine firms have qualified theRFQstagefortheredevelopment of CSMT station which is one of our most ambitious projects and we at IRSDC are committed to transform the CSMT station into a state-of-the-art transport hub,” SK Lohia,MD & CEO of IRSDC,said onTuesday. As the nodal agencyand the ON TRACK Redevelopment cost ofCSMTstation, including financing and contingency, is `1,642 crore ■ The project to be undertaken on designbuild-financeoperate and transfer basis ■ RFQ for the projectwas invited in August 2020 and opened on January 15, 2021 Received positive response from 10 developers; after evaluation, 9 picked as ‘qualified’ for next stage main project development agency for the redevelopment, IRSDC had invited the RFQ in August 2020 after it received ‘‘in principle” approval of the PPP appraisal committee to redevelop CSMTstation. Continued on Page 11 MAKING IT SIMPLE Is it all Greek to you? Coronavirus variants get new names EMMA FARGE Geneva, June 1 CORONAVIRUS VARIANTS WITH clunky, alphanumeric names have now been assigned the letters of the Greek alphabet to simplify discussion and pronunciation while avoiding stigma. The World Health Organization revealed the new names on Monday amid criticism that those given by scientists to strains such as the South African variant — which goes by multiple names, including B.1.351, 501Y.V2 and 20H/501Y.V2, — were too complicated. Since the pandemic began, the names people have used to describe the virus have provoked controversy.Former US President Donald Trump called the new coronavirus “the China virus” and other monikers, raising concern he was using the names as a political weapon to shift ■ WHO gives new, simpler names to variants ■ UK, South Africa, Brazil and India variants named Alpha, Beta, Gamma and Delta ■ Gods, invented nameswere also considered ■ Geographical names lead to stigma, WHO says blame to a rival nation. TheWHO,which has urged people not to use language to advance Covid profiling of people or nationalities, has also said people should avoid using country names in association with emerging variants. The four coronavirus variants considered of concern by the UN agency and known generally by the public as the UK, South Africa, Brazil and India variants have now been New Delhi assigned the Greek letters Alpha, Beta, Gamma and Delta, respectively, according to the order of their detection. Othercoronavirusvariants of interest continue down the alphabet. “While they have their advantages, these scientific names can be difficult to say and recall, and are prone to misreporting,” said the WHO, explaining the decision. Continued on Page 2
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