OPINION, P6 ECONOMY, P2 ASHOK GULATI For sustainable agriexports, govt must change sugar/rice policies BACK PAGE, P12 EDITORIAL FREEDOM OF EXIT PRESSURE TACTIC Govt stance on Devas-Antrix arbitration will leave investors with a bitter taste on putting their money in India Insolvency law changing way society perceives biz failures Airlines, holiday firms ramp up pressure on Britain to ease rules NEW DELHI, MONDAY, JUNE 21, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 95, 12 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 Proposal to allow the tax-free enclaves to sell goods in DTA at lowest FTA tariffs; Revenue dept's call crucial PRESS TRUST OF INDIA New Delhi, June 20 ■ eFE, P8 Profile building for a dream job CareerLabs offers end-to-end career solutions to students through its profile building platform ■ PERSONAL FINANCE, P9 Bharat Griha Rakshak policy The policy has two optional covers— cover for valuables and a personal accident cover for policyholder and spouse ■ INFRASTRUCTURE, P11 Smart AC in works for post-Covid era Given the pandemic experience and growing power demand, EESL’s seeking to better AC safety & efficiency in public spaces ■ SCIENCE & TECH, P12 Lessons on stress from animals Studies on whales and other creatures reveal how health is affected by a hard time, whether it’s a pandemic or a personal crisis Our best bet on boosting revenues in the medium term is higher GSDP growth; some new taxes may be needed caused by GST to states' finances and fiscal powers,” he told FE. Continued on Page 2 India counters criticism of IT rules in UN INDIA HAS dismissed criticism of its newITrules relating to social media by three UN special rapporteurs on rights issues, saying the country's democratic credentials are well recognised and the right to freedom of speech and expression is guaranteedunderitsConstitution, reports PTI. India's permanent mission to the UN in Geneva asserted that the rules are "designed to empower ordinary users" of social media. QuickPicks Net addition of 12.8 lakh subscribers to EPF in April EVEN AS Covid-19 took an ugly turn in April, the Employees Provident Fund Organisation (EPFO) saw net addition of 12.76 lakh subscribers in the month, up 13.7% from the net addition in the previous month, reports fe Bureau. Data released by the retirement fund body showed that during April, the number of exits declined by 87,821 and case of re-joining increased by 92,864 as compared to March, 2021. The EPFO subscription numbers are often subject to big revisions; a clearer picture of a period emerges after such changes. PAGE 2 Authum Investment H1 bidder for Reliance Home Finance MUMBAI BASED NBFC Authum Investment and Infrastructure is likely to have been selected as the highest (H1) bidder for Reliance Home Finance (RHF) by the lenders, sources close to the development have told FE, reports Ankur Mishra in Mumbai. PAGE 4 Year 1 : 6% Year 2 : 6% Year 3 : 5% Year 4 : 5% Year 5 : 5% thebaseyearforoverwhichthe investment and incremental sales target would be calculated would remain same for all the firms. Since the government is considering extending the tenure of the PLI scheme to six years from the current mentAuthority(DDMA)inan order on Sunday stated that barswill be allowed to reopen with 50% seating capacity, from 12 pm to 10 pm, from next week. The owners of restaurants and bars will be responsible for strict adher- FE BUREAU India Inc posts high profit as sales rise, costs dip Strong sales with costs under control saw India Inc's profits rising spectacularly during the January-March period Q4 Interest Q1 Q3 FY21 Q4 PBT (% chg y-o-y) Q1 Q2 Q4 Q1 Q1 Q2 Q3 FY21 Q4 Q4 Sample of 1,267 companies (excluding banks & financials) Q1 Q2 Q3 FY21 `1,000 cr over 4 years Cumulative minimum Year 1: 250 Year 2: 500 Year 3: 750 Year 4: 1,00 Year 1 : `4,000 cr Year 2 : `8,000 cr Year 3 : `15,000 cr Year 4 : `20,000 cr Year 5 : `25,000 cr five, both the sets of manufacturers would have the option of choosing any of the five years during the six year tenure to meet the targets and claim financial incentives. Continued on Page 2 May launch systematic withdrawal plan and inflation-indexed annuities Expect fresh fund inflows to NPS be about`1.25 lakh cr in FY22 end BharatPe, CFS to infuse `500-3,000 cr in SFB Continued on Page 2 NPS is gaining traction in private sector, says PFRDA chairman Income from annuities should be exempted from tax ● PMC PLAN Continued on Page 2 Source: Capitaline Govt should consider doubling deduction to `1 lakh/annum for NPS investment encetoCovidsafetymeasures and all official guidelines and norms,it said. Publicparks,gardensandgolf clubs will be reopened and outdoor yoga activities will also be allowed, the DDMA stated in its order. other traditional products are seenspurringdemandforNPS, he added. Despite the pandemic, nearly 6 lakh new private subscribers (corporate employees and citizens) joined the NPS in FY21, up from about 5 lakh in FY20,Bandyopadhyay said. As on June 12, 2021, the private sector subscriber base stood at 28.86 lakh with 40% of them joining in the past two years. Q4 ● TURNAROUND POTENTIAL AFTER STAGNATING FOR over a decade, the National Pension System (NPS) was gaining traction in the private sectorwith about 10 lakh new subscribers expected to join it in FY22,Pension Fund Regulatory and Development Authority (PFRDA) chairman Supratim Bandyopadhyaytold FE. Highertax-savingpotential and attractive returnsvis-à-vis Incremental sales of manufactured goods over base year CENTRUM FINANCIAL SERVICESandBharatPe,willcollectivelyinfuseanywherebetween `500-3,000 crorecapital in the small finance bank (SFB) as per requirement, according to BharatPegrouppresidentSuhail Sameer. In an interaction with FE, he said both the partners have agreed to put an equal amount in the bank which will startwith`500crorecapital.He alsosaidafinalcallonPMCBank depositorswillbetakenafterthe amalgamation scheme is prepared bythe regulator. “One thing was clear in our discussionwith RBI that interest of depositors is supreme,” Sameer said.According to him the new owners want to allow PMCdepositorstowithdrawas much as possible from the bank. “We do not know how much amount existing PMC Bank depositors will be able to withdraw,butwewanttoallow them withdrawing as much as possible,”he further said. Without sharing details of exact asset-liability mismatch in PMC Bank,Sameersaid they have a plan in mind to tackle the same, which is yet to be approved by the regulator. (bps, chg y-o-y) Q2 Q3 FY21 PRASANTA SAHU New Delhi, June 20 Incremental investment over base year ANKUR MISHRA Mumbai, June 20 RM to sales (% chg y-o-y) Q2 Q3 FY21 874.5 Q2 Q3 FY21 OPM (bps, chg y-o-y) -138.3 Q1 (% chg y-o-y) 363.5 Total expenditure 561.0 Net sales (% chg y-o-y) -415.1 The pandemic has given the online furniture market, led by horizontal marketplaces, a boost As we control Covid sooner than others, we will likely get a head start and economic activities including tourism will get a fillip Mobile phones (invoice value of `15,000 and above)* January-March -416.3 Online furniture retail soars THE CONCEPT OF Goods and Services Tax (GST) was antithetical to federalism to begin with, Kerala finance minister KN Balagopal said, adding his voice to a growing chorus of state finance ministers and public-policy experts seeking a comprehensive overhaul of the structure, design and administration of the four-year-old consumption tax. “Cooperative federalism is at stake.GST hasn't yielded the promised revenue productivity.Let us at least learn from experience and restructure the tax. There are also genuine concerns over the (lack of) democratic functioning of the GST Council. It is up to the Union government to display statesmanship and remedy the damage Kerala is on the cusp of taking secondgeneration initiatives in health, education & employment. The Centre's policies are getting in the way of the plan Continued on Page 2 -152.9 ‘GST was a mistake, needs remedy now’ THE DELHI government has allowed reopening of bars, public parks and gardens fromMondayunderaphased easing of restrictions imposed due to the second Covid wave,reports PTI. The Delhi Disaster Manage- -925.7 CENTRE & STATES K G NARENDRANATH & PRASANTA SAHU New Delhi, June 20 ■ BRANDWAGON, P10 The chief economic advisor was responding to a suggestion made by some industry bodies that the government needed to come outwith a `3 lakh crore stimulus package to boost the economy. ■ Page 4 7.5 FE SPECIALS He, however, added that the demand for a fresh stimulus package has to be considered againstthebackdropofahost ofinitiativestakenbyfinance ministerNirmalaSitharaman in her Budget for 2021-22 presented in February. 508.2 THE GOVERNMENT is open to coming out with more measures to boost the economywhichhasbeenhitbythe second wave of the coronavirus pandemic, says chief economic advisor (CEA) K V Subramanian,reports PTI. Segment Proposed incentive rate Public parks, gardens to open in Delhi from Monday: DDMA -3.0 Govt open to more measures to boost economy: CEA THE GOVERNMENT WILL create a level play field between smartphone manufacturers who have met their year one (FY21) sales target and the ones who have not and therefore need a one year extension to avail financial incentives under the production-linked incentive scheme. Official sources said that 53.3 Continued on Page 2 Eligibility threshold criteria KIRAN RATHEE New Delhi, June 20 -13.8 iff area (DTA). -33.7 mandated to pay the regular customs duty on a product if they sell it in the domestic tar- Both sets of players would have the option to choose any of the five years during the six year extended tenure to avail incentives 86.1 THE COMMERCE MINISTRY may float a proposal to allow units in special economic zones (SEZs)to sell goods in the domestic market,at least temporarily,at the lowest tariffs at which India imports from its free-trade partners. This will help the SEZs cope with the havoc wrought by the Covid19 pandemic,sources said. Currently, SEZ units are exports (goods & services) fell 4% in FY21 in rupee term, while the country’s dropped only 1.5% -67.2 ■ SEZ BANIKINKAR PATTANAYAK New Delhi, June 20 Level playing field to be made for Samsung & Apple vendors THE CENTRE HAS told the Supreme Court that ex-gratia compensation of `4 lakh cannot be paid to the families of those who have died of Covid19 as it is beyond fiscal affordabilityand the finances of central and state governments are under severe strain. In an affidavit filed before the top court, the ministry of home affairs said the Centre submitted that it has by ways of"MinimumStandardRelief", under section 12 of the Disaster Management Act, 2005, taken several steps providing for substantial and speedy measures bywayof increase in health, infrastructure, ensuring food safetyto everycitizen. "The prayer of the petitionerforpaymentofex-gratia to all deceased persons due to Covid-19 is beyond the fiscal affordability of the state governments.Alreadythefinances of state governments and the central government are under severe strain due to the reduction in tax revenues and increase in health expenses on account of the pandemic. 18.8 ■ Commerce ministry wants to help SEZs to utilise idle capacity; move to improve the units' cash flows, boost jobs and lower imports -14.6 units must pay regular customs duties for sales in domestic market 1.3 ■ Currently, SEZ -8.0 HELPING HAND -8.0 THE SECURITIES and Exchange Board of India has directed PNB Housing Finance (PNBHF) to halt its proposed `4,000 crore share allotment to a clutch of companies led by the Carlyle Group, reports fe Bureau. In a stock exchange filing on late Saturday evening, PNBHF said Sebi has restrained the lender from going ahead with shareholders' voting on June 22. Centre to seek duty relief for SEZ units Finances under strain, can’t pay: Govt to SC -7.1 Sebi puts a pause on PNB Housing deal with Carlyle PLI TWEAK ● COVID EX-GRATIA -34.9 AIR INDIA has time till midJuly to challenge the lawsuit filed by Britain's Cairn Energy demanding that a US federal court force the airline to pay a $1.26 billion arbitration award it had won against the Indian government in December last year, sources said, reports PTI. Air India is controlled by the Indian government so much that they are "alter egos", Cairn had said in the lawsuit filed with the US District Court for the Southern District of New York. The court should hold the airline company liable for the arbitration award, the company had said. DOMESTIC SALES 1.5 IN THE NEWS AI can challenge Cairn lawsuit till mid-July LONG-TERM VIEW It is about creating more productive jobs, says CII’s new president TVNarendran,MD &CEOTata Steel takes over as CII president atatimewhentheeconomyis in atroughbutIndiaInchasturned in stunning results for FY21. Narendran tells FE's Shubhra TandonandShobhanaSubramanian the jobs will come once thereismoreconstruction,manufacturing and more economic activity in remote parts of the country.Excerpts: Given capacity utilisation at just 65% and capex unlikely togoup,doyounotthinkcorporate India should pay higher taxes for two years at least to help the government with stimulus? Any tax rate should be looked at longer term and not everyone in India Inc is profitable today. There were industries like steel which were stressed for the last 10 years and had the most NPAs, now suddenly itlooksliketheyaremakinglot of money. So, to me these things will change, and one needs to take a slightly longer term view so that we attract investments. How soon do you see investment cycle turning? Even before the pandemic, demand was slipping. Private sectorinvestmentswillcomein when there's both demand and profitability. Only demand without profitability may not make it affordable for the private sector to invest because everyone is sitting on a stretched balance sheet. But investments are already happening. For instance, the steel industry is seeing higher utilisationsandpriceshavegoneup. Between the major steel companies we have announced `50,000-60,000 crore of capex over the next three years.Tata Steel itself is investing `25,000 crore. We need to look at it in an aggregate… ThewayI see it,the starting point is what was announced in last year’s Budget when the government said it was going to spend lot on infrastructure. As money flows on to the ground you will see positive impact on auto, steel, cement, construction and mining equipment etc.So Iwould say that as growth comes back, vaccination picks up, you will see investment cycle start. Some of it is already hap- New Delhi pening with Ola building largest electric two-wheeler plant in the world, auto components for instance is also doing well. In India,despite growth,jobs are a challenge. What is CII’s estimate for job creation in the next three years and which sectors would lose and which will gain? It depends on where is it that you are getting growth. Infrastructure spend is a big multiplier, it creates jobs in all parts of India. 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.