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XLVII NO. 179, 20 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 5.91 May 7, ‘21 Every minute counts The concept of ten-minute grocery delivery, while attractive, is neither efficient nor sustainable ■ eFE, P8 Building intelligent factories IBM is helping manufacturing firms to upgrade product quality by deploying new-age technologies ■ PERSONAL FINANCE, P9 Bet on dividend yield schemes Investors should consider dividend yield schemes now as low interest rates make high dividend yield stocks attractive ■ INFRASTRUCTURE, P11 On stable footing amidst a crisis Having weathered Covid-19 well, their stronger balance sheet should enable NBFC-IFCs to be a partner on the NIP agenda ■ SCIENCE & TECH, P7 Biden nearing methane crackdown The free ride for methane is finally nearing an end in Washington QuickPicks Boards of two major Finolex shareholders to meet today INVESCO DEVELOPING Markets Fund, a foreign portfolio investor in Zee Entertainment Enterprises, has reiterated that the company should hold an EGM to evict certain directors, reports fe Bureau in Mumbai. The move comes after the ZEEL board approved a merger with rival Sony Pictures Networks India. PAGE 15 6.7 Jul ‘21 Source: FADA ❚ Services look up 56.7 45.4 Aug ‘21 ❚ Unemployment lower (%) 14 13.62 12 5.89 10 8 Jun ‘21 Jul ‘21 Aug ‘21 6 Note: Reading below 50 suggests contraction and above it indicates expansion Source: IHS Markit Source: CMIE ❚ GST mop-up robust ❚ Exports strong GST (` cr) 1,40,000 1,20,000 1,00,000 80,000 60,000 40,000 20,000 0 E-way bill (crore) 5.5 6.4 6.6 Jun ‘21 Jul ’21 Aug ‘21 4 June 6 2021 (% chg, y-o-y) 60 48.3 49.9 Jun ‘21 50 Sept 19 Jul ‘21 45.2 40 30 20 10 Source: GSTN 0 Aug ‘21 Source: Ministry of Commerce & Industry GETTING REAL ● SWEET SURPRISE UP govt hikes sugarcane SAP by `25 per quintal New pricing model for 5G spectrum likely THE TELECOM REGULATORY AuthorityofIndia(Trai)islikely tolookfornewmodelstofixthe reserve price for 5G auctions expectedtotakeplacenextyear. Thetelecomindustryishopeful thatwithlargeswathesofspectrum remaining unsold in the last two auctions, and the government’srecentcommitment to reforms, reserve prices this time would be set at realistic levels. More than 60% of the spectrum put on the block at the auctions, in 2016 and March 2021,remained unsold. The need for a realistic reserve price, in tune with the industry’ssentiments,isseenas essential because in a threeplayer market, the spectrum typically gets sold at the base price. If the price is not in line with the industry’s expectations,the spectrum could rem- Taking the call ■ In 2018, Trai had suggested DEEPA JAINANI Lucknow, September 26 reserve prices for 5G spectrum in the 3300-3600 MHz ■ Industry feels the price is too high ■ 700 MHz spectrum has gone unsold in the last two auctions MONTHS BEFORE THE state goes into election mode,Uttar Pradesh,the country’s biggest sugar producing state, announced an increase in the sugarcane state advised price (SAP) by`25 per quintal for all the three varieties of the crop. The state government raised the cane price for the early maturing variety from `325 a quintal to `350 per quintal for the crop year that began this month, while the price for the common variety cane has been raised from `315 to `340 per quintal. The announcement came after the Centre decided to increase the floorprice,known as the fair and remunerative price(FRP)for2021-22by`10 to `290 per quintal for the next marketing year starting October 2021. The announcement of the SAP had been pending and the state’s decision came with chief ministerYogiAdityanath announcing the same at a farmers’rally,organised bythe BJP’s Kisan Morcha in Lucknow on Sunday. ■ DoTfeels that prices need to be revised More than 60% of spectrum remained unsold in 2016 and March 2021 auctions ainunsold.Further,thereishope of a departure from the current methodology of fixing the reservepricewherethelastauction price becomes the base price. Continued on Page 5 Govt has no interest in acquiring any telecom company: Vodafone Idea CEO THE GOVERNMENT HAS given an option to telcos to pay back interest on dues via equityandalsoconveyedthat it has no interest in acquiring any telecom company,VodafoneIdeaMDandCEORavin- Continued on Page 5 der Takkar said, reports PTI. Hesaiditisclearthatthegovernmentwants the company tocompeteinthemarketand there should be at least three private service providers in thetelecomsector. ■ Page 13 Continued on Page 2 Ministries, industry bodies ready list of demands as formal talks to commence soon BANIKINKAR PATTANAYAK New Delhi, September 26 AS INDIA PREPARES to launch formal negotiations with the UKandtheEUthisfiscalforfree trade agreements (FTAs), domesticplayersrushtosubmit demands for greater market accessinhundredsofproducts, withtextilesandgarmentsfeaturing in the wish list of most stakeholders,sources told FE. Apex exporters’ body FIEO alone has submitted with the government a list of 240 products—rangingfromtextilesand pharmaceuticalstoengineering goods — in which it wants the UK to cut tariffs. Government officials are drawing up a comprehensive list of items for the talks. This includes electrical machinery, capital goods, auto components,organicchemicals, leather, footwear and toys, among others. Thetextileministryispitching for duty-free access in textiles and apparels,which made up for 19% and 14% of India’s Huge potential ($ billion) India's exports to UK Imports from UK 9.3 7.6 FY19 8.7 8.2 6.7 5 FY20 FY21 India's exports to EU* Imports from EU* FY19 ($ bn) FY20 FY21 *Excluding trade with the UK Source: DGCIS exports to the UK and the EU, respectively, last fiscal.Textile secretary UP Singh told FE that the inclusion of these products in the planned FTAs will certainly boost India’s exports. However,the Centre will take a“balancedview”whenitstartstalks, keeping in mind interest of all stakeholders,he added. Continued on Page 5 Kharif prospects FE BUREAU Rural demand may not get a leg-up Farmers' net income may rise by 5.3% y-o-y in the 2021 kharif season (crop arrivals to begin soon) if the initial output estimate holds good and MSPs are largely ensured. This, however, may not suffice to give a boost to rural demand for non-food items Net income of farmers for major kharif crops (` crore) 2020 2021 Change (%, y-o-y) Kharif 2021 food grains output 0.6 Kharif 2021 MSPs 1-5 Source: First advance estimates, Cabinet decision Farmers' net income 5.3 Cereals Pulses Oilseeds Cash crops Non-food inflation 5-10 Source: Care Ratings Estimate PLAINSPEAK ‘No funds for more GST aid to states, revenues to jump’ PRASANTA SAHU New Delhi, September 26 EVEN AS 'ALL companies’ affected byretrospective taxation are ‘positive’ about settling their disputes under the specialdispensationofferedby the government, the Centre would secure indemnity covers from them in the cases where all ‘separate interested parties’ have not given undertakings to cease litigation after the disputes are settled, revenue secretaryTarun Bajaj told FE.Cairn Energy— the govern- Had it been only formalisation (which led to surge in tax revenues), personal income tax mop-up wouldn't have grown by 62% on year to `2.88 lakh crore till September 23 (this fiscal). We have collected a lot of information (on income profiles based on spending patterns and sales) about the taxpayers, and are playing it back to them, making them voluntarily pay the (full) taxes. We have ensured better compliance — TARUN BAJAJ, REVENUE SECRETARY ment had raised 98% of over `8,100 crore collected as retrospectivetaxesfrom the Scottish energy firm — was on board to resolve the tax dispute,he said. Continued on Page 13 ● FUNDING UNDER LENS REALTY CHECK China steps up oversight It could be a cracker of a Diwali for builders of Evergrande projects SHUBHRATANDON Mumbai, September 26 REAL ESTATE DEVELOPERS could be in for a good festival season this year clocking in near-recordsales.Withahostof newlaunchesplannedbetween now and the end of the year, buildersbelievebusinesswillbe brisk.While the new launches were expected to commence from the second week of October, signs of interest from homebuyers have seen these being advanced. Anjana Sastri, director (marketing),Sterling Develop- Volumes (msf) Q1FY22 Q2FY22E Value(` mn) 4,970 Godrej Properties 21,175 Q-o-Q (%) 0.8 3.0 REUTERS Beijing, September 26 288.7 326.1 DLF 10,140 9,500 NA NA NA 6.3 Macrotech (Lodha) 9,570 0.6 1.5 NA NA 0.8 2.5 220.5 205.7 0.1 0.3 177.8 173.5 Prestige Estates* Oberoi Realty 5,316 1,700 4,650 16,250 *PEPL share and sales; Prestige share of bookings ers,Bengaluru,told FE,shewas seeing many first-time homebuyerswho had been unable to reach a decision due to the lockdown but were now keen 19,500 «« «« Invesco reiterates demand for ZEEL EGM to evict certain directors 27.6 «« THE BOARDS of two major corporate shareholders of Finolex Cables will meet on Monday to assess the situation, after two proxy advisory firms raised corporate governance issues, , reports Rajesh Kurup in Mumbai. The meeting comes ahead of the company’s annual general meeting (AGM) slated for September 29. PAGE 4 Jul ‘21 ❚ 2-wheeler sales dull KIRAN RATHEE New Delhi, September 26 ■ BRANDWAGON, P10 Jun ‘21 Sourcee: CSO (% chg, y-o-y) 6.7 30 25 20 16.9 15 10 5 0 Jun ‘21 Sept 10, ‘21 Sourcee: RBI 41.2 May ‘21 11.5 High-stakes EU & UK FTAs make wish lists longer 41.4 ❚ Loan growth slow 10 TRADE WINDS 55,045 57,951 Sept 19, 2021 (% chg, y-o-y) 60 50 40 30 20 10 0 13.6 15 33,245 33,928 FE SPECIALS 20 FINANCE MINISTER NIRMALA Sitharaman said on Sunday Indiarequiresatleast4-5more large banks like State Bank of India(SBI)tosupportthegrowing credit appetite of a fastrecuperating economy in the post-Covidworld. Addressing the 74th annual general meeting of the IndianBanks’Association(IBA) in Mumbai, the minister said theeconomyisonaresetmode afterthedevastationcausedby thepandemic.Banks,beingthe backbone of the financial system,would have to continue to play a critical role in supporting the economy’s resurgence, the minister said. Non-food credit growth remained far from satisfaction and stood at 6.2% in July 2021, against 6.4% a year earlier. Already,the wide-scale consolidationexerciseinthepublicsector banking space in recent years has created some large lenders with strong balancesheet to lend to big projects. Thanks to the amalgamation exercise, the number of staterunbankshascomedownfrom 27 in 2017 to 12 now. She also asked lenders to firm up models to better focus on exporters. Continued on Page 2 25 Sourcee: Nomura 6.80 6.60 6.40 6.20 6.00 5.80 5.60 28.6 30 17,999 20,757 THE FAIRLY SWIFT recovery following the second wave of the pandemic will likely gain momentum in the festive seasonahead.However,evenastax collections exceed expectationsandhigh-frequencyindicators showa pick-up,employment numbers remain worrisome. Headline unemploymenthasfalleninSeptember to just 5.89% but urban joblessness is hovering around 8%; CMIE estimates the net cumulative increase in employment in the past 12 months at just 44, 483.That’s just 0.044 million on a base of 400 million jobs. Hopefully, the recovery process won’t lose steam and the supply-side issues will be sorted out. While exports are surging, an analysis by HSBC shows it’s high-skill exports — mobile phones, machinery, pharmaceutical products, and (% chg, y-o-y) Index 110 100 90 80 70 60 50 40 Mar 1, ‘21 FE BUREAU New Delhi, September 26 IT services — have gained global market sharewhile lowskill and labour-intensive exports — textiles and agriculture—havebeenweak.Indeed, labour seems to be moving from factories to farms creating surplus in rural areas. It’s good news curbs on expenditure have been lifted and that several central government departments can now spend from their allocated budgets starting October; the clampdown had limited expenditure for some departments, including commerce, renewable energy, textiles,to just a fifth of the FY22 outlay. One reason or the lower-than-expected GDP growth in Q1FY22 was the small increase in government expenditure, though some of this was attributed to the states.Where government has spent is on capex; the increase in the first four months was almost 15% y-o-y. The otherbig concern is the capex cycle: An analysis by Nomura shows that while FY22-23 maysee some impact of deferred investments,originallyplannedduringFY21-22, the phasing profile of envisaged capex reveals persisting near-term risks to the private investment outlook. 97,463 RELIANCE JIO LED active wireless subscriber additions in July at 6.1 million, while Bharti Airtel's active user additions stood at 2.3 million, according to latest data by Trai, reports PTI. Riding on the strong gains, Jio has scaled up its active subscriber market share, with its user tally on this count pegged at 346.49 million. FE BUREAU New Delhi, September 26 ❚ IIP weak 93,068 Jio leads active wireless user additions in July Phasing profile of envisaged capex reveals persisting near-term risks to private investment outlook ❚ NIBRI plateaus India needs 4-5 more large banks of SBI's size: FM « A NEW YORK court has paused Cairn Energy's pursuit of US assets of Air India for the recovery of $1.2-billion arbitral award, so as to allow the British firm to reach a settlement with India on the longdrawn dispute, reports PTI. Recovery to gain momentum, but jobs, capex still a concern 1,12,020 NY court pauses suit to allow Cairn to settle row with India ● BIG BANK THEORY 1,16,393 STATE GOVERNMENTS AND the departmental undertakings and companies under them owe `1.58 lakh crore to discoms run by them as at June end, reports Anupam Chatterjee in New Delhi. This was as much as 66% of these discoms' dues to gencos, including those owned by the Centre and states and the private sector firms. GROWTH STORY 92,849 IN THE NEWS States owe `1.6L cr to discoms as subsidies, dues 39.7 NEW DELHI, MONDAY, SEPTEMBER 27, 2021 45 Fisheries and animal husbandry key to doubling farm income EDITORIAL 45 ASHOK GULATI & RANJANA ROY BACK PAGE, P20 47.9 50.9 OPINION, P6 Source: Companies, I-Sec Research to conclude the deal in the festive season.“There is a healthy stock of ready-to-move-in apartments and also nearcomplete inventory, and that will likely be of high interest during the festive season,”Sastri observed. Continued on Page 2 SEVERAL LOCAL GOVERNMENTS in China have set up special custodian accounts for propertyprojectsofitsmost indebted developer, Evergrande, to protect funds earmarked for housing projectsfrombeingdiverted, media outlet Caixin said. Reeling under $305 billion of debt, Evergrande missed a payment deadline on a dollar bondlastweek,anditssilenceon the matter has set global inve- New Delhi storswonderingiftheywillhave to swallow large losses when a 30-daygrace period ends. The special accounts have been set up since lateAugust in at least eight provinces where Evergrande has the most unfinished projects, the ChineseoutletsaidonSunday,citing a source close to the developer’s management team. These include Anhui,Guizhou,Henan,Jiangsu and cities in the southern Pearl RiverDelta,it added. Continued on Page 5
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