NATION, P12 MOHANDAS PAI & S KRISHNAN Need a three-slab I-T structure with no deductions/exemptions BACK PAGE, P14 EDITORIAL EYEING ACQUISITIONS UK WARNS The Centre may badly need IAS officers, but cooperative federalism needs consultative appointments Anil Agarwal to set up $10-bn fund to hunt for govt assets Russia will face severe sanctions if Ukraine gets 'puppet regime' CHENNAI/KOCHI, MONDAY, JANUARY 24, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLIII NO. 220, 14 PAGES, `6.00 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 FE SPECIALS brands were able to take price hikes but volumes were modest indicating inflationary pressures are clearly keeping demand subdued. Smaller players are losing 632.01 372.22 share to their bigger and stronger rivals as the high cost of raw materials erodes their competitiveness. Continued on Page 2 Retail investors raise stake in Paytm RETAIL INVESTORS increased their stake in One97 Communications, the parent company of Paytm, in the December, 2021quarterfrom2.79%to 3.49%, according to the latest share holding pattern. Also, a new set of investors has come in.While the holding of FPIs fell slightly to 9.36% in the December quarter, mutual funds increased their holding to 1.06% from 0.81% earlier. ■ Page 13 Continued on Page 2 SBI Research ICRA* 13 11.9 12.3 10.4 9.3 9.5 FY22 FY22 FY23 9.1 8.2 8.6 -294.85 -70.84 1,067.88 Source: Capitaline THE INDIAN ECONOMY has ‘some bright spots and a number of very dark stains’and the government should target its spending ‘carefully’ so that there are no huge deficits, noted economist and former RBI governorRaghuram Rajan said on Sunday. Known for his frank views, Rajan also said the government needs to do more to preventaK-shapedrecoveryofthe economy hit by the coronavirus pandemic. Generally, a K-shaped recoverywill reflect a situation where technology and large capital firms recover at a far faster rate than small businessesandindustriesthathave beensignificantlyimpactedby the pandemic. (Estimates in ` lakh crore) 14 12 10 8 6 4 2 0 FY23 Net India Ratings Gross *FY23 projections are based on base-case scenario strong external headwinds. The net market borrowing is expected to be `3.8 lakh crore lowerthan the gross level in FY23. Yet, the Centre’s borrowing will likely remain at an elevated level (in excess of `12 lakh crore) for a third straight year in the wake of the Covid outbreak. Continued on Page 2 ● ON SLIPPERY SLOPE Many states’ debt level at around 40% PRASANTA SAHU New Delhi, January 23 HELPED BY VAT-INDUCED incremental revenues, state governments had outperformed the Centre in fiscal consolidation for a few years till FY15, but thereafter a slippage occurred and since the onset of the pandemic, many of them have been on slippery slope. Some states with a history of large revenue deficits now have their debts hovering States' outstanding liabilities (% of GSDP) W Bengal FY05 Punjab FY15 FY19 31.3 21.7 25.3 31.1 31.2 Sample of 182 companies (excluding banks & financials ) Q4 Q1 Q2 Q3 FY21 FY22 BIJAY KUMAR SINGH New Delhi, January 23 THE CENTRAL GOVERNMENT will likely keep its gross market borrowing target for the next fiscal close to the likelyFY22 revised estimate of `12-13 lakh crore to prevent any flare-up of bond yields, as the economy still faces substantial price pressure amid Centre's market borrowing 33.6 23.3 30.4 36.5 37.6 Q4 Q1 Q2 Q3 FY21 FY22 614.16 48.85 66.73 84.62 91.17 (bps, chg y-o-y) 21.1 Q4 Q1 Q2 Q3 FY21 FY22 BANIKINKAR PATTANAYAK New Delhi, January 23 Q4 Q1 Q2 Q3 FY21 FY22 RM to sales (% chg y-o-y) SDL issuance to rise given absence of GST revenue support, likely rate hike by RBI risk factor too 36.6 28 30.8 37.1 38.3 Tax (% chg y-o-y) 504.46 38.64 33.45 Q4 Q1 Q2 Q3 FY21 FY22 (bps, chg y-o-y) 115.48 PBT 24.94 8.18 33.5 32.25 42.11 Q4 Q1 Q2 Q3 FY21 FY22 OPM Centre to put a lid on gross market borrowing in FY23 48.6 31.7 41.4 49.1 53.3 46.9 24.1 33.8 42.6 39.8 IN A MOVE to bring in operational efficiency in the storage, movement and distribution of food grains under the Targeted Public Distribution System, the government will roll out a digital system which would provide real time data about the volume as well as quality of rice and wheat stocks with FCI and other government agencies from April 1, 2022, reports Sandip Das. ALTHOUGH INDIA INC was abletoreportreasonablystrong sales in the three months to December, 2021, elevated raw material costs left operating margins and the bottom line under pressure. Revenues rose asmart33.5%y-o-yduringthe quarter for a universe of 185 earlybirds(excludingbanksand financials) but the net profits forthesampleincreasedbyonly 14.4%y-o-y. The results are positively weak if Reliance Industries and TCS are excluded; the net profit is virtually flat at an anaemic 1.3% while the top line growth is a more modest 24%. To be sure, this is partly due to the huge `7,300 crore loss posted by Vodafone Idea but profit growth has been weak, nonetheless. RIL and TCS account for almost half the sales for the sample. Companies with strong (% chg y-o-y) Economy has a number of 'very dark stains': Rajan HARDENING BOND YIELDS 46.7 34.6 36.7 38.6 38.8 Online tracking of grains to help cut storage cost FE BUREAU New Delhi, January 23 (% chg y-o-y) Total expenditure 37.03 UNFAZED BY THE Supreme Court upholding winding up of the company, shareholders of Devas Multimedia will continue to seek seizure of Indian government assets abroad to collect $1.2 billion the firm has been awarded by arbitration tribunals, reports PTI. Firms with strong brands hike prices but volumes modest; smaller firms losing out Net sales 481.92 Devas to keep pursuing Indian assets abroad ● EXPERT VIEW Profits poor as input costs pressure margins 15.13 THE FINANCE MINISTRY is expected to come out with a single volume Economic Survey for 2021-22 projecting a growth of around 9% for the next financial year, reports PTI. MIXED QUARTER 84.38 IN THE NEWS Economic Survey may peg growth for FY23 at 9% 12.9 12 12.4 OPINION, P6 Kerala Andhra All states* Rajasthan FY21(RE) around a precarious level of 40% of the respective gross state domestic products (GSDPs), double the level an FY22(BE) expert committee had found tolerable. Continued on Page 2 AMAZON TO FRL ‘Samara will invest `7k cr to avert default’ PRESS TRUST OF INDIA New Delhi, January 23 ■ BRANDWAGON, P10 Fresh off the studios How BookMyShow is attempting to tap the nascent transactional video on demand segment ■ eFE, P8 Sustainability as strategic priority CEOs have to prioritise their sustainability efforts to become future-ready, says SAP’s Sindhu Gangadharan ■ PERSONAL FINANCE, P9 Tax norms for Ulips capital gains Tax exemption on maturity proceeds of Ulips with an annual aggregate premium of over `2.5 lakh has been removed ■ INFRASTRUCTURE, P11 Budget must review NMP's course With the plan moving into its second year, the govt would do well to address the concerns ofvarious stakeholders ■ SCIENCE & TECH, P12 Vax no armour against Omicron About 20% of people just won’t have a good immune response, even with a booster PUT ON NOTICE to confirm capitalinfusiontoavertalooming loan default,Amazon told FutureRetail(FRL)thatSamara Capital remains interested in buying out the debt-strapped retailer'sbusinessessuchasBig Bazaarfor`7,000 crore. Asked by FRL's independent directors to confirm if it will infuse `3,500 crore into the cash-strapped retailer to enable it to pay its lenders by the due date of January 29, Amazon wrote to them saying FRL should provide its financial details to Samara Capital for the private equity fund to conduct an expedited due diligence. While Amazon is opposed to billionaire Mukesh Ambani's group acquiring businesses of FRL along with other group companies for `24,713 crore,it seemed from We confirm that based on your letter dated Jan 21, 2022, Samara Capital has once again reiterated to us that they remain interested (in) ....the term sheet dated June 30, 2020, signed amongst Samara, FRL and the promoters of FRL, which contemplates a purchase consideration of (`7,000 crore) — AMAZON IN JANUARY 22 LETTER TO FRL INDEPENDENT DIRECTORS the letter that it was open to Samara Capital taking overthe business. Continued on Page 2 NCLATsets aside Srei resolution plan for debt-ridden Deccan Chronicle Holdings THE NATIONAL Company LawAppellateTribunalhasset aside an order of the Hyderabad bench of the National Company Law Tribunal, whichhadapprovedaresolu- tionplanfordebt-riddenDeccan Chronicle Holdings submitted by Srei Multiple Asset Investment Trust (Vision IndiaFund),reportsMithun Dasgupta. ■ Page 12 HOT SPOT Varanasi fast emerging as an agri export hub SANDIP DAS New Delhi, January 23 UTTAR PRADESH’S VARANASI, which is the gateway to Poovanchal region consisting of 17 districts, is fast becoming a buzzing hub for exports of agricultural and processed food products.The setting up of customs clearance and cold room facilities at Lal Bahadur Shastri International Airport aided exports from the religious town, which also has linkages to a robust network of Farmers Producer Organisations ILLUSTRATION: ROHNIT PHORE (FPOs). More than 20,000 tonne of cereals, fruits and vegetables sourced from the farmers in several districts including Varanasi, Mirzapur, Prayagraj and Gorakhpur have been exported to Nepal, Bangladesh, the United Arab Emirates, Bahrain, Qatar, SaudiArabia,the United Kingdom and Australia in the last *% of GDP six months. “Currently, on an average, around three tonne of green peas and green chillies are being exported daily to the Persian Gulf countries from Varanasi airport,” said Shaswat Pandey, CEO, Trisagar Farmers Producer Company, an FPO based in Sant Ravidas Nagar district,which has around 350 farmers as members. Besides,fruits and vegetables are being transported via road to Nepal and Bangladesh. Continued on Page 2 CHENNAI/KOCHI