OPINION, P6 COMPANIES, P4 STEPHEN S ROACH US Fed is far behind curve on controlling inflation INTERNATIONAL, P8 EDITORIAL SCHEME BOOST BYOB BACKLASH ‘Ban GM food’ demand unreasonable, but the regulatory landscape must be founded on scientific rigour TKM sees auto PLI helping industry become globally competitive, self-reliant UK PM Johnson refuses to resign over lockdown parties NEW DELHI, THURSDAY, JANUARY 27, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 283, 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 *SENSEX: 57,858.15 ▲ 366.64 *NIFTY: 17,277.95 ▲ 128.85 NIKKEI 225: 27,011.33 ▼ 120.01 HANG SENG: 24,289.90 ▲ 46.29 *`/$: 74.78 ▼ 0.21 *`/€: 84.40 ▲ 0.07 BRENT: $89.87 ▲ $1.67 *GOLD: `48,687 ▲ `37 *January 25 EXTRA PUSH IN THE NEWS Jio-bp opens EV charging hub in Delhi FARM FACTOR ● CRUDE SHOCK Capex outlay in Fasal Bima cover FY23 pegged at sees a big drop `10.5 lakh crore A JOINTVENTURE of Mukesh Ambani's RIL and energy supermajor BP has opened one of the country's largest EV charging hubs in Delhi, as the duo scale up the fuel retail network, offering multiple fuel choices including EV charging infrastructure, reports PTI. Capex by Centre, CPSEs, NHAI, Railways Spend by the Centre, CPSEs to be up about 9% over FY22 BE TCIL's 30% stake in Bharti Hexacom valued at `8,900 cr More states opt out citing cost; wheat farmers perceive low risk to crops PRASANTA SAHU New Delhi, January 26 CAPITAL EXPENDITURE BY the Centre, PSEs owned by it and entities like NHAI and the Railways will likely be estimated at around `10.5 lakh crore in the next financialyear, up about 9% over such expenditure estimated (BE) in the current financial year, accordingtoinformationgatheredby FE from different sources. Most of this extra central publiccapex,however,willlikely beroutedviaBudget.TheCentre via Budget may invest 18% more in FY23 than in FY22 at around `6.53 lakh crore to retain its budgetarycapex at 2.5% of GDP as in FY22 (assuming 12.5%nominalGDPgrowthfor nextyearoverthe advance estimate forthe currentyear). In the FY22 BE,the government gave a thrust to capex and increased its share in total expenditure to 15.9% from 12% in FY21. With this, Centre’s budgetary capex against GDP rose from 2.15% in FY21 THE GOVERNMENT HAS valued the 30% stake of state-run TCIL in Bharti Hexacom at around `8,900 crore, based on a formula suggested by SBI Capital Markets, reports PTI. Bharti Airtel holds a 70% stake in Bharti Hexacom, which provides telecom services in Rajasthan and North-East. Adani Wilmar’s `3,600-cr IPO opens today EDIBLE OIL MAJOR Adani Wilmar will on Thursday hit the capital market to raise up to `3,600 crore via its IPO, reports PTI. The public issue, comprising fresh equity shares, will open for subscription on January 27 and close on January 31. Price band is `218-230 per share. SANDIP DAS New Delhi, January 26 THE PRADHAN MANTRI Fasal Bima Yojana (PMFBY),the crop insuranceschemejointlysponsored by the Centre and states, is facing the twin problems of many state governments ceasing to fund it and wheat farmers in many states losing interest in the scheme, as crop failures have become rarer due to improved irrigation. While last kharif (2021) and rabi (2020-21) seasons saw a spurt in both the number of Special Features Early signs of an Indian Web 3 ecosystem India is seeing a Web 3 ecosystem forming silently with active participation from infrastructure providers, platform creators and policy makers who aim to set global standards ■ eFE, P7 Lenovo Smart Clock 2:More than just a timekeeper At `6,999, Lenovo Smart Clock 2 lets users manage their schedule, enjoy music, control other smart devices and more, thanks to Google Assistant making it your true smart buddy ■ Gadgets, P7 QuickPicks Covid impact: Budget to go ‘paperless’ for a second time FOR A second straight year, the annual Budget will go “paperless”, as the government has decided to desist from printing the copies over safety issues posed by Covid, an official source told FE, reports fe Bureau in New Delhi. Instead, the documents will be made available mostly digitally, and only a few hard copies will be printed. This is because over 100 people are usually required to stay for around a fortnight at the printing press in the basement of the North Block until the Budget is presented. PAGE 2 Each Covishield, Covaxin dose likely to be capped at `275 THE PRICE of Covishield and Covaxin, the Covid vaccines which are expected to soon get regular market approval from India's drug regulator, is likely to be capped at `275 per dose plus an additional service charge of `150, reports PTI. According to sources, the National Pharmaceutical Pricing Authority has been directed to start working towards capping the price to make them affordable. As of now, Covaxin is priced at `1,200 a dose while Covishield costs `780 in private facilities. PAGE 5 Apple tops China for first time in six years after Huawei fades APPLE WAS China’s top-selling smartphone brand in 2021’s final quarter, industry research showed, taking top spot in the world’s largest mobile market for the first time since 2015, reports Bloomberg. The iPhone 13 helped Apple out-sell Chinese rivals Vivo and Oppo after Huawei plummeted down the rankings, Counterpoint Research said in a report Wednesday. Apple’s sales in the country surged 32% even while the overall domestic market shrank 9%. PAGE 8 7 (` crore) 6 5 4 6.53 5.54 4.25 4 4.1 4 3 2 1 0 FY21 FY22 FY23 (BE) (Likely) Centre (Budget) Off Budget (CPSEs, NHAI, Railways etc) Fasal Bima farmers and crop areas covered under the scheme,and also the sums insured due to the uncertainties caused by the pandemic, very low claim to premium ratios were reported in boththeseasons—17%(provisional) of summer crop and 40% forwintercrop. Thishashadatellingimpact on the PMFBYcoverforthe rabi crop that has just been sown. Withmanystates,includingGujarat,Bihar,TelanganaandWest Bengal,droppingout,theenrolment under PMFBY for 202122 rabi crop fell 12% to around 1.7crorecomparedtotheprevious year.In terms of sum insured, the fall has been much sharperat52%—`39,232crore in 2021-22 rabi season against `82,378crore ayearago. Continued on Page 2 2018-19 2019-20 2020-21 2021-22* No. of farmers enrolled (crore) 2.32 1.9 1.94 1.7 Area insured (lakh hectare) 207 170 167 82 (for rabi crops) to 2.5% in FY22BE. Of course,the Centre has to acceleratespendinginQ4FY22 to actually achieve that level of capex, as growth was just 14% onyeartill November,against a requiredrateof30%toachieve annual target. Sum insured (` crore) Claim to premium ratio % 92,651 75,822 82,378 39,232 115.2 70 39.9 * *provisional Continued on Page 2 Oil nudges $90 per barrel, at 7-year high Brent ($/bbl) 89.08 105 90.21 90 75 VALUE-CREATION ‘Vedanta demerger call by March end’ After spinoff, London-based parent will comprise five listed entities 60 45 PRESS TRUST OF INDIA New Delhi, January 26 30 15 0 Oct 10, 2014 Source: Bloomberg Jan 26, 2022 ALEX LAWLER London, January 26 OIL ROSE TO a seven-year high close to $90 a barrel on Wednesday,supportedbytight supply and geopolitical tensions in Europe and West Asia that raise concerns about further disruption. US President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine. On Monday, Yemen's Houthi movement launched a missile attack on a United Arab Emirates base. “Anxiety over potential supply disruptions in West Asia and Russia is providing bullish fodder for the oil market,”said Stephen Brennock of oil broker PVM. Continued on Page 2 METALS AND MINING group Vedantawillannouncethecontoursofaproposaltospinoffkey businesses into separate listed companies by March-end, its chairman Anil Agarwal said, as helookstosimplifyandstreamline the corporate structure to createvalue.Whilethezincunit isalreadyhousedinalistedsubsidiary, the plan is to demerge the aluminum, iron and steel, and oil and gas businesses into standalone listed entities. Thiswillunlockvalueforall stakeholders as well as create businesses that are positioned ■ Vedanta looks to simplify and streamline the corporate structure to create value ■ Metals & mining group's zinc business is already housed in a listed subsidiary ■ Plan is to demerge aluminum, iron & steel, and oil & gas businesses into standalone listed entities ■ To create distinct investment profiles to attract deeper investor bases — ANIL AGARWAL chairman, Vedanta Resources bettertocapitalise ontheirdistinct market positions and deliver long-term growth and enable strategic partnerships, he told PTI in an interview. Continued on Page 2 Essar and Progressive Energy JV to help drive energy transition in UK ESSAR GROUP ON Wednesday announced a new joint venturewithProgressiveEnergy to build the UK’s largest hydrogen hub at an investment of 1 billion pounds, reportsPTI.EssarOilUKholds a 90% stake inVertex Hydrogen,whileProgressiveEnergy has the remaining 10%.Vertex will deliver the first lowcarbonhydrogenplanttolead the UK’s hydrogen production economy. ■ Page 4 LOW DEMAND Two-wheeler inventory rises to 60 days in Jan SAJAN C KUMAR Chennai, January 26 INVENTORIES OF TWOWHEELERS with dealers have doubled in just a month's time.From 30 days in December, stocks have shot up to 60 days in January and one leading manufacturer is sitting on 90 days of inventory. With demand weak, especially for entry-level vehicles, which comprise 75% of total retail sales, dealers are hoping for slower despatches from manufacturers. “The inventory at the dealers end is at alarming levels and all of us need to talk to our original equipment manufacturers so that the same can be controlled. FADA, through its monthly press release, is alreadyhighlighting this issue to the entire auto industry ■ Retail sales of 2-wheelers declined 20% y-o-y in December CELEBRATIONS EVERYWHERE ■ Wholesale ■ Fuel prices declined by 11% during the month have risen by 34% in last one year ■ Poor demand as ownership cost has risen by 30% since April 2019 community and especially to our two-wheeler principals. Continued on Page 2 Coal min via CPSEs logs 28% capex growth THE GOVERNMENT ON Wednesdaysaidtheministry ofcoal,throughitsCPSEs,has registered a 28.33% yearon-year growth in capex achievement at `12,605.75 crore for the period ended December 2021. This capex The 73rd Republic Day was celebrated with great fervour across India with the largest ever aerial display seen above Rajpath with 75 aircraft taking part in the majestic flypast and women daredevils from ITBP performing gravity-defying motorcycle stunts at the Rajpath parade among the highlights of the day on Wednesday achievement is also 75% of the ministry’s annual target, the statement added. The ministry of coal, through its CPSEs, had registered a capex achievement of `9,822.28 crore a year ago. ■ Page 2 ● GLOBAL ELITE ‘TCS is second-most valuable IT services brand globally’ PRESS TRUST OF INDIA New Delhi, January 26 ■ Infosys is at the TATA CONSULTANCY SERVICES(TCS)hasbecomethesecond-mostvaluable brand in the ITservices sectorglobally,while Infosys and four other Indian tech majors have firmly established theirposition among the top 25 IT services brands tally, third spot with Wipro at 7th, HCL (8th), Tech Mahindra (15th) and LTI (22nd) in top 25 ■ All six Indian firms feature among top 10 fastest-growing IT Services brands over 2020-2022 according to Brand Finance. Following TCS and Infosys (thirdspot),therearefourmore ■ Accenture retains the title of world's most valuable IT services brand Indian brands now firmly established among the global elite – Wipro (7th), HCL (8th), Tech Mahindra (15th) and LTI (22nd), as per the Brand Finance IT Services 25 2022 report. All six Indian brands feature among the top 10 fastest-growing IT Services brands over the course of 2020-2022, the brand valuation firm added. Continued on Page 2 UKRAINE TENSION Biden’s big test: Proving he can rally allies against Putin AAMER MADHANI & ZEKE MILLER Washington, January 26 US PRESIDENT JOE Biden’s effort to rally support, both at home and abroad, ahead of a potential Russian invasion of Ukraine is just the latest big test of his ability to bridge ideologicalgapsandbalancecompeting interests to build effectivecoalitions.Hisrecordsofar as president suggests it’s no sure thing. Biden is trying to pull off the kind of alliance on the international front that has eluded him on his domestic agenda as he faces defeats on voting rights and his signature $2.2-trillion domestic and climate spending Bill. Now,he faces a complicated and globally more dangerous task: Keeping the West unified as it faces what White House officials say is an increasingly likely further invasion of UkrainianterritoryorderedbyRussianPresidentVladimirPutin. The pileup of difficult moments is providing a major ■ Biden is trying to pull off the kind of alliance on the international front that eludes him on his domestic agenda ■ Stares a complicated and globally more dangerous task: Keeping the West unified He needs to bridge ideological gaps and balance competing interests to build effective coalitions ■ Potential Russian invasion of Ukraine is just the latest big test of his ability testofthetwinpillarsofBiden's 2020 candidacy: That he could get things done competently at home and restore America's standingintheworldafterDonaldTrump'svolatilefouryearsin theWhite House. “Startingwiththemessyend of thewarinAfghanistan in the late summer, the upsurge in Covidcasesintothefall,overlaid by economic concerns of inflationandlaborshortagesandhis issues with his legislative agenda, Biden's found himself with a weary American public New Delhi who are seeing a number of unfulfilled promises,” said Christopher Borick, director of the Institute of Public Opinion atMuhlenbergCollege.“Thesituation in Ukraine presents anothertestofhiscompetency.” Biden already has seen his public support dragging. Only about a quarter of Americans have significant confidence in him to effectively manage the military or promote US standing in the world. Continued on Page 2
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