OPINION, P6 ECONOMY, P2 S SAINI, S HUSSAIN & P KHATRI Farmer indebtedness is a symptom, not the syndrome BACK PAGE, P14 EDITORIAL TAPPING RESERVE FUND FLURRY OF ACTIVITIES Shadow over WTO Ministerial: India has a major stake in reforms being negotiated Unorganised sector workers to get ESIC health benefits Warren Buffett is back with one of his biggest buying sprees in years NEW DELHI, MONDAY, MAY 2, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLVIII NO. 52, 14 PAGES, `10.00 (PATNA `10.00, RAIPUR `10.00) 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 IN THE NEWS Merger of two Shriram NBFCs to be done by Dec IN A bid to fcilitate hasslefree merger of two non-banking financial companies in the Shriram Group- Shriram City Union Finance (Shriram City) with Shriram Transport Finance Co (STFC), a pilot project has been initiated to train employees of Shriram City to cross sell STFC products, reports Sajan C Kumar in Chennai. Shriram City has initiated a pilot project in 40-50 branches and the pilot will be spread to all its branches India-UAE trade agreement comes into force THE INDIA-UAE Comprehensive Economic Partnership Agreement (CEPA) entered into force on Sunday, with both the sides issuing necessary notifications to facilitate the implementation of the free trade agreement (FTA), reports fe Bureau in New Delhi. The CEPA was signed by both the economies on February 18. Chip shortage continues to hit PV sales in April SEMICONDUCTOR SHORTAGE continued to play spoilsport for top passenger vehicle (PV) manufacturers like Maruti Suzuki India and Hyundai Motor India as they witnessed a decline in their wholesale despatches in April in comparison to the year-ago month. However, Tata Motors carried on with its positive momentum to post a growth in wholesale volumes, reports fe Bureau in New Delhi. Maruti's PV wholesale volumes in the domestic market declined 10.2% year-on-year (y-o-y) to 121,995 units in April. FE SPECIALS ■ BRANDWAGON, P9 Retailers flock back to malls Malls are witnessing higher occupancies and lease renewals ■ PERSONAL FINANCE, P7 Rising rates: Debt fund strategy Go for debt funds with lower duration profiles in a rising interest rate scenario ■ eFE, P10 Using digital bridge to reach the world Small businesses are leaning on Facebook and Instagram to sell directly to customers PROJECTTO COME UP IN KARNATAKA BIDS ARE DOUBLE OF `5,600 CR ANCHOR BOOK ISMC to invest Anchor investors in rush for LIC `21,000crore $3 bn in India’s first chip plant BAIJU KALESH & SUVASHREE GHOSH Mumbai, May 1 LIFE INSURANCE CORPORATION of India’s initial public offering has got bids from large investors for twice the size of the anchor book, according to people with the knowledge of the matter. The anchor book of `5,600 crore forthe country’s largest publicofferingof`21,000crorewillbe announced on Monday. Singapore’s GIC and Norway’s sovereign wealth fund are among the anchor investors, the people First major investment decision after roll-out of `76,000-cr PLI scheme FE BUREAU Bengaluru, May 1 INTERNATIONAL SEMICONDUCTOR CONSORTIUM ISMC, a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor, will invest $3 billion in Karnataka to set up India's first chipmaking plant, the state government said on Sunday. The announcement indicates that the incentive structure being put in place by the government to make India a semiconductor hub is beginning to fructify. Intel had recently announced plans to acquire Tower Semiconductor. ISMC's proposed 65-nanometer analog semiconductor fabrication unit is expected to employ 1,500 people directly over seven years,the state government said, adding that another 10,000 jobswill be created in the ancillary ecosystem. The chip makers' consortium has requested for 150 acres of land in Mysuru’s Kochanahalli Industrial area for the unit. Continued on Page 11 ISMC is a JV between Abu Dhabi's Next Orbit Ventures and Israel's Tower Semiconductor ■ The ■ The proposed government aims to come out with a made-in-India chipset by 2024 fabrication unit is expected to employ 1,500 people directly over 7 years BodhiTree to buy strategic stake inAllen Career for $ 600 mn Bodhi Tree Systems, a venture of investor James Murdoch’s Lupa Systems and Indian media executive Uday Shankar, will invest $600 million in Rajasthanbased Allen Career Institute under a strategic partnership. Page 4 ■ Theanchorbookof`5,600cr tobeannouncedtoday forthecountry’slargestIPOof GST collection in April zooms to `1.68 trillion FE BUREAU New Delhi, May 1 MONTHLY GOODS AND Services Tax(GST)collectionshitanall-time high of `1.68 trillion in April (March transactions), indicating efficient plugging of tax evasion,a sustained shift of business to the formal sector of the economy and year-end bunching of tax payments by firms. Continued buoyancy in GST collections for several months in a rowwould help allay the state governments’ concerns about a revenue shock theymight have todeal with once a five-year revenue protection ends on June 30. Continued on Page 11 ■ Singapore’s GIC Pte and Norway’s sovereign wealth fund are among the anchor investors The offering runs from May 4 to 9 for other investors. said, asking not to be identified before an official announcement. LIC didn’t immediatelyrespond to email seeking comment. The LIC IPO aims to price shares between `902 and `949 each. Companies in India have raised about `7,700 crore through IPOs this year.That’s less than half of the almost `23,000 crore raised in the same period in 2021.The offering runs from May 4 to 9 for other investors. Anchorinvestorswhodonotget enough shares during the anchor allotment can separately procure more shares of LIC from the qualified institutional buyers’quota. Alargenumberofglobalpension funds, sovereign funds, private equity funds and domestic mutual funds have already given their investment commitment to LIC, whichwill ensure awide shareholding pattern in LIC. —BLOOMBERG Power crisis unravels fast Energy shortage DEEPA JAINANI & VIKAS SRIVASTAVA Lucknow/Mumbai, May 1 250 (in million EVENASIT'Sincreasinglyclearthat India’s power crisis is only turning worse with every passing day and it hasstarteddisruptinganascenteconomic recovery, the key stakeholders are hamstrung.Many states are finding it difficult to step up their fuel purchases though the coal stocks with their power plants are depleting fast, owing to logistical and financialissues. If the Centre is blaming some states,including Punjab,Rajasthan, Gujarat,Andhra Pradesh and Tamil Nadu,for“notlivinguptotheircommitments,” state governments say coal supplies to their power plants have been grossly inadequate in recent weeks; some are even going slowon coal imports,citing the pro- 200 VAISHALI DAR, SHUBHRA TANDON, MITHUN DASGUPTA & SAJAN C KUMAR New Delhi/ Mumbai/ Kolkata/ Chennai, May 1 UNUSUALLY STRONG HEATWAVEShavecomeasablessing in disguise forcompanies dealing in summer products. Manufacturers of air conditioners, refrigerators,juices,softdrinks, and ice creams seem to have a good going,while most parts of the countryare scorched bythe sun and no respite is seen soon. That such brisk sale prospects are back aftera slowdown of two years due to the pandemic, is an added reason forcompanies to rejoice. Lloyd, a consumer durable brand by Havells India, has ■ Godrej Appliances is expecting robust growth in all cooling product segments this season ■ Havells India's, Lloyd brand has sold a record 2.5 lakh AC units so far 100 50 0 hibitively high landed cost of the fuel,at$250-290/tonne,fourtofive times the year-ago level.Amid this imbroglio,power demand is breaking new records every day and so is the pan-India electricity shortage. The peak demand thatwas met rose to207gigawatt(GW)onApril29,an all-time high, compared with 205 beverages to see higher sales than the last two years SANDIP DAS & NAYAN DAVE New Delhi/Ahmedabad, May 1 ■ Daikin will likely record sales growth of about 20-25% already sold a record 2,50,000 AC units so far and expects strongerdemandinthecoming months.“Due to soaring temperatures, the demand for ACs has reached a record level as compared to previous years” saidAlokTickoo,executivevicepresident,Lloyd. Similarly,GodrejAppliances isexpectingrobustgrowthinall cooling product segments by the end of this season, with 20% growth between AprilJune 2022 versus the pre-pandemic summerof 2019. Continued on Page 11 HEATWAVE CONDITIONS SINCE the middle of March have caused significant damage to the standing wheat crop, especially in Punjab, Haryana,Rajasthan and Uttar Pradesh, all major producers of the staple cereal. Early estimate says that the crop damage would be of the order of 15-20 million tonne,meaning wheat output in 2021-22 crop year (JulyJune) would be around 96-98 million tonne (MT), against ■ Crop damage likely to be of the order of 15-20 MT in 2021-22 ■ Summer crops have also been hit by the heatwaves However, water levels at reservoirs are higher than year-ago levels the second advance estimate of 111.32 MT. Last year's rabi wheat production was a record 109.59MT. Summer crops such as pulses, coarse cereals, oilseeds,vegetables and fruits have also been hit by the heatwaves across most parts of north India and western parts of the country. Estimates of the losses of these crops can be made only later. That water levels at reservoirs are higher than year-ago levels is a respite. THE DEPARTMENT FOR the promotion of industry and internaltrade(DPIIT)will soon launch a new wholesale price index (WPI), with 2017-18 base year and a revamped product basket, to better capture the structural churns in the economy, DPIIT secretary Anurag Jain told FE. “The new index will have many more products, which willbereflectiveofthechanges in the economy. The new base year will help improve the quality and representative character of the index. Since 697 No of products in extant WPI 479 Primary articles Fuel & power 22.62 64.23 Current WPI 13.15 24.83 63.93 New WPI Manufactured items Based on expert group's recommendations, minor changes in products/ weight may be done at the time of final deliberations 11.24 Additional products proposed to be included in new WPI there will be more items, the weight assigned to each of them, in most cases,will drop. Prices will be collected from a larger number of establish- ments as well,” Jain said in an interview. An expert group, set up to submit technical recommendations on the newWPI series, has suggested the inclusion of 479 products, on top of the current 697 products, in the revamped index. Of course, some products in the current WPI series,with 2011-12 base year, will also be dropped and few more new items will likely be added before the index is finalised. HDFC raises lending rates by 5 bps FE BUREAU Mumbai, May 1 Inflationestimates,basedon the current WPI series, were madeavailablefromApril2017. Some of the new products tofeatureintherevampedWPI are electric socket and plugs, electronic integrated circuits, pen-drives, DVD players, lifts, gymnasium equipment, mushroom, watermelon, and medicinalplantslikealoe-vera, isabgol and menthol. The new index is set to assign more weight to food items in the primary articles segment and that of fuel and power may go down almost proportionately. HOUSING DEVELOPMENT FINANCE Corporation (HDFC) on Sunday announced a 5basis points (bps) hike in its retail prime lending rate (RPLR) to 16.1%, to which its floating rate home loans are linked. While the mortgage lender's existing customers will have to shell out more as and when their loans come up for reset, rates on new loans will remain unchanged as new customers will get a 5-bps discount on the RPLR. New loans will continue to be priced between 6.7% and 7.15%. HDFC’s move to raise lending rates for existing customers follows similarhikes in April by State Bank of India (SBI),BankofBaroda(BoB),Axis Bank and Kotak Mahindra Bank. Home loan rates at SBI currentlystart at 6.65% and at ICICI Bank from 6.7%. Rates on new retail loans remain untouched across the system so far. The rate cycle is widely believed to have turned after the Reserve Bank of India(RBI) signalled a hardening in its policy stance as consumer inflation surged in the early months of 2022. A section of analystsnowexpecttheMonetary Policy Committee (MPC) to hike the repo rate by as much as 75 bps in FY22,which could result in a quick uptrend in retail lending rates. Most new retail and small business loan rates are pegged to the repo rate. Continued on Page 11 Continued on Page 11 Continued on Page 11 Rejigged WPI with wider product basket soon Weight (%) Oct 12, 2021 April 29, 2022 Continued on Page 11 INFLATION GAUGE BEING UPDATED BANIKINKAR PATTANAYAK New Delhi, May 1 82 GW on April 28 and 183 GW a year ago. Electricity shortage, which crossedthethresholdof100million units(mu)adayonApril12,skyrocketedto214.12muasofApril29,the worstlevelever.Peakshortageonthe daytoowasveryhighat8,120MW. Crop losses to be large; wheat and vegetables hit the most ■ Ice-cream and 214.12 150 HEATWAVE: BLESSING FOR SOME, CURSE FOR OTHERS Consumer firms make hay unit) New Delhi