OPINION, P6 BACK PAGE, P22 SANDEEP PAREKH Sebi’s pre-filing proposal will help ease of doing business INTERNATIONAL, P8 EDITORIAL TRIBAL LEADER FROM ODISHA SHAREHOLDERS’ GO-AHEAD Agnipath protests show dangers of jobless growth; improving skills imperative for youth Droupadi Murmu is NDA candidate for President Musk's $44-bn deal gets unanimous endorsement from Twitter board NEW DELHI, WEDNESDAY, JUNE 22, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLVIII NO. 96, 22 PAGES, `10.00 (PATNA & RAIPUR `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 52,532.07 ▲ 934.23 NIFTY: 15,638.80 ▲ 288.65 NIKKEI 225: 26,246.31 ▲ 475.09 HANG SENG: 21,559.59 ▲ 395.68 `/$: 78.08 ▼ 0.10 `/€: 82.51 ▼ 0.37 BRENT: $115.50 ▲ $1.37 GOLD: `50,737 ▼ `73 Ruling coalition in survival mode after Shinde’s revolt in Maha THE RULING MAHA Vikas Aghadi, which came to power in Maharashtra in November 2019, plunged into crisis on Tuesday after Shiv Sena leader and state cabinet minister Eknath Shinde revolted against his party on Monday night and showed up in a Surat hotel with over 30 MLAs, report Shubhangi Khapre and Kamaal Saiyed in Mumbai and Surat. Caught napping, chief minister Uddhav Thackeray was battling to save his government, sending aides to Surat to open lines of communication with the rebels. IN THE NEWS $5-trn GDP target possible, absent external shocks IF NEAR-TERM CHALLENGES to the Indian economy, arising mainly from a difficult global situation, are resolved without causing much harm to it, the country's gross domestic product in nominal terms could well cross the $5-trillion mark by 2027-28, if not an year earlier, report KG Narendranath & Prasanta Sahu in New Delhi. LeadSquared turns unicorn with $153-m fundraise SALES AUTOMATION PLATFORM LeadSquared on Tuesday raised $153 million in a Series C funding round led by WestBridge Capital, making it the newest startup to join the unicorn club, reports fe Bureau in Bengaluru. FCI to raise `50k-cr short-term loan from banks in July DUE TO INADEQUATE release of food subsidy expenses from the Centre, the FCI will raise `50,000 crore as short-term loans from banks next month to finance its operations, reports Sandip Das in New Delhi. Special Features NO CASH FLOW RELIEF IF 3% RATE NOT REMOVED Telcos cry foul as spectrum payment floor rate stays Tell DoT abolishing SUC meaningless if floor rate remains KIRAN RATHEE New Delhi, June 21 TELECOM OPERATORS HAVE told the department of telecommunications (DoT) that abolishing spectrum usage charge (SUC) in the upcoming 5G auctions and beyond will be meaningless if the government does not remove the floorrate of 3% on such payments which is applicableoncurrentholdings. The floor was fixed in 2016 to protect government revenues as SUC at that time was lowered as an incentive to participate in auctions. TheoperatorstoldDoTofficials at a pre-bid conference on Monday that the notice inviting applications (NIA) for the Jain Irrigation to merge its global biz with Rivulis in `4,200-cr deal FE BUREAU Pune, June 21 JAINIRRIGATION SYSTEMSon Tuesdaysaidthatitsglobalirrigation business will be merged withTemasek-ownedRivulisin a cash-and-stock deal worth `4,200 crore. The combined entity will have a revenue of $750 million and will be the second largest global irrigation and climate leader. While Temasek will hold 78% in the merged entity,Jain International Business will have a 22% stake worth `1,300 crore (according to the deal value). The cash proceeds will be used by Jain Irrigation to reduce its consolidated debt by around 45% or `2,664 crore, Anil Jain, managing director, Jain Irrigation, said. Around `200 crore from the sale proceeds will come to the India operations. Jain'soverseasdebtincludes all the restructured overseas bonds to the tune of $225 million and complete debt of overseas operating companies, Jain said.Jain Irrigationwill also get to release its corporate guarantee of `2,275 crore to bondholders and lenders. Thedealisexpectedtoclose inthreetosix monthsanddebt repayments would be made afterclosing the deal,Jain said. Continued on Page 2 Key clauses in home loan agreement Know the implications of key clauses in your home loan agreement before signing it ■ Personal Finance, P7 India is primed for the launch of 5G services 5G would improve India’s ranking on mobile speeds, says Doug Suttles, CEO & co-founder of Ookla ■ eFE, P7 ■ The 3% floor rate was fixed in 2016 to protect govt revenues as SUC charges at that time was lowered ■ Govt has abolished SUC in future auctions ■ The idea is that as telcos buy more spectrum their SUC becomes nil on entire holdings ■ But if floor remains the charges will never become nil ■ Telcos say floor removal should have been notified in the NIAfor 5G auctions ■ Currently operators pays SUC ranging between 3-5% of theirAGR ■ Bharti &Vodafone Idea hold a mix of administratively allocated and auctioned spectrum auctions does not mention the removal of the floorrate of 3% SUC levied on their adjusted gross revenue. The removal of the floor rate is required to give effect to the telecom relief package announcedbythegovernment in September 2021, where apart from providing a fouryear moratorium to operators on their AGR and spectrum dues,the government had also said that there would be no Markets rise for the second day SUC on airwaves acquired in future auctions. If the floor is not removed, and operators are asked to pay nil SUC on spectrum bought in 5G auctions, they would have to segregate revenues from different spectrum bands, which is technically not possible.In the past,a DoT committeehassaidthatthesamespectrumbandsareusedtoprovide different services, so segregation is not possible and, if allowed, there's a high chance of arbitrage with operators showing revenues in bands where the SUC is lower or zero. For instance, 4G spectrum currentlywith operators will be used for 5G services once they acquire more spectrum in the latter band in the upcoming auctions.“Howisitpossiblethen to identify which spectrum, acquiredwhen,isbeingusedfor providing which services,” industryexecutives asked. Continued on Page 2 Future Retail asks NCLT for a new RP YOOSEF KP Mumbai, June 21 Sensex RAJESH KURUP Mumbai, June 21 BENCHMARK INDICES ROSE for the second straight day on Tuesday,asinvestorslappedup beaten down quality stocks on firm global cues. Softening crudeoilpricesfurtherboosted the investor sentiment. Barring China, most Asian indices gained in Tuesday’s trade, with Taiwan TAIEX and Hang Seng climbing 2.4% and 1.9%, respectively. While the Nikkei 225 gained 1.8%, Korea’s KOSPI and Jakarta Compositeroseabout1%each. Reliance Industries, along with Infosys and Tata Consultancy Services, contributed over a third of the gains on the Sensex on Tuesday. While the Sensexadded934.23pointsor 1.8% to settle at 52,532.07 points, the broader Nifty50 closed 288.65 points or 1.9% higher at 15,638.80. Both the indices marked their best single-day gains since May 30. “Metal, state-owned banks and technology stocks witnessed bargain hunting after sufferingheavylosseslastweek on fears of aggressive rate hikes,”said Shrikant Chouhan, head of Equity Research (Retail),Kotak Securities. Among the Sensex pack, Titan surged close to 6% on Tuesday, followed by State Bank of India andTata Consultancy Services, each gaining anywhere between 3% to 4%. Shares of Titan have come off about 30% over the last three 53,000 52,532.07 52,800 51,897.60 FUTURE RETAIL (FRL),against which Bank of India has filed insolvency proceedings, on TuesdaytoldtheNationalCompany Law Tribunal (NCLT) that theproposedresolutionprofessional (RP) should be changed due to a conflict of interest. The proposed RP— Deloitte — is also an auditor for certain otherFutureGroupcompanies, hence a new RP should be appointed,FRLcounselShyamKapadiasaidinthecourseofahearing to admit FRLforinsolvency. Earlier, in April, FRL’s lenders selectedVijaykumarIyer,backed by Deloitte India, as the RP for bankruptcyproceedings. Intra-day, June 21 52,600 52,400 52,200 Previous close: 51,597.84 52,000 51,800 51,600 Open Close Nifty50 Intra-day, June 21 15,638.80 15,750 15,650 15,467.15 15,550 Continued on Page 2 15,450 Previous close: 15,350.15 15,350 15,250 Open Close months through Friday, whereas stocks of SBI and TCS have corrected 19.7% and 23.1%,respectively,fromtheir recent highs. The relentless selling by foreign portfolio investors continued even on Tuesday. While the FPIs sold $345.94 worth of shares, local institutional investors bought $392.71 million, provisional data on exchanges showed. Continued on Page 2 FIGHTING FIT While Prime Minister Narendra Modi (left) celebrated the International Day of Yoga in Mysuru, finance minister Nirmala Sitharaman led a session in New Delhi GoM proposes removal of many GST exemptions PRASANTA SAHU New Delhi, June 21 ONTABLE FOR REMOVAL A GROUP OF ministers (GoM) reviewing goods and services tax (GST) rates has proposed removal of exemptions on a host of services, including for stay in relatively cheaper hotel rooms,hospital rooms above a tariff threshold and services provided by financial sector and food safety regulators. In line with a mandate to raise the revenue neutral rate (RNR) from a little above 11% now, the group headed by Karnataka chief minister Basavaraj Bommai also proposed raising GSTon electronics waste steeply from 5% to 18%. Also, a rate hike is proposed for goods and services relatedtoexploration of petroleum and coal-bed methane — currently taxed at the lowest GST slab of 5%. The GoM also proposed removal of exemptions for reinsurance of exempted insurance schemes such as weather-based crop insurance Hotel rooms with daily rent below `1,000 Hospital rooms with daily rent of `5,000 or more Proposed rate 12% 5% without ITC Reinsurance of exempted insurance schemes To be decided Services provided by RBI, Sebi and IRDAI to regulated entities To be decided Services by FSSAI to food business operators To be decided Services by GSTN to government To be decided RATE INCREASE PROPOSED ■ Eletronic- waste — from 5% to 18% ■ Exploration activities of goods related to petroleum & coal bed methane: To be raised from 5% now schemes and the GSTNetwork services to the government. A few proposals aimed at correcting residual cases of inverted duty structures have also been made. These changes are proposed even as the GoM isyet to firm up its views on GST slabs restructuring. Continued on Page 2 Mamaearth eyes $3-bn valuation in IPO M SRIRAM Mumbai, June 21 SEQUOIA CAPITAL-BACKED SKINCAREstartupMamaearth is in talks to raise at least $300 million in a planned IPO next yearandisseekingavaluationof around $3 billion,three people with direct knowledge of the company's plans told Reuters. Founded in 2016, Mamaearth has become popular in India with its range of “toxin-free” products such as face washes, shampoos and hair oils.It competeswithUnilever’sIndiaunit, ■ Sequoia ■ In early- stage talks to raise up to Capital-backed company was last valued at million in its IPO ■ IPO plans $1.2 billion $350 ■ India skincare startup competes with Unilever, P&G HindustanUnilever,andProcter & Gamble in the booming personal care industry. The company was last val- come during broader rout in capital market ued at $1.2 billion in January this year when it raised fresh fundsfrominvestors,including Sequoia and Belgium’s Sofina. Mamaearth is targetting a valuationofaround$3billion— 10-12 times forward earnings based on sales growth and future revenue potential,a person briefed on the discussions said. It plans to file draft regulatory papers by the end of this year, said sources,who declined to be named as the plan is private. Two of those sources said it is in early-stage talks to raise at least $300 million in its IPO,with a third source pegging the numberat $350 million. Continued on Page 2 CUSTOMISED EMAIL SERVICE, OTHER WORKPLACE APPS NO LONGER FREE Google says it’s time for longtime small-business users to pay up NICO GRANT June 21 WHEN GOOGLE TOLD some small businesses in January that they would no longer be able to use a customised email service and other workplace apps for free, it felt like a broken promise for Richard Dalton, a longtime user who operates a scholastic test-prep company in Vancouver, British Columbia. “They’re basically strongarming us to switch to something paid after they got us hooked on this free service,” said Dalton, who first set up a Google work email for his business, Your Score Booster, in 2008. Google said the longtime users ofwhat it calls its G Suite legacy free edition, which includes email and apps like DocsandCalendar,hadtostart paying a monthly charge,usually around $6 for each business email address.Businesses that do not voluntarily switch to a paid service byJune 27will be automatically moved to one. If they do not pay by August1,theiraccountswill be suspended. While the cost of the paid service is more of an annoyance than a hard financial hit, small-business owners affected by the change say they have been disappointed by the ham-handed way that Google has dealt with the Longtime users of G Suite legacy free edition had to start paying a monthly charge ■ Businesses that do not voluntarily switch to a paid service by June 27 will be automatically moved to one G Suite legacy free edition includes email and apps like Docs and Calendar process. They cannot help but feel that a giant companywith billions of dollars in profits is squeezing little guys — some of the first businesses to use Google’s apps for work — for ■ If they do not pay by August 1, their accounts will be suspended just a bit of money. “It struck me as needlessly petty,” said Patrick Gant, owner of Think It Creative, a marketing consultancy in Ottawa, Ontario.“It’s hard to feel sorry for someone who received something for free for a long time and now are being told that they need to pay for it. But there was a promise thatwas made.That’s what compelled me to make the decision to go with Google versus other alternatives.” Google’s decision to charge organisationsthathaveusedits apps for free is another example of its search for ways to get more money out of its existing business, similar to how it has sometimes put four ads atop search results instead of three and has jammed more commercials into YouTube videos. In recent years, Google has more aggressively pushed into selling software subscriptions to businesses and competed more directly with Microsoft, whose Word and Excel programs rule the market. Aftera numberof the longtime users complained about New Delhi the change to a paid service, an initial May 1 deadline was delayed.Google also said people using old accounts forpersonal rather than business reasons could continue to do so for free. But some business owners said that as they mulled whether to pay Google or abandon its services, they struggled to get in touch with customer support. With the deadline looming, six smallbusiness owners who spoke to The New York Times criticised what theysaidwere confusing and at times vacillating communications about the service change. Continued on Page 2