Setback For Future Group As Delhi HC Halts Ril Deal Centre Not To Infuse Equity Into Bad Bank: Panda

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WEDNESDAY, FEBRUARY 3, 2021

SETBACK FOR FUTURE GROUP AS CENTRE NOT TO INFUSE EQUITY
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DELHI HC HALTS RIL DEAL uP1 INTO BAD BANK: PANDA uP1
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mint primer
QUICK EDIT
Centre bets big The PF
on disinvestment perplexity
as a growth tactic For India’s salaried, it’s often an
achievement to do one’s own
tax arithmetic. After Monday’s
BY JAGADISH SHETTIGAR & POOJA MISRA budget, many of our achievers
may be tempted to throw their
Disinvestment is a strategy through which the government gives up
either a part of or full equity holding of PSUs. Privatization opens up hands up. Employees will have
business opportunities to the private sector, while disinvestment aims to cough up tax on the interest
to strengthen the management by adding private talent. Mint decodes earned on their provident fund
(PF) contributions in excess of
Maximizing value ₹2.5 lakh annually. The idea is
The government has set an ambitious ₹2.1 trillion disinvestment target for not just to raise revenue, but
FY21. The funds garnered will be utilized to develop infrastructure projects and also deter people from stuffing
not just close the revenue deficit gap. their retirement kitties just to
Government's disinvestment targets as against actual (in crore) Actual Target
earn interest at a rate higher
250,000
than inflation in financially
200,000
repressive times.
It isn’t clear if the tax will have
150,000 to be paid during the year or at
the time of withdrawal. Either
100,000 way, it complicates the tax cal-
culations of those impacted.
50,000 Last year, the government had
slapped a tax on the employer’s
0
2009-10 2020-21 share of PF deposits in excess of
Source: Dipam ₹7.5 lakh. Shareholders, mean-
SARVESH KUMAR SHARMA/MINT while, had to scramble to track
+ What is the agenda How will it impact dividends that became taxable.
1 behind disinvestment?
Disinvestment helps to reduce the
2 the economy?
India’s fiscal deficit for 2020-21 is
To ease income tax compliance,
the Centre offers individuals
fiscal burden on the exchequer for 9.5% of GDP. As such, funds forms with pre-filled income
financing PSUs. It improves access garnered from disinvestment of and tax liability details. While
to public finances by expanding PSUs will help finance the this is welcome, no tax system
share ownership base, funds widening fiscal deficit gap, should be so complex that it
development programmes and especially in the medium term, bewilders taxpayers. Everyone
growth prospects of the country finance large scale infrastructure
should be aware of what she or
and depoliticizes non-essential development and social welfare
services. PSUs that were meant to programmes, and enable retiring he owes the government since
be pillars of economic growth have of government debt. It will also it’s against the law not to pay up.
ended up being more of a strain on lead to a competitive environment The latest PF imposition ought
government resources because of that will help lower prices and to be reconsidered.
their inefficiency and low returns. better product quality. The
The strategic sale of ownership in proceeds from the stake sale will
PSUs will help to spur competition provide funds for infrastructure
and bring about market discipline. development. Unlocking of key
It will induce optimization of
government resources to deliver
sectors will help in attracting
sectoral investments and creating
MINT METRIC
maximum returns for the country. value via private competencies. by Bibek Debroy
A one-time modelling nerd

3 Why should profit-making
public-sector units be sold?
Role of the government is to act as a
Is puzzled at behaviour of the herd.
facilitator and not be in the business of
He averred with impunity
making business. Disinvestment of a That before unlock and immunity,
profit-making public sector undertakings
will help the Union government extract
Millions of Indians would be interred.
maximum value. Besides, the private
sector is also not keen on acquiring loss-
making PSUs with their massive debt and
employee liabilities. QUOTE OF THE DAY
To a developing country already
What are the multiple How are the sale
4 methods available?
The methods followed for
5 proceeds utilized?
Successive governments have
struggling with the impact of
covid, on top of that to pay for
disinvestment are public offer, been resorting to disinvestment
strategic sales, buybacks, sale to with different goals. The United
the vaccine and for the services
employees, ETFs and CPSE to Front government used revenue to get it applied, is going to be
CPSE sale. After 2004, most for social welfare. The Vajpayee
disinvestment has been done via a regime used the money for retiring
very significant.
public offer instead of the auction government debt, restructuring
method. Strategic sale method PSUs. The UPA government’s
wherein control of the PSU is objective was to bridge fiscal
transferred to a private entity was deficit. The NDA leadership, aims
adopted in 1999-2004. Buybacks to utilize the proceeds to develop MARK SCHNEIDER
and ETFs are the more recent infra that will have a multiplier CHIEF EXECUTIVE
routes of divestment. To ensure effect on the economy and not just OFFICER, NESTLE
transparency, the inter-ministerial close the revenue deficit gap.
group overseeing the process Jagadish Shettigar and Pooja Misra
appoints advisers. are faculty members at BIMTECH
m MINT SHORT
SpaceX plans ‘all-civilian’ trip into Earth’s orbit

REUTERS
AFP side him...to individuals from the
feedback@livemint.com general public who will be announced in
WASHINGTON the weeks ahead.” Launch of the Dragon
spacecraft is being targeted for “no ear-
S
paceX said that it’s aiming to lier than the fourth quarter of this year”,
launch this year the first all-civilian the firm said. One seat will go to a worker
mission into Earth’s orbit, led by a from St. Jude Children’s Research Hos-
tech billionaire who plans to raffle off pital, which treats childhood cancers
one of the spots aboard the craft. Entre- Billionaire Jared Isaacman will be joined and pediatric diseases, and the second is
preneur Jared Isaacman is to be joined by 3 novice astronauts for the journey. to be drawn from those who enter the
by three other novice astronauts for a raffle and are encouraged to donate to
multi-day journey into space, including space flight,” according to a website ded- the hospital. A third will be picked by a
one lucky winner of a drawing. “It’s a icated to the mission. SpaceX, the com- panel of judges from entrepreneurs who
once-in-a-lifetime adventure: a journey pany started by Elon Musk, said Isaac- use an e-commerce tool from Isaac-
into outer space on the first all-civilian man is “donating the three seats along- man’s company, Shift4 Payments.
X
T
U RA L E
O
Y SV
N E W m
Mint Lite
Stories, opinions, news and views that matter, from around the world
THE WORLD’S democracies would risk pushing Myanmar into the arms of China if their response to the coup closes
channels for communication with the South-East Asian country’s powerful generals, Japan’s deputy defence minister said
on Tuesday. Myanmar’s army seized power on Monday, declaring a state of emergency, and detained elected leader Aung
San Suu Kyi along with other government officials, having accused her National League for Democracy party of winning
a landslide victory in the 8 November vote through “election fraud”. For more updates, here’s Mint Lite
REUTERS
Biden’s stance on asylum seekers

PRESIDENT JOE Biden’s administration has asked the US
Supreme Court to cancel upcoming oral arguments and delay
further action in two pending appeals that were filed by Donald
Trump over US-Mexico border wall funding and the so-called
“remain in Mexico” asylum policy. The US government says it
will not be making routine immigration enforcement arrests at
covid-19 vaccination sites. The vaccination sites will be
considered “sensitive locations” and generally off limits for
enforcement actions, the Department of Homeland Security
said. But data show that the Biden administration has deported
hundreds of immigrants in its early days despite his campaign
pledge to stop removing most people in the US illegally at the
beginning of his term. Meanwhile, Biden intends to continue
pushing for a large pandemic relief bill, even if he has to bypass
Senate Republicans, his press secretary said.
REUTERS
Inflation numbers flicker in Asia

POCKETS OF inflation are flickering across some parts of Asia
and fading in others, impacting central banks’ scope to further
support economies in a region that’s leading the recovery from
the pandemic, reports Bloomberg. Philippine inflation hit a
near-two-year high of 3.5% in December, driven by a sharp rise
in food prices. Successive typhoons in the fourth quarter and
the continued spread of African swine fever have hit the
country’s food stocks, whose supply chains were already under
strain from local lockdowns. Indonesia’s inflation has taken a
more benign path, though the six-month high in December did
put some economists on alert that it could start cutting into the
central bank’s policy space. New Zealand inflation was firmer
than economists expected, adding to signs the central bank may
not need to cut interest rates any further. Consumer prices rose
1.4% from a year earlier, matching the third-quarter reading.
BLOOMBERG
India’s fiscal deficit target

INDIA’S FISCAL deficit target in the near-term is
+ higher than expected and medium-term consolidation
is at a more gradual pace than anticipated, said Fitch
Ratings in its comments on the just unveiled Union
Budget for the financial year beginning 1 April. India,
which has often complained that its sovereign credit
ratings by agencies such as Fitch do not reflect the
economy’s fundamentals, put the fiscal deficit at 9.5%
of the gross domestic product (GDP) in the current
fiscal ending 31 March against a planned 3.5%. For the
next 2021-22 fiscal, the deficit was put at 6.8% of the
GDP. The budget presented on Monday forecasts
wider near-term deficits and a more gradual pace of
consolidation than anticipated, reaching 4.5% only by
FY26.
REUTERS
China’s ‘Red Line’ warning

CHINA’S TOP diplomat warned the US not to cross the
country’s “red line”, in a pointed speech that pushed back
against early moves by President Joe Biden to press Beijing on
human rights. Yang Jiechi said in a video address to a New
York-based US-China group that the two sides “stand at a key
moment” to rebuild ties and cooperate after Biden’s
inauguration. But he placed the onus on the US to repair the
damage caused by the “misguided policies” of former president
Donald Trump. The speech to the National Committee on US-
China Relations represented Beijing’s most high-profile appeal
to an American audience since Biden took power on 20
January. Chinese President Xi Jinping was among the last world
leaders to congratulate Biden on his election victory over
Trump in November, and the two men have yet to speak after
the inauguration.
Prehistoric signs revealed in teeth

PREHISTORIC TEETH unearthed at a site in Jersey reveal
signs of interbreeding between Neanderthals and our own
species, scientists say. UK experts re-studied 13 teeth found
between 1910 and 1911 at La Cotte de St Brelade in the island’s
south-west, reports BBC. They were long regarded as being
typical Neanderthal specimens, but the reassessment also
uncovered features characteristic of modern human teeth. The
teeth may represent some of the last known Neanderthal
remains. As such, they might even yield clues to what caused
the disappearance of our close evolutionary cousins. The
Neanderthals evolved around 400,000 years ago and inhabited
a large area from western Europe to Siberia. They were typically
shorter and stockier than modern humans, with a thick ridge of
bone overhanging the eyes. They finally disappeared around
40,000 years ago, just as modern humans were settling in.
Curated by Sohini Sen. Have something to share with us?

Write to us at feedback@livemint or tweet to @shohinisen
PEANUTS by Charles M. Schulz
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02 WEDNESDAY, 3 FEBRUARY 2021
AHMEDABAD
PLAIN
FACTS
Dissecting the health spend boost

Much of the increased spending will go towards preventive aspects of healthcare, with the health ministry by itself not gaining much even after covid
Arjun Srinivas gets, this goes up only to Chart 1 Chart 2
howindialives.com around 4% of GDP, shows
World Health Organization
Health spending boost in FY22 will come primarily from Barring one bump, central expenditure on health in
sectors dealing with preventive aspects of healthcare relative terms has remained constant in the past decade
I
n her budget speech, (WHO) data for 2018.
finance minister Nirmala This was more than neigh- Allocations in current and next fiscal year (in cr) Spending by central ministry of health and family welfare (in %)
78,866
Sitharaman announced a bours Pakistan and Bangla- Department of health and family welfare 71,269
2.5
137% increase in alloca- desh, but less than China (5%) 17,024 2
Department of drinking water and sanitation
tions on “health and well- and developed countries such 60,030 2 2.12
being” for 2021-22, to ₹2.24 as the UK (10%) and the US Finance Commission grants for water and sanitation 0 As a share of total
36,022
trillion. Embedded in that dec- (17%). 1.5 central expenditure
laration was a definitional This puts India at 179 out of Covid vaccines 0
35,000
change: it included funds for 189 countries in terms of the Finance Commission grants for health 0
13,192 1
sectors with a smaller, indirect priority given to health in pub- As a share of GDP
2,322
Ministry of AYUSH
intersection with health, nota- lic spending, said the govern- 2,970
2020-21 (RE)
0.5 0.3 0.33
bly drinking water and sanita- ment’s recent Economic Sur- 2021-22 (BE)
Nutrition* 600
tion. This broader definition vey, in a chapter titled ‘Health- 2,700
puts additional emphasis on care takes centrestage, finally!’ Department of health research 4,062 *Represents expenditure on the National Nutrition Mission. 0
2,663 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 (RE) FY22 (BE)
preventive aspects of health- The chapter said this put India
care, which is where much of in the league of donor-de- Chart 3 Chart 4
the hiked allocation will go to pendent countries such as The ministry of health lags the overall Allocation to insurance-oriented schemes doubled this
(see chart 1). Haiti and Sudan, government in capital spending year, but the National Health Mission didn't gain much
However, There is a need and well short of Share of capital expenditure in total expenditure (in %) All figures in cr
other fundamen- to prioritize peers. Ministry of health and
Centre family welfare RSBY and PMJAY NHM
tal aspects of greater capital But, the budget
healthcare have numbers show 2009-10 11 3 2016-17 1,380 22,870
expenditure to 2010-11 13.1 4.1
not received the that the health
same focus, even
enable India’s ministry’s alloca- 2011-12 12.2 4.1 2017-18 505 32,000
after a pandemic long-term health tion as a share of 2012-13 11.8 4.8
tested the entire infrastructure total spending in 2013-14 12 4.3 2018-19 2,224 31,502
system for the next fiscal is 2014-15 11.8 2.8
months together. set to be lower 2015-16 14.1 2.6
2019-20 3,257 35,155
For instance, the National than even the pre-pandemic 2016-17 14.4 3.1
Health Mission, a flagship level of 2019-20. As a share of 2017-18 12.3 5.8
2020-21 (RE) 3,129 35,554
healthcare scheme, has seen a GDP, it will be nearly the same 2018-19 13.3 4.3
mere 4% increase in alloca- (see chart 2). 2019-20 12.5 2.7
2021-22 (BE) 6,401 37,130
tions. The launch of the Prad- The pandemic has under- 2020-21 (RE) 12.7 5.4
han Mantri AtmaNirbhar scored the need for invest- 2021-22 (BE) 15.9 3.5 RSBY: Rashtriya Swasthya Bima Yojana; PMJAY: Ayushman Bharat Pradhan Mantri Jan Arogya Yojana; NHM: National Health Mission.
RE: revised estimates, BE: budget estimates. Source: Budget documents, Reserve Bank of India, National Accounts Statistics, ministry of statistics and programme implementation
Swasth Bharat Yojana ment in an adequate and
AHMED RAZA KHAN/MINT
(PMANSBY) is welcome, but it robust healthcare infrastruc-
will be assessed on how its pro- ture. But the share of capital ture was a mere 2.7% of total total spend, the ministry has ister included critical care hos- healthcare. According to the the pandemic year, show a healthcare shows that not all
jected spend of ₹64,180 crore expenditure in the overall cen- expenditure, down from 4.3% been operating in a 2-6% band pital blocks, public health labs Economic Survey, the mere 1.1% increase. The 4% segments have gained equally.
over six years improves the tral health spend is abysmally in the previous year. Revised (see chart 3). and emergency operation cen- National Health Mission has increase planned for 2021-22 Investments in health infra-
health infrastructure. low. Nearly all of the budget numbers for 2020-21 show There is a need to prioritize tres. been crucial in enabling access will take the spending to structure and greater support
Historically, India’s health goes on revenue expenditure, this figure jumped to 5.4%, but greater capital expenditure to Among the major flagship to institutional births and pre- ₹37,130 crore. to flagship schemes such as the
spending has been modest. to meet running expenses this is now projected to drop enable India’s long-term schemes for healthcare, and postnatal care. Allocations for Ayushman National Health Mission are
Nearly a third of it comes from such as salaries, maintenance again to 3.5% next fiscal. health infrastructure. The growth in expenditure has Yet, the expenditure on the Bharat, the centrally-spon- essential to ensure better
the Centre, but the ministry of and administration costs. The health ministry lags the PMANSBY is, therefore, a step been tepid over the past few National Health Mission grew sored health insurance health outcomes for Indians in
health and family welfare has Capital expenditure is cru- overall government in how in the right direction. The gov- years, and is set to see only a around 11% a year on average in scheme, have been doubled the years to come.
got just around 0.3% of gross cial for the creation of new much of its budget goes into ernment has not released modest rise in 2021-22. A case the five years before the pan- from ₹3,200 crore to ₹6,400 howindialives.com is a data-
domestic product (GDP) for hospitals and other such infra- building capital assets. While granular details about the in point is the National Health demic, as compared to 13% for crore for next year (see chart 4). base and search engine for pub-
+ much of the past decade. Even structure. the central government oper- scheme, but some interven- Mission, which envisages overall health spending. A closer examination of lic data.
including states’ health bud- In 2019-20, capital expendi- ates in a band of 10-15% of its tions listed by the finance min- achieving universal access to Revised estimates for 2020-21, budgetary allocations to feedback@livemint.com
m BUSINESS TWITTER DASHBOARD Tobacco taxes too low to control smoking

The Mint Business Twitter Dashboard aims to capture social media conversations and narratives of top Shijith Kunhitty lower taxes than cigarettes.
Indian and global business leaders. The 20 business leaders featured here have been selected based on
their business clout, Twitter activity, and Twitter following.
feedback@livemint.com People who use beedis and
THRISSUR chew tobacco form 85% of
Tweets and retweets Followers (in mn) tobacco users, but contribute
Business leader
S
Most retweeted Last Weekly Last Weekly moking is a public health only 15% of tobacco taxes,
Company topic week change week change issue in India, with 100 while the rest is paid by ciga-
INDIAN BILLIONAIRES million adults using rette users.
products such as cigarettes Ever since the Centre intro-
ANAND MAHINDRA Mahindra and beedis. One government duced the goods and services
Group
Proud of India giving vaccines to neighbouring countries 27 -12.9% 8.33 0.1%
anandmahindra tool to curb smoking is taxes. tax (GST) in 2017, states have
NANDAN NILEKANI 0.0% However, a study from Karna- not been free to levy tobacco
NandanNilekani
Infosys His lecture at Public Affairs Forum of India 3 2.55 0.0%
taka shows taxes taxes. Moreover,
HARSH GOENKA are uneven and m SNAP FACT cigarettes are Karnataka’s example shows that strictly enforcing existing laws
RPG Group Mechanical harvesting of oranges in Spain 105 10.5% 1.61 0.1%
hvgoenka too low to limit taxed at 28%, too could be a better answer to curb smoking, says a study. ISTOCKPHOTO
KIRAN MAZUMDAR-SHAW Biocon public consump- low to have any
India should pursue employer-based vaccine distribution 63 -6.0% 1.57 0.1%
kiranshaw tion of tobacco. Simplifying impact. Suggestions to solve Other Tobacco Products Act helped enforce the Act. It
UDAY KOTAK Kotak Mahindra and raising taxes, and applying this include having a separate (COTPA), which came into developed an app for citizens
Bank NA 0 NA 1.09 0.1% existing laws strictly, can bet- higher rate on cigarettes, such force in 2004 with provisions to upload photos of violators.
udaykotak
HARSH MARIWALA ter help restrict tobacco use. as 70% of the retail price, or an on restricting tobacco sales, Efficient use of the existing
Marico Mark Twain on the two most important days of our lives 28 40.0% 0.89 0.0%
hcmariwala The study’s authors, Shreel- additional excise duty. advertising and protecting law shows that Karnataka,
ata Rao Seshadri of Azim However, in Karnataka, minors. which could not use taxes
VIJAY SHEKHAR SHARMA Paytm
vijayshekhar
Two rival American politicians agree on something 29 16.0% 0.42 0.2% Premji University and others, raising taxes is a challenge as it In Karnataka, agencies in effectively to limit tobacco use,
interviewed 23 people in is a tobacco-producing state law enforcement, health and made up for it by the strict
GAUTAM ADANI bureaucracy, research and with a strong farmer lobby. education participated in enforcement of COTPA.
gautam_adani
Adani Group Visiting the Statue of Unity in Gujarat 3 0.0% 0.33 -0.1%
advocacy for their analysis. Yet, Karnataka reports and implementing COTPA. At the Also read: Making the case
SACHIN BANSAL They find that widely-used books the most violations in district level, committees for tobacco taxation in India
_sachinbansal Navi NA 0 NA 0.22 0.1%
products such as beedis attract India of the Cigarettes and chaired by district collectors (bit.ly/2XXPFJu).
NIRANJAN HIRANANDANI Hiranandani
Group Government discussion with real estate bodies 54 -20.6% 0.01 0.2%
N_Hiranandani
GLOBAL BILLIONAIRES
BILL GATES Gates Annual letter for 2021 by Bill and Melinda Gates 3 -62.5% 53.41 0.2%
BillGates Foundation
ELON MUSK Tesla Lashing out at the practice of short-selling of stocks 86 230.8% 44.65 4.1%
m NEWS IN NUMBERS CORRECTIONS AND
elonmusk CLARIFICATIONS
AP
MICHAEL BLOOMBERG Bloomberg Praising Joe Biden’s order to revitalize oil and gas industry 13 18.2% 2.75 0.0% 394 7 Mint welcomes comments,
MikeBloomberg What is it? The number of rhinoceros What is it? The suggestions or complaints
MASAYOSHI SON SoftBank Don’t give up until you succeed 1 NA 2.79 0.1%
killed for their horns by poachers in number of times about errors.
masason South Africa in 2020. Serena Williams
Readers can alert the
MICHAEL DELL Why is it important? It’s down 33% from has won the
Dell Dell ranked 12th in the US on patents granted in 2020 7 16.7% 0.65 -0.6% newsroom to any errors in the
MichaelDell 594 rhinos killed in 2019, according to the Australian Open. paper by emailing us, with your
country’s environment ministry. Rhino Why is it full name and address to
GLOBAL CEOs killings have been coming down for the important? She is feedback@livemint.com.
TIM COOK Apple Transparency and reform needed in data privacy 3 0.0% 12.48 0.4%
past six years, but the fall in 2020 was also looking to win her
tim_cook driven by restrictions on movements due 8th title in the 2021 It is our policy to promptly
respond to all complaints.
SUNDAR PICHAI to the covid pandemic. It also reflected in edition starting next week. If she wins, it Readers dissatisfied with the
Google Welcoming England cricket team to hometown Chennai 6 200.0% 3.46 1.1%
sundarpichai the number of elephants poached, down will be her 24th Grand Slam, and will equal response or concerned about
SATYA NADELLA to 16 last year from 31 in 2019. the record set by Margaret Court, who Mint’s journalistic integrity may
Microsoft Setting ambitious sustainability goals for Microsoft 4 0.0% 2.44 0.8%
satyanadella Tell me more: South Africa has more than dominated the game in the 1970s. The last write directly to the editor by
20,000 rhinos, or 80% of Africa’s rhino time Serena won this event was in 2017. sending an email to
MARC BENIOFF Salesforce Switch to premium masks in the fight against covid 115 91.7% 1.04 0.1% asktheeditor@livemint.com
Benioff population. Rhino horns have a huge Tell me more: In the warm-ups ahead of
demand in Asia, where it’s a prized the tournament, Serena defeated Mint’s journalistic Code of
HANS VESTBERG Verizon Accelerating digital inclusion in a post-covid world 23 76.9% 0.03 0.3%
hansvestberg ingredient in traditional medicines. Australia’s Daria Gavrilova in straight sets. Conduct that governs our
newsroom is available at
Data for the week up to midnight of 30 January Data compiled by howindialives.com www.livemint.com
SATISH KUMAR/MINT Data and text compiled by Howindialives howindialives.com is a search engine for public data
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WEDNESDAY, 3 FEBRUARY 2021
AHMEDABAD 03
TOP ST RIES
m MINT SHORTS
Banks’ NPAs fell from ₹10.36 tn in
Unitholders of FT’s shut Indegene to
raise $200 mn
from Carlyle,
Mar ’18 to ₹8.08 tn in Sep ‘20: Govt
New Delhi: Non-performing assets (NPAs) or bad loans of the
banking sector came down from a high of ₹10.36 trillion at the
end of March 2018 to ₹8.08 trillion at the end of September 2020
schemes to get ₹9,122 cr Brighton Park
Madhurima Nandy
due to various initiative of the government, minister of state for madhurima.n@livemint.com
finance Anurag Thakur informed the Rajya Sabha on Tuesday. BENGALURU
As a result of the Asset Quality Review (AQR) and subsequent
SC orders disbursal of funds within 20 days; around 300,000 investors will benefit
H
transparent recognition by banks, stressed accounts were reclas- ealthcare solutions firm
sified as NPAs and expected losses on stressed loans not provided Indegene Pvt. Ltd said it
for earlier under flexibility given to restructured loans were pro- is raising $200 million
vided for, he said in a written reply. Further, he said, all such Utkarsh Anand & Neil Borate from US-based investment
restructuring stressed loans were withdrawn. PTI NEW DELHI/MUMBAI
Relief in sight firms Carlyle Group and Brigh-
As India's debt markets settled down from the initial covid-19 shock in April, the six frozen Franklin debt schemes ton Park Capital to boost acqui-
I
nvestors in Franklin Temple- witnessed a steady trickle of cash flows from coupon payments and maturing debt. Notes issued by the fund sitions and drive global expan-
Brookfield REIT raises ₹1,710 cr ton’s mutual fund schemes that house outline the cumulative recovery of money from August. sion plans.
Tata group were abruptly shut down last Carlyle and Brighton Park
from investors ahead of IPO prepares to
year will get ₹9,122 crore, or
23 Apr 2020 24 Oct 3 Dec 22-29 Jan
2021
Cumulative cash flows received
Capital will pick minority
REUTERS showcase its Franklin freezes Karnataka high Supreme Court by the 6 Franklin debt schemes
military more than a third of their six debt court rules consent allows Franklin Franklin (in cr) stakes in Indegene through a
schemes with a of unitholders to hold unitholders 16,000
aircraft in investments, after the Supreme combined size required for unitholders' vote vote to wind primary investment along with
14,391
India Court ordered the disbursal of of around winding up on winding up up the six debt
14,000
a secondary sale by existing
bit.ly/2O0lEXJ 26,000 crore schemes
monies within 20 days. shareholders and early inves-
Five out of the six schemes col- 12,000 tors of the Bengaluru-based
lectively held ₹9,770 crore as of 29 company. The transaction is
January, the money that had 3 Jun 24 Nov
10,000 awaiting regulatory approvals.
accrued from interest and principal Gujarat high court stays Franklin Franklin “We plan to accelerate the
payments. The apex court has decision to wind up schemes; Templeton 8,000 pace of acquisitions, primarily
tasked SBI Mutual Fund with cases also filed in the Madras appeals to in the US and Europe. We are
high court and others Supreme Court 6,000
supervising the disbursal. against also looking to expand overseas
19 Jun Karnataka high
“We went ahead with the diffi- Supreme Court transfers all 4,998 and will set up operations in
court order 4,000
cult decision of winding up these litigation related to winding up 14 Aug 2020 29 Jan 2021 Mexico. Health tech has possi-
Mumbai: Brookfield India real estate investment trust schemes because of our firm belief to Karnataka high court bilities and investors are taking
(REIT) raised ₹1,710 crore from anchor investors on Tues- that this was the right decision to Note: According to a note by Franklin Templeton Mutual Fund, out of 14,391 crore, a sum of 9,770 crore is available
for disbursal. This implies that the balance has been used to repay borrowings Source: Mint Research
note of that,” Manish Gupta,
day, ahead of the opening of its initial public offering (IPO), preserve value for investors, as evi- co-founder and CEO, Indegene
that aims to raise a total of ₹3,800 crore. The Alternative denced by the generation of cash in said in an interview. “Carlyle’s
asset manager allotted a total of 62,180,800 shares at ₹275 these schemes over the last 9 directed. Investors in schemes with Around 300,000 investors of pleton, however, challenged the commitment to healthcare sec-
per share to anchor investors including SBI Life Insurance, months. We believe the distribu- higher cash levels will get more. the six affected funds will benefit high court order before the SC. tor with their pharma expertise
Tata AIG General Insurance, Bajaj Holdings and Invest- tion of monies will provide unit- One of the six schemes, Franklin from the order. Some of the large In December, Franklin unithold- coupled with Brighton Park’s
ments Ltd, BNP Paribas Arbitrage ODI and Societe Gener- holders with much-needed liquid- India Income Opportunities Fund, investors in the schemes had earlier ers, however, overwhelmingly experience in the technology
ale among others. The issue will open for subscription on ity and look forward to working still has to repay dues; so, its inves- challenged Franklin Templeton’s voted in favour of winding up the sector makes the two firms the
February 3 and close on February 5, and bids can be made with the regulator and SBI Mutual tors will receive payments after the decision to wind up the schemes six schemes. ideal partners to support our
for a minimum of 200 units and in multiples of 200 there- Fund to distribute the cash Last week, the SC said it company’s continued growth.”
after. ASHWIN RAMARATHINAM within the period stipu- PAYBACK TIME would examine the Securi- Post-covid, digitization has
Read more on livemint.com lated by the court,” said a ties and Exchange Board of become a significant part of
spokesperson for Franklin FIVE out of the six THE Supreme ACCORDING to INVESTORS in the India’s regulations govern- pharma firms, Gupta said. “We
Templeton Mutual Fund. schemes shut by
Franklin Templeton
Court has tasked the apex court,
SBI Mutual Fund with unitholders will be
sixth scheme will
get payments only
ing winding up after deter- have an opportunity to create a
Centre to explore blockchain tech About ₹26,000 crore collectively held supervising the paid in proportion to after its borrowings mining the procedure to billion-dollar revenue com-
was invested in the six ₹9,770 cr as of 29 Jan disbursal of funds distribute the money to the pany out of India,” he said.
use to usher in digital economy fixed-income funds in April
their investment are fully repaid
unitholders of the six Indegene, which has clocked
New Delhi: The government will explore the use of blockchain last year, when the Indian wound-up schemes. At that seven acquisitions overseas of
technology proactively for ushering in the digital economy, the unit of Franklin Templeton froze borrowings are fully repaid. without the consent of unitholders. time, Franklin Templeton told the late, helps life sciences compa-
Rajya Sabha was informed on Tuesday. Minister of state for investor withdrawals because of a The SC has fixed the next hear- The Karnataka high court in court that five of these six schemes nies with digitizing their sales
finance Anurag Singh Thakur said it was announced in the Bud- liquidity crisis in the bonds market ing of the matter after three weeks October declined to interfere with were now cash positive, with the and marketing functions, ena-
get Speech of 2018-19 that the government does not consider that was triggered by the lockdown. and allowed all parties to seek clari- the winding-up decision but cash available for disbursement at bling filings through content
cryptocurrencies legal tender or coins and will take all measures Unitholders will be paid in pro- fications from the court regarding ordered that unitholders must have over ₹9,000 crore as of 15 January. automation, data and analytics
to eliminate the use of these crypto-assets in financing illegiti- portion to their investment, the SC the distribution of funds. a say in the decision. Franklin Tem- letters@hindustantimes.com capabilities.
mate activities or as part of the payment system. “The govern-
+ ment will explore the use of the blockchain technology proact-
ively for ushering in the digital economy,” Thakur said in a writ-
ten reply to a question on introduction of India’s own
cryptocurrency. PTI
PVR raises ₹800 crore by issuing

RBI appoints Exports expand for second straight month in Jan
shares to anchor investors via QIP
external
Asit Ranjan Mishra global demand despite challen- The International Monetary
New Delhi: Multiplex operator PVR Ltd has raised ₹800 crore firm to audit asit.m@livemint.com ges and the resilient efforts of Fund (IMF), in its update to the
by issuing shares to a set of investors through qualified institu- NEW DELHI our exporters have started bear- World Economic Outlook last
tional placement (QIP). The QIP witnessed an allotment of over HDFC Bank’s ing fruits again,” he said. month, said consistent with
I
5.555 million equity shares to eligible qualified institutional buy- ndia’s merchandise exports India’s merchandise trade recovery in global activity,
ers (QIBs) at a price of ₹1,440 apiece. “The fundraise committee
...approved the issue and allotment of 5,555,555 equity shares to
IT infra and imports expanded for the
second consecutive month in
had been weakening even global trade volumes are fore-
before the pandemic hit the cast to grow about 8% in 2021,
eligible QIBs at the issue price of ₹1,440 per equity share,” PVR January, signalling a turn- economy and external demand. before moderating to 6% in
said in a regulatory filing late on Monday night. PTI Shayan Ghosh around in domestic and exter- Exports were negative in 15 of 2022. “Services trade is
shayan.g@livemint.com nal demand after the pandemic the past 19 months starting June expected to recover more
MUMBAI devastated the value of trade in 2019. Since March slowly than mer-
Bharat Biotech, Ocugen sign Asia’s third-largest economy. 2020, both Non-petroleum chandise volumes,
I
ndia’s largest private lender Imports expanded 2.05% last exports and and non-jewellery however, which is
pact to develop Covaxin in US HDFC Bank on Tuesday month while exports grew imports started consistent with
REUTERS imports grew
said the Reserve Bank of 5.37%, leaving a trade deficit of declining in high 5.94%, signalling subdued cross-
India (RBI) has appointed an $14.75 billion, according to pre- Imports expanded 2.05% last month while exports grew 5.37%, double digits, border tourism
a steady pickup
external firm to conduct a spe- liminary data released by the leaving a trade deficit of $14.75 billion. BLOOMBERG even temporarily and business
cial audit of its entire informa- commerce ministry. Non-pe- leading to a trade in domestic travel until trans-
tion technology (IT) infra- troleum and non-jewellery Nayar, principal economist at (16.98%), and pearls (50.2%) surplus in June for activities mission declines
structure. imports grew 5.94%, signalling ICRA Ltd, said. while petroleum products the first time in 18 everywhere,” it
In December, RBI ordered an increase in domestic activi- Major export items that (-27.72%) and transport equip- years. said.
HDFC Bank to halt its digital ties. helped India’s outbound ship- ment (-25.26%) continued to Data compiled by the World The Indian economy is pro-
banking initiatives and freeze “The rise in both merchan- ments turn the corner include contract. Trade Promotion Trade Organization (WTO) jected to contract by 7.7% in
issuance of credit cards until it dise exports and imports in Jan- drugs and pharmaceuticals (up Council of India chairman showed global merchandise FY21 for the first time in 41 years
addressed the lapses that led to uary 2021 is heartening, signify- 16.4%), engineering goods Mohit Singla said the data sug- trade had declined by 21% in the with the National Statistical
a series of glitches. This comes ing a continued strengthening (18.69%), and iron ore gests India’s trade has been on June quarter. WTO now pro- Organisation assuming 0.6%
in the wake of the lender’s of the domestic growth recov- (108.66%). A sharp contraction the path of quick recovery. “The jects the volume of world mer- growth in the second half of
New Delhi: Bharat Biotech International Ltd on Tuesday e-banking service facing three ery. With the merchandise in readymade garments global trade flow has been chandise trade to decline 9.2% FY21. The Economic Survey,
announced that it has signed a pact with Ocugen Inc, allow- outages since 2018, inconven- trade deficit having risen to (-10.73%) and petroleum prod- streamlining fast and bottle- in 2020, followed by a 7.2% rise however, has projected the eco-
ing the US-based biopharmaceutical firm to co-develop, iencing customers. $14-15 billion over the last two ucts (-37.34%) kept overall necks caused by the pandemic in 2021. In April, it had projec- nomic to make a recovery in
supply, and commercialize covid-19 vaccine Covaxin in the “Kindly note that RBI has months, we expect the current growth minimal. are easing out gradually. Also, it ted global merchandise trade to FY22 growing at 11% while the
US market. Under the agreement, Ocugen will have the appointed an external profes- account balance to slip back The rise in imports was led by is a reflection that Indian prod- drop by 13% to 32% in 2020 IMF has estimated 11.5% growth
commercial rights to the vaccine candidate in the US and sional IT firm for carrying out into a deficit in H2 FY21,” Aditi gold (154.7%), electronic goods ucts have been sustaining their because of covid-19. for the same year.
will be responsible to conduct clinical trial and get emer- a special audit of the entire IT
gency use authorization (EUA) from the US Food and Drug infrastructure of the bank
Administration. After securing the EUA, it can commercial- under Section 30 (1-B) of the
Growth is
ize vaccine in the US market, and retain 45% of profits Banking Regulation Act, 1949,
made, with the rest going to the Indian firm. LEROY LEO at the cost of the bank under
Read more on livemint.com Section 30 (1-C) of the Act,” it
said.
The bank said it will extend not just about chasing success.
Sri Lanka pulls out of agreement
It’s also about learning
cooperation to the IT firm.
HDFC Bank said last month it
with Japan, India on container port has provided a remedial plan
Colombo: Sri Lanka said on Tuesday it had pulled out of an
agreement with Japan and India to develop a deep-sea container
on its e-banking outages to the
regulator and expects its strat-
from failures.
terminal viewed as an effort to counter China’s growing influence egies to take shape in 10-12
in the region. The East Container Terminal in Colombo port is weeks, following which it will
being built next to a controversial $500-million Chinese-run
container jetty, and was to be developed as a joint venture. But
request an inspection by the
regulator. Growth is...On.
the government in recent weeks has faced opposition from hard- Srinivasan Vaidyanathan,
line nationalists within its coalition. The deep-sea jetty deal was chief financial officer of the
signed in May 2019, a few months before President Gotabaya bank had told analysts on 16
Rajapaksa came to power. The government said it would instead January that it is also making
develop the site “as a wholly-owned container terminal of the Sri some long-term upgrades in
Lanka Ports Authority” for $800 million. AFP technology that will take 12-18
months.
“We have several action
PFC says it has raised $500 million plans from strengthening of
the disaster recovery or the
via dollar-denominated bonds recovery point and the recov-
New Delhi: State-run non-banking finance firm Power Finance ery time and automating the
Corporation Ltd (PFC) on Tuesday said it has raised $500 million orchestration tool to get onto
through the issuance of dollar-denominated bonds. PFC, the the disaster recovery side or
leading NBFC in the power sector, successfully raised $500 mil- architectural efficiencies, Follow us:
lion on 29 January 2021, through the issuance of dollar denomi- cloud strategy,” said Vaidya-
nated bonds under ‘Reg S route’ with a fixed maturity of 16 May nathan, according to a tran- mint.live livemint live_mint livemint www.livemint.com
2031, a PFC statement said. This is the longest tenor bond issu- script of the call available on
ance from India since the start of the year. PTI Bloomberg.
X
AHMEDABAD
S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE
49,797.72 2.46 14,647.85 2.57 12,053.25 2.41 33,327.10 2.04 14,720.55 2.50 19,051.11 2.26 18,645.94 1.59
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN
48,600.61 49,193.26 14,281.20 14,481.10 11,770.15 11,921.70 32,661.55 33,001.10 14,361.65 14,556.00 18,630.31 18,788.85 18,353.32 18,513.40
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW
50,154.48 49,193.26 14,731.70 14,469.15 12,102.60 11,916.65 33,373.60 32,809.45 14,792.00 14,546.30 19,098.08 18,775.47 18,708.18 18,499.56
m MINT SHORTS
Business cycle in Gulf may
What the Indigo Paints IPO has in
take a while to recover: S&P
The business cycle in Gulf countries is likely to take
“several quarters at least to fully recover” from the
twin shocks of the coronavirus pandemic and the
common with GameStop frenzy
drop in oil prices, according to S&P Global Ratings.
Corporate and infrastructure companies in the six- Mobis Philipose & two-year forward earnings estimates. necessary support from the market
nation Gulf Cooperation Council are expected to Harsha Jethmalani Investors are overlooking the rising ecosystem, which pushed it as a great Go figure
operate “conservatively” in 2021 as the economy mobis.p@livemint.com competition in the sector,” says a con-IPO, to be bought at any cost. Valua- All paints stocks trade at expensive valuations, but Indigo Paints has raced
recovers, according to the report. The GCC com- sumer goods analyst at a domestic tions don’t really matter, as the past well-established stocks to claim the 'most-expensive' tag.
W
prises Saudi Arabia, the United Arab Emirates, ho says India can’t have its institutional brokerage. “Fundamen- attempt is to ride the rally and get out Revenue (in ₹ crore) (Left-hand scale) Mcap/revenue (times)
Kuwait, Qatar, Oman and Bahrain. “Absent a sub- Gold prices own GameStop mania? As tals do not support this kind of valua-before the shares start correcting. 25,000 25
today fall
stantial recovery in revenue generation, they are sharply for
Exhibit A, consider Indigo tion; this has more to do with market Looking at the PE of 200 times, the
20,211 23.8
likely to focus on cost optimization, proactively second day, Paints Ltd, which listed on Tuesday at mood than anything else,” says stock attracted some short sellers as 20,000 20
managing their liquidity, and preserving their cash silver rates a valuation of 210 times trailing earn- another analyst at a domestic broker- well, many of who are now trapped. 5.9
lows, while new investments will continue to take slump ings. True, Dalal Street has a strange age. Indigo Paints’ market cap is now million shares of the firm were marked 15,000 15
11.1
a back seat in most sectors,” S&P credit analyst bit.ly/2YCeFX6 fascination for paint for delivery on Tuesday,
10,000 10
Timucin Engin wrote in a report. BLOOMBERG stocks, with market VALUATION SOUP even though floating 11.7 5.9
leader Asian Paints Ltd stock is just 5.5 million. 5,000 6,365
3.9 5
trading at over 100 INDIGO Paints Ltd AKZO Nobel, FUNDAMENTALS The short squeeze can 5,280 625
times trailing earnings. listed on Tuesday at whose revenues are took a backseat, and result in a further spike 0
2,662 0
Calming down a valuation of 210
But since the time times trailing
four times higher, herd mentality has
in the shares, as was the
Asian Berger Kansai Akzo Indigo
has a much lower taken over, like Paints Paints Nerolac Nobel Paints
Silver slips after rising to its highest level since 2013. Indigo Paints hit the earnings market cap with GameStop case with Burger King Consolidated revenues for FY20 Source: BSE, Mint Research
Silver Futures Close (in $) primary markets, paint shares recently.
35 stocks have corrected a Retail demand for SATISH KUMAR/MINT
30.17 29.40 bit, thanks to the threat of competi- nearly ₹15,000 crore, or about 24 Indian IPOs follows a fairly predictable experts on business channels and the consumer analyst says, “It is diffi-
30 tion, after the Aditya Birla group times FY20 revenues. Akzo Nobel pattern. In an unofficial market for some television anchors, who go so far cult to explain this enthusiasm
announced a huge investment in the India Ltd, whose revenues are more unlisted shares, traders seek signals by as to advise investors to apply for the towards the paints sector especially
25 sector. than four times higher, has a much looking at the so-called grey market IPO in the names of all family mem- now that margins have peaked. The
But none of that has dulled the lower market cap of around ₹10,400 premium. When the premium is high, bers, so as to increase the chance of much-promoted theme of shift from
20 enthusiasm for shares of Indigo Paints. crore. IPOs tend to do very well, both in getting an allotment. Once these ele- the unorganized to the organised sec-
It is now the most expensive paint Much like GameStop, Indigo Paints terms of demand for its shares as well ments are in place, fundamentals take tor has largely played out in the past
15 stock in town. “This is insane. Indigo has ceased to be a mere paints stock. Its as listing premium. Some such stocks a backseat. two years, so sustaining past growth
Paints is trading at well over 100 times shares are rising only because it got the also tend to get recommended by Yet, for what it’s worth, here what rates can be challenging.”
10
31 Dec 2012 1 Feb 2021
Source: Bloomberg
SATISH KUMAR/MINT
Silver declines as investor

frenzy seems to cool down
Sustained growth required HDFC growth recovery seems to be
The investor frenzy that stoked wild gains in every-
thing from GameStop Corp. to silver is showing
for rerating of Marico’s stock impressive, but stress rears its head
+ signs of fatigue. The metal dropped more than 5% Pallavi Pengonda Aparna Iyer
on the Comex on Tuesday, sinking from an eight- has restructured loans worth ₹5,000 which is 69 basis points higher from
year high after margin requirements were raised pallavi.p@livemint.com
Staying healthy aparna.i@livemint.com crore as of December end under the a year earlier. Improving collections
and analysts cautioned against chasing the rally. In Q3FY21, Marico saw double-digit domestic volume growth regulatory forbearance. This forms every month has helped the lender
for the second consecutive quarter in a row.
M H
GameStop, whose Reddit-inspired surge set off a arico Ltd is having a 14 ousing Development 0.9% of the lender’s assets under maintain asset quality. Collections
flurry of buying in other heavily shorted stocks, good run. The Decem- Domestic consumer volume growth (in %) Finance Corp. Ltd (HDFC) management (AUM). The bulk of have risen to 97.6% for individual
sank 16% in after-hours US trading on Monday, ber quarter results 11 has been consistently better these loans are from the non-indi- loans and are close to pre-pandemic
extending a 31% plunge during the regular session. announced last week are than peers on asset quality to the vidual portfolio. Retail loans restruc- levels. Given the lower-than antici-
Other high-fliers including AMC Entertainment decent with better-than-ex- 6 benefit of its investors. In FY21 so far tured were only 26% of the total pated stress, the lender’s provisions
Holdings Inc. and Koss Corp. also slumped in late pected consolidated revenue 1 too, the mortgage lender has man- restructured pile. This have reduced y-o-y. For
trading. Some of last week’s biggest gainers in Asia, growth of 16% year-on-year Q3FY20 Q4FY20 Q1FY21 aged to maintain its asset quality but again shows that The lender’s Q3, HDFC set aside
including China Literature Ltd, lagged behind (y-o-y) to ₹2,122 crore. The Q1FY20 Q2FY20 Q2FY21 Q3FY21 not without challenges. HDFC’s stress is lim- individual book ₹594 crore as provi-
-1
benchmark indexes on Tuesday. BLOOMBERG most striking factor in the For the December quarter, its ited to its developer has stood the test sions, 80% lower than
-3
results is the 15% India business Statge 3 assets or delinquencies rose loan book. of time with the year-ago period.
volume growth in the Decem- 6% sequentially, an indication of Understandably, That said, the company
delinquencies
BP sinks to first loss in a ber quarter. This is the second incremental stress, albeit small. much of this stress has
remaining
holds provisions nearly
consecutive quarter of double- Source: Company, Adjusted to the judicial standstill on come from the non-in- double than what is
decade on pandemic hit digit volume growth. -14 JM Financial
asset recognition, HDFC’s gross bad dividual book because negligible required by regulation.
BP plunged to a $5.7 billion loss last year, its first in “Whilst the base on which SATISH KUMAR/MINT loan ratio stood at 1.91% of its loans of stressed developers. HDFC’s shares have
a decade, as the pandemic took a heavy toll on oil this growth was delivered was before interest, tax, deprecia- early signs of cooling off in for Q3. This is far higher than 0.75% As secured individual risen 3% in the past
demand, and the energy company warned of a no doubt soft, the strength of tion and amortization (Ebitda) copra prices. Further, the com- a year ago. The troubled asset pile loans form a lion’s share of HDFC’s month after its update on operating
tough start to 2021 amid widespread travel restric- rebound was impressive with margin declined by 99 basis pany also expects rice bran oil has risen 57% year-on-year (y-o-y) portfolio, the overall impact of stress metrics on 5 January cheered inves-
tions. Despite the weak environment, however, value-added hair-oils volume points y-o-y to 19.5%, though inflation to be transient and given the impact of the pandemic. has been limited. tors. Indeed, it wins over peers on
chief executive Bernard Looney told Reuters the growth accelerating to 21% the measure was flattish decline over the next few Analysts at Jefferies India Pvt. Ltd The individual book has stood the growth recovery. Retail loan dis-
company’s transition to a greener future remained (versus 4% in the September sequentially. One basis point is months. “Recent price inter- pointed out that the rise in Stage 2 test of time with delinquencies bursements rose 26% y-o-y. On an
on track. It is aiming to ramp up renewable power quarter), lifting the 2-year a hundredth of a percentage vention, structural cost savings assets indicates the lender may have remaining negligible. Even so, Stage AUM basis though, HDFC reported
generation to 50 gigawatts (GW) by 2030 from 3.3 CAGR to more than 6% now, point. To be sure, slower pace and likely easing of key raw restructured loans. HDFC said that it 3 assets form 2.3% of total asset book, a 10% growth in retail and 7% in its
GW currently, while slashing oil output to reduce which is quite of growth in other material prices in 1-2 quarters non-individual book. These are lev-
greenhouse gas emissions. Capital expenditure is heartening con- The most striking expenses and augur well for profitability,” Mixed bag els far lower than what the lender has
set to rise to $13 billion this year, of which $9 billion sidering the factor in the advertising and said analysts from Kotak Insti- been historically clocking every
HDFC Ltd has seen a sharp bounce back in loan disbursal, but stress on
will still go to oil and gas, $2 billion to low-carbon recent issues results is the sales promotion tutional Equities in a report on the loan books has made its presence felt.
quarter.
projects and $2 billion to mobility, chief financial faced in the cate- 15% India costs helped cur- 29 January. However, HDFC’s focus on
Figures in %
officer Murray Auchincloss said. That compared gory,” said ana-
business volume tail the y-o-y drop Meanwhile, shares of Marico 26 affordable housing may come to its
with a budget of $12 billion in 2020. REUTERS lysts from JM in Ebitda margin. have increased by 21% from Disbursement growth Gross bad loan ratio aid here. Since the budget has
Financial Institu- growth in the Note that gross their pre-covid highs in Janu- extended the tax deduction benefit
last quarter 13 7
tional Securities profit margin con- ary 2020. Currently, the stock 1.99 1.87 1.81 1.91 on affordable housing loans, HDFC
1.36
Ltd in a report on tracted by 223 trades at around 42 times esti- may see continued expansion here.
Structural strength 27 January. basis points, owing mated earnings for financial While growth has improved
Brent’s timespread suggests that crude oil -5
CAGR is compound annual to higher input prices, espe- year 2022, based on Bloomberg despite the pandemic’s impact, the
stockpiles are being drawn down. growth rate. Further, Saffola cially of copra and rice bran. data. “A few more quarters of lender still has a long road ahead for
1
$ per barrel (refined edible oils) did well in Overall, Marico’s Ebitda sustained healthy performance -29 a complete recovery. After gaining
the December quarter, report- increased by 10.7% y-o-y to ₹413 could drive further re-rating of 23% in the past three months, HDFC
Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21
0.5
ing 17% volume growth. crore. What augurs well is that the stock, in our view,” said JM Source: Company
shares trade at a 4.4 times estimated
0.29 Consolidated earnings Marico has said it has witnessed Financial analysts. book value for FY22.
-0.12 SATISH KUMAR/MINT
0
-0.5
-1
-1.5
30 Jun 2020 2 Feb 2021
US growth key to Dr Reddy’s prospects after some hurdles in Q3
Source: Bloomberg
Ujjval Jauhari higher base in the US. Aided by emerging markets too. In the US, lio and will harness synergy ben-
SATISH KUMAR/MINT
Growth matrix
ujjval.j@livemint.com volume growth in many products its efforts are concentrated on efits in the domestic market.
as well as some new launches, The pickup in US sales remains crucial to drive margins for growing limited competition and The success with covid-19 vac-
Oil flirts with $54 amid Dr Reddy’s Laboratories, even as India growth remains strong.
R
ising competition leading the y-o-y growth momentum niche product business. It had cine can further propel growth.
optimism over demand to pricing pressure always remains decent.
Sales (in ₹ crore)
North America India
y-o-y change (in %) (Right-hand scale)
North America India
even divested many loss-making Bhavesh Gandhi, lead analyst,
Oil rose past $54 a barrel with help from a falling poses risks to US growth “While price erosion on incre- 2,000 45
proprietary products. institutional equities, Yes Securi-
dollar after jumping the most in three weeks on for Indian pharmaceutical firms. mental competition is a risk for The benefits are visible and ties, says Dr Reddy’s has a diver-
optimism over the demand outlook. Futures in Dr Reddy’s Laboratories Ltd also any firm, we believe that US sales 1,500 30 strong India and US growth sup- sified US portfolio compared to
New York headed for the highest close in almost a saw some key products face trend continues to be on a strong 1,000 15 ported overall performance dur- Lupin and also less risky growth
year after rising with a rally in US stocks to rise 2.6% increased competition in the US, footing, even after incorporating ing Q3. The domestic sales pathway in comparison to Sun
500 0
on Monday. Saudi Aramco said it sees demand leading to moderation of sales. Its $10 million impact of 3QFY21 growth of 26% y-o-y (5% sequen- Pharma. Lupin still has a larger
returning to pre-virus levels later this year. Royal US sales fell 5% sequentially in ($40 million annualized),” say 0 -15 tially), and EM growth of 5% y-o-y dependence on some key prod-
Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21
Dutch Shell raided the North Sea market, buying the December quarter. analysts at Credit Suisse. Source: Motilal Oswal Financial Services Ltd
(11% sequentially) lifted the com- ucts, while Sun is banking on
the most benchmark-grade cargoes in a single day Though US sales may have The confidence stems from pany’s Q3 show. Overall reve- ramping up speciality products
in 10 years in the S&P Global Platts pricing window. moderated sequentially, never- the fact that Dr Reddy’s is prepar- SATISH KUMAR/MINT nues could still grow 12% y-o-y. to drive growth.
A weakening dollar boosts the appeal of commodi- theless, the company’s prospects ing for the launch of several large benefits, it is to be followed by see their launches happen in The rebound in acute seg- Dr Reddy’s, which has cor-
ties that are priced in the currency. Crude’s futures there remain firm. The US mar- products in the US. These can two more large generic product FY23, as per analysts. ments after the lockdown-in- rected 19% from its January
curve kept strengthening. Brent’s prompt times- ket, which contributed 35% to take care of any pricing pressure launches in FY22. Another two Overall, the product pipeline is duced disruption in the first half highs, rose marginally on Tues-
pread is 27 cents a barrel in backwardation, a bull- overall revenue, saw sales grow on the base business. As the much-awaited large product strong. Further, the company has will drive benefits. The company day. It is trading at 22.3 times
ish market structure where near-dated prices are 9% year-on-year during Q3. launch of cardiology generic opportunities (Copaxone gener- changed its strategy and is focus- has completed the integration of FY22 consensus earnings esti-
more expensive than later-dated ones. BLOOMBERG The company now has a much drug Vascepa soon is to accrue ics and Nuvaring generics) may ing on growth in India and the acquired Wockhardt portfo- mates.
Mark to Market writers do not have positions in the companies they have discussed here
X
TOP STORIES WEDNESDAY, 3 FEBRUARY 2021
AHMEDABAD 05
TOP ST RIES
Commercial vehicle sales to Future workplaces to be safer,
productive, digitally equipped
gain from scrappage policy Staff Writer
feedback@livemint.com
T
all buildings, cubicles,
meeting rooms and caf-
Allocation of ₹1.18 tn for infra projects will also spur demand for commercial vehicles eterias—this is how
most of us picture a work-
place. But as we all try to
Malyaban Ghosh restore normalcy and return
malyaban.g@livemint.com to work on the other side of
NEW DELHI the covid-19 pandemic, the
workplace of tomorrow is not
T
he vehicle scrappage pol- going to be the same.
icy, urban transport initi- Proposal for It is, therefore, imperative
revision of
atives and record infra- OBC creamy
for the business leaders of
structure spending layer income tomorrow to think big and
announced in the Union criteria under collaborate with all elements
budget 2021-22 are expected to consideration: of the value chain to create an
Govt
boost demand for trucks and buses, bit.ly/3pHA9xw
inclusive ecosystem and bring
benefiting commercial vehicle (CV) about greater efficiencies
manufacturers like Tata Motors Ltd, even as costs are reduced and
Ashok Leyland Ltd and Volvo employee and data safety is
Eicher Commercial Vehicle Pvt. Ltd. ensured. Clockwise from top: Rajarshi Purkayastha, head, pre-sales,
CV sales, which have been falling The third episode of a panel MECAA and India, Tata Communications; Manish Purwar, senior
since the collapse of Infrastructure discussion, Virtual workplace director - service commercial platforms, GE Healthcare;
Leasing & Financial Services Ltd 2.0, ‘Back to workplace’, pow- Aabhinna Suresh Khare, chief digital officer, Bajaj Capital.
and revised load-carrying norms, ered by Tata Communica-
were worsened by the covid-19 pan- tions Ltd, discusses the strate- you need as a business and the front and centre of every-
demic. Sales across categories gies to ensure uninterrupted then designing for that end thing as we move virtual.
declined by 28.7% to 7,17,688 units output and undeterred pro- result which will have both “Right from virtual work,
in FY20, while the same for medium Commercial vehicle sales, which have been falling since the collapse of Infrastructure Leasing & Financial Services ductivity as organizations present and future in mind, networks, getting groceries,
and heavy commercial vehicles Ltd and revised load-carrying norms, were worsened by the covid-19 pandemic. RAMESH PATHANIA/MINT start moving towards the new deploy it and manage it to everything is digital. The pan-
dropped by 42.4% to 2,24,806 units. normal. ensure that you can take your demic has just accelerated
In the April-December period last a proposed green tax on vehicles will which provide an impetus to the The CV industry, though, has The last few months have digital investments to opera- this and innovation has
year, dispatches further declined by add pressure on fleet owners to sector. started to recover from the Decem- seen organizations slowly tions scale,” Purkayastha fuelled up,” Purwar added,
37.2% to 3,58,203 units. replace their old trucks. “The commitment to augment ber quarter as infrastructure pro- restart operations in the added. stressing on the importance
Finance minister Nirmala Sithar- Companies such as Mahindra and our country’s road infrastructure jects resumed with the unlocking of workplace; employee safety In the financial services of digital.
aman on Monday outlined a vehicle Mahindra Ltd and Suzuki Motor with projects for building 8,500km the economy. Improvement in man- has been the key priority for space, the main priority for But while technical tools
scrappage scheme for CVs older Corp. have already invested in facili- of highways and economic corridors ufacturing has helped as well. almost everyone as people the workplace of the future is are being used to interact with
than 15 years and personal vehicles ties to recycle vehicles. augurs well for surface and road “With the announcement of start pouring into offices in a to create a balance between customers and track
older than 20 transport. The infrastructure for roadways, we see staggered manner. productivity and keeping the employee productivity alike,
years, which will GRADUAL RECOVERY ₹ 1 8 , 0 0 0 - c r o r e even more demand for BharatBenz “Employee safety will be workforce safe and motivated. businesses must remain
be detailed by the scheme to augment products in the construction tipper the primary focus of empathetic in this
roads ministry CV sales which have IN the Apr-Dec CV industry, though, public transport in segment where we already enjoy a employers in 2021. process of employee
later. The Union been falling since the period last year,
collapse of IL&FS, dispatches declined
has started to recover urban areas with the growing customer base. Further-
from the Dec quarter
Also, everyone is now tracking.
government will were worsened by by 37.2% to 3,58,203 as infra projects addition of 20,000 more, the push towards increasing thinking whether the “Digital is a game
also s p e n d the pandemic units resumed new buses in a PPP national highway corridors will help employees really need where you are catching
₹18,000 crore to (public-private part- improve inter-state connectivity; to be back in office if up with the customers.
introduce 20,000 nership) model would thereby creating a stimulus for fresh the work can be done Data security plays a pivotal We started Robocalling cus-
new buses in cities, in collaboration According to Vipin Sondhi, man- ensure cleaner and efficient public demand in urban transportation. remotely redefining the very role in this industry as finan- tomers for renewals and
with private companies. The record aging director and chief executive, transportation and ease conges- Overall, the scrappage policy and face of the workplace,” said cial institutions secure cus- implemented a remote moni-
allocation of ₹1.18 trillion for infra- Ashok Leyland, the budget has sev- tion,” Sondhi added. infrastructure spends will trigger Manish Purwar, senior tomer earnings. toring tool, which initially
structure projects will also spur the eral positive signals for the manufac- He said the voluntary scrappage the demand for the MHCV seg- director - service commercial “We need to create a busi- met with a lot of resistance.
demand for commercial vehicles. turing and commercial vehicles sec- policy is positive, but the industry ment,” said Satyakam Arya, manag- platforms, GE Healthcare. ness place, not a workplace. The tools are fantastic, but
Scrapping of older vehicles will tor, which are key to the economy has asked for an incentive-based ing director and chief executive, When you think about a And to do that, the first prior- acceptance needs to be there
+ create demand for new vehicles and and there are four specific areas scheme for it to be effective. Daimler India Commercial Vehicles. productive workplace for ity is how to be productive also,” said Khare.
tomorrow, there are a few and seamlessly deliver busi- It is not about getting the
important points that need to ness even as we are staying technology that is the newest
be considered. away. Second is balance, on the table but getting the
“The first one is how to between caring for employees right product to suit the needs
make it safe and secure, how and ensuring customer expe- of the business.
B2B firm Zetwerk raises ₹880 crore to scale global ops to make productivity high and
how to make collaboration
and communication simple
rience and finally, security as
we are dealing with people’s
money,” Aabhinna Suresh
“Phishing attacks have
gone up by 3000%. Security is
an ever-changing goal post. It
and ubiquitous,” said Rajarshi Khare, chief digital officer, can also be compared to
Nandita Mathur crore) in a Series D round led by ogy and continue expansion globally, growing three fold in equity capital raised by the Purkayastha, head, pre-sales, Bajaj Capital Ltd. insurance – you don’t know
nandita.m@livemint.com US-based Greenoaks Capital into new categories and 2020 compared to 2019 company to $193 million. MECAA and India, Tata Com- Businesses have speeded when you will need it. Things
NEW DELHI and Lightspeed Venture Part- regions. Zetwerk, founded two despite the impact of the pan- “We are proud to partner munications. up their digitization journeys like dark web monitoring,
ners. Sequoia Capital India and years ago by IIT alumni Amrit demic. with the world’s most innova- There is a stride towards and what they would have brand monitoring have
B
usiness-to-business Kae Capital also participated in Acharya, Srinath Ramakkrush- The Series D round follows tive companies to catalyze their digital, and one needs to achieved in 2-3 years was become table stakes because
(B2B) manufacturing the round. nan, Rahul Sharma and Vishal the startup’s fundraise of $21 digital transformation in man- design the entire enterprise done almost overnight. Digi- you want to protect your
platform Zetwerk has The fundraise will allow Zet- Chaudhary, said the platform is million in a Series C round in ufacturing,” said Amrit digital architecture. “You tal transformation and tech- brand from getting tar-
raised $120 million (₹880 werk to strengthen its technol- being increasingly adopted July 2020, bringing the total Acharya, co-founder and CEO. need to first define what do nological strategies have been nished,” Purkayastha said.
DOMESTIC COMPETITIVE BIDDING

BHARAT OMAN REFINERIES LIMITED
ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 CERTIFIED COMPANY
BORL invites bids from eligible bidders for the following tender.
Job Description, Tender No. and Contact Details
E-tender system ID
Tender for ‘Supply of 2,200 MT Methyl Mr. Rohit Kumar Mehto, Dy. Manager
Tertiary Butyl Ether (MTBE) to Bharat (Commercial), Tel: 07580-226187
Oman Refineries Limited (BORL), Bina, Email : rohit.mehto@borl.co.in
Dist. Sagar, Madhya Pradesh (India)’.
Tender No : 6000011776; Mr. Mahesh Soni, Manager
E-Tender System ID : 12446, (Commercial), Tel: 07580-226383,
Bid Due Date : 23.02.2021, 15:00 Hrs. Email: mahesh.soni@borl.co.in
The complete tender is available on BORL e-Procurement website
https://etender.borl.in/BORL/ and https://www.borl.in/. All further notifications
/ amendments to the tender will be published only in the above mentioned
e-Procurement website.
Growth is
not just about digging
in the heels.
It’s also about pivoting
in tough times.
Growth is...On.
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AHMEDABAD
TOP ST RIES
BLOOMBERG
‘Decision on jab funding Telecom misses out

on budget boost
will be made by 31 March’ prior to 5G launch
Asit Ranjan Mishra timed after the artificial health Ishita Guha
asit.m@livemint.com restraint on activities has ended. ishita.g@livemint.com
The government’s 9.5% fiscal NEW DELHI Now, when you spend, it results in NEW DELHI
deficit projection for FY21 was activities. Earlier, if we had spent, it
A T
bigger than S&P’s expectation. day after finance min- may not have resulted in activities, he Union Budget left the
ister Nirmala Sithara- but it would have worsened our fis- telecom sector disap-
Budget shot man presented a
reform-oriented bud-
cal position.
Experts argue that starting
pointed with no
announcements for an indus-
get focusing on infra- June, lockdown was eased and try whose services were
in the arm structure spending to put the econ-
omy ravaged by the coronavirus
government could have pushed
expenditure in the second quar-
Indian
Railways
operates
declared essential during the
pandemic, even as equipment
for Indian pandemic back on growth track, the

ministry’s expenditure secretary
T.V. Somanathan explains the
ter.
It’s not correct. Easing was grad-
ual, there were many containment
double-stack
‘python train’
service on the
sellers and operators prepare
for the roll-out of 5G later this
year. COAI had urged govt to scrap
economy, rationale of the budget and the gov-
ernment’s initial hesitancy to push
zones. Even if part of a state is in con-
tainment zone, transportation,
Western DFC
bit.ly/2MHtkxj
The government did not the basic customs duty on the
deliver on any of the demands import of 5G equipment. MINT
spending. Edited excerpts: workers are affected. Even your of the sector such as a reduc-
says S&P What was the philosophy
behind the budget this time?
engineer may be caught in a con-
tainment zone. So, lots of obstacles
tion of licence fee and spec- are going to launch 5G services
trum usage charge (SUC), in the country, it is imperative
The philosophy was to rekindle were there. waiver of goods and services that 5G-enabled equipment is
PTI growth by focusing on labour-inten- The covid vaccination pro- tax (GST) on certain levies, and available to them at a reasona-
feedback@livemint.com sive infrastructure projects because gramme for which government lower import duty on equip- ble price. Thus, there was the
NEW DELHI it has the twin advantage of rekin- has provided ₹35,000 crore— ment crucial to building the need for a reduction in cus-
dling growth and of creating jobs for Will it be a central scheme or back-end infrastructure for 5G toms duties on telecom equip-
I
ndia’s budget for the next fis- the unskilled and the semi-skilled, states have to contribute to it? wireless network. ment,” said SP Kochhar,
cal is an effort of the govern- the exact section of society we want And will it be free for every- The Cellular Operators director general, COAI.
ment to shore up economic to address. That was the main focus removed. So, the pace of expendi- tions. For example, in the case of body? Association of India (COAI) The high reserve price for
recovery, but fiscal consolida- at least on the expenditure side of ture is not a steady graph with a lot of capital expenditure, we had not put That is yet to be decided. A deci- had urged the finance ministry spectrum is another issue. Of
tion would pose a stout chal- the budget I am in charge of. administrative control on expendi- restrictions on capital spending sion will be taken by the health min- to scrap the basic customs duty the three largest telecom play-
lenge to policymakers going The total expenditure for nine ture which has affected it. Some of ministries such as highways and rail- istry in consultation with NITI on imports of 5G equipment ers in the country, two are of
forward, S&P Global Ratings months to December in FY21 the package announcements will be ways but yet, they could not spent Aayog. So, the manner of funding and network-related products the view that the cost of spec-
said on Tuesday. stood at ₹22.8 trillion whereas released in the last (March) quarter. because workers and contractors etc, they will decide. as long as India is unable to trum for 5G, as recommended
‘
The rating agency currently the revised estimate (RE) in the Similarly, some of the additional were not coming; machines But shouldn’t the budget be offer “good-qual- by the telecom
does not see any material effect budget for the full provisions we have could not be oper- making such ity” indigenous Govt did not meet regulator, is unaf-
from the budget on India’s key year is ₹34.5 tril- m INTERVIEW made in the RE for ated, so, several things clear equipment at any demands of fordable.
credit factors, but the econ- lion. Where and railways and highways work sites were If we had spent earlier because states affordable prices. the sector, such as The Telecom
omy’s brightening growth how will you be able to spend etc will get spent in this quarter. So, closed. Till Sep- this fiscal, it may not will have to plan Currently, India a reduction of Regulatory
prospects will be critical to ₹11.7 trillion in just three months we are fairly confident that the RE tember, most of the have resulted in activi- and prepare imports 85% of its Authority of India
maintaining the sustainability
licence fee,
time? numbers will be approximately cor- country was in their budgets wireless telecom says ₹492 crore
of public finances. There are a lot of big-ticket items rect. lockdown in some ties, rather it would accordingly? equipment. waiver of GST on should be set as
It said general government to come like fertilizer subsidy worth Shouldn’t such expenditure form or the other. have worsened our The ongoing However, none certain levies the base price for
debt is likely to hover at more ₹65,000 crore, part of the food sub- have been front-loaded in a It is only after Sep- fiscal position vaccination pro- of the demands of per MHz of spec-
than 90% of gross domestic sidy needs to be absorbed in this recession year and spent espe- tember many of gramme for 3 crore the industry trum in the
T.V. Somanathan
product (GDP) over the next (fourth) quarter. These are big- cially during the September the work sites for Expenditure secretary
people —it is fully body, which has Reliance Jio 3,300-3,600MHz bands, ideal
few years. Stating that fiscal ticket, lumpy expenditures. So, we quarter when government capital works funded by the Cen- Infocomm Ltd, Bharti Airtel for 5G.
consolidation has taken a back are very likely to reach that figure. expenditure contracted? opened. So trying tre. When we come Ltd and Vodafone Idea Ltd as The telecom industry had
seat in the budget, S&P said The extrapolation this year is going Instead of counter-cyclical sup- to force people to spend money at to a more advanced stage of the first members, were met with in also sought a fund that would
aggressive provisioning to help to be very misleading. In the first six port, aren’t you providing pro- that time would have led to agencies phase of vaccination, it will be the budget. support the growth of India’s
heal the economy will be costly. months, expenditure was artificially cyclical support? simply releasing the money and it decided separately after consulta- “We are a bit disappointed digital infrastructure crucial
The government’s 9.5% fiscal restricted. The restrictions on That’s true. We felt that there is would have landed up in some- tion with states. It will be decided that concerns of the telecom for the next generation wire-
deficit projection for current expenditure were imposed till the no point in attempting to spend body’s bank account without being much before the start of the next sector, which is the backbone less service, said Anand Agar-
+ fiscal was bigger than the rating end of Q2 (September quarter). money at a time when the economy spent. We felt timing was important. financial year. of digital India, remained wal, group chief executive offi-
agency’s expectation. They have been relaxed and was physically under health restric- The expenditure push should be For full interview, go to livemint.com unaddressed. As the operators cer, Sterlite Technologies Ltd.
“The prospect of consolida-
tion from these heights, while
maintaining a significant
degree of support for the econ-
omy, poses a stout challenge to
India’s policymakers. The gov-
ernment will seek to balance its
spending imperative against its
Social media cos tighten fake news curbs Continuum’s $560 mn bond
limited fiscal headroom by con-
solidating its finances at a much
slower pace than it planned
Saumya Tewari
saumya.t@livemint.com
sale sees over $3 bn demand ones that are not correct as
false. This could include false
transparency report that cov-
ered data from 1 January 2020
prior to the pandemic,” S&P NEW DELHI claims about the safety, effi- to 30 June 2020, Twitter said
said in a statement. The gov- cacy, ingredients or side-effects its teams took enforcement Swaraj Singh Dhanjal presence of World Bank arm generation capacity, of which
S
ernment has announced a fiscal ocial media platforms of the vaccines. Pages and action against 4,658 accounts swaraj.d@livemint.com International Finance Corp. as around 757 megawatts (MW) is
deficit glide path to lower fiscal such as Facebook, Insta- groups that share hoaxes and for violations of the policy MUMBAI the anchor investor, said a per- operational, 154MW is under
deficit to 4.5% of GDP by FY26. gram, WhatsApp, Twitter conspiracy theories are being regarding misleading informa- son aware of the details of the construction and 150MW is
M
“India’s budget for fiscal and Google are in overdrive to brought down in the news feed tion on covid released in March organ Stanley-backed bond sale. ready to construct, interna-
2022 represents a comprehen- combat misinformation and reducing their visibility. Ads or last year. The social media plat- Indian green energy “Initial price guidance was tional rating agency Fitch said
sive effort by the central gov- fake news as India looks to organic posts that promote the form’s automated systems producer Continuum at 4.875%, while final price in a note last week.
ernment to shore up the coun- extend its covid-19 immuniza- sale of or expedite access to vac- challenged 4.5 million Green Energy Ltd’s debut dol- guidance is at 4.5%. The bond Also on Tuesday, state-
try’s nascent economic recov- tion programme. The sites are cines will be rejected. accounts that were targeting lar bond issuance of $560 mil- issue has been rated BB+ by owned lender Power Finance
ery. But the brawny spending tracking vaccine-related texts, “We will continue to remove discussions around covid-19 lion on Tuesday witnessed Fitch Ratings and Ba2 by Corp. (PFC) said that it has
programme also entails higher- photos, and videos, doing fact- misinformation about covid-19 with spam or manipulative strong demand, resulting in an Moody’s. Order raised $500 mil-
than-expected general govern- checking, labelling posts, and Google announced a $3 mn that could lead to imminent behaviour. order book of over $3 billion. book at the time The successful lion through dol-
ment deficits,” S&P said. even taking down misleading fund to fight misinformation physical harm and direct peo- Digital experts believe that The successful fundraise of of final price gui- fundraise comes a lar bonds with a
S&P had last month revised content and ads. around covid jabs. BLOOMBERG ple to our covid information these platforms need to pre- comes a day after finance min- dance stood at day after govt 10-year maturity.
upward its forecast for India’s Google has announced a $3 centre. In December 2020, we serve data regarding their ister Nirmala Sitharaman $3.2 billion,” he announced a “This is the
real GDP growth to (-)7.7% for million fund to fight misinfor- more than 40 countries and began removing false claims treatment of vaccine related announced a major boost in said. longest tenor
FY21, from (-) 9% previously,
major boost in
mation around covid-19 vacci- dozens of languages, with more about vaccines and will regu- misinformation, so that causa- infra spending in the Union Deutsche Bank bond issuance
but said it will take a long time nes globally and said it is work- rolling out in the coming larly update the claims we tion between such content and budget. The central govern- is lead banker on infra spending in from India since
for India’s economy to heal. ing on rolling out information weeks. The information visible remove over coming months. real-life events can be found. ment capex is projected to the transaction. the Union budget the start of the
“We estimate that GDP per panels on Search connecting on these search panels is from For content we don’t remove, “Additionally, these plat- touch ₹5.54 trillion next fiscal, Standard Char- year. The bonds
capita will fall below $2,000 in people to authorized informa- authoritative sources, includ- we work with independent forms have to create a higher while FY21 will close at ₹4.4 tered Bank and have a fixed cou-
fiscal 2021, and that the broader tion when they search for infor- ing India’s ministry of health fact-checkers to place warning degree of friction between trillion. JPMorgan were among banks pon of 3.35% p.a. which was
economy will only recover to its mation about covid vaccines. and family welfare and other labels to help people make users and misleading content, The demand for the Contin- that advised on the transac- inside the fair value of PFC’s
pre-covid output level in the Google will roll out these pan- globally recognized medical informed choices,” said a Face- going beyond labelling posts uum bond sale from foreign tion. secondary bonds. The order
next fiscal. Nevertheless, els in languages such as Hindi, resources,” said the Google book India spokesperson. and tagging them. These investors could indicate a Continuum plans to use the book amounted to around
India’s economy is clearly Bengali, Kannada, Malayalam, India spokesperson. Twitter is also labelling actions often go unnoticed by a growing appetite for Indian proceeds from the proposed $2.55 billion, achieving an
building momentum, and we Tamil and Telugu. Facebook has eight fact- tweets that advance unsubstan- large number of users as they infrastructure because of the notes mainly to refinance oversubscription of 5.1 times,”
forecast real GDP growth of “To help find accurate and checking partners covering 11 tiated rumours, disputed are mostly in English,” said government’s intent to spend existing debt at certain operat- PFC said.
10% in fiscal 2022 as activity timely information on vacci- Indian languages and English claims, as well as incomplete or Torsha Sarkar, a researcher at more on the sector. ing entities. The proceeds will be used
resumes and the country con- nes, we’ve expanded our infor- who are checking vaccine out-of-context information Bengaluru-based think tank The demand for the bond Continuum has a portfolio for on-lending to power sector
tinues to reopen,” it said. mation panels on Search to related posts and labelling the about vaccines. In its latest Centre for Internet and Society. sale was also driven by the of about 1 gigawatts (GW) of utilities.
Russia’s Sputnik V vaccine found

m MINT SHORTS acquire 100% of the issued and paid-up equity share capital of
Kottaram Agro Foods for a consideration of ₹155.8 crore, TCPL
said in a filing to the exchange. The said acquisition is in line with
the company’s strategic intent of entering into new adjacent cate-
CBSE Class X, XII boards to
begin 4 May, will end on 11 Jun
HT
91.6% effective in Lancet study
Paris: Russia’s Sputnik V vac- AP
‘Govt willing to discuss issues of gories in the food space, it said in its filing. The deal now gives cine,which Moscow is already
Tata Consumer Products a stronger play in the packaged foods rolling out, is 91.6% effective
farmers inside and outside Parl’ market; it already sells pulses, spices and ready-to-cook mixes against symptomatic covid-19,
PTI New Delhi: The government on under the Tata Sampann brand. SUNEERA TANDON according to results published
Tuesday asserted in Lok Sabha that it Read more on livemint.com Tuesday. The new analysis of
was ready to discuss issues related to data from 20,000 Phase 3 trial
farmers both inside and outside Parlia- participants, published in The
ment amid vociferous protests by the JSW Energy to end resolution plan Lancet , suggests that the two-
Opposition which forced the House to dose vaccination offers more
adjourn twice. “Government is ready
to take over Ind-Bharat Energy than 90% efficacy against symptomatic covid-19. AFP
to discuss issues related to farmers Mumbai: JSW Energy Ltd has decided to terminate its resolu-
inside and outside Parliament,” he said tion plans to take over the stressed thermal power asset Ind-Bha-
amid sloganeering by opposition rat Energy (Utkal), according to an exchange notification from Canara Bank raises ₹ 120 crore by
members. the company on Tuesday. The company said a “material adverse New Delhi: The Central Board of Secondary Education
PTI
BLOOMBERG event” during the 15 months after the (CBSE) announced on Tuesday the schedule for Classes X
issuing Basel III compliant bonds
plan was submitted has led it to with- and XII board exams which will begin on 4 May. According New Delhi: State-owned Canara Bank on Tuesday said it has
Tata Consumer Products signs deal draw its resolution plan. A person to the datesheet, the exams for Class X will conclude on 7 raised ₹120 crore by issuing Basel III compliant bonds. The bank
aware of discussions within JSW June, while those for Class XII will end on 11 June. The has issued and allotted Basel III compliant additional tier I bonds
to acquire Kottaram Agro Foods Energy said deterioration in the value exams for Class XII will be conducted in two shifts to amounting to ₹120 crore, Canara Bank said in a regulatory filing.
New Delhi: Tata Consumer Products Ltd (TCPL) on Tuesday of assets held by Ind-Bharat after the reduce the number of exam days. Over 3.4 million students The bank said it has allotted a total of 1,200 bonds to two sub-
said it has signed a definitive agreement to acquire a 100% stake resolution plan was submitted resulted have registered this year for Classes X and XII examina- scribers. The bonds carry an 8.30% coupon rate. The stock of
in Kottaram Agro Foods—the maker of Soulfull brand of break- in the withdrawal. TANYA THOMAS tions. PTI Canara Bank closed 3.06% higher at ₹146.50 apiece on the BSE.
fast cereals and millet-based snacks. The company has agreed to Read more on livemint.com PTI
X
CORPORATE WEDNESDAY, 3 FEBRUARY 2021
AHMEDABAD 07
TOP ST RIES
‘Third-party reporting A REASSURING BUDGET FOCUSED ON
GROWTH, INVESTMENT AND JOBS
will boost compliance’ EXPERT
ment. We need to utilize these funds well, including cre-
ating cold chain infrastructure and digital platforms for
surveillance and pandemic preparedness. Post-2021, we
need to allocate such funding to immunize our popula-
Gireesh Chandra Prasad VIEW tion for various viral diseases as well as non-communica-
gireesh.p@livemint.com ble diseases like cancer, diabetes, cardiac disease and res-
NEW DELHI Tax certainty has Kiran Mazumdar-Shaw piratory illness. Increasing healthcare spend in procuring
been one of the key covid-19 vaccines this fiscal is directionally vital, and I
T
he budget has sought to iron Respond to this column at welcome this massive support for a preventive healthcare
out tax policy and offered ease goals of this year’s feedback@livemint.com strategy.
of compliance while trying to budget. The time Further, this budget has gone beyond direct healthcare
B
ensure certainty in tax rates. period for reopening udget 2021 has given a massive push to healthcare and addressed well-being through a focus on sanitation,
One major factor that will and infrastructure with a focus on growth, invest- nutrition and pollution control. The government has
guide tax administration in the future of assessment has ment and jobs. The massive investments envisaged done very well in terms of increasing the investment in
would be information gathering from also been lowered. by the finance minister to quickly generate large-scale health and well-being by 137% over last fiscal to ₹2.24 tril-
third parties about transactions that will employment to bring back millions of jobs lost due to the lion. I hope this is not a one-time spike but part of a trend
help the income tax department nudge PRAMOD C. MODY Subsidy on pandemic necessitate mega funding. A substantial ~16% that will take public spending on healthcare to the tar-
Chairman, Central Board of kerosene
taxpayers to comply, explains Central Direct Taxes eliminated via
share of this year’s budget has been set aside for the crea- geted 2.5% of GDP by 2024.
Board of Direct Taxes (CBDT) chairman small price tion of long-term assets or capital expenditure versus We need to remember that India has one of the highest
Pramod Chandra Mody in a post-budget hike, now ~13.6% last year. levels of out-of-pocket expenditure on healthcare in the
interview. Edited excerpts: priced at To fund this massive infrastructure push, the budget world, which contributes directly to the high incidence
market rates
While personal income tax receipts bit.ly/3rfZWNO
has announced ambitious plans to privatize central pub- of catastrophic expenditures and poverty. As pointed out
projected for FY22 have crossed pre- lic sector enterprises, monetize public sector assets, in the Economic Survey, an increase in public health
pandemic levels, corporate tax including government land banks, ease foreign direct expenditure from the current levels of 1% to 2.5-3% of
receipts estimated for FY22 are investment (FDI) limits in sectors like insurance and float GDP can reduce out-of-pocket expenditure from the cur-
lower than pre-pandemic levels. voluntary. proposed for taxpayers is available in zero-coupon bonds for infrastructure debt funds. rent level of 65% to 35%.
Why is it so and how will you address But has widening the tax base taken cases where the disputed income is While the steps taken in the budget are in the right The finance minister had announced the National
this? a back seat? up to ₹10 lakh. Isn’t that a low direction, the government needs to partner with the pri- Research Foundation (NRF) in July 2019 and in her bud-
The corporate tax rate was slashed The number of tax returns filed has threshold as the tax liability in such vate sector to spur a rapid economic recovery. It should get speech said its outlay will
substantially. So, as far as personal more than doubled from what was the cases would be around ₹3.3 lakh? enable India’s large private industry to grow at scale and The govt needs be ₹50,000 crore over five
income tax is concerned, making infor- case in 2014. (Return filers rose from 3.3 If you see the nature of disputes, they be globally dominant by relaxing regulations and provid- to partner with years. While this is a very wel-
mation available to the taxpayer upfront crore in 2014 to 6.48 crore in 2020). were largely falling in the lower end of ing fiscal incentives to attract long-term investors. come development and will
in form 26 AS (tax credit statement) cou- Now, with more of third-party reporting the tax bracket (small taxpayers). To give The healthcare sector is one area where the private sec- the private strengthen the research and
pled with simplification of processes and of details, say bank interest, share market a better facility of alternative dispute res- tor can create the kind of scale that is needed to address sector to spur a innovation ecosystem in the
better taxpayer services being made transactions etc, and that information olution, the scheme was brought in. India’s challenges. rapid economic country, I am a bit disap-
available should usher in that change in being made available to taxpayers in the Since a majority of the disputes is in this The private sector can provide a mix of goods and ser- recovery pointed that the private sector
personal income tax for individuals to tax portal, coupled with the ease with bracket, we should first give them this vices, including direct provision of health services, vacci- did not receive any kind of
comply with their tax obli- which he can discharge his opportunity and see the experience. That nes, medicines and medical products, financial products, research and development
gations. Broadly this is m INTERVIEW filing and post-filing proc- is the time when we can take a (fresh) call training for the health workforce, information technol- (R&D)-related incentives. I believe the private sector has
what is behind the trend. ess, should all be a great on the threshold. ogy, infrastructure and support services. It can thus com- a very important role to play in research and innovation
What are the direct tax goals in this motivator for voluntary compliance. This Over the years, the tax policy was to plement the government’s welcome move to develop in India.
budget? will also help us in pre-filling the return. do away with tax breaks that compli- India’s primary, secondary and tertiary healthcare infra- A much stronger focus on industry-academia partner-
Tax certainty has been one of the key A liberal corporate tax rate without cated law and lead to litigation. But structure through a new scheme with an outlay of more ships is an absolute must for a robust research and inno-
goals of this year’s budget. The time tax incentives was offered in 2019 now these are coming back, afforda- than ₹64,000 crore to be spent over six years. vation ecosystem in India.
period available for reopening of assess- and it was followed up with a similar ble housing, for example. Is this not The allocation of over ₹35,000 crore towards covid-19 The government’s decision to raise the allocation for
ment has been lowered and no new taxes scheme for individuals. What has a U-turn? vaccination is promising, given the government’s strong education in this year’s budget is also commendable.
have been added. All these should give been the response? No. The tax relief given to affordable focus on immunization. We do not have a shortage of vac- The moot question now is how quickly can we raise
that sense of certainty to taxpayers. The The tax filing season is yet to get over. housing has been extended by another cines in India, unlike many other countries globally, and finance and fund these ambitious projects. Timing is
ease of compliance is another goal. This It is difficult to say what has been the year because of the exceptional circum- the need of the hour is to deploy these vaccines at scale extremely critical to bring back the jobs lost to the pan-
helps taxpayers to file his submissions on response at this juncture. But at the same stances we are in. People could not start and speed. We have seen how the private sector helped demic. The government must speed up the process of
time. Getting tax matters settled in a time, the expectation is that people will their project or the individual taxpayers scale up covid-19 testing in the country. monetization of assets so that it can invest in all the sec-
transparent manner from the comfort of opt for the new regime because it simpli- could not make the best use of the pack- Covid-19 vaccination can be similarly ramped up if the tors as planned. Taken together, these measures will be
one’s house and without having to visit fies the whole structure apart from the age given to them in these times. It is only government involves the private sector in the immuniza- able to spur a V-shaped growth recovery of the Indian
the income tax office is a great thing to lower rates which in themselves are to support them that this relief has been tion drive, to ensure the vaccines reach at least half the economy after the covid-19 hit. Overall, this was a reas-
cheer. We are trying to give the best pos- encouraging for both companies as well extended by another year. It does not go country’s 1.3-billion population in the shortest period of suring budget with no negative surprises that has buoyed
+ sible service to the taxpayer that is feasi- as individuals. We will have a clearer pic- against the basic grain of doing away with time. all-round sentiment.
ble and possible. The taxpayer should ture when the first filing season gets over. tax exemptions. A specific end date has I think ₹35,000 crore is a serious budgetary allocation Kiran Mazumdar-Shaw is executive chairperson, Bio-
feel motivated to comply with the laws The new dispute resolution scheme been given to incentives. that needs to be spent wisely beyond vaccine procure- con Ltd.
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X
AHMEDABAD
TOP ST RIES
Markets rally on budgetary Better FTAs can benefit mega
textile parks scheme: experts
push, but upside is limited Suneera Tandon &
Shuchi Bansal
NEW DELHI
U
nion finance minister
Despite valuation concerns, analysts hope that reforms will result in a quicker revival Nirmala Sitharaman’s
announcement of set-
ting up seven mega textile
Nasrin Sultana parks over the next three years
nasrin.s@livemint.com
Scaling heights could prove to be the much-
MUMBAI
The Sensex touched the needed push for India’s textile
50,000-mark once again, recovering
around 8% in less than a fortnight as
and apparel export industry,
C
ontinuing budget it drew comfort from budget-led which has lost out to Asian
frenzy and optimism spending plans.
Tech peers over the past few years.
billionaire
over growth boosters Elon Musk
Sitharaman had in her bud- The textile and apparel industry is among the top employers in
50,000 49,797.72
proposed by the gov- 49,792.12 says he’s off get speech said mega invest- India, providing direct employment to 45 million people. MINT
ernment drove a robust Twitter ‘for a ment textile parks will enable
market rally for the second straight while’ the industry to become glo- “Whether we will partici- Others agreed. Government
Sensex bit.ly/3oHdqA
day on Tuesday. The Sensex 49,000
v
bally competitive, attract large pate in the scheme or not investments will be counter-
touched the 50,000 mark once investments and boost needs careful consideration. productive if India doesn’t
again, recovering around 8% in less employment generation. However, prima facie it is an strike better trade deals, they
than a fortnight as it drew comfort 48,000 Garment industry experts exciting opportunity,” he said. said. “These parks will do no
from spending plans that are said the plug-and-play model Setting up of textile parks good to anybody unless global
expected to spur growth in a limping announced by the Centre along with the production- textiles firms invest in India,”
economy. 47,000 could be a game-changer. “It linked incentive scheme for said a consultant on the condi-
The BSE Sensex gained 1,197.11 will eliminate a huge require- technical textile and man- tion of anonymity. “You need
points or 2.46% to close at 49,797.72 46,285.77 ment of capital expenditure made fabric producers and global competitive advantage
while the Nifty jumped 366.65 (29 Jan) and funds,” said Rahul Mehta, reduction in customs duty for for investment in textile parks
46,000
points or 2.57% to 14,647.85. Global 20 Jan 2 Feb chief mentor, Clothing Manu- caprolactam, nylon chips and to come in so that manufactur-
peers were supportive with markets Kotak Securities has upgraded its target on both Sensex and Nifty to Source: Bloomberg facturers Association of India. nylon fibre to 5% will help ers can feed both the Indian
in China, Japan, Hong Kong, and 51,000 and 15,000, respectively by December. MINT Plug-and-play apparel exporters and global markets,” he said.
South Korea rising around 1%. alludes to availa- India’s textile and enhance their The US and the EU together
Despite the heated valuation con- What worries analysts about the Nomura believes the budget may to fiscal policy in 2021. bility of ready apparel exports share in global account for 64% of India’s
cerns, analysts are optimistic that budget is that its provisions may cre- have increased the probability of a According to Motilal Oswal infra in terms of are expected to markets over the readymade garment exports.
the capex increase and supply side ate inflationary risks. downgrade from Fitch. Financial Services, there was no power, roads and reach $300 bn by medium term, India’s share in such exports to
reforms will lead to a quicker eco- “We see risks in inflation height- “Of the two rating agencies with a material push for consumption in accessibility. according to the US and the EU remained
2024-25, tripling
nomic revival in India following the ened by the expansionary push, negative outlook for India, we the budget. “The move is a Hetal Gandhi, stable at 4-6%, while that of
pandemic. “The budget was more global stimulus and liquidity sup- believe the budget may have “However, we note from Q3FY21 big boost for the its share in global director, textiles, competitors improved over
positive for equities, less so for port, in all of which India has been a increased the probability of a down- corporate earnings that consump- textiles industry trade to 15% CRISIL Research. the last five years, CRISIL said.
bonds given larger-than-expected beneficiary, and the markets possi- grade from Fitch,” it said in a note on tion demand revival is progressing in India. China is “ W ha t ha s India’s exports in the tex-
supply and the slower pace of deficit bly not pricing it in,” quite well, with high the largest sup- become a bigger tiles and apparel industry are
normalization,” said Goldman Sachs said analysts at FUTURE TENSE double-digit vol- plier of garments to the world. issue is our capability to inno- expected to reach $300 billion
in a note on 2 February. Edelweiss Securi- ume growth foot- Bangladesh and Vietnam have vate and invest in better by 2024-25, tripling the coun-
Kotak Securities has upgraded its ties. They said the BSE Sensex gained A key worry among SOME fear that rating prints from many also come up really well designs and, more impor- try’s share in global trade from
target on both Sensex and Nifty to economy, with pol- 2.46% to close at
49,797.72 while the
experts about the
budget is that its
agencies may view
the budget negatively,
staples and discre- because of low-cost structures tantly, as a country, our ability 5% to 15%, according to infor-
51,000 and 15,000 respectively by icy support, too, Nifty jumped 2.57% provisions may result given their focus on tionary companies. and trade agreements. With to negotiate free trade agree- mation on the Invest India
December on expectations of more needs to “catch up”. to close at 14,647.85 in inflationary risks medium-term funds There is no large fis- the help of 7 plug-and-play ments (FTAs). If you look at portal. India is largely profi-
earnings upgrades following the The budget cal stimulus, but the parks, India could emerge as a countries such as Vietnam and cient in manufacturing casual
budget. “Our revised 2021 end Nifty upfronts its spend, absence of tax hikes strong global player in textile Bangladesh, the latter has an wear garments and produc-
earnings per share (EPS) estimate but does not go directly to the lower Tuesday. According to Nomura, set- and better fiscal math by this and garments exports,” said FTA with the EU, which gives tion of cotton, silk and jute.
works to ₹770. Assigning a slightly end of the consumer, a significant ting a significantly higher fiscal defi- renewed and bold government pro- Sanjay Jain, chief executive it an upper hand when it India’s textile and apparel
higher multiple of 19.5 times gives us part of the demand chain that could cit target of 9.5% of gross domestic vides extreme comfort,” it said. officer at PDS Multinational comes to export of readymade industry is among the top
a target of 15,000 for the Nifty for well remain at risk. product (GDP) in FY21 indicates After the budget, the market Fashions, which offers prod- garments compared to India,” employers in the country, pro-
the end of CY21,” Rusmik Oza, exec- Some analysts fear that global rat- “kitchen sinking”, the practice of focus will return to the fundamen- uct development, sourcing, Gandhi said. India needs to viding direct employment to
+ utive vice president and head, fun- ing agencies may view the budget lumping all the bad news together, tals, corporate earnings growth and design and manufacturing ser- move up the value chain and 45 million people and 60 mil-
damental research, PCG, Kotak slightly negatively, given their focus and the baton of driving growth may the Reserve Bank of India’s mone- vices to global retailers such as produce more high-value, lion people in allied industries.
Securities, said. on medium-term fiscal finances. shift from monetary policy in 2020 tary policy this week. Superdry, Primark and Next. readymade garments, she said. suneera.t@livemint.com
IOC looks to monetize its pipeline assets Tax breaks could result in foreign aircraft
Kalpana Pathak
kalpana.p@livemint.com
leasing firms setting up shop at GIFT City ters of pipeline was installed
during 2020.
MUMBAI IOC’s pipelines are mostly
dedicated lines stretching Rhik Kundu which the owner sells the air- “...the government is com-
I
ndian Oil Corporation Ltd from its refineries to the mar- rhik.k@livemint.com craft and then takes it back on mitted to make the Interna-
(IOC) is considering the ket in the case of products and NEW DELHI lease from the buyer. This kind tional Financial Services Cen-
sale of stakes in a few of its from refineries to ports in the of deal typically removes the tre (IFSC) in GIFT City a global
F
network of crude oil and case of crude oil. oreign aircraft leasing aircraft and its associated debt financial hub. In addition to
petroleum product pipelines “We were contemplating companies could open from the carrier’s balance the tax incentives already pro-
as part of an asset monetiza- why our market capitalization offices in India after the sheet. vided, I propose to include,
tion plan, Sandeep Kumar is so low and what could be Union budget announced Indian carriers also regu- among others, tax holiday for
Gupta, director in-charge of the measures for increasing incentives for them to estab- larly lease planes from foreign capital gains for aircraft leas-
finance of the state-run the same and unlocking the lish base at the International lessors. ing companies,
refiner and marketer, said on real worth of our asset. So, we Financial Services Centre Zhang said All major Indian tax exemption for
Tuesday. will experiment initially with (IFSC) in GIFT City (Gujarat), China, one of the airlines currently aircraft lease
IOC, however, would not perhaps offloading a small two senior executives of air- world’s largest carry out their rentals paid to
relinquish its control of these IOC would not relinquish control of biz post stake sale. BLOOMBERG stake through asset monetiza- craft leasing companies said. The move is part of efforts aviation markets, leasing activities foreign lessors,”
businesses, he said. tion soon,” said Gupta. “This (budget announce- to make the IFSC in GIFT City did not have finance minister
in countries
Finance minister Nirmala investment trusts that act as have evinced interest in them, The purpose of this mone- ment) is the first step,” said a global financial hub. AFP many aircraft Nirmala Sithara-
Sitharaman in the Union bud- an innovative vehicle, ena- Gupta said. tization, the company said, is Zhang Weiqun, senior man- leasing compa- such as China, man said in her
get on Monday announced bling direct During calen- to improve capital expendi- ager, aviation leasing depart- “Various taxes on the avia- nies till about 12 UAE and Ireland budget speech.
the monetization of oil and investments of The purpose of dar year 2020, ture of various projects under ment, CMB Financial Leasing tion sector in India is very high years ago. But, Indian tax laws
gas pipeline assets of IOC, gas small amounts of monetization is to IOC added 296 IOC. Company. though there is demand with since then, the mandate all for-
utility GAIL (India) Ltd, and money from improve the kilometers to its GAIL is also said to be plan- Foreign aircraft lessors will Indian airlines placing huge sector has opened up and eign companies in the country
Hindustan Petroleum Corpo- investors in an capex of the pipeline net- ning to launch an InvIT of its consider several factors before orders from aircraft manufac- China currently hosts a num- to file a corporate tax return in
ration Ltd. infrastructure
various projects work. With this,
two gas pipelines between starting operations in a partic- turers,” the official said. ber of leasing companies, he India if they have a local source
“One model could be InvIT project. This the company’s Dahej and Bengaluru. The ular country, including Major Indian airlines, added. of income. This often discour-
and it’s not necessary that we earns them a under Indian Oil total pipeline company, much like IOC, demand, tax incentives and including the top domestic In a bid to attract foreign air- aged the foreign lessors from
do a 100% stake sale of such small portion of Corporation network spans plans to retain a majority access to money since the sec- operator IndiGo that have a craft lessors to set up shop in starting operations.
assets and not necessarily income as a 14,864 kilome- stake in the pipelines. tor is capital intensive, said a huge aircraft order book, con- the country, the government All major Indian airlines
club all pipelines together,” return. ters. Shares of IOC closed 3.08% second senior official from a duct sale and lease-back (SLB) on Monday rolled out tax currently carry out their leas-
Gupta said in a conference IOC’s pipeline assets offer Despite the lockdown higher at ₹98.80 on the BSE major aircraft leasing corpora- of planes to remain asset-light incentives for companies that ing activities in countries such
call with analysts and inves- huge potential for unlocking imposed to contain the spread on Tuesday, while the bench- tion, who spoke on the condi- and profitable. are willing to set up shop at as China, Hong Kong, UAE
tors. InvITs are infrastructure value and many investors of coronavirus, 1,435 kilome- mark index rose 2.46%. tion of anonymity. An SLB is a transaction in IFSC. (Dubai) and Ireland.
Trai issues recommendations on regulatory framework for platform services

Lata Jha offer their own set of channels tions, these had been put on gestion that the ministry will draw from distribution or can- ensure and provide an under-
lata.j@livemint.com in addition to broadcaster- hold. obtain security clearance of all cel registration. taking to the ministry that the
NEW DELHI owned options. According to the current MSOs or local cable operators The regulator agrees that programme transmitted is
The recommendations cov- recommendations, Trai has no who wish to offer the platform servi- exclusive to their platform and
T FRESH
he Telecom Regulatory ered distribution platform objection to accepting the platform services ces may be defined not shared directly or indi-
Authority of India (Trai) operators (DPOs) who provide ministry’s view that anybody and were not GUIDELINES as programmes rectly with any other DPO.
has given its recommen- programming services specific registered as a DPO shall be cleared by the transmitted by The platform services chan-
dations on a back reference to their platform and not eligible to carry platform servi- ministry of home THE norms cover DPOs exclusively nels shall be categorized under
from the information and obtained from satellite-based ces channels, provided that affairs at the time DPOs who provide
programming
to their own sub- platform services in the Elec-
broadcasting (I&B) ministry on broadcasters. Unlike regular the ministry is able to specify of registration. services specific to scribers and do not tronic Programmable Guide
Trai’s earlier guidelines on the broadcast of TV channels, compliance structure to If at any time their platform include Doordar- (EPG) subject to orders or reg-
regulatory framework for plat- these programming services ensure that those providing before the ministry shan channels and ulations issued by Trai from
form services offered by are either produced by DPOs platform services make full obtains the clear- UNLIKE regular registered TV time to time and a provision
broadcast of TV
direct-to-home (DTH) and itself or are sourced from local disclosure on ownership status ance, it is deter- channels, these channels. for putting a caption identify-
cable operators. content producers. and comply with the progra- The Trai guidelines are for DTH services, cable and multi-system mined that the services are Platform servi- ing them as may be required to
Trai had released a consul- Trai had first issued recom- mme and advertising codes. operators who offer their own set of channels. MINT programming ser- produced by DPOs ces shall not distinguish platform services
tation paper in December mendations for cable and MSO The regulator recommends vice offered is include foreign TV from linear channels. The
seeking views on regulatory services in 2014, but as the dig- that any entity desirous of pro- vices, must be incorporated as platform services channels inimical to India’s channels that are respective maximum retail
guidelines recommended for itization of TV distribution was viding local news and current a company under the Indian may be offered by MSOs, IPTV national security or to the pub- not registered in India. price (MRP) of the platform
DTH services, cable and multi- incomplete and the I&B minis- affairs as platform services, or Companies Act, 2013. operators and HITS operators. lic interest, the ministry may The DTH operator, MSOs, service shall be displayed in
system operators (MSOs), who try had suggested modifica- is already providing such ser- Further, a maximum of 15 Trai also agrees with the sug- require the platform to with- IPTV or HITS operator shall the EPG against each service.
X
AHMEDABAD 09
TOP ST RIES
Setback for Bitcoin trades at
Future as Govt’s ₹35,000 cr outlay 20% discount on
Delhi HC
halts deal
for shots to boost demand crypto bill jitters
with RIL Abhinav Kaul
abhinav.kaul@livemint.com
FROM PAGE 1 Industry execs expect the budget allocation to be sufficient for India’s vaccine drive NEW DELHI
I
Group founders, including its ndia’s upcoming ban on pri-
promoter Kishore Biyani, and Leroy Leo vate cryptocurrencies has
seizure of their assets for violat- leroy.d@livemint.com taken a toll on their prices in
ing the tribunal order. NEW DELHI the country, with bitcoin now
The tribunal passed an trading at a 20% discount to
V
interim order favouring Ama- accine manufacturers global prices, against a 10% pre-
zon in October, barring Future and ancillaries are Pfizer mium until a few days ago.
forecasts
Retail from taking any steps to anticipating strong sales of $15
The Cryptocurrency and
sell or encumber its assets. demand from the gov- billion from Regulation of Official Digital
“The respondents (Future ernment for covid-19 Covid-19 Currency Bill, 2021, expected Bitcoin and ether used to trade
Retail) are directed to file an vaccines alone after the government vaccine in to be passed in Parliament’s at 10% premium in India as
2021
affidavit to place on record the announced plans to procure covid bit.ly/3pIlrGD
ongoing budget session, comes opposed to global peers. AP
actions taken by them after shots worth ₹35,000 crore, esti- after the Supreme Court last
October and the present status mated to be enough to vaccinate year quashed an RBI ban on lowing in the footsteps of
of all those actions, within days. roughly half the population. crypto-related payments. developed counties when it
All the concerned authorities “The generous outlay of ₹35,000 “Since a cryptocurrency comes to technical innovation
are directed to maintain status crore for covid vaccination will draft bill leading to its ban has and it is time for governments
quo with respect to matters of cover the procurement of vaccines got listed in the items for dis- and regulators to look at how
violation of the order dated 25 and auto-disable syringes, as well as cussion during this budget ses- this has played out there more
October and shall file the status the logistics and drug delivery costs sion, the industry is in panic. closely before making knee-
report with respect to the for a substantial number of high risk We have seen some panic sell- jerk reactions,” he added.
present status within 10 days and vulnerable population,” said ing as well, which has led to The Reserve Bank of India
(of) the receipt of this order,” Rajiv Nath, managing director, Hin- reduced prices of cryptocur- recently said that it is exploring
ruled justice J.R. Midha. The dustan Syringes and Medical Devi- Vaccine manufacturers and ancillaries are expanding their capacity after the budget announcement. BLOOMBERG rencies. Bitcoin and ether, whether there is a need to issue
judge said a detailed order ces, one of the world’s largest mak- which used to trade at 10% pre- a digital version of the rupee in
specifying the reasons will fol- ers of syringes for vaccination. duction capacity by 100 million pie- Krishna Ella said the ₹35,000 crore enough to procure around 1.5 billion mium compared to global mar- the country.
low soon. The company is producing 2.4 ces from its manufacturing sites budget for covid-19 vaccination and doses if the average procurement kets are now trading at 20% dis- “We’re proud that RBI is
Biyani’s Future Group, million syringes per day and will based in Gujarat and Daman,” Ris- the finance minister’s commitment price is similar to Serum Institute’s count,” said Sathvik Vishwa- exploring a digital rupee built
which needs to complete the scale it up to 4 million by September had Dadachanji, the director of Kai- to providing more funds “will pro- Covishield vaccine and if the entire nath, co-founder, on a blockchain.
deal without delay to prevent a to meet demand from India and the sha group of companies, said. vide an effective, smooth path for cost is borne by the Union govern- Unocoin. The bill notes that Blockchain tech-
possible bankruptcy, has been rest of the world. Schott Kaisha, a supplier to the vaccination scheme”. ment, according to an industry offi- The bill, how- some exceptions nology not only
caught in the fight between two Hindustan Syringes’ capacity Serum Institute of India, had already Most industry executives expect cial who spoke on condition of ano- ever, says certain to promote the lowers costs, but it
of the world’s wealthiest men. expansion plans were already in begun investing ₹122 crore to boost the allocation to be sufficient for nymity. exceptions to pro- underlying tech of also improves
At stake is control of India’s place, while one of India’s largest annual capacity by 300 million pie- procurement of vaccines for all “It is difficult to say whether mote the underly- accounting since
cryptocurrency
retail market, estimated to glass vial manufacturers, ₹35,000 crore is enough ing technology of it is an immutable
reach $1.3 trillion by 2025, Schott Kaisha, late Monday PROCUREMENT PUSH this year or more will be cryptocurrency and its uses would ledger, which
amid a surge in online shop- announced further capacity required. The requirements and its uses would be allowed would give the
ping. expansion after the budget GOVT announced APART from THOSE above 50 and THE ₹35,000 crore for vaccine doses and its be allowed. On government new
Amazon and Walmart- presentation. plans in the budget procurement, the those below 50 but could be enough to funding will have to be Tuesday, Bitcoin tools to fight cor-
to procure covid amount will cover with comorbidities procure around 1.5
owned Flipkart together con- “This year’s unprece- vaccine shots worth logistics and drug can be vaccinated billion doses, says an reviewed based on whether was trading flat after hitting a ruption. However, creating a
trol over 80% of the Indian dented increase in the bud- ₹35,000 crore delivery costs too with this allocation industry official the pandemic is in control in high and a low of $35,645.87 government currency doesn’t
e-commerce market and have get allocation is reassuring India or not, whether there and $33,150.73, respectively require the banning of non-
been competing to make for the pharma industry as it is increase in the number of over the past 24 hours. It was government crypto assets. On
inroads into the traditional is working to provide for the mam- ces to 1.5 billion vials by December those above 50 years of age as well as cases because of mutant strains, the trading at $34,713.22 at 9 pm on the contrary, safely including
retail market in India. moth task of immunizing 1.3 billion and the further 100 million increase those below 50 years but with availability of more vaccines and Tuesday. all aspects of this new technol-
In a statement, Amazon said: Indians. As the first phase of the vac- will be completed by mid-2022, he comorbidities, apart from the their volumes, and whether more The contents of the bill are ogy will bring tremendous tax
“We have utmost respect for cine drive continues, Schott Kaisha said. healthcare and other frontline vaccines would lead to fall in prices,” unknown and have added to revenue and innovation,” said
+ the Indian legal system and has today announced a fresh invest- Bharat Biotech International workers who are being vaccinated. said K. Srinath Reddy, president of the panic, said Unocoin’s Vish- Rahul Pagidipati, chief execu-
appreciate the interim order of ment to further increase vial pro- chairman and managing director The ₹35,000 crore could be Public Health Foundation of India. wanath. “India is known for fol- tive officer at ZebPay.
the hon’ble Delhi high court to
uphold the enforceability of the
emergency arbitrator’s order
and maintain status quo.”
While a Reliance Industries
spokesperson declined to com-
ment, Future Group said, “the
company is legally advised that
A finserv app for women in the works Suu Kyi’s party demands her
the basis of the interim award of
the emergency arbitrator has
been superseded by the judge-
Tarush Bhalla
tarush.b@livemint.com
Microsave Consulting titled
‘The real story of women’s
release as generals tighten grip
ment dated 21 December, BENGALURU financial inclusion in India’
passed by the learned single states that 23% of Indian Reuters Kyi Toe also said NLD mem-
S
judge, Justice Mukta Gupta. hinjini Kumar, Paytm women still do not have access feedback@livemint.com bers of parliament detained
The company will explore all Payments Bank’s first to formal financial services. Of during the coup were being
T
legal remedies and take appro- chief executive, Aditi the 77% who do, 44% are dor- he party of Myanmar’s allowed to leave the quarters
priate steps to pursue the Sholapurkar, a member of its mant customers, due to lack of detained leader Aung where they had been held. Reu-
scheme of arrangement”. founding team, along with motivation, convenience, and San Suu Kyi called on ters was unable to contact him
On 21 December, a single- Chaitra Chidanand, co-founder regular income flow. Tuesday for her immediate for more information.
judge bench of the Delhi high of fintech startup Simpl, are “Through the venture, we release and for the military The UN Security Council
court allowed the deal to go gearing up to launch Salt, a want to promote the idea that junta that seized power a day was due to meet later on Tues-
through, subject to regulatory financial services venture for money and life choices can earlier to recognise her victory day amid calls for a strong
approvals. The order upheld women. work together. Often women in an election in November. global response to the mili-
the Singapore ruling and The venture is in stealth Paytm Payments Bank first CEO Shinjini Kumar (pictured), founder have to give up life choices The Nobel Peace laureate’s tary’s latest seizure of power in
declined Future’s plea to stop mode and will focus on finan- member Aditi Sholapurkar, and Chaitra Chidanand, co-founder of because certain things are not whereabouts remained Detained Myanmarese leader a country blighted for decades
Amazon from approaching cial products for women in Simpl, are gearing up to launch the finserv app ‘Salt’. MINT available to them. We want to unknown more than 24 hours Aung San Suu Kyi. AFP by army rule.
regulators to bar the Reliance- both metros and smaller cities. ensure that money isn’t that after her arrest in a military The US threatened to reim-
Future deal. Salt will look at expanding the to launch its app in May. everything to a colour and put- factor and they can make better takeover that derailed Myan- Naypyidaw on Monday along pose sanctions on the generals
The Competition Commis- scope and easing the use of Salt took shape after the ting the symbolism of a woman life choices, through their mar’s tentative progress with dozens of other allies but who seized power.
sion of India had approved the financial services for women by co-founders extensively stud- on debit cards to promote these money,” said Kumar, who has towards full democracy. her exact whereabouts have The coup followed a land-
deal in November, and the adopting a community-based ied the financial services space products to them. At Salt, we previously worked with A senior official from her not been made public. slide win for Suu Kyi’s NLD in
Securities Exchange Board of approach. It will partner with for women, identified the loop- are taking the approach of lis- Reserve Bank of India, Bank of National League for Democ- “There is no plan to move an election on November 8, a
India gave its conditional nod other financial institutions and holes, and realized that even tening from real women and America, and CitiGroup. racy (NLD) said he had learned Daw Aung San Su Kyi and Doc- result the military has refused
last month. Future Retail has look at offline distribution in working women continue to taking those insights to contex- “Women are more prudent that her health was good and tor Myo Aung. It’s learned that to accept citing unsubstanti-
already approached the Tier 2 and 3 cities. feel the pressure of not being tualise and build products. The customers and would not buy she was not being moved from they are in good health,” NLD ated allegations of fraud.
National Company Law Tribu- The co-founders of the Ben- able to control their finances, conversation also helps women anything just because it is mar- the location where she was official Kyi Toe said in a Face- The army handed power to
nal, Mumbai, for approval of galuru-headquartered firm for- they said. “Financial services connect dots and see money in keted that way,” said Chidan- being held after the coup book post which also referred its commander, General Min
the deal. mally came together in Sep- have historically taken a reduc- a new perspective,” Sholapur- and, who left the board of Simpl against her government. She to one of her allies. An earlier Aung Hlaing, and imposed a
feedback@livemint.com tember last year and are aiming tionist approach, reducing kar said. A recent report from to research for the new startup. was picked up in the capital post said she was at her home. state of emergency for a year.
Centre-funded plans face the axe Centre not to infuse equity into proposed bad bank
FROM PAGE 1 30 umbrella CSS account for should be kept stable,” the FFC FROM PAGE 1 over assets. “The IBA proposal lance Commission (CVC),” the structure. This will be regu-
about 90% of the total allocation said in its report tabled in Parlia- was for a bad bank backed by banker said on condition of lated by RBI, Panda said. The
schemes while reducing their under CSS. Many such schemes ment on Monday. these assets. Otherwise, with the sovereign; however, we can anonymity. DFI will initially be capitalized
proliferation. Many previous have, within them, a number of Finance minister Nirmala the passage of time, there will manage with what is being sug- Panda also said federal think with ₹20,000 crore of govern-
committees, including a sub- small schemes, some of them Sitharaman, in her budget be erosion in the value of these gested now. A decision has to be tank NITI Aayog will identify ment equity, allowing it to lev-
group of chief ministers under with negligible allocations. “A speech, said: “On the recommen- assets, and there will be no taken on the capital allocation the two public sector banks and erage debt of up to ₹5 trillion
NITI Aayog chaired by Madhya threshold amount of annual dation of FFC, we have under- buyer. So, that is the urgency,” strategy, and lenders will meet one insurance firm that the to provide financing to the
Pradesh CM Shivraj Singh appropriation should be fixed, taken a detailed exercise to Panda said. to discuss it,” the banker said on budget has proposed to priva- capital-starved sector.
Chouhan in 2015 said the ‘one- below which the rationalize...num- He said the initial capital for condition of anonymity. tize. NITI Aayog’s State-run India
size-fits-all’ approach of CSS was funding for a CSS Schemes with ber of CSS. This the bad bank has still to be esti- Another banker at State proposal will be Bad loan accounts I n f r a s t r u c t u r e
adversely affecting outcomes. may be stopped. low outlay will be will enable consol- mated, but added that a mini- Bank of India said the capital considered by a of above ₹500 cr Finance Co. Ltd
States have been urging the Below the stipu- consolidated to idation of outlays mum capital of ₹100 crore may requirement would not be a core group of will be moved (IIFCL) could be
Centre to transfer such funds lated threshold, the make them more for better impact.” suffice. problem for banks at the secretaries, and a under the new subsumed into this
directly to them so that they can administrating The FFC said In May, the Indian Banks moment, given the amount of final decision will DFI, Panda said.
impactful, the entity, financial
design schemes according to department should the CSS co-fi- Association (IBA) submitted a Union finance minister gains one would make by be taken by an “IIFCL may be
their own needs. justify the need for expenditure nanced by the proposal to the finance minis- Nirmala Sitharaman MINT transferring bad assets out of a l t e r n a t i v e services secretary considered for a
“CSS are reduced from time to continuation of the secretary said Centre should be try and the Reserve Bank of the books. mechanism, he Panda said quick start if it
time, and then again, they prolif- scheme. As the life flexible enough to India (RBI) to set up a bad bank assets to alternate investment “To my mind, the govern- said. The alterna- could be subsumed
erate. The dynamics are like this cycle of ongoing allow states to to tackle mounting bad loans, funds and other potential inves- ance structure of the new tive mechanism in this new financial
because the central ministries schemes has been made co-ter- adapt and innovate. “Top-down which worsened following the tors for eventual value realiza- entity will be key. It is better if is a ministerial panel, which will institution because they already
think their ambit of work is more minus with the cycle of Finance mandates and strictures on pro- covid-19 outbreak. tion,” finance minister Nirmala the entity has a private owner- decide the bank or insurance have some domain expertise
relevant when there are more Commissions, the third-party gramme implementation are “An asset reconstruction Sitharaman said in her budget ship structure. Otherwise one firm that will be privatized. and they have some manpower
CSS. The latest move to rational- evaluation of all CSS should be antitheses of an open-source company and asset manage- speech on Monday. would get into a loop of the Sitharaman on Monday also which is already trained and
ize them is a step in the right completed within a stipulated model. CSS should grant states ment company would be set up A senior banker said lenders three ‘Cs’ of Central Bureau of announced the creation of a experienced in this field. So, that
direction,” said D.K. Srivastava, timeframe. The funding pattern significant latitude to tailor to consolidate and take over the are yet to receive a formal plan Investigation (CBI), Comptrol- new development finance could be a way of looking at it,”
chief policy adviser at EY India. of the CSS should be fixed implementation modalities to existing stressed debt and then on how the asset reconstruction ler and Auditor General of institution (DFI) to spearhead Panda said.
According to the FFC, 15 of the upfront transparently and local realities,” it added. manage and dispose of the company will function and take India (CAG), and Central Vigi- government spending in infra- shreya.n@livemint.com
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REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE
THE FIN COM DOESN’T

ROCK THE FEDERAL BOAT
The Finance Commission has largely maintained status quo in Centre-state ties. What could be the flashpoints?
Members of the 15th Finance Commission present their report to president Ram Nath Kovind. The FC’s recommendation to set up disaster mitigation funds at both Union and state levels is timely. So far, only disaster relief funds have been constituted.
M Govinda Rao the share of Jammu & Kashmir, which has entry-level conditions. These include set- The pandemic has rendered the fiscal
mint
feedback@livemint.com now become a union territory. ting up of State Finance Commissions, SHORT VOCAL FOR LOCAL deficit and debt targets completely irrele-
BENGALURU The factors determining the horizontal acting upon their recommendations and STORY Greater devolution to local vant and economic revival requires the
shares of the states too are the same as in laying the explanatory memorandum as to bodies is on the cards government to sharply increase expendi-
T
he four-volume report of the the interim report, with population and the action taken report before the state tures without bothering about deficit and
Fifteenth Finance Commission area receiving the weight of 15%; 10% for legislature on or before March 2024. Also, WHAT Urban local bodies Rural local bodies
Total debt in the immediate context.
(FFC)—titled “Finance Com- forest cover; 45% for income; 12.5% for both provisional and audited accounts 4.4 trillion However, as the economy recovers, it is
mission in Covid Times”—is demographic performance; and 2.5% for should be placed in the public domain and The four-volume report of the important to return to the path of fiscal
Fifteenth Finance Commission, 2.9 trillion
rich in analysis. The Commis- tax and fiscal effort. Not surprisingly, there should be a minimum floor for prop- rectitude. In this context, the Commission
sion must be credited for undertaking a there are only marginal changes in the rel- erty tax rates in tandem with the growth titled “Finance Commission in has assumed that the fiscal deficit of the
Covid Times”, was tabled in 35%
challenging task of making recommenda- ative shares of the states from the shares in rate of the state’s own GSDP. 30% Union government for 2020-21 would be
tions at a time when both global and the first report. Furthermore, the Commission has rec- Parliament on 1 February.It is rich 7.4% of GDP. Starting from the deficit of
domestic environment is unclear and The Commission has also continued ommended that 60% of the grants to rural in analysis. 65% 6% of GDP in 2021-22, it has laid down the
70%
uncertain due to the pandemic. with the practice of recommending reve- local bodies and for urban local bodies in path to contain the deficit at 4% in
With both Union and state govern- nue deficit grants even though there were non-million-plus cities should be tied to 14th Finance 15th Finance 2025-26. Correspondingly, starting with
ments under acute fiscal stress thanks to doubts as the terms of reference (TOR) strengthening of two basic services —sani- AND Commission*
*FY16-FY20; **FY22-FY26
Commission**
the debt-GDP ratio of 62.9% in 2021-22,
severe contraction in revenues and large had asked the Commission to “... examine tation and drinking water. For million- the consolidation path leads to containing
increases in expenditures required to save whether revenue deficit grants be pro- plus cities, the entire grant is perform- On the whole, states’ concerns it at 56.6% in the terminal year.
DEVOLUTION DYNAMICS
lives and livelihoods and revive the econ- vided at all”. The total amount of grants ance-linked through the million-plus Cit- like the non-lapsable defence For the states, the fiscal deficit is sup-
omy, providing forward guidance on fiscal recommended for the five-year period ies Challenge Fund. fund and a tax devolution
arrangement based on more
41 % posed to be reduced from 3.3% in 2021-22
matters for five years is challenging. As the works out to ₹2.94 trillion. This conditional and performance- of all taxes collected by the to 2.8% in 2025-26 and marginally reduce
Commission claims , “... the report seeks to However, in keeping with its interim linked grants to local bodies raises ques- recent population figures have Union government will be the debt-GDP ratio from 31% in 2021-22 to
achieve responsible, efficient, equitable, recommendation that the states should, tions on whether the Commission has been put to rest for now. shared with the states 30.5% in 2025-16. The states have also
and inclusive growth for India amid an
unparalleled global and domestic macro-
over time, eliminate their post devolution
gaps, there is a phased reduction in reve-
gone beyond its mandate.
The TOR of the Commission is only to
8,000 crore
been allowed to borrow 4% of their GSDP
in 2021-22 to overcome fiscal constraints
economic backdrop”. nue deficit grants from ₹1.18 trillion in the recommend “measures to augment con- BUT has been set aside as a
performance-based grant for and an additional 0.5% conditional on the
On the whole, states’ concerns about first year to ₹13,705 crore in the final year solidated funds of the states to supple- the incubation of new cities reforms in the power sector.
issues like the non-lapsable defence fund of recommendation. The number of states ment the resources of local bodies based New flashpoints have opened up The government has, in principle,
in local body funding, with the
and a proposed tax devolution arrange-
ment based on more recent population
eligible for these grants is reduced from 17
to 6. The phased reduction provides the
on the recommendations of the State
Finance Commission”. The main role is commission exceeding its 70,051 crore accepted the debt ceilings for the states
recommended by the Commission. How-
mandate by imposing certain is provisioned for health
figures have been put to rest for now states with time to make suitable adjust- supposed to be played by the state govern- schemes run by local governments ever, in regard to the fiscal roadmap for
through a mix of compromise and con- ments in their fiscal management. ment and the Commission is supposed to conditions to keep the funding the Centre and amendments to FRBM Act,
tap open. Source: Budget documents
servatism in approach. However, new The recommendations relating to dis- play only a supplemental role. The it has stated that the matter will be exam-
PARAS JAIN/MINT
flashpoints have opened up in local body aster management too are on expected responsibility for the local bodies is ined separately.
funding, with the commission exceeding lines. The recommendation to set up dis- assigned to the states entirely under Entry As a point of fact, assumption about the
its mandate by imposing certain condi- aster mitigation funds at both Union and 5 of the state list in the seventh schedule of amounts to ₹1.2 trillion. Similarly, the The fund shall have the standard noti- deficit in the starting year taken for the
tions to keep the funding tap open. state levels is timely and important. So far, the Constitution Commission has recommended state-spe- fied rules for its administration, public Centre itself is an underestimate in the
This FC ‘s report not only allays the only disaster relief funds have been con- It is the responsibility of the governor to cific grants of ₹49,599 crore. reporting and an audit by the CAG. The Finance Commission’s exercise. As
fears about the transfer system that many stituted. A total of ₹1.6 trillion has been appoint the State Finance Commission However, the government has, in the fund will access resources from four sour- against the estimate of 7.4% of GDP taken
states had when the terms of reference recommended for the disaster manage- and cause the report to be placed in the explanatory memorandum, stated that it ces—contribution from the consolidated by the Commission, the revised estimate
was given, but also provides useful analy- ment fund, of which the Central share is State legislature. If he/she does not, can will implement the existing centrally- fund of India; disinvestment proceeds shown in the budget is 9.5% and the Bud-
sis. Of course, it remains to be seen how ₹1.22 trillion to be distributed to the states we deny the resources to local bodies? sponsored schemes and has not accepted from defence public sector enterprises; get Estimate for 2021-22 is 6.8% as against
well the projections made will stand the on the basis of past expenditures, area, Moreover, all the suggested reforms the recommendation. proceeds from monetisation of surplus 6% taken by the Commission. For the ter-
test of time and whether the recommen- population and hazard index. have to be undertaken by the state gov- defence land; and receipts from defence minal year, the Finance Commission has
dations will ensure the ernments, including auditing of the local DEFENCE FUND land to be transferred to put the ceiling at 4% of
finances of the Union
and states will be on an
even keel.
The FC ‘s report not only
allays the fears about the O
LOCAL BODIES
n local bodies, the
commission has
bodies’ accounts. Failure to comply with
the conditions will not deny the states any
funds—it is the local bodies that will lose.
T here was considerable apprehension
when an additional TOR was issued
to the Commission to examine the possi-
the state governments
and for public projects in
future.
A proposal to make local
GDP, but in the budget
speech the Finance Min-
body grants conditional and ister has pegged it at
In many ways, the recommended a grant of The only way to force the reluctant states bility of creating a non-lapsable moderni- The government has 4.5%.
report features continu- transfer system that many ₹4.36 trillion for is public opinion. sation fund for defence since this may accepted the recom- performance-linked raises There is also a recom-
ity and change. There states had when the terms of 2021-26 to be distrib- Hopefully, good sense will prevail, and have resulted in lower tax devolution. mendation in principle questions as to whether the mendation by the Com-
were apprehensions that uted among the states on the reforms will be carried out, and the The Commission has recommended and stated that the mission that an inde-
the Commission could reference was given, it also the basis of population local bodies will not have to suffer for the the constitution of a dedicated non-lapsa- modalities of creating Commission has gone pendent Fiscal Council,
reduce the states’ share and area in the ratio failure of the states. In any case, this rec- ble fund—a modernisation fund for the fund and sourcing an advisory body with
in tax devolution—in provides useful analysis 90:10. The share of rural ommendation has been accepted by the defence and internal security to bridge the funds will be examined . beyond its mandate powers to access records
fact, in its first report, it local bodies comes to government. gap between projected budgetary required from the Union
had stated that it would recommend sec- ₹2.36 trillion and that of urban local bod- Then, the Finance Commission, as it requirements and budget allocation. The DEFICIT LEVELS as well as the states should be appointed to
tor-specific and performance-based ies at ₹1.21 trillion. In addition, there’s
grants in the final report. ₹70,051 crore of health grants; ₹8,000
However, the Commission has contin- crore for incubation of new cities; and
had stated in the interim report, has rec-
ommended sector-specific grants to
health, school education, higher educa-
proceeds of the fund are to be utilised for
capital investment for modernisation of
defence services, capital investment for
C onsidering the fiscal problems cre- ensure better compliance and to act as a
ated by the pandemic, the issue of repository of fiscal data. The government
one of the most important subjects on has not stated its position on this recom-
ued with 41% share in the divisible pool of ₹450 crore for facilitating shared munici- tion, agriculture, maintenance of PMGSY central police forces and modernisation of which the recommendations were keenly mendation.
taxes to the states, which is identical to the pal services. roads, aspirational districts and blocks, state police forces as projected by MHA, awaited was on the recommendations on M Govinda Rao was member, Fourteenth
recommendation of the Fourteenth Availing the grants by local bodies, judiciary and statistics. The total amount and a small component as welfare fund for appropriate levels of debt and deficit lev- Finance Commission and former director,
Finance Commission after adjusting for however, requires the states to fulfil some of grants recommended to these sectors soldiers and paramilitary personnel. els to the Union and state governments. NIPFP. These are his personal views.
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MINT M NEY
Budget’s high spending may B E YO N D T H E
TA X B O O K
affect your debt fund returns G AU TA M N AYA K
We welcome your comments at:

mintmoney@livemint.com
Investors used to double-digit returns from debt funds may now have to reset their expectations
FOR INDIVIDUAL
Sunita Abraham
ISTOCKPHOTO
ate increase in interest rates even

TAXPAYERS, NO BIG
feedback@livemint.com if the G-sec yields, to which their
returns are benchmarked, goes RELIEF IN BUDGET
F
ixed income markets up. This is because these schemes
T
reacted negatively to the did not see a reduction in interest his budget does not contain any significant new financial
debt-fuelled growth-ori- rates in 2020 even when G-sec relief for individual taxpayers. Probably, this is on account
ented budget that saw the yields saw a significant reduction. of the fact that certain reliefs, such as exemption for LTC
benchmark 10-year yields spent on purchase of specified goods, or permitting higher varia-
breach the 6% mark. A SAFETY NET tion of 20% from stamp duty valuation on purchase of property
“The higher level on the bench- A positive for fixed income mar- Sebi rule on during a limited time period, had already been announced ear-
multi-caps
mark yield is an immediate reac- kets came from the proposal in the brings
lier, and are merely being given effect to in this budget. However,
tion of the fixed income market to budget to set up a corporation that investors to some administrative reliefs have been provided.
the large fiscal deficit and the will purchase investment-grade the drawing One such relief is in the form of new dispute resolution com-
impact it can have on inflation,” bonds in periods of stress when board mittees, where a taxpayer whose returned income does not
said Mahendra Jajoo, head - fixed liquidity in the corporate bond bit.ly/2UiTLdf exceed ₹50 lakh, and who is disputing a proposed addition of up
income, Mirae Asset Management markets dries up quickly. to ₹10 lakh, can opt to settle his potential dispute, and avoid possi-
Company. This comes as a welcome safety ble long-drawn-out litigation. One will have to wait and see the
“However, inflation has been net for investors who have in the ground reality—whether these committees really function in an
softening in the last couple of past experienced the consequen- impartial manner, so that taxpayers really benefit as intended.
months and we expect the Reserve ces of poor liquidity in the bond Another relief is for senior citizens, aged 75 years or more, who
Bank of India (RBI) to give gui- markets. will not have to file their income tax returns under certain cir-
dance on the supply management, “This is a good idea and will pro- cumstances. They should only receive income by way of pension
so markets should stabilize,” said vide a sense comfort. It remains to and bank interest, and that too, the bank interest has to be from
Jajoo. be seen how it will be funded and the same bank in which they receive their pension. Besides, the
A rise in yields will be a matter of wait for other details,” said Sen. bank has also to be specified by the government for this purpose.
concern for investors in total last one to two years were not sus- yields.” PSU (public sector undertaking) For their strategic allocation, The bank will deduct the full tax payable, obviating the need to
return products like debt funds tainable over the next one or two Given that yields will move up, funds and short-duration funds debt investors should continue to file the tax return. This benefit may be restricted to only a very
where the return is a combination years. For one, accrual levels are there will be an adverse impact on are best suited at this stage for stick to the basic investment prin- few cases, as most senior citizens have deposits in multiple banks,
of interest income and gains or lower and second, the returns from debt investors to balance returns from ciples of aligning their debt invest- to ensure safety and liquidity. The benefit will not be available if
losses in the value of bonds. mark to market Rising yields funds, and this accrual and the mark to market ment tenor to their investment the senior citizen has income from mutual funds, dividends, rent-
impact won’t be will cut out the impact will be higher impact of rising yields. horizon so that they are not caught als or capital gains, howsoever small such income may be.
RISING YIELDS favourable as yields mark to market for funds with a Funds offering a roll-down short when money is required. The other relief is for residents, who have overseas retirement
Bonds lose value when yields go inch up,” said Joy- gains that higher duration. strategy is something that inves- Strategic as opposed to tactical accounts, such as 401K plans, started when they were non-resi-
up. Investors used to double-digit deep Sen, corporate The short-duration tors who are uncomfortable with investing focuses more on long- dents. So far, there used to be a timing mismatch, as income from
investors have
returns from debt funds may now trainer and author. debt fund categories excessive volatility can consider to term factors like financial goals such accounts was taxable in India on accrual, while it was taxable
have to reset their expectations Jajoo added, “This enjoyed so far in with maturities mitigate the market in their debt than current market conditions. on withdrawal in the country where such an account was held.
lower as rising yields will cut out is part of the cycle the rate-cut cycle between one and fund portfolio, according to Sen. Resetting their return expecta- Therefore, a resident ended up paying double tax on such
the mark to market gains that they and investors should three years such as The other favourite of retail tion lower, staying with good qual- income, as he could not claim tax credit for taxes paid overseas,
enjoyed so far in the rate-cut cycle. remain invested. This the low duration investors looking for guaranteed ity paper and anticipating volatil- since the foreign taxes were paid later on withdrawal, whereas
“The returns that investors have is also the time that fresh invest- funds, money market funds, cor- returns, the small savings ity will help them ride out this taxes were being paid earlier in India each year.
been seeing in debt funds in the ments will happen at higher porate bond funds, banking and schemes, may not see an immedi- phase in the interest rate cycle. Now, the manner of taxing such income will be laid down, to
remove such difficulty. This provision will however not apply to
cases where the income from the retirement account is not taxa-
ble at all in the country where the account is held.
Interest for shortfall in payment of advance tax will now not be
payable if such shortfall is on account of dividend income, and
+
Rent or lease agreement has to be registered Haven’t filed ITR? advance tax has been paid on the due dates falling after such divi-
dend is due, in the same manner as for capital gains.
This will of course mean that taxpay-
Aradhana Bhansali
Now, pay more TDS ISTOCKPHOTO
In the event of any dispute, a
registered document is nor-
One will have
to wait and see
if the dispute
ers will now have to keep a tab of date
of declaration of dividends (in case of
final dividends) and date of payment
My father bought my mally considered valid until (in case of interim dividends), increas-
uncle’s share in an ances- proved otherwise in a court of Renu Yadav filed ITR. As per the Income resolution ing the complexity of the tax computa-
tral property. However, my law. renu.yadav@livemint.com Tax Act, Sections 206AA and committees tion. It would perhaps have been far
uncle’s children now want The choice of entering into 206CC provide for deduction are impartial simpler if dividends were not consid-
I
a share in the property, say- any contractual understand- n order to make more peo- of TDS or TCS at higher rates ered at all in the computation of
ing they have a legal right ing and registering the same ple file income tax returns in cases where the person advance tax liability. But simplicity is
as it is an ancestral prop- would depend upon the inten- (ITR), the finance minister doesn’t provide PAN. So, in not something which our tax laws are known for!
erty. Is that correct? Is the tion of the parties, more par- has proposed higher TDS (tax case a person doesn’t furnish a On the negative side, new unit-linked insurance policies
agreement between my ticularly the period for which deducted at source) or TCS PAN card to the bank, then a (ULIPs) taken after 1 February 2021 will be taxed on maturity as
father and uncle invalid? the house is to be given i.e. for (tax collected at source) rates TDS at higher rate (20% capital gains, if the premium of such new policy or policies for any
My uncle’s children were minimum 11 months where the in budget 2021 for those who instead of 10%) will be year exceeds ₹2.5 lakh. The manner of computation of capital
minors when he sold the stamp duty that will be levied don’t file ITR. The budget has deducted on interest earned. gains will be laid down, and such policies will be subject to securi-
share to my father. would be minimum or for any proposed insertion of new These provisions have ties transaction tax, seeking to bring them on par with mutual
—Name withheld on request period where appropriate Sections 206AB and 206CCA ensured that more PAN cards funds.
Assuming that your family is stamp duty will have to be paid for the deduction are issued, but the However, amounts received under such policies on the death
governed by the law as appli- as per the provisions of Indian of higher rates of The new same has not of the policyholder will be exempt from tax. Policies taken before
cable to Hindus in India, as Stamp Act, 1899. TDS and TCS, provisions in the resulted in more this date and policies where the aggregate annual premium is less
regards joint family property, However, from the land- respectively. budget are likely people filing ITR. than ₹2.5 lakh will continue to be exempt from tax.
all the legal heirs have rights in lord’s perspective, it is advised So, TDS or TCS to ensure that The new provi- The one area where administrative provisions have placed the
the same by birth. stamped and registered in to have a rent agreement for a will be deducted taxpayers worse off is the reduction of the time limit for filing of
ASK MINT more people file s i o n s are
Further, assuming that no m accordance with the laws period not exceeding four to at twice the appli- expected to belated returns and revised returns of income. Till 2016, such
partition or division has hap- LEGAL applicable in the state/ Union five years, which may be later cable rate as per their income ensure that a returns could be furnished up to one year from the end of the
pened and the property was territory and the extended at the the Act or 5% tax returns higher number of assessment year, i.e. for a return due on 31 July or 31 October 2015,
still an ancestral property give my house on rent. Transfer of Prop- In the event of option of the par- whichever is people file ITR. the return could be filed till 31 March 2017.
when your father purchased Which agreement is safer erty Act, 1882. any dispute, ties. higher. There are “In cases where Till last year, such returns could be filed up to the end of the
your uncle’s share and that no for landlords—the one As your house a registered This is to avoid two conditions attached to it. the TDS or TCS provisions assessment year, i.e. a return due by 31 July or 31 October 2019,
permission from the court signed on stamp paper is in Delhi, being a document is any issues in rela- One, the person shouldn’t were up to 1 or 2%, people used could be filed up to 31 March 2020. Now, the time limit is being
having competent jurisdiction worth ₹100 (for 11 months) Union territory, tion to adverse have filed ITR for the past two to treat it as a cost of business reduced further by 3 months. Therefore, for a return due by 31
normally
was sought by your father or or the one where 2% of the an agreement will claims from the years, and a TDS or TCS of and absorbed it. The increase July or 31 October 2021, the returns need to be filed by 31 Decem-
uncle and everyone having a annual rent is paid as stamp have to be prop- considered valid tenant or eviction more than ₹50,000 was in the TDS and TCS rate will ber 2021.
share in the ancestral property duty (for more than 11 erly executed and in a court of law relation issues, deducted in each of the past prevent them from doing so,” This really leaves taxpayers very little time in cases of genuine
for dealing with the share of months)? Are there any stamped as per which may then two years from that person. said Rahul Garg, senior tax difficulties, such as in obtaining information required to file their
the minor children in the other kinds of rent agree- the applicable require the land- There are existing provi- partner, Pwc India. returns, or due to illness, etc. The consequences of not filing the
ancestral property, your ments that can be made? stamp act i.e. the Indian Stamp lord to follow the due process sions that provide for deduc- This provision shall not be belated or revised return in time are serious—it can attract a pen-
uncle’s children may become Which one is the most suit- Act, 1899. of law. tion of TDS or TCS at higher applicable for transactions alty for non-disclosure of income, besides potential prosecution.
entitled to claim rights in the able? It is imperative that the doc- Aradhana Bhansali is part- rates in case of non-furnishing where the full amount of tax is This is one aspect that the government needs to seriously con-
ancestral property. —Dolly Moga ument is stamped and regis- ner, Rajani Associates. Queries of PAN card. The new provi- required to be deducted, for sider—permit belated filing of return or revised return under cer-
A rental agreement or lease tered to avoid any legal has- and views at mintmoney@live- sions target those who have example, salary income, pay- tain extenuating circumstances.
I live in Delhi and want to agreement is required to be sles/issues at a later point. mint.com PAN numbers but have not ment to a non-resident, etc. Gautam Nayak is partner, CNK & Associates LLP.
PARAS JAIN/MINT
HOW MUCH TAX DO YOU PAY ON DEBT INVESTMENTS?

Any portfolio should have a balanced mix of asset classes. Diversification helps reduce the overall risk. For instance, equity
Dividend income tweak to help investors
ISTOCKPHOTO
investments tend to give higher returns than all other asset classes over the long run, but they are also riskier. To balance that, Tinesh Bhasin
one must invest in debt-related products. While these too carry some risk, they are considered safer. Also pay heed to the expected companies or mutual manager, Taxmann, a research
taxation rules to know what the net returns would be. Any change in rules can affect the reason why you had invested in the tinesh.b@livemint.com fund schemes to offer divi- and advisory firm.
product. Here’s a look at the tax rules that apply to some debt-related investment products dends had to estimate the divi- However, the timing and
A
single amendment in dends they are likely to quantum of dividend to be dis-
tax laws can have mul- receive, compute tax liability tributed to the shareholders
tiple repercussions. on them, and pay advance tax. primarily depends on the dis-
DEBT-ORIENTED FIXED POST OFFICE
MUTUAL FUNDS DEPOSITS DEPOSITS That’s because taxmen stick to If an individual doesn’t pay cretion and decision of the
the wordings of the law even if advance tax, he is liable to pay company, while individual
they cause hardship to the tax- 1% simple interest per month taxpayers hardly have any visi-
(What is long term? Tax on interest For senior citizens, Tax on interest For senior citizens, payer. This is what happened for a period of three months on bility on how much they
More than 3 years) interest up to interest up to when the government decided the amount of shortfall. expect to receive as dividend.
Slab rate 50,000 is exempt Slab rate 50,000 is exempt to tax dividend income in the “Traditionally, domestic The government should
Short-term capital gains tax hands of the receiver in the companies paid the tax on div- have excluded dividend
earlier budget, which it has idend before giving it to share- income from advance tax
Slab rate rationalized in the latest one. holders. It was changed in the when it decided to tax it. In the
NATIONAL SAVINGS SENIOR CITIZEN
CERTIFICATE SAVINGS SCHEME An individual must pay much income they would earlier budget, and investors latest budget, the finance min-
Long-term capital gains tax
advance tax on all income make in that year and then receiving dividends on or after ister has proposed to rational-
20.8% except those that are specifi- compute tax on it. 1 April 2020 were required to ize it by removing the interest
(With indexation) Tax on interest If interest is reinvested, Tax on interest No tax deducted at cally excluded. Typically, While the government pay tax on it. Due to this, they charged on the shortfall.
deduction up to 1.5 lakh is source on interest up income like capital gains is decided to tax dividend were also subjected to pay According to experts, now
Slab rate allowed under Section 80C Slab rate to 50,000 excluded from advance tax income, it didn’t mention it in advance tax on dividend investors must pay advance tax
payments because it’s difficult the list of excluded income. income,” said Naveen on dividend in the subsequent
For further details on taxation, go to bit.ly/2pOeeH9 Source: EY, Mint Research
for taxpayers to estimate how Due to this, investors who Wadhwa, deputy general quarter of receiving it.
X
AHMEDABAD
V EWS
OUR VIEW THEIR VIEW
MINT
The budget got its growth focus

right but challenges still remain
It’s now for RBI to keep the Centre’s outsized borrowings from pushing up the cost of credit in India
remain growth-supportive and the defi- the past few years—as a percentage of
cit to narrow gradually to 4.5% of GDP GDP, it fell to 29.8% in 2019-20 from
by 2025-26 from 6.8% in 2021-22, 34.3% in 2011-12. It is estimated at 27.6%
reversing the trend of revenue under- this fiscal. At the heart of the budget is
performance is crucial to achieve even the government’s counter-cyclical
the relaxed fiscal targets. approach to address this till such time
That said, the deficit levels also look the private sector is dormant. The tilt
worse for a good reason—enhanced towards capex, budgeted to increase
transparency. The budget relies less on 26% over last fiscal’s revised estimate,
DHARMAKIRTI JOSHI below the line/off-budget items for versus a fall in revenue expenditure of
is chief economist at CRISIL funding investment and more on direct about 3% is positive for growth.
capital expenditure allocations. It also Public investment is shown to have
puts an end to the practice of funding a higher ‘multiplier effect’ than con-
the Food Corporation of India’s short- sumption. Add to that the findings of a
Don’t ignore simplicity

fall via borrowings from the National recent International Monetary Fund
Small Savings Fund and replaces it with study (Gaspar, et al, 2020) that positive
T
he budget has struck while the budgetary allocation. How does the spillover effects of public investment
iron is hot, both on reforms and math work out for growth? only amplify during periods of uncer-
the fiscal math. Less than a year The budget assumes a realistic nomi- tainty, and what we have is more bang
as a canon of taxation back, the Indian economy was facing

the worst slowdown in a decade. The
pandemic made it the worst in seven,
and necessitated strong fiscal action
nal GDP growth of 14.4% for 2021-22,
roughly translating to 11% in real terms,
as projected by the Economic Survey.
Taking the budgetary response into
for the buck.
Despite low overall capacity utiliza-
tion rates, private sector investment,
particularly by large corporates, should
that, for once, everyone thought was far account, Crisil has also upgraded India’s be the first to pick up. Large companies
more pressing than staying true to the growth outlook to 11% from 10% projec- have done well this fiscal and also
The Centre must act upon the 15th Finance Commission’s call for a simplified GST regime earlier fiscal deficit glide path. ted in early December. What really pans de-leveraged. So they can be expected
The budget then did what would have out for the coming fiscal will not only be to lead an investment revival once the
and also quit slapping on cesses to raise extra revenues that go unshared with Indian states been unthinkable had the pandemic not shaped by these fiscal measures, but recovery gains a stronger footing.
occurred—veer off the Fiscal Responsi- also by exogenous/luck factors, such as However, the large companies-led
bility and Budget Management path by crude oil prices and monsoons. better-than-expected recovery is yet to
as much as 3.8 percentage points for Crude prices are expected to move to percolate to benefit micro, small and
T
hat our goods and services tax levels. A shortfall in collections blew up into a next fiscal, almost double the budgeted an average of $53 per barrel in 2021 medium enterprises. Better focused
(GST), hailed by Prime Minister controversy last year over the Centre’s failure borrowing, and altogether redraw the from $42.3 in 2020. Even at such levels, support would have gone a long way in
path of fiscal consolidation, stretching they are not a big threat. But monsoons helping them and adding jobs.
Narendra Modi as a “good and sim- to honour its commitment to compensate the timeline to reach a higher-than- need to be closely tracked as India has What can also spoil this story is the
ple tax” on its 2017 launch, needs to states for inadequate revenues, with adequacy earlier deficit target by fiscal 2025-26. seen more than two consecutive years impact of a huge borrowing programme
be simplified forms a consensus defined as a 14% annual growth in GST intake. While the spending lift has brought of normal monsoon (as we now have) of ₹12 trillion on bond yields. They have
among taxation wonks. The report Covid can be blamed for part of that problem, overall expenditure back on the pre- only once in the past two decades. already zoomed 13 basis points since the
of the N.K. Singh-led 15th Finance Commis- as finance minister Nirmala Sitharaman mem- pandemic trend level (using budgetary Any abnormality will have some figures came out on 1 February. We
estimates from fiscals 2015 to 2020), the bearing on GDP growth as well as rural expect the 10-year G-sec yield to rise to
sion that was tabled in Parliament on Monday orably did with her “act of God” remark, but in same could not be done for revenue. spending, which is expected to decline 6.2% by March 2021 and 6.5% by March
alongside the Union budget has a nudge on its hindsight, it is clear that excessive rate tweaks That’s because revenue depends on about 35% over the budgetary estimate 2022. An influx of state development
multiplicity of tax brackets. It recommends a and category shuffles also ruined the chances gross domestic product (GDP), which for 2020-21. bonds can also be expected as state
three-tier GST structure by merging its 12% of smooth revenue-sharing relations between will take time to normalize. Also, reve- Crucially, there are also the states, deficits widen. That should give the
+ and 18% slabs into a standard rate applicable to the Centre and our states. nues have been conservatively esti- which account for 58% of overall gov- Reserve Bank of India (RBI) reason to
mated. Nominal GDP in fiscal 2022, ernment spending and 63% of govern- worry. To be sure, the monetary policy
most goods and services, with a 5% merit rate As those ties remain testy, it is good that the even at the 14.4% growth assumed in the ment capital expenditure. So growth announcement that follows the budget
and a 28-30% demerit rate. If the government panel has recommended no drop in the share budget, is below the pre-pandemic will be predicated on their ability to fol- should gain breathing space from low
accepts this proposal, it would be a welcome of the central divisible tax pool to be given to trend level by nearly 10%. Gross tax rev- low a counter-cyclical fiscal policy too inflation in December that is likely to
change. The seven-tier regime that we have is states over the next five years. At 41%, it is just a enues are estimated at about 30% below this year. For now, the budget provides remain so in January as well.
unwieldy and flies in the face of elementary percentage point less than the previous half- trend value even in fiscal 2021-22. some support to capex for states. North Block has done what it must.
So while fiscal policy is expected to Investment has been a casualty for All eyes are on Mint Road now.
GST principles adopted in other jurisdictions decade’s figure, a reduction explained by
of the world; a country’s chief indirect tax Jammu and Kashmir’s loss of statehood. Yet,
should be uniform, stable, easy for every seller our states are justified in their grouse that the
and buyer to remember, and invulnerable to Union government has increasingly resorted
statist discretion. Absolute uniformity is not to cesses and surcharges, which are kept out
feasible in India, given our disparities and the of its divisible pool, to raise revenues. Its cess
regressive impact of indirect levies, but a tax is intake has risen from ₹28,521 crore in 2009-10 www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Chandigarh*, Pune* Thursday, February 3, 2011 Vol.5 No.29 `3.00 32 PAGES
neither ‘good’ nor ‘simple’ if the logic of its to an estimated ₹2.72 trillion in 2020-21, a near SOCIETY: Thechroniclers
of ordinary lives >12
TELECOM: Airtel net slumps,
firm optimistic on Africa >3
slab-wise categorization is beyond compre- 10-fold rise over the span of a decade. This EXCLUSIVE PARTNER
CORPORATE: Hero Honda net down
on higher input costs >3
CAPITAL ACCOUNT: Market feels the
pinch of shift in fund allocation >21
Technology is dominated
hension. As an anomaly-ridden tax system looks especially unfair in the context of the
SENSEX 18,090.62 Æ 68.40 NIFTY 5,432 Æ 14.80 DOLLAR `45.62 æ `0.14 EURO `62.93 Æ `0.17 GOLD `19,885 æ `110 OIL $102.04 Æ $1.17
2G FALLOUT QUICK EDIT
makes space for disputes and hampers compli- heavy responsibility that our states bear in the Raja held, govt still in the dock
The move is unlikely
to win the UPA govt
PTI
tion to be key issues during
Tamil Nadu assembly elec-
A minister
in the bag
T he arrest of a
powerful former
minister in the world’s
by two types of people:
those who understand
tions and coming elections in largest democracy should
respite from attacks three other states—West Ben- sound three cheers for
ance, the sooner we simplify it, the better. country’s fight against the covid pandemic.
by the opposition over gal, Kerala and Assam. the rule of law.
The arrest also comes a day It rings hollow.
corruption and inflation after the Supreme Court start- The scale of scandals
ed hearing a case filed by Jan- involving public figures
B Y L IZ M ATHEW ata Party leader Subramanian and the shoddy record
liz.m@livemint.com Swamy and the Centre for Pub- of Indian investigating
························· lic Interest Litigation (CPIL) agencies lead to doubts.
NEW DELHI seeking termination of the li- One can only express the
T he Central Bureau of In- cences of telcos that got them cynical thought: when
True, GST collections hit a record high of Yet, in her budget for 2021-22, Sitharaman what they do not manage
vestigation (CBI) arrest- in 2008 and which have not will the chargesheet
ed former telecom min- met their roll-out obligations. against former telecom
ister A. Raja for his alleged in- CBI has been investigating the minister A. Raja, who was
volvement in the so-called 2G 2G case since late 2009, but the arrested on Wednesday,
scam, but the move is unlikely process seems to have acceler- fall through, if it will be
to win the beleaguered United ated since December 2010, filed in the first place?
Progressive Alliance (UPA) when the Supreme Court said If there was a time to
government a respite from the it would monitor the probe. free probing agencies
attacks it has been facing from The court’s order came in re- from the clutches of
nearly ₹1.2 trillion in January, thanks to an proposed a cess on 17 commodities—including

the opposition. sponse to a petition from the executive, this is it.
Indeed, with his arrest now Swamy and CPIL. CBI and the Today, such is the power
signalling his possible com- Enforcement Directorate,
and those who manage

of those who have been
plicity and probable guilt in which is looking at money- accused of corruption
the award of licences to tele- laundering charges related to and felony that no
com companies on favourable Facing the heat: A file photo of former telecom minister A. Raja, who was arrested by CBI in New Delhi. the scam, are to submit reports investigator is in a
terms in 2008, analysts and on their investigation to the position to carry out an
members of the opposition loss to the public exchequer er policy snafus in telecom A DMK leader, speaking on court on 10 February. impartial investigation.
parties are beginning to ask had not taken place,” said could have cost the exchequer condition of anonymity, said A riveting sidelight to the If there are fears of
uptick in commerce, an ironing out of glitches diesel, petrol and farm imports—to gather
the obvious question: why did Arun Jaitley, leader of the op- up to `1.76 trillion in notional that the two parties had al- controversy emerged when the police getting out of
the government, and Prime position in the Rajya Sabha. losses. ready discussed the arrest. The two magazines carried tran- hand, there are remedies
Minister Manmohan Singh do Raja resigned only in No- Raja’s arrest comes a few Congress and the DMK are ex- such as its judicial
nothing for two years? vember after the Comptroller days after Congress president pected to contest the coming TURN TO PAGE 2® superintendence. But if
“I only wish that the Prime and Auditor General of India, Sonia Gandhi met Dravida polls in Tamil Nadu together. the corrupt are ever to
what they do
Minister instead of living in the government’s auditor, pre- Munnetra Kazhagam (DMK) Analysts expect inflation, ALSO SEE face justice, this freedom
denial had acted three years sented to Parliament a report chief M. Karunanidhi (Raja is which the UPA has been un- >Charticle: Telecom tangle—the has to come now.
ago so this huge, monumental that said the 2G scam and oth- from the DMK). able to contain, and corrup- story so far >P32
and an anti-evasion drive, but that should not funds for agricultural infrastructure and extra INSIDE
Clashes erupt as
Egypt protests
WITHHOLDING TAX
Power sector may get
stoke complacency. According to the Finance remuneration for farmers. Sure, the purpose is T he political unrest
gripping Cairo turned
ugly on Wednesday, as
groups of supporters of
President Hosni Mubarak
charged anti-government
protesters in the city’s
main square, sparking
a foreign fund break
B Y U TPAL B HASKAR
S ANJIV S HANKARAN
·························
NEW DELHI
T
&
he power sector may get a

boost in the forthcoming
an overseas investor can ap-
proach the tax authorities of
its home jurisdiction to offset
the tax deducted by Indian au-
thorities.
“Exemption is always better
not understand.
Commission’s report, India has lost about ₹4 valid. But cesses complicate taxation, just as
bloody clashes. The clash- budget as withholding tax on than credit,” said Sujit Ghosh,
es, coming after Mubarak overseas investment in the partner at BMR Advisors Pvt.
refused demands that he sector may be removed to at- Ltd, explaining why foreign
step down immediately tract investments. lenders want to be exempt
but agreed to turn over “Our consultations with the from withholding tax. “If a
power following elections finance ministry are lender has losses, ex-
in September, marked a over. Removal of with- emption serves no pur-
dangerous new phase for holding tax will accel- pose.”
the confrontations. >P27 erate overseas lending The power ministry’s
trillion annually on account of low GST rates. variable GST rates do, and rarely prove short-
to the Indian power representations on ex-
sector,” a senior official emption of withholding
A RC HI BA L D P U T T
in the power ministry tax are driven by the
said on condition of funding needs of the
anonymity. “We have sector.
asked for the removal The ability of the do-
of the tax and to our under- mestic financial system to fund
standing this request may be long-gestation power projects
accommodated.” is limited by sectoral caps set
Our ‘effective GST rate’ has been just 11.8%, lived, as they’re supposed to be. They ought to
“We are given to understand by the central bank.
that the budget may grant our According to Reserve Bank
wish,” another power ministry of India data, banks had an ex-
official said separately. posure of `2.43 trillion to pow-
The finance ministry’s posi- er projects on 19 November,
tion could not be confirmed as among the highest in relation
it is under quarantine during to other sectors.
the last phase of preparations
for the Union budget, sched- TURN TO PAGE 2®
which is short of the ‘revenue-neutral rate’ of be phased out. Our economy would be better
uled to be announced on 28
February. ALSO SEE
Withholding tax is charged
Mint is also available for R5.50 with >MintView: The year of
on the repatriation of income living dangerously >P8
Hindustan Times under a combo offer from equity or debt. Typically,
14% that was needed to keep coffers at pre-GST off without unnecessary tax complexity.
MY VIEW | THE IMPARTIAL SPECTATOR
There is no political freedom without economic liberty

government of UP is not the first to exploit semination of ideas, and therefore violate and circulation of newspapers under the pointed out the deep link between political
SHRUTI RAJAGOPALAN this legacy and likely won’t be the last. Article 19(1)(a) of the Indian Constitution. Newsprint Policy of 1972-73. When chal- and economic freedom, and warned the
One famous example is the Indira Gandhi Unfortunately, the Supreme Court was not lenged, in Bennett Coleman & Co. vs. Union of world that without economic freedom, civil
government’s attempt on 25 June 1975 to always consistent in fighting economic con- India (1973), the Supreme Court held that liberties remain under threat. In Capitalism
suppress news of the arrest of opposition trols that infringed speech. Another socialist regulating newsprint supply and fixing quan- and Freedom (1962), Milton Friedman argued
leaders at the proclamation of Emergency. policy in the 1950s was to regulate the wages tity in terms of number of pages per newspa- for strong property rights protection and eco-
L
ast week, as farmers were gearing up for A chain of orders directed the general man- of journalists through the Working Journal- per would either lead to reduced advertise- nomic freedom as a requirement for democ-
protests on Republic Day, the Uttar Pra- ager of Delhi Electric Supply Undertaking to ists (Conditions of Service) ments or reduced news, and racy. This theory also holds up empirically. In
desh administration used an old trick cut off supply to newspaper offices in New and Miscellaneous Provi- directly impact the eco- a 2018 study, Christian Bjørnskov analysed
from the Indian book of controls. It ordered Delhi. Newspaper editions from other cities sions Act, 1955. This was Market freedom nomic viability of the paper. the relationship using measures of economic
supply officers in all districts to stop selling carried the news, while some of the Delhi challenged by Indian These cases are a small freedom and press freedom indices in 177
diesel to farmers. A plan to parade tractors in editions of 26 June struggled. The same Express, arguing that Wage fosters a freer sample of the long list of countries. He finds that improvements in
protest on Republic Day not only requires story manifests itself in different ways Board rates would make it controls. They are not new. economic freedom are associated with subse-
the right to freedom of expression, but also —sometimes through diesel and electricity, prohibitively expensive to
press, keeps In fact, they are all pre- quent improvements of press freedom, and
is a senior research fellow with

the means to exercise that right—in this case,
diesel. If you think the government control-
and at other times, through social media and
the internet.
run the newspaper. In
Express Newspapers vs.
open means of Emergency, imposed by
Congress governments.
that the overall association is mainly driven
by changes in market openness.
the Mercatus Center at George
Mason University, US
ling diesel sales and prices is good for the
poor, especially farmers, and not a means of
It is not just ‘authoritarian’ leaders who
have used means of production to control
Union of India (1958), the
Supreme Court held this
expression, and The modern-day version of
this is the internet lock-
Socialists and progressives who support
price controls, quantity controls and mini-
controlling the democratic process, think free speech. In the 1950s, the Nehru govern- law valid, though it did set thus strengthens down in Kashmir, costly mum wages across other sectors are often
again. For urban elites, such control usually ment passed the Newspaper (Price and Page) aside the punitive order of licensing fees for TV and the first to cry foul when these tools are used
takes the form of cutting off the internet, Act, 1956, and the Daily Newspapers (Price the Wage Board. democracy radio broadcasting of news against journalists. But this view is myopic.
shutting down phone networks and electric- and Page) Order, 1960. These laws regulated Even before the Emer- channels, and the shut- The Uttar Pradesh administration’s restric-
ity, even specific social media apps. the prices publishers could charge for news- gency, Indira Gandhi’s gov- down of mobile networks, tion of diesel sales to protesting farmers
Explicit censorship laws are rightly criti- papers, based on page count and the amount ernment tried to use old orders in a new form electricity, internet, social media platforms, demonstrates that the economy is not sepa-
cized as an assault on democracy. But, India’s of content. Sakal Papers challenged their to control press freedom. In addition to cus- and specific media accounts to quell protests. rate from the individuals who inhabit it. All
long legacy of socialist policies—price con- constitutionality. In Sakal Papers (P) Ltd. vs. tom duties and limits placed on importing It is the same old economics of control that our actions—economic, political, civic—are
trols, quantity controls, and ownership con- The Union of India (1962), the Supreme Court newsprint under the Import Order, 1955, and directly impacts freedom of press, civil liber- deeply entangled. Letting the government
trols on the means of production—also held the laws unconstitutional as they would regulation of the sale, acquisition and use of ties and the core of a functioning democracy. control the prices and sale of diesel can be as
directly affects the resources Indians need to either increase prices or reduce the number newsprint under the Newsprint Order, 1962; This is also not just an Indian aberration. In harmful to our freedom and democracy as
express themselves. The Yogi Adityanath of pages, both of which would inhibit the dis- the government directly regulated the size The Road to Serfdom (1944), F.A. Hayek direct censorship.
X
PERSONAL FINANCE WEDNESDAY, 3 FEBRUARY 2021
AHMEDABAD 13
V EWS
MY VIEW | A VISIBLE HAND M I N T C U R AT O R
Time to focus on power storage The risk of a nuclear cataclysm

is rising with each passing day
rather than only its generation The extension of a US-Russia treaty is not much of a reassurance
Energy storage should be part of India’s policy plans for electricity now that renewable sources are gaining in significance
MINT
ANDREAS KLUTH
is a columnist for Bloomberg Opinion
NARAYAN RAMACHANDRAN
is chairman, InKlude Labs. Read Narayan’s Mint
columns at www.livemint.com/avisiblehand
T
he world can breathe a small sigh of
relief this week. The last remaining
arms control treaty between the US
A
s India powers its post-pandemic and Russia, called New Start, will not expire Some countries are piling up tactical nukes
recovery, energy occupies a central on 5 February after all, as recently feared. that aren’t covered by treaties REUTERS
place. And within the broad con- In the nick of time, Russian President
tours of energy, electricity is a major Vladimir Putin offered his new American military actions and their termination on
issue. counterpart an extension of the treaty for conditions that are acceptable for the Rus-
Until recently, India’s policy plan- five years, an option stipulated in its text. sian Federation.” Translated, this wording
ning with respect to electricity has been concerned Joe Biden agreed—after giving Putin the suggests that Russia could respond to a
primarily with generation. With transmission a requisite talking to about Russia’s massive conventional conflict with a tactical
relative laggard and state-owned distribution com- cyberattack on the US, its jailing of the nuclear strike, as opposed to reserving
panies (discoms) in a financial mess, policy has activist Alexey Navalny, and other outrages. nukes purely for retaliation in kind. But
focused on a meaningful contribution from renew- In the short term, a new nuclear arms that makes any altercation potentially
able sources, particularly solar. India reached its race between the two biggies has thus been explosive in the fissile sense.
initial goal of 20 gigawatts (GW) of solar power gen- avoided. Not really—and there’s the rub. A A conflict could, for instance, start with
eration four years ahead of schedule. Subsequently, wider glance at the world’s nuclear land- hybrid warfare (of the sort Russia used in its
the government dramatically revised its target scape reveals that the danger of cataclysm, 2014 annexation of Crimea), or with cyber-
upward to achieve 175 GW of renewable sourced by design or accident, keeps growing. war (as waged during last year’s Russian
power by 2022, of which 100 GW is to come from New Start only covers the stockpiles of hack of some 18,000 US computer sys-
solar, 60 GW from wind, 10 GW from bio-power Russian and American ‘strategic’ weapons. tems), or with a strike in space against an
and 5 GW from small hydropower. Even as we are This refers to those warheads the two adversary’s satellites. If the conflagration
behind on our wind power goals, sooner or later, adversaries point at each other’s home- escalates and becomes ‘unacceptable’, the
we should be able to deliver on the solar plan. land. The treaty says nothing about ‘tacti- next step could be nukes. And then?
With such a large generation capacity from cal’ nukes, the more flexible and usually To make the global matrix even more
renewables coming on-stream in the near future, smaller warheads built for potential use in complex, there are also the other seven
the emphasis of India’s electricity sector needs to a conventional conflict. nuclear powers to consider, and perhaps
shift downstream. This success paradox is a result But in that tactical category an arms race additional ones in future. Of these, North
+ of the peculiarity of renewable source power, is already underway. Both the US and Rus- Korea may appear to be the most
which can only be generated at specific times sia, in the name of upgrading their arsenals, unhinged. But China is the most ambitious.
during the diurnal cycle (solar and tidal) or during have been designing new tactical nukes It could have 350 warheads already,
specific seasons (wind). India’s installed capacity and deployment technologies. These according to some estimates. The Penta-
now exceeds 375 GW, of which about 137 GW include things that were science-fiction gon assumes China will double its arsenal
(36%) is from renewable sources including hydro- during the Cold War, such as nukes deliv- in the coming decade.
power. India’s capacity has quadrupled in the last prohibitive for large-scale storage of electricity. impact of these facilities has largely been evalu- ered by drones from submarines. China is the main reason why the US and
20 years. In contrast, transmission lines have only Battery design should be robust, allowing for a ated in a classical sense without taking into This race is thus fundamentally different Russia couldn’t agree on properly renego-
doubled during that period and per capita con- different holding period for energy (than, say, for a account the decarbonization that would result from the one between the US and the tiating New Start. Donald Trump, Biden’s
sumption has plateaued at a low 1,200 kilowatt car or mobile phone) and a very different discharge through energy storage. Soviet Union. Back then, the contest ulti- predecessor, insisted on bringing Beijing
hour (kWh) per capita over the last few years. cycle. Japan, China and the US are experimenting To take advantage of significant accomplish- mately came down to a count of each side’s into the talks. The Chinese refused. Sarcas-
India needs to add energy storage to its lexicon with newer battery technologies like vanadium ments in power generation, India’s evolving policy warheads. What ultimately stabilized that tically, they wondered aloud whether the
of policy planning tools for electricity. Without flow, in addition to the well-known lithium-ion should incentivize investment in storage and trans- competition was the macabre but compel- Americans and Russians would prefer to let
storage, the mismatch between the timing of variety. Pumped hydro-electric energy storage sys- mission and focus also on mitigation of transmis- ling logic of deterrence through ‘mutual China raise its arsenal to their size or to cut
renewable power generation and actual power tems (PHESs) have been in use around the world sion and distribution losses. In addition to an assured destruction’ (MAD). their own down to China’s. That makes for
consumption (both from the grid and off grid) for the last three decades and are making a come- emphasis on PHES for storage, research and devel- Today’s competition is instead between a good press-conference zinger in Beijing.
becomes a major opportunity loss. One might even back, particularly in China. opment in new battery technologies and pilot pro- newfangled technologies and, crucially, But it won’t help humanity get to grips with
go as far to say that a blind addition of renewable According to the Central Electricity Authority, jects using other technologies should be under- the military strategies thus made possible. its conundrum: More actors are getting
power should not come before some serious India has the potential of nearly 100 GW of PHES taken. On the distribution side, the big issues are This multiplication of scenarios and per- more weapons with more technological
progress has been made on storage. The basic idea capacity, of which only a small part is currently administrative and financial. Discom balance mutations undermines traditional calcula- and tactical applications. The risk that
in storage is a simple concept in physics. Convert operational. PHESs have a longer service life than sheets are broken and a cohesive plan to fix them is tions of strategy, which were largely based somebody, somewhere pulls a trigger,
the energy into a different (storable) form and most carbon-based plants and could well be an required. Yet another plan of ₹3 trillion was on the tools of game theory developed dur- intentionally or inadvertently, is rising.
reconvert it when it needs to be used. Conceptu- important element of the solution as India presses announced in the recent budget. Similarly, tariff ing the Cold War. In a gesture of global protest against this
ally, electricity can be converted to heat, light, on with its renewables strategy. A PHES requires a structures will need to be revised and modernized One upshot is that it’s becoming even insanity, 86 non-nuclear countries have
chemical, gravitational, or kinetic forms of energy. two-stage reservoir, with one altitudinally higher at both the central and state levels, particularly more important for all nine of the world’s signed a Treaty on the Prohibition of
Technology solutions to the storage problem can than the first, so that water can pumped upward. through state electricity commissions, many of nuclear powers to ‘signal’ their ‘postures’, Nuclear Weapons. But these states don’t
be old and new. Among the old solutions are the As the water is pumped and stored, energy con- which have become either dormant or spineless. in the jargon. They should explain their hold the future in their hands. The big
following: 1) Use renewable energy to compress air version takes place. Reciprocally, when the water Seductive as it is to talk about more and more gen- intentions and make themselves as pre- nuclear powers do. They must put their
and store the compressed air in large natural cav- is let down the chute, as is typical with hydro-elec- eration, the rhetoric will need to shift towards get- dictable as possible to others. daunting other differences aside and begin
erns; 2) Build large scale battery parks to store electric power, this energy is reconverted to electric- ting power to the consumer on a reliable and con- And yet the most recent such signalling comprehensive talks to prevent the worst.
tricity until it can be time-transferred to the grid; 3) ity through a turbine. Among others, India has sistent basis by turning the focus downstream. That was hardly reassuring. In Article 4 of its And the best placed to extend the invita-
Store energy in a giant flywheel; and 4) Use a two- operational PHES facilities in Purulia in West is the best way to stay current. Basic Principles issued last summer, Russia tion is the leader who is newest in office,
stage pumped hydro-power system. As of now, the Bengal, Kadamparai in Tamil Nadu, and Srisailam P.S: “Electricity is just organized lightning,” said asserts that one purpose of its nuclear arse- and yet has the most experience with disar-
compressed air and battery park solutions are cost- in Andhra Pradesh. So far, the environmental George Carlin, an American comedian. nal is “the prevention of an escalation of mament: Biden. ©BLOOMBERG
MY VIEW | EX MACHINA
Technology needs a principle-based regulatory regime

ble level, so that evolutions in the underlying Frank Act in the US, which, as the survey make room for even more of it, since each at the financial sector, this approach could
RAHUL MATTHAN technology do not mandate changes to the points out, requires banks to be responsible new regulation is now capable of being inter- just as easily be applied to the regulation of
form and structure of regulation. for 184 additional activities even though preted in different ways. What’s worse, with technology. Given how frequently technol-
In subsequent articles (bit.ly/2YyzsKP), I most of those responsibilities are either the addition of far more compliance obliga- ogy products transform themselves, regula-
elaborated on these ideas, calling on the gov- unnecessary or impossible. Indian regulations, it is near-impossible to monitor discre- tors find themselves always having to play
ernment to adopt systems-thinking to deter- tors are no different, spelling out increas- tion to see if it’s being exercised properly. catch up. If we can stop worrying about writ-
O
ne of the recurring themes of this mine the parameters for regulation and ingly complex obligations for every new sit- For these reasons, its suggestion is that we ing rules for every occasion and focus on
column is the challenge of regulat- design-thinking to formulate policymaking uation they come across. need to fundamentally developing principles that can be applied
ing technology. Lawmakers are tools. I drew inspiration from a World Eco- The survey suggests the change our legislative regardless of changes in technology or the
generally slow to move, taking their time to nomic Forum paper which suggested that reason regulators do this is This will keep approach. The Economic sector’s business models, we will no longer
consider all the consequences of their deci- the complexity of modern life requires gov- that they fear the conse- Survey recommends that need to amend the law to address each new
sions before enacting regulations. In com- ernments to be agile, and recommended quences of having their policy from we should look to develop invention.
parison, technology is always changing— that we adopt this approach to making tech- discretion audited ex-post principles-based regula- But alongside this, we will also need to
transforming itself, sometimes in a matter of nology policy. facto. By ensuring that reg-
being overtaken tion that allows for regula- implement the other recommendations of
is a partner at Trilegal and also

months. This is the primary challenge of
tech policy formulation and the problem we
Last week, as I read the Economic Survey
2020-21 (bit.ly/3cwyLtH), it was heartening
ulations comprise check-
lists of all the actions that
by the speedy tory discretion, while also
ensuring transparency in
the survey. If we move to principle-based
regulation, we will need to let regulators
has a podcast by the name Ex
Machina. His Twitter handle is
most urgently need to solve.
In a previous article (bit.ly/3refYre), I pro-
to note that some of these themes were
reflected in the government’s thinking.
regulated entities need to
perform, their role can be
evolution of decision-making, and put
in place effective post-facto
exercise discretion in applying these princi-
ples—without fear of ex-post facto sanction.
@matthan posed a three-point solution. I argued that Chapter 6 (bit.39Gi652)—titled ‘Process reduced to merely certify- technology and enforcement measures. It We will need to improve enforcement so
regulators must first identify the real objec- Reform: Enabling Decision-Making Under ing that the required steps recommends borrowing that egregious behaviour is punished effi-
tive they want to achieve and then detail Uncertainty’—noted that most regulators have been performed. So business models the Best Judgment Rule ciently and effectively.
what needs to be done to achieve it. I urged react to the complexity of the modern world long as every eventuality from corporate law and But most importantly, I believe we need to
regulators to seek help in doing this—from by trying to conceptualize every eventuality has been spelt out, there is applying it to regulators— build transparency into our systems, requir-
economists, social scientists and technolo- that could arise, so that they can then regu- no need for them to exercise discretion and suggesting that we should presume that reg- ing, as has been suggested, regulators to
gists, or anyone with the requisite experi- late them through statutory means. It is pre- little risk of being held accountable for dis- ulatory actions have been taken in good faith comprehensively list applicable regulations
ence to give them inputs so that they can cisely because of this that most modern reg- cretion improperly applied. unless proven otherwise. This, it argues, will on their website and to enforce only those
apply an appropriate level of nuance to their ulations tend to be impossibly complex, to Unfortunately, no regulation, no matter provide us the tools to deal with the com- listed regulations. Too often have we been
regulations. Most importantly, I suggested cover all possible scenarios even though it is how exhaustive, can spell out every possible plexity of the modern world. called upon to comply with arcane rules
that these objectives need to be abstracted clear that this is impossible to ever do. This circumstance that could come to pass. So, While the suggestions in the Economic nobody knew existed, and it’s time for that
into principles, defined at the highest possi- has resulted in legislations like the Dodd- instead of reducing discretion, regulations Survey might have been primarily directed sort of ambush enforcement to end.
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DON’T MISS
Trend of strong tax compliance TWITTERVERSE
drive has to continue: Pandey

Capt.Amarinder Singh
Gireesh Chandra Prasad Reducing compliance burden and @capt_amarinder
Telcos miss out gireesh.p@livemint.com making tax administration simple It is painful to see farm-
on budget boost NEW DELHI and effective is something that we ers losing lives in this
The government did not will need to do. Today we can see manner. We have lost 88
T
deliver on any of the he budget for 2021-22 the result of using technology in farmers during the
demands of the sector indicates that central GST. With data analytics, in a tax struggle against anti-
ahead of 5G roll-out this farmer Laws. They died
taxes on petrol and die- base of 1.2 crore people (GST regis-
year. See Page 6
sel are here to stay at tered entities), we could precisely fighting for their rights.
current levels for identify a few thousands trying to
another year, that the compliance game the system. With concerted
IOC may monetize Delhi fortifies enforcement drive will continue action against fake invoice dealers
its pipeline assets borders,
and goods and services tax (GST) and those involved in tax fraud,
arrests dozens
Indian Oil Corporation as farm compensation to states will coupled with other measures, it
Ltd is considering the protests remain a live issue. has been shown it is possible to
sale of stakes in a few simmer Finance secretary Ajay Bhushan achieve higher revenue collection
of its pipelines to bit.ly/2YPMqEt
Pandey explains the philosophy without increasing the tax rate and
raise funds. See Page 8
behind the current tax policy in an without any harsh coercive action
interview. Edited excerpts from an on the ground. Bill Gates
interview: If you can take targeted action @BillGates
The rejig in the customs duty against tax evaders, identified When it comes to pre-
structure to introduce farm through technology, and make life venting pandemics, We
cess may not pinch consumers simpler for honest taxpayers, it also need new capabili-
but it may affect states’ reve- gives very good results. It has been ties, including a global
nue, will it not? cess to a limited extent. Similarly, estimated for FY22 be enough year? demonstrated in GST and in direct alert system and infec-
Improving infrastructure in we adjusted excise duty and the for compensating states’ reve- That decision has not yet been tax, if you look at direct tax reve- tious disease first
agriculture is the need of the hour. additional excise duty which is nue loss next year? taken. The decision to borrow was nue collection between April to responders.
We need to make agriculture more meant only for the central govern- The guaranteed revenue to for the current year. This is some- January this fiscal and the last, the
‘
productive and effi- ment to provide states gets compounded by thing that I cannot expect to say gap is only 6.67%. In the next two
NLD demands cient so that farmers m INTERVIEW space for the cess. 14% annually. because that months, this gap is going to
Suu Kyi’s release gain by better infra- The excise duty Next year, one decision has to be reduce. We are going in this direc-
The party of Myanmar’s structure. For that, what was receipts estimated for FY22 is more compound- We need to make taken by the gov- tion.
detained leader Aung needed is dedicated funding for about at ₹3.3 trillion, similar to ing of 14% will agriculture more ernment. But the How do you plan to address the
San Suu Kyi called for infrastructure (investment) activ- this year, which implies there happen. What- decision to concerns of employees of
her immediate release productive and effi-
ity. This could be done by ear- would be no reduction in taxes ever gap is there extend the period state-run companies and
on Tuesday. See Page 9
marking the resources and ensur- on petrol or diesel until March in (states’) reve- cient so that farmers of cess collection banks planned for disinvest-
ing the certainty of funds. For that 2022. Your comment? nue, that you will gain by better beyond 2022 has ment? Rajnath Singh
+ the cess is imposed on a very lim- We made an estimate based on have to meet by infrastructure been taken. Disinvestment of government @rajnathsingh
Trai advises on ited number of items. Another consumption expected in the next way of compensa- We have seen holding does not mean the com-
DTH exclusives Ajay Bhushan Pandey Under the ‘Aatmanir-
objective was that while doing so, few years. Fuel price is decided by tion. GST Council Finance secretary strong compli- pany is getting closed down—it is
Trai has no objection to it should not cast a burden on con- oil companies based on their inter- has already ance drive only a management (and owner- bhar Bharat Abhiyan’
accepting the govt’s view sumers. If you have to spare con- national price. Our estimate is decided to extend boosting GST ship) change. The new manage- India is looking forward
that registered operators sumers of any burden, some exist- based on consumption and tax in the compensation date. revenue collection. What will ment also needs employees to to increase its defence
may offer platform manufacturing capabili-
services. See Page 8
ing duties have to be readjusted. terms of rupees per litre. It is not Will the Centre have to con- be the future direction of tax work for the company and all
What we have done is reducing dependent on price. tinue the special borrowing administration? these aspects have to be looked ties.
the customs duty and putting the Will the ₹1 trillion GST cess arrangement for another This trend has to continue. into by the ministry concerned.
IAF to order 83 Tejas FFC highlights gaps in India’s public health infra and quality
fighter jets in local Neetu Chandra Sharma
neetu.s@livemint.com
improvement in access, and
inadequate attention to urban
partnership initiative. outcomes and accountability.
“The commission has done This has led to underperform-
NEW DELHI health systems and municipali- well to draw attention to the ance in government health
manufacturing push ties, which have a key role to neglect of urban primary facilities and the consequent
T
he covid-19 crisis has play in public health, including healthcare, disease surveil- emergence of a large private
exposed India’s insuffi- for air and water pollution, road lance and neglect of non-com- sector as patients seek care
cient focus on core public traffic injuries and pandemic- municable diseases which con- elsewhere, it said. The report
Elizabeth Roche health functions, including a related vulnerabilities. tribute immensely to death, pointed out that almost 70% of
elizabeth.r@livemint.com lack of accountability in the ser- The report pointed to the ris- disability and are comorbid outpatient utilization and 58%
NEW DELHI vice delivery model, the 15th ing cases of non-communicable contributors to of all inpatient
Finance Commission (FFC) illnesses such as diabetes, obe- infectious disease There has been an utilization now
T
he Indian Air Force will said. sity, kidney and heart disease, a deaths. Major insufficient focus occurs in the pri-
award a ₹48,000 crore Its report, tabled in Parlia- major public health concern. gaps in infrastruc- on core public vate sector, which
order to state-run Hindu- ment on Monday, said there “Government service deliv- ture and health health functions is fragmented and
stan Aeronautics Ltd (HAL) for has been an insufficient focus ery system has traditionally workforce have largely unregu-
83 light combat aircraft (LCA) on core public health functions focused more on reproductive The report pointed to the increasing burden of non- greatly impeded
such as disease lated. “The health
Tejas in a major push for the such as disease surveillance health and infectious diseases communicable diseases which is a major health concern. HT the ability of the surveillance and system is not fully
local manufacture of cutting- and testing. The report found and less on non-communicable health system to testing, it said equipped to
edge military hardware. critical gaps in health infra- diseases, which are now the dominates service provision. augmented resources to the deliver efficient address the grow-
The order was cleared by the structure like subcentres, pri- dominant share of the disease “The private sector, which health sector, the Finance and equitable ser- ing burden from
Union cabinet headed by Prime IAF’s order for 83 Tejas aircraft mary health centres (PHCs), burden,” said the report. It has grown more by default than Commission has given the cen- vices,” said Reddy. non-communicable diseases,
Minister Narendra Modi last is worth ₹48,000 crore. community health centres added that there is a fragmenta- by design, needs better regula- tral and state governments a In a scathing review, the for which it will need to move
month. (CHCs) and doctors, nurses and tion and lack of coordination tion to align it with the vision mandate they must deliver,” commission said that service from addressing episodic
Ahead of the formal contract All the 83 fighter jets would paramedics. between different levels and and values of universal health said K. Srinath Reddy, presi- delivery has traditionally health issues towards the provi-
signing ceremony, defence be delivered to IAF within a It highlighted shortcomings sectors, including a badly regu- coverage. By providing much- dent, Public Health Founda- focused on inputs and infra- sion of people-centred chronic
minister Rajnath Singh on decade starting 36 months after in the quality of care, despite lated private sector which needed remedial direction and tion of India, a public-private structure instead of outputs, care,” it said.
Tuesday opened HAL’s second the signing of the pact, HAL
LCA plant in Bengaluru, which said. “The programme will
will double production capac- catalyse the aerospace ecosys-
ity of the Tejas to 16 aircraft a tem in India and would enable
year. The indigenously-devel- India to be the epitome of the
oped LCA is being billed as the prime minister’s vision for Aat-
“backbone” of the air force’s manirbhar Bharat,” it said.
fighter fleet in the years to The global business commu-
Govt aims to rope in retired teachers to improve schooling
come. nity had responded with
“HAL’s new LCA facility is an “enthusiasm to the Indian Prashant K. Nanda schools with very little will be followed by all 9.2 mil- A national digital educa-
example of how ‘Aatmanirbhar economy’s revivalist fervour prashant.n@livemint.com expenditure. lion teachers of the public and tional architecture will be set
Bharat’ is shaping and Aero India NEW DELHI “This is one of the few posi- private school systems in the up within the “context of a dig-
up and HAL New HAL facility will further show- tives for the education sector. country. ital first mindset where the
T
deserves the larg- inaugurated on case the nation’s he government plans to Utilization of experienced The budget said that stu- digital architecture will not
est indigenous Tuesday will accomplishment rope in thousands of manpower and development dents have so far been evalu- only support teaching and
order of 83 LCA double its annual in defence manu- retired teachers to lever- of professional standards will ated on unidi- learning activities
Mk-IA,” Singh
production
facturing and age their intellectual capital be key to improving the educa- mensional The move may but also enable
said. “The LCA is position India as and mentor schoolteachers. tion outcome. At least teachers parameters and address the educational plan-
the pride of India capacity from an innovative The education ministry will and their efficiency has found there will be a ning, governance
shortage of
and sends the eight to 16 aircraft defence manufac- also devise a national profes- some mention this time complete shift in teachers and a and administra-
right message to turer”, Singh told sional standard for teachers though the education outlay this. Assessments
dearth of trained tive activities of
others that India a gathering on the and train 5.6 million of them looks inadequate,” said Naray- will be done not the Centre, states
can make fighters of class eve of the three-day Aero India through online and offline anan Ramaswamy, leader, only to judge the teachers, more and Union terri-
in-house. The fighter is supe- show. mode, which will help better education and skill develop- cognitive levels so in rural India tories. It will pro-
rior in many ways when com- This year’s event is expected implement school reforms. Hiring experienced teachers will promote the concept of ment practice, at consulting of the learner but vide a diverse
pared to others fighters in its to see the signing of 200 pre- “There are a number of sen- mentoring in schools with very little expenditure. HT and auditing firm KPMG. also to identify education ecosys-
category, besides being cost liminary pacts between Indian ior and retired teachers. They The budget annexures said the unique strengths and tem architecture for develop-
effective,” the minister said. companies and their partners will be used for individual budget document underlined. the shortage of teachers and that standards will be devel- potential of children. Last ment of digital infrastructure,
“We cannot depend on oth- from abroad, Singh said. “The mentoring of schoolteachers Roping in retired teachers dearth of trained teachers are oped for all schoolteachers in year, 3 million elementary a federated but inter operable
ers on security issues and, world has now started to recog- and educators through con- will have multiple benefits, real issues. the form of the National Pro- school teachers were trained system that will ensure auton-
therefore, will make HAL nize India as a trusted defence stant online and offline sup- including utilization of experi- It will also foster community fessional Standards for Teach- digitally and in 2021-22 “we omy of all stakeholders, espe-
stronger, whatever it takes,” investment destination,” he port on subjects, themes and enced teachers in classrooms, involvement and promote the ers. These will enhance the will enable the training of 56 cially states and Union territo-
Singh said. said pedagogy,” an annexure of the more so in rural India, where concept of mentoring in capabilities of teachers and lakh schoolteachers”, it said. ries,” it said.
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