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OPINION, P6 ECONOMY, P2 INTERNATIONAL, P8
NITHIN KAMATH EDITORIAL FRESH PMLA CASE SKY HIGH
Govt must create Ice loss over last two-and- ED arrests Rana Kapoor World’s richest men,
half decades staggerring,
Aadhaar-like enablers, India must prepare for for alleged `4,300-cr Musk and Bezos, fight
not give freebies coastal inundation fraud at PMC Bank over satellite fleets
PUNE, THURSDAY, JANUARY 28, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM
VOL. XI NO. 309, 18 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E READ TO LEAD
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IN THE NEWS BUDGET FY22 BETTER MOMENTUM FARMERS’ STIR
‘Davos Dialogue’:
PM to address Govt looks to raise HUL says rural, urban
demand recovering
Parliament march called
off, 2 unions end protest,
import duties on
WEF event today
PRIME MINISTER NARENDRA
Modi will address the WEF’s
Davos Dialogue on Thursday,
FE BUREAU
Mumbai, January 27
The near-term demand key bodies stick to stand
dozens of items
reports fe Bureau in New
outlook is improving, and FE BUREAU (Bhanu) and Rashtriya Kisan Maz-
Delhi. Over 400 industry lea- HINDUSTAN UNILEVER (HUL) on we expect to see revival in New Delhi, January 27 door Sangathan — on Wednesday
ders from across the globe Wednesday reported a net profit of urban areas while ended theirprotest and dissociated
will attend the session on the `1,921 crore for the December rural markets FARMER UNIONS HAVE cancelled themselves from the agitation.
Fourth Industrial Revolution. quarter, up 18.9% y-o-y.Volumes the planned march to Parlia- However, leaders of Samyukt
grew at a very modest 4% while
should continue ment on February1 keeping Kisan Morcha (SKM) sought
PGCIL offers `7k-cr Move in sync with VOCAL FOR LOCAL price increases taken by the FMCG to do well. inviewtheviolenceinDelhi to downplay the develop-
Atmanirbhar Bharat, but Trade sources
major,onvariousproducts,amoun- —SANJIV MEHTA during the tractor rally on ment,claimingtheseorgan-
transmission assets say Budget
ted to 3%. Sanjiv Mehta, MD and MD & CEO, HUL Tuesday. The Delhi Police isationswerenot partofthe
not unduly protectionist, may raise duties on
through InvIT IPO say officials about 100 tariff lines Move not to
CEO, observed that while rural
demandhasbeenresilient,growing
arrested over 200 people in
connection with the violence
umbrella body and declared
that the protest against the
be country-
STATE-RUN POWER GRID on Duty hikes not specific but indoubledigits,theurbanmarkets, modern trade to bounce back,” and registered about 25 FIRs. three contentious farm laws would
Wednesday filed a draft offer aimed at may hit China which had been struggling,are co- Mehta said at a press conference. Following the violence, two continuetill theyare repealed.
document with the Sebi, BANIKINKAR PATTANAYAK earning revenue but the most mingbacktopositiveterritory.“Wi- farmer organisations of Uttar
seeking to monetise some of New Delhi, January 27 to curb low-grade, thmobilitycomingback,weexpect Detailed report on Page 4 Pradesh — Bharatiya Kisan Union Continued on Page 2
its assets via PGlnvlT, reports non-essential
Earlier list
fe Bureau in New Delhi. THE UPCOMING BUDGET will likely imports and support
included
Though the valuation of the raise customs duties on several dozen Atmanirbhar
auto parts,
assets has not been mention- products, including certain electronics initiative
electronics,
ed, five transmission lines and electrical items and auto parts, as Earlier, govtwas electrical
worth `7,000 crore are seen the government steps up focus to boost weighing a list of machinery and
to be up for grabs. localmanufacturingandcurb sub-stan- 1,173 products to lithium ion
dard, non-essential imports. But the finalise items battery
Axis Bank Q3 net hikes are likely to cover imports of a few for duty
billion dollars only, or a tiny fraction of hikes
profit drops 36% the country’s annual imports ($475 bil-
on provisioning lion in FY20).
“It's not targetted to be a revenue-
AXIS BANK ON Wednesday enhancing measure but the duty ratio-
reported a 36% y-o-y drop in nalisation is essential fortheAtmanirb-
net profit for Q3FY21 to har Bharat programme.The final list of
`1,117 crore on higher products is ready and the Budget will substitutionalreadyexists in greatmea-
provisions, reports fe Bureau make the announcement,” an official sure or is possible. In a few cases, it will
in Mumbai. The bottom line source told FE. correct inverted duty structures, under
reported by the lender was He, however, stressed that the move which raw materials are taxed higher
lower than the Bloomberg is not aimed at targetting imports in than the finished products.
estimate of `2,760 crore. The general, rejecting the notion that the An industry source said duties are
bank’s provisions rose 33% countryis getting undulyprotectionist. likelytoberaisedonabout100tarifflines.
y-o-y to `4,604 crore, but Ratherthegovernmentwilltargetonlya
remained flat sequentially. few segments of imports where local Continued on Page 2
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Pune
2 FINANCIAL EXPRESS
Economy
WWW.FINANCIALEXPRESS.COM
SECURE SUPPLY CHAIN
Nirmala Sitharaman, finance minister
THURSDAY, JANUARY 28, 2021
❝
A secure supply chain is vital to our growth and
Indian Customs has been striving hard to lead from
the front in ensuring it.
❝
Quick ● ‘DAVOS DIALOGUE’ Finmin Fresh Covid guidelines:
View PM to address WEF today capitalof unincorporated bod-
releases
`12,351 cr to
18 states for
Swimming pools for all,
more can watch films
Over 400 industry Tomar: `1-lakh cr for soil health,
leaders from across
ies and other capital.
Addressing avirtual round- RLB grant PRESS TRUST OF INDIA
New Delhi, January 27
of Information and Broadcast-
inginconsultationwithMHA,"
the globe will
post-harvest management table of mostly foreign the guidelines said.
investors in November, Modi PRESS TRUST OF INDIA THEMINISTRYOFHomeAffairs Swimming pools
attend the session FLAGGING HEALTH OF the people are being provided had promised “whatever it New Delhi, January 27 (MHA) on Wednesday allowed have already been permitted
soil and post-harvest man- adequate food through the takes”tomakeIndiatheengine cinema halls and theatres to for use of sports persons. Now
agement as major areas of National Food Security Act, of global growth. He had THE FINANCE MINISTRY on operatewith more peoplewhile these will be permitted for use
FE BUREAU concern for the Indian farm under which the govern- invitedthetopexecutivesof20 Wednesdaysaid it has released swimmingpoolshavebeenper- of all, for which a revised SOP
New Delhi, January 27 sector,Agriculture Minister ment provides five kg of global pension and sovereign `12,351 crore to 18 states for mitted for use by all in fresh will be issued by Ministry of
`1.81-lcr I-T Narendra Singh Tomar on wheat and rice per person, wealth funds that together providing grants to the rural Covid-19reopeningguidelines. Youth Affairs and Sports in
refunds issued PRIME MINISTER NARENDRA
Modi will address the World
Wednesday said the govern-
ment has set up a `1 lakh
per month at a highly sub-
sidised price of `2-3 per kg.
manage about $6 trillion in
assets to be part of the coun-
localbodies.Thisamountisthe
second instalment of basic
According to these new consultation with MHA.
guidelines, to be effective for Business to Business
so far in FY21 Economic Forum’s Davos Dia- crorefundunderAatmanirb- He was replying to a try’s“exciting progress ahead”. grants released in the financial February 1, there shall be no (B2B) exhibition halls have
THE INCOME Tax logueonThursdayandinteract har Bharat programme to query on what actions the The strong FDI inflows into year 2020-21, the ministry restriction on inter-state and alreadybeenpermitted.Nowall
Department on with global CEOs. strengthenthestorageinfra- government of India was India in trying times were also said in a statement. intra-state types of exhi-
Wednesday said it has Over 400 industry leaders structure and reduce post- taking to catalyse innova- emphasised by UNCTAD in a “The Department of movement of According to the new bition halls
issued over `1.81 lakh from across the globe will harvesting losses. tions and seek fresh solu- report earlier this week. India Expenditure, Ministry of people and guidelines, to be will be per-
crore worth refunds to attendthesession,wherein the Speaking at a panel dis- tions to transform the food andChinaweretwomajor“out- Finance has released an goods including mitted, for
more than 1.74 crore Prime Minister will be speak- cussionon‘UnlockingInno- systems. liers” in a gloomy year for FDI , amount of `12,351.5 crore to those for cross effective for February 1, which a
taxpayers so far this fiscal ing, through video conferenc- vation to Transform Food Tomarsaid nutrition is a as global inflows plunged 42% 18 States for providing grants land-border there shall be no revised SOP
year.Of this,personal ing, on the Fourth Industrial Systems’ during the World big focus and priority area onyearin2020to$859billion, to the Rural Local Bodies trade under restriction on inter-state will be issued
income tax refunds of Revolution—usingtechnology Economic Forum’s week- forthe countryand the gov- thelowestlevelsincethe1990s, (RLBs),” it said. The grants to treaties with and intra-state bytheDepart-
`62,231 crore have been for the good of humanity. long online Davos Agenda ernment has launched a the UNCTAD report said. RLBs are released as per the neighbouring movement of people ment of Com-
issued to over 1.71 crore ThePrimeMinister’sspeech Summit, the minister also National Nutrition Mission While India witnessed a recommendations of the 15th countries. and goods including merce in con-
taxpayers and corporate and interaction with CEOs said more than 80 crore also. — PTI 13% year-on-year rise, the Finance Commission to create No separate sultationwith
tax refunds of `1.19 lakh comeatatimewhentheIndian highest among key nations, in community assets and permission/
those for cross land- MHA.
crore have been issued in and the world economies are theaftermathofthepandemic. lion during these eight FDI inflows in 2020, China’s improve the financialviability approval/ e- border trade under The main
2.12 lakh cases. goingthroughanextraordinary Beating the Covid blues, months, which was 37% rose 4%, said UNCTAD. Of of the rural local bodies. permit will be treaties with focus of the
period of slowdown due to the India’s gross FDI inflows higherthan the same period in course,inabsoluteterm,China, The 15th Finance Commis- required for neighbouring countries guidelines is
India,IEAtieup Covid-19 pandemic. between April and November, FY20, the commerce and being a much larger economy, sion has recommended two such move- to consoli-
Investments remain critical 2020, hit a record $58.37 bil- industryministrysaidina sep- remained way ahead, with an types of grants — basic and ments,theMHA date the sub-
forenergysecurity toIndia’sresurgencestory,aspri- lion, up 22% from a year arate statement. Gross FDI inflow of as much as $163 bil- tiedtotheRLBs.Basicgrantsare said. stantial gains
INDIA ON Wednesday vate consumption has been before. Of these, FDI inflows includes FDI equity inflows, lion,while India’s stood at $57 untied and can be used by the All activities have been per- that have been achieved
inked a strategic badlybruisedbyincomelossesin intoequitystoodat$43.85bil- reinvested earnings, equity billion,it added. local bodies for location-spe- mitted outside containment against the spread of COVID-
partnership agreement cificfeltneedsexceptforsalary zones, except a few which will 19whichisvisibleinthesteady
with the International or other establishment expen- be subject to strict adherence decline in number of active
EnergyAgency (IEA) to
strengthen cooperation in Pleas in SC seek inquiry panel, FDI into India up
37% to $43.85 bn
diture. The tied grants can be
used forthe basic services of (a)
of SOPs. and new cases in the country
Social, religious, sports, over the last four months.
claim conspiracy against farmers
global energy security, sanitationandmaintenanceof entertainment, educational, “Itis,therefore,emphasised
stability and opendefecationfree(ODF)sta- cultural, religious gatherings that to fullyovercome the pan-
sustainability.This FOREIGN DIRECT INVEST- tus and (b) supply of drinking have already been permitted demic, there is need to main-
partnership will lead to an MENT(FDI)intoIndiaincreased water, rainwater harvesting up to a maximum of 50% of tain caution and to strictly fol-
extensive exchange of PRESS TRUST OF INDIA by37%to$43.85billionduring and water recycling. the hall capacity,with a ceiling low the prescribed
knowledge and would be a New Delhi, Jan 27 April-November 2020,accord- “The grants are meant to of 200 people in closed spaces; containmentstrategyfocussed
stepping stone towards ingtodatabythecommerceand ensure additional funds to and keeping of the size of the on surveillance, containment
India becoming a full TWO PLEASWERE filed in the industry ministry. Total FDI RLBs over and above the funds ground or space in view, in and strict observance of the
member of IEA,a power Supreme Court on Wednesday inflows (including reinvested allocated bythe Centre and the open spaces. guidelines and SOPs issued by
ministry statement said. overthetractorrallyviolenceon earnings) during the eight- State for sanitation and drink- “Now such gatherings will MHA and Ministry of Health
theRepublicDaywithoneseek- monthperiodofthecurrentfis- ing water under the Centrally be allowed subject to SOP of andFamilyWelfare(MOHFW),”
UPSinghtakesover ingsettingupofacommission, cal grew by 22% to $58.37 bil- Sponsored Schemes like the state and UT concerned. the guidelines said.
headed by a retired apex court lion.“FDI equityinflowreceived Swachh Bharat and Jal Jeevan Cinemahallsandtheatreshave Containment zones, if
astextilessecretary judge, to inquire into the inci- during2020-21(Apr-Nov,2020) Mission,”the ministry said. already been permitted up to required, shall be carefully
U PSINGH,a 1985-batch dent while the other urged it to is$43.85bn.Itisthehighestever The states are required to 50 percent of seating capacity. demarcated by the district
IAS officerof the Odisha direct the media not to declare Security tightened at Red Fort on Wednesday, a day after it forthefirst8monthsofafinan- transfer the grants to the RLBs Now they will be permitted to authorities at the micro level,
cadre,took overas secretary farmers as “terrorist”without was stormed by protesting farmers PTI cial year and 37% more com- within 10 working days of operate at higher seating taking into consideration
in the ministryof textiles anyevidence. pared to the first 8 months of receipt from the Union gov- capacity, for which a revised guidelines prescribed by the
onWednesday. Priorto this, The tractor parade on Tues- sought direction to concerned wish to subvert this just strug- 2019-20,” itsaid. —PTI ernment. SOP will be issued by Ministry MoHFW in this regard.
he held the postof secretary day that was to highlight the authority to lodge FIRs against gle of the country's farmers.
US aims to rebuild clean
in the departmentofwater demands of farmer unions to individuals or organisations While reiterating its sup-
resources,river repeal three new agri laws dis- responsiblefortheviolence. port to farmers’ demand for
development and Ganga solved into anarchy on the
SAD says won’t tolerate
repealing the three farm laws, IMF favours
rejuvenation, Jal Shakti streets of the national capital as the SAD in a statement issued
extension of
energy ties with India
ministry. thousands of protesters broke attack on Constitution by its leader and Rajya Sabha
throughbarriers,foughtwiththe Adayafterviolenceinthefarm- MP Naresh Gujral said, “We
Launchof‘workfrom police,overturned vehicles and ers’ tractor march, the Shiro- appeal to the protesters to pandemic aid,
anywhere’portal hoisted a religious flag from the mani Akali Dal on Wednesday remain peaceful, non-violent thrust on infra
rampartsoftheiconicRedFort. said it will not tolerate any and disciplined. We will FE BUREAU India has set a target to India has set a target to
ITAND communications Petitioner-advocate Vishal attemptofattackonthedemo- strongly raise the voice of our New Delhi, January, 27 raise the capacity of raise the capacity of installed in Budget
minister Ravi Shankar Tiwari,besides seeking setting cratic institutions or the Con- farmers in the upcoming Par- renewable energy generation
Prasad will launch virtual upofaninquirycommission,has stitution of India by those who liament Session.” THE NEWLYELECTEDgovern-
installed renewable plantsfromthecurrentlevelof LALIT K JHA
intelligence tool Tejas and ment of the United States of energy generation plants 91 giga-watt (GW) to 450 GW Washington, January 27
‘Work from Anywhere’ America (USA) wants to restart from the current level of by2030.About 35GWis under
portal at an event on
Thursday,according to an
official release.The
ED arrests Yes Bank co-founder the clean energy programmes
whichwerejointlybeingdevel-
oped during former President
91 giga-watt (GW) to 450
GW by 2030
various stages of implementa-
tion and 30 GW under various
stages of bidding. If the 45.7
AHEAD OF INDIA’S
annual budget presen-
tation next week, IMF's
National Informatics
Centre Services Inc will
celebrate 25 years of its
in fresh money laundering case Obama’s regime.
“Between Prime Minister
Modi’s first visit to the US in
the framework for strategic
partnership between the
GW of hydro and 6.8 GW of
nuclear capacities are
included, the target under the
Chief Economist Gita
Gopinath has favoured
the extension of the
establishment at an event. PRESS TRUST OF INDIA and his familymembers in lieu September, 2014 and Presi- International Energy Agency Paris climate change accord of pandemic support mea-
New Delhi, January 27 of certain loans provided by dent Obama’s trip to India in (IEA) members and the gov- having 40% of installed power sures, thrust on invest-
ESICbeneficiariesto the Yes Bank to a number of January, 2015, it was a great ernment of India.The partner- generation capacityfrom non- ment in infrastructure
THE ENFORCEMENT DIREC- high-profile borrowers. privilege to work with my ship aims to enhance global fossil fuel sources can be and expanding health
gethealthservices TORATE has arrestedYes Bank In the latest case, sources Indian counterparts in creat- energy security, stability and achieved by 2022 itself. sectors programmes
EMPLOYEES’STATE co-promoter Rana Kapoor in a said, Kapoor was placed under ingandexpanding15co-oper- sustainability, and is seen as a “It is precisely this kind of like Ayushman Bharat,
Insurance Corporation fresh money laundering case arrest in jail as per provisions ative programmes between stepping stone towards India bold action by India, which in and a very credible
(ESIC) insured persons linked to an alleged `4,300 of the Prevention of Money Indian and the US, and we becoming a full memberof the fact goes beyond the initial divestment path for
(IPs) would get access to crore fraud at the PMC Bank in Laundering Act (PMLA). intend to rebuildthat relation- IEA.The contents of the strate- Paris commitments,that Pres- commercially viable
health services under the Maharashtra, official sources He was later produced ship,”Andrew Light,who leads gic partnership will be jointly ident Biden is championing companies.
ESI scheme in all 735 said on Wednesday. Rana Kapoor before a special PMLA court the office of international decided by the IEA members our partners to jointly tackle The Indian govern-
districts of the country Kapoor, 63, was already in that sent him to ED custodytill affairs at the US department of and India, including a phased climate change,” Light, Who ment has provided a lot
from April 1,an official judicial custody after he was connectionwithallegedfinan- January 30 in the second energy,said on Wednesday. increase in benefits and served as senior adviser and of schemes for small and
said.At present,ESIC’s arrested by the central probe cial irregularities and pur- money laundering case filed Light was speaking at the responsibilitiesforthecountry India counselorto the US from medium enterprises,
health services are fully agency in March last year in ported kick backs paid to him against him,they said. virtual event on the signing of as an IEA strategic partner. 2013 to 2016,added. most of which is in the
available for its IPs in 387 form of liquidity sup-
districts and partly in 187 port, Gopinath told PTI
districts,while there are on Tuesday.
161 districts that do not From the Front Page “And you want to
have such services at all. revisit it and see how
Budget FY22: becountry-specific,in keeping renewed sense of urgency. considering what happened on which jointly undertook the spokesperson of BKU (Tikait), effectively that is work-
Ethanol blending with the fairtrade principles,it the Republic Day.” Singh of struggle,”the statement said. and others in connection with ing and see whether
target is 20% by5yr Govt to raise could hurt China the most, as Farmers' stir: RKMS was removed as coordi- The SKM leaders also said the violence in the national additional support may
INDIAHAS preponed the import duties
Beijing is the biggest supplier
of such cheap and low-grade Parliament natoroftheAllIndiaKisanSang-
harsh Coordination Committee
that when they announced
Kisan Parade on January 26,
capital during the tractor rally.
Policehasdetained200people
need to be provided,”she
said while responding to
target of achieving 20%
ethanol-blendingwith on dozens of
products to India.
Even before the Budget for march called (AIKSS) in December last year
after differences between him
anti-social elements like Deep
Sidhu and others, along with
and have registered about 25
FIRs so far, in connection with
a question on herrecom-
mendations to Finance
petrol byfiveyears to 2025
as it looks to cut items FY21wastabled,thecommerce
and industryministryhad sug- off, two unions and other leaders,even though
he continued the protest at
KMSC, attempted to torpedo
the farmers’ agitation. The
the violence that left over 394
policemen injured, said SN
Minister Nirmala
Sitharaman,aheadofher
dependence on costlyoil
imports,oil minister
EARLIER THIS fiscal, industry
executives had drawn a list of
gested that customs duties on
as many as 300 products,
end protest, GhazipurborderofDelhi.
On the otherhand,the SKM
union leaders appealed to the
farmers to stay on the protest
Shrivastav, commissioner of
Delhi Police.Apart from Tikait,
presentation of the
annual Union Budget on
Dharmendra Pradhan said
onWednesday.“In 2014,
1,173 items – ranging from
auto parts,compressors forAC
including footwear, furniture,
TVparts,chemicalsandtoys,be
key bodies stick leaders, in a joint statement,
claimed a conspiracy was
venues and continue a peace-
fulstruggleaftersomefarmers
many other leaders are also
named in the FIRs. Any FIR
February 1.
It would be a good
less than 1% ethanolwas
being blendedwith petrol
and refrigerators to select steel
and aluminium products and
raised, as part of a broader
crackdown on what it consid-
to stand hatched by the government
with Punjab-based Kisan Maz-
returned to Punjab.The farm-
ers’ organisations resolved to
againstanyfarmerleaderisFIR
againstfarmersofthecountry,
time for banks and Non-
Banking Financial Com-
against the target of 5%.In electrical machinery — for the ered “non-essential” imports. “IAMdeeplypainedbywhatever door Sangharsh Committee continue this agitation, PTI reports,quotingTikait. panies (NBFCs) to raise
the last sugaryear,this government to zero in on The Budget for FY21 raised the happened in Delhi yesterday and others against their peace- according to the statement TheCongressraisedobjection capital given the attrac-
ratio has reached 8.5% and products/sub-products on duties on dozens of products (Tuesday)andendingour58-day ful struggle. issued before a general body over the registration of FIR tiveness of financing
nextyearit is 10%,”he said. whichtheimportdutiescanbe but didn’t coverall these items. protest,” said Bhanu Pratap “The Union government meeting of 40 unions. against farm leaders and criti- conditions at this point,
hiked. These items are mostly However, as sources had Singh,presidentofBKU(Bhanu), has been severely shaken by Seemed unrepentant of the cisedthegovernmentforletting she said.
Bengal tops in 100 imported from China and can pointed out earlier, China’s whoalsoisoneofthefewfarmer this peasant agitation. There- incident,KMSC president Sat- out the perpetrators ofviolence. “We have to also keep
be substituted with local pro- misadventure at borders with leaderswho filed petition in the fore, a dirty conspiracy was nam Singh Pannu said, “We Claiming that Deep Sidhu is yet in mind that as these
Days’Work scheme ductionwithoutmuch hassles, India only hardened New Supreme Court to declare the hatched with Kisan Mazdoor had declared at the outset that to be booked, Congress pandemic measures are
WESTBENGAL generated sources had said earlier. Delhi’s resolve to target the lawsunconstitutional. Sangharsh Committee (KMSC) we would take the Outer Ring spokesman Randeep Surjewala lifted, there would very
36 crore person days under Importsofthese1,173items substandard imports from the VM Singh, president of andothersagainstthepeaceful Road. Even the SKM had also onWednesdaydemandedhome likely be an increase in
the 100 Days’Work from Chinawereworth $12 bil- neighbour.Combinedwith the Rashtriya Kisan Mazdoor San- struggleofotherfarmerorgan- said so, but it backed out later. ministerAmitShah’sresignation. non-performing loans.
scheme to get the first lion in FY19.They made up for Covid-19 pandemic and unre- gathan (RKMS), said: “I can’t isations, who had set up their Webrokebarricadesonlywhen He said it was failure of Shah for Even the RBI (Reserve
position in the countryand just2.3%ofIndia’stotalimports liabilityof supplychains dom- carry forward protest with own separate protest site after the police stopped us.” thesecondtimeinDelhiafterthe Bank of India) has pro-
bag the NationalAward thatyearbut17%ofNewDelhi’s inated by China, the border someonewhose direction is dif- 15 days of beginning of this Meanwhile,theDelhiPolice February2020 riots as this time jected that,” Gopinath
fourtimes in a row,the purchasesfromBeijing. clash prompted India to pur- ferent. I wish them best and farmers’ agitation. They were has registered an FIR against “miscreants were allowed to said. —PTI
state government said. While any duty hike won’t sue self-reliance with a withdrawing from the protest not part of the organisations farmer leader Rakesh Tikait, entertheprotectedRedFort”.
Pune
WWW.FINANCIALEXPRESS.COM THURSDAY, JANUARY 28, 2021
FINANCIAL EXPRESS ECONOMY 3
EPC firms hit India’s steel production falls by more than 10% Top five steel producing countries
pre-Covid
Rank Country 2019 (MT) 2020 (MT) Chg (%)
FE BUREAU million tonne (MT) over the Though India retained 17.2% over 2019. China 1,001.3
China and Russia 1 5.2
«
New Delhi, January 27 previous year; but China bet- its second spot, its produc- Overall, Asia produced 1,053
operating tered its production to 1,053
produced more steel in
2020 than in 2019. Among
tion fell by 10.6% in 2020 to 1,374.9 MT crude steel in 2 India 111.4 10.6
«
BUCKING THE GLOBAL MT, up by 5.2% over 2019. 99.6 MT from 111.4 MT a 2020, an increase of 1.5% 99.6
level, says trend, China and Russia pro- China’s share of global crude the top five nations, year earlier. compared to 2019; but pro- 99.3
3 Japan 16.2
«
duced more steel in 2020 steel production increased production declined in India’s share in the global duction declined 11.8% in 83.2
Crisil report
than in 2019. Among the top from 53.3% in 2019 to India, Japan and the output shrunk to 5.3% in the European Union to 138.8 4 Russia 71.6 2.6
«
five nations, production de- 56.5% in 2020. United States by 2020 from 5.9% a year ago. MT. Production in North 73.4
clined in India, Japan and the Russia’s production also up to 17.2% Japan also retained its third America was also down 87.8
5 US 17.2
«
United States by up to 17.2%. improved by 2.6% to 70.4 spot, but its production fell 15.5% to 101.1 MT; the de- 72.7
According to World Steel MT. Toppling the US, Russia by 16.2% to 83.2 MT. cline in South America was Source: World Steel Association
Association (WSA), crude also managed to improve its The US, the worst hit in milder at 8.4%.Production in Crude steel production fell globally China bettered its production to 1,053
steel production fell globally ranking by one notch to the world’s top five steel produc- the pandemic, produced 72.7 Africa remained unchanged by 0.9% in 2020 to 1,864 MT MT, up by 5.2% over 2019
by 0.9% in 2020 to 1,864 fourth position among ing nations. MT crude steel in 2020,down at 17.2 MT.
FE BUREAU
New Delhi, January 27
ENGINEERING PROCURE-
MENT AND construction (EPC)
companies, engaged in road de-
velopment, have reached their
pre-Covid operating level as is-
sues around availability of
labour and raw material have
largely been resolved, rating
agency Crisil said in a report.
“Most developers are now
operating at pre-pandemic lev-
els, up from 70% of pre-pan-
demic levels at the end of June.
Revenue growth for the June
quarter had plunged 33% on-
year due to the pandemic-led
disruption in operations,”it said.
At the same time, operating
profitabilityof the companies re-
mainedhealthyataround14.5%
in the first half of fiscal 2021,
down only marginally by 70-80
basispoints overfiscal 2020.This
was possible due to their sharper
focus on cost reduction. “This
trendisexpectedtosustaininthe
second half as well, despite in-
creasing steel (an input in road
construction) prices,”Crisil said.
Moderation in overall rev-
enue growth for road-building
engineering, procurement and
construction (EPC) companies
will be limited to 5-8% this fis-
cal despite a 16% de-growth
logged in the first half.
“This is because the players
whose operationswere impacted
because of Covid-19-led lock-
downs, have seen good revenue
recoverysincethesecondquarter,
with order booking riding strong
on steady awarding by govern-
ment agencies and operations
backtonearnormal.Thepullback
in revenue growth,togetherwith
continued prudent working cap-
ital management and healthy
balance sheets, will help keep
creditqualityofroadEPCcompa-
nies stable,”Crisil said.
Large road EPC players are
likelyto see revenues recoverand
log a 15-20% growth in fiscal
2022, supported by their strong
orderbooks.Withprofitabilityre-
maining steady, their credit pro-
fileswould sustain aswell,it said.
Pune
4 FINANCIAL EXPRESS
Companies
WWW.FINANCIALEXPRESS.COM
E-COMMERCE BOOM
Kalyan Krishnamurthy, CEO, Flipkart Group
THURSDAY, JANUARY 28, 2021
❝
Close to 100% of PIN codes in India have seen e-com-
merce adoption...In the next 3-4 years, we were esti-
mating the e-commerce market size to be roughly in
the range of about $50-60 billion. Today, the same
numbers are actually close to $90-100 billion.
❝
Quick ● Q3 RESULTS TikTok ban: Parent ByteDance
View HULprofit rises 19%,revenue shuts India business, to cut
workforce to bare minimum
Marico Q3 net profit
rises 13% to `312 cr
soars 20% as demand picks up PRESS TRUST OF INDIA
New Delhi, January 27
FMCG FIRM Marico on Wednesday FE BUREAU Mehta said real demand is hovering
reported a 13.04% increase in Mumbai, January 27 Report card around 5%, which augurs well. Rural CHINA'S BYTEDANCE WILL shut its India
consolidated net profit to `312 crore demand remains resilient on the back of businessandcutthe2,000-plusemployees
(` cr) Q3FY20 Q3FY21 Chg (%)
«
for the quarter ended December THE WORST IS behind for Hindustan government interventions while urban to a bare minimum over the uncertainty in
2020.The company had posted a net Unilever, going by the sturdy earnings Revenue Ebitda Net Ebitda demand,which had got severely impacted making a comeback following a ban on its
profit of `276 crore in the October- growth the company reported for the from profit margins during the Covid crisis, is also starting to hugely popular TikTok video app in the
December quarter a year ago.Revenue December quarter. The consumer behe- operations (%) come back.“The near-term demand out- country,the companytold employees in an
from operations went up by 16.33% moth posted robust double-digit growth in look is improving, and we expect to see internal memo onWednesday.
to `2,122 crore. revenues and income forthe quarterended 11,682 revival in urban while rural should con- TikTok’s global interim head Vanessa
9,696
December2020,asconsumptionpickedup 24 tinue to do well,”he added. Pappas and vice-president for global busi- don’t knowwhenwewill make a comeback
Emami Q3 profit rises across the company’s portfolio. Health, hygiene and nutrition, which ness solutions Blake Chandlee in a joint in India,we are confident in our resilience,
2,804
2,405
While rural demand remained resilient, forms 80% of HUL’s business has grown emailtoemployeeshavecommunicatedthe anddesiretodosointimestocome,”Pappas
1,921
45% at `209 crore
1,616
urban demand also made a comeback with 24.8 10% in the October-December period, decisiontoreduceitsteamsizeandthedeci- and Chandlee said in the jointemail.
HOMEGROWN FMCG firm Emami the economy reopening. HUL’s volume same as the preceding quarter. Discre- sionwill impact all employees in India. Whencontacted,aTikTokspokesperson
on Wednesday reported a 44.67% rise growth sustained its positive momentum 20 16.6 19 80 bps tionary segment continued its improving According to sources at ByteDance, the saidthecompanyhasworkedsteadfastlyto
«
«
«
«
in consolidated net profit at `208.96 and came in at 4%.However,the company trajectory and fell 1% versus a decline of company is retrenching its workforce in complywiththegovernmentofIndiaorder
crore for December quarter 2020, sounded caution on the inflationary pres- 25%and45%witnessedintheSeptember India and will continue to operate with issued on June 29, 2020, and continually
helped by sales growth and cost sures building up in palm oil and tea,which are very well-positioned to capture the and June quarters.The ‘out of home’ cate- skeletal staff in select department such as strives to make its apps comply with local
control measures.The company had has resulted in HUL taking a 2.5% hike in growth opportunities and accelerate gory,which has suffered the most as peo- legal, administrative, human resource, laws and regulations.“It is therefore disap-
posted a profit after tax of `144.44 pricesin its skin-cleansing categoryin Q3. momentum,”he said. ple’s spends on ice-cream and food solu- accounts etc, to facilitate the settlements pointingthatintheensuingsevenmonths,
crore for the year-ago period,Emami ThoughHUL missedtheStreet’sexpec- CFO Srinivas Phatak said the prices will tions have declined due to Covid-19, also and engagementwith the government. despiteoureffortswehavenotbeengivena
said in a regulatory filing. tations on net profit, it managed to beat inch up further. “We are also taking in saw a sharp improvement,indicating that PappasandTikTok’sglobalgeneralcoun- clear direction on how and when our apps
estimates on revenues while operating another2.5%priceincreaseaswespeakinto market sentiments are improving. sel Erich Andersen briefed employees in a couldbereinstated.Itisdeeplyregretfulthat
Welspun India Q3 profit income was in line with expectations. It the market in cleansing. This brings it to townhallonWednesdaymorningaboutthe after supporting our over 2,000 employees
reported a 19% year-on-year rise in net about 5%, but one has to think of a price Changes in HUL management lay-off plan and offered them three-month inIndiaformorethanhalfayear,wehaveno
up overtwofold to `174 cr profit to `1,921 crore.Bloomberg consen- increaseofanywherebetween7%and9%. HULannouncedtheappointmentofRitesh salaryaswellasadditionalmonthremuner- choicebuttoscalebackthesizeofourwork-
HOMETEXTILES majorWelspun sus estimates had projected a net profit of So,we will have to manage this through a Tiwari as executive director (finance) and ation in proportion to the number of years force. We look forward to receiving the
India onWednesdayreported an over `2,052.56crore.HUL’srevenuefromoper- combination of savings,positive mix while CFO and a memberof the boardwith effect theyhaveworkedforthecompany.Theexec- opportunitytorelaunchTikTokandsupport
twofold increase in consolidated net ations surged 20% y-o-y to `11,682 crore maintainingprice-competitivenessandgiv- from May 1, subject to necessary govern- utives expressed uncertainty on the com- the hundreds of millions of users, artists,
profit at `174.80 crore for the third during the quarter against analyst expec- ing rightvalue to the consumers,” he said. mentapprovals.Hewillalsotakeoverasthe pany’s comeback to India but expressed story-tellers, educators and performers in
quarter ended December 31,2020. tations of `11,566.66 crore.This includes The Ebitda during the quarter rose vice-president (finance), South Asia, hope to do so in times to come.“While we India,” the spokesperson said.
The company had posted a the recentlyacquired Horlicks business. 16.6%y-o-yto`2,804crore.However,com- Unilever.TiwariwillsucceedSrinivasPhatak
consolidated net profit of `75.09 HUL CMD SanjivMehta said inflation- modity price inflation, rise in investments whowill move as EVP,financial control and
crore in the same period last fiscal.
Hero MotoCorp to enter
arypressuresarebuildingupinselectcom-
modities and the company will manage
them judiciously.“I am confident that we
behind brands and increase in advertising
expensesresulted in an 80 basis pointsy-o-
ydecline in Ebitda margins at 24%.
risk management, based out of Unilever’s
headquarters in London,and be part of the
finance leadership executive team.
‘Chinese brands control 75%
Mexico with Grupo Salinas of Indian smartphone mkt’
HERO MOTOCORPwill soon start ope-
rations in Mexicoas part of its global
expansion strategy.The company,
India Cements posts net profit of `62 cr in Q3
which recentlycrossed 100 million FE BUREAU crore against `1,194.42 crore.Though the 26.66 lakh tonne in the previousyear,reg-
units in cumulative production,has Chennai, January 27 company’s volume dropped by 11% in Q3, istering a drop of 11%.
India smartphone market share
entered into a distribution agreement resulting in contribution loss of more than India Cements vice-chairman & MD
Xiaomi
with Grupo Salinas,foundedby BACKED BY IMPROVED price realisation `45 crore for the quarter, Ebitda was sub- NSrinivasansaideventhoughthecompany
17 14
Mexican entrepreneurRicardo Salinas. and reduction in variable and fixed costs, stantially improved by 65% backed by the hasbeenoperatingwithcapacityutilisation 27 Samsung 26
India Cements on Wednesday reported an improvedrealisationandcutinvariableand ofaround50%duringthelastninemonths 10
Royal Enfield launches impressive performance forthe third quar- fixed costs to `218 crore from `132 crore. owingtodemandconstraints,thecompany 9 Vivo
2020 (%)
2019 (%)
ter of FY21 by registering a net profit of TheEbitdamarginwasat19%against11% will not drop prices to get a marginal
MIYforapparel,gear `62.02croreagainstanetlossof`5.37crore in the previousyear. increase in the volumes. “We will, at this 10 Realme
13
ROYAL ENFIELD on Wednesday in the corresponding quarterof FY20. The overall Q3 volume of clinker and pointoftime,onlyproducewhatwerequire 21 Oppo 21
announced Make It Yours The total income stood at `1,162.91 cement stood at 23.77 lakh tonne against and sell it at priceswe decide,” he said. 16 16
Others
personalisation tool for its apparel
and gear range.“With MiY for apparel,
PowerGrid offers transmission ABFRL buys 51%
Source: Counterpoint Research
consumers and riding enthusiasts
will be able to personalise their riding
assets worth `7k cr via InvIT IPO in Sabyasachi
and lifestyle essentials byvisiting the
website,”it said. RISHI RANJAN KALA duetoCovid-19,anti-Chinasentiments,and
brand for `398 cr
New Delhi, January 27 developing manufacturing ecosystem. It
Daimler launches 8 new FE BUREAU also marked the re-entry of Indian brands
New Delhi, January 27 THESMARTPHONESHIPMENTdataforthe like Micromax.
BharatBenz models FE BUREAU 2020calendaryearshowthatChinesecom- WithitsnewlylaunchedINseriessmart-
DAIMLERINDIACommercialVehicles STATE-RUN ELECTRICITY transmission Mumbai, January 27 panies control two-thirds, or 75%, of the phones, Micromax has reached its highest
(DICV),awholly-owned subsidiaryof utility Power Grid Corporation of India Indianmarketdespiteagrowingcallforboy- market share in six quarters.With Indian
DaimlerAG of Germany,onWednesday (PGCIL) on Wednesday filed a draft offer ADITYA BIRLA FASHION and Retail cotting their products amid the ongoing brands revamping their portfolios, and
introduced8 newproducts in its range documentwiththeSecurityandExchange (ABFRL)hasenteredintoadefinitiveagree- bordertensionsbetweenthetwocountries. Reliance Jio coming up with an entry-level
of BharatBenzCVs,targeting new Board of India (Sebi),seeking to monetise ment with designer brand Sabyasachi for “Theanti-Chinasentimentslargelysub- 4G smartphone,2021 will be a significant
segments such as FMCG,e-commerce, some of its assets through PGlnvlT, the acquiring a 51% stake.The cost of acquisi- sided by the end of the year with Chinese yearforIndianbrandsandtheCounterpoint
parcel and containerapplications, infrastructure investment trust (InvIT) tion is to the tune of `398 crore,according brandsholding75%marketsharein2020. expects theirshare to increase.
besides eyeingthe mines industryfor recently formed by the company. This is the first time a PSU in the to a filing on BSE. Duringtheyear,wesawinnovativechannel “At the end of theyear,wewitnessed the
deployingthevehicles as coal carriers. Though the valuation the assets to be power sector will monetise its Accordingto acompanystatement,the strategies from leading brands due to return of Indian brands with Micromax
put up for sale through the proposed ini- partnership will add significant weight to changedconsumerbehaviourinthewakeof announcing its IN series smartphones.
assets through the InvIT model and
VenWiz raises $3 million tial public offer has not been mentioned
use the proceeds to fund new and
ABFRL’s growing ethnic wear portfolio. Covid-19,”Counterpoint Research analyst Indian brands are looking to expand their
by PGCIL in the stock exchange filing,five The company expects to build a large eth- ShilpiJain said. marketsharebyleveragingthePLIscheme,”
in seed funding transmission linesworth `7,000 crore are under-construction capital projects nic wear business over the next few years Offline-centricbrandssuchasSamsung, Jain added.
INDUSTRIALSERVICES platform seen to be up for grabs. to complement its strong and diverse Vivo and Oppo increased their online pres- Overall,smartphoneshipmentsdeclined
VenWiz has raised $3 million in a seed This is the first time a PSU in the power portfolio in western wear segment. ence.Samsungincreaseditsonlinepresence 4%y-o-ytoreacharound150millionunits
round led byAccel India and Nexus sector will monetise its assets through Transmission(`1,061crore)andPowerGrid ABFRL MD Ashish Dikshit said: “We withtheGalaxyMseriesonAmazonandthe in 2020.However,the market crossed 100
Venture Partners with participation the InvIT model and use the proceeds KalaAmbTransmission (`274 crore). believe over the next fewyears,ethnic wear Galaxy F series on Flipkart. Rival Xiaomi million units in the second half of 2020 for
from other investors includingTitan to fund new and under-construction All the five SPVs have 35years of trans- isgoingtobeanincreasinglyimportantcat- launched‘MionWheels’todriveitssaleson the first time ever.High consumerdemand
Capital,Anand Chandrasekaran capital projects. mission service agreement with their egoryasyoungandconfidentIndiansredis- offline channels and in remote areas. afterthelockdownaswellasstrongpromo-
(Five9),Rajendra S Meht(ex-Reliance). Afterthe Cabinet approved the moneti- respective customers and their revenue cover their culture and heritage...ABFRL Xiaomi recaptured the top spot from tions on online channels and newuse cases
sationofPGCILassetsthroughInvITinSep- flows are insulated from demand, supply intendstocraftaportfoliothataddressesthe Samsung in Q4 2020 with a strong 13% like e-learning and work from home drove
Vista Rooms raises `10 cr tember2020,the companyhad earmarked and price fluctuation of powertariff.As on entire gamut of ethnic wear segments: year-on-year (y-o-y) growth. The South the market in the pandemic-hityear.
five special purpose vehicles (SPVs) which September 30, 2020, all the five SPVs had value,premium and luxury.” Korean company had displaced its Chinese Another notable feature is of Apple sur-
in fresh funding round ownseparateoperationaltransmissionsys- no external debt,and their entire borrow- Sabyasachi Mukherjee, CEO and rival from the top spot in Q3 2020.Accord- passing 1.5 million shipments for the first
VISTA ROOMS,a hospitality brand, temsunder“assetsclassifiedasheldforsale”. ings from PGCIL are expected to be founder,Sabyasachi Brand,said:“I am hon- ing to Counterpoint Research data, Sam- time in a single quarter in India.It took the
has raised `10 crore in a round which The aforementioned SPVs are PowerGrid replaced by loan from the InvIT. ouredandexcitedtohavefoundapartnerin sungwasoncetheundisputedleadertillQ3 sixth spot in Q4 2020with a huge 171%y-
was led by DSG Consumer Partners, Warora Transmission (valued at `2,099 The government expects PGCIL’s InvIT Mr Kumar Mangalam Birla and ABFRL. 2017 but was replaced for the first time in o-y growth in Q4 and 93% y-o-y growth in
with participation from investors crore), PowerGrid Parli Transmission to attract both domestic as well as global Aligned in our vision, and committed to Q4 2017 byXiaomi. 2020.The launch of the iPhone 12,aggres-
including CA Holdings,Artha India (`1,752 crore), PowerGrid Jabalpur Trans- investors including sovereign wealth excellence,we will work together to grow a Theyear2020 also brought unexpected siveoffersoniPhoneSE2020andiPhone11
Ventures and Anand Ladsariya. mission (`1,490 crore), PowerGrid Vizag funds,pension funds and mutual funds. trulyglobal luxurybrand out of India.” changesintheIndiansmartphoneindustry and online expansion drove this growth.
● INTERVIEW: SESHAGIRI RAO MVS, joint MD & group CFO, JSW Steel
‘Next year will be far better; we will pick up demand that we lost last year’
JSW Steel posted a robust set of numbers in China.Apart of it is going towards building demand. Also, automobiles, white goods, becauseasthesteeldemandpickedupinthe whilewemaynotbe out of tunewith global
Q3FY21 backed by a strong recovery in steel infrastructurewhichrequiressteel.Also,the bearingandforgingindustry,pipingindus- domestic market, we focused more here, markets,wehaven’tincreasedthesteelbusi-
demand.SeshagiriRaoMVS,jointMDand centralbanksaroundtheglobearesupport- tries, drums and barrels and packaging changing our geographical mix.Also, the nessinIndiathewayithasgoneupglobally.
groupCFO,JSWSteel,toldShubhraTandon ing by way of pumping liquidity into the industries are doing well in India which is product mix has improved.We had 57% of
thatthefinancialyear2021-2022willbefar markets. As a result, in 2021, the steel leading to higher steel off-taking, and also our sales coming in from high-value grade What is the outlook on steel prices for
betterforthesteelindustryinIndiaandglob- demand is expected to go up by 4% which demandinruralIndia.Additionally,themin- steel.This is up from 50% seen in Q3FY20 the coming year?
ally as governments across the world roll out means71 mt ofincrementaldemand. ing sector is expected to do better than last and 51% in Q2FY21.The benefit of lower I do not see steel prices going up,but there
stimulus packages to boost the economy and year,which means demand forcommercial coalcostalsogavethebenefittous,andthen maynotbeabigcorrectiondownwards.The
infuseliquidityinthesystem.Editedexcerpts: What is the steel demand in China vehicleswillgoup.So,nextyearwouldbefar also the higher net sales realisation which reasons for that are few. The supplies are
looking like? better and we will pick up the demand that was a result of prices forauto sectorgetting expectedtogoupfromcountrieslikeJapan,
How is the aggregate demand for steel As far as China is concerned, it consumed we lost lastyear. reset in October. Korea, Russia, which was not the case in
globally and what is the outlook? 980 mt in 2020 against 908 mt in 2019,so 2020. So, there could be some pressure on
Steeldemandin2020fellby2.3%or42mil- it consumed 72 mt or 8% more of steel in Since JSWSteel’svolumeswere lower on Howare the current HRC and CRC prices thepricing.Also,inthelastfewdayspricesin
lion tonne (mt).The total demand has been 2020. This indicates it recovered much a year-on-year basis as well as sequen- in India and how much have they risen Chinahavecomedownbyabout$30which
1,725 mt in 2020,which was 1,767 mt in faster after the Covid-19 crisis.They could tially, the sharp improvement in rev- y-o-yandsequentially?Howdoesitcom- corroborates that the Chinese economy is
2019.As far as the rest of the world is con- raisetheproduction,therewas$550-billion enues this quarter can be attributed to pare with global prices? slowing down. However, from a cost per-
cerned,itconsumed114millionlesssteelin stimulus announced that led to a huge Indian steel consumption is expected to be higher prices? For us,on a blended basis priceswent up by spective,thecokingcoalpriceswentupfrom
2020,which is 13.3% lower against 2019. amount of recovery in the economy and 93mtattheendofFY21,whichis7%lower Therewerefourreasons.Oneisthatintegra- 20%sequentiallyand26%y-o-yinthelast $102to$135pertonne.IronoreinDecem-
India also contributed to this fall as steel steel demand. But China’s demand has thanlastyear,whereasinFY22itisexpected tionofironorehasgoneupfrom26%inthe quarter.Ifyouwere to compare India prices berwas$159,today,itis$168.So,costesca-
consumption in India stood at 65 mt in the started tapering from December. So, the togrowby10%,whichmeansanother9-10 previousquarterto49%,soironoresupplies withglobalprices,inApril-Decemberprices lations could push steel prices higher.Then
last 9 months of this financial year against kindofgrowthwhichwehaveseeninChina mt of incremental demand over93 mt tak- have gone up.In Q2 we suffered because of in China went up by 80% from $394 to thereisthefactorofdemand,whetheritwill
76 mt in the 9 monthsof FY20,with Covid- isunlikelyin2021.Thisiswhysteeldemand ingitto103-105mt.Ifwecross10%,wewill that.This also led to ourcapacityutilisation $710, in the US they were up 119% from remainrobustornot.Sofarindicationsareit
19hittingusinMarch.However,theoutlook in China is expected to remain flat and not close the next financialyearwith 110 mt of improving from 86% in Q2 to 91%, and $507 to $1112,in Europe 84% from $438 will remain strong,which will drive prices.
for2021 is positive because of the huge fis- go upover980 mt in the comingyear. steeldemand.Mostofthiswillbeledbygov- with that our fixed cost came down. Sec- to $807,whereas in India it went up from Also,we don’t see the US dollar becoming
cal stimulus by the governments across ernmentspendingoninfrastructurewhich ondly,ourexportsaleswere28%ofthesales `35,000to`53,000whichis51%.Theprice stronger shortly,so no downward pressure
Europe, the US, Japan, Korea, Russia and How is the steel demand in India? is driving almost 50-60% of incremental in Q2,while those have come down to 12% rise is much steeper in other countries. So, on commodityprices expected.
Pune
Pune
6 FINANCIAL EXPRESS
Opinion
WWW.FINANCIALEXPRESS.COM
FABRIC OF THE NATION
Congress leader Rahul Gandhi
THURSDAY, JANUARY 28, 2021
❝
You know the damage the PM is doing to the fabric of
the nation. For the first time, Chinese troops are
sitting inside Indian territory. Our economy, one the
best performing in the world, has collapsed
❝
Skating on RBI’S CALIBRATED MEASURES WILL LIKELY BE ABLE TO ADDRESS THE ISSUE OF AN INCREASE IN
● BANKING SECTOR
thinning ice DEMAND FOR FUNDS FROM BOTH THE GOVTAND THE PRIVATE SECTOR IN FY22
Managing QE rollback
Ice-loss has shot up over the past two decades; India faces a
double whammy of coastal inundation and drying glaciers
T the Indian way
HE SHRINKING OF the world’s ice is now following the worst-case climate
changescenariooutlinedbytheIntergovernmentalPanelonClimateChange.
A study by researchers at the University of Leeds has found that the world has
lost a whopping 28 trillion tonnes of ice between 1994 and 2017—for a per-
spective that is over 1.2 trillion tonnes of ice lost per year over a little more than two
O
decades,whiletheice-lossfigurewas800billiontonnestillthen.Thestudy,publishedin
thejournalTheCryosphere,isbasedonsatellitedata,on-sitedataandnumericalmodels, NE OF THE main chal- showed in the high daily reverse repo
andfindsthatthebulkofthelosscanbeattributedtoclimatechange.Onecorollaryfrom lenges of unwinding a window, led to rates coming down
thiswouldbethattheriseinice-volumesmeltingeveryyearsignalanaccelerationofcli-
matechangeduetoanthropogenicfactors.Withtimehavingalmostrunoutonanymean-
policythatentailsalarge
amount of money, for
MADAN sharply.The call rate is now in the 3.1-
3.2% range while ideally, it should be
ingful reversal of climate change,the focus now has to be to shift the planet to a lower-
warming trajectory than it is currently on. Given how ice-melts exacerbate climate
anycentralbank,istodo
this without causing disruptions to, or
SABNAVIS closer to the repo rate. However, the
lowerreverse repo of 3.35% has served
change—let alone the consequences of viruses and microflora that had been lying dor- ratherupheavalsin,themarket.Afterall, Chief Economist, CARE Ratings and author of as the benchmark for this market, and
mantintheiceformanymillenniagettingreleased,withpossiblepathogeniceffect—the asuddengushofmoneyintothesystem Hits & Misses: the Indian Banking Story byinduction,theT-bills yields too.
Views are personal
problem needs urgent attention if countries are to prepare formitigation of impact. can be hard to take out,and often,there RBI has given signals of drawing out
The problem of ice-melt is two-fold: loss of ice from land and loss of sea-ice.Thanks to areunintendedconsequences.Forexam- this surplus liquidity. The first move
rising airtemperatures as greenhouse gas (GHG) emissions rise,mountain glaciers,from ple, the QE measures of the Fed or ECB A sum of `6.27 lakh crore was anyproblemontheliquidityfrontdueto came with the announcement of the
those in the Alps to the Andes to the Himalayas,are shrinking.The study claims glaciers were meant to revive their economies, released into the system during the this surplus generated by the banking LTROs being reversed by banks,and out
have lost nearly 10 trillion tonnes of ice since the 1960s,with the melt having shot up but the money flowed to the emerging year, which is quite substantial. But systemcoupledwithRBImeasures.Con- ofthe`1.25lakhcroreoffundssupplied,
sharply in recent years—nearly 6 trillion tonnes have been lost since the 1990s.This is markets. This created different chal- there was an unintended conse- solidatedbankbalancesheetshowsthat, `1.23 lakh crore has been reversed by
deeplyworrying given ice on land constitutes just 1% of global ice,andyet accounts fora lenges as the central banks had to man- quence. This surplus tended to get during this period, investments banks at present.The next step was for
age capital flows as stock markets reinvested in the overnight reverse increasedby`7.34lakhcrore,andhence TLTROs,where around `37,000 crore
quarteroftheplanet’sice-losssincethe1990s.Withpopulationsacrosscontinentsdepen-
boomed.Any move to rollback caused repo operations,with the system being there was a surplus of `86,000 crore hasbeenreversed.Thesmallerquantum
dent on mountain glaciers for freshwater (many of India’s perennial rivers of the north
upheaval in the market,which came to in a surplus-liquiditystate all through after adjusting for credit and govern- underspecial liquidityforNBFCs is now
have theirorigins in Himalayan glaciers),this loss has been ratherstark overthe past few be known as taper tantrums, as it was this period. Ideally, the money should ment borrowing. fully reversed.Therefore,a large section
years and has generated concern amongst policymakers.Bear in mind,glaciers suffer a assumed that the QEwould last forever. have been used for lending purposes, Hence, RBI measures,while provid- of the funds that were induced into the
doublewhammyaswarmingoceansaremultiplyingtheice-lossfrommarine-terminat- RBIbroughtinQEofadifferentvari- as was the aim of such measures. ingcomforttothemarket,havenotmat- systemarebeingrolledback.TheCRRcut
ingglaciers,orglaciersthatendintheocean—warmcurrentsarecontributinga‘bottom- ety ever since the lockdown was On the commercial banking front, teredfromthepointofviewoftheavail- would get automatically reversed from
up’melting of glaciers.This feeds into a vicious circle,given melting glaciers pour more announced, but has gradually started too,therewasaverycomfortableliquid- abilityoffunds.Buttheydidworkwellto AprilonwardsunlessRBIchoosestokeep
waterintotheoceans,causingthesea-icetoshrinkfurther.Meltingsea-ice,inturn,exposes rolling back this liquidity.This has been ity position (defined as the difference lowertheinterestrates.Thiswasalsothe itatalowerlevel.Morerecently,thelong-
thedarkwaterunderneath,which,unlike icethatreflectsalotofthe heatit faces,absorbs remarkable as it has been done in an between incremental deposits and idea of RBI,which used cuts in the repo term auction of 15 days at the reverse-
this heat.Combinedlosses of ice have ledto a 1.3-inch risein sea levels. unobtrusive way and a calibrated man- credit).Over March-end 2020–January and reverse repo rate both, along with repo window witnessed `2 lakh crore
For India, the stakes from loss of global ice are high—melting mountain glaciers ner so as to not upset the applecart.But 1, 2021, bank deposits increased by flooding the system with liquidity, to being taken out, though it would flow
mean threatened freshwatersources in the large tracts of the country,which has a dev- the market for sure is guessing the next `11.59lakhcrore,whilebankcreditrose keep the interest rates low. As can be back once it matures.Hence,there does
astating impact on nearly everything, from food security (because of the impact on stepsofRBI,withtherebeingseveralsub- by`3.34 lakh crore.Therewas a distinct expected,with the government being a appear to be a plan to move away,albeit
agriculture) to health and hygiene.The other major threat is the impact of rising sea- jective interpretations of every new risk-aversiononthepartofbanksaswell moreaggressiveborrowerinthemarket, gradually and cautiously from the sur-
levels on India’s 7,500-km long coast that houses some of the country’s most impor- monetarymeasure. as a lower demand for credit, especially the lower interest rates came as a bless- plus liquiditysituation that is there.
tant cities,including financial capital Mumbai and the southern metropolis,Chennai; Thedefiningfeaturesoftheso-called for investment purposes, from corpo- ing. On aggregate borrowings of `12 There are two issues which would
Mumbai alone couldseesignificantparts inundated by2050,affectingmanymillions. QE,which came with a combination of rates; this gave banks a surplus of `8.2 lakh crore this year,the drop in interest be important when it comes to revers-
Astudypublished in Scientific Reports in 2020 projects the global population exposed instruments,areprovidedintheaccom- lakh crore.The government borrowing, ratesofaround80bpswouldhavesaved ing all these measures.The first is that
to inundation and episodic coastal flooding by 2100 at 300 million—indeed, nearly panying graphic; the QE had started by both the Centre and the states,was an interest cost of around `9,600 crore. any recovery in the economic
even before the pandemic had set in. muchhigherthisyear,butdidnotcreate The extent to which rates have moved prospects of the country will lead to
half of the area vulnerable to coastal flooding is vulnerable because of regional sea-
down can be seen in the accompanying demand forfunds,which has to be sat-
level rise—and the value of the global assets threatened by these episodes at $6-9 tril-
graphic, which also raises some ques- isfied. For Q4, there is an expectation
lion.Readwith the newUniversityof Leeds report,time is running out fornationswith Measure What it meant
tions at the two ends of the tenures. that growth will turn positive, and
significant coastal lengths to prepare for rising sea levels.While the ministry of Earth CRR cut `1.37 lakh crore released in the system Ascanbeseen,theyieldsatthelower there can be a turnaround in bank
sciences launched a multi-yearstudyin 2012-13 to assess the threat and develop spe- Repo rate Reduced from 5.15% to 4% i.e. 115 bps end of the maturityhave come down at credit from manufacturing and ser-
cific regional models,it is alreadytime that action to protect populations currentlyliv- Reverse repo Lowered from 4.90% to 3.35% which meant widening corridor a sharper rate than those at the higher vices. This will require backing from
ing on the coast and dependent on the sea for livelihoods is mounted. to 65 bps from 25 bps with repo to encourage banks to lend end.This can be attributed to two rea- the banking system.
OMOs Net `2.52 lakh crore induced since March with gross purchases of sons. First, the longer-term yields have The second is that the Budget will
`3.73 lakh crore & sales of `1.2 lakh crore (under operation twist) been relatively more stable, with the indicate the borrowing to be made next
Tech-ing diagnostics forward LTROs
TLTROs
Special liquidity for
`1.25 lakh crore induced
`1.13 lakh crore induced
`7,125 crore
decline being less than proportional to
the repo rate because of the high bor-
rowingprogrammeofthegovernment.
year and the rollover of this surplus liq-
uidity into FY22 will be useful if this
materialises. Hence, it does appear that
Connected, AI-driven wearables could mean greater access NBFC, HFCs Theprogrammehasbeenunderseveral RBI is going slow with the reversal
T
layersofpressure,startingwiththepan- process,andthecalibratedapproachwill
HE DIAGNOSTICS SPACE isseeingadecisiveshiftintermsoftheunderlying Interest Rate: Extent of movement (March end to January 2021) demic and followed by the GSTcontro- address the issue of an increase in
technology,towardsgreaterincorporationofdigital,artificialintelligenceand Repo rate
versywith the states that kept the mar- demand forfunds both towards the end
▼ 115 bps Above 1 year deposit rate ▼ 95 bps
ketguessingiftherewouldbeanexcess of March as well as next year when the
data analytics.There is also a push towardswearables and connected devices. Reverse repo ▼ 155 bps 364 days T-Bill ▼ 214 bps
supplyofpaper,whichdepressedprices requirements of both the government
All this is likely to drive up access—a wearable transmitting a person’s vital 10-years bond ▼ 80 bps 91 days T-Bill ▼ 208 bps
and pushed up yields. and private sector will increase.There
parameterstoadoctormanythousandsofkilometresawayinreal-time,adevicealready MCLR ▼ 85 bps Call rate ▼ 183 bps
The second reason is that the sur- may just be the need to persevere with
processing some of the readings and making a preliminaryreport forthe doctorto rat- plus liquidity in the system, which the existingmeasures.
ify,etc,arenottoohardtoimaginenow.While,atpresent,two-thirdsoftheworld’spop-
ulationdoesn’thaveaccesstodiagnosticcare,someofthetechnologiesanddevicesthat
havecomeupinthelastfewyearscancertainlyhelpbridgethisgap.InOctoberlastyear,
LETTERS TO
A steel frame for the Atmanirbhar vision
US-based Butterfly Network launched the second iteration of its portable ultrasound-
on-a-chip,which resembles a razor.The device can be connected to any smartphone to
generate and relay ultrasound images.While the previous iteration cleared by the FDA THE EDITOR
in 2017 could conduct 13 tests,the new one incorporates moreAI capabilities and can
perform17differentfunctions.Pricedat$2,000(`1.5lakh),thedeviceisavailablein20 The upcoming Budget must consider the role of the Chaos and its
countrieswithamonthlysubscriptionofaslowas$35(`2,800).By2023,thecompany steel industry in making India self-reliant, and must DILIP OOMMEN aftermath
hopes to launch a wearable that can allow diagnosis at home.
Butterfly’sdeviceisjustoneendofthespectrum.Apple,lastyear,launcheditswatchthat ease its working with targeted interventions CEO, ArcelorMittal Nippon Steel India
It is important not to let the
and president of ISA. Views are personal
could read blood-oxygen levels.Three years ago,the company got FDA approval for ECG unfortunate turn of events in Delhi
monitoring using its watch.Samsung,too,has been able to leverage its innovation for a on Republic Day get out of
watch that comes with blood pressure monitoring; the watch has been approved by the AS THE BACKBONE of the economy, Doing Business 2020’, India has Demandboosters:Inordertoboost perspective. Investigations will
SouthKoreandrugregulator.ApplehasalsosuccessfullygotapatentintheUSforwearable the steel sector continues to play a piv- ascended 17 positions to be ranked demand, the government should take reveal the truth about the chaotic
otal role in India’s journey towards the number 63 amongst 190 economies, into consideration various stimuli to incidents. It is axiomatic that
blood pressure measuring technology.The digital and devices bellwetherhas also tied up
ambitious target to achieve a $5 trillion besides being listed amongst other push big-ticket infrastructure projects violence is no answer to any
with top medical institutes to launch large-scale studies to see how wearables can con-
economygoalby2024.Despiteunprece- economies for notable improvements. with a focus on augmenting the com- problem whatsoever and can have
tribute to betterhealthoutcomes. dented challenges due to Covid-19 and We believe that structural reforms mercialroadandrailwaynetworkacross no place in a democracy, and must
While India does not have much to showin terms ofwearables,a few start-ups have subsequent lockdowns, the govern- can be rolled out for a single-window the country. be repudiated unequivocally. The
createdlow-cost,portabledevicesaddressingunmethealthcareneeds.Lastyear,mobile- ment’s vision of ramping up steelmak- clearance formega projects that invest The current Pradhan Mantri Awas overwhelming majority of
ventilator companyAgVa was in the news for coming up with a low-cost,portable ven- ing capacity to 300 million tonnes by more than `5,000 crore in the country. Yojana (housing for all) is already con- protesting farmers wanted to hold a
tilator system.InnAccelTechnologies has readied a device called Saans,a battery-pow- 2030 remains unaltered. These would not only spur growth in tributing in shoring up overall demand peaceful rally sporting the national
eredContinuousPositiveAirwayPressure(CPAP)systemthatcouldincreasethesurvival The industry too made a swift turn- the sector but also speed up develop- for steel, and we look forward to more flag and featuring tableaux and
rateofprematurebabieswhorequirerespirationsupport.Niramaihasdevelopedatech- aroundinspiteofstrongheadwindsdur- mental project timelines.We also urge investment in the scheme. It would be make it an exercise to win the
nologywhich can help detect breast cancer using thermal analytics.Janitri has simpli- ing this health crisis on the back of its the government to consider the fol- prudenttoprovidetaxincentivesforthe hearts of the people. But sadly, it
fied the cardiotocographyprocess,which involves a bulkymachine,using a patch and a inherent fundamentals and strong lowing keyfactors to improve business first time home or auto buyers in the was not to be due to the clashes
mobileapp;ithasmanagedtobringcostsdownbyover60%.However,inallsuchefforts, resilience.Infact,thelatestreportonthe sentimentandensureasmoothertran- upcoming budget. between some protesters allegedly
governmentsupportwillbekey.WhileCovid-19didforcegovernmentstoturntostart- steelindustrybyratingagencyICRAalso sition from business blueprints to on- Mining sector reforms: For the instigated by actor Deep Sidhu and
upsforexploringsolutions,thereisaneedtodeepenthepartnershipanddothisonarou- upgradeditsoutlookfortheIndiansteel ground manufacturing: alliedminingsector,weurgethegovern- the police. The prettiness of the
tinebasis.Agovernmentlookingatexpandinghealthcarecoveragemustlaydownways sector to‘stable’on the back of improv- ■ Environmental clearance ment to avoid retrospective amend- tractor parade and its impact on
for companies likeApple,Niramai to collaborate with hospitals. ing demand, prices, and normalising ■ Land acquisition ments to Mines and Minerals (Develop- the wider general public became
business environment. The domestic ■ Statutory clearances for construc- ment and Regulation) Act,which affect ‘what might have been’. Given the
steelsectorhasseenastrongrevivalfrom tion/right ofway bonafide and genuine lessees. conflicting versions of the events, it
WeighingRISKS
thesecondquarterof2020-21onwards, ■ Self-certification process Also,reviewof the current IO pricing is important to establish the the
aided by a combination of factors—a Besidesthese,itwouldbebeneficialif methodology is needed, as it leads to true facts of the matter. An attempt
strong retail demand emanating from a there are minimum retrospective excess taxation and spiralling of prices is now being made to discredit the
Against the Covid-19 backdrop,WEF ranks infectious diseases as thrivingruraleconomy,andgreenshoots amendmentstoexistingandnewlypro- The government should also consider farmer’s movement by citing the
ofrecoveryinwhitegoodsandtheauto- posed policy framework along with settingupanuppercaponrevenueshar- violations of rally restrictions. The
the world’s top risk; but the long-term risk is climate change mobile sector, especially from tractors, strategiccentralgovernmentincentives ingwiththeminelessees.NationalMin- FIRs filed against farmer union
T
passengervehicles and two-wheelers. formega investments in the country. eralIndextobebroughtinattheearliest. leaders are unlikely to weaken the
HEWORLD ECONOMICForum’sGlobalRisksReport2021listsinfectiousdis- Overall, the sector is well poised to Steel plants are one of the largest The most efficient way of transport- resolve to continue with the
contribute to the PM Narendra Modi’s strategic projects for any country and ingIronoreisthroughslurrypipelinesas protests. We cannot forget the fact
easesasthetopglobalrisk,displacingclimatechange.Quitepredictable,given
clarion call of making India self-reliant have a very strong multiplier effect on it causes the least impact on the envi- that more than a hundred farmers
theCovid-19pandemicanditsimpactontheglobaleconomyandsociety.The
or Atmanirbhar Bharat. Hence as an the state and national economy.Hence, ronment and local population, hence have lost their lives in the course of
pandemichas resultedina gapbetweentherichandthepoorwideningacross industry,wearelookingforwardtosome thegovernmentcanalsooffertaxincen- government should expedite these the protests. What happened in
the globe.The report notes that Covid-19 is an immediate threat for the world for the announcements in the Union Budget tives to any large project proponent approvals and clearances Delhi neither alters the fact that the
nexttwoyears.TheWHOestimatesthatthepandemichaltedimmunisationdrivesin68 2021byFMNirmalaSitharaman,bene- investing in this sector. Auctioning more iron ore mines and three new farm laws are inimical to
countries,putting80millionchildrenundertheageofonetheriskofvaccine-preventable fitting the sector. TaxesandGST:Fromataxationper- facilitating the opening up of virgin the interests of the farmers nor
diseases.Thereportalsomentions12newrisks—deterioratingmentalhealth,massyouth EaseofDoingBusiness:Singlewin- spective,we believe a reduction in per- mines will drive the seamless supply of does it diminish the legitimacy of
disillusionment,prolongedeconomicstagnation,systemiccollapseofimportantindus- dowclearanceformegaprojects(greater sonal income tax will help drive the steel forIndia’s growing consumption. the demand for their repeal. We
tries, social security systems and multilateral institutions, to name a few.With rising than 5,000crore): demand for white goods like refrigera- We are confident of the govern- have to acknowledge the fact that
unemployment,widening digital divides and youth disillusionment,the world’s youth Infrastructure development is one tors, washing machines, dishwashers, ment’s renewed ambitions and these laws will deny farmers
will be severelyaffected. of the key pillars of the PM’s vision of etc,whichdirectlywillpushthedemand strengthened commitment to intro- reasonable prices for their agri-
However, against the backdrop, it will be unwise to view climate change as a lesser Atmanirbhar Bharat and to deliver on forsteel and allied products. duce and implement sweeping produce and allow rapacious
threat.Giventheprogressmadeonvaccinesandtherapeuticsthatcanaidthefightagainst thatvision,itisimperativetomakepro- Moreover, the government should reforms reinforce its strong intentions corporate behemoths to make
thepandemic,Covid-19’simpactcanbemitigatedoverthelongterm.Withmeltingper- visionsanddriveinitiativesthatfurther considertheinclusionofelectricityduty, to build and grow a self-reliant India. hefty profits and have other far-
mafrost, increase in the geographic spread of tropical pathogens because of warming, boost the ease of doing business for naturalgas,androyaltypaymentsunder Therefore,we are looking forward to a reaching consequences.
infectiousdiseasesaregoingtobeabiggerthreatbecauseofclimatechange.Lossofliveli- local as well as global enterprises. It is theambitofGSTthatwillhaveapositive ‘Budget Like Never Before’, as assured — G David Milton, Maruthancode
hood,habitat,etc,will all become more pronounced.As the world battles the pandemic, encouraging to knowthat according to impact on manyindustries,and not just by the FM, that will not only be inclu-
it must not lose sight ofwhat threatens the planet’s future in the long term. the latest World Bank report of‘Ease of steel alone. sive but also truly transformative. ●Write to us at feletters@expressindia.com
R.N.I. Reg. No. MAHENG/2010/34809 Printed and published by Vaidehi Chintaman Thakar on behalf of The Indian Express Private Limited and printed at The Indian Express Private Limited Press, Survey No. 288, Plot 1 and 2, Raisoni Industrial Park, Village Maan, Taluka Mulshi, District Pune-411027 and published at The Indian Express Private Limited, Express House, Plot No. 1205/2/6, Shirole Road, Shivajinagar, Pune-411004. Phone: 67241000, Fax: 67241047.
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