Arun Jaitley admits economy slowed down to 7.1% in FY17

The Indian economy slowed down in 2016-17, with the gross domestic product declining drastically from 8 per cent in 2015-16 to 7.1 per cent the next year, government said on Friday.
Finance Minister Arun Jaitley said the slower economic growth reflected lower growth in the industry and the services sectors, due to a number of factors including structural, external, fiscal and monetary factors.

He said in the Lok Sabha that the lower rate of global economic growth in 2016, along with a reduction in gross fixed investment to GDP ratio, stressed balance sheets of the corporate sector, lower credit growth in industry sector were some of the reasons for the low growth rate in 2016-17.
"Slower growth in 2016-17 reflects lower growth in industry and services sector. Economic growth of a country depends on a number of factors including structural, external, fiscal and monetary factors," he said during Question Hour.
As per the latest estimates from Central Statistics Office, the growth rate of Gross Domestic Product (GDP) at constant prices was 7.5 per cent, 8.0 per cent and 7.1 per cent respectively in 2014-15, 2015-16 and 2016-17.
The growth in GDP at constant market prices was 5.7 per cent and 6.3 per cent in Quarter 1 (Q1) and Quarter 2 (Q2) of 2017-18 respectively.
Jaitley claimed that despite the slowdown, as per the IMF, India was the fastest growing major economy in 2016 and second fastest growing major economy in 2017 in the world.
He said the government has taken various initiatives to boost the growth of the economy, including a giving a fillip to manufacturing, concrete measures for transport and power sectors as well as other urban and rural infrastructure, comprehensive reforms in the foreign direct investment policy and special package for textile industry.
The minister said the government had also announced various measures in the 2017-18 budget to promote growth in which included a push to infrastructure development by giving infrastructure status to affordable housing, higher allocation to highway construction and focus on coastal connectivity.
"For highways development, the Bharatmala Pariyojana has been launched. The government has launched a phased programme for bank recapitalisation. This entails infusion of capital to the public sector banks, that is expected to encourage banks to enhance lending," he said.
Jaitley said the Insolvency and Bankruptcy Code was enacted to achieve insolvency resolution in a time bound manner.
He said the other growth promotion measures included lower income tax for companies with annual turnover up to Rs 50 crore, further measures to improve the ease of doing business, and a major push to the digital economy.
Jaitley said as per information available from Reserve Bank of India, the gross bank credit (outstanding) for agriculture and allied sectors was Rs 9923.87 billion as of 2016-17 as against Rs 8829.42 billion as on 2015-16.
"The introduction of the Goods and Services Tax (GST) has provided a significant opportunity to improve growth momentum by reducing barriers to trade, business and related economic activities," he added.

Year End Specials: Snafu at Infosys, Jio juggernaut, GM drives out and more

For India’s second-largest software exporter, 2017 was a testing year in terms of corporate governance. The first non-promoter CEO , Vishal Sikka, quit amid a welter of whistle-blower accusations involving irregularities in a deal to buy an Israeli firm, an over-generous pay package and underperformance, which pulled down the stock price. Sikka’s exit was followed by several board stalwarts who had backed him. Ranged against him was, principally, N R Narayana Murthy, the elder statesman among the seven co-founders, who had anointed the choice of Sikka back in 2014 and now accused him of cover-ups and worse. Sikka’s exit in August saw an interregnum during which co-founder Nandan Nilekani stepped in as non-executive chairman, and U B Pravin Rao, the COO, as interim CEO to steady the ship. By December, the company announced the appointment of Capgemini executive Salil S Parekh as CEO and managing director. Parekh will take charge in January 2018 at a time when the external environment for Indian IT companies is becoming more challenging than ever.
Chandra takes charge

Chandrasekaran Chandrasekaran

After the ructions of 2016 between Ratan Tata and Cyrus Mistry, Tata’s successor as chairman of Tata Sons, which controls the Rs 673,347-crore group, Natarajan Chandrasekaran, 54, became the first professional executive to be appointed to the post. The former chairman of blue chip TCS, Chandrasekaran formally took charge in February this year and approached with professional efficiency the group’s multiple legacy hotspots. In September, he negotiated the long-drawn deal to merge Tata Steel Europe, relic of the expensive 2007 Corus acquisition, with Germany’s thyssenkrupp AG. By October, he had rid the group of the loss-making Tata Teleservices, handing it virtually free to Sunil Mittal’s Airtel, and decided to phase-out the small car, the Nano. The affable marathon runner is also ensuring that expansions have a business case. “I have clearly stated the emphasis on returns and capital allocation, but that does not mean we will exit a business that does not meet our targets,” he said in a recent interview to Tata Review. In 2018, expect the Tata group to bid for Essar Steel, the Taj Mansingh hotel property in Delhi and for Air India.
General Motors drives out
General Motors General Motors

One of the earlier foreign car-makers to enter India after delicensing, Motown major General Motors announced in May that it would stop selling cars in the country, one of the world’s five largest markets, by the end of this year and focus instead on exports. To this end, it will retain its research facility in Bengaluru and consolidate its production line Talegaon, Maharashtra. Ahead of that, the company closed its plant in Halol, Gujarat, which is being sold to M G Motor India, a subsidiary of China-based SAIC Motor Corporation. GM cars were first sold under the Opel brand, and later Chevrolet. It never managed to make major inroads, however, and market share has dwindled to 1 per cent.
Tata bye bye to Nano
Nano, Tata Motors Nano

Nine years from its controversial beginnings and underwhelming performance, the car model that riveted world attention as the world’s cheapest car has all but exited the market. Rumours of its imminent demise did the rounds through most of 2017 and by the middle of the year dealers in most parts of the country had stopped accepting orders for the small car. Average daily production had dwindled to two a day, and by the festive month of October factory dispatches had dropped to 57 units. The Nano will be replaced by an electric car, for which a joint venture is in the works, but that will be called Neo, indicating a break with the past.
Son rises on Uber, Ola
Ola's Bhavish Aggarwal, Uber's Dara Khosrowshahi and Softbank's Masayoshi Son Ola’s Bhavish Aggarwal, Uber’s Dara Khosrowshahi and Softbank’s Masayoshi Son

Top cab aggregators, Ola and Uber, now an essential part of our lives, have been making news for fund-raising, business expansion, regulatory face-offs, surge pricing and suchlike. But two key developments in 2017 could change the competitive paradigm for the big rivals in India. In October, Bhavish Aggarwal-led Ola raised $2 billion from a clutch of investors including from Japan’s SoftBank led by Masayoshi Son, and China’s Tencent. In November, San Francisco-based Uber agreed to accept a $1 billion investment from SoftBank. Undaunted by the prospect of having a major investor in his company take a stake in his rival, Aggarwal went ahead and acquired food delivery major FoodPanda in an all-stock deal, committing to invest $200 million in the space. So ride-hailing apart, 2018 could also be all about UberEats vs Ola-FoodPanda.
Jio juggernaut
Mukesh Ambani, Reliance Jio Mukesh Ambani

Few companies changed the dynamics of the telecom industry quite so decisively as Mukesh Ambani’s Reliance Jio. Last year, its free soft launch roiled competitors enough to complain to the regulator, to little effect. This July, its formal launch extended the juggernaut by dropping data prices over 95 per cent and making voice calls free. In less than a year, India became the world’s largest data market, overtaking the long domination of US. The average consumer started using five times more data (1 gigabyte) than he did before. Total usage hit over 200 million GB a month. Jio not only grabbed 150 million subscribers from incumbent operators, it also forced many players like Telenor, Sistema and now RCom to call it a day. But by offering customers mobile services free and then charging them after a few months, it also caused its competitors to face serious financial problems, burgeoning debt and mega-consolidation, making Indian telecom a four-player market.
Free call
Bharti Airtel Bharti Airtel

In October, a single deal enabled Tata Sons Chairman N Chandrasekaran to rid the group of its unviable mobile telephony business and offered Bharati Enterprises’ Chairman Sunil Mittal a way to combat Reliance Jio’s deep-pockets by acquiring virtually free Tata Tele’s mobile business customers. This apparent win-win arrangement involves the merger of the consumer mobile businesses of Bharti Airtel with Tata Teleservices Ltd and Tata Teleservices Maharashtra Ltd on a “debt-free, cash-free” basis. At one stroke, this deal gives Bharti 40 million customers in 19 circles, plus access to scarce spectrum. Bharti has, however, agreed to take over a “small portion” of Tata’s unpaid liabilities for spectrum acquired in government auctions. This is a negligible price to pay to see market share go up to 41.5 per cent and revenues jump 10 per cent.
Wired for competition
Kumar Mangalam Birla (left), chairman of Aditya Birla Group, with Vittorio Colao, CEO of Vodafone Group. Photo: Reuters Aditya Birla group’s Kumar Mangalam Birla and Vodafone’s Vittorio Colao

In March, the country’s second- and third largest mobile service providers, Vodafone India and Idea Cellular, owned by the Aditya Birla Group, announced a merger to create what would have been India’s largest telecom operator with a 35 per cent market share (the deal preceded Bharti’s virtually free acquisition of Tata Teleservices). Vodafone will own 45.1 per cent of the merged company and the Aditya Birla group will own 26 per cent, after paying Rs 3,874-crore cash for a 4.9 per cent stake. With the competition regulator approving the deal in July, the stock market regulator in August, only the green signal from the National Company Law Tribunal is awaited. The merger is expected to be completed by early next year. 2018, then, will see the battle of the Big Three.
Flipkart, Snapdeal: Frenemy action
Flipkart's Kalyan Krishnamurthy and Snapdeal's Kunal Bahl Flipkart’s Kalyan Krishnamurthy and Snapdeal’s Kunal Bahl

The biggest merger in Indian e-commerce — between Flipkart and Snapdeal — was left undone after prolonged talks between stakeholders failed. While Snapdeal continues in sort of a miniature avatar, Flipkart strengthened its war-chest with $2.5 billion from SoftBank Vision Fund, a tech-focused venture fund . With that, Japan’s Softbank now holds a fifth of the Sachin Bansal and Binny Bansal-founded Bengaluru firm and is the biggest investor in the Indian internet space. Flipkart has dismissed “rumours” about the exit of Kalyan Krishnamurthy, a former Tiger Global executive, as CEO. But those are smaller issues for the e-commerce leader focused on fighting Amazon, which is ready to double its India investment any time.
From Russia, with funds
Essar group's Prashant Ruia Essar group’s Prashant Ruia

Ten months after it was announced in October 2016, Russia’s largest oil producer completed the buyout of the Indian assets of Essar Oil from the debt-laden Ruia-controlled Essar group. At $12.9 billion for 20-million- tonne refinery at Vadinar, Gujarat, a captive power plant, a port and 3,500 petrol pumps, this represents the largest foreign direct investment deal for India and the largest outbound investment for Russia. Rosneft now has a 49 per cent shareholding in Essar Oil and an investment consortium of Trafigura, a Singapore-based commodity trading major, and UCP, a Russia-focused asset management company, has acquired another 49 per cent. The sale helped the Essar group reduce its debt to Indian and foreign banks by almost 60 per cent.
Nissan drives to court
Ashok Leyland completes acquisition of LCV business from Nissan JV

Weeks after a vote of confidence from a 30-place jump up the World Bank’s Ease of Doing Business rankings, Japanese auto major Nissan announced that it would begin arbitration against India seeking $700 million for the non-payment of state incentives as part of a 2008 agreement to set up, in alliance with Renault, a manufacturing plant in Tamil Nadu. The arbitration has been filed under the terms of the Comprehensive Economic Partnership Agreement with Japan. The two auto majors had invested $946 million and the incentives were to kick in from 2015. A legal notice was sent to Prime Minister Narendra Modi last year, but Nissan had not received the payment despite multiple assurances, the company’s lawyers said. With the Nissan arbitration, India become the leading nation for the number of such cases (over 20) against it.

Year in Review: Top 5 most popular car launches of 2017

After a brief slowdown seen in the car market following the government’s move to demonetise high-value currency, the car market saw a smart recovery in the year 2017, even as the rollout of the goods and services tax (GST) in July left the sector with some temporary bittersweet memories in the first half of the year. The Indian automobile industry overall progressed well in 2017 and made some exciting launches and exquisite upgrades.
Business Standard takes a look at the most popular car launches of 2017:
Jeep Compass
Jeep CompassJeep Compass Photo: Official website The first SUV manufactured in India by the global auto major Jeep, the Compass is comes with two powertrain options – the 1.4-litre MultiAir Turbo Petrol for efficient performance, and, 2.0-litre MultiJet Turbo Diesel engine for a powerful driving experience. Launched with a price tag of Rs 14.95 lakh, this is one of the most exciting launches of 2017.
Maruti Suzuki Swift Dzire 2017
Dzire Dzire India’s most trusted compact sedan got a massive makeover in 2017, with a freshly sculpted headlamp, rounded front grill and flowing lines. The car saw one million of its units being sold in the first five months of launch. The new Swift Dzire is powered by a four-cylinder petrol or diesel engine paired to a five-speed manual or automatic gear box.
Honda WR-V
Photo: Official websiteHonda WR-V | Photo: Official website Honda re-entered India’s premium SUV car market with the launch of the WR-V in 2017. The car is powered by a 1.5-litre i-DTEC diesel unit that delivers 99hp and 200Nm of torque. It is mated to a 6-speed gear box. The petrol variant comes with a 1.2-litre i-VTEC that delivers 90hp and 110 Nm of torque, mated to a 5-speed manual transmission.
Tata Nexon
Tata Nexon Tata Nexon Tata Motors finally launched the Tata Nexon to enter into the fast-growing compact SUV segment. The Nexon comes with an optional 1.2-litre turbocharged Revotron petrol engine or 1.5-litre turbocharged Revotorq diesel engine. Both the engines are mated with a 6-speed manual transmission and offer three drive modes – eco, city, and sport.
Renault Captur
.Sumit Sawhney Country CEO & Managing Director Renault India with Rafael Treguer Vice-President of Sales and Marketing Renault India at the Launch of Renault Captur | Photo: Dalip Kumar Renault launched the much-anticipated Renault Captur in November this year in three petrol and four diesel variants. The Renault Captur comes to India with two engine options – the 1.5-litre H4K petrol engine that produces 104hp of power and 142nm torque and is mated with a 5-speed gearbox. The 1.5-litre K9K diesel engine, on the other hand, churns out 108hp of power and 240nm of torque coupled with a 6-speed transmission.

Ola, Uber train drivers to 'behave' this New Year's eve

For the next few days, drivers at cab-aggregator Ola, in the Delhi-NCR region, would periodically get a recorded message from the Gurgaon Police ‘advising’ them on how to behave
with riders. The same kind of messages would be relayed to drivers in other states as well.
“A recorded message from a senior police official would be sent to the drivers on how they need to behave with riders. Also they are sensitised on how they need to deal with

situations where the rider might be causing the problem,” a source said.
Uber is also organising classes for its drivers that includes showing short video messages teaching them on how to deal with drunk passengers, as well as women travelling alone.
“Safety is a two-way street, especially when two people are sharing a ride. And, while no means of transportation is 100 per cent free of accidents and incidents, we’re encouraging
our driver partners to help keep the roads safe for everyone,” an Uber spokesperson said.

15 dead, several injured in fire at roof-top pub in Mumbai's Kamala Mills

At least 15 people were killed and as many injured after a major fire in a building in Kamala Mills Compound in Lower Parel, an official said.
The fire broke out shortly after midnight on the third floor of the four-storeyed building on Senapati Bapat Marg, a commercial hub of the city, a civic official told PTI.
The injured were taken to the KEM, and Sion hospitals, the official from the BMC disaster management unit said.
Several fire tenders, water tankers, emergency ambulance and police personnel rushed to the spot for rescue operation, he said.
The building, in Central Mumbai, houses some commercial establishments including hotels.
According to the official, the cause of the fire remains to be ascertained.

MARKETS LIVE: Sensex up 200 points, Nifty above 10,500; TCS top gainer

Benchmark indices were trading higher on the last trading day of 2017 following the Asian markets, that were ending 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from taking away the punch bowl.
Back home, SEBI board met on thursday and paved the way for all stock exchanges to sell all products from October 2018, but it deferred its decision on disclosure of defaults by listed companies. It decided to relax entry norms for foreign portfolio investors (FPIs) willing to invest in the Indian markets.
Besides, SEBI would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform.

Amomg another major development, Mukesh Ambani’s Reliance Jio announced a deal on Thursday to acquire younger brother Anil Ambani-owned Reliance Communications’s (RCom’s) wireless infrastructure assets, including towers and spectrum, at an estimated price of Rs 20,000-24,000 crore. The historic deal between the brothers came on their father Dhirubhai Ambani’s 85th birth anniversary.
The two companies have signed binding agreements and the proceeds would be used to pre-pay RCom’s bank loans.

Hurdles Indian IT faced in 2017: Jobless growth, protectionism & automation

For decades, India's information technology (IT) services companies grew headcount year on year as they put more people on projects and charged for them from clients.
Reality struck in 2017 when rising automation and rapid decline in orders for traditional services forced them to revisit their people-to-project model. Staring at slow business for traditional services and not enough orders in newer digital services, Indian firms saw jobless growth for the first time in their history.
In the nine months to September, the top six IT services firms – Tata Consultancy Services (TCS), Cognizant Technology Solutions, Infosys, Wipro, HCL Technologies, and Tech Mahindra – combined saw a net addition of 19,175 people, nearly a fourth of what they added in the same period last year.

In addition, job cuts were seen across the industry as IT firms looked to shed flab as they faced pressure on projects after clients cut budgets and demanded more productivity at same costs. In turn, IT firms started embracing automation for lower-end jobs, eliminating the need to deploy people on such projects, and began rethinking their models.
ALSO READ: Year End Specials: How automation, Infosys spat disrupted India's IT sector

Digital services for most Indian companies is around 25 per cent and growing. However, these firms still have over three-fourths of revenue coming from traditional services, which is declining rapidly. For those who work on such projects, despite investments by Indian IT firms to retrain staff, the year ahead will be much more challenging.
The year also saw the unions becoming more aggressive and seeking better work atmosphere for technology workers.
The industry also faced its worst period in a decade due to growing protectionism in the US, its main market, UK, and Singapore, where governments began cracking on visas that Indian workers used to travel to these nations to work on projects. In the US, President Donald Trump, who came to power promising to reduce moving of IT jobs to countries such as India, started new restrictions in issuing visas that discriminated against India-based IT services companies and favoured local American technology firms such as Apple and Facebook.
ALSO READ: Trump's HR 170 Bill, higher visa fees may land Indian IT cos in trouble

To counter this, Indian firms began aggressively hiring fresh graduates from colleges in the US, looking to replicate the assembly line training model that they had built to grow the outsourcing industry. TCS now has over 30,000 local hires in the US, while Wipro says half of its team in the US are local Americans. Infosys plans to hire 10,000 people in the US.
However, the battle is only half won. Firms such as Infosys and TCS are fighting court cases from local US workers who have made allegations of discrimination. A hostile government just adds to the burden.
ALSO READ: TCS faces US trial for 'anti-American bias'

There have been spinoffs with this move too. Global firms who are looking for talent have stepped up the setting up of captive centres or are expanding their teams in India.
Back home, TCS and Infosys underwent top management changes.
While it was a smooth transition at TCS with former CEO N Chandrasekaran being elevated as chairman of Tata Sons and R Gopinathan taking charge as the new head, at Infosys, it was the opposite.
Infosys co-founder Nandan Nilekani was forced to return to the helm to salvage the firm's reputation and bring stability back in the aftermath of the face-off between the former Infosys board and its founder N R Narayana Murthy. R Seshasayee, who was the chairman, quit after a public spat with Murthy after Vishal Sikka resigned from the company. There were allegations of wrongdoing in the severance pay given to former CFO Rajiv Bansal two years ago. Despite independent probes that gave a clean chit to the former board and CEO, Murthy insisted that the report be made public.
After his return, Nilekani gave them a clean chit and declined to make the report public citing confidentiality. He also tasked the team on a global hunt for a new CEO. The team selected Salil Parekh, a former Capgemini executive, as the next boss who will take over on January 2.

Year-end rise in yields puts banks in the soup

With yields rising sharply, banks are caught between a rock and a hard place. And as the quarter for the banks ends on Friday, the treasury departments are hoping the yields scale back so that their losses, even nominal, can be minimised.
The yields on 10-year bonds have risen about 96 basis points since August even after a rate cut by the Reserve Bank of India (RBI) in that month.
From the start of this quarter, the yield movement so far has been about 73 basis points. One basis point is a hundredth of a percentage point.

What makes the situation miserable for banks is that the December quarter is also one in which banks must provide at least 50 per cent for stressed assets referred for bankruptcy proceedings, or accept haircuts through resolution.
The provisioning needed on account of this is about Rs 2 lakh crore, roughly the same amount the government has promised to be put in banks over three years.
The yield on the 10-year bond closed at 7.396 per cent, about 18 basis points higher than its previous close. This is the sharpest intra-day movement in yields since February 8, and triggered stop-losses in some banks.
Mid- and long-term debt mutual funds suffered heavy single-day losses on Thursday, with net asset values (NAVs) of some schemes losing as much 130 basis points in a single day. A Balasubramanian, CEO, Aditya Birla Sun Life Mutual Fund, said, “The increase in government borrowing created uncertainty in bond yields, pushing up the yield by 20 bps and resulting in the fall of bond prices. This is likely to gradually push up yields on other securities.” He sees some volatility in the short term.
Deepak Agarwal, debt fund manager, Kotak Mutual Fund, said that till the Budget presentation, the 10-year G-Sec yield would hover between 7.3 and 7.5 per cent. “Currently there is a perception that interest rates will not go up in the next six months. Unless that perception changes, there will be no impact on short term funds.”
The RBI will auction bonds worth Rs 15,000 crore on Friday. Much depends on how successful the auction would be. Bankers are hoping that there would be no “devolvement”, which is a term used for unsold bonds.
However, chances of that happening are slim. First of all, the view in the market is that the yields could rise to 7.50 per cent, or even 7.80 per cent, around the Budget before cooling. And therefore, the bids to be placed for the auction would ask for higher yields, which is lower prices offered for a bond unit.
Bond dealers say the yields the market would ask for in the present situation the RBI is unlikely to accept. Being the money manager of the government, it is also the RBI’s job to see that the government borrows cheap.
Nevertheless, the market would be keenly watching the cut-off set by the RBI because that would be a kind of signal as to what yield level the central bank sees is appropriate at this current juncture. That directly should cool yields by a few basis points.
“The RBI must spell out where the yields should be. The market will be looking for a signal on Friday,” said a foreign bank treasury head.
“Under the present circumstances, much of the movement in yields has happened already. Now if the RBI finds the levels okay, the yields will rise further,” said a treasurer. According to the bond dealer, there could be a technical correction of about 10 basis points after the auction results are out.
There is also an outside chance that the government would tell the banks it owns to have an understanding among themselves and bid at a low yield level. That will not only cool the yield levels, it would also save banks the pain at the end of the book closure. After all, nationalised banks are used all the time to intervene in the currency markets.
A tell-tale sign of that happening would be if the cut offs significantly vary from the market yields. However, chances of that happening too are low because irrespective of banks buying huge amounts of bonds for now, the yields will rise eventually. And considering the outlook for the yields, the very bonds bought in the auction would be sold as quickly as possible in the market to cut losses.
“That kind of rigging doesn’t happen these days. The market is huge and transparent. Besides, nobody wants to book losses just to make one quarter look good,” said a bond dealer.
One of the reasons for not taking too aggressive a position in bonds is that banks are sitting on huge amounts of bond holding. The central bank has reduced the statutory liquidity ratio (SLR – the share of deposits to be maintained in government bonds) to 19.5 per cent from the usual 24 per cent. The idea is to slowly replace the SLR with the liquidity coverage ratio (LCR), an international practice. But currently both are operational and therefore banks have to maintain extra bond holdings. Even then, in the absence of healthy credit growth, banks are sitting on an extra SLR of 8-10 per cent of their deposit base. Clearly, they are going slow on accumulating more bonds on their books and that is putting pressure on the yields.
But bankers also say these levels are value-buying ones as yields have moved too much in too short a period.
“Around 7.40 per cent should be the top for the yields for now, but it is not likely to come down in a hurry either,” said Jayesh Mehta, head of treasury, Bank of America Merrill Lynch.
Meanwhile, the recent rise in bond yields has not triggered a sudden shift from debt to equity in India's mutual fund sector from the investors' perspective. Debt investors continue to prefer debt schemes. However, fund managers said that funds which are balanced in nature (debt as well as equity) may have seen a slight tilt towards equity than debt instruments in their portfolio over the last few days. Going forward, they say fund managers would attempt to reduce duration in short-term and dynamic bond funds to 1.5 to 3 years to maximise gains given the upcoming slippages in the fiscal deficit.
Bond dealers largely blame communication from the government for the sharp yield movement. Even a month or two ago, top government officials maintained that they would honour the fiscal discipline set for themselves. Now with the short-term savings rate cut, chances of deficit financing through savings deposits also get hit. While the government has collected about Rs 1 lakh crore through small savings, how much of redemption would happen in the fourth quarter is not known. The net extra borrowing works out to about Rs 73,000 crore for this fiscal, including through treasury bills, which may push the fiscal deficit to a minimum of 3.5 per cent of gross domestic product, higher than the 3.24 per cent budgeted.
“Even if you take government’s argument that it is adjusting dated bonds with treasury yields, in a rising interest rate scenario nobody wants duration risk,” said a senior bond dealer with a primary dealer, explaining the sharp yield movement post government's borrowing plan.

Mega deal between Ambanis to help Reliance Jio take on Bharti Airtel

Reliance Jio is expected to intensify its fight with rival telco Bharti Airtel as the Mukesh Ambani-owned company buys out key assets from Anil Ambani’s Reliance Communications (RCom). In fact, with this acquisition, the Jio-Bharti battle will not just be limited to mobile telephony but will extend to the fibre to home space (FTTH) too.
While Jio is focused on disrupting the market next year once again with the launch of high-speed FTTH with its offer of broadband and TV as well, Bharti Airtel is also planning to aggressively expand this business, sources said. Bharti already has over 3 million fixed line cum broadband customers in 95 cities across India and offers IPTV (internet protocol TV). Its fibre is spread over 250,000 km across the country and internationally.
But by acquiring RCom’s fibre assets (about 178,000 km), Jio will have a much larger network, controlling more than 428,000 of inter and intra-city fibre across the country. This, sources in the know said, would enable Jio to launch its FTTH in over 30 cities across the country next year.
Jio has also mapped out a plan to address 100 million TV households across cities to ensure dense fibre penetration and last-mile connectivity.
Jio, which was virtually the sole tenant of RCom’s 43,000 towers already as part of a 10-year deal which it had signed earlier, now will become the sole owner of the assets. The deal will not only make Jio the second largest tower owner in the country with over 143,000 towers in its kitty (Jio already has 100,000 towers of its own), it will help the company deepen its 4G coverage and take on Bharti Airtel more effectively, another source pointed out. That may enable Jio to get closer to its target of acquiring another 100 million customers in the next 12 months, according to experts close to the company.
Winning the towers was crucial, say analysts, as Jio would not have liked the RCom tower business to be under the control of a competitor or an independent tower company which would have looked for other tenants. Jio’s strategy has been not to share towers with competitors from the very beginning. Analysts also point out that the company had put in smaller towers but their capacity with the onslaught of data usage is very limited. On a later date, Jio may even think of monetising the towers once its business has stabilized, according to analysts.
ALSO READ: Ambani dials Ambani: Jio to buy RCom's mobile biz assets for Rs 24,000 cr

On the other hand, Sunil Mittal’s Bharti Group, through Bharti Infratel and through their 42 per cent stake in Indus Towers, effectively has economic interest in over 90,000 towers. However, if there’s a restructuring of the business under which Indus Towers will merge with Bharti Infratel (with Infra buying out the stakes of Vodafone and Idea), Bharti will have over 170,000 towers under its belt. There are indications that Bharti could reduce its holding in Bharti Infratel to a minority stake as part of its monetization plan.
For Jio buying out the crucial 850 Mhz and 900 Mhz spectrum, which it got partly from MTS and partly through auction, makes sense because it expires only around 2033. That will give Jio stability and is crucial for taking the growing pressure of 4G data and expanding customer base, analysts say.
Analysts say that Jio has bought over 98 Mhz of spectrum in 1800 and 2100 MHz bands as well. In an auction, it would have cost the company over Rs 7,000 crore, they argue. However, it is not known what value they have imputed to this sale. They also point out that losing this spectrum to a rival like Airtel or Vodafone would have impacted Jio’s aggressive customer acquisition strategy and data push.

Firms to face action for WhatsApp leak of financial details: Sebi

In a stern warning to companies for leakage of key financial details, market regulator Sebi on Friday said all those responsible, including auditors, would face action and the rules would be strengthened if required.
Addressing a press conference after a board meeting, Sebi Chairman Ajay Tyagi said it is clear from the case involving the leakage of information on WhatsApp recently that the details got leaked from the companies themselves.

A day after Sebi asked Axis Bank to strengthen its systems and conduct an internal probe to fix responsibility as the initial investigation showed the leakage due to "inadequacy" of processes at the bank, Tyagi said there are more companies and necessary actions would follow.
He also said the regulator would amend and strengthen the insider trading norms if required.
To a question whether auditors were also insiders and privy to such information before they are made public, Tyagi said they would also face action if found guilty.
Axis Bank has to complete the inquiry within three months and file a report to Sebi within seven days thereafter, the regulator said, after it found that the company's results for the April-June 2017 quarter were "either identical or matched closely with the figures" that were in circulation on WhatsApp prior to an official announcement.
Sebi began a probe last month after a media report surfaced with respect to the circulation of UPSI in various private WhatsApp groups about certain companies, including Axis Bank, ahead of their official announcements.
The regulator also conducted search and seizure operations in this regard at various places, including on the premises of various market entities.
The directive to Axis Bank is the first order from Sebi in this case and several others may follow soon.
During the preliminary examination, it was observed that the messages circulated in WhatsApp groups almost matched the quarterly financial results of Axis Bank for the June quarter, which were published subsequently. The results were officially announced on July 25 at 1623 hours but the message was in circulation on July 25, 2017 since 0912 hours.
Late last night, Axis Bank said it will work with Sebi with regard to leakage of unpublished price sensitive information and take appropriate action.

Vikram Bakshi's CPRL outlets need to be closed immediately: McDonald's

The long-drawn battle between burger major McDonald’s and its partner for North and East India – Vikram Bakshi led Connaught Plaza Restaurants (CPRL) seems to be taking a new turn.
After being served with a termination notice earlier this year, Bakshi continued to operate outlets under CPRL’s fold. McDonald’s, on Thursday, alleged that quality of food served in these restaurants could not be guaranteed anymore, raising alarm over the safety of consumers.
On Thursday, in an emailed statement, McDonald’s India Private Limited (MIPL) said that since the termination of the franchise agreements, MIPL has not been able to verify if the unauthorised McDonald’s restaurants operated by CPRL in North and East India are complying with applicable McDonald’s standards, including those pertaining to supplies, operations and safety standards and quality required for McDonald’s products and that “these restaurants need to be closed immediately”.

MIPL had terminated the franchise licensing agreement in September that disallowed CPRL to use the McDonald’s brand name, logo and trademarks. In December, CPRL’s supply partner Radhakrishna Foodland stopped the supply of raw materials – forcing it to shut down 84 outlets in the eastern part of the country temporarily. However, on Wednesday, CPRL’s managing director Vikram Bakshi said that the firm is readying itself to re-open the outlets as it has found a strong group of logistics partners.
Hitting back at Bakshi’s move, on Thursday, McDonald’s further said, “Food quality and safety are affected by all facets of the supply chain, from raw material sourcing and production to manufacturing to restaurant handling and preparation. Transportation and storage are critical links in the process. The unknown distribution centre is not approved to supply within the McDonald’s System.”
CPRL's decision to operate the McDonald’s outlets despite being served by a termination notice may attract the court's wrath in the future, according to legal experts. Also, McDonald’s has now made a decision not to continue with Bakshi’s CPRL as a franchise partner in major markets.
In fact, MIPL is now in discussions with a handful of restaurant management companies in the country to replace CPRL. The burger major has said that reaching a final agreement with a new party may take months. However, given the trouble the company is now facing in North India, which is its largest market, it may come out with a decision next month, sources say.

TCS to 'vigorously defend' against US lawsuit on alleged anti-American bias

Tata Consultancy Services (TCS) on Thursday said it will "vigorously" defend its position at the trial in the US, where it faces allegations of discrimination in practices related to the termination of employees.
The lawsuit against TCS was filed in 2015 by an American worker, who had alleged that TCS favoured workers of South Asian origin in the US.

The District Court in California has denied class certification on the litigation against TCS alleging a pattern and practice of discrimination in hiring against people of non-South Asian origin.
It has, however, granted class certification in respect to allegations of discrimination in practices related to the termination of employees. This part of the litigation will move to the next phase of the trial.
"TCS will vigorously defend its position and expects a positive outcome," a TCS spokesperson said.
The spokesperson added that TCS is an equal opportunity employer operating in over 50 countries including the US.
"TCS counts amongst its employees, nationals from over 100 countries. There are no discriminatory practices in any part of the company and TCS is confident that it will be able to defend its position at the trial," the spokesperson said.

Sebi eases FPI norms; allows listing of security receipts by ARCs

Markets regulator Sebi today decided to relax entry norms for foreign portfolio investors (FPIs) willing to invest in the Indian markets.Markets regulator Sebi today decided to relax entry norms for foreign portfolio investors (FPIs) willing to invest in the Indian markets.
Besides, Sebi would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform.
This will enhance capital flows into the securitisation industry and particularly be helpful to deal with bank non- performing assets (NPAs), Sebi Chairman Ajay Tyagi told reporters here.
Security receipt, in market parlance, means a receipt or other security issued by a securitisation company or reconstruction company.
With regard to FPIs, the regulator's board in its meeting held here, decided to ease some rules, including expanding the eligible jurisdictions for registration by including countries with diplomatic tie-ups with India.
Besides, the regulator may rationalise "fit and proper" criteria for FPIs as well as simplify broad-based requirements for such investors.
The moves are aimed at easing direct registration for FPIs and avoiding participatory notes (P-notes).
According to the new proposal, more jurisdictions such as Canada would be able to access the market due to change in FPI Regulations.
Category I and II FPIs, which are essentially government and regulated entities, should not need any additional documentation and procedural requirements. However, Category III FPIs should continue to be subject to such requirements.
In a major revamp, Sebi in 2014 had released norms that had clubbed different categories of foreign investors into a new class called FPIs.
Under the regime, FPIs have been divided into three categories as per their risk profile and the KYC (know your client) requirements, while other registration procedures have been made simpler for them.
Further, rationale of broad-based criteria would be extended in other cases wherein the applicant funds have other institutional investors -- sovereign wealth fund, insurance/reinsurance companies, pension funds, Exchange Traded Funds (ETFs) as their underlying investors, Tyagi said.
Currently, an FPI is considered to be broad-based in case such overseas investor has a bank as an underlying investor.
Broad based fund means a fund, established outside India, which has at least 20 investors, with no investor holding more than 49 per cent of the shares or units of the fund.
In case broad based fund loses its status due to exit of some offshore global investors then it may not result in immediate loss of Category II status. Three months time should be given to such funds to regain such status.
The regulator may discontinue the requirements of seeking its prior approval in case of change in local custodian or designated depository participants (DDPs).
At the time of change of local custodian/DDP, the new DDP should be permitted to rely on the registration granted by previous DDP at the time of transition. The move is expected to avoid duplicate efforts and incremental documentation by the FPIs as well as the DDPs.
Further, private bank/merchant bank should invest on behalf of their clients provided details of beneficial owners are available and will be provided as and when required by regulators.
Besides, banks do not have any secrecy arrangement with investors and secrecy laws do not apply to the jurisdictions in which the bank is regulated for such relaxation.

Bourses to provide trading in stocks as well as commodities from Oct 2018

The Securities and Exchange Board of India (Sebi) on Thursday said starting October exchanges will be allowed to deal in both equities and commodities. The move will benefit the National Stock Exchange (NSE), BSE and Multi Commodity Exchange (MCX) who currently deal with either equities or commodities. The concept of universal exchanges was in the works since commodities regulator body Forward Markets Commission (FMC) was merged with Sebi in 2015. Earlier this year, Sebi allowed single intermediaries, such as brokers, to deal with both commodities and equities under a single license. Sebi said the steps needed for allowing universal license are being put in place and the amended Stock Exchange and Clearing Corporation (SECC) regulations would become effective from October 1.
Exchanges welcome Sebi’s decision stating they would venture into new segments. BSE, which currently offers trading in equities and currency derivatives, said it has “geared up itself for long” to provide new facilities. Shares of BSE gained 3%, while MCX declined 1% on Thursday, even though Sebi’s announcement came after market hours. Market players said the move will increase competition in the commodities trading space with the foray of stronger players such as NSE and BSE.
Addressing the media after the board meeting, Sebi chairman Ajay Tyagi said the regulator’s approval will be needed prior to launching trading in new segments.

Meanwhile, the Sebi board approved shareholding and governance norms for credit rating agencies (CRAs) and mutual funds (MFs)
The regulator has put a 10% cap on cross-shareholding and also curbs on board positions for both MFs and CRAs. In case of MFs, a sponsor would be allowed to hold above 10% in only one asset management company (AMC). The move will hit UTI MF, which has four sponsors including State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank. Each of them hold 18.5% stake in UTI MF and also own their MF subsidiaries. In the past, UTI MF has struggled to address its shareholding issue as each of the stakeholders being adamant on the dilution.
Tyagi said MFs will get one year to bring down their shareholding after Sebi notifies the new norms.
Experts said the shareholding cap in case of both CRAs and MFs is to avoid conflict of interest situations. In June, Crisil had bought 8.8% stake in rival Care Ratings. The acquisition had triggered talks of potential conflict and anti-competitive practice.
Sebi also increased the net worth criteria for CRAs from Rs 5 crore to Rs 25 crore. The regulator has also asked CRAs to segregate their activities other than rating, financial instruments into a separate legal entity to focus on core business.
Meanwhile, the Sebi board deferred decision on bank default disclosure norms. “There was a detailed discussion on the subject. It is a good concept but there are some implementation issues that need to be looked at,” Tyagi said.
In August, Sebi had mandated listed entities to disclose within 24 hours any kind of bank loan default.
Providing relaxations to companies with high promoter shareholdings, Sebi allowed two new routes for dilution. The regulator said companies can dilute up to two% by way of qualified institutional placements (QIPs) and block deals. The move will help new listed companies such as Avenue Supermarts, where promoter holding currently is more than the threshold limit of 75%. It will also benefit the state-owned entities which have to comply with the minimum public shareholding norms by August 2018. QIPs and block deals will offer “quick solution” said Sebi.
Sebi also relaxed the entry norms for foreign portfolio investors (FPIs). Tyagi said the easier norms were to offset the restrictions imposed on FPIs taking the participatory note (p-note) route.
Among other measures Sebi lowered the investment threshold for real estate investment trusts (REITs) ease to 50%. It also allowed trading in security receipts issued by asset reconstruction companies (ARCs). Sebi said it would soon float a new discussion paper on investment advisers which will propose measures to separate investment advice and distribution of investment products.
On the earnings leak matter, Tyagi said avoiding misuse of price-sensitive information is a critical issue that Sebi is dealing. Commenting on the order against Axis Bank, the Sebi chief said the regulator is conducting a separate inquiry into the leaks. Tyagi said there are more companies under investigation.
Vikram Limaye, managing director and chief executive officer, NSE said: “NSE will certainly get into commodities if the market regulator Sebi approves exchanges to get into all asset classes including equities and commodities.”

RCom shares extend rally on debt plan but unclear if all creditors on board

Reliance Communications Ltd's shares soared for a second straight day on Wednesday after the Indian wireless carrier detailed a plan to cut its hefty debt load but it was not immediately clear if all key creditors were on board.
RCom, as the company is known, announced on Tuesday a plan to slash its debt by Rs 39,000 crore ($6.08 billion) underpinned by the sale of some of its spectrum, tower, fibre and real estate assets for which the company said it has already received some non-binding offers.
Building on an earlier plan announced in October, RCom, which is backed by billionaire businessman Anil Ambani, said the new scheme would involve no write-offs by lenders or bondholders, nor conversion of debt to equity.
The announcement triggered a 32 per cent rally in its shares on Tuesday. On Wednesday, the shares soared a further 35 per cent. RCom's bond gains, though, were muted with the 6.5 per cent bonds due 2020 up only slightly on Wednesday at 38.5/39.5 cents on the dollar from the previous day.
RCom had a net debt of Rs 45,000 crore at the end of October, putting it among India's most indebted companies. Rising competition, including the entry of start-up Jio - backed by Anil Ambani's brother Mukesh - has trimmed margins in India's telecom sector to wafer-thin levels.
RCom had unveiled plans earlier this year to reduce debt but they came undone as asset sales failed to materialise. Pressure on the firm rose after it missed debt payments and some creditors such as China Development Bank (CDB) initiated insolvency proceedings.
Whether the new plan succeeds will depend on creditors and bondholders signing off on it. Foreign lenders have supported the plan, Ambani said on Tuesday, though he did not say whether CDB had backed the plan.
CDB did not immediately respond to a Reuters request for comment. China's ICBC and Exim Bank, both of whom are lenders to RCom, declined to comment on whether they are on board with the new RCom plan. Sources had told Reuters this month the two lenders were planning to support CDB in its insolvency petition.
Major domestic creditors of RCom were not immediately reachable for comment.
The Indian unit of Swedish telecom equipment maker Ericsson, which has filed an insolvency case to recover dues totalling Rs 1,155 crore ($180 million) from RCom and two of its units, has not been approached by RCom about its latest plan, a source close to the company said, adding it would not withdraw its case.
"RCom has not approached us. Unless we have something concrete on the table from RCom, we will not withdraw the petition," said the source, who did not want to be named as they are directly related to the matter and not authorised to speak to the media. The case is up for hearing on January 5.
An email sent to Ericsson on Tuesday did not elicit a response.

Govt to raise Rs 50,000 cr via G-secs; fiscal deficit target to be breached

The central government is set to borrow Rs 50,000 crore extra through long-term securities from the markets, over and above the budget estimate of Rs 5.80 lakh crore for fiscal year 2017-18. This means it will now breach its fiscal deficit target for the year of 3.2 per cent of gross domestic product. All other things being equal, fiscal deficit for the year could be 3.5 per cent of GDP.

A top government official confirmed that the Centre was set to borrow more, in the light of lower than expected revenue proceeds from the goods and service tax (GST) and non-tax revenue items like dividends from state-owned companies. An official statement from the finance ministry later confirmed that Rs 50,000 crore worth of additional government securities (G-Secs) would be issued in the January-March quarter.

Additionally, the issuance of short-term borrowings (Treasury Bills) would be reduced by about Rs 61,000 crore.

Any slippage this year means that the expected target for the next year, of 3 per cent of GDP, will not be adhered to, either. Finance Minister Arun Jaitley could use that extra spending room in what will be the Narendra Modi government’s last full Budget before the 2019 general elections.

Economic Affairs Secretary Subhash Garg had said in September that the Centre would re-assess its borrowing and fiscal targets in December. As of end-October, fiscal deficit was already at 96.1 per cent of the full-year target. For April-September fiscal deficit was at 6.3 per cent of GDP. The finance ministry has reined in spending over the past few months and will continue to do so after massive front-loading in the first half of the year due to advancing of the Budget.

On the revenue side, there are several concerns. There could be a tax revenue shortfall of Rs 20,000 crore due to a revision in GST rates, Bihar Deputy Chief Minister Sushil Modi said in the last GST Council meeting in Guwahati. However, central government officials maintain that was Sushil Modi’s views and any shortfall could be offset by greater compliance and an increase in demand. They say a clarity on the matter would emerge later.

Also, on the direct taxes front, as reported by Business Standard, the Central Board of Direct Taxes (CBDT) has pitched for lowering of direct tax targets by Rs 20,000 crore from the budget estimates due to a slowdown in economic growth.

Also, the Reserve Bank of India (RBI) has this year paid the Centre a surplus of Rs 30,600 crore. The Centre said it was expecting around Rs 43,000 crore. There is no certainty that the RBI would pay an extra amount or not. There is also a concern that state-run companies, having been told to spend more in capital expenditure, as well as buy back shares, might not be able to cough up the dividend expected of them.

The only silver lining, meanwhile, seems to be disinvestment, which could garner proceeds of above Rs 90,000 crore, compared with the budget estimate of Rs 72,500 crore.

WhatsApp leak case: Sebi orders Axis Bank to conduct internal probe

Securities and Exchange Board of India (Sebi) on Thursday pulled up Axis Bank for the alleged leak of its June quarter earnings on social media platform WhatsApp. The market regulator said its preliminary examination showed “the messages circulated on WhatsApp groups almost matched with the quarterly financial results of Axis Bank for June 2017, which were published subsequently".

Sebi has directed Axis Bank to initiate an internal probe into the leak and submit its finding to the regulator within three months. The regulator has said inquiry should determine the people who could be responsible for the leak. It has also asked the private sector lender to “strengthen its processes, systems, controls” to ensure that such leaks are not repeated.

Axis Bank spokesperson didn’t offer any comment immediately on the Sebi order.

Market observers said Sebi’s four-page order on Axis Bank will send a strong signal to the market when it comes to the handling of price sensitive information.
“It will send out a stern message to all wrongdoers who might involve in the leaking of such price sensitive information. Sebi has acted swiftly and proactively which is good enough sign of its seriousness towards such matters. We expect that company would do a fair job by appointing some experts to do the inquiry against the offenders as directed by the regulator,” said Amit Tandon, founder and managing director of Institutional Investor Advisory Services (IIAS), a proxy firm.

The issue of earnings leak on WhatsApp group was first reported in an investigative report by news agency Reuters. The report had named 12 companies whose earnings were circulated in advance. Some of the companies named in the report were Dr Reddy’s, Cipla, HDFC Bank, Tata Steel, Wipro and Bajaj Finance. The market regulator is said to be examining four more companies, besides Axis Bank.

G Mahalingam, Sebi's whole time member, in Wednesday’s order, highlighted that the financial metrics such as loan write-offs, net performing asset (NPAs), current account saving amount (CASA) closely for Axis Bank closely matched with the actual earnings figures.

“It was observed that the figures that were in circulation in WhatsApp groups about Axis Bank were either matching in totality or were close to the actual announcements,” said Mahalingam in the order.

Sebi had asked Axis Bank to submit information regarding the process and controls it follows for handling price-sensitive information. The lender told Sebi that it “has ensured adherence to the applicable laws and has adopted adequate process and controls to maintain confidentially”.

Explaining the timing of the earnings, Sebi said that the actual results of Axis Bank were announced at stock exchanges on July 25 at 16:23 hours. While the messages were in circulation same day since 9:12 am.

“Such resemblance of the information circulated in the WhatsApp groups prima facie indicates that the financial figures of the bank were in circulation prior to official announcement/publication by Axis Bank. The same could not have been possible without leakage of information from the persons, who were privy to the information relating to financials prior to its official announcement,” said Mahalingam, who was the executive director of Reserve Bank of India (RBI) prior to joining Sebi.

Sebi said it has not yet been able to ascertain the source or origin of the leak. But further said it can be prima facie attributable to the inadequacy of the processes, controls and systems at the bank.

Debt reduction plan: Why RCom, once No 2 telco, had to exit wireless biz

When the estranged Ambani brothers agreed to a family settlement on June 18 2005, Reliance Infocomm (later renamed Reliance Communications, or RCom), the telecom business of the Reliance Industries set up by their father Dhirubhai Ambani, went to the younger brother, Anil.
Twelve years and a few months later, RCom has decided to get out of wireless business, which gave it the bulk of its revenues, as well as pain.
Under a plan that will get it out of a structured debt restructuring (SDR) exercise, Anil Ambani will reduce the company’s debt by Rs 25,000 crore (from Rs 45,000 crore at present) through the sale of some of its key assets, including spectrum, tower and fibre. Besides, the company will also monetise its real estate business through a special-purpose vehicle to raise Rs 10,000 crore, and sell a minority stake in the truncated RCom to a strategic partner. The whole exercise with reduce the debt on RCom’s books to only Rs 6,000 crore.
But getting out of SDR will come at a price. For one, it will draw the curtains on a significant chapter in India’s telecom history.
For many years, RCom had been seen as the second-largest player in the mobile telecom market – next only to Sunil Mittal-led Bharti Airtel – and ready to become one of the big boys in the business.
So, what went awry for the Anil Ambani company? The immediate cause, incidentally – and ironically – has been elder brother Mukesh Ambani’s aggressive telecom foray with Reliance Jio, a company now in the race to buy some of RCom’s key assets. Jio’s disruptive strategy – free voice services and data at throwaway rates, apart from offering all services free for six months – triggered a consolidation in the telecom sector. Not many had expected this to happen so soon; most players thought they would have enough time to restructure and spring back in the game.
From Tata Telservices, Sistema and Telenor to RCom, all took serious blows as users rushed to avail of Jio’s lucrative 4G services. RCom saw its subscriber market share plunging from a respectable 9.54 per cent in June 2016 (before Jio’s market entry) to 5.20 per cent in October 2017. Its revenue market share, which was under six per cent in the second quarter of 2016-17, slid to less than four per cent by the first quarter of 2017-18.
With the writing clearly on the wall, RCom in October 2017 announced it would close down its 2G and 3G services. In just one month, the company lost over 10 million customers. Simultaneously, rivals Jio, Airtel, Idea-Vodafone (which had announced a merger earlier) and BSNL together gained over 13.5 million subscribers.
The impact of the Jio onslaught on RCom was quite serious – while its debt burgeoned to over Rs 41,000 crore, interest payouts swelled, and the company’s losses went past Rs 2,390 crore in 2016-17. This got worse, as the company registered a loss of Rs 2,821 crore in the September 2017 quarter, amid lenders’ deadline to restructure debt or face proceedings at the National Company Law Tribunal (NCLT).
Before things got worse for it, RCom had pegged its survival hopes on a three-way merger – first with Shyam Sistema (which took place) and then with Aircel. The exercise was expected to substantially reduce its debt and give the merged entity a fair chance as the fourth-largest player with a reasonable market share. However, the proposed deal fell through, leaving the company with asset sale as the only option.
The fate that the Anil Ambani company has seen in the recent times seems to belie its past. With a market share of over 17 per cent, RCom had been on a roll as the clear number two in 2010. It had launched GSM services two year earlier. When Anil Ambani had got the telecom company as part of the family settlement, it was primarily a CDMA player dealing in a technology slowly losing traction. A shift to the GSM technology, along with attractive tariffs 60 per cent lower than competition, was rolled out across India in record 12 months. The company’s ambition was to have 100 million users very soon.
Its approach with 3G services had been equally aggressive – the company had shelled out over Rs 5,800 crore to buy 3G spectrum in 13 circles, including the lucrative but expensive Delhi and Mumbai circles.
But competition was also becoming fiercer, with the number of players doubling from seven to 14 as the erstwhile communications minister A Raja issued new licences in 2008. In 2012, RCom lost the number two slot to Vodafone, and what followed was a slow downturn. The company slipped to number four within two years as Idea Cellular went ahead, and further down in 2016 when RCom’s market share shrank to less than 10 per cent – both Aircel and BSNL had now overtaken it. By the time Jio entered the market, RCom was already at the lower end of the heap.
Analysts cite the company’s huge debt as a key reason. The debt burden nearly doubled over the past eight years – from around Rs 25,000 crore in 2009-10 to Rs 45,000 crore, according to CLSA estimates. That debt pile would have been okay if the company was also rolling in commensurate revenues and income. But its net-to-Ebitda ratio, which signifies the loan-paying capacity, nearly doubled in the same period.
Also, despite its customer base increasing, the overall revenues of the company did not really grow in sync (from Rs 20,000 crore to Rs 22,000 crore between 2011-12 and 2016-17) which meant the company’s average revenue per user (Arpu) was not growing despite 3G services.
The problem, according to analysts, is also that RCom was able to put very little fresh capital expenditure into the business in the past three years. This was at a time when the big boys were pumping in Rs 15,000 or more annually to increase their coverage and to get LTE 4G-ready for taking on Jio. RCom was hamstrung by the fact that lenders were worried it might have no choice but to keep costs on a close leash.
Some argue that much of RCom’s debt problem might have been resolved and it would have got some breathing space to fight a battle if it had not delayed its monetisation programme. But there is also a view that there was an obvious need for more towers as players moved to increase coverage with 4G and then the upcoming 5G in 2020 – the more you held on to, the better price you would get. No one, some analysts explain, knew that Jio would change the market so quickly. They also point out that RCom did get into deals with Jio – like the Rs 12,000-crore 10-year one for towers and leasing out its domestic inter-city fibre network; these brought it some cash.
However, those viewing a delayed monetisation as an error of judgement say that if RCom had merged its direct-to-home business with Sun TV in 2013, in a deal that it was reportedly close to, it would have retained a 26 per cent stake, valued at Rs 1,500 crore. Anil Ambani this year sold off the business and got no cash, with the buyer taking only its debt. Two years earlier, the company was also in talks with private equity fund TPG and Tillman to sell its tower and fibre assets for over Rs 30,000 crore. That is more than what it is expecting to get from sale of spectrum, tower and fibre assets today.

Sebi may ask companies to inform bourses as soon as loan default occurs

Markets regulator Sebi is considering to revisit its directive on 'loan default disclosure', which will make it mandatory for listed companies to inform stock exchanges about such issues as soon as they occur.
Besides, the markets watchdog is expected to apprise its board about its probe into circulation of unpublished price sensitive information about various listed companies through WhatsApp messages and other private social media groups.

These issues would be discussed during the board meeting of the Securities and Exchange Board of India (Sebi) this week, senior officials said.
The board will also consider whether the insider trading norms need to be tweaked to tackle such information leaks, they added.
Sebi has already launched a probe after reports recently indicated that price sensitive information relating to major companies listed in Indian stock exchanges were being circulated in WhatsApp groups, prior to the public announcement of quarterly results.
Circulation of unpublished price sensitive information and trading based on such information in the securities market is prohibited under the Sebi Insider Trading Regulations.
Last week, the regulator had conducted searches at premises of more than 30 market analysts and dealers and seized documents, computers, mobiles and laptops. This is one of the biggest operations since Sebi got the search and seizure powers.
The markets watchdog is looking to frame a new plan for listed companies to disclose loan defaults to exchanges as soon as they occur, officials said.
Earlier, Sebi had put off implementation of its directive "until further notice" that required listed firms to inform exchanges if they default on loan payments to banks and financial institutions, just a day before it was supposed to be implemented on October 1.
Sebi Chief Ajay Tyagi had said the directive was put on hold after banks had asked for more time as the Indian credit market was different from its Western counterparts where such a disclosure is mandatory.
In August, the regulator had directed listed companies to disclose from October 1 any payment defaults to banks and financial institutions within one working day of such a miss.
The move came against the backdrop of the government and the Reserve Bank of India stepping up efforts to tackle the menace of bad loans amounting to over Rs 8 lakh crore.

FinMin asks PSBs to close loss making domestic and international branches

The finance ministry has asked public sector banks to look at rationalising their domestic and overseas branches as part of the reform process to strengthen their financials.
The banks have been advised to pursue closure of loss making domestic and international branches as part of capital saving exercise, official sources said.

There is no point in running loss making branches and putting burden on the balance sheet, so banks should look at not only big savings but also small savings like these for improving overall efficiency, sources said.
Many banks, including State Bank of India (SBI) and Punjab National Bank (PNB), have already taken initiative.
Besides, Indian Overseas Bank has rationalised the number of regional offices in the country by reducing 10 regional offices from existing 59 with an objective of optimum utilisation of resources and reduction in administrative costs.
With regard to overseas branches, the ministry has asked the lenders to discuss consolidation and take a final call on closing some unviable operations.
The ministry is of the view that there is no need of multiple banks in a single country, sources said, adding that banks can explore a single subsidiary formed with five-six banks coming together for conserving capital and realising economy of scale.
Besides the subsidiary model, public sector banks are also looking to close down branches or selling off subsidiaries to focus on markets that give them maximum returns.
As part of the rationalisation strategy, PNB is exploring possibility of selling a stake in its UK subsidiary PNB International.
Bank of Baroda and SBI are also examining the issue of consolidation. Bank of Baroda has presence across 24 countries through 107 branches/offices. It has 59 branches in 15 countries, while 47 branches operate through Bank's 8 Overseas subsidiaries.
The country's largest lender SBI has 195 foreign offices spread across 36 countries.

IOC, BPCL keen to acquire GAIL to become fully integrated energy firms

Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) are both keen to acquire gas utility GAIL India Ltd to become fully integrated energy companies.
IOC and BPCL have separately indicated to the petroleum ministry their interest in taking over GAIL to help add natural gas transportation and marketing business to their kitty, official sources said.

GAIL, on the other hand, feels a merger with oil and gas producer ONGC would be more appropriate.
The merger options were indicated following Finance Minister Arun Jaitley's announcement in the 2017-18 Budget speech on the government's plan to create integrated public sector oil majors that will be "able to match the performance of international and domestic private sector oil and gas companies".
ONGC, India's largest oil and gas producer, proposed to acquire oil refiner and fuel marketing company HPCL, which was approved by the Cabinet. Oil and Natural Gas Corp (ONGC) is currently in the process of acquiring the government's 51.11 per cent stake in HPCL, which at current prices is worth over Rs 33,000 crore.
Sources said IOC and BPCL gave separate options for the integration.
The government's 54.89 per cent stake in GAIL is currently worth about Rs 46,700 crore.
Integration options suggested by other companies would be taken up only after ONGC-HPCL merger is complete, they said.
IOC, the largest oil refiner and fuel marketing company in the country, wanted to either acquire another refiner to add to its capacity or a gas company like GAIL.
The firm feels it already has a fledging gas business in under-construction LNG terminals, city gas distribution projects and gas marketing. GAIL, the nation's biggest gas transporter and marketing company, would complement that, it felt.
BPCL on the other hand too has natural gas ambitions and wrote to the oil ministry saying GAIL was its number one choice for acquisition. It listed Oil India Ltd (OIL), the nation's second largest exploration firm, as its number two choice.
The government holds 66.13 per cent stake in OIL, which at current market price is worth about Rs 18,000 crore.
GAIL feels merger with ONGC makes more sense as such a move would integrate gas producer with transportation and marketing network.
Sources said the government has not taken any decision on the proposals sent by other PSUs.
The government is keen on the PSU-PSU merger or integration options as it would help it cash out on its holding yet retain its control.
Also, it would help build bigger oil companies to better compete with global giants and withstand oil price volatility.

Individual insolvency regime to be operational in phased manner

Steering the "smooth and fast- paced" journey of the insolvency law, the IBBI is now looking to put in place the regime for individual insolvency in a phased manner, according to its Chairperson M S Sahoo.
Around 500 corporates have been admitted for resolution and about 100 companies have commenced voluntary liquidation under the Insolvency and Bankruptcy Code (IBC), which is a little over a year old.

As it enters 2018, individual insolvency regime and facilitation of corporate insolvency transactions are among the main priorities for the Insolvency and Bankruptcy Board of India (IBBI).
"We are looking forward to implementing a regime for individual insolvency in a phased manner. In the first phase, we would implement the insolvency regime in respect of individuals who are guarantors to corporates undergoing resolution process," Sahoo said.
This would be followed by the regime for individuals who are doing business -- proprietorship or partnership firms.
While emphasising that the journey of the IBC has been "smooth, fast-paced and focused," Sahoo said all the constituents under this Code are on the same page and that regulations are being amended to meet the emerging exigencies.
"A very tentative estimate of the total underlying default amount which formed the basis for initiation of resolution of about 500 corporate debtors is about Rs 1.3 lakh crore," the chairperson told PTI in an interview.
He also made it clear that this figure is neither the total default nor total claim related to these 500 companies.
The IBBI came up in October 2016 and the first corporate debtor was admitted for resolution in January this year. A case is taken up for resolution only after approval from the National Company Law Tribunal (NCLT).
A significant number of lenders have initiated insolvency proceedings against various companies with regard to stressed assets while proceedings have also been started against realty firms and others.
Another priority for the IBBI is to facilitate corporate insolvency transactions.
"Many resolution and liquidation transactions will mature in the next few months and those may throw up some lessons and deficiencies in the regulatory framework. We would address them expeditiously," Sahoo noted.
According to him, the NCLT, the NCLAT (National Company Law Appellate Tribunal) and the judiciary are at the forefront of the insolvency law reform.
"They have settled several contentious issues expeditiously and delivered many landmark orders, bringing in clarity as what is permissible and what is not, and streamlining the process for future," he said.
When it comes to the institutional infrastructure, there are 12 benches of the NCLT, the IBBI, three Insolvency Professional Agencies (IPAs), 1,300 Insolvency Professionals (IPs), 50 Insolvency Professional Entities (IPEs) and 1 Information Utility.
"We would focus on building capacity of IPs and keep a close watch on their conduct. We would facilitate operationalisation of Information Utilities so that authentic information is available to the adjudicating authority and insolvency professionals to complete the transactions expeditiously," Sahoo said.
Asserting that the environment is conducive for the Code, the IBBI chairman said there is a helping hand from everywhere, including the RBI, SEBI and the government.
"SEBI has exempted resolution plans from the requirement of public offer under the Takeover Code, preferential allotment from pricing norms, etc.
"RBI has allowed information utilities and Insolvency Professionals (IPs) to access the information from credit information companies. It has recently advised all its regulated financial creditors to immediately put in place appropriate systems and procedures to ensure compliance with the provisions of the Code and regulations," he said.
Further, he noted that the government has clarified that no approval of shareholders is required for any action to be taken for implementation of an approved resolution plan.

Modi to make maiden appearance at Davos; SRK, over 100 Indian CEOs may join

Prime Minister Narendra Modi is likely to make his debut at the World Economic Forum's annual jamboree of the global elite in the snow-laden Swiss resort town of Davos next month, where he is also expected to address a special plenary session.
While the final list of participants would be released next month itself for the five-day Davos Annual Meeting of Geneva-based WEF beginning January 22, 2018, sources familiar with the programme said Indian presence will be really big this time with over 100 CEOs including Mukesh Ambani, Chanda Kochhar and Uday Kotak, as also Bollywood superstar Shahrukh Khan and top filmmaker Karan Johar expected to participate. Modi is expected to be accompanied by some union ministers and top government officials, while a large India Inc delegation led by apex industry chamber CII will also be present at the meet, whose theme will be 'Creating a Shared Future in a Fractured World'.
The ministers whose names are being considered include Finance Minister Arun Jaitley, Commerce and Industry Minister Suresh Prabhu, Railways Minister Piyush Goyal, Transport Minister Nitin Gadkari and Oil Minister Dharmendra Pradhan.
NITI Aayog CEO Amitabh Kant and DIPP Secretary Ramesh Abhishek are also expected to be present.
Other big names from India and abroad include former RBI Governor Raghuram Rajan and IMF chief Christine Lagarde.
Sources said Modi is expected to be there on January 23- 24 and may address the first special plenary of the biggest congregation of top global leaders including over 40 heads of state and government. He may hold a number of bilaterals besides other meetings.
Modi will be the first Indian Prime Minister at the Davos summit since 1997 when the then Prime Minister H D Deve Gowda had attended.
This is one of the few global summits yet to be attended by Modi.
To be attended by over 3,000 global leaders including CEOs, heads of state and government, artists and civil society members, the Davos Annual Meeting of WEF will conclude on January 26.
Indian social entrepreneur and activist Chetna Sinha will be among seven all-women co-chairs for the event.
This will be the first time in WEF's nearly five-decade- old history that its Davos Annual Meeting would have all women co-chairs.
Sinha will be joined by IMF's Christine Lagarde, Norway Prime Minister Erna Solberg, IBM chief Ginni Rometty, ITUC General Secretary Sharan Burrow, CERN Director-General Fabiola Gianotti and ENGIE CEO Isabelle Kocher.
The WEF, which describes itself as an international organisation for public-private cooperation and was established in 1971 as a not-for-profit foundation, hosts its annual meeting in Davos every year in January.
In a statement last month announcing its co-chairs for the 2018 meeting, the WEF said that over 3,000 leaders, representing 100 countries, will gather in a collaborative effort to shape the global, regional and industry agendas, with a commitment to improve the state of the world.
Sinha has been a social entrepreneur, a microfinance banker, an economist, a farmer and an activist.
Since 1986, she has been working with marginalised communities and is founder and president of Mann Deshi Mahila Bank and Mann Deshi Foundation.
The WEF, which has been criticised in the past in some quarters for relatively lower presence of women, said these co-chairs represent both the public and private sectors, international organisations, organised labour, academia and science as well as civil society and social entrepreneurship.
The Forum has said the programme of the 2018 Annual Meeting will explore the root causes of, and pragmatic solutions for, the manifold political, economic and social fractures facing global society today.
"Creating a shared future in a fractured world requires addressing issues on the global agenda in a holistic, interconnected and future-oriented way," WEF's Founder and Executive Chairman Klaus Schwab said.
Art and culture will also figure prominently this time with 40 cultural leaders expected in the Swiss Alpine town of Davos, including filmmakers Feras Fayyad (Syria) and Wanuri Kahiu (Kenya), science-fiction author Hao Jingfang (China), artists Mehdi Ghadyanloo (Iran) and Trevor Paglen (US), and navigator Nainoa Thompson (Hawaii, US).
Also joining are long-time members of the Forum's Cultural Leaders community, including photographer Platon (US), choreographer Jin Xing (China), and musicians will.i.am and Yo-Yo Ma (US).
The registered Indian participants also include CII Director General Chandrajit Banerjee, as also Gautam Adani, Swami Agnivesh, Rahul Bajaj, Sanjiv Bajaj, N Chandrasekaran, Sajjan Jindal, Anand Mahindra, Lakshmi Mittal and son Aditya, Sunil Mittal and son Kavin, Nandan Nilekani, Indra Nooyi, Azim Premji, Ajay Piramal, Ajay Singh, Naresh Goyal and Tulsi Tanti.
Mukesh Ambani is expected to be accompanied by wife Nita as also children Akash and Isha.

Russia election: Opponent Navalny clears first hurdle to run against Putin

ssian opposition leader Alexei Navalny cleared the first hurdle on Sunday towards taking part in next year’s presidential election, even though the central election commission has previously ruled him ineligible to run.
Navalny, 41, is a fierce opponent of President Vladimir Putin, who is widely expected to win re-election in March, extending his 17 years in power.
On Sunday Navalny, a veteran campaigner against corruption among Russia’s elite, won the initial support of 742 people at a gathering in a district of Moscow, above the minimum 500 required to initiate a presidential bid.

“There is no large-scale support for Putin and his rule in this country,” Navalny told the gathering, describing himself as a “real candidate” for the election and threatening a boycott of the vote by his supporters if he is barred from running.
But Navalny now needs to be officially registered as a candidate by Russia’s central election commission, which has previously said he is ineligible due to a suspended prison sentence that he says was politically motivated.
Navalny has been jailed three times this year on charges of repeatedly organising public meetings and rallies in violation of existing laws. He says the Kremlin is deliberately trying to thwart his political ambitions.
The European Court of Human Rights ruled in October that Navalny’s conviction for fraud in 2014 was “arbitrary” and ordered Moscow to pay him compensation.
On Saturday Russia’s ruling party United Russia pledged “all possible support” to the 65-year-old Putin in his bid to win a further six years in power in the March election.
Also on Saturday the Russian Communist Party named its presidential candidate, Pavel Grudinin, 57. The party came second after United Russia in the 2016 parliamentary elections.
On Sunday Russian property developer Sergei Polonsky, who has been convicted of defrauding investors, also secured enough initial backing to seek clearance from the election commission to take part in the presidential race.
Others planning to run include television personality Ksenia Sobchak, whose late father was Putin’s boss in the early 1990s, journalist Ekaterina Gordon.

Jai Ram Thakur to be 14th Himachal CM; swearing in on December 27

Five-time MLA Jai Ram Thakur will be the 14th chief minister of Himachal Pradesh and will be sworn-in on December 27 at a star-studded ceremony attended by Prime Minister Narendra Modi and BJP chief Amit Shah among others.
The 52-year-old Thakur leader edged past party stalwarts in the race to the top office and will be the first leader from the politically-significant Mandi region to helm the hill state.
Thanking the party leadership and workers after his election Thakur said that swearing in ceremony would take place on December 27.
Union minister Narendra Singh Tomar, who along with Defence minister Nirmala Sitharaman was appointed as a central observer by the BJP, announced that Thakur was chosen to be the next chief minister as thousands of party workers began celebrating.
The Seraj MLA, a throughbred RSS man, emerged as the frontrunner for the top post after the shock defeat of BJP's chief ministerial face Prem Kumar Dhumal in the state Assembly polls, the results of which were announced last week.
A former chief minister, Dhumal, was still in the reckoning for the chief minister's post till last night, when he opted out. Union minister J P Nadda was another top contender.
Thakur, a former state unit chief and rural development and panchayati raj minister in a government headed by Dhumal, was elected the leader of the BJP legislature party today.
The decision was taken at a meeting of BJP MLAs.
His name was proposed by senior leaders Suresh Bhardwaj and Mahender Singh and seconded by others.
"It is expected that Thakur will take oath as the state's next CM on December 27 at a ceremony where Prime Minister Modi, BJP chief Amit Shah and a galaxy of top leaders would be present," a source said.
Thakur along with senior party leaders handed a letter staking his claim to form the government in Himachal Pradesh to Governor Acharya Devvrat who invited him to do so.
The five time MLA will be the first chief minister from Mandi, the second largest district of the state. Himachal's chief ministers and political leaders mostly belong to or hailed from Shimla, Kangra and Sirmour districts.
Mandi has 10 Assembly seats, second only to Kangra's 15.
In this election, the BJP put up a stellar show in Mandi, winning 9 of the district's 10 seats.
Seen largely as a low-profile man, Thakur is from a farming family of Mandi. He did his post-graduation from Panjab University in Chandigarh and decided to join politics when he was in his 20s.
Thakur contested on a BJP ticket in the 1993 Assembly polls. He lost, but went on to win in 1998 from the now delimited constituency of Chachiot (Seraj) and every Assembly election after that.
A soft-spoken man, Thakur's strength is that he is seen as a leader who has managed to straddle the party's warring factions in the state.
A lack of consensus among the newly elected MLAs had resulted in the two central observers -- Union ministers Sitharaman and Tomar -- returning to Delhi from Shimla yesterday to hold fresh consultation with the BJP central leadership.
Earlier, the two-member team of central observers, which was in the state on December 21 and 22, had taken feedback from members of the state BJP's core committee, MPs and some MLAs.
The BJP ousted the Congress from power by winning 44 out of the 68 seats in the Assembly polls.

R K Nagar bypoll: Dhinakaran wins, says 'AIADMK govt will fall in 3 months'

Sidelined AIADMK leader T.T.V.Dhinakaran on Sunday won the Radhakrishnan Nagar (R.K.Nagar) assembly constituency here, trouncing his nearest AIADMK rival E.Madhusudhanan by a margin of 40,707 votes.
Contesting as an Independent candidate, Dhinakaran got 89,013 votes as against Madhusudhanan's 48,306 votes. The DMKs' N.Marudhu Ganesh came a poor third securing 24,681 votes.
Supporters of Dhinakaran celebrated the victory by dancing, distributing sweets and bursting crackers.
From the start, Dhinakaran was in the lead and the gap between him and the rivals kept on widening as the counting progressed.
Earlier in the day, Dhinakaran, speaking to reporters at the Madurai airport, predicted that the government headed by Chief Minister K. Palaniswami will fall in three months time.
He said the people in R.K. Nagar have reflected the views of the Tamil Nadu's populace.
While 2,373 voters have voted for 'none of the above' (NOTA) option, BJP candidate K.Nagarajan has got 1,417 votes and Naam Tamizhar party's Kalaikotudhayam got 3,860 votes.
The R.K. Nagar constituency fell vacant after the death of its sitting member, late Tamil Nadu Chief Minister J.Jayalalithaa on December 5, 2016.
The by-poll was held on December 21 and around 1.77 lakh voters exercised their democratic right.
Ironically the defeat of AIADMK's 'Two Leaves' symbol by Dinakaran's "Pressure Cooker" came on the 30th death anniversary of party founder and late Chief Minister M.G. Ramachandran.
Speaking to reporters here after his victory, Dhinakaran said though he was an Independent candidate, AIADMK's party cadres were with him.
Barring Dhinakaran and Madhusudhanan, the remaining 57 candidates forfeited their poll deposit failing to secure one-sixth of the total votes polled.
Dhinakaran is also the first Independent legislator since 2001 win of M.Appavu from Radhapuram constituency.
The by-poll is considered an acid test for the ruling AIADMK, as it underwent a split and then a patch-up, with Deputy Chief Minister O. Panneerselvam going out of the party and then rejoining it.
In the meantime, Dhinakaran, who was the party's Deputy General Secretary, and his jailed aunt V.K.Sasikala were sidelined forcing the former to contest as an Independent.
Meanwhile, leaders of several parties have termed Dhinakaran's victory as the victory of cash play.
DMK leader M.K. Stalin, in a statement, said the party's defeat in the by-poll is actually a Himalayan defeat for the Election Commission, claiming it or police did not do anything to ensure that the poll was held in a free and fair manner.
He said the Election Commission remained silent when voters were bribed even when the polling was under progress.

Tax defaulters can't hide from I-T notices anymore. Here's why

The government has amended rules and empowered the taxman to use banking, insurance and municipal corporation's database to obtain address of a 'hiding' or an 'untraceable' income tax defaulter for issuance of notices or summonses to them and extract due taxes.The government has amended rules and empowered the taxman to use banking, insurance and municipal corporation's database to obtain address of a 'hiding' or an 'untraceable' income tax defaulter for issuance of notices or summonses to them and extract due taxes.
Till now, tax authorities could only issue notice to a defaulting or erring taxpayer as per the address provided by them in their PAN (Permanent Account Number), the ITR (income tax return) or any tax-related communication.
This address database was not helping I-T authorities as they say the assessee either genuinely changed their address and did not notify them or cleverly went into hiding to evade due taxes.
A senior tax official said an amendment in I-T rules was recently notified after obtaining sanction from the Union Finance Ministry and it allows the taxman to obtain and use the address of an assessee available with the "banking company or cooperative bank, India post, insurance company, the returns of agricultural income and the statement of financial transactions (SFT)."
This also includes address of the assessee (individual or company) present in the "records of the government" and that available in the database of the "local authority", the officer quoting the amendment notification of December 20.
The database of the government means all databases where a taxpayer is registered, like a driving license or voter ID, and the local authority means the municipal body or a similar department.
The tweaking in the rules has been carried out by the CBDT (Central Board of Direct Taxes), the policy-making body for the Income Tax Department.
PTI has accessed the notification issued by the CBDT.
The amendment was necessary as the I-T Department, in a number of cases where taxes worth crores of rupees are stuck, was either not able to "trace" the assessee as they have changed their address and not notified tax authorities or had simply gone hiding or absconding with an intent to evade tax, the official said.
Now, he said, with this new empowerment, the taxman has got multiple options to find an "untraceable" or hiding assessee.
So, if someone has changed address from what was provided in the PAN or ITR, the taxman would still reach them.
The aim is to ensure that due government revenue is not usurped and defaulters are caught, penalised and prosecuted, he said.

New UN sanctions an act of war, US will face the wrath: North Korea

The latest UN sanctions against North Korea are an act of war and tantamount to a complete economic blockade against it, North Korea’s foreign ministry said on Sunday, threatening to punish those who supported the measure.
The UN Security Council unanimously imposed new sanctions on North Korea on Friday for its recent intercontinental ballistic missile test, seeking to limit its access to refined petroleum products and crude oil and its earnings from workers abroad.
The UN resolution seeks to ban nearly 90 per cent of refined petroleum exports to North Korea by capping them at 500,000 barrels a year and, in a last-minute change, demands the repatriation of North Koreans working abroad within 24 months, instead of 12 months as first proposed.

The US-drafted resolution also caps crude oil supplies to North Korea at 4 million barrels a year and commits the Council to further reductions if it were to conduct another nuclear test or launch another ICBM.
In a statement carried by the official KCNA news agency, North Korea’s foreign ministry said the United States was terrified by its nuclear force and was getting “more and more frenzied in the moves to impose the harshest-ever sanctions and pressure on our country”.
The new resolution was tantamount to a complete economic blockade of North Korea, the ministry said.
“We define this ‘sanctions resolution’ rigged up by the US and its followers as a grave infringement upon the sovereignty of our Republic, as an act of war violating peace and stability in the Korean peninsula and the region and categorically reject the ‘resolution’,” it said.
“There is no more fatal blunder than the miscalculation that the US and its followers could check by already worn-out ‘sanctions’ the victorious advance of our people who have brilliantly accomplished the great historic cause of completing the state nuclear force”, the ministry said.
North Korean leader Kim Jong Un on November 29 declared the nuclear force complete after the test of North Korea’s largest-ever ICBM test, which the country said puts all of the United States within range.
Kim told a meeting of members of the ruling Workers’ Party on Friday that the country “successfully realized the historic cause of completing the state nuclear force” despite “short supply in everything and manifold difficulties and ordeals owing to the despicable anti-DPRK moves of the enemies”.
North Korea’s official name is the Democratic People’s Republic of Korea (DPRK).
South Korea’s foreign ministry told Reuters it is aware of the North Korean statement on the new sanctions, again highlighting its position that they are a “grave warning by the international community that the region has no option but to immediately cease reckless provocations, and take the path of dialogue for denuclearization and peace”.
‘BALANCE OF FORCE’
The North Korean foreign ministry said its nuclear weapons were a self-defensive deterrence not in contradiction of international law.
“We will further consolidate our self-defensive nuclear deterrence aimed at fundamentally eradicating the US nuclear threats, blackmail and hostile moves by establishing the practical balance of force with the US,” it said.
“The US should not forget even a second the entity of the DPRK which rapidly emerged as a strategic state capable of posing a substantial nuclear threat to the US mainland,” it added.
North Korea said those who voted for the sanctions would face its wrath.
“Those countries that raised their hands in favour of this ‘sanctions resolution’ shall be held completely responsible for all the consequences to be caused by the ‘resolution’ and we will make sure for ever and ever that they pay heavy price for what they have done.”
The North’s old allies China and Russia both supported the latest UN sanctions.
Tension has been rising over North Korea’s nuclear and missile programmes, which it pursues in defiance of years of UN Security Council resolutions, with the bellicose rhetoric coming from both Pyongyang and the White House.
In November, North Korea demanded a halt to what it called “brutal sanctions”, saying a round imposed after its sixth and most powerful nuclear test on September 3 constituted genocide.
US diplomats have made clear they are seeking a diplomatic solution but proposed the new, tougher sanctions resolution to ratchet up pressure on North Korea’s leader.