Going cheap: How ONGC compares to the world's most richly valued oil firms

State-owned Oil and Natural Gas Corporation (ONGC) is now the cheapest oil and gas company globally. Earlier this week, the company’s stock price fell below Rs 100 for the first time in 15 years. Currently, ONGC trades at 4.2 times its estimated one-year forward earnings. Most global oil and gas majors command a price-to-earnings (P/E) ratio of more than 15. Exxon Mobil and Saudi Arabian Oil Company (Saudi Aramco) have a P/E of 18.3 times and 17.3 times, respectively. While ONGC has always traded at a discount to its global peers, it has widened to record levels in recent months.
Going cheap: How ONGC compares to the world's most richly valued oil firms
“Among the global upstream peer group, it is the cheapest stock. ONGC historically has traded at a discount versus global peer group, but over the past 12 months, the discount has widened materially, and in our view, the ‘on-tap’ government selldown is the key reason,” JP Morgan analysts Pinakin Parekh and Sanket Parab write in a note.

The brokerage has a buy rating on the stock, albeit it has cut the price target from Rs 190 to Rs 172 due to a cut in earnings estimates amid weak global oil prices. JP Morgan says the stock offers attractive yields of about 8 per cent. It has identified a few other triggers for ONGC to do well.

Changes in CCI norms proposed to bring buyer cartels under competition law

Buyers forming a cartel may be penalised if the changes proposed by the Ministry of CorporateAffairs (MCA) to the Competition Act are enacted.
The ministry sought to give monetary and penal powers to the director general for investigation under the Competition Commission of India (CCI).

The MCA has put the draft Competition (Amendment) Bill, 2020, in the public domain incorporating these elements, seeking feedback from all stakeholders. Comments on the Bill can be given by March 6, before which Parliament would reconvene after the recess.
Rahul Goel, partner, IndusLaw, said buyer cartels were not covered under the Competition Act and hence the proposed changes would give clarity to this aspect.
So far, the CCI has not imposed any penalty on buyer cartels, he said.
The draft amendments also seek to empower the director general for investigation to send a person to prison for up to six months or impose a fine of Rs 1 crore if the latter refuses to produce any book, paper, or document the former has asked for. Currently, the CCI imposes penalties on companies on the basis of their turnover if they flout competition rules. When it comes to directors of companies or proprietorship firms, penalties are imposed on the basis of their income. However, the law does not have any provision to empower the CCI to impose penalties on the income of individuals.
Changes in CCI norms proposed to bring buyer cartels under competition law
To remove the lacunae, the MCA suggested the Bill has a provision of income, on which penalty could be imposed under Section 27 of the Competition Act.
“Including the word ‘income’ in the Act may provide a legal basis to the CCI to impose penalties on individuals,” Goel said.
However, the amendment does not take into consideration the concept of “relevant turnover” as decided by the Supreme Court in the Excel Crop Care matter in 2017.
As such, penalties may still continue to be an issue of discretion and debate, Goel said. The draft amendments also call for introducing a “commitment and settlement” clause in the Competition Act. The enabling clause will allow those found in contravention of the competition law to “commit” to correct their ways to avoid action even before investigation is completed. Even in cases where investigation is over, evidence has been found, and the adjudicating process has started, the companies can still enter a settlement. The companies will have to pay a certain amount as fine and avoid legal proceedings after ensuring that any anti-competitive practice will be corrected.The proposed amendments also seek to provide clarity to “hub and spoke cartels”. The MCA suggested hubs also be covered under Section 3(3), which deals with cartels that hinder competition.
A hub-and-spoke cartel is basically an arrangement between companies where a dominant player, called hub, is wooed by other firms, called spoke, to destroy competition by, say, increasing or lowering prices.
Goel said hub-and-spoke agreements were not specifically covered under the Competition Act.
The CCI has imposed penalties by independently invoking Section 3(1) of the Competition Act.
“However, the CCI’s powers to invoke Section 3(1) independently are pending adjudication before the Supreme Court,” he said.
The proposed amendments also seek to expand the composition of the CCI by including part-time members in the Commission. The Commission is currently a four-member body, including the chairman.

Make in India push has made trade talks more difficult: US officials

Trumpadministration officials on Friday acknowledged that U.S. President Donald Trump's visit to India next week will not result in even a limited trade deal, saying they still have major concerns over India's trade barriers.
Hopes that the world's two largest democracies could negotiate a "confidence building" deal in time for Trump's arrival Monday on a two-day visit have faded in recent days as differences over agriculture, medical devices, digital trade and proposed new tariffs fester, according to business groups.

U.S. concerns that led last year to the suspension of India's tariff free access for some $5.6 billion in exports under the 1970s-era Generalized System of Preferences still remain, a senior Trump administration official told reporters on a conference call.
"We do want to make sure that we get this balance right. We want to address a lot of concerns and we're not quite there yet," the official said, adding that Trump will likely discuss these concerns with Indian Prime Minister Narendra Modi.
Trade talks will continue, but new Indian tariff proposals aimed at strengthening the country's "Make in India" domestic manufacturing push have made them more difficult, the official said.
Apart from growing protectionism, the Trump visit comes against the backdrop of India's multibillion-dollar purchase of a Russian missile shield system, which added friction to its ties with Washington.
India in its Feb. 1 budget proposal announced new import tariffs on medical devices, walnuts, toys, electronics and other products in a move aimed at reducing imports from China but affecting many U.S. firms.
The new tariffs surprised U.S. negotiators, especially as they were working with Indian counterparts to reduce the impact of India's price controls on U.S. medical devices such as cardiac stents and knee implants.
"We will be discussing those concerns and what we see an increase in barriers not a decrease. This will certainly come up among the leaders," the U.S. official said.
The official did not completely rule out any trade related announcements during the trip, but said this was "really wholly dependent on what the Indians are prepared to do."
U.S. Trade Representative Robert Lighthizer, who has been leading the trade discussions, will not be among the U.S. delegation accompanying Trump, the official said. Earlier this month, Lighthizer cancelled a trip to India to work out a package, even as India made some new proposals to improve U.S. dairy and poultry access.
U.S. Commerce Secretary Wilbur Ross is joining the trip, which will include announcements of commercial transactions in the energy and defence sectors, the officials said.
The United States is India's second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its 9th largest trading partner in goods.

Zerodha looks to enter Rs 27-trillion MF industry, applies for licence

The country’s largest broking house ZerodhaZerodhais looking to enter the Rs 27-trillion mutual fund (MF) industry, with the firm putting in its application for MF license with the Securities and Exchange Board of India (Sebi).
“We want to create a platform that can offer differentiated products. We are most likely to be passive fund-focused asset manager. Within passives, we want to build a suite of innovative products, keeping in mind the interests of investors,” said Nithin Kamath, founder and chief executive officer of Zerodha. “These products could even take the form of quant-based funds,” Kamath added.

Zerodha already runs an MF distribution platform Coin, which offers direct plans to users.
Kamath says that running Coin has helped his team understand investor behaviour and the kind of products that are suitable for investors.
Passive funds have been gaining investor traction in recent months, with actively-managed funds facing challenges in outperforming benchmarks.
In 2019, half of the actively-managed equity schemes had underperformed returns delivered by their benchmarks.
The overall assets managed by index funds have also seen a steady growth in current financial year. From Rs 5,286 crore of assets managed beginning of the financial year, the asset base has expanded by 50 per cent, close to Rs 8,000 crore in January 2020.
zerodhaFurther, market participants say that Sebi’s move to enable a regulatory sandbox can attract more fintech companies looking to build a differentiated product basket.
“While we need to see final details of how the sandbox framework will work, but we could tap it if it allows to fast-track the launch of new products,” Kamath said.
Zerodha applied for the MF license on February 5, 2020. Other players — whose applications are still under process — include Srei Infrastructure Finance and Frontline Capital Services.
More recently, Sebi gave in-principle approval for MF license to broking player Samco Securities and NJ India. The latter is country’s largest MF distributor in terms of commission received. With active clients of over 900,000, Zerodha is the largest broking house in the country.
The capital markets regulator has in the past underlined the need for encouraging competition in the 44-player MF industry.
Currently, MF industry is dominated by top-three fund managers — HDFC MF, ICICI MF and SBI MF —which account for 40 percentage of industry assets.
Meanwhile, industry experts had said that given the high levels of under-penetration, there is a huge scope for growth in the mutual fund industry.
India’s MF penetration is significantly lower to world average of 55 per cent. For India, the assets under management to GDP
stands at 11 per cent.
Industry body Association of Mutual Funds in India (Amfi) in its vision document says that the country’s MF industry has the potential to reach Rs 100 trillion of assets in next ten years. This would entail over three-fold jump from current industry size.
Further, industry participants also say that entering the mutual fund business can help a broking player diversify its business model to mitigate the cyclicality of broking income, which is linked to market sentiments.

ETF flows show signs of revival in emerging markets, but India an outlier

India saw pull-outs from emerging market (EM) exchange-traded funds (ETFs) over the past week, despite flows in such ETFshaving shown signs of revival. The ETFs withdrew $31.3 million for the week ended February 14. China, on the other hand, saw inflows of $37.3 million. Most of the EMs saw positive flows, with Indonesia the only other to see some outflow ($5 million) during the week.
According to foreign fund managers, receding worries regarding a major global outbreak of Coronavirus led to improved sentiment. "Rising COVID-19 fears, notably around Chinese growth, led to the first cut in a survey of fund manager about global growth, profits, and inflation expectations, held since October 2019,” BofA Securities said in its fund manager survey note.

The survey pointed out that allocation to EM equities rose 3 percentage points to 36 per cent overweight (OW), the highest OW status since March 2019. Overall, EM ETFs saw flows of $265.8 million during the week. In previous weeks, they had seen outflows.

Best of BS Opinion: Rocky road for highways, India's census, and more

Policies to halt the economic slowdown are contingent on recognising the problem first, former prime minister ManmohanSingh said on Wednesday. By that yardstick, there’s little hope. The Budget contained no hint of the S-word and the looming crisis in the telecom industry over paying adjusted gross revenue dues is unlikely to help, nor will growing tax terrorism, the slowing momentum in road construction nor even the anticipated dislocation caused by the impending National Population Register exercise. All these topics have been discussed on the opinion page today. Kanika Datta sums up the views.
The tax department is now sending notices to directors of private limited companies, holding them liable for pending dues and demanding payment in 10-15 days.
The consequences of that old, old problem of scrambling to meet unrealistic tax targets rears its head again and, more than anything else, vitiates the investment climate, says the top edit here
The second edit discusses the mounting financing problems that are causing the road construction programme – one of the undoubted achievements of the Modi government’s first term – to lose momentum. Read here
Aakar Patel explains here how the National Population Register enumeration exercise is likely to hit data collection for the all important decadal census exercise.
Plans to list government bonds in global debt benchmarks is arguably India’s best bet to attract the relatively passive and sticky part of global capital. But opening up a limited number of ‘special securities’ to free access for foreign portfolio investors means it will take a few years before India can lean on index-driven flows to finance a significant portion of the government’s budget, says Sameer Goel of Deutsche Bank. Read his analysis here

RBI unveils 5-yr financial inclusion strategy: Here're key recommendations

The Reserve Bank of India (RBI) has come up with a National Strategy for Financial Inclusion 2019-24, aimed at providing access to formal financial services in an affordable manner. It aims to promote financial literacy among customers.
The Financial Inclusion Advisory Committee of the RBI — in consultation with the Centre, Securities Exchange Board of India (Sebi), Insurance Regulatory and Development Authority of India (Irdai), and Pension Fund Regulatory and Development Authority of India (PFRDA) — has recommended various ways in which the objective can be fulfilled.

The committee has recommended universal access to financial services wherein every village should have access to a formal financial services provider within a 5-km radius. Customers may be on-boarded through an easy and hassle-free digital process. This includes increasing banking outlets of commercial banks. Further, digital financial services have to be strengthened in all tier-II to tier-VI centres to facilitate a less-cash society by March 2022.
RBI unveils 5-yr financial inclusion strategy: Here're key recommendations
The plan aims to provide basic financial services — savings account, credit, micro-life and non-life insurance products, pension product, and a suitable investment product — to every eligible adult. To achieve this, every adult enrolled under the Pradhan Mantri Jan Dhan Yojna should be enrolled under an insurance scheme and pension scheme by March. Further, the public credit registry has to be made fully operational by March 2022 so that authorised financial entities can leverage the same for assessing credit proposals.
Under the national strategy, the committee has recommended new entrants to the financial system — eligible and willing to undergo any livelihood/skill development programme — may be given the relevant information regarding government livelihood programmes to help them augment their skills.
The committee has said customers have to be made aware of the recourses available for grievance resolution. Adequate safeguards also need to be ensured to store and share customers’ biometric and demographic data, so that their Right to Privacy is protected.
Therefore, it has been recommended to devise a customer grievance portal or mobile application that will act as a common interface for lodging, tracking, and redressal of grievances pertaining to the financial sector, collectively by all stakeholders, by March 2021. It has also been advised that there should be co-ordination between all stakeholders.

GST profiteering: Delhi HC comes to the rescue of Nestle, grants stay

Coming to the rescue of fast-moving consumer goods giant Nestlé, the Delhi High Court has again stayed National Anti-profiteering Authority’s (NAA’s) order to recover Rs 73 crore by March for not passing the benefits of the goods and services tax (GST) rate cut to consumers.
The stay, granted through an order issued on February 10, was given on grounds that Nestlé had already paid Rs 16.58 crore of the total demand of Rs 89.73 crore.

The NAA had in December upheld profiteering allegations on the ground that the firm had not passed on the benefits of reduction in GST in respect of various products.
Nestlé had challenged the order on the ground that the NAA had passed the same suo motu and not on the basis of written complaint, which was impermissible. Besides, it argued that while the matter was heard by four members, the NAA order was signed by only three members and was passed beyond the mandatory period of three months.
The NAA noted that the methodology adopted by Nestlé to pass on GST rate cut was “illogical, arbitrary, and illegal, which has resulted in unfairness and inequality while passing on the benefit of tax reduction”.
M S Mani, partner, Deloitte India, said the absence of a prescriptive methodology for determining profiteering had made it difficult for conducting businesses.
“They will hope for some relief considering the practical challenges faced during the initial period of GST introduction,” he said.
According to the anti-profiteering rules under GST, “benefits of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices”. The next date of hearing is May 20.
A Nestlé India spokesperson told Business Standard earlier that “…the benefits largely have been passed on by way of reduction of MRP or by way of increase in grammage. On SKUs (stock-keeping units), where it was not practicable to pass on the benefits, say for example Nescafé single-serve packs for Rs 2, or Maggi noodles Rs 5 packs, the benefit has been passed on other pack sizes within the same product category”.
The Delhi HC on Tuesday also stayed a show-cause notice by NAA to Johnson & Johnson for allegedly profiteering by not passing on the benefit of rate cuts. J&J argued that the calculation of profiteering of Rs 42.7 crore was based on “arbitrary, unreasonable and capricious methodology”.

Ahead of IPO, SBI Cards sees fintechs, UPI as formidable competition

SBICards and Payment Services has stated new-age fintech-led payments mode, including Unified Payments Interface (UPI), as formidable competitors, in a filing of prospectus for its upcoming initial public offering (IPO).
Before going for an IPO, it is mandatory for a company to list out its risk factors so that the public is able to make an informed decision.

In its prospectus, SBI Cards said the primary competition for the company continued to be other credit card issuers, and debit card issuers to a certain extent.
However, new players with innovative products have emerged. The credit card company has competitions from businesses that operate their own mobile wallets or extend credit to their customers and other fintech service providers.
"Mobile, e-wallet, and tokenisation platforms, including the increasingly prevalent UPI, may present formidable competition as they are able to attract large payment volumes at low or no payment processing fees to merchants," SBI Cards said in its prospectus.
SBI Cards expects competition to intensify in future. For example, many credit card issuers have instituted rewards programmes that could be on a par or better in the eyes of the customers.
"As competitive pressures intensify, we may be required to expend additional resources to offer a more attractive value proposition to our cardholders, which could negatively impact our profit margins. In addition, although we continue to benefit from relatively high interest rates on our general purpose credit card portfolio, increasing competition may exert downward pressures on the interest rates we are able to charge our customers, which would ultimately erode our margins," the company said.
SBI Cards' asset quality remained largely healthy. As of December 31, the gross non-performing assets (NPAs) as percentage of gross advances was 2.47 per cent, and net NPA as percentage of net advances was 0.83 per cent.
This is a slight deterioration from the March 31, 2019, level when the gross NPA ratio was 2.44 per cent and net NPA ratio was at 0.83 per cent. In March 2018, the gross and net NPa ratios were at 2.83 per cent and 0.94 per cent respectively.
Among other things, the level of the NPAs for a card company is affected by "the general level of economic growth in India, the amount of non-performing loans written-off and our credit approval and monitoring policies."
Other factors include a rise in unemployment, prolonged recessionary conditions, decline in household savings and income levels, a sharp and sustained rise in interest rates, etc., it said.

Shaktikanta Das felt economy needs more monetary stimulus: MPC minutes

When the MonetaryPolicy Committee (MPC) members met earlier this month they decided to keep the policy repo rate unchanged as they wanted to maximise the impact of any future rate cuts, show minutes of the meeting.
The MPC, which met on February 4 and announced its decision on February 6, focused on having banks pass on the past rate cuts and letting the economy show signs of improvement following the growth supportive measures of the government.

Unlike the previous policies, the six members of the MPC were not unduly alarmed on the inflation front, and took comfort in the fact that inflation expectations surveys showed the households expected moderation in prices. The members also deliberated on the coronavirus outbreak and its economic risks.
Even as the consumer price index inflation spiked to 7.35 per cent in December, much higher than Reserve Bank of India’s (RBI’s) comfort level of 6 per cent, it was largely because of onion prices rising 328 per cent, which alone accounted for a 210 basis-point (bp) increase in headline inflation despite its small weighting (0.64 per cent) in the overall bucket, the members noted. According to the RBI survey, “the three-month ahead inflation expectation is expected to moderate by 60 bps and one year by 70 bps”.
The members also noted that the growth-supportive measures by the government and the tax cuts would help the economy, but not in the short term.
Governor Shaktikanta Das said some green shoots were visible. “Monetary transmission and bank credit flows have improved, but they need to become stronger. While the macroeconomy needs further monetary stimulus, the inflation outlook continues to be uncertain,” said Das.
“Considering the overall evolving growth-inflation situation, it would be prudent to continue the focus on growth in the context of the expected moderation in inflation,” the RBI governor said, adding barring the intensification of global risks, there was policy space that needs to be timed optimally and opportunistically to maximise its impact on growth.
RBI’s executive director and newly inducted member in the MPC Janak Raj said the recent rise in food prices should boost rural incomes and help strengthen rural demand. While the stress in the automobile sector seems to be gradually receding, the real estate sector remains stressed.
If the coronavirus crisis prolongs and spreads, “it will have ramifications for the global economy and its net impact on the Indian economy might be negative even if oil and other global commodity prices decline”, Raj said.
“Weak demand conditions warrant further monetary policy easing, while elevated inflation and the highly uncertain inflation outlook call for a cautious approach. More data are needed for greater clarity,” Raj said.
Deputy Governor Michael Patra said there was no definitive evidence that the downturn is bottoming out.
“The endeavour now should be to improve transmission of the cumulative 135-bp rate reduction effected since February 2019,” Patra said.
According to external member Chetan Ghate, the September 2019 corporation tax cuts did not result into any discernible increase in net profits in the third quarter across several firm types in RBI’s Industrial Outlook Survey. The profit margin expectations for the fourth quarter also continued to remain pessimistic.

Automobile slump: Confidence remains elusive; car sales skid 4.6% in Jan

Salesof vehicles have continued to decline, with auto dealers saying that confidence is yet to return among buyers as many customers are holding back their decision to buy cars.
However, green shoots are visible especially in rural areas, with tractor sales showing an uptick. Retail sales of vehicles declined by 7.13 per cent year-on-year (YoY) in January to 290,879 units, according to the data released by Federation of Automobile Dealers Associations (FADA), the apex body of auto dealers on Thursday.

Retail sales are typically subdued in January after a brisk business in December. However, subdued consumer sentiment and persistent slowdown in the economy have added to the drop in demand this year.
“Auto sales continued to be in the negative territory in January, except for three-wheelers, with many consumers not buying any vehicle,” said FADA President Ashish Kal, adding that the transition to BS-VI emission norms also delayed purchases.
Retail sales of passenger vehicles, the largest component of the pie, fell by 4.61 per cent YoY in January to 290,879 units, according to FADA data.
January was the second consecutive month of decline in showroom sales of passenger vehicles after two months of marginal recovery in October and November, when automakers had offered record discounts to entice customers. However, with a dip in economic activity and overcapacity with fleet owners on account of an increase in freight carrying capacity of trucks, sales of heavy commercial vehicles slumped 6.89 per cent to 82,187 units in January.
Confidence yet to return among buyers as car sales skid 4.6% in January
Most manufacturers witnessed decline in wholesales last month as production was reduced to control inventory of BS-IV emission norm-compliant vehicles and gradual increase in dispatches of BS-VI compliant units at dealerships. The new emission norms will be effective from April 1, 2020.
“With weak demand situation, liquidation of inventory of BS-IV vehicles is the top focus for dealers and FADA has already appealed to all manufacturers to switch over completely to BS-VI vehicles.
The past 14 months have seen one of its toughest times in auto sales. Therefore, FADA has requested original equipment manufacturer’s (OEM’s) that any BS-IV vehicle billed further, which is not against specific customer orders, to be returned to avoid financial loss to dealers,” Kale said.
Consumption slowdown in rural markets and an increase in prices of scooters and motorcycles because of hike in insurance costs led to an 8.8 per cent YoY fall in sales of two-wheelers to 1,267,366 units during January.

Congress sees Rahul Gandhi only as sole contender for party president post

Amid concerns in the party over leadership issue and calls for elections to the top post, the CongressThursday said Rahul Gandhi was a clear successor for party president's post to his mother and incumbent Sonia Gandhi.
Congress sources said Rahul was the only contender in the race for the president's post because the entire rank and file of the party want him to lead, hinting that elections in that case may not even be necessary.

With differing voices emerging within the party over the leadership issue, a senior Congress leader claimed that Rahul has acceptability across the country and also the capability to lead the party.
There is also speculation that Rahul may be elevated to the top post in the proposed plenary session of the Congress slated sometime in April.
Sources in the party said that the session may be slated after the budget session of Parliament and a major section within the party wants Rahul to be installed as party president again.
Congress leaders Sandeep Dikshit and Shashi Tharoor have made calls for fresh elections for the party's top post to infuse fresh vigour in the party.
Asked about the remarks made by these leaders, Congress chief spokesperson Randeep Surjewala said the Congress working committee has decided on the Congress president.
"If anyone has any doubts about this, he should kindly read the resolution of the CWC before giving any statements in public and they will gain some knowledge," he told reporters when asked about Tharoor.
On Dikshit's statement, Surjewala said though he has not read it but if Dikshit and leaders like him work hard in their own parliamentary constituencies the Congress will surely emerge victorious.
"I have not seen Dikshit's remarks, but one must realise when the leaders contest themselves they should understand why they lost elections and how much votes they got.
"Instead of giving statements on social media and interviews in the media, if Sandeep Dikshit works hard in his own constituency and politically encash the work initiated during Sheila Dikshit's rule, the Congress will emerge victorious. It is my appeal to every leader like Dikshit that instead of giving knowledge to the entire country, they should first show the benefits of their own work done in their constituencies," he said.
While Dikshit has demanded that there should be fresh elections to the top post in the Congress respecting Rahul's decision of resigning and not having a Gandhi as the next Congress president, his remarks has been supported by Tharoor.
"What Sandeep Dikshit said openly is what dozens of party leaders from across the country are saying privately, including many with responsible positions in the party. I renew my appeal to CWC to hold leadership elections to energise workers and inspire voters," he said.

Govt takes a call to save telecom firms, but no relaxation likely on AGR

After back-to-back parleys this week between the top management of telecom companies and the government, a consensus seems to have emerged on the need to save the financially stressed sector.
While VodafoneIdea Chairman Kumar Mangalam Birla and Chief Executive Ravinder Takkar did their rounds of the Department of Telecommunications (DoT) and North Block over the last few days, Bharti Airtel Chairman Sunil Mittal joined in as well to seek relief for the telecom industry faced with a bill of Rs 1.47 trillion in pending dues linked to adjusted gross revenue (AGR).

There’s no official word yet from the DoT on what measures were being planned to offer relief, but a senior official on Thursday said, “We are doing everything to save the health of the sector.” A source said the DoT and the Finance Ministry were looking at many steps to bring back the sector on track and that a ‘’monopoly’’ situation was not desirable. A telecom fund to give loans to operators is among the measures being discussed.
The Union government is of the view that there can be a debate on the quantum of payment and penalty but not on the fact that the companies have to make the payments.
In fact, Tata Teleservices, which paid Rs 2,197 crore as full and final in AGR dues on Monday, will be issued a notice seeking full payment of dues as per the Union government's calculation. The company’s dues are estimated at around Rs 14,000 crore. To press its point, the DoT is expected to issue notices to all telcos to pay their dues by March 17.
Mittal, who met Telecom Minister Ravi Shankar Prasad on Thursday, said the sector was heavily taxed and required “rationalisation” in levies. He didn’t comment on AGR dues issue.
To cross-check the AGR dues claims of the telcos, the government has decided to verify their accounts during the last few years in a random fashion. In the case of Tata Teleservices, DoT would ascertain whether the full payment claims made by the company were genuine or not. On the issue of invoking bank guarantees of the companies in case of payment default, DoT is awaiting legal opinion it sought on the AGR issue. The department, under the unified licence agreement, can invoke bank guarantees and convert it into a cash security if the service provider violates any term of the licence. The ministry has sought views on whether the guarantees should be invoked before March 17 (next date of the SC hearing).
“The government has to ensure that the telecom companies comply with the order of the Supreme Court. They have started making payments and have so far paid Rs 15,700 crore,’’ the official said. The government has to ensure that the health of the sector is not impacted and that the Union government meets its obligation towards the customers, according to the official.
It is learnt that during the meetings with the government this week, many telcos conceded they should have paid their dues after 2011, rather than waiting so long. In 2011, the matter was shifted from the SC to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for interpretation of the heads and computation thereof.
The AGR dispute started in 2003. On October 24, 2019, the SC ruled that AGR for telcos should include all revenues accrued to carriers, including that from non-core activities, upholding the DoT’s stance. The firms paid 90 per cent of the amount due to the government in 2003. They were supposed to pay the remaining 10 per cent to the government, along with interest, penalty and interest on penalty.
On February 14, SC had rejected the modification applications of Bharti and Vodafone Idea seeking relaxed payment scheme for the AGR dues. The top court directed the companies to make payments immediately, prompting the DoT to issue letters to telcos last Friday that payments must be made by the same midnight.

Putting America first, will make tremendous trade deal with India: Trump

Days ahead of his India visit, US President Donald Trumpon Thursday said the two countries could make a "tremendous" trade deal.
"We're going to India, and we may make a tremendous deal there," Trump said in his commencement address at the Hope for Prisoners Graduation Ceremony in Las Vegas.

Trump, accompanied by First Lady Melania Trump, is scheduled to travel to Ahmedabad, Agra and New Delhi on February 24 and 25.
Ahead of the visit, there have been talks about India and the United States agreeing on a trade package as a precursor to a major trade deal.
During his commencement address, Trump indicated that the talks on this might slowdown if he did not get a good deal.
"Maybe we'll slow down. We'll do it after the election. I think that could happen too. So, we'll see what happens," he said.
"But we're only making deals if they're good deals because we're putting America first. Whether people like it or not, we're putting America first," Trump said.
Bilateral India-US trade in goods and services is about three per cent of the US' world trade.
In a recent report, the Congressional Research Service (CRS) said the trading relationship is more consequential for India -- in 2018 the United States was its second largest goods export market (16.0 per cent share) after the European Union (EU, 17.8 per cent), and third largest goods import supplier (6.3 per cent) after China (14.6 per cent) and the EU 28 (10.2 per cent).
"The Trump Administration takes issue with the US trade deficit with India, and has criticised India for a range of 'unfair' trading practices," the CRS said.
"Indian Prime Minister Modi's first term fell short of many observers' expectations, as India did not move forward with anticipated market opening reforms, and instead increased tariffs and trade restrictions," it said.
"Modi's strong electoral mandate may embolden the Indian government to press ahead with its reform agenda with greater vigour. Slowing economic growth in India raises concerns about its business environment," CRS said.
As per a fact sheet issued by the Council on Foreign Relations (CFR), trade in goods and services between the two countries from 1999 to 2018 surged from $16 billion to USD 142 billion.
India is now the United States' eighth-largest trading partner in goods and services and is among the world's largest economies.
India's trade with the United States now resembles, in terms of volume, the US' trade with South Korea ($167 billion in 2018) or France ($129 billion), said Alyssa Ayres from CFR.
"The United States for two years now has set out in stone pretty clearly the things that they wanted to see to try to get an agreement, and it's basically then on India's doorstep on whether they want to take those steps," Rick Rossow, Wadhwani Chair in US-India Policy Studies at the Center for Strategic and International Studies think-tank told reporters during a conference call.
"The list of US asks has been pretty static all throughout. Not to say that any of these things are easy for India to do, but the United States to my knowledge didn't change the goalposts just because we now consider India to be a middle-income country. The things that we wanted to see happen to get this trade agreement have been pretty static all throughout, no matter how difficult they are," he said in response to a question.

Govt should offer one-time settlement to telcos, waive penalties: S C Garg

Former finance secretary Subhash Chandra Gargon Wednesday said the government should offer a one-time settlement scheme to the telecom companies to pay the principal due amount as per the AGR definition and waive the penal interest and penalties.
The massive Rs 1.47 trillion of adjusted gross revenue (AGR) dues are pushing telecom firms to the brink.

In a blog titled 'Rebuilding Telecom Business in India', Garg said the telecom crisis in India is not just limited to AGR-related issues.
"Offer a one-time settlement scheme to the telecom companies (both operating and under resolution) to pay the principal due amount as per the AGR definition as contained in the licensing agreements and waive the penal interest and penalties.
"Alternatively, appoint a board for Vodafone Idea Ltd by ousting the current board on the lines of action taken in the case of IL&FS and DHFL and secure a moratorium of some time on servicing of loans and government dues," he said.
Garg noted that the telecom business -- both voice and data -- is headed towards becoming a duopoly (Jio and Airtel) with the remaining two players, Vodafone Idea and BSNL-MTNL, hurtling towards eventual shutdown, which might as well be an abrupt collapse.
"This has enormous consequences for over 400 million of the customers of Vodafone Idea and BSNL-MTNL in terms of continuous availability of telecom services and also for competitiveness in the industry itself," he said.
Garg also wondered whether the government's proposal to put in billions of dollars (over Rs 70,000 crore) to revive BSNL-MTNL is advisable or not as the country is facing massive economic slowdown.
The Supreme Court last week rejected a plea by telecom firms including Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 trillion in past dues for spectrum and licenses by March 17.
Some telecom firms have said they were already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans.

Can Gadkari come to explain govt proposal for introducing EVs, asks SC

The Supreme Court Wednesday expressed desire to interact with the Transport Minister Nitin Gadkarion the proposal for gradual conversion of all public transport and government vehicles into electric vehicles (EVs) to curb air pollution.
The apex court, however, did not seek presence of the minister after Additional Solicitor General A N S Nadkarni raised objection.

A bench, headed by Chief Justice S A Bobde, enquired from Nadkarni as to whether the minister can come over for an interaction to assist this court.
"Can the minister come to Supreme Court and explain proposal to introduce non-polluting vehicles run on electricity/hydrogen," the bench asked the law officer.
Nadkarni raised objection, saying the appearance of the minister can be misused for political purposes.
He added however that there was nothing wrong in politicians appearing before the court.
"We understand that Mr Prashant Bhushan is a political person but he is not going to argue with the minister," the bench said.
Without seeking the presence of the transport minister, the top court further said: "We consider it appropriate that all the issues be considered simultaneously with the assistance of authority empowered to take decision." It then put up the matter for hearing after four weeks.
During the hearing, Bhushan, appearing for NGO - CPIL, said that as per the National E-Mobility Mission Plan (NEMMP), 2020 EVs were to be procured by the government.
The authorities were also required to provide charging points for electric vehicles at public places like malls and petrol pumps.
Bhushan also said that under the scheme the authorities were required to promote sale of EVs by providing subsidies.
The bench adjourned the hearing for four weeks and ordered that in the meantime all issues relating to EVs be considered by the government with the assistance of an authority empowered to take decisions.

Challenges galore for financial institutions amid liquidity crunch: Fitch

With deceleration in growth and tight liquidity conditions, the country's financial institution sector may continue to face challenging operating environment, according to a report by FitchRatings.
It said the stress in non-banking financial companies, small and medium enterprises (SMEs) and the real estate sector will continue to put asset-quality pressures on financial institutions in the country.

"The Indian financial institutions (FIs) sector will continue to face a difficult operating environment amid the macroeconomic slowdown and weak funding conditions," the rating agency said in a note on Wednesday.
The rating agency expects the real GDP growth to slow to 4.6 per cent in 2019-20 from 6.8 per cent in 2018-19, led by a squeeze in credit availability from non-banking financial institutions (NBFIs) and deterioration in business and consumer confidence.
However, the real GDP growth may rebound to 5.6 per cent in 2020-21, it said.
The report said asset-quality tensions are likely to intensify if stresses on non-banks, real estate and SMEs remain unresolved.
Idiosyncratic stress in the telecom sector has also pushed up asset-quality risks for banks, which are vulnerable due to weak capital and income buffers, it said.
"The potential for contagion for banks, thus, exists as a result of their direct exposure to NBFIs as well as the second-order economic impact of being exposed to the sectors that are adjusting to the credit squeeze as the NBFIs cut back exposure," the rating agency said.
The banking system's average impaired loans ratio had fallen to 9.3 per cent by 2018-19 from 11.6 per cent at 2017-18, the first decline since 2020-11.
According to the latest Financial Stability Report released by the RBI, the gross non-performing loans of banks may increase to 9.9 per cent by September 2020 from 9.3 per cent in March 2019.
The rating agency said the recent fundraising trends by a few NBFCs in January and February 2020 indicate improvement in funding environment.
The rating agency expects NBFIs to continue to tap the offshore market, but access is likely to remain uneven and limited largely to retail-focused NBFIs and those backed by large corporate groups. Wholesale and housing finance companies are the most at risk as they will continue to find it difficult to raise funds, given their greater exposure to the real-estate sector where there is pressure on cash flows and collateral values.

Modi govt does not acknowledge the word 'slowdown': Manmohan Singh

Attacking the Modigovernment on the state of the economy, former prime minister Manmohan Singh on Wednesday said the current dispensation does not acknowledge the word "slowdown" and the real danger is that if problems are not recognised, then finding credible answers to take corrective action is unlikely.
Addressing a gathering at the launch of Montek Singh Ahluwalia's book "Backstage", Singh said the former planning commission deputy chairman has written about the good as well as the weak points of the UPA government.

"I think these issues will be debated and should be debated because we have today a government that does not acknowledge that there is such a word as slowdown. I think this is not good for our country," the former prime minister said.
"If you do not recognise the problems that you face, you are not likely to find credible answers to take corrective action. That is the real danger," he said, attacking the government on the state of the economy.
The book will be of great help to the future growth of the country, Singh said.
"Montek has also pointed out that contrary to what the ruling group may say, today the USD 5 trillion economy by 2024-25 is wishful thinking. Also there is no reason to expect that farmers income will be doubled in a three- year period," he said.
Singh also hailed the role played by former prime minister Narasimha Rao, P Chidambaram and Ahluwalia for supporting his liberalisation of the economy in the 1990s and enabling him to carry out the reforms despite resistance from different quarters.

Saving 'big trade deal with India' for later, says Trump ahead of visit

US President Donald Trumphas said he is "saving the big deal" with India for later and he "does not know" if it will be done before the presidential election in November, clearly indicating that a major bilateral trade deal during his visit to Delhi next week might not be on the cards.
"We can have a trade deal with India. But I'm really saving the big deal for later," he told reporters at Joint Base Andrews Tuesday afternoon (local time).
Trump is scheduled to visit India on February 24 and 25.
The US and India could sign a "trade package" during the visit, according to media reports.
Asked whether he expects a trade deal with India before the visit, Trump said, "We're doing a very big trade deal with India. We'll have it. I don't know if it'll be done before the election, but we'll have a very big deal with India."
US Trade Representative Robert Lighthizer, the point-person for trade negotiations with India, is likely to not accompany Trump to India, sources said. However, officials have not ruled it out altogether.
In an apparent dissatisfaction over US-India trade ties, Trump said, "We're not treated very well by India." But he praised Prime Minister Narendra Modi and said he is looking forward to his visit to India.
"I happen to like Prime Minister Modi a lot," Trump said.
"He told me we'll have seven million people between the airport and the event. And the stadium, I understand, is sort of semi under construction, but it's going to be the largest stadium in the world. So it's going to be very exciting... I hope you all enjoy it," he told reporters.
Meanwhile, the US-India Strategic and Partnership Forum (USISPF) in a report said the latest quarterly data depict continuation of overall positive bilateral trade trends. The third quarter data reflects some downslide in growth rates.
"It may be due to several reasons, including the unexpected economic slowdown in India's economic growth, impact of US-China trade war, GSP withdrawal from the US side and retaliatory tariffs on specific US goods from the Indian side," USISPF said.



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According to the report, the data available for the first three quarters of 2019 (January-September) pulled the overall growth rate in cumulative bilateral trade down to 4.5 percent from 8.4 percent registered for the first two quarters.
Goods and services trade performance in third quarter was dismal at -2.3 percent, in contrast with the impressive 9.6 percent growth witnessed for the first two quarters of the year; while trade in services was up two percent goods trade dropped five percent, the report said.
The cumulative US-India trade in goods and services (USD 110.9 billion) for the first three quarters of 2019 increased 4.5 percent with US exports and imports growing at four percent and five percent respectively.
The US exported USD 45.3 billion worth of goods and services to India in the first three quarters 2019, up 4 percent from the corresponding period in the previous year; and the US imported USD 65.6 billion worth of goods and services from India, up five percent from the previous year's USD 62.5 billion level for the same period, it said.
The USISPF has projected that the total bilateral trade can touch USD 238 billion by 2025 if the current 7.5 percent average annual rate of growth sustains; however, higher growth rates can result in bilateral trade in the range of USD 283 billion and USD 327 billion.
The US remains the top trading partner for India in terms of trade in goods and services, followed by China. While the bilateral trade between US and India is approximately 62 percent in goods and 38 percent in services, the bilateral trade between India and China is dominated by goods.
India's trade with China grew 13 percent in 2018, while India's goods trade with the US increased 18 percent.
China had a huge trade surplus of USD 58 billion with India, indicating Beijing's strength in the Indian market, especially in sectors, such as electronics, machinery, organic chemicals, plastics and medical devices.
The US goods exports to India, in comparison, were mainly concentrated in mineral fuels, precious stones, and aircraft. The US faces tough competition with China in the Indian market in areas such as electronics, machinery, organic chemicals and medical devices.

Coronavirus outbreak: Govt recommends ban on export of 12 drug formulations

A government committee formed to monitor supply of raw materials for drugs from China has recommended restrictions on exports of 12 active pharmaceutical ingredients (APIs) and formulations in the wake of the coronavirus outbreak, sources said.
The APIs and formulations include common antibiotics and vitamins.

In a letter sent to the Directorate General of Foreign Trade (DGFT), Deputy Secretary at Chemicals and Fertilisers Ministry M K Bhardwaj sought orders restricting export of the 12 APIs and formulations, a source said.
The 12 APIs and formulations include antibiotics such as Choramphenicol, Neomycin, Metronidazole and Vitamins B1, B12, B6 along with progesterone, among others.
The Department of Pharmaceuticals had formed a committee under the chairmanship of joint drug controller, Central Drugs Standard Control Organisation (CDSCO) that has been closely monitoring supply of APIs and intermediates which are imported from China and effect of the coronavirus epidemic in the country on their supply to India.

Sunil Mittal, Birla meet FM as AGR crisis looms over telecom sector

With the SupremeCourt-mandated liability pushing telecom companies to the brink, industry honchos Sunil Bharti Mittal and Kumar Mangalam Birla on Wednesday met Finance Minister Nirmala Sitharaman as their firms scrambled to meet payment deadlines.
While the two refused to comment on discussions they had with Sitharaman, Mittal said the telecom sector has been under stress for the last three-and-a-half years and the government should focus on its sustainability.

Mittal, who heads mobile service major Bharti Airtel, first met Telecom Secretary Anshu Prakash before going for the meeting with the finance minister.
Birla, who is the chairman of Vodafone Idea Ltd, had met the telecom secretary on Tuesday.
It was not immediately clear if the two telecom tycoons met Sitharaman together or separately.
Emerging out of the North Block after meeting Sitharaman, Mittal told reporters that the issue of pending dues arising out of the Supreme Court ruling on Adjusted Gross Revenue (AGR) was not discussed.
The telecom industry, he said, is vital to India's digital agenda.
"This industry is very vital to the nation's digital agenda, and many other industries that ride on it....employment, government taxes...the only thing government needs to focus on is how to ensure sustainiability of the sector," Mittal said.
Mittal -- whose company Bharti Airtel is confronted with over Rs 35,000 crore of statutory dues -- did not elaborate on the relief mechanism that the telco is pitching for. The industry as such has been batting for reduction in levies like licence fee and spectrum charges.
Mittal said Airtel has already announced its plans to pay the dues that arose from the apex court ruling. The company is calculating its liability, he added.
Airtel has so far paid Rs 10,000 crore out of its estimated liability of over Rs 35,000 crore.
"We have made statement that we are working on the calculation so as soon as it is ready...," he said.
Vodafone Idea Chairman Kumar Mangalam Birla refused to comment on whether the company has approached the government for relief on the timelines for the statutory payment, and whether he has received any assurances in return.
Asked about the mounting stress in the telecom sector, Birla said, "That is in the public domain...there is no other insight I can add." On whether it is a do-or-die moment for telecom companies like Vodafone Idea, Birla said, "Let us see." Vodafone Idea on Monday paid Rs 2,500 crore to the Department of Telecommunications (DoT) and promised to pay another Rs 1,000 crore before the end of the week.
But the amount paid for now is less than 5 per cent of the dues that the DoT estimates the company owes to the government following the Supreme Court ruling that asked for including non-core revenues of telcos in computing statutory payments such as licence fee and spectrum charges.
The Supreme Court on Monday refused to stop the telecom department from taking any coercive steps for recovery of dues from Vodafone Idea.
In December, Birla had said Vodafone Idea may have to shut down if there is no relief on statutory dues. "If we are not getting anything, then I think it is the end of the story for Vodafone Idea," Birla had said. "It does not make sense to put good money after bad... We will shut shop." After a Supreme Court rap on February 14 for missing the payment deadline, top telecom firms Bharti Airtel, Vodafone Idea and Tata Teleservices earlier this week scrambled to pay a part of their outstanding dues.
Airtel -- which recently raised USD 3 billion -- has paid Rs 10,000 crore to the government, and said it will clear the remaining dues before the next date of hearing on March 17. Vodafone Idea, however, has so far not provided a clear deadline for making balance payments.
Tata Teleservices paid Rs 2,197 crore, the entire outstanding it believes to have arisen after the October ruling of the apex court for calculating dues after adding non-telecom revenues. It has also submitted to DoT the details of calculations in support of the payment.
The DoT -- which last week drew flak for ordering no coercive action even after telcos missed the January 23 payment deadline set by the Supreme Court -- had been mulling the option of encashing bank guarantees given by firms when they got telecom licences, as none of the telcos paid the full amount. The telecom department would seek opinion from the law ministry on the issue, sources said.
The Supreme Court, last week, rejected a plea by companies such as Bharti Airtel and Vodafone Idea for extension in the payment schedule and asked all of them to deposit an estimated Rs 1.47 trillion in past dues for spectrum and licences. It threatened to initiate contempt proceedings against top executives of these firms for non-payment.
Some telecom firms are already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans. Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea owe about 60 per cent.

MARKET LIVE: Trends on SGX Nifty suggest a positive start for Sensex, Nifty

Indicesmay remain volatile today ahead of the weekly expiry due Thursday. That apart, the government's assurance to announce measures, in the coming days, to deal with the impact of coronavirus outbreak on the country's exports could be on investor radar. READ MORE
That apart, the NSE's latest index rejig announcement could lead to stock-specific movements. The rupee's trajectory, oil price fluctuation, and update on coronavirus could further steer indices.
On Tuesday, the benchmark S&P BSE Sensex settled at 40,894 levels, down 161 points or 0.39 per cent. On the NSE, the Nifty50 ended at 11,992.50, down 53 points or 0.44 per cent.
GLOBAL CUES
Asian shares edged cautiously higher in early trade as investors tried to shake off worries about the coronavirus epidemic. The death toll from the new coronavirus in mainland China passed 2,000 on Wednesday although the number of new cases fell for a second straight day.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.01 per cent, Australian shares were up 0.14 per cent, while Japan’s Nikkei stock index rose 0.61 per cent.
In the early trade, SGX Nifty was trading 37 points higher at 12,055 indicating a flat to positive start to the domestic indices.
In the US, the Dow Jones and the S&P 500 fell 0.56 per cent and 0.29 per cent, respectively. The Nasdaq Composite, meanwhile, added 0.02 per cent eking out a record closing high.
(With inputs from Reuters)
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GO LONG IN NIFTY WITH 11,900 STOPLOSS; TGT 12,200

On Tuesday, Nifty recovered more than 100 points from the bottom of 11,908 in the second half of the trade. This move has resulted in a bullish “Hammer” candlestick pattern on the daily charts. Nifty has retraced 50 per cent of the entire rally seen from 11,614 (3rd Feb 2020) to 12,246 (14th Feb 2020). Considering the primary bullish trend, we recommend initiating longs in Nifty for the upside target of 12,200, keeping stop loss at 11,900. READ MORE
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Govt moves to take on coronavirus challenge, plays down price rise concerns

The Uniongovernment is likely to announce “immediate measures” to address the operational issues being faced by industry and ease congestion at ports on the east coast as consignments from China pile up amid the coronavirus scare.
“We will come up with immediate measures that are required to address the challenges, be it at ports, related to logistics or freight movements. Freight clearances at ports will be expedited and manpower requirements will be increased, along with 24x7 services,” Finance Minister Nirmala Sitharaman told the representatives from various industries at a meeting in New Delhi. The meeting was held to assess the impact of the coronavirus epidemic on Indian industry.
The government is expected to hold a series of meetings starting from Wednesday and will announce the first set of measures in the coming few days.
Sitharaman said coronavirus would not lead to any price rise, but added this was a major concern highlighted by the industry representatives who cited congestion at ports. Senior officials said the government was exploring various measures to tide over the situation, including giving relief to micro, small and medium enterprises in servicing their loans.
“Banks will be encouraged to extend the window of servicing the loans by MSMEs by 15 days or so, as it will be a ‘force majeure’ event,” an official said. Another official said that to enable banks to do so, firms across sectors might invoke ‘force majeure’ with their suppliers and partners in China.
Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and restrict participants from fulfilling obligations. The government will also actively consider the suggestion of airlifting formulations of essential pharmaceutical products and raw materials that will be exempt from or have lower import duties.
ALSO READ: As coronavirus asserts itself on the world, industry asks for duty cuts
India depends heavily on China for active pharmaceutical ingredients (APIs). In 2018-19, India imported bulk drugs and intermediates worth $2.4 billion from China, making up 68 per cent of the imports, according to CARE Ratings.
A representative from the pharma industry is learnt to have suggested that India should list all the raw materials and products for which it is 100 per cent dependant on China. “If we can make special logistical arrangements to bring those items to India, as soon as the situation allows, we should airlift them,” the person said.
The industry also fears that China might soon block export of certain APIs for essential drugs to India, since it would need these for its own use. The industry has requested that India should talk to China to ensure such curbs on imports don't take place.

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According to sources in the meeting, some sectors expressed concerns about a slowdown in activity, either due to raw materials not coming in from China or being stuck at ports, or because China and neighbouring Southeast Asian countries being major destinations for their exports. These sectors were pharma, solar, chemicals, iron, metals and steel, and marine food. Consignments are stuck at ports due to the Chinese not being able to provide paperwork from their end. A relaxation regarding such paperwork has been given at Chennai port and is being extended to other ports.
Some representatives said there were Indian manufacturers of the components that were needed from China, but these firms are fully export-oriented. "It will be of help if there are some export restrictions and we can use these locally-made components," said a person at the meeting.
At the briefing, Sitharaman said various secretaries of the finance ministry would take stock of specific sectors and interact with their counterparts in the relevant ministries before suggesting sector-wise and broad solutions to her on Wednesday. She said the Centre would come up with a road map for the short- and the medium-term for addressing “undue situation” that may arise due to coronavirus.
The FM acknowledged congestion at eastern ports, especially concerns raised by the fertilisers industry related to import of raw materials. She asked the industry whether western ports were also facing similar issues. She said the government would be alert to the fact that piling up of inventories did not cause price distortion. “We will not spend much time on measures, and interventions will come immediately,” Sitharaman said.

Slowdown effect? Salary increase in 2020 may be lowest in a decade at 9.1%

The economic slowdown is beginning to reflect in the salary hikes of IndiaInc. The average salary increase in 2020 is projected to be 9.1 per cent, the lowest in a decade, according to the 24th edition of Aon Plc’s annual salary increase survey. In 2018 and 2019, companies increased average salary by 9.5 per cent and 9.3 per cent, respectively. After the financial crisis of 2008, the average hike had slumped to 6.6 per cent.
The projected increase for 2020 is lower than the average salary hike that graduates of top Business schools have managed at around 12 per cent.

The good news, however, is that despite gross domestic product (GDP) growth estimates getting revised downward, the average salary increase for 2020 will be only 20 basis points lower than that of the previous year.
Moreover, double-digit salary increments have not vanished entirely. While the average for the country has come down, 39 per cent of the companies are still willing to give double-digit salary increases in 2020.
This year’s number is in keeping with the long-term trend. “The trend over the years has been downward. Up to 2011, the average salary increment was in high double digits. Between 2012 and 2016, it was at 10 per cent plus, and in recent years, it has come down to the 9 per cent plus mark,” said Tzeitel Fernandes, partner and head of rewards solutions, India, Aon. She added they witnessed a mood of caution among firms this year.
The survey by Aon, a global professional services firm, covered more than 1,000 companies, across more than 20 industries. The firms were split equally between manufacturing and service sectors.
The mood within India Inc, though a little jaded than last year, is not completely downbeat. One question posed in the survey was whether respondents saw their businesses improving, stabilising, or declining.
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In 2020, 92 per cent of the firms still said they saw their businesses improving or stabilising (the figure was 97 per cent for 2019). “Despite the economy softening and certain amount of caution coming in, an overwhelming majority of firms still say they are likely to do as well, if not better, in 2020 compared to 2019,” said Fernandes.
Another trend that is evident is that the range in salary increases across sectors has narrowed. In 2020, e-commerce, early-stage, and professional-services organisations plan to offer an average 10 per cent increase, while the logistics/transportation sector intends to offer the lowest increase of 7.6 per cent.
“Prior to 2011, booming sectors like IT-ITeS, telecom, retail, and financial services pulled the India average up. Now we are seeing convergence in increases across sectors. This usually happens in a more mature business ecosystem. Most sectors are now operating within the same average range,” said Navneet Rattan, director-performance and rewards, Aon.
With budgets coming down, pay at risk (or average variable pay as a percentage of the total fixed pay) is on the rise. It was 15.2 per cent in 2018 and rose to 16.1 per cent in 2019. It was the highest for senior management (23.4 per cent) and lowest for junior management (11.4 per cent). Among sectors, financial services topped the chart at 18.7 per cent.
“Services sector companies tend to have more mature performance management systems, and hence tend to be more aggressive on variable pay,” said Rattan.

Baat Bihar Ki: Prashant Kishor hits out at Nitish over alliance with BJP

Poll strategist-turned-politician Prashant Kishor on Tuesday mocked Bihar Chief Minister Nitish Kumar for aligning with the BJPin his quest for power, and said the JD(U) leader cannot be wedded to Gandhian ideals and stand with those who support Godse at the same time.
Addressing a crowded press conference here, the first since his expulsion from the JD(U), which Kumar heads, Kishor asserted that the chief minister has been a "father figure" to him even before he formally joined the party and so he wished to speak no ill of him.

Kishor, however, acknowledged that he had differences with Kumar over the contradiction in his avowed commitment to the principles of Gandhi and his tie-up with the BJP, the party the poll strategist sought to identify with the Mahatma's assassin Nathuram Godse.
"Nitish ji has always said that he cannot leave the ideals of Gandhi, JP and Lohia... At the same time, how can he be with the people who support the ideology of Godse? Both cannot go together. If you want to stay with the BJP, I don't have any problem with it but you cannot be on both sides," Kishore said.
"There has been a lot of discussion between me and Nitish ji on this. He has his thought process and I have mine. There have been differences between him and me that the ideologies of Godse and Gandhi cannot stand together. As the leader of the party you have to say which side you are on," he added.
He also said that unlike the JD(U) rank and file for whom the chief minister's accomplishments in governance had become the "gold standard", he had been candid enough to point out that being a better performer than the past RJD governments will not suffice since the state still lagged behind most others in terms of development.
Kishor, whose first claim to fame was his handling of Narendra Modi's prime ministerial campaign of 2014, seemed to be still smarting under Kumar's statement that he was inducted into the JD(U) on the recommendation of Amit Shah.
"My association with various political parties as a strategist is well known. I have never kept it a secret. But I had not joined the JD(U) as an agent of some other party. If speaking a lie makes things easier for Nitish Kumar, then I grant this to a man who is like a father figure to me," he said.
Kishor said that in 2014, when Kumar had fought the Lok Sabha polls alone after having parted ways with the BJP and was drubbed, returning with only two seats, "he was still the pride of Bihar".
"Compare that with the situation today when a Gujarati leader from another party (an allusion to Shah) has to give the assurance that Kumar will be the NDA leader in the assembly polls as if he was not the leader of the people of the state but a manager of a firm," Kishor said.
"Bihar cannot bear to see its leader becoming a 'pichhlaggu' (piggybacking). Nitish Kumar, who had once famously thwarted Narendra Modi from campaigning for the BJP in Bihar, cut a sorry figure recently when he spoke at rallies in Delhi assembly polls like a mere sidekick while Shah and J P Nadda were running the show," he lamented.
Kishor also rubbished the contention that a tie-up with the BJP was in the interest of Bihar, a claim Kumar has been making to defend his realignment with the saffron party after a four-year estrangement.
"Did the state get a special status, a demand he has been making for so long. He is so helpless that when he begged for grant of central status to Patna University with folded hands, Modi did not deign to acknowledge," he said, recalling the prime minister's visit to the city in October 2017.
Spelling out the failures of Nitish Kumar during his 15-year stint as chief minister, Kishor said he provided students free uniforms and bicycles but failed to ensure good educational standards.
Kumar got roads built but could not help the people prosper so they could own vehicles. He improved electricity supply but most cannot afford beyond a light bulb and a fan, Kishor said.
"He gloats over the states budget having risen from Rs 30,000 crore to Rs 2 lakh crore. Without taking away the credit from him, we must remember that much of this has happened because of inflation," he said.
Kishor said Kumar should be asked why people from Bihar migrate to other states for better education and career prospects, and when will the state rise to a level that people from other parts of the country would come here looking for greener pastures.
Kishor, whose collaboration with leaders such as Mamata Banerjee and Arvind Kejriwal fuelled speculations about his political course in Bihar, made it clear that he was not thinking in terms of floating a new political party.
He, however, unveiled an ambitious "medium to long- term campaign" for pulling the state up by its bootstraps and named it "Baat Bihar Ki".
He claimed that enrolment of volunteers for the project was already under way and more than 2 lakh young people, many of whom are active members of political parties, have signed up.
"We intend to enroll up to one million people in the next 100 days. This is an aspirational drive aimed at transforming the state's politics and not an attempt to build a new party.
"In fact, the political leadership of the current generation be it Nitish Kumar or Sushil Kumar Modi (deputy CM and BJP leader) or anybody else are welcome to lend their support if they identify with the cause," Kishor said.

Jet Airways COC extends deadline for submitting resolution to March 9

The JetAirways'Committee of Creditors on Tuesday extended the date for submitting a resolution plan to March 9 after Russia-based Far East Development Fund submitted an expression of interest (EoI). The meeting was held to discuss the way forward for the crisis-hit airline as the deadline for bid submissions ended on Monday.
The meeting took place in the backdrop of two suitors showing interest in the grounded airline but failing to submit a resolution plan for bid submissions on Monday. Prudent ARC, one of the potential suitors had sought an additional four weeks’ time to submit a revival proposal for the airline, Business Standard reported, while the South America-based Synergy Group is yet to submit its plan.
Prudent ARC is in talks with investors and has submitted letters of support from its investors. The resolution professional of Jet is seeking more clarity on the same to ascertain that investors are not disqualified under rules from participating in the airline’s revival. Prudent ARC had earlier signed a non-disclosure agreement with the resolution professional of Jet.
In December last year, Synergy Group had sought more time to take a decision on investing in the grounded airline. In December 2019, the UK-based Hinduja Group yet again expressed interest to buy Jet Airways.
ALSO READ: Jet Airways to sell one of its Boeing 777 aircraft to Netherland's KLM
Jet Airways was admitted for insolvency on June 20 last year, after lenders failed to sell the grounded airline. Creditors' claims for the airline are of Rs 36,090 crore, of which Rs 14,640 crore was admitted as on October 20.

Jet Airways (Illustration: Ajay Mohanty)Jet Airways (Illustration: Ajay Mohanty)
The airline has 12 aircraft, including three Boeing 737s, six Boeing 777s, and three Airbus A330s (including one leased to Air Serbia). Of them, the three Boeing 737s are fully-owned by the airline. There is a pending loan of around Rs 250 crore on the remaining planes.
Meanwhile, to settle liquidation in the Netherlands, the airline is selling one of its six Boeing 777 aircraft to KLM to settle pending aircraft loans and meet insolvency resolution expenses.
As reported by Business Standard, the deal value has not been disclosed, but sources said could fetch the airline around $23 million. As a part of the agreement, Dutch airline KLM will purchase a Jet Airways Boeing 777 aircraft, which was seized in Amsterdam last April, along with the grounded airline's marketing data and catering equipment.

Railways roots out illegal software, more Tatkal tickets for passengers now

More Tatkaltickets will be available for passengers now as the railways has weeded out illegal softwares and arrested 60 agents who would use them to block such tickets, a top official said on Tuesday.
Railway Protection Force (RPF) Director General Arun Kumar said the cleansing operation means Tatkal tickets would be available for passengers for hours now, compared to a minute or two earlier after the booking opens.
Officials explained that illegal softwares such as 'ANMS', 'MAC' and 'Jaguar' would bypass the IRCTC's login captcha, booking captcha and bank OTP to generate tickets, while a genuine user has to go through all these processes.
The booking process for a general user usually takes around 2.55 minutes, but those using these softwares could do it in just around 1.48 minutes, they explained.
The railways does not allow agents to book Tatkal tickets and over the past two months, the RPF has nabbed around 60 illegal agents who were booking tickets through these softwares, making it virtually impossible for others to get Tatkal bookings.
"As of today, I can say that not one ticket is being booked through illegal softwares. We have plugged all the issues that we had with the IRCTC website and also nabbed most of those who were top operators of the software," the RPF DG said at a press briefing.
With the arrests, Kumar said most of these illegal softwares, which used to generate business of Rs 50 crore-100 crore annually, have been blocked.
The IRCTC's ticket booking section reflects the impact of the railway action as it shows a jump in the availability of Tatkal tickets across the board.
For example, while on October 26, 2019, Tatkal tickets were available for two minutes for the Magadh Express, on February 10, they were available for over 10 hours since the bookings opened on February 9, 2020 on the train.
Similarly, on the Sampoorna Kranti Express, Tatkal tickets were available for a little over four minutes on November 16, 2019, while on February 8, 2020, there were available for 18 minutes.
On the Swatantrata Senani Express, on November 16, 2019, the Tatkal bookings lasted for just a little over two minutes, while on February 8, it lasted for more than an hour.
"This position has been taken from different zones and we have seen that the Tatkal tickets are available for longer. We are still monitoring other softwares which can be used to book tickets and will move on them as and when they try to book tickets illegally," said Kumar.

Sugar exports picking up even as delays in release of subsidy loom

In some major relief to mills, sugar exports are picking up this season, and opportunities to ship the commodity to newer markets such as Indonesia are being thrown up, with the South-East Asian nation expected to soon open gates for the Indian sweetener. Rising exports, coupled with a sharp decline are useful in clearing the huge glut that industry has been facing the past few years.
Indian SugarSugarMills Association (ISMA) and trade leaders are projecting exports to reach 5 million tonnes this season for which the maximum admissible export quantoty, or MAEQ, has been issued mill-wise by the government.

Exporters say that about 1.6-1.7 million tonnes of sugar have been exported from India and about 3.2-3.3 million tonnes of contracts have been signed. At the start of the seaon in October, the initial realisation for export of raw sugar was Rs 21,000 per tonne against a minimum selling price of Rs 31,000 in the domestic market. But now, exporters are realising Rs 24,000 a tonne. Subsidy declared by the government is Rs 10,480 per tonne.
This means mills in Maharashtra getting Rs 31-32 per kg in local sales, will get an average of Rs 34 a kg on exports after subsidy.
ISMA said in a note quoting reports available with it, “A few sugar mills have surrendered or will surrender to the government the minimum admissible export quantity, or export quota, that they are not in a position to fulfil. Mills that have not been able to even complete 20 per cent of their quota will be withdrawn from the scheme, and the quota will be re-allocated among others that have exported most of their MAEQs and are willing to export beyond their original quotas.”
The government today issued guidelines on the re-allocation of these quotas.
Knowledgeable circles also said Indonesia has finally decided to open sugar imports from India. The discussion was going on between two countries nearly for the past two years. Indonesia was to educe ICUMSA level to allow Indian mills to export raw sugar. It had kept minimum 1,200 ICUMSA but indian mills don’t produce raw sugar of such a high grade. Sources believe that for Indian mills this grade will be brought down to 500-600. A formal announcement is expected soon.
ISMA also said in a note issued today on current production that there is an estimated global deficit of 8-9 million tonnes in the 2019-20 sugar season, and that Thailand’s exports are likely to decline by 3-4 million tonnes due to lower output there. Indian sugar exports may accelerate in the coming months, and might be able to achieve more than 5 million tonnes of MAEQ during the entire season against the six million tonnes of MAEQ.”
However, Praful Vithlani, chairman, All India Sugar Trade Association has raised a concern. Subsidies aren't released on time and come with a lag. This adds to working capital cost. Some mills are yet to receive last year’s subsidies. Besides, low cane availability could force several sugar mills in Maharashtra to stop running within a month, while UP mills may do so by mid-April. Mills will not produce more raw sugar after that. Vithlani says, “The export window is shorter. So all industry representatives must decide to take a risk and produce more raw sugar to export it later.”

Obama or Nixon: Which template would Donald Trump's India visit follow?

While it wasn’t an official visit, the first occupant of the WhiteHouse to land on the shores of India was Ulysses S Grant, and likely not the last with, let’s say a dodgy sense of aesthetics. The 18th President of the United States, Grant served two consecutive terms in office between 1869 and 1877 and was also the Commanding General of the US Army when the Civil War was won. Soon after his term ended, Grant and his wife Julia set forth on a two-and-a-half-year world tour that aimed to project the US as an outward looking power ready to engage with the world. Grant arrived in Mumbai in February 1879 aboard USS Richmond and undertook the customary trip, on elephant back, to the Taj Mahal in Agra, whereupon the Grants thought it beautiful but not more than the Capitol Hill building. Grant met the then Viceroy Robert Lytton in Kolkata and professed admiration for his father Edward Bulwer-Lytton’s novels. In 1982, the San Jose State University instituted the annual, tongue-in-cheek Bulwer-Lytton Fiction Contest to award the worst possible opening lines of a novel as a tribute to Bulwer-Lytton’s “It was a dark stormy night” in his 1830 work Paul Clifford.
It remains to be seen what reluctant traveler Donald J Trump, the 45th President of the US on his two-day visit between February 24-26 makes of the spartan Sabarmati Ashram, the Taj Mahal, or the ‘Namaste, Trump’ rally in Ahmedabad where PM Narendra Modi assures there would be “millions and millions” in attendance.
ALSO READ: Namaste, Trump: A timeline of US Presidents' India visits since Eisenhower
Beyond the bearhugs and protestations of great personal bond between the two leaders, this visit carries a more transactional flavour than other recent presidential trips to India. Unlike in the past, a trade deal between the two occupies centerstage, given the context of Trump’s domestic policy priorities. Trump, the self-professed master of deal making has in recent months dubbed India “tariff king” in a tweet pointing towards India’s propensity to heavily tax US exports such as the high-end Harley Davidson motorcycles. India, instinctively wary of trade deals now has more reason to worry considering the deteriorating health of export sector after sector from gems and jewelry to textiles. India’s inability to take any meaningful advantage in return for greater American access to its domestic markets perhaps explains its lack of enthusiasm on this front. But hey, we’re at least talking business. It wasn’t like this always.

President EisenhowerPrime Minister Jawaharlal Nehru receiving US President Dwight D Eisenhower at Parliament House in 1959, before the President addressed a joint session of Parliament: US Embassy in India
The first-ever visit of a serving US President took 12 years in the making since India’s independence. Dwight D Eisenhower, a decorated war hero was welcomed in India as a “Prince of Peace”. The week-long visit was a big success with Eisenhower travelling in an open car with thousands lining the streets. Despite India fronting the distinctly anti-West Non-Aligned Movement, Nehru, the romantic statesman and Eisenhower, the soldier, seemed to have hit it off. Just as Modi might personally show Trump around the Sabarmati Ashram, Nehru in 1959 offered the Eisenhowers a guided tour of the Taj. Eisenhower was lavish in his praise for India from the get-go. “In fulfilling a desire of many years, I pay in person America’s tribute to Indian people, to their culture, to their progress and to their strength among independent nations,” he declared on arrival, adding that it was a personal pilgrimage of sorts. Not only that, in his address to a special joint session of parliament, Eisenhower spoke about American support to India in the face of any external acts of aggression.
It could be that the two had cultivated more than an acquaintance when Nehru was conferred an honorary doctorate by Columbia University in 1949 when Eisenhower was its president. But matters of commerce hardly figured. Perhaps knowing Nehru’s not-so-charitable views on American wealth, there was no business delegation that accompanied Eisenhower—something that’s an essential part of bilateral head of state visits in the twenty first century.
In rising heat of the Cold War the bonhomie quickly evaporated. Nehru’s reciprocal visit to the US in 1961 during John F Kennedy’s presidency was a testy affair given India’s embrace of Soviet Union.
Richard Nixon’s visit a decade after Eisenhower could charitably be described a disaster. It was more a 22-hour stopover than a full-fledged state visit. You only need to scan the New York Times’ pages on the eve of Nixon’s visit to get a sense of its lack of purpose. So wide was the gulf of distrust between the two nations, and India’s inconsequence in the larger scheme of things that none of the issues you’d normally expect—South Asian regional stability, the Indo-Pakistan arms race, unrest in East Pakistan or the Chinese threat—made the headlines. The touring party was more worried about droppings from Delhi’s trees.
Richard NixonUS President Richard Nixon with Prime Minister Indira Gandhi at Rashtrapati Bhawan in New Delhi, July 31, 1969. Photo: White House
“If Mr Nixon rides under clear skies with the top of his bubblecar down, he will have to beware the fallout from Delhi’s ubiquitous Jamun trees. Their purplish bounty, a semi-sour cherry like fruit with a big, hard pit, splatters indiscriminately on heads of passers by these days,” noted NYT. Not many were surprised when declassified US papers showed the contempt Nixon had for Prime Minster Indira Gandhi. The sentiment was certainly mutual. A year later, she returned the favour by not attending Nixon’s banquet for heads of state on the sidelines on the UN’s 25th anniversary celebrations. Jimmy Carter’s visit in 1978 too wasn’t any more memorable than Nixon’s. Carter said he loved reading the Bhagwat Gita presented to him by Prime Minister Morarji Desai. Carter in return offered Desai the two-volume Journal of American writer Henry Thoreau.
Bill ClintonBill Clinton visited India in 2000 in the backdrop of the Kargil war
From 1947 to 2000, there had only been three US presidential visits to India. Since 2000, counting Trump’s, there would be five. It was perhaps an acknowledgement of India’s growing economic and strategic importance for the US. While Bill Clinton charmed Indians in 2000 in the backdrop of the Kargil war and signalled the end to post-Pokhran nuclear test sanctions, substantive gains were made during George W Bush’s visit in 2006 with signing of the landmark civilian nuclear deal.
Barack Obama is the only US president to make two state visits to India in 2010 and 2015. The second, a hastily arranged special invitation as chief guest on Republic Day. In 2010, with Manmohan Singh as PM, who Obama had referred to as a “Global Guru” at a G20 Summit for his leadership in diffusing the global financial crisis, the expectations were understandably high. Both had a reputation of being cerebral. While Obama’s celebrity quotient having become the first Black President of the US with a landslide win was at its peak, Singh too had won a second term in office with a bigger mandate for the Congress Party. The gush of warmth seemed unstoppable. If Clinton de-hyphenated India and Pakistan, Bush invested plenty of personal political capital on getting the nuclear deal through, Obama followed the path of the predecessors with greater vigour. At least that’s what it looked back in 2010. Moreover, in his address to the joint session of parliament, Obama publicly endorsed India’s candidacy for a permanent seat in the UN Security Council—the first US President to do so.
Barack ObamaPresident Barack Obama and Prime Minister Manmohan Singh chat during the State Dinner at Rashtrapati Bhavan, the presidential palace, in New Dehli, India, Nov. 8, 2010. Photo: White House
By 2015, the Modi bearhug had well and truly arrived on the international diplomatic arena and Obama was one its early recipients. There was to be no parliamentary address during this short visit, but enough time for the man derided as chaiwala to personally make a cup of tea over a televised tete-a-tete in the lawns of the PM’s residence. The infamous monogrammed Modi suit too made an appearance during that visit. Pomp, pageantry and symbolism trumped over substance.
With a decelerating economy that weakens India’s hands on geopolitical issues, would Trump’s visit too go down that route? Maybe, just maybe, unlike the Grants, Ivanka and Donald Trump might think Taj more beautiful than Trump Towers. One wouldn’t bet on it, though.

India Inc seeks cut in import duties to tackle disruptions by coronavirus

Indian business leaders are demanding cuts in import duties on antibiotic drugs, mobile parts and other items as the outbreak of the coronavirus has disrupted supplies from China, government and industry officials said.
The outbreak of the virus in China has hit India's manufacturing and exports of medicines, electronic, textile and chemicals as China is the biggest source of intermediate goods, worth $30 billion a year, according to a presentation by the Confederation of Indian Industries (CII), seen by Reuters.

The confederation will show the presentation on Tuesday when Finance Minister Nirmala Sitharaman meets more than 200 business leaders to assess the impact of the coronavirus and discuss plans to contain the damages.
The government should "remove higher import duties on certain products, primarily imported from China" but available in other countries, the presentation by the CII said.
ALSO READ: Coronavirus in China will cut iPhone production, Apple warns investors
"The government may offer credit with a backstop facility of guarantee for companies which have the capability to start immediate production of items that can feed into domestic consumption," it said.
The coronavirus outbreak, which has now killed more than 1,800 people in China, has disrupted supplies of raw material to other countries.
"India sources about 65-70% of active pharmaceutical ingredients and close to 90% of certain mobile phone parts from China," a presentation by another industry chamber, which represents more than 250,000 companies but did not wish to be identified, said.
Ratings agency Moody's said on Tuesday that the coronavirus outbreak added to pressures on growth in Asia, with the impact felt primarily through trade and tourism, and for some sectors through supply-chain disruptions.
Moody's cut its economic growth forecast for India to 5.4% for 2020 from an earlier estimate of 6.6%, and to 5.8% for 2021 from 6.7%, saying the revisions were also affected by weakening domestic demand.
"Overall, the impact of coronavirus on industry has been moderate so far," said an industry official, who declined to be named, adding the impact could continue for at least two quarters.
ALSO READ: Coronavirus LIVE: Wuhan hospital director dies of COVID-19, 72,436 infected
Daara Patel, secretary general of the Indian Drug Manufacturers Association, which represents over 900 drug producers, said the industry was facing rising prices of raw material and supply shortages.
"The prices of some antibiotics, vitamins and other medicines have gone up by 15-50% following fear of disruption in supply of ingredients," he said.
The pharmaceuticals industry is concerned that stocks of active ingredients for drugs like paracetamol, ibuprofen, could last for 15 days and for two-three months for other drugs, the presentation by the unnamed industry chamber showed.