READ TO LEAD

Terms and conditions of ICICI Bank apply

FE BUREAUNewDelhi, May 15

CONVERTING THE CRISISprecipitated by the Covid-19into a reformopportunity,thegovernment on Fridaymovedto unshackle the agriculturevalue chains by deciding toderegulateessentialcommod-ity trade and introduce aCentral law to ease inter-statefarm trade, effectivelyoverriding the APMCmandisthat have shown impervious-ness tochange.The proposed freeing

inter-state tradewill comple-ment whatever limitedAPMC reforms that some

states have undertaken inrecent months. The reformswill help evacuate the sur-pluses fromproductionzonesto demand zones seamlessly,to the advantage of farmer-producers and players acrossthe agriculture value chain,who have also been promisedsolid support by way ofschemes and outlays tobuild infrastructure andlogistical chains from farm-gate to the retail trade, andeven exports.Scrapping the stock limits

throughtheproposedamend-ment to the Essential Com-modities Act of 1955 willenable free trade (including

exports) of sensitive com-modities like cereals, pulses,oilseeds, onion and potatoand lendmore predictabilityto even export policies,according to analysts.Periodic export curbs on

items ranging from rice tocotton, especially duringthe UPA years, had stokeduncertainties, shifted buyersto competitors anddented India’s imageasa reli-able supplier.Of course, in recent years

under the NDA, such policyrestrictions on exports havebeen curtailed.

ContinuedonPage5

FE BUREAUNewDelhi, May 15

THEGOVERNMENTONFridayannounced an array of steps,includinga`1-lakh-crorefund,to build farm-gate infrastruc-ture to mitigate post-harvestlossesandwastage.FMNirmalaSitharaman also announced`20,000crorefordevelopmentof fisheries,`15,000 crore forbuilding animal husbandryinfra,`13,343-croreschemetovaccinateanimalagainstfoot&mouth disease and `10,000-crore scheme topushupmicrofoodfirmsinthevaluechain.

ContinuedonPage2

INFRASTRUCTURE GETSALEG-UP

LOAN GUARANTEE

FE BUREAUNewDelhi, May 15

THECENTRE IS guaranteeingcollateral-free loansof`3lakhcrore tomicro, small andmedium enterprises(MSMEs), but MSMEminister Nitin Gad-karihascreatedaflut-ter by saying that theCentre, state govern-ments and corporate Indiatogether owe more than`5 lakhcrore toMSMEs.InformationgatheredbyFE

showedthatthecentralgovern-

ment, central PSUs and somestatePSUstogetherowedabout`5lakhcroreinduestoMSMEsand state-runagencies like FCIas on March 31, 2019. Since

then,theCentre’s dues toFCIhaveincreasedfrom`1.3 lakh crore to`2.55lakhcrore.WhileNHAIhadoutstandingdues of `50,000 croreinMarch2019,it is now

caughtinlitigationwithcon-tractors and investors,who areclaiming`78,653croreindues.

ContinuedonPage2

Govt claimsMSMEduescleared, industry disagrees

VIRUSWOESZomato to axe13%jobs,cutwages

ECONOMY, P2MODESTBEGINNING

INTERNATIONAL, P8

SENSEX: 31,097.73 ▼ 25.16 NIFTY: 9,136.85 ▼ 5.90 NIKKEI 225: 20,037.47 ▲ 122.69 HANG SENG: 23,797.47 ▼ 32.27 `/$: 75.58 ▼ 0.01 `/€: 81.74 ▼ 0.04 BRENT: $31.68 ▲ $0.55 GOLD FUTURE: `46,952 ▲ `298

MUMBAI, SATURDAY, MAY 16, 2020

PMpension schemes forvery poor, small tradersoff to a slow start

COVID CRISIS

ADB says coronaviruscould inflict $8.8 trnin global losses

OPINION, P6PRAVESH SHARMA EDITORIAL

Rethink farmexport policies torevive agriculture

Agri reforms take offwithdefanging of EssentialCommoditiesAct, etc,farmers get a good deal

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READ TO LEAD

FE BUREAUNewDelhi, May 15

ZOMATO ON FRIDAY said itwill let go of nearly13%of itsglobal workforce and under-takeanacross-the-boardtem-porarypaycutsfortheremain-derof thestaff starting June.The Gurgaon-based food

deliveryfirmexpectsthereduc-tion in salaries to be imple-mentedforaboutsixmonths.

Lower cuts are being pro-posedforpeoplewithlowerpay,

andhighercuts (up to50%) forpeoplewithhighersalaries,saidfounder and CEO DeepinderGoyalinanotetoemployees.Forthe employees who have losttheir jobs, Zomato said it willretainthemat50%salaryforthenextsixmonthsbesidesextend-ing otherbenefits to them likehealthinsurancecoverandout-placementsupport.

ContinuedonPage2

BLOOMBERGNewDelhi, May 15

THE CENTRE IS MULLING anincreaseintheborrowinglimitfor states of asmuch as 2 per-centage points for the currentfinancial year,people familiarwith themattersaid.The increasewouldbe sub-

ject to statesmeeting certainmilestones such as imple-mentinglabour,agricultureorpowerreforms.The increase is likely to be

announced by financeminis-terNirmalaSitharamanaspartof the break-up of the `20-lakhcroreeconomicpackage.Statesarecallingforbudget

rules to be relaxed, includingeasing a fiscal deficit cap of3% of state’s gross domesticproduct and for the centralbank to purchase their bonds,eitherinthemarketordirectlyfromthegovernment.A finance ministry

spokespersonwasnotimmedi-atelyavailable forcomment.

● 2 PERCENTAGE PTS

Centremulls raisingborrowinglimit ofstates

● ONSET DELAYED

PRESSTRUSTOF INDIANewDelhi, May 15

THESOUTHWESTMONSOONis likelytohitKeralaonJune5,adelay of four days comparedwith its normal onset date,theIMD saidonFriday.The onset ofmonsoonover

Kerala marks the start of thefour-monthlongrainfallseasonfrom June to September. The

normal date for monsoonarrivalinKeralaisJune1.“The onset of southwest

monsoonoverKeralaislikelytobeslightlydelayed.Thisyearitislikely to be on June 5 with amodel errorof plus orminus 4days,”theIMDsaid.Monsoonislikely to arrive over theAndaman&Nicobar islandsbyMay16,sixdaysbefore its newonsetdateofMay22.

Southwestmonsoon likelyto hit Kerala 4days late

‘MAKE INAMERICA’

LALITKJHAWashington,May15

PRESIDENTDonaldTrumphasthreatenedtoslapnewtaxesonAmericancompanieslikeAppletodissuade themfrommovingtheirmanufacturingbasesfromChinatocountrieslikeIndiaandIreland instead of theUS amidtheCovid-19pandemic.In an interview with Fox

BusinessNews,Trumpsaidthattaxationwasanincentiveforthecompanies to returnmanufac-turing bases to the US.“Applesaidnowthey’re going to go toIndia.They’regoing todosomeproduction in India awayfromChina,”hewasasked.“Iftheydo,youknow,wegaveApplea littlebit of a break because they’recompetingwithacompanythatwasapartofatradedealthatwemade.So,itwasalittlebitunfairtoApple,butwe’renotallowingthisanymore,hesaid.“You know ifwewanted to

putupourownborderlikeothercountriesdo tous,Applewould

build100%of theirproduct intheUS.That’s theway itwouldwork,”headded.According to theNewYork

Post,Apple is looking to shift asignificant portion of its pro-ductiontoIndiafromChina.“One incentive,frankly,is to

charge tax for themwhen theymakeproductsoutside.Wedon'thavetodomuchforthem.Theyhavetodoitforus,”Trumpsaid.He said he wants to bring

manufacturingback to theUS.“...We shouldn’t have supplychains.Weshouldhavethemallin theUS.Wehave the compa-nies todo it.And ifwedon’t,wecandothat,”headded. —PTI

Apple’s India plansmaybe hit as Trumpthreatens new taxes

The govtdeservescomplimentsfor turning acrisis into an

opportunity for reformingagri-marketing systems. Ifimplemented in earnest,thesewill unleash animalspirits across the agri valuechain and help farmersaugment their incomes.—ASHOKGULATI,AGRICULTURE ECONOMIST

“The propo-sed lawwillhelp seamlessmovement offarmproduce

not only inter-state, butalsowithin states.Any onewith central licence canbuy and sell anywhere."—ASHOK DALWAI, CHAIRMAN,COMMITTEE ON DOUBLINGFARMERS' INCOME

Sweeping reforms across agri value chainCentre bites the bullet,whittles downECAct to ease inter-state farm trade

FE BUREAUNewDelhi/Mumbai/Pune,Hyderabad/Kochi/Kolkata,May 15

PLAYERS IN THE food pro-cessingvalue chain got a shotin the armas thegovernmenton Friday allowed them tokeep stocks sans any limitssubject to their capacitiesand export orders. It alsounveiled a clutch of schemesaimed at boosting the infra-structure facilities and logis-tics chains across the valuechain from farm-gate toretailing and exports.With the proposed easing

of inter-state trade in farmgoods, food processors,aggregators and retailers cannow buy directly from thefarmers without being ham-strung by the intransigentAPMCs and cut costs as they

won’thavetopaytheassortedmandi taxes and arhatiyas’commissions.Many food processors and

other investors in theallied sectors may now beprompted to enter contractfarming, as the governmenthasvirtuallygiven legal back-ing to suchventures.Government-assisted

investments to promote foodclusters, processing develop-ment assistance at farm-gateandsupportingFPOsforpost-harvest infrastructurewill allhelp reduce wastage andimprove the overall produc-tivity of the food supplychains, industry participantssaid. Themovewill beofpar-ticularbenefit to thehorticul-ture sector, consisting offruits andvegetables.

ContinuedonPage2

Govt's arbitration guidelinesa non-starter four years later

Zomato founder&CEODeepinderGoyal

FE BUREAUMumbai, May 15

DESPITETHE government’snew arbitration guidelinesunveiledfouryearsago,com-panies still find a significantamount of money stuck invariousstagesofarbitration.HCC, for instance, has

`6,668 crore of arbitrationawards, of which the com-pany has received `2,617crore,as onDecember2019,whilealargerportionof60%oftheseduesat`4,051crore,stillremainstobereceivedbythecompany.

ContinuedonPage2

CMA Balwinder SinghPresident

The Institute of Cost Accountants of India

CMA Biswarup BasuVice President

The Institute of Cost Accountants of India

ICAI welcomesmajor stimulus package for MSMEs

announced byShri Narendra Modi

Hon'ble Prime Minister of Indiaand

Smt. Nirmala SitharamanHon'ble Finance Minister, GoI

CMA MSME Helpdesk

ICAI being partner to Nation Buildingannounces setting up of CMA MSME

Helpdesk across India to support MSMEs

Central Helpdesk: msme@icmai.in

USPresidentDonaldTrump

Centre to amendECAct toscrap stock limits andmostlyenable free trade

Toenact a law topracticallybypassAPMCAct, to ensurefreemovementof farmgoods

Toworkout a framework tohelp farmersengagewithbulk consumers

`500crtopreventdistresssalesbyfarmers

"The decision to allowprocessors a choice tobuy the products directlywill help them reducecosts as theywill not pay

mandi and other fees,whichwillhelp in lowering the cost ofprocessed products."—SAGAR KURADE, FORMER PRESIDENT,ALL INDIAFOOD PROCESSORS'ASSOCIATION

"The reformswillencourage investmentsin food processing andtogetherwith the infras-tructure outlayswill

contribute in shaping a competitiveagri value chain, reducewastages andraise farmer incomes."—SANJIVPURI,CHAIRMAN, ITC

`10,000crto formalisemicrofoodenterprises

`500crfor beekeeping, tohelp 2 lakhbeekeepers

`4,000 crtopromoteherbalcultivation

Stock limits on foodprocessors lifted; ‘contract farming’legal

financing facilityfor farm-gate

infra,Nabardtoraise funds

`20,000crfor fisheries,5.5milliontoget jobs

`13,343crtocontrol foot&mouthdiseaseincattle

foranimalhusbandryinfra fund

`1-lakh-cr

`15,000 cr

Infraboost to empowersmall farmers,aidmarket access&pricediscovery

Zomato toaxe 13% jobs,cutwagesSOME IMPACTED employees,however,work with the firmthroughmanpower agenciesandarenotdirectlyon itspay-roll,Zomatoclarified.Thecom-pany will help the agenciessupport these employeeswithtwomonthsof severance.“Previously allocated

ESOPs will continue to vestduring this period of six

months,asallthesepeoplewillremain on our payroll withreduced pay,” Goyal said. Allbenefits from Zomato willlapse as soon as the impactedemployees findanotherjob,orafter sixmonths,whichever isearlier,the firmsaid.The coronavirus pandemic

has dealt a severe blow to theonline food delivery businessas consumers massively cutdownonintakeofoutsidefoodand opted for home-cookedmeals.Current ordervolumesforZomatoareatmerely30%-

35% of what they used to beduringpre-Covid times.Whileashift inconsumerpreferencefor hygiene over conveniencecontributed towards thecrushing volumes, corporateIndia’s move to work fromhome also hammered busi-nesses. Office-goers form amajor chunk of food aggrega-tors’ customer base. Opera-tional restrictions in variouscities further added to thewoes.Zomato is present in 24markets but India is its pri-maryfooddeliverymarket.

“A large number of restau-rants have already shut downpermanently, and we knowthat this is just the tip of theiceberg.Iexpectthenumberofrestaurants(acrossmarkets)toshrink by 25-40% over thenext6-12months,”Goyalsaid.“Weneedtomakesurethatwepreserve asmuch cash as pos-sible to weather the storm ifthebusinessenvironmentgetsworse, or continues to be thesame for the rest of theyearormore,”Goyal added.InaninterviewtoFEearlier

this week, Mohit Sardana,COO, food delivery at Zomatosaid the company will makesustainable investments tofuel the growth of grocerydelivery.The grocery segmentalreadymakes up nearly 15%oftheordervolumesgeneratedbythe firm's deliverybusinessand is expected to grow veryrapidly.Thestrategygoingforward

would be to focus on buildingthe“newnormal”.“The idea isto make a complete shifttowards being a transactionsfirst company, focusing heav-ily on a small number of largemarket opportunities in thefoodvaluechain,”Goyal said.Zomato said it has decided

to make partial or full workfrom home a permanent fea-tureof“our lives”.

Govt’s arbitrationguidelines anon-starter fouryears laterIN 2016, the constructionindustryhadbreathedasighofrelief when the governmentapproved the new arbitrationguidelines, which was sup-posed to help in quicker reso-lution of claims pending inarbitrationforyears.However,the progress on the same hasbeenslow.Under the newnorms, the

government had said that75% of the arbitrationamounts will be releasedagainstmarginfreeguaranteein situations where awardshavebeengivenbuthavebeencontested by the concernedauthorities.Also, all the arbi-tration cases will be resolvedwithinayear.Four years ago, the total

amount under arbitration forthe industry stood at at Rs 1lakh crore. Nearly Rs 70,000crorewas understood to havebeen disclosed by 28 publicsector units as contingent lia-bilitiesintheirAnnualReportsfor2014--2015.

Infra boost toempower smallfarmers, aidmarket access &price discoveryTHE HUGE investment com-mitments in agri and alliedsectors have the potential tohave ahugemultiplier impactand contribute towardsenhancing farmers’income intheyearsahead,analysts felt.TheCentrewill anchorRs1

lakh crore financing for agri-cultureinfrastructureprojectsat farm-gate and aggregationpoints such as Primary Agri-culturalCooperativeSocieties,Farmers Producer Organisa-tions, Agriculture entrepre-neurs and start-ups, Sithara-mansaid.“The focus on aggregation

pointswill help young Indianstart-ups, private players andagri-preneurs to build digitalandagri-techdrivenplatformsandsolutionssothatthesmallfarmer can sell his producewith minimum hassle andmaximumprofits,”saidAmithAgarwal, co-founder & CEO,AgriBazaar.The government will

launch PradhanMantri Mat-syaSampadaYojana (PMMSY)for integrated, sustainable,inclusive development ofmarine and inland fisheries.Itwill provide Rs 11,000 croreforactivities inmarine,inlandfisheries and aquaculture andRs 9,000 crore for buildingfishing harbours, cold chain,markets,etc.Therewill also beprovisionsofgivingsupporttofishermen during the periodfishing is not permitted.“Thisschemewill lead to additionalfish production of 70 lakhtonnesoverfiveyears,employ-ment to over 55 lakh personsanddouble theexports toRs1lakhcrore,”theministersaid.For animal husbandry

infrastructure,adevelopmentfund of `15,000 crorewill beset up to support privateinvestment in dairy process-ing,value addition and cattlefeedinfrastructure.Incentiveswillalsobegivenforestablish-ing plants for export of nicheproducts.The national animal dis-

ease control programme forfootandmouthdisease (FMD)andbrucellosiswith total out-layofRs13,343crore isaimedatensuring100%vaccinationof cattle, buffalo, sheep, goatand pig population (total 53croreanimals).Tohelptwolakhmicrofood

enterpriseswhoneedtechnicalupgradation to attain FSSAIfood standards, build brandsand marketing, a Rs 10,000croreschemewillbelaunched.“The focus will be onwomenand SC/ST owned units andthose in aspirational districtsand a cluster based approach(e.g. mango in UP, tomato inKarnataka, chilli in AndhraPradesh,orange inMaharash-tra) will be followed,”Sithara-mansaid.Mohit Singla, chairman of

the Trade Promotion Councilof India, said the amendmentto theECActwill help insulatethefarmersfrompricemanip-ulation by different forces."The prices will now be gov-ernedbymarket demandonlyandinthelongtermbringbet-ter value to the farmer," headded.

Stock limits onfood processorslifted,‘contractfarming’ legal“AMENDMENTS TO the ECAct, reforms in agriculturalmarketingandriskmitigationthroughpredictablepriceswillempower farmers, strengthenagri-food processing linkagesand enable demand-drivenvalue added agriculture. Thereformswillencourageinvest-ments in food processing andtogetherwith the infrastruc-ture outlayswill contribute inshaping a competitive agrivalue chain, reducewastagesandraisefarmerincomes,”ITCchairmanSanjivPuri said.AccordingtoSagarKurade,

former president of All IndiaFood Processors'Association,considering the seasonality ofagriculture produce, the foodprocessorswill nowbe able tostock the adequate quantityrequired for processingwith-out fear of breaching stock-holding limits.“UnlikeEuropeorAustralia,most of the pro-cessing units in India havelower capacities in agri andhorticultureproduceandtheywould not like to blockwork-ing capital by stocking morethantheiractualrequirement,”he said.Having scaled a peak of

almost $43 billion in FY14,India'sfarmexports,includingthat of processed items,haveremained under pressure inrecentyearsandstoodat$38.5billion in FY19, according todata compiled by the agriX-changeportalofAPEDA.IntheApril-January period of FY20,suchexportswitnessedan8%

slide to almost $29 billion, farexceeding the contraction onoverall merchandise exports.The fall in exports will onlyaccentuate in this fiscaldue totheCovid-19outbreak.YogeshThorat,MD,Maha-

rashtraFederationofFoodPro-ducer Companies (MahaFPC),said: “The steps taken by thefinanceministerwillhelpfoodprocessing units address theissue of inventory. Earlierinventorywas stocked by theunits asperneeds.Theseunitsmay enter the warehousingspaceaswell.Earlierplayers inwarehousing were differentand now there could bemoreplayers in this space.”Until now, onion, tomato

and potatowere the three topcommoditiesandmosttradersfocusedon these.Howeverthetransport subsidy for othervegetableswillbeaboosttotheprocessingsector.“Welookfor-ward to an announcementregarding reduction in tax onconsumption and GST ratethat will in-turn drive con-sumption.Also,we hope thatinput tax credit is restored asthis will help ensure the suc-cess of the financeminister'sinitiative in streamlining andsupporting the developmentof infrastructure in the foodsupply chain,”Elior India CEO&MDSanjayKumarsaid.AgriBazaar co-founder &

CEOAmithAgarwal said:“Thefocus on aggregation pointswill help young Indian start-ups, private players and agri-preneurs to build digital andagri-techdrivenplatformsandsolutions so that the smallfarmer can sell his producewith minimum hassle andmaximum profits.Alongsidefarmgateinfrastructure,whichwill be thehardware,aggrega-torswill provide the softwareto drive efficiency both interms of price and wastagelosses.”P Chandrashekhara

Reddy,V-P,sales&marketing,Gemini Edibles & Fats India,said, “We source all our rawmaterials fromforeign coun-tries. For many years,imported oils are exemptedfrom essential commoditiesstock limits. However, forindustries dependent ondomestic edible oils, this is agood move, it liberates ourindustry fromessential com-modities licence and stocklimits. Companies would beable to keep adequate stocksas per the market demand.Consumers, industry andfarmers should benefit withthis legislation change.”

Govt claimsMSMEduescleared, industrydisagreesSTATE POWER distributioncompanies (discoms), whichoweddues of `60,000 crore topower producers in March2019,owethem`94,000croreasonMarch31,2020.Ontheirpart, state transport corpora-tionsowedseveralthousandsofcrores to their suppliers like oilmarketingcompanies.According to a Niti Aayog

assessment, the Central gov-ernment departments them-selves had dues of Rs 1.5 lakhcrore to the industry at end-March 2019. These depart-ments also owe a lot ofmoneytoserviceproviders.However,expendituresecre-

taryTVSomanathan on Fridaysaid thedues from26topCen-tralPSUstoMSMEswasonlyRs773croreasonMarch31,2020astheyhavebeenclearingduessincethegovernmentlauncheda special drive in September2019. Includingdefenceestab-lishments, railways and otherdepartmental undertakings,the dues from the Centre anddepartmental undertakingswere less thanRs10,000 croretill recently,he said.“We haveverified the vast majority ofthese dues are not overdue astheyarewithin45daysofwork-ing capital cycle prescribed inthe MSME Act,” Somanathanadded.Formernational presi-dentofAllIndiaManufacturersOrganisationKERaghunathansaid the governmentmight bereferring to the cases reportedbyMSMESamadhaanwebsite,an online delayed paymentmonitoring system.Accordingto the website, applicationsworth`10,903crorewere filedagainst Central governmentand its undertakings, amongothers.Raghunathansaidmostof theMSMEs have not takenthis route for fearof repercus-sionstotheirbusiness.The total dues to MSME

wereapproximatelyRs5.5lakhcrore as on March 31, 2020 -distributedintheratioof40:60between the Central govern-ment (including PSUs) andstates (including state PSUs),Raghunathan said.“In the 40%Central dues, I

feel 5%on tax refunds,about10%Centralministryduesand25% from Central PSUs. Instates’ 60%, dues from statedepartmentswill be 45%andtheir undertakings 15%,”Raghunathansaid.

EconomySATURDAY, MAY 16, 2020

FINANCIALEXPRESS2

●COMBATING COVID

NileshShahhailsgovt intention,sayspolicyexecutionmust follow

From the Front Page

Labour law:TUsto go on strikeon May 22TENCENTRALTRADEunionsonFridaygaveacall foranationwidestrikeonMay22toprotestagainst the suspensionoflabourlawsbysomestatesduring the lockdown.

Corona-affectedmunicipalareasTHIRTYMUNICIPALAREASaccount for79%ofIndia's coronavirusinfectioncaseload,theGoMonCovid-19wasinformedonFriday,as thedeath toll in thecountryrose to2,649andthe totaltallyof cases climbedtomore than85,000.

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DelayedEPFOpayment byfirmsnot to attract penalty

HDFC Asset Management Company LimitedA Joint Venture with Standard Life Investments

CIN: L65991MH1999PLC123027

Registered Office: HDFC House, 2nd Floor, H.T. Parekh Marg, 165-166, Backbay Reclamation,Churchgate, Mumbai - 400 020. Phone: 022 66316333 • Toll Free Nos: 1800-3010-6767 / 1800-419-7676

Fax: 022 22821144 • e-mail: cliser@hdfcfund.com • Visit us at: www.hdfcfund.com

NOTICENOTICE is hereby given that HDFC Trustee Company Limited, the Trustee to HDFC Mutual Fund(“the Fund”) has approved the declaration of dividend in HDFC Arbitrage Fund, an Open-endedScheme investing in Arbitrage Opportunities (“the Scheme”) and fixed Thursday, May 21, 2020 (or theimmediately following Business Day, if that day is not a Business Day) as the Record Date for the same:Name of the Scheme / Plan / Option Amount of

Dividend(` per unit)#

Face Value(` per unit)

NAV as onMay 14, 2020(` per unit)

HDFC Arbitrage Fund - Wholesale Plan -Regular Plan - Normal Dividend Option(Payout and Reinvestment)

0.040

10.00

10.342

HDFC Arbitrage Fund - Wholesale Plan -Direct Plan - Normal Dividend Option(Payout and Reinvestment)

0.045 10.736

HDFC Arbitrage Fund - Wholesale Plan -Regular Plan - Monthly Dividend Option(Payout and Reinvestment)

0.040 10.809

HDFC Arbitrage Fund - Wholesale Plan -Direct Plan - Monthly Dividend Option(Payout and Reinvestment)

0.045 10.488

# The dividend will be subject to the availability of distributable surplus and may be lower, dependingon the distributable surplus available on the Record Date.

Pursuant to payment of dividend, the NAV of the Dividend Option(s) of the aboveScheme would fall to the extent of payout and statutory levy, if any.Income distribution will be done / Dividend will be paid, net of tax deducted at source (TDS), asapplicable, to those Unit holders / Beneficial Owners whose names appear in the register of Unit holdersmaintained by the Mutual Fund / statement of beneficial ownership maintained by the Depositories, asapplicable, under the Dividend Option(s) of the aforesaid Scheme as on the Record Date.Unitholders who have opted to receive dividend by way of physical instruments may note that the samewould be dispatched once the courier / postal services resume and that due to the unprecedentedCOVID-19 situation as also depending on availability of courier / postal services, there may be a delayin delivery of dividend payment instruments.With regard to Unit holders of the aforesaid Scheme who have opted for Reinvestment facility underthe Dividend Option(s), the dividend due will be reinvested net of TDS, by allotting Units for the Incomedistribution / Dividend amount at the prevailing ex-dividend NAV per Unit on the Record Date.

For HDFC Asset Management Company Limited

Place : Mumbai Sd/-Date : May 15, 2020 Authorized SignatoryMUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEMERELATED DOCUMENTS CAREFULLY.

SURYASARATHI RAYNewDelhi, May 15

INANOTHERMAJOR reprievefor establishments registeredwiththeEmployees’ProvidentFundOrganisation(EPFO)andhaving 100 ormore employ-ees,thegovernmentonFridaysaidtheirdeferredremittancesof statutory contributionstowards the Employees Provi-dentFund(EPF)forthreewagemonths starting March willnotattractpenalty.Depending on the dura-

tion, delayed payment nowattracts penalty of between5% and 25%on the shortfallof payment of dues.However,the delayalso attracts interestat the rateof12%perannum,whichwill continue to attractin case of delayed payment.Including interest and penaldamages, the EPFO had col-

lected `52.40 crore in 2017-18fromemployers.In an official statement on

Friday, the government saiddue to prolonged lockdown tocontrolthespreadofCovid-19and other disruptions due tothepandemic,establishmentscovered under EPF&MPAct,1952 are distressed andunable to function normallyand pay the statutory contri-butionsontime.

“Considering thedifficultyfaced by establishments intimely deposit of contribu-tions or administrativechargesdueforanyperioddur-ing lockdown, the EPFO hasdecidedthatsuchdelaysduetooperational or economic rea-sons shall not be treated asdefault and penal damagesshould not be levied for suchdelay,”the statement said.Central provident fund

commissioner Sunil Barthwalsaid, “As of now, the penaltyreprieve is for three wagemonths – March, April andMay.However,theinterestpartwillremain.Interestisleviedatjust1%permonth,”he said.Considering the difficulty

being faced by employers, thegovernment had earlier sepa-rated submission ofmonthlyelectronicchallan-cum-return(ECR) from depositing of thestatutory dues.The intentionwas to provide liquidity in thehands of the employers.How-ever, establishments arerequiredtocontinuefilingECRwithin due date – the first 15daysof thenextmonth.The relaxation shall ease

compliance norms for 6.5lakhs EPF-covered establish-mentsandsavethemfromlia-bilityonaccountofpenaldam-ages,the statement said.

❝❝ ❝❝

POWERTARIFFRK Singh, Union power ministerThe tariff policy,which hadbeen sent to theCabinet,was referred to an informal GoM.ThatGoMhas cleared it. So,wepropose to take it tothe next Cabinet (meeting)....and hopefully itshould be therewithin amonth.

CHIRAGMADIAMumbai, May 15

KOTAK MAHINDRA AMCmanagingdirectorNileshShahsaidwhile the intentionof thegovernment has been right inframing policies to fight theimpact of Covid-19, thesemustbefollowedbyexecution.SpeakingatTheIndianExpressE-xplained, Shah said: “Itshouldnothappenliketherealestate fund, which weannounced last year, or likepartial credit guaranteeschemes,which did not resultin much traction on theground because of variousrulesandregulations.Onthestockmarkets,Shah

said,“Obviously,markets areforwardlooking.Theywillbot-tom outway before the econ-omy actually bottoms out.Markets will move from pes-simismtooptimismand fromfeartohopethatswingvolatil-itywill continue.”“Equitymarkets are bound

tobevolatileinnatureandthatis the reason they give betterreturns in longer term thanotherasset classes,”Shahsaid.He said the package for

MSMEs is a good one as itallowedbanks to lendwithoutworryingaboutnon-perform-ing assets, and this movewillgo a long way in improvingcredit flows.“There are threeways to contain thisdamage–oneisattractingforeigndirectinvestments, second is (by)providing fiscal stimulus andthe third is (by) providing

monetary stimulus. Thesethree steps together, alongwith medical solution, canreduce the damage to theIndianeconomy.”Shahestimatesthattheloss

of output during the 47-daylockdowntobe$190billionat50%capacityutilisation.Indiacan save $40-45 billion dollarinoil importsbill iftheypersistatcurrentlevel,andlooktosaveanother $20 billion by replac-ing‘Made inChina'goodswith‘Made inIndia’goods.“Economy is not power,

which you can switch on andswitchoff.So,therewillbecostof restarting the economyaddedtothisnumber,”hesaid,adding thatmarkets could seea‘V-shaped'recovery if amed-ical solution emerges quicklyand if the fiscal andmonetarystimulusislargeenough.How-ever, the recoverywould be ‘L’shaped if amedical solution isdelayed and fiscal andmone-tary stimulus is lower thanexpected.Shah, a part-timemember

ofthePM’sEconomicAdvisoryCouncil, is of the view thatIndia can be a big beneficiaryof supply chain disruptions inChinabecauseofthetradewar,followed by the pandemic.Hesaid,“Today is the best time asthe world is suspicious ofChina. While we have beenconsidered positively as wehavebeen supplyinghydroxy-chloroquine tablets to theworld andGodwilling,wewillsupply vaccines from SerumInstitute, Pune, to theworld.Now, we must encash thisgoodwill in establishing amanufacturing base. We aretoday the back-office to theworld.Why can’t we becomethe factoryto theworld?”India isn't theonlycountry

that is looking to attractinvestmentsfromglobalcom-panies looking at an alterna-tive to China, as other coun-tries have better policy,environment and infrastruc-ture. But none of them has alarge domestic market likeIndia,he said.

PMpensionplans forverypoor,small traders get off to a slowstartSURYASARATHI RAYNewDelhi, May 15

THETWOOLD-AGE pensionschemes launched last year —one for the poorest of the poornamely street vendors, rick-shaw pullers and rag pickersandtheotherforself-employedand small traders—have hadonlymodeststarts.According to official data,

only43.88 lakhpeoplehave sofar joined the PradhanMantriShram-Yogi Maandhan(PMSYM) scheme, meant for

the lowest strataof the society.The scheme was launched inFebruary lastyearwitha targetto cover 10 crorepeopleinfiveyears.Similarly, till

now, only 39,072‘vyaparis’ haveenrolled under thePradhan MantriKaram YogiMaandhanScheme (PMKYMS), rolled outon September 12, 2019. Thisschemehasanambitioustargetto get three crore retail traders

and shopkeepers enrolled,although no timeframe hasbeen set.Thebudgetaryalloca-

tionforPMSYMforFY21is`500crore,while that for thePMKYMS is `180crore.The traders’scheme is limitedto those withannualturnoverupto `1.5 crore and a

monthlypension of `3,000 isofferedonattaining the retire-mentage.Those belong to the entry

agegroupof18-40yearsareeli-giblefortheschemes.Thesearevoluntary and contributoryschemes.Now,with the lockdown in

force sinceMarch 25, itwouldbe practically impossible forthese small traders and mar-ginal workers to make theirmonthly contribution, anddefaults are bound to happen.But,the governmenthas so farremained silent onwaiving offcontributions.Officials at thelabourministrysaidthemattercanbelookedintoatalaterdate.

Exports plunge60.28% inAprilEXPORTSCONTRACTEDBYarecord 60.28% to $10.36 bil-lion in April amid the coron-avirus lockdown,official datashowedonFriday.Imports,too,tumbled 58.65% to $17.12billion inApril from$41.4bil-lion in the same month lastyear, according to the data bythe commerce and industryministry.Thetradedeficitnar-rowed to $6.76 billion.Tradedeficit in April 2019 stood at$15.33billion. PTI

Nilesh Shah

CONTRARY TO EXPECTA-TIONS,wheat procurement intheongoingseasonmaynotex-ceedtherecordof38.15milliontonne(MT)achievedduringthecorrespondingseason in2012-13seasonduetoadelayedstartofpurchaseandlowerarrivalsofthekeyrabicerealcrop.Thishas,however,comeas a blessing indisguise for the FoodCorpora-tionof India,whichisgrapplingwithhighstocks.The FCI wheat stocks are

more than the annual require-mentofthegrainundertheNa-tionalFoodSecurityAct(NFSA).

The rabi procurement ofwheat may be 36.5-37 MT in2020-21,against34.13MTlastyear,mainlydue toanexpectedshortfallonUPandHaryana.UP,country’s largest wheat pro-ducer,has so farbought1.4MTagainst targeted 5.5 MT and

may end up at below 3.5 MT.Similarly, Haryana had esti-mated to buy 9.5 MT, but hasbeen able to purchase only6.4MTand it canatbestmopup1MTmorebytheendof the sea-son,sourcessaid.Thefoodmin-istryhasbeenmaintainingthat

targeted procurement of 40.7MTwillbeachievedsincetheFCIwasabletobuyhalfofthetargetinfirst22days.Officialpurchasestarted fromApril 15, againstthenormal schedule fromApril1duetoinitiallockdownrestric-tions. —FE BUREAU

GEETANAIRPune,May 15

INABIGrelieftotheautomotiveindustry,theMaharashtrastategovernmenthaspermitted in-dustries in thePimpri-Chinch-wadandBhosariindustrialareasto reopen and start operationsdespitebeinginaredzone.Thereareover4,000automotive,autocomponent and engineeringcompaniesalongwith theiran-cillaries in this area includingTataMotors,BajajAuto(Akurdi),ForceMotors,Thermax,ForbesMashallandAtlasCopco,amongothers.According to a Crisil report

on the impact of the lockdownfor component makers andOEMs, Pune was among thenerve centre forOEMsandex-tending the lockdownhereanyfurtherwouldhurtalmostallthevehiclesegments.Thisisamajorcentrefortwo-wheelersandpas-sengervehicles (PVs) to sourcecastpartssuchascylinderheads,cylinderblocks,crankcases,pis-tonringsandenginevalves.Elec-tricalandelectronicpartsforPVsaremainly sourced fromPuneanditisamajorsourcingclusterforcompaniesinDelh-NCR,Kar-nataka and Tamil Nadu, apartfromotherunits inMaharash-tra,theCrisilreporthadsaid.As thenumberof Covid-19

positive cases in the Pimpri-Chinchwad area was not highandcompanies therewantedtoresume operations, the stategovernmenthas allowed themto start,ShravanHardikar,mu-

nicipal commissioner of thePimpri-ChinchwadMunicipalCorporation (PCMC) said.Theywere takingamicro-zoningap-proachinthePCMCareabutin-dustrywouldhave to followthestrictprotocolslaiddownforre-suming operations, Hardikarsaid. As Pune city had a lot ofcases and lot of containmentzones,peopleresidingtherewillnot be permitted to travel andwork inPCMC,Hardikaradded.Unitswill beallowed tooperatefrom7amto7pm.SadashivSurvase,jointdirec-

tor,industriesdepartment,Ma-harashtra state government,saidthroughasimpleself-certi-fiedpermissionprocess on theMIDCportal companies couldstartoperationsandseekvehiclepasses tomovepeople andma-terial.Survase said companiescouldutilise only33%of theirworkforceandonlythoseresid-inginthePCMCareasbeallowedtowork.ThoselivingbeyondthePCMC limits would not be al-lowed entry into PCMC areas,Survase said.Companieswouldalsohave to ferrytheiremploy-

ees in a dedicated transportfromhomedirectlytothework-place and no two-wheelerswouldbepermitted.Inter-dis-trictmovementof labourtoo isnotallowed,hesaid.While industry welcomed

the opening of the industry inPCMC, they found the condi-tions tough to comply.PradeepBhargava, president of theMahratta Chamber of Com-merce,Industries andAgricul-ture, pointed out that peoplefromacrossPuneweretravellingto Chakan,Talegaon and Ran-jangaon industrial estate freelyand there was no reason whythey should not be allowed toworkinthePCMCareas.Also,theownersof thesecompaniesandall thetopmanagementmostlystayedoutsidePCMCwhiletheirfactories were located in thePCMCregion,so thiswasgoingtobedifficult tomanage,Bhar-gavapointed.Government officials sug-

gested that they could tem-porarilymove to thePCMCre-gion and manage till thesituationimproved.

‘Pimpri-Chinchwadindustries toreopen’

●MAHARELIEFTOAUTO SECTOR

ECONOMY 3FINANCIALEXPRESS

WWW.FINANCIALEXPRESS.COM SATURDAY, MAY 16, 2020

Regd Office : Bayer House, Central Avenue,Hiranandani Estate, Thane(West)-400607.Tel No: 022-2531 1234; Fax No: 022-2545 5063Website: www.bayer.in; Email: ir_bcsl@bayer.com

BAYER CROPSCIENCE LIMITEDCIN: L24210MH1958PLC011173

Notice is hereby given pursuant to Regulation 29 read with Regulation 47(1)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 (“Regulations”) that a meeting of the Board of Directors of the Companywill be held on Friday, May 22, 2020, inter alia, to consider and approve theAudited Financial Results of the Company for the financial year ended onMarch 31, 2020 and to consider recommendation of final dividend, if any.

Further in line with Regulation 47(2) of the aforesaid Regulations, this noticeis also available on the website of:a) The Company at www.bayer.inb) The BSE Limited at www.bseindia.com

NOTICE

Place : ThaneDate : May 16, 2020

Sd/-Nikunjkumar Savaliya

Company Secretary& Compliance Officer

Whilst care is taken prior toacceptance of advertising copy,it is not possible to verify itscontents. The Indian Express (P.)Limited cannot be heldresponsible for such contents,nor for any loss or damageincurred as a result oftransactions with companies,associations or individualsadvertising in its newspapers orPublications. We thereforerecommend that readers makenecessary inquiries beforesending any monies or enteringinto any agreements withadvertisers or otherwise actingon an advertisement in anymanner whatsoever.

''IMPORTANT''

BUSINESS OFFERS

LAND FORSALE

There are over 4,000automotive, autocomponent and

engineering cos alongwiththeir ancillaries in this areaincludingTataMotors, Bajaj

Auto (Akurdi), ForceMotors,Thermax, ForbesMashall andAtlas Copco

World Bank approves $1-bn loan to support India’s fightagainstCovid-19:TheWorldBankonFridayapproveda$1billionloantosupportIndia’seffortsforprovidingsocialassistancetothepoorandvulnerablehouseholds,severelyimpactedbytheCovid-19pandemic.The‘AcceleratingIndia'sCovid-19SocialProtectionRe-sponseProgramme’willsupportthegovernment’seffortstowardsamoreconsolidateddeliveryplatform–accessibletobothruralandurbanpopulationsacrossstateboundaries.ThistakesthetotalcommitmentfromtheWorldBanktowards

emergencyCovid-19responseinIndiato$2billion.A$1billionsupportwasannouncedlastmonthtowardsimme-

diatesupporttoIndia'shealthsector. —PTI

REUTERSGharaunda (Karnal), May 15

LATE LASTMONTH, Sukram-pal had to beg and borrowfarmhandsfromnearbyvillagesto gatherhis part of the coun-try’s largest-everwheatharvestin Haryana state near NewDelhi.Now,the50-year-oldfarmer

hasabiggerproblem:howtosellhiscropswhenthethreewhole-sale grain markets servinggrowers in his hometown ofGharaunda, near the heart ofwhat is knownas the country’sbreadbasket,areoperatingwithaskeletonstaff.

Thecountrywidelockdown,introduced in late March tostem the spread of the newcoronavirus,has led to a labourshortage across rural India,crimping the harvest andpre-ventingthebaggingandmove-mentof it.The largest crop gathered

globallyduring the pandemic,which isworthmore than$26billion, according to traders,mayserveasatestcaseforotherharvestscominguparoundtheworld, including Brazil’smainsugarcane and coffee harvestsandSoutheastAsia’ssecondriceharvests.Indiaistheworld’ssec-ond-largest producerand con-

sumerofwheatbehindChina.ForSukrampal,thematteris

urgent. He risks spoiling thewholelotifhedoesnotmovehisproduce within the next fewdays,before the next round ofwetweather,as he struggles tokeep the moisture content inthewheat below13%to14%.Above that,grain is less attrac-tive to buyers andwill fetch alowerprice. If it gets toowet, itwillbeworthless.Thelockdownhas severely hit India’s morethan7,000wholesalefoodmar-kets,whicharetheonlychannelforgetting food supplies to In-dia’s1.3billioninhabitants.“Nearly 90% of labourers

aren’taround.Lastseason,therewereabout5,000labourers,andthis season there areonly500,”said Radhe Shyam,a commis-sion agent at the GharaundaGrainsMarket.“Wehaven’tseenanythinglikethisbefore.”Wheat farmers sell their

grainexclusivelybylawatthesewholesalemarkets to commis-sion agents,which sell it on tostatebuyersandprivatetraders.Thecommissionagentsusuallyemployarmies of labourers tounload,clean,weigh,pack andre-loadmillions ofwheat sacksonto tractor trolleys that thenferry it to government andpri-vatewarehouses.

Farmersunable tomove recordwheat crop

Rabiwheat purchases tomiss record

CompaniesFINANCIALEXPRESS4 WWW.FINANCIALEXPRESS.COM

SATURDAY, MAY 16, 2020

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COMPETITIONFROMOTTPLATFORMSKamal Gianchandani, CEO, PVR Pictures

This is not the first time films are being premiered onstreamingplatform/s. Cinema exhibition has regularlyfaced competition fromnewemerging distributionplatforms over the lastmany years, and it has continuedto enjoy cine-goers’ patronage and affinity

Biocon Q4 net profitfalls 42% on one-timeCovid impactBIOTECHNOLOGYMAJORBioconhas reported a 42%decline in itsconsolidated net profit to `123crore for the quarter endedMarch2020,mainlyon account of a one-time coronavirus-related impact onits biologics business.The companyhad posted a net profit of `214 crorefor the corresponding period of theprevious fiscal,Biocon said in astatement.Consolidated totalincome of the company rose up by6% to `1,644 crore as against`1,557 crore for the sameperiodyear ago, it added.

BookAirAmbulancelaunchesaffordableservicesBOOKAIRAmbulance,a flagshipventure of FlapsAviation,hasannounced the launch of anaffordable air ambulance service,amove that is seen as a game changerfor India’s sunrise air ambulancesegment and the emergencymedical services (EMS) sector.FlapsAviation Founder andCEOAmitKumar launched the‘CashlessAirAmbulance’services.

EverythirdSnapdealshopperbuyinghealth-safetygoodsEVERYTHIRD shopperon Snapdealis buying products relating to safety& immunity; these includemasks,sanitisers, traditional immunityboosters like Chyawanprash,vitamins,herbal healthsupplements,etc.Masks are thesingle largest purchased item in thiscategoryof newessentials,accounting fornearly70%of theordervolumes.

AmpereVehiclesentersNepal,opensdealershipAMPEREELECTRICVehicles,awholly-owned electricmobilitysubsidiaryof Greaves Cotton,onFridayannounced its firstdealership inNepal.Thismarks theentryofAmpere Electric’s range ofenergy-efficient products inNepal.Ampere Electric offers last-mileenergy-efficient solutions that cansave up to 85-90%of the cost incomparison to a conventionalpetrol scooter.

Harley-DavidsonunveilshomedeliveryschemeIconic bikemakerHarley-DavidsonIndia on Friday said that it haslaunched new initiatives, includinghomedeliveries ofmotorcycles,extended servicewarranties and acompletelyonlineversion of ‘Pass-port to Freedom’.The homedeliveryprogrammewill help customersexplore the range ofHarley-David-sonmodels onH-D.comand thendirectly connectwith a dealer expertvia the dealer locator to discuss theirpurchase and payment opportuni-ties.

KVinayakRaotakeschargeasmember(finance),AAIKVinayak Rao,an Indian RailwaysAccounts Service (IRAS) officer ofthe 1987 batch,has taken charge asmember (finance) on the board oftheAirportsAuthority of India (AAI)from May13.Prior to this appoint-ment,Raowas serving asmember(finance) in theDelhi DevelopmentAuthority.Asmember (finance) ofAAI,Raowill be the overall in-charge of finance,accounts andfinancial operation of the organisa-tion.

SCOPEwelcomesgovt’sstimuluspackageStanding Conference of PublicEnterprises (SCOPE) haswelcomedthe government’s economic stimu-lus package to spur economicgrowth.SCOPE director-generalAtulSobti said that the thrust given tovarious sectors through the eco-nomic stimuluswould go a longwayin bringing the economyback on agrowth trajectory.

QuickView

FE BUREAUMumbai, May 15

RELIANCE JIOONFridayunveiled its newset of plans to cater to the growingbroad-band requirementof peopleworking fromhomeinlightoftheCovid-19outbreak.Thecompanyannouncedanotherwork-

from-home(WFH)planforprepaidusers.Itisaquarterlyplanthatoffers3GBofdataperdayforjust`999for84days.Thisbringstheeffective cost of 1-GBhigh-speeddata forlessthan`4,companysaid.

Thenewplanoffers free andunlimitedvoicecallsfromJiotoJioandlandlines.Itfur-theroffers3,000minutesofvoicecallsfromJiotoothermobilesand100SMSperday.Itoffersunlimitedhigh-speeddataof3GBperday,which thereafter reduces tounlimitedat64Kbps.Inaddition,theoffergivesuserscomplimentarysubscriptiontoJioApps.Earlier, Jio announced a WFH annual

plan of 2 GB per day offering 33%morevalue at `2,399.Jio also continues to offerthe existing long-term1.5GBperdayplanof`2,121withvalidityof336days.

Jio unveils prepaid plans to supportWFH

KIRAN RATHEENewDelhi, May 15

THE INNOVATION CHALLENGElaunchedbythegovernment todevelopalocal videoconferencing solution hasdrawn immense response,with around1,980entriesfromleadingcorporatesandstart-upsvying tograb the trophy.According to sources,besides individ-

uals and start-ups, some big companiesare also believed to have applied.WhileZoho has submitted its fully-developedprototype for the challenge, IT firms likeWipro and TCS have also joined the race

with their ideas.While Zoho confirmed to FE about its

participation, queries sent to TCS andWipro remainedunanswered.Theministry of communications and

informationtechnology(Meity)cameoutwith the challenge lastmonth to select alocalvideoconferencingsolution.Theideawas todevelopa local product that canbeused by the government and the privatesector in times of social distancingdue totheCovid-19pandemic.Announcing the challenge,Meity said

the governmentwas taking all necessarysteps to ensure that the countrywas pre-

paredtofacethethreatposedbythegrow-ing pandemic of coronavirus.“The out-break has led to the unprecedentedenforcementoflockdownthroughoutthecountry.The concept ofwork fromhome(WFH),whichwastillnowmostlysynony-mous with IT industry, has become a

household term.With organisations hav-ing asked employees toWFH,videocon-ferencing has become an integral part ofdaily life,”Meitysaid.According to sources, Meity has

receivedentries ranging fromfullydevel-opedprototypes to some ideas from indi-viduals.“TheCovid-19pandemichaspro-vided an opportunity to Indian start-upsto develop products that can be used bypeopleacross theworld,”saida source.Thechallengehasthreestages.Thefirst

stage is ideation,wherein teams have topropose innovative and cutting-edgedesignof theirsolution.The top10teams

wouldbeselectedandeachteamwouldbegiven`5 lakhtobuildaprototype.In the second stage,prototypes of the

selected teamswill be judged by a jury toselect three teams. The three selectedteams will be given `20 lakh each todevelopasolution.In the third stage, a winner will be

selectedwhowillget`1crorealongwithacertificate from the electronics and ITminister towards deploying the solutionfor use by the central government andstategovernmentsforayear,andafurthersupportof`10lakhperyearforoperationandmaintenance.

Govt’svideo-conferencing solution challenge drawshuge response

PRESSTRUSTOF INDIANewDelhi, May 15

LESSER-KNOWNFIRMSSUCHasDugantaOil&GasandOrissaStevedoreshavewon49small andmarginal oil and gas fields thatstate-ownedONGChadbidoutongovern-mentdirection.ONGChadatthecloseofbiddinginJan-

uaryreceivedbidsfor50outofthe64smallandmarginaloilandgasfieldsitofferedinabidding round for raising production byinvolvingprivatecompanies.Ofthese,thecompanyhasnowawarded

49ofthem.“Oil and Natural Gas Corporation Ltd

(ONGC) placed Notice of Award (NoA) tosevensuccessfulbiddersin13contractareascomprising of 49 marginal oil and gasfields,”thecompanysaidinastatement.

ONGCclubbedthe64fields inGujarat,Assam,AndhraPradeshandTamilNaduinto17onshorecontractareasbyclubbingsomeof them.Thesehaveacumulative300mil-liontonne(mt)ofoilandoilequivalentnat-uralgasreserves.Asmanyas12companiesmade28bids

for50fieldsatthecloseofbiddingonJanu-ary17.Sourcessaid28bidswerereceivedfor14

clusters, covering 50 fields, but none forthreeclustersthatcover14fields.“Through adetailed process of evalua-

tionasperthetenderconditions,sevencom-panies havenowbeen awarded13onlandcontract areas spread across the states ofGujarat,TamilNadu,Andhra Pradesh andAssam,”ONGCsaid in the statementwith-outgivingdetailsofthewinners.Sources said the winners include

DugantaOil&Gas,whichwasthesolebid-der for fields in Assam and the Cauverybasin of Tamil Nadu, and Orissa Steve-dores,whichwas the bidder for two clus-ters inAssam.

Lesser-known firmswin49small,marginal fields bidoutbyONGC

ANKURMISHRAMumbai, May 15

THE COMMITTEE OF creditors (CoC) ofbeleagueredmortgage financier DewanHousingFinanceCorporation (DHFL) hasdecided to extend the deadline for sub-mission of bids for the company till July24.The decisionwas taken at ameetingheld on May 12. DHFL had alreadyextendedthedeadline forthesubmissionof bids for the company to June 9, fromApril 16 earlier.The bidders for the com-panyhadearlierrequestedDHFLtorelookat the timeline of the resolution post theCovid-19scenario.Thedeadlineforsubmissionofbidscan

be extended even further, in case ofannouncement of a fourth phase of lock-down. The third phase of the lockdownannounced by the government due to

Covid-19 is expiring on May 17. “Thedeadline for bids is exclusive of any lock-downextensionsgrantedbygovernment,”theCoCresolutionfurthersaid.Thevotingforthe resolution isopentillMay17.DHFLwill also vote on extending the

resolution timelineby90days.As per IBCprocess, resolution should be completed

within180daysof admission.Anyexten-sionoftimelineneedstogetapprovalfromtheCoCfirst.Afterapproval fromtheCoC,DHFLwill move the National CompanyLawTribunal(NCLT)forseekingextensionin the timeline for resolution.Themort-gage financierwas admitted to the NCLTonDecember2,2019.DHFLhad earlier shortlisted 22 out of

24 applicants for the resolution of thetroubled company. The home loanfinancierhadgiven applicants the optionto bid for thewhole company or in parts.Of the total applicants,14had submittedexpressionsofinterest(EoIs)fortheentirebusinessofDHFL.KKRIndiaFinancialSer-vices,WelspunGroup,AdaniGroup,Oak-tree Capital,ARCILAsset ReconstructionCompany and Bain Capital were amongthesuitorswhoplacedEoIstotakeovertheentirebusiness.

DHFLCoC extends deadlineforbidssubmissiontill July24 ANKURMISHRA

Mumbai, May 15

MARKETS REGULATOR SECURITIES andExchangeBoardofIndia(Sebi)hassoughtatransactionauditreportfromDewanHous-ingFinanceCorporation(DHFL),sources intheknowofthemattertoldFE.Theadmin-istratorforDHFL,RSubramaniakumar,hadearlier ordered three transaction auditreports byGrantThornton to examine thesuspicious transactions of the company inthepast.The final transactionaudit reporthas taken longerthanestimateddueto theongoing lockdown, the source said.“Thereportwill be sharedwith the regulator,assoonasitisavailable,”hefurthersaid.Theadministratorhad told lenders in a

committee of creditors’ (CoC)meeting onMarch12 that certainpast transactions ofthetroubledmortgagelendermaybe‘avoid-ance’—atermusedforpreferential,under-valued,extortionateorfraudulentnatureof

transactions.Accordingtosources,theviewoftheadministratorwasbasedontheinitialGrantThorntonreport.In a CoCmeeting held onMay 12, the

administratortoldlendersthatDHFLispro-viding the relevant information soughtbyinvestigativeagencies inanongoingprobe.TheCBIhadtakenerstwhileboardmembersofDHFL,KapilandDheerajWadhawan,initscustodylastmonth.TheCBI isprobing theroleoftheWadhawansregardingallegationsthatDHFLreceived`3,700croreofloanfromYesBankbypayingbribes toerstwhilepro-motersof theprivatebank.TheWadhawanswerealsobeingprobedbytheEnforcementDirectorate (ED) in another criminal caselinkedtolategangsterIqbalMirchi.TheReserveBankofIndiaonNovember

20,2019 superseded theDHFLboard andappointedRSubramaniakumaras admin-istrator.DHFLisundergoinginsolvencypro-ceedingsat theNationalCompanyLawTri-bunal,Mumbai.

Sebi asks for transactionaudit report fromDHFL

Theministry of communicationsand information technology

came outwith the challenge lastmonth to select a local

videoconferencing solution

SURYASARATHI RAYNewDelhi, May 15

JAIPRAKASHASSOCIATES (JAL), thepar-entfirmofJaypeeInfratech(JIL),hasmovedtheNational CompanyLawAppellateTri-bunal (NCLAT) challenging the March 3orderoftheNationalCompanyLawTribunal(NCLT), which made the `750 crore itdepositedwith theregistryof theSupremeCourtapartof theapprovedbidderNBCC’sresolutionplanforJIL.NBCChad,initsresolutionplan,saidthat

itmightwithdrawitsresolutionplanincasethe amount, alongwith interest,was notmadeavailablewith it.TheNCLTapprovedstate-runNBCC’s resolutionplan for JILonMarch3,2020.DirectedbytheSupremeCourt,JALhad

depositedthefundtowardsrefundofhome-buyers’ money. The apex court had onAugust9,2018directedtheNCLTtodecideonthefund.

“Promoters of JILhave challenged theNCLTorder,arguingthatthemoneyshouldnot be given toNBCC,”said advocateBish-wajitDubey,whoappearedonbehalfofleadbankerIDBIintheNCLATonFriday.Advocate SumantBatra,whoappeared

onbehalfoftheresolutionprofessional,saidthat the NCLTwas asked by the Supreme

Court todecideonthefunddepositedwiththeapexcourt’sregistrybytheJIL’spromot-ers.Batra said the two-member NCLAT

bench,headedbyitsactingchairpersonjus-tice Bansi Lal Bhat,has directed IDBI, IRP,NBCCandothers to file their responses onthe JIL’s promoters’pleawithin twoweeksandpostedthematterforfurtherhearingonJune19.NBCC also,meanwhile,movedNCLAT

challenging theNCLTorder. In its appeal,NBCChadallegedthattheNCLTmadeuni-lateralandarbitrarymodificationsofitsres-olutionplanbyallowingobjectionsraisedbydissentingcreditorICICIBankandYamunaExpressway Industrial DevelopmentAuthority (YEIDA), even as the plan wasapprovedbyamajority97.36%vote in theCommitteeofCreditors(CoC).HearingonNBCC’sappeal,theappellate

tribunal had onApril 22had given condi-tionalapprovaltoNBCC’sresolutionplan.

JIL resolution: JaiprakashAssociatesmoves NCLATagainst NCLTorder

Directed by the SupremeCourt, JALhaddeposited a fundwith the

registry of the SC, towards refund ofhomebuyers’money

PRESSTRUSTOF INDIANewDelhi, May 15

HONDA MOTORCYCLE AND ScooterIndia (HMSI) onFridaysaid it has retailedover21,000two-wheelerssinceresumingoperations thisweek.Besides,nearly2.5lakhcustomershave

got their two-wheelers serviced at thecompany’s dealerships and authorisedservice outlets across the country,HMSIsaid inastatement.Around45%of thecompany’sdealers

and30%ofitstotalnetworktouchpointshavenowreopened,it added.“WithreadyavailabilityofsixofIndia’s

favourite BS-VI products,we are seeingincreasing take off in retails by the day,”HMSIdirector–salesandmarketingYad-vinderSinghGuleria said.A growing number of vehicles report-

ing at touchpoints for servicing is a testi-monytocustomers’trustandassuranceinthecompany’snetworkreadinesstoservethemwhiletakingcareofnewhygieneandsocialdistancingnorms,headded.

The companyhas introduced variousretail finance schemes as the next step togive more peace of mind to prospectivecustomers,Guleria said.HMSIhas over6,000 sales and service

outletsacrossthecountry,includingmorethan1,000dealerships.

HMSI retails over 21,000two-wheelers in one weekof resuming operations

RESOLUTION PROCESS

Discoms seen not availingfull quantumof`90,000-crliquidity package loanANUPAMCHATTERJEENewDelhi, May 15

SECTOR-SPECIFIC LENDERS PFC andREC are of the view that state-run powerdistributioncompanies (discoms)willnotavail the full quantum of the `90,000-crore loan that the governmentannouncedonWednesdaytoinjectliquid-ity in theelectricitysector.“Sincethis loan is tobebackedbystate

government guarantee, all the state dis-comsmaynotcomeforwardforthe loan,”REC told FE in response to queries on thetopic.“Thus, the amount ultimately to belentmaybelowerasstateswillalsohavetosee as to how much state governmentguarantee theycanextend,”RECadded.Some states will need relaxation of

FRBMnorms to avail the funds.“By andlarge,thefinanceministryhasbeensensi-tised so theywill allow FRBM relaxationwhenever any state approaches them,”Union power minister RK Singh hadrecentlytoldFE.Some states would also require the

relaxation of one of the conditions undertheUjwalDiscomAssuranceYojana(Uday)scheme,which allows discoms to borrowonlyupto25%oftheirpreviousyear’srev-enue asworking capital from banks andfinancial institutions.SourcesinPFCsaidforstateswhichhad

headroom to borrow within the Uday

working capital limits, the lenders canextend the loans immediately to the dis-coms.For those that have already breached

the Uday borrowing parameter, discomswill be eligible for these loans only to theextent of the amount receivable to themfrom their respective state governmentsin the form of unpaid subsidies and dues(pending bills of civic bodies and othersuch institutions). Such governmentdepartment dues to discoms currentlystand at about `54,000 crore across thecountry.These loanswould beused to clear the

dues of discoms to the generators,whichstoodat`87,374croreattheendofMarch2020, according to the government’s‘Praapti’portal.About 88%of thesewere“overdues”with payment default of 60days ormore.As in the case of any otherloans,RECandPFCwillalsohavechargeonthe revenueaccountofdiscoms.

SC seeks reply ofCentre,RBI onCredai’s loanmoratoriumpleaFE BUREAUNewDelhi, May 15

THESUPREMECOURTonFridayaskedtheRBI and the finance ministry to clarifywhether it ismandatoryforbanks to grantmoratoriumon instalments of term-loansto all non-banking finance companies(NBFCs) or if banks can exercise discre-tionarypowertograntsuchbenefit.Abench led by Justices LNRao sought

responsefromthegovernment,theRBIandSebionapleabytheHaryanachapterofCon-federationofReal EstateDevelopers’Asso-ciationsofIndia(Credai),thetopbodyofpri-vate real estate developers, allegingconfusionoverwhetherNBFCsandhousingfinance companies (HFCs) are also eligibleforthe loanmoratoriumannouncedbythecentralbankonMarch27.It said therewasnoclarityastowhetherrealestatedevelop-erswere also entitled to the loanmorato-riumpolicyornot.Besides interestwaiverfor the six-month moratorium period,Credaialsodemandedthat thecurrentRBImoratoriumbemademandatory,not dis-cretionary,forallbanks,NBFCsandHFCs.The association also sought six-month

freeze on repayment of any commercialpapers,bonds ornon-convertible deben-tures.OnMarch27,theRBIhadissuedacircu-

largiving liberty to all banks and financialinstitutionstoallowamoratoriumofthreemonths on payment of instalments inrespect of term loans outstanding as onMarch 1,subject to the borrowermakingsuch a request. It had also said repaymentschedule forsuch loans,asalsotheresidualtenor,wouldbe shiftedacross theboardbythreemonthsafterthemoratoriumperiod.

Some stateswould also require therelaxation of one of the conditionsunder the Ujwal DiscomAssuranceYojana scheme,which allows

discoms to borrowonly up to 25%oftheir previous year’s revenue asworking capital frombanks and

financial institutions

Nearly 2.5 lakh customers have alsogot their two-wheelers serviced atthe company’s dealerships and

authorised service outlets across thecountry, HMSI said in a statement

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Centre bites thebullet,whittlesdownECAct toease inter-statefarm trade“THE PROPOSED Central lawwillhelpseamlessmovementoffarm produce not only inter-state,butalsowithinthestates.Anyonehavingacentrallicensecan buy and sell anywhere,"AshokDalwai,chairman,Com-mittee on Doubling Farmers'Income,said.Announcing the decisions

onFriday,financeministerNir-malaSitharamansaidtheCen-tre will also facilitate a legalframeworktoenablefarmerstoengagewith processors,aggre-gators,largeretailers,exportersetc., in a transparentmanner,whichwillboosttheirincomes.After the EC Act is amended,stocklimitwillbeimposedonlyunderveryexceptionalcircum-stanceslikenationalcalamitiesandwhenprices of perishablessurgeby100%andnon-perish-ables by 50%. However, nostock limitwill beapplicable toprocessors orvalue chain par-ticipants, subject to theirinstalled capacity or to anytrader subject to the exportdemand.The move to bypass the

APMCActcomesaftertheCen-tre's efforts toweaken the oldAPMCstructure,whichhaslong

strangled farmmarketing anderoded farmers' incomes byforcing them to sell their pro-ducetoonlytherelevantAPMClicencees,metwithonlylimitedsuccess. In 2018,MaharashtradidaU-turnwithinamonthofremoving all farm produce,including livestock, from theAPMC purview through anordinance.Of course, in certain cases

(such as Bihar), the attempt toabolish the APMC structurewithout creating alternativemarketing infrastructure forfarmers only compoundedtheirwoes,a point analysts saythe government has to bear inmindwhenitcomesupwiththenewlegislation.However,theproposedCen-

tral law, which also promisesfree inter-state movement offarmcommoditieswithoutanybarrier,could openup avenuesof confrontations between theCentre and some states thatcurrentlyadministertheAPMCAct.Commenting on the pro-posedlaw,thefinanceministrysaidthatinter-statemovementof goods is a Central subject,hintingthat it's freetolegislateon this issue.However,wheretheissueisintheconcurrentlist(farmmarketing,for instance),theCentre'slawwillhaveprece-dence over any state law, itadded.TheCentre cameoutwith a

draftmodelAPMClawin2003and has been pushing for its

enactment by states. Aroundtwodozen states have enactedthe model APMC law, thoughwith somemodifications,butothers are reluctant to replacetheir existing legislation.Evenwhere themodelAPMC law issupposedly adopted, the old,archaic law still continues togovernthebehaviourofmarketparticipants.

AshokGulati,chair profes-sorofagricultureatICRIER,hadearlierpointedout,"Thesystemkeptsufferingfromhighlyfrag-mentedmarketswith insuffi-cient infrastructure; levies andintermediation fees remainedhigh anduneven across states;APMC licenceesmonopolisedtrade, leading to rent-seekingand lower share of farmers inthesellingprice."According to the Dalwai

Committee Report, there areclose to 29,547 marketingpoints in the country.Of these,22% or 6,615, are regulatedmarkets under theAPMC and22,932 are regional periodicalmarkets. "The package effectscomprehensive reforms to theagriculture sector,and backs itupwith capital investments atbothproductionandpost-pro-duction segments. The chal-lengeoffindingvalueforfarm-ers' surpluses is finallyaddressedbygivingthemalter-nativemarketing channels tochoosefrom,”DalwaitoldFEonFriday.AftertheCentreformulated

a model law for the much-needed reforms in agriculturemarketing and asked all statestoemulateit,manyhavetriedtotoetheline,butcomprehensivereforms have remained frus-trated.Amongthemajorstates,Maharashtra, West Bengal,Odisha, Gujarat and AndhraPradeshhavecompliedwiththefourkeyreformsmootedintheCentre’s model law, namelyderegulation of fruits andveg-etablestrade,facilityforanyonetosetupprivatemarketoutsidethe purviewofAPMCmandis,single trading licencetoenableinter-mandi trade and single-point levyofmarket fee.How-ever,even these states haven’ttaken all the follow-up actionsrequired to actuallymeet thereformobjectives— for exam-ple,evenasthestate’sAPMClawprovides for it,Maharashtra isyet to issue unified (all-mandi)licencefortraders,whereaslessthan 1% of licences in UttarPradeshandGujaratareunifiedones.Rajasthan,TelanganaandUttarakhandare theonlythreestates that have issued unifiedlicencestoall traders.Mohit Singla, chairman of

theTradePromotionCouncilofIndia, said the amendment totheECActwillhelpinsulatethefarmers frompricemanipula-tion by different forces. "Thepriceswill nowbe governed bymarketdemandonlyandinthelong termbringbettervalue tothefarmer,"headded.

From the Front Page

SATURDAY, MAY 16, 2020

FINANCIALEXPRESS6 WWW.FINANCIALEXPRESS.COM

❝ ❝

MAKING INDIASELF-RELIANTPrimeminister of India Narendra Modi

Sectors likemedical research, cleanenergyandclimate resilienceoffergreatopportunities tobringDanish and Indian strengths together for creatingaGreenStrategicPartnership

I T IS NOW clear that the battleagainst the Covid-19 pandemichas to be fought on two fronts:the first,of containing thevirusitself,andthesecond,thelonger-

term and much more complex chal-lenge of getting the economyback onthe rails. The first front is under thesomewhat wobbly control of centraland state authorities, even if it takesanotherthreetofourmonthstodeclaresome kind of victory. But, the secondfront is just opening up, and the fogover the battlefield is slowly lifting,leaving us guessing about the chal-lenges that await us.While eminentthinkers and experts areweighing indaily on the broadermacroeconomicpolicychoices,thefocusof thispiece ison agriculture and the options avail-able to revitalise thesector.Some context setting is necessary.

For almost two months, while theindustrial and service sectors largelygroundtoahaltandarenowstrugglingto restart,agri supplychainshavequi-etly kept humming. This is despitesevere disruptions in long-distanceroad transport and shortageof labour.Anevenbiggerchallengefromtheordi-nary farmer’s perspectivewas the clo-sureof localmandiacrossthemajorityofstates,chokingofftheonlyrealmar-ketingplatformavailable to them.Yet,allmajorcitiesacrossthecoun-

try continued to receive supplies offresh vegetables, fruits, and milkthroughout the lockdown. Even asdozens of instances emerged of pro-duce being dumped for lack of buyersor crashing prices, farmers as a com-munityhavekepttheagri-enginerun-ningona lowergear.Theyhavequietlyandwithout fuss harvested a bumperrabicropofwheatinNorthandCentralIndia amid unfamiliar social distanc-ing protocols, and even managed tonotchupearlykharifplanting,toppinglastyear’s figures.All thishasbeenachievedagainsta

backdropof institutional creditvirtu-

ally drying up and informal creditrates shooting up savagely.The goodnewsisthatgovernmentprocurementof wheat is progressing satisfactorilyand, by all accounts, the supply chainfor inputs like seed and fertiliser forkharif sowing is also beginning tofunctionnormally.But,themacroagricultural storyis

hardly exciting.We have had severalyears of sub-4%growth in the sector,prices formost crops are stagnant orfalling, and no technology break-through has been delivered in over adecade.Markets remain restricted byAPMC-led monopolies, and e-NAMhas failed in its promise to deliver analternate channel to farmers to tap awider, pan-India market.Despite therecent excitement generated by UP,MP,Gujarat,andafewotherstates lib-eralising direct sourcing of farmpro-duce, the hard fact is that, till now,nostate has notified the rules and regu-lations underwhich the new liberalorderwill operate.Toaddtothemanywoesofagricul-

ture,we also have the unprecedentedreversemigration of lakhs ofmigrantlabourers, fleeing locked-down cities,and closed factories andworkshops.This burden,too,will have tobe shoul-dered by agriculture for the next cou-pleofyearsatleast,asthereislittlelike-lihoodofaquickreturnofthemajorityof thesemigrants to industrial or ser-vice sectoremployment.At the sametime,domestic supply

of all agri-goods,except oilseeds, is insurplus. We are faced with theprospect of further downward pres-

sure on demand for basic agri-prod-ucts in the domestic market, arisingfrom the closure of lakhs of eateries,restaurants,hotelsandcateringestab-lishments, factory canteens, hostels,etc,at least forthenext fewmonths.Itmay be a year ormore before we canexpect this demand to be restored topre-Covid levels.Widelyreportedlayoffs

andpaycuts,and restric-tionsonthefunctioningofindustrial units aswell asconstruction, transport,etc,will force millions ofhouseholds to curb con-sumption and rein inexpenditureonfood.Eventhe hitherto robustdemandformilkandpoul-try products has beenadversely impacted,withan immediate blowbackvisibleintheformoflowerprocurement prices forprimaryproducersinthesevaluechains.In this scenario,anexport-ledagri-

cultural strategy offers an inclusivepathway towards growth, income,employment and rural poverty reduc-tion. One may argue that India isalready amajor exporter of items likefrozen buffalomeat,marine productslikeshrimp,andbasmatirice,besidesavaried basket of goods ranging fromgrapes to spices.However, exports ofagri-products in 2018, at $38 billion,made up only11.76%of India’s totalexportsandhardly2.5%ofglobalagri-trade. In contrast, a small country likeHolland exports $100.5 billionworth

of agri-products everyyear and com-mandsa6.7%shareoftheworldtradeinagri-goods.We need a proactive agriculture

export strategy, covering every cate-goryofagri-produceavailableinIndia:field crops, horticulture, dairy, live-stock,poultry,and fisheries.Today,weare in a position to both address ourneedsoffoodsecurity,andbecomereli-ablesuppliersintheinternationalmar-ket. This is not to say we can startexporting from the next marketingseason.Toomuch needs to be done intermsofaligningourcroppingsystemswith globally accepted production,storage,packaging,transportation,andhandlingnorms.Ourfarmersandsup-

ply chains will need toreorganise and reorientthemselves to address aglobal market and itsattendantchallenges.By setting a goal to

graduallyopenupallagri-produce to exports, thecountrycan set an inspir-ingandexcitingnewhori-zonforitself.It introducesanentirelynewdimensionto how investments inagriculture by farmers,cooperatives,and farmerproducer organisation(FPOs),SHGs,supplychain

agents,technologyproviders andvalueaddition players—and,most of all, thegovernment—willbeviewed.Thechoicetomove toward export-oriented agri-culturealsoprovidesachancetoplayupourmost under-leveraged strengths:Themillionsoffamily-runfarmsspreadacross the second largest arable area intheworld,which is situated in15agro-climatic zones, has abundant labour,and a long tradition of farming thatmakes forquick adoption of newtech-nologies.Noothersectoroffers suchaninclusive and pan-India potential forreviving growth, employment, andincomesinthenext18-24months.

● REVITALISINGAGRICULTUREBYSETTINGAGOALTOGRADUALLYOPENUPALLAGRI-PRODUCETOEXPORTS,THECOUNTRY

CANSETAN INSPIRINGANDEXCITINGNEWHORIZONFOR ITSELF

PRAVESHSHARMA

Former IASofficer andCEOofKamatan, anagritech start-up.Viewsarepersonal

MEGHAPATNAIK&VIVAN SHARAN

Patnaik is fellow and Sharan an advisor, Esya Centre, athink-tank in NewDelhi. Views are personal

THE PROPOSED $5.7 BILLION Face-book investment in Jio has reignitedquestions on the digital economyandthe centrality of data. Data is oftencalled the “new oil” because digitaleconomybusinesses, like socialmediaplatforms, use it as fuel to generatevalue.More access to data is generallybetterforsuchabusiness.Forinstance,larger datasets lead to better predic-tions of userbehaviour.Accurate plat-formsattractmoreusers,therebygen-erating larger datasets.This virtuouscycle at a business level concentratesmarket power, and is a reason whyIndiamightmandate sharing of pri-vately collected data.The expectationis that thiswill diffuse the dominanceof largeplatforms.The first mention of regulatory

mandates for data sharing appearedin the draft e-commerce policy of2019.Thedraft compareddatasets topublic resources, like a spectrum.While the draft was scrapped, theissue continues to resurface in datagovernance debates.The ministry ofelectronics and information technol-ogyrecentlyestablishedacommitteeto look into the governance of data.This committee, headed by KrisGopalakrishnan, co-founder ofInfosys, is looking at the “economicdimension of data” and the “plat-formisation of the digital economy”.It is expected tosubmit its findings tothe government this year.Atfirstblush,data-sharingregulation

mayseem like the correct approach toreduceaplatform’sadvantage.However,digital economyplatforms are uncon-ventional.Theyexhibit a fundamentalparadox—themostdisaggregateddataisoften themost useful to them.That is,data that identifies users throughbasicand personal characteristics providesbusinessinsightsthatarehardtomatchwithpre-arrangeddatasets.Suchdatais

most likely to be protected by privacyrules oranonymisationprotocols,suchas thoseprescribedunder theproposedPersonalDataProtectionBill.Conversely,the limits to the usefulness of pre-arranged orderivative datasets can beunderstood through the lensof organi-sational economics.According to Stan-fordUniversityprofessorsErikBrynjolf-ssonandPaulMilgrom,successfulfirmscreate clusters of complementarybusi-nesspractices.Theyoptimisetheiroper-ationssothatvariousbusinessprocessesmerge seamlessly.There-fore, firms would find ithardtosuddenlyincorpo-rate large datasets intotheirprocesses,especiallydatasets that are opti-mised for another firm.Veryfewwillbeabletohireortrainstaff,rethinkexist-ingprocesses,andreorderoperationalpriorities.In fact, most tradi-

tional Indian firmsdon’t even exploit thedata they have readyaccess to.Kirana storesseldom use databasesolutions, even if theyare cheap. Such stores are privy tovaluable demand and supply datathat could be organised using soft-ware, and leveraged for improvedsales or inventorymanagement.Therates for digital payments adoptionremain similarly low, even amongmid-sizedretailers.This isdespite thestates’ long-drawn emphasis onawarenessprogrammesaroundasso-ciatedbenefitsofdigitisation,suchaseasier access to loans based on trans-action histories. A 2019 survey of1,000 retailers in Jaipur found thataround 60%had not adopted digitalpayments, despite the financial andinfrastructural capacity to do so.

Datagovernancemustalsoaddressthe question of data ownership. Notonly do digital platforms invest inorganising data but also they are theonly channel of bringing certain datainto existence.Therewouldbenodataaboutuserbehaviouronsocialmediaifplatformswith data-centric businessmodels themselvesdidnotexist.Mandatingdata-sharing could also

violate privacy rights since computerdatabasesenjoyprotectionunderIndiancopyrightlaw.Ithelpsthatdataisa‘non-

rival good’ though. Thismeansthatoneparty’suseofdatadoesnotautomati-cally preclude its use byanother. This is differentfrom most economicgoods. For example, onefirm’s office typicallycan-not be used by another.Therefore,economistHalVarianargues,that“insteadoffocusingondataowner-ship—a concept appropri-ate forprivate goods—wereally should think aboutdataaccess”.Platforms can be

proactive and volunteeraccess to some of their anonymiseddatasets.Thiswouldsignalwhatsortofdatatheyarecomfortablesharing,andremove uncertainty aboutwhat theyconsider commercially sensitive. Forinstance, taxi aggregators could sharetraffic data, telemedicine platformscould share types of health queries, e-retailerscouldsharegeographicalcon-sumption data, and so on.Such open-ness may obviate the need forregulation.Moreover,itmayencouragetraditional rivals to build capacity forusing data to increase their sales.ThekeyisforIndiatomapusecasesfordif-ferent types of datasets, before creat-ingnewrules forthe road.

Relief for migrantsIf the first trancheof reliefmeasures,announcedby the FM tomitigate thedevastating impact ofcoronaviruspandemiconcountry’s economy isaimedat ensuring the liquidity flowtovarious sectors of the economyincludingMSME’s, the secondone isprimarily focussedonensuring foodsecurity formigrantworkers andease credit flows to streetvendorsand small farmers, amongothers.Theprovisionof foodgrains for the nexttwomonths including thenon- rationcardholderswhoare not coveredunder theNational FoodSecurityAct,and a renewedpush to "OneNationOneRation card” scheme, enablingration card holders towithdrawrations anywhere from thecountryare steps in the right direction.Theproposedmeasure couldpreventpoormigrants frombeingendedupasvictimsof starvation andhunger.However, they are now increasinglyin needat this critical juncture isincome support throughdirect cashtransfer.As they constitute themostvulnerable sectionswhonowbearthemaximumbrunt fromoneof thestringent lockdownsof theworld,reliefmust be at a large scale.—MJeyaram, Sholavandan

On Mallya’s caseFugitive liquor baronVijayMallyalosinghis application seekingpermission to appeal in theUKSupremeCourt becausehis casedoes not involve apoint of lawofpublic importance andcleared thedecks for his extradition to India. Hehadearlier lost hisHighCourt appealagainst an extraditionorder to Indiaonchargesof fraud andmoney-laundering.Mallya can still approachtheEuropeanCourt ofHumanRights(ECHR) in Strasbourg, citing lackofafair trial and theoutbreakofcoronavirus inMumbai’sArthur Roadjailwhere the authorities plan tolodgehim. But he is fast runningoutof timeandoptions.— Ravi Chander, Bengaluru

To obviate the need forregulation , India must mapuse cases for different types ofdatasets, before creating newrules for the road

LETTERSTOTHE EDITOR

Data governancemust also addressthe question ofdataownership. Not onlydo digital platformsinvest in organisingdata, but they arealso the only

channel ofbringingcertain data into

existence

Rethink farm export policiesto revive agriculture

Data sharing and the digital economy

India needs aproactive

agriculture exportstrategy. It canaddress both itsneeds of foodsecurity and alsobecome a reliablesupplier in the

internationalmarket

Agriculture reforms takeoff, good deal for farmersEssential Commodities Act defanged, inter-state cropmovement freed, and contract farming to be legalised

Aarogya Setu ashtra

PlatformRESPONSIBILITYFB ordering investigations to uncover platform deficiencies isgood,but it needs to domore tomake social media safe

A GRICULTURE REFORM IN the countrygot abigboostwith thegovern-ment finallydeciding to defang the65-year-old Essential CommoditiesAct (ECA),which,by terrorising traders and food processors—and evenimportersandexporters—ensuredthattherewasnosteadybuyeroffarm

produce. In the nameof protecting the consumer—the ECAwas born in a scarcityeconomy—thegovernmentwould impose stocking limits onvarious commoditiesandtheselimitswouldabruptlybeloweredifpricesrose.Asaresult,anexporterbuild-ingupstocktoexportwouldalsobeforcedtocutthem;whileexportbanswereimple-mentedundertradepolicy,theECAwasalsoacriticalpartof the samepolicy.Whileannouncingthechange,financeministerNirmalaSitharamansaidthatonlyinveryextenuating circumstances of national calamities—like a famine—would reintro-ducingthesechangesbeconsidered.Indeed,sincetheideaoftheECAistokeepcon-trolonprices,therearealsoothermeasuresthegovernmentshouldbelookingat.Inthe caseof rice andwheat,for instance,whereFCImaintains abufferstock—andsomuchmore—stockscouldbedumpedinthemarketduringexceptionalpricehikes.Anactivefuturesmarketcanalsobeusedforthesamepurpose.While several stateshaveamended theAPMCAct to allowfarmers to sell tonon-

APMClicencees—arhatiyas—thecentralgovernmenthasdecidedtoformalisethis.Asthefinanceministersaid,innoothergood—atwo-wheeler,forinstance—isaproducertold towhomhecansell.Yet,that it iswhat theAPMCActdid—ironically,bygovern-mentsthatcontinuedtoswearbythefarmer.Acentrallawistobebroughtintochangethis; it isnot clearwhetherthe stateswill oppose this,or if theywill beable to stall it.Indeed,whilestatesstillhavetherighttopreventcropsfrommovingacrosstheirbor-ders,thiswasalsoawaytoensurefarmersnevergottherightprice.Thenewlawwillalsofreefarmerstotaketheirproducetothemostlucrativemarket.Inordertoencouragecompetitionamongmandis,though,thegovernmentwillhavetodomore.Itwillhavetoensurethatprivatemandis—setuptocompetitionwiththeAPMCmandis—getsub-sidisedcreditandlandtocreatecritical infrastructuralfacilities.Equallyimportant,thegovernmenthassaiditwillcreatea‘facilitativelegalframe-

work’toallowfarmerstoenterintocontractswithprocessors,exporters,aggregators,and large retailers,etc,so that a farmerhas some certaintyoverwhat prices hewillreceive.Inotherwords,alegalframeworkwillbemadetoallowcontractfarming;asaresult,afarmercanlockinonapricebeforethecropissowninsteadofbeinglefttothevagariesofthemarket.Indeed,totheextentthatthemiddlemancanbecutoutfromthetransaction,thefarmershouldalsofinditpossibletogetagreatershareofthefinalretailprice.Overtime,asfarmersstartgettingbetterprices,thegovernmentcanalsothinkofrestrictingthescopeofitsMSPpolicyaswellascompulsoryprocurementbygovernmentagenciesthatdistortsmarkets,andtriestodictatecropchoicestofarm-ers.Givenallthechangesannouncedwillhurtestablishedinterests,itislikelytheywilltrytheirbesttostall it,sothenextchallengeforthegovernmentwillbetoensuretheproposed reforms actuallygo through.Agoodbeginning for the agriculture sector,apartfromthemoves—bothtodayandearlier—istoinvestalotmoreincreatingphys-icalinfrastructurelikeirrigation,coldstorages,etc.

O NWEDNESDAY, FACEBOOK apologised to the Sri Lankan govern-ment for its role in the 2018 riots in the country,which led to threepeoplelosingtheirlivesand18endingupinjured.Thecommunalten-sion, it is claimed, started on Facebook; the dominant community

turned against aminority community, leading to violence.The company, at thetime,onlyhad twopeople to reviewcontent posted byover twomillion local lan-guageusers.TheapologyisabigstepforFacebook,which,untilafewyearsago,hadbeen brazenly shrugging off responsibility,or even acknowledging its role.Whilethe companyhas been trying tomake amends since 2018,when it started order-ing an investigation into its role in hatred across nationswhere such events havetakenplace,itcertainlyneedstodomuchmoregiventhatithasbecomemorethanjust amedium of communication.More important, Facebook and other socialmedia need to start spendingmore tomonitor content.Although Facebook hashired human rights consultancies likeArticle One to investigate its role in illegalactivities,theplatformstill lags in rampingup itsworkforce.TheroleofAIcannotbeunderscoredenough—Facebookreported lastyearthat it

hadremovedsevenmillioninstancesofhatespeechonlineusingAI,butitcouldonlydosoinsocietieswheretheAIcancomprehendthelanguage.TimereportedthatFace-bookhadnoprotectionbuiltforlanguageslikeAssamese,andonlyemployedmoder-atorsunderasystemthatwouldusuallytakeupcasesofcontent flaggedbyusers.Aspeoplecometorelymoreonsocialmedia,companieslikeFacebookandTwitterneedtobemoreproactive inmonitoringcontent.Theissueofplatformresponsibilityalsoneeds to involve the state,which,at times,becomes complacent about socialmediacompanies.Until bothcansit andcomeoutwithacommonframework todealwithsuchnuisance,Facebookwillnotbeabletodomuch.

App key to Covid-19 fight,data helped flag 300 likelyhotspots

T HE GOVERNMENTTRACING 300 emerging Covid-19 hotspots in thecountryfromAarogyaSetudataisproofofhowcrucialtheappistoIndia’sfight against the pandemic.That there are only 10 crore downloadsagainst30croresmartphonesinthecountryonlyshowshowmuchmore

roomwe have for efficiency in contact-tracing. In the present instance, the gov-ernment used syndromicmapping using a string of data from self-assessment,contact tracing,andhistorical patterns to identifyhotspots at the sub-post officelevel.While the analysismaynot be concrete—someone having flumay exhibitsimilarsymptoms—AarogyaSetuisstillkeytoIndia’sCovid-19arsenal.Ithasbeenable to contact-trace 1,00,000 people from12,500 tested individuals, and have10,000testsconductedwithanefficacyrateof23%.Besides,aseconomicactivityresumes,eventhough inapartialmanner,the roleofAarogyaSetubecomesquiteimportant.Moreso,whencontacttracingwillhavetobedoneonalargerscale,andstateshavenotbeenabletodoenoughonthis front.Data,forinstance,showsthatMaharashtrawasonlyabletocontact-trace57%ofthepeopleasofApril25.Thefig-uresforMumbai,whichaccountsfornearlyone-fifthofIndia’scases,is54%.Con-sider, then,howpoor the track record of states that have neitherMumbai’s savvywhen it comes to technorcomparable resourceswouldbe.The government has donewell to release app guidelines and information to

reinforcetrust,butitneedstodomoreonthetechnologyfrontif it istodriveadop-tion.At present, the app only recordsyour activity,but does not providemaps forhotspotsorareaswherepeoplearequarantined.Nordoesitprovideinformationonwhetheranareaishigh-risk.Althoughthereareplanstoincorporatesomeofthesefeatures,thishas tobefast-trackedforgreateradoption.More important,itneedsto start bug-bounty programmes andmake the code open-source—this is alsoplanned—forpeople to detectvulnerabilities and alert the government,so that itcanrampup its security infrastructure.However,thesuccessof theappwill relyontesting.Evenif theappcanidentify

potentialhotspots,withouttherequisite testingspreadandmomentum,itwouldbe impossible for the government to track and trace people. So, the governmentwill need to rampup its testing capabilities.Ananalysis in thispapershowed thatthegovernmentwouldneed5.5croretestkitsbytheendofJune,and47.4crorebytheendofJuly.Whilecaseshavebeendoublingevery11days,ICMR’stestingcapac-itydoublesevery12days.Thus,withoutrequisitetesting,thesystemmaynotwork.Testing is thekey,AarogyaSetucanbeused tobuildupon it.

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R.N.I. Reg. No. 6188/61 Printed for the proprietors,The Indian Express (P) Ltd byVaidehi ChintamanThakar atThe Indian Express (P) Ltd Press, Plot No. EL-208,TTC IndustrialArea,Mahape, Navi Mumbai-400 710 andpublished fromExpressTowers, Nariman Point, Mumbai-400 021. Editorial &AdministrativeOffices: ExpressTowers, Nariman Point, Mumbai-400 021. Phone: 22022627/67440000. Fax: 022-22856323.

Chairman of the Board: Viveck Goenka, Managing Editor: Sunil Jain, Resident Editor: Malini Bhupta* (*Responsible for selection ofnews under PRBAct) ©Copyright:The Indian Express (P) Ltd.All rights reserved. Reproduction in anymanner, electronic or otherwise, inwhole or in part,without priorwritten permission is prohibited.The Financial Express®

Opinion

(New infections) Exponential growth estimate

Lockdown has helped stem exponential growth

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Mar 02, 2020 May 14, 2020

Lockdown1

Lockdown2

Lockdown3

5-Day moving averageTrendline

(New cases as % of total infections, 5-day moving average)

But new cases are rising faster than other countries

Compounded daily growth of infections, %

But growth in major centreslike Mumbai is slowing down

0.01

0.1

1

10

100India Germany US UK Italy South Korea

Day 5 Day 82

Mumbai

Lockdown 117.9

Lockdown 29.1 Lockdown 3

6

India will still have more than 3 million infectionsif cases double in 14 days

0

20,00,000

40,00,000

60,00,000

80,00,000

1,00,00,000

1,20,00,000

1,40,00,000

1,60,00,000

1,80,00,000

Doubling in 10 days

Cities are the major hotspotsCases As % of total infections

Doublin in 12 days Doubling in 14 days

May 14, 2020 Jul 31, 2020

6,645

2,107

15,581

5,2627,998

3,161

78,003

8.5

2.7

20

6.7

10.3

4.1

0

5

10

15

20

25

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Ahmedabad Indore Mumbai Chennai Delhi Pune India

446

95

596

41 106 170

2,549

17.5

3.7

23.4

1.6

4.26.7

0

5

10

15

20

25

0

500

1,000

1,500

2,000

2,500

3,000

Ahmedabad Indore Mumbai Chennai Delhi Pune India

Deaths As % of total deaths

1,73,83,822

70,60,026

37,09,184

5.4

0.50.2

1.31.7

0.3

Source: MoHFW. Data till May 14, 09:00 AM

OPINION 7FINANCIALEXPRESS

WWW.FINANCIALEXPRESS.COM SATURDAY, MAY 16, 2020

DATADRIVE

ATTHE END of the thirdlockdown,Indiawould beenunder54 days of a near-total

shutdown,at least on paper.Although itwas able to contain the spread ofinfections through this—in thescenario of exponential growth,dailycaseswould have been averaging12,000 as against 3,500 today—itneeds to nowprepare for a rise ininfections.As compared to other

economieswhich have seen newinfections as a percentage of total trenddownwards, India’s has beendecelerating at a slowerpace. In fact,lockdown fatigue hasmeant a rise indaily infections over the last 10 days. IfIndia carries on this trajectory—thehealthministryonThursday statedthat doubling rate has comedown to13.9 days—itwill still have 3.7millioninfections by the end of July.While

cases have nowstarted shifting tostates like Bihar,UPandOdisha,asmigrants return to theirvillages, sixcities still remain hotpots accountingfor52%of total infections and 57%oftotal deaths.The goodnews isMumbai’s compounded daily growthhas reduced to 6%,from9.1% in theprevious lockdown.ButDelhi's andChennai's seems to be on the rise.

Infections on the upswing

C OVID-19-CURATED CLEAR blue skies, rejuvenatedrivers, clean and freshwater bodies,wild fauna on citystreetsorvisibilityoftheHimalayasfromdistantcitiesdonot excite the common Indian.Nobodywanted tobarterlifeand livelihoodabetterenvironment.However, Covid

19givestheopportunitytorebootoureconomicsystemandaligngrowthwiththeenvironment.Thelockdownhasprovedthatnaturecanrecoverfast,ifpollutionagentsarewithdrawn.Ithas indirectlyresulted inenvi-ronmentalsensitisationofthemasses.Itmayleavethefuturegenerationdesiringsustainability.Theloomingeconomiccrisisandthreattolifehaveinstilledasenseofinsecurity,too.Thisnegativitymaymanifestasacon-servativeworldviewandsupportsustainabledevelopment.The counterview is that the environmental euphoria is akin to

shmashan vairagya. It is the transient ponderings on the ephemeralnatureof life thatvanishesonceyouexit thecremationground.Historyis repletewithdisastrouspandemics.The Spanish flu of 1918 infectedalmosthalfabillionpeople,withthehighestdeathtollinIndia.Nonethe-less,theworlddevelopedatanunprecedentedpace.Evenduringthepan-demic,economicgrowthwasthepreferenceintheUSandChina.There-fore,postCovid-19,ourpenchant foreconomic growthmaysupersedeotherconsiderations.Greedcouldprevailovergreen.Amoreconciliatoryapproachfavoursgreenoptimismconsistentwith

theneedof economic activities.Thought leaders are sketching apost-Covid-19scenario.AnewWorldOrdermayemergeaboutnaturalresourceutilisationvis-à-vis carrying capacityof the biosphere.But,poorcom-munitiescannotsurviveslow economicgrowth.China,withacompara-blepopulation,has4-5timesbiggeraGDPthanIndia’s.Thecoronacrisishas taught India tobe self-reliant in strategic areas.Therefore,environ-mentallybalanced,sociallyinclusiveandstructurallyresilientgrowthisadvocated.Energyandenvironmentcanbesynergisedtomeetlivelihoodneeds,butprobablynotluxuriouslifestylesonasustainedbasis.India stands thirdafterChinaand theUS in termsofabsolute emis-

sion,althoughitspercapitaemissionof1.6tCO2/personismuchlowerthantheworldaverageof4.3tCO2/person.Indiahasreduceditsenergyintensity from 0.2747Megajoules/rupee in 2011 to 0.2321Mega-joules/rupee in2019,aimingforareductionof30-35%fromthe2005level.Energyefficiencyprogrammesmust continue to ensure energysecurityatalessercostinpost-Covid-19scenario.JeffGibbs,inPlanet of theHumans,explains thatutilisationof fossil

fuelhasbothenabledourexponentialgrowthandalsosealedourfuture.Indiahadbeenmovingfasttocleanitsenergy-mix,andhasalreadyadded87GWofrenewableenergy(RE)capacity.Timeoverrunwouldmakeavail-abilityofRElateandcostly.Butthesocialcostfromcoal-firedplantswouldbe still higher.Impactedheavilyby the corona crisis,the energysectorrequiresstrategicsupport.TherevivalapproachmustfocusonRE.Exten-sive rooftop solar can reduce themonthlybill of consumers.Presently,batterystoragefallsshortofcapacitytosupportsolarandwindpower.So,thermal energywould stay,but energy-mixmust tilt towardsRE.Gas-basedgenerators,forinstance,canberevived.Aglobal consensus on climate changewas emerging.But the envi-

ronmentdebatemust lookbeyond climate change.Population controlandsocialsecurityshouldbepartofgreenplanning.Withtherelaxationand liftingof lockdown,environmental stresswould increase.Sustain-ableeconomicgrowthcanberecalibratedtodefineanewnormal.

Therightbalance

Sustainable economic growth can berecalibrated to define a newnormal

West Texas Intermedi-ate futures (bench-mark crude for theUSoil trading) closednegative $37.63 per

barrel on April 20, creating shockwaves.Without exception, all journal-ists discussing this referred to it as his-toric.But theydidnotexplainwhyithasmade history.Notonlythecrudepricewentup the

nextdayto$8.91,within fewdays ithas

gone above $20— same as it was before the so-called negative priceArmageddon.Based on subsequent price move-

ment, the negative price is an aberra-tion. In reality, it is a failure of thefuturesmarket (FM).But, to the CEO ofCME group that owns the New YorkMercantile Exchange , “it was the OilFutures Market working to the perfec-tion.”Since, it is a key source of revenuefor the CME Group, one cannot expect

anunbiased assessment fromhim.Even more shocking, none of the

economistscommentedonthenegativeprice as though it was not a concern.According to economic theory,FM is anefficientwayof“discoveringprice”.And,if the price went negative, it must beright andnormal.Now is the time to question the

gospel truth of discovering pricethrough FM for oil, a strategicallyimportant commodity. Can we havealternative ways of determining pricethat are fair to bothexporting and importingcountries? Or, can we atleast reform FM to limitthese to serious traders?This way, the event ofnegativeprice can indeedbecome“historic”.In 1978,after the sec-

ond oil price war, oilprices had jumped up by300%; NYME,whichwasbanned from dealing inpotato futures, intro-duced oil futures. In suc-cession,cameFMingaso-line, crude, natural gasandoptions,andall kindsofderivatives.Inshort,WallStreet spec-ulators developed an elaborate ecosys-tem tobuild a grand casino.While oil FMis similar toVegas casi-

nos,there is abigdifference.In casinos,while some gamblers win,most gam-blers lose—the house alwayswin.Sim-ilarly, while the owners of FMs likeCME always earn money, it is a zero-sum game for participants. For everyloser, there is a winner. However, theprice volatility (negative price) mayresult in non-participants (oilexporters and importers) losingorwin-ning billions of dollars.During the last twomajorpricewars

(1986 and 2014), there was hugevolatility caused byspeculators, thankstotheFM.Ithadfar-reaching impactontheworldeconomyandgeopolitics.Oneof the arguments to support FM is thatit causes less volatility compared to thepricing regime before 1978. If oneexcludes the periods when neither the

Texas Railroad Commission in the USmarket nor, later,major oil companiesin the international market oversawpricing decision, there was no suchvolatility. Even during these times of“control”, supply and demand funda-mentals influencedprices throughspotprices in the Rotterdam andMediter-raneanmarkets.Theoil industryseemstobe theonly

thatundergoesdramaticchangeswhenprices fall. Still, it is a mystery that theWorld Bank, the IMF, the UN—inter-ested in strategies to help developingeconomies—havenot studied theprob-lem of stabilising oil prices. There are,however, hundreds of policy papers onthe impact of petroleumsubsidyoncli-mate change and how it distortseconomies. But, not one study focusesonways to stabilise the oilmarket.The collapse in oil prices may have

precipitated the collapse of the SovietUnion,lossofoil revenuesmayalsohavehelpedbring the Iran-Iraqwartoend in1987—these are the only the pleasantoutcomes.On the other hand, civil-warsituations in several OPEC nations(Nigeria,Iraq,Iran,Venezuela,Libya,etc)

brought about or exacer-bated by volatility couldhave been avoided. Simi-larly, oil prices goingabove $100 led to riots inimporting countries.Price collapse can

result in bankruptcy ofoilcos, affecting millionsof livelihoods. Talentedprofessionals may seekemployment inothersec-tors.Unfortunately,econ-omists believe such col-lateral damages areworthpayingso that“freemarket can discoverprices through the

futuresmarket”.When the FM discovered $147 per

barrel in July2008,orit reacheda lowofnegative $40 per barrel in April 2020,whatkindofpricingsignaldid it sendtooilcos in terms of future investment?Will any oilco base its investment deci-sionbylookingat futuresmarket foroilin 2030? In fact,when futures marketwas first introduced,major oilcos andOPECdidnot participate.One reason cited to justify FM is

hedging. For airlines, there may besome justification for hedging for sixor eight months. However,with a bet-ter system, like posted price or somemodified system, hedging may not benecessary.In the long history of oil, onlywhen

supply and demand was controlled,there was price stability. It is time wedevelop such a stable pricing mecha-nism,andstoptreatingtheoilmarketasa huge gambling casino.

AKVERMAFormer IFS officer.Views are personalBHAMYV

SHENOYFormermanager, Conoco, and former board

member of the national oil company ofGeorgia.Views are personal

Paying ahighprice

Oil futures markets need serious reform,orevenwholesale junking, given the volatility

they engender hurts many stakeholders

ILLUSTRATIONS: ROHNITPHORE

When the futuresmarket discovered$147 per barrel inJuly 2008, or itreached a low ofnegative $40 perbarrel inApril 2020,what kind of pricingsignal did it send tooilcos in terms offuture investment?

ASBLEARY-EYEDEuropeanssquint in thesun,freshlyreleasedfromcoronaviruslock-downs,worriesaboutasecondwaveofinfec-tions are oneverybody’smind.Life cannotreturncompletelytonormaluntilavaccineis available.What sort of semi-normal lifemightworkinthemeantimeisthebigques-tion.Swedenmayholdtheanswer.In March, when governments across

Europe seemedtobecompeting to imposethe toughest anti-viral measures—fromclosing borders to forbiddingpeople from

venturing out even for a walk—Swedenresisted the temptation.It bannedgather-ings ofmore than50people.Butnurseriesand schools for children under 16 haveremained open (with older students tele-learningfromhome).Bars,restaurantsandgymsalso stayedopen,thoughwithsocial-distancingrules.Peoplewereaskedtoworkfromhome if they could.And the elderly,whoaremostatriskofdyingifinfected,weretoldtostayathometoprotectthemselves.Swedenchosethispathbecauseitlooked

at the longer term,says JohanGiesecke,anepidemiologistadvisingtheauthorities.Fulllockdowns are stop-gapmeasures,he says,andEuropeangovernments rushed toputtheminplacewithoutplansforwhatwouldreplacethem.Swedeshavebeensensible.Useofpublic

transporthas fallen significantly.Athirdof

people say theyavoid going to theirwork-place (byworking from home, for exam-ple)—upfrom10%inmid-March.Dailyrestaurantturnoverfellby70%in

themonth throughApril 22nd.Elisabeth

Peters,who is 67 and lives on one of theislandsoffthewestcoastofSweden,believestherehas beena“huge change”inpeople’sbehaviour,alignedwithofficialadvice.Somepeoplearenotseeingtheirgrandchildrenat

all now, she says.When her children andgrandchildrenvisit everyone stays outsidealldayandkeepsatadistancefromherandherhusband.On first glance,Sweden seems to have

paidaheavypriceforchoosinglessstringentmeasurestokeeppeopleapart.ByMay13thit had recorded 33 covid-19 deaths per100,000 people, a rate more than threetimes that of Denmark and seven timeshigher than in Finland, which had shutschools and restaurants inMarch.Even so,Sweden’s mortality rate has been muchlowerthanthatinBritain,FranceandSpain.Swedes largely approve of their country’sapproach,with two-thirds saying in pollsthat the government is handling the epi-demicwell.Timewill tellwhetherSweden chose a

better strategy than other countries,says

JussiSaneoftheFinnishInstituteforHealthand Welfare, because the costs of lock-downs—intermsnotonlyofeconomicdam-age but also harm to people’s mentalhealth—areyettobetallied.Europeancountrieswillseemorecovid-

19deathswhenpeoplestartmovingabout,because the share of those infected so far(and thuspresumably immune,at least forsome time) is still in the single digits.MrGieseckereckonsthatStockholmwillreach“herdimmunity”,the40-60%rateofinfec-tionneededtohaltthespreadofthecoron-avirus,by June.He thinks thatwhenEuro-pean countries count deaths a year fromnowtheirfigureswillbesimilar,regardlessofthemeasures takenand thenumbersnow.TheeconomicdamageinSweden,however,maybesmaller.¦

©TheEconomistNewspaperLimited

●MIXED SIGNALS

THE NEWYORKTIMESBeijing, May 15

CHINAHASTURNED itsfactoriesbackonafter bringing the coronavirus outbreaklargely under control within its borders.The question now is who will buy thegoods those factoriesmake.Industrial production surged last

monthinChinamorethantwiceasfastasmost economists expected, according toofficial data released on Friday by thecountry’s National Bureau of Statistics.Butretailsalesfellevenmoresharplythananticipated, while orders for futureexports fromChina have stalled.Chineseofficialsarestartingtoacknowledgeamis-matchas theeconomyreopens.China’s factoryoutputrose forthefirst

timethisyearastheworld’ssecond-largesteconomyslowly emerged from its coron-avirus lockdown,although consumptionremained depressed amid increased joblosses. Of particular concern for policy-makersaheadofnextweek’sannualmeet-ingofparliament is theprospectofaspikeinunemployment,whichposessignificantpolitical risks forthenationof1.4billion.“The recovery of the production side

maybe slightly faster than the consump-tionside,”saidLiuAihua,thedirectorgen-eral of the agency’s department of com-prehensive statistics.The world is watching China’s eco-

nomic performance closely. It is a couplemonths ahead of the rest of theworld incopingwith the virus and then trying toreopen businesses. Its successes or stum-bles couldoffer lessons toothers.Despite signs of progress, the task

remains formidable.The Chinese econ-omy shrank in the first threemonths ofthis year for the first time sinceMao diedin 1976. Inventories of unsold goods arepilingup.Shoppersarestayinghome.Fac-tories are churning out clothes, toys andelectronicsfasterthanconsumersinChinaoroverseaswant tobuythem.As thevirusspreads around, surveys of purchasingmanagers in China showed export orders

plunging inApril.“We should be aware that given the

continuousspreadoftheepidemicabroad,the stability and recovery of the nationaleconomyis still facedwithmultiple chal-lenges,”MsLiusaid.The difficulties are promptingmore

andmorewarningsthatChina—andpos-siblyother countries after it—mayface a“W-shaped”patternofeconomicactivity.

REUTERSBerlin, May 15

The German economy plunged into arecessionaftersufferingitssteepestquar-terlycontractionsince the2009financialcrisis as shops and factories were shutdown inmid-March to fight the spreadofthecoronavirus,preliminarydatashowedonFriday.The2.2%first-quartercontractionwas

a foretaste ofworse to come.Economistsexpectadeeperslumpinthesecondquar-terasthelockdownextendedwellintoAprilandearlyMayandsectorsliketourismandin-doorgastronomyremainshut.Still, Germany appears to be fairing

betterthanneighbouringFranceandItaly,whoseeconomiescontractedby5.8%and4.7%respectivelyin the firstquarter.This is partlydue to a decision byGer-

many's 16 states to allow factories andconstruction sites to stay open and anunprecedented rescue package byChan-

cellor Angela Merkel's government,including state aid that allows employersto switch employees to shorterworkinghours toavoidmass layoffs.Outputdataforthefourthquarterwas

revised to a contraction of 0.1% from apreviously reported stagnation, whichmeantGermanywastechnicallyinareces-

sionaftertwosuccessivequarterlyoutputslumps,thedata showed.“Thingswill getworse before they get

better,”CarstenBrzeskiof INGsaid.“Tobemoreprecise,incomingdatawillbeworse,even though theworst might already bebehindus.”He added: "If today's data are the

result of two weeks of lockdown, threemore weeks of lockdown and a verygradual lifting of some measures donot bode well for the second quarter."Meanwhile, the euro zone economy

saw its deepest contraction on record inthe first threemonths of the year againsttheprevious quarter,as expectedbymar-kets,data showed on Friday,as a result oflockdowns introduced inMarch to slowthecoronaviruspandemic.TheEUstatisticsofficeEurostatsaidina

flashestimatethatthegrossdomesticprod-uctofthe19countriessharingtheeurocon-tracted3.8%quarter-on-quarterfora3.2%year-on-yearfall,asexpectedbyeconomists.

Up to $8.8 trn in globallosses possible:ADB

China’s factory output rosefor the first time this yearbut jobs gloomkeepsconsumers at home

Foxconn's Q1 profittumbles almost 90%TAIWAN’SFOXCONNPOSTEDanalmost90%drop in first-quarterprofitonFriday,as thecoronaviruspandemicdisruptedproductionandhitdemandfromAppleandothermajorclients.Theworld’s largestcontract electronicsmanufacturerreportednetprofit ofT$2.1billion forthe January-Marchquarter,fallingwell shortofaRefinitivconsensusestimateofT$8.88billiondrawnfrom14analysts.

USjobopeningsdroptolowest level sinceMay‘17USJOBOPENINGSplunged inMarchto the lowest level sinceMay2017astheCovid-19pandemicbeganunleashing itsdevastating impactontheeconomy.Thenumberofavailablepositionsplummeted to6.19millionfromarevised7million inFebruary,according to theLaborDepartment’sJobOpeningsandLaborTurnoverSurvey,orJOLTS,releasedFriday.

JD.combeats revenueestimates inQ1JD.COMFORECASTA20%to 30%rise in revenue,demonstrating howoperating its ownwarehouses anddelivery fleet is helping thee-commerce giantweatherChina’seconomic slowdown.Revenue atChina’s second largest online retailerrose a better-than-expected 21% intheMarch quarter. Investors expectedJD to better endure the downturn.

QuickView

US factoryoutput postsrecorddrop

InternationalFINANCIALEXPRESS8 WWW.FINANCIALEXPRESS.COM

SATURDAY, MAY 16, 2020

REUTERSWashington, May 15

THETRUMPADMINISTRATIONonFridaymovedtoblockshipmentsofsemiconduc-tors toHuawei fromglobal chipmakers,inanactionrampinguptensionswithChina.TheUSCommerceDepartment said it

wasamendinganexport rule to“strategi-cally targetHuawei’s acquisition of semi-conductors that are the direct product ofcertainUSsoftwareandtechnology.”Commerce SecretaryWilburRoss told

FoxBusiness“therehasbeenaveryhighlytechnical loopholethroughwhichHuaweihas been in able, in effect, to useUS tech-nologywith foreign fab producers.”Rosscalled the rule change a “highly tailoredthing to trytocorrect that loophole.”ThereactionfromChinawasswiftwith

areportsayingitwasreadytoputUScom-paniesonan“unreliableentitylist,”aspartof countermeasures in response to thenew limits on Huawei, China’s GlobalTimes reportedonFriday.Themeasuresincludelaunchinginves-

tigationsandimposingrestrictionsonUScompanies such asApple,Cisco Systems,Qualcomm as well as suspending pur-chase of Boeing airplanes, the report saidherecitingasource.Reuters first reported the news ahead

of the Commence Department’s release.The department said its “announcementcutsoffHuawei’seffortstoundermineUSexport controls.”TherulechangeisablowtoHuawei,the

world’sno.2smartphonemaker,aswellasto Taiwan’s Taiwan SemiconductorMan-ufacturing, amajor producer of chips forHuawei’s HiSilicon unit aswell asmobilephonerivalsAppleandQualcomm.TMSCannounced lateThursday itwouldbuild a

$12billionchip factoryinArizona.TSMC said Friday it is “workingwith

outsidecounsels toconduct legalanalysisandensureacomprehensiveexaminationand interpretation of these rules. Weexpect to have the assessment concludedbefore the effective date,” the companysaid,adding the“semiconductor industrysupplychain is extremelycomplex,and isserved by a broad collection of interna-tional suppliers.Huawei,which needs semiconductors

for itswidelyused smartphones and tele-comsequipment,isat theheartofabattlefor global technological dominancebetweentheUnitedStatesandChina.Huawei, which has warned that the

Chinesegovernmentwouldretaliateiftherulewent intoeffect,didnot immediatelycommentonFriday.

REUTERSManila, May 15

GLOBALECONOMIC LOSSES caused bythe coronavirus pandemic could bebetween$5.8trillionand$8.8trillionthisyear,theAsianDevelopmentBanksaidonFriday, more than double its earlierestimates as containment measuresparalyseeconomies.The ADB’s forecast, equal to 6.4% to

9.7% of global gross domestic product,wasworsethanprojectionsinAprilwhenitsaid the global economy could sufferbetween $2.0 trillion and $4.1 trillion inlosses, depending on how long contain-mentmeasureswere inplace.“This new analysis presents a broad

picture of the very significant potentialeconomic impact of Covid-19,” saidADBchief economistYasuyukiSawada.“It alsohighlightstheimportantrolepolicyinter-ventionscanplaytohelpmitigatedamagetoeconomies.”Measures to contain the spread could

inflict$1.7 trillion to$2.5 trillion ineco-

nomic losses in Asia, and between $1.1trillionand$1.6trillioninChina,theADBsaid.The ADB said the upper end of therange assumed curbs onmovement andbusinesses lasting sixmonths,while thebottom end assumed they would lastthreemonths.

SELECTIONSFROM

ASSOCIATED PRESSBaltimore, May 15

US RETAIL SALES tumbled by a record16.4% fromMarch to April as businessshutdownscausedbythecoronaviruskeptshoppers away, threatened storesacross the country andweighed down asinkingeconomy.The Commerce Department’s report

Fridayonretailpurchasesshowedasectorthat has collapsed so quickly that salesover the past 12months are down a crip-pling21.6%.ThesharpestdropsfromMarchtoApril

wereatclothiers,electronicsstores,furni-ture storesandrestaurants.A long-standing migration of con-

sumers toward online purchases is accel-erating,withthatsegmentpostinga8.4%monthly gain.Measured year over year,online sales surged21.6%.For a retail sector already reeling from

the migration of consumers to onlineshopping and to app-based delivery ser-vices,aback-to-back free-fall in spendingposes a grave risk.Department stores likeNeimanMarcus and J Crewhave filed forbankruptcyprotection.Hotels,restaurantsandautodealershipsare indanger.Clothing-store sales tumbled 79%,

department stores 29%. Restaurants,someofwhicharealreadystartingtoclosepermanently, endured a nearly 30%decline despite shifting aggressively totakeoutanddeliveryordersAnApril analysis by a group of acade-

mic economists found that a one-monthclosurecouldwipeout31%ofnon-grocerretailers.Afour-monthclosurecouldforce65%toclose.The plunge in retail spending is a key

reasonwhytheUSeconomyiscontracting.Purchases at retailers are amajor compo-nentofoverallconsumerspending,whichfuels about70%ofeconomicgrowth.Other than online, not a single retail

categorywasspared inApril.

EUROPEHERD ON THE STREET

Its avoidance of a hard lockdown is unusual, but Swedesthink it is working

Is Sweden’s approach toCovid-19wiseor reckless?

❝❝ ❝❝

HISTORYREPEATS ITSELFElon Musk, Tesla CEO

In his 18th Brumaire essay (inwhich he doesmakesome good points), Marx famously said historyrepeats itself, first as tragedy, then as farce.This isnow ironically happeningwithMarxism

America sees retail salesplungea record16%

China has fiveCovid-19vaccinecandidates inhuman trials,withmore comingBLOOMBERGMay 15

CHINAHAS A total of five possible vac-cinesforthecoronavirusalreadyinhumantrials and more will be approved nextmonth,signaling theAsiannation’s rapidprogress in the race for immunisation.The five vaccines have been tested on

more than 2,000 people in phase II trialswhich are expected to finish in July, saidZengYixin,viceminister of the NationalHealthCommission,atapressbriefingonFriday in Beijing.Phase II is the second ofthreephasesofhumantrialsthatmedica-tions must go through before beingapproved forgeneraluse.No serious side effects have been

reportedyetamongphaseIIpatients,saidZeng, adding that more vaccine candi-dateswill be approved to go into humantrials in June.

ASSOCIATED PRESSWashington, May 15

AMERICAN INDUSTRY SUFFERED themost severe plunge on record lastmonthwithfactories,minesandutilitiesbatteredbythecoronaviruspandemic.TheFederalReservesaidFridaythatits

industrial production index tumbled arecord 11.2% in April. Manufacturingoutputalsopostedarecorddrop—13.7%— as production of cars, trucks and autoparts plummeted more than 70%. Pro-duction of aerospace and other trans-portation products,metals and furniturefellaround20%.Outputdropped6.1%atminesand0.9%atutilities.TheimplosionoftheUSindustrialsec-

torwasnotunexpected,butthescaleofthecollapse was stunning. Jennifer Lee, asenioreconomistatBMOCapitalMarkets,wrote“onecan’thelpbutgrimace.”Industry was running at 64.9% of

capacity lastmonth,shattering theprevi-ous record low set in the Great Recessionyear2009.Factorycapacityutilizationalsohit a record low61.1%.Manufacturingmay get a boost over

the coming week as auto plants beginto reopen.“Auto output at the large factories is

slatedtoresumeonMonday,”saidStephenStanley,chief economist atAmherst Pier-pontSecurities,“soweshouldseeapickupinmanufacturingactivity inMay.”

❝❝ ❝❝

There has been a veryhighly technical loopholethroughwhich Huawei hasbeen in able, in effect, touse US technologywithforeign fab producers—WILBUR ROSS, COMMERCE SECY

SHUTTERS DOWN

■ The sharpest drops fromMarchtoAprilwere at clothiers,electronics stores, furniturestores and restaurants

■ Sales over the past 12monthsare down a crippling 21.6%

■Clothing-store sales tumbled79%, department stores 29%

■ Restaurants endured a nearly30% decline

TheADB’s forecast, equal to 6.4% to9.7% of global gross domesticproduct,wasworse thanprojections inApril

German economyplunges intorecession; euro zoneQ1 contracts

GermanChancellorAngela Merkel

USmoves toblock chipshipments toHuawei

Global cases pass4.4millionDeaths reach302,000Recoveries

1.58million

MAPPINGTHEVIRUS

An experimental Covid-19 vaccine developedby cigarette maker BritishAmericanTobaccoPlc is poised to begin testing in humans. Pre-clinical tests of the vaccine showed a positiveimmune response, the London-basedtobacco company said on FridayPresidentDonaldTrumpon Fridayofficiallyintroduced a former pharmaceutical executiveand a four star-generalwhowill lead his crashcoronavirusvaccine effort, amid awhistle-blower’s criticism that the administration lackedaplan to combat theoutbreak.TrumpnamedGeneral Gustave Perna asCOOof“OperationWarp Speed,” likening it to theManhattanProject effort to develop the atomicbombTheWorldHealthOrganization is pushing aproposal that aims to ensurebroad access toCovid-19 treatments andvaccineswhileoffering an appropriate reward to creators.Under theplan,whichwasproposedbyCostaRica, pharmaceutical companieswouldbeasked tovoluntarily donate their Covid-relatedintellectual property to a commonglobal poolOne in three UKworkers are in jobs deemedvital during the coronavirus lockdown, andmany of them are at heightened risk of

contracting the disease.TheOffice for NationalStatistics said on FridayFiatChrysler is in talks to obtain a state-backedcredit line ofabout $6.8 billion to strengthenthe carmaker’s financial buffer against thesteepdownturn causedby the coronavirusAll closedSwiss border crossingswill bereopenedby the first halfofnextweek incoordinationwithGermany andAustria, ChristianBock, director at the Swiss Federal CustomsAdministration, told reporters in Bern.People in theNorth ofEnglandanddiabeticsare farmore likely todie fromcoronavirus, datacompiledby theUKnational health serviceshow.More than aquarter ofall fatalities fromCovid-19werepeoplewithdiabetes

Patients given themalaria drug toutedbyPresidentDonaldTrumpas apotential treatmentforCovid-19did not improve significantly overthosewhodid not, according to findingsDenmark had its first daywithoutCovid-19relateddeaths in sincemid-March, evidencethat its strategyof lockingdownearly hassucceeded inbringing thevirus under control.Thenumber ofdeathswas unchangedat 537

Abbott’s virus test has potentialaccuracy issues, FDAwarnsVirus revivesworst-case

scenarios for US-China relationsChina unveils financial support

to tieHongKong,Macau closerEating out in Londonwill never

be the same againSingapore to allowmore

labourers to resumework

Chinese economylooksupas corona seeminglytamed

Motobahn

FE BUREAU

PORSCHEISEXTENDINGthefunctional-ityof its complimentaryvirtual coach fortheracetrack.Previouslyonlyavailableforsmartphones,thePorscheTrackPrecisionApp can nowbe operated directly on thecar’s screen usingApple CarPlay throughthe Porsche Communication Manage-ment(PCM)system.ThelatestVersion3.2offers Porsche drivers an additional 100pre-programmedracetracks,bringingthetotal number of international circuits tomore than 300.The training app is avail-able for all current-generation Porsche911and718models.Theuniquerangeoffunctions includes:◗Automatic recordingof lap times;◗Livedisplay—thelaptimershowscurrenttimeandspeeddeviation;

◗Driving footage recordedonsmartphonesoractioncamscanbecombinedwithavailabledataafterwards;

◗Drivingperformanceanalysis;◗TheAppleWatchappallowsrecordingtobestartedandstoppedandmonitorsthedriver’spulse;

◗ Individualdrivingexperiencescanbesharedonsocialmedia.

Virtual coachfor race trackThe Porsche Track Precisionapp gets more functions

VIKRAMCHAUDHARY

ONTHURSDAY,MGMotorIndia selectedVoxomos as the third start-up under itsMGDeveloperProgram&Grantinitiative,started last year to promote smart tech-nologieswithin India.Voxomos, foundedbyIITgraduates,offersasuitecomprisingneural text-to-speech (Indian languagesand accents), speech-to-text, voice bio-metricsaswellasnatural languageunder-standingandconversationalAI.Goingforward,Voxomos’sAIplatform

can enable voice-related capabilities forMGMotor in India.“Voice technology isthe future, andVoxomos’s solutions canfind relevance both in the field of con-nected cars and at various back-endprocessesatMG,”saysGauravGupta,chiefcommercial officer,MGMotorIndia.Voice is also thenext revolution in the

automotive sector as it is changing thewhole paradigmofuser interface invehi-cles. Already, the Hector and ZS EV, thecompany’scarsinIndia,usei-SMARTcon-nected car technology that, among otherthings,getsvoicecontrolbyNuanceCom-munications,anAmericanMNC.“WewillmentorVoxomos,andeventu-

allygivetheirsolutionamorecommercial

aspectand industryusage,”addsGupta.Voxomos CEO Sandeep Kumar, an

alumnusofIITKanpur,saysthattheyhavebuilt speech technologies from scratch,and these are tailored for the Indian con-text.“Weareworking in the lingoofmosturban Indians, i.e.Hinglish (mix of Hindiand English), and will work on regionallanguagesaswell,”he says.Now, after getting the MG grant,

Kumar believes Voxomos can scale upfaster.He also feels that the current voicecommands used in MG India cars needindigenisation.“Wewill discuss this fur-therwith them (MG),”he says.AndwhileVoxomos is open to talking to other carcompanies,Kumar says that becauseMGMotor India was the first to recognisethem,if there is anopportunitywithMG,“wewill give thempriority.”The carmaker had earlier shortlisted

DriftlyElectric (a smartEVcharging solu-tions provider) and Innvolution Health-care (aplayer in fieldofventilators) underitsDeveloperProgram&Grant initiative.

WhatwillVoxomos do forMG?The start-upwill work onvoice technologies that canbe used not just in cars, butalso inmany other areas

FE BUREAU

WHILEINApost-lockdownworldamajor-ityofIndianswouldpreferprivatevehiclesto reduce the odds of catching the conta-gious virus, theywould also look for eco-nomical commuting options leading to afurtherincreaseintheadoptionoflowandcity speed electric scooters,believes HeroElectric,theelectric two-wheelermajor.SohinderGill,CEOofHeroElectric,says

thatapart fromeaseofuseand lowmain-tenance,switching frompetrol to electrictwo-wheelerswouldalsoreduceanytravelpit-stops at fuel stations,given that elec-trictwo-wheelersare supported byportable batter-ies, furtherincreasing theconcept of con-tactless trans-portation. “Thelatest Harvardreport of theadverse effect ofairpollutiononCovid-19patientsisaneyeopener.Giventheupcoming‘newnormal’era,consumerfocusonsustainablemobil-ity options,preference of sensibly pricedelectric two-wheelers, and reluctance ingoing back to the overcrowded publictransportsystem,weforeseeanexponen-tialincreaseinthenumberofelectricvehi-cles on the road post-lockdown,”he says.“Wehaveawide rangeof electric scootersthat have zero tail-pipe emissions,priced`40,000-70,000,andextremelylowrun-ningcosts.”TomaketheadoptionofEVseffortless,

Hero Electric had also announced anonline sales schemeon its entire range.

E-scootersmayseemore sales

FINANCIALEXPRESS9 WWW.FINANCIALEXPRESS.COM

SATURDAY, MAY 16, 2020

Contactless travel,economicmobilityand sustainablecommute optionsmay lead tomoreadoption of

electric scooters

● FOR PORSCHE USERS

●CRAFTED IN INDIA

Voice is the next revolution in auto sector; it’s changingthewhole paradigmof user interface in vehicles.

—GauravGupta, chief commercial officer, MGMotor India

EXPERTVIEW

Hero Electric foresees risein EV adoption post-Covid

Acar on a stampAUTOMOBILILamborghiniandBit-stampshavelauncheddigitalstampvia an app designed to create andcollect stamps.The first collabora-tionisdedicatedtotheHuracánEVORWDSpyder,themodel Lamborgh-iniunveiledatthebeginningofMay2020, following the company’sreopeningafterCovid-19shutdown.

Thestampispartofa seriesded-icatedtothehistoryofthecompanyand over 20 of itsmost iconic cars:The Automobili Lamborghini Col-lection.TheHuracánEVORWDSpy-derstamp is availablebydownload-ingBitstampsapp,and is issued inalimited edition of 20,000 pieces.Each stamp is a single digital objectand its uniqueness guaranteed byblockchain.It canbepurchased,col-lected,orresold likeapaperstamp.

—FEBUREAU

Aeris starts SmartFleet PlatformAERIS COMMUNICATIONS, theIoTmajor, has launched its SmartFleet Platform. This is industry’sfirst end-to-end connected plat-form and telematics solution forfleetowners.“Theofferingmanagesfleetson

a single platform and comeswithunique features to helpmaximisefleet efficiency,operational excel-lence,” the company said. Some ofSmartFleetPlatformare:

◗Live trackingofvehicles;◗B2Bwebportal&mobileapp;◗Singleviewdashboard;◗Complete tripdataanalytics;◗Alertsonspeeding, crash,theft;◗Navigationwith route search;◗Geofencing,immobilisation;◗EMIand insurance reminders.

—FEBUREAU

VIKRAM CHAUDHARY

ACCORDINGTO INDUSTRY body SIAM(Society of IndianAutomobileManufac-turers), the Indian two-wheeler segmentdeclined by 17.76% in FY20 over FY19,with sales of 1,74,17,616 units in FY20compared to 2,11,79,847 units in FY19.Analysts say the demandwas underpres-sure due to high ownership costs (highinsurance,increasedfuelcosts,newsafetynormsandtransitiontoBS6)amidstover-allweakeconomy.AccordingtoCARERat-ings, a credit rating agency, the last suchdouble-digit decline was seen threedecadesago,inFY92.Andthenthe lockdownhappened.In a post-Covid-19 lockdown world,

some analysts argue that with peoplerefraining fromusing public transport, atendencytowardspersonalmobility,espe-cially two-wheelers and small passengercars,couldofferhope.“Two-wheelers fit verywell in the cur-

rentschemeofthings,astheneedforcom-mutingwill riseandpublic transportmaytake some time to fully open up. Evenwhenitopens,socialdistancingnormswillensurefewpeoplewilltakeit,”saysGauravVangaal,associatedirector,IHSMarkit.“Asectionofpeoplewhousepublictransportmight shift to two-wheelers.”Also,someprospectivecarbuyers,Van-

gaal argues,may consider premium two-wheelers.“Two-wheelersmakemoresensebecause there is congestion in our citiesandparking issueswithcars,”headds.However, Yadvinder Singh Guleria,

director,Sales&Marketing,HondaMotor-cycle and Scooter India, sayswe are read-ing toomuch into it.“If you analyse thebuyerprofile,theneedsandrequirementsare different (of two- and four-wheeler

buyers).Usually, there isn’t a direct com-petitionbetweenthese two,”hesays.Guleria does argue that some users of

public transportmay shift to bikes.“Thisshiftmayhappen.Butwill the size of the

market increase just because of that, it istoo early to say.We don’t even knowhowtrendssuchaswork-from-homeandsocialdistancingwill playout,”headds.ArecentCARERatingsreport‘Willper-

sonal mobility take the two-wheelers on alongride?’notesthatthedemandforauto-mobiles is expected to remainmuted atleast till H1-FY21.“Nearly 50% of two-wheelersarefinanced,withNBFCshavingapredominant share…thegeneralhealthofNBFCsisstillnotatease,”thereportsays.Yamaha India, a major player in the

premium two-wheeler space (150cc-plusmotorcycles and125cc scooters),expectstheremaybe some car buyers shifting topremium bikes. Ravinder Singh, seniorvice-president,YamahaMotorIndiaSales,says thatwhile car buyers have a set aspi-ration and value they look for in a car, incurrent times theremaybesomewhooptfor premium two-wheelers.“We cannotpredicthowmuchthebuyingpatternswillchange, but it’s a good opportunity fortwo-wheelerplayers to look into,”he says.Singhaddsthatsomeonewhowantsto

buy a second car in family could, instead,considerpremiummotorcycles.Of late,a lot of carmakershave started

entirely online car sales, but such a shiftcould be tough in the two-wheeler space.“At the end of the day, a customer has tovisitadealershiptotakedelivery,andthengoforregistration.Butwecanreducea lotofphysical touchpoints,”Singhsays.GuleriaaddsthatcertainRTOsrequire

physical presence of the customer,and atsome places the vehicle also needs to bethere.“Unlessthoserulesgetchanged,it isdifficult to convert a two-wheeler buyingprocessentirelyonline,”hesays,addingthesame holds true for financing. “Whilesomebanks have turned the loan processentirely online, in the case of NBFCs noteverything is currentlyprocessedonline.”As the lockdown gets lifted,gradually,

June-August periodwill lay the ground-work forthe festive seasonandnextyear.

File photo of a two-wheeler showroom in urban India

With a section of people expected to refrain fromusingpublic transport for awhile, could it offer hope for

personalmobility, especially two-wheelers?

Two-wheelersin fora long ride

● POST-LOCKDOWN

HAVL REPORTEDA subdued Q4,withsales/PATdippingby-20%/-12%y-o-y,missing JEF and consensus estimates.WhileJan-Febwitnessedarevivalincon-sumer products, COVID contagionimpacted demand frommidMar'20.Ascited byHAVL,ex-Covid,Q4 sales couldhave been +9%y-o-y (9MFY20 at -1%).Q4 op-marginwas at 11.1% (11.4% inQ4FY19). Lloyd saw good traction tilloperations ceased inmid-March (q-o-qmargin+160bps).Highlights: Q4FY20: HAVL's Q4

salesstoodat`22.2bn(-20%y-o-y)withop-marginat11.1%(-30bpsy-o-y);PATwasat`1.8bn(-12%y-o-y).Ad-spendtosalesdippedto1.4%(3.7%inQ4FY19).Q4isseasonallythestrongestquarterforHAVL, generally accounting for 27%-30%ofannual sales.

FY20:HAVL’sFY20salesstoodat`94.3bn (-6%y-o-y)withop-margin at10.9%(-90bpsy-o-y);PATat`7.3bn(-7%y-o-y).Aspercompany,ex-Covid,annualgrowthcouldhavebeen+2%y-o-y.Revenue:Q4FY20 segmental sales

split was as follows: (i) Switchgears`3.5bn (-14%y-o-y); (ii) Cables`6.8bn(-24% y-o-y); (iii) Lighting `2.6 bn(-23%y-o-y); (iv) ECD `4.6 bn (-14%);and (v)Lloydat`4.6bn (-14%y-o-y).ContributionMargin:Q4FY20seg-

mental margin was as follows:Switchgears at 34.4% (39.3% inQ4FY19); Cables at 12.3% (17.5%);Lighting at 27.1% (25.9%); ECD at24.6%(25.7%);Lloydat9.7%(15.0%y-o-y; 8.0%q-o-q).Margins declined dueto under-absorption ofmanufacturingexpenses amidst lowervolumes.Cablesmarginwas also impacted due to sharpfall incommoditiesandpricingpressuredue toweakdemand.Balance Sheet:HAVL continues to

showcase a robust balance sheet.As ofMar'20, the companyexhibits nil lever-age;netcashisat`10.7bn.Workingcap-ital improvedto38days,comparedto42

daysasofMar’19.Current Status: As cited by HAVL,

operations are graduallybeing restored.Salesmarketshave resumedona limitedbasis.A fewplants have resumed opera-tions,thoughwithlimitedmanpower.Fewwarehousesandofficeshavealsoopened.Buy: HAVL has corrected by ~35%

YTDandiscurrentlytradingatPEof35x/28xonFY21/22eearnings.WecurrentlyhaveaBuyonHAVLwithPTof`660(38xFY22 EPS). Key Risks: extended slow-down, subdued traction in Lloyd, RMvolatilityandpricingpressures.

JEFFERIES

NESTLE’SQ1CY20 revenue,EbitdaandPATgrowth of 10.8%,5.3%and13.4%y-o-y surpassed our estimates.Thiswasthetenthconsecutivequarterofdouble-digit domestic sales growth—up10.7%y-o-y—largely riding volume andmix.Exports revenue grew12.9%y-o-y forthe first time in five quarters as lowercoffee exports to Turkey are now in thebase.Highcommodityprices continuedtodraggrossmargin (down223bpsy-o-y).Costcontrol—alikelycut inadspends(other expenditure down 168bps y-o-y)—aided Ebitda margin a tad, whichdippedonly125bpsy-o-y.Thatsaid,Nestlecontinuestooutper-

form peers and is likely going to be theonly FMCG company to report positivedomestic sales growth in Q1CY20. Itshigh innovation & premiumisationagenda and cluster-based distributionstrategyarealsoontrack,andwebelievethis will sustain. Extension of MD foranother five years is a positive as well.MaintainBuywithTPof`19,215.

OutclassingpeersForQ1CY20,thecompanyposteddomes-ticrevenuegrowthof10.7%y-o-y,whichmarks the tenth consecutive quarter of

double-digitdomesticrevenuegrowth.Itwill most likely be the highest amongconsumer goods companies led byvol-ume and mix. It surpassed Godrej

Agrovet’s Creamline’s dairy revenuegrowth,which came in at 5% y-o-y inQ4FY20.Exports revenue grew12.9%y-o-yaslowercoffeeexportstoTurkeyarenowinthebase.Despite the disruption caused by

COVID-19-related lockdown,MAGGI,KITKAT and Nestlé MUNCH deliveredstrongperformances.Out-of-homecon-sumptionwas negatively impacted bylockdown leading to a subdued perfor-mance whereas contribution fromecommerce benefiting from the lock-downwentupsignificantly.Higherrawmaterial price led to fifth

consecutive quarter of gross margincompression;weexpectmarginpressuretopersistoverensuingquartersaswell.

Outlook:BestqualityThefocusoninnovation,launches,mar-ket share and premiumisation is likelytoboostvolume-ledgrowth.Besides,thecompany’s new strategy—top line andmarketsharefocus—isencouraging.Thesuccess of launches, entry in new seg-ments,proactivemanagementandfur-thermarginimprovementledbypremi-umisation have led to the stock’sre-rating to a historically high PE.WeretainBUY/SOwithTPof`19,215 (65xone-yearforwardEPS).AtCMP,thestockis tradingat65.8xCY21eEPS.

EDELWEISS

Nestle India continues tooutperform peers;marginpressure likely to persistin future; ‘Buy’ retainedwith TPof `19,215

Covid-19 painwas visiblein results; balance sheet isrobust; ‘Buy’maintainedwith target price of `660

●HAVELLS INDIARATING: BUY

Asubdued showing inthe final quarter

Investor●NESTLE INDIARATING: BUY

Astandout performance by company

(` mn) Q4FY20 Q4FY19 % Y-o-Y Q3FY20 % Q-o-QNet sales 22,161 27,535 -19.5 22,699 -2.4Ebitda 2,453 3,149 --22.1 2,690 -8.8Ebitda Margin (%) 11.1% 11.4% -0.4 11.9% -0.8PBT 1,971 3,006 -34.4 2,324 -15.2Reported PAT 1,766 2,006 -12.0 1,995 -11.5Reported EPS (`) 2.8 3.2 3.2Source: Jefferies, company data

Havells India - quarterly snapshot

Year to Dec Q1CY20 Q1CY19 % chg Q4CY19 % chg CY19 CY20E CY21E

Total op inc 33,253 30,030 10.7 31,492 5.6 1,23,689 1,31,320 1,49,855Ebitda 8,006 7,605 5.3 6,864 16.6 28,127 30,549 35,705Adj. Profit 5,254 4,633 13.4 4,730 11.1 19,696 21,870 25,594Dil. EPS (`) 54.5 48.0 13.4 49.1 11.1 204.3 226.8 265.4Diluted P/E (x) 85.5 77.0 65.8EV/Ebitda (x) 59.1 54.3 46.3ROAE (%) 70.3 101.3 96.5Source: Company data, Edelweiss research

Financials (` million)

● BANKERS DISAPPOINTED

SHRITAMABOSE &ANKURMISHRAMumbai, May 15

THE CREDIT GUARANTEE scheme formicro,small andmediumenterpriseshasleft bankers unhappy as the guarantee isnot beingofferedbythe government,butfrom the credit guarantee trust fund formicroandsmall enterprises (CGTMSE).The loan guarantee scheme formicro,

small andmedium enterprises (MSMEs)will not be available to businesseswhichhadrepaymentsoverduebymorethan30daysasonFebruary29,2020,accordingtothe draft guidelines issued by the SmallIndustries Development Bank of India(Sidbi).

“Wewere expecting the guarantee onloans to come from the government ofIndia, but it has come from CGTMSEinstead of being a sovereign guarantee,”theheadofapublic-sectorbank(PSB)toldFE.“CGTMSE has its caveats..it does notgive you the full money,which is lost,”headded. For stressed MSMEs and thosewhose loans have turned bad,a `20,000-croresubordinateddebtschemehasbeenenvisaged.The interest rate on additional emer-

gencyfundinghasbeencappedat1%overa bank’s marginal cost of funds basedlending rate (MCLR) and at 14% for nonbanking financial companies (NBFCs).Lendersbelievetheinterestratesarejusti-

fied as therewill be some capital charges.“When government guarantees a loan,capitalchargesbecomezero,butincaseofCGTMSE guarantee, there will be somecapital charges,”a secondbankertoldFE.The draft guidelines state that the

guarantee schemewill apply to all addi-tional emergency credit lines sanctionedtoMSMEsafterMarch1,2020tillAugust31,2020.Theamountofemergencywork-ingcapitalfundingwouldbeequivalentto15%oftheworkingcapital forloansupto`1crore.Forloansbetween`1croreto`25crore the emergency working capitalfundingwould be equivalent to 10% oftheworkingcapital.“In case the amount of emergency

fund as per above threshold is not able tocover sixmonths of salary outgo (includ-ing contractual worker) for peopleemployed byMSME, theworking capitalfundhastobeenhancedtotheamountof6monthsofsalaryoutgo,”thedraftguide-linessaid,addingthatlendersmustobtainnecessary proof to ascertain the salaryoutgooftheMSME.“ThisistoensurethatMSMEsdon’t layoff anyemployeedue tothe lack of funds.” In case a borrower hasexistinglimitswithmorethanonelender,the emergency funding limit can beavailedwithonlyone lender.

FE BUREAUMumbai, May 15

INDIA’S FOREIGN EXCHANGE reservesroseby$4.235billionto$485.313billion,just shy of the previous life-time high of$487billion,in theweek toMay8.

Since end-March, the forex reserveshave risen $7.5 billion.The reserves hadpreviously shrunk as the rupee remainedvolatile.However,thereserveshavegrownand are short of the life-time high of$487.24 billion recorded in theweek toMarch 6.During the previousweek, the

reserveshadrisenby$1.622billion.Compared to the year-ago period, the

forex reserves have risen by$65.257 bil-lion.Over the previousweek, foreign cur-rencyassets (FCA),which formakeycom-ponent of reserves,rose by$4.233billionto$447.548billion.

FE BUREAUMumbai, May 15

FRANKLINTEMPLETONMUTUAL Fund,which shuttered six debt schemes inApril,will soon start thevoting exercise so thatinvestorsstartgettingtheirmoneyback.Thefundhouse has also said that the trusteeswillappointanindependentadvisortoassistwiththeliquidationoftheportfolios.In a letter to investors on Thursday,

Franklin TempletonAsset ManagementpresidentSanjaySapresaid thereasonfor

windingup these six schemeswas to pre-serve thevalueof investmentsandreturnthemoneyat theearliest.However, this would require vote of

unit holders and authorisation for thetrustees to take thenext steps as perReg-ulation41ofSEBI (Mutual Fund)Regula-tion 1996. “Once the trustees receiveauthorizationfromyou,nextstepsincludemonetisation of assets and distributingmonies from the respective schemes.Animportant point to note is that the pay-ment schedule/payouts can only be

finalised and implemented,post the suc-cessful completionof thevotingprocess,”saidSapre in the letter.Over the next few days, Trustees of

FranklinTempletonMFwillsendinvestorsinthesixschemesunderwindingup,anemailwitha“notice”relatedtothe“votingprocess”.Thenoticewillbesentforeachschemesepa-rately.Thevotingactivitywill beconductedseparatelyforeachofthesixschemes.Inotherwords,an investor inoneormore schemeswouldberequiredtovoteseparatelyforeachschemetheyholdinvestmentsin.

India’s forex reserves increase by $4.24 billion to $485 billion

FranklinTempletonMFgets in touchwith investors forvoting

Banks bet big on digital channels post Covid

Lenderswere expectingthe guarantee on loans tocome from government;schemewill not beavailable to businesseswith repayments overduebymore than 30 days as onFebruary 29,2020

AU Small FinanceBank promoter sellsshares worth `100 crCHIRANJEELALAGARWAL,oneof thepromotersofAUSmall FinanceBank,onFridaysoldmore than24 lakhsharesof thecompanyfor`100crorethroughanopenmarket transaction.According to theblockdealdataavailableonBSE,Agarwal sold24,12,000sharesof thecompanyatanaveragepriceof`414.6pershare.At thisprice,the transaction isvaluedat`100crore,thedata showed.

GooglePaycase:HCseeksresponsefromRBI,govtTHEDELHIHIGHCourthas soughtresponseof theReserveBankof India(RBI) andtheCentreonaplea seekingactionandsuspensionofoperationsof theGoogle IndiaDigital Service inUPI through its application‘GooglePay’till it fullycomplieswithinteroperability.JusticeAshaMenon,whoconducted thehearing throughvideoconferencing,issuednotices totheRBI,theCentreandGoogle IndiaDigital Serviceandgranted themthreeweeks to file theirresponses.

PaytmPaymentsBanklaunches‘CashatHome’PAYTMPAYMENTSBANKonFridayannouncedthelaunchof‘CashatHome’facilityforsenioranddifferently-abledcitizenssothattheydonotneedtostepoutduringthisCOVID-19pandemic.ThisnewservicewillenablethemtoraisecashwithdrawalrequestsontheirPaytmPaymentsBankappandtherequestedamountwillbedeliveredattheirhome.

HindustanZincapprovesdividendof`16.50/shareTHEBOARDOFHindustanZinc (HZL),asubsidiaryofVedanta,hasapprovedaninterimdividendof`16.50perequityshareforFY20amountingto`6,972crore.Vedantaowns64.9%stake inthecompany,while thecentreretainsa29.54%stake.

Deadlineforbrokerstosubmitreportstill June30MARKETREGULATORSEBIonFridayextendedthedeadline forbrokers tosubmit reportsonclient fundinganddailymargin till June30 in thewakeof thecoronaviruspandemic.This isthe second instancewhentheregulatorhasextendedthedeadlineforcompliance. Thedecisioncomesafterreceivinga representation fromstockexchanges,theSecuritiesandExchangeBoardof India (Sebi) said inacircular.The regulatorhasgiventimetill June30tobrokers forsubmitting reportsonclient fundingforthemonthofApril andMarchquarterreportsonapps.

QuickView

MarketsFINANCIALEXPRESS10 WWW.FINANCIALEXPRESS.COM

SATURDAY, MAY 16, 2020

FE BUREAUMumbai, May 15

BANKSHAVEBEEN seeingan increase inthe number of customers acquiredthroughdigitalchannelsinthepost-Covidera. Pre-existing digital platforms havebeenhelpingbankskeepbusinessgoinginthe retail segment in termsofbothassetsand liabilities,bankers said.Speaking at a webinar hosted by

MicrosoftIndia,AnoopMahapatra,deputymanaging director, State Bank of India(SBI), said the lenderhas been originatingloans through itsYonomobile app.“IfyoulookintotheecosystempostCovid,thelia-bilitiesarenotanissue,butnowitcomestothe asset side,”he said, adding,“We havemultiple AI-enabled pre-approved loanproducts.Wehaveend-to-enddigitalloanson the Yono platform.We have alreadysanctioned 10 lakh loans themomentwe

launched it.”The bank has also come upwithmultiplepre-approvedloanproductsandtheyhavehelpedbuildmomentuminassetbuild-upamidthe lockdown.Axis Bank has also been relying on its

digitalplatformstopushcustomerengage-ment.RatanKesh,executiveVP,AxisBank,saidthat40,000-50,000employeesof the

bank are currentlyworking ondevelopingleadsfromhomewhileaccessingcustomerdatainasecuredenvironment.“Werampedupourplatformforopeningaccounts.Ouraccount-opening run rate has gone up by50%frompre-Coviddaysfromtheself-ser-vicechannel,ortheASAPmodel,”Keshsaidduringthewebinar.ASAPis thebank’sdig-italsavingsaccountproduct.The lockdownmaybe leadingbanks to

comeupwithnewcategoriesofcreditprod-ucts.For instance,SBI isworkingonsmall-ticket loans for its rural customer base.ThroughUnifiedPayments Interface (UPI)transaction records of small traders, thelender is identifying likely candidates forfinancing.It is alsoworkingonasmall-loanproductforJanDhanaccount-holders,whichwillofferthesecustomersloansintherangeof`10,000-40,000.“These are thekindofpossibilitiesnowbecause they (customers)haveadigitalfootfall,”Mahapatrasaid.

Money Matters

Apr 30 May 15

6.472

6.520

The benchmark yieldremained unchanged

00.0%

G-SEC

Apr 30 May 15

Inverted scale

75.58

75.10

The rupee depreciatedon global cues

0.012%

`/$

Apr 30 May 15

1.0794

1.0955

The euro fell againstthe dollar

0.102%

C=/$

❝❝ ❝❝

RETURNON INVESTMENTSanjay Sapre, president, Franklin Templeton India

FranklinTempleton is committed to ensuring anorderly and equitable exit for all investors at theearliest possible time andwehave beenworking hardto expedite the process of returning yourmoney.

MSME loanguaranteeto come fromtrust fund BHAVIK NAIR

Mumbai, May 15

THEFIRSTCENTRALgovernmentsecuri-tiesauctionaftertheannouncementoftheadditional borrowing by the governmentsawdecent response from the bondmar-ket on Fridaywith the governmentman-aging to borrow`4,000 croremore thanthenotifiedamountof`30,000crore.Market participants say that anticipa-

tionof announcements fromtheReserveBankofIndia(RBI)inregardtotheabsorp-tionofadditionalgovernmentborrowingiskeeping thebondmarketoptimistic.On Friday, the government auctioned

threesecurities—bondsmaturingin2024,2033and2050—intendingtoraiseatotalof `30,000 crore. Of these, the papersmaturingin2033and2050sawbidsmorethan three times the notified amounts of`11,000 crore and `7,000 crore respec-tively.Bonddealerssaythatthecut-offyieldswerealso in linewithmarket expectations.Meanwhile,theyieldonthenewbenchmarkbondsclosedflatat5.78%onFriday.Siddharth Shah, head of treasury at

STCIPrimaryDealer,toldFEthemarkethasbeenexpectingthattheRBIwillannouncemeasures regarding the absorption of theadditional borrowing and that is keepingthehopeshigh.“Theoptimismisreflectingintheyieldsaswellas intheG-secauctionwherethegovernmentmanagedtoborrowmore than the notified amount.The cut-offyields have alsonot gone toohigh.The

bond market expects the central bankshould introducemeasures to absorb thewhole of the additional borrowingannouncedbythegovernment,”Shahsaid.Marketparticipantsbelievethatdespite

thehugefiscalpackageworth`20lakhcrorebeingannounced,theactualcashoutgomaybewithin theboundaries of the additionalborrowingannouncedbythegovernment.Lastweek,thegovernmentannounced therevisedgross borrowing target forFY21at`12 lakh crorewhichmeans anadditional`4.2lakhcrorewouldbeborrowedthisyear.Experts are of the opinion that the centralbankshouldbeannouncingmeasures thatwould result in the absorption of a goodchunkofthisadditionalborrowing.VijaySharma,seniorexecutivevice-pres-

identatPNBGilts,saidtheactualcashoutgopertaining to the fiscal package should bewell within the additional borrowingannouncedbythegovernment.“WeexpecttheRBI to conductOMOpurchases to thetuneof`3lakhcroreandthis isaconserva-tiveestimate.Rightnowitisthishopethatiskeepingthebondmarketpositive.Anydelayin the near term by the central bank inannouncing thesemeasureswill be takennegativelybythemarkets,”Sharmasaid.

FE BUREAUChennai, May 15

EQUITASSMALLFINANCEBank (ESFBL)asubsidiaryofEquitasHoldings,haspostedanet profit of `244crore for theyearendedMarch31,2020ascomparedto`211croreinthepreviousfinancialyear,registeringanincrease of 15.6%. ESFBL’s total incomegrewby22%to`2,927.8 croreduring theyearfrom`2,394.83fromthepreviousyear.The ratio of gross NPAs to advances

grew to 3% from 2.53% in the previousyearwhile the percentage of net NPA toadvancesroseto1.66% from1.44%,saida regulatorydisclosure bythebank.ESFBL said that the lockdown had led

to significant disruption and dislocationof individuals and businesses, impactingregular banking operations such as lend-ing,fund-mobilisationandcollections.Ithasmadeaprovisionof`99.63crore

intheperiodendedMarch31,2020,basedon assessment of recoverability ofadvances, after considering the internalandexternal informationandnormspre-scribedbytheRBI.ESFBLgrantedamora-toriumofthreemonthsonpaymentofallinstallments and interest falling duebetweenMarch1andMay31,2020 toalleligibleborrowers.

FE BUREAUMumbai, May 15

INDIAN EQUITIES ENDED the day flatafter a choppy trading session on Friday,as the stimulus measures failed toimprovesentiment.Makingmattersworsewerenewsofris-

ingtensionsbetweenUSandChina.The50-shareNiftyended theday5.9points lowerto close at 9136.85, while the Sensexdeclined25.16pointsor0.08%tocloseat31,097.73.The benchmarks so far inMayhave declined by 7.3% to 7.7%, respec-tively.Foreignportfolioinvestors(FPIs)con-tinuedtosellequitiesonFriday,offloadingsharesworth$314.58million.Ontheotherhand, domestic institutional investorsboughtequitiesworth$161.44million.Thebenchmarkindicesturnedvolatile

during the last hour of tradewhere theywent intothepositiveterritorybrieflybutended the day flat.The benchmarks areending theweek in the negative for thesecond straightweek.SorbhGupta,asso-ciate fund manager, Quantum MutualFund,said,“TherallyinAprildidnotreflectthe economic reality. However, as andwhen the corporate results come out andmanagementcommentarybecomesmoremeaningful, themarketwill start havingmore realistic reactions.”FinanceministerNirmalaSitharamanin

the third tranche of fiscal stimulusannouncements targeted the agriculture,fisheriesandalliedsectors.Sofar,thefinanceministerhasannouncedmeasurestargetedatMSMEs,non-bankingfinancecompanies,migrantworkers,aswell as streetvendors.The equity markets have had a tepidresponsetothemeasuresannouncedsofar.Accordingtoexperts,therearen’tmanymea-sures in thecurrent fiscal stimuluspackagetoinciteabigresponsefromthemarket.“The measures may not do much to

cheerupthemarketsbesidesthemeasureson NBFCs that would help ease theirstress,” said Sorbh Gupta. According tohim,the current governmenthashistori-callyfocusedonsupplysideissuesandtheannounced fiscal stimulus has done thesamewhichmay not lead to creation ofdemand.He explained that the economymaywitnessanatural revivalofdemand.OntheNSE,theF&Osegmentsawthin

volumesworth `5.61 lakh crore againstthe six month average of `14.21 lakhcrore.Thecashmarketsawvolumesworth`43,660.14 crore against the sixmonthaverage of `40,898 crore. Indian bench-marks underperformed most globalbenchmarksduring theday’s tradingses-sion.Asianmarkets started the day on apositivenoteextendingthegainsmadebyDowJonesduetotheopeningupoftheUSeconomyafter the lockdown.They,how-ever,made cautious gains on rising US -

Chinatensions.ThebenchmarksinSinga-pore,SouthKorea andTaiwanwere up by0.05%to0.3%.Themarkets inChinaandHong Kong were down by 0.07% and0.14% respectively. European marketswere positivewith the bourses in France,United Kingdom and Germany up by0.3% to 1.27% respectively.Dow JonesMini futures were down by 243 pointsaftertheTrumpadministrationmovedtoblocksemiconductorshipmentstoChina-based telecomgiantHuawei.Bankingstockswereattheforefrontof

sellingonFridaywithNiftyBankdownby1.23%. The biggest losers among thebanking stockswereBankofBaroda,Fed-eral Bank,Bandhan Bank,Axis Bank andRBL Bank, declining by 3.7%, 3.52%,3.42%,3.27%and2.7%,respectively.AccordingtoareportbyICICISecurities,

as the fearof income loss rises,the skewedasset allocation of the Indian householdstowardslargelyilliquidphysicalassets(95%of assets in property,vehicles,machinery,gold,among others) could incrementallyshift towards relatively liquid and safeassets.“Webelievefinancial intermediariesinsectorssuchasinsuranceandbankswithstrongbrandloyalty,provenretailfranchise,strong execution and cleanbalance sheetsshouldbenefitincurrentenvironment,”saidICICISecuritiesinitsreport.The biggest losers on Nifty were

Mahindra andMahindra, Zee Entertain-ment,Axis Bank,Bharti Infratel and UPLwhichwere downby4.6%,3.6%,3.27%,3.15%and3%.ThegainersonNiftywereVedanta,Bharti Airtel,BPCL,Asian PaintsandTataSteelthatwentupby3.8%,2.7%,2.62%,2.14%and1.7%,respectively.Sec-torally,thebiggestloserswereNiftyMedia,NiftyPSUBank,NiftyRealty,NiftyPrivateBank, and Nifty Bank. The only gainerswereNiftyMetalandNiftyFMCG.Amongthebroader indices,theNiftyMidcapwasdown by 0.2% whereas Nifty Smallcaptraded flatdownby0.03%.

FE BUREAUMumbai, May 15

MAHINDRAFINANCEONFridayreporteda 62% year-on-year (y-o-y) drop in itsstandalonenetprofitat`221crorefortheMarchquarterasitsetaside`563croreasCovid-relatedprovisions.At the consolidated level, Mahindra

Finance’snetprofitfell66%to`239crorefor the quarter endedMarch 2020.“Thecompany,inordertocoverthecontingen-cies thatmay arise due to Covid–19 pan-demic,hasincorporatedthemanagementoverlaysintheimpairmentlossallowanceand the total provision recognised in thestatement of profit and loss during thequarter is `562.60 crores,” MahindraFinancesaid inastatement.The company saw its customer base

cross 6.8million during the quarter.Thestandalone assets under management(AUM)stoodat`77,160croreasonMarch31,2020,up 12% from`68,948 crore asonthecorrespondingdate lastyear.RameshIyer,vice-chairmanandman-

aging director, Mahindra Finance, saidthat over 75% of the company’s cus-tomers had availed the loanmoratorium.“The oneswho did not (take themorato-rium) largely belong to the farming com-munity, where they felt that their cashflowswould improve and theywould beable to pay,” he told analysts during the

post-results call.The company has already reopened

around 500 of its branches in green andorangezonesandisseeingwalk-insforbothnewloans and repaymentof installments.Since the harvest has been good this yearacrossstates,farmincomesarelikelytoholdwell,Iyer said.The companysawsomecol-lectionshappenedinAprilandthosemadeinthefirst15daysofMayhaveslightlysur-passedtheamountcollectedinApril.Volume growth could still be some

timeaway,though.“EvenbeforetheCovidimpact,we had said that anynormalcy tobusinessvolumes could be seenonlypostOctober,that is, the festival season,and itcontinues to appear that itwill only arisearoundthat time,”Iyeradded.Total income increased 8% y-o-y to

`2,676croreduringQ4FY20.Thegrossnon-performingassets (stage-3) fell to8.44%ofthebusiness assets,as onMarch31,2020,from8.5%intheDecemberquarter.ThenetNPAratiostood5.98%,downfrom6.7%ofthebusinessassetsattheendofQ3.Thestage-3provisioningcoverageratiostoodat31%,upfrom22.9%intheDecemberquarter.

PRESSTRUSTOF INDIAMumbai, May 15

NON-BANKING FINANCIAL companies(NBFCs) on Friday requested the ReserveBankof India (RBI) toallowthemtodraw-downfromtheirreservesformakingaddi-tionalprovisionforexpectedlossesduetoCovid-19pandemic.“WeurgeuponRBItoconsider,asaone-

time measure, to allow NBFCs to draw-down from their Reserves and adjusttowardsadditionalExpectedCreditLosses(ECL) provision requirement, in excess ofprovision calculated as pernormal Proba-bility of Default (PD) and Loss GivenDefault(LGD),”FinanceIndustryDevelop-mentCouncil(FIDC),arepresentativebodyofassetsandloanfinancingNBFCs,saidina lettertoRBIgovernorShaktikantaDas.

`GST Network

`

G-sec auction seesgood response

NBFCs urge RBI to allowdraw-downfrom reserves forCovid provisioning

Govt package fails tocheer upmarketmood

Anticipation of announcementsfrom the RBI in regard to theabsorption of additional govt

borrowing keeps market optimistic

Equitas Small FinBank net up 16%

Mahindra Fin posts 62%drop in net profit

Bank Nifty19,098.8

18,833.95

Open Close

Intra-day, May 15

18,600

18,740

18,880

19,020

19,160

Banking stockswere at theforefront of selling on Fridaywith

Nifty Bank down by 1.23%

At the consolidated level, MahindraFinance’s net profit fell 66% to`239 crore for the quarter ended

March 2020