CORPORATE UPDATES 04.02.2019

BOARD OF BANKRUPT COMPANIES CAN ACCESS DOCUMENTS: SC

The erstwhile boards of bankrupt companies will now have access to vital documents including proposed resolution plans of the companies they ran, while participating in the meetings of the lenders, the Supreme Court has ruled. The apex court in its order dated January 31 also ruled, however, that in allowing the directors of the company to participate and review critical documents the resolution professional can take an undertaking from them in the form of a non-disclosure agreement to maintain confidentiality of the resolution plans. The SC was hearing an appeal filed by Vijay Kumar Jain of Ruchi Soya, who has challenged the orders of NCLT and NCLAT that had allowed him to attend the committee of creditors (CoC) meetings but asked him to not insist upon being provided information considered confidential either by the resolution professional or the committee of creditors. Counsels representing Jain had argued that since the directors are participants in the meetings, albeit without voting rights, they need to be given the documents to participate effectively They also said that since the resolution plan is binding on the company along with guarantors and other stakeholders, the board of directors may contain persons who may have given personal guarantees for the debts and thus have a stake in what gets passed by the lenders.

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LENDERS GET CHANDRA, AMBANI AND GOYAL TO MOVE FASTER ON DEBT PILE

With bankers unwilling to relent, corporates with huge pile of debt are moving fast to ensure that they do not lose control of their companies. While Subhash Chandra-backed Essel Group has managed to convince its lenders to give it time till September 30, Anil Ambani-promoted Reliance Communications on Sunday said it plans to propose a similar debt resolution plan in the National Company Law Tribunal as was being earlier pursued with creditors. This comes even as Naresh Goyal is fighting it out with Jet Airways’ lenders to keep control of the debt-ridden airline. Essel Group entities’ share price has been under pressure due to fears of a default. In a second round of meeting with lenders, the company has managed to convince bankers that there will not be an event of default declared till September 30. This consent provides the required amount of time for the Group’s management, to complete the strategic sale process of its key assets. RCom’s asset sale plan has been stuck due to legal and regulatory complexities. Lenders’ patience is running out as they have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway. RCom said there is lack of 100 per cent consensus as mandated by RBI’s, on all important issues, amongst over 40 lenders, Indian and foreign despite the passage of 12 months and over 45 meetings. Therefore, RCom’s management will propose a similar debt resolution plan in the NCLT process, as was earlier being pursued outside NCLT.

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IN ANIL AMBANI’S RCOM BANKRUPTCY, GOVERNMENT IS LIKLEY A LOSER

With Anil Ambani’s Reliance Communications (RCom) filing for insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), the government might be staring at a potential loss of spectrum dues worth Rs 2,900 crore. RCom owes the Department of Telecommunication (DoT) Rs 2,900 crore for spectrum, against which it had given a corporate guarantee of Rs 1,400 crore. The company last week decided to approach National Company Law Tribunal (NCLT) under Section 10 of the IBC. The resolution process would remain the same as in the case of proceedings initiated by an operational creditor, which means that DoT — an operation creditor — is likely to be paid after financial creditors as per the IBC rules, Punit Dutt Tyagi, Executive Partner, Lakshmikumaran & Sridharan, told Financial Express Online. In case of a resolution, the spectrum would be considered as the assets of RCom and the resolution professional will have a right to use the same; in case of liquidation, spectrum will go back to DoT but the telecom department will fall even below unsecured financial creditors, Punit Dutt Tyagi said. However, the question of selling RCom assets, or liquidation, would come only if the resolution fails. RCom said it took the decision to file for insolvency as the proposed asset monetisation plan with Reliance Jio failed to make any progress. The DoT had refused to clear the deal as none of the two parties — RCom or Jio — was taking payment liability for the guarantee. The decision to move National Company Law Tribunal (NCLT) has been taken following DoT’s refusal to clear the spectrum sale deal between RCom and Reliance Jio. RCom, which owes DoT Rs 2,900 crore and had given a corporate guarantee of Rs 1,400 crore in compliance with the Supreme Court order in order to get the department’s approval to proceed with the spectrum sale plan. However, with Mukesh Ambani’s Reliance Jio reportedly refusing to take any payment liability of RCom after the deal, DoT refused to give its nod. The department had been of the opinion that under the circumstance where both the parties are not in the position to take the responsibility of payment of dues, the telecom department cannot take the deal on record, news agency PTI reported.

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ERICSSON TO MOVE SC TO SEEK SEIZURE OF ANIL AMBANI ASSETS

Ericsson is set to file an application in the Supreme Court, pleading that all personal assets of Reliance Communications chairman Anil Ambani be seized for breaching the top court’s order to repay the Swedish telecom equipment maker its dues. Ericsson has chalked out its options to ensure it gets its settlement amount of Rs 550 crore, people aware of the developments said. Petitioning to freeze personal assets of Anil Ambani is one of them, one of them told. The fear of losing out is further stoked because as per a recent order of the apex court, operational creditors are not at par with financial creditors who have the first claim over money coming through insolvency proceedings.

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RCOM DIVES 50% AS TELECOM OPERATOR APPROACHES NCLT

Shares in Reliance Communications fell sharply by over 50 per cent on Monday as the company said it will move the insolvency tribunal for bankruptcy protection The move, the telco said, will help it sell assets in a time-bound manner, having failed to do so in the past 18 months. The RCom stock was down by more than 50 per cent at one point, trading at Rs 5.30 on the NSE. Following RCom's statement on Friday, Ericsson now is set to file an application in the Supreme Court, pleading that Reliance Communications Chairman Anil Ambani's all personal assets be seized for breaching the top court’s order to repay the Swedish telecom equipment maker its dues.

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HOW INDIA'S BANKS RAN UP A $7 BILLION PHONE BILL

For a capital-starved economy, India shows little urgency to extricate good money stuck in failed businesses. That was going to change after the adoption of a modern bankruptcy regime in May 2016. Alas, legal improvements notwithstanding, the culture of extending the life of bad loans to big businesses and pretending nothing is wrong with them is proving too hard to end. Take Reliance Communications Ltd. After more than a year and a half of kicking the can down the road, the erstwhile Indian telecom operator is filing for bankruptcy. Even in March 2017, when RCom owed creditors $7 billion, it was clear that tycoon Anil Ambani’s telecom venture stood no chance in a crowded field against elder brother Mukesh Ambani’s shiny new 4G carrier, Reliance Jio Infocomm Ltd., and its offer of cheap data and free voice calls. Yet in June 2017, creditors decided to go along with an out-of-court restructuring, wherein RCom would merge its wireless carrier with rival Aircel Ltd.; sell its cellular towers to Canada’s Brookfield Infrastructure Group; swap some debt for equity; and deleverage. However, Aircel didn’t survive; RCom was forced to shutter its own mobile service; Brookfield developed cold feet; and creditors demurred from taking RCom equity after its share price collapsed. But even then, Indian banks didn’t knock on the doors of the bankruptcy courts. In December 2017, after the company had defaulted on a $300 million dollar bond, they backed a new plan by the younger Ambani brother to offload spectrum, towers, fiber and media convergence nodes to the elder sibling’s Jio. Together with commercial redevelopment of RCom’s Mumbai property, the proposal was supposed to lead to a decent recovery. This time last year, dollar bondholders expected to get back almost 70 cents on the dollar. However, 2018 went by with little progress on the 250 billion rupee ($3.5 billion) deleveraging plan. The spectrum sale didn’t go through because India’s telecom department wanted a guarantee for the fees it’s owed for the airwaves before they would allow a new owner. Jio balked at that demand. An additional complication was equipment provider Ericsson AB, an operational creditor that threatened to drag RCom into bankruptcy; won a settlement offer; but never saw any checks. So far, family members of promoters —India’s term for controlling shareholders — were barred from bidding for their bankrupt firms without making banks whole first. But thanks to a recent court ruling, that ban now applies only to relatives involved in the business. Mukesh Ambani lost RCom to his brother as part of a 2005 division of their father’s empire; so he can play white knight. The legal process may take another nine months if everything runs like clockwork, which it seldom does in India.

State-run lenders, having wasted so much time already, are answerable for their dithering. They beg the government to recapitalize them and whine when the regulator forces them to mark down soured exposures. But apart from harassing smaller businesses, what do they do to untangle capital and return it back to the economy? In addition to Ericsson, China Development Bank, and even the telecom firm’s PR agency had at some point sought to invoke insolvency proceedings. Only Indian institutions, with most to lose, stood still; and now they don’t even get to appoint a resolution professional of their choice to run RCom once it’s in bankruptcy.

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SANJAY SINGAL MAKES ONE LAST BID FOR BHUSHAN POWER

Bhushan Power & Steel’s promoter, Sanjay Singal, has unveiled a last-minute bid to save his company from going under the hammer by offering creditors a proposal to repay their entire dues of Rs 47,151 crore The unexpected turn of events comes a day before a judgement is expected in one of the keenly watched insolvency proceedings that began 18 months ago. Tata Steel, JSW Steel and UK’s Liberty House are vying for the asset which initially generated tepid interest, but has since become a hotly contested one following an operational turnaround that saw capacity utilisation of 90% and sales growth over the past six quarters. A majority of its lenders had voted in favour of JSW Steel’s offer of Rs 19,300 crore for the company in mid-October. An appellate bankruptcy court is likely to pick the winner on Monday.

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SUBHASH CHANDRA'S ESSEL GROUP GETS TIME TILL SEPTEMBER TO REPAY LOANS

Subhash Chandra-led Essel Group on Sunday said it had secured a formal consent from lenders to service its debt including time till September 2019 to repay its loans. The second round of meeting with lenders comes a week after the first round when the group had sought to allay their fears on repayment. Mutual funds and non-banking financial companies were part of the meeting on Sunday, the group said, covering 96-97 per cent of the loan value. It is unclear whether public sector banks (PSBs) were part of this meeting. Speculation has been rife that PSBs are unhappy with the developments at Essel Group, prompting lenders such as Bank of Baroda and Credit Suisse to offload about 7.4 million Zee Entertainment shares on Friday amounting to Rs 267 crore.

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WHY RCOM’S NCLT MOVE IS GOOD NEWS FOR JIO

Reliance Communication’s (RCom) latest move to shift its debt resolution plan to NCLT could make it easier and cheaper for Mukesh Ambani led Reliance Jio to take over the assets of the Anil Ambani-owned telecom company. At the heart of Reliance Communication’s new move is the company’s ‘priced’ spectrum and fiber optics cable network that Reliance Industries (RIL) promoted telecom company RJio has set its eye on. Rcom has decided to move NCLT after unsuccessful attempts in securing Department of Telecommunication’s (DoT) nod to sell its assets to RJio. But the move by the debt laden company of Anil D Ambani may end up benefiting his elder brother controlled telecom venture. RJio, which had a definitive agreement to buy Rcom spectrum, may make all possible attempts to acquire the company's assets at substantially marked-down price either via presenting a debt resolution plan or in case if the company went into liquidation and auction, experts in telecom and insolvency told. DoT has pending spectrum dues of around Rs 2,950 crore receivable from Rcom and it had sought a bank guarantee from the company against these dues before allowing it to sell its assets to RJio. But promise of any such bank guarantee was sure to attract even other lenders and operational creditors or could have even put burden of entire debt on RJio. Now under the new insolvency and bankruptcy code (IBC), the bidder of assets of the company, which has filed for bankruptcy, has to first present a resolution plan that mainly involves huge hair-cut for all the lenders. If the resolution plan is not accepted the company goes into liquidation, which has the potential to lower the value of the assets further as it may take years before all assets are liquidated. Also, IBC matters have to be completed within 270 days unless lenders drag them to National Company Law Tribunal (NCLT) and courts. Creditors fear that failing to accept debt restructuring proposals may push the company towards liquidation, which could take years and lead to further mark-down of asset prices. Also, secured creditors, including banks, are placed third in preference order to receive the proceeds of liquidation, after meeting cost of resolution and worker dues. Before Rcom moved for IBC it was expecting to receive between Rs 15,000 to Rs 25,000 crore for its spectrum and other assets.

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APPELLATE TRIBUNAL DIRECTS NCLT TO CLEAR RTIL CASE IN TWO WEEKS

The appellate tribunal has directed the National Company Law Tribunal (NCLT) in Mumbai to complete the proceedings in the RTIL — formerly Reid & Taylor (India) Ltd — bankruptcy case within two weeks This is in view of the mandatory 270-day deadline provided to complete a resolution process under the Insolvency and Bankruptcy Code, 2016. In the RTIL case, the timeframe expired on January 1. At its hearing on Friday, the National Company Law Appellate Tribunal (NCLAT) noted the main submission of the appellant, Finquest Financial Solutions, that no entity could approach the tribunal for the first time after the deadline. On Thursday, a new investor, New Delhi-based Indian Gas, informed NCLT’s Mumbai Bench of its decision to bid for the beleaguered company, even as Gujarat-based CFM Asset Reconstruction (CFM ARC) withdrew from the race. Indian Gas had staked a claim stating it had a net worth of ₹1,500 crore. The NCLT bench of Bhaskar Pantulu Mohan and V Nallasenapathy directed the new bidder to appear before NCLAT on Friday and explain its bona fides and interest. India Gas was permitted to take part in the resolution process following the exit of CFM ARC. The tribunal also ordered that the deposit amount of ₹2 crore be refunded to CFM ARC.

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15 VENDORS MOVE HC FOR DUES FROM IL&FS

Fifteen vendors have filed an intervention in Nagpur bench of Bombay high court in an ongoing petition by Maharashtra Metro Rail Corporation Limited against Infrastructure Leasing & Financial Services Ltd (IL&FS), an infrastructure development and finance company. The vendors, through counsel Anand Parchure and Ram Heda, prayed for directives to MMRCL to release their payment on behalf of IL&FS, which didn’t pay them dues. A division bench comprising Justice Sunil Shukre and Justice Shreeram Modak directed to expedite the hearing of National Company Law Appellate Tribunal (NCLAT), scheduled on Monday, in the same case. It would help HC in achieving the interest of the citizens. Petitioner is granted liberty to take such steps before the NCLAT as permissible in law, the bench said, before adjourning the hearing till Wednesday. According to the interveners, they were engaged by the IL&FS for various works pertaining to Metro rail project, including supply of material and machinery. They contended that due to breach of contract by the IL&FS, the project work is getting delayed. The firm, which is facing bankruptcy, hadn’t refunded advances taken from the interveners. Even the bank guarantees availed by them were dishonoured. The MMRCL had taken Rs 108 crore bank guarantee from the IL&FS, which it wanted to encash after the firm failed to fulfil its contractual commitment. However, the NCLAT had granted a stay on realizing that bank guarantee, thus forcing MMRCL to knock HC’s doors. The vendors prayed for releasing their payments as soon as MMRCL takes charge of Rs 108 crore bank guarantee.

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INSOLVENCY AND BANKRUPTCY CODE: GOVERNMENT’S BEST BET AGAINST THE BAD LOAN MESS

Invoked initially in mostly dead cases transferred from the earlier regime, the Insolvency and Bankruptcy Code (IBC), which facilitates early detection and time-bound resolution of bad loans, has emerged as one of the most crucial laws enacted by the Modi government. To be sure, 54% of the Rs 65,797-crore recovery by financial creditors in the 79 resolved cases since the IBC’s inception in late 2016 came from just one large case (Bhushan Steel) and lenders had to take a steep 52% haircut in these cases, show the news-letters of the insolvency regulator. As many as 52% of cases were closed through liquidation The average time taken for resolution was 317 days, against 270 days stipulated under the IBC. Nevertheless, the IBC has proved to be far superior than the tools used earlier. According to an RBI report, banks recovered as much as 41.3% of their claims in cases where resolution took place under the IBC in FY18, against just 12.4% through other mechanisms such as SARFAESI Act, Debt Recovery Tribunals and Lok Adalats (mostly resorted to in the UPA era). The recovery under the IBC improved further this fiscal. With NPAs spiking and the efficacy of earlier tools waning, the government strengthened the IBC through a series of amendments and barred defaulting promoters from bidding for their assets (except for MSMEs). The increasing application of the IBC marks a clear shift in the balance of power in favour of creditors, instead of defaulters. The fact that Essar Steel promoters now want to clear all dues to retain control is a testimony to it. However, promoters’ dogged pursuit to hold on to their firms has put the law to its toughest test. Litigation has delayed resolution in high-profile cases. The good thing is the ministry of corporate affairs and regulator Insolvency and Bankruptcy Board of India (IBBI) have been swift in responding to the changing requirements of the nascent eco-system. IBBI has also tightened regulations to punish the successful bidders for backing out. The government has decided to raise the number of NCLT benches as well as members, among others, to help cut delay.

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MINISTRY OF FINANCE TO MERGE TWO REGIONAL RURAL BANKS IN TAMIL NADU

The Ministry of Finance has decided to merge two regional rural banks and name the new entity as Tamil Nadu Grama Bank. The banks include Pallavan Grama Bank (Sponsored by Indian Bank) and Pandyan Grama Bank (Sponsored by Indian Overseas Bank). The new entity, namely Tamil Nadu Grama Bank, will be under the sponsorship of Indian Bank, with its head office in Salem. The merger would be effective from April 1, 2019. In recognition of its strong financials, predominant presence in the state and preference among a larger section of populace in Tamil Nadu, Indian Bank is entrusted with the coveted responsibility of being the sponsor bank for the merged regional rural bank, which will have its presence in 32 out of 33 districts of Tamil Nadu (except Chennai) through its branches and field business correspondents, said the Indian Bank. Tamil Nadu Grama Bank reported around Rs 21,000 crore of business with 625 branches and 800 business correspondent outlets spread over the entire length and breadth of the state.

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SEBI ISSUES DIRECTIVE TO EXCHANGES, CLEARING CORPORATIONS USING AI TOOLS

Sebi has directed market infrastructure institutions, which are using applications based on artificial intelligence and machine learning, to make quarterly disclosures about it to the regulator. Market infrastructure institutions (MIIs), which include stock exchanges, clearing corporations and depositories, will have to make such disclosures to the regulator on a quarterly basis within 15 days of the expiry of the quarter, with effect from three months to March 2019, Sebi said in a circular. Sebi is conducting a survey and creating an inventory of the artificial intelligence (AI)/machine learning (ML) landscape in the Indian financial markets to gain an in-depth understanding of the adoption of such technologies and to ensure preparedness for any AI/ML policies that may arise in the future. MIIs need to report in a prescribed format about the name of the technology that is categorised as AI and ML system; type of area, where such tool is used, like order, surveillance and compliance; implementation of such projects; safeguards that have been put in place to prevent abnormal behaviour of the AI or ML application. All MIIs shall fill in the AI /ML reporting form in respect of the AI or ML based applications or systems offered or used by them, and submit the same in soft copy to Sebi on a quarterly basis within 15 days of the expiry of the quarter, with effect from quarter ending March 31, 2019, the regulator said. Technologies that are categorised under AI and ML include natural language processing -- sentiment analysis or text mining systems that gather intelligence from unstructured data. In this case, voice to text, text to intelligence systems in any natural language will be considered in scope.

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FOREX KITTY SWELLS BY $1.5 BILLION TO $398.18 BILLION

The country's foreign exchange reserves climbed by $1.497 billion to reach $398.178 billion for the week to January 25, mainly due to a jump in core currency assets, Reserve Bank data showed Friday. In the reporting week, foreign currency assets -- a major component of the overall reserves -- increased $1.423 billion to $372.149 billion, the Reserve Bank said. The value of the gold reserves also rose by $77 million to $21.921 billion in the reporting week, the apex bank said. It can be noted that the RBI has been buying bullion after almost a decade. During its fiscal year ending June 2018, the RBI had added 8.46 metric tonnes of gold. The central bank now holds 566.23 tonnes of the yellow metal. The purchase was made to diversify the foreign currency assets, the RBI had said in its annual report. Special drawing rights with the International Monetary Fund dipped by $0.7 million to $1.464 billion in the week. The country's reserve position with the IMF also decreased by $1.2 million to $2.643 billion, the apex bank said.

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SOVEREIGN GOLD BOND SCHEME 2018-19 (SERIES VI) ISSUED DATE FEBRUARY 12, 2019

In terms of the Government of India Notification No. F.No.4(22)-W&M/2018 and Press Release dated October 08, 2018, Sovereign Gold Bonds 2018-19 (Series VI) will be opened for the period from 4th February to 8th February, 2019. The Issue Price of the Bond during this subscription period shall be Rs.3,326 (Rupees Three Thousand Three Hundred Twenty Six only) – per gram with Settlement date February 12, 2019, as also published by RBI in their Press Release dated February 01, 2019. The Government of India in consultation with the Reserve Bank of India has decided to allow discount of Rs.50 (Rupees Fifty only) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors, the issue price of Gold Bond will be Rs.3,276 (Rupees Three Thousand Two Hundred Seventy Six only) per gram of gold.

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RBI’S FOREX SALE PROFIT TO HELP BRIDGE DEFICIT

The volatility in the foreign exchange and bond market is helping the government to bridge some of its fiscal deficit The Reserve Bank of India (RBI) is understood to have made record profits from selling dollars in the foreign exchange market when the rupee came under pressure. These profits are likely to be distributed to the government in the form of an interim dividend which will be considered in the next board meeting of the central bank. Subhash Chandra Garg said on Friday that the government expects an interim dividend of Rs 28,000 crore from the RBI This is in addition to the Rs 40,000 crore already received from the central bank during FY19, Garg said. The Rs 28,000-crore interim dividend will be transferred by the RBI before end March 2019. As a result, the interim dividend will help the government ease fiscal pressure as the money will come within the current financial year. The RBI, which follows a July-June financial year, paid about 63% higher dividend than the previous year (2016-17).

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BANK NPA ADDITIONS ON A DOWNWARD SPIRAL

Almost a year after Reserve Bank of India (RBI) asked banks to move to a stricter non-performing asset (NPA) recognition regime, there are clear signs of a moderation in fresh NPA additions with many large banks reporting a fall in this number every quarter so far this fiscal. New additions to NPAs for State Bank of India (SBI), ICICI Bank, Axis Bank and Bank of Baroda (BoB) were at their lowest in many quarters in the third quarter ended December. According to analysts, the trend is clear and banks can now seriously think of putting their NPA baggage in the past and work on improving their profitability in the months to come. Data from banking results shows that the addition on NPAs for these lenders is the slowest in at least a year. For ICICI Bank, the addition in NPAs in the third quarter was the slowest in more than three years while for SBI it was the slowest in more than four years. The Rs 4,523 crore NPAs SBI added during the quarter was the slowest since at least fiscal 2015, data available on the bank's website shows. New additions of bad assets had hit their peak for most banks in the quarter ended March 2018 after RBI's so-called February 12 circular forced banks to accelerate recognition of NPA. BoB added Rs 3,733 crore of NPAs in the third quarter ended December 2018, which was its lowest since the quarter ended September 2017 when it added Rs 3,451 crore NPAs. The story is similar among private sector banks. In the third quarter, ICICI Bank added Rs 2,091 crore of NPAs, its lowest since the first quarter of fiscal 2016 when it added Rs 1,672 crore in NPAs. Similarly, Axis Bank added Rs 3,746 crore in the quarter ended December its lowest since Rs 3,519 crore added in the quarter ended June 2017. The trend is clearly showing that problem assets have been recognised be it from the RBI mandated asset quality review (AQR) or the large accounts the central bank referred to the National Company Law Tribunal (NCLT) under the new bankruptcy code, said Lalitabh Shrivastawa. While some banks may still have to make legacy provisions, the additions to NPAs will be low to moderate. Analysts said the trend is suggesting a moderation is here to stay, which gives banks more certainty on provisions, improving profitability in the days ahead.

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TIMELINE FOR LIC TO REDUCE STAKE IN IDBI BANK DEPENDS ON BUSINESS MODEL: IRDAI

Insurance Regulatory and Development Authority of India (Irdai) will set a timeline for LIC to bring down its stake in IDBI Bank to below 15 per cent, its chairman Subhash Khuntia said. He clarified that the insurance giant has been given the approval to acquire 51 per cent stake on the condition of bringing it down to below 15 per cent over a period of time but the timeline would depend on the business plan of LIC for the troubled lender. We will have to ask them to bring down the stake. That is the condition under which they have been given permission. They have to bring down the stake to 15 per cent eventually, the IRDAI chairman told PTI. That ( timeline) we will have to fix. That is yet to be fixed. The condition that has been put is eventually they will have to bring down (below 15 per cent). How much time that will be, looking at their business plan and we will decide, Khuntia said. Replying to a query, the IRDAI chief said in exceptional cases, the regulator may allow other insurance companies to increase their stakes beyond 15 per cent.

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GOVT PROPOSES NATIONAL GOLD SPOT EXCHANGE, SEEKS TO ORGANISE TRADE

The government proposes to set up a single spot exchange for gold, finalising a method to organise the yellow metal's trade a year after the idea was mentioned in the 2018-19 Budget. The electronic exchange will oversee trade right from import, said a source privy to the development. Details on structuring and regulating the spot exchange are yet to be worked out. Currently, the price set by Indian Bullion Jewellers Association is regarded as a benchmark for spot markets and it is also used for fixing price of sovereign gold bonds. The Bombay Stock Exchange and Multi Commodity Exchange have proposed to set up the gold spot exchange The two exchanges will prefer to start spot trading on a platform for forward trading, allowing delivery at a different date than the date of the trade. The two exchanges are regulated by Sebi, which oversees forward trading but has no power over spot exchange. However, both exchanges are prepared to launch spot exchange for gold. China’s Shanghai Gold Spot Exchange works on this model, starting from selling imported gold first on the exchange. India, however, mines little gold, imports half of its domestic demand and refines 30 per cent of total imports. Refined gold is also imported in unrefined form.

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MARKETS REGULATOR SUMMONS MUTUAL FUND CEOS OVER ZEE TURMOIL: REPORT

A member of markets regulator Sebi or Securities and Exchange Board of India has reportedly summoned the chief executive officers of four mutual fund institutions and one credit ratings agency over the controversy surrounding Zee Entertainment Enterprises. According to a report by news agency IANS, CEOs of mutual fund houses Birla MF, ICICI MF, HDFC MF, Reliance MF and Brickworks have been summoned by Madhabi Puri Buch, consequent to the enforcement of securities by two lenders on Friday. The CEOs will be quizzed on the matter on Monday, in an apparent case for punitive action by Sebi, according to the agency.

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BANK OF INDIA HAS EXPOSURE WORTH RS 3,800 CRORE TO DHFL, SAYS MD MOHAPATRA

Bank of India has exposure worth Rs 3,800 crore to DHFL, said Dinabandhu Mohapatra, managing director and CEO of the bank, adding that the lender will take necessary steps regarding the same. Mohapatra said, We will continue to be careful. All these years we have posted good improvement quarter-on-quarter (QoQ) and we continue to concentrate on risk management and asset quality. Along with all these parameters, we will be focusing on profit Q4 onwards, he said. New slippages have come down and going forward also, it will be downward momentum only, he added. He further mentioned, Mudra loans amount-wise is not very big. Though, NPA may be around 5-6 percent as on today but then we have selectively disbursed under Mudra. Those who were already in business- we have selected those entrepreneurs so that going forward stress will be less and they are managing their assets well and it is all backed by guarantee by Mudra commission. We are concentrating on bigger assets where we have to improve very fast.

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E-COMMERCE POLICY TO HAVE NEW FDI NORMS

The upcoming policy to govern the country’s ecommerce is unlikely to provide for a separate regulator for the sector but will incorporate the recently updated foreign direct investment (FDI) norms. The Department for Promotion of Industry and Internal Trade (DPIIT) will hold a meeting with stakeholders including those companies and groups that were opposed to the tighter FDI guidelines, which became effective February 1, before finalising the policy. The government had turned down demands for an extension of the deadline. We will have a stakeholder meeting soon where FDI issues would be discussed. However, we are not sure if a separate regulator will be set up for ecommerce, said a senior official. With both ecommerce and retail trade in the department’s ambit, another agency is not required to regulate the sector, said another person. A draft ecommerce policy released last year had called for a sector regulator. However, the recently tightened FDI rules will make it to the policy along with more clauses to plug any loopholes that may be exploited by online platforms to engage in multi-brand retail. It also stipulated that the inventory of a vendor will be deemed to be controlled by the marketplace if more than 25% of the vendor’s purchases are from the marketplace entity, including its wholesale unit. The marketplace entity or its group companies cannot have control over inventory under the FDI rules.

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DHFL MESS MAY TRIGGER SECOND WAVE OF RISK AVERSION IN DEBT FUNDS

With DHFL group companies’ debt mess coming under lens, global brokerage Credit Suisse has warned that it could trigger a second wave of risk aversion in India’s debt fund industry. The DHFL debt mess is expected to have a resonating effect as the company is among the larger borrowers from mutual funds (MFs) and their aggregate exposure stood at around Rs 8,500 crore as of December 2018, the brokerage said. The banking sector’s exposure to DHFL group was about 40bps, it said. Investigative media outlet Cobrapost last Tuesday alleged Dewan Housing Finance (DHFL) had given Rs 31,000 crore loans to ‘dubious’ entities linked to the promoters who, the news portal said, were the ultimate beneficiaries of the funds. DHFL Chairman Kapil Wadhawan countered the charges, claiming all the transactions were legitimate. The Ministry of Corporate Affairs said it has ordered a probe into the Cobrapost allegations.

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FPIS PULL OUT RS 5,300-CR FROM CAPITAL MARKETS IN JAN

Foreign Portfolio Investors (FPIs) withdrew over Rs 5,300 crore from the Indian capital markets in January, indicating their ‘wait and watch’ approach ahead of the general elections. Prior to this, they had infused a net sum of over Rs 17,000 crore in the capital markets - equity and debt - during November and December 2018. In October, they had pulled out a massive Rs 38,900 crore. According to data available with the depositories, FPIs pulled out a net amount of Rs 5,264 crore from equities and Rs 97 crore from the debt markets last month, taking the total outflow to Rs 5,361 crore. Investors are taking a cautious approach given their focus on global headwinds and upcoming general election, said Vinod Nair. He further said the focus would continue to be on economic growth and the general elections. Other factors such as movement in crude prices and currency, which would have a bearing on the country’s macro-environment, and worries over global trade war will continue to guide the direction of FPI flows, Srivastava added.

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FIVE OF TOP-10 FIRMS ADD RS 65,426 CR IN M-CAP

Five of the 10 most valued Indian companies together added Rs 65,426.16 crore in market valuation last week, with Tata Consultancy Services (TCS) topping the list. Reliance Industries Ltd (RIL), HUL, ITC and Infosys were the other gainers, while HDFC Bank, HDFC, SBI, Kotak Mahindra Bank and ICICI Bank suffered losses in their valuation for the week ended Friday. The market capitalisation (m-cap) of TCS soared by Rs 41,914.13 crore to reach Rs 7,62,015.52 crore. The valuation of Infosys jumped Rs 11,511.39 crore to Rs 3,30,510.06 crore and that of Hindustan Unilever Ltd (HUL) surged Rs 9,362.11 crore to Rs 3,88,825.07 crore. ITC added Rs 1,969.9 crore to its m-cap to stand at Rs 3,43,965.03 crore while RIL’s valuation rose by Rs 668.63 crore to Rs 7,90,621.81 crore. On the other hand, the m-cap of HDFC plunged by Rs 2,854.33 crore to Rs 3,37,188.31 crore and that of ICICI Bank slumped Rs 1,657.93 crore to reach Rs 2,28,361.75 crore. Kotak Mahindra Bank suffered an erosion of Rs 1,344.92 crore to Rs 2,40,006.82 crore and State Bank of India (SBI) lost Rs 847.84 crore to Rs 2,53,726.02 crore. The m-cap of HDFC Bank slipped Rs 625.71 crore to Rs 5,69,029.07 crore. In the ranking of top-10 firms, RIL stood at the number one spot, followed by TCS, HDFC Bank, HUL, ITC, HDFC, Infosys, SBI, Kotak Mahindra Bank and ICICI Bank.

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BUDGET HAS GIVEN BANK FDS, REALTY AN EDGE OVER EQUITY

The Interim Budget proposal to hike tax deducted at source (TDS) limit on interest earned is likely to make bank deposits attractive which can even take some sheen off equities and mutual funds, say analysts. Real estate investment may also pick up following the Budget sops, they said. Among many popular announcements made in the Interim Budget 2019, Finance Minister Piyush Goyal proposed to raise the TDS limit on interest earned on bank deposits/post office deposits under Section 194A of Income-Tax Act to Rs 40,000 from Rs 10,000 currently. This will incentivise investors to put money in bank deposits, says SBI’s Economic Wing. It noted that hike in TDS limit was a long-pending demand. Many investors could benefit from this announcement. There were 23.9 crore term deposit accounts in banks as of March 2018, with an average per account balance at Rs 2.75 lakh, the bank said. Assuming 7.5 per cent rate of interest, on an average every term deposit holders would accrue interest income of Rs 20,000, out of which an investor at present has to pay TDS on Rs 10,000. Now, the FM proposes to raise the limit for TDS on interest income to Rs 40,000. This will provide big relief to small depositors and they may escape tax on term deposits up to Rs 5 lakh. Banks may see a surge in term deposits going forward, the bank said. Nirmal Bang Institutional Equities noted that domestic flows have been a key factor supporting equities in last 18-24 months. What triggered those flows, it said, was the demonetisation drive announced in November 2016. The cash ban led to real estate and fixed income losing charm as investment classes. Nirmal Bang said the changes proposed in the rules for the real estate sector, especially in terms of reinvestment of capital gains from property and notional rental income from second property make this asset class also incrementally more attractive.

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GUJARAT HC SENDS NOTICE TO TRAI OVER FIXING CABLE OPERATORS' PROFIT SHARE

The Gujarat high court on Friday issued notice to the Centre and the Telecom Regulatory Authority of India (TRAI) over a petition filed by local cable operators (LCO) challenging the decision to fix the ratio of profit sharing between the cable operators and the multi-system operators (MSO). A bench headed by acting chief justice A S Dave has sought reply form the authorities and posted the matter for further hearing after two weeks. In March 2017, TRAI issued notification fixing the ratio of sharing of service charges collected towards cable connections at 55:45 between MSOs and Local Cable Operators (LCO). This was done by inserting a clause 12(7) in the Telecommunications (Broadcasting & Cable) Services Interconnection (Addressable Systems) Regulations. After consultation with various stakeholders, the central government has decided to implement the system. The Cable Operators Association of Gujarat filed the petition through advocate Pratik Jasani challenging the insertion of clause fixing the revenue sharing between MSOs and LCOs. The cable operators have urged the HC to quash the arrangement primarily on the ground that they were never consulted by the government before implementation of the 2017 notification, though the government consulted other stakeholders. Moreover, it has also been contended that the sharing of fee collected towards services provided to end users is a subject of contract between two private parties, and the government cannot dictate terms by giving a final shape to such contracts. This decision has been termed as arbitrary, unjustified and unreasonable. The petitioner has contended that till now, the broadcasters, MSOs and LCOs were able to negotiate their share in the business amongst themselves and business of the three entities were independent. But the government intervention through TRAI’s decision amounts to suppressing cable operators.

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INTERIM BUDGET HAS SOPS FOR VOTERS, SLIPS ON FISCAL DEFICIT TARGET AGAIN

Piyush Goyal made a strong pitch for the re-election of the National Democratic Alliance government. Although the convention is that a government facing re-election does not make any major taxation or spending proposals that would tie the hand of the next government, which would present the full Budget subsequently, Goyal’s speech laid out a series of appeals and promises to different sections of the electorate. While doing so, Goyal allowed the government’s commitment to fiscal consolidation to slip further For the second successive year, the fiscal deficit target will be missed — the minister said that the 2018-19 fiscal deficit would be 3.4 per cent of gross domestic product (GDP), where the target was 3.3 per cent. In addition, the next year’s fiscal deficit is predicted to also be 3.4 per cent of GDP. Goyal reiterated the government’s commitment to bringing the deficit down to 3 per cent of GDP and said it would be achieved in 2020-21. However, the bond markets reacted with moderate scepticism to the Budget numbers. Although the Centre’s share of goods and services tax (GST) receipts is expected to be about Rs 1 trillion below the Budget Estimates in 2018-19, this share is projected to grow at over 20 per cent in 2019-20. Further, the net borrowing requirement was increased in the Revised Estimates of 2018-19 to Rs 4.47 trillion from Rs 4.07 trillion in the Budget Estimates, and as a result bond yields inched up. Compromises on the deficit allowed the government to fund its election-related sops. The first big giveaway was to farmers. Barely days after the opposition Congress party promised a minimum income guarantee, Goyal announced that farmers who owned less than two hectares of land — about 120 million households — would receive income support worth Rs 6,000 a year. This money would come entirely out of the Union government’s kitty, and be transferred in three instalments. Crucially, the scheme was introduced with retrospective effect, so that Rs 20,000 crore was budgeted for the income transfer in the ongoing fiscal year. In 2019-20, the new income transfer is budgeted to cost Rs 75,000 crore. It is not known how the beneficiaries will be selected, and whether tenant farmers will be eligible. Nor will landless agricultural labourers receive direct transfers under this scheme. Another question surrounded the estimates for receipts from disinvestment. The Union Budget for 2018-19 had set out a disinvestment target of Rs 80,000 crore; while barely half of this has been achieved so far, Goyal said the government was confident of hitting the target. In spite of the difficult of making the current year’s target, the Budget Estimates for 2019-20 lay out a Rs 90,000 crore target for disinvestment receipts.

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DEFENCE MINISTRY APPROVES PROCUREMENT OF 73,000 ASSAULT RIFLES FROM US

In a major move towards infantry modernisation, the Defence Ministry has cleared a long-pending proposal of the Army to procure around 73,000 assault rifles from the US under fast track mode, official sources said on Saturday. Nirmala Sitharaman approved procurement of the Sig Sauer rifles which will be used by troops deployed along the nearly 3,600-km border with China, the sources told PTI. They said the rifles, being used by the US forces as well as several other European countries, are being bought under the fast track procurement procedure The contract is expected to be finalized within a week. The US firm will have to deliver the rifles within one year from the date of finalising the deal, said a senior official involved in the negotiation of the deal said.

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RETAIL FINANCE AVAILABILITY WEIGHS ON SENTIMENTS, DENTS JANUARY AUTO SALES

Seven out of every ten passenger vehicles bought in India are purchased on credit. Clocking a total of 256,000 units over 255,000 units in 2018, cumulative sales of top six-passenger vehicle makers remained almost unchanged Indian automobile companies count despatches to dealers as sales. They are now hoping that the provisions in the interim budget announced, that aims to boost farm income and increase disposable income among a section of the salaried class, will give positive impetus to the customer sentiments and business environment. Reflecting the sentiments, despatches at Maruti Suzuki India (MSI) remained low. The maker of Wagon R and Baleno models dispatched a total 139,440 against 139,189 units, an increase of a mere 0.2 per cent in the same month last year. The sales were dragged down by a 3.5 per cent contraction in compact car models including Baleno, Swift, Ignis and Dzire. MSI's entry-level models—Alto and Wagon too saw flat sales advancing merely by 0.3 per cent. Tata Motors which saw an 11 per cent decline in its passenger vehicles sales was one of the worst performers. Sales at the maker of Tiago and Nexon models, dropped 17,826 units over 2,005 units last year. The company attributed it to low customer sentiments caused by non-availability of retail finance and liquidity crunch in the market. The Harrier, the SUV it launched last month, has received a good response in the market and the company is expecting to witness good volumes in the coming months as the production ramps up.

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IT’S OFFICIAL: CONGRESS TO CONTEST ALL SEVEN LOK SABHA SEATS IN DELHI

Ruling out alliance with Aam Aadmi Party (AAP), Congress’ Delhi unit chief Sheila Dikshit on Saturday said her party will contest all seven parliamentary seats in the city and the process of selecting winnable candidates has started. The party candidates will be a mix of old and new faces as well former MLAs, she told reporters here. The assertion by Dikshit comes amid recurring speculation over possibility of an alliance between the Congress and the AAP for Lok Sabha polls. No it’s over with, Dikshit said when questioned about the possibility of alliance with the AAP. The AAP too has asserted that it will independently contest elections in Delhi, Punjab and Haryana. The party may have some loss or benefit in absence of an alliance and the Congress will pay attention to it, she said. We will contest all the seven seats ourselves. A lot of names are there but we need winnable candidates. There will be some old faces, some new ones and some former MLAs, said the former Delhi chief minister. The names of probable candidates for Lok Sabha polls will be sent to the central party leadership for screening after a cut off date which is yet to be decided. Dikshit asserted that Delhi witnessed a historical rule under the Congress for 15 years and people still recall the works done by her government. She charged the ruling AAP with misleading people on its performance and claimed the voters in Delhi will give their reply in the elections. The Congress has good chances of victory in Delhi, she said, adding losing and winning elections is a part of democracy.

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NSS IN EDUCATIONAL INSTITUTES

The aim of NSS is to provide hands on experience to young students in delivering community service and gain exposure and experience which develops character and personality. The details of the activities for the students/volunteers under NSS are as follows;

Regular activities

Each NSS unit in the college/school normally has 100 volunteers, which undertakes various programmes in the adopted villages, college/school campuses and urban slums. Some of the thrust areas for activities undertaken under NSS are as follows:

Education

·       Health, Family Welfare & Nutrition

·       Environment Conservation, Social Service Programmes

·       Programmes for improving status of Women

·       Relief and Rehabilitation during Natural Calamities

·       Production Oriented Programmes, etc.

Special Camping

·       Special Camp of 7 days duration is organized in the adopted Village/Slum Areas. It provides unique opportunities to the students for group living, collective experience sharing and for constant interaction with community and also to experience their lifestyles, their problems/challenges and social limitations.

Besides, NSS volunteers are also pro-actively involved in various Government flagship programmes as given below:

·       Cleanliness Drives under Swatch Bharat Abhiyan.

·       Ujjwala Yojana.

·       Pradhan Mantri Jandhan Yojana.

·       Pradhan Mantri Jeevan Bima Yojana.

·       Work on Digital Literacy.

·       Work on Cashless India, etc.

Other Activities/Programmes

·       National Adventure Programme.

·       National Integration Camp (NIC)

·       National Youth Festival (NYF):

·       Pre-Republic Day& Republic Day Parade Camp Camps.

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GOVT WILL ACT WITHIN POWERS TO BUILD RAM TEMPLE AFTER SC RULING: RAM MADHAV

Bharatiya Janata Party (BJP) General Secretary Ram Madhav on Sunday underlined that the Centre would take steps within its powers once the Supreme Court's judgment on Ram Janmabhoomi case comes. At the same time, Madhav said that the central government will respect the judicial process and is committed to building the Ram temple in Ayodhya. The saints are not angry but are insisting there should be some forward movement on Ram temple issue. We are equally committed and we are with the saints on the question of building Ram temple there. We are fully committed to building a magnificent (Ram) temple in Ayodhya, he told.

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ISRO SET TO LAUNCH COMMUNICATION SATELLITE GSAT-31 ON FEB 6

The Indian Space Research Organisation is all set to launch its 40th communication satellite GSAT-31 on Wednesday from the spaceport in French Guiana. The satellite with a mission life of 15 years will provide continuity to operational services on some of the in-orbit satellites and augment the Ku-band transponder capacity in Geostationary Orbit, the space agency said. In a statement, the Indian Space Research Organisation (ISRO) said the satellite, weighing about 2,535 kg, is scheduled for launch onboard the Ariane-5 (VA247) from Kourou in French Guiana. The satellite GSAT-31 is configured on ISRO's enhanced I-2K Bus, utilising the maximum bus capabilities of this type. The satellite derives its heritage from ISROs earlier INSAT/GSAT satellite series. The satellite provides Indian mainland and island coverage, the agency said. ISRO also said the GSAT-31 will be used for supporting VSAT networks, television uplinks, digital satellite news gathering, DTH television services, cellular back haul connectivity and many such applications.

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ONE WHO CAN'T TAKE CARE OF HOME, CAN'T MANAGE COUNTRY: NITIN GADKARI

Party workers should fulfil their domestic responsibilities first because those who can not do that can not manage the country Union minister Nitin Gadkari has said. I meet many people who say we want to devote our lives for the BJP, for the country. I asked (one such person) what do you do, and who all are there in your family. He said I have closed my shop as it was not doing well there is wife at home, children, Gadkari said. I said (to him) first take care of your home, because one who can not manage his home can not manage the country. Hence first manage your home and look after your children properly, then work for the party and country, he said.

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KERALA SETS UP DRUG PRICE MONITOR

Kerala has become the first State to set up a price monitoring and research unit (PMRU) to track violation of prices of essential drugs and medical devices under the Drugs Price Control Order (DPCO). The move comes more than five years after the National Pharmaceutical Pricing Authority (NPPA) proposed such a system for the States and the Union Territories. Ravi S. Menon, State Drugs Controller, told that a society had been registered to get Central assistance for the functioning of the unit. He said the new office would start functioning as soon as infrastructure was set up. There is no price control review mechanism now. The State Health Secretary would be the Chairman of the society and the Drugs Controller would be its member secretary. Its members include a State government representative, representatives of private pharmaceutical companies, and those from consumer rights protection fora. The society would also have an executive committee headed by the Drugs Controller. The new watchdog will offer technical help to the State Drug Controllers and the NPPA to monitor notified prices of medicines, detect violation of the provisions of the DPCO, look at price compliance, collect test samples of medicines, and collect and compile market-based data of scheduled as well as non-scheduled formulations. States and Union Territories have been classified into three categories for staff recruitment and infrastructure. Kerala falls in the second category, having a population of less than 3%, but more than 1% of the total population of the country. The State will have a project coordinator, two field investigators, and two data entry operators. The unit is expected to help the State Drugs Control wing, which is hit by severe staff shortage, and regulate drug prices more effectively. Highly placed sources say that about ₹10,000 crore worth medicines are sold in Kerala in a year. Official data on drug purchases for public institutions were not disclosed.

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LOAN WAIVER IS A TEMPORARY FIX, WE ARE TRYING TO UPROOT THE PROBLEM: PM MODI

The Prime Minister, addressing a gathering in Jammu, targeted the Congress party for making phoney loan waiver promises to the farmers in Madhya Pradesh and Rajasthan. In Madhya Pradesh Congress had promised a loan waiver before the elections and now waiver is being granted to those who where not facing any distress and those farmers who are actually under the burden of loans are getting Rs 13 as loan waiver, Modi said. CAG report found that about 25-30 lakh people who got loan waiver were not even eligible for it, Modi added. The Prime Minister alleged that the waiver promises made by the Congress in various states leaves out 70-80% of the farmers who are actually in distress. He, however claimed that the PM-KISAN yojna, which was announced by the interim Finance Minister Piyush Goyal in his budget speech, will help 95 farmers out of 100 every year. The new PM-KISAN yojna will uproot the problem our farmers are facing, on the other hand the loan waivers are just a temporary fix, he said. The Prime Minister also boasted about the Jan Dhan yojna, saying, When I started bank accounts for farmers some people were laughing not realising the use of such schemes, now when the benefit of Rs 6000 annually will reach the farmers we will get to realise the importance of opening bank accounts of farmers. Modi said that the previous UPA government in 2008 used the farmers to come back to power when they announced loan waivers. Farmers during 2008-09 were staring at a Rs 6 lakh crore loans across the nation. Under the remote control government farmers were promised loan waivers but only loans totaling Rs 52,000 crore written off and money went to middle-men and the loyalists of the previous government. Referring to Kashmiri Pandits, the prime minister said the central government is committed to respect and give dignity to the displaced community. The pain that they had to undergo, they had to leave their homeland. I have never said this but their pain is within me too, he said.

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12TH REGIONAL STANDARDS CONCLAVE HELD IN ODISHA

 The BIS Act 2016 lays down the framework for Standards development and delivery in India. The products, process, the service, delivered in the country, should be of high quality and meet the expectation of both consumers and producers. Ms. Surina Rajan, said that as the national standards body, BIS, is committed to delivering quality assurance and standards’ solutions not just for exports but also the consumers within the country What is imported into the country should also be safe for Indian consumers. She said that standardization is a movement, it should not be stuck in islands of quality. For standards, sustainability and smart services are the next dimension which BIS is trying to map out for future standardization and conformity assessment, DG, BIS added. Sudhanshu Pandey said that global trade in goods is valued at USD18 trillion and Services trade is worth USD5 trillion. At present India is a USD 2.6 trillion economy. To increase its share, India must vigorously follow standards. The new Consumer Act allows for product recall. It is a welcome move. Product liability law which puts greater responsibility on manufacturers now needs to be enforced. Each stakeholder has different interests, standards allow these interests to communicate and combine. Santosh Sarangi, observed that in the changing scenario of world trade, quality infrastructure should be a thrust area. Consumers have been demanding more and more information at their disposal. Today, no one can ignore the issues of human health and safety and hence, following standards is very important. MSMEs need to adopt standards. We have almost 3.7 lakhs MSME’s, 300 exporters and 356 startups, who need to be made aware of following the right standards to boost their turnover and profits.

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MODI FLICKS POPULIST SWITCH AS ELECTION DRAWS CLOSER

Prime Minister Narendra Modi has unleashed a populist election-year budget designed to shore up support ahead of national polls, but it may have come too late to dampen criticism of his government’s inability to create millions of jobs The budget on Friday contained $13 billion worth of measures including payouts for farmers, a pension program for informal sector workers and tax relief for India’s squeezed middle class. The policies are designed to compensate for Modi’s slide in support, and come just one day after a report suggesting India’s unemployment rate is at a 45-year high. The emphasis is clearly on populism, says Pratyush Rao, Control Risks’ associate director for South Asia. You’ve got an election coming up and Modi is clearly under pressure. Some of the measures, including tax cuts and incentives to buy houses, are aimed squarely at the ruling Bharatiya Janata Party’s core voter base of shopkeepers, traders and upper caste Hindus, and could be implemented early enough to refresh Modi’s image. But with roughly 875 million voters heading to the polls in two months, it’s not clear whether the government’s big ticket promises can have a meaningful impact in India’s vast hinterland. The first payment to small farmers will be made in March, just before voting is likely to begin, said Sasha Riser-Kositsky, senior analyst at the Eurasia Group. Cash in hand from the BJP government is likely to negate some of the appeal of the main opposition Congress party’s promise of a national farm loan waiver and a large minimum income guarantee program for the poor, Riser-Kositsky said in an research note on Saturday. Delivered by interim Finance Minister and party stalwart Piyush Goyal, this budget was one of Modi’s last chances to announce big ticket programs ahead of the general election. The minister’s speech was heavy on praise for many of Modi’s policies and doled out election-time goodies for many disaffected segments of Indian society. BJP minister Prakash Javadekar called the budget a surgical strike on the opposition Congress party. That’s an allusion to an attack on Pakistan that Modi’s government has widely publicized and has since been turned into a Bollywood movie -- which Goyal mentioned in his budget speech to parliament. Rahul Gandhi, was quick to point out that Modi’s planned annual payout to farmers worked out to just 17 rupees a day, describing it as an insult. His party, which has gained in the polls, said the government’s promises were unlikely to be implemented. After pledging a targeted universal basic income policy earlier this week, Congress said the government’s measures will not take care of India’s most vulnerable, including landless farm laborers who will not receive payouts.

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MODI APOLOGISES AFTER SEVERAL FALL ILL IN STAMPEDE-LIKE SITUATION AT RALLY

Prime Minister Narendra Modi cut his speech short at a rally in West Bengal's North 24 Parganas district and later apologised after several women and children fainted following a stampede-like situation at the venue. An officer manning the state police control room said two-three women had fainted. They were rushed to a hospital and released after first-aid, he said. Modi, who was addressing a meeting organised by the All India Matua Mahasangh in Thakurnagar, tried to control the crowd and repeatedly asked them to remain wherever they were as many BJP supporters tried to force their way into the inner ring of the venue. Some people, waiting outside the venue, also rushed in, adding to the chaos. The ground is too small for this meeting. Please remain where you are. I request you, there is no place in the Maidan. Don't do this, the Prime Minister said, as people jumped barricade and jostled with one another to get a vantage point to listen to their leader's speech. I bow my head and salute all those who had come to Thakurnagar and showered their blessings and love on me. But at the same time, some sisters and children faced problems. I sympathise with them, and apologise for this, he added. I request you all also, I know your enthusiasm. Your love is my strength. But alongside love, you need to have patience. This ground is so big, but still it now looks small (because of the huge turnout), he said.

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CS Meetesh Shiroya