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Five ways the US elections could affect equity markets

October 2, 2020 - 11:15am
The upcoming U.S. presidential election will likely be an important catalyst for stock market moves in coming months as investors gauge the probabilities of a contested vote and the policies a potential winner would enact.Democratic nominee Joe Biden is ahead in national polls and in betting markets the former vice president is favored to win with an average 59% likelihood, according to RealClearPolitics.Here are five issues in Washington that investors say will be important for asset prices.1) An orderly electionRepublican President Donald Trump has questioned the validity of mail-in votes, raising concerns that the results of one or more states will be decided in the courts.Trump again declined to commit to accepting the results during Tuesday night's first presidential debate, repeating his unfounded complaint that mail-in ballots would lead to election fraud. That has bolstered the case for investor betting on markets staying volatile well after Election Day on Nov. 3."People would like to have certainty as soon as possible which way it's going to move forward," said Esty Dwek, head of global market strategy at Natixis Investment Managers.A report from BNP Paribas estimated the chances of a contested election result stand at between 7% and 10%, while assigning only a 1% chance to the possibility of a constitutional crisis that the Supreme Court is unable to avert.2) Tax ratesFears of rising tax rates under a Biden administration could hit the large technology stocks that have led the market rally this year if investors seek to book gains before the increase takes place, said Eddie Perkin, chief equity investment officer at Eaton Vance.At the same time, companies could look to issue special onetime dividends to return cash to shareholders before income taxes rise."In a normal year you see tax-loss harvesting. This might be a year of tax-gain harvesting," Perkin said.Hedge fund manager J. Daniel Plants, who runs Voce Capital Management, expressed concern that higher tax rates would squash economic growth and eat into companies' after-tax net income, making "an already expensive market appear even pricier.""This is simply not the time to engage in such experiments with the economy reeling and the outlook so uncertain," he said.Analysts at Goldman Sachs take a more sanguine view, forecasting that Biden’s plan would likely shave just 4% from the S&P 500's expected earnings by 2024.3) U.S.-China tensionsA second Trump term would likely see the president continue confronting China through higher tariffs and restrictions on trade and investment, analysts at Moody's Analytics wrote.They assign a 40% probability to Biden gaining the presidency with a Republican Senate and Democratic House, compared with a 35% chance of Trump getting re-elected with the same combination.Some investors believe Biden's policies toward China are unlikely to substantially differ from Trump's."There's a perception that Biden would be better on China, but he could just be different. You wouldn't have the tweets (from Trump), but you would have a Western coalition trying to manage the rise of China," said Dwek.4) Coronavirus responseU.S. deaths linked to the coronavirus are now above 206,000, by far the highest number of any country, according to a Reuters tally.Trump has said that a vaccine against the virus would be ready in record time, perhaps before the election, raising questions about whether political pressure might result in the deployment of a vaccine before it is safe.Analysts at Societe Generale put the chances of a coronavirus treatment or vaccine coming sometime in the next three months at around 15%, while reducing the probability of renewed lockdowns to 20% from 30%.5) Additional fiscal stimulusThe recent death of Supreme Court Justice Ruth Bader Ginsburg has dimmed hopes of Congress passing an economic stimulus bill before the November election, another factor that has weighed on stocks during a volatile September.Moody's Analytics believes the economy would return to full employment in the second half of 2022 under Biden compared to the first half of 2024 during a second Trump term, largely because of the challenger's more expansive fiscal policies.
Categories: Business News

FPIs turn net buyers of Indian debt after 11 months

October 2, 2020 - 11:15am
Mumbai: Foreign portfolio investors (FPIs) turned net buyers of Indian debt in September for the first time in 11 months amid signs of green shoots. Bankers expect a rally in the bond market in anticipation of further rate cuts and central bank bond purchases.FPIs have been consistent sellers in the Indian debt market since November 2019. FPIs bought debt worth Rs 4,184 crore in September 2020 after selling Rs 1.21 lakh crore between November 2019 and August 2020.Market experts attributed the FPI inflows to stable currency and improvement in the economy. India’s economy showed signs of stabilising in August with manufacturing and services gradually improving.“Overseas investors are betting on Indian debt papers taking a view on the next fiscal year,” said Ajay Manglunia, MD at JM Financial. “With net debt investment turning positive in September, it could well be an early sign of green shoots. Sovereign papers, both central and state governments, would be on the priority list of those investors looking at yield differentials between India and the US treasury.”The US benchmark treasury yield fell 122 basis points to 0.66% so far this year. During the same period, the local benchmark yield dropped 56 basis points to 6%. 78440029The expected dollar inflow is likely to prop up the rupee further and add to positive sentiment in the stock market, said bankers.“Investors are looking at the possibility of a bond market rally on expectations of lower inflation, open market operations, and more rounds of Operation Twist,” said Sandeep Bangla, Associate Director of Trust Group. “The latest dollar weakening could well prompt overseas investors to look at emerging market investments. It is to be seen how such offshore net inflows sustain.”Foreign investors dumped Indian bonds for the past 10 months due to uncertainty around growth and fiscal slippage. According to Bloomberg data, India witnessed the highest FPI outflow from bonds among emerging market peers so far this year at $14.5 billion, followed by Mexico ($13.5 billion) and Brazil ($8 billion). The majority of FPI funds went to South Korea, China and Russia with inflows of $50 billion, $40 billion and $10 billion, respectively.Despite such outflows, bond yields have seen a downward movement this year led by the Reserve Bank of India’s (RBI) policy rate actions and liquidity measures.
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ICMR, Biological E develop purified antisera

October 2, 2020 - 8:15am
MUMBAI: India’s top health research body Indian Council of Medical Research (ICMR) and Hyderabad-based Biological E have developed purified antisera, raised in animals, as a prophylaxis and treatment for Covid-19.Antiserum is blood-based serum containing antibodies against viruses.The therapy works like plasma therapy. However, the blood plasma is obtained from animals — from horses, in this case — that have recovered from a viral infection and found to have antibodies against the virus in their system. Antibodies from horses, known as equine antisera, are quite common.“Equine sera-based treatment modality thus stands out as yet another remarkable public health initiative supported by ICMR in the time of Covid-19,” the research body tweeted.Antibodies from animals have been used to control many viral and bacterial infections such as rabies, Hepatitis B, vaccine virus, tetanus, botulism and diphtheria.In June, the ICMR had invited drugmakers to produce equine antiserum against Covid-19. The equine antiserum was isolated by the ICMR-led National Institute of Virology, Pune.The plasma recovered from patients experiencing Covid-19 could serve a similar purpose, the ICMR said in a series of tweets, adding that the “profile of antibodies, their efficacy and concentration keep varying from one patient to another and therefore make it an unreliable clinical tool for patient management”.
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Govt open to launching Indian app store

October 2, 2020 - 8:15am
New Delhi: The central government will consider requests from technology entrepreneurs to launch an Indian digital application store, two senior officials told ET, responding to the growing outcry against the dominance of US technology giants Google and Apple in the country’s digital services market.India already has an app store for governance-centric apps, which can be scaled up to begin with, said one of the officials cited above. In addition, there is a need to also introduce policies requiring handset manufacturers to preload alternative app stores alongside popular offerings like Google Play, the sources said. Weighing in on the issue, union minister for electronics and IT Ravi Shankar Prasad said in a post on Twitter that he is happy to receive suggestions from Indian app developers on how to encourage the ecosystem. “Encouraging Indian app developers is vital to create an #AatmanirbharBharat app ecosystem,” he tweeted on Thursday. The Indian government “is not averse to the idea” of launching its own app store, officials said. The existing digital store for government apps, developed by the Centre for Development of Advanced Computing (CDAC), hosts a slew of applications such as e-governance app Umang, health app Aarogya Setu and storage app DigiLocker.Won’t be Easy, say ExpertsPayment app Paytm is among the few private sector apps to feature on the store. 78439498“Building an app store is like building a shopping mall and the government can very well facilitate it,” one of the officials said while acknowledging that for an indigenous app store to successfully take on Google and Apple’s dominance, it has to be “as good” and “robust”.Global experts are of the view that India is well placed to break the dominance of global technology giants in its digital app ecosystem. “The (digital) industry doesn’t need the government’s help in this, they (developers and entrepreneurs) can just crowdsource it and keep a minimal charge of 2% to run the platform. Nobody will then need to pay 30% to Apple and Google,” said Vivek Wadhwa, an American technology entrepreneur and academic.Government officials said the issue (of overseas tech giants dominating India’s digital app sector) emerges from the fact that Google’s Android operating system has a “98% market share” in the smartphone segment in India whereas it’s much lower in other countries including the US. “The problem of monopoly is very acute,” said the person.
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As India slowly opens up, tourists begin to check in

October 2, 2020 - 8:15am
New Delhi: Leisure bookings and travel to popular holiday destinations went up significantly in September over August despite the surge in Covid-19 cases, pointing to green shoots of recovery in the tourism sector that has been crippled by the protracted lockdown. Nishant Pitti, co-founder of EaseMyTrip, said average daily tickets sold in September for airports in Goa, Udaipur, Bagdogra, Port Blair and Cochin, went up on his platform to 571, 126, 651, 67, and 575 respectively, registering a growth of around 340%, 147%, 80%, 219%, and 144% over August.Travellers are mostly opting for homestays, villas and more personalised modes of accommodation. Aditya Agarwal, head of corporate strategy at Cleartrip, said the portal has seen a pickup in September coinciding with easing of travel and quarantine restrictions. “This suggests that pent-up demand for leisure travel is now starting to get converted into bookings,” Agarwal said. “In September, booking volumes to Kochi are around 25% of previous year volumes, while Udaipur and Jaipur are around 24% and 30%, respectively, of previous year volumes.Goa is slightly lower at around 18% of last year's volumes.” Hoteliers said bookings for accommodation in Uttarakhand and Himachal Pradesh have also been going up as the two states eased travel restrictions for outsiders. In a whitepaper released on October 1 titled ‘Domestic leisure demand picks up in India’, Vidhi Godiawala, business development manager for central and South Asia at hotel industry tracker STR, said that Rajasthan, Karnataka and Punjab were the first to attract domestic leisure guests. Goa, where occupancy was in a state of limbo and in single digits until August, has seen considerable upward movement with weekend leisure demand growing ‘robustly.’ Kochi, a market that initially saw high occupancy rates during the lockdown mainly on account of the GCC quarantine business, has also begun to see an uptick in weekend hotel demand. As per STR, hotels in these destinations have also started getting the weddings business, aiding their recovery. According to a survey done by ixigo with over 5,000 users in September, 21% of the respondents said that they were travelling for a workation.
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Transfer pricing disputes may return to haunt MNCs soon

October 2, 2020 - 8:15am
Mumbai: Companies may face transfer pricing disputes due to data unavailability used as inputs in computing tax liabilities on intra-group transactions as the protracted lockdown, enforced to prevent the spread of the virus, has shifted the reporting calendar for several companies. Transfer pricing is a tax levied on Indian subsidiaries and captives of multinationals for cross-border transactions within the group. Most companies arrive at an amount of tax they are required to pay to the Indian revenue department based on certain computations and assumptions. This year, the calculations on arms-length basis transactions and comparables have become tough due to unavailability of the data, say tax experts. These computations are mainly based on two factors. First, how many overseas transactions were recorded between the Indian arm, its parent or any other foreign company or arms length. Second, whether the amount paid or received by the Indian arm is on a par with industry standards – or comparable.Both these assumptions are based on numbers available in the company’s audited results and audited results of other companies in the sector or competitors. “As the deadline for AGMs and consequently the filing of audited results has been postponed due to the COVID pandemic, sufficient comparable data would not be available on a timely basis in the public domain for this year. Taxpayers would surely face problems in obtaining comparable data and hence the benchmarking exercise would be difficult to conduct. It would be better if the government provides relaxation in the transfer pricing filing deadline for this year,” said Amit Maheshwari, Partner, AKM Global. Indian entities of many multinationals receive a fixed margin or a mark-up from their parents and a tax is paid on these transactions in India. Transfer pricing is essentially the price paid by the parent company or its foreign arm to a local subsidiary for transactions among them. In most cases, the local entity charges a mark-up at arm’s length, or at a price as per industry average. Tax experts say that the calculation cannot be based on last year’s data too as most multinationals have seen huge value erosion due to Covid. “There are several problems this time around availability of required data for the purposes of testing companies’ international transactions for arm’s length standard. First, the audited internal company data which forms the basis for implementing transfer pricing method (in computing margins) may not be available due to extension of the timeline, and second, there is limited industry data to form basis to account for potential adjustment warranted for the impact of pandemic during the last quarter, i.e., January to March 2020, for benchmarking purposes,” said Kunj Vaidya, a CA specialising in transfer pricing.78439338
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HMD ships over 56m syringes to Covax facility

October 2, 2020 - 8:15am
NEW DELHI: Hindustan Syringes and Medical Devices (HMD), one of the largest suppliers of syringes, has sent its first shipment of 56 million pieces of auto disable syringes to Covax facility as the race for safe and effective vaccine continues.The Covax facility, which seeks to pool in resources to accelerate the development of the promising vaccine candidates for Covid-19 that will be made accessible to all the participating countries, has ordered 140 million pieces to be supplied between August and December.“We have shipped out more than 56 million pieces of 5 ml auto disabled (AD) syringes for intra muscular syringes,” said Rajiv Nath, managing director of Hindustan Syringes and Medical Devices, while the company awaits the Indian government’s advisory on the procurement of syringes for vaccination.In the last few days demand has come forward from other countries like Japan and US for disposable syringes and Indonesia for auto disposable syringes as the countries start to stockpile. The company has even scaled up its production capacity to one billion from 700 syringes a year.However, Indian government is yet to make a move. “We plan to allocate 50% of the total for the government of India and 50% for export as we have got a global responsibility. But there is no clarity so far from the government as yet,” added Nath.
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External account at best since liberalisation

October 2, 2020 - 8:15am
By Gayathri NayakMUMBAI: India’s external account is seeing its best year since the balance of payments (BoP) crisis in 1991 as Covid-induced shutdown slowed import demand from the manufacturing sector while the services sector performed well; that funded imports without the use of capital flows.Of the $28 billion added to India’s foreign exchange reserves during April-June, $20 billion is through export earnings, while $8 billion got added on account of valuation gains, the Reserve Bank of India (RBI) data shows. For the first time since liberalisation the current account inflows alone have added to the forex kitty in any quarter while historically it was the capital flows in the form of portfolio investments or external borrowings that did so.While the positive external data has helped the Indian Rupee remain stable and boost the foreign exchange reserves, it has also raised questions whether it is a one-off event triggered by the collapse in demand in the economy, or a shift in the economy with falling gold imports and substitution by domestic manufacturing.“A current account surplus in FY21 cannot be ruled out on subdued economic recovery,’’ said Anubhuti Sahay, head of South Asia economic research, Standard Chartered Bank. “However, persistent moves towards such a norm would require significant ramping up of domestic manufacturing capabilities, clarity on which can emerge only in the medium term. Extrapolating a trend from a quarter which was struck by an unprecedented shock in our view is unlikely to give an indication of a structural shift.”India has been vulnerable to global shocks – be it a financial meltdown, taper tantrum or oil prices spike forcing the government to come up with measures to shore up investor confidence. But this time the currency has held stable, foreign exchange reserves rose to a record. However, it may be due to the weakness in the economy rather than the strength.“Hopefully, the current surplus in the merchandise trade will sustain through higher exports in the coming months, following the policy measures like Production Linked Incentives scheme,” said Saugata Bhattacharya, chief economist at Axis Bank. “However, in the last quarter, the lower imports were largely due to weaker domestic demand, which is likely to gradually reverse, as demand normalises. India also continues to attract FDI flows, showing it remains an attractive investment destination. These evolving changes will need a calibration of RBI reserve management policies and processes to deal with higher future BOP surpluses.”India’s merchandise imports in the quarter fell 52% to $62.3 billion from $129.5 billion in the year-ago period mainly due to subdued gold imports that fell 94% and lower crude oil prices. At the same time, exports of services including other invisibles fell marginally by 6% to 29.8 billion from $31.8 billion a year ago.“Sharp reduction in the merchandise trade deficit (lower imports versus exports) was the main raison d’etre for the better math, which in turn reflects weak domestic demand due to the lockdown, along with weak commodity demand/prices,” said Radhika Rao, India economist at Singapore-based DBS. “One silver lining was the resilience in services trade receipts due to higher software exports, which only moderated marginally despite the pandemic, reinforcing India’s competitive advantage.”
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Consumer demand and liquidity gradually improving, says SBI and HUL

October 2, 2020 - 8:15am
Mumbai: State Bank of India (SBI) and Hindustan Unilever Ltd (HUL) said consumer demand and liquidity have been improving over sequential quarters, sounding a note of cheer. The country’s biggest bank and its largest consumer goods maker, however, said people are still cautious about spending and wary of stepping out, which could impact discretionary categories at a time when most companies are pinning their hopes on the festive season.“I don’t think people are in a hurry to step out and mingle--that is still some months away,” SBI chairman Rajnish Kumar told ET. “This is having an impact on people’s behaviour; they are saving more and borrowing less. While a large part of the economy has opened up, the fear has not gone away from people’s mindset.”Digitising, Financing Kiranas“This is psychological and it will take some time. I am hopeful that the curve seems to be flattening now,” said Kumar.HUL, regarded as a proxy for consumer sentiment with its presence in a range of daily consumption items such as soaps, shampoos and food, said the state of the Indian economy and underlying demand will become much clearer by the December quarter. “The country cannot afford a prolonged lockdown,” HUL chairman Sanjiv Mehta told ET. “We have to get the economy up and running again but do it in a sensible manner. And I remain confident in humanity's ability to cope with this crisis and secondly, the country's capacity to come out of this.” The economy will keep improving and the current quarter’s performance will hopefully be better than that of the July-September period, he said.SBI-HUL PARTNERSHIPOn Thursday, SBI partnered HUL to provide digital payment and financing solutions for retailers and distributors through UPI-based payment solutions and PoS (point-of-sale) terminals. Under the tie-up, the bank will also offer overdraft and financing to millions of retailers where HUL has direct coverage and bring them into the formal economy since a bulk of the general trade and kirana stores operate in an unorganised market. SBI said it can potentially cash in on the Rs 40,000-crore revenue that HUL generates annually and there will be no liability attached to the consumer firm in case of default.“This is with a very clear long-term perspective that we need to help digitise the trade, help them get access to finance and very importantly have a seamless and frictionless e-B2B model. The fact that the pandemic makes it even more relevant is purely coincidental,” Mehta said.ICRA had on Wednesday revised its credit growth estimate for banks to 2-3% in the current fiscal, down from 6-7% earlier. Credit growth continues to be at 40-year low levels of 5%. While a large part of the growth would have come from pent-up demand, how much of this is sustainable will be the key element to watch for in the coming months, according to Macquarie Capital.However, SBI said its credit growth has been better in August, helped by pent-up demand for automobiles and retail and that there is no dearth of liquidity, even as banks are finding new ways to offer credit through digital initiatives and data analytics. “While retail lending growth is still lower than last year, with the festive season now coming up, I am hoping that we will be back to what it was in the previous year,” Kumar said.
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To promote domestic industry, India to start licence regime for toy imports from March

October 2, 2020 - 8:15am
New Delhi: India could introduce a phased licence regime among other non-tariff barriers on imported toys from next March as the government wants the domestic industry to meet recently announced quality norms first before curbing overseas products.The Department for Promotion of Industry and Internal Trade (DPIIT) recently extended the enforcement of compulsory certification by Bureau of Indian Standards (BIS) for toys to January 1, 2021, from September 1 this year to encourage local manufacturing.Officials said while non-tariff barriers are in the works for imported toys, the top priority is that domestic manufacturers meet the Quality Control Order (QCO).“A licence regime could start in a phase-wise manner, starting March next year,” said an official.90% Toy Imports from China, TaiwanIndia has already put in restrictions on tyres and some television imports as part of the government's plan to encourage local manufacturing. The government has unveiled incentives for select sectors for local manufacturing, but there is a view among policymakers that some restrictions on products that can be produced locally are needed. Prime Minister Narendra Modi had said India could become a big hub of toy production in his Mann Ki Baat address on August 30.78439610Of India’s $1.75 billion toy market, more than 85% comprises imports, which amounted to around $1.5 billion in FY20. China and Taiwan account for around 90% of India’s toy imports. The country also imports toys from the US, Sri Lanka, Malaysia, Germany and Hong Kong.Another official said that inter-ministerial consultations had been conducted on the issue. “We are not taking any steps immediately. Industry first needs to comply with the QCO,” the second official said.The domestic toy industry comprises around 4,000 MSMEs and is primarily in the unorganised sector.The order is applicable to toys such as rattles, dolls and puzzles, which don’t need batteries, and electric ones. BIS has begun the process of granting licences to both domestic and foreign manufacturers of toys for use of the BIS Standard Mark. Dolls, board games, playing cards, toy tents, costumes and video game consoles are all considered toys.India-made products are more expensive as electronic components that are not available in the country are imported at a duty of 60%, officials pointed out. The initiative has come in the wake of a study by the Quality Council of India (QCI) revealing that 67% of imported toys failed a testing survey, which prompted an aggressive push to produce safe toys in the country.
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Covid-19 Effect: Jobs market in India migrating to smaller cities

October 2, 2020 - 8:15am
Mumbai: Post-pandemic, the entry- and junior-level jobs market is seeing something like a great reversal — young Indians in small cities and towns are more likely to land a job than those in the metros and other big cities. Reason? Faster demand revival in semi-urban and rural areas is prompting consumer brands to increase focus on customers in such locations.There are currently more than 150,000 active job openings in small cities and towns, according to postings data on top job sites and company websites, put together for ET by staffing firm Xpheno.The possibilities of working remotely as well as cost advantages for employers have also helped open the window of opportunities and new roles in destinations outside large urban centres.The roles of sales, customer acquisition and home loan executives, insurance manager, customer care executive, credit manager, personal banker and voice and data process executive are in demand in smaller cities.78439568Data showed that Dabur, Flipkart, Muthoot Finance, Axis Bank, ING Vysya, ICICI Lombard, Ceat, HCL Technologies, Cars24, Kotak Mahindra Bank, Tech Mahindra, Capgemini and Bharti Airtel, among others, are hiring. Bhubaneswar, Jalandhar, Nagpur, Rajkot and Coimbatore are some tier II locations that have registered an increase in job count over 2019. Other smaller cities with new job postings include Indore, Jaipur, Vadodara, Nashik, Guwahati and Gwalior.Less Hiring Costs, Remote Working“Several new job roles are coming up in suburban towns,” said Kamal Karanth, cofounder, Xpheno. “Lower cost of hiring and remote working gaining better acceptance have opened long-locked gates and newer ways of engagement with an otherwise selectively tapped talent pool.”Dabur, which has a significant presence outside large cities, has been hiring for the sales function and select manufacturing locations for the past few months, said its executive director, human resources, Biplab Baksi.“Cities no longer hold the value proposition in the ‘new normal’ world … I see more opportunities coming up in smaller towns,” said TN Hari, HR head, BigBasket. “With a good number of jobs moving to work-from-home models, smaller towns will be more attractive to tap talent.” BigBasket has seen a faster demand revival in tier II cities than the metros.Harshvendra Soin, global chief people officer, Tech Mahindra, said the remote working model would enable companies to focus “more on talent-based hiring, resulting in increased hiring activity across tier II-III cities.”
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How CCI can play vital role in India's recovery

October 2, 2020 - 2:13am
By Ashok K GuptaWith every industry undergoing ‘new age’ transformations, mergers and acquisitions (M&As) have become a significant tool for establishing systemic efficiencies in many markets. However, large-scale consolidations often present unique market structures that may pose challenges to competition.In these scenarios, competition regulation assumes greater significance to preserve competition and protect consumer welfare. The Competition Commission of India (CCI) looks into M&As from the competition perspective. All M&As above a certain asset and turnover threshold are to be mandatorily notified to CCI for an ex ante assessment of an appreciable adverse effect on competition. CCI needs to look into the future structure of the market, and this cannot be based on crystal-gazing.The key to success of any merger review regime is to conduct a quick assessment so that firms can consummate their transactions and save time and costs on account for the necessary approvals. CCI considers the market dynamics that includes the level of concentration, degree of countervailing buyer power, the possibility of failing business, and contribution to the economic development. It also examines whether the merger is likely to result in any harm to competition.Global consolidations have resulted in the entry of several foreign firms into Indian markets. CCI has successfully handled global mergers including Dow Chemical-DuPont and Bayer-Monsanto. These cases required interaction with its well-established counterparts and multi-jurisdictional authorities. Continual engagement with other authorities on the International Competition Network (ICN), OECD and Brics has helped CCI to keep abreast with the latest developments and best practices.Over a decade, CCI has developed a robust framework for merger review. But there are challenges posed by new-age markets, common investments in competing firms and data-driven mergers. In digital markets, due to low assets or turnover of target companies, some acquisitions do not trigger the notification thresholds. Tracing what the trends are of such acquisitions — be it ecommerce or other digital companies — is being sought, as there can be cases when the acquisition of a nascent firm may trigger the loss of a competitive constraint.Several measures have been put in place to make compliance requirement certain and simpler. One, the threshold for notification in India is relatively high. So, the notification requirement is imposed only on larger transactions that have the potential to affect competition. Two, mergers in certain sectors — such as public sector banking, and oil and natural gas — have been exempted by GoI in the public interest. Further, the acquisition of smaller enterprises below a monetary threshold is also exempted.Three, CCI regulations dispense notification for certain categories of combinations unlikely to raise competition concern. These are largely transactions in the ordinary course of business, or investments not resulting in control.With effect from August 15, 2019, a ‘green channel’ was introduced for the automatic approval of combinations. This is a first-of-its-kind trust-based system in the world, where a notifiable transaction having no overlaps, be it horizontal, vertical or complementary between parties, is deemed approved upon its filing and can be consummated immediately. This should sustain speedy, transparent and accountable merger review, strike a balance between facilitation and enforcement, and create a culture of voluntary compliance that supports economic growth. This has caught the imagination of industry, and one out of every five cases is being filed under the green channel. CCI has revised its pre-filing consultation guidelines, and stakeholders are encouraged to proactively participate in the review process.As market regulator, CCI is conscious of the larger public policy milieu and significance of inorganic growth required for enterprises to attain size, scale and efficiency and succeed in domestic and global markets. It has focused on quick approval of M&As that don’t cause appreciable adverse effect on competition.Several new reforms in the corporate and insolvency landscape are driving up domestic consolidations, attracting entry and expansion of foreign entities in India through M&As, strategic investment by MNCs and investments by foreign funds that include sovereign, pension and private equity funds. CCI assesses these deals by taking cognisance of the relative advantage by the way of contribution to the economic development of the country.The ongoing reforms have made India a preferred destination for strategic investments and M&As even during a Covid-hampered economy. CCI has given timely approval to all notifications filed even in the lockdown period. As India gears up for post-Covid economic recovery, the stage is set for all enterprises to benefit from CCI’s objective, transparent and business-friendly combination review regime.The writer is chairman, Competition Commission of India.
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Budgetary exercise to kick-start from Oct 16

October 2, 2020 - 2:13am
New Delh: The finance ministry will kick-start the exercise to prepare the annual Budget for 2021-22 from October 16, a notification said on Thursday. It will be the third budget of the Modi 2.0 government and Finance Minister Nirmala Sitharaman. The budget will have to address critical issues pertaining to growth contraction and subdued revenue collection triggered by the COVID-19 pandemic. "The pre-Budget/RE (Revised Estimate) meetings will begin on the October 16, 2020," according to the Budget Circular (2021-22) of the Budget Division of the Department of Economic Affairs. "All financial advisers should ensure that the necessary details related to these meetings contained in the Appendices I to VII are entered in RE module of the UBIS (Union Budget Information System)," the circular added. The Budget Estimates (BE) for 2021-22 will be provisionally finalised after the expenditure secretary completes discussions with other secretaries and financial advisers. Pre-Budget meetings will begin from October 16 and continue till the first week of November, it said. Ceilings for all categories of expenditure, including the central sector and centrally sponsored schemes will be discussed, it said. Accordingly, the RE 2020-21 and BE 2021-22 for all categories of expenditure, and select schemes/projects, may be indicated separately for revenue and capital expenditure, it said. For the Budget Estimates of 2021-22, it said "the allocations will be finalized for the Establishment and Other Central government expenditures as well as the Finance Commission related transfers which will be based on the accepted recommendations of the 15th FC (Finance Commission)." For the Central Sector (CS) schemes and Centrally Sponsored Schemes (CSS), tentative ceilings would be discussed during the pre-Budget meetings, it added. The Budget 2021-22 is likely to be presented on February 1. Prime Minister Narendra Modi-led government scrapped a colonial-era tradition of presenting the Budget at the end of February. The then finance minister Arun Jaitley had for the first time presented the annual accounts on February 1, 2017. With the preponement of the Budget, ministries are now allocated their budgeted funds from the start of the financial year beginning April. This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans. Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed some time in mid-May, weeks ahead of onset of monsoon rains. This meant government departments would start spending on projects only from August-end or September, after the monsoon season ended.
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FIR against Rahul, Priyanka in Noida

October 2, 2020 - 2:13am
NOIDA: The police in Uttar Pradesh's Gautam Buddh Nagar on Thursday said it has lodged an FIR against Congress leaders Rahul Gandhi, Priyanka Gandhi Vadra and around 200 other party workers under The Epidemic Diseases Act for not maintaining social distancing and not wearing face masks. The FIR was lodged under Indian Penal Code sections 188 (disobedience to order duly promulgated by public servant), 269 (unlawfully or negligently spreading infection of any disease dangerous to life), 270 (malignant act likely to spread infection of disease dangerous to life) and under section 3 of the Epidemic Diseases Act, the police said. "Some party members have also been booked for indulging in a scuffle during which some women constables were hurt while the uniform of a lady sub-inspector got torn," the Gautam Buddh Nagar police said in a statement. Earlier in the day, around 200 Congress workers, including senior leaders of the party, had started a march on the expressways in Greater Noida after their convoy was stopped near Pari Chowk. The two Gandhi siblings and around 150 party workers were briefly detained by the police and later released on personal bond, a senior officer told . The party workers were en route to Hathras to meet the family of the 19-year-old Dalit woman, who had died in a Delhi hospital on Tuesday, a fortnight after she was allegedly gang-raped near her village in western UP.
Categories: Business News

View: Crush the rape seed

October 2, 2020 - 2:13am
On November 27, 2014, after a five-month probe, the Central Bureau of Investigation (CBI) closed a case of alleged rape and murder of two teenage girls reported on May 27, 2014, in Katra, a village in western Uttar Pradesh’s Badaun district. The searing image of the two bodies hanging from a mango tree with villagers sitting and standing around them as if in a dumbstruck vigil upset appetites across the country and embarrassed 21st-century India.CBI’s conclusion — that the two girls had not been raped or murdered, but had hanged themselves, after an affair of one of the girls with one of the suspects had soured — confused many, but settled matters for most. Samajwadi Party chief Mulayam Singh Yadav, whose son was then-UP chief minister, had already been berated for his earlier comment, ‘Ladke, ladke hain… galti ho jaati hai’ (Boys will be boys, mistakes happen), and Badaun became another proper noun associated with India’s ‘ho jaati hai’ rape.I witness? noAlmost a year later, on October 28, 2015, aspecial court under the Protection of Children from Sexual Offences (POCSO) Act 2012 rejected the CBI’s findings. Apart from finding glaring inconsistencies — which included the fact that established procedures were not followed in the first autopsy that had pronounced ‘no rape’, on the basis of which CBI had refused to file a charge sheet against the accused — the POCSO court found that family members of the deceased had been harassed by the investigators.In journalist Priyanka Dubey’s 2018 book, No Nation for Women: Reportage on Rape from India, the World’s Largest Democracy, the author quotes Sohanlal, one of the two brothers whose daughters had been killed, ‘…[the CBI] would ask: ‘When Pappu (Yadav, one of the accused) was killing your daughter, did you see? Were you present when Pappu was hanging your daughter to the mango tree?’ On asking the CBI team why the family members of the victims were being tortured like this, Dubey quotes him saying, ‘Tu zyaada tez ban raha hai, tujhe fansayenge’ (You are acting too smart, we will implicate you in the case.)While names of rape victims are, by law, kept anonymous by the media, they are obviously known to investigators — especially surnames. In the 2014 Badaun case, CBI field officers were reportedly all from villages near Katra, with one of the field officers having relatives from the area. Sohanlal was apparently told clearly by the CBI team to not implicate Pappu, a main accused. His surname was Yadav. While the POCSO special court is supposed to complete a trial within a year, the Badaun case drags on, outside the purview of the public eye and concern. Instead, the country has identified another ‘rape’ destination in Hathras in western UP, the village Boolgarhi being the site of another alleged gang rape and murder.The Special Investigation Team (SIT) announced by chief minister Yogi Adityanath visited the family of the murdered on Wednesday. But what has been ominously familiar is the behind-the-scenes show by those investigating the horrific crime. The PTI image of UP Police cremating the body of the 19-year-old victim at 2.40 am on Tuesday/Wednesday on a field — the tall green grass in the foreground would have made the scene bucolic were it not for the sight of a pile of wood with a bundle wrapped on top and smoke curling up, and five figures in police uniform looking on with their faces covered and protected against Covid — starkly points to the inordinate and yet-to-be-explained rush to get rid of the victim’s body.Crush the rape seedThe victim’s family members maintain that the police did not let any of them perform her last rites, which the police have refuted. Once again, strange things seem to be at play: the medical report from Aligarh Hospital that mentioned injuries does not confirm ‘forced sexual intercourse’. At the time of writing, a final post-mortem is awaited once the forensic report arrives. And, once again, the four suspects are from ‘upper caste’, the victim, a dalit. In the terrain of theory, this should not matter. But as noted in the Badaun case, it does for some kinds of investigations.On Wednesday, Adityanath tweeted that Prime Minister Narendra Modi had asked his administration to ‘take strict action against the guilty’ (doshiyon ke virudh kathortam karyawahi ki jaye). This sentence, paraphrased or quoted verbatim by the CM, holds the key not only to finding justice for the family of the teenage girl, but also to all investigations into crimes against women, especially rape and murder. The focus, at least for investigators, must be on the suspected perpetrators, not on the victim and her antecedents. If this approach is driven home from the highest powers of governance in the state — any state — the many twists and turns and play usually at work ‘on the field’ becomes secondary.The UP Police must give a valid explanation for its pre-dawn ‘in camera’ cremation. The SIT team must ensure that its members bear no relation or (caste or otherwise) affiliation to the village and the suspected perpetrators. Let there be no extraneous forces at play from mango tree or village green to the investigating table. To this end, finding and punishing the guilty is the only deterrent against ‘empowered’ perpetrators — and for us not to remember Badaun, Hathras, Bulandshahr, Azamgarh… for the most noxious reasons.
Categories: Business News

Oppn-ruled states to reject borrowing plan

October 2, 2020 - 2:13am
NEW DELHI: Ahead of the crucial meeting of the Good and Services Tax (GST) Council on October 5, the Opposition-ruled states have dug in their heels against the Centre’s two borrowing options on GST shortfall compensation and are likely to take a common stand at the meeting.The Opposition-ruled states of Punjab, Chhattisgarh, Jharkhand, West Bengal, Kerala, Delhi, Maharashtra, Puducherry and Telangana would reject the borrowing options and ask the Centre to activate the grievance redressal mechanism.Chhattisgarh commercial tax (GST) minister TS Singhdeo told ET, “Our stance is what it was. The Centre should not take a majoritarian view but develop a consensus. This has been the spirit of the GST Council. There are a few states who do not understand why they should take responsibility for a shortfall. First, you took away our taxation rights and then you want us to take a loan to make good the GST compensation?”Singhdeo said that there had been one interaction, organised by Kerala finance minister Dr TM Thomas Isaac where the Opposition-ruled states agreed that the options proposed by the Centre were unacceptable. “We would discuss more and formulate a strategy,” said Singhdeo.The political controversy has been triggered by a GST revenue shortfall of Rs 2.35 lakh crore for the states. As per the GST Act, the Centre has to compensate for any GST losses. As per the Centre’s calculation, Rs 97,000 crore is on account of GST implementation and Rs 1.38 lakh crore is the impact of Covid on state revenues. Looking at Covid as an “act of God”, which is not defined under the Act, the Centre has proposed that the states borrow Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 crore from the market.Punjab finance minister Manpreet Badal questioned the Centre’s motive behind proposing states to take a loan. “It cannot be my word against theirs. There is a dispute resolution mechanism under the law. Why has the Centre been unwilling to activate it for three and a half years? This sets a wrong precedent for India,” Badal said adding Punjab would stick to its stand, rejecting the two borrowing options. “We do not know the math used by the finance ministry to reach these figures of Rs 97,000 crore and Rs 1.38 lakh crore. For us, this is a constitutional violation,” he said.Trinamool Congress-ruled West Bengal has also rejected the two options with finance minister Amit Mitra terming the Centre’s stance as being “anti-federalist”. The Opposition-ruled states may informally discuss the issue on October 3. Jharkhand finance minister Rameshwar Oraon told ET, “There is no question of accepting the two options. The smaller states have a bigger problem of shortfall. We are likely to hold more discussions with other states and firm up a common stance on October 3.”Singhdeo said that the states do not have a third option to propose to the Centre. “There is only one option which is, the government of India borrow the sum from the RBI, which has the best interest rates,” he said. The Opposition ruled states are hoping to get support from Tamil Nadu and Telangana governments as well.
Categories: Business News

Syngene International joins global consortium of 19 healthcare organisations on COVID-19 testing

October 2, 2020 - 2:13am
NEW DELHI: Syngene International Ltd on Thursday said it has joined a global consortium of 19 organisations from the healthcare industry to help inform, improve and accelerate various aspects of COVID-19 testing.The consortium, led by Bristol Myers Squibb, will focus on a wide range of aspects from research to clinical diagnostic applications, the company said in a statement.A diverse group of companies with synergistic areas of expertise, including precision medicine, diagnostics, occupational health, pharmaceuticals and clinical testing laboratories, the consortium will help provide clarity and potential solutions to COVID-19 testing challenges, it added.To advance the common goal, the members can share relevant expertise, materials and experiences to accelerate understanding of COVID-19.Moreover, they can analyse available scientific and health data, materials and information to develop, improve and deploy current assays and new approaches for the COVID-19 testing paradigm, the company said.Syngene COO Mahesh Bhalgat said, "Bristol Myers Squibb and Syngene have been research partners for fifteen years. We fully support the aims of the consortium and look forward to sharing our experience and expertise of the past six months, and are operating one of the largest RT-PCR testing private laboratories in Karnataka."He added that the world of medical science is benefitting enormously by sharing information about this coronavirus and we welcome the opportunity to contribute.Through the consortium, members may also contribute knowledge gained from the collaborative research by publishing work that will inform the scientific community and general public of the consortium's findings, the statement added.Syngene said since the outbreak of the coronavirus pandemic, it has been actively contributing its scientific expertise and resources in the fight against the virus.It has collaborated with the Centre for Cellular and Molecular Biology (CCMB) to deliver a high throughput next generation sequencing (NGS)-based genomic screening assay that can test 5,000-10,000 samples simultaneously, the company said.Besides, Syngene's RT-PCR testing centre has conducted more than 50,000 tests and has tied up with over 50 organisations for testing their employees, the company added.
Categories: Business News

Dollar Industries sets up solar power plant for captive power consumption

October 2, 2020 - 2:13am
KOLKATA: City based innerwear company Dollar Industries Limited on Thursday commissioned a 4 MW solar power plant at their manufacturing facility in Tirupur.The move is part of the company's ‘green mission’ initiative and has a capacity of generating 75 lakh power units annually. The company has invested Rs 18 crore for the plant and the payback period is expected to be 5 years.Installation of the solar plant will not only help the company reduce costs but also make its Tirupur spinning unit self-reliant. To produce 1kg of cotton yarn, the cost of power is approximately Rs 27-28 which is expected to feed almost 50% of the daily consumption at the spinning unit. Moreover, the solar plant will help in curbing the CO2 emissions by 9000kgs/per day with a sustainable environment.Sharing his thoughts, Dollar Industries managing director Vinod Kumar Gupta said: “In the current pandemic situation, it is imperative to reduce costs and at the same time also create a clean and eco-friendly manufacturing facility."Power generated from the solar plant will primarily used for our spinning unit. Excess power will be utilized to feed the dyeing unit, which is located at SIPCOT Industrial Park, Perundurai.“By keeping a close watch on the development process, we mainly maximize the utilization of water, energy and our natural resources, safeguarding the earth by reducing our carbon footprints," he added.The solar plant has been commissioned by Indway Power Energy, who is the EPC (engineering, procurement and construction), partner from Coimbatore.The company has a substantial pan-India presence and has established its presence in global markets also, especially in countries like UAE, Oman, Jordan, Qatar, Kuwait, Bahrain, Yemen, Iraq, Nepal, and Sucall over the past few years.
Categories: Business News

Vodafone Idea gets shareholders' nod for increasing borrowing limit, issuance of securities

October 2, 2020 - 2:13am
NEW DELHI: Shareholders of Vodafone Idea (VIL) have approved a slew of proposals, including raising its borrowing limit and issuance of securities of up to Rs 15,000 crore, according to a regulatory filing.The shareholders' nod came at the company's Annual General Meeting (AGM) held on Wednesday, where various proposals -- expected to enable the troubled telecom operator to pay statutory dues and stay afloat -- were put up for voting.A special resolution for increasing the borrowing powers of the company was cleared with 99.8 per cent votes, while another relating to issuance of equity securities for up to Rs 15,000 crore received 98.6 per cent votes in favour."All the resolutions mentioned in the AGM notice as per details...accordingly stand passed with requisite majority," VIL said in a BSE filing on Thursday.According to the AGM notice circulated by the company on September 7, the resolution on borrowing powers pertained to raising borrowing limit to Rs 1 lakh crore.Shareholders of the company, which was earlier listed as Idea Cellular, had approved a borrowing limit of Rs 25,000 crore at its AGM in September 2014.Other proposals that VIL shareholders approved were alteration of Articles of Association of the company, creation of security on properties and transactions with Indus Towers and Bharti Infratel.Earlier last month, the board of Vodafone Idea had approved fund-raising plans of up to Rs 25,000 crore through a combination of equity and debt instruments, subject to shareholders' approval.The board's move had come just days after the Supreme Court directed telecom operators to pay 10 per cent of their total Adjusted Gross Revenue (AGR)-related dues this year, and rest in 10 instalments starting from next fiscal year.The ambitious fund raising plans promise to throw a lifeline to cash-strapped VIL, which has suffered massive losses, has been losing subscribers and Average Revenue Per User (ARPU), and faces outstanding statutory dues of about Rs 50,000 crore.VIL is the third largest operator in the fiercely-competitive Indian telecom market, where Jio's entry in 2016 with free calls and cheap data pushed some rivals to exit or merge with other operators to stay afloat.Jio Platforms -- the unit that houses India's youngest but largest telecom firm Jio and apps -- recently raised Rs 1,52,056 crore from 13 investors, including Facebook, Google, General Atlantic, Intel Capital and Qualcomm Ventures.Vodafone Idea's overall AGR dues stood at over Rs 58,000 crore, of which the company has paid Rs 7,854 crore to the Department of Telecom so far.The statutory dues arose after the Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.
Categories: Business News

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