World’s top infrastructure manager eyes India oil, gas pipeline assets

Source: LiveMint.com, Mar 25, 2020

The global slump in oil prices amid the coronavirus outbreak will push Indian state-owned firms to sell some assets, according to Macquarie Infrastructure and Real Assets, and the world’s biggest infrastructure investor is already in line.

“There is a fair bit of opportunity for the government to divest non-core oil and gas assets, like oil storage facilities, pipelines, transmission facilities,” Suresh Goyal who heads MIRA in India and Southeast Asia, said in an interview. “With our investment platforms, local teams, we are well placed on capitalizing this opportunity.”

While he declined to share investment projections, MIRA raised about $61 billion in capital globally last year — the highest in the world based on data from Infrastructure Investor –and has poured $2.5 billion into India over the past decade. Attracting foreign investment is crucial to meet Prime Minister Narendra Modi’s goal of spending $1.5 trillion on new roads, rail links and other infrastructure over the next five years as public finances deteriorate.

Canada’s Brookfield Asset Management last year acquired Reliance Industries Ltd.’s East West Pipeline via an infrastructure investment trust for 130 billion rupees ($1.7 billion). The government plans to split GAIL India’s transmission business into a separate entity that it could sell to strategic investors. GAIL owns more than 70% of the country’s 16,800 kms pipeline network.

“India’s energy consumption is likely to grow 60%-70% in the next decade and a half, leading to a significant jump in petroleum products and gas consumption,” said Deepak Mahurkar, leader, India oil and gas industry practice, at PricewaterhouseCoopers LLP. “This is an important story for investors, especially the global private equity firms and infrastructure asset managers.”

MIRA set shop in India in 2009, and so far more than half its investment in the country has gone to the road sector. It is now looking to exit several investments, Goyal said, while declining to share details or returns beyond saying that they were “profitable.”

One concern, however, is how quickly and strongly the economy will recover from the coronavirus-led disruption, Goyal said. Another is banks’ increasing unwillingness to lend to the infrastructure sector. Indian lenders are battling the world’s worst stressed-loan ratio, with much of the soured debt in the infrastructure space. Banks’ lending to the sector, which includes power, roads, telecom, contracted by 1.8% in the first 10 months of the fiscal year ending March 31 compared with 10.8% growth a year earlier. “The capital that we bring is in the form of equity but it does need the support of local banks for working capital,” Goyal said. “Hopefully measures taken by the government and the central bank will change things.”

Chinese firms resume export of pharma inputs to India

Source: The Hindu Business Line, Mar 25, 2020

New Delhi: In what could be good news for Indian drug makers, the import of active pharmaceutical ingredients (APIs) and other raw materials from China has resumed.

Following the outbreak of Covid-19 in China, export of raw materials from that country to India was disrupted as most manufacturers ceased operations.

“The import of raw materials from China commenced about 10 days ago and we are now receiving them from all provinces except one,” R Uday Bhaskar, Director-General,

Pharmaceutical Export Promotion Council (Pharmexcil), told BusinessLine on Wednesday.

India imports about $2.5-billion worth of APIs from China, according to Pharmexcil data. The industry had earlier expressed concern over the disruption of imports from China and said the existing inventory would be adequate to run production for up to three months.

A Pharmexcil official said that the resumption of imports was a good development.

Logistics concerns

Chinese manufacturers have also conveyed their readiness to supply to India personal protection equipment that will be crucial in fighting the Covid-19 contagion. “We have been approached on this by China only yesterday and are working on it,” he said.

However, the state of internal logistics and the inability to move shipments are a concern.

Both for import of raw materials from China, and pharma exports, the lockdown has been a challenge, with cancellation of all flights, suspension of operations at ports, and trucks off roads. “Most of the exports have not been lifted from airports and ports from the beginning of this month. Restrictions on pharma exports are also matter of worry for the industry now,” said a senior functionary of a leading Hyderabad-based pharma company.

E-commerce firms set to resume work after police assurance

Source: Business Standard, Mar 25, 2020

Bengaluru / New Delhi: Walmart-owned Flipkart said on Wednesday it would resume services and Amazon said it was working with the government to enable its deliveries after state governments reached out to the firms, which had temporarily stopped accepting new orders amid reports of police high-handedness.

The Delhi police issued a statement saying they were proactively engaging with e-commerce portals and were issuing passes to ensure agents were able to commute seamlessly and deliver essential goods to residents during the 21-day lockdown. The Bengaluru police, too, came out with guidelines for issuing curfew passes.

Following this, Flipkart Chief Executive Officer Kalyan Krishnamurthy said, “We have been assured of the safe and smooth passage of our supply chain and delivery executives by local law enforcement authorities and are resuming our grocery and essentials services later today (Wednesday).”

Similarly, a note on Amazon India’s Pantry page said, “Dear customers, due to local restrictions, we are not able to deliver. We are working with the government authorities to enable us to deliver essential items. We will communicate through e-mail/SMS when we have an update”. It also offered customers the option of cancelling orders.

These developments came after e-commerce firms sought the support of local governments and police authorities to meet customers’ needs after there were reports of some deliver personnel being beaten up while on duty. Additionally, officials of the Confederation of All India Traders met Union Home Secretary Ajay Bhalla, Department for Promotion of Industry and Internal Trade Secretary Guru Prasad Mohpatra and highlighted the issues faced.

Earlier in the day, Amazon India had said it had temporarily stopped accepting orders and was disabling shipments of lower-priority products. It was prioritising products that customers needed most during the lockdown. A senior industry executive said that the lack of clarity on the rules had made matters worse. “The authorities keep coming up with circulars that are contradictory to the previous ones, and this is creating confusion,” the executive said.

CCEA approves Rs 1,340-cr recapitalisation for weak regional rural banks

Source: Business Standard, Mar 25, 2020

New Delhi: The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a Rs 1,340-crore recapitalisation plan for the weak regional rural banks (RRBs) to help improve their capital to risk weighted assets ratio (CRAR) during 2020-21. RRBs are mandated to maintain a minimum CRAR of 9 per cent by the regulator.

Of this, Rs 670 crore each would be provided by the Centre and sponsor banks, Information and Broadcasting Minister Prakash Javdekar told reporters after the Cabinet meeting. This is, in a way, an extension of the recapitalisation plan that was to end this financial year (April 2019 to March 2020, of FY20).

The release of the government’s share of funds would be contingent upon the release of the proportionate share by the sponsor banks, an official statement said.

After the Reserve Bank of India’s decision to introduce disclosure norms for CRAR of RRBs with effect from March 2008, a committee was set up under the chairmanship of former central bank deputy governor K C Chakrabarty.

Based on the Committee’s recommendations, a scheme for recapitalisation of RRBs was approved by the Cabinet in 2011 to provide capital support of Rs 2,200 crore to 40 RRBs with an additional amount of Rs 700 crore as contingency fund to meet the requirement of the weak RRBs, particularly in the north eastern and eastern region.

By March 31 every year, National Bank for Agriculture and Rural Development (Nabard) identifies RRBs that require recapitalisation assistance to maintain the mandatory CRAR of 9 per cent.

After 2011, the recapitalisation scheme was extended till 2019-20 in a phased manner with a financial support of Rs 2,900 crore a year. Of this, 50 per cent is provided by the government.

The government has released Rs 1,395.64 crore out of its share of Rs 1,450 crore to RRBs in 2019-20 so far. Meanwhile, the government has initiated structural consolidation of RRBs in three phase, reducing their number from 196 in 2005 to the present 45.

Covid-driven tax reliefs to cost government 2-3% of GDP

Source: The Economic Times, Mar 26, 2020

Taxation experts have welcomed the measures announced by the government, saying these steps will add up to 2-3 per cent of GDP but will go a long way in addressing the issue of liquidity and deferment of payment obligations. The government on Tuesday came out with a slew of relaxation in tax and payment compliances by reducing the quantum of penalties, extending the deadline to make clear the dues among others to help the public and corporates.

Some of the key measures include extension of tax filing/returns and accordingly all tax due arising between March 20, 2020 and June 29, 2020 now stand extended to June 30, 2020.

This is across income tax and GST, and would apply to all return filings, replies/appeal filings, and other compliance documents. For delayed payments, interest rates have been reduced to 9% under both income tax and GST.

Welcoming the measures, Deloitte said these measures will help ease the compliance pressure on businesses and individuals and provide necessary relief to critical sectors in view of the Covid outbreak.

Many analysts have said the lockdowns will shave off as much as Rs 9 lakh crore of the GDP.

Gokul Chaudhri of Deloitte India said, “These steps will certainly give a lot of confidence to corporates and different sectors of the economy.
The relief measures and easing of compliance deadlines will enable businesses to sustain themselves in the current atmosphere and is likely to have a positive impact on economic activities and more importantly remove uncertainty in the system.

“From the tax point of view, the reliefs like tax breaks, accelerated depreciation, reliefs on payrolls, payments-weighted deduction, relief on contribution to PF will add up to 2-3 percent of GDP, which is much needed to help address the issue of liquidity and deferment of payment obligations,” he said.

The move to ensure 24/7 trade facilitation at ports through the customs will not only promote ease of doing business but also ensure smooth flow of trade, he added.

Jiger Saiya, partner and leader for tax and regulatory services at BDO India, said the extension to the Vivad Se Vishwas scheme will go a long way in making the entire scheme a success as in the original form it was an impossibility to attain the objective.

“With the extension, taxmen will now have time to clarify more aspects and taxpayers will have reasonable time to evaluate and seek settlement of tax disputes, under the scheme,” Saiya said.

Veena Sivaramakrishnan of Shardul Amarchand Mangaldas & Co said the tax measures are a step in the right direction and indicate more such practical measures to come in the future.

KPMG India’s Rajeev Dimri said the various tax reliefs announced by the finance minister would provide the much needed succor to all in these unprecedented times.

Naveen Aggarwal of KPMG said extension of the deadline under Vivad Se Vishwas from March 31 to June 30 without paying additional tax of 10 per cent is a welcome move and is in line with the representations made by taxpayers and industry forums.

This would help companies save for possible financial difficulties faced by companies in this crises.

On the IBC changes, Manish Aggarwal of KPMG said changing the operative sections of the IBC will help avoid large scale insolvencies.

The government also needs to consider sector specific measures to address the cash flow & liquidity enhancement measures to help businesses withstand this period.

Stopping the process towards insolvency is necessary but not a sufficient condition to address fundamental issues facing the businesses now.

Rajesh Narain Gupta, managing partner of SNG & Partners the measures announced will lead to a positive direction and will give a boost to trade and commerce.

Cabinet nod to railway flyover in Aligarh

Source: The Economic Times, Mar 25, 2020

The Union Cabinet on Wednesday gave its nod to the construction of a railway flyover in Uttar Pradesh’s Aligarh to reduce congestion.

It also approved signing of an agreement between India and Germany to increase cooperation in the field of railways.

Briefing about the decisions taken by the Union Cabinet, Information and Broadcasting Minister Prakash Javadekar said the Aligarh-Harduaganj flyover will be 22 km long and is likely to be completed in five years.

He said the Cabinet also approved MoU between India and Germany for technological cooperation in the railway sector.

A decision was also taken to transfer five acres of defence land in Kanpur to Kendriya Vidyalaya Sangathan for construction of a Kendriya Vidyalaya.
Similarly, an eight-acre piece of defence land at Old Cantonment in Prayagraj (Allahabad) will be given to Kendriya Vidyalaya Sangathan for construction of a Kendriya Vidyalaya.

Despite govt clearance, ecomm cos find it difficult to deliver essentials

Source: ETRetail.com, Mar 25, 2020

BENGALURU: Delivery of essential items such as food, groceries and medical supplies, ordered by customers from ecommerce sites, has been disrupted even after state governments exempted ecommerce services from the ongoing widespread lockdowns till March 31, prominent etailers told ET.

“We are not operational due to restrictions imposed by local authorities on the movement of goods in spite of clear guidelines provided by the central authorities to enable essential services,” Bigbasket informed customers through its app on Tuesday.

The country’s largest e-grocer has stopped accepting orders in Gurugram and Mumbai till further notice, while operations at several other regions are at lower than normal capacity. Local authorities are shutting down warehouses and stopping trucks from crossing state borders, hampering the availability of essential goods for a third consecutive day, especially in Delhi NCR, Mumbai, Kolkata, Ahmedabad, Chennai and Hyderabad, the ecommerce companies claimed. ET could not independently verify these claims.

Amazon removed all non-essential items from its India marketplace to ensure that the most important needs were met first. The company warned customers of increased cancellations and delays in deliveries in some regions. “We continue to make changes to our logistics, transportation, supply chain, purchasing and seller processes to prioritise stocking and delivering priority products like household staples, health and hygiene products, sanitizers, baby formula, and medical supplies,” Amazon said.

The curfew-like situation has cut off first-mile and last-mile logistics for ecommerce firms, effectively choking their businesses. “On March 23, there was a 40% drop in the number of ecommerce deliveries across India and return to origin or RTO orders saw a massive increase by 330%,” said Pranshu Kacholia, vice-president of Business at logistics intelligence platform Clickpost.