News for August End 2021

1. FM unveils ~6-trn plan to monetise assets

Finance Minister Nirmala Sitharaman on Monday announced a pipeline of assets the government is
looking to monetise to collect about ~6 trillion to partly fund its ambitious infrastructure projects
over four years ending 2024-25. The ownership of all these assets would remain with the
government, and there would be a mandatory hand-back of assets after a certain time period. So,
the government is not selling away these assets. The National Monetisation Pipeline (NMP) will
constitute 14 per cent of the Centre’s share of ~43.29 trillion in the National Infrastructure Pipeline
(NIP). Global players such as Blackstone, Blackrock, and Macquarie have shown interest in
participating in the monetisation process. The plan covers 20 asset classes spread over 12 line
ministries and departments. The top three sectors by value are roads (~1.6 trillion), railways (1.5
trillion) and power (~85,032 crore) and lays the road map for monetising brownfield projects where
investments have already been made, where a completed asset is languishing or which is not fully
utilised.
https://www.business-standard.com/article/economy-policy/fm-announces-plan-to-monetise-
assets-realise-rs-6-trillion-till-2024-25-121082300923_1.html

2. FIX TAX PORTAL SNAGS BY SEP 15, FM TELLS INFY

Finance Minister Nirmala Sitharaman on Monday asked IT services provider Infosys to fix persistent
technical issues in the new tax filing portal by September 15, ahead of the tax returns deadline. The
company was also nudged to ramp up resources to ensure services to millions of taxpayers.

3. TATA SONS SEEKS NOD TO RAISE ~40,000 CRORE

Tata Sons has sought shareholders’ approval to raise up to ~40,000 crore via bonds, including non-
convertible debentures, according to a notice sent to shareholders. The shareholders will vote on
the proposal on September 14 at the firm’s annual general meeting.

4. CCI slaps fine of ~200 cr on Maruti Suzuki

The CCI passed a final order against MSIL for indulging in anti-competitive conduct of resale price
maintenance (RPM) in the passenger vehicle segment by way of implementing discount control
policy vis-à-vis dealers, and accordingly, imposed a penalty of ~200 crore upon MSIL, besides passing
a cease and- desist order. Maruti — which has more than 50 per cent share of India’s car market —
told the regulator that it imposed no such policy and that the dealers were free to offer any
discounts they wished to their customers. The CCI order, however, contained extracts of several
emails exchanged between dealers and Maruti officials, which made it “evident that the discount
control policy was controlled. Carmakers at times set a limit on discounts their dealers offer to
prevent price wars among them, but Indian law says the practice, described as “resale price
maintenance”, is prohibited if it adversely impacts competition.

5. Forex reserves set to cross $655 bn by March, says report

As the central bank continues to increase forex reserves by running down the forward book which
totalled $42 billion as of end-July, signalling its strong resolve to build a bigger reserve
cushion(hedging)(protect) to aid its expansionary, unorthodox monetary policy, the reserves are set
to top the $655-billion-mark by March, according to a report. The forex kitty(total value of forex
reserves) declined by $2.10 billion to $619.365 billion for the week to August 13 due to a fall in the
core currency assets and gold, showed the latest RBI data. The reserves had risen to a lifetime high
of $621.464 billion in the previous reporting week ending August 6. While foreign currency assets,
the biggest component of the reserves, declined by $1.358 billion to $576.374 billion in the reporting
week, the value of the gold reserves slipped by $720 million to $36.336 billion.

6. Govt to monetise 25 airports over 4 yrs, to fetch ~20,782 cr

7. Bitcoin tops $50,000, stirs forecast of run towards record
high
Bitcoin topped $50,000 for the first time since May as crypto prices continued an ongoing
recovery from a disorderly rout just three months ago. The largest virtual coin advanced 3.8 per
cent to $50,272 as of 6:53 am in New York, with other tokens including Ether and Cardano’s
ADA also rising. The revival in virtual currencies has excited the animal spirits of the crypto
faithful, putting predictions of $100,000 or more for Bitcoin back in vogue. Others see the
volatile asset carving out a wider trading range for now. “We’re seeing some very bullish signs
here. Bitcoin could “test all-time highs again” after pushing past levels that some had seen as
major challenges. Market sentiment also benefited from PayPal Inc.’s announcement that it
will allow UK customers to make crypto transactions. It’s the first international expansion
of PayPal’s crypto service beyond the US, and another hint at wider adoption of the industry. In
April, Bitcoin hit a record of almost $65,000, driven by a tide of liquidity, fast-money bets and
optimism about growing demand from institutional investors. Supportive views from
billionaire Elon Musk and the direct listing of digital-currency platform Coinbase Global
also fueled optimism.

8. PayPal launches crypto buying, selling in UK

PayPal Holdings will allow customers in the UK to buy, sell and hold bitcoin and other
cryptocurrencies starting this week, the company said on Monday. The roll-out, which marks the first
international expansion of PayPal's cryptocurrencies services outside of the United States, could
inspire further mainstream adoption of the new asset class. With over 403 million active accounts
globally, the San Jose, California-based company is one of the largest mainstream financial
companies to offer consumers access to cryptocurrencies. PayPal launched cryptocurrency buying
and selling in the United States early this
year, later enabling customers to use their digital coin holdings to shop at the millions of merchants
on its network. The company hoped its foray into the new asset class would encourage global use of
virtual coins and prepare its network for new digital currencies that may be developed by
corporations and central banks. “We are committed to continue working closely with regulators in
the UK, and around the world, to offer our support— and meaningfully contribute to shaping the
role digital currencies will play in the future of global finance and commerce. In the UK, PayPal's
service will rival that of established cryptocurrency exchanges such as Coinbase Global, as well as
well fintech startups such as Revolur. Customers will be able to buy bitcoin, ether, litecoin and
bitcoin cash through their PayPal wallets online or on the mobile app. The move comes as more
established financial companies have started offering their clients, both consumers and institutions,
access to digital assets, amid rising cryptocurrency prices.

9. Sixteen Merchant banks in fray to assist in LIC IPO

Sixteen merchant banks are in the fray to become the book running lead managers (BRLM) for the
initial public offering (IPO) of Life Insurance Corporation of India (LIC). These merchant banks will
have to make a presentation before the Department of Investment and Public Asset Management
(DIPAM) on August 24-25. The shortlisted banks are BNP Paribas, Citigroup Global Markets India,
BofA Securities, Goldman Sachs (India) Securities, HSBC Securities and Capital Markets (India), JP
Morgan India, Nomura Financial Advisory and Securities (India), Axis Capital, DAM Capital Advisors,
HDFC Bank, ICICI Securities, IIFL Securities, JM Financial, Kotak Mahindra Capital, SBI Capital, Market,
and Yes Securities India. The government is looking to appoint up to 10 BRLMs with experience in
IPOs, and will have to form a team. The BRLMs, in consultation with the government, will form a
syndicate as required under the Securities and Exchange Board of India (Sebi) guidelines. They will
also be required to undertake due diligence, prepare the draft red herring prospectus (DRHP), advise
the government on regulatory norms, and assist in securing approval and exemptions, wherever
necessary, from regulatory agencies like Sebi, the Reserve Bank of India (RBI) and Insurance and
Regulatory Development Authority of India (Irdai) as well as stock exchanges. The listing of LIC’s
shares on exchanges would involve part sale of the government’s stake in the insurer, and to raise
fresh equity share capital. A part of the public offering may be reserved for employees and
policyholders of LIC.

10. India could gain $11 trn in 50 yrs with climate action,
says report
Unmitigated climate change can cost India $35 trillion in economic potential over the next 50 years.
Therefore, India must act now to prevent the country from the colossal loss, according to the latest
Deloitte Economics Institute. The report, titled, “India’s turning point: How climate action can drive
our economic future”, reveals how the country could instead gain $11 trillion in economic value over
the same period. Deloitte’s report comes against the backdrop of the IPCC (Intergovernmental Panel
on Climate Change) report that flags serious concerns related to climate change and its catastrophic
impact on the world due to rising temperature. Glacial retreat in the Hindu Kush Himalayas;
compounding effects of sea-level rise and intense tropical cyclones leading to flooding; an erratic
monsoon; and intense heat stress are likely to impact India in recent years, indicated the IPCC report
released earlier this month. Deloitte India, has a narrow window of time — the next 10 years — to
make the decisions needed to alter the trajectory of climate change. No one is immune to the
impact of climate change but for India, points out Dhawan, this is a window of opportunity to “lead
the way and show how climate action is not a narrative of cost but one of sustainable economic
growth.” As India aspires to be a $5- trillion economy, it is not just foreign and domestic
investments that will be the key in driving growth, the country must also take this opportunity to
align its ambitions with climate choices. With no action taken on climate change, the average global
temperatures could rise by 3°C or more by the end of this century. This will make it harder for
people to live and work, as sea levels rise, crop yields fall, infrastructure is damaged, and other
challenges emerge, threatening the progress and prosperity that the nation has enjoyed in recent
decades. Over the next 50 years, the top five most impacted industries in terms of economic activity
are expected to incur a significant share of climaterelated loss, says the report. These industries —
services (government and private), manufacturing, retail and tourism, construction, and transport —
currently account for more than 80 per cent of India’s GDP. Together, they form the basis of the
country’s contemporary economic engine.
11. Top taxpayers may get to exit faceless scheme

Centre is looking at modifying the ambitious Faceless Assessment Scheme (FAS) meant to cut down
the physical interface between a taxpayer and the Income Tax Department. the change could offer
flexibility to the top rung of taxpayers whose income exceeds ~200 crore. Such taxpayers could get
room to opt out of the faceless scheme and go for jurisdictional assessment to explore if areas such
as international taxation and capital gains could be handled by expert teams within the tax
department. The purpose of the scheme was to eliminate corruption and not to cause inconvenience
to taxpayers. Only about 100,000-150,000 cases are taken up annually for scrutiny. This is about 0.5
per cent of the total taxpayer base, of which majority are complex matters.
12. FM asks PSBs to push credit

She asked public sector banks (PSBs) to reach out to various sectors, especially export, to address
their credit needs in order to keep up the momentum of the stimulus for economic revival. To
conduct a credit outreach programme in every district of the country, starting October. “I don’t think
it is time yet to conclude that there is no credit pick-up. Even without awaiting indications, we have
taken steps to ramp up credit. Banks had done a similar exercise in 2019 wherein they covered all
districts and extended all kinds of credit facilities to meet the demand requirements.

13. SBI FUND GARNERS ~12,000 CR IN NFO

The SBI Balanced Advantage Fund has collected a corpus of ~12,000 crore in its new fund offer
(NFO), the highest ever seen in the active funds space. They expect to collect another ~1,000 crore
as online applications will continue to arrive till midnight. The offer closed on Wednesday. With the
sharp surge in Indian equity markets and strong returns generated by equity funds, investors have
flocked towards NFOs of mutual funds. Last month, ICICI Prudential Flexicap fund raised ~9,808 crore
in its NFO. In 2017, passive fund BHARAT 22 exchange-traded fund had received ~14,499 crore
through its NFO.

14. Delhivery plans $1-billion IPO

Delhivery Pvt, an Indian logistics and supply chain start-up, plans to file a draft prospectus as soon as
October for its initial public offering (IPO) that could raise about $1 billion, according to people with
knowledge of the matter. Founded in 2011, Delhivery handles more than 1.5 million packages a day
through its 43,000-strong team across India. Delhivery would add to a strong lineup of Indian
startups that are ready to tap the IPO market in the coming months. Paytm, the country’s leader in
digital payments, filed its preliminary offering documents last month and could raise as much as
~166 billion ($2.2 billion). Flipkart, the Indian e-commerce giant controlled by Walmart Inc., and
digital education startup Byju, are also preparing for their first-time share sales. Details of
Delhivery’s IPO including size and timeline could still change as deliberations are ongoing.

15. Pandemic leads to boom time for tech fraud fighters

More people using the internet for financial and ecommerce transactions has led to job creation in a
niche segment. Specialists who can help deal with rising technology frauds are in high demand amid
the surge in electronic transactions during the pandemic. Demand for tech fraud experts has risen
upwards of 35 per cent, reveals employment and human resource services company TeamLease
Services. Financial services and ecommerce firms are among the major drivers of demand. Many
companies find it easier to outsource management of the issues to a consulting firm since building
internal capabilities is seen to be more expensive, say trend-watchers. Demand has picked up over
the last three quarters in particular. There are upto 25,000 openings in the segment, which include
people for fraud detection, prevention, audit, and forensic analysis. A spokesperson for KPMG in
India says hiring of tech fraud experts is up more than 100 per cent amid increased demand for
these services. Skills in demand include forensic tech skills, which are used to investigate computer
crimes involving
smartphones and the Internet of Things, , ransomware, and other cybercrimes. Arpinder Singh,
global markets and India leader, forensic and integrity services at EY, says there is increased demand
in the field of cybersecurity and data privacy. “The demand witnessed in the market has also led to a
need to have specialists and domain experts across the board – including technologists and
accountants. We foresee this demand to pick up in the future, especially in proactive fraud
assessments, compliance and risk monitoring, and cyberresponse frameworks. “We are seeing
increased hiring of domain experts since the nature of fraud is no longer simple, but (has) evolved
into complex scenarios that are not easily detectable. Enterprises have begun extensively using
advanced data analytics, machine learning technology, and security platforms to either have a tech-
fraud prevention or early-detection mechanism. He adds that regulators have also laid emphasis on
payment platform security and other related guidelines. This has lent heft to organisations to kick-
start fraud management on priority. “Many enterprises are embarking on a journey of optimising
their digital platforms to be more fraud aware with enhanced security,” says Bhat. Companies had
identified tech-related fraud as among their major challenges, according to a December 2020
Deloitte Touche Tohmatsu India LLP India Corporate Fraud Perception Survey. Respondents had
listed cybercrime as the fraud their organisations are most likely to experience over the next two
years. They had also additionally listed fraud due to use of bots, artificial intelligence, and related
technologies in the top five.

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