GST Bill: Government will again try to convince Opposition, says Venkaiah Naidu
Stressing that the Goods and Services Tax (GST) Bill is the need of the hour, Union Minister M Venkaiah Naidu today said the government will again try to convince the Opposition so as to ensure passage of the legislation in second part of the Budget session beginning April 25. “Yes, GST…we have almost completed discussion with majority of the parties. There are one or two issues and that also we will try to convince Opposition and we want to get it passed because GST is the need of the hour,” the Parliamentary Affairs Minister told reporters here. On Congress’ charge that the government has not approached the opposition for resolving issues concerning the crucial GST Bill, Naidu said, “We have been talking to Congress and we will be talking to them finally also before listing the Bill… I am optimistic (the GST bill will be passed during this session).” The second part of the Budget session of Parliament will commence on April 25 and continue till May 13, he said, adding “13 Bills will be taken up in Lok Sabha as per the schedule and we are also planning to take up even the GST also. We are in discussion with other parties (on GST).” The GST Bill, which seeks to replace a slew of central and state levies with a uniform rate, was passed by Lok Sabha in May and is pending ratification by Rajya Sabha where the ruling NDA does not have a majority. Naidu said during this session, Parliament will be discussing mainly financial business comprising discussion and voting on demands of Ministries in Lok Sabha and discussion of selected ministries in Rajya Sabha. Appropriation Bills of Railways and General Budget and the Finance Bill will also be discussed, he added. Discussion for demands of grants for the Ministries of DoNER, HUPA, Skill Development, Social Justice, Civil Aviation and Tourism will be taken up in Lok Sabha while in Rajya Sabha, Ministries of Health and Family Welfare, HRD, Finance, MSEM and External Affairs (if time permits) will be taken for discussion, he said. “Budget is presented and referred to Standing Committees and the Standing Committees have completed their report and will report back to Parliament. On the basis of the Standing Committees report, Parliament will discuss the issues,” Naidu said. The minister said Parliament will also take up Bills to replace two Ordinances – The Uttarakhand Appropriation (Vote on Account) Ordinance, 2016 and the Enemy Property (Amendment and Validation) Second Ordinance, 2016. “Both Ordinances were issued earlier and both have to be approved by Parliament,” he said. Rajya Sabha will take up Bills on Appropriation Act, Whistle Blowers Protection, Industries Regulation, Mines and Minerals, Child Labour Prohibition and Anti-Hijacking, he said.
GAIL India to swap US LNG
State-owned gas utility GAIL India Ltd will swap one-third of the liquefied natural gas (LNG) it has contracted from the US with a gas seller nearer to the country to save on transportation costs. GAIL, in two deals, contracted 5.3 million tonnes a year of super-cooled gas (LNG) from the US starting 2018. Of this, it reckons 3-3.5 million tonnes will be shipped to India for consumption by local industries like power and fertiliser plants. “Transporting LNG in cryogenic ships from the US will not just be time-consuming, but will add a little extra to the cost, wiping away some of the gain accruing from a Henry Hub linked price for gas,” a senior company official said. To overcome this, GAIL plans to swap 1-2 million tonnes per annum of LNG from the US with a seller in Africa, the Middle East or Asia-Pacific. GAIL has issued a tender seeking expression of interest (EoI) from swapping part of the 3.5 million tonnes per annum of LNG it has contracted from Sabine Pass Liquefaction, LLC, US on FOB basis for 20-year period with supplies expected to commence from Q1, 2018. “There are suppliers who sell LNG to Europe from the Middle East or East Africa or the Asia Pacific region. GAIL’s US LNG can be supplied to European users and an equivalent volume shipped to India,” the official said. Doing this would help GAIL save on 10-15 days needed for a ship to travel from the US to India and back. For the other seller, the same benefit will accrue, besides saving on the transportation cost. “We would like the saving the seller makes through the swap to be shared with GAIL. We believe we can save 40-50 cents per million British thermal unit through the swap,” he said. In the tender, GAIL said it wants to swap some of the US LNG volumes from Sabine Pass with firms that have customers in countries in which LNG trade is not prohibited by US law and sanctions. In exchange it wants equivalent supplies on a delivered basis at Dahej import terminal in Gujarat and Dabhol facility in Maharashtra. GAIL sought bids from interest parties by May 5 for a five year swap. The company has two US deals — one with Cheniere Energy Partners to buy 3.5 million tonnes a year of LNG from Sabine Pass Liquefaction, a subsidiary of Cheniere, and another a 20-year sales and purchase agreement with Dominion Resources for supply of 2.3 million tonnes per annum. Supplies from both deals begin in 2018. GAIL also holds a 20 per cent stake in Carrizo’s Eagle Ford Shale acreage in the US. Of the US volumes, the company has sold 2 million tonnes of LNG to overseas users.
Odd-even impact: IGL clocks highest ever sales
Indraprastha Gas Ltd recorded highest CNG sale of 26.7 lakh kg a day this week after more vehicles switched to the cleaner fuel with the start of second round of ‘odd-even’ rule for plying of private cars. IGL is setting up one CNG dispensing station every two days, a world record, to meet the increased demand for gas. “We had an average compressed natural gas (CNG) sale of 23.5-24 lakh kg per day in 2015-16. On Monday, which was the first full working day of the odd-even restricted plying rule, we saw sale volumes jump to 26.7 lakh,” IGL Managing Director Narendra Kumar told PTI here. Previously peak sale volume was 26.4 lakh kg per day. “This is the highest ever sale we have ever achieved,” he said. “In 2015-16 we had a growth of 3-4 per cent in CNG consumption. This year (April 2016 to March 2017), we expect a growth rate of 8-10 per cent.” With the Delhi government from April 15 starting the second phase of odd-even rule under which cars will only be allowed on the road on alternate days, going by whether their number plates are odd or even. Kumar said IGL is setting up CNG dispensing stations at a record pace. “Last year we had 324 CNG stations. Beginning January, we have embarked up setting up 90 new stations and in about 100 days we have set up 55, which is one station every two days.” The remaining CNG stations would be set up by May, he said. Delhi has the highest number of CNG stations in the world and no city has ever expanded its network by more than 30 stations in a year. He said the talk of making the ‘odd-even’ rule a permanent fixture has led to more number of cars converting to CNG. “Earlier we had some 2,500 petrol or diesel run cars converting to CNG every month. But now we have about 5,000 additions every month.” IGL, the sole supplier of CNG to automobiles and piped cooking gas to households in the national capital region, is the country’s largest CNG retailer. “What is working in favour of CNG is also price cuts following global slump in energy prices. Rates were last cut by Rs 0.60 per kg and to Rs 36.60 per kg in Delhi on April 1,” he said. Also, the company offers a discount of Rs 1.5 per kg if refuling is done during odd-hours – midnight to 5 am starting this January. “While during winter months the odd-hour refueling was less, we expect this to pick up during summer,” he said. Out of the 1026 CNG stations currently in operation in the country, about 34 per cent are located in Delhi and adjoining NCR towns. “We have increased installed capacity to dispense CNG from 69 lakh kg per day to 72 lakh kg per day,” he added.
Centre agrees to four-laning of highway Itanagar to Banderdewa project
The Centre has agreed to sanction the four-laning of Itanagar to Banderdewa highway project and three fly-overs here as proposed by the Chief Minister Kalikho Pul, a union government official said. V K Rajawat, Chief Engineer associated with the Union Ministry of Road Transport & Highways, made this statement during his meeting with the chief minister here yesterday, an official release said. Rajawat was on a one-day visit to the state capital to inspect the ongoing repairing and maintenance work of Itanagar to Banderdewa road and nearby areas. The project would be sanctioned within one month time as and when the DPR would be received from the state government and work could start from September next, he said. He also said that considering the strategic locations and sensitiveness of the border state, the Centre had handed over two important border roads from Joram to Koloriang and Dimwe to Hawai to Border Road Organizations (BRO) at the request of the chief minister.
PAC wants PPP projects under CAG, to sound out audit watchdog
The Public Accounts Committee strongly favours empowering the Comptroller and Auditor General to examine investment, expenditure and profit aspects in public-private partnership (PPP) projects and has decided to call the full CAG before it soon to discuss how to technically empower the audit watchdog in this regard. The move is significant as it comes in the backdrop of corruption allegations in various PPP projects in the past. The private sector has so far been resisting the move but the committee’s argument is that since public money is being spent even in PPP projects, it needs to be safeguarded. The PAC headed by Congress leader K V Thomas has decided to call a meeting of the full CAG, most likely this month, after which it will also be calling representatives from ministries. “The stand of private parties is that the CAG has no business to look into their transactions. PAC, however, strongly feels that wherever the government money is involved, the CAG indeed has a role to play. Since government money is also involved in PPP projects, the entire transaction has to be examined by the CAG,” a PAC member told PTI on the condition of anonymity. The issue was vigorously debated at a recent meeting of the PAC. Under the PPP mode, the project is implemented based on a contract or concession agreement between a government or statutory entity on the one side and a private sector company on the other side for delivering an infrastructure service on payment of user charges. PAC’s view that the CAG should also start examining public-private partnership (PPP) projects is not a new one. Former PAC Chairman Murli Manohar Joshi, a veteran BJP leader, had earlier also said that the CAG hould be given powers to look into the functioning of PPP projects, societies and NGOs. His argument was that every single paisa going through the budget should be looked into by the CAG. The PAC headed by Thomas has now decided to discuss in detail the manner in which the CAG can examine transactions in PPP projects and how the CAG can be technically assisted to do so. “We are keen that a mechanism is put in place whereby the CAG gets the needed the technical assistance to examine the PPP projects. We believe that the CAG should look into the entire gamut of of PPP projects–investment, expenditure and profit,” said the member. The member said that one argument from the private sector is that the CAG can at best only look into the profit part. “They also argue that only the ministry can look into the PPP projects and not the CAG. There is also a view that the move to involve CAG into the scrutiny of PPP projects will discourage foreign investment. That is why we have decided to call a full CAG meeting to discuss all these aspects,” the source said. In a report presented in the Lok Sabha in 2014, the CAG had made a case for comprehensive audit of public-private partnership projects by it. The auditor wanted the government to insert relevant clauses in PPP contracts for this purpose. The report had maintained that under PPP projects, private players use assets or funds held by the government and render services within a pre-set revenue-sharing agreement and hence a comprehensive audit was necessary in order to ascertain the project’s performance in delivery of services and its adherence to contractual obligations. The same year, the CAG had made some adverse comments about PPP projects in some key infrastructure sectors including the Mumbai airport and several railways projects. In 2011 earlier, the then Planning Commission had, however, voiced reservations against CAG scrutiny on the role of private sector players implementing the Public Private Partnership (PPP) projects. A bill seeking to expand the scope the Comptroller and Auditor General of India to scrutinise PPP projects besides regulators, including SEBI, TRAI and IRDA, was also under the consideration of the Finance Ministry then. The bill sought to replace the CAG Act, 1971 and expand its scope. However, it could not take off.
Competition Appellate Tribunal sets aside CCI penalty on the airline: SpiceJet
SpiceJetBSE -1.20 % today said Competition Appellate Tribunal has set aside CCI’s order imposing a penalty against it in the case of alleged cartelisation in relation to cargo fuel surcharge. The tribunal, on April 18, set aside the Rs 258 crore fine on Jet Airways, IndiGo and SpiceJet and directed the regulator to pass a fresh order. In November, Competition Commission of India (CCI) had penalised the carriers for alleged cartelisation in fixing fuel surcharge on air cargo. SpiceJet was slapped with a fine of Rs 42.48 crore. In a filing to BSE, SpiceJet said the tribunal has set aside CCI’s impunged order and that the matter has been remanded back to the regulator. The tribunal has asked CCI to reconsider the joint Director General’s report and then take appropriate decision, the filing noted. CCI’s order last year came after its investigation arm Director General ( DG) conducted a detailed inquiry. “In the event the CCI disagrees with the findings and conclusions recorded by the JDG, then the CCI shall indicate the reasons for such disagreement and issue notice to the parties incorporating the reasons of disagreement and give them opportunity to file their replies/ objections and thereafter to pass appropriate order in accordance with law,” filing said quoting Compat order.
Looking to develop retail assets at Delhi airport land: GMR
GMR Infrastructure today said its subsidiary DIAL has shortlisted players for submitting financial bids in order to develop retail assets on nearly 23 acres of land at the Delhi airport. Delhi International Airport (Pvt) Ltd (DIAL), a joint venture where GMR group is the majority stakeholder, is operating the airport in the national capital. Other stakeholders are Airports Authority of India and Germany’s Fraport. In a regulatory filing, GMR Infrastructure said DIAL has initiated a two-stage international competitive bidding process for “development of retail assets on approximately 23 acres of land at the Delhi airport”. The Request for Qualification (RFQ), the first stage of the bidding process, was initiated on November 5, 2015. Applications from entities with relevant experience and financial capacity were sought. “The second stage of the bidding process was initiated on April 6, 2016, whereby the RFP documents have been shared with the shortlisted players inviting them to submit their financial proposals,” the filing said. Sources said as many as five leading realty players, including DLF, have been shortlisted for submitting the financial bids. The proposal is for developing retail complex of over two million sq feet at the land available with DIAL, they added. According to them, in the financial bids, the shortlisted players need to provide details about the upfront payment as well as the revenue sharing formula. Currently, GMR holds 64 per cent in the airport venture while Fraport has 10 per cent and the remaining 26 per cent shareholding is with AAI. The GMR-led consortium was awarded the concession to operate, manage and develop the Indira Gandhi International Airport here in January 2006. It inked the Operations, Management and Development Agreement (OMDA) in April, 2006. DIAL is a special purpose vehicle formed to carry out development, operation and management of the Delhi airport.
Civil Aviation Ministry suggests shifting from airport-based security to aircraft-based security at smaller airports
The civil aviation ministry has suggested a shift from airport-based security to aircraft-based security at smaller airports to minimise cost of flying on regional routes, an idea that has not found favour with experts. The suggestion, which marks the first time the government has thought of economising on security in aviation sector, is part of the new aviation policy that was sent for interministerial consultation earlier this month. “The sole intent is to keep the cost of flying low for regional flights, where we plan to fix fares at Rs 2,500 per hour, and is part of the policy,” said an aviation ministry official, requesting not to be named. The official said the plan is to make security aircraft-based or flight-based at the small airports. “Under the plan, the airport will be sanitised about two hours before the flight is to arrive and the security will move out of the airport about one hour after the flight departs. Otherwise, the airport will not be used and will have minimal security,” he said. This will help keep the cost low, he said. Analysts, however, slammed the idea on the grounds that aviation security cannot discriminate on the size of the aircraft or airport. “The risk of a hijack is the same for a big and small aircraft. Aviation security cannot be lax at airports that are small or have regional flights,” said Shakti Lumba, former head of operations at Air India and IndiGo. The ideas, if implemented, will lead to further problems, Lumba said. “What if the flight is delayed or an aircraft is grounded at an airport that does not have security. It simply cannot work like the way it has been suggested only because the government wants to keep the cost low,” he said. According to the National Civil Aviation Policy 2016, which is likely to be taken up by the Cabinet by the end of this month, the ministry intends to roll out regional flights at 30 airports which have the infrastructure in place. The government has decided to subsidise airlines for their cost of flying passengers beyond the fixed tariff of Rs 2,500 per hour. The policy proposes to charge Rs 8,000 per landing or take off on domestic flights by planes with 80 or more seats to fund the subsidy for regional flights. This levy will help generate an estimated Rs 500 crore annually. Apart from the subsidy, the government plans to offer concessions such as a flat 2% excise duty on fuel at regional airports for three years and 1.4% service tax on regional flights for one year. Excise duty on aviation fuel is 14% at present, while airlines have to pay a 5.6% service tax on tickets.
Online marketplaces depending on algorithms to crunch data on customer behaviour
By the end of this year, m -commerce-to-wallet company Paytm will have all its category pages made by machines. Paytm wants to respond to each customer who visits its website looking for fashion wear or sports gear or iPhone covers in a personalised way. The website will offer customer choices based on past usage and social media posts. For example, if you recently went to Goa on a holiday and posted photos of the trip on Facebook, you might get ‘beach-themed’ iPhone covers. The idea is to hook customers with what they prefer. Given that the choice of iPhone covers run into several hundreds, a customer visiting an online marketplace might not have the patience to browse through all the pages and options. But by throwing up just what he desires, the website might be able to coax him into buying. Online marketplaces like Paytm call this conversion rates the number of visitors who end up buying stuff. Helping them bump up conversion rates are algorithms. Algorithms are responsible for customers browsing for goods being greeted with shopping recommendations. Algorithms decide what to display for online marketplaces. They keep track of what customer are browsing and buying. “The goal is to improve conversion rates and help the industry become profitable,” says Vijay Shekhar Sharma, founder, Paytm. How does it work? Internet merchants are swamped with mind-boggling flow of data for example, Paytm has about 30 lakh visitors every day with about 3 million page views daily. Algorithms help it crunch data on customer preferences and increase sales. “Algorithms are the base for everything online shopping, shipping, packaging, payments, price points etc,” says Sandeep Aggarwal, founder, Shopclues. com, an e-commerce marketplace. The importance of algorithms becomes stark looking at the current online marketplace conversion rates. It is at less than 3% compared with that of offline retail at 22-25%. Algorithms will also underpin the future of ecommerce companies. There was a time when these companies could live with that poor statistic. Not anymore. They are stacking up $150-200 million in losses every month, throwing good money at customer acquisitions and deep discounts. Profitability was not a priority. But now they face a funding squeeze and pressure from investors to show profits. Pragya Singh, vice-president, retail, Technopak a retail consultancy, says the focus until now was on topline growth. “In the last few months it’s about how to come out of deep discounting and show profits.” Flipkart has been downgraded twice in the last four months by investors Morgan Stanley and T Rowe Price. In March, the Department of Industrial Promotion and Policy, the nodal agency for investments, while allowing 100% FDI in pure marketplaces banned deep discounts, predatory pricing and ‘big billion sales’. With no room for manoeuvring prices to attract buyers, the route to achieve better conversion and reduce losses is big data analysis and algorithms. Praveen Bhadada, partner and practice head, Zinnov, a Bengaluru-based management consulting firm, sees the reliance on algorithms as the second wave of ecommerce in India. “The first wave was about getting the model right, getting people used to the idea of shopping online. Now, a sizeable customer base is there (about 55-60 million internet users shop online) and in the second wave companies are using algorithms to improve profitability,” says Bhadada. Data as a Weapon: At any given time, there are 3 to 4 million visitors online. They spend an average of seven minutes viewing 8-10 pages. By the end of the day, about 15 million records are generated. ComScore data for February for all etailers shows 52.98 million unique visitors, 4.42 billion page views and about 55 minutes a visitor a month. The minutes spent on e-shopping leave a trail and clues that companies want to dive into. What was the shopper looking for? What are his previous purchases? What device did he use? How many times has he visited the website? “We have to use this basic data what did a person do for strategic advantage. So, if a user has not logged in for 3-4 days the listing might be stale and the algorithm refreshes it. If a customer does a lot of cancellations, the cash on delivery option for him is automatically disabled (the customer might be doing it just for fun),” says Aggarwal. Generating traffic is not the problem for etailers. Getting customers to buy is. “We are super ambitious about using data to help a person find what he is looking for. This will increase conversion rate and improve profitability,” says Rajiv Mangla, CTO, Snapdeal. “We want to detect patterns in user behaviour to improve conversion.” A number of companies are already using algorithms to improve conversion rates. Ugam Solutions is a Bengaluru based data analytics company whose clients include leading ecommerce platforms such as eBay, LG and Staples. The company analyses data for clients and offers signalswhat inventory to carry, what models are trending, what are users searching for and what competition is carrying. Say a marketplace wants to dominate luxury watches segment, should it carry the whole inventory from Rolex to Rado or focus on brands like Breitling or Chopard which have the more likelihood of sales. Mihir Kittur, co-founder & CEO, Ugam Solutions, says India is a growth market where the belt has tightened. To be sure, companies are looking at data with renewed interest. Saurabh Vashishtha, vice-president Paytm says his company “stores everything”. “There’s a huge push to dynamic content from static a year back.” So if six months back all visitors saw the similar content on each category page, now Paytm has a better idea and displays content based on what the algorithm picks up. Deepali Tamhane, senior director, product management, Flipkart, says the company is working towards achieving the next level of personalisation. “We want to provide our users with what they want, even before they know they want it, of course with their consent to use their data.” Finding the Sweet Spot: Adds Bhadada, “in the small window the user
Madhya Pradesh FDA gets ‘retailer friendly’
At a time when food safety is becoming a household concern, Madhya Pradesh Food and Drugs Administration (MP-FDA) is lowering its guard. A new food sample collection policy aims to ‘avoid harassment of retailers/producers’ and ‘follow standards as in developed countries’, according to an MPFDA official. As a result, food adulterators are now more unlikely to get penalised. “Food Safety and Standards Authority of India (FSSAI) Act is based on concept of allowing offenders a chance to reform. It would avoid undue harassment of businesses and inspectors will not collect samples without written permission,” said MP-FDA joint director Pramod Shukla. The agency’s preparedness was exposed last year. During a national-wide sample collection called for by FSSAI following the Maggie controversy, MPFDA was the body that could not send test reports twice in stipulated time. “You have to think from the perspective of a retailer or businessman. A customer will not return if he or she finds the product unsuitable,” said Shukla. In 2015, MP-FDA collected estimated 20,000 samples and only 9 samples were found unsafe for human consumption. Now two out of every three samples collected by FDA inspectors to determine food safety of product will not be liable to legal prosecution and only collected for surveillance. Making sample collection even more difficult, the FDA has further tied the hands of the inspectors. Now, FDA inspectors cannot collect a sample without prior written permission from designate officer – the district chief medical and health officer (CMHO). “New provision will save the energy of our staff and reduce pressure on our laboratories,” he said. The target for each inspector is now to collect four legal samples a month and eight surveillance samples. The decision comes after a meeting of FDA officials in Delhi.