Finance Minister asks public sector firms to front-load investment for the second half of current fiscal
Capex needs to be given a vigorous push in the next two quarters, says Nirmala Sitharaman. Sandeep Saxena
The government on Saturday set October 15 as the deadline for central public sector units to clear overdue payments to vendors and exhorted them to front-load capital expenditure, as it looks to lift economic growth from a six-year low.
Finance Minister Nirmala Sitharaman, who reviewed capital spending programmes with heads of 32 Maharatna and Navratna Central Public Sector Enterprises (CPSEs), said the state-owned companies have been asked to front-load investment for the second half of the current fiscal.
CPSEs have been asked to submit a road map for the next four quarters by October 15, she said after the meeting. “It was decided that all pending dues to be cleared by October 15 and by October 15, they will have a portal through which all dealers and contractors shall start monitoring their payment,” Ms. Sitharaman said.
“Meeting [will be held] with the RBI and the Finance Secretary and select number of CPSEs to talk about why bank guarantees are becoming a big hitch or hurdle in government paying up the 75% post arbitration awards. If that is the case, then I will seek RBI’s help,” she said.
Also, the CPSEs have been asked to detail the lifespan of arbitrations that lock payments after disputes with vendors and contractors, she said.
‘Spurs investment cycle’
The Minister stressed that capital expenditure (capex) needed to be given a vigorous push in the next two quarters. CPSEs must ensure that regular payments are cleared expeditiously as it spurs the investment cycle, and must establish the e-billing portal for enabling stakeholders to track the status of payments, she said.
She added that special efforts must be made to clear dues of MSMEs and resolve cases on the SAMADHAN portal of the Department of MSME.
Finance Secretary Rajiv Kumar said that 34 central PSUs have already spent ₹48,077 crore till August, and have detailed spending of another ₹50,159 crore till December 2019. An additional ₹54,700 crore would be spent in the January-March quarter.
The expenditure plan is on track and companies have expressed their willingness to meet the target set for the current fiscal, he said.
Expenditure Secretary Girish Chandra Murmu said the capex of all the 244-odd PSUs would be about ₹4 lakh crore for the current fiscal.
‘Standardise definition of fraud, abuse’
A sub-group on fraud control in health insurance, forming part of the joint working group of National Health Authority and the Insurance Regulatory and Development Authority of India (IRDAI) has advocated a strong law to act as a deterrent.
A strong legislation — National Health Insurance Anti-Fraud Act — is “required to effectively to deal with the whole gamut of activities for preventing, detecting and deterring fraud.” This would benefit the entire ecosystem, including private paid health insurance, the sub-group’s report said.
Anti-fraud task force
Suggesting that such a law should provide for setting up of a special anti-fraud task force to take punitive action, carry out recoveries, searches and seizures, the report said joint collective measures by all payers would have great impact on fraudulent practices of providers “which are the major players for fraud.”
While IRDAI is the regulator for the insurance sector, the National Health Authority (NHA) is the nodal agency for implementing the Pradhan Mantri Jan Aroygya Yojana (PMJAY) or Ayushman Bharat as the healthcare scheme is known.
In the set of recommendations and measures for collaboration, the sub-group said the definition of fraud and abuse should be standardised.
Also, the contracts entered into by a payer — with policy holder, empanelled hospitals, intermediary, employee — should mandatorily incorporate a standard definition of fraud, clauses, and the resulting punitive action that those indulging in them could face.
The report also emphasised the need for creation of a common talent pool for effective investigation and a certification programme for ensuring minimum standards.
The impact of healthcare fraud is not only financial but also on the people’s health, and was an issue of “grave concern.
As the coverage/penetration of health insurance expands to more people, for more services, the element of fraud and abuse will also go up exponentially if handled inadequately,” the report said.
With the launch of Ayushman Bharat, the number of people covered under health insurance – private paid, organised through insurance companies under the aegsis of IRDAI or government funded, organised by State governments, now stands at 65 crore, including 15 crore under private paid insurance and 50 crore under PMJAY.
Action due to ‘high level of bad loans, lack of sufficient capital to manage risks’
Dark clouds: The move may cast doubts over the proposed merger of Indiabulls Housing Finance with LVB. Bijoy Ghosh
The Reserve Bank has initiated Prompt Corrective Action (PCA) against Lakshmi Vilas Bank (LVB) due to a high level of bad loans, lack of sufficient capital to manage risks, and negative return on assets for two consecutive years, the private sector lender said on Saturday.
The RBI move comes at a time when the Delhi Police Economic Offences Wing has registered a complaint against the board of LVB alleging cheating and misappropriation of funds.
The regulatory action may cast doubts over the proposed merger of Indiabulls Housing Finance with LVB, which is awaiting RBI nod.
The Delhi High Court on Friday agreed to hear a petition alleging that Indiabulls had given loans worth crores of rupees to shell companies. In a regulatory filing, LVB said RBI had taken the action “on account of high net NPAs, insufficient Capital to Risk (weighted) Assets Ratio (CRAR) and Common Equity Tier 1 (CET 1), negative return on assets for two consecutive years and high leverage.”
PCA was initiated after an on-site inspection, under the risk-based supervision, was carried out for the year ended March 31, 2019.
“RBI has also advised the bank on the restrictions put in place and the actions to be taken by the bank, which the bank has taken note of for necessary compliance, with progress to be reported on a monthly basis to RBI,” it added.
For FY19, the bank’s net NPA stood at 7.49%, capital adequacy ratio was at 7.72% and its return on assets was (-) 2.32%. It had reported a net loss of ₹894.10 crore for 2018-19.
PCA is aimed at improving the performance of the bank and will not have any adverse impact on the day-to-day operations, including acceptance/repayment of deposits in the normal course, LVB said.
E-tailer onboards 1.2 lakh new sellers, 90,000 additional delivery staff this year
Amazon India expects sales volumes from this year’s Great Indian Festival to go ‘much higher’ than what it sold a year ago.
Gopal Pillai, president, Seller Services, Amazon India, told The Hindu: “All indicators for this season look fantastic for us. In the last 12 weeks, we have not seen any deceleration in our sales and, in fact, our growth trajectory for India is quite intact.”
As a preparatory step, the e-tailer has on boarded 1.2 lakh new sellers on its platform, taking its seller population in the country to 5 lakh, from 3.8 lakh a year ago.
The company has also engaged additional delivery staff of 90,000 across the country. “We have reworked the delivery channels and the speed is going to be significantly better this year,” he said.
The e-commerce major will kick off a month-long online shopping extravaganza starting midnight of September 28-29, and the first wave of deals will be available until October 4. Amazon said it experienced an overwhelming response from the seller community. With new sellers onboarded, the marketplace has over 200 million items. The company has also expanded its warehousing facility to 26 million cubic feet. According to Mr. Pillai, Amazon’s India experience has been good so far. “Our loyalty programme, Amazon Prime, has received a 2x growth with millions of buyers coming to us.”
Rising sales volume
Commenting on the value the platform had been creating for the seller community, Mr. Gopal said in the last 12 months, sales volumes for 23,000 sellers had doubled, 18,000 sellers reported threefold growth, while 14,000 sellers posted fivefold growth after selling on the platform.
“As a result, our seller profile has also seen a dramatic change. This year, we already saw 15,000 millionaires and 3,500 crorepatis being born on Amazon India,” he added.
Amazon recently introduced three different seller cohorts such as Amazon Karigar, Amazon Saheli and Launchpad. Over 2,400 weavers and artisans as well as State co-operative bodies, who directly impact 8 lakh lives, will showcase over 55,000 products.
Saheli ‘empowers’ over 1 lakh women from underserved and underprivileged communities, while Launchpad offers opportunity to over 800 start-ups to showcase 8 lakh products.
Amazon’s Global Selling Programme has generated a cumulative Gross Merchandise Sales of $1 billion in the last four years, which is expected to grow to $5 billion by 2023, the e-commerce major said.
Wants details of insurance firm, premium clearly specified
Travel insurance policies sold through travel agencies, portals or offered under the group platform, need to specify the insurance company offering the cover, the premium collected towards the same, as well as the rate of applicable tax.
This is one of the many norms the Insurance Regulatory and Development Authority of India (IRDAI) has issued, presumably for greater disclosure by insurers and intermediaries, and towards better clarity for policyholders.
Besides this, the regulator has stipulated that in case of domestic travel, the premium should not be received more than 90 days in advance to the date of commencement of the risk covered or while purchasing the travel tickets, whichever is earlier.
Insurance covers towards overseas travel, however, can be issued at any time, IRDAI said in its circular on travel insurance products and operational matters to general and standalone health insurers.
‘No preselect option’
The regulator said insurers ought to ensure that the portal or app providing travel cover should not have a preselect option of buying the policy as a default option.
The prospective customer should be able to specifically choose whether or not to buy the cover. Further, an option to opt out or de-select before concluding the transaction needs to be provided.
Those buying a travel cover should be provided details such as the benefits, terms and conditions on the screen itself and give their consent in confirmation of having read and understood the terms and conditions.
The norms come into force with immediate effect. All group travel insurance arrangements not in compliance to the norms shall be terminated with effect from October 1, 2019, IRDAI said.