POLITICS, P7 COMPANIES, P4 BACK PAGE, P14 Kejriwal resigns, Atishi to be new CM of Delhi Green energy EPC firms eye new-age projects Instagram introduces big changes for teen users BENGALURU, WEDNESDAY, SEPTEMBER 18, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVII 127, 14 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 83,079.66 ▲ 90.88 NIFTY: 25,418.55 ▲ 34.80 NIKKEI 225: 36,203.22 ▼ 378.54 HANG SENG: 17,660.02 ▲ 237.90 `/$: 83.76 ▲ 0.13 `/€: 93.30 ▲ 0.03 BRENT: $73.28 ▲ $0.53 GOLD: `72,947 ▼ `320 NPS Vatsalya: For tomorrow’s adults As the contributions will start early, it will ensure a bigger corpus on retirement ■ EXPLAINER, P9 from$9.5billion.ImportsinAuguststood at $64.36 billion, up 3.3% on year on a weak base (0.7%). One reason for the fall in exports of petroleum products is the subdued crude oil prices. Gold imports in August were $10 bil- lion,morethandoublethelevelof$4.9billion in the year ago period.A surge in gold imports is explained partially by 30% annual increase in global prices of theyellow metal in August. Continued on Page 7 NFRA moots changes to group audit norms Draft norms issued to improve quality WPI inflation at four-month low of 1.31% in Aug QUALITY IN FOCUS PRIYANSH VERMA New Delhi, September 17 ■ The key theme of the revised guidelines is that the group auditor would be responsible for keeping a check on the quality of auditing FE BUREAU New Delhi, September 17 THE NATIONAL FINANCIAL Reporting Authority has issued a draft of the revised Standards on Auditing 600 (SA 600), and sought public comments on it, as the agency aims to improve the quality of group audits in the country, which is “severely deficient”as of now. The key theme of the revised guidelines is that the group auditor would be responsible for keeping a check on the quality of the auditing process, which is being carried out by other auditors for group entities. The SA 600, as it exists today, does not permit review of work papers of component auditors by the principal auditor, the NFRA mentioned. In several cases of Public Interest Entities (PIEs), NFRA has observed severe deficiencies and lack of understanding on the part of the audit firms and auditors of their responsibilities in law, and improper application of the standards by the principal and other auditors.“This has resulted in gross negligence and serious lack of due diligence by the auditors which is detrimental to the interests of the stakeholders in PIEs,” the agency said. INDIA’SWHOLESALE PRICE Index(WPI)based inflation fell to a four-month low of 1.31% in August from 2.04% in July, due to decline in pricesof food items and manufactured products, official data released on Tuesday showed. The WPI food inflation eased to a 10monthlowof 3.26%inAugust,asprices of vegetables–mainlytomatoes – milk,eggs, meat & fish declined. Tomatoes inflation during August came in at (-)52.6%. Economists say that the base effects, which pulled both WPI and Consumer Price Index-based inflation lower in JulyAugust,are set to reverse,with September print likely to show faster price increases y-o-y.“Given the slight acceleration in the August CPI inflation, we think the RBI is likely to remain on a cautious hold at the October meeting and assess the impact of the monsoon on food prices, before considering monetary easing,”Barclays said. Wholesale inflation of manufactured products stood at a three-month low of 1.22% in August. Continued on Page 7 Continued on Page 7 ■ In several cases ■ The guidelines say that the group auditor shall request and the component auditor shall communicate its findings ofPublic Interest Entities, NFRA has observed deficiencies and lack of understanding Vi,AWS suspend services to Byju’s FE BUREAU Bengaluru, September 17 TROUBLES ARE MOUNTING for edtech firm Byju's, which is undergoing the insolvency proceedings. Amazon Web Services (AWS) and Vodafone Idea have suspended services to the company because of unpaid dues. While AWS was providing cloud services, Vodafone Idea was the sole mobile services provider to the firm. The suspension has reportedly led to frequent crashes of Byju's mobile app and inaccessibility to its common contact number since early this month. While its website remains operational, server-related issues have become increasingly common. Internal sources UNDPAID DUES indicated that work at the firm has come to a standstill. While many employees have left,others are actively seeking new opportunities. When contacted, Byju's has denied the suspension of services,stating that its app and website remain fully operational. The company said it has moved databases to Google Cloud. Vodafone Idea and AWS could not be reached for comments. This isn't the first time Byju's has faced issues with vendor payments. In August last year, its employees had temporarily lost access to data management tools such as Salesforce, Tableau and ToolJet. ■ AWS was providing cloud services while Vi was the sole mobile network service provider to Byju's ■ Byju's denied ■ The suspension has reportedly led to frequent crashes ofByju's mobile app Continued on Page 10 the suspension of services, stating that its app and website remain fully operational ■ The company said it has moved its databases to Google Cloud INAN UNPRECEDENTED move,BSEonTuesday deferred the listing of Trafiksol ITS Technologies on its SME platform at the last minute citing certain unresolved queries.The decision to defer the listing was taken after a nudge from the Securities and Exchange Board of India (Sebi) about concerns over the use of IPO proceeds and the company's fundamentals,a source said. Thedevelopmenthitthesentimentsinthe SME market, leading to an over 2% drop in the BSE SME IPO index. Apart from this, the grey market premium of Trafiksol ITS fell from `63 on Monday to zero after the BSE notice. Trafiksol ITS Solutions had filed prospectus with the BSE to raise `44.87 crore. The company received stellar response for the issue as it got subscriptions worth over 432 times the issue size (approximately `19,380 crore of bids).The funds raised from the issue shall be kept in an escrow account until the complaint is resolved satisfactorily. "This is in continuation to the Notice No20240916-68 dated Monday,September16, 2024 of TRAFIKSOL ITS TECHNOLOGIES LIMITED Scrip Code (544255) it is hereby notified that in view of certain queries that GREYAREA ■ The development hit the sentiments in the SME market, leading to an over 2% drop in the BSE SME IPO index Trafiksol ITS Solutions had filed prospectus with the BSE to raise `44.87 cr ■ The company received stellar response for the issue as it got subscriptions worth over 432 times the issue size ■ The funds raised from the issue shall be kept in an escrow account until the complaint is resolved satisfactorily have been raised,the listing fortrading of the scrip is postponed till queries are resolved by the issuer,"BSE stated in its circular. The source added that Sebiwill nowtake a decision on whether the listing will happen, and when it will happen. Continued on Page 7 LenovoexpandsIndiaplay, tonowmakeAIserverstoo PADMINI DHRUVARAJ Bengaluru, September 17 CHINESE IT HARDWARE manufacturer LenovohasuppeditsIndiamanufacturingplay. The company,which has been selected in the `17,000-crore IT production-linked incentive scheme has now decided to start manufacturing 50,000 graphics processing units-basedAI servers in Indianextyear. LenovoIndiamanagingdirectorShailendra Katiyal said on Tuesday that the company will makeserverslocallyandalsoexportthemfrom its manufacturing unit in Puducherry. Over 60%oftheproducewillbeforexportacrossthe Asia-Pacific region. The company is also setting up its fourthlargest research and development centre in India,accordingtoLenovoIndia,infrastructure group,managingdirector,AmitLuthra.Hesaid that the Bangalore R&D centre will contribute toallfivekeystagesofaproductlifecyclestartingfromsystemdesign,firmwareandsoftware development,product assurance,security and testing elements. Analysts see these initiatives as a strategic pushbythecompanytoenhanceitstechnological footprint in India, aligning with the government's Made in IndiaandAI forallvision. Lenovo,withaglobalrevenueof$57billion, has been generating around $2-3 billion in Indiaoverthelastcoupleofyears.Thecompany, initially known for its personal computers and desktops,has been diversifying and now 47% of its revenue is coming from non-PC businesses,with over 60 AI solutions, 80 AI platforms and around 165 enterprise-grade AI solutions supported by over 400 employees skilledinAI. The new R&D lab in Bengaluru enhances Lenovo'sglobalnetworkof18existinglabsand STRATEGIC SHIFT ■ The company's Puducherry facility has expanded to produce enterprise AI and GPU servers tailored for AI workloads The initiatives are a strategic push by Lenovo to enhance its technological footprint in India ■ SHAILENDRA KATYAL, MD, LENOVO INDIA WITH TODAY’S ANNOUNCEMENT, WE COMPLETE LENOVO’S POCKET-TOCLOUD TECH ‘MADE IN INDIA’ FOR THE WORLD is one of the four key global labs focused on infrastructure solutions, alongside centres in Morrisville,Beijing andTaipei. The lab will also be used in system design, development and testing of next-generation serverplatforms,includinghardware,firmware andsoftwaredevelopment.TheBengalurulabis also equipped with advanced tools for electrical, design/testing, power characterisation, thermalanalysis and compliance testing. Further, the company said all future mainstream server design, developments, and new technical initiatives will be conducted at this lab. OVER THE DECADE TO FY24, AGRI EXPORTS HARDLY GREW WHILE IMPORTS DOUBLED Consumer bias takes a heavy toll on farm exports SAIKAT NEOGI & SANDIP DAS New Delhi, September 17 INDIA'S AGRICULTURAL OUTPUT, spanning across food grains, horticulture and livestock, has risen steadily over the past decade but a surge in domestic food consumption has not only kept exports of these products subdued but also caused a big jump in imports, according to official data. The primary driver of the imports is edible oil, but inward shipments of pulses remained high too, even though in a more erratic manner (see chart). India's trade surplus in“agriculture and allied products” has been tapering in recent years – in FY24, thesurpluswasjust$15.4billion,as AGRICULTURE & ALLIED PRODUCTS ($ billion) Imports Exports 27.2 Exports ($ billion) Trade balance 48.2 ■ BRANDWAGON, P9 Aug 2024 32.8 CEO of Pepperfry talks about the rapid changes in the furniture industry Aug 2023 52.5 ‘We need more Ikeas to help organise market’ -9.3 0.7 35.5 FE S P E C I A L S -15 Import Imports Imports 49.7 THE LABOUR MINISTRY is all set to seek approval from the Union Cabinet shortly for the execution of the three employment-linked incentive (ELI) schemes, which were announced in the July Budget, labour minister Mansukh Mandaviya told reporters on Tuesday, reports Priyansh Verma. ■ PAGE 3 -10 32.3 LABOUR MINISTRY TO SEEK NOD FOR NEWJOB SCHEMES Exports -5 41.3 WORKERS AT SAMSUNG India’s Chennai manufacturing plant are set to escalate their protests, including exploring legal options to secure union recognition and better working conditions, as the strike entered its ninth day, reports Narayanan V. ■ PAGE 5 ($ billion) VIVEK KUMAR M Mumbai, September 17 21.5 WORKERS SETTO INTENSIFY PROTEST AGAINST SAMSUNG INDIA’S MERCHANDISE TRADE deficit jumped to its highest in 10 months to $29.6 billion in August as exports shrank byasteep 9.3% onyear.Thecontractionin export shipments was the sharpest in any month since July 2023, when the slump was 10%. In August last year, goods exports had grown 3.5%. Exports dropped to $34.71 billion in August this year, from $38.28 billion in theyearago month.The drop of $ 3.57 billion in overall exports on an annual basis can be entirely attributed a 37% fall in value of petroleum exports to $ 5.9 billion 35.2 BAJAJ HOUSING FINANCE sees competition in the housing market easing as larger banks retreat from retail segments and switch focus to corporate credit, where demand is picking up, reports Bloomberg. Bajaj Housing, which manages assets of about `970 billion, has been focused on seven or eight key markets. ■ PAGE 6 Trafiksol’s GMP falls to zero, SME IPO index down 2% Aug 2024 0 21.8 BAJAJ HOUSING FIN SEES EASING OF COMPETITION 29.65 Trade deficit 3.5 38.7 THE CONGRESS ON Tuesday said the answers being provided by Sebi chairperson Madhabi Puri Buch and her husband Dhaval Buch raise even more questions, reports Akshata Gorde. The Congress has made a series of accusations against the Sebi chief and her husband since Hindenburg Research’s initial allegations. ■ PAGE 6 5 MUKESH JAGOTA New Delhi, September 17 20.8 CONGRESS: BUCH'S ANSWERS RAISE MORE QUESTIONS Exports plunge 9.3%, 24.3 IN THE NEGATIVE ZONE Aug 2023 imports growth comes 15 (% chg, y-o-y) in at 3.3% on weak base 10 3.3 24.8 UNION HOME MINISTER Amit Shah said on Tuesday that the government will "very soon" make an announcement for carrying out the census in the country, reports PTI. India has conducted the census every 10 years since 1881. ■ PAGE 7 32.5 22.5 33.3 25.6 38.4 ANNOUNCEMENT ON CENSUS VERY SOON: AMIT SHAH Trade deficit widens to 10-month high in Aug 43 NEWS Minutes before debut, BSE stops SME listing after Sebi nudge $29.6-BILLION GAP HIGHEST SINCE JULY 2023 15.8 38.7 21.1 IN THE 15.4 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Data includes marine products Source: Economic Outlook against $27.2 billion in FY14. Earnings from export of farm items were only marginally higher at $48.2 billion in FY24 compared to $43 billion in FY14. On an infla- 10 4.5 8 5.1 Marine products 6 Meat 4 Cotton 2 0 Imports ($ billion) 7.4 tion-adjusted basis, this is barely any growth. On the contrary, imports more than doubled from $16 billion in FY14 to to $33 billion in FY24. 14.9 20 3.8 15 7.3 Edible oil 10 1.1 3.7 FY14 25 5 2.1 3.8 Pulses 0 FY24 FY14 FY24 The items whose exports were still growing at a healthy rate were rice, marine products and spices, whereas frequent policy interventions in trade constricted the growth of rice exports. Whilewhitericeexportsarenow banned and there is a 20% export on parboiledvariety,exports of basmati rice were restricted by a minimum export price until recently. Simultaneously, edible oil imports had been boosted with reduced import tariffs since late 2022 (last week, these tariffs were raised,to slightly twist the terms of trade in favour of farmers). Experts attribute the reduced trade surplus to a “consumer bias” intradepolicies.“Immediatelyafter Prime Minister Narendra Modi formed the government in 2014, there were back-to-back droughts in 2014-15 and 2015-16. So, imports had to increase to keep food prices under control.But later on,in 2022-23 and 2023-24,when global prices were high and rising, thegovernmentputexportcontrols on wheat, rice, sugar, and even onions,”Ashok Gulati, agricultural economist and formerchairman of Commission for Agricultural Costs and Prices said. Gulati said this and the lower import duties on edible oils and pulsesthatprevailedforlong“clearly shows consumer bias in agri-food policies, including imports-exports of agriculture produce”. While exports of farm items contracted 8.2% on year in FY24, imports shrank 7.6%. However, in FY23 and FY22, while exports had risen by 5.6% and 20% respectively, imports grew at 10% and 50%. Continued on Page 7 BENGALURU