THURSDAY, 26 SEPTEMBER 2019 20 pages in 1 section www.business-standard.com MUMBAI (CITY) ~8.00 VOLUME XXIV NUMBER 31

THE MARKETS ON WEDNESDAY Chg# Sensex 38,593.5 503.6 Nifty 11,440.2 148.0 COMPANIES P3 COMPANIES P2 Nifty Futures* 11,522.0 81.8 Dollar ~71.0 ~71.0** Euro ~78.1 ~78.1** MAHINDRATO RESCUE SACHIN BANSALBUYS NBFCIN HIS Brentcrude ($/bbl)## 61.6## 62.0** Gold (10 gm)### ~37,954.0 ~200.0 FORD’S INDIA BUSINESS BIGGEST BET SINCE FLIPKART EXIT *(Oct.) Premium on Nifty Spot; **Previous close; # Over previous close; ## At 9 pm IST; ### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE SENSEX PLUNGES 504 POINTS AMID MCAnorms to shield PM rollsoutredcarpet PROFIT BOOKING forglobalinvestors The benchmark indices dropped 1.3 per cent on Monday, mirroring weakness in IBC bidders soon Flags democracy, demography, demand and decisiveness the global markets, after investors booked profits judging recent gains as excessive. Most global indices also traded weak as Move to prevent reopening of claims, protect acquired assets PRESS TRUST OF INDIA investors assessed the potential fallout of New York, 25 September an impeachment inquiry of US President RUCHIKA CHITRAVANSHI & ISHITAAYAN DUTT government makes it clear in its Donald Trump. The Sensex ended 504 New Delhi/Kolkata, 25 September EASING INSOLVENCY guidelines. Prime Minister (PM) Narendra points, or 1.3 per cent, lower at 38,594, The guidelines will be in keeping Modi on Wednesday pitched while the Nifty declined 148 points, or he government will soon PROCESS with the recent amendment to the India as 'the' investment desti- 1.3 per cent, to close at 11,440. 10 > come up with detailed |Corporate affairs ministry IBC that made a resolution plan bind- nation for global investors, say- guidelines for regulators has received ing upon all stakeholders, including ing reforms by his government T and tax authorities to pro- the central government, state gov- were just the beginning of a representations from ECONOMY&PUBLIC AFFAIRS P4 tect the winning bidders in ernments and local authorities, to long innings. Modi promised companies such as JSW Kristalina Georgieva to Insolvency and Bankruptcy Code whom a debt in respect of the pay- to personally act as a bridge for (IBC) cases against the reopening of Steel and Tata Steel ment of the dues may be owed. businesses and said India had a take overas IMF chief claims and threat to the assets regarding post-resolution IBC cases in sectors such as tele- government that respected cor- The International acquired by them. issues com, mining and real estate have porates and wealth creators. Monetary Fund (IMF) on The Ministry of Corporate Affairs |Ministry is also looking at faced hurdles when various gov- “India’s growth story has Wednesday formally (MCA) has received several repre- ernment departments insisted on four important factors that are the best course of action to selected Kristalina sentations from companies such as separate approval processes irre- rare to find anywhere else in Georgieva of Bulgaria to JSW Steel and Tata Steel regarding ensure the assets of spective of whatever is approved the world. These factors are be only the second issues that cropped up after the clo- companies under probe under the IBC. democracy, demography, woman ever to lead the sure of the IBC process. are not attached “One important point that demand, and decisiveness,” he Prime Minister Narendra Modi being presented the ‘Global 189-member The ministry is also looking at the |Recent IBC amendment appears to have been missed in this said. “Democracy together with Goalkeeper Award’ by Bill and Melinda Gates Foundation’s institution. The selection had been all best course of action to ensure the said a resolution plan will MOHANTY amendment is the binding nature of political stability, predictable co-founder Bill Gates for the Swachh Bharat Abhiyan, in but guaranteed after the global crisis assets of companies under probe are the approved resolution plans over policy and independent judi- New York on Wednesday PHOTO:PTI AJAY lender said earlier this month that not attached. be binding upon all judiciary across the country. If the ciary gives confidence of safety Georgieva, a former World Bank CEO, “Once a company has gone stakeholders, including approved resolution plan also could and security of investment and INDO-US TRADE DEAL start-ups with a huge market, was the sole candidate. through the IBC process, all claims central government, state have been made binding on judiciary of growth,” he said, speaking at FACES ICT HURDLE P4 come to India. If you want to

are extinguished. We will issue governments and local ILLUSTRATION: or other tribunals, then the incon- the Bloomberg Global Business invest in one of the world's authorities ECONOMY&PUBLIC AFFAIRS P16 comprehensive guidelines to make sistent view on how to deal with 'con- Forum here. “If you want to invest in a largest infrastructure ecosys- the intent of the law very clear,” a tingent liabilities' could have been The PM said his govern- market where there is scale, tem, come to India.” |Legal SBI prices home loans at senior government official told addressed,” Anshul Jain, partner- ment’s decision to slash corpo- come to India,” Modi said. “If India, he said, was waiting 265 bps overrepo rate Business Standard. However, con- experts advisory services, PwC, said. rate tax rates was a “big revolu- you want to invest in a market for global investors. “India is tradictory high court orders have and Suharsh Sinha, partner, AZB & tionary step” for investment, where the latest trends and fea- your only destination. I am The country’s largest lender, State Bank of made bidders jittery. companies Partners, pointed out that the latest and that the move had been tures are appreciated, come to waiting to welcome you,” he India, on Wednesday came out with its Union Finance Minister Nirmala believe more IBC amendment took care of tax lia- hailed by businesses as historic. India. If you want to invest in said. Turn to Page 19 > new repo-linked home loan scheme. The Sitharaman, in her address to clarity is bilities and, on the face of it, was bank said that it will charge a 265 basis Parliament during the Budget ses- required broad enough to include investiga- point (bp) spread over the RBI’s repo rate sion, had assured that no criminal tive agencies. But more clarity was on new home loans from October 1. proceedings would be taken up required to indemnify the corporate against the winning applicant, and debtor from criminal proceedings, PMCBank has enough assets to honour REPO RATE-BASED LOANS MAY that only the corporate debtor would he said. DELAY SBI’S PROFIT REVIVAL 10 > be held liable for such proceedings. Sources close to JSW said that if The MCA, if required, would seek Government authorities such as the corporate debtor got implicated, deposits, says RBI administrator the Cabinet’s nod to finalise proce- the Directorate General of Foreign then it would impact the resolution ECONOMY&PUBLIC AFFAIRS P4 dures it expects other government Trade and central boards of direct process and, in turn, the resolution Punjab and Maharashtra Co-Operative agencies to follow with respect to the and indirect taxes and customs are applicant. (PMC) Bank’s liquidityprofile is good No cashbacks on credit card enough and depositors should not to winning bidders, the official added. expected to fall in line once the Turn to Page 19 > payments at petrol pumps panic, said Reserve Bank of India-appointed On the advice of oil companies, banks administrator J B Bhoria on Wednesday. are going to discontinue the cashback Bhoria was appointed administrator of PMC feature they offered on their credit cards Bank on Monday evening. He is yet to finalise for fuel purchase. This comes into effect Extendingdebtinstrument the liquidity profile of the bank as the from October 1. “The 0.75 per cent inspection of its books continues. However, cashback on fuel transactions will be he said depositors should not panic. Even discontinued with effect from October the bank’s loans were secured against 1,” read a message from State Bank of maturityislikedefault:Sebi adequate assets. 6 > India to its customers. EDIT STRENGTHEN COOPERATIVE PERSONAL IT'S ALONG ROAD FOR PMC Essel Group announces these new norms when the maturi- PAGE 9 BANKS FINANCE PAGE 17 BANK'S DEPOSITORS IMPACT CHECK ties of debt instruments are extend- ECONOMY&PUBLIC AFFAIRS P6 MFs have granted it ed,” said a debt fund manager, EAC-PM shuffle: Sajjid more time to repay dues Papers deemed default requesting anonymity. warrant 75% The current norms require MFs Chinoy in, Rathin Roy out JASH KRIPLANI markdown on valuation to take a markdown of 75 per cent The Centre on Wednesday reconstituted Mumbai, 25 September on secured exposures that are the Economic Advisory Council to the This may Some MFs feel downgraded to default grade or ‘D’. Prime Minister (EAC-PM) for a period of Any extension given to a corporate impact MFs that giving “The regulator can decide to give two years. Rathin Roy from the National entity by extending the debt instru- holding Essel additional an exception to MFs in Essel’s Institute of Public Finance and Policy, ment’s maturity needs to be con- papers time will lead case as fund houses had along with Shamika Ravi of Brookings sidered a ‘default’ for the purpose of maturing in to better entered into discussions on Institution, were dropped as part-time valuation, according to the September recovery another extension with the members. Sajjid Chinoy, India economist Securities and Exchange Board of promoters before the circu- at JPMorgan, was appointed as India (Sebi). The norm was laid out Earlier, Essel promoters lar was issued by Sebi,” part-time member. in a circular issued on Tuesday cleared part of the loan- said another executive, night, a day before Essel Group against-shares dues also asking to remain announced that lenders had grant- unidentified. ed it more time to repay its dues. ESSEL PROMOTERS PLAN “MFs holding papers maturing ON Earlier, Sebi Chairman Ajay TO SELLNON-MEDIA ASSETS P16 beyond September 30 are unlikely Tyagi had stated that the regulator to get impacted by this move,” the THURSDAY didn’t acknowledge ‘standstill’ impact those fund houses that are fund manager added. SPECIAL agreements between mutual funds giving extensions to the Essel Group MF exposures to Essel Group STRATEGY: (MFs) and promoters. However, Sebi promoters and have exposure to firms are secured against the IBM’s leap of faith had not yet formally laid down debt papers that are maturing in pledged shares of the promoters as norms to govern such September. part of the loan-against-share (LAS) How Red Hat opens “new doors” for arrangements. “Valuation agencies will now be structures. IBM in India. NEHA ALAWADHI explains 18 > Sources say the move could required to give pricing in line with Turn to Page 19 > No roomtocuthomeprices,saydevelopers Recent reduction in corporation tax rates unlikely to be passed on to buyers

RAGHAVENDRA KAMATH COMPANIES PAGE 2 Mumbai, 25 September

Prospective homebuyers are unlikely Maruticutsprices to reap any benefit from the ofitsmodels corporation tax rate cut announced by Finance Minister (FM) Nirmala byupto~5,000 Sitharaman last Friday as developers The car market leader on are in moodnot to cut prices of Wednesday said it has cut apartments. prices by up to ~5,000. This They feel unit prices are already will boost demand in the pretty low. Sitharaman had reduced "WEDONOTKNOWWHETHER "PRICESAREALREADYDOWN festive season when most cars tax on corporate entities from 30 per ANYDECREASEINPRICESWILL ANDTHEYWILLREMAINSOAS are sold, it said. cent to effectively 25.7 per cent, in a The lower prices will be bid to boost the economy reeling BRINGBACKDEMAND" SUPPLYWILLGOUPAFTERTHE effective immediately on from a slowdown. REDUCTIONINTAXRATES" But property developers will not J CSHARMA, models such as Alto 800, Alto K10, Swift (diesel), Celerio, pass on any benefit to homebuyers in Vice chairman & MD, Sobha Ltd RAJEEV TALWAR,CEO, DLF the form of price cuts. Baleno (diesel), Ignis, Dzire “Prices are already low. They will (diesel), Tour S (diesel), Vitara remain low, as supply will go up after up since 2007 because of an were low because of market Brezza and S-Cross. Maruti the reduction in tax. Market forces oversupply and delay in completion dynamics. “Developers are has been offering benefits of will not allow prices to go up,” said of projects. “If the economy gets a absorbing all increasein costs of up to ~1 lakh since the Rajeev Talwar, chief executive at boost, it will help the real estate labour, raw materials and soon. We beginning of September. The DLF, the largest listed developer in sector as well,” Talwar said. do not know whether decreasein reduction will be over and the country. J C Sharma, vice-chairman at prices will bring back the demand,” above that. He added that prices had not gone Bengaluru-based Sobha, said prices he added. Turn to Page 19 > 2 COMPANIES MUMBAI | THURSDAY, 26 SEPTEMBER 2019 > State Bank of India > Morepen Laboratories > Container Corporation of India > Fine Organic Industries > Strides Pharma Science STOCKS Top loser in the Sebi bans the firm from Govt seeks Cabinet Top gainer in the USFDA examining levels of IN THE NEWS S&P BSE Sensex stocks accessing security market approval for stake sale S&P BSE-500 index N-Nitrosodimethylamine for a year in ranitidine

~280.15 CLOSE ~17.40 CLOSE ~599.65 CLOSE ~1,769.80 CLOSE ~331.70 CLOSE * OVER PREVIOUS CLOSE 7.37% DOWN* 20.00% DOWN*  3.17% UP* 9.82% UP* 4.53% DOWN* > .

IN BRIEF Ashish Kumar Guha NCLT asks Jet lenders SpiceJet eyes $10-bn appointed chairman to release lifeline Maruti cuts prices to of CG Power funds within 15 days deal with Airbus CG Power and Industrial The National Company Law Solutions on Wednesday said Tribunal (NCLT) on RICHARD CLOUGH & ANURAG KOTOKY An order of that scale could exceed that its board has appointed a Wednesday directed the boost festive demand New York/ New Delhi, 25 September $10 billion based on 2018 sticker non-executive independent financial creditors of the prices. Though official prices for the director Ashish Kumar Guha grounded Jet Airways to SpiceJet is weighing an order for at LR and XLR aren’t public, the two jets as its chairman. "Ashish release some interim lifeline THE MONEY TRAIL least 100 Airbus SE planes as Boeing are longer variants of the A321 family Kumar Guha, non-executive funds within 15 days. The grapples with the fallout over its of planes, the cheapest of which start independent director of the lenders had in-principle M- cap (~ trn) BSE price (~) grounded 737 Max. at $118 million each. SpiceJet shares company was appointed as sanctioned ~63 crore to the The budget carrier, a major global rose 3.1 per cent to ~134.45, their high- the chairman of the board of RP and SBI, the lead lender, customer for the Max, may buy a ‘siz- est level in two weeks. The broader

directors of the company with had reportedly already 2.11 able’ number of Airbus A321LR and S&P Sensex index was down more effect from September 25, disbursed its portion of ~10 2.00 XLR jets to accommodate a planned than 1 per cent. The Max has been 2019," the company said in a crore. However, other 1.79 expansion, SpiceJet Chairman Ajay grounded worldwide since March after BSE filing after its board lenders like Yes Bank, Singh said on Tuesday. No decision has a pair of crashes killed 346 people. meeting. The company also Punjab National Bank, IDBI been made, he said, and the airline After six months, the timing of the said the board has approved Bank, Bank of India, Indian would consider a competing midrange return to service remains unclear as the proposal to set up special Overseas Bank and Axis jetliner if Boeing decides to build one. regulators conduct assessments of the situation committee. PTI< Bank are yet to release their SEP 19 SEP 24 SEP 25 Airbus has “pushed us hard since jet’s airworthiness. portion. PTI< Source: Company, BSE the day we started flying Boeing air- Boeing has told SpiceJet that it craft, and of course with the current expects US regulators to re-certify the GVK to spend ~8.5K cr problems, they’ve pushed us harder,” plane in early November, Singh said. on Navi Mumbai Owner of Mariott, SHALLY SETH MOHILE Sitharaman had last Friday slashed fits for buyers have gone up to Singh said. “They have made us a com- While Indian regulators plan to con- IHG hotels files for Mumbai, 25 September corporation taxes from 30 per cent to ~110,000 from ~95,000 earlier. mercial offer and we are evaluating it.” duct their own checks, Singh said he airport phase-I effectively 25.7 per cent. Jain claimed this has improved The discussions with Airbus threaten hopes SpiceJet will begin flying its Max The GVK group, which is in the IPO to raise ~11 bn he country’s leading carmak- Bhargava said he was hopeful the demand. “Bookings have soared by Boeing with a high-profile defection at planes again in January. “We look for- process of developing Navi SAMHI Hotels, the owner of the er, Maruti Suzuki, on price cut would increase sales. “But it up to 50 per cent on some models,” he a time when the US planemaker is ward to the Max aircraft coming back Mumbai International Airport, largest number of Marriott and T Wednesday said it has cut is difficult to say how much the sales said, adding that many people were enmeshed in one of the biggest crises in because that’s where the biggest pain will be spending ~8,500 crore IHG -operated hotels in India, prices by up to ~5,000. This will boost will rise,” he said, adding: “Overall hoping for a GST cut before buying a its 103-year history. SpiceJet, India’s point for SpiceJet is currently,” he said. in the first phase to cater to 10 has filed for an initial public demand in the festive season when sentiments and stock markets have car, but since that did not happen, second-largest airline, has 13 Max jets in The carrier is in conversations with million passengers per offering to raise up to ~11 billion most cars are sold, it said. improved. The scenario looks rosier they have started making purchases its fleet and has committed to buy 205 Boeing about compensation for the annum, chairman of the infra ($154.82 million) by issuing new The lower prices will be effec- than before, but only time will tell anyway. of the single-aisle workhorses as it costs incurred from the grounding. major G V K Reddy said on shares. Existing shareholders tive immediately on models such whether it will translate into sales.” Some analysts said the price cut expands capacity to handle the nation’s SpiceJet has taken a number of Wednesday. The airport is a are also seeking to sell up to 19.1 as Alto 800, Alto K10, Swift (diesel), Auto sales in India was a temporary meas- fast-growing demand for air travel. older 737s while the Max remains on PPP venture, in which the million shares in the offering, Celerio, Baleno (diesel), Ignis, Dzire have been on a decline for The lower prices ure and Maruti was While Singh didn’t specify the exact the ground, but those jets are more MIAL has a 74 per cent stake with Blue Chandra and Gold- (diesel), Tour S (diesel), Vitara over a year amid tepid eco- will be effective unlikely to hold on to size of a potential transaction, he said expensive and less efficient to oper- with CIDCO, the state's nodal man Sachs Investments Brezza and S-Cross. nomic growth and liquidi- immediately on it for very long. This “any aircraft order that SpiceJet places ate, Singh said. agency for the project, Holdings (Asia) looking to Maruti has been offering benefits ty issues facing non-bank- models such as Alto was more so because would at least be 100 aircraft.” BLOOMBERG holding the remaining offload about 15 million shares of up to ~1 lakh since the beginning of ing financial companies. 800, Alto K10, Swift the company has 26 per cent. PTI< in total. REUTERS< September. The reduction will be over In August, private vehicle (diesel), Celerio, stretched itself with and above that. Analysts said the (PV) sales touched a 22- Baleno (diesel), offers for buyers. price cut would wipe out gains to the year low. Ignis, Dzire (diesel), “Once Maruti gets automaker’s bottom line from the Maruti is the first PV Tour S (diesel), Vitara back pricing power, Ongoing global uncertainties reduction in corporation taxes. maker to have announced Brezza and S-Cross which is weak at the “Owing to the reduction in the tax a price cut. Rival Hyundai moment, the carmak- dampen M&A activity in Aug rate, we had estimated a benefit of Motor India said that while it has not er might get back to previous levels. 5-6 per cent in the company’s profit cut prices, it has passed on the bene- There is hardly going to be any impact Corporate India’s merger and acquisition activity moderated in after tax. This is likely to be wiped out fits of the tax rate cut to buyers. on earning right away,” said Mitul August with 23 deals worth $845 million, the second-lowest now,” said Bharat Giani, analyst at Vikas Jain, national sales head at Shah, vice president, research, at monthly deal volume to date amid ongoing global uncert- Sharekhan. He added that the price the firm said the company passed Reliance Securities. ainties, said a report. According to Grant Thornton's monthly cut was unlikely to boost demand in on the benefits on September 21 , a Most carmakers have launched SpiceJet plans IPO for cargo unit amid e-com boom M&A Dealtracker, the prevailing economic uncertainties a big way. day after clarity was provided on the aggressive schemes to attract buyers. resulted in August recording 36 per cent decline in terms of R C Bhargava, chairman, Maruti goods and services taxes. The GST Their effect will be evident only next SpiceJet plans to sell shares in its logistics business in an initial public offering, as the rise number of deals and 49 per cent fall in value terms. In August Suzuki India, said, “The money that Council did not cut taxes on cars month. Spokespersons at Tata Motors of e-commerce drives demand for fast shipping across the region. The cargo division, 2018, there were 36 deals worth $1,660 million. PTI would have been left over because of despite demand from industry. and Mahindra said they are yet to known as SpiceXpress, could be listed on a stock exchange within 12 months, SpiceJet the tax cut will now be utilised to meet Instead of paring prices, the take a call on cutting prices. A Honda Chairman Ajay Singh said. The business would continue to be owned by SpiceJet, he Volume Value ($mn) the reduction in prices.” Korean carmaker topped up the on- Cars India spokesperson said it has no said.“We have a country of 1.3 billion people, one of the fastest-growing economies in 2017 2018 2019 2017 2018 2019 Finance Minister Nirmala going consumer offers. Total bene- plans to do so. the world, and we have very few air logistics players,” he said. BLOOMBERG Domestic 24 27 13 503 393 609 Cross-border 22 9 10 385 1,267 236 Merger and internal restructuring 2 52 GSK suspends Total M&A 48 36 23 940 1660 845 Sachin Bansal returns to executive Private equity 47 67 69 4,967 1,332 2,118 Grand total 95 103 92 5,907 2,992 2,963 ranitidine sale TOP 3 DEALS position with microfin firm buy MARKET VIEW Acquirer Target % stake $million YUVRAJ MALIK the company. The rest is spent on For a year and a half, Bansal has lion, while the rest is structured MAT val Mat val Adani Power GMR Chhattisgarh 100 512 Bengaluru, 25 September buying shares from existing share- continued to dabble in the start- debt. Ather Energy, the electric Rank Brand & company Aug 19 growth Air Water Linde India 100 194 holders. His exact stake in the com- up ecosystem. He has made debt scooter start-up, is the other sub- (~ cr) (%) Reliance Industrial Shopsense Retail 88 43 Over a year after exiting Flipkart, pany is undisclosed. investments in a variety stantial investment where he has ACILOC Investments and Technologies’ billionaire entrepreneur Sachin The development of ventures like Vogo, put in close to $35 million. He 1 Cadila Pharmaceuticals 244.7 15.8 Holdings Fynd Bansal is returning to an execu- marks the first major step Bounce, and Kissht and has over a dozen angel invest- ZINETAC Source: GrantThornton tive role. by Bansal, who cashed financing firms Altica ment from his time at Flipkart The co-founder of India’s most- out $1 billion from sell- Capital and Indostar and beyond. 2 GlaxoSmithKline Pharma 209.1 9.1 valued start-up has picked up a ing his shares during the Capital Finance. Some of “This acquisition is our entry RANTAC majority stake in Chaitanya Rural Flipkart-Walmart deal these investments are into financial services,” said 3 Jb Chemicals and Pharma 153.1 10.1 Intermediation Development last year, and confirms from BACQ, a venture Bansal. He added that CRIDS Services (CRIDS), which runs a his move into financial Bansal has put started last year with IIT- founder Anand Rao and Samit R-LOC OlaMoney, Religare microfinance institution Chaitanya services. However, little in ~739 cr of Delhi batchmate Ankit Shetty would continue to be with 4 Zydus Cadila 28.4 3.5 India Fin Credit (CIFCPL), and will has been disclosed about which ~600 cr is Agarwal last year. the firm and spearhead their exist- RANITIN be its new chief executive officer his plans for CRIDS, the primary infusion In the recent past, ing roles. Torrent Pharmaceuticals 12.4 2.8 launch hospital (CEO), a statement by his commu- 10-year-old lender which in the firm his biggest bet is Ola, CRIDS, which started in 2009, 5 nications manager said. focuses on rural, low- where he committed to focuses on low-income borrowers MAT: Moving annual turnover Source: AIOCD AWACS Bansal has put in ~739 crore, income customers in Karnataka, invest $100 million in January. A for vehicle finance, housing loans, insurance cover roughly $104 million, of which Bihar, Maharashtra, Jharkhand source close to the deal said the small business loans and educa- SOHINI DAS & SAMREEN AHMAD ~600 crore is primary infusion in and Uttar Pradesh. equity investment was $25 mil- tion loans. Mumbai/Bengaluru, 25 September PEERZADA ABRAR of hospitalisation and simple Bengaluru, 25 September enrolment open to all ages A day after the Drug Controller General of India between 91 days to 65 years. (DCGI) asked the state Food and Drug Ride-hailing firm Ola is rolling Annual policy renewal hap- Administrations (FDAs) to verify the drug and out a health insurance offer in pens through the Ola app; cov- Phased handset manufacturing formulation of ranitidine, British multinational partnership with Religare erage includes hospitalisation drug major GlaxoSmithKline Pharmaceuticals Health Insurance. for accidents, treatment and suspended supply of the drug to all markets, It is doing so through its critical illness. including India, as a precautionary measure. financial services arm, “It is a thoughtfully policy takes a toll on forex reserves Other Indian drugmakers have also started OlaMoney. This is the first time designed product that effec- testing their ranitidine products at various lab- Ola’s is entering health insur- tively complements any exist- SURAJEET DAS GUPTA addition of 12-15 per cent. communication with Niti Aayog oratories after the USFDA issued an advisory to ance. The OlaMoney-Religare ing health insurance plan and New Delhi, 25 September MAIT, an association of the ICT TRADE CALL pointed out that apart from health care professionals. Hospicash offer enables policy even competently serves as sector, estimates that the National deferring the PMP programme till One of the most popular ranitidine brands in holders to claim ~5,000 a day of standalone health coverage,” The government’s most-touted Electronics Policy (NEP) 2019 of March 2023, the government India is Zinetac, which has an annual sales of hospitalisation. Available to all said Anuj Gulati, managing phased manufacturing the government, which is should shift from an “import ~209 crore in the country’s ~688-crore raniti- registered Ola users and can be director, Religare Health programme (PMP) for mobile estimating that India would Mobile substitution policy” to one dine market. handset 141.0 purchased directly through the Insurance. “We believe this is a handsets has led to an increase in produce and export $80 billion Source: focused on increasing exports. “GSK has been contacted by regulatory Ola app. “The financial needs landmark initiative." the value of component imports. worth of mobile handsets for exports Industry The ICEA has admitted that authorities regarding the detection of genotox- of Indian customers are fast This is slated to get worse exports by 2025, said that it would ($billion) the PMP programme has not met ic N-Nitrosodimethylamine (NDMA) in raniti- changing, with the myriad of Uber's offer and may have an adverse only increase imports in a big way. with success and it is mainly dine products. Based on the information uncertainties that surround us. On Wednesday, the Indian arm impact on the country’s foreign Even assuming that the value 37.6 riding on the back of printed received and correspondence with regulatory More and more consumers are of Ola's US-based rival, Uber, exchange reserves (as a result of addition doubles to 30-35 per circuit boards, chargers and authorities, GSK made the decision to suspend forced to use their savings to announced a rider insurance a higher outflow). cent (more or less in line with battery packs. The glaring misses the release, distribution and supply of all dose pay for unplanned hospitali- offer at no extra cost, in part- According to industry that of China currently), the it says in a letter, are mechanics, forms of ranitidine hydrochloride products to sation expenses,” said Nitin nership with Bharti AXA and estimates based on presentations import bill for components is camera modules, connectors, all markets, including India, as a precautionary Gupta, chief executive of TATA AIG. This will cover all to the NITI Aayog, which has been estimated to be a staggering 1.2 speakers and microphones. It is action pending the outcome of ongoing tests OlaMoney. “With (this) prod- riders in cars, autos and motos, tasked to find a road map to make ~330,000 crore, which is an over also futile to have a PMP regime and investigations," a GSK spokesperson said. uct, we aim to create seamless up to a maximum of ~500,000. India into a mobile handset threefold increase from the India Vietnam China when zero duty imports are GSK manufactures ranitidine hydrochlo- access to quality health care The insurance provides cover manufacturing hub, in 2018-19 current levels. allowed on the same products ride tablets 150 mg and 300 mg (Zinetac), for millions." for physical injury as a result of there was an average value MAIT has also pointed out in from Asean countries, mainly using API from Saraca Laboratories and anoth- The policy, with a premium any accident that might occur addition of 18 per cent in local a discussion with the government Vietnam, as well as South Korea er supplier, SMS Lifesciences India, for supply as low as ~3 a day, is available as while on a trip with Uber, from mobile handset manufacturing. that in spite of tariff intervention, and Japan. to the Indian market. Subsequently, Saraca individual and family plans. It the point the rider enters the But the import bill of the PMP has not been able to The industry estimates that Laboratories was notified by the European can be purchased monthly or vehicle until the end of the trip. components rose to ~99,816 crore trigger largescale shift of the market is conductive for India currently exports only $1.2 Directorate for the Quality of Medicines that for a year, renewable. Unlike Pavan Vaish, head of cen- on domestic mobile handset sales component manufacturing in the exports. billion of mobile handsets. its certificate of suitability for ranitidine traditional health insurance tral operations (rides) for India of $24.20 billion (~162,309 crore). country and India has a mere 5 Leading associations, apart However, the NEP 2019 has hydrochloride has been suspended with policies which are accepted and South Asia at Uber, said he In 2017-18, the country per cent share of the global mobile from MAIT, including Internet charted an ambitious target of immediate effect. only at preferred network hos- expected the initiative to be produced $25 billion (~167,675 handset market worth $485 and Mobile Association of India, $110 billion mobile handsets for "The product manufactured using API from pitals, this can be used to reim- “well-received by the rider crore) worth of domestic mobile billion (handsets). the Indian Cellular and exports by 2025, a move which SMS will not be recalled from the market at this burse expenses at “any hospital community and their families, handsets but imported between Since component Electronics Association of India will make India a net foreign point of time. However, all such products will across India,” said the compa- giving them a greater sense of ~84,000 and ~98,000 crore manufacturing is a matter of (ICEA), a body of mobile device exchange earner on mobile remain on hold and they will not be released to ny. The product includes reim- security and assurance when components to manufacture scale, the Indian market is not big manufacturers, and Broadband handsets even at 35 per cent value the market while we await the test results," the bursements by providing proof they take a Uber ride.” them at a much lower value enough to shift base to India until India Forum have in their addition. GSK spokesperson added. MUMBAI | THURSDAY, 26 SEPTEMBER 2019 COMPANIES 3

. < Mahindra to rescue Apollo Hospitals to join Ayushman Bharat in smaller cities Ford’s India business ANEESH PHADNIS & SOHINI DAS reduce promoter share Mumbai, 25 September pledges. “We are not desperate to AGENCIES which is dominated by Suzuki Motor’s Apollo Hospitals, the country’s get more investors," said New Delhi, 25 September cheap, fuel efficient vehicles. General largest chain in the segment, Prathap Reddy, chairman (and Motors scrapped a $1-billion investment says it will join the Ayushman the MD's father). The promot- S automobile major Ford on in India two years ago and stopped selling Bharat programme in tier-II ers will not be selling further Wednesday said it was engaged Chevrolet models here. The market as a and tier-III cities. stake in the chain or at the U with Mahindra & Mahindra whole faces challenges, with sales con- In metropolitan cities, how- holding company level, after (M&M) for strategic cooperation to achieve tracting for the past 10 months, forcing the ever, it will continue to stay this 3.6 per cent stake sale. “commercial, manufacturing and busi- industry to cut production and jobs. A final away till the government pro- The senior Reddy started ness efficiencies” in India. agreement hasn’t been reached and the gramme raises the rates for with a single cardiology Reports have said Ford is all set to trans- discussions could still fall apart, the people surgery and treatment. focused hospital in Chennai fer some of its key assets, including manu- said. Reuters reported some elements of The scheme, also known as in 1983. The group now oper- facturing plant in Chennai to a joint venture the venture in April. Pradhan Mantri Jan Arogya ates 72 hospitals across the with M&M as the US auto major struggles to M&M shares fell as much as 4.3 per cent Yojana, completed its first had allocated allocated five the scheme. Government country. Margin expansion make a mark in India. “Forging a partner- to ~535 Wednesday in Mumbai. Ford shares anniversary last week. Around per cent of its bed capacity in rates, said Reddy, did not cov- from new hospitals and ship for the future, we remain engaged with closed 0.6 per cent down on Tuesday. 4.6 million hospital treatments hospitals in tier-II and tier-III er the costs for some of the sur- improved asset utilisation will Mahindra to develop avenues of strategic costing ~7,000 crore were done cities for Ayushman Bharat. geries under the programme. be focus areas for the chain, cooperation that will help us achieve com- Latestforay under it in these 12 months. Their participation, she clari- That apart, Apollo reiterat- apart from growing its phar- mercial, manufacturing and business effi- As envisioned, the new entity will hold mo- While the scheme is now fied, was still in a testing stage; ed its focus for an asset-light macy business. ciencies,” a Ford India spokesperson said. st of Ford’s assets in India, including the being implemented in 32 it was underway in states model for growth, with a focus It says it is also focusing on The spokesperson further said, “We two car plants it owns in the country. Ford states and Union Territories, where local health schemes on retiring its debt after selling preventive health care. And, look forward to sharing more information FORD INDIA PRODUCTION was one of the first automobile companies large hospital chains have had been subsumed in the stakes in the joint venture aims to double the share of at the appropriate time and cannot com- to enter India when it liberalised the econ- been keeping away. Till earli- central programme. insurance firm and pharmacy patients from abroad to 20 per ment on ongoing speculations.” M&M omy in the early 1990s. Ford first entered er this month, when Medanta As for metropolitan cities, business. Earlier this month, cent in the next few yearss. spokesperson said. India in 1926 but shut down that opera- Hospital signed an agree- where the costs are much Suneeta Reddy (part of the "We have invested over Rs M&M will own 51 per cent of the new tion in the 1950s. “Ford remains committed ment to empanel in the proj- higher, they remain out for this promoter family) sold her 3.6 3,000 crore in expansion in the entity, sources said. Ford will get equal to growing its customer base and product ect; Apollo has now decided reason. Hospital associations, per cent stake in Apollo last 30 months and our inten- voting rights and board representation, portfolio in the world's fourth-largest likewise. she said, were in a dialogue Hospitals Enterprises for Rs tion now is on improving asset one of the people said. The venture, to be automobile market, and will continue to Apollo managing director with the central government 748 crore. The funds are being utilisation and profitability," announced as soon as next week, doesn’t make in India, for India and the world,” Suneeta Reddy said the chain on new pricing guidelines for used to pay off debt and said the MD. include Ford’s global business services Lori Arpin, a spokeswoman for the division or an export-focused engine plant Dearborn, Michigan-based automaker, in Sanand. said in a statement while declining to dis- Amazon India claims top Ford’s compensation is likely to be far Compiled by BS Research Bureau Source: Captiline cuss specifics. below the $2 billion it’s poured into India, The deal will allow M&M to sell some slotin mobile phone sales only to achieve market share of less than 3 Ford is “insulating themselves a little Ford vehicles in developing markets under per cent. The deal keeps Ford in the heav- bit,” said Deepesh Rathore, an independent its own brand, the people said. Ford and In the run up to the ‘Great Indian Festival’ ily populated market while letting it share automobile analyst based in Bengaluru. M&M also are jointly developing a mid- sale, Amazon India has claimed top spot in the financial burden with Mahindra. Ford “For Mahindra, it makes sense, because sized sport-utility vehicle for India. Back in mobile phone sales. Chief Executive Officer Jim Hackett is they are increasingly looking at the urban 2012, Ford had aimed to make the South The firm says that after the festive sales, it leading an $11 billion restructuring and market.” Global carmakers have had a Asian nation one of its three largest mar- would reinforce its position as the top online paring money-losing overseas operations. tough time making inroads into India, kets by 2020. marketplace to buy mobile phones and acces- sories. With more than 2,500 mobile phone and accessory brands and as many as eight new launches lined up, the online market- place major is planning to expand its offer- SCsetsasideinsolvencyofJignesh Shah’s firm ings. “On Amazon.in, the smartphones catego- AASHISH ARYAN ing up petition filed by IL&FS ing justice, failing which the company Multi-Commodity ry has been growing faster than the industry. New Delhi, 25 September Financial Services was more case can be stuck down by the Exchange (MCX). It continues to be one of the largest categories. than three years after court for falling out- In 2009, IL&FS Financial We have the widest selection of mobile The Supreme Court (SC) on the debt had occ- Apexcourt says side limitation peri- Services purchased 44.2 million phones. We have eight new launches planned Wednesday set aside an order urred, it had to be petition moved od. IL&FS Financial equity shares of MCX Stock Exc- for this festive season with marquee brands of the National Company Law struck down since it by IL&FS Services Limited, a hange from MCX. After this like Samsung, Xiaomi, and Vivo,” said Noor Tribunal (NCLT) and National did not pass the Financial subsidiary of Infras- agreement, La Fin gave a LoU to Patel, director — category management, Company Law Appellate Tribu- muster of time limita- Services filed tructure Leasing & IL&FS Financial Services that Amazon India. nal (NCLAT), thereby quashing tion mentioned in afterthree years, Financial Services either the former or it nominees Amazon is a key strategic partner for the insolvency proceedings Article 137 of the falls outside the (IL&FS), had filed a “would offer to purchase from Apple as well as OnePlus. According to the against Jignesh Shah and Pus- Limitation Act. limitation period winding up petition IL&FS Financial Services the company, both these players have witnessed hpa Shah’s La-Fin Financial The Limitation against the La-Fin for shares of MCX-SX after a period massive traction in sales coming from tier-II, Services. Act sets deadlines for different failing to honour a Letter of of one year, but before a period tier-III and rest of India towns for the last A three-judge Bench of the cases within which a petitioner Undertaking (LoU) signed by of three years, from the date of several quarters. high court said since the wind- must approach the court seek- the latter on behalf of its group investment”. KARAN CHOUDHURY 4 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 26 SEPTEMBER 2019 “Normal life in J&K has not been affected. “There is disappointment in Kashmir and “The ED doesn’t fall under the state People are doing their necessary work, a clear the despair is also prevalent among the government’s jurisdiction. Those guilty sign that work has not been stopped. Those people in Jammu province. Except will be punished... No question of action who feel that life has been affected are the 100 or 200 people of the ruling party against those who are not guilty” ones whose survival depends on terrorism” (BJP), nobody is happy” DEVENDRA FADNAVIS, Maharashtra CM, on ED action against NCP chief Sharad Pawar GENERAL BIPIN RAWAT, Army chief GHULAM NABI AZAD, Congress leader

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IN BRIEF Strong investor interest for Centre considers body to Kristalina Georgieva capital raising plans: YES Bank IMF chief from Oct 1 Private lender YES Bank on Wednesday said it has received strong interest from The International Monetary various investors on its plans to raise regulate medical devices Fund on Wednesday formally capital as the lender approaches the selected Kristalina Georgieva Reserve Bank of India (RBI) for approval VEENA MANI & SANJEEB MUKHERJEE of Bulgaria as the second to increase the bank’s authorised share New Delhi, 25 September woman ever to lead the capital. “The bank has received strong 189-member institution. The interest from multiple foreign as well as domestic private equity The government is planning to set up a selection had been all but and strategic investors for this capital raise and remains firmly on Medical Devices Authority (MDA) for the guaranteed after the global cri- course to raising growth capital subject to the necessary entire spectrum in the medical devices sis lender said earlier this approvals,” it said in a regulatory filing. The lender has got appro- sector — gauges, weighing machines, month that Georgieva, a for- val from its board to increase its authorised capital from ~800 crore orthopaedic implants, etc. mer World Bank CEO, was the to ~1,100 crore. Subsequent to the RBI’s nod, the bank will seek It will, however, not have powers on sole candidate. “It is a huge responsibility approval from its shareholders. Despite this, the bank’s shares pricing. That will continue to be vested In acknowledging her to be at the helm of the tanked 4.19 per cent to close at ~53.7 on the BSE. SUBRATAPANDA< with National Pharmaceutical Pricing selection, Georgieva spoke of IMF at a time when Authority (NPPA), senior officials said. tempestuous times for the global economic growth The proposed body will be separate global economy. “It is a huge continues to disappoint” 1.42 million jobs Direct tax code panel from the Central Drugs Control Standard responsibility to be at the helm KRISTALINA GEORGIEVA wants DDT removal to Organisation (CDSCO), which will con- of the IMF at a time when created in July: tinue to be the regulator for drugs. global economic growth con- economies and escalating ESIC payroll data promote investment The Bureau of Indian Standards (BIS) tinues to disappoint, trade ten- trade conflicts — the largest Around 1.42 million jobs were The task force on direct tax will still frame guide- sions persist, and debt is at his- of which has been driven by created in July, higher than 1.24 code (DTC) has recommended lines but these would torically high levels,” she said. the United States, the fund’s million in the previous month, abolishing dividend distri- Makers say be regulated by MDA. “This means also dealing with single biggest shareholder. according to a latest payroll bution tax (DDT) with a view to they are not The arrangement issues like inequalities, cli- Georgieva, who was cham- data from Employees’ State promote investment. The comfortable would be on the lines in the market without any particular stan- mate risks and rapid techno- pioned by Paris, overcame a Insurance Corporation. PTI< dividend distribution tax is a with the idea of food items, where REMEDY IN SIGHT dards governing these. logical change.” challenge within the divided surrogate tax and it hinders of BIS framing a BIS designs the stan- | The proposed body would be Imported medical devices are given She is to take up her posi- European Union from foreign direct investment law. They want dards but these are separate from the Central Drugs approval in India if they have USFDA tion as managing director on Germany which had backed MFs told to adopt inflows, sources said. PTI< CDSCO to do it enforced by the Food Control Standard Organisation approval or from the European Union. October 1, replacing Christine former Dutch Finance waterfall approach Safety and Standards | It would have representatives from Medical device makers say they are not Lagarde, who is set to take over Minister Jeroen Dijsselbloem. for valuation Challenge is to grow Authority of India. BIS itself doesn’t have the industry, apart from policy very comfortable with the idea of BIS the European Central Bank Under an unwritten rule, a implementing powers, said a senior gov- makers and medical practitioners framing a law. They feel CDSCO should later this year. Georgieva’s rise European has led the IMF The Sebi has asked fund houses ernment official who is working on the be doing it. perpetuates Europe’s long- since its creation in the after- at 8-9% and sustain | The plan is to stop using norms to follow ‘waterfall’ approach it, says Amitabh Kant proposed MDA. Meanwhile, the government is also standing control over the des- math of World War II while the for the valuation of money He said the body would comprise rep- borrowed from USFDA working on rules for rationalising the ignation of the fund’s leader- leader of the fund’s sister market and debt securities. As The Centre is determined to resentatives from the industry, policy | Govt also working on rules to rationa- trade margins for medical devices that ship. She inherits the helm of organization, the World Bank, part of this framework, debt take India back to a high makers and active medical practitioners. lise trade margins for medical devices have been categorised as drugs. This an institution buffeted by the has been designated by securities would be valued on trajectory growth of 8-9 per It will get its role, powers and objectives that have been categorised as drugs includes intraocular lenses. The gov- rise of populism in advanced Washington. AFP/PTI basis of traded yields, subject to cent and the challenge is to from a Medical Devices Act, whose pro- ernment has already capped the prices of identification of outlier trades sustain that growth, said NITI visions are being framed. cardiac stents and orthopaedic knee by valuation agencies. In case Aayog CEO Amitabh Kant. PTI< “Government agencies, along with Food and Drug Administration (FDA), for implants. of exceptional events on a day, BIS, are formulating the Act. The draft procurement by state and central gov- The NITI Aayog and the department of only volume weighted average has been made and BIS has already made ernments once MDA is put in place. pharmaceuticals are together working on E-ASSESSMENT SYSTEM yield post such event may be Correction 1,325 standards for more than 1,000 prod- Currently, medical devices are the a formula to cap the prices of other med- considered for valuation. The report — SC admits EOW’s uct lines,” added the official. NITI Aayog responsibility of the central drug regula- ical devices that are considered drugs. BS REPORTER< appeal against 63 Moons is also involved in the process. tor. As many as 22 medical devices have Devices not characterised as drugs cannot order — published on Sept 25 The plan is to stop using norms bor- been categorised as drugs and are the only be brought under price caps by the NPPA, I-T identifies had wrongly mentioned that rowed from the American regulator, the ones that are regulated. The rest are sold using the Drug Price Control Order. UP student accusing the SC has admitted Mahara- Chinmayanand shtra state’s (Mumbai police) arrested appeal against the Bombay 400,000 cases HC order freeing attachment The 23-year-old student who of properties of 63 moons in SHRIMI CHOUDHARY plan, the e-assessment may not accused BJP leader Swami the NSEL default case. 63 Indo-US trade deal faces ICT hurdle New Delhi, 25 September be fully faceless initially, as the Chinmayanand of rape was moons has clarified the SC has jurisdiction assessing officer arrested on charges of not admitted the appeal but SUBHAYAN CHAKRABORTY The income-tax (I-T) depart- would be knowing the profile of extortion and sent to 14 days only issued notices to all New Delhi, 25 September ment has identified about the assessee and can also view judicial custody, police said. parties to decide on 400,000 taxpayers who will it at the time of serving notices. She was arrested by the admitting the special leave Differences over reduction in import face scrutiny under the new “For CASS 2019, the notices Special Investigation Team of petition and will hear the duties on high-value US smartphones and faceless assessment scheme. shall be generated and issued the UP Police amid massive matter on November 27. gadgets have held up efforts by India and Notices were being served to a in a centralised manner by the deployment of forces. PTI< The error is regretted. the US to finalise a trade package, said little over 100,000 assesses, prescribed tax authority, for officials. However, both sides have con- seeking explanation on the cases selected for scrutiny. tinued to discuss issues and trade nego- returns filed within 15 days, After the issuance of notices, tiators are hoping for a breakthrough by said an official privy to the further assessment proceed- Thursday, they added. “Commerce and development. However, about ings shall be conducted by the No cashbacks on credit card Industry Minister Piyush Goyal, along 10,000 such letters were unde- jurisdictional assessing officer with Commerce Secretary Anup livered and, in some in a regular manner payments at petrol pumps Wadhawan and other trade department cases, bounced through Income-tax officials, are in the US,” said the officials. back. The deadline Business Application BS REPORTER & PTI Corporation and Hindustan Prime Minister Narendra Modi will have for sending scruti- (ITBA),” according to Mumbai, 25 September Petroleum Corporation to give a number of bilateral meetings on Major corporations such as Apple have ‘trade package’ that provides an amicable ny letters ends on the assessment mod- a discount on card payments to Thursday, one of which may see him sit also thrown their weight behind the move, solution to major grievances, according to September 30. ule prepared by the On the advice of oil companies, promote digital transactions. with US President Donald Trump again. arguing that India is a major market for a senior trade negotiator. India may con- The tax depart- I-T department. banks are going to discontinue Apart from the discounts, Addressing the press on Tuesday, Trump consumer electronics. The overall import of sider dismantling the current price cap ment is learnt to A jurisdictional the cashback feature they the government had also had promised a trade deal with India “very electrical machines in all forms from the US regime for coronary stents, with a trade have finalised com- assessing officer can offered on their credit cards for directed oil companies to bear soon”, with a larger deal down the line. stood at $1.8 billion in FY19, slightly up from margin policy. It may also lower duties on puter-assisted scrutiny access the ITBA portal con- fuel purchase. This comes into the burden of card payment However, Modi has not commented so far. $1.75 billion in the year before. certain ICT imports. selection (CASS) cycle for the taining profiles of assesses effect from October 1. charges — called merchant India has tried to reduce its exposure to In return, the US has offered to step current year and has selected including PAN, ITR, TDS “The 0.75 per discount rate ICT hurdle foreign products for electronics imports, back from its aggressive posturing on about 100 parameters to scru- details, and details of order cent cashback on (MDR) — The US wants India to reduce import which, at $52 billion, is the third-largest on ‘reciprocal taxes’. Trump has repeatedly tinise returns under the new and so on. fuel transactions will Discount which is usual- duties on certain information and com- the country’s import bill. The government’s accused India of being a ‘high tariff system. Sources said some of An assessing officer is also be discontinued on debit ly paid by the munication technology (ICT) products, phased manufacturing program has tar- nation’, referring to duties placed on the parameters, based on required to verify the notices with effect from cards, retailer. such as high-end mobile phones and geted reducing the import of technology Harley Davidson motorcycles. which notices were served, issued and whether it has been October 1,” read a other An indus- smartwatches, which may make iPhone products over the next five years. The India-US trade talks had run the included undisclosed foreign successfully delivered. In cases message from State digital try official products cheaper. risk of falling through after the US had, income and immovable prop- where the notices bounced, the Bank of India to its modes of payments confirmed While New Delhi had earlier consid- FTA or not? earlier this year, cut off India’s duty-free erties, high-value transactions, officer will take a print out and customers. would continue the oil com- ered the proposal, talks have been made The US continues to pressurise India on a access to the US market under the misreporting of long-term cap- send out a physical copy to the American panies have difficult on the quantum of reduction full-fledged free trade agreement (FTA), Generalized System of Preferences (GSP). ital gains, TDS claimed not assesse concerned. Express card holders received decided to discontinue the demanded, the officials said. since a year, but New Delhi has consistent- Subsequently, India had raised import matching with the tax forms, Besides, if the returns are similar messages. After the discount on all credit card ICT products make up a minuscule $407 ly resisted. Commerce Department officials duties on key high-value imports from non-disclosure of investments received by assessing officer demonetisation exercise of payments from October 1. million, out of the $35.54 billion of total have argued that India stands to gain little the US, mostly on agricultural products made in the name of spouse, (AO) who is not the jurisdic- November 2016, the govern- However, the discount on inbound shipments from the US, as of now. from such a pact, given import duties for such as apples and almonds. The rein- relatives, filing defective tional AO, then the assesse per- ment had asked oil marketing debit card and other digital However, US Commerce Department offi- goods coming from the US are already statement of GSP benefits is a key demand return, tax evasion in earlier manent account number will companies such as Indian Oil modes of payments would cials have zeroed in on the category as a among the lowest globally. from the Indian side, according to people years, and so on. be immediately transferred to Corporation, Bharat Petroleum continue, he said. prime growth puller. India wants a mutually acceptable in the know. According to the action the jurisdictional AO. Govt to ease land acquisition, finance for renewables to meet 450 Gw target

SHREYA JAI Wind Solar (in megawatt, Mw) Wind losing steam? adoption of solar,” said Sunil Rathi, New Delhi, 25 September As India expands it renewables portfolio, director, sales and marketing, Waaree WHO ADDED wind power seem to be losing steam. Energies, a leading solar panel manufac-

The Ministry of New and Renewable HOW MUCH 9,363 Leading domestic wind turbine man- turer in India. 5,526 Energy has started drafting plans to set 5,502 ufacturers, with more than 80 per cent In order to boost Make in India, the up mega capacities and ease invest- CAPACITY market share, are staring at a weak order renewable power ministry has asked the ment in renewables to meet the new pipeline, financial losses and regulatory Ministry of Finance to impose a Customs target set by Prime Minister (PM) niggles. Foreign companies, including duty on solar cells and modules being 3,423

Narendra Modi. 3,018 some Chinese ones, are increasing foot- imported into the country. 2,661

At the United Nations Climate Action 2,311 print in India. This could lead to cost The government is taking several 2,152 Summit in New York on Monday, Modi 1,865 escalation, claim power producers. steps to curb imports. However, mega 1,124 vowed to double India’s renewable ener- 1,112 Commissioning fors wind power proj- tenders for solar manufacturing has 841 gy target to 450 gigawatt (Gw) by 2030. ects has slowed to historic lows. Last been repeatedly ignored by industry This comes at a time when commission- financial year, projects of 841 megawatt players, both domestic and foreign. ing of projects has slowed and states are 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20* (Mw) were commissioned. The Centre Paucity of bids forced the govern- raising red flags. *Till August 2019 SOURCE: Minsitry of new & renewable energy Annual report/website has tendered projects to the tune of 7,000 ment to extend the deadline for it for the In 2019-20, of the 3 Gw target for wind Mw in the past two years. 12th time last week. Ministry officials, power, 1.1 Gw has been commissioned. however, said the government was in For solar, 2.1 Gw has been commissioned On the cards from the procuring state would lead to nies such as SECI, NTPC, NHPC, PFC, Dull solar constant discussion with industry and out of 7.5 Gw target. The renewable energy ministry is plan- stringent penalty. A letter of credit-type and REC. The land will then be allotted In solar, the challenge is low capacity of the tender would be a “mega success”. Slow project allocation and financial ning to introduce a standard power-pur- system of payment would also be to private companies bidding for proj- domestic solar panels and increased A senior official said several manu- stress has halted wind power projects. chase agreement (PPA) for projects. mandatory.” To sort out land-acquisition ects,” said a senior government official. influx of imports from China. facturers had committed to increase Solar projects have been facing land “We’ll modify the PPA for solar and issues, the ministry plans to change the The model the ministry is develop- “The government should implement their manufacturing capacity many crunch and grid connectivity issues. A wind projects. There will be a standard project-award system, switching the ing will take a leaf out of the books of stringent anti-dumping duty on a priori- times to meet demand. Leading the downward revision of tariffs in Andhra bidding document,” said Aanand “plug-and-play” model. ultra-mega thermal power projects ty to deal with cut-throat competition manufacturing expansion was Adani Pradesh could hit renewal projects of Kumar, secretary, Ministry of New and “The government will acquire the (UMPP). Of the 16 UMPPs planned, four from international players. As the coun- Mundra, which is planning to add anoth- nearly 7.5 Gw. Renewable Energy. He added, “The land. Special-purpose vehicles (SPVs) were awarded to private players and try is going through slowdown, the er 1 Gw capacity followed by Jupiter terms of the PPA will ensure any default will be formed by state-owned compa- only two are still running. industry is witnessing a decline in the Solar, Premier Solar and others. MUMBAI | THURSDAY, 26 SEPTEMBER 2019 WORLD 5

. < Boeing reaches first settlement Brain differences may with Lion Aircrash victims Boeing has reached the first settlements of lawsuits filed by fam- ilies of Lion Air passengers who died when the 737 Max aircraft crashed in Indonesia late last year. Eleven of 17 clients repre- explain tech behaviours sented by the Wisner Law Firm in Chicago have settled claims, partner Alexandra M. Wisner said in an interview. She declined to say how much Boeing agreed to pay, citing a confidentiality provision. Reuters earlier reported each family will get at least JULIE JARGON was going, she said, ‘I’m only looking at $1.2 million. A Boeing spokesman declined to comment on the 25 September Instagram three times a day but I can’t catch settlements. In July, the company said it was offering $100 mil- up,’” Ms. Repking said. lion to support the families of victims and others affected by two any parents of both boys and girls One might argue that multiplayer crashes of its 737 Max jetliner. BLOOMBERG have witnessed striking differ- videogames are the way boys connect with M ences in the way their kids use friends online. But it’s different. technology, with their sons generally gravi- “Videogames can be social but there’s also a tating to videogames and their daughters physical distance because you don’t see pho- often spending more of their screen time tos, and communication is largely through scrolling through social media. text, which is more consistent with the direct Emerging research indicates that brain way men tend to communicate with each differences between males and females help other,” Dr. Guadagno said. account for the split. Researchers at the University of Zurich “It is entirely plausible from a neurolog- looked at how differences in brain func- ical perspective that there’s an underlying tioning can help explain why women tend to biological component to this difference peo- be more prosocial—that is, helpful, generous ple are seeing,” said Larry Cahill, a professor and cooperative—than men. In the 2017 of neurobiology and behavior at the prone than women to developing internet study, they hypothesized that the areas of University of California, Irvine, who has gaming disorder. women’s brains related to reward processing spent two decades researching gender dif- But girls and women aren’t free from are more active when they share rewards ferences in the brain. problems when it comes to digital media. and that those areas in men are more active In this column I’ve chronicled the aggres- Data from Pew shows that, in general, when receiving selfish rewards. Brain scans sion some boys exhibit when they have to women use social platforms such as conducted on men and women, in which shut off videogames and transition to other Facebook , Instagram and Pinterest far more they chose between receiving a monetary activities, as well as the problems some than men. Many girls and women are drawn reward only for themselves or one that young men face when they go to college to those photo-sharing sites because they involved sharing money with others, sup- and have to juggle game time and school like to form bonds and find similarities, says ported their theory. work without mom and dad’s help. Rosanna Guadagno, a social psychologist The Lego Group learned a lot about the That led some readers to question why at Stanford University. prosocial nature of girls more than a girls don’t appear to be having these prob- Even if women only use those sites more decade ago when it conducted research lems. Of course, girls have issues of their than men because that is where their friends on who buys the brick building kits. At own, such as smuggling “burner” phones to are, many experts and parents say they have the time, about 90% of the Lego sets pur- keep up with forbidden social media found that girls appear to have a greater fear chased in the U.S. were intended for boys. accounts. It’s just that when it comes to of missing out, which compels them to keep That led the company to conduct more videogames, most girls seem to have a bet- up with what their friends are posting. Some research with girls which revealed, among ter handle on when to stop. recent studies show that girls feel the ill other things, that girls wanted more role- According to a 2017 survey conducted effects of too much social media use, such as playing opportunities. Lego created a pas- by Pew Research Center, 41% of teenage bo- depression and anxiety, more than boys do. tel-colored line called Friends, which sold ys said they spend too much time playing vi- Liz Repking, a cyber safety expert and well but was criticized by some consumer deogames while only 11% of girls mother of three in suburban groups—including the Campaign for a said they do. Chicago, has seen the differences in Commercial-Free Childhood—for rein- Marc Potenza, a psychiatry pro- her own sons and daughter. Earlier forcing gender stereotypes. fessor at Yale University, teamed this summer, her 15-year-old daugh- Academics who study gender differ- SPECIAL up with researchers at universities ter said her phone was driving her ences also have faced backlash for pointing in China to find out why. Using crazy. She told her that she felt pres- out that boys and girls aren’t the same. functional MRIs, which measure brain activ- sured to follow her friends’ Instagram stories “It’s not a debate that there are sex influ- ity by detecting changes in blood flow, the and like and comment on their posts, and ences throughout the mammalian brain,” team studied neural responses in young that it was eating up a lot of her time, Ms. said Dr. Cahill. “How they all play out is male and female gamers, particularly in the Repking said. what we should responsibly explore.” parts of the brain associated with reward Her sons, 18 and 21, use social media— Scientists say understanding those dif- processing and craving—a motivating factor Snapchat, in particular—mostly to com- ferences is critical to parents’ ability to in addiction. When the men and women municate with friends but don’t feel com- help kids navigate the fast-changing world were shown photos of people playing pelled to keep up with what people are of tech. videogames, those parts of the men’s brains posting. “There’s more peer pressure and Our brains haven’t caught up to mod- showed higher levels of activation than validation I see with it for her than for the ern times, says Dr. Guadagno, which is why those parts of the women’s brains. boys,” she said. kids’ digital behavior can feel so confusing Brain regions that have been implicated In August, Ms. Repking’s daughter decid- and overwhelming to parents trying to man- in drug-addiction studies also were shown to ed to impose some limits, such as being on age it. “Human brains are wired for survival be more highly activated in the men after her phone no more than three hours a day on the savanna,” she said. “They’re not wired gaming. The researchers said the results and checking Instagram less frequently. for social media and videogames.” suggest men could be more biologically “When I asked her a week later how that Source: The Wall Street Journal 6 ECONOMY MUMBAI | THURSDAY, 26 SEPTEMBER 2019 1 > Enough assets to honour deposits, EAC-PM shuffle: Sajjid Chinoy gets on board says PMC Bank’s administrator revised tax revenue estimates Rathin Roy, EAC-PM TILL 2021 and provisional actuals. He ANUP ROY & ABHIJIT LELE Shamika Ravi also criticised the Centre’s Mumbai, 25 September RBI rebuts social plan to issue overseas sover- media rumours on dropped from list BIBEK eign bonds and had advised unjab and Maharashtra DEBROY caution on the same. Co-Operative (PMC) closure of 9 banks ARUP ROYCHOUDHURY Ravi had also warned about P Bank’s liquidity profile is Rebutting social media rumours, New Delhi, 25 September the state of the economy, say- good enough and depositors the Reserve Bank of India on ing the country was facing a Wednesday said no commercial should not to panic, said The Centre, on Wednesday, RATAN structural slowdown. She had Reserve Bank of India (RBI)- banks are going to be shut. reconstituted the Economic P WATAL said on Twitter last month that appointed administrator J B Finance Secretary Rajiv Kumar Advisory Council (EAC) to the dealing with the slowdown Bhoria on Wednesday. described such social media Prime Minister for a period of needed major reforms and not Bhoria was appointed messages as “mischievous” two years. Rathin Roy from the mere tinkering. “Leaving econ- administrator of PMC Bank on saying the government was in National Institute of Public omy to the finance ministry is Monday evening. He is yet to process of strengthening public Finance and Policy, along with SAJJID like leaving the growth of a CHINOY finalise the liquidity profile of sector banks by infusing capital in Shamika Ravi of Brookings firm to its accounts depart- the bank as the inspection of its them. “Reports appearing in some Institution, were dropped as ment,” she had tweeted. books continues. However, he sections of social media about the part-time members. Sajjid The EAC-PM was revived in said depositors should not pan- RBI closing down certain Chinoy, India economist at September 2017, for a two-year ic. Even the bank’s loans were commercial banks are false,” the JPMorgan, was appointed as a ASHIMA term. It replaced the erstwhile secured against adequate central bank said. Messages are part-time member. GOYAL PMEAC, headed by former RBI assets. “The bank has 19 per circulating in various social media Another part-time mem- governor C Rangarajan during cent SLR (statutory liquidity platforms that nine banks will be ber Ashima Goyal, of the former PM Manmohan ratio), 3-4 per cent CRR (cash closed down permanently by the Indira Gandhi Institute of effect from September 26, 2019,” Singh’s two terms. reserve ratio) and has its own RBI and appeals being made to Development Research, along said an official statement. In The council was tasked with properties. So, on these counts public to withdraw their money with full-time members Bibek effect, the strength of the EAC- analysing issues — economic alone, there is enough liquidi- People wait outside a PMC Bank branch to withdraw their money in Mumbai on Tuesday PHOTO: PTI from them. PTI Debroy of NITI Aayog and PM reduces to four, with two or otherwise — referred to it by ty,” Bhoria said. Ratan Watal, continue in the full-time members and two the PM, according to its terms of The need for deposit insur- larities in a bank. The irregular- time to rectify the mistake, but against 150 per cent of securi- irregularities disclosed to the EAC-PM. Debroy retains his part-time members. reference. The body could also ance scheme of up to ~1 lakh gets ities in this case mainly pertain RBI decided to freeze even ties. But Thomas also did not RBI. As the MD of the bank, I role as chairman, while for- No reasons were given for take up issues suo motu. activated only at the time of liq- to divergence in non-perform- deposit withdrawals, instead deny that it has high exposure to take the responsibility and mer Finance Secretary Watal the ouster of Roy and Ravi. It has submitted three-four uidation of a bank, which is ing assets (NPA) classification. of restricting lending activi- bankrupt real estate firm HDIL. assure all the depositors that will continue being the mem- Earlier this year, Roy, director papers to the Prime Minister’s unlikely in the case for PMC “Whenever the RBI steps in, ties for example. It may not be as high as ~2,500 these irregularities will be recti- ber-secretary. of the National Institute of office on issues such as Bank, Bhoria said. an ‘all inclusive’ direction is PMC Bank is likely having a crore, as expected, though. fied before the expiry of six “The Government of India Public Finance and Policy, employment, fiscal situation, SLR is the share of deposits issued, which immediately disproportionately high expo- Interestingly, even HDIL months. All efforts are made to has reconstituted the EAC to spoke on a ‘silent fiscal crisis’ economic growth, manufactur- that needs to be invested in gov- stops all activities in the bank sure in the real estate sector, par- was taken to the bankruptcy remove the restrictions by recti- the Prime Minister (EAC-PM) — highlighting the stark dif- ing, and infrastructure. None of ernment securities. CRR is the with the purpose of saving ticularly in case of HDIL, which code by the lenders, PMC bank fying the irregularities.” for a period of two years, with ference between the FY19 its work has been made public. share of deposits that needs to depositor’s interest,” said a sen- is in bankruptcy. RBI on Tuesday drew two pay-orders on August However, the RBI is probing be maintained in cash. ior RBI official. imposed with- 31 totaling ~96.5 crore for HDIL the role of Thomas in the alleged These are considered liquid The only drawal limit of just promoter Sarang R Wadhawan irregularities. The RBI is inves- assets that can be utilised to intriguing point PMC Bank had a ~1,000 from each to repay non-convertible tigating if there is wrongdoing immediately pay back deposi- here is that gener- business of account for the debentures of HDIL invested on the part of anybody. “The Bank slippages to remain high: ICRA tors at least ~2,555 crore for a ally such instruc- ~20,000 crore, next six months. by Bank of India. administrator will now verify deposit base of ~11,617 crore as tions come after comprising This has led to Thomas said this was done and validate the position of the BS REPORTER FY19”, said ICRA. assets, which will leave these on March this year. the inspection of deposits of chaos outside the to safeguard PMC Bank’s own bank and will take a call as what Mumbai, 25 September In Q1FY20, fresh gross slip- PSBs with poor profitability and As for how long before the bank is com- ~11,617 crore and bank branches as interest as HDIL being in the has to be done,” said a source. pages stood at ~85,643 crore a meager return on equity (RoE) depositors can withdraw their pleted. The bank’s advances worth panic stricken bankruptcy court would mean The multi-state-cooperative Due to stress emerging from the as compared to ~77,784 crore of less than 1 per cent. money from the bank, Bhoria inspection for the ~8,383 crore, depositors try to its assets would be attached by bank had gross NPAs of 3.76 per real estate, micro, small and in Q4FY19 and ~94,756 crore On the other hand, the pri- said was left to the RBI to decide. last financial year at the end of withdraw their other lenders as well. cent and net NPAs of 2.19 per medium enterprises (MSMEs), in Q1FY19. The rise in slip- vate banks, due to higher cred- It could be well before six has not yet started. March this year deposits. PMC Bank had a business of cent at the end of March this the non-banking space and also pages in Q1FY20 from last it cost in FY20, will see muted months — the period of restric- The bank’s man- Bhoria told ~20,000 crore, comprising year. It has 137 branches. The on the retail front, the gross slip- quarter of FY19 was driven by RoE at 9-10 per cent. tion imposed by the RBI — or it aging director and Business Standard deposits of ~11,617 crore and RBI said the directions should page of the banks in FY20 will increased slippages in the Moreover, after the merger could drag on, depending on the CEO Joy Thomas told cus- that the immediate priority of advances worth ~8,383 crore, at not be construed as cancellation be at an elevated level at MSME sector and the season- of banks announced by gov- complexity of the case. tomers in a message that the the bank will be to ensure the end of March this year. of the banking licence. ~2.8 trillion to ~3.2 trillion, rating al spike witnessed in agricul- ernment and the recapitalisa- Sources said the inspection bank management had point- smooth withdrawal of whatever Joy Thomas, managing “The bank will continue to agency ICRA said in its outlook tural segment during Q1. tion of PSBs, ICRA says, “The would be completed in about ed out certain irregularities in limit the RBI allows from time to director, PMC Bank, in a mes- undertake banking business for banking sector. The rating agency also fore- net Non Performing Assets two weeks. Even as there was the bank to the RBI. time. But hopefully, the depos- sage to customer said: “I regret with restrictions till further “Gross slippages are esti- casted weak return on assets (NPAs) levels are expected to be widespread criticism of the RBI However, in an interview itors would be paid back con- to inform you that your PMC notice/instructions. The RBI mated to remain elevated at (RoA) for public sector banks below 6 per cent by March 2020 action, officials said the central with CNBC TV18, he said the sidering the assets of the banks. Bank has been put under regu- may consider modifications of 3.2-3.6 per cent of standard (PSBs) in FY20 as most of their for all the banks, while keeping bank would have to step in at RBI action was “harsh”. The Thomas told in the television latory restriction by the RBI for these directions depending advances during FY20 as com- operating profits will be con- their capital levels above the some point if there were irregu- bank had sought two months’ interview that loans were given a period of six months due to upon circumstances,” it added. pared to 3.9 per cent during sumed in provisioning for bad regulatory requirements”. 8 ISSUES AND INSIGHTS MUMBAI | THURSDAY 26 SEPTEMBER 2019 >

> instance it so transpired that the same CHINESE WHISPERS investigation report was inspected in When the regulator is the violator two parallel proceedings only to find that the report that was provided in one Ring-fencing Priyanka? of the proceedings had blanked out Given the sad state of Obedience of court rulings vital for ease of doing business the regulator would lead no reasonable every finding of exoneration by the its organisational man to concluding that there is a vio- investigation team. structure in Uttar plied with attendant obligations. has been visited with costs. In any case, lation, that is the process by which the Likewise, despite superior courts Pradesh and The tragedy in the case is that the there is no metric to measure insubor- truth is arrived at. Yet, in practice, even having clearly declared the law, the the evident Supreme Court ruling had been ren- dination of judicial rulings, in the in this day and age, a clear and fair authority below can keep reiterating its factionalism, even dered way back in 2008. The court had course of performance appraisal of reg- inspection of the entire record contin- stance, blithely arguing that the deci- the most diehard ruled that a minor who is incapable ulatory officials. In fact, most senior ues to be denied. sion has been appealed against. The Congressmen seem under law to contract cannot be held management of regulators do not have On a case by case basis, depending Supreme Court has often ruled that despondent about liable for violation of securities regula- performance appraisal at all. on the degree of aggression or timidity such an approach is abhorrent, but with the party’s chances in the bypolls to the tions governing public issue of securi- Regulatory authorities — them- of the person accused of violation, no one having to face any consequence 11 Assembly seats scheduled for next ties. Yet, nearly a decade later, in 2017, selves mini-states with legislative, exec- courts have to be approached to get for unleashing such chaos, the rulings month. Interestingly, senior Congress the Sebi issued a show-cause notice to utive and quasi-judicial power all rolled access to the basic material on record remain mere exhortations. When the leaders have already started the process another minor — this time for alleged into one — tend to be the worst offend- during an inspection process. A sweep- law is declared by a higher court with of ring-fencing the party’s general WITHOUT CONTEMPT violation of the takeover regulations. ers when it comes to judicial indisci- ing rejection of any request for inspec- its interpretation, society is entitled to secretary in-charge of eastern UP, SOMASEKHAR SUNDARESAN That tells a story of judicial indiscipline pline. Despite the law being declared tion remains par for the course. A stellar arrange its affairs in a manner that is Priyanka Gandhi Vadra (pictured), from — of not adhering to the law declared by courts, trenchant judicial indisci- exception to the rule is the Competition consistent with known compliance. any negative publicity following by the last court of the land. pline abound. A simple example is the Commission of India, which has even Yet, when regulators violate the inter- expected poll reverses. They have refuted he Securities Appellate Courts in India are liberal when denial of inspection of the record to a codified a standard operating proce- pretation laid down by the superior the possibility of Priyanka campaigning Tribunal has ruled that a minor faced with breach of judicial discipline. person accused of violating the regula- dure for conducting a file inspection. courts, society gets fearful — not of the for these polls, saying "national" leaders T cannot be held liable for not Judgements tend to use verbiage in tions. Courts have time and again ruled Other regulators, such as the capital law but of the law enforcer. do not canvass for "local" elections. This, making an open offer under the being critical and in issuing strictures that full inspection of the material on market regulator, are known to demon- The Ease of Doing Business rank- however, stands in contradiction to her takeover regulations. This is not a to scold lower courts and regulatory record — not just material used to level strate an arbitrary variance in the ings can never model for this kind of spirited sit-in to highlight the unique juvenile justice moment in the authorities who violate judicial disci- the accusations but also material that approach of different officers and dif- unease with conduct of business in any Sonbhadra massacre case and her much securities market. The tribunal simply pline by not following the precedents would undermine the allegations — ferent whole-time members in how jurisdiction. It is only when state agen- publicised statement that she would reminded the Securities and Exchange and the law declared by higher courts. must be provided. they would enable inspection. cies see value in the rule of law that continue to highlight people’s issues Board of India (Sebi) of the law Rarely does that translate into anything When a regulator accuses you of vio- When courts are approached, the they would be able to attract real under the “anti-people” and “anti- declared by the Supreme Court in of consequence for a serious disincen- lating the law, the regulator must not regulator is prone to argue that the investment into business without hav- poor” Adityanath dispensation. another case involving securities reg- tive to the authorities below to ignore just tell you what it has against you, but investigation material entails a lot of ing to tout the rankings that a statisti- ulation, and reiterated that the Sebi the law declared by higher courts. Some must also give you access to all the confidential information that cannot cal model throws up. must not act against minors in whose judges impose costs on state agencies, material so that you are able to use it to be shared. Courts could then direct that War of words names majors would have engaged in while other judges tend to promptly undermine the accusations. If one can the report be provided with “sensitive” The author is an advocate and independent The Bharatiya Janata Party (BJP) was securities transactions and not com- admit challenges when a state agency show that the material available with portions being blanked out. In one counsel. Tweets @SomasekharS upbeat after Delhi Chief Minister Arvind Kejriwal on Wednesday said BJP state unit chief Manoj Tiwari will be the first to leave the national capital if the National Register of Citizens (NRC) is implemented in Delhi. Tiwari, a second-term Lok Sabha member from Delhi, hit back saying the External benchmarks: A tough one for banks remark exposed Kejriwal's "real face" and alleged that the Aam Aadmi Party (AAP) The RBI’s diktat on retail and MSME loans adds a layer of complexity One of the key changes that banks chief wants to evict migrants such as STANDARD DEVIATIONS may have to make is how they price 'purvanchalis'. The term 'purvanchalis' their deposits. Floating rate deposit denotes people from eastern Uttar Pradesh JOYDEEP GHOSH Sabnavi says banks are likely to face rates on fixed deposits to keep their (Why banks could find external rates are ideal, but with rates on some and Bihar, and over the last couple of a tough time from a commercial bank- NIM stable.” benchmarking a challenge) products of National Savings Schemes decades they’ve become a significant part he Reserve Bank of India’s ing perspective as they have to bench- According to Thorat, the one-year | Contrarian rate fluctuations of as high as 8.6 (Sukanya Samridhi of Delhi's electorate. Tiwari, a Bhojpuri (RBI’s) decision to link all float- mark a part of their assets to an anchor deposit rates of banks is closely corre- Yojana), they fear losing depositors in actor and singer, alleged that Kejriwal benchmarked instruments T ing rate retail loans and micro, while not being allowed to do so on lated to some FBIL benchmarks – the bank fixed deposits. "wants to remove people from Bengal, small and medium-scale enterprises the liabilities’ side. Rating agency 364-day T Bill rate or one-year G-Sec | Asset-liability mismatch The State Bank of India and 14 oth- Punjab, Madhya Pradesh, Haryana and (MSMEs) from October 1 comes after Moody’s Investor Services has already yield or even the one-year OIS Competition will force banks er public sector banks have already other states in Delhi". Assembly elections several attempts in the past — from warned that the move would be credit (overnight index swap) rate. “Hence, not to lower deposit rates announced products linked to the repo are due in Delhi in February. Meanwhile, prime lending rate to marginal cost of negative for banks, causing volatility banks could link their floating rate rate. In the SBI's home loan product, the Congress continued to struggle to pick funds (MCLR) — to ensure smooth in net interest margins (NIMs). “With loans to an appropriate one-year | Volatility in net interest margins the loan amount will be divided equal- its state unit chief. With Ajay Maken ruling transmission of interest rates cuts NIMs rising when interest rates rise benchmark to manage the asset-liabil- | Three-month reset and three- ly across the tenure, and the equated himself out, speculation is former Lok failed. Now, all banks have to link the and falling when rates fall, the move ity mismatch. The three-month reset year benchmark lock-in could monthly instalment will be high ini- Sabha member Sandeep Dikshit could be lending rates to one of these four — the will translate into volatility in the over- specified by the RBI could, however, restrict banks’ flexibility tially and reduce as the number of in contention. Dikshit, son of Sheila RBI policy repo rate, govern- all profitability of banks. It pose challenges and it may be better to years increase. Dikshit, met Congress President Sonia ment of India three- or six- is not clear if banks will be leave the choice of reset to the individ- But the key would be spreads. “It Gandhi on Wednesday. month Treasury bill yields able to mitigate this risk by ual banks. Some banks may have con- CASA. In the case of private banks, some will be an interesting development for or any other benchmark linking the interest rates on centration of liabilities in the five- year even flouted apex bank guidelines by banks as they have to carefully choose market interest rate pub- current account, savings segment and may prefer to reset their having multiple rates instead of one their spreads over the chosen bench- lished by the Financial account (or CASA) deposits floating rate interests at longer intervals MCLR across products. This was done mark as this cannot change for three Will he, won’t he Benchmarks India (FBIL). to an external benchmark. — as, I believe, State Bank of India (SBI) by using different operating costs for dif- years,” says Sabnavis. The Congress has planned padyatras How workable is this pro- With interest rates already is asking for,” Thorat adds. ferent loan products. He offers an example. If on October across the country on October 2 to mark posal? TAKE low on these deposits, a Patel’s abrupt resignation came as a 1, a bank benchmarks home loans to, the birth anniversary of Mahatma Says Madan Sabnavis, TWO bank is unlikely to want The backstory partial relief for banks. In April’s say, 200 bps over the repo rate of 5.4 Gandhi. Congress leader Rahul Gandhi, chief economist, Care ANALYSIS BEHIND them any lower as it will In fact, the implementation of this rule Monetary Policy, the central bank stated per cent, the basic lending rate would who has kept himself away from political Ratings: “From a regulatory THE HEADLINES risk losing customers.” has been delayed by a good six months. that “further consultations will be held be 7.4 per cent. Now, in the first week work after the Lok Sabha poll debacle, is perspective it is an ideal way Former RBI Deputy In December 2018, under former RBI with stakeholders to work out an effective of October, if the RBI lowers the rate likely to be in Maharashtra's Wardha to to ensure that transmission Governor and Chairperson Governor Urjit Patel, it had been man- mechanism for transmission of rates”. by say 25 bps, the lending rate would lead the padyatra. The Mahatma set up of repo rate changes takes place on the of FBIL, Usha Thorat says: “Currently, dated that the shift would take place Then came the economic slow- automatically come down to 7.15 per his ashram in Sevagram, a village in lending side. However, there was an banks price loans based largely on the from April 1, 2019. The decision came down. And the Finance Minister and cent and there would be a hit on the Wardha, in 1936 and remained there until anomaly the last time when the RBI cost of their deposits. CASA constitutes after a rather damning report by the cen- Prime Minister started asking banks to books. “Therefore, arriving at the right his death. There was apprehension in the lowered the repo rate to 5.4 per cent. about 40 per cent of their liabilities and tral bank’s internal committee led by pass on rate cut benefits. After all, since spread to protect the profit and loss Congress that Rahul Gandhi might not One indicator, the 10-year Government are not interest rate sensitive. Fixed Janak Raj. The committee studied four Shaktikanta Das took over in January, account will be critical for banks and campaign for the party at all for the Security (G-Sec), if it had been used as deposits constitute about 50-70 per major banks (two public and two private) the repo rate had been cut by 110 basis they also have to anticipate how many upcoming Assembly polls in Maharashtra a benchmark, would have gone con- cent. The average maturity of these and found that one major public sector points. But there were not significant more rate cuts would be there during and Haryana. However, his decision to trary to the direction of the repo rate deposits is between one year and 18 bank decided on the MCLR rate, based cuts from banks. The RBI finally bit the the year while fixing the same,” lead the padyatra has made leaders change as it has increased over the two months. Hence, to manage their asset- on card rates of retail term deposits of bullet earlier this month. adds Sabnavis. hopeful that he might decide to begin his month period by 20-30 basis points liability management (ALM), banks seven days to one year. It fully ignored In other words, the Indian banking election campaign with the padyatra. (bps).” prefer to link loan rates to their deposit the cheaper resources collected under The way forward business just got more complex.

INSIGHT > LETTERS

Bold move it can rule independent of the interest Competition is good Reform and Modi’s gift of timing of the government of the day, some- thing judiciaries in other democracies Your editorial, "The private train mirage" Commission — not unimportant but better job of implementation — but can emulate. Its unanimous ruling (September 25), does well to point out not big bang. Like his first full term without it the deep corporate tax rate that the prorogation of the British the pitfalls in the proposal to introduce as CM of Gujarat, Modi’s first term as cut, which is a fundamental struc- Parliament by Prime Minister Boris privately-run trains under the overall PM of India was about learning and tural reform of the economy, would Johnson was unlawful, upheld the scheme of public private partnerships. consolidation of political power. It’s never have seen the light of day. Parliament’s sovereignty and its But permit me to disagree with your in the second term that he pushes the Critics of the Modi government are supremacy over the government. thinking that the “idea is fundamentally accelerator. Hence his description of wrong when they say that the eco- It was a ruling that is relevant and flawed”. I think it is a brilliant idea that what has happened so far as only a nomic slowdown has been caused by applicable to our own country as its deserves serious consideration. Time trailer of the presumably action- this government. The truth is that the Parliament is modelled on the British has come for such out-of-the-box think- packed film to follow. slowdown began in 2011-12 by when system. The UK top court made it clear ing if we want to modernise rail travel Cut back to the first term. Modi did the dividends of the Rao/Vajpayee that if the ruling vindicated the oppo- in India. DHIRAJ NAYAR take a step towards what could be reforms had greatly diminished and sition’s stand on the prorogation of the Of course, you have made a crucial called big bang reform when he tried the consequences of a sustained glob- Parliament and benefitted it in the point when you talk about the need to to amend UPA’s awfully restrictive al slowdown became apparent. The political tussle to get the upper hand, reform Indian Railways and the Railway land acquisition law. He took flak for lack of substantive reform between it was only incidental to its establish- Board. The two will definitely need to be here is a pattern in Prime stepping back when Rahul Gandhi tar- 2004 and 2011 was biting and the ing the illegality of the prorogation. separated, their umbilical cord has to be Minister Narendra Modi, the geted him with the “suit-boot” jibe. A nasty side effects of almost double- Finance Minister Nirmala Sitharaman The real intent for prorogation was cut. The Railway Board must assume the T reformer. And there is a canny politician, Modi would have digit growth in the form of corruption (pictured) deserves to be congratulated to stymie parliamentary scrutiny at role of a regulator and allow both the method. Only the truly naïve would been acutely aware that one of the rea- and cronyism was causing a fever. for the two significant tax reforms the crucial stage of negotiations of the Indian Railways and the private compa- believe that economics and not poli- sons for the defeat of the only previous Modi’s disruptions did not aid recently. The first one being slashing deal for Brexit. Despite a string of polit- nies to run trains on a level playing field. tics would come first for the most tal- BJP-led government was because the growth — a simpler GST might have of corporate tax from 30 per cent to 22 ical and legal setbacks like losing par- That done, there should be no problem ented and successful Indian politi- Opposition had successfully painted — but they played their part in per cent that will enthuse the indus- liamentary majority and receiving allowing private sector entry in this cian in several decades. The Prime it as a pro-business and pro-rich gov- cleansing the economy and changing trial community to bring in capital court strictures for preventing the important public mobility sector. Just Minister has the right instincts on ernment because of its liberal eco- public perceptions. Now, the jibe of investment. The second being the Parliament from doing its job and because of the need for this major economics. His long track record in nomic policies. Remember also, that suit-boot will not stick. The bold cor- most unique tax reform, never heard attracting the charge of stifling democ- reform, let’s not throw the baby out with Gujarat and his speeches since he in 2014-15, the public perception of porate tax reforms can be followed of in any economy in the world — that racy, Johnson declared that the ruling the bath water. became the prime ministerial candi- India’s private sector was dominated with other structural reforms like the is, any new company desirous of start- — with which he strongly disagreed Public and private companies have date of the BJP in 2013 lay out his by crony capitalism. Politically, the privatisation of public sector compa- ing a new business after October 1, and termed a serious mistake — would coexisted in power, telecommunications, vision quite clearly: Get the govern- timing was not right for aggressive nies. Again, there will be a method. 2019, and commencing production not deter him from delivering Brexit mining, aviation and other sectors. Why ment out of areas where it is a hin- market reform. Air India, the sickest PSU may be before March 2023, will pay only 15 per on the October 31 deadline. not in rail travel? Competition will do drance, in business activity for exam- For the rest of his first term, Modi offloaded first. Some of the more cent corporate tax. This will certainly There is now considerable uncer- good to the sector. ple and strengthen government in followed a two-pronged approach to profitable PSUs, like in the oil and give a boost to any new entrepreneur tainty over Brexit. The Labour Party’s Krishan Kalra Gurugram spheres where it needs to deliver, in economic policy. First, to decisively resources sector, may be divested by to set up a new unit and avail of the stand is that Johnson has no mandate welfare for example. A vision is not, act against crony capitalism, black reducing the government’s stake to tax benefits. This major tax incentive for a no-deal Brexit and the crisis can Letters can be mailed, faxed or e-mailed to: and cannot be, entirely implemented money and corruption in order to 49 per cent while having a diversified is likely to attract foreign investors to be settled only by a general election. The Editor, Business Standard in one quarter or even four, not in a shore up the legitimacy of a private public ownership for the remainder. invest in new ventures in India. In fact, London must get an extension from Nehru House, 4 Bahadur Shah Zafar Marg complex democracy with competing sector-led economy. And second, to Land and labour reform will come, Petronet LNG has already evinced Brussels to avert the risk of its crashing New Delhi 110 002 Fax: (011) 23720201 · E-mail: [email protected] interests. When the history of his rise ensure efficient delivery of welfare to but given the politics, it may come in interest with a strategic investment of out of EU without a deal. All letters must have a postal address and telephone and tenure in government is written, the most marginalised so that they the form of pilot experiments in some $2.15 billion in Tellurian US LNG. G David Milton Maruthancode number perhaps what will stand out is Modi’s became active stakeholders and sup- BJP-ruled states. There has been a significant rise in the genius in timing. porters of his broader vision to Of course, welfare is not going to share market as well. > Those who have observed Modi’s change India. The latter is now disappear. It should not. Market The finance minister definitely HAMBONE track record should not be surprised viewed by conventional wisdom as reforms can only succeed if the deserves to be complimented for her that he has started his second term in one of the main reasons he won an system is perceived as fair. Modi bold and innovative tax reforms in the office as PM with two big bangs — the even bigger majority in 2019. The for- may yet succeed at doing what no country that will certainly revive the abrogation of Article 370 and a deep mer is often criticised for the disrup- Indian PM has before — subsuming economy and spur growth in the cut in corporate tax rates. Contrast tion it caused to the economy good economics into successful pol- remaining quarters of this fiscal year. these four months with the corre- (whether demonetisation or GST or itics but not by textbook and in his Satish Murdeshwar Pune sponding four months in 2014. Then, the Insolvency and Bankruptcy Code) own time. the biggest bang was the announce- — and indeed the administrative Lessons from Britain ment to abolish the Planning machinery could have done a much The author is chief economist, Vedanta The UK Supreme Court has shown that OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM ILLUSTRATION: BINAY SINHA Volume XXIV Number 31 MUMBAI | THURSDAY, 26 SEPTEMBER 2019

Strengthen cooperative banks RBI and govt should not waste the PMC crisis he Reserve Bank of India (RBI) on Tuesday placed the Punjab and Maharashtra Co-operative Bank (PMC) under “directions”. Consequently, cash withdrawals have been capped at ~1,000 per Taccount for six months, and the bank will not be able to extend credit, take fresh deposits or make any payment. Predictably, the decision has resulted in panic among depositors. While the details on why the banking regulator was forced to put such restrictions are still sketchy, the resolution of cases pending with NCLT is needed. At issue is reportedly related to the bank’s exposure to Housing Development this stage it appears as if the Insolvency and Bankruptcy Code and Insolvency and Bankruptcy & Infrastructure (HDIL). The company has been admitted by the National Board of India may become irrelevant much in the Company Law Tribunal for insolvency proceedings, though it has been same way as the SARFAESI Act of 2002 and corre- challenged by the realty firm. There are differences between the auditor sponding debt tribunals. and the regulator in terms of treatment of loans extended to HDIL. There Government could raise resources, from foreign could also be issues related to governance as the bank and HDIL have had Economic shudders and domestic sources, by reducing its equity holdings links in the past. The collapse of PMC appears to have been sudden and is in LIC and Coal India to around 60 per cent. Air India, MTNL and BSNL continue to suck up resources and it shrouded in mystery, and things will become clear once the regulator is high time the government reduced its equity shares completes the examination. At the end of the last financial year, PMC in these entities, preferably by attracting foreign invest- declared a net profit of about ~100 crore with deposits over ~11,000 crore. & revival strategies ment. If funds are accessed only from domestic At the net level, non-performing asset was at a modest 2.19 per cent. sources, financing support could be drawn away from The regulator and the government would do well to re-evaluate the Discarding attention-grabbing slogans, the government needs other local investments. importance of cooperative banks in the current financial landscape to On September 20, 2019, government announced to aim for real GDP growth of 8 per cent and higher significant reductions in corporate tax rates. This mea- avoid recurrence of such an incident. According to the RBI, at the end of sure could boost demand but with a lag if companies the last financial year, India had a total of 1,542 urban cooperative banks, he central government ought to be red-faced mentions that the rupee’s REER is overvalued by 24.6 pass on higher retained earnings to employees and of which 26 were under directions of the regulator and 46 had a negative about the 5 per cent GDP growth rate for the first per cent against a basket of six currencies. It is strange reduce prices. Domestic and foreign investments could net worth. There have been delays in adoption of core banking solution Tquarter of 2019-20. In 2014, the Bharatiya Janata that the RBI governor prefers to quote the IMF report increase over time if the lower tax rates are competitive in some cases because of a lack of expertise and capital. Governance is a Party-led government had inherited public sector banks on the rupee exchange rate. in comparison to alternative investment destinations. real issue in many of these banks. It doesn’t help that they are regulated (PSBs) weighed down with non-performing assets. On Higher lending by Indian banks and non-banking The downside though is immediate since government the positive side, international oil prices have been at finance companies (NBFCs) would help revive domestic may lose up to about ~1.4 trillion ($20 billion) of revenue by both the RBI and the Registrar of Cooperative Societies of the state relative lows and domestic inflation has been muted demand. However, Indian financial institutions are during 2019-20, and the centre’s fiscal deficit could concerned. Further, there are issues related to capital. Urban cooperative for the past few years. Partisan supporters of the gov- hesitant to push up lending. Lenders are circumspect rise well over 4 per cent of GDP leading to higher inter- banks cannot raise capital through a public issue or issue shares at a pre- ernment explain away the slowdown through unso- because defaulting borrowers are managing to retain est rates. The GST Council has done its bit to revive mium. They also face difficulties in meeting short-term liquidity require- licited Whatsapp messages, which gush that India’s 5 assets pledged as collateral at the time of borrowing, “animal spirits” and has reduced GST rates on hotel ment because not all can directly access RBI’s liquidity support. per cent growth is high compared to growth rates in although others have bid for such assets through trans- accommodation and that should have a positive Cooperative banks fail often because of their small capital base — for developed countries. Such growth rate comparisons parent processes. The February 12, 2018, RBI circular impact on tourism. with G7 countries are irrelevant as most Indians do not had prescribed that lenders have to recognise default In the first four months of 2019-20, about $5.8 billion example, urban cooperative banks can start with a capital base of ~25 lakh have access to the social, health and as soon as it happens and borrowers left India under the liberalised remittance scheme compared to ~100 crore for small finance banks. Also, such banks are unemployment benefits provided in had 180 days to resolve matters with (LRS), and during 2014-19 the total amount remitted hijacked by vested political interests. developed countries. lenders before the latter were obliged abroad amounted to $45 billion. The comparable To be sure, cooperative banks played an important role in the past, The stark reality is that rural and to take the matter to a National amount for 2009-14 was much lower at $5.5 billion. including in the colonial period, but their relevance has declined with urban demand has slumped in India. Company Law Tribunal (NCLT). By contrast, inward foreign direct investment has risen the spread of scheduled commercial banks and adoption of technology in Among many factors this is due to Borrowers need to be in touch with and amounted to $42 billion in 2018, according to what I would call a triple balance sheet lenders well before default happens UNCTAD’s World Investment Report 2019. However, recent years. Given their lack of expertise and capital, it will be difficult problem. The twin balance sheet to extend repayment deadlines or look the sizeable LRS outward remittances should be a mat- for these banks to compete with other financial institutions. Therefore, it problem (Economic Survey 2016-17) for bridge loans from other sources. ter of concern. is important to carry out a comprehensive review and make changes in afflicting major private sector borrow- In this context, the quashing of the To conclude, there is an unreal air to the way gov- the law to give more power to the RBI in terms of regulation, mergers, and ers and lenders was caused by irre- February RBI circular by the Supreme ernment has harped about a $5 trillion Indian economy conversion of some entities into commercial or small finance banks. This sponsibly high loan disbursals during JAIMINI BHAGWATI Court on April 2, 2019, was a monu- by 2024, which diverts attention from the urgent need 2008-12. The third balance sheet mental blunder. The RBI and govern- to raise domestic and foreign demand for Indian goods will allow them to raise capital and attract talent. In the absence of policy belongs to those who purchase cars, ment should have jointly pleaded in and services. A few months back a senior Ministry of initiatives, these banks would increasingly become more vulnerable. scooters, consumer goods and services using their cred- support of this circular. Apologists for recalcitrant bor- Finance official demonstrated his lack of understand- it/debit cards for payment through equated monthly rowers suggest that they be allowed to retain their assets ing by suggesting that if the Indian rupee were to instalments (EMIs). Many among these demand groups and helped by lenders to recover. Limited liability leg- appreciate, India could easily reach the $5 trillion goal. are unwilling to increase their EMI payments because islation allows promoters to retain personal wealth and Discarding attention-grabbing slogans government earnings shocks caused by demonetisation and slower only what was pledged can be attached by lenders. needs to aim for real GDP growth of 8 per cent and The balancing act than expected disbursal of GST refunds have persisted. The government seems to have reverted to expect- higher annually in rupee terms, which is a tried and An important factor constraining foreign demand ing PSBs to show infinite patience and in practice this tested way for India to raise employment and reduce Privacy on social media must be protected for Indian products has been the significant overvalu- often results in collusion with large borrowers. The poverty. ation of the rupee. On September 19, 2019, the RBI gov- remedies go back to proposals including one made by two-member bench of the Supreme Court on Tuesday asked the Centre ernor citing a July 2019 IMF report commented that the Banks Board Bureau for board members of public The writer is former Ambassador, senior Ministry of Finance to frame rules for the moderation of social media and to file an affidavit the rupee’s real effective exchange rate (REER) is close sector banks to be chosen for their domain knowledge official and World Bank Treasury specialist; detailing the same within three weeks. The observation was in con- to its correct value. An RBI report again dated July 2019 and unimpeachable integrity. Additionally, speedier [email protected] Anection with the transfer of various cases pertaining to the linking of Aadhaar with social media accounts. In effect, this would imply that the identity of every Indian social media user would be available to the government. Even otherwise, the government had been attempting to force major social media plat- forms to provide methods for content to be traced to the originating accounts. Economic recovery will be slow in coming While the court directed the government to maintain a balance between impinging on the privacy of individuals using social media and offering redress he cut in the corporate tax rate is seen as the nificantly for several reasons. One, private consump- worthiness of firms. Any increase in government bond boldest of the barrage of measures unleashed tion is faltering. Two, banks will be wary of increasing yields on account of a higher fiscal deficit could be to victims of trolling, it is hard to see how this would be possible under the existing Tby Finance Minister Nirmala Sitharaman. It has exposure to corporate groups with whom they still contained through a modest sovereign bond issue. technology. If the option of anonymity is removed, so is privacy, since social sent the stock market soaring. There are expectations have to resolve bad loans. Three, despite announce- The sector-specific measures announced in instal- media content is, by its very nature, public, or at least visible to many people. that an internationally competitive corporate tax rate ments of infusion of capital, many public sector banks ments earlier are a mixed bag. Some of these (such as Social media accounts are indeed often used to troll individuals. These platforms will boost investment in the economy, both foreign lack capital to increase lending significantly. At least the mergers of public sector banks) are of little rele- can also be employed for the rapid dissemination of fake news and damaging and domestic, and lead to a massive creation of jobs for a year or two, corporate investment will be clouded vance to the present slowdown. Others (such as timely rumours. The flip-side of the story is that social media is a powerful tool for and incomes. Such expectations need to be tempered by uncertainty. refunds of GST to MSMEs and expediting payments by a dash of realism. The one thing that is certain is that the fiscal deficit due to them from the government) will help if imple- whistle blowers and it has often been the channel by which criminal activity has Let’s take foreign direct investment (FDI) first. will end up higher than the target 3.3 per cent for mented rigorously. The measures to boost exports been first uncovered, or brought to public notice. Countless individuals, corpora- There is little to suggest that FDI has been held back 2019-20 — perhaps closer to 3.8 per cent after factoring are among the most promising. The special fund for tions, civil servants and politicians have been embarrassed by revelations of their by the higher tax rate that obtained in various other effects including the last-mile funding for certain categories of housing wrongdoing on social media. thus far. Gross FDI flows into India RBI’s transfer of surplus. The finance projects will not make much of a dent on the large It is also a powerful platform for expressing dissenting political opinions, rose from $28 billion in 2013 to $42 minister has dispelled any expectation number of unfinished housing projects. and coordinating protests against unjust laws. Every mass movement of the last billion in 2018, according to that the estimated revenue loss would The critical issue is the disruption of credit hitherto UNCTAD’s World Investment be offset by a cut in government provided by non-banking finance companies decade, from the first Arab Spring protests in Tunisia, to the recent protests in Report, 2019, despite India’s tax rate spending. Analysts who were cheering (NBFCs). The government has proposed that public Hong Kong and the ongoing battle against climate change, has been enabled by being uncompetitive. the government for announcing sec- sector banks (PSBs) co-originate loans with NBFCs. the existence of social media. All this would not have been possible without the More crucially, the bigger chunk tor-specific measures while refraining One is not sure how this will work on the ground. capacity of social media users to remain anonymous and yet be heard. Indeed, of FDI flows in the world, 63 per from providing any fiscal stimulus will NBFCs can pass on potential clients to PSBs for a fee. the protests in Hong Kong have featured a fascinating technological battle between cent of the total, tends to be in the be disappointed. This will ensure flow of credit to particular segments protesters striving to maintain anonymity and a regime doing whatever it can to form of mergers or acquisitions The government clearly believes but it does little to improve the financial health of (brownfield investment) rather that the slowdown is serious enough NBFCs. A better option is for PSBs and NBFCs to co- uncover the identity of activists. Every undemocratic regime in the world would than greenfield investment. It’s FINGER ON to warrant a fiscal stimulus in addition finance loans. This will ensure flow of credit while like social media to lose its veil of privacy. Many have banned platforms that greenfield investment, not the THE PULSE to the ongoing monetary stimulus. The also improving the health of NBFCs. But PSBs have allow for privacy precisely due to fears that these may be used to express dissent, brownfield variety, that can provide question is whether the cut in the cor- no incentive to opt for this course except in cases or throw a light on repressive actions. India, for example, has faced flak for shutting a big impetus to jobs and incomes. T T RAM MOHAN porate tax rate is the best way of pro- where they have exposures to NBFCs. down the Internet in Kashmir, with activists alleging that this gives security forces In India, brownfield investment is viding a fiscal stimulus at this point. Neither the tax cut nor the sector-specific mea- a free hand to indulge in abuse and excessive use of force. even more dominant than in the Why not through an increase in gov- sures will change the near-term growth outlook dra- world as a whole: In 2018, it constituted 78 per cent of ernment capital expenditure? Perhaps this does not matically. Indian firms, especially small firms, are It may be argued that the benefits to society from protecting the privacy of total FDI. The idea that, following the tax cut, a wave fit in with the government’s thinking, reflected in the going through a process of considerable adjustment individuals using social media far exceed the ills that arise from the dissemination of FDI will dramatically lift jobs and incomes is rather last Economic Survey, that private investment alone consequent to demonetisation and the introduction of fake news. Moreover, privacy is a fundamental right as the Supreme Court misplaced. can be the primary driver of growth. The government of GST. Bad loans in the banking system declined in affirmed two years ago. There are legitimate fears that any regulation that the The cut in the corporate tax rate will enhance may also have felt that public capital expenditure 2018-19 but remain at a high level of over 9.3 per cent government frames in haste will be flawed, or applied selectively, to harass political domestic corporate savings and could lead on to higher would not crowd in private investment in a situation of advances. Global growth has decelerated. The opposition. Until specific legislation that defends the fundamental right to privacy investment. Analysts have pointed out that the accre- where corporations are constrained by high debt-to- Seventh Pay Commission booster to consumption tion to domestic corporate saving will be less dramatic equity ratios. tapered off in 2018-19. The substantive effect of the is written into law, anything that impinges on that right should not occur. Trolling than the headline numbers suggest. In effective terms, An increase in the fiscal deficit limits the potential measures announced may well be that it improves and the spread of fake news can be contained and committed under existing reg- the tax rate goes down by only four percentage points. for rate cuts by the RBI in the months ahead. The business and market sentiment and sets the stage for ulations by the use of sensible policing. Even on this account, any increase in investment government may well have reckoned that the cuts in strong growth further down the road. will happen only over the long run. In the short run, the policy rate have gone far enough. The issue now Indian firms are unlikely to step up investment sig- is one of transmission of policy rates and the credit- The writer is a professor at IIM Ahmedabad. [email protected]

radicals were reared by the MI5 to make clear how Mr Malik worked with Irshad Manji, the threat from homegrown terror. the religious reformist, to rehabilitate Mr The journalist & the jihadi conman From here, Mr Malik situates his dilem- Butt. The fact that Mr Butt turned out to be ma in the current political climate and a conman does not detract from the very ideology. Malik, who has worked for a num- South Asian, there were cultural similar- refused to reveal anything and even went blames his gullibility on the rise of dema- real work being done in this regard and the ber of British media outlets over the years, ities as well. to court to protect his source. goguery. He presents the world today as need for such work to continue, regardless was keen to interview Hassan Butt, an Al Six months into their association, Mr Even as Mr Malik accommodated Mr reflecting a dialectical schism between the of Mr Malik’s views on the invidiousness of Qaeda-affiliated radical, who as early as Malik received an email from Mr Butt say- Butt’s increasingly wayward demands, the innocent and the un-innocent, with the for- the state and its apparatus. 2002 had claimed that he had recruited ing that he wished to renounce Islamist rest of the story is a cautionary tale of how mer looking the other way as the state Last year, Mr Butt was sentenced to 13 British volunteers to fight for the Taliban. ideology. He said that he had developed he felt deeper into the vortex of a fraud that resorts to every means possible to question years in prison for perpetuating a £ 1 million BOOK REVIEW The book brings out the story of their differences with other ideologues and that ultimately unravelled in 2008 when the and tame the latter. fraud on unsuspecting eBay customers in association. In their first meeting, Mr Butt he had stopped receiving funds from British anti-terror police arrested Mr Butt. This is a rather disingenuous lesson to 2014, an anticlimactic turn of events for VIKRAM JOHRI claimed to have met Mohammad Sidique them. In response, Mr Malik floated to Mr On questioning, Mr Butt revealed that he draw from the protracted, tragic episode. someone who claimed to hobnob with Al Khan, the leader of the group that planned Butt the idea of writing a book that would had never had links with Al Qaeda or any One, 7/7 was indeed planned and executed Qaeda bigwigs. Meanwhile, Mr Malik has n the book under review, Shiv Malik, a and executed the July 2005 bombings. Mr narrate his disenchantment with other extremist organisation. Furthermore, by homegrown terror, one in a series of moved on from journalism. The Messenger corporate communications professional Malik visited Mr Butt’s house in Islamism. He agreed. he had arranged for himself to be stabbed similar attacks that took place in Europe is an engaging and disturbing tale of intel- Iand former investigative journalist, Manchester, a spartan residence that The turning point in the relationship to gain publicity and that the book with Mr over the years that followed. Two, Mr Butt lectual credulity that has deeper roots than recounts the unnerving tale of being seemed to agree with the strict Islamist came when news of the book’s writing Malik was his way of making money. may have played Mr Malik and others and the book’s author would have us believe. conned by a man who claimed to be an doctrine that he espoused. spread in the media and Mr Butt was The question of how Mr Malik was taken may have been prompted by MI5 to do so, Islamist sympathiser with links to terror The journalist-source relationship attacked by an unidentified assailant who, in by Mr Butt’s duplicity is not an easy one to but the threat of Islamic terror remains a organisations. changed into something less formal as the he claimed, belonged to “the network”, that answer. Towards the book’s end, he presents real danger. THE MESSENGER After the 7/7 bombings in London, the meetings progressed. Mr Malik learnt of is, Al Qaeda. Mr Malik became increasingly evidence that Mr Butt may have been work- Finally, Mr Malik’s own interest in the Shiv Malik British media was keen to probe home- Butt’s family, his strained relationship protective of Mr Butt, to the extent that ing for the MI5, Britain’s spy agency, all along. book project stemmed from his desire to grown terror emanating from Muslims born with his father, and the constant need for when the police questioned him about the The logic for this is offered by Mr Malik thus: articulate the story of a reformed jihadi. A Penguin Random House and brought up in Britain turning to Islamist financial security. Since both men are book and his association with Mr Butt, he Mr Butt and a clutch of other British-born significant part of the book is devoted to ~599, 321 pages QUICK TAKE: EXPANSIONS, PROFIT UPTICK TO AID PVR “We should stop usage of The Smart The stock of PVR has gained 17% in the last few the term DII and instead sessions on earnings upgrades following the use DIT. Domestic tax rate cut. This, along with its aggressive Institutional Traders'' MUMBAI | expansion, increasing penetration in the SAMIR ARORA, THURSDAY, 26 SEPTEMBER 2019 southern market, and focus on premium Partner and fund manager, Investor formats, is expected to boost its top line Helios Capital WWW.SMARTINVESTOR.IN FOR INFORMED DECISION MAKING < MARKET PLUNGE BNP rejigs stocks, Profit-booking halts winning run adds Britannia & SBI stock fell over 7% tax cut. Bank of Baroda and Bank of Manappuram India shares fell 6 per cent each. Asian indices fall on on Wednesday, the Both domestic as well as overseas investors were net sellers on move to impeach biggest single-day Wednesday, taking out ~342 crore and decline in four years ~763 crore, respectively. In the previous Trump, trade fears two sessions, institutional investors SAMIE MODAK had been strong buyers after market Asian indices fell on Wednesday, Mumbai, 25 September sentiment changed from bearish to after US Democrats launched bullish following the Centre’s move to formal impeachment proceedings he benchmark indices dropped lower taxes. against US President Donald 1.3 per cent on Wednesday — Last week, the Sensex and Nifty Trump, and on account of renewed Tmirroring the weakness in glob- had dropped to their lowest levels since trade fears as he adopted a hard al markets — after investors booked February. However, with the stellar line on China. House Democratic profits judging recent gains as exces- gains made in three sessions prior to leader Nancy Pelosi announced a sive. Most global indices traded weak Wednesday’s, the Sensex had come formal impeachment inquiry after as investors assessed the potential fall- just 3 per cent away from a new all- the close of US markets. Democrats out of an impeachment inquiry of US time high. accuse Trump of abuse of power in President Donald Trump. US House “We prefer to remain cautious at a reported attempt to pressure the NUPUR ACHARYA investors,” he said by phone. Speaker Nancy Pelosi said a formal higher levels. The indices are trading new president of Ukraine to open a Mumbai, 25 September “It provides confidence that impeachment inquiry would be near peak valuations and sustainabil- corruption investigation into Joe the government is willing to opened on Trump. ings, but a revival in the economy selling witnessed in state-owned ity at this level is essential,” said Ajit Biden — his lead challenger for the A surprise cut in the corpo- do whatever it takes and will The benchmark Sensex ended 504 would take place with a lag. banks,” said S Ranganathan, head of Mishra, vice-president (research), White House— and his son Hunter. ration tax rate will lay the provide equity investors a points or 1.3 per cent lower at 38,594, Most global equities fell by over a research at LKP Securities. Religare Broking. In a recent note, Tokyo’s Nikkei closed down 0.4 groundwork for “second chance to broaden the bas- while the Nifty declined 148 points or per cent, as the political uncertainty The Nifty PSU Bank fell by over 5.6 Edelweiss had said further gains in the per cent, the Shanghai Composite order benefits” to the econ- ket of stocks.” 1.3 per cent to close at 11,440. In the in Washington D.C. added a fresh com- per cent as the crisis at PMC Bank hurt market could be modest as the positive Index slipped 1 per cent, and Hong omy over the next several The surprise tax rate cut previous three sessions, the two plication for investors grappling with investor sentiment and raised fresh impact on the economy could only Kong’s Hang Seng ended 1.3 per months or even years, pro- came after economic growth indices had surged above 8 per cent, rising tensions between the US and fears of spiraling of bad assets on happen with a lag. cent lower. Seoul’s Kospi, too, fell viding a favourable back- in the April-June quarter buoyed by the reduction in corpora- China, and in West Asia. account of the pain in the real estate “The economic response in terms 1.3 per cent and Taiwan’s TAIEX drop for broader stock selec- slumped to its lowest level tion tax rates. Market players said some “Political uncertainty in the US sector. The SBI stock fell 7.7 per cent of investment and consumption will gave up 0.4 per cent, while tion at the same time, in six years, hitting the investors were taking money off the amid impeachment talks pulled — the most among Sensex companies be a tad lagged even as expectations Singapore lost 1.18 per cent. AFP/PTI according to BNP Paribas nation’s smaller stocks the table as the tax cut would boost earn- indices lower. There was heightened — reversing all gains made since the run upfront,” the note said. Securities India. hardest. While the implied The broker- valuations of 10- age has re-bal- The corporation tax 15 Nifty stocks anced its “qual- rate cut came after are still at a pre- ity list” of economic growth in mium to histori- Sebi eases norms for LIC’s private sector portfolio at 16-yr low stocks again, the April-June cal averages, the after having quarter slumped to mid-cap and made adjust- its lowest level in six small-cap registration of FPIs SACHIN P MAMPATTA ~19,512.94 crore was realised as ments a day years, hitting the indices are still Mumbai, 25 September CHANGING LANES: net profit from the sale of equi- before the gov- nation’s smaller below their ASHLEY COUTINHO including those of Mauritius, IN PUBLIC INTEREST ties, government securities and ernment stocks the hardest means, accord- Mumbai, 25 September Cyprus, and West Asian ones The private sector has a lower other securities (including amor- reduced corpo- ing to the BNP such as Abu Dhabi, Dubai, share in the portfolio of Life tisation) taking the total yield to ration tax rates (September Paribas report. Markets regulator Sebi has Kuwait, Oman, and Qatar, to Insurance Corporation of India 8.66 per cent,” according to the 20). Since the tax rate cut, issued a notification for easing invest as FPIs. (LIC) now than at any point FY18 annual report. This time, it added firms mid-cap stocks have jumped the process for on-boarding The erstwhile three cate- since 2003. It accounts for 14.9 “Typically, LIC has support- ranging from large-cap 9 per cent, while small-cap overseas investors. The notifi- gories of FPIs have been per cent of the total invest- ed the divestment programme stocks such as Britannia names have gained 7 per cation says foreign portfolio merged into two. Category I ments, according to numbers of the government from time to Industries to smaller names cent. The benchmark investors (FPIs) are no longer will include central banks, analysed from the Reserve Bank time, and in a bigger way since like Manappuram Finance, Sensex has had climbed 8.3 required to meet the ‘broad- sovereign wealth funds, pen- of India’s Handbook of Statistics 2014. The investments by LIC wrote Abhiram per cent in the last three ses- basing’ criteria, under which sion funds, banks, asset man- on the Indian Economy. do not seem to be driven solely Eleswarapu, head (equity sions before seeing a slump at least 20 investors were agement companies, portfolio The LIC has been reportedly Source: RBI Handbook of Statistics on with the target of efficient allo- research), BNP Paribas on Wednesday. required to establish a fund. managers, and entities from helped by a number of public the Indian Economy cation of capital. It has also been Securities, in a note pub- The gains show that the However, in order to ensure FATF member countries. sector divestments, and banks Note: Data for 2019 is provisional looking at social objectives. lished on September 24. “first round impact” of the the money coming in is clean, Category III has now been such as IDBI, which may have With more stake sales on the “The rally in stocks fol- tax rate cut on company the FPI or underlying investors converted into category II, resulted in a shrinking pool years in a row, to reach its ed in stock exchange securities. anvil, unless the government lowing the tax rate reduction earnings has been factored — contributing a minimum of comprising corporate bodies, available to the private sector. present level. The public sec- It also has a loan book of ~24,909 looks at pure strategic divest- has provided immediate in, according to 25 per cent or identified on the charitable organisations, fam- This is despite the private sector tor’s share in total investments crore. A look at the last available ment, one might well see the money in the hands of Eleswarapu. BLOOMBERG basis of control — should not ily offices, individuals and companies outperforming their is at its third-highest level since annual report shows the insurer private sector’s share in LIC’s be part of the Sanctions List unregulated funds in the form public sector counterparts. liberalisation. The 85.07 per cent has a majority of its investments investment falling further,” said notified by the UN Security of limited partnerships The BSE PSU index has share in 2019 is higher than any in government securities. Deepak Jasani, head of retail IRCTC IPO set to launch on Monday Council, or reside in any coun- and trusts. declined 4.9 per cent in 2019 so year save 2002 (87.15 per cent) “In respect of non-linked research at HDFC Securities. try identified in the public Offshore funds floated by far, while the Sensex has risen and 2003 (87.22 per cent). business, corporation earned The size and parentage of The Indian Railway Catering part of its FY20 disinvestment statement of the Financial Indian fund houses will be per- 8.4 per cent. In fact, the PSU The numbers don’t add up ~1,55,071.90 crore as interest and LIC may mean there is little and Tourism Corporation’s programme. IDBI Capital, SBI Action Task Force (FATF) as mitted to invest in domestic index has underperformed the to exactly 100 per cent, given ~9,768.82 crore as dividend, impact for policyholders, (IRCTC) ~638-crore initial public Capital Markets and YES delinquent. markets under the FPI route, benchmark in 11 out of 16 years. that there are investments in returning a yield of 7.71 per cent according to Swapnil Pawar, offering (IPO) will begin on Securities are handling the Central banks not mem- and be required to obtain reg- The private sector share had the joint and co-operative sec- for the year. The corporation also founder of financial services Monday. The price band for issue. IRCTC is the sole entity bers of the Bank for istration as an FPI within 180 last slipped below 15 per cent in tors included. The two account earned rent of ~455.98 crore on firm Asqi Advisors. the issue is ~315-320 per share. authorised by the Railways to International Settlements (BIS) days from the date of notifica- 2003, when it was 11.68 per cent. for ~1,098 crore in total. The investment property, ~9,576.81 “Most of the investors go in At the top end, it will be valued provide catering services to the will be allowed to register as tion of the norms. It peaked for the subsequent overall investment in LIC stands crore by way of interest on policy with an implicit assumption at ~5,120 crore. Through the railways, online ticketing, and FPIs. This will enable central period in 2010 at 25.72 per cent. at ~26.61 trillion. loans, and ~20.97 crore as interest that LIC itself can’t possibly fail,” IPO, the government is looking packaged drinking water at banks from over 60 countries, More on business-standard.com It has since fallen for nine Of this, ~26.4 trillion is invest- on loan on mortgages. A further he added. to divest 12.6 per cent stake as stations. SAMIE MODAK

THE COMPASS Repo rate-based loans may delay SBI’s profit revival Profitability may HAMSINI KARTHIK The impact of linking home loans to in FY20, they say they aren’t very confi- repo rates could be exacting on SBI’s prof- dent of these estimates. take further hit The State Bank of India stock slumped itability, which was on the road to recov- “Given SBI’s size, it is among the over 7 per cent on concerns over asset ery from the March 2019 quarter. largest lenders to many of these stressed on policy rate quality and the impact on profitability Based on the current repo rate of 5.4 borrowers,” Morgan Stanley points out, cut of 25-40 bps after its move to link all new floating rate per cent, the impact on SBI’s profitability with respect to fresh bad loan accretion. loans to the external benchmark, which, is compressed to 10 basis points (bps). The brokerage is also concerned that in its case, is the repo rate. After the cor- Home loans offered by the bank now start if SBI were asked to help any of the chal- poration tax cut last week, the Street had at 8.1 per cent. However, we are in a lenged lenders when they face distress, brushed aside the impact of SBI’s move declining repo trajectory. it could compound the asset quality pres- to link its retail loans to repo rate. Therefore, if the central bank sure further. However, as the dust settles and announces another rate cut anywhere “We view a re-rating as unlikely, investors assess the actual gains from last between 25 and 40 bps — in October or unless the macro situation were to sta- Friday’s measures, the old problem once later — profitability or net interest margin bilise or improve,” they noted. again surfaces for banks, explaining why (NIM) may take a huge knock. At 3 per Further, the lender has ~16,000 crore the SBI stock fell so sharply and most of cent in the June quarter, numbers have stuck in the recovery process, the receipt the banking stocks were in the red. just about started firming up and looking of which is extremely important to While other banks are yet to make a better. For analysts at Morgan Stanley strengthen its books. similar move, analysts expect them to who have turned ‘equal-weight’ from With these concerns taking centre- follow the leader to defend market share. ‘overweight’ on the SBI stock, asset qual- stage, analysts feel that even if the SBI Home loans account for 18 per cent ity concerns are equally worrisome. stock trades at its FY20 book value, of the public sector bank’s loan book. While they expect credit costs (or cost investors should wait for all the uncer- Banks usually prefer a floating rate to of loans turning bad) to moderate by tainties to settle before taking fresh expo- fixed rate on this product. nearly 90 percentage points to 180 bps sure to the stock. Tax cuts, lower costs may take IndiGo out of air bubble Change in board RAM PRASAD SAHU would be 25.2 per cent. This, IndiGo’s fleet of over 235 planes year-on-year in the September according to analysts, would are A320Ceo aircraft. These are quarter. structure positive; The stock of InterGlobe help increase the bottom line to be replaced with Neos that This is running lower than Aviation (IndiGo) has gained by 5-6 per cent each over the burn lower fuel and have the average ~68/litre for FY19. consensus on RPT close to 8 per cent over the last next couple of fiscal years. more seats. However, any sharp increase policy key factor three trading sessions, follow- While the company had tax However, investors should from these levels will be detri- ing a boost to net profit from credits in FY19, be mindful of risks. mental to carriers such as the recent corporation tax rate its tax rate in About 65-70 per IndiGo. cut, as well as lower costs from FY18 was 28 cent of costs are The other risk that has been newer plane inductions. The per cent. dollar-denomi- an overhang is the tussle other trigger is the expansion Lower costs is nated that could between the promoters, espe- of the board and inclusion of another posi- offset the gains. The cially on the issue of related- an independent director, which tive that stands two moving parts party activities. However, could be the first step in resolv- out vis-à-vis here are rising Ansuman Deb of ICICI ing the differences between the rivals. crude oil prices and Securities believes the consen- two founder-promoters. Deepika Mundra of a weak rupee — both of which sus between promoters on the Among the gains for the JPMorgan believes IndiGo’s aggravate the cost situation. ‘related-party transaction’ pol- company is the cut in corpora- cost advantages will be struc- Though crude oil prices have icy, board composition, and tion tax rate announced last tural, while rivals faces 737-Max gone up, they are still lower eventual on-boarding of an week. Brokerages had factored delays, lower scale, or high than last year. independent woman director in a tax rate of 29 per cent for interim costs for fleet ramp-up Analysts at SBICAP are sentiment-positive steps. FY20 and FY21, while the effec- after Jet’s exit. Securities say aviation turbine Investors could check in to the tive rate after the reduction About 55 per cent of fuel has dropped 9 per cent stock on dips. MUMBAI | THURSDAY, 26 SEPTEMBER 2019 THE SMART INVESTOR 11 . < > TODAY’S PICKS BY DEVANGSHU DATTA RIL set to gather steam in PXIL to relaunch Nifty ‘day-ahead spot’ Current: 11,440 (11,461) Target: NA H2 on improving outlook contract in 6 weeks Stop long positions at 11,375. Stop short positions at 11,530. Big moves could go till 11,600, 11,300. A long Oct 3, 11,400p (75), short UJJVAL JAUHARI EARNINGS GROWTH DILIP KUMAR JHA 11,300p (58) could gain 15-20 If the reaction continues through Mumbai, 25 September Mumbai, 25 September settlement. TO PICK UP PACE he Reliance Industries (RIL) stock in ~crore FY20E FY21E Power Exchange India (PXIL), continues to gain on the bourses Net sales 604,000 630,200 the electricity trading platform Bank Nifty T and has risen above 8 per cent since promoted by the National Current: the corporation tax rate was cut late last % change y-o-y 4 4 Stock Exchange (NSE) and 29,586 (29,616) week. The stock has gained more than Ebidta 88,400 118,200 National Commodity & 3 per cent in the last two sessions, even as Derivatives Exchange Target: NA the broader markets have been weak % change y-o-y 5 34 (NCDEX), is planning to re- Stop long positions at 29,425. Stop short positions at 29,800. following the initial euphoria. Net profit * 43,400 60,100 launch day-ahead spot con- Big moves could go till 30,000, 29,200. Trend may stay negative. While the corporation tax cut will ben- % change y-o-y 10 39 tracts in the next six weeks. efit RIL, it is the improving growth outlook A day-ahead contract is a POWER PLAY E: estimates, * adjusted for one-offs, Ebidta: earnings that is driving the stock. The tax cuts are before interest, depreciation, tax and amortisation, double-side closed auction, n Source: Macquarie Research Launched in 2008, PXIL likely to lead to a rate reduction of 2-3 per in which both buyers and sell- turned unprofitable Infosys cent at the consolidated level, said analysts ers quote their prices daily Current: ~792 at Credit Suisse. On Friday, Finance Minister mentations of the International Maritime cheaper gas costs, and improved margins between 10 am and noon for n Revived operations Nirmala Sitharaman cut the corporation Organization (IMO) norms. from a slowdown in petrochemical capac- delivery the next day, and enhanced trading Target: ~775 tax rates from 30 per cent to effectively 25.7 The IMO will enforce a new 0.5 per cent ities in 2020 — in particular for polyethyl- depending upon a uniform in term-ahead and REC per cent. It also cut the minimum alternate global sulphur cap on fuel content from ene — support the rise in chemical margins. price auction on a 15-minute contracts; now a Keep a stop at 800 and go short. Add to the position between tax (MAT) to 15 per cent from 18.5 per cent. January 1, 2020, down from the present 3.5 Morgan Stanley expects RIL’s energy earn- time slot basis. zero-debt firm 780-783. Book profits at 775. Jio, RIL’s telecom arm, pays the MAT per cent. This will aid RIL’s refining margins, ings to grow 13 per cent annually over FY19- Launched in 2008 with n and stands to benefit from the reduction. given it has complex refining capacities. 21 and to be among the highest vis-a-vis the NSE, NCDEX and several By the end of FY21, it Retail operations are at marginal tax rates Analysts say that as shippers prepare global integrated oil and Asian peers. large utilities as sharehold- aims for 30% market YES Bank and will also gain from the cut in levies. for IMO, Asian refining margins have risen Analysts also remain positive on telecom ers, PXIL subsequently share in day-ahead Current: ~53.7 Analysts, however, see limited benefit and diesel, which forms nearly half RIL’s subscriber additions that remain steady. turned unprofitable, with spot contracts Target: ~55.25 for refinery and petrochemical (petchem) refined product output, has seen near- The firm has launched Jio fiber offering heavy attrition on the n In talks with power operations, as they already gain from record high margins. Estimates of landline, WiFi, DTH and content services. exchange. Its net worth exempted income. For them, the tax rate Macquarie Research suggest the segment’s The digital services business Ebitda that was turned negative by 2017. generation firms, state Keep a stop at 52 and go long. Add to the position between is about 25-27 per cent. The refining and earnings before interest, tax, depreciation, less than tenth of overall in FY19, however However, it is now a zero- utilities, cross-border 54.5 -55. Book profits at 55.25. petchem businesses, however, are expect- and amortisation (Ebitda) could improve is seen growing 76 per cent in FY20 and debt company. Over the past integrations to expand ed to see improved outlook. The two con- by 71.6 per cent in FY21, compared to FY20. almost 58 per cent in FY21, according to ana- two years, PXIL has revived its horizon tributed more than 60 per cent to consol- While the petchem segment, a key con- lysts at Macquarie. Notably, the profit from operations and enhanced idated operating profits during FY19. tributor to RIL’s operating profits is under this segment will contribute above 20 per trading in term-ahead (where Coal India Rising refining margins are expected pressure, analysts feel that soft liquefied cent to consolidated operating profit by FY21 participants trade electricity We are in talks with power Current: ~192.5 to boost net profit. Refining margins have natural gas (LNG) prices and slowing capac- and higher than petchem profit contribution on a term basis) and REC generation and distribution Target: ~188 continued to be under pressure for some ity additions should boost margins. of about 18 per cent. (renewable energy certificate) companies, state utilities and time, and the benchmark Singapore refin- It is not surprising then, that Morgan The firm is pursuing a programme to contracts, with around 50 per cross-border integrations in ing margins at $3.5 per barrel during the Stanley Research remains overweight on aggressively deleverage its balance sheet cent and 30 per cent market Bhutan, Nepal and Keep a stop at 194.5 and go short. Add to the position between June 2019 quarter were down from $6 per RIL, as it says earnings growth is starting and emerge a zero-debt entity in the next share, respectively. It is now Bangladesh to expand our 189-190. Book profits at 188. barrel in the June 2018 quarter. However, to be de-risked as headwinds of H12019 18 months. Analysts expect a re-rating after making a profit month-on- horizon,” said Sarkar. Target prices, projected movements in terms of next session, as the benchmark is rebounding, analysts turn and become key tailwinds in 2020. this move, with other triggers including month, which has helped its At present, there is a reg- unless otherwise stated expect better refining margins ahead. The They expect refining margins to rise with retail and digital services business growth net worth reach ~21.5 crore ulatory overlap between the same is also likely to be aided by imple- improved demand. Slower capacity growth, over the next few years. without raising of more capi- Securities and Exchange tal from existing sharehold- Board of India (Sebi), and the ers, or any new ones. Central Electricity Regulatory “We have two years to Commission (CERC). meet our minimum net worth Contracts below T+11 criterion of ~25 crore, which (delivery till 11 days of trad- ‘Govt measures don’t address slowing consumption demand’ is achievable. Both our pro- ing) are regulated by the moter shareholders, the NSE latter. The reduction in the corporation tax will boost earnings, but for sustained growth there needs to be a We believe investors are unaware of the have recently reduced our underweight and NCDEX, are confident. The Union ministry of revival in consumption demand, says MATT WACHER, chief investment officer (Asia Pacific), Morningstar’s cash flow generation and the lower return position on India. We are looking to re-launch power is understood to have Investment Management Group. In an interview with Samie Modak, Wacher says the investment on equity that these firms offer. Rather, We think that corporate earnings growth day-ahead spot contracts in intervened and there are manager is underweight on India. Edited excerpts: investors are relying on the benefits of will improve as domestic consumer the next six weeks,” said hopes that all physical deliv- future growth opportunities to demand, export, and government Managing Director Prabhajit ery contracts will be under Developed markets have been favourable compared to the developed stoke returns. expenditure increase. Kumar Sarkar. CERC, with financial con- outperforming emerging markets (EMs). markets. Returns can improve as In our view, this is not good investor This, along with the implementation of By the end of FY21, it says tracts in Sebi’s domain. Do you expect this trend to continue? investors become overly behaviour and we refrain from better reform measures and the fall in real the objective is to gain 30 per Power Finance Over the past 10 years, EM returns have pessimistic in their outlook. investing in expensive assets interest rates, should bode well for the cent market share in day- Corporation, Gujarat Urja, the trailed developed market returns. Indian We continue to like some EMs. hoping for growth to materialise. economy. ahead spot contracts, on an state utilities of West Bengal equities have underperformed US equities, Our order of preference within We look for assets that are priced accelerated turnover basis. and Madhya Pradesh, JSW even in local currency terms because of the EM equities is EM Europe, below their intrinsic value and How would reduction in the corporation At present, the Indian Energy, Tata Power Trading external concerns such as trade wars and then EM Asia, with EM Latin offer attractive margins of safety. tax rate benefit the economy? Energy Exchange enjoys and GMR are other share- rising US interest rates, which America being least However, our valuation- The Centre is trying to boost private capital almost 99 per cent market holders in PXIL. impact EMs more than the preferred. driven asset allocation process investments that have witnessed a slow share in this segment. “We approached members developed markets. signals value opportunity in the growth rate over the past few years. “We have a membership of the energy value chain to How does India compare to Indian equity markets after the These measures don’t directly address base in hundreds, with lead- convince them about fair Within the EM pack, which other EMs? recent downturn. the slowing consumption demand for ing power generation and dis- price discovery in power trad- countries look most promising With the EM pack, India Several large and small-cap various goods, such as automobile and tribution companies enrolled ing business. In the absence and why? features somewhere in the stocks are now more consumer goods. on our platform, either as a of fair competition, one single EM equities have encountered a middle. We are attractive than they It needs to be seen if the corporates will member or client. We are con- platform creates a virtual challenging period, with the trade war underweight on Indian were at the start expand in a slowing consumption tinuously making efforts to monopoly. With an alternate denting sentiments for key exporting equities, of the year. With environment. This measure could boost expand our membership platform available, traders nations such as China, South Korea and particularly the the return corporate earnings but durable growth in base, without unnecessarily would be able to discover Taiwan. mid- and small- profile earnings will require revival in lowering our transaction fees, healthy trading opportunity,” This has made valuations more caps. improving, we consumption demand. annual or membership fees. said Sarkar.

COMMODITIES1 > Onion prices unlikely to Govt stimulus, price surge bring respite bring relief anytime soon to sugar industry

Centre issues warning, says will impose stock limits VIRENDRA SINGH RAWAT & T E NARASIMHAN > RAJESH BHAYANI Lucknow/Chennai, 25 September PRICE CARD Mumbai, 25 September TRENDING UP Modal price (~/qtl) The recent surge in sugar prices, fol- onsumers will have to lowing the announcements by the As on Sep 25 International Domestic live with high onion Centre to support the beleaguered ------Price %Chg# Price %Chg# C prices for the time industry, has provided the much METALS ($/tonne) being. This is because of low needed buoyancy to the sector in the availability in the market. near term. This is even as the next Aluminium 1,751.5 -1.4 1,984.8 -1.7 Several measures by the cane crushing season is only a few Copper 5,761.0 -3.8 6,109.2 -8.1 government have, so far, not weeks away. yielded the desired results. The expected decline in 2019-20 Zinc 2,314.0 -12.5 2,576.0 -12.9 On Tuesday, Union production, coupled with the Gold ($/ounce) 1,527.2* 7.3 1,661.7 7.6 Minister for Food and announcement on the creation of a Consumer Affairs Ram Vilas buffer stock of 4 million tonnes (mt) Silver ($/ounce) 18.5* 20.2 20.7 21.4 Paswan had threatened to take and a subsidy on 6 mt of export, has ENERGY action to impose stock limit People queue up to purchase onions at subsidised rates at Compiled by BS Research Bureau resulted in sugar prices rising to ~34- ue of ~18,000 crore, even if we sell at Source: National Horicultural Research & Crude Oil ($/bbl) 61.4* -5.6 63.6 -0.6 on onions. Krishi Bhawan. Prices have soared over the past month PTI Development Foundation 34.5 a kg (ex-mill, Uttar Pradesh), ~30 a kg. It reduces the stock and car- The series of measures in according to an ICRA report. rying cost accordingly, while mills get Natural Gas ($/mmBtu) 2.5* 7.8 2.5 8.0 phases in the last 10 days by It stands at ~31.8-32.0 a kg in storage space for new sugar,” Indian AGRI COMMODITIES ($/tonne) the central government fol- prices do not moderate on ed in some farmers shifting fall in prices. The country pro- Maharashtra, against the minimum Sugar Mills Association director-gen- Wheat 168.4 -9.5 291.4 2.9 lows a sharp increase in account of speculative behav- to other crops. But more duces close to 23 million selling price of ~31. ICRA says the eral Abinash Verma had earlier told prices in the past one month iour of traders.” This follows importantly, this season, late tonnes of onion. measures are likely to result in mills’ Business Standard. Sugar 334.0* 3.1 485.8 2.4 from ~13 a kg in the beginning several measures to restrict rains followed by heavy Owing to the high prices liquidity improving, thus supporting However, in Tamil Nadu, only 14 Palm oil 517.5 4.5 846.4 3.8 of August to ~40 now in the exports and release buffer showers in Maharashtra and this season, which is ~60 per cane payments to farmers. of 25 private mills are likely to operate, largest onion mandi of stock, among others. Karnataka (which together kg in the Mumbai market, Domestic production is likely to owing to cane shortage and liquidity Rubber 1,526.0* -30.2 1,773.6 -18.5 Lasalgaon in Maharashtra. The Centre also said on produce half of the country’s consumption has been decline to around 28.2 mt, compared constraints. The South Indian Sugar Cotton 1,307.8 -4.6 1,625.4 -12.8 This price has touched a Tuesday: “The reported onions) led to crop damage. impacted with several restau- to 32.9 mt in the 2018-19 season, owing Mills Association has requested stag- * As on Sep 25, 1800 hrs IST, # Change Over 3 Months three-year high. Maharashtra export below the minimum Karnataka’s crop arrives rants reducing or stopping to to drought-like conditions in the gered repayment and restructuring of Conversion rate 1 USD = 71.0 & 1 Ounce = 31.1032316 grams. produces one-third of the export price to Bangladesh early in August and serve onion. major producing states of dues, apart from a special package for Notes: country’s onions. and Sri Lanka will be imme- September which feeds Globally, “countries like Maharashtra and Karnataka. “We the industry. TN’s cane planting area 1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE On Tuesday, Paswan had diately stopped and strict Maharashtra till the local crop China, Egypt, Turkey and expect the closing sugar stock for has drastically come down, resulting and Coffee Karnataka robusta pertains to previous days price. 2) International metal are LME Spot prices and domestic metal are Mumbai said: “There is sufficient stock action will be initiated starts coming in October- Russia have enough onions 2019-20 at 12.0-12.5 mt. Despite a sug- in poor capacity utilisation. A request local spot prices except for Steel. of onion in Maharashtra to against those who are found November. However, heavy and Indian traders can import ar surplus, the government support had been made to the Reserve Bank 3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket. meet the current demand. to be violating this decision rain resulted in supplies get- and sell around ~35 per kg. measures have resulted in increase in and banks to consider fresh loans and 4) International Natural gas is Nymex near month future & domestic natural gas is MCX near month futures. However, supplies are seem- of the government.” ting damaged, causing prices However, these traders are prices,” said Sabyasachi Majumdar, restructuring of dues. 5) International Wheat, White sugar & Coffee Robusta are LIFF E future ingly being restrained to Experts, however, don’t to spiral, according to official worried that if any procedural senior vice-president of ICRA. Capacity utilisation in TN prices of near month contract. 6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM increase prices. The govern- see prices coming down any quoted earlier. issues hold up clearance of Apart from announcing a package decreased from 99 per cent in 2011-12 near month future and Palm oil is Malaysia FOB spot price. ment is taking all measures time soon despite the action. A trader said that some their imported onions in cus- in July, the Union Cabinet had to 35 per cent in 2018-19. Production 7) Domestic Wheat & Maize are NCDEX future prices of near month contract, Palm oil & Rubber are NCDEX spot prices. to improve these supplies A senior government official farmers and traders have toms like in 2017, then they approved an export subsidy last was 2.38 mt in 2011-12 and 0.85 mt in 8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot from the central buffer to mit- said that, ahead of the rabi stored onion and are releas- may end up incurring losses,” month of ~10.44 a kg, to enable mills 2018-19. price. 9) International cotton is Cotton no.2-NYBOT near month future & domestic igate any such shortfall in the season sowing, prices of ing it slowly in the market. said Ajit Shah, president, to ship six mt in the coming season. Millers claim with proper relief cotton is MCX Future prices near month futures. availability. It will also con- onion in January fell to This is because they had Horticulture Exporters “It is a big relief to the industry. measures, the industry could recoup Source: Bloomberg Compiled by BS Research Bureau sider imposing stock limit if ~5 and below. This has result- incurred losses due to sharp Association. Six mt would translate into sugar val- in the next 18 months. 16 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 26 SEPTEMBER 2019 1 > SBI prices home Essel group ADB cuts India’s GDP growth promoters loans at 265 bps plan to sell non-media projection to 6.5% from 7% over repo rate assets SURAJEET DAS GUPTA Says a cut in corporation tax rate will boost private investments and global competitiveness New Delhi, 25 September

INDIVJAL DHASMANA policy rates should improve remain tilted to the downside Essel group promoters have New Delhi, 25 September the health of the financial given the weak global econo- decided to concentrate on sector, while increasing the my and, on the domestic front, selling their non-media assets he Asian Development credit flow to industry and the lag between growth- rather than looking for further Bank (ADB) on infrastructure projects, the enhancing measures and the dilution of their shareholding T Wednesday cut India’s update said. impact on demand. in Zee Entertainment Enter- economic growth forecast to Other measures, such as a The report said Indian prises (ZEEL) through a stake 6.5 per cent for the current direct income support for exports are likely to be hit by Their current shareholding in financial year (FY20), from its small farmers, a tax relief for subdued overseas demand and ZEEL is 24 per cent. earlier estimate of 7 per cent. low-income taxpayers, and rising trade tensions, and the HOME LOAN RATE CARD The move comes with the The move comes even as it reduced loan interest rates current account deficit will be Effective interest rate (%) — EBR+premium promoters getting the much- said the measures announced are expected to boost rural 2.2 per cent in FY20 and 2.5 per Salaried male Salaried female needed extension of up to six by Finance Minister Nirmala and urban consumption cent in the next year. 8.55 months to pay their dues from Sitharaman on corporation across the country. Inflation will be benign for most of the mutual funds. The 8.50 tax rate cuts would boost pri- Fast-tracking of goods and these years at 3.5 per cent and deadline to return the money vate investments, including A GLOOMY FUTURE? services tax refunds should 4 per cent, respectively — 8.45 ended in September. foreign direct investment provide an important boost to both within the central bank 8.40 The promoters, however, (FDI) and the country’s glob- India's economic growth rate projections for FY20 by various small and medium-sized firms target range, as food prices have already paid about half al competitiveness. think tanks * Calendar year 2019 (Jan-Dec) that have been constrained by remain stable. their dues out of the money Saying that some indus- a shortage of working capital. The ADB said economic generated from the sale of pro- 7.5% 7% 7% 6.9% 6.5% tries would relocate to India 6%* 5.9% Implementation of these growth in developing Asia 8.20 moters equity in ZEEL to pri- because of tensions between measures will brighten remains robust but prospects 8.15 vate equity fund Oppeheimer. the US and China, the prospects for India’s economy have further dimmed and However, some mutual Manila-based multilateral World IMF Economic RBI ADB UNCTAD OECD in FY20, it said. risks to the region’s funds sold pledged shares of agency advised policymakers Bank Survey The ADB said proactive pol- economies are rising as trade the promoters in ZEEL, on to improve investment cli- icy interventions along with a and investment weaken. the basis of which they got mate and liberalise regula- Source: Respective agencies recovery in domestic demand The report forecast eco- the loan this week to get back tions in the country to attract and investments will likely see nomic growth in the 45 coun- their payments, leading to these units. Development Outlook, 2019, The report, however, said the economy pick up in FY21. tries of developing Asia at 5.4 concerns that others may fol- It kept economic growth released on Wednesday, the significant corporation tax rate “India will remain one of per cent this year before nudg- ~30 lakh ~30-75 lakh Above ~75 lakh low suit. Additional premium of 15 bps on non-salaried customers rate for the next financial year ADB attributed its decision on cuts, announced by the gov- the fastest-growing economies ing up to 5.5 per cent in 2020. EBR: Effective base rate is 265 bps over repo rate; current repo rate: 5.4% Earlier, the promoters (FY21) intact at 7.2 per cent revising down economic ernment last week, will uplift in the world this year and next The newly lowered forecasts Source: SBI were looking at a twin strategy because of reform measures growth projections for FY20 to private investment, including year as the government con- reflect gloomier prospects for which included further sale of along with a pickup in invest- GDP growth plunging to an FDI, and enhance India’s glob- tinues to implement policy international trade due in part SUBRATA PANDA will also add a 10 bps premium their shares in ZEEL to anoth- ments and demand. In both over six-year low of 5 per cent al competitiveness. reforms and interventions to to escalating trade tensions Mumbai, 25 September to the card rate for loans up to er private equity fund or these years, India will continue in the first quarter of the year. Bank recapitalisation, strengthen economic funda- between China and the US, as ~30 lakh if the loan to value financial investor and also to be the fastest-growing major It also attributed the slow support measures for non- mentals,” said ADB Chief well as slowing economic The country’s largest lender ratio of the customer is greater sale of its non-media assets. economy in the world. growth in India to global eco- banking financial companies, Economist Yasuyuki Sawada. growth in China, India, South State Bank of India (SBI), on than 80 per cent and less than However, this would have led In an update to the Asian nomic slowdown. and reduction in monetary However, it said risks Korea and Thailand. Wednesday came out with its 90 per cent. to further dilution of its hold- new repo-linked home loan The lender also said that ings from 24 per cent. scheme. The bank said that it if the customer falls in the Last year, the promoters will charge a 265 basis point risk grade of 4 to 6, a premi- were ready to bring their (bp) spread over the Reserve um of 10 bps will be added to shareholding to just above 20 Bank of India’s (RBI) repo rate the card rate. per cent after deciding to sell UN body projects 7-yr low GDP growth for India on new home loans from SBI, this week, said it will half their stake in ZEEL which October 1. use the repo rate as the external at that time was at 41.62 per INDIVJAL DHASMANA It should be noted that UNCTAD The repo rate at 5.4 per cent benchmark to price all new cent. The promoters, apart fr- New Delhi, 25 September did not take into account an over 6- and the 265 bps spread takes floating rate loans for micro, om the wellness centre known year low economic growth rate of 5 the external benchmark rate small and medium enterprises as Yo 1 in the US, have put in The United Nations Conference on per cent that the country recorded (EBR) to 8.05 per cent. On top of (MSMEs), housing and retail the block six road projects Trade and Development (UNCTAD) during the second quarter of CY19. this, SBI will charge a premium loans and medium-size enter- (they are talking to NIIF), 480 has pegged India’s economic growth Highlighting the risks of shadow of 15 bps thereby taking the prises from October 1, 2019. Mw of solar projects and Essel rate at a seven-year low of 6 per cent in banking, it said such institutions were interest charged on a home SBI had earlier introduced a Finance assets, among others. calendar year (CY) 2019. It also high- fragile alternatives to public banks loan of up to ~30 lakh to 8.2 per repo-linked home loan effec- According to sources, the lighted the pitfalls of shadow bank- and development finance institu- cent for salaried borrowers. tive July 1, 2019, which was promoters are expecting to get ing in countries such as India and tions, as the roles of the latter were For home loans between withdrawn. A few modifica- around ~6,000 crore through China, citing the example of reduced or done away with, as part ~30 lakh and ~75 lakh, SBI tions have been made in the sale of these assets. This is Infrastructure Leasing & Financial of liberalisation. will charge a premium of 40 scheme which will take effect enough to pay back the pro- Services (IL&FS). Quoting a study, UNCTAD said an bps, thereby taking the effec- October 1, 2019, to comply with moters debt of ~5,400 crore to The UN body also pointed towards example of this development was tive rate for salaried people the latest regulatory guidelines. mutual funds. The total am- challenges in meeting sustainable Infrastructure Leasing & Financial to 8.45 per cent. The country’s largest lender ount of promoter debt, which development goals (SDGs) at a time Services (IL&FS), which sourced cap- UNCTAD highlighted the pitfalls of shadow banking in countries such as India Similarly, for loans above said it will voluntarily extend was at ~11,000 crore, reduced when private debts are rising ital using short-term instruments and China, citing the example of Infrastructure Leasing & Financial Services ~75 lakh, the premium charged benchmark-based lending to to ~6,776 crore after the pro- globally. such as commercial papers (CPs) to by SBI over and above the medium enterprises also to moters sold 11 per cent stake India’s economy grew 7.4 per cent fund long-term investments. fered a series of bond defaults by group financial analysts and at global gath- spread of 265 bps is 50 bps over boost lending to the MSME sec- in ZEEL to Oppenheimer. in CY18. It grew below 6 per cent in This maturity mismatch did not entities, leading to a change in man- erings are to be believed, the addic- EBR and the effective rate tor as a whole. It went down to ~5,400 2012 — called the policy paralysis prove to be a problem initially, agement, legal proceedings, and a tion to debt is no longer sustainable," comes to 8.55 per cent. The RBI has made it crore after the promoters also year — under the UPA 2 government. because of the presumption that painful restructuring of the company it said. SBI also said that a 5 bps mandatory for all banks includ- struck a deal with the Adanis “Growth projections for India have being a government-sponsored enti- that is still in progress, UNCTAD said. The report suggested that meet- concession will be given to ing small finance banks to link to sell solar assets of 250 Mw in been marked down because of a sharp ty, it enjoyed sovereign guarantee. The report also highlighted con- ing financing demands of SDGs women borrowers under each their new floating rate loans to Essel Green Energy and Essel fall to 5.8 per cent in the first quarter Owned one-third by state-owned cerns over SDGs. It said these concerns required rebuilding multilateralism category of loans. buy homes, vehicles and for Infraprojects for ~1,300 crore. of CY19 (relative to the corresponding financial entities, IL&FS was one of were compounded by the dizzying rise around the idea of a ‘Global Green Over and above the effec- personal consumption along With another 11 per cent stake, quarter of the previous CY),” said the largest issuers of CPs and enjoyed in debt levels to a scale similar to those New Deal’, and forging, by implica- tive rate, a 15 bps premium will with loans micro, small and Oppenheimer has increased UNCTAD in its trade and develop- a triple-A credit rating. seen before the financial crisis. tion, a different collective financial be charged by the bank for non- medium enterprises (MSME), its equity holding in the com- ment report for 2019. However, by August 2018, it suf- “If the routine warnings from future. salaried customers. The bank to an external benchmark. pany to 18 per cent.

Allcargo in talks to IRCTC fixes price band of ~315-320 for IPO Telecom revenue fell 10% in 2018: Trai Online ticketing, tourism acquire stake in Gati and the catering arm of rail- MEGHA MANCHANDA yearly performance indicators merger, Vodafone Idea ways, Indian Railway New Delhi, 25 September NO WINNERS of the telecom sector. became the market leader BLOOMBERG logistics solutions to e-com- Catering and Tourism Analysts feel the decline in with 34.98 per cent market Mumbai, 25 September merce companies.” Corporation (IRCTC) on The telecom industry’s adjust- IN A PRICE WAR SUC and licence fee is because share of the telephone sub- The board of Allcargo is Wednesday said it is looking ed gross revenue, an indicator of a cut in AGR and since these scription at the end of Allcargo Logistics is in talks likely to consider the pro- to raise up to ~645 crore of the sector’s financial health, ~2.37 trn payments are linked to AGR, December 2018 and Bharti to buy a stake in smaller rival posed acquisition in October, through an initial public was down by 10.18 per cent in Gross revenue (GR) there was a reduction in the Airtel slipped to the second Gati, people with knowledge the people said. Gati has man- offering (IPO). 2018 as the incumbent mobile during 2018 government’s revenue. position with 28.74 per cent of the matter said, as India’s aged to secure approval for The price band of the IPO service providers — Bharti Trai on Wednesday market share. Reliance Jio biggest cargo company the sale from its Japanese is fixed at ~315 to ~320 per Airtel and Vodafone Idea — -7.13% % change in GR over released the third edition of Infocomm added the maxi- attempts to boost its presence partner Kintetsu Group in its equity share. battled stiff competition from the previous year the ‘Yearly Performance mum number of telephone across Asia’s third-largest flagship company, Gati- The issue comprises an Reliance Jio, according to offi- Indicators - Indian Telecom subscribers (120.03 million net economy. Kintetsu Express, they said. offer for sale of 2.01 crore cial data. ~1.44 trn Sector’ for the Calendar Year addition) during 2018. Allcargo is in discussions Allcargo doesn’t comment shares of the face value of The Telecom Regulatory Adjusted gross revenue 2018, which provides a broad Vodafone Idea is the serv- to acquire Gati, that’s 6 per on “market speculations,” an ~10. Authority of India (Trai) on (AGR) during 2018 perspective of telecom servic- ice provider with highest pro- cent owned by Goldman external spokesman for the PTI Wednesday said gross revenue es in India. portion of rural subscribers Sachs Group, at an equity val- company said, while Gati (GR) declined from ~2.55 tril- -10.18% % change in AGR over The report also presents (52.67 per cent), followed by uation of about ~13 billion declined to comment. Bloomberg offers lion in 2017 to ~2.37 trillion in the previous year the key parameters and Bharti Airtel (48.98 per cent) ($183 million), one of the peo- Talks are still progressing 2018, an yearly decline rate of growth trends of telecom serv- to their total number of tele- ple said, asking not to be iden- and contours of the deal may to help India 7.13 per cent. Adjusted gross ices as well as Cable TV, DTH phone subscribers at the end tified as the talks are private. change, one of the people revenue (AGR) also declined the entry of Reliance Jio. Spectrum usage charges and radio broadcasting serv- of December 2018. The purchase will trigger a said. Under Indian rules, a access global from ~1.6 trillion in 2017 to “When Reliance Jio (SUC) yearly declined 17.74 per ices for the period covering Total wireless mandatory offer to buy Gati’s purchase of 25% stake in a bond indices ~1.44 trillion in 2018, a decline slashed prices, others (Bharti cent, from ~5,089 crore in 2017 January 1, 2018, to December (GSM+CDMA) subscriber base outstanding shares, the peo- company triggers an open rate of 10.18 per cent. Airtel and Vodafone Idea) to ~4,186 crore in 2018. Licence 31, 2018. It is compiled mainly increased from 1,167.44 mil- ple said. offer to buy an additional 26% Bloomberg on Wednesday Experts believe that the were forced to do it, which led fee also yearly declined by on the basis of the informa- lion at the end of December India’s logistics and ware- from public shareholders. offered to help India gain reason for the fall in AGR is to a significant fall in AGR,” 10.29 per cent, from ~12,976 tion furnished by the service 2017 to 1,176.00 million at the housing industry is attracting Allcargo’s biggest revenue access to global bond index- cutthroat competition and a independent telecom expert crore to ~11,641 crore during providers. end of December 2018, a year- companies from Blackstone generator is shipping and es, a move that will help tariff war in the sector after Mahesh Uppal said. the same period, said Trai’s According to the data, after ly growth rate of 0.73 per cent. Group to Warburg Pincus as port-based logistics, while Asia’s third-largest economy they seek to tap into a sector Gati moves goods across India attract more foreign inflows. that Gati forecasts will be and claims to service 99 per “Bloomberg will help worth $217 billion by 2020. cent of the nation’s districts. India navigate the process NCLAT asks three firms to file Big digital push needed to reach $5-trn GDP: Study That’s buoyed by demand Allcargo is also building for gaining inclusion in glob- NEHA ALAWADHI will be an essential step economy, but will also allow from e-commerce firms such large warehouses in four al market benchmark index- claims before Lanco liquidator New Delhi, 25 September towards achieving the $5- us to position ourselves as a as Amazon.com and Indian cities and reworking es, so international investors trillion goal. However, technology friendly juris- Walmart’s India unit to pro- its existing storage facilities can access India’s bond mar- PRESS TRUST OF INDIA uidator and file their claims if Data governance, cyberse- India’s regulatory approach diction. vide last-mile connectivity near ports to provide services ket,” Founder Michael New Delhi, 26 September any amount has been received curity, encryption and sur- should focus on regulating In our view, consultative into cities as well as remote to e-commerce companies, Bloomberg, who owns by Lanco Infratech after invo- veillance along with tech- ‘core’ industry players, and regulatory frameworks com- hinterlands across one of the while Gati has already built a Bloomberg Barclay indexes, The NCLAT on Wednesday cation of PBGs submitted by nologies such as cloud not entities that fall on the prise clear, transparent and world’s largest landmass. logistics infrastructure help- said in New York at a busi- declined to entertain pleas by them. "This Appellate Tribunal computing, artificial intelli- ‘edge’ of the regulatory spec- effective dialogue at every “For Allcargo, which was ing it to deliver over 6 million ness forum. Indian Prime three Chinese companies to is not inclined to decide the gence and Internet of Things trum. This can be done by stage between the govern- primarily into foreign trade small cargo packages a Minister Narendra Modi is direct the liquidator of Lanco claim and counter claim as are the core areas requiring drafting clearly articulated ment and all stakeholders. business, buying stake in Gati month. the key note speaker at the Infratech to stay invocation of made by the parties, but give policy focus for India. outcome-based regulations, There should be an appetite is a clear de-risking initiative The founders of Gati, led event. The move will “help their performance bank guar- liberty to the appellants to These will help realise the report, titled ‘Digital for innovative structures as the latter is more focused by Mahendra Kumar Agarwal Indian businesses raise antees (PBGs). move before the appropriate the country’s target of Technology Policy for such as regulatory sandbox- on domestic business,” own 14.4 per cent of the com- funds, invest and grow and it A two-member National forum for appropriate relief," achieving $5-trillion econo- India’s $5 Trillion Economy,’ es and a willingness to Mathew Antony, managing pany, while overseas investors will help India’s government Company Law Appellate the NCLAT said. my, according to a recent said. enhance regulatory capacity partner at Mumbai-based including Goldman Sachs and raise funding infrastructure Tribunal (NCLAT) bench head- The firms are KSB Shanghai study by industry associa- “Participative regulatory and measure performance,” advisory firm, Aditya Kintetsu World Express, con- and public service” ed by Chairperson Justice S J Pump Co, TLT-Tourbo tion Internet and Mobile models will not only help us noted the report, which was Consulting. “This acquisition trol 17.1 per cent, according to Bloomberg said. Mukhopadhaya asked the three (Sichuan) Co and Beijing Power Association of India (IMAI). address emerging chal- prepared by technology focused will help Allcargo offer total data on BSE’s website. BLOOMBERG companies to approach the liq- Equipment Group Co. Digitisation of services lenges in India’s digital law firm Ikigai Law. MUMBAI | THURSDAY, 26 SEPTEMBER 2019 PERSONAL FINANCE 17 . <

en similar action, the outcome had varied depending on the financial health of the bank on which restrictions were put. Bakshi, for DUAL REGULATORS HAVE MADE example, points out that about a decade back It’s a long road for PMC Bank of Baroda took over Memon LIFE DIFFICULT FOR UCBs Cooperative Bank and all the depositors were paid off. The resolution of PMC Bank also On the face of it, it looks like depends on the regulator’s assessment of its urban cooperative banks assets and liabilities. There could be a sce- (UCBs) are in the pink of Bank’s depositors nario where another bank takes over PMC health. According to the Bank if the financial health is good. If not, Reserve Bank of India (RBI) the regulator can keep extending the restric- data for FY18, Punjab and Park only part of your money with cooperative banks despite higher interest rates tions like in case of other cooperative banks. Maharashtra Co-operative (PMC) Bank — which now faces PHOTO:REUTERS Cooperative banks are riskier: restrictions — posted a net Cooperative banks more susceptible to gov- profit of about ~101 crore ernance issues. In the current financial year, while its capital adequacy over a dozen cooperative banks have faced ratio was sound at 12.23 per restrictions on withdrawal. According to cent. The bank’s deposit base stood at ~9,938 crore in FY18. Usha Thorat, former deputy governor of the RBI and chairperson of Financial According to experts, the story is not about balance sheets Benchmark India, there are multiple rea- only. The main problem plaguing UCBs is governance, which sons why cooperative banks face gover- arises due to dual regulation. The RBI regulates them in nance issues. “These banks are small, and accordance with the Banking Regulation Act 1949. In addition, due to their size they are more susceptible the state government’s department of cooperation also regulates to concentration risk. There is also the risk them. The latter results in undue political interference. of connected lending although there is a The top management in these institutions are selected prohibition on these banks lending to direc- through elections unlike banks where professionals are tors or concerns in which directors are inter- handpicked for the job. Experts favour singular supervision by ested. They are subjected to dual regulation the RBI. The apex bank has been trying to streamline UCBs for by RBI and by Registrars of Cooperative quite some time after it pursued an active licencing policy during Societies, as management issues are under 1993-2004. This led to a sharp increase in their numbers. the latter,” says Thorat. Due to their weak financial positions, the RBI took the decision Existing customers who do not want to to merge weak UCBs with viable ones and closed unviable ones. take any risk should move their money out At the end of March 2018, there were about 1,551 UCBs, of which of cooperative banks and put it in a sched- uled commercial bank (unless they are about 54 were scheduled UCBs. absolutely sure about their cooperative COMPILED BY NAMRATA ACHARYA bank’s position). “In this kind of an environ- ment, you do not know what the chain reac- NUMBERS OF UCBs COMING DOWN SLOWLY tion might be,” says Mumbai-based financial Net NIM Gross Number Deposits Loans and Investments planner Arnav Pandya. profit % NPA% of UCBs (~ cr) advances (~ cr) Many depositors belonging to lower- (~ cr) (~ cr) income groups are forced to open an account 2017-18 4,062 2.92 7.10 1,551 4,56,507 2,80,501 1,49,759 with a cooperative bank because they find it difficult to do so with a scheduled com- 2016-17 3,925 2.79 7.16 1,562 4,43,469 2,61,202 1,42,091 mercial bank. “People who are able to open 2015-16 3,672 2.97 6.11 1,574 3,92,176 2,44,936 1,20,911 an account with a scheduled commercial bank should stick to them,” says Deepesh 2014-15 3,511 2.97 6.15 1,579 3,55,134 2,24,302 1,23,071 TINESH BHASIN & SANJAY KUMAR SINGH account. In interviews will have to wait and watch. When the regu- Raghaw, founder, PersonalFinancePlan.in, 2013-14 2,984 3.08 5.70 1,589 3,17,769 2,00,352 1,15,301 with media, the manage- lator imposes restrictions under Section 35A a Sebi-registered investment advisor. Do not epositors would be feeling ment has said it is hopeful of the Banking Regulation Act, it is an ext r e - go for riskier options like a cooperative bank RATING-WISE DISTRIBUTION OF UCBs extremely harassed with the that all depositors would me step. “Bank affairs are completely stopp - only for the higher return. On a five-year (As on March 31, 2018) Reserve Bank of India’s (RBI’s) get their money back as e d, and depositors can withdraw a limited deposit, State Bank of India offers an interest decision to restrict withdrawal the bank has given only am o unt. It means RBI believes that the situ- rate of 6.25 per cent while PMC Bank offers No. of % share Deposits % share Advances % share D Ratings UCBs in total (~ billion) in total (~ billion) in total from Punjab & Maharashtra Co-operative collateralised loans. Even ation is serious,” says RK Bakshi, former exec- 7.25 per cent, a difference of 100 basis points. Bank or PMC Bank. Many depended on the if this is true, banking utive director, Bank of Baroda. He adds: “Un - Even if you go for them, park only a small A 328 21.15 1,415.36 31.00 892.57 31.82 money parked with the bank for their daily sources say that the final YOUR less RBI completes the total investigations — portion of your capital there. B 878 56.61 2,520.40 55.21 1,561.83 55.68 lives and businesses. But there was little that resolutions would take MONEY because there might be other skeletons in the Do not put all your money in a single the banking regulator could do after finding months or even years. cupboard — there will be no solution.” bank. Many cases have come to light of peo- C 278 17.92 517.97 11.35 303.38 10.82 severe irregularities at the bank. In recent cases such as Kapol Co-opera- ple who had put their entire life’s savings in D 67 4.32 111.34 2.44 47.24 1.68 For the next six months, depositors can Uncertain future: Those who have up to ~1 tive Bank, Vasantdada Nagari Sahakari Bank, PMC Bank. “Diversification acts as a strong Total 1,551 100.00 4,565.07 100.00 2,805.01 100.00 only withdraw ~1,000 at one time. If there lakh or below with the bank are covered by Padmashree Dr Vitthalrao Vikhe Patil Co- safeguard against these kinds of risks. Spread Note: 1. Data are provisional; 2. Components may not add up to the whole due to rounding off; are scheduled payments or equated monthly deposit insurance. But they will still have to operative Bank and Karad Janata Sahakari your deposits across three-four banks,” says 3. Ratings are based on the inspection conducted during the financial years 2016-17 to 2018-19; 4. Percentage variation could be slightly different because absolute numbers have been instalments linked to PMC Bank accounts, wait until the time the regulator finds a suit- Bank, the RBI has extended the restriction a Ankur Maheshwari, chief executive officer, rounded off to rupees billion Source: RBI they have to be shifted to another bank’s able solution. Those who have over ~1 lakh, few times. In the past, when the RBI had tak- Equirus Wealth Management.

BUDGET: plan for any claims. It will have more my health insurance plan a year The treatment specified by you is cat- any waiting period, unless it is a pre- ~50 LAKH -~1 CRORE READER’S comprehensive coverage than your back. Will my current policy pay for egorised under outpatient depart- existing illness. Check the manda- other health insurance plan. Travel my treatment, or will I need to buy a ment (OPD) benefits, which are tory health insurance requirement CORNER insurance is specifically designed to new plan? offered only in a few specific plans. of the country you are travelling to REALTY GENERAL INSURANCE cater to insurance needs while you Sorry to hear about your illness and I, therefore, suggest that you check before buying a travel insurance are travelling abroad, thus offering wish you a speedy recovery. Usually, whether your health insurance poli- cover. CHECK more extensive benefits. cancer, if detected within the policy cy comes with OPD benefits. If it year, is covered under the policy does, then you can claim the medical I am not happy with my current Business Standard brings you a snapshot of average I am shifting from Pune to without any time-bound waiting expenses up to the limits specified health insurance provider. At the current rates and unit sizes in localities that offer ROOPAM Bangalore. Do I need to apply for a periods. You don't need to buy a sep- for OPD. same time, I don't want to lose my property in the price range of ~50 lakh and ~1 crore. If ASTHANA new insurance cover when the car arate policy. You may, however, go no-claim benefits. What should you are looking at buying real estate, an idea about number plate changes? Will it also through the policy wordings to con- I am travelling abroad in a week and I do? prevailing rates would come in handy affect my premium? firm this. Check the 'general exclu- want to buy a health plan to cover You need not worry about losing con- No, you need not apply for new sion' section for more clarity. myself and my family, which tinuity benefits. There is a provision Avg price (~/sq ft) Avg unit size (sq ft) insurance. You can approach your includes my spouse and two for porting your existing health poli- BHOPAL I have a health insurance policy existing insurer for endorsement of I am a 50-year-old widow, and I children aged less than 10. If one of cy to another insurer, keeping the Hoshangabad Road 3,510 1,823 that provides cover for treatment the registration number by submit- suffer from arthritis. I do need to us falls ill and I file for a claim, is continuity benefits. For this, you abroad. I am travelling to Europe ting the required documents. In this undergo treatment through there any waiting period for claims have to approach the other insurer Kolar road 2,584 2,382 and have bought a Schengen travel case, the premium will not be affect- injectable medication every week, under such policies? 45 days prior to the expiry date of the Salaiya 3,571 1,804 insurance. If I fall sick while ed as the zone parameter for own which turns out to be very You may go for a family floater plan ongoing policy. Ayodhya Bypass 2,948 1,872 travelling, which insurance will damage (OD) premium does not expensive. I want to claim under an overseas travel insurance come into effect? change from Pune to Bangalore. insurance under my current health policy covering hospitalisation The writer is CEO and whole-time Airport Road 3,583 1,615 Though you may file for a claim I am a 45-year-old woman resid- plan. Is there a limit on the expenses. Many overseas travel poli- director, Liberty General Insurance. The Bawadiya Kalan 3,891 1,852 under both the policies, it is advis- ing in Mumbai. Recently, I was diag- maximum number of claims cies available in the market cover ill- views expressed are his own. Send your Misrod 3,000 1,984 able that you use the Schengen travel nosed with breast cancer. I bought allowed in a year? ness from day one and do not have queries to [email protected] Bagmugaliya 3,200 2,340 COIMBATORE Trichy Road 5,029 1,486 Saravanampatty 4,052 1,626 Expand your contingency corpus Note ·The ticket price range considered for the above data points is between ~50 lakh and ~1 crore ·All the data points discussed in the above table refer to primary market only This money, parked in the most liquid of instruments, will act as a safety cushion in case of a layoff ·The above residential data set comprises of residential apartments only ·The above residential data is representative of organised real estate SANJAY KUMAR SINGH who can still be insured. “Buy a cover developers only for them. If they are dependent on you, ·The top performing micromarkets based on sales during last year (Aug- Vishesh Prasad (name changed on your finances could be hit if they have 2018 to Jul-2019) is represented on the above table “Be prepared to take ·Data points are updated till Jul 2019 request), 42, who works in Mumbai for a medical issue,” says Vishal Dhawan, Source: PropEquity a real estate consultancy as a content chief financial planner, Plan Ahead writer and communications personnel, Wealth Advisors. a salary cut” was recently informed by his boss that Prabir Jha, founder & CEO, Prabir Jha People Advisory suggests he would have to relocate to Delhi, fail- Avoid illiquid instruments: Do not widening the scope of your job search TIPPING ing which his contract would not be tie up the bulk of your investment in renewed. “My company is on a cost-cut- products from which it is impossible On steps to mitigate risk of layoff: Build a wide network using POINT ting spree. It has used the oldest trick to withdraw money when needed. your work and reputation. But arbitrary efforts when in the book to get me to quit, knowing “Structured products, fractional prop- layoff is imminent can backfire. Also, ask yourself if Should you invest in a fully well that I cannot leave my aged “After a layoff, a person does erty investments, and even insurance- your current skill sets will allow you to survive. If parents behind and relocate,” says a dis- not know when his salary flow cum-investment should be avoided not, acquire a new generation skill set, even at your world gold fund? gruntled Prasad. With only three will resume. This makes him for this reason,” says Luthria. The only own expense. months left before his contract ends, highly risk averse. Any money exceptions to the rule of not investing On time it takes to find the next job: In versatile, BLOCKBUSTER RETURN OVER PAST YEAR he is frantically searching for a job. he receives from his ex- in illiquid instruments are Public lower-level, industry-agnostic functions, you may As the economy slows and compa- employer should be put in Provident Fund (PPF) and National get a new role quickly. But if you are past mid- nDSP World Gold nKotak World Gold nies try to pare costs, thousands across instruments where the Pension System (NPS). 40s, in a middle to senior level jobs, and have the country are finding themselves in principal will not get eroded.” single-industry exposure, it could take 1 Year 37.2 a similar predicament. “Automobile, ANKUR MAHESHWARI, After receiving the pink slip months. textile, infrastructure and telecom are Maximise liquidity: Assume the worst On whether to stay focused or diversify in job 36.0 CEO, Equirus Wealth Management 3 Years -1.7 sectors that have been hit particularly regarding how long your unemploy- search: My advice would be to stay flexible. hard by layoffs, though the sentiment ment could last and make conserving Acquire new skills, take pay cuts, explore -2.6 runs across others as well,” says Prabir receiving the pink slip, projects getting cash your topmost priority. SIPs may cross-industry moves, and even a reduction in 5 Years 6.0 Jha, founder and chief executive officer, shelved, etc.—start preparing for the have to be stopped (depending on your position. Prabir Jha People Advisory. Around 46 worst. Any financial cushion you have cash position). You may receive EPF On salary cut one should prepare to take: 2.7 per cent of Indian respondents in a will be your only safeguard. “A candi- money from your employer. “Fresh cap- Depends on your ability to keep your head 10 year -0.3 recent Ipsos survey pointed to jobless- date with higher financial sustainability ital should only be invested in instru- above water. But I am aware of senior people ness as their main worry. can take more time to find the right job,” ments where the principal will not be accepting cuts of almost 50 percent, because -0.1 Experts say getting laid off is not says Rituparna Chakraborty, co-founder eroded,” says Ankur Maheshwari, chief the alternative option could be zero. Source: Valueresearchonline.com such a rarity in the private sector any- and executive vice president, executive officer, Equirus Wealth While gold exchange-traded funds have given one- more. “During a career spanning, say, TeamLease Services. A family with a Management. Return to investing year category average return of 23.28 per cent, 35 years, you could face at least five single earning member should have at according to your normal asset alloca- decision should depend on the robust- hold the job, you could consider moving international gold funds have given returns of episodes of economic slowdown, and least 12 months’ worth of expenses as tion once you have found another job. ness of your business plan, not merely to a less expensive locality. above 30 per cent over the same period. Also known could get laid off during any one of contingency fund while six-nine Luthria suggests keeping any money because some capital has become avail- as world gold funds, these schemes invest in stocks them. The risk increases with age and months of expenses may be adequate received in safe and liquid instruments able,” says Dhawan. Prepay loans? Repay credit card and of mining companies, and not in gold. As gold prices salary,” says Avinash Luthria, a Sebi- for a double-income family. like savings deposit and fixed deposits other high-cost loans using up to 10-15 start rising, the stock prices of companies that mine registered investment adviser and of quality scheduled commercial banks. Tighten your belt: Discretionary per cent of your corpus. However, do precious metals rise even faster, thereby giving founder, Fiduciaries. Instead of feeling Purchase adequate health insur- “Avoid taking any risk with this money, expenses like vacations, home and car not rush to pay off lower-cost loans like better returns than gold. However, it would be best stigmatised, prepare yourself financial- ance: If the only cover you have is the such as parking it in a co-operative bank upgrades, etc may have to be deferred. home loans. Your most crucial goal at for investors to stay away from these funds. If gold ly for such an eventuality. one provided by your employer, get a or even a small finance bank,” he adds. Scope may exist to reduce some of your this juncture should be to maintain personal cover for your family. A family Since debt funds can see capital erosion, fixed expenses as well. For instance, you your liquidity cushion. If it shrinks, you prices fall, the correction in stock prices of mining BEFORE A POTENTIAL LAYOFF companies, and hence in these funds, could be floater of ~5-15 lakh should suffice for it is better to avoid them. may have rented a house in an expen- will not have much choice and will be even sharper. Build your contingency fund: As soon most nuclear families. Those in the Many people think of starting a sive locality because of its proximity to forced into accepting the first job that as you detect straws in the wind—peers twenties and thirties may have parents business with their PF money. “This your workplace. But now that you don’t comes along. 18 STRATEGY MUMBAI | THURSDAY, 26 SEPTEMBER 2019 1 >

installed base in the world, whether it is on a public cloud or in the data centre, we GUEST COLUMN believe that more than 50 per cent of the Linux install base is actually Red Hat,” says Vikas Arora, cloud and cognitive software leader, IBM India/South Asia. Time to reboot So its India strategy fits in perfectly with IBM’s global plans. The firm’s Chief Executive Officer Ginni Rometty is pret- How an economic slowdown can be a ty upbeat about the future of hybrid cloud branding opportunity for companies — which allows companies to spread their data between private and public ith the general dampen- Amazon is riding a high wave with cloud providers — and has been putting ing of economic mood spurt in its business. Amazon is good money to build the firm’s expertise W and sentiment, most known to have always worked in the area. “Hybrid cloud is a trillion dol- businesses are speculating if cur- “backwards” starting with its cus- lar market and we will be number one in rent slowdown will remain or is it tomer. Excelling in its customer it,” she had said at IBM’s Think confer- just a cyclical phase. While high- service, it has always offered serv- ence in February. That explains why she value sectors such as housing, auto- ices that goes beyond what other was willing to pay a significant premium mobiles and electronics are facing players are offering. for Red Hat which dominates the hybrid the heat, everyday household prod- Spending time evaluating the cloud architecture. ucts, too are witnessing a fall in pains that consumers go through Unlike Google, Amazon or Microsoft, demand. The question is whether and the gains you can offer to them IBM’s cloud strategy has been to help its in these times, it would be right to could help you build a recession- clients work across multiple cloud envi- discuss about spending money on proof business. ronments, as more and more services non-revenue generating activities begin to be hosted out of different clouds. such as branding? Revisit brand purpose and For example, an organisation could have Brand building is perceived to be build internal belief an email hosted on one cloud environ- an expensive and unnecessary activ- While consumer sentiment is in ment, an internal application hosted on ity that might easily get shelved in gloom, employees too are insecure their own data centre, an administrative lieu of current situation. However, about their future. Here’s a chance application hosted or another cloud and in a longer run, this may end up hurt- to align your team with your brand so on. ing brand’s foundation. Brand build- purpose. Build internal belief, use “Now, when you actually go hybrid, and ing is all about long-term thinking motivational branding tools to give when they’ve (customers) got things run- and a slowdown proba- your stakeholders a ning in different environments... we ask bly is the right time to reason to show up at IBM's leap of faith customers how many clouds you use? It is think through your work each morning definitely not an intuitive answer, but our brand. Here’s a golden with enthusiasm. How Red Hat could open “new doors” for the Big Blue in India view is that our customers today use any- opportunity for you to where between six to 15 clouds,” says Vikas look at your brand and Maybe wisely NEHA ALAWADHI Arora, cloud and cognitive software leader, re-evaluate what it but do spend on BUILDING MUSCLE IBM India/South Asia. “It can be the means to consumers. marketing BM has lagged the overall technology How an acquisition is helping create new possibilities biggest nightmare for administrators Here’s a quick Most marketing sector for years: The company’s rev- because now you are looking at managing roundup of all that you RUTU MODY-KAMDAR expen-ses are allocat- enues for the last four years have IBM bought Red Hat for every 5 per cent Red Hat has large all of these environments. So customers can do to utilise the cur- Jigsaw Brand ed as a percentage of I been flat; its revenues fell for a fourth last year for $34 customers who engineering facilities are increasingly looking for management rent slowdown: Consultants future business, which straight quarter in April-June, pointing to billion, its largest adopt Red Hat in Pune and technology, that can basically give you a means that when busi- Spend time to really growing pressures on its legacy products acquisition till date Wants to expand Red Bengaluru single window to manage all of this infra- ness is down, that figure will auto- and services. So it’s understandable why it structure,” he adds. know your consumer matically come down. However, The technology giant Hat to 30 new Big opportunity for believes the Red Hat acquisition could In August, IBM announced IBM “Cloud Now’s the time to know your con- cutting down on marketing will transform the company. sees a $1 billion countries where it has IBM and Red Hat to Paks”, offerings that integrate IBM and Red sumer up, close and personal. Invest lead to a cyclical downturn in Indeed. The buy-out was the biggest annual opportunity no previous presence cross sell to customers Hat software in a way that enterprises can time to understand consumers psy- future especially when economy deal in IBM’s 108-year history and the build applications once and run them on che. During an economic slowdown, goes an upswing again. world’s second-largest technology all leading public clouds, including it would be interesting to study how Remember, consumers buy brands takeover. The transaction closed in July Linux operating systems, the most popu- has customers in industries such as avia- Amazon Web Services, Microsoft Azure, consumers reallocate their spend- that are familiar to them. Those and the technology giant is banking on it to lar type of open-source software, unlike tion, government, finance, healthcare and Google Cloud Platform, Alibaba and IBM ing across categories. Take buying a they have seen and can recall. open new doors in India’s cloud market. proprietary software made by Microsoft so on. Cloud and on private clouds. The cloud home for instance. Most consumers While expenses may be cut, do not According to research firm Gartner, Corp. It also specialises in Kubernetes, an In 2015, the Indian government paks claim to reduce development time are cautious about it right now. It compromise on being visible even spending on cloud system infrastructure open source platform, originally built by announced a policy on adoption of open by nearly 85 per cent, reduce operational would be useful to study consumer during a slowdown. services (IaaS) will grow from $39.5 billion Google, that helps businesses manage source software, which makes it manda- cost and manual work. sentiments as to what deferring a The biggest barrier to action in 2019 to $63 billion through 2021 global- applications and helps them scale up. tory that all software applications and serv- “Today, if you’re using any of these purchase of this nature really means during a slowdown is your internal ly, while public cloud services revenue in Overall, IBM-Red Hat looks at banking, ices of the government be built using open cloud paks, or if you're using Red Hat com- to them. Understanding consumer team’s mindset. There will be many India is expected to be $2.4 billion in 2019, financial services and insurance, telecom source software, so that projects under ponents and communities, and IBM soft- behaviour during a slowdown, is a who don’t believe in branding. an increase of 24.3 per cent from 2018. This with a focus on software defined networks; Digital India “ensure efficiency, trans- ware put together to address a use case, great way to know how your product Convincing your peers that the means more and more enterprises will manufacturing and government as key parency and reliability of such services at support comes from one place... one num- category and brand, positions itself brand you are building is for long shift part of their business to cloud, which growth areas. affordable costs”. Several large projects of ber to call. We’ve also built teams that basi- in the life of consumer. term, which will pay rich dividends in turn would mean the need for different Already Red Hat is working on several the Indian government, such as Aadhaar, cally jointly implement these technologies in future is required right now. cloud services to “talk” to each other. large projects in India. An oft-cited cus- Goods and Services Tax Network and now. We’ve been hard at training our peo- Re-evaluate your value Consumers, investors and employ- This is where open standards play a big tomer is the Bombay Stock Exchange, Government e-Marketplace are built on ple because customers no longer want to proposition ees alike would want to believe in a role, and that is the capability Red Hat which built its trading system using open open source software. reach out to different organisations,” Arora At a time when retailers are experi- brand that stands through the test brings to IBM’s table. Red Hat specialises in source technology from Red Hat. It also “Red Hat powers the largest Linux sums up. encing a general slowdown, of time.

SNIPPETS STATSPEAK Which department can avail work from home mostly? What is the productivity Business leader response HR Response level of your employees Three key goals when they work from home? FUTURE 27 Marketing 19 of the research 32 8 4 IT/Technology 22 VIEW Exploring the shifting Significantly Significantly 22 Product & Operations 8 low Flexibility, inclusive culture mindsets of employers with high and technology will respect to flexible working 12 Admin & Legal 8 become increasingly 4 HR 12 9 important as the workforce Understanding the Low moves towards the future. perspective of gig workers 12 Quality/Compliance 7 But how ready is corporate in the gig economy 10 Sales 12 20 India to support the gig 7 Other 6 Same economy? The Gig Understanding how the as that 31 High Readiness Survey of future workforce sees and 2 None in the office Trust matters Corporate India conducted will contribute towards the by Noble House is based on gig economy Do you offer flexible working hours to employees Outlook If you are a politician, a minister or an advertising responses from company and not restrict them to 9-5 schedule? executive, you may want to question your career owners, senior managers 51 As long as work Is there a provision or a policy that allows All numbers in percentage 28 Not right 44 Yes, we do choice. A new global survey by marketing research and HR professionals who is being done, your employees to work from home? of respondents now, but offer flexible company Ipsos found that the respondents labelled have been or will be a part whether in office these professions as the most “untrustworthy”. we are timings to ensure of the gig workforce. 23 The work is such (sensitive or at home, it is Politicians fared particularly bad in the survey as a 14 No, we do planning to maximum Through their responses, it data, dependency on other irrelevant majority (51 per cent) of urban Indians rated them as not allow at all introduce productivity studied their preferences, departments) that there are 49 Yes, it is easier to monitor and the most “untrustworthy”. Government ministers flexible presumptions and no such options measure the performance of the garnered 52 per cent of these thumb downs while working advertising executives, 41 per cent. On the other preparedness among 28 No, we strictly follow staff who are in the office 36 Yes, on case 27 Yes, it’s a policy hours extreme, the most trustworthy ones, had the armed other things. to case basis office working hours Source: Noble House forces (71 per cent) taking the pole position. The second and the third places of trustworthiness in professions were bagged by scientists and teachers respectively. “Politicians, despite their efforts to out happens automatically as the clean up the system, have not yet won the trust of money goes out either through your most. Also, the advertising professional, writing ‘Demonstrate value, net the consumer’ wallet or through your credit card if interesting copies and creatives, highlighting merits you insert the credit card in the of brands, is viewed with scepticism,” says Parijat machine. This gives users a friction- Chakraborty, country service line group leader, Intelligent labelling can provide effective and quick solutions for engaging customers, managing less shopping experience as there is public affairs & corporate reputation, Ipsos India. inventories and preventing counterfeiting, Bhardwaj tells Shubhomoy Sikdar no queue. Then there are medical companies that face many chal- What are the possibilities digital of information about consumer pref- ogy can do is make it counterfeit- really make it easy to work. lenges because they deal with a technologies have opened up when it erences. That kind of information proof. Anti-counterfeiting is also a There is a lot happening in some number of products that can expire comes to product package labelling? was invaluable to a brand. very big task. European countries and in the US. very fast. And in that business, it is Consumers adopting technology The other big application of a It’s a problem for large brands. Now the same technology can be extremely important to manage thanks to smartphone penetration technology here is enabling better And it's a bigger problem for the phar- used for significantly improving the and maintain the inventory. So, we and the government’s push for a track and trace. Consider you are a ma sector because it is related to lives. baggage loading efficiency for air- are talking to few of them for man- digitised economy are creating pharma The same technology can also be lines and reduce lost baggage events. aging their whole expiry and shelf many opportunities. Intelligent manufacturer and you ended up used for anti-counterfeiting because Lost baggage is an expensive event life so that their supply chain is far labels is one such opportunity. There supplying a batch which for some now you are leaving a digital impres- for an airline because it has to do more efficient. are multiple applications of those. reasons is not complying with the sion. You can possibly know at which some extra bit to deliver the baggage; Say you are a wine connoisseur and standards and therefore, a recall stage, if at all, there was any for you it's expensive because you Your line-scan programme — where you want to know about the entire needs to be enabled. A pharma recall counterfeiting done. have to manage the situation you scan your client's lifecycle of the grapes that went into is very complex because it goes to after the loss. This problem manufacturing lines to identify Challenges galore it — from cultivation to multiple channels: The How much of this is can be solved by the same areas which need work — has been fermentation and bot- medicines in large already happening in technology which we are going on for a while. What are the key Euromonitor International’s Global Economic tling — or the right type batches go to a ware- India? talking about, that is, RFID learnings here? Forecasts report for the third quarter of the current of food it goes with. You house, then to the dis- We are living in a con- because ultimately it's about We started two years back. One of our year predicts that an overwhelming contribution to can access some of it tributor from where it nected world where tech- track and trace . biggest problems is that we are not as global growth will continue to come from through the label. But if PANKAJ BHARDWAJ goes to the reseller and nology is moving reason- efficient and productive as some developing and emerging economies, with their we insert a chip in that then to the consumer or ably fast. India is not a Can you tell us the other areas manufacturers in some other coun- Senior director, Avery output expected to rise by 4.3 per cent in 2019 and label that you can deci- a hospital. But if you laggard in technology where mass adoption of these tries. Are we able to turn in as much Dennison India will further improve to touch 4.7 per cent from pher with the help of have left a digital adoption. You just need to technologies can be a game work in an eight-hour shift as possibly 2020–2021. In the advanced economies, growth rate your smartphone, it impression, each time it show the consumer the changer? some other evolved manufacturing is expected to be 1.7 per cent in 2019 and may opens the door to a plethora of add- has exchanged hands, you can pretty value. Smartphone Myntra is experi- countries do? The answer is likely to decline to 1.5 per cent annually in 2020–2021, the on information that helps you and easily recall it. So the labels that we penetration in menting with a be a no or maybe and definitely not a report adds. Among the negative global factors the brand to engage with each other. have now would be able to leave a India has been a pilot project yes. Each of them wants to be more which will continue to cast a shadow on growth will You simply scan that chip and it can digital footprint at every step huge success sto- where you efficient and more productive and be tensions from the China-US trade war. Global run a promo or connect you to a link through technology, that is, radio- ry because con- put the churn out more with the machines, trade volume growth has declined, constraining where a celebrity is endorsing the frequency identification or RFID sumers value it. cart to a time and manpower they have. And growth for export-dependent emerging markets wine. So, for our client it provides an technology that we are investing in You need to place this programme is targeting them. and the Eurozone. Stock markets remain fragile and opportunity to run a campaign right big time. make it more and the below their 2018 peaks, it says. there and brand owners too get a lot The third thing the same technol- affordable and check- More on www.business-standard.com MUMBAI | THURSDAY, 26 SEPTEMBER 2019 BRAND WORLD 19 . < HDFC Bank, LIC, TCS most valued brands The top rung is unchanged but overall brand value growth slows to 6% in 2019 from 34% in the previous year: BrandZ

Swiggy and Zomato also took a TOP TEN MOST VALUABLE INDIAN BRANDS big leap forward. Vodafone was Rank Brand Category Brand value Value change the top ranked newcomer to (~ cr) (%) the list of most valued brands 1 HDFC Bank Banks 161,349 5.0 that saw eight new entries in 2019. This is much lower than 2 LIC Insurance 143,078 2.0 the 30 newcomers that 3 TCS* Technology 129,058 21.0 debuted the list in 2018. 4 Airtel Telecom 73,095 -10.0 According to the report 5 State Bank of India Banks 59,750 7.0 brands need to be innovative in dealing with the challenges 6 Kotak Mahindra Banks 54,271 15.0 thrown up by the economy. Jio 7 Asian Paints Paints 49,659 14.0 (Rank 9) is a brand that has 8 Maruti Suzuki Automobiles 42,169 -14.0 read the market accurately, 9 Jio Telecom 38,886 34.0 even taking its rank up a notch as compared to 2018. Talwar 10 ICICI Bank Banks 38,395 11.0 said that Jio did not stop at *Tata Consultancy Services being the cheapest. “They kept their focus on expanding the base of their services and are almost trying to own the smart- phone ecosystem,” he said. Smartphone user numbers in SOHINI DAS vious year. The report calcu- digital ecosystem well and sec- India increased by 18 per cent Mumbai, 25 September lates valuations and ranking ondly they were very prudent in 2018 (the fastest rate of by combining companies’ about their business decisions. growth in the world). DFC Bank beat the financial data with consumer They are with the customers, Jio's peer Airtel (Rank 4) crowds to top the list insight and opinion. walking with the times,” said lost 10 per cent in brand val- H of 75 most valued While brands grappled with Vishikh Talwar, chief client offi- ue, but it ranked above Jio brands in India, keeping its many challenges this year, a cer, Kantar Insights Division. and debutante Vodafone position intact from the previ- few managed to push valua- Banking brands make up (Rank 24) on the list this year. ous year. At second and third tions up significantly. With a the largest share of the BrandZ “Vodafone is not exploiting spots, too, the old order held its 34 per cent jump in brand val- Top 75, with 23 per cent of the the brand value that they grip. Public sector insurer Life uations, Jio led the band of top total brand value tied up in that actually have,” Reddy said. Insurance Corporation of risers, a diverse set of brands on sector. However, in compari- Retail brands have been best India (LIC) and IT major Tata the list. Preeti Reddy, CEO son to other countries, where able to leverage their equity in Consultancy Services (TCS) South Asia, Insights Division, one category dominates the the present scenario, creating retained their second and Kantar, said, “They (Reliance brand ranking (such as France omnichannel platforms and third ranks in the list of most Jio) have built an entire ecosys- with luxury goods, focusing on what the report valued Indian brands. tem around Jio which is feed- US with technology, or labels ‘middle India’. This is the The big change, however, ing into each other and they Indonesia with banking), growing number of people in has been in the overall growth continue to be disruptive.” India’s top brands are much second, third and fourth-tier of brand values in the BrandZ Among the other brands that more evenly dispersed. towns that are changing India’s 2019 Most Valuable Indian increased their valuations at a Consumer tech, retail are traditional urban-rural divide. Brands, a report by WPP and significant clip are Infosys, the fastest-growing categories Both Talwar and Reddy said the Kantar Millward Brown. The TCS, Maggi, Ola, and others. with brand values increasing new band of consumers prefers total value of the top 75 brands HDFC Bank saw its brand 30 per cent. Among the high brands that cater to local needs increased to $228.2 billion, value increases five per cent, performers in this category, and improve their daily life. For growing at a moderate 6 per growing slow but at a steady Flipkart saw a sharp 14 per cent brands keen to get on the list cent over 2018, far slower than clip, to keep the top spot. spike in its valuations while next year, the trick then is to go 34 per cent recorded the pre- “HDFC has utilised the newcomers to the list, Oyo, local and get personal.

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contested the PMLA proceedings, and GST rates on home from 12 per cent to 5 MCA norms to shield the adjudicating authority vide its order per cent in March, but has disallowed dated September 24, 2018, refused to con- deduction of input tax credit. Niranjan IBC bidders... firm the PAO in the proceedings against Hiranandani said there was “no room” to the company and other defendants. cut prices to boost demand. He said JSW Steel had sought relief from statu- The ED, however, filed an appeal according to income tax rules, if a devel- tory authorities in connection with its against the order before the Appellate oper cuts prices by 5 per cent both buyers resolution plan for Bhushan Power & Tribunal, Prevention of Money and sellers have to pay a extra tax. Steel. However, the National Company Laundering Act, which is being contest- “Capital investment, which had Law Tribunal (NCLT) approved its ~19,350 ed by the company. stopped, will start again. When developers crore resolution plan earlier this month invest money, they will invest in new proj- without granting the reliefs. The compa- ects, construct properties and generate ny has appealed against the NCLT order. Extending debt employment. People will buy these prop- In its appeal, JSW has said that in the erties. There will be a multiplier effect,” absence of protection as prayed and lia- instrument Hiranandani said. There has been a large bility resulting from criminal proceed- pile up of residential real estate because of ings, the appellant would not be liable to high prices and slowdown in demand. implement the resolution plan as it maturity... There is unsold residential inventory worth would be unviable and unfeasible. In January, MFs along with other lenders ~90,000 crore, according to some estimates. JSW's concerns stemmed from its had entered into a ‘standstill’ agreement A Mumbai-based property developer experience with Monnet Ispat & Energy, with Essel promoters where it was agreed said when 85 per cent of homebuilders also acquired under the IBC, jointly with that no ‘default’ will be declared on account are incurring losses a cut in taxes will not AION. Claims from different government of a steep fall in the price of Zee shares, help. “If the government wants to boost departments had come up in Monnet. which were pledged by the promoters as housing demand, they should cut housing Tata Steel, which acquired Bhushan collateral. Also, the creditors decided to give loan rates and individual income tax Steel for ~35,200 crore, has also faced time to the promoters till September 30 to rates,” he said. claims from different authorities. settle the dues. This also extended the Tata Steel BSL (formerly Bhushan maturity of certain debt instruments till PM rolls out red Steel) mentioned in its annual report that the end of September. the company was impleaded in a pro- On Wednesday, Essel Group said its carpet ... ceeding initiated by the Directorate of lenders had agreed to further extend the Enforcement (ED) relating to the confir- timeline beyond September-end, enabling “Your desires and our dreams match mation of a provisional attachment order the group to ‘optimise value output from the perfectly. Your technology and our tal- (PAO) of ~50 lakh (PMLA proceeding). sale of its assets’. ent can change the world. Your scale The amount was seized by the Central Earlier this month, the group cleared and our skills can speed up global eco- Bureau of Investigation in relation to an part of its dues by transferring the proceeds nomic growth,” he said. “Your prudent allegation of payment of illegal gratifica- from the promoters’ stake sale in Zee method and our pragmatic mind can tion made against the previous managing Entertainment. The payment halved the write new stories in management. Your director of the company. The company outstanding exposure of most MFs exposed rational ways and our human values can to LAS structures of Essel Group show the path which the world is look- firms. ing for. And if there is any gap anywhere, The promoters had reached an I will personally act as a bridge.” > BS SUDOKU # 2853 agreement with Invesco Modi said democracy and an English- Oppenheimer to sell up to an 11 based judicial system gave added confi- per cent stake in Zee for dence to investors as there would be no ~4,224 crore. problem of interpretation. While some MFs are believed to The government is looking at investing have sold the pledged shares of ~100 trillion in building new airports, rail- Zee to recover their dues, some way lines, electrification, laying new roads fund houses have decided to give and giving houses to all. “Infrastructure is the Essel group promoters more a priority,” Modi emphasised. time to pay up the remaining dues. “We have taken numerous decisions to “We feel that promoters can increase investors confidence including realise the right value of their stake scraping of 50-old laws which were com- in Zee if they are given additional ing in way of development,” he said. “This time. This would lead to better is just the beginning. We have a long recovery for investors,” said a sen- innings ahead. The world business has a ior executive. golden opportunity to partner with India Overall, the MF industry had a in this journey.” ~5,000-~6,000 crore of debt expo- Stating that the target of nearly dou- sure to Essel Group firms before bling the economy to $5 trillion by 2024 the first tranche of dues were was achievable, he said about $1 trillion received. was added to the size of the economy dur- SOLUTION TO #2852 Medium: ing the last five years.  Modi also interacted with over 40 Solution No room to cut business leaders and American CEOs, tomorrow highlighting the steps taken by India to home prices... build a $5 trillion economy. “Captains of HOW TO PLAY industry interact with PM @naren- Fill in the grid so Sharma said input costs for devel- dramodi in New York. The extensive that every row, opers had gone up since the intro- agenda includes harnessing investment every column duction of the new goods and serv- opportunities in India and boosting and every 3x3 ices tax rates, which do not allow commercial linkages between India and box contains deduction of input tax credit. USA,” the Prime Minister's Office the digits 1 to 9 The government reduced the tweeted. 20 MUMBAI | THURSDAY, 26 SEPTEMBER 2019 1 > US House Johnson offers to allowno-confidence vote Ambani tops Hurun rich list begins Trump BLOOMBERG a potential general election. propose a motion of no confi- London, 25 September Speaking to the Commons, dence in the government. He Johnson criticised the Supreme also told minor opposition par- SACHIN P MAMPATTA Global solutions to address impeachment British Prime Minister Boris Court judgment, and said vot- ties that they too could do so, Mumbai, 25 September THE RICHEST such problems include insur- Johnson, facing the biggest ers wanted politicians to deliver and the government would ance and bank loans against inquiry political crisis of his career, is Brexit by the end of October, ensure there was time to debate wenty-five of the rich- business. He added that an addressing Parliament for the with no deal if necessary. He it. After opposition parties twice est Indians hold wealth 1 inheritance tax is still four-five REUTERS first time since challenged the rejected an attempt by Johnson T which is equivalent to a MUKESH AMBANI years away. Washington, 25 September Britain’s opposition parties to force an early general elec- tenth of the country’s gross do- Anas Rahman Junaid, Supreme Court Boris Johnson to call a vote of tion, a confidence vote would mestic product (GDP). ~380,700 cr managing director and chief Democrats in the US House ruled his deci- challenged the confidence in his offer Johnson another path to The richest in the list researcher, Hurun Report of Representatives on sion to suspend opposition parties to government as he national poll. If he loses such a includes Mukesh Ambani, S P India, suggested that one Wednesday launched a for- the legislature call a vote of sought again to vote, the House of Commons Hinduja and family, Azim should not see the rise in mal impeachment inquiry was illegal. confidence in his force a general will have 14 days in which to Premji, L N Mittal and Gautam GDP as resulting in the cre- into US President Donald He has government as he election. form an alternative government Adani, including their respec- ation of billionaires. It is the Trump, accusing him of seek- offered all oppo- sought again to force Johnson threw an election will follow. “This tive family holdings. The num- 2 3 billionaires who have driven ing foreign help to smear sition political a general election down the gauntlet parliament must either stand bers are based on the IIFL S P HINDUJA AZIM GDP growth. Democratic rival Joe Biden parties the to opposition Lab- aside and let this government Wealth Hurun India Rich List &FAMILY PREMJI “In my perspective, wealth ahead of next year’s election. chance to trigger our Party Leader get Brexit done or bring a vote of 2019 released on Wednesday. creation is fantastic, and when The inquiry ensures a par- a formal vote of no-confidence Jeremy Corbyn, telling him he confidence and finally face a The report identified 953 ~186,500 cr ~117,100 cr it is done transparently, it des- tisan fight in Congress and in his government, a move that has until the Commons closes day of reckoning with the vot- names, which meet their min- erves a lot of respect because it on the presidential campaign would put Britain on course for for business on Wednesday to ers,” Johnson said. imum net worth criteria of has a lot of positive impacts on trail in coming months, ener- ~1,000 crore. The average per- the overall economy,” he said. gising the most committed son on the list is 60 years old 5 Notable mentions in the Republican and Democratic with a net worth of ~5,278 4 top 10 include Gautam Adani supporters and overshadow- Oil declines as crore. Fifty-three per cent of GAUTAM and family, whose wealth rose ing the Democratic race for the total wealth on the list is LNMITTAL ADANI 33 per cent to ~94,500 crore, the nomination to face Saudi Arabia inherited. & FAMILY & FAMILY according to the report. This Trump in the November In comparison, the catapulted him to the top five. 2020 election. US House restores capacity National Sample Survey Office ~107,300 cr ~94,500 cr Meanwhile, Dilip Shanghvi, Speaker Nancy Pelosi Oil extended declines as Saudi (NSSO) numbers peg the aver- Source: IIFL Wealth Hurun India Rich List 2019 once India’s richest man, saw a announced the inquiry after a Arabia was said to be ahead age rural household assets at 20 per cent decline in his closed-door meeting with of schedule in restoring its around ~10 lakh. The average chance to become an entre- Shah believes that estate wealth to ~71,500 crore. Democratic lawmakers, say- output capacity. Futures lost urban household’s assets are preneur. They are backed by duty is likely to come in as A quarter in the list (246) ing Trump’s actions under- as much as 2 per cent in New around ~23 lakh, according to institutional capital. The economies transform from lives in Mumbai. New Delhi is mined national security and York after dropping 2.3 per the 2013 Household Assets and opportunity is available to developing to developed, in second with 175. Bengaluru is violated the US Constitution. cent on Tuesday. Saudi Liabilities report. The increas- many more. I think we are still response to a question on the third with 77. Smaller cities, “The president must be Aramco’s production capacity ing income gap is a key con- far away from seeing some matter. There are challenges including Bikaner, Indore held accountable. No one is now exceeds 11 million bar- cern among the wealthy, social unrest because of the that may need to be looked at and Chandigarh have one above the law,” said Pelosi, rels a day, beating a self-imp- according to Yatin Shah, co- income gap,” he said. before such a tax can come in. entry each. Rajnandgaon has who for months had been osed deadline by about a founder and executive di- Five of the fastest wealth For example, he pointed out two entries while Kozhikode reluctant to embrace an imp- week, sources. BLOOMBERG rector, IIFL Wealth Managem- creators on the list are from that 90 per cent of India’s net has three. eachment effort. US stocks fell ent. He believes that equality start-ups which have reached a worth is illiquid and locked-in The top three cities have for a fourth day as the impea- of opportunities has seen billion-dollar valuation, the so- in the form of business and seen their share in new addi- chment drama intensified, an improvement. called unicorns. The overall real estate assets. It is easier to tions to the rich list fall from 59 adding another risk to mark- “Increasingly, more and list includes names from 41 collect an estate duty on liq- per cent last year to 36 per cent ets already on edge over trade more people are getting a industries in total. uid assets. in 2019. and slowing global growth. Googledealsblowto EU copyrightlawinFrance

AFP/PTI groups who had given their per- advertising market. lisher would have to decide if it content will appear in the Paris, 25 September mission for it to be used for free. The new rules create “neigh- would allow Google to show results, resulting in a loss of vis- The announcement, which bouring rights” to “snippets” of con- ibility for the publisher. Google said on Wednesday it will result in free content gain- ensure a form of copy- Announcement tent or thumbnail The move is a major blow to will not pay European media ing higher visibility, comes right protection — and comes afterFrance images alongside media organisations who have outlets for using their articles, after France became the first compensation — for became the first search results in seen their advertising revenues pictures and videos in its EU country to adopt the bloc’s media firms when their EU countryto France. gobbled up by Google, Facebook searches in France, in a move wide-ranging copyright reform content is used on oth- adopt the bloc’s If they accept, and other US Internet compa- that will undercut a new EU in July. The legislation is aimed er websites such as wide-ranging publishers will nies. Refusing to allow Google copyright law. at ensuring media firms are search engines. copyright reform not receive any permission could sharply The tech giant said it would paid for original content dis- Richard Gingras, in July compensation reduce online audiences, since only display content in its played by Google, Facebook, Google’s vice-president from Google, he Internet users are more likely to search engine results and on and other technology giants, for news, told journalists in Paris said. But if they don’t, only a click on results containing Google News from media which dominate the online that a Europe-based news pub- headline and a bare link to their excerpts and images.