THURSDAY, 2 JANUARY 2020 16 pages in 1 section www.business-standard.com (CITY) ~9.00 VOLUME XXIV NUMBER 100

THE MARKETS ON WEDNESDAY Chg# Sensex 41,306.0 52.3 Nifty 12,182.5 14.0 STRATEGY P15 BACK PAGE P16 Nifty futures* 12,243.8 61.3 Dollar ~71.2 ~71.4** Euro ~79.9 ~80.1** CONSUMER BEHAVIOUR CHANDRAYAAN-3 NEXT YEAR, Brent crude ($/bbl)## 66.3## 66.4** Gold (10 gm)### ~38,962.0 ~121.0 IN THE 2020s 4 CHOSEN FOR GAGANYAAN *(Jan.) 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 CABLE TV TO COST GST collection I-T vets foreign LESS AS TRAI AMENDS New projects surge contribution TARIFF STRUCTURE crosses ~1 trn, The Telecom Regulatory Authority of sought by has released amendments to the New Tariff Order, in which it has directed in December qtr but misses target Tata trust cable operators to provide 200 channels for ~153. The regulator has also set DILASHA SETH SHRIMI CHOUDHARY January 15 as the deadline for 37% y-o-y increase despite a fall in capacity utilisation New Delhi, 1 January New Delhi, 1 January broadcasters to announce their new MOP-UP pricing structure. At present, direct-to- SACHIN P MAMPATTA & AMRITHA PILLAY Goods and services tax (GST) The income-tax (I-T) department is exam- home or cable TV operators provide only Mumbai, 1 January collection crossed the ~1 tril- TREND ining the foreign contributions sought by 100 channels for a network capacity fee lion mark for the second Figures in ~cr the Navajbai Ratan Tata Trust (NRTT) as a of ~153 (~130 excluding taxes). 3 > nvestment in new projects increased by straight month in December, non-profitable entity in December 2015, more than ~1 trillion during October- but fell short of the ~1.1 trillion even after the Trust offered to surrender its ECONOMY P5 December 2019 over the same period in the target set for the last four charitable trust status earlier that year. The previous year. months of 2019-20. The latest NRTT is among the six Tata Trusts that I   FDI rises 15% during There was ~3.1 trillion in new projects in numbers, however, indicated 2018 2019 had their registrations cancelled by the I-T December 2018. This has risen by 37.4 per cent on the stabilisation of revenue Apr 1,03,459 department in October. Apr-Sept to $26 bn a year-on-year basis to ~4.26 trillion in December collection owing to anti-eva- 1,13,865 The Trust had made an application on Inbound foreign direct equity last year, showed the data from project-tracker sion measures introduced by May 94,016 December 10, 2015, under Section 11 (1) of investments rose 15 per cent in the Centre for Monitoring Indian Economy (CMIE). the government. 1,00,289 the Foreign Contribution Regulation Act April-September period of the current The body releases capex data at the end of The mop-up stood at ~1.031 Jun 95,610 (FCRA), for acceptancing foreign contri- fiscal year, according to the data released every quarter. SIGNS OF INFRA BOOST trillion in December, slightly 99,939 butions by an association having a definite by the Department for Promotion of It also showed the proportion of “stalled proj- Figures in ~ trillion lower than the seven-month cultural, economic, educational, religious Jul 96,483 Industry and Internal Trade. The figures ects” is down 81.8 per cent to ~58,000 crore. high of ~1.034 trillion collected or social programme. This requisition was showed that in the first half of FY20, Completed projects remain at the same level. The in November. On a year-on- 1,02,083 made after it had given up Trust status in equity inflows amounted to $26.09 billi- number for December 2018 shows ~1.37 trillion. It year basis, the GST receipts in Aug 93,960 February 2015. on, up from the $22.66 billion received is ~1.36 trillion in December 2019. December 2019 posted a 98,202 In the FCRA application, the Trust had in the corresponding period of the The rise in new projects is despite a fall in growth rate of 8.9 per cent, the Sep 94,442 mentioned the previous year. capacity utilisation. It was at 68.9 per cent in the data released by the finance 91,916 detailed activities September quarter, noted the Reserve Bank of ministry showed on Oct 1,00,710 of the NRTT and The requisition India in its December 19 Monetary Policy Wednesday. 95,380 said that it was was made after ECONOMY & PUBLIC AFFAIRS P4 Committee meeting minutes. These figures are for GST Nov 97,637 established in 1974 the Navajbai Iran crude oil imports It was at 73.6 per cent previously. A similar on the transactions done in 1,03,492 by Ratan Naval Ratan Tata Trust decline is seen on a seasonally November and collected in Dec 95,726 Tata, in the memo- had given up slow to a trickle PAGE 9 adjusted basis as well. the month of December. 1,03,184 ry of his grand- Trust status in Imports of crude oil from Iran dipped to “Seasonally adjusted CU Although the December fig- mother Lady February 2015 EDIT: PUSH FOR Source: Finance Ministry 1.7 million tonnes (mt) in the current INFRASTRUCTURE (Capacity Utilisation) also fell ures come as a breather for the Navajbai Ratan financial year (2019-20, or FY20), down to 69.8 per cent from 74.6 per government, which is facing Tata. It further said from 23.9 mt in 2018-19, after India cent during the same period,” it said. This means intense revenue stress, these cent growth, the highest dur- that the Trust was registered with the office stopped imports from the West Asian that companies are increasingly unable to use are lower than the numbers ing the year. GST collection on of the charity commissioner, Mumbai, and country in May. In FY19, Iran was the third- their existing production capacity, which gives needed to meet the steep target imports continued to witness is registered under Section 12A of the largest crude exporter to India. Assuming them limited incentives to invest in adding capac- for 2019-20. a contraction of 10 per cent, as Income-tax Act, 1961. the United States' sanctions are not lifted, ity. This has weighed on capital goods companies. Note: December 2018 numbers are based on data retrieved earlier; Revenue Secretary A B against a fall of 13 per cent in Section 12A of the I-T Act enables a few crude oil imports from Iran will be the low- Marquee firms such ABB India and Siemens figures rounded off Source: CMIE Pandey has pressed for a November, indicating persist- types of organisations to get exemption est in at least 12 years, shows the available are seeing lower demand, noted brokerage firm monthly GST collection tar- ent weakness in domestic from income tax. When a trust or non-prof- data compiled by Business Standard. Motilal Oswal Financial Services. Growth in order at the banks’ lending data for industries, it is neg- get of around ~1.1 trillion demand and production. it organisation gets registered under Section flow fell to 5 per cent for ABB, according to the ative, so banks are not lending for capital forma- between December 2019 and The ministry also 12A, it is further eligible to get exemption recent quarterly data. Siemens’ order flow fell 14 tion. Capital investment is then coming from March 2020. Of these four released state-wise GST col- from income tax. Trusts and non-govern- COMPANIES P3 per cent. This, in turn, is said to be because of a PSUs borrowing from the bond market,” said months, ~1.25 trillion collec- lection figures from domes- ment organisations which don’t make prof- Apollo, Varde pull out slowdown in other markets such as auto, and Madan Sabnavis, chief economist, CARE Ratings. tion has to be achieved in at tic transactions. Arunchal its from their financial transactions are eli- food and beverages, said the 6th December Sector M S Unnikrishnan, managing director and chief least one month, he had told Pradesh witnessed the high- gible to register for 12A. If any non-profitable of race for Altico Update report, authored by research analysts executive officer (CEO), Thermax, said: “There tax officials. est growth at 124 per cent to trust or NGO has not registered for 12A, its Apollo Global Management and Varde Nilesh Bhaiya and Pratik Singh. were a couple of refinery projects awarded in the GST collection on domestic ~58 crore in December 2019 financial receipts or transactions would be Partners are no longer considering A public sector undertaking (PSU) push could December quarter from the public sector. Awarding transactions witnessed 16 per year-on-year. considered taxable. bidding for Altico Capital India, according be driving some of the gains. for road projects continued. There are also awards Apart from the activities, the Trust had to people familiar with the matter, “This should be coming from public sector in the railways and metro projects segment.” also submitted the trust deed along with an narrowing the number of suitors for the units. What they are borrowing from the market The government has also sought to push oth- P2 LAST YEAR’S SALES WORST YEAR-END FAILS TO audited statement of accounts for the past troubled shadow lender. The firms pulled they are using for capital investment. If you look er investment. Turn to Page 13 > IN A DECADE FOR MARUTI CHEER CAR FIRMS three financial years (FY13, FY14 and FY15). out because they were unwilling to meet In an emailed response to this newspa- creditor demands to inject as much as ~20 per, the Tata Trusts spokesperson said, billion ($280 million) of fresh equity into “Since the Trust was registered under 12A Altico, two people said, asking not to be of the I-T Act, for those financial years, by identified as the information is private. way of information it was so mentioned. It ‘We’ve seen healthy growth in term loans’ was an inadvertent omission not to have PHOTO: KAMLESH D PEDNEKAR mentioned that the Trust had surrendered COMPANIES P2 Amid the slowing economy, muted credit growth, and the Reserve ’s (RBI’s) its 12A registration in February 2015.” Panel to facilitate sale warning that non-performing assets may rise, RAJNISH KUMAR, chairman, Turn to Page 13 > (SBI), tells Subrata Panda, Abhijit Lele and Dev Chatterjee in an interview that the economy has of BSNL realty assets bottomed out and there is a need to revive the capital expenditure cycle. He also emphasises The Centre has started the process for sale the success of the Insolvency and Bankruptcy Code and says that lenders need at least nine to of Bharat Sanchar Nigam’s (BSNL’s) assets. 10 months to resolve stressed accounts under the RBI’s June 7 circular. Edited excerpts: ELECTRICAL EQUIPMENT It has set up of an inter-ministerial group that would shortlist and prioritise selling How do you assess the How is your corporate IT IS DIFFICULT TO RESOLVE A INDUSTRY STARES AT real estate assets of the cash-strapped economic situation now? lending segment doing? COMPANY UNDER THE JUNE 7 DUES WORTH ~800 CR company. BSNL is yet to pay salaries to its I think the economy has bot- Working capital utilisation CIRCULAR WITHIN SIX-SEVEN staff for November. The company has tomed out, and we should is still subdued, and is less MONTHS. SO, FOR THE ICA TO The electrical equipment industry is identified 40 land parcels worth about see an upward than what it was in FUNCTION PROPERLY, AT staring at dues of more than ~800 ~10,000 crore to be disposed of and will trend from now. March. On the oth- crore, payable for a period of over three help in deleveraging its balance sheet. The third quarter er hand, we have LEAST NINE TO 10 MONTHS years. These are mostly from states and of FY20 has been had healthy growth SHOULD BE GIVEN central government-owned companies, good. There are in the term loans including BHEL and Power Grid. THE SMART INVESTOR P10 global headwinds segment. As of years. In our domestic mar- Some of the biggest defaulters are the Benchmark indices begin and all the major December, SBI has ket, our advances are lag- power departments of Uttar Pradesh, economies are under pres- seen term loans grow 16 per ging by ~40,000 crore from Rajasthan, Tamil Nadu and Andhra new year on a flat note sure, apart from the US. So, cent year-on-year to ~1.72 what they were last year. Pradesh. The industry, in its latest The benchmark indices started the New this is impacting our trillion. Last year, it was an However, we have seen good exercise of collating dues, said around 25 Year on a positive note with the Sensex exports. But, on the domes- exceptional situation for us growth in the international per cent of the companies did not gaining 52.28 points, or 0.13 per cent, tic front, a revival of the because we had very large banking group. So, in terms disclose figures. So, on an average to close at 41,306.02 on Wednesday capex cycle of the private credit disbursements in the of overall advances, we are estimate, the dues could go up to more as financials, IT, FMCG and power sector is the most important second half. This year, it is more or less at the March than ~1,500 crore, said the Indian advanced. The broader Nifty closed thing. And, that can happen more in line with what used 2019 level. Electrical and Electronics Manufacturers 14.05 points, or 0.12 per cent, higher with infrastructure upgrade. to happen in the previous Turn to Page 13 > Association. SHREYA JAI writes 4 > at 12,182.50 with 23 of its constituents ending in the green. Pharma industry gets ‘green’ signal in New Year Drug makers allowed to tweak product mix or quantity without fresh environment clearance until effluent load is same

~10,000 crore: 70%: Share of active SHINE JACOB & SOHINI DAS Such clearances used to take four to eight New Delhi/Mumbai, 1 January months, according to the industry estimates. Expected additional pharmaceutical BOOSTER Following the latest decision, drug companies will investment annually ingredients (API) that In what can be a game changer for the Indian only have to obtain a ‘no increase in pollution load’ PERSONAL FINANCE: Choose DOSE owing to the decision India imports from China the right financial advisor 14 > pharmaceutical industry, the Ministry of certificate from the state pollution control board Environment and Forests (MoEF) has cleared a concerned for any expansion, the official added. You are spoilt for choice, but understand | According to the approved proposal, proposal to allow drug manufacturers to tweak This would mean ease of doing business and every aspect of the model before drug companies will have to only their product mix or raw materials used without a companies will be able to respond to market investing, writes BINDISHA SARANG obtain a 'no increase in pollution fresh environmental clearance as long as their opportunities faster. load' certificate from state pollution pollution load remains constant. The move is The Department of Pharmaceuticals (DoP) has control board for expected to bring much sought-after relief for been pursuing the issue with the environment WORLD P6 any expansion bulk drug makers, and the industry feels it can ministry for some time. “It is a significant step in How Carlos Ghosn trigger fresh investments worth ~10,000 crore the right direction and will help the local drug | Increase in every year for the next few years. industry. We are very happy that the MoEF pulled off a Houdini production According to government sources, a notification considered the industry’s request,” P D Vaghela, In one speculative account, which cited no capacity should is expected soon. “Earlier, clearance was required secretary, DoP, said. sources, Lebanese television station MTV not be more for any change in raw materials or product mix or Last year, the Indian Drug Manufacturers’ reported that the former head of Nissan change in quantities within products or number of Association (IDMA) had approached the Motor and Renault SA Carlos Ghosn smug- than 50% of products in the same category for which approval government for an exemption for bulk drug gled himself out of Japan in a large musical what was had been granted. Now, this has been given a waiver, manufacturers from fresh clearances in the case of a instrument box after a Christmas band permitted in provided there is no increase in pollution load and change in product mix at existing manufacturing visited his residence in Tokyo. He was then the earlier the increase in production capacity is not more than facilities. Following this, the matter was taken up by shipped out of the country and later entered environmental 50 per cent of the production capacity permitted in the Central Pollution Control Board (CPCB) and a Lebanon from Turkey on a private plane. ILLUSTRATION: AJAY MOHANTY clearance the earlier environmental clearance,” said a source. final clearance was given by the MoEF. Turn to Page 13 > 2 COMPANIES MUMBAI | THURSDAY, 2 JANUARY 2020 > Titan Company > Adani Green Energy > Larsen & Toubro > Escorts > Dalmia Bharat Sugar and Industries STOCKS Top loser among S&P BSE Commissioned 75 Mw Government unveiled December tractor Sugar stocks extend IN THE NEWS Sensex stocks wind power project ~102-trillion infrastructure sales down 10% at rally on positive outlook; plan to boost growth 4,114 units year-on-year soar 47% in one week

~1,154.85 CLOSE ~174.80 CLOSE ~1,310.10 CLOSE ~606.20 CLOSE ~123.80 CLOSE * OVER PREVIOUS CLOSE 2.76% UP* 4.98% UP* 1.00% UP* 3.70% DOWN* 17.91% UP* > . IN BRIEF For Maruti, last ~700-crore investment on Last month of 2019 fails hold for a yr: Hero Electric year’s business Hero Electric has put on hold investment of up to ~700 crore to cheer car companies by a year with the sector taking a worst in decade nosedive as FAME II, scheme aimed to promote electric vehicles (EVs), Firms say sales in near future may remain subdued as BS-IV is almost over CAR SALES (nos) failed to deliver, according to a top company official. Calling for a ARINDAM MAJUMDER dip in commercial vehicle complete revamp of the policy, the New Delhi, 1 January sales. M&M said domestic auto company wants the government to include low speed two- sales came at 37,081 units in wheelers for subsidy, arguing that for mass adoption of EVs in utomobile sales contin- December, compared to 36,690 India, these cost-effective vehicles are critical. “From an ued to slip in December vehicles sold a year back. industry standpoint, there was a certain trajectory which was A despite a faint uptick Passenger vehicles clocked going on when we had FAME I. With the coming in of FAME II, seen in the two preceding 4 per cent rise in sales to whatever be the logic and reason, the manner in which FAME II months, worrying the industry 15,691, while utility vehicles was introduced, the whole industry took a downturn and now that a recovery in the Indian posted 10 per cent rise to Source: Bloomberg the industry is recovering from that,” Hero Electric Managing car market is not yet in sight. 15,225. Commercial vehicle Director Naveen Munjal (pictured), said. PTI< Industry executives said sales, however, slipped 5 per SHALLY SETH MOHILE tives, he said, adding a low deal- sales in the near future might cent to 16,018, reflecting a Mumbai, 1 January er inventory will aid sales. remain subdued, because com- slowdown in the economy and He, however, cautioned Walmart India names Gujarat Narmada panies have mostly exhausted rural consumption. Maruti Suzuki India ended that the cost of ownership is Sameer Aggarwal gets ~15K-cr notice their Bharat Stage (BS)-IV stock Veejay Ram Nakra, chief 2019 with a drop of 12.3 per cent expected to remain elevated and will now be selling BS-VI of sales and marketing, auto- in its annual sales. The fall, the this year. This, in turn, could deputy chief executive on telecom dues vehicles that are costlier. “With motive division, M&M, steepest in almost a decade, be a deterrent. He said sales major Walmart India has Gujarat Narmada Valley the impending price hikes of said, “Our performance in came on the back of poor eco- might stabilise in the months elevated its Chief Business Fertilizers & Chemicals (GNFC) 13-15 per cent for BS-VI models December is according to nomic growth and a slowdown subsequent to BS-VI. Launch Officer Sameer Aggarwal to the has received a demand notice coming in from April, demand year-end sales outlook. We in overall consumption. India’s of petrol BS-VI variants of the post of Deputy CEO. Aggarwal’s from the Department of headwinds should continue in SALES SLIP IN DECEMBER, AFTER UPTICK are also comfortable with our economy grew at an anaemic Brezza and S-Cross will also appointment comes into effect Telecommunications (DoT) for 2020-21 for the two-wheeler overall stock levels. We are 4.5 per cent in the September bump up Maruti’s sales. from Wednesday. He will report service dues worth over segment,” Nomura said UNITS SOLD fully equipped to roll out our quarter, the lowest in five years. Meanwhile, Maruti is bet- to Walmart India CEO Krish Iyer, ~15,000 crore. Inclusive of in a report. Company Dec 2019 Dec 2018 % chg BS-VI products and have tak- Entering 2020, Maruti is ting big on CNG models to fill the company said. “Sameer interest, the demand notice by Retail sales growth has been Maruti Suzuki 124,375 121,479 2.38 en all requisite measures for a optimistic, even as it remains the void that gets created after Aggarwal has been appointed DoT seeks telecom service dues sliding since August 2019 amid smooth transition over the cautious of the disruptions it discontinues production of deputy chief executive officer, worth roughly ~15,020 crore tightening credit, dismal cus- Tata Motors 46,903 54,439 -13.84 next three months.” expected in the next couple of diesel cars from April. It expects Walmart India effective ($2.1 billion) for V-SAT & ISP tomer sentiment, and lack of Honda Cars 8,412 13,139 -35.98 Commercial vehicle sales months, ahead of the imple- sales of CNG models to get a January 1, 2020,” a Walmart licences that GNFC held during clarity in the transition towards remained subdued due to a mentation of BS-VI and high boost if the government cuts EicherMotors 4,910 6,113 -19.68 India spokesperson said. PTI< financial years 2005-06 to BS-VI emission norms. slowdown in economic activi- cost of ownership, said a top the goods and services tax 2018-19, the company said in a “2019 has been a challeng- Mahindra & Mahindra 37,081 36,690 1.07 ty. However, company execu- executive of the company. (GST) rate on such vehicles. BSE filing on Wednesday. ing year for the Indian auto- Hyundai 50,135 55,638 -9.89 tives said passenger enquiries During the year, the maker A slew of policy changes, Google to end ‘Double BS REPORTER< motive industry. Even in such are growing as BS-VI transition of the bestselling Baleno and increase in the cost of owner- Irish, Dutch sandwich’ adverse conditions, Hyundai TOTAL 271,816 287,498 -5.45 is coming near. Brezza, saw its sales volumes ship which came on back of Motor India launched four new Source: Companies “Overall sales continued to contract to 1.6 million units in higher insurance premium, tax scheme Private companies to benchmark products in differ- grow for the second month, the domestic market, from 1.8 increase in road tax, and a liq- Google parent Alphabet will no generate 700,000 ent segments as committed. As a slump in small cars. “We have to carefully watch with medium and heavy com- million units a year ago, accord- uidity crisis weighed on buyer longer use an intellectual prop- we gear-up for 2020, we will In a regulatory filing, how the consumer will react, mercial vehicle sales being ing to Bloomberg. This is only sentiment. Confusion over the erty licensing scheme, known jobs in 2020: Survey offer BS-VI in both petrol and Maruti said it sold 124,375 vehi- and that’s the reason why we higher than November 2019 the second time that the local switch to BS-VI and talks of a as the ‘Double Irish, Dutch With bullish hiring sentiments, diesel engines across different cles in the domestic market in are cautious and not taking a by 15 per cent after posting a arm of the Japanese firm has possible reduction in GST rate sandwich’, which allowed it to private sector players are likely models in our product portfo- December, compared to position on whether there will 23 per cent growth last month. seen sales drop in 12 years. on auto also prompted buyers delay paying US taxes, 2018 tax to create 700,000 jobs and the lio,” said Tarun Garg, director 121,479 vehicles sold in the be a change in demand Enquiries continued to Maruti’s sales skidded 8.1 per to postpone purchases, said filings show. Google confirmed overall increase in salaries is of sales, marketing and serv- same month a year back. Sales (improvement in sales) in the increase, with fleet owners real- cent to 1.1 million units in 2011, Srivastava. A deacceleration of it would scrap the licencing projected to be around 8 per ice, Hyundai Motor India. of the firm’s popular models industry,” Shashank Srivastava, ising the economic benefits of from 1.2 million a year ago. the economy also added to the structure, saying this was in line cent in the New Year, With total sales of 133,296 such as the Alto, categorised by executive director, marketing replacing their older vehicles. “2019 was quite challenging. woes, he said. with international rules and according to a survey. passenger vehicles, the coun- the company as ‘mini’ cars, and sales, Maruti Suzuki India, Increasing enquiries and lower Going forward, there are rea- “All adverse factors acted followed changes to US tax law MyHiringClub.com & Sarkari- try’s leading carmaker Maruti dropped 13.6 per cent to 23,883 said a few days back. stocks augur well for volumes sons to be cautious as well as together in 2019,” said Mitul in 2017. Dutch filings showed Naukri.info Employment Suzuki India recorded 2.4 per units. This was more than off- Mahindra & Mahindra and realisations, an early indi- optimistic,” said Shashank Shah, analyst at Reliance that in 2018 Google moved Trend Survey (MSETS) 2020 cent year-on-year rise in car set by a near 28 per cent rise in (M&M) reported a 1 per cent cation of which can be seen in Srivastava, executive director, Securities, pointing out that the ^21.8 billion through its Dutch indicated that most employers sales during December, as high- its ‘compact’ category cars, rise in automobile sales in December,” said Girish Wagh, marketing and sales. A reduc- headwinds would continue for holding firm to Bermuda. are optimistic about their er demand for compact models such as the new WagonR, Swift, December, as a rise in passen- president, commercial vehicles tion in finance rates and an the next couple of months till REUTERS< hiring plans. PTI< such as the new WagonR offset Celerio, and Dzire to 65,673. ger and utility vehicles offset a business unit, Tata Motors. uptick in rural sales are posi- BS-VI takes effect.

Panel begins process for sale of BSNL assets START-UPS CONCENTRATED MEGHA MANCHANDA etise assets worth ~37,500 crore restructure debt and meet other New Delhi, 1 January in the next three years. expenses. The bond will have to In October, the Centre be serviced by the PSUs only. The Union government has approved a ~69,000 crore revival Over 92,000 employees of IN A FEW STATES: SURVEY started the process of selling package for BSNL and Mahan- state-run BSNL and MTNL have A survey on start-ups by the Reserve Bank products they would provide. Bharat Sanchar Nigam’s agar Telephone Nigam (MTNL). opted for the recently annou- of India (RBI) has found that India’s start- The annual turnover for over one-fourth (BSNL’s) assets. The governm- It includes merging the two loss- nced voluntary retirement up culture is concentrated in a few states, of the respondents was up to ~10 lakh, net recently set up an inter-min- making firms, monetising their scheme (VRS). Nearly 100,000 and that most of these emerging firms whereas around 20 per cent start-ups did isterial group that would short- assets, and giving retirement BSNL employees are eligible for took shape in the past three years, taking not report any revenue generation. Less list and prioritise selling real package to employ- the VRS out of its estate assets of the cash- ees, so that the com- BSNL has total staff strength of funds from family and friends. The survey than one-fifth of the respondents reported strapped company. bined entity turns identified 40 about 150,000. The was conducted during November 2018 and that their turnover exceeded ~1 crore. BSNL is yet to pay salaries to profitable in two land parcels effective date of VRS April 2019 with 1,246 start-up participants. Around 43 per cent of the start-ups BHARAT its staff for November. “The years. The rescue worth about under the present “Nearly three-fourths of the participants mobilised funding from families and SANCHAR group comprises officials package approved ~10,000 crore to scheme is January were from Karnataka, Maharashtra, friends, apart from own funds. About 13 per from the Department of includes infusion of be disposed of 31. The amount of Telangana, Delhi, and Tamil Nadu, cent of the start-ups received international NIGAM Investment and Public Asset ~20,140 crore for pur- ex-gratia for any eli- indicating large concentration of the funding. Only 1.7 per cent of the start-ups (~ crore) Management, Department of chase of 4G spectrum and ~3,674 gible employee will be equal to start-up sector in India in a few states,” availed of external commercial borrowings. Telecommunications, and crore for goods and services tax 35 days salary for each complet- the RBI’s pilot survey on Indian Over three-fourth of the start-ups had Year-end Networth Total Current Net Net BSNL,” said an official. (GST) to be paid on spectrum ed year of service and 25 days start-up sector revealed. up to ~1 crore of capital investment, debt liabilities sales profit The company has identified allocation. salary for every year of service Nearly half of the start-ups were from whereas around 41 per cent infused capital FY14 50,033 4,459 15,530 26,153 -7,020 40 land parcels worth about It also calls for companies to left until superannuation. six sectors — agriculture, data and up to ~20 lakh each. On the other hand, FY15 40,349 6,385 15,635 27,242 -8,234 ~10,000 crore to be disposed of raise ~15,000 crore debt on the MTNL has reported losses in analytics, education, health, IT nearly 5 per cent start-ups infused capital and will help in de-leveraging sovereign guarantee. The gov- nine of the past 10 years and FY16 102,460 15,383 18,078 28,381 -4,859 consulting/solution, and manufacturing. above ~10 crore each. Nearly three-fourth its balance sheet. It will also pro- ernment has set aside ~17,160 BSNL, too, has been ringing in The respondents said there was market or of the start-ups had working capital FY17 97,674 11,313 18,676 28,404 -4,793 vide funds for 4G network roll- crore as retirement package and losses since 2010. Total debt of industry demand, both in domestic and requirement of more than ~10 lakh a year. FY18 89,672 17,261 22,472 22,668 -7,993 out, expected in the second half ~12,768 crore towards retirement both the companies stood at of 2020. liability. The proceeds of the ~40,000 crore, of which half the international markets, for the services and COMPILED BY ANUP ROY Source: Capitaline Compiled by BS Research Bureau The two firms will also mon- sovereign bonds issue will be to liability is on MTNL alone. Age of start-ups A profile of Qualification (%) founders (%) (%) 5-7 yrs 3-5 yrs 20-25 yrs Less Others MBA/CA 8.5 20.0 9.5 than 7.2 18.8 Going against the flow, small and medium 20 yrs 2.2 Master degree companies see cybersecurity budget drop Above 30 1-3 yrs 40 yrs SAMREEN AHMAD It can be challenging because of demands on 25-30 yrs 33.2 Bachelor 51.6 19.0 Bengaluru, 1 January expertise in relevant cybersecurity risks and <1 yr degree protection methods for different business 19.9 30-40 yrs High 39.0 Even though the spend on cybersecurity is growing services, says the report. 36.1 school year-on-year (YoY), with around 9 per cent increase According to the US-based company, enterpris- 5.0 in 2019, information technology (IT) security es can reduce the financial impact of data breach- budgets for small and medium businesses (SMBs) es by building an internal security operations have gone below the average spend. center (SOC). It will be responsible for monitoring According to an IT report, in 2019, 45 per cent of security events as well as incident response. Gender of Nature of Filing of Capital the SMBs and 50 per cent of the enterprises have There are also savings for larger SMBs that founders (%) products (%) patents (%) infused (%) seen a drop in their cybersecurity average spend. adopt SOC, with the total financial impact of a The figure is $205,000 for small and medium units data breach for these businesses estimated at Both Innovative Patents Not ~3-10 cr Above ~10 cr 38.6 Existing 7.4 and $8 million for enterprise businesses. $106,000, compared to $129,000 if an SOC is not in 15 50 filed reported 4.7 “Budget planning is a very important process place. Outsourced SOCs, however, do not reduce 20.3 0.9 ~1-3 cr Not for companies as proper investments ensure a the cost of data breaches for enterprises. 11.1 reported company is ready to meet the current cybersecuri- Enterprises can also consider hiring a Male 0.7 ty challenges and threats. But it may be a complex data protection officer (DPO) to mitigate the 55.5 Not filed Up to task which demands a good understanding of cost of breaches. 51.4 ~20 lakh business needs towards cybersecurity, how to DPOs are responsible for building and imple- 41.1 address them, and how much it can cost,” said menting a data protection strategy within a com- Sergey Martsynkyan, head of B2B product pany as well as managing compliance. Improved version of marketing at Kaspersky, a cybersecurity Kaspersky’s survey highlighted that more COST OF DATA BREACH Female Planning ~50 ~20-50 company which came out with the report. than one-third of organisations with a DPO 5.9 an existing product 27.4 $675,000 $1.4 mn 35 lakh-1 cr lakh For SMBs, the budget issue can be even more that suffered a data breach did not incur any 12.6 22.4 complicated as it’s not only about money but also financial losses, compared to only one-fifth of With internal SOC* Without internal SOC* Source: about the alignment of the budget-planning process. businesses overall. *SOC: Security operations center Source: Kaspersky survey MUMBAI | THURSDAY, 2 JANUARY 2020 COMPANIES 3 . < IndiGo fleet size crosses 250 planes The country's largest airline, IndiGo, now has day. The official said the airline inducted four Soon, view more channels for less more than 250 planes in its fleet after induct- planes — three A321 neos and one A320 neo — ing four neo aircraft on December 31, accord- on December 31. ing to an official. IndiGo, which has a domes- According to an aircraft deliveries tracking Trai mandates provision of 200 channels for ~153, puts a cap on discounts for bouquets tic market share of around 47 per cent, is also website, IndiGo has taken deliveries of 257 SOHINI DAS decided that channels declared manda- the first Indian carrier to have over 250 planes. planes, including 222 Airbus 320 or A320 Mumbai, 1 January tory by the Ministry of Information and Recently, the budget carrier also became neos, 10 A321 neos and 25 regional jet ATRs. Broadcasting will not be counted in the the first airline to operate 1,500 flights per PTI he Telecom Regulatory Authority number of channels under the NCF. of India (Trai) has released Distribution platform operators (DPOs) T amendments to the New Tariff have also been mandated not to charge Order (NTO), in which it has directed more than ~160 a month, for giving all cable operators to provide 200 channels channels available on their platform,” for ~153. It has also reviewed the pricing said Trai. of channel bouquets compared to a la Taurani added that there was no cap carte ones. on the maximum number of channels in The regulator has now set January 15 in the free-to-air (FTA) category in the as the deadline for broadcasters to earlier NTO, which implied that more announce their new pricing structure. NEW YEAR BONANZA niche channels will move towards the At present, direct-to-home (DTH) or FTA. For homes in which more than one  More free-to-air  À la carte channel  Analysts say move cable TV operators provide only 100 connection is active in the name of one channels for a network capacity fee standard definition ceiling cost reduced will lower operators’ person, DPOs can charge a maximum of (NCF) levy of ~153 (~130 excluding taxes). channels from from ~19 taxes ARPU, which had 40 per cent of the declared NCF on the Analysts say this move is likely to low- 100 for ~130 a to ~12 plus taxes if shot up by 60% on additional connections. er the average revenue per user (ARPU) month to 200 for included in an average after It has also permitted DPOs to offer for TV operators. It had surged close to 60 ~160 a month pre-set bouquet changes last year discounts on long-term subscriptions per cent, on an average, after the NTO (six months and above).  Benefits of new rules to be effective from March 1 took effect. This would mean a lower Under the existing system, sub- share of revenue for broadcasters, who scribers had to pay at least ~153 a month used to get almost 50 per cent share after channel bouquets. The NTO was expect- pay channel, forming part of a bouquet, regardless of the number of channels the NTO came into being in February ed to bring monthly bills down, but it are not to exceed 3x the average rate of a they watched. The second part of the bill last year. Trai said it has analysed the co- was the opposite that happened. pay channel of the bouquet of which the comprises content charges that sub- mments of stakeholders, particularly to In order to address the huge dis- channel is a part. scribers pay to broadcasters. protect the interests of consumers, and counts offered for bouquets, vis-a-vis the Additionally, Trai has said only chan- Taurani added that the move will has accordingly modified certain provi- sum of a la carte channels, Trai has set nels having an MRP of ~12 or less will be negatively impact broadcasters’ revenue, sions of the new regulatory framework. two conditions to ensure the pricing of a- permitted to be part of a bouquet. which had grown 30-40 per cent year- According to the NTO that was la carte channels does not become illu- Karan Taurani of Elara Capital said on-year due to the higher share and released last year, consumers were given sionary. First, the sum of the a la carte this clearly implies discounts offered increased ARPU. the option to pay only for the channels rates of pay channels forming part of a in a la carte vis-a-vis bouquet could not “With Jio pushing JioTV that has that they chose to watch, at the maxi- bouquet is not to exceed 1.5x the rate of exceed 34 per cent. At present, broad- access to channels free of cost, TV chan- mum retail price (MRP). the bouquet of which such channels are casters give discounts of 60-80 per cent nel monetisation will go through a major Earlier, they were offered pre-set a part. Second, the a la carte rates of each on bouquets. “In addition, it has been disruption,” he felt.

Apollo, Varde pull out of race Lenders allowed to utilise Mallya’s moveable assets to buy troubled Altico Capital A special court in Mumbai has permitted a consortium of 15 banks led by the State Bank of India (SBI) to utilise moveable assets of BIJOU GEORGE & RAHUL SATIJA asking not to be identified as last 16 months, making it Vijay Mallya towards repayment of his debt. The assets, comprising Mumbai, 1 January the information is private. harder for the sector to raise financial securities like shares of United Breweries Holdings, were A spokesman for Apollo funds. The cash crunch is also attached by the special Prevention of Money Laundering Act court Apollo Global Management confirmed its withdrawal spilling over into the broader in 2016 when it declared Mallya a proclaimed offender. PTI and Varde Partners are no while Varde declined to economy, given that these longer considering bidding comment. lenders fund everything from for Altico Capital India, That leaves Cerberus the construction of condo- according to people familiar Capital Management, SSG miniums to purchases of per- with the matter, narrowing Capital Management, and sonal goods like cars and the number of suitors for the Kotak Investment Advisors in phones. troubled shadow lender. the race for the real-estate Apollo was only willing to The firms pulled out focused lender, three people inject part of the money cred- because they were unwilling said. Cerberus, SSG and itors sought, while Varde to meet creditor demands to Kotak declined to comment. wanted to wait for a turn- inject as much as ~200 crore Altico’s troubles follow a around in Altico before ($280 million) of fresh equity spate of defaults among investing, two people said. into Altico, two people said, Indian shadow banks over the BLOOMBERG 4 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 2 JANUARY 2020 “The Shiv Sena-led coalition “Modi govt starts the year. After railway passenger “People should have no doubt or confusion regarding this law. We government in Maharashtra will be fare hikes, another attack on peoples' livelihoods. have plans regarding protection of their interests and on this first day controlled by ‘Matoshree of Delhi’ and All this in the wake of sharp job losses, food price of the New Year, I want to assure all 'khilonjiya bhumiputras' that they not from ‘Matoshree’ in Mumbai” inflation and record fall in rural wages” are secure and there is no power that can endanger their existence?” DEVENDRA FADNAVIS SITARAM YECHURY SARBANANDA SONOWAL Senior BJP leader and ex-CM, Maharashtra CPI(M) general secretary, in a tweet Assam chief minister

> . IN BRIEF Aviation turbine fuel cost up 2.6%; Crude oil import from Nominal yearly non-subsidised LPG dearer by ~19 Jet fuel or Aviation Turbine Fuel (ATF) growth seen at price was on Wednesday hiked by 2.6 per cent and that of non-subsidised Iran slows to a trickle cooking gas LPG by ~19 per cylinder on the back of a rise in international rates. In the previous year, Tehran was India’s third largest exporter of crude 12.2% till FY25 Price of ATF, used to power aeroplanes, was raised by ~1,637.25 per kilolitre, or SHINE JACOB ARUP ROYCHOUDHURY ~102 trillion, which is expected to go 2.6 per cent, to ~64,323.76 per kl in Delhi, according to a price New Delhi, 1 January New Delhi, 1 January up to ~105 trillion over the next few notification of state-owned fuel retailers. This is the second straight weeks. monthly increase in rates warranted due to firming up of prices in mports of crude oil from Iran The Centre is expecting nominal Thirty-nine per cent of the proj- the international market. In India, which is dependent on imports dipped to 1.7 million tonne (mt) gross domestic product for 2020-21 to ects will be implemented by the to meet 84 per cent of its oil needs, prices of domestic fuels are at I in the current financial year grow 10.5 per cent compared with its Centre and states each while 22 per par with benchmark international prices. ATF price was on (2019-20, or FY20), down from 23.9 revised estimates for 2019-20, the cent will be by the private sector. The December 1 increased by a marginal ~13.88 per kl. The two back- mt in 2018-19, after India stopped data given in the National government is expecting the private to-back increases have push jet fuel prices to their highest since imports from the West Asian country Infrastructure Pipeline report shows. sector’s share to go up to 30 per cent June 2019. PTI< in May. In FY19, Iran was the third The report, commissioned by the by 2024-25. largest crude exporter to India. Ministry of Finance’s Economic The pipeline includes brownfield Assuming the United States' (US') Affairs Department, and released by and greenfield projects by the Centre, Rupee settles Production of sanctions are not lifted, crude Union Finance Minister Nirmala states, private companies, state- 14 paise higher at Coal India jumped imports from Iran will be the lowest Sitharaman on Tuesday, projects owned companies as well as those in at least 12 years, shows the avail- nominal GDP for 2020-21 to be ~227 under the public-private partnership 71.22 against dollar 7% in December able data compiled by Business trillion, while the estimate for 2019- model. According to the data given in The rupee kick-started 2020 on Coal India (CIL), which Standard. On the other hand, indus- 20 is now seen at ~205.37 trillion, the report, some ~42.7 trillion (43 per a positive note with gains of registerted negative growth in try players claim this to be one of from the earlier Budget cent) worth of projects 14 paise against the US currency production of the dry fuel for the all-time low from Iran. IRAN OIL IMPORTS TO estimate of ~211 trillion. are under implementa- on the first trading day of the past few months, has posted This comes at a time of increasing (mn tonne) Import duty on For 2024-25, the tion, those worth ~32.7 New Year on Wednesday. The over 7 per cent growth in imports from the US, which rose from INDIA report projects nominal trillion (about 33 per domestic currency settled at December with 58 million 1.9 mt in 2017-18 to 6.2 mt in 2018-19. In 2008-09 21.30 crude, refined GDP of ~365.5 trillion. cent) are at conceptual- 71.22 against the previous close tonne output, sources said on H1FY20, India imported 5.4 mt from 2009-10 21.20 palm oil cut Reaching that mark isation stages, and the of 71.36 as positive macro Wednesday. The coal behe- the US. 2010-11 18.50 would require an aver- ones estimated at ~19.1 data and optimism over the moth had produced 54.13 “This is a historic low, but unlike PRESS TRUST OF INDIA age nominal GDP growth trillion (about 19 per US-China trade deal boosted million tonne in corresp- earlier times not a cause of concern 2011-12 18.11 New Delhi, 1 January rate of 12.2 per cent The Centre’s cent) are under devel- the investor sentiment. PTI< onding month of 2018. PTI< 2012-13 13.40 *April to budgetary support for India. We have a diversified bas- September annually from 2020-21 to opment. ket now, making us less dependent 2013-14 11.0 Source: The government on Wednesday 2024-25. as a percentage of The sectors identi- on West Asia. Imports from coun- MoPNG slashed import duty on refined Calculations show for nominal GDP is fied include traditional IIMs seek exemption 2014-15 10.95 and V K Yadav likely tries like Iraq and Nigeria, too, have industry palmolein from 50 per cent to 45 2022-23, 2023-24, and expected to grow power and renewable from quota in to be first-ever CEO increased,” said R S Sharma, former 2015-16 12.70 per cent, while that on crude 2024-25, projected nom- from 0.74% in power, railways, roads, chairman of Oil and Natural Gas 2016-17 27.20 palm oil (CPO) from 40 per cent to inal GDP growth is 12.6 2019-20 to 1.11% urban development, teaching positions of Rly Board Corporation (ONGC). 2017-18 22.60 37.5 per cent with immediate per cent, 12.8 per cent, in 2024-25 irrigation, aviation, edu- All 20 Indian Institutes of Vinod Kumar Yadav, who A senior official from a state-run effect, a move that the industry and 13 per cent, respec- cation, and health. The Management (IIMs) have assumed office as the oil company said Indian firms 2018-19 23.90 opposed saying it will hurt tively. Even if one assumes an aver- lion’s share of the funding is expect- requested the HRD ministry to Chairman Railway Board on stopped imports from Iran on May 4, 2019-20* 1.70 domestic refiners. age inflation rate of 4 per cent for ed to go to the energy sector, includ- exempt them from reserving Wednesday in his extended and are looking at a more diversi- A notification in this regard these years, real GDP growth is sup- ing power, renewable, and oil and positions in the teaching staff term, is likely to be its first- fied basket now. “These figures are all crude imports dipped 0.7 per cent has been issued by the finance posed to be upwards of 8 per cent, gas. Energy projects of nearly ~24 tril- for Scheduled Caste (SC), ever CEO, a post created only applicable to the first two to 149.9 mt as against 151 mt during ministry. The duty cut has been which seems quite ambitious. lion have been lined up, with nearly Scheduled Tribe (ST), Other recently as part of a major months of the fiscal,” he added. the same period last year. The import made under the ASEAN The pipeline has identified proj- ~20 trillion in roads and nearly ~14 Backward Classes (OBC) and administrative restructuring of Till September, Iraq was the bill decreased 11.7 per cent to $69.5 agreement and the India- ects across 23 sectors and 18 states trillion in railway projects planned. Economically Weaker Sections the national transporter. largest crude oil supplier to India billion in H1FY20, compared to $78.6 Malaysia Comprehensive and union territories, and they will be As the chart given shows, the (EWS). The B-schools, which do Yadav's one-year extension as with 26 mt, followed by Saudi billion a year ago. Economic Cooperation funded over the next five years by Centre’s budgetary support as a per- not offer reservation in the Chairman gains Arabia at 20.7 mt. Other major coun- Despite this, the dependency on Agreement, it said. Opposing the the central and state governments centage of nominal GDP is expected teaching positions, have been significance in view of the tries that contributed to India’s crude imports increased to 84.7 per move, the Solvent Extractors' and the private sector. to grow from 0.74 per cent in 2019-20 asked by the ministry to restructuring exercise which crude oil basket in FY20 were cent in first eight months as against Association of India (SEA) said The planned investment so far is to 1.11 per cent in 2024-25. provide quota in faculty includes trimming of the Nigeria (9.9 mt), UAE (8.9 mt), 83.3 per cent during the same period that after the reduction in import positions for SC, ST, OBC and Board and the merger of its Kuwait (5.7 mt) and Mexico (4.1 mt). in 2018-19. duty, the tax difference between EWS candidates. The B-schools cadres. The restructuring was CPO and refined palmolein has IN NUMBERS According to the latest figures, India The major importers of Iranian All figures (in ~ trillion) have said they adopt a approved by the Union imported 64.9 mt of crude from crude to India till FY19 were Indian reduced from 10 per cent to 7.5 recruitment process . PTI< Cabinet recently. PTI< West Asia. However, the total import Oil Corporation, Bharat Petroleum per cent. "This will have serious FY19 FY20 FY21 FY22 FY23 FY24 FY25 from the region is expected to be Corporation, Hindustan Petroleum impact on domestic palm oil Total central capital outlay on infra 3.54 3.77 4.58 5.56 6.76 8.21 9.97 lower than the 143 mt and 142 mt Corporation, Mangalore Refinery and refining industry and oilseeds J&K HC rolls back ad NITI for PPP model imported in the past two years. Petrochemicals, and Essar Oil. farmers. We fear import of Budgetary support 1.39 1.53 1.86 2.25 2.74 3.33 4.04 on vacancies in to link pvt medical India imported 226.5 mt of crude Though India’s external affairs minis- refined palmolien would incr- Budgetary support/GDP (in%) 0.73 0.74 0.82 0.89 0.96 1.03 1.11 during FY19, up 2.7 per cent from ter Subrahmanyam Jaishankar met ease and capacity utilisation of district court colleges, hospitals 220.4 mt in FY18. The country’s crude his Iranian counterpart Javad Zarif on our industry would be affected," Nominal GDP 190.1 205.37 227.0 254.27 286.42 323.25 365.49 Jammu & Kashmir High Court To address shortage of import bill during the period December 23, the major topic of dis- SEA Executive Director B V Mehta ( % YoYincrease in bracket) (8.0) (10.5) (12.0) (12.6) (12.8) (13.0) has withdrawn its ad notifica- qualifies doctors and bridge increased from $87.8 billion in FY18 to cussion was reportedly the develop- said. PTI FY19 figures are revised estimates, FY20 figures are latest estimates, other years are projected tion to fill up 33 non-gazetted gap in medical education, the $111.9 billion in FY19. In H1FY20, over- ment of Chabahar Port. Source: National Infrastructure Pipeline Report posts in district courts of the NITI Aayog has come out with Union Territories of J&K the public-private partnership and Ladakh, a move which model to link new or existing triggered an Opposition outcry private medical colleges with against the opening of functional district hospital to employment to all Indians. PTI< augment medical seats. PTI< Electrical equipment firms stare at ~800-cr dues SHREYA JAI WHO IS OWED HOW MUCH banks,” said a senior sector orts, and most importantly, the New Delhi, 1 January executive. private sector,” said the letter. Andhra Pradesh 28.0 The electrical equipment IEEMA further said its CBI arrests DRI ADG in The electrical equipment Rajasthan 22.79 industry is planning to ask the members should not be clas- industry is staring at dues of Centre to ease financing regu- sified as NPAs if power utili- more than ~800 crore, payable Uttar Pradesh 13.38 lations for the industry, espe- ties are not paying the ~3-crore bribery case for a period of over three years. BHEL 8.52 cially the SMEs. approved bills on time. These are mostly from Power Grid 4.8 In February this year, Executives from the associ- PRESS TRUST OF INDIA The complainant alleged states and central government- IEEMA asked the finance min- ation said the finance minis- Maharashtra 4.6 Figures New Delhi, 1 January that Anup Joshi, Clearing House owned companies, including istry to club the segment with ter then had assured the indus- Agent, and Rajesh Dhanda, a BHEL and Power Grid. Tamil Nadu 0.96 in ~cr capital goods, instead of the try that the 90-day deadline The CBI on Wednesday arrested close friend of Chander Some of the biggest default- power sector. Power generators for NPA classification would a senior official of the Shekhar, demanded ~3 crore ers are the power departments ~ 1, 000 cr ~ 800 cr are facing dues totalling be relaxed. Directorate of Revenue on behalf of the public servant of Uttar Pradesh, Rajasthan, Total dues Reported ~80,000 crore from state- However, any step by the Intelligence (DRI) and two for ensuring that he is not Tamil Nadu and Andhra estimated dues owned power distribution RBI and banks is yet to be tak- middlemen in connection with implicated by the DRI over the Pradesh. The industry, in its companies (discoms). en, said executives. RBI’s a ~3-crore bribery case, documents recovered, officials latest exercise of collating SOURCE: IEEMA At the same time, the gen- norms mandate that a bill officials said. said. dues, said around 25 per cent eration sector is marred with ~2 overdue for 90 days would be The official arrested is The agency arrested Joshi of the companies did not dis- been collected in the period ed by states, which ranged Saubhagya and IPDS. trillion worth of non-perform- classified as an NPA. Additional Director General, and Dhanda while allegedly close figures. So, on an aver- when the Central government from 30-60 per cent. Apart from these units, ing assets. The industry wants As the credit outlook of DRI, Ludhiana, Chander receiving ~25 lakh as first age estimate, the dues could was running several electrifi- While most states were close to 70 per cent of the elec- to disassociate itself from the most banks and financial insti- Shekhar, they said. installment of the bribe go up to more than ~1,500 cation schemes in states. aggressive in infrastructure tric equipment industry com- power sector to improve its tutions for the power sector is It was alleged that in June, demanded by them on behalf crore, said the Indian Electrical This includes village elec- creation, they lagged behind in prises small and medium credit rating. low, IEEMA said this impacts 2019, the DRI had conducted a of the officer, they said. and Electronics Manufacturers trification under DDUGJY, paying equipment suppliers. enterprises (SMEs), which are “Having a share of 65 per lending to the equipment search at a private clearing During the questioning, the Association (IEEMA). household electrification Industry executives said feared to become stressed due cent in the capital goods sector, industry as well. agency which provides services middleman told the sleuths The units that could be under SAUBHAGYA and urban most hit could be meter mak- to non-payment. the electrical industry does not “Delayed payments from to various exporters, a CBI that the bribe was allegedly for awaiting dues include meter power reforms under the IPDS ers, which, apart from the “SMEs are largely affected only supply to power infra- the government and utilities Spokesperson said here, the officer, they said. They said makers, transformers, cable, scheme. Most of these dues, are also looking at a fresh by the payment delay as their structure of the country but also have cascading effect on the adding some documents searches are being conducted and other electric equipment schemes had a component of accumulation of close to working capital gets restricted. to railways, metros, smart cities, banks and financial institu- pertaining to an exporter were in New Delhi, Noida and manufacturers. grant from the Centre and bal- ~5,000 crore. These meters These small players are finding urban and rural household tions of the company’s also seized. Ludhiana. IEEMA’s data on dues had ance was supposed to be fund- were supplied under it difficult to get loans from development, e-mobility, exp- account,” IEEMA said. Bank consolidation: Non-anchor PSBs urge govt for new name after merger They don’t want a BoB-like branding where the logos of all three merged entities were retained, with that of BoB being most prominent

NAMRATA ACHARYA according to a top official in the Notably, the committee looking of and , will combine to Kolkata, 1 January bank. In the merger of into branding exercise in case of the latter has suggested retaining the form the nation’s second-largest and with PNB, OBC and United Bank of logo of the bank, instead of having a lender. and Syndicate While the official date of the (BoB), the logos of all the India merger is also looking new name altogether. Bank will amalgamate into a bank. merger of public sector banks is three lenders are being to seek help from an “If we have a new name altogeth- will amalgamate just a quarter away, some of retained, with that of BoB Under the mega external agency for an er, the brand recall value is impact- with and Corporation the lenders getting merged are being prominent display merger plan appropriate name of the ed. This is more likely to impact Bank. Indian Bank will amalgamate seeking a new name. with the tagline, ‘Power of announced merged entity. global operations,” according to a with Allahabad Bank. According to a source, United Three’. by Union Finance “There was a demand senior official at Allahabad Bank. The anchor banks would be PNB, Bank of India has written to the However, this time, the Minister Nirmala from a section of employees Under the mega merger Canara Bank, Union Bank, and Government seeking a new name non-anchor banks are not in Sitharaman, 10 to retain the identity of plan announced by the Union Indian Bank. The change in bank’s for the entity formed out of its favour of a Bank of Baroda PSBs are being in one form Finance Minister Nirmala name would be a long-drawn process merger with Punjab National like branding. merged into four or other in the merged enti- Sitharaman, 10 PSBs are being as it would need parliamentary Bank and Oriental Bank of “The name should cap- ty. However, the manage- merged into four. approval a gazette notification. April Commerce. Syndicate Bank, ture the identities of all the ment has so far taken no (PNB), 1, 2020 has been set as deadline for which is to be merged with three banks. That is why we have decision on the same,” said Mrutunjay Oriental Bank of Commerce, and completion of the merger process. Canara Bank, is also planning made a request with the government Mahapatra MD & CEO, Syndicate ILLUSTRATION BY AJAY MOHANTY to write to the Government seeking to have a new name,” according to a Bank. BARODA, UNION MFs BANK ON MERGERS TO INCREASE REACH 10 a new name for the merged entity, top official at United Bank of India. However, in the case of the merger MUMBAI | THURSDAY, 2 JANUARY 2020 ECONOMY & PUBLIC AFFAIRS 5 . < FDI inflows up 15% in H1FY20 GST MOP-UP Services sector garnered highest share, investment inflows with the FOR STATES data from the Reserve Bank of Singapore remains biggest source India (RBI) as well as its own databases, and the data is pub- RISES 16% SUBHAYAN CHAKRABORTY among other industries — was lished every quarter. In the first New Delhi, 1 January the highest recipient of FDI at quarter (April-June) of the cur- GST collections from BIGGEST GROSSERS $4.4 billion. This was followed rent fiscal, FDI inflows were domestic transactions Inbound foreign direct equity by the telecommunications sec- higher by 33 per cent as com- State-wise GST collections from domestic transactions investments (FDI) rose 15 per tor, which garnered $4.3 billion, pared to the corresponding rose 16 per cent YoY to ~80,849 crore in  Dec 2018  Dec 2019 (~ cr) % YoY cent in the April-September peri- and the computer software and period of FY19. Growth od of the current fiscal year hardware at slightly more than Inbound foreign direct December 2019. Among 13,524 (2019-20, or FY20), according to $4 billion. equity investments declined the top 10 states in terms MAHARASHTRA 16,530 22 data released by the Department As of September, Singapore for the first time in six years in of GST collections on this 6,209 for Promotion of Industry and was the largest source of FDI for FY19, in line with overall weak count, only Uttar Pradesh KARNATAKA 6,886 11 Internal Trade (DPIIT). India in FY20, accounting for economic conditions. and Telangana witnessed 5,619 The figures, released on around $8 billion, followed by inbound FDI over this period. The National Capital Region Investments reduced to $44.36 GUJARAT Tuesday, showed that in the Mauritius with $6.3 billion, However, over the past year, was the most favoured choice billion, down by 1 per cent a growth rate of less than 6,621 18 first half of FY20, equity inflows Netherlands ($2.3 billion), the inflows from Singapore have of investors, receiving $7.1 bil- from $44.85 billion last year. 14 per cent. Any state 5,415 amounted to $26.09 billion, up United States ($2.1 billion) and shot up as an increasing num- lion worth of investments. This In the first full year (FY15) of which gets less than 14 TAMIL NADU 6,422 19 from the $22.66 billion received Japan ($1.7 billion). ber of Indian firms are getting was followed by Karnataka with the Narendra Modi govern- per cent revenues from 4,957 in the corresponding period of Singapore has long been the incorporated in the island $4.6 billion. Maharashtra, the ment, annual inbound equity GST is taken as loss- UTTAR PRADESH 5,489 11 the previous year. highest source of foreign funds nation’s jurisdiction. India highest receiver of FDI in FY19, investments surged 22 per making and is given 4,646 The services sector — to India, pumping in around revised its tax treaty with dropped to third place with $3.6 cent. The growth rate peaked compensation by the HARYANA 5,365 15 encompassing financial, bank- $140 billion since 2000, consti- Mauritius and Singapore, billion in FY20, till September. at 35 per cent in FY16 and has Centre, largely from the 3,230 ing, insurance, outsourcing, tuting 32 per cent of all which came into effect in FY20. The DPIIT compiles total fallen ever since. WEST BENGAL cess imposed for this 3,748 16 purpose. However, for 3,146 DELHI clear picture, IGST on 3,698 18 imports and compen- 3,014 TELANGANA Maharashtra allies seek to end portfolio impasse sation cess on imports 3,420 13 are needed. Also, 14 per 2,094 PRESS TRUST OF INDIA The leaders held several they said. agriculture and cooperation. been mollified. MADHYA PRADESH 2,434 16 Mumbai, 1 January rounds of talks with Chief Ashok Chavan, Balasaheb “We can swap portfolios with Shiv Sena’s Tanaji Sawant is cent growth for Minister Uddhav Thackeray Thorat, Vijay Wadettiwar and other two . We are not also unhappy over being compensation is taken Note: Total of GST collections ALL given in chart won't add to Amid murmurs of resent- during the day, sources said. Nitin Raut from Congress, demanding increase in the ignored in the cabinet expan- on the base of 2015-16 69,983 80,849 all-India level as only top 10 ment over distribution of “Allocation of min- Jayant Patil and number of ministries,” sources sion, sources in the know said. INDIA 16 states are included ministries between alliance istries has been The leaders held AjitPawar from the in the know added. Bhaskar Jadhav, who had BY INDIVJAL DHASMANA Source: Finance ministry partners Shiv Sena, Congress almost finalised. All several rounds of NCP and Eknath All three parties are facing joined the Sena on the eve of and NCP in Maharashtra, issues have been talks with CM Shindefrom the disgruntlement of leaders who Assembly polls, claimed that leaders of the three parties resolved. The alloca- Uddhav Thackeray Shiv Sena met were not inducted in chief Uddhav Thackeray held marathon meetings on tion is expected to be during the day, Thackeray to dis- the Cabinet. had made certain commit- ‘Matoshree’ of Delhi will control Sena-led govt: Fadnavis Wednesday to finalise the announced by prople in the cuss allocation of Among such MLAs are ments to him, so he was confi- allocation of portfolios. Thursday” a person know said ministries. Congress’ Sangram Thopte, dent that he would be made The Shiv Sena-led coalition gov- minister Devendra Fadnavis Sena president Uddhav The Cabinet was expanded in the know said. According to whose supporters vandalised minister and the exclusion left ernment in Maharashtra will be said on Wednesday, in an Thackeray while campaigning on Monday with induction of District guardian ministers Congress sources, the party is the Congress office in Pune him shocked. controlled by “Matoshree of apparent reference to the for the upcoming Palghar Zilla 36 ministers, which took its and sitting arrangement of min- upset that it was not given any of on Tuesday, and NCP’s About a dozen Sena legisla- Delhi” and not from Congress leadership. Parishad elections. strength to 43, including the isters at Cabinet meetings were the ministries which have a Prakash Solanke. Both the tors are said to be upset over not “Matoshree” in Mumbai, senior Fadnavis made the remarks ‘Matoshree’ means mother chief minister. finalised on Wednesday, bearing on rural areas, such as parties claimed that they have getting place in the Cabinet. BJP leader and former chief targeting the Chief Minister and in Marathi. PTI Inside China’s push to turn Muslim minorities into an army of workers The Communist Party wants to remould Xinjiang’s minorities into loyal blue-collar workers

CHRIS BUCKLEY & AUSTIN RAMZY At Mr. He’s factory, dozens of Adrian Zenz, an expert on Xinjiang Kashgar (China), 1 January Uighur women from nearby villages who has studied the labor programs. sat wordlessly in rows sewing school Amanzhol Qisa, a 31-year-old The order from Chinese officials was uniforms. Guzalnur Mamatjan, a 20- Xinjiang resident, spent a year in an blunt and urgent. Villagers from year-old Uighur, said she made indoctrination camp and in April Muslim minorities should be pushed about $200 a month. was sent to work at a clothing facto- into jobs, willing or not. Quotas “I’d like to work here for two or ry for three months. She was paid would be set and families penalized three years and then open my own $115 a month, less than half the min- if they refused to go along. clothes shop,” she said in a brief imum wage, according to her hus- “Make people who are hard to interview in the presence of officials. band, Muhamet Qyzyrbek. employ renounce their selfish ideas,” Mr. Qyzyrbek, a Kazakh citizen, the labor bureau of Qapqal, a county in ‘A great deal of pressure’ said by phone from Shymkent, a city the western region of Xinjiang, said in Jutting out against desert dunes, the in southern Kazakhstan, that his the directive last year. new industrial zones in Xinjiang are wife had no choice but to take the Such orders are part of an aggres- often surrounded by high walls, job. “After being released, you need sive campaign to remold Xinjiang’s barbed wire and security cameras. to work according to their policies,” Muslim minorities — mostly Some are built near indoctrination he said. Uighurs and Kazakhs — into an camps and employ former inmates. ©2020 The New York Times News Service army of workers for factories and Xinjiang’s drive to put minorities other big employers. Under pressure in jobs often feels less like a jobs fair from the authorities, poor farmers, and more like a military call-up. small traders and idle villagers of Trainee laborers often first attend working age attend training and political courses similar to those indoctrination courses for weeks or used in the indoctrination camps. months, and are then assigned to They practice military drills, learn stitch clothes, make shoes, sweep PHOTO:REUTERS patriotic Chinese songs, and listen to streets or fill other jobs. moment that there’s a very signifi- shows Jinfujie workers in gray-and- lectures warning against Islamic zeal These labor programs represent cant risk of coercion,” said Amy K. orange uniforms lined up for a pep and preaching gratitude to the an expanding front in a major effort Lehr, director of the human rights rally. “A successful future,” they Communist Party. New laborers are by China’s leader, Xi Jinping, to initiative at the Center for Strategic shouted in unison. sometimes shown in Chinese media entrench control over this region, and International Studies and the The company has said it won an reports wearing military-type where these minorities make up co-author of a study on Xinjiang’s order from Germany to make hun- uniforms and standing to attention about half the population. They are labor programs. dreds of thousands of ski pants. as they are escorted to their crucial to the government’s strategy Forced labor could arise “even if Jinfujie would not answer questions employers. of social re-engineering alongside the coercion was implicit or the pro- about the claimed order. During a Many are separated from their the indoctrination camps, which grams offered workers a decent recent visit, Times reporters were families. A directive from the Qapqal have held one million or more income,” she added. barred by guards from visiting the government ordered children of Uighurs and Kazakhs. The labor programs operate in Jinfujie factory or the surrounding working couples to be put in care — The labor bureau of Qapqal parallel with the indoctrination industrial zone. home villages for the young, board- ordered that villagers should under- camps in Xinjiang, that have drawn Dozens of factory zones have ing schools for older ones — so their go military-style training to convert condemnation from Western gov- emerged across Xinjiang, attesting parents could move for work. them into obedient workers, loyal to ernments. Camp inmates also to the government’s ambitions to Workers’ movements are highly employers and the ruling receive job training, and officials remake the region. Mr. Xi, China’s controlled if they are far from home. Communist Party. “Turn around say that many will be sent to work leader, has vowed to end poverty In Yanqi County in the region’s their ingrained lazy, lax, slow, sloppy, in factories. nationwide by late 2020, and north, workers sent from the south freewheeling, individualistic ways Taken collectively, the policies Xinjiang officials face intense pres- are not allowed to quit unless they so they obey company rules,” the are designed to make the region’s sure to create jobs. get written permission from several directive said. Muslim minorities more secular and “The offensive to eradicate pover- officials, according to rules by the The government maintains that urbanized like China’s Han majority. ty has reached the crucial stage in a local government. the Uighur and Kazakh villagers are Many Chinese people see that as decisive battle,” Chen Quanguo, the Labor recruits undergo “political “rural surplus labor” and are an laudable. Uighur critics see it as eth- Communist Party secretary of vetting” to determine if they are a underemployed population that nic subjugation. Xinjiang, said early this month on a security risk. In Qapqal County, offi- threatens social stability. Putting “What they are trying to do is tour of southern Xinjiang. “Transmit cials imposed rules to grade poten- them in steady, supervised govern- assimilate the Uighur people,” said the pressure down, level by level.” tial recruits from most to least trust- ment-approved work, officials say, Mustafa Aksu, a program coordina- The labor programs depend on worthy. The least trustworthy had to will erase poverty and slow the tor at the Uyghur Human Rights luring companies from China’s attend indoctrination classes in the spread of religious extremism and Project. wealthier eastern seaboard, where evenings, while only the most trust- ethnic violence. fewer young people want to work on ed could leave the county for work. The government describes the ‘Foster a sense of discipline’ production lines. Xinjiang has “There is a great deal of pres- laborers as volunteers, though critics The factory run by the Jinfujie offered manufacturers inexpensive sure placed on individuals to sign say they are clearly coerced. Official Clothing Company on the sandy labor, as well as generous tax breaks work contracts,” said Darren Byler, documents, interviews with experts, edge of Kashgar, a city in southern and subsidies. an expert on Xinjiang at the and visits by The New York Times to Xinjiang, has been a star in the gov- “They’re still not as fast as work- University of Colorado Boulder. Xinjiang indicate that local plans ernment’s labor campaign. ers from other parts of China,” said Mr. Byler said many residents uproot villagers, restrict their move- Jinfujie, which calls itself Golden He Tan, a businessman who owns a believed that resisting work trans- ments and pressure them to stay at Future in English, trained and small factory on the outskirts of fers could prompt detention. “The jobs. employed 2,300 workers from vil- Hotan, a city in Xinjiang. threat of the camps hangs over Experts say those harsh methods lages. It also opened a branch facto- The government’s goals are everyone’s heads, so there is really can amount to forced labor, poten- ry in an indoctrination camp, where sweeping. One plan issued in 2018 no resistance to assigned factory tially tainting the global supply it would put to work more than 500 called for putting to work 100,000 work,” he said. chain that uses Xinjiang workers, inmates, a company executive told people from the poorest parts of Chinese official media reports particularly for cotton goods. The officials last year. southern Xinjiang, a heavily Uighur that workers make $400 and up a Japanese retailers Muji and Uniqlo The executive, Sun Yijie, a former area, by the end of 2020. The gov- month, a decent income. The reality say they have used cotton from the soldier, said the company ran a tight ernment recently said that target may differ, especially in smaller, region, while Walmart has bought ship to turn villagers into workers. was met a year ahead of schedule. struggling factories. In a township goods from a company that until “Beginning with military drills By late 2023, another plan says, in southern Xinjiang, two thirds of recently used workers from Xinjiang. before they start their jobs, we foster Xinjiang wants one million working 43 factory employees whose wages Given the tight control on a sense of discipline,” he said. in its textile and garment industries, were included in online records Xinjiang, “we have to assume for the Video footage posted online up from about 100,000 in 2017. earned $114 a month, according to 6 MUMBAI | THURSDAY, 2 JANUARY 2020 1 >

N GHOSN ESCAPE THEORIES: A MUSIC BOX, JET, AND LEBANESE AID N Trump threat: Iran will pay very big price How Carlos pulled off a Houdini US President Donald Trump has said that war with Iran is In one speculative account, which cited no sources, Lebanese television station MTV reported that Ghosn smuggled not a good idea even as he threatened Tehran after Iraqi himself out of Japan in a large musical instrument box after a Christmas band visited his residence in Tokyo supporters of pro-Iranian regime factions attacked the DANA KHRAICHE & BRIAN BREMNER Carlos pulled off the caper. American Embassy in Beirut/Tokyo, 1 January Lebanon’s foreign ministry Japan to seek talks Baghdad, forcing its diplo- THE GREAT SWITCHEROO said in a statement that mats to stay inside for safety. he former head of Nissan Here’s a look at some high-profile fugitives Carlos entered the country with Lebanon over His statement came hours Motor and Renault SA, who from the business world in recent years legally and it was unaware fugitive Carlos after hundreds of angry Iraqi T was awaiting the first of two how he fled Japan and Shiite militia supporters, trials in Tokyo, somehow evaded JHO LOW arrived in Beirut. Japan is expected to speak with including women, broke into almost round-the-clock manned Escape route: The Asahi Shimbun in Lebanon through diplomatic the US Embassy compound and video surveillance and heavy Detention in Hong Japan suggested Carlos may channels about Carlos Ghosn in high-security zone on restrictions on his freedom of move- have flown out of Kansai fleeing Tokyo for the West Asian Tuesday after smashing a ment to flee to Lebanon. Kong to an island Airport near Osaka, citing country. The comment on main door near parking and From there, Carlos Ghosn near Macau records from the Ministry Wednesday would mark some of setting fire to a reception area released an email on Tuesday decry- Malaysia is still trying to of Transport that indicated the earliest indications about how chanting “Death to America” ing the “injustice and political per- bring in LowTaek Jho, CARLOS GHOSN a private jet left Japan for Tokyo plans to respond after the in anger over airstrikes that secution” of the Japanese judicial known as Jho Low, the Istanbul in the evening of former head of Nissan Motor and killed at least 25 fighters of the system. The 65-year-old faced Escape route: Japan to Lebanon December 29. On social Renault SA snuck out of Japan Iran-backed militia in Iraq, the charges of financial misconduct and alleged mastermind behind media, would-be sleuths where he was awaiting trial. Kata’ib Hezbollah. the siphoning of billions of Joins ranks of big-time white-collar raiding corporate resources for per- fugitives. The former head of Nissan Motor also posted private-jet Lebanon, where Carlos grew up President Trump, in his sonal gain, allegations he denies. dollars from state-owned flight information on and holds citizenship, doesn’t brief interaction with repo- and Renault SA, who was facing trial for Soon after he resurfaced, the investment fund 1MDB. aircraft that left for have an extradition treaty with rters, said that the situation in internet lit up with unconfirmed financial crimes, defended his ‘escape’ by Istanbul the same day Japan and it’s not clear what Japan Iran has been handled very The scandal led to PM saying he’ll “no longer be held hostage reports and theories of how Carlos, Najib Razak losing a 2018 that Carlos may have will pursue in its diplomatic well. “We had some great now an international fugitive, pulled by a rigged Japanese justice system” left the country. negotiations. The former industry warriors come in... this will off an escape befitting a Hollywood election, and has entangled A long-range heavyweight also has French and not be a Benghazi... they got in thriller — one that will be very hard individuals and businesses Bombardier Inc. busi- Brazilian citizenship. BLOOMBERG there very quickly,” he said in for Japanese authorities to live ness jet left Kansai response to a question as he down. There are still more questions MARC RICH CHRISTOPHER VIJAY MALLYA Airport on Sunday night, arriving walked up to the grand than answers. Monday morning in Istanbul, Renault-Nissan sans Carlos ballroom at Mar-a-Lago for Escape route: SKASE Escape route: India to UK were worst car stocks of 2019 In one speculative account, US to Switzerland Escape route: The Journal report said, citing the New Year’s Eve party. which cited no sources, Lebanese The King of Good Times has been flight-tracking data. A smaller jet Carlos’ jaw-dropping getaway Asked about the possi- television station MTV reported that The commodities Australia to Spain subject to extradition efforts by left the airport for Beirut just over added insult to an injurious year bility of a war with Iran, he Carlos smuggled himself out of trader fled to The entrepreneur died in Indian authorities. Mallya is based in London, half an hour later, it said. for automakers he used to run: said: “I don’t think that Japan in a large musical instrument Switzerland Majorca in 2001, a decade where he was taken to court by state-owned Carlos’ vanishing act has trended Renault SA and Nissan Motor. The would be a good idea for box after a Christmas band visited hours before after fleeing Indian banks petitioning for him to be declared on Twitter and inspired a fair two were the worst-performing Iran... I like peace... I don’t his residence in Tokyo. He was then being indicted in Australia as amount of wordplay, as in ‘Ghosn carmakers on the Bloomberg see that happening”. shipped out of the country and later bankrupt over £1.15 billion in unpaid debts with the Wind’ and ‘Ghosn, Ghosn World Auto Manufacturers Index Earlier, Trump threatened entered Lebanon from Turkey on a 1983 on more than 50 counts his media Gone’. Tesla Inc’s Elon Musk also in 2019, falling 23% and 28%. Iran after the attack on the private plane. of wire fraud, racketeering, and hotel NIRAV MODI chimed in, tweeting: “Carlos Gone”. Ferrari NV, Kia Motors, and Tesla, American Embassy, which Carlos’ getaway followed weeks trading with Iran during an empire Qintex It wasn’t just casual tweeters Inc. logged the biggest gains. was one of the worst in recent Escape route: India to UK of planning, The Wall Street Journal embargo, and evading more Australia alone. Masahisa Sato, a ruling par- BLOOMBERG years. “Iran will be held fully reported, citing unidentified people than $48 million in US taxes. collapsed. The businesses The diamantaire was arrested ty lawmaker in Japan, questioned responsible for lives lost, or familiar with the matter. A team of The charges stemmed from a included Seven Network in London in March for in a tweet whether Carlos was damage incurred, at any of accomplices assembled last week- defrauding PNB of $2 billion. He helped by another country in leav- unnamed top officials in the our facilities. They will pay a end to carry out his exfiltration, and multimillion-dollar chain of Australia, the country’s ing Japan, and called Carlos’ actions prosecutor’s office, reported on very big price! This is not a his wife, Carole, played a major role US crude-oil deals that roiled second-largest was denied bail due to ‘substantial illegal. Japan’s foreign ministry anger and frustration there. Those warning; it is a threat. Happy in the operation, the newspaper said. the petro industry in the 80s television network risks’ he’d flee the country to avoid extradition said by email on Wednesday they in the office told the paper that New Year!” he warned in a Carlos was taken from his court- are looking into the matter and Carlos had made a mockery of tweet. “The US Embassy in monitored residence in Tokyo onto band entered Lebanon with an ID try heavyweight has Lebanese, smaller airport where he was less can’t offer a comment. Japan’s justice system, blamed the Iraq is, and has been for hours, a private jet, bound for Turkey, card. He may have decided to flee French, and Brazilian citizenship, likely to be recognised. In Japan, Carlos’ escape domi- courts and Carlos’ lawyers for him safe! Many of our great from where he continued on to because of new information though all his passports had been The UK’s The Guardian said nated the front pages of domestic being out on bail, saying it was warfighters, together with the Lebanon, landing there early Japanese authorities could have taken from him. Meanwhile, a report Lebanon officials were instructed newspapers on New Year’s Day. obvious he would escape. most lethal military equip- Monday morning, it said. obtained from a Swiss bank and that Carlos met with Lebanese by political leaders to ignore arrival Articles reported on speculation of Carlos is expected to give a press ment in the world, was imme- A detailed report in the French from offshore centres, including President Michel Aoun was denied formalities for Carlos at the Beirut how Carlos was able to escape, the conference from Lebanon in his new diately rushed to the site. daily Le Monde, citing unidentified Dubai, the newspaper reported. by an official at the presidency. airport, citing a senior figure in the difficulty of extradition from home after the holidays. Thank you to the president sources, similarly reported that The Lebanese newspaper French newspaper Les Echos said country’s ruling class that the Lebanon, and that his trial — set to In the meantime, red-faced and prime minister of Iraq for Carole organised the escape with the An-Nahar, by contrast, reported that Carlos may have left Japan under a newspaper didn’t identify. begin in April — was unlikely Japanese law enforcement and their rapid response upon help of her brothers and their con- Carlos entered the country with a false identity with a forged passport, The French foreign ministry, for to occur. Customs officials have some request...,” he said in another tacts in Turkey, and that her hus- French passport. The former indus- after boarding a private plane from a its part, said it doesn’t know how Sankei Shimbun, citing explaining to do. BLOOMBERG tweet. PTI 8 ISSUES AND INSIGHTS MUMBAI | THURSDAY 2 JANUARY 2020 >

Agenda 2020: Building a good society > CHINESE WHISPERS

Here are nine basic issues that must be addressed to realise that goal technology to make available supply of decentralised green power, education ‘Left’ infiltration into Congress need to get back to a dialogue mode, image of simplicity, the life in village, “Small is beautiful” and far easier to and health care technologies for dis- Expelled Congressman Satyadev speaking and listening. And, as neces- rural society generally prevails. achieve quick results and gain benefits. tance support, to mention just a few. Tripathi has alleged a group of former sary, use neutral moderators and facil- Gandhiji was perhaps the most recog- 2020 needs to see a shift in priority to Eighth, 2020 needs to see a change left-wing leaders were trying to itators to bring people together to a nised person for his simplicity and, the “small”. in the lifestyle of people, with firm focus capture the grand old party. Speaking shared view. with it, directness. Recapturing the Sixth, 2020 also needs to see us re- on fitness irrespective of the weather at a parallel function to mark the Second, through a process of dia- norms of simplicity would be an impor- focus on implementation as distinct and by changing diet habits. Physical Congress’ 135th foundation day logue, build mutual trust. Society is fac- tant agenda for 2020. from announcements and promises. and mental fitness are connected with recently, Tripathi observed the party, ing a deficit of trust. All players are Fifth, there is a preoccupation in And, if the new focus is on “small” and productivity and efficiency. Indians which is seeking to “protect” the responsible for this — business and India, especially urban India, with all “medium”, the implementation part need to make a new beginning. Indian Constitution, should first industry, civil society, political parties, things “big” and “ugly” (not beautiful). will be much easier. The lack of imple- Ninth, and the final point, relates to respect its own constitution. politicians, government etc. No single When solutions are discussed, they are mentation has been a source of great values. India is known for its spiritual Lamenting that the party was passing section is solely responsible for this dis- also “big”, involving high cost and com- concern. This needs to be set right roots and strengths. Indians need to through a phase of ideological crisis, TARUN DAS tressing situation of lack of mutual plex mechanisms to follow through. A in 2020. revisit and review the values they he alleged the “left elements”, who trust. The first step of dialogue will help much more manageable way forward is Seventh, the world is being swept by believe in, the values they live by, the had permeated the Congress, were bridge the trust deficit. This is achiev- to think of multiple “small” solutions, a technology tsunami which is impact- values which are central to their lives. misleading the top leadership. In able and must be attempted in 2020. which are also much easier to imple- ing the lives of everyone. In this sce- A good society can only happen if peo- November, 10 senior UP leaders were s 2019 closes on a low note, eyes Third, fundamental to all commu- ment. For example, in creating jobs, the nario, India’s technology initiative ple have good values and 2020 is a year expelled for six years on charges turn to the next year and the nication and activity is transparency. real answer lies in micro entrepreneur- becomes very important to fuel devel- for deep introspection and action. of indiscipline. A overriding priorities for 2020. Is And, this concerns all, impacts all and ship, not with large companies with opment and growth. With near-700 mil- India, and Indians, have much to a turnaround possible? Not just eco- involves all. The transparency agenda large capital-intensive investments. lion people living in the rural areas, ponder and work on. As the country is nomic recovery but also of sentiment calls for a new leaf to be turned in the Micro entrepreneurship is really beau- India particularly needs to focus on in its 73rd year of Independence it is Discontent expansion and confidence. There are nine basic hearts and minds of people, especially tiful in every way — in terms of invest- technologies to improve the lives of the time to get the basics right so that our issues which need to be addressed. those who are seen to be “leaders” and ment and effort, in terms of self- rural and agricultural population. More children and grandchildren inherit a First, the critical need for dialogue, “spokespersons”. employment and employment, in terms than ever before, this must be a priority nation more at peace with itself. where we not only talk to each other Fourth, somewhere along the way, of dignity, in terms of staying where for 2020. For this, the focus must be on but, equally importantly, listen to each we have forgotten the value of simplic- one’s roots are (the village), in not dis- agricultural technology, the use of space The author is former director general and other. And find a middle way. Indians ity. And, when one tries to form an rupting the family system and so on. technology for crop forecasting, energy chief mentor, CII

The cabinet expansion in SGST: A case of irrational expectations Maharashtra has miffed quite a few in the Shiv Sena-Nationalist Congress Party (NCP)-Congress combine. Wide variations in growth estimates for state GST between 14 and 27 per cent. What were Nineteen people were arrested for an IN A GST STATE OF MIND the finance ministers of these states attack on Congress Bhavan in Pune raise serious questions about the assumptions on States which had projected over doing when they fixed their SGST rev- earlier this week. They were 14 % growth in state GST enue growth rates for the current year? supporters of the party’s MLA which the projections were made revenues in 2019-20 (%) The Centre is, of course, guilty of Sangram Thopte (pictured) , who was A K BHATTACHARYA There were now eight states Andhra Pradesh 27.02 having projected its revenue growth denied a ministerial berth when (including Union Territories) — rates that were far in excess of what the Chief Minister Uddhav Thackeray n the last week of November 2019, Chhattisgarh, Madhya Pradesh and Kerala 26.53 economic growth scenario prevailing expanded his cabinet to its full five opposition-ruled states issued Puducherry joined the earlier five — Rajasthan 23.40 then could have justified. But these 14 strength. Thopte is the son of former Ia statement that suggested that that stated that they would move the Tripura 22.62 states are no less guilty of putting out minister Anantrao Thopte. Other slowing revenues from goods and ser- Supreme Court if the Centre did not Arunachal Pradesh 21.09 over-optimistic revenue projections in senior leaders and legislators who vices tax (GST) had begun to affect their agree to release the compensation Himachal Pradesh 20.72 their respective budgets in February- feel left out of the cabinet have finances. The Centre had delayed the arrears. That pressure seemed to have March 2019, when economic growth expressed their resentment in release of compensation to the states, worked. Just a day before the GST Top 5 states which projected State GST Punjab 19.92 had already begun decelerating. There different ways. For instance, the promised under the GST regime to any Council was to hold its 38th meeting at the most decline in state GST revenues growth Madhya Pradesh 19.85 is need for introspection by those states NCP’s four-time MLA Prakash Solanke state whose annual revenue from the New Delhi on December 18, the Centre revenues in 2019-20 (%) projections for all Bihar 18.54 that had projected SGST collection from Majalgaon in Beed had new tax failed to grow by more than 14 released ~35,298 crore as pending GST Uttarakhand -12.99 states and union Tamil Nadu 16.36 growth rates, as high as 26 per cent by threatened to quit his seat though per cent. compensation to the states. territories in Kerala, 23 per cent by Rajasthan and 20 he later announced he had decided Goa -11.15 Telangana 15.96 The five states — Punjab, Kerala, That gesture helped meet a key 2019-20 per cent each by Punjab and Madhya to continue as a legislator after Delhi, Rajasthan and West Bengal said demand of the states, suffering on Assam -7.35 Gujarat 14.45 Pradesh. Remember that all these consulting party leaders. in a joint statement: “The GST compen- account of slowing GST revenues as Haryana -4.49 Maharashtra 14.00 states are the ones that are also com- sation for the month of August and also the temporary halt to the release Uttar Pradesh -1.29 11.01 % Manipur 14.00 plaining the most. September, required to be paid by the of compensation by the Centre. But the Similar questions on the procedures Paying Priyanka’s fine Percentages based on change in Budget Estimates for 2019-20 over Revised Estimates for 2018-19 central government delay soured relations between used for projecting SGST revenue Rajdeep Singh, the owner of the scooter sometime in October, the Centre and the states. At the growth should be raised for those states on which Congress General Secretary continues to be out- 38th GST Council meeting, vot- cent of the states’ own tax revenues. lected have only been one-third of the that had estimated a decline in collec- Priyanka Gandhi Vadra rode on the standing till date”. ing was forced for the first time Hence, any slowdown in SGST rings target. This is also why the states have tions in 2019-20. These states included pillion on December 28 in Lucknow, and These states claimed to decide on the determination alarm bells for the states’ finances. been clamouring for the release of Uttarakhand, Goa, Assam, Haryana, who was fined ~6,300, has decided to that their fiscal situa- of a new rate of taxation for lot- How serious is the situation for the compensation. But compensation can Uttar Pradesh and Chhattisgarh. What cough up the sum himself. Singh’s tion had come under teries. In the past, all decisions states? In 2019-20, all the states and help the states only for five years from were the arguments that propelled scooter was driven by Congress leader stress and some of them at the GST Council were taken Union Territories had projected 11 per 2017. What happens to the states’ rev- them to project a decline in SGST col- Dheeraj Gurjar to reach the residence of were already seeking TAKE by consensus, even though a cent growth in SGST over the revised enues from 2022 onwards, if SGST rev- lections, while several other states former IPS officer S R Darapuri, who was recourse to “ways and TWO voting provision existed from estimates of ~5.52 trillion in 2018-19. In enues continue to maintain the cur- could foresee a 25 or 27 per cent rev- arrested for protesting against the means advances”, a ANALYSIS BEHIND the start. the first eight months of 2019-20, total rent tepid growth? enue growth rate? More importantly, it amended Citizenship Act last week. special window of THE HEADLINES This is clearly a reflection of SGST collections are estimated at ~2.01 A few of the states, however, cannot would be interesting to understand During the ride, Gurjar and Vadra were financing operated by the slowing GST revenues that trillion, just about a third of the annual absolve themselves of any responsibil- why states like Gujarat, Maharashtra, seen not wearing the helmet. Singh said the central bank. have, of course, hit the Centre, revenue target of ~6.13 trillion. ity in landing themselves in the current Telangana and Tamil Nadu projected he got to know about the fine from the By the end of the first week of but the states are equally worried In other words, the states have to fiscally difficult situation. As many as SGST growth rates of 14-16 per cent. It media. “I will pay the amount myself. I December, more states had joined the because their revenue projections have get ready for a significant shortfall in 14 states had projected an SGST rev- is now time for the GST Council to look cannot take it from Priyanka or the chorus of demand for early release of gone awry. Collections of state GST or their SGST collections. In two-thirds enue growth of over 14 per cent in 2019- at all such issues in greater detail and Congress,” he said. GST compensation by the Centre. SGST have accounted for over 43 per of the current year, the revenues col- 20 (see table). The growth rates ranged present a status report.

INSIGHT > LETTERS

ment programmes), reduction in the pressure” and “transfer threats” in Correct these elite distortions unnecessary expenditure of the state their stride, as occupational hazards. — the Delhi government saved costs They are expected to lend, after The Indian economy and its workforce deserve freedom from the by early completion of road projects — and reduced dissatisfaction damaging tyranny of the tiny elites in the next decade among bureaucrats, leading to effi- cient functioning of the state and in mantled after 1991 but barring a handful education institutions. But these are too turn higher revenue. The long-term of privatisations in the Vajpayee era, the few. They have provided highly sub- investment in building human capi- public sector is intact. If anything, it has sidised education to a select few, many tal will benefit the state in the form grown since liberalisation mainly of whom have subsequently migrated of reduced “import” cost of intelli- through the proliferation of subsidiaries overseas to find work. India’s state-con- gentsia and sustained economic and joint ventures. There are 250-odd trolled educational institutions of higher growth. There should not be any operating public sector enterprises, of learning must be allowed more autono- Encouraging move which at least a-third is sick and the only my in setting fees. Of course, those who ones that make serious profit are those need financial support must get schol- Union Finance Minister Nirmala that are protected by the government arships or cheap loans but that does not Sitharaman (pictured) unveiling a (usually by excluding competition). mean that those who can afford to pay ~102 trillion investment road map to gauging the borrowers’ intent, in DHIRAJ NAYYAR Their presence, whether in strength or should be subsidised. Overall, the best help achieve the target of $5 trillion addition to their capacity to repay. weakness, distorts almost every sector way to ensure affordability is to facilitate economy by 2025 comes at the back What, however, takes a heavy toll of of the economy. They are a tiny minority competition by ending the licence-per- of decelerating economic growth and their reserves is the extraneous pres- apitalism and the market econo- among the lakhs of companies in India mit raj. But the regulatory apparatus has shrinking core sector output. The sure, which emboldens some bor- my are often criticised for exacer- but get accorded preferential treatment not moved with the times. The small elite funds would come from budgetary rowers to even go to the extent of Cbating inequalities and creating at the expense of the efficiency of the which has greatly benefitted from the and extra-budgetary resources, as assaulting them. And now, there is elites. Ironically enough, socialist or rest of the economy. system as it exists would like to retain well as those raised from the market pressure on bankers to lend to spur state-dominated economies also create The story of labour laws is also one of the status quo. and the internal accruals of the rele- the nation’s GDP growth. elites and inequalities while professing elite capture and not totally delinked On the other hand, at least some vant state-owned companies. One It is against this backdrop that the equality for all. Capitalism’s excesses from public sector enterprises. Most of excesses of the post-1991 market econo- hopes that the significant invest- present finance minister’s assurance tend to be more easily corrected because the good jobs in the pre-1991 era were my have been confronted determinedly. ments planned in infrastructure pro- that “bankers taking bonafide lend- the state can step in to do the correction. either in government or government The Insolvency and Bankruptcy Code is jects helps produce the much-need- ing decisions will not be harassed by But if the state is in charge, who engi- agencies or government-owned compa- dismantling entrenched, but inefficient, ed green shoots and perks up the problem for other states to follow the the investigating agencies” is to be neers the course correction? nies. Above all else, they were charac- business interests. The GST is bringing wobbling economy. Delhi government’s fiscal prudence welcomed. Hopefully, the assur- Consider the Indian context. Among terised by security of tenure. Labour tax evaders into the tax net. The delivery N J Ravi Chander Bengaluru and management. ances would lead to bank officials the biggest impediments to efficiency, laws, applicable to the entire economy, of welfare to the poor, neglected in the Ravi Kant Mumbai working without fear, or favour, the growth and employment in the econo- did not allow hire and fire. They also decade after liberalisation, was resurrect- Multiple advantages New Year onwards. my are the following three: A bloated imposed the same type of compulsory ed in 2004 with quantum increases in Fear genuine V Jayaraman Chennai public sector enterprises sector; strin- benefits denying flexibility to both spending and reimagined in 2014 with This refers to “A blueprint for fiscal gent labour laws and a higher education employers and employees. Unsurpris- better delivery mechanisms. Of course, management & development” This refers to Sukumar Letters can be mailed, faxed or e-mailed to: system which doesn’t educate enough ingly, the laws pushed 90 per cent of the not all capitalist excess needs state inter- (January 1). Managing fiscal pru- Mukhopadhyay’s letter “Fear exag- The Editor, Business Standard people and, those which it does edu- workforce into the informal economy, a vention. Many of the inefficient crony dence at the Centre is much more gerated” (December 31). Agree, a Nehru House, 4 Bahadur Shah Zafar Marg cate, are often unemployable. None of number which hadn’t reduced signifi- elites of the pre-1991 era were simply difficult than doing so at the state small number of “slothful and cor- New Delhi 110 002 Fax: (011) 23720201 · these problems is new. In fact, they are cantly post-liberalisation until demon- swept away by market competition. level. Nevertheless, turning fiscal rupt fellows” exist in every organisa- E-mail: [email protected] a legacy of pre-1991 India. All of these etisation and GST nudged some firms Prime Minister Narendra Modi is not deficit to surplus in span of four tion, including government depart- All letters must have a postal address and “structural” problems have been high- into the formal sector space. Still, some shy of battling entrenched elites. He has years is commendable for any state. ments. Officials of public sector telephone number lighted at length by economists in the 75 per cent of the workforce is in the already dented severely the old political It is a fact that subsidy increases banks can take any amount of “work last three decades. But no government informal sector. The labour elite created elites and many of their arguments. He government expenses and disturbs of any persuasion has been able to by socialist India have stalled most isn’t afraid of the business elite either. the fiscal health of the state/coun- > implement solutions that are as well- attempts at reform, forcing governments Now, he must turn his attention to the try, but the Comptroller and Auditor HAMBONE known as the problems. to find ways around the problem (the legacy socialist elites — in public sector General report of Delhi made this The system of public sector enterpris- introduction of fixed-term employment, enterprises, in labour and in higher edu- fact a myth. es was created at a time after for example) rather than confronting it cation. There will be resistance. And a Investing in building human cap- Independence when it was believed that head on. lot of clatter. But the Indian economy ital has both short- and long-term the private sector neither had the tech- Nothing typifies the elite capture of and its workforce deserve freedom from multiplier effects on the economy. nical capacity or financial resources to the higher education system than stu- the damaging tyranny of these tiny elites The short-term advantage comes in set up large industries. That rationale dents protesting nominal hikes in nom- in the next decade. the form of enhanced revenue col- stopped applying in India three or four inal fees and charges at India’s premier lection for the government (like decades ago. It should have been dis- universities. India has some fine higher The author is chief economist, Vedanta delivery of various govern- OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXVI Number 100 MUMBAI | THURSDAY, 2 JANUARY 2020 CHART:1 EFFECT OF REVENUE-SHARING FOR LICENCE FEES CHART:2 AUCTION FEES PLUS CALLING-PARTY PAYS FOREGONE VS ACTUAL Push for infrastructure REVENUES (~ cr) Financing projects will be the biggest challenge aking forward Prime Minister Narendra Modi’s Independence Day announcement on investing ~100 trillion in infrastructure, the gov- ernment has put out a National Infrastructure Pipeline and is currently Ttargeting investments worth ~102 trillion by 2024-25. On paper, the plan to increase investment in the infrastructure sector will not only directly help revive economic activity, which has slowed dramatically in recent quarters, but will also improve overall competitiveness and help sustain higher growth in the medium term. However, increasing investment to the targeted level will be challenging, and the government will need to create an enabling environment and constantly work to remove hurdles that have affected the sector over the Sources: 1) TRAI; 2) Fitch Report; Unified Access Service Licensing (UASL), Access Deficit Charge (ADC), Wireless Local loop (WLL) years. Otherwise, the government’s latest initiative could end up being another example of putting the cart before the horse. The first challenge, of course, will be of financing. According to the plan, the Central and state governments will have an equal share of 39 per cent in Save telecom with a capital expenditure, while 22 per cent is expected to come from the private sector. The government finances are stressed, both at the Centre and states, and attaining projected fiscal targets is becoming increasingly difficult. Since n Revenue-sharing for spectrum charges instead of the government cannot touch its obligations such as interest payment and auction fees, as was done for licence fees in 1999, as salaries, invariably, it is the capital expenditure that gets affected. For example, reprise of NTP-99 the major beneficial change. It would also result in in its latest annual study of state government finances, the Reserve Bank of more rational use of spectrum as a public resource for India has highlighted the decline in the quality of spending. Differently put, Radical steps are needed to fix the telecom crisis connectivity and growth, instead of just for govern- higher revenue expenditure is affecting capital expenditure. The upcoming ment revenues. n Union Budget will bring in more clarity in terms of the Central government’s f telecom and connectivity are not revived, one of government’s share was set too high initially. However, Removal of additional spectrum usage charges our most successful sectors since liberalisation two developments in 2004 changed the trajectory. would greatly facilitate communications for develop- ability to finance infrastructure projects. Also, the assumption of a significant Iwill be incapacitated. Government’s share of revenues was lowered to 8 per ment and growth, correcting impediments to efficien- increase in economic growth in the coming years would be tested. In the absence To fix this devastated sector, look no further than cent of revenues, and “calling party pays” was intro- cy in India compared with the rest of the world. A of a significant pickup in economic activity and tax revenues, the government the National Democratic Alliance (NDA) government’s duced for users, as against both caller and receiver windfall profit provision could be instituted in the will find it difficult to fund projects. Further, since infrastructure projects tend action 20 years ago to rescue and revolutionise tele- having to pay for a call. This boosted supply as well as event there are excessive profits, or inappropriate diver- to have long gestation and given the state of the Indian financial system, financ- phony in India through the New Telecom Policy 1999 demand, resulting in explosive growth in mobile tele- sion of funds. ing could also be a challenge for the private sector. (NTP-99). It was before India’s growth story and the phony (see Chart 1), making India among the fastest n Policies to enable new technologies. For instance, Second, the coordination between the central and state governments would mobile phone revolution. The telecom sector had growing and most attractive markets. In hindsight, the latest version of Google Pixel hasn’t been intro- be critical. While the Centre and state governments have so far shown outstanding stalled, and some 15 operators were struggling for sur- government collected far more through revenue-shar- duced in India because 60GHz is available only with coordination in the context of goods and services tax, such an alignment is not vival under the burden of high licence fee demands, ing than the auction commitments, as shown in Chart limited bandwidth. In 5G, India is already far behind, limited customers, and too much competition, with 2. Knowing this, it is incomprehensible that govern- and will take years to benefit from this without drastic the norm. The given political situation and the fact that the Bharatiya Janata no money to build out networks to ments haven’t built the sector to changes in spectrum access. Party has lost power in several states will only make things difficult for the Union earn more revenues to service their improve government revenues, Additionally: government. Third, the government will need to initiate a series of reforms to be overwhelming debt. That was when instead of bleeding it to the point of n Pooling of spectrum to provide broader bands for able to attract the desired level of investment by the private sector. The ability to prime minister Atal Bihari Vajpayee collapse . higher throughput. This can be done through geolo- enforce contracts, for instance, remains a big challenge, as highlighted in the and his team made a bold move, cation database-driven shared spectrum, as in World Bank’s ease of doing business rankings. It is also important to note that working with industry and profes- The present crisis Licensed Shared Spectrum (LSA) in Europe, or India needs a mechanism to ensure that state governments do not cancel con- sionals to effect what seems in retro- The telecom crisis today is much the Authorised Shared Spectrum (ASA) in the US, and tracts randomly because of the change of the guard at the political level. The spect like magic. They implemented same as in 1998. Our regulatory poli- harmonising 60GHz regulations with the US FCC, but government will also need to ease restrictions on acquiring land and hiring some constructive policies for tele- cies have resulted in price-wars and limiting its use to operators. n labour, and will need to avoid the mistakes of the past and design public-private com that set in motion phenomenal beggar-thy-neighbour strategies dis- Possibly structuring spectrum sharing through a growth with vast changes in markets rupting the market, while most peo- consortium approach to infrastructure, and unbun- partnerships (PPPs) more transparently. The recent experience of PPPs and and behaviour. ple are deprived of good, reliable ser- dled, use-based costs for delivery. This can be done foreign investment has been somewhat disappointing, and the sorry state of SHYAM PONAPPA vices. Thus, while India has by separating infrastructure (network development corporate balance sheets makes it doubtful whether the private sector can put The situation in 1998-99 incredibly low prices, they are unsus- and management) from service provision. up its projected share in infrastructure investment. There have been suggestions The sequence of events began in 1998, tainable, far below what could rea- n Another possibility is to have two or three vertically to set up 100 per cent government-owned special purpose vehicles (SPV) when the Prime Minister’s Office (PMO) decided to sonably be expected from the high volumes and the integrated consortiums, each with its own infrastruc- that secure all permissions, licences, and clearances, as well as undertake look into the problems in telecom. After considering experience curve reduction in costs. These price levels ture (which will require significantly more capital land acquisition. The SPV is then bid out to private developers. It’s an idea studies by ICICI and the Bureau of Industrial Costs do not support even the maintenance of current service investment). worth considering. and Prices, the PMO consulted with professionals with- levels, let alone expanding coverage to the sparsely n An active government role in coordinating indus- in and outside the government, stakeholders in industry populated countryside. Urban areas with low prices try-wide, consultative, goal-oriented action through and financial institutions, and formulated the NTP- often suffer unreliable services of low quality, while the formulation of enabling policies and regulations. 99. While the policies were not optimal because political less populated areas are deprived of services altogether. Multiple government agencies are involved, namely, accommodation was mixed with objective-oriented Further, the squeeze on operators is aggravated DoT, MeitY, TRAI, DD, Finance, Law, as well as state Making crop insurance work processes, a fundamental improvement was that gov- because of the Supreme Court upholding the govern- governments for uniform Rights-of-Way and tower PMFBY has failed to impress stakeholders ernment collected charges from operators as a share ment’s apparently gaming approach to defining installation. of revenues actually earned, instead of up-front pay- “Adjusted Gross Revenues”, imposing retrospective Functioning without mobile telephony seems he government’s move to revisit the flagship crop insurance scheme ments on auction commitments for licences. This was dues on all spectrum holders. unimaginable today. Instead of being among the lead- — the Pradhan Mantri Fasal Bima Yojana (PMFBY) — is a welcome a difficult political decision, because of a mistaken pub- The government needs to gather the resolve to do ers using telecom for our benefit, on our present tra- step to make this well-intentioned risk-mitigation measure beneficial lic perception that it was a giveaway to the operators. what prime minister Vajpayee did in 1999: A radical jectory we are likely to miss these opportunities for for the farmers. However, whether such a review called for setting up The government held firm despite being taken to court, intervention to revive the telecom sector and the econ- years — unless the government finds the imagination T and the decision turned out to be clearly in the public omy. PMO officials have reportedly been meeting with and courage to act. a high-level group of ministers (GoM) headed by the defence minister and having the home minister, among others, as a member is debatable. Field experts, along interest, as results detailed below were to prove. the Department of Telecom for months. Now, we need Success did not follow immediately, because the decisive action, including: [email protected] with representatives of the stakeholders like farmers, insurance companies, and the state governments, could perhaps do a better job. The need for a review and revamp of the PMFBY was felt soon after its launch in 2016, though the govern- ment has taken its own time to acknowledge it. This scheme, despite being better than all its predecessors, had failed to impress any stakeholder because of some inherent structural, financial, and logistical deficiencies. Majority vs minority cliffhanger The all-pervasive dissatisfaction on this count is evident from the decision of three major agricultural states — Andhra Pradesh, West Bengal, and Bihar t’s turning out to be a cliffhanger with the last retired” and who insisted on being a “super board” by But mere reliance on perception and the absence of — to withdraw from it. At least three more states — Karnataka, Gujarat, and set to decide the winner. Corporate India is wanting to pre-vet and pre-decide what gets formal factual evidence can’t be the basis for an order of this Odisha — are also intending to do so. They find the cost of running the scheme Ibreathlessly waiting for the outcome that will approval in the Tata Sons board. The accusation that magnitude. redefine the legal boundaries of majority versus key Tata Trust directors left Tata Sons board meetings, In any case, independent lawyers argue, the Indian higher than the benefits from it and are, therefore, making alternative arrange- minority shareholders. The ball will be in the hands keeping others waiting, in order to obtain instructions corporate law is clear that the rights of a shareholder ments for recompensing the farmers’ losses. This aside, four private insurance of the Supreme Court (it’s now a near certainty that from Mr Tata is distressing and does not do justice to are essentially economic rights, which — in the absence companies have also opted out of it, maintaining that it is a loss-making business. the Tatas will knock on its door), and every twist and the Tatas’ hard-earned reputation of being the gold of a contract — do not include legal right to participate Worse still, more companies are likely to quit this business, though the common turn of that delivery will be analysed in great detail standard for Indian corporate governance. in the management of the company. Conventional wis- impression is that the insurers are cornering the bulk of the subsidy given by for the impact it may have on the So even if the apex court rejects dom is that reinstatements are possible only for the government. The farmers, too, are discontented with the scheme though legal landscape of India Inc. the NCLAT verdict, Mr Tata and the unionised workers and not managerial staff or man- they have to pay a premium of merely 1 per cent for rabi crops, 1.5 per cent for No one had expected India Inc’s group bosses need to reassess their agement cadre. kharif crops, and 5 per cent for commercial crops. most dramatic and consequential cor- working relationship and address This means the board has the power to replace A key flaw in the design of the PMFBY is the involvement of the states as porate battle in recent history to stretch the concern that the shareholding its chairman (Mr Mistry’s removal was resolved upon this far. The Tatas were miles ahead of trusts of a holding company with by a majority of the directors — seven out of nine equal partners with the Centre for sharing expenses (read subsidy). Defaults in the Mistrys after the National minority holdings in operating com- who voted in favour of his removal as the executive the payment of their share of funds, which are quite common, affect the insur- Company Law Tribunal dismissed the panies take key decisions, not the chairman) and the shareholders have the power to ance companies’ ability to clear settlement claims promptly. Empowering the latter’s pleas challenging Cyrus Mistry’s chief executives or the boards of the appoint or remove a director. No court can take away states to notify the crops, the extent of the land, and the maximum sum that removal as Tata Sons chairman, as also operating companies. The Tata that power from the board and the shareholder. The can be insured have also contributed to the downfall of the PMFBY. The states the allegations of rampant misconduct group’s opaque corporate structure Supreme Court itself has time and again held that often fix the caps rather low to contain their financial burden, thereby curtailing on the part of Ratan Tata and the com- — two-thirds of Tata Sons’ shares the powers entrusted upon the minority sharehold- the scheme’s utility for the cultivators. Moreover, allowing banks to insure the pany’s board. But just when everybody POWER POINT are held by trusts — must be mod- ers cannot be used as a weapon against the majority. crops of their borrowers is another problematic feature of the scheme. The thought the match was over, came the SHYAMAL MAJUMDAR ernised. In that context, any assumption by the executive banks usually adjust the settlement amounts against the loans, thus leaving bouncer from the National Company The second issue which will have chairman that he would have a free hand in running the farmers high and dry. The insured cultivators often do not even get to know Law Appellate Tribunal (NCLAT). It a far-reaching impact on corporate the affairs of the company is incongruous with cor- reinstated Mr Mistry as the executive chairman of the India is the legal status of Tata Sons. Is it a partnership? porate democracy. the details of the transactions. Tata group and termed the conversion of Tata Sons The NCLAT certainly thinks so, and says that “that the Thirdly, the NCLAT order is intriguing as it Though the scheme envisages the use of technology, notably satellite imag- from being a to private illegal and Tata group which is the majority group should consult exceeds even the prayers made by Mr Mistry who ing, to expedite the assessment of crop losses, it has so far not happened to the oppressive to the minority members and depositors. the minority group —the Shapoorji Pallonji Group — never asked for this return as executive chairman. It desired extent. The methods used by the state governments to gauge the damage While it’s anybody’s guess what the Supreme Court and any person on whom both the groups have trust, would anyway be impractical for Mr Mistry to reas- are mostly time-consuming and non-transparent, resulting in trust deficit. will decide, a few points stand out. First, the Tata group for appointing an Executive Chairman or Director as sume his position three years after he was removed. Unsurprisingly, therefore, inadequate or non-payment of compensation is the needs to seriously introspect about the way it functions. the case may be...”. This, the tribunal feels, is necessary Also, the dispute related directly to the affairs of Tata main grudge of the farmers against the scheme. If the GoM can suitably address The NCLAT judgment has surely dented Mr Tata’s rep- for better protection of interest of all stakeholders. The Sons and the other group companies were not even these and numerous other minor, but pertinent, glitches in the implementation utation as he has been asked to “desist” from interfering point is that the tribunal hasn’t given any reason why a party before the tribunal. Hence, the remedies sug- of the PMFBY, this vital risk-hedging measure can prove a boon for the farmers. in the affairs of the group. In the process, the tribunal it has come to such a decision. This is important gested by the NCLAT has stumped many — even has given legitimacy to Mr Mistry’s accusation that the because if it’s a partnership, then Mr Mistry can legiti- those outside Bombay House. Let the run-up to the chairman emeritus acted like “a chairman who never mately argue that his minority rights were suppressed. last ball begin!

characteristics that enable Professor criteria, Professor Chaulia has applied selling raw materials and natural wished for continuity from Chaulia to illustrate his arguments. certain political criteria in selecting resources such as oil. The US’ trade Washington after the November 2016 The Trump effect Among others, none of these four these four countries. Explaining profile was beginning to resemble a presidential election, and instead got a countries share a border or a continent President Trump’s protectionism, the country like Chile’s, which has transactional America First leader who polity and economy of many countries, with the US: So being “Trumped” is a author extensively quotes the historically been stuck in a rut of selling had little regard for the democratic and including India. In Trumped : very different experience from the one Democrat politician David Jacoby. commodities like copper and other geopolitical dimensions of the US- Emerging Powers in a Post-American faced by Mexico or, for that matter, the According to him, with the unusually metals, rather than a country like India relationship. What emerged was World , Professor Sreeram Chaulia, vulnerable Central rapid pace of Germany, which has been revered for an all-consuming neo-mercantilist arguably one of India’s most formidable American TRUMPED: globalisation, its engineering expertise. In other passion for forcing every American commentators in print and visual countries. Although Emerging Powers In and especially words, the US was beginning to look partner and ally to cough up money, BOOK REVIEW media on foreign policy issues, they have specific Post-American World the rapid rise of like a less developed country. open markets and return jobs it had critically analyses the essence and trade disputes with Author: Sreeram Chinese If this is Mr Trump's worldview, how “stolen” from the US homeland RUP NARAYAN DAS consequences of this trend. the US, none of the Chaulia exports, do the four countries look at the US? The through the globalisation-fuelled In this richly informative and chosen four has the countries that author writes that when one looks at outsourcing spree. onald Trump’s election as insightful book, he has identified India, degree of complex Publisher: import large America from New Delhi, Ankara, He observes that the contradiction President of United States, still Brazil, Turkey and Nigeria as examples interdependence Bloomsbury amounts of Brasilia and Abuja, it is primarily from between Make in India and Make Dthe world’s most powerful to demonstrate how countries are faced by China. Price: ~799 these products the angle of each national capital’s self- America Great Again is unmistakable. country in spite of its relative decline, trying to cope with the impact of Further, while Pages: 256 feel deluged interest. Contrary to elite liberal If the liberal international has not only impacted that country’s American policy under President each has challenges and Western assumptions that all countries establishment, backed by corporate domestic economy and polity but also Trump. The selection of these four of “personalism” of competitively are bound to benefit from partnering or America, perceives America’s — and more importantly — the world countries is not arbitrary. The rationale their own, all retain a level of attacked. In the 1980s, the US was allying with a benign hegemon like the partnership with India as win-win, Mr at large and individual countries, both for choosing them is provided in an democratic space with competitive known and respected worldwide for its US, emerging power centres evaluate Trump and his populist supporters domestically and in their bilateral excellent foreword by Professor electoral systems and, to a greater or manufacturing strength, and the America via the human welfare benefits look at it as zero-sum game in which relationship with the US. In particular, Andrew F Cooper of the Balsillie School lesser extent, vibrant civil society and economy grew between 3.8 and 4.7 per associated with any interaction. America is getting a raw deal. Mr Trump’s policy of “America First” of International Affairs and the media presence. In other words, if Jim cent from 1994 to 1997. However, the US India is a major power that has been and gradual withdrawal from global Department of Political Science, O Neil, the investment banker, in his gradually lost its competitive considerably affected by President The reviewer is a senior fellow of Indian responsibility and governance University of Waterloo. He writes that formulation of BRICs (Brazil, Russia, advantage in manufacturing goods. It Trump’s domestic and foreign policies. Council of Social Science Research affiliated structures have a resonance with the that these countries share some India, and China) had certain economic was becoming more competitive in The author writes that New Delhi to Indian Institute of Public Administration QUICK TAKE: ESCORTS DIPS ON MUTED SALES “Short term is unclear, The Escorts stock fell close to 4 per cent after the but long term is The Smart excellent" Note: what December quarter sales disappointed the Street. is long term, must Despite the 10 per cent sales decline, analysts NEVER be specified' MUMBAI | continue to be positive, given the recovery in THURSDAY, 2 JANUARY 2020 SHANKAR SHARMA, farm incomes and agri-led spending, which co-founder, Investor should boost demand for its tractors First Global WWW.SMARTINVESTOR.IN FOR INFORMED DECISION MAKING < Baroda, Union MFs Higher volumes, margins to fuel bank on mergers growth for city gas distributors Rising demand, soft natural gas prices demand and supplies. For FY20 and FY21, analysts at bode well for earnings of major firms IIFL expect Gujarat Gas to reg- ister 44 and 15 per cent year- to increase reach UJJVAL JAUHARI and gas peers, driven by on-year volume growth. Mumbai, 1 January strong volume-led earnings This is due to sustained growth, and margin expan- off-take from the Morbi clus- AUM of both companies declined in September quarter The Gujarat Gas stock surged sion during the September ter (given the ban on coal over 7 per cent and scaled its quarter (Q2). usage); growth in sales to oth- JASH KRIPLANI & ABHIJIT LELE all-time high on Wednesday. The CGD companies saw er smaller industrial units Mumbai, 1 January At the same time, the stock improvement in margins of upon expnasion of its net- of Indraprastha Gas (IGL) is 153-460 basis points in the work and higher off-take he smaller-sized fund also close to its peak, while September quarter year-on- from existing players; and houses — Baroda that of Mahanagar Gas (MGL) year, while volumes grew up stable growth in CNG and T Asset Management is trading at around its 22- to 40 per cent year-on-year, domestic PNG sales. Company (AMC) and Union month high. with Gujarat Gas leading the Though MGL may not AMC — which are yet to gain The Street’s pack. Not sur- EARNINGS GROWTH TRAJECTORY have won new geographical a significant foothold in ~27- confidence on prising then, areas, the management has, EPS (~) trillion (MF) city gas distrib- that their prof- CAGR (%) nevertheless, guided for 5-6 industry, are looking to utors (CGD) its rose 25-125 FY19 FY20E FY21E FY19-21E per cent volume growth. increase their market share as remains high, per cent year- Gujarat Gas 6.1 12.7 14.6 54.8 Rising CNG and PNG bank mergers give their spon- considering on-year in Q2. Indraprastha Gas 14.9 16.3 18.8 12.2 demand in Mumbai and sor banks access to a wider the firm The for- Mahanagar Gas 72.4 77.2 82.3 6.6 pipeline expansions in branch network. demand for ward outlook E: estimates, EPS: earnings per share Source: Research Maharashtra are likely to drive At the end of the gas, rising vol- remains growth. For MGL, the over- September quarter (Q2), umes, and strong, say hang of stake sale is also over Union AMC’s average assets without incurring any further EYEING INROADS (~ cr) future growth analysts. India’s energy mix to Abhijeet Bora of Sharekhan. with Shell India having under management (AAUM) significant costs. This is potential. Volume growth 20 per cent by 2025 from the IGL, led by growth in the already sold its stake. Both AMCs are looking to gain stood at ~4,089 crore, while where the bank mergers will All three is expected to 6 per cent at present, which national capital region (NCR), As volume growth market share following the that of Baroda AMC stood at come into play as they will companies be healthy, led — along with the thrust to use of CNG for inter-city trav- remains firm, the soft natural ~10,676 crore. help us in quickly plugging bank merger have received by increased promote use of natural gas to el, increased conversion to gas prices continue driving Compared to the corre- the gaps in the system, and AAUM in quarter upgrades by availability of reduce pollution — provides CNG on account of BS-VI operating performance and sponding period last year, leverage our network,” said an n Sep 2018 n Sep 2019 foreign brokerages. natural gas, as well as rising strong volume growth oppor- implementation, and contri- profits for these companies. Union AMC’s AAUM was official of Bank of Baroda. With lower natural gas demand for CNG (compressed tunity for the three listed CGD bution from newer geogra- Foreign brokerages have also down 16 per cent, while the For the relatively small- prices (global prices down natural gas) by automobiles, companies. phies, is seen reporting good upgraded earnings for AAUM for Baroda AMC was sized Union AMC, adding to over 20 per cent in two PNG (piped natural gas) for This, coupled with the allo- growth, which analysts at Gujarat Gas by 13-15 per cent 4,910 13,563 down 21 per cent. its sales team would be key to 4,089 months), their profitability, household and industrial use, cation of cheap domestic gas Motilal Oswal peg at 10-11 per and for MGL by 7-11 per cent Both fund houses have lost leveraging the enhanced dis- 10,675 too, will continue to improve. more so in the back of pollu- (for CNG and domestic PNG cent. for FY20 and FY21. assets over a period, even tribution network. Baroda AMC Union AMC The CGD companies have tion control measures. use) and low LNG prices, will The higher volume growth IGL, too, is amongst top though the MF industry has “The main benefit will be AAUM: Average assets under already outperformed their The government, too, aims help CGD companies to sus- for Gujarat Gas is seen driven mid-cap picks of some foreign managed an overall growth of that the number of bank management Source: Amfi upstream and downstream oil to increase the share of gas in tain high Ebitda margins, says by strong industrial sector brokerages. 6 per cent, despite headwinds branches will double post- from regulatory changes, and merger. We will be able to with 44 players currently the weakness in debt and access much larger number operating. The penetration of equity markets. of locations. Andhra Bank is MFs in India stands at 11 per “The bank merger gives us stronger in Telangana and the cent of gross domestic prod- Benchmark indices begin access to a wider customer Andhra region, whereas uct, which is significantly low- base and more importantly a has a strong er than other developing new year on a flat note more geographically diversi- presence in Karnataka,” said economies such as Brazil (59 fied presence. While Dena G Pradeepkumar, chief exec- per cent) and South Africa (49 The benchmark indices started remained positive on the Bank is more strong in west- utive officer of Union AMC. per cent). the New Year with a slight gain, report that India’s current ern parts, Vijaya Bank has a Pradeepkumar added the According to a report by as the Sensex rose 52.28 points account deficit narrowed to 0.9 stronger presence in the AMC would need to add more the industry body Association or 0.13 per cent to close at per cent of the GDP, or $6.3 bil- southern parts,” said Anthony people to its sales force to cater of Mutual Funds in India, the 41,306.02 on Wednesday. lion, in the September quarter, Heredia, chief executive offi- to this widened distribution industry has the potential to Financials, IT, FMCG, and on account of lower trade cer of Baroda AMC. presence. Both fund houses reach the ~100-trillion mark; power stocks advanced. deficit,” said Narendra Solanki, According to those privy will get access to a much wider 3.7-times from the current lev- The broader Nifty closed head of fundamental research to the development, the merg- customer base due to existing els of ~27 trillion. 14.05 points or 0.12 per cent (investment services) and AVP er is an important one for the relationships of the banks that “Fund houses of all sizes higher at 12,182.5, with 23 con- (equity research), Anand Rathi bank, given it will help it are being subsumed. have a huge opportunity in stituents ending in the green. Shares & Stock . source a larger part of its rev- MF participants say there front of them, given the “Indian markets started the In the broader market, the enues through fee-based remains a huge scope of under-penetration of the new year on a positive note, BSE MidCap and SmallCap income streams. untapped opportunity for domestic MF industry,” said without much cues on the outperformed the bench- “The idea is to find ways growth, as the market the chief executive officer of global front, as markets mark indices, rallying up to to increase fee-based income remains underserved even another fund house. remained closed. Sentiments 0.64 per cent. PTI

THE COMPASS Page Industries’ near-term outlook not comforting

Delayed winter, SHREEPAD S AUTE December quarter. Sustained up, growing volumes may lysts. In the September quar- demand pressure and not be easy in the challeng- ter, while a lower base, retail higher input The Page Industries stock delayed winter are likely to ing demand environment. schemes, and higher sales has risen by 7.5 per cent over have hurt its volumes. This In fact, higher competi- incentives by the company costs, high base the last one month, outpac- could wash off the recent tive intensity could restrict had led to volume growth of may hurt growth ing the Sensex. gains by the stock.” Page’s volume growth even around 9 per cent, higher raw The latter has gained 1.3 Page is the Indian maker beyond the December quar- material cost had resulted in per cent during the same of popular premium inner- ter. According to Anand a 145-basis-point year-on- period. The recent reaffirma- wear brand Jockey. The Rathi’s report: “While com- year contraction in Ebitda tion of a good credit rating high-margin winter wear petition wasn’t in (earnings before interest, tax, (AA/A1+) by ICRA and expec- products have an approxi- the past, the newer compe- depreciation and amortisa- tations of higher growth of mate share of 20-25 per cent tition (Van Heusen from tion) margin to 19.2 per cent. high-margin winter wear in in the company’s overall Aditya Birla Fashion & Retail, Investors should await December quarter have business, according to esti- US Polo Innerwear by Arvind the management’s commen- turned investor sentiment mates of some analysts. Fashions) is more credible, tary on volume and margin positive towards Page. The recent price hikes in has sound brand equity and fronts post December quar- However, these expecta- select products, taken in better distribution.” Thus, ter earnings, even as Page’s tions may be realised at least November and December, as how the company navigates long-term growth potential in the December quarter, and well as the high base in the this in the coming quarters appears healthy. The stock, may lead to some correction December 2018 quarter, would be crucial. which had halved over a in the stock price. when volumes grew 12 per Additionally, prices of key year’s period ending August According to an analyst cent, will also have a bearing raw materials are still higher, 2019 and has seen some at a domestic broking house, on volume growth figures of even after the recent correc- rebound thereafter, is still “Page will continue reporting the recently concluded quar- tion. This may keep hurting trading at a rich 48 times muted volume growth in the ter. While winter has picked the gross margin, say ana- FY21 estimated earnings. Improving mix to keep growth intact for Narayana

Return ratios to RAM PRASAD SAHU cent growth in operating profit led by higher utilisation and improving mix. double over the With a jump of 61 per cent, Narayana Analysts at Elara Capital believe that Hrudayalaya was the best-performing the addition of an oncology unit will FY19-22 period hospital stock last year. drive the revenues and profits of this Given the 6 per cent addition to overseas venture. those gains on Wednesday, the rally The Cayman subsidiary accounts seems to have more steam left. for a quarter of the consolidated oper- Investors have been switching from ating profit of the company. large generic pharma companies Core growth is expected to continue (which have been pegged back by com- at its Bengaluru unit where it is adding pliance issues) to health care service complex procedures and programmes providers, in search of higher returns. to boost revenues and improve its mix. Further, completion of capital The three hospitals posted a Cost control measures and higher share expenditure programme, asset light ~70 crore loss at the operating profit of overseas patients should also help. expansions and improving return ratios level in FY19. With utilisation levels The company is enhancing its capacity have led to the switch. For Narayana, improving, the hospitals are expected and investing in equipment to offer a in addition to the strong operating per- to turn positive at the operating profit wider range of services at its other cen- formance over the last five quarters, level over the next two years. tres across India. there are additional triggers. The growth in its multi-speciality Analysts at ICICI Securities believe The losses at new hospitals at hospital at the Cayman Islands is anoth- that the company’s focus on affordable Gurugram, Mumbai and Dharamshila er area investors are keeping an eye on. care and asset right model will improve are expected to come down going The hospital targets North average realisations and double its ahead. This is due to higher occupan- American patients given the price dif- return ratios over the FY19-22 period. cies, scaling up of operations and ference of treatment at its unit and in Given the sharp run up in the stock, expansion into new categories. the US. The hospital posted a 58 per investors can look at the same on dips. MUMBAI | THURSDAY, 2 JANUARY 2020 THE SMART INVESTOR 11 . < > TODAY’S PICKS BY DEVANGSHU DATTA ICICI Bank: Investor sentiment on a high Nifty Current: Rising share of retail loans, digitisation, and an abating pool of stressed assets point to improving outlook 12,182 (Fut: 12,252) SHREEPAD S AUTE STREET SMART ICICI Bank has a lower share in (lower rating indicates higher Target: NA Mumbai, 1 January the loan book relative to other default probability) corporate ICICI Bank gained 47% in CY19 Stop long positions at 12,150. Stop short positions at 12,325. Big moves large peers, would drive its retail and SME accounts have further could go till 12,400, 12,100. A long Jan 16 12,400c (31), short 12,500c (13) ith a near-50 per cent loan book growth.” Though reduced to 2.6 per cent of its could gain 10-15 if the index future tests 12,400. gain in 2019, ICICI risks to asset quality cannot be advances compared with 4 per W Bank tops the list of ruled out amid a weak econo- cent a year back. Also, the major banking stocks such as my, the bank has fared well so bank’s exposure to stressed State Bank of India, , far in these segments with sectors such as power has also Bank Nifty and HDFC Bank, which have STRONG improved data history (through lowered. Current: delivered 13-34 per cent returns MOMENTUM assessment tools like CIBIL) According to Motilal Oswal 32,103 (Fut: 32,300) in this period. Key drivers of and focus on existing cus- Securities’ report of last month, Target: NA Expectations of greater return ratios tomers, she adds. ICICI Bank has navigated well shareholder value under the ICICI Bank’s continued through a challenging macro Stop long positions at 32,175. Stop short positions at 32,425. Big moves FY18 FY19 FY20E FY21E leadership of its new managing Net interest income 2.8 2.9 3.1 3.2 investment in technology/digi- environment with limited could go till 32,650, 31,900. No clear trend at the moment. director and chief executive tisation is helping in cost effi- exposure to newly surfaced Operating expenses 1.9 2.0 2.1 2.1 officer, Sandeep Bakshi, have ciency, including customer stressed names. All these fac- revived investor interest in the Bad loan provisioning 1.7 1.8 0.9 0.6 acquisition costs. For instance, tors should help it fare better in Titan stock, which was reeling from Return on assets 0.8 0.4 1.1 1.6 in the April-September 2019 terms of slippage (accounts issues relating to management Return on equity 6.8 3.2 10.1 15.7 period, the bank acquired 42- turning bad), overall bad loans, Current: ~1,155 and asset quality around a year All figures in %; E: estimate 53 per cent of its customers in and therefore provisioning All figures, except for return on equity, are as a percentage of average assets Target: ~1,135 back. Going ahead, too, the Source: Motilal Oswal Securities the personal loan and credit (refer table). Most of ICICI stock could get further support card segments through the dig- Bank’s significant subsidiaries Keep a stop at 1,165 and go short. Add to the position between 1,140- if expectations of higher return improve 1.6 per cent by FY21 bank’s upward thrust for retail- CASA ratio is marginally lower ital channel at much lower such as ICICI Securities, ICICI 1,145. Book profits at 1,135. ratios and steady improvement from around 1 per cent in FY19. isation. For instance, the share than a year ago, it is the sec- costs. Focus on technology-led Prudential Life Insurance, ICICI in business and financials The domestic brokerage fore- of retail loans in the loan book ond-highest among peers. growth across business verticals Lombard General Insurance, materialise. sees around a 16 per cent upside has moved up to around 62 per A rising branch network is likely to help the bank main- and ICICI Prudential AMC are Increased focus on retail in the stock from the current cent as of September 2019 from (added 346 branches in the tain healthy operating metrics. also doing well, and their long- Power Grid loans, digitisation, and an abat- levels, and that is higher than 48 per cent in 2016 and 57.3 per September 2019 quarter) and This apart, the bank’s asset term prospects remain good. Current: ~196 ing stressed-asset pool are high single-digit returns that cent as of September 2018. Also, digitisation initiatives are quality, mainly the In this backdrop, long-term expected to provide an impetus many brokerages anticipate. its low-cost current and savings expected to provide good sup- wholesale/corporate portfolio, investors could use corrections Target: ~200 to its return ratios (such as The average target price, account (CASA) deposits have port to the bank’s retail busi- also looks favourable, and to buy the stock, which, despite returns on equity and assets) according to an analyst poll by risen at a compound annual ness. hence can provide a further last year’s rally, is currently trad- Keep a stop at 194 and go long. Add to the position between 198-199. over the medium term. Bloomberg, indicates an upside growth rate of 17 per cent Mona Khetan, analyst at push to return ratios. Consider ing at 2.7 times the FY21 esti- Book profits at 200. According to analysts at Motilal potential of about 8 per cent. between September this year , says: “The this, according to the mated book value compared Oswal Securities, ICICI Bank’s Like other large peers, some and the same month in 2016. unsecured-personal loan seg- September 2019 quarter data, with three-four times for some return on assets is expected to data points clearly show the Although at 46.7 per cent, the ment and credit card, where ICICI Bank’s BB & below-rated other private banks. HDFC Current: ~2,434 Target: ~2,465 Industry bats for relaxation of Route Mobile Keep a stop at 2,410 and go long. Add to the position between 2,450- gets Sebi’s 2,460. Book profits at 2,465. nod for IPO Target prices, projected movements in terms of next session, offshore fund taxation rules unless otherwise stated ILLUSTRATION: BINAY SINHA ASHLEY COUTINHO units of their global portfolios, have Mumbai, 1 January SECTION 9A been keen to shift to the country as it n Came into with effect from will enable them to locally connect Flurys owner files Industry players are lobbying for April 1, 2016 with bankers, analysts, institutional relaxation of rules under Section 9A n Aimed at benefiting offshore investors, as well as the company’s of the Income Tax Act in the upcom- management. papers for ~1K-cr IPO ing Budget. fund managers of Indian origin The shift was not possible because Section 9A, introduced on April 1, managing local units of the adverse tax impact, given that SUNDAR SETHURAMAN in 15 cities across India, with 2016, exempts funds from getting n Provides for special regime to the presence of a fund manager in Rajdip Gupta, MD and Mumbai, 1 January 1,937 rooms. The company’s taxed in India. Only a fund manager’s facilitate location of fund India could entail business connection, Group CEO, Route Mobile retail food and beverage busi- income or management fee will be managers of offshore funds permanent establishment, and tax res- Apeejay Surendra Park Hotels, ness segment comes under subject to tax. to India idence risks for offshore funds. Route Mobile has received which owns the famous bak- the brand Flurys. Flurys has According to current norms, the To address this gap, the Finance Bill, Sebi’s nod to raise an estimat- ery brand Flurys, on 38 outlets in Kolkata and one total investment of a person resident n The fund management activity 2015, had introduced Section 9A in the ed ~600 crore through the ini- Wednesday filed its draft red outlet each in Navi Mumbai in India, whether directly or indirectly, does not constitute business I-T Act, 1961, to provide a safe harbour tial public offering (IPO) route. herring prospectus (DRHP) and New Delhi. The company shall not be more than 5 per cent of the connection in India regime for the onshore management The IPO comprises of a fresh for a ~1,000-crore initial public is planning to get listed by fund corpus. The percentage of resident of offshore funds. However, the rules issue worth ~350 crore and an offering (IPO). The company April 2020. ICICI Securities, money has to be specified by way of a have been onerous and only a few offer for sale of up to 65 lakh filed its DRHP with the Axis Capital and JM Financial declaration to the government as well. the first year of starting operations. II FPIs, under the erstwhile FPI funds have been recently granted equity shares by the promot- Securities and Exchange are the bankers to the issue. “How do I know if the money I get Industry players want this time frame regulations, would be extended to the approvals under this regime. ers, Sandipkumar Gupta and Board of India (Sebi). According to PRIME in the fund is resident money or not, to be increased to three to five years. two categories under the new two-cat- The government has been giving Rajdipkumar Gupta. Motilal The IPO comprises ~400 Database, only 16 companies especially if a fund of fund or institu- “It is difficult for funds to garner egory regime. concessions to make the shift practi- Oswal Investment Advisors, crore of fresh issuance of had come with IPOs in 2019, tion is putting the money? It is virtually ~100 crore within a year if they do not Even after getting a nod, a fund has cally feasible. In May this year, the IDBI Capital and YES shares, along with an offer for against 24 the previous year. impractical to get an investment dec- have an established track record over- to wait till the next financial year to Central Board of Direct Taxes had clar- Securities are the bankers to sale worth ~600 crore. The Even the total amount raised laration and/or investor names from seas,” Sanghavi said. start operations, as per existing norms. ified that asset management compa- the issue. The firm plans to company is planning to use through IPOs shrank to them,” said Vaibhav Sanghavi, co-CEO, Industry players want offshore This means that a fund getting an nies (AMCs) approved under Sebi reg- utilise the proceeds from the the proceeds of the fresh issue ~12,362 crore in 2019, almost a Avendus Capital Public Markets funds such as FPIs to be allowed the approval on December 1, 2019 can only ulations would be considered eligible sale towards the repayment of to repay its burrowings. third of the ~30,959 crore Alternate Strategies, which got the nod benefit of safe harbour provisions start collecting money from April 1, fund managers under Section 9A. This loans and for purchase of Apeejay Surendra Park raised in the previous year. for a fund under Section 9A the previ- without the need to satisfy conditions 2020. Funds should be allowed to col- allows Indian AMCs to directly con- premises in London and Hotels owns luxury boutique However, most companies ous year. mentioned under Section 9A of the Act. lect money immediately after getting duct fund management activity for Singapore, and a business hotels in India under “The that were listed in 2019 had Current norms mandate that a They want the government to clarify the necessary approval, experts say. offshore funds. The government process outsourcing centre Park” brand. At present, it performed well in the second- fund-availing Section 9A has to have a that the relaxations provided under Several offshore fund managers of relaxed two minor conditions in the in Noida. owns and operates 22 hotels ary market. minimum corpus of ~100 crore within this Section to Category I and Category Indian origin, who manage the India Budget last year. SUNDAR SETHURAMAN

COMMODITIES1 > Nepal import batters Rise in poultry, mutton prices on Darjeeling tea prices winter demand AVISHEK RAKSHIT Kolkata, 1 January DILIP KUMAR JHA Mumbai, 1 January > PRICE CARD nchecked flow of Nepal tea into India has taken a big toll on the The price of poultry products and U Darjeeling variety with its prices mutton have risen by up to 20 per cent falling 20-25 per cent last year. in a month, due to a sudden increase As on Dec 31 International Domestic ------Orthodox tea, imported from Nepal and in consumer demand with a record # # Price %Chg Price %Chg commonly known as Himalayan tea, is sim- fall in temperature this winter. METALS ($/tonne) ilar to the Darjeeling variety in taste, aroma Mutton is retailing here at ~600 a Aluminium 1,791.0 5.1 1,961.3 -1.4 and flavour. However, Nepal tea is over 50 kg, from ~500 a kg about a month per cent cheaper than the tea from the hills before. That of broiler chicken is Copper 6,183.5 8.0 6,500.4 6.6 of northern Bengal. ~150-160 a kg, as compared to ~130 a Zinc 2,315.0 -2.6 2,563.7 -1.8 Industry officials alleged that buyers, kg earlier. primarily operating in the loose leaf mar- The demand for mutton, chicken Gold ($/ounce) 1,521.1* 3.3 1,703.0 3.4 ket, have been procuring this tea. and eggs normally increases with Silver ($/ounce) 18.0* 6.0 20.3 4.5 A section of dishonest traders have been onset of winter. The minimum tem- ENERGY passing Nepal tea as Darjeeling, which is a perature in Delhi was three degress protected and has a Geographical “There have been some malpractices One of the costliest teas in the world, celsius two days ago, the lowest for Crude Oil ($/bbl) 66.6* 11.2 68.0 11.6 Indication trademark. Legally, tea from going on with Darjeeling tea, particularly Darjeeling’s Indianised camellia sinesis is that day for a century. eggs by 12-13 per cent across the Natural Gas ($/mmBtu) 2.2* -6.6 2.2 -6.3 Nepal can be freely imported by anyone in in the domestic market. This has been produced in limited quantity at just above “Demand for mutton is also com- country. AGRI COMMODITIES ($/tonne) India under the free-trade agreement. pulling down the price realisation of 8 million kg (mkg). Quality and limited ing from South Indian states; supply Tandoori chicken in Delhi is now While Darjeeling tea, in bulk sales, is Darjeeling tea,” an industry official said. availability of this tea keeps the average from Rajasthan and Maharashtra was ~98 a kg, from ~73 a kg in early Wheat 193.6 13.3 307.2 4.6 priced anywhere between ~320 and ~360 In fact, for the Goodricke Group, prices higher than the Assam or Nilgiri vari- insufficient,” said Shahnaz December. The National Egg Sugar 361.2* 4.9 487.7 -1.2 per kg on an average, the orthodox variety which has gardens across West Bengal eties. “However, price is bound to fall if Thanawala, president, Bombay Coordination Committee says the of Nepal tea is not even half that price. In as well as Assam and produces some of supply of this variety increases in the Mutton Dealers Association. A large price is ~515 for 100 numbers in Palm oil 775.5 50.6 1,215.3 43.5 2019, prices of Darjeeling tea had been the top quality teas from these areas, domestic market; and it is here that Nepal number of dealers are reported to have Mumbai, from the earlier level of ~496 Rubber 1,635.8* 13.0 1,835.2 4.5 down by ~70-80 per kg. prices of Darjeeling teas fell by 18 per or Himalayan tea is playing a spoilsport,” a come from South Indian per 100. Cotton 1,535.5 16.6 1,593.0 -3.4 “It is not possible for the consumer to cent while prices of Assam and Dooars planter from Darjeeling said. states to buy a large quan- Some retailers say “The cost of poultry understand if he is drinking Nepal or teas rose by 3 per cent and 1.5 per cent, The Darjeeling Tea Association (DTA) tity of goat meat. “Since goat supply from production has jumped * As on Dec 31, 1800 hrs IST, # Change Over 3 Months Conversion rate 1 USD = 71.4 & 1 Ounce = 31.1032316 grams Darjeeling tea as both are so alike in taste, respectively. has blamed the inferior quality this year they are lifting huge quan- Maharashtra has significantly due to a sharp Notes: aroma and flavour. Some deceitful sellers Although similar, most of the tea from for the dwindling prices. tities and their quest con- declined after the increase in feed prices. All 1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE pass on Nepal tea as Darjeeling variety,” an Nepal is uncertified with no pesticide and According to Kaushik Basu, secretary tinues, availability has killing of a large feeds — soybean, maize, and Coffee Karnataka robusta pertains to previous days price. number of animals 2) International metal are LME Spot prices and domestic metal are Mumbai official from a tea company with estates in residue declaration, while 70 per cent of the general at DTA, the quality of the produce become scarce for local oilmeal, bajra — have local spot prices except for Steel. Darjeeling said.Industry sources said as 87 estates in Darjeeling are certified organic. hasn’t been up to the mark this year owing consumers,” said a in the devastating become costlier by 15-20 3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket. much as 16 million kg (mkg) of Nepal tea Rough estimates pegged the loss to the to erring weather conditions and a disrup- dealer here. floods last year per cent in the past few 4) International Natural gas is Nymex near month future & domestic enters India every year. Of this, around 3- Darjeeling tea industry (including bulk and tion in the pruning cycle. A couple of retailers months. With less working natural gas is MCX near month futures. 5) International Wheat, White sugar & Coffee Robusta are LIFF E future 4 mkg are of the orthodox variety. retail sales) around ~120 crore every year “Apart from a demand-supply mis- say goat supply from Maharashtra has capital available from banks, small prices of near month contract. It is this tea variety that affects the pro- on account of the uncanny substitution of match, owing to availability of Nepal tea, declined after a large number of ani- poultry farms have turned uneconom- 6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM near month future and Palm oil is Malaysia FOB spot price. duce from Darjeeling. Particularly, the llam Nepalese Illam tea as Darjeeling tea. the demand from quality buyers has fallen mals died in the devastating floods ical and have closed,” says Ramesh 7) Domestic Wheat & Maize are NCDEX future prices of near month contract, variety of Nepalese tea is the closest sub- Industry officials estimated that the as well,” Basu said. last year. Khatri, president, Poultry Federation Palm oil & Rubber are NCDEX spot prices. 8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot stitute of Darjeeling tea in terms of looks, Darjeeling tea industry’s annual market Industry sources estimated that there Prices of chicken, fish and eggs of India. price. flavour and aroma. size, estimated to be around ~600 crore, has also been a 10-12 per cent drop in have also risen sharply. That of fish He says the cost of broiler chicken 9) International cotton is Cotton no.2-NYBOT near month future & domestic cotton is MCX Future prices near month futures. Even experts and tea connoisseurs find could have crossed ~700 crore had exports of Darjeeling tea this year. This has and organic chicken have risen by 15- production is now ~85-90 a kg, as Source: Bloomberg Compiled by BS Research Bureau it hard to differentiate between the two. Nepalese tea not played spoilsport. kept prices muted. 20 per cent, and of broiler chicken and against ~65-70 a few months before. MUMBAI | THURSDAY, 2 JANUARY 2020 BRAND WORLD 13 . < WagonR comes of age, revs up for the next-gen Space and staying power fire the pitch for Maruti Suzuki’s brand refresh for its 21-year-old car. Is this enough to keep it at the wheel another decade?

T E NARASIMHAN Chennai, 1 January REAR VIEW Over the years, the Wagon he first few years were a R has been refreshed 4 bumpy ride for this ‘tall times. In 2006, 2010, 2013, T boy’ on Indian roads, and 2019. In 2019, the car when it first launched in 1999. has got much bigger and But WagonR soon overcame with a lot more space the hurdles, pushing hard inside, gained a 1-litre with sustained television cam- paigns and by using familiar engine as also an faces as endorsers. All of this, automated manual plus design adaptations to transmission or an appeal to a wide set of buyers, auto gear shift soon catapulted the car into  the league of star brands from 1999 WagonR the Maruti Suzuki stable. Now launched with as WagonR turns 21, in the first tall boy design year of a new decade, the car  2004 reached that once found its niche 100,000 sales among young car buyers is milestone looking at ways to keep the  faith with a whole new batch 2006 launch of at the wheel. WagonR Duo LPG A brand refresh is under-  2010 launch of way. It kicked off with creating Srivastava says WagonR with the same time. And then a year second-generation more space, making the car its bold looks and spacious later, sales were cannibalised WagonR & CNG variant lighter on the road and new- interiors has continued to be by sibling brand Alto that went  2017 reaches look interiors and lights. A the most loved tall-boy car in on to become a runaway suc- campaign, currently playing the country. Ranojoy Mukerji, cess within a year of launch. 2 million-mile stone out on television and digital an automotive writer and ana- After an advertising blitz that  2019 Introduction platforms, is positioning lyst believes that Maruti highlighted WagonR’s spacious of new WagonR WagonR as a family car for played a trump card with the interiors and the strength and young households. WagonR when it introduced stamina of its engine, sales The new car, Shashank the brand in the Indian mar- began inching up. In 2017, Regular updates helped too. Srivastava, executive director, ket. The space it offered was a WagonR hit the 2-million cars The company measures it marketing and sales, Maruti key selling point. sold mark. Since then, four success by the fact that over Suzuki India (MSIL) says, has No wonder then that the lakh more buyers have jumped 25 per cent are repeat buyers. been positioned as a powerful same values are driving the on to the wagon. “All three generations of brand inside-out, with strong brand refresh. Is that wise The company had to work WagonR have received wide- looks and stronger character. though? Car buyers are not lin- hard to ensure that the tall-boy spread acceptance because it The efforts appear to have ing up for the familiar, and design found acceptance. A has kept pace with changing paid off, over a lakh units of while looks and space still mat- former employee who was times and is constantly being new WagonR were sold in less ter, they want their brands to involved with the WagonR upgraded,” says Srivastava. than a year since the new and serve a higher purpose. The launch and marketing says the “WagonR, with its new upgraded model hit the road. challenge would be to adapt to company stepped up its com- positioning has reached a sta- In comparison, after its launch the new demands without los- munication and engagement ble position for MSIL and in 1999, it had taken WagonR ing its core promise. activities to create the connect, going forward our endeavour five years to clock the It has done so in the past. experience and reliability with will be to target new customer same numbers. When WagonR launched, the the customers and to commu- segments, to further strength- By undertaking these boxy design set up a jarring nicate the benefits of this en the brand,” says Srivastava. measures, the brand is driv- tone in the fleet of sleek models uniqueness in shape and the To do that the brand may need ing down familiar roads. that were rolling out around overall value the car offered. to spin a new story too.

> ronment overall through iron- added. On the issue of exit tax agreement (ICA) framework FROM PAGE 1 ing out environmental and sus- introduced in 2016, which the under the June 7 circular? tainability issues. Trusts claimed is not applica- There are 34 accounts where an New projects ble on the ground that they sur- ICA has been signed. If we leave rendered the registration a year out Dewan Housing Finance surge in Dec qtr I-T vets... ago, it said, the Trust from the (DHFL), then in the January- The spokesperson said, “NRTT financial year 2014-15 onwards March quarter we are hoping Finance Minister Nirmala made an application for FCRA has been filing its income tax that we won’t see any surprises Sitharaman chalked out a ~102- registration in December 2015. returns on the basis that it has on the asset quality front. Of the trillion infrastructure invest- As part of the application surrendered its 12A registration. 34 accounts, 21 are already non- ment plan on Tuesday, with process, the Trust was supposed But the charitable character of performing assets (NPAs) and some of it already in progress. to detail the activities of the pre- the Trust has not changed. that constitutes a major chunk Infrastructure projects cur- vious three financial years, Therefore, the question of of the bad assets. SBI has an rently face multiple headwinds, 2012-13, 2013-14 and 2014-15.” applying 2016 tax provisions, exposure of ~57,000 crore in the according to the Report of the Tata Trusts further said that, whether on merits or from the 34 accounts and the entire Task Force on the National in any event, the 12A registra- standpoint of date of applica- banking system would have an Infrastructure Pipeline, released tion is a non-issue in so far as the bility, does not arise. exposure of around ~2 trillion. on the last day of the year. FCRA application is concerned. The NRTT in the FCRA “The major constraints The rules governing such an application had also given a Is the ICA working? faced are availability of funds application do not mandate a short synopsis of the various The framework is alright. What for financing large projects, requirement that a Trust should activities involving advance- we feel is it is difficult to resolve lengthy processes in land acqui- be registered under section 12A ment of the education in econ- a company within six-seven sition and payment of compen- of the I-T Act. In fact, the eligi- omy, sanitary science and arts months. So, for the ICA to func- sation, environmental con- bility criteria for grant of regis- or for the relief of human suf- tion properly, at least nine to 10 cerns, time and cost overruns tration under FCRA requires fering or for other works of pub- months should be given. But if due to delays in project imple- that an association should be lic utility. It said that Trust is to the resolution doesn’t happen mentation, procedural delays registered under any one of The help various institutions and within the prescribed time, then and lesser traffic growth than Societies Registration Act,1860, individuals without any dis- we cannot refer all the compa- expected increasing the riski- or The Maharashtra Public tinction of caste or creed any- nies to the National Company ness of the projects resulting in Trust Act,1950 (the Navajbai where in India. Law Tribunal (NCLT). Now, stalled or languishing projects Ratan Tata Trust is registered lenders are taking a conscious and shortfall in funds for main- here), or the Indian Trust Act, call on what will be the recover- tenance,” it said. 1882, or under Section 8 of the ‘We’ve seen ies if an account is referred to It has sought to address Companies Act, 2013. Therefore, healthy growth the NCLT. some of these issues through any implicit suggestion that the financial sector reforms such as Trust was making a false decla- in term loans’ Do you think the Insolvency promoting the development of ration to get FCRA status is and Bankruptcy Code (IBC) bond and credit markets, bet- grossly incorrect. In any case has been successful? ter monitoring mechanisms, NRTT does not have an FCRA What is your assessment of I am very satisfied with the IBC and creating an enabling envi- registration, the statement the inter-creditor after the Essar Steel judgment.

> BS SUDOKU # 2937 Foreign investors will also come back. ting cleared up. So, this will bring sta- We have seen foreign direct investment bility to the demand-supply problem. of more than ~42,000 crore in Essar Steel from ArcelorMittal, which is pos- Do you see any immediate concern itive for the economy and the banking from the telecom sector? sector, as there will be further invest- I wouldn’t say we are not concerned. ments in that company. RattanIndia We have a large exposure to that sector. too has seen foreign investors coming So, as long as the issues are not sorted in. We are seeing many resolutions out in the sector, there will be con- happening. In December itself, we saw cerns. four — Essar Steel, Ruchi Soya, Prayagraj Power, and RattanIndia. Most probably Jaypee Infratech will Pharma industry... be resolved by March. Then we Jayant Tagore, owner of Synthokem may have Bhushan Power and Steel, Laboratories and a member of the Alok Industries, and Reliance executive committee of the Bulk Drug Communications. Manufacturers’ Association of India, said, “This has been one of the long- Are concerns about the asset standing demands of the industry and quality of non-banking financial is much needed. The bulk drug indus- companies (NBFCs) stabilised? try is largely seen as polluting, and SOLUTION TO #2936 Easy: Yes, NBFCs have substantial exposure expansion of manufacturing units has  to the real estate sector. Realtors who been difficult,” he said. Solution were holding on to inventory are now Ankleshwar in Gujarat was trying to get rid of them. There have declared critically polluted in 2009 and tomorrow been price corrections across several there was a moratorium on setting up HOW TO PLAY geographies. The National Capital fresh units or expansion of existing Fill in the grid so Region has a lot of problem, but there ones till 2016. The Gujarat Pollution that every row, is not so much of a problem in Control Board has initiated strict action every column Bengaluru, Hyderabad, and Chennai. after the NGT declared the two indus- and every 3x3 So, it is true that there is huge inven- trial estates of Ankleshwar and Panoli box contains tory build-up, but this is not new. Now, in Bharuch critically polluted in 2019. the digits 1 to 9 the new launches have become less and some of the inventory is also get- More on www.business-standard.com 14 PERSONAL FINANCE MUMBAI | THURSDAY, 2 JANUARY 2020 > Choose the right financial advisor Ease of doing

You are spoilt for ten life financial plan, a CFP is may perhaps be better equipped due to business choice, but the rigour of qualification and certi- understand every fication. Online advisors/planners: These for NRIs aspect of the model are again investment platforms that before investing sell financial instruments and get a ever, if the landlord is an commission for the same. Take, for NRI, the tenant needs to reg- instance, .in, Happyness ister for TAN, deduct tax and Factory and .com, to name pay the TDS every month BINDISHA SARANG a few. Lalit Keshre, Co-founder and and file quarterly TDS CEO, Groww says, “We can provide returns. Since the rate of owadays, registered invest- scalable solutions at low prices. For TDS is unclear, so most ten- ment advisors (RIAs), instance, some services like mutual ants would just deduct financial planners, finan- fund investing are free of cost on 42.744 per cent (the maxi- Ncial advisors, wealth man- Groww.” Happyness Factory is a mum marginal tax rate in agers, and even money doctors are goal-based financial planning plat- India). Many NRI property pretty much tossed around and used form and free to use. According to FRANKLY owners simply declare interchangeably. But while each could its website, “The schemes are rec- SPEAKING themselves as a resident in claim giving you sound financial ommended to you, taking into the rental agreement. The advice, they would be using an entire- account the time frame and risk HARSH ROONGTA tenant also agrees because ly different model for doing so. And, potential of your investments.” Most he cannot find out officially what may work for your co-worker online advisory/planning platforms Recently, I received a call whether the landlord is an may not necessarily work for you. If provide commission disclosures. from a client, namely Nitin. NRI or not. you are looking to focus on your mon- Scripbox.com doesn’t charge any fee He is an Overseas Citizen of Similarly, when some- ey life in 2020 and wondering of all to the investors. According to their India based in the UK. The body purchases a property the options out there, read on. COST OF ADVICE transact through direct plans from website:” We earn a small fee from income tax department, in India (over Rs 50 lakh) MFs. However, for additional servic- the mutual fund companies for the through an email, had asked from a resident seller, the Sebi-RIAs: When it comes to money Type Type of fee Amount es, they may charge an additional fee, additional services we provide to our him to link his PAN number buyer must deduct 1 per cent management, there are basically two based on the type of service and dura- investors.” with before (of the gross amount) TDS models used by those providing the Registered investment advisors Fee-only 5,000-100,000 tion. nGood for investors seeking to invest December 31, 2019, or his and pay it to the department. service; fee-only and fee-based. RIAs Online RIAs Direct plans Zero nGood for investors who want help for broader financial goals like retire- PAN would be However, when follow the former. As per the fee-only Independent financial advisors* Commission based 0.02% to 1.70% in investing for financial goals like ment, but don’t want or can’t afford a made inopera- Buying or such a property model, RIAs charge a fee for the con- retirement, but don’t want or can’t complete life financial plan. tive. Despite my renting a is purchased sultation service. The amount of fee Online investment platforms* Commission based 0.02% to 1.70% afford a complete life financial plan. assurance that he property from an from an NRI, you need to pay depends on the serv- Footnotes: Usually in this range but commissions may vary from time to time Source: Websites As far as direct plan investing plat- would not be NRI faces more then apart from ice you avail. Some RIAs charge a flat Traditional advisors/planners: forms go, no one bothers to read their affected, as he difficult tax all the steps out- fee; some may even charge a percent- tance. Keep in mind when it comes ning, tax optimisation or portfolio These earn a commission from the privacy policy. Remember, there isn’t was anyway not processes like lined above for age of the assets under advice. The to investing in mutual funds, they rebalancing. Gaurav Rastogi, CEO products they sell to you. Some even a thing as a free lunch. Thirdly, even eligible for an setting up a TAN rent, the buye- range could be between ~5,000 and always offer the direct route. and Co-Founder, Kuvera.in says, “Our charge a flat fee, as well as the com- online advisors websites cannot cus- Aadhar card, he account, among must compute ~1 lakh a year, but some could also ask nGood for investors seeking spe- AI-led advisory engine learns from mission received. They pretty much tomise exactly when you need. It will was worried that others the actual capital for more. Mrin Agarwal, financial cialised services, and the situation is over 11 million transactions to create follow a distributor model and are reg- always be mass-customised advice. his PAN would be gains on the sale educator, money mentor and founder complex. You want to meet your effective nudges for our investor to istered with AMFI, have IRDA and all So, you might not even get a choice made inoperative, making it by asking the buyer details of Finsafe India, says, “Sebi, man- financial advisor in person. make the right decisions. Your advi- other certifications needed for selling of certain funds. difficult to operate his of his cost price and verify it dates a fiduciary responsibility on sory needs changes over time and our financial products. Many are agents, You are surely spoilt for choices, Indian bank accounts. and deduct long-term capi- Sebi-RIAs. This helps in making RIAs Online and app-based RIA: For platform handles that and provides sub- for financial product dis- but choose the model which you I mollified him that the tal gain tax with the highest accountable to their clients and work instance, Mobikwik, Kuvera and the right guidance at the right time. tributors. Some are certified financial think is most suitable for you. PAN number cannot be possible surcharge. Many only in their best interests.” There are Paytm Money, to name a few. Most of For first-time investors, we have sim- planners, too; many CFPs might Assess how much you are willing to made inoperative without buyers simply deduct 28.50 several services RIAs offer, right from the online and app-based RIA is in plified the KYC and investment charge extra for writing a complete pay and if you need a regular con- following a process men- per cent and leave it to the investments advice, tax planning, the form of investment platforms process – made it jargon-free and sim- financial plan. Keep in mind that nection with the planner or prefer tioned in Section 139AA (2). seller to claim the appropri- monitoring investments, rebalancing which offer direct plans for mutual ple. We nudge them to plan for spe- many CFPs also follow a fee-only a buy- and-forget approach. Most And an online search ate refund. as per need, and providing periodic funds at zero commission. Backed by cific goals and build a goal-driven model. importantly, understand every revealed that no such When asked about such reports on investment performance, technology, many of these platforms asset allocation.” nGood for investors seeking a finan- aspect of the model you choose process had yet been noti- ridiculous TDS require- among others. Many offer liability have goal-based, risked-based cus- Online RIAs do not charge a com- cial advisor at a lower cost than a before you start investing for a more fied. However, the provision ments, the tax department management and restructuring assis- tomised mass advice for goal plan- mission since they only help you fee-only advisor. If you need a writ- prosperous 2020. to make PAN inoperative points to the provisions was to be made effective allowing either the buyer or from December 31, 2019, the seller to obtain a certifi- itself (since extended to cate for lower deduction at BUDGET: March 31, 2020). source. This process has also ~50 LAKH -~1 CRORE There seems to be a fun- been made electronic, they Ways to get unclaimed bank deposits damental flaw in the way claim. But this makes it dif- some of the income tax pro- ficult for any NRI to sell REALTY Ideally, you have only three accounts. One for salary and claim settlement process. visions are administered property in India. that hurts non-resident There is no reason why CHECK two for investment and expenses If you don’t claim: If these Indians’ (NRI) real estate the TDS provisions are not are not claimed for ten years investments in India. Let’s bought within the ambit of Business Standard brings you a snapshot of average BINDISHA SARANG CRORES LYING IDLE or more, then this money take two examples. this self-certification and current rates and unit sizes in localities that offer would be transferred to the When an individual rents automatic payment (without property in the price range of ~50 lakh-~1 crore. Any guesses what do the Type of No of Amount Depositor Education and a property from an Indian the requirement to register If you are looking at buying real estate, an idea about numbers 47 million and banks accounts outstanding (~cr) Awareness Fund (DEAF) resident, there is no tax for TAN). The real estate can prevailing rates would come in handy ~14,307 crore stand for? They Public sector banks 4,24,13,775 12,075.71 according to an RBI deduction at source (TDS) get a leg up from NRIs, and are the number of accounts mandate. Shetty says, unless the rent exceeds Rs simplification of rules will Avg price (~/sq ft) Avg unit size (sq ft) with banks which have Private sector banks 51,29,927 1,851.56 “Nevertheless, account 50,000 a month. And if it promote some investment. BHOPAL unclaimed deposits. In other Foreign banks 3,76,213 376.97 holders can still claim the does so, the TDS of 5 per cent Hoshangabad Road 3,510 1,823 words, this is the amount money even after it has been of the annual rent is payable The writer is a Sebi-registered lying idle in Indian banks, and Small finance banks 29,193 2.43 transferred to DEAF. The as a single payment. How - investment advisor Kolar Road 2,584 2,382 they do not include regional Local area banks 9,030 0.53 total amount payable will Salaiya 3,571 1,804 rural banks, according to the include the unclaimed Reserve Bank of India’s data Total 4,79,58,138 14,307.19 amount plus the Ayodhya Bypass 2,948 1,872 Footnote: Data relate to deposit accounts in India, which have not been operated Misrod 3,000 1,984 released last week. Says Ranjit upon for 10 years or more; Current Account, Savings Account, Fixed Deposits, Other accumulated interest paid Dani, Nagpur-based Certified Deposits along with Interest credited and incidental chrages Source: RBI by that specific bank. The Bawadiya Kalan 3,891 1,852 Financial Planner (CFP), money would continue to TIPPING Airport Road 3,583 1,615 “There are a couple of reasons such accounts. Firstly, money: The Reserve Bank of earn interest.” For Fixed POINT Shahpura 2,930 1,900 for such dormant or money in an unused India has mandated banks Deposits (FDs), the maturity inoperative accounts. One is a account would earn four per to publish a list of inactive or proceeds of unclaimed FDs COIMBATORE change of job. With every new – lower than the consumer inoperative accounts for ten will earn the savings Plan for your children through MFs Trichy Road 5,025 1,483 job, you get a new bank price index of 5.54 per cent years or more on the bank’s account rate of interest A proper plan for children’s education is, perhaps, more Saravanampatty 4,052 1,626 account. The older one is not in November. If invested in website. Adhil Shetty, CEO starting from the date of important than a retirement plan for many families. Vadvalli 4,100 1,535 closed, but left unused, at Public Provident Fund Bankbazaar.com says, “The maturity. Keep in mind that Mutual fund houses cater to this need also. There are a times even forgotten for years account, the returns would first step is to check the the interest on savings bank Peelamedu 5,003 1,308 large number of mutual fund schemes that offer together. Second, when have been 8.65 per cent. inactive account details. If accounts is credited children’s plans. A snapshot of the top five performers. Ganapathy 4,704 1,448 people had passed away but Dani says, “Such you are the account irrespective of whether the Ramanathapuram 5,258 1,464 failed to inform family accounts can be an holder yourself, you bank account is operative or GN Mills 3,600 1,527 members of their accounts easy target for would need to dormant. TOP PERFORMERS (In %) when they were alive.” If you dishonest bank submit the Ideally, you should have Selvapuram (South) 4,100 1,351 haven’t done any transactions employees for unclaimed deposits not more than two accounts, Fund name YTD Expense INDORE in your account for more than siphoning and claim form along apart from the salary returns ratio 12 months, then it will embezzlement of with a valid identity account. These will be your Axis Children's Nipania 3,486 1,989 14.72 1.07 Bicholi Mardana 3,216 2,035 become an inactive account. funds. These can and address proof primary accounts. Dani says, Gift Direct Growth And if you don’t do any also be used for document. If you “As soon as salary hits your LIC MF Childrens Gift Snehlataganj 3,178 1,845 transactions from a bank money laundering YOUR are the legal heir, salary account transfer funds 13.86 1.39 Ring Road 3,575 2,020 account for 24 months, then it actives.” Lastly, MONEY you will need to into two other savings Fund Direct Plan Sanwer Road 3,290 1,898 will be classified as dormant. banks charge ~250- submit the death accounts, one for expenses ICICI Prudential As per RBI guidelines, there is ~750 a year to certificate along and the other which will Piplyahan 4,007 2,112 Child Care Fund 9.34 1.77 no difference between maintain inactive accounts. with the unclaimed deposits work as an investing (Gift Plan) Direct Plan Vijay Nagar 3,432 1,726 dormant accounts and Mostly they adjust it from claim form and iden tity and account.” Make all your HDFC Childrens Bicholi Hapsi 3,300 1,955 inoperative accounts. accrued interest. Plus, address proof. Note that you expenses from the former 8.07 1.27 LUCKNOW These dormant/ you might have to pay the will need to provide the and all investments from the Gift Fund Direct Plan inoperative accounts come penalty, in case you originals to the bank for latter. Dani says, “That way UTI CCF- Investment Plan Vrindavan Yojna 3,792 1,669 7.86 1.93 with their own set of issues; don’t keep a minimum scrutiny.” The bank will revi - you will be able to Direct Income Payout Gomti Nagar Extension 4,111 1,609 in fact, there is even certain balance. ew the claim, and once app - consolidate all your financial Gomti Nagar 7,391 1,005 kind of risks attached to How to get unclaimed roved; it will follow the usual data systematically. Source: Morning Star Faizabad Road 3,514 1,697 Sushant Golf City 4,231 1,621 Sitapur Road 4,151 1,568 Arjunganj 4,000 1,410 doing so, you will now become the owner of deposits and high-yielding bonds. From the I am 42 years old and single with a salary of Kanpur Road 3,511 1,747 READER’S the policy, and therefore will be entitled to interest of this money, you can start enjoying ~86,000 a month. I have a total debt of ~6.25 receive all the benefits from the policy as well the rewards of your earnings. The balance Rs lakh — ~1.5 lakh gold loan, ~75,000 credit SURAT CORNER as the maturity amount. 50 lakh should be invested in good quality card, and ~4 lakh borrowed from family. My Vesu 4,369 1,648 FINANCIAL PLANNING bluechip equity shares for generating addi- rent is ~30,000, my car EMI is ~20,000. I Palanpur 3,642 1,788 I am a retired senior citizen. I got ~1.5 crore tional wealth. want to start a business and need a business Pal Gam 3,340 2,414 from my port authority job and will start loan. My credit score is 871. getting a pension of ~75, 000 a month. My We are a live-in couple in the mid-30s. How You are rapidly running towards a financial cri- Mota Varachha 3,710 1,765 wife earns ~1 lakh a year. We have three sons, should we work out of everyday finances? sis. You have already borrowed way beyond you Althan 3,800 1,906 KARTIK all abroad and settled. Our household expen - We both earn around the same amount, i.e. can afford, you are intending to borrow even Sarthana 3,377 2,021 JHAVERI se is ~30,000. How do I invest this money? ~1.75 lakh a month. more and to do a business you may be sac - It is visibly apparent that you will not need to You earn the same amount of money every rificing a steady income from your salary. This Uttran 3,637 2,058 invest the money for any income generation. month, so it’s easy for you to divide your is not a good situation to be in. In my view, your Adajan 4,819 1,547 Even after your wife stops earning, you will everyday expenses equally. Spend every- primary objective should be to reduce your VADODARA still have more than adequate cash for your thing similarly; that should be your way for- debt, start repaying people, move into chea per Vasna Bhayli 3,135 2,236 I have an 18-year-old daughter. I am household expenses. Inflation is not a worry ward. How ever, your financial commit- accommodation, consider using uber & public divorced, and she stays with my spouse. I at the moment as your income is way above ments, such as loa ns and investments, transportation, eliminate the car EMI, spend a Note started investing in LIC’s child plan in my your monthly expense. As you move along, should be done independently. You may little lesser and build a little bit of business kitty ·The ticket price range considered for the above data points is between ~50 lakh and ~1 crore daughter’s name when she was 2. I paid the your incremental monthly surplus as well as nominate each other mutually if you like, by investing into recurring deposits and fixed ·All the data points discussed in the above table refer to primary last premium last year. The policy is due for wife’s monthly surplus may be invested into Please ensure that you make a Will so that in deposits. You will be able to focus and fully market only benefit in the upcoming year, but I don’t liquid/short term fund or fixed deposits. These case of any eventuality, one partner’s enjoy business when you have a little bit of a ·Above residential data set comprises of residential apartments only want to give her the money anymore. What additional investments will help you take care resources can help the other. Remember you backup of financial stability behind you. ·Above residential data is representative of organised real estate developers only can I do? of inflation after about ten years or so. cannot freely transfer or give money to each ·The top performing micromarkets based on sales during last year You can receive the proceeds in your name. Meanwhile, from the lump sum of Rs 1.5 crore other as gifts as you are not legally married. The writer is director, Transcend Consulting. The (November-2018 to October-2019) is represented on the above table You have to approach the insurer and execute that you have, invest about one crore into a If you do so, severe income tax repercussions views expressed are the expert’s own. Send your ·Data points are updated till October 2019 what is known as an absolute assignment. By combination of good quality company could follow. queries to [email protected] Source: PropEquity MUMBAI | THURSDAY, 2 JANUARY 2020 STRATEGY 15 . < Consumer behaviour in the 2020s Themes that will dominate Some tricky belongingness, fulfiled by being a part of ABHEEK SINGHI a family or a group. In the absence of familial groups, "tribes" are going to get MD & senior partner; predictions formed on shared experiences, likes and head, consumer & dislikes. Communities are going to retail practice become increasingly important and In collaborative systems, the role of the users may BCG Asia Pacific could be online or in real world— or most likely spanning both. switch between ‘’consumers’’ and ‘’producers’’ t may seem impossible to write an article on future consumer trends Blurring boundaries & co-creation I without using the words AI, big data, Imagine ordering a pizza (medium sized, digital. However, this article aims to do thin crust, onion and capsicum topping, that since consumer trends are not only extra cheese) from Domino’s or amakai driven by technology. At one level, handvo from Swati Snacks on Swiggy. Or human beings are essentially the same, getting a woollen made from globally. At another level, each individual Raymond (or Brioni) made to measure is different. Similarly, while basic con- service. Are these products or service or sumer needs do not change dramatically both? The consumer is executing such in a few years, the pace of change has activities in a truly hybrid environment, accelerated more than any time in the amidst multiple channels of purchase past. We explore a few themes that are and fulfilment; in a media environment likely to impact consumers and busi- that is also complex and convergent; nesses in the years ahead. how they use consumer data. through hyper-personalisation and In each of the situations above— the curation. This would require consumer is involved in creating the final Low trust & radical transparency Simplicity in times of complexity consumers to share their personal offer. It could be something as simple as Trust deficit is high. World over, The world creates a mind-boggling data— which could become a specifying the pizza to the last spec or consumers trust governments, amount of data with each passing day, challenge in times of trust deficit! discovering the latest design with the organisations and brands less than any hour and minute across various tailor at Raymond. When consumer other time in recorded history. A platforms. IBM estimates that 2.5 Loners & communities needs are unique in this hybrid research by Pew revealed that quintillion bytes of data are created If there is one thing that can be predicted environment, those who engage and Americans' trust in the government is every day. The number of TV channels with high degree of certainty, it is involve the consumer in co-creating the As some of the large technology lowest in 60 years. Another study in India has increased from 1 to 1,500 population. In the past three decades, final offer are likely to be winners. And for PRAKASH platforms come under increasing showed that only one third of the plus in the past 40 years. The number of the population has increased from 5.2 those who can involve the community in SANGAM scrutiny for workforce, practices in the consumers globally felt that they could brands and SKUs is in thousands and billion in 1990 to 7.5 billion by 2019 and the co-creation would win the jackpot. gig economy, taxation and regulatory trust the brands that they are buying. millions respectively. Spotify offers 50 expected to increase by another 500 The consumer trends of the future are CEO permits, not respecting user privacy, it The same study showed that brands million songs and Netflix 10,000 plus million in the next decade. At the same not going to be clean and linear. They are redBus is likely to lead to a movement for that earn consumer trust reap the movies. In short, a consumer has lots of time, the extent of nuclear families and going to be at times contradictory (loners self-organising and self-regulating benefits disproportionately. This trend of choice. singles has continued to increase. India and community, complexity and sharing platforms. trust deficit andgreater rewards to At the same time, multiple now has close to 70 per cent of simplicity); they are going to be few decades ago, Samuel Now that we have established the brands that are purposeful and authentic research suggest that no consumer households as nuclear families while interlinked with each other (personali- Goldwyn had said “Only a fool principles of sharing economy and shall continue. Radical transparency really wants 300 million SKUs or half of American adults are unmarried sation and data sharing, low trust). A would make predictions, access economy, let’s move on from could be one way to convince the 1,000 plus brands. She wants, what I and about 15 per cent live alone. At the Organisations that appreciate the non- especially about the future”. I am very Bitcoins to more mundane matters consumers and build that trust. A call, “narrow spectrum” choice. The same time, several studies suggest that linearity and interconnectedness will much in sync with this classic such as our daily commute. Our cities concept first articulated by Ray Dalio of twin trends of greater complexity loneliness is on the rise (though start at an advantage. Those who can Goldwynism and would stay away in India are amongst the most traffic Bridgewater, it has been embraced by the (supply driven) and desire for technically speaking living alone and break the compromise with the right use from grand pronouncements. congested in the world. The answer likes of Patagonia and Fitbit — in one simplicity (consumer driven) are being lonely are correlated but distinct of technology, data and most importantly, Nevertheless, I am curious enough to to this vexed issue is “shared case to share what and how they source going to co-exist and increase. The social conditions) human empathy and intelligence stand a think and make observations about mobility”. All public transportation is their raw material and in another to share two ways to break this compromise is One of the basic human needs is better chance to survive and thrive. certain trends and postulate how they shared mobility. However, the num- are likely to pan out over the next few ber of buses in our cities are woe-fully years. Embarking even on this limited inadequate. Most cities have chosen exercise is tricky when it comes to a to go with capital-intensive metros fast evolving space such as the which leave us with the problem of “sharing economy”. unconnected areas and last-mile Demystifying the next frontier Over the last few years, sharing commute. economy has been a much used and However, ride hailing albeit through Modern platforms will interface, particularly for a country like abused term. For starters, it is technology, is not ride sharing as the India with 22 scheduled languages. important to unpeel what it truly is and pooling concept has not quite taken off. have to address the This implies having a mix of translation what it isn’t. Sharing economy is the And with the gradual withdrawal of and transliteration to offer a local mutual value derived by two or more subsidy, as commuters are now vernacular, voice and language interface in a manner that is parties from an underutilised skill or exposed to the full cost of access much more colloquial. For instance, a asset that is shared using technology as including the car, fuel and driver, the credit barriers Bharat consumer would be more the means of exchange. In its truest danger is that it would lead to negative comfortable searching for “formal form, it is characterised by promoting network effects. Demand would come shoes” in its transliterated version in a consumption of down owing to higher prices Devnagri script instead of a pure underutilised assets and and as supply starts seeing JEYANDRAN translation of “aupchaarik joote”. through building community The two fewer rides and lower companies VENUGOPAL Concerted efforts should be put on to connections. In such subsidies, they are likely to make it available in other major collaborative consumption that truly pull off from the platform Chief product & languages such as Tamil, Telugu, systems, the role of the users put the term leading to deterioration in technology officer Gujarati etc., to truly make e-commerce could be either that of sharing quality of service. Flipkart acceptable. ‘’consumers’’ or ‘’producers’’ economy on In Bengaluru, for a regular While local-language interface and of the resource and the roles the map are day at non-peak time, eepika lives in a nondescript social commerce are considered the could also shift from one to Uber and average fare per km to be paid village in Chaibasa district of pillars of bringing the Bharat the other. Most of us are Airbnb by a commuter for a non-AC DJharkhand and runs a small consumers online, they will require a familiar and likely users of bus is ~2.50, for an AC bus, it is grocery store. Educated till Class 8 in a nudge and hand-holding in their content platforms such as YouTube ~6, for auto rickshaws,~13, popular app school where the medium of instruction purchase journey. Here, assisted and Instagram where we can be both for ride hailing is ~17. It is evident that was the local language and in a district buying bots will play a pivotal producers as well as consumers of there is a big need gap for affordable marked by low internet infrastructure that expects more personalisation, consumers to try e-commerce through role in helping them navigate through content. Another example of and convenient commute options at a and literacy, she is among the several hand-holding throughout their e- the three phases of consumers’ scores of products and help identify collaborative consumption that we are price point that is in-between public million citizens that new-age commerce journey and most lifecycle — inspire, nudge and hand- the one which best their needs all familiar with are the peer-to-peer or transport and auto rickshaws. There is companies are aiming to bring online. importantly, want services in their holding. Inspiration is a key propeller and desires. This becomes essential to customer-to-customer classifieds a very good opportunity of providing a However, it’s easier said than done. local language. They will also expect towards attracting citizens towards emulate the offline retail experience platforms starting with Craigslist, ebay viable alternative through classic That’s because Deepika is among the voice-based services to trying out something new. where a salesperson helps the and lately, OLX. collaborative consumption model by next 200 million citizens who will be overcome the challenge of Assisted Here, social commerce plays a consumer make a purchase. This, But the two companies that truly way of car and bike pooling where a very different from those who’ve inputting the product buying bots pivotal role as it inspires and complemented by AI-backed voice put the term sharing economy on the person could be both a ride taker and a formed the e-commerce user base so far. information incorrectly and will be more offers a social validation to interface brings in inspiration, map are Uber and Airbnb. Both Uber in ride giver. While the first set of e-commerce rightly so. Today, almost 30 crucial than one’s selection, thereby convenience and offers a more transportation and Airbnb in The other alternative is to inhabitants were mostly from the top per cent of all searches in ever in aiding the purchase process. immersive e-commerce experience. accommodation began as classic dramatically reduce the cost of access metros with access to formal education India are already voice-based, helping This, coupled with video- Such AI-backed systems will also sharing-economy models. Uber for on-demand rides. This can happen and affinity to smart devices, the Bharat and this is expected to consumers based offerings for help in the discovery of new products, allowed people to offer their unutilised by moving to two-wheelers and consumers come from smaller cities increase rapidly. Voice navigate cataloguing, seller connect which otherwise will be difficult for this cars in their free time as cabs to ferry removing the cost of the driver or by and are likely to be less affluent with commerce also helps build through etc., will be essential to make cohort to find. From advising on buying others while Airbnb enabled users to promoting ride sharing on fixed poor access to formal credit. This user confidence within consumers products Bharat consumers learn more complementary products to predicting offer their spare rooms to “guests”. shuttle routes. Many scooter rental base also faces structural roadblocks in as they won’t have to worry about the products and get future purchases based on purchase While Airbnb advertising has start-ups are experimenting with the form of evolving internet about making spelling inspired. Such offerings will history will assist the Bharat consumers emphasised “people, places and different models to arrive at the right infrastructure coupled with anxiety to mistakes and avoid awkward social also enable them to experience in demystifying e-commerce. However, community”; Uber, whose business trade-off between price, convenience shop on e-commerce platforms. situations. Hence, internet platforms products first and keep them engaged it’s important to offer such abilities objective was to become a reliable daily and unit economics. This has the However, this cohort (smaller cities) will have to innovate to address the even if they are not ready to make a across platforms with the same speed alternative to taxis, squarely potential to solve the last mile will contribute nearly 70 per cent of vernacular, voice and credit barriers. transaction. and agility and hence, the technology positioned itself on pricing, reliability commute in a big way, there-by incremental users by 2022, according This demystification of e- Another crucial component of needs to be lite. and convenience. This has over time promoting the use of public transport. to various industry reports, with commerce through the above making e-commerce universally led to these models veering more women and youth being a key segment initiatives is essential to get Bharat acceptable is having a local language More on www.business-standard.com towards the “access economy”. More on www.business-standard.com A role reversal on the cards? With customised content and smart technologies, TV might reclaim some ground it conceded to smartphones

technology, which first started with the language barrier that stops customers in the US showed that a large number of PC, then web, then mobile and now AI. AI from using the voice command option to the audience prefers to watch their AVNEET SINGH will play a very vital role in your smart TVs search their content. favourite content on smart TVs and people MARWAH as it will enable the TV to become the hub In a recent survey, it showed that 30 in the United States have started watching of your home. You will be able to connect per cent of Indians do not want to write to content for more than four hours on TVs Director & CEO all your devices via AI. Through search their content but through AI and and less than two hours on smart phones. I Super Plastronics smartphones, you will be able to connect the voice command, they will feel when the technology really Pvt Ltd your laptops, speakers, home security, etc now be able to enjoy their All OTT play- matures in a few years, India will and all your other smart devices and with favourite content. In 2020 we ers are now also try to adapt the same kind ack in 2016, we felt it was the most AI, you will be able to watch all your expect Hindi and a few more developing of behaviour. I also feel that in important year for us as it was the favourite movies. And why just movies? other local languages to be also content to 2020, the viewing hour of Byear when smart TVs started You will get all the latest news, current included to help people further. provide content on TV will increase and gaining the market share. But now, the temperature and with the integration of With the help of AI, your smart better it may also surpass smart year 2020 will become one of the most Google maps, you will know how much TV will be able to tell you the experience phone. Till 2018, most of the important years as the smart TV time it will take to reach a destination etc. latest related content that you on larger content that was available was, ecosystem is getting matured with It is a revolutionising technology that will would want to consume, which screens only for smaller screens, but experience is always better compared to offers 5000 games and application and in various new technologies that will disrupt enable the world to be available at your will help save a lot of time. In a with smart TVs first and then the small screen. 2020 there will be more than 7000 the market and we will see many brands fingertips or rather at the tip of your smart TV, people normally scroll with the integration of android As android TVs have the maximum applications and games for televisions trying to establish themselves in India tongue. There are 11 new languages being down to 20 to 25 per cent content with TVs, the experience of content on a larger market share in India in terms of certified that android will provide. with the right kind of content for introduced in Google assistant for the whatever average content they can get but screen has improved. TVs, it is estimated that they will have 1.1 Another technology that we are enhanced customer experience. people who are not user friendly in typing with this, you will be able to see that the All the OTT players are now billion subscribers by 2024. So, you can looking forward to is the Cloud The biggest disruptor will be AI or the command to watch their favourite smart TV is running against time and developing content for larger screens and imagine the kind of integration that is technology. Artificial Intelligence. After every few content in smart TVs. This will also be you’ll be able to utilise your time better. for all the content, they are putting required to switch a consumer from smart years, there is a big transition of very helpful to them as this removes the Another survey conducted by Nielsen designs for the large screen since user to Google TV stores. Currently, Google More on www.business-standard.com 16 MUMBAI | THURSDAY, 2 JANUARY 2020 1 > Chandrayaan-3 next year, TRAFFIC JAMS, PROTESTS AND FIREWORKS MARK NEW YEAR 4 chosen for Gaganyaan PEERZADA ABRAR Space Flight Centre in The mission involves build- Bengaluru, 1 January Bengaluru to help make the ing expertise in areas such as country’s maiden manned space medicine, astronaut he year 2020 is going to space mission a success. health monitoring, life sup- be very crucial for the Gaganyaan, an Indian crewed port, radiation protection, T Indian Space Research orbital spacecraft is intended to space debris protection and Organisation (Isro) for two be the foundation of the Indian personal hygiene systems. The of its most important missions Human Spaceflight Programme. mission would help to conduct — Gaganyaan, the Indian In its maiden crewed mis- several experiments for appli- human spaceflight pro- sion, it will send three astro- cations related to areas such as gramme, and Chandrayaan-3, nauts to orbit the Earth at an microgravity, bioscience and the third lunar mission. altitude of 400 km, for up to sev- space operations. The agency Isro Chairman K Sivan on en days. Gaganyaan is a has sought an allocation of Wednesday said the organisa- ~10,000-crore project and the ~14,000 crore from the Centre tion has identified four astro- Isro Chairman K Sivan said the space agency has kept a target to in the budget for 2020-21. nauts who would be part of the four astronauts have cleared conduct the mission by 2022. Gaganyaan mission and their fitness tests at IAM and in It will, however, conduct two Chandrayaan-3 training would start from the Russia. They will start training unmanned missions before Isro is aiming another attempt third week of this month. The this month PHOTO: PTI that. This includes sending a for a soft landing on the moon astronauts were selected based humanoid robot resembling a with Chandrayaan-3 by 2021, but on the results of the medical “They are all from the human to display the ability to without an orbiter. Sivan said examinations including fitness Indian Air Force. Now the send humans into space and Chandrayaan-3 mission to the tests conducted at the Institute training of astronauts will bringing them back safely. “We moon, comprising a lander and a of Aerospace Medicine (IAM) begin in the third week of are sending humanoid to simu- rover, has been approved by the A huge crowd gathered at India Gate in New Delhi on Wednesday to celebrate the beginning of the New Year. The visitors were a premier institute of the January in Russia,” said Sivan. late the (impact) on humans,” government and activities for its joined by those protesting against the Citizenship (Amendment) Act, leading to massive traffic jams. On New Year’s Eve, Indian Air Force and in Russia. Isro has set up a Human said Sivan. realisation are in progress. dazzling fireworks were witnessed across the country, with millions holding celebrations throughout the night PHOTO: DALIP KUMAR India has a chief of defence staff: Here’s what Bipin Rawat can do AJAI SHUKLA Is the CDS the commander of all relating to the three Services, remains responsible for all capital Is the appointment of a CDS We will do what suits us best,” said New Delhi, 1 January three services — Army, Navy, and including promotions, postings, procurements from the defence likely to achieve the creation of Rawat. Air Force? and foreign assignments. This will budget. It is likely that, while the battle-ready, tri-service military On New Year’s Day, the Army got Yes, at a purely ceremonial level. In translate into enormous clout. CDS will be nominally senior to the commands, from the current 17 In 2001-02, a Group of Ministers its 28th chief, General Manoj rank and salary, Rawat will remain defence secretary, the latter will single-service commands? recommended that a CDS be Mukund Naravane, and the mili- the equal of the Army, Navy, and Air Who will be senior, the CDS or the remain more influential. The government has formally given appointed to serve as a single- tary its first Chief of Defence Staff Force chiefs, with the government defence secretary? the CDS the task of ‘restructuring of point military advisor to the (CDS), General Bipin Rawat. having notified the CDS in “the rank In rank, precedence, and salary, Is the appointment of a CDS a military commands for optimal util- government. Has that been Congratulating Rawat, who he of a four-star General with salary and Rawat — like the three Service masterstroke that will achieve isation of resources by bringing achieved? described as “an outstanding offi- perquisites equivalent to a Service chiefs — will be senior to the defence modernisation? about jointness in operations, Not really. The CDS notification cer who has served India with chief.” However, he will also be the defence secretary, since Service As CDS, Rawat can improve tri-serv- including through establishment of states he “will act as the principal great zeal”, Prime Minister ex officio permanent chairman, chiefs are the seniority equivalent ice coordination and economise by joint/theatre commands’. military advisor to Raksha Mantri Narendra Modi tweeted: “This Chiefs of Staff Committee (PC- of the Cabinet secretary. eliminating duplication of military This would greatly improve the on all tri-services matters. The three institution (CDS) carries tremen- COSC) — a body that includes all Traditionally, the defence secre- resources and facilities. He can also operational posture of the three chiefs will continue to advise Raksha dous responsibility of mod- three Service chiefs. tary, who heads the Department of improve the military’s operational Services and create a culture of inte- Mantri on matters exclusively con- ernising our military forces.” As its permanent chairman, Defence, enjoys greater importance readiness by prioritising procure- grated tri-service operations. cerning their respective services”. Modi also acknowledged that Rawat will be the first among these than the MoD’s other four secre- ment of more urgently needed However, there is deep institutional This compromise serves a dual pur- the Ministry of Defence (MoD), as it equals, like an elder in a gentle- taries — who head the Department equipment. However, while obtain- resistance to creating theatre com- pose. It reduces resistance within earlier existed, was short of mili- men’s club. However, the govern- of Defence Procurement, Defence ing more bang for the buck, he can mands, especially from the Air the three Services to creating a CDS, tary domain expertise. He tweet- ment has specifically stated: “CDS Research and Development, Ex-ser- do little about the primary obstacle Force. Asked on Wednesday by preserving the three chiefs’ access ed: “Creation of the Department of will not exercise any military com- vicemen Welfare, and Defence to modernisation — which is a whether he would be able to change to the Raksha Mantri. At the same Military Affairs (DMA) with requi- mand, including over the three Finance. In the allocation of busi- defence budget that is under 16 per entrenched mindsets, Rawat was time, it reduces the government’s site military expertise and institu- Service chiefs.” ness rules, the defence secretary is cent of the central government’s cautious. “That is something we will reliance on a single-point advisor. Chief of Defence Staff Gen Bipin Rawat tionalisation of the post of CDS… Rawat’s second and more con- responsible for the ‘defence of India’. expenditure. This is inadequate for have to study. We will work with the The Army, Navy, and Air Force chiefs inspected the Guard of Honour at South will help our country face the ever- sequential role, from where he will Though the defence secretary equipping the military with suffi- three Services and I am sure we will would be able to provide the Raksha Block in New Delhi on Wednesday. He said changing challenges of modern draw substantive power over the has shed many of his responsibili- ciently modern weaponry. Nor is come out with a mechanism that Mantri with greater domain knowl- the armed forces stay away from politics, warfare.” Services, will be as head of a new ties to the DMA, he retains respon- the defence allocation likely to rise will suit the Indian system. We don’t edge about their respective Services, and work in line with the directives of the Several questions remain, how- DMA in the MoD. In this capacity, sibility for the defence of India and in absolute terms, given the current have to copy systems (of tri-service allowing the CDS to focus on tri-serv- government PHOTO: PTI ever, over Rawat’s role and functions. he will oversee substantive matters for making defence policy. He also 4.5 per cent economic growth rate. integration) from other countries. ice coordination. 800,000 pay tribute 2 soldiers ONGC gets cracking at Panna-Mukta field martyred at Koregaon Bhima PRESS TRUST OF INDIA owned Shipping Corporation, over by Shell in 2016. along LoC New Delhi, 1 January resulting in saving of about The 25-year production $5,000 per day, they said sharing contracts for the PMT war memorial Two soldiers lost their lives State-owned Oil and Natural adding the saving totals to fields expire this week and as army personnel battled Gas Corp (ONGC) has begun ~1 crore-plus. Reliance and Shell had decid- PRESS TRUST OF INDIA one person was killed and sev- heavily armed terrorists, foil- an exercise to shed excess cost Sources in the know said ed not to seek an extension Pune, 1 January eral others were injured. ing an infiltration bid by the at the Mumbai offshore oil and the company will lay a small for Panna-Mukta fields, Pune superintendent of ultras on New Year’s day gas fields of Panna-Mukta, undersea pipeline soon to resulting in them being Two years after caste clashes police Sandip Patil said local along the Line of Control whose control it regained after completely do away with the reverted to ONGC on marred the Koregaon Bhima residents cooperated with offi- (LoC) in Rajouri district of two and half decades and has requirement of hiring ships for December 21, 2019. battle commemoration event cials to ensure that the event Jammu and Kashmir. The already saved ~1 crore in the transporting oil to land. Reliance and Shell-owned in Pune district of passes off peacefully. infiltrators were intercepted shipping cost. ONGC had originally dis- BG Exploration and Maharashtra, at least 800,000 Smarter by the previous in Khari Thrayat forest in the ONGC has changed the covered the Panna-Mukta and Production India ) held 30 per people on Wednesday visited experience, police had made wee hours when they were contract for bringing oil pro- Tapti (PMT) oil and gas fields cent stake each in PMT. the “Jaystambh” (victory pil- elaborate security arrange- trying to sneak into India duced from the fields lying in in the Arabian Sea off the The Tapti fields had ceased nominee) in 2016. a reappraisal of the reserves. lar) in Perne village on the ments in the area. from Pakistan-occupied the Arabian Sea to land, result- Mumbai coast in the early production earlier in 2016 and Sources said ONGC sees an The fields produce about occasion of the 202nd anniver- "Apart from a large num- Kashmir (PoK), a defence ing in saving of about $5,000 1990s. These were, however, the Tapti process platform upside in oil and gas production 10,000 barrels of oil per day sary of the historic battle in a ber of police personnel, com- spokesman said. per day, sources with direct taken away from the company facilities were handed over to from the Panna-Mukta field and 4 million standard cubic peaceful manner amidst heavy panies of State Reserve Police “In the intervening night knowledge of the development and in 1994 awarded to a con- ONGC (Government of India which it will firm up after doing meters per day of natural gas. security. Force (SRPF), teams of Bomb of December 31 and January said. sortium of US energy No untoward incident was Detection and Disposal Squad 1, a contact was established It is expecting an upside in giant Enron and reported throughout the day (BDDS) were deployed in the with infiltrators in a forest in production too after a re- . at the event which passed off area," a police official said, Naushera Sector. The heavily appraisal. ONGC as a govern- peacefully, officials said. adding that drone cameras armed terrorists retaliated Sources in the know said ment nominee was As a precautionary meas- were also used to monitor and in the ensuing exchange the previous operators, Shell given 40 per cent back- ure, internet services in and crowd. of fire two soldiers of the India and Reliance, had in rights. around Koregaon Bhima As part of preparations, Indian Army were critically engaged a floating storage and Enron during its remained suspended for the ample space was provided for injured and later suc- transportation vessel from bankruptcy was taken day. Services were resumed in installing stalls where various cumbed,” Army’s Public Mercator Ltd for shipping oil. over by BG Group of the evening. souvenirs and other items were Relations Officer said here in Soon after taking over the UK in 2003. BG “The entire programme of sold, he said. a statement on Wednesday. field last month, ONGC Group’s interest was commemoration took place as Talking to reporters after PTI changed the shipper to state- subsequently taken per our plans. We wanted this visiting the victory pillar, Ajit entire event to be free of any Pawar said he offered tributes dispute or incident, and it hap- on behalf of the people of pened as per the plans,” Pune Maharashtra. district collector Naval Kishore "This pillar has history and Ram said. every year lakhs of people Police officials put the come here. Some untoward number of people who have incidents took place two years visited the victory pillar at ago, but the government is tak- 800,000. ing utmost care and elaborate Elaborate security was also police bandobast has been maintained at historic Vadhu made here to ensure that no Budruk village, located near untoward incident takes Perne. place," he said. The district administration Pawar urged people visit- and police officials held a ing the site to maintain peace. string of meetings with vil- "I appeal to people to come lagers in the area over last one here and offer their tributes, month to put in place the con- but also maintain peace and fidence-building measures to do not believe in rumours," the ensure peaceful commemora- senior NCP leader said. tion of the 202nd anniversary As per the Dalit narrative, of the January 1, 1818 battle. around 500 soldiers from the In early morning, dalit Mahar caste, who were Maharashtra Deputy Chief part of the British Army, Minister Ajit Pawar, Vanchit defeated forces of Peshwas Bahujan Aghadi (VBA) presi- (who were Brahmins), in the dent Prakash Ambedkar, 1818 battle. Union minister Ramdas Every year, lakhs of people, Athawale and several other especially Dalits and those leaders visited the 'Jay from Ambedkarite movement, Stambh'. Violent clashes had visit the Jaystambh on January broken out in the area around 1 to pay their respects. Koregaon Bhima on the 200th Pawar said Maharashtra anniversary of the historic bat- has a tradition of maintaining tle on January 1, 2018, in which peace and harmony.