THURSDAY, 16 JANUARY 2020 28 pages in 2 sections www.business-standard.com MUMBAI (CITY) ~9.00 VOLUME XXIV NUMBER 110

THE MARKETS ON WEDNESDAY Chg# Sensex 41,872.7 79.9 Nifty 12,343.3 19.0 ECONOMY & PUBLIC AFFAIRS P5 ECONOMY & PUBLIC AFFAIRS P5 Nifty futures* 12,378.0 34.8 Dollar ~70.8 ~70.9** Euro ~79.0 ~78.9** INDIA PRISONER OF PAST IMAGE, SCRAPPING 370 DISRUPTED PLANS OF Brent crude ($/bbl)## 64.4## 64.9** Gold (10 gm)### ~39,654.0 ~179.0 MUST GET OVER IT: JAISHANKAR ‘WESTERN NEIGHBOUR’: ARMY CHIEF *(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 US, CHINA RESET TRADE AMRAPALI-JPMORGAN CASE RELATIONSHIP WITH Bezos bets on ‘Indian century’, PHASE 1 AGREEMENT ED investigates The US and China announced an initial trade deal on Wednesday that will roll ‘ultimate back some tariffs and boost Chinese gives MSMEs $1-billion push purchases of US goods and services, defusing an 18-month conflict between beneficiaries’ the two economies. The centerpiece of Commits to exporting Amazon boss the deal is a pledge by China to purchase $10 bn India-made SHRIMI CHOUDHARY at least an additional $200 billion worth charms sellers New Delhi, 15 January of US farm products and other goods and goods by 2025 services over two years. 13 > as Murthy cuts The Enforcement Directorate (ED) is probing the “ulti- NEHA ALAWADHI & mate beneficiaries” of the Amrapali group’s homebuyers’ SUBHAYAN CHAKRABORTY speech to 5 min money, allegedly diverted abroad through shell firms in BACK PAGE P24 New Delhi, 15 January collusion with investment banking firm JPMorgan India, Now, switch on/off your SUBHAYAN CHAKRABORTY & NEHA ALAWADHI according to an official at the federal agency. mazon.com Inc Founder New Delhi, 15 January Even though the ED is evaluating the Indian assets of card for online payment and Chief Executive JPMorgan India to The RBI on Wednesday told banks that any Officer Jeff Bezos said on After weeks of riot control duty in one make provisional fresh card issued should be only for physical A Wednesday that his com- of the coldest winters, Shalander attachment as directed use within India, such as in ATMs and PoS pany would invest an additional Kumar was at peace on Wednesday by the Supreme Court, devices. Internet and other facilities can be $1 billion (about ~7,000 crore) to help morning. The Delhi Police constable it has also found viola- activated only when the customer specifi- bring small businesses online in patiently guided a large gathering at tions of provisions in cally requests for the same. Customers will India, and also committed to using the Jawaharlal Nehru Stadium (JNS), relation to anti-money also have the option to cap the amount in the retail giant’s “size, scope and but not for a concert or a sporting laundering laws. any kind of transaction, for both physical scale” to export $10 billion of made- event. “The richest man in the world This follows an and internet use, the central bank said. in-India goods by 2025. is coming today,” Kumar said, explain- investigation into viola- Bezos’ India visit — for the ing the extraordinarily long queues. tion of forex rules maiden edition of his firm’s micro, Amazon CEO Jeff Bezos, at involving foreign direct COMPANIES P2 small and medium enterprises Amazon CEO Jeff Bezos with Amit Agarwal, senior VP & country head, $117-billion net worth, didn’t disap- investment of ~85 crore Huawei likely to conduct (MSME)-focussed event, Amazon Amazon India, during the Amazon Smbhav event at the Jawahar Lal Nehru point the crowd. “The goal is to ensure and ~140 crore by Smbhav — comes at a time when stadium in New Delhi PHOTO:DALIP KUMAR more people can participate in the JPMorgan and 5G trials for Airtel, Voda the Competition Commission of prosperity of India. This jacket that Amrapali group firms Chinese telecommunications equipment India (CCI) is probing his company, IN NUMBERS I’m wearing was given to me by one of (Amrapali Zodiac maker Huawei is expected to conduct 5G as well as Walmart-owned Flipkart, the SMBs (small and medium busi- Developers, Amrapali ED’S FINDINGS trials for Bharti Airtel and Vodafone Idea, on complaints of deep discounting 550,000 100 nesses) that I visited outside,” Bezos Silicon City), respec- | Amrapali group's assured sources said, as the central government practices and tie-ups with Sellers on Amazon marketplace Digital haats it said amidst much cheer. The Nehru tively, between 2010 returns to JPMorgan under finalises trial runs before the spectrum preferred sellers. in India plans to set up, or maybe the Modi jacket that he wore and 2012. During the foreign direct investment auctions. It is learnt that the two telecom Seeking to reach out to critics, added to the charged atmosphere. FEMA proceedings, 19 expanding the 800,000 (FDI) were unauthorised in operators have also chosen ZTE, Nokia and Bezos, donning traditional Indian The enchanted gathering didn’t care persons/entities were nature Ericsson for conducting the 5G trials. attire, said his company was 1.8 mn existing Artisans, weavers that Bezos arrived fashionably late. examined. The total for- committed to being a long-term Amazon Pay neighbourhood/ enabled through But keynote speaker Infosys co- eign exchange transac- | ECB borrowing made in the kirana shop Amazon Kaarigar ECONOMY & PUBLIC AFFAIRS P23 partner of India. merchants founder NR Narayana Murthy, who tion in these entities is guise of FDI “Actions speak louder than programme programme has business relations with Amazon, pegged at ~1,100 crore, | Shares of Amrapali Zodiac New Parliament, PM words,” he added, addressing a was clearly upset with the event start- according to the ED wrongly transferred by packed house here. BIYANI-BEZOS MEETING SLATED FOR TOMORROW P3 ing late. “We are delayed by an hour investigation report. JPMorgan to two Indian house before 2024 “We’re making this announce- and a half. I was supposed to speak for The ED report If you are troubled by traffic restrictions ment now because it’s I predict that the 21st century is working in self-improvement and 20 minutes, but I will finish it in five revealed that Amrapali developers around 7, Lok Kalyan Marg — the Prime working...When something works, going to be the Indian century. The growth. This country has something minutes because I’m not used to Group and its directors | Unauthorised place of Minister’s residence — when the PM you should double down on it. dynamism, the energy… everywhere special, democracy,” he said. delays,” Murthy said from the podium created a web of shell business in India by the moves out for his daily visit to South I want to make a prediction for you. I go here, I meet people who are Turn to Page 21 > without mincing words. Turn to Page 21 > companies and foreign investor group Block, you may get some respite soon. dummy directors in company without RBI Vacating the decades-old official collusion with the approval residence that has been the home of foreign investor nine prime ministers, the PM may move (JPMorgan) and had | Developer diverted to a new home by 2024. BlackRock’s clean-up diverted ~140 crore of homebuyers' money Jet gets two suitors, homebuyers’ money. through dummy BACK PAGE P24 The funds were routed companies, obtained may hit Indian firms to shell companies investment from JPMorgan Corporate affairs ministry Hindujas back out using sham transaction JYOTI MUKUL & SHREYA JAI EXPOSURE TO by re-purchasing the proposes Unitech takeover Deadline for EoI submission ends New Delhi, 15 January shares at a steep price. The Ministry of Corporate Affairs on INDIAN COAL & Explaining the transactions, the ED report said equi- Wednesday submitted a proposal to the ANEESH PHADNIS & SUBRATA PANDA Shares of Jet were locked in the The world’s largest asset manager ty shares of Amrapali Zodiac Developers were allotted to Supreme Court for taking over the Mumbai, 15 January 5-per cent upper circuit for a twelveth BlackRock’s announcement that it COAL-BASED promoters of the company at a premium of ~180 per management of the troubled real estate straight day, at ~50.25 on the BSE, on will pull out its investments in com- FIRMS share in September 2010 and to the foreign investor — company Unitech, in a move that could South America- Wednesday. The stock panies that get 25 per cent of their (Holding in $million ) JPMorgan India Property Mauritius Company II, at the bring relief to homebuyers. Two senior based Synergy Group was trading at its high- revenues from thermal coal produc- premium of ~1,070 per share within a gap of just 10 days. government officials confirmed the and Delhi-based est level since July 18, tion, besides making no future direct NTPC This was done without any change in the business mod- development, saying a note has been Prudent ARC have 2019. With Wednesday’s investment in such firms, could 50 el of the company or any significant or sudden gains dur- given through the Attorney General, based submitted expres- gain, the stock price of shrink the bouquet of investors for ing the period, it noted. Later, the promoters of developers on the suggestions of the apex court. sions of interest Jet has jumped three- players like NTPC, the Adani group Adani Transmission re-purchased the share of the foreign bank at an exorbi- (EoIs) for the revival fold, up 233 per cent in and Coal India (CIL). 26 tantly high premium of ~2,280, ~2,560 and ~3,000 per share. of Jet Airways. The less than three months, “We are in the process of remov- The face value of the share was ~10 per piece in 2009 deadline for the sub- from its record low ing from our discretionary active AdanI Ports & SEZ when Amrapali Zodiac was incorporated with ON mission of EoIs end- level of ~15.10 hit on investment portfolios the public 19 authorised share capital of 10,000 shares worth ~100,000. ed on Wednesday. ON THE UPSWING October 22, 2019. securities (both debt and equity) of Turn to Page 21 > THURSDAY Sources said the JetAirways BSE price in ~ Synergy Group, one companies that generate more than Coal India SPECIAL Hinduja Group had of the suitors, has said 25 per cent of their revenues from 2 explored investing in slots at London’s thermal coal production, which we Source: BlackRock annual report and PERSONAL FINANCE: Video the beleaguered air- Heathrow airport are aim to accomplish by the middle of audited financial statements (Aug 2019) KYC will make life simpler 22 > line, but backed out critical to the airline’s 2020,” BlackRock’s 19-member EXPORTS CONTRACT FOR While it will be consent-based, banks will later because it operations and will Global Executive Committee said in need to put in strict security to protect data, found no value. A decide on participating a letter to clients. 5TH MONTH IN DEC writes BINDISHA SARANG Dubai-based fund, in the resolution only if As part of evaluating sectors too, had evinced it gets clarity. The group with high environment, social Exports contracted for a fifth straight interest in investing has also set other riders and governance (ESG) risk, the month in December, as processed in the grounded air- to revive the airline. It asset manager with a $7 trillion Larry petroleum exports saw lower receipts TO OUR READERS line, but did not sub- wants to form a new investment portfolio said it would Fink, and a broad-based decline Source: BSE The four-page pull-out on mit an offer. company with its assets, “closely scrutinise other business- chairman continued to plague all major foreign TEXPPROCIL, being carried as a This is the second employees, and operat- es that are heavily reliant on ther- and CEO, exchange earning sectors, according to separate section, is equivalent to a time that the lenders to Jet called for ing permit but minus all liabilities. As of mal coal as an input, in order to BlackRock data released on Wednesday by the paid-for advertisement. No Business EoIs. The first round of bidding did not now, Synergy Group has not found an understand whether they are commerce and industry ministry. The decline in exports Standard journalist was involved in result in any resolution plan for the Indian partner who will take majority effectively transition- stood at 1.8 per cent in December, higher than the 0.3 producing it. Readers are advised to revival of the airline. The lenders gave control of the airline. Central govern- ing away from this per cent fall in November. Outbound trade contracted treat it as an advertisement. ample time to prospective suitors by ment norms cap foreign investment in reliance”. for the sixth month out of the first nine months of extending the deadline time and again. the airline at 49 per cent. Turn to Page 21 > Turn to Page 21 > financial year 2019-20 (FY20). 4 > Bharti Airtel’s mega issuance buoys outlook for fundraising Investment bankers expect QIP issuances to jump significantly this year shares in a company. Normally, it is difficult ISSUANCES to pick such large quantity from the SAMIE MODAK intend to close their share sales before the end Global risk appetite has been favourable secondary market without moving the price,” PICK UP 14,400 Mumbai, 15 January of the fiscal year. Encouraging performance of this year with most world markets, including he said during a recent media interaction to Large QIP 12,500 recent QIPs and momentum in the stock the US and India, logging new record highs. discuss fundraising outlook. transactions in the Telecom major Bharti Airtel’s $2-billion market are giving issuers and bankers the More importantly, the economic environment Fresh fundraising is also seen as a good sign

past one year 8,500 fundraising has boosted the prospects for confidence to launch mega deals, say industry is seen supportive for equities for the rest of from the broader economic point of view. 3,173

2,400 the new year, particularly through the players. On the other hand, several large the year. Unlike last year, the rally in the “Buoyant primary markets are generally (In ~crore) qualified institutional placement (QIP) investors — both domestic as well as market hasn’t been restricted to precursors of strong underlying economic route. Underpinned by a broad rally in the global — are showing appetite to large-caps. So far this year, the NSE growth as they help channelise household Source: Prime Bharti Axis Bajaj DLF Shree secondary market, corporate India will invest large sums in companies with AIRTEL MOPS Midcap and NSE Smallcap indices savings. Much like 2019, appetite for high- Database Airtel Bank Finance Cement raise a significantly higher amount than it good track record, they add. UP $2 BN AT have gained 4.3 per cent and 6.8 per quality companies targeting QIPs will did last year through fundraising “This year will definitely be a good ISSUE PRICE OF cent, respectively. In comparison, generate strong interest this year as well. instruments such as QIPs and block deals, year for capital raising. Already, we the benchmark Nifty has gained Last year marked the re-emergence of QIP according to market experts. have seen an uptick in the past few ~445/SHARE just 1.4 per cent. with investors giving a thumbs-up to high- In the last calendar year, around ~35,000 months. We believe QIP could be the V Jayasankar, head of equity quality large issuances from companies crore was raised – more than double what was preferred mode of fundraising for PAGE 2 capital markets, Kotak Investment such as Axis Bank, Bajaj Finance, Shree mopped up in 2018 — by about a dozen corporate houses, given its quick turnaround Banking, forecasts that equity fund Cement and PVR,” says a note by Edelweiss companies to fund their business time. In large-caps and select mid-caps, there mobilisation, including QIPs, IPOs and block titled ‘a zestful year on the anvil’. requirements. will be good demand. As the rally gets more deals, would be 30 per cent higher in 2020 Market players say access to equity This year, Bharti has already closed its broad-based, we will see further improvement compared to last year. “For institutional capital will give companies the confidence ~14,400-crore QIP, while others including in appetite for new papers,” said Sudhir Bassi, investors QIPs and block deals present an to chalk expansion plans to benefit from an Avenue Supermarts and some financial firms executive director at Khaitan & Co. opportunity to acquire a large quantity of upturn in the economy. 2 COMPANIES MUMBAI | THURSDAY, 16 JANUARY 2020 > Wipro > Chambal Ferilisers & Chemicals > Bandhan Bank > Prestige Estates Projects > Hero MotoCorp STOCKS Q4 revenue guidance Ministry discussing Q3 profit missed estimates Top gainer among Nifty Top gainer among the IN THE NEWS lower-than-expected revamping fertiliser as it made additional Realty index stocks S&P BSE Sensex stocks at 0.0% to 2.0% subsidy system provisions of ~200 crore

~248.15 CLOSE ~172.95 CLOSE ~492.15 CLOSE ~359.25 CLOSE ~2,475.30 CLOSE * OVER PREVIOUS CLOSE 3.50% DOWN* 9.25% UP* 5.16% DOWN* 5.74% UP* 2.76% UP* > . IN BRIEF Sops to woo Apple, Samsung suppliers on table Fresh round of layoffs at Oyo, 150 staff likely to be impacted The proposals floated by MeitY include offering of interest subsidy on local borrowing by manufacturers BLOOMBERG ing not to be identified citing Apple handsets, is ramping up 15 January rules on speaking to the media. NORTHWARD BOUND manufacturing of iPhones in It also includes setting up of India’s electronic exports have been India. It already has two facto- The government is considering industrial zones equipped with touching a new high every year (in $ billion) ries in the southern Indian states a plan to offer subsidised loans taxation and customs clearance, of Andhra Pradesh and Tamil 8.8 to mobile handset man- along with infra- 6.2 6.4 Nadu, where it makes devices ufacturers in a bid to structure such as 5.9 5.9 for Xiaomi and Nokia. Adding attract Apple and Sam- roads, power and more production in India would sung Electronics’s sup- water supply, the offi- help Apple and Foxconn diver- pliers to open factories cial said. sify from China amid ongoing in the nation, said a gov- India plans to trade tensions with the US. ernment official. make $190 billion The proposals have been for- The proposals by the worth of mobile ‘14-15 ‘15-16 ‘16-17 ‘17-18 ‘18-9 warded to the finance ministry Oyo is likely to ask more employees to leave in the coming weeks, as the Ministry of Electronics phones by 2025 from but no decision has been taken, hotel and hospitality aggregator looks to streamline its operations and and Information Technology $24 billion now, the official the official said. With the man- focus on profitability. Employees between 100 and 150 are likely to be includes offering interest sub- said. Two calls made to the under pressure to bring down a facturing in Asia’s third-largest foundering as poor road and ufacturing of high-end mobile affected in this round of job cuts. The bulk of this fresh round of layoffs will sidy on local borrowing by man- spokesman of the ministry jobless rate that’s the highest in economy to a quarter of the port facilities deter investors. handsets for Apple and be from its cloud kitchen business, which has about 200-300 employees ufacturers, may form part of the remained unanswered. 45 years, wants to attract over- nation’s gross domestic prod- There has been some suc- Samsung, India plans to shift its in India. Last year, Oyo had dabbled cloud kitchens, or cooking only to federal budget to be unveiled on Prime Minister Narendra seas component makers and uct. Modi’s flagship “Make in cess. Foxconn Technology export focus to Europe and the fulfil orders placed through food ordering portals like Swiggy and Zomato. February 1, the official said, ask- Modi’s government, which is help boost the share of manu- India” programme has been Group, the largest assembler of US, the official said. It launched four cloud kitchen brands — Adraq, O Biriyani, Paratha Pandit and Master of Momos. “The company had started these kitchen on an experimental business, and as the focus shifts to showing profitability under pressure from investors, about 50 per cent of the people from the cloud business will be asked to leave,” said a person aware of the issue, Administrator who did not wish to be named. Of the four, the Biriyani business is the one the hospitality firm will most likely keep, given they receive higher of DHFL meets orders, this person said. In the beginning of this week, Oyo was learnt to Airtel mops up $2 billion at be letting go of about 1,000 people in India as it looks to streamline its lenders today operations across job roles and locations in India. NEHA ALAWADHI to take stock KKR to infuse Startek appoints issue price of ~445 per share of their claims $150 mn into Aparup Sengupta HAMSINI KARTHIK Indian NBFC arm global CEO Issue price is at a discount of 1.57% to the stated floor price of ~452.09 per equity share Mumbai, 15 January Amid liquidity squeeze faced by Former Aegis Chairman Aparup MEGHA MANCHANDA TRACKING SHARES $1 billion in debt. The Reserve Bank of India- non-bank lenders, global buy- Sengupta has been appointed New Delhi, 15 January Airtel announced the closure of this appointed administrator is out major KKR on Wednesday executive chairman and global Bharti Airtel Price in ~ issue period for the QIP and fixed the set to meet lenders to Dewan said it will infuse $150 million CEO of Startek, an NYSE-listed harti Airtel on Wednesday issue price at “~445 per equity share, Housing Finance Corpora- into its Indian non-banking business process outsourcing announced allotment of 323.5 which is at a discount of 1.57 per cent to tion (DHFL) on Thursday to financing company. The capital company. He replaces Lance B million equity shares to eligible the floor price of ~452.09 per equity take stock of claims made by commitment will enhance the Rosenzweig, who is stepping institutional buyers at an issue price share”. them. The administrator, R KKR India Financial Services’ down from his role to pursue of ~445 per share as part of its $ 2-billion The equity shares are being allot- Subramaniakumar, had set ability to provide loans to local other opportunities. With over (around ~14,000 crore) qualified insti- ted to eligible qualified institutional a deadline of December 17, companies by bolstering the 20 years of executive experience tutional placement (QIP) that closed buyers, the company said in a regula- 2019 for creditors to submit financial position, an official in the BPO and telecommunic- on Tuesday. tory filing. The special committee of their claims. Lenders com- statement said. The NBFC sector ations industry, Sengupta has The issue price was at a discount of directors for the fundraising exercise prising banks, bondholders, has been in troubles for over a served as Startek’s chairman of 1.57 per cent to the stated floor price of also cleared the terms of foreign cur- including retail bondhold- year now, starting with the the board of directors since the ~452.09 per equity share. rency convertible bonds (FCCBs), ers, and employees are said collapse of infra-focused IL&FS, business combination with Airtel announced the closure of including the issue price. to have submitted claims triggering a liquidity crisis. PTI< Aegis in 2018. BS REPORTER< this issue period for the qualified insti- “FCCBs due in 2025, convertible totalling ~87,905 crore. tutional placement (QIP) and fixed the into fully paid-up equity shares of face The meeting will also dis- issue price at “~445 per equity share, FUNDRAISING EXERCISES value of ~5 each of the company at a cuss the resolution plan and which is at a discount of 1.57 per cent price of ~534 per conversion to equity evaluate the possibility of to the floor price of ~452.09 per equi- Announced Offer Offer size Offer type share to the initial purchasers subject restarting lending opera- L&T Infotech posts ty share”. date price ~ cr to receipt of funds, satisfaction of oth- tions. A few bankers said The firm is raising funds to make Jul 4, ‘01 45 834 IPO, Primary Share Offering er conditions precedent and settle- while some of their claims payments towards its adjusted gross Feb 1, ‘05 216 1,355 ADDL, Secondary Share Offering, Accelerated Bookbuild ment as per applicable laws and pro- may be approved in the revenue (AGR) liability. cedures and relevant agreements,” the meeting, the dissent among marginal rise in net The net proceeds of the funds raised Mar14, ‘05 218 2,442 ADDL, Secondary Share Offering, Block filing said. lenders to ratify the resolu- will primarily be used to augment the Jul 19, ‘07 920 184 ADDL, Secondary Share Offering, Block Axis Capital, Citigroup Global tion plan too is rising. company’s long-term resources and Markets India, and JP Morgan India “After IndusInd Bank Nov7, ‘17 480 9,594 ADDL, Secondary Share Offering, Accelerated profit at ~377 crore strengthen balance sheet, servicing Bookbuild, REG S, Rule 144A acted as global coordinators and classifying its exposure to and/or repayment of short-term and Feb 28, ‘19 220 25,000 RIGHTS, SpotSecondary bookrunning lead managers, and, DHFL as fraud and provid- DEBASIS MOHAPATRA IN NUMBERS long-term debts, capital expenditures, Goldman Sachs (India) Securities, BNP ing for it accordingly, more Bengaluru, 15 January statutory dues, long-term working cap- Jan 15, ‘20 445 - ADDL, Primary Share Offering, QIP, REG S, Rule 144A Paribas, DSP Merrill Lynch, HDFC lenders could do so,” said a L&T Infotech Q3FY20 ital requirements, and general corpo- Note:The company is yet to disclose January 15’s offer size; source: Bloomberg,compiled by BS Research Bureau Bank and HSBC Securities and Capital senior bank executive under Mid-tier information technolo- financials rate purposes as permitted under appli- Markets (India) were the bookrunning conditions of anonymity. gy (IT) services firm Larsen & Revenue (~ cr) 2,811 cable laws, the company said. lines Airtel’s growth oriented financial statutory dues, as a result of a Supreme lead managers for the QIP issue and IndusInd Bank had lent ~240 Toubro (L&T) Infotech posted YoY growth (in %) 13.7 “Despite a volatile market environ- performance and future growth poten- Court ruling in October on AGR liabil- Goldman Sachs (Asia) L.L.C., Barclays crore to DHFL by way of non- double-digit growth in revenue ment and challenging global macro- tial of our business and the sector,” ities of telecom companies. Bank PLC. convertible debentures. on the back of ramping up large QoQ growth (in %) 9.4 economic conditions, the offering wit- Harjeet Kohli, group director, Bharti Earlier this month, the firm’s The FCCB offering re-opened the Even as the final forensic deals. However, net profit rose Net profit (~ cr) 376.7 nessed a strong response from global Enterprises, said. Bharti Airtel has to shareholders approved proposals to Indian market after a 3-year absence of report from KPMG is pend- marginally in the third quarter YoY growth (in %) 0.3 and domestic investors. This under- pay about ~35,586 crore in additional raise $2 billion in equity and another such issuances, the company said. ing, IndusInd Bank is said to (Q3) of the current financial have made this provision on year. The IT firm posted a net QoQ growth (in %) 4.6 prudential basis. profit of ~376.7 crore during the Operating 16.2 The DHFL spokesperson, quarter, which was a marginal margin (in %) however, clarified that one rise over the same period last YoY growth -290bps Birla group firms to raise $3.1 billion bank’s move may not have a year, when the company (in basis points) bearing on other banks. reported ~375.5 crore. QoQ growth 70bps DEV CHATTERJEE Novelis, which is on the ON THE RISE billion from overseas investors Under the proposed reso- Revenues of the firm rose (In basis points) Mumbai, 15 January verge of acquiring another US- 23.6 by selling bonds and shares. lution plan put forward by 13.7 per cent year-on-year based company, Aleris Corp Dollar-bond issuances jumped more Bankers said in spite of a former DHFL management, (YoY) to ~2,811 crore during the Birla group firms Novelis — a for $3 billion, will be getting than fivefold in 2019 ($ billion) slowing economy, foreign banks would restart lending October-December period. based, cutting across verticals subsidiary of Hindalco — and at least 200 basis points lower investors are evidently still to DHFL and extend the Sequentially, growth was 9.4 and service offerings,” said SKI Carbon Black Mauritius rates than the previous loan 13.1 bullish about India — looking tenure of loans upwards of per cent. In dollar terms, rev- Sanjay Jalona, chief executive are tapping international mar- — saving a sizeable finance 8.2 8.9 at the response to the debt and eight years. “Once there are enue stood at $394.4 million, officer and managing director, kets to raise $3.6 billion debt. cost for the company, bankers 6.6 5.0 share sale issues by well-rated charges of fraud, banks which was 14.2 per cent high- L&T Infotech. While Novelis raised $1.6 said. Bankers said if, by any 1.5 companies. “However, whe- would be hesitant to provide er YoY, and 8.3 per cent The IT firm said it contin- billion at a lower rate than the chance, the Aleris acquisition ther this enthusiasm extends additional loans to a borrow- sequentially on constant cur- ued to witness momentum in previous loan, SKI Carbon agreement by Novelis is ter- 2013 2014 2015 2016 2017 2018 2019 into the near future will er,” said a top executive of a rency basis. During the quar- the large deals space and won Black has hired 16 banks to minated, for a period of 12 Source: Bloomberg depend on both domestic and public sector bank. ter, operating margin of the two such engagements in Q3, raise $1.5 billion by selling months from the date of global volatility as well as gov- As part of the resolution L&T Group company impro- with a cumulative net new bonds. issuance, Novelis may redeem the Chinese government have If the company misses the ernment reforms in the com- plan, DHFL also needs to ved 70 basis points to 16.2 per total contract value of more SKI Carbon Black is owned up to $400 million of bonds at cleared the deal. The transaction deadline of ing Budget,” said a banker. In find an investor bringing cent, owing to favourable than $75 million. by the promoters and in June the issue price. European approval is subject January 21, the closing date 2019 calendar year, Indian fresh capital. While a few cross-currency movement. “The new deals in our kitty last year invested in Vodafone The acquisition of Aleris is to the sale of Aleris’ plant at under the merger deal may be companies raised $23.6 billion investors were interested “Our revenue growth was will be ramped up in the com- Idea rights issue. The company currently awaiting clearance Duffel in Belgium, which pro- extended, bankers said. as dollar bonds, a fivefold rise earlier, bankers say that may largely attributed to ramping ing quarters. It will supple- plans to use the funds for refi- from the United States gov- duces aluminium for the The Birla group fundrais- over 2018 (see chart). not be the case if support up of large engagements. Our ment our revenue growth,” nancing and general corporate ernment even as the automotive and specialties ing comes within days of from lenders does not come performance was broad- said Jalona. purposes, bankers said. European Commission and markets. Bharti Airtel raises close to $3 With inputs from Bloomberg through as proposed. Huawei likely to conduct trial runs of 5G waves for Airtel, Vodafone

MEGHA MANCHANDA & PTI tions that its electronic and telecom which rivals western equipment mak- rtment of Telecom (DoT) is progressing New Delhi, 15 January devices helped China to spy on US cor- ers such as Ericsson and is facing curbs with the 5G trials to ensure the imple- porations and agencies. The firm has in the US. mentation of National Digital Commu- Chinese telecommunications equip- been barred in Australia and Japan, Huawei India CEO Jay Chen had nications Policy.” ment maker Huawei is expected to con- but welcomed in Russia, Turkey and earlier stated the company firmly beli- duct 5G trials for Bharti Airtel and Voda- Saudi Arabia. eves that only technology innovations Improving data speed fone Idea, sources said, as the central The central government had even and high-quality networks will be the The Union government has begun the government finalises the trial runs constituted a committee headed by its key to rejuvenating the Indian telecom process of auctioning 5G spectrum with before the spectrum auctions. principal scientific advisor to decide on industry. the aim of improving data speed and Sources said both Airtel and Huawei’s participation in the 5G trials. “We have our full confidence in the bringing in Internet of Things (IoT), Vodafone have also joined ZTE, Nokia The trials would establish use cases in [Prime Minister Narendra] Modi govern- which will further enable robotic surger- and Ericsson, apart from Huawei, for the country as a precursor to the full- ment to drive 5G in India. We have our ies, driverless cars, among other things. conducting the 5G trials. Reliance Jio fledged launch of 5G services. full confidence in Indian government On December 20, the Digital will rope in South Korean equipment However, last month, Telecom Mini- and industry to partner with best tech- Communications Commission (DCC) — maker Samsung. ster Ravi Shankar Prasad had said the nology for India’s own long-term benefit the apex decision-making body — at the State-owned BSNL is also likely to go government will allocate airwaves to all and also for cross-industry develop- telecom department approved the auc- with ZTE. The firms have submitted telecom service providers for conduct- ment,” Chen had recently said. tions across 22 circles. applications for 5G trials, industry ing trials of super-fast 5G network, and When contacted, Rajan Mathews, A lion’s share of 6050 MHz has been sources said. will not bar any equipment suppliers in director general of industry body set aside for 5G spectrum, trials for Airtel and Vodafone have also joined ZTE, Nokia and Ericsson, apart from Huawei, The Chinese firm had had come the trials. The stance had spelt relief for Cellular Operators’ Association of India which are widely-expected to begin for conducting the 5G trials. Jio will rope in South Korean equipment maker Samsung under a cloud after there were allega- Chinese telecom gear maker Huawei, (COAI), said, “We are pleased that Depa- between January and March. MUMBAI | THURSDAY, 16 JANUARY 2020 COMPANIES 3 . < Biyani-Bezos meet slated Moped sales CCI to probe Asian Paints skid 25% in for tomorrow amid protests April-Dec Amazon has an T E NARASIMHAN for stopping JSW’s entry Chennai, 15 January indirect stake of Sales of mopeds saw the JSW had moved competition watchdog alleging Asian Paints 3.5 per cent in largest fall in the general threatened various dealers from dealing with the company decline of segment sales dur- Future Retail ing the April to December ARINDAM MAJUMDER 2019 period, the first nine New Delhi, 15 January VIVEAT SUSAN PINTO months of this financial year. NUMBER Mumbai, 15 January While India sales of scoot- he Competition Com- OF ers and motorcycles dropped mission of India (CCI) DEALERS Future Group Chief Executive 16.2 and 15 per cent, respec- T has ordered a probe Officer (CEO) Kishore Biyani tively, in the period, those of against Asian Paints for 60,000 and Amazon founder Jeff Bez- mopeds fell by 25.1 per cent. In allegedly using its domination Asian Paints os will have a one-on-one the financial year’s second of the market to hinder the meeting in Mumbai on Friday quarter (July-September), the entry of JSW Paints. 28,000 amid protests from traders decline was 30 per cent. The latter company had against e-tailers. While Biyani Firms of Kishore Biyani (left) and Jeff Bezos already operate TVS Motor, the country's alleged Asian Paints warned Berger Paints will be the keynote speaker at their own e-wallets and may look at synergies in the area third-largest maker of two- dealers in Karnataka, Telang- Amazon’s SMBhav event on wheelers, is the sole manu- ana and Tamil Nadu from any 18,000 Thursday, the Friday meet is to strengthen their operations, scrutiny. facturer of mopeds. The com- dealing with JSW. The office of Kansai Nerolac expected to be important as as rivals such as PhonePe, Traders had requested Biy- pany recently said sales the director-general at CCI will the two chalk out future part- Google Pay and Paytm get ani to boycott the SMBhav eve- would recover. investigate. “The Commission 10,000 nership plans, top sources said. aggressive in India. nt, currently on in Delhi. Biy- According to industry is of the view that evidence pro- Akzo Nobel On the cards is a tie-up in According to sources, ani’s keynote address will data, moped sales dropped vided by JSW Paints is prima online payments, something Bezos may not make an an- begin at 10 AM on Thursday, to 495,805 units during April Source: Industry facie sufficient to indicate that the two companies have been nouncement in terms of incre- where he is expected to enu- to December, from 661,923 Asian Paints denied (it) access contemplating as part of the asing stake in Future Retail as merate the benefits of online- units in the same period a to the distribution channels in JSW has said it aims at a extend full cooperation to CCI new players in this segment for second phase of their partner- foreign direct investment offline partnerships. year ago. From the usual four the relevant market by threat- paints turnover of ~600 crore regarding the matter.” 10 years. ship. In the first phase, Ama- rules do not permit more than In a recent interaction with per cent of all two-wheeler ening and coercing such deal- this financial year and of about JSW Paints says Asian A strong dealer network is zon becomes the online sales 10 per cent in an Indian entity Business Standard, Biyani had sales, it was close to 3.6 per ers through various means,” ~2,000 crore annually in two Paints threatened dealers with the backbone of the paints partner for Future Retail, as a single firm by a foreign said online and offline retail cent (total two-wheeler sales goes the CCI order. to three years. stoppage of supplies and an end business. “For new entrants, Future Consumer and Future portfolio investor (FPI). could co-exist and work in the period were 13,914,974 JSW is the first local player Supplying to JSW Steel to discretionary discounts, building a dealer network Lifestyle Fashion, respective- Amazon has an indirect stake together since bricks-and-mor- units). in years to enter the ~50,000- alone is expected to give it among others. These restraints would be a challenge. Dealers ly. Big Bazaar, on the other of 3.5 per cent in Future Retail, tar stores had limited space in Earlier talking to analysts, crore overall paints market. around half the latter target. appear to be in the nature of could be reluctant to hold their hand, is the delivery partner which it picked up via its terms of stocking inventory K N Radhakrishnan, CEO, Part of the Sajjan Jindal-led “The order is self-explama- exclusive supply agreements stock, as product offtake could for Amazon Prime customers. acquisition of 49 per cent stake versus an e-commerce plat- TVS Motor, said weak senti- group, it had announced its tory,” said a JSW spokesper- and refusal to deal, it alleged. Its be limited, despite higher mar- Both firms already operate in promoter entity Future form whose ability to provide a ment in the rural market was foray into this market last year son. An Asian Paints spokes- complaint also snotes Asian gins,” observes Abneesh Roy, their own digital wallets, Coupons for ~1,500 crore. range of products was greater. one of the main reasons, since with a portfolio of 1,808 person said: “We will take Paints has the highest market senior vice-president at bro- including Amazon Pay and The acquisition was made “The corner shop will not there was always a worry shades, all priced at ~477 a litre. appropriate legal recourse and share and there have been no kerage Edelweiss. Future Pay, respectively, and by Amazon.com NV Invest- vanish because convenience about a delayed monsoon. may look at synergies in the ment Holdings LLC, a regis- and contingency buying will Also, a cost increase due to a area, persons in the know said. tered FPI, and approval for the always be there,” he said, sudden rise of 12 per cent in On Wednesday, the US same by the Competition adding predatory pricing and insurance premium. “And, retailer infused ~1,751 crore into Commission of India was exclusive online launches were there is huge discounting Sterlite Technologies its digital payments arm as well granted at the end of challenges faced by offline from many of our motorcy- BS-VI switch will as Amazon Wholesale in a bid November after an intense retailers. cle players,” he said. impact 2-wheeler Q3 net at ~91 crore Sterlite Technologies on Wed- pending as of June 30, 2019, it Alembic gets USFDA nesday reported a net profit of said. Based on the provisions of ~91 crore (excluding exception SVLDRS, the management has nod for Tizanidine sales until Diwali, items) during December 2019 determined the duty payable quarter. in respect of all matters offered hydrochloride The company had regis- for settlement under the capsules says Honda CEO tered a net profit of ~146 crore scheme and accordingly, made in October-December quarter a an additional provision ~50.71 Drug firm Alembic Pharmaceuticals year ago, Sterlite Technologies crore in the current quarter, it on Wednesday said it has received Limited (STL) said in a regula- added. The company is await- final nod from the US health tory filing. Its consolidated rev- ing acceptance of the applica- regulator for Tizanidine enue stood at ~1,203 crore dur- tion by the department as of hydrochloride capsules, used to ing December quarter as date, it added. treat spasticity. "The company has against ~1,335 crore in the cor- “We delivered a revenue of received final approval from the US responding quarter of 2018-19. ~1,203 crore and a net profit of Food & Drug Administration The company’s exceptional ~91 crore after adjusting provi- (USFDA) for its Abbreviated New items stood at ~51 crore in the sion of exceptional item and Drug Application (ANDA) Tizanidine third quarter of 2019-20. correspondingly tax gain. We Hydrochloride Capsules, 2 mg, 4 During the quarter, the are confident of higher profits mg, and 6 mg," the drug firm said company made an application starting from Q4 this year on in a regulatory filing. Tizanidine under Sabka Vishwas (Legacy the back of new orders and hydrochloride is a central alpha-2- Dispute Resolution) Scheme, expansion in new geogra- adrenergic agonist indicated for 2019 (SVLDRS) for settlement phies,” the company said. the management of spasticity. of disputed excise matter of The market environment Because of the short duration of Minoru Kato (third from the left), president & CEO Honda ~188 crore demanded by CES- in 2019 witnessed uncertainty therapeutic effect, treatment with Motorcycle & Scooter India, at the launch of BS-VI Activa TAT in 2005-06, which the and sluggish growth on acco- tizanidine hydrochloride capsules 6G in Mumbai on Wednesday PHOTO: KAMLESH D PEDNEKAR company was contesting in unt of the economic downturn, should be reserved for those daily Supreme Court, and also some STL Group CEO Anand activities and times when relief of SHALLY SETH MOHILE other litigations which were Agarwal said. PTI spasticity is most important. PTI Mumbai, 15 January Tata Altroz gets five-star adult Honda Motorcycle and Scoo- ter India (HMSI) does not ex- safety rating in pect a pick-up in sales of two- wheelers before Diwali. On Global NCAP test Wednesday, it launched the latest generation, 6G, of its Tata Motors on Wednesday said flagship scooter brand, the its upcoming premium hatch- Activa. Delivery will com- back Altroz has received the mence next month. highest 5-star adult safety With ex-showroom prices rating by Global NCAP, an inter- starting ~63,912, it is 12-13 per nationally renowned safety cent costlier than the current accreditation body. Altroz has model. With a 110cc, single become the second passenger cylinder engine, it comes vehicle brand after Nexon to with a fuel injection system, get the 5-star adult safety the technology that has led to rating from the Global NCAP. higher product prices under Nexon had received the BS-VI emission norms. distinction in December 2018. HMSI is the country’s sec- The company said the Altroz ond-largest maker of two-wh- has also achieved a 3-star eelers and scooters are about rating for child occupant two-third of its volumes. safety. “The Nexon was the Minoru Kato, its president proverbial guiding light for us and chief executive, explained in this aspect, and the Altroz their cautious outlook on sales has followed its footsteps, pick-up to the disruption that setting a new benchmark is expected from the BS-VI im- across the industry safety plementation, madatory for all standards,” Tata Motors vehicles from April 1. “We beli- Passenger Vehicles Business eve the market will grow again. Unit (PVBU) President Mayank But, the next financial year Pareek said. PTI (2020-21) will be difficult bec- ause of the price points. We ex- near future.” pect things to improve five to The 6G is Honda’s third BS- six months after the new pri- VI compliant model, after the ces are accepted by customers. Activa 125 scooter and Shine Sales are likely to pick up in 125 motorcycle last September. Diwali. We hope it to be the It has sold 75,000 units of same as last year,” said Kato. these BS-VI models, claiming The BS-VI norms are expe- first-mover advantage in the cted to increase the price of two-wheeler market. two-wheelers by 10-14 per HMSI says it has invested cent. It comes when the over- close to ~1,800 crore in 2019- all market has been seeing 20, in BS-VI technology, plant one of the longest slowdowns augmentation and like areas. in two decades. HMSI sales in Guleria says demand will the first nine months of the start looking up in due cou- current financial year were rse, given under-served pub- down 16 per cent from the lic infrastructure and low same period a year before, to two-wheeler penetration. Be- 3.7 million units. ing a price-conscious market, Yadvinder Singh Guleria, any reduction in goods and senior vice-president for sales services tax (28 per cent now and marketing, said: “The on all two-wheelers) will def- change in price points in dou- initely help, he added. ble-digit percentage terms To make its products more will have an impact because it affordable, Honda has attrac- comes amid an overall weak tive finance schemes and be- economic scenario. We don’t en working closely with deal- see the market reviving in the ers, said Guleria. 4 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 16 JANUARY 2020 “I am in favour of inscribing the image of “When Haji Mastan used to come to 'Mantralaya', “Our party considers the BJP and the Congress Goddess Lakshmi on banknotes. This could the entire ‘Mantralaya’ would come down to see as two sides of the same coin. The Centre improve the condition of the Indian currency. him. Indira Gandhi used to come to meet Karim should reconsider the CAA, withdraw it, and Nobody should feel bad about this” Lala in Pydhonie (in south Mumbai)” bring a new law after consensus” SUBRAMANIAN SWAMY SANJAY RAUT MAYAWATI BJP leader and Rajya Sabha member Senior Shiv Sena leader BSP chief

> . IN BRIEF Govt plans curbs Bank unions call two-day Exports contract for fifth strike from January 31 on imports under Bank unions on Wednesday called for a two-day nationwide strike on January 31 and February 1 after talks consecutive month in Dec ‘others’ category over wage revision failed to make headway with the Indian Banks' Policymakers worried over PTI & INDIVJAL DHASMANA Association (IBA). The United Forum New Delhi, 15 January of Bank Unions (UFBU), which dwindling imports, which represents nine trade unions, said Concerned over the rise in they will also hold a three-day strike contracted for 7th month imports in the ‘others’ category, from March 11-13. "From April 1, we have decided to go on an SUBHAYAN CHAKRBORTY Commerce and Industry indefinite strike," UFBU state convenor Siddartha Khan told PTI. New Delhi, 15 January Minister Piyush Goyal (pic- UFBU is seeking at least a 15-per cent hike, but the IBA has capped tured) on Wednesday asked the raise at 12.25 per cent, he said. "This is not acceptable," Khan xports contracted for the fifth those importers to seek HSN or said. The last wage revision meeting was held on January 13. PTI< straight month in December, as tariff code within 30 days from E processed petroleum exports saw the foreign trade office, failing lower receipts and broad-based decline which the government would continued to plague all major foreign impose strong restrictions on PMC Bank scam: HC Making efforts to exchange earning sectors, according to their inbound shipments. sets up panel for strengthen bank data released on Wednesday by the com- In trade parlance, every merce and industry ministry. product is categorised under sale of HDIL assets further: YES Bank The decline in exports stood at 1.8 per an HSN code (Harmonised The Bombay High Court cent in December, higher than the 0.3 per System of Nomenclature). It set up a three-member cent fall in November. Outbound trade helps in systematic classifica- code or amend the existing committee on Wednesday contracted for the sixth month out of the OVER A YEAR tainty over the Merchandise Exports from tion of goods across the globe. code... Very soon, I shall be for valuation and sale of first nine months of the financial year Merchandise trade ( $ billion) India Scheme (MEIS), were a major cause Goyal said India is facing coming out with serious con- encumbered assets of 2019-20 (FY20). Till December, cumula- of concern as exporters' claims are pend- “big” problem in imports of a sequences. The consequences Exports Imports Housing Development and tive exports stood at $239 billion, 2 per 50 ing for over five months, which has com- category called “others” and in could be a higher duty on prod- 41.09 Infrastructure (HDIL) to cent lower than the corresponding period 45 pletely wiped out their liquidity and has that category, all sorts of stuff is ucts which come under others expeditiously recover dues Allaying concerns over reports of in the previous financial year. 38.61 kept them in doldrums with regard to being imported into the coun- category," he added. payable by the firm to crisis- its weakening financial health, However, officials remain worried 40 finalising new contracts,” said Sharad try. Citing an analysis, he said He also asked the DGFT to hit Punjab & Maharashtra YES Bank on Wednesday said about falling imports, which contracted in 35 Kumar Saraf, president of the Federation one out of the four products bring a trade notice immedi- < Trade Deficit in Dec 19 11.25 Cooperative (PMC) Bank. PTI the lender's capital adequacy is December by 8.8 per cent. As inbound 30 of Indian Export Organisations. Service being imported in India is ately and "make it an absolute at a comfortable level and goods reduced for the seventh time in exports, however, continued to grow, ris- under this category. ultimatum either the import efforts are being made to stren- FY20, economists said this shows low 25 ing 8 per cent in November to earn $17.9 Of over $500 billion worth of duty will be increased exorbi- 26.36 27.36 Nirbhaya convicts gthen it. It asked its customers demand for both consumer and industri- 20 billion in November and taking total earn- imports in 2018-19, the ‘others’ tantly or a special duty may not hang on not to pay heed to rumours al items — the hallmark of a slowdown. Jan ‘19 Dec ‘19 ings in the current fiscal to over $150 bil- category accounted for over imposed". This measure, he about its financial health. PTI< But the rate of import fall had reduced Source: Ministry of Commerce & Industry lion. $100 billion. “I will follow the said, will help the government Jan 22, HC told since October, when it crashed by 16.4 per German model,” he said, adding assess what is being imported The four death row convicts cent. India imported $306 billion worth of per cent. Import slide he would wait for response from into the country. in the Nirbhaya gangrape- Sundaram Finance goods during the April-October period, For gems and jewellery, exports The largest component of the import bill importers for next 30 days and The minister added that no murder case will not be han- sells entire 10% 8.37 per cent lower than the previous year. reduced by 8 per cent to just $2.8 billion in – crude oil – saw the cost of inbound ship- thereafter, “I will restrict the imports will be allowed with- ged on January 22 as schedu- As a result, merchandise trade deficit December. The sector has faced a slow- ments fall by 0.3 per cent to $10.6 billion, import of any product which out the HSN code into the led with the Delhi governm- stake in Equifax remained relatively low at $11.2 billion, down since last year but saw growth in as compared to $11 billion in November. goes in the others category”. country. On free-trade agree- ent on Wednesday telling the Sundaram Finance (SFL) has slightly lower than November’s $12.1 bil- October, when exports rose 6 per cent. Crude oil imports had shown significant At the CII’s National ments, he said it is an unfortu- High Court that the execution sold its entire equity stake of lion. Cumulative trade deficit reached Meanwhile, engineering exports saw a reduction in value terms throughout FY20 Standards Conclave, he said nate reality for India that the has to be postponed in view 10 per cent in Equifax Credit $118 billion till December. “The decline in contraction of 1.2 per cent in December, with global prices tanking. that importers will have to FTAs entered into with other of the pendency of a mercy Information Services. The the merchandise trade deficit in after a 6 per cent rise in November. The However, gold, the second-largest item approach the ministry to take a nations have not led to the petition by one of them. PTI< company, in a regulatory December 2019 relative to December 2018 sector, which accounts for 25 per cent of in the import bill, continued to fall. special licence for that import growth of trade and businesses. filing on Wednesday, said it was driven by the relatively broad-based the forex earned, had broken a long spell Incoming gold shipments narrowed by a without which "you cannot Ranjeet Mahtani, partner has executed a share contraction in imports, led by industrial of contraction in October. “Rising domes- moderate 4 per cent after massive drops of import any product in the oth- Dhruva Advisors, said: "This Trouble in paddy purchase agreement for the inputs such as coal, chemicals, iron and tic inflation is bringing additional pres- 50 per cent, 62 per cent, and 42 per cent in ers category". "Today, I would proposal will impact India's sale? Call police sale of 135 million shares at steel, and non-ferrous metals, transport sure and affecting our global competitive previous months, respectively. Non-oil like to give a final announce- trade patterns, when it has a price of ~67.43 per equity equipment, and consumer items such as strength,” Ravi Sehgal, chairman of and non-gold imports – a sign of domes- ment that I appeal to everybody been concerned with bulging in Chhattisgarh share, increased by 2.2 per precious and semi-precious stones,” said Engineering Export Promotion Council, tic industrial demand – fell for the four- who is importing any product import bill, and there have The police in Chhattisgarh cent per annum for the Aditi Nayar, principal economist at ICRA. said. teenth month, contracting 12.2 per cent. or services into the country, been discussions on levy of a have a new assignment — period from October 1, 2019, Elsewhere, apparel exports saw nom- Experts said they expect the current please categorise your product broader adjustment tax on jotting the grievances of till the date of closing. PTI< Bleak exports inal growth of 2.4 per cent, while elec- account deficit to dive to $3-5 billion in the into a respective HSN code imports to adjust for non-cred- farmers unable to sell paddy Government data showed that exports tronics (30 per cent) and pharmaceuti- quarter, compared to US$18 billion in under which it falls," he said. itable local levies to support at government entities. After stood at $27.36 billion in December, and 19 cals (13 per cent) also posted growth. FY19. Goyal asked the importers Indian manufacturing." crop damage because of FY20 real fiscal of the 30 major export sectors saw con- Despite this, exports of non-oil and non- The rise in gold prices is expected to to approach their nearest DGFT Sandeep Shah, partner, NA unseasonal rain and other deficit around traction. Critically, processed petroleum gems and jewellery products contracted continue to constrain demand in the (Directorate General of Foreign Shah Associates, said: "The alleged hardships in selling outflows continued to take a beating, with by 0.5 per cent in December, after the ongoing quarter, despite the favourable Trade) immediately. government should release the it, Chief Minister Bhupesh 4.5%: S C Garg receipts falling by 4.2 per cent in modest growth seen in the previous two outlook for rabi harvest, which would con- "We will start the process to draft code before implement- Baghel told rice farmers to India’s real fiscal deficit for December to $3.8 billion. But the pace of month. tinue to curtail the size of the current create a separate HSN code if it ing the higher tariff to avoid register their grievances at 2019-20 may be 4.5 per cent contraction was lower than November's 13 “Domestic issues, including uncer- account deficit, Nayar said. is not fitting into any existing unintended consequences." the emergency service of GDP, ex-finance secretary number, 112. This is managed Subhash Garg wrote in a by the state police, of all blog on Tuesday. He reitera- emergency services in a ted the point in another blog single number. R KRISHNA DAS< on Wednesday. BS REPORTER< Govt plans law to protect foreign investment

ADITI SHAH & AFTAB AHMED India has allowed most of its sign investment treaties with New Delhi, 15 January ON TABLE & ISSUES treaties to lapse, giving other nations if the new law, RASHESH SHAH GRILLED BY ED investors little to fall back on in which is modelled on a BIT, The government is planning a Govt may set up fast-track case of major disputes. can give confidence to new law to safeguard foreign courts for dispute BITs are agreements investors, said the first source. investment by speeding up dis- resolution between two countries that A domestic law, however, pute resolution, aiming to Investors most concerned give foreign investors protec- cannot be a substitute for a BIT attract more capital from over- tions, and among other things, as its scope cannot allow about contract seas to boost stuttering domes- legal recourse via internation- investors to take their case to tic growth, two officials with enforcement al arbitration in disputes with a international arbitration, the direct knowledge of the mat- Several rounds of inter- government. sources said. ter told Reuters. ministry discussions held India is entangled in more In a 40-page initial draft, than 20 such overseas arbitra- Contract Wrangles the finance ministry has pro- tion cases — the most against Though India's overall ranking posed appointing a mediator at diffusing investor mistrust spokesman for the finance on the existing legal system to any country — brought by in the World Bank's ease of and setting up fast-track courts around the sanctity of agree- ministry did not respond to a settle disputes, it often takes companies including doing business report has to settle disputes between ments, which has worsened request for comment. several years for cases to be Vodafone, Deutsche Telekom improved to 63 from 142 in investors and the government, recently after some state gov- Foreign investors have decided or settled. and Nissan Motor for disputes 2014, it still ranks poorly — 163 one of the sources said. ernments decided to review highlighted the enforcement Investors previously had an over retrospective tax claims out of 190 — when it comes to “The idea is to attract and approved projects, or threat- of contracts as one of their option to take India to interna- and breach of contracts. enforcement of contracts. promote foreign investment, ened to cancel contracts. biggest concerns, said the sec- tional arbitration courts under If India loses these cases, The latest example of a con- but a major issue for investors Both officials declined to be ond official, adding that bilateral investment treaties brought before most of its BITs tract wrangle is a dispute Edelweiss Chairman Rashesh Shah at the Enforcement is enforcement of contracts named as the proposal is not improving on this front would (BITs) the government had lapsed, it could end up paying between the Andhra Pradesh Directorate office in Mumbai on Wednesday. He was and speedy dispute resolu- public, and is still being also reduce litigation for the agreed with dozens of nations. billions of dollars in damages. state government in southern questioned for five hours in a Foreign Exchange tion,” said the official. assessed by different min- government. But, after suffering setbacks in The government’s thinking India and renewable energy Management Act violation case PHOTO: KAMLESH PEDNEKAR The draft proposal is aimed istries and regulators. A While investors can still rely overseas arbitration matters, is that India may not need to companies. REUTERS NHAI kicks off arbitration claim settlement via reconciliation MEGHA MANCHANDA cial operation, and certain addition- and executed agreement between the Central Road Infrastructure Fund, New Delhi, 15 January FASTag: Norms for al work executed on ground to the parties for projects awarded under the Permanent Bridges Fee Fund, Financial audit 65 plazas relaxed tune of ~803.23 crore. the engineering, procurement, con- and Monetisation of National The National Highways Authority is important but more The NHAI also raised claims of struction (EPC) mode that qualify as Highways Fund. of India (NHAI) has settled an important is FASTag norms for 65 toll plazas with ~145.33 crore, excluding interest, stuck could be reached in order to The Bharatmala programme arbitration claim worth about performance audit. high-cash transactions have been against the concessionaire on foreclose the disputes. envisages construction of 20,000 km ~650 crore with Infrastructure Decision-making relaxed to allow them to convert up account of delays and other issues. The NHAI has lined up a portfolio of roads at an estimated investment Leasing & Financial Services should be fast, but to 25 per cent of "FASTag lane of Fee “Now the NHAI and the conces- of projects worth ~18,000 crore to be of ~7 trillion. (IL&FS) for nearly ~200 crore there are officials who Plaza" into hybrid lanes for 30 days, sionaire through conciliation agreed bid out in the next few months, which While the overall allocation for through a conciliation process. keep sitting on files" the government said on Wednesday. to settle all the claims for an amount includes five hybrid-annuity pack- NHAI has seen a rise in the past cou- The NHAI decided to settle the NITIN GADKARI Meanwhile, the NHAI recorded of ~197.62 crore,” the official added. ages on the Vadodara-Mumbai ple of years, the authority’s Internal claim for less than 70 per cent of the highest ~86.2 crore daily toll collec- There would be an interest pay- Expressway, four EPC packages on and Extra Budgetary Resources Road Transport and ~800-crore demanded by the com- tion on Sunday, its Chairman Sukhbir ment to the tune of ~54.53 crore the Delhi-Vadodara expressway, and (IEBR) has increased. Highways Minister, pany through an arbitration process, Singh Sandhu said. The highest daily equivalent for the settlement, which projects in Uttar Pradesh and Bihar. In 2017-18, the NHAI’s IEBR was warning “non- said an official. The NHAI had, in performing” officials collection via FASTags has also been will take the final amount to ~252.13 For the current financial year, the ~50,532.41 crore. It went up to ~62,000 turn, asked for ~150 crore from the or “dead assets” in recorded at ~50 crore (single-day crore payment to the concessionaire. NHAI has the approval to raise crore in FY19 and further to ~75,000 company, which worked out to a net his ministry collection) in January 2020 compared The conciliation exercise is being ~75,000 crore in borrowings during crore in 2019-20. outgo of ~650 crore. to ~23 crore in November 2019. PTI conducted by the NHAI to deleverage the current year, while the govern- The highways ministry is hope- This comes amid reports of the its balance sheet. ment support is ~36,691 crore. In 2018- ful of receiving close to ~47,000 crore NHAI deciding to settle stuck proj- There are three committees on 19 (FY19), a mix of debt raised from budgetary support in the upcoming ects through conciliation instead of (Barapani) section of NH-40 in January 12, 2011, with the scheduled tion before the arbitral tribunal in reconciliation set up by the NHAI to banks, toll revenue, and a road mon- Budget. This would be ~10,000 crore taking the long road of arbitration. Assam and Meghalaya on the design, completion date of January 10, 2014. respect of certain disputes related to look into these claims. These com- etisation scheme was to yield ~62,000 higher than the ~37,000 crore sup- This would reduce the agency’s debt build, operate and transfer (DBFOT) Owing to various reasons, work was this project, such as loss on account of prise retired judges. crore to the NHAI. This financial port that the ministry received last burden, which may reach ~2.5 trillion pattern under BOT (Annuity) was delayed and a final commercial oper- interest during construction, addi- The road ministry issued a set of year, allocation has been made to the year. Besides the fiscal support, the by the end of the financial year. awarded to the concessionaire, IL&FS ational date was issued on January tional costs toward maintenance, loss guidelines in March for reviving stuck NHAI for major works under the NHAI has the mandate to raise The settlement with IL&FS for Transportation Networks. 30, 2019, the official said. of escalation, loss of revenue/annu- national highway projects. According Bharatmala Pariyojana. ~75,000 crore during the current four laning of Jorabat-Shillong The project commenced on The agency had gone for arbitra- ities on account of delayed commer- to the guidelines, a mutually agreed The money will come from the financial year. MUMBAI | THURSDAY, 16 JANUARY 2020 ECONOMY & PUBLIC AFFAIRS 5 . < UNSC may take up Kashmir issue RAISINA DIALOGUE China makes fresh bid for the issue to be discussed in closed-door meet, but France says it’ll oppose India prisoner of past

PRESS TRUST OF INDIA New Delhi, 15 January Union ministers to visit Kashmir image, and must get Following an initiative taken by Union Home Minister Amit Shah, a hina has made a fresh group of central ministers will visit Jammu and Kashmir starting pitch to raise the from January 18 including sensitive areas in the valley to spread C Kashmir issue in a awareness about the positive impact of abrogation of Article 370 over this: Jaishankar closed-door meeting of the UN provisions and the development measures taken by the Security Council (UNSC) in New government for the region, sources said. Thirty-six ministers will ‘We will evaluate RCEP on its economic and trade merit’ York on Wednesday, but the visit different districts in both the divisions of the Union Territory attempt is likely to fail as all oth- starting from January 18 to January 24 . Meanwhile, the J&K PRESS TRUST OF INDIA er member countries of the administration has cited possible misuse of the internet by anti- New Delhi, 15 January “NEITHER INDIA NOR CHINA body are set to oppose it. national elements and terrorists as a reason for not restoring these CAN GET INDIA-CHINA French diplomatic sources services for the general public and media in the Kashmir Valley. PTI India's way is not to be disrup- RELATIONS WRONG. said France has noted the tive and it is more of a decider OUR RELATIONSHIP request of a UNSC member to and it is going to oppose it like the UNSC has been called to made a request to deliberate Business Points". than an abstainer, External IS UNIQUE. EACH COUNTRY raise the Kashmir issue once it did on a previous occasion. discuss an issue relating to an on the Kashmir issue under The sources said France's Affairs Minister S Jaishankar HAS GONE UP IN THE again in the powerful body The closed-door meeting of African country. China has the agenda of "Any Other position has not changed. said on Wednesday. WORLD SIMULTANEOUSLY. In remarks that come at a IT IS NECESSARY THAT time several countries have THE TWO COUNTRIES called for a greater Indian role FIND EQUILIBRIUM” in the Indo-Pacific, the minis- Scrapping Art 370 historic step, disrupted ter also said it is not the India way to be mercantilist. Addressing a gathering at the Raisina Dialogue in the plans of ‘western neighbour’: Army chief national capital, Jaishankar referred to tensions between PRESS TRUST OF INDIA Army is pride of the US and Iran and said they New Delhi, 15 January are two individualistic coun- India can play a role in easing tries and what finally happens Army chief General M M India, tweets PM will depend on the players Naravane on Wednesday hailed Prime Minister Narendra Modi involved. Gulf woes: Iran’s foreign min the abrogation of provisions of on Wednesday greeted army Discussing ties with China, India can play a role in de- Emirates, Oman and Qatar, as it Article 370 as a "historic step" personnel on the Army Day, he said it is vital for neigh- escalating tensions in the Gulf has important interests in the and said the move has disrupted saying they are the pride of bours to reach understanding region as New Delhi is an region. "India can play a role in plans of the "western neighbour India. "The Indian Army is the on crucial issues. "Neither important player, Iranian de-escalating tensions in the and its proxies". pride of Mother India. On the India nor China can get India- Foreign Minister Javad Zarif said Gulf region as New Delhi is an The armed forces have "zero occasion of Army Day, I salute China relations wrong. Our on Wednesday. important player," he told PTI. tolerance against terrorism", he the indomitable courage, relationship is unique. Each His remarks come amid Prime Minister Narendra Modi said at the 72nd Army Day func- valour of all the soldiers of the country has gone up in the tensions between the US and told Zarif that India has strong tion in the Cariappa Parade country," he wrote on Twitter. world simultaneously. It is Iran over the killing of Iranian interest in peace, security and Ground in the national capital. The Army Day is celebrated necessary that the two coun- Revolutionary Guard Corps stability in the region. "We have many options to on January 15 every year to mark tries find equilibrium," commander Major General "The Foreign Minister shared counter those who promote ter- the taking over as commander- Jaishankar said. Qassem Soleimani. his perspectives on the recent rorism and we will not hesitate in-chief of the Indian Army by India, he said, is a "prison- India has been maintaining developments in the region. to use them," he said. then Lt Gen K M Carriappa in er of its past image" and must that it would like the situation The Prime Minister mentioned On August 5 last year, the 1949 from General Francis get over it. "It is not the India to de-escalate as soon as India's strong interest in peace, Centre abrogated provisions of Armed forces have zero tolerance against terrorism, Naravane said on the 72nd Army Day PHOTO:PTI Butcher, the last British way to be disruptive. It is not possible and the country has security and stability in the Article 370 that gave special Commander-in-Chief of India. the India way to be mercan- been in touch with key players, region," a statement from the powers to Jammu and Kashmir try had to face some security The Army chief said the situ- extremely happy to see all the Carriappa later became a tilist. It is the India way to be including Iran, United Arab Prime Minister's Office said.PTI (J&K) and bifurcated the state challenges last year. ation along the LoC is linked with ranks brimming with confidence Field Marshal. more of a decider and not an into two union territories. "Not only it countered situation in J&K. "Today, we at the post. "In last few days, Modi hailed the valour and abstainer. I would pick on cli- spoke more than what we did. benefit. We will evaluate RCEP The Army chief said, proxy war but other situations. remember those who have made some of our soldiers achieved professionalism of the Chinar mate change. India owes it to It is changing now," the minis- on its economic and trade "Abrogation of Article 370 is a Whether it is LoC (Line of ultimate sacrifice for the coun- martyrdom due to avalanche. We Corps personnel who escorted a itself and to the world to be a ter said. merit. We have not closed our historic step. It will prove to be Control) or LAC (Line of try. It will keep inspiring the com- will always remember their sac- pregnant woman to a hospital just power," he said during the On India pulling out of the mind to it," Jaishankar said. important in integrating J&K Actual Control), we have ing generations," he said. rifice." Dhanush and K-Vajra gun through heavy snowfall in the session titled "The India Way: Regional Comprehensive He also asserted that "we in the national mainstream. ensured security with active- Mentioning his visit to Siachen systems were showcased for the Kashmir Valley. "Our Army is Preparing for a Century of Economic Partnership (RCEP), are not under-delivering on This decision has disrupted the ness and strength," he said, last week, he said he was first time in the Army parade. known for its valour and Growth and Contest". he said the onus was on coun- India-US relationship". plans of our western neighbour adding the situation at north- professionalism. It is also India is firmly dealing with tries which were part of it. There is no area of activity and its proxies". ern borders (China border) is EXPERT ADVISES AGAINST INDUCTING respected for its humanitarian terrorism, he added. "Where RCEP is concerned, where India and the US are not Gen Naravane said the coun- relatively peaceful. FOREIGN CHOPPER P23 spirit,” the PM said. PTI "There was a time when we we have to look at cost and working together, he said. 6 ISSUES AND INSIGHTS MUMBAI | THURSDAY, 16 JANUARY 2020 >

enough to defend a CEO under siege. > In neither case does the board have an CHINESE WHISPERS Are Indian boards truly effective? incentive and disincentive structure to nudge better outcomes. Boards have Our approach to board governance has resulted in a sharp focus on structure, that is, form, not felt the pain either of totally arbi- Principal's problems trary and bad decisions and have been A Madhya Pradesh government school without commensurate focus on substance, that is, effectiveness happy to lend their endorsements to principal has come under fire after the management or the owner, or both. notebooks carrying pictures of Veer (Sebi). This is yet another measure has resulted in a sharp focus on board members are those with whom the CEO Sadly, the regulatory response is Savarkar were distributed for free among related to the plumbing architecture of structure, that is, form, without com- is comfortable. In the Indian scenario taking the form of prescribing exams students of his school. These notebooks the board. While our regulatory frame- mensurate focus on substance, that is, where substantial ownership and the on governance for directors to pass. were distributed in November last year by work is very detailed about what a effectiveness. Across companies, nev- CEO can largely be with the same per- One must rest assured that every sin- an NGO and had pictures of Savarkar along board should look like and who it must er before has the office of the chief son, it is more pronounced. But even gle director of every company that has with those of the NGO’s office-bearers. All consist of, the effectiveness of over- executive officer (CEO) been under where the CEO is not a substantial own- had serious repercussions in recent would have been fine if the volunteer sight and superintendence by corpo- such close scrutiny and regulatory er of the business, the candidates for times for not handling a CEO appro- organisation had not uploaded rate boards is hardly tested in the law. attack. While the media narrative and directorship brought to the sharehold- priately would pass such exams with photographs of the event on social media, Most of the measures being taken the consequent regulatory attention ers are those with whom the manage- flying colours. after which a "fan group" of the ruling are those that regulators would typically is on individual CEOs, at the heart of ment has comfort. The statutory impo- The 2013 company law introduced party intimated its IT cell in Bhopal WITHOUT CONTEMPT take in a controlled economy. The reg- the problem is the ineffectiveness of sition of a requirement of a Nomination a quasi-judicial forum for class action following which a complaint was lodged ulatory race in the last decade between boards and their performance as a and Remuneration Committee — the suits against companies and their gov- against the principal. Many employees’ SOMASEKHAR SUNDARESAN the Sebi and the Ministry of Corporate forum of collective superintendence collegium that selects who is clubbable ernors. Half a decade down, this juris- unions have come out in support of the Affairs (MCA) has resulted in detailed and oversight. — can further underline the syndrome diction does not even qualify as principal, an awardee of the President’s f there is one theme for regulatory requirements (often overlapping in sub- As a people, we Indians love heroic of self-selection. “fledgling” — it is non-existent. Medal, and said his suspension would only reform that is crying to be stance and also conflicting in detail) get- leadership by one powerful CEO, who One abiding theme across failed or Worse, knowledge of and expectations create fear among teachers. I addressed in 2020 for Indian busi- ting imposed across the listing regula- is then deified as the presiding deity — disgraced CEOs, regardless of whether from company law in the society is so nesses, it is to build a framework for tions (for listed companies) and a Caesar. The Caesar is demigod when the failure and disgrace is deserved, low that many are happy to put the effectiveness of boards of directors. company law (for listed and unlisted the going is good and demonised when is that the CEO grows into an all-pow- check and balance to severe test and Are Indian boards truly effective, is a companies). This framework largely the going is bad. The Caesar being over- erful force, with the board of directors raise the bar for accountability to be Fading Chouhan question we need to ask ourselves. revolves around board composition, the seen by the board of directors, a collec- not being an effective check and bal- enforced. It is only litigation and The year has begun with a cop-out concept of independent directors, qual- tive Parliament-like body that would ance. Yet, when the CEO is in trouble, attendant jurisprudence that can in the area of board regulation. The ifications and disqualification for direc- act as a check and balance, and also a it is tough for boards to stand behind resolve effectiveness of boards. Until introduction of the regulatory require- torship (independent and otherwise), guiding sounding board, is not some- the incumbent — particularly when then, we can keep tweaking the law ment to segregate the position of chair- and even addressing social representa- thing that is acceptable easily to a soci- the adversary is a regulator. with little effect. man and managing director has been tion objectives that are not directly relat- ety that craves for singular heroes. A board that is not strong enough postponed by two years by the ed to the quality of governance. Those occupying the role of the CEO, to hold the CEO to account is also a The author is an advocate and independent Securities and Exchange Board of India This approach to board governance too, have to introspect. Typically board board that is inherently not strong counsel. Tweets @SomasekharS

aluminium, when she presents the Budget on February 1. Let’s consider Recasting Indian steel non-fuel grade calcined petroleum coke (CPC), which along with coal tar pitch The Bharatiya Janata Party (BJP) is Burdened by high logistics cost and taxes that limit its export potential, the 2.5 per cent customs duty on metal- (CTP) are used for making carbon anodes searching for a new state party lurgical coal, a highly volatile commod- used in aluminium smelters. Even president for its Madhya Pradesh unit the domestic industry hopes the Budget will provide relief ity with its prices in recent years fluctu- though CPC with maximum sulphur despite the incumbent Rakesh Singh ating between $150 and $300 a tonne. content of 3.5 per cent used for alumini- trying hard to retain the post for a KUNAL BOSE itable, Indian steel will not become glob- Import duty apart, steelmakers are um making is scarcely available in the second term. A closed-door meeting ally competitive. Instead, the overhang SKY HIGH required to pay ~400 a tonne as GST country making imports imperative, the was held recently between Singh, Union he recent years have seen India of cheap imports will keep the local Additional costs in $/tonne compensation cess for use of coking coal. customs duty on the raw material was minister Narendra Singh Tomar and state organisational general secretary alternating between a net exporter industry worried. The report says, quot- Logistics and infrastructure 25-30 Import duty and GST cess on coal makes ill-advisedly raised to 10 per cent from Tand net importer of steel. There ing Niti Aayog, that the additional bur- locally made steel costlier by over ~650 2.5 per cent in December 2017. Bizarrely, Suhas Bhagat. Later, another meeting was much discomfort in the government den on steel is $80 to $100 a tonne that Power 8-12 a tonne. Niti Aayog says the steel indus- however, the import duty on primary took place among these three at Tomar's with the industry raising demand for the government alone can remove. Import duty on coal 5-7 try’s cost disadvantage of up to $100 a aluminium is at 7.5 per cent. residence. The point to be noted here is that former chief minister Shivraj Singh stricter duty barriers when India’s Despite the limited elbow room that Clean energy cess 2-4 tonne is also on account of logistics and The silvery white metal is smelted imports of 7.83 million tonnes (mt) in the present economic scene — low gross infrastructure deficiencies, taxes and from powdery alumina extracted from Chouhan (pictured) was not present in 2018-19 exceeded exports by 1.47 mt. domestic product (GDP) growth and Taxes and duties on iron ore 8-12 duties on iron ore, high power and bauxite. As it will happen even while the any of these meetings. While Chouhan The introduction of steel import muted tax collection — offers to Finance Finance 30-45 finance cost and clean energy cess. country owns the world’s fifth largest said he was busy attending national monitoring system (SIMS) Minister Nirmala Sitharaman TOTAL COST DISADVANTAGE 80-100 Whether it is steel or non-ferrous met- bauxite reserve and much of that high election committee meetings in New is with the objective of to provide relief, the steel als such as aluminium and copper, many grade, the country’s import reliance on Delhi, there are rumblings that he is fast incontrovertibly establish- industry is pitching hope on Indian groups match the best in the this intermediate chemical is close to 35 losing relevance in state politics. ing what is already within two grounds. First, the indus- 21 Budget.” Last year, India made 110.92 world in efficiency in conversion of raw per cent. This would not have been the the capacity of the local try with over 2 per cent share mt of crude steel in which the share of feedstock in metals. Where they lose out case had the government proactively cre- industry. In the last few of GDP leaves an output blast furnace-basic oxygen furnace (BF- in price competitiveness is because of ated condition for opening of new large years, primary steel indus- impact of 1.4x on the economy. BOF) route had a share of 49.91 per cent. the raft of import levies on raw materials bauxite mines. In any case, the customs Connectivity issues try leaders on their own This besides, as the World Steel To make steel through BF-BOF route, not locally available and some local costs duty of 5 per cent on calcined alumina The main auditorium at the Jawaharlal and with the help of foreign TAKE Association points out, any- coke, which is made from metallurgical over which producers have no control. raises manufacturing cost of the metal Nehru Stadium in New Delhi was partners such as Nippon where in the world two new coal, acts as a reactant in BF. Tata Steel Managing Director T V giving an advantage to foreign alumini- packed by the time Amazon.com Inc Steel and Sumitomo and TWO jobs created in steelmaking As it will happen, the country being Narendran famously says which is cor- um suppliers, including China. Alumina chief Jeff Bezos started speaking at a JFE are making auto and ANALYSIS BEHIND will open up 13 employment endowed with very poor quality coking roborated by JSW Steel Joint Managing alone has a share of 40 per cent of the company conclave on Wednesday. But electrical grades steel THE HEADLINES opportunities across the sup- coal with an ash content much above director Seshagiri Rao that much of cost of making the metal. for many in the audience — which boosting self-reliance. At ply chain. Downstream indus- required for making coke, we have world class efficiency within mills is India is a net importer of caustic soda, comprised retailers and Amazon the same time, the admission is to be tries from construction to machine remained nearly 90 per cent dependent compromised in terms of cost by poor the principal raw material for making partners among others — there was a made that generally the Indian steel building will be relieved to use globally on coal imports. Our imports in 2018-19 logistics involved in ingress of raw mate- alumina. Here also, imports raise the problem. And this problem related to a industry will have to make a lot of leeway competitive locally made steel. were 52 mt and these are set to rise yearly rials and egress of finished steel prod- issue of inverted duty structure. Caustic telecom company. The signal reception in economising on raw materials use and Second, an industry leader says: in line with increase in BF-BOF route ucts. Therefore, beyond whatever comes soda invites import duty of 7.5 per cent for the subscribers among the audience improving machine and labour produc- “Since taking charge of steel portfolio in steel output. The 2017 steel policy pro- as Budget relief, New Delhi will have to while the finished product alumina has ranged between severely poor and nil. tivity to match the global benchmark. May 2019, Dharmendra Pradhan has tak- nouncement of scaling down the indus- look holistically at what all needs to be an impost of 5 per cent. An industry offi- So all the pictures they excitedly clicked But as consultancy PwC India says in en steps to bring down logistics cost, cre- try’s coal import reliance to 65 per cent done to make India made ferrous and cial says that in the last five years, alu- or the updates they wanted to send to a recent report: “There are certain non- ate steel hubs, boost steel demand, which by 2030-31 will remain elusive going by non-ferrous metals globally competitive. minium production cost is up around the outside world via social media creditable taxes, duties and cesses, is way below the global average and the past record in extraction of prime In the meantime, hopes are running $420 a tonne while LME aluminium is remained stuck in the devices. Since a specifically paid by the steel sector, reduce India’s over-dependence on coking coal and setting up washeries for high in the aluminium industry that the down from $2,290 a tonne to $1,800 a rival mobile service provider was a which reduce the competitiveness of Australia, which is periodically visited by removing ash in coal. finance minister will finally end the tonne. In its plea for relief in the Budget, business partner of the event, it didn’t Indian steel products in the global mar- natural disasters, for metallurgical coal. Citing this unavoidable perennial inverted duty regime, which means cus- the industry urges the government to do take long before some of them began to ket.” The report observes that unless We are hopeful of the minister pleading high import dependence, industry offi- toms duties on not locally available raw a review of China’s stand on raw materi- float conspiracy theories. these levies are removed or made cred- our case for legitimate relief in the 2020- cials want Sitharaman to dispense with materials are higher than on primary als imports.

INSIGHT > LETTERS

by Archis Mohan. The ruling Aam Need of the hour Aadmi Party (AAP), which has been Ease regulation imbalance first off the blocks in releasing the The Annual Status Education list of all 70 candidates for the Delhi Why Trai-broadcaster alignment is crucial for industry growth Report (ASER) of NGO Pratham for Assembly elections slated to take the year 2019 has once again strong- place on February 8, seems to be in implement severe cost-cutting mea- ly underlined the existing and yet hurry to reach out to the voters with sures including inferior content quality, unaddressed inadequacies in our its all-impressive “report card”. and reduced headcount to survive with school education system. While However, as revealed in this the proposed unrealistic prices. The linking India's learning crisis to the report, the party high command has industry employs over four million peo- weakness of pre-primary system, retained all its incumbent ministers ple. Surely we cannot afford this during ASER has pointed out the fact that while dropping 15 of its sitting leg- an economic downturn! more than 20 per cent of students islators. It may be highly pertinent The Trai probably anticipates that in Class I are less than six-year-old to observe that this “prized” list also lower prices will increase the number of and children’s performance vis-à-vis includes the names of five “migra- TV channel subscriptions. TV broadcast- language and numeracy or other tory birds” from the Congress, who ers aim to stay competitive with high- cognitive, social and emotional might have crossed over to the AAP T V RAMACHANDRAN quality content, attractive pricing and learning tasks are strongly related with the hope of getting elected by packages, and draw more advertising to their age with older children riding on its popularity wave. This and subscription revenue. When both doing better on all tasks. wave was visualised by the survey “36 tariff orders on broadcasters in just parties clearly benefit from providing The pricing mandates, unfortunately, and channel blackouts drove subscribers Debate on ideal entry-level age which was recently conducted by 15 years”. “Broadcasters take TRAI to Indian consumers with top-notch con- seem to create an imbalance between to streaming services. to primary school needs to be taken the a TV news channel. For sure, court”. Recent news indicates a steep tent, isn’t it time to remove the handcuffs broadcasters and their partners, the Under the current regulations, DPOs to its logical conclusion. As empha- such an electoral scenario must escalation in the tension between the on broadcasters for the greater good? DPOs or distribution platform opera- have the right to refuse to carry specific sised by ASER, children between serve as a wake-up call for the telecom regulator (Trai or Telecom The Trai website states the regulator's tors. Broadcasters generate content for broadcaster channels on their plat- four and eight should be taught Bharatiya Janata Party which Regulatory Authority of India) and TV mission as, “for growth of telecommuni- their channels and partner with DPOs forms, citing bandwidth issues however basic cognitive skills through play- appears to be over-anxious to grab broadcasters. If this situation continues, cations” to “enable India to play a leading to deliver the channels to the end user. non-existent. Broadcasters are required based activities with a thrust on the seat of power after gap of 21 long it will result in an economic bloodbath role in emerging global information soci- In any business, the company that cre- to offer their channels without discrim- developing problem-solving facul- years. Let us hope the voters of the and the ultimate loser will be the Indian ety... Trai is to provide a fair and trans- ates a product sets the MRP or maxi- ination to all DPOs. This means broad- ties and by building memories of national capital vote wisely and consumer. Why this kolaveri? parent policy environment which pro- mum retail price, often factoring in dis- casters have to pay each DPO a carriage children. Addressing the ills plagu- maturely in favour of party which The Trai recently released a string of motes a level playing field and facilitates tribution costs. However, with the New fee per subscriber to deliver their chan- ing the pre-school and primary truly deserves their mandate to rule. tariff orders. The latest mandate caps fair competition”. Tariff Order (NTO) released in 2019 and nels. The gains of the DPOs from col- school education system is the need Anjana Gupta individual TV channel prices at just ~12, For decades, the media and entertain- its amendment in January 2020, dis- lecting subscription fees are not shared of hour. New Delhi a number derived by erroneously extrap- ment (M&E) industry has had a level tributors gain greater leverage while with broadcasters. M Jeyaram olating and applying group discount playing field with multiple players and broadcasters are boxed in. This is It is good to remember “Where there Tamil Nadu Letters can be mailed, faxed or e-mailed to: pricing for each channel. The intent numerous options for consumers. The patently unfair. is anger, there is always pain under- The Editor, Business Standard seems to be to provide consumers with market grew to a staggering ~1,631 billion Individual channels cannot be priced neath” (Eckhart Tolle). For the first time, AAP’s strategy Nehru House, 4 Bahadur Shah Zafar Marg cost-effective solutions and better choic- in 2019 at a growth rate of 13 per cent higher than ~12 and broadcasters have 10 broadcasters — regional, national, New Delhi 110 002 Fax: (011) 23720201 · es in channel selection. This and other (KPMG). The global average is only 4 per brakes on the number of grouped chan- Indian and foreign — stood united to This refers to “Delhi polls: AAP E-mail: [email protected] regulations have stirred up strong views cent. A fantastic achievement particu- nel packages or bouquets they can offer. voice their agony and suffering. If the announces candidates for all seats, All letters must have a postal address and and controversy. The entertainment seg- larly during the time of a economic Additionally, individual channels can- Trai could just look past the sound and drops 15 sitting MLAs” (January 15) telephone number ment is now consumed by turf wars and downturn with the economy projected not be offered at an MRP greater than fury and tune into broadcasters’ genuine court battles instead of a collaborative to grow at only 4.6 per cent (State Bank three times the average price of any oth- pain, there is much opportunity to join > HAMBONE focus to realise the high growth potential of India) or 5 per cent (World Bank) in er channel in the bouquet. DPOs, how- forces and work out a real win-win. The of the sector. 2020. Promoting natural competition ever, can collect an increased service fee partnership must prioritise the benefits Entertainment is not a fundamental among players will enable more attrac- from subscribers known as NCF or net- to consumers and “enable India to play human right, and content is extremely tive prices and options for consumers, work capacity fee of up to ~130 (exclud- a leading role in emerging global infor- expensive to produce. Apart from regu- increase subscription, and draw more ing taxes). The regulator also wants to mation society”. lation, traditional TV is actively com- revenue. This will help the Trai succeed allow consumers to create custom chan- (Research inputs by Chandana Bala) peting with an explosion of digital in its goal to “create and nurture condi- nel packages. However, technology lim- streaming services. In an attempt to stay tions for growth of telecommunications”. itations on the DPO do not allow for this The author is president, Broadband India afloat, broadcasters will be forced to The Trai also aims to “provide a fair level of flexibility resulting in channel Forum, and founder & CEO, Advisory@TVR lower the number of channels offered, and transparent policy environment”. blackouts last year. The increased NCF Views are personal. OPINION 7 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIV Number 110 ILLUSTRATION: BINAY SINHA MUMBAI | THURSDAY, 16 JANUARY 2020 Learning from the classroom Govt schools need to focus on quality

ver the past decade, successive governments have taken pride in the growth and low core inflation. fact that growing numbers of children in rural India are being enrolled On another front, India’s foreign currency in schools and, what is more, staying there for longer periods of time. reserves have increased by more than 2 per cent of In a country as large and geographically varied as India, this is no GDP over the past year. This is because capital O inflows and exports have continued even as imports mean achievement. The disheartening factor is that no government has chosen have fallen with weakening domestic demand. If to build on this initiative in a meaningful manner. The unintended consequence foreign savers are willing to give more money than of this “quantitative” focus has been to downplay the “qualitative” element, as the country needs, either the currency would appre- the latest Annual State of Education (Rural) or ASER report shows. ASER sur- ciate, or the cost of funds would come down. Neither veyors visited some 37,000 children between the ages of four and eight in 26 has happened. The central bank’s purchases of dol- rural districts in 24 states. The results suggested that government schools fared lars to keep the rupee from appreciation have been considerably worse in terms of the quality of education. For instance, less than prudent, but these surplus funds have not led to half (46.8 per cent) of students in government primary schools can read letters any drop in the cost of capital in local markets too. Some stability, but Apparently targeting a steady growth in money sup- of the alphabet compared with 77 per cent in private schools. Worse, for a ply, the central bank eschewed open market pur- country that prides itself on its information technology talent, only 54.4 per chases of government bonds as its currency market cent of children in government schools can recognise number one through interventions were sufficient for meeting its target nine compared with 82.7 per cent in private schools. risks remain money supply growth. One of the risks of a central The picture of early stage learning (at age five) — a critical stepping stone bank buying government bonds is a weak currency, to learning abilities at a later age — was no less dismal. ASER surveyors discov- but such a large balance of payments surplus, that With destocking over, growth is stabilising but its revival faces too triggered by weak domestic demand, shows that ered that children in government schools fared worse than those in private several pro-cyclical headwinds such risks are muted currently. schools on this count too. In cognitive tasks and picture description, the variation In popular commentary, over the past few between government institutions (including anganwadis ) and private schools months the number of problem balance sheets in was between six and 13 percentage points. In slightly more advanced skills, he (only) good feature of destocking-led eco- If all else were normal, the end of destocking India has risen from two to three and even four. such as listening comprehension and counting objects, the gap widened to 17 nomic slowdowns is that they end. After all, would be followed by restocking, and just as inven- While that may be true, we must remember that and 21 percentage points, respectively. The lesson is not just that government Tyou cannot keep cutting inventories indefinite- tory depletion hurts GDP growth, replenishment balance sheets can get stressed due to weak growth, schools deliver poor quality education but that the approach to early stage ly. A significant part of the worryingly precipitous would help growth. and are not always due to theft or corruption. For decline in gross domestic product (GDP) growth over But financial conditions remain tight; and even example, a central government debt-to-GDP ratio learning may be flawed. As the report points out, “focusing on play-based activ- the past six quarters was a drop in inventory: As GDP financial firms that have the capital, products and at 45 per cent looked sustainable and was steadily ities that build memory, reasoning and problem-solving abilities is more pro- measures activity, inventory build-up adds to growth, processes and access to funds, are slowing down falling due to high nominal GDP growth. But as ductive than an early focus on content knowledge”. At least part of the problem and lower inventories take away from it. This is evi- credit in response to the sharp drop in growth. With growth slowed (initially only due to lower inflation), is that the government’s drive to get children into school has resulted in many denced by the sharp divergence between growth rates nominal GDP growth having halved, it would not and the cost of debt stayed at 7 per cent, interest children being too young for their class. The report found that more than a in services and industry over the past be surprising if they undertook a costs at more than 3 per cent of GDP suddenly looked quarter of Class 1 students were four or five years, two to three years younger six quarters, and the drop in the broad-based reassessment of credit daunting; last year they were nearly a third of incre- than the recommended age. Permitting nursery school-age children into primary goods and services tax (GST) collec- quality for existing borrowers. mental spending. If taxes grow at 8 per cent, in line tions. There may be measurement- Another headwind to growth with nominal GDP, and non-discretionary expen- grades, the report points out, “puts them at a learning disadvantage that is dif- related issues in quarterly services would be expenditure cuts by state diture such as interest and salaries grow at the same ficult to overcome”. No less worrying in this qualitative differentiation between growth (only a few comprehensive and central governments, as they pace, how can there be any fiscal consolidation, let government and primary schools is that it is widening the gender gap. The proxies exist) but for what it’s worth, try to meet their fiscal deficit targets alone space for additional spending? If slowing nom- survey found that more boys are being enrolled in private schools and more it has not fallen as much as industry in a year where tax collections so inal GDP growth drives a new wave of stressed loans, girls in the relatively inferior government schools. This discrimination persists has, most likely because there cannot far have been well below expecta- the right solution would be growth revival, not through all age groups. be much inventory in services. tions. Central government spending another attempt to repair balance sheets. The big picture, then, is that the government is neglecting its role in basic We last saw this in the quarter has grown 13 per cent over the prior Economic forces, though, tend to play out over before GST was rolled out, when year in the first eight months, but time, even if more slowly than desirable. Let us con- education. This is a perilous path to follow. The “miracle” growth trajectories growth of industry and services had TESSELLATUM given the shortfall in receipts, if it sider the lower interest rates, which are necessary of the Asian Tigers (and China) were underpinned by the state’s delivery of similarly diverged: Goods supply sticks to its fiscal deficit target, (though perhaps not sufficient now) for growth quality primary and secondary education. If the trends highlighted by ASER chains shed inventory to make a NEELKANTH MISHRA expenditure in the last four months revival. Bank deposit rates have begun to fall, and persist, India, an aspiring power, may find itself firmly in the realm of the clean start with GST. In the last five would be 1 per cent lower than last should flow through to lending rates over time. world’s largest sub-Saharan country. quarters, however, this has been caused by tighten- year. If disinvestment proceeds are lower than bud- Mortgage rates are down nearly 50 basis points in ing financial conditions, which restricted credit geted, the fall would be greater. State governments, the last five months. Presentation of the Budget availability for distributors, wholesalers and retailers for whom borrowing targets are frozen by the middle should reduce some uncertainty on fiscal deficits across supply chains. The apparent demand visible of the financial year, cannot expand their deficits and spending, and April onwards state and central to manufacturers was thus much weaker than real now, and must curtail spending. They already governments should be able to resume healthy Promote oilseed production underlying demand. appear to be delaying payments, for example, for spending. By then, absent more weather disruptions, There are clear signs that the phase of steep de- crop-insurance, and towards the end of the financial headline inflation should also have corrected mean- Curbs on Malaysian palm oil import present a good opportunity stocking is now over. Power demand growth, which year, even salaries to state government employees ingfully. If there are no further accidents in the finan- had fallen by double-digits in October and could start getting delayed. Such steps may com- cial system, credit spreads should also start to fall, estrictions imposed by India on the import of refined and processed November (likely as industries cut production to pound the weak consumer sentiment, and further however slowly. The economy may then settle into palm oil, coupled with the European Union’s (EU’s) proposal to phase adjust for weak festive season sales), was only down push out investment plans of companies. a new slower rhythm, with growth a bit better than out the use of palm oil as transport fuel, are likely to prove game- 2 per cent in December, and was marginally up in Several of the natural stabilisers are not working seen currently, though far from what the country changers for the global palm oil sector. India and the EU are the the first week of January. GST collections and rail currently. Generally weak economic growth drives has set its sights on. R freight tonnage are also back in the positive growth down interest rates, but as documented frequently largest importers of this oil from Indonesia and Malaysia, which together territory. These are still weak numbers, but better in this column and elsewhere, interest rates that The writer is co-head of Asia Pacific Strategy and India account for 85 per cent of the world production. New Delhi’s decision on imports than the sharp declines seen earlier. borrowers see have been unchanged despite weak Strategist for Credit Suisse has been sparked by Malaysian Prime Minister Mahathir Mohamad’s anti-India diatribe on Jammu and Kashmir and the new citizenship law, though the need for it has been felt for long to protect the domestic edible oil industry. The EU’s move emanates from the perceived adverse impact of expansion in oil palm cultivation on the environment, owing to deforestation and habitat destruction. There’s no emerging market debt threat No doubt, this plan is set to be challenged at the World Trade Organization (WTO) by palm oil suppliers, but that may be inconsequential as the issue he World Bank warns us of a large wave of debt China are not central to the problem. tion, the probability of a financial crisis erupting in relates more to environment than trade. that has been building up since 2010. (Global High levels of debt are a precursor to a financial EMDEs would be considerably lower. The challenge Whether the Indian decision is also dragged to the WTO is not clear as yet. TEconomic Prospects, 2020). It’s driven by a rise crisis. That’s the lesson from the financial crises of the is not a financial crisis originating in EMDEs but one Prima facie, it does not seem to abuse any established international trade prac- in debt in emerging market and developing past, including the global crisis of 2007. However, as that might originate independently of them. That is tice. It is neither country-specific nor does it amount to banning the imports. It economies (EMDEs). The build-up has been faster the report notes, there are numerous mitigating factors what the World Bank should be highlighting. only makes prior permission necessary for importing refined palm oil. The and broader than in the three waves of debt in EMDEs in today’s situation. Persistently low interest rates is Which brings us back to the nub of the problem that happened before in the past 50 years. one of them. A rise in interest rates is sure to create today, namely, the high level of advanced economy Malaysian economy, however, is bound to take a hit regardless of whether this Every one of the earlier three waves ended in a problems. But a sharp increase in rates doesn’t seem debt. It was advanced economies that created the 2007 move is used selectively to undermine imports from this country or not. Palm financial crisis. The report spells out the impact of likely in the near future. crisis. The Eurozone crisis of 2011 was an extension of oil is Malaysia’s biggest agricultural export and accounts for 2.8 per cent of its these crises. It suggests ways in which EMDEs might The current build-up of debt in EMDEs is on that crisis and it dealt a further blow to the global gross domestic product (GDP). Unsurprisingly, therefore, Malaysia is already reduce the probability of a debt- account of a mix of government and economy. High debt and tardy growth in advanced considering price discounts and barter deals involving import of Indian sugar induced crisis and its impact. private debt. That’s good news. economies are impacting the world economy adverse- and buffalo meat in exchange for palm oil. Indonesia may, in fact, stand to It’s good to be warned and to be Government debt has a bigger chance ly. So is the upsetting of the international trade system gain by getting more business. prudent in managing debt. But are of being spent on consumption, so by the leading advanced economy, the US. For a EMDEs really going on a debt binge the rise in debt would have been more change, the World Bank might want to read its sermons For India, this could be a good opportunity to restrain unabated growth of that could hurt the global economy? of a problem had it been driven over- to the advanced world instead of to EMDEs. refined palm oil shipments from abroad. Malaysia frequently rejigs its palm oil Should we in the EMDEs be having whelmingly by government debt. duty structure to promote the export of refined oil vis-à-vis unprocessed oil. sleepless nights? Not really, if you At 50 per cent of GDP, government Political stability and investor confidence This hurts the Indian edible oil industry, which has invested heavily in creating look closely at the facts presented debt in EMDEs is not a huge problem. Several commentators have been saying that the vegetable oils refining capacity, much of which is currently lying idle or under- in the report. The debt problem, it Moreover, the domestic component protests in recent months pose a threat to political utilised. Going by the industry’s reckoning, the average capacity utilisation turns out, lies elsewhere — in the of government debt is relatively man- stability and have damaged investor confidence. advanced economies. ageable — governments can inflate Political stability, they tell us gravely, is just not a mat- has plummeted to merely 46 per cent. Many small and medium scale refineries Global debt, government and FINGER ON THE their way out of trouble. External debt ter of having a parliamentary majority. It is also about have shut down, rendering thousands of workers jobless. Cheaper imports have private, was at an all-time high of is the issue. Total external debt, gov- the absence of political turmoil. The controversial also kept domestic edible oil prices down to the detriment of the local oilseed 230 per cent of gross domestic prod- PULSE ernment and private, in EMDEs was political initiatives of the present government and growers. This has been one of the significant reasons for the failure of the uct (GDP) in 2018. EMDE debt was T T RAM MOHAN 26 per cent of GDP in 2018, not alarm- the protests they have evoked, the pundits warn, are domestic oilseed output to keep pace with growing demand. 170 per cent of GDP in 2018, an ing by any reckoning. bound to reflect in investor confidence. Oil palm farming has failed to make much headway in India despite liberal increase of 55 basis points over the There are other positives in the Well, if investor confidence has been damaged, it incentives from the government because of land constraints and long gestation level in 2010. But the bulk of the increase happened current situation. The international financial system certainly doesn’t show up in foreign inflows. Foreign because of China. Excluding China, EMDE debt is has become more resilient, thanks to higher capital institutional investor inflows totalled $19 billion in period of the plantations. India, however, has huge potential to raise the output 107 per cent of GDP, by no means a high figure given at banks than in 2007. More global safety nets are the calendar year up to December 2019, up from of other crop and tree-based oilseeds to meet the demand for cooking and use that it includes both government and private debt. A available. Many EMDEs have moved towards better minus $11.3 billion in the year up to December 2018. in industries such as food processing, cosmetics and pharmaceuticals. But Chinese debt crash has been forecast for so long that macro-economic policies. These include flexible Gross foreign direct investment into India was $40.1 assured marketing at remunerative prices is a prerequisite for farmers to invest it’s now boring to read about it. exchange rates, targeting of low levels of inflation billion in the period April-October 2019 compared to in boosting the productivity of oilseed crops. Checking the inflow of cheaper Advanced economy total debt was 264 per cent of and higher foreign exchange reserves. $37.3 billion in April-October 2018. Foreign investor edible oils through measures like the new curbs on import of refined palm oil GDP in 2018. True, this is the same level as in 2010, Since 1970, there have been 520 episodes of rapid confidence is alive and kicking. The government’s can prove a step in that direction. there has been no increase. But the fact remains that accumulation of debt in 100 EMDEs. About half of critics need to think up a different spiel. the high level of debt in the world today is primarily these resulted in financial crisis. That gives us a prob- on account of advanced economies. EMDEs barring ability of 50 per cent in worse times. In today’s situa- The writer is a professor at IIM Ahmedabad; [email protected]

submarines through investigations of was also somewhat ambivalent about endure its tirades against Britain’s toxic atmospheres. He almost killed eugenics. conduct of the war. A man who knew too much himself multiple times figuring out how He was a pacifist who worked for world Both his marriages were carbon monoxide and carbon dioxide peace. But he enjoyed a good physical unconventional. His first union involved back to the 12th century —the name is a thus, put a firm foundation to Darwin’s affected human beings. This followed up scrap, using his fists with the same relish, a farcical divorce case. He persuaded his version of Half Dane implying Viking theories and Mendel’s genetic on his father John Scott Haldane’s as he deployed his tongue in an mistress’ husband to sue him and invited ancestry. He was, however, a socialist and experiments. He was thorough in working pioneering work in these areas. intellectual argument. He fought in the a private detective to deliver newspapers communist. He wrote prolifically for the out possible scenarios for evolution, and He wrote an incredibly wide-ranging trenches in the World War-I where, upon to his hotel room to prove his adulterous Daily Worker, (published by the prescient in set of pieces where his own admission, he enjoyed killing affair with feminist author Charlotte Communist Party of Great Britain) and suggesting ways in A DOMINANT he explained people and was once described as “The Franken Burghes. He nearly lost his BOOK REVIEW headed its editorial board. Indeed, the DW which life could CHARACTER: The science in popular bravest and dirtiest officer in the British Cambridge readership as a result of the archive is worth raiding purely for his arise from the Radical Science terms. He also wrote army”. He was wounded twice in France, ensuing scandal. His second wife, Helen DEVANGSHU DUTTA column on popular science. primordial “soup" And Restless science fiction and in Iraq and nicknamed “Bomber" for Spurway, was one of his students and 22 He was an atheist who casually quoted of the early Earth Politics Of JBS fantasy, which was his facility with handling explosives. He years younger. Marrying her required ohn Burdon Sanderson Haldane the Bible(in multiple languages), or the without a nudge Haldane always polemical, also advocated the use of poison gas rather another complicated divorce and (1892-1964) was often referred to as Gitain Sanskrit, or Tagore’s hymns in from a creator. Author: Samanth and ranged from the than high explosives, since gas killed fewer payment of substantial alimony. J“the last man who knew everything Bengali. He wrote a sequence of He also made a Subramanian boring to the people and caused less damage. In his old age, he relocated to India, there was to be known”. The bare details of mathematically driven papers, which series of conjectures brilliant. He was He actively participated in the first to the Indian Statistical Institute and his utterly unconventional life are stun- transformed the biosciences and the about genetic Publisher:Simon known for his Spanish Civil War and during World War- then to Bhubaneswar, after a spat with P C ning. This solidly researched biography understanding of genetics, despite never linkages, and the & Schuster brutally honest II, contributed critical research, aiding Mahalanobis. He took Indian citizenship, connects the disparate strands of his polit- having formally received a degree in the whys of mutation, Price: ~799 adherence to the in submarine design, and sitting on half wore a dhotiand turned vegetarian. He ical convictions, his irreverent attitude to sciences. He was utterly fearless in which have since truth in his scientific a dozen secret scientific committees. died in Odisha of cancer. When his cancer everything including his own death, his running experiments involving poison proved to be work. Yet, he was an This was while being under constant was first diagnosed he wrote “ I wish I had complicated personal life, and his enor- gases, drugs and explosives, often astonishingly close to the mark. apologist for Stalin and the Soviet regime, surveillance from MI5 as a committed the voice of Homer / To sing of rectal mous contributions to science and the pop- endangering his own life along with those Remember, the structure of DNA was eliding Lysenko’ s pseudoscience, and communist, and fighting a running, carcinoma”. ularisation of science. of his assistants. discovered only when he was in his 60s. overlooking Stalin's genocidal modus public battle with Winston Churchill Samanth Subramanian does a pretty Haldane was the scion of an Haldane used his mathematical skills He designed gas masks for battlefields and operandi, even though he lost friends and who shut down the Daily Worker in good job of chronicling the science and the aristocratic family that traces its origins to analyse data from multiple sources, and contributed to safety in mines and academic colleagues to Stalin’s purges. He exasperation after being unable to insanity. QUICK TAKE: SENTIMENT TURNS SOUR FOR WIPRO “Mexico, a large exporter of oil, regularly buys Wipro shares fell 3.5%, reacting to its December put option on oil costing more than a billion The Smart dollar annually to protect itself quarter results declared the previous day. Besides continued headwinds in key verticals against lower oil prices. Should MUMBAI | such as financial services and in large accounts, India be hedging its oil exposure?” THURSDAY, 16 JANUARY 2020 lower-than-expected revenue guidance for NILESH SHAH, Investor the seasonally strong Q4 also hurt sentiment Managing Director, Kotak Mutual Fund WWW.SMARTINVESTOR.IN FOR INFORMED DECISION MAKING < Karvy case: Axis Bank gets relief from SAT Multi-caps may JASH KRIPLANI Mumbai, 15 January relief to Axis Bank by directing Karvy’s MF status quo to be maintained on The Securities Appellate the Sebi order till further hear- application Tribunal (SAT) on Wednesday ing on the matter.” miss broader granted interim relief to Axis Sebi, in its order, had iden- on hold as Bank in the appeal filed by the tified ~171.74 crore worth of latter against the order passed shares where clients had fully- NJ gets nod by the Securities and Exchange paid the dues. The spokesper- Board of India (Sebi) in the son for Axis Bank said, “Our market recovery Karvy case. submission is that even in these Sebi has put Karvy Stock Axis Bank had moved SAT shares, there is indebtedness, Broking’s application for an JASH KRIPLANI seeking status quo on the order and the data needs to be re- mutual fund (MF) licence on Mumbai, 15 January As the economy which stated that pledging of examined.” under supervision of the NSE,” the share pledges were created. hold. The regulator’s process- recovers, earnings shares by Karvy Stock Broking In its order, Sebi said the Sebi said in its order. Karvy owed ~80.47 crore to Axis ing status report showed that ulti-cap funds — which are expected growth of mid- — where clients had “fully- transfer of unpaid client shares Sebi’s whole-time member Bank. Overall, ~185.43 crore Karvy’s application was “put to shuffle between companies across and small-cap paid” — was legally invalid. worth ~13.69 crore, which were also observed that pledging of worth of securities were on hold in view of pending M market caps to optimise investor firms should pick The tribunal granted inter- pledged in favour of Axis Bank securities of unpaid clients pledged in favour of Axis Bank. regulatory action”. returns — run the risk of missing out on a up as they have im relief in light of the fact that by Karvy, can be allowed if the required “explicit authorisa- Axis Bank had sought that Karvy had made the appli- broader market recovery, with such funds higher linkage to the National Securities bank is able to furnish proof of tion” from each client and pow- in respect of partly or unpaid cation for an MF business in showing heavy bias towards large-cap stocks the domestic Depository had earlier reversed authorisation by each client. er of attorney (PoA) given by clients, Karvy should be direct- February last year, much in their portfolios. economy securities to clients on the basis “If the representor (Axis clients was not sufficient autho- ed to issue five days’ notice to before the broking firm came According to the data from Value Research, MAHESH PATIL of Sebi’s November 2019 order. Bank) is able to show proof of risation to create such a pledge. clients or the bank can issue under regulatory glare for average allocation of multi-cap funds to large- Confirming the develop- authorisation in respect of Axis Bank in its arguments had five days’ notice to clients to pledging client securities. Chief Investment cap stocks was 71.8 per cent as of December ment, an official spokesperson securities having value of ~13.69 said the PoA was sufficient pay dues and redeem the Meanwhile, NJ India Invest Officer, Aditya 31, 2019. Mid-cap stocks accounted for 20.2 per for Axis Bank said, “The bank crore belonging to unpaid authorisation, the order point- shares. If the clients fail to do — India’s largest MF distrib- Birla Sun Life MF cent of the funds’ investment, while the average has filed an appeal before SAT clients, such securities can be ed out. Axis Bank had extend- this within the stipulated peri- utor in terms of commission allocation to small-cap stocks was a measly 8 against the Sebi order. The SAT released to the representor after ed an overdraft facility to Karvy od, the bank sought permission — got in-principle approval to per cent. “If the broader market rally starts to on Wednesday granted interim following the above procedure Stock Broking, against which to invoke the pledged shares. set up the MF business. play out at a rapid pace, the multi-cap funds might find it difficult to realign their portfolio 8.0% in time to take advantage of a sharp recovery,” Small-caps said Amol Joshi, founder, PlanRupee Investment Services. Fund managers expect front line indices to Pfizer eyes listing of GSK yield modest returns due to steep valuations. HEAVY- Large-cap stocks within these indices had seen WEIGHT sharp rerating, as investors looked for pockets Multi-cap funds can consumer venture in 4 yrs of safety. Fund managers expect a reversal of be caught wrong- fortunes in the broader markets — mid- and footed amid strong MARK SCHOIFET small-cap stocks — where earnings visibility Mumbai, 15 January had waned. broad market “Mid- and small-cap earnings had got recovery Pfizer is planning an initial downgraded. However, as the economy recov- public offering (IPO) of its con- ers, earnings growth of mid- and small-cap sumer-health joint venture companies should also pick up, as they have a 20.2% 71.8% with GlaxoSmithKline in 3-4 higher linkage to the domestic economy,” said Mid-caps Large-caps years, as the two drugmakers Mahesh Patil, chief investment officer, Aditya turn back toward the lab. Birla Sun Life Mutual Fund (MF). Source: Value Research, data as on December 31, 2019 Albert Bourla, CEO of BANKING, FINANCIAL STOCKS THE “The prevailing risk on sentiment globally Pfizer, discussed the time CASH COWS FOR FUND HOUSES should also lead to continuing foreign institu- frame for the IPO at the Mutual funds (MFs) saw increased investments in tional flows — a part of which should go into shows that mid- and small-caps are showing JPMorgan Healthcare mid- and small-caps,” added Patil. Experts say early signs of outperformance. The BSE Conference in San Francisco banking and financial stocks ahead of the Budget, funds will need to realign their portfolios to MidCap has yielded returns of 5 per cent in the on Tuesday. The plan provides With annual sales of about care business and in the broad- which will be presented on February 1. The value of MF take advantage of a pick-up in broader markets. last three months, while the BSE SmallCap has New York-based Pfizer with a $13 billion, it brings under one er economy have challenged a holdings in ICICI Bank increased by ~2,900 crore in “If the market broad-bases gradually as and delivered returns of close to 9 per cent in the clear exit strategy, he said. roof Advil painkillers, Tums model in which drugmakers December. This was followed by Kotak Mahindra Bank when economic recovery plays out, clearly same period. Meanwhile, the Sensex has posted The world’s biggest supplier stomach tablets, Sensodyne control every corner of home (up ~1,320 crore), HDFC (~1,290 crore) and Maruti Suzuki funds will have to decide what kind of mid- gains of 4 per cent. of over-the-counter medicines toothpaste and Nicorette gum. medicine cabinets. (~1,200 crore). Bharti Airtel was also on MFs’ radar, with caps they need to buy and at what pace. At our Experts say investors in a few multi-caps will be one of the industry’s Both Glaxo, the majority Big pharma companies are the value of MF holdings rising ~1,180 crore. Meanwhile, asset management company, we are taking a may see wider underperformance, as these are only standalones, facing off owner, and Pfizer, which has increasingly focused on devel- Reliance Industries saw the biggest cut in MF holdings, bottom-up approach to spot mid-caps with virtually being run like large-cap funds. “There with companies integrated into about a third of the business, oping high-priced new declining by ~1,650 crore. Other firms that saw the strong investment case,” said Rahul Singh, are some multi-cap funds in the industry, larger entities such as Johnson are looking to focus on drug medicines that draw on cut- biggest fall were ITC (~1,050 crore), SBI (~920 crore) and chief investment officer-equities, Tata MF. where almost 100 per cent of investments are & Johnson, Bayer AG and development. ting-edge research in genetics BPCL (~610 crore). JASH KRIPLANI The return scorecard in recent months in large-cap stocks,” said a fund manager. Procter & Gamble Co. Recent shifts in the health- and other fields. BLOOMBERG RISING MF Value chg EXPOSURE in Dec (~ crore) THE COMPASS 7 firms to list CPs on ICICI Bank 2,900 Kotak Mahindra Bank 1,320 BSE for ~8,812 crore HDFC Ltd 1,290 Bandhan Bank: Look beyond headline numbers Maruti Suzuki 1,200 The BSE on Wednesday said seven firms Bharti Airtel 1,180 Provision coverage HAMSINI KARTHIK Growth in non-microfinance (MFI) business, including Grasim Industries, Reliance Jio including Gruh Finance, also seems to be slow- Infocomm, and HDFC Securities have filed ratio, loan book The Bandhan Bank stock shed over 5 per cent ing, with non-MFI loan assets growing at a pal- applications to list their commercial FALLING MF Value chg on Wednesday, giving up far more than the 1 try 1.5 per cent sequentially to ~25,356 crore in papers (CPs) with the bourse for a total EXPOSURE in Dec diversification per cent it had gained following its December the quarter under review. issue size of ~8,812 crore. (~ crore) warrant attention quarter (Q3) results, published a day earlier. Here too, only the share of loans to micro, Indian Railway Finance Corporation, RIL -1,650 The 93 per cent growth in its loan book, small and medium enterprises (MSMEs) viz-a- Reliance Jio, Julius Baer Capital (India), ITC -1,050 helped by the acquisition of Gruh Finance viz non-MFI loans has risen 300 bps sequen- and Grasim Industries made applications SBI -920 under current conditions, is laudable. tially to 23.32 per cent. Important segments to list their CPs for an issue size of ~4,000 crore, ~1,750 crore, ~1,075 Asset quality appears reasonable, too. such as retail loans, as well as lending to MFIs crore and ~1,000 crore, respectively, the BSE said in a release. BPCL -610 However, investors should look beyond the and other non-banking financial companies, Besides, HDFC Securities, Shriram City Union Finance, and KEC SBI Life Insurance -600 headline numbers, as aspects such as provi- hasn’t changed much. International made applications to list their CPs for ~490 crore, Source: MOFSL sion coverage, loan book diversification, and In short, dependence of microfinance (MFI) ~477 crore and ~20 crore, respectively, it added. After the process, profitability do not hint at much strength. was static at 61 per cent of the overall loan book, the effective date of listing CPs will be January 16, it added. PTI At 1.93 per cent gross non-performing asset indicating that its diversification strategy may (NPA) ratio, bad loans have marginally risen by take longer to play out. 17 basis points (bps) sequentially, of which 15 The other important factor is the compres- bps was attributed to Gruh Finance’s portfolio. sion in net interest margin (NIM or profitability) However, provision coverage ratio or PCR to 7.9 per cent in Q3, from 8.2 per cent in Q2. dipped to 58 per cent in Q3 (lowest since list- While compression in NIM was anticipated ing), suggesting that there could be more after the Gruh merger, the decline seems to be stress in the coming quarters. happening faster than expected. Further, of the ~6,500-crore exposure to Assets under management grew at 2 per Assam (10 per cent of total loan book), cent sequentially, lagging the 11 per cent growth Bandhan Bank has provided for ~200 crore recorded in deposits, thus playing a part in NIM on a prudential basis, which is about 3 per shrinkage. cent of the total exposure. Analysts at ICICI Securities, who remain While collection efficiency improved to positive on Bandhan Bank, have downgraded 93.6 per cent in December from 78 per cent their earnings expectation by 3-4 per cent during the peak of the protest, news reports for FY20-22. don’t indicate complete normalcy returning “The recent situation in the north-eastern even now, which could make the lender vul- state with substantial exposure and integration nerable to further asset quality pressure of Gruh Finance is seen keeping the growth from Assam. trajectory moderate,” they add. Margin gains help Mindtree find its feet in Q3 Slow pace of new RAM PRASAD SAHU profit margins, too, came in the year-ago quarter to $207 better than what the Street had million, as clients have been contracts remains After underperforming signif- estimated. deferring decisions. icantly on the growth and mar- This was aided by large The renewal part of the a concern despite gin fronts in the September deals and stable contract pric- order inflow has been declin- revenue growth quarter, Mindtree put up a bet- ing. Earnings before interest ing over the last three quarters, ter-than-expected show in the and tax (Ebit) margins, which which could impact revenue December quarter. had dipped to 6.4 per cent in visibility, according to analysts It posted a 1.5 per cent the June quarter of FY20, rose at Nirmal Bang Research. sequential dollar revenue 276 bps year-on-year to 12 per Muted revenue growth at 2 growth, led by a strong uptick cent in the December quarter, per cent in the digital segment from its top clients, and thus driven by cost optimisation, is worrying, given that larger helped address concerns on increase in fixed-price con- peers such as Infosys have client attrition amid a manage- tracts, and a falling proportion posted better growth rates. ment transition. of low-margin accounts. Digital revenue, which The increase in share of The company indicated accounts for 38 per cent of revenues from project-based that margins would continue overall revenues, is at similar contracts to fixed-priced ones expanding on higher utilisa- levels to the one reported in is another positive. The share tion, offshoring, and lower the June 2019 quarter. of fixed-priced contracts sales and general administra- While improvements in increased by 280 basis points tion expenditure. The firm also margins were positive — help- sequentially to 59 per cent, in stuck to its revenue guidance ing the stock gain close to 2.8 line with the company’s strat- for the current financial year, per cent on Wednesday — egy to move towards annuity- at 8-9 per cent. further gains could be capped, type revenues. Among key concerns is the keeping in mind the sharp In addition to revenue slowing pace of new contracts. stock price movement since growth, the firm’s operating These declined 19 per cent over the start of December. MUMBAI | THURSDAY, 16 JANUARY 2020 THE SMART INVESTOR 9 . < High inflation may eat into Indices pause after 4-day winning run food firms’ pricing power Banking stocks slide on NPA woes, global cues

Consumer price inflation touching a six-year high indicates lower purchasing power PRESS TRUST OF INDIA Mumbai, 15 January SHREEPAD S AUTE and companies like Britannia Mumbai, 15 January could see some volume growth Benchmark indices Sensex and Nifty took a pressure in case of indirect price pause after a four-session record run on t a time of consumption hikes in the near term. Wednesday, as higher bank NPAs in ongoing slowdown in the coun- The biscuits category, main- quarterly results weighed on banking stocks, A try, the recent inflation ly in the economy segment, has coupled with caution ahead of the US-China print could worsen the situation been severely impacted by the trade deal. for food-based players in the slowdown. Though Britannia is At the closing bell, the Sensex was down fast-moving consumer goods benefiting from a higher share 79.9 points, or 0.19 per cent, at 41,872, while HITTING THE BRAKES (FMCG) sector, like Britannia in the premium segment, it, too, the Nifty closed 19 points, or 0.15 per cent, Sensex intra-day and Nestlé. felt the heat of muted consumer lower at 12,343. 42,000 Firms such as Hindustan demand. During April- Both indices — Sensex and Nifty — had 41,872.7 Unilever, ITC, Dabur, too, have REVENUE vs PROFITABILITY RISING PRICES, STRUGGLING STOCKS September 2019, average vol- closed at their life-time high levels for the sec- 41,900 food-based products but their nNet sales growth nEbitda margin (quarter ended in %) Nestle Britannia WPI All Commo. (YoY) % ume growth of the firm, on esti- ond day in a row on Tuesday. 41,800 Sensex 134.40 CPI Combined share is much lower in overall NESTLE BRITANNIA 140 8 mated basis, fell sharply to IndusInd Bank was the top loser in the 41,700 revenues. Inflation data for 7.35 around 3 per cent from 12 per Sensex pack, dropping 5.44 per cent. Other 4.26 41,952.6 December 2019 shows a further 120 6 cent in the corresponding peri- major laggards were Infosys, SBI, PowerGrid, 41,600 16.1 15.9 15.6 24.7 14.6 24.6 23.2 Jan 14,’20 Jan 15,’20 11.4 11.2 rise in the price of items like 10.5 od a year ago. Tech Mahindra, Bharti Airtel, and HDFC Bank. 10.1 9.5 9.0 19.0 100 4 5.9 wheat, milk, and sugar, which 5.9 Nestlé managed to report In contrast, Hero MotoCorp, Titan, Maruti, are key raw materials of the 100.81 80 2 double-digit revenue growth Asian Paints, M&M, TCS, Bajaj Auto, and BSE Bankex intra-day Dec Mar Jun Sep Dec Mar Jun Sep food-based FMCG companies. 100 2.59 during the period. UltraTech Cement closed on the winning side. 36,600 They account for around 55 per ‘18 ‘19 ‘18 ‘19 115.50 60 3.17 0 While some analysts expect Sectorally, BSE bankex, finance, telecom, 36,538.86 Ebitda: Earnings before interest, tax, depreciation and amortisation Jan 1,’19 Jan 15,’20 Jan 31,’17 Dec 31,’19 36,283.09 cent of total raw material costs Source: Companies and BS Research Bureau rural and also the overall energy and tech indices fell up to 0.70 per cent. 36,400 for such firms. Although these demand to revive owing to good On the other hand, consumer durables, real- firms have long-term supply consumption could make pric- hikes in the biscuit or similar hikes would hurt volume rabi crop and the government’s ty, auto, utilities, metal and healthcare indices 36,200 contracts and hedge for key ing power weak. Thus, manag- segments had led to a reduction growth of Britannia, given its welfare schemes, the jury is out rose up to 1.37 per cent. 36,000 inputs to protect margins, rising ing volume growth and protect- in volumes growth for compa- rural market exposure and seg- on this. Even though analysts In the broader market, the BSE MidCap and Jan 14,’20 Jan 15,’20 prices may make it difficult for ing margin is likely to be a tough nies, say analysts. ment which it operates (mainly consider Britannia and Nestlé SmallCap indices outperformed benchmarks, firms to maintain profitability task for food companies.” Companies like Britannia, biscuits). However, we believe strong long-term consumption rallying up to 1.04 per cent. without hurting volume growth. While Britannia is planning which have a relatively high Nestlé is better placed in terms plays, investors are recom- Analysts are of the view that overall market after higher-than-expected NPA numbers in Moreover, with consumer to increase prices to pass on the rural-revenue share (32-35 per of pricing power,” said Nitin mended to await clarity on mar- sentiment was also affected by comments from the recent Q3 bank results alongside very price inflation at a six-year high, input cost pressure, Nestlé has cent of total revenue), are Gupta, analyst at SBICAP gin and volume fronts. The a top US official that the trade truce with China, high consumer inflation, which may stay for this means lower purchasing already raised prices in some expected to be affected more Securities. stocks of Britannia at 45 times set to be signed on Wednesday, does not another month or two. The market would power of households and, categories, such as baby foods compared to those with more Dhaval Dama, analyst at its FY21 estimated earnings and include a deal to roll back tariffs imposed on watch the Q3 results & actual Budget for fur- hence, further impact. and milk segment, albeit mar- urban exposure. Nestlé is esti- Equirus Securities, too, echoes Nestlé at 62 times CY20 earn- most Chinese goods. ther direction.” Bourses in Shanghai, Hong According the Naveen ginally. However, history shows mated to earn 75 per cent of its a similar view. He said Nestlé ings (Nestlé follows January- Vinod Nair, head of research, Geojit Kong, Tokyo and Seoul ended on a negative Kulkarni, head of research at that hikes affect volume growth. revenues from urban areas. has better pricing power given December accounting period), Financial Services, said, “After the solid pre- note, while exchanges in Europe were off to Reliance Securities, “Sagging In 2013-14, for instance, price “In the slowdown, price a bigger portfolio of products aren’t cheap either. budget rally, market is getting a bit sceptical a tepid start. Canada opens door ‘India-dedicated money needs to wait for signs of uptick’ for Indian start-ups The emerging markets look attractive in 2020 from a valuation standpoint, says What is your take on the current Budget... SATISH BETADPUR, managing director & head of investments – India, State Street economic slowdown? Cutting corporate tax rates was a ASHLEY COUTINHO presence of Brampton’s Mayor Global Advisors. In an interview with Ashley Coutinho, on the sidelines of the CFA We are expecting India to do better good move. We are now reading Mumbai, 15 January Patrik Brown, who is interact- Society India’s 10th India Investment Conference, he says polarisation in Indian this year, and expect the banking about a personal income tax cut of ing with more than a dozen equities will continue until the investment climate changes and companies get back crisis to work its way through. We are some kind. It should have happened The Toronto Business Indian start-ups across their pricing power. Edited excerpts: going through a cathartic phase but earlier; hopefully, it will come Development Centre (TBDC) Mumbai, Delhi, and Bangalore. you had to fix all the non-performing through this time. It was a mistake and the City of Brampton have The Indian start-up ecosys- Do you think emerging market (EM) elections in the US, Brexit, and the assets. The bankruptcy law is a great last time to increase surcharge on the signed a memorandum of tem is one of the largest glob- investing could present a rewarding tension in the Middle East are cues exercise to get the money back. As super-rich because it gives a signal to understanding (MoU) with ally, with about 50,000 start- theme in 2020? to watch out for. The US Iran money from the big NPAs comes investors that this is a tax-and-spend CorpGini to aid Indian start- ups, growing at 12-15 per cent The emerging markets are trading standoff, though, seems temporary. back to the banking system, loan government. Not too many people ups that are looking to expand annually. India is also home to at attractive valuations and Both sides have pulled back and growth may pick up. Right now, we are in this bracket. So, the beyond India. The MoU will 31 unicorns (a valuation of expected to see a pick-up in we believe that the tensions may are not seeing loan growth because government may not get too much facilitate Indian start-ups to more than $1 billion). earnings growth. A not escalate much from nobody is confident of borrowing for money from this. Only focusing on a collaborate with Canadian cor- “The message we are try- stable dollar may here on. business. A clean-up of NBFCs may deficit target may not be the most porates and expand their oper- ing to send is that Canada is provide support as well. happen much more slowly. The prudent thing to do right now. Yes, ations in Canada. open for business and our Emerging markets How is India placed in accommodative interest rates will deficits need to be managed. When CorpGini is owned by the doors are wide open to Indian haven’t done well for a the EM pack? hopefully help kickstart the housing you have deficits with high growth, Pantomath Group and Z entrepreneurs. Our city has while and part of the SATISH BETADPUR Investors are generally seems to have been reached. If you segment, especially if housing loan you know eventually that the debt Nation Lab, and aims to con- among the largest Asian com- reason is China, which is MD, State Street positive on emerging believe that the bottom is reached, rates drop to around 7.5 per cent will be paid off. When you have nect corporates to innovative munities in Canada. We met a big part of the index. Global Advisors markets and India will then this may be a good time to levels. The RBI has been cutting rates deficits with no growth, that’s when start-ups, as well as imbibe some investment fund man- The country has seen get a portion of the select stocks with good but there has been no follow through you risk a downgrade from the rating learnings from the latter. The agers and Indian start-ups, excess capacity build-up and the money that is buying into EM fundamentals, robust balance by banks. Considering we are in a agencies. Between a corporate and TBDC is a start-up incubator and I would love to see them trade war does not help. It’s one of indices. Dedicated money from sheets and economic moats. There major slowdown, a revival in the personal income tax cut at some that offers advisory support to succeed in Canada. We are the large markets that saw negative quarter-by-quarter NAV-driven are opportunities for long-term banking and housing sectors will point, the economy will shoot up. effectively kick-start their com- confident that both Canadian returns in the past decade. This money managers may wait for players, which is why private benefit other sectors as well. The timing is unknown – it never is panies through a variety of tai- corporates and Indian start- year, the expectation is that Chinese visible signs of an uptick. At this transactions are picking up, and known for any country. lored programmes. ups would gain with this col- earnings growth will pick up. point, we don’t have a clear sign of private equity players are picking up Any expectations from The MoU was signed in the laboration,” said Brown. Overall, the US-China trade wars, an uptick although the bottom sizeable stakes in companies. the government in the upcoming More on business-standard.com

COMMODITIES1 > MANDATORY HALLMARKING BIS notifies ‘good delivery’ Centre exempts gold guidelines for gold, silver

RAJESH BHAYANI Association standards. them implemented.” Mumbai, 15 January This is possible only in imported India’s gold import is around 700- jewellery below 2gm gold. The 30-plus good refineries in 750 tonnes annually since the last The Bureau of Indian Standards (BIS) India that are refining 280 tonnes of couple of years. Of this, 280 tonnes on Wednesday announced Indian gold per annum (refined from or 40 per cent is unrefined dore gold. > RAJESH BHAYANI standards for 32 items and proce- imported dore or unrefined gold) are And, that part cannot be delivered PRICE CARD Mumbai, 15 January dures, including gold and silver. This not considered good delivery when on the MCX and other bourses such means that the commodities in the sold on the stock exchanges. as the BSE and NSE. When cinders The government has exempted gold jewellery list, including the bullion, will be Defining Indian standards for sell old jewellery that also comes for As on Jan 15 International Domestic and artifacts below 2 grams from mandatory hall- treated according to BIS standards gold and silver will now make it ‘good refining, that market is 200 tonnes ------Price %Chg# Price %Chg# marking. Through a Gazette Notification issued and be considered a ‘good delivery’. delivery’. The Securities and per annum. If a jeweller is buying on Wednesday by the Union Ministry of Indian standards for gold and silver Exchange Board of India (Sebi) has back this gold from refineries, he may METALS ($/tonne) Consumer Affairs, Food and Public Distribution, were applicable from December 28, to just permit this and it looks like accept the bullion that is not meeting mandatory hallmarking has been made applica- 2019. They happen to be the most just a formality now. Indian standards. However, for all Aluminium 1,767.5 3.8 2,047.4 7.7 ble pan-India from 15 January, 2021. debated ones in the list. James Jose, secretary, Association these, regulations by a prospective Copper 6,247.0 8.7 6,594.2 10.2 Silver jewellery and articles have been exempt- India is import dependent on gold of Gold Refineries and Mints, said, regulator will be crucial. ed from this requirement as of now. and to a great extent for silver. “India’s ‘good delivery’ standards A few years back, industry par- Zinc 2,364.0 -3.0 2,612.3 -1.1 All jewellers wanting to sell gold jewellery have However, stock exchanges where have now been announced. Now, we ticipants prepared details on regula- Gold ($/ounce) 1,551.9* 4.8 1,741.6 4.1 to obtain the BIS registration. As of now, less than gold and silver are traded in deriva- need an autonomous regulator to tions and who should regulate 28,849 jewellers have registered with the Bureau tives, including MCX, accept gold ensure proper implementation and refineries. The Centre will have to Silver ($/ounce) 17.8* 2.4 20.2 1.4 of Indian Standards (BIS). Of these, nearly 3,000 GOLD SPOT which meets London Bullion Market the regulator should have teeth to get now take a call on this. ENERGY jewellers registered in the past three months, on | Mandatory hallmarking made applicable expectations of hallmarking becoming manda- across India from January 15, 2021 Crude Oil ($/bbl) 64.9* 11.1 65.3 9.4 tory. However, the total number of jewellers is | All jewellers wanting to sell gold jewellery Natural Gas ($/mmBtu) 2.2* -7.7 2.2 -8.0 several times higher. Jewellers with jewellery have to obtain BIS registration which is not hallmarked have to clear their stock Dual pricing policy for sugar sought AGRI COMMODITIES ($/tonne) within a period of one year. Only 14, 18, and 22 | Only 14, 18, and 22 carat jewellery permitted to be sold Wheat 197.3 15.5 319.7 10.5 carat jewellery can be sold. Gold jewellery of any other purity standard cannot be put up for sale. | Exemption list includes articles for exports DILIP KUMAR JHA markets due to lower production increasing while kitchen use is Maize 194.0* 7.2 336.6 14.7 “Existing hallmarking centers have enough not required to be hallmarked Mumbai, 15 January estimates in India and improving decreasing because of lower direct Sugar 390.9* 12.5 493.6 0.7 hallmarking capacity to hallmark all the jewellery prospects for exports. With this sugar intake. manufactured in India. These centers are running The Commission for Agricultural increase, sugar M at the factory gate “High prices for corporate con- Palm oil 777.5 49.5 1,260.2 48.3 only at 10-15 per cent of their capacity. 10-12 hubs to be hallmarked. Costs and Prices (CACP) has recom- in Uttar Pradesh is quoted between sumers would help sugar mills Cotton 1,553.4 10.9 1,643.8 2.4 in the country are making 80 per cent of jewellery “The hallmarking law for 14,18, and 22 carat mended that the government frame ~33-34.50 a kg, while sugar S in increase their incomes, which where hallmarking centers are present,” said should only apply for selling jewellery, and not a dual pricing policy for sugar trade Maharashtra is traded at around ~32 would translate into fast clearance * As on Jan 15, 20 1800 hrs IST, # Change Over 3 Months Conversion rate 1 USD = 70.8& 1 Ounce = 31.1032316 grams. Harshad Ajmera, president, Indian Association for manufacturing jewellery. Customers should for the benefit of farmers. a kg. The government has set the of cane dues. With this, farmers Notes: of Hallmarking Centres. The notification gives be permitted to convert jewellery of any carat “It is high time the government minimum selling price of sugar at would be encouraged to grow more 1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE and Coffee Karnataka robusta pertains to previous days price. some exemptions, such as for articles meant for when they bring in their old jewellery or bul- considered dual pricing of sugar ~31 a kg across the country. cane, which has yielded higher 2) International metal are LME Spot prices and domestic metal are Mumbai local spot export that conform to any specification required lion. Forcing customers to convert new jew- with a reasonable price for kitchen According to industry sources, income than most other agricultural prices except for Steel. 3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket. by the foreign buyer, articles with weight less ellery of minimum 14 carat will hit a poor per- consumers and high prices for corporate or bulk consumers, products,” said Suresh Rana, sugar- 4) International Natural gas is Nymex near month future & domestic natural gas is MCX near month futures. than two grams, articles intended to be used for son’s pocket the most, who otherwise could industrial users, depending upon including cold drink and sweets cane minister of Uttar Pradesh. 5) International Wheat, White sugar & Coffee Robusta are LIFF E future prices of near month contract. medical, dental, veterinary, scientific, or industrial have opted for even lower caratage by accu- the cost of production and availabil- makers, in addition to other bulk ICRA in a study estimated sugar 6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM near month purposes, and articles of gold thread. Gold bullion mulating coin/bullion or old jewellery,” said ity,” said Vijay Paul Sharma, chair- users, account for about 60 per cent mills’ profitability to improve in the future and Palm oil is Malaysia FOB spot price. 7) Domestic Wheat & Maize are NCDEX future prices of near month contract, Palm oil & in any shape — bar, plate, sheet, foil, rod, wire, Surendra Mehta, national secretary, Indian man of the CACP, while speaking at of India’s sugar consumption of an near term on the back of ~2 per kg Rubber are NCDEX spot prices. 8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot price. strip, tube, or coin — have been exempted. The Bullion Jewellers Association. Penalty for vio- the Sugar Conclave 2020. estimated 26 million tonnes (mt) increase of average sugar prices to 9) International cotton is Cotton no.2-NYBOT near month future & domestic cotton is MCX exemption list also includes incomplete articles lation of the BIS Act and Notification will be Sugar prices have jumped mar- annually. Most importantly, indus- ~32.5-33 a kg for the nine-month Future prices near month futures. Source: Bloomberg Compiled by BS Research Bureau and articles for exports which are not required as prescribed by the Act. ginally by ~1-2 a kg in the wholesale trial consumption of sugar is period ended December. MUMBAI | THURSDAY, 16 JANUARY 2020 WORLD 13 . < US, China sign the deal Russian PM resigns with govt DOW, NASDAQ HIT WALL STREET’S ‘FEAR THIS IS A MOMENTUS as Putin warns of a global war RECORD HIGHS INDEX’ AT LOWEST THIS YR STEP FORWARD: TRUMP Move comes after REUTERS prez proposed a Washington, 15 January “THE DEAL WILL series of reforms he United States and BRING...HARMONY, China announced an ini- PROSPERITY, AGENCIES Ttial trade deal on Moscow, 15 January Wednesday that will roll back COMMERCE AND some tariffs and boost Chinese MUCH MORE Russia’s government resigned purchases of US goods and BETWEEN THE US in a shock announcement on services, defusing an 18-month Wednesday after President conflict between the world’s AND CHINA...IT Vladimir Putin proposed a two largest economies. WILL LEAD TO EVEN series of constitutional reforms. Beijing and Washington STRONGER WORLD In a televised meeting with have portrayed their “Phase 1” the Russian president, Prime agreement as a momentous PEACE.” Minister Dmitry Medvedev said step after months of start-stop DONALD TRUMP the proposals would make sig- talks punctuated by tit-for-tat PRESIDENT, the US nificant changes to the coun- tariffs that uprooted supply try's balance of power and so chains and stoked fears of a fur- "the government in its current Russian President Vladimir Putin with outgoing PM Dmitry Medvedev in Moscow PHOTO: REUTERS ther slowdown in the global form has resigned". economy.US markets, including differences that led the Trump Putin asked Medvedev, his flicts in West Asia can trans- There is a serious need for a nate the reasons that can cause the Dow and Nasdaq, hit record Impeachment articles forwarded to administration to start the trade longtime ally, to continue as head form into a global war. "The conversation about the stabil- a war," he said. highs in intra-day trade. The war in the first place. of government until a new gov- regional conflicts can rapidly ity and security of the world He added that new weapons Wall Street’s Fear Index also hit a Senate; trial may begin next week They include Beijing’s long- ernment has been appointed. transform into threats to the order. The five nations systems would protect Russia's year’s low. “This is a momentus Four weeks after the US Congressman Adam standing practice of propping Putin warned regional con- international security. (...) (nuclear states ) have to elimi- security “for decades ahead.” step forward,” said Trump. House of Representatives Schiff, chairman of the up state-owned companies, “Together we are righting and flooding international mar- the wrongs of the past and impeached President Permanent Select kets with low-priced goods. delivering a future of econom- Donald Trump, Speaker Committee on Intelligence, Trump, who has embraced ic justice and security for Nancy Pelosi on Wednesday has been named as the lead an “America First” policy aimed Sikhs a separate ethnic group in US census American workers, farmers and named managers for the manager. at rebalancing global trade in families,” US President Donald Senate trial, which is likely to The trial is likely to begin favor of US companies and PRESS TRUST OF INDIA the United States,” he said. Trump said , as he touted the begin next week. on January 21. PTI workers, said China had Washington, 15 January Describing this as a mile- deal in rambling, partisan pledged action to confront the “It's clear that a separate code is stone, the United Sikhs said remarks at the White House problem of pirated or counter- For the first time, Sikhs in the needed to ensure an accurate that this will be the first time alongside Chinese Vice Premier chases in 2017. billion in additional US servic- feited goods, and that the deal US will be counted as a sepa- count of Sikhs in the US, the minority group will be Liu He and other officials. The deal would include $50 es, $75 billion more in manu- included strong protection of rate ethnic group in the 2020 recognising a unique identity” counted and coded in the The centerpiece of the deal billion in additional orders for facturing goods, and $50 billion intellectual property rights. census, an organisation of the RON JARMIN decennial US Census. is a pledge by China to pur- US agricultural products, more worth of energy supplies. Trump said he would agree minority community said on A delegation of the United Deputy Director, US Census chase at least an additional Trump said, adding he was con- Officials from both coun- to remove the remaining tariffs Tuesday, describing it as a Sikhs has held several meet- $200 billion worth of US farm fident that US farmers would tries have touted the deal as once the two sides had negoti- milestone moment. ings with the US Census in products and other goods and be able to meet the greater ushering in a new era for US- ated a "Phase 2" agreement. He Baljeet Singh, , president nity's efforts have come forward nationally not only the recent past, with the last services over two years, over a demand. He also said China Sino relations, but it fails to added that those negotiations of the Sikh Society of San to fruition. for the Sikh community, but one being on January 6 in baseline of $186 billion in pur- would buy $40 billion to $50 address many of the structural would start soon. Diego, said the Sikh commu- “This has paved the way also for other ethnicities in San Diego. What’s the price of getting your data? More data A new California privacy law gives consumers the right to see and delete their data. But getting access often requires giving up more personal details. KASHMIR HILL them for information that California, 15 January only they should know, such as the invoice number on a The new year ushered in a recent bill. landmark California privacy “Regulators need to think law that gives residents more more about the unintended control over how their digital consequences of empower- data is used. The Golden ing individuals to access and State isn’t the only benefici- delete their data,” said Steve ary, though, because many Kirkham, who worked on companies are extending the Airbnb’s trust and safety protections — the most team for five years, before important being the right to founding Berbix in 2018. “We see and delete the personal want to prevent fraudulent data a company has — to all requests and let the good their customers in the ones go through.” United States. It is on regulators’ minds. In the fall, I took the right The California law requires of access for a test drive, ask- businesses to “verify the ing companies in the busi- identity of the consumer ness of profiling and scoring making the request to a rea- consumers for their files on The right to have access to photoshopping each other’s sonable degree of certainty” me. One of the companies, personal data is enshrined in government ID. In one case, and to have a more stringent Sift, which assesses a user’s the new California Consumer Mr. Di Martino received the verification process for “sen- trustworthiness, sent me a Privacy Act. The law is mod- data file of a complete sitive or valuable personal 400-page file that contained eled in part on privacy regu- stranger whose name was information.” years’ worth of my Airbnb lations in Europe, known as similar to that of Mr. Robyns. Mr. Kirkham said Berbix messages, Yelp orders and the General Data Protection Both sets of researchers requested the first selfie to Coinbase activity. Soon after Regulation, or G.D.P.R. Soon thought the new law giving test whether a person’s face my article was published, Sift after Europe's law went into the right to data was worth- matched their ID; the second was deluged with over 16,000 effect, in May 2018, a hacker while. But they said compa- selfie, with a smile or some requests, forcing it to hire a gained access to the Spotify nies needed to improve their other facial expression, vendor to deal with the crush. account of Jean Yang, a tech security practices to avoid ensures that someone isn’t That vendor, Berbix, executive, and successfully compromising customers’ simply holding a photo up to helped verify the identity of filed a data request to down- privacy further. the camera. Mr. Kirkham said people requesting data by load her home address, cred- “Companies are rushing Berbix ultimately deleted the asking them to upload photos it card information and a his- to solutions that lead to inse- data collected within seven of their government ID and tory of the music she had cure practices,” Mr. Robyns days to a year, depending on to take a selfie. It then asked listened to. said. Companies employ dif- the retention period request- them to take a second selfie Since then, two groups of ferent techniques for verify- ed by the company that hires while following instructions. researchers have demon- ing identity. Many simply ask the firm. (Sift deletes its data “Make sure you are looking strated that it’s possible to for a photo of a driver’s after two weeks.) happy or joyful and try again” fool the systems created to license. Retail Equation, a “It’s a new threat vector was one such command. comply with G.D.P.R. to get company that decides companies should consider,” Many people who read the someone else’s personal whether a consumer can said Blake Brannon, vice article about my experience information. make returns at retailers like president of product at were alarmed by the infor- One of the researchers, Best Buy and Victoria’s OneTrust, another company mation that Berbix asked for James Pavur, 24, a doctoral Secret, asks only for a name that helps businesses comply — and the need to smile for student at Oxford University, and driver’s license number. with the new data privacy their secret file. filed data requests on behalf The wide array of compa- laws. OneTrust offers the “This is a nightmare of his research partner and nies now required to hand 4,500 organizations using its future where I can’t request wife, Casey Knerr, at 150 com- over data, from Baskin service the option to create my data from a creepy shad- panies using information Robbins to The New York several levels of identity ver- ow credit bureau without that was easily found for her Times, have varying levels of ification, such as sending a putting on a smile for them, online, such as her mailing security expertise and expe- token to someone’s phone or and it’s completely insane,” address, email address and rience in providing data to verifying ownership of an Jack Phelps, a software engi- phone number. To make the consumers. email address. neer in New York City, said in requests, he created an email Companies such as Apple, “If I’m requesting some- an email. address that was a variation Amazon and Twitter can ask thing simple or lightweight, the “It just seems wrong that on Ms. Knerr’s name. A quar- users to verify their identity verification is minimal, versus a we have to give up even more ter of the companies sent him by logging into their plat- deletion request,” Mr. Brannon personal information,” wrote her file. “I got her Social forms. All three give a heads- said. “That will require more another reader, Barbara Security number, high school up via email after data is levels of verification.” Clancy, a retired professor of grades, a good chunk of infor- requested, which can help Mr. Kirkham of Berbix said neuroscience in Arkansas. mation about her credit warn people if a hacker got the verification process dis- That’s the unpleasant card,” Mr. Pavur said. “A access to their account. An couraged some people from reality: To get your personal threat intelligence company Apple spokesman said that making the data request at all. data, you may have to give up sent me all her user names after a request is made, the “A lot of people don’t want more personal data. It seems and passwords that had been company uses additional to give more information,” Mr. awful at first. Alistair Barr of leaked.” Mariano Di Martino methods to verify the person’s Kirkham said. “Their assump- Bloomberg called it “the new and Pieter Robyns, computer identity, though the compa- tion is that you will do some- privacy circle of hell.” science researchers at Hasselt ny said it couldn’t disclose thing nefarious with it.” But there’s a good reason University in Belgium, had those methods for security He added: “But that’s the for this. Companies don’t the same success rate when reasons. irony here. We require addi- want to give your data away they approached 55 financial, If consumers can’t verify tional information from peo- to the wrong person, which entertainment and news their identity by logging into ple to protect them. We want has happened in the past. In companies. They requested an existing account, Mr. Di to make sure you are who you 2018, Amazon sent 1,700 each other’s data, using more Martino and Mr. Robyns rec- say you are.” audio files of a customer talk- advanced techniques than ommend that companies ing to his Alexa to a stranger. those of Mr. Pavur, such as email them, call them or ask © 2019 The New York Times MUMBAI | THURSDAY, 16 JANUARY 2020 BRAND WORLD 21 . < Voot follows the money on the OTT trail Viacom 18 bets on reality shows and regional content as it switches over to a paid viewership model, but can it match the engagement power of the giants?

SOHINI DAS regional content and reality MUMBAI, 15 JANUARY television shows. “The strate- gy may ensure that Voot iacom18’s video stream- becomes a profitable OTT ing platform Voot is platform in a year’s time as it Vslowly building a sub- has not been burning cash,” scriber base and a robust part- the analyst notes. ner ecosystem as it moves from “Close to 60 per cent of new free to paid viewership on its users come on the back of real- platform. To that end it says, ity shows, but 70 per cent of our the team has worked to consumption happens on the improve the quality and pro- back of non-reality content,” duction values of its shows Banerji says. Big Boss’s latest while expanding the multi-lin- season, for example, has gual reach of its content library. already had one billion views However, the challenge will be (in Hindi alone), the season to match the fare from Amazon began in October 2019. Prime and Hotstar as also stand Voot is also betting on up to the urban pull of Netflix. regional content. Last year it Voot’s transition from an launched Voot Telugu while advertising-based video on Colours (a Viacom18 property) demand (AVoD) to a subscrip- does not yet have a Telugu tion-based video on demand channel. Regional content (SvoD) platform will happen by contributes close to 25 per cent March 2020. It ended 2019 with of Voot’s total consumption at 100 million monthly active present and more than 60 per users (MAUs) and over 100 bil- cent of its audience comes lion minutes of watch-time on The platform is betting on flagship reality shows such as Big from tier II and III cities. its platform. Boss (Top) and Telugu shows such as Feet up with the stars Around 23 per cent of moneti- MAUs are a universally (Bottom) to make the transition to a subscription-led service sation is coming from regional, upheld data point that various Banerji says. OTT platforms use to convey viewers across SVoD and AvoD is the Holy Grail and, he adds, The reliance on reality and the extent of their reach and platforms in India, slated to “We have a 36 per cent DAU- regional is expected to create while none give out an official touch 500 million by the end MAU ratio at present which is stickiness on the platform, but figure, most claim a much high- of 2020. Of these, around 10-15 the best among AVoD plat- does Voot eventually intend to er number of viewers than 100 million are unique paid sub- forms.” he says. acquire content from outside million a month. Akash Banerji, scribers who drive 20-30 mil- Analysts believe Voot has its network? Banerji is clear. business head–VOOT, AVoD lion subscriptions (one sub- played its cards smartly. “It is a “We focus on content on our says that MAU is a myth. “If 100 scriber may have multiple network backed OTT platform platform that would increase users come online on one plat- subscriptions). It is estimated and hence has access to the net- engagement and get me audi- form, 90 per cent of them un- that by the end of 2020, there work content. It started off with ences who I can monetise,” he install the app from the phone would be 20-25 million unique some original shows, however, says. So content acquisition is or, do not even open the app. paid subscribers driving 40-50 they were quick to realise that an ‘also’ strategy for Voot, What is important is the million subscriptions. the focal point should be to he adds. engagement or average time At Voot, Banerji says they ensure consumer stickiness Voot has tied up with spent. If that is not growing or have been focussing on time without burning cash. Content Xiaomi’s Mi TV, LG, Samsung stable, the number becomes a spent and frequency of visits acquisition is an expensive and Sony. It has also forged vanity metric,” he says. on the platform. The daily business and to compete with partnerships with MXPlayer, Voot is banking on the huge active user (DAU) versus the the Netflix and Amazon Prime Flipkart and some broadband potential for growth that the MAU ratio, which essentially is not easy,” says a Mumbai- operators and telecom opera- over the top (OTT) category means if 100 people come on based analyst tor, Airtel. Now to get viewers to shows in India. Overall there the app every month, how Voot has thus chosen to pay for what they see, and then are 300-315 million odd video many of them come every day focus on its portfolio of come back for more.

> FROM PAGE 1 announce his arrival on Twitter on Tuesday. is fundamental to how we do business at The tweeted picture of Bezos paying respect JPMorgan.” Sources said ED had interro- to Mahatma Gandhi at Rajghat on a “beau- gated JPMorgan’s former nominee direc- Bezos... tiful afternoon’’ soon after landing in India tors, who were on board of two companies had gone viral in no time. Amrapali Zodiac and Amrapali Silicon City. “I make one more prediction for you: In this “True leaders are like this... Such a pow- If required, the probe would reach out to 21st century, the most important alliance is erful person, but so humble,” middle-aged more executives of the foreign firm. During going to be the alliance between India and businessman Prateek Sharma said when the FEMA probe, developers had attributed the US,” Bezos added. The firm aims to digi- asked about Bezos. Sharma was not alone, the jump in value of premium to the terms tise 10 million MSMEs with the proposed his euphoric reaction was echoed by most and conditions of the share subscription investment. In addition to providing train- who had paid a steep ticket price to attend agreement between JPMorgan and the ing and enrolling MSMEs into its pro- the event. The idea of a start-up founder- Amrapali Group. The foreign investors grammes, Amazon will help them work on turned-global tycoon criss-crossing indus- would be entitled to dividend at the rate of cloud technology through specialised tries as varied as retail, media, and space 25 per cent of the distributable profit. Amazon Web Services offerings at low costs. exploration had indeed struck a chord with ED argued that the newly incorporated It will also establish 100 “digital haats’ in the aspiring crowd, especially in the back- firm had no track record of earning sub- cities and villages throughout India. drop of an economic slowdown. stantial distributable profit in the first year of Amazon has invested $5 billion in India Onlookers compared the Amazon event operation (2010) and that there was no earn- in the past five years. The e-commerce plat- with Google India’s flagship do at the same ing of such profit even at the time when form also announced plans to support local venue last September. While the Google investment in shares by the foreign investors neighbourhood shops and kiranas. It will event was on time and had better queue was made. “These have further proved that expand its Amazon Easy programme. The management as well as WiFi for all, even the investor (JPMorgan) has not acted kirana shops will be able to set up kiosks to Amazon’s Smbhav was high on theatrics as prudent businessman and has purchased provide assistance to customers in choosing even as traders’ association CAIT stated shares at steep premium for the reason oth- the right product, placing an order and earn- there were protests against online deep dis- er than business consideration and for ing commission on sales. It also plans to counting across 300 locations. oblique purpose,” ED said. expand its ‘I Have Space’ programme. Almost oblivious to the traders’ protest, Bezos lit the ceremonial lamp, folding his hand in obeisance, after a 25-minute fireside Jet... Murthy... chat with Amazon country head Amit Agarwal. Once Bezos had spoken and real- On its part, the civil aviation ministry has He shut off his microphone exactly 5 min- ism had dawned, Rajesh, owner of a small said it will decide on returning domestic utes later. The visitors, who made it to the fashion boutique in Jaipur, said, “this event slots to Jet on submission of a concrete busi- venue early morning for Smbhav, a mega gives me an opportunity to visit Delhi, noth- ness plan. Jet’s Chief Strategy Officer Rajesh summit of small and medium businesses ing else. Asking more small sellers to regis- Prasad said investment in the airline would (most of them partners of the American e- ter may not be a good idea when existing be attractive under the insolvency frame- commerce firm), couldn’t be sure if Amazon ones like us aren’t getting enough business.” work. “There is significant embedded value CEO Jeff Bezos was going to show up. Then there were other sellers who pointed in the aircraft and the new owner will also Amazon India, hosting the event, had kept out their products were not getting eyeballs get inventory and spares,” said Prasad. Bezos’ itinerary under wraps. It’s a differ- in the large marketplace platform, and wait- Jet shut operations on April 17 last year. ent matter that while the Seattle-headquar- ed to speak to Amazon about it. It was admitted under the insolvency tered e-commerce giant remained tight- Amazonians are not ready to admit there’s process in June. EoIs have been invited lipped, Bezos broke the protocol to a glut of sellers. They would rather repeat twice and the bid submission deadline what Bezos said in his address: extended, but there is no resolution plan the 21st century belongs to India. from suitors as yet. > BS SUDOKU # 2948 Amrapali... BlackRock... The allotments were made to pro- It is in this category that thermal power gen- moters — Ultra Homes (7,500 erators like NTPC and Adani Power could shares) and Amrapali Homes face risk. In addition, BlackRock’s alterna- (2,500 shares). In less than a year, tives business will make “no future direct the authorised share capital was investments in companies that generate increased to 1 million equity more than 25 per cent of their revenues from shares and allotted to promoters at thermal coal production”. a premium of ~180 per share. According to a report of the Institute for Shares of Amrapali Zodiac Energy Economics and Financial Analysis from JPMorgan were ultimately (IEEFA), the announcement could mean purchased for ~140 crore by firms like China Shenhua, China National Neelkanth Buildcraft and Coal Group, CIL, Adani Enterprises, Rudraksha Intracity — shell firms Peabody Energy, Arch Coal, Contura Energy, owned by a peon and an office CONSOL Coal Resources LP, PT Bumi boy connected with an executive Resources, Whitehaven Coal, New Hope of Amrapali. In an email response Corp, and Yancoal Australia are up for SOLUTION TO #2947 to this newspaper, JPMorgan immediate review and likely divestment. Medium: India spokesperson said, BlackRock will then scrutinise sectors  “JPMorgan is not a party to the heavily reliant on thermal coal as an input. Solution Supreme Court proceedings, and “That will likely see divestment of a much tomorrow it has received no communication wider range of firms, like KEPCO, TEPCO, or notification from the Supreme Duke Energy, RWE, Southern, NTPC, and HOW TO PLAY Court to date. It appears that news Adani Power, and will also include Chinese Fill in the grid so reports are referring to invest- power utility majors such as China Huaneng that every row, ments and exits that were made Group, China Datang Corp, China Huadian every column by offshore real estate funds. Corp, State Power Investment Corp and and every 3x3 Compliance with applicable laws, China Energy Group,” said IEEFA. box contains regulations, and policies, includ- the digits 1 to 9 ing foreign direct investment rules More on www.business-standard.com 22 PERSONAL FINANCE MUMBAI | THURSDAY, 16 JANUARY 2020 > Video KYC will make life simpler Will SBI’s loan

coordinates, and other watermarking. In short, While it will be consent-based, banks will need to put in strict security to protect data the complete interaction is recorded over the revive trust? video, and is tagged with relevant details. The BINDISHA SARANG entire process takes up to five minutes. the developer defaulted on his obligations to the oon, you may be able to open a bank Safety and security: Security is a concern for banker. account within minutes. With the most. Says Desai: “All of this has to be hosted The government, finally, Reserve Bank of India (RBI) expanding on the servers of the bank. That is very critical woke up, and the Real Sthe scope of doing Know Your Customer data, and hence it cannot be on a third-party Estate Regulation Act (KYC) procedure through video (V-KYC), there server.” Says a Pune-based cybersecurity expert: (Rera) was enacted. is a possibility that the long process – usually “Videos require more space on the server. Banks However, its implementa- three to five days working days – will be reduced will need to ramp up their storage capacity dra- tion has been stymied by to a few minutes. Says Ankush Aggarwal, matically.” Ritesh Bhatia, another cybersecurity various states which made founder of Avail Finance: “The RBI’s announce- expert, echoes the same view: “Video KYC, regulations that were com- ment of video-based KYC (V-KYC) will provide while convenient for customers, will put a lot FRANKLY pletely contrary to the law, a boost to the financial services industry.” of responsibility and burden on banks and other SPEAKING and in practice, did not And the good thing is that the central bank organisations. Validating the location, the pic- implement even the weaker has decided to permit video-based Customer ture, and authenticating the documents will HARSH ROONGTA state-level regulations. Identification Process (V-CIP) as a consent- require banks and non-banks to have the latest Consequently, Rera has not based alternative method of establishing the technologies. Before the concerned entities ini- Once upon a time, when all led to a revival of buyer’s customer’s identity. So, if you are not comfort- tiate the video KYC, they should test it thor- was hunky-dory, things trust in under-construction able, you can always opt out. oughly, especially against risk of attacks, and were simple for developers. properties. However, there are several reasons why run awareness campaigns.” They just needed to State Bank of India’s lat- financial institutions will push this form of KYC. announce a project and est effort—the Residential First, it saves money. Says Rudrajeet Desai, V-KYC process is backed only by facial buyers would line up to buy Builder Finance with Buyer founder and CEO, Workapps, which runs the recognition: Says Joshi: “If banks are going to them, financed by banks Guarantee scheme (RBBG) product VideoKYC.com: “Physical KYC costs deploy photo-matching tools, it would be inter- willing to provide cheap —should be studied against around ~250-300 per instance. V-KYC will cost VIDEO-RECORDED WILLS ARE ADMISSIBLE esting to see if current photos and identity pho- loans. The developer, then, this backdrop. The borrow- less than 10 per cent of that amount.” Second, tos don’t throw false positives.” From a security would take his sweet time er will be protected in case physical KYC takes anywhere between two to nIn 2009, the Delhi nHowever, a nThe video nIt is possible to nFor making a point of view there are many positives. “You in delivering the project. of delay in construction five working days to get done, V-KYC, only a High Court ruled physical copy recorded make a video will, the Indian cannot use the same video for two different Buyers did not like the beyond the date of comple- few minutes. that video recording of the will has is an recording of the Succession Act KYCs; you will anyway have to do KYC per delay, but rising real estate tion mentioned on the Rera Most importantly, as Aggarwal, puts it, of a will is legally- to be recorded additional entire process of has to be organisation only once. The video will be tagged prices made the website. The “Previously, e-wallet players and non-banks admissible evidence as well evidence execution of a Will followed into the banking system for a particular pur- delay worth their In SBI’s scheme, interest during were denied access to the Aadhaar system, pose, and it will be straightforward for banks to while. Even the buyer pays the construction only the down restricting their ability to use e-KYC to complete nThe video is supposed to show that the maker was in sound mind, and acted without recognise that this video-recording was done banks did not period is payable customer verification, increasing their compli- for this particular purpose,” says Desai. complain too payment. The only by the ance burden. The decision comes as a major any coercion, influence, or duress Source: Makemywill.in much, as they developer pays developer (with- relief to fintech start-ups and digital non-bank- Concerns galore: Banks will face many chal- earned interest the interest out any liability ing financial companies (NBFCs) catering to the database, in the meanwhile. On submitting the sition form (CAF) number, agent name, and lenges. For instance, Live Deepfake is an AI- income from during the on the part of gig economy with the new remote customer form, you will get an option to complete the agent code. Says Desai: “The agent then com- based technology used to produce or alter video borrowers, both construction the buyer to pay authentication option.” The service providers video KYC. This will allow the bank’s agent to pares the customer’s photo with the photo content to look and sound like the real thing. during the con- period even if the need not physically reach out to customers in contact you.” obtained from UIDAI via face recognition soft- Says Bhatia: “Fraudsters will try to call cus- struction period developer remote locations. It will cut down costs and The agent will initiate a video call with you, ware. The customer will show the camera his tomers for video KYC and could end up defraud- and after delivery. The defaults). If the developer is prove a boon to companies targeting rural cus- which will be recorded live. The bank will pass PAN card. The agent will take a photograph, ing them, as happens currently. Also, banks now developer pocketed a neat unable to complete the tomers and millennials with the use of face- the photograph and details obtained from and then validate the PAN as well. Once this is have a big responsibility to safeguard our videos profit and went on to the project by the scheduled matching software and artificial intelligence. UIDAI on the chat screen. Says Desai: “The verified, the agent asks the customer to sign a because they could be misused if leaked or next project. Everyone was completion date, the buy- V-KYC will also prevent confusion and agent will take a screenshot of the customer’s blank piece of paper, take a screenshot of that, stolen. Encryption of data is critical.” Mutual happy. er’s down payment is issues later. You will only need to fill in the face from the live video, which will be water- and tag it as the customer’s signature.” The funds already have this option. To invest more The circle broke when returned with interest by online form on your lender’s website or app to marked with details like date and time stamp. image will also be watermarked with CAF num- than ~50,000 in mutual funds, you have to com- real estate prices stopped the lender. In case the con- apply for opening an account or for a loan. You Also, Geotagging will be done where the live ber, GPS coordinates, agent name, agent code, plete KYC at a branch, or complete in-person rising. Most developers struction is completed by will have to mention your Aadhaar number on location of the customer is captured to ensure and the date and time stamp. A screenshot of verification through video KYC, according to started delaying their proj- the developer within the the form. Says Desai: “The lender will retrieve that he is physically present in India.” the customer’s face and a signature will be the Security and Exchange Board of India ects inordinately. This led scheduled time, then the your details and photographs from the UIDAI Other details will include customer acqui- copied in the online CAF along with the GPS guidelines. to buyers/borrowers loan shifts to the buyer and defaulting on their commit- becomes a standard home ments to lenders. The loan. A standard product lenders, in turn, had to pro- like this needs the backing BUDGET: vide for rising non-per- of Reserve Bank of India. ~1.5 CRORE -~2 CRORE forming assets. The virtu- Such a scheme is likely Book some profit in gold ous circle turned into a to build borrower trust in into gold,” says Narne. Within vicious one where the buyer under-construction proper- REALTY The rally may India, the rupee has did not trust under-con- ty. It will also give a much- depreciated and may struction projects and needed fillip to the con- CHECK continue for continue to do so due to insisted on completed proj- struction industry with its some more time weakening economic ects. Developers started vast employment genera- Business Standard brings you a snapshot of average fundamentals. innovating. So, 20:80 tion capabilities and posi- current rates and unit sizes in localities that offer due to global A few inhibiting factors schemes came into being, tive externalities on a host property in the price range of ~1.5 crore and ~2 crore. headwinds could, however, come into but borrowers soon discov- of industries such as If you are looking at buying real estate, an idea about play that may temper the pace ered there were clauses hid- cement, steel and others. prevailing rates would come in handy of price rise in future. The first den in the contract that SANJAY KUMAR SINGH is the recycling of old gold. required them to pay The writer is a Sebi-registered Avg price (~/sq ft) Avg unit size (sq ft) “Indian households hold interest in the interim, if investment advisor BENGALURU Investors in gold had a 20,000 tonnes of gold. Hennur Road 6,802 2,368 remarkable 2019. With Whenever gold’s price returns of 23.8 per cent, the escalates sharply, recycled Carmelram 5,815 2,690 yellow metal was way ahead gold starts finding its way into Hosur Road 9,700 1,739 of any other asset class. And the market,” says Ajay Kedia, Haralur Road 6,873 2,546 with global headwinds like affecting global financial 2019: SECOND-HIGHEST director, Kedia Commodities. TIPPING heightened tension between markets and the economy When the price of gold had Kanakpura Road 7,427 2,153 the US and Iran grabbing adversely. An allocation to RETURN OF THE DECADE fallen to around $1,050 per POINT Jakkur 8,300 1,996 headlines every day, gold has gold becomes imperative 2010 23.17 ounce, several mines had been the preferred haven for because it acts as a hedge closed down. “With gold’s Rajajinagar 9,798 1,801 2011 31.72 Should you allocate more to debt? J.P.Nagar 7,136 2,360 many. against such risks,” says price crossing the $1,500 On January 6, prices Chirag Mehta, senior fund 2012 12.27 threshold, many mines could CHENNAI Last year, tier one corporate bond schemes and vaulted over the ~42,000 per manager-alternative 2013 -4.50 be reopened, and supply government bond schemes of the National Pension System Saligramam 9,667 1,783 10-gram barrier in the investments, Quantum could increase,” adds Kedia. (NPS) outperformed equity schemes. While equity schemes Kotturpuram 15,500 1,225 domestic market. Two days Mutual Fund. 2014 -7.91 Silver is much cheaper (E) fetched an average return of 9.9 per cent, government Anna Nagar 11,547 1,486 later it beat the $1,600 an The environment that led 2015 -6.65 than gold today when bond schemes (average 14.8 per cent) and corporate bond ounce mark in the to the large price spurt in 2019 compared to historical Pallavaram 6,150 2,555 2016 11.35 schemes (14.1 per international market. remains unchanged, so the averages. A shift by investors cent) fared much karapakkam (OMR) 6,542 2,686 Christopher Wood, global rally may continue this year 2017 5.10 to silver, too, could prevent a ONE-YEAR RETURNS OF better. head of equity strategy at too. The global economic steep upside in gold. Sholinganallur (OMR) 6,408 2,591 2018 7.87 TIER ONE SCHEMES If you are Kolathur 5,250 3,217 Hong Kong-based global slowdown is not going to end In the current tempted to investment bank anytime soon. Any 2019 23.79 environment of a slowing Scheme E Scheme C Scheme G Vadapalani 10,454 1,753 increase your Jefferies, fuelled US-China trade deal 2020* 1.35 global economy and allocation to GHAZIABAD further interest in the is more likely to be a geopolitical tensions, SBI 8.7 14.4 14.5 *YTD Source: mutualfundindia.com schemes C and G Indirapuram 6,509 2,566 yellow metal further temporary truce. investors must maintain a 10- LIC 7.7 14.6 16.4 based on past with his forecast that The US Federal 15 per cent allocation to gold. Vaishali 7,000 2,488 UTIRSL 9.0 12.7 14.8 year’s returns, it would touch $4,200 Reserve (Fed) had appear imminent from the Someone who has become avoid doing so. Vasundhara 5,850 3,250 an ounce in the long been hiking rates Bank of England as well,” says overweight on gold may book ICICI 11.1 14.3 14.1 Those returns run (though he but was compelled Kishore Narne, head of partial profit and bring his GURUGRAM Kotak 11.6 13.1 14.7 were the result of refrained from by slowing growth commodities and currency, allocation back to the original Sector 65 8,955 1,932 YOUR conditions that specifying a time to change course Motilal Oswal Financial level. Exiting gold entirely HDFC 11.8 14.9 14.4 Sector 81 7,413 2,348 prevailed last frame). MONEY and undertake three Services. When real interest would, however, be a mistake. Birla 9.7 14.9 14.5 Sector 109 6,380 2,669 The yellow metal rate cuts in 2019. “All rates plummet, gold gains. According to Kedia, most gold year, when only Average 9.9 14.1 14.8 select large-cap Sector 89 A 6,637 2,478 is up about 4.9 per cent over the major central banks have Massive purchases by rallies of the past have Source: npstrust.org.in stocks did well. Sector 108 8,080 1,976 the past month. “Geopolitical now adopted an easy central banks have been spanned at least three-four tensions are quite monetary policy. Besides the another driver of demand for years. The current one is only Schemes C and G Sector 22 11,000 1,380 unpredictable. But we know Fed, the European Central the yellow metal. “With the one-and-a-half years old. did well because interest rates came down. Those Sector 36 A 8,111 1,965 there are several geopolitical Bank is in rate-cutting mode. world’s two largest economies New investors should conditions may not get repeated this year. Your asset Sector 90 6,900 2,223 hotspots around the globe Interest rates in Japan and feuding, central banks are enter whenever gold’s price allocation within NPS should be a function of the number of years you have left for retirement and your risk appetite. Do HYDERABAD today, and anyone of them Germany are in negative diversifying their reserves corrects, or they should build could flare up periodically, territory, while rate cuts away from fiat currency and allocation systematically. not change it on the basis of last year’s performance. Yapral 5,100 3,566 Nanakramaguda 6,171 2,734 Kondapur 6,952 2,424 Nallagandla 6,299 2,557 as you are now the owner of these rooms. The bank? Well, there is no clear-cut clarification to pay fees under Section 234F of the Act of Shaikpet 6,626 2,622 READER’S instructions for the return form also clarify contained in the instructions to the tax return ~10,000 if you now file the return for the tax Kokapet 6,469 2,500 CORNER that the cost of the asset to be reported under form. But for better disclosure, one may show year 2018-19 before March 31, 2020 (~1,000 if Serilingampally 6,500 2,513 A&L schedule can be the cost to the previous these balances under bank deposits. You have your income does not exceed ~5 lakh). TAXATION owner, or circle rate, in case cost to the previ- the option to file a revised tax return for FY You will not be able to file a belated return Moosapet 5,927 2,847 ous owner is not ascertainable. 2018-19 until March 31, 2020. for any of the previous years now considering MUMBAI Please do refer to the instructions to the those returns are time-barred. However, you Andheri(E) 16,392 1,070 relevant forms for FY 2019-20, whenever these I have not filed returns for the last three should immediately file a belated return for Mulund(W) 14,486 1,233 forms are notified so that you take note of any years. What could my penalty be? I was FY 2018-19, if you had a filing obligation. If you KULDIP changes or additional details which you may working on a start-up during this period, miss the March 31, 2020 deadline for filing Chembur 16,080 1,093 KUMAR need to disclose in this regard. but it failed. your return for FY 2018-19, you will not be able Malad(W) 14,367 1,210 From an individual tax compliance per- to file the return at all. Andheri(W) 17,645 1,005 I have been working for 19 years. I have three spective, the first step is to determine whether Further, if any taxes are payable, it should Kanjurmarg (E) 14,784 1,151 mobile wallets, like Paytm. I have money in you were required to file a return of income at be paid before filing the return. Interest will them. I forgot to mention that in my all. An individual is required to file a tax return also be levied on this amount. Since you have Kandivali(E) 13,609 1,266 My grandfather gifted me two rooms on one returns. What do I do now? when his total income exceeds the basic already missed the filing deadline, you will Goregaon(W) 15,039 1,171 floor of her bungalow in Chembur on May 1, An individual is required to report his assets exemption limit of ~2.5 lakh. not be able to carry forward any loss (except Note 2018. The circle rate is ~85 lakh each. Do I and liabilities in the tax return form, in case Non-filing of return of income can lead to house property loss), if any, incurred during ·The ticket price range considered for the above data points is between ~1.5 crore and ~2 crore need to mention it while filing returns? his income exceeds ~50 lakh for the relevant levy of penalty if tax is payable. In extreme the year. If there is a tax refund in your return, ·All the data points discussed in the above table refer to primary An individual is required to report her assets year. Accordingly, if your income exceeds that cases, the tax authorities may even invoke the income tax department will not pay you market only and liabilities in the tax return form, if her amount, only then do you need to disclose the prosecution provisions under Section 276CC any interest from April 1, 2019, till the time ·Above residential data set comprises of residential apartments only income exceeds ~50 lakh for the relevant year. balance in your mobile wallets. The question of the Income Tax Act, 1961, subject to the sat- you did not file the return. ·Above residential data is representative of organised real estate Accordingly, if your income exceeds this arises whether the balance in these wallets isfaction of conditions contained therein. developers only ·The top performing micromarkets based on sales during last year amount, you will need to report the cost of should be regarded as Cash. If it is not Cash, A fee is mandatorily levied if you do not The writer is partner and leader, personal tax, PwC (November-2018 to October-2019) is represented on the above table these two rooms in the Assets and Liabilities can it be regarded as bank deposit, as the file your return of income within the due date India. The views expressed are the expert’s own. ·Data points are updated till October 2019 (AL) schedule of the applicable tax return form requirement is to show the balances with the for FY 2018-19 and onwards. You would need Send your queries to [email protected] Source: PropEquity MUMBAI | THURSDAY, 16 JANUARY 2020 ECONOMY & PUBLIC AFFAIRS 23 . < New PM house, PMO & Parliament before 2024 All central ministries to be accommodated At present, 22 of the 51 union ministries are located in and around alongside central vista the central vista. According to the blueprint, 10 modern buildings along ARNAB DUTTA that includes setting up of a new both sides of the Rajpath spread will New Delhi, 15 January Parliament building, bringing all house all ministries. central ministries closer, and Besides integrated underground If you are troubled by traffic restrictions redeveloping the existing heritage parking lots, these building complexes around 7, Lok Kalyan Marg — the Prime structures in and around the central will have underground transit passages Minister’s residence — when the PM vista — has many such proposals to directly linked to the Delhi Metro’s moves out for his daily visit to South alter the layout of Lutyens’ Delhi. yellow and violet lines. Block, you may get some respite soon. According to Bimal Patel, head of To further cut down traffic Vacating the decades-old official HCP Design and Planning — the firm congestion on the 3-km-long central residence that has been the home of that has bagged the contract for vista — spread between India Gate and nine prime ministers, the PM may creating the blueprint — the project is Raisina Hill — pedestrian underpasses move to a new home by 2024. in line with the original plan created by will replace traffic signals. Used since 1984 when late Rajiv Lutyens. Consolidating, rationalising Patel says his plan has followed Gandhi became the PM, the and synergising Lutyens’ “Ridge to River” model to current residence was built To cut down on government functions commemorate 75 years of India’s over 12 acres of land, based travel time — from through better office independence in 2022. Starting from on designs by New Delhi’s residence to office infrastructure is at the the ridge of Raisina Hill — the central chief architect Edwin that are 2.8 km heart of this project, he Delhi plan will connect the area with Lutyens. However, with a apart — a new Prime said. Yamuna River, where a memorial will new redevelopment Minister’s office Apart from be set up to celebrate the 75th blueprint on the table, the will come up at accommodating all anniversary. PM’s residence is now South-East corner, ministries, bringing the An aerial view of the proposed central vista. The redevelopment plan includes setting up a new Parliament building inside the complex In addition, apart from a 48-acre expected to move to the behind South Block PM and Vice-President’s biodiversity park housing all South-West corner, behind residences within the structure will be set up on a 13-acre plot, into 450 pairs of seating units, it has “The current Parliament building is endangered and rare Indian spices South Block on Raisina Hill. central vista are key facets. Similarly, which is currently used for car parking. been designed to accommodate 1,350 not equipped to have air conditioning, behind the President’s estate, North To cut down on travel time — from the V-P’s residence will be behind Besides a Lok Sabha hall three times the people for joint sessions. Internet Broadband and parking. The and South Block will be thrown open residence to office that are 2.8 km apart North Block. size of the current one, a Rajya Sabha Designed in line with the Egyptian new structure will address these to the public. These two buildings, — a new prime minister’s office (PMO) To accommodate and modernise hall and a lounge will also come up. Parliament, the Lok Sabha hall will problems,” said Patel. Fit with acoustic once converted into museums on will come up at South-East corner, the Parliament, instead of refurbishing Unlike the current Parliament, provide 50 per cent more space to each design elements, the new building will India’s history along with the behind South Block. the existing building (used since 1947) a however, the Lok Sabha in the new one Member of Parliament (MP). The have moulded spires and dissimilar biodiversity Park, will open up 75 The blueprint for redevelopment of new building will be developed inside could be used for joint sessions. With a existing Lok Sabha hall can only window structures representing India’s acres of land for public to mark the the central vista, the ambitious plan Parliament complex. A triangular regular seating capacity of 900, divided accommodate 552 MPs. diversity. 75th anniversary, he said.

Did nothing in RETAIL CREDIT TRENDS 60 years, now GST refunds for exporters over questioning Delinquency govt: Shah’s jibe at Congress capital goods purchase on cards rate in NBFCs ABHISHEK WAGHMARE Business Standard. PRESS TRUST OF INDIA New Delhi, 15 January BOOST FOR EXPORTERS Texprocil has been push- Ahmedabad, 15 January | Though this will need a resolution ing for this change in policy in rises by 50 bps n a bid to alleviate from the GST Council, the finance its representations to the Union Home Minister Amit exporters’ concerns amid ministry may announce the finance ministry. Shah on Wednesday hit out an economic slowdown, Experts also said that policy I proposal in the upcoming Union at the Congress and other the government is likely to pro- should deal with both classes opposition parties for pose changes to the goods and Budget, scheduled on February 1 of exporters—those who spreading negativity on jobs services tax (GST) policy to | The move will help those choose the LUT route and and economy fronts, saying allow for the refund on taxes businesses that prefer the those who choose IGST pay- those who did nothing in 60 paid on capital goods purchas- Letter of Undertaking ment route—at parity. years of their rule are now es to exporters. route for exports “From a policy standpoint, questioning the Modi gov- Though this will need a treatment of GST paid on cap- ernment. resolution from the GST | Currently, they need not pay tax ital goods should be at par with Addressing a gathering Council, the finance ministry on their export bills, but they other inputs and hence refund after laying the foundation may announce the proposal stand to lose refunds on taxes should be allowed to exporters. stone of the Indian in the upcoming Union paid on capital goods This will provide relief to Institute of Skills (IIS) here, Budget, scheduled on | They will save amounts industry, particularly IT/ITES the minister said the gov- February 1, Business Standard equivalent to the taxes sector,” Pratik Jain, leader, ernment's target to make has learnt. This will help indirect tax at PwC India. paid on capital goods, and India a $5 trillion economy those businesses which prefer In this respect, corporate SUBRATA PANDA & ABHIJIT LELE was achievable and the the Letter of Undertaking improved liquidity will help India is also demanding that Mumbai, 15 January LONG OVERDUE youth's inclination towards (LUT) route to export their boost their exports capital intensive industries PAYMENT entrepreneurship may play products or services. should not get dis-incen- The shadow banking sector, QoQ delinquency numbers a big role in achieving the Currently, under the LUT tivised against labour inten- which so far was struggling for NBFCs, PVBs and PSBs from objective. route, they need not pay tax on wherein the tax rate on what The alternative route avail- Industry players and sive industries due to loss of with asset-liability manage- Shah said the Congress their export bills, but they they produce and sell is lower able, wherein the exporter experts said the proposed taxes on capital goods. ment, is now seeing its asset CYQ1 2018 to CYQ3 2019 (in%) could only manage to take stand to lose refunds on taxes than the tax rates they pay on pays Integrated GST (IGST) move would benefit a section Most of the primary quality deteriorate in the con- Balance level 90+ days past due the country's economy to paid on capital goods. Taxes on inputs such as capital goods upfront, gets credit on taxes of exporters engaged in cap- exporters who imported capi- sumer credit segment. Public sector banks a $2-trillion mark despite all other inputs get refunded. — stand to benefit the paid on inputs, as ital-intensive sectors to a tal goods preferred the Exports A TransUnion CIBIL Private banks ruling for decades, but the They will save amounts most if this decision well as the refund of great extent. Promotion Capital Goods report on retail credit trends NBFCs NDA government under equivalent to the taxes paid goes past all the levels the remainder, is not “Most of the exporters opt- (EPCG) that obviated the need shows the overall delinquen- Prime Minister Narendra on capital goods, and in the government. suitable for business- ed to export under LUT as the to pay tax on capital goods cy rate of non-bank CY18 Modi's leadership took it to improved liquidity will help For example, a fabric es facing inverted refund process was manual, used in the business. finance companies (NBFCs) Q1 2.09 $3 trillion in just 5 years boost their exports. This is manufacturer who duty structure. They but the size of the refunds “Once taxes on capital rose by 50 basis points 0.99 time. being seen as one step that pays 5 per cent on the prefer the LUT route. denied in lieu of taxes on cap- goods start getting refunded, (bps) from the same period a 1.98 Taking a dig at the might help arrest the slow- finished product but The catch was in the ital goods has grown to quite the preference towards the year before in the third quar- Q2 2.38 Congress, he said those who down to some extent, as pays 18 per cent on initial months under a substantial level now,” EPCG scheme would reduce,” ter (Q3) of the 2019 calendar 1.08 did nothing to steer the exporters will be more willing dyes and chemicals GST, when exporters Siddhartha Rajagopal, execu- said Ajay Sahai, director gen- year (July, August, 2.27 country's economy in 60 for new capital expenditure. (inputs) ends up being unable had chosen the LUT route tive director at Cotton Textiles eral and CEO at the September); it rose though Q3 2.26 years were now questioning Businesses which deal with to utilise the credit available mostly to save themselves Export Promotion Council of Federation of Indian Export the first and second quarters, 1.15 the present government. an inverted duty structure — in the system. from the online GST system. India (Texprocil), told Organisations. too. In the same period, delin- 2.28 quency rates for public sec- Q4 2.16 tor and private sector banks 1.10 declined by 26 bps and 9 bps, 2.36 respectively. Overall delin- quencies in the consumer CY19 Q1 2.17 Expert advises against inducting foreign chopper credit segment rose by 10 bps in Q3. 0.95 PHOTO:REUTERS 2.25 AJAI SHUKLA ty in an Indian private sector SP when Lending by finance com- New Delhi, 15 January all this already exists with HAL. panies has slowed as many Q2 2.18 He has pointed out that the SP’s face issues in raising 0.97 2.54 With the Ministry of Defence (MoD) new manufacturing line would have resources. It has also hit their poised to sanction on Friday a ~21,738- no work after building 111 NUHs for operations, impacting recov- Q3 1.99 crore project to build 111 naval utility the Navy. The ‘transfer of technology’ ery activity in the field, say 1.06 helicopters (NUH) in an Indian pri- cost paid to the OEM and the cost of executives. 2.78 vate sector firm, a MoD expert has sug- setting up a new NUH production line Seconding the observa- gested the project be scrapped. The Navy has opted would make a foreign NUH far more tions, Ashvin Parekh, manag- size up to ~25,000”, the The MoD and the Navy want the for a foreign expensive than the Dhruv, which HAL ing partner at Ashvin Parekh TransUnion CIBIL report said. NUH to be a foreign helicopter, built helicopter, to be built already manufactures in Bengaluru. Advisory Services, said the Bipin Kabra, director at through the strategic partner (SP) on the SP model, “Since the ALH-based NUH is con- managements of many NBFCs Eunoia Financial Services, model. This involves selecting a deep- because the Dhruv ceived, designed, and developed by were engaged in the challenge said: "Fintech companies and pocketed Indian private firm as the ALH does not have HAL, there is no necessity for any ToT of raising funds and had less person-to-person lending plat- SP, which will build the helicopters in foldable rotor blades and thus a substantial amount of for- time for recoveries. Field staff forms are quite active. Also, the India using technology supplied by a that allow it to be eign exchange… can be saved,” HAL at many firms had left after the cost of reaching to customer separately selected foreign original parked within the has argued. business slowed substantially has come down substantially equipment manufacturer (OEM). cramped confines of a HAL has also pointed out that it or stopped. Naturally, the due to digital and technologi- However, former integrated hangar on a warship would be able to integrate weapons recoveries took a knock. cal backbone.” defence staff chief, Vice Admiral and sensors to meet the Navy’s In the consumer credit seg- Loans are available at one's Raman Puri (retired), who the depart- requirements in the future, upgrade ment, delinquencies have gone doorstep and people are also ment of defence production has the platform at any stage in its lifecycle, down in automobile loans by willing to take small-sized and appointed as consultant, has advised HAL for its comments. HAL has The Navy has opted for a foreign MoD will take to sign a global NUH resolve technical issues and carry out 22 bps and in personal loans small-duration loans, with less against inducting a foreign helicop- replied that it is “generally in agree- helicopter, to be built on the SP mod- contract. ‘obsolescence management’, which by 5 bps. For loans against concern at the rate of interest, ter as NUH, when defence public sec- ment with the viewpoints provided el, because the Dhruv ALH does not HAL’s letter also notes that the ten- involves ensuring the supply of spare property, delinquencies have said Kabra, whose firms advise tor unit Hindustan Aeronautics (HAL) by the consultant”. have foldable rotor blades that allow it der requires the foreign OEM to trans- parts all through its service life. gone up by 52 bps. For credit small and medium sized is in a position to supply a naval ver- Puri also pointed out that Para 23 to be parked within the cramped con- fer nine critical technologies, which Puri’s intervention and HAL’s argu- cards, up 10 bps. NBFCs have finance companies on busi- sion of its indigenous Dhruv advanced states: “Accordingly the (MoD’s) cate- fines of a hangar on a warship. include a rotor system, transmission ment will not be welcomed by private been very active in the person- ness strategy. light helicopter (ALH). gorisation committee, while consid- But HAL’s response to the MoD system, hydraulics, self-sealing fuel sector firms who have responded to al loan segment and have Also, lenders are focusing Puri has recommended the indige- ering categorisation under the DPP states: “The design of ALH is such that tanks, vibration isolation system and the MoD’s NUH tender. These include grown their share o origina- more on the below-prime bor- nous Dhruv chopper over a foreign will follow a preferred order of cate- role change can be achieved with min- others. “All these critical technologies Tata Advanced Systems, Adani tions in recent years. They con- rower segment to drive busi- design, citing Para 23 of Chapter II of gorisation,” in which ‘Buy imum modifications and minimum are available with HAL in the case of Defence, Mahindra Defence, Reliance tinue to focus on acquiring ness growth. There has been a the Defence Procurement Policy of (Indian–IDDM)’ is top priority. IDDM time, which will enable the navy to the ALH-based NUH, as it is HAL’s own Defence, and the Kalyani Group. In smaller-value ones. In the con- sharp increase in the origina- 2016 (DPP-2016), which states: is the acronym for ‘Indian Designed, use this helicopter…” development,” says HAL’s letter, which addition, HAL submitted two respons- sumer credit segment, overall tions of automobile and per- “Preference will be given to indige- Developed and Manufactured’, a cri- HAL wrote that, while it did not Business Standard has reviewed. es — one in its individual capacity and origination volumes grew 32.1 sonal loans to this category. nous design, development, and man- terion the Dhruv ALH meets. earlier possess technology for foldable HAL also claims that “many other another in a joint venture with per cent year-on-year in Q3, to “Almost 30.5 per cent of ufacture of defence equipment. HAL has pointed out to the MoD blades for the Dhruv, it “initiated a critical and advanced technologies Russian Helicopters called Indo- 7.3 million accounts. auto loan originations and 34.7 Therefore, whenever the required that the Dhruv ALH has been in oper- project with internal funding to design (are) available with HAL, like the Russian Helicopters. “This growth in origination per cent of personal loan orig- arms, ammunition, and equipment ation with the Navy and Coast Guard and develop a blade/tail boom folding avionics system, glass cockpit, com- The foreign helicopters in the volumes is primarily driven by inations in Q3 were to borrow- are possible to be made by the Indian for about two decades. It notes: “ALH mechanism on the ALH, which will posite airframe technologies, etc.” fray include two Airbus helicopters NBFCs. NBFCs originated 5.3 ers considered below-prime, industry, within the timelines has proved its robustness in all oper- meet the stowage requirements of the Puri’s recommendations also — the AS 565 Mbe (Panther) and the mn personal loans in Q3, com- representing increases of 3.5 required by the services, the procure- ating conditions, as validated by accru- NUH”. reflect his opinion that it would be H145M — as well as US firm pared to 1.6 mn in Q3 of per cent and 8.3 per cent, ment will be made from Indian ing more than 260,000 flying hours HAL executives say foldable blades wasteful to buy a foreign helicopter, Sikorsky’s S76D and the Russian CY(calendar year) 2018. Of respectively, over Q3 of 2018,” sources.” and (flying) more than 280 helicopters can be easily developed in two-three pay for transfer of technology (ToT), Kamov 226T. The Panther is regard- these, 78 per cent were from the TransUnion CIBIL report On November 19, the MoD asked in the services of various customers.” years, a period shorter than what the and develop manufacturing capabili- ed as the front runner. the micro segment, with loan showed. 24 MUMBAI | THURSDAY, 16 JANUARY 2020 1 > IMD to change reference dates Now, switch on/off your for monsoon onset, withdrawal PRESS TRUST OF INDIA card for online payment New Delhi, 15 January With changing rainfall pattern, Facilities can be activated only when the customer specifically requests for it the Indian Meteorological ANUP ROY Department (IMD) will change Mumbai, 15 January the reference dates for onset WHAT’S CHANGED and withdrawal of southwest he Reserve Bank of  At the time of issue/ monsoon from this year, the India (RBI) on re-issue, all cards can Ministry of Earth Sciences said T Wednesday told banks be used only for physical on Wednesday. that any fresh card issued use within India Secretary in the ministry M should be only for physical use Rajeevan said the change in the  within India, such as in auto- Based on risk dates will help farmers who can mated teller machines (ATMs) perception, banks can take a call on sowing crops. and point-of-sale (PoS) switch off internet The four-month monsoon devices. Internet and other facility in existing cards season is from June 1 to facilities can be activated only  Customers should be September 30. when the customer specifical- able to switch on, off June 1 is the onset date for ly requests for the same. and modify transaction monsoon over Kerala and it is Customers will also have limit likely to remain the same but the option to cap the amount the IMD will change the refer-  in any kind of transaction, for Banks should allow such ence dates for some states and both physical and internet use, facilities 24/7 through cities, Rajeevan said, adding the central bank said. multiple channels the dates for withdrawal of A gangman attempts to unclog a gutter at a railway track in Mumbai FILE PHOTO: REUTERS For existing cards, banks monsoon will also be changed. will exercise their own discre- The onset dates are expect- and Saurashtra. September 10,” Rajeevan said. mal date. It also withdrew tion whether to allow cards for ed to be changed over the cen- The new dates are expected He said the data cited to from the entire country on internet usage or not. But tral India meteorological divi- to be announced in April when give the reference dates dates October 9, as against the nor- those cards that have never Patra gets monetary policy dept sion of the IMD. the IMD releases its First Long back to 1940s and it needed to mal date of September 1. been used for online transac- ANUP ROY Financial Stability Unit, The central India division Range Forecast for Monsoon be revised. He, however, did Rajeevan added the IMD is tions, or by any means of ‘card Mumbai, 15 January according to a statement on the comprises 10 sub-divisions — 2020, IMD Director General M not specify whether climate working with the UK’s Met not present’, such facilities will RBI website. All these Chhattisgarh, Odisha, west Mohapatra said. change was behind setting the department to come up with have to be disabled automati- Reserve Bank of India’s (RBI) departments, in the past six Madhya Pradesh, east Madhya Monsoon starts withdraw- new reference dates. impact-based forecast that will cally. In other words, cards new Deputy Governor Michael months, were being managed Pradesh, Vidarbha, central ing from northwest India (parts Last year, the monsoon suggest measures to be taken never used for internet trans- Patra (pictured) will be heading by the three deputy governors. Maharashtra, Konkan and of Rajasthan) from September 1. covered the entire country by during extreme weather actions cannot be used for the Monetary Policy Patra was named the fourth Goa, Gujarat region and Kutch “This may be shifted to July 19, four days after its nor- events. online transactions anymore. Department, including deputy governor of the RBI on “For existing cards, issuers Forecasting and Modelling Unit, Tuesday by the government for may take a decision, based on as was widely expected. This a period of three years. He was their risk perception, whether department was earlier headed the executive director of the to disable the card not present by B P Kanungo who took central bank, and an internal (domestic and international) charge of the department after International Department, member of the six-member Govt proposes Unitech takeover transactions, card present Viral Acharya left in July. Patra Department of Economic and monetary policy committee. As (international) transactions, will also be heading the Policy Research, Department of deputy governor in charge of RUCHIKA CHITRAVANSHI positions will be filled by people from dif- ed over to a state-owned company. The top and contactless transaction Financial Markets Operations Statistics & Information Monetary Policy Department, New Delhi, 15 January ferent spheres and with varying court had also ordered the with- rights. Existing cards, which Department, Financial Markets Management, Corporate Patra will continue to remain in expertise. “No sitting officer will drawal of all facilities given to have never been used for online Regulation Department Strategy and Budget the committee, whereas The Ministry of Corporate Affairs on be appointed,” a senior govern- Govt will Unitech promoters Sanjay (card not present)/internation- including Market Intelligence, Department as well as the Kanungo will have to leave it. Wednesday submitted a proposal in the ment official said. appoint 10 Chandra and his brother Ajay al/contactless transactions, Supreme Court for taking over the man- In May, the Supreme Court directors on Chandra, who have been lodged shall be mandatorily disabled money. available by default anymore. made available on a 24x7 basis agement of the troubled real estate com- had asked the government to the board in Delhi’s Tihar Jail since August for this purpose,” the RBI said in In a way, the RBI is assum- The RBI also told banks to through multiple channels — pany Unitech, in a move that could bring study the possibility of taking of Unitech 2017 for allegedly siphoning off a notification on its website. ing that people who already do provide all cardholders the mobile application/internet relief to homebuyers. over the beleaguered realty firm homebuyers’ money. When a bank issues a deb- online transactions know the facility to “switch on/off and banking/ATMs/interactive Two senior government officials con- and complete its pending proj- Of the 16,000 homebuyers it or credit card, it also gives importance of CVV numbers, set/modify transaction limits voice response — and can be firmed the development, saying a note ects to protect the interest of homebuyers, affected by Unitech’s pending projects, internet banking credentials. or OTPs and do not part with (within the overall card limit, offered through branches as has been given through the Attorney noting that the court lacked expertise in about 4,700 want a complete refund, while However, those not comfort- them over a phone call. They if any, set by the issuer) for all well. General, based on the suggestions of the finance or real estate. the other 9,400-odd buyers want either a able with such transactions can continue with such facili- types of transactions — The banks should send apex court. MCA has in its affidavit pro- A two-judge Bench, headed by Justice D refund or the flat. The Chandra brothers are easy victims of call-cen- ty. But people not aware of domestic and international — alerts, update on information, posed names for the board of directors Y Chandrachud, had asked Attorney were arrested by the Economic Offences tre frauds, where the fraud- internet-related frauds will not at PoS/ATMs/online transac- status, etc through text mes- for what was once the largest real estate General KK Venugopal to render his assis- Wing of the Delhi Police in April 2017. They ster calls and seeks informa- have to bother about such tions/contactless transac- sagess and email, as and when firm in the country. tance in the matter by convening a meeting were accused of duping buyers, who had tion of the card, one-time frauds happening with them tions, etc.” there is any change in the sta- The government will appoint 10 direc- at appropriate government levels and check booked flats in their Greater Noida resi- password (OTP), to siphon off as that very facility won’t be This facility should be tus of the card, the RBI said. tors to Unitech’s board, it is learnt. All whether Unitech's projects could be hand- dential project, of a combined ~35 crore. Indian-born Twitter head who decides on blocking tweets, even Trump’s

KURT WAGNER say, and of course that’s exactly the still, so she’s very used to being wok- actress Millie Bobby Brown and San Francisco kind of thing that can get you into en up any hour, which is helpful,” New York Times writer Maggie trouble on social media.” Harvey joked to a group of reporters Haberman, have stepped away Whenever somebody on Twitter Inside Twitter, Trump’s tweets last summer. from the service — at least tem- takes issue with the network’s rules are a frequent topic of conversation Gadde won’t go so far as to say porarily — with many citing bully- or content policies, they almost among employees, and Gadde’s the new warning label was created ing and harassment. U.S. Senator always resort to the same strategy: authority also means that she has with Trump in mind — “We try to Kamala Harris, a former They send a tweet to @jack. the unique job of punishing the think of these things globally and Democratic candidate for presi- A quick scan of Chief Executive world’s most famous tweeter — not just about the United States,” she dent, thought Twitter’s enforce- Officer Jack Dorsey’s mentions show should it ever come to that. “My said — but added that even though ment weak enough that she just how often he’s called upon to lay team has the responsibility to do the screen, referred to internally as implored the company to suspend down the law for the service he that with every single individual the Public Interest Interstitial, hasn’t Trump in a letter in October, say- helped create. But what users don’t who uses Twitter, whether it’s the been used since its debut last June, it ing he uses his account to obstruct know is that they’re imploring the president of a country or it’s an will eventually make an appearance. justice and intimidate people, wrong Twitter executive. While activist or it’s somebody we don’t Gadde said Twitter has used the including the whistle-blower Dorsey is the company’s public face, know,” she said. “I honestly do my newsworthiness policy a “handful” whose report ultimately led to his and the final word on all things best to treat everyone with that of times in the past as justification for impeachment. Twitter responded product and strategy, the taxing job same degree of respect.” leaving offending tweets up. But the that Trump’s tweets didn’t break of creating and enforcing Twitter’s Twitter has so far decided that company didn’t have the warning the rules. rules don’t actually land on the CEO’s Trump hasn’t crossed any lines, label back then, so the general pub- The newsworthiness exemption shoulders. Instead, that falls to but the company is prepared for lic didn’t know anything had even gives Twitter a lot of wiggle room Twitter’s top lawyer, Vijaya Gadde. such a scenario. While it’s unlikely been discussed behind the scenes, when it comes to removing high-pro- As Twitter’s head of legal and pol- that Twitter would ever suspend a she said. “We know it happens, and file tweets, but Gadde said the point icy issues, Gadde has one of the most well-known politician — the com- that it will happen.” of the warning label, and the com- difficult jobs in technology: Her pany also has a newsworthiness Twitter actually pointed to this pany’s attempt to explain it, are part teams write and enforce the rules for policy, which means it’s less likely policy in September 2017 when of a broader effort to be more trans- hundreds of millions of internet to take action on tweets from elect- answering questions about the deci- parent about how and why the com- users. If people break the rules, the As Twitter’s head of legal and policy issues, Vijaya Gadde has one of the most difficult jobs in technology: Her ed officials — it’s devised another sion to leave up a tweet from Trump pany makes decisions -- something offending tweets can be removed, teams write and enforce the rules for hundreds of millions of internet users. If people break the rules, the penalty for world leaders: A warn- that appeared to threaten North she admits hasn’t always been clear. users can be suspended, or in offending tweets can be removed, users can be suspended, or in extreme cases booted off Twitter altogether ing screen unveiled last summer Korea with nuclear war. Twitter also As Twitter has grown, so has the extreme cases booted off Twitter that hides a tweet from public view has a policy against threats of vio- company’s understanding that it altogether. Dorsey may have to when Dorsey met with US President to the US as a child and grew up in the US drone strike in early January and limits its distribution, but still lence. A White House spokesman, can’t simply sit by and let people answer for Twitter’s decisions, but Donald Trump last year, and joined east Texas, where her dad worked as that killed a top Iranian general, allows people to view the tweet Steven Groves, declined to answer tweet whatever they want, Gadde he’s taken a hands-off approach to the CEO when he met Indian Prime a chemical engineer on oil refineries Trump threatened Iran with military with the click of a button. It’s a way questions about Trump’s use of said. It’s one of the many ways her job creating and enforcing its content Minister Narendra Modi in in the Gulf of Mexico, before moving force in a number of tweets, includ- to publicly acknowledge that a Twitter. has evolved over the years. policies. November 2018. When Dorsey post- to New Jersey in middle school. “I ing the targeting of cultural sites. politician has violated Twitter’s Historically, Twitter’s rules “We’re trying to do so much more “He rarely weighs in on an indi- ed a photo with the Dalai Lama from was the only Indian child most of That prompted many observers, rules while admitting what they around free speech have been so of our work in public,” she said. “I vidual enforcement decision,” Gadde that trip, Gadde stood between the my education until I went to college,” including some former Twitter said is too newsworthy to be taken lax that a number of celebrities and want people to trust this platform.” said in a recent interview. “I can’t two men, holding the Dalai Lama’s she says now. “You feel voiceless. employees, to ask why he hadn’t down. “It’s preserving a record of journalists, including singer Lizzo, BLOOMBERG even think of a time. I usually go to hand. InStyle just put her on “The And I think that that’s kind of what been suspended — a cycle that has what is said in the public interest,” him and say, ‘this is what’s going to Badass 50,” an annual list of women drew me to Twitter — this platform played out several times following Gadde explained. happen.’” changing the world. “Vijaya defines that gives you a voice, and gives you other Trump tirades. The process is designed like this: That leaves Gadde, 45, as the end the word,” tweeted Twitter Chief a community and gives you power.” Last month, Trump attacked his A content moderator, who may be a of the line when it comes to account Marketing Officer Leslie Berland. Twitter’s commitment to giving Democratic rivals, blasted Congress third-party contractor, reviews a enforcement — a delicate position When Gadde first joined Twitter, everyone a voice, though, has also over impeachment proceedings, and tweet that has been flagged and in a world where Twitter’s rules are the internet was a different place. At come with a general reluctance to even mocked teenage climate determines whether it violates both an affront to free speech and the time, a lot of politicians were just take it away. Twitter’s decisions in activist Greta Thunberg from his Twitter’s rules. If they decide that it an invitation to racists and bigots, getting familiar with the platform. recent years to ban certain users, @realDonaldTrump Twitter does, moderators can usually depending on who’s tweeting at you. Trump primarily used his Twitter to including conspiracy theorist Alex account. According to a USA Today enforce punishment at this stage, but “No matter what we do we’ve been share announcements about his TV Jones and far-right media troll Milo analysis, his tweets contain more Twitter requires a second layer of accused of bias,” Gadde said. appearances (though this would Yiannopoulos, were news in part negative language than ever. The review for offenders who are consid- “Leaving content up, taking content quickly change). The official presi- because Twitter’s decisions to act study looked at whether Trump ered public figures — in this case, a down — that’s become pretty much dential account, @POTUS, wouldn’t were so uncharacteristic. Gadde tweeted words with positive or neg- verified politician with more than background noise.” even come into existence until 2015, acknowledges the change, saying ative connotations, and found he “is 100,000 followers, Gadde said. Like most corporate lawyers, under then-President Barack that the company has come to realize posting fewer tweets with words that The tweet is then sent to Twitter’s Gadde generally operates in the Obama. in recent years the responsibility it convey joy, anticipation and trust, trust and safety team, and if they background herself, though her When Gadde took over as gener- has to protect the safety of its users, and more that convey anger.” Trump also agree that the post violates the influence has helped shape Twitter al counsel in 2013, the social-media including when they’re not using the sent or retweeted more than 1,050 rules, Twitter convenes a special for most of the past decade. A grad- service had an “everything goes” product. “I would say that the com- messages in December, according to group of employees from across the uate of Cornell University and New mentality. A year prior, one of pany has shifted its approach dra- Hootsuite — more than any other company to review it. This group, York University Law School, Gadde Twitter’s product managers in the matically (since I started),” she said. month since taking office. about a half-dozen people from var- spent almost a decade at a Bay Area- UK famously said that Twitter Perhaps no user presents a bigger “The way he uses social media is ious teams, is meant to bring in a based law firm working with tech viewed itself as “the free speech wing quagmire for Gadde and her team a reflection of just how unusual a diverse set of perspectives, Gadde startups before she joined the social- of the free speech party,” a label lat- than Trump, the platform’s most candidate, and now a president, explained. That panel then makes a media company in 2011. Her eight- er repeated by then-CEO Dick famous user, whose tweets often Trump is. A big part of that is that he recommendation to Del Harvey, plus years at Twitter are about equal Costolo. The company simply “let push the boundaries of Twitter’s breaks all the rules,” said Patrick Twitter’s head of trust and safety, to the amount of time Dorsey has the tweets flow,” said one former rules. The president’s habit of blast- Egan, a professor of politics and pub- and her boss, Gadde, for a final deci- worked there over the years. employee. ing messages to his 70.9 million fol- lic policy at New York University. sion. But as Twitter’s role in global pol- That freedom is part of what drew lowers has taken on a new vigor “Something that a lot of people real- Barring some kind of emergency, itics has increased, so has Gadde’s Gadde to Twitter in the first place. An thanks to a looming impeachment ly like about him is that he says the using the label will ultimately be visibility. She was in the Oval Office immigrant from India, Gadde moved trial and re-election bid. Following kind of things he’s not supposed to Gadde’s call. “Vijaya has a young kid