MONDAY, 23 MARCH 2020 16 pages in 1 section www.business-standard.com NEW DELHI (CITY) ~9.00 VOLUME XXVI NUMBER 241

Howmarkets performed last week % Chg over Dec 31, ‘19 Index on *One- --———————————————————————————————————————————————————————— Mar20, ‘20 week Local currencyin US $ Sensex 29,916 -12.3 -27.5 -31.2 Nifty 8,745 -12.2 -28.1 -31.8 COMPANIES P2 COMPANIES P3 DowJones 19,174 -17.3 -32.8 -32.8 Nasdaq 6,880 -12.6 -23.3 -23.3 Hang Seng 22,805 -5.1 -19.1 -18.7 EVENT FIRMS CANCEL SHOWS LOOKING TO INVEST IN MKTS Nikkei 16,553-5.0 -30.0 -31.4 FTSE 5,191 -3.3 -31.2 -39.6 WORTH OVER ~3,000 CRORE LIKE INDIA: SAUDI ARAMCO DAX 8,929 -3.3 -32.6 -35.7 *Change (%) over previous week Source: Bloomberg PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

TO OUR READERS In view of the need for widespread dissemination of news on the COVID-19 India gets into lockdown mode outbreak, Business Standard is making all such content free on its website for four months from the date of their publication. All our other routine content will also be freely accessible on 80districtsto be www.business-standard.com, as many readers may not be able to access our print edition owing to limited distribution or lockdown in some states. Stay safe, and isolatedascases enjoy reading Business Standard. spreadquickly MARKETS TO OPERATE NORMALLY TODAY Trains, Metros, interstate-buses won’t run SHINE JACOB The stock market will operate normally on New Delhi, 22 March Monday, regulatory and exchange officials said on Sunday. The clarification came after he voluntary janata curfew called by Prime Minister Narendra reports surfaced that the Securities and Modi was, in effect, extended by the Centre on Sunday. It Exchange Board of India and the finance T announced a week-long lockdown in as many as 80 districts of ministry were considering shorter trading the country that have reported confirmed cases of coronavirus. hours or even a complete shutdown in the For the first time in its 167-year-old history, the Indian Railways wake of the coronavirus outbreak. “The cancelled all services of passenger trains, including suburban ones, markets will work normally on Monday,” till March 31. The nearest equivalent of this was the 54-day railway said a Sebi official. “All segments will operate strike in 1974, when trains did not run in the country. The railways, as usual on Monday,” the NSE and BSE said. however, said goods trains would run. Around 12,500 trains, including Many investors had urged the government 9,000 passenger trains and 3,500 mail express trains, run daily. and Sebi to keep the markets closed Besides, the Central government asked states to suspend inter-state following a harrowing week, where the transport. The decision was taken in a high-level meeting of chief sec- benchmark indices plunged 12 per cent. retaries of all states with the Cabinet secretary and Opinion P9 the principal secretary to the PM, on Sunday. EDIT: DISINFECT All metro rail services, too, would be suspended People in Delhi show gratitude to thousands of doctors, nurses and other workers leading India’s fight against the deadly virus PHOTO:PTI THE ECONOMY till March 31. ON In Delhi, Chief Minister Arvind Kejriwal MONDAY STATES ON announced a lockdown — sealing its borders, shut- SPECIALS A WAR ting down markets and directing private firms to give Janataclapscoronawarriors FOOTING P4 compulsory paid leave to all employees, including BANKERS’ TRUST CENTRE ASKS contractual — until the end of March. Beyond the 80 From KYC to KYB — districts, states, including Maharashtra, which is Congress says time to ask tough questions FIRMS TO NOT leading in the number of coronavirus cases, know your bank 8 > TERMINATE Rajasthan and Punjab are now under effective ARCHIS MOHAN, ARNAB DATTA, conch shells and burst firecrackers, be significantly curtailed at least till Customers have the right to know their WORKERS, statewide lockdowns after they imposed Section AVISHEK RAKSHIT & ANEESH PHADNIS while others screamed ‘go corona, go’. the end of this month. And, the beats banks as much as the banks do their PROTECT WAGES 144 that bars gatherings of more than four people. New Delhi/Kolkata/Mumbai, 22 March Union Finance Minister Nirmala were soon drowned by concerns over customers. TAMAL BANDYOPADHYAY writes P6 India reported three coronavirus deaths on Sitharaman, too, was part of the how to carry on with business in the Sunday, including the first casualties from Bihar n a rare instance of bonding, bal- moment, ringing a bell in her court- coming days. THE SMART INVESTOR METROPOLIS, THYROCARE TO and Gujarat, taking the toll to seven, even as Iconies and verandahs across yard, joined by family members. Through the day, roads as well as Few bottom-fishing authorities took unprecedented steps to contain TODAY’S JANATA Indian cities came alive with the beat- Defence Minister Rajnath Singh, other commercial areas wore a deserted look. START TESTS the spread of the virus. The number of positive CURFEW MAYEND ing of thalis (steel plates) sharp at 5 Cabinet members also responded to Police enforced the curfew wherever opportunities in blue TODAY P2 chip stocks 12 > COVID-19 cases rose to 396. Turn to Page 11 > AT 9 PM, BUT THIS pm on Sunday, responding to Prime Modi’s call, just like celebrities and gen- people were seen gathering. Petrol Minister Narendra Modi’s appeal for eral public. Most of them remembered pumps were shut in several locations. Over half the CNX100 stocks still DOES NOT MEAN a voluntary janata curfew to prevent to tweet their videos. In an unusual In several places, the idea of ‘social expensive; Nifty, too, in higher Flip-flop on closing IGI Airport WE START coronavirus from spreading further. move, President Ramnath Kovind and distancing’ was forgotten, as people valuation zone compared to CELEBRATING... In what looked like a national cel- his family came to the steps of the came out in groups. 2008-09. HAMSINI KARTHIK writes A confusion emanated over Delhi operations would continue. Union ebration, people came out of their Rashtrapati Bhawan to clap. The PM thanked the people for IT IS BEGINNING BUSINESS LAW Chief MinisterArvindKejriwal government officials and executives houses in full force, some 10 hours However, the 7 am to 9 pm curfew their enthusiastic response. Modi said announcing the city’s airport would of airportsand airlinessaid they OF ALONG BATTLE after the curfew had begun, to express turned into a real lockdown with the the event marked “the beginning of An opportunity in be shut from Monday till March 31. were caught off-guard by the their gratitude for essential service Centre and many states making back- the nation’s victory in the long battle default threat 13 > The central government later CM’s announcement. NARENDRA MODI providers who’ve been working to-back announcements to tell the against COVID-19”. It is a chance for stakeholders in overruled him, clarifying that flight ARINDAMMAJUMDER reports 6 > Prime Minister despite the odds. Some even blew people that their movement would Turn to Page 11 > the banking sector to revisit contractual obligations, say experts. SUDIPTO DEY writes WILD WILD Last week Investors brace Month-to-date Automakers POLITICS & PUBLIC AFFAIRS MARCH

for more pain The rout is seen extending as 30 -17 -2 -12 -22 -22 -4 -12 189 -26 -12 -25 putbrakeson India announces widespread Investors may have to brace for recovering sharply on Friday to lockdowns (%change) SensexNiftyRupee India Dow10-yrUS VIX Jones Treasury more pain as selling pressure end the week with a 12% deficit. could extend with India entering On a month-to-date basis, the production Selling by overseas investors The banking sector, closelylinked to a virtual shutdown phase to markets are down 22%, while this month is at a record high the economy, takes it on the chin contain the spread of COVID-19. the India VIX has more than Already, foreign portfolio doubled, signalling extreme FPI outflows Sensex WORST PERFORMERS* MTD (%) ARINDAM MAJUMDER & AGENCIES investors’ selloff in March hit a anxiety. “Many nations may have ($ bn) (%) IndusInd Bank -60.1 New Delhi, 22 March record of $6.24 billion (~46,200 to eventually adopt harsh steps Mar‘20 6.24 -22 Axis Bank -38.5 crore). This is far in excess of $4.4 to contain the pandemic. Jan ‘08 4.37 -13 Bajaj Finance -33.6 Some of the country’s top Equations are billion outflows seen in January However, such extreme Oct‘18 3.75 -5 State Bank of India -30.8 automakers have taken the on an even keel 14 > 2008 due to the global financial measures, though desired, will Oct‘08 2.93 -24 ICICI Bank -30.3 lead in suspending produc- crisis. Analysts say the market result in extreme short-term tion to safeguard its employ- RSS isn’t keen to rock Modi’s boat Nov‘16 2.61 -5 bloodbath is worse than in 2008. pain for several parts of the BEST PERFORMERS* MTD (%) ees as COVID-19 continues to because its relationship with BJP is Last week, investor sentiment economy,” Sanjeev Prasad, BSEworst-hit Realty -29.0 Sun Pharma -1.9 spread despite lockdowns. smoother now post Hindu was crushed with the Sensex co-head, Kotak Institutional sectors Finance -28.5 Asian Paints -2.9 Maruti Suzuki India (MSI), TAKING LEAD consolidation. RADHIKA RAMASESHAN writes dropping as much as 17% before Equities, said. SAMIEMODAK Metal -25.6 Hindustan Unilever -5.6 the country’s largest carmak- MTD (%) Capital TCS -10.1 er, said it was suspending pro- | Maruti says duration STATSGURU: Note: Month-to-date (MTD) is as on March 20; *On Sensex -23.7 Source: Bloomberg , Exchanges, Compiled by BS Research Bureau Bankex -30.4 goods Nestlé India -10.3 duction at its facilities in of shutdown to depend The YES Bank rescue 5 > Haryana “till further notice”. on government policy The company’s research and development centre at Rohtak | Mahindra to begin would also remain closed, it work on how it can Fueldemandmayburnoutoncoronaheat said. “As a next step, the gov- make ventilators at its ernment policy now requires manufacturing plants closure of production and, Fiat, Ford, Merc, Petrol, diesel consumption to drop, rise in stockpile likely accordingly, the company has | taken a decision on produc- VW shut plants too; SHINE JACOB & AMRITHA PILLAY 5-10% Disruption in 5-8% Expected initial hit in tion closure,” the firm said. Ford promises no layoffs New Delhi/Mumbai, 22 March FLU-HIT Mahindra & Mahindra initial sales volume from city gas distribution demand in | Hero MotoCorp to FUEL COVID-19 restrictions Delhi & Mumbai (M&M) said it had suspended India is likely to see a drop of 5-10 per cent manufacturing at its Nagpur halt operations at all in the quantity of fuel sales owing to DEMAND TRAIL (Consumptiongrowthin%) TROUBLED TIMES (‘19-20consumption) plant and would halt produc- global manufacturing COVID-19 restrictions. FY16 FY17 FY18 FY19 Q1 Q2 Q3 Q4* ('000 mn tonnes) tion at Chakan (Pune) and facilities till March 31 The decline in purchasesof petrol, diesel, Kandivali (Mumbai) from

and jet fuel is set to dampen the annual 21,467 Monday. Anand Mahindra, roles — to work remotely, 14.5 consumption figuresof the current financial 18,795 group company chairman, Ford India has decided to sus- 11.8 10.1 22,563 10.1 9.4 9.0 8.8 9.1 8.7 8.1 8.0 year and also 2020-21. 7.5 said on Twitter the company pend vehicle and engine pro- 6.7 6.6 14,101 3.0

This will bea repeat of what happened in 1.8 would immediately begin duction at its manufacturing China, where demand for all commodities, work on how it can make ven- sites in Chennai and Sanand 7,835 7,470 7,547 6,963 6,785

including petroleum productsand steel, had 5,748 tilators at its plants. from March 23 till March 28. 4,967 4,564 shrunk after the epidemic surfaced in Wuhan, -3.7 “A lockdown over the next Hero MotoCorp, the coun- 2,134 1,974 1,978 1,430 511 782 349 leading to the accumulation of vaststocks. 603 few weeks will help flatten the try’s largest two-wheeler mak- -10.0 A reprise of this has been seen in India Petrol Diesel ATFKerosene LPG curve and moderate the peak er, said it had suspended pro- during the initial threeweeks of the epidemic. -28.8 27,81976,9267,516 2,24524,060 pressure on medical care,” duction at all sites globally till -20.9 Basedon an estimate by the China National A closed petrol pump during janata curfew, in the wake of Petrol Diesel ATFKerosene LPG Mahindra said, adding that it March 31. “The firm has TOTAL Petroleum Corporation (CNPC), the country’s coronavirus pandemic, in Prayagraj on Sunday PHOTO:PTI would offer its holiday resorts decided to halt global opera- requirement of gasoline, diesel, and jet fuel *January & February only Source: PPAC & Emkay Global as temporary care facilities tions — including at India, may fall 36 per cent during the January-March volume hit could deepen further as the Growth in diesel consumption was expected and help the government in Colombia and Bangladesh — period (Q1) over the same duration last year. government clampdown intensifies,” said a to go down this year owing to a 7.4 per cent ATF PRICES SLASHED BY 12% building such centres. and the global parts centre at “We believe that in the next 7-10 days, the reportby Emkay Global. decline in October. Jet fuel prices were slashed by 12 percent Mercedes-Benz and Fiat Neemrana till March 31,” it situation should become clearer on the extent A decline in demand is likely to dampen “Despite the October figures, we are poised after oil firms reverted to fortnightly have also suspended opera- said. Employees at all the oth- of the demand destruction and the severity of the annual consumption of petrol and diesel. to see an increaseof around 0.6 per cent in the revisions to pass on the benefit of falling tions till the end of this er locations, including the Covid-19 in India. Our channel checks with oil Diesel consumption increased 2.9 per cent consumption of diesel and 8 per cent in crude oil prices, but rates of petrol and diesel month. Volkswagen is shut- Centre of Innovation and and gas marketing companies imply 5-10 per from 81.1 million tonnes (MT) in 2017-18 to petrol,” Sanjiv Singh, chairman of Indian remained unchanged. PTI ting Pune plant for three Technology at Jaipur, would cent disruption in initial sales volume from 83.5 MT in 2018-19. Petrol consumption also Oil Corporation, told BusinessStandard weeks. After advising staff — continue to work from home, IOC 1ST FIRM TO BEGIN SUPPLYOF BS-VI FUEL P3 Covid-19 restrictions in India. However, the saw an 8.1 per cent during the same period. earlier this month. Turn to Page 11 > except in business-critical it said. Turn to Page 11 > 2 COMPANIES NEW DELHI | MONDAY, 23 MARCH, 2020 > IN BRIEF Ipca, Cadila gear up to Ask OTT players Emirates to stop all Vedanta announces passenger flights, ~100-crore fund to slash wages by 50% fight pandemic make drug for COVID-19 to ease network load:COAItogovt SOHINI DAS Mumbai, 22 March MEGHA MANCHANDA ydroxychloroquine, a drug New Delhi, 22 March Emirates said it would stop all Vedanta on Sunday H whose largest manufactur- passenger flights this week and announced setting up of a er is an Indian firm, has The Cellular Operators Association of cut staff wages by as much as ~100-crore fund to combat shot into the limelight after the US India (COAI) has asked the Centre to half because of COVID-19’s the coronavirus outbreak. The president advocated it as potential instruct the over-the-top (OTT) players impact on travel demand.The fund will be utilised to therapy for COVID-19. like Netflix, Amazon Prime Video and carrier had already announced provide preventive Ipca is the biggest producer of Zee5 to ease the pressure on network the suspension of nearly 70 per healthcare to daily wage the drug. Cadila Healthcare, based infrastructure that has arisen from cent of its network of 159 workers, company employees in Ahmedabad, too is a major play- the increased demand for online destinations, asked staff to go and contract workers in and er. Both are gearing up to meet the video streaming. on unpaid leave, and froze around various plants of the demand and have said there will be Demand has surged because of the recruitments. REUTERS< company, Vedanta said. PTI< enough supplies. coronavirus lockdown, more people On top of this, a combination working from home, more digital pay- hydroxychloroquine and azithro- ments, more healthcare and education mycin, a common antibiotic, is services moving online, and quarantine Metropolis, Thyrocare being considered. measures to contain the spread of Vadodara-based drug major Covid 19. Alembic is the domestic market “Due to lockdown/quarantine say they will start tests leader with its brand Azithral, with measures in various parts of the coun- government agencies including social an almost 30 per cent share. try, a sudden surge in demand for distancing, restrictions in terms of forthevirusfromtoday Sources said the country’s apex Both the firms assured that there would be enough supplies online video streaming is also expect- workplace, also encouraging Work health research body, the Indian ed to rise substantially,” the COAI has From Home (WFH), online/digital edu- SOHINI DAS avirus, the private sector diag- Council of Medical Research alert to its plants for the products is gearing to manufacture and sup- said in a letter to the Telecom cation, digital payments/transactions, Mumbai, 22 March nostic players were awaiting a (ICMR), had included the drug in in question. APIs for hydroxy- ply these products meeting the Department secretary. online healthcare, wherever possible formal approval from govern- its protocol for treating COVID-19. chloroquine sulphate and chloro- stringent cGMP, quality and regu- The COAI has also cautioned the and other critical requirements to be At least two leading private ment. The Indian Council of The ICMR, however, has not con- quine phosphate are produced at latory requirements and thus help streaming platforms themselves about met through digital means. This sud- diagnostic chains on Sunday Medical Research (ICMR) on firmed this. Ipca’s Ratlam unit, Madhya mankind in the best possible way the surge in digital use straining the den surge in digital use is already said that they got the final go- Saturday said that all hospi- Pankaj Patel, chairman of Cadila Pradesh, while the formulation is in these testing times,” the compa- network infrastructure of telecom oper- putting pressure on the network infras- ahead from the government talised patients who have Healthcare, said the firm was pro- produced at Pithampur, Madhya ny said. ators. It has urged companies to take tructure of the Telecom Service to start COVID-19 testing. pneumonia or severe acute ducing 20 tonnes of Hydroxy- Pradesh, and Piparia, Silvassa A senior company executive said urgent steps. One is temporarily switch- Providers (TSPs)," said the COAI. They would start collect- respiratory illness (SARI) will chloroquine per month, and had (headquarters of Dadra and Nagar hydroxychloroquine was used to ing from high definition to standard The association has written to a ing samples for testing from not be tested for COVID-19. started ramping up production. Haveli). treat rheumatoid arthritis and also definition streaming. Another is dozen streaming platforms including today. For starters, SARI patients He said the country could make Analysts said the company’s as third-line therapy for diabetes. removing advertisements and pop ups Amazon Prime Video, YouTube, this would happen would have high 100 tonnes of the drug per month stock would see an upside as a “The drug’s safety profile is thus that consume high bandwidth and Hotstar, Zee5, Alt Balaji, Voot, Sony Liv, in Mumbai. fever, cough and immediately. result. Ipca’s plants are under the well established,” he added. replacing them with public announce- Viuclip, Hoichoi, Netflix, SunNXT and Thyrocare and shortness of “We are ramping up our capaci- USFDA’s import alert for the past Ipca used to make 600 tonnes ments on awareness about the coron- Voot seeking their ‘cooperation for joint Metropolis breath as major ty and are geared up to supply three years. of chloroquine phosphate, avirus. action to facilitate smooth functioning Healthcare both symptoms. enough for the Indian market. The USFDA has, however, said the an anti-malarial drug, a At this crucial time, COAI of data communications services in this got the final clear- ICMR has also There would be no shortage of this exception would be re-considered if year, and had an 80 per said it is absolutely essential for critical period’. ance from the gov- noted that anyone drug here. Moreover, most of the the shortage implications changed. cent share of the global the streaming platforms to coop- "We understand that there are vari- ernment to go who has come in raw material used is fortunately Several research papers and market. However, the erate with telecom providers so ous measures that the streaming plat- ahead with the contact with a available locally,” he added. articles have said the drugs have demand for the drug has as to manage the traffic distri- form companies can undertake in this testing. COVID-19 positive Meanwhile, there is demand treatment potential. reduced with cases relating CORONAVIRUS bution patterns that are likely to present situation to continue to provide A Velumani, chairman of case should also be tested pouring in for Ipca Laboratories. “Due to this, we are noticing an to the particular malaria PANDEMIC strain the network infrastructure a suitable level of service to their cus- Thyrocare said “We got per- even if they do not show any The US Food and Drug increase in emergency demand variant coming down. ‘at a time when it is needed for tomers at the most appropriate bitrate mission. We will start testing symptoms. So far India was Administration (USFDA) has and enquiries for the chloroquine “President Donald Trump has various critical requirements’. required...," the COAI said in its com- from tomorrow.” Similarly, testing people who had relaxed the import alert imposed phosphate and hydroxychloro- mentioned both the drugs for treat- Citing the ‘unprecedented situation’ munication to streaming platforms. Metropolis' Sushil Shah too recently travelled abroad and on its plants for the active pharma- quine sulphate APls and its formu- ing COVID-19 and we can easily caused by the outbreak of the coron- The COAI mentioned how OTT confirmed that they would subsequently showed symp- ceutical ingredient (API) and the lations from several countries ramp up manufacturing as avirus, the COAI noted that govern- players in other countries were react- start testing. toms, and people who had finished product of hydroxychloro- world over. Forseeing this demand scales up,” he said. ments around the world are imposing ing. "We understand that similar mea- As the country’s apex come in contact with these quine sulphate and chloroquine increased demand, Ipca being Meanwhile, Alembic has indi- stringent measures to reduce social sures are being taken by various health research body now people and showed symp- phosphate. amongst largest manufacturer, ver- cated there is enough material to interaction to contain the spread of the streaming platforms internationally decided to relax norms for toms of COVID-19 . The test- In a notification to the BSE, Ipca tically integrated with capacities make azithromycin till June and pandemic. like in the US and Europe as more and patients to avail the diagnostic ing guidelines are reviewed on Saturday said the USFDA had and capabilities for manufacturing supplies from China have started "In the past few days, in India too, more countries enter lockdown to com- testing for the novel coron- from time to time. made an exception to the import of these APls and its formulations, coming. advisories have been issued by various bat the spread of the virus," it said. ‘Virusimpactonusrelativelylimited’ Only essential business AfterHUL,ITC, services function with As India Inc battles the impact of COVID-19, Dalmia-OCL is relatively protected owing to the industrialised ple movement, our production might get impact- Godrejcutprice nature of its products. However, the company faces challenges in exports to Europe, stemming from ed. Our export to Europe is seeing a challenge supply chain disruptions. SAMEER NAGPAL, chief executive officer of Dalmia-OCL, tells Jayajit Dash about the primarily because of supply chain disruption. In minimal staff: TechM demand scenario in the wake of the outbreak, outlook on cement and steel industries, its major Europe, there is a little challenge. However, in ofsanitizerpacks customers and their plans for acquisitions, plant ramp-ups and capex infusion. Edited excerpts other parts of the world, we are not witnessing SAI ISHWAR “The well-being and safety any challenge. We are somewhat protected by Mumbai, 22 March of our associates and partner How has the coronavirus scare the industrialised nature of our products. ecosystem is our biggest pri- impacted your business? Tech Mahindra, one of the ority and we are taking all the In refractories, the raw material supply chain is On your core operations, do you see scope for country’s biggest IT services necessary preventive mea- very much dependent on China. There have been ramp-up and capita expenditure? companies, has said the firm sures to ensure that they feel some minor disruptions but not any major If we don’t factor-in the coronavirus, our produc- is taking all necessary mea- safe and protected,” impact on the supply chain side. tion in India will continue to be ramped up. All sures to ensure its staff are Harshvendra Soin, chief peo- our plants are going through some stage of upgra- safe and protected, following ple officer at Tech Mahindra If the crisis perpetuates, do you foresee dation. Our strategies are centred on both organic the outbreak of COVID-19 in in a statement. “We have any demand slump or consumption and inorganic growth. We are planning for capex the country. relaxed our work from home slowdown? and improvement at our existing facilities. At The Pune-headquartered policy and are encouraging Our customers are mainly in the industrial seg- this stage, we are not planning any new projects; firm was responding to a spe- associates to avail flexibility for ment — steel and cement makers. If they ramp we are looking at acquisitions in Europe. Last cific query after a video sur- the same. Some of our busi- VIVEAT SUSAN PINTO down their production due to workers not turn- year, we acquired a plant in Germany. faced where a person was nesses that come under essen- Mumbai, 22 March ing up or restrictions imposed by the govern- seen arguing with Tech tial services, however, are still ment, then there could be some impact. At this Your outlook on cement demand and Mahindra employees regard- functional,” it added. Godrej Consumer (GCPL) and ITC on Sunday point, we don’t see any impact. prices for 2020-21? ing the safety of staff. The Separately, Soin in a tweet slashed the price of their entry-level hand The cement sector is our customer. We track it video was widely circulated has said some of the compa- sanitizer packs under Godrej Protekt and How will your product prices be affected? only from the point of view of how production is on social media also. ny’s businesses that come Savlon, respectively, by nearly 66 per cent, We believe steel production will continue and so shaping. We see production at more or less sim- Even though, the company under essential services are in response to Hindustan Unilever (HUL) will cement. But, the cycle of ramping up and down ilar levels. Many more projects might be did not comment on this functional with due approvals reducing its prices. of these industries is difficult to predict. If there is announced. We expect cement companies to go video, sources said an ‘internal and minimal staff after ensur- The move also comes as the government a slowdown at all, we expect it to be temporary — for brownfield expansion. investigation’ had been ing every safety precaution. characterised masks and hand sanitizers as a few weeks or, at best, a couple of months. We ordered to find out the details. Maharashtra Chief essential commodities, monitoring its produc- hope it is not going to have any major impact. Your outlook on the refractory business? According to sources, the per- Minister Uddhav Thackeray tion, distribution, and marketing closely. More Dalmia-OCL is the second largest in India. We son who was seen questioning has ordered shut down of non- players are expected to follow in HUL, GCPL The anticipated impact on your export? have introduced models in our production pro- the staff in the video was a essential services in Mumbai and ITC’s footsteps, sector analysts said. We export around 10 per cent of our production. cesses and services. We have brought in capabili- ‘local activist’ in Pune who had Metropolitan region and in A 50-ml Godrej Protekt pack will now cost And, we have a plant in Germany. If there is a ties from Europe. We expect to grow 17-18 per cent, visited the company’s campus Pune and Nagpur, among oth- ~25 against ~75 earlier, Sunil Kataria, chief exec- government-imposed lockdown on intracity peo- more than the industry average of six per cent. on Thursday. ers, until the end of March. utive officer (India and SAARC), GCPL, said, with the company ramping up both produc- tion and distribution of the item. A 55-ml pack of ITC’s Savlon, on the other Theshowhaltsforeventscompaniesamidvirusscare hand, will now be available for ~27 versus ~77 earlier. An ITC spokesperson said, “During these Cancellation of at least ~3,000-crore worth of postponement of events. “At least for challenging times, we have redoubled our now, everything has come to a efforts to ensure supply of the Savlon range of business has happened in the past few weeks grinding halt. There is no movement hygiene products. According to government in the market as central and state directives, we’ve already started manufactur- VIVEAT SUSAN PINTO though the Board of Control for governments impose lockdowns ing Savlon sanitisers with the new reduced Mumbai, 22 March Cricket in India has postponed the across key cities,” he said. price and are working overnight on rushing tournament to April 15 and is said to An EY report, along with the new stocks to the market.” The spate of cancellation and be toying with the idea of a truncated Event and Entertainment HUL reduced the price of its Lifebuoy hand postponement of domestic events event that would be televised to Management Association (EEMA), sanitizers and hand wash as well as Domex because of the COVID-19 outbreak people. has pegged the size of the events floor cleaners by 15 per cent. The products has left the industry gasping. Industry veterans such as market in India at ~10,000 crore. This would be introduced in the market within the Estimates by top event management Harindra Singh of Percept, Brian excludes weddings, trade fairs and next few weeks, the company said. companies is that at least ~3,000 Tellis of Dentsu-owned exhibitions. If the latter are added, In addition, HUL also committed ~100 crore crore worth of cancellations and Fountainhead MKTG and Sabbas the overall market touches ~40,000 to fight COVID-19, taking a host of other mea- postponements have happened in Joseph of Wizcraft International said crore, said Sabbas. sures including free availability of soaps to the past few weeks, affecting the business had been thrown out of EEMA recently made a needy people, a ~10-crore donation for better business between March and May, gear because of cancellations and representation to the government testing facilities and public awareness pro- considered a crucial period for the postponements, prompting lay-offs asking for sops to bailout the grammes. market. and salary cuts. industry. This includes tax refunds, GCPL has also stepped up effort to raise These cancellations and The small and medium collateral-free lines of credit and a awareness about hand washing in the fight postponements have extended to enterprises, in particular, said moratorium on payback of loans. against the virus, pushing its both small and big events in Joseph, co-founder and director, Sabbas, who is also on the '#ProtektIndiamovement' across media chan- corporate, leisure, entertainment, Wizcraft International, would be With coronavirus cases growing rapidly in India, there is uncertainty about national advisory council of EEMA, nels aggressively. sports and retail segments across wiped out since it would be whether the IPL will be held at all said the government should work "Our on-ground teams are working relent- cities, mirroring the trend impossible for them to continue in together with the industry to prevent lessly to replenish stocks across channels in worldwide. With coronavirus cases tough market conditions for the calendar year taking a knock. But chairman and managing director, lay-offs and salary cuts. “The events India as we are seeing a growing demand for growing rapidly in India and long. the impact could extend beyond the Percept. market is battling its biggest crisis personal wash products. We are determined to community transmission being a A bigger worry for most players, March to May season because much Tellis, who is co-founder and ever. It is extremely important for the help people tide over the pandemic together, " real threat, there is uncertainty however, is the impact extending for will depend on how ready clients are group CEO, Fountainhead MKTG, government to respond to its needs, Kataria said. Last week, GCPL as well as its about whether the Indian Premier a longer duration owing to the fear of to consider an activation or on- said there was an impact on ancillary like it has been done in countries rivals RB Health, Wipro Consumer, ITC and League (IPL), the country’s biggest a second wave of the outbreak in the ground event once the initial health industries such as hospitality and such as Canada, Germany and the Jyothy Labs had opted to stay off price hikes sports event, will be held at all, months ahead. “I see the first half of scare subsidies,” said Singh, aviation due to cancellations and UK by governments there,” he said. in soaps as the outbreak got worse. NEW DELHI | MONDAY, 23 MARCH 2020 COMPANIES 3

. < IOC becomes 1st CEOs working from home firm to begin Aramco says it’ll focus on supply of BS-VI investments in markets conductmeetings via VCs fuel in country PRESS TRUST OF INDIA New Delhi, 22 March withhighgrowthlikeIndia During free time, nations are doing. Ramesh Nair, MD and CEO of JLL, said he cre- Indian Oil Corp (IOC), the PRESS TRUST OF INDIA the CEOs are ated a designated place in his nation’s biggest oil firm, has New Delhi, 22 March house as ‘home office’. “I believe begun the supply of the practising yoga, this is extremely essential for world's cleanest petrol and The world’s biggest oil exporter each one of us to do as we begin diesel across the country with Saudi Aramco has said it is reading books, working from home. I have also all its 28,000 petrol pumps focusing its downstream invest- or cooking shifted my Cisco DX80 from dispensing ultra-low sulphur ments in high-growth nations office to home that enables me fuel a good two weeks before such as India as it negotiates a DEV CHATTERJEE to connect frequently with my the April 1 deadline. deal to buy up to 20 per cent Mumbai, 22 March leadership team via video con- “We have successfully stake in Reliance Industries’ $75 ferencing,” he said. “It is amaz- rolled out the supply of BS-VI billion oil-to-chemical business. ith high-end technol- ing how in the grind of our dai- grade fuel across the coun- In its latest annual report, ogy and gadgets at (From left) Tata group Chairman N Chadrasekaran, ly lives, we miss taking notice try,” IOC Chairman Sanjiv Aramco said it is looking at W of the things that make our lives Singh said. “All our 28,000 investment opportunities in their disposal, top Mahindra Group Chairman Anand Mahindra and Indian chief executive officers Bajaj Auto CEO and MD Rajiv Bajaj are working from home fuller and richer. As I work from petrol pumps across the high-growth markets as well (CEOs) and promoters are mak- home, I am also taking time to country are dispensing BS- as nations that rely on import- ing full use of working from tions are not affected. ructed their employees not to enjoy this greenery during the VI grade fuel for more than a ing crude oil. India is the Saudi Arabia is Aramco’s second-biggest oil supplier, exporting home by attending board and Mailers have gone from the venture out and avoid unnec- short breaks,” he said. week now." Other fuel retail- world’s fastest-growing energy close to a fifth of India’s oil sourced from abroad management meetings through CEO offices that no staff should essary travel and help the nation Vikas Oberoi, CMD of ers, Bharat Petroleum Corp market with fuel consumption video conferencing (VC) and be asked to travel and only the fight the virus, even if it means Oberoi Realty, said the current Ltd (BPCL) and Hindustan rising at 4-5 per cent annually. tial agreements to sell a 20 per Refining and petrochemi- getting daily sales and produc- ‘mission critical’ staff should be monetary losses for few weeks. crisis adversity is going to teach Petroleum Corp Ltd (HPCL), It also relies on imports to meet cent stake in the oil-to-chemical cals are a cash cow for Reliance. tion reports via WhatsApp. asked to come to work. The Mahindra, who is working us a lot, especially how to work are also progressively sup- its 83 per cent of oil needs. business to the Saudi national As part of the August deal, Ara- In a perfect example of work- CEOs have also identified 25 per from home, tweeted that the from home. “Working from ho- plying BS-VI grade fuel and Saudi Arabia is its second- oil company. Also, a 49 per cent mco will supply 500,000 bar- life balance, cent employees in the top rung group’s project team would me is extremely efficient as we the entire country will switch biggest oil supplier, exporting interest in fuel retailing busi- rels per day of crude (25 million during free who are needed for day-to-day assist the government and the waste a lot of time commuting to the cleanest fuel within close to a fifth of India’s oil ness was sold to the UK’s BP plc tonnes per annum) on a long- time, CEOs are running of company’s opera- army in erecting temporary care and trying to meet each other this week. sourced from abroad. for ~7,000 crore. term basis to Reliance’s Jam- meditating, tions across India and the world. facilities. The group is also face-to-face. All this is being The government had set “Saudi Aramco is focusing Morgan Stanley in a March nagar refinery complex (40 per practising yo- “For the past few days, I see immediately begin working on avoided now because we have April 1 as the deadline for its downstream investments in 19 research note stated that cent of the refining capacity). ga or cooking almost no loss of efficiency so making ventilators and its to keep this social distancing,” starting supply of Euro-VI areas of high growth, including Aramco had in a conference call Market analyst firm Bern- CORONAVIRUS for their family far, barring my inability to Mahindra Holidays resorts are Oberoi said. He said a lot work emission compliant fuels. China, India and Southeast stated that it is still conducting stein in a recent report had stat- PANDEMIC members. review new product sketches ready to be converted as tem- was getting down via FaceTime With this India joins the sel- Asia, material demand centers due diligence on a potential ed that Reliance’s partnership Indian CEOs models and prototypes. All oth- porary care facilities. and without meeting face to ect league of nations using such as the US, and countries investment in RIL’s oil to chem- with Aramco signals expansion like Tata group er discussions are often sharper Harsh Goenka, who is also face. “We have been Skyping a petrol and diesel containing that rely on importing crude oil, icals operation. “Once evalua- rather than retreat as growth Chairman N Chandrasekaran, and crisper,” said Bajaj. “On the working from home and is a lot with our global consultants, just 10 parts per million of such as Japan and South Kor- tion is complete, it will move to opportunities are expected to Mahindra Group Chairman upside, work from home saves social media influencer, listed who are based out of Singapore, sulphur in an attempt to cut ea,” the firm said in its annual the next stage of the approval boost the petrochemical and Anand Mahindra, RPG Enter- travel time, congestion and pol- several ways how to spend time the UK and the US. We are using vehicular emissions that are report. Besides, the integration process,” it said. refining vertical. prises Chairman Harsh Goen- lution. I am also getting more at home by praying, exercising, a lot of this time to look inward said to be one of the reasons of the firm’s upstream and ka, Bajaj Auto CEO and MD time for my dogs, yoga and painting, and watching TED and see how we can do things for the choking pollution in downstream segments provides Rajiv Bajaj are working from swimming,” he said. talks among other activities. better and faster,” he said. major cities. “We have leap- a unique opportunity for Saudi home and are making sure that With the government exte- According to the CEOs, it is frogged from BS-IV (equiva- Aramco to secure crude oil de- all office staff are also safe and nding the janata curfew until important to remain in self- (With Shally Seth Mohile and lent to Euro-VI grade fuel) mand by selling to refineries sound while company’ opera- March 31, the CEOs have inst- quarantine like other developed Raghavendra Kamath) straight to BS-VI in just three designed specifically to eco- years,” the IOC chairman said nomically process Arabian cru- adding this is an achievement de oil. “Saudi Aramco intends to not seen in any large enhance its domestic and glob- economies around the globe. al marketing businesses to sup- Brookfieldmaytake over~1,500-cr Singh, whose firm con- port the position of its upstream trols roughly half of the business in key, high-growth country’s fuel market, said geographies, including China, almost all the company’s India and Southeast Asia, Piramal loan to Bengaluru realtor refineries began producing which are integral to Saudi ultra-low sulphur BS-VI Aramco’s existing business and RAGHAVENDRA KAMATH loans of lender DHFL from Oak- (equivalent to Euro-VI grade) future expansion strategy,” it Mumbai, 22 March tree Capital. Brookfield bought petrol and diesel by the end said adding the firm intends to a majority of US-based Oaktree of 2019 and thereafter the maintain its presence in key In one of the largest among refi- last year. DHFL had sold some mammoth exercise was large countries that rely on nancing deals, Canada-based of its loans to Oaktree and was in undertaken to replace every importing crude oil. Brookfield Asset Management the process of selling its whole- drop of fuel in the country Mukesh Ambani had in is in talks with Piramal Capital & sale book to the US-based inve- with the new one. August last year announced ini- Housing Finance to take over a stor. As mentioned earlier, Pira- loan given to Bengaluru-based mal Capital & Housing Finance Adarsh Developers, say sources. has been reducing the share of The debt is around $200 mil- wholesale real estate loans in its lion or ~1,500 crore. portfolio and single borrower Significant because refi- exposure. At end-December nancing deals had almost 2019, the share of wholesale stopped for non-banking fina- loans to real estate developers ncial companies after the IL&FS was 70 per cent. defaults in September 2018, Last year, it sold loans worth leading to a liquidity crunch in ~2,000 crore, given to Lodha the segment. “It is part of Pira- Developers (now Macrotech), mal’s strategy to reduce single Jayeshankar, chairman of Environment of Bengaluru. In to Goldman Sachs. Piramal is borrower exposure and reduce Adarsh Developers, said the 2018, it invested $100 million in also in talks with other inves- the share of big-ticket loans in deal was in the initial stages. a bunch of housing projects of tors to sell its big-ticket loans, real estate,” said the sources. Brookfield is steadily build- Hyderabad-based INCOR. according to recent reports. The terms of the proposed ing a credit portfolio in real Recently, it bought a 40 per Last year, Adarsh raised deal are not known. Brookfield estate. It has built a loan book of cent stake in Indostar Capital money from JM Financial, Ko- declined to comment when $1 billion in the past couple of Finance for ~1,450 crore. tak Realty Fund, HDFC Prop- asked. E-mails to Piramal did years. In 2017, it lent ~800 crore According to sources, Brook- erty Fund and Piramal Capital not elicit a response. B M to property developer Total field has also taken over some to expand its portfolio.

Vedanta CORONAVIRUS IMPACT announces ~100-cr fund to fightpandemic Hotelierswantdeferment

Metals and mining giant Vedanta on Sunday anno- ofloans, GSTholiday unced setting up of a ~100- crore fund to combat the coro- navirus outbreak. JAYAJIT DASH The fund will be utilised Bhubaneswar, 22 March to provide preventive health- care to daily wage workers, Fearing huge financial bur- company employees and con- den owing to cancellation of tract workers in and around conferences as well as mar- various plants of the compa- riage and banquet bookings ny, Vedanta said in a state- to stave off coronavirus ment. “I commit ~100 crore (COVID-19) spread, the hotel towards fighting the pandem- industry has asked for defer- ic. We will increase the corpus ment of bank loans and if the need arises," Anil statutory dues. Besides, they Agarwal, executive chairman, have sought GST (goods and Vedanta Resources, said. services tax) holiday till the As part of other measures, besieged industry hits the Vedanta said the company revival route. will not cut salaries or fire any “Most of the hotel owners of its staff, including tempo- have taken loans from banks Minister Narendra Modi. water fee and electricity fee rary workers during this cri- and in the current situation, The hoteliers have also till the travel and tourism sis period. Besides, the com- it seems difficult for us to pay demanded to defer payment industry recoups from the pany has also decided to interest and bank EMIs of statutory dues like crisis precipitated by COVID- provide a special one-time (Equated Monthly Instal- advance tax payments and 19 pandemic. insurance to cover Vedanta's ments). Banks should be provident fund to employees, To facilitate the smooth employees and their families advised to consider the situa- among others. recovery of hotel and travel against COVID-19. tion and cooperate with us Such inter- businesses, Further, all mobile health and defer the EMIs and inter- ventions from Mohanty has vans in operational areas will est till the situation becomes the central gov- The hoteliers have advocated GST aide in preventive healthcare normal. Also, CIBIL (Credit ernment will sup- also demanded holiday for the and each business unit will Information Bureau Ltd) port the travel deferring payment next 12 months. contribute towards the liveli- score should not be affected and hospitality of statutorydues He has also hood of daily wage earners in the current business envi- industries in this like advance tax demanded around plant locations like tea ronment. Similar measures moment of exi- payments and immediate sanc- sellers and vegetable vendors. have already been taken by gent crisis, they provident fund tion of funds on The fund will cater to countries like USA and reasoned. to employees, the lines of livelihood of daily wage work- China”, J K Mohanty, co- At the level of among others Mahatma ers, employees and contract chairman, Ficci tourism state govern- Gandhi National workers, preventive health national council and chair- ments, they have called for Rural Employment Guar- care and provide timely help man (eastern region), Indian waiver of fees for upcoming antee Act (MGNREGA) for to communities in and Association of Tour licenses, permits or renewals employees engaged in around various plant loca- Operators (IATO) wrote in a such as municipality holding tourism sector till revival tions. memorandum to Prime tax, bar license fee, ground happens. 4 CORONAVIRUS IMPACT NEW DELHI | MONDAY, 23 MARCH 2020 1 > STATES ON AWAR FOOTING Faced with the COVID-19pandemic, state governments are launching their own efforts to fight it in tandem with the Centre’s initiatives. Many states are opting for a partial or near-lockdown, and are also coming out with a raft of CORONAVIRUS PANDEMIC measures to mitigate the economic fallout of such measures DELHI MAHARASHTRA City put under Working on a plan lockdown till March 31 to tackle economic woes Delhi will be locked down in view of the growing coronavirus threat, from 6 am on March 23 till 12 am on March 31, Chief Minister Arvind Kejriwal announced at a joint press conference with Lt Governor Anil Baijal on Sunday. NUMBER No public transport will operate and Delhi's borders OF CASES will remain sealed during the lockdown, but the essential services related to health, food, water and power supply will continue, he said, adding 74 that 25 per cent of the DTC buses will run to transport people PHOTO: KAMLESH PEDNEKAR associated with essential services. My sincere appeal “We know people will face to all senior Maharashtra, which on Sunday extended the difficulties, but lockdown is citizens. Please, DEATHS lockdown to all urban centres, is putting a plan necessary to contain the spread please stay in place to tackle the economic challenges of coronavirus,” the chief indoors as faras thrown up by the pandemic. minister said. possible. As the 2 “We are working to find a solution to the Kejriwal on Saturday most vulnerable Note: 10 new financial challenges caused by the COVID-19 crisis announced several measures to group, we need cases were and a working group has been formed to look into reported ameliorate the hardships the to take special overnight, it,” said Chief Minister Uddhav Thackeray. COVID- including poor are about to face as care so that you 6 in Mumbai 19 has so far infected 74 persons in the state. economic activity declines in the remain free from and 4 in Pune On Friday, the state government announced wake of the coronavirus infection. I urge that all non-essential services, including private outbreak. you to skip your offices and stores in Mumbai, Pune and Nagpur would remain The Delhi government will morning/evening shut till March 31. Stock exchanges, stock broking offices, clearing distribute free ration for the walks forthe corporation and primary dealers under the ambit of the Reserve month of April to 7.2 million time being” Bank of India (RBI) and the Securities and Exchange Board of beneficiaries, or nearly 1.8 ARVIND India will remain open. On Sunday, the restrictions were million families. The quantity of enhanced and Section 144 of the Indian Penal Code was KEJRIWAL the ration under the Public imposed in all urban areas in the state. Distribution System has also been Delhi CM Groceries, milk centres, pharmacies and banks are exempt increased by 50 per cent. from the restrictions. Suburban trains, state and city transport Kejriwal said the government buses will be shut for public. Buses will be only available to was also doubling the monthly those providing essential services. All government offices will pension of 250,000 widows, 500,000 senior citizens and function with 5 per cent attendance and local trains and buses 100,000 differently-abled persons. “These beneficiaries will continue to operate as usual in Mumbai to allow smooth come from poor families and would get hit the hardest functioning of essential services. Factories can function at 50 because of the spread of coronavirus,” Kejriwal said. per cent staff strength, the state government said. Widows and the differently-abled currently get ~2,500, “If the crisis continues or intensifies after March 31 we and senior citizens get ~2,000, while those above 70 get will not hesitate to take further steps for public safety,” ~2,500 as pension. Moreover, the Delhi CM announced Thackeray said. that all homeless will be given free food, lunch and dinner at night shelters run by the state government. UTTAR PRADESH GUJARAT Financial package 1,200-bed hospital of ~353 crore forcoronavirus patients The Yogi Adityanath government on Saturday announced a financial package of more than Apart from imposing Section 144 of Criminal Procedure Telangana will be under complete lockdown till March 31 as a precautionary measure to prevent the spread of coronavirus, ~353 crore to give cash handouts to an Code (CrPC) across major cities, the Gujarat government CM K Chandrasekhar Rao said on Sunday. The number of coronavirus positive cases has gone up to 26 in the state. PHOTO: PTI estimated 3.53 million daily wage earners and has announced that a 1,200-bed hospital in Ahmedabad labourers, who are likely to be hit due to the will be exclusively devoted to treating coronavirus coronavirus outbreak. NUMBER patients. The number of positive COVID-19 cases in Gujarat KARNATAKA The beneficiaries include 2.03 million OF CASES jumped to 13 in three days with no casualties so far. labourers registered with the UP labour “We are keeping a 1,200-bed Ahmedabad civil department and 1.5 million rickshaw pullers, 26 hospital exclusively for coronavirus patients. The ~200-crore fund planned towards immediate expenses hawkers and kiosk owners, who will get the existing patients undergoing other treatments will be money directly into their bank accounts. shifted to the old campus of the civil hospital,” said The Karnataka government has The state has also decided to provide free Gujarat Chief Minister Vijay Rupani. pledged a ~200-crore fund towards food grains for the months of April and May in Infection control hospitals are also being set up at immediate expenses to contain the advance to more than 8.38 million widow, old four locations — in Ahmedabad, Surat, Rajkot and spread of coronavirus. NUMBER SAMPLE HOME age and handicapped pensioners next month. PEOPLE Vadodara. The state government has also added one With the number of COVID-19 cases The 16.53 million beneficiaries enrolled SCREENED more testing lab to its existing two laboratories with a in the state rising, the government has OF CASES TESTED QUARANTINE under the Mahatma Gandhi National Rural capacity to test 200 samples in a day. Moreover, all formed 100 teams, each consisting of Employment Guarantee Scheme (MNREGS) intra-city and inter-city state transport bus services one doctor, one staff nurse, and one 26 1,387 3,390 and Antyodaya in UP would also be paid a 1.5 MN were suspended for a day. medico social worker for contact month’s free food grain comprising 20 kg and Note: Schools, colleges tracing. 15 kg of wheat and rice, respectively. This closed till April 2; Tourist places closed Free ration for the next two months capacity improved immediately, so that would cost the exchequer ~94.50 crore. till March 31 will be given to all who avail ration in for every one million population Besides, the government has urged the one go, Karnataka Chief Minister minimum 200 tests can be conducted. Centre to sanction ~556 crore for payment towards the jobs B S Yediyurappa said on Sunday. The state has also sealed its borders. rendered by beneficiaries under the MNREGS. NUMBER SAMPLE PEOPLE ISOLATION/ Twenty-six COVID-19 patients, 1,700 beds has been directed to be Karnataka has also shut down all The chief minister has also urged businesses under the OF CASES TESTED SCREENED QUARANTINE including one death, have so far converted into a special hospital to educational institutions, malls, lockdown due to the coronavirus not to deduct their been confirmed in the state. treat COVID-19 patients, the state said theatres, restaurants, cafes, and employees’ wages. 13 189 36,617 1,506 While a government hospital with facilities would be equipped and pubs till March-end.

WEST BENGAL KERALA TAMIL NADU NORTH EAST Free ration under ~20,000-crore Task force to closely No +ve case, PDS forsix months special package to monitor preventive measures butmeasures in place

The state, which tackle the impact Although no positive case of announced a complete COVID-19 infection has been lockdown of Kolkata On March 19, the Kerala reported from the Northeast and other major towns government declared a as yet, the Seven Sisters are on Sunday, has ~20,000-crore special NUMBER PEOPLE not letting their guard down. SAMPLE adopted several package to tackle the impact OF CASES SCREENED Assam has ordered schools TESTED measures to combat NUMBER of the COVID-19 outbreak. This to remain shut till March 31 the economic fallout of OF CASES includes ~14,000 crore to clear and asked barber shops, the coronavirus all arrears pending in various 7 205,396 beauty parlours, coaching 41 pandemic. 67 sectors and a ~500 crore centres, museum, libraries Chief Minister health package. and so on to down their Mamata Banerjee’s government will offer free food grains “Normal life has been shutters till March 31. and ration under the Public Distribution System for the next affected, which has also Fifty per cent of six months. impacted the economy and the government employees, The move will benefit 75 million people in the state. financial package is expected to SAMPLE ISOLATION/ other than essential services, QUARANTINE PEOPLE Moreover, an extra 2 kg of rice will go to the houses of ISOLATION/ revive the economy," said chief TESTED have been asked to work SCREENED children under the Integrated Child Development Services QUARANTINE minister Pinarayi Vijayan. from home on rotation till the (ICDS) and the Mid-Day Meal scheme. The state government will The Tamil Nadu government has closed its borders with 443 9,424 end of this month. The leaves For the one million workers directly involved in also facilitate loans worth Andhra Pradesh, Kerala, and Karnataka. The state has of health department 79,000 preventing the spread of coronavirus, the state is providing 59,295 ~2,000 crore through the self- also constituted a task force to closely monitor the employees have been insurance coverage of more than ~5 lakh. A ~200-crore help group Kudumbasree to preventive measures against the virus outbreak. cancelled. special fund has been set up to fight the pandemic. those who are impacted by A sum of ~60 crore has been allocated to beef up the efforts against the spread of The Assam government COVID-19. Another ~2,000 crore the disease. However, Tamil Nadu chief minister K Palaniswami has ruled out has announced financial will be distributed as part of a village suspending the ongoing Assembly session, insisting that all legislators were being assistance of $2,000 each to employment assurance programme in April screened before entering the House. citizens of its state who are and May. The number of COVID-19 positive cases detected in the State has gone up to seven, stranded in foreign countries. ISOLATION/ NUMBER SAMPLE PEOPLE ISOLATION/ Social welfare pensions, due in April, will be with a traveller from Spain testing positive, said the Tamil Nadu Minister for Health and Neighbouring Meghalaya QUARANTINE OF CASES TESTED SCREENED QUARANTINE distributed in March. Food grains will be provided Family Welfare C Vijayabaskar. and Manipur have gone a to families from across segments.The government The state government was among the first to launch measures to tackle COVID-19. step ahead and ordered the 1,000+ has allowed a one-month extension for the On January 30, it had put under quarantine 78 people who arrived from China. closure of markets as well for 4 88 563,000 18,700 payment of water and electricity bills. The Janata Curfew was extended to Monday morning 5 am. a short time period. Note: The numbers are is only for Assam

(WITH INPUTS FROM ARCHIS MOHAN, ANEESH PHADNIS, SAMREEN AHMAD, AVISHEK RAKSHIT, T E NARASIMHAN, GIREESH BABU, VINAYUMARJI, VIRENDRA SINGH RAWAT, B DASARATH REDDY) NEW DELHI | MONDAY, 23 MARCH 2020 ECONOMY 5

. < Rural India less prepared forcontagion Mix of needed Cutting off train travel may help rural areas cope better; most people feel hospitalisation is a financial blow and negatives

SACHIN P MAMPATTA 10,000 people in rural areas. it in a case of excess payment Mumbai, 22 March Rajasthan and Jharkhand are of tax. Bunching of refund at 2.4 and 2.3, respectively. claims will be allowed across ailway Minister Piyush Maharashtra, which has seen financial years, to facilitate Goyal’s announcement the largest number of cases, is exporters. R at 2. Bihar is at 0.6 (see chart 3). The Council decided to on stopping even long- distance train services, barring Private sector hospital beds defer implementation of the goods trains, may come as a account for 40 per cent of the new e-invoice system and boon for rural areas. market, according to an India the new returns system by The people, reportedly rush- Brand Equity Foundation’s six months. ing back after governments February 2018 note on India’s Reconciliation state- began shutting down major health care segment. ments in Form GSTR-9C cities, may well But major hospital chains EXIM MATTERS need be furnished by only be heading to are concentrated in metro T N C RAJAGOPALAN those with annual turnover regions more cities, according to an August of at least ~5 crore. vulnerable to the 2019 ‘Re-engineering Indian The due dates for filing of pandemic. Healthcare 2.0’ paper from In its 39th meeting, on the annual return and rec- Many are said to industry body Federation of March 14, the Goods and onciliation statement for be returning to CORONAVIRUS INDIA VS BHARAT BED KEYSTATES LACKING RURALHOSPITAL ACCESS Indian Chambers of Commerce Services Tax (GST) Council financial year 2018-19 are to their families in PANDEMIC Rural India Urban India SCENARIO and Industry (FICCI) and con- took some practical and use- be extended till end-June rural India. sultancy firm EY. ful decisions. And, some 2020. Rural hospital Rural beds per 10,000 population Urban beds per 10,000 population A major pan- Borrowings24.9 The report also noted that controversial ones. Late fees for delayed fil- 18.2 beds per 10,000 .2 demic like the coronavirus .2 most people find hospitalisa- The most notable was to ing of this return and state- population 20 20 (COVID-19) is more likely to 9 tion to be a financial blow. charge interest for delay in ment for financial years

Saleofphysical 0.8 .4

Urban hospital .6 17 leave the average rural Indian 11. “Cost of a single episode of payment of GST on net cash 2017-18 and 2018-19 for tax-

assets 0.4 10 beds per 10,000 4

in greater debt; and he or she is 7 hospitalisation was at least 2X tax liability, with effect from payers with aggregate 8. 2

population 7. also less likely to be able to find Contribution* 5.4 2 of the average annual expendi- July 1, 2017. For turnover less than 6. 5. 2 the necessary infrastructure to 5.0 2 ture, if availed in a private facil- this purpose, the Late fee for ~2 crore will be 0 9 3. 8 3. 9 2 2.5 2.3 2.4 2. seek treatment, shows an analy- 1. ity for the bottom three quin- law is proposed to delayed filing waived. The pres- Others 0.7 1. 3. 11. sis of the government data. 1.3 0.6 tiles of population, i.e., 60 per be amended ret- of returns and ent system of fur- Around 24.9 per cent of rural cent of population,” it said. rospectively. This statements for nishing GSTR-1 *From friends or relatives Source: NHP 2019, Bihar Odisha Maharashtra Rajasthan West Bengal households reported the major Note: Data is forproportion (in %) of BS calculations The report added that the decision will financial years and GSTR-3 source of hospitalisation expen- those not able to meet hospitalisation Note: Based on latest Madhya Pradesh Jharkhand Uttar Pradesh India cost of a single hospitalisation bring consider- 2017-18 and returns will be expenses through savings figures by states. Some diture as borrowings. It is 18.2 Source: National Health Profile 2019 update less frequently Source: National Health Profile 2019, Census 2011, BS calculations even in a public facility is equal able relief to 2018-19 for continued till the per cent for urban India (see to a whole year’s expenditure many who had taxpayers with end of September. chart 1). This is based on infor- hospitalisation may itself be a is most accessible to the public. beds, the data shows. There are The study also looked at for the bottom 20 per cent of notices from the aggregate There are mation from the Key Indicators challenge. But even government hos- more government hospital hospital beds relative to their the population. government to turnover of less many other useful of Social Consumption in India- Rural India had 3.2 govern- pitals are skewed in location. beds in urban rather than rural urban or rural population. The introduction of insur- pay tax on the than ~2crore decisions. These Health, 2014, NSS 71st Round ment hospital beds per 10,000 Over two-thirds of the popula- areas individually in the Many major states have signif- ance through Ayushman gross tax liability. will be waived include issuing of data found in the 2019 National people. The urban number is tion is in rural areas, according majority of states and Union icantly lower number of rural Bharat may provide some cush- The govern- circulars to Health Profile. Other data from 11.9 (see chart 2). The data looks to the last Census. But it has Territories too, showed an beds than the national average. ion, though health coverage is ment should now examine clarifysome issues, extend- the profile suggests that at government hospitals as this only over a third of the hospital analysis of the data. Uttar Pradesh is at 2.5 beds per not yet universal. whether it should issue suit- ing the exemption from able circulars or invoke the Integrated GST on import by powers under Section 172 of export-oriented units, and the Central CGST Act and under advance authorisa- issue an order for removal of tions and export promotion IndiahasgraincushionagainstCOVID-19 difficulties, rather than go capital goods authorisations, for a legislative amendment, and so on. Stocks with states are a tedious process that all The controversial deci- GOVT DECISIONS In the case of pulses, officials said state legislatures will then sions include a ceiling to be enough to supply central agency Nafed has around 3 have to go through. fixed for the value of export UP: Free one-month Rajasthan: 10 million mt. Half of this is chana dal (Bengal Second, the changes for the purpose of calcula- ration shops for a year ration for almost families below the gram) and this can be immediately must include provision for tion of refund on zero-rated 16.5 million poor poverty line (BPL) to offloaded in the market through refund of interest paid by supplies. And, to provide for SANJEEB MUKHERJEE get free wheat for two ration shops if the need arises. “Chana many on the basis of gross recovery of refund on export New Delhi, 22 March Delhi: Monthly can be consumed in multiple forms. tax liability. of goods where the proceeds allocation per head of months in advance. Except arhar (red gram), which we Third, suitable safeguard are not realised within the As India battles the COVID-19 wheat and rice raised Food packets with have and needs some amount for pro- must be built-in to make time prescribed under the outbreak, it does have a cushion to 7 kg, from 5 kg, essential items for cessing, all other pulses in our stock sure that freshly accumu- Foreign Exchange in the stocks of grain, pulses, oilseed without any charge people outside the are ready for consumption,” a senior lated input tax credit is not Management Act of 1999 and sugar. NFSA ambit Nafed official said. used for working out the net (Fema). Pune city: Three The governments of Uttar Pradesh, Karnataka: Two In the case of oilseed, one prob- tax liability. Fourth, the These proposed changes Delhi, Kerala, Rajasthan, Karnataka months’ ration in lem is that processing has to be GST Network should enable were not under discussion at and Punjab have already decided to advance to needy months’ quota of 10 kg quick, as they need to be converted part -payment of the tax any stage and are a surprise deliver free rations in advance to poor rice and 2 kg wheat for into the edible form. This could liability. for exporters. If implement- Kerala: Free foodgrain each BPL family, free and vulnerable sections such as daily to the vulnerable mean some supply disruption. Even Another useful decision ed, these will cause a lot of wagers, rickshaw pullers and the like. of cost so, the oilseed stock with the gov- was to amend the law by pre- nuisance for exporters. The The said cushion enables more. By ernment is around 1.1 mt. Of this, scribing a procedure for Customs Valuation Rules official estimates, the stock of 800,000 tonnes is groundnut seed reversal of input tax credit in and Fema regulations have foodgrain (wheat and rice) on March advance to all ration card holders and crop size in 2020 is estimated at an try through the ration shops network. and the rest is of mustard. Mustard respect of capital goods part- enough provisions to deal 10 was 58.49 million tonnes (mt), beneficiaries of other welfare ell-time high of over 106 mt. That included grain for schemes such seed’s conversion into oil is easier ly used for affecting taxable with overvaluation or non- much more than required as a buffer schemes. That is after assuming not a This has given enough confidence as National Food Security Mission and quicker than groundnut's. supplies and partly for realisation of export pro- in normal times. Also, there are stocks single grain is added on to the central to the Centre for allowing states to lift (NFSM), Mid-day Meal Scheme, In the case of wheat and rice, so exempt supplies under Rule ceeds. GST laws need not of around 3 mt of pulses, 1.1 mt of pool from April 1. The reality is that their quotas of ration stock for six Integrated Child Development far most state governments have 43 (1) (c) of the CGST Rules. deal with these issues. oilseed and 4 million tonnes of sugar. this stock position is bound to get months in advance. Scheme (ICDS) and the Annapurna decided to distribute free to vulnera- The rules will be amended to That 58.49 mt of grain can enable bigger — wheat procurement will start In 2018-19, around 57 mt of wheat Yojana, apart from the needs of ble sections. That means the states allow for refund to be sanc- E-mail: the distribution of a full year’s quota in in full swing from next month and the and rice was distributed in the coun- defence forces. would bear the expenses. tioned in both cash and cred- [email protected]

Essentialbankservicesto 1: IN MARCH 2019, ADVANCES BEGAN DECLINING... 2: ….WHILE DEPOSITS PEAKTO ALIFETIME HIGH STATSGURU Deposits (~ trillion) beavailable at branches Advances (~ trillion) ABHIJIT LELE Mumbai, 22 March

Amid lockdown in several states to contain the spread of COVID-19, banks will ensure at least four essential serv- ices — cash deposits and withdrawals, cheque deposition, remittances, and government transactions — at their branches from March 23. For the rest, depending on the situation in each The YES Bank branch, the banks may suspend other services, Indian Banks Association (IBA) Chief Executive Sunil Mehta said. rescue IBA, lobby group of the Indian bank- 3: RISING BAD DEBT 4: CAPITALADEQUACYRATIO PLUMMETED IN DEC‘19 ing industry, said bank customers should ing emergency credit, keeping in mind THE PROBLEM at YES Bank was not so Gross non-performing assets (%) Capital adequacy ratio (%) visit the branch only in case of absolute hardships that many establishments apparent till the Reserve Bank of necessity. Bank employees are also fac- may face due to economic slump and India (RBI) refused to grant an ing the same challenges that all people lockdown. State Bank of India has extension to its managing director are. Most of the services that banks offer framed a scheme to offer emergency and chief executive officer Rana are available online. Customers loans to existing borrowers whose oper- Kapoor, back in September 2018. The should use the mobile and online bank- ations are impacted by COVID-19. bank board then hired Ravneet Gill of Deutsche Bank ing channels for non-essential services. The loans — at 7.25 per cent (per to replace Kapoor. However, the problems started The banks are working round-the- annum) fixed rate of interest — is aimed emerging as it struggled to raise capital. The lender clock to ensure all digital channels are at meeting the temporary liquidity mis- started shrinking its loan book since March 2019 up to date and have all the information match arising out of COVID-19. It will be (Chart 1), but deposits remained healthy (Chart 2) as that you may need during this period. in force till June 30. The association the general public was sure that, despite the troubles Mehta said management commit- has advised member banks to explore at the bank, they won’t fail. tee of the association had discussed similar scheme for their customers, The bank, however, could not hide its bad debt options to support customers, includ- Mehta said. under the carpet for long as RBI auditors forced all banks to disclose their bad debts. YES Bank had the highest divergence among private sector banks, and cautioned by the RBI auditors, it started reporting Parliament’s Budget session higher bad debt since the September 2018 quarter (Chart 3). Even as the bank struggled to raise capital, 5: THE VALUE DESTRUCTION 6: DOMESTIC LENDERS COME TO its capital adequacy remained strong till the Market capitalisation (~ trillion) YES BANK’S RESCUE likely to beconcluded today December quarter numbers were disclosed. We now Equityinvestors know that the bank under-reported bad debt. PRESS TRUST OF INDIA But it all changed after the central bank’s % stakeAmount invested (~ cr) Mumbai, 22 March crackdown and the December 2019 quarter results State Bank of India 48.21 6,050 showed the rot in the bank. Capital adequacy ratio HDFC7.97 1,000 The Budget Session of Parliament is plummeted (Chart 4) as the bank had to provide for likely to be concluded on Monday after its huge pile of bad debt, and share price nosedived, ICICI Bank 7.97 1,000 passage of the Finance Bill in both sinking the market capitalisation (Chart 5) till the Axis Bank 4.78 600 Houses, sources said on Sunday. government and the RBI decided to rescue the bank The session, which was earlier and bring other lenders, including State Bank of KotakMahindra Bank 3.98 500 scheduled to conclude on April 3, is India, to put in equity capital (Chart 6). With the Bandhan Bank 2.39 300 now likely to be adjourned sine die on moratorium lifted on March 18, YES Bank has Federal Bank 2.39 300 March 23, sources said. restarted its operations as a full service bank. It has The session is likely to be conclud- enough liquidity to honour its deposits of ~1.65 IDFCFirst Bank 1.99 250 ed almost 12 days before its scheduled trillion. And the RBI has now opened a credit line of Total 79.68 10,000 winding up due to the looming threat of COVID-19. Many political parties ~60,000 crore for the bank to tap. SUBRATA PANDA * According to the latest disclosures including TMC have decided not to attend the session on Monday due to the coronavirus scare amid lockdowns announced by many states for varied periods, sources said. StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines Source: CapitalLine; compiled by BS Research Bureau 6 CORONAVIRUS EFFECT NEW DELHI | MONDAY, 23 MARCH 2020 1 > Don’t sack staff, protectwages: Centre to firms

ularly casual or contractual workers from ther deepen the crisis and will not only ‘work from home’ as much as possible and EPFO will continue to job or reduced their wages,” Union labour weaken the financial condition of the appealed to them to not deduct their provide essential and employment ministry Joint Secretary employee but also hamper their morale to wages during this period, especially those Kalpana Rajsinghot said in a March 20 combat their fight with this epidemic,” in the unorganised sector. services to claimants letter to employers’ associations. “If any the labour ministry’s letter stated. All the sectors of the economy are worker takes leave, he should be deemed The Employees’ Provident Fund under severe stress as fallout of the SOMESH JHA to be on duty without any conse- Organisation (EPFO) will continue to pro- COVID-19 outbreak, especially the airline New Delhi, 22 March quential deduction in wages for vide essential services to workers related companies as travel curb is being imposed this period,” the letter added. to their provident fund claims and pen- on flights. Recently, low-cost airline GoAir he central government has A labour ministry official sion disbursement, according to an EPFO asked some of its employees to go on asked all companies to explained that if workers are con- official. The EPFO will further send an short-term leave without pay. Many com- T sidered to be ‘on duty’, they will advisory to employers to ensure that they panies had to also shut down as some pos- ensure that workers, espe- cially contract labour, who take CORONAVIRUS be entitled to wages and other ben- pass on provident fund dues to their itive cases of the virus emerged among leave as a precaution against the PANDEMIC efits, if they are entitled to. workers during the pandemic, the offi- their employees. COVID-19 outbreak, should be The advisory stated that “if the cial added. Companies in the organised sector treated ‘on duty’ and their salaries place of employment is to be made Around 90% of workers in India are in the unorganised sector and do not come under State government such as Maharashtra have the option of laying off their workers, not be deducted. non-operational due to the COVID-19, the the purview of the labour laws related to social security and Delhi has ordered closure of all estab- which is a form of temporary retrench- “Against the backdrop of such chal- employees of such unit will be deemed to lishments or factories as a matter of pre- ment, after giving them statutory dues. lenging situation, all the employers of be on duty.” This means that if any estab- duty’ and not on leave. COVID-19 or may force their employees to caution so that the virus does not spread But in India, around 90 per cent of the public or private establishments are lishment is closed due to a positive case of The government’s advisory stated that go on leave without pay. “The termina- further. Prime Minister Narendra Modi workers are in the unorganised sector and advised to extend their coordination by COVID-19 virus on the premises, then the the companies may look to terminate the tion of employees from the job or reduc- had said in a public address on Thursday do not come under the purview of the not terminating their employees, partic- employees will be considered to be ‘on contract of workers “on the pretext” of the tion in wages in this scenario would fur- that employers should allow employees to labour laws related to social security. Toughquarterahead ‘Will take relook at GDP forecasts forstate-runbanks for FY20, FY21;but it’s too early’

Chief Economic Advisor KRISHNAMURTHYSUBRAMANIAN tells Arup Roychoudhury that NAMRATA ACHARYA economic activity is set to be hit as parts of the country have headed for a lockdown, & ISHITAAYAN DUTT at least till March 31, because of the spread of COVID-19. Edited excerpts: Kolkata, 22 March How serious is this for the Indian curve will require measures like lock- Public sector banks (PSBs) economy? Can it be compared with down. That also has an economic are staring at a difficult quar- events like the 2008 global financial impact. So there is clearly a trade-off ter ahead. While coronavirus crisis, in terms of impact? between the two. Then there are spread may lead to restruc- In the Indian context what I would important distinctions in my opinion turing in the present and say is, looking at the data and an between a global financial crisis and a next quarters, higher provi- event like this you always have to pandemic. Because the global finan- sioning needs on account of be very careful about tomorrow ver- cial crisis actually stemmed from the failed resolution of accounts sus today. But based on data today, financial sector. And when crises under the inter-creditor if you look at all the other coun- emanate from the financial sector, agreement (ICA) will further tries, and follow statistical model- they’re far more long-drawn. add to their woes. ling, there is a way this is In addition, no visibility happening. That is stage Is it time to relook the on recovery from Bhushan I, then stage II. We are at GDP forecasts for Power, currently under the stage II currently. And I 2019-20 and 2020-21? National Company Law think the good news that This is a period of Tribunal (NCLT), seems to be has come is that we still KRISHNAMURTHY significant uncertainty, in sight. haven’t seen community SUBRAMANIAN of unknown unknowns. Many PSBs, which had spreading, according to Chief Economic While you can sense recently turned profitable the Indian Council of Advisor directionally, but I think after months of losses, may Medical Research, giving any magnitudes once again slip into the red, NUMBERS GAME exposure of more than because it’s community will lead to a significant say bankers. ~2,000 crore. spread that creates exponential prospect for error. Given the kind of Last quarter, a number of | PSBs posted aggregate After the 30-day review growth. So in that sense, the linear uncertainty there is, putting quanti- banks had drawn comfort operating profits during period, 180 days were allowed growth, together with the evidence tative estimates is actually very “THERE ARE IMPORTANT DISTINCTIONS BETWEEN A from the resolution of Essar FY18 and FY19 of ~1,55 for implementing a resolu- on absence of community spread hard. We do have our internal GLOBAL FINANCIALCRISIS AND APANDEMIC BECAUSE Steel, which alone yielded trillion and ~1,54 trillion, tion plan, which ended in the seems to suggest, I actually would assessments on this, but I think that close to ~42,000 crore for respectively first week of January. be very careful about saying is something prone to significant THE GLOBAL FINANCIALCRISIS ACTUALLYSTEMMED them. From Bhushan Power, Failing the deadline, anything about the future. But as error. We know that indicators for banks were expecting a | PSBs made aggregate banks have to make a 20 per of today, the data seems to suggest March will get impacted. April and FROM THE FINANCIALSECTOR” recovery of nearly ~20,000 provision of ~2.40 trillion cent provision and refer cases that we are doing better than May will also get hit. It is, however, crore in the present quarter. and ~2,36 trillion in FY18 to the NCLT within 30 days. other countries. too early to give new numbers as the However, they may now need and FY19, respectively. This is followed by an But we clearly see a negative shock situation is still ever-changing. the timing may be affected. That is economic perspective? to wait as it is still caught in a additional 15 per cent if on the health side. Economically, something which will have to be fac- Broadly, I think this basically calls | They incurred net loss of legal wrangle. no resolution is found within there will be an impact. For instance, What sort of impact are we seeing on tored in. I think it’s very hard to spec- for a sort of a coordinated response JSW has been legally ~85,370 crore and 365 days. health experts are saying you need to tax revenue and divestment ulate at this point but my sense is that from the Centre, the RBI and the advised that it is not obliga- ~81,752 crore in FY18 PSBs had started showing flatten the curve. You do this to bring collections? given that this is actually has to be financial sector. The measures will tory to implement the reso- and FY19, respectively signs of recovery after equilibrium between the health There will be an impact. The good done in the year. have to focus on the broader macro lution plan during pendancy | They saw an aggregate months of stress. Anurag resources and the number of people thing though is that the targets are for picture and at the same time the of appeals. The next date of profit of ~3,221 crore in the Singh Thakur, minister of that would be sick at a particular the full year. There was work that was How should the government deal specific sectors which have been hearing in the Supreme Court first half of the current FY state for finance, in a reply to point in time. But that flattening the already getting done on these. I think with this going ahead, from the the worst hit. is around mid-April. Bankers a question in the Lok Sabha were pinning their hopes on | PSBs recorded a net profit in December 2019, said PSBs the resolution being of ~507 crore in the first returned to profitability in completed this quarter. three quarters of this FY 2019-20, posting an aggregate “Due to the coronavirus, Source: Lok Sabha profit of ~3,221 crore in the Delhi, Centre flip-flop on IGI Airport closure sectors like micro, small and first half ending September. medium enterprise (MSME), PSBs had posted aggregate hospitality and airlines are Bhushan Power in the operating profits during FY18 ARINDAM MAJUMDER inform passengers and have to ground 68 per cent of badly hit. Many banks near term. and FY19 of about ~1.55 tril- New Delhi, 22 March bring back aircraft at six hours their fleet in the next two may slip into losses due to According to an earlier lion and ~1.54 trillion, respec- notice. There should be more months as demand falters. To this. Further, banks are data from rating agency tively. However, due to the Confusion emanated over Delhi coordination in times of crisis save the sector from bankruptcy, required to make higher pro- ICRA, an estimated ~3.8 tril- continuing ageing provision chief minister Arvind Kejriwal between different wings of the Centre is planning a relief visioning on accounts which lion of loans across 72 large for NPAs, they made aggre- announcing the city’s airport the government,” said an package — tax holiday on jet have not yet been resolved accounts were to be resolved gate provision for NPAs and would be shut from Monday till airline executive. fuel, waiver on landing and under the ICA,” said a top under the ICA. Bankers said a other contingencies of ~2.41 March 31. The central govern- Other states have issued parking charges, loans at 1 per executive of a PSB. substantial number of trillion and ~2.36 trillion, ment later overruled him, clari- orders of lockdown, banning cent annual interest and more. Banks have the option to accounts remain unresolved. respectively. This resulted in fying that flight operations bus and other public transport, refer them to the NCLT but in “There is no unanimity aggregate net losses of would continue. but kept airports and railway Runway nowaparkingbay most cases, the resolution among lenders on the ICA. ~85,370 crore and ~81,752 Union government officials stations out of the purview. For One of the three runways at the value is as low as the liquida- Many banks have not signed crore, respectively. and executives of airports and instance, the West Bengal gov- Delhi airport is being used for tion value. “So, this will be a the ICA, even though six PSU banks recorded a net airlines said they were caught ernment’s order of lockdown parking of planes for the very difficult quarter for months have elapsed,” a sen- profit of ~507 crore in the first off-guard by the CM’s from Monday does this. past two days as airlines are banks. If the resolution of ior official of the State Bank of three quarters of this financial announcement, of which there IndiGo, SpiceJet, Vistara, grounding planes and Bhushan Power had taken India (SBI) told Business year, Thakur had further said had been no prior intimation. and Air India are based out of cancelling flights owing to low place, it would have come as a Standard recently. in the Lok Sabha recently. Kejriwal had at a 6 pm press ders. With Lieutenant Governor the Directorate General of Civil Delhi airport. “If Delhi opera- demand and travel bans. Delhi big comfort to banks,” the A circular of the RBI on “In the next quarter, the meet on Sunday announced the Anil Baijal present, he said all Aviation announced flights tions are shut, we will have to is the busiest airport in the executive added. June 7, 2019, mandated banks restructuring pressure may city government was imposing a domestic flights into the city would continue as before. “This close operations,” said an exec- country and its three runways Another head of a PSB, to sign ICAs within 30 days be high due to the ongoing ‘lockdown’ of the Union had also been banned till March is hara-kiri (the popular term utive at one. handle over 1,300 flights daily. however, said that he was still from the first date of default economic conditions,” said a Territory and barring all to and 31. However, within 30 minutes, for Japanese ritual suicide). It’s According to a government hoping for a resolution from by companies with bank senior official of a PSB. fro movement across its bor- the civil aviation ministry and impossible to cancel flights, estimate, airlines will anyway (With inputs from Aneesh Phadnis ) Business interruption loss not covered under insurance

SUBRATA PANDA triggered and business which have Bajaj Allianz General Insurance. Mumbai, 22 March suffered losses can make claims for “However, there may be some LICdeclares relaxation their losses. all-risk covers which may include Many state governments have Sanjay Datta, chief (underwriting coverage due to COVID-19. But such on premium payments enforced a partial lockdown to & claims) at ICICI Lombard, said: policies are very rare and have to be contain the spread of COVID-19, “Business loss from physical damage underwritten, specifically with State-owned Life resulting in business interruption is covered but not the notional loss. terms and conditions, subject to Insurance Corporation losses for small and large companies, Notional loss can happen for reinsurance support,” the said it would give shops, and others. But the losses economic slowdown also. There was General Insurance Council relaxation to cannot be made good by claiming for a slowdown due to the global spokesperson said. policyholders in insurance as the ‘loss of profit’ clause financial crisis and several The partial lockdown has also payment of premiums does not get triggered in the policies companies shut shops but that was resulted in many film productions due on inforce policies unless there is physical damage. not covered under insurance getting stopped temporarily causing up to April 15 owing to “The non-life industry does not policies because there was no budget over-runs. However, film the COVID-19 outbreak foresee business interruption loss physical damage”. insurance if taken by the production in the country. claims arising due to COVID-19 like Generally, major industries, house or the producer may come in “This is aimed at helping policyholders quarantine or close down of hotels, and big shops take business handy here. who have not been able to pay the operations due to non-availability of loss policy along with property “At present, film insurance does premiums on time because of the virus staff because there would be no insurance wherein any claims arising offer coverage against losses outbreak,” LIC has said. property damage due to any accident due to physical damage from any of incurred due to stoppage of Policyholders are requested to stay or event,” a General Insurance the insured peril is admissible. production due to an epidemic or indoors and avoid visiting any office to Council spokesperson said. “In this case, since none of the pandemic in a limited way subject to pay premium. They can, however, use “The current business the government,” the spokesperson profit’ policy gets triggered. Cases insured perils have happened and the disease being declared as an online services of LIC. interruption policies for added. where there has been a fire, the businesses have been closed epidemic/ pandemic by the WHO or To contain the spread of the COVID-19, a commercial establishments do not Normally, business interruption breakdown of machinery due to riots, under government action, no claim the government. However, it may not majority of the states have asked people to offer any cover for epidemic or losses are covered under property terrorist activities or natural events arising out of business loss due to cover loss of profit since the same maintain social distancing and avoid travel pandemic declared by the World damage policy. So, only if there is like floods, cyclones and earthquake, COVID-19 can be admissible,” said cannot be estimated,” the unless necessary. BS REPORTER Health Organization (WHO) or property damage then the ‘loss of the ‘loss of profit’ policy gets CR Mohan, senior vice-president, spokesperson added. 8 ISSUES AND INSIGHTS NEW DELHI | MONDAY, 23 MARCH 2020 >

dom individuals, as representative of world networks. This means the the population, and test them to see if chances of catching an infection from CHINESE WHISPERS ‘Small-world’networks there’s community spread. somebody outside of your own small For example, one patient may have world is much lower than the chances The lack of random testing means we simply don’t infected two persons, who in turn, sat on a bus or a plane, or gone to a of catching it from someone in the Virus shadow on polls infected two more persons each, and so religious event, and infected a same network. If your friend’s cousin know about extent of community spread in India on. In each infection cycle, the number stranger. Contact tracing will not pick is infected, she had just one shot at of infected increases by two raised to up such examples of community directly infecting you. Obviously, data is crucial and one the power of the infection cycle itself. spread. Random sampling on a large This has an important mathemati- of the problems is that governments The first cycle starts with 1, then 2, scale as in South Korea and China may cal implication. If one person is routinely lie, even to themselves, when then 4, 8, etc, until the infected pop- be necessary to find such patients, and infected, exponential growth is likely, it comes to the magnitude of bad news. ulation jumps to 16,384 at the 14th cycle. to isolate them as soon as possible. until everybody within that person’s However, even though official data The first phase of an epidemic seems Importantly, most people belong to small world network gets infected (or understates levels of infection and to go like this. Once an epidemic comes “small world” networks. That is, we tend proves immune). But if there are no mortality rate, epidemiologists use an under control, this curve ceases to be to have a cluster of friends, family and linkages to other small world networks, array of mathematical techniques to exponential and the number levels off. professional colleagues, etc., who know the infection also levels off quickly. The coronavirus scare has not only model epidemics. “Flattening the curve” as the popular each other too. Any Facebook user will Shutdowns of public transport disrupted society and business, it has cast Most epidemics are routinely phrase goes, involves cutting growth understand what it means when you services, flights, malls, movies, reli- its long shadow on the forthcoming described as “exponential”. That is, rates, one way or another. discover you and some FB friend have gious gatherings, etc., are designed to Vidhan Parishad or the Legislative Council TECH-ENABLED after a certain base level of infections An important mathematical tech- “55 mutual friends”. You are both part cut linkages between different small polls in Uttar Pradesh as well. The is hit, the number will grow at great nique involves examining social net- of the same “small world” network. world networks. There are huge impli- elections to fill 11 teacher and graduate DEVANGSHU DATTA speed, until the epidemic is brought works when testing for an infectious Characteristically, you will also have cations to shutdowns, so this is not constituency seats were slated to be held under control. The mathematical disease. First of course, there’s the con- peripheral acquaintances, who belong something any government should next month. However, the Adityanath hen a pandemic like understanding can be obscured by the tact tracing and testing of anybody to other small world networks. For undertake lightly. government has already shut educational COVID-19 hits, policy- casual use of “exponential”. The known to have been in touch with an example, your best friend’s second Some non-peer reviewed papers do institutions till April 2 even as most of the makers must find the number of infections can grow at speed infected person. This is targeted and cousin who you’ve met once at your suggest the small world hypothesis is government offices are also following the W most efficient ways to allo- without being exponential, and the designed to pick up people in constant friend’s wedding, has just one mutual working with COVID-19. The data is work-from-home model. Since the cate key resources like test kits, medi- number of infections may be governed contact with any individual such as friend in common with you. Hence, she insufficient to prove this yet, one way Election Commission has not released the cines, hospital beds, ventilators, etc. by other mathematical functions. family, work colleagues, domestic help, has just one link to your small world or another. In India’s case, the lack of schedule for the Upper House elections, They also have to make guesses about An exponential curve is created neighbours, friends, etc. network. But she has an entire separate random testing means we simply don’t political parties are still waiting for the the likely speed of propagation of the when a base number is multiplied But testing should also involve the small world network of her own. know about extent of community notification to this effect. However, given disease. This leads to decisions such as many times by itself. For example, let’s random sampling of the population at Small world networks therefore, spread. But shutdowns could bring the the current crisis, it is likely these polls ordering shutdowns, and possible emer- say one infected person returned to large, as done during an opinion poll. have multiple internal connections, pandemic under control quicker, even would be postponed to allow candidates gency fiscal and monetary measures. Delhi from Wuhan. Then that person Public health officials need to pick ran- and much fewer links to other small if there’s a massive economic cost. ample time to file nomination and canvass support. ‘It’s all Digvijaya’s fault!’ After Jyotiraditya Scindia joined the Bharatiya Janata Party (BJP) and his From KYC to KYB — know your bank supporter MLAs resigned from the Congress, the Kamal Nath-led Congress government in Madhya Pradesh had to Customers have the right to know their banks as much as the banks do their customers fall. But most leaders of the MP Congress don’t blame Scindia for the debacle. One speaking, the difference between the bank stock, apart from capital and bad such leader and former minister, Mukesh cost of funds and earnings from credit loans, one looks at ratios such as return Nayak, said the former CM and general and other investments, net of opera- on assets and return on equity besides secretary of the All India Congress tional cost, is a bank’s profit. the average cost of deposits and the Committee, Digvijaya Singh, was For every ~100 deposit, a bank keeps business model. One also looks at the responsible for the current crisis. "Singh's ~4 with the Reserve Bank of India (RBI) price-to-book ratio which compares a political ambition led to this. He was the in the form of cash reserve ratio and bank’s market value to its book value. preferred candidate for the Rajya Sabha, invests at least ~18.25 in government The market value or market cap is which irritated Scindia who was already bonds (statutory liquidity ratio). This arrived at by multiplying the price of miffed with the working style of the money comes in handy for exigencies, the share by the number of shares Singh-Nath duo,'' said another. After such as sudden rush to withdraw while the book value is its assets. India losing the Lok Sabha elections, Scindia BANKERS’ TRUST deposits. The rest of the deposits and hosts some of the most valued banks was eyeing a Rajya Sabha berth from the capital are used to give loans, 40 per in the world. state where three seats are up for grabs. TAMAL BANDYOPADHYAY cent of which must flow into the so- Finally, the quality of management But Congress' wafer-thin majority, even called priority sector. Of course, a bank and its corporate governance make one when it was in government, meant party needs to keep enough liquid assets to bank different from another. All these leaders were not sure of winning a or quite some time now, most cover its short-term liabilities. build trust, essential in the business second seat. Now Scindia is the BJP's senior bankers working for gov- Banks can have the best of both running well and is adequately capita- majority owner, the depositors feel of banking. Rajya Sabha candidate. ernment-owned banks have worlds: When the interest rate rises, lised. Under the RBI norms, the current secure. The government takes care of Once upon a time, banks used their F been suffering from a fear psy- they make money on their loan port- capital to risk-weighted assets ratio is these banks by pumping in capital peri- facade to inspire awe and trust among chosis. Now the paranoia has spilled folio; when the rate drops, money 10.875 per cent which could go up to 11.5 odically. The private banks fend for their customers. The magnificent struc- over to depositors in many private banks comes from investment in bonds. But per cent by March end. Different sets of themselves. For the record, no sched- ture of their headquarters made people Surprise & anger although the triggers are different. The this is in theory. The real world of loan assets carry different risks. Simply uled commercial bank has been allowed believe their money was safe with their The two Houses of Parliament will start bankers are scared of sanctioning new banking is complex. speaking, a bank needs to have ~10.875 to fail at least in the past three decades. banks. That is why the Hong Kong and proceedings at 2 pm, and not the usual 11 loans for fear of being hounded by the How does one get to know one’s capital for every ~100 risk-weighted Every time a bank has been on the Shanghai Banking Corporation wanted am, on Monday, as Speaker Om Birla felt investigative agencies if the loans turn bank? What are the parameters one assets. For small finance banks, the verge of collapse, the RBI has stepped to build “the best bank building in the members might need more time to return bad while the depositors’ trust in banks should look for? The first and obvious requirement is higher — ~15. in and worked out a rescue package to world” for its office in Hong Kong. Most from their constituencies, given the is diminishing as some of them feel their thing to check is the profitability of a Another important health indicator protect its depositors. This is, however, bank headquarters in the developed restrictions at airports to thwart the spread money is not safe with banks. bank but that’s not the only symptom is the provision coverage ratio. Even for not the case with co-operative banks. markets are a must-see on every tour- of coronavirus. However, several MPs said While welcoming a customer into of health. The quality of its assets is crit- good assets, banks are required to make Many of them have failed and their ist’s itinerary. they were not planning to return to the their fold — both depositors as well as ical. It is gauged looking at the bad loans 0.40 per cent provision. depositors have lost money. The grand façade of the head- national capital. There was some borrowers — banks follow the ritual of as a percentage of a bank’s overall loan The higher the capital to risk- All banks, including the cooperative quarters alone cannot create trust any apprehension among MPs when they came know-your-customer (KYC) to be sure book. A loan turns bad when a borrower weighted assets and provision coverage banks, are required to buy insurance more in the new age of banking. Let to know that a Bharatiya Janata Party (BJP) where the money is coming from (in does not service it for three months. ratio and the lower the bad loan ratio, cover for their depositors’ money. For banks start displaying their key health Lok Sabha member had attended a party in case of a depositor) and where the Bad loans are bad because banks do not the stronger the bank. None of these each depositor, the cover is now for ~5 indicators at their branches along with Lucknow where singer Kanika Kapoor, who money is going (for a borrower). It’s a earn any interest on such loans; on top parameters should be seen in isolation. lakh, inclusive of interest. This means the RBI licence. The customers have the has been afflicted by COVID-19, was also rather tiresome process but no one can of that, they need to provide for or set As long as a bank is adequately capita- even if a bank goes bust, the depositor right to know their banks as much as present. In their internal communication escape it. It’s time bank customers, aside money for such loans. That hits lised and profitable, one does not need is sure to get back at least ~5 lakh. One the banks do their customers. service, MPs vented their displeasure at the particularly depositors, knew their their profitability. to worry too much about its bad assets, can ensure a higher insurance cover by government for not ordering the session to banks well. Even the best of banks can have unless the bank is hiding the pile. keeping money through different family The writer, a consulting editor with Business be curtailed. Even Parliament staff, many of A bank collects money in the form some bad loans in their portfolio. That’s Some of the public sector banks have members as depositors. Standard, is an author and senior adviser to whom have worked there for decades, said of deposits and lends that money as the nature of the business. Let’s not get been in losses and have heaps of bad The investor’s way of looking at a Jana Small Finance Bank Ltd. they were intrigued at the obstinacy. credit and invests in bonds. Loosely perturbed over this as long as a bank is loans but since the government is their bank is different. If one wants to buy a Twitter: TamalBandyo

INSIGHT LETTERS

Using flexibility in fuel pricing we can achieve work-life balance in (RBI) Governor Shaktikanta Das as say- an effective manner. ing: "Never in the history of banks (in The government control on pricing continues via tax tweaks Varun Dambal Bengaluru India) have depositors lost money…” The point made is that depositor's Alongwayto go money is absolutely safe. This may mis- against the government is for raking in with the ad-valorem component of the lead gullible public to deposit money the moolah and not letting the consumers excise duty which meant the revenue The hanging of four convicts in the infa- in a bank, irrespective of its financial enjoy the full benefit of low global prices. collection from the Centre was fixed mous Delhi gang rape and murder case health. I remember that during the Companies benchmark products to global whether prices fell or rose. The state of December 2012 brought down the Second World War, numerous banks prices on which freight, government tax value added tax continues to be on an curtain on one of Independent India's mushroomed all over the country and and margins of both dealers and OMCs ad-valorem basis and they may now take most heinous sexual assault cases. The in the post-war period, almost all of are added. The reason they are bench- cues from the Centre to increase tax. case not only shook the conscience of them became defunct causing deposi- marked to global prices and are not cost- It was a month after the full decon- the country but also prompted the gov- tors to lose their money. Only a few based is because more than 80 per cent of trol in diesel pricing that the NDA gov- ernment to usher in concrete changes banks were saved by being merged into India’s crude oil requirement is imported. ernment in November 2014 started in its legal framework and make strin- a larger bank. The liability of the share- Unlike the earlier practice, the bench- increasing the excise duty on both petrol gent punishment the norm rather than holder of a bank is limited. If the value CHARGING POINT marking is not on full import parity but and diesel which prevented full pass- the exception in sexual crime cases. of bank assets are inadequate to meet only 80 per cent since 2006 when the UPA through of the price fall to the con- Needofthehour Ever since the death warrants were the bank's liabilities, in case of any liq- JYOTI MUKUL government asked OMCs to move to trade sumers. Though a precedent was set and issued against all the four convicts, they uidation process, its depositors will not parity pricing. the government again followed this on The recent lockdown because of the resorted to every available legal means get back their money, except the The fall in product prices, therefore, March 14 when it raised the excise duty coronavirus scare has affected the pro- to delay their hanging. While we have amount guaranteed under the Deposit he fall in global oil prices over will never be in the same proportion to on petrol and diesel by ~3 a litre, the ductivity of many employees across every reason to heave a sigh of relief Insurance Scheme (proposed to be the past 10 days has heightened crude oil since neither are they bench- intention behind moving to fixed duty the globe. The employers — private and celebrate the fact that justice has increased now from ~1 lakh to ~5 lakh). the expectation of cheaper fuel marked to crude prices nor is there a 100 was precisely this flexibility. If the gov- corporations and the government — been done, we should not be blind to I wonder even in the case of nation- Tamong retail buyers. But there is per cent import parity with products. ernment does not use the excise tool by have now switched to alternative the fact that we still have a long way to alised banks whether a 100 per cent outrage against the Union government for The falling rupee also plays a role but changing the fixed duty, its revenue will options. These include reduced go to ensure that women in the country repayment of deposits is guaranteed. milking this opportunity to earn some OMCs are hedged to a large extent stagnate, and any increase in tax collec- number of working hours and are safe. Statistics from the National However, the public may like to believe more revenue, and this outrage is also because their products are linked to dol- tion will solely depend on higher sales. enabling work from home. The move Crime Records Bureau still point to the that the government has a moral against government-owned oil marketing lar rates of a particular product. Moving back to an ad-valorem structure to encourage working from home is fact that there is no let-up in crimes responsibility to repay. To remove any companies (OMCs). They are told they are The most flexible component in will be bad for consumers since it will welcome at a time when the pandemic against women. More than the severity doubt in the mind of the public, some non-transparent about pricing. This was petroleum pricing is the tax. While that have a cascading effect on prices at a is on the rise and threatens public of the punishment, it is the certainty of clarification about the statement pur- said even when the government controlled does mean the government control on time of high global prices. For the gov- health and safety. the punishment that will act as an effec- ported to have been made by the RBI the prices of diesel, petrol, LPG and kero- pricing via tax tweaks continues, there ernment, too, it will lead to a fall in reve- The work from home option tive deterrent and will prevent governor should be urgently issued. sene and even now when OMCs are sup- is need for flexibility. Ironically, this free- nue in times like these when sale vol- should be explored not only during instances of women ending up as vic- Biswajit Sen Kolkata posedly free to fix prices of the first three. dom to change the tax component came umes are not expected to pick up such a crisis but even after it subsides. tims of sexual crimes. The Union petroleum ministry’s at the time of high global prices when because of slowing mobility. If regular commute by employees is M Jeyaram Tamil Nadu Letters can be mailed, faxed or e-mailed to: Petroleum Policy and Analysis Cell and the UPA government moved to specific The government is within its rights taken out of the picture, it may help The Editor, Business Standard OMCs do give out the price build-up of duty from the ad-valorem (percentage) to use the fixed duty on petrol and diesel in combating air pollution and beat- Clarificationneeded Nehru House, 4 Bahadur Shah Zafar Marg petrol, diesel and kerosene. For LPG, the tax structure in 2008. to its advantage. It is short of revenue ing traffic chaos. People-friendly pol- New Delhi 110 002 NDA government has stopped the prac- In 2005, the then finance minister because of the slowdown, some of which icies should now be framed to impose This refers to "YES Bank gets 60k crore Fax: (011) 23720201 · E-mail: [email protected] tice of giving information both on the P Chidambaram introduced an excise maybe of its own making. An additional work from home wherever feasible, line of credit from RBI" (March 19). The All letters must have a postal address and price build-up and also on the subsi- duty of 8 per cent plus ~5 for every litre revenue of around ~43,000 crore on an especially in the IT sector, and even article quotes Reserve Bank of India telephone number dised rates of LPG cylinders. This may of petrol, replacing 23 per cent excise annualised basis could be put into pub- in government offices. Most of the be because of the general distrust of the duty; for diesel the excise duty was kept lic use while ensuring that the not-so- government departments now rely on media and to mitigate criticism by giv- at 8 per cent along with an additional cheap fuel is used efficiently even internet and computers rather than ing less information out in the public specific duty of ~1.25 a litre. So, the Centre though the price elasticity of cooking paperwork. An online approval mech- HAMBONE domain. Nonetheless, the information only partially gave up on an ad-valorem and automobile fuel is very less. anism or a dashboard-tracking sys- on petrol, diesel and kerosene given out duty which meant the government con- Consumers can take comfort from tem can be created for government on their websites brings in pricing trans- tinued to take benefit of a fixed percent- the fact that global prices will continue offices to track the productivity and parency which is absent in most other age of the price as tax when global prices to be low and retail prices of petrol will quality when employees work from commodities across sectors. Do con- went up. It worked the other way round, continue to be around 8-10 per cent home. By experimenting with such a sumers know the price build-up of, say, too. If prices fell, the collection from the lower than the January level. They may model, governments can help hand wash products that are so much ad-valorem component also fell. become even cheaper despite the recent improve the productivity of their in demand these days? While presenting his Budget in 2008, excise duty hike and even if excise duty employees, as also reduce the burden Transparency aside, the criticism Chidambaram completely did away is hiked further. on traffic and environment. This will reduce carbon emission levels, and OPINION 9

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Volume XXVI Number 241 ILLUSTRATION: AJAY MOHANTY NEW DELHI | MONDAY, 23 MARCH 2020 Disinfect the economy Large policy interventions required in the near term health care requirement comes, the private he world is still coming to terms with the havoc caused by the outbreak sector will be essential. The pathway for health of COVID-19. India decided to shut itself down completely on Sunday, policy, then, lies in purchasing services from the but many parts of the country are likely to remain locked down for private sector. T weeks, with the Railways deciding to stop all passenger trains, includ- There is a possibility of a surge of patients that ing suburban service, till March 31. Such shutdowns, which are necessary to exceeds the capacity of the private sector. It would contain the virus, will of course have a significant impact on economic activity. be useful to analyse a hundred regions of the coun- try, and envision how things will work out if faced While the government has done well to announce an economic response task with certain adverse scenarios. There is a case for force under Finance Minister Nirmala Sitharaman to come up with measures creating plans for transient health care facilities to support the economy, the scale of disruption is such that solutions that which will be built, work through a peak period of would normally take months to debate in more placid times must be pushed requirements of a few months, and then be dis- through fast. The economy has anyway been decelerating for several quarters mantled. The management capability for doing this and government finances are already under significant stress. So, while the in India lies in the private sector. primary objective at the moment should be to contain the virus, the government Use the private Thus, when thinking about COVID-19, health will simultaneously need to minimise the economic fallout. policy needs to recognise that the dominant capac- ity in testing and health care in India lies with the Along with the central bank, it will have to intervene at multiple levels. private sector, and find ways to harness these capa- For instance, a number of businesses will face a cash-flow crunch and find it bilities. This will not be easy. difficult to survive. Regulatory forbearance alone may not be sufficient to save health care sector There is market failure in the relationship a large number of small businesses. The pandemic has also caused a severe between private health care companies and the disruptive impact on both the demand and supply side, which has the potential individual. Consumer protection in India in this to derail the growth story. Further, a lot of businesses have borrowed from The experience of government-funded health insurance field has been weak. We have quacks and incom- abroad and will find it difficult to roll over credit because of a shortage of US petent doctors, and we have mis-selling in the form dollars in the global financial system. Given the state of the Indian banks, it schemes has created knowledge on how to engage with of over-charging patients. will not be easy to refinance those businesses domestically. The Reserve Bank State capacity requires the ability to perform the the private sector, and that should be built upon homeostatic functions of human resources, facili- of India has taken some steps, but will need to do a lot more in the coming ties management, finance and accounting, and con- days. For example, to ensure liquidity in the economy, the RBI may need to n responding to the COVID-19 epidemic, there high, then individuals are more likely to self-iso- tracts with the private sector. One important source consider changing the definition of recognition of non-performing assets for is a need to surge the quantities of testing and late, which is much better than blunt state- of low state capacity in India is low capabilities in some time. A moratorium on debt repayments may also be required to help I induced lock downs. these four dimensions. health care. Most of the capacity in testing and companies tide over their immediate cash flow issues. health care in India is in the private sector. Hence, We are then faced with two possibilities: A strat- The Indian state finds it difficult to make con- The government will have to step in to compensate for loss of income, the thinking about health policy should envision egy of low testing and blanket isolation, and a strat- tracts with the private sector: (a) To do sensible particularly in the unorganised sector. A direct cash transfer has been advocated how to utilise these capabilities. The right combi- egy of high testing and judicious use of isolation. procurement, (b) to engage in contract manage- by economists and commentators, which could be a good way to meet the nation involves public funding and private produc- As the economic impact of the latter will be smaller, ment for the life of the contract, and (c) to pay peo- tion. This involves complexities of addressing mar- it is a more desirable path. ple on time. Whether it is defence procurement or crisis. The Uttar Pradesh and Kerala governments have taken some good ini- ket failure through purchasing, and government How can we get up to about 0.25 million public-private partnership infrastructure, we have tiatives on this aspect. It may also be worth considering suggestions made by capability in contracting. tests/day in India? Most of the testing capacity in seen difficulties at all these three stages. Complex industry associations that a fiscal stimulus of around 1 per cent of gross domestic Testing is extremely impor- India is in the private contracts are always incomplete ones, and rule- product, amounting to ~2 trillion, would be required to put money in the hands tant, when faced with an epi- sector. Whether it is the estab- of-law frameworks are required for renegotiation of people through the Aadhaar-based direct benefit transfer. But the steps have demic, for two reasons. The lished RT-PCR test for COVID- and dispute resolution. Private persons have been to be thought through carefully as the government will have to contend with a first, and non-specific factor, 19, or it is other innovations in repeatedly burned in their dealings with the state, shrinking tax kitty. It is by now clear that fiscal expansion is unavoidable, but lies in situational awareness. testing that are now coming and some of the best firms have decided to never that’s a big challenge as any significant increase in deficit would push up the For decision makers, public up, all these are fully within participate in government procurement. Officials cost of money and affect businesses that are already under stress. It is also and private, to understand the the capabilities of the private have come to dread contracting with the private situation and to make the right sector. Health policy should sector, which might draw the attention of the important to recognise India’s macroeconomic limitations. Unlike advanced decisions, the foundation of harness these capabilities. enforcement agencies. economies, fiscal and monetary stimulus after the financial crisis did result in sound facts is essential. There is a case for public The private sector in testing and health care suf- economic instability in India. Therefore, while large policy interventions would The second reason con- financing and private produc- fers from certain kinds of market failure. The Indian be warranted in the near term, policymakers should make sure that the way cerns a practical and sustained SNAKES & LADDERS tion of testing on scale. At a state fumbles when contracting with the private out of the current crisis doesn’t lead India to another one. path to reducing the spread of price of ~2,000 per test, an sector. These are long-standing problems, and while the epidemic. Extreme lock- AJAY SHAH expenditure of ~50 crore/day we may wish that they had been solved in the past downs are in fashion right buys 0.25 million tests/day. 25 years, the fact is that we are now in this place. now. But they are not sustainable for long periods. What about health care? While health care is a And yet, when faced with COVID-19, contracting Containing volatility The adverse impact on livelihood and lifestyle is private good, there is market failure in this field, and with private persons is the need of the hour, and extreme. Particularly in a country like India, where as COVID-19 is highly infectious, there is a large we must address these questions. Who is the private Sebi’s action pragmatic, but will not change market reality the stock of wealth in the hands of the bottom 70 externalities problem. This creates the case for pub- sector? What capabilities are at what locations? How per cent of the population is low, income interrup- lic expenditures on health care. to make purchasing work well? How can patients, he Securities and Exchange Board of India (Sebi) has taken several tion is a catastrophe. The economy can hold its So far, we in India have not got a surge of health firms, and officials be protected? The experience measures to reduce volatility across markets. The regulator has raised breath for seven days, but can it hold its breath for care requirements associated with COVID-19. But of government-funded health insurance schemes margins for stocks, and lowered the market-wide position limit for seven months? there is a possibility that this may come. The sup- such as Ayushman Bharat has created knowledge T stock futures to curb speculation. It has also set a limit of ~500 crore If there was enough data, isolation could be portive care required for COVID-19 is not that com- on how to engage with the private sector, and that on index derivatives positions taken by mutual funds, financial institutions, focused upon narrow regions (where there is an plicated, but it does require hospitals of a certain should be built upon. outbreak), narrow at-risk groups such as elderly minimum capability. and proprietary traders. It has imposed penalties at up to 10 times the prescribed men, and individuals who tested positive. If cred- The bulk of the health care capacity in India is The writer is a professor at National Institute of Public minimum for non-compliance. ible testing data shows that the dangers are indeed found in the private sector. Hence, if a surge in Finance and Policy, New Delhi These measures are broadly in line with actions taken by many overseas market regulators, which are all struggling to cope with the pandemic. European exchanges have placed restrictions on short trading. The Philippine Stock Exchange has been shut down. There have even been suggestions that the world’s premier stock exchange, the New York Stock Exchange, be closed. However, while tighter Water in the age of coronavirus controls might lead to less wild price fluctuations, the trend is likely to remain bearish. Even strong supportive action by the Federal Reserve and the European arch 22 (Sunday) was World Water Day. wash; washing hands frequently would mean we ater. Now, we need to get this right. Central Bank has not reversed poor investor sentiment. It’s clear that, until such As we lock down economies to battle need 15-20 litres of water per person; a household But the most important lesson of the current time as the threat of the pandemic recedes, investors are likely to avoid risk. They M coronavirus, we need to understand how of five would need 100 litres just for handwashing. pandemic is that we need to make sure everybody will seek the safety of hard currency instruments like US government bonds. critical the issue of water — clean, safe, and acces- And, even assuming that you do not leave the tap has access. This means that we must rework our This “risk-off” attitude has hit every emerging market hard. In March, the Nifty sible to all – is. Today, the only defence against the running when you rub your hands with soap, water water and wastewater management systems so that has already dropped by over 21 per cent in three weeks. One primary cause of the pandemic is that we wash hands frequently — for consumption will be high, but it is necessary to they are affordable for all; the current paradigm is downturn has been heavy selling by foreign investors. They have been net equity 20 seconds each time. The fact is clean water keep the virus away and to keep you safe. so expensive that it can reach some households but sellers to the tune of ~49,500 crore in March so far and have also sold ~49,200 remains the most important preventive health This then is the challenge. A large number of not all. The longer the pipeline to bring water from crore worth of rupee-denominated debt. Consequently, the rupee has fallen to measure in the world. So, people in India and vast parts further distances away, the higher the cost of sup- today, as we confront the new of the still emerging world do ply. This adds to the inequities in water distribution historic lows, breaching the ~75 barrier versus the US dollar. global enemy in the form of not have access to water, for- — large numbers of people in our cities do not get There are uncertainties about how long the lockdown will last, and the full coronavirus, the availability get whether it’s potable. How access to piped water supply. They get water in extent of the damage it will cause, both in terms of deaths and economic losses. of water will be a crucial deter- then will they be free of the tankers or depend on dirty and unreliable water COVID-19 is likely to have triggered a global recession. Right now, the world minant for a successful out- virus? The pandemic teaches sources for drinking and other needs, which in economy is struggling to contain a supply shock caused by lockdowns and ces- come in this war. us that we are as weak as the turn adds to their health burden. But this is not sations of normal economic activity. But it will soon become a demand issue as Most of us take comfort weakest link in the chain — all. The higher the cost of water supply, the less more and more people suffer income losses. Even before coronavirus surfaced, from the fact that we can get the contagion requires we the water utility has to spend on taking back the the Indian markets were widely perceived as overvalued, given the slower growth water from our taps and if we ensure that everybody has sewage and treating it. So, dirty water flows into find that this is not clean access to public health so that our waterbodies and the cost of cleaning this over the past seven quarters. The first six months of 2020 could be worse. Growth enough, we simply switch to nobody is left out and nobody becomes prohibitive. may slide further and the corporate results will be dismal. While sectors such as buying and drinking bottled DOWN TO EARTH can be the carrier of the virus. It is not enough any more for us to plan for more aviation, tourism, transport, and entertainment will be hit particularly hard, water. We opt out of the public SUNITA NARAIN It is the same with water. If water or more sewage treatment plants. We need there will be losses and slowdowns across the board. water system and move to pri- people do not have access to to re-design supply so that we cut the length of the There are a few silver linings to the current sell-off. Investors may find vate water, forgetting two clean water, they will not be pipeline, by investing in local water-harvesting value in beaten-down stocks and a weaker rupee could help improve India’s things. One, that the water we buy also comes from able to prevent the spread of the disease. The systems. We need to re-design demand by reducing competitiveness. Another positive is low energy prices, which help the trade public sources in most cases, and two, that even if contagion will not be controlled. So, access to clean water usage so that we reduce water wastage. We balance and assist in containing the fiscal deficit. But the bottom line is, markets we buy bottled water, we still excrete water as urine water is not just a fundamental right, it is need to re-design sewage management so that we hate uncertainty and the pandemic is the proverbial black swan, causing huge — the more water we use, the more sewage we will absolutely necessary for preventing and control- treat wastewater to return manure to the land and generate. If this sewage is not intercepted and then ling diseases. clean water to our rivers. But the bottom line is amounts of it. Until there’s clarity on the pandemic front, and a promise that taken for treatment, it will add to pollution and The good news is that we know what needs to that it must be affordable for all, or it will not be the disease can be contained, investors will continue their flight to safety. While degrade waterbodies. We are back to square one, be done. Water, as I have said before, is a replen- sustainable for any. Sebi’s actions are pragmatic, they will, at best, reduce volatility. Investors will in terms of dirty water. ishable resource; we can make sure that we harvest wait for good news on the coronavirus front before they start buying emerg- The water crisis is our health crisis. Take coro- every drop of rainwater, build local water storage The writer is at the Centre for Science and Environment ing-market stocks again. navirus. The 20-second hand-wash, advised to kill systems, change diets so that we eat water-prudent [email protected] the virus, would mean roughly 1.5 to 2 litres per crops, and recycle and reuse every drop of wastew- Twitter: @sunitanar

telling sorefreshing is that he usesall his meetings were held. And this is where broadly popular, legitimacy. Fritzsche’s From democracy to tyranny skills as a writer and historian to stop us populist antipolitics are evoked. As lens tilts here from the speaker on the from drifting into that sense of Fritzsche describesa rally where the podium to individuals in the crowd, like foreknowledge. speaker railed against the Weimar the young architect Albert Speer, who Weimar, antidemocratic majority of Nazi dictatorship may have been still After the November 1932 elections, system and its politicians, he translates became a convertafter hearing Hitler. Communistsand Nazis in the Reichstag, emergent and not entirely secure. But with a significant fall in the Nazi vote, the audience’s chorus as “Hang them up! Anditisherethatthefullvalueof no coalition could beassembled to make they were unmistakable. members started to drift away and at Bust their ass!” The pre-echo of “Lock tellinghisstorythrougheyewitness Parliament work. Events that made the Hitler of Christmas shoppers seemed more her up!” is audible. testimonybecomesclear.Fritzscheturns There was a time, in the 1970s and September 1934 into the prototypical interested in the new craze for yo-yos Mostly, though,Fritzschecreatesthe theirsurprise, ambivalence,enthusiasm 1980s, when the attention of historians dictator had not all happened yet: than in political change. On January 1, senseofangryenergythroughthe orhorrorintofargreateraccountthan BOOK REVIEW was on this level of high politics, seeing Banning other 1933, the Berlin Tageblatt asked whether repetitionofoneparamountchantthat mostotherhistorians.EvenVictor Hitler’s rise to power essentially as a political parties, its future readers largelydistinguishestheNazisfrom Klemperer,theJewish-turned- NICHOLAS STARGARDT HITLER’S FIRST result of political machinations and the the execution of HUNDRED DAYS: When would wonder, populiststoday:“Jewsdropdead!Juda Protestantprofessorwhosediarieshave fundamental opposition of all German Nazi radicals and Germans Embraced “What was his first verrecke!”Thischantrevealsarestless, beencitedmoreoftenthananyotherin ow doesthe rise of Hitler look since elitesto democratic government. But the death of the Third Reich name again, destructivepowerthatpermeatesthe thelast25years,isheldupagainstthe Hthe election of Donald Trump? since then, historians have moved on to Hindenburg were Adalbert Hitler?” narrative.Onday61camethenationwide mirrorofhisownhopesandaspirations. Historians and activistswere already consider other sectors of German still to come before Author: Peter Aswith Brecht’s boycottofJewishshops,which, Klemperer may have been reporting busy drawing parallels with fascist society, in part because focusing on Hitler could merge Fritzsche Arturo Ui, sofor combinedwiththepurgeofJewsfromthe on 14-year-old girls disrupting lessons demagogues as they watched Marine le elitesdoesnot illuminate the character the offices of Publisher: Basic Fritzsche: The rise publicservice,createdanewlineoflegal and intimidating their teachers by Pen gain surprising vote totals in the of modern right-wing populism. president and Books of Hitler is andsocialexclusion.Bytheendofthe singing Nazi songs, but even he was not 2012 race for the French presidency. But what Fritzsche doeswith chancellor, and eminently first100days,civilservantsandother completely immune to the needto Peter Fritzsche’s answer to these tremendous verve is to turn that before all new Price: $32 “resistible.” professionalswerebusyprovingthatthey construct a future bridge back to the questions has been to goback and question back to 1933: Hitler’s first101 military recruits Pages: 421 Especially hadnoJewsintheirfamilies. mainstream of German society. Peter reassess what we think we know about days marked the key moments, from his swore an oath of thought- Violence, spectacle, intimidation, Fritzsche has long sought to understand Hitler’s rise. Gone is the straightforward appointment as chancellor, which personal loyalty to him. But Fritzsche’s provoking are the eyewitnessesin this and terror were not just aimed at Germany’s cultural and political narrative of the old eliteslifting Hitler immediately unleashed full-scale 101 days certainly capture the scale of the book,Germans who had nothing to do bludgeoning opponents, silencing transformation from the inside. But it is into power. In Hitler’sFirstHundred political terror against the left, through upheaval and a swiftly coalescing sense with the machinations of the elites, who critics and empowering activists. They his capacity for turning the lens back Days, Fritzsche’s dramatic retelling, the March elections to the nationwide of where the new Germany was headed. watched events as they unfolded in the were also aimed at turning economic onto the viewer that makes his work so even in the final meeting between the boycott of Jewish shops on April 1 and If this historysounds familiar, that is street, in their workplaces and and political crisis into antipolitics and profound and soconvincing. key playersat 10.45 am on January 30, the disbanding of trade unions a month only because it has been recountedso apartment blocks, or frequentedthe antipolitics into the basis for a 1933, nothing was certain. With an anti- later. By May 1,the basic contours of the many times. What makes Fritzsche’s great halls where the Nazi mass fundamentally different, but still ©2020 The New York Times News Service 10 PERSONAL FINANCE NEW DELHI | MONDAY, 23 MARCH 2020 VALUE OF ~1 LAKH SENSEX GOLD SILVER FD (SBI) PPF INVESTED IN VARIOUS ASSET 1-YEAR 77,933 1,29,422 98,502 1,06,400 1,08,000 CLASSES 1-YEAR 77,933* 1,20,595 98,501.5 1,04,480 1,08,000 POST-TAX RETURNS *Note: Cumulative equity gains up to ~1,00,000 in a financial year are tax-free. 5-YEAR 1,05,856 1,58,800 1,00,705 1,38,624 1,51,757 All post-tax returns are calculated for an individual in the 30 per cent tax bracket, 5-YEAR 1,05,856* 1,52,920 1,00,635 1,25,966 1,51,757 without considering the indexation bene- POST-TAX RETURNS fit As on March 20, 2020, in ~; compiled by BS Research Bureau > . Don’t give up on international equities

jerk reactions. The low long-term co-relation between developed INDIAN BLUE-CHIPS REMAIN EXPENSIVE Risk in foreign equities also arises from lack of information. Investors need and Indian markets will reduce portfolio volatility NASDAQ 100PE ratioNSE 100PE ratio to treat this as an advantage rather than Autodesk Inc 167.8 InterGlobe Aviation 213.1 as a handicap. If you are an early investor SANJAY KUMAR SINGH over the past month). in an emerging market stock about The concentrated nature of the large- JD.com Inc 128.5 Avenue Supermarts 132.5 which less is known, that can work to he COVID-19 pandemic has cap rally in India over the past year or so Advanced Micro Devices Inc 86.9 Berger Paints India 87.8 your benefit, provided you are prepared routed stock markets across the had meant that many Indian blue chips to roll up your sleeves and do your home- Amazon.com Inc 81.7 Pidilite Industries 82.5 globe. In recent years, many had become far more expensive than work. Once a stock becomes widely cov- T Indian investors have forayed those in the US. Valuations of US blue Netflix Inc 80.4 Asian Paints 77.4 ered, it does not remain a bargain. into global equities — both directly and chips were more comforting. “This CoStar Group Inc 65.3 Procter & Gamble via the international mutual funds avail- remains true even today,” says Thakkar. Hygiene & Health Care 76.1 Foreign equities are for the long term: able in the country. If you are one of Current events have, in fact, At present, it may appear like an apoca- them, hold on to these investments. reaffirmed the logic behind geographical Vertex Pharmaceuticals Inc 53.6 Hindustan Unilever 73.4 lyptic scenario, with stock markets Resist the urge to withdraw from foreign diversification. Even though China is the Charter Communications Inc 48.9 Nestle India 69.2 across the world falling in tandem. “This markets and deploy the money in the epicentre of the COVID-19 pandemic, the Adobe Inc 46.7 HDFC Life Insurance Co 65.9 is a short-term phenomenon. Over the more familiar, and hence comforting, Shanghai Stock Exchange Composite longer term, there is a low correlation, domestic market. Index has declined much less (9.4 per NVIDIA Corp 46.5 Shree Cement 65.4 especially between the Indian markets cent) than the Nifty (27.6 per cent) over AVERAGE 80.6 94.3 and those in the developed world,” says Not every foreign stock will be hit: the past month. Top 10 companies by 12-month trailing P/E ratio on the two bourses Dhawan. He adds that investors should Though markets across the world have Compiled by BS Research Bureau Source: Bloomberg, Exchanges treat their foreign investments as a long- gone into a tailspin, stocks of some com- Basic premise still holds true: The term asset allocation cum diversification panies available on bourses abroad stand longer-term premise behind diversifying decision, and not get intimidated by the to benefit from the pandemic. "E-com- internationally still remains valid. The which means they are missing out on "Entering foreign markets like the US time to pick stocks with good fundamen- current rout. Also, many Indian inves- merce has benefited from practices like primary reason a stock investor with a global economic growth," says Vinay gives you the option to invest in global tals that are priced fairly. Even in the past, tors’ financial goals, like educating their social distancing and work from home. value bent ventures beyond his country's Bharathwaj, founder and executive chair- wealth creators," says Nandkishore value investing has shown superior child at a US university, are dollar- Amazon has actually hired more people stock market is to be able to pick bargains man, Stockal. Stockal is a global invest- Purohit, head–digital strategy and ana- returns in the long term, especially after denominated. Being invested in dollar and enlarged its employee base," says from a bigger pool. At any given time, ment platform that allows investors, lytics, HDFC Securities. HDFC has part- an economic crisis,” Bharathwaj. assets will help guard investors against Rajeev Thakkar, chief investment officer, markets across the globe are in different including those in India, to invest in mul- nered with US-based digital brokerage the long-term depreciation of the rupee PPFAS Mutual Fund. Thakkar is the fund stages — some are overvalued, some rea- tiple markets abroad. If you look up the firm DriveWealth and enables Indian Yes, risks do exist: One of the key risks against the dollar. manager of Parag Parikh Long-Term sonably valued, and others undervalued. periodic table of returns (like this one: investors to invest in US equities and of investing in foreign markets arises If the ongoing decline has left you Equity Fund, about 30 per cent of whose If stocks in your home market have https://bit.ly/2UtnzDJ), it becomes appar- exchange traded funds. from lack of familiarity. This can some- petrified, seek a good financial advisor’s portfolio is allocated to international become over-priced, then instead of wait- ent that market performance tends to COVID-19 is a global epidemic that has times induce a panic reaction in inves- help. As Shankar Sharma, founder and stocks. Shares of video-conferencing ing for years for valuations to return to rotate. No single market (or asset class) hurt markets across the globe. Though tors when markets witness a precipitous vice-chairman of the First Global group, companies like Zoom have also gained. turn reasonable, it makes sense to venture remains an outperformer all the time, India has far fewer cases, its market has fall. "Suppose that an Indian investor with over two decades’ experience of While both the Indian (28 per cent) abroad in search of bargains. which is why one needs to be globally not escaped the carnage. So, there is no holds both HDFC Bank and JP Morgan investing in international markets, and the US markets (31 per cent) have fall- Investors also venture abroad to diver- diversified. reason for investors to pull out of inter- in his portfolio. Imagine a situation says: “People venturing out to invest en over the past month, investors sify their portfolios geographically. “Your As consumers, Indians already spend national equities, as the home market where both fall 20 per cent. He is likely globally without getting proper advice exposed to the latter will be cushioned to portfolio risk increases if you have sin- liberally on global brands such as does not provide much greater comfort. to be far less perturbed about the decline or guidance on asset allocation are some extent by the decline of the rupee gle-country exposure. Most Indian inves- Amazon, Apple, Alphabet, Facebook, In fact, the downturn has made val- in the former than in the latter," says destined to lose. It’s a difficult game, against the dollar (the rupee has breached tors have nearly 100 per cent of their port- Pizza Hut, Starbucks, etc. So why not, as uations abroad also more attractive. “If Vishal Dhawan, chief financial planner, not to be played blindly via ETFs and 75 against the dollar, falling 4.9 per cent folios in Indian stocks and mutual funds, investors, also benefit from their growth? you are a value investor, this is the right Plan Ahead Wealth Advisors. Avoid knee- feeder funds.”

Telecom duopoly will USED CAR LOAN: RATES AND CHARGES: PRE-OWNED CAR LOANS Bank Interest Processing fees (~)* loan Part-prepaymentForeclosure IDEAL FOR THOSE rates (%) tenure (yrs) charges1 charges2 bebad for economy Punjab National Bank 8.55-9 1,000-1,500 5Nil Nil ON A TIGHT BUDGET UCO Bank 9.70-10.20 1% of loan amount A hike in tariffs is guaranteed. But it would (Max: 1,500) 5Nil Nil A longer tenure will mean not necessarily lead to higher ARPU Union Bank of India 10.10-11.70 Up to 0.50% of loan lower EMI but higher amount (Max: 15,000) 5Nil Nil State Bank of India 10.25-11.25 1,000-1,500 5Nil Nil doesn’t have a legacy 2G network interest cost so, 2G users would also have to Indian Bank 12.15 0.23% of loan amount migrate to 4G, with new handsets. (Max: 10,236) 5Nil Nil The government may choose to Dhanlaxmi Bank 12.20-15.70 1% of loan amount 4Nil 2% change spectrum allocation rules in a hurry, and sell the VIL assets HDFC Bank 13.75 -16 2,500-5,000 7Allowed after Allowed after 6 at great speed and reallocate that 12 months: 3-5% months: 3-6% spectrum. Or else, it will suffer the Federal Bank 14.55 1,500-2,500 5Nil Nil embarrassment of shutting down Axis Bank 14.75-16.75 % of loan amount MARKET INSIGHT 300 million users. (Max: 6,000) 55%5% DEVANGSHU DATTA In the event of VIL shutting down, lenders would also be in a 1. Percentage of part-payment amount. 2. Percentage of principal outstanding. Processing fee is in ~ except where stated as percentage of loan. Rates and charges fix until bankruptcy resolution as on March 18, 2020 Source: Paisabazaar.com The telecom sector is fast took place. They would surely take BINDISHA SARANG n The rate of interest on this loan total cost of the loan. approaching its endgame. The a large haircut. The government n Salaried individuals and varies from 8.55-16.75 per cent. n Most banks don't charge a latest Supreme Court hearing would also not miss out on a large self-employed professionals can n You can get a loan tenure of up to part-prepayment penalty. Some makes it clear that there will be chunk of the claimed AGR. So apply for used car loans. five years, or in some cases, even charge up to 5 per cent of the no easy reworking of adjusted there is every incentive for the seven years. outstanding loan amount. gross revenue (AGR) dues. The government to find a way out of a n Some lenders offer flexi EMI car discrepancy between the October mess largely of its own making. It loans that allow you to repay your n Longer the tenure, more affordable n The loan amount goes up to calculation of what’s owed, and might have to seek a legislative loan according to convenience. the EMI, but that also means higher 90-100 per cent of the car’s value. self-assessment by telecom serv- solution, rewriting laws to forgive ice providers amounts to over part of the dues. ~82,000 crore. A duopoly would be bad for the There is one faint sliver of hope economy. Tariffs would be hiked successful colleagues.” if the court agrees to the govern- for sure. There would be no Anexpensive puff Cigar versus cigarette ment’s suggestion that the dues be demand for 5G spectrum and payable over 20 years, and calcu- those auctions would be post- Apart from the pricing and the way the lated at a reduced interest rate of poned indefinitely. Airtel would two are smoked — cigarettesare inhaled, 8 per cent instead of 12 per cent. lack the resources to invest in A classy cigar is new-age while the cigar is taken as a mouth sack — We’ll have clarity on that at the building more capacity on the smoker's equivalent what sets the cigar apart is the way the next hearing in April. existing network. There would be tobacco leaf is fermented, cured and Even if the court agrees to this big job losses, since most of the of French wine aged. Says Kakkar: “The difference starts formula, it may not be enough to 13,500 employees of VIL would not from the construction. Cigarettesare save Vodafone Idea (VIL). As of be absorbed. NAMRATA KOHLI wrapped in paper, with crushed tobacco December 2019, VIL had over The resulting scenario would mixed with ash and sawdust. A cigar, on ~27,500 crore in debt, be lose-lose for every- “The culture of tobacco connoisseurship the other hand, has a minimum five plus over ~88,000 crore Sectors like body. Other industries has long been exemplified in the cigar. A layers solely of plain in deferred spectrum software and would suffer from symbol of wealth and power, its smokers Beware that tobacco leaveswith no liability. It has less than e-commerce that poor quality of serv- have always been criticised for their cigars have other element. The ~7,000 crore of cash on are dependent ice. This would hurt extravagance, with the most expensive higher leavesare cured, the balance sheet after on telecom will software, entertain- and prized cigars being Cuban.” This is nicotine fermented, and then paying one instalment suffer. There may ment, e-commerce, how historian Jarrett Rudy traced the content than aged. The process not of self-assessed dues. be no demand banking, government origins of cigar smoking. From Cuban cigarettes. only enhances flavour In Q3 (October- for 5G spectrum service delivery, IT, to dictator Fidel Castro to Indian cigar czar Even if you but also gets rid of extra December 2019) Ebitda name just a few tele- Chetan Seth, there is a growing breed of don’t inhale tar and nicotine, and (Earnings before interest, tax, com-dependent industries. India cigar aficionados across the world, cigar smoke, external elements like depreciation and amortisation) would fall behind in the race to despite the campaign against tobacco. you could pesticides. Cigars do was just about ~3,400 crore. It’s induct 5G, as well as slow down Marketers talk of premium cigar as a WHAT A SINGLE CIGAR absorb the have nicotine, but they hard to see how it can meet its out- the adoption of Internet of Things, symbol of the good life. A single stick nicotine are the purest form of standings. The parents are unwill- etc. can set you back by at least ~1,500. CAN COST YOU through the tobacco and hence the ing to throw more into a losing Can policymakers find a prag- Upmarket brands such as a box of 25 lining of lesser of the two evils.” proposition. matic solution to stave off this pes- Cohiba cigars can cost a staggering Brand Price range (~) your mouth Healthcare The Tata Group also owes simistic scenario? If they can, we’ll ~80,000-1,25,000. No wonder, the place Cohiba 3,200-5,000 practitioners, however, about ~14,600 crore over and see relief rallies in April. If not, for this expensive indulgence is the Gurkha 2,200-7,000 assertthat there is “no safe form” of above its self-assessed dues, while investors need to re-evaluate the capital's five-star hotels, such as The tobacco. Like cigarettes, smoking cigars Airtel owes about ~31,000 crore survivors. Let’s assume that Airtel Oberoi New Delhi, Gurugram and Leela Dunhill 2,200-5,000 too puts you at the risk of cancers of the more. Airtel can meet its dues and Jio will eventually absorb the Ambience, which have exclusive cigar My father 2,200-4,500 mouth, throat and lung. Says Kirti even if it has to fork out the bulk of the 300 million VIL sub- lounges. Recently, India’s first Habanos Davidoff 2,000-6,000 Chadha, head of laboratory, Metropolis Supreme Court mandated amount scribers. Those VIL users have low Terrace opened at Vasant Kunj in by October. But it won’t have average revenue per user (ARPU). collaboration with the members-only Acid 1,900-3,000 Healthcare much in the kitty for capex. A hike in tariffs is guaranteed. club, Home. Mumbai has its own sea- H Upmann 1,800-3,800 “Cigarscontainhigherlevelsofnicotine Reliance Jio has far less AGR liabil- But it would not necessarily lead facing lounges such as The Dome at the thancigarettes.Evensecond-handsmoke Romeo Y Julieta 1,200-2,000 ity but it would clearly like to ease to higher ARPU. Telecom usage is Intercontinental and Atrium at Taj A vintage 1990 Tubo Box of cigar. The price posesarisk.Evenifyoudon’tinhalecigar out of the investment cycle. highly price-elastic. Both voice Land's Ends. Black Tiger (Indian) 850 of exotics can range from ~4,000 to ~2 lakh smoke,youcouldabsorbnicotinethrough If VIL goes bankrupt, the sector minutes and data consumption Jose L Piedra 700-1,200 a box or more. (Top) A single box can hold theliningofyourmouth.” becomes an effective duopoly, shot up when tariffs were reduced. Keybrands 3-50 cigars Source: Fox Cigars with two private businesses, Usage might ease down and ARPU According to Rahul Rai, chief executive Lighting up alongside the ailing PSUs, BSNL may stagnate, if tariffs are hiked. officer, Fox Cigars Inc, the top 10 cigars Who is a connoisseur? enthusiasts are generally the well-heeled Cigars are enjoyed in a celebratory fash- and MTNL. VIL has about 300 Airtel and Jio have substantial in India, sales- and brand value-wise, The typical age bracket for a connoisseur and well-travelled types,” says Sapna ion, usually with friends. Says Joy million subscribers, many of debt. Neither is likely to be cash- include Cohiba, Romeo Y Julieta, My is upwards of 35 years. Chetan Seth, the Kakkar, business development manager Sarker, head-operations, Cigar whom are still on 2G. There is no flow positive for a while. BSNL is father, H Upmann, Davidoff, Acid, Cigar Czar of India who introduced at Cingari. According to Nancy, manager Conexion: “Single malt and cigars rep- way that approximately 25 per unlisted but incurring huge losses. Gurkha, Black Tiger (Indian), Dunhill Cuban cigars some 20 years back, and of Cigar Connexion at New Delhi's Khan resent elegance, relaxation, and a taste cent of India’s subscriber base can Telecom could turn into a dead and Jose L Piedra. Prices of regular retails through his brand Cingari, Market: “Politicians, business tycoons for finer things. They are both heavily be instantly ported out to the zone if there are no policy solu- cigars range from ~400-4,000 and that compares cigars not to cigarettes but to have been regulars. These days a lot of reliant on age, proper timing, and the Airtel and Jio networks. Jio tions to the current morass. of exotics, from ~4,000 to upwards of luxury items such as French wines, Swiss young lawyers buy cigars because they right combination of ingredients to ~2 lakh for a box. watches, and German cars. “Cigar like to emulate their older, super- make a great blend.” NEW DELHI | MONDAY, 23 MARCH 2020 ECONOMY 11

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senger does not want to travel, ticket deposit receipt can Fuel demand may burn... > FROM PAGE 1 be filed within three months of the date of journey at the STT collection up station instead of the existing rule of three days. Another oil-marketing company executive indicated Nation responds... The extraordinary decisions were taken a day there was a 4-5 per cent dip in consumer sales in the past after the Railways reported three incidents (12 posi- week. “We have seen more decline in petrol,” he said. A meeting of chief secretaries of all the states held by tive cases) of people asked to remain in quarantine Road-sector experts have cautioned movements of Cabinet Secretary Rajiv Gauba noted there was “over- travelling on trains and amid an exodus of people commercial vehicles in the coming weeks will slow. 5% on higher whelming and spontaneous response to the janata cur- from urban areas to their home states, raising fears of The executive also attributed the decline in demand to few”. According to trade bodies, as many as 70 million the virus spreading to the countryside. "I don't think the fall in crude oil prices. “Our data is based on what traders and 60,000 markets joined movement. The the railways' decision will have any major financial dealers are picking from us. Two factors are at play. One, Confederation of All India Traders has asked the PM to implications because passenger traffic is running in there is weak retail demand, and two, dealers cut down declare an economic package for domestic trade. losses, subsidised by revenue from freight opera- on inventories when crude oil prices decline,” he said. derivatives trade In Mumbai, passengers arriving at the airport faced tions," said V N Mathur, former member (traffic) of The executive also said things in India were chang- inconvenience. “We waited for 10- the Railway Board. ing rapidly, and demand during the week starting 15 minutes but there were no taxis, Of the three deaths reported on March 23 could be lower because of the shutdowns till Tax payouts from dividend distribution tax are up 2% so we had to walk to the nearest OVER 80 DISTRICTS Sunday, a 38-year-old man who had March 31, announced by various state governments. railway station," Vaishali Prashant, UNDER LOCKDOWN recently traveled to Qatar, died of IOC has estimated a 10-11 per cent demand decline SHRIMI CHOUDHARY who arrived from Chennai, said. renal failure at Patna's All India in March, with diesel consumption falling over 13 per New Delhi, 22 March In Delhi, women protestors at 1 (district): Chandigarh, Institute of Medical Sciences. In cent, jet fuel 10 per cent, petrol 2 per cent, and bunker Shaheen Bagh kept their slippers at Chhattisgarh, Himachal Maharashtra, a 63-year-old man fuel 10 per cent, said Emkay. Against 2 per cent oil he weak markets have the site as a symbol of their battle Pradesh, Madhya Pradesh, admitted to a private hospital in demand growth year-on-year built for the next year if not had an impact continuing, but stayed home. Odisha, Puducherry, Mumbai died this morning. In one-month volumes fall by 25 per cent, the full-year T on the government’s The Congress welcomed the Gujarat, a 69-year-old man died at a demand would be flat, it said. securities transaction tax people acknowledging their grati- Uttarakhand hospital in Surat. City gas distribution (CGD) companies have stated (STT) kitty, which went up tude for those providing essential 2 (districts): J&K, UT of Ladakh, the initial hit will be 5-7 per cent in Delhi and 7-8 per cent about 5 per cent year-on-year services, but said it was time to ask West Bengal Automakers... in Mumbai because piped natural gas and compressed (YoY) in the current fiscal whether health workers had suffi- natural gas supplies may be affected. In the case of year to date. cient masks, rubber boots and oth- 3 (districts): Punjab, Fiat Chrysler Automobiles together CGD, against 10 per cent growth estimates if one month According to an official in er such protective gear. Congress Andhra Pradesh, Tamil Nadu with Fiat India Automobiles (FCA), records 10 per cent de-growth, full-year growth would the Income Tax Department, spokesperson Randeep Singh FCA’s joint venture manufacturing come down to 8.5 per cent. STT collection stood at ~11,247 Surjewala said there were only 4 (districts): Rajasthan facility in Ranjangaon, said: “The Petrol-pump dealers have stated that the overall hit crore for fiscal year 2019-20 30,000 ventilators for a population 5 (districts): Haryana, suspension is in response to the could be 25-30 per cent, the report said. Fuel outlets (FY20), until March 15, against of 1.3 billion, and one 'isolation bed' Karnataka, Telangana increasing prevalence of positive have sought to lower outlet timings. the targeted ~12,500 crore. The on every 84,000 Indians. He said COVID-19 cases in Maharashtra, par- “In the last two weeks, overall demand has fallen 15- department is hoping that the people needed to question why the 6 (districts): Uttar Pradesh, ticularly in Pune.” 20 per cent,” said Ravi Shinde, former president of the target will be crossed. government had tested only 16,109 Gujarat Hero MotoCorp Chairman Petrol Dealers Association, Mumbai. “In the current The reason for the higher MARKET TURNOVER (in ~ trillion ) people so far and why there was Pawan Munjal, through two digital scenario, where citizens are being asked to stay home, STT is heightened volumes in blackmarketing of hand sanitizers. 7 (districts):Delhi town hall meetings held in quick I would have expected a 50 per cent dip in sales, which Cash F&O Total the futures and options seg- Nationalist Congress Party 10 (districts): Kerala succession last week, conveyed the has not happened, so far. The turnout is still in signifi- ment during April 2019 to FY19 87 2,376 2,463 (NCP) leader Sharad Pawar organisation’s commitment to stand cant numbers, specifically of two-wheelers.” Maharashtra January 2020, even as vol- FY20 #933,401 3,494 appealed to MPs to skip by the employees despite the severe umes fell in February. So far Parliament from Monday. disruptions caused by the ongoing # Data up to March 20, 2020; combined for BSE and NSE Source: Exchanges > BS SUDOKU # 3005 this fiscal year, equity deriva- Compiled by BS Research Bureau “Request all MPs of NCP – Lok Sabha and Rajya Sabha situation, the firm said. tives turnover have gone up 43 — not to go back to Delhi, please stay where you are Fiat would continue to be staffed with a small num- per cent, while overall market February, the sharp sell-off collection was ~57,114 crore, and assist government agencies help citizens to fight ber of employees, who are engaged in emergency serv- turnover across both cash and sparked by the coronavirus according to data. coronavirus pandemic,” he tweeted. ices, it added. “There will be no retrenchment of any derivatives segments was up outbreak pushed the Nifty and This is because dividends Pawar and several politicians, including those from plant employees as a result of the plant closure and all 39 per cent. Sensex into bear territory, payouts were advanced by the the Opposition, however, stepped out of their homes at will continue to receive their salaries during this closure Even tax payouts from eroding billions of rupees of companies in February after 5 pm to show their gratitude to emergency service period,” the company said. dividend distribution tax (DDT) investor wealth. Total deriva- the Union Budget announced providers. Trinamool Congress said it was withdrawing Hyundai, however, said they would continue pro- are up 2 per cent because of tives trading volume fell 22 per changes in DDT structure. The its MPs from the Parliament session. It blamed the gov- duction while taking necessary precautions and welfare changes in the tax structure cent in February, while in the Budget announced abolition ernment for postponing the decision to call an early end of company' customers, employees, dealers and ven- from April 1, which require cash segment total volumes of DDT of 20.56 per cent paid to the Budget session of Parliament. dors. TVS Motor said its facilities were operating in firms to shell out more on divi- were down 2 per cent. by companies, but said taxes The government also tried to counter some of the staggered shifts. Ashok Leyland said it was continuing dends in the next fiscal year. Introduced in 2004, the on dividends would be levied misinformation with the Press Information Bureau with the production as of now. Typically, collections had STT is levied on all stock mar- on individuals. tweeting that the “clapping initiative at 5pm is to express The economic condition of Gurugram and Manesar's declined during weak market ket transactions. The tax is in Market players say compa- gratitude” to those providing essential services, and industrial areas' has already been grim as the slowdown conditions or fall in stock the range of 0.017 per cent and nies are advancing their that it will not create any energy that could kill the virus. has decelerated production. Less than 15 days are left to prices, but this year’s activity 0.125 per cent of the transac- dividend payouts to lower the In Kolkata, as sirens blared at 5 pm, Governor go for an emission norms overhaul in the country and on the futures and options tion amount. The STT rate for tax burden of promoters, who Jagdeep Dhankhar came on the grand staircase of Raj dealerships have to liquidate their BS-IV stocks. The front is helping tax collections. delivery-based trades is 0.1 per will have to pay tax in excess of Bhavan to applaud essential service providers. industrial belt is home to an estimated 1,000 medium For instance, collection cent, while that on intra-day 40 per cent from April. In and small ancillary units. Each units employs a work- dropped below ~500 crore in trades is 0.025 per cent. February, about 200 compa- 80 districts to be isolated... force ranging from 20 to 200 in the area. SOLUTION TO #3004 Very hard: FY13 amid a downturn in the Similarly, the tax levy on deriv- nies declared interim The ultimate impact of coronavirus is still getting market. Since then, collection atives trade is between 0.01 per dividends, which was over Those affected by the railways order on Sunday include monitored by the Indian automakers, as in the case with has been on the rise thanks to cent and 0.05 per cent, unless double that of the correspon- premium trains, mail/express, passenger trains, sub- all the sectors, forecasts are being jettisoned. "We have Solution an upward trend in the mar- an option contract is exer- ding period last year. Payouts, urban train services, Kolkata Metro, and the Konkan received the information that two of our members in tomorrow ket. In FY19, the government cised. too, were higher than last year. Railway services. However, bare minimum services Pune have been asked by the local police to shut their collected ~11,528 crore from Meanwhile, DDT collection Total direct tax (net collection) will be provided in suburban trains and Kolkata Metro, dealerships." Ashish Kale, president, Federation Of HOW TO PLAY STT, of which Mumbai con- (up to March 15) stood at up to March 15, however, till late Sunday. Automobile Dealers Associations (Fada). Fill in the grid so tributed ~11, 235 crore. ~51,873 crore. Of this domestic slipped by 5.3 per cent Full refunds for all cancelled trains can be taken till An industry analyst said, "The problem could also that every row, The market performed rel- companies paid ~46,720 crore and stood at ~9.57 trillion June 21. The railways, as a special case, relaxed refund arise on the demand side as people may defer buying every column atively well between April 2019 and mutual funds payout was against the revised target of rules for tickets generated at reservation counters. cars now, and sales volumes getting affected with and every 3x3 and January 2020, but in ~5,153 crore. In FY19, the total ~11.7 trillion. According to the guidelines, if a train runs but a pas- reduced number of dealership visits." box contains the digits 1 to 9 12 THE SMART INVESTOR NEW DELHI | MONDAY, 23 MARCH 2020 BSE 200: TOP 5 GAINERS OF LAST WEEK QUICK TAKE: UPL ATTRACTIVELY VALUED AFTER CORRECTION “WE THINK THAT VOLATILITY NEEDS TO STABILISE BEFORE BSE price in ~ Mar 13, 2020 Mar 20, 2020 % Chg UPL has fallen by nearly 50% over the past month on worries THE BROADER MARKET CAN HEAL. THERE IS PRECEDENT Cadila Healthcare 251.35 286.10 13.83 related to growth in international markets and a stressed FOR THIS; IN 2008, 2011, 2015 AND 2018, EQUITY Adani Green Energy 124.80 142.05 13.82 balance sheet. Analysts feel that the concerns are overdone as Adani Transmission176.45 195.50 10.80 prospects driven by its core Latin America and Indian VOLATILITY PEAKED WELL AHEAD OF THE ULTIMATE LOW” ONGC65.90 72.45 9.94 operations remain strong. Stock valuations are also attractive ANDREW SHEETS, ITC162.25 175.55 8.20 at 6 times estimated FY21 enterprise value to operating profit. Chief cross-asset strategist, Morgan Stanley > .

STREET Few bottom-fishing opportunities SIGNS

Focus on nine F&O stocks in blue-chip stocks The Securities and Exchange Board of India’s (Sebi’s) move to tighten the norms for derivatives trading has placed the spotlight on nine stocks in the derivatives Over half the CNX100 stocks still expensive; Nifty, too, HOW VALUATIONS STACK UP segment. Analysts say Adani Enterprises, in higher valuation zone compared to 2008-09 PE (x) on Indiabulls Housing Finance, Vodafone Mar31, '09 Mar20, '20 Idea, Jindal Steel, Just Dial, NCC, Punjab HAMSINI KARTHIK 2019’s valuation high of 26.3 times, EXPENSIVE BETS National Bank, PVR, and YES Bank will Mumbai, 22 March makes the market look most Berger Paints 13.4 87.8 enter the “ban period”, where fresh appealing in the last six years. But Pidilite Industries 19.2 82.5 positions will be barred and only he 5 per cent correction here’s the catch. Global econ- unwinding of existing positions will be past week and the omies, including India, may be Asian Paints 19.0 77.4 allowed. Further, there are over a dozen frontline indices almost headed for another wave of reces- Hindustan Unilever27.673.4 other companies which could be on the T retracting to their 2014- sion and if that be the case, the Titan 21.2 57.2 verge of entering the “ban period”. “While 15 levels have resulted in some Nifty trades significantly higher CHEAPERTHAN GFCVALUATION one cannot say for sure if these stocks will temptation creeping into inves- compared to the global financial Power Finance8.4 2.4 correct or rally. However, one can expect tors’ mind. They are thinking: Is crisis (GFC) levels in 2008-09. ONGC8.4 3.0 frenetic activity as traders align themselves now the time to bottom fish What also complicates the Hindalco Inds. 16.2 4.3 to the new rules,” said an analyst. large-cap stocks? But no, the matter is that when about a decade HPCL 12.0 4.7 SAMIE MODAK grand stock market clearance ago, the markets slipped into the NMDC 14.2 4.8 sale may not offer the best price recessionary phase caused by the MF distributor commissions to be hit GFC: Global Financial Crisis; *12-months trailing valuations yet, for one to turn optimistic on meltdown of large financial insti- Source: Capitaline Compiled by BS Research Bureau Persistent selling in the markets has the markets and more so on tutions, abundant injection of significantly eroded commission-linked India’s blue-chip stocks. liquidity was a good enough solu- shutdown is impacting the finan- the demand and profit fronts. Petroleum, Bajaj Auto, Cipla, and thing is to at least get started and investor assets, handled by mutual fund “The Indian markets are react- tion. But, this time around prob- cial markets. A series of events and While valuations of HDFC, HDFC Aurobindo Pharma are among not to panic and sell-off. (MF) distributors. Industry participants say ing to what’s happening globally, lems are different. “In 2008, ahead uncertainties lingering for long Bank, L&T, and Reliance stocks trading below their GFC val- “Historical data has shown that this will further erode commissions on and while some stocks look com- of the market crash, the economy and sentimentally, things are dif- Industries are near-about their uation levels. investments made in challeng- which MF distributors were depending on pelling after the correction, it is was at its peak. In the current cor- ferent from the GFC times.” GFC levels, they haven’t become This is why domestic fund ing/volatile times have generally after the scrapping of upfront commission still early to predict if equities have rection, several economic factors This is why, experts feel, India completely affordable just yet. managers advise investors not to been quite rewarding for inves- by Sebi. "Large asset base was helping ebbed or there could be more fall,” have been depressed for some Inc’s earnings for the two quarters Names such as JSW Steel, take their eyes off equities in the tors over the medium to long some individual distributors as this still cautions Sunil Singhania, founder, time,” says Mahesh Patil, chief starting March 2020 may come Adani Ports, Mahindra and current downturn. “The market term,” he adds. yielded decent trail-based commissions. Abakkus Asset Management. For investment officer-Equity, Aditya under severe pressure. When seen Mahindra, Hindalco and may bottom out one day, but all Therefore, while the large-cap However, erosion of asset base will him, it’s critical to see some more Birla Sun Life Mutual Fund. Also, in this context, valuations of Motherson Sumi faced with stocks will not bottom out on the stocks may not have turned deepen the cut on distribution income," clarity on where the market is as Mihir Vora, director and chief stocks, such as Tata Consultancy extreme demand and supply con- same day as the overall indices. entirely attractive, depending on said an individual adviser. "Higher asset headed to before he can go all out investment officer, Max Life Services, Titan, Asian Paints, straints, where growth has been Investors may want to keep a list the individual risk profile, the cur- base had become crucial in the industry to on stocks. Insurance, points out, the GFC was Dabur, Britannia, and Havells, under severe pressure for two– of stocks ready,” says Vora. In rent market conditions offer an absorb cost of client acquisition and other At 16.9 times 12-month trailing a case of financial sector stress despite the correction, remain three quarters, are some that have addition, Sampath Reddy, chief opportunity to accumulate some operational costs, after removal of price-earnings (PE); a correction impacting the real economy in the expensive for investors consider- become cheaper now. That said, investment officer, Bajaj Allianz of them, though not in large quan- upfront payouts," he added. of 36 per cent since November West. “Today, a forced economic ing the growing uncertainties on ITC, Indian Oil, ONGC, Bharat Life Insurance, says the prudent tities, just yet. JASH KRIPLANI Coal India’s m-cap less than dividend payouts Shares of Coal India plunged to all-time Fund managers weather market storm better Rush for buybacks to lift sentiment low of ~122 last week. At that price, the state-owned company was valued at UJJVAL JAUHARI & HAMSINI KARTIK as well as an increased return profile, MAKING USE OF PRICE FALL ~75,000 crore — less than the total JASH KRIPLANI the 23 schemes in the category having New Delhi/Mumbai, 22 March mainly return on equity (ROE) which in dividend of ~79,000 crore paid by the fallen less than their benchmarks. In turn helps bring stability to share prices, (~crore) Buyback Debt Cash in company in FY14 and FY15. Coal India Investors putting money in actively- the past three months, the Sensex is With the equity markets going down so according to experts. Many a time, buy- price (~) Amt Equity (x) hand * made its stock market debut in October managed mutual fund (MF) schemes down 30 per cent, the BSE Midcap sharply, certain companies and promot- backs are prompted when promoters' Sun Pharma 425 1,700 0.2 6,662 2010. In the IPO, stock was priced at ~245. are likely to have seen less wealth and BSE Smallcap have fallen 24 per ers have opted to make the best use of stake in the company falls and the Supreme Petro 185 63 0.0 53 Now, the stock trades at nearly half the erosion than those who have cent apiece. the situation. Buyback announcements owners decide to utilise lower share Thomas Cook 57.5 150 0.0 1,025 issue price. Even if one adds all the switched to index-linked ‘passively’ The data points out the relevance are on the rise and even marquee prices and valuations to their benefit GHCL 250 80 0.5 59 dividends paid since listing, the managed schemes. Passive funds of active fund management, which names, such as Sun Pharma, find this a and raise their stake in the firm. Higher adjusted stock price works out to ~290. gained popularity as fund managers had come under question in the past lucrative way of lifting the mood around promoter holding and return ratios in Granules India 200 250 0.5 107 Market players said the stock has proved under-performed index returns last few years given the failure of most their stock prices. The latest to join the the longer term will also mean firms can Dishman Carb.150 75 0.2 116 to be a value trap. “It has been a decade year, Sample this: 94 per cent of large- schemes to beat benchmark returns. bandwagon are Dalmia Bharat, Motilal benefit from these moves when times AsterDMHealth. 210 120 1.7 184 since Coal India’s listing. The stock has cap schemes have fallen less than “This re-iterates our stance that in Oswal Financial Services and turn good and when they (companies) * cash & bank balances as on Dec 2019; always topped the dividend yield charts, their benchmark indices over 3- Indian markets, active fund Ramkrishna Forgings, which approach investors for raising capital. Source: Capitaline; Complied By BS Research Bureau but failed to make real appreciation. It’s month period, data sourced from management has an important role to announced their buyback plans on Certain experts say buybacks and an example why the market doesn’t value Morningstar shows. About 90 per cent play. Even during past bull markets, Saturday. Earlier in the week, Emami the process of promoters increasing of buyback tax, promoters may consider PSUs,” said an analyst. of the schemes in the midcap we have seen actively-managed and Sterlite Technologies also disclosed their stake in companies are features of buying shares directly from the market, SAMIE MODAK category have fared better than funds slightly underperform indices their intention to buyback shares. Prior a typical bear market. In such times, as has been the case in recent years. their benchmarks. But, in the and fall less than their benchmarks to these companies, names, such as companies believe cash could be put to From an investors' standpoint, while case of small-cap schemes during the bearish phase,” said Thomas Cook India and Granules India, better use through buybacks rather than buyback indicates promoter’s confi- EVENTS THIS WEEK the share is down at 73 Kaustubh Belapurkar, director (fund announced buyback schemes. other activities. "It’s natural for com- dence in their business and future pro- per cent, with 17 of research) at Morningstar Investment. Experts like Vikas Khattar, head of panies to use the current situation to spects, it does not necessarily have to Date Particulars Across large-cap, mid- and small- equity, Capital Markets and Financial announce buybacks as it is the easiest lure them in terms of buying stocks 23-Mar US - Chicago Fed Nat activity caps, 87 per cent of the schemes have Sponsors Group, Ambit Capital, say that way of improving their return profile," which have announced such buybacks. figures fallen less than their benchmarks. buyback is a good capital allocation said U R Bhat, director and chief invest- Also, for them, whether to participate Ex-dividend: BPCL, ONGC, strategy, where the management feels ment strategist, Dalton Capital Advisors. in a buyback plan should depend on Indian Oil & RBL Bank SHOWING RESILIENCE that the stock price has corrected The equation, however, would be a their requirement for cash. "Their equity 24-Mar US - Markit PMI services, Most actively-managed schemes have done sharply, and is well below the intrinsic bit different if promoters, too, propor- exposure in overall portfolio and their manufacturing & composite better than their benchmarks recently price of the business. "However, it tionately participate in the buybacks, own view on the company’s prospects US - new home sales should be executed only where busi- which may not necessarily be a positive will play an important role," explains Outperforming * (%) Avg returns (%) UK - Markit/CIPS PMI nesses have a strong balance sheet and signal. For now, as times remain tepid, Deepak Jasani, Head - Retail Research, Category 3-mth6-mth3-mth6-mth manufacturing, services & surplus cash, after providing for adequ- many say there could be more buyback HDFC Securities. Kartik Soral, senior Smallcap 74 78 -15-11 composite ate cash to brace through challenging announcements. "However, much will fund manager-equity, YES Asset Ex-dividend: Larsen & Toubro Midcap 90 90 -15-8 times in the near future," he adds. depend on the government's willing- Management Company, says buybacks & Piramal Enterprises Largecap9489-23 -14 Buyback proposals also send a posi- ness to relook the 20 per cent tax levied do provide investors money in the near 25-Mar US - FHFA house price Note:*Percentage schemes in respective category that have tive signal to bump up the Street sen- on buybacks" says Pankaj Bobade, head- term. "But, sometimes, they end up los- UK - RPI, CPI & core CPI figures fallen less than their benchmark; Source: Morningstar timent around the stock, as it results in Fundamental Research, Axis Securities. ing their shares in the company and UK - House Price Index figures a lower supply of shares in the market, Looking at the higher expenses because chance on its future profits.” 26-Mar US - GDP annualised figures US - GDP price index US - initial jobless claims Ex-dividend: NTPC 27-Mar Ex-dividend: ACC ‘This isn’t an automatic buying opportunity’ 28-Mar UK - Nationwide House Price Index London-based JAN LAMBREGTS, managing director (MD) and global head of financial Italy -1.9 per cent (pre-corona 0.1 per Source: exchange/websites/Bloomberg markets research at Rabobank International, and HUGO ERKEN, senior economist and cent) and Germany -1.2 per cent (pre- CompiledbyBSResearchBureau country analyst for North America, Mexico and India, share their views on the road corona 0.6 per cent). For India, we ahead for the global financial markets and the economic forecast for India with expect growth of 3.6 per cent in calen- Puneet Wadhwa. Edited excerpts: dar 2020 (pre-corona 5.7 per cent). In COMMODITY PICKS terms of fiscal 2020-21, this is 4.2 per Jan: The world is still trying to come to cent of growth. WHEAT terms with the economic fall-out of this virus and stability isn’t around the How are investors viewing India as immediate corner as we are trying to an investment destination now? come to grips with it. It’s certainly not Hugo: India, like other emerging mar- JAN LAMBREGTS business as usual, and as such this isn’t kets (EMs), is bearing the brunt of the an automatic “buying opportunity”. global flight to safe assets. Our EM Managing director & global head of financial markets research, Rabobank International Policy rates across the world are being Vulnerability Heatmap shows that slashed to zero or negative, while bond India at the moment is not one of the HUGO ERKEN yields have fallen rapidly in many coun- most vulnerable EMs, but also not one tries due to safe haven demand as of the most attractive. There are some Senior economist & country analyst for North Wheat prices in Indore are trading at ~1,850 per America, Mexico and India money flows outside of riskier assets. structural issues that the Modi gov- quintal. Prices are expected to trade lower Yet with governments having to share ernment needs to fix in order to push towards ~1,800 per quintal following expected Global financial markets have been much of the burden, the longer-term economic growth again to acceptable record production of wheat and ample supplies roiled by the recent turn of events. Is impact remains in question. levels (after the current crisis) and with government. the selling overdone? JAN attract a sufficient amount of overseas Jan: Given the severity of the chal- Can the coronavirus pandemic push LAMBREGTS HUGO ERKEN investment. There is a possibility lenges posed by coronavirus (COVID- the global economy into a recession? India might also benefit from the BARLEY 19) and the rapid way in which we are Jan: A deep global recession is pretty COVID-19 health scare. International overtaken by events, the significant much unavoidable as we ready to fight FORMANYCOMPANIES,EARNINGSAREINSURREALTERRITORYAND firms have found out the hard way just reaction we have seen in financial the war against this virus. Even before SURVIVALISGOINGTO BETHEIRFOREMOSTCONCERN:LAMBREGTS how vulnerable their globally inte- markets is not overdone. In recent the virus broke out, we were looking for grated supply chains are. This was years, we have grown used to every a mild recession globally, so we were already becoming clear due to the US- wobbly being met by government hardly thinking the world economy was demand-side one? What are your estimates for global China trade tensions but has been measures and this time around is no in good shape. This virus, though, is an Jan: We would argue the coronavirus economic growth? exposed to the full by the COVID-19 different. In fact, government meas- outlier materialising and throwing any is increasingly a simultaneous supply Hugo: Our forecasts are surrounded outbreak. Firms want to rely less on ures are equally drastic, but this time doubt out of the way. For many com- and demand shock. Central banks, with much uncertainty and there are China as their only manufacturing Barley is trading at ~1,700 per quintal in around, the market is mostly judging panies, earnings are in surreal territory alongside fiscal policymakers, are asked several downward risks. That said, we hub. They may shift (part of) their pro- Jaipur. Prices are expected to trade lower policymakers actions to be more and survival is going to be their fore- to intervene and act. But obviously, this expect global growth to level off to 0.7 duction to other countries, such as towards ~1,600 per quintal given the expected reflective of the scope of the scale of most concern. is a problem they can help pave over per cent in 2020 (before corona we esti- India. However, the extent of this new arrivals, record wheat production and the problem rather than giving rise to the crack, but they can't fix the root mated 2.9 per cent). We expect China's potential upside is difficult to assess weakness in maize prices. any hope of a solution. Are the global central banks justified source. Again, currently financial mar- growth to edge to zero in 2020 (pre- right now. in cutting policy rates, since kets mostly judge their actions to be corona: 5.7 per cent). Most countries By when do you see stability coronavirus has created more of a indicative of the scope of the problem, will end up in recession, with Japan - Full interview on: Prerana Desai, returning? supply-side problem and not a rather than offer a real solution. 2.5 per cent (pre-corona: 0.5 per cent), www.business-standard.com Research Head - Edelweiss Agri Services and Credit NEW DELHI | MONDAY, 23 MARCH 2020 BUSINESS LAW 13

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BRIEF CASE M J ANTONY A weekly selection of key court orders An opportunity in default threat Building worker can move consumer forum A construction worker registered under the Building and Other Construction Workers’ It is a chance for stakeholders in the banking sector to revisit contractual obligations, say experts Act is a ‘beneficiary’ of the scheme made TROUBLE WITH under it and also a “consumer”, who can SUDIPTO DEY their obligation to fund. under the IBC, among others. DEFAULTS ON move consumer fora, the Supreme Court Similarly, financing con- Legal experts say borrowers BANK LOANS ruled last week. The judgment is he prospect of wide-scale tracts, such as those dealing must immediately revisit all significant because it will extend to all defaults in banking-related with EPC (engineering, pro- their critical loan agreement to uThere are no specific beneficiaries of statutory welfare schemes like employees’ contractual obligations on curement, and construction), analyse if they can claim any banking regulatory provident fund. The case also showed how ordinary people T account of the pandemic has O&M (operations and mainte- genuine concession from the guidelines for dealing are harassed by demanding dozens of documents, which stirred lenders into action. The Indian nance) and supply, generally lender on account of the COVID- with pandemics normally they are not expected to have. In this appeal case, Banks’ Association (IBA) plans to rec- contain force majeure clause. 19 pandemic. “There are infor- Joint Labour Commissioner vs Kesar Lal, the worker had ommend to the Reserve Bank of India While the government mation covenants in the loan uMost loan-related obtained a Labour Beneficiary ID after paying a fee. When he and the government a host of relaxa- through a notification has clari- agreement which obligates bor- contractual agreements sought financial assistance for his daughter’s marriage, the tions in repayment of loans and relief fied that the COVID-19 pandemic rower to inform about a material don’t have force majeure commissioner rejected it after nine months with a long list of in classifying accounts as non-perform- is a force majeure event, legal or a force majeure event. The bor- clause defects in the application — it did not have a valid date of ing assets. experts say this relief does not in most rower may immediately send such uA payment default birth, the affidavit was not proper, the application form was What makes any banking-related cases impact the repayment obliga- intimation to the lenders and also incomplete in details, and the certificate of the planner was defaults complicated, both for lender tions of the borrower under the request for a moratorium on account could trigger default in not attached. After the rejection of 327 such applications and borrower, is that banking laws and financing documents. of this,” says Srivastava. other financing from construction workers, the matter was taken to the regulations are typically cen- For lenders, a payment In addition to seeking waiver of pay- documents consumer fora. These fora accepted the claim of Kesar Lal, tred on security cover, and do default by a borrower could ment defaults, borrowers may have to uInability to recover dues and the commissioner’s appeal was dismissed. not deal with pandemic situ- trigger a number of other seek specific covenant reliefs and may also affect the ations, say experts. events of default across the ensure that such defaults don’t result lending ability of banks “Most loan-related con- financing documents. This in defaults across other financings, Jurisdiction in arbitration appeals tractual agreements do not could include occurrence of says Chacko. The question of choosing the court where have force majeure clause that material adverse event, Typically, in contracts that do not WHAT SHOULD LENDERS an appeal against an arbitration award is could be triggered to termi- CORONAVIRUS breach of financial ratios, include the force majeure clause, & BORROWERS DO: to be filed came up again in the Supreme nate the loan agreement and PANDEMIC failure to comply with the India Contracts Act recognises Court and it shifted the case from seek relief from repayment underlying project doc- the doctrine of frustration – LENDERS: Must carefully Faridabad in Haryana to the Delhi High obligations,” says Leena uments, and inability to under Section 56 – to terminate review the underlying Court. In this appeal, Hindustan Chacko, partner, Cyril Amarchand achieve commercial operations a contract. Banerjee, however, project documents and Construction vs NHPC, the commercial Mangaldas. on time, among others, say points out that in case of bank- analyse the impact on special court in Faridabad decided that the seat of Experts note banking-related con- experts. “Inability to recover ing-related contractual obliga- timelines adjudication is Faridabad. According to the contract, Delhi, tractual obligations primarily pertain to dues by lenders may also affect tions, it might be difficult to as well as Faridabad courts, would have jurisdiction as the lending agreements. “Such agreements the lending ability of banks achieve the termination of the BORROWERS: contract was executed between the parties at Faridabad, describe the manner of repayment of even under already committed contract on account of appli- Immediately revisit all and part of the cause of action arose there, and the the loan, along with the applicable rate loans,” says Siddharth cability of doctrine of frustra- their critical loan Faridabad court was invoked first. Section 42 of the of interest. In case the terms of bank- Srivastava, partner, tion as it is premised on agreement to analyse if Arbitration and Conciliation is meant to avoid conflicts in the ing-related contractual obligations Khaitan & Co. prepayment of the loan they can claim any jurisdiction of courts by placing the supervisory jurisdiction aren’t met, the default clause is trig- Srivastava amount. genuine concession from over all arbitral proceedings in connection with the gered,” says Varsha Banerjee, partner, advises lenders Many legal experts feel the lender arbitration in one court exclusively. If the agreement is clear Dhir & Dhir Associates. encountering a poten- the COVID-19 pandemic event is on the jurisdiction of the court, there is no problem. But Experts say there do not seem to be tial default situation to carefully ILLUSTRATION: AJAY MOHANTY an opportunity for all the stakeholders uThe borrower should conflict arises when the contract is vague on the seat or specific banking regulatory guidelines review the underlying the project doc- in the banking sector to revisit their con- intimate the lender of venue of the arbitration and the cause of action arise in for dealing with pandemics. Some lend- uments and analyse the impact on time- lighted the need for an extension of 90 tractual obligations. “It will help them any impending default several states. In this case, though the Faridabad court was ing agreements, especially those related lines on account force majeure before days in classifying loans as NPAs, six- crystallise their respective rights and and request for a invoked first, the Supreme Court, citing its 2019 judgment to corporate or balance sheet funding, approving fresh funding for greenfield month deferment in interest of term obligations so that they are better pre- moratorium on payments involving NHPC again, ruled that the Delhi High Court will have force majeure clauses that provide projects. In its suggestions to the RBI loans and working capital loans, and pared for a COVID-19- like situation in hear the appeal. protection to the lenders in terms of and the government, the IBA has high- longer resolution period for companies the near future” says Srivastava.

Coal e-auction in Jharkhand upheld The Supreme Court last week set aside the Indianeedsanoverarchinghealthcare law judgment of the Jharkhand High Court, which had quashed the e-auction of coal extraction in Kusunda area. The high court GEETIKA SRIVASTAVA India is a signatory to the World In the United States, the had further directed new e-auction and FIGHTING PANDEMICS Health Organization’s International Department of Health and Human ordered a vigilance inquiry into the Bollywood singer Kanika Kapoor AUSTRALIA: An overarching law called the Health Regulations (IHR), several Services (HHS) has laid down specific matter. In this appeal case, Bharat Coking recently hit the headlines after she National Health Security Act and gaps need to be plugged in domestic guidelines to assist states during Coal vs AMR Dev Prabha, the auction was conducted by C1 tested positive for the novel corona- Agreement has been put in place laws, say experts. health emergencies and prevent the India with technical assistance from Tata Communications. virus (COVID-19) and attended sev- For instance, a complete ban on spread of communicable diseases. The online bidding was marred at one stage by technical eral high-profile parties. The singer, UNITED STATES: Under the Public Health commercial flights may not align The Robert T Stafford Act allowed hitch and time had to be extended. The award was finally who had returned from London, and Service Act, the US Department of with Article 43 of the IHR, which calls President Donald Trump to unilat- given to R K Transport. AMR Dev Prabha, the rival bidder, reportedly skipped the mandatory Health and Human Services has laid for proportionality of such bans to erally invoke an emergency. The challenged the e-auction in the high court with success. The 14-day quarantine, which was recom- down specific guidelines to assist states potential risk. Similarly, the privacy HHS’ secretary can make grants and coal company appealed to the Supreme Court. It did not go mended by the Centre. during health emergencies and prevent of a patient and disclosure of their conduct investigations into the cause, into the technical problems like that of limited bandwidth, Experts point out in India it is left the spread of communicable diseases medical information needs to bal- treatment and prevention. Under the as it maintained that they were questions of fact. Moreover, to individuals to quarantine them- ance with public needs. Experts say Federal Food, Drug and Cosmetic there were concurrent findings of technical experts like selves voluntarily. Most of the infec- EU: EU Decision 1082/13 is the key legal no such provision to maintain this Act, the HHS secretary can justify an CERTIn and TCL, as well as the CVC, holding that there were no tions that have passed on are because instrument for threats to health, which balance is available under the current emergency use authorisation of med- technical difficulties. people failed to observe the man- endorses compliance with WHO’s IHR laws. An overarching law could also ical countermeasures, whereby unap- datory quarantine and decided to include provisions for an emergency proved drugs, vaccines, or counter- mingle with the crowd, they add. SPAIN: All private hospitals have been fund to deal with such situations. measures can be used in times of All building planners are not architects “The regulations to enforce man- nationalised in the wake of the pandemic “The present framework does not emergency. Such a provision does not The Architects Act does not prohibit datory quarantine while a person is INDIA: The Epidemic Diseases Act, 1897, give much attention to surveillance, exist in India. individuals not registered under it from asymptomatic are still not in place, governs health care emergencies vaccination and public health Within the European Union (EU), undertaking the practice of architecture and that has resulted in a steep rise response,” points out Shashwat EU Decision 1082/13 is the key legal and related activities. However, if a person in infections,” says Nipun Saxena, Awasthi, a researcher at National Law instrument for threats to health. They has to use the title ‘architect’, he must advocate, Supreme Court. health features in the state list under aster” under the Disaster University, Lucknow. endorse compliance with the IHR. hold a degree in architecture and register This is just one example of how the Seventh Schedule of the Management Act, the fact remains Around the world, countries have Both the IHR and Decision 1082/13 himself before the Council of Architecture. public healthcare laws in India fall Constitution. The Centre can only that India does not have dedicated laid great emphasis on strengthening require signatory states to develop The Supreme Court declared so in its judgment last week in short of meeting the needs of a pan- advise states to invoke the laws and legislation for a pandemic situation. their public healthcare laws to pre- national plans for pandemic prepa- the appeal case, Council of Architecture vs Mukesh Goyal. The demic situation. regulations, not mandatorily impose An overarching law governing public pare themselves for such pandemics. redness. Many countries have plans court stated that a plain reading of Section 37 of the Act Even as the government ramps up it, say experts. healthcare is a glaring gap in India’s In Australia, for instance, Section 51 in place, which can include meas- made it clear that it prohibited individuals not registered efforts to tackle the COVID-19 pan- “The power granted to the Centre fight against the COVID-19 pandemic. of the Constitution provides the ures, such as rationing of resources, with the Council of Architecture from using the title and style demic, the primary law its resorts to under this Act is very limited, and it Kashish Aneja, a global health Federal government with legislative enforced isolation or quarantine, or of ‘architect’. But it did not prohibit unregistered individuals is the 123-year old The Epidemic is the ultimate discretion of the state lawyer associated with the World powers to quarantine. An overarch- seizure of goods and property. The from practising activities, such as design, supervision, and Diseases Act, 1897, that governs government to take a step by framing Health Organisation, points out that ing law called the National Health WHO and the EU also encourage the construction of buildings. The court was dealing with an healthcare emergencies in India. The appropriate regulation,” says Saxena. The Epidemic Act doesn’t meet thres- Security Act and Agreement has been use of legal frameworks to support appeal against the judgment of the Allahabad High Court in colonial-era law, enacted to fight the Moreover, not all states have framed holds under Article 19 and 21 of the put in place to abide by Australia’s those plans. which the promotion of departmental architects was bubonic plague in the erstwhile regulations to contain the pandemic. Constitution. obligations toward the IHR. The In Spain, all private hospitals have challenged by one group. This necessitated the Bombay, comprises of four sections “Those that have made these regula- He highlights four major gaps Australian government’s 2011 been nationalised in the wake of the interpretation of the term architect. A government spread over just three pages. Experts tions have spent valuable time in plaguing the Act. These relate to National Health Emergency pandemic. While such a drastic meas- department may change its name avoiding the word point out one of the primary issues mulling the pros and cons before rights of healthcare personnel, travel Response Arrangements also high- ure may not take in India, experts architect and function with the normal activity of town facing administrators dealing with notifying them,” he adds. restrictions, privacy rights, and lights how the government will speculate about guidelines for pub- planning and construction.. the pandemic situation is the federal While the government also investments needed to meet the respond to public health emer- lic-private partnerships in the medi- structure of Indian democracy. Public declared the disease as a “notified dis- healthcare challenge. Even though gencies. cal field. Post office not liable for stolen IVPs The Supreme Court has asserted that the postal authorities are not liable to pay the maturity value of Indira Vikas Patras, Challengesinenhancingauditquality which were allegedly stolen from their holders. Two persons complained that their IVPs were stolen and the matter was the holding and subsidiary companies. considered in developing the AQI as a whole, resulting in a significant trust def- reported to the Odisha police. When they Alternatively, regulation could require a framework, complemented by specific needs icit between auditors and regulators. claimed the amounts from the post office, the authorities significant majority of a group’s entities to be determined by company boards or audit Fortunately, this situation can be repaired by refused to pay them, arguing that in case the IVPs were audited by the same auditor, as also reflected committees. Firms can also be mandated to greater engagement. purchased by cash, the identity of the purchaser would not in a 2017 report of Sebi. publish information (transparency reports) The paper recommends deterring be recorded and that all IVPs were bearer instruments like containing qualitative and quantitative improper audits through inspection. This is currency notes. When the holders approached the consumer Restrictions on audit firm composition information necessaryto understand their indeed the right direction. Auditing involves forum, the postal authorities were directed to pay them the The MCA paper considers limiting the processes and other inputs for AQI. the application of skill, expertise, judgement maturity value as no one had claimed it for a long time. Their number of audits and partners for a firm to The AQI alone could perhaps replace and experience; and goes beyond a checklist. appeals were dismissed. But the Supreme Court exonerated improve quality. What the market really needs many other proposals in the paper. Inspections, therefore, should be robust, the postal authorities of any liability (Supt vs Jambu Kumar). is capacity-building — larger Implemented properly, The carried out by competent, experienced ANIRUDDH SANKARAN firms with experience and AQI will lead to consolidation auditors, and go beyond audit files to cover diverse skill sets to serve large of smaller firms and building the firm's quality-related processes. To Disney gets copyright protection companies, whose audits There may not be a capacity, resulting in a natural strengthen inspections and provide a The Delhi High Court has restrained more The most discussed topic today in the audit demand industry knowledge, need to restrict the "panel" of firms, without reasonable and practical perspective, the than 130 websites from infringing the profession is audit quality. The Ministry of deep technical competence, number of audits by a regulator intervention -- a self- regulator can engage experienced audit copyright of Disney Enterprises, which Corporate Affairs (MCA) recently published and judgement. Such firms will firm, or the number balancing free market. It also professionals, on the lines of what the PCAOB complained of illegal and unauthorised a consultation paper, the success of which is be better able to integrate their of partners per firm, means fewer firms for the (Public Company Accounting Oversight distribution, broadcasting, predicated on a strong framework, consistent resources and respond to as long as the AQI regulator to regulate, leading Board) has successfully done over the years. rebroadcasting, and streaming of its application, and engagement. I have emerging complexities in the score of the firm is to better quality regulation. In the US and the UK, regulators invest motion pictures. The global entertainment examined certain key concepts that impact framework and technology. high, and there is a There may also not be a significant effort in understanding company has also added ISPs of these websites and the audit quality, the central theme of the MCA To achieve this quickly, healthy partner-to- need to restrict the number of auditors' methodologies, inspections, Department of Telecommunications as parties to the paper. smaller firms with varied client ratio audits by a firm, or the number assessing emerging audit risks and auditor injunction suit requiring them to disable access to the Audit reporting on subsidiaries’ accounts capabilities need to of partners per firm, as long as responses, discussing newer approaches to websites. The company engaged an investigative agency and To avoid negative consequences of an consolidate, creating a positive the AQI score of the firm is audit, etc. The auditor also needs to know found that these “rogue websites”, according to it, were auditor not having visibility over a corporate correlation between larger firms and high, and there is a healthy partner-to-client that the regulator is engaged, aware, and facilitating the use of their websites to download and stream group, the paper requires mandatory improved audit quality. This echoes the ratio. It will also ensure that the experience constantly monitoring the auditor. For this original films, television programmes and audio-visual comment by the parent's auditor on its prime minister's thoughts from his speech in of a firm’s partners reflects the complexity of to be successful, trust, open-mindedness content. It also alleged these websites are primarily engaged subsidiaries' accounts. This cannot be July 2017 on the occasion of CA Day. audits and the number of clients of the firm. and a quality-oriented approach are needed in making available contents from entertainment giants like effectively achieved by reviewing the Companies, including unlisted companies, on all sides. Paramount Pictures Corporation, Columbia Pictures, subsidiary auditors' work and will be Audit Quality Index (AQI) will have the benefit of choice when There needs to be a lot of engagement Universal City Studios, and Netflix Entertainment Services inefficient to have the parent auditor re- The MCA paper deals with implementing the selecting their auditor, based on the AQI and among the key stakeholders — auditor, India. This was an infringement of copyright. The high court perform the audit of the subsidiary. AQI, a framework that considers qualitative their own needs. auditee and regulator — to make this work. It passed injunction stating that Disney has established prima One solution is to replace the current SA and quantitative factors to rate or rank each takes two hands to clap, but these three case of infringement of copyright and it would suffer 600 of the ICAI, which allows reliance on the auditor. This was also recommended by Sebi's Continuous engagement stakeholders to build trust and improve irreparable damage if this activity was not stopped. It listed work of other auditors, with the international 2017 report. AQI will help companies identify Over the years, corporate failures, sudden audit quality. tests to find out whether they are “rogue” websites. The standard ISA 600, which does not permit the firm(s) most suited to audit them. auditor resignations, and other market events websites named have to pay the costs of litigation to Disney. division of responsibility between auditors of Relevant, objective parameters need to be have led to a negative perception of auditors The writer is partner, SR Batliboi & Associates LLP 14 POLITICS & PUBLIC AFFAIRS NEW DELHI | MONDAY, 23 MARCH 2020 1 “IN MY 40-YEAR PUBLIC LIFE, I’VEALWAYS “… POLITICS SHOULD BEA MEDIUM OF “WHAT WE HAVE WITNESSEDTODAY DONE POLITICS OF PURITYAND VALUED SERVING PEOPLE. HOWEVER,THE IN MADHYA PRADESH ISA BLATANT DEMOCRATICNORMS” (KAMALNATH-LED) GOVERNMENT HAD KILLING OF DEMOCRACYIN BROAD Kamal Nath, WHILE STEPPING DOWN AS CHIEF MINISTER DIGRESSED FROMTHAT PATH” DAYLIGHT” OF MADHYA PRADESH Jyotiraditya Scindia, BJP LEADER Ashok Gehlot, RAJASTHAN CHIEF MINISTER

> . Equations are on an even keel CONSIDER THE EVIDENCE

RSS isn’t keen to rock Modi’s boat because its relationship with BJP is smoother now post Hindu consolidation

RADHIKA RAMASESHAN terror’. The RSS was unhappy when he became a minister. But he Rashtriya Swayam- Bhagwat did not make an sevak Sangh’s (RSS’) issue of it.” executive committee, Bhagwat’s association with T scheduled to meet in Modi went back a long way, to the Bengaluru from March 15, called days when his father, Madhukar off the annual event because of Rao Bhagwat, was the pranth (pro- the coronavirus (COVID-19) pan- vincial) pracharak of Gujarat and demic, but the Sangh released Modi was a fledgeling pracharak, three resolutions, which were on who was nurtured by Bhagwat the agenda. Read in tandem with senior and Lakshmanrao the recent statements from Inamdar. In an e-book called Suresh Bhaiyya Joshi, the RSS Jyotipunj, Modi wrote of Bhagwat general secretary and sarsangha- senior, “Some of the people we chalak’s deputy, the views and meet leave a lasting impression on comments bespoke the present us, but with Madhukar Raoji, it BJPbackinMP; state of the Sangh’s relationship seemed as if he had entered us. with the Bharatiya Janata Party Like sugar in milk.” (BJP). The BJP is the RSS’s politi- A more profound and under- cal progeny but not necessarily lying reason for the RSS’ keenness therealbattle the family favourite because of not to rock the Modi boat was the vicissitude that the equation because unlike Vajpayee and was subject to: Whenever the BJP Advani, Modi managed to con- ruled the country, it apparently solidate the Hindus like never beginsnow acquired an upper hand over the before. “In 2014, when the BJP parent, but in the Opposition, the crossed the 272-mark, the Sangh tables turned in the RSS’s favour. realised that the minority factor SANDEEP KUMAR Congress MLAs (who now have The resolutions on the Ram Earlier, whenever the BJP ruled the country, it apparently acquired an upper hand over the parent, but in was neutralised and the Hindus joined the BJP), 15 had represented temple’s “reconstruction”, the the Opposition, the tables turned in the RSS’s favour could never be ignored ever again. The succession of political occur- the Gwalior-Chambal region. The invalidation of Article 35A and the The Sachar (committee) narrative rences in Madhya Pradesh, leading BJP was the runner-up in 20 seats in reading down of Article 370, and Mohanrao Bhagwat, the sar- insider said. imminent (in 1979). Deoras was over and an era in which to the resignation of Chief Minister which these rebel MLAs had won. the amended Citizenship Act sanghachalak, reset the ground A BJP functionary, familiar informed the Socialist leaders (of Rahul Gandhi would publicly dis- Kamal Nath, was somewhat a re- The margin of victory was thin in praised the Narendra Modi gov- rules governing the kinship in with the RSS, said Bhagwat was the Janata Party) that Jana Sangh play a sacred thread and (Arvind) enactment of what happened in many seats. In 11 seats it was less than ernment, but with a cautionary 2014, when the BJP first won a from the “Balasaheb Deoras” lin- representatives in the govern- Kejriwal would recite the Karnataka last year, when a coalition 10 per cent. As a result, if political tale for the BJP. It was asked to majority on its own. “In NDA I eage and that made him a “100 ment would dissociate them- Hanuman Chalisa had dawned. government was brought down to commentators are to be believed, “convince” the Opposition that (the first tenure of per cent political selves from the RSS if that could Under Modi, the BJP will never make way for a BJP-led one. winning them may not be a doddle. the CAA was in the nation’s inter- the National animal”. Balasaheb, save the government. But things let go of this Hindu catchment The departure of Jyotiraditya The BJP has 107 MLAs in the est. It was an admission that the Democratic Alliance Bhagwat’s or Madhukar went too far,” the functionary basis and the Sangh knows that,” Scindia, who crossed over to the BJP, Assembly, whose current strength is statute had breached the polity rule at the Centre), association with Dattatraya Deoras, recalled. an RSS source said. was a work in progress since 206. To secure a majority, the party and the ruling party did nothing the RSS was con- Modi went back was the third RSS The RSS insider said: So, while the Swadeshi Jagaran December 2018, when the Congress has to win at least six seats even if all to heal. vinced that the BJP a long way, to chief — after K B “Bhagwat learned from the Janata Manch (SJM) continued to be a chose Nath chief minister after its the independent MLAs support the How did the BJP and the was naive and the the days when Hedgewar and M S Party and Vajpayee’s experiences protector of the RSS’ economic election victory. BJP. Otherwise the party will have to Sangh interpret the nuanced Atal Bihari Vajpayee his father Golwalkar — who and decided that the RSS must orthodoxy, the government bought Since then he found himself win nine seats. articulations from the progenitor? government needed Madhukar Rao discovered and not occupy the Opposition space. peace with the outfit by inducting increasingly sidelined. After Nath “Digvijaya Singh and Nath are A veteran swayamsevak said: to be micro-man- Bhagwat was groomed BJP leaders If the Modi government fulfils six the former SJM convenor, S resigned, Scindia tweeted: “People experienced politicians. Nath will not “The relationship with the BJP aged,” an RSS the pranth L K Advani and of the 10 items on the Sangh’s Gurumurthy, into the Reserve have won in Madhya Pradesh today. forget this defeat easily. They will cannot be smoother than now, insider said. pracharak of Kushabhau Thakre, agenda and leaves out four, it’s Bank of India’s board and dropping I have always believed politics should leave no stone unturned to secure despite periodic provocations K S Sudarshan, Gujarat among others. “He good enough for Bhagwat. Take Nachiket Mor from the panel be a medium of public service, but those seats. Nath possesses the kitty, from the BJP. Like it or not, the the RSS chief of the was a political prag- the case of R K Singh (the power because of Mor’s alleged allegiance the state government had deviated and Singh enjoys enormous political RSS is so completely identified day, was eight years matist who tried minister). As home secretary in to Bill and Melinda Gates, the from this path. Truth has won again. experience and also some influence with the BJP that it is blamed for younger than Vajpayee, “but that hard to save the government of the Congress-led United swadeshi lobby’s bugbear. In Satyameva Jayate.” in that area. Local BJP leaders might the BJP’s reversals. On its part, didn’t deter him from functioning the Janata Party (with which the Progressive Alliance or UPA gov- attempting a “balancing” act, the also turn hostile,” said political ana- the Sangh only wants to work in a as a super PM at times, bouncing Bharatiya Jana Sangh had ernment, he started the campaign RSS has leaned more towards the Any deal? lyst Anil Jain. spirit of consensus with the BJP.” off unworkable ideas”, the merged) when its fall seemed against the Sangh over ‘saffron BJP than its other constituents. There is strong speculation that Congress spokesperson Syed Scinida’s induction into the Central Jafar thinks the party stands a fair government is just a matter of time chance of winning the by-elections. and likely to happen in April itself. “I am sure the voters would pun- STORY IN NUMBERS But what about the MLAs who have ish the defectors. This will be a lesson been his loyalists and, by resigning for their backers,” said Jafar. The CLAIM: “Our government from the Congress, have paved the Congress will contest the by-elec- shall is determined that there DEATHS WHILE CLEANING way for the formation of a BJP gov- tions on the slogan “15 months vs 15 be no manual cleaning of SEWERS AND SEPTIC TANKS ernment in Madhya Pradesh. years”, he said. sewer systems or septic tanks. A close aide of Scindia said: such Suitable technologies for 2015 57 “These MLAs put their political The road ahead by tasks have been identified 2016 48 careers at stake for ‘Maharaj’, who After the by-elections, when new the Ministry of Housing and respects their love and affection. This members (Scindia loyalists) serve in is 2017 Urban Affairs. The ministry 93 is the biggest reward one can ask for.” the cabinet, the BJP has to fine-tune working with urban local 2018 68 There are rumours that after the things. There may be some resent- adoption of bodies for the 2019 110 by-elections to the Assembly seats ment among smaller groups in the these technologies. We will that have fallen vacant due to the res- party but overall the BJP looks to be now take this to its logical ignations, Tulsi Silawat will be dep- in a position to hold the reins. conclusion through UNIMPLEMENTED LEGISLATION uty chief minister. He was considered Political analyst Girija Shankar legislative and institutional The direct handling of human excreta by the Dalit face of the Congress until thinks the BJP coming back to power changes. Financial support sanitation workers has been banned since 1993 Nath removed him, along with five was bound to happen because the for wider acceptance of such under the Employment of Manual Scavenging other rebel ministers, from his cabi- people of Madhya Pradesh never technologies will be and Construction of Dry Latrines (Prohibition) net. At least 10 other MLAs will be really voted it out. “The Congress 2020-21) THE CESSPOOL provided.” (Budget Act, which also prohibited the construction and inducted into the new government. government failed because it resem- maintenance of dry latrines. Since December 6, Praduman Singh Tomar, Imarti Devi, bled the 2003 era of Digvijaya Singh’s were 376 OF DEATH FACT: There 2013, manual scavenging has been banned Govind Singh Rajput, and Prabhram government. People hadn’t voted for five years to 2019, deaths in under the Prohibition of Employment as Manual Choudhary are some of them. the Congress for another dark era of cleaning sewers and while Scavengers and their Rehabilitation Act, 2013. bad governance. It ended pro-people Finance Minister Nirmala Sitharaman said the sewers was passed in 1993, more than 370 tanks, with 110 deaths Tough road ahead schemes of the previous regime.” septic Yet, manual scavenging and cleaning sewers government would employ technology for sanitation workers have died in the five years in 2019. Technology for Many of these MLAs are from the A dejected party worker in the and septic tanks continues. Even in the age of cleaning sewer systems and septic tanks, and to 2019 while manually cleaning sewers. cleaning sewers and septic Gwalior-Chambal region, the strong- now silent Congress office in Bhopal eliminate the need for manual cleaning both Developing technology to eliminate human tanks is at a nascent stage robotic technology, there has not been much hold of Scindia, a former royal. All of said: “The party lacked a survival through technology and legislation in her involvement in sewer cleaning in India is still and does not offer a headway in changing how sanitation work is them have to face by-election. instinct. The state unit was frag- Budget speech on February 1. But, even in the nascent stages and caste is a major comprehensive solution. carried out in India, experts said. However, there are a few facts one mented. We have to learn a lot from though a law to ban the manual cleaning of barrier to eliminating manual cleaning. SOURCE: INDIASPEND should bear in mind. Of the 22 rebel the BJP.” Amidsetback,CongressconfidentofrepeatingRS success

and the Bharatiya Tribal Party, Congress’ tally in the Gujarat Assembly The party, with 68 MLAs now, can’t win two seats apart from independent MLA from 77, won in 2017, to 73. Jignesh Mevani. However, political analyststoo say because it needs 72. It’s in talks with NCP, Bharatiya “Looking at the numbers, we are the Congress could will win back those Tribal Party, and independent MLA Jignesh Mevani confident of winning the polls,” said seats in bypolls. Manish Doshi, Gujarat Congress “Most of theseseats are in regions VINAY UMARJI On the one hand, the move by the five spokesperson. where farmers and joblessyoungsters MLAsled to exchangesbetween the BJP However, NCP MLA Kandhal Jadeja are unhappy with the government. Despite the resignations of five of its and the Congress, each blaming the has said he will vote for the BJP Hence, it may bedifficult for the BJP to members of the legislative assembly other for the resignations. On the other candidates. win thosefive seats,” said Achyut (MLAs), the Gujarat unit of the hand, because of this, the The Congress is training its MLAson Yagnik, a political analyst. Congress is confident of Congress packed off its how first- and second-preference voting Similarly, according to Gaurang Jani, repeating past successesin remaining MLAsto Jaipur to works in the Rajya Sabha polls. another political analyst, the Congress’ the coming Rajya Sabha prevent more switchovers. The party is confident of winning the historyhas shown it could win. “The elections. For instance, in the 182- assembly seats that have become vacant Congress has been able to reclaim seats The state will see polls to member Assembly, the because of the resignations. where resignations took place.” the Upper House for four Congress had 73 seats but its “In the past too, when resignations However, Jani said the party’s hold in seats, for which the ruling strength has come down to 68. happened, we won because the voters Gujarat was loosening and questions Bharatiya Janata Party (BJP) is There are now 175 MLAsin recognisedthe betrayal. Congress had risen over its state leadership’s fielding threecandidatesand the Assembly. They include functionaries work with more passion in capabilities. the Congress two. STATE the BJP’s 103, the Bharatiya seats where they have been betrayed,” In 2017, more than 12legislators, The BJP has nominated SCAN Tribal Party’s two, the The Congress has fielded heavyweights Bharatsinh Solanki (centre) and Shaktisinh Doshi added. including former chief minister Abhay Bharadwaj, Ramilaben Nationalist Congress Party’s Gohil (right) for the Rajya Sabha polls. The BJP has three nominees PHOTO: TWITTER In May 2019, the BJP had trounced Shankarsinh Vaghela, left the Congress Bara, and Narhari Amin while GUJARAT (NCP’s) one, and one the Congress in bypolls held for four right before the elections to threeRajya the Congress’ candidatesare Independent. assembly seats of Unjha, Dhangadhra, Sabha seats. However, that did not come heavyweights Bharatsinh Two seats are vacant Similarly, the BJP needs 111votes to candidateselected. Manavadar, and Jamnagar Rural. Of in the way of Congress veteran Ahmed Solanki and Shaktisinh Gohil. from before. comfortably win all the seats it is Asof now, both the BJP and the these, Unjha, Dhangadhra and Patel’s victory. However, the Congress’ dreams of a The polls, to beheld on March 26, contesting. Congress are dependent on others and Manavadar were won by threeCongress Later in 2019, when External Affairs smooth ride were shatteredwhen five of require 36 first-preference votes for each In fact, the reason the Congress has expecting cross-voting. turncoats Asha Patel, Parsottam Sabaria, Minister S Jaishankar contested as the its MLAs— Mangal Gavit, of the four seats. gone ahead with two nominations is Recently, Gujarat Pradesh Congress and Jawahar Chavda on the BJP ticket. BJP’s Rajya Sabha candidate from Pradhymansinh Jadeja, Soma Patel, J V The Congress, with 68 MLAs, can’t because even the BJP doesnot have the Committee (GPCC) chief Amit Chavda The bypolls, held alongside the Lok Gujarat, Congress MLA Alpesh Thakor Kakadia, and Pravin Maru — resigned. win two seats because it needs 72. numbers of its own to get its three said the party was in talks with the NCP Sabha elections, brought down the switched to the BJP with his supporters. NEW DELHI | MONDAY, 23 MARCH 2020 STRATEGY 15 "WEHAVENOTCHANGEDOUR5GPRODUCT "WEARESTRIVINGTO FURTHERCUSTOMER “INTHEALTERNATIVEACCOMMODATIONSPACE, LAUNCHSTRATEGY, ANDWEEXPECTAT LEAST ENGAGEMENTTHROUGHINITIATIVESSUCHAS MAKEMYTRIPISLOOKINGAT VILLAS,SERVICE 10NEW5GSMARTPHONEMODELSTO HIT CLICK-TO-BUYTHATOFFERASEAMLESS APARTMENTSANDHOSTELS,ESPECIALLYTHOSEBASED THEMARKETTHISYEAR" CUSTOMERPURCHASEJOURNEY" INPILGRIMAGESITESSUCHASVARANASI” WANG XIANG S S KIM RAJESH MAGOW President, Xiaomi MD & CEO, Hyundai Motor India Co-founder and group chief executive, MakeMyTrip

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Hindustan Unilever (HUL) has gone a step further. Four thousand of its office- bound staff including those in senior Back to work, at home leadership roles, marketing, human resources, administration, supply chain and research across eight locations in the country began working from home from India Inc has embraced remote working because last Tuesday in an exercise that is expected to bring in significant learnings of a health scare. But there are important lessons for the company. “We remain agile as an organisation and remote working is on enabling infrastructure, managing remote something that we practice as an orga- teams and ensuring productivity... nisation,” says Anuradha Razdan, execu- tive director, HR, HUL. “However, this is an occasion where a large number of VIVEAT SUSAN PINTO and empathetic to the needs of employ- people are working from home at the ees working from home. “There are two same time. This requires coordination, nubhav Srivastava, 38, an dimensions to this. One is that com- dialogue and communication among employee of Axis Bank in panies have to be prepared technologi- team members and line managers. We Mumbai, has never worked cally and the second aspect is of being have Microsoft teams in place as well as Afrom home in his professional psychologically prepared. As things a helpline to address queries. Check-ins life. He now is. The coronavirus scare, stand now, the preparation is not com- happen virtually and we have provided which has forced businesses and ordi- plete at both ends. Companies are learn- the infrastructure to employees to help nary citizens to limit interaction and ing through trial and error and I see sig- them work while at home,” she says. maintain social distance, has meant that nificant changes in how business will be Despite all this, getting people to work Srivastava, who manages corporate and done from here on. Everything today is isn’t easy. As an executive with a blue- institutional banking, now has to do geared towards command and control in chip company says that the lines get everything he otherwise did in office, at an office environment. All of that blurred between personal and profes- home. “This is hardly easy,” he says. “I’m changes when you are working from sional commitments and productivity used to meeting people every day while home,” he says. does take a hit when working from home. I’m at office. I can’t do this at home. The While companies are struggling to His way out is to replicate his workplace second challenge is of handling varied understand the full implications of routine at home. “I get up and get ready tasks. There are people coming home, remote engagement, compensation WFH CHECKLIST TO GET STARTED like I would do on a regular working day. calls to take at the same time, paper work packages could undergo a change in the I’ve converted my study table in the bed- to wrap up, coordinating with colleagues future, say experts. Measuring produc- For corporations For individuals room into my work station. This gives and team members. I am slowly but tivity in appraisal processes could me the feeling that I am at work. I make Separate workspace from home space; use noise-cancelling steadily getting used to this,” he says. undergo a change as disruption sets into uDecide which roles can be remotely handled and train u calls and work on my laptop like I would Srivastava is just one among many in the workplace, says Ramachandran. employees quickly on dos and don'ts of remote access headphones if there is too much noise around do at work. I hope to carry on like this corporate India today who are grappling Welcome to the new world order. uSet out a plan of action involving senior uHave a clear understanding of productivity goals. Set a time till the end of the stipulated period for with a new normal — of working from Let us first look at the challenges for cor- managers/section heads. This should be followed by all table for work and personal commitments work from home,” he says. home for a sustained period of time. porations and then at those at an indi- Charu Sabnavis, executive coach, uEnsure infrastructure is available to all working from uMake sure you have necessary infrastructure. Laptop should be While India’s growing millennial popula- vidual level. There may not be clear installed with software, network access and passcodes trainer and founder-director of Mumbai- tion has advocated the idea of work-life answers yet but at least some guidelines home. This includes laptops, softwares, passwords based Delta Learning, says: “The concept balance and remote engagement for are emerging. uInsist they are connected with line managers uExplain to family that you have deadlines and you are not on vacation of remote working is not new. There are years together, for many others, work- As Sumit Mitra, head, group HR and many who’ve opted to work from home uBe sympathetic to their needs and requirements uBe accessible; if email is leading to misunderstanding from-home is a largely untested idea. corporate services, Godrej Industries and for their own individual reasons. But that Kavil Ramachandran, clinical profes- Associate Companies, says, the chal- is a choice they’ve exercised. In the cur- sor and executive director, Thomas lenges are particularly acute for man- from-home for our office-bound staff a ground sales teams. No visitors are allowance to the field force to buy pro- rent scenario, many have been forced to Schmidheiny Centre for Family ufacturing and old-economy businesses. week ago. We have put all necessary safe- allowed in, entry and exit points are sani- tective gear such as masks, hand sani- do it because of a looming health crisis. Enterprise, Indian School of Business, “The safety of our employees matters the guards in place at manufacturing units tised, high contact areas are disinfected. tisers and hand wash while on the move,” Coming to terms with this will take time says that organisations need to be alert most and we gave the option of work- for our team members as well as our on- In addition, we’ve also given a special he says. and there are no easy answers,” she says.

a hassle-free finance scheme QUIZ 657 Mercedes redefines the luxury bunched under the “restless pack- age,” assures a fast track loan. Easy instalments and easy credit will Forty-six years ago, this person who was a nursing student bring the young on board, says Iyer. 1 from Bakersfield, California, made a discovery that years The objective has been to create an label to plot a millennial trail later has proven to be life saving to people across the integrated offering across finance, marketing and product functions globe. After learning that her idea had a lot of potential Once a symbol of societal status, the auto brand is remaking itself in the mould that caters to the new consumers. commercially, she called an inventions’ hotline to find out “Eventually what matters more information about the process and produced the first of its new consumers as one that marks brash ambition and youth to shoppers is convenience. Gone ___. Name the person and the invention. are the days, when one will visit Connect John W Thomson, former CEO of Symantec; Reid SHALLY SETH MOHILE used to be to first buy a mass mar- the showrooms within the desig- 2 Hoffman, co-founder LinkedIN; Arne Sorenson, CEO of Mar- ket model and then upgrade to a nated hours — 9 am to 8 pm. One riott International; Emma Walmsley, CEO of GlaxoSmith- From being a brand that has tradi- luxury brand. gets inquiries even at midnight,” tionally associated luxury with Iyer says that close to 10 per says Iyer. Kline; Padmashree Warrior, CEO of Fable group; and what wealth and framed itself within a cent of auto buyers are those that The German carmaker’s Indian do you arrive at? class-led social hierarchical sys- are straight away buying a luxury pitch comes at a time when luxury Samarangana Sutradhara, a Sanskrit treatise of 11th century, tem, Mercedes Benz is looking to car and have never owned a car car sales in the country are down. 3 included a chapter about the construction of mechanical define itself afresh, for its millen- before. And, he adds, Mercedes is Given the low penetration of lux- contrivances (automata), including mechanical bees and nial buyers. With a new campaign enticing buyers to own the car they ury vehicles in India, cars priced birds, fountains shaped like humans and animals, and Mercedes Benz wants the young to always aspired for, above ~25 lakh account for less be ‘restless for tomorrow’ or in today, instead of an “One clear insight than 2 per cent of the overall pas- male and female dolls that refilled oil lamps, danced, other words, pull the brand off indeterminate future from the market senger vehicle market, this has played instruments, and re-enacted scenes from Hindu my- their wish lists and drop it into the in a yet undefined sal- research was the meant the shrivelling of an already thology. Who was its author? purchase cart. ary slab. spirit of thin layer of buyers. Who operates an online platform called Community for Santosh Iyer, vice president, A greater digital restlessness. It’s Analysts and auto industry 4 buying and selling consumer-centric digital advertising? sales and marketing at Mercedes thrust has helped the not about ‘been with Facebook, female buyers in its sales gender consultants believe that aggres- Benz India says “One clear insight company understand there done that’ LinkedIn and other mix and by targeting its marketing sion is warranted in such a mar- Sonoma, Devil’s Shine, Milk Can, Archer’s Blend, Ole Smo- from the market research was the its customers better. any more” partners to know its efforts, managed to double the ket, one that is likely to get even 5 key, Popcorn Sutton, Tim Smith’s Climax and King’s County spirit of restlessness. It’s not about The company said SANTOSH IYER buyers and has an inte- share of female buyers in its mix. more fragile in a post Coronavirus are all US brands in the business of a particular commod- been-there-done-that any more. that it had been prio- grated CRM platform Women made for 16-17 per cent in world. “Mercedes has been very VP, Sales & Marketing, ity. Their products carry a particular word as a suffix, People are constantly challenging ritising digital when that gives marketing, Mercedes’s total sales in 2019 as consistent in its performance. Mercedes Benz India which arose in the United States during the depression in themselves, be it a start-up or an devising a communi- sales, commerce, and compared to the previous year. Under the current market scenario the 1930s. It was related to the illicit production of a par- established business. They aren’t cation, sales and retail service, a single, shared How does it intend to get the and growing competition from ticular commodity. State it. averse to risks.” The company’s strategy and has, over the years, view of every customer. young to think of the brand as their BMW, they need to be more market research indicated that increased its digital spend though Focusing on the numbers has first buy? With more choice — as aggressive and reorient them- Whose ad campaign reads “Make Potato Great” and new buyers are unlikely follow the it is still lower than traditional mass helped. For instance, the company many as 10 new models will hit the selves,” said Puneet Gupta, asso- 6 name the brand’s choice for this campaign? traditional purchase route that media channels. It has collaborated took cue from the growing share of road this year and ease of access — ciate director at IHS Markit. Name the CEO who said, “Intelligent people need a fool to 7 lead them”? N MY FAVOURITE CAMPAIGN N ALOKANANDA CHAKRABORTY eryday life through some beau- the brand, in an otherwise over- What is the term used to define a word or words that one tiful occasion-based storytell- exposed advertising space — 8 uses in order to make an electronic device or a feature on Which is your favourite ing. While the category of choc- but that’s not the end goal. The it ready to work? campaign and why? olate isn’t very similar to quick impact of the advertisement is Name the brand whose old campaign carried this line in Cadbury’s advertising has service restaurants, the Cadbu- just as important: Has it stirred Strucktheright 9 Hindi “Bunty, tera sabun always been incredibly power- ry’s campaigns are best in class your emotions or brought a slow hai kya”. ful, with the campaigns “Asli examples of using cultural rel- smile to your face? And has it swaad zindagi ka” and “Kuchh evance as a backbone to build- moved you closer to the brand? Connect this bird with the oil emotionalchord meetha ho jaaye” examples of ing your category and brand. The end result could be an 10 and gas industry and what standout advertising backed by increase in sales or revenue, or do you arrive at? powerful cultural insights. Cadbury’s Dairy Milk ads have an increase in brand salience. won many awards. Doyou think COMPILED BY GAURAV SRI KRISHNA, www.facebook.com/gaurav.s.krishna On what parameters did you ad awards are important? What Sometimes because of the base your decision? purpose do they really serve? emotional element in a Beyond the surface level ration- Everybody is inspired by recog- campaign, there is greater recall al takeaways, I look for how it nition, especially if it comes for the story than the product or ANSWERS TO THE STRATEGIST QUIZ 656 makes me feel – and the Ca- from a credible source. Credible service advertised. Doyou feel 1. The coronavirus. OC 4. Xandr, Inc., the dbury’s work connected with forums, chaired by ex- that was the case with me emotionally and culturally perienced industry ex- this campaign? stands for Organ Culture advertising and as an Indian. perts, can help provi- That risk is very real. 2. He coined the term "Pac- analytics division of AT&T de direction and be In this case though, Man defense" in 5. Silvikrin, the hair care What do you think was the key motivating both to the the product was weav- mergers and brand that was idea the campaign was trying to agencies and the bra- ed seamlessly into the acquisitions that refers originally manufactured drive home? nd teams. If I remem- story and the campa- to a hostile takeover, by Smit Kline Beecham In my understanding, both ca- ber correctly, the “Asli ign taglines as well as after the Pac-Man game 6. Enfield Motorcycle mpaigns sought to drive a fun- swaad zindagi ka” ca- MOKSH CHOPRA creative style carried that was originally 7. Diners Club India damental re-evaluation (in te- mpaign went onto win CMO, KFC India forward across multi- named Puck Man since it rms of associations and usage) “The Campaign Of ple creatives — which looked like the puck 8. Japanese electronics related to the chocolate cate- The Century” at one made it unmistakably used in ice hockey. company Denon gory and the Cadbury’s the of the most recognised forums. Cadbury’s. The answer, I sup- brand; and succeeded famously. Having said that, awards aren’t pose, lies in the product role 3. Burjor Godrej launched 9. Google Cloud really a substitute for marketing and the campaign consistency. the Cinthol soap in 1952 10. A beer brewer What are the key takeaways for and business results. you from the campaign? Doyou remember any name One lucky winner will receive a cheque for ~2,000. Send your entries MY TAKE to [email protected]. All entries must carry the postal address of The first campaign is etched in Sowhat is more important — an who worked on the campaign? the contestant. Last date for receiving entries is March 24 till 8 pm. the minds of many Indians — ad’s creativity or effectiveness? I do recall a team of Ogilvy stal- Perfect example of creative effectiveness Previous winners and employees of Business Standard and their the powerful image of the girl I would say a good creative, ba- warts were behind this cam- families are not eligible to participate. The winner is chosen on the CLIENT: Cadbury (now Mondelez India) dancing into the cricket ground cked by strong cultural insights, paign – from the legend Piyush basis of the first correct entry received. YEAR OF LAUNCH: 1994 in absolute unabashed glee and is more likely to be effective, Pandey, Madhukar Sabnavis, I am guessing appeals to the than not. Creativity, by itself, Hepzibah Pathak. There were three correct entries to Quiz number 656 and the winner AGENCY: Ogilvy India child in all of us. “Meetha” of co- certainly helps break the clutter is Gangubai Bhat from Bengaluru urse took chocolate into the ev- and build a distinct recall for More on www.business-standard.com 16 NEW DELHI | MONDAY, 23 MARCH 2020 1 > JANATA CURFEW ASUCCESS Lockdownsalonenot SEALINK, MUMBAI enough, warns WHO as toll mounts to 13K Cases ballooned in Europe, prompting more lockdown measures. New Jersey's governor followed four other US states that have imposed unprecedented restrictions What WHO said As the number of global coronavirus cases surpassed 300,000 and the death toll rose to 13,000, the World Health Organization’s (WHO) top emergency expert, Mike Ryan, said on Sunday that countries could not simply lock down their societies to defeat coronavirus without public health measures to avoid a resurgence of the virus down the road. “What we really need to focus on is finding those who are sick, those who have the virus, and isolate them, find their contacts and isolate them,” Ryan, said. “If we don’t put in place the strong public health measures now,” he said, “when those movement restrictions and lockdowns are lifted, the danger is the disease will jump back up,” he said. A medical worker at work in Cremona, Italy PHOTO: REUTERS Americas Europe Nearly one in four Americans are under orders to close The Italian government has ordered all up shop and stay at home. At least 23,941 cases of the businesses to shut until April 3, with the novel coronavirus have been reported in the US and exception of those essential to maintaining AIIMS FLYOVER, DELHI 306 people have died. the country's supply chain. Italy recorded a Bolivia’s interim government announced it jump in deaths from coronavirus of almost would postpone presidential elections originally 800, taking the toll in the world’s hardest- slated for May 3 and institute a mandatory hit country to almost 5,000. countrywide quarantine for Spain’s death toll has soared to 1,720. 14 days. British PM Boris Johnson said the Brazil’s largest state Sao Paulo will essentially shut National Health Service (NHS) could be down for two weeks to help fight the coronavirus, its ‘overwhelmed’ like the Italian health governor said, as President Jair Bolsonaro said again system in just two weeks. The government that ‘hysteria’ over the outbreak could cause more warned it will impose tighter restrictions if harm than the virus itself. Britons fail to follow government’s calls. China, Australia MIDDLE EAST, AFRICA Iran's death toll has reached 1,685 with 129 & South Korea deaths in 24 hours. The total number of China saw 46 new cases, the fourth straight day with infected people is 21,638. an increase, with all but one of those imported from Oman has banned public gatherings in overseas. the Gulf Arab state, limited staffing at Australian PM ordered many venues, including state entities and shut currency exchange pubs, casinos, gyms and cinemas, to close. bureaus. Members of a South Korean church scuffled with Angola, Eritrea and Uganda confirmed police on Sunday, media reported, as government their first cases of coronavirus, while restrictions on religious services and other gatherings Mauritius recorded its first death as the virus HOWRAH BRIDGE, KOLKATA took effect. spreads across Africa. AGENCIES

NEW DELHI RAILWAYSTATION MARINA BEACH, CHENNAI PHOTO: DALIP KUMAR Streets across the country wore a deserted look as hundreds of millions stayed at home on Sunday, heeding Prime Minister Narendra Modi's appeal to people to self- isolate to contain the coronavirus. The Prime Minister thanked the people for the gesture. Taking to Twitter, he said it is an expression of gratitude by the people and also the sound of the bugle declaring the first success in the long battle ahead PHOTOS: PTI 17copsdiedin Chhattisgarh Maoistattack

PRESS TRUST OF INDIA lage forests, a group of Raipur, 22 March around 250 heavily armed ultras ambushed them, leav- Bodies of 17 security per- ing 15 personnel injured, he sonnel, who were missing said. after an encounter with The gun battle lasted for Naxals in Sukma district of about two-and-a-half hours, Chhattisgarh, were found he said. on Sunday, police said. “Later, 17 personnel were “Bodies of 17 security found to be missing for personnel were recovered which a search operation was by a search team and were launched. Today, their bodies being evacuated have been from forests,” At least 16 recovered and Inspector automatic the search team General of Police weapons, including is on the way (Bastar range) AK47 and an Under back,” he said. Sundarraj P said. Barrel Grenade Earlier, the Earlier, in a Launcher(UBGL), police in a state- major joint offen- were missing ment said 14 sive, separate following the police personnel teams of nearly encounter were injured 600 personnel and 13 were belonging to the missing after the District Reserve Guard gunfight. (DRG), Special Task Force The injured personnel (STF) and Commando were airlifted to Raipur and Battalion for Resolute Action admitted to a private hospital (CoBRA)- an elite unit of where the condition of two CRPF, launched an anti- of them is stated to be critical, Naxal operation from three he said. sides towards Elmagunda According to police after getting inputs about a sources, at least 16 automatic huge gathering of ultras there weapons, including AK47 on Saturday. and an Under Barrel Grenade When the patrolling Launcher (UBGL) were miss- teams were near Minpa vil- ing following the encounter.