THURSDAY, 6 FEBRUARY 2020 26 pages in 2 sections www.business-standard.com MUMBAI (CITY) ~9.00 VOLUME XXIV NUMBER 124

THE MARKETS ON WEDNESDAY Chg# Sensex 41,142.7 353.3 Nifty 12,089.2 109.5 ECONOMY & PUBLIC AFFAIRS P8 COMPANIES P3 Nifty Futures* 12,086.3 2.9 Dollar ~71.2 ~71.3** Euro ~78.5 ~78.8** MODI TARGETS $5 BILLION OF TATA POWER MOVING AWAY Brent crude ($/bbl)## 54.7## 53.1** Gold (10 gm)### ~40,049.0 ~394.0 DEFENCE EXPORTS IN 5 YEARS *(Feb.) Premium on Nifty Spot; **Previous close; FROM GENERATION: CEO # Over previous close; ## At 9 pm IST; ### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

RBI TO GET MORE JIO DEMERGER CASE TEETH TO SUPERVISE Maruti’s EV plans High-powered CO-OPERATIVE BANKS I-T dept now jury to select The Reserve Bank of India (RBI) is set to get BS award more auditory and supervisory powers over urban and multi-state co-operative banks, take a back seat winners today with the Union Cabinet approving the finds merit in Banking Regulation Amendment Bill, 2020, BS REPORTER on Wednesday. “Like commercial banks, Carmakers like Tata Motors and M&M bet big on e-mobility Mumbai, 5 February multi-state and urban co-operative banks NCLAT order will be brought under the RBI regulations. SHALLY SETH MOHILE & A power-packed jury comprising These changes will be only for the banking ARINDAM MAJUMDER leading decision-makers of India side and administrative rights will continue Greater Noida, 5 February Seeks law min opinion on course of action Inc will meet in Mumbai on to remain with the registrars,” said Thursday to select the winners of Information and Broadcasting Minister he country’s largest SHRIMI CHOUDHARY Business Standard’s annual awards Prakash Javadekar. 6 > carmaker, Maruti New Delhi, 5 February for corporate excellence for 2019. Suzuki India, will not PHOTO: SANJAY K SHARMA Aditya Birla Group Chairman be launching an elec- Within eight months of challenging the Kumar Mangalam Birla is the chair- THE SMART INVESTOR II, 1 T tric vehicle (EV) anytime in the National Company Law Tribunal’s man of the eight-member jury. The Sebi tweaks rules for foreseeable future, as issues like (NCLT’s) order giving a green signal to other jury members are JSW Group range anxiety and the high cost Reliance Jio Infocomm’s proposed Chairman Sajjan Jindal, KKR India IPO documents nod of acquisition will put off buy- demerger, the income-tax (I-T) depart- CEO Sanjay Nayar, EY India The Securities and Exchange Board of India on ers, Kenichi Ayukawa, its man- ment is learnt to have found merit in Chairman Rajiv Memani, Omidyar Wednesday set rules under which it could aging director and chief execu- the appellate tribunal’s December rul- Network India MD Roopa Kudva, hold back approvals for proposed share sales tive, told Business Standard. ing, which dismissed the I-T petition. McKinsey & Company Senior by firms that are under investigation for Maruti has decided to put The tax department shared its opin- Partner Noshir Kaka, Cyril Amar- possible violations. The markets regulator said its EV plans on the back burn- THE MARKET AND ion and the rationale in a communique chand Mangaldas Managing Partner for current investigations, “observations” on er even as most other passen- INFRASTRUCTURE WHAT MAKES MARUTI to the law ministry 10 days ago, Cyril Shroff, and Bain Capital Private the draft offer may be kept in abeyance for ger vehicle makers such as CONDITIONS ARE WARY OF EVs? where it sought the ministry’s legal EVALUATING Equity MD Amit Chandra. 30 days from filing of the draft offer. Tata Motors, Mahindra & NOT RIGHT TO | High acquisition cost opinion on the matter to decide further LEGAL The jury will select Mahindra, Renault India, MG LAUNCH AN course of action, said an official privy to the best in Corporate Motors, and Kia Motors are | Range concerns the development. STANDPOINT India, from a long list of Bharti Airtel pitches for going full throttle with their ELECTRIC VEHICLE | Lack of infrastructure The National Company Law names and data com- IN INDIA Voda Idea’s survival plans, nudged by the govern- | Emission due to charging of EVs Appellate Tribunal (NCLAT) had dis- | Tax dept is to decide piled by Business ment’s policy push. KENICHI AYUKAWA, from coal-based power defeats missed the I-T department’s petition on whether to Standard Research Bharti Airtel on Wednesday pitched for a Maruti will instead focus on MD & CEO, MARUTI SUZUKI purpose of clean mobility objecting to the proposed demerger of challenge NCLAT Bureau, to name the healthy telecom sector with three players other alternative technologies, Jio’s tower and fibre optic network assets order in SC or not “CEO of the Year” as well and said Vodafone Idea’s survival will be including compressed natural into two infrastructure trusts. as achievers in other cat- ‘WILL DECIDE SLOWDOWN VIRUS SCARE | Decision likely by good from the ‘investment and reputation’ gas (CNG) and hybrid, to ON DIESEL PLAYS MAY HIT CHINA According to sources, the depart- egories — public sector point of view for India. In the company’s reduce the overall carbon foot- CARS AFTER SPOILSPORT CARMAKERS’ INDIA ment is of the view that the NCLAT Feb-end, based on undertakings, multinational post earnings conference call, Badal Bagri, print to meet advance emis- SIX MONTHS’ AT EXPO INVESTMENTS order, which had cited multiple verdicts law ministry opinion firms, and small and chief financial officer, Bharti Airtel, said the sion norms. by the Supreme Court, including the | NCLAT upheld tribunal medium enterprises. AUTO EXPO 2020 PAGE 18 telecom sector was large enough to “This is not a good time to Vodafone-Essar tax avoidance case, order clearing The jury will also accommodate three players. bring an electric vehicle to the needs to be taken into consideration. Jio's proposed choose the “Company Indian market. Looking at mar- al EVs, Maruti will have to ructure hasn’t developed at “Some of the instances quoted in the of the Year” and “Start- INDIA OUTLOOK STILL CRITICAL: VODAFONE >P2 demerger plans ket conditions and customer “examine ways to provide an all. Under these conditions, it appellate order apply to the Jio case as up of the Year”, as well expectations, we will decide,” affordable electric product in is very difficult to make a busi- well. So an appeal against the existing | I-T contested NCLT as announce the ECONOMY & PUBLIC AFFAIRS P4 said Ayukawa. Considering the the personal space”, he added. ness case. Only limited people verdict may not stand legal scrutiny in order, saying it “Lifetime Achievement” 15th FC to form panel to fact that the government does- “There is no parking space are interested,” said Ayukawa. the apex court,” said a tax official. would reduce Jio awards. Turn to Page 17 > > > Infocomm’s profits draw up road map n’t support subsidy for person- or charging space. Infrast- Turn to Page 17 Turn to Page 17 The Fifteenth Finance Commission will set up a panel later this month to examine the fiscal and debt situation of the Centre and states and present a road map, on the lines of the erstwhile Fiscal Responsibility and Budget Services PMI at 7-year Management panel, the Commission’s chairman, N K Singh, said on Wednesday. high as orders pick up > RESULTS RECKONER SUBHAYAN CHAKRABORTY Services growth had New Delhi, 5 February SIGNS OF peaked to a 43-month Quarter ended Dec 31, 2019; common sample of 760 companies (results available of 875) GREEN SHOOTS high of 54.7 in August, fol- The services sector began lowed by two straight mo- SALES the year with a bang as PMI services trend nths of contraction. Howe- Dec 31, ’18 22.1% ~11.49 trillion  new orders in January ver, this has been followed Dec 31, ’19 1.9% ~11.70 trillion  rose at the fastest pace in by steady growth since seven years, dwarfing November. This has been PROFIT BEFORE TAX December’s five-month in line with manufactur- Dec 31, ’18 -20.0% ~99,761 cr  high growth, according ing activity, which mir- Dec 31, ’19 56.7% ~1.56 trillion  to a survey released on rored a steep upward mo- Wednesday. ve of the growth curve in NET PROFIT The widely tracked January when the PMI Dec 31, ’18 -32.6% ~62,164 cr  Nikkei India Services reached 55.3, the highest Purchasing Managers in nearly eight years, Dec 31, ’19 % ~1.14 trillion  Source : IHS Markit 84.0 Index (PMI) stood at 55.5 according to a survey Companies with zero sales excluded; Given the change in corporate in January, up from 53.3 Market sentiment released earlier this week. tax rates, to give a fair comparison the profit before tax has been gets boost considered; Compiled by BS Research Bureau; Source: Capitaline in December. In PMI For services, total sales parlance, the 50-mark SENSEX expanded for the fourth threshold separates exp- consecutive month in Correction ansion from contraction. January. Consumer serv- The report — “Companies may change New international ices growth was the most dividend policy after Budget changes” – business also pushed the marked, after transport published on February 3, had suggested sector’s output to a sim- and storage firms had that Sunil Mittal would be impacted by ilar seven-year high dur- seen the biggest boost in the abolition of dividend distribution tax. ing the month. This wo- 353.3 pts the previous month. The Bharti Airtel has clarified that no uld allow firms to 0.87% zooming rate of growth in individual promoter holds shares or recuperate from the high Sources: Exchange/Bloomberg January was largely due receives dividend from the company, and volatility in 2019, when to favourable market con- hence, the change in dividend policy is the sector saw the PMI contract during ditions and better underlying demand, not relevant. The error is regretted. three months, industry insiders said. said survey participants. Turn to Page 17 > ‘Father believed three engines can never run a company successfully’ Just months after his industrialist father K K Modi’s death, Lalit Modi is embroiled in a bitter battle clearly set out in the trust deed. In with his family, which includes his mother Bina, brother Samir, and sister Charu, on what course the case there is no unanimity ~10,000-crore group should take. In an e-mail interview, LALIT MODI explains to Surajeet Das Gupta amongst the four family members, why he is pushing for an outright sale of assets. Edited excerpts: a fact which was triggered in the November 30 meeting, it automati- The question many are asking is cally leads to sale of the entire trust why are you pushing for an funds and family-controlled busi- outright sale of all assets (Godfrey ness. The process dictates that all Phillips India, Indofil Industries, assets will be put for sale by an "THE REASON and Modicare) when the trust investment banker. While external WHY I PUT MY deed provides the option of sale of bids will come in, family members WEIGHT BEHIND some assets, and the running of have the right to match the bid. (ASSET) SALE IS some companies as well as all the companies together? You have said family members BECAUSE I DON’T Any sale short of all trust assets can match the bid and keep the BELIEVE THAT will be unfair to other share- company. Will you do so and ANY MEMBER OF holders and will be in con- match it? travention of the provi- My father was clear that share- THE TRUST HAS sions of the restated holder value is primary. He was THE ABILITY, trust deed. clear that three engines can never VISION OR Therefore, I have no run a company successfully. He AMBITION option but to reject was also of the view if family this. The choice, members want to acquire, then TO however, is not they can acquire the entire stake. CONTINUE" mine to make; it is Turn to Page 8 > 2 COMPANIES MUMBAI | THURSDAY, 6 FEBRUARY 2020 > Avenue Supermarts >Zee Entertainment Enterprises > Avanti Feeds > Tata Motors > BPCL STOCKS With ~1.41-trillion market Ministry of Corporate Q3 PBT down 36 per cent Unveiled a series of cars Russia’s largest oil IN THE NEWS capitalisation, enters Affairs orders inspections at ~73 crore; YoY and commercial vehicles producer Rosneft top 20 most-valued club of the company’s books at the Auto Expo 2020 keen to bid: Report

2,249.30CLOSE ~226.70 CLOSE ~599.00 CLOSE ~183.75 CLOSE ~501.65 CLOSE * OVER PREVIOUS CLOSE  4.35% UP*  7.49% DOWN* 10.38% DOWN* 10.89% UP* 4.79% UP* > . INDIA EIGHTH LARGEST AD Bharti Airtel pitches for For Tata Power, MARKET IN 2020: GROUPM generation may Vodafone Idea’s survival take a backseat Says three players will be the latter has increased. Bharti Airtel on Tuesday posted a net healthy for the sector loss of ~1,035 crore for the quarter ended “Right now, the share is 30% December 31, 2019 (Q3), as it provisioned for each, which will move to 40%, MEGHA MANCHANDA the interest accrued on account of adjusted 40% and 20% (T&D, renewable New Delhi, 5 February gross revenue (AGR) payment. This is the and generation). This would be company’s third consecutive quarterly loss; in terms of profitability” harti Airtel on Wednesday pitched it had recorded a profit of ~86 crore in the PRAVEER SINHA for a healthy telecom sector with year-ago quarter. On the operational front, CEO & MD, Tata Power The country’s top media agency GroupM on Wednesday B three players, and said Vodafone the company posted an improvement in said India would move two places up the pecking order of Idea’s survival will be good from the average revenue per user (ARPU) from ~128 global advertising market in 2020, standing at eighth ‘investment and reputation’ point of view to ~135, sequentially. position this year versus 10th last year. The overall size of for India. Mobile revenues have witnessed year- AMRITHA PILLAY expected to be ~900 crore. India’s ad market will be $13.2 billion or ~94,000 crore, In the company’s post-earnings confer- on-year (YoY) growth of 9.6 per cent on the Mumbai, 5 February In FY19, this loss was ~1,700 growing at 10.7 per cent from last year, when the overall size ence call, Bharti Airtel’s Chief Financial back of focus on quality customers, up- crore. “The nine month loss Officer (CFO) Badal Bagri said the telecom trading and the recent tariff actions in some Tata Power, which is into gen- for Mundra was at ~650-700 was $11.9 billion or ~84,917 crore. COMPILED BY VIVEAT SUSAN PINTO sector was large enough to accommodate parts. Liabilities and provisions as of Sep- eration for more than a century, crore. Better fuel manage- three players. “On Vodafone, I think my tember 30, 2019, aggregated to ~34,260 crore is making a conscious effort to ment, blending of coal and GLOBAL vs INDIAN AD GROWTH RATE view is that they will remain and I wish that Airtel’s CEO Gopal Vittal says the cost of (comprising principal of ~8,747 crore, inter- move away from it. coal prices falling have helped. 2019* 2020* Figures in % they thrive. India needs a three-player mar- 100 MHz of 5G spectrum will be close to est of ~15,446 crore, penalty of ~3,760 crore, The company plans to This will be one of the lowest 9.0 ket and it’s a large-enough market place to ~50K cr. “We believe the price is too high. and interest on penalty of ~6,307 crore). make just 20 per cent of its prof- annual losses for Mundra,” INDIA 10.7 absorb three players. I think it will be good So, we will not pick it up at those prices.” On October 24, 2019, the Supreme it through generation over a Sinha said. from all perspectives — investment, jobs Court delivered a judgment upholding the period of time with the remain- The company is also in the 3.7 GLOBE and reputation that Vodafone survives and call with investors on Wednesday. view of the Department of Telecom (DoT) ing planned from transmission process of renewing its mining 5.1 thrives and I have no doubt that they will do In December 2019, the Digital Com- in respect to the definition of AGR. The & distribution (T&D) and licence in Indonesia. Sinha so,” he said. munications Commission (DCC), the apex apex court has allowed three months to renewable energy. said the renewal application TOP-10 GLOBAL AD MARKETS Airtel also said it would not buy the 5G decision-making body in telecom, gave its the affected parties to pay the amount due “Right now, the share is will be filed next month; the spectrum in the upcoming auctions as the nod to spectrum auction plans, entailing to the DoT. roughly 30 per cent each, wh- licence for the PT Kaltim Prima ($ billion) % YoY Rank Country 2019* 2020* growth price is “too high.” 8,300 MHz of airwaves pan-Indian at a A review petition in this regard, too, was ich will move (over a period of Coal expires in 2021. According to the price recommended reserve price that adds up to ~5,22,850 crore. rejected in January. Thereafter, the telecom time) to 40 per cent, 40 per cent The company does not 1 US 227.0 246.0 8 by the Telecom Regulatory Authority of Meanwhile, Airtel said it would shut down operators have filed an application for mod- and 20 per cent (T&D, renew- expect any significant change 2 China 89.0 90.0 1 India (Trai), the cost of 100 megahertz of its 3G network in 11 circles across the coun- ification of the supplementary order before able and generation). This in the terms and conditions of 3 Japan 41.0 41.0 2 5G spectrum would be close to ~50,000 try. “We have completed 3G shutdowns in 11 the Supreme Court, which is pending dis- would be in terms of profitabil- the licence. The Mundra plant 4 UK 29.0 31.0 7 crore. “We believe the price is too high. circles and reformed spectrum to 4G,” said posal. As on December 31, Airtel had 419 ity,” said Praveer Sinha, chief is also awaiting clearance from 5 Germany 21.0 21.0 1 So, we will not pick it up at those prices,” Vittal. The company said capex would be million customers, an increase of 3.7 per executive officer (CEO) and multiple states for a revised tar- Bharti Airtel’s Chief Executive Officer utilised towards re-farming the 3G spec- cent from 403.7 million in the correspon- managing director (MD) of Tata iff, which will help the plant 6 France 15.0 15.0 4 (CEO) Gopal Vittal said in a post-earnings trum for 4G services as the consumption of ding quarter in the last financial year. Power. half its losses. “We continue to 7 Brazil 14.0 15.0 5 More than a year ago, Tata pursue CGPL tariff revision 8 India 11.9 13.2 11 Power clubbed its businesses with the state government,” 9 Canada 12.0 12.0 4 into separate clusters – its ther- Sinha said. mal assets are under the gener- Tata Power is also in the 10 Australia 11.0 12.0 2 India outlook still critical: Vodafone ation cluster. The other two process of monetising non-core main clusters are T&D and assets. Sinha said that in the BREAK-UP OF AD SPENDS IN INDIA AGENCIES from the Indian government to result of the EU (recommenda- renewable, which also includes next one year, Tata Power plans TV Print Internet Outdoor+Cinema Radio (Figures in $ bn) New Delhi, 5 February ensure that the rate and level of tions) and the UK government’s solar manufacturing. to divest $1 billion worth of 0.57 payments it makes… is sustain- decision, to take out Huawei Sinha said that in the ab- assets. These include Indon- The Vodafone Group on able and it can meet its other equipment from the core,” sence of any major capital ex- esian coal mine PT Baramulti 2018 4.8 2.65 2.49 0.31 Wednesday said the outlook for commitments as they fall due,” Vodafone CEO Nick Read said penditure in generation, invest- Sukses Sarana Tbk (BSSR). 5.1 2.61 3.17 0.61 Vodafone Idea remains critical it added. in a third quarter conference call ment made and planned in the As part of its divestment 2019* 0.4 as the firm seeks relief from the The British telecom giant to reporters. T&D business and renewable plan, Tata Power is exploring Indian government in the wake said the Department of Tele- “It will take around five years will start showing returns. various financial instruments, 2020* 5.48 2.61 4.0 0.66 of an “adverse judgement” by communications had in Nove- to implement at a cost of For the T&D business alone, including the infrastructure 0.43 the Supreme Court on the issue mber granted a two-year spec- approximately ^200 million,” the company expects profits to investment trust (InvIT) mod- of adjusted gross revenue (AGR). trum moratorium. “In January, he added, stressing that the cost double over the next few years. el. “We definitely look at vari- CONTRIBUTION TO TOTAL AD SPEND “In October, the Supreme the Supreme Court rejected the would mostly apply to its The company’s generation ous financial models, which TV Print Internet Outdoor+Cinema Radio (Figures in %) Court gave an adverse judge- review petition filed by VIL and in relation to AGR dues and oth- European activities outside of cluster does not include Coastal will help us grow and at the ment in [AGR] case against the other industry participants in er reliefs,” it said. Britain. The UK government Gujarat Power (CGPL), the sub- same time does not over- 5 4 5 3 5 3 industry. The outlook for Voda- relation to the AGR judgement. Vodafone revealed Wednes- decided last month to exclude sidiary which houses the leverage us. These are new fone Idea remains critical,” read Both VIL and Bharti Airtel have day that it would cost about Huawei from core parts of the Mundra power plant. models. With changes in the 23 30 a statement issued by the com- subsequently filed modification ^200 million ($221 million) over 5G network and also to cap its Sinha expects losses from Budget, one needs to under- 2018 44 27 2019*43 2020* 42 pany, which revealed its earn- petitions, which are expected to five years to remove Chinese share of the market at 35 per the Mundra power plant to be stand what the impact is. ings in the December 2019 quar- be heard imminently, to request group Huawei’s equipment cent, insisting that “high risk one of its lowest in the current These are things which are 24 22 20 ter. “Vodafone Idea is actively the Court to order the DoT to from core 5G European activi- vendors” would be excluded financial year. Mundra’s annu- still under discussion. We will seeking various forms of relief determine a payment schedule ties. “We have now decided, as a from “sensitive” activities. al loss in FY20, he said, is look at it,” Sinha said. (*figures are estimates) Source: GroupM IN BRIEF Adani Gas to close Adani Enterprises Auto slump drags Bosch It’s too early to take a call on Total deal by March Q3 PBT up by 318% Air India: Tata Sons chairman AMRITHA PILLAY VINAY UMARJI December profit, revenue Mumbai, 5 February Ahmedabad, 5 February Tata Sons Chairman N Chandrasekaran said on Wednesday it is ‘too early’ DEBASIS MOHAPATRA industry is in the grip structural factors, to take a call on Air India, in which the government has decided to sell its Adani Gas expects to close its deal with French Adani Enterprises’ (AEL’s) consolidated profit Bengaluru, 5 February of a slowdown with a THE RESULT mainly in the com- entire 100 per cent stake. “It is too early...” Chandrasekaran said when oil major Total by the end of the current before tax (PBT) for the quarter ended major technology Q3 of FY20 mercial vehicle and asked if Tata Group would be putting bid for the Air India stake purchase financial year, company officials said on December 31 grew 317.8 per cent to stand at The downturn in the automo- shift from Bharat tractor segments. In at the Auto Expo. The comments came in the wake of reports in a section Wednesday. The company reported a profit ~440.16 crore. The company’s consolidated PBT tive industry continued to adv- Stage (BS)-IV to BS- PBT Q3, firm’s revenues of media saying that Tatas appear to be moving closer to a decision to bid before tax (PBT) of ~143.62 crore, witnessing a in Q3 of the previous financial year 2018-19 was ersely impact auto components VI on the horizon. ~347.5 cr from mobility solu- for Air India in partnership with Singapore Airlines. PTI< more than double-digit growth. ~105.35 crore. major Bosch’s performance as Together with YoY growth tions decreased by On the Total deal, Adani Gas said, “The pri- The consolidated total revenue for AEL in Q3 the firm posted a decline both OEMs (original equi- -27.5% 26 per cent as mary part of the deal is closed and one of the of FY20 grew marginally by 4.99 per cent to in its net profit and revenues in pment manufactur- Powertrain Solu- KKR clarifies on Instamojo buys nominee of Total is a member on Adani Gas ~1,1075.32 crore, with contributions from its the third quarter ended ers), Bosch has been PAT tions division were board. The secondary part of the deal is now integrated coal management (ICM), mining December 2019 (Q3FY20). working relentlessly ~190.3 cr affected by the slow- ED property GetMeAShop from going on, hopefully, which should be over in the services and solar manufacturing businesses, The Bengaluru-headquar- to meet the April 1, YoY growth down. next couple of weeks.” The executive said the among others. The company’s consolidated attachment Times Internet tered firm posted 27.5 per cent 2020 deadline for the -43% Similarly, Bos- company was hopeful to close the deal by the total revenue in the third quarter of previous decline year-on-year (YoY) basis implementation of ch’s business bey- Shah Rukh Khan-owned Kolk- Fin-tech start-up Instamojo on end of the current financial year. Adani Gas in a financial year was ~1,0548.14 crore. in its profit before tax (PBT) at BS-Vl technologies,” Revenue ond mobility solu- ata Knight Riders (KKR) has clar- Wednesday said it had acquired January 14 statement said the Board of Directors In Q3, AEL’s ICM volume grew by 24 per cent in ~347.5 crore for Q3. Net profit said Soumitra Bha- ~2,537 cr tions sector posted ified Rose Valley had paid KKR of GetMeAShop, a Gurugram-bas- has appointed Alexis Thelemaque as an Q3 of FY20 to stand at 20.42 million metric tonnes declined 43 per cent at ~190.33 ttacharya, MD, Bos- a decline of 13.9 per YoY growth ~ 11.87 crores as sponsorship fe- ed start-up owned by Times In- additional director. In October last year, Total (mmt) as against 16.41 mmt in Q3 of FY19 while its crore, during this period. ch. “At the same time, cent on account of es. Rose Valley Hotels was one of ternet, in a deal that will see Ti- signed a definitive agreement to acquire 37.4 per mining services production rose by 28 per cent to As the automotive industry we are continuing to -15.7% decline in solar ene- KK’s IPL jersey sponsors for 2012 mes Internet further invest in cent stake in Gautam Adani-led Adani Gas for 4.77 mmt, up from 3.74 mmt in Q3 of FY19. Its solar goes through major disruption, invest in electrifica- rgy division. and 2013 seasons. “KKR had no the combined entity. The value about ~5,700 crore. Part of the process, Total was manufacturing volume, on the other hand, Bosch also witnessed 15.7 per tion and other mobility solu- In Q3, the firm made an other dealings with Rose Valley of the deal is $5 mn, Instamojo to purchase shares in Adani Gas through a ten- doubled from 140 Mw in Q3 of FY19 to 283 Mw in cent fall in its revenues from tions,” he added. additional provisioning of ~207 Group, including Rose Valley’s CEO Sampad Swain said, wit- der offer to public shareholders to acquire up to Q3 of FY20. Group Chairman Gautam Adani has operations at ~2,537 crore, com- According to the company, crore towards various restruc- micro-finance business,” the hout breaking down the value 25.2 per cent shares and purchase the residual said the firm continues to focus on incubating pared to ~3,007.8 crore a year there was no let-off in the down- turing and transformational company said. BS REPORTER< of the acquisition. BS REPORTER< shares from the Adani promoter family. assets in transportation and utilities space. ago. “The entire automobile turn, caused by cyclical and projects initiatives. Average salary increases by 8% as XLRI wraps up placements 43% of candidates recruited via pre-placement offers FMCG, telecom and pharma included A NEW HIGH the likes of McKinsey & Co, Bain & Co, VINAY UMARJI management. The Boston Consulting Group, Average salary Highest Ahmedabad, 5 February The final recruitment process at the Accenture Strategy, P&G, Hindustan B-school saw participation of 108 up by 8% to international offer Unilever, ITC, Colgate Palmolive, Cipla, Average salary offered by recruiters recruiters with 362 domestic and inter- ~24.30 lakh at~58.5 lakh Dr. Reddy’s, Astra Zeneca, and rose by eight per cent to ~24.30 lakh per national offers, including 24 new perannum perannum GlaxoSmithKline, among others. annum while the highest recruiters. Median salary, Marquee recruiters from BFSI, ITeS, international offer stood at New recruiters on the other hand, Median salary up by Highestshare of e-commerce and analytics included ~58.5 lakh per annum in the included firms such increased by 9.5 per cent to 9.5% to ~23 lakh batch placed via Citibank, J.P Morgan Chase, Goldman recently concluded recruit- as Arga Investment ~23 lakh per annum this perannum PPOs at43% Sachs, Microsoft, Amazon, Ola, ment process at XLRI — Company, Tolaram year, compared to ~21 lakh Media.net, Google, Flipkart, Tech Xavier School of Group, M H Alshaya, per annum in 2019. Mahindra and TCS, among others. Management. Myntra, Delhivery, Consulting firms con- Consulting picks 26%of batch, Meanwhile, J Christie, director of XLRI-Xavier School of JCB, Thoucentric, tinued to lead, extending sales and marketing 21% the institute, said interest in XLRI’s stu- Management said on Welspun, Diageo, 26 per cent of total offers, dents was “tremendous” with top com- Wednesday that it achieved Varroc, and CK Birla, followed by sales and mar- panies coming for recruitment. “We 100 per cent placements for among others keting at 21 per cent and Coopers made the highest number of (PPOs) with 43 per cent being placed Delhivery, JCB, Thoucentric, Welspun, attribute the excellent placements this all 359 candidates of the banking, insurance & offers among regular recruiters. via the route. Diageo, Varroc, and CK Birla, amongst year as an affirmation by the industry outgoing 2018-20 batch of postgraduate financial services (BFSI) with 17 per According to the institute, the batch New recruiters included companies others, while PSUs included Power of the high standard of management- diplomas in the streams of human cent roles offered. also received the highest number of such as Arga Investment Company, Finance Corporation and GAIL. centric education that we strive to resource management and business Overall, KPMG and Pricewaterhouse offers through pre-placement offers Tolaram Group, M H Alshaya, Myntra, Other top recruiters in consulting, deliver to our students.” MUMBAI | THURSDAY, 6 FEBRUARY 2020 COMPANIES 3 . < Dalmia Cement subsidiary and GuarantCo settle claims

TDS on e-com transactions Dalmia Cement (Bharat) subsidiary, before the Guwahati Bench of the National each other relating to the petition. Sources Calcom, and GuarantCo, a financial cred- Company Law Tribunal (NCLT). Calcom said, the settlement amount was under itor, have settled all claims and counter was admitted to the tribunal following an ~100 crore. The parties are taking steps for claims amicably, a statement from Dalmia appeal from Mauritius-based GuarantCo. completion of formalities for withdrawal Bharat Group said. The settlement also However, according to the settlement, the of the petition before the NCLT, Guwahati. ‘unnecessary papercut’ includes claims/ counter claims that were parties shall not claim any dispute against ISHITA AYAN DUTT

NEHA ALAWADHI New Delhi, 5 February “THERE IS AN INTRODUCTION he proposed levy of 1 per cent tax OF TAX COLLECTED AT SOURCE. deducted at source (TDS) on e- THESE SEEM LIKE HARMLESS T commerce transactions, anno- unced in the Budget this year, could PAPERCUTS, BUT THEY IMPACT impact the working capital of small THE WORKING CAPITAL OF businesses, said Amit Agarwal, country SMALL BUSINESSES. IF YOU head of Amazon India, on Wednesday. He was speaking at the 14th India LOOK AT HOW BUSINESSES Digital Summit of the industry body HAVE TO REGISTER AT EACH Internet and Mobile Association of India, where he is also the chairman. AND EVERY STAGE IN THE “Just look at the recent Budget. There COUNTRY TO DO BUSINESS, is an introduction of tax collected at THIS IS JUST AN UNNECESSARY source. These seem like harmless paper- cuts, but they impact the working capi- PAPERCUT” tal of small businesses. If you look at AMIT AGARWAL how businesses have to register at each Country head, Amazon India and every stage in the country to do business, this is just an unnecessary papercut,” said Agarwal. ator, defined as an entity owning, oper- Zomato, Swiggy and so on. He added that a lot more can be done ating or managing the digital platform, Both Amazon and Walmart-owned if the country focused on removing fric- will have to deduct 1 per cent TDS on the Flipkart have said they would reach out tion in business transactions. gross amount of sales or service or both. to the government for clarifications on Agarwal was talking about the This provision will not apply in cas- the proposal, given it has a direct Budget proposal to introduce a new sec- es where the seller’s gross amount of impact on the sellers and medium and tion in the Income Tax Act. sales during the previous year through small enterprises listed on their plat- Experts have said that the proposal e-commerce operator is less than ~5 lakh forms. has the potential to affect working cap- and the seller has furnished his At the event, Agarwal also spoke ital of e-commerce companies and Permanent Account Number or about the importance of skilling, grass- reduce cash flows for e-sellers. Some Aadhaar. root entrepreneurship, driving equal have pointed out that the TDS will lead Given the wide definition, the pro- opportunity through greater women’s to cash being stuck with the government posal will impact not just e-commerce participation in the workforce, better in the refund system. marketplaces but also all kinds of digital use of artificial intelligence-backed In the Budget, the explanation for the businesses such as Oyo, Uber, Ola, solutions, and the need for having sta- proposed levy said the e-commerce oper- Urban Company, MakeMyTrip, Myntra, bility and predictability in policies.

Infosys, TechM get HC notices

INDIVJAL DHASMANA New Delhi, 5 February

The Delhi High Court has Disney Plus issued notices to Infosys and Tech Mahindra on a petition set for India regarding technical flaws in the online portal system debut on evolved by the Goods and Services Tax Network (GSTN). March 29 The two firms are IT sup- port contractors for the por- PRESS TRUST OF INDIA tal. The court said their pres- February 5, 2020 ence was needed “to better appreciate the intricacies, and Disney has announced that to ensure the grievances its subscription-based stream- raised by the taxpayers and ing service Disney Plus, which our orders are understood and launched in the US in Nove- implemented in true per- mber last year, will arrive in spective”. Harpreet Singh, India on March 29 through its partner at consultancy KPMG, Hotstar app. said the petitioner had raised The announcement was the issues of non-availability made by Disney CEO Robert of annual forms under the Iger during the company's GST system for 2018-19, quarterly earnings call on among others. Tuesday. "We're excited to announce that we will be launching Disney Plus in India through our Hotstar service on March 29th at the beginning of the Indian Premier League cricket sea- son," Iger said. Though the Disney top boss didn't go into the specifics, he said the company will rebrand the Hotstar app to "Disney Plus Hotstar". "We see this as a great opportunity to use the proven platform of Hotstar to launch the new Disney Plus service in one of the most populous countries and fastest growing economies in the world," he added. Disney had acquired Hotstar streaming service in 2017 as part of its acquisition of Fox Studios, which also included the entire Star India group. As of now, most of the premium Disney content is available on Hotstar app. But the decision to club Disney Plus with Hotstar will enable the Indian subscribers to finally watch some of the newer content from the stu- dio's streaming service, most notably "Star Wars" spin-off series "The Mandalorian" which is currently only avail- able on Disney Plus. Iger said the company is yet to finalise the pricing aspect of the rebranded streaming service, but it will be offered in two categories. "One will be more premi- um in nature that will include the entire library, so with the original programming and the other one will be more basic that will have the library and not the original program- ming," he said. The Disney CEO also revealed that the company hopes to capitalise on the Indian Premiere League as Star India is the offi- cial broadcaster of the league. "Priced for the market and launched at a very peak peri- od of time for the IPL, the cricket league. 4 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 6 FEBRUARY 2020 “We have readied a scheme for the “A scare is created as if the CAA is a threat to “Dear PM, The economy has imploded & you must development of Ram Temple in Ayodhya. Muslims. CAA is no threat to Muslims, if be racking your brains on how to avoid the A trust has been formed, it is called Shri they face trouble (due to the law), I will be blame. Use the useless Budget presented by Ram Janambhoomi Teertha Kshetra" the first person to raise voice for them” clueless Nirmala Ji. Sack her and dump the NARENDRA MODI RAJINIKANTH blame on her” Prime Minister Actor RAHUL GANDHI, Congress leader

> . Bill to resolve tax disputes tabled in Lok Sabha DILASHA SETH in such cases is pending or has been 30, 2019 (cited above), almost equals to undisclosed foreign income, New Delhi, 5 February paid. The pending appeal may be THE LOWDOWN Who will escape scrutiny Won’t apply to... direct tax collections of ~11.37 trillion assets, assessment or reassessment. against disputed tax, interest or  Scheme, open till June 30, offers  Tax arrears related in 2018-19. Rakesh Nangia, chairman, Finance minister Nirmala penalty in relation to an assessment complete waiver of interest and to assessments in The Bill says that tax disputes Nangia Andersen Consulting, said it Sitharaman on Wednesday intro- or reassessment order or against dis- penalty, if payment made by Mar 31 nature of search consume copious amounts of time, can be a beneficial scheme for set- duced a Bill in the Lok Sabha to give puted interest or fee. In fact, the energy and resources both on the tlement of cases such as addition of  and requisition effect to the Budget announcement appeal may even be against tax Additional 10% of tax amount to be part of the government as well as unexplained cash deposited during to resolve direct tax disputes involv- determined on defaults in respect to paid if payment made after Mar 31  Cases where prose- taxpayers and deprives the govern- demonetisation. ing an aggregate ~9.32 trillion as on tax deducted or collected at source.  For tax arrears pertaining to interest cution has been ment of timely collection of rev- He added, “It would be beneficial November 30, 2019. In case of tax arrears pertaining and penalty, 25% of disputed instituted enue. “Therefore, there is an urgent to such taxpayers, to pay the tax The Direct Tax Vivad se Vishwas to only disputed interest or penalty, penalty/interest will have to be paid  Tax amount related need to provide for resolution of amount and settle the disputes with- Bill, 2020, offers waiver of interest, 25 per cent of the disputed penalty pending tax disputes. This will not out imposition of interest and penal- by March 31 and 30% if payment to undisclosed for- penalty and prosecution for settle- or interest will need to be paid while made after that only benefit the government by ty.” Neeru Ahuja, partner, Deloitte ment of these disputes. They will settling appeals up to March 31. It eign income, assets generating timely revenue but also India, said that the timelines seem have to be pending before the com- will be 30 per cent if the payment is the taxpayers. They will be able to quite sharp and the workings will missioner (appeals), Income Tax made after that. erating some revenue. She added announced the scheme – Sabka week. “In order to implement the deploy time, energy and resources need to be done at the earliest to Appellate Tribunals (ITATs), high The Budget scaled down the that the Bill emphasises on trust Vishwas Scheme – in her first scheme, the CBDT needs database saved by opting for such dispute meet the March 31 deadline. courts or the Supreme Court as on direct tax collection target to ~11.7 building and provides a formula- Budget last year to reduce litigation on such litigations pending at the resolution towards their business Amit Maheshwari, managing January 31, 2020. trillion in the revised estimates for based solution without any dis- in indirect taxes. It resulted in set- high court level,” the communica- activities.” partner, Ashok Maheshwary & While a complete waiver of inter- FY20 from ~13.35 trillion given in crimination. tling over 1,89,000 cases. tion to the commissioners read. The scheme will not apply to Associates, said the order passed by est and penalty will be given in case the Budget estimates. Even this In her Budget speech on Preparing groundwork for the It is, therefore, requested that prosecution cases under the Indian the designated authority determin- of payment made by March 31, an would require a 2.9 per cent growth February 1, Sitharaman had direct tax resolution scheme, the data on pending appeals at high Penal Code (IPC), the Prevention of ing the amount payable will be final. additional 10 per cent of the disput- year-on-year. Introducing the Bill, announced a scheme to resolve Central Board Of Direct Taxes courts, as on January 31, 2020, be Money Laundering Act (PMLA) and No further recourse in terms ed amount will have to be paid after Sitharaman said the scheme will 483,000 direct tax disputes pending (CBDT) asked its offices across the obtained with the help of the court the Prohibition of Benami Property of appeals, arbitration, mediation that. The scheme will apply to cas- reduce litigation expenditure for the in various tribunals. country to provide data on pend- registry. The amount of ~0.32 tril- Transactions Act. Besides, the dis- or conciliation will be available to es irrespective of whether demand government and may help in gen- Sitharaman had similarly ing appeals in high courts by next lion in tax disputes as on November puted tax amount should not relate the taxpayer. IN BRIEF MFs and traders Unemployment rate at FC to set up panel on debt, 6.1% in 2017-18: Govt look for cues on Unemployment rate in the fiscal situation this month country, according to a new Operation Twist survey, was 6.1 per cent in 2017- May include members of also expected to take a look at Article 18, the government informed 293(3) of the Constitution, which says a LEADING GAINERS the Rajya Sabha on Wednesday. former FRBM committee state cannot raise any loan without the Exposure to government securities has impacted Minister of State for Labour Centre’s consent if there is an outstand- Santosh Gangwar said the ARUP ROYCHOUDHURY & INDIVJAL DHASMANA ing loan made by the Centre to the state. scheme returns government is conducting a New Delhi, 5 February “I did not touch upon this in the Dynamic funds 3-month G-secs new Periodic Labour Force Survey with new parameters and FRBM Committee because that mostly return (%) (% of NAVs) bigger sample size, and its results cannot be compared with The Fifteenth Finance Commission focused on the Centre’s finances,” Singh ICICI Pru All Seasons 3.10 34.97 previous surveys in this regard. "As per the new Periodic Labour (15th FC) will set up a panel later this said. When asked if he would invite his Axis Dynamic Bond Fund 2.93 22.57 Force Survey being conducted by the government, the labour month to examine the fiscal and debt former colleagues from the FRBM force participation is 36.9 per cent and the rate of unemployment situation of the Centre and states and Committee to be part of the panel, Singh Quantum Dynamic Bond Fund 2.73 25.17 for 2017-18 is 6.1 per cent," he said. PTI< present a road map, on the lines of the replied in affirmative. IDFC Dynamic Bond Fund 2.66 98.91 erstwhile Fiscal Responsibility and “Roy is here in Delhi, Subramanian is SBI Dynamic Bond Fund 2.45 18.45 Budget Management panel, the abroad, but has views on fiscal consoli- DSP Strategic Bond Fund 2.31 78.8 Middle class ‘trained Commission’s Chairman N K Singh said dation. I might want to hear Patel, and 654 Indian-owned on Wednesday. some experts like Chinoy and Mishra,” Kotak Dynamic Bond Fund 2.24 33.67 firms employ over enough’ to pick right The panel may include or seek inputs Singh said. Note: Dynamic funds take exposure across duration Source: Value Research, factsheets, as of December 31, 2019 174,000 in UK: Report option: Rajiv Kumar from former Reserve Bank of India The FRBM Committee comprised of Governor Urjit Patel, former Singh, former finance secretary Sumit JASH KRIPLANI lead to sharp variations in per- Indian diaspora-owned firms NITI Aayog Vice chief economic advisor Arvind N K Singh, chairman of the 15th Finance Bose, Patel, Subramanian, and Roy. The Mumbai, 5 February formances between funds in the UK with a combined Chairman Rajiv Subramanian, Sajjid Chinoy of the Commission, will head the panel committee, which submitted its report with higher exposure to revenue of £36.84 billion Kumar said the Prime Minister’s Economic Advisory to former finance minister Arun Jaitley Debt fund managers and longer-tenure government employ over 174,000 people middle class is Council, Rathin Roy of National before the 2017-18 Budget, had recom- traders will closely monitor securities (G-secs) and those and pay over £1 billion in “trained Institute of Public Finance and Policy, THE ROAD AHEAD mended a fiscal deficit target of 2.5 per the Reserve Bank of India with lower exposure," said corporation tax, according to a enough” to and Prachi Mishra of Goldman Sachs, |Committee may recommend fiscal cent of gross domestic product, and rev- (RBI) for cues on Operation Arvind Chari, head-fixed first-of-its-kind research. PTI< decide which personal among others. road map for Centre and states enue deficit of 0.8 per cent for fiscal year Twist as factoring in timing income and alternatives, income tax option is good for “One of the terms of reference of the 2022-23. and quantum of these market Quantum Advisors. |May include or take inputs from them and exuded confidence Commission is to address the issue of Other recommendations included operations has become key to Fund managers say the RBI Govt to finalise PSU that their propensity to save general government, the consolidated Urjit Patel, Arvind Subramanian, setting up a fiscal council and giving optimising portfolio returns intervention in markets will be insurers’ merger by will not come down. PTI< fiscal deficit and debt and so on. So, and others the government tightly defined escape with long-term yields suscep- easier to monitor if it is pegged March: Finance secy after my meeting with the 15th FC’s eco- |Will have representatives from clauses to enable any deviation from the tible to sharp easing from to reaching a particular thresh- Fitch says Budget nomic advisory council on February 13, CGA, ICAS roadmap. Subramanian had drafted a these measures. old on absolute long-term The I intend to constitute a committee under |Panel will submit its report to the dissent note, which was part of the pan- Operation Twist is a mar- yields, or alternatively focused government was light on new my chairmanship, since I had the 15th Finance Commission el’s report. ket term for special open mar- on bringing down the spreads aims to chairmanship of the FRBM Committee,” Finance Minister Nirmala ket operations (OMO) con- to a level such as 100 basis complete structural reforms Singh said. Sitharaman used the escape clauses to ducted by RBI, where it buys points (bps), from 135 bps at merger of The Union Budget for 2020-21 Singh said the panel will include rep- revise the budgeted fiscal deficit target long-term government bonds present. three state- was light on new structural resentatives from the Controller General debt and deficit levels, while fostering of 2019-20 and the medium-term fore- and sells short-term ones. “With RBI’s routine OMO, owned reforms, Fitch Ratings said on of Accounts, the Indian Civil Accounts higher inclusive growth in the country, cast for 2020-21 by 0.5 percentage points RBI has conducted the markets have some pre- general insurance firms — Wednesday, adding it has not Service, state expenditure departments, guided by the principles of equity, effi- each. The Centre now sees fiscal deficit operation four times so far. dictability as these are usually National Insurance, United materially altered its forecasts and other central and state bodies, as ciency and transparency.” at 3.8 per cent of GDP for FY20 and 2.5 However, the central bank linked with structural liquidi- India Insurance, and Oriental for India's growth to rise to well as domain experts. The panel will submit its report to the per cent for FY21. bought more bonds than it ty. But, with Operation Twist Insurance — by the end of 5.6 per cent in FY21, from 4.6 “The aim will be to come up with a 15th FC, which may include those rec- In its first report – for FY21 – the 15th sold, which is akin to the tra- there is not yet any quantifi- March, Finance Secretary Rajiv per cent in 2019-20. PTI< report to address the terms of reference ommendations in its second report, FC has recommended the creation of an ditional OMO purchases in able measure to gauge the Kumar said. PTI< given to the Commission,” said Singh. expected to be submitted in October, and overarching legal fiscal framework to which it directly buys dated interventions,” said a fund The terms of reference say: “The will make recommendations for the peri- improve and overhaul budgeting at the bonds from the secondary manager. Hopeful of listing Commission shall review the current od financial year 2021-22 (FY22) to FY26. central and state level, as well as provide market. The first such special “Some participants expect Govt: Surplus land LIC next fiscal year, status of the finance, deficit, debt levels, “The panel will see whether we are greater budgetary transparency. OMO operation was operations to continue, some of CPSEs to be sold cash balances and fiscal discipline compliant with terms of reference. One Mirroring the FRBM Act, this would announced on December 19. have doubts. RBI’s post-policy says DEA secy efforts of the Union and the states, and of the overarching issues that the also define the roles and responsibili- “This is the first monetary comments will help take an at market rate The recommend a fiscal consolidation Commission is expected to weigh in on ties of key stakeholders, as well as the policy after Operation Twist informed view,” said A The Centre on Wednesday government roadmap for sound fiscal management, is the path, issues and factors of the budgeting, accounting, internal control was announced. So far, RBIs Prasanna, head of research at said the disinvestment is hopeful of taking into account the responsibility debt and fiscal deficit of Centre and and audit standards to be followed at intervention has not been ICICI Securities Primary process of Central Public selling of the central government and state gov- states to be compliant with the FRBM all levels of government. The first report anchored to any stated objec- Dealership. Sector Enterprises (CPSEs) will minority ernments to adhere to appropriate levels Act,” Singh said. was tabled in Parliament on February tive — targeting yield curve or be done in a transparent stake in LIC of general and consolidated government The panel, and hence the 15th FC, is 1, along with the Budget. spread compression. This can Anup Roy contributed to the story manner and surplus land of in the next such units would be sold at fiscal year, Economic Affairs commercial rates to states or Secretary Atanu Chakraborty any private party. PTI< said. It would take 8-9 months to prepare accounts HPCL reports and do the required legal YESBank CEO taps ‘mentor’ to raise $2 bn $118.3 bn received tweaking before an IPO could 144% rise in in remittances since be launched, he said. PTI< BLOOMBERG “As credibility and senti- HOW THE STOCK 5 February ment get eroded, time is run- pre-tax profit 2018-19: Centre ning out for the bank to raise MOVED ON BSE An estimated Fairfax-backed YES Bank has picked Cantor capital,” according to Intra-day price in ~ AGENCIES 13.62 million CSB Bank to open Fitzgerald, IDFC Securities Bloomberg Intelligence ana- New Delhi, 5 February Indians are and Ambit to help the lender lyst Diksha Gera. 40 staying 100 branches a year raise as much as $2 billion for “With the bankers for fund Hindustan Petroleum Corp abroad and Fairfax Holdings-backed CSB bolstering capital buffers, raising in place YES Bank 38 (HPCL) on Wednesday report- 34.95 $118.3 billion Bank will open about 100 people with knowledge of the needs to move quickly to ed a 144 per cent increase in has been received as branches each financial year matter said. avoid panic among credit 36 profit before tax at ~1,150.84 remittances since April 2018 in the medium term, C V The bank, staggering under investors, which could cause 37.60 crore in the quarter ended up to September last year, Rajendran, its MD and CEO, the weight of soured loans, has unwanted liquidity pressure.” 34 December 2019 (Q3FY20) over the government informed told Business Standard. These been plagued by worries about Cantor Fitzgerald is led by Feb 4,’20 Feb 5,’20 the same period in FY19. It saw Lok Sabha on Wednesday.PTI< will be opened in areas with its asset quality and uncer- Anshu Jain, the former co- its net profit treble in the quar- gold loan, agri & MSME, and tainty about efforts to raise chief executive officer of ter as inventory gains made up current and savings account new capital. It’s trying to shore Deutsche Bank AG until 2015, Ex-director writes to RBI, seeks Gill’s removal for lower refinery margins. 50 mn farmers yet potential. ABHIJIT LELE< up a core equity capital ratio while Gill headed the German Net profit in October- to get 3rd payment that’s barely above a regulato- bank’s Indian operations PRESS TRUST OF INDIA corporate governance at the managing director. December at ~747 crore was ry minimum of 8 per cent. before he joined YES Bank New Delhi, 5 February private sector lender. The m-cap of the bank was higher than net profit of ~248 of PM-Kisan: Data Indiabulls Housing The lender’s shares surged last year. The Economic Times In a letter to RBI Governor ~55,000 crore on March 1, 2019, crore in the same period a year Over 50 million farmers were pre-tax profit the most since November 27 on reported the appointment of Former YES Bank independent Shaktikanta Das, Agarwal the date when Gill joined. The back, HPCL Chairman and yet to get the third Wednesday as investors were the banks earlier. director Uttam Prakash Agarwal alleged breach of governance, m-cap as on January 29, 2020, is Managing Director Mukesk K instalment of money under falls 55% in Q3 encouraged by the move to pick A spokesman for YES has demanded appropriate non-compliance, undue ~11,000 crore, it said. Surana told reporters here. the Centre's ambitious PM- Indiabulls Housing Finance bankers, while its 2023 dollar Bank and spokeswoman for action against the lender's CEO influence and control on the By use of various unethical “In Q3 of the last fiscal we Kisan scheme, aimed at reported a 55 per cent fall in bond gained the most since Ambit declined to comment and MD Ravneet Gill for majority members of the board means, Gill has been able to had an inventory loss of providing direct support of pre-tax profit at ~613 crore in January 15. YES Bank, led by about the fund raising plans. allegedly violating various by Gill through quid pro quo. effectively control the majority ~3,465 crore. As compared, ~6,000 annually to them, Q3, against ~1,387 crore in the Chief Executive Officer Ravneet A representative for IDFC regulatory norms. Agarwal, who The letter also alleged there of board members and Key we made an inventory gain according to data. The total year-ago period as both net Gill (pictured), has lost more than Securities and spokeswoman was independent director in has been substantial erosion in Management Personnel (KMP). of ~343 crore,” he said, amount is to be paid in three interest income and revenue 80 per cent of its market value in for Cantor didn’t immediate- 2018, resigned from the board of the market capitalisation (m- The CEO seems to be adding the inventory gains equal instalments of ~2,000 saw a decline. BS REPORTER< the past year on concerns about ly respond to emails seeking YES Bank last month citing cap) of about ~40,000 crore knowing the weak points of were partly offset by lower every four months. PTI< its ability to raise funds. comment. deteriorating standard of since Gill took over as the KMP of the bank, it said. exchange gains. 6 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 6 FEBRUARY 2020 1 >

N CABINET DECISIONS N Rosneft to supply RBI to get more control over co-op banks SOMESH JHA MORE TEETH BUT... tion of co-operative banks. New Delhi, 5 February As of March 2019, 1,544 Even after the changes in the urban co-operative banks crude to IOC; India The Reserve Bank of India legislation, the central bank accounted for merely 1.6 per (RBI) is set to get more audito- will gain regulatory control cent out of the 97,792 co-opera- ry and supervisory powers over over only a small fraction tive banks. In fact, 96,248 rural of co-operative banks urban and multi-state co-oper- co-operative banks accounted   ative banks, with the Union Urban Rural for around 65 per cent of the & Russia talk BPCL Cabinet approving the Banking assets of co-operatives and were Regulation Amendment Bill, controlled by the respective JYOTI MUKUL 2020, on Wednesday. state government legislation. New Delhi, 5 February “Like commercial banks, 96,248 64.7 Asset size 35.3 Javadekar said co-opera- multi-state and urban co-oper- (% share) tive banks had 86 million fter getting a foothold in ative banks will be brought depositors with total deposits

the Indian petroleum under the regulations of the 1,544 of around ~5 trillion. While the market by buying out RBI. These changes will be only registrars under the state and A No. of co-operative banks Essar Oil in 2017, Russia’s state- for the banking side and central governments have owned Rosneft on Wednesday administrative rights will con- Urban co-operative banks control over incorporation, signed an agreement with tinue to remain with the regis- Figures in ~ trillion registration, management, Indian Oil Corporation for pro- trars,” said Information and 4.84 3.03 5.99 recovery, audit, supersession viding 2 million tonnes of Urals Broadcasting Minister Prakash of board of directors and liq- grade crude oil to the latter. Javadekar. Deposits Advances Total assets uidation, the RBI is “invested Source: Trend and Progress of Banking in The oil will be shipped to The Union Cabinet was India, 2018-19 (RBI) with regulatory functions”, India this year. Rosneft is also chaired by Prime Minister according to the RBI’s Trends expected to bid for the govern- The contract is part of India’s strategy to diversify the country’s Narendra Modi. which will need the consent of ures will give financial stability to crore worth loans to real estate and Progress Report 2018-19. ment-owned Bharat Petroleum crude oil supplies from non-Opec countries Javadekar added that the the regulator to appoint a chief the sector and protect the depos- firm HDIL. The RBI is also responsible Corporation (BPCL). audit of such co-operative executive officer. itors’ interests. The RBI will bring There was a dual control of for the supervision of urban co- The Russian major already which is witnessing robust crude oil. Pradhan said that banks will be according to RBI The managements of such the co-operative banks under its the RBI and respective states operative banks, empowered to holds 49 per cent in Nayara growth in demand for petrole- hydrocarbon is an important regulations and the best man- banks are elected through co- control in a phased manner,” the and the central governments give suggestions on prudential Energy, the erstwhile Essar Oil. um products. It will also open pillar of the bilateral strategic agement practices laid down operative bodies at present and minister said. that restricted timely regulator norms for capital adequacy, Nayara owns a 20 million tonne up avenues for other public sec- partnership. “Indian oil and gas by the regulator will also apply the RBI has limited control over The move is the fallout of a action against co-operative income recognition, asset clas- refinery in Vadiar, Gujarat, and tor undertaking (PSU) oil refin- companies value their associa- to them. Further, the RBI will their appointments. fraud unearthed at Punjab and banks. However, even after the sification and provisioning, has a network of 5,600 petrole- ers to enter into similar term tion with Rosneft, one of the be allowed to set the minimum “If the situation gets worse, Maharashtra Co-operative recent proposed changes in liquidity requirements and sin- um retail outlets across India. contracts for import of Russian important companies partner- level of qualifications for the the RBI will get powers to super- Bank whose management had legislation, the RBI will be gain- gle or group exposure norms. The crude purchase agree- crude oil,” said the release. ing India’s energy security board members of such lenders sede the board. All these meas- allegedly handed over ~6,700 ing control over a small frac- ment with Indian Oil was Both sides agreed to take objectives,” he added. signed during a meeting forward mutually aligned pri- Both sides agreed to take for- between Union Minister of orities, including preparing a ward mutually-aligned priori- Petroleum and Natural Gas and road map for Indian invest- ties discussed during Pradhan’s Steel Dharmendra Pradhan and ments in the Eastern Cluster visit to Russia in September last Maharashtra to have India’s 13th major port Rosneft chairman and chief projects of Russia. year. This includes preparing a executive officer Igor Sechin. It was noted that the four roadmap for Indian invest- MEGHA MANCHANDA ect soon,” shipping minister world. The new port will also The long-term contract is a Indian oil and gas PSUs have ments in the Eastern Cluster New Delhi, 5 February WHAT’S IN STORE Mansukh Mandaviya said. cater to the spillover traffic part of India’s strategy for diver- already submitted the expres- projects of Russia, especially in |Boost for port-led development The reason behind setting from JNPT once its planned sifying the country’s crude oil sion of interest to Rosneft to par- the Arctic. The Union Cabinet on and reduction in logistics cost up another major port on the capacity of 10 million TEUs is supplies from non-Opec coun- ticipate in the project. Pradhan said Indian com- Wednesday approved the set- |New port to give tribal area west coast is because of the fully utilised. tries. It is also a part of the five- In order to negotiate the panies, especially Engineers ting up of the country’s 13th development a boost exhaustion of container cargo The Vadhavan port has a year roadmap for bilateral coop- terms of Indian companies India, have considerable expert- major port at Vadhavan in capacity of the JNPT, which is natural draft of about 20 |Higher cargo movement from eration in the hydrocarbons entering Vostok Oil in the short- ise in providing engineering Maharashtra at a total cost of 10 million TEUs (twenty foot metres close to the shore, mak- south Gujarat, Indore (Madhya sector. A pact in this regard was est time possible, it was agreed consultancy as well as execut- ~65,544.54 crore. Pradesh), Maharashtra, equivalent unit). On the west ing it possible for it to handle signed during Prime Minister to create a working group of rep- ing mega projects across the The Vadhavan port will be Telangana, north Karnataka and coast, this capacity is 18 mil- bigger vessels. Development of Narendra Modi’s visit to resentatives of Russian and hydrocarbons value chain. developed on “landlord model” land-locked states of North India lion TEUs while the total this port will enable cargo con- Vladivostok last September, said Indian companies. Sechin indicated his readi- (where infrastructure is leased requirement will increase to 25 tainer vessels of 16,000-25,000 a press release from the ministry During Wednesday’s meet- ness to intensify cooperation to to private firms or industries million TEUs in 2030. TEUs capacity, giving advan- of petroleum and natural gas. ing, both the countries strengthen India’s energy secu- and chemical plants). A special ing connectivity to the hinter- New Mangalore, Cochin, With development of the tage of economies of scale and “The addition of Russia as a reviewed the ongoing invest- rity and work jointly with purpose vehicle (SPV) will be land. All the business activi- Chennai, Kamarajar, V O Vadhavan port, India will reducing logistics cost. new source for crude oil imports ments between Indian oil & gas Indian oil and gas companies. formed, with the government ties would be undertaken Chidambaranar, break into the countries with The demand for container by India’s largest refiner will go PSUs and Rosneft. They called The crude oil, being sourced planning to hold 51 per cent under the private-public part- Visakhapatnam, Paradip and top 10 container ports in the traffic will further accelerate a long way in mitigating the risks for enhancing energy coopera- under the contract, will be stake in the project. nership mode. Kolkata (including Haldia). world, Mandaviya said. after the plans for improving arising out of geo-political dis- tion further and strengthening loaded in Suezmax vessels at The SPV will develop the Currently, India has 12 “Setting up a major port is a The central government logistic infrastructure fructify ruptions. The new arrangement hydrocarbons engagement, the Novorossiysk port of Russia port infrastructure including major ports – Deendayal, big task and takes time but I felt the need for a deep draft and the ‘Make in India’ push would also usher in price stabil- both on the investment front as and come to India, bypassing reclamation, construction of Mumbai, Jawaharlal Nehru am hopeful that we should be port to accommodate the drives greater exports, an offi- ity and energy security for India, well as sourcing natural gas and the Straits of Hormuz. breakwater, besides establish- Port Trust (JNPT), Mormugao, able to start work on the proj- largest container ships in the cial statement said. 8 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 6 FEBRUARY 2020 1 > CORONAVIRUS OUTBREAK UK claims breakthrough, WHO Cipla sees opportunity for its anti-HIV drug snubs it as death toll nears 500 SOHINI DAS Mumbai, 5 February Outbreak won't impact China-India trade ties, says Chinese ambassador With anti-HIV drugs being orld Health Organization officials have considered a possible line of damped down expectations of imminent treatment for the novel coron- W breakthroughs in the development of vac- avirus that is spreading across cines or treatments for the outbreak. “There are no the globe, companies like proven, effective therapeutics” for the novel coron- Cipla that make a particular avirus, Mike Ryan, executive director of the WHO’s anti-HIV drug combination Health Emergencies Program, said on Wednesday at see an opportunity. a press conference in Geneva. Kedar Upadhye, global The UN agency plans a systematic review of all ther- chief financial officer of Cipla, apeutics, Ryan said. The organization will share clini- said: “Within the next few cal trial protocols around the world, he said. weeks or so, if scientific data An antiviral drug from Gilead Sciences is expected shows that the two antiretro- to start testing in China in the coming days. A Chinese vial medications — lopinavir TV report said researchers at Zhejiang University had and ritonavir — can be used A woman with her child outside the special isolation ward set found an effective drug for the virus, while Britain’s Sky effectively to tackle coron- up for coronavirus patients, at Kochi medical college PHOTO: PTI News said researchers had made a “significant break- avirus, we do see an opportu- through” in developing a vaccine. Oil prices jumped on nity there.” novel coronavirus, which has tion and an anti-flu medica- the reports. Later in the day, the Drug caused the deaths of about tion (oseltamivir). Controller General of India 500 people globally. Cipla can supply the drug Trade relations with India approved the “restricted use” However, this is yet to be globally if needed as it In an interview to PTI, Chinese Ambassador Sun of the drug combination. established scientifically. already has approvals in Weidong said China's foreign ministry and local gov- According to government Doctors are scrambling for a many countries. The compa- ernments are working hard to ensure the safety of Officers spray Indonesians with antiseptic at Hang Nadim Airport in Batam (Indonesia) as they arrive from sources, apex health research potent treatment for the virus, ny also hopes that in case of a Indians and people working in Indian diplomatic mis- Wuhan, before transferring them to the Natuna Islands military base to be quarantined PHOTO: REUTERS body Indian Council of which is spreading fast and global health emergency, sions in China. Medical Research had sought has no vaccines available yet. approvals would not take Admitting that there could be a short-term impact an emergency approval from Traditional flu medication, much time. Cipla has already of the epidemic on China's economy, he said the coun- 490 DEATHS AND 24,324 CONFIRMED CASES the DCGI for the medications. and even Tamiflu, is not likely received queries from China try's internal resilience is growing and it has ample | Baby tests positive for China virus | Cathay Pacific asks staff to take unpaid leave, Upadhye said the drug to contain the spread. for supply of the drug. resources and policy tools to cope with economic combination (which Cipla sells About a few weeks back, It has sufficient raw mate- volatility. “I am confident that it should not and will not just 30 hours after birth Airbus shuts plant under the brand Lopimune) Chinese doctors said they saw rial to make about 10-12 mil- be hindered by short-term difficulties. We should not | WHO issues appeal for $675 million | Three foreign nationals among 2,528 under has protease inhibitors that positive response in patients lion tablets of Lopimune. It suspend but expand the economic and trade coopera- to fight novel coronavirus observation in Kerala are designed to block HIV viral (in Beijing) who were admin- makes these drugs at multiple tion between the two countries,” he said. replication. It is being consid- istered a drug cocktail com- sites in India, and sells it at a | Bill & Melinda Gates Foundation pledge to | 46 under watch in Gujarat ered a line of treatment for the prising the anti-HIV combina- price of ~2,000 for 60 tablets. No sign of a slowdown commit up to $100 million for the global | Delhi govt sets up 24x7 control room for any The death toll from the monthlong coronavirus out- response to the epidemic query related to virus break has continued to climb in China, rising to 490. | Coronavirus vaccine hopes guide British | Tamil Nadu procures 5,000 additional New cases have surged by double-digit percentages in stocks higher —FTSE 100 up 0.6%, personal protection equipment for Surat diamond industry the past 11 days. More people have now died in this epi- FTSE 250 up 0.4% demic than in the SARS outbreak of 2002-3 in mainland healthworkers, says state health China. During that outbreak, 349 people died in the | Central Hubei province reported 3,156 new secretary Beela Rajesh mainland. infections, its biggest single-day jump | 104 kept at Indo-Tibetan Border stares at ~8,000-cr loss The new figures from China’s Health Commission during the outbreak Police facility test negative on Wednesday showed that 65 people died on Tuesday The Surat diamond industry is es are seeing a dip in view of month-long vacation. Gujarati and that 3,887 more people had been infected. So far, likely to face a loss of around the outbreak of the novel coro- traders having offices there are 24,324 people are known to have been infected. Health with China on the outbreak, while cruise ships get new the virus after everyone on board underwent an initial ~8,000 crore in next two navirus. coming back to India," he said. experts say the death toll is likely to rise because of the scrutiny after infections are found on two. health screening. Twenty-one people were cleared, months as Hong Kong, which is According to Gems and If the situation does not large number of infections. and officials were awaiting the other results. a major export destination, has Jewellery Export Promotion improve, it will have a huge Cruise ships in Japan and Hong Kong declared a state of emergency Council (GJEPC) regional chair- impact on the Surat diamond More American evacuees arrived in California, being scrutinised after infections Hong Kong imposes 14-day quarantine due to the coronavirus outbreak man Dinesh Navadiya, polished industry, which polishes 99 per and were quarantined Nine passengers and one crew member on a cruise Hong Kong said that it will begin requiring people who in China, say experts. diamonds worth around cent of all rough diamonds Hundreds of Americans who had been in Wuhan as the ship quarantined in Yokohama, Japan, have tested arrive from mainland China to undergo a mandatory Hong Kong is a major busi- ~50,000 crore are exported from imported in the country, he outbreak worsened arrived in California on Wednesday positive for the coronavirus, the cruise line, Princess 14-day quarantine, as it tries to reduce the potential for ness hub for the Surat dia- Surat to Hong Kong every year. said. “The Surat diamond on two evacuation flights arranged by the United States Cruises, said on Wednesday. The ship, carrying 2,666 imported cases of the coronavirus. mond industry, but schools "That's around 37 per cent industry is staring at a loss of government. It was a second wave of American evacu- passengers and 1,045 crew members, arrived in ©2020 The New York Times News Service and colleges have been closed of the total exports from here. around ~8,000 crore for ations; an earlier flight arrived last week. Yokohama on Tuesday, but the authorities did not there till the first week of Now, due to coronavirus scare, February and March,” he US President Donald Trump has pledged to work allow anyone off. In all, 273 passengers were tested for With inputs from agencies March and even the business- Hong Kong has declared a added. PTI

> FROM PAGE 1 N DEFEXPO 2020 N ‘Father believed three Modi targets $5 bn of defence exports in 5 yrs engines can never run a AJAI SHUKLA and manufacturing processes.” Bengaluru in February 2015. New Delhi, 5 February “HOW LONG Modi also dwelt on one of his There he had noted that a CAN THE pet themes: Innovation. Citing 20-25 per cent reduction in company successfully’ Inaugurating the 11th Defence advanced technologies such as defence imports could create Exposition (DefExpo 2020) in WORLD’S Internet of Things, and Big Data additional 100,000-120,000 The reason why I put my Lucknow on Wednesday, Prime SECOND-LARGEST analysis, the PM pointed to the highly skilled jobs in India. He weight behind sale is because Minister (PM) Narendra Modi POPULATION, Innovations for Defence noted that raising domestic pro- I don’t believe that any of the called on international defence SECOND-LARGEST Excellence (iDEX) scheme, float- curement over the next five members of the trust has the manufacturers to “Make in MILITARY, AND ed by his government. years from 40 per cent to 70 per ability, vision or ambition to India, for India and for the LARGEST DEMOCRACY “To flesh out and scale up cent of overall procurement continue. world”. In his 35-minute inau- the iDEX scheme, we have set an would double India’s defence gural speech, Modi listed out a REMAIN RELIANT ON aim of creating 200 new defence industry output. However, that Why did your father say string of defence production IMPORTING ALL start-ups. It is our endeavour target has not come close to three engines when the trust sector reforms his government ITS WEAPONRY?” that this would lead to the cre- being realised. has four members? had put in place since 2014, NARENDRA MODI ation of 50 new technologies In 2015, Modi had also enun- He did not consider his wife as which he said had set the stage Prime Minister Narendra Modi during the inauguration of the Prime Minister and products,” he said. ciated a clear aim for offsets: “To an option, maybe. Maybe only for making India a major global 11th edition of DefExpo 2020 in Lucknow PHOTO: PTI Setting a new target that all acquire state-of-the-art tech- ‘he’ (Lalit) was expected to be “defence manufacturing hub”. this innovation would fuel, Modi nology and skills in core areas of the engine. “How long can the world’s picked up due to measures tak- facture.” He pointed to the Lucknow: “If you’re trying to said: “We aim to have 15,000 priority”. That did not happen, second-largest population, sec- en by his government. “In 2014, investment in Korwa, near attract investment into your micro, small and medium enter- and offsets are flagging today. Don’t you think the trust ond-largest military, and largest defence exports were ~2,000 Amethi, where Kalashnikov had country, I think having FDI caps prises in the defence sector with- In 2015, the PM had also deed has not taken care of democracy remain reliant on crore. Now we have exported set up a joint venture with the limits that degree of flexibility.” in the next five years.” raised hopes by calling for a spe- the interests of minority value for shareholders is importing all its weaponry?” he ~17,000 crore worth of defence Ordnance Factory Board, India- Modi also claimed the pro- Modi suggested that indus- cial financing system for the shareholders, as it was not important. Our value is not wondered aloud. equipment. In the next five Russia Rifles, to manufacture cedure for issuing defence pro- try bodies like Confederation of defence industry, where “capital disclosed to them? based on just products, but “Terming the opportunity to years, we must ensure defence AK-203 rifles in India. duction licences to private firms Indian Industry and Federation investments are large and the I have been pushing the trust, also our market reach in the participate in the Indian defence exports cross ~5 billion, or However, most foreign had been eased greatly, stating of Indian Chambers of risks are high”. However, high and it’s indeed the duty of the hinterland of India, which we manufacturing ecosystem “an ~35,000 crore,” said Modi. defence firms regard a 49 per that the overall number of Commerce and Industry, which finance costs continue to hobble company to disclose this as it have serviced for three unparalleled opportunity for the Pointing out that his govern- cent FDI cap unattractive for licences issued had doubled in currently have their own private defence industry. is appropriate. Remember, I decades. world”, Modi stated: “When the ment had liberalised foreign investment, since that does not the last five years to 405. defence sub-committees, Uttar Pradesh (UP) Chief am not on the board. My son On the question of Phillip world talks about the 21st cen- direct investment (FDI) into provide control over the tech- The PM said: “Appointing a should work in coordination. Minister Yogi Adityanath, who Ruchir who is on the GPI Morris — on the compliances tury, attention naturally turns defence, Modi stated: “In the last nologies they bring into India. Chief of Defence Staff and set- Modi’s ambitious target set- also attended the inauguration, board has also told the com- as well as the statutory regu- to India.” The PM claimed the five years, ~1,700 crore in FDI On Tuesday, US envoy to India, ting up a Department of Military ting at DefExpo 2020 mirrored spelt out a target of ~50,000 pany to disclose this. He even lations — we and our legal defence economy had already has flowed into defence manu- Kenneth Juster stated in Affairs has eased the purchase his speech at Aero India 2015 in crore investment in UP. apprised me of this and his team will work within the apprehensions about non- framework of what is appro- disclosure. priate and comply with the laws which are applicable. We MoD procurement chief talks up cooperation with Israel Considering the ban on FDI believe that Phillip Morris, as in tobacco and the shareholders and AJAI SHUKLA has entered into with Israel were upgraded India’s MiG-21 fight- “The proposed VTOL UAVs government policy partners, will also like Lucknow, 5 February concluded on time. The overall ers; ship-borne missiles and T-72 have a tremendous potential to discourage a new to see fair valuation, experience with Israel has been tanks. Having accumulated this in carrying out maritime mili- player in this space, as it would also stand In an unusual endorsement that ‘highly satisfying’, he stated. experience at India’s cost, Israeli tary missions with higher effi- do you see potential to benefit if a suitable illustrates Israel’s value as India’s Chandra listed out firms can theoretically upgrade ciency compared to a manned of any player to buy GPI? big investor, global or third-largest defence supplier unmanned aerial vehicles some 30,000 T-72 tanks in serv- helicopter. Deploying a VTOL Also, Phillip Morris (having local, was to step in. after Russia and the US, the (UAVs), border management, ice worldwide. UAV will bring down the huge 25.1 per cent shares) can Ministry of Defence’s (MoD’s) after-sales support, and Similarly, Israeli industry costs associated with induct- always block a special What about Indofil weapons procurement chief, maintenance and repair of worked with Russian equip- ing operating and maintaining resolution for sale of the Industries? Apurva Chandra, publicly stated equipment as the new focus ment to build India’s Phalcon manned helicopters on the company. Do you have an Indofil has a strong domestic that Israel is the key contributor areas of India-Israel defence airborne warning and control (ship’s) deck,” HAL stated after NOC from Phillip Morris? base and a well-recognised to India’s readiness to face mili- cooperation. system — an airborne radar the signing. The global company has international presence. It will tary challenges. Since Israel does not build mounted on a Russian IL-76 air- Deploying VTOL UAVs for diluted its stake in the com- fetch a high price as we are Chandra, who holds the post and sell major defence plat- craft. India paid about $1.1 bil- Army personnel during the Defence Expo 2020 in Lucknow routine surveillance missions pany after attempts to take a top global player in the busi- of director general (acquisitions) forms such as aircraft or ships, lion to Israel Aerospace PHOTO: PTI in unsafe areas would also ben- majority stake did not work ness. Many investors have in the MoD, also acknowledged its high-tech defence companies Industries and Elta for this. efit the armed forces by avoid- out. Sometimes there is a ten- shown interest in it. that Israel has been always forth- — many of them privately In recent years, Israeli tures with Indian defence com- opment of a UAV. ing casualties and increasing dency to look at our compa- coming in sharing high-end mil- owned — focus on the lucrative defence firms have entered into panies to provide an indigenous HAL and Elbit are assessing endurance. In the absence of a nies, as if there was just one – Will the asset sale include itary technologies with India. Indian market for upgrading co-development projects with screen for what remains heavily the possibility to jointly devel- VTOL UAV, manned helicop- only a tobacco company. We IPM India Wholesale He was speaking at a semi- India’s predominantly Russian India’s Defence Research and Israeli equipment. oping, manufacturing, and ters would be needed for such are also a gigantic distribu- Trading Pvt Ltd, a JV nar on India-Israel defence platforms. Israel retrofitted its Development Organisation to Underlining the continuing maintaining a vertical take-off missions, both during day and tion systems company with between Phillip Morris, GPI cooperation at DefExpo 2020 in cutting-edge avionics into the build advanced systems such as belief on India-Israel coopera- and landing (VTOL) helicop- night. multiple touch points and and K K Modi investment Lucknow on Wednesday. Russian Sukhoi-30 fighter, the eponymous long range sur- tion, Hindustan Aeronautics ter-style UAV that can operate HAL and Elbit signed a sec- multiple consumers across company which is involved Chandra hoped that India’s enhancing its capabilities and face-to-air missile that protects (HAL) and Israeli firm, Elbit on land and at sea. They intend ond MoU on Wednesday to the country. The logistics and in wholesale trading of defence partnership with Israel configuring it into the purpose- Indian warships. Systems, signed a memoran- to address the entire global cooperate in promoting and marketing capability is also Marlboro cigarettes? would continue to grow, stating designed Sukhoi Su-30MKI. And Israeli firms are increas- dum of understanding (MoU) market with this 2,000-kilo marketing digital head-up dis- valuable and unlocking its Yes, it will. that all the contracts the MoD Over the years, Israel has ingly entering into joint ven- on Wednesday for joint devel- class rotary wing UAV. plays to global customers. 10 ISSUES AND INSIGHTS MUMBAI | THURSDAY, 6 FEBRUARY 2020 >

> are being synergised for that," Whether it’s about the new CHINESE WHISPERS she said. economy or agriculture, aspira- Top-down Budget While tourism has always tional districts or electronic been close to the PM’s heart, he manufacturing, in essence it’s ed in the Budget presented last once again sought ideas from the PM’s Budget, even as the Double talk or honest mistake? A whole host of Budget announcements has a distinct week. Referring to the prime bureaucrats in the past couple general narrative has been that Take a look at the minister’s call for quality, the of months to make it a vibrant it was possibly drafted by the Congress imprint of the Prime Minister FM said she had asked for sector. The latest Budget Prime Minister’s Office. manifesto. It says Narendra Modi had, in a meet- ter, who batted for textile man- mandatory technical standards speech that ran close to three Now that the Budget is done, if voted to power ing with the council of ministers ufacturing parks and textile and their effective hours, however, has only six the government is believed to be in Delhi in the and secretaries, discussed the machinery manufacturing enforcement. "All ministries, paragraphs on culture and preparing for the next big show. upcoming polls, relevance of quantum comput- parks in one of the meetings during the course of this year, tourism. An official pointed out No, not the next Budget in it would spend ing, artificial intelligence, inter- close to the Budget. would be issuing quality stan- that the PM perhaps didn’t February 2021, but big-ticket 25 per cent of net of things, drones and data In the speech, Sitharaman dard orders." want a tourism overkill in the announcements on key eco- the city parks in relation to technologi- said, "India imports a significant Staying with the Budget at a time nomic issues over the next cou- government’s cal innovation. That idea from quantity of technical textiles export theme, the Referring to the when economic ple of months. The thinking is Budget (each the top found its way into the worth $16 billion every year." To Budget announced a prime minister’s slowdown has that the Budget is not the only year) on fighting Budget. reverse the trend and put India new scheme — call for quality, the already hit the sec- economic event for the country. pollution and improving transport. Its That’s not the only proposal on the global map in technical NIRVIK — to pro- FM said she had tor hard. In her It’s better to have a series of campaign advertisement puts the figure in Finance Minister Nirmala textiles, the finance minister vide for higher asked for speech, the FM announcements throughout the at 20 per cent. Not just that. There are a NOT FOR PROFIT Sitharaman’s Budget that had announced the textiles mission. insurance cover, mandatory asked the state gov- year. Several big announce- host of other points in which the two an imprint of the prime minis- Promoting exports has been reduction in premi- technical standards ernments to devel- ments were made before the differ. The manifesto says the party will NIVEDITA MOOKERJI ter, according to people who’ve a core subject in the prime min- um for small and their effective op a road map for Budget as well to tackle the over- ensure each family, including tenants attended some of the meetings ister’s interactions with minis- exporters and sim- enforcement certain destinations all demand slowdown and and owners in JJ clusters, get a flat of 350 in December-January. In fact, ters and bureaucrats. He has plified procedure for and also formulate financial stress in some difficult sq feet at the same place. In the his might be first time three Ts — technology, trade been pressing for claim settlements. Sitharaman’s financial plans after which sectors. hoardings and other advertising that the Union Budget and tourism — have been the regular meetings with top state speech, which acknowledges grants would be given. The buzz is that the next collateral, the party promises 269 sq feet Tspeech mentioned quan- focus of deliberations in many representatives to identify a list the PM’s vision and goals several Almost the entire Part A of round of big bang announce- flats. The manifesto promises 15,000 tum computing and also pro- of these meetings. of products from across the times, speaks of it in relation to the Budget speech dealing with ments will be about employ- electric buses, but in the ads the figure posed an outlay of ~8,000 crore Among others, the proposal country with export potential exports as well. macro themes, and which took ment creation and skill develop- reads 10,000. On clearing loans of those spread over five years for a on a National Technical Textiles and to execute the plan so that "It is the vision of the PM that up more than half the time, is ment, while the country aims to plying three-wheelers and e-rickshaws, national tech centre focused on Mission at an outlay of ~1,480 quality issues, often raised by each district should develop as sprinkled with PM’s ideas and reach the 25th rank in World the party's ad says it would write off the area. It appears that ahead crore might also have been a other countries, can also be an export hub. Efforts of the vision, those reading the fine Bank’s Ease of Doing Business such loans if voted to power; the of the Budget, Prime Minister brainchild of the prime minis- addressed. That too was reflect- Centre and state governments print point out. by 2025, from 63rd now. manifesto talks about a one-time subsidy to the owners of such vehicles. The manifesto talks about filling language teachers’ vacancies in government schools within 100 days; the advertisement does promise to clear the backlog of 11,000 teachers, including Early warning signals on tax revenue language teachers, but doesn't give a time frame. Is the party serious in its bid Or why the government’s target for 2019-20 may have to be revised downwards a second time fall is to repeat the performance of 2014- for the state? 15. But that performance was achieved A K BHATTACHARYA only once in the last five years. LONG JUMP Any further shortfall in tax revenue Akhilesh clutches at straws he Union Budget for 2020-21 has collections will have an adverse impact Samajwadi Party (SP) president Akhilesh been criticised for presenting tax Why tax revenue estimates can go awry on the revenue targets for 2020-21, when Yadav would never let go of an T revenue numbers that are not Gross tax Gross tax Net tax Net tax the net tax collections are expected to opportunity to take a swipe at the ruling realistic. How justified are these revenue revenue revenue revenue grow to ~16.36 trillion. As shown earlier, Bharatiya Janata Party (BJP). Now with charges? Are there any early warning (full year) in April-Dec (full year) in April-Dec Nominal GDP growth in % if in the last quarter of the current year, campaigning in Delhi hitting a signals from the government’s official net tax collections maintain the same crescendo, the former Uttar Pradesh figures to suggest that the government 2014-15 12.45 7.96 (64) 9.04 5.46 (60) 11.0 pace as Q4 of 2017-18 or 2018-19, total chief minister has attacked BJP leaders may not achieve those revenue targets? 2015-16 14.56 9.63 (66) 9.44 6.22 (66) 10.5 collections in 2019-20 would be only over their alleged inflammatory and Let us begin with the Centre’s net ~13.26-13.41 trillion. inappropriate statements during tax revenue numbers, which account 2016-17 17.16 11.39 (66) 11.01 7.52 (68) 11.8 As a consequence, the net tax rev- interactions. Yadav, who is known for for more than half of the government’s 2017-18 19.19 13.37 (70) 12.42 9.00 (72) 11.1 enue collections growth target for 2020- his strident criticism of Uttar Pradesh overall receipts and impinge on its abil- 21 would go up to 22-23 per cent, com- Chief Minister Yogi Adityanath, said the ity to keep the fiscal deficit at the 2018-19 20.8 14.24 (68) 13.17 9.36 (71) 11.0 pared to the nine per cent growth BJP leaders were giving such statements revised target of 3.8 per cent of gross 2019-20 21.63 13.83 (64) 15.04 9.05 (60) 7.75 assumed now. Imagine the plight of the "in desperation" because the party was domestic product or GDP. For the cur- tax department, if that were to happen! fast losing its support base in Delhi. rent year (2019-20), the Budget has All figures in ~trillion, except those in brackets, which are per cent of total revenue collected in full year; Taken together with the 223 per cent While the SP has no stake in the Nominal GDP growth in per cent; 2019-20 full-year figures are Revised Estimates; 2019-20 April-Dec figures are already slashed the net tax revenue fig- Provisional Actuals; for all other years, full-year figures are Actuals and April-Dec figures are Provisional Actuals rise in disinvestment revenues project- upcoming Delhi polls, any electoral ures by ~1.45 trillion in its Revised Source: Budget documents, Controller General of Accounts and CSO ed for next year, the Budget assump- reverses for the BJP in the national Estimate to ~15.04 trillion, down from tions for 2020-21 will become even capital, which has a sizeable working ~16.49 trillion given in July 2019 in the more challenging. class population from UP, would be a Budget Estimate. total net tax revenues that will have to cent of the full year’s actual net tax rev- growth rate was about 11 per cent. This problem with the government’s morale booster for the party that has This nine per cent reduction has be collected, according to the Revised enue collections. This meant that just In 2017-18, only about 28 per cent of tax revenue estimates is not new. But it suffered serious erosion of its appeal in already raised questions about the gov- Estimate put out in the Budget on 29 per cent of the full year’s actual net the full-year actual net tax collections got worse when the interim Budget was its home state in recent years. ernment’s ability to project revenue February 1. tax revenues were collected in the last were achieved in the last quarter. In the presented in February 2019. At that time, numbers realistically, In other words, another 40 quarter of the year. previous two years, that performance the target set in the revised estimate was keeping in mind the state per cent, or about ~6 trillion, Raising that target rate to 40 per cent was somewhat better at 32 per cent in significantly higher than what the tax The long and short of it of the economy and the has to be collected in the this year would be quite a task. The 2016-17 and 34 per cent in 2015-16, but department could reasonably hope to When Finance Minister Nirmala tax department’s efficien- remaining three months of the nominal growth in the GDP in 2018-19 nowhere close to 40 per cent as required meet. The actual net tax collection fig- Sitharaman began her address at FICCI's cy in collecting the taxes fiscal year. This is about dou- was 11 per cent, boosting buoyancy in in the current year (see table). ures for 2018-19, released a year later, post-Budget industry interaction, she that it had promised at the ble the average monthly rate tax collections. But in 2019-20 the nom- Assume, for instance, that the net show that instead of the promised ~14.84 said she was not keen on giving a long start of the year. But the of collections achieved in the inal growth rate is just 7.75 per cent. So, tax collections in the last quarter of the trillion, they were actually 11 per cent speech. She had already delivered the more worrying question first nine months of the year. what will the tax department do to current year do as well as they did in lower at ~13.17 trillion. longest Budget speech and would be is: Do these already TAKE Government officials achieve this goal? the same period of 2018-19 or 2017-18. To be sure, the revised estimate on more interested in taking the industry’s reduced numbers have to have stated that these num- Indeed, only once in the last five Net tax collections for the Centre in net tax collections presented for 2019-20 feedback, she added. Having said that, undergo another down- TWO bers are achievable and the years have the Centre’s net tax collec- January-March 2020 would range was relatively closer to the reality. The she took about 15 minutes to go through ward revision? ANALYSIS BEHIND last three months of the tions in the last quarter of the year been between ~4.2 trillion and ~4.4 trillion. government had scaled down the Budget her opening address. At the end of it, The provisional unau- THE HEADLINES financial year have in the as high as 40 per cent of the full-year Thus, the full-year net tax collections estimate for net tax collections of ~16.49 Sitharaman said, “Though I had said in dited numbers for net tax past seen a smart rise in col- collections. That was in 2014-15. That during 2019-20 will come to about ~13.3 trillion by nine per cent to ~5.04 trillion the beginning that I am not going to do a revenues collected from April 2019 to lections to justify such optimism. Are was the year when the government trillion or ~13.4 trillion. in the Revised Estimate for the current long one, it’s always a temptation to the end of December 2019, or about nine these assumptions correct? benefitted from higher duties on This will mean a further tax revenue year. The embarrassing issue that the speak as I have been trained as a months of 2019-20, show that the Consider what happened in 2018-19. petroleum products, following a drop shortfall ranging between ~1.6 trillion government faces now is whether a fur- spokesperson as well.” The guests burst Centre’s net tax revenues are only ~9.05 The government collected ~9.36 trillion in international crude oil prices. In and ~1.8 trillion. The only way the tax ther downward revision in the same into peals of laughter. trillion. This is about 60 per cent of the in April-December 2018, or about 71 per addition, the nominal economic department can avoid any further short- number will be needed by next year.

INSIGHT > LETTERS

Being a large country implement- The great expectations challenge Ease of paying tax ing this on a national scale will involve logistical problems, but with Instead of grand visions and big announcements, the Budget should have The changes proposed in Budget to the today’s technology that can be personal income tax system — simpli- resolved. Many retailers do not issue focused on managing expectations around the current economic cycle fied for incomes up to Rs 15 lakh per receipts and it is the government that annum, the taxpayer’s charter, the suffers in terms of loss of revenue. the reasons, expectations were height- tor-led growth where government would reduced interface with tax bureaucracy The finance minister and the finance ened because stakeholders expected the only play a supporting role in creating a — indicate a welcome move towards panel should look into implementing government to respond radically. And conducive environment through struc- easier compliance that could widen the such schemes for credit-debit card on that metric, the Budget fell short. tural reforms which will continue to hap- tax net. Taxpayers with an annual users as well as to usher in the long- Realistically, the only radical res po - pen off Budget. income of Rs 5 lakh to Rs 15 lakh will term goal of transitioning into a cash- nse that the government could have That may not have squared well with now have an option of paying taxes at less economy. chosen was to loosen the purse strings the government’s political intent to focus a lower rate provided they forgo assort- H N Ramakrishna Bengaluru in a strong counter-cyclical fiscal policy. on welfare. It could have. The FM alluded ed exemptions. The government’s The fact that it deviated from its fiscal to former PM Rajiv Gandhi’s famous ad - intention could be to move taxpayers Abuse of child rights deficit target of 3.3 per cent of GDP (for mission of leakages in government spe- to a low-tax regime with few exemp- violation of child rights. If the courts DHIRAJ NAYYAR 2019-20) by 0.5 per cent is not an indi- nding. The Modi government has seri- tions, which explains the nudge — Police interrogation of children as do not intervene and protect children cator of a fiscal stimulus but a stretch. ously reformed delivery systems so an doing away with 70 of the 120 exemp- young as nine in a school in from police high-handedness, who else Shortfalls in revenues, taxes and non- emphasis could have been laid on get- tion categories that income tax payers Karnataka’s Bidar district in connec- will? It is some consolation that the here is a lot that needs to be fixed tax receipts, like disinvestment, in the ting more bang for the buck. The FM can currently use to lower their tax lia- tion with a play enacted to denounce State Child Rights Commission has in Indian economy. Nirmala Si tha - midst of slow growth meant that the could have also been forthcoming on the bility. I think that the ease of paying the Citizenship (Amendment) Act con- sought an explanation from the police. Traman’s second Budget spee ch government had no choice but to let the inability of certain government depart- taxes is an important consideration in stitutes a flagrant abuse of child rights. The courts have ruled time and was never going to provide a solution to deficit grow by a quantum permitted by ments and agencies to spend their Bud - determining ease of living and doing It is an act of inhumanity a civilised again that a speech or action intended all problems. In fact, some of the most the FRBM Act. If off-Budget borrowings get allocations. When fiscal space is ti- business. The measures mark an effort society cannot countenance in any cir- to influence the government to change pressing structural reforms relate to the are taken into ac c ount, the deficit is ght, the allocations to such departments in this direction. Nobel prize-winning cumstance. Interrogating children a policy or law does not amount to sedi- factor markets — amending land acqui- even higher. So, a real fiscal stimulus could have been cut while rewarding economist Richard Thaler would intimidates them and may cause them tion. A country that cherishes democ- sition laws, changing labour codes and would have required the government to those which spend efficiently. In other approve — if you want people to do irreversible psychological damage. The racy cannot let the ruling dispensation re booting the banking system. The first let the on-Budget fiscal deficit grow to words, the overall expenditure, even if something, make it easy, he said. police tried to justify that on the scare children and slap sedition two are clearly off Budget. The third has around 5 per cent of GDP. only nominally increased could have Tarique Anwar Bengaluru ground that they need to collect evi- charges on adults on flimsy grounds. been addressed through recapitalisation There are good reasons for the gov- been deconstructed. dence against parents and teachers. G David Milton Tamil Nadu but the key to reform is more structural, ernment not to have chosen that path. On the revenue side, the FM could Lottery strategy The BJP government is so intoler- requiring ei ther divestment or genuine Ad ditional government spending and have made out a case for no changes giv- ant to criticism that it does not even autonomy, neither of which can be dealt therefore more borrowing would only en the fiscal situation. A complicated This refers to the report “Govt likely spare children. The Bidar incident Letters can be mailed, faxed or e-mailed to: The Editor, Business Standard with in the Budget. put upward pressure on interest rates opt-in system through which an individ- to introduce lottery system to boost shows that the government would go Nehru House, 4 Bahadur Shah Zafar Marg The 16-point plan for agriculture whi- and crowd out the private sector from ual could potentially get a small tax con- GST compliance soon” (February 5). to any length to stifle dissent. It is par- New Delhi 110 002 ch took considerable time and space also accessing resources. The direct contri- cession did not seem worth the effort. One ingenious way of ensuring tax ticularly worrying that the Karnataka Fax: (011) 23720201 · E-mail: [email protected] belongs off Budget as the key to it is stru - bution of government spending to Indi - Instead, she could have laid down a path- compliance is to follow the example High Court and the Supreme Court All letters must have a postal address and telephone ctural market reform. There are other a’s GDP is only around 12 per cent where- way over the next five years in which per- of countries that have thought outside have turned a blind eye to the gross number matters the Budget must deal with, most as private investment is 30 per cent (but sonal income tax rates would be ratio- the box. They have turned sales obviously those that relate to governme - ought to be more than 35 per cent). It is nalised as growth recovers. receipts issued by retailers into lottery > HAMBONE nt expenditure and revenue. As these also well known that private investment In the end, a do-little Budget was per- tickets and seen a phenomenal jump have implications beyond just balancing is more efficient than government spe- haps the best option for the FM. If only in tax collection. Consumers will the books, the Budget cannot also be nding. So the government’s commitme- her Budget speech was structured to ex- insist on receipts as there is a chance seen merely as an accounting exercise. nt to maintain a semblance of fiscal re- plicitly note the economic context and to win. But the government will have The Budget for 2020-21 was presented straint may be good for revival in the detail the government’s strategy. For- to ensure protection from counterfeit- in a scenario of stalling economic gro- medium term. tunately, the economic cycle is not coin- ing of sales receipts. In the last 10 wth, the lowest in a decade. There are The FM should have tied in this logic ciding with the political cycle. The gov- years, countries like China, the Czech many reasons for this slowdown, some with her exhortation of wealth creators ernment has over four years left. Republic, Lithuania, Portugal, external, some internal, some cyclical, and wealth creation. She could have ar - Romania and Slovakia have done this. some structural, some legacy. Whatever ti culated a clear vision for private sec- The author is chief economist, Vedanta This will ensure retail businesses can- not circumvent taxes. OPINION 11 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIV Number 124 ILLUSTRATION: BINAY SINHA MUMBAI | THURSDAY, 6 FEBRUARY 2020

Stay the course Laws”, and “Old But Not Gold” (links below).2 Another by Vagda Galhotra rounds out the set: FC’s final report should mirror the interim award “Why We Need To Repeal More Criminal Laws”.3

n Saturday, Finance Minister Nirmala Sitharaman tabled the first Too much government litigation report of the Fifteenth Finance Commission in Parliament for the Government litigation expenditure increased three- financial year 2020-21 alongside her presentation of the Union fold from 2016 to 2018, with government being a Budget. The Finance Commission’s terms of reference had become party to around 46 per cent of lawsuits in July 2018, O despite its stated intent of reducing litigation. Quite something of a controversy, given that they departed in several important criteria from previous iterations. Among the states’ concerns were that the apart from this, government litigation and some of Commission was told to stop using population weights from the 1971 Census, the disruptive rulings have created chaotic conditions in the economy, such as in coal mines and spectrum and instead use more recent relative population numbers — which significantly after the 2G licence cancellations. This has had a disadvantages those states in the south that have done better on family planning. chilling effect on policies facilitating resource use, It was also suggested that funds for defence and internal security be put into a whether it is coal for electricity, or spectrum for con- separate fund from the divisible pool of taxes, and that “populist” policies be nectivity at a time when there is global advancement disincentivised for the states. in high-speed wireless shared use. The most recent Given these constraints, the Finance Commission’s interim report charts shock to India’s economy was the Supreme Court’s a middle path between the demands of the states and the Union government. Why India functions reversal of previous rulings on telecom companies’ adjusted gross revenues. Other disruptive claims, Although it no longer uses the 1971 Census numbers, it has tweaked the formula without going into the merits, have been the retroac- by which taxes are divided among states in a manner designed to partially tive tax case against Vodafone, the Tamil Nadu gov- compensate for this change. For example, the population weight has been ernment’s tax claim against Nissan, and the earlier decreased to 15 per cent from 17.5 per cent, and the weighting given to demo- the way it does dunning of Nokia. graphic performance has been hiked from 10 per cent to 12.5 per cent. The In 1998, there were an estimated 25 million cases weighting given to relative income has also been decreased by five percentage Ever wondered who gains from the way we work? pending in various courts, each taking up to 20 years points. However, the southern states of Tamil Nadu, Telangana, Karnataka and for resolution, and this increased between 2006 and Kerala will still see their relative share in the states’ tax haul decrease. Though April 2018 by over 8 per cent. Much of government t’s not obvious why we function the way we do in and political pressures has left the serious institu- litigation apparently comprises appeals against lower the Finance Commission has recommended a special grant to some states to India, and who gains from it — considering that tional constraints of our legal system somewhat court judgments, with decisions to appeal taken at overcome this sharp decrease, the Union government has frowned upon this Iwe are able to go just about anywhere in the world unattended. There are several dimensions of the lowest levels of government, whereas decisions grant. The Kerala finance minister tweeted that the Union Budget slashed the and thrive, but unable to manage too well on our own reforms needed in the legal system. One of these to not appeal have to be at the top. revenue deficit grant recommended by the Commission from ~74,000 crore to shores. Could it be because of the operating conditions pertains to aspects of law and changes to them, There are many areas we have to work on to ~30,000 crore. This will no doubt become a serious issue going forward, and here apart from the facilities, the prevailing systems another to the judicial system and its dilatory move from our present level to being able to grow there is little justification for this move on the part of the Union. The Union and procedures in our environs, and the organisation, responses. There is also a third aspect, of approach at a sustainable high rate for any length of time. finance ministry should seek to implement the Commission’s recommendations structure, and processes? When we go elsewhere, and motivation, i.e., of a systemic perspective and Beginning from early school, with systems think- in the right spirit, especially since transfers to states in the ongoing fiscal year those places have their own systems and procedures, philosophy, which can be minimalist or the oppo- ing for every child, process discipline and stan- and it appears we are able to adapt and function well. site, or something in between. dards, and collaboration and teamwork in lesson have been lower by more than ~1.5 trillion and there is an ongoing dispute In India, our constraints of systems and procedures plans and play, continuing into work life and poli- about the status of the goods and services tax compensation. in our environs include the full range Too many laws ty. Equally, there is a real need for establishing The most important aspect of the Commission’s award, however, is the of our population, just as elsewhere. A major encumbrance is the pletho- sound institutions. Included in these is a func- states’ total share of taxes, which was fixed at 42 per cent by the Fourteenth The sheer number of people with var- ra of laws. In December 1993, the tioning, efficient set of laws and justice system. Finance Commission and has only been reduced by 1 percentage point by ied levels of education, competencies, Ministry of Finance undertook a The discipline and efficient enforcement of con- the Fifteenth Finance Commission on account of the reorganisation of Jammu process orientation, and expectations project with the United Nations tracts, payment terms, and delivery standards to and Kashmir. This should not be tinkered with further in the final report of is something that those who go away Development Programme on eco- ensure smooth cash flows is critical for markets the Commission. to other environments are not con- nomic and commercial legislation, to function well. This is why reforms on systematic strained by. to make it more market friendly. rationalisation of the laws and justice delivery are It is correct that the Union government is in a difficult fiscal situation, but There are other easily recognis- Called Project LARGE (Legal essential, although such activities do not lend shifting the burden to states will not solve the problem. There is a need for able elements of constraints. There Adjustments and Reforms for themselves to hoopla and staging events with pop- bringing in more efficiency in fiscal management. The Finance Commission is are the post-colonial institutions, Globalizing the Economy), the first ular appeal. The talent and experience available- a constitutional body which must consider the long-term importance of Indian structures and methods that have phase from December 1993 until can contribute significantly to systems and federalism, not the short-term fiscal concerns of the government of the day. Its been retained in government without SHYAM PONAPPA December 1997 dealt with central organisation in the public interest. The constitu- final report should reflect that high duty as much as the interim report. modification for a self-governing, government legislation comprising tion of the 22nd Law Commission is long overdue, democratic society. Another set con- about 450 of around 3,000 central with the 21st Law Commission having ended in sists of the underpinnings of a feudal structure that acts. The second phase was on state legislation con- August 2018. manifests strongly in political processes. The predom- centrating on government orders, rules and regula- Long on ideas inant motivation of both is, to put it crudely, exploita- tions relating to land and labour, and other matters [email protected] tion for the governing entity’s gain. Historically, the such as dispute resolution and competition policy. 1:https://darpg.gov.in/sites/default/files/Review_Administr Budget falls short on farm reforms execution gain has been for imperial/colonial/exploitative ends, While the material is in the public domain, in ative_laws_Vol_1.pdf and after the first, largely well-intentioned post- practice, it is a bear to find it. For those who want https://darpg.gov.in/sites/default/files/Review_Administrat he 16-pronged action plan mooted in the Union Budget 2020-21 to Independence phase, appears to be focused on per- to track it, the reports were published in September ive_laws_Vol_2.pdf spur growth in agriculture and allied fields and bolster farmers’ petuating the power of incumbents, or the position of 1998 as the “Report of the Commission on Review of 2: https://www.india- income is a pack of small, but fairly significant, measures aimed at those controlling government (barring exceptions). Administrative Laws”, Volumes I and II.1 Three seminar.com/2001/497/497%20bibek%20debroy.htm meeting the needs of stakeholders in this sector. But the way these The fact of governing entities being locally elected articles by the Director of Project Large Bibek https://indianexpress.com/article/opinion/columns/old- T but-not-gold/ proposals are sought to be implemented — through state governments or does not appear to make any difference. The essential Debroy sum up the process, including the later with public-private participation (PPP) — makes their outcome dicey. The attribute is of otherness, of “us” (those in power) versus work of the Ramanujam Committee and successive https://www.businesstoday.in/magazine/cover- states’ track record in carrying out Central sector schemes is quite uninspiring. “them” (those governed). Law Commissions. They are epitomised by his story/justice-for-all-need-better-fewer- quotation of Tacitus: The more the corruption, the laws/story/227497.html The PPP is also a, by and large, failed model of development. The funding The laws and the justice system more the laws. The articles are:“Why We Need 3: https://thewire.in/law/why-we-need-to-repeal-more- arrangement for the envisaged activities, too, seems problematic. The allocated Latterly, our preoccupation with economic, social, Law Reform”, “Justice For All: Need Better, Fewer criminal-laws funds are not only inadequate but also vaguely targeted. These are clubbed under the two broad heads of agriculture and allied activities (~1.60 trillion); and rural development (~1.23 trillion). Finance Minister Nirmala Sitharaman has rightly pointed out in her Budget speech that the farmers’ prosperity warrants competitive and liberalised Speaking volumes farm markets, greater investment in logistics and agri-services, and substantial support for agriculture’s allied activities such as animal husbandry, beekeeping n the space of three days, two significant speeches tion MPs swarming around her in concern as she faded the Speaker’s platform. This time, apart from Ms and fisheries. But the Budget has failed to conceive sound strategies to meet were delivered, one in the world’s largest democ- out with two pages to read. And she certainly did her Sitharaman’s emphatic and interminable repetitions, these imperatives. Amendment of state laws governing agriculture marketing, Iracy and the other in the world’s most powerful best to deliver a stirring message. Wearing a stunning we were treated, mostly, to close-ups of the prime min- contract farming and land leasing — the three areas specifically mentioned one. Both took place against the backdrop of height- gold-yellow sari, she quoted, within the hour, an ister’s expressionless face. in the Budget for legal reforms — can be the case in point. This issue has been ened political challenges for the incumbent govern- excerpt from a Kashmiri poem (adroitly avoiding the About an hour in and the going got tough for those kept on the top of the agricultural agenda, but it is sought to be carried out ment. Both will be remembered for reasons other than poet’s Urdu nom-de plume, as my colleague Aditi of us at the coalface of the Budget speech. Economic only through persuading the states — something that has already been tried the content of the speeches. And both point to a Phadnis pointed out), one saying from a “wise old journalist Puja Mehra tweeted that the Budget was out without much success. The states are reluctant to give up control over depressing decline in the standards Tamil Woman Saint Poet” and a certainly stimulating coffee consumption. An hour of public oratory. Kural or Tamil sacred verse. She even later, even multiple caffeine fixes failed. By the time farm markets because of the political clout and the revenue they generate for The first by Finance Minister managed to throw in Kalidasa in the Part B came round, the flagging pens and empty note- them. Kerala, in any case, has been quick to announce that it would not allow Nirmala Sitharaman presenting the business end of the speech, univer- books were marshalled wearily, but the minor excite- contract or corporate farming. The prospects of legalisation of land leasing second Budget of Narendra Modi’s sally known as Part B, which covers ment over the income tax reconfiguration soon are also quite dim as there are not many takers for the Model Land Leasing second term when economic the tax proposals. Each literary ref- descended into confusion (which continues today). Act circulated by the Centre in 2016. Land leasing is a means of making the growth has dwindled was a record erence was explained, painstakingly, The finance minister said she was offering chartered country’s small-farm agriculture viable by facilitating adjustments in the oper- two hours and 43 minutes long, each proposal and achievement accountant-mukt tax proposals. If her tax proposals ational control of land without affecting its ownership. It allows the tillers of would have been longer had the repeated at least twice. But if there have stimulated demand at all, it’s for CAs. uneconomical landholdings to either expand them by hiring-in more land or deliverer not taken ill, and was was an overarching significance to Successive finance ministers have chosen to make notable for one thing: It failed this hard-working hard-sell it was lost an annual report on the state of the Union’s finances quit farming by renting out their land to others. The absence of legal sanctity expectations all round. on her exasperated auditors. into the equivalent of a SOTU because, like the latter, to land leasing deprives the large number of tenant farmers of several facilities, Three oceans away, the SWOT The finance minister’s school elo- it enjoys a captive audience. But SOTU is recognised services and other doles available to landowner cultivators. The only way the impeached US President Donald cution-contest cadences bears a good as a political progress report that the country’s chief Centre can nudge the states to come on board for such reforms is by linking Trump took 78 minutes to deliver KANIKA DATTA part of the responsibility for the executive delivers to Congress (interestingly, House Central grants with result-oriented action on these fronts. the final State of the Union (SOTU) aching boredom. But TV failed us too. rules stipulate that each address must contain a Budget The Budget has another welcome proposal to expand the much-needed of his first term, marginally shorter than his 82-minute The Congress has chosen to absent itself so the message). warehousing and cold storage capacity by offering viability gap funding. Still, 2019 harangue. The duration of SOTU 2020 took in Doordarshan camera people had few options to offer This year, the US fact-checkers’ toothcomb dis- the ultimate goal of having proper warehouses at the block level may not be over 100 interruptions for applause (from Republicans the watching public. They couldn’t pan out for long covered more misleading statements in Mr Trump’s only) and some orchestrated reality TV moments (an shots because that would have revealed the yawning SOTU rather than the outright whoppers of earlier fully achieved because the land for these godowns has to be provided by the Afghanistan veteran’s “surprise” return to his wife and gaps on the opposition front benches. In Budgets past, speeches (though he didn’t disappoint on that front states and the projects are stipulated to be implemented in the PPP mode. children). But Mr Trump’s calculated theatrics, includ- it was possible to take a break from ministerial into- either). Ms Sitharaman’s problem is that the many Similar may be the fate of another well-advised proposition of starting refrig- ing the studious non-mention of impeachment, came nations about helping farmers, poor, women, lower documents that accompany every Budget will offer erated rail and air services — Kisan Rail and Krishi Udaan — for speedy trans- to nothing. It was a fuming Nancy Pelosi, dressed in castes and other worthy tokenism with some minor grist for the sceptics’ mill for much longer. portation of perishable farm produce, including milk, meat and fish. Their her trademark suffragette-white pantsuit, who stole distractions. Sonia Gandhi’s unerring taste in saris, Manmohan Singh said the Budget was so long he operations, too, have been subjected to the availability of PPP arrangements. the show by conspicuously tearing up her copy of the for example. Her son’s struggles to look intelligent. could not absorb anything (it is unclear if the taci- These snags need to be addressed to make the Budget’s agricultural agenda speech on the podium behind the president. That’s The thickness of the late Sushma Swaraj’s hair despite turn former finance minister and prime minister what you get for dissing the House Speaker by ignoring the Formula 1 track of sindoor . The sadhus and sadhvis. was making a joke). But rest assured, despite nearly truly beneficial for the farmers. her handshake. Turbans and hats. Yawning backbenchers. The con- three hours of rhetoric, it is the numbers that will, No one dissed Ms Sitharaman, with many opposi- stant procession of transcribers and translators under ultimately, speak for themselves.

that made Sardar Patel rely on him. VP’s excluded Patel. It was Mountbatten, who relationship with Nehru remained at VP’s insistence, met Gandhi and had A draughtsman of independent India fraught throughout his career, especially Patel’s name included. Another instance after Mountbatten instructed VP to not she mentions is the serious rift that shaped his dislike of delegating work to world he does not leave until his situations. Finally, we witness VP’s tell Nehru about Plan Balkan, the developed between Sardar Patel and others, and “preferring to do everything retirement. career change course after Sardar Patel’s original Mountbatten plan that Nehru over Kashmir, with Nehru’s himself”. We learn “hard headed Within the course of a night, VP death, and his eventual retirement into proposed that India would be vivisected insistence on making Kashmir a part of perhaps and illogical most certainly, VP Menon presents Mountbatten with the obscurity. into dozens of countries. This laid the India, whereas Sardar would have was nothing if nor persistent.” Menon Plan, the first official draft of the The book, written by Menon’s great foundations for Nehru’s profound preferred to hand Kashmir off to A small act of kindness by a stranger terms of India’s granddaughter, mistrust of VP. Pakistan or see to its partition. In the BOOK REVIEW at the Old Delhi Railway Station changes independence, V P MENON: THE follows those These days, we find Nehru and Patel course of the discussions, Patel sent the course of his life. Employed as a which becomes UNSUNG ARCHITECT events of Indian blindly pitted one against the other, and Nehru his resignation and, in response, SARAH FAROOQUI temporary clerk, VP between 1914 and the catalyst for OF MODERN INDIA history to which the cracks within their relationship Nehru offered to resign. This situation 1915 shuttles within the Home India’s Author: Menon manipulated to augment partisan was resolved after Mahatma Gandhi’s he scope of V P Menon: The Department, usually as a typist, and transformation Narayani Basu contributed politics. But just as no two people remain intervention. Unsung Architect of Modern sometimes a stenographer. VP becomes into an directly and the same through the course of their According to Campbell Johnson, TIndia is vast. The author, close friends with Kottieth P Anantan independent Publisher: significantly. It lives, no relationship between two press attache to Mountbatten, “… each historian Narayani Basu, introduces the who is also an early mentor, and his wife democratic Simon & Schuster also explores the strong personalities can be static, had what the other had not. Nehru had reader, first, to a young boy “Kuttan”, Pankajam, who would later become VP’s republic. As the Price: ~799 interpersonal especially if the national interests of an the sweep and range of imagination and and demonstrates how his defining partner. He gets married and his Reforms Pages: 448 relationships independent India are at stake. Narayani world policy. Patel was a highly practical character traits are evident from early personal life descends into a scandal. Commissioner to between the Basu’s narrative attempts to explore the man, who would say, “All right we are on. Through short descriptions, a Circumstances play “the role of kindly the last three protagonists who nuance as well as the evolution of the going to do this”.“ Through the course of picture of Vappala Pangunni Menon or fairy godmother to VP” when Edwin viceroys of India, and as Secretary, States shaped independent India. Menon is very complex relationship between the the biography, Sardar Patel is VP, as he is called through the book, Montagu is appointed Secretary of State Ministry, Menon played a pivotal role in considered Sardar Patel’s right hand two men. The dynamics of this omnipresent as VP’s mentor and as the starts to develop. We are told about his of India, and VP is recruited to the manoeuvring the integration of 565 man, but the author emphasises that VP relationship also plays an important role pragmatic in India, while Nehru is eidetic memory, his Machiavellian Emergency Branch of the Home states into the Indian Union — including would never be anyone’s “man” but his in VP’s career. viewed, often critically, through VP or tactics that would harden over the years, Department to assist Montague — the Junagarh, Hyderabad, and Kashmir — own, and that he was loyal to the The book claims that Nehru’s first Patel’s perspectives — revealing how and love for studying. We see how an first time he enters the world of Indian each of which came with its own set of governments for he which he worked. It official list of the people he wanted in private perspectives and interpersonal incident from his boyhood days in Kolar, political and Constitutional reform, a difficult characters and unique was this along with his other qualities independent India’s first Cabinet dynamics shaped Independent India. 14 PERSONAL FINANCE MUMBAI | THURSDAY, 6 FEBRUARY 2020 >

until you are close to the sale of shares,” says Rupali Singhania, Partner, Areete Consultants LLP. FM encourages start-ups with Opt for Esops based on your age Hiring and risk-taking ability. “Som e body in his 20s can take greater risk than someone in 40s or 50s. Older people al so have more obligations. They expatriates to cash flow relief for employees should opt for a bigger cash compo- nent in their salary,” says Mistry. turn costlier Now, they can take the risk of joining without having to pay taxes on Esops immediately Liquidity risk: Start-ups are unlisted, so there is no ready market for their ees who qualify as interna- shares. Employees can only exit at the tional workers, employers employee only gets shares, not hard time of IPO, if the company is are required to mandatorily cash. “Start-up employees faced acquired by a new investor, or if it contribute to the Indian hardship because while a tax liability does a buyback. Provident Fund at the rate arose at the time of allotment of Check the Esop agreement close- of 12 per cent of their salary shares, there was no monetary gain ly: When an acquisition take place, under the Employees’ for them to pay the tax. The proposed will employees will be treated at par Provident Funds and Mis- change will help them deal with their with promoters? “Some times, pro- cellaneous Provisions Act, cash flow issues,” says moters are able to encash 1952(PF regulations). The Shalini Jain, tax partner, their shares while salary here is high as expa- people advisory services, employees are not given TAXING MATTERS triate employees do not EY India. Employees will the same opportunity,” have structured packages. also benefit if they have says Singhania. Stu dy the KULDIP KUMAR Almost the entire salary moved into a higher tax Esop plan for exit (except performance bonus bracket. “You will pay tax options. Some compa- The Finance Minister’s and benefits) comes under at the rate that applied to nies set up trusts to buy Union Budget 2020 contains the ambit of PF. Even the you when the shares back shares, which pro- proposals that will benefit salary cap of ~15,000 per were allotted,” says Homi vides comfort that em- expatriates working in India. month is not applicable to Mistry, partner, Deloitte “Start-up ployees will be able to sell The most notable one is the them. On the one hand, India. employees faced shares in an emergency. change in tax residency pro- there is the legal obligation This benefit will only hardship because visions. Expatriates will now to contribute to PF under be provided only to start- while a tax liability Know the vesting be able to stay longer in the PF regulations and on ups that meet certain cri- arose at the time of schedule: Employees India before taxation of their the other, they will be re- teria (see box). “Ideally, it allotment of could lose their shares if global income gets trig- quired to pay tax on contri- should have been provid- shares, there was they do not spend their gered. butions beyond ~7,50,000 WHO CAN AVAIL OF ed to a wider range of no monetary gain entire vesting period (the Prior to this proposed under the Income-tax Act, THIS CHANGE? start-ups,” says Jain. for them to pay the time after which they change, they were able to 1961 by virtue of this pro- SANJAY KUMAR SINGH Tax liability deferred: ESOPs are nShould be an eligible Next, let us turn to tax. The proposed acquire a right over the stay in India only for two- posed change. currently taxed first at the time of start-up according to some of risks employees change will help shares) with the compa- three years before global Even where employers or quite some time, employ- exercise of shares. The difference Section 80-IAC opting for Esops run. them deal with ny. Suppose that the taxation was triggered, but want to reduce their contri- ees of start-ups have com- between their fair market value their cash flow vesting period is four now they can stay up to bution to bring it down plained about a provision in (FMV) on the date of exercise and the nShould have been Valuation risk: This is issues” years and 10 per cent of four-five years. The new op- below ~7,50,000, they can- Fthe income-tax law that exercise price is taxed as perquisite. incorporated after April 1, the biggest one. SHALINI JAIN Esops vest in the first tional concessional tax not do so as it would be a vi- caused them hardship. Stock options The employer deducts tax at source. 2016 but before April 1, 2021 “Employees give up on Tax Partner, People year, 20 per cent in the regime will also olation of PF are taxed in their hands as perquisite Esops are also taxed at the time of sale something tangible — second, 30 per cent in favour expatri- Expatriates regulation. The nTurnover should not exceed Advisory Services, at the time of exercising (allotment), of shares. The employee's capital gain the cash component in EY India the third, and 40 per ates as most of invest a high government creating a liquidity problem for them. gets taxed, the amount being the dif- ~100 crore their salary — based on cent in the fourth. The them generally amount to should reconsider In Budget 2020, finance minister ference between the sale price and nShould hold a certificate the belief in their ability to contribute bigger tranches vest later on. If an do not claim de- comply with PF this tax proposal, Nirmala Sitharaman has announced the FMV (on date of exercise). from the Inter-Ministerial to the company’s growth story. But employee quits early, he would for- ductions or ex- regulations. The especially for ex- that the time when start-up employ- Now, for employees of specified Board of Certification while opting for Esops, it is impossi- feit those shares. emptions. The government patriate employ- ees will have to pay tax on their allot- start-ups, the payment can be ble to tell which side valuations will Employees are given time to exer- only deductions should consider ees. They are not ted stocks can be deferred. While their deferred. The tax can now be paid not tilt,” says Winnie Shekhar, partner, cise vested shares. “The exercise peri- they take are exempting them putting in more liquidity problems have been taken at the time of allotment, but when- financial year in which it was exer- IndusLaw. od is shortened to 60-90 days from under Section from the money out of care of, youngsters joining start-ups ever one of three events occurs first: cised. The tax rate that applies will be If the valuation declines between the date of leaving the company, if 80C towards ~7.5 lakh limit choice but to need to pay heed to the risks they run One, the date the employee leaves the of the year in which the option was the time of exercise and that of sale, employees quit. Be aware of such con- Provident Fund comply with PF when they participate in an employee company; two, when the share is sold; exercised. the employee could end up overpay- ditions or else you could lose out,” contribution and/or tuition regulations. stock option plan. or three, after five years from the At the time of allotment, the ing tax. “Defer exercising your options says Singhania. fees of their children. This proposal will hin- Another proposal is to der Indian industry from tax the employer’s contri- hiring the requisite talent bution towards Provident and special skill sets that BUDGET: cumulative option, the TDS is fund, National Pension may be important, particu- ~50 LAKH -~1 CRORE levied at the time of making Scheme and Superannua- larly for the manufacturing RBI Bonds: Good option for payment to investors. In case tion Funds, exceeding sector. It won’t affect com- of the cumulative option, TDS ~7,50,000. Even the inter- panies that have expatriates REALTY is levied on the interest est on such excess contri- on secondment from coun- risk-averse investors portion at the time of bution will be taxable in a tries with which India has a CHECK payment of maturity manner to be prescribed. totalisation agreement (SSA proceeds. No TDS will, The stated objective is to countries). They generally Business Standard brings you a snapshot of average Go for half-yearly payouts if you seek regular income however, be levied on tax highly-paid employees, continue to contribute to current rates and unit sizes in localities that offer exempted investors. They are who by structuring their their home country’s social property in the price range of ~50 lakh and ~1 crore. SARBAJEET K SEN FOCUS ON POST-TAX RETURNS exempt from wealth tax too,” compensation package, security instead of Indian If you are looking at buying real estate, an idea about says Bajaj. park their funds in these provident Fund. But corpo- Investment alternatives prevailing rates would come in handy With interest rates coming Though these bonds score retirement schemes and rates hiring expatriates di- down on most debt Fixed RBI Debt MF Hybrid on returns and safety, a save taxes. rectly on their payroll or Avg price (~/sq ft) Avg unit size (sq ft) instruments, only a few are deposit bonds (floater fund) equity drawback of RBI bonds is that Expatriates, particularly expatriates from non-SSA BHOPAL giving good returns. The they lack liquidity. “The RBI the highly-paid ones, will be countries will get impacted Reserve Bank of India’s (RBI’s) Risk Low Very low Moderate High bonds have a lock-in of seven hit by this. Rather, the bur- adversely. One hopes the Hoshangabad Road 3,510 1,823 Savings Bond is one of them. Min investment (~) 10,000 1,000 5,000 5,000 years, and there is no way an den will fall on the Indian government will reconsider Kolar road 2,640 2,412 A fall in retail domestic term investor can exit. They are companies that hire them. this proposal to protect the Salaiya 3,571 1,804 deposit rates is discernible Returns 6.10% 7.75% 7.99% 10.02% also not transferable. If some - Generally, such employees interests of industry. Ayodhya Bypass 2,948 1,872 across all tenors above one Who can invest RI RI RI/NRI RI/NRI one needs liquidity within are tax equalised and em- year and till 10 years. seven years, he should skip ployers bear their tax liabil- The writer is Partner and Bawadiya Kalan 3,891 1,852 Currently, the SBI fixed Demat required No Yes No No this product,” says Sridharan. ity in India. Leader Personal Tax, PwC Misrod 3,000 1,984 deposit rate is 6.10 per cent for Can they avail loan Yes No No No Premature encashment is For expatriate employ- India. Views are personal tenors in the range of 5 to 10 allowed for investors of 60 Airport Road 3,583 1,615 Liquidity Immediate 7 years Immediate Immediate Shahpura 2,930 1,900 years while it is 6.60 per cent years and above, subject to the for senior citizens. Taxation Taxable Taxable Indexation LTCG minimum lock-in period. For COIMBATORE In comparison, RBI benefit investors in the age group of Trichy Road 5,025 1,483 Savings Bonds carry a coupon 60-70 years, the minimum Investment (~) 1,00,000 1,00,000 1,00,000 1,00,000 Vadvalli 4,587 1,403 rate of 7.75 per cent lock-in is six years, for 70-80 TIPPING Tenor 7 7 7 7 Saravanampatty 4,052 1,626 compounded/payable half- years it is five years, while it is yearly. “RBI bonds score over Capital gain (~) 51,359 70,275 67,314 95,120 four years for investors of age POINT Peelamedu 5,009 1,308 bank FDs on return. Their 80 years and above. Ramanathapuram 5,170 1,469 appeal becomes even more Indexation cost (~) — — 1,27,273 1,00,000 While RBI bonds are a Ganapathy 4,704 1,448 pronounced Gains after index (~) 51,359 70,275 40,041 — good investment option for Is portfolio turnover important? when the the risk-averse, they are GN Mills 3,600 1,527 Indvidual tax rate 30% 30% 30% 30% The portfolio turnover ratio indicates how much buying and yield curve is ideally suited for senior selling a fund manager does. A turnover of 100 per cent means Selvapuram (South) 4,100 1,351 downward Tax on return 30% 30% 20% 10% citizens. “RBI Bonds are a the fund manager has changed his entire portfolio once in a INDORE sloping,” says Tax payable (~) 15,408 21,082 8,008 0 good investment option for a year. A turnover of 50 Nipania 3,471 1,989 Rajiv Bajaj, conservative investor seeking per cent means he chairman and Net gain (~) 35,951 49,192 59,306 95,120 stable returns along with HIGH CHURN CAN HARM Bicholi Mardana 3,216 2,035 has changed half his MD, Bajaj Final value (~) 1,35,951 1,49,192 1,59,306 1,95,120 safety of capital. This is Large-cap Turnover portfolio in a year, Snehlataganj 3,178 1,845 Capital. particularly true of senior YOUR Net return 4% 6% 7% 10% funds ratio (%) and so on. Piplyahan 3,988 2,047 The citizens who tend to be risk- Many investors Ring Road 3,586 2,017 MONEY stipulated RI is resident Indian. Source: Wealth Ladder Investment Advisors averse. They normally prefer Maximum 217.0 think a high turnover lock-in is assets that are immune to Sanwer Road 3,290 1,898 Median 71.5 ratio means the fund seven years while for senior Certificate, Postal Deposits, Ladder Investment Advisors. market gyrations. For manager is very Vijay Nagar 3,084 1,788 Minimum 10.0 citizens it is lower. The etc. Interest rates will likely However, these bonds are investors who want a regular proactive in Bicholi Hapsi 3,300 1,955 minimum investment is move southward for some taxable in the investor’s income, non- cumulative Source: mutualfundindia.com managing it. This is a LUCKNOW ~1,000 and there is no time. In such a situation, RBI hands. He has to pay tax on option is a prudent choice. If mistaken belief. Too maximum limit on bonds is attractive for the marginal rate of tax. Also, someone prefers the much churn raises costs. If one is looking for a stable fund, go Vrindavan Yojna 3,792 1,669 investment. investors. The interest a 10 per cent tax is deductible cumulative option and does with one where the turnover ratio is below the median level Gomti Nagar Extension 4,108 1,597 “At present, the interest payable on a half-yearly basis at source if the interest not need a regular income, he (see table). A lower turnover ratio means a buy-and-hold rate is low on most savings takes the yield to 7.9 per cent,” income from these saving can opt for these bonds after Gomti Nagar 7,391 1,005 kind of fund manager who is sure of his picks and has the Faizabad Road 3,514 1,697 instruments like fixed says S Sridharan, head, bonds exceeds ~10,000 in a exhausting his Section 80C deposit, National Savings financial Planning, Wealth year. “In case of the non- limit,” says Bajaj. patience to wait till value is realised. Sushant Golf City 4,231 1,621 Bijnor Road 3,052 1,888 Sitapur Road 4,151 1,568 Arjunganj 4,000 1,410 nifying the difference in returns. To get the However, to save taxes, consider investing tional currency even though investors invest SURAT READER’S best of both the strategies, splitting your in an equity-linked saving scheme. They in them in their local currency. Vesu 4,376 1,622 CORNER monthly investments between passive and invest in equities and also enjoy tax deduction Palanpur 3,642 1,788 active funds. under Section 80C up to ~1.5 lakh. They can I want to go to the US to study. I can save MUTUAL FUNDS Keep in mind your age and asset allocation help build wealth over a long period. ELSS has ~50,000 a month. Which scheme should I Mota Varachha 3,732 1,696 mix as you grow older. At 42, you are capable a lock-in period of three years. invest in? Pal Gam 3,340 2,414 of taking higher equity exposure. However, as Assuming your plan to study in the US is a Sarthana 3,265 1,932 you grow older, consider switching to less risky I am 32, and I want to have international near-term goal (that is within three years or Althan 3,800 1,906 investments, such as hybrid funds that allo- exposure in my portfolio. How can I do that? less), you could consider investing in debt ASHWANI cate between equity and debt, and even gold It is advisable to invest in the international schemes. Near-term or short-term goals Uttran 3,637 2,058 BHATIA (in some hybrid schemes). Closer to retirement market once you have enough investments in should be ideally met by investing in debt Adajan 4,819 1,547 or post-retirement, invest in safer debt-orient- the domestic market to capture its growth funds, as these funds aim to protect capital. VADODARA ed mutual funds. potential. Assuming you have enough invest- Equity funds tend to be comparatively risky Vasna Bhayli 3,135 2,236 ments in domestic funds, you can take inter- in the short-term and are, therefore, not rec- I am 40. I want to save ~20 lakh in the next national exposure either by investing in a fund ommended for goals that have to be realised Sama-Savli Road 2,857 2,043 I am 42 and have two debt fund schemes. I five years. I also want to save income tax. that invests directly in international equities, in the short run. However, you must note that Bhayali Road 2,513 2,230 can invest ~25,000 a month for the rest of Can I use multi-caps for both these goals? or a feeder fund that invests in funds in other withdrawals from debt schemes in the short- Note my life. I want to build wealth. Should I Since you have an investment horizon of five countries or markets. Some feeder funds or term (three years or less) attract short-term ·The ticket price range considered for the above data points is between ~50 lakh and ~1 crore invest in an active or passive equity fund? years for a goal of ~20 lakh, multi-caps could fund-of-funds could invest in one or more capital gains tax. This tax is calculated based ·All the data points discussed in the above table refer to primary The suitability of an active or passive equity be a good choice as they invest across market geographies. on your income-tax slab. In case you can invest market only fund depends on your risk appetite. An active caps. They aim to create a balance between The advantage of investing in the interna- for more than three years, go for hybrid funds ·Above residential data set comprises of residential apartments only fund usually carries some amount of addi- large-cap stocks, which are relatively more sta- tional market is that it gives a broader expo- or large-cap funds. ·Above residential data is representative of organised real estate tional risk as investment decisions are taken ble, and mid- and small-cap stocks, which sure to the investor in regions they might oth- developers only ·The top performing micromarkets based on sales during last year by a fund manager. In contrast, a passive fund tend to generate higher returns over the long erwise not have any exposure to. However, The writer is MD & CEO, SBI Mutual Fund. The (December-2018 to November-2019) is represented on the above table invests in stocks in the same proportion as term. Being equity funds, returns from multi- investors need to be aware that these funds views expressed are the expert’s own. Send your ·Data points are updated till November 2019 the underlying index with a tracking error sig- cap funds are tax efficient. run currency risk. They invest in an interna- queries to [email protected] Source: PropEquity 16 TECHNOLOGY 4.0 MUMBAI | THURSDAY, 6 FEBRUARY 2020 1 >

ating a Zero Knowledge Proof-Based Predictive Services Delivery platform for all government services. The idea Budgeting is to provide these services in advance A leap into digital life of when citizens are likely to need them, obviating the necessity of for the future applying for them. Tamil Nadu is pioneering the use of AI and blockchain to help the state provide better service to “For example, when a child’s birth citizens, writes T E Narasimhan certificate is issued, the system at our end will send the vaccination infor- of tech mation through an SMS when she tudents turning up late is a becomes six months old. Likewise, The decade ahead for common problem in govern- when she turns five, her parents will be the government will ment schools in Chennai. alerted through mobile message to cre- have more technology- With students meandering in ate her Aadhaar card,” said Misra. based services than ever at various times of the day, The application software used for before. teachersS waste a lot of time checking issuing certificates will be suitably The Budget announ- attendance during different periods. modified so that the document issued cements made by Now, in a pilot project at a school in will electronically hit the makkal num- Finance Minister Triplicane in Chennai, the moment ber (citizen number) already created Nirmala Sitharaman pupils arrive, an AI-enabled facial by TNeGA for 70 million people in the indicate that the gov- recognition system marks their arrival state and electronically reach a ‘Citizen ernment is ready to and the time. The school has seen an Vault’ — a kind of storage folder— to KRANTI NATION embrace the benefits of 85 per cent fall in stragglers. be created for each resident. PRANJAL SHARMA technology in diverse A brainchild of the Tamil Nadu e- People can view their certificates or roles and sectors. The Governance Agency or TNeGA, the documents in their “vault” using their focus on technology includes agriculture, textiles, pilot, tested in several schools, will mobile number and user ID. From urban renewal, ports and healthcare. now be implemented in 3,000 gov- birth to death and all the other docu- Phrases like Internet of Things and machine learn- ernment schools across Tamil Nadu. ments a person needs in between ing, which were alien to the government, are now part Tamil Nadu has also started rolling these two events — proof of educa- of official lexicon. out an AI-based crop pest detection tion, caste, income etc — a system on This is an important shift for governments since it and mitigation solution to help farm- blockchain will, without human inter- must counter the perception that higher use of tech- ers address crop disease. vention, prompt the software of each nology is at the cost of employment and job creation. It is also exploring the use of a department to issue the relevant doc- “The new economy is based on innovations that Predictive Services Delivery using ument as and when appropriate. disrupt established business models. Artificial intelli- blockchain technology to provide “The state’s mission is very clear. As gence, Internet-of-Things, 3D printing, drones, DNA services to citizens when they need a government, we have to offer citi- data storage, quantum computing, etc., are re-writing them, such as a reminder of a baby’s zens convenient procedures and serv- the world economic order. India has already embraced first vaccination — rather than wait- ices that ease their life and not make new paradigms such as the sharing economy with ing till citizens seek out these servic- them run from pillar to post seeking aggregator platforms displacing conventional busi- es themselves. essential certificates or documents,” nesses. Government has harnessed new technologies These are just a few examples of A school in Triplicane, Chennai, where the moment pupils arrive, an AI-enabled facial recognition system marks their said Misra. to enable direct benefit transfers and financial inclu- the innovative solutions that TNeGA arrival and the time The state has allocated a budget of sion on a scale never imagined before,” the Budget says. is pursuing for a digital future and ~90 crore for the Predictive Services The Budget has also announced investment in the backing the efforts is Chief Minister K This indigenously developed solution requests on Uzhavan for help. The app mated virtual assistant which can talk Delivery project which is presently in future. It has promised to set up data centre parks and Palaniswami’s decision to increase the costs only ~3,000, including the hard- is currently being used by over to people in Tamil. The smart assis- the blueprint stage but is likely to take a National Mission on Quantum Technologies and budget for e-governance initiatives ware. So far, it has shown 99.5 per 500,000 farmers. Its usefulness is tant guides people step-by-step on concrete shape over the next year. Applications with a fund of ~8,000 crore for a five- from ~25 crore last year to around cent accuracy. huge given than nearly 70 per cent of how to apply electronically for birth, Vittal Raj, founder and senior part- year project. “Quantum technology is opening up new ~400 crore. “It is saving nearly an hour every Tamil Nadu’s population depends on income, or community certificates. In ner at Kumar & Raj and an expert on frontiers in computing, communications, cyber secu- “Low cost, indigenous, scalable day that used to be wasted by teach- agriculture. the future, TNeGA hopes to make the cyber security and business technolo- rity with wide-spread applications. It is expected that solutions for improved governance is ers doing periodic attendance checks As to the rest of the coun- process voice-based. gy, praised TNeGA’s work. “A good gov- lots of commercial applications would emerge from our motto,” said Santhosh K Misra, and freeing up that extra time for the try, its possible usefulness Part of the ernance model, technology architec- theoretical constructs which are developing in this CEO, TNeGA and commissioner of e- core educational activities in can be gauged from the fact state’s digital Getting futuristic with ture and human capital are amongst area,” the Finance Minister announced. governance. An IAS officer and an IIT schools,” said Misra. that India’s per hectare cere- initiative blockchain the critical success factors for suc- The government has also provided a much need- Kanpur alumnus, Misra is leading a al productivity is almost half involves steering One of the state govern- cessful e-governance, not to forget the ed ~6,000 crore boost to provide rural regions with team of a dozen professionals at the Identifying pests in 24 hours that of China and the UK the government ment’s most futuristic proj- need for political and administrative Bharat Net fibre-to-home connectivity. new Centre of Excellence in Emerging The Pest Identification System devel- (around 3,000 kg/ha vs towards evolving ects is the Blockchain will,” he said. Realising the importance of artificial intelligence in Technologies which is developing oped by TNeGA aims to mitigate agri- 6,000 kg/ha) owing to crop policies that are Backbone infrastructure to Raj added that TNeGA’s plans for managing data, the gov- these new systems. cultural losses by offering farmers diseases causing a signifi- based more on improve the efficiency of e- Nambikkai Inaiyam which will digi- Short courses ernment is now ready to Their mandate is simple: Use faster pest diagnosis and solutions. cant loss of productivity. data and governance services. tise all services on a blockchain back- that are linked deploy analytics for offi- every new age technology ranging The interface of the system is an app analytics than TNeGA has earmarked ~40 bone-based trust platform, was a clas- cial statistics. A new policy Chat Bot Anil to market needs from AI, machine learning, called Uzhavan. A farmer can photo- on unproven crore to build this sic example of how emerging and on official statistics would blockchain and the Internet of Things graph a pest-infected crop on his One of the first things that assumptions and blockchain platform which technology can be applied to lay a breakthrough use AI for data collection, to help the government perform bet- mobile phone and upload it through TNeGA did was to try and guesswork will be offered to all gov- “robust foundation to achieving technologies will integration, assessment ter. Part of this involves steering the the app. understand why citizens ernment departments. visionary goals for good governance”. be far more and dissemination. government towards evolving poli- The system at the backend did not access government services Known as Nambikkai Inaiyam (which Still more ideas are being formu- useful than Hopefully the archaic, cies that are based more on data and processes the picture using an AI- digitally. It roped in IIM roughly translates to Trust Link), the lated such as using technology to degrees that are flawed and poor data col- analytics than on unproven assump- enabled image processing algorithm Tiruchirappalli for this purpose and platform is a state-wide infrastructure detect internal bleeding from CT outdated from lections systems would be tions and guesswork. to identify the pest or disease. A mes- the findings showed that most that can be leveraged by all govern- scans, a blockchain-based solution for day one replaced rapidly with new While TNeGA is working on many sage is sent to the farmer suggesting citizens are simply not familiar with ment departments for intra-depart- tamper-proof preservation of registra- AI-led processes. ideas, some have already been imple- what he can do to get rid of it in less keyboards. ment exchanges and for providing tion documents, and an Internet of India is a laggard in mented, such as the facial recogni- than 24 hours. TNeGA collaborated with Anna services to citizens. Things-based monitoring of the drink- investing in new technologies. Government bodies tion system for student attendance. Every day about 500 farmers post University to launch “Anil”, an auto- Alongside this, TNeGA is also cre- ing water supply in rural areas. and private enterprises have not invested enough in developing and enhancing emerging technologies. Small and smart start-ups are doing a better job of developing and deploying such technologies. But it is ALGO RHYTHM better late than never in this field where there is a breakthrough almost every six months. Focus on local development is important. EYE ON THE OPERATING SYSTEM Hindustan Aeronautics, for instance, is moving to 0.6 Samsung Recently, as US-China tensions escalated, a tech company 0.4 manufacture unmanned combat aerial vehicles with got caught up in the storm. Chinese firm Huawei, the Tizen an Israel Aerospace Industries. MOBILE Linked to the use of emerging technologies is the world’s biggest telecom equipment maker and a leading 0.4 oft-repeated need for revamping education. Instead of smartphone maker, was barred from using Google OPERATING 0.8 Others obsolete four-year degrees, the government must con- services. The result: It had to forgo Google Android SYSTEM Nokia 0.2 sider a life-long learning approach for students and operating system and develop its own. Windows professional. Short courses that are linked to market Pulling the plug on Android is a big blow to Huawei, as MARKET 2.7 needs and breakthrough technologies will be far more Android (with 90 per cent market share in India and Apple useful than degrees that are outdated from day one. similar share across the globe) is the dominant mobile SHARE IN Perhaps the better encouragement of technology is its operating system and a funnel for all other mobile services 5.0 usage. Even as the government allocates billions for INDIA (%) 89.9 development, it must also change its rules so that it can (through app store). Though Apple, which locks its users in KaiOS Android utilise the services of young tech companies. its own operating system iOS, is the only other dominant Government rules still focus on legacy, size and force in OS, a few Indian upstarts are working to end this precedence for granting work to private companies. As duopoly. Indus OS, a start-up from Bangalore, has an the delivery of government services depends increas- Indianised operating system for mobiles, used by phone 0.1 13.2 DESKTOP Chrome ingly on technology, the government will have to con- makers like Karbonn and Micromax, among others. Others sider ways of involving small and smart companies. Another player on the block is Total, which is developed by OPERATING 4.3 Such changes should be done before the rollout of social media company Hike. SYSTEM Linux high-speed connectivity promised by 5G mobile serv- Not just with new launches, OS itself is changing the ices. China’s investment in technology has outshone way it is served. Recently, InMobi, a mobile advertising MARKET even the US. India has a responsibility to protect its network, struck a deal with smartphone companies to SHARE IN interests by investing, encouraging and deploying emerging technologies. show its content on users' lock-screens. In time, this lock- INDIA (%) 4.6 The Budget announcements are a good start and Apple screen will become a place to feature entertainment 77.8 will bear fruit for the country once related efforts are content, news as well as ads. COMPILED BY: YUVRAJ MALIK Source: Statcounter Windows made simultaneously. Sebi embraces new age tools to prevent market manipulation The regulator will use data analytics to scrutinise what it finds in its ‘data lakes’ participant made unlawful gains. By leveraging the “data lake”, Sebi will and monitor information on social media, writes Samie Modak be able to comb through social media, news websites, discussion forums, videos Heard of Black Edge? In her famous book top of it through the use of AI and architecture is designed to act on what is and podcasts, to find any potential on the hedge fund industry which has the Machine Learning. A tender to this effect called “structured data”, that is, the data pattern. If, for instance, the results show same title, Sheelah Kolhatkar describes was launched last November. obtained from market intermediaries that a company insider passed key Black Edge as the “most valuable Presently, several industries including such as stock exchanges, brokers, information illegally, Sebi can hold the information of all” in that it is proprietary, e-commerce, telecom, banking, and depositories and mutual funds. company accountable. non-public, and certain to move markets. financial services are using data model- It also has access to ‘semi-structured Also, listed companies are supposed to No doubt, securities regulators around ling by leveraging new age tools and data’ in the form of bank statements and disseminate sensitive and credible the world are putting in huge efforts to technologies to gain business insights income tax filings which are also information on the stock exchange prevent the flow of such information, as and make faster and smarter decisions. relatively easy to process. But where Sebi platform in order to ensure all investors well as to punish those making illicit gains Several global regulators across the lags is in the handling of “unstructured get uniform access to it. However, some using these insights. But it is not as easy as banking and securities data” which could be blogs, companies tend to give out information it may sound in an era when WhatsApp, markets have also started Monitoring the flow videos, and even random on Twitter or television news channels Instagram, LinkedIn, Facebook and using data analytics of information on chatter posted online. which could be prohibited under the law. Telegram have almost become primary extensively to stay ahead of social media is “Structured data analysis A famous example was Telsa boss Elon mediums of communication. the curve when it comes to critical to prevent is not helping much and Musk’s tweet in August 2018 that the Given this, Indian market regulator unscrupulous activities. insider trading manipulators are using all company had secured funding to go Sebi (the Securities and Exchange Board “By creating a data lake and ensure kinds of techniques to evade private. The US market regulator, the of India) is going all out to embrace new architecture, Sebi can use transparency them,” said Sebi chairman Facebook or through using in-house insider trading and ensure transparency. Securities and Exchange Commission, age tools and technologies to analyse analytics to identify a pattern Ajay Tyagi. “The analysis of technology. However, industry players The implementation of data lake later pulled up Musk for giving infor- large-scale data to prevent market to detect instances of market unstructured data and language proce- say that in the absence of a data modelling capabilities will arm Sebi to scrutinise mation without authorisation. The case manipulation such as insider trading. manipulation. Using a combination of ssing is a must in addition to analysing platform or analytics tools, Sebi’s such data. This ability, combined with was settled last year after Musk agreed to Sebi has drawn up a four-year road- these can make the analysis sharper and changes in prices and volumes. We intend capabilities could be limited. Sebi’s traditional surveillance tools, can follow Twitter usage guidelines in future. map for beefing up its technological bring actionable insights,” said Kunal to acquire new technology to do this.” At present, a huge amount of stock act as potent tools to catch violators. Industry players say such instances prowess with a ~500 crore budget. It is Pande, partner, KPMG India. Gaining access to information posted market-related information is shared and For example, scores of alerts on stocks are possible in India as the use of Twitter is looking at building a “data lake”, a vast Getting access to the data and on social media is also a key part of this distributed by individuals as well as that see unusual volumes or price on the rise. Regulators will need to deploy repository of both structured and acquiring the ability to harness it, he strategy. There have been several orders companies on social media and movements are generated by stock technology to ensure that information unstructured data, and creating data added, will boost Sebi’s confidence. issued by Sebi which have established discussion forums. Monitoring the flow of exchanges daily. While these alerts draw that is passed on is not in violation of modelling and analytical capabilities on At present, Sebi’s surveillance links through matrimonial apps and this information is critical to prevent Sebi’s attention, it has to establish if any disclosure norms. MUMBAI | THURSDAY, 6 FEBRUARY 2020 BRAND WORLD 17 . < Virat stays on top, Akshay moves up a notch Kohli outshines all with 40% jump in brand value, holds the top spot and earns 50% more than Kumar at No. 2: Duff & Phelps

SOHINI DAS mote their labels, the Mumbai, 5 February nature of advertising and endorsements has trans- irat Kohli is the formed rapidly. Even when shiniest star on the using familiar faces that V celebrity list as he have established their holds on to the top rank, mark over the mass mar- third year in a row, in the ket, advertisers are devis- latest brand valuation ing new ways to use their study by Duff & Phelps. star appeal — at times by Released on Wednesday, being a part of their Twitter the report shows that Kohli timelines or securing an has increased his brand endorsement on their value by 40 per cent to Instagram stories. $237.5 million in 2019 and “In real terms, the def- cracked a huge lead with inition of a celebrity has his closest rival, Akshay TOP FIVE: WHO STANDS WHERE changed. Today, anyone Kumar. The latter has Celebrity Rank Brand value with a substantial social climbed a rung up the lad- media following can be 2019 2018 (2019), $mn der to second spot, dis- dubbed a celebrity — at placing Deepika Padukone, Virat Kohli 11 237.5 least for endorsement pur- Barring this, the top five Akshay Kumar 23 104.5 poses. What businesses list remains largely Deepika Padukone 32 93.5 are looking for are influ- unchanged. In a year when encers and having a 5-mil- couple endorsers have Ranveer Singh 34 93.5 lion strong Twitter follow- been popular, the title for Shah Rukh Khan 55 66.1 ing surely makes you one,” the first such goes to Source: Duff & Phelps said Sandeep Goyal, chief Padukone and Ranveer mentor, Indian Institute of Singh, who share the third spot. star-struck nation. The cumu- 2019 also saw the emergence of Human Brands. The brand value of the top 20 lative number of product brand new brands and new platforms Celebrity endorsers have celebrities in 2019 is estimated endorsements by top 20 targeting and growing the also become more conscious at $1.1 billion, an increase of 25 celebrities increased from 235 Indian millennial ecosystem.” of the brands they back, per- per cent from last year, it said. in 2016 to 370 in 2019, repre- The rise of young celebrities haps on account of the threat Among the veterans Shah senting a CAGR of 16.3 per cent goes hand in hand with the rise of greater scrutiny from regu- Rukh Khan and Salman Khan over the last 4 years. And estab- in digital media. Market size for latory authorities or because stayed the course, ranked at 5 lished actors and sportspersons digital as a percentage of films social media has made them and 6 respectively while rising continued to rule the roost. But increased from 47 per cent in more vulnerable to criticism star Alia Bhatt has improved the emergence of new stars FY16 to 95 per cent in FY19. and censure. This is reflected her ranking one notch to take such as Ayushmann Khurrana “Given this unprecedented in the kind of brands celebri- the seventh spot. Surprisingly, (Rank 10), Tiger Shroff (Rank growth rate, digital is expected ties choose to lend their names M S Dhoni (Rank 9), who many 17) and cricketer, Rohit Sharma to soon overtake films to be the to; the report found that the had predicted would drop off (Rank 20) indicates that the third largest segment in the health and wellness brands are the charts as his career wound year ahead may well see a few media and entertainment seeing a steady spread in the down has improved his upsets in the league table. space. Resultantly, celebrity pie of categories that use ranking, going up three places Varun Gupta, managing endorsements have witnessed a endorsers. At the same time, from the previous year. director and leader, Asia Pacific, greater push towards use of dig- “With celebrities endorsing The annual parade of valuation advisory services, ital advertising as a means of and investing in the brands celebrity endorsers largely Duff & Phelps, said, “We wit- focused communication,” that correlate with their social stuck to the script and the nessed a shift in focus from Vibhor Nayar, CFA, vice-presi- image, advertising has evolved increasing sway of actors and established celebrities to new dent, valuation services, Duff & in terms of platform, content sportspersons on the endorse- faces across the advertising and Phelps, said. and engagement of the ment circuit is evidence that media industry over the past As brands have leaned heav- celebrity with the brand,” the India continues to remain a year. And not just new faces: ily into digital media to pro- report said.

> last couple of years, it has introduced a raft diversified group, which ranges from FROM PAGE 1 of policy measures and incentives to pro- cement to finance, Birla is known to be an mote EVs under the FAME scheme. Last astute industrialist who has taken the year, it reduced the goods and services tax group to greater heights following a com- Maruti’s EV... on EVs to 5 per cent from 15 per cent and bination of organic and inorganic growth A hybrid can be a stepping stone towards also announced income-tax benefits for the strategy. Jindal bet on the future of the electric mobility till an ecosystem for the lat- buyers. All the sops, however, are directed Indian steel industry and made JSW Steel ter evolves, he pointed out. at the commercial segment. the number one player with a capacity of Ayukawa’s counterparts think other- Elaborating on the reasons for Maruti 18 million tonnes per annum, for which wise. “I don’t think we can ask for more going against the trend, C V Raman, exec- he was awarded Business Standard CEO of from the government. The onus is no longer utive director (design and engineering) at the Year in 2017. Noshir Kaka led on the government, it’s on us,” said Pawan Maruti, said, “Volumes are not motivating McKinsey India as its managing director Goenka, managing director at Mahindra & enough. Price point where Maruti operates from 2011 to 2016, and founded the firm’s Mahindra, referring to the policy measures is where the volume is.” global outsourcing and offshoring prac- taken and incentives doled out by the gov- The company strongly believes in bring- tice and the business technology office ernment. ing affordable products and so far, the cost in India. He is now the co-lead of Tata Motors, too, has stepped on the gas. dynamics of EVs is not working. If the price McKinsey’s analytics practice globally. The company plans to have half a dozen of the internal combustion engine vehicle is Memani joined EY in the mid-1980s and EVs in its portfolio over the next two to three ~5-6 lakh, the EV version becomes almost rose to become its India chairman and a years. It has taken up the mission “to be double of that. The high cost makes it unvi- member of EY’s global executive board ahead in terms of EV technology”, Tata able, he added. and chairman of EY’s global emerging Motors President (electric mobility busi- markets committee. ness) Shailesh Chandra said. As CEO of KKR India since 2009, Nayar To avail of the benefits and make EVs Jio case has been involved in several marquee pri- financially viable, Mahindra has taken a vate equity deals in the country. Prior to strategic call to focus more on the shared The final decision on whether to challenge KKR, he headed Citibank India. Kudva, mobility space. At the 15th edition of the the appellate tribunal order in the Supreme former CEO of Crisil, is on the boards of Auto Expo, which got underway at Greater Court would, however, depend on the law several marquee Indian companies and Noida on Wednesday, EVs took the centre ministry’s response, which is expected in IIM Ahmedabad. Shroff, managing part- stage at most of the pavilions. Automobile two weeks, said an official. ner of Mumbai-based Cyril Amarchand makers unveiled over a dozen EVs, includ- An email sent to the Reliance group did Mangaldas, has a vantage view of Indian ing ready-to-launch models and concepts. not elicit any response. companies as a top lawyer. Chandra Even new entrants from China, including The NCLAT in its December 20 order founded Bain Capital Private Equity’s FAW and Great Wall Motors, plan to have dismissed the objection raised by the I-T India office in 2008 and was managing EVs as their centrepiece. At the Auto Expo, department over the approval granted to director, DSP Merrill Lynch, prior to that. the company showcased a concept EV car, Reliance Jio Infocomm’s scheme by the electric three-wheelers and a prototype NCLT, Ahmedabad, to reduce debt by trans- four-wheeler called Atom. ferring the telecom tower and the fibre busi- Services PMI... The government is banking on EVs to nesses into two separate entities. The I-T reduce the dependency on fossil fuel and department had raised concerns over avoid- New work intakes also expanded to the curb emissions in a country which is home ance and evasion of taxes. greatest extent in seven years. Policymakers to the world’s most polluted cities. Over the “Mere fact that a scheme may result in would be happy to note that most new work reduction of tax liability does not orders came from the domestic market, furnish a basis for challenging the thereby hinting at resurgence in domestic > BS SUDOKU # 2966 validity of the same… We are not demand after a long period of economic inclined to interfere with the decline over 2018. scheme of arrangement as As opposed to the latest trend, the PMI approved by the tribunal. Both the survey noted that most growth over 2019 appeals are dismissed,” the appel- originated in the international markets. But late tribunal had said in the final in January, services exports suffered a order. The NCLAT had also ques- decline, after rising for 11 months on the tioned the basis of the tax depart- trot, the survey showed. A number of pan- ment interference in the scheme of ellists mentioned weaker demand from arrangement when approved by the China, Europe, and the US. NCLT. “While sanctioning the High growth in new business also scheme, it is observed that the said brought equally high input inflation, with sanction shall not defeat the right of average input costs rising at the fastest pace the income-tax department to take in seven years. Input inflation has solidly appropriate recourse for recovering increased last year. the existing or previous liability of Survey respondents mostly attributed the transferor company,” it had said higher cost burdens to rising beauty prod- in the order. The appellate tribunal ucts, food, freight, fuel, and maintenance. quoted the Supreme Court order in “Firms mostly absorbed the added cost bur- the Vodafone-Essar case, where it dens themselves instead of fully passing stated, “We are not inclined to enter- these on to their customers. This may trans- SOLUTION TO #2965 Very easy: tain the special leave petitions… I-T late into quicker increases in selling prices  is entitled to take out appropriate in the months to come, which may curb Solution proceedings for recovery of any tax sales. Firms could also choose to restrict tomorrow statutorily due from the transferor hiring in order to protect profit margins,” or the transferee company or any said Pollyanna De Lima, principal econo- HOW TO PLAY other person who is liable for pay- mist at IHS Markit and author of the report. Fill in the grid so ment of such due,” the NCLAT said. However, average prices charged for serv- that every row, ices increased less dramatically. Charge every column inflation was the strongest since February and every 3x3 BS award... 2018. December saw the current run of infla- box contains tion to 36 months. This meant that the gap the digits 1 to 9 The jury consists of the who’s who between rates of input cost and output of India Inc. Besides running the charge inflation still hasn’t closed. 18 AUTO EXPO 2020 MUMBAI | THURSDAY, 6 FEBRUARY 2020 > .

ON THE SIDELINES WORLD CAR AWARDS MAKE A PIT STOP AT THE EXPO Hyundai Sonata, Land Rover Range Rover Evoque and Mercedes- Benz CLA are among the top 10 cars competing this year for the coveted World Car Awards.The World Car Finals countdown officially began on Wednesday at the Auto Expo in Greater Noida with the announcement of the top 10 and top five finalists for five World Car Awards categories. The 2020 World Car of the Year winner will be selected from 10 finalists chosen from an initial list of 29 contenders. Kia Soul EV, Kia Telluride, Mazda3, Mazda CX-30, Mercedes-Benz GLB, Volkswagen Golf and Volkswagen T-Cross are the other finalists for World Car of the Year. “The Indian car market is already the fourth largest in the world, and projected to become third largest by 2022. India is therefore a crucial contributor to our annual process...,” Siddharth Vinayak Patankar, juror and director of the World Car Awards programme said. PTI

Tata Motors plans exclusive outlets MG Motor India on Wednesday unveiled its futuristic concept car Marvel X — the Tata Motors showcased electric concept of its Sierra SUV. The homegrown automaker for EV portfolio world's first mass-production vehicle to achieve Level-3 Intelligent Driving also displayed the HBX and the Hexa Safari edition PHOTOS: SANJAY K SHARMA Tata Motors is actively looking to set up exclusive outlets for its electric vehicle EV demand may (EV) portfolio but has not yet taken a final call over the Slowdown plays spoilsport at Expo not grow in next issue, a top company 2 fiscals: Goenka official said on Wednesday. The homegrown auto Number of launches falls; luxury and supercar brands give the largest auto show of the country a miss Growth in electric vehicles major recently ventured into THE NEW (EV) demand is unlikely to the personal electric ARINDAM MAJUDMER largest two-wheeler manufactur- 2018 to 30 this year. The count of After the successful debut by Chandrasekaran, adding four more reach a significant level for mobility space with the LAUNCHES & SHALLY SETH MOHILE er in the world. exhibitors, including technology China-owned British automaker EVs will be launched in two years. major players at least in the launch of the electric version TATA MOTORS Greater Noida, 5 February companies, has come down from MG Motor’s Hector sport utility “The displays by the new play- next two fiscal years, and in of its most-selling compact Sierra EV, Hexa However, none of the country’s 119 to 112. Showstopper luxury and vehicle (SUV), China’s largest SUV ers Kia, MG, and Great Wall were personal electric mobility Sedan Nexon recently. Safari edition, t the 15th edition of the major two-wheeler producers par- supercar brands, including Toyota, and pick-up maker Great Wall quite striking,” said Jnaneswar Sen, segment it may take even Besides, the carmaker also Harrier SUV AutoExpo that kick-start- ticipated in what is Asia’s biggest Jeep, Lamborghini, Porsche, and Motors showcased its Haval partner at consulting firm, Maven longer, M&M Managing plans to roll out four more A ed on Wednesday, the automobile exhibition. Volvo, were missing. crossover. Its compatriots First Partners. Director Pawan Goenka said electric models in the next MAHINDRA & mood was sombre and the decibel Such contradictions hung Commercial vehicle makers Automobile Works or Haima, The real test will be after the on Wednesday. PTI two years. PTI MAHINDRA levels of new launches muted, heavy on the auto show as the also gave the show a miss — a pro- Changan, and BYD will also dis- show opens to the general public. eKUV, compared to the previous editions. pall of a prolonged slowdown and longed economic slowdown has play their line-ups. According to Sen, people in India Atom EV They reflected the prolonged slow- fear of a viral outbreak loomed dented their fortunes and dimmed Even as the displays by Chinese still aspire to own a car, and a show Jio showcases connected vehicle down that has gripped India’s auto- large on the world’s second- chances of any recovery. companies took centre stage, like this adds to the excitement. MARUTI SUZUKI mobile market for the past one and largest auto show. Globally, auto shows are losing home-grown automakers Tata Notwithstanding India’s slug- solutions at the auto show Electric vehicle a half years. “Start of the decade has been sheen as high cost of participation Motors and Mahindra & Mahindra gishness to push battery-powered Telecom major Reliance Jio is showcasing its connected concept Future-e The absence of various manu- muted due to high transition cost deters automakers from big par- (M&M) turned up the decibel levels transport and dearth of infra- vehicle solutions that can help users get insights into vehicle facturers from the show was com- and low demand. However, I am ticipation; they instead have their by showcasing a raft of new mod- structure like charging stations, performance and other metrics at the Auto Expo. The solutions HYUNDAI pensated by the Chinese automak- convinced this decade will take us own periodic launches. However, els, primarily their electric vehicle the EV rush is still charged up. The include components like hardware, connectivity and platform, Tucson SUV ers, including MG Motor, Great to new heights,” Kenichi Ayukawa, Ayukawa of Maruti said that a (EV) portfolio. Tata Motors show- government, however, is looking which will allow scaling based on user-requirement as well as Great Wall Wall Motors, and FAW Group managing director and chief exec- country like India, where car own- cased the Sierra EV Concept, while to boost adoption by taxing EVs at security of the data involved. The telecom major is said to be in Motors Corporation — they unveiled their utive officer of India’s largest car- ership is still low, such shows help M&M launched the eKUV100. a lower rate. It also launched the discussions with vehicle manufacturers and fleet management Haval brand future line-up for the Indian maker Maruti Suzuki, summed up revive the market. “At this Auto Expo, we are second phase of a scheme to companies for installation of these solutions. Reliance Jio, Smarket. the mood. Maruti had the day’s The theme for this year’s show showing products which showcase increase the share of EVs in shared however, declined to comment. The platform allows users in MG Motors A banner outside the venue at first unveiling. was electric mobility as most our responsibility and emphasis mobility to curb pollution in a multiple areas like route management, vehicle telematics and MarvelX SUV Greater Noida’s Global Expo Mart The number of participating launches were geared towards that, on sustainability and cleanliness,” nation that has cities with the diagnostics. PTI proudly proclaimed India as the automakers has fallen from 50 in led by Chinese auto majors. said Group Chairman N world’s dirtiest air.

CONCEPT OF FUTURE PHOTOS: SANJAY K SHARMA Virus scare may hit 1 2 China carmakers’ India investments

ARINDAM MAJUMDER & SHALLY SETH MOHILE New Delhi/Mumbai, 5 February

As China struggles to contain the Wuhan-centred coronavirus outbreak, the resulting shutdown of factories and logistics hubs in the country is slowly constricting the business of Chinese auto majors, which have recently entered India. The consequent pressure on supply chain, in which most Chinese companies depend on the Indian market, is likely to lead to delayed deliveries for some and postpone launches for others. “It’s an unfortunate development. Since we are dependent on China for supply of major components, we will be impacted for a while. So, deliveries for our MG Hector in February will be delayed. We have relayed that to our cus- tomers,” Gaurav Gupta, chief commercial officer at MG Motors told Business Standard. 4 The firm — a unit of SAIC Motor Corp — had launched the mid-sized SUV, Hector, in June. Soon, it overtook most com- petitors with retail sales of more than 3,000 units per month. The government of China-owned Haima Automobile, which has planned an India launch of its first electric vehicle 1. Hyundai Le Fil Rouge by 2021, said it is gauging the impact of the viral outbreak on 3 (HDC- 1) concept car its strategic plan. “Since we will be importing a completely- 2. KIA Motors’ concept Sonet. knocked-down version of the vehicle, we may expect some Kia Sonet will be launched disruption due to closure of many supply chain points. in the Indian market in the However, as of now, there is no second half of 2020 change of plan,” said a senior execu- 3. Mahindra Funster EV Delivery and tive of Bird Electric with which the concept. With a top speed of launches may be firm has partnered for its India foray. 200 kmph, it clocks 0 to delayed as most The auto maker, on Wednesday, 100 kmph in 5 seconds firms depend showcased two of its globally most 4. Personal mobility is on China for successful passenger vehicles – 7X and the future: Anshuman sourcing 8S – at the Auto Expo 2020. It is yet to Singhania (R), deputy materials firm up its investment plan for India. MD of JK Tyre, and The outbreak of the deadly disease Ankur Bhatia, MD of is also likely to hit plans of Great Wall Bird Electric, on Motors, which had entailed an investment of $ 1 billion for

PHOTO: PTI PHOTO: PTI hoverboard scooters the Indian market, said Kaushik Ganguly, director strategy and planning of the company. Great Wall plans to enter the Indian market by bringing premium SUVs under the Haval brand in the next calendar year. The company announced its India entry plans with the acquisition of General Motors’ Talegaon plant last month. It ‘Will take a call on diesel after six months’ is presently in talks with various suppliers in China and India to firm up a sourcing strategy. Maruti Suzuki India (MSI), which sells every second car in the market, took a call to March are going to be very tough After years of giving free passes to counterparts from exit the diesel segment last year. The carmaker has instead chosen to bet big on due to the transition from BS-IV to Korea, Japan, US in the Indian auto market, Chinese compressed natural gas (CNG). Over the past decade, the maker of Brezza and BS-VI. The grade VI diesel is still not automakers had planned a major push to grab the fifth Baleno has sold close to 520,000 CNG models. In an interview, KENICHI AYUKAWA, available. We will have to see how largest car market in the world. SAIC Motor Corp, Great Wall managing director (MD) and chief executive officer (CEO) of MSI, tells SHALLY SETH things pan out from April onwards. and FAW have unveiled cars packed with technologies, MOHILE and ARINDAM MAJUMDER that the company will take a call on diesel Typically, demand picks up during including artificial intelligence and Internet of Things. vehicles after seeing the response of the recently launched models by rivals. PHOTO: SANJAY K SHARMA the festive season. We hope to see According to the company’s president, Rajeeb Chaba, it Edited excerpts: the trend even this year. has planned an investment of ~5,000 crore in India till 2021. GWM unveiled the Haval brand of SUVs and vehicle con- You have exited the Aren’t you giving away cept 2025 to mark its presence in the Indian market. The diesel segment, while a big chunk of the “FEBRUARYAND MARCH ARE GOING company unveiled four SUVs at the event which includes others are going ahead market? Haval H9, Haval F7X, Haval F7 and Haval F5. with their BS-VI diesel We will try to capture TO BE VERYTOUGH DUE TO THE However, it’s not only Chinese firms whose operations model launch plans. Are the other portion. We will TRANSITION FROM BS-IV TO BS-VI” have been hit due to outbreak of the disease. Global carmak- you re-thinking diesel KENICHI AYUKAWA take a call (on bringing ers with a sourcing network that expands across various con- strategy? managing director, diesel models) after six tinents, too, are worried. “Cornavirus will have an impact on The diesel models are Maruti Suzuki India months. It has to be a How do you see the partnership commercial production as everything in China is closed. It’s not affordable any more. long-term strategy. May with Toyota panning out? too early to predict the impact it will have on our global sup- Other players have be some regulations Now, we are supplying one mod- ply chain,” said Matthias Leuhrs, head region, overseas, at launched various models at a com- change after two years. We have to el — the Baleno. We will add more Mercedes Benz. Mercedes sold a record 690,000 cars in petitive price. We have to see the decide the powertrain options in a models. We will start developing China last year, a 5 per cent growth year-on-year, he said. response. We will take a call on phased manner, systematically. line-up? bustion engine (ICE). models for markets outside India. Hyundai has suspended production in South Korea — its whether we develop it further. It will take time. It is a concept They have a strong knowledge for biggest manufacturing base. SS Kim, managing director of When do we see the concept design that will underpin various When do you see the tide turning hybrids, so we will collaborate and Hyundai Motor India told Business Standard that his com- Hyundai is projecting itself as the Futuro-e that you unveiled today models of the future and can be used for the auto industry? produce more models that can be pany has been in talks with suppliers in the global sourcing sole manufacturer of diesel cars. (Wednesday) defining your future for hybrid, electric or internal com- The months of February and sold by both the companies. network to take stock of the situation. 20 MUMBAI | THURSDAY, 6 FEBRUARY 2020 1 > WAR AND TEAR

A bitter feud between US President Donald Trump and Democrat Nancy Pelosi boiled over at his State of the Union speech, with Trump denying her a handshake and Pelosi ripping apart a copy of his remarks behind his back PHOTOS: AGENCIES State of the Union tension PRESS TRUST OF INDIA It was the first time the two had come moments of the president’s appearance Washington, 5 February face-to-face since she stormed out of a at the Capitol before the Senate is expect- White House meeting four months ago. ed to acquit him on Wednesday in his n a dramatic gesture, Nancy Pelosi On Tuesday night, the sour dynamic impeachment trial, The Times noted. publicly tore up her copy of Donald was on display to all from the start, The When the president accused the I Trump’s annual State of the Union New York Times noted. Democrats of planning to force American address, signalling the worsening rela- The tensions over impeachment taxpayers to provide unlimited free health tionship between the House Speaker and appeared to surface early on, however, care to undocumented immigrants, Pelosi the US President. as Pelosi refused to introduce Trump by was observed twice mouthing: “Not true.” Pelosi has been one of Trump’s fiercest saying it was her “distinct honour” and Pelosi repeatedly shook her head during critics and the top Democrat was the one “high privilege” to do so, as is tradition. Trump's 78-minute speech which also saw who first launched a formal impeachment Instead, she simply introduced him as Republican lawmakers chanting, “Four process in the House of Representatives the President of the United States, Fox more years!” The veteran Democrat, the against the president last year. Trump has News reported. first woman in US history to hold the post frequently taunted the 79-year-old law- When the 73-year-old Republican pres- of the Speaker, stuck to it until the very end maker as “Crazy Nancy”. ident stepped up to the rostrum in the of Trump's address and then she stood up, The mutual snubbing began the House of Representatives and handed her picked up her copy of his speech and tore moment Trump, seeking re-election, his speech, Pelosi rose and extended her it neatly in half. walked into the House chamber on hand to shake his. “It was a dramatic gesture, caught on Tuesday night for his third State of the Trump turned his back, and Pelosi camera, that encapsulated a tumultuous Union address, in which he touted his quickly withdrew her hand. year in the relationship between the speak- administration’s achievements during The interaction between Trump and er and the president,” The Washington the past three years. Pelosi was one of the most anticipated Post commented.

INDIA RANK Wipro out GIPC’S INTERNATIONAL IP INDEX 36/50 40/53 of top 20 on INDIA IMPROVES SCORE, RANKS 40th countries in in 2020 m-cap basis AMONG 53 COUNTRIES 2019 (7th (8th edition) edition) IT major Wipro on Wednesday moved out of the list of top 20 most valued 6.71% companies by market capi- India’s relative score increased talisation, giving way to India’s absolute score increased from Avenue Supermarts, which 36.04% (16.22 out of 45) in the seventh runs the D-Mart supermar- edition of the Index to 38.46% (19.23 out of 50) in the latest edition kets chain. At close of trade, the mar- WHERE INDIA SCORED ket capitalisation (m-cap) of Avenue was at ~1.41 trillion, | Strong efforts to combat which was ~2,777 crore more copyright piracy through than that of Wipro’s ~1.38 tril- India improved its score in the latest edition of the issuing of “dynamic” lion valuation on the BSE. International IP Index, while its position dropped injunction orders Reliance Industries is the from 36 in 2019 to 40 in 2020. India scored 38.46% in country’s most valued firm 2020, as against 36.04% in last year’s edition. This | Setting case law on online with a m-cap of ~9.17 trillion, year’s annual IP Index, brought out by the US Chamber trademark infringement followed by TCS at ~8.04 tril- of Commerce Global Innovation Policy Center (GIPC), and damages lion. The m-cap figures of included 53 countries, against 50 in 2019. The report | Generous R&D-based and firms change daily with stock price movement. PTI noted that “to continue this upward trajectory, much IP-based incentives work remains to be done to introduce transformative changes to India’s overall IP framework and take | Targeted administrative serious steps to consistently implement strong IP incentives for the standards”. Commenting on India’s performance, creation and use of IP Patrick Kilbride, senior vice-president of GIPC, said: “As assets for SMEs the US and India look to conclude a trade deal in the | Strong awareness-raising coming weeks, we hope it will pave the way for efforts on negative impact of innovation-focused partnerships.” piracy and counterfeiting WHERE INDIA LAGS | Barriers to licensing and technology biopharmaceuticals transfer, including strict registration | Lengthy pre-grant opposition requirements proceedings | Limited framework for protection of | Previously used compulsory licensing biopharmaceutical IP rights for commercial and non-emergency | Patentability requirements outside situations international standards | Limited participation in international | No patent term restoration for treaties

Sources: International IP Index, Art of the Possible Compiled by Sudipto Dey

RS committee says surrogate mother need not be relative

A Parliamentary panel has recommended that not only close relatives but any woman who is “willing” should be allowed to act as a surrogate. The 15 major changes sug- gested by the 23-member select committee of Rajya Sabha to the Surrogacy (Regulation) Bill, 2019, also include deleting the definition of ‘infertility’ as the inability to conceive after five years of unprotected intercourse on the ground that it was too long a period for a couple to wait for a child. The committee has also advocated that ‘single Indian woman’ like a widow or a divorcee in the age group of 35 to 45 years may also be allowed to avail surrogacy. Noting that restricting the surrogate mother to be a ‘close relative’ potentially limits the availability, affecting the gen- uinely needy persons, the panel has recommended removal of this requirement from the Bill. PTI QUICK TAKE: BETTER OUTLOOK FOR BAJAJ ELECTRICALS “Tesla now valued at $160 bn. In a month, Tesla has added market cap that The Smart The Bajaj Electricals stock gained 3 per cent on is more than the total market Wednesday. Besides bullish market sentiment, cap of India’s auto sector, robust show by the consumer products business including 2-wheelers, private MUMBAI | in Q3 and reduction in debt led to the gains. Its and commercial vehicles'' THURSDAY, 6 FEBRUARY 2020 plan to cut debt further should support SUNIL SINGHANIA, Investor near-term profitability and cash flows Founder, Abbakus Asset Manager WWW.SMARTINVESTOR.IN FOR INFORMED DECISION MAKING < Two barred DMart set to raise Sebi tightens DRHP framework for insider trading in IVL ~4,000 cr via QIP Companies under UNDER SCANNER | For firms under conduct IPO SAMIE MODAK investigation for Mumbai, 5 February AVENUE SUPERMARTS investigation, | IPOs of HDFC Asset BSE Price in ~ possible violations observations on draft Management, RBL Avenue Supermarts has 2,300 could face delays offer may be kept in Bank were kept in launched its qualified insti- 2,249.30 abeyance for 30 days abeyance because tutional placement (QIP) pro- 2,100 from filing of papers of past violations gramme to raise at least ASHLEY COUTINHO ~4,000 crore. 1,827.00 | Could be extended by 1,900 Mumbai, 5 February further 30 days if | Experts say new set The country’s most valu- of guidelines will able listed retail chain will he Securites and Exchange regulator is unable to The Securities and Exchange issue 20 million fresh shares 1,700 conclude its probe provide clarity to Jan 1,’20 Feb 5,’20 Board of India (Sebi) on issuers and Board of India (Sebi) on at a base price of ~1,999. Wednesday set rules under Wednesday barred Avenue Supermarts’ board T | Issuance of investment bankers, which it could hold back approvals for observations by Sebi Indiabulls Ventures’ (IVL) will meet on February 10 to proposed share sales by companies and help time non-executive director Pia approve the QIP price. is akin to getting their listings that are under investigation for possi- green light to Johnson and her husband Shares of the company ble violations. accordingly Mehul Johnson from access- rose 4.35 per cent to close at The capital markets regulator has ing the capital markets for a ~2,249 on Wednesday. The said that for current investigations, period of one year. company is currently valued “observations” on the draft offer may er regulatory action is pending, the observations after advising the entities observation will be subject to the orders Further, the two individ- at ~1.41 trillion and is among be kept in abeyance for 30 days from Sebi chairman said in a general order. to make necessary disclosures and of such court or tribunal. uals have also been barred top 20 most valued firms in filing of the draft offer. If Sebi is unable For show cause notices pertaining statements in the offer document. The issuance of observations on the from dealing in shares of IVL the country. to conclude its investigation, the doc- to fraudulent and unfair trading, the Under the erstwhile regulations, the draft offer document, when an inves- for a period of three years. The QIP will help promot- ument may be kept in abeyance for a period of abeyance could period was 90 days. tigation or enquiry is pending, does In addition, the markets ers of the company, led by further 30 days. If the delay is on be extended up to 90 days. For show cause Where the regulator has not indicate that the party has been regulator said that the ~87 Radhakishan Damani, pare account of conduct of the entities If the regulator is unable to notices pertaining initiated proceedings for exonerated in such proceedings, the lakh it had impounded, their holdings, which current- bankers said could be done under investigation, the document conclude its proceedings to fraudulent and recovery against the enti- regulator clarified. belonging to the two individ- ly stands at 79.73 per cent. through the offer for sale may be kept in abeyance till such time because of reasons beyond unfair trading, the ties, or when an order for There have been instances when a uals, stands disgorged and Holding in the DMart (OFS) route. the enquiry is concluded. its control or due to con- period of abeyance disgorgement or monetary share sale has been kept in abeyance would be remitted to the retail chain operator has to For the quarter ended Issuance of observations regarding duct of parties other than could be extended penalty passed against the owing to past violations. Share sales of Investor Protection and reduce to below 75 per cent December 2019, Avenue the offer documents by Sebi is akin to the entities, this period up to 90 days entities has not been com- HDFC Asset Management and RBL Education Fund. by March 20, to meet the min- Supermarts had reported a 53 getting the green light to conduct the could be stretched by plied with, observations Bank were kept in abeyance because The case date backs to imum public shareholding per cent year-on-year jump share sale. The rules apply to issuers another 45 days. can be kept in abeyance till of this reason. 2017, when Pia Johnson and requirement. in net profit to ~394 crore, sur- or promoters, directors, and group If the show cause notice has been the conclusion of such proceedings. In Experts said the new set of guide- Mehul Johnson had alleged- The QIP could lead to dilu- passing Street estimates. companies against whom an investi- issued to the entities in an adjudication cases where the issuer has been lines will provide clarity to the issuers ly traded in the shares of tion in promoters’ stakes by Its net sales for the period gation, enquiry, adjudication, prose- proceeding, the regulator may process restrained by a court or tribunal from and investment bankers, and help time Indiabulls Ventures while 2.8 per cent. The promoters had increased 24 per cent to cution, disgorgement, recovery or oth- the draft offer document and issue making an issue of securities, the their listings accordingly. being privy to inside infor- could be required to dilute ~6,752 crore despite weak con- mation. SAMIE MODAK another 1.9 per cent, which sumer sentiment. MCA inspection may spoil the show for Zee RAM PRASAD SAHU ZEE ENTERTAINMENT ed that it would be able to Mumbai, 5 February recover its dues from Siti Cable BSE price in ~ over the next year, and from The Zee Entertainment stock DishTV over the next has shed close to 15 per cent 24 months. from its highs over the last two A head of research at a trading sessions. domestic brokerage indicated The sharp correction fol- that the correction over the last lowed reports that the Ministry couple of trading sessions had of Corporate Affairs (MCA) had factored in the information ordered an inspection of the related to the MCA. firm’s books on allegations of Analysts are advising corporate governance lapses investors to avoid the stock as and also because of the resig- there is no clarity on how long nations of some of its indepen- Independent directors Neharika Vohra and Subodh Kumar had the enquiry of the MCA will dent directors. quit the Zee board last year, citing multiple issues PHOTO: COMPANY Source: Exchange last, as well as on its findings. In a clarification to the Worries pertaining to a exchanges, Zee acknowledged operate with the inspection. Zee board last year, citing mul- Within this, receivables change in management con- that it had received a letter from Further, it indicated that the tiple issues including film from related parties DishTV trol, high investments in a weak the MCA, seeking information link between the enquiry and advances to the tune of over and SitiCable stood at ~750 demand environment, moneti- and inspection. The company, resignations of independent ~2,000 crore and receivables crore, of which ~350 crore was sation of content, as well as reg- however, clarified that the same directors a few months ago was from related parties. overdue. The two account for ulatory changes, are factors was available in public domain, tenuous. Independent direc- After the December quarter 27 per cent of domestic sub- expected to keep the Zee stock and also that it was collating tors Subodh Kumar and results, the firm indicated that scription revenues. under pressure over the the information and would co- Neharika Vohra had quit the receivables were at ~2,330 crore. Zee Entertainment indicat- near term.

THE COMPASS Falling raw material costs drive Apollo Tyres’ margins

Weak demand, RAM PRASAD SAHU accounts for 40 per cent of expenses. has now dipped to 20 per cent. Price decline in the raw material Demand in Europe has also been high competition Apollo Tyres recorded a better-than- basket in the current quarter is expect- weak impacting its revenues from that expected performance in the December ed to be 1.5-2.0 per cent. With volume geography. The company however has could weigh on quarter (Q3), notwithstanding pressure growth remaining a challenge, this been able to grow at a higher pace than stock in near term on the demand front. The gains came comes as a shot in the arm. the market gaining market share. in largely on the operational front, with In Q3, volumes in the domestic busi- Improving product mix with a higher margins being aided by a fall in raw ness — which account for over 60 per share of ultra-high performance tyres material costs. cent of revenues — fell 13 per cent. This should aid in revenue and margin The company posted an operating led to a decline in consolidated rev- growth. Margins in the business should profit margin of 12.1 per cent, which enues to the tune of 7 per cent. also improve as the Hungary plant was 80-120 basis points (bps) higher While volumes in the replacement scales up over the next couple of years. than what the Street had estimated. It segment continue to be strong — espe- Near term volume gains could also indicated that raw material costs fell cially in the passenger vehicles busi- come from lower imports into 3.5 per cent in the quarter — a trend ness — it is supplies to auto makers European market from China due to expected to continue this quarter. which has been weak. Volumes in the Coronavirus. While natural rubber prices have truck and passenger vehicle business While the stock gained over 4 per been steady, a fall in crude oil prices segments continue to be weak with a cent in trade post the results, the weak- should help bring down raw material decline of 35-50 per cent. Revenue con- ness in demand and higher competi- costs of derivatives such as carbon tribution from supplies to auto makers tion are expected to weigh on stock black and synthetic rubber. Rubber which is normally around 30 per cent prices in the near term. Lack of US drug approvals ails Cipla’s Q3 performance

Niche product UJJVAL JAUHARI their good show. The South Africa private business grew launches key to Cipla’s lower-than-expected by 20 per cent YoY in constant performance for the December currency terms in Q3. boost sales in quarter (third quarter, or Q3) In the near-term, if Cipla’s North America disappointed investors. Its offering to cure the coron- stock, which has already lost avirus is accepted by the World more than 7 per cent since Health Organization and oth- mid-January, fell another 0.4 ers, it could also provide fresh per cent on Wednesday, even triggers. But, for the US busi- as the broader markets ended revenue), though up 14 per The company made some ness, the launch of significant- on a bullish note. cent YoY, were still down by a adjustments for overhead ly larger products is crucial. While the Indian market, per cent sequentially. While charges on finished goods The company expects the US which contributes about 40 the absence of stimulus from inventory in Q3. However, base business to maintain per cent to Cipla’s overall rev- sales of thyroid drug Sensipar even adjusted for the same, its quarterly revenue run-rate of enue, is now seeing nor- generics on exclusivity basis margins stood at 18.5 per cent $120-$130 million. malised growth with rebound has impacted US growth, ana- — lower than analysts’ expec- Hence, niche product in trade generics segment fol- lysts also point to the limited tations. Analysts at Motilal launches would be required to lowing a restructuring of the number of new product Oswal Securities, for instance, boost sales. While Cipla business, it reported flat num- launches which are impacting had pegged margins at 19.2 expects limited competition bers on a sequential basis. the revenue of North per cent. Net profit at ~351 launches to start by the end of On a year-on-year (YoY) American operations. crore, too, was short of the 2019-20, the Street will be basis, however, domestic sales Overall, Cipla’s revenue at estimated ~431 crore. watchful of its progress. On this grew 13 per cent, led by 14 per ~4,234 crore was marginally Moving forward, while front, the progress on the cent growth in prescription lower on a sequential basis Cipla’s India business is launch of respiratory products business, and trade generics and up a mere 8.4 per cent expected to see better trac- like Albuterol and Advair grew by 7 per cent. YoY. It fell short of the tion, other important geogra- generics, and pain relief drug North American sales Bloomberg consensus esti- phies, such as South Africa, Tramadol generics, hold key (slightly more than a fifth of mate of ~4,366 crore. are also expected to sustain for the company’s US business. 2 THE SMART INVESTOR MUMBAI | THURSDAY, 6 FEBRUARY 2020 > l Financial sector: Subsidiaries in focus IRCTC: Dalal While lack of clarity on outlook of insurance has weighed on valuations, income needs to be watched Street’s new SHREEPAD S AUTE by borrowing funds, which was lucra- Mumbai, 5 February SIZEABLE SHARE OF HOME LOANS tive earlier.” Home loan exposure (%) This becomes a concern, given bullet train ot long ago, even as the core n Share of retail loans in total loans many banks have already started scal- business of financial con- n Home loans as % of retail loans ing up their retail loan portfolio. Since Stock surges 50% in a fortnight N glomerates such as Housing March 2019, shares of SBI and ICICI Development Finance Corporation 100 Bank’s retail loans in their overall loan (HDFC), State Bank of India (SBI), and 76 book has gone up by 300-400 basis ICICI Bank was doing well, the Street points to 61-63 per cent as of December had turned increasingly bullish on 2019. Retail home loans account for 76 VALUATION MIX 63 their subsidiaries, and pondering how Contribution (%) 61 per cent of HDFC’s loan book. There their contribution would boost the could be an impact on their fee n Core business n Insurance arms n Others* 49 overall valuation of their parents. (Figures in brackets SOTP value in ~/share) income, too, as these lenders also earn While some Budget proposals may 11 (75) some income from cross-selling insur- have cast a shadow of scepticism in 34 (144) 38 14 (94) 36 ance and other investment products, (1,029) 78 terms of the future performance of (531) say analysts. Gandhi, thus, believes subsidiaries/other businesses and that strong core performance of these their ability to contribute to their par- SBI HDFC ICICI financiers would be key for their valu- ent’s stock valuation, the jury is out on ation, even if the contribution from this. Among key announcements of 54 other businesses fall marginally. the Budget is removal of tax exemp- 15 (1,464) Positively, analysts also say that life (64) tions, including on home loans and 69 (292) 16 (423) State Bank of India HDFC ICICI Bank insurance is now being considered *Includes other business such as mutual funds, bank (for HDFC), cards, etc; insurance premiums, under the pro- SOTP: Sum of the parts Source: JM Financial more as a protection product rather CATCHING INVESTORS’ FANCY posed new income-tax regime. than a savings option and believe that Month Market cap (~ cr) Ranking* Given the potential impact for on the quantum of long-term impact even if their insurance business sees ment. Some tweaks though may be life insurance penetration would insurance companies, some analysts on insurers. Besides, these players some disturbances,” adds Aggarwal. necessary on growth expectations. improve further. In that case, if insur- October 2019 5,120** 56 have started reducing their target would also have some time to rework Wide distribution franchise, scope Under the proposed new tax regime, ers are able to drive their high-margin January 2020 15,723 31 prices for listed life insurers. This, in their business strategies. for efficiency enhancement, and likely exemptions for interest paid on home protection offerings, it could help the turn, could have implications on stock Nitin Aggarwal, analyst at Motilal improvement in overall credit costs loans has also been excluded, which growth top line as well as profits. February 2020 24,145 23 valuation of finance majors, as roughly Oswal Securities, for instance, esti- are some other factors suggesting that could hurt the retail loan book growth Likewise, individuals are also focus- Note: *For most-valued PSUs in terms of market value; **At IPO price; Source: Capitaline 14-16 per cent of their valuation, based mates a marginal impact on valuations the core business performance of of lenders. ing on securing products, such as on sum of the parts, is contributed by of the insurers’ parent companies due these financiers would remain strong. According to Kajal Gandhi, analyst health insurance, to protect their fam- their insurance businesses (see table), to the new tax regime. “If these lenders In fact, after the December 2019 quar- at ICICI Securities, “Though it is diffi- ilies from adverse medical situations, SAMIE MODAK IRCTC made its stock according to brokerage estimates. (parent companies) continue to report ter results, the Street was looking at cult to assess the impact on home buy- rather than as a tool to save taxes. Mumbai, 5 February market debut in October last Having said that, investors need strong operating performance, their corporate banks like SBI positively, ing due to removal of 80C tax exemp- year. Shares of the company not be alarmed as clarity is required valuation would get good support, mainly due to asset quality improve- tion, it disincentivises home buying More on business-standard.com Gravity-defying rally in were priced at ~320 in the shares of Indian Railway IPO. The stock had soared Catering and Tourism 2.3x on listing day itself, Corporation (IRCTC) has breaking the record for the helped the railway ticketing highest gain on debut. ITI withdraws FPO as PMI, global cues lift indices company climb the league The latest jump in shares table for the most-valued of IRCTC comes a week SUNDAR SETHURAMAN INVESTOR OPTIMISM public sector undertaking ahead of its December quar- Mumbai, 5 February (PSU). ter result announcement. poor demand weighs 12,200 In the past 10 trading ses- Market players say The benchmark indices rose 12,089 sions, shares of the state- investors need to be cau- SUNDAR SETHURAMAN Investment Services were the on Wednesday mirroring 12,000 owned company have shot tious, as the company’s val- Mumbai, 5 February investment bankers to the FPO. gains in the global markets 11,662 up more than 50 per cent. uations have reached lofty In the past, government- after news of a breakthrough 11,800 Currently, IRCTC ranks 23 in levels. At the current market Poor response has prompted owned entities such as Life in coronavirus vaccine and terms of the most-valued rate, the stock is valued at ITI to withdraw its ~1,300-crore Insurance Corporation (LIC) optimism over positive eco- 11,600 PSUs, with a market capital- nearly 80x its trailing 12- follow-on public offer (FPO), a and State Bank of India (SBI) nomic data at home. Feb 1,’20 Feb 5,’20 isation (m-cap) of more than month earnings. move that is unprecedented by had bailed out PSU after a The Sensex closed at ~24,000 crore. At the time of Analysts at Prabhudas a government company. share sale. The failure of ITI’s 41,143, up 0.9 per cent, or 353 its initial public offering Lilladher believe the compa- ITI is a technology solutions FPO indicates that the govern- points, extending its three- in January from 52.7 in equities worth ~249 crore. (IPO) in October 2019, it did- ny will be able to log a com- provider to the telecom sector. ment wanted to raise funds day rally to 1,407 points, or 3.5 December. Domestic institutional n’t even feature in the top 50. pound annual profit growth While the FPO wasn’t part supported by organic demand, per cent. The Nifty rose 110 Analysts said underlying investors were net buyers to Currently, it is valued rate of a whopping 49 per of the government’s disinvest- said bankers. Analysts said points, or 0.94 per cent, to growth dynamics for the the tune of ~263 crore. more than other marquee cent between 2018-19 and ment programme, it under- steep pricing and uncertain close at 12,089. economy appeared to be bot- Some believe the markets PSUs, such as The New India 2021-22 (FY22). According to scores the challenges when it business outlook could have Most equity markets ral- toming out with some high- could benefit from the out- Assurance Company, Bharat the brokerage, the stock is comes to diluting stakes in band was lowe r ed to ~71-~77 per hurt investor demand. lied by over a per cent on frequency indicators showing break of Coronavirus, which Electronics, Oil India, and valued at a reasonable level public sector undertakings that share from ea rlier band of ~72- “Besides the pricing, hopes that the impact of the positive trends. has hit economic activity in Bharat Heavy Electricals. of 20x and 18x its projected are not in the limelight. ~77 per share. investors were concerned coronavirus on the global “Rural consumption is on regional peers such as China In the past fortnight, earnings estimate for 2020- “The company has decided Shares of ITI rose nearly 5 over the drop in profitability economy won’t be as severe the way to recovery, given the and Southeast Asia. IRCTC has seen its m-cap 21 and FY22, respectively. to withdraw the issue, due to per cent to end at ~84 on of the company in the last as anticipated. Moreover, increase in food inflation, Brent crude hit a 52-week swell by over ~10,000 crore “IRCTC is a monopolistic the prevailing market condi- Wednesday as the share sale financial year and the busi- news reports suggested scien- improving farm economics low on Tuesday at $53 per bar- — more than the combined entity authorised to provide tions,” ITI said in a statement. overhang ended. Through the ness outlook falling. Most of tist in the UK made a signifi- and high reservoir levels. rel. Though prices rose nearly market value of the bottom packaged drinking water, The FPO had garnered only 62 FPO, ITI was looking to issue ITI’s business comes from cant breakthrough in the race Moreover, monthly auto 3 per cent on Wednesday, they 20 listed PSUs. catering, and online ticket per cent subscription, data pro- 181.8 million fresh shares. The state-owned telecom compa- to develop a vaccine. numbers are showing stabili- were still 18 per cent below On Wednesday, shares of booking services to passen- vided by stock exchanges issue would have led to dilu- nies which aren’t in great Market players also ty. Select sectors with better early 2020 levels. Experts say IRCTC closed at ~1,509, up gers travelling by Indian showed. ITI had extended the tion of 20 per cent, weighing shape,” said an analyst. rejoiced positive domestic earnings visibility will contin- markets are keenly eyeing 6.8 per cent over the previ- Railways. It has a dominant closing date twice and also had on the secondary market price. ITI was looking to utilise the economic data, as the services ue enjoying valuation premi- Thursday’s RBI monetary pol- ous day’s close and 52 per position in online rail book- lowered the price band to The government holds 90 FPO proceeds to retire debt Purchasing Managers’ Index um over the broader markets,” icy meeting. cent over its January 23 close ings and packaged drinking attract investors. The FPO, was per cent stake in the company. and fund its working capital. (PMI), released Wednesday, said a note by Motilal Oswal. While the RBI is expected of ~995. water. Being a regulated to originally close on January ITI is valued at ~7,550 crore, Analysts said ITI will have rose to a seven-year high at Foreign portfolio investors to keep rates unchanged, The rally would be music monopoly acts a strong moat 28. The closi n g date was first currently. to look for other means of 55.5 in January. Earlier, the (FPIs) were net buyers for the investors will take cues on to the ears of the govern- and limits competitive extended to Jan uary 31 and lat- BOB Capital Markets, Karvy fundraising, such as private manufacturing PMI had shot second consecutive day on economic growth and infla- ment, which holds 87.4 per risks,” said the brokerage in er to Febr u ary 5. The price Investor Services and PNB placement. up to an eight-year high at 55.3 Wednesday. They bought tion projections. cent stake in the company. a note. COMMODITIES > eNWR, eNAM integration Dairy sector hopes to attract ~60K cr in 5 yrs

DILIP KUMAR JHA Mumbai area, setting aside ~200 crore set to conclude in 2 mths Mumbai, 5 February for the proposed expansion. “We recent- ly launched the Nandini brand of RAJESH BHAYANI The country’s dairy sector hopes to see cheese to institutional buyers like Mumbai, 5 February up to ~60,000 crore of new investment hotels, restaurants and other bulk con- and creation of 10 million jobs in five sumers in Maharashtra. We have started > ntegration of Negotiable years, in the wake of the Union Budget looking for sites near Mumbai (for a PRICE CARD Warehousing Receipts (eNWR) with proposals. milk processing unit) to support supply I the Electronic National Agriculture The finance minister had of our Nandini brand, of milk and pro- Market or eNAM, as announced by the announced a target of doubling the cessed products, from local sources. As on Feb 5 International Domestic finance minister in her Union Budget annual milk processing capacity to 106 Currently, we supply milk and its ------Price %Chg# Price %Chg# speech on Saturday, is expected to be million tonnes, from the existing 53 mil- derivatives from Karnataka to con- complete in one or two months. lion tonnes (or from 140 million litres a sumers in Maharashtra,” said B C METALS ($/tonne) Warehouse receipts are issued by day to 300 million) in five years. Sateesh, managing director. Aluminium 1,687.0 -7.0 2,021.9 6.7 repositories, which keep electronic “To process this massive capacity, The Centre has also proposed the records of goods deposited and sub- the industry requires between ~20 and setting up of a national cold supply Copper 5,652.0 -3.9 6,304.4 2.9 sequent transfers, the way deposito- 40 crore investment for every 100,000 chain for perishables and to eliminate Zinc 2,217.5 -14.5 2,471.2 -11.3 ries operate in the capital market. litres of processing. Thus, the sector foot and mouth disease in cattle. Receipts for warehoused goods now would attract a fresh investment of at Coverage of artificial insemination is Gold ($/ounce) 1,553.7* 4.7 1,749.0 3.1 can also be negotiable and, hence, least ~60,000 crore. As every 100,000 proposed to be increased from the pre- Silver ($/ounce) 17.6* 0.1 19.9 -2.9 tradeable. Central Depository Services litres of milk production creates 6,000 sent 30 per cent to 70 per cent. Also, has set up a CDSL Commodity THE IMPLICATIONS sidering doing so. new jobs, the sector will see 10 million fodder farms and to link farming of ENERGY Repository which has completed the The eNAM is a national networked new jobs by 2025,” said R S Sodhi, man- grass to the rural employment guaran- integration mentioned earlier and | eNAM, department of economic platform connecting mandis or aging director, Gujarat Cooperative Milk tee scheme. “FMD reduces milk pro- Crude Oil ($/bbl) 54.6* -13.4 58.0 -6.4 begun issue of eNWRs for goods trad- affairs, agriculture ministry, and two APMCs electronically, for helping Marketing Federation, holder of the duction capacity by at least 25 per cent Natural Gas ($/mmBtu) 1.8* -35.7 1.8 -35.9 ed on eNAM. repositories discussing integration farmers to realise the highest price Amul brand. in animals. So, eliminating it would Another repository, the NERL, set | One repository integrated with for produce in the state from where The Karnataka Milk Federation automatically increase India’s milk pro- AGRI COMMODITIES ($/tonne) up by the National Commodities and he is selling. In physical mandis, (‘Nandini’ brand) has begun examining duction by 25 per cent,” said Devendra network; another in advance stage Wheat 196.1 8.6 291.4 -5.0 Derivatives Exchange, is in the process farmers get the prevailing price there, the potential for a processing unit in the Shah, chairman, Parag Milk Foods. of integration. Kedar Deshpande, the | States have to notify regulated where he has brought the produce. Maize 186.5* 7.3 267.8 -7.2 former's chief executive, said: "Doing warehouses as APMCs The eNAM connects all mandis in THE MILKY WAY Sugar 415.5* 19.5 490.3 -0.7 so will help farmers participate in auc- | AP, Telangana already notified the state and all states in a national Production and per capita availability in India tions by storing quality produce in reg- 40 warehouses as mandis network. Palm oil 690.0 14.5 1,151.4 19.7 istered warehouses, which will thus The Centre is in discussion with Production (mt) LHS Per capita availability (gm/day) RHS | Farmers depositing commodities in Cotton 1,501.4 6.7 1,603.2 -0.7 become market yards. This will be the market participants to promote the use 200 500 beginning of warehouse-based sales in such warehouses will get eNWR of eNWRs on eNAM platforms. A 394 * As on Feb 05, 20 1800 hrs IST, # Change Over 3 Months 375 Conversion rate 1 USD = 71.2 & 1 Ounce = 31.1032316 grams. India and would make eNAM a coun- | Farmers then can deliver such eNWR farmer would simply have to deposit 337 355 Notes: try-wide success.” the e-receipt, against the goods 160 322 400 instead of delivering their produce 299 307 1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE and The eNWR will be useful when deposited by him in a regulated ware- 281 290 Coffee Karnataka robusta pertains to previous days price. | Farmers can get finance and wait 2) International metal are LME Spot prices and domestic metal are Mumbai local farmers deposit their produce in a reg- house. Based on this receipt, his goods 120 300 spot prices except for Steel. for right price to sell 3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket. ulated warehouse (as certified by the will be up for sale and he will hopefully 4) International Natural gas is Nymex near month future & domestic natural gas Warehousing Development and | As on December 31, 2019, NERL get the best price; the buyer gets the is MCX near month futures. Regulatory Authority). Th that ware- receipt and the repository will debit the 80 200 5) International Wheat, White sugar & Coffee Robusta are LIFF E future prices of generated over 1.8 lakh eNWRs/eWRs near month contract. house would have to be notified as a farmer and credit the commodity in the 6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM near mandi or market yard. The central buyer’s name. A farmer can use this 40 100 month future and Palm oil is Malaysia FOB spot price. 7) Domestic Wheat & Maize are NCDEX future prices of near month contract, Palm government has already asked states Andhra and Telangana have so receipt for getting bank finance against oil & Rubber are NCDEX spot prices. to follow its model Agriculture notified a little over 40 warehouses it and wait to sell those goods till he 121.8 127.9 132.4 137.7 146.3 155.5 165.4 176.3 187.7 8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot 0 0 price. Produce Market Committee (APMC) and 15 other states have told the Union gets a better price, avoiding any distress ‘10-11 ‘11-12 ‘12-13 ‘13-14 ‘14-15 ‘15-16 ‘16-17 ‘17-18 ‘18-19 9) International cotton is Cotton no.2-NYBOT near month future & domestic law, which provides for this. agriculture ministry that they are con- sale at mandis. cotton is MCX Future prices near month futures. Sources: Basic Animal Husbandry Statistics, DAHD&F, GoI