80‘USTERRORISTS’; likelyonCMDnorm€¦ · ingdirector(CMD). Whilethemarketregulatorgave ampletimetoIndiaInctoadhereto the rule, not many corporate houses have complied with it

USPresidentDonaldTrumpsaidonWedn-esdaythatnoAmericanswereharmedintheattackby IranonUSbases in Iraq.Hisremarkscamehoursafter Iran launchedoveradozenballisticmissiles inapre-dawnattacktargetingat least twobaseswhereUSmilitaryandcoalitionforcesarestationedin Iraq.The Iranianstate telev-isionclaimedthat"at least80terroristUSsoldiers"werekilled inthestrikes. 6 >

COMPANIES P3

Jet receives another EoIafter Synergy GroupJetAirwayshasreceivedasecondexpressionof interest forrevivingthegroundedairline.ThiscomesafterSouthAmericabasedSynergyGroupsubmittedanEoI for Jet late lastweek.TheResolutionProfessionalof JetAirwaysinformedthebankruptcytribunal—NCLT—thattheyhavereceivedtwoEoI'ssofarandthesecondEoItheyhavereceivedis fromanon-aviationcompanywithhighnetworth.

WORLD P6

Passenger jet crash in Irankills all 176 on boardAUkrainianairlinercrashedshortlyaftertake-off fromTehranonWednesday,burstingintoflamesandkillingall 176peopleonboard.Debrisandsmoulderingengineparts fromtheBoeing737werestrewnacrossafieldsouthwestoftheIraniancapitalwhererescueworkers infacemasks laidoutscoresofbodybags.

Maruti Suzuki productionup 7.9% in DecemberThecountry's largestcarmakerMarutiSuzuki IndiaonWednesdayreporteda7.88percent increase inproduction inDecem-berat 1,15,949units, thesecondsuccessivemonthofhikeafter reducing it forninemonths inarowduetodemandslump.

COMPANIES P2

Telcos seek open courthearing in SC on AGRTelecommajors, includingBharti AirtelandVodafone Idea,onWednesdaysoughtanopencourthearingof theirpleasseeking reviewof certaindirectionsof theSupremeCourton recoveryofpastduesamounting to~1.47 trillion fromtelecomserviceproviders. The recoveryofpastduesby thegovernmentwasbasedonadjustedgross revenueofabout~92,000crore.

Cabineteasesrulestomine,sell coalSHREYA JAINewDelhi,8January

The Union Cabinet on Wednesdayrelaxed the qualification criteria andregulations formining and selling coalin the country. With this, the entry offoreign players and non-coal depend-ent companies in the coalmining sec-tor has been eased. So far, only com-panies involved in the power, metalsandmining industry couldparticipatein bidding for coal blocks.

The amended rules will also implymore sellers of coal, which is current-ly in the hands of state-owned CoalIndiaLimited.Also, all end-use restric-tions have been removed. Under thenew regime, existingprivate coal blockowners would be able to sell surpluscoal in the openmarket.

The Centre has promulgated anOrdinance in Coal Mining SpecialProvisions (CMSP) Act, 2015, and alsoMines & Minerals Development Act(MMDR), 1957, to introduce changes inthe auction of coal blocks and theirend-use relaxations. The Ordinance isyet to be signed by the President.

Theannouncementcomesfouryearsafter the Centre enabled commercialmining and sale of coal by private com-paniesunder theCMSPAct, 2015.Ayearlater, it approved the methodology for

auctioning coal mines for commercialpurposes to private companies. In 2019,around25blockswereearmarkedforauc-tion but the bidding did not take place.

TheCoalMinistry had then allowed25 per cent of coal to be sold in openmarketbypriorowners,amovethatwasquestionedby the FinanceMinistry.

Turn to Page 17 >

Ordinance removesend-use restrictions

IRAN SAYS KILLED80 ‘US TERRORISTS’;TRUMP DENIES

THEMARKETSONWEDNESDAY CChhgg##

Sensex 40,817.7 51.7Nifty 12,025.3 27.6Nifty futures* 12,063.5 38.2Dollar ~71.7 ~71.8**Euro ~79.8 ~80.3**Brent crude ($/bbl)## 67.7## 68.5**Gold (10 gm)### ~40,687.0 ~312.0

WORLD P6

FOR CARLOS GHOSN, ‘IT WASESCAPE OR DIE IN JAPAN’

COMPANIES P2

www.business-standard.com

*(Jan.) Premium on Nifty Spot; **Previous close;# Over previous close; ## At 9 pm IST;### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL) , NEW DELHI AND PUNE

AUTO SCRAPPAGE POLICY A WAY TOSTART REVIVAL: SAJJAN JINDAL

THURSDAY, 9 JANUARY 202018 pages in 1 sectionMUMBAI (CITY)~9.00VOLUME XXIV NUMBER 105

OverseasprobeagainstAdani firmsrevivedAGENCIESNewDelhi,8January

The Supreme Court has revived the revenuedepartment’sbidtoinvestigatebillionaireGautamAdani’s companies, which it claims got unduetaxbenefitsbyovervaluingcoal imports.

A three-judgeBenchheadedbyChief JusticeSABobdeonWednesdayputonholdtheBombayHighCourt's decision to quash all letters rogato-ry (LRs) sent by the Directorate of RevenueIntelligence (DRI) to Singapore and other coun-tries. This will allow the revenue office to seekinformationonthecasefromoverseas.Theapexcourt also asked Adani Enterprises and AdaniPower to submit their stance.

LRs are sent to investigative or judicial agen-ciesinothercountrieswhensomeinformationisrequiredduringaprobeofoff-shoreentities.

The DRI alleges that the Adani group com-panies had overvalued about 1,300 consign-mentsof coal imported fromIndonesia toavailtax benefits in India between 2010 and 2016.

Thegroup routed the imports throughsever-alcountriesandsiphonedoffmoney,accordingtotheagency.

Requests to cooperatewith the investigationweresenttoSingapore,theUAE,HongKong,andtheBritishVirgin Islands in2016. Turn to Page 17 >

GROUP STOCKS FALLAAddaannii EEnntteerrpprriisseessPrice in ~

AAddaannii PPoowweerrPrice in ~

TECHNOLOGY:Fromfarmtofork 14 >

SupplychainfirmNinjacart isusingtechno-logytoconnect farmerswithretailersandcart 1400tonnesof freshproduceeveryday,writes PPEEEERRZZAADDAA AABBRRAARR

ONTHURSDAY

SPECIAL

SCstaysHCorderquashingLRsissuedincoalimportcase

BHARTI AIRTEL LAUNCHES $2 BN SHARE SALE 2 >

THEDRIALLEGESGAUTAMADANIFIRMSHADOVERVALUEDIMPORTEDCOALCONSIGNMENTSTOAVAILOFTAXBENEFITS

Sebi may extend March 31 deadline for splitting of roles

Rating agencies CARE, ICRAand India Ratings may havegot away lightly for theirlapses in assigning ratings tothe non-convertibledebentures of InfrastructureLeasing and FinancialServices (IL&FS), feels the

Securities and ExchangeBoard of India. The marketsregulator is planning toreview the ~25-lakh penalty,which had been imposed byits adjudicating officer on thethree rating firms lastmonth. Sources said the

settlement amount could berevised up to four timesupwards.The crisis at IL&FS,whose board was supersededby the government, hadcome to the spotlight inSeptember 2018.ShrimiChoudharywrites

SEBI REVIEWS PENALTY ON RATING AGENCIESECONOMY P4

MINING BOOST| Anycompany/industry can

bid for coalblocks,mineandsell coal

| Foreigncompanieswith Indianregistrationalsoallowed

| Existingcoalblockownersallowedtosell coal

| Unexploredmines tobeauctioned

CorporateearningsmayworsenKRISHNA KANTMumbai,8January

CorporateearningsduringtheOctober-December2019quarter(Q3FY20)arelikelytogiveacontrastingpicture.Analystsexpectanimprovementinnetprofitgrowth,thankstothegainsfromthecutincorporatetaxandabettershowingbyretaillenders,butthecontractioninrevenuesislikelytogetworse,indicatingafurtherweaknessinaggregatedemandintheeconomy.This,analystssay,rulesoutaquickgrowthrecovery,presentingafreshchallengeforcorporateplanners.

Thecombinednetprofitof theNifty50companiesisexpectedtogrowby6.7percentyear-on-year(y-o-y)duringQ3FY20,asagainst19.3per

centgrowthinthesecondquarter.Thistranslates intoacombinednetprofitof~1.01trillioncomparedwith~0.95trillionayearago.

Incontrast,theircombinednetsales(netinterestincomeinthecaseoflenders)areexpectedtodeclinebyaround2percenty-o-yduringthethirdquarter,asagainst0.2percentdeclineinthesecondquarterofthecurrentfiscalyear,makingittheworstslowdownforthecountry'stop-listedfirmsinmanyyears. Companiesareexpectedtoreportthecombinednetsalesof~9.30trillionforQ3FY20,asagainst~9.45trillionayearago.

TheaboveanalysisexcludesTataMotors,whichreportedaone-timenetlossofaround~27,000croreduringQ3FY19onaccountofthewrite-downofitsequityinJLR. Turn to Page 17 >

Banks,OMCsareexpectedtobringmostofincrementalgrowth

LONG WAY TO RECOVERY

Note: All quarters exclude Tata Motors as it reported a largeone-time loss in Q3FY19Sources: Capitaline, brokerage estimates

Breather for India Inclikely on CMD norm

DECEMBER QUARTER PREVIEW

WORLD P6 >

SHRIMI CHOUDHARYNewDelhi,8January

The Securities andExchange Board of India(Sebi) is considering relax-ing the March 31 deadline

for listed companies to separate thepositions of chairman and manag-ing director (CMD).

While themarket regulator gaveample time to India Inc to adhere tothe rule, not many corporatehouses have complied with it.Many tycoons do not want torelinquish the position of chair-man,whoheads the board of direc-tors. Instead, they want to give upthe role of managing director, whomanages the day-to-day affairs ofthe company.

“The government and the mar-ket regulator have started consul-tations and are reviewing theimplementation of the rule, con-sidering certain apprehensionsthey have received from stakehold-ers,” said a person privy to thedevelopment.

While thedegree of relaxation inthedeadlineor final rules governingthe issue is yet to be decided, therewill benochange in thebasicnatureof the regulation, the person added.

The development has come fol-lowinghectic lobbyingby corporategroups and industry bodies in thepast twomonths. India Inchadpeti-tioned the government and Sebi inNovember to review the rule

mandating the split of posts andalso barring relatives from holdingkey positions.

After the last board meeting,when queried, Sebi Chairman AjayTyagi had neither accepted notdenied that the regulator was con-sidering any relaxation.

Hehad said thenormwas aimedat improving corporate governance,and that corporates had been given

enough time to meet the require-ment. Sebi is not favourable toconcentrating powers in one indi-vidual, particularly when theindividual is thepromoter of a com-pany, said source.

According to the newgovernance norms, the top 500listed firmsbymarket capitalisationhave to comply with the provisionsbyApril 1. Turn to Page 17 >

RESPITE ON THE CARDS

MukeshAmbani

RIL

SanjivMehta

HUL

SanjivPuriITC

KiranMazumdar

-ShawBiocon

247companiesofthetop500thatareyettodecideoncreatingindependentrolesforchairman&MD

| Sebifeelsseparateroleswillallowtheboardofdirectorstoactmoreindependently

| Corporategroupsandindustrybodieshavebeenlobbyingagainstthenormforthepasttwomonths

| Theyarguethemovewillnotguaranteeeffectiveboardleadership

| Manydonotwanttorelinquishthepositionofchairman

GOLDBREACHES~42,000-MARKONIRANJITTERSGOVTMAYSHELVE IRANTRADEDEALAVOIDWESTASIA,REROUTEFLIGHTS:DGCATOAIRLINES

NNeett ssaalleessggrroowwtthhYoYchange (%)

NNeett pprrooffiitt ggrroowwtthhYoYchange (%)

Telecom majors, includingBharti Airtel and VodafoneIdea, on Wednesday soughtan open court hearing oftheir pleas seeking review ofcertain directions of theSupreme Court on recoveryof past dues amounting to~1.47 trillion from telecomservice providers.

The recovery of past duesby the government was basedon adjusted gross revenue ofabout ~92,000 crore.

The plea seeking an opencourt hearing was mentionedbefore a Bench headed byJustice Arun Mishra, who saidhe will take a decision aftertalking to Chief Justice S ABobde. The apex court had onOctober 24 last year upheldthe AGR definition formulat-ed by the Department ofTelecom (DoT) and termed as‘frivolous’ the nature of objec-tions raised by telecom serviceproviders. Airtel, in its plea,had sought review of thedirections on aspects of levy ofinterest, penalty and intereston penalty relating to AGR, asource had said. PTI

DEV CHATTERJEE & KRISHNA KANT

Mumbai, 8 January

India’s second-biggest wirelesstelephony major, Bharti Airtel,has begun marketing its $2-bil-

lion (~14,350 crore) equity issuanceto institutional investors to pay theAGR (adjusted gross revenues) duesto the central government within theJanuary 23 deadline set by theSupreme Court. The company willalso raise an additional $1 billion(~7,155 crore) as convertible bonds due in 2025, according to the terms ofthe transaction.

The equity offering comes withinmonths of Bharti Airtel raising~25,000 crore ($3.5 billion) fromshareholders through a rights issue,making the combined exercise of~40,000 crore ($5.5 billion) the biggestever equity raising by any Indian cor-porate within a financial year.

In May, Airtel had raised fundsfrom its shareholders at ~220 a sharethrough a rights issue.

On Wednesday, the company’sstock closed at ~459 a share, givingmore than 100 per cent returns sincethe rights issue.

With this latest sale, Airtel willcumulatively raise around ~1.35 tril-lion since April 2014 either by way ofequity or debt. A little over half of the

fresh funds have come through theequity route thanks to the company’shigher market capitalisation com-pared to industry peers. As onWednesday, Bharti’s market cap was~2.35 trillion, compared to ~18,700crore of Vodafone Idea.

In all, Airtel has raised about~65,000 crore through fresh share saleor equity issuances since April 2014.In the same period, the companymade fresh borrowings worth around~70,000 crore.

The numbers are based onchanges in the company’s balancesheet since the financial year 2014-15(FY15) and upto September 2019.

The company’s balance sheet alsosuggests that it made fresh borrow-ings worth around ~10,000 crore dur-ing the six months ending September2019. This makes Airtel one of thebiggest fund raiser in the past fiveyears, which has otherwise been atepid period for capital mop-up bycorporate India.

Airtel refused to comment on itsfundraising plans on Wednesday. Thecompany had taken shareholders'approval to raise $2 billion by way ofequity at an extraordinary generalmeeting last week.

The fundraising — led byCitibank, Goldman, Kotak and AxisCapital as bankers — will see partici-pation by foreign and domestic insti-tutional investors, who are betting onBharti Airtel’s future in spite of themassive ~35,500 crore AGR dues the

company needs to pay before January23. Vodafone Idea, too, is expected topay ~53,000 crore worth of dues tothe Indian government, according tothe apex court judgment.

The promoters currently own a62.7 per cent stake in the company,which fell by four percentage pointsin the rights issue after BhartiTelecom, one of the promoter enti-ties, had renounced a part of its sharein the rights subscription in favour ofGIC of Singapore.

Analysts say frequently raisingcapital has allowed Airtel to fund newcapex to keep pace with the deeppocketed Reliance Jio without strain-ing its balance sheet, unlike its peerssuch as Vodafone Idea.

The fresh equity issue and theresulting rise in its equity base andnetworth also allowed Airtel to easilyabsorb the AGR liability and main-tain key balance sheet ratios such asdebt to equity and debt to ebitda(earnings before interest, tax, depre-ciation and amortisation) ratio with-in reasonable limits, raising investors’confidence in the stock.

Airtel reported debt to equity ratio of around 1.8x at the end of September, against Vodafone Idea’s 4x. Analysts expect Airtel lever-age ratio to improve to around 1.55xafter the fundraising.

2 COMPANIES MUMBAI | THURSDAY, 9 JANUARY 2020

> .

STOCKSIN THE NEWS

* OVER PREVIOUS CLOSE

> YES BankBoard meeting onJanuary 10 to considerfundraising plan

~46.05 CLOSE

� 2.11% UP*

> Navin Fluorine InternationalCommenced commercialproduction at its Dewas plant

~1,090.65 CLOSE

� 6.74% UP*

> Eicher MotorsDown for seventhstraight day on weak sales data

~ 19,892.75 CLOSE

� 4.38% DOWN*

> NIIT TechnologiesCloses above proposedshare buyback price of ~1,725 per share

~1,734.35 CLOSE

� 4.78% UP*

> Indian Oil CorporationTop loser among the oil & gas stocks

~121.85 CLOSE

�2.25% DOWN*

IBM appoints firmveteran SandipPatel newIndia MD

IBM on Wednesday annou-nced the appointment ofSandip Patel as the newmanaging director for Indiaand South Asia. Patel, whohas been with the firm since2002, succeeds Karan Bajwa,who has decided to pursueopportunities outside of IBM.The firm also said that its AsiaPacific CEO, Harriet Green hasalso decided to retire from thecompany. BS REPORTER<

R Ananthanarayananappointed CEO & MDof Strides Pharma Strides Pharma Science onWednesday said its board hasappointed R Ananthanara-yanan CEO and MD of the comp-any effective January 9. He willsucceed Arun Kumar, founderand the incumbent CEO and MDof the company, Strides PharmaScience said. PTI<

TikTok expandscommunity normsfor transparencyTikTok on Wednesday said itwould remove content thatthreatens violence or depictsharm to individuals/groupsbased on attributes includingreligion, immigration statusand national origin. PTI<

IN BRIEF

Despite a strong bid to stall the deal by a section of the promoterfamily of logistics firm Gati, the company on Wednesday said it hasreceived an overwhelming response from its shareholders for theproposed stake sale to Allcargo Logistics with over 87 per cent ofthem voting in favour of the deal. The announcement comesamidst Gati founder Mahendra Agarwal's wife Neera and sonsDhruv and Manish last month approaching the capital marketsregulator Sebi against the open offer from Allcargo to purchaseadditional 26 per cent shares of Gati as part of the deal, citingvarious court cases against Agarwal and a Hyderabad court orderto attach his 1.6 million shares. PTI<

Over 87% Gati shareholdersvote for sale to Allcargo

Airtel launches $2-bn share saleAlso raising $1 billion via bonds due in 2025; this is the biggest equity raising by an Indian corporate in a financial year

MURUGAPPA HOLDCOINVESTMENT VALUESURGES TO ~11.4K CRAmbadi Investments,the holding companyofthe Murugappa Group,which is caughtin afamilydispute, sawthemarketvalue ofitsinvestments rise 37 percentYoY, as on March 31,2018, to ~10,986 crore,according to the latestannual report. As onJanuary7, the value ofits investments was slightlyhigher atover ~11,400 crore, based on the holdco’sshareholding till September 2019. Valli Arunachalam,one ofthe heirs to the 119-year old ~37,000-croreMurugappa Group, who claims thather familyholdsover 8% shares in the holding company, is fighting fora seaton the board ofAmbadi Investments, or fairmarketvalue for her stake in the holding company. The eight-member male-onlyboard had eightdirectors, including sixfrom the family, and twoindependentdirectors. Arunachalam said thatshe was fighting a lone battle for equal rights forwomen in the boardroom. T E NARASIMHAN

AMBADI INVESTMENTS

KEY ASSOCIATE COMPANIES

Investmentvalue of listed associate companies (~ cr)

* As on Sep 2019; sources: Company’s annual report; compiled by Business Standard Research Bureau based on Capitaline data

EID Parry (India) 38.47

Cholamandalam Financial 37.87

Tube Investments of India 36.72

Kartik Investments Trust 30.64

Carborundum Universal 29.61

Cholamandalam Investmentand Finance 4.31

Direct stake (%) *

7,982(Mar31, ‘17)

10,986(Mar31, ‘18)

11,432(Jan 7, ‘19)

AGR case: Bigtelcos foropencourt hearing

How do you see the economyshaping up?The Indian economy is connected toglobal geo-politics and over the lastyear, a lot has happened. The US-China trade war took place as well asEurope and Japan went into negativegrowth. That also played big forIndia. It has been challenging andmost economies have suffered in thepast year.

In that context, what challenges doyou see in growing JSW Steel to thestated target of 45 million tonnes perannum (MTPA) in another five yearswhich is more thandouble of what youare now? Our goal remains thesame and thegovernment hastaken steps tokickstart theeconomy. If we are tobecome a $5 trillioneconomy, then weneed at least 7 percent to 8 per centGDP growth, if nothigher. A couplereforms were announced onWednesday. The government willcommercialise 100 coal blocks forminers. Interestingly, we import 150million tonnes of thermal coalvalued at around $15 billion. This isridiculous because we are sitting onbillions of tonnes of coal andimporting it.

Is there a quality difference of ourown coal and the kind that isimported? The quality differences are withcoking coal but even there we havehuge quantities. With thermal coal,we have plenty but are importing.Similarly, after auction of the iron oremines in 2020, there will be a hugeprice jump as per industry reportsand will have a big negative impacton steel. The recent announcementof continuity of all forest andenvironment clearances for all ironore mines for a period two years is agreat reform. It will make the whole

sector moreaggressive andcompetitive at aglobal level.

Steel has also slowedbecause of the pain inthe auto industry.When do you see itrebounding?An important step toaddress fast is theauto scrappagepolicy. We see oldvehicles plying in the

country which eventually end upbecoming shops and stores. We musthave a policy that scraps decade-oldvehicles. As far as a turnaround goes,you can’t ignore young people whoprefer to buy smartphones instead ofcars and then use them for Uber andOla. However again, a scrappagepolicy that targets commercial

vehicles is one way to start a revival.

What else can the government do tohelp stimulate the economy? There are moves to disinvest from AirIndia which will help. Sevenairports have been privatised.The thought process is also onfor privatising railway stationsand unlocking value. Youcan’t have railways run the same wayas 70 years ago. Let the railways notown a single wagon. If Coal India hasto move coal, then let it own thewagon and if JSW has to move steel,then let it own the wagon. Tata Steeland NTPC should invest in wagons,not the railways. The privatisation ofrailways is a matter of mindset and is

being looked at and will happen.

The national steel policy envisagesbeing globally competitive andhaving a crude steel capacity of 300

MTPA by 2031. How realistic isthis, given that India barelyhas a handful of players thatproduce significant tonnage?According to me, by 2025, we

would be at over 200 MTPA inconsumption. If the consumptionhappens, production will follow. Ittakes around two years to build a newsteel plant. So, I am not worried aboutreaching 300 MTPA in capacity.SAIL, JSW, Tata Steel, ArcelorMittaland JSPL are the big five players and Ithink they will all grow.

You’ve been in pledged-sharebuyback mode to the tune of ~3,500crore. Strategically, what’s beendriving that?Many large groups have, in therecent past, suffered because ofloans against shares. That alsobecomes an overhang for the stockbecause it has been seen as apotential danger. So, we took aconscious call to get out of pledgedshares. There’s still some pledgedshares that we are yet to release,around less than half of the totalamount which we hope to get donein the next year. The strategy iscautious aggression.

What’s your investment plan in thenear future?We, as a group, have planned a totalexpenditure of ~60,000 crore overthe next three years. For steel,around ~45,000 crore and ~15,000crore for cement, paints andenergy. It ought to create around50,000 jobs by 2025.

What is the succession plan withinthe group?Retirement age is 60 and if you’re on the board, it’s 65. I am 60 andhaven’t decided when I will retirebut I have a clear thought processon succession, which is, it won’tnecessarily include a familymember. The top challengesinclude finding a pipeline ofleaders as well as dealing withdisruption that does keep me onthe tenterhooks, given how fastthe world is changing. You can lose your competitive advantagein six months.

‘Auto scrappage policy a way to start revival’

“WE AS A GROUP HAVEPLANNED FOR A TOTALEXPENDITURE OF~60,000 CR OVER THENEXT THREE YEARS. FORSTEEL, IT’S ~45,000CRORE AND 15,000 CRFOR CEMENT, PAINT ANDENERGY. IT OUGHT TOCREATE AROUND 50,000JOBS BY 2025”

SAJJAN JINDAL, chairman of the $14-billion JSW Group, talks to Pavan Lall on what isdriving his recent flurry on share buybacks, JSW Steel’s expansion plans, and how astringent auto scrappage policy would help in a turnaround. Edited excerpts:

In the July-September quarter of 2019, adjusted gross revenue (AGR) ofthe telecom sector declined 4.5%. However, on a year-on-year basis, itwas up 3.3%, according to the telecom services performance indicatorreport by Telecom Regulatory Authority of India (Trai). Gross revenue andAGR of the telecom services sector for the quarter was ~59,992 crore and~37,338 crore, respectively. Access services contributed 74.78% of the totalAGR of telecom services. Reliance Jio reported 6.75 per cent growth in AGRduring the quarter, with Airtel’s and Vodafone Idea’s declining 2.32%and 6.82%, respectively. Note that telcos introduced tariff hikes in thefollowing quarter. ROMITA MAJUMDAR

SERVICE PROVIDER-WISE SUBSCRIBERS BASE(MN) (WIRELESS+WIRELINE)

ACCESS SERVICES — SERVICEPROVIDER-WISE AGR

WIRELESS MARKET SHARE (%)

Source: Trai (Bharti Airtel has reportedthe wireless subscribers, including thesubscribers of M/s TataTeleservices for QESeptember 2019. However, DoT has notyet approved merger of them)

Bharti Vodafone Reliance Airtel Idea Jio

MAXIMUM SERVICE AREA-WISE SHIFTIN SUBSCRIBER BASE QoQ (%)

J&K, whichwas undercommunicationblackout throughmost of thequarter, witnesseda higher adoptionof landlineservices. J&Kservice area sawthe maximumgrowth of 15.54%

Service area wireless

Assam 2.1

Bihar -0.39

J&K -1.24

NE 2.17

Subscriber base (mn)

Bharti Airtel Vodafone Idea Reliance Jio

27.60 31.20 29.79Market share (%)

� YoY� QoQ (%)

-5.08 1.61 -14.33 -2.84

41.16

7.49

329.88 372.86 356.08

Service Area Wireline

Gujarat 9.79

HP -3.89

J&K 15.54

Bihar -15.69

TELECOM PERFORMANCE INQ2: AGR DROPS 4.5 % QoQ

7,5

28.3

7

6,2

60.2

2

6,7

20.8

8

7,2

95.0

3

8,2

71.8

5

11,5

28.9

5

� Sep ‘18 � Sep ‘19 (~ cr)Vodafone

IdeaOthers

BhartiAirtel

31.73

30.26

27.74

10.27

Reliance Jio

ILLUSTRATION BY BINAY SINHA

N TELCOS AFTER AGR RULING N

SHARES RISE (~)

On Wednesday, the company’s stock closed at~459 a share, giving more than 100 per centreturns since the rights issue PHOTO: BLOOMBERG

FIRM’S KEY PERFORMANCEINDICATORS (OCT-DEC ’19)

758,897Mobile services

voice minutes (mn)

123,7934G customer base of the total (‘000)

13,928Data usage per

customer (MBs)

16,308Digital TV

customers (‘000)

101Net additions (‘000)

138,443Data customer

base (‘000)

MUMBAI | THURSDAY, 9 JANUARY 2020 COMPANIES 3. <

SUBRATA PANDA

Mumbai, 8 January

Jet Airways has received a secondexpression of interest (EoI) for itsrevival. This comes after South

America-based Synergy Group sub-mitted an EoI for Jet late last week. TheResolution Professional of Jet informedthe bankruptcy tribunal — NationalCompany Law Tribunal (NCLT) — thatthey have received two EoI’s so far andthe second EoI is from a non-aviationcompany, with high net worth.

Moreover, they are expecting a fewmore EoIs to come in before the dead-line ends. However, there is no clarityon whether the Hinduja Group will bidfor Jet. There were reports that the

Hinduja Group would also apply butthe sources say this is yet to happen.

It was earlier supposed to end onJanuary 6, however, the lenders decidedto extend the deadline if anyone wantsto submit an EoI for the defunct airline.

Meanwhile, the NCLT has directedthe lenders to release the corporateinsolvency resolution process (CIRP)funds to the resolution professional torun the company as a going concernotherwise they will be liable to con-tempt proceedings against them. The

Bench has also asked the members ofthe committee of creditors to be pres-ent before the Bench in the next hear-ing scheduled on January 19.

Moreover, the counsel informed thetribunal that Synergy Group is confi-dent of getting slots from the Ministryof Aviation, hence they submitted freshEoI for the defunct airline.

Earlier, in the first round of bidding,Synergy had questions for the civil avi-ation ministry on availability of slots inthe domestic and international routes.

It wanted answers to these before givinga resolution plan. The ministry wanteda resolution plan on the table beforegiving any assurance on slot allocation.

Synergy had given an EoI for Jet inthe first round of bidding. However, itfailed to give a debt resolution plan forthe airline company, even after gettingseveral extensions. The lenders subse-quently decided to call afresh for EoIs.

Synergy is led by Bolivian-bornGermán Efromovich. It owns majoritystake in Avianca Airlines, SouthAmerica’s second-largest airline.

Jet was admitted under the insol-vency process on June 20, 2019, after itsbankers failed to find any takers despitemonths of negotiations. The airlinestopped flying on April 17; it hadaround 14,000 employees on that date.

Creditors claim on the airline arefor ~36,090 crore, of which ~14,640crore had been admitted as onOctober 20. Jet has completed 180days under insolvency proceedings,which have been extended for anoth-er 90 days.

Jet’s share price gained almost 5 percent on Wednesday to close at ~39.50 atthe BSE.

Jet gets another EoI after SynergyNCLT has warned Jet CoC of contemptproceedings if it doesnot release interimfunds to the resolutionprofessional by Jan 20

The deadline to submit an EoI for Jet Airways will end on January 15

NEHA ALAWADHI

New Delhi, 8 January

Department for Promotionof Industry and InternalTrade (DPIIT) officials metrepresentatives of cloudkitchens Faasos and UberEats as well as food aggrega-tors Swiggy and Zomato toexamine whether these firmsviolated foreign directinvestment (FDI) norms in e-commerce.

The meeting, which tookplace on Tuesday, was alsoattended by representativesof the National RestaurantAssociation of India (NRAI).

“Private entities that par-ticipated in the meeting haveinformed the DPIIT that com-panies like Faasos and UberEats have been playing foulwith FDI rules,” said a personaware of the discussions.

Current rules allow up to100 per cent FDI under theautomatic route in the mar-ketplace model of e-com-merce, but bar any invest-ments in the inventory basedmodel of e-commerce.

In December 2018, the gov-ernment had tightened FDIconditions in the onlinespace, stating that an e-com-merce platform with foreign

investment cannot exerciseownership or control over theinventory sold on its platform.

The DPIIT wasapproached by the NRAI lastyear to provide clarity onwhether these rules apply tofood aggregators and fooddelivery firms as well. BothUber Eats and Faasos oper-ate out of multiple physicallocations, classified as ‘cloudkitchens’.

These properties are incertain cases owned bythem, and both extend directcontrol over the labour andcapital used to run the dailyoperations, the participantssaid.

Faasos has investmentsfrom Lightbox Ventures andSequoia Capital India,among others. Its parent,Rebel Foods, also ownsbrands like Oven Story,Lunch Box, and BehrouzBiryani.

The DPIIT has said it wo-uld inquire into the chargesand letters would be sent tothe two companies to clarify.However, the government hastaken note of the fact thatboth businesses maintaintheir own e-commerce plat-forms through websites andmobile applications.

RUCHIKA CHITRAVANSHI


The Competition Commissionof India (CCI) said in a study,released Wednesday, that mar-ketplace platforms shouldadopt self-regulatory measuressuch as clearly stating theparameters of search ranking,setting out a transparent policyon data collected by them,among others.

Releasing the findings andits observations, the CCI saidmarketplace platforms shouldbring out a clear policy on dis-counts. This would include thebasis of discount rates fundedby platforms for different prod-ucts or suppliers and the impli-cations of participation or non-participation in such schemes.

The CCI flagged concernsaround deep discounting ongoods and services offered bylarge online retailers, particu-larly in the case of mobilephones and electrical appli-ances. “Discounting is a com-mon business strategy, butwhere the design of the dis-counting schemes is mis-aligned with the rational busi-ness practices of the serviceproviders, the use of such dis-counts as a competitive strate-gy comes into question.”

The anti-trust watchdog

said issues identified in thestudy could have a bearing oncompetition, or might hinderthe realisation of the full pro-competitive potential of e-commerce. “Some of the iss-ues in specific circumstancesmay have a potential to con-travene the provisions of theCompetition Act, 2002, whichshall be the subject matter ofcase-by-case determination bythe Commission.”

The CCI also suggested thate-commerce platforms set outmain parameters for searchranking and include the possi-

bility to influence rankingagainst any direct or indirectremuneration paid by businessusers. They should set out adescription of those possibili-ties and of the effects of suchremuneration on ranking.

This, however, should notentail disclosure of algorithmsthat may enable manipulationof search results by third par-ties. “The study records averm-ents from various stakeholdersand brings out the Comm-ission’s enforcement and advo-cacy priorities in the backdropof the interplay between data,market power and competitionlaw,” Avaantika Kakkar, Partner& Head Competition Law, CyrilAmarchand Mangaldas.

In line with the draft nation-al e-commerce policy by theDepartment for Promotion ofIndustry and Internal Trade,CCI called for transparency overuser review and rating mecha-nisms to ensure informationsymmetry, which is a prerequi-site for fair competition.

“Adequate transparency tobe maintained in publishingand sharing user reviews andratings with the business users.Reviews for only verified pur-chases to be published and me-chanisms to be devised to pre-vent fraudulent reviews andratings,” the CCI report said.

CCI for self-regulationin e-commerce sector

DPIIT to examine FDI compliance by Uber Eats, Faasos

The CCI flagged concernsaround deep discountingon goods and servicesoffered by large onlineretailers, particularly inthe case of mobile phonesand electrical appliances

NIDHI RAI

Mumbai, 8 January

India’s largest payments plat-form Paytm has launched itsall-in-one quick response (QR)for merchants across the coun-try. This QR will enable mer-chants to accept unlimited pay-ments through Paytm Wallet,RuPay cards, and all unifiedpayments interface (UPI)-basedpayment apps directly into theirbank account at 0 per cent fee.

The platform offers a singlereconciliation of all paymentsthrough its ‘Paytm for Business’app. It supports all paymentmodes and multiple languages.

Paytm will be launchingthese QR codes along with util-ities like calculator, powerbank,clock, pen stands, and radio.

The merchant-only ‘Paytmfor Business’ is used by over 10million Paytm partners, withover 13 million merchantsonboard. Thro-ugh the app,merchants canalso avail of lo-ans and insur-ance.

While spea-king at thelaunch, VijayShekhar Shar-ma, founderand chief exec-utive officer,Paytm, said,“The Paytm all-in-one QR is amust-have business tool as it isthe only payment QR thatallows merchants to accept pay-ments from Paytm Wallet, allUPI apps, and cards. I am surethis QR will accelerate theDigital India mission and make

more financial services avail-able to the underserved.”

The company has also intro-duced a new service ‘PaytmBusiness Khata’ that comple-ments the Paytm all-in-one QR.This will empower Paytm mer-

chant partnersto maintain dig-ital ledgers of alltheir customertransactions,including cashand credit.

With‘PaytmBusiness Kh-ata’, merchantscan set pay-ment due datefor credit trans-

actions and send automatedreminders. The customers willreceive notification with theirbilling history, and they will beable to make paymentsthrough the same link.

On being asked when Paytmwould turn profitable, Sharma

said, “We aren’t chasing prof-itability in the short-term. Wewill be launching brokerage ofstocks and insurance. We willdiversify further in the finan-cial services space. In a best-case scenario, we will be able tobreak-even in two years’ time.”

Sharma also denied Paytmhas applied for a peer-to-peerlicence. “In 2020, the biggestgrowth is going to come frombusiness-to-business pay-ments. Business payments arebigger than retail paymentswhen it comes to complexityand opportunities,” addedSharma.

On being asked about hisBudget wish, Sharma said,“The government should reim-burse companies for acquiringmerchants.”

In 2018-19, Paytm hadclocked a gross transaction val-ue of $50 billion through 5.5 bil-lion transactions. It had set atarget of 12 billion transactionsby 2019-20.

Govt should reimbursecompanies for acquiringmerchants: Paytm chief

Vijay Shekhar Sharma has denied Paytm applied for a peer-to-peer licence

“In 2020, the biggestgrowth is going to comefrom business-to-business payments.Business payments arebigger than retailpayments when it comesto complexity andopportunities”

VIJAY SHEKHAR SHARMAFounder & CEO, Paytm

SOHINI DAS

Mumbai, 8 January

The drug pricing regulator hasallowed two Mumbai-basedpharma majors — Cipla andGlenmark — to have an enhan-ced pricing for two of their res-piratory (inhaler) products ongrounds that these were ‘innov-ative’ from the other similar pr-oducts available in the market.

In a meeting in December,the National PharmaceuticalPricing Authority’s (NPPA)expert committee decided toallow Cipla’s SynchrobreatheInhaler Device a separate priceother than the ceiling pricealready recommended by theregulator. Similarly, for Glen-mark’s digital dose counter(sold under brand nameDigihaler) the NPPA agreed toallow a different price.

According to a source, theNPPA has raised the price capon the Digihaler by about 5-8per cent or so. “The cost ofmedicine, however, remainssame. The device is allowed inthe separate or increased pricecap. When a patient refills theinhaler with medicine, the costremains same,” the source said.

Glenmark had appealed tothe pricing regulator in 2016asking for a differential pricefor its Digihaler on groundsthat it was different from theother metered dose inhalers(MDIs) available in the marketand was easier and safer for thepatients to use. The matter waseventually placed before anexpert committee, which cameback with its report on thesame in December. The NPPAcan grant a differential price

for certain dosages or drugdelivery forms of formulationsthat are under price controlunder paragraph 11 of the DrugPrice Control Order, 2013.

Cipla and Glenmark did notrespond to queries immediate-ly. In 2015, Cipla had launchedits inhaler device Synchrob-reathe, which is a novel, breath-actuated inhaler, with a dosecounter. It is used to manageobstructive airway disease.

Cipla & Glenmarkget NPPA breatherfor inhaler pricing

NEHA ALAWADHI


News curator app Inshorts hassaid its location-based socialnetwork, Public, registered 10million users within sixmonths of launch.

Public works on the ideathat people should be able torecord and share happeningsaround them, enabling real-time local updates, especiallyin tier-II and tier-III cities. Itis a GPS location-based app

and will show users contentbeing generated near themand from people whom theyfollow (online).

The beta launch test (theterm for pre-release of soft-ware, given to a large group ofusers, to try under real condi-tions) for Public began inApril. The final launch was inJuly. It reached the 10-plusmillion user mark inNovember.

A million videos are beingcreated every month on

Public, says the company. Itcompetes with the likes ofTikTok, YouTube and othervideo-based apps.

"Public is giving everyone aplatform to connect with theirlocal communities and our rap-id growth is demonstrative ofthe strong desire of people tostay so connected...we expectto have more than 50 millionusers by the time we completeone year of launch,” said AzharIqubal, co-founder and chiefexecutive at Inshorts.

Social video app Public gets10 mn users in six months

IN BRIEF

Chhattisgarhreports bird fluoutbreakIndia has reported an outbreakof the highly contagious H5N1bird flu virus on a poultry farm inChhattisgarh, the WorldOrganisation for Animal Health(OIE) said on Wednesday, citing areport from the fisheries andanimal husbandry ministry.The virus killed 5,634 out of21,060 birds on the farm inBaikunthpur and all of theremaining birds wereslaughtered, the Paris-basedOIE said in an website alert.

REUTERS<

Karti Chidambaramto move Madras HCin tax evasion case Congress LokSabha MP KartiChidambaram(pictured) andhis wife Srin-idhi will movethe MadrasHigh Court in a tax evasioncase, a day after their disch-arge petition was rejected by aspecial court. The matterrelates to the alleged non-disclosure of ~1.35 crorereceived by Karti, son offormer union minister P Chidambaram in cash forsale of land at Muttukadu. PTI<

State can’tdeprivecitizens of theirproperty, says SCIn a democratic politygoverned by the rule of law,the state cannot deprivecitizens of their propertywithout the sanction of law,the Supreme Court said onWednesday. It ruled that toforcibly dispossess citizens oftheir private property,without following the dueprocess of law, would be toviolate a human right, as alsothe constitutional right. PTI<

Supplementaryextradition pleaagainst NiravA special court in Mumbai onWednesday allowed the CBI tosubmit a supplementaryextradition request againstfugitive economic offenderNirav Modi to the concernedauthorities in London, wherethe diamantaire is residingpresently.The CBI onWednesday filed anapplication before the specialcourt seeking for thesupplementary extraditionrequest to be allowed to besent to London in keepingwith the fresh evidencesubmitted against Modi in theagency's supplementarycharge sheet. PTI<

Parliament session in 2022 will beheld in new building: LS speaker

LoK Sabha Speaker Om Birla (pictured)on Wednesday said to mark the 75thanniversary of the country in 2022, theParliament session will be held in thenew building. "...to fulfil the dream of'New India'. Indian parliament willhold its session in 2022, in newParliament House to mark the 75thanniversary of its independence,"Birla said, speaking at the 25th

Conference of Speakers and Presiding Officers of the Commonwealth(CSPOC) in Ottawa in Canada. Noting that the Parliament HouseBuilding has completed 92 years after it was made functional in 1927,Birla said in a statement issued by Lok Sabha Secretariat that there isan urgent need to provide sufficient space and facilities for theMembers of Parliament and the staff in Parliament House to fulfil thedream of 'New India'. Birla also said that members and staff ofParliament will be consulted before undertaking the renovation. PTI<

Sebi may review penalty on raters in IL&FS caseSHRIMI CHOUDHARY


Rating agencies CARE, ICRA and IndiaRatings may have got away lightly fortheir lapses in assigning ratings to thenon-convertible debentures (NCDs) ofInfrastructure Leasing and FinancialServices (IL&FS), feels the Securitiesand Exchange Board of India (Sebi).

The markets regulatoris planning to review the~25-lakh penalty, whichhad been imposed by itsadjudicating officer on thethree rating firms lastmonth. Sources said thesettlement amount couldbe revised up to four timesupwards.

“The Sebi board is notconvinced with the quantum ofpenalty levied on these rating firmsas it believes that it is quite less, con-sidering the magnitude of the viola-tion, said a regulatory source inknow. He added that the depart-ment, which handles the concerneddivision (rating agencies), has been

instructed to initiate the process ofreview as envisaged in the regula-tion. The crisis at IL&FS, whoseboard was superseded by the gov-ernment, had come to the spotlightin September 2018. Since then, thecompany and its related entitieshave come under regulatory glare.

In three separate but similarly-worded orders, Sebi had said the

default by IL&FS occurreddue to lethargic indiffer-ence and needless pro-crastination as well as lax-ity of the rating agencies.

The markets regulatoris of the view that expo-sure to IL&FS, during rel-evant times, was criticalto the financial stabilityas its share in total expo-

sure to banks and non-bankingfinancial companies was fairly high.

There was substantial publicinterest involved in the affairs of thebeleaguered infra firm, consideringits importance for financial stability.

Review of the adjudication orderwas enabled under the new power

that Sebi received through the secu-rities law amendment in 2014.

Section 15-I(3), introduced in theSebi Act, states that the regulator cancall for and examine an order passedby an adjudicating officer if it consid-ers the order to be “erroneous” to theextent that it is not in the interest ofthe securities market. In such cases,the regulator can make a fresh inquiryand enhance the quantum of penaltylevied by the adjudicating officer.

Experts say that violation of ratingregulation, however, allows a penal

provision of a maximum ~1 crorepenalty unless Sebi adds some otherprovisions of the Securities Act toenhance the penalty. But, other pro-visions could be imposed, if it launch-es a fresh adjudication proceedings inthe matter, said a legal expert trackingthe development.

In the last six years, the markets reg-ulator has reviewed only 10 adjudicat-ing orders and levied maximum penal-ty of ~5 lakh. In one of the orders, “Awhole-time member feels that thispower (to review) cannot be used to

reverse an acquittal into a conviction,”said Suresh Gupta, a former senior offi-cer at Sebi. The case pertains to thedefault committed by the IL&FS and itssubsidiary IL&FS Financial Services ontheir obligations in respect of com-mercial papers (CP), inter-corporatedeposits as well as on interest paymentsrelated to NCDs.

Sebi examined the role of the threeagencies in assigning ratings to vari-ous NCDs of the IL&FS.

While assigning credit ratings to theNCDs of IL&FS, the three entities “failedto exercise proper skill, care and due dili-gence while discharging their responsi-bilities as credit rating agencies. It vio-lated the provisions of the code ofconduct of the credit rating agencies,”the adjudication order had said.

They also “failed to exercise inde-pendent professional judgment inorder to achieve and maintain objec-tivity and independence while ratingIL&FS and its instruments,” it added.

Though there is no allegation of anymala fide intention on part of these rat-ing agencies, Sebi had said the failureby them is blameworthy.

4 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 9 JANUARY 2020

> .

“This country is a democracy. Whyonly artistes, even a common man cango anywhere and express his opinion” PRAKASH JAVADEKAR Information & broadcasting minister on actor

Deepika Padukone's JNU visit

“The projected annual growth of 5% isexaggerated and puffery. The growth in thefirst half was 4.75%. It is difficult to believethat growth in the second half will be 5.25%” P CHIDAMBARAM

Senior Congress leader and former finance minister

“CAA, in my judgment, should be turned down by the SCon the grounds of it being unconstitutional because youcan’t have certain types of fundamental human rightslinking citizenship with religious differences” AMARTYA SEN

Nobel laureate

N IN THE CABINET N

ABHISHEK WAGHMARE &

SANJEEB MUKHERJEE


While unequivocally supporting fis-cal expansion in the upcomingyear, economists are urging the

government to take the capital expenditure(capex) route, and preferably spend on cap-ital assets and infrastructure projects, ratherthan raise allocation to rural-centric cash oremployment schemes.

Former governor of the Reserve Bankof India, C Rangarajan, told BusinessStandard that a “little relaxation” of fiscaldeficit target would be needed to arrestslowdown.

“Any excess government spendingshould be investment-led. We are in a situ-ation where an investment slowdown isconcurrent with weak consumer demand.Only capex would have a direct positiveimpact on the economy,” he said in a tele-phonic interaction.

Saying that the decision to cut taxes forcompanies was “appropriate”, he cautionedagainst any cuts in income tax. “While taxcuts have their potential, raising expendi-ture is a more powerful tool for immediateimpact than cutting taxes,” he added.

The government is staring at an unprece-dented economic slowdown and shortfall inrevenue, prompting it to enhance spendingto boost aggregate demand. At the currentlevel of gross domestic product, a 0.5 percent expansion in fiscal deficit would openup funding to the tune of ~1 trillion.

Arjun Jayadev, who teacheseconomics at Azim PremjiUniversity, said althoughenhanced public investmentscrowd out private investmentsin the usual sense, the currentsituation would actually“crowd-in” private investments.

“At a time when virtually noprivate investment is happen-ing, the rise in government spending couldactually prompt private players to investmore. If the government takes steps torestore demand, private businesses are morelikely to spend, since they are concernedabout sales,” he told Business Standard.

Nevertheless, experts also said that thetwo rural-centric poverty alleviationschemes — Mahatma Gandhi NationalRural Guarantee Scheme (MGNREGA) andPradhan Mantri Kisan Samman Nidhi (PM-Kisan) — if used in a smart combination,could help in supplementing the impact of

fiscal expansion through the capex route. Former rural development secretary

Amarjeet Sinha, who coordinated the ruralschemes of the government till 2019, saidthe two schemes serve a different purpose,

and directing the funding of thetwo schemes where they areneeded the most would makethem more effective.

“MGNREGA is a targeted dis-tress employment for labourers,and gets more demand in timesof depressed farm prices. In thesame situation, PM-Kisan oblit-erates the impact of weak farm

prices for land-owning farmers,” said Sinha.Mahendra Dev, director of Indira

Gandhi of Development Research, said thatraising wages under MGNREGA couldboost incomes of a significant chunk of therural population, suggesting the schemeallocation should be raised.

However, he disagreed with economistson the immediate efficacy of the capex.

“Capital-intensive projects in rural areashave a long gestation period, and delivereconomic benefits with a lag. On the con-trary, PM-Kisan provides immediate con-

sumption boost,” said Dev. Economists from rating agencies, how-

ever, concurred with Rangarajan on thefocus on capex. “In ICRA’s view, fiscal spaceshould be prioritised for capex or infra-structure spending, as that is likely to havea higher multiplier impact on the economy,supporting core sectors, and eventuallytransmitting into higher discretionaryspending,” said Aditi Nayar, principal econ-omist at the agency.

Alluding to the two rural schemes,Rangarajan also said that they provide themuch-needed social security net, but thatpriority should be on public capital spending.

Madan Sabnavis, chief economist atCARE Ratings, echoed the view, saying“spending the enhanced borrowedresources on investments will benefit themost”. “The preference will be for capexbecause it is lumpy and will add to demandin the economy. MGNREGA comes second,as it can be combined with some productiveemployment. PM-Kisan should be the lastpriority, as one episode of food inflation,which is currently the case, can wipe out theamount that translates into ~500 per monthper family,” added Sabnavis.

Economists call for capexroute to boostdemand

*Till December; **Till Jan 7, 2020 Source: Union Budget, respective scheme websites

C RANGARAJANformer RBI governor

“ANY EXCESSGOVERNMENT SPENDING SHOULD BE ON CAPITAL ASSETS”

CAPEX NEEDS BOOST�Capex in ~trn (LHS)�% of total spending (RHS) 61,084

60,000 57,020

MGNREGA SPENDINGON TRACKSpending (~crore)

2018 2019 2019-19 (RE) -20 (BE) -20 A*

PM-KISAN IN SLOW LANESpending (~crore)

AMARJEET SINHAformer secretary, ruraldevelopment

“IN TIMES OF DEPRESSEDFARM PRICES, BOTHMGNREGA ANDPM-KISAN ALLEVIATERURAL INCOMES”

ARJUN JAYADEVprofessor of economics

“IF GOVERNMENT TAKESTHE FIRST STEP, PRIVATEBUSINESSES ARE MORELIKELY TO SPEND INTIMES OF FALLING SALES”

20,000

75,000

33,000

2018 2019 2019-19 (RE) -20 (BE) -20 A**

AMRITHA PILLAY

Mumbai, 8 January

Mumbai’s Metro rail authorityis exploring non-fare revenueoptions as the city builds its firstunderground corridor. If allgoes well, real estate establish-ments will be able to build adirect subway access from theirbasements to the nearest Metrostation, all for a one-time fee.

The underground line,Mumbai Metro Line 3, covers33 km and connects the city’sairport terminals and threeprominent business districts.

“MMRCL (Mumbai MetroRail Corporation) has received12 expressions of interest (EoIs)submissions for direct access,”said an MMRCL official. Adirect access connects estab-lishments to a Metro stationthrough a subway.

The list of interested bid-ders includes real estate devel-opers like K Raheja Corp, DBRealty, Wadhwa Group, OberoiRealty, Indiabulls Real Estateand Shrem Hotels. MMRCLofficials are also in discussionwith projects around the city’sairport and two business dis-tricts — Parel and Bandra-Kurla complex.

The EoIs will be followed upwith a detailed project report(DPR) to assess financial andexecution feasibility of the sub-way project that bidders haveexpressed interest in.

The direct access concept isbased on Tokyo’s model, whereit has been a success. MMRC

will need to procure clearancesafter formulation of the DPR.

Line 3 is to be operationalin two phases — the first to startin June 2021, and the secondby the end of that year.

With a project cost of~30,000 crore, non-fare rev-enue options will help MMRClower fares. The corridor isexpected to have a daily rider-ship of 1.4-1.7 million. TheMMRC official added, the non-fare revenue options will befinalised and implementedbefore the operations start.

In addition to direct access,MMRC also aims to sell stationnaming rights to companies,lease out telecom towers andoptic fiber rights and monetisereal estate parcels in the city.

MMRC, through theseefforts, aims to generate about10-15 per cent of its revenuethrough non-fare options.According to data shared byMMRC, Delhi’s Metro networkannually generates ~564 croreas non-fare revenue, 15 per centto its total revenue generation.For Mumbai’s operational line,which connects Ghatkopar toVersova, non-fare revenuestands at ~37 crore, 11 per cent oftotal revenue collection.

An auction for monetisa-tion of telecom tower rights andoptic fiber cable rights is alsoin consideration. “Bids will becalled from tower companiesto set up towers in order toensure mobile connectivitythroughout the under-groundstretch,” the official added.

MMRC aims for15% revenue fromnon-fare options

ARUP ROYCHOUDHURY


The Cabinet Committee on EconomicAffairs on Wednesday approved thestrategic sale of Neelanchal IspatNigam (NINL), in which multiple state-owned companies own a stake.

It is learnt that this strategic salecould be completed only after March31, and hence, will be part of the 2020-21 divestment pipeline.

NINL is a joint venture company,in which four central public sectorundertakings — MMTC, NationalMineral Development Corporation(NMDC), Bharat Heavy Electricals(BHEL), and MECON — and twoOdisha government companies,Industrial Promotion & InvestmentCorporation of Odisha (IPICOL) andOdisha Mining Corporation (OMC),

hold stake.MMTC holds 49.78 per cent share in

NINL, followed by OMC (20.47 percent), IPICOL (12 per cent), NMDC(10.10 per cent), while MECON andBHEL hold 0.68 per cent each.

The strategic buyer for NINL willbe identified through a two-stage auc-tion procedure, said an official state-ment. The request for proposals to hire

transaction and legal advisors and assetvaluers are already on the website of theDepartment of Investment and PublicAsset Management (DIPAM).

“The proposed strategic disinvest-ment of NINL would unlock resourcesto be used to finance the social sec-tor/developmental programmes of thegovernment benefiting the public,” thestatement said.

CCEA approves strategic sale of Neelanchal

SHINE JACOB


The Cabinet Committee on EconomicAffairs approved ~5,559 crore in viabil-ity gap funding for a 1,656 km gas gridin the Northeast region. This is around60 per cent of the project cost of ~9,256crore for the pipeline in the region'seight states, by Indradhanush Gas Grid(set up by state-run Indian Oil Corpo-ration, Oil and Natural Gas Corpo-ration, GAIL, Oil India, and NumaligarhRefinery), is to supply industries,homes and transport vehicles.

“At present, of the 75 million stan-

dard cubic metres a day (mscmd) ofnatural gas produced in India, around15 mscmd or 20 per cent is from thisregion, from Assam, ArunachalPradesh and Tripura; we also havepotential in Nagaland and Manipur.The current decision is going to openup the possibility to explore this poten-tial,” said Dharmendra Pradhan, Unionminister of petroleum and natural gas.

The eight states are ArunachalPradesh, Assam, Manipur, Meghalaya,Mizoram, Nagaland, Sikkim andTripura. The government expects avail-ability of gas to boost industrial growthwithout spoiling the environment.

Centre okays ~5,600 crfor Northeast gas grid

Sebi had said theIL&FS defaultoccurred becauseof lethargicindifference andneedlessprocrastinationas well as laxityof rating agencies

DILASHA SETH


Amid a looming revenue short-age, the government has beguna nation-wide audit of goodsand services tax (GST) returnsfor the 2017-18 financial year.

It is sending notices tocompanies across the board,seeking details on GST andincome tax (I-T) returns,much ahead of the due datefor annual filing.

In the notices, 12 sets ofdocuments have been sought— details of business agree-ments on purchase and sales,sample copies of invoices andbills for the period of audit,returns of both taxes and ontaxes deducted at source, inputservice invoices, cost auditreports, electronic cash/creditledgers and the like.

“You are hereby directed toattend in person or through anauthorised representative con-versant with activities of thefirm/company…along withfollowing self-attested docu-ments and records…requiredfor audit,” reads one suchnotice accessed by BusinessStandard.

The instruction is thataudit of large units be com-pleted within seven workingdays, of medium units in fiveworking days and of smallones in three.

The GST Council had onDecember 18 extended the finaldate for filing of Forms GSTR-9(annual return) and GSTR-9C(reconciliation statement) for2017-18 to January 31, 2020,

from December 31, 2019.Rajat Mohan, partner at

AMRG & Associates, says:”Tax authorities are expectedto undertake an exhaustiveinspection of output taxes andinput taxes, to find short pay-ment and non-payment…Thiswill saddle industry honchoswith the task of jugglingbetween departmental auditsand new compliance initia-tives like e-invoicing, QR codeand new return filings.”

To stop revenue leakages, anagreement is expected betweenthe Central Board of DirectTaxes, Central Board of IndirectTaxes and Customs (CBIC) andthe GST Network (GSTN, infor-mation technology backbonefor this levy) to exchange dataon a quarterly basis, instead ofan annual basis.

“Notices have been sent tothose who have already filedtheir annual return and rec-onciliation statements. Morewill be sent out as and whenmore returns are filed,” said agovernment official.

Last month, the govern-ment had simplified theseforms, saying this would helptimely filing. GSTR-9 is to befiled yearly by those regis-tered under GST, comprisingdetail on outward and inwardsupplies during the relevantprevious year under differentheads i.e CGST, SGST, IGSTand HSN codes. This helps inreconciliation of data andreturns filed monthly orquarterly.

More on business-standard.com

Vikrant, 1st indigenous aircraft carrier,may be commissioned by early 2021

The manufacturing of the country's first indigenous aircraft carrierVikrant is currently under phase three which involves setting towork of machinery and other equipment and it is likely to becommissioned by early 2021, sources said. The nearly 40,000-tonne carrier is being built at the Cochin Shipyard. "Currently,phase three of the construction of Vikrant is under progress," asource told PTI. Navy Chief Admiral Karambir Singh on December 3had said that Vikrant will be fully operational by 2022. PTI<

Govt starts audit ofFY18 GST returns

UNDERGROUND METRO CORRIDOR

AHMED ABOULENEIN, PHIL STEWART

& PARISA HAFEZI

Baghdad/Washington/Dubai, 8 January

U S President Donald Trump saidon Wednesday Iranian missilestrikes on bases in Iraq had not

harmed any US troops stationed thereand damage was minimal, an outcomehe said showed Tehran wanted to pre-vent an escalation into conflict.

Iranian forces fired missiles at mili-tary bases housing US troops in Iraq ear-ly on Wednesday, saying it was in retali-ation for the killing in a US drone strike ofpowerful Iranian commander QassemSoleimani on January 3.

“All of our soldiers are safe and onlyminimal damage was sustained at ourmilitary bases,” Trump said. “Iranappears to be standing down, which is agood thing for all parties concerned anda very good thing for the world.” “Thefact that we have this great military and

equipment, however, does not mean wehave to use it. We do not want to use it,”the US president said in an address,flanked by Vice President Mike Pence,Defense Secretary Mark Esper andSecretary of State Mike Pompeo and mil-itary officers.

He urged world powers to quit a 2015nuclear accord with Iran that Washingtonwithdrew from in 2018 and work for anew deal, an issue that has been at theheart of rising tension betweenWashington and Tehran. Iran has reject-ed new talks.

There was no immediate reactionfrom Iranian officials to Trump's com-ments. The semi-official Fars newsagency described the US president'sremarks as a “big retreat from threats.”Iranian Supreme Leader Ayatollah AliKhamenei, who earlier on Wednesdayaddressed a gathering of Iranians chant-ing “Death to America”, said Iran's attackswere a “slap on the face” of the United

States and said US troops should leavethe region.

Iranian Foreign MinisterMohammad Javad Zarif had said thestrikes “concluded” Tehran's responseto the killing of Soleimani, who hadbeen responsible for building up Iran'snetwork of proxy armies across theMiddle East. He was buried in his home-town Kerman on Monday after days ofnational mourning.

“We do not seek escalation or war, butwill defend ourselves against any aggres-sion,” he wrote on Twitter.

Trump's reaction in the immediateaftermath of Wednesday's attacks hadbeen to say on Twitter that “All is well!”and that Washington was assessing dam-age. That early tweet and the commentby Iran's foreign minister had acted tosoothe some initial concerns about awider war and calmed jittery financialmarkets. Oil prices slipped back after anearly spike. REUTERS

6 WORLD MUMBAI | THURSDAY, 9 JANUARY 2020 1>

Gold breaches ~42,000-mark on Iran jitters

Killed 80 ‘US terrorists’: Iran; Trump denies

DILIP KUMAR JHA

Mumbai, 8 January

Gold opened above ~41,000 for10 grams (g) in India’s spot andfutures market, after a sharpjump in morning trade at inter-national markets.

In the first half, the price(inclusive of goods and servicestax) was ~42,300. The global spotmarket reached a high of $1,595an oz. The further jump onWednesday follows Iran’sattack on American soldiers’bases in Iraq. On the MultiCommodity Exchange (MCX),gold for delivery in Februaryopened at ~40,946 for 10 g androse to ~41,293 by the after-noon. Profit booking pulledthis down to settle the morn-ing session at ~40,663.

In the London spot market,the rise was to $1,611 an oz inearly Wednesday trade beforefalling to $1,577 by the after-noon.

Mumbai spot gold closed~312 higher at ~40,687 per 10 g.

Silver on the MCX closed onWednesday with a marginalgain; that of crude oil slipped 0.2per cent, following a globalmove.

High volatility in bullion has

prompted broker-ages to reduceleverage forclients. Sourcessaid they’dreduced this formost clients totwice the intra-day trading limit,as compared tofive times earlier.This was done toavoid possible defaults byclients, as seen in the past. Thereduction in intra-day leveragemight affect trading volumes onthe exchanges that deal with

precious metalsand energy.

“Many broker-ages have takenselective calls toreduce intra-dayleverage, to man-age risk in case ofhigh volatility.This is also in linewith a recent Sebi(the markets regu-

lator) circular which asked bro-kerages to give leverage toclients based on the margins ofthe respective exchanges andbrokers,” said a senior official

with a leading commodity bro-kerage.

“While bullion is getting sup-port on safe-haven buying, crudeprices did not move up much,due perhaps to less impact onoilfields of Iran’s missile attackon US military bases in Iraq.Gold, however, is overbought.Hence, a correction in goldprices cannot be ruled out, afterthe ongoing instability in WestAsia eases,” said GnanasekarThiagarajan, Director,Commtrendz.

Global financial markets sta-bilised after the overnight jolt.

SUBHAYAN CHAKRABORTY


A proposed preferential trade agree-ment (PTA) with Iran, being negotiatedby New Delhi to access the West Asiancountry’s lucrative domestic market,could be the latest collateral damage ofescalating tensions between Tehranand Washington DC.

Tensions between the US and Iranhave heightened since US PresidentDonald Trump ordered the assassina-tion of top-ranking Iranian GeneralQasem Soleimani last week. This hasworsened after Iran attacked US bases inIraq on Wednesday.

The looming threat of all-out war has sent global crude oil pricessoaring beyond $70 per barrel, a four-month high.

With the US asking all friendlynations to further cut economic tieswith Iran, the External Affairs Ministryfeels the deal with Iran should be puton the back burner for now. The PrimeMinister’s Office (PMO) feels the sameway and the Commerce Departmentwill be informed about this, a seniorofficial said.

Four rounds of negotiations werecompleted on the preferential tradeagreement (PTA) so far, with the last onewas held in March, 2019 in Tehran whereboth countries discussed a draft text ofthe pact, Iranian diplomatic sources con-firmed. But the next round, slated to beheld in New Delhi, never materialisedafter Trump separately dismantled theIran deal. US pressured India to pull outof all bilateral discussions with Iran.

A bilateral investment protectionagreement and a double taxation avoid-ance agreement were also under discus-sion. Tehran was confident of signingoff on all three by 2019 end, Ali Chegeni,Iranian ambassador to India, had toldBusiness Standard. On Wednesday,Chegeni welcomed any initiative byIndia to de-escalate the situation.

After pulling out of the RegionalComprehensive Economic Partnershippact in November, India has focused onbilateral pacts with the US and theEuropean Union. Commerce depart-

ment officials said they were also expe-diting other proposed bilaterals such asthe one with Iran. Policymakers werehopeful of the deal falling quickly intoplace because PTAs do not involvelengthy discussions.

New marketThe pact would have opened the Iranianmarket to Indian exports and strength-ened Iranian investments in the inter-national port of Chabahar, one of NewDelhi's key strategic assets in West Asia.

“Escalation of tensions between theUS and Iran will have implications forIndia’s exports to the nation,” SharadKumar Saraf, president of theFederation of Indian ExportsOrganizations (FIEO), said. FIEO saidIran was a key trading partner, and thesanctions on the country meant Iranianshipping lines were currently only tak-ing Indian consignments.

Exports to Iran stood at $3.51 billionas of 2018-19, rising for the third consec-utive year. India is the fifth largest sourceof imports for Iran, and sixth largest des-tination for exports. Saraf said Iran holdshuge export opportunities in sectorssuch as agriculture, chemicals, machin-ery, pharmaceuticals, paper products,man-made fibre.

While Indian exports of man-made

textiles are increasing slowly, Indianfirms have been unable to use marketaccess in pharmaceuticals, FIEO told thegovernment. Through the PTA, Indiaaimed to remove duties on certain strate-gic exports to Iran, hoping to beat theChinese in the process. However,imports were $13.52 billion, thanks to ahigh volume of crude oil.

Crude questionHowever, the proposed deal did notinclude tariff reduction or specialarrangement for crude oil. Officials saidrecent developments might not lead toreduction in petroleum supply to India,even if prices go up. According to thegovernment estimates, if crude oil priceschange by $1 a barrel, India’s import billwill increase by ~6,328 crore.

India stopped procuring crude fromIran in May. Official data showed oilimports from the country was 1.7 mil-lion tonnes (mt) in December 2019-20(financial year 2020 or FY20), constitut-ing 10 per cent of total crude imports,down from about 24 mt in FY19.

India has stepped up procurementfrom the US in the meanwhile. The oilministry plans to leverage growingimports from Saudi Arabia, Iraq and theUnited Arab Emirates to make up for thelack of Iranian crude, sources say.

RUPEE RECOUPS DAY'S LOSSES TO SETTLE12 PAISE HIGHER AT 71.70 AGAINST THE $

GLOBALLY, GOLD SURGED PAST THE $1,600LEVEL FOR THE FIRST TIME IN NEARLY 7 YEARS Govt may shelve Iran trade deal

ANEESH PHADNIS

Mumbai, 8 January

The aviation regulator onWednesday asked Indian airlinesto take all precautions in the air-space over Iran, Iraq, Gulf ofOman and waters of the PersianGulf, and reroute their flights toensure safety of passengers.

The decision comes afterIran fired missiles at two US airbases in Iraq, leading to height-ened tensions in the region.

Air India said its flights toEurope and the United States(US) could take 20-40 minuteslonger. The national carrier fliesto sixteen destinations inCanada, Europe and the US.

Route selection depends on var-ious factors, and during winterAir India’s west-bound flightsuse the Iranian routes to avoidlong spells of headwinds overnorthern latitudes.

But with the DirectorateGeneral of Civil Aviation onWednesday issuing an adviso-ry for Indian carriers to avoidIranian and Iraqi airspace, AirIndia’s US- and Europe-boundflights will take routes viaPakistan, Afghanistan andTurkmenistan.

The external affairs ministrytoo has asked Indian citizens toavoid non-essential travel to Iraq.

“We have held meetingswith the airlines concerned. We

have sensitised them to remainvigilant and take all precautionsincluding avoidance,” said ArunKumar, director general of civilaviation.

Air India spokespersonDhananjay Kumar said: “Thesafety of our passengers andcrew members comes first. Inlight of the tensions within theIranian airspace a decision totemporarily reroute flights ofAir India and Air IndiaExpress overflying Iran has

been taken.”“This may lead to increase

in flying time by approximately20 minutes for flights fromDelhi and 30-40 minutes forflights from Mumbai.”

IndiGo said it does notexpect any impact as its flightsdo not fly over Iran and Iraq.

“Currently we have normaloperations and expect these tocontinue as usual. We are mon-itoring the situation closely,”IndiGo said in a statement.

“The routes to Gulf operatethrough Oman, Saudi Arabiaand Persian Gulf, while theroutes to Turkey fly over thenorthern routes over theCaspian sea and head directlyfrom there to Istanbul.”

However, the increase in fly-ing time coupled with therecent hike in aviation turbinefuel costs will push up expensesof the loss-making airline.

Avoid West Asia, reroute flights: DGCA

MCX GOLD FUTURES~/10 gram

MIXED SIGNALS

Compiled by BS Research Bureau; Source: Bloomberg

Jan 8 % Chg1D

America ( Jan 7)

Dow Jones US 28,583.68 -0.42S&P 500 US 3,237.18 -0.28NASDAQ US 9,068.58 -0.03Europe - 18:30 IST

FTSE 100 Britain 7,576.17 0.03DAX INDEX Germany 13,267.56 0.31Asia

NIKKEI 225 Japan 23,204.76 -1.57SHANGHAI SE COMPOSITE China 3,066.89 -1.22

Iran’s Supreme Leader Ayatollah Ali Khamenei is seenspeaking on a TV screen, as investors sit and monitor the shares in Kuwait City, on Wednesday PHOTO: REUTERS

TOP IMPORTS

� Crude oil� Inorganic, organic chemicals� Fertilisers� Fruits (pistachio, dates)� Iron & steel

TOP EXPORTS

� Rice� Soyabean meal� Organic chemicals� Electronic equipment� Tea

�Exports �Imports ($ bn)STATE OF TRADE WITH IRAN

2014-15 2015-16 2016-17 2017-18 2018-19Source : Commerce and Industry Ministry

13.13

8.95

4.17

9.06

6.27

2.78

12.88

10.50

2.37

13.70

11.10

2.60

17.00

13.50

3.50

Comes in wake of USpressure on friends to cut ties with Iran

AFP/PTI

8 January

Fugitive auto tycoon Carlos Ghosn on Wednesday accusedNissan and Japanese prosecutorsof plotting against him as he stagedan impassioned defence at his first public appearance since fleeingthe country. In a combative news conference in Beirut, the for-mer Renault-Nissan boss slammedthe financial misconduct chargeshe faced in Japan as “baseless”. He said it was like ‘escape or die in Japan’.

“The collusion between Nissanand prosecutors is everywhere,”Ghosn told a large crowd of journal-ists at an appearance that lastedmore than two hours during whichhe fielded questions in English,French, Arabic and Portuguese.

"There was no way I was going tobe treated fairly ... this was not aboutjustice. I felt I was a hostage of thecountry that I have served for 17years," he said.

Ghosn accused prosecutors andNissan, one of Japan's biggest car-makers, of "systematic leaking of

false information" and "intentionalwithholding" of important factsrelated to the case.

That meant he was "presumedguilty before the eyes of the worldand subject to a system whose onlyobjective is to coerce confessions,secure guilty pleas," he added.

Japanese prosecutors quickly hitback, slamming Ghosn's claims as"categorically false".

"Ghosn's allegations completelyignore his own conduct, and hisone-sided criticism of the Japanesejustice system is totally unaccept-able," the Tokyo prosecutor's office

said in a statement.The car magnate — for years

venerated in Japan for turningaround once-ailing Nissan — fledwhile awaiting trial on chargesincluding allegedly under-report-ing his compensation to the tune of$85 million.

Ghosn holds a press conference,says it was escape or die in Japan

Boeing 737 crashes in Iran, 176 dead

A Ukraine International Airlines Boeing737 crashed, killing all 176 people aboardshortly after taking off from Tehran’sImam Khomeini airport. Iran will not givethe black box of the crashed Ukrainianairliner to planemaker Boeing, the headof Tehran’s civil aviation organisationsaid on Wednesday. Ali Abedzadeh alsosaid it was not clear which country Iranwould send the box to so that its datacould be analysed, semi-official Mehrnews agency reported PHOTO: REUTERS

| Ukraine InternationalAirlines’ Boeing 737-800,bound forUkraine crashed at6:18 am after takeoff fromImam Khomeini airport

| Jet climbed to 7,900 ft, wastravelling at 300 miles anhourwhen it disappeared,FlightRadar24 said

| The airline was most likely

brought down byan enginefire, Tehran transportauthorities said

| The plane, delivered new in2016,was in good conditionand had its last shop visit onJanuary 6

| The plane is an olderversionof the 737 that predatesBoeing’s grounded Max model

WHAT HAPPENEDFormer Nissan chairman Carlos Ghosn during a news conference in Beirut PHOTO: REUTERS

‘IRAN STANDING DOWN’� Iran is a leading sponsorof terrorism

�No Americans were harmed in theattack.All soldiers were safe, onlyminimal damage sustained at military bases

� Iran appears to be standing down,which is a very good thing for the world

� Iran can be a great country.Peaceand stability cannot prevail in West Asiaas long as it continues to foment violence

� It must abandon nuclearambitionsand end its support to terror

�The world must unifyand send amessage to Iran’s regimethat theircampaign of terror won’t be allowed to go forward

�NATO must become more involvedin West Asian process

Will impose powerful economic sanctions on Iran: US prez

8 ISSUES AND INSIGHTS>

MUMBAI | THURSDAY 9 JANUARY 2020

> CHINESE WHISPERS

SUBHOMOY BHATTACHARJEE

The biometric collection of atten-dance records of governmentemployees remains Delhi-cen-

tric almost five years after the schemewas rolled out. Just 2,33,994 employeesare registered on the Aadhaar-enabledBiometric Attendance System (BAS)according to its website, less than 7 percent of the total civilian employeesemployed by the Indian government.Almost no state uses it to track itsemployees’ attendance record.

The BAS is part of thisgovernment’s agenda toleverage technology toensure that its benefitsaccrue to large swathes ofthe population. Meant tousher in a behaviourchange among govern-ment employees, it hasclearly not travelled far.

The behaviour changethat has taken off insteadis the electronic paymentsystem. In the past twoyears, it has become the most visiblemanifestation of the government’sDigital India programme. The plat-form-agnostic payment channelsdeveloped by National PaymentsCorporation of India has logged over ~2trillion worth of transactions inDecember 2019, almost two thirds ofIndia’s GDP.

Few Indians might know the fullform of acronyms such as NACH(National Automated Clearing House),

which enables those high-volume inter-bank electronic transactions, or whatBHIM (Bharat Interface for Money). Yet,they use it massively, often interchang-ing it with apps such as Google Pay orPaytm, all the while depending on justtheir mobile numbers and a VirtualPayment Address. It has been an explo-sive growth from an environment of just35 banks recording a transaction valueof just ~700 crore in December 2016.

Between the success of the electron-ic payments and the failure of the bio-metric attendance are ranged the story

of the various technologicalthrusts tried by the NarendraModi government over itsfive-and-a-half year spell. Ofthe 22 schemes that aim to“transform India into a digi-tally empowered society andknowledge-based economy”listed by the ministry of elec-tronics and information tech-nology, those that serve aclearly defined market, havescored. Those meant to makebehavioural changes for

which there are no clear markets tooffer those improvements, have strug-gled to become viable.

Consider Bharat Net. It is the planto connect all the 2,50,000 gram pan-chayats with optical fibre cables to pro-vide at least 100 Mbps connectivity. Sofar, 3,80,988 kms of the fibre has beenlaid out connecting more than half(1,40,668) of those gram panchayats.This connectivity can bring a host ofbenefits to the villages — except the vil-

lagers are not sold on the idea. They arefar more comfortable tracking the sameinformation on their mobiles, whichexplains why the data plans sold by thetelecom companies are so hotlydemanded. Data through wires to bebrought by government agenciesremains locked behind the doors of thepanchayat offices. There are no takers.

On the other hand, there are manytakers for the Online Registration

System (ORS) under e-Hospitals.Though this initiative has not attractedmuch publicity but 237 hospitals arealready on board. It has cut down thoselong familiar queues in governmenthospitals. Of the 32,00,000 onlineappointments made till this week, morethan 40 per cent of them for the AllIndia Institute of Medical Sciences,Delhi. It is the most visible sign ofprogress for these patients just as thee-passport service has become for thosehigher up on the income ladder.

At the other end is a bright idea likeDigital Locker, which has not caught thepopular imagination. It provides a meansto store all documents of a person in adigital repository. So the person essen-tially carries around just a url. There are32.3 million names registered with theDigilocker facility. Despite the impressivenumbers, few universities or institutionsremain satisfied with being shown theurl. They still believe in the paper trail.

In Modi’s first term, there was atechnological innovation almost everymonth. Other than the list above, therehas been Meghraj, to access the benefitsof cloud computing, e-Taal, DigitalVillage, Soil Health Card, PradhanMantri Gramin Digital SakshartaAbhiyaan and Government e-MarketPlace (GeM). Many are still under trial.

The reasons are clear. It is difficultto figure out for which markets theseschemes aim to provide opportunities.So even though they are smartly con-ceived tools to ensure either digitalaccess, digital inclusion, digitalempowerment or bridge the digitaldivide, they remain mostly on paper.

For instance the money availablefor Pradhan Mantri Gramin DigitalSaksharta Abhiyan, a training pro-gramme to make over 60 million ruralhouseholds digitally literate, is

~2351.38 crore, all states combined.The money actually spent was ~100crore in 2017-18 and ~438 crore in 2018-19. There is no clear evidence for therural population whether the trainingwas linked to jobs.

This is the same reason that anotherrelated project meant to set up at leastone Common Services Centre (CSC) inevery gram panchayat has stuttered.These CSCs were to be operated by localentrepreneurs to provide eServices torural citizens. As recently as October2019, the government’s special purposevehicle to run these centres, CSC e-Governance Services, is working on apilot project to extend tele-medicine forAyush ministry, through them. Thereare few takers for the 350 digital ser-vices each of these CSCs offer. Mostpeople use the CSCs to downloadmovies, instead.

The stiffest challenge that wouldultimately decide the fate of the gov-ernment’s Digital India programme istied with the fate of the National Policyon Electronics, announced a year agoin February 2019. Here, the market link-age is quite evident. According to datafrom October 2019, the government hasapproved 233 applications with an esti-mated investment of ~63,610 crore. Tosupport those investments, there areplans for 23 electronic manufacturingclusters spanning 15 states.

By Indian standards the moneyoffered as grants in aid of ~1,577 croreto get these clusters going, is substan-tial. The policy regime such as auto-matic approval for 100 per cent FDI inthe sector is one of most liberal byIndian standards. Will India emergeas one of the global hubs for electron-ics manufacturing? The results wouldnot be in for at least another coupleof years.

The highs and lows of Digital IndiaSchemes that address clear market demandhave clicked; those that focus on behaviouralchange, not so much

Resuming a fightIt hasn’t been long that a video clip of theBharatiya Janata Party’s (BJP’s)Jharkhand MLA C P Singh compelling afellow MLA from the Congress, IrfanAnsari, to chant “Jai Shree Ram” outsidethe Assembly building went viral. OnWednesday, the concluding day of theinaugural session of the newlyconstituted Assembly, the two were partof a stormy argument as the scene shiftedto inside the House. Irfan fired the firstsalvo this time when he blamed BJPworkers for the infamous Tabrez Ansarilynching during the party’s rule. At this,Singh asked him to apologise and theSpeaker, too, asked him to expressregret. Irfan refused and he said that hehad not defamed the party or theRashtriya Swayamsewak Sangh. Thematter escalated when the BJP MLAincensed Irfan further by questioning his“status” and asked him as to what wouldbe the latter’s reaction if someone calledhim a terrorist. Matters threatened todeteriorate further when other membersstepped in and calmed them down.

BJP’s CAA ‘padyatra’Even as the anti-Citizenship AmendmentAct (CAA) protests continue to makeheadlines and drawing in protesters fromall walks of life, the ruling BharatiyaJanata Party (BJP) has geared up tocounter the narrative with a "padyatra" inUttar Pradesh. Starting Wednesday, topparty leaders including the two UP deputychief ministers — Keshav Prasad Mauryaand Dinesh Sharma — as well as state BJPunit president Swantra Dev Singh apartfrom other senior cabinet ministers wouldhit the street in different districts. Theywill interact with the common man and“expose” the agenda of the Opposition.The "padyatra" programme wouldcontinue till January 14 and would alsocomprise public meetings at therespective places. A few Union cabinetministers would also participate in theprogramme in UP.

Targeting Deepika PadukoneDeepika Padukone’s visit to JawaharlalNehru University (JNU) on Tuesday — insolidarity with the students injured inSunday’s attack in the campus — has furtherpolarised social media. Practically, it’s likeyou are either with Padukone or against her:There is no middle path. And the list of thosewith extreme viewpoints includes seniorgovernment functionaries, some of whomlashed out at the actor a day later. "A countrywhere Kanhaiya claims to be a student,Deepika is a governance expert and Anuragteaches civilisation values," tweeted AnujGupta, officer on special duty to Unionminister Piyush Goyal. Goyal, incidentally,was instrumental in organising a meeting ofBollywood celebs to rake up support for theCitizenship Amendment Act. It didn’t takelong for the internet trolls to take a cue andget all riled up, calling for a boycott of herupcoming movie Chhapaak. To back theirclaims, they had cancelled their tickets to thefilm, which releases on Friday, and manysocial media users (including some followedby PM Modi) posted screenshots.However, itdid not take the Twitter users long to figureout that all the shots were of tickets from thesame show and seats at the same movietheatre in Vadodara.

As economic slowdown starts tolook more and more real thanever before and signs of invest-

ments fade, the Union Budget is beingincreasingly seen as a fountain of hope.The customary pre-Budget meetingsbetween the government and theindustry have taken place, but with adifference. Instead of the finance min-ister meeting business heads, the primeminister has done so. Of course, theseinteractions were not labelled as pre-

Budget meetings, but the timing can-not be missed. While the picture ofwho’s who of India Inc standing alongside the PM is sending out a messagein the current times of distress, the nextgovernment step, possibly in theBudget, will determine India’s invest-ment roadmap and job creation poten-tial. The PM has given a call to theindustry for unleashing the animalspirits, but there aren’t any takers yet.

In that backdrop, there’s buzz insome unlikely quarters of the govern-ment, working to be a part of the invest-ment and job creation kitty. Forinstance, the water-related ministrieshave hardly drawn much attention inthe past. But now, the recently coinedJal Jeevan Mission, with the goal of giv-ing functional tap connection to allrural households by 2024, is warmingthings up. Quite like Ayushman Bharat,another flagship project, had added azing to the Union Health Ministry dur-ing Narendra Modi government’s firststint, Jal Jeevan’s “tap for all” initiativeis attracting international audience and

more to the umbrella water ministryduring NDA 2.0.

While it’s been the job of some ofthe key economic ministries to brain-storm on boosting investment and cre-ating employment, officials managingthe latest water mission are setting sim-ilar goals. The idea is that Jal JeevanMission and Jal Shakti Abhiyan — anintensive water conservation campaign— must converge to make the best ofthe government focus on water. Tuckedin the interiors of New Delhi’s CGOcomplex, the headquarter of the watermission is a scene of activity till lateevening on a typical working day.Bharat Lal, the mission director of JalJeevan, does a quick calculation tomake a point. Every village will get aninvestment of around ~50 lakh from theJal Jeevan Mission, which has a totalproject cost of ~3.6 trillion with theCentre’s share at a little over Rs 2 tril-lion. Close to 700,000 villages across700 districts are expected to be coveredby the scheme. The managers believethe project will create jobs at several

levels, from engineering to masonry,planning and designing to factorywork. This could all help boost govern-ment’s rural infrastructure spendingwhen it’s needed the most, they believe.The numbers show that out of 178.7 mil-lion rural households in India, about146 million are yet to get householdwater tap connections.

Since it’s a Centre-state collabora-tion, the question that comes to mindis whether Jal Jeevan will face a similarresistance from non-BJP states thatAyushman Bharat has witnessed.Surprisingly, the people in charge saythe response from the states, includingthose ruled by opposition parties, hasbeen more than positive. Who doesn’twant to give water connection to allhouseholds as it’s the state responsibil-ity to provide water, asks Lal, who’s inthe midst of striking many partnershipsand collaborations to make Jal Jeevana success.

Another comparison that one can’tmiss is with Swachh Bharat, that hasoccupied the centrestage for the pastfive years. While both are about chang-ing behavior, the consensus seems tobe that supplying drinking water to all

is a more complex subject. While thePM seems to be keeping a close trackof the progress like he has been doingfor Swachh Bharat and AyushmanBharat, the lessons learnt from the pop-ular schemes are coming handy. Thatincludes how to track and transferfunds and go for targeted delivery.

Among other things, Aadhar of thepeople getting access to tap connec-tions will be used to monitor deliveryof the project. It, however, doesn’t meanthat one can’t get a tap if he doesn’thave an Aadhar card. It’s a universalcoverage plan, officials quickly explain.Rural water may not immediately haveany connect with high-end technology,but there’s plenty being contemplated— from geo-tagging for real time mon-itoring to sensor-based measurementsystem along with hydro geo maps. TheDepartment of Space too will have arole in it.

To make the latest flagship schemeclick, the involvement of the local peo-ple (mainly gram panchayat) will bekey. Partnerships with states and otherstakeholders like NGOs, internationalorganisations and industry too willdetermine if 2024 — the year thatIndia goes for the next general election— is a feasible target or not to connectall rural households with water taps.On the way, there’s hope for new jobsand investments.

Channelling into a new streamBoosting investment to creating employment: Officials managing theJal Jeevan Mission are setting goals beyond universal water supply

> LETTERS

When ‘repairs’ hurtThe government has brought GDPgrowth to the slowest in 11 years, aresult of its fixated politics and pre-scriptive economics. This regimecame in by building up suspicionover every sphere of governance byits predecessor. However, it endedup implementing ideas such asdemonetisation, only to find thosedisproved and, in the process, knock-ing out the cornerstone of our cashcentric architecture. It had no inklingof the ensuing collapse of every facetof our economy.

More than a flagging economy, itis the feckless efforts at its repair thatis a bigger concern and it is madeworse by the government’s apathy toeconomists and its disregard for theautonomy of pivotal planning andoversight institutions.

There is frenetic activity but littleprogress in the economy ,made worseby the unsettled socio political envi-rons induced by the energetic prop-agation of inconsequential themes .

R Narayanan Navi Mumbai

Long way to goThis refers to “Nirbhaya case convictsto be hanged on Jan 22” (January 8).After a seven-year-long legal battle,Nirbhaya’s family will finally heave asigh of relief and her departed soulwill be in peace. Perseverance from

her par-ents,mediapressureand pub-lic sup-port allthe way,have alsocon-

tributed to such a verdict. But todayis also the time for some introspec-tion: Whether justice could have beendelivered faster or has our govern-ment done enough to ensure womenare safer travelling in public trans-port, especially post sunset, now.Have CCTVs and police patrollingcovered all such corners of thenational capital? We will find that westill have a long way to go. And wehave not learnt our lessons despitethis horrific and brutal assault on the23-year-old physiotherapy student.Security measures promised afterthat incident don’t seem to haveturned into reality till date. Hopewhichever party forms the govern-ment in Delhi next does not put thisissue on the back-burner again.

Bal Govind Noida

Letters can be mailed, faxed or e-mailed to: The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar Marg New Delhi 110 002 Fax: (011) 23720201 · E-mail: [email protected] letters must have a postal address andtelephone number

As we conclude an eventfuldecade of profound social, eco-nomic and political transforma-

tion, and enter a new one full of moreuncertainties, how do we assess thestate of the Indian impact investingsector at this juncture? The periodassumes significance because it hasbeen 10 years since the microfinancecrisis. How do we then assess thepotential of impact investing to helpthe country achieve our 2030Sustainable Development Goals (SDGs)targets over the next decade?

Today, there are three major trendsshaping the development finance spacewhich will together determine thefuture of using private capital for publicgood. And each of them has implica-tions for the design of the proposedNational Social Stock Exchange:

1. Blurring of lines between impactinvesting and commercial venture cap-ital2. Consensus on what constitutesimpact (filter), how to measure it (rat-ing) and how it can be priced (credit)among investors and philanthropists

3. Development of financial instrumentsfor non-profits and non-market-return(or muted return) social enterprises

The overlap between impact andmainstream venture capitalist (VC)investment is here to stay. It has beenincreasing for some time, as pointedout in the 2017 McKinsey study, whichmakes sense, because social enterprisesthat are initially funded by impact cap-ital and are successful in demonstrat-ing traction and defensibility, are ableto attract the commercial capital theyneed to further scale. With more exitsfrom such enterprises, and availabilityof significant VC capital in India, evenlarge private equity titans havelaunched impact funds, and more willdo so in the future.

What does this mean? One, that highquality entrepreneurs will have moreoptions to choose from, and impact andcommercial fund managers will findsynergies in working together. Two, thatsocial enterprises which are not able todeliver a market return because of theinherent structural challenges in thesectors where they operate, will find itharder to raise venture capital funding,impact or otherwise. And three, impactfunds will need to work harder to dif-ferentiate themselves from the broaderVC ecosystem, most importantly by bet-ter measuring what they call impact.

Impact management should be seenat three levels. First, having a basic impact“filter” to define what is an impact invest-ment or not. Once this filter is met, alldeals that make it through are evaluatedpurely on a financial basis. Most impactfunds go beyond this and try to measureand report their impact at an enterpriselevel in terms of outreach (number of low-income customers or suppliers) anddepth (e.g. average income increase for a

farmer or artisan in their supply chain),with additional metrics relating to cli-mate or gender equality.

The problem is not just the lack ofconsistency in measurement or theneed for an external social audit mech-anism but of a missing consensus onan impact “rating” that measure the rel-ative degree of impact within andacross diverse social sectors such aseducation, healthcare or waste man-agement. What is needed is industrylevel and tri-sector collaboration todefine common standards.

The good news is there has beenmuch progress globally on this frontwith initiatives like the ImpactManagement Project, a five-pointframework that articulates what consti-tutes impact, and metrics such as theImpact Investment Reporting Standards(IRIS). In India, the Impact InvestorsCouncil is driving the adoption of bestpractices on common reporting stan-dards and aggregating the impact met-rics of Indian funds. Ideally, impactframeworks need to be agnostic of thedelivery-model, using a commonimpact criteria across for- and not-for-profits to compare relative social per-formance. The third step would be if themeasurement was credible enough toenable trading of an impact “credit”, acurrency that monetises the value ofsocial impact.

Effective impact measurement isalso a driver of the third major trend:The innovative use of blended financeinstruments to fund social enterprisesthat can’t deliver market returns buthave delivery models to achieve scalablesocial outcomes. Several pilots over thelast few years have shown that a creativecombination of philanthropic and com-mercial investments can help social

enterprises raise capital through struc-tures such as social success notes, devel-opment impact bonds and various guar-antee arrangements. There is now avibrant ecosystem of intermediaries(bond arrangers, measurement agen-cies) and funders (both high-net-worthindividuals and family offices as well asglobal foundations and donors) eager touse these instruments.

It is in light of these three major trendsthat we can consider the potentially cat-alytic role of the Social Stock Exchange(SSE), which can allow us to tap into thegrowing pool of impact money globallyand channel it to the highest impactenterprises in the country. The SSE, inaddition to listing equity shares of for-profit social enterprises, could also listblended finance instruments of NGOs.The SSE needs a consistent impact filterto determine who gets to list and is incen-tivised, to ensure a credible pipeline ofenterprises. And the SSE needs not justphilanthropists but commercially-focused investors, with and without theimpact tag, to enable liquidity.

Over the last decade, the impactinvestment industry has alreadydemonstrated success in financial inclu-sion and green investing, transformingfinancial intermediation for the poorand driving a carbon-conscious agendaacross diverse sectors spanning electri-fication, clean cooking, waste, sanita-tion, water, agriculture, mobility, air pol-lution and more. Creating a common“impact credit” may be much harderask, but it is certainly something thatwe must aspire to if we are to effectivelywork together to address our develop-ment targets for 2030.

The author leads Asha Impact, an impactinvestment and policy advocacy firm

The future of impact investingINSIGHT

KARTIK DESAI

NOT FOR PROFITNIVEDITA MOOKERJI

> HAMBONE

TAKETWOANALYSIS BEHIND THE HEADLINES

Three major trends to consider when designing the Social Stock Exchange

WHAT CLICKS

*Renamed and expanded in 2015Source: Parliament replies and MeiTY website

Name of Year of Impactscheme launchBharat Net 2012* 1,40,668 gram

panchayats Digital payments 2016 ~8125.49 crDigital locker 2015 32.3 mn Digital village 2018 796 Gram

PanchayatsGeM 2016 2,99,544

sellers registeredJeevan Praman 2014 30.6 mn

certificates ORS e Hospital 2018 3.252 mn

appointmentsissued in 344 hospitals

PMGDISHA 2017 23 mnpeople trained

Electronics 2016 ~63,610 crManufacturing onwards proposed

investment (private sector)

e-procurement 2017 3.9 mn tenders issued

Meghraj 2014 1,155 departmentsonboarded

MyGov 2014 0.95 mn users

OPINION 9> STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

The first advance estimates of gross domestic product for the currentyear, released by the government on Tuesday, showed that growth inthe Indian economy will slow to 5 per cent, compared to 6.8 per centlast year. Since most high-frequency indicators suggest that a sharp

rebound is unlikely in the near-term, stakeholders are looking for policy support.While it will take a few weeks to know to what extent the government is willingto support growth through the Budget, markets have been hoping that after apause in December, the Reserve Bank of India (RBI) will lower policy interestrates to push up economic activity when the Monetary Policy Committee (MPC)meets next. Such expectations, however, were dented by the remarks made byRBI Governor Shaktikanta Das on Tuesday. Mr Das rightly said that persistentlyhigh inflation affects the economy’s allocative efficiency and obstructs growth.He also reasoned that high inflation worsens income distribution by loweringthe real income of the poor.

The MPC’s surprise move in December was partly because of higher con-sumer price inflation, which touched a 40-month high of 5.54 per cent inNovember. Economists predict that it will now cross the 6 per cent mark —the upper end of the target band. Currently, retail inflation is largely beingdriven by food prices, as core inflation is at a lower level, reflecting lowerpricing power and weak demand in the economy. So, should the rate-settingcommittee look through the factors driving inflation and reduce rates to sup-port growth in its next meeting? It is important to note that the mandate ofthe RBI is to target headline inflation.

As the outcome of the December meeting showed, it will not be easy forthe MPC to cut rates. Minutes of the meeting showed that the committeewas not worried about vegetable prices alone, and as Mr Das noted: “…thereis a need for greater clarity as to how the overall food inflation path is goingto evolve, as there is some uncertainty about the outlook of prices of certainnon-vegetable food items such as cereals, pulses, milk and sugar.” He alsohighlighted the lack of clarity on how the telecom tariff hike will play out.Further, the upcoming Budget will play a big role in the next monetary policydecision. A large fiscal slippage will naturally deter the MPC from cuttingpolicy rates. A surge in crude oil prices, owing to tension in West Asia, willalso increase risks to the inflation outlook.

There is no doubt that the Indian economy needs support, but it is worthdebating whether it makes sense to risk financial stability to support growthin the short run. Will it pay to have an excessively accommodative fiscal andmonetary policies, along with an abundance of liquidity in the system?Further, what are the chances that the policy impetus will quickly reviveeconomic activity and India will be able to withdraw the stimulus before anexternal shock hits the economy? It would be advisable to maintain a finebalance between supporting growth and preserving financial stability. Thepolicy target should be to attain a durable recovery in economic growth,which may not come with another rate cut alone.

Increasing green coverAmbiguity in the definition of forests should be removed

The government’s forest management record, as portrayed in theState of Forests in India 2019 report, seems a blend of some notablesuccesses and a few glaring failures. While the country’s overallgreen cover has increased by 5,188 sq km — an area of the size of

Delhi and Goa put together — the existing forests are thinning and severalnorth-eastern states and other regions inhabited largely by tribals have lostsome of their forests. This bodes ill for the livelihood security of the largeforest-dependent population. It also has socio-economic, and law and orderimplications as many of these tracts are controlled by Naxalites. Worse still,the loss of forests in the north-east is attributed, among other factors, toclearance of forests for the illegal cultivation of poppy, a crop used widely toraise resources to finance the militancy. Well-advised strategies are, therefore,called for to prevent diversion of forestland to any non-forest use other thanessential infrastructure and developmental programmes in these regions.

On the upside, the report provides evidence of a sustained long-termuptrend in India’s forest cover. Only a few countries can boast of such a feat.India’s total green cover now stands at over 8.07 million sq kms, or 24.6 percent of the entire territory. It inspires confidence in fulfilling — or reachingfairly close to — the country’s commitment under the Paris ClimateAgreement to create an additional carbon sink of 2.5 to 3.0 billion tonnes inthe forest sector by 2030. However, given the slow pace of expansion in theforest cover, cumulatively just over 2 per cent in the past three decades,hitting the ultimate goal of having 33 per cent of the geographic area underforests and trees seems a tall order.

But the fact also is that the report’s numbers and conclusions cannot betaken at their face value. The total forest area figure, for instance, includesthe “tree cover” comprising the likes of commercial plantations, orchardsand the scattered trees on roadsides and elsewhere. The monoculture ofthese trees, obviously, is not the same as typical forests, though the trees alsoserve the environmental objectives. However, the much-needed ecologicalbiodiversity that is associated with forests is missing in the tree covers.

The inclusion of plantations in the forest data can, indeed, be blamedon the lack of a proper definition of forests. Each organisation sets its ownparameters for treating a piece of land as forest. The Forest Survey of India,which prepares the biennial State of the Forests report, counts any patch ofland as forest if it is more than one hectare in size and has a tree canopydensity of above 10 per cent, irrespective of the ownership or legal status ofthe land. States have their own norms for defining a forest. In some states anarea once listed as a forest in the revenue records remains so even if it losesits entire vegetation. The Supreme Court, on the other hand, had decreed ina landmark judgment in 1996 that the term forest must be understood accord-ing to its “dictionary meaning”. Such confusion is unwarranted for a produc-tive and ecologically critical sector like forests. It is, therefore, time to formulatean unambiguous and universally accepted definition of forests to get a truepicture of the country’s forest resources.

Volume XXIV Number 105

MUMBAI | THURSDAY, 9 JANUARY 2020

What might 2020 hold for us at both theglobal level and in India? As I try to peerthrough the fog of uncertainty and insuf-

ficient knowledge, I am struck by the long shadowscast by the year just ended. 2019 was not a goodyear, either for global cooperation, the world econ-omy or the Indian economy. Let me share somethoughts on each of these.

Global political and economic cooperationAcross the entire spectrum of global cooperation,

2019 witnessed substantial deteri-oration. In large measure, thisreflected the cumulative impact ofUS President Donald Trump’s deci-sive and sustained policy shift since2017 in favour of unilateralism ininternational affairs — and awayfrom institutions, treaties and prac-tices of multilateral cooperation.Consider three examples.

First, in the domain of interna-tional trade, there are the well-known “trade wars” launched byTrump against China, Europe andsome other countries. These are stillrumbling on, taking their toll onglobal trade, investment and growth.The recent announcement of a prob-able “phase 1” agreement with China may help,though there is little clarity about how much andfor how long. Perhaps, as important for the long runis the American undermining of the Appellate Bodyof the World Trade Organization (WTO) for disputesettlement, often described as the “jewel in thecrown” of the institution. By systematically blockingappointments of replacements to the normal sev-en-judge membership of this body, the Trumpadministration finally ensured that membershipwas down to just one by December 11, 2019, therebyensuring that the minimum three-judge require-ment for panels for adjudicating trade disputes

between WTO members would no longer be met.In effect, the Appellate Body ceased to function,placing world trade in the unprecedented and dan-gerous situation of having no effective dispute set-tlement mechanism. The potent negative effectswill manifest in 2020 and beyond.

Second, the 2015 “Paris Agreement” on ClimateChange has thus far achieved modest results by wayof practical follow-up measures to curb global carbonemissions, which cause global warming, damagingclimate change. Again, the Trump administration

is a major culprit having given for-mal notice of unilateral US with-drawal in June 2017 and havingworked actively against the thrustof the agreement both throughnational policies and uncooperativeparticipation in annual UN climatesummits. The latest such summit,COP 25 in Madrid last month, end-ed without recording significantprogress. This despite the prolifer-ation of scientific reports pointingout ominous, ongoing and antici-pated consequences of carbonemissions and climate change. In

a nutshell, we seem to be well onour way to a disastrous 3°C plusincrease in global temperatures by

2100, despite the international agreement/aspirationto keep the rise below 2°C (preferably 1.5 °C).

Third, the most important global public good —world peace— came under increasing strain during2019 with the demise of the 1987 Intermediate-RangeNuclear Forces Treaty (between US and Russia) inAugust 2019, the loss of momentum to renew thecritical New START (Strategic Arms ReductionTreaty) treaty (expiring February 2021), the lack ofprogress with agreeing limits on North Korea’s nucle-ar weapons programme, and the sharply rising con-flict and tensions between Iran and the US (and herallies, Israel and Saudi Arabia). The US withdrew

unilaterally from the 2015 multi-country IranNuclear deal in May 2018 and ratcheted up severesanctions against Iran, and the American assassi-nation of Iran’s top general last week raised theprospect of a major West Asian conflict in 2020.

World EconomyIn 2019, world economic growth (at marketexchange rates) slowed markedly to 2.5 per cent,essentially because of a significant, synchronisedslowdown in three big economies. The growth ofthe $21-trillion US economy slowed to 2.4 per cent,that of $19-trillion European Union (EU) to 1.5 percent and $14-trillion China to 6.1 per cent. Together,this “big 3” account for over 60 per cent of worldgross domestic product (GDP). Major causes of theslowdown include: The waning of the tax-cut stim-ulus in the US, the major trade wars, high total debtin China and a sharp slackening in EU’s mainengine, Germany.

Despite anticipating continued deceleration inUS and China and little change in EU, the October2019 IMF World Economic Outlook foresees a smalluptick in world economic growth to 2.7 per cent in2020, mainly attributable to better expected per-formance in some large developing countries suchas Brazil, Mexico, Turkey, India and Saudi Arabia.With the sudden ramping up of the conflict in WestAsia in the last fortnight, these expectations nowlook too rosy. Depending on how the conflict andits ramifications evolve, it is quite possible thatglobal economic growth in 2020 may be even slowerthan in 2019.

The Indian economyIn the six quarters to September 2019 India’s eco-

nomic growth slumped from 8 per cent to 4.5 percent and the government now expects full fiscalyear 2019-20 growth to clock only 5 per cent, thelowest in a decade. (These official estimates mayover-estimate real growth, given trends in high fre-quency economic indicators, the much-discussedfrailties of the 2011-12 base national income seriesand the recently published research by former chiefeconomic adviser, 2014-18, Arvind Subramanian.)The underlying causes of the sharp slowdown arewidely debated. They probably include: Continuinghigh stress in the financial sector and high publicsector borrowings, which have together damped pri-vate investment and consumption; a falling shareof exports to GDP because of declining competitive-ness and failure to plug into global value chains; asharp slowdown in manufacturing; and major prob-lems in key service sectors such as telecom, aviationand electric power.

Even before the recent growth slump, the latestofficial data for employment and unemployment,for 2017-18, showed a very poor job situation, withless than half the working age population participatingin the labour force, high levels of youth unemploymentand widespread underemployment. This unhappysituation has almost certainly worsened because ofthe steep growth slowdown in the last two years.

The prospects for a swift rebound in the growth ofoutput and employment are not good, given the under-lying policy and institutional constraints. In 2020, itis likely that economic growth will remain in the orderof 5 per cent. It could be significantly lower if the con-flict in West Asia escalates seriously.

The writer is honorary professor at ICRIER and former chiefeconomic adviser to the Government of India. Views are personal

Something is surreal in the state of business inIndia, and nothing captures it better thanTuesday’s newspapers. The headlines were

dominated by report on the attack by armed goonstoo cowardly to show their faces against studentsat Jawaharlal Nehru University (JNU). The turbu-lence of those photos stood in stark contrast to aposed snap of a group of grinning industrialists (allmen, all old) surrounding Prime Minister NarendraModi, recording a meeting called to discuss how tojog the economy out of its becalmed state.

Over the past few days, there hasbeen a clamour for Bollywoodcelebrities to speak out against theviolence at JNU, the deleterious con-sequences of the CitizenshipAmendment Act (CAA) and theimpending National PopulationRegister (the two issues are not con-nected but they have somehow mor-phed into a giant outcry against brutemajoritarianism against civil society).

Strange, though, that no onethought to ask why the businesscommunity has been seen but notheard. It has, after all, far betteraccess to India’s most powerfulman — Prime Minister Narendra Modi — than anyactor, writer, singer or dancer.

Since December 12 when the CAA was signedinto law and countrywide protests erupted, theprime minister has met with the business commu-nity, individually or in groups, at least three times.On December 20, he addressed the AssociatedChambers of Commerce and Industry; on January1, he held one-on-one meetings with 60entrepreneurs and business leaders; on January 6,he met another group of industry stalwarts.

The last meeting, then, was held just hours afterthe JNU assaults. Only one businessperson from thatgroup publicly expressed his concern, though it isunclear whether he voiced them to the prime min-ister mano-a-mano. That was Anand Mahindra, whomade an elliptical reference to “faith” in a tweet. Theothers who have gallantly aired their anxieties stoodoutside this charmed circle and even they mostlydeplored the violence in generic terms. Only HarshGoenka has been brave enough to refer to “religiousbushfires lit all over the country,” as direct a criticism

of the ruling party’s governanceagenda as you can get from the busi-ness community. And onlyNaushad Forbes has been a consis-tent exception to the amoral silenceof the business community throughhis writings.

Let’s give businesspeople whomet Mr Modi the benefit of thedoubt. Perhaps they privately point-ed out to the prime minister thatgratuitously attacking civil societyfor protesting in a democratic coun-try is unlikely to reassure investorsof any stripe? That the spectacle of

police manifestly responding topolitical orders rather than discharging their fidu-ciary duties is unsettling for those worried about thesecurity of their property?

Highly unlikely, if you judge by the alacrity withwhich the assembled audience at the Assocham meetacquiesced to the prime minister’s demand for moreenthusiastic applause — not once, but twice.

Did they perhaps advise him on the urgent needfor a predictable policy trajectory? That withdrawingover 80 per cent of currency in circulation three yearsago without warning was so problematic that its

impact is being felt today? That insisting on a year’sadvanced deadline for the most massive change thecountry’s indirect tax system has helped neitherthem nor his government’s revenue collections? Ormaybe that the muscular demand for a “strongrupee” is unsupportive for exporters, as is the slumpback into protectionism?

Possible, but improbable. The response from theAssocham meet suggests that the business commu-nity wants the government to stimulate the economynow that it is clear that a generous corporate tax cutin September hasn’t done the trick. Thus, onDecember 31, the last day of a deeply troubling year,Nirmala Sitharaman obliged with the announce-ment of a humdinger infrastructure investment planworth over ~100 trillion. No one yet knows wherethe money for all this will materialise, nor how themyriad structural bottlenecks (first stop: Land acqui-sition) will be cleared. No matter, it’s good optics ata time when the regime’s social agenda has hit ahurdle called civil society.

Still, the contrast with the halcyon days of 2014is noticeable. Then business leaders eagerly linedup to attend various investment jamborees — Makein India, Stand Up India, and what not — and heapextravagant praise on the prime minister, all of itobligingly disseminated on all TV channels. Nowthe meetings are held behind closed doors and thecontent of the discussions confidential. Whichmeans that even at their most diplomatic, businessleaders must have little good to say about the man-agement of the economy —even if the obvious linkbetween a divisive social agenda and the economyhas eluded them.

They may not really care much about the tra-jectory of Indian society; but they must surelyunderstand that shying away from speaking truthto power will hurt their businesses just as much.

AWashington Post story lastmonth revealed how senior USofficials had misled the American

public about the Afghanistan War, andhow the nearly two-decade-long wareffort was, in the words of one general,“devoid of a fundamentalunderstanding… (without) the foggiestnotion of what the US was doing there”.As the Taliban kept returning — andnow, it seems they will be at the tablewhatever the future for Afghanistan is— US officials kept declaring “progress

was being made”. A few years after theTaliban and Al Qaeda were pushed backin 2001 by the US and its allies in anoffensive launched in response to theSeptember 11 attack on the TwinTowers, Indian writer and mediaprofessional Taran Khan landed in war-scarred Kabul.

She would return several times overthe years. “Most of these (visits)… werefor assignments to work with Afghanmedia professional,” she writes in thebook under review. Over the course ofthese visits — some of which lastedonly weeks while others ran intomonths — Ms Khan discovered, whatshe calls, “the shadow city”. She wastold not to walk — the streets of Kabulwere not safe, more so for a foreigner,especially for a woman. But, she “foundthat walking offered a way to exhumehistory — a kind of bipedal archaeology— as well as an excavation of the

present”. The results of her wanderingsis this book.

Ms Khan — a close friend with whomI have walked in Berlin, Hamburg andDelhi — does notwalk in a straightline. The structureof the booksomewhatreplicates her styleof walking. There ishardly anychronology; thereare few dates bywhich you can mapher stay in theAfghan capital. Yes,she gives you adescription of her first arrival in Kabul:“When I first saw the city, it was in thethroes of another transformation. Thepopulation had almost doubled toaround 3 million, drawn by the promise

of peace and economic opportunities.”But there are other “bridges” — to useher own term — through which shekeeps arriving in Kabul in the course ofthe narrative.

Some of these are historic: Ms Khanclaims descent from Pathans, though itis unclear whether they were from

modernAfghanistan orPashtun-dominated areas inPakistan. HerKabuli friends,however, seemedhardly bothered bythis colonial-eradistinction: “Wepiss on the DurandLine, sister,” theytell her. Anotherbridge is her Baba,

her grandfather, who does notaccompany her to Kabul, but guides herin spirit with his encyclopaedicknowledge of Persian and Urduliterature. Other bridges are constructed

by friendships she strikes up with hercolleagues, neighbours, ex-jihadis,filmmakers, librarians, all of whom arelike horcruxes, repositories of somefragment of Kabul’s soul.

As a bibliophile, I found the chapteron Kabul’s books, “Written in the City”,the most appealing. “Reading was how Ilearned to inhabit Kabul, a large part ofhow I made myself at home there,” MsKhan writes, adding, “I began to readKabul like a story, cast in a script that isembossed on its alleys and stones.” Asshe soon realised, there were at least twoKabuls even in written accounts aboutthe city — one in western texts withwhich she was more familiar and theother in Persian and other books, towhich her Baba introduces her. Therewas yet another layer, an oral one:“while most Afghans cannot read orwrite, they are steeped in an oraltradition of storytelling”.

In this chapter, the reader also meetsHaideri Wojodi, one of the oldestemployers of Kabul’s heavily guardedpublic library. Reading Ms Khan’s

description of him, I thought of MrWojodi as a Borges of the Afghan capital:“He seemed like a deceptively frailguardian of Kabul’s literary legacy,bound to it with a deep belief: Thatwords are important through darkesttimes.” When Ms Khan asks him ifpeople visited the library even duringTaliban times, he replies: “Yes, peopleread even then, child.” The descriptionis at once poignant and heart-breaking.

The book is cyclical — the last chapterof the book is called “Returns”, like thefirst one. “The legend of Kabul beginswith a bridge, a road appearing on water,”she writes. “The same bridge is the path todeparting from the island. Returning toKabul and leaving it are not endings butstates of movement, of travel.” Ms Khan’stravels in the Afghan capital ended in2013; since then she has continued tomeet expatriate or refugee Afghans allover the world. Memories and old friendsare now her bridges to Kabul.

The reviewer's novel, Ritual, will be out in February

India Inc: Seen but not heard

Bridges to Kabul

BOOK REVIEWUTTARAN DAS GUPTA

Maintain balance between growth and financial stability

Don’t depend on MPC alone

SHADOW CITY: AWOMAN WALKSKABULAuthor: TaranKhan

Publisher:Vintage(Penguin)Price: ~499

Pages: 240

ILLUSTRATION: BINAY SINHA

Shadows of the events in 2019 will loom large over the worldand India

The darkening sky

A PIECE OF MY MINDSHANKAR ACHARYA

SWOTKANIKA DATTA

WWW.SMARTINVESTOR.IN FOR INFORMED DECISION MAKING <

Indices end in red amid Iran retaliationThe benchmark indices clawedback most of their lost groundto end modestly lower onWednesday, as global marketswere whiplashed by a freshwave of volatility after Iranlaunched retaliatory strikesagainst the US forces in Iraq.

After plunging nearly 400 points in early trade, theSensex stabilised to finally settle 51.73 points, or 0.13 percent, down at 40,817.74.

Similarly, the broader Niftyshed 27.60 points, or 0.23 percent, to finish at 12,025.35. Onthe macroeconomic front,advance GDP estimates, sug-gesting India’s economic

growth may drop to a 11-yearlow of 5 per cent in the currentfiscal year, also kept investorscautious, traders said.

L&T was the top loser in theSensex pack, shedding 2.19 percent, followed by ONGC, Titan,Sun Pharma, Hero MotoCorp,and Infosys. On the other hand,

Bharti Airtel, TCS, UltraTechCement, Bajaj Finance, and ICICI Bank rose up to 2.74 percent. “The market is sensingsome ease in tension with theview that there will be no effecton equities in the long-term.For the short-term, the marketwill adopt a careful tactic, given

the limited room to grow onaccount of premium valuationand slowdown in the economy.

“As soon as the situationsettles, the market will shiftits focus to Q3 results and theBudget,” said Vinod Nair,head (research), GeojitFinancial Services.

BSE capital goods, energy,industrials, oil and gas, metal,and auto indices fell up to 1.42 per cent, while telecom,basic materials, tech, and ITrose up to 2.43 per cent.

The broader BSE MidCapand SmallCap indices buckedthe weak market trend, risingup to 0.16 per cent. PTI

GIREESH BABU

Chennai, 8 January

Shriram Properties, the realestate arm of Shriram Group,has said that it will go for aninitial public offering (IPO)after the Union Budget.

The company proposed tohit the market with a plan toraise ~750-800 crore. The IPOis expected to mobilise money for future expansionand help investors to partiallydilute their stake.

“The stock market hasbeen going through somerough weather for some peri-od now. Large-caps are doingwell, while mid- and small-caps are struggling. We expectthe Budget to be a great one...Immediately after the Budgetwe will look at our IPO,” saidM Murali, chairman andmanaging director of ShriramProperties. The firm has reg-ulatory approval with validitytill April 2020 to go for an IPO.

While it has the approvalto raise around ~1,250 crorethrough primary and secondary markets, it willlook at raising ~750-800crore, given the present situation, he added. Around~250 crore will be raisedthrough the primary market,with the rest coming fromthe secondary market.

“We have raised $800million from private equity(PE) capital so far, including project-based funding. Inthe holding company,around 58 per cent is held byPE investors,” he said.

In the past three years, thecompany has seen growth in its business and has developed 2.4 million sq. ft ofreal estate in 2017-18, around3.5 million sq. ft in 2018-19 andexpects to have 4 million sq. ft developed during thecurrent financial year.

JASH KRIPLANI

Mumbai, 8 January

The mutual fund (MF)industry saw a sharpbounce in equity flows

in December, with equityschemes garnering ~4,499crore of flows or 3.4x lastmonth’s tally. Contributionthrough systematic invest-ment plans (SIPs) touched anall-time high of ~8,518 crore.

The jump in flows comesafter a 78 per cent decline inNovember. Even thoughDecember’s tally was the sec-ond-lowest in 39 months,industry players were relievedand hoped this could be thebeginning of a sustainablerecovery. “If we continue to seefurther improvement nextmonth, we may conclude that November’s figures were an aberration,” saidSwarup Mohanty, chief execu-tive officer of Mirae MF.

In November, equity flowdeclined to ~1,311 crore, asinvestors took advantage of amarket rally and took moneyoff the table. These were thelowest levels seen in three anda half years. Industry partici-pants say market stability willbe an important factor for a sus-tainable recovery.

“If market volatility contin-ues, it could take more time forflows to normalise back to pre-vious levels,” said AnthonyHeredia, chief executive officer(CEO) of Baroda MF. Further,participants hope announce-ments in the upcoming Budgetwill lift investor sentiment.

On Monday, the benchmarkindices — Sensex and Nifty —lost 2 per cent amid escalatingtensions between the US andIran. However, the December

flows were still 31 per cent lowerthan the previous 12-monthaverage of ~6,544 crore. In CY19,equity schemes collected~76,423 crore of flows, 40 percent lower than the previousyear’s tally of ~1.27 trillion.

Contribution through SIPssaw a marginal rise of 1 per centin December. Industry playerssay that though SIPs’ steadygrowth is a positive, equityflows being much below SIPflows doesn’t bode well.

“On a SIP book of around~8,000 crore, these levels ofequity flows don’t give muchcomfort. If collection in equityschemes remains at these lev-els or lower, it can be a matterof concern,” said PrathitBhobhe, managing director

and CEO at Tata MF. At ~1,134 crore, large-cap

funds accounted for one-fourthof equity flows. However,industry participants tookcomfort in the fact that mid-cap funds garnered ~796 croreof flows (or 17 per cent of equityflows) in December.

“We were expecting flowsinto mid-cap funds to comedown further, as investors havefound it difficult to make moneyin this category. However, thestrong flows are a surprise forthe industry,” Mohanty added.

At ~71,158 crore, liquid fundssaw bulk of outflows, whichindustry observers attributedto quarter-end pull-outs byinstitutional investors to meetadvance tax requirements.

Tally still 31 per cent lower than 12-month average

MFs post 3x surge in equity flows

ShriramProperties to go for IPOafter Budget

MUMBAI | THURSDAY, 9 JANUARY 2020 Investor

The Smart Voltas’ stock has fallen by over 5 per cent in the lastone month on expectations of a muted Decemberquarter. But analysts are still bullish, given Voltas’medium-term growth potential in light of itsstrong order book, market share gains, and forayinto new markets like Bahrain and Kuwait

QUICK TAKE: PROSPECTS STILL GOOD FOR VOLTAS “Overall, the inflation numberslook seriously underestimated at2.5%. But if that is correct, thenour interest rates are way toohigh. Need to get loans at 4%!”

DEEPAK SHENOY Founder, Capital Mind

Use volatility to book profitin global funds: AdvisorsJASH KRIPLANI

Mumbai, 8 January

International funds — which have beenthe top performing ones over the past oneyear with gains of over 20 per cent — arebeing recommended by advisors for book-ing partial profits, with escalating tensionsbetween the US and Iran threatening tospill over and impact global indices.

“Investors can use this volatility in global markets to take some profits off thetable, especially those investors that areclose to their investment horizon,” saidAmol Joshi, founder of PlanRupeeInvestment Services. In the past one-yearperiod, international funds have deliveredreturns of 25.49 per cent, outperforminglarge-cap funds by a wide margin. The latter has delivered returns of 10.63 percent, thanks to polarisation in the marketsthat favoured large-cap stocks.

Experts say investors can use thisopportunity to rebalance their portfolio.

“Investors can realign their portfolio,in line with their original allocations. Withvalue of investments in international fundsgoing up, investor allocations are likely tohave also gone higher to these funds,” saidVidya Bala, co-founder at PrimeInvestor.

According to industry observers, inter-national funds had been attracting investorinterest as domestic-focused funds havestruggled to beat their benchmark returns.

According to a study, around 50 percent of 200 actively-managed equityschemes had underperformed their bench-marks in CY19. Mid-cap and small-capschemes — where retail investors hadexpected to make robust returns — have

been the worst of the lot. The mid-cap andsmall-cap funds have delivered 3.5 per centand 0.08 per cent returns in one year.

Advisors say that while investors canbook partial profits in these schemes, theyshould continue to maintain some allocation. “International funds help from

the point of view of diversification.Investors get exposure to different markets,rather than just being exposed to domesticmarkets. Second, it also gives currencyhedge, if the investor has dollar expendi-ture for foreign travel or for higher educa-tion of children,” Bala added.

According to experts, a weaker rupeeand strong dollar is also a factor that canbenefit international funds.

“International funds largely invest incompanies that earn their revenue in dollarterms. This works favourably when therupee is seeing a depreciation,” said a fundmanager. The rupee is expected to depreciate further as tension brewingbetween the US and Iran can lead to a spikein oil prices, and lead to further wideningof the current account deficit. Amid fearsof spike in oil, the rupee breached the 72-mark against the dollar this week.

THE COMPASS

NTPC’s shopping spree may be a gift to investorsEarnings seenrising 3%, with sharp drop inunderrecoveries

HAMSINI KARTHIK

Seen more as a play on dividend, investors may not bedisappointed with NTPC’s flattish stock performance overthe previous year.

In fact, analysts remainbullish on the firm. This isdespite the power sector continuing to languish fromweak demand for electricityand supply-side constraints,including availability of coalnot easing for the sector.

Majority of the analysts saythe recent buys and capacityexpansion plans will work toNTPC’s advantage.

ICICI Securities says thatfrom FY20-23, NTPC may addover 14 gigawatt in standalonecapacity, which will boost itsregulated equity by ~40,000crore. Regulated equity is theportion of money that earnsfixed returns of 15.5 per cent,as determined by the regulator.

The muted growth in reg-ulated equity was a reason forthe poor stock performance.In addition, analysts estimateNTPC’s acquisition of THDCand NEEPCO to be value-accretive. “A conservative esti-

mate results in an increase of~350-450 crore to NTPC’s FY21earnings, translating to a 2.5-3.0 per cent increase in earn-ings per share,” they add.

What’s also working well isthe marginal improvement inthe pace of output, referred toas plant load factor, whichimproved to 91.4 per cent inDecember, from 87.9 per centa year ago. The metric mea-sures average power generatedby a plant to the maximumpower that could have beengenerated for a given period.

Analysts say this indicatesa pick-up in demand for elec-tricity, led by an increase inusage of room heating equip-ment in North India. This alsomeans underrecoveries may

reduce for NTPC. “We nowexpect FY20 underrecovery toreduce to ~150-200 crore, fromthe earlier estimate of ~350-400 crore,” say analystsat Emkay Global FinancialServices, having increasedtheir FY21 earnings estimatesby 1.2 per cent.

NTPC’s recent shoppingspree may turn to its advantagerather than being a drain onits financials, provided theunderlying operating environ-ment does not deterioratefrom current levels. Benign val-uations at 1x its FY21 estimatedearnings, NTPC’s regulatedearnings model, and a highdividend yield of 5 per cent, allposition the stock favourablyin the current environment.

Mahindra CIE to keep riding on rough terrainAnalysts expectgrowth to revivefrom CY21 on newproduct business

RAM PRASAD SAHU

The stock of Mahindra CIE wasthe worst-performing amonglarger auto component makersin calendar year 2019 (CY19).

The stock, which shed 34 per cent in CY19, has beenunderperforming its peers onthe back of weak demand fromautomakers in India and theEuropean Union (EU), internalrestructuring, and integrationof acquired entities.

The near term could seesome pressure, especially inthe European business. Whilethe passenger vehicle (PV)market (which has recoveredsomewhat) is a positive, thelarge decline in the Europeancommercial vehicle businessis likely to continue, given thedemand contraction.

Further, the company’sdecision to forego some of itsunprofitable as well as small-volume products across its

German plants is expected toimpact revenue.

Analysts at Antique StockBroking expect the Europeanbusiness register growth of -3per cent CY20, as loss in com-mercial vehicles would be part-ly offset by the PV and gearsbusiness. About 55 per cent ofits revenue comes from the EU.

Analysts at Ambit Capitalsay a higher mix of stable PVsand two-wheelers will enhancescale and return on capitalemployed (RoCE), while alsoderisking the company fromexposure to cyclical segments,such as commercial vehiclesand tractors.

Higher business from itsparent CIE and the recentacquisitions (Bill Forge,Aurangabad Electricals) areexpected to enhance the oper-ating profit and margins overthe next couple of years.

The India revenue mix, too,is expected to move towards

higher RoCE businesses. As was the case with the

last two acquisitions, ana-lysts expect the company todeploy generated cash toacquire higher RoCE assets,thereby bolstering earningswithout diluting equity orincreasing leverage.

Going ahead, the keygrowth target for the companywould be to expand intoAssociation of Southeast AsianNations markets, focus onlightweighting components,and purchase assets from CIE.

To address the risk on tran-sition to electric vehicles, thecompany is identifying anddeveloping capabilities inexisting segments such asgears and magnets.

While there are near-term challenges, analystsexpect growth to revive fromCY21 on new product busi-ness and improvement inthe operating performance.

POWER PLAYMapping NTPC’s regulated equity n~ cr % growth (RHS)120,000

80,000

40,000

0

30

20

10

0 FY17 FY18 FY19 FY20E FY21E FY22EE: Estimates Source: Brokerages

44,100

6.12

50,600

54,000 56,000

67,900 84,700

24.74

40,90040,80040,70040,60040,50040,400

Jan 7,’20 Jan 8,’20

40,869

40,818

SENSEX HEADS SOUTH

NEW CHALLENGESInternational funds have been thetop performing stocks in recent times

Fund category One-year returns (%)

International 25.49 funds

Large-caps 10.63

Mid-caps 3.52

Small-caps 0.08Source: Value Research

TAKING A PAUSE (~ crore)

Lowest equity flows in three years, but equityschemes’ share at record highs

Year Equity Equity Share of industryflows AUM AUM (%)

CY16 54,875 469,675 28.52

CY17 152,312 771,134 36.26

CY18 127,137 786,698 34.40

CY19 76,423 1,128,201 42.50AUM = Assets under management Source: Assocation of Mutual Funds in India

MUMBAI | THURSDAY, 9 JANUARY 2020 THE SMART INVESTOR 11. <

COMMODITIES1>

Amazon tie-up key for Future Retail

What is your market outlook for 2020? The markets are likely to be driven by three factors. First, the globalliquidity tap has been switched on inthe past quarter as the US Federal(Fed) Reserve has begun assetpurchases. The foreign flows we sawin the past few months are a result of‘risk-on trade’. It is important thistailwind continues for India. TheReserve Bank of India ispushing for lowerlending rates and regulardomestic fund inflowsinto equity markets have sustained even involatile times.

Second, is the revival of domesticconsumption growth. Activity is still slow, but the rate of decline isreducing and a low base has beencreated. It is crucial these do not slow further. Third, is the pick-up in private sector investment. Theease of doing business, businessconfidence, and Make In India arethe critical factors for India to get

back to 7 per cent growth.

What is your take on the current valuations?Valuations of large-caps areexpensive, compared to long-termaverages. This is also the situation inother markets. The ‘new normal’ of near-zero interest rates in the developed markets is anunprecedented phenomenon, for

which we have nopast referencepoints. All assetclasses areexpensive, sorelative valuationsare not alarming.While liquidity hasbeen countering

slowdown, growth needs to catch up.Given these push-and-pull factors,we expect markets to be volatile andexpect 10 per cent returns from large-cap indices.

What is your view on mid- and small-cap stocks? There has been a significant

underperformance of mid-caps andsmall-caps over the past 24 months.Relative valuations of mid-capsversus large-caps are now lookingcomfortable, even though earningsgrowth is still evasive. Mid- andsmall-caps will also benefit fromlower interest rates. However, a lotdepends on a broader economicrecovery, and participation of localinvestors. If we continue to be drivenby foreign flows, money willcontinue to chase large-caps andpolarisation will continue.

We are in a midst of a slowdownand consumer spending hastaken a hit. What is your readingof the situation?The high-frequency indicators

continue to be sluggish and thebottom may not have been made inthe September quarter. The wintercrop prospects look promising,which could provide support forshort-term consumption. The long-term consumption story for Indiacannot go wrong, given thedemographics. But ultimately jobcreation has to be a long-term driver,which needs investments to pick upin manufacturing, infrastructure,and real estate.

What are the global cues to watch out for?Continued Fed dovishness is thebiggest variable to watch out for,followed by oil prices and tensions inWest Asia due to friction with the US.Trade negotiations are likely to be along-drawn affair, which will beimportant only intermittently, froma market perspective.

Do you see recovery in corporateearnings any time soon? We expect 2020-21 earnings to growat a healthy 15-20 per cent. However,growth will be led by below-the-lineitems such as lower tax rate, lowerprovisioning requirement ofcorporate banks, and reversal oftelecom losses. For a healthier, moresustainable rally, we need top line

growth to also come through toreflect overall economic growth.

Which are the sectors you arebetting on? We are positive on private sectorbanks — both retail and corporate.While the retail bank themecontinues, going forward evenprivate sector banks with corporateexposures will likely do well. The bad phase around their corporateexposure is mostly past us. Withadequate provisions been made andnot much risky lending in the pastfew years, they are back on thegrowth path. We are also positive on select non-banking financialcompanies, which are able to raiseequity and debt, consumerdiscretionary (automobiles),materials, telecom, select mid-capnames in capital goods, andprivatisation as a theme. Energy isanother sector, which could rerate,given the government’s privatisationthrust, as valuations are comfortable.Metals could benefit if the US-Chinatrade deal is finalised.

We are underweight on fast-moving consumer goods,utilities, and other public sectorundertakings, where there iscontinuous supply of exchange-traded fund-linked stocks.

‘Large-caps are pricey as opposed to long-term averages’ While liquidity has been countering slowdown, growth needs to catch up,says MIHIR VORA, director and chief investment officer, Max Life Insurance.In an interview to Ashley Coutinho, he says the relative valuations of mid-caps relative to large-caps are look comfortable, even thoughearnings growth remains evasive. Edited excerpts:

PRESS TRUST OF INDIA Mumbai, 8 January

The BSE on Wednesday saidfour companies, includingstate-owned Steel Authorityof India (SAIL) andManappuram Finance, havefiled applications with thebourse to list their commer-cial papers (CPs) for a totalissue size of ~9,400 crore.

SAIL, Kotak MahindraPrime, ManappuramFinance, and JM FinancialProducts are the firms thathave made applications withthe exchange for an issue sizeof ~5,200 crore, ~4,050 crore,~100 crore, and ~50 crore,respectively, the BSE said ina release.

After the process, theeffective date of listing CPswith the exchange will beJanuary 9, it added.

“To date, 68 issuers have

done 474 issuances of CPsand have successfully listedCPs of ~1,52,090 crore on the BSE.

The weighted averageyield of these issuances is6.12 per cent, with an averagetenor of 144 days,” theexchange noted.

A CP is an unsecuredmoney market instrumentissued in the form of prom-issory notes that enableshighly rated corporate bor-rowers to diversify theirsources of short-term bor-rowing and provides an addi-tional instrument toinvestors. Such instrumentscan be issued for maturitiesbetween a minimum of sevendays and a maximum of oneyear from the date of issue.

CPs are usually issued ata discount from face valueand reflect the prevailingmarket interest rates.

Govt puts restrictions onrefined palm oil importsAGENCIESNew Delhi, 8 January

The government onWednesday imposedrestrictions on imports

of refined palm oil, a movewhich could discourage theinbound shipment of the com-modity from Malaysia.

According to a notificationof the Directorate General ofForeign Trade (DGFT),“import policy” is amendedfrom “free to restricted” forrefined bleached deodorisedpalm oil and refined bleacheddeodorised palmolein.

Putting the commodity inrestricted category means animporter will require licenceor permission for the inboundshipment.

India, the world’s largestimporter of vegetable oils,buys nearly 15 million tonnesannually. Of this, palm oilcomprises 9 million tonnesand the rest 6 million tonnessoybean and sunflower oil.

Indonesia and Malaysia arethe two countries that supplypalm oil. Malaysia produces 19 million tonnes of palm oilin a year, while Indonesia pro-duces 43 million tonnes, thetrade data showed.

The move comes againstthe backdrop of remarks byMalaysia on the new citizen-ship law and Kashmir issue.

On December 20 last year,Malaysian Prime Minister

Mahathir bin Mohamad hadreportedly said, “I am sorry tosee that India, which claims tobe a secular state, is now takingaction to deprive someMuslims of their citizenship”.

Earlier, Mahathir had saidin the UN General Assemblythat India had “invaded andoccupied” Kashmir.

Further, according toindustry sources, the govern-

ment has advised importersnot to buy palm oil fromMalaysia.

“We import 30 per cent ofthe palm oils from Malaysia,while 70 per cent fromIndonesia. Our refiners canimport from Indonesia whichproduces much higher thanMalaysia,” a person in theknow said.

There will not be any extra

cost to import from Indonesiaas the product and price issame, the source added.

The Solvent Extractors’Association of India issued astatement regarding theimport restriction, saying:“This decision will go a longway in supporting the domes-tic refining industry by valueaddition within the country,employment generation, andimproved capacity utilisationof the domestic refining industry, and will also greatlyhelp the farmers for receivingremunerative price for their produce.”

Malaysian palm oil futuresended lower on Wednesday,weighed down by fears of low-er imports from India andIran’s attack on US-led forcesin Iraq, but fears of a shortfallin supply limited losses.

The benchmark palm oilcontract for March delivery onthe Bursa Malaysia DerivativesExchange closed down 0.13 percent, at MYR3,038 ($740.98).

Palm oil has fallen in threeout of four sessions this week,and had ticked up 0.2 per centin the previous session.

December production andstockpiles in Malaysia fell 8.5per cent from November to itslowest in 27 months due to dryweather and lower fertiliserusage, a Reuters surveyshowed on Sunday.

With inputs from Rajesh Bhayani

Sugar prices rise even asrecovery worries remainDILIP KUMAR JHA Mumbai, 8 January

While a marginal increase in the priceof sugar in the past two days has revivedindustry sentiment, a sharp fall in canerecovery continues to pose a challenge.

Average realisation for mills hasincreased by ~0.5-1 to ~34-~35 a kg (M-30 variety in Uttar Pradesh) and ~31.70 akg (S-30 in Maharashtra). The centralgovernment has fixed the minimum sell-ing price at ~31, but unbranded sugar isretailing at ~44-46 a kg.

Even so, mills fear the decline inrecovery could hit their profit marginand hinder their cane payment. Withthe crushing season having started lateby about a month (the sugar year officially begins October 1), mills haveso far been able to clear most of theirpayment dues.

“Most large mills have cleared theirarrears of the past year and also for thecurrent season, primarily from incomesearned through sale of ethanol andexport subsidy. The decline in sugarrecovery, however, continues to pose achallenge. Because of delayed start ofcrushing, profit margins in theDecember quarter would remain mutedand might recover in the March quarter,”said a senior official with one of India’slargest mills.

Praful Vithalani, chairman, All IndiaSugar Traders Association, believesprices increased marginally due to the18 per cent decline in sugar productionestimates to 27 million tonnes for season2019-20, versus 32.7 mt the previous year.

The data compiled by the NationalFederation of Cooperative SugarFactories shows average sugar recoveryfor the first three months of the currentseason (October-December) at 9.94 percent, compared to 10.33 per cent in thecorresponding period last year. In UP, itwas 10.7 per cent, from 10.8 per cent in

the comparable period; in Maharashtra,9.95 per cent, compared to the earlier10.4 per cent.

The reason given for the latter fall isthat the cane crop in the states faced ahuge water shortage at the outset of themonsoon season. Followed by a laterspell of flooding, due to excess rain. Theideal situation for growth of cane is inter-mittent rain at regular intervals. Warmdays and cold nights during the winterhelp adequate sucrose (sweetener) formation in cane stems.

More on www.business-standard.com

| Refined palm oil is nowput in the “restricted”category, according to the DGFT

| This means an importerwould require a licence or permission for aninbound shipment

| Palm oil comprises morethan half of India’svegetable oil imports

| According to people in the know, India imports 30% of palm oil fromMalaysia, while 70% is from Indonesia

LIMITED SUPPLY

Four entities tolist papers on BSE for ~9.4K-cr issue

Move comes against the backdrop of Malaysia’s remarks over CAA & Kashmir

UP govt releases ~200 crfor sugarcane paymentsThe Uttar Pradesh government hasreleased ~200 crore for the payment of sugarcane arrears on the state-controlled co-operative sector sugarmills, for the FY19 crushing season. Whilefour of the total 24 co-operative unitshad settled their outstanding, theremaining 20 accounted for the unpaidarrears, UP Cane and SugarCommissioner Sanjay Bhoosreddy saidon Wednesday. He said the governmenthas released ~200 crore for clearing theoutstanding cane price payment, andthe amount would be transferred to thefarmers’ bank accounts within the nexttwo days. VIRENDRA SINGH RAWAT

AT THE EXCHANGES

RAM PRASAD SAHU Mumbai, 8 January

The stock of Future Retail(FRL) has been trending upover the last couple of trad-

ing sessions, gaining 5 per cent afterit announced a partnership withAmazon, which will expand the offline and online presence ofboth entities.

The company also announced thatit will raise debt worth $500 millionto fund the purchase of infrastructureassets from Future Enterprises (FEL).Both announcements have been perceived positively by the market.

FRL has entered into a long-termagreement with Amazon India,which will help expand the reach ofthe former’s retail outlets as well asgive a platform for its consumerbrands that are housed under Future Consumer. This will makeAmazon India the online sales channel for Future Retail stores.

Given its presence and productportfolio, FRL gets 350 million footfalls at its physical stores acrossthe country. An online presence thatleverages the existing infrastructureis expected to help drive volumes,improve store productivity and margins. Customers will be able touse both online and offline channelsto order items across the groceries,general merchandise, fashion, and

footwear categories. While packagingand pick-up of products orderedonline has already been implementedacross 22 stores of Future Retail, it willgradually be rolled out across all retail stores.

Analysts at Morgan Stanley believethis is a win-win arrangement arisingfrom a hybrid retail (e-commerce andphysical stores) model that will helpAmazon lower the cost of fulfilment,given FRL’s large store footprint.

FRL’s store productivity willimprove with better utilisation of its

assets. For Future Consumer, the dealwith Amazon will help build an onlinedistribution channel and increase theshare of sales from outside the FutureGroup network. The other trigger isthe fund infusion and plans to raisedebt. The company received ~1,500crore after equity warrants issued bythe parent company Future Coupons(FCL) were converted, leading to adilution in FRL’s equity by 7.3 per cent.

Amazon’s 49 per cent stake in FCLwill mean it will own 4.9 per cent afterthe conversion. This, coupled with the

raising of $500 million (~3,570 crore)in dollar-denominated bonds, willhelp the company buy infrastructureassets from FEL worth ~4,000 crore.

Given that retail stores are ownedby FEL, the asset purchase, accordingto Motilal Oswal Financial Services(MOFSL), would help FRL save ~650-700 crore in lease rentals and about~150 crore at the profit before tax level.Further, FRL holds ~620 crore inadvances to FEL, which could beadjusted against asset payments.

While the funds raised should

help bring down lease costs, net debtis expected to go up to just under~2,000 crore. This will lead to anincrease in net debt to operating prof-it moving up to 1.4x financial year2020-21 (FY21) estimates, whilereturn on capital employed is expect-ed to go down 5 percentage points to13 per cent. Analysts at MOFSL, how-ever, believe that the asset purchaseis a major step towards saving costsand creating a transparent balancesheet, compared to cross-holding ofassets among group entities, whichwas the case earlier.

These steps should help rub off onstock price. Unlike some of its peerssuch as Aditya Birla Fashion Retail,Trent, and Avenue Supermarts thathave delivered returns upwards of 15per cent in calendar year 2019, FutureRetail has underperformed sheddingnearly quarter of its value last year.

At the current price, the stock istrading at an attractive 19x its FY21earnings estimates and 8x enterprisevalue to operating profit. However,investors need a long-term horizon as the near term could see soft operating performance.

Macroeconomic slowdown, shift-ing of festival sales to Septemberquarter, and aggression by online e-tailers are expected to keep Future Retail’s same store salesgrowth for the December quarter inthe lower single digits.

This is expected to help drive volumes, improve store productivity, and margins

(~ crore) FY20 FY21 FY22

Revenue 22,047 24,217 26,849% chg YoY 9 10 11

Ebitda 2,801 3,418 3,916% chg YoY — 22 15

Net profit 779 880 1,099% chg YoY 6 13 25

Source: Morgan Stanley Research

FRL: ROBUST GROWTH

RETAIL THERAPYFuture Retail Sensex

120

100

80

60Jan 1,’19 Jan 8,’20

100

112.5971.24

MIHIR VORADirector, Max Life Insurance

NSE to begin cross-marginingfacility for traders from FridayPRESS TRUST OF INDIA Mumbai, 8 January

The National Stock Exchange(NSE) on Tuesday said it willintroduce cross-marginingfacility to offset positions inco-related equity indices fromFriday, a move that willincrease liquidity and tradingvolumes in stock markets.

Cross-margining allowsmarket participants toreduce the total margin pay-ment required, if they aretaking two mutually offset-ting positions. The movehelps market participantstransfer excess margin fromone account to another. Thefacility will be made effectivefrom January 10, 2020, the

NSE said in a circular.The move comes after the

Securities Exchange Board ofIndia (Sebi) in November lastyear extended cross-margin-ing facility to offsetting positions in highly co-relatedequity indices.

Sebi, in December 2008,allowed cross marginingacross cash and exchange-traded equity derivativessegments.

> PRICE CARD

As on Jan 8 International Domestic ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------

Price %Chg# Price %Chg#

METALS ($/tonne)

Aluminium 1,794.0 3.6 2,036.1 2.6

Copper 6,134.5 8.6 6,526.6 10.1

Zinc 2,346.0 2.2 2,593.9 0.1

Gold ($/ounce) 1,575.0* 4.6 1,764.8 5.9

Silver ($/ounce) 18.3* 3.3 20.7 5.6

ENERGY

Crude Oil ($/bbl) 67.5* 16.2 70.0 19.6

Natural Gas ($/mmBtu) 2.2* -4.8 2.2 -5.4

AGRI COMMODITIES ($/tonne)

Wheat 191.7 13.7 318.7 8.6

Maize 190.4* 5.3 330.2 9.6

Sugar 362.5* 6.1 486.3 -1.7

Palm oil 782.5 49.0 1,211.5 42.4

Cotton 1,537.3 15.8 1,622.6 0.5* As on Jan 08, 20 1800 hrs IST, # Change Over 3 MonthsConversion rate 1 USD = 71.7 & 1 Ounce = 31.1032316 grams.Notes:

1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE and CoffeeKarnataka robusta pertains to previous days price.

2) International metal are LME Spot prices and domestic metal are Mumbai local spotprices except for Steel.

3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket.4) International Natural gas is Nymex near month future & domestic natural gas is MCX

near month futures.5) International Wheat, White sugar & Coffee Robusta are LIFF E future prices of near

month contract.6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM near month

future and Palm oil is Malaysia FOB spot price.7) Domestic Wheat & Maize are NCDEX future prices of near month contract, Palm oil &

Rubber are NCDEX spot prices.8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot price.9) International cotton is Cotton no.2-NYBOT near month future & domestic cotton is MCX

Future prices near month futures.Source: Bloomberg Compiled by BS Research Bureau

MUMBAI | THURSDAY, 9 JANUARY 2020 ECONOMY & PUBLIC AFFAIRS 13. <

Trade unions’ Bharat Bandhcall unites workers, studentsSOMESH JHA & AVISHEK RAKSHIT

New Delhi/Kolkata, 8 January

This was the fourth time in pastfive years that central tradeunions called a nationwide strike

against Prime Minister Narendra Modi-led National Democratic Alliance gov-ernment’s economic policies.

Ten major trade unions had called aday-long strike against the government's"anti-people" policies. But this time, thebandh, was not restricted to trade unionsdemanding rights of the workers, it gal-vanised into a joint movement of people,particularly students, who registeredtheir protests on a range of issues fromthe new citizenship law to the JawaharlalNehru University (JNU) violence.

Students from across universities inDelhi, including Delhi University (DU),JNU, Jamia Millia Islamia University,Ambedkar University, and IndianInstitute of Technology, joined thebandh. The cold was not a deterrent.Rain played hide-and-seek throughoutthe days amidst shouts of azadi keepingstudents warm.

At ITO, in the heart of New Delhi, 30students from Ambedkar Universityamplified the voices of leaders from the10 unions. Protesters had blocked thebusy Bahadur Shah Zafar Marg for atleast an hour in the morning.

“The infrastructure in our universi-ty is not sufficient as compared to thefee. Research students have notreceived stipends for three months.Then, there are workers in our campuswho are on contract for a long period,”22-year-old Aditi, a student ofAmbedkar University, said.

Thousands of DU students cametogether to do a two-kilometre march inthe North Campus area. Students fromSt. Stephen’s, not known to participate instrikes, chose to skip their classes andassembled in the college’s lawns and read out the preamble to the Constitution. The CitizenshipAmendment Act (CAA), which became alaw in December, gives citizenship tonon-Muslim refugees from Bangladesh,Pakistan and Afghanistan.

Shristi Pal, an economics undergrad-uate student from Jesus and MaryCollege, who was at a protest at theFaculty of Arts in Delhi University saidthat the government’s timing of bringingin the CAA was questionable. “The gov-

ernment should focus on fixing the econ-omy. Growth is falling and all that thegovernment could think of was bringingin the CAA,” she said.

A common slogan at these protestswas: chatra ekta, madzoor ekta, kisaanekta zindabad (long live the unity offarmers, students and workers).

All India Trade Union Congress(AITUC) general-secretary AmarjeetKaur termed the strike as a “huge suc-cess” and claimed over 250 million peo-ple participated in the strike.

However, chief labour commissionerRajan Verma said that strike saw poorparticipation till evening. He said it sawa participation of only 15 per cent on an

average in set of industries governed bythe government. While 55 per cent work-ers were absent from work in bankingand insurance sectors, only 6 per cent telecom staff skipped work.

Production at Honda Motorcycle andScooter India’s Manesar plant inHaryana, Bajaj Auto's Chakan unit andfactories of various auto componentmakers was hit on Wednesday. Thestrike, however, had no impact on pro-duction of auto majors Maruti SuzukiIndia, Hero MotoCorp, Honda CarsIndia, Mahindra & Mahindra, TataMotors and Hyundai Motors India astheir plants in various parts of the coun-try functioned normally.

IT firm HCL issued an advisory to itsemployees. “We have also recommend-ed staff to avail Tele-Commuting option(work from home) if required,” a compa-ny spokesperson said.

Though normal life remained unaf-fected in most parts of the country, bank-ing services were hit. Several ATMs wentdry by the evening as people rushed forcash withdrawals.

Around 12,000 workmen staff of theReserve Bank of India from 19 officesacross the country, including from thecentral office in Mumbai, went on strike.It affected various departments includ-ing currency management, governmentand public accounts.

Protests turned violent in WestBengal after clashes broke out betweenthe ruling Trinamool Congress (TMC)and the Left Front-backed StudentsFederation of India in Bardhaman dis-trict. The TMC-led West Bengal govern-ment, which is opposing CAA and NRCand has been taking digs at the Centreover economic and social policies, isagainst any form of strike or shutdown.

(With inputs from Press Trust of India)

ARCHIS MOHAN & PTI


Students came out in largenumbers across the country onWednesday to protest Sunday’sviolence against students at theJawaharlal Nehru University(JNU) while Opposition parties,including the Congress,announced they would soonmeet to decide their futurecourse of action.

In view of the continuingprotests against the CitizenshipAmendment Act (CAA) andNational Register of Citizens(NRC) in Assam, PrimeMinister Narendra Modi willnot attend the inaugural func-tion of the third Khelo Indiaevent to be held in Guwahatifrom January 10 to 22.

In a separate development,the Centre moved the SupremeCourt on the day, seeking trans-fer of petitions challenging con-stitutional validity of the CAApending before different highcourts to the top court.

A bench headed by ChiefJustice S A Bobde posted thematter for January 10. TheBench, also comprising justicesB R Gavai and Surya Kant, said,“We are of the prima facie viewthat high courts should hearpetitions challenging CAA andin case there is a conflict thenwe may look into it”.

Tushar Mehta, SolicitorGeneral of India, appearing forthe Centre, said there wouldbe a problem as different highcourts may take conflictingviews and lawyers will moveto different states to attendproceedings. The top courtsaid lawyers moving to differ-ent states to attend hearingswas not its priority.

The Congress WorkingCommittee will meet onSaturday to “discuss the cur-rent political environment”. Ameeting of opposition partiesis likely on Monday. The meet-ings will also discuss the crisisin West Asia.

Congress chief ministersAshok Gehlot of Rajasthanand Amarinder Singh ofPunjab appealed to theCentre on Wednesday to pre-pare a plan to protect Indiansworking in West Asia in thewake of escalating tensionsbetween Iran and the US.

Congress general secretaryPriyanka Gandhi Vadra willvisit Varanasi, Modi’s LokSabha constituency, to meetstudents at the Banaras HinduUniversity on Friday.

JNU attack investigationUnion minister Prakash

Javadekar expressed confi-dence that the ongoing policeprobe will “unmask” theaccused and asserted that vio-lence has no place in a “maturedemocracy” like India.

“We are a mature democra-cy and everybody has the rightto express their opinion.Violence has no place, especial-ly in universities, where peoplego to study,” Javadekar said.

The minister said someunions in JNU had earlierdecided to prevent studentsfrom registering in semesters.“We should not forget that this

is an important issue. Stoppingstudents from semester admis-sion is anti-education,” he said.

Delhi Police sources said nofresh cases were registered onWednesday apart from thethree already registered in con-nection with the JNU incident.While no arrests have beenmade so far, they said police hasleads for the identification ofthe masked persons whoindulged in violence in JNU.

The Union Human Reso-urce Development Ministry onWednesday asked JNU vice-chancellor M Jagadesh Kumarto communicate more withstudents, take faculty into con-fidence and facilitate thesemester registration process,days after violence on the cam-pus. Officials met Kumar andtold him normalcy should berestored at the earliest, a seniorministry official said.

Kumar said the adminis-tration had not suggested tem-porarily shutting down JNUand efforts were being made torestore normalcy. There havebeen demands that he besacked or resign in the wakeof the attack.

JNU attack: Protestscontinue across Indiaas govt pushes for calm

A protest march against Citizenship (Amendment) Act and National Register of Citizens, on Wednesday PHOTO: PTI

(Top) Passengers outside the NetajiSubhas Chandra Bose InternationalAirport. In Kolkata, taxies were off the roads due the strike. Around 12,000 RBI staff from 19 offices across the country, including fromMumbai (left), went on strike, too

PHOTOS: PTI, KAMLESH PEDNEKAR

The next time you buy freshfruits and vegetables fromyour local kirana store,chances are that they werebrought from a remote

farm in less than 12 hours by aBengaluru-based supply chain tech-nology firm. That firm is calledNinjacart and it uses sophisticatedsupply chain algorithms that it hasdeveloped in-house, leveraging bigdata, predictive analytics, mobileapplications and the Internet of Things(IoT) technology.

Ninjacart connects farmers withretailers via a network of more than200 collection centres and 1,200 ware-houses across the country. It movesover 1,400 tonnes of fresh produce perday, having doubled its volumes in thelast four months.

“Technology plays a major role forus, otherwise it would not be possibleto do it at this (scale). Every processand action is governed by technolo-gy,” says Thirukumaran Nagarajan,CEO and co-founder of Ninjacart. “Youcan’t keep training the employeesevery minute. Everyone is given anapp and they have to just follow theinstructions in the app. The brainresides inside the system,” he adds.

Nagarajan, an alumnus of theCollege of Engineering Guindy,Chennai and IIM-Kozhikode, had seena gap in the food distribution marketand realised that there was an oppor-tunity to add value to the marketthrough technology. So in 2015 hefounded Ninjacart as an on-demandgrocery delivery firm along withVasudevan Chinnathambi,Kartheeswaran KK, Ashutosh Vikram,and Sharath Loganathan.Subsequently, he realised the extentof inefficiency in the supply chain forperishable produce and pivoted thecompany to become an end-to-end,B2B fresh produce platform.

Ninjacart’s paperless supply chaincreates a seamless link between its morethan 44,000 farmer suppliers andaround 60,000 kiranastores and restau-rants across seven cities. These includeBengaluru, Chennai, Hyderabad, Delhi,Gurugram, Mumbai and Pune. The effi-ciency of the system has dramaticallyreduced the time taken for produce totravel from farm to store.

The company claims that this hasprovided 100 per cent traceability along

the supply chain, apart from slashingfood wastage to less than 1 per cent,compared to 35 per cent in traditionalsupply chains. Use of technology alsoallows the company to prevent pilfer-age and make sure that the fruits andvegetables, which are transported atambient temperature, do not lose theirmoisture resulting in loss of weight.

The company, which has over4,000 employees and around 700delivery vehicles, procures fresh pro-duce from villages across India,

including farms in places such asPadra in Gujarat, Thanabhawan inUttar Pradesh and Bidaraguppe inKarnataka.

It gets information about the avail-ability of fruits and vegetables in eachseason after studying the ‘farmer har-vest calendar’. It also analyses the pastbuying data of customers and the fre-quency of orders to determine the kindof products that need to be procured.This way it gets insights into thedemand and supply of produce and

informs the farmers about what isexpected of them.

Once the produce comes in, it isput into crates at the collection cen-tres. The fruits and vegetables areweighed and tagged. Then a messageis sent out through an app on the sup-plied quantity and the price and theamount is credited to the farmers’bank accounts the next day.

Ninjacart has also adopted innova-tions such as trolleys to load andunload the crates, which is faster than

the traditional lift-and-place method.The crates are placed in the vehicles fordelivery, which starts from early in themorning. The entire process is man-aged through an app. Each crate has aradio frequency identification (RFID)tag so that the firm knows exactlywhich fruits and vegetables have beendelivered.

“RFID plays a critical role in everystep of our supply chain, includingquality control. You are clearly able toidentify which farmer gave you whatproduce, and if a particular farmer’sproduce ‘doesn’t make the cut’,” saysHarish Swaminathan, who leads theengineering and product team atNinjacart.

Ninjacart also maps the best routesfor the drivers to reach their destina-tions. This includes tracking the vehi-cles using the global positioning sys-tem (GPS) to detect any deviationsfrom the assigned route.

Working closely with its farmerpartners, Ninjacart ensures a reliablesupply of high-quality products thatalign with the market need. It providesdata-driven recommendations onwhat crops to grow, and communi-cates accurate pre-harvest pricinginformation and demand patterns.The company claims that over the lasttwo years, it has been able to improvethe net realised income of its farmersby 15 per cent.

“We are a one-point sale, so thefarmers can focus more on farmingthan on figuring out where to sell andhow much to sell. The money comesdirectly into their bank accounts andthey don’t face deferred payments.Becoming part of the banking systemis also making them eligible for loans,”says Nagarajan.

Ninjacart has so far raised over$150 million from top investors suchas Tiger Global, Accel, SteadviewCapital and tech billionaire NandanNilekani. Last December, the compa-ny got a huge fillip when Walmart,the world’s largest retailer, along withits subsidiary e-commerce firmFlipkart, announced a strategicinvestment in Ninjacart.

The relationship promises to befruitful for both parties. While Walmartand Flipkart can strengthen directsourcing of fresh produce for WalmartIndia’s Best Price B2B cash-and-carrystores and Flipkart’s online grocerybusiness Supermart, the investmentwill help Ninjacart expand its cus-tomer base, reach new cities and gainexposure to global best practices.

“Fresh food is a $130 billion mar-ket. Our vision is that Ninjacartshould have a role to play in all thevegetables and fruits that an averageIndian consumes. That is an auda-cious mission and we are workingtowards it,” says Nagarajan.

14 TECHNOLOGY 4.0 MUMBAI | THURSDAY, 9 JANUARY 2020 1>

In an age of instantinformation, connec-tivity must be effec-tive, affordable andalways on.

Especially whenthe Internet of Things(IoT) is connecting bil-lions of devices and“sensorising”� almosteverything. Frompipelines to assemblylines to logistics andconsumer electronics.As sensors activelytransmit data across

systems, the biggest need of the hour is speed, qual-ity and affordability of connectivity.

While most retail consumers are dependent onmobile service providers for connectivity, cellularnetworks will choke as devices begin to ride theirbandwidth. These networks were not designed forIoT. Moreover, cellular networks are best in urbanareas but are not as effective in rest of the places.

IoT is increasingly shifting to satellite-based con-nectivity solutions. The world’s largest connectivi-ty providers are now focusing on IoT solutions.These include Iridium, OrbComm, Inmarsat,Globalstar and Vodafone IoT.

In some ways the satellite broadcast revolutionwhich beamed TV signals to million of homes overthe last few decades are now moving to the IoT.

Satellite IoT has become a strong market seg-ment by itself. A recent report by research firm NSRsays that the market will grow to $11.5 billion in thisdecade. “Transport and cargo has been the mainmarket driver traditionally...agriculture and con-struction market segments see the strongest increas-es driven by partnerships with heavy machinerymakers, but other segments, like energy and mar-itime, will also contribute to the future revenue pie,”says the report.

A shift within this market is towards small satel-lite constellations. Elon Musk promoted SpaceX hasrecently its third batch of 60 Starlink satellites. Apartfrom IoT, Musk’s objective is to control the world’sinternet connectivity which will ride on satellites.Swarm Technologies has received approval from

US regulator FederalCommunicationsCommission to launch60 miniature satellitesto create an ever-pres-ent network and con-nectivity to devicesacross the world. “Smallsatellite IoT constella-tions will disrupt themarket longer term.Lower cost satellitearchitectures, with low-er total cost of owner-

ship for end users, willdrive new customers to these services,” NSR says.

Satellites bring connectivity to virtually everypart of the world. This has important implicationsfor logistics, shipping and transportation sectors.Ships, trains and trucks can be connected to theirorganisations even when they are in locations with-out cellular connectivity.

However, the cost of satellite-based connectivi-ty is still not affordable for many companies. Onekilobyte of data can cost a dollar while for cellularservices it is a fraction. A Silicon Valley startup by anIndian technologist is offering an affordable solu-tion. Parth Trivedi, CEO and Co-Founder of SkyloTechnologies has developed low-cost hardware andsolution that is ideal for Indian and emerging mar-ket conditions. Skylo has transformed a satellitereceiver dish into a portable printed circuit board-based device combined with IoT connectivity.

Skylo is working with BSNL and the IndianRailways to place the Skylo Hub satellite connec-tivity device on coaches. Sensors placed in the coachwill communicate information about their conditionto the Skylo Hub device which will in turn instant-ly relay the data using satellite connectivity.

Officials managing each train will get real-timeinformation and advance alerts about potentialmaintenance and failure issues. This is part of thesmart coach initiative of the Railways.

Low-cost, high-speed and ever-present connec-tivity can be a reality with new satellite technologieswhich are rapidly changing the communicationssector. Both government services and enterprisescan benefit in from such breakthroughs as most ofthe country gets connected with satellite IoT.

Low-cost, high- speed andever-presentconnectivity canbe a reality withnew satellitetechnologies that are rapidlychanging thecommunicationssector

Satellites willdrive IoTconnections

KRANTI NATIONPRANJAL SHARMA

Supply chain firm Ninjacart is using technology to connect farmers with retailers and cart 1,400tonnes of fresh produce every day, writes Peerzada Abrar

From farm to fork

ALGO RHYTHM

Digital banking is all aboutcustomer convenience. Duringthe last decade, digital bankingsaw a huge growth, largelydriven by fintech and new-agetech companies who broughtconvenience and cluster-freeapproaches to the bankingecosystem, providing muchmore than just banking services.A fallout of that is the leakage ofbusiness from retail banks tothese new age players, whichare becoming bigger with eachpassing year . According to theCustomer Banking Reportin Retail Banking by Bain &Co based on a surveyconducted across 22countries, customerconfidence in the new-agebanking system is increasing,

and this is helping youngercompanies to enter themainstream. According to thesurvey, 75 per cent of therespondents in India said thatthey used Paytm in the past yearwhile 70 per cent of those inChina said they used Alipay.

BANKING ON DIGITALCONVENIENCE

| UK-based NatWest’s Home Agent digitalplatform connects first-time home buyerswithpartners providing property valuation, utility deals,moving services, cleaning services, among others

| Capital One in the US offersonline vehicle listings andtools to immediately prequalifycar buyers for financing

| DBS in Singapore runsthe largest direct seller-to-buyer car marketplacein the country

How banks are leveraging the ecosystem

FIND AND FINANCE HOME

Search for a homeby Zoopla

Moving service byAnyVan News, articles and

advice for homebuyers and owners

Additionalborrowing

Bank accounts

Insurance

Utilities deals byuSwitch

Home repairs byplentiffic

Rubbish removalby AnyJunk

Digital montageapplication

Property valuationby Hometrack

MOVE IN AND MAINTAIN FINANCIAL PRODUCTSAND INFORMATION

Nat West's Home Agent ecosystem in the UKintegrates a range of home-related services

Fintechs are becomingmainstream in emergingmarkets% ofrespondents who have used thesecompanies in the last12 months

Affordability and payment

calculator

�All age group �Age 25-34

Brazil

Banc

oIn

ter

Alip

ay

Huab

oi

We

chat

pay

JDFin

ance

Art

Fortu

ne

Devi

plat

a

PayU

Payt

mG0

0gle

pay

phon

ePe

China Columbia India

100

80

60

40

20

0

What is the overall policy andapproach to new technologies at KBL?Before Independence, when the rulerscurbed manufacturing in India byimposing very high import duties oncomponents, KBL found ways to makemachines that were cheaperand better than the foreignmachines which werepromoted in India at thetime. In a remarkableturnaround, today KBL isBritain’s largest pumpmanufacturer, through oursubsidiary, SPP Pumps Ltd.Indian companies must usethe latest technology forefficiency and self-reliance.We have grown into an Indian MNCwith manufacturing facilities on fourcontinents; the US in North America,the UK and the Netherlands in Europe,South Africa and Thailand and with sales to over 165 countries across the globe.

We are interested in understanding

the new technologies available, butthe ability to monetise them is themost important aspect before startinga project. There needs to be a clearbenefit either to the customer, whichthey value, adding stickiness to the

brand or a tangible benefit tothe company operations. Weoperate the world’s largest3D printer for pumps andalso various othertechnologies like artificialintelligence (AI), augmentedreality (AR) and virtualreality (VR). Each of theseare deployed in specificareas where the companybelieves there is value.

Which kind of technologies have youapplied so far?We started with AI as a knowledgemanagement system and thenextended it to smooth operations byconnecting the front end andoperations via the AI system for greater

automation. We have alsoimplemented 3D printing inmanufacturing with augmentedreality (AR) and virtual reality (VR). Weuse AR for remote monitoring of thepumps which are often located inlocations that are not easily accessible.And VR is used to train our teamswhich work on maintenance andrepair. It’s been very interesting forKBL, this is a new area of developmentand has focussed more around trainingand skill upgrade. I think we still have along way to go on the AR and VR side ofthe business and we will work todevelop models we can monetise forthese technologies in the next fewyears. We have quite a few ideaswhich we want to try.

How has this impactedthe quality and cost of pumps?We have seen a muchbetter planning andoperations process viaour AI system which isreducing delivery times tocustomers. We also see thecustomer able to look at ourproducts and be able tointelligently interact with themand get the information theyrequire, adding value to the work

they do. We have seen the 3D printingprocess clearly benefit the quality ofpumps and again reduce deliverytimes. Our customersinteract with three of thetechnologies. Theseare our AI systemcalled Dolphin, ourVR programmes fortraining and our ARprogramme foranother specificrequirement.

Was there a lot of reengineering of process required?We have always ensured that data is

complete across the organisation butgiven the changing trend of how

the millennials and Gen Zinteract with data we needed tomake our systems moreautomated and intelligent sothat we are able to use thecompany’s knowledge andlearnings over the last 100 years

seamlessly. This has been donevia the AI systems and into the

programmes sendingdata to our printers.

Some items that

were known to few people have beenconverted into logic on our AI systems,so everyone has access to it oftenwithout even knowing it. The systemtakes care of any errors that causedhistoric issues automatically. The techis allowing us to implement self-diagnostics and predictivemaintenance.

How has Internet of Things been used at KBL?This has been more around our plantswhich have smart machines andproducts that have a lot morediagnostic systems and are able tocommunicate with us and the client

for more optimal use andalso to reduce down timeand optimise spare partinventories.

Which parts of the processare automated at KBL?There is a lot ofautomation around thefront end of the businesswhich starts at offermaking and continues tillthe order is pushed intoour SAP system. The sales

team can then be more focused ondeveloping the market and increasingour penetration.

‘We have seen much better planning and operations via our AI system’Kirloskar Brothers Ltd (KBL) has completed 100 years of its incorporation. KBL Pumps helpirrigate over 65 per cent of India’s land and provide 35 per cent of the population withdrinking water. KBL has been a pioneer in technology for many decades and hasembraced fourth industrial revolution ahead many others. In a conversation with Pranjal Sharma, the chairman of KBL, SANJAYKIRLOSKAR, lays out the importance of usingemerging tech for manufacturing sector.

We have alwaysensured data iscomplete across theorganisation butgiven the changingtrend of howmillennials andGen Z interact withdata we needed tomake our systemsmore automated

SANJAYKIRLOSKARChairman,Kirloskar Brothers Ltd

CARTING SUCCESS

�Ninjacartprocures freshproduce fromfarms inremotestvillages acrossIndia in 12 hours

� It movesover 1,400tonnesoffreshproduceper day

�Algorithms,big data,predictiveanalytics,mobileapplicationsand IoT powerits just-in-timesupply chain

� The supply chaincreates a seamlesslinkbetween44,000 farmers andits customer base of60,000 kiranastores andrestaurants acrossseven cities

� The companyhas slashedfood wastageto less than 1per cent,compared to 35per cent intraditionalsupply chains

� It has beenable toimprove thenet realisedincome of itsfarmers by15 per cent

NITI lists ways to earn more from highwaysMEGHA MANCHANDA


To generate more revenue from theNational Highways, the NITI Aayog hasgiven a slew of suggestions to the min-istry of road transport and highways aswell as the National Highways Authorityof India (NHAI). These include levyingdevelopment charges and sharing rev-enue after developing amenities along-side the highways.

These ideas are part of the value cap-ture financing (VCF) model that has beensuggested by the government think tank.

It is essentially recovering part or fullvalue that public infrastructure gener-ates for private landowners or the states.

In case of NHAI, it is the states andprivate land owners that benefit (in theform of appreciation of land prices)from the National Highways but theagency makes all the investment. Inorder to capture the value of financing done by the NHAI, the ideahas been proposed.

NITI Aayog has been working withthe NHAI to ensure an improvement infinancial sustainability and project via-bility, said an official. The official addedthat in this regard, NITI Aayog has sug-gested a number of models, some ofwhich have been implemented by theNHAI. These include asset monetisationtechniques, including the toll-operate-transfer (ToT) model and raising revenuethrough Infrastructure Investment Trusts(InVITS), both of which are being active-ly pursued by NHAI.

It has also been recommended that

the VCF be mainstreamed in NHAI proj-ects. Through VCF, non-toll revenuescan be maximised through a number oftools. These include vacant land tax, spe-cial assessment tax, transfer of develop-ment rights (TDR) and land pooling,among others.

It has also been recommended thatother means of raising additional rev-enue such as InfrastructureDevelopment Funds, and NHAI’s landacquisition bonds may be explored. Thecreation of project-specific special pur-pose vehicle or SPV has also been rec-ommended.

A draft policy framework on VCF andtransit oriented development (TOD) has

also been sent to a number of ministries,including the ministry of road transportand highways by the infrastructure con-nectivity vertical of the NITI Aayog.

The document contains a number oftools aimed at maximising revenuesthrough the VCF and if put into practice,it can significantly improve NHAI’shealth. TOD is particularly important,where planned infrastructure develop-ment occurs in the region around theprojects. These are often a mix of com-mercial, residential, and institutionalaspects. Also, part of the VCF is the landbonds, which NHAI plans to issue tomake payments for acquiring land fromthe states or other stakeholders. The

authority is mulling an innovative fund-

ing mechanism amid escalating landacquisition and compensation cost.

Through this mechanism, NHAIwill not have to make an upfront pay-ment towards land acquisition. Theroad ministry has been grappling withhigher land acquisition cost for thelast few years.

Approximately, ~12 crore per km ofcost is incurred in the expansion of ahighway from two-lane to four-lane one.The number would be five to six timeshigher in a greenfield project like anexpressway.

The cost of the marquee EasternPeripheral Expressway is ~11,000 crore, ofwhich ~5,673.05 crore was land cost.

�Value Capture Financing is atype of public financing thatrecovers some or all the valuethat public infrastructuregenerates for privatelandowners

� It is essentially recoveringpart or full value that publicinfrastructure generates forprivate landowners or states

� In case of NHAI, it is the statesand private land owners that getbenefited (in the form ofappreciation in land prices) fromthe highways but the agencymakes all the investment

MONEY MATTERS

Relief package soon for farmers with over~2 lakh short-term loan: Maha governorPRESS TRUST OF INDIA

Mumbai, 8 January

Maharashtra Governor Bhagat Singh Koshyarion Wednesday saidthe state government wasfinalising a relief packagefor farmerswhoseshort-term crop loan outstandings exceed ~2 lakh. Similarly, in order to encourage farm-ers who are repaying their crop loans on time,the state government will announce newmeasures shortly, the governor said whileaddressing the joint sitting of both Houses ofthe state legislature in the Marathi language.

A special one-day session of the state legis-lature was held to ratify the ConstitutionAmendment bill, which was passed by

Parliament on December 11.Maharashtra Chief Minister Uddhav

Thackeray, whose party Shiv Sena heads thecoalition government comprising the NCP andCongress, had in December last year announcedan unconditional loan waiver for farmers.According to the “Mahatma Jyotirao PhuleFarmer Loan Waiver Scheme” announced bythe CM, farmers whose loan is up to ~2 lakh tak-en between April 1, 2015, and March 31, 2019,and which has not been repaid till September30, 2019, will be eligible for the waiver.

Koshyari said the loanwaiver scheme coversthe outstanding crop loan amountupto ~2 lakh,which includes the principal amountand theinterest, as on September 30, 2019.

PRESS TRUST OF INDIA

Mumbai, 8 January

Company boards are operating under increased“political and regulatory” pressure to improvetheir governance standards, and the resultantrisk averseness is a prime reason for the growthslowdown, HDFC Chief Executive Keki Mistry(pictured) said on Wednesday.

The mortgage lender’s executive saidbankers are not taking lending decisionsbecause of this risk averseness syndrome, andwarned it will hamper India’s animal spiritunless there is a change.

The comments come at a time when officialestimates for FY20 project GDP growth hurtlingto an 11-year low of 5 per cent. The governmentis also allaying fears in the face of greater actionsby agencies like CBI, ED and SFIO.

“Boards are currently operating under fargreater scrutiny than ever before, with greaterpolitical and regulatory pressure on companiesto improve their governance standards,” Mistrysaid at an event organised by industry lobby CIIhere. Citing a few instances, he warned thisextreme risk averseness will “hamper India’sanimal spirit and could lead to a slowdown ineconomic growth in the country”, adding that afew calculated risks ought to be taken.

Without taking names, the long-standingkey executive of the largest pure play home fin-ancier, who sits on many boards himself, saidthere have been instances of independent direc-tors refusing to approve strategic investmentsfearing that they were “risky”.

The wariness can result in more inde-pendent directors of good caliber staying awayfrom joining company boards where theymight be needed the most, Mistry said, hint-ing that the “overarching compliance pres-sures” need to be softened. He said the CIIwill be leading a delegation to the governmentto impress its concerns on the pressures facedby independent directors.

On bankers’ conduct amid this period ofheightened risk averseness, Mistry said thatthere have been instances wherein lendershave not renewed their loan pacts even withthe good customers, which is hurting eco-

nomic growth.“One of the reasons why we are seeing a slow-

down in the economy in the last couple of yearshas been the fact that risk taking has become ahuge issue of banks. Banks have becomeextremely reluctant..there is plenty of liquidityin the system, there is no shortage,” he said.

“Risk averseness is something that is hurtingthe economy in a big way and will continue tohurt the economy till we become more willing totake on risks,” Mistry added.

Regulations should not become such thatbecause of them people start becoming so fear-ful that they do not take decisions, he toldreporters later.

He also added that we are at present goingthrough a period of transition on the same andalso welcomed government steps on this front.

On the high quantum of non-performingloans, Mistry said there is a need to look at suchinstances as a regular business occurrence.

He also sought for a nuanced view onwhistleblowers, stating that mala fide intentionsneed to be curbed as many a times accusationsget made out of personal factors like greed andanimosity, and also termed some individualsas “opportunists”.

‘Political, regulatorypressure impacting risk taking by firms’

TEJALRAO

Chennai, 8 January

Usha Prabakaran was at home, talking on thephone with a college friend, when she stoppedmaking sense. Her speech scrambled. Her visionblurred. She dropped the receiver and fell to thefloor. It was 1998 and Prabakaran, a formerlawyer living in Chennai, had just sloggedthrough a decade of research and recipe testingfor her comprehensive, single-subject cookbook,Usha’s Pickle Digest. A party was scheduled forthe following week.

At the hospital, Prabarakan learned that a rarefungus had lodged itself in the front of her brain.She needed surgery to remove the tumor, andlong periods of rest to recover. The book, and theparty, were quickly forgotten. But over the nexttwo decades, Usha’s Pickle Digest, self-publishedby an unknown author, with a first print run ofjust 1,000, became a cult classic in India and itsdiaspora — praised for its precision and scope,celebrated on blogs and podcasts and hunteddown in shops, where it sold out.

Hard copies were scarce. For years, the onlyway to get one was to email Prabakaran herself,who might promise to print another run soon,when she was feeling better.

Some couldn’t wait — they photocopied pages— which was fine by Prabakaran. She didn’t feel asense of ownership over her recipes. The authorbecame known for answering friendly inquirieswith a free PDF, which is how her pickle bookhopped around the world as an email attachment.

Prabakaran, now 64, became known as ‘pick-le queen’, but she wasn’t interested in monetis-ing that title. “I know nothing about publishing,and I was never interested in selling books,” shesaid at her home in Chennai. “My job is to keepthe past alive.”

India’s pickle culture goes back thousands ofyears to when cucumbers and other vegetableswere simply preserved in salt. Modern pickles aremore complex and probably more delicious, too.

Chitra Agrawal, a New York cookbook authorand founder of the pickle company BrooklynDelhi, remembers the ceramic jugs at her grand-mother’s home in Bengaluru, which held lemonsin a slushy saltwater brine. This pickle was sea-soned with fresh green chiles and mango ginger, afruity-tasting rhizome related to turmeric.

But the pickles Agrawal enjoyed with her fami-

ly up north were different. For Punjabi-style bur-van lal mirch, long red chillies were individuallystuffed with fennel seeds, onion seeds and fenu-greek seeds, then stored in oil, not brine.

Mango and lime pickles are commonly sold inthe US, but nothing escapes pickling in India:plums and hog plums, cherries and chokecher-ries, sprouted fenugreek seeds, bamboo shoots,fat gooseberries, hibiscus flowers and green wal-nuts. Cooks work with all kinds of fruits, vegeta-bles, flowers, roots and seeds, using every ediblepart of every possible food.

These pickles trot out at breakfast, lunch anddinner, expanding the pleasures of every meal,from a plain bowl of rice and yoghurt to a grilledcheese sandwich.

Many foods are preserved through anaerobicfermentation: The fresh food is first sun-dried toget rid of excess moisture, then salted. In thewarmth of the sun, bacteria digest the sucrose,producing acids that both preserve the food andprevent the growth of other, less friendly bacteria.

Other pickles are brined in salt water, vinegar,citrus juice, tamarind and even yoghurt. The onlyreal defining characteristic of India’s pickle cul-ture may be its range. Or, as Prabakaran put it, “aninordinate variety of permutations”.

In her book, Prabakaran limited herself to1,000 recipes. When I finally got my own print-on-demand copy of Usha’s Pickle Digest, throughAmazon, I was dazzled.

The book isn’t pretty. It’s text-heavy and mini-mally designed, resembling the most utilitarian,guide-like cookbooks of the 1970s. “My book ismeant to be used by people who cook,”Prabakaran said. There are tips in bold for, say,removing the stamens from plantain flowers (tugat them with the blunt edge of knife) and choos-ing the most pickle-worthy okra (look for tails thatbreak with a snap).

A straightforward “anti-waste” chapterincludes recipes for plantain skins, jackfruit seeds,ridge-gourd peels and lime leaves, which oftenend up in the compost heap.

While restaurant chefs make headlines nowfor cooking less wastefully, pickling has alwaysbeen about saving the scraps, developing flavorand texture with ingenious frugality.

A chart at the back of the book translates ingre-dient names into nine languages, includingMarathi, Bengali, Telugu, and Tamil, which servesas a gentle reminder of the multiplicity of India’s

pickle culture. We met Prabakaran. Prabakaran is small-

framed, with a wicked sense of humor and a big,throaty laugh. Her forehead is dimpled where thetumor was removed, close to the hairline, and shehas no interest in reconstructive surgery.

“People care too much about looks,” she saidwith a shrug. “If I have any spare time, I want towork on my books.”

Her garden full of fruits and vegetablesincludes this wild lemon, two kinds of limes,papaya, long pepper, betel vines and pineapple.

Her home is at the end of a cul-de-sac of gatedhouses with short driveways and lush, overgrowngardens — plumeria, wild lemons, papaya, birdsof paradise. The morning the reporter visited, thepavement was splattered with light rain, and acaramel-colored calf wandered along the wall.

In the open kitchen, a cook boiled tea andsteamed idlis for breakfast. “You have to try thiswith my citron pickle,” Prabakaran said.

“Isn’t it absolutely dynamite?” she asked. Thequestion was rhetorical. She was grinning.

Prabakaran grew up here in Mylapore, an oldneighborhood in central Chennai. At home, thefamily spoke Tamil and English, though alongwith the children of other well-to-do families shealso learned Hindi and French, in between karateand Carnatic music classes. In college, where shestudied law, she met her husband, S G Prabakaran,

who was also training to be a lawyer.Her mother enjoyed reading the newspaper

cover to cover, but cooking, not so much.Prabakaran’s mother-in-law, though, scheduledher days around food, preserving new batches ofseasonal pickles every week, sending Prabakaranhome with jars of gooseberries in yogurt, sweet-and-sour orange peel and stuffed Bengal plums.

Prabakaran was hooked. She apprenticed her-self, learning to turn jars in the sun so the fruitdried evenly, and to combine new and oldtamarinds to balance out their acidity levels. Shemade so many pickles that she often gave jarsaway to friends and family, who begged her towrite down a few recipes and share them. As shetried to standardise the recipes, her projectbecame increasingly more ambitious.

She wanted to document heirloom pickle vari-eties, and to share every single tip she had learnedalong the way. What would be the point of sharingrecipes if she didn’t explain how to sterilise glassjars, and grind masalas at home?

She spoke with publishers, and when nonewere interested in her idea, Prabakaran decided todo it herself.

Though there are plenty of good-quality indus-trial pickles in India, pickling, as a discipline,belongs to home cooks and community picklemakers. These cooks pass their knowledge ofregional pickles and house styles by working

alongside other cooks.Prabakaran worried that without documenta-

tion, the gradual loss of this knowledge wasinevitable — that more and more people wouldmake fewer and fewer pickle varieties, until even-tually, the expertise was lost.

“The reason for writing the book was to ensurethat the vast culinary heritage of this land stays onthe map,” she said.

To broaden her sweep as she researched, sheturned everyone she met into a source: friends,family, their colleagues, cooks working in mid-dle-class home kitchens and banquet chefs cater-ing weddings.

“My friends called me a crafty devil, because Icould wriggle a pickle recipe out of anyone,”Prabakaran said. After she narrowed the recipesdown from a catalog of 5,000, she tested each onein her home kitchen three times — a more thor-ough process than is used for many glossy cook-books from big publishers.

After her husband died in November, sheturned her focus to finishing her second book.Usha’s Rasam Digest, in the works for a decade,collects 1,000 recipes for rasam, an everyday soup also called saaru. Rasam, which is vegetari-an and generally quick and inexpensive to make,is deeply familiar to Indians, particularly southIndians, but different regions and families havetheir own methods. Friends who had supportedher pickle book were sceptical — was therereally so much variation when it came torasam? Would she even be able to find 1,000recipes this time around? And why devote awhole book to something so ordinary?

Prabakaran was undeterred. She sat down towrite a love letter to rasam as a genre, extollingits value and declaring it worthy of celebration.Then she spent 10 years researching it, gather-ing and testing recipes, documenting patternsand anomalies. As she collected recipes fromhome cooks, she found some that were so extraor-dinary, they belonged in a “dazzling superstars”chapter. Others made the most of kitchen scrapslike empty pea pods, and showed off the imagina-tion and intelligence of home cooks, who couldstretch flavors out of just about anything.

“Even a simple black-pepper rasam holds somuch promise,” she said. Prabakaran plans toself-publish the book in March. She wants to makeit easy for cooks to find, right from the start, evenif that means giving it away for free. “I just wanteveryone to understand the depths of Indiancookery,” she said, opening another jar of pickle,reaching for a spoon.

©2020 The New York Times News Service

Usha Prabakaran’s 20-year-old cookbook, crammed withrecipes from home cooks, has become a cult classic in India

(inset) Usha’s Pickle Digest. Prabakaran plans to self-publish Usha’s Rasam Digest in March

India’s ‘pickle queen’ preserves everything, including the past

MEGHA MANCHANDA


Amove that may pro-vide relief to stuckhighway projects, the

National Highways Authorityof India (NHAI) has intro-duced the ‘harmonious exit’clause in the new concessionpacts for build-operate-trans-fer (BOT) projects.

The NHAI on Wednesdaysought views on the draft mod-el concession agreement,which mentions harmonioussubstitution of the conces-sionaire.

“This would essentiallyallow the lenders to transferthe stuck project to anotherconstruction company if thefirst one is unable to deliver ontime,” an official said.

According to the draft mod-el concession agreement, theNHAI and the concessionairewould agree that in case of any

financial default, the lender orbanks can invite, negotiate andprocure offers, either throughprivate negotiations or publicauction or tenders for thetakeover and transfer of theproject highway.

“If the authority has anyobjection to the transfer of con-cession in favour of the nomi-nated company in accordancewith this agreement, it shallwithin 15 days from the date ofproposal made by the lenders’

representative, give a reasonedorder after hearing the lenders’representative,” the draft said.

If no objection is raised bythe NHAI, it shall be deemed tohave been accepted.

The NHAI’s latest availableannual report, for 2017-18(FY18), shows the authorityhad 1,014 cases of arbitration— significantly higher from 125in 2016-17 (FY17) and 119 in2015-16 (FY16).

The value of claims for FY18was pegged at ~55,344 crore,against ~42,074 crore in FY17 and ~30,071 crore in FY16.The data for 2018-19 was notavailable.

The NHAI is in the processof reviving the BOT (Toll) mod-el and amendments proposedin the draft model concessionagreement are in sync with thisobjective, an official statementsaid. The amendments havebeen proposed after delibera-tions with the Ministry of Road

Transport and Highways,Department of EconomicAffairs, Ministry of Finance,and NITI Aayog.

Besides harmonious exit,the other major modificationsproposed in the model con-cession agreement are relatedto capping of liabilities ofeither party throughout thesubsistence of the agreement,tightening of conditions prece-dent prior to declaration of theappointed date, and amend-ment in dispute resolutionmechanism.

They also include changesincorporated from the recentupdates in model agreementsin other modes of implemen-tation, such as hybrid annuitymodel and engineering, pro-curement, and construction.

This move will draw a fineline of functional balance ofpublic-private partnership fordevelopment of highway infra-structure in the country.

Lenders can now transfer stuckBOT projects to other developers

ILLUSTRATION BY AJAY MOHANTY

16 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 9 JANUARY 2020 1>

MUMBAI | THURSDAY, 9 JANUARY 2020 BRAND WORLD 17. <

Breather for India...The data suggests that less than half of thesecompanies have so far complied with thenorm. Industry bodies feel that the normcould be onerous and will not guaranteeeffective board leadership.

The Sebi (Listing Obligation andDisclosure Requirement) Rules do not man-date any separation. In many cases, it is thehead of the promoter group (the familypatriarch) who is CMD. In some cases, chair-man is also CEO of the company.

This norm was part of the Uday Kotakcommittee report, which was of the viewthat the issue of whether to separate theroles of chairperson and CEO/MD, whilenot a recent phenomenon, was a growingconcern in corporate governance world-wide. The separation of powers of chair-person and CEO/MD is seen to provide abetter and more balanced governance struc-ture. The committee cited global practicesand said in some jurisdictions like the UKand Australia, this debate had tilted infavour of separating the two posts. In coun-tries such as France and the US, the issuecontinues to be vigorously debated.

Overseas probe...The high court ruling had invalidated theserequests last year, but the Supreme Courtdecision means the investigation can con-tinue for now. The top court said it wouldhear the case again after two weeks.

Representatives for the Adani group did-n’t immediate reply to an email seeking

comment. The Adani group has in the pastdenied the allegations.

Cabineteases rules...Coal ministry officials said all such con-cerns have been addressed under the latestamendments to the rules.

Addressing the media after the Cabinetmeeting, Union Minister of Coal PralhadJoshi said the coal sector was now open forforeign direct investments. “Previouslythere was a restriction that anyone who par-ticipates in the auction should have coalmine operation in India. That has beenremoved. Anybody can participate in coalauction,” he said. The Ministry of Coal isplanning to offer the first tranche of coalunder auction by March 31.

As reported earlier, the Centre mightoffer coal blocks only for commercial min-ing and sale. A K Jain, secretary, Ministry ofCoal, said, “The companies which are notengaged in any coal-use industry can alsoparticipate in auction. They can mine anduse coal for their own consumption, sell orfor any other purposes. This flexibility hasbeen introduced in the CMSP Act.”

In 2014, a Supreme Court decision can-celled all coal block allocations made overthe past two decades. In 2015, the Centreoffered 34 coal blocks in first ever e-auc-tion held in three tranches. The coal blockswent to private companies, includingHindalco, Balco, Jindal, JSW, Adani, GMR,Essar, among others. This was for captive orown use in power, iron and steel sectors.This year, three tranches of coal auctionwere held after a hiatus of two years andnine blocks were successfully awarded.

Now, the government will also offerunexplored coal mines, asagainst only explored blocks ear-lier. In addition, the governmentplans to do away with therequirement of ‘previousapproval’ to save time in com-mencing operation of mines.Coal ministry officials said theprovision of ProspectingLicence-cum-Mining Lease (PL-cum-ML) had been introducedfor the coal/lignite sector. Thispractice of PL cum ML is preva-lent in the oil exploration andmineral mining sector whereunexplored blocks are offered.

‘’This will help in increasingthe available inventory ofcoal/lignite blocks for auction.By including partially exploredblocks in the auction, highernumber of blocks can be offeredat an early date,” said a coal min-istry official.

The move is expected to helpthe government cut down oncoal import as well.

Reacting to the decision,Sajjan Jindal, Chairman andManaging Director of JSWGroup, said in a Twitter mes-sage, “Huge reform announcedby the government on commer-cial mining in coal. This will go along way in reducing the coalimports which is over $15 billiona year.”

Corporate earnings...Including Tata Motors, the Street expects,the Nifty50 companies’ combined net prof-it would jump by 50 per cent y-o-y. Analystsexpect Tata Motors to report a modest netprofit during Q3FY20, as against a net lossin the past two quarters, thanks to a bettershowing by its JLR subsidiary.

The earnings estimates of the individualindex companies suggest that the slow-down and the resulting financial pain couldget worse for non-financial companies,especially manufacturers.

The analysis is based on the Q3FY20earnings estimates by equity brokeragesincluding Narnolia Financial Advisors,Kotak Institutional Equities (KIE), MotilalOswal Financial Services, ICICI Securities,Emkay Global, Reliance Securities, andHDFC Securities. For banks and non-bank-ing financial firms, net sales are net interestincome, while it’s total income from sales ofgoods and services (net of indirect taxes) forothers. Net sales and net profit after tax forthe current quarter are based on brokerageestimates and may exclude exceptionalgains and losses.

The combined net profit of the indexcompanies, excluding banks and financials,is expected to decline by 5.8 per centYoYduring Q3FY20, a sharp decline from15.6 per cent YoY growth during Q2FY20.These companies’ combined net sales areexpected to contract by 3.4 per cent YoY, asagainst 3.1 per cent YoY decline in revenuesduring Q2FY20.

“With the Nifty near all-time highs andFII flows at a five-year high, one wouldn’t betoo amiss to conclude that India is in themidst of a major bull market. However, thereality is different. Economic growthmomentum has decelerated, while corpo-rate earnings have remained tepid for thepast two years,” writes Gautam Duggad ofMotilal Oswal Financial Services in theearnings estimates for the third quarter.

He says the corporate tax cuts have pre-vented a further slide in earnings estimates,but the FY20 earnings story is all aboutfinancials, with Nifty ex-BFSI earningsexpected to decline 2 per cent for the year.

Kotak Institutional Equity (KIE) is littlemore optimistic, but remains sanguineabout the growth prospects of the non-financial sector. “We expect net profits ofthe KIE coverage universe to increase 21per cent y-o-y in Q3FY20, led by the bank-ing and diversified financials’ sector.Excluding the banks and financials, weexpect net income of the KIE universe toincrease 6 per cent YoY. We expect YoY dou-ble-digit growth for most of the sectors,except for media, metals and mining(decline in realisations on a YoY basis), andtransportation sectors,” write KIE analysts,led by Sanjeev Prasad, in their earningsreport for Q3FY20.

Among individual index companies,ICICI Bank, Indian Oil Corporation, BharatPetroleum, Housing Development &Finance Corporation (HDFC), and StateBank of India are expected to top the earn-ings charts with more than 100 per cent y-o-y jump in net profits during the quarter.Together these five companies are expect-ed to add ~12,000 crore to their net profitsduring Q3FY20 over Q3FY19.

SOHINI DASMumbai, 8 January

In any industry, the rule ofthumb with legacy brandsis that they need a

makeover every decade or so.Adapt or lose is the reigningmantra. The Indian pharmabusiness, however, is anexception. Here brands suchas Calpol, Betnovate andBetadine (all well over 50 yearsold) are still raking it in, within their categories and for their companies, besideskeeping newcomers off the turf.

Analysts say that stickingto the old brands is a strategyperfected by global pharmamajors. Building a brandneeds patience and persever-ance and companies have tobe prepared for a very longgestation period between itslaunch and easy recall. It isalso expensive, draining offpotentially valuable resourcesfrom research budgets. Henceeven as thousands of newdrugs are launched every year,the decades-old brands are the

warhorses that global drugmakers rely on.

Ranjit Kapadia, an inde-pendent pharma analyst andconsultant says that doctorscontinue to prescribe them asthere are no reported cases of contra- indications.“Moreover, to ensure uptakeof their old products, MNCsoften give freebies or quanti-tative discounts to retailers.That also ensures good trac-tion in trade for mature mole-cules,” he adds

The Indian pharma markethas notched up an average 9-10 per cent annual growth rateover the last few years.Analysts say that about 30 percent of this market is consti-tuted by mature brands, clock-ing high double digit growthrates. GSK’s Calpol for exampleis growing at 21 per cent annu-ally according to latest data.Ditto for many more (see box)

The power of big moneyFrom GlaxoSmithKlinePharmaceuticals (GSK) toPfizer, large pharma multina-tionals are keeping the oldest

brands on the list, banking onthe vast amounts already spenton building them up into cate-gory beaters. Their dominancealso prevents newer brandsfrom rising up the ranks.

A senior analyst says thatthe situation was different 20years ago when small compa-nies (like Win Medicare withBetadine, a topical disinfec-tant) had a free run in theircategories. His point is thatwhenever there is a large MNCin play, small companies loseout because they are unableto match their brand power.Vitamins and nutrients is onesuch category and Becosules(Pfizer) is a case in point.

“It is difficult to beat therecall of a Becosules that isalmost a generic name,” saysan Ahmedabad headquartereddrug maker. The MNCs knowthe power of mature brandsand have spent the past fewyears building what they have,instead of expanding the list.Of the total 2,466 brandslaunched in the last year,MNCs have launched only 109 brands.

Strategic leverageGSK sold eight to 10 tail-endbrands in 2018-19, includingits Vitamin C brand Celin andanti-infective brand Septran.It wants to pare the list inIndia to about 20 over thenext year.

Analysts point out the bigspending on big brands per-petuates the cycle of maturebrands leading the pack. It isbecause the companies spentmore on a brand all thoseyears back that it has paid offnow, but instead of building anew set of labels for thefuture, these companies areleaning more heavily on theold winners.

“It is often considered aprudent business decision topush the established brandsas R&D costs are optimisedand one cannot afford to allo-cate funds for creating overthe counter brands,” says asector analyst based inMumbai. This could open upa weak spot for the MNC firmsin the future.

Some pharma companieshave created sub-labels orextensions of popular brands.GSK Consumer has launcheda new variant for headaches,over and above Crocin forcold, pain and fever that arealready part of its OTC play inthe country. Repositioning anold brand helps expand thefootprint. “This is somethingPfizer did with Corex. After the medicine faceduncertainty over the ban oncertain fixed dose combina-tions, it pulled out the Corex cough syrup in its thenexisting formulation andretained the brand for a newformulation,” said anotheranalyst. The strategy worked.Corex Dx has clocked a 20.5 per cent growth over the past year.

The oldest brands score the biggest wins for the pharma multinationals

Legacy brands spin goldfor GSKand Pfizer

IMAGE:ISTOCK

OLD IS GOLDBrand/Company MAT Nov 2019

Growth Rate (%)

Calpol (GSK) 2211..00Corex Dx (Pfizer) 2200..55Augmentin (GSK) 1199..00Betnovate C (GSK) 1188..00Gelusil MPS (Pfizer) 1155..00* MAT is moving annual tota Source:Motilal Oswal Research

> FROM PAGE 1

SOLUTION TO #2941 VVaarryy HHaarrdd:: ��

Solution tomorrow

HOW TO PLAYFill in the grid sothat every row,every columnand every 3x3box contains the digits 1 to 9

> BS SUDOKU # 2942

18 MUMBAI | THURSDAY, 9 JANUARY 2020 1>

The government plans toamend proposed rules forpolicing digital content so thetoughest measures apply onlyto big social media firms, twogovernment sources toldReuters, in a move that couldgive relief to other tech playersfearful of the new regulations.

The original proposal wouldhave forced all tech players, inaddition to Facebook, Twitter

and WhatsApp, to deploy auto-mated tools to check for unlaw-ful content and to appoint anofficer for “24x7” coordinationwith law enforcement.

The rules are part of India’sbroader efforts to tackle disin-formation and “fake news”.

Since 2017, rumour-mon-gering on social media hasbeen blamed for mob attacksthat killed 30 people across the

country. But the draft propos-als, called ‘intermediary guide-lines’ when they were releasedin December 2018, could haveapplied to a broad range oftechnology firms including e-commerce players, cloud stor-age providers and telecomscompanies.

The IT ministry is now con-sidering a two-tier systems —with stricter rules similar to the

original proposals applying onlyto social media companies, saidthe two government sources,who declined to be named asthe plans are still private.

“The problem is largelywith large messaging plat-forms, ones that enable inter-action. Some of the require-ments for non-social mediacompanies were unrealistic,”one of the officials said. India’

to a request for comment.The second government

source said that having twoseparate layers of rules wouldmean that big social mediacompanies such as Facebook,WhatsApp and Chinese videoapp TikTok would continueto face stricter regulation, buttechnology companies suchas Amazon.com couldbreathe easier. REUTERS

Change in proposed digital content norms on cards

The BJP on Wednesday suf-fered a setback in ZillaParishad polls in Nagpur, thehome district of party stal-warts Devendra Fadnavis andNitin Gadkari, while it was amixed bag for the saffron out-fit and other main parties inlocal body polls in other dis-tricts of Maharashtra.

The BJP won just 15 of the58 seats in Nagpur ZillaParishad (ZP), where theCongress bagged a handsometally of 30. In furtherembarassment for the BJP, itscandidate Maruti Somkuvarlost to Congress nomineeMahendra Dongre inDhapewada, the native villageof Gadkari.

Dongre secured 9,444votes, while Somkuvarreceived 5,501 votes. The ZP'sDhapewada circle (seat) waswith the BJP for the last threeterms. The BJP, however, faredwell in the Dhule ZP, winninga majority and unseating theCongress-NCP combine.

Polling for six ZPs - Nagpur,Akola, Washim, Dhule,Nandurbar and Palghar (332seats) - and the PanchayatSamitis (664 seats) falling intheir jurisdiction were held onTuesday and the counting ofvotes was taken up onWednesday.

The BJP, unseated frompower in Maharashtra late lastyear, emerged as the single

largest party with 103 of the332 seats on offer in the six dis-trict councils (ZPs).

The main opposition partyin the state bagged 194 out ofthe total 664 seats inPanchayat Samitis up forgrabs.

The Congress won 73 ZPseats and 145 Panchayat Samitiseats. The NCP got 80Panchayat Samiti and 46 ZPseats, while the Shiv Sena got49 ZP and 117 PanchayatSamiti seats.

In Dhule, the BJP for thefirst time won a majority. Theparty also won two panchayatsamitis in the northMaharashtra district.

The BJP got 39 seats in the

56-member Dhule ZP. The par-ty won Shirpur andShindkheda PanchayatSamitis.

In Dhule, the Shiv Sena gotfour seats, the Congress sev-en, the NCP three and inde-pendents 3. The district coun-cil was ruled by theCongress-NCP.

Since the last one year, theaffairs of Dhule ZP were beinglooked after by an administra-tor. In Nandurbar, the resultsthrew up a hung house withthe key to power being withthe Shiv Sena.

The BJP and the Congressbagged 23 seats each in the 56-member ZP. The Shiv Sena haswon seven seats. PTI

Local polls: BJP wins most seats amid poorNagpur show

INDIVJAL DHASMANA


India may just see a marginal recov-ery in economic growth, that will goup to 6.1 per cent in 2022-23 (FY23),

from the decade-low expansion project-ed at 5 per cent for the current fiscal year,said the World Bank.

Ahead of the Budget, the multi-later-al agency said that the scope of fiscalstimulus was limited, as weaker-than-expected tax revenues were beingaccompanied by higher public spend-ing, even as the industry is demandingsuch a stimulus.

In its flagship report titled GlobalEconomic Prospects, it said there was notmuch scope for further monetary eas-ing, given that inflation has crossed themid-way mark of the target range.

The consumer price index-basedinflation rate rose to a 40-month high of5.54 per cent in November, from 4.62 per cent in the previous month. TheReserve Bank of India has been man-dated to keep the inflation rate at 2-6 per cent.

In line with official AdvanceEstimates, the World Bank pegged eco-nomic growth at 5 per cent for the currentfiscal year, down 2.5 percentage pointfrom its earlier estimates on account ofthe liquidity crisis in non-banking finan-cial companies. It projected India’s econ-

omy to grow at 5.8 per cent during 2020-21 (FY21), and 6.1 per cent each over the next two fiscalyears. The new figures reflect the down-ward revision by 1.7 percentage point forthe next fiscal year, and 1.4 percentagepoint in 2021-22 (FY22). Growth for FY23was not given earlier.

These projections are based on the

assumption that the monetary policystance remains ‘accommodative’ andmeasures such as corporation tax ratecuts, income transfer to farmers, ruraldevelopment spend, support measuresfor the automobile industry, and furtherliberalisation of foreign direct invest-ment will begin to pay off.

If predictions come true, India will

lose the tag of the fastest-growing largeeconomy to China in the current and thenext fiscal year. However, it will againsurpass China’s economic growth inFY22 and FY23.

The interesting thing to watch out foris the economic growth in Bangladesh. Inthese four years, economic growth inBangladesh may beat India hollow. Theneighbouring country is projected to growat 8.1 per cent in the current fiscal yearand 7.2 per cent in FY21. It is again pro-jected to grow at 7.3 per cent each in thenext two fiscal years.

The report stated that a re-escalationin tensions between India and Pakistan,which had abated of late, will damageconfidence and weigh on investment inSouth Asia.

Amid the Washington-Tehran ten-sion, the GDP of Iran is projected to con-tract 8.7 per cent in 2019, against a 4.9 percent fall in the previous year. The belea-guered economy is projected to see flatGDP in 2020 and 1 per cent growth eachin the next two years.

The US’ economic growth is project-ed to grow at 2.3 per cent in 2019, 1.8 per cent in the current calendar year,and 1.7 per cent each in the next twoyears. The World Bank expects globalgrowth to recover at 2.5 per cent in 2020— up slightly from the post-crisis low of2.4 per cent last year amid weakeningtrade and investment — and edge upfurther over the forecast horizon.

This projected recovery could bestronger if recent policy actions — par-ticularly those that have mitigated tradetensions — lead to a sustained reductionin policy uncertainty, said the report.

World Bank sees protractedeconomic recovery for IndiaSees limited scope offiscal stimulus, givenlower tax revenues

WORLD BANK PROJECTIONS�India �China �Bangladesh �Iran �US �World

2018 2019 2020 2021 2022Note: Figures for India and Bangladesh are on fiscal year basis, figures for 2018 are actual numbers, rest are projections Source: Global Outlook report by World Bank

6.8

06.6

0 7.90

-4.9

02.

90

3.00

5.00

-8.7

02.

302.

40

5.80

5.90

0.0

0

1.80 2.50

1.00

1.70 2.

60

1.00 1.70 2.

70

6.1

05.

707.

30

6.1

05.

807.

30

7.20

6.1

08.1

0

PRESS TRUST OF INDIA


Facial recognition technologybacked by artificial intelli-gence has been installed atBengaluru, Manmad andBhusawal stations as test cas-es to identify and nab crimi-nals, railway officials said onWednesday.

The objective of theRailway Protection Force(RPF) is to link the facialrecognition system withexisting databases such as theCrime and Criminal TrackingNetwork and systems to iden-tify criminals who may beroaming the railway stations.The real-time face recogni-tion software will alert theRPF command centre of anyknown offenders.

Officials said that after thefacial recognition system istested, the technology will beimplemented across the rail-way network.

The Railway Board hasalso given its nod for carryingout works for video surveil-lance system (VSS) covering983 stations under Nirbhayafunds, according to a state-ment issued by the nationaltransporter.

RailTel, a miniratna PSUunder Ministry of Railways,has been entrusted with thework of providing Internet

Protocol (IP)-based VSS withvideo analytics and facialrecognition system. Rs 250crore was allotted to theIndian Railways this yearfrom the Nirbhaya fund forinstallation of VSS.

To have a better coverageand clearer image, four typesof full-HD cameras -- dometype for indoor areas, bullettype for platforms, pan tiltzoom type for parking areasand ultra HD-4k cameras forcrucial locations are beingprovided.

Live feed from CCTV cam-eras would be displayed onmultiple screens at the RPFcontrol room for monitoring.Each HD camera at the sta-tion consumes approximate-ly 1TB of data and 4k cameraconsumes 4 TB data permonth. The video feeds will

be stored for 30 days for play-back, post-event analysis andfor investigation purposes.Important videos can bestored for longer duration.

Under phase one, VSS isbeing installed at 200 sta-tions across India and tillnow work has been complet-ed at 81 stations. The SouthWestern Railway (SWR) hasrecently commissioned videosurveillance system at sixmajor stations -- Ballari,Belagavi, Vasco-Da Gama,Bengaluru Cantonment,Bangarpet, Hassan,Shivamogga Town andSathya Sai PrasanthiNilayam.

Integrated security sys-tems comprising CCTV havealready been installed at 11stations including Bengaluru,Yesvantpur and Mysuru.

With this, the SWR has func-tional CCTVs at 17 locationsand will complete the workin Phase one by having CCTVfunctional at a total 20 rail-way stations by end ofJanuary 2020.

Security personnel canmonitor these cameras notonly from station controlrooms but also from centralsecurity control rooms locat-ed at divisional headquarters-- Hubballi, Mysuru andBengaluru.

IP-based VideoSurveillance System (VSS)has also been installed at 10railway stations of WesternRailway namely BhavnagarTerminus, Udhna, Valsad,Veraval, Nagda, Navsari,Vapi, Viragam, Rajkot,Gandhidham. These steps area part of a security plan underthe Integrated SecuritySystem (ISS) which wasapproved in 2016 to strength-en surveillance mechanismat 202 railway stations.

The ISS will compriseCCTV cameras, access con-trol, personal and baggagescreening system and bombdetection and disposal sys-tem which together providemultiple checking of pas-sengers and baggage fromthe point of entry in the sta-tion premises till boardingof train.

Railway stations at Manmad, Bhusawalto get facial recognition tech as test cases

ABHIJIT LELE

Mumbai, 8 January

State Bank of India (SBI) willprovide a guarantee of projectcompletion to homebuyerswith the objective of pushingup demand for residentialunits. The scheme also aimsto complete housing projectsthat are stalled.

The Residential BuilderFinance with Buyer Guarantee(RBBG) will be for SBI-fundedresidential projects and thoseavailing home loans from SBI.The guarantee will be avail-able till the project gets anoccupation certificate. Thefees for such a guarantee willbe borne by the developer.

SBI Chairman RajnishKumar said the RBBG willfocus on the affordable hous-ing segment with home pricesof up to ~2.5 crore, in 10 citiesinitially. It may then considerextending this product to oth-er parts of the country.

Under this product, allreputed builders fulfilling theprescribed criteria by the bank

can avail of loans of ~50-400crore. The criteria for select-ing projects includes star rat-ing and CIBIL score. SBI hassigned an agreement withSunteck Realty for three exist-ing projects in MumbaiMetropolitan Region.

The RBBG will build confi-dence among homebuyers bysecuring their hard-earnedmoney and, at the same time,will boost the under-stress realestate sector.

Meanwhile, the bank post-ed 17 per cent growth in its

home loan portfolio for theDecember quarter. It hasmaintained its 22 per centmarket share in the housingfinance market (by banks andhousing finance companies)in the country, Kumar said.

The outstanding homeloan portfolio had risen to18.03 per cent year-on-year(YoY) to ~4.24 trillion at theend of September. Domesticcredit expanded by 8.43 percent YoY, driven by retail-per-sonal advances (18.9 per cent)in the September quarter.

SBI to provide guarantee ofcompletion to home buyers

Recoveries from stressed assets tobe higher in H2: Rajnish KumarSBI Chairman Rajnish Kumarhas said recoveries fromstressed assets will be muchbetter in H2FY20 on the backof resolution in big-ticketcases. The third and fourthquarters will be good ( forrecovery) and many assetswill be resolved in quarter

ending March and June, hesaid in an interaction atCredit Conclave, organisedby Edelweiss Group.

The wait for resolutionwill come down from thefive years taken earlier, theSBI chairman said.

ABHIJIT LELE

Documents

80‘USTERRORISTS’; likelyonCMDnorm€¦ · ingdirector(CMD). Whilethemarketregulatorgave ampletimetoIndiaInctoadhereto the rule, not many corporate houses have complied with it