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NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 13 NO. 208
FRIDAY, AUGUST 30, 2019
S E N S E X
37,068.93382.91
N I F T Y
10,948.3097.80
DOL LAR
₹71.78₹0.01
E URO
₹79.35₹0.21
GO LD
₹38,743.00₹52.00
O I L
$60.46$0.03
Is there a metro bias ineducation migration?
A previous piece on work-related migration showed that Indians were flocking to major metros. In contrast, education-related migration does not show a dominant movement to metros only. There are 13 districts where the number of people who moved for education-related reasons exceeded 50,000. Of these, only three districts make up a major metro: Bengaluru, Pune and Mumbai Suburban, the first two being the only districts to which more than 100,000 people migrated. Beyond them, Chennai is ranked 27, Kolkata 91 and the count for all nine Delhi districts is less than that of Pune.
Why does Andhra Pradesh stand out?
Of the 14 districts in Andhra Pradesh, 10 feature in the top 30 districts of India where people migrated to for educational reasons. With 70,000-75,000 migrants each, four of its districts are in the top 10 itself, namely Sri Potti Sriramulu Nellore, Krishna, Guntur and Visakhapatnam. Telangana, carved out of Andhra Pradesh in 2014, also makes its presence felt, with the migrant count in the Rangareddy district next only to that of Bengaluru and Pune. Of all migrants moving for education, 13% are in Maharashtra. Andhra Pradesh, Tamil Nadu and Karnataka are the others with a share of such migrants above 10%.
Which age groups arethe most dominant?
About 81% of migrants who moved for education were in the 10-29 age group: 25% were between 10 and 14 years; 33% were aged 15-19. Another 18% were in the 20-24 age bracket. Much of the Andhra movement is happening in the 10-19 years band. But it has a low share of such migrants staying on for 10 years or more. This points to poor education facilities in home districts. It also indicates that the districts they moved to are unable to absorb them in the workforce, forcing them to move again. Such migrants stay on in many metros.
Do as many womenmigrate as men?
No. For every three males who migrated, only two females did so. Female migration was seen mostly in the age groups before college: 62% of those who migrated did so before the age of 19, against 54% of males. As the age goes up, fewer females migrate for education. Bengaluru and Pune are preferred destinations for migrants of both genders. But Mumbai Suburban, the fourth-most preferred destination for male migrants, figures only at 23rd for females.Howindialives.com is a database and search engine for public data.
Is moving for educationan urban phenomenon?
Not entirely. Of the 62% who migrated for education to urban areas, about half moved from rural areas. Another 31% moved from one rural area to another and 7% went from urban to rural areas.
1
mintprimer
As many as 5.45 million Indians had moved from their district of birth to another district in the pursuit of education, according to Census 2011. This is an increase of 62% over the 2001 figure of 3.36 million. Here’s where they moved to.
In the move for education, many flock to Andhra
Number of people citing education as a reason for migration
Bengaluru and Pune attract the most migrants for education-related reasons, followed by Rangareddy in Telangana. Four districts in Andhra— Sri Potti Sriramulu Nellore, Krishna, Guntur, Visakhapatnam —also figure in the top 10.
Below 1,0001,000-10,00010,000-50,000Above 50,000
Compiled by howindialives.com
Bengaluru137,351
Pune123,162
Rangareddy83,138
Sri Potti Sriramulu Nellore75,341
Krishna72,332Guntur
70,303
Thane69,911
Mumbai Suburban62,108
Kancheepuram60,168
Source: Census 2011
Visakhapatnam59,845
Top draws
QUICK EDIT
In the private sector, a work-from-home culture is gainingpopularity, thanks to the tor-turous daily commutes it savesemployees and the productivitygains it offers employers. Thepublic sector, though, seemsstuck in an old paradigm. AtNTPC Ltd, a power producer,18 senior employees havereportedly been asked to workfrom home to “optimize man-power”. But the employees arefeeling uneasy. Their worry? Itcould distance them from themain work environment andresult in their redundancy.
Their resistance revives adebate over whether the con-cept of working from homeshould be promoted. In cities,people often spend hours toreach their workplaces. Thistime could be better used. Also,real estate is expensive; havingworkers operate from homecould save money. Technologyhas made communication witheach other, or with clients, justas easy as face-to-face meetings.So, why endure the pain oftravel? True, one could feel cutoff, or suffer distractions athome, but the positives out-weigh the negatives. Being seenat work may influence percep-tions of one’s diligence, but jobperformance is not a function ofhours spent in office.
Fear of
freedom
2
3
4 5
MINT METRICby Bibek Debroy
How does one trace
Identity theft in space?
A hack of a crime,
In our lifetime,
This first may become commonplace.
JACK MACO-FOUNDER OF ALIBABA GROUP
For the next 10-20 years, every human being, country, should focus on reforming the education system, making sure our kids can find a job—a job that only requires three days a week, four hours a day.
QUOTE OF THE DAY
AP
PORTLAND
Jet-car speed racer Jessi Combs,known by fans as the “fastest womanon four wheels”, has died in a crash inOregon’s Alvord Desert while trying
to break a speed record, local authoritiessaid on Wednesday.
Combs, 39, died Tuesday afternoonwhile racing in a dry lake bed in a desertin remote Harney County, sheriff’s Lt.Brian Needham said in a statement. Thecause is under investigation.
Terry Madden, Combs’ teammate onthe North American Eagle racing team,said in an Instagram post on Wednesdaythat he was heartbroken and added a
video collage of photos and video clips ofCombs with various team members.
Combs was widely known in the nichesport of jet-car racing and was attempt-ing to break the Women’s Land SpeedRecord of 823 kph set in 1976 by KittyO’Neil when she died. Jet cars are racecars propelled by jet engines.
She currently held the record as thefastest woman on four wheels—O’Neilpiloted a three-wheeled vehicle—for a640.5 kph performance in 2013 and haddriven even faster in follow-up runs, butmechanical problems prevented thosefrom making the record books.
‘Fastest woman on four-wheels’ dies in car crash
Jessi Combs was attempting to break
the Women’s Land Speed Record of
823 kph set in 1976 by Kitty O’Neil.
MINT CURATORm
REUTERS
PARAS JAIN/MINT
BY VAIDIK DALAL
PEANUTS by Charles M. Schulz
Why France’s antitrust cop is wary of Apple Pay
Gaspard Sebag & Aoife White
PARIS/BRUSSELS
France’s Isabelle de Silva may be about to becomeEurope’s most feared antitrust regulator as MargretheVestager’s term as European Union (EU) competition
commissioner winds down.De Silva, 49, was picked to head France’s antitrust arm
in 2016 and immediately grabbed headlines fining firmsowned by billionaire Patrick Drahi. Since then her achieve-ments have been somewhat overshadowed by those of herEU counterpart who doled out massive penalties to thelikes of Google.That may be changing as the EU readjustsamid a top jobs reshuffle in the coming weeks and as deSilva enters a more assertive phase of her five-year term aspresident of the Autorite de la Concurrence.
In an interview at her Paris office last month, de Silvasaid she’s set her sights on Apple Inc. and Facebook Inc.’sforays into online payments. She’s also wary of the powerAmazon.com Inc. and Alphabet Inc.’s Google could gain viatheir digital assistants.
But she also said that merger watchdogs need morepower to vet so-called killer acquisitions,where big companies snap up fledglingfirms and their ideas.
“There can be major competition con-cerns the instant new actors gain strongpositions in the payment sector while alsohaving strongholds elsewhere,” de Silvasaid, referring to products such as ApplePay. “It could amount to existing domi-nant market power being strongly enhanced.”
She’s made the issue a priority for the next year and a halfand is weighing a study focusing on fintech and paymentsystems.
Born in New York and a graduate of France’s EcoleNationale d’Administration, de Silva spent several yearsworking at the country’s top administrative court and forvarious ministries before getting a break as antitrust chief.Her soft style contrasts with Vestager’s panache and whilethe Dane was levying record fines or ordering Apple torepay billions of euros in back taxes at the EU’s executivearm, de Silva’s two largest penalty decisions amount to lessthan half a billion euros.
Still, she has several investigations on the go. Recentantitrust complaints issued to pharma giants Novartis AGand Roche Holding AG suggest possible upcoming fines.
De Silva also says her team is planning to conclude thisyear or early next year “very active” investigations intoonline advertising, which could also have a potentialimpact on Silicon Valley tech giants. “Online advertisingis crucial for us since it’s about the use of data, because allthe value is based on user data,” she said. “It’s a duopoly”
with Google and Facebook grabbing 80-90% market sharein some sectors. Their power requires they “pay attentionto the way they treat business partners and the ecosystemaround them.”
Europe’s national regulators often move faster than theEU against big tech; with France prone to ordering behav-iour changes before the end of a probe via interim meas-ures as it did earlier this year when it told Google to clarifysome ads rules.
Amazon’s Echo, animated by the voice assistant Alexa,and Google’s Home, with its Assistant, are also develop-ments where de Silva says competition regulators need tobe vigilant—even though there are no immediate concerns.
“There’s one big question: will it become the entry pointfor purchases?” she wonders.
Officials at the tech companies all declined to comment.On M&A enforcement, de Silva warns that, despite spec-
tacular growth, many coveted startups in the tech, healthand media industry don’t have high enough sales to triggerantitrust scrutiny when bigger companies seek to buythem. Her 18-strong merger-control team has been puttingtogether a list of cases that could be of interest if lawmakers
extend their powers to enable them tohave a say over possible killer acquisi-tions. “What remains to be seen iswhether the legislative framework will beput in place at a European or nationallevel,” she said in the Paris interview.
In the past two years, the Autorite de laConcurrence powerlessly watched twoFrench unicorns—car-sharing app Bla-
blacar and doctor-appointment booking app Doctolib—acquire rivals and Boiron SA, the world’s leading homeopa-thy firm, buy Laboratoire Ferrier.
There may have been no competition concerns but that’sbeside the point, according to de Silva: regulators weresimply unable to check. She also cited Facebook’s $1 billionpurchase of Instagram seven years ago as food for thought,pointing to the need for antitrust regulators to take intoaccount potential competition as well when assessingmergers.
“It’s a concrete example where a company could haverisen to Facebook’s level or at least created a rival socialnetwork,” de Silva said.
“Was it a mistake to authorize that Instagram transac-tion? These are complex topics because there are thosewho say that Instagram wouldn’t be where it is now if Face-book hadn’t made investments.”
Still, she concedes that the situation isn’t clear cut asmany startups’ founders are keener to exit in billion-dollardeals rather than trying to take on the likes of Facebook orGoogle. BLOOMBERG
Merger watchdogs need more power to
vet so-called killer acquisitions, says Isabelle de Silva
The earnings realized from the sale of the top 10 most expensive works soldbetween 2014 and 2018, according to anArtery India report. In terms of turnover
by individual year, the top year was 2015 with ₹182.8 crore. This amount was a whisker above the ₹182.4 crore turnover recorded in 2018—a strong achievement in an otherwise sluggish, post-demonetization and GST-impacted economy—indicative of the confidence in the top-tier segment of the art market. The most expensive work was an untitled oil-on-canvas by V.S. Gaitonde, which Christie’s sold for ₹29.3 crore in December 2015. S.H. Raza’s ‘Tapovan’, an acrylic-on-canvas that sold for ₹29.02 crore in March 2018, came a close second. There were seven artists who featured in the top 10 list—six of them being modernists, and just one pre-modernist. Among the seven, Tyeb Mehta took the top position— based on work count—with four entries and a personal turnover of ₹89.8 crore. V.S. Gaitonde came in second, with three of his works realizing ₹75.3 , followed by S.H. Raza, F.N. Souza and Raja Ravi Varma, with one work each.
—Arvind Vijaymohan, CEO, Artery India, an art intelligence and sales advisory firm
ART BY NUMBERSA weekly analysis of the Indian and global art market
Modernists’ works dominate the most-expensive list in 2014-18
₹244.4cr
FLIP SIDEBLOOMBERG
V.S. Gaitonde’s untitled oil-on-canvas.
Widest India bond-swap spread in seven years lures Goldman Sachs
bit.ly/2HwnwB
q
Shayan Ghosh
& Gopika Gopakumar
MUMBAI
Reviving consump-tion demand andprivate investmentremains the top pri-ority in the current
fiscal, the Reserve Bank ofIndia (RBI) said on Thursday,signalling the possibility of atleast one more interest rate cutthis year.
To revive growth, governorShaktikanta Das asked banksto pass on past rate cuts to bor-rowers at a faster pace by link-ing lending rates to externalbenchmarks such as repo rate.
Das’s renewed pitch foraddressing the causes of theslowdown in Asia’s third-larg-est economy comes amid salesof passenger vehicles droppingto a near two-decade low inJuly and news of mass layoffsacross several industries. Thecentral bank has already
slashed rates by 110 basispoints this year to spur growth.
The recent decelerationcould be in the nature of a softpatch mutating into a cyclicaldownswing, rather than a deepstructural slowdown, RBI saidin its annual report released onThursday. Nonetheless, there
are still structural issues inland, labour, agricultural mar-keting and the like that need tobe addressed, it added.
“The diagnosis is difficult;these conditions are hard todisentangle cleanly, at least inthe formative state,” the cen-tral bank said.
RBI, however, cautionedthat a broad-based cyclicaldownturn is underway in sev-eral sectors—manufacturing,trade, hotels, transport, com-munication and broadcasting,construction, and agriculture.
TURN TO PAGE 9
RBI: Revival of demand, investment top priorityBroad-based cyclical downturn underway in several sectors: annual report
THE ART OF BATTING THE ART OF BATTING WITH THE TAILWITH THE TAIL uuP2P2
PLAINFACTS
HOW JAIR BOLSONARO IS HOW JAIR BOLSONARO IS KILLING THE AMAZONKILLING THE AMAZON uuP10P10
T H E I R V I E WK A U S H I K B A S U
See Page 15
L E A R N I N G 4 . 0K A P I L V I S W A N A T H A N
See Page 14
F A R M T R U T H SH I M A N S H U
See Page 14
The decision will enable foreign brokerages to buy stakes in Indian companies, which will bring global best practices into the country and deepen the market in terms of new products and technology. See Page 16
Government allows 100% FDI in insurance intermediaries
Lenders to Air India are set for a major relief as Air India Assets Holding is expected to repay ₹22,000 crore of its debt next month, amove that will also sharply lower the interest obligations of the carrier. See Page 7
In relief for lenders, Air India unit to pay ₹22,000 crore dues in Sep
DON’T MISS
Foreign institutional investors are selling Indian shares on concerns ranging from taxation to macro headwinds in the country. August saw the biggest sell-off in 10 months since October 2018. See Page 9
FIIs sell shares worth $2.19 bn in Aug in biggest sell-off since Oct
Credit rating agency Icra Ltd said on Thursday that “after taking into account the best interests of the company” its board has decided to terminate the employment of CEO Naresh Takkar. See Page 6
Icra chief Naresh Takkar, under Sebi probe for misconduct, sacked
m MINT GRAPHITI
CENTRAL BANK BALANCERBI's total income rose to �1.93 trillion in 2018-19. Since it did not set aside any money as provisions (contingency fund and asset development fund), its expenditure fell, leading to a higher profit.
Source: RBI
(in ₹ crore)
2014-15 2018-19
Total expenditure
10,000
15,000
20,000
25,000
30,000
35,000
13,356
17,045
Income
0
50,000
1,00,000
1,50,000
2,00,000
2014-15 2018-19
79,256
1,93,036
2014-15 2018-19
Profit
Surplus transferred to govt
0
40,000
80,000
1,20,000
1,60,000
2,00,000
SARVESH KUMAR SHARMA/MINT
Elon Musk and Jack Ma, two of world’s leading tech luminaries,
sparred in a rare public debate on Thursday with thoughts on AI
—Ma is betting humans will prevail over machines, while Musk
fears doomsday is coming—Mars exploration and aliens. Page 5
COMPLETE COVERAGE: See Page 9
Kalpana Pathak
MUMBAI
The board of CG Powerand Industrial SolutionsLtd, which is in the
midst of restating its earn-ings after discoveringsuspected fraudulenttransactions, sacked itschairman Gautam Tha-par on Thursday.
Thapar has, however,denied allegations that he mis-appropriated funds of thepower equipment maker,which is part of AvanthaGroup. In a statement, Thapar
said he has repaid ₹4,000crore to various lenders since2015 and allegations of fraudwere unfounded.
“I must say that no fundslent by banks nor any funds ofCG have been misappropri-
ated. The money has beenapplied with due boardapproval. All inter-cor-porate transactions have
been fully authorized bythe board. No promoter or
promoter entity has derivedany undue benefit,” Thaparsaid in a statement.
On 20 August, CG Power’s
TURN TO PAGE 5
CG Power, hit by fraud,fires chairman Thapar
MA vs MUSK ON FUTURE OF AIREUTERS
LIVEMINT.COM
NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 13 NO. 208 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 22 PAGES
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another sub-text to his prolificaccumulation. Smith alreadyhas more runs with the tail thanTendulkar.
Among these 10 batsmen,Smith has the highest averagewhile batting with the tail of 34runs per innings. In terms ofaverages, Shivnarine Chander-paul is at the bottom of this listwith an average of 19. At the
same time, Chanderpaul leadsthis list in terms of the highestpercentage of outings thatresulted in batting with the tail.In 78% of the 280 innings inwhich he batted, Chanderpaulstretched his batting stint to thetail. Steve Waugh also scoreshigh on this count, batting withthe tail in 64% of his 260innings (See chart 2).
Over the history of Testcricket, there’s not much tochoose among teams at anoverall level (wickets 7 to 10).Most teams average 20 runsper wicket.
However, there are differen-ces in where they are gettingthis return from and wherethey are not. India, for example,leads in averages for the sev-
enth wicket. Similarly, Austra-lia is a cut above at wickets 9and 10 (See chart 3).
Over time, the run contribu-tion of the lower order hasincreased for most teams.There was a time when it wasacceptable for the bowler tojust take wickets, but now theyare also expected to stick in andsupport the top order or make
2000 and 2010; and SouthAfrica in the 1990s (See chart 4).More is being expected of thelower order. More is beingdelivered by the lower order.The Stokes and Leach partner-ship was another example, aspecial one, of that.
howindialives.com is a data-base and search engine for publicdata
THE ART OF BATTING WITH THE TAILPart of the story of the summer of Ben Stokes has been about batting with the tail. Test cricket has seen some fine and diverse exponents of this skilful practice
AHMED RAZA KHAN/MINT
contributions of their own.Thus, in the past four decades,there have been periods whenteams have seen that lower-or-der average of 20 increase to23-24.
Notably, in the 1980s, whenIndia’s lower order duo com-prised Kapil Dev and Syed Kir-mani; Australia, New Zealandand South Africa between
m MINT GRAPHITIChart 1
Only Steve Waugh and Shiv Chanderpaul have scored more than 4,000 runs with the lower order
Chart2
Shiv Chanderpaul has batted with the tail the most, while Steve Smith has delivered the best return
Chart 3
India has been strong in the seventh-wicket slot, Australia in wickets 9 and 10
Partnership runs for wickets 7 to 10Innings where they batted with the tail (in %)
Average partnership with the tail (runs per innings)
Away share in partnerships with the tail (in %)
Average runs scored by wickets 7 to 10 (runs per wicket)Average runs scored per innings
64
78
49
51
43
43
42
56
22
58
25
19
25
29
34
28
28
34
28
29
Source: ESPNCricinfo.com
Note: Data for each team is for all its Test matches NA: Not available as the team had either not started playing Text cricket by then (Bangladesh, Sri Lanka, Zimbabwe) or was banned from international cricket (South Africa)
Ben Stokes
Players arranged in decreasing order of partnership runs for wickets 7 to 10
Wicket 7 Wicket 8 Wicket 9 Wicket 10
Australia
Bangladesh
England
India
New Zealand
Pakistan
South Africa
Sri Lanka
West Indies
Zimbabwe
25
21
25
30
26
25
27
25
26
27
21
16
21
22
22
20
25
20
19
20
18
16
16
17
17
18
17
16
15
17
15
11
14
13
13
14
12
12
11
12
Chart 4
Over time, the lower order has come to deliver more for almost every team
Low HighLow High
1950s 1960s 1970s 1980s 1990s 2000s 2010s
Australia
Bangladesh
England
India
New Zealand
Pakistan
South Africa
Sri Lanka
West Indies
Zimbabwe
20
NA
17
17
13
17
16
NA
18
NA
17
NA
20
21
17
20
21
NA
20
NA
19
NA
20
19
18
20
NA
NA
19
NA
19
NA
19
24
21
21
NA
16
20
NA
21
24
17
19
20
21
24
18
16
18
23
15
20
21
24
19
23
22
16
21
21
17
22
23
21
17
21
18
20
18
4,102
4,032
3,335
3,286
2,519
2,292
2,291
2,270
2,039
2,003
63
52
52
61
38
45
51
49
92
42
Steve Waugh (Australia)
Shivnarine Chanderpaul (West Indies)
Allan Border (Australia)
VVS Laxman (India)
Brendon McCullum (New Zealand)
AB de Villiers (South Africa)
Inzamam-ul-Haq (Pakistan)
Steve Smith (Australia)
Sachin Tendulkar (India)
Ravi Shastri (India)
PLAINFACTS
MARKETS DASHBOARD
An increase in yields reflects a fall in bond prices. Indian data is as of market closure on 29 August. Global data is as of 7.30pm, 29 August.
Source: Bloomberg
% change vs
EQUITYMARKETS
DOW JONES (US)
S&P 500 (US)
NIKKEI (Japan)
SHANGHAI COMPOSITE (China)
HANG SENG (HK)
IBOVESPA (Brazil)
FTSE/JSE TOP 40(South Africa)
JCI (Indonesia)
SENSEX
NIFTY 50
BANK NIFTY
37,069
10,948
27,305
26,310
2,923
20,461
2,891
25,704
98,838
48,728
6,289
▲ +1.1
▲ +0.7
▼ -0.9
▲ +0.2
▼ -1.9
▼ -0.7
▲ +0.4
▲ +0.3
▲ +1.0
▲ +0.7
▼ -10.4
▲ +4.8
▼ -8.9
▲ +27.7
▼ -8.6
▲ +4.2
▼ -2.4
▼ -2.3
▼ -5.3
▼ -1.5
▼ -7.9
▼ -3.7
-5.1
▼ -1.1
▼ -0.9
▼ -1.3
▼ -5.3
▼ -4.3
▼ -6.4
▼ -3.1
INDIAN STOCKMARKETS
GLOBAL STOCKINDICES
Index
Latest(indexlevel)
Lastweek
average
Amonth
ago
Ayear ago
Absolute change in yields (bps) vs
FIXED INCOMEMARKETS
India 10-year GSEC
India 10-year AAA-corp
Overnight call rate
1-month Mibor
6.55
7.68
5.35
5.82
▲ -2
▲ -4
▲ -1
▲ -1
▼ 15
▼ 0
▲ -29
▲ -29
▲ -137
▲ -102
▲ -97
▲ -117
INDIAN FIXEDINCOME MARKET
3-month $ Libor
3-month US treasury yield
2.12
1.98
▲ -3
▼ +4
▲ -15
▲ -9
▲ -20
▲ -12
GLOBAL SHORT-TERMINTEREST RATES
Bond yield or short-terminterest rate
Latest(%)
Lastweek
average
Amonth
ago
Ayear ago
% change vs
COMMODITIESMARKETS
Brent crude ($/barrel)
WTI ($/barrel)
Copper (3-month future) ($/tonne)
MCX gold spot (�/10 grams)
60.6
56.4
5,690.0
38,743
▲ +1.3
▲ +1.6
▼ -0.3
▲ +3.1
MAJOR COMMODITYPRICES
Commodity
Latest(indexlevel)
Lastweek
average
Amonth
ago
Ayear ago
Red denotes depreciation in the mentioned currency, green denotes appreciation
% change vs
FOREXMARKETS
Euro ($/€)
Japanese Yen(¥/$)
British Pound($/£)
Indian Rupee (per $)
Chinese Yuan
Brazilian Real
Russian Ruble
Indonesian Rupiah
71.78
7.15
4.17
66.69
14,238
1.11
106.4
1.22
▼ -0.3
▼ +0.1
▲ +0.1
▼ -0.4
▲ -1.8
▲ +0.3
▼ -5.2
▲ -4.3
▼ -5.8
▼ +0.2
▼ +1.1
▼ +2.4
▼ +0.8
▲ -0.2
▼ +4.2
▼ +3.7
▼ +9.5
▼ +4.6
▼ +1.4
▼ +1.8
▼ +4.7
▼ +1.5
▲ -1.6
▲ -2.9
EMERGING MARKETCURRENCIES vs the $
OTHER MAJORCURRENCY PAIRS
Dollar index 98.4 ▲ +0.3 ▲ +0.1 ▲ +3.8
THE DOLLAR INDEX
Currency Latest
Lastweek
average
Amonth
ago
Ayear ago
m
Thomson Reuters/CoreCommodity CRB Index
S&P GSCI
Baltic Dry
172
400
2,267
▲ +1.1
▲ +0.6
▲ +8.2
▼ -2.7
▼ -3.9
▲ +20.9
▼ -10.6
▼ -14.2
▲ +37.6
COMMODITY INDICES
▼ -4.6
▼ -0.7
▼ -4.3
▲ +11.6
▼ -21.2
▼ -18.7
▼ -6.3
▲ +28.9
▲ +0.2
▲ +0.3
▼ -1.0
ing for more and more wealth.The authors suggest that
this unrelenting desire couldexplain why many rich peoplepursue wealth even by unethi-cal means.
The findings of the studycould throw light on the wid-ening inequality in societiesacross the world. The authorssuggest that inequality should
be looked at through the lensof the growing desire forgreater wealth among the rich.
Also read: The More YouHave, the More You Want?Higher Social Class Predicts aGreater Desire for Wealth andStatus (bit.ly/2ZsGqU1)
Snap Fact features new andinteresting reads from theworld of research.
216What is it? The number of seats that Italy’s anti-establishment Five Star Movement (M5S) party has in the Parliament’s chamber of deputies.Why is it important? Two weeks ago, its partner—the far-right League party (with 125 seats) led by interior minister Matteo Salvini—exited the coalition, expecting a snap election. However, M5S made a deal with the centre-left Democratic Party (with 111 seats) to form a new coalition government. Tell me more: The unexpected deal between the rivals is a setback for Salvini, who was hoping to win power in a snap election. Italy’s next general election is scheduled to be held before 28 May 2023.
Data and text compiled by Howindialives howindialives.com is a search engine for public data
NEWS IN NUMBERSm
71What is it? The number of matches Novak Djokovic has won throughout his career in the US Open.Why is it important? He has equalled the record of Pete Sampras and stands fifth in the list of players with most match wins in the tournament. The 32-year-old’s 71st win came even as he was battling a severe shoulder injury. Tell me more: Jimmy Connors (98 wins), Roger Federer (87) and Andre Agassi (79) are ahead of Djokovic in the list.
AFP
CORRECTIONS AND CLARIFICATIONS
Mint welcomes comments, suggestions or complaints about errors.
Readers can alert the newsroom to any errors in the paper by emailing us, with your full name and address to [email protected].
It is our policy to promptlyrespond to all complaints. Readers dissatisfied with the response or concerned about Mint’s journalistic integrity may write directly to the editor by sending an email to [email protected]
Mint’s journalistic Code ofConduct that governs our newsroom is available at www.livemint.com
CORRECTIONS AND CLARIFICATIONS
The 29 August story on Page 3, “JM Financial PE buys stake in Innovcare” incorrectly stated that parent JM Financial had invested ₹45 crore in its private equity business. It is the private equity arm of JM Financial that has invested ₹45 crore in nutraceutical firm Innovcare Lifesciences Pvt. Ltd from its second fund. The error is regretted.
Mint welcomes comments, suggestions or complaints about errors.
Readers can alert the newsroom to any errors in the paper by emailing us, with your full name and address to [email protected].
howindialives.com
There was history onone side, and BenStokes and JackLeach on the other.History said the
average tenth-wicket partner-ship for England in Test cricketwas an anaemic 14 runs. Historysaid on 77 of the 123 times thatEngland was dismissed whilechasing a target, the last-wicketpair had failed to even reach 10runs. Stokes and Leach wrotetheir own history, adding anundefeated 76 runs in lastweek’s humdinger in Heading-ley.
In a summer that hasbelonged to himlike no othercricketer, Stokesalso burnished hiscredentials of bat-ting with the tail.Coming in usuallyat the fall of thethird or fourthwicket, Stokes’approach was totake his time and take matchesdeep. Stokes, 28, is still early inhis career, and he will havemany outings batting with thebowlers: wickets 7 to 10. It’s anart that few among the toporder have mastered.
Ironically, two of the fore-most exponents of batting withthe tail were from the side thatStokes was putting in the shadethat afternoon in Headingley:Australia. In the history of thegame, no top-order batsman(coming in at number 6 orbefore) has scored as many runswith the tail (batsmen comingin at 7 to 10) as Steve Waugh.
The doughty Waugh, whobatted at three or four down formuch of his Test career, added
4,102 runs for wickets 7 to 10.Close behind him is anotherprolific, but low-profile, bats-man, Shivnarine Chanderpaulof the West Indies. He is fol-lowed by Allan Border, who isthe only one in the list of top 10batsmen batting with the tailwho stopped playing Testcricket before the turn of thiscentury ( See chart 1).
There are three Indians inthat list, led by V.V.S. Laxman.The other two are Sachin Ten-dulkar and Ravi Shastri, whosepresence here reflects a distinctcharacteristic about their bat-ting craft and the circumstan-ces surrounding it. For Shastri,it reflected his ability to put agreat price to his wicket.
For Tendulkar,who batted atnumber four fornearly his entirecareer, that char-acteristic is lastman standing. Asmany as 85% ofT e n d u l k a r ’ sinnings and 92%of runs with the
tail came outside India, whichis also the highest percentagein away runs among this list of10.
Part of this showcases hiscolossal appetite for runs, butpart of this also reflects India’sfrailties overseas in the top halfof Tendulkar’s career. In 23 ofthe 62 away innings whereTendulkar batted with the tail,he started doing so before Indiahad crossed 200 runs.
In this list of 10, Tendulkar isone of the two players who pre-dominantly came in at twodown or before—a reflection ofinnings longevity in the contextof batting with the lower order.The other is Steve Smith, andbatting with the lower order is
In the history of the game, no
top-order batsman has
scored as many runs with the tail as Steve Waugh
Sneha Alexander
MUMBAI
Climbing the social lad-der is a natural cravingfor the poor, but what
about those already near thetop of the ladder? Newresearch suggests that the richhave an even greater desirethan the poor to continueclimbing up theladder.
To show this,researchers Zhe-chen Wang and oth-ers from the University ofQueensland conducted sur-veys and experiments in theUS and used data from theWorld Values Survey—a large-scale global survey covering150,000 participants from 78countries—to examine therelationship between socialclass and the desire for wealth
and status. They find thatacross countries, it is the upperclass who yearn for morewealth and status, indicating a“have more, want more” phe-nomenon.
According to the authors,the rich want more becausetheir wealth and status areessentially linked to theiridentity.
For the upper class, theirwealth and statusare how they differ-entiate themselvesfrom the rest of soci-ety and they are
deeply attached to their worthin society.
Economic loss and the sub-sequent diminished status arenot mere losses for them, butalso a threat to their identity.Thus, enhancing this wealthconsolidates their positionamong the elites and creates aself-reinforcing cycle of desir-
Why the rich keep wanting more wealth
The upper class display a greater desire for wealth and hold on to
these as essential attributes of their identities, shows a study.SNAP FACT
m
AFP
DEALS FRIDAY, 30 AUGUST 2019NEW DELHI 03
CEO, LetsVenture Technolo-gies Pvt. Ltd, was also confi-dent of the new partnershipwith T-Hub, and said her com-pany was working with 6,500
India, in collaboration withthe platform,” said Kartik Sri-vatsa, managing partner,
Adani Green to buy Essel’s solar assets
Essel will sell 205MW of assets at an enterprise value of ₹1,300 cr
Chargebee raises $14 mn led by Steadview Capital
bit.ly/2UcUXOw
T-Hub chief executive Ravi
Narayan. RAMESH PATHANIA/MINT
Pernod Ricard CEO
Alexandre Ricard. BLOOMBERG
Pernod unveils up to €1 bn share buyback
Pernod reported profit fromrecurring operations rose 8.7%to €2.58 billion for the fiscalyear ended 30 June. That wasahead of its own forecast of 8%profit growth and an accelera-tion from 6.3% growth in the2017-18 fiscal year.
The firm forecast underly-ing profit growth from recur-ring operations of 5-7% for theyear ending 30 June 2020.
Pernod shares rose around3% to €171.55, asanalysts wel-comed the com-pany’s latest set offigures and sharebuyback, in spiteo f P e r n o d ’ sslightly cautiousoutlook. “We sus-pect manage-ment are being
prudent, rather than this beinga signal of weaker underlyingtrends. In particular, we notethat guidance for FY19 alsostarted at between 5%-7%,”wrote brokerage Bernstein.
In February, Pernod vowedto lift its margins and share-holder returns under a three-year strategic plan that Elliotthas described as a first smallstep. Elliot representativessaid they had no immediatecomments. REUTERS
Dominique Vidalon
PARIS
French spirits maker Per-nod Ricard, which isbeing targeted by activist
investor Elliott, unveiled ashare buyback programmeand new investments in Chinaand the US as it posted profitgrowth that beat forecasts.
Pernod, the world’s second-biggest spirits group behindDiageo, handed investors a32% dividend hike andunveiled plans to buy back upto €1 billion ($1.1 billion) inshares, sending its shares up3% to record highs. It alsoappointed two new independ-ent board members.
In the US—its largest marketwhere it now makes 18% ofsales—Pernod strengthenedits bourbon whisky portfoliowith the $223 million acquisi-tion of Castle Brands.
Pernod Ricard is underpressure from US hedge fundElliott, which has a 2.5% stake,to improve profit margins andcorporate gov-ernance. For theyear ahead, Per-nod Ricard strucka cautious note,citing a “particu-larly uncertainenvironment”.
It predicted a“soft” first quarterdue to unfavoura-ble comparisons in Asia, but italso forecast a dynamic start inthe US after a flat performanceso far this year.
Speaking to Reuters, financechief Helene de Tissot citedfears of a no-deal Brexit, andtrade disputes between Chinaand the US and US threats oftariffs on Europe as negativefactors. “This could have animpact on us and we areclosely monitoring the situa-tion,” she said.
Pernod also announced new investments in
China and the US as it posted profit growth that beat
forecasts
bring in more investors nowwith T-Angel,” Narayan said.
In a presentation, Narayanshowed that only 70 angelinvestors have come to Telan-gana over the last three years.“We are looking to improvestartups,” he said.
Jayesh Ranjan, principalsecretary (IT), Telangana, saidthe decision to launch T-Angelwas taken as there was “receiv-ing mechanism” in the statenow (referring to T-Hub).“Many can question why wedid not launch this three yearsago. But you need a receivingmechanism before you deliversomething like this,” he added.
investors from 50 countries.“We get a lot of requests (fortie-ups), but we don’t typicallyengage as we want to makesure of the quality,” she saidduring the launch of T-Angel.
Founded in 2013 by SanjayJha and Mohan, LetsVenturelaunched its own initiativeLetsgrow last year to leverageits existing network of angelinvestors and industry expertsto mentor early-age startupswith its new programme.
“Hyderabad was about 10years behind, in comparisonwith Bengaluru, but we havecaught up a lot since T-Hubwas set up. We are looking to
Narayan acknowledged thatHyderabad lagged in terms ofangel funding for startupswhen compared with cities
such as Benga-luru and NewDelhi, but exudedconfidence thatthe programmewill accelerategrowth in Telan-gana. The chosenstartups will gothrough regularinterventions and
receive dedicated mentoringto build a strong investmentcase to raise capital.
Shanti Mohan, founder and
in a series of funding focusedprogrammes by T-Hub, andabout 30 startups with lead-ing-edge solutions in health-care, real estate,entertainment,sports, educationand finance willbe shortlisted.T-Hub chiefexecutive officer(CEO) Ravi Nar-ayan said the firstbatch of chosenstartups will com-mence on 20 October. “We areopen for receiving applica-tions from today itself,” he saidduring the launch.
Yunus Y. Lasania
HYDERABAD
Hy d e r a b a d - b a s e dstartup incubatorT-Hub on Thursday
announced the launch of itsfunding programme T-Angel,through which it will helpstartups raise capital. Thethree-month investmentacceleration programme is ajoint venture with the Telan-gana state government andwill be executed by T-Hub andonline investment platformLetsVenture.
The programme is the first
T-Hub launches angel funding programme for startups in Telangana
T-Angel is a joint venture with
the Telangana government and will be executed
by T-Hub and LetsVenture
Essel Group chairman Subhash Chandra. RAMESH PATHANIA/MINT
Tanya Thomas
MUMBAI
Essel Group will sell 205megawatt (MW) of its opera-tional solar energy assets toAdani Green Energy Ltd atan enterprise value of
₹1,300 crore, the two companiessaid.
An Essel Group statement said theassets are in Punjab, Karnataka andUttar Pradesh and have long-termpower purchase agreements (PPAs)with various state-owned power dis-tribution companies (discoms).
The deal is expected to close byend September, when SubhashChandra‘s Essel Group must repayabout ₹7,000 crore to creditors asagreed earlier this year. This is thesecond asset sale by Essel, after arecent stake sale in its entertainmentbusiness.
Mint first reported in June thatEssel was in talks to sell part of itssolar portfolio to Adani GreenEnergy. Out of its 685MW solar port-folio, about 310MW is operational,while the rest is under construction.Essel said that aftert h e s a l e o f205MW to Adani, it is now working tosell the rest 480 MWas well. All the solarprojects were wonunder the NationalSolar Mission andstate government auctions.
This is the first acquisition of oper-ating assets by Adani Green Energy,the Gautam Adani-led renewableenergy company said in a separatestatement. It added that the portfolioit is acquiring is relatively young withaverage remaining PPA life ofapproximately 22 years.
“Our asset divestment process iswell within the purview of the agreedtimelines with our esteemed lenders.The sale of the group’s solar assets toAdani Green Energy Ltd (AGEL) isyet another positive step taken in thisdirection. We have maintained aconstant process of identifying theright potential partner for the sale ofour precious infra assets and we are
extremely glad to sign the agreementwith AGEL. The group remainsfocused towards its commitmentmade to its lenders and is confidentto complete the overall repaymentprocess,” Essar said.
Jayant Parimal, CEO of AdaniGreen Energy, said in a separatestatement, “The acquisition of
205MW of operating solar assetsstrengthens Adani Green Energy’sposition as one of India’s premierrenewable power producers, with atotal portfolio of about 5.5GW, ofwhich 2.5GW is operational, and theremaining is to be operationalizedover the next two years.”
Promoters of Essel Group havedebt of ₹11,000 crore. Essel Group
companies togetherowe another ₹11,400crore separately.
To repay this, thepromoters recentlyagreed to sell an 11%stake in Zee Enter-tainment EnterprisesLtd, the group’s flag-
ship media and entertainment firm,for ₹4,224 crore to US-based InvescoOppenheimer Developing MarketsFund.
Last October, Essel Infra sold twooperating power transmission assetsto Sekura Energy Ltd, backed byEdelweiss Infrastructure Yield Plusfund.
DEAL MAY CLOSE BY SEPTEMBER
ESSEL Group’s solar assets are in Punjab, Karnataka and UP, and have long-term PPAs with discoms
OUT of Essel’s solar portfolio of 685MW, about 310MW is operational, rest is under construction
THE deal is expected to close by end Sep, when Essel Group must repay about ₹7,000 cr to creditors
South Asia is one amongthe top three regions whereimpact investment commit-ments are expected to witnessa steep rise, said a report,‘Social Impact Investing inIndia’, by Nishith Desai Asso-ciates, released last year.
According to the report,India needs to infuse the mar-ket with 100 million new non-agrarian jobs over the next10-15 years to accommodate agrowing population, which iseducated and unemployed.
Social impact investors areexpected to target livelihood,education and health servicesas key areas of investmentinterest.
much as a decade and expectsinternal rate of returns (IRR)
of 22%, he added.Under the alter-
native investmentfund (AIF) regula-tions, a social ven-ture fund is definedas “an alternativeinvestment fund,which invests pri-marily in securitiesor units of socialventures, and whichsatisfies social per-formance normslaid down by the
fund, and whose investorsmay agree to receiverestricted or muted returns”.
will invest a highly technolo-gy-enabled business likemedical devicesd i s t r i b u t i o ncompany. Wethink all thesecompanies areplaying in thesame ecosystem,and there isvalue in bringinga bunch of themtogether,” saidmanaging part-ner Kartik Sri-vatsa.
L i k e m o s timpact investment firms,Lightstone Aspada is okay tostay invested in a firm for as
So far, Aspada has investedacross four themes, includinghealthcare and education,clean energy and mobility,food and agriculture, andconsumer value chains—essential digital goods andfinancial services. The focuswill remain the same, goingforward.
It has, so far, exited fiveinvestments.
“Unlike a venture capital(VC) or private equity (PE)player, we will invest in acombination of high technol-ogy assets, and a combinationof high cash flow businesses.So, we will invest in a hospitalchain. At the same time, we
Lightstone Aspada. Srivatsa also acts as the
fund adviser for the SongFund through Aspada CapitalAdvisors.
Srivatsa said while theyhave not finalized the detailsof the next fund, it could beupwards of $250 million.
Aspada’s origins in impactinvesting go back to SongFund, which was set up in2009 by the Soros EconomicDevelopment Fund, OmidyarNetwork and Google. On theback of Song, Aspada Invest-ment Co. was launched in2013 with one shareholder,the Soros Economic Develop-ment Fund.
Aspada from the Soros Eco-nomic Development Fund,for an undisclosed amount, ina bid to create LGT Light-stone as a global impactinvestment platform.
Aspada has now beenrechristened LightstoneAspada.
“We are looking forward toinvesting $4-40 million; weare investing out of the bal-ance sheet at this point intime. But over the next coupleof quarters, we will go into themarket, potentially to raise alarge fund. It’s also an oppor-tunity for us to contribute tobuild something global, whilewe retain our identity in
Deepti Chaudhary
BENGALURU
Impact investment fundLightstone Aspada is set toincrease its investment
cheque size from $2-8 millionto $4-40 million per com-pany, as it looks to raise a“large fund”.
Over the last six years,Lightstone Aspada hasinvested nearly $100 millionacross 20 portfolio firms, atop official said.
On 28 August, Swiss inves-tor LGT, a bank and fundmanager with $201 billion ofassets, acquired Lightstone
Impact investor Lightstone Aspada to raise next fund, write bigger cheques
Kartik Srivatsa, managing
partner, Lightstone Aspada.
GROWINGAPPETITE
ASPADA looks to increase investment cheque size from $2-8 mn to $4-40 mn per company
OVER last six years, Aspada has invested nearly $100 million across 20 portfolio companies
DEALS ROUND-UP
TNQ TECHNOLOGIES INVESTS $2 MN IN INGAGE, FORMS JOINT VENTURETNQ Technologies, a publishing technology and services company, has put in $2 million in forming a joint venture with InGage Technologies, an immersive digital engagement firm. The new platform, TNQ InGage, will focus on creating immersive technology solutions for enterprises in healthcare, manufacturing and the construction sector. The Chennai-based firm plans to integrate augmented reality, virtual reality and mixed reality with internet of things and analytics to develop training simulators, field service tools and digital experience centres. “TNQ Technologies’ investment as a long-term strategic partner will help us with growth and scalability. We are already investing in R&D to improve human interaction with virtual objects. Our plan is to develop products and services that will have a meaningful impact on how people train, work and live. We are also looking at expansion in the global market, including the book-publishing world, by leveraging TNQ’s existing capabilities and competencies,” said Vijay Karunakaran, founder and chief executive officer, TNQ InGage.
ADVANTAGE CLUB RAISES $1 MN FROM GROWX VENTURES, OTHERSAdvantage Club, an employee perks and rewards platform, raised $1 million in its pre-Series A investment round led by early-stage technology fund GrowX Ventures. Sprout Venture Partners and existing investor Axilor Ventures, along with a group of angel investors also participated in the round. “We have learnt that
perks and rewards cannot beone-size-fits-all acrosscorporates. We will bedeploying this growth capitalto build deeper insights, andto also become a moreholistic benefit platform foremployees catering to theirwellness, financial andexperiential needs,” saidSourabh Deorah, co-founderand CEO, Advantage Club.Launched in 2016, theGurugram-based companyhelps corporates improve
employee engagement and retention by providing attractive perks, rewards and recognition. It works with over 250 corporate clients, such as Concentrix, EY, DXC and Mphasis, to provide data-driven customized offers from over a 1,000 brands.
PUNJAB RENEWABLE ENERGY RAISES ₹55 CR FROM SHELL, OTHERS Biomass-based energy solutions company Punjab Renewable Energy Systems Pvt. Ltd (PRESPL) closed its Series B round at ₹55 crore, with a follow-on investment from oil and gas firm Shell India. The funding round also saw the participation from private equity firm Neev Fund, which is backed by SBI, and the UK’s Department for International Development. “We are pleased to have the support of a global energy company like Shell in addition to the cohort of our existing investors responsAbility and Neev Fund and see this as a recognition of the business model of PRESPL, which may provide impetus for the bio-energy sector in India and also to PRESPL, in particular, which is focused on the bio-energy spectrum. The investment from Shell will be utilized for business expansion in the bio-energy sector and biomass supply chain management space in India,” said Monish Ahuja, managing director, PRESPL.
COMPILED BY RIDHIMA SAXENA
Vijay Karunakaran, CEO,
TNQ InGage.
Sourabh Deorah, CEO,
Advantage Club.
Monish Ahuja, managing
director, PRESPL.
04 FRIDAY, 30 AUGUST 2019NEW DELHI MARK TO MARKET
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The regulator balanced theorder by allowing Power Grid todelay new transmission capaci-ties to match the renewableenergy installations, said analystsat JM Financial. “Hence, we donot find any material impact onPower Grid. The approved capi-
tha passed away recently.Post-June quarter earnings,
a slew of brokerage firmsexpressed concerns on theRBL Bank’s exposure tostressed corporate accounts.Worried over higher slippagesand consequent provisions,some of them reduced theirearnings estimates for FY20and FY21. In a 27 Augustreport, Emkay Global Finan-cial Services Ltd expected thestock to remain under pres-sure until it recognizes its cor-porate stress pool and returnsto its otherwise high-return-on-assets trajectory.
In short, despite RBL Bank’strack record of robust loangrowth, stable asset qualityand strong return ratios, theabove-mentioned concernsmay weigh on the stock in thenear term.
that this year but how much better isstill an open question.” PBT is shortfor profit before tax.
Going ahead, incremental benefitsfrom the grounding of Jet Airways(India) Ltd could well be limited.IndiGo has been a key beneficiary ofJet Airways’ downfall. It flew 17%more domestic passengers in Julycompared to last year. The airline’sdomestic market share stood at an
Clifford Alvares
Equity markets are subject tomarket risks, but that adagedoes not seem to apply to
stocks of asset management compa-nies (AMCs). While the broadermarket seems to be drifting down-wards, AMC stocks have been hit-ting new 52-week highs in recenttimes.
Much of this optimism stemsfrom the fact that there has been acontinuous flow of funds intomutual fund schemes. A ban onupfront commissions to agents lastOctober by the Securities andExchange Board of India (Sebi), andchanges in total expense ratio, wereexpected to impact the growth ofassets under management. But thathas not happened.
Total assets under management
IndiGo shares suggest worries about turbulence at the top have receded
Pain in RBL Bank stock eases, but regaining lost charm a challenge
HDFC AMC, Reliance Nippon Life stocks are undeterred by Sebi tweaks
Gold prices rise above ₹40,000, silver rates hit new highs
bit.ly/2HxZAxt
SHORT TAKESm
in June 2019 were higher by 9%since October, when the ban cameinto effect. Importantly, total netinflows into equity schemes havesummed up to about ₹63,000 croresince October 2018. One reason issystematic investment plans, whichare considered to besticky.
The ban on com-missions, however,has not dented theperformance of AMCs,but instead, has helpedimprove their operat-ing metrics.
Commissions paidto distributors formeda large expense in the profit and lossaccounts. Additionally, AMCs havebeen successful in passing the cutsin total expense ratio to distributorsto a large extent, which cushionedthe impact at the net level.
This has played out in the first-quarter numbers. AMCs reporteddecent profit growth, despitemuted revenue growth. HDFCAsset Management Co. Ltd’s reve-nues were up 7% in the June quar-ter, while net profit grew 42% over
the year-ago period.Reliance Nippon LifeAsset ManagementLtd’s revenues werelower by 5.3%, whilethe net profit was up13% over the year-agoquarter.
“1QFY20 was a tran-sition quarter formutual funds to lower
fee norms and Reliance AMC (andthe sector) have done well in man-aging it with limited earningsimpact by lower distributors’ com-missions and controlling discre-tionary costs,” said a CLSA India(Pvt.) Ltd note to clients.
While all this is good, AMC stockshave turned pricey lately. A changein the ownership of Reliance Nip-pon AM has seen its stock run upabout 19% in the past month, whileHDFC AMC’s premier position hasseen its stock rise by 11%.
Much of the optimism nowdepends on flows remaining steady.With the markets wobbly, lump-sum investments are likely toremain lumpy. Besides, growth inassets under management thatseems to have stagnated in the lastfew months, should be closelywatched.
AMCs have been successful in passing the cuts in total
expense ratio to distributors to a large extent
Harsha Jethmalani
The RBL Bank Ltd stock,which was beaten downo n W e d n e s d a y ,
recouped some losses onThursday. The stock gainednearly 4% intraday on theNational Stock Exchange(NSE), ending the day’s sessionat ₹319.20, up 1.7%.
The stock was punished onWednesday over speculationof insider trading. However,the bank later clarified thatmarket transactions byemployees were a “routineactivity” with regular exerciseof ESOPs (employee stockownership plans) and sale ofequity shares thereafter.
The Street took some solacefrom this clarification, attract-ing investors’interest at lowerl e v e l s . B u taccording tosome analysts,while some buy-ing may havehappened at thecurrent levels,shares of thebank are unlikelyto regain their lost charm any-time soon.
It should be noted that theRBL Bank stock hit a 52-weekhigh of ₹716.40 on NSE in Maythis year. But its fall from glory
was swift, with the stock tank-ing to a 52-week low of ₹286.10on Wednesday. The fall wor-sened after the managementrecently indicated that its assetquality could be under pres-sure in the coming quarters.
In the June quarter, RBLBank reported a41% jump in netprofit from a yearago, aided by ahealthy 48%growth in coreincome. As thea c c o m p a n y i n gchart shows,although its grossbad loan ratio for
the June quarter was steady,slippages rose. What alsosoured investors’ sentimentwas the lender’s exposure toCoffee Day Enterprises Ltd,whose founder V.G. Siddhar-
Worried over higher slippages and provisions,
FY20-21 earnings estimates have
been cut by brokerage firms
Pallavi Pengonda
Shares of InterGlobe Avia-tion Ltd are not very farfrom their lifetime highs of₹1,716 seen on 28 May.Besides the airline’s stock,
at ₹1,656.25 currently, is nearly 6%above the levels seen before thetroubles between itstwo promoters inten-sified in July.
InterGlobe runsIndiGo, India’s largestairline by marketshare.
Clearly, investorworries about the tur-bulence at the top appear to have sub-sided, at least for now.
In fact, Tuesday’s annual generalmeeting concluded on a good note.“The consensus between promoterson ‘related party transaction’ policyand board composition is sentiment-positive,” wrote Ansuman Deb ofICICI Securities Ltd in a report on
Thursday. Shareholders haveapproved the alteration of the com-pany’s Articles of Association toincrease the board size to 10 from sixearlier.
IndiGo’s operational performancehas remained unaffected by the pro-moter squabbles so far. This is evi-dent from the impressive June quar-ter numbers. One bright spot has
been the better-than-expected yields(measure of pricing) improvement of12.7%.
Having said that, June quarterfinancial performance cannot beexpected to be replicated in the Sep-tember quarter, as the latter is tradi-tionally leaner. The airline has doneits bit to lower expectations.
During its June quarter earningsconference call, Ronojoy Dutta, chiefexecutive officer of IndiGo, said, “Weare witnessing some lower fares in the0-15 day booking window and expectthis to add some pressure to our unitrevenues in the second quarter.”
Nonetheless, crude oil prices havebehaved and that is comforting forthe sector in general. “The fall in avia-
tion turbine fuel pricesin the first 2 months ofQ2FY20 will help off-set weaker (versusQ1FY20) yields,” saidanalysts at SBICAPSecurities Ltd in areport on 22 August.“This will help reduce
cost and improve RASK-CASKspread.” RASK and CASK are reve-nue and cost unit measurements forairlines.
During the call, Dutta added, “Iwant to remind our shareholders thatin the second quarter last year, weregistered a negative 16% PBT mar-gin. We will of course do better than
EMERGING FROM THE CLOUDS?
INDIGO STOCK is now higher than levels seen before troubles between promoters intensified in July
THE RECENTLY concluded AGM ended on a good note and is sentiment-positive
THE SQUABBLES between promoters have not affected the airline’s operational performance
envious 47.8%. The sharp appreciation in IndiGo’s
shares over the past year, suggestsinvestors have taken this into cogni-zance. However, meaningful appreci-ation hereon could well be limitedgiven the lean September quarterunless, of course, the airline surprisesdramatically. Investors should watchthe traction from the internationalmarket in future.
Taking wing
Source: Directorate General of Civil Aviation, SBICAP Securities
IndiGo’s domestic passenger volumes (in million)
IndiGo has remained a key beneficiary of Jet Airways’ downfall, witnessing 17% year-on-year growth in its domestic passenger traffic in July.
Jul 2018
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2019
5.694.86 4.76 4.92 5.07 5.015.48 5.32 4.93
5.44 5.46 5.98 5.78
SANTOSH SHARMA/MINT
Trend reversal
Source: Bloomberg
Shares of asset management companies reacted to the cut in expense ratios by Sebi, but have since outperformed the broader markets.
133.65
115.69
Base value taken as 100
29 Aug 2018 29 Aug 201940
60
80
100
120
140Reliance Nippon LifeHDFC AMC Nifty 500 index
89.3
SANTOSH SHARMA/MINT
A mixed bag
Source: Company, HDFC Securities Institutional Research
RBL Bank’s asset quality was stable in the June quarter, but slippages have risen.
Gross
Non-performing assets (in %)
Net
Slippages (in � crore)
(Left-hand scale)
0
0.3
0.6
0.9
1.2
1.5
0
50
100
150
200
250
Q1 FY19 Q1 FY20
0.75
1.4
0.65
148
225
1.38
SATISH KUMAR/MINT
tal expenditure will take another18-24 months to come up andPower Grid will plan capex tomatch generation and thusensure no impact to its finan-cials,” they said in a note.
Despite this, the episode is acautionary tale for investors
R. Sree Ram
Power Grid Corp. of IndiaLtd’s investors shruggedoff the adverse tariff ruling
on the renewable energy trans-mission corridor resulting in again of 1.8% in the stock from 9August when the order wasissued by the Central ElectricityRegulatory Commission. Theorder limits the liability of powerdistribution companies (dis-coms) to the extent of their usageof the green energy corridor,according to JM Financial Insti-tutional Securities Ltd.
Theoretically, the latest ordercrimps Power Grid’s realizationsas it will have to bear the com-plete project cost from the date of
commissioning, irrespective ofthe utilization levels. The tarifforder pertains to the 8,900megawatts transmission systemwith an estimated cost of ₹7,041crore. Of this, around ₹2,520crore has been approved underthe regulated tariff mechanism toPower Grid.
To evacuate renewable energyfrom power plants that are beingbuilt in different states, the Cen-tre approved a plan to constructa suitable transmission system,termed as green energy corridor.
On the positive side, powerdiscoms will not be unfairlycharged for the capacities theyare not utilizing. This is impor-tant against the backdrop of thegeneral slowdown in renewableenergy capacity additions.
tracking the company’s growthtrajectory.
As capital expenditure moder-ated from recent highs stokinggrowth concerns, Power Gridcited green energy corridors as agrowth avenue. Given the gov-ernment’s renewable energycapacity addition targets, theopportunity still exits but is notshaping up as expected, as thelatest order illustrates.
Similar to NTPC Ltd, PowerGrid is allowed to earn a fixedreturn on equity invested for theprojects built under the regu-lated tariff mechanism. Hence,the capacity additions are crucialfor growth momentum.
The firm expects to capitalizeprojects worth ₹20,000-25,000crore in FY20. This is notably
lower than the additions in FY16-FY18. According to JefferiesIndia Pvt. Ltd, the projects inhand provide enough visibilityfor ₹18,000-20,000 croreannual capitalization for the nexttwo-three years. Beyond that,Power Grid will be “hit by privatesector aggression in a stable todeclining transmission projects’market pie”, warn analysts at Jef-feries India.
Power Grid is trying to exploreintra-state transmission capexand railways electrification, buthas had limited success till now.Perhaps the undemanding valua-tions and healthy dividend pay-outs are limiting the downsidefor the stock, which trades at 1.5%FY21 estimated book value andoffers a 5% dividend yield.
Why green-energy corridor setback did no major damage to Power Grid
Holding steady
Source: NSE
Concerns about growth momentum notwithstanding, shares of Power Grid Corp. have largely remained stable.
29 Aug 2018 29 Aug 2019
106.5
Base value taken as 100
80
90
100
110
120Nifty 50 indexPower Grid Corp. of India
93.8
SANTOSH SHARMA/MINT
Mixed signalsUS crude oil stockpiles have fallen to a 10-month low, while production has risen to a record.
Source: Energy Information Administration, Bloomberg
4 Jan 23 Aug
490
480
470
460
450
440
430
420
12.6
12.4
12.2
12
11.8
11.6
11.4
11.2
Stockpiles (in million barrels) (Left-hand scale)
US crude oil
Production (in million barrels/day)
NAVEEN KUMAR SAINI/MINT
Oil drops as US inventories hope gives way to gloom
Oil snapped a two-day gain as investorsweighed a sizable drop in US inventoriesagainst a trade war that shows few signs it willbe resolved. US stockpiles fell by 10 millionbarrels last week to the lowest since October2018, the Energy Information Administrationreported. Treasury secretary Steven Mnuchinsaid that US trade officials expect Chinesenegotiators to visit Washington, but hewouldn’t say whether a previously plannedSeptember meeting would take place.
The drop in American inventories is evi-dence that aggressive output cuts by the Orga-nization of the Petroleum Exporting Countriesand its allies are having an impact on the mar-ket. However, an increase in American oil pro-duction to a record tempered the price opti-mism. BLOOMBERG
China’s slowdown deepens in August, show indicators
China’s economy slowed further in August asweak domestic conditions, intensifying ten-sions with the US and worsening global tradeall combined to undermine the outlook. Thatcan be seen in a Bloomberg Economics gaugeaggregating the earliest available indicatorsfrom financial markets and businesses.
Sentiment among sales managers and themainland stock market fell, while a leadingindicator of China’s exports continued todecline. However, small business confidenceimproved for the first time in five months, asign that earlier pro-growth measures may betaking effect. With trade tensions worseningand the currency weakening past 7 to the dol-lar, policymakers have stepped up targetedmeasures to support the economy. BLOOMBERG
No-deal Brexit spells more pain for already-weak UK
Britain has just edged closer to a no-deal Brexitthat could deliver another blow to an economyalready strained by domestic uncertainty and aglobal slowdown. Companies have consistentlylobbied for a transition period when the nationleaves the European Union, yet Prime MinisterBoris Johnson shrugged those calls when hesaid he plans to suspend Parliament before tak-ing the country out of the bloc on 31 October.
The business community was quick torespond, warning that more political chaos willcause further pain in the country already onthe brink of a recession. The economy shrankin the second quarter, though that was largelypayback after Brexit stockpiling at the start ofthe year. BLOOMBERG
Under pressureBritain is on the brink of a recession after the economy shrank in the second quarter.
Source: Office for National Statistics, Bloomberg
30 Jun 2011 30 Jun 2019
1.2
1
0.8
0.6
0.4
0.2
0
-0.2
UK GDP (quarter-on quarter in %)
Prolonged weaknessSmall business confidence has improved in China, while all other indicators have dropped.
Source: Bloomberg
Economic indicator Weaker Stronger
Overall activity
Major onshore stocks
Key property stocks
Smaller business confidence
Iron ore prices
Copper prices
South Korea exports
Sales manager sentiment
Factory inflation tracker
NAVEEN KUMAR SAINI/MINT
NAVEEN KUMAR SAINI/MINT
CORPORATE FRIDAY, 30 AUGUST 2019NEW DELHI 05
tively, as on 31 March 2018, theexchange filing said.
The board had on 10 Maysent CEO and managingdirector K.N. Neelkant onleave, pending an investiga-tion into some “suspect, unau-thorized and undisclosed”transaction.
Thapar said he didn’t havethe opportunity to participatein the investigation. “I leave itto the stakeholders to drawtheir own conclusions fromthis fact. I will reaffirm this at
trol of the group. The court on Thursday also ordered a retrialfor Park, who is already in jail, arguing she should face trial onbroader bribery charges.
“It’s highly likely that Jay Y.
Sohee Kim
SEOUL
South Korea’s highest courtordered the retrial of Sam-sung Electronics Co. vice-
chairman Jay Y. Lee over brib-ery charges, reviving legal uncertainty around the coun-try’s largest company just as it’snavigating global trade turmoil.
The Supreme Court onThursday voided an earlierdecision to suspend Lee’s2.5-year prison sentence and issending the case back to thelower court, it said. Lee mayend up going to prison again,having previously served a yearafter getting arrested in Febru-
ary 2017. He was released in2018 after the Seoul high courthalved what had originallybeen a five-year term and sus-pended it for four years.
Lee, 51, was the highest-pro-file business figure to have beenembroiled in a graft probe thatinflamed resentment toward the country’s well-connected chaebol, rocked domestic poli-tics and helped bring down former president Park Geun-hye, who was removed from office in 2017. The Samsung executive was accused of directing tens of millions of dol-lars to entities controlled by a confidante of Park in return forgovernment support of a 2015 merger that cemented his con-
Lee will get a jail sentence in aretrial as the amount of bribeshas extended,” Chung Sun-sup,chief executive officer at corpo-rate research firm Chaebul.com,said by phone. “This is the apexof the chaebol reform, a signalthat chaebol’s misbehaviourwill not be allowed.”
Samsung’s new investmentsand mergers and acquisitionsare at risk, said Heo Pil Seok,chief executive officer at MidasInternational Asset Manage-ment Co., adding the lowercourt may hand down a heavierruling against Lee. If Lee isagain jailed, the setback toSamsung’s business may affectits suppliers as well and disruptnew orders. BLOOMBERG
Samsung’s Lee faces retrial, may return to jail
Samsung Electronics Co. vice-
chairman Jay Y. Lee. REUTERS
board said the company hasdiscovered “significantaccounting irregularities”,including suspect transactionsthat have led to understate-ment of the company’s liabili-ties and advances to relatedand unrelated parties by hun-dreds of crores of rupees.Some assets were also purport-edly used as collateral and themoney from the loans wassiphoned off by “identifiedcompany personnel”.
“In cognizance of the cur-rent situation being faced bythe company and the recentdevelopments, including dis-closures dated August 19,2019, made by the company,the board of directors passedby majority consent, hasresolved to remove GautamThapar as the chairman of theboard with immediate effect,”CG Power said in a regulatoryfiling on Thursday.
The total liabilities of thecompany and the group mayhave been understated byapproximately ₹1,053.54 croreand ₹1,608.17 crore, respec-
FROM PAGE 1 the board meeting tomorrow,30th August, 2019.”
On 20 August, CG Powersaid it planned to conduct adetailed forensic investigationto establish wrongdoing.
With lenders invokingpledged shares, Thapar’sAvantha Group has a negligi-ble stake in CG Power as on 30June, while private sector len-der Yes Bank held a 12.79%stake.
Other majors h a r e h o l d e r sinclude HDFCMutual Fund,Aditya Birla SunLife Asset Man-agement, Frank-lin Templetonand Life Insur-ance Corporationof India.
The company is now con-trolled by lenders, whichinvoked the pledged share-holding of promoters earlierthis year.
In a regulatory filing onTuesday, the company saidthat it will sell non-core assetsand explore various fundrais-ing avenues to reduce debt and
optimize its operations. The sale of assets includes
the Kanjurmarg land in Mum-bai and its CG House head-quarters.
The board is also consider-ing other fundraising avenues,including an equity raise forbridging cash flow gaps andmeeting working capitalrequirements to avoid busi-ness disruption, it said.
I t i s a l s oreviewing itsi n t e r n a t i o n a lo p e r a t i o n s ,w h i c h s p a nE u r o p e a n dSouth-East Asia.
Burdened withdebt, AvanthaGroup has alsobeen in talks to
sell assets to raise cash. In2014, it sold its Korba powerplant to Adani Power for₹4,200 crore. Another groupcompany, Crompton GreavesConsumer Electricals Ltd, solda large stake in its consumerelectrical business to privateequity funds Advent Interna-tional Corp. and TemasekHoldings for ₹2,000 crore.
Fraud-hit CG Power fires chairman Thapar
Thapar denied allegations of
misappropriating funds of the
power equipment maker, which is part of Avantha
Gautam Thapar. HT
Edwin Chan, Lulu Yilun Chen &
Chunying Zhang
HONG KONG
Elon Musk and Jack Ma matched witspublicly for the first time. And boy,they didn’t disappoint.
An onstage debate betweenChina’s richest man and the Tesla
Inc. boss left a largely Chinese audience bothawestruck and dumbfounded as the pair sparred over everything from the existence ofaliens to the preservation of human con-sciousness.
Musk, alternating between tech visionaryand larger-than-life Bond villain, argued thatAI will soon surpass the human race; that civi-lization may end and hence humankind needed to explore the cosmos (specifically Mars); and that people are essentially dumb creatures circumscribed by genes.
But Musk, who appeared discombobulatedat times following a late trans-Pacific flight, met his match in a fellow billionaire who par-ried him at every turn. The Alibaba Group Holding Ltd. co-founder espoused a focus onlife on Earth and argued that machines will never surpass their makers.
Ma, the more polished and down-to-earthspeaker, also invoked familiar stances on edu-cation and the need for “Love-Q” or LQ in addition to IQ to survive the future. But over-all, the Alibaba honcho came across as morereasonable than the erratic Musk, who severaltimes trailed off into poorly articulated tan-gents such as the timeline of civilization or pace of technological change (“It does seem like a long time... Is that good or bad? I dunno.”)
Just about the only thing they agreed onwas that the global population was on thebrink of collapse thanks to current birthrates—a looming disaster the planet is ill-pre-pared to tackle.
“Most people believe that we have toomany people on the planet. This is an out-dated view,” Musk told the World AI Confer-ence in Shanghai, as Ma nodded. “Assumingthere’s a benevolent AI, the biggest problem
Banks may issue co-branded debit cards in partnership with white label ATM operators
bit.ly/2NGzdZV
When a jet-lagged Musk made Alibaba’s Ma sound grounded
The pair sparred over everything from aliens to preservation of humans, leaving the audience awestruck
Alibaba Group Holding co-founder Jack Ma (left) and Tesla CEO Elon Musk at the World Artificial Intelligence Conference in Shanghai. REUTERS
the world will face in 20 years, is a populationcollapse. Not explosion. Collapse.”
The showdown was the highlight of theconference, which kicked off on a rainyThursday in the shadow of a US-Chinese con-flict that has at times appeared to pull theworld to the brink of chaos.
From Jack Ma to TencentHoldings Ltd founder Pony Ma,the leading lights of China’s inter-net industry gathered in Shanghaithis week to showcase the coun-try’s latest advances in artificialintelligence. And Musk, whosemoment on stage brought drovesof camera-toting spectators out oftheir seats, effectively lent credence toChina’s vision of becoming the world leaderin the technology by 2030 just as DonaldTrump wages a campaign to rein in theworld’s No. 2 economy.
While the billionaire entrepreneur wascareful to steer clear of the trade war orlonger-term geopolitical tensions, he spokefreely on almost everything else—including
the possibility that life as we know it may endabruptly. “We don’t have much time,” Musksaid. “This is the first time in the 4.5 billion-year history of Earth that we’ll be able toextend life beyond Earth,” he added. “Let ussecure the future so the light of conscious-ness is not extinguished.”
The debate at times turned heated, espe-cially when Ma questioned his opponent’sbelief that AI may someday prevail over thehuman race. “The biggest mistake I see peo-ple making is to assume they’re smart,” Muskcountered. AI will be “much smarter than thesmartest human you will ever know.”
Ma likened the view that humans won’t beable to compete with their machine inven-
tions in most aspects of life—Musk’s stance—to people of a century ago trying to out-runcars they manufacture. “I never in my life sayhuman beings will be controlled bymachines, it’s impossible,” said Ma, elicitingMusk’s trademark Bond-villain chortle andthe retort: “I very much disagree with that.
The biggest mistake I see peoplemaking is to assume they’resmart.”
It didn’t all go according toscript. At one point, Ma surprisedlisteners—the spectacle waslivestreamed—when heappeared to do a 180 on his infa-mous advocacy of slavish work
hours. On Thursday, he proclaimed that people
should be able to in fact work 12-hour weeks,a seeming reversal of comments just monthsprior that it’s a privilege to work “996,” ornine to nine, six days a week. BLOOMBERG
Edwin Chan, Bruce Einhorn and Ville Heis-kanen contributed to this story.
FACE-OFF OVER AI
THE only thing they agreed on was that global population was on the brink of collapse
THE debate began to heat up when Ma questioned Musk’s belief that AI may prevail over humans
JACK MA also proclaimed that people should be able to in fact work 12-hour weeks
Swaraj Singh Dhanjal & Ridhima Saxena
MUMBAI
Computer Age Manage-ment Services Pvt. Ltd(CAMS), a registrar and
transfer agent (RTA) serving 16mutual funds in India, is hiringinvestment banks for its pro-posed ₹1,000-crore initialpublic offering (IPO), threepeople aware of the develop-ment said, requesting ano-nymity.
The IPO will be an offer forsale (OFS) that will see thecompany’s existing investorsdivest partially their stakes,said the first person citedabove.
The investors of CAMSinclude India’s largest privatemortgage lender HousingDevelopment Finance Corp.Ltd, global private equity (PE)investor Warburg Pincus LLC,India’s mid-market PE firmFaering Capital and NSEInvestments Ltd, a unit of theNational Stock Exchange Ltd.
“They will be appointinginvestment banksand other advis-ers in the nextcouple of weeksto start work onthe IPO,” the firstperson said.
Calls to thecompany’s Chen-nai office, and anemail to AnujKumar, president and CEO,CAMS, remained unanswered.
Founded in 1998, CAMS isone of India’s largest RTAsthat processes mutual fundtransactions and maintainsinvestors’ records. It offersphysical touch points forreceipt, verification and proc-essing of financial and non-fi-nancial transactions. The com-pany also offers back-end ser-
vices to mutual fund housesfor subscription, redemption,systematic investment plans,transfer and dividends.
As of December 2018,CAMS had a 67% market sharein the mutual fund industry,with ₹15.7 trillion worth assets
under manage-ment and main-tained records ofnearly 60 millionfolio accounts,according to itswebsite.
Besides actingas a transferagent to mutualfunds, the Securi-
ties and Exchange Board ofIndia-regulated entity alsoprovides online service solu-tions to private life insurers,private equity funds, banksand non-banking financialcompanies. CAMS operatesaround 265 service centresand employs 6,000 people. In2016-17, it had a revenue of₹478.3 crore.
The IPO will be an offer for sale that will see the
company’s existing investors
divest partially their stakes
MF transfer agency CAMS seeks bankers for ₹1,000-crore IPO
As of December 2018, CAMS
had a 67% market share in the
MF industry, with ₹15.7 tn worth
assets under management.
MINT
06 FRIDAY, 30 AUGUST 2019NEW DELHI CORPORATE
not regionally rooted, meaningthe backdrop can pass off forthe rest of India, industryexperts say.
Baahubali, with its mytho-logical setting centered onkingdoms and rivalries, wasakin to the Amar Chitra Kathatales many Indians grew up on.2.0, similarly, supplemented itsvisual effects-heavy narrativewith superstars Rajinikanth
Shobu Yarlagadda, co-founderand CEO at Arka Mediaworks,producers of Baahubali, addingBollywood hasn’t really beenable to offer similar sized filmsto audiences.
The focus in the Hindi filmindustry, at the moment, ismore on niche, experimentalsubjects that cater to multi-plexes and urban audiences.
Moreover, these movies are
Anirudh Laskar
MUMBAI
Icra Ltd on Thursday ousted itsmanaging director and groupchief executive officer (CEO)Naresh Takkar, three monthsafter the Securities and
Exchange Board of India or Sebireceived a complaint alleging mis-conduct at the credit rating agencyunder Takkar.
In a late evening filing on stockexchanges, Icra said that followinga board meeting on Thursday,“after due consideration and takinginto account the best interests ofthe company and its various stake-holders” the company’s board hasdecided to terminate the employ-ment of Takkar with immediateeffect.
This is the first time a top officialof a rating agency has been fired bythe company’s board.
Sebi is currently probing an alle-gation against Icra over the ratingpractices and methodologies thecompany followed during Takkar’stenure.
“The Icra board will commencea search for a replacement,” saidthe filing, adding that Vipul Agar-wal, who was appointed as interimchief operating officer on 1 Julyremains responsible for the day-to-day operation of Icra until a CEO isappointed.
Takkar, who has been with Icrasince 1991, was forced to go on anindefinite leave on 1 July after therating agency reviewed an anony-
Stimulus package ‘too little, too late’ to prevent decline in auto sector: Fitch
bit.ly/2HuZ5Ew
Icra ousts CEO Naresh Takkar over allegations of misconduct
The move comes three months after Sebi got a complaint of misconduct at the rating firm under Takkar
now been directed by the Reg-istrar of Companies to changetheir names within six months,failing which prosecution pro-ceedings will be initiatedagainst the companies andtheir directors. All three com-panies were incorporated overthe past two-three years, whileReliance Jio was incorporatedin 2007.
Mint has seen copies of theorders.
The first among the entitiesis Jiokind Healthcare Pvt. Ltd,based in Ahmednagar, Maha-rashtra, and involved in miscel-laneous business activities. Theother two companies, alsobased in Maharashtra, are JioRich Pvt. Ltd and Doctor JioHealthcare Pvt. Ltd.
While Jio Rich has a regis-tered office in Sangli and is awholesaler of various goods,Pune-registered Doctor Jio
SHORT TAKESm
Sebi is currently probing an allegation against Icra over the rating practices and methodologies the company
followed during Takkar’s tenure. MINT
mous complaint against the firm,which was forwarded by marketsregulator Sebi.
Icra has not yet shared the exactreasons for firing Takkar.
India’s rating agencieshave been on the radar ofSebi after the Infrastruc-ture Leasing and FinancialServices (Il&FS) crisis sur-faced. A fortnight afterIcra’s move, on 18 July,credit rating agency CareRatings too sent its managingdirector and CEO Rajesh Mokashion an indefinite forced leave, pend-ing completion of the examinationof an anonymous complaint
received by Sebi.Despite receiving positive rating
grades by credit rating agencies onloans disbursed by IL&FS, the
infrastructure lender landed into arepayment crisis, which eventuallyplunged non-banking financialcompanies (NBFCs) into a liquiditycrunch.
On 9 May, The Economic Timesreported that Icra’s top brass wasunder the scanner of Sebi foralleged interference to ensure good
ratings for IL&FS.“Sebi is looking at whistle blower
allegations that Icra’s top manage-ment meddled to ensure AAA rat-ing to IL&FS. The market regulator
has forwarded the whistle blowercomplaint to the rating agency. Theboard of Icra has given KPMG man-date to look into allegations,” theET report said citing unidentifiedpeople.
While announcing its earningsstatement in May, Icra had said,“The company is in the process ofaddressing certain matters (i)related to credit rating assigned toone of its customers and its subsidi-aries, regarding which adjudicationproceedings have been initiated bySebi and (ii) related to an anony-mous representation that was for-warded to the company by Sebi.The board of directors hasappointed external experts to assistwith/ look into the aforesaid andrelated matters, which are cur-rently on going…”.
Grant Thornton, in its specialaudit report on IL&FS, flaggedissues related to loans disbursed byIL&FS and rated by rating compa-nies. In October, the board ofIL&FS had mandated Grant Thorn-ton to carry out a special audit for all
high-value transactionsundertaken by IL&FS andsome of its group compa-nies between April 2013and September 2018.
The report had cited afew instances whichimplied that even thoughthese rating agencies had
concerns about IL&FS group’soperations, the ratings given bythem were consistently positive for6-7 years until they were finallydowngraded in July 2018.
STRINGENT ACTION
TAKKAR, who has been with Icra since 1991, was forced to go on an indefinite leave on 1 July
THE ratings agency has not yet shared the exact reasons for firing Naresh Takkar
A fortnight after Icra’s move, on 18 July, Care Ratings sent its MD Rajesh Mokashi on indefinite forced leave
THE Icra board will commence a search for a replacement, says interim COO Vipul Agarwal
A poster of the Rajinikanth- and Akshay Kumar-starrer science
fiction movie 2.0, which earned ₹617.9 crore last year.
A weekly list of C-Suiters who have moved up the corporate ladder either within or outside their companies.
m
MOVES
Source: Accord India, executive search worldwide
Satish Kumar Arora
Appointed as CEO at KKR
Asset Reconstruction India
RuchiraJaitly
Appointed as CMO India and
APAC at HMD Global
NikunjMaheshwari
Appointed as partner—
banking and finance practice
at AZB & Partners
BharatAdnani
Appointed as CFO at
Care Ratings
RishiLuharuka
Appointed as CFO at
Gabriel India
RajeshSud
Appointed as managing
director of financial services
at Bharti Enterprises
D. MuthukumaranAppointed as CFO at
ReNew Power
ChintaBhagat
Appointed as co-managing
partner and head of Asia funds
at L Catterton
AmitNayyar
Appointed as president—
financial services at PayTM
SandeepSinha
Appointed as CEO at TAFE
ManishMishra
Appointed as partner at
J Sagar Associates
SuruchiNangia
Appointed as director at
Bain Capital Credit
BarunDas
Appointed as CEO at TV9
SuchitraRajendra
Appointed as India head and
HR head, global operations
(Europe and Asia) at COLT Tech
BhriguJoshi
Appointed as director, HR
at SAP India
also found the right marketingand distribution network upnorth.
While Baahubali and 2.0both tied up with Karan Johar’sDharma Productions, KGFfound partners in Farhan Akh-tar and Ritesh Sidhwani’s ExcelEntertainment which is alsobacking Sye Raa Narasimha
Reddy. Saaho isbeing co-pro-d u c e d b yBhushan Kumar’sT-Series.
“When thesen a m e s a r einvolved, people(in the north)stand up and takenotice of the
film,” said Atul Mohan, editorof trade magazine CompleteCinema. Johar and distributorAnil Thadani had managed asmany as 1,800-2,000 screensfor Baahubali: The Beginning in2015. Starting with 780 screensfor its dubbed Hindi version,KGF went up to 951 after a suc-cessful run.
and Akshay Kumar, whobetween the two of them cap-tured both the north and southIndian markets.
Bollywood offerings such asThugs of Hindostan and Pad-maavat, on the other hand, thatsimilarly tried to reach outthrough multiple dubbed lan-guage versions, didn’t managet o m a k e a nimpact.
“ A c t u a l l y ,Thugs of Hindos-tan didn’t make animpact anywhere,not only the south.And Padmaavatmay be was a his-torical knownmore in the north.It depends on the kind of filmyou make; every film is notgoing to be an event. If a filmmade in the south is not rele-vant to the north, it is not goingto work either,” said a tradeexpert on condition of ano-nymity.
Apart from the scale and sub-ject, south Indian cinema has
Before that, Suniel Shettywill appear alongside Kannadastar Sudeep in sports dramaPailwaan this September,which will come out in Hindi,Tamil, Telugu, Kannada andMalayalam.
Veteran actors Chiranjeeviand Amitabh Bachchan willstar in Telugu biographical epicaction film Sye Raa NarasimhaReddy in October, to be dubbedand released in Kannada,Hindi, Tamil and Malayalam.
It appears language andgeography are no longer barri-ers to the reach of a well-madeIndian film.
The makers of south Indianmovies that have clocked suc-cess nationwide say they werealways looking to make“national” and not regionalfilms. Yet, the first and mostimportant factor for the break-out of south Indian cinema istheir scale.
“There is no unique formulaas such. But one thing is forsure, it is the scale that is com-mon across all these films,” said
Lata Jha
NEW DELHI
Driven by epic scale, sub-ject choice and deepnetworking, south
India’s film industry is expand-ing its footprint across thecountry, breaking languagebarriers on the way.
Case in point: Baahubali starPrabhas’ latest film Saahoreleasing in three languagesthis Friday, the latest in a seriesof south Indian movies crossinggeographical boundaries.
The trend began with S.S.Rajamouli’s war epic franchiseBaahubali that grossed morethan ₹1,700 crore worldwide,and was taken forward byRajinikanth’s science fictionflick 2.0 and Kannada perioddrama K.G.F: Chapter 1 thatearned ₹617.9 crore and ₹250crore, respectively.
And it’s not over yet. The sec-ond part to KGF and Baahubalidirector Rajamouli’s next RRRare both slated for 2020.
Language, geography no barrier for makers of south Indian flicks
Apart from scale and subject, south Indian cinema has
found the right marketing and
distribution network up north
Kalpana Pathak
MUMBAI
Beware, if you plan to use“Jio” as the name of acompany, product or ser-
vice, or just about anything.Billionaire Mukesh
Ambani’s Reliance IndustriesLtd (RIL) is going after anyoneusing the name of its telecomventure Jio.
With 45 classes of trademarkon the word “Jio”, the Mumbai-based conglomerate has overthe past few monthsapproached the corporateaffairs ministry to stop at leastthree companies that have“Jio” in either their names,brands or ventures.
RIL’s telecom unit RelianceJio Infocomm Ltd has filedcases before the regionaldirector (western region) of thecorporate affairs ministry, asthe three companies are regis-tered with the Registrar ofCompanies (RoC), Pune.
The three companies have
Healthcare is involved in com-puter-related activities such asmaintenance of websites ofother firms and creating multi-media presentations.
Reliance Jio did not respondto an email until press time.The three companies also didnot respond to emailed queries.
In its application, RelianceJio has argued that the brandJio has been under continuousand extensive use and hasacquired a particular distinc-tiveness, which has broughtgoodwill and reputation to thebrand.
“Jio has become a householdname. Pursuant to this goodwilland reputation of Jio in thepublic mind, any goods, prod-ucts, commodities, services orany other thing whatsoevermade or traded under thebrand Jio can be and are con-sidered to have an apparentassociation, link to the appli-cants,” Reliance Jio said in itspetition to the RoC, addingthat, along with telecommuni-cations, it has services such as
JioChat, JioTV, JioCinema,JioMoney, JioMusic and JioM-ags.
Reliance Jio also said in itspetition that parent RIL has 13subsidiaries, which were incor-porated with a corporate nameconsisting of the brand Jio andit is the owner licensee of thetrademark Jio in almost everyclass with the word Jio and/orcombination of some otherword such as Jio2Datagiri, Jio-Friends, JioEx-change, JioWal-let, Jio Electron-ics, JioDigD,JioComms, Jio-Cash, JioTV, JioTablet and JioS-wasth.
“The detailedlist of 45 classesof the trademarkfor word Jio or combination ofsome other word Jio, which theapplicants possess, has beenannexed with the application,”Reliance Jio said while present-ing its arguments in the case.
It is estimated that Ambani
has spent as much as $50 billionto propel his telecom business toIndia’s top position within threeyears of starting operations, sur-passing incumbents Bharti Air-tel Ltd and Vodafone Idea Ltd.
India’s youngest and onlyprofitable telecom operator,Reliance Jio had a 31.7% shareof the adjusted gross revenuethat the domestic telecomindustry recorded in the Junequarter.
Airtel came aclose second with30% market shareand Vodafone IdeaLtd was third with28.1% share,showed datareleased by theTelecom Regula-tory Authority ofIndia on Tuesday
and analysed by brokerageICICI Securities.
An RIL official said the Jiologo is a mirror image of theword “oil” written in lowercase, both businesses dear toAmbani.
Reliance’s telecom arm moves regulator against 3 entities named Jio
Reliance Jio argued that the brand Jio has been under continuous
and extensive use and has acquired a particular distinctiveness.
RoC has directed the firms to change their names within six months, failing which prosecution
proceedings will be initiated
ANIRUDDHA CHOWDHURY/MINTONGC to borrow $2 bn through unique overseas debt programme
New Delhi: State-owned Oil andNatural Gas Corp. (ONGC) onThursday said it plans to raise upto $2 billion in overseas borrow-ings through a unique and flexibleSingapore-listed debt instrument.
The funds raised can be used torepay about ₹15,000 crore of thecompany’s existing borrowings,fund acquisitions or meet projectand asset expenses. The EuroMedium Term Note (EMTN) pro-gramme would enable ONGC orany of its named subsidiaries to go to market at short notice, say5 to 10 days, to borrow funds any number of times within a one-year period. PTI
Now, Apple to supply parts to independent repair shops
San Francisco: Apple Inc. said on Thursday it will beginselling parts, tools and repair guides to independent shopsto fix broken iPhones, a major change after years of lobby-ing against laws in some US states that would have com-pelled it to do just that.
Apple said the programme will be launched in the USbefore being rolled out to other countries. This means thatindependent repair shops will be offered official parts forout-of-warranty repairs at the same price offered to autho-rized service providers, such as Best Buy Inc., which per-form warranty work. REUTERS
Power Grid gets shareholder nod to raise up to ₹10,000 cr via bonds
New Delhi: State-owned Power Grid Corp. of India Ltd onThursday said it has got shareholders’ approval to raise up to₹10,000 crore through issuance of bonds on private placementbasis, as per a BSE filing. The money will be raised in up to 20
tranches.The funds will be used to
finance the firm’s capex require-ment, providing inter-corporateloans to wholly-owned subsidiar-ies, and for general corporate pur-poses. The resolution was movedin the annual general meeting on27 August. On 3 July, the com-pany’s board approved raising upto ₹10,000 crore in up to 20 tran-ches depending upon the require-ment of funds during 2020-21.PTI
REUTERS
AFP
ANIRUDDHA CHOWDHURY/MINT
CORPORATE FRIDAY, 30 AUGUST 2019NEW DELHI 07
In relief for lenders, Air India unit to pay ₹22,000 crore dues in Sep
Air India Assets Holding’s debt repayment will sharply lower interest obligations of the national airline
Tiffany’s entry into India comes after reaching ‘critical mass’
bit.ly/2Pwu9Ky
Rhik Kundu
NEW DELHI
India will follow a prudentapproach in lifting a ban oncommercial flights of Boeing
Co.’s 737 MAX planes, thecountry’s civil aviation regula-tor said on Thursday.
“The Boeing 737 MAX air-craft has done more than 800hours of test flight (since itsgrounding earlier this year),”Arun Kumar, director generalof civil aviation (DGCA) said.Boeing is expected to approachUS civil aviation regulator, theFederal Aviation Administra-tion (FAA), for re-certificationof the planes by October, hesaid.
The 737 MAX, considered amore fuel-efficient plane thanits predecessor, was groundedby the DGCA on 13 March afteraviation regulators worldwidegrounded the plane followingthe crash of an Ethiopian Air-lines 737 MAX near AddisAbaba on 10 March, killing 157people, including four Indians.Last October, a Boeing 737MAX of Lion Air crashed, kill-ing 180 people in Indonesia.
“DGCA will be conservativeand wait and watch, before tak-ing any decision (on Boeing 737MAX),” Kumar said. The suffer-ing of Indian carriers because ofthe grounding of the planes hasbeen limited as local airlines operate only a dozen such planes compared with about 400 used by airlines worldwide.
SpiceJet Ltd, one of theworld’s biggest customers for the 737 MAX 8, has orders for 155 aircraft with purchase rightsfor 50 additional 737 MAX 8 and wide-body planes. The air-line has taken delivery of 12 Boeing 737 MAX 8 planes so far,which are at present grounded.
Jet Airways (India) Ltd, hadtaken delivery of five Boeing737 MAX aircraft. However, theairline has been groundedsince April because of a fundcrunch. Those planes havesince been taken back by theleasing companies.
“There is, however, stillsome way to go,” Kumar saidwhen asked for a timeframe forre-inducting the 737 MAX.
While Boeing has informedSpiceJet that deliveries of theremaining Boeing 737 MAXplanes will resume from Octo-ber-December 2019, the Chica-go-headquartered companyhas to accomplish various tasksto rectify the plane.
Boeing has been reprogram-ming software for a stall-pre-vention system, considered asthe reason for both crashes,which the FAA must approvebefore the plane flies againcommercially.
The FAA last week said that itwould invite 737 MAX pilotsfrom across the world to partic-ipate in simulator tests as partof the process to rectify the air-craft for flights, Reuters
reported. Boeing has told sup-pliers it planned to ramp 737MAX production by February,the report said.
India will take prudent approach on 737 Max aircraft, says regulator
The 737 MAX was grounded by
the DGCA on 13 March. REUTERS
Air India arm AIAHL will raise the money through a government-guaranteed bond issue.
Rhik Kundu
NEW DELHI
Lenders to Air India Ltd are set formajor relief as Air India AssetsHolding Ltd (AIAHL) is expectedto repay ₹22,000 crore of its₹29,464 crore of its working capi-
tal debt next month, a move that will alsosharply lower the interest obligations ofthe national carrier, said two people withdirect knowledge of the matter.
AIAHL, a special purpose vehicle (SPV)created to warehouse the debt of Air India,will raise the money through a govern-ment-guaranteed bond issue, said one ofthe persons mentioned above, requestinganonymity.
The proceeds of the bond will be used toretire working capital debt parked in theSPV, the person said.
The rupee-denominated bond issue andthe subsequent repayment of the workingcapital debt will nearly halve the interestservicing outgo for Air India from₹4,500-5,000 crore a year to about ₹2,700crore a year, said the other person, whoalso did not want to be named.
Air India’s lenders include state-runbanks such as Allahabad Bank, AndhraBank, State Bank of India, United Bank ofIndia, UCO Bank, Union Bank ofIndia, and Punjab NationalBank, and private lenders suchas Deutsche Bank, StandardChartered and JPMorgan.
Air India’s net debt swelledfrom about ₹55,000 crore at theend of March 2018 to ₹58,351.93crore at the end of March 2019.Aircraft debt makes up the differencebetween total debt and the working capitaldebt of ₹29,464 crore.
Air India is expected to have incurred aloss of ₹7,365 crore in the year ended 31March 2019, compared to the ₹5,337 croreloss it reported in the previous year,according to provisional figures issued by
the government in June.The losses can be attributed to a weak
rupee, higher fuel prices and the high-in-terest rate burden on its debt, said the sec-ond person mentioned above.
“Air India will become more efficient if
its net debt is reduced by about half as thiswill leave more cash in the airline’s handsto spend,” the person said.
Air India, which has about 128 aircraft,began operations on 13 new domesticroutes and six international ones in the lastfiscal.
The cash-strapped airline, which is sur-
viving on government bailout, has receivedan equity infusion of ₹30,520.21 crore fromthe government so far as a part of the 2012Turn Around Plan (TAP).
AIAHL was set up by the government inFebruary 2019 to park accumulated work-
ing capital loans not backed byany asset along with four sub-sidiaries of the airline, Air IndiaAir Transport Services Ltd(AIATSL), Airline Allied Servi-ces Ltd (AASL), Air India Engi-neering Services Ltd. (AIESL),and Hotel Corporation of IndiaLtd (HCI), non-core assets,
painting and artefacts and other non-oper-ational assets of Air India Ltd.
As of now, only one subsidiary of AirIndia, namely AIATSL, has been trans-ferred to AIAHL, in line with the share pur-chase agreement between Air India Ltdand AIAHL subject to conditions whichinclude the approval of lenders.
DEBT REDUCTION PLAN
PROCEEDS of issue will be used to retire working capital debt parked in the special purpose vehicle
AI’S net debt swelled from about ₹55,000 cr at the end of Mar 2018 to ₹58,351.93 cr at the end of Mar 2019
AIRCRAFT debt makes up the difference between total debt and the working capital debt of ₹29,464 crore
Rhik Kundu
NEW DELHI
The central government remainscommitted to the privatizationof Air India Ltd, despite having
failed to receive a single bid for thecash-strapped carrier last year, civilaviation minister Hardeep Singh Purisaid on Thursday.
“There is an interest in buying AirIndia,” Puri said without elaborating.He said the ruling Bharatiya JanataParty (BJP) will find the best possibledeal for the national carrier.
Air India has been a liability to theexchequer in a highly-competitive airtravel market, incurring losses everyyear for the past several years, forcingthe government to regularly infusetaxpayer funds to keep it running.“The government shouldn’t be in thebusiness of running an airline,” Puriadded. The national carrier had a debtof ₹58,352 crore at the end of FY19,about half of which was transferred toa special purpose vehicle (SPV), AirIndia Assets Holding Ltd, set up inJanuary 2018, as part of a financialrestructuring plan. The governmenttransferred the debt of ₹29,464 crore,as well as non-core assets, four unitsand non-operational assets of AirIndia to the SPV.
Home minister Amit Shah will heada group of ministers to look into theprivatization of Air India, he said.
Govt will stick to privatization plan, says Puri
08 FRIDAY, 30 AUGUST 2019
NEW DELHI CORPORATE
market.There’s a long way to go: A mere
700,000 electronics manufacturing jobshave been created since Make in Indiastarted, according to Mahindroo’s indus-try group. Skilled workers such as indus-trial designers are in short supply, andthere isn’t yet much of a supplier networkproviding crucial components such as bat-teries, semiconductors and processors.“India is not there yet,” says Anshul Gupta,a senior research director at Gartner India.“But things are beginning to fall in place.India can bolster its manufacturing capac-ity and help the world cut its reliance onChina.”
Foxconn was integral to China’s trans-formation into a manufacturing colossus,and Gou has told Prime Minister NarendraModi that Foxconn could help India dothe same. But it took China 30 years to getthere. “China’s advantage was its massivelabour pool that could produce quitecheaply, and they built on that by invest-ing heavily in logistics and transporta-tion,” says Andrew Polk, a founding part-ner with Trivium China, a Beijing-basedresearch firm. “Even as their labour pooladvantage is dissipating, they haveinvested in processes and systems so theycan produce efficiently at scale and get thegoods to the market.”
Catching up will require the Indian gov-ernment and private sector to invest heav-ily in roads, rails, ports and other infra-structure. “When China did it, global sup-ply chains were fragmented and therewasn’t another China,” Polk says. “Indiawill not only have to get it right but theyhave to get it right in a way to better China,and trade wars can only help at the mar-gins.”
China also had the benefit of being ableto grow without worrying too much aboutthe environmental impact. With concernabout climate change growing, “that’s notgoing to fly these days,” he says.
As a two-decade veteran of supplychains in India and elsewhere, Foulger ispainfully aware of the challenges. “I cantwirl my mustache and say, ‘India can rep-licate China,’” he says. “The reality is thatwe have shortcomings.” While the stategovernment provided land, water andpower connections for the Sriperum-budur facility, Foxconn, Dell, Flextronicsand other companies banded together tobuild the industrial park for their facto-ries. Even so, Foulger still needs to ferry inwater for his thousands of workersbecause Chennai city and nearby areashave a severe water shortage.
Foulger decided early on to recruitmostly women. Female factory workersare commonplace in China, but unusual inIndia, where rural women are typicallyconsigned to unpaid household or farmwork. Women in this region weren’t evenallowed to work at night in factories untilthe local government and the courts inter-vened four years ago.
It was Foulger’s mother who plantedthe idea and persuaded him to givewomen the opportunity. A teacher whosestudents often hailed from underprivi-leged backgrounds, she told him girls arecurious, hard working and committed butfamily circumstances prevent them fromgoing to college. Many are forced to startwork early or are pushed into marriageand child rearing at a young age.
Foulger says that because most Indianmanufacturers prefer to hire men, it waseasy to hit his hiring targets. But he’s had
THE IPHONE’S MAKE IN INDIA STORYIn recent months, workers at an Andhra factory began testing and assembling Apple’s iPhone X, which will be sold in India first and eventually exported
Saritha Rai
BENGALURU
On a steamy summer morn-ing, dozens of buses pull upoutside a cluster of low-slung, blue buildings inAndhra Pradesh. Women
dressed in colourful salwar kameezes dis-embark, their dupatta billowing as theymake their way past hibiscus bushes andposters proclaiming, “Our aim, no acci-dent.”
The night shift at Foxconn TechnologyGroup’s mobile phone plant in Sri City isending, and thousands of young womenare punching out as others stream in toreplace them. One of the arrivals is Jenni-fer Jayadas, a tall, slim 21-year-old wholives several miles away in a two-room hutwith no running water.
After gobbling down a free breakfast ofchapatti with a potato-and-pea curry, shedons a checked white hat, apron-shirt,static-resistant footwear and tiny fingergloves. Then Jayadas takes her place at atesting station where she will spend thenext eight hours making sure the volume,vibration and other phone features workproperly. “Smartphones used to be allmade in China,” she says. “Now, we makethem here.”
Foxconn, also known as Hon Hai Preci-sion Industry Co., opened its first Indiafactory four years ago. It now operates twoassembly plants, with plans to expandthose and open two more. India hasbecome an important manufacturing baseas the Taipei-based company looks todiversify its operations beyond China
Succeeding in India hasbecome all the more urgentsince US President DonaldTrump launched a trade warlast year and announced tar-iffs on thousands of productsmanufactured in China,including the gadgetry Fox-conn makes for Apple Inc.,Amazon.com Inc. and others.
In late August, Trumpratcheted up the rhetoric—orderingAmerican companies to start pulling outof China and citing a national security lawas justification. He backed off two dayslater, but many companies have resignedthemselves to an inevitable and costlyrethinking of their global supply chains.
“It’s a good business principle not to putall your eggs in a single basket,” says JoshFoulger, who runs Foxconn’s India opera-tions.
“We have to find viable and reliablealternatives. Obviously the alternativelocation has to be competitive. We can’tput a factory in Mexico for manufacturingmobiles. It might have worked 10 years
ago, it just won’t work today.”Foulger, 48, grew up in Chennai and
attended the University of Texas inArlington, before returning to India in themid-aughts to set up manufacturing forNokia. He joined Foxconn four years agoto help founder Terry Gou establishassembly plants in India, now the world’sfastest-growing smartphone market.
Foxconn’s first India facility started in2015 in Sri City, a special economic zonewhere goods can be imported andexported with limited red tape and foreigncompanies make everything from diapersto train carriages. Foxconn’s plantemploys almost 15,000 workers—about90% of them women—and assemblesphones for various manufacturers, includ-ing local best-seller Xiaomi. In recentmonths, workers began testing andassembling Apple’s iPhone X, which willbe sold in India first and eventuallyexported.
A second mobile phone factory openedin 2017 in Sriperumbudur, about twohours by road from the first facility. Itemploys 12,000 and is partially auto-mated. “By 2023,” Foulger says, “both fac-tories will be much larger and we’ll addtwo more locations.”
Foxconn currently ships parts in fromChina, but hopes one day to manufacturedisplays and printed circuit boards locally.Foulger is angling to capture a third of thedomestic smartphone market and 10% ofthe global one (up from a 2.5% sharetoday). Eventually, he plans to add otherproducts, including Amazon Echo speak-ers, to the mix. “Until now, India has madefor India,” he says. “Soon India will makefor the world.”
Seated in an office over-looking the hubbub of theSriperumbudur plant, thestrapping, bearded executiveticks off India’s pluses: labourcosts that are half that ofChina’s, a vast pool of work-ers including talented engi-neers, a government eager tohelp.
Earlier this year, Foulgerspent an hour laying out his 2030 targetswith Gou, who he says told him: “I’ll be100 and coming to visit your factories.”
They have a staunch partner in the cur-rent National Democratic Alliance gov-ernment which is under pressure to bringdown the jobless rate. The government’sfour-year-old “Make in India” policy seeksto turn the country into a manufacturingpower by offering incentives to foreigncompanies to open factories. “The plan isto expand India’s $25 billion phone manu-facturing to $400 billion by 2024,” saysPankaj Mahindroo, who heads the IndianCellular & Electronics Association. “A sub-stantial portion of it will be for the export
India has become an important
manufacturing base as Foxconn looks to diversify
its operations beyond China
to make accommodations. For instance,the air conditioning had to be turned up to26 degrees because the woman havenever experienced it before. A line man-ager brought up the issue of sanitaryhygiene, and Foulger was initially hesi-tant. What would be the reaction in theirvillages, he wondered? Still, he listenedand had sanitary pad dispensers installedin the washroom. Foulger also has to payfor extra security for his female recruitsand provide buses and dormitory accom-modation for those who live far from thefactories. But he says it’s well worth theextra cost because “women work hard andappreciate the chances givento them.”
Over the years, Foxconnhas been criticized for gruel-ing working conditions at itsChina factories. A string ofsuicides of young migrantworkers earlier this decadeshocked the world andprompted the company tocreate a help hotline, boostpay and install safety netting to discouragejumpers. In August, Foxconn fired twoexecutives at a Chinese plant that assem-bles devices for Amazon after a labourgroup alleged it slashed wages and floutedlaws to help deal with rising US tariffs.
During visits to Foxconn’s two Indiafactories, there was no visible sign ofsweat-shop conditions. Workers theremostly complain about the monotony.From the minute they enter the shop floorto the end of an eight-hour shift, workrepeats in a relentless cycle. The daily pro-duction target has to be met at all costs.Row upon row of women put togethereach phone part by part, inspecting each
handset for visible defects. ShivaparvatiKallivettu, 24, spends her days testing thephone’s audio and examining batteriesand SIM card trays, explaining that hermain respite comes every morning in thefactory canteen when she has breakfastwith four close friends.
Most women take the jobs with specificgoals in mind, such as sending their kids tobetter schools or clearing family debt. Thepay hoists them over the poverty line. Jay-adas gets about ₹9,000 monthly ($130,which is about a third of the average Chi-nese factory wage), free bus rides and twowholesome meals. To help avoid tedium,
the company teaches work-ers at least 10 skills in thetesting, packing and assem-bly sections of the line sothey can be rotated to differ-ent jobs. Still, many of theworkers treat the job as astop-gap. Recently, 400women failed to show up fortheir daily shift. Managersdiscovered they were all tak-
ing the government’s teacher recruitmentexam—a job that pays a third of what theymake at Foxconn but provides less tangi-ble compensations.
After her shift, Jayadas boards the bus,reaching her home a little before 4pm. Shehelps with the cooking, then fetches 12buckets of water from a street tap for thefamily’s daily needs. Her father’s incomerepairing radios and DVD players is mea-ger and erratic, and her entire paycheckgoes to her parents. “First, the house hasto be fixed,” Jayadas says gesturing towardthe flimsy roof and decrepit walls. “Then,I want to save up for a beautician’s course.”
BLOOMBERG
Foxconn currently ships parts in from China, but hopes to manufacture
displays and printed circuit boards locally
An employee tests the camera quality of mobile phones on an assembly line at Rising Stars Mobile India, a unit of Foxconn Technology Co., in Sri City, Andhra Pradesh; and (right)
Josh Foulger, managing director of Foxconn India, at the company’s plant in Sriperumbudur, Tamil Nadu.
Foxconn’s plant employs almost 15,000
workers—about 90% of them women.
PHOTOGRAPHS BY BLOOMBERG
MARKETS AND FINANCE FRIDAY, 30 AUGUST 2019NEW DELHI 09
for the first time in the lastfour years. Foreign directinvestment (FDI) flows, whichaccount for a major share ofnon-bank finance to the com-mercial sector, increased by18.9%.
“On the other hand, short-term credit from abroaddeclined during the year as
improvement in the total flowof financial resources to thecommercial sector, rising4.2% on a year-on-year (y-o-y)basis.
Among foreign sources,external commercial borrow-ings (ECB) and foreign cur-rency convertible bonds(FCCB) recorded net inflows
Interest income rose 44.62% to₹1.06 trillion as on 30 June 2019,compared to ₹73,871 crore in theprevious year. Net interest incomefrom liquidity adjustment facility(LAF) and marginal standing facil-ity (MSF) operations—two mone-tary policy tools—stood at ₹1,181crore in 2018-19. This, the RBI said,was owing to an increase in netliquidity injection this year.
Meanwhile, the RBI’s balancesheet expanded 13.42% to ₹41 tril-lion in 2018-19. On the liability side,the increase was due to rise in notesissued, other liabilities and provi-sions, and deposits. According tothe latest figures, as on 16 Augustthe currency in circulation stood at₹21.98 trillion, against ₹19.42 tril-lion a year ago. This, according tothe central bank’s annual report, isindicative of key monetary varia-bles gradually reverting to pre-de-monetization levels.
The assets side increased due tothe increase in domestic and for-eign investments, and increase ingold holdings. Domestic assetsconstituted 28.03% of the totalassets, while foreign currencyassets and gold (including gold heldin India) constituted 71.97% of totalassets as on 30 June 2019, asagainst 23.18% and 76.82%, respec-tively, in the previous year.
This year, the RBI transferred₹1.76 trillion to the Centre, whichincludes ₹1.23 trillion of profit for2018-19 and ₹52,637 crore of excessprovisions identified as per the neweconomic capital framework.
Sensex cannot keep defying the drag of an economic slowdown
bit.ly/30HIcOd
RBI’s profit more than trebles in 2018-19 on lower expenses
Central bank’s contingency fund shrinks by over 15% based on Jalan panel’s new reserves transfer formula
“However, it is important tonote that trend growth has wit-nessed slight moderation since2016-17, contributed mainly bythe services sector, especiallytrade, hotels, transport, com-munication and broadcasting,and financial, real estate andprofessional services,” it said.
The delayed onset andskewed distribution of thesouth-west monsoon may posedownside risks to crop produc-tion and rural consumptiondemand, the report said, add-ing that this is evident in thesharp contraction in the salesof motorcycles and tractors.
The central bank has fore-cast India’s GDP to grow at6.9% for FY20—in the range of5.8-6.6% during the first half ofthe year and 7.3-7.5% in thesecond half.
The nature of the slowdown,RBI said, will determine thepolicy response—illustra-tively, a soft patch can belooked through, while a cycli-cal downswing will warrantcounter-cyclical actions interms of monetary and fiscal
FROM PAGE 1 least uniformly vulnerable toglobal shocks,” it said.
Macroeconomic outcomesin the first quarter of 2018seemed to indicate that theglobal economy was on anextended expansionary phase,it said.
According to the centralbank, another conduitthrough which trade wars andother sources of global spill-overs impacted India during2018-19 is the intertwining ofthe finance and confidencechannels.
“For countries like India,which traditionally run cur-rent account deficit, viableexternal financing can becomean additional consideration forholding adequate precaution-ary buffers. It is prudent tobear in mind the experience of2018-19 when a crude oil price-induced expansion in the cur-rent account deficit throughthe first three quarters of theyear was coincident with risk-averse portfolio outflows, war-ranting the use of reserves formeeting financing require-ments,” said RBI.
RBI: Revival of demand, investment priority
Central bank governor Shaktikanta Das. PTI
Rakesh Mohan, former RBI governor and vice chairman of the
Bimal Jalan committee. MINT
FIIs dump $2.19 billion Indian shares in worst sell-off in 10 monthsNasrin Sultana &
Ashwin Ramarathinam
MUMBAI
Foreign institutionalinvestors (FIIs) have soldIndian stocks worth $2.19
billion in August, their biggestsell-off in 10 months sinceOctober 2018, data showed.
This follows the July FII sell-off at $1.93 billion. In Octoberlast year, they were net sellersof Indian shares worth $3.75billion. Despite the exodus ofthe last two months, net for-eign institutional investmentfor the year so far is still posi-tive at $7.21 billion.
A host of events dented for-eign investors’ confidence,despite easy monetary policiesfollowed abroad, low and fall-ing interest rates globally, andlow political risks in India,according to Deepak Jasani,head of retail research, HDFCSecurities. “These include anincrease in the tax on superrich/foreign portfolio inves-tors (FPIs) in the Union budget,poor to mixed corporate earn-ings, overhang on economicgrowth locally, the US-Chinatrade war and itsexpected impacton global growth.These outflowscould continue aslong as the view ofFPIs on emergingeconomies is notsanguine andthey are not con-vinced about eco-nomic growth picking up inIndia over the next one-twoquarters,” said Jasani.
In the past two months, FPIshave sold Indian shares worthover $4 billion, while theywere net buyers of sharesworth $11.34 billion till June. InJuly, the Sensex and Nifty shed4.86% and 5.69%, respectively,while in August, both weredown over 1% each.
In the 5 July Union budget,the finance minister had pro-posed an increase in surchargeon income tax for the ultra-rich, a move that affected FPIsas well. Effective tax rates on
equities increased from 11.96%to 14.25% for long-term capitalgains, and from 17.94% to21.37% on short-term capitalgains. Short-term capital gainson derivatives and debt securi-ties were taxable at 42.74%.
The Centre has since with-drawn the additional sur-charge. However, in the lastthree days since the rollback,FIIs were still net sellers ofIndian shares worth $421.82million. “This step by the gov-ernment is positive, in our
v i e w , a s i treverses the sur-charge tax on theFPI announced inthe budget. Thisis likely, in ourview, to reversethe significant FIIselling witnessedp o s t - b u d g e t , ”said Nomura in a
note on 26 August.Meanwhile, FIIs are still
buying Indian debt, scoopingup $1.4 billion in August and$1.2 billion in July. “Indian debtspace (especially sovereignbonds) remained attractivegiven the soft interest rates glo-bally and trend of falling rateslocally. Government bondsoffer higher liquidity, easyentry and exits and sensitivityto rate falls. Further, the FPIinvestment limit was raised forFY20 to 6% of outstandingissuance of government bonds,from 5.5% in FY19,” Jasani said.
However, in this year so far, foreign
institutional investment into Indian equities is
still positive at $7.21 billion
policies, but a structural slow-down will need deep-seatedreforms.
The annualreport pointedout that through-out the year, pro-tectionist policyp r o n o u n c e -m e n t s a n dactions domi-nated the globalpolitical arena.
According tothe central bank, these dealt abody blow to world trade,roiled financial markets and
posed risks to macroeconomicprospects of several econo-mies, advanced and emerging
alike, that havesought to employthe engine oftrade to integrateinto the globaleconomy.
“They alsofuelled an ani-mated debate onthe end of globali-zation. Yet, the
unfolding of events during theyear demonstrated that theworld remains coupled, or at
RBI, which has cut interest rates by
110 basis points in 2019, signalled the
possibility of at least one more
rate cut this year
Total expenditure fell 39.7% y-o-y to ₹17,045 crore, primarily due to its decision of not making any provision for
its contingency fund this year. ANIRUDDHA CHOWDHURY/MINT
Gopika Gopakumar
MUMBAI
The Reserve Bank of India(RBI) and the govern-ment are in complete
agreement on the new eco-nomic capital framework (ECF)recommended by the commit-tee headed by former RBI gov-ernor Bimal Jalan, said RakeshMohan, vice chairman of thecommittee.
In an email interview,Mohan, also a former RBI dep-uty governor, saidit wouldn’t be agood idea to enterinto a formal legalcontract with thegovernment on the new ECF.
The committee has fixedthe contingency fundlevel at 5.5-6.5% of thecentral bank’s balancesheet. Can this be sancti-fied through a contractwith the government, likein the case of inflation tar-geting, to avoid futuremisuse?I don’t think that would be a
good idea. As of now, there is complete agree-ment between both the RBI and the government in accepting the Jalan committee’sr e c o m m e n d a -tions. I am not aware of any res-ervations on the subject. I don’t think that it is a good idea to introduce such rigidity throughlegislation into the system. There must be a degree of trustand cooperation between the central bank of the country andthe government.
Does the new economiccapital framework makethe monetary policy sub-servient to fiscal policy?No. There is no reason to
believe that. That used to be thecase when there was automaticmonetization of government borrowing: The FRBM Act (Fis-cal Responsibility and Budget Management Act, 2003) pro-hibits that. Profit transfers do not impact the practice of mon-etary policy. As the governmentspends the transferred resour-ces, there will be an expansion of liquidity in the system whichwill be dealt with in the normalfashion through the operation of the RBI’s normal liquidity management.
Does the ECF lead to the
RBI being more vulnera-ble, especially in case of ablack swan event?As you would see in reading
the report in some detail, the calculations made to arrive at the desirable magnitude of the contingency risk buffer, and thedesirable magnitude of the revaluation reserves, took into account relatively extreme probabilities. Of course, as was seen in Europe and North America in 2008, a real black swan event can certainly be beyond any known unknown.
Central banksthen have to inno-vate and operate asnecessary. Ibelieve that the
RBI has the capacity to cope with such eventualities. As wasobserved in the North Atlantic financial crisis, central banks and governments worked veryclosely during that crisis epi-sode. Hence, it is necessary for the central bank and the gov-ernment to have an appropriateunderstanding of their respec-tive roles, particularly if a blackswan event occurs.
What will be the implica-tions of thetransfer of theRBI’s reserveson the monetarypolicy? Will itimpact the RBI’sflexibility inc o n d u c t i n gmonetary pol-icy?
There are noimplications for monetary pol-icy as a consequence of the transfer made by the RBI to thegovernment. The RBI is required to transfer all its sur-plus to the government every year. So, this is a normal proce-dure and, hence, there are no implications for monetary pol-icy.
The only difference is thatthe magnitude of the transfer ismuch higher this year. And, of course, there is the addition of transfer of excess reserves.
Does this set a precedentfor the government toraid the RBI’s balancesheet in future?With the acceptance of the
Jalan report there is no “raid” onthe RBI’s balance sheet. Hence,there is no question of any prec-edent being set in this regard. That would have been the casehad the government accepted Arvind Subramanian’s calcula-tion of the RBI’s excess reservesof ₹4.5-7 trillion.
RBI aligned with govt on economic capital framework: Mohan
‘There are no implications for monetary policy
as a consequence of the transfer
made by the RBI to the Centre.’
mint
INTERVIEW
FII flows (in $ bn)
Source: NSDL
Oct 2018 28 Aug 2019
-2.19
Foreign institutional investors were net sellers of Indian equities worth $2.19 billion this month.
In flight mode
-3.75-6
-4
-2
0
2
4
6
8
SARVESH KUMAR SHARMA/MINT
Gopika Gopakumar &
Shayan Ghosh
MUMBAI
Reserve Bank of India’s(RBI) profit for 2018-19more than trebles to₹1.76 trillion owing tolower expenditure and
higher other income, which hasenabled a higher surplus transfer tothe government. On the otherhand, the contingency fund, thecentral bank’s war chest for coun-tering exchange and interest ratevolatility, has shrunk by over 15%because of the new reserves trans-fer formula devised by the BimalJalan committee.
The RBI’s total expendituredeclined 39.7% year-on-year (y-o-y)to ₹17,045 crore, primarily due to itsdecision of not making any provi-sion for its contingency fund this year. The RBI accounts for provi-sions as part of its expenditure.
Simultaneously, other incomerose nearly 20 times on a y-o-y basisto ₹86,199 crore after the centralbank wrote back excessprovisions from balancesheet to the profit and lossaccount. This was after theRBI’s central board hadaccepted the new eco-nomic capital frameworkprescribed by the Jalancommittee report, whichrecommended transferring excessprovisions of ₹52,637 crore to thegovernment. Consequently, thecontingency fund—a reserve cre-
ated for meeting unexpected andunforeseen risks and contingen-cies, including depreciation in thevalue of securities or risks arising
out of monetary/exchange rate pol-icy operations—shrunk to ₹1.96trillion in 2018-19 from ₹2.32 tril-lion in the previous fiscal year.
During the year, the central bankalso made gains of ₹29,143 crorefrom foreign exchange transac-tions, of which ₹21,464 crore was
due to the impact of using theweighted average cost method ofcomputing the exchange gain. Thismethod was used for the first time
in 2018-19 to smoothen the uneveninflows during the year.
The RBI earned an additional₹36,000 crore from open market
operations (OMOs) thisyear over FY18. Accordingto a report by India Ratingsand Research, the surplusin banking system liquidity(approximately ₹1 trillion)has been driven by theRBI’s continued OMOs,aggregating₹3.5 trillion in
the 12 months ended 31 July, the forex swap window that brought inapproximately ₹70,000 crore of foreign capital.
BANKING ON EARNINGS
THE central bank’s total expenditure declined 39.7% year-on-year to ₹17,045 crore
THE RBI’S other income rose nearly 20 times to ₹86,199 crore on a year-on-year basis
THE contingency fund shrank to ₹1.96 trillion in 2018-19 from ₹2.32 trillion in the previous fiscal year
THE central bank transferred ₹1.76 trillion to the Centre, which includes ₹1.23 tn of profit for FY19
bank, the monetary aggre-gates and the behaviouralratios pointed to underlyingeconomic activity gainingresilience, although it isimportant to note that thisimprovement is set against the
backdrop of aslowdown thatbegan since2010-11.
“Progress incapitalisation andinitiatives toresolve stressedassets facilitatedhigher credit off-take from public
sector banks (PSBs). Sector-wise, sustained growth ofcredit to services along withrestarting of industrial creditflows was the notable featureof the steady improvement inthe appetite of banks to lendduring 2018-19,” said the cen-tral bank.
import growth decelerated.During Q1 of 2019-20, non-food credit maintained dou-ble-digit growth on a y-o-ybasis as in the previous year.Sector-wise, credit to both‘agriculture & allied activities’and ‘industry’accelerated to8.7% (6.5% lastyear) and 6.4%(0.9% last year)r e s p e c t i v e l y ,while credit tothe services sec-tor moderated to13.0% (23.3% lastyear) in June2019.”
“It is noteworthy that creditgrowth to infrastructure sec-tor recovered sharply to 15.2%in June 2019 mainly due tostrong credit flow to power,telecommunications androads sectors,” the report said.
According to the central
banking financial companies(NBFCs), net credit by housingfinance companies, net issu-ance of commercial papers(CPs) subscribed to, by non-banks and public issues bynon-financial entities, amongothers.
Moreover, lower issuancesof debt and equity instru-ments by non-financial enti-ties and lower investment byLife Insurance Corporation ofIndia (LIC) in corporate debt,infrastructure and social sec-tor resulted in a decline infinancial flows in 2018-19 fromthe year-ago levels, said RBI.
“In contrast, there was asharp increase in commercialpaper issuances, coupled withhigher accommodation byfour all India financial institu-tions (AIFIs) regulated by theRBI,” it added.
The central bank said thatin 2018-19 there was an
Shayan Ghosh
MUMBAI
While credit flow fromnon-banks declined19.4% in fiscal year
2018-19 (FY19), flows frombanking sources rose 44% dur-ing the period to meet thefinancing requirements of thecommercial sector, theReserve Bank of India (RBI)said in its 2018-19 annualreport.
“The decline in flows fromnon-banks was mainly onaccount of lower flows fromnon-deposit-taking systemi-cally important NBFCs (net ofbank credit to NBFCs) andhousing finance companies,particularly in the aftermath ofthe IL&FS event,” it added.
Non-banking sourcesinclude systemically impor-tant non-deposit-taking non-
Non-bank credit flow fell 19.4% in FY19, says central bank
The decline in flows from non-banks was mainly on account of
lower flows from NBFCs hit by the IL&FS crisis, the RBI said.
In FY19, the total flow of financial resources to the
commercial sector rose 4.2% y-o-y, the central
bank said
ANIRUDDHA CHOWDHURY/MINT
10 FRIDAY, 30 AUGUST 2019
NEW DELHI
merizing samba. In recent decades, Brazilhas emerged on the world stage as an eco-nomic powerhouse with important role inglobal affairs, including climate issues.
But the blaze in the Amazon, whichabsorbs 25% of the 2.4 billion tonnes ofcarbon removed from the atmosphereevery year, has tarnished Brazil’s positiveimage as millions around the world see thedestruction of the rainforest as a crimeagainst humanity. With Bolsonaro doingnothing but spitting provocative words,millions came out on the streets of Braziland in world capitals to protests againsthis mining, lumbering and land-grabbingpolicies. The eco-warriors ExtinctionRebellion (XR) organized protests in frontof Brazilian embassies in various coun-tries. In front of the Brazilian Embassy inLondon, protesters chanted, “Hey hey, hoho, Bolsonaro’s got to go!”
Foreign policy experts see this as theworst image crisis faced by the country in50 years. “Brazil’s image as a responsibleactor on international relations wasalready cast into doubt by Bolsonaro’serratic behaviour and it has sufferedimmensely just in one week because of thefires in the Amazon and the government’sdelayed response to the crisis as well asbecause of the president’s irresponsiblerhetoric,” says Adriana Abdenur, a leadingBrazilain social scientist based in Rio deJaneiro.
AGGRESSION AS DEFENCE
Those who know the Brazilian Presi-dent say that he is not the one to ever
shy away from a nasty fight. At the G7meeting, as Macron called Bolsonaro a“liar” for failing to meet the environmen-tal commitments he had promised to atthe G20 summit in June. In his DonaldTrump-like style, the Brazilian respondedon social media by mocking the Frenchfirst lady. Soon, the personal insults mor-phed into the issue of national sovereigntyas Macron suggested an internationalagency to take control of the Amazon.That touched a raw nerve.
Going back decades, the Brazilians,especially its military circles, have feareda foreign intervention in its rainforest forits riches. In the 1990s, Bolsonaro, aformer army captain who became a Con-gressman, often accused the US of plan-ning a military invasion of the Brazilianrainforest. As Macron resurrected an oldghost last week, Bolsonaro rejected theproposed aid of $20 million from the G7leaders unless the French apologized for“challenging” Brazilian sovereignty.
Bolsonaro might have rallied some sup-port among the Brazilians on the question
of sovereignty but his rejection ofMacron’s aid offer has largely been criti-cized. His government has also declinedassistance which pose no threat to Brazil’ssovereignty. The Amazon Fund, a pro-gramme for preserving the rainforest,which has so far received $1.3 billion ingrants, mainly from Norway and Ger-many, was shut down recently by the Bol-sonaro government. “It is an absolutelymistaken reaction. Brazil is going througha fiscal crisis. In fact, the president said lastweek that the government had no moneyfor anything,” says Capobianco.
FOR GREED’S SAKE
When he was running for presidentin last year’s election, Jair Bolson-
aro was an unknown quantity for themajority of Brazilians. Despite being amember of parliament for almost 30years, he cleverly positioned himself as an“outsider” who would “bust” corruption,provide a “clean” government and make“business friendly” policies. Then in themiddle of his campaign, run aggressivelyon WhatsApp, Bolsonaro got knifed by amentally-unstable person, landed in hos-pital and emerged victorious.
As man-made fires scorch the biggest rainforest, Brazil’s Bolsonaro continues to defy climate change concerns
HOW ONE MAN IS
KILLING THE AMAZON
REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE
mint
SHORTSTORY
The Amazon is on fire. In just three weeks, more than 74,000 hectares of forest land has been lost to raging blazes in seven of the nine states that share the
Brazilian part of the rainforest.
WHAT
Brazil’s President Jair Bolsonaro first ignored the fires completely,
and then got into a war of words with world leaders,
portraying the backlash as an attack on Brazil’s sovereignty.
BUT
Having enraged the world by letting the destruction of the largest rainforest continue unchecked, the Brazilian
government now may try to delay the proof of these crimes.
NOW
Shobhan Saxena & Florencia Costa
SAO PAULO
In the dense forests of north Brazil, thetree cover is thick like a green carpetsprawled over an endless earth, rivu-lets snake through the creeks and dropinto huge rivers, birds sing during the
day and winds whistle at night, and wis-dom is passed from one generation toother through ancient sayings. One ofsuch indigenous maxims is about how toprotect the forest from any harm. “Oneshould never say bad things or do evildeeds or make offences so that the forestdoes not catch fire,” goes the saying, whichis shared among the tribes living in theAmazon rainforest for thousands of years.They have known forever that their wordsand action can fuel a fire in the forests.
Now, the worst fears of these ancientpeople have come true as harsh words andreckless deeds are pushing the rainforestto a tipping point. The Amazon is on fire,literally: leaping blazes are eating trees,sending up thick plumes of smoke, cover-ing the rivers with soot, making animalsrun for cover, and pushing hundreds oftribes deep inside the forests. In just threeweeks, more than 74,000 hectares of for-est land has been lost to raging blazes,which are burning in seven of the ninestates that share the Brazilian part of theworld’s biggest rainforest. As of today, apall of haze sits over 3.2 million squarekilometres (sq. km), equal to the area ofIndia, across South America.
But even in such a catastrophic sce-nario, the response of Brazilian govern-ment, led by its far-right President JairBolsonaro, has been largely erratic.
A STATE OF DENIAL
The first fires of thisyear started on 10
August. Despite enoughevidence that criminalswere setting the fire, theBolsonaro regime nei-ther acknowledged noracted on it. The govern-ment blamed it onnature, calling it an“annual occurrence”. Even after thesmoke from some 26,000 scattered firesdarkened the sky over Sao Paulo, which ismore than 3,000 km from the Amazonregion, on 19 August, the governmentstayed in a denial mode.
But the world was becoming aware ofthe unfolding disaster. On 22 August, atthe onset of the G7 conference, FrenchPresident Emmanuel Macron tweeted:“Our house is burning. Literally…It is an
international crisis… Members of the G7Summit, let’s discuss this emergency firstorder in two days!” On the eve of the G7leaders discussing the Amazon issue, Bol-sonaro was watching a stand-up comedyshow in Brasilia.
Since coming to power in January, Bol-sonaro has treated environmental issueslike a joke. He has also fuelled the fireswith his words and policies. During hispoll campaign, he repeatedly attacked thecountry’s scientists, environmental agen-cies and non-governmental organiza-tions. After assuming the presidency, hepacked his cabinet with a clutch of cli-mate-change deniers. Brazil’s foreignminister Ernesto Araújo is on record say-ing that he does not believe in globalwarming. Environment minister RicardoSalles has been dubbed by analysts as“deforestation minister”. In early August,as forest fires began to dominate head-lines, Bolsonaro responded by attackingthe media for spreading “fake news”. Thenhe fired the chief of the country’s satellitemonitoring agency for pointing out aspike of 278% in deforestation in July.
Such actions have stunned the experts,who say the fires in the Amazon are causedby humans. Usually, according to experts,the area is deforested and then set on fireto “clear” it and, later, turn into a crop orgrazing land. “The government demobil-ized the apparatus to combat deforesta-tion, and the statements of the presidentclearly signalled that the government’sposition was quite relaxed for supervi-sion,” says Joao Paulo Capobianco, anAmazon specialist who worked with theministry of environment between 2003and 2008. “To make it worse, the govern-
ment showed support tothose indulging indestructive actions. Theconsequence of thisapproach was theincrease in deforesta-tion,” says the expertwho once coordinatedthe Deforestation Pre-vention and ControlPlan.
With the fires ragingand a haze moving towards Argentina andUruguay in the south, in a matter of days,Brazil suddenly became a green villain.
A BATTERED IMAGE
Barring its football rivalry with Argen-tina, this country has no enemies.
Brazil does not have a border dispute withany of the 10 countries it shares a frontierwith. In the eyes of the world, Brazil hasbeen a land of magical football and mes-
Bolsonaro has treated
environmental issues like a
joke. After assuming the
presidency, he packed his
cabinet with a clutch of
climate-change deniers
As the new president of Brazil, one ofhis first international engagements was atthe World Economic Forum in January atDavos, where Bolsonaro was revealed asthe great new hope for Brazil. Making apresentation on “We Are Building a NewBrazil”, Bolsonaro told the global elite thathe was going to open Brazil for business,including agriculture and mining in theworld’s largest rainforest.
Since then Bolsonaro has constantlyattacked the laws which protect the landreserved for indigenous communities andcalled for mineral exploration in theseareas. Recently, he openly said he hasnominated his third son Eduardo to beBrazil’s ambassador in Washingtonbecause that “will help Brazil do business”with the US mining firms. “I am lookingfor the “first world” to explore these areasin partnership. That’s why I want a trustedperson of mine at the embassy in the US,”Bolsonaro said, adding that it was“absurd” that huge areas with mineralswere reserved for the Amazon tribes.
Though it is not a secret that US miningcompanies are taking huge interests in theBrazilian rainforest, the investigative siteThe Intercept released some documentsthis week revealing that such “interests arebeing pushed in the US by Republican lob-byists, friendly with President Trump’sadministration, who entered into talkswith the Brazilian government to promotecorporate investment in the Amazon”. Nowonder that during the past one week, asworld leaders and millennial crowds wereup in the arms against Bolsonaro’s poli-cies, Trump kept mum. The US Presidentspoke only on 27 August, when he posteda tweet stating that Bolsonaro and Brazilhave “complete supportfrom the United States”.
Despite the backing ofTrump, the BrazilianPresident has failed tokick-start the country’sstalled economy. Withhis popularity fallingsharply in just eightmonths, Bolsonaro isnow desperately lookingfor ways to turbochargegrowth, even if it comes at the cost of theplanet’s climate. But that won’t be easy.Brazil is already facing a backlash, espe-cially from Europe where the summer isgetting unbearably hotter every year. OnWednesday, 18 major international fash-ion brands suspended the purchase ofBrazilian leather because of the Amazonfires. France and Ireland have threatenedto boycott the European Union’s (EU’s)long-pending trade agreement with Brazil
if the rainforest continues to burn.The tough stand taken by the Europe-
ans has now triggered panic among theagricultural producers who fear a boycottof Brazilian products by consumersaround the world. The EU is the second-largest buyer of Brazilian agribusiness,having been the destination of 17.6% of thesector’s exports this year, which gener-ated $9.9 billion until July. Finland, whichholds the rotating presidency of the EU,even considered the idea that the blocwould ban imports of Brazilian beef.
Such boycotts can break the back ofBrazilian economy. Aware of this danger,Ricardo Santin, chief executive of Brazil-ian Association of Animal Protein,strongly defends Brazilian agrobusiness.“The Brazilian agrobusiness is a highlysustainable and very respected because ofthe high level of standards. Brazil is a sus-tainable country where 66.3% of thenative forest is preserved. We are againstdeforestation. Those who destroy the for-ests are criminals,” says Santin.
IN CONCLUSION
After days of trading insults with worldleaders and haggling over the pro-
posed aid, the government finally dis-patched its aircraft and troops on Saturdayto control the fires in the country’s north-ern region. On Monday, the governmentwas already claiming success, with defenceminister saying the “situation is undercontrol and already cooling down nicely”.
But experts are highly sceptical of suchclaims. Capobianco, the Amazon special-ist, feels the worst is not over yet. Actually,it is yet to come. According to Capobianco,as the fires are still burning, the real horror
will be revealed in thefinal data that will comeout in October andNovember. “The Bol-sonaro government willmost likely try to delaythe release of officialdata. The Brazilian offi-cial data are always com-pleted by the beginningof November to be ana-lyzed at the Climate
Conference in November. Probably thegovernment will seek to prevent such offi-cial data from being disclosed,” says Capo-bianco.
The Bolsonaro government has alreadydenied the ongoing destruction of theAmazon. Now, it may try to delay the proofof these crimes.
[email protected] Saxena and Florencia Costa are
journalists based in Brazil.
It’s no secret US mining firms
are taking a huge interest in the
Amazon and reports say such
interests are being pushed in
the US by lobbyists friendly
with the Trump administration
REUTERS
Despite enough evidence that
criminals were setting the Amazon
forests on fire, the Jair Bolsonaro
(inset) regime neither acknowledged
the problem nor acted on it. AP
E X C L U S I V E
FROM THE AMAZON
m
12 FRIDAY, 30 AUGUST 2019NEW DELHI GLOBAL
3D printing allows users to create anything from flower pots to low-cost prototypes of parts
Should you invest in a 3D printer for your home yet?
printed,” points out Shibu John, secretary general andfounder, 3D Printing Education and Research Associa-tion.
3D printers for home users are a lot smaller in size(since they need to fit on a desk) and easier to operate,compared to their larger counterparts that are used in
automotive and manufacturing.Most of these desktop 3D printersuse fused deposition modelling(FDM) 3D technology (also knownas FFF or fused filament fragmen-tation) as it costs less. This type of aprinter melts a plastic filament andthen positions it layer by layer(hence the word additive), oneabove the other to form the finalobject. According to Formlabs,FDM printers are best for basicproof of concept model or low-costprototypes of parts. They havelower resolution and may not giveaccurate results when printingobjects with complex design orintricate features, which will needthe more expensive SelectiveLaser Sintering (SLS) printers.
“They (SLS) can cost over ₹1crore. Although there are somedesktop versions of SLS that cost
less, but they are not as user-friendly as the industrialones,” says Swapnil Sansare, CEO and founder, DivideBy Zero, a 3D printer manufacturer. A desktop SLSprinter can cost around ₹3 lakh and can print multipleobjects in a single day. SLS printers use laser to fusesmall particles of polymer powder and create objectswith complex structures and patterns. People spending
Abhijit Ahaskar
NEW DELHI
Amitt Sharma, 26, a Delhi-based entrepre-neur, has been working on various 3Dprinting projects as ahobby since the pastfour years. He has
used his open-source 3D printerto make sculptures, utility itemslike pen stands and other person-alized gift items, and even anenclosure for his Raspberry Pi(tiny desktop computer).
Sharma belongs to a new cropof young users who are takingadvantage of desktop 3D printersto create things they want, insteadof spending money on buyingthem or getting them manufac-tured. According to Sharma, tomake anything using plastic ear-lier, he had to go to a manufac-turer who would charge him anexorbitant amount. Now he cando it at a lower price, from withinthe comfort of his home in a mat-ter of hours.
“A 3D printer can be a utility product to print cus-tomized tools, which may not be found in a shop due tochange of products and shortage. It can be a creativeway to enhance a child’s creativity in designing some-thing and then printing it for usage. It can be used fordecorative items like a flower pot, chandelier, interiors,fixing handles or any missing part that needs to be
FlashForge Adventurer 3 (₹39,999): FDM technology, 150x150x150mm build space, FlashPrint software, Windows and Mac OS, enclosed printing
Da Vinci Mini Maker 3D Printer (₹36,605): FFF technol-ogy, 150x150x150mm build space, XYZware software, Win-dows and Mac OS, open printing
Geeetech E180 (₹24,999) – FDM technology, 130x130x130mm build space, easy print 3D software, Win-dows OS, open printing
Home-friendly 3D printers
TECH @YOU
TE
CH
CE
TE
RA
MORE GIANT-SCREEN TVS ARE COMING
Sharp is planning to unveil a 120-inch LCD screen with
8K resolution (7680 × 4320) and 5G connectivity at the IFA2019 tech event in Berlin.
SMART ELECTRIC BIKE THAT STARTS WITH VOICE
Revolt Intellicorp’s RV400 electric bike can cover 150km on a full charge. Its connected helmet allows users to start the bike using a voice command.
MICROSOFT’S 2ND GEN HOLOLENS Microsoft’s upcoming mixed reality headset HoloLens 2 will be available from September at $3,500. It has a wider field of view and sports retina tracking capability.
is the totalincrease inransomwaresamples in the
first quarter of 2019 with 504 new threats every minute, claims McAfee Labs’ latest Threat report.
EXPLORING TAJ MAHAL THROUGH AR
Snapchat Lens now offers augmented reality (AR) experience around Gateway of India and Taj Mahal. Users can access them by pointing the Lens camera towards the monuments on site.
118%
whether humanoids can go beyond theindustrial world to become part of ourpersonal lives. The Japanese govern-ment has moved in early on this possibil-ity, and is funding the development ofcare robots for the elderly. Tokyo’s Shin-tomi nursing home already deploys 20types of robots for such care.
Mass production of social robots.The Akin Robotics factory in Turkey
has already begun mass production ofhumanoids. At the CES 2019 trade show,Samsung unveiled a few robots for per-sonal use. One of them—Bot Care—ena-bles users to check their blood pressure,heart rate and sleep patterns. It alsoreminds them to take medications,
Latest smart displays, speakers in India
GOOGLE NEST HUB ₹9,999
The Nest Hub has a 7-inch touchscreen, supports Google Assistant and can be used as a hub to control connected devices from various other brands. It can also be used to make video calls and watch videos.
While smart speakers have been doing the rounds in India for a while now, it seems companies have started focusing on smart displays too. Here’s what you can buy.
AMAZON ECHO SHOW 5 ₹8,999
The Echo Show 5 has a 5.5-inch touch display, is powered by Amazon’s Alexa voice assistant, can play music and videos and can be used to make hands-
free videocalls toother Echosmartscreendevices.
LENOVO SMART CLOCK AND SMART DISPLAY ₹5,999 and ₹14,999
The vertical box-shaped Smart Clock has a 4-inch display while the Smart Display has a massive 10-inch screen. Both have in-built speakersand support voice control via the Google Assistant.
SONY SRS-XB402 ₹24,990
The cylindrical shaped SRS-XB402 has a water and dust-proof exterior. It supports Amazon’s Alexa and can recog-nize voice commandsfrom a distance. It also works wirelesslyand lasts up to 12 hours in one go.
ISTOCKPHOTO
Keshav Murugesh
In July 2017, two robots, Sophia andHan, made history. At the RISE tech-nology conference in Hong Kong,
they went on stage to “debate” thefuture of humanity with each other. Inthe course of the debate, they crackedjokes, talked about drone armies takingover the world, discussed ethics inrobots and humans, and if it was betterto be rich or famous. Sophia was furtherintroduced at the United Nations andwas even granted Saudi Arabian citizen-ship. She is the first humanoid robot tohave a nationality.
To say that we have come a long waywith humanoids is a colossal understate-ment. Advances in artificial intelligence(AI), machine learning (ML) and naturallanguage processing (NLP) have ena-bled humans to create humanoid newsanchors, psychologists, personal assist-ants, and more. While we are yet to seea fully-functional humanoid robotbecome mainstream, the day is not faraway.
The question “man or machine?” hasbeen replaced with “man and machine”.The interesting possibility, however, is
alerts family members in case of emer-gencies. Bot Air assesses air quality andtakes remedial measures. Bot Retailoffers support to customers while shop-ping. The GEMS (Gait Enhancing andMotivating System) exoskeleton sup-ports people who have trouble walking,running or standing up, and preventsoverworking of their muscles. In addi-tion, non-humanoid social robots arecrossing the experimentalstage to mass production.MiRo is one of the world’sfirst robots that has a brain-inspired biomimetic oper-ating system. Piaggio’s Gitais a cargo bot that can beused as an autonomousshopping trolley
Can social robotsinfluence humanbehaviour?
An intriguing question thus arises—how will humanoids impact us? Howcan we handle the fair and dark aspectsof their evolution? As we move past thequestions of “can we make friends witha social robot?” a greater ethicaldilemma raises its head.
Research strongly indicates that ashumans we can be influenced by robots,
much like we are by fellow humans.True, we develop robots with ourknowledge and mastery over the humanmind. But what is the impact they canhave on our cognitive processes whenwe interact with them closely?
The recent instance of Facebook hav-ing to shut down its AI engine (after itwas found it had developed its own lan-guage that could not be understood by
humans) does venture intothe grayer and darker sideof AI. At what point in ourinteraction with them willwe subconsciously shiftfrom regarding them asmere humanoid socialagents to being “one of us’?
Interesting food forthought, no doubt. If theevolution of the mobile
phone to smartphone can bring aboutsuch a radical change in our everydaylife, how much more, and how muchquicker can social robots shift societalparadigms? How should we prepareourselves to meet the AI and socialrobotics revolution ?
Keshav Murugesh is group CEO atWNS Global Services and chairman atNASSCOM .
SOCIAL ROBOTICS WILL BRING ABOUT A REVOLUTION
Research strongly indicates that, as humans, we can be influenced by
robots—much like we are by
fellow humans
ISTOCKPHOTO
on 3D Printers for home use are almost negligible innumber and more awareness is needed, rues Sansare.He adds: “Before believing it will reach every home, weneed to work on our education system. If it turns out tobe the part of our education system then things willchange in the next five years.”
John points out that currently many schoolshave installed 3D printers for projects and, withtime, it can be a good device for homes as well.
Cost of ownership for an FDM desktop 3Dprinter is a lot cheaper compared to an SLSprinter. A do-it-yourself FDM printer, which canprint small objects, starts from ₹18,000. The oneswith bed size of 200 x 200 mm and which canprint larger objects can cost from ₹50,000 to over₹2-3 lakh. The price is based on size, speed,microns, precision, design and machine body. APolylactic acid (PLA) filament, used in FDM print-ers, with a diameter of 1.75mm and length of 300metres costs around ₹1,000. One can use anythird-party filament with an FDM printer. Han-dling the FDM printer is also easier than SLSprinters. “Also, a portable lightweight machinecan be handled by a child, but needs to be super-vised by an elder. In most cases, the machine isclosed from all sides, but some 3D machines areopen,” cautions John.
Sharma notes that you don’t need to know 3Ddesign for manufacturing products at home.There are plenty of free models that one candownload and print from platforms such as Thin-giverse. Clearly, the 3D printing landscape hasmatured enough to let users with the creativestreak manufacture things from within the com-fort of their study, garage or living room withoutsplurging too much money.
Prasid Banerjee
NEW DELHI
Often called the “everything phone”,the Galaxy Note line is by far thecrown jewel in Samsung’s smart-
phone portfolio. The device can boast of alegitimate fan-base for Note devices, akin toApple’s iPhones. However, Samsung hasfound it just as difficult to keep up theyearly update cycle as any othercompany.
The Galaxy Note 10 Plusbrings Samsung’s newdesign language to the Notebut it doesn’t change toomuch from last year’s Note.Now there are buttons onthe left side of the deviceonly, which might proveinconvenient for long time Noteusers who are used to the lock buttonbeing on the right.
As it was with Samsung’s lastthree flagships, the Note 10Plus has an excellent dis-play—ahead of Apple, Goo-gle, OnePlus, or prettymuch anyone else. The factthat it’s a huge 6.8-inchbezel-less display makes it allthe more attractive.
The Indian variant of thesmartphone runs on Samsung’sin-house Exynos 9825 chipset, whichkeeps up with its international QualcommSnapdragon 855 variant. You might findbenchmark tests that place the Exynosslightly behind the Snapdragon version, butit really makes no difference for regularusage. In fact, this is easily the fastest Sam-sung smartphone we have ever used, thoughit doesn’t feel as fast as the considerably
cheaper OnePlus 7 Pro.On the flip side, the cameras remain the
same. If you’ve liked Samsung’s camera so far,you will like this one too. It produces slightlyoversaturated photos, really bright low lightimages that lack details and focuses really fast.However, if you put this against a Pixel 3 orHuawei P30 Pro, the Galaxy Note 10 is at bestthe third-best camera phone among theseflagship devices.
For one, the Galaxy Note 10 Plus isweak (with respect to flagship
class devices) in indoor fluores-cent lights. It softens detailsand loses sharpness in suchconditions. The Note 10Plus also has limited capa-bilities in its bokeh mode,
which blurs the backgroundbut is nowhere close to the
iPhone’s capabilities. If thecamera is paramount for you, the
Google Pixel 3 and Huawei P30 Proare the ones to go for.
You can also control the Note10 Plus’ camera through ges-
ture controls (using theS-Pen), and the good thing isthat they do work. They’reuseful when you have thephone propped on a tripod
or are clicking a group selfiewith the phone placed some-
where. These gesture controlalso work with some other apps.
While widespread support will dependon third party developers, it makes the S-Penslightly more useful for those who don’t needthe writing part of its utility. That said, thegestures need much more depth for the S-Pento really be a remote for the Note 10.
You could question the removal of theheadphone jack too, but with more audiocompanies moving towards wireless head-
phones and speakers, thefuture of audio is certainlywireless, and Samsung can’tbe blamed for followingindustry trends or cuttingcosts.
In sum, the Galaxy Note 10Plus is certainly Samsung’sbest smartphone today. But itis not a real upgrade to lastyear’s device. It’s an upgrade
for those who have two-year-old Galaxy Notes.That said, for anyonelooking for an Androidflagship, the GalaxyNote 10 Plus is cer-tainly worth consid-ering. It is the mostpremium Androidphone today. It’sfast, has good bat-tery life and hasvery few weaknesses.
Samsung Galaxy Note 10 Plus: Just short of being the best Android phone you can buy
PROS Fast, zippy performance
Premium design and feel
Good battery life
Excellent for video recording
CONS
Lock button on the left takes some getting used to
S-Pen gestures need more depth
Body is prone to smudges and fingerprints
Quite expensive
STARTS at ₹79,999
FRIDAY, 30 AUGUST 2019NEW DELHI 13
EXCLUSIVE FROM
Latha Venkatesh,
Sonia Shenoy & Anuj Singhal
CNBC-TV18
There is a golden opportu-nity for India to benefitfrom manufacturing
shifting from China andWednesday’s policy announce-ment is the first big step by thenew government to tap intothat, says Gautam Chhaoch-haria, managing director andhead of India research, UBSSecurities. Edited excerpts ofan interview:
What are your thoughtso n t h e p i e c e m e a lannouncements that wehave seen from the gov-ernment so far and do youthink there could bemore in the future?Wednesday’s move is part of
the series of announcementsthat the government and theReserve Bank of India (RBI) hasbeen making, in our viewbreaking the negative feedbackloop that the economy has beenseeing over last 3-4 months,including of narrative.
So it is also in that contextbut more structurally and fun-damentally in our view we havewritten about how there is agolden opportunity for India tobenefit from manufacturingshifting from China and yester-day’s policy is the first big stepby the new government to tapinto that.
The mix of contract manu-facturing 100% FDI and relax-ing norms for single brandretail, I think that could in itselfgo a long way in making it eas-
Latha Venkatesh & Sonia Shenoy
CNBC-TV18
The demand in the sector hasnot picked up as yet and we arein a wait and watch mode, saysDilip G. Piramal, chairman,VIP Industries. Edited
excerpts of an interview:Will this single brand retail com-ing in or contract manufacturingcoming in in a big way mean morecompetition for you at all?No, I do not think so at all because lug-
gage is a very narrow segment. There arenot so many players. So I do not think thatis going to have any impact.
What about demand? The lasttime we spoke with you, you hadindicated that there was definitelysome demand softening. Havethings improved?We are part of the economy and so if
things improve for the economy, theywill improve for us. For us, now it is a waitand see situation. Our first quarter wasrelatively okay. We had 11% growth,though last year in the same quarter wehad 27% growth.
However, generally people felt thateven this 11% growth in the current cir-cumstances is quite good. So, we are nowwatching. August and September are tra-ditionally the weakest months in theentire year. So, let us see.
The renminbi just refuses toreverse. It is a weakening that hasbegun for the last eight weeks orso and today a dollar costs 7.16 ren-minbi. I guess it is a historic low.Does that make life easier for youat all?Yes definitely it helps. But I am quite
surprised, when the renminbi sort ofchanges by 3% or 4% which happens
once in a year, we get so excited, whereasthe rupee has lost ₹2 to the dollar in thelast two months and that is 3%. So allthese things happen, but anyway it is agood trend for us.
Does it make a difference becauseas you pointed out even the rupeehas weakened. So for you is therea big difference?The rupee has weakened now, but just
45 days ago it was ₹68 a dollar. If therupee weakens, that goes against us.However, we are now also getting a littlebit into exports. We should be gettinginto exports gradually. So I think ulti-mately things will balance out.
I do want to come back to domesticdemand because you said twothings. One is that August and Sep-tember are traditionally the weak-est months of the year and that youare in wait and watch mode as far
Price cuts not likely to propel demand, says Dilip Piramal
Latha Venkatesh &
Sonia Shenoy
CNBC-TV18
We should expectabout 50 lakh ton-nes of sugar to be
exported from India, says VivekSaraogi, managing director,Balrampur Chini Mills. Editedexcerpts of an interview:
The view that I got onWednesday was theexport of 50 lakh tonne ofsugar will not be too help-ful for the sector becauseright now export pricesare very low and compa-nies in any case are not ina mood to export much.Would that be the rightview?I don’t agree with that view.
This ₹10.50 per kilogram (kg)on today’s global prices may be₹2 below cost for Uttar Pradeshmillers. I am giving rough fig-ures. Having said that, rupee/dollar can recover in ourfavour.
Second, the season of Brazilends in October. That is thetime when we can get into themarket. There is an open field.First for the quantity gettingbought and more importantly,I think even beet sugar inEurope is seriously down, Thai-land is not up, India also – whatwas perceived 28 million, Idon’t think India will make 28million.
Thereby, the global marketshould not see a surplus but ashortage in the current year.We have enough stocks of thepast. I think the global market,which is about 11.50 cents now,could move up and the gapcould be made up.
Do you expect this 60
l a k h t o n n e s t o b eexported in the next yearstarting October? If thatwere to happen, wouldyou expect a better reali-sation domestically?Let me clear the entire policy
in a minute. First, I don’t expectthe entire 60 lakh tonne ofsugar to be exported becauselast year against 50, 32-33 lakhtonne of sugar was exported. Iwould expect 50 lakh tonne ofsugar to go.
We still have the releasemechanism and the minimumsupport price (MSP) in place. SoI don’t think there is going to beany wide variation in sugarprice either on the downside oron the upside. Having said that,in Uttar Pradesh we are stillselling sugar at above ₹33 perkilogram. That is on the pricefront.
On the export adequacy ofthis ₹10.50, if one is to make a ₹1loss or ₹1.5 loss, one would stillgo forward. I see the industryand ourselves taking thatexport quota and selling it.
The last time you said thatthe volumes were lowerbut higher prices is whathelped revenue growth.What is the expectationfor Q2 and Q3? Do you seevolumes continue to bedepressed and does thathave anything to do withdemand?Let me try and say this
because there are many ques-tions around this from othersalso. Volume today is no morein our hands. It is a releasemechanism that is in play,which the government of Indiais deciding, which mill is to sell,how much during a month.
Having said that, this releasemechanism did kick in in June
very positive that somethingwill come.
So we are looking probablyat an enhancement of ethanolB-heavy prices over last year.For Balrampur, we are goingabsolutely on stream with theGularia distillery.
We hope to bid for that andwe will start our commission-ing hopefully by 1 December.So our entire B-heavy shouldkick in. We should be making alarge quantity of B-heavy.
We hope for the B-heavypricing to be okay and the gov-ernment’s policy on that iswonderful. Companies are lift-ing ethanol on time and payingon time. That business is verygood.
You said that the domes-tic price will remain sta-ble but what is it at cur-rently and when do youexpect international pri-ces to move up? What arethey currently and whatis the expectation?The domestic price right
now is around ₹33.50 per kilo-gram. I will give you a basicunderstanding of domesticprice. Let us say MSP is ₹31. IfMaharashtra sells at ₹31, UttarPradesh technically should sellat ₹32.50-33. So that basically isa trajectory around ₹33 for thenext year. These are my per-sonal views.
In the global markets, rightnow it is closer to about 11.25cents, I hope and I personallyfeel it could go to 13 cents inthree-four months. Exports fornext year, the crushing wouldbegin in November.
So you are required to exportin December. So you have along time for the prices torecover.
‘Global market will see a shortage of sugar in current fiscal’ICICI Bank’s put up a standout show in Q1: Kotak Institutional Equities
Vivek Saraogi, MD, Balrampur Chini Mills. MINT
‘Relaxation in FDI norms can be medium-term driver for growth’
Gautam Chhaochharia, MD
and head-India research, UBS
Securities.
Dilip G. Piramal, chairman, VIP Industries.
as the demand pickup is con-cerned. Are companies like yoursgoing in for any kind of price cutsor increasing your discounts topush products in these slowmonths?No, I do not think that will help. In a
market like ours, where there are not toomany people, I do not think price cuts isgoing to propel demand.
This whole trend of US companiesthat were outsourcing or manu-facturing in China, now legging itout, the fear that they will do moreof it with Donald Trump almostordering it. He maynot have the legalauthority to do so, butclearly the trend isthere. You were one ofthose guys who hadoutsourced your out-put production manu-facturing to China.How does life changefor you? Are youre-strategizing?No, in fact that helps us
because the Chinese manu-facturers become more dependent on us.So we can get better schemes from thereand better offers from them. Not onlythat, but as China is getting more expen-sive because it is becoming a high middleincome country, India will have muchbetter opportunities to export to the US.
You know what it is to manufac-ture in China. What are the advan-tages of the economics? Do you seea lot of the US companies whowere manufacturing in China,relocating to India at all becauseyesterday one of the bigannouncements was 100% foreigndirect investment (FDI) in con-
tract manufacturing? Do yousee India becoming a hub?Definitely it will happen, but all this
takes time. It is not overnight. How-ever, but I think in the next 5 years or10 years definitely a lot of the low endmanufacturing from China will moveto India because India is one countrywith a very large population. A lot ofthe manufacturing is already movingfrom China to Vietnam and Cambo-dia. Vietnam has 10 crore people, butCambodia and the other countries donot have so much of a population.
There are so many large industriesat the lower end, ready-made garments beingthe largest, and all otherconsumer goods indus-tries such as shoes, toys,everything else willmove out of China grad-ually.For the second half ofthe year, what is a rea-sonable assumptionin terms of volumegrowth?
It is very difficult toguess what is going to happen in thesecond half because nobody has a realexplanation for the consumer slow-down in India. Why the consumerproducts where especially day-to-daythings that are not dependent onfinance or they are not paid in instal-ments, why the demand of that hasgone down so much is a difficult ques-tion.
So, we have to wait and see. Thereis nothing else we can do. As far as thecompetition or the slowdown, I thinkit is all across, it is not so much in anyparticular segment.
‘We had 11% growth in Q1. Last year, in the same quarter, growth was 27%. August and September are traditionally
the weakest months for us.’
ing a market upmove, butare there any earningsupgrade that you wouldbe factoring in ?This is more a 2-3 year
impact in terms of earnings. Sothe earliest impact in terms ofearnings from this theme, if itplays out quicker and if we seeenough policy support in thenear-term, would be FY21 andnot FY20 or even the first partof FY21. So it’s too early for us tofactor that into earnings and westill need more visibility interms of government policysupport.
We do expect some moremeasures in the next fewmonths because this seems tobe the top priority for the gov-ernment also. In the near termwe do expect an earnings cutbecause there has been a lot ofpessimism over the last 3-4months in terms of auto salesdeclining, growth slowing, pes-simism in narrative amonginvestors but it didn’t show in
Nifty valuations orin earnings cut.
So in the near-term we stillexpect headlinelevel Nifty earn-ings to be cut. Westill do not see riskreward to beattractive for Niftyat these levels andwe still expect anarrow market tocontinue even if
market sustain or we see a tacti-cal rally because of all these pol-icy measures, it’s likely to be anarrow market.
ier to attract some of thesemanufacturing shift. This couldbe a material medium-termmacro driver for India both interms of gross domestic prod-uct (GDP) and interms of earnings.Obviously, thisdoes not matterfor the earningsfor the next 2-4quarters but it’sdefinitely a bigpositive potentialfor India over thenext 3 years.
Any earningsupside thatyou are fac-toring in because of all ofthis. Your Nifty Decem-ber 2019 target is still11,000, where we are atpresent. You not expect-
‘In near-term, we expect an earnings cut because there has been a lot of pessimism over the past 3-to-4
months in terms of the narrative
among investors.’
last year. So when you see next quarter’sresults probably you will notsee a downtick on the volumepart, on a quarter on quartercomparison with financial year2018. We don’t have much con-trol on that.
However, pri-ces would remainthe way they areand that is a bigsupport in thiskind of a glut situ-ation.
Also, if 5 mil-lion is reducedfrom inventoryand I don’t expect28 million to beproduced, there might not bemore than one million additionto inventory this year because ifyou produce 27 and you con-sume 26, your inventory addi-tion is 1 million. You began witha 14 million inventory, 14+1addition in the current year 15,
5 million exports, so we will bedown to 10 million which is apretty healthy situation com-pared to where we were.
Ethanol did well for youin the first quarter. It is10-15% of your total reve-
nues. Should itdo even betterin the currentquarter and inthe next?
I am very posi-tive on ethanol forourselves as wellas the govern-ment policy. As ofnow, our requestfor enhancementof ethanol price is
pending with the government.This is based on when MSPmoved from 29 to 31 last year, itis about a 6% movement.
So we have requested conse-quently for a 6%enhancementin ethanol price, which may ormay not come. However, I am
‘Expect to export 5 mt of sugar
next year.The release
mechanism and the MSP is still in
place. There won’t be any wide varia-tion in sugar pri-
ces either.’
Latha Venkatesh &
Sonia Shenoy
CNBC-TV18
M .B. Mahesh, analyst,Kotak InstitutionalEquities, expects
ICICI Bank andSBI to show turn-around in thecorporate portfolio. Editedexcerpts of an interview:
Are you happy with theperformance of ICICIBank, Axis Bank, andState Bank of India (SBI)?How would you rate themrelatively and wherewould you put yourmoney?In terms of performance if
you look at the quarter thatwent past ICICI Bank clearlyhad a standout quarter. Thefresh additions to non-per-forming assets (NPA) wereslower, you are seeing reduc-tion in gross NPAs comingthrough. They still continue tomaintain higher provisions intheir balance sheet which isresulting in improving the cov-erage ratio for them. Overall, ifyou were to compare the threebanks we would rate probablyICICI Bank right at the top.Both Axis Bank and SBI had aslightly disappointing quarter.
Axis kind of gave a slightlyweak kind of commentary ontheir outlook at least in the nearfuture, while SBI saw somehigher slippages coming infrom the SMEs space for thecurrent quarter. They too kindof were showing some amountof disappointments in terms ofcommentary on the near term
outlook on some of the largecorporate exposures that theyhave.
So, on balance if you were tojust look at the three namesclearly ICICI Bank comesacross as one which isextremely well placed among
the corporatebanks which arenow turning
around the corner. SBI wouldprobably come out next andAxis would be third as we speaktoday.
RBL Bank’s stock has gotde-rated quite a bit. It hasfallen from ₹700 to ₹300and we do know that assetquality pressures arethere because of theirBBB ratede x p o s u r e sspecially intheir corpo-rate book. ?We are still
working on ourthesis on RBLBank. We havebeen negative onthe stock for 2-3years. Broadly theway the stock hasreacted it hasbeen a bit sharper than what wewould have otherwiseexpected.
Some of it is probably drivenby the fact that some of theexposures that has come in offlate as stress, we have seenRBL’s name occurring a littlebit more than what was other-wise expected of that particularbank at least. So to that extent,the decline in share price prob-ably reflects the underwritingthat they have done on the cor-
porate side. Nevertheless, weneed to kind of work throughthis and give out a better expla-nation in the next few days outthere on that particular stock atleast.
Have you priced in yourprice targets a possibleadditional bad loans fromNBFCs?These exposures coming
from the NBFCs side are goingto be extremely lumpy innature. The timing of some ofthese, if it were to happen isgoing to happen in a couple ofquarters and that quarter oryear cannot be kind of projec-ted in our estimates.
At this point of time the nearterm risk is probably coming
across from onespecific NBFC inthe housingfinance space thatis probably fac-tored in to ourestimates outthere.
If there areother NBFCswhich will also seehigher amount ofstress or stresswhich is similar to
what NBFCs otherwise are see-ing out there then we probablywould need to increase ourestimates in terms of provisionsor in terms of gross NPAs forthe sector as a whole.
As we speak today, the onlyway to capture this is probablyhave a higher cost of equity tosome of the banks which haveexposure to these NBFCs. Thatis how we are kind of capturingout there.
‘Axis gave a slightly weak
commentary on their outlook for
the near term, while SBI saw
higher slippages coming in from
the SMEs space.’
INTERVIEW
14 FRIDAY, 30 AUGUST 2019NEW DELHI VIEWS
MY VIEW | FARM TRUTHS
MY VIEW | LEARNING 4.0
Entrepreneurship is not a recent phe-nomenon. Since the time we werenomadic hunter-gatherers, human
progress has been synonymous with entre-preneurship—the often accidental, some-times deliberate process of discovering anddelivering a positive change of scale to thestatus quo. When we discovered that wecould sow seeds and cultivate crops ratherthan forage around, we realized that it waspossible to settle down into colonies, villa-ges, towns and civilizations. A relatively sim-ple idea completely changed our lives andthe course of humanity. Such was also thecase with the invention of the steam engine,which led to railroads and the concomitanteconomic growth of the industrial revolu-tion, or the invention of the printing press,which in its age democratized knowledge.
Through most of history until today, eventhe cleverest innovations have taken dec-ades to make an impact on our lives, andhave continued to make an impact for dec-ades at a stretch. Take the telephone, for
economy, there have been attempts by various industry bodies to extract as much stimulus as possible from the government, and some of them have succeeded in extracting concessions.
But the section of the population that has suffered the most, and whose neglect caused the crisis to spill over to various sectors, was not even men-tioned during the conference. That is: the rural economy and all those affected by the economy’s demand crisis. While the government agreed to open up its purse to buy new four-wheelers for its officers, it did not occur to it that the real crisis is out in the countryside, where most are struggling to maintain essential consumption.
The reality of rural areas is clear fromthe trend in wages. As per the latest available data from the Labour Bureau, real wages in agriculture (average of all agricultural occupations) declined by 0.5% per annum in the two years to June 2019, whereas non-agricultural wages were stagnant. Some of this is also evident in the consumption expenditure data, which showed real consumption in rural and urban areas decline by more than 4% per annum between 2014-15 and 2017-18. The crisis in the countryside is also obvious from the fact that unlike urban areas, where retail inflation has exceeded 4% in the
last four months, in rural areas, it has been near zero. Clearly, the situation in rural areas is far more serious, worsen-ing in the last two years as the terms of trade turned sharply against farming.
Unfortunately, the rural poor, farm-ers and casual-wage workers have no voice, even though it is they who form the bulk of consumption demand with almost two-thirds of the population. There has been no effort to address their declining incomes. Recent data from companies with large rural expo-sure has also showed declining sales of everyday-use items such as biscuits, despite discounts. But these were left out of the economic package. With large-scale retrenchments in the manu-facturing and services sectors, and a slowdown in construction, it is likely that rural areas will see an influx of returning migrants with no jobs. This will not only swell the pool of the unem-ployed, but also pressure wages further.
It is obvious that the extent of the Centre’s bailout of sentiments is directly proportional to the noise one makes and inversely so to the extent of slowdown various sectors actually face. While the finance minister may have uplifted the mood of foreign and domestic investors and mollified the super-rich by assuring them of all sup-port, these are unlikely to be of any use if the base of our economy’s pyramid is crumbling. With banks flush with liquidity, no amount of interest rate cuts or extra cash infusion will revive the economy until the decline in consump-tion demand is addressed.
However, with the windfall gain of the surplus received from the Reserve Bank of India, the government could increase its spending to revive rural demand. The easiest way to achieve this would be by raising expenditure on rural infrastructure and through enhanced wages under the rural employment guarantee scheme. The problem is not of a lack of resources, but a lack of understanding why the economy is in a mess.
Last week saw a flurry of activity from the government aimed at reviving the economy. So far, it was
in denial, but it has now woken up to the economic crisis that is spreading like wildfire. The vice-chairperson of NITI Aayog termed the crisis the worst since independence. Several members of the economic advisory council to the Prime Minister also expressed their concerns. As a first step, the recognition by New Delhi that all is not well is welcome. Most likely, the quarterly gross domes-tic product data to be released on Friday would confirm that the slowdown which set in two years ago is continuing.
While there is now acknowledge-ment of the problem, and there also seems to be an urgency to address it, there is still no recognition of the rea-sons why the economy is in this state in the first place. Going by the hurriedly-called press conference of finance min-ister Nirmala Sitharaman, it further appears that the steps announced are not only cosmetic, but also misguided.
Sitharaman presented the measuresin six silos, most of them either roll-backs or clarifications of certain budget announcements. But the crisis in the economy was not precipitated by any of these budget proposals. Therefore, most of the announcements would only serve to assuage markets and the super-rich who were affected by them. With the slowdown spreading across the
A misguided stimulus plan to revive our economic growth
The government’s prognosis overlooks the rural stress that is at the heart of the economy’s troubles
HIMANSHU
is associate professor at Jawaharlal Nehru
University and visiting fellow at the Centre
de Sciences Humaines, New Delhi
The best way to look at India’s lateststrategic thrust, aimed at turningthe country into a manufacturinghub for the world by linking upwith supply chains that girdle theglobe, is from a global vantage
point. With the US-China trade war in its sec-ond year now, old business arrangements are under severe stress. American companies that have long used Chinese factories to crank out low-cost products for various markets find themselves under US policy pressure to either pull out of China entirely, or rework their pro-duction models to shift key operations else-where. US President Donald Trump might just raise tariffs on Chinese imports to 30% this October, enough to disrupt the cost calculations of the most resilient firms that make products in China. This presents India an opportunity to plug a vacuum, and the Narendra Modi government has moved in to seize it. On Wednesday, it said it would open the domestic field of contract manufacturing to 100% foreign ownership of ventures, a move explicitly designed to attract global players currently in search of low-cost locations for production units. Coupled with the easing of local-sourcing conditions imposed on foreign single-brand retailers in India, the reform serves as a big “Welcome” board, especially to chief executive officers in the US who have been mulling a response to the worsening commercial ties across the Pacific. In this con-text, all eyes are now on Apple Inc.’s Tim Cook. If this marquee brand were to quit China for India, goes the hope, several others may follow.
It is one thing to issue an invitation, however,and quite another to win decisions in India’s favour. Our country does not have much of a reputation for manufacturing efficiency. The
sector has languished, as a proportion of the overall economic pie, even as services have leapt ahead. While it is true that new investors could transform the way products are put together by bringing in practices perfected elsewhere, analysts have long expressed con-cerns about low productivity here. Excessive red tape, which tends to raise corruption levels, has been another deterrent to foreign investment. The ease of doing business in India has risen in recent years though, as meas-ured by the World Bank, and inflows from overseas businesses have been rising apace. Quick ground-level clearances could make a difference as well. In other words, the prob-lems of the past need not persist in the future.
Or could they? For India to try replacing China as the world’s factory, a prospect that holds out the dream of job generation by the million, the country would need to enhance its overall competitiveness as a manufacturer. This is primarily about allowing companies to meet high quality standards at the lowest possible cost. Broadly, the Chinese success for-mula so far has involved the large-scale use—and even diversion—of state resources to sub-sidize mass production, not to speak of labour conditions that some consider repressive. In a democracy like ours, due caution should be exercised before attempting to emulate such ideas. Even on keeping export price tags low, China is not a good role model. Indeed, inte-gration with global supply chains would require the Indian rupee’s value to be export-oriented, which could mean letting it slide when appropriate, but policymakers must resist currency manipulation. India must make its market and democratic forces work in tan-dem as it sets about creating conditions that would spur efficiency and turn “Made in India” into a routine sight across the world.
To make India the factory of the world
The government has eased foreign investment rules in an exercise aimed at turning India
into a global manufacturing hub. Success, though, requires us to gain a competitive edge
OUR VIEW
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New Delhi will host thefirst major global trade
negotiations since such talkscollapsed in Geneva in July2008, partly because India andthe US clashed over how farpoor countries should go toprotect the livelihoods of theirpoorest farmers (see Page 16).
Much has happened sincethen. A financial andeconomic crisis ofunparalleled severity hasresulted in the collapse ofglobal trade. The US has anew president who has beenso distracted by problems athome that he is yet to appointa trade negotiator. India had
an election in which votersreturned the samegovernment to power; but wehave in Anand Sharma a newtrade minister who isexpected to be less inflexiblethan his predecessor KamalNath.
Trade negotiations alwaysinvolve complex trade-offsbetween defending an openglobal trading regime andprotecting national interest.But there is no doubt that theworld needs a new trade dealthat will raise productivityand incomes. The New Delhimeetings should hopefully getnegotiations back on track.
The US has accused Pakistan of illegally modifying US-made missiles to expand its capability to strike land tar-gets, a potential threat to India, according to senior USofficials. The charge was made in an unpublicized diplo-matic protest in late June to Prime Minister Yousaf RazaGilani and other top Pakistani officials. >P8
Unions representing work-ers in PSUs and state-con-trolled sectors are gearingup to intensify negotiationswhile some havemade strikecalls as a stalemate over apay increase drags on. >P21
***Anil Padmanabhan says In-
dia’s actions willbe watchedclosely at talksin two multilat-eral forums thisSeptember. >P5
LEADING THE NEWS
With economic growth ex-pected to slow this year, thePlanning Commission willmeet on Tuesday to discussways to boost agriculture,infrastructure and privatesector investment. >P21Investors in hedge funds
run by Cerberus, whose beton the US auto industrywent bust, are withdrawingaround $5.5 billion, or 71%of the assets. >P20
***Confrontation with a newlyformed pilots’ union mayupset Jet Airways’ restruct-uring plan, say analysts. >P6
S. Narayan says theadministrativestructure at the dis-trict and village lev-els must be improvedso that the benefits ofNREGS reach thosewho need them themost. >P22
QUICK EDIT
From Doha to Delhi
Mobis Philipose says thedomestic market opportu-nity for technology firms isthere for the taking, andthe Indian IT industry maybenefit greatly from thegrowth in this market. >P14
***With a shift to InternationalFinancial Reporting Stand-ards drawing closer, banksare taking several steps tomanage the transition, in-cluding hiring consultantsto train employees. >P14
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POLITICS: Nosecond termforBJP chief Rajnath Singh >9
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BANKER’S TRUST:Mr Banker, whatcrisis are you talking about? >6
FIGHT FOR CONTROL
The untold storyof Great OffshoreBY TAMAL BANDYOPADHYAY
[email protected]·························MUMBAI
Who will end up with thecontrolling stake in
Great Offshore Ltd, India’slargest integrated offshore ser-vice provider?
Both Bharati Shipyard Ltd(BSL) and ABG Shipyard Ltd(ABG), two leading privateshipyards in the country, seemto be ready to stretch them-selves to any extent to own
Great Offshore, a strategic fit.The fight for a listed compa-
ny with competing offers to itsinvestors is not new, but whatsets the Great Offshore sagaapart is the fact that the differ-ence between the offers andcounter-offers is quite wide.Also, with every counter-offermade by ABG, BSL—the first
TURN TO PAGE 4®
GST model maybe tweaked forpolitical viability
BY SANJIV SHANKARAN &
L IZ MATHEW
·························NEW DELHI
To sell the concept of goodsand services tax (GST) to
the electorate, some states arepushing for two tax rates: a lowone for items of mass con-sumption and a higher rate forthe others.
While it could complicatethe structure by allowing for
more sets of tax rates, politi-cians believe it will be easier toimplement and push throughtheir respective constituen-cies. The Union governmentand states are negotiating thecontours of a GST that theCongress-led United Progres-sive Alliance is committed tolaunching by 1 April.
GST is an attempt to eco-nomically integrate all thestates. Currently, states havethe power to independentlylevy indirect taxes on somegoods. As a result, some of thedecisions made by companieshave more to do with tax
TURN TO PAGE 2®
Post-elections,half a millionnew investorsenter marketBY N . SUNDARESHA
SUBRAMANIAN
[email protected]·························MUMBAI
Darshana Vyas, a Mumbai-based media professional
in her mid-20s, opened herfirst demat account in June,about a fortnight after theBombay Stock Exchange’s bell-wether equity index createdhistory by gaining 2,110 points,or 17.34%, on a single day,celebrating the return to powerof the Congress-led UnitedProgressive Alliance.
“I missed the bus last time. Ididn’t want to make the samemistake now,” Vyas says.
She is one of the 527,194new investors who have en-tered the market since June.Data from two Indian deposi-tories—National Securities De-pository Ltd (NSDL) and Cen-tral Depository Services (In-dia) Ltd (CDSL)—show that onan average, 190,000 new ac-counts have been opened ev-ery month, net of closures, be-tween June and 22 August.
Between January and May,380,000 new accounts wereopened, net of closures, mak-
TURN TO PAGE 3®
ANALYSISmint
ORAL INSULIN
DCGI sendsShreya backto the lab
BY RADHIEKA PANDEYA
[email protected]·························NEW DELHI
India’s drugs regulator hasasked Mumbai-basedShreya Life Sciences Pvt.
Ltd to conduct mandatoryphase III human clinical trialsof the anti-diabetes oral insu-lin drug Oral Recosulin that’smade by Canada-based Ge-nerex Biotechnology Corp.
The directive follows a Mintinvestigation in March whichfound that the drug had beenapproved for marketing in In-dia without it undergoing localhuman clinical trials, as man-dated by the Drug and Cos-
metics Act of India.“We asked Shreya to con-
duct phase III human clinicaltrials in India. They have sub-mitted the protocol for con-ducting the trial, and once thatis approved, the company willbe allowed to conduct the
TURN TO PAGE 2®
Marketing approval hadbeen given withoutlocal human clinicaltrials; regulator nowsays they are required
THE NEWSDCGI has directed Shreya Life Sciences to conduct phase III clinical trials on anti-diabetes drug Oral Recosulin.
THE BACKGROUNDShreya had been allowed to market the drug, made by a Canadian firm, inIndia without the mandatory tests.
THE IMPLICATIONBased on the trial result, if the drug is approved for sale, fresh import permission will be granted to Shreya.
TESTING TIMES
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BLOOMBERG
Supply chains cannot tolerate even 24 hours of disruption. So if you lose
your place in [them] because of wild behaviour, you could
lose a lot. It would be like pouring cement down one of
your oil wells.
THOMAS FRIEDMAN
is vice-chairman of Krea
University
It is welcome that the government has acknowledged the existence of a problem. But
the steps it unveiled overlook the troubles in rural India that must be addressed to revive growth.
The easiest way to strengthenour rural economy would be by increasing infrastructure
spending and enhancing wages offered under employment
guarantee schemes.
Q U I C K R E A D
resilient enough to stand up after every fall.Third, entrepreneurs must build their
products and offerings keeping in mind aglobal audience. Except perhaps for China,the online world is a single inter-connectedand complex marketplace. Capital flows areincreasingly global, too. For example, pro-ceeds from a large exit from an online busi-ness in China are funding the expansion ofthe online marketplace in India. The flow ofcapital and ideas is no longer just West toEast, it has become a two-way street.
Finally, business and personal ethics, bothat the individual level and the organizationlevel, are being challenged in new ways.While wealth creation is often one result ofthe process of entrepreneurship, it is not thepurpose of entrepreneurship. Entrepre-neurs need to learn to stay focused on thebroader purpose of catalysing humanprogress, and not get swayed by up-roundsand down-rounds and stock prices.
To use a cricket analogy, the game ofentrepreneurship has veritably entered theT20 mode; the days of five-day-long Testmatches are over. Players need to adapt suit-ably to the new rules, equipment and play-grounds. Adaptability, resilience, global out-look, purpose and ethics are the way of thefuture.
The rules of the game, and the shape of theplayfield itself are constantly changing, afterthe game has begun.
So what will it take to be a successfulentrepreneur in the coming decades? First,adaptability is the key. Successful compa-nies, even in past decades, have had to pivottheir business models once or twice beforethey ultimately succeeded. Companies inthe coming decades must be prepared topivot multiple times, quickly, and in antici-pation of the right set of new rules. Theirbusiness models need to be asset-light, and
their investment strategymust be nimble, so thatthey may adapt.
Second, entrepreneurshave always had to over-come the fear of failure.In fact, research showsthat communities wherefailure is acceptable tendto show greater levels ofinnovation. In the com-ing decades, entrepre-neurs will need to gobeyond overcoming thefear of failure, to develop-ing comfort with regularfailure, and becoming
innovations is also declining. RememberFarmville, which attracted one million Face-book users within four days of its launch?
These recent data points indicate abroader trend—that our lives are set tochange faster, and more often, in the years tocome. This puts entrepreneurship in fast-forward mode. Companies may succeedfaster, but will fail more frequently, andremain successful for shorter periods oftime. Multiple life-changing ideas comingtogether will also cause upheaval. Take forexample, driverless cars and ride-sharing.The former is blurringthe boundaries betweenautomobile making com-panies and technologycompanies; the latter isseparating the car buyerfrom the car user, andchanging the nature ofuse. A ride-sharing com-pany is arguably doingthe right thing by spend-ing its resources onbuilding a strong data-base of millions of driv-ers. But this database willbe of no use to it in theage of driverless cars.
example, in the early part of the 20th cen-tury. Due to its obvious benefits, the use oftelephones gradually spread, and around 60years after its introduction, more than 80%of US households had a telephone. With theadvent of the assembly line in car manufac-turing, the use of automobiles became moreaffordable and prevalent, and around 50years after its introduction, more than 80%of US households owned a car. Air travel,which only took off after World War II,reached an adoption rate of 80% in around40 years.
On the other hand, some of the morerecent innovations—e-commerce, smart-phones and ride-sharing, to name a few—have not taken many years to make a deepimpact on our lives. Within 20 years of itsfounding, Amazon reached a market capital-ization equal to that of its old-economy rivalWalmart. In the five years that followed,Amazon added to its market capitalizationthe equivalent of one Walmart each year,and is today worth three times as much asWalmart. As of April 2007, there were zeroApple iPhones in the world; 10 years later,there were 728 million iPhones in use. Until2009, we still had to hail cabs in most cities.Today, nearly 100 million people use Uberevery month. However, the lifespan of these
The rapidly shrinking life cycle of entrepreneurshipKAPIL VISWANATHAN
Recent data points indicate that our lives are set to change faster.
This puts entrepreneurship in fast- forward mode. Firms may
succeed faster, but will fail more often, and remain successful for
shorter periods of time.
To be a successful entrepreneur in the future,
adaptability, resilience, global outlook, purpose and ethics
would hold the key
Q U I C K R E A D
VIEWS FRIDAY, 30 AUGUST 2019
NEW DELHI 15
The Amazon rainforest has been burn-ing for weeks. Yet, Brazil’s right-wingpresident, Jair Bolsonaro, mobilizedthe armed forces to help contain thefires only in the last few days—in theface of European leaders’ threat to sus-
pend a major trade deal and the possibility of a far-reaching boycott of Brazilian products. And though the Bolsonaro government’s rollback and weak enforcement of laws protecting the Amazon are root causes of the crisis, encouraging ranchers to set fires to clear land for agriculture, there has been no mention of any policy change.
The crisis in the Amazon is a stark example of thedamage that can be done when governments bow unequivocally to business interests. It also high-lights an increasingly common phenomenon: the cynical manipulation of anti-corruption efforts to undermine democracy and advance an authoritar-ian political agenda.
Some conservative economists argue that corruption can be benign, or even beneficial, as it enables economic actors to bypass regulations, thereby enabling markets to function more effec-tively. While there may be instances of benign corruption, the truth is that corruption corrodes markets, protects incumbents from competitive challenges by impeding the entry of new actors, destroys the moral fabric of society, and stunts economic development. Indeed, as Transparency International’s Corruption Perceptions Index (CPI) shows, there is a strong inverse correlation between development and corruption.
According to the latest CPI data, the world’s leastcorrupt countries are Denmark and New Zealand. Both have achieved high standards of living. The world’s most corrupt countries, by contrast, are Somalia, South Sudan, and Syria—all poor and mired in conflict. Ranked from least to most corrupt, the US is 22nd on the 180-country list; among major developing and emerging econo-mies, India is 78th, China is 87th, Brazil is 105th, and Nigeria is 144th.
The data also suggest that the common belief that corruption is hardwired in some societies does not stand up to scrutiny. Corruption levels can and do change, at times quite sharply. A couple of cen-turies ago, corruption was rampant in countries like the United Kingdom, which today ranks 11th on the CPI. And recent examples from Asia show improvement can occur quickly. Prior to self-gov-ernment in 1959, Singapore was beset by corrup-tion; since 1995 (when the CPI was introduced), it has consistently ranked among Asia’s least corrupt countries. This year, it reached third place (tied with Finland, Sweden, and Switzerland). Likewise, Japan is 18th, and Hong Kong has risen quickly to 14th place.
Addressing corruption is not always straightfor-
The corrosive effect of corrupt anti-corruption campaigns
The connection between corruption management and democratic compromise is complex and not commonly understood
THEIR VIEW
KAUSHIK BASUis professor of economics at Cornell University
and Nonresident Senior Fellow at the Brookings
Institution
AFP
G L O B A L V O I C E S
P rime Minister Scott Morrison is one of the few world leaders on unqualifiedgood terms with US President Donald Trump. After extended time with the US
leader at the G7 in France, he should have more insight than most on the trade may-hem that escalated in the past week. The Prime Minister matter-of-fact explainsto The Australian Financial Review’s Europe correspondent Hans van Leeuwenthat the trade war is not about Mr. Trump’s personality, nor clashes of civilizationsand the like, but is a transition to be expected. China has outgrown the trade rulesunder which it soared to become the world’s second-biggest economy, he suggests,and now we need new ones. But as [economist] Blundell-Wignall notes, Australiais one country that unambiguously benefited from China’s breaking of the spiritof the global trading system.
But Mr. Trump is also an instinctive mercantilist. He thinks trade is a war, andright now the US has an asymmetric advantage over China, which he wants toexploit to the hilt. As Australia’s trade policy architect, Peter Drysdale wrote, thedeep cost is the breaking of supply chains... Any agreement between Mr. Trumpand Chinese President Xi Jinping is unlikely to repair this tattered multilateralism.Australia must continue to push for a new global framework that includes areformed World Trade Organization.
Australian Financial Review
Morrison can try to repair the trade framework
H arrowing tales of physical, psychological and sexual abuse from femalemigrant workers, especially those returning from Saudi Arabia, have become
all too common. Nearly 800 female workers have been brought back to Bangladeshalready this year; last year, the number totaled over 1,300. These are not isolatedhorror stories—these numbers tell the story of the constant exploitation ourmigrant workers face at the hands of various predatory parties, including middle-men with malicious intent, and torturous employers on foreign lands. It has becomea cycle: Workers are exploited at home, then abused and further exploited abroad,then rescued if they are lucky, and finally recompensed.
Prime Minister Sheikh Hasina recently spoke on the issue, emphasizing theimportance of raising awareness about ill-intentioned third-parties, particularlyin rural areas. Crucially, the PM also stressed the importance of creating a muchstronger monitoring system to prevent further deception of workers. The remittan-ces sent home by Bangladeshi migrant workers form the backbone of our nation’seconomy, and it is of the greatest importance, that we stand behind the hard-work-ing men and women who do so much for the betterment of the country.
The Dhaka Tribune
Migrant workers deserve protection
W atching the struggle over Brexit in Britain has been akin to watching a foot-ball game between immovable sides. Every effort by either team to move
down the field has failed, so players have resorted to sneaky trick plays. That’s whatBoris Johnson’s latest ploy amounts to. The new prime minister’s move is quitecomplex in terms of Britain’s tradition-riddled parliamentary system, involving thequeen and something called “proroguing”. Basically, Mr. Johnson and his contro-versial political strategist, Dominic Cummings, have tried a surprise parliamentaryend-run to curtail the amount of time parliament will have to debate before thedeadline for leaving the European Union without a deal on 31 October.
And while Brexit deadlines, like the proverbial goal posts, have been movedbefore, that was under a prime minister seeking to reach a workable deal, not underone who has maneuvered his way to 10 Downing Street by claiming that all thedoomsday scenarios around a no-deal Brexit are wrong... In tactical terms, Mr.Johnson’s manoeuvre was quite cunning. He claimed that all he was trying to dowas to give a quick start to his “bold and ambitious domestic legislative agenda”.If Parliament, now reduced to a few days of debate, fails to find a way to avoid ano-deal Brexit, he will achieve his stated goal, probably then calling a quick electionto cash in on his feat before the economic consequences strike.
The New York Times
Boris Johnson shortens the fuse on Brexit
T he Cabinet Office estimates that up to 3.4 million people work as freelancers,or about 5% of the nation’s 66 million-strong workforce. Some private sector
estimates put the number at more than 10 million, depending on the definition offreelancing... As part of its drive to promote diverse and flexible ways of work, thegovernment seeks to build an environment that enables more people to freelance.On the other hand, not a lot has been made known about the specific terms andconditions in which freelancers work. They are not covered by labour-related lawssince they are treated as individual business proprietors, and concern lingers overthe unstable conditions of their jobs.
According to an earlier survey by the Fair Trade Commission, roughly 60% offreelancers experienced some form of disadvantage in dealing with companies thatgive them business orders. The government plans to legislate steps to enhance thetransparency of their terms of contract with businesses so the freelancers will notbe treated unfairly by their clients... A key benefit of freelancing is said to be a highdegree of latitude in work conditions such as the hours and location... As more peo-ple choose to freelance, measures need to be introduced to make sure that they arenot put at an unfair disadvantage due to their generally weak and insecure positionsvis-à-vis their corporate clients.
The Japan Times
Freelancers need to be protected
ward. The connection between corruption man-agement and democratic compromise is complex and not commonly understood. This is the reason why many leaders who have come to power with a genuine interest in controlling corruption have ended up nurturing cronyism and damaging democracy instead.
That is what happened in Brazil last year, whenformer president Luiz Inácio Lula da Silva was jailed for corruption, not as an honest attempt to build a more transparent political system, but rather to exclude him from the presidential election, which opinion polls suggested he would win, thereby enabling Bolsonaro’s victory.
Some political leaders take aneven more direct approach, launching a corruption “purge” that targets rivals or critics for prosecution. In countries that are rife with high-level corrup-tion, this is easy to do: leaders can simply begin by taking aim at those who challenge their authority. What starts as an anti-corruption drive ends up as an instrument of cro-nyism and media control. And by creating a safe zone for loyalists, it often ends up exacerbating corruption.
The campaign pursued by Nigerian President Muhammadu Buhari since his election in 2015 is widely viewed as having targeted opponents and spared allies. The same risks exist in many other countries.
Corruption can implicate even those who wouldprefer to operate according to the law, especially in countries where it is endemic. I was personally caught up in such a situation in 1992, when leaving Moscow after a five-day conference. The immigra-tion officer at the airport looked at my passport and said grimly, “Your visa was for four days. It expired yesterday.” Then, without batting an eye, he asked for a $50 bribe. Looking back, I marvel at my cour-
age. I bargained, and we settledon $5. But when he stamped mypassport, the thought struck methat if someone was watching, Icould be arrested for bribing anofficer. I panicked, snatched mypassport, and ran to my gatewithout paying the bribe. To thisday, I don’t know whether myaction was morally defensible. Istruck a contract and reneged onit. It is rare to feel guilty for notpaying a bribe, but I lived withthat feeling for quite some time.
But the mere fact that I wasput in that position shows justhow easily corruption can prolif-erate, especially in a context
where it is already an embedded part of everyday life. In such cases, corrupt systems are vulnerable not just to corruption itself, but also to politically motivated “anti-corruption” initiatives that entrench the power imbalances they are supposed to overcome and facilitate the rise of undemocratic regimes. The scale of the devastation such manipu-lation can wreak is evident in the Amazon today.
©2019/PROJECT SYNDICATE
The fires in the Amazon rainforest, which were let to rage
on, are an example of the devastation that a system
embedded with corruption can cause in democratic regimes.
What’s comforting, though, isthat the belief of corruption
being hardwired in some societies isn’t true. Corruption
levels can and do change, sometimes quite sharply.
Q U I C K R E A D
A Tibet where China would like monks sold on Ferraris
After landing at Lhasa’s Gonggar air-port, among the first things to catchmy eye were two fighter jets of the
Chinese People’s Liberation Army AirForce. Layers of clouds masked my view,but there was no mistaking the roar of afighter jet, bringing home how close theAsian powerhouse is perched vis-à-visIndia. It also weakened the theory that theHimalayas were a “natural barrier” betweenthe two countries. Also unmissable, just out-side the terminal, was a pedestal with pic-tures of Chinese leaders Mao Zedong, DengXiaoping, Jiang Zemin, Hu Jintao and XiJinping, and the Chinese national flag.
These were my first impressions of Tibet,or Xizang, as the Chinese call it. Coinciden-tally, our visit (of a group of eight Indianjournalists invited by the Chinese embassyin New Delhi to visit in early July) was takingplace a few months after the 60th anniver-sary of the Tibetan spiritual leader’s flight inMarch 1959 to India. The Dalai Lama hadfled after a failed uprising against Beijing,eight years after China’s “annexation” (as
described by Western officials and media)or “assimilation” (as many controversy-averse Indian authors put it) of Tibet in 1951.
We couldn’t stop marvelling at the unfor-giving mountain terrain of sharp ridges,sheer-drop valleys and winding hill springs.The hour’s drive to Lhasa reinforcedChina’s infrastructural prowess—wide all-weather roads stretched for miles, windinground stark grey-brown mountain sides.Long tunnels have been bored through thebase of some mountains. Passing throughone of the tunnels, I recalled an agreementbetween Chinese leaders and their Nepalesecounterparts to link the two countries witha railway line (to reduce Nepal’s depend-ence on India after the 2015-16 economicblockade). New Delhi’s hope that geographywill act as a constraint is clearly misplaced.
Modern-day Lhasa is nothing like theimaginary “Shangri La” of yore. The city hadall the trappings of a global cosmopolitanhub, with its nightclubs, high-end hotelsand glitzy shops. The imposing Potala Pal-ace, once the Dalai Lama’s home, was theonly structure to offer a sense of the past.Right opposite it stood another toweringpedestal with images of Mao, Deng, Jiang,Hu and Xi. Foreign tourists appeared few.But there were Han Chinese everywhere.
The Chinese imprint on Tibet was palpa-ble. All signs directing people and trafficwere in Tibetan and Mandarin. ThoughChinese authorities claim that people ofTibetan stock comprise over 90% of Tibet’spopulation, Han Chinese seemed to have amajor presence, running shops and busi-nesses in Lhasa and Shigatse; thoseemployed in construction activity across thestretches of Tibet we visited, seemed over-whelmingly Han Chinese. Five-starred redflags and traditional lanterns were visiblenot only along roads, but also outside shops,and there were fancycars and signs of pros-perity—at least in Lhasacity—all around.
What was unclear,though, was whether it’sthe “good life”—jobs,infrastructure and mod-ern education—that waskeeping Tibetans con-tent. Those one got tospeak to in English,mostly in the hospitalityindustry, did convey thatimpression. In the villa-ges we visited, one couldsee efforts to preserve
Tibetan traditions of paper and incensemaking, an obvious counter to the criticismthat China was destroying the Tibetan cul-tural legacy.
The drive from Lhasa to Shigatse wasacross a rugged landscape dotted with hugegreenhouses growing vast varieties of fruits,vegetables and grains, besides flowers. Theproduce was for domestic consumption inChina, aside from its export. There weremany dairy farms of animals shipped fromEurope and New Zealand. All these involvedlocal Tibetan participation and appeared
responsible for theseeming contentmentand prosperity amongthe local populace. Thedeclining number ofTibetans fleeing to Indiavia Nepal was due to this,we were informed, withone Chinese officialpointing out that Tibet-ans in the TibetanAutonomous Regionwere aware of the “hard-ships” endured by thosewho had followed theDalai Lama. The declinehas been acknowledged
by the Tibetan government in exile in India.Development apart, it’s a fact that the Chi-nese have been exerting pressure on Nepalto block routes for escape. By one line ofthinking, one of the reasons Beijingbefriended Kathmandu was to ensureTibetans do not flee.
Conversations with Chinese analysts andofficials in Beijing and Tibet indicate thatChina is prepared to cope with the after-math of the eventual passing of the DalaiLama. A reincarnation would be foundamong Tibetans in China, they said. So whathappens if the population in exile name areincarnation from among them? Thatwouldn’t work, we were told, as the DalaiLama, for historical reasons, has to be recog-nized by the Chinese government.
Controlling the institution of the DalaiLama is seen as key, given the hold that theBuddhist faith has on Tibetan life. This iswhy the Panchen Lama, who stayed back inTibet and is seen as second only to the DalaiLama, is considered a “patriot” by Beijing,while the Dalai Lama is billed as a “danger-ous splittist”. That China will want India toendorse its choice of the next Dalai Lamaseemed amply clear—leaving me wonder-ing how long the “Tibetan issue” wouldbedevil our ties.
ELIZABETH ROCHE
MY VIEW | PEN DRIVE
covers foreign affairs for
Mint
The Chinese imprint on Tibet is palpable, be it in pictures of its leaders in public places or such
signs of prosperity as flashy cars, which could be a reason why
Tibetans seem content.
China is likely to let the nextDalai Lama be found only from
among Tibetans there. This leaves one wondering how long the ‘Tibetan issue’ would bedevil
India-China ties.
Q U I C K R E A D
16 FRIDAY, 30 AUGUST 2019NEW DELHI POLICY
The beleaguered Indian economy is finally making a sensiblebargain with the rest of the world: “Take our billion-pluscustomers, give us jobs.”
Under a new foreign direct investment policy announced byPrime Minister Narendra Modi’s government on Wednesday,India is undertaking its biggest liberalization of single-brandretail in seven years. One major concession: Contentious localsourcing requirements will need to be met as an average for thefirst five-year period, not annually.
That’s a big help to Apple Inc., which will no longer have tostruggle with a 30% local procurement norm to open its long-awaited own store in India and will now have time to scale upwhat it buys from Taiwanese contractor Wistron Corp.’s Benga-luru factory.
Nor will it be necessary for companies to back every dollar ofIndian revenue with 30 cents of domestic sourcing. The likes ofIkea or H&M already source from India for their stores globally.But now they’ll get credit for it.
Ikea, for instance, has previously said that it might be buying$667 million in furnishings, furniture and trinkets from India by2020. Under the new rules, it can then sell goods worth $2.2 bil-lion in India annually—even if all of it is made in China or Bangla-desh. If it wants more headroom for expansion, it needs to buymore from the country for international markets.
Similarly, Apple, which tests the assembly of its latest iPhoneX in a Foxconn Technology Group factory near Chennai, can stepup the engagement to include other devices it sells globally.
The reforms have been years in the making. Beset by corrup-tion scandals and accusations of policyparalysis, the previous prime minister,Manmohan Singh, had risked splinter-ing his unwieldy coalition governmentin 2012 to open up the closely pro-tected consumer market, paving theway for Ikea to finally open its firststore in India in 2018—after a 12-yearwait.
Singh’s reforms came too late. Bythe summer of 2013, investors were making a beeline for the exit.His government fell the next year. The situation now has differ-ences and similarities. Having just returned for a second termwith a thumping majority, Modi is far more secure politically. Butthe economy is once again floundering. Six out of eight high-fre-quency indicators tracked by Bloomberg worsened in July. Autosales are crashing and a crisis of confidence in the financial indus-try is threatening to spiral out of control.
With unemployment at a 45-year high and consumption sput-tering in rural areas, the three export-oriented industries that cancreate the most jobs for the country’s bulging youth populationare textiles, electronics and auto. Multinationals that want a sliceof India’s spending are being told to help expand the middle classfirst.
As I wrote recently, New Delhi is no longer in denial, thoughit doesn’t have a good strategy to counter the slowdown.
The pragmatic stance taken on retail is the first good step thatgoes beyond damage control and toward filling a strategic gap.To sweeten the deal some more for Apple, New Delhi will allowit to sell online to Indian device buyers as long as the Cupertino,California-based company opens a physical store in two years. Anonline store for India is something Apple is poised to start withinmonths, Bloomberg News reported Thursday.
Apple’s eagerness is easy to explain. For one thing, the damagebeing done to the iPhone’s brand premium through heavy dis-counting by resellers on marketplaces run by Amazon.com Inc.and Walmart Inc.-owned Flipkart will be contained. India is theworld’s fastest-growing smartphone market and Apple’s shareis less than 2%. However, while demand for $400 to $600 smart-phones is currently modest, this top end of the Indian market isstill growing at a rapid 16% rate.
To play freely, what can Apple make in India and export to theworld? For now, some amount of software (something India isgood at) and assembly and packaging of devices may have to suf-fice.India isn’t really plugged into the global electronics supplychain. The trade war between Washington and Beijing is reshap-ing things, but those leaving China are more inclined to relocateto Vietnam, where Google may move production of its Pixelsmartphone, according to Nikkei. To make a success of the newretail policy, India must shed its notorious reputation of being anexporter-unfriendly place.
Importing components to re-export finished goods is a cus-toms nightmare. For example, the government may deny awaiver of import duty if what came into the country were tiresand an axle and what went out was a trailer. With less red tape,and even small improvements in infrastructure, India’s custom-ers-for-jobs bargain could start to pay off. BLOOMBERG
The pragmatic stance taken on retail is the first good step that goes beyond damage control
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In a change of strategy,Apple slashed the price of flag-ship iPhone XR in India in theJune quarter, leading to “dou-ble digit growth” in sales, evenas its global sales slipped. Applehas a 20% share of India’s pre-
coming customers to India’sfirst Apple retail store. It willtake us some time to get ourplans underway and we’ll havemore to announce at a futuredate,” Apple said in a statementon Thursday.
ment of distribution networks, useof technology in distribution aswell as bring in expertise in areassuch as marketing and client-ser-vicing. Fitch also expects the pro-posal, once implemented, to boostM&A in the fragmented insuranceintermediary market over themedium term,” the report said.There are 368 direct broker firms,60 composite brokers, and fivereinsurance brokers as of end-June 2018, according to the Insur-ance Regulatory and Develop-ment Authority of India.
On Wednesday, the Union cabi-net cleared changes in FDI regula-tions, including easing rules forforeign single-brand stores andpermitting FDI through the auto-matic route in contract manufac-turing and all areas of coal mining.
“The changes in FDI policy willresult in making India a moreattractive destination, leading tobenefits of increased investments,employment and growth,” thegovernment said.
“FDI inflows into India haveremained robust despite globalheadwinds. Global foreign directinvestment flows slid by 13% in2018, to $1.3 trillion from $ 1.5 tril-lion the previous year, the thirdconsecutive annual decline,according to UNCTAD’s WorldInvestment Report 2019… I pro-pose to further consolidate thegains to make India a more attract-ive FDI destination,” finance min-ister Nirmala Sitharaman had saidwhile presenting the Union bud-get proposals.
Railways takes Isro’s help in monitoring 700 trains real-time
bit.ly/2zzKxid
Insurance intermediary biz now opened up to foreign investors
Govt’s move will help bring more capital, which will boost investment, augment reach of intermediaries
Gireesh Chandra Prasad &
Shreya Nandi
NEW DELHI
The government willfront-load capital spend-ing this fiscal year in a bid
to support economic growth,finance minister NirmalaSitharaman said. Speaking toreporters in Guwahati, theminister said the governmentwill come up with more meas-ures to arrest the economicdownturn.
Front-loading, or spendingthe entire allocated amountsfor various projects early in thefinancial year rather than wait-ing for the last quarter, is typi-cally done to support growth.
However, Sitharaman’s con-tinued silence over a fiscal stim-ulus implies that big tax cuts oran increase in public spendingto counter slowing growth maynot be on the government’sagenda. India had slashed cen-tral excise duty by 4 percentagepoints across the board in2008-09 in response to theeconomic slowdown that fol-lowed the global financial cri-sis. Due to fiscal constraints, itmay not be easy for the govern-ment to offer that kind of taxcuts now. Federal indirect tax
She also promised to infuse₹70,000 crore into state-runbanks to improve balancesheets and help finance newprojects. “We recognized thatconsumption had to be given aboost. We shall be spendingconsiderable amounts forinfrastructure building.” Shealso said the government wascommitted to giving timelyGST refunds to businesses.
As per official data, growth inindustrial output deceleratedto a four-month low of 2% inJune 2019 from a revised 4.6%in May, indicating a demandslowdown. Merchandiseexports contracted by 0.37% inthe April-July period to $107.41billion from a year earlier.
The Reserve Bank of Indiacut the repo rate by 35 basispoints in its August 2019 mone-tary policy review, the fourthsuccessive reduction in therepo rate so far this year to helprevive growth. The rulingNational Democratic Alliancegovernment is committed toshow it is decisive in dealingwith economic headwindsamid worries of a global slow-down and criticism from theopposition on the govern-ment’s management of theeconomy.
Govt to front-load spending to aid growth: FM
Growth in industrial output decelerated to a four-month low of
2% in June 2019 from a revised 4.6% in May. RAMESH PATHANIA/MINT
IKEA began online sales in
Mumbai even before it opened
its store in the financial hub.
Suneera Tandon
NEW DELHI
The government’s deci-sion to permit foreignsingle brand retailers
begin online sales ahead ofopening physical stores willreduce their time for enteringthe Indian market and alsolower the entry barriers forsuch brands, said retail experts.
In 2015, the governmentrelaxed e-commerce rules forforeign single brand retailersinvesting in India by allowingonline sales over and abovetheir brick and mortar pres-ence. This is already being lev-eraged by brands such as Span-ish retailer Zara, fast fashionbrand H&M and, morerecently, IKEA.
In its revised policyannounced on Wednesday evening, the government acknowledged that opening stores before commencing online sales “creates an artificialrestriction and is out of sync with current market practices”.
As a result, brands areallowed to sell online beforeopening stores. It has, however,maintained thatthose applyingunder the singlebrand retail trad-ing policy will alsohave to open astore within twoyears of startingonline sales. Thepolicy change ispositive as it low-ers entry barriers for retailers,said Anil Talreja, partner,Deloitte India. “Before youtouch the Indian soil, you canbasically touch the Indian con-sumer now,” he said.
Online sales have pickedpace in India as more shopperslog on the internet to buy every-thing from phones to sneakers.Brands have closely followed suit.
In 2018, apparel retailerH&M launched its online salesin India, three years after itopened its first store in thecountry. More recently, the fastfashion label, which entered
India through 100% foreigndirect investment, tied up withonline retailer Myntra to sell itsclothes, shoes and accessorieson a third-party marketplace.
Earlier this month, IKEA, theworld’s largest furnitureretailer, began online sales inMumbai even before it openedits store in India’s financial hub,which would be its second inthe country. This is in line withIKEA’s global plans where it ispushing sales using e-com-
merce and evenopening smallstores with lim-ited inventory,besides buildingits signature largeformat stores.
Clearly, retail-ers and shoppersworldwide arerelying less on
physical stores as the mainstayof shopping for goods. In India,which is a still a huge brick andmortar market, revised policiesfor foreign retailers are clearlypointing to that trend. By 2020,India’s e-commerce market isexpected to touch $150 billionbecause of the presence of largeretailers such as Amazon andWalmart-owned Flipkart.
Earlier, brands could take upto a year to open a store fromthe time of applying for the sin-gle brand retail FDI under theautomatic route as they soughtthe right location, and shoredup hiring.
Retailers and shoppers are
relying less on physical stores as
the mainstay of shopping for
goods
body, the Goods and ServicesTax (GST) Council is scheduledto meet next month but theagenda will be decided closer tothe date.
“We shall bespending consid-erable amountsfor infrastructurebuilding. And forthat, post the bud-getary announce-ment, I went tothe extent of say-ing some of themilestones inpublic expenditure in infra-structure can even be broughtforward,” Sitharaman said.
She also indicated that moresteps will be announced to
boost growth. “Last week, I saidI will come back with two moresuch announcements sooner.That is a continuous process.Interactions with industry
stakeholders arecontinuing. Weshall be a respon-sive government(and) we shallcome back withmeasures that areasked (for) by thevarious groups,”the minister said.
Sitharaman hadlast week reversed a taxincrease on foreign portfolioinvestors, and announced stepsto boost the automobile sectorand deepen the bond market.
FM’s silence over a fiscal stimulus implies that an
increase in public spending may not
be on the govt’s agenda
and sticky iOS ecosystem.India’s startup ecosystem couldalso get a boost given Apple’spush towards mixed reality andaugmented reality.
“Given the souring ofUS-China relations, Apple islooking to reduce exposure toChina and while India mayseem like the next investmentdestination, it would take timeto develop a strong productionecosystem here similar to whatChina already offers. There isalso huge competition fromVietnam to attract Apple. ButIndia’s recent measures havecome at the right time,” TarunPathak, associate director atCounterpoint Research, said.
Despite its growing userbase, Apple still lags Chinesesmartphone maker OnePlus.
mium smartphone market, ledby OnePlus and followed bySamsung. This is however afraction of India’s overallphone market, where 95% ofpurchases are in the entry-levelbudget segment.
“Apple is a platinum stan-dard brand and its brick-and-mortar stores are its monu-ments. The moment a countrygets an Apple store it certifies adegree of permanence. AnApple store is like a Taj Mahaland once it opens, that countryhas arrived on the company’sglobal map,” brand expert Har-ish Bijoor said.
An increase in iPhone userbase in India could directlyenhance the appeal of otherApple products and servicesthanks to a consumer-friendly
Apple’s iconic stores areimmensely popular abroad,which also serve as a gatewayfor consumers to explore otherproducts such as iPads, iMacsand Apple Watches. However,while the policy change isincrementally positive for theCalifornia-based company andwould strengthen its percep-tion of India as an investmentdestination, it may not result inan immediate strategic shift.
“We love our customers inIndia and we’re eager to servethem online and in-store withthe same experience and carethat Apple customers aroundthe world enjoy. We appreciatethe support and hard work byPrime Minister Modi and histeam to make this possible andwe look forward to one day wel-
Navadha Pandey
NEW DELHI
India may have finally openedthe doors for Apple Inc. to setup its fully-owned flagship
stores under relaxed rules, butit’s unlikely to become a game-changer for the premiumsmartphone maker in thisprice-conscious market domi-nated by Chinese rivals. TheUnion cabinet on Wednesdayeased curbs on foreign single-brand retailers such as Apple,H&M and IKEA to run fully-owned stores by permittingthem to treat exports as 30%mandatory local sourcing, andallowing online sales for twoyears before opening physicalstores.
Rules eased, but India isn’t a low-hanging fruit for Apple
Apple lags behind Chinese smartphone maker OnePlus, which is
the leader in the segment followed by Samsung. AFP
Finance minister Nirmala Sitharaman had in the budget proposed to allow 100% FDI in insurance companies.
Shreya Nandi
NEW DELHI
The government’s deci-sion to permit 100% for-eign direct investment(FDI) in insurance inter-mediaries is expected to
help foreign brokerages buy intoIndian companies and deepen themarket in terms of new productsand technology. This could helpbring in global products, practices,and sales strategies to India’sinsurance market.
Insurance intermediaries arebrokers or agents who function aslinks between insurance compa-nies and customers.
Till now, FDI in the sector wascapped at 49% under the auto-matic route, including for insur-ance broking, insurance compa-nies, third party administrators,surveyors, and loss assessors.
However, the latest Union bud-get proposed to allow 100% FDI ininsurance companies and thedepartment of financial servicesissued a notification inthis respect on 27 August.
As insurance broking isa capital-intensive busi-ness, companies are inconstant need of funds toenter smaller towns andcities. Opening up thesector to foreign invest-ment could bring in more capital,which will boost investment andaugment the reach of intermedia-ries to larger customers.
“This is a welcome step for thelong-term development of theinsurance sector in India. FDI willbring in capital for this capital
intensive business along withglobal practices, products, andtechnology. It would increaseinsurance penetration and thus
generate long-term capital for theeconomy by channelising long-term savings,” said Gopal V.Kumar, consulting actuary, Radgo
& Co. Actuaries and Consultants.According to the notification
issue on 27 August, any non-insur-ance company, such as a bank with
more than 50% revenue from non-insurance business, will haveadhere to the respective FDI limitfor that particular sector.
“India’s move on insur-ance intermediaries willattract more internationalcompanies into the rap-idly growing Indian mar-ket and promote compe-tition within the sector,”Fitch Ratings said in areport in July.
“We believe increased interna-tional involvement, particularlyfrom developed markets, will con-tribute positively to the develop-
POLICY PUSH
WITH the opening up of the sector, there will be more capital, which will boost investment
THE move will help develop distribution networks and use of technology in the insurance sector
INSURANCE being a capital-intensive business, companies are in constant need of funds
THE sector has 368 direct broker firms, 60 composite brokers and five reinsurance brokers
How new FDI norms may help companies spread wings in India
BLOOMBERG
RAMESH PATHANIA/MINT
POLITICS FRIDAY, 30 AUGUST 2019NEW DELHI 17
SHORT TAKESm
Govt launches civil aviation jobs portal
bit.ly/30F71ue
103 private hydro projects fail to take off in Arunachal
Firms that won the contract to set up the projects lack the capacity to do so, says govt
leading cause of death. “Fit India is an idea whose
time has come, but it needs tobe properly and scientificallyexecuted, particularly directedtowards vulnerable groups inchildren, women and peoplebelonging to middle and low
socio-economic strata,” saidAnoop Misra, chairman, For-tis-C-DOC, Centre for Diabe-tes, Metabolic Diseases andEndocrinology. The Unionministry of health and familywelfare is running a NationalProgramme for Prevention
Madhya Pradesh CM Kamal
Nath still holds the post of
state Congress chief. HT
chief minister’s son NakulNath.
Singh and Scindia, who lostin their constituencies in thegeneral elections, continue tobe closely involved with theparty’s activities in the state.Scindia has also beenappointed as the chief of Con-gress’ screening committee for
the Maharashtraassembly elec-tions.
Sonia Gandhi,who is at the helmof affairs, maygive preference tomore experi-enced leaders, orthe “old guard”for key positions,
according to a section of partyleaders. However, other lead-ers differ.
“There is no clarity rightnow on any one name. It is notabout whether the leadershould be young or old. SoniaGandhi is looking at someonewho can take the party along.That really is the priority rightnow,” said a senior leader fromthe state.
Madhya Pradesh sends 30lawmakers to the Lok Sabhaand is thus crucial for theelectoral mathematics of theCongress.
Anuja
NEW DELHI
The Congress in MadhyaPradesh is looking at anorganizational reshuffle,
as several senior leaders of thestate unit of the party wereinducted into the cabinet ledby chief minister Kamal Naththat came to power in Decem-ber 2018.
The key challenge for Con-gress president Sonia Gandhiwill be to look for a “consen-sus” candidate for the positionof state party chief, who will beacceptable to all factions.
Chief minister Kamal Nathstill holds the post of stateparty president. The party’sstate working presidents JituPatwari and Bala Bachchan arestate ministers.
Brainstorming in the topleadership for replacing Nathas state party chief has alreadybegun and an announcementon his successor could happensoon, according to senior partyleaders. Nath was appointed asthe state unit chief in April2018 in the runup to the assem-bly elections.
“ M e e t i n g shave taken placeto deliberate onthe pendinga p p o i n t m e n t .Sonia Gandhi’sfocus is on choos-ing a candidatewho is acceptable to all threefactions in the state and issomeone who will be able totake all sections of the partytogether,” said a senior partyleader who is involved with theappointment process, request-ing anonymity.
Nath, former chief ministerDigvijay Singh, and formerUnion minister JyotiradityaScindia are the leaders of thethree factions in the party. TheCongress performed poorly inthe Lok Sabha elections in May2019 losing all seats, barringthe one that was won by the
Sonia faces tall order in finding replacement for Nath as MP party chief
Deliberations on the next state
party chief have begun and an
announcement is likely to be made soon
LS speaker Om Birla. HT
Shaswati Das
NEW DELHI
In fresh trouble for the Tri-namool Congress, the Cen-tral Bureau of Investigation
(CBI) on Thursday sought LokSabha speaker Om Birla’sapproval to prosecute threesitting TMC members of Par-liament (MPs) in the Naradasting operation case.
CBI is expected to nameTMC MPs Saugata Roy, KakoliGhosh Dastidar and PrasunBanerjee, besides former MPSuvendu Adhikari in thecharge sheet.
One person familiar withthe development said: “In con-nection with the Narada stingoperation of 2016, the agencyhas sought prosecution sanc-tion against three currentTMC MPs and one formerMP.”
TMC leaders did notrespond to calls seeking aresponse.
CBI on Wednesday alsoquestioned Mukul Roy, whowas a close associate of WestBengal chief minister MamataBanerjee, before quitting theTMC to join the Bharatiya Jan-ata Party (BJP), besides TMCMP K.D. Singh in connectionwith the Narada sting.
In 2016, Mathew Samuel,editor and managing directorof Narada News portal,released a sting video, whichshowed several TMC leaders,including MPs and ministers,allegedly accepting bribes oncamera. The video was airedjust ahead of the West Bengalassembly elections.
While the EnforcementDirectorate is also probing themoney trail in the case, severalTMC leaders have beenquizzed by the probe agencies.
In March 2017, CBI initiatedan inquiry into the allegationsand, based on the probe, theagency registered a caseagainst 12 leaders, includingMPs and West Bengal minis-ters, besides an IPS officer.
An FIR was lodged underrelevant sections of the Pre-vention of Corruption Act foralleged criminal conspiracy,bribery and criminal miscon-duct.
TMC chief Mamata Baner-jee has alleged several timesthat the ruling BJP was “sys-tematically targeting all oppo-sition leaders” in various cases.
CBI seeks Om Birla’s nod to prosecute TMC MPs in Narada case
Utpal Bhaskar
NEW DELHI
As many as 103 privatehydropower projectsin Arunachal Pradeshtotalling about 35gigawatts (GW) are still
to take off despite the government’sAct East policy focus.
This comes against the backdropof growing concerns on the delay inIndia’s plans to generate powerfrom rivers originating from neigh-bouring China.
The projects that are estimatedto require investments of about₹3.5 trillion were awarded to theprivate power producers by theArunachal Pradesh government,said three Union government offi-cials aware of the matter on condi-tion of anonymity.
The state government has nowapproached the Centre to explorewhether state-run power produc-ers such as NHPC Ltd would wantto take over the projects, said thethree people mentioned above.
The Arunachal Pradesh govern-ment has already issued termina-tion notices to 21 such projectstotalling around 2.5GW, the threepeople mentioned above said.
“Those projects couldn’t be con-structed. The work is at astandstill on all of them,”said one of the officials.“Those projects wereawarded by taking someupfront money or premi-ums from the private sectordevelopers. Not one ofthese projects could beconstructed,” said the official.
The government has been push-ing an economic agenda, especiallywith respect to long-pending infra-structure projects, keeping in mindthe geo-economics of the north-eastern region. The National Dem-ocratic Alliance (NDA) governmenthas also substantially increasedbudgetary support for the region.
A delay in building hydropowerprojects in Arunachal Pradesh onrivers originating in China willaffect India’s strategy of establish-ing its prior-use claim over thewaters, according to internationallaw. India is concerned that hydro-power projects planned in Aruna-chal Pradesh may be affected by theneighbouring country’s plan todivert water from rivers that flow
into the Brahmaputra towards thearid zones of Xinjiang and Gansu.
Arunachal Pradesh, which hasthe greatest hydropower potentialamong Indian states, awarded pri-vate companies contracts to buildfour hydropower projects thoughNHPC had prepared their detailedproject reports (DPRs), Mintreported on 8 October 2012. A DPR
forms the basis for implementingcapital-intensive projects, whichinvolve relocation and resettle-ment of project-affected personsand the ability to withstand geolog-ical surprises and also requires asubstantive investment of time andmoney. “The private sector compa-nies don’t have the capacity to setthem up,” said another of the offi-cials mentioned above.
The Comptroller and AuditorGeneral of India in a report, Per-formance Audit on Capacity Expan-sion in Hydro Power Sector by CPSEs(central public sector enterprises),tabled earlier in Parliament, saidthe power ministry should instructstate governments that allocationof projects above 100 megawattsneeds to be “fair, transparent and
competitive”.“The government of Arunachal
Pradesh is committed to harness ina time-bound manner, the hydropotential of Arunachal Pradesh,which is about 60% of India’spotential, in close cooperation withthe government of India, includingcentral PSUs,” said the state’s chiefsecretary, Naresh Kumar.
India’s north-eastern region,along with Bhutan, has atotal hydropower genera-tion potential of about58GW. Of this, ArunachalPradesh alone accounts for50.32GW. India at presenthas an installed generationcapacity of 357.87GW, ofwhich 13% or about
45.4GW comes from hydropowerprojects.
“Doors are open for projects inthe North-East particularly inArunachal Pradesh. Hydropowerwill play an important role in thedevelopment and integration of theregion with the mainland,” saidBalraj Joshi, chairman and manag-ing director of NHPC.
THE HYDROPOWER CONUNDRUM
INDIA has installed generation capacity of 357.87GW. Of this, 45.4GW comes from hydropower projects
ARUNACHAL Pradesh has the greatest hydropower potential among all Indian states
THE Arunachal govt has already issued termination notices to 21 pending projects totalling 2.5GW
IT has asked Centre to explore whether state-run NHPC can take over the delayed projects
Power play in north-eastern regionIndia’s north-eastern region, along with Bhutan, has a total hydropower generation potential of about 58GW. Of this, Arunachal Pradesh alone accounts for 50.32GW. While DPRs of 16 projects totalling 16.88GW in Arunachal Pradesh have been completed, 58 projects totalling 19.09GW are in the pre-DPR state.
Source: Government of IndiaDPR: Detailed project report
(in MW)
TotalDPR concurred 18,040
20,947
19,583
Pre-DPR stage
Yet to be allotted
No. of projectsArunachal Pradesh Sikkim Meghalaya Manipur Nagaland Assam16,878 520 270 66 186 120
Arunachal Pradesh Sikkim Meghalaya Manipur Nagaland Assam
13,3491,434 746 936 802 185
Mizoram2,131
Arunachal Pradesh Sikkim Meghalaya Assam19,094 668 1,125 60
16
58
1815 12 7 12 8 5
4 5 1
1 1 1 1 1
NAVEEN KUMAR SAINI/MINT
Neetu Chandra Sharma
NEW DELHI
Prime Minister NarendraModi on Thursdaylaunched the “Fit India
Movement”, highlighting theneed to stay healthy amid ris-ing instances of lifestyle disor-ders and non-communicablediseases (NCDs). The cam-paign was announced at anevent organized to celebratethe National Sports Day.
Public health expertsagreed with the PM’s view thatphysical activity has reduceddue to the advent of technol-ogy, leading to disorders suchas cardiovascular diseases,stroke, cancer, diabetes andobesity. The World HealthOrganization (WHO), too,blames unhealthy diet andlack of physical activity forincreasing instances of high
blood pressure, increase inblood glucose, elevated bloodlipids and obesity. In fact,NCDs, or metabolic risk fac-tors, lead to cardiovascular dis-eases, the primary reasonbehind premature deaths.
The burden of NCDs is con-siderable in India. Accordingto the Indian Council of Medi-cal Research (ICMR), the esti-mated proportion of all deathsdue to NCDs has increasedfrom 37.09% in 1990 to 61.8%in 2016. WHO has recognizeddiabetes as a growing chal-lenge in India with an esti-mated 8.7% diabetic popula-tion between the age group of20 and 70 years. As per theNational Family Health Survey2015-16, 11% of women (1 in 10)and 15% of men (1 in 7) of 15-49years are hypertensive. InIndia, the Global Disease Bur-den (GBD) 2015 ranks chronickidney disease as the eighth
and Control of Cancer, Diabe-tes, Cardiovascular diseasesand Stroke.
“Fit India Movement will bea very interesting campaignfor everyone—children, theelderly, the young and women,and it will be your own move-ment. I want tomake you awareabout fitness andfor a fit India, weshould unite toset some goals forthe country,”Modi had earliersaid in his weeklyr a d i o p r o -gramme, MannKi Baat.
Public health experts havecome out in support of Modifor the campaign. “The PrimeMinister rightfully points outthat walking was part of ourculture, where individualsused to walk 8-9km every day.
An appropriate built environ-ment, which was integral toour planning earlier, needs tobe brought back. Physicalactivity is known as the ‘won-der drug’ that prevents morethan 30 diseases,” said Shifal-ika Goenka, professor and
head of publichealth ethics,Public HealthFoundation ofIndia (PHFI).
“Through fit-ness and physicalactivity, we candecrease theh y p e r t e n s i o n ,diabetes, osteop-
orosis, cholesterol and cancerlevels, to name a few, in theentire population. We canimprove cognition in childrenand elderly, and improve men-tal health and lower depres-sion and improve productivity.This will also lower our health
care costs and improve eco-nomic productivity,” sheadded.
Apprehensions also remainbefore India achieves the “FitIndia” tag in the form of lacu-nas in pollution, infrastruc-ture, lack of safe public spacessuch as parks, walking routesand cycling tracks.
“WHO statistics say one infour adults globally is notactive enough, while morethan 80% of the world’s ado-lescent population is insuffi-ciently active,” said ShankarNarang, chief operating offi-cer, Paras Healthcare Pvt. Ltd.“An hour of sports and physi-cal activity every day must bemade mandatory in schools. Atthe same time, workplacesmust also be encouraged tojoin the movement by dedicat-ing 30 minutes of their dailyspace to some sort of physicalexercise,” he added.
Can PM Modi’s Fit India campaign help tackle rise in lifestyle disorders, diseases?
PM Narendra Modi during the launch of Fit India Movement at
the Indira Gandhi Indoor Stadium in New Delhi on Thursday.
RAMESH PATHANIA/MINT
Public health experts were in agreement with PM Modi’s view
that physical activity will help prevent diseases
After SC order, Yechury visits Srinagar to meet party colleague
New Delhi: Sitaram Yechury,general secretary of Commu-nist Party of India (Marxist), onThursday travelled to Srinagarto visit party colleague Moham-med Yousuf Tarigami, a dayafter the Supreme Court (SC)gave its approval.
Yechury, who had made twoprevious attempts to visit the region, is the first opposition leaderto enter Jammu and Kashmir since the Centre abrogated provi-sions of Article 370. PRETIKA KHANNA
Centre releases ₹47,436 crore for compulsory afforestation in states
New Delhi: The Centre on Thursday released ₹47,436 crore forcompulsory afforestation to increase green cover in states.
The funds can be used by state governments for afforestation,soil moisture conservation, wildlife management and catchmentarea treatment. SRISHTI CHOUDHARY
HT
Top ports on alert for attacks from ‘Pakistani commandos’
New Delhi: India’s two main ports said on Thursday theyhad been warned by the coastguard and intelligence offi-cials that Pakistan-trained commandos have entered Indiato carry out underwater attacks on port facilities.
The Mundra Port, run by Adani Ports and Special Eco-nomic Zone Ltd, and the state-owned Kandla Port hadasked their employees and ship operators to be vigilant,port officials and the ports said in advisories seen by Reu-ters. REUTERS
MINT
of the sector is often hampered due to non-cooperation of banksand his ministry was in talks with the finance ministry to addressthe issue.
Sarangi noted that the MSME sector creates maximum jobs atthe local level and with the lowest capital. Due to less burden onthe government and low investment, the risk for banks lendingto them is also low, he said. PTI
Trump: US to keep 8,600 troops in Afghanistan after deal with Taliban
Washington: US President Donald Trump on Thursday saidthat US troop levels in Afghanistan will drop to 8,600 if a deal isreached with the Taliban and that a permanent presence willremain. “We’re going down to 8,600 and then we make a deter-mination from there,” Trump told Fox News Radio.
He also said that if anotherattack on the US originatedfrom Afghanistan “we wouldcome back with a force like...never before.” US troops werefirst sent to Afghanistan afterthe 11 September 2001 terroristattacks on US soil carried out byAl-Qaeda. AFP
AFP
Pradhan begins Russia visit seeking investments in oil, gas fields
New Delhi: Oil ministerDharmendra Pradhan onThursday began a three-dayvisit to Moscow, inviting Rus-sian investment in refiningand petrochemical business.
Pradhan also met officialsfrom Russian oil companyRosneft, to discuss collabora-
tion between the two nations. PTI
’Lenders may be made answerable for denying loans to MSMEs’
Lucknow: Banks might be made answerable in future for refus-ing loans to eligible micro, small and medium enterprise (MSME)players, Union minister Pratap Chandra Sarangi said on Thurs-day. The minister of state for MSME stated that the development
HT
GOVERNMENT WILL FRONT-LOAD GOVERNMENT WILL FRONT-LOAD SPENDING: FM SITHARAMANSPENDING: FM SITHARAMAN uuP16P16
WILL PM’S FIT INDIA MOVEMENT WILL PM’S FIT INDIA MOVEMENT TACKLE DISEASE BURDEN?TACKLE DISEASE BURDEN? uuP17P17
China to showcase ‘advanced weapons’ at its biggest military parade on 1 October
bit.ly/32i0x57
tional community’s attentionfocussed on the region after severalcountries told Pakistan to sort outthe Kashmir issue with India bilat-erally. Islamabad has also warned ofa nuclear war breaking outbetween India and Pakistan.
When asked about the letter byPakistan’s minister for humanrights Shireen Mazari to the UN onalleged “human rights violations inKashmir”, Kumar said it was “noteven worth the paper on which itwas written”. He also dismissedcalls by international organiza-tions, such as Human RightsWatch, alleging rights violations,saying their assessments were notbased on facts. “There has been agradual but positive improvementof the situation on the ground,” headded.
New Delhi says it had been aware of the missile test, urges Islamabad to behave like a ‘normal neighbour’
SC extends interim protection given to former FM till 5 Sep
reach out to a greater numberof people. There will be pujapandals in cities also,” said theleader quoted above.
“We are getting requestsfrom various puja samitis andstate unit members who wanthome minister and BJP presi-dent Amit Shah, working presi-dent J.P. Nadda and Union
minister Smriti Irani to visitpuja pandals as special guests.The maximum number ofrequests are for these threeleaders. We have forwardedthese requests to our centralleadership and they will decideon the tour plan of senior lead-ers and Union ministers duringthe puja. We want several
Pakistan tests India-specific nuke missile, raises heat over Kashmir
Shashi Tharoor
@ShashiTharoor
I am relieved that KPCC have accepted my reply & this unfortunate & unnecessary episode is over. I am grateful to all those who have stood by me.
TWITTERVERSE
Amit Shah @AmitShah
Fitness is an important aspect of well being and a happy life. I thank and congratulate PM @nar-endramodi ji for launch-ing the ‘Fit India Move-ment’ and raising awareness about it.
Naveen Patnaik
@Naveen_Odisha
Tributes to hockey wizard #MajorDhyan-Chand on #National-SportsDay which com-memorates the legend’s everlasting legacy.
Japnam K. Bindra
NEW DELHI
The Supreme Court onThursday extended till 5September the interim
protection granted to P. Chi-dambaram against arrest by theEnforcement Directorate (ED)in the INX Media money laun-dering case.
A two-member benchheaded by Justice R. Banuma-thi and comprising Justice A.S.Bopanna also reserved the pro-nouncement of the order tountil 5 September. The ordershall answer two pleas—firstlywhether anticipatory bailshould be granted to Chidam-baram and secondly, whetherthe court can rely on the mate-rial collected by the probeagency to grant arrest.
According to legal provi-sions, the apex court has thepower to seek informationnoted in the “case diary” but forthe purposes of keeping a tabon the investiga-tion proceedingsand the probeagency. Thematerial cannotbe used by thecourt to ascertainw h e t h e r a naccused persons h o u l d b earrested as it is acorroborative evidence only.
The divisions bench alsodirected the ED to place beforeit in a sealed cover the materialwhich the probe agencywanted to produce for thecourt’s perusal. The said mate-rial has to be deposited withinthree days. The apex courthowever made it clear that thequestions as to whether the
material would be perused bythe court will be decided in its 5September order.
The legal counsels of Chi-dambaram also mentioned thepending petition challengingthe remand and extension ofremand by the CBI court. TheSupreme Court shall hear theremand petition against theCBI on Monday.
Continuing his arguments,Solicitor General TusharMehta, representing ED,strongly argued against show-ing the evidence to the accusedperson. He said that, “the art of
investigation isthat we reveal cer-tain things andchoose not to insome cases. If weconfront him with15 money trailsand he really has30, he will do hisbest to wipe outthe rest.” While
arguing further on not showingthe evidence to the accusedperson at pre-bail stage, Mehtasaid “this turns the ‘apple carton its head’. We have to say ‘yessir, this is the evidence, this ismy informer, and these are therecords I have’. I will have tocome to court at his conve-nience when he files for antici-patory bail.”
SC will hear on Monday the plea of Chidambaram challenging the remand by the CBI court in the INX Media case
front runner for the post ofBJP president.
The ruling party has made70 million new membersacross the nation since itsmembership drive was
launched in Vara-nasi by Prime Min-ister NarendraModi on 6 July,Nadda said.
“We have mademore than 5.81crore membersonline, over 62lakh membersthrough offlinemeans and people
could also become membersof the party by giving a missedcall. In total, we have madearound 7 crore members. BJPalready has 11 crore mem-bers,” said Nadda.
complete, then only electionsfor the national president willtake place. It is scheduled totake place in December,” saidJ.P. Nadda, working presidentof the party.
The tenure ofcurrent BJPpresident AmitShah, who isalso the Unionhome minister,is expected toend in Decem-ber. Nadda waschosen as theworking presi-dent to helpShah run the day-to-day oper-ations of the party and alsohelp with preparations for theforthcoming assembly elec-tions in Maharashtra, Jhark-hand and Haryana. He is the
Gyan Varma
NEW DELHI
The ruling Bharatiya Jan-ata Party (BJP) will startthe process of electing
its new party president byDecember this year, it said onThursday.
Organizational elections ofthe party would start in Octo-ber at the booth level, whichwill be taken up to the districtand state level elections, BJPmembers said. The election atthe national level will takeplace in December when anew BJP president will beelected.
“The process is to first holdbooth level elections, thendistrict and state level elec-tions. Once the process is
BJP to elect its party chief by Dec
Organizational polls would start in October at the booth level, taken up to district and state level polls,
say BJP members
Elizabeth Roche
NEW DELHI
In what is being seen as a delib-erate ratcheting up of tensions,Pakistan on Thursday said ithas tested a 290km rangenuclear capable missile. In
response, India said it was aware ofthe test, but dismissed the eventwithout commenting on it.
However, urging Pakistan tobehave like a “normal neighbour”,Indian foreign ministry spokesmanRaveesh Kumar strongly con-demned the “irresponsible” and“provocative” statements by Paki-stani leaders in recent days.Kumar’s comments come in thewake of a series of Twitter posts byPakistan Prime Minister ImranKhan, saying India was being gov-erned by “fascist” and “racist”administrations, besides warningof possible ethnic cleansing inKashmir.
“We stronglycondemn highlyi r r e s p o n s i b l estatements by Pak-istani leadershipon matters inter-nal to India. Theses t a t e m e n t sinclude references to Jihad and toincite violence in India, this isintended to project an alarmist sit-uation, which is far from groundreality. Pakistan needs to under-stand that the world has seen
through their provocative rhetoricbased on lies and deceit,” Kumarsaid.
Tensions between the two coun-tries have been running high since5-6 August when New Delhirevoked the special status accorded
to Jammu and Kashmir under theIndian Constitution, and desig-nated Jammu and Kashmir andLadakh as two separate Union ter-ritories. The move changes thecontours of future dialogue on the
Kashmir dispute with Pakistan. Pakistan condemned India’s
moves and has demanded that NewDelhi remove measures imposed inthe region in a bid to ensure law andorder. Islamabad has also promisedto raise the Kashmir issue at all
international fora,including theUnited NationsSecurity Council.In a briefing onThursday, Paki-stan’s foreign min-istry spokesmanMohammed Faisal
said the resolution of the Kashmirissue as per the UN resolutions wasits top foreign policy agenda, newsagency PTI reported.
Thursday’s missile test is seen asan attempt to keep the interna-
SIMMERING TENSIONS
ISLAMABAD has promised to raise the Kashmir issue at all international fora, including the UN
THE missile test is seen as an attempt to keep the world’s attention focused on Kashmir
PAKISTAN had earlier warned of a nuclear war breaking out between India and Pakistan
Pakistan Army spokesperson Asif Ghafoor (right) with Pakistani foreign minister Shah Mehmood Qureshi. AFP
Former finance minister
P. Chidambaram HT
Congress in Madhya Pradesh, is looking at the possibility of an organizational change.
See Page 17
Changes likely in MP Congress
CBI seeks Lok sabha Speaker Om Birla’s sanction to prosecute TMC MPs in Narada case.
See Page 17
Fresh trouble for Trinamool MPs
Govt’s decision to allow foreign firms will reduce their time for entering the Indian market.
See Page 16
New FDI norms boon for firms
DON’T MISS
103 private hydropower projects in Arunachal Pradesh totalling about 35GW are still to take off.
See Page 17
103 hydro projects stuck in Arunachal
Gyan Varma
NEW DELHI
Durga Puja, scheduled totake place in the firstweek of October, is
likely to become a bone of con-tention between the BharatiyaJanata Party (BJP) and the Tri-namool Congress (TMC)-ledWest Bengal government withsenior BJP leaders planning touse the festival to reach out topeople in the state.
BJP leader plan to talk, dur-ing the 10 days of the festival,about the crucial decisionstaken by the BJP-led NationalDemocratic Alliance (NDA)government at the Centreunder Prime Minister Naren-dra Modi to uplift the poor andstrengthen the security of thecountry.
The BJP plans to push for
further gains after winning 18of the 40 Lok Sabha seats in thestate in the recently held gen-eral elections with the TMCwinning the remaining 22. TheWest Bengal unit of the BJP hasdecided to request senior lead-ers and Union ministers to visitthe puja pandals in West Ben-gal during the puja. “Membersof the BJP will be part of at least1,200 puja samitis in the statethis time. Last time we wereonly part of 400 puja samitis.The number can increase as thetime of the puja comes near,”said a senior BJP leader.
The party has decided tofocus on organizing Durga Pujain rural areas of the stateinstead of in big cities and statecapital Kolkata. “The idea is toorganize several small Durgapujas in villages with the help ofvillagers rather than one bigpuja in cities, so that we can
Union ministers to be presentin West Bengal at the time ofpuja,” said a second BJP leader.
“Every senior party leader ofthe state is getting at least 10requests to become a chiefguest at a pujapandal. We arecollecting infor-mation from allthe leaders tohave a final countof the number ofrequests. Anotherproblem that thepuja samitis arefacing is that thestate government is denyingthem permission if the samiti isinviting BJP leaders. The stategovernment under chief minis-ter Mamata Banerjee is creatingdifficulties for puja samitis whoare inviting BJP leaders,” thesecond BJP leader said.
TMC leaders, however,
remain unfazed. “The BJP cantry to influence puja samitis butI do not think there will manytakers for the plan. It is for theorganizers to decide who toinvite but there may not be
many takers,” saidSougata Roy, sen-ior TMC leaderand a member ofParliament.
During the2017 Durga Puja,the immersion ofthe statues of thegoddess hadbecome a point of
confrontation between the BJPand West Bengal government.BJP leaders had accused thestate government of delayingthe immersion rituals to facili-tate Muharram. In 2018, theTMC had announced a sum of₹10,000 for all the 28,000 pujasamitis across the state.
Durga Puja festivities may be new flashpoint for BJP, TMC in Bengal
BJP has alleged that West Bengal chief minister Mamata Banerjee
is not allowing puja samitis to invite BJP leaders as chief guests. HT
BJP’s Bengal unit has asked party leaders to visit
the puja pandals during the 10-day festival to reach
out to people
Elizabeth Roche
NEW DELHI
Prime Minister Naren-dra Modi could have apossible face-off over
Kashmir with PakistanPrime Minister Imran Khanat the United Nations Gen-eral Assembly during hisweeklong visit to the USstarting 22 September.
Both Modi and Khan areexpected to address theUNGA on 27 September. Itis, however, not clear whowill address the session first.Earlier this week, Khan saidhe was the “ambassador” ofKashmiri people and vowedto raise the matter at all pos-sible international fora.
Modi’s schedule in the USincludes a stop in Houstonto address an energy con-clave for increased India-UScollaboration. He will alsoannounce the formation ofthe Disaster Resilient Infra-structure initiative duringhis visit.
Modi, Khan to address UN on 27 Sep
Tokyo safest city, Delhi at 52nd: studyTokyo is the safest city on the planet for the third year in a row, and six of the world’s top 10 safest cities in the world are located in the Asia-Pacific, according to the Economist Intelligence Unit’s Safe Cities Index released on Thursday. Mumbai and Delhi rank low in the index even as the study points out that India and China will see the fastest rise in population—of 1.4%—over the next decade. The index ranks 60 countries across five continents and measures on urban safety indicators such as digital, infrastructure, health and personal security.
OVERALL SCORE
DIGITALSECURITY
HEALTHSECURITY
Osaka
Tokyo
Mumbai
New Delhi
Karachi
Lagos
1
2
50
51
59
60
INFRASECURITY
Singapore
Osaka
Mumbai
New Delhi
Dhaka
Caracas
1
2
50
57
59
60
PERSONALSECURITY
Singapore
Copenhagen
Mumbai
New Delhi
Caracas
Lagos
1
2
37
41
59
60
Tokyo Singapore Mumbai New Delhi Caracas Lagos
1 2 45 52 59 60
1
2
47
47
59
60
Tokyo
Singapore
Mumbai
New Delhi
Ho Chi Minh City
Yangon
RANK
City
PARAS JAIN/MINT
LIVEMINT.COM
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FRIDAY, AUGUST 30, 2019
