Indian start-ups take off - Electronic Payment Services...MARCH 2016 VOL. 02 ISSUE 06 `60 RNI NO: UPENG/2014/62662 ISSN 2455-0426 PR NO: UP/GBD-212/2015-17 Date of Publishing 04-03-2016

SEPTEMBER 2016 VOL. 02 ISSUE 12 `60 RNI NO: UPENG/2014/62662 ISSN 2455-0426PR NO: UP/GBD-212/2015-17Date of Publishing 04-09-2016 Date of Posting 07-09-2016

Coherent higher edu policy a distant dream? P.24 I India’s killer roads P.34

Indian start-ups take off

2 I September 2016 www.governancetoday.co.in

www.governancetoday.co.in September 2016 I 3


Indian start-ups take offAmong all initiatives that the Narendra Modi government has taken, Startup India has found the mutest coverage in mainstream Indian media. This is understandable to an extent because the entire start-up space is still shrouded in a mist of elitism for most ordinary folks. But probe a little, you will find a world which is teeming with activity; energetic and passionate activity, full of entrepreneurial energy, willing investors and most important of all, brimming with dreamers who are not afraid to bet on their ideas. Ideas that address unfulfilled needs, even unknown needs of ordinary and not so ordinary people. In a world where ideas have started to matter more than money, an ecosystem has finally taken roots which tests the ideas, bets on them, rewards the performers and provides a respectable and decent exit route to those whose ideas are found wanting. Welcome to the new India; the third largest start-up country, a country that is asking questions and is providing answers in form of solutions.

Editor-in-ChiefAjit Sinha

EditorAnand Mishra

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Vikramjeet BhattiMD, India and SAARC, Stratus

Thyagarajan SeshadriVice President-Banking Relations, EPS

THE NEED FOR ALWAYS-ON APPLICATIONS HAS BECOME MORE PERVASIVE ACROSS ALL MARKET SECTORS

THERE IS TREMENDOUS POTENTIAL FOR WHITE LABEL ATMS TO LEAD FUTURE DEPLOYMENT

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ePAISA IS DIGITIZING INDIA BY DIGITIZING THE POINT OF SALE

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COMPANIES WILL SPEND LOT OF MONEY IN BA/BI TO GET AN INSIGHT INTO THE DATA TO CREATE NEW OFFERINGS

S.K. BasuAdvisor, Government and Oracle Practice, Team Computers

Siddharth AroraCo-founder, ePaisa

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IIM BILL: IS COHERENT HIGHER EDUCATION POLICY A DISTANT DREAM NOW?

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STRENGTHENING NATIONAL HEALTH PROGRAMS USING IT

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2nd INDIA’S PAYMENT CORRIDOR: EVENT REPORT


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India is a young country and it will remain one for a long time to come; for the most part when rest of the world would start getting old, Indian population will still remain in working age. This demographic dividend is also manifested

in the entrepreneurial energy that the young generation possesses. As economy gets diversified and information age matures with proliferation of mobile phones and internet, it is natural that more ideas would emerge and aim for commercial success. This trend is getting more visible in India now with greater number of start-ups emerging out of all corners of the country.

Last year, India became the third largest start-up country which is no mean achievement. Incidentally, it beat both China and Israel which have been considered more mature ecosystems for start-ups. Also, the funding for start-ups has tremendously grown in last few years. These are all good news.

The government is also leaving no efforts spared when it comes to supporting the start-up culture the country. Earlier this year, it initiated the Startup India initiative which is a great move considering it provides immense support for new

entrepreneurs to set up their businesses and offers benefits like easier tax regime and lesser bureaucracy in terms of registration and reporting etc. It is heartening to see that the government is realizing the problems that these entities are facing and is working on creating ways in which the new ideas manage to find a way around the system.

However, the problem at a broader level still remains which is stifling the entrepreneurial spirit in a more diffused way. Financing is perhaps the most visible and troublesome aspect of the environment in which most entrepreneurs work. Beyond the hallowed IT start-ups, there is still darkness for traditional start-ups who face an uphill task in securing even the working capital; banks, which are still working on their old format of documentation, insist on three years financial, and there are virtually no sources of funding for non IT start-ups in venture capital world. According to the CEO of a start-up, if he had three years’ financial, he would not be seeking small working capital funding from banks in the first place.

But still, a new beginning has been made which needs to be nurtured and supported so that more and more start-ups succeed and become large companies which could provide employment in turn and contribute to the national economy.

An area which is still not addressed enough is the improvement of the quality of education which would churn out more ideas in academic institutions that students would later work on to create start-ups. A significant fraction of ideas and start-ups in the developed world germinates in colleges and institutions of higher learning where there is an environment to challenge the traditional thoughts and where new ideas are encouraged. However, that is not the case in India and as such, even the incubators at premier engineering and tech institutions are not working at their best. This is something that the government needs to work on.

Best regards

Ajit SinhaEditor-in-Chief

Editorial

Start-ups need enabling environment


THUS THEY SPOKE

I made it very very clear that United States stands in strong partnership with India against all terrorism no matter from where it comes from, no matter what form it takes. As I said there is no good terrorists, bad terrorists. Terrorism is terrorism.

John KerrySecretary of State, USA

Jio means to live and to be alive to very opportunity. World’s demand for digital oxygen, that is data, is growing exponentially. Jio aims to fulfil this need of Indians. Access to information will now know no barriers. Mukesh Ambani

CMD, Reliance Industries Ltd.

We have come a long way since my playing days. There is a lot of government support these days but that is not going to give us medals. The help is there for top athletes but there is hardly anything happening at the grassroots.

Pullela GopichandCoach, Badminton

It (Bharatvarsh) is a great concept. It is not only educating and informative but also talks about the greatness of the country and greatness of the people who have been there before… It talks about the rich culture and heritage of our country.

Anupam Kher Actor, Bollywood

I am very happy today. Historic verdict of the Honourable Su-preme Court on Singur land acquisition is a landmark victory of Maa-Mati-Manush. Even though, we came back to power with a huge mandate, I had a discontent that we could not succeed in Singur issue. But, now I can die peacefully. Mamata Banerjee

Chief Minister, West Bengal

Please help the government as Jammu and Kashmir is passing through tough times as we are working hard to bring normalcy in the Kashmir Valley. That does not mean that you (officials) will take benefit of that (unrest) and will do nothing here (in Jammu) by saying that nobody is watching us.

Mehbooba MuftiChief Minister, J&K


The Centre will soon provide universal insurance cover to all those who get injured in road mishaps so that they are not deprived of immediate medical care. The road transport ministry in its proposed amendments to the Motor Vehicles Act has provisioned for a fund that will ensure free treatment of grievously injured victims. The provision gains importance considering the fact that at least five lakh people were left injured in road crashes last year and according to government reports at least 50 per cent lives can be saved, if they get quick medical care within the first one hour of a crash. Road crashes claimed 1.46 lakh lives in 2015. According to the amendment bill introduced in Lok Sabha recently, the fund can be created by collecting certain cess or tax, any grant or loan made by the central government or any other source of finance as may be prescribed by the government.

Insurance cover to road accident victims soon

RBI sets customer liability norms in case of e-frauds

Smart Ganga City scheme launched in 10 citiesUnion Ministers Uma Bharti and M Venkaiah Naidu jointly launched ‘Smart Ganga City’ programme in 10 cities located along Ganga to set up Sewage Treatment Plants and improve drainage network there on hybrid annuity mode on public private partnership basis. The ministers launched the works through video conferencing and were joined in by District Magistrates/Mayors of cities/towns. Haridwar, Rishikesh, Mathura, Varanasi, Kanpur, Allahabad, Lucknow, Patna, Sahibganj and Barrackpore are the cities where the programme will be implemented in the first phase. Water Resources Minister Bharti said the government plans to form District-Level Mentoring committees in Ganga basin states - on the lines of High-Level Task Force chaired by Cabinet Secretary - to keep an eye on programme implementation. In the hybrid annuity model, a part of capital investment will be paid by government through construction linked milestones and the balance amount through an annuity over the contract duration up to 20 years to ensure longevity.

Alarmed over the increase in grievances about unauthorized electronic transactions, the Reserve Bank of India recently introduced a policy of ‘zero liability’ for customers in third-party frauds if they are reported within three days. This means banks will have to make good the losses suffered by customers. In cases where the victim notifies the fraud between four and seven days after coming to know about it, the liability will be capped at Rs 5,000. The RBI, in its draft notification, said that if a bank employee is responsible for the fraud, the customer must get his money back irrespective of whether it is reported in time or not. The three-day time limit for reporting a fraud will start from the day the customer receives an intimation about the transaction from the bank. This can be either by way or an SMS, email or statement. The proposed rules will apply to all electronic transactions.

GOVERNANCE WATCH


The Union government recently appointed new governors for Assam, Manipur, Punjab and a lieutenant governor for Andaman and Nicobar Islands. Dr Najma Heptullah, who resigned from the Union Cabinet in July, will be the new governor of Manipur. She will take over from V Shamuganathan, the governor of Meghalaya, who was holding the additional charge of Manipur from September 30, 2015. VP Singh Badnore, a BJP leader from Rajasthan, has been made the governor of crucial poll-bound Punjab. He replaces Kaptan Singh Solanki. Banwari Lal Purohit, a three-time MP from Nagpur, has been appointed new governor of Assam replacing Padmanabha Balakrishna Acharya. Prof Jagdish Mukhi, a BJP leader from Delhi, has been named the lieutenant governor of Andaman and Nicobar Islands in place of Lt General (Retd) A K Singh. In another development, retired IPS officer Farooq Khan, who once spearheaded anti- militancy operations in Jammu and Kashmir, was appointed as the administrator of Lakshadweep.

New governors for three states Govt. set to ban cash transactions over Rs 3 lakh

Next Budget may advance to January

Looking to change the British-era legacy of presenting the Union Budget on the last day of February, the Union government may advance the date by a month. While a final decision is yet to be taken, according to reports, the government is considering completing the budget exercise before the end of the financial year on March 31 so that policy transmission is faster and departments are able to spend the funds from the start of the year instead of waiting until May for money to be actually allocated. Along with the Budget, the government seeks parliamentary approval for undertaking spending during the few weeks of new financial year. The move comes at a time when the Centre has decided upon introducing a slew of changes in economic policy from next financial year, along with changes in the way the budget has been presented.

Seeking to prevent black money circulation in the economy following recommendations from the Supreme Court-appointed Special Investigation Team, the government is set to bar cash transactions over Rs 3 lakh. The government, however, is yet to decide on the SIT’s other suggestion to bar cash holdings over Rs 15 lakh due to opposition from trade and industry, as per reports. The Rs 3 lakh-limit is aimed to ensure that transactions are made using credit or debit cards, cheques or drafts which can be easily tracked. Despite the crackdown on unaccounted money, authorities continue to unearth several transactions involving purchase of jewellery or even cars in all-cash deals. The finance ministry is also trying to promote use of plastic money and recently did away with transaction charges for government services. In the past, businesses have cited payments to workers, especially smaller players, to justify large cash holdings.

GOVERNANCE WATCH


In a bid to attract international students and get IIT recognised among the list of top international educational institutions, the Joint Admission Board of IITs recently decided that students from Afghanistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives, Singapore, the UAE and Ethiopia will be allowed to directly appear for the JEE (advanced) test, skipping the JEE (main) that Indian students have to take. This is being done to showcase India’s soft power. In any case, foreign students would not eat into the seats meant for Indians. In all international rankings, one of the key parameters is international students and IITs lose out in a big way despite scoring well on other parameters. Foreign nationals will be given seats under supernumerary category. IIT-Bombay has been entrusted with the job of implementing the programme. Exam centres will be set up in these countries except Pakistan which has been left out due to home ministry’s objection.

Students from 9 countries can now appear for JEE (advanced) directly

Centre mulls Rs 2,000 crore package for refugees from PoK

With PM Narendra Modi pitching for the rights of those living in Pakistan-occupied Kashmir and Gilgit-Baltistan regions of Pakistan, the government has proposed a Rs 2,000-crore package for people displaced from PoK living in India. The home ministry is expected to place the details of the package before the Cabinet for approval soon. According to reports, the J&K government has identified 36,348 such families which will get around Rs 5.5 lakh each. Refugees from Pakistan, mostly from PoK, were settled in different parts of Jammu, Kathua and Rajouri districts over a period of time. They do not have the status of permanent residents. Some of the families were displaced during partition in 1947, and others during the 1965 and 1971 wars with Pakistan. The displaced people can cast their votes in Lok Sabha polls but not in the elections to the Jammu & Kashmir assembly.

The central government is examining the functioning of regulatory bodies governing Indian medicine and homeopathy, after having focused on reforming the controversy-hit Medical Council of India (MCI). According to reports, a high-powered committee headed by Niti Aayog vice-chairman Arvind Panagariya, which had suggested scrapping of MCI and other path-breaking reforms for medical education, will examine how to make Indian medicine and homeopathy regulation more accountable and improve standards. The move is part of Modi dispensation’s strategy to revamp professional regulatory bodies for healthcare. Just as in the case of MCI, other regulators too have become stumbling blocks towards expansion, especially when it comes to ensuring quality education in Indian medicine and homeopathy. “It was noticed that the college owners themselves have become part of regulator which is very serious,” as per reports quoting a source.

GOVERNANCE WATCH

Homeopathy watchdog rejig likely soon


As the second unit of the Kudankulam power plant got synchronised, India’s civil nuclear programme touched two landmarks, one being the Kudankulam project turning a page on protests and a legal challenge over its safety parameters in the Supreme Court, and second, India touching the 6,000MW mark in nuclear power. When the output of Unit II gets scaled up to a full 1,000MW, which is expected in coming two months, India’s 22 nuclear power reactors will collectively be able to generate 6,780MW of power. Besides that, the Nuclear Power Corporation of India Limited is planning to commission four more reactors in the coming one year. The two 1,000MW nuclear units built with Russian assistance have made Tamil Nadu the highest consumer

of nuclear power on a daily basis. Kudankulam I and II are also the last nuclear units in India built with foreign collaboration that will not attract the liability clause legislated after the India-US nuclear deal.

GOVERNANCE WATCH

Task force to be set up for next three Olympics

India hits 6,000MW mark in nuclear energy

With India getting only two medals in the Rio Olympics, Prime Minister Narendra Modi recently announced his government’s decision to set up a task force to create a strategy to help sportspersons prepare for the next three Olympics. The task force would cover infrastructure, training and selection. He made the announcement at a Cabinet meeting. The PM announced that “a task force will be set up to prepare a comprehensive action plan for effective participation of Indian sportspersons in the next three Olympic Games - 2020, 2024 and 2028,” read a statement from government spokesperson. The announcement comes against the backdrop of India’s two medals at the recently concluded Olympics in Rio de Janeiro, which brought into focus the lack of facilities and support for sportspersons in the country. The task force may also look into steps to make officials accountable, to address repeated charges of apathy and lack of interest.

Recording “solid improvement”, manufacturing sector growth touched a 13-month high in August bolstered by expansion in new works as well as acceleration in buying and production levels, says a survey. The data will cheer policymakers after an official report showed Indian annual economic growth slowed in the April-June quarter to 7.1 per cent, short of expectations for 7.6 per cent in a poll. The Nikkei/Markit Manufacturing Purchasing Managers Index rose to 52.6 in August from July’s 51.8, marking its eighth month above the 50 level that separates growth from contraction. The new orders sub-index, which takes into account both domestic and external demand, was 54.8 in August - its highest since December 2014 and indicating robust demand for Indian manufactured goods. That pushed factories to increase production and the output sub-index climbed to a 12-month peak in August.

Manufacturing growth jumps to 13-month high in August


The prestigious Rajiv Gandhi Khel Ratna award was conferred recently on four Indian Olympians by President Pranab Mukherjee in New Delhi. Shuttler PV Sindhu, wrestler Sakshi Malik, gymnast Dipa Karmakar and shooter Jitu Rai were awarded the highest sporting honour of the country for their contribution in their respective fields during a beaming ceremony at the Rashtrapati Bhawan. This was the first time in the history of National Sports Awards that four athletes were chosen for the Khel Ratna honour, owing to the three girls’ exquisite show in Rio. In 2009, boxers Vijender Singh and MC Mary Kom and wrestler Sushil Kumar were given the award together. Sindhu scripted history by winning the silver in women’s singles badminton in the recently-concluded Rio Olympics, while Sakshi took bronze in the women’s 58kg freestyle category at the Games. Dipa finished fourth in the vault event in Gymnastics at the Rio Olympics 2016.

Sindhu, Sakshi and Dipa awarded Rajiv Gandhi Khel Ratna

AIR goes beyond Baloch, can now be heard in parts of Pakistan

RBI opens door to Islamic finance

The Reserve Bank of India has proposed working with the government to introduce interest-free banking to tackle financial exclusion for religious reasons, potentially opening Islamic finance to the largest Muslim minority population in the world. India’s central bank made the proposal in its annual report recently, as departing bank governor Raghuram Rajan hands over the reins to close ally Urjit Patel. The proposal marks a shift in stance by the RBI, which has previously said Islamic finance could be offered through non-bank channels such as investment funds or cooperatives. That has meant an estimated 180 million Muslims in India, the country’s second-largest religious group, have been unable to access Islamic banking because of laws that require banking to be based on interest, which is forbidden in Islam. The RBI said it would explore introducing interest-free banking products in consultation with the government, a key detail as this opens the prospects of supportive legislation.

All India Radio programmes can now be heard in regions of Pakistan-occupied Kashmir (PoK) as well as in other parts of the neighbouring country. The development comes after the Centre boosted the signal capacity of AIR transmission by installing a new 300 KV Digital Radio Mondial (DRM) transmitter in Jammu, according to reports. The range of programmes transmitted from Jammu station of AIR can now be heard beyond and areas of Pakistan’s Punjab province. With the introduction of DRM transmission, the sound waves are loud, steady and uniform, without missing gaps due to absence of disruption of signal. The programmes aired from Radio Kashmir Jammu station of All India Radio are now flawlessly audible across PoK and beyond. As a result, not only Radio Kashmir Jammu is widely heard in PoK but is also becoming increasingly popular with each passing day, reports quoted officials as saying.

GOVERNANCE WATCH


Kickstarting the process to resolve the long standing plight of Rohingya Muslims, Myanmar leader Aung San Suu Kyi and former UN chief Kofi Annan oversaw the first meeting of a panel tasked with ending the violence between Buddhists and minority Rohingya Muslims. The plight of the Rohingya Muslims has dogged the ability of the Suu Kyi government, which won a landslide election victory last year, to bring peace to the western part of the country. Speaking during the meeting, Suu Kyi said “This is an issue that we have failed to meet squarely and fairly, and to which we have not been able to find the right solution. We hope that this commission will help us to find solutions to the problem.” The violence between Buddhists and Muslims in the Northwest Rakhine region of the country has a long history. Buddhists have long maintained that Rohingyas are Bangladeshi illegal immigrants and as such deserve no rights in the country.

Pakistan’s cabinet has approved a long-term defense agreement with China, a week after the US and India inked an agreement to increase military cooperation. According to a Pakistani newspaper report, the cabinet considered a summary on initiating negotiations on a draft agreement for the pact to enhance defense and security cooperation in diversified fields. The report further said that the draft agreement was based on principles of mutual respect for each other’s territorial integrity, sovereignty, non-integration and non-interference in each other’s internal affairs, equality and cooperation for mutual benefits, and peaceful coexistence for strategic gains in defense and

security, including arms and technology transfers. Former Pakistani PM Yousaf Raza Gilani had sought a defense deal with China in 2011, which the Chinese leadership had advised against fearing that it might strain Islamabad and Beijing’s relations with Washington and New Delhi

China, Pak reveal defense agreement

Suu Kyi gets down to work on Rohingya problem

GLOBAL WATCH

With G20 Summit in progress, North Korea fired three ballistic missiles into the sea off its east coast on Monday Sep 5. The missiles were fired from a region south of the capital Pyongyang and flew about 1,000 km, hitting Japan’s air defense identification zone, according to the South Korea’s Office of the Joint Chiefs of Staff. “We are still analyzing details but this is a grave threat to our nation’s security, and we express deep concern,” the Japan Defence Ministry said in a statement. Shortly after the missile launches, South Korean President Park Geun-hye and Japanese Prime Minister Shinzo Abe met on the sidelines of the G20 summit and agreed to cooperate on monitoring the situation. The missile launches were the latest in a series of launches by North Korea this year in violation of U.N. Security Council resolutions that ban all ballistic missile-related activities by the country. Pyongyang rejects the ban as infringing its sovereign right to pursue a space program and self defense.

DPRK fires missiles


British PM Theresa May has said she wanted Britain to become a global leader in free trade as it exits the European Union. Speaking to reporters after the G20 summit, she said “As the UK leaves the EU, I’ve set out our ambition to become the global leader in free trade.” She further said that there would be no retreat towards protectionism and that there had been positive reactions from partners about securing new trade deals. “The leaders from India, Mexico, South Korea and Singapore said that they would welcome talks on removing the barriers to trade between our countries,” she said. She further added that the UK can be “optimistic” about the relationships the government will forge in the wake of the vote to leave Europe. The newly crowned British PM spelled out her confidence that Britain’s economy remained fundamentally strong despite concerns that the Brexit vote could lead to a possible downturn.

German Chancellor Angela Merkel suffered a stinging setback in a provincial election when her center-right bloc was overtaken by far-right party to second place in Mecklenburg-Vorpommern, her home state. It is the first time in an election that a far-right party has overtaken Ms. Merkel’s bloc of Christian Democrats and their Bavarian sister party, the Christian Social Union. Election results released early Monday showed that Ms. Merkel’s Christian Democrats had received 19 percent of the vote, against 21 percent for the far-right Alternative for Germany party. The center-left Social Democrats, with whom Ms. Merkel governs nationally, got 31 percent in the state. The election was held a year after Chancellor Merkel had agreed with Austria that the two countries would admit thousands of mostly Syrian refugees then trapped in Hungary, with several hundred desperately marching on foot toward the West. These elections were seen as an indicator of Ms. Merkel’s political strength and as the precursor to the next year’s national elections.

Merkel suffers setback in local election

UK to become leader of free trade

GLOBAL WATCH

In a development that is bound to rile China, a new generation of young Hong Kong politicians advocating a break from Beijing became lawmakers for the first time. It was the biggest poll since mass pro-democracy rallies in 2014 failed to win concessions on political reform, leading to the emergence of a slew of new parties demanding more autonomy from Beijing. A record 2.2 million people voted in the city-wide election for members of the Legislative Council (LegCo), Hong Kong’s lawmaking body, as fears grow Beijing is tightening its grip on the semi-autonomous city. It was the highest turnout since Hong Kong was returned to China by Britain in 1997 under a handover agreement guaranteeing its freedoms for 50 years. Observers branded their victory

“a strong message to Beijing”, which has railed against candidates supporting a split from China. Nathan Law, 23, the leader of the 2014 “Umbrella Movement” rallies is the prominent face of the pro freedom wining candidates.

Pro freedom leaders gain ground in HK LegCo


COVER STORY

Anand Mishra

Among all initiatives that the Narendra Modi government has taken, Startup India has found

the mutest coverage in mainstream Indian media. This is understandable to an extent because the entire start-up space is still shrouded in a mist of elitism for most ordinary folks. But probe a little, you will find a world which is teeming with activity; energetic and passionate activity, full of entrepreneurial energy, willing investors and most important of all, brimming with dreamers who are not afraid to bet on their ideas. Ideas that address unfulfilled needs, even unknown needs of ordinary and not so ordinary people.

In a world where ideas have started to matter more than money, an ecosystem has finally taken roots which tests the ideas, bets on them, rewards the performers and provides a respectable and decent exit route to those whose ideas are found wanting. Welcome to the new India; the third largest start-up country, a country that is asking questions and is providing answers in form of solutions. And it is in this paradigm that the Startup India initiative provides a structure which could facilitate the next giant leap for Indian unicorns.

Third biggest

India has made rapid strides in start-up space and has emerged as one of the world’s largest startup centers over last few years. With 4,200-4,400 startups currently operating, the country has emerged as the third largest startup nation in the world, behind only the United States and the United Kingdom. Both Israel and China are



START UP


just behind India. According to a report of Nasscom (Start-up India- Momentous Rise of the Indian Start-up Ecosystem, 2015), this number could cross 12,000 by 2020, a cumulative annual increase of more than 22 per cent. There are ten so-called unicorns, defined as startups with a valuation of more than USD 1 billion, namely Flipkart, InMobi, MuSigma, Ola, Paytm, Quikr, Snap-deal, Shopclues, Hike and Zomato. In 2014, start-ups created 65,000 new jobs in the country, in 2015 about 85,000 more new jobs were created; by 2020 this number is expected to shoot up to 250,000 jobs annually.

The funding for start-ups has also seen tremendous rise of late. According to Nasscom, the funding for start-ups went up from USD 2.2 bn in 2014 to USD 4.9 bn in 2015, a hefty jump of 125 per cent. More than 390 start-ups received funding in 2015 as against 179 in 2014. Also,

the overall venture capital (VC)/ private equity (PE) funding and seed capital funding went up by 2.2 times and 6.5 times, respectively, in 2015 over 2014. Reflecting increased confidence in the Indian start-up ecosystem, the number of active investors went up from 220 in 2014 to 490 in 2015. During 2015, eight out of the ten largest investors in Indian startups were foreign firms.

In terms of segments, B2C, comprising of eCommerce and aggregators is the biggest segment and gets most funding, whereas hyperlocal eCommerce and consumer services are the have seen the sharpest rise in funding. Over last couple of years, higher value addition services such as analytics, internet of things (IoT), health-tech and payments have also emerged strongly. Because of a large and growing domestic market, most startups including unicorns, are domestic market focused

and have not been deriving any significant earning from export of services or sales.

Geographically, Bengaluru, Delhi and Mumbai have been preferred for founding and setting up startups, in that order. These three cities together host about two thirds of all Indian startups. Hyderabad and Chennai make for the next level of preferred destination. According to the Global Startup Ecosystem Ranking 2015, of Compass, Bengaluru, widely considered the “startup capital” of India, was ranked 15th in the global ranking of the best startup ecosystems. The city is home to about 26 per cent of all Indian start-ups, making it the biggest startup-hub in India and the third largest in the world. Delhi NCR is home to nearly 23 per cent of Indian startups, mostly headquartered in Gurgaon and Noida. Mumbai occupies the third slot with 17 per cent of the country’s startups.

What explains the rise?

So what explains this phenomenal rise in the country’s start-up system? Experts cite three major broad themes on which the trend is riding. First, the diffusion of technology and its spin offs in multiple ways have enabled activities that were not possible earlier. Second, the culture of entrepreneurship has grown. Third, the financial ecosystem has started to mature.

Technology has completely altered the way business is done, both from customer and business perspectives. Infrastructure requirement has shrunk as entrepreneurs can access the market through the internet, thus obviating the need for a large part of the market chain. With middlemen reduced to almost nil, the margins have never been better for businessmen even as prices for customers have declined across the board. Also, the ways of marketing have changed with social media ruling the roost. Furthermore, the ease of communication has reduced the costs for startups and

Unicorns are those start-ups that have been valued at over USD 1 billion. According to latest reports, India is home to 10 unicorns that have been valued at USD 1 billion or more.

INDIAN UNICORNS

Start-up Valuation as per latest round of funding (USD Bn)

Headquarter Segment

Flipkart 16 Bangalore, Singapore

eCommerce/Marketplace

Snapdeal 7 Delhi NCR eCommerce/Marketplace

Olacabs 5 Mumbai On-DemandOne97 Communications (Paytm)

4 Delhi NCR Fintech

Mu Sigma 1.5 Bangalore, Chicago

Big Data

Hike 1.4 Bangalore SocialShopclues 1.1 Delhi NCR eCommerce/

MarketplaceZomato Media 1 Delhi NCR SocialInMobi 1 Bangalore Big DataQuikr 1 Mumbai Social

Source: Compiled from various sources


increased the reach and complexity of capabilities available to entrepreneurs in a faceless manner.

But the fact that technology has improved the environment in which businesses can be started and operated is only one side of the story. The other side of the story is the willingness of financiers to put in money in untested yet exciting ideas. This willingness is a new phenomenon in Indian market. As venture capitalists try to spread their wings outside traditional zones of US, UK and Israel, India has emerged as a great place where ideas are being generated at a great speed and the market is ready to absorb new products, services and solutions. This increased marketability of ideas is bringing more money to the table. This also explains the

GLOBAL START-UP ECOSYSTEM RANKING (2015)

Place Ranking Performance Funding Market Reach Talent Start up Experience

Growth Index

Silicon valley 1 1 1 4 1 1 2.1New York 2 2 2 1 9 4 1.8Los Angeles 3 4 4 2 10 5 1.8Boston 4 3 3 7 12 7 2.7Tel Aviv 5 6 5 13 3 6 2.9London 6 5 10 3 7 13 3.3Chicago 7 8 12 5 11 14 2.8Seattle 8 12 11 12 4 3 2.1Berlin 9 7 8 19 8 8 10.0Singapore 10 11 9 9 20 9 1.9Paris 11 13 13 6 16 15 1.3Sao Paolo 12 9 7 11 19 19 3.5Moscow 13 17 15 8 2 20 1.0Austin 14 16 14 18 5 2 1.9Bangalore 15 10 6 17 20 12 4.9Sydney 16 20 16 17 6 10 1.1Toronto 17 14 18 14 15 18 1.3Vancouver 18 18 19 14 15 11 1.2Amsterdam 19 15 20 10 18 16 3.0Montreal 20 19 17 16 13 17 1.5

emergence of specialized investors such as seed funds, angel funds, take out financiers etc. in the Indian ecosystem.

As the third piece of the riddle, the Indian society has started to accept risk takers. More students in premier engineering institutes are today opting to test a new idea rather than just resting easy with a cushy job. And the healthy aspect of this trend is that it is not only the rich students from metros who are willing to walk alone, even students from smaller cities are not shying away from starting on their own, which is unique as they have a more grounded perspective of unfulfilled needs at local levels in tier II and tier III cities. Also, the stigma of failing is beginning to weaken, though at a very slow rate, which allows entrepreneurs to get

up and try again once they have fallen in an attempt. Realizing this, the government has also took steps that failed entrepreneurs are not penalized heavily (more on this in later segment). Finally, handholding has become more prominent now with more and more academic institutions starting their own incubators and allowing students to brainstorm, test and fine-tune ideas hitherto impossible.

And all of these are riding on three important enablers. First, the economy has been growing at a good clip even as many other economies have shown signs of weakness. A good growth has allowed the USD 16 billion e-commerce segment to do well which has lured more entrepreneurs and funders to bet on this segment which is the biggest in start-up space. Second, the declining

Source: Compass blog


In order to scale up the start-up ecosystem in India, Nasscom has started the 10,000 start-ups initiative. The initiative seeks to provide incubation, funding and support to 10,000 tech start-ups by 2023. It is aimed to assist young entrepreneurs by bringing various stakeholders together, including incubators, accelerators, angel investors, venture capitalists, startup support groups, mentors and industry experts, and by bridging the skill gap within the ecosystem. It also organizes and supports workshops, meet ups and hackathon events at various places across the country. The 10,000 Startups Warehouse program, a one-of-its-kind incubation and co-working space program present in 10 cities, and which is an element of the broader 10,000 start-ups initiative, has helped over 30 startups raise capital, helped 8 companies getting acquired, and many others have benefited through customer connects and impactful mentoring of the program. The initiative also has some other remarkable programs like Nasscom Industry Partnership Program, designed to foster sustained engagement between large corporates and innovative ventures, and Innotrek, through this initiative, selected tech start-ups are given a chance to go to Silicon Valley, get access to global VCs and connect with some of the most renowned tech giants.

NASSCOM’S 10K START-UPS

prices of smart phones has allowed rapid proliferation, which coupled with the equally rapid proliferation of internet, has enabled people to surf more while on the go. As per a report by Counterpoint Research, at around 220 million, India has toppled the US as the second largest smart phone user country. Further, at a shade below 35 per cent penetration, there are over 462 million Internet users. This shows the scale of market for various start-up services and solutions, especially in tech related space. Third and a very important enabler has been the rising gap in valuations of startups in India and in developed markets. Because Indian start-ups are valued much reasonably, their attractiveness to foreign investors has increased.

But some sticky problems remain

In a recent development, two of India’s unicorns, namely Flipkart and InMobi shifted their headquarters to Singapore, which reveals that all in not well with the Indian ecosystem and there are gray areas which if not addressed, may prevent

India from claiming its rightful place in the start-up world. While Flipkart and InMobi got highlighted but they are not isolated cases. More and more smaller startups are making Singapore their home even though they more or less earn their total revenue from the Indian market and their entire workforce is located in India. According to one estimate, approximately 200 Indian startups relocate to Singapore every year, and the trend is increasing.

So what does Singapore offer that India does not? The simple answer is that the island nation is at the top of the “ease of doing business” ranking, where India features at number 130. Regulation regarding reoccurring payments (the major source of revenue for software companies offering their products on a subscription basis) forces a lot of firms to set up business abroad in order to process these. Another issue is the difficulty in complying with bureaucracy, which the government hopes to address by the reforms in the Startup India initiative. So, even as tax breaks are proposed to be given as part of government assistance, it does not help much, as startups

tend to not make any profits during their first years.

According to experts, the context and environment which startups germinate and operate in matters a great deal. India’s startups have suffered from challenges in starting, running and closing businesses. According to The Doing Business index, while India has recently improved in the parameters like starting a business, dealing with construction permits and getting electricity, but has dropped in parameters such as accessing credit and paying taxes. With GST, the problems arising out of complex taxation system which varies from state to state would hopefully be solved leading to improved environment.

Then there are issues at educational level. While many academic institutions have started incubators, industry’s complaint is that research at universities is often not applicable or accessible to startup ecosystem. This is on top of the fact that the research itself is often lacking marketability. These factors constrain the success chances of spinoffs from universities. Also, the education system is not geared to impart skill and problem identification/ solution training, which limit growth of entrepreneurship. India consistently ranks very low on innovation indices and the poor innovation climate is bane for startup culture.

As for financing, while it is true that money flow has increased tremendously, the reach has not necessarily widened. The venture money has a habit of flowing to the top players which have already established. This explains the fact that the major portion of new rounds of funding has restricted to top 25 per cent of the start-ups. Also, the financing is geographically concentrated with NCR, Mumbai and Bangalore cornering over 90 per cent of total start-up financing in 2015. These, along with Chennai, also accounted for nearly 80 per cent of the total angel funding. So far, funding has also shown a bias in favor of entrepreneurs graduating top end institutes. A two month


PROMINENT INCUBATORS AND ACCELERATORSstudy done by YourStory, a startup news website, last year showed that 60 per cent of the series-A funding raised by startups during this period went to those founded by alumni of the IITs or IIMs.

Also, access to early stage capital is a still an issue. Lack of angel investment is a major lacuna in the start-up financing ecosystem and makes up for only 7 per cent of early-stage investment compared to 75 per cent in the US. And those venture capital funds that exist in India, prefer to invest in firms that are already generating revenues, thus leaving the seed capital financing a largely vacant slot. Further, venture capitalists prefer to make a few bigger investments rather than many smaller investments, leaving small ticket borrowers high and dry. Typically, entrepreneurs seeking Rs 5 million or less are highly unlikely to find an early stage investor. Broadly, those entrepreneurs, who don’t have a disruptive, high tech idea, often falter by sidelines on the venture street.

Getting policies right

There is no denying that start-up system is primarily a private sector domain and private sector will continue to play the dominant role in the nurturing of start-ups in the country, the role of the government is very important in that it has to provide an environment in which ideas can emerge, start-ups can be created, nurtured, financed, marketed, and businesses and employment are generated. It also has to provide incentives for all stakeholders to give their best and also a cushion so that failures don’t kill the enterprising spirit. Realizing the importance of the segment, government is working on multiple steps to improve the business environment, improve technical skills and fill in the funding gap at the early finance level.

Earlier this year, the government launched the Startup India initiative to give a push to start-up culture in the country. The program incentivizes startups by exempting them from both corporate taxes for

a period of three years. It also offers relaxation in certain labor laws for start-ups and promises improved processing times when dealing with government bureaucracy. A INR 100 billion fund-of-funds has been set up for investing into startups. The program has set some criteria for qualification to avail these benefits; for instance, the start-up should be no more than five years old, should have a turnover not exceeding INR 250 million, and it should innovate, develop or commercialize new products, processes or services that are driven by new technology or intellectual property.

To begin with, government incubators will “license” startups for eligibility of the program, but gradually private incubators will also be allowed to do the same. According to YourStory, nearly 60 per cent of Indian startups are estimated to be eligible to take part in this program. To increase the

support to incubators, allocation to the Department of Science and Technology (DST, under the Ministry of Science and Technology) has been increased by 17 per cent. DST would be setting up 25 tech-focused incubators and will also fund 50-80 startups with 5 to 10 million INR each.

Action is also been seen at state level where many governments are either working on or have rolled out policies for supporting startups. States like Karnataka, Rajasthan, Kerala, Odisha, Gujarat, West Bengal, UP and Jharkhand have all offered various incentives for setting up start-ups, including incubation services, tax benefits and easier registration and financing norms.

Improving business environment is a crucial aspect of bettering the start-up ecosystem and positive development is visible on these too. For example, the goods and services tax (GST), which has been passed by

Incubator/ accelerator

Support areas

Microsoft Ventures Mentorship, tech guidance, networkingT-hub Mentorship, tech support, networkingOracle Cloud Startup Accelerator

Mentorship, tech support, networking with customers

10,000 start-ups Mentorship, tech guidance, networkingTLABS Mentorship, networking, co-working spaceGSF Mentorship, networking, initial capitalAxilor Mentorship, operational support, scale up programGoogle Launch Pad Mentorship, tech guidance, networkingTarget Mentorship, networking, co-working spaceCitrix Tarining, co-working space91 springboard Mentorship, networking, co-working spaceIndia Angel Network

Mentorship, tech support, seed funding

Zone Startups India Mentoring, equity participation, co-working space

Besides these, there are institutional incubators such as SINE, IIT Mumbai; Technology Business Incubator, IIT Delhi; Centre for Innovation, Incubation and Entrepreneurship (CIIE), IIM Ahmedabad; and NSRCEL, IIM Bangalore, that are providing incubation service and helping entrepreneurship at their respective campuses.


Compliance based on Self-Certification Startups shall be allowed to self certify compliance with various labour and environmental laws

Startup India Hub The hub to be created as a single point of contact for the entire Startup ecosystem and to enable knowledge exchange and access to funding

Legal Support and Fast Track Patent Application at Lower Cost A panel of facilitators to be deployed by the government to assist in filing of IP applications, 80 per cent rebate to be given in filing of patents

Faster Exit for StartupsIn the event of a business failure, easier exit for startups to be allowed, swift and simple process for Startups to wind-up operations

Providing Funding SupportA fund to be set up with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years

Credit Guarantee Fund for StartupsCredit guarantee mechanism through National Credit Guarantee Trust Company (NCGTC)/ SIDBI planned with a budgetary Corpus of INR 500 crore per year for the next four years

Tax Exemption to startups for three yearsProfits of Startup initiatives exempted from income-tax for a period of 3 years

SALIENT FEATURES OF START-UP INDIA INITIATIVE

the center and is currently being ratified by states, will be a big relief in terms of reducing complexity of the tax laws. To allow start-ups to have wider access to finance, the Securities Exchange and Exchange Board of India (SEBI) has relaxed rules for start-ups to list, and for investors in such start-ups to sell their holdings. However, the most fundamental reform is the new Bankruptcy law which would allow time-bound settlement of insolvency and enable faster turnaround of businesses. This law will allow entrepreneurs to recover faster from failed ventures.

The start-up ecosystem of India has evolved rather rapidly over last few years and in last couple of years, serious money has flown in, which has its own positives and negative aspects. On the positive side, it encourages more entrepreneurs to come up with an idea that addresses an unfulfilled need. It also rewards successful ventures with successive rounds of funding which helps larger companies emerge from small set ups, as unicorns have shown. However, as the experience has shown, the money has remained risk averse and focused only on top end high-tech IIT-IIM club of entrepreneurs. This leaves most ideas unfunded. Hopefully, government’s efforts would bear fruits and make funds available for unglamorous ventures too. At systemic level, there is still a vacuum at very early stage funding which is the most complex part of the financing lifecycle.

Broadly, things are moving in the right direction as private sector has started to focus on problem areas and governments at central and state levels have started to work on improving the ease of doing business and compete for the start-ups. At the end, it needs to be realized that from the hundreds of start-ups of today, tomorrow’s unicorns will emerge and provide employment to thousands. As such, a nurturing environment needs to be provided to bright ideas so they can bloom to fullest.

[email protected]



IIM bill: Is coherent higher education policy a distant dream now?

Dr Jitendra K Das

The current IIM Bill under consideration by the government to be passed as an Act of Parliament has as its

hallmark the autonomy to IIMs for all aspects, such as, fee to charge, faculty selection, curriculum development, admissions, etc. except selection of Director and Governing Board members. It is reported that the government’s final view on this was that to meet the objectives of the IIMs this bill needs to be liberal in outlook and a must if the IIMs are to leap-frog to the next stage. After this bill is passed, IIMs will be able to grant MBA and PhD degrees instead of PGDM and Fellow certificates, respectively.

activities for the next academic year. It may be noted that some of the non-government institutions in India have been rated better than a few of the well known IIMs by some reputed B-school rankers. This is to be seen in the light of very different and contrasting regulatory framework governing the IIMs and the non-government institutions offering MBA/PhD equivalent programs, so far.

The first IIT in India was set up at Kharagpur in 1951 and there are now 16 IITs. The first IIM was set up at Calcutta (now Kolkata) in 1961 (IIM Ahmedabad was incorporated a few days later) and there are 19 IIMs in place now. All these have been set up as institutes of national

This is a wonderful initiative by the government. In contrast, the non-government institutions offering PGDM and Fellow certificates are regulated by AICTE which in its 2010 notification mandated that for these institutions the fees, curriculum, admissions, etc. will be decided/ approved by AICTE or a relevant government body. This notification was challenged collectively by these institutions then and is before the Honorable Supreme Court of India awaiting a final decision. Every year since then an extension of status-quo prevailing prior to this 2010 notification of AICTE is granted by the Honorable Supreme Court of India for these non-government institutions to commence various

HIGHER EDUCATION


importance. All IITs and IIMs have been set up outside the university system with their own Board of Governors (BoG) consisting of representatives from the government, social and corporate sector headed by a non-executive Chairman from the industry and with all executive powers vested in the Director as head of the institution. This was thought so way back in 1951 for setting up the first IIT. And, similarly so in 1961 when the first IIM as an autonomous institution was set up outside the university system. Obviously, at these times the government must have had some specific considerations for setting up these institutions as autonomous organizations. It is easy to speculate that for these ‘new age’ institutions the government must have wanted to give them nimbleness in decision making as well as independence from over regulations to be able to perform as desired. These aspects must not have been considered achievable in the then university system. Looking back, considering the immense contribution the IITs and the IIMs have made to India, it is easy to see now that the decision to form these IITs and the IIMs as independent organizations was a landmark initiative of the government. But, one point that is quite apparent now is that the government then did know that within the university system in India institutions of the performance level expected of an IIT or an IIM could not have flourished. So, rather than to fix the university system to be able to foster world class institutions—a difficult task—it was decided to create these new institutions outside the university system. Thus, the inability of the university system in India to foster world class institutions remained ignored. It is, thus, unfortunate that no university has so far been ranked in the top 100 in any reputed international rankings. Exception being of IISc, Bangalore that is not a university per se but was established in 1909 and made into a ‘Deemed University’ in 1958 and was the first Indian institute to feature on Times Higher Education

World University Rankings for engineering and technology in the year 2015-16 at 99th position.

Thus, with the formation of the first IIT in 1951 a parallel higher education system to grant degrees commenced in India. But not quite so yet! The IITs had the authority to grant degrees, but the IIMs could not as they were registered as societies, and as a result IIMs could give only Post-Graduate Diploma in Management (PGDM) that was much later given equivalence to an MBA degree by the Association of Indian Universities (AIU), surprisingly a non-constitutional body. Thus, began the way of higher education in India with three different governing models,

Grants Committee (formed in 1944) be reconstituted on the general model of the University Grants Commission of the United Kingdom with a full-time Chairman and other members to be appointed from amongst educationists of repute. The University Grants Commission Act was passed in 1956. On the other hand, AICTE was established in 1945 as an advisory body and in 1987 given statutory status by an Act of Parliament. AICTE is responsible for proper planning and coordinated development of the technical education and management education system in India. Medical Council of India (MCI) and Distance Education Council (DEC) (now under UGC) are not being covered here for brevity.

Over a period of time, both UGC and AICTE came to be known for their arduous way of regulating higher education akin to a ‘license raj’ or the ‘inspector raj’, if you will, that India is familiar with as the core of governance in India until the reforms in industry announced in 1991 kicked in. IITs and IIMs (and IISc) are not regulated by any of these two regulators and they have done well. The ground truth is that no university or an institution under the regulation of UGC or AICTE have been rated in top 100 universities in a reputed international ranking that can be taken as a benchmark for world class education. Of course, a few things under larger Indian system have been a hindrance to achieving world class status, such as, diversity in nationalities among students and faculty members, compensations levels of faculty and passing out students, etc. But, this can have, at worst, a miniscule impact. Much needs to be done to not only reform, but completely change the Indian higher education system.

It is essential to have a competitive environment in higher education that ensures both public and private funding. It must, however, be noted that higher education is an option to pursue for career growth by an individual, unlike elementary education that may be considered

the universities under UGC, IITs through the IIT Acts and the IIMs on their own as registered societies. This kind of multiple academic governance and the associated degree/PGDM granting systems do not exist anywhere in the developed world.

It may, however, be noted that soon after Independence, the University Education Commission was set up in 1948 to look into the Indian university education and suggest improvements to suit the then and future needs and aspirations of the country. It recommended that the University

Over a period of time, both UGC and AICTE came to be known

for their arduous way of regulating higher education akin to a ‘license raj’ or the

‘inspector raj’, if you will, that India is

familiar with as the core of governance in India

until the reforms in industry announced in

1991 kicked in


essential for a decent survival. The institutions must constantly keep developing and reinventing itself considering sweeping changes in ways technology is changing and the way technology is being deployed to harness resources available and people’s capabilities. Thus, the institutions must be very responsive and innovative in the ways they do things. The role of regulators becomes crucial and critical in achieving these ends.

education must not be an end in itself; rather, it must have a defined purpose and the performance expected of a regulator would achieve just that.

To meet the huge demand for education facing India, private sector participation in higher education must not only be encouraged, but rather be incentivized. It is crucial to have better and greater coordination of activities and the government as

private investment in higher education and also recognize the necessity of the financial autonomy for the private institutions. Among many possibilities of incentivizing private funding, if only a tax rebate incentive is given to private funding for ‘not-for-profit’ education institutions, the government would be able to mobilize about three times the money it has forgone as tax revenue, into the education system.

well as the private institutions must co-exist and mutually support to fill in the gaps in higher education. Also, government must consider making regulations based on need and be objective driven. This means all higher education institutions in India must have a common regulatory framework and be not divided on government versus privately funded institutions very much akin to a common corporate law that governs private and government corporations in India. All such institutions may, for sure, be not-for-profit. The government must encourage

One objective way to involve the regulators to contribute positively could be for them to also ensure a certain percentage of universities/institutions under their regulation to figure in the top, say, 200 of some named international rankers, such as, the Times Higher Education World University Rankings, or the Quacquarelli Symonds (QS) Rankings, etc. This kind of performance expectation from the regulators may help them become more responsive to the changes sweeping the world; else, they may further get distanced away from the need of the time. Regulating

A policy for privately funded university/institution with the kind of regulatory freedom similar to as enjoyed by the IITs and the IIMs has the potential to produce dozens, if not scores, of world class universities/institutions in about 10 years. A comparative data on public and private universities in the USA would be an eye-opener. Such a policy framework is not yet even in a discussion mode. The writer is the Director of FORE School of Management, New Delhi. The views expressed are personal



Stunted growthWith around 48 million, India has the largest number of stunted children, says WaterAid

Ramesh Kumar Raja

Although India is said to be the world’s fastest growing economy in the world, it is home to the

largest number of stunted children in terms of volumes in the world, much ahead of smaller economies like Nigeria, Pakistan and Ethiopia. The startling revelations have come to the fore in a report titled ‘Caught Short - How Lack of Toilets

and Clean Water Contributes to Malnutrition’ brought out by WaterAid, an international development charity. The report reveals 48 million children in India, or two in every five under the age of five, are suffering from stunted growth, which affects their physical development as well as cognitive and emotional development.

Mentioning that India has the highest concentration in the world of people practising open

defecation, the report talks about how high rates of open defecation have a strong correlation with increased rates of stunting, as faeces in the environment contaminate hands and surroundings and spread disease and infection. Nigeria and Pakistan rank second and third with 10.3 and 9.8 million children stunted respectively. The Southeast Asian nation of Timor-Leste tops the list of countries having the highest percentage of children who are

India is home to largest number of stunted children

HEATHCARE


stunted at 58 per cent.It must be noted that globally

159 million children under the age of five are stunted - one in four children of this age. Stunting is defined as children having low height for age and indicates that children have not developed as they should, physically or cognitively. Stunting is a consequence of malnutrition in the first 1,000 days from conception until age two. It is largely irreversible after the age of two, making those first 1,000 days critical to a child’s development.

As per the report which was released recently, currently, more than 650 million people in the world do not have access to clean water and more than 2.3 billion do not have access to an adequate toilet. Diarrhoeal diseases caused by dirty

water and poor sanitation are the second biggest killer of children under five after pneumonia, taking 315,000 young lives every year. Even those children who survive severe bouts of diarrhoea are at risk of having their lives, and life chances, forever changed.

The report says that some 140,000 children under five in India die each year of diarrhoeal diseases related to the lack of these basic services. Around 50 per cent of malnutrition cases are linked to infections, including chronic diarrhoea, caused by lack of safe water, sanitation and hygiene (WASH) including hand washing with soap. It says that in the developing world, lack of clean water, sanitation and hygiene (WASH) is a major contributor to malnutrition

and one result of this is stunting, where severe and prolonged under-nutrition makes children shorter than normal for their age and affects their emotional, social and cognitive development.

According to WaterAid India’s policy manager Arundati Muralidharan, “Water, sanitation and hygiene are important determinants of nutrition. With open defecation rampant in India, frequent diarrhoea hinders the ability of children to absorb nutrients. India has made significant efforts to improve the nutritional status of children and women, but the beneficial impact of these efforts are threatened by poor WASH.”

[email protected]

Open defecation has a strong correlation with increased rates of stunting, as faeces in the environment contaminate hands and surroundings and spread disease and infection


Rishi Kohli

The Goods and Services Tax (GST) Amendment Bill, which was passed by the Rajya Sabha on August 3, is

by far the most potent tax reform in India which will see the light of day, almost 25 years after the process of economic liberalization initiated in 1991. It seeks to impose one uniform tax on goods and services bought and is destination based, i.e. it will be imposed when consumers like us buy goods and services. The present taxation system is more production based and the GST essentially

Get into a DIY regime to offset first year GST hiccups

modifies that to being consumption based. But how does that change our day to day life is what must be going through everybody’s mind?

To begin with let us prepare ourselves for the reality that the cost of all services that we avail today as an integral part of our daily lives, is sure to go up. Experts have suggested a GST rate between 18-22 per cent. Even assuming the lower end of the band being implemented and given that the present tax rate on Services is 15 per cent, all services like eating out, buying travel tickets, watching movies, legal services, chartered accountant

services, banking and financial services, insurance, transportation and logistics, dry cleaning services, gym or salon services- all are likely to get dearer. The counter argument is that given that we consumers pay anything between 25-26 per cent taxes on manufactured consumer goods like cars, batteries, mobile phones, day to day hardware and other consumer electronics items and the GST will help in bringing down their prices, any spikes in household budgets will therefore be balanced out.

That logic is likely to sustain in the medium to long term, when the

TAXATION


base effect wanes and producers see benefits from reduced logistics cost flow and reduced inflation. In the first year of GST however, there is likely to be inflationary pressures which you will have to deal with arising out of increased working capital requirement by industries due to increase in rate of service tax on advertisement services, information technology services, security or manpower services etc. which will likely be passed on to the consumer.

To offset such woes in the first year, it might be advisable to accelerate the inculcation of a Do-it-Yourself or DIY regime into your and your family’s day to day life. DIY is already a rage in large parts of the globe and has had great salience in India as well in recent times. So if washing machines are likely to get cheaper, it is time to you got into the habit of planning your week with time kept aside for washing your own clothes, if you have not done so already (yes, it is still not common even in urban Indian households). Or get the romance back into cooking a meal together as a family for entertainment, instead of going to eat out at the drop of the proverbial hat. DIY kits are also available today and are quite easy to use and convenient as well, to do your own grooming at home instead of your weekly date with the salon.

Of course, this does not mean that the occasional pampering at the salon is not allowed, but if planned and spaced out, it will do a lot to help you garner benefits of the GST to its fullest. Another example of a subtle change in lifestyle could be bringing the family long drive back into your weekly ‘must dos’ over the movie, given car prices are also likely to come down in the long term and petrol and diesel will remain untouched by GST. Yes, GST is a revolution. Not only does it have the ability to fundamentally change our tax system, but it is sure to change for the better, our lives as well in the long term.

The writer is the MD of ProAlpha


Strengthening national health programs using IT

Jitendra Tiwari

Government of India’s Ministry of Health and Family Welfare comprises of Department of Health

and Family welfare and Department of Health Research. The major programs run by the Ministry are for eradication of communicable diseases like HIV/AIDS, Tuberculosis, Vector Borne diseases, Integrated Disease surveillance program for communicable diseases and Leprosy; non communicable disease control for diseases like, iodine deficiency disorder, National Oral Health Program, National Mental Health Program, National Program for Prevention and Control of Deafness and Blindness, Universal Immunization Program and Polio Eradication Program. Pradhan Mantri Swasthya Suraksha Yojna was initiated in 2004 for correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services and also to augment facilities for quality medical education in the countryby setting up AIIMS

and Medical Colleges all over the country. The Ministry also runs Poor Patients’ Financial Assistance Program, under which the ministry provides grants aid for treatment of the underprivileged through Health Minister’s Cancer Patients Fund, Rashtriya Arogya Nidhi – a revolving fund and Health Minister’s Discretionary Grant. Different budgetary provisions are made under each of these programs. To upgrade the health infrastructure facilities, the Ministry of Health and Family Welfares provides grants to state governments. Other National health programs include Rashtriya Varishth Jan Swasthya Yojana, an extension of tertiary level activities of National Program for Health Care of the Elderly (NPHCE) during 12th Five Year Plan, National Program for Prevention and Control of Fluorosis (NPPCF) and National Tobacco Control Program (NTCP). The Rashtriya Swasthya Bima Yojna is another major program of MoHFW for providing health insurance in order to get treated in the empaneled hospitals.

How ICT is being usedInformation and Communication

Technology are being widely used for reporting, educating, medical consulting and counseling, monitoring and evaluation of programs run by the ministry. Recently, the Online Appointment and Queue Management System along with Electronic Health Records and Digital Health Records of patients have been introduced in premier Government Health facilities including AIIMS. The government is planning to introduce this system in all the states and integrate it with digital health cards.

In order to provide specialized medical consultation facilities to remote locations, the telemedicine system is also initiated at few locations.

The National AIDS Control Organization, which was a separate department under Ministry of Health and Family Welfare has used BI and GIS system to monitor the Remote Reporting Units and track the infected patients and their treatment.

A countrywide Information

HEALTHCARE


and Communication Technology (ICT) network connecting all District Headquarters, State Headquarters, major medical colleges and Central Surveillance Unit (CSU) at National Centre for Disease Control (NCDC) has been established with support from National Informatics Centre (NIC) and Indian Space Research Organization (ISRO). Central Surveillance Unit has been established with the funding of World Bank and 9 States, viz., Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttarakhand and West Bengal. Under Integrated Disease Surveillance Program (IDSP), data is collected on epidemic prone diseases on weekly basis (Monday – Sunday) and the trend is closely monitored. On the basis of this report, Rapid Response Teams are created to diagnose and control the outbreak.

To monitor the performance of NRHM (National Rural Health Mission) program, the Health Management Information System (HMIS) Portal was launched in November 2008. This is a web-based application softwarewhich has been developed to collect, compile and disseminate data/ information on various critical parameters of health sector from facilities level. Currently, all the districts of the state and UTs are reporting on the HMIS system.

Central Government Health Scheme (CGHS), a health care facility for Central Government employees and pensioners, has introduced plastic health cards with unique ID, which is completely computerized for validation in the entire country. The aimof this initiativeis to deter any misuse of the CGHS cards. The Electronic Health Record of CGHS patients are linked with the Drug Distribution System. Also, an SMS facility has been integrated with CGHS computerization module.

How ICT can further revolutionize the health program in the country

Currently, there are different programs running in the ministry which are working in silos, although the links are provided over the website. All these are to be linked together for

a comprehensive Decision Support System. Along with, it is also essential that through Web Services, the states’ HMIS and Disease data is integrated so that the decision making can be strengthened towards the provision of ‘Health for All’. By further adopting the statistical mechanism for prediction and forecasting, the disease burden and the infrastructure demand analysis can be done centrally. The Electronic Health Record System, standardized codes of treatment and medicines, plus drug surveillance can be adopted in practice for the health system upgradation and

solution involves Data Assimilation, Platform Creation, Data Cleaning, Data Integration, Dash Board, Analytics and Reporting, Demand Forecasting, Inventory Optimization, Predictive Modeling and GIS. One of the unique capabilities is to provide a BI-GIS Integrated Decision Support System, which along with statistical dashboard reveals the spatial pattern and trend of the indicators.

Vayam has provided data analytics and reporting solution to National AIDS Control Organization and Ministry of Health and Family Welfare, whereby facilities are reporting on web-based platform

timely provision of treatment and drugs to the needy. Teleconsultancy facilities at Public Health Centres can be planned for specialized health services at remote location. ICT based unified blood bank system can help to inventorise the blood available at different blood banks in the country. Similar facility can also ease the organ transfer system.

How vayam is pitching in

Vayam Technologies is specialized in Data analytics on different commercial and open source platform, providing data cleaning, data validation and statistical modeling and reporting solution. The comprehensive data analytics

on regular intervals and the assimilated data is then analyzed and different types of reports are generated for decision support system, including the reporting status of Health facilities, Indicator queries, minimum-maximum range, weighted matrix, score cards, etc. The dash board provides a glimpse of the analyzed and streamlined data at one go. The GIS integration provides geographical pattern of the same analysis, proving inter-facility, inter-district, inter-state comparison of performance of different health indicators. The writer is the Executive Director of Vayam Technologies Limited


The mortality rate on Indian roads remains disturbingly high notwithstanding all endeavours to make them saferRamesh Kumar Raja

Ever wondered who claims the largest number of lives in India every year? The ‘roads’ we travel every day are the

biggest cause of fatal tragedies in the country, even greater than war, terror attacks or Maoist violence. If the recent report released by the Ministry of Road Transport and Highways is to believe, road accidents have emerged as a major public health problem globally, and more so in India where almost five lakh accidents occurred last year, killing over 1,46,000 people and leaving thrice the number injured. With one of the highest motorization growth rate in the world, accompanied by rapid expansion in road network and urbanization over the years, India is faced with serious impacts on road safety levels.

According to the report named Road Accidents in India 2015, compiled by the Transport Research Wing, the total number of road accidents increased by 2.5 per cent from 4,89,400 in 2014 to 5,01,423 in 2015. The total number of persons killed in road accidents increased by 4.6 per cent from 1,39,671 in 2014 to 1,46,133 in 2015. Road accident injuries have also increased by 1.4 per cent from 4,93,474 in 2014 to 5,00,279 in 2015. The severity of road accidents, measured in terms of number of persons killed per 100 accidents has increased from 28.5 in 2014 to 29.1 in 2015.

The analysis of road accident

data 2015 reveals that about 1,374 accidents and 400 deaths take place every day on Indian roads which further translates into 57 accidents and loss of 17 lives on an average every hour in our country. It must be noted that over half of those killed—or over 78,900—were young lives aged between 15 and 34 years, young dreams and the demographic dividend crushed under cruel wheels.

Thirteen top states namely Tamil Nadu (69,059), Maharashtra (63,805), Madhya Pradesh (54,947), Karnataka (44,011), Kerala (39,014), Uttar Pradesh (32,385), Andhra Pradesh (24,258), Rajasthan (24,072), Gujarat (23,183), Telangana (21,252), Chhattisgarh (14,446),West Bengal (13,208) and Haryana (11,174) together accounted for 86.7 per cent of all road accidents in the country.

Around 83.6 per cent of all road accidents fatalities also occurred in the top thirteen states.These states are Uttar Pradesh (17,666), Tamil Nadu (15,642), Maharashtra (13,212), Karnataka (10,856), Rajasthan (10,510), Madhya Pradesh (9,314), Andhra Pradesh (8,297), Gujarat (8,119), Telangana (7,110), West Bengal (6,234), Bihar (5,421), Punjab (4,893) and Haryana (4,879), whereas 23,980 accidental deaths had taken place in other states/UTs. In terms of absolute numbers, highest number of deaths had taken place in Uttar Pradesh.

The fifty million-plus cities accounted for a share of 22.1 per cent in total road accidents in the country, 11.3 per cent in total persons killed in road accidents and 16.4 per cent in total persons injured in road accidents. Mumbai had the highest number of road accidents

India’s killer roads

INFRASTRUCTURE


(23,468) while Delhi had the highest number of deaths (1,622) due to road accidents. Accident severity in terms of percentage share of 50 million-plus cities was 14.9 per cent in 2015 as against 15.0 per cent in 2014.

As per the report, drivers’ fault has been revealed as the single most responsible factor for road accidents, accounted for 77.1 per cent of total road accidents during 2015 as against 78.8 per cent during 2014. Within the category of drivers’ fault, road accidents caused and persons killed due to exceeding lawful speed/over speeding by drivers accounted for a share of 62.2 per cent (2,40,463 out of 3,86,481 accidents) and 61.0 per cent (64,633 out of 1,06,021 deaths) respectively.

Besides, 10,727 people were killed in crashes caused by potholes, speed breakers and roads that were

under repair or being constructed in 2015. Although the overall fatalities under these categories had come down marginally from 2014, the number of people killed due to potholes rose to 3,416, from 3,039 in the previous year. Deaths caused by potholes saw a massive seven-fold increase in Maharashtra in 2015, according to the report. Interestingly, Uttar Pradesh, known for its bad roads, reported an almost 50 per cent reduction in pothole deaths as compared with 2014. In Delhi, where a man was crushed to death by a tankerwhen his motorcycle got stuck in a rainwater-filled pothole recently, showed only two pothole deaths in 2015. More than 10,800 accidents were reported last year due to potholes across the country. A rise in such fatalities indicates failure of road-owning agencies to maintain

stretches.Sadly, these statistics might not

even paint the true picture. The number could be higher as we do not have a robust and scientific mechanism for collecting data. Many accidents go unreported and there is no detailed investigation into causes of road deaths in the country. It has been proved by a team of researchers from the Johns Hopkins Bloomberg School of Public Health who suggests that the numbers could be much higher. In their study, the researchers analysed figures from Belgaum, Karnataka, and found that there is considerable underreporting of deaths caused by road accidents in India. Unfortunately, India, which is trying to position itself as a technological hub, lacks both a crash investigation system as well as a trauma registry, and has a primitive


method of ascertaining the causes of road deaths. When an accident occurs, the document which is relied upon to ascertain the cause is the FIR, which is prepared by the police. Due to lack of proper training, the police are unable to capture the various human, infrastructural, and vehicular causes that play a vital role in each accident.

Although driving in India has always been dangerous, the roads are now becoming even deadlier. What must anger Indians is that the scenario has not changed for the past 15 years. Between 2000 and 2015, governments have registered 1,649,770 accidents and 1,039,372 fatalities. And over 50 lakh persons were injured, many handicapped and traumatised for life. Likewise, between 2005 and 2015, the total number of accidents have increased

road users, phenomenal increase in the number of motor vehicles with no corresponding increase in road capacity, mixed traffic conditions, over-speeding, overloading, drunken driving, mechanical defect in vehicles, etc.’ The answer in 2014 read,‘road accidents are caused due to the complex interaction of a number of factors. These include driver’s fault, mechanical defects in the vehicles, fault of pedestrians, bad road, bad weather, increase in vehicular population, increase in population, heterogeneous traffic etc. It may not be possible to pinpoint any one reason for road accidents.”

There is anabundant of indicators that suggests the system is failing over and over again. “Over 77.1 per cent of total road accidents during 2015 were caused

indicators and look into pressing issues that come into play with the changing time, such as the irresponsibility of parents -- every year, nearly 20,000 accidents are caused by drivers/riders who are minors.There is also the timing factor -- bulk of the accidents happen between 3pm and 9pm, raising questions about lighting and traffic management in cities.

The primary gap lies in the current legislative framework that governs road safety in India. A nation that witnesses deaths daily due to holes on its roads needs to take some hard and urgent decisions. According to Saji Cherian, director, operations, Save LIFE Foundation, bringing in an effective law is the key. “The only way to end this epidemic is to ensure strengthening of the existing legislation so that it protects all classes of road users. We appreciate that the government is deliberating amendments to the Motor Vehicles Act, 1988, and we hope it will receive cross-party support in the Parliament.” Ranbir Talwar, Executive Director, Indian Head Injury Foundation also emphasises on the need for a stronger law. “India accounts for 10 per cent of global deaths due to road accidents. The existing Motor Vehicles Act, 1988, has been unable to address four of the five risk factors specified by the World Health Organisation,” he feels.

Nitin Gadkari, the Union Road and Transport Minister, recently reiterated India’s resolve and commitment as a signatory to the Brasilia Declaration, to reduce the number of road accidents and fatalities by 50 per cent by 2020. He dwelt at length on the various measures being taken in this direction, including steps like rectifying black spots, incorporating engineering solutions at the design stage, safety standards for automobiles, proper trauma care and generating public awareness. Hope it translates into reality as soon as possible and road safety becomes a national mantra.

[email protected]

by 14.2 per cent, killings by 53.9 per cent and injuries by 7.5 per cent. With these figures, one can understand the scale of the crisis. Above all, the tragedy is about lives lost, about families disrupted, about careers broken up and about aspirations debilitated.

According to Shankkar Aiyar, the author of Accidental India: A History of the Nation’s Passage through Crisis and Change, “The approach of successive governments has been to dive into alibi alley. In August 2000, the Government of India was asked what is causing the rise in accidents. The reply was‘lack of traffic discipline on the part of drivers and

by drivers’ faults—quite obviously the licensing process is flawed. In a country where most cities can boast of less than 20km/per hour travel, speed is a major killer—64,633 out of 106,021 deaths in 2015 were caused by speeding—a reflection of poor policing and inadequate use of technology. Every second accident or about 49 per cent of the total mishaps of 2015 took place at junctions—without doubt populism and politics have led to flawed design, and poor facilitation has made pedestrians and travellers vulnerable,” Aiyar analysed in a leading newspaper. It’s high time the system must examine these



THE NEED FOR ALWAYS-ON APPLICATIONS HAS BECOME MORE PERVASIVE ACROSS ALL MARKET SECTORS

VIKRAMJEET BHATTI | MD, INDIA AND SAARC, STRATUS

Stratus Technologies is the leading IT player providing highly value added solutions that keep applications running in today’s always-on world. The company operates in multiple service domains and provides maximum customer satisfaction as part of its operating philosophy. In an interaction with Governance Today, Vikramjeet Bhatti, MD of Stratus for India and SAARC, elucidates about the services and solutions of the organization.

EDITED EXCERPTS:

Can you let our readers know about the various services and solution of Stratus?

Stratus has been supporting mission critical business applications for customers across verticals. When the need is non-stop computing, Stratus has the two solutions, both providing customers with 99.999% uptime assurance.

The Stratus ftServer is comprised of features that enable you to achieve Business Continuity and data integrity with a combination of always-on availability, proactive 24/7/365 monitoring

INTERVIEW


and storage in a complete turnkey solution.

The Stratus everRun Express / Enterprise software is designed to meet customer’s specific always-on business needs. The Enterprise edition of everRun software creates a fault tolerant layer between two identical industry standard intel servers. The Express edition of everRun can also be used to create a uncomplicated HA. When uptime is critical Stratus everRun Enterprise delivers. Stratus is the world’s most

trusted provider of products and services that guarantee uninterrupted processing for applications that must not fail. Together we offer robust 24/7 support infrastructure and services and people that are focused on preventing downtime before it occurs. We customize service delivery to client’s critical business processes, instead of forcing them to adapt to ours.

Which are the emergent verticals and services in which you see most action moving forward and why?

Always-on has become a global requirement that touches every part of our lives. • In manufacturing environments

– it’s about maintaining productivity and reducing waste

• Retailers – need to ensure transaction processing systems are up and running to maintain sales targets

• In Building Security – premises and individuals need to be protected from internal and external threats

• In Public safety – lives are on the line

• In Financial Services – the impact of system downtime is huge when you’re managing thousands of transactions per second

• And in Healthcare accessibility of patient records and compliance is crucial

• Moreover, the concept of cashless transactions, smarter cities and a whole lot of automation across all aspects of our lives has led to an increase in the demand for resilient and reliable systems and platform that can support an “Always On” world.

You work on the “Always On” philosophy. What is this concept and how does it impact your operations?

The combination of our products, support, expertise and our dedication to preventing downtime enables us to ensure the highest levels of availability in the industry. We are talking about a minimum 99.999% uptime assurance; this equates to approximately 5 ¼ minute of downtime in the entire year. Another sweetener is Stratus ftServer reduces the need to bring down a system during upgrades. In other words, ftServer continues to provide the uptime to your critical application through a planned upgrade activity that would otherwise require downtime.

Despite the advancement of technology and increase in reliability of conventional systems, they are barely approaching a 99% uptime mark. Again, this does not include planned downtime.

The difference between 99% and 99.999% annually is about 87.6 hours plus the planned downtime vs 5 ¼ minutes of downtime in the entire year.

So you can imagine, with anything less than 99.999% uptime assurance, you risk hours or even days of application downtime that can have a direct impact on your bottom line.

But not everyone understands the full consequences that downtime can have on their organization. Of course, the cost of downtime varies from industry to industry and even from organization to organization. When calculating the overall impact of

downtime to your business, need to consider the impact on your operations and to your reputation.

The negative aftermath of a downtime event can be avoided with Stratus as your partner. With the changing dynamic Virtualization and opportunities in the Cloud have presented IT Infrastructures with you should feel confident that our 30 years of always-on experience and proactive (rather than reactive) solutions have helped us to bring our products and services to a growing number of industries with always changing and increasingly complex challenges.

At Stratus, we focus on preventing downtime not recovering from it.

What challenges do you see in your service domains in Indian market?

The need for always-on applications has become more pervasive across all market sectors. But what’s driving this demand? Besides the obvious expansion of users, environments, devices and a global economy, organizations constantly struggle to increase revenue and reduce costs, comply with regulations, mitigate disaster and plan for business continuity.

All these factors contribute to an increasing demand for reliable, continuous availability of the most critical applications, with no tolerance for intermittent service disruptions and associated lost revenue.

Stratus has answered this demand with availability solutions – platforms, software and cloud – that ensure always-on applications. We have a number of solutions that allow IT infrastructures to prevent downtime and deliver the right level of availability for their business at the right time.

Two very common levels sought out by IT managers are fault tolerance and high availability. Stratus has been perfecting these solutions for over 30 years. We


first addressed the challenge of delivering the highest level of computing availability with proprietary hardware.

For today’s world of distributed computing we have evolved our offerings to a suite of software solutions, and you’ll find that our solutions provide a range of levels of availability from fault tolerance to high availability, and can also include disaster recovery for virtually any infrastructure.

These solutions require no changes to your existing applications, are quick and easy to deploy – perfect for edge computing – with little to no IT assistance needed and we have more than one solution that could work for your requirements.

In addition to platform and software solutions for your IT world as exists now, we are running a beta program leveraging our solutions to address availability in cloud infrastructures. Stratus Cloud Workload Services for OpenStack leverages software defined availability to match infrastructure to applications quickly and easily saving you time and money.

Could you share with us your services and solutions in the Public safety and government space? How are these geared to help clients?

Public Safety Answering Points (PSAPs) and first responders rely on sophisticated technology to protect lives and property. So when it comes to your Computer Aided Dispatch (CAD), Records Management Systems (RMS), Geographic Information Systems (GIS), next-generation 9-1-1 (NG9-1-1) systems and mobile communications, there’s no time for downtime.

It takes more than just recovering as fast as possible after a failure has occurred. When lives are on the line, you need to detect and prevent failures before they

happen. That’s exactly what Stratus does for you. Stratus keeps all your applications up and running 24/7/365, enabling you to respond without fail.These, infrastructure based solutions enable you to:

Protect emergency response systems and applications with an always-on operating environment.

Detect potential problems and proactively take action before downtime becomes an issue.

Scale easily to accommodate changing requirements.

Meet business continuity goals for data integrity and reliability

Leverage 24/7/365 global support.

Financial services has become the biggest customer segment for IT. What are the services of Stratus in this arena?

Stratus helps financial services organisations around the world to maximize availability and performance for high-volume transactions and multi-channel financial services delivery.

In today’s financial services industry, global, 24/7 consistent access with the fastest transaction processing possible is the difference between you, your competition and your bottom line. From trading applications that require processing in nanoseconds to – credit and debit card authorizations that require transaction processing in real time, there is simply no time for system downtime or latency.

Downtime prevention, ultra-low packet processing latency, and deterministic performance instills confidence – that’s why financial services companies around the world rely on Stratus.

Stratus keeps your services up and running all the time — whether transacting in the cloud, on a smart phone, at a branch or via an ATM. We offer a range of availability solutions – software,

platform and services that are easy to deploy and manage, and backed by a support structure with a 30-year track record of success. Our solutions can be rapidly deployed in your chosen environment — physical, virtualized or cloud — without any changes to your applications.Stratus solutions enable you to:

Protect processing, transactional and administrative applications with always-on availability that works with standard operating systems

Prevent downtime, instead of recovering for it, by detecting potential problems and proactively take action before downtime becomes an issue.

Accelerate processing speed by improving network I/O latency, bandwidth and message rates.

All while reducing CPU utilization, without modifications to applications or the network

Scale easily to accommodate network and transaction growth.

Meet compliance requirements for data integrity and reliability.Now packaged together for

operational simplicity, Stratus’ ftServer with Solarflare’s Flareon™Ultra dual-port 10G Ethernet SFP+ server adapter and OpenOnload, delivers unmatched message rates over standard Ethernet with low latency, jitter and CPU utilization, enabling the industry’s best performance and scalability for enterprise data center environments.

We believe this iron-clad trio will keep your trading platform always-on and always-processing with the utmost of speed.Our solutions are being used across retail banking, corporate banking and capital markets such as:Retail Banking: ATM, Branch Banking, Fraud Management, POS Debit / Credit, Call Center, Internet Banking, Electronic Funds Transfer (EFT).Corporate Banking: Cash Management, Funds Transfer, SWIFT.

Capital Markets: Order Management, Electronic trading, Market Data Systems.

www.governancetoday.co.in September 2016 I 41Suite No. 209, C-104, 2nd Floor, Sector 65, Noida, UP 201307


COMPANIES WILL SPEND LOT OF MONEY IN BA/BI TO GET AN INSIGHT INTO THE DATA TO CREATE NEW OFFERINGS

S.K. BASU | ADVISOR, GOVERNMENT AND BANKING PRACTICE, TEAM COMPUTERS

Team Computers is a leading IT solutions provider in areas such as infrastructure solutions and business analytics. Governance Today interacted with S.K. Basu, Advisor, Government and Banking Practice of Team Computers to know about the company’s services and solutions and elicit his opinion about the sector.

EDITED EXCERPTS:

INTERVIEW

What are the major services and solutions that Team Computers offers? Which are the verticals which are most promising and why?

The major services/solutions that Team Computers offers are Infrastructure solutions, Infrastructure managed services, Business Analytics, Google and Cloud solutions. Most promising verticals are BFSI, Manufacturing, IT/ITES and retail.

BFSI is always a key growth vertical worldwide and also in India. Due to increase momentum of present government to include unbanked people through Jan Dhan Yojana, there is increased investment in IT. All BFSI companies are trying to outreach customers in semi urban and rural areas leading to increased investment in IT.

Manufacturing is a traditional industry and make in India initiative has increased investment in this sector leading to high level of automation and IT. Organized retail and e-commerce have gained tremendous momentum and 25 to 30 per cent of sale is online. All these companies are very heavily dependent on IT and investment will keep increasing.

What are the verticals in which you see most potential moving future?

The most potential verticals are BFSI, Retail, Manufacturing and IT/ITES. The initiative of government to include all unbanked customers in banking umbrella, and financial

inclusion drive by all banks have increased investment in backend IT infrastructure and also in mobile devices.

E-commerce companies like Flipcart, Snapdeal, Amazon etc. have created huge mind shift towards online purchase and this trend will go on in future. New


companies are also coming in this space leading to huge investment it IT including Business analysis.

In IT/ITES more and more companies are coming to India and opening ODC and technology centers leading to opportunity in this area. Indian IT companies like TCS, Infosys, Cognizent, Wipro etc. are increasing their business globally which is increasing addition of workforce manifold.

Business Analytics and Big Data have emerged as the most important development in the IT arena? What are your operations in these crucial areas and how you see these changing the IT industry moving forward?

We have a full fledged LOB and completed 500 plus projects in various verticals like Manufacturing, Retail, Insurance and Financial services etc.

Moving forward, most of the companies will spend lot of money in BA/BI to get an insight into the data to create new offerings, Innovative campaigns, loyalty programs etc. Government will also increase investment to improve citizen services and manage fund/schemes better.

Cloud computing has become a handy tool these days, but there are still security concerns regarding the same. How are software companies making Cloud safer for users?

Security is a hype and mostly fear comes from not studying the technologies available and implementing the same properly. In future, most of the companies will invest in and shift to cloud and

more so when Capex is an issue.Software companies have

already got quite a few solutions and now they are providing encryption for all data and applications moving on to cloud to provide further safety for user data.

The government has initiated various initiatives like Digital India to increase application of ICT in governance and public services. How do you see these initiatives and what are your suggestions to improve these initiatives?

The UPA government initiated MMP’s and NeGP projects have progressed successfully over the last 10 years. Most of the projects like Passport seva, MCA 21, UID, e District, CCTNS, PDS, ULB’s, e courts, e Treasury etc. have gone live.

Digital India has given further push to make all government services available to citizens electronically. Mobile application are getting in built into all application so that common man can use the services very easily.

Government should make agencies accountable to implement the programs on time and budget. Also it should involve top IT companies and domain consultants while structuring the projects and make them stake holders.

Government also should try to replicate same application developed for programs like say PDS and ULBs for all states like CCTNS projects. This will save cost and time for implementation.

Piracy has been a bane of Indian software industry. How do you see the trend changing over last decade or so? Do you think regulations

are sufficient to curb the menace? What can individuals and corporate do at their levels?

Piracy has reduced drastically over last decade. Existing laws are quite effective and have become quite a deterrent for companies in corporate sector and government to use pirated software. However, there is still issue with customers in other sectors.

Shift to cloud computing will automatically reduce piracy and this will be a boon to all software vendors in India and globally.

Education and awareness will further make it more effective. Also cost of various software consumed by masses should be lowered so that people don’t get into piracy and the risk associated with it.

Lack of employability is hindering the growth of Indian IT sector, according to Nasscom. What steps you think are required to address the issue, on a long term basis?To enhance employability following should be done

Update course curriculum in universities in consultation with the industry so that courses are aligned to the demand of various industries

Create specific courses in last year/ semester in line with companies’ requirements in specific domain

Create finishing school within the campus for English communication/ Speaking, etiquette etc. Many students of various universities and colleges are not up to the mark on these and it is getting difficult for them to get employment

Form a task force comprising of universities and industry to deliberate on new courses in line with the demand of industry. Then introduce this courses as a curriculum


ePAISA IS DIGITIZING INDIA BY DIGITIZING THE POINT OF SALE

SIDDHARTH ARORA | CO-FOUNDER, ePAISA

Increasingly, transactions have become cashless and more and more people are using various apps to make payments across multiple touch points. The rapid rise of e-commerce and financial technology has facilitated this development to a great extent. ePaisa is at the forefront of mobile Point of Sale (mPOS) solutions and has changed the way mPOS is understood and used by small and medium businesses. Governance Today spoke to Siddharth Arora, the Co-founder of ePaisa to find out more about the services of the company and about the sector.

EDITED EXCERPTS:

INTERVIEW


Could you share with our readers your services and solutions?

ePaisa is digitizing India by digitizing the point of sale.

Founded in Nov 2012, dynamic entrepreneurs kick started the ePaisa journey to change the landscape of mobile payments in emerging markets. As with any fast growing market, ePaisa started with addressing a widespread need for an effective solution that completely reimagines small business payments. By developing an application that can handle the entire check-out process seamlessly through a multi-lingual mobile app, it brings in a volley of payment and back-end office benefits at just a click/swipe.

ePaisa understands small business owners at a much deeper level which is why the need of the hour for any business is an ePaisa mobile point of sale that bundles all commerce and back-end office needs of a business. A seamless, secure and on-to-go POS using mobile devices such as smart

phones or tablets. There is also a revenue model

built into the app which enables merchants to earn more by offering mobile recharge, utility bill acceptance, ticket booking and gift card issuance to their customers, earning upto 8 per cent per transaction.

What are the salient features of ePaisa app and how they help

businesses in their operation?

There are multiple salient features of the ePaisa app some of which are as follows:

• Cash RegisterSimple, powerful and secure,

the ePaisa POS is designed to run on any smart phone or tablet. You can manage items, take an order, accept payments and send out digital receipts wherever your

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customers are. With its multi-lingual and customizable interface, it allows a merchant to track sales in real time and record transactions even without internet.

• Payment ProcessingePaisa offers an integrated

payment solution to accept any kind of payments – cash, card, credit (udhaar), meal vouchers, mobile wallets and Bitcoin. Pairing ePaisa with our card reader, merchants can accept payments from all major credit and debit cards.

• Excellent Inventory Management with AlertsIt handles all your inventory

needs by creating a great product library. You can add, edit or remove products in the app in seconds. It helps in creating categories and speeding up payments making it easier to keep track of all the sales. It lets you receive reorder alerts detailing items that are running low or out, saving time and space

• Customer marketing (loyalty & promotions)ePaisa helps in engaging

your customers by capturing and validating email addresses for email marketing, providing targeted promotions. You can customize your own loyalty programme and reward customers for their purchases, activities and more.

• Cloud Based Reporting & AnalyticsIt helps in monitoring business

growth by providing access to reports on sales, items, and customers all in one neat summary for any date range. One can access real-time data from anywhere making running business a location neutral activity.

• Value-added ServicesePaisa enables all its merchants

to accept bill payments, ticket bookings and mobile recharges.

ePaisa also offers gift vouchers from 150+ retailers.

• eCommerce made easy with ePaisaePaisa handles all the hassles of

selling online. It automatically sync products, inventory, orders, and customers across marketplaces with ePaisa POS and accept payments and fulfill orders right from your phone. Through ePaisa you can sell online on Snapdeal, Amazon, Flipkart and offer to accept card payments on delivery using ePaisa card reader.

• MultilingualThe app currently supports 36

languages with addition of some more languages on the cards

How do you see the growth of cashless economy? What are the major drivers to its continued growth?

There are around 40 million SME Retailers in India and 1.1 million POS terminals of which 40 per cent do not function properly. With the focus towards digital India and cash less economy the opportunity is huge and the right time to tap in.

The rise of mobile wallets, introduction of UPI and the growing number of smartphone users will continue to drive the growth. A report by Google-BCG reveled that More than 50% of India’s internet

users will use digital payments by 2020.

As a new segment what are the major challenges that you face?

Language was a barrier, to address that we created a multi lingual app. Taxation is another barrier that business owners face, the introduction of GST will add a lot of ease to the lives of business owners. ePaisa enabled merchants will be able to handle GST right from day 1. Considering the about of paperwork and the number invoices that businesses generate the challenge of losing out on important data is minimized and stored on cloud. By generating e-invoices with ePaisa, business management is optimized and there is efficiency in the business.

What is the nature and level of competition in your business and how do you see it developing in times to come?

There is no similar product in the market which revolutionizes the entire selling experience for business owners. From payments, billing, inventory and loyalty to the ability to offer value added services to their customers - all through a mobile phone or tablet, it replaces the clunky old registers and gives business owners the ability to digitize their business it can be used for many different types of businesses.


Primed to transform through a common marketGST can be a game-changer that propels India into the big league of developed nations

Mamta Binani

Alignment of revenue collection via a destination-based tax structure for maximum effect is a

major benefit of the impending GST regime in the country. The Modi-led NDA Government will always be remembered for historic reforms that align tax laws with the contemporary business environment.

Coming to GST, however, it is necessary to bust a popular misconception that the GST Bill has been passed. What the Parliament cleared was the GST Constitutional Amendment Bill that will permit a simple tax regimen, the Goods and Services Tax, after this is passed separately by both Houses of Parliament. This will happen in Parliament’s Winter Session (26 November to 23 December). At the same time, the 29 Indian states need to ratify their own GST Bills, with minimum 15 states required to pass the Bill for it to become an Act. This will then be India’s biggest tax reform ever.

Paramount reform

During the past decade, the issue of reforms in the Indian tax system has held centre-stage at the highest policy forums. In order to reform the tax system according to internal and external factors, the Goods and Services Tax (GST) framework was proposed in the 2006-07 Budget. A consumption or destination-based tax levied on the basis of the ‘destination principle’, GST covers both goods and services and is collected on the value added at each stage of the supply chain. Moreover, GST paid on procurement of goods and services can be offset against that payable on the supply of goods or services.

Indeed, not only will the new system integrate India’s fragmented market into one massive entity, it will also potentially impact financial aspects; the overall operating ones in terms of supply chain, IT system and marketing strategies. Ultimately, it will overhaul the entire Business Model, which as the practitioners of the craft of managing companies, Company Secretaries will look up to

and welcome. A seamless transition to the GST

regime entails adopting a business transformation approach. Proper planning and realignment of value chains prior to implementation of GST will impart a competitive edge to organizations, though the intricacies of the new law are yet to be fully comprehended, particularly since the GST rates are not yet decided. Nevertheless, the Draft Model Law on GST gives a clear peep into the fundamental framework of the proposed law and calls for a proactive approach in embracing GST as a strategic opportunity to gain a competitive edge, streamline business models and drive efficiencies to boost profitability and value.

Currently, we have one country comprising 29 different states/markets. Under GST, there will be one country and one market. Significant cost reductions in supply chain will become possible under GST by rationalization of the warehousing and transport systems. Withdrawal of entry tax/octroi will reduce transit time of goods


TAXATION


transported through trucks. Check-posts are likely to be withdrawn, unless required in sensitive places for internal security purposes. In other words, integration of the domestic market via GST will improve economic efficiency and needless fragmentation of supply chains will be minimized. India will be truly transformed into one common market, almost seven decades after political integration.

Boosting compliance

A uniform tax structure across India will eliminate cascading taxes and curb compliance costs. In a nutshell, GST will be a game-

costs and boosting the ease of doing business. This will go a long way in rationalizing the overall compliance cost and burden.

The proposed law is a step towards a standard tax law across the country that will subsume multiple taxes under three slabs of GST. The prospective rates of the three slabs may be: a lower rate of 12%; a standard rate of 18%; and a higher rate of 30% or more. While the lower rates will apply to food and other important products, the standard rate would be applicable to other goods and services, whereas the higher rates will be imposed on premium, luxury and ‘sinful’ products, including liquor.

changing reform for the Indian economy facilitating the creation of a common market with minimum exemptions and maximum compliance. For instance, both service tax and VAT are sometimes charged on a single transaction. GST will eliminate such double taxation, thereby reducing overall

Recently, contentious issues have emerged, particularly in sectors such as e-commerce, artificial intelligence and other IT/ITeS-enabled products/services. GST proposes to introduce concepts of ‘Electronic Commerce’ and ‘Electronic Commerce Operator’, thereby aligning tax laws with

today’s business environment. Also, with GST, e-commerce operations can be streamlined to a great extent.

Under the existing indirect tax regime, particularly for transactions such as sale of software (especially via download or transfer through electronic media), renting of goods, sale or supply of products through e-commerce portals across India, ambiguity often prevails vis-à-vis the jurisdiction they come under. The model GST has a clause stating that Central and State Governments will clearly notify what constitutes supply of goods and not services, what constitutes supply of services and not goods and what constitutes neither of the two, which will be

helpful in providing impetus to the Digital India initiative.

Considering its vast benefits, GST can finally be the game-changer India Inc. was eagerly awaiting.The author is President – ICSI



• Set-up on 70 acres of Government owned land• Excellent Rail and Road Infrastructure• Availability of abundant Water and Electricity• 30 Kms from International Airport connected by

Kalyani Expressway• Within 15 Kms from the Educational Hub of Kalyani

( Kalyani University, IISER, Agriculture University & Proposed IIIT)

• Hinterland of Technical Manpower

• Located on the banks of River Ganga• Well connected to Haldia Port (27 Kms)• Container Handling Jetty• Set up on a 60 Acre Government owned land• Quality & stable power supply• Social Infrastructure

• Medical Centre• Employee Hostel & Mess• Central Food Court• Creche/Nursery• Bank & ATM• Local Shopping Centre & Departmental Store

• Medical Centre• Employee Hostel & Mess• Central Food Court• Creche/Nursery• Bank & ATM• Local Shopping Centre & Departmental Store

• Testing centre & certification centre, • R & D Laboratory, Incubation & Facilitation centre• Training centre / Skill development centre• Central warehousing and raw material bank• Product Design House• Tool room• Pollution Lab

• Testing centre & certification centre• R & D Laboratory, Incubation & Facilitation centre• Training centre / Skill development centre• Central warehousing and raw material bank• Product Design House• Tool room• Pollution Lab

30 Kms distance from Netaji International Airport, Kolkata

70 Kms distance from Netaji International Airport, Kolkata

For any queries please call033-2339 2212 (DGM – New Project)

Toll free Helpline Number1800-645-5178

(During office hours)

For any queries please call 033-2339 2212 (DGM – New Project)

Toll free Helpline Number1800-645-5178

(During office hours)

Key Features

Key Features

Naihati EMC

Falta EMC

Manufacturing Support Services

Manufacturing Support Services

Welfare Services

Welfare Services


THERE IS TREMENDOUS POTENTIAL FOR WHITE LABEL ATMs TO LEAD FUTURE DEPLOYMENT

THYAGARAJAN SESHADRI | VICE PRESIDENT-BANKING RELATIONS, EPS

ATMs have come to be seen as the symbols of new age banking industry in which the banking service is no longer confined to bank branches. Electronic Payment and Services is at the vanguard of ATM related technologies and services in the country and has indeed been the pioneer of the sector. In an interaction with Governance Today, Thyagarajan Seshadri, Vice President- Banking Relations, EPS elucidates about the services of the organization and the new paradigm of ATM based banking sector.

EDITED EXCERPTS:

INTERVIEW

Could you share with our readers the services and solutions of EPS? How are you positioned in the emerging scenario of banking sector?

Electronic Payment and Services (P) Ltd. is a leading payment system and fintech company founded in 2011 by veterans from the banking, technology, and retail space. EPS is headquartered in Mumbai, the financial hub of India and was launched to bridge the gap in demand for efficient, secure and technology driven products and


services for the banking industry nationwide. EPS specializes in the retail banking & technology domain and is highly adept at end-to-end large scale project management and consulting services for Automated Teller Machine (ATM) operations and outsourcing services and ATM managed services (24x7x365), thereby enabling banks to concentrate on core banking functions. This includes a focused business model and specialized resources for setting up of data centre infrastructure, financial transaction switching, tools implementation & assessment, managed services and SLA management.

Our team of specialists and professionals driving EPS has more than 150 years combined industry experience in the retail payment sector and have pioneered various initiatives in the ATM and payment industry in India i.e. 1st ATM installed in India for HSBC in 1987, 1st shared ATM network Swadhan by India Switch Company in 1997, 1st of its kind transaction based ATM business model for Brown Label ATMs in India, deployed the 1st live ATM in Mumbai for the Ministry of Finance project. EPS has extended its business services and commitment for excellence to a majority of public sector banks across the country and established its project execution skills by successfully deploying over 6,000 ATMs in urban and rural locations, in union with the Ministry of Finance (Govt. of India) led mission for Financial Inclusion and Pradhan Mantri Jan Dhan Yojana (PMJDY) Scheme in India between 2013- 2015.

You have received the ‘Best ATM Managed Services Provider’ award this year. What differentiates EPS from other companies providing similar

services? What is your USP?

EPS came out with first of its kind ATM transaction based model known as Disruptive Business Model (Pay per use) which is unique to the world. This has led to higher ATM up time for banks thus leading to higher revenue streams. This is also called the Double Whammy effect which explicates successful transaction and uptime maintenance, wherein EPS gets paid for every effective transaction from our ATM, and secondly, for maintaining an uptime of 95 per cent approx., as per the agreement with banks.

This is how DBT (Direct Benefit Transfer) scheme was encouraged, which is a social benefit offering to the unbanked / underbanked, where cash is transferred by respective government departments through ATMs, without any middleman or broker, for real time credit to the actual beneficiary, saving loopholes and millions to the exchequer.

Moving away from the existing business model unlike competitors, thinking innovatively and proposing a win- win business model to customer leveraged EPS’s breakthrough into innovation space. EPS also came up with its centralized ATM monitoring services centre to support operations thus supporting the project mission more effectively.

EPS has been the solution provider in setting up of the entire ATM infrastructure for banks. With a robust ATM monitoring capability, we have been successful in managing and maintaining cash and offering for our customers 24x7. EPS mainly caters to all public sector banks along with SBI and its associate banks across India.

What are the new initiatives you are working on and how would these enhance the customer satisfaction?

With our recent venture in the acquisition of complete stake in CISB ATM Services Pvt. Ltd., from CIS Bureaus Facility Services Pvt. Ltd. (CISB), it became a wholly-owned subsidiary of EPS. In March 2016, the company was renamed as EPS ATM Services (P) Ltd. This collaboration brought EPS closer to the designated clientele, thus strengthening its business relationships and expanding its participation in higher growth segments. The will further focus on ATM deployment and related services and enable the company to expand its ATM services portfolio to 15,000 machines by 2017 to support banks with fully integrated and transformative portfolio of ATM services and solutions. This strategic decision opens doors for fresh business objectives, newer initiatives and innovative payment solutions thus catering to expanding banking needs on a national level.

ATMs have revolutionized the way banking is done. What are the innovative services that we can expect to do through ATM in times to come? How is technology changing the way ATMs function?

There is a very positive industry outlook towards the ATM business. With the Department of Financial Services initiative and implementation of 55,000 ATMs in 2012-2015 by Public Sector Banks, PM-JDY and RuPay Cards penetration, and the number of free transactions, the usage of ATMs has resulted in large volume transactions. There is tremendous potential for White Label ATMs to actually lead the future deployment of ATMs, as specialist operators with a focus on profitability in order to manage ATM operations. The number of ATMs in India increased from 43,650 in March 2009 to


around 194,000 in March 2015. Between 2014 and 2019, the annual volume of ATM cash withdrawals in India is expected to double, growing at a CAGR of 20 per cent. The introduction of the RuPay scheme, JAM, FI and developments such as card less withdrawals are going a long way to addressing the issue. Number of rural and semi urban ATMs grew by 34 per cent and 22 per cent in 2014 (over 2013). The Finance Minister has said that there will be a deployment of ATMs and micro ATMs in post offices for the next 3 years. The Department of Posts (DoP) has announced for 1,000 ATMs and also to bring all the 25,000 departmental posts offices under core banking system.

The white label ATMs is a key growth area of the Indian ATM market. It is expected to represent approximately 25 per cent of the installed base by 2019, up from 1 per cent in 2014. As new companies enter the sector and existing ones build up their ATM portfolios, 100,000 white label ATMs are anticipated by 2019. The majority of ATM deployment by nationalized banks going forward is expected to be under the brown label scheme. A significant proportion of new deployments by private sector banks are expected to be brown label machines, with the number of ATMs forecasted to double to 100,000. Co-operative banks have deployed only a small number of ATMs, with India Post having yet to install many ATMs. Cooperative banks and India Post have the potential to increase ATM numbers fairly rapidly in the coming years, with a forecast of additional 150,000 ATMs deployed by 2019 with a total deployment base of 450,000 ATMs, with an addition of 250,000 ATMs in the next three years.

How can ATMs be used as a vehicle for financial inclusion?

The Government of India drive and initiative of Direct Benefit Transfer (DBT) has resulted in Banks strengthening their infrastructure to roll out ATMs so that the beneficiary can avail cash from ATMs in rural areas. Towards the same, public sector banks have identified 121 districts for rollout of ATMs and vendors have been instructed to deploy ATMs in these rural districts under DBT schemes. This national mission on financial inclusion launched by Prime Minister Narendra Modi has an ambitious objective of covering all households in the country with banking facilities and having a bank account for each household.

Banks have opened 19.41 Crore accounts under PMJDY with deposit of more than 26,819 crores. RuPay cards have been issued to 16.61 Cr. Customers. On an average in the last one year two

challenges that banks face in deploying ATMs in rural and far flung areas and how can these be overcome?

When it comes to offering banking solutions to the remote locations, banks face major challenges. EPS’s Disruptive business or the Double Whammy business model, which is the PayPerUse Transaction is a unique solution offering to banks making this project replicable and this made EPS win continuous orders with banks on deployment of ATMs.

This model is being adopted by various PSU banks in India, and is expected to scale large volumes with private banks since it is a win- win strategy. It envisages end to end set up of infrastructure

lakh accounts have been opened per day. This is a promising growth in terms of Financial Inclusion mission wherein banking facility is made available to the beneficiary with the help of ATM provision.

The future of the ATM industry is governed by the emerging trend of white-label ATMs, especially in semi-urban and rural areas. With RBI playing an immense role in micro-financing and banking outreach programs, financial institutions have started focusing on financial inclusion, and are motivating banks to be more adept to branchless channels. This development is bound to influence banks to create new ways to attract more customers and also to retain the existing customer base.

What are the major

supported by service providers, and banks. This is a scalable approach as per the plan of individual banks, without much addition to their existing servers/ Electronic fund Transfer Switch, and no additional cost to banks, hence making it seamless.

Project execution faced a lot many challenges, wherein deployment of ATM at remote and rural areas faced electricity and connectivity issues. This drove EPS to install extra solar powered systems for ATMs to stay up and running. Also, EPS made additional capital expenditure in installing more UPS batteries and increasing the capacity of UPS power, thereby enabling more electricity and making ATM available to rural customers.


GST and realtyThe proposed single tax could usher transparency in real estate sector and reduce tax burden

Ramesh Kumar Raja

Now that Goods and Services Tax (GST) is on the verge of becoming reality with the passage of Constitution

Amendment Bill in the Parliament, ratified later by 16 states of the country, the proposed single tax is expected to benefit the real estate sector as well. As soon as it is implemented with the Presidential signatures, GST will replace the current indirect taxes such as service tax and VAT along with other multiple taxes like CST, excise

duty, etc.; which will greatly reduce the burden from the developers, the benefit of which will hopefully be passed on to the buyers. This in turn will help the demand to grow back and allow developers to score better in the sector. This effect will be visible soon on the economy as GDP will get a better contribution from the realty sector.

Manoj Gaur, President CREDAI-NCR and MD, Gaursons India Ltd. said, “The wait for a uniform tax structure in the country is finally over and real estate sector amongst others will benefit largely. A well-

defined GST implemented for the country will bring about a relief for this sector and its customers. Commercial realty players will be hugely benefitted as all the lost Cenvat credit, which is in current regime a cost to commercial developer can be availed if GST is applied in a free flow manner that will also help in reducing costs. A much simplified single tax rate, reduced construction costs and better transparency will be much welcomed by the developers and its customers.”

Deepak Kapoor, President

REALTY


However, there is a slight catch and a flip side to GST as well. If

the GST is implemented on a higher rate, then

the cost of under-construction properties

will shoot up. If the rate is higher than the applicable service tax, which at present is 15 per cent, this can turn out to be a dampener for the buyers as they

will end up shelling out extra amount

CREDAI-Western U.P. and Director, GulshanHomz said, “GST is finally a reality now and the nation will soon witness its benefits, with real estate sector to make the most out of it. Implementation of GST will basically work on three major elements for this sector; simplification of tax structure, reduction in construction costs and better transparency. Speaking about its contribution post acceptance, we are predicting a nationwide realty sector growth by almost 15-20 per cent in the course of next 5-7 years. There will be a quick reaction towards the sector by its customers as demand is bound to increase due to reducing costs and improving transparency in the sector that has been the hurdle making this sector suffer for long now.”

Till now, the central and state governments levied various kinds of taxes for land, property and other kinds of work contracts with the transactions mainly categorised in three parts- value of goods and materials, value of services and value of land. Also, there is a levy by the state governments through VAT on the goods, but at the same time, several states such as U.P. does not charge this. This levy is not clearly defined in certain states, Haryana for example. The biggest benefit that GST shall provide will be the reduction in under-construction properties. With a single tax regime, developers will get free input credits on GST paid for services and material purchased by them. If we move forth with the views of the industry experts, GST may boost the GDP growth of the country by 1.5-2 per cent. Dhiraj Jain, Director, Mahagun Group avers, “Currently, the homebuyers of this sector are under the pressure of two forms of taxes; service tax and VAT on the purchase of residential units when booked prior to its completion. There are numerous components of non-creditable tax costs such as CST, entry tax, customs duty, excise duty, etc. which is duly paid by the developer on its procurement side which are basically ingredients for the cost pricing of the units. With GST, a single tax structure will be

followed which will allow reduction in costs for under-construction units. Developers as well as buyers will make the most of this as reduced costs will positively impact the sentiments as well as demand for property.”

However, there is a slight catch and a flip side to GST as well. If the GST is implemented on a higher rate, then the cost of under-construction properties will shoot up. If the rate is higher than the applicable service tax, which at present is 15 percent, this can turn out to be a dampener for the buyers as they will end up shelling out extra

amount. Also, states where VAT is not applicable till now then GST will be charged. Thus, only if the GST rate is lower than 15 per cent, we can forecast a better real estate scenario in future. “There is no doubt that multiplication of taxes will be curbed through GST, but the only question will be, what rate gets decided. The only dampener for this sector can be high GST rates, if above 15 per cent gets decided; this will counterpoise any possible gains on incremental credits. Also, stamp duty is not proposed to be incorporated under GST and will

thus continue to remain as it is at present. Therefore, decreased cost of construction will take place once a lower bracket of GST is applied as the developers will be liable to pay much less than today, thereby allowing cost of units to fall which will directly benefit the end users”, explains Vikas Bhasin, MD, Saya Group.

Adding further, Vaibhav Jain, CMD, Rise Group states, “These are still early days to judge how much will the GST benefit real estate sector. There is a strong dependency on the allied industries such as steel, cement, IT and BFSI. A lowered GST rate, below 15 percent, will offer a huge benefit for the sector as not only will the cost of construction get curtailed, but there will be direct benefit while registering the properties as well. Also, there are developers and builders who are developing projects in different states or regions, specially tier 2 cities and thus have to abide by the state specific VAT laws, service tax and corresponding compliances. The presence of several indirect tax components faced by the developers at present are a major cause that bring tax inefficiency in this sector. A simplified tax structure would also mean that property prices would come down considerably enabling better affordability for people looking for property options in tier 2 and 3 cities.”

“With the dawn of concepts like hustling in service tax coupled with reductions and various mandatory charges collected by developers these days, highlights the importance of having a same tax base which can be only answered by GST. A single tax rate across the country will promote fair practices which will further encourage transparency and less evasion in the sector that supports in future growth of demand for real estate. GST will definitely prove to be a game changer for the Indian economy and provide a stimulus to the ‘Make In India’ initiative,” concludes Ashok Gupta, CMD, Ajnara India Ltd.

[email protected]


EVENT REPORT

2nd India’s Payment CorridorGovernance Today, organised the 2nd edition of India’s Payment Corridor on Aug 20, 2016 at Hotel Leela Mumbai,

the Summit was Co-Hosted by National Payments Corporation of India (NPCI), the focus of the summit was on the technological, regulatory and infrastructure related issues of payments systems. The Summit was attended by leading banks and tech companies operating in payments arena. The Summit was inaugurated by

Dr N. Rajendran, CTO, NPCI. Experts from NPCI, and was attended by the decision makers from the Banks and IndustryThe day-long summit was attended by more than 125 dignitaries from banking segment. The summit featured

multiple panel discussions on various topics such as challenges of payment gateways, the ability of banking sector to absorb new products, cyber security and how to ensure customer satisfaction. Leading subject speakers from financial sector participated in these panels. Leading private sector from the banking segment VSoft, EPS, Stratus Technologies, Precision Biometric and Quattro Global and many others made presentations and panel discussions on their services and solutions during the entire duration of the summit. The summit had more than 15 exhibition stalls where companies like Paynear, EPS, Credentek, Infres, Robogardien, Sharon Solutions, Razorpay, Team Computers, ePaisa and Stratus Technologies showcased their technologies

ORGANISED BY Co-HOST

Badge PartnerLanyard Partner

Silver PartnerPlatinum Partner

Associate Partners

56 I September 2016 www.governancetoday.co.in56 I September 2016 www.governancetoday.co.in

Inaugural sessionThe session set the tone for the entire day’s summit and discussions. The speakers were carefully chosen

from a wide spectrum of financial sector and represented banking industry, technology players catering to the evolving financial sector paradigm, and regulatory institutions which have the job of ensuring an orderly evolution of the payment structure in the country which is technically sound and implementable for the

financial sector. Speaking on the occasion, Dr N Rajendran said that there is a need of payment whether is talk about the digitization of the governance, digitization of the transport, digitization of the commerce. Speaking about the government initiatives, Mr Rajendra Mhalsekar, President Corporate Banking, Yes Bank informed that Yes Bank was working closely with NPCI to issue “RUPAY KISAN CARD “ to farmers. From Industry, Mr Vikramjeet Bhatti, MD-India & SAARC, Stratus Technology and Mr Sheshagiri Bhat, AVP-Sales, VSoft Corp were part of the inaugural session.

The Summit had five specialized panels for discussing multiple important issues related to payment segment.

Panel 1 – Payment Gateways: How Successful and How Challenging?

Panel 2 – How good is our banking Infrastructure?

The objective of this panel was to find out the present situation of the payment gateways, both in terms of technological/ financial product availability, and the ability of financial system to absorb such products and use them to enhance the customer satisfaction. The panel also discussed the success stories in payment business and the important aspects that needed to be kept in consideration while planning for such products’ rollouts. The session was moderated by Mr Rajesh Dhuddu, Senior Vice President, Quattro Global, and the other panelist were Mr Kanchan Kulkarni, Regional Head, ICICI Bank, Mr Harshil Mathur, CEO, Razorpay and Mr Akash Aurora, Co-Founder, ePaisa.

This panel focused on the ability of the present banking infrastructure to absorb the various products facilitating payment related transactions in different forms. Considering the fact that banking sector of the country has various segments at different levels of IT/ technological development, any product rollout at industry level is bound to be disruptive and would require immaculate planning by banking sector. The panel also discussed the steps that banks needed to take in order to prepare themselves for emerging scenario. The session was moderated by Mr Milind Varekar, GM-IT , Saraswat Bank, and the other panelist were Mr Ashutosh Mishra, Head, Market Sales – ANZ, Mr Vikramjeet Bhatti , MD, India and SAARC, Stratus Technologies and Mr Sheshagiri Bhat, AVP-Sales, VSoft participated in the panel.


Panel 3 – Cyber Security: Key to success of reliable financial system

Panel 4 – Payment Banks: Catering Customers Smartly

Panel 5 – How ecommerce helping cashless transaction?

All faceless transactions face this fundamental risk which is the security of payments made online. Even though banks and internet service providers have made great strides in ensuring safety of transactions, challenges remain and mutate with advancement in computing technology. The panel discussed the sources of security risk in new environment and what strategies are needed to mitigate these risks. The session was moderated by by Mr K N Bhat, Security Expert, and the other panelist were Mr Butchi Bura Babu, GM-IT & CIO – Bank of India, Mr N. K. Anbumani, Vice President, Precision Biometric and Mr Pravin Gupta, CEO, Credentek.

Payment banks are the new kids on the block and have the potential to radically impact the overall banking industry. However, in order to make a real impact to the society, especially in non urban area for which they were planned in the first place, these banks need to come up with innovative strategies to win customers’ trust. The panel discussed how payment banks need to develop and finetune their business models which would cater to maximum customer satisfaction. The session was moderated by Mr Mudit Bhatnagar, Strategic Brand Consultant, and the other panelist were Mr Pramod Mulani, Chief Product Officer, NSDL, Mr Shailesh Pandey, EVP, FINO Paytech, Mr Shantanu, CFS, Hitachi India Pvt. Ltd. And Mr Johnson, CMD, Sharon Solutions.

The topic for the final panel of the day was how the new vistas are emerging in terms of online payments as regards e-commerce. Online retail has become central to the shopping culture of today’s generation as it offers unparalleled ease of transaction and choice. However, this is only one part of the story. The other, bigger part of the story is that e-commerce has been the primary facilitator of cashless transaction. The session was moderated by Mr Rajendra Mhaleskar, President, CBT, YES Bank, and the other panelist were Mr Pankaj Kumar, NABARD, Mr Sudhakar S. Marthi, VP-Business Development, Zoho Corp, Mr S K Basu, Advisor Government & Banking Practice – Team Computers and Mr Sheshagiri Bhat, AVP-Sales, VSoft, deliberated on the topic.

58 I September 2016 www.governancetoday.co.in58 I September 2016 www.governancetoday.co.in

Presentation 1: VSoft Corporation Presentation made by: Sheshagiri Bhat, AVP-Sales, Topic: Digital BankingProduct: IRIS Banking SolutionThe presentation was made on the innovative solutions of VSoft. Describing the digital banking’s background, the presentation informed about the UPI solution and how it has changed the banking, whether private or government. The presentation also told about the app named JEB and the REMOTE DEPOSITE CAPTURE with which one can capture cheque’s image and send it for clearance.

Presentation 3: Stratus TechnologiesPresentation made by: Shivanand Wagle, Advisory System Engineer Topic: Payment SolutionsThe presentation was focused on the various payment solutions of the company and how these are catering to enhancement of the volume and quality of transactions. It informed about the incredible uptime that the company has maintained in its services and the improvement it has brought to customers’ satisfaction.

Presentation 5: Quatrro Global ServicesPresentation made by: Rajesh Dhuddu, Senior Vice President, Topic: Blog ChainThe presentation informed about the Blog Chains that work on an open technology framework in which nobody needs to take permission to get into the network and where all transactions happen on a consensual basis. It also talked of the technicalities of the technology called DLT (Distributed Ledger Technology) which operates the Blog Chains.

Presentation 2: Electronic Payment and Services (P) Ltd.Presentation made by: Thyagarajan Seshadri, Vice President- Banking Relation Topic: Fintech Disruption The presentation was based on banking on fintech. EPS is one of the fastest growing payment systems companies of India and has clocked more than 6000 ATM’s covering Public Sector Banks in the state of Maharashtra. It is also deploying ATM’s for other Public Sector Banks under Disruptive model, Business model and Payment transaction model where the entire assets of ATM’s are owned and managed by EPS on day to day basis.

Presentation 4: Precision Biometric Pvt. Ltd.Presentation made by: N. K. Anbumani, Vice PresidentTopic: SecurityPrecision Biometric is a major player in the business of biometric security systems. In its presentation, the company threw light on not only its multiple services and products, but also on the overall scenario about how the biometric based security systems are getting more sophisticated and advanced.

PRESENTATIONS



Documents

Indian start-ups take off - Electronic Payment Services...MARCH 2016 VOL. 02 ISSUE 06 `60 RNI NO: UPENG/2014/62662 ISSN 2455-0426 PR NO: UP/GBD-212/2015-17 Date of Publishing 04-03-2016