SBI to re-hire retired officers for non-core jobs

K Ram Kumar

Aims at bridging the experience gap due to large-scale superannuations over last few years

Mumbai, June 16:  

To overcome the knowledge and experience gap arising from the retirement of senior officers, State Bank of India has drawn up a comprehensive policy to engage former officers.

Former officers will be hired on short-term assignments in select areas, such as inspection and audit, advances, bad loans management, and legal counselling.

The engagement of retired officers comes in the backdrop of a few thousand officers hanging up their boots from the bank every year over the last few years due to superannuation.

According to a Finance Ministry report, around 90 per cent of the current crop of General Managers in public sector banks (PSBs) will retire by 2017, leading to a leadership gap, loss of knowledge and continuity. This situation has been compounded by sub-optimal succession planning in these banks.

SBI’s policy on engaging officers (Chief Manager to Deputy Managing Director) who have retired from its services has been approved by the Executive Committee of the Central Board (ECCB). Other PSBs may take a leaf out of this policy to cope with the HR challenges that they are up against.

India’s largest bank will use the services of old hands for non-core functions/areas. They cannot be hired for routine day-to-day banking assignments, which have to be performed by regular staff. The engagement of former officers has been restricted to a

period of six months. Any extension, if required, will be reviewed and approved by the central human resources committee up to a maximum of a further six months.

Under the new SBI policy, user departments have to ensure that a second line of personnel are identified in-house well in time for the jobs that may be required to be assigned to retired officials so as to facilitate smooth transition/completion of the job even as the new incumbent is groomed.

LVB hikes savings deposit rate

Our Bureau Mumbai, June 16:  

Lakshmi Vilas Bank on Wednesday increased interest rates on savings bank deposits of up to 5 lakh to 5 per cent from the ₹earlier 4 per cent on deposits up to 1 lakh. For balances of ₹above 5 lakh, the new interest rate would be 6 per cent as ₹against the earlier interest rate of 5 per cent on incremental balances above 1 lakh, the bank said in a statement. ₹Financial Software to provide e-services for upcoming IDFC Bank

Our Bureau Chennai, June 16:  

Financial Software & Systems Pvt. Ltd, a Chennai-based payments technology and transaction processing service provider, has been chosen by IDFC Ltd to provide end-to-end payments technology support for its upcoming banking operations this year.

This partnership will allow FSS to establish complete payments technology infrastructure for the upcoming IDFC Bank with services ranging from payments processing, card management,

reconciliation to payment gateway for e-commerce, and Aadhaar Enabled Payments for financial inclusion, says a press release from FSS.

FSS will also install and manage the bank’s ATM network and provide cash recyclers to accept and dispense cash. This deal reinforces FSS’ position as a comprehensive payments processor, and FSSNeT hosted platform as a reliable option for banks/financial institutions to accelerate their go-to-market plans, the release said.

IDFC gears up on technology with FSS tie-up

Our Bureau Mumbai, June 16:  

The soon-to-be-turned bank IDFC has partnered with payments technology and transactions processing firm FSS (Financial Software & Systems) to provide end-to-end payments technology support for its upcoming banking operations this year.

IDFC is likely to start its banking operations by October.

“This partnership will allow FSS to establish complete payments technology infrastructure for the upcoming IDFC Bank with services ranging from payments processing, card management, reconciliation to payment gateway for e-commerce, and Aadhaar Enabled Payments for financial inclusion,” FSS said in a statement.

FSS will install and manage IDFC bank’s ATM network and provide cash recyclers to accept and dispense cash.

Avtar Monga, COO, IDFC, said, “IDFC has chosen a binary strategy to operate in India, with one set of branches out of metropolitan cities and the others in bottom-of-the-pyramid districts. Therefore, it is important that we establish a payments

technology infrastructure that will enable us to provide a uniform banking experience across both our urban and rural customer segments.”

Nagaraj Mylandla, Managing Director, FSS, said, “I am confident that our integrated ‘Bank in a Box’ offering will power IDFC to operate seamlessly and provide a superior banking experience to their customers.”

FSS has provided support to the growth of retail and wholesale payments in India by serving banks, financial institutions, merchants, governments and other verticals through a rich portfolio of software products, software services and hosted payment services.

Credit card penetration remains dismally low

NS Vageesh

With better access to the credit history of individuals, it’s time banks shed their overcautious stance

June 15, 2015:  

Nothing demonstrates the failure of Indian banks to seek out profitable customers as much as the dismal statistics relating to credit card penetration in India (see table).

Seven years ago, just before the global financial crisis unravelled, the number of credit cards in India had touched a peak of 27.5 million. Following the freeze on liquidity in the aftermath of the crisis as well as tightening credit and capital standards, banks and credit card companies in India turned overcautious.

The excesses of the previous few years were controlled and they squeezed millions of credit cards out of the system. Ambush marketing of credit cards that was rampant till then was stopped so that by 2010, the number of cards had dropped drastically to about 18 million cards. It remained at that level for the next three years. Since then card growth has inched up, but the number had risen to just over 21 million by the end of 2014-15.

Why credit card growth has not been more robust these past few years is a mystery that card issuers are hard-pressed to explain.

Of course, everyone talks about tougher standards and filters to ensure cards are issued only to the ‘right’ and safe customers. But it is hard to believe that more than a dozen card issuers could find a mere three million customers worthy of issuing cards in four years.

It is not as though the economy was in recession during this period for card issuers to look for excuses.

Economy growing

If anything, the economy has grown — whether gauged by the old method or the new — by at least 6-7 per cent annually. Besides, both volumes and value of transactions on the existing cards has grown three-fold during this period, reflecting both improved consumer sentiment and better quality.

Also, card issuers today have access to better data about the credit history of individual applicants through a number of credit information companies which were not operational a decade ago. Back then, they issued cards based on blind faith or on the enthusiastic marketing by their phone bankers or direct sales agents, without giving due regard to credit worthiness and over-leverage.

Today, that is not the case. Banks, therefore, should not be so hyper-cautious that they cease to take any risk at all. If it is indeed true that the Indian middle class is 400 million strong and there are about a million new job entrants every month, banks are clearly missing some opportunities.

Just 21 million credit cards in a country with 1,300 million people and 900 million mobile phones and nearly 700 million bank accounts, is appalling. Doesn’t do much for the image of India recovering or India shining, does it?

RuPay credit cards coming next year

LN Revathy

M Balachandran, Chairman, NPCI

Will offer complete inter-operability between various payment channels: NPCI chief

Tirupur (TN), June16:  

RuPay, India’s own payment system floated by the National Payments Corporation of India (NPCI), is set to roll out RuPay Credit Cards in 2016.

Disclosing this here on Tuesday, M Balachandran, Chairman, NPCI, said the RuPay (debit) cards issued by banks in India have shown that there is huge potential for growth of cards and the traction so far has been phenomenal.

“Nearly 13 per cent of usage on ATMs, Point of Sale (POS) and e-commerce transactions is through RuPay and this has happened within a year of introduction of RuPay cards,” Balachandran said, adding “transactions through RuPay is gaining 1 to 2 per cent strength month-on-month.”

Till date, banks have issued 160 million RuPay cards. NPCI is aiming to touch every Indian by 2020 and thereby support the growth of retail electronic payments in India.

The card, he said “is uniquely positioned to offer complete inter-operability between various payment channels and products. NPCI currently offers solutions across platforms, including ATMs, mobile technology, etc.”

Speaking on the sidelines of an event to commemorate the International Day of Family Remittances, the NPCI chief said the Corporation has grown multi-fold in the last five years from two million transactions a day to 20 million now.

RuPay has also tied up with overseas banks such as JCB for expansion outside India, he said, and hinted that discussions are at an advanced stage for tie-up with China Union Pay.

“We are coming out with a ‘Tap and Go’ solution for all smart cities. This will happen in about a year’s time. NPCI has given this to Axis Bank for Bangalore Metro and Kochi Metro.”

Design your own loan with HDFC Bank

Beena Parmar Mumbai, June 16:  

In probably a first of its kind ‘loan against shares’ (LAS) offering, HDFC Bank is allowing customers to design their own loans.

The entire loan offering is digitised and is aimed at reducing the time taken for the loan approval and disbursement from four to eight days (across the industry) to 24 hours.

Instead of visiting the branch to select their shares they want to pledge for taking the loan, a customer can go online and through his demat account ‘set his own limits’ by choosing different combinations of shares that he would like to pledge with the bank.

Based on the selected shares, the algorithm chooses the quantum of loan eligible, helping the customer optimise and design his loan.

“Once the customer confirms the allotted loan amount, the bank arranges for signing the documents physically from the customer as per the regulatory mandate from the nearest bank branch to activate the loan limit and get it disbursed immediately,” said Arvind Kapil, Senior Executive Vice-President and Business Head - Unsecured Loans, Home and Mortgage Loans, HDFC Bank.

The bank conducted initial testing of the process for nearly three weeks in tier 2 to tier 5 towns, such as Haldia, Bhadrachalam, Karnal, Manesar and Muzaffarpur, among others.

The private bank claims to have 50 per cent market share among private players in the LAS segment and plans to double its business on an annual basis.

HDFC Bank plans to target proprietors and small businessmen that cannot use the LAS facility at present.

Loan portfolio

HDFC Bank’s loan against securities (shares) portfolio stood at 1,353 crore as on March-end 2015, a 21 per cent growth over ₹

the 1,121 crore recorded in the year-ago period. ₹

“The (LAS) market of private banks is 500-600 crore per ₹month…I expect our business to double under this new digitised format…This digitisation has a massive cost-to-income improvement. I won’t be surprised if we see an improvement of 15-20 per cent (in our cost-to-income ratio) on an annual basis,” Kapil said.

About a month ago, the bank reduced the disbursal time for auto loans to 30 minutes.

Five things to watch out for today

June 17, 2015:  

National Security Advisor Ajit Doval is in Myanmar; he will meet the country’s top leaders, including President U Thein Sein. The visit comes days after the Indian Army carried out a counter-insurgency operation along the India-Myanmar border. Doval might prompt Myanmar to start talks on an extradition treaty that will enable it to hand over insurgents and fugitives.

Safai karamcharis are protesting against the corporation and the Delhi government. Municipal workers from 18 unions have said they have not called off their strike and will protest at Jantar Mantar. The workers claim the corporation has not released their salaries as promised.

Tanzanian president Jakaya Mrisho Kikwete is to pay a four-day state visit beginning today. He will be accompanied by a high-level delegation, including ministers and senior officials, apart from a business delegation. India is Tanzania’s largest trading

partner — with bilateral trade in 2013-14 being valued at over $4 billion.

Swedish carmaker Volvo will unveil its much awaited V40 in Hyderabad. The new beast follows the cross-country hatchback which was launched in June 2013 and will mainly take on the Mercedes A Class and BMW 1 Series.

Yoga fans, face Chengdu in China. India is organising an international yoga conference in this Chinese city. The camp, which marks International Yoga Day, will run till June 21. Yoga events will be held in all cities in China to mark the day.

(This article was published on June 17, 2015)

Shake-up time for public sector banks

Madan Sabnavis

The best way forward: It's confusing

They need to raise their capital to meet future growth needs. Divestment must be looked at seriously

June 16, 2015:  

The issue of capitalisation of public sector banks has come back to the discussion board. The problem is not acute right now as PSBs are adequately capitalised, with all of them having a capital

adequacy ratio of above 10 per cent, with 10 of them above 12 per cent.

The amount required to keep pace with growth is large, but at present demand for credit is low. But adhering to Basel III norms would put additional pressure on these banks. Further, as we are talking of GDP growth rate of over 8 per cent on a sustained basis, companies will have a problem raising funds if banks are not up to it, considering that the corporate debt market is still to evolve.

The question is how to infuse this capital in PSBs. PSBs account for around 75 per cent of deposits and credit. However, their share in equity capital is just 25 per cent, and reserves 60 per cent — which are two important components of tier 1 capital.

With banks making more provisions for the restructured assets, profits will be affected, thus impacting reserves. The usual routes for infusing capital are promoters putting in more money or additional funds being raised in the market through public issuances.

The control factor

But when it comes to PSBs, there is an ideological issue of the government retaining control. Being the majority owner of these banks, the onus is to ensure that these banks are well capitalised and able to meet the challenge right up to 2019 when we are fully Basel II compliant. The immediate option is to infuse capital through the Budget. In the last five years, including FY16, the amount provided through the Budget has been 54,447 crore. ₹However, for the period FY12-FY13, an annual average of

13,172 crore was allocated, while for FY15 and FY16 it is ₹7,465 crore. Budgetary constraints have clearly put pressure on ₹

these numbers.

Given a capital adequacy ratio of roughly 10 per cent, a lower allocation would mean that the ability to generate risk-weighted assets of about 57,000-60,000 crore gets affected (difference ₹between 13,172 crore and 7,465 crore). This will put future ₹ ₹constraints on growth if not substituted by other sources of funds.

One way is to provide such funds to banks which meet certain performance parameters. The other school of thought is that banks which are not doing relatively well should be supported more through such infusions. Now, if the government has limited bandwidth to provide funds or is ideologically inclined to support only the better performing banks, then the logical conclusion is to either merge banks that have a shortfall or let them go to the equity market.

The current thinking is that the government will continue to hold majority stake. Who would like to buy a large stake in the bank either as a strategic partner or investor in a weak bank with the government as owner? Based on current market prices of 21 listed PSBs (excluding the SBI associates), the total amount that can be garnered while retaining the government stake at 51 per cent would be around 47,000 crore. ₹Labour issues

Divesting beyond 50 per cent is another solution, albeit a tough decision, but that would require tackling the issue of labour. Logically, full divestment is akin to selling to or merging with a private bank. But payscales and staff rationalisation are issues.

Curiously, PSBs have actually done very well on the staff front in the last 10 years. Total headcount increased by 11 per cent between 2004-05 and 2013-14. However, the increase was only in the officers’ category by 46.4 per cent while those for clerks and sub-staff declined by 4.3 per cent and 9.8 per cent respectively. The average cost of an employee has increased

from 3.36 lakh to 9.07 lakh, which indicates that compensation ₹ ₹too has been steadied to market standards.

This does indicate that tackling unions may not be the major hurdle provided appropriate steps like training, promotions, re-skilling, compensation are taken. In fact a strategic sale to a private investor can be thought of where there are safeguards for the staff, but autonomy for the new management.

To maintain status quo in ownership and structure, merging with other PSBs is an option. But this is a short-term solution, as ultimately the same balance sheet gets to reside in another bank’s balance sheet. The effort has to be on rationalisation of branches, infrastructure, staff, positions and designations.

The last option is to get the undercapitalised banks to function like narrow banks by investing in GSecs as their risk weighted assets would improve. This will hold for banks that have problems of both capital and NPAs as the present provisioning for restructured assets would put some additional burden on capital requirements.

PSBs have carried the cross for development all these years and have not changed focus to retail lending to protect their balance sheets. It is only proper that we move towards a workable solution.

(The writer is chief economist at CARE Ratings. The views are personal)

‘We can never be what we were’

R Srinivasan

Keshav Murugesh, Group CEO, WNS

So long as evolution in business is a reality, business process management will also evolve, says Keshav Murugesh

The ebullient Keshav Murugesh, Group CEO of WNS, is in many ways the archetype of the Indian IT-ITeS success story. Right from the time he took advantage of a truckers’ strike in Visakhapatnam to scale his father’s freight clearing and forwarding business to leaping into the BPO business from selling gensets, he has displayed a remarkable eye for the next opportunity, and an even more impeccable sense of timing.

Today, as head of the NYSE-listed WNS Global Services, he heads one of the world’s leading business process management (BPM) companies and, as chairman of software body Nasscom’s BPM Council, has a unique helicopter view of the sector. He spoke to Businessline on where the BPM sector stands today, and where it is headed. Excerpts:

Is BPM at its most mature stage ever? Can there be more to what we see than what we already do?

The answer is very simple. The beauty of BPM is that it is closely aligned with the client’s business. Every player in the BPM industry is almost like the backbone to the business it supports… therefore, if the client evolves, BPM evolves.

A few years ago, were driverless cars ever considered a reality? Today they are… so, what does a BPM player have to do? I can give you a WNS example. We are constantly thinking about how driverless cars and a world free of accidents would disrupt the insurance market. We work with some of the largest insurance clients in the world. Our thinking caps are on to discuss the changes in policy and support in such a world.

Another recent example, the case of AirBnB; while homestays have been around for a while now, no one thought that such an organised disruption could happen to the hospitality market, like the one AirBnB has brought. A BPM player has to reinvent solutions and services to cater to such an audience. So long as evolution in business in whatever form, small or big, is a reality, the evolution in BPM will also be a feature. We can never be what we were yesterday!

The growth of the IT-ITeS-BPO sectors essentially laid the foundation for the surge we saw in the last decade. But can the sector sustain the pace? Where are the next million jobs coming from in this space?

The sector is most certainly going to maintain its momentum. Despite political and socio-economic headwinds, this sector has continued to perform steadily. With specific reference to BPM, growth was over 12-13 per cent with India retaining its leadership position in the global sourcing area with a share of 55 per cent in 2014. Today, BPM stands at $26 billion of exports and the aim is to get to $50 billion by 2020.

Look around and you will realise where the next million or more jobs will come from! Most global organisations today have embraced social, mobility, analytics and cloud (SMAC) in an effort to deepen engagement with their customers. It is the age of driverless cars, mobile apps, virtual reality, robotics and so on. The digital age has thrown open a plethora of opportunities to directly connect with the customer.

In fact, many organisations today create products based on crowdsourcing customer opinion. How will organisations cater to this dramatic change in technology and customer intimacy single-handedly?

So jobs will be for those who can understand the leap that technology has taken, specialists of every kind across industries, generalists who can marry organisational goals with customer experience… people who have the attitude to excel at work!

Is this pace sustainable, or does it need policy intervention? If yes, which areas?

BPM has grown dramatically with minimal help from various quarters; however, for it to reach its goal of $50 billion by 2020, it needs support from the government to move into the hinterlands. The next level of growth will come from Tier-2 and Tier-3 cities. The government has to invest in infrastructure… better airports, highways and, more importantly, telecom connectivity in these locations.

We also need an overhaul of our educational system wherein we create future ready candidates. Nasscom through the Sector Skills Council and industry players has done commendable work in this area by creating curriculum and testing frameworks. However, the government has the power to change the entire educational system, which is what we need.

Also, it would be good to see State governments vie with each other for business in the true sense of the word. They must invest first and we will follow with talent, differentiation and new jobs.

There is a lead-lag gap between skills demand and supply (from the education sector). During the boom phase of IT, skills were in short supply. By the time the education sector scaled up, there are too many IT engineers being produced for the jobs available. Where are the demand-supply gaps in your area, and what needs to be done to bridge this?

The gap is in getting specialists because BPM today has moved to delivering higher value services. The industry has transformed dramatically with its focus on domain expertise (understanding every other industry inside out – for instance, expertise in banking, manufacturing, healthcare, etc) and investing in SMAC-led technologies and robotics.

As on date, we have a large number of specialised talent — doctorates, lawyers, doctors, CAs/CPAs, MBAs, linguists and others. We are certain that the demand for such specialists will only be on the rise. That in no way precludes graduates from joining the industry. Most industry players have very robust programmes to train fresh graduates. For instance, WNS has domain universities (specialising in specific domains, for example travel) in different areas to create specialists from generalists. The challenge we are focused on is re-skilling of internal resources used to old models while adding new age business thinkers and talent.

The skills/cost dilemma — the pressure is to bring more talent to bear on tasks, the challenge is to do so in a cost competitive manner. Is Indian talent pricing itself out of the market?

I would like to answer that differently; every country has its own strengths and BPM players typically leverage that difference in strengths extremely well in delivering value to clients. WNS for instance has 37 delivery centres across 10 countries.

We know that certain client requirements would require time zone affinity, while others may require language skills, and some others could include finance and accounting or analytics expertise. The location strategy is based on driving real bottomline impact to clients. I don’t think cost differential alone would make any location more attractive than the others. I think today all locations are levelling out in terms of what they can offer.

Binary care

C GOPINATH

Sharing technology for strategic reasons

June 16, 2015:  

Technology purists love to debate the choices made when the open architecture of the original ‘IBM pc’ helped rapid market acceptance and a dominant market share compared to Apple’s closed design for which it paid a price in terms of market share.

Companies make a careful choice when they decide to take a patent on a product or process innovation. Taking a patent on proprietary technology often depends on whether it is defensible, that is, when you can catch the violator. If your unique knowhow is embedded deep in a microprocessor, or in a sealed widget that

cannot be seen or accessed, you do not want to lay it bare in your patent application for the world to know.

Companies also have to make the tough choice about whether to share the know-how with others, help develop it into a standard, let the market grow and benefit from it; or alternatively, to cling on to it and derive revenues from own use and licensing.

Open systems

The story of how Sony clung on to Betamax for the videotape format (said to be superior technically) while JVC’s VHS went on to become the standard is well known.

When Philips and Sony independently developed the compact disc (CD), Sony had learned its lesson and collaborated with Philips to jointly develop a standard that was offered in 1979. Downstream variations, such as the CD-R, CD-RW and so on began to develop.

Linux operating system is the other classic example of an open source technology that went on to spur various other efforts and developers, and dampened the competitive intent of big players such as Sun Microsystems.

Carefully done, baring the fundamentals of an innovation can not only help develop your market abut also throw a spanner into the intent of a major competitor!

The IT sector drew attention not too long ago for patent trolls — where firms acquired thousands of patents with a view to opportunistic licensing and would viciously go after small entrepreneurs threatening them with law suits because they may be in violation of some patent.

Many dreams were shattered by the entrepreneurs’ inability to pay up or fight in courts. The liberal issue by the US patenting office of patents in this field contributed to this situation. Did you know that Amazon holds the patent in the US for allowing customers to make a purchase with a single click of the mouse, but could not sustain it in Europe?

Musk’s way

The trend seems to be turning in some areas of technology and now firms are more willing to show-and-tell what they have than to hide. Facebook has shared designs of computer servers, data storage and other hardware related ideas. Various fairs are held around the world where participants show what they are working on — and the participants include both your garage- level entrepreneurs as well as established firms.

Tesla, the electric car company, is taking the market-building route. Elon Musk, Tesla’s founder and CEO, and evangelist-at-large announced that he was going to share his firm’s patents because he wants to see an electric car industry develop. As other manufacturers experiment and create cars with similar performance, consumer acceptance would grow, and the support network required such as car-charging stations and mechanics would also emerge.

Ever wondered what would have happened if Tim Berners Lee had taken a patent on the design of the world wide web?

(The writer is a professor at the Jindal Global Business School, Delhi NCR and at Suffolk University, Boston)

(This article was published on June 16, 2015)

Still too many going hungry

B Yerram Raju

Despite the high growth years, malnourishment stalks the countryside. This calls for a small-farmer led focus

At a time when India’s GDP growth is hopefully pitched at 7.5 per cent this fiscal, touted to be higher than China’s, three global reports of significance also grabbed the headlines: The Global Findex Data Base 2014, The Global Food Policy Report of the UN and the State of Food Insecurity in the World, 2014.

Ahead of all these, the IMF and the World Economic Forum reported that 25 per cent of India’s population still remains poor.

The Global Findex Data measured the financial inclusion around the world. The other two reports dealt with the food insecurity and the measures to tackle them.

It must be remembered that the data is mostly up to March 2014. The findings are of great import to this government for designing policies tackling financial inclusion, hunger and malnutrition.

The government would like to measure the poor by the JAM method — Jan Dhan account, Aadhaar, and the mobile. It has been acknowledged universally that there were no deaths due to

hunger. But the farmers who produced food committed suicide were burdened by excessive debt.

The undernourished poor, like the Jan Dhan accounts, showed an impressive decline in the reports and these are counted once every three years.

A range of indicators can be used to measure a nation’s food security. These include average dietary energy and protein supply, access in terms of road and rail line density, domestic food price index, prevalence of under-nourishment, stability measured in terms of cereal import dependence ratio, political stability as well as absence of violence and terrorism, undernourished children below five years, anaemia among pregnant women, and vitamin A and iodine deficiency in the population.

Measuring insecurity

Malnutrition is redefined to include obesity and overweight. In India, child stunting (under five years) is 47.5 per cent while undernourishment is 15.2 per cent; whereas overweight population is 11 per cent. The country witnessed an average GDP growth of 8.7 per cent in 2003-08, 6.7 per cent in 2008-09, followed by 8.6 per cent and 9.3 per cent in the next two years.

When the growth of GDP was high and food inflation was also high, there was a decline in the percentage of under-nourished population.

This enigma can be explained only by the social security measures implemented during those years. But the absolute numbers of the undernourished: a whopping 190.7 million cannot be wished away.

Malnutrition and under-nourishment are proving to be endemic owing to poor sanitation, open defecation, and lack of safe drinking water. These increase the hold of vulnerable diseases, which along with food inflation would inevitably lead to reduction of expenditure on food.

In an agrarian economy like ours where 82 per cent of the farmsteads are in the hands of small and marginal farmers, a number of ameliorative measures have been recommended.

These include: flexible arrangements for land transfer, access to risk mitigation tools and market information, pro-small holder, nutrition-sensitive value chains, vertical and horizontal integration of safety, quality and quantity standards, as well as social safety nets.

Moving up, moving out

The reports highlight the need for small family farms to take the challenge to move up in the production and value addition ladder or to ‘move out’ of farming.

Institutional mechanisms of extension, credit in terms of access and availability beyond Jan Dhan, and a determination on the part of the government to insure for failures — both natural and social — to the extent required deserve serious and immediate attention.

The zero hunger challenge hinges on 100 per cent access to adequate food round the year, zero wastage in food, 100 per cent increase in small farm productivity, sustainable food systems and zero stunted children (below two years).

The report on food insecurity further highlights that the amount of food lost or wasted every year amounts to half of the world’s annual cereal crops (2.3 billion tonnes in 2009-10).

Food is reported to be wasted in the entire supply chain; in the developed world retail chains it is as high as 45-48 per cent, higher than what India reports for its fruits and vegetables at 40 per cent annually.

What lessons?

The three reports have at least four lessons for us:

1. Go beyond the numbers in financial inclusion — ensure that every leaseholder, and small and marginal farmer gets access to hassle-free credit at low rates of interest.

2. Source raw materials for all agro-based enterprises from local farmers to minimise transportation.

3. Invest in better storage and better proportioning of food in restaurants and local retail chains.

4. Make subsidies for the farm sector a boon and not a bane inasmuch as farm subsidies are $30 million in the US and €40 million in Europe.

(The writer is an economist, risk management specialist and on the board of governors of the Farm & Rural Science Foundation, Hyderabad)

(This article was published on June 16, 2015)

How women are raising the bar...

Our Bureau

Mixologist Ami Behram Shroff

Some tend bars for fun, others are taking it up as a professional career

Ahmedabad, June 16:  

Bharati quit a well-paying corporate career in Pune and shifted to Bengaluru to take it up. Ami Shroff, an 11-year veteran in this field, took it up for the sheer love of making cocktails. And Amrita Puri opted for it because she hated the traditional 9-to-5 grind.

Welcome to the brave new world of female bartending.

New line of work

Increasing prosperity, particularly in urban areas, has led to the opening of trendy bars, prompting some women to look at bartending as a career option. It helped that the Supreme Court overturned a 1914 British era law that prohibited it, in 2007.

It’s a fairly lucrative profession — a female bartender earns three times more than a call centre worker.

Shatbhi Basu got involved with the bartending long before the law was abrogated. With over three decades of experience, she is known as India’s first female bartender. Basu runs a bartending academy in Mumbai and has also authored a book on mixology.

She learnt the fine art of mixing liquor in Goa. Basu is the manager of a bar and also does freelance work.

“My job is very exciting. After initial hesitation, my friends and family are now happy with my job. They understand.”

Welcoming women

The industry, particularly in metros, has become more open to women working behind the bar and has started to hire female bartenders.

Ami Shroff has been freelancing at various private functions in Mumbai.

“I know four or five other female bartenders. There are more in the mega-city.” She is quite comfortable and confident about her career. “My family is also fine with it and wants me to succeed. And late working hours are no longer a matter of concern for us.”

A few months ago, French alcohol firm Rémy Cointreau made waves in Mumbai with a competition for female bartending, which received a tremendous response.

Amrita Puri turned a professional bartender as she loved the job and felt she was not cut out for a 9-to-5 routine. All she wanted was a job that paid well and had flexible working hours.

She loved mixing cocktails in the comfort of her home and liked to host parties, creating something out of the ordinary. This led her to professional bartending.

How women are raising the bar...

Our Bureau

Mixologist Ami Behram Shroff

Some tend bars for fun, others are taking it up as a professional career

Ahmedabad, June 16:  

Bharati quit a well-paying corporate career in Pune and shifted to Bengaluru to take it up. Ami Shroff, an 11-year veteran in this field, took it up for the sheer love of making cocktails. And Amrita Puri opted for it because she hated the traditional 9-to-5 grind.

Welcome to the brave new world of female bartending.

New line of work

Increasing prosperity, particularly in urban areas, has led to the opening of trendy bars, prompting some women to look at bartending as a career option. It helped that the Supreme Court overturned a 1914 British era law that prohibited it, in 2007.

It’s a fairly lucrative profession — a female bartender earns three times more than a call centre worker.

Shatbhi Basu got involved with the bartending long before the law was abrogated. With over three decades of experience, she is known as India’s first female bartender. Basu runs a bartending academy in Mumbai and has also authored a book on mixology.

She learnt the fine art of mixing liquor in Goa. Basu is the manager of a bar and also does freelance work.

“My job is very exciting. After initial hesitation, my friends and family are now happy with my job. They understand.”

Welcoming women

The industry, particularly in metros, has become more open to women working behind the bar and has started to hire female bartenders.

Ami Shroff has been freelancing at various private functions in Mumbai.

“I know four or five other female bartenders. There are more in the mega-city.” She is quite comfortable and confident about her career. “My family is also fine with it and wants me to succeed. And late working hours are no longer a matter of concern for us.”

A few months ago, French alcohol firm Rémy Cointreau made waves in Mumbai with a competition for female bartending, which received a tremendous response.

Amrita Puri turned a professional bartender as she loved the job and felt she was not cut out for a 9-to-5 routine. All she wanted was a job that paid well and had flexible working hours.

She loved mixing cocktails in the comfort of her home and liked to host parties, creating something out of the ordinary. This led her to professional bartending.

ADB to increase annual lending to India to $4 b

K R Srivats

More support: ADB President Takehiko Nakao addressing a press conference in New Delhil on Tuesday. - KAMAL NARANG

Will support initiatives such as Make in India, Skill India, Clean India

New Delhi, June 16:  

Asian Development Bank (ADB) has decided to increase its lending to India as part of efforts to support the country’s new initiatives that target higher growth and reduced poverty.

From being an average $ 3 billion annual lender, ADB will move towards annual lending of $ 4 billion to India in next few years, the visiting ADB Bank President Takehiko Nakao said.

The Modi-led Government’s new initiatives that would be supported by ADB under the enhanced lending would include

Make in India, Skill India, Clean India (Swatch Bharat Mission), Smart Cities and Atal Mission for Rejuvenation and Urban Transformation (AMRUT).

“In India, ADB aims at increasing its sovereign and non-sovereign lending from the present $7-9 billion in three years from 2015-17 to $10-12 billion between 2016 and 2018 using ADB’s expanded lending capacity”, Nakao told a press conference after meeting Finance Minister Arun Jaitley here on Tuesday.

ADB’s annual lending capacity is expected to increase to as much as $20 billion a year from the current level of $13 billion based on the merger of its Asian Development Fund lending operations with its ordinary capital resources balance sheet.

When compared with other Asian countries, India is good place to increase lending using the ADB’s increased capacity, Nakao said.

“India is a good borrower for us and they (India) have never missed a repayment. If India follows the right policies, there are good opportunities for it to grow faster”, he said.

In March this year, ADB had forecast India GDP growth at 7.8 per cent in 2015-16. It had projected China’s growth at 7.2 per cent this calendar year.

The India growth forecast will get updated in July when the ADB releases its new report, Nakao said, while declining to comment on whether the growth rate will be revised upwards or downwards.

“India is already looking at several good reforms like GST, labour market reforms, removing energy subsidies. If it continues to follow right policies, it has potential to grow faster than China”, Nakao said.

He also did not see international oil prices climbing up to $100 per barrel levels anytime this year.

Asked if he saw any impact of the likely US Federal Reserve rate hike on the Indian economy, Nakao said there could be some “hiccups” or volatility.

“It (US monetary policy normalisation) will not cause a major problem as people are already expecting it”, he said.

Emerging markets like India should take advantage of the sustained low real interest and inflation conditions (around the world) in the coming years.

On interest rates in India, Nakao saw some room for policy rates to come down further given that there are no concerns about inflation.

“The 7.25 percent policy rate is still not excessively low. If inflation rate is lower, of course interest rates can come down further. I don’t want to predict monetary policy of India. My view is interest rate should be adjusted to the economic conditions of the country”, he said.

Nakao - who is on his second visit to India this year - on Tuesday evening travelled to Jaipur as part of a two-day visit to Rajasthan.

Besides meeting the Rajasthan Chief Minister Vasundhara Raje, he will also visit the ADB-supported projects in the State.

Aadhaar will help do away with sending I-T verification form after e-filing

Our Bureau

Anita Kapur, Chairperson, CBDT

Tax Dept working on complete profiling of each tax payer

New Delhi, June 16:  

If you have given your Aadhaar number while filing your income tax returns, then you don’t need to submit the Income Tax Return – Verification (ITR V) form.

The Central Board of Direct Taxes (CBDT) Chairperson Anita Kapur said that Aadhaar record has all the biometric including signature, so verification can be done on the basis of the unique identity number and filing will be completed.

Sharing with the media the strategies adopted by CBDT to go paperless and make the system hassle-free for the individual tax payers, she said that refund will not be delayed.

“If the Aadhaar number and your PAN number match, then on your mobile, we will send you OTP (one-time password). So, once you upload your return instead of going and printing ITR V printout, there will be icon showing where you need to put the OTP and validate the return,” she said while adding that the OTP life is likely to be for 24 hours. However, one can make another request for OTP if the first one has lapsed.

At present, digital signature is a must for filing corporate tax returns, but not for individual income tax payer. Such electronic signature can be procured from the Government agency and it has a validity of 2-3 years. This is one of the main reasons why individuals prefer to dispatch ITR V by speedpost or courier.

However, there were complaints about forms not reaching Bengaluru on time or getting lost in transit. Keeping this in mind, the new system has been planned. The return filing process will start in a couple of days, after the tax department uploads new forms (with space for Aadhaar).

But, tax payers who do not have either the Aadhaar or the digital signature can continue sending the ITR V form.

If any individual income tax payer does not have digital signature, he needs to take print out of ITR V after uploading the return form and send it to Bengaluru within 120 days, where the return is assessed and refund issued, if any.

Rise in e-returns

Law requires signature on the form to establish that information given is correct and any wrong declaration can lead to punitive or prosecuting action. Over 2.96 crore e-returns were filed in 2013-14 which rose to over 3.41 crore in 2015-16. Any individual tax payer with income over 5 lakh needs to mandatorily file e-return.₹

Kapur said that the Tax Department will do complete 360 degree profiling of individual tax payers with the help of a new system called ‘Income Tax Business Application’ (ITBA). This will be rolled out in phases and completed by next year.

(This article was published on June 16, 2015)

Sushma’s action was bona fide: Jaitley

Our Bureau

United front Finance Minister Arun Jaitley with Home Minister Rajnath Singh at a press conference in New Delhi on Tuesday. The duo backed Cabinet colleague Sushma Swaraj in the Lalit Modi issue. PTI

Finance Minister downplays ED cases against Lalit Modi

New Delhi, June 16:  

After Home Minister Rajnath Singh and BJP president Amit Shah, it was the turn of Finance Minister Arun Jaitley to come out in support of External Affairs Minister Sushma Swaraj in the Lalit Modi controversy.

At a press conference here on Tuesday, Jaitley fully endorsed Swaraj’s position while maintaining that the Enforcement Directorate has issued show cause notices to Lalit Modi in 15 cases, the investigations of which are over. Swaraj has been facing criticism for helping former IPL head Lalit Modi in procuring travel documents from the UK.

With Jaitley also joining the senior team of BJP politicians defending her, the signal being sent by the government was one of putting a united front on such issues.

Ahead of the press meet, Jaitley held a meeting with Swaraj and Rajnath on the special package to flood-hit Jammu and Kashmir.

When asked why Jaitley had been silent on the issue till now — when the government was under attack from all sides and BJP MPs like Kirti Azad had hinted that internal issues could be a problem behind the “campaign” against Swaraj — he said all ministers in the Narendra Modi Cabinet are capable of taking decisions. Once a decision is taken it will be a collective responsibility of the government, he added.

“All allegations levelled are baseless. Her (Swaraj) statement and that of the party president — that whatever she did was with good intentions — are true,” he told reporters at a joint press conference with Rajnath.

Shades of blue

Jaitley added that Swaraj acted bona fide. “The entire government and the party are one on the issue. There should be no doubt on this,” he said.

When asked about the blue-corner notice against Lalit Modi by the ED, he said: “There is confusion about shades of blue.”

“There is a procedure of a blue-corner notice which is issued by the Interpol. There is a procedure of a light blue corner notice which is issued by the Directorate of Revenue Intelligence at the request of ED. That notice was issued in 2010 and that notice continues to be valid even today,” he added.

Cases aplenty

The Opposition, which has been demanding that the Prime Minister state his stand on the issue, continued with its tirade against the Centre today.

The Congress maintained that Lalit Modi is accused in a number of cases. “This government has said in Parliament that the cases against this person, BCCI and other criminals involved in match-fixing and money-laundering are to the tune of 2,148.34 crore for₹ contravention of provisions of FEMA Act.

“So this (favour) was done to somebody who is sought to be prosecuted both under FEMA and the Prevention of Money Laundering Act,” said the Congress’s deputy leader in Rajya Sabha, Anand Sharma.

Monsoon to get further boost as churn builds in Bay of Bengal

Vinson Kurian

Thiruvananthapuram, June 16:  

An upper level wave instrumental for the boost of monsoon over India is now in the process of moving out towards the South China Sea/West Pacific.

But it has already left behind enough fuel over the Arabian Sea and the Bay of Bengal for the monsoon to thrive for the rest of June.

MJO wave

Latest update from the Australian Bureau of Meteorology said that a helpful Madden-Julian Oscillation (MJO) wave was active over the Indian Ocean region over last week.

The wave travels periodically in the higher levels of the atmosphere but contributes to generating rain-carrying clouds at the ground level.

The movement of the wave could not be captured effectively due to the overarching influence of El Nino over the region and related atmospheric features.

But on hindsight, the Australian Bureau was able to chart the track of the MJO wave, which is now located over central Indian Ocean and the Maritime Continent (Indonesia, et al).

This is what the Bureau has to say: “The MJO maintained a moderate to strong signal as it moved over the Indian Ocean last week.”

Monsoon progress

“During this period, the monsoon progressed from southern to central India, delivering average to above-average rainfall to much of the subcontinent.

By contrast, the Philippines and much of South-East Asia saw generally suppressed convection (process of cloud-building and rain).

The focus of convection has now moved to the central Indian Ocean and equatorial parts of the Maritime Continent.”

While the monsoon has been in good shape over the Arabian Sea, its Bay of Bengal arm has lagged evidence in the skewed alignment of the northern limit of the monsoon.

While the Arabian Sea arm has reached ahead of time in central India, the Bay arm is wallowing over Northeast India at a time when it should have reached Uttar Pradesh.

‘Low’ likely

The Bay is now expected to catch up, taking advantage of the MJO. Models are pointing to the likelihood of a low-pressure area forming soon there.

A ‘low’ helps carry rain-bearing clouds from the sea into land as it moves in a west-northwest direction from where it takes shape.

India Met Department has picked up an upper air cyclonic circulation over west-central Bay of Bengal off north Andhra Pradesh-south Odisha coasts this morning.

This is exactly where global models have been pointing to as the likely area of formation of the ‘low'.

The behaviour of the cyclonic circulation is being watched; all it needs is to descend to the lower levels of the atmosphere to set up the ‘low.’

The BL Interview

‘Insurance distribution costs should come down’

NS Vageesh

ANUJ AGARWAL, MD & CEO, Bajaj Allianz Life Insurance

Banks have very large databases and those should be utilised well: Bajaj Allianz Life MD

Bajaj Allianz Life Insurance, the fourth-largest private insurer in the country, grew its premium income 4 per cent last fiscal. Prima

facie, that may seem rather flat. But given the loss of an important banking partner early in the year, and the difficult conditions in the life insurance industry, Anuj Agarwal, MD and CEO of the company, feels this performance was creditable.

He is hopeful that this fiscal will see a significant improvement with a more favourable regulatory environment. In this interview with BusinessLine, Agarwal gives his views on the new distribution architecture being debated in the industry. Edited excerpts:

What are your views on the changes in distribution architecture being proposed by IRDA?

They have been very positive over the last year, with guidelines on insurance marketing firms, on intermediaries and more recently on open architecture for banks. Banks have very large databases and those should be utilised well. That can happen only if the choice is given to the customer.

Look at the Jan Dhan Yojana. If the government wants to reach the masses, they use banks. So, is it not obvious that if you want to increase life insurance penetration, banks need to be utilised more? What has happened is that banks have become a lobbying group. All insurance companies are vying to tie up with banks and this pushes up costs. There is a scarcity of distribution models. Most of the tie-ups for India happen outside India. That is not good.

When the costs of distribution go up, who pays for it? It is the customer. So, if we want to provide good service to the customer that can happen only if you cut costs and do it through competition. That is what happened with the telecom revolution in our country. There was a time when we had to wait until 10 pm to make STD calls at cheap rates, whereas today any call costs just

1 a minute. That was unimaginable then. That will happen in life ₹

insurance, too. The cost of distribution should come down. It is important.

What about the sanctity of contract for foreign partners who invested in their joint ventures with some insurance companies and paid a premium on the understanding that they have an exclusive tie-up? How is it fair to them?

I can understand the point you are making. But the last time I heard this was when East India Company was made to buy all the cotton products from India and there was only one distributor through whom you could sell.

The moment you opened it to competition, it fell. I respect the contract. There is no point in arguing or avoiding it. At the same time, look at why insurance liberalisation was done?

In the year 2001, when IRDA opened up the sector, the new business done was 10,000 crore. In the year 2011, that rose to ₹

1,30,000 crore. Last year, it fell to 1,10,000 crore. So, what are₹ ₹ you trying to do? LIC had about five decades and the new business grew to 10,000 crore. In the last decade, that has ₹grown 10-fold.

The next leap can come from opening up the insurance database and utilising the bank network. The value of their distribution network will actually go up when it is shared, and they distribute any company’s products.

Let me rephrase the question. If your parent Bajaj was asked to share its dealer network with other two-wheeler manufacturers because vehicle penetration needed to improve, would it agree?

It depends on what the objective of the country or company is. I do not know about vehicle penetration in India. I can talk about financial penetration. Take a mutual fund product.

A bank sells any MF’s products. Remember also that Bajaj created those dealers, whereas here you are asking for an existing network to be better utilised. If I have created a network, I would like them to sell my product.

However, if there is another group that is already existing with a bigger distribution (say a Big Bazaar), why not we sell through them also? That is important for the customer. Banks are the custodian of customers and they should offer the best products available in the market.

The moment you say that this is the only product you can buy, then you are not caring about the customer. The reason the IRDA brought the broker guidelines was only this — that the broker represents the customer whereas the agent represents the company. The question for the bank is whether it wants to be a broker or an agent.

You want it to be a broker….?

No. Whatever the regulator has decided should be accepted. In my view, the relationship with the customer should be owned by the bank.

Is the new draft on open architecture positive for the industry?

The earlier draft had made open architecture mandatory for banks. In the new draft, they are not making it mandatory. They are leaving it to the banks to decide whether they want to do it or not. It is a positive thing for banks but it is negative when seen from the point of view of the first draft.

There were just about four crore policies sold by the industry last year. See the gap when you compare it to the insurable population in India. We have come a long way on the back of providing accessibility. We should not cut down on that.

Monsoon to remain active over central and east India

Vinson Kurian

Thiruvananthapuram, June 16:  

The monsoon did not make further progress towards North on Tuesday, apparently waiting for the Bay of Bengal to get active and push more rain into central and east India. Global models have been suggesting the formation of a low-pressure area off the Andhra Pradesh-Odisha coast this week to boost the monsoon in the region.

‘Low’ expected

India Met Department has spotted an upper air cyclonic circulation over west-central Bay of Bengal off north Andhra

Pradesh-south Odisha coasts. Its projections too favour the formation of a ‘low,’ which would cross coast and travel almost along a straight line across central India towards Mumbai-Gujarat.

This would likely bring another round of heavy to very heavy rainfall over central India and west India, covering Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh and Odisha.

The European Centre for Medium-Range Weather Forecasts and the US Climate Prediction Centre agree with this outlook.

The US Centre predicts that the rains will cover entire east India and northern parts of northwest India (Uttarakhand, Himachal Pradesh and Jammu and Kashmir) by June 28.

Dipole event

The Application Laboratory (APL) of Jamstec, the Japanese national forecaster, persists with the outlook that the Indian Ocean would witness a ‘positive dipole phase’ soon.

It could start influencing the regional weather (which includes Indian monsoon) from August, the APL said in its latest update.

Indian Ocean Dipole mimics El Nino-La Nina in the equatorial Pacific; the positive phase is when the western part of the ocean warms up relative to the east, and vice versa.

The positive dipole phase has come to the rescue of the Indian monsoon in the past, notably in 1997, which was a strong El Nino year.

July trend

It will be interesting to watch how this El Nino year plays out with a positive phase of the dipole being forecast.

The Japanese forecaster also said that India would likely witness a deficient monsoon in July.

August may turn predictably better with excess rain seen for central India and parts of adjoining north-west and east India. South India too may get good precipitation. But come September, the situation may reverse again with rain deficit forecast for most parts except in the east and north-east.

This goes to cast doubts on the strength or tenure of the positive dipole event.

Earlier on Tuesday, the Australian Met Bureau credited the good monsoon to unexpected support from the higher levels of the atmosphere in the form of a passing wave to the east.

‘Microsoft is clearly a challenger to Android’

Abhishek Law

AJEY MEHTA, Managing Director, Microsoft Mobile Devices (India)

Windows 10 aims to achieve unification of platform that means that users will have the same operating system for phones, tablets, notebooks and desktops.

And this will be the impetus for Microsoft Mobile Devices (India) to come ahead with its flagship devices, Ajey Mehta, its Managing Director, pointed out. So far the focus was on budget and mid-range handsets. Apart from the OS, Microsoft Mobile Devices is also rolling out a slew services and applications on top of its smartphones to regain lost ground. In an interview to BusinessLine, Mehta talks about flagship devices, the strategy surrounding the brand, and, on competition. Edited excerpts:

Microsoft’s growth came from the affordable or mid-market devices. What about flagship ones?

Yes. Our growth over the last one year has been from the affordable and mid-segments. It is the 5,000 to 15,000 price ₹ ₹brackets, where we have had our successes. Going forward, in order to establish ourselves as a credible player, we need to have a presence in the flagship (high-end) segment. We will be rolling out our flagship devices only with Windows 10. However, there is no date (for launch of such handsets).

Too much of focus on the affordable and mid-priced segments might not be good for flagship devices. Indian handset vendors face such perception problems. What is your strategy?

That is why you need to first establish a strong consumer proposition. The most critical part for us is to establish Microsoft as a strong consumer brand. We want Microsoft as an umbrella brand covering Lumia, Skype and all the services.

This apart, the brand should have a credible presence in the flagship segment, for people to realise it. They should be willing to

upgrade; invest that extra money. It is the brand that will drive the proposition.

But Microsoft is primarily considered as an enterprise brand. What changes are there in the offing?

Store re-branding is one (either as Microsoft Priority Reseller for exclusive outlets or Microsoft Mobile Reseller for multi-brand ones). We are actually re-branding close to 9,000 stores (in India), which will be completed either by month-end or in July.

Some of the service centres too will be re-branded. But we have not taken a call on them yet. A lot of advertising around (Lumia) 640 and 540 are being done. Focus is also on the TV and retail campaigns. We are actually targeting consumers now with the Microsoft brand, which was not the case previously.

We have found that people consider Microsoft as an extremely respectable brand and there is a potential for it being loved by the consumers. So when Lumia 535 (the first Microsoft branded device) came out, one of the top three drivers for it was the brand name.

Considering the price levels at which smartphones are available, there is very little scope for feature phones. Do you intend to remain there?

For us the feature (phone) segment is very important. We see that at a sizable volume and scale in the future.

Feature phone as a segment is where we can start to introduce Microsoft services to the consumer.

Currently, of the 400 million-odd internet users, some 70-80 per cent is through mobile phones.

As the smartphone users increase, there will be people who will for the first time access the internet, from their handsets. All these first time users (of internet) will come from the feature phone segment.

So, if we can actually start socialising our Microsoft services and applications with consumers while they have a feature phone, then we can upgrade them to a Windows smartphone and hope they will stay there. That’s a huge segment where we see massive future potential.

For now, the feature phone segment will continue to be branded as Nokia. We have not taken a call on whether to re-brand them or not.

How is Microsoft placed with respect to competitors like Android?

We are clearly a challenger to Android. Microsoft Mobiles in India is planning to aggressively grow the ecosystem, especially the Windows phone one. And we have seen a lot of success with the launch of new devices over the last few months.

In terms of OEM (handset) market share, you lost out the leadership position. Your comments.

Our focus is on growing the business. There are a large number of players in the market and some competitors are doing better than us.

We have our signature services like ‘Skype’, ‘Cortana’, ‘Bing’, ‘Office365’. We are in the business of delivering services and mobile experience.

Yes, it is a competitive market. And, we believe that we have a strong consumer offering. However, I can tell you that our market share has been growing.

WORK CULTURE

Experience is not always wisdom

Emre Soyer/Robin M Hogarth

What worked in the past may not work in the future unless we focus on the process

We rely on the weight of experience to make judgments and decisions. We interpret the past – what we’ve seen and what we’ve been told – to chart a course for the future, secure in the wisdom of our insights. After all, didn’t our ability to make sense of what we’ve been through get us where we are now? It’s reasonable that we go back to the same well to make new decisions.

It could also be a mistake.

Experience seems like a reliable guide, yet sometimes it fools us instead of making us wiser.

The problem is that we view the past through numerous filters that distort our perceptions. As a result, our interpretations of experience are biased, and the judgments and decisions we base on those interpretations can be misguided.

If our goal is to improve decision-making, we can use our knowledge of those filters to understand just what our experience has to teach us and learn how to overcome our biases.

We focus on what we can see

In the business environment, the outcomes of decisions are highly visible, readily available for us to observe and judge. But the details of the decision process, which we can control far more than the result, typically don’t catch our attention. If the aim is to

learn from experience – mistakes as well as successes – acknowledging that process is crucial.

Circle of advisers

Honest feedback – an unbiased, undistorted assessment of one’s experience – is essential for improving decisions. Yet decision makers are often surrounded by individuals who have incentives to feed them censored and self-serving information – and these people are not necessarily a crowd of yes-men.

Overvaluing experience

We can’t place all the blame for our distorted view of the world on the environment and our inner circle. Some of the blame lies with us. We tend to search for and use evidence that confirms our beliefs and hypotheses, and we gloss over or ignore information that contradicts them – an exercise of selectively building and interpreting experience known as the confirmation bias.

How not to be fooled

The following techniques can uncover the real lessons experience offers and help you base decisions on a clearer view of the world.

Sample failure: Failures and the processes that lead to them are doomed to stay in the dark unless special occasions are created to bring them to light. To identify what could be done better in the future, companies can also conduct decision post-mortems to analyse underlying processes.

Don’t miss near misses: Another oft-ignored event is the near miss – a failure that’s disguised as a success, but only because there are generally no dire consequences.

Pursue prevention: Recognising a potential problem requires a different approach than solving an actual problem. One strategy is to harness employees’ collective talents by allowing people to raise concerns about the firm’s operations. Disagree: As Peter Drucker wrote, “The first rule in decision making is that one does not make a decision unless there is disagreement.” To devise healthy strategies, executives need to hear many perspectives.

Disconfirm: Rather than finding clues that corroborate your hunch – all too easy in an information-rich world – start by asking yourself how you could know you were, in fact, wrong.

(Emre Soyer is an assistant professor at Özyegin University, in Istanbul; Robin M. Hogarth is an emeritus professor at Universitat Pompeu Fabra, in Barcelona)

HBR/NYT Syndicate

(This article was published on May 26, 2015)

Trade pact: India tries to ring-fence e-comm

Amiti Sen

Most RCEP members support Japan’s move to bring the sector within ambit of negotiations

New Delhi, June 16:  

India is under pressure to allow e-commerce to be included in the regional comprehensive economic partnership (RCEP) agreement that it is negotiating with the 10-member Asean, Japan, China, South Korea, Australia and New Zealand.

In last week’s negotiating round in Kyoto, most of the participating members, including the Asean countries, Australia and New Zealand, supported Japan’s proposal of bringing the e-commerce sector within the ambit of the negotiations, a government official told BusinessLine.

India was also not able to convince other members to have low ambitions in the area of goods, with most members wanting steep duty cuts on a large number of items.

It is important for India to ensure that not too many items are subjected to sharp duty cuts as the Indian industry is apprehensive of competition from cheap Chinese products.

“Although India managed not to cave in to demands of bringing e-commerce into the ambit of the pact and lowering tariffs on most traded goods, the pressure is only going to grow at the Ministerial meeting of RCEP members in Kuala Lumpur next month,” the official said.

Commerce and Industry Minister Nirmala Sitharaman is likely to attend the meeting, which starts on July 13.

The upside

The RCEP seeks to lower tariffs on goods, liberalise trade in services, ease flow of investments in the region and also put in place standard intellectual property rules.

When the pact is implemented, the RCEP members could become the largest trading bloc in the world.

Earlier this year, Japan floated a paper on liberalising the e-commerce sector as part of the pact. India does not allow FDI in business-to-consumer e-retail, but allows 100 per cent FDI in business-to-business e-commerce.

“There are a number of Asean countries such as Vietnam and Indonesia that do not individually favour FDI in e-commerce, but at the Kyoto meet, the Asean group as a whole supported its inclusion,” the official said. China spoke neither in favour nor against the move.

India argued that it does not have domestic rules for allowing FDI in e-commerce and, therefore, cannot participate in any negotiations that could lead to opening up of the sector.

However, its views did not meet with much sympathy, the official added.

Risky path

New Delhi also fought with other members to keep to a minimum the number of goods on which duties would be reduced substantially.

It is risky for India to agree to a large list of items for duty cuts as the “deviations’’ that the RCEP would allow to shield certain goods coming from select countries against duty cuts may not be an effective tool to protect a large number of items.

I-T Dept stands firm on tax demand against Cairn India

Our Bureau

Anita Kapur, Chairperson, CBDT

20,000 crore related to capital gains made by Cairn Energy₹New Delhi, June 16:  

The Income-Tax Department stood firm on its over 20,000-crore ₹tax demand on Cairn India even as promoter Anil Agarwal’s Vedanta Group has rolled out a merger proposal for the company with Vedanta Ltd.

Anita Kapur, Chairperson of Central Board of Direct Taxes (CBDT), said: “We have a provisional attachment order. We will ensure that our position is secured.”

The department has sent four tax notices to Cairn Energy Plc and Cairn India seeking 20,495 crore. The tax demand to Cairn India₹

is for failing to deduct withholding tax on alleged capital gains made by former promoter Cairn Energy Plc. The matter is now under litigation.

Asked whether the matter was referred to a high-level committee as announced by Finance Minister Arun Jaitley last year, Kapur replied in the negative. The company wanted the matter to be referred to the Committee set up to ensure fair treatment in cases arising out of the retrospective tax amendment.

“Notice was issued almost a year back, while assessment has been completed now,” she told mediapersons.

Cairn Energy Plc holds a 9.82 per cent stake in Cairn India. The tax authorities have barred the company from selling its stake till the dispute is resolved.

To successfully conclude the merger process, Vedanta would like the tax issue to be closed. Meanwhile in a statement, Cairn Energy Plc said that it will assess whether the proposal to merge Cairn India with Vedanta Ltd is in its interest as a shareholder.

MAT challenge

As regards levy of minimum alternate tax (MAT) on foreign institutional investors (FII), Kapur said the Justice AP Shah committee had been set up as part of the government’s efforts to iron out issues otherwise it would be answerable to agencies such as the Central Bureau of Investigation, Central Vigilance Commission and the Comptroller and Auditor General of India.

Kapur said that the government will not raise any MAT demand if the Shah committee sees no merit in it.

The committee was set up in the backdrop of the government claiming to have raised a tax demand of 40,000 crore from FIIs. ₹

Tata Steel UK workers begin industrial action

Vidya Ram London, June 16:  

Employees of Tata Steel’s UK operations began industrial action even as talks between the unions and Tata Steel, mediated by the UK’s conciliation service ACAS, continued.

This action — better known as “action short of strike action” — began at 6 am on Tuesday and means that workers will not do any overtime, or do any work beyond the strict limit of their agreements. It was sanctioned during industrial action ballots held by four unions last month, which also endorsed next week’s one-day strike action.

A spokesperson for Community, one of the four unions involved in the National Trade Union Steel Coordinating Committee, said that the ACAS-led talks had adjourned late on Monday and were continuing on Tuesday, but declined to comment on where negotiations stood.

“We’ve always said we want meaningful discussions and that is what is happening now hopefully.”

(This article was published on June 16, 2015)

Killing me softly

Shruti Ravindran

PTI Need for company: Chimps are social animals. You can’t just put a chimp in a box and expect him to be cool with it

Crowded out: India might be home to a billion people, but the young and the old feel distressed and alone. Photo: Prashant Nakwe

In India we stigmatise loneliness and mental health issues. But science tells us that loneliness — even the commonplace, bedroom-variety kind — affects both health and mortality

One of the starkest images of loneliness I’ve seen occurs towards the end of the British documentary Project Nim (2011), the story of a chimp raised like a child by pot-smoking primatologists in an idyllic farmhouse. After the research funds dry out, Nim is shipped off to a lab, which echoes with the fearful shrieks of caged primates and is injected with experimental vaccines. He’s abruptly ‘rescued’ from this hellhole, only to find himself in another one: a barren cage for abused equines, with a barrel and cardboard box for company.

Within weeks, the animal that once tumbled joyously in the dirt and eagerly gestured for bananas and drags of joints is replaced by a creature with slumped shoulders and a defeated air. He divides his time between two so-called activities: sitting on a tyre suspended from the ceiling and staring into space; and shuffling across the cage, shoving the barrel before him. Twice he is offered a TV set. Both times he hurls it against the wall. “Chimps are social animals,” his former primatologist housemate says. “You can’t just put a chimp in a box and expect him to be cool with it.”

Not long afterwards, I met a number of men who knew just how Nim felt — and could speak about it. They were former convicts who had spent part of their sentence in ‘the Box’— isolation wards in prisons in upstate New York. They spoke of days, months, even years of unrelenting boredom, suffocating loneliness, sleeplessness and anxiety. All of which, they said, eroded their concentration and memory; even their sanity. Such crippling

isolation, psychologists and neuroscientists agree, damages the mind and the brain. But an increasing number of studies also show that the Box does not have to be real to affect us. Loneliness — the commonplace, bedroom-variety kind — can be lethal too.

A 2012 study, ‘Loneliness, health and mortality in old age,’ that tracked 2,000 people over the age of 50 over six years found that the loneliest were nearly twice as likely to die in the course of the study. This translated to a 14 per cent greater risk of dying, compared to their average peers. To put this in perspective: loneliness heightens the risk of early death twice as much as obesity, and about as much as a longstanding smoking habit.

Meanwhile, a 2015 meta-analysis of studies about the increased mortality risk associated with isolation showed that there was scarcely any difference between ‘objective’ and ‘subjective’ loneliness — that is, between living alone and feeling alone in a crowd. Those who lived alone, felt lonely, and those who had few social connections were associated with increased mortality risks of 32 per cent, 29 per cent and 26 per cent respectively.

The authors ended their paper with something of a call-to-arms. “Affluent nations have the highest rates of individuals living alone since census data collection began and also likely have the highest rates in human history, with those rates projected to increase,” they wrote.

None of this seems surprising when you consider the many ways in which loneliness is associated with poor health. The young who suffer from it have worse immunity, worse inflammation, and sleep punctuated by stress-driven ‘micro-awakenings’, while the old suffer higher rates of hypertension and cardiovascular trouble. A quick shuffle through Google Scholar throws up additional corroborating evidence. A 2002 study of 240 middle-aged civil servants conducted by epidemiologists at University College

London found that lonelier people had increases in blood proteins and white blood cells, which accentuated their risk for narrowed arteries, strokes, and hypertension.

A 2012 study conducted by biochemists and gerontologists in Dublin measured both loneliness and blood glucose levels among 466 elderly. The loneliest had the highest blood sugar levels, and a propensity to obesity and Type-2 diabetes. Among the elderly, loneliness prefigures — even accentuates — cognitive decline. A 2007 study of 823 elderly people by neurologists at Rush University found that the loneliest among the group experienced double the risk of contracting Alzheimer’s disease.

Loneliness as a stressor

Loneliness’ lethal grip extends far beyond people and primates; as far back down the evolutionary ladder as mice, pigs, birds, rabbits, and fruit flies. Since we’ve all evolved to function within social groups, our system recognises the lack of company as a threat to our survival. And the prolonged lack of company, or even the impression that one’s social interactions are meaningless and vapid, can act as a damaging stressor.

While a short burst of stress makes us wake up in the morning, or jolts us alert when we face sudden threats, the prolonged experience of stress — which isolation or feelings of loneliness bring on — releases an unchecked dose of stress-propelled enzymes into the system. When this seeping continues unabated, it plays havoc with our neuroendocrine, immune and autonomic systems, which regulate bodily functions ranging from heart rate and respiration to digestion.

Recent studies by neuroscientists suggest that loneliness even causes us physical agony. One paper notes, “Because of the

adaptive value of mammalian social bonds, the social attachment system… may have piggybacked onto the physical pain system to promote survival.” We behave in the presence of loneliness as we would when we sense a predator: by retreating into self-preservation mode, and evading company.

Head in sand

The few studies on loneliness in India only chronicle the extreme social rejection faced by the elderly. This is a pressing concern: by 2030, 198 million people will be aged over 60, according to statistics from the health ministry. But how many of our world-record-breaking contingent of 150 million young feel distressed and alone? We don’t know, and we’re not likely to hear about it, because of our self-image as a society teeming with ‘close-knit’ families, and because of how much we stigmatise loneliness and mental health issues.

In recent months, several close friends and relatives — married, single, young and middle-aged — have told me they suffer from pangs of loneliness and low esteem. They confessed that they’d gotten into the habit of avoiding people, and that the few social interactions they forced themselves into felt dissatisfying and hollow. Online interactions, which might have helped alleviate their loneliness, had the counterproductive effect of making them feel self-conscious and ashamed. Needing to hide from company felt especially anomalous when most of their peers’ lives on social media arenas seemed to teem with joyous group selfies, hyper-coloured dinner parties, and 500-person-strong friend-lists. They began to blame themselves — perhaps they were too boring, too negative, too socially inept? When I suggested that one of them seek a psychologist’s help, she snapped: “Oh, there’s nothing wrong with me.”

Whatever went wrong with Nim, he did eventually get better. His primatologist friend made sure to visit him often, and Nim was soon gesturing for sips of soda pop, and gambolling from one side of his cage to the other. Then, he acquired roommates: two gentle chimps named Mitch and Lou Lou, both refugees from the now-shuttered primate lab. Nim’s last few years were spent being groomed, playing and communicating with his old primatologist friend, and rolling around a beach ball with his new friends. He reminds us that the old Sartrean line need not always hold true. Good health is other people too.

Shruti Ravindran is a freelance journalist who covers science, environment, health and social justice