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TUESDAY, 13 NOVEMBER 2018
24 pages in 1 section www.business-standard.com
MUMBAI (CITY)
~7.00
VOLUME XXIII NUMBER 64

THE MARKETS ON MONDAY

Sensex 34,813.0 -345.6
Nifty 10,482.2 -103.0
Nifty Futures* 10,503.8 21.6 WORLD P14 COMPANIES P2

SOFTBANK EYES $21 BN IN ONE CAR SALES GROWTH SET TO

Dollar ~72.9 ~72.5**
Euro ~82.1 ~82.3**
Brent crude ($/bbl)## 70.1## 68.7**
Gold (10 gm)### ~31,195.0
*(Nov.) Premium on Nifty Spot; **Previous close;
# Over previous close; ## At 9 pm IST;
~-86.0
OF WORLD’S BIGGEST IPOs HIT A 4-YR LOW IN FY19
### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BANGALORE, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI, NEW DELHI AND PUNE

RBI governor
THE CMIE TRACKER RAFALE DEAL ROW
Consumer Sentiment Index
(Base: September - December 2015 = 100) Govt submission to SC hints at
meets PM amid shortcuts in decision-making

ongoing tussle
AJAI SHUKLA
New Delhi, 12 November PROCUREMENT
The government on Monday submitted LANDMARKS
Unemployment rate (%) to the Supreme Court (SC) details about
the process by which it arrived at the Jun 2001 :
decision to buy 36 Rafale fighter aircraft In-principle approval
for purchase of 126
TalkscomeaheadofthemeetingoftheRBI’s from France while cancelling a tender
for 126 Rafales, of which 108 were to be MMRCA fighters
centralboardonNovember19 built in India. Jun 2006: SQRs (user Jul 2009-
While the part on price details was sub- requirements) finalised May 2010: Field
mitted to the apex court in a sealed cover, by IAF evaluation trials
Business Standard has
Source: CMIE
Opinion reviewedacopyofthesub- Jun 2007: DAC accords Apr 2011: IAF shortlists
HALF THE TOP LISTED COMPANIES EMPLOY PAGE 11 mission on the procure- acceptance to the Dassault, Eurofighter
LESS THAN 7% WOMEN 10 > ment process, which came purchase Jun 2011: Technical Feb 2012: Contract
EDIT: MORE
QUESTIONS ON in response to an SC order Aug 2007: RFP (bids) for Oversight Committee negotiations
RAFALE of November 1 and was MMRCA issued report accepted commenced
UNION MINISTER shared with the petition-
ers — Yashwant Sinha, Apr 2008: Bids received Nov 2011: Commercial Apr 2015: Modi,
ANANTH KUMAR DEAD Arun Shourie and Prashant Bhushan — in
accordance with the court’s directions.
from six vendors bids opened Hollande announce 36
Rafale purchase
It was a ‘routine meeting’ between Prime Minister Narendra Modi (left) and While claiming that “all the requisite
Jun 2009: Technical Jan 2012: Dassault
RBI Governor Urjit Patel, sources said steps… have been followed”, the 16-page
evaluation of bids designated lowest Jun 2015: RFP for 126
approved bidder fighters withdrawn
submission makes it clear the govern-
ABHIJIT LELE
Mumbai, 12 November
RBI suggests ment did not take the most basic steps
that are fundamental to any procure- The government failed to involve the the next step taken, which is the formu-
privatising PSBs ment and which are spelt out in detail in Indian Air Force (IAF) in formulating lation of a statement of case (SoC),

R
eserve Bank of India Governor
Urjit Patel met Prime Minister
Narendra Modi on Friday to
iron out issues on which the
Senior Bharatiya Janata Party (BJP) leader government and the central bank are not
seeing eye to eye.
The Reserve Bank of India’s (RBI’s)
central board saw a heated
exchange between the
representatives of the government
the Defence Procurement Policy of 2013 “service qualitative requirements” in which the military must justify the
(DPP-2013), which governed the 36- (SQRs), which specify the capabilities of procurement.
Rafale purchase. the equipment being procured. Nor was Turn to Page 6 >

and Union Parliamentary Affairs Minister
Ananth Kumar died at a private hospital on Sources said Patel was in New Delhi
Monday, a party spokesman said. He was on Friday, when he met Modi and sen-
suffering from cancer and had come back ior officials in the Prime Minister's
from the US in October after treatment there. Office (PMO).
Some of the government’s demands
Kumar, 59, is survived by his wife and two
daughters. He was a BJP MP from south the Reserve Bank of India (RBI) may
accede to include relaxing prompt cor-
Bengaluru. Prime Minister Narendra Modi
condoled his demise. 24 > rective action (PCA) norms for some
banks and a special dispensation for
micro, small and medium enterprises.
ECONOMY P4 Top officials of the PMO didn’t
IIP growth slows; respond to text messages from Business
Standard. However, sources in Mumbai
retail inflation eases termed it a “routine meeting” and said
Growth in industrial output slowed to 4.5 some of the issues that had been the flash
per cent in September against 4.7 per cent point between the central bank and the
in the same month last year as the festival government were discussed.
season started late this year compared to “The emphasis is on working on solu-
2017. Meanwhile, retail inflation fell to a tions though there may be some differ-
one-year low of 3.3 per cent in October on ences,” the source said.
the back of cheaper kitchen staples, fruits Thesetalkscomeaheadoftheupcom-
and protein-rich items, official data ing meeting of the central board of the
showed. RBI on November 19, when the RBI and
the government are supposed to hold for-
and the central bank over the capital
needs of public sector lenders in its
last meeting on October 23, where
Deputy Governor Viral Acharya
suggested that privatisation of these
banks be considered. The
government nominees on the board
told the RBI that it might not be able
to give money to PSBs for
capitalisation beyond a point as it
would affect the fiscal deficit target.
SOMESH JHA reports 20 >
mal talks on matters highlighted by the
finance ministry.
It is not clear if an agreement has
been worked out to ease liquidity for
non-banking finance companies
(NBFCs) and the RBI parting with its sub-
stantial part of its surplus. The RBI is not
convinced about a liquidity crunch in
the NBFC sector whereas the govern-
ment has pressed the need to maintain
the cash flow in the sector. Turn to Page 6 >
Jetplansnetworkrejigafter~12-bnloss
ANEESH PHADNIS
Mumbai, 12 November
Jet Airways is over-
hauling its network
after posting a net
loss of ~12.61 billion in
the third quarter of
2018-19. In
September quarter of
the
2017-18, it had reported a
net profit of ~0.71 billion.
Total revenue rose 6.9 per
cent to ~63.63 billion on a year-
on-year basis, with the gains
coming from international
routes and passenger feed
from partner airlines. The air-
line booked "expected refund
of variable rentals" worth ~1.11
billion in revenue, which
REPORT CARD
(in ~billion)
Source: Company
helped boost numbers.
After the weak results, the
airline on Monday said it was
conducting a comprehensive
review of its network, product
and services. It was engaging
with its "financial stakehold-
ers" as high fuel prices and low
Revenue
Expenses The management said a 50
per cent rise in fuel prices, a
76.97
depreciating rupee, and a chal-
61.44 60.73 64.30 lenging pricing environment
undermined its performance.
Total expenses rose 26.7 per
cent to ~76.97 billion. This was
the airline's third successive
Q2 FY 18 Q2 FY 19
Net profit/loss (~bn)
~10 billion-plus loss, thus mak-
ing fund infusion critical for
0.71 -12.61 the carrier.
IndiGo, its rival, posted its
first loss of ~6.52 billion in the
fares hurt its operations, the September quarter since its
firm added. listing, suggesting that even
Sources said the airline the market leader was not
would withdraw flights immune to tough conditions.
between south India and West Bloomberg had estimated that
Asia. It will add international Jet might post a net loss of
frequencies from Mumbai and ~11.41 billion.
New Delhi, they added. Turn to Page 6 >

ECONOMY P4
Meeting climate change
targets a task cut out SIVAKASI FIREWORKS 50 DAYS OF AYUSHMAN
Economic and technical
factors count in setting
domestic targets. The
UNITS ON INDEFINITE BHARAT: CLAIMS WORTH
performance of other
countries counts
CLOSURE OVER SC ORDER ~3 BILLION APPROVED
in committing Nearly 1,400 fireworks units Almost 50 days into the
CLIMATE internationally. in Sivakasi, mostly micro- Ayushman Bharat scheme,
CHANGE-2 NITIN SETHI writes small- and medium- 200,000 people have availed
enterprises, have decided to of its benefits across the
go on an indefinite closure country. Nearly 500,000
Dollar jumps on Europe from Monday, demanding cards have been distributed
the lifting of the restrictions across India for the scheme.
risks, Fed bets imposed by the Supreme In order to ensure that
ThedollarsurgedonMondaytoitshighest Court in October on bursting beneficiaries know about the
pointin16monthsagainstabasketofcurre- crackers and the ban on the scheme, letters are also being
nciesandworldstocksfellamidconcern use of certain chemicals. The Tamil Nadu Fireworks and sent to them in local languages. All those included in the
aboutpoliticalrisksinEurope,whileadrop Amorces Units Owners Association, a body of cracker socio-economic caste census data are eligible for
inApplesharesaddedpressuretoUSequi- manufacturers, claimed there was a 60 per cent fall in treatment under this scheme. Claims worth ~17 billion
ties.MajorUSstockindicesfellover1percent the sale of firecrackers due to the order. Sivakasi is have been received across the country. Of this, claims
ininitialtrading.InEurope,fearsaboutano- located about 550 km from Chennai and produces worth ~3 billion have been approved by various
dealBrexitandariftoverItaly'sbudgetput nearly 95 per cent of the country's crackers. governments, say official sources.
pressureontheeuroandthepound. REUTERS T E NARASIMHAN reports 24 > VEENA MANI writes 24 >

Dorsey tweets ‘governance’ to all parties

KARAN CHOUDHURY & ARCHIS MOHAN
New Delhi, 12 November
In the general elections next year,
Twitter is likely to be the biggest
campaign manager for political
parties — or at least that’s what its
Chief Executive Officer Jack Dorsey
would like.
During his maiden visit to India,
the 41-year-old, nose ring-sporting
Dorsey wants “to experience
everything”, according to a tweet he
posted on November 10. He might do
a few touristy things — going to
Jaipur, or getting his ring pulled by
the Dalai Lama — but his six-day trip
has other things on the itinerary.
He wants to reach out to all
political parties and meet
government officials — at the Centre
and in states — as well as senior police
officer and civic body officials, so that
he can assist in delivering governance
through Twitter. This will also help
the social-media giant chalk out its
next stage of expansion.
Sources in Twitter said Dorsey
Twitter Chief Executive Officer and co-founder Jack Dorsey with IIT-Delhi
students in New Delhi on Monday
would meet senior officials from the
Prime Minister’s Office as well as
senior Bharatiya Janata Party leaders.
“Though it is not final yet, there might
be a meeting with the prime minister
as well,” said a source in Dorsey’s
India visit team.
Dorsey will be offering all the tools
PHOTO: PTI
ON FAKE NEWS
“THIS ISAMULTI-VARIABLE PROBLEM
ANDTHERE IS NOT GOINGTO BE ONE
FIX. NO ONE CAN BUILDAPERFECT
LOCKTHAT NO ONE CAN BREAK”
Jack Dorsey, Twitter CEO
Twitter used in the 2016 US
presidential elections to social media
team of political parties in India.
Sources in the company said it was
planning to hire many social media
experts to assist political parties in
their online outreach. Workshops
might be conducted for student
wings of these parties.
Its BlueRoom initiative might
feature interviews with leaders of
political parties and student unions,
as well as political commentators.
Twitter could also provide
electoral badges — used widely in the
2016 US elections — to candidates.
“Twitter plans to design and bring out
a series of new labels that will appear
on the profiles and tweets of
candidates. This branding exercise
which will help create a unique
profile of a candidate,” said a source
close to the company.
The company is also talking to
major political parties to create
more verified accounts of various
candidates.
Turn to Page 6 >
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2 COMPANIES MUMBAI | TUESDAY, 13 NOVEMBER 2018

STOCKS > Tata Motors

Jaguar Land Rover
> Titan Company
Q2 jewellery division
> Avanti Feeds
Q2 net profit down 57%
> Dalmia Bharat Sugar and Industries
Top gainer among
> VST Tillers Tractors
Q2 net profit declined
IN THE NEWS retail sales down revenue growth at ~551 million; YoY sugar stocks 51% at ~92 million; YoY
4.6% in October; YoY 29%; YoY
~195.40 PREVIOUS CLOSE ~848.00 PREVIOUS CLOSE ~422.65 PREVIOUS CLOSE ~96.80 PREVIOUS CLOSE ~1,781.60 PREVIOUS CLOSE
~185.95 CLOSE ~892.80 CLOSE ~375.10 CLOSE ~110.95 CLOSE ~1,614.00 CLOSE
* OVER PREVIOUS CLOSE 4.84% DOWN* 5.28% UP* 11.25% DOWN* 14.62% UP* 9.40% DOWN*
> .

Carsalesgrowthsettoskidto4-yrlowtobelow6%inFY19
GROWTH 7.9% IN FY18 AND 9.2% IN FY17
AJAY MODI
New Delhi, 12 November
The pace of car sales growth in India, the
world’s fifth largest market, is set to hit a
four-year low of below 6 per cent in finan-
cial year 2018-19 as multiple factors came
as speed breakers, slowing down
demand. Leading industry researchers,
including IHS Markit and JATO
Dynamics, have lowered sales forecast
for the country’s market after a lacklustre
festive season.
The industry had grown 7.9 per cent in
FY18and9.2percentinFY17.Atotalof3.28
million passenger vehicles were sold in
the domestic market last year. Based on
the data compiled by the industry’s apex
body Society of Indian Automobile Manu-
facturers (Siam), the domestic passenger
vehicle market (cars, vans and utility vehi-
cles) expanded by 6.1 per cent during the
April-October period of FY19. The indus-
try’s growth, measured by dispatches to
dealerships, was almost 20 per cent in the
April-June quarter of the ongoing fiscal on
a low base of the previous year when the
transition to goods and services tax (GST)
impacted dispatches. However, industry
volumes declined in each of the three
months of the second quarter, bringing
the rate of growth down to 6.8 per cent for
the first half (April-September). The trend
reversed in October but growth remained
muted with rise of just 1.5 per cent year on
year, making the festive season one of the
dullest for car makers. The cumulative
growth till October softenedto6.1percent.
Ravi Bhatia, president (India), JATO,
said the FY19 growth rate will slip below 6
per cent to at least 5.8 per cent. He said
dealers will be cautious of stocking cars
after a sluggish festive season and in the
run up to the calendar year change. Any
unsold car manufactured in a particular
calendar year is sold at a high discount.
“The lending environment will be under
pressure as NBFCs have been hit. The high
cost of insurance remains a challenge and
overall sentiment boosters are missing,”
he said. JATO, which usually follows the
industry’s performance on a calendar year
basis, has cut its 2018 volume forecast by
53,000 units or 1.6 per cent. “Optimism is
getting mixed with caution after a series of
events, such as the Kerala floods, disap-
pointing festive sales and poor health of
the lending sector,” said Bhatia. JATO has
also cut forecast for the 2019 calendar year
by almost three per cent or 93,000 units.
JATO’s forecast cut comes after RC
Bhargava, chairman of country’s top car
maker Maruti Suzuki, said last month
that it is not going to be an easy task to
achieve the firm’s double-digit volume
growth forecast for FY19. “We do not know
what will happen in the second half of
the year. The company will make its best
efforts to achieve a growth of 10 per cent,”
said Bhargava.
Vishnu Mathur, director general at
SIAM, said purchase decisions were get-
ting postponed. “I cannot say if this loss in
sales can be recovered during the remain-
ing part of the year. If the situation does
not change and no corrective action is
taken by the government to improve over-
all sentiment in the market, then the fore-
cast made at the beginning of the year
will not be achieved,” he added. The
IN THE SLOW LANE
Passenger vehicle sales in
Tata Motors group global
domestic market (in million) sales rise 5.6%
Per cent growth YoY TataMotorsonMondayreporteda5.62percent
2.78 increaseinitsgroupglobalwholesales,including
2.60 3.28
3.04 JaguarLandRover,at109,597unitsinOctober2018.
2.02 TataMotors'groupglobalwholesalesinOctoberlast
yearwereat103,761units.Globalwholesalesofall
passengervehiclesinOctober2018wereat65,217
units,lowerby2percent,ascomparedto66,361
unitsinthesamemonthlastyear,TataMotorssaid.
JaguarLandRoversaleswereat46,766units.While
Jaguarwholesalesforthemonthwere13,373vehi-
3.90 7.24 9.23 7.89 6.10# cles,thatofLandRoverwereat33,393units. PTI
FY15 FY16 FY17 FY18 FY19*
*April-October; #Expected to slip well below
6 per cent for the entire FY Source: Siam
Eicher Sept quarter net
industry body had projected a growth of
9 to 11 per cent for FY19. up 6% to ~5.4 billion
IHS had forecast the 2018 calendar RoyalEnfieldmotorcyclemakerEicherMotorshas
year growth at 11 per cent at the beginning reportedsixpercentgrowthinprofitforthequarter
of the year but made two revisions by a endedSeptember30.Thecompanyhasposteda
per cent each — in June and in October — consolidatedprofitof~5.48billionduringthe
to 9 per cent. Gaurav Vangaal, a senior quarteragainst~5.18billioninthecorresponding
analyst (automotive forecasting) at IHS, quarterlastyear.Eicher'ssalesrevenuerose11per
said next year’s growth could be even low- centto~23.95billion.Thecompanyhadan
er due to firm interest rates and price exceptionalexpenditureof~175.2millionduringthe
increases owing to introduction of safety quartertowardsclosureofoperationsofajoint
norms in older car models. venturecompanyEicherPolaris. BS REPORTER

IN BRIEF
DGCA suspends flying licence of SC to hear power firms’ Brandendorsementsafar
cryforwomencricketers
AI operations director for 3 yrs
AviationregulatorDirectorateGeneralof
CivilAviation(DGCA)hassuspendedtheflyi-
nglicenceofAirIndiaDirectorofOperations
ArvindKathpaliawhofailedanalcoholtest
plea against RBI today
DEV CHATTERJEE
URVI MALVANIA
Mumbai, 12 November

Over the past 10-12 months, Indian

women cricketers have been in the
onSunday,aseniorofficialsaid.OnSunday, Mumbai, 12 November news for all the right sports reasons.
AirIndiagroundedKathpaliaafterhefailed Mithali Raj became the first female

T
toclearpre-flightalcoholtest.InthecaseofKathpaliabeing he Supreme Court (SC) will to score 6,500 in one-day interna-
detected‘BApositive’onNovember11,theprivilegesofhislicence hear a slew of petitions filed tionals. More recently, there was
havebeensuspendedforaperiodofthreeyearsaspertheprovi- by the power sector industry Harmanpreet Kaur’s exploits against
sionsofapplicableregulations,theofficialsaid.Thesuspensionis association and other companies New Zealand in the ongoing Wom-
effectivefromNovember11.Rule24oftheAircraftRulesprohibits against a Reserve Bank of India’s en’s World T20 in the West Indies.
crewmembersfrompartakinganyalcoholicdrink12hourspriorto (RBI’s) directive issued on February This is an indication that women have
thecommencementofaflight,anditismandatoryforhim/herto 12 on Tuesday. The directive had made their presence felt on the field.
undergoanalcoholtestbothbeforeandafteroperatingaflight. asked banks to file bankruptcy pro- However, they are conspicuously
TheprescribedpunishmentforsuchoffencesundertheDGCArules ceedings against all defaulting loan missing from brand endorsements.
issuspensionofflyinglicenceforthreemonthsincaseoffirstbre- accounts above ~20 billion if a reso- Unlike male counterparts or sports-
ach.Forviolatingthenormsforasecondtime,thelicenceissus- lution plan was not agreed upon in women in other sports, female crick- This is the first standalone Women’s
pendedforthreeyearsandforathirdtime,thelicenceisperman- 180 days. eters in India have not been able to World T20 and is being telecast on
entlycancelled.Earlier,chiefofoperationsKathpalia’sflying The directive has hit close to 80- break into this scene. While star play- Star Sports, as well as being
licencewassuspendedin2017forthreemonthsbytheDGCAfor 100 companies from varied sectors, ers have brands like Hero and Bata as live-streamed on Hotstar
allegedlyskippingthebreathanalysertestbeforeaflight. PTI< including power and telecom and bat or kit sponsors, one does not see
allied industries, and will send an THE TUG OF WAR a Raj or Jhulan Goswami smiling women cricketers losing the endorse-
additional ~3.6 trillion worth of debt down from TV screens or billboards, ment game, there are other factors as
Power producers’ stand RBI’s stand
Lupin gets EIR from Britannia’s Q2 net to the bankruptcy courts.
The RBI, in its earlier filings before There’s preferential state govts which are Can’t make
coaxing onlookers to buy a product or
service. Why? “The biggest issue here
well.Thesheerdominanceofthemale
cricket team from India is one. “Indian
USFDA for its up 16% on brand the Allahabad High Court, had said treatment for govt mandatory for coal separate rules is the media exposure that women’s (male) cricketers are undeniably am-
Nagpur facility investments power companies have been chronic power companies; linkages for power sector cricket has. Only recently have the ong the most popular celebrities in
defaulters and suppressing facts. It discrimination matches started being telecast; over- the country, along with film stars.
Payment delays by Power sector has
LupinonMondaysaidithad BritanniaIndustriesonMonday said the regulator cannot make an against private all coverage in the press has incr- When brands look to associate with
electricity distribution chronic
receivedanestablishment postedaconsolidatednetprofit exception for the industry. companies eased. As media exposure increases, the game, they automatically look at
inspectionreport(EIR)fromthe of16percentforthequarteren- According to the RBI, banks have
companies defaulters audiences and brands will take noti- the men, since they are more visible
UShealthregulatorpostthe dedSeptemberat~3billionas an exposure of ~2.2 trillion in the Lack of fuel like coal RBI not taken Firms are ce,” says Ramakrishnan R, co-fou- and popular,” says a brand expert.
inspectionofitsNagpurfacility. againstthecorrespondingqua- power sector, with 35 companies and gas industry woes into suppressing nder and director, Baseline Ventures, When brands look at cricket as a
“TheUnitedStatesFoodand rterayearago,primarilyon defaulting on bank loans. No PPAs signed by accounts facts a sports marketing and talent man- mode of association, he explains,
DrugAdministration(USFDA) brandinvestmentsanddistri- Several India Inc leaders said the agement entity that handles PV male cricketers are an obvious choice.
conductedapreapprovalins- butionnetwork.Thefirmpost- RBI circular will not only affect the Sindhu and Kidambi Srikanth, am- The lack of visibility of female crick-
pectionforitsPhenytoin edconsolidateditsrevenueof13 power sector, but others too, as banks sive job losses. Several more are The combined haircut that banks will ong other players. eters is a stumbling block. Hence,
SodiumExtendedRelease100 percentfortheperiodat~28.5 had stopped clearing debt restruc- expected with this directive,” he said. take on these companies is around This is the first standalone brands tend to shift to other women
mgcapsules,”Lupinsaidina billion.“Thiswasthefourth turing proposals after the February 12 Lenders, on the other hand, are 56 per cent. Women’s World T20 is being telecast athletes. In, for instance, tennis or
filingtotheBSE.Theplantwas successivequarterofdouble- circular. “The RBI circular had said keenly awaiting the SC’s order on the “If one looks at these 12 large on Star Sports Network India, as well badminton. These games have got
inspectedbyUSFDAinSeptem- digitvolumegrowthduetoour no debt recast will be cleared even if RBI’s directive. Any order supporting defaulting accounts, only four cases as being live-streamed on Star India’s better exposure in terms of telecast
ber2018,thefirmadded.USFDA investmentinbrands,multi- one bank has voted against the pro- the central bank’s stand will send more have been resolved so far, while the OTT platform, Hotstar. Broadcasters over recent years and, hence, names
givesEIRonclosureofinspect- mediacampaigntobringalive posal, irrespective of its voting share,” companies to the NCLT and they will other cases still remain unresolved and cricket boards are now making such as Saina Nehwal, P V Sindhu
ionofanestablishmentthatis thenewidentityandcelebra- said the chief executive officer (CEO) have to make provisions for it. The ear- even after more than 450 days lapsed conscious effort on providing media and Sania Mirza are better known.
thesubjectofanFDAorFDA- ting100yearsandwideningour of a telecom firm. lier deadline of August 27 has already since being admitted by the NCLT. exposure to women’s cricket. Ramakrishnan observes: “Some
contractedinspection. PTI< distributionnetworkthrough “After this, though banks had been breached. Thanks to a SC status According to our analysis, the lenders For instance, during India’s com- sports are gender-neutral, like ten-
focusondirectreach,rural signed an inter-creditor agreement quo order, lenders have still not taken for these initial 12 companies are esti- ing tour of New Zealand, the three nis, badminton or volleyball. Others
marketandweakstates,”said but didn’t issue operating guidelines, write-offs on these loans. mated to have lost out on ~40 billion T20s will be double features, mean- like cricket and football tend to be
Cipla gets USFDA VarunBerry,managingdirector, we are back to square one,” said the The RBI started its bank bad debt in additional income due to delays ing the women’s tie will precede the skewed towards males. That factor is
nod for anti-viral BritanniaIndustries. PTI< CEO of a large company. “Over 1,000 clean-up in June 2017, when it sent in the resolution process beyond the men’s games. Both will be telecast always going to be there. But, as more
companies have already been the first batch of 12 large companies 270-day period,” said Abhishek on Star Sports. people know about the women’s
eye infection drug referred to the National Company to the NCLT for debt resolution under Dafria, vice-president & co-head, cor- While the lack of media exposure is game and achievements, they will
DrugmajorCiplaonMonday Law Tribunal (NCLT), leading to mas- the Insolvency and Bankruptcy Code. porate ratings, Icra. one of the main reasons for Indian get noticed by brands as well.”
saidithadreceivedfinalapp-
Airtel MD Gopal
rovalfromtheUShealthregul- Vittal elected to
atorforValganciclovirtablets, GSMA board
usedinthetreatmentofviral
eyeinfectioninAIDSpatients.
Valganciclovirtablets,areused
inthetreatmentcytomega-
BhartiAirtelManagingDirector
andCEOGopalVittalhasbeen
electedtotheboardofglobal
‘What show we should go with is about instinct’
lovirusinfection(viraleye industrybodyGSMAfor2019- From a DVD rental firm in the 1990s to the world’s biggest studio and subscription-driven streaming the shows you watch. But, it scared people
infection)inAIDSpatientsand 2020,thefirmsaidonMonday. service, Netflix has come a long way. It is now spread over 190 countries and has 137 million subscribers, who thought Netflix was getting greedy. So,
inpreventionofcytomegal- “GopalVittal,MD&CEO(India more than half of which are outside America. In the past five years, since it started commissioning content, we are definitely not doing ads.
ovirus diseaseafterorgan andSouthAsia),Airtelhasbeen it has changed the way people consume entertainment and what they consume. The $11.7-billion entity,
transplant.Theapprovedpro- electedtotheboardofGSMAfor along with other streaming services, has also forced several realignments in the world of entertainment — You commission from all over — Brazil, India,
ductsisagenerictherapeutic the2019-2020term,”Bharti like Disney’s buyout of Fox. This year, it will spend $8 billion on content globally, including from India — Germany — and then release this content in
equivalentversionofRoche’s Airtelsaid.Vittalwilljoin25oth- the country from where it commissions more than any other international market. The co-founder, 190 countries. Do some markets take to it
Valcyte.Ciplahasreceivedapp- erleadersfromacrosstheworld chairman and chief executive officer of Netflix, REED HASTINGS, who is also on the board of Facebook, more than others?
rovalfortheproductinthestre- toprovidestrategicguidance spoke to Vanita Kohli-Khandekar at a Netflix event in Singapore. Edited excerpts: Small markets such as Singapore or The Neth-
ngthof450mgfromtheUnited androadmaptotheorganis- erlands are used to importing. So, they take to
StatesFoodandDrugAdmin- ation,whichrepresentsmore HowmuchofNetflix’ssuccessisabout the market, and then found great Western it more. Bigger markets such as India or Brazil
istration,thefirmsaid. PTI< than750operatorsfromacross technologyandhowmuchiscontent? content for it. (Brazil is now one of Netflix’s which have strong local content take time.
theworld,itsaid.AirtelChair- They are two sides of an arch that pressure and fastest growing markets, with one estimate
manSunilBhartiMittalisserv- support each other. Technology without con- putting its share of revenues at roughly a What takes up most of your time? How do you
Aurobindo ingasthechairpersonofthe tent is YouTube. Think of Apple – it combined fourth of the pay TV market). keep too much process orientation
Pharma’s Q2 GSMAboardandhistenurewill fashion with technology, it is like jewellery. from overtaking a rapidly scaling-up
cometoanendthisyear. PTI< But, the jewellery guys can’t catch them with Howdoyouensuredatadoesn’toverpowerthe creative business?
net down 21.7% technology. And, technology firms can’t catch creativepartofthebusiness? I spend a lot of time talking to people inter-
AurobindoPharmaonMonday them with fashion. For us, it is the com- When you pick stocks, you use data. nally, to keep things going — not on strategy
saiditsconsolidatednetprofit JK Paper bination of technology and content. We But, when you choose a spouse, it is but execution. Things are moving so fast that
afteritsJointVentureshareand second quarter are better at tech than Disney and bet- about instinct and intuition. Similarly, for the next five to 10 years, execution will be
minorityinterestforthequarter ter at content than Amazon. what show we should go with is about the big issue — logistics, customer support,
endedSeptember30wasdown net up 93% instinct; the payment systems and oth- As Netflix scales up, how different is it really there are hundreds of things involved in run-
by21.7percentto~6.11billion JKPaperhasposted93percent Whatdoesyourdashboardlooklike,what er things are about data. The whole world from any media firm — you aggregate ning a company. After that (5-10 years),
against~7.81billioninthe jumpinitsnetprofitforthese- metricsdoyoufollowandhowdotheyimpact thinks AI (Artificial Intelligence) driving our audiences and make pay or ad revenues? something else will replace TV and film
secondquarterofthelastfiscal condquarterendedSeptember yourthinking? choices. It isn’t. We read scripts, then think of Classically media firms have a very editorial which will probably start looking like novels
year. Areleasesaidthefirm 30,onfirmpaperpricesand Membership by country, viewing hours, casting and analyse the show afterwards. The point of view. We don’t. We are a customer-sat- or the opera does now (smiles). We have done
clocked~47.51billionrevenues lowinterestcost. Thefirmpos- retention, sign-ups, growth, household pene- creative part is totally instinctive. The stuff isfaction company and will always remain so. a great job so far of optimising for flexibility,
fromoperations,up7.1percent tedaprofitof~1.09billionfor tration. If there is any problem in a country, where data is used is costing – can we produce creativity and for process.
whencomparedto~44.35bill- thequarterwhilenetrevenue those are the things we look at. Seven years it for half the cost? So, 75 per cent of the TherewassometalkoftestingadsonNetflix.
ionduringthesamequarter rose17percentto~7.85billion. ago, we were very low in Brazil as compared to process is intuitive; the rest of it is about com- We are not doing ads. We were just testing (The reporter travelled to Singapore at Netflix’s
inFY18. PTI< BS REPORTER< the US and Mexico. So, we spent more time on parative shows, data, et al. with previews of new shows in the middle of invitation and expense)
https://t.me/pdf4exams
.
MUMBAI | TUESDAY, 13 NOVEMBER 2018
MAKE IN ODISHA
~1.3-trn investment pledge on Day 1
RIL,Birla,Vedanta,andJindalkeentoinvest;TataSteelrampsupcapacityatKalinganagarplantfrom3to8mt
DILLIP SATAPATHY, NIRMALYA BEHERA & JAYAJIT DASH
Bhubaneswar, 12 November
T
he first day of the ‘Make in Odisha’
investment conclave, a four-day affair,
saw business leaders such as Mukesh
Ambani, Kumar Mangalam Birla, Anil
Agarwal, and Naveen Jindal, among others
pledging investments worth ~1.3 trillion.
Other corporate names who were on the
dais with Chief Minister Naveen Patnaik at
the glittering inaugural plenary included Tata
Sons Chairman N Chandrasekaran, JSW Chief
Sajjan Jindal, State Bank of India Chairman
Rajnish Kumar, Steel Authority of India (SAIL)
Chairman Anil Kumar Chaudhary, ITC
Managing Director Sanjiv Puri, National
Aluminium Chairman Tapan Chand, and
Adani Ports & Special Economic Zone Chief
Executive Karan Adani.
Anil Agarwal said Vedanta, which has
already invested ~500 billion in the state on
alumina, aluminium and power entities,
would put in another ~150 billion in the next
three years for expansion, mostly in alumina
refining. It plans to expand its alumina refin-
ery at Lanjigarh from an annual capacity of a
million tonnes (mt) to 6 million tonnes, in
phases, despite constraints over raw materi-
al (bauxite) supply.
At the inaugural event, it was announced
that the capacity expansion in the first phase
would be to the tune of 4 mt.
Agarwal said he also hoped the issues sur-
rounding his jinxed Vedanta University proj-
ect would be resolved soon.
After land acquisition for it was struck
down by the high court, the company has
gone to the Supreme Court.
He said the company has already spent
~5 billion on the project, and would spend
another ~70 billion. The university is touted to
accommodate 100,000 students at a time,
across courses of study.
https://www.estore33.com/ https://t.me/TheHindu_Zone_official
COMPANIES 3 <
AT A GLANCE
Investments
in ~billion
JSPL
550
SAIL
410
Vedanta
150
Aditya Birla
140
Dalmia Bharat Group
25
ITC
5.5
Adani Group
5
Source: Companies
Reliance Chairperson Mukesh Ambani (left) with Aditya Birla group Chairman Kumar Mangalam Birla on the first day of Make in Odisha Conclave
2018, in Bhubaneswar on Monday; (right) Odisha Chief Minister Naveen Patnaik with Tata Sons Chairperson N Chandrasekaran PHOTOS: PTI
Aditya Birla Group pledged investment businesses. “Reliance has already invested over two years. SAIL has already invested ~140
worth ~140 billion over the next two years. ~60 billion in Odisha,” noted Ambani, mostly in billion to scale up capacity, from 2 mt to 4.5
“These would be spread across businesses. creating the Jio (telecom) network. mt. Another conglomerate, Adani Group
The chief minister’s leadership continues to Tata Steel’s inaugural ceremony to ramp- signed a deal with the state government to
be a huge draw for us,” said Kumar Mangalam up its capacity in Kalinganagar (Jajpur dis- set up an airstrip near Dhamra, at an esti-
Birla, chairman of the Aditya Birla Group. trict) plant from 3 to 8 mt annually was also mated cost of ~5 billion. Proposed on 500
His group, with interests ranging from tex- on Monday. acres, it is scheduled to be operational in
tiles to telecom and aluminium to cement, Tata Sons Chairman N Chandrasekaran 18 months.
has already invested over ~400 billion in the said with the expansion, Tata Steel’s total ITC and Britannia Industries announced
state, employing around 12,000 people. investment in Odisha would exceed ~1 tril- investments in food processing and to scale
Through ancillarisation, the group says it lion. Jindal Steel & Power Chairman Naveen up existing units. ITC’s investment is ~5.5 bil-
will generate employment for 25,000. The Jindal said they’d put in another ~550 billion lion; Britannia says it will invest ~600 mil-
inaugural ceremony for a textiles unit at to expand their Angul steel plant capacity to lion over the next three to five years.
Mancheswar on Bhubaneswar’s outskirts was 20 mt a year by 2030, from 6 mt now. Dalmia Bharat Group has proposed to add
done during the conclave. Centre-owned SAIL has pledged ~410 bil- 2.5 mt of annual capacity at each of its cement
Reliance Industries announced ~30 billion lion to expand capacity at its integrated units at Rajgangpur and Kapilash, near
in investment over the next three years, across Rourkela unit from 4 to 10 mt annually, in Cuttack, at ~25 billion.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official

4 ECONOMY & PUBLIC AFFAIRS MUMBAI | TUESDAY, 13 NOVEMBER 2018

“The PM asks youth to fry pakodas and sell paan, while “Winning the 2019 poll will make the BJP “They (Sonia & Rahul Gandhi) want an account
the (Rajasthan) CM calls protesting jobless youth invincible from panchayat to Parliament for of demonetisation. It was due to note ban
lafangas. What is the future of the youth? The BJP govt a long time. An invincible BJP, we have that fake firms were identified. I do not need
at the Centre promised 20 mn jobs annually, while in strong confidence, will pave the way for a a certificate of honesty from the mother-son
Rajasthan, 1.5 mn jobs were promised in 5 years” prosperous, secure and culturally rich India” duo who are out on bail”
RANDEEP SURJEWALA, Congress leader AMIT SHAH, BJP president NARENDRA MODI, Prime Minister
>

Retail inflation cools to 3.31%, lowest in a year E-tolling share

likelytoreach HOW INDEX MOVED
INDIVJAL DHASMANA tary policy committee may month.
New Delhi, 12 November
CPI inflation in % (y-o-y) retain the policy rate in its meet- In non-food items, fuel infla-
6 ing next month despite core tion rose to 8.55 per cent in
Retail inflation rate fell to a one- inflation (inflation minus food October against 8.47 per cent in

year low of 3.31 per cent in
October on the back of cheaper
kitchen staples, fruits and pro-
tein-rich items, data released on
Monday showed. The inflation
remained below the four per
cent mark, the average of the
range that the Reserve Bank of
India (RBI) is statutorily man-
dated to keep the inflation, for
the third month in a row now.
The inflation, based on the
Consumer Price Index (CPI),
40% by yr-end
was 3.7 per cent in September
this year and 3.58 per cent in
October 2017. The retail infla-
tion number is the lowest since
September 2017 when it
touched 3.28 per cent.
Food items saw fall in prices
at 0.86 per cent in the month
3.17
Jan ‘17
Note: The base year is ‘11-12
compared to 0.51 per cent infla-
tion in the previous month,
showed an official release.
Experts believe the mone-
5 and fuel) showing some signs
4 of concern.
3 Vegetable prices fell by 8.06
3.31 per cent in October against a
2 4.15 per cent contraction in
1 September. Inflation also
Oct ‘18 slowed to 0.35 per cent in the
Source: MoSPI
fruit basket as against 1.12 per
cent recorded a month ago.
However, inflation quick-
ened to 8.55 per cent for the
“fuel and light” category against
8.47 per cent in the previous
September.
However, core inflation
remained in excess of 5.3 per
cent since November, 2017, said
Devendra Pant, chief economist
at India Ratings, adding this
would make RBI's job difficult.
“We believe the RBI may
remain in pause mode in its
forthcoming MPC meeting in
view of the conflicting trends
of different segments of CPI,”
he said.
Hasseenasharpspikesincenoteban
MEGHA MANCHANDA account linked to the tag.
New Delhi, 12 November The National Payments
Corporation of India has
Electronic tolling (e-tolling) developed the national elec-
on national highways, after tronic toll collection pro-
being launched in April 2016, gramme to meet the e-tolling
sharply spiked after demon- requirements. Twenty five
etisation and has since con- per cent of the toll collection

IIP rise slows to 4.5% in

sistently grown at an average under NHAI comes via this
IN BRIEF 23 per cent. platform.
The Union government is According to an NHAI

Rupee drops 39 paise against

hopeful that the contribu- official, 95 per cent of the 372
tion of e-tolling will touch toll plazas across country

Sept versus 4.7% in Aug

40 per cent by the end of the have a dedicated FASTag
dollar as crude oil rebounds current financial year lane. By the end of 2017-18, e-
(2018-19). tolling revenues were at
TherupeeonMondaydroppedby39paisetosettleat72.89against The government had ~228.20 billion at toll plazas
theUScurrencyasoilpricesreboundedafterSaudiArabia been pushing for e-tolling across the country.
announcedplanstocutproductionandthedollarstrengthenedin prior demonetisation as well. According to the latest
globalmarkets.Cuttingshortthe10-daysellingtrend,crudeoil After invalidating old ~500 data by the Ministry of Road
pricesrosebyaround1percenttotouch$71perbarrelmarkafterthe Capital goods, mining and ~1,000 denomination Transport and Highways in
world’slargestoilexporterSaudiArabiaannouncedplanstocut currency notes on November April this year, toll collection
productionby500,000barrelsperdayfromDecemberandcalledfor dragged it down 8, 2016, the government had at plazas stood at ~19.18 bil-
aglobaloutputcutofonemillionbarrelsperdaytosupportoilprice. FACTORY NUMBERS suspended toll collection to lion and till October 14, it was
Thedollaralsorosetoan18-monthhighagainstitsglobalpeers INDIVJAL DHASMANA % change in the (IIP) y-o-y tide over cash ~9.29 billion.
aftertheBritishpoundtumblednearly1percentduetogrowing New Delhi, 12 November 10 crunch. According to road However, there
worriesabouttheBrexitdealwithEU.Weighedbyheavydollar 8.0 Subsequently, e- and transport was a dip in e-toll
8

demandamidfirmingcrudeoilprices,therupeeopenedlowerat
72.74andfellfurtherby57paisetotheday’slowof73.07.Therupee
finallysettledat72.89perdollar,showingalossof39paiseor
0.54percentoverthelastclose.
India paid bigger
cotton sops than
WTO allows: US
India has paid out far more
in cotton subsidies than the
World Trade Organization
allows, with payments
“vastly in excess” of what it
had officially declared, the
United States said in a filing
to the trade watchdog on
Monday. REUTERS<
US-based Avenue
Capital to pick
up 27% in ARCIL
US-based 10 billion
distressed asset fund
Avenue Capital will acquire
27 per cent stake in Asset
Reconstruction Company
(India) Ltd (ARCIL) by buying
stake from few existing
shareholders, including GIC
of Singapore and IDFC Bank.
Meanwhile, asset recons-
truction company plans to
raise ~15 billion from long
term investors such as
international pension
funds, endowment funds
and also domestic ones like
insurance companies. It
would use the funds for
buying out distressed asset
in medium and small
enterprises segment.
BS REPORTER<
PTI<
Abu Dhabi firm hires
India’s strategic
oil storage
India on Monday signed an
initial pact to lease out a part
of its underground strategic
oil storage at Padur in Karn-
ataka to Abu Dhabi National
Oil Co (ADNOC) for storing
crude oil, the second such
deal with the UAE firm this
year, Oil Minister Dharm-
endra Pradhan said. India
has built 5.33 million tonnes
of emergency storage — eno-
ugh to meet its oil needs for
9.5 days, in underground
rock caverns in Mangaluru
and Padur in Karnataka and
Visakhapatnam in Andhra
Pradesh. PTI<
Facebook describes
fake news as an
‘existential threat’
Facebook on Monday
categorised fake news as an
“existential threat” to the
social media platform,
leading to the company
taking some tough
measures to combat it. The
American giant said its
founder, Mark Zuckerberg,
has created a “large number
of teams” to combat
disinformation and fake
news. PTI<
G
rowth in industrial output tolling was pro- ministry data, in revenue in July at
slowed to 4.5 per cent in 6 moted by the April this year, toll ~17.98 billion due to
September against 4.7 per cent 5 government collection at the truckers strike.
in the same month last year as the festi- 4 through various plazas stood at The official list
val season started late this year com- 4.5 campaigns. ~19.18 billion and also includes toll
pared to 2017. 3 According to till October 14, it collection from
official, was ~9.29 billion
Growth faltered as the output of cap-
ital goods and mining expanded at a
2 an
“Another reason
privately funded
highway projects
slower pace in September than in the May ‘16 Sep ‘18
1
why e-tolling picked up in where the money goes to the
previous month.
Note: Based on updated base year of ‘11-12
November and December of private firm. The toll rates
The index of industrial production Source: Ministry of Statistics and 2016 was the inclusion of are revised approximately 3
(IIP) growth numbers were revised for Programme Implementation multiple banks in the distri- per cent every year in April,
August from 4.3 per cent to 4.7 per cent. bution of FASTags in April factoring in the wholesale
If compared to the provisional num- 2016.” The reach increased, price index.
bers, growth would be seen as moder- with other banks starting the Complete penetration of
ately rising. As such, it is a bit of a sta- issuance of FASTags. RFID tags on highways may
tistical illusion, depending on which “Currently, 22 banks are on take some time as land relat-
number one takes for August because board,” the official added. ed issues persist.
some people may argue provisional Manufacturing growth Mining rises 0.2% in Electricity generation The National Highways “Due to problems in
numbers should be compared to provi- slows to 4.6% in Sept Sept against contraction rises 8.2% in Sept Authority of India (NHAI) acquiring land on some of
sional numbers. roped in ICICI Bank for issu- the existing highways, sepa-
from 5.1% in Aug of 0.5% in Aug against 7.6% in Aug
However, a low base of September ing FASTags — a device that rate RFID lanes cannot come
2017 compared to August 2017 should employs radio frequency up. But the NHAI has come
have magnified the growth numbers for The growth rate in manufacturing, against 5.3 per cent in the previous identification (RFID) tech- up with the concept of
September this year. IIP the dominating segment, month, fast-moving consumer goods nology for making toll pay- hybrid lanes for
growth fell to 4.1 per cent in accounting for 78 per cent of grew 6.1 per cent against 6.5 per cent. ments. The RFID tag is such highways,” said an
September 2017 against 4.5 Among three the IIP, declined to 4.6 per “The IIP came as expected at 4.5 per affixed on the windscreen of NHAI official. Hybrid lanes
per cent in August. major segments, cent in September from 5.1 cent with slight moderation in manu- the vehicle and enables a are essentially lanes that col-
This is the last crucial offi- it was primarily per cent in the previous facturing but consumer goods continue customer to make toll pay- lect toll both with cash and
cial data before the gross electricity month. to show traction and bode well for ments directly from the FASTags.
domestic product numbers generation, Mining output remained Q2FY19 growth,” said B Prasanna, group
for the second quarter of which grew almost flat, rising only by 0.2 executive of ICICI Bank.
2018-19 come out by the end 8.2 per cent per cent in September against Madan Sabnavis, chief economist at ELECTRONIC TOLL COLLECTION IN 2018-19
of November. in September a contraction of 0.5 per cent CARE Ratings, said growth had been (till Oct)
"The mild dip in growth in as against in August. propelled by the consumer goods and Month Value (~ bn) in %
September was driven by the 7.6 per cent in the Within manufacturing, infra sectors. April 19.18 21.3
impact of floods in some previous month capital goods continued to "The recent spurt in pre-festival sales
parts of the country, and the witness volatility despite the was a harbinger of this growth number May 20.21 21.8
disruptions related to the late start to new IIP. The growth rate here moved and it may be expected that this will be June 19.21 23.2
the festive season, and does not pose a down to 5.8 per cent from 9.3 per cent. sustained in the coming months too,"
substantial concern," Aditi Nayar, chief Infrastructure and cement grew to he said. July 17.98 23.8
economist at ICRA, said. 9.5 per cent from 7.9 per cent, while For coming months, Anis 24.5
August 19.6
Among three major segments, it was intermediate goods expanded at slower Chakravarty, lead economist at Deloitte
primarily electricity generation, which rate of 1.4 per cent against 2.8 per cent. India, said while some risks to the pro- September 19.36 25.3
grew 8.2 per cent in September against Consumer and primary goods grew at duction outlook remained, the counter- 25.6
7.6 per cent in the previous month. the same rate in September as in August. acting effect might come from improve-
October 9.29
However, electricity constitutes just While consumer durables saw ments in infrastructure and (till 14th)
around 8 per cent of the IIP. growth of 5.2 per cent in September construction. Source: Ministry of Road Transport and Highways

Meeting climate change targets for 2020-30 a task cut out

NITIN SETHI
New Delhi, 12 November
India’s draft Biennial Update Report
(BUR) has thrown up several questions for
policymakers. The report notes that India
has achieved a 21 per cent improvement
on the emission intensity of its GDP over
2005 levels ensured that 35 per cent of its
power capacity came from non-fossil fuel
sources by 2018.
In light of this, could India ratchet up
its climate change commitments for 2020-
2030 under the Paris Agreement? Does the
better than expected performance
on this front suggest India could
relook at its domestic goals for
energy mix?
Officials and experts that
Business Standard spoke to say
several other factors, besides the
preliminary findings of the BUR
could play a crucial role in CLIMATE
answering these two questions and CHANGE-2
that India has ample time to do so.
At an average annual improvement in
emissions intensity of two per cent of 2005
levels India could achieve its target of
achieving 33-35 per cent over 2005 levels
well before the committed 2030 deadline.
“Preliminary reading of the numbers
indicate this was achieved by
unprecedented structural changes in the
economy. There was not a lot of renewable
power capacity addition that played a role
in this,” an expert involved in the setting of one of them added.
India’s Paris agreement targets said.
By March 2018, India had installed
55.7 Gw of solar and wind-based power
plants. That counted for 16.2 per cent of
the total installed capacity. The NDA
government has domestically (and not “Some developed country partners
under the Paris Agreement) committed have threatened to walk out, some are
to ensuring 175 Gw of solar and wind failing their domestic mitigation
power capacity by 2022. objectives, and almost all of them are
“Withdeeperanalysisofthedata,ifit unwilling to come true on their
emergesthatwearedoingquitewellwith commitments to provide finance to the
currentlevelsofadditiontorenewables, poor countries. The last round of
thenoneshouldconsiderifIndianeedsto negotiations in September hit a stalemate
investalotinstorageandbatteryforthe when developed country partners refused
intermittentrenewablesources,”headded. to discuss the modalities of reporting
Experts have warned that once 15-20 achievement against their finance and
per cent of the power generated comes technology commitments,” he said.
from these intermittent sources, the “India is committed to stay in the
nature of the power distribution systems agreement regardless of how other
and energy markets would have to countries act. It has gone ahead and taken
considerably alter. “If we are on the costs of mitigation and adaptation
achieving our international without waiting for the international
targets through changes to the funding,” he added.
economy and energy efficiency, At the negotiations in December, the
one should consider what is the trends (in emission preparation of the BUR. trigger for enhancing emission reduction
investment Indian economy intensity) are cyclical or
AT THE NEGOTIATIONS IN targets even before Paris Agreement kicks
should deploy in storage and seasonal. The year 2014- DECEMBER, THE TRIGGER International off in 2020 is likely from a track of quasi-
renewable, and at what pace,” he 16 saw good monsoons. FOR ENHANCING commitments formal talks called the “Talanoa Dialogue”.
added. The emissions would EMISSION REDUCTION Officials involved in Some countries may look to insert a
Two experts pointed to the change in average or bad negotiations explained placeholder to enhance mitigation
stresses emerging in the solar power monsoon years as coal TARGETS EVEN BEFORE that the talks in December ambition without assessing what
market with low bid values and increased gets deployed more,” THE PARIS AGREEMENT on implementing the Paris developed countries are doing to
tariffs on imports from China. They also said another official. KICKS OFF IN 2020 IS Agreement need not be the provide finance and technology, Indian
noted that official estimates of levelised “Did demo- place to announce the negotiators said. This could come from
costs of power from different energy nestisation and GST
LIKELY FROM A TRACK future course of India’s the Dialogue, leading to a formal UN
sources (including or excluding public alter economic activity OF QUASI-FORMAL climate actions. Therefore, decision asking countries to enhance
health costs of coal) did not exist to make in one or two years, TALKS CALLED THE they concluded that there their mitigation targets ahead of 2020.
an economic argument one way or the particularly in the ‘TALANOA DIALOGUE’ is ample time to look at the “It is of course better to stop global
other. “The discovered tariff price through MSME sector, and performance of India and temperature rise at 1.5 degrees Celsius
bidding is not the only metric to consider,” consequently alter the other countries. rather than 2 degrees. A one degree limit is
levels of emissions? Were these “There is time for that. Now is the time even better. That is a no-brainer. But the
“Thereisnoargumentoversolarversus temporary blips or did we set in any to focus on pre-2020 ambition and the question is are all countries on track to
coal.Buttherearevalidtechnicaland significant structural changes? data shows India is one of the developing meet even the 2-degree target? We know
economicfactorstosetthepaceofthis Factors such as these are important to countries leading the global effort, even the answer to that,” he added.
change,”headded. address and will need more granular though the developed countries were
“We also need to understand if these research,” noted a scientist in the meant to do so,” an official said. Series concludes
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
6 ECONOMY & PUBLIC AFFAIRS
>
MUMBAI | TUESDAY, 13 NOVEMBER 2018 1

Have achhe din arrived for GST? T N SRINIVASAN 1933-2018

A mix of improving compliance, reviving

economy and implementing amended
TRACING THE NUMBERS
THE UPCOMING CHALLENGE
laws can help reduce the GST shortfall
Average monthly
970
ABHISHEK WAGHMARE tlement of IGST is likely to give more revenue till now
New Delhi, 12 November revenue to the Centre, the unutilised Average monthly
compensation cess will be available to revenue required in 1,107
the next5 months
An early reformer
INDIVJAL DHASMANA
(~ billion) New Delhi, 12 November
Growth (%)
T N Srinivasan, who died in Chennai on
14 Saturday at 85, provided, along with
Jagdish Bhagwati and Padma Desai, an

C
rossing ~1 trillion, the goods and the Centre and states in the financial intellectual framework for economic
services tax (GST) collected in year itself. Note: Growth pertains to GST revenue for each of reforms that India undertook in 1991, when
October brought cheer to the The IGST collected is distributed the five months: Nov-Mar 2018-19 the balance of payments crisis hit it hard.
government. But a closer look at this among the Centre and states in two A Padma Bhushan awardee, TN, as he
financial year reveals that the trillion ways: regular settlement, in which the IGST REGULAR SETTLEMENT INCLINED TOWARDS CENTRE was popularly called, through his papers
rupee-mark was touched only twice in share of both is determined by identi- showed that the rupee devaluation in 1966
seven months. As a result, analysts fying the place of supply, and ad hoc Regular Ad hoc (~ billion) had narrowed the trade deficit. Later, the
expect a shortfall of ~500 billion in settlement, under which some amount CGST SGST 200 rupee was devalued twice during the 1991
Central GST (CGST) in FY19. in the IGST kitty is distributed equally 157 175 reforms. TN, along with Bhagwati, was a
Despite this imminent shortfall, the between them, when needed. 140 153 140 151 150 150 150 critic of protectionist policies of successive
government looks confident of achiev- While the former is an accurate governments till then.
ing the fiscal deficit target of 3.3 per apportionment, the latter is provision- 100 Later taking stock of economic reforms,
cent of the gross domestic product al, or remains “for the time being”, as 60 60 he wrote in 2003 a working paper saying
50
(GDP). Does it mean that achhe din the amendment puts it. Under regular corrective actions were needed to revive
(good days) have really arrived for GST settlement, the Centre has got about 00 00 0 the investment climate in India.
or the government will have to look for 53 per cent, while the states have got 47 Aug Sep Oct Aug Sep Oct He suggested fiscal consolidation,
other sources of revenue, or squeezing per cent, if we consider the last three including significant tax and expenditure
expenditure? months’ data. reforms, as well as rethinking of Centre- guided by Tjalling Koopmans, who got the
With the 2019-20 interim budget less However, under the latter, the states AVERAGE TAX PER GST E-WAY BILLS INCREASING state fiscal arrangements, further opening Nobel Prize in 1975, at Yale University.
than three months away, things look far enjoy a bigger share “for the time being” RETURN ON THE RISE BY THE DAY up of the economy to foreign trade and Under Koopmans, he studied operations
from good due to the enormity of task at since both get 50-50. Thus, it is likely Average taxcollected per return filed (~) Dailye-waybills generated (million) investment, credible commitment to the research and linear programming. He
the taxman’s hand. The average month- that at the time of Budget 2019 when the capital account convertibility of the rupee, wrote his doctoral thesis on the choice of
ly revenue from GST in the final settlement would be 1,80,000 1.80 alleviating infrastructure constraints, and techniques and earned his PhD in eco-
remaining five months of done, the Centre’s share in undertaking labour and insolvency nomics (1962) from Yale University.
1,71,091 1.60
2018-19 needs to be at least 14 the IGST would be more 1,60,000 1.73 reforms. TN came back to India from the US to
per cent more than that the than expected. 1,49,311 1.40 These ideas saw fructification in the work at the New Delhi-based Indian
average of last seven months, According to prelimi- 1,40,000 1.20 Fiscal Responsibility and Budget Statistical Institute in 1962. He also worked
a feat observers say is virtu- nary calculations, that 1.00 Management (FRBM) Act, opening up at the Planning Commission, now defunct.
ally impossible. would give the Centre ~70- 1,20,000 0.93 0.80 the FDI regime in phases, and enacting Former RBI governor C Rangarajan, who
Government officials and 80 billion more than the Apr ‘18 Nov ‘18 Apr ‘18 Nov ‘18 the Insolvency and Bankruptcy Code, was with TN in college, said initially he was
experts say it is highly likely that the budgeted estimate of ~500 billion. though much later. interested in planning models and worked
October spurt is due to the increased On the cess front, the amount from Sources: PIB, Business Standard calculations, GST Council, GSTN Complied by BS Research Bureau However, the on the behaviour of
consumption in the festive season, and the collected cess that remains unutilised rupee is yet to be savings and invest-
has less to do with increased compliance. after compensating for revenue short- It had gradually decelerated from rough- the economy. Half of the leading sectors made fully convert- ment. “He has worked
The overall GST collection in 2018- fall of states was to be kept untouched in ly ~171,000 in April. have shown the best growth in net sales ible, though TN want- FINANCE MINISTER in almost all areas of
19 is expected to be ~12.3 trillion, or a public account till 2022, according to This is significant since this rise since the inception of GST. Sales of a ed it to be so in the ARUN JAITLEY: economics and, more
~1.03 trillion per month. In the seven the original law. This was amended to came despite the reduction in GST sample of 783 companies grew 21.5 per “not too distant Saddened by the passing particularly, interna-
months till now (April-October), the allow the government to use the unused rates for various goods and services at cent in Q2 2018-19, as against 8 per cent in future”. away of Shri T N Srinivasan, tional trade,” said
average monthly revenue from GST amount in the financial year itself. the end of July. This rate cut initially Q2 2017-18, a report by Care Ratings said. However, capital a towering Indian Rangarajan, who is
stands at ~970 billion, six per cent The Centre has budgeted to collect had a negative impact on collection of However, anti-evasion measures controls now are economist. His contributions chairman of the
short of target. To match the expecta- ~900 billion as compensation cess, IGST on imports, which declined from might not be instrumental in shoring much more limited to macroeconomics & Madras School of
tion, the government needs at least and the actual collection is fairly on ~265 billion in July to ~253 billion in up revenue. “What you catch is always than those in 2003. academia will always inspire Economics, where TN
~1.11 trillion a month — a feat track. Extrapolating current data, September. But it has now jumped to its a small fraction of what is going on,” a Also, labour future economist. My was honorary profes-
unachieved — for the next five months, experts and officials put the unutilised peak of ~269 billion in October, sug- tax official said. Though some news reforms are yet to be condolences to the bereaved sor. Besides reforms,
14 per cent more than the last seven amount estimates at ~200 billion at gesting increased compliance and con- reports show that two thirds of detect- expedited though family. May God render he wrote on the basic
months’ average. the end of the year, which would help sumption. ed evasion has been recovered in the many states, includ- peace to the departed soul. minimum income for
Adjusting for refunds, analysts from the Centre with another ~100 billion Official data from the GST Network April-September period, the amount ing Rajasthan, have all Indians. He said it
Kotak research put the monthly (half will go to states). (GSTN) accessed by Business Standard recovered — at ~23 billion in six months gone on their own should be done within
FORMER FINANCE MINISTER
requirement a few notches higher to In addition, GST compliance is better shows that daily e-way bill generation — is too minuscule compared to carrying them out. a reasonable period of
P CHIDAMBARAM:
~1.24 trillion per month. now than in earlier months. The number has increased from 1.56 million per day ~5.8 trillion collected in this period. TN was trained to time and this mini-
However, changes to acts pertaining of returns filed has grown steadily from in June to 1.73 million per day in October In addition, the effect of festive sea- be a statistician, Saddened to learn of passing mum should be raised
to Integrated GST (IGST) and compen- 6.05 million in April to 6.75 million in and the first week of November. son would wean off soon, and election studying at the away of Prof T N Srinivasan. progressively as devel-
sation cess carried out in August 2018 October. More importantly, the average This rise has come in line with the mode would creep in at the time of the Indian Statistical A towering economist, opment expanded.
are likely to give a breather — in the GST collected per monthly return filed corporate performance in the second budget. The challenge before the gov- Institute, Kolkata. brilliant author and great
form of extra revenue — to the Centre. has improved from the low of ~140,000 in quarter of 2018-19, which ended in ernment now is to use the factors that But, later he moved to friend and supporter of (With inputs from
While finalisation of the ad hoc set- August to ~150,000 per return in October. September — a proxy for the health of are favourable to its benefit. economics, and was India’s liberalisation. Gireesh Babu)

Prabhu leading delegation > FROM PAGE 1

for RCEP meet in Singapore
Commerce and Industry
Minister Suresh Prabhu is
leading a delegation at a meet-
ing of trade ministers of
Regional Comprehensive
Economic Partnership (RCEP)
member countries in Sing-
apore, beginning Monday.
Trade ministers of the
16-member RCEP are meet-
ing to resolve the issues are
hindering conclusion of
negotiations.
RCEP is a pact that aims to
CRISIL SME TRACKER
With corporates on board, TReDS
will materially change MSME
cover goods, services, invest-
ments, economic and techni-
cal cooperation, competition
and intellectual property rights.
The chief negotiators had
recently concluded the 24th
round of their meeting in
Auckland, New Zealand, last
month, the ministry said.
India has free trade agree-
ment with the Association of
Southeast Asian Nations,
Japan and South Korea.
PTI
RBI governor
at least two demands of the
government — easing PCA
meets PM... norms for some banks along
with aligning the regulatory
capital requirement of banks
with international norms and
a special dispensation for
MSMEs.
Tension between the RBI
and the government escalat-
ed particularly after the
finance ministry initiated dis-
cussions with the regulator
under the never-used-before
Section 7 (1) of the RBI Act. The
provision empowers the gov-
ernment to issue directions to
the RBI, following consulta-
tions with the governor. The
RBI had shown signs of dis-
comfort with Deputy
Governor Viral Acharya going
Further, the government has
demanded a review of the eco-
public and talking about
maintaining the independ-
of a single corporate group;
removing the requirements of
mandatory hedging for infra-
structure loans of less than 10
years’ maturity; setting up a
special refinance window for
non-banking finance compa-
nies, housing finance compa-
nies and mutual funds; creat-
ing a facility for banks to raise
$30 billion; and a review of the
economic capital framework
for bringing it in line with the
requirements of the RBI Act.
Other suggestions were
related to the application of
Basel III norms to banks that
are not internationally active,
requirement for building up a
capital conservation buffer dur-
ing periods of stress, the need
for keeping the RBI capital ade-
quacy norms at 1 per cent high-
er than Basel III norms, the effi-
Dorsey tweets
‘governance’
to all parties
“This will help political par-
ties understand how social
media influencers work. How
they can make tweets trend.
Types of a Twitter profile a
candidate should have to
increase the number of fol-
lowers,” added the source.
Twitter will also create
specific emoticons and hash-
tag for political parties.
Sources said Dorsey met
Congress President Rahul
Gandhi and senior party lead-
ers such as Randeep Singh
Surjewala, social media head
Divya Spandana and Nikhil
Twitter, which counts India been facing the menace of
as its priority markets, has rumours and fake news float-
a large number of Indian
politicians using it to
engage with citizens,
Delhi.
He added if certain con-
tent was found to be mislead-
ing, it was Twitter’s job to
ensure that such information
was picked out and prevented
from spreading. “...If the
intent (of the content) is to
mislead, we need to under-
stand and pick out this infor-
mation and then it’s our job to
ensure it doesn’t spread and
our job is to ensure it doesn’t
gain the impressions beyond
its given reach,” he said.
Dorsey said artificial intel-
ligence could help build a
solution that may be near per-
fect. Social media firms have
ing on their platforms.
Organisations such
Facebook and WhatsApp
as

credit access nomic capital framework of the

RBI. The framework governs
ence of the central bank and
how a potential compromise
cacy of the framework for PCA
for banks in restoring banks to
Alva. Discussions on how the
party’s social media handles
especially around elections have taken a number of steps,
including sensitisation pro-
To address the funding crunch faced by micro, small
and medium the risk capital that the RBI is could be “potentially cata- health, the need for high-risk can do better to attract fol- ber of conversations, it’s grammes among users across
enterprises (MSMEs), required to keep with itself strophic” for the economy. weights for credit to micro, lowers and change senti- become more important that the country.
GROSS BANK CREDIT TO along with the amount of sur- Among various demands, small and medium enterprises ments were held. we scope the problem as Twitter on Monday also
the government on
November 2, 2018,
MANUFACTURING MSMES plus that needs to be transferred the finance ministry has sug- (MSMEs), and enhancing Twitter, which counts tightly as possible because launched its #PowerOf18 ini-
„ MSEs „ Medium enterprises to the Central government. gested to the RBI doing away opportunities for rectifying and India as its priority markets, fake news or misinformation tiative aimed at encouraging
announced initiatives (~ billion) Over the past few days, the with the requirement of an restructuring MSMEs’ loan has a large number of Indian as a category is way too big,” Indian youth to contribute to
to improve credit 4,000 government and the RBI have exposure limit of 20 per cent of accounts. politicians using it to engage he said while addressing a public debate and participate
access, as part of
had discussions in a bid to foreign portfolio investments with citizens, especially town hall at the Indian in civic engagement in the
support and outreach
3,690
3,630

3,638

3,000 arrive at common ground on in corporate bond portfolios With inputs from PTI around elections. “In a num- Institute of Technology, elections.
programme for the
sector. This includes 2,000
asking companies
1,053

Govt submission Jet plans...

1,107

1,019

reached commercial evalua- negotiations. “The proposal for DPP-2013 on Inter-Govern-

with a turnover of 1,000
more than ~5 billion
to mandatorily
embrace the Sep Sep Sep
Trade Receivables 30,’16 29,’17 28,’18
e-Discounting System Source: RBI
(TReDS).
Bank credit to micro and small enterprises (MSEs),
especially in manufacturing, has shown no signs of
growth in the past two financial years, and actually
declined for medium enterprises (source: RBI).
For a long time now, there has been a structural
need to address the funding and liquidity woes of
the entire MSME landscape, particularly working
capital.
TReDS has the potential to take care of a
significant portion of the requirement.
CRISIL’s analysis of nearly 10,000 MSMEs shows
their average trade receivables is about 75 days —
a significant stretch that forces them to resort to
high-cost debt to keep business running.
As for credit flow from banks and non-banks, a
marked improvement will take time because of
enduring challenges they face.
In this milieu, the government’s move to launch a
portal to assess and sanction loans of up to ~10
million in a matter of minutes will help micro
enterprises significantly, while TReDS can change the
game for small and medium enterprises by
engendering their credit history by enabling tracking
of their receivables’ realisation — or, when and how
dues from corporates were received.
0 to SC hints...
The SoC is forwarded through
two key acquisition committees
– the Services Capital Acqu-
isition Plan Categorisation
Committee (SCAPCC) and the
Services Capital Acquisition
Plan Categorisation Higher
Committee (SCAPCHC) – to the
Defence Acquisition Council
(DAC), which accords an Acce-
ptance of Necessity (AoN) to go
ahead with the procurement.
The SCAPCC and the
SCAPCHC decide whether the
equipment is to be built in
India, bought from abroad, or a
mixture of the two. Instead of
going through these founda-
tional steps, which would have
involved the IAF in the deci-
sion, the government’s sub-
mission to the SC indicates that
it assumed that the clearances
granted for the 126 medium
multi-role combat aircraft
(MMRCA) procurement were
also valid for the 36-Rafale con-
tract, even though these were
two fundamentally different
procurements. “The acquisi-
tion process for MMRCA had
tion stage after completion of
all the standard processes as
per DPP,” says the submission.
“The background of the case
was brought to the notice of the
DAC where it was mentioned
that operational capability of 36
Rafale aircraft will be in accor-
dance with the SQR for the pro-
curement of MMRCA.” The gov-
ernment will have to square this
statement with its assertion –
made to justify the higher price
of the 36 Rafales – that a range of
“India-Specific Enhancements”
made the operational capability
of the 36 Rafales significantly
higher than the Rafales in the
MMRCA tender. Thereafter, the
government has submitted, it
pursued the procurement as an
Inter Governmental Agreement
(IGA) with France, for which the
DAC accorded clearance on
May 13, 2015.
The dissenting opinions on
the Indian Negotiating Team
(INT) for the Rafale have already
been reported in the media,
including a dissenting note writ-
ten by a joint secretary on the
INT. These reports are corrobo-
rated by the number of times
the DAC had to intervene in the
procurement of 36 Rafale was
presented to the DAC on three
occasions between 28thAugust
and 1st September 2015, and
subsequently on 11thJanuary
2016 and 14thJuly 2016, for
approvals on various aspects of
the negotiations and direc-
tions,” says the government sub-
mission.
Paradoxially, the govern-
ment has cited a growing ene-
my air threat to justify can-
celling the 126-Rafale tender
and replacing it with fewer
fighters. “During this long peri-
od of inconclusive 126 MMR-
CA process (sic), our adver-
saries inducted modern
aircraft and upgraded their old-
er versions. They acquired bet-
ter capability air-to-air missiles
and inducted their indigenous
fighters in large numbers… An
urgent need was felt to arrest
the decline in the number of
fighter squadrons in IAF and
enhance their combat capabil-
ities,” says the submission to
the SC.
It says it decided to procure
the 36 Rafales through the inter-
governmental route for geo-
strategic advantages. “Para 71 of
mental Agreement (IGA) states
that ‘there may be occasions
when procurements would
have to be done from friendly
foreign countries which may be
necessitated due to geo-strate-
gic advantages that are likely to
accrue to the country. Such pro-
curements would… be based on
mutually agreed provisions by
the Governments of both the
countries. Such procurements
will be done based on Inter
Governmental Agreement after
clearance from the Competent
Financial Authority (CFA).’ The
CFA for procurement cases val-
ued at more than ~1,000 crore
(~10 billion) was the Cabinet
Committee on Security (CCS)
during the DPP 2013.”
Justifying the IGA, the gov-
ernment has submitted: “Of the
total procurement of about ~7.45
lakh crore (~7.45 trillion) since
2002 under DPP, IGAs of differ-
ent kind… account for nearly 40
per cent.” The submission to the
SC, however, does not mention
that the DPP procedure was
scrupulously followed in those
IGA procurements.
The Supreme Court will be
hearing the case on Wednesday.
Jet Airways is facing a fund
crunch, resulting in delay in
salaries to employees and pay-
ment to vendors. It is exploring
a stake sale to raise capital. Ta-
lks have been held with private
equity firms and the Tata gro-
up. The airline’s trade payables
rose by ~15 billion over the past
six months because of losses.
“The airline continues to
engage with financial stake-
holders for supporting its fund-
ing requirements till it starts
generating operational surplus
and is working on the moneti-
sation of its assets and capital
infusion,” Jet said. It said the
turnaround and cost-saving
strategy was on track and in the
first half of FY19, it had saved ~5
billion in costs. “With our focus
on profitability, we are in the
midst of turning the ship
around. We remain engaged
with all our partners who
acknowledge the challenges
faced by the Indian aviation
industry,” said Vinay Dube,
chief executive officer at Jet
Airways. The airline said it
would induct 11 Boeing 737 Max
planes in the current financial
year, but indicated that overall
capacity growth would remain
flat. Jet said it would rationalise
operations on select uneco-
nomic routes and redeploy
capacity in more productive
markets. This will see an inc-
rease in flights to Bangkok,
Dubai, Doha, and Kathmandu.
At present, the airline flies to
West Asia from Kochi, Kozh-
ikode, Thiruvanthapuram, and
Mangaluru. “Gulf operations
are being optimised to focus on
building greater connectivity
over hubs in Mumbai and Delhi
instead of point-to-point con-
nectivity. The scale of opera-
tions will continue at the same
level as the airline currently
operates,” the airline said.
https://t.me/pdf4exams
8 ECONOMY & FINANCE
>
Don’t forget note ban made you
seek bail: Modi’s dig at Gandhis
PM addresses rally in Chhattisgarh; in first phase, several booths see polling for first time in 15 yrs
ARCHIS MOHAN
New Delhi, 12 November
P
rime Minister (PM) Narendra seats, with polling taking place for the
Modi on Monday attacked the first time in 15 years in several polling
Congress’ dynastic
politics, and said its leader-
ship of “mother-son duo”, a
reference to Sonia Gandhi
and Rahul Gandhi, had to
seek bail because of his
demonetisation decision.
The PM addressed a pub-
lic rally in Bilaspur in poll-
bound Chhattisgarh in the
afternoon. Of the 90 ASSEMBLY POLLS
Assembly seats in
Chhattisgarh, 18 across eight CHHATTISGARH stituency. Of the 18 seats,
Maoist-influenced districts
had polling on Monday in the first uled Tribes and one was for the
phase. Voting in Bilaspur, as part of the Scheduled Caste category.
remaining 72 seats, is scheduled for the
second phase on November 20.
VARANASI PORT OPENS
PM receives India’s 1st inland cargo vessel
VIRENDRA SINGH RAWAT
Lucknow, 12 November
Prime Minister (PM) Narendra Modi on
Monday inaugurated India’s first multi-
modal terminal (MMT) on the Ganga
and launched projects worth ~25 billion
in Varanasi, pitching his constituency
as a potential cruise tourism and cargo-
handling hub in eastern India.
The Varanasi region is already
developing as a global carpet and tex-
tile hub, Modi said, adding it would
promote tourism, cargo, and passenger
transport and become a major hub for
“nature, culture and adventure” in this
part of India. “I have double joy as the
PM and as the local Member of
Parliament that now Varanasi is con-
nected with all the three modes of trans-
According to the Election Comm-
ission (EC), the overall voter turnout till
5.30 pm was 58.55 per cent for the 18
stations. The EC said a vot-
er turnout of 61.47 per cent
was recorded in
Kondagaon, 63.51 per cent
in Keshkal, 62 per cent in
Kanker, 58 per cent in
Bastar, 49 per cent in
Dantewada, 70.14 per cent
in Khairagarh, 71 per cent
in Dongargarh, 71 per cent
in Dongargaon, and 72 per
cent in the Khujji con-
12 were reserved for Sched-
Congress leaders P L Punia and
Bhupesh Baghel alleged rigging and
port — land, air and water,” he said.
The PM said Varanasi was one of
the 100 inland waterways projects that
his government was developing at an
estimated cost of ~50 billion. It would
comprise nearly 20 MMTs along the
route between Varanasi and Haldia.
“The waterway will allow the state farm-
ers to transport their products, while
millions of small and medium enter-
prises in Uttar Pradesh can export their
value-added products,” he said.
Earlier, he received the country’s first
container cargo of Independent India
that sailed from Kolkata on October 30,
carrying food and snacks of PepsiCo in
16 containers.
More on www.business-standard.com
(With Bloomberg inputs)
https://www.estore33.com/
Telangana election
process begins
The notification for polls to 119-member
Telangana Assembly was issued on
Monday. The state is going to polls on
December 7. The election process gets
underway with the filing of nominations
from the day of issuance of notification.
The last date for filing of nominations is
on November 19, while the final list of
eligible candidates in the fray will be
announced on November 22. BS REPORTER
malfunctioning of electronic voting
machines, or EVMs, in some places. The
Election Commission (EC) rejected the
allegations. There were sporadic inci-
dents of violence.
As for the PM’s speech, it was a rare
reference to demonetisation by him in
recent days. The second anniversary
Prime Minister Narendra Modi at the country’s first multi-modal terminal
along the Ganga during its inaugural function, in Varanasi, on Monday PHOTO: PTI
of note ban on November 8, 2016, was
observed as black day by Opposition
parties and marked by protests.
Congress spokesperson Abhishek
Manu Singhvi said the PM’s comment
on the Congress leadership being out
on bail needed to be ignored with the
contempt it deserves. “Modi is the
‘emperor of untruth’, and demonetisa-
tion disastrous for the economy. Now
he is indulging in spreading lies to con-
ceal his black deeds,” Singhvi said.
In his speech, Modi said the Congress
“politics begins and ends with one fam-
ily, while our politics begins from the
huts of the poor”.
“They (the Gandhis) want an account
of demonetisation. It was due to demon-
etisation that fake companies were iden-
tified. And because of that you had to
seek bail. Why do you forget that it was
due to the note ban that you had to seek
bail,” the PM said.
MUMBAI | TUESDAY, 13 NOVEMBER 2018
BoI posts net loss of ~11.5 bn
ADVAIT RAO PALEPU
Mumbai, 12 November
Bank of India (BoI) has posted a
net loss of ~11.56 billion for the
second quarter (Q2), as against
a net profit of ~1.79 billion in the
same period last year. It has
been a challenging year for the
bank, having been placed
under the Reserve Bank of
India’s prompt corrective
action framework last
December.
The bank's management
said the loss is largely on
account of higher provision-
CIL Q2 profit jumps UCO Bank’s
eight-fold to ~31 bn Q2 net loss at
~11.3 billion
CIL’s production for the period stood at 119.6 million tonnes
PRESS TRUST OF INDIA
New Delhi, 12 November
Coal India on Monday posted
an over eight-fold rise in con-
solidated net profit to ~30.85
billion for the September
quarter. The PSU major had
reported a net profit of ~3.7 bil-
lion in same quarter of 2017-18,
it said in a BSE filing.
Total income for the quar-
ter increased to ~242.1 billion,
over ~191.8 billion in the cor-
responding period a year ago.
Consolidated expenses of
the company during the
https://t.me/TheHindu_Zone_official
N Q2 SHOW N
ing against investments and
loans, delays in bad debt
recoveries and regulatory
restrictions on certain prac-
tices.
Dinabandhu Mohapatra,
managing director and chief
executive officer of BoI, said,
“Though capital challenges are
there, during the first half of this
year we have gone for capital
maximisation and low capital
consuming asset build-up. As a
result, our risk weighted assets
have reduced from ~3.17 trillion
in Q2 FY2018 to ~3.06 trillion at
the end of Q2 FY2019. The CASA
September quarter rose to
~190.91 billion from
~181.44 billion a year ago.
CIL’s production for the
period stood at 119.6 million
tonnes (mt), as against
113.04 mt last year.
CIL, accounting for over 80
per cent of the domestic coal
output, had said it is opti-
mistic about an aspirational
production target of 652 mt
for FY19.
Shares of the company
closed at ~264.05 apiece on
the BSE, down 1.55 per cent
from their previous close.
1
deposits have grown from 39.01
per cent in September 2017 to
41.44 per cent as of September
2018, which has reduced our
cost of funds."
Gross advances, globally,
have declined from ~3.9 trillion
in Q2 FY2018 to ~3.76 trillion at
the end of Q2 FY2019.
Domestic advances have
grown 10.1 per cent
from ~2.78 trillion in Q2 FY2018
to ~3.06 trillion at the end of Q2
FY2019. BoI’s stock price
closed at ~87.25 on the BSE on
Monday, down 4.85 per cent
from last Friday.
NAMRATA ACHARYA
Kolkata, 12 November
UCO Bank registered a net loss
of ~11.36 billion in the second
quarter (Q2), on account of ris-
ing bad loans. The bank had
registered a net loss of
~6.22 billion in the year-ago
period and ~6.33 billion in the
first quarter this fiscal year.
Net provisions nearly dou-
bled in the last quarter on a
year-on-year basis, as total
provisions stood at ~16.42 bil-
lion in the last quarter, against
~8.64 billion in the same peri-
od last fiscal. Provisions for
NPAs stood at ~14.10 billion in
the last quarter, against
~13.23 billion in the same peri-
od of the last fiscal year.
Gross NPA as a percentage
of total advances of the bank
touched 25.37 per cent at the
end of the last quarter, against
19.74 per cent in the same
period of the last financial
year. Net NPA stood at 11.97
per cent at the end of Q2 of
FY19, against 9.98 per cent in
Q2 FY18.
https://t.me/pdf4exams
10 ISSUES AND INSIGHTS
>
It’s the expenses, stupid!
Air India’s revival plan will depend critically on its ability to cut its annual expenses bill
OUT OF THE BLUE
ANJULI BHARGAVA
E
ven as private carrier Jet Airways
struggles for survival, a new revival
plan for Air India is in the works.
The whole idea has such a tired feel to it
that I don’t blame everyone I tried talking
to about it begin the conversation with a
yawn: Here comes the crazy journalist to
trouble us this morning with something
Money supply likely to be tighter in 2019
Every opinion poll and assembly result from here onwards, not to mention Rafale, CBI etc. could cause volatility
FRONT RUNNING
DEVANGSHU DATTA
I
nvestors drew comfort from the
fall in crude prices. That in turn,
led to a strengthening of the rupee.
Results across banking also indicate
that there has been some headway in
combating non-performing assets
(NPAs). But the confrontation between
the Reserve Bank of India (RBI) and
the government continues, and there
are new worries about global growth
slowing down, and about the implica-
tions of possible changes in political
equations both in the US, and in India.
The US mid-term elections have
given the Democrats control of the
House of Representatives (HoR, equiv-
alent to the Lok Sabha). This means
new dangers to the Trump govern-
ment since an impeachment motion
can be brought in the HoR. While the
Republican-controlled Senate is
unlikely to vote for the President’s
ouster, he will be under more pressure
and may react unpredictably.
As of now, the crude market has
discounted the new Iran sanctions
with India, one of eight nations that
have conditional waivers to trade with
Half the top listed cos employ less than 7% women
MAHESH VYAS
O
nly 20 per cent of all the perma-
nent employees of the top listed
companies of India are women.
Men dominate the workplace in corpo-
rate India. Evidently, securing a place
for women on the boards of listed com-
panies by regulation has not helped in
improving the share of women employ-
ees in companies.
Sebi regulations require that the
board of directors of all listed compa-
nies should contain at least one woman.
This regulation has been in force since
October 2014.
As per Sebi’s Listing Obligations and
Disclosure Requirements (LODR), com-
panies need to disclose the gender-dis-
tribution of their permanent employees
in their business responsibility report.
Statistics available from such listed
companies provide stark evidence that
the gender-distribution of employment
in the most organised sector is quite
skewed against women. And, if you go
strictly by official statistics, the top list-
ed companies are doing worse than the
rest of the country in so far as gender-dis-
tribution of employment is concerned.
Here is why. According to the NSSO,
female labour participation rate on a
primary and secondary status basis for
persons in the age group 15 to 59 years
was 33 per cent in 2011-12. In urban India
this ratio falls to 22 per cent. We would
have expected corporate India to do
much better than this. But, evidently, it
does not.
We do not have many enterprise-lev-
el data sources that give us the distribu-
tion of employment by gender. The most
recent enterprise-based data on employ-
we know ain’t happening anytime soon,
if ever. The beauty of Air India is that no
one has a stake in it really, barring its
25,000-odd employees who are so used to
working on their own terms that they
may actually have something to lose if it
goes under or is sold.
Well, I’m not one to give up so I did
manage to chat with half a dozen or so
relevant and informed sources. Those
who may have a clue on how the future
might unfold. To be honest, actually
nobody including the minister in
charge actually knows that but every-
one is willing to hazard a guess.
I’ll begin with the facts. The failed
sale attempt is a matter of much regret
— at least in theory and on paper. I am
convinced no government official, min-
ister or bureaucrat actually wants to see
the airline sold but they insist they do.
There are touches of regret — that the
terms of the deal on offer were skewed
the Islamic Republic. This has led to a
15 per cent fall in crude prices. There
are even fears that oil could slide into
a bear market if global growth tanks
due to the Trump Trade War.
However, several key OPEC nations
could go along with the Saudi stance of
cutting crude production to ensure
prices stay high. The US won’t mind
high oil prices. It is the world’s largest
oil producer but US oil extraction is
also expensive.
The US Federal Reserve held rates
at its latest policy meeting but indi-
cated it is braced to hike again in
December. It will also continue with its
Quantitative Tightening, cutting down
the size of its balance sheet. This will
mean tighter money supply. The
European Central Bank is also likely to
taper its ongoing quantitative easing
programme in December-January.
Money supply is likely to be tighter
through 2019 unless growth falls off a
cliff and central banks change stances.
Meanwhile, the RBI and the gov-
ernment are still “discussing” their
relationship. Forcing a confrontation
by invoking Section 7 of the RBI Act
to demand the central bank transfer a
large chunk of its Reserves may also
trigger a resignation from the
Governor. The RBI Board meeting on
November 19 could be crucial in
resolving this situation. The demand
for higher RBI dividends has also led
to questions about a overshoot of the
fiscal deficit, even though lower
crude prices will reduce the current
account deficit.
The “Twin balance sheet problem”
of massive NPAs and corporate losses
could be moderating, going by the Q2
results. Most banks reported a decline
ON THE JOB
ment released by the government for
example, the EPFO data, does not pro-
vide gender-distribution. Disclosures
based on Sebi’s disclosure requirements
are therefore the only enterprise-wise
data on employment by gender.
Four hundred and fifty companies
disclosed information on gender dis-
tribution of employment during the
fiscal year 2016-17. In 2017-18, so far,
we have noted such disclosure in 347
companies. When we combine these
two, we find 509 unique companies
that disclosed the gender-distribution
of employment during either 2017-18
or 2016-17.
Using only the latest available infor-
mation for each of these 509 companies
we find that they employed a total of 5.6
million persons. Of these, only 70 per
cent or 4 million were permanent
employees. The gender distribution is
available for these 4 million employees.
And, this distribution indicates that only
0.8 million of these 4 million (or 20 per
cent) were women.
The average share of women in
employment of these companies at 20
per cent is skewed by the larger compa-
nies that employ more-than the aver-
age proportion of women.
Tata Consultancy Services, the
largest employer (0.4 million) in this set,
employed 35 per cent women. Infosys,
the third largest employer in the set,
employed 36 per cent women. Tech
Mahindra the sixth largest employer,
employed 37 per cent women.
State Bank of India that takes the
place of the second highest employer,
engaged 24 per cent women.
The median proportion of women
https://www.estore33.com/
and impractical — but there’s no blame
game here since, as I explained, nobody
is really accountable. We tried and
failed, so what ? At least we tried.
Two, the ministry of civil aviation
has promised to announce a revival
plan for the carrier this month, as part
of the original privatisation plan.
There is the proposal to remove ~290
billion of debt from the airline’s books
to be transferred to a special purpose
vehicle (SPV). The SPV would be able
to service and pay off this debt
through monetisation of the assets of
the airline — such as real estate, art
and so on. It is a bit like selling the
family silver to meet daily expenses
but that’s where it is at. This will mean
a reduction of interest payouts of
around ~30 billion from the present
books, if one assumes an annual inter-
est rate of around 9-10 per cent.
The revival has two other planks.
STEEP FALL
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Current (Nov 9, ‘18) Previous (Oct 26, ‘18)
Nifty value
Index PE
Index dividend yield
Index book value
USD INR (RBI ref rate)
FII net equity buys/sales (Nov 1-9) (~ bn)
DII net equity buys/sales (Nov 1-9) (~ bn)
* = Oct 1-31 Net equity buys/ sales
NB FIIs Sold net debt of ~99.8 bn (Oct) & bought net debt of ~45.57 bn (Nov 1-9)
in bad loans to advances ratios in Q2,
according to a new report by CARE
Ratings. The rating agency says NPA to
advances peaked in the fourth quarter
of 2017-18 at 10.16 per cent. It moder-
ated to 9.41 per cent in Q2 according to
CARE’s estimates.
Provisions for bad loans had
peaked in Q4 , 2017-18 (Jan-Mar 2018)
at ~1.23 trillion for a sample of 30
banks. Provisions in Q1, (Apr-Jun 2018)
employees is much lower at 7.2 per cent.
This means that half the companies do
not hire more than 7.2 per cent women.
This, perhaps, is a bigger reflection of
the bias against women in employment
even in large listed companies.
Further, the skewness in the distri-
bution is a lot more stark than what even
the median describes. Only a quarter of
the companies in this set had a propor-
tion of women employment greater than
18 per cent. The mean was skewed away
even from the top quartile. This shows
that the IT companies listed above are
among the very few companies that have
a reasonable proportion of women
employed. Only 10 per cent of the com-
panies had a women-employment pro-
portion of over 31 per cent. And these few
companies have skewed the overall aver-
age to 20 per cent.
Textiles, and in particular readymade
garments companies, are the more
intensive employers of women. Five of
the top 10 major women-intensive
employers were textiles companies. 81
per cent of the 13,424 permanent
employees of KPR Mills were women,
78 per cent of the 18,801 permanent
employees of Page Industries (a gar-
ments company) were women, 74 per
cent of the 23,003 permanent employees
of Gokaldas Exports (a garments
exporter) were women, 50 per cent of
the 20,508 permanent employees of
Aditya Birla Fashion and Retail are
women and 44 per cent of the 14,720
permanent employees of Bombay Rayon
Fashions were women.
The database being created from
these new disclosures is young still.
But, there is tremendous scope for
improvement to help us understand
employment behaviour of individual
companies. It would be useful if the
Sebi or the MCA expand the scope of
the regulations to make it mandatory
for all companies to reveal such infor-
mation. Further, the gender-distribu-
tion should be revealed even for con-
tractual employees.
The author is managing director and CEO,
Centre for Monitoring Indian Economy P Ltd
https://t.me/TheHindu_Zone_official
MUMBAI | TUESDAY, 13 NOVEMBER 2018
Now Air India has operated for several
decades like money grows on trees. It
has also displayed scant regard for how
money is spent. Almost everyone I spoke
> CHINESE
to including its own senior officials
agreed that like any good ol’ Maharaja,
One is to increase the present yield by profligacy runs in its fabric. If it brings in
around 5 per cent and the other is to cut even one or two of the principles of oper-
costs by around 5 per cent. Both these ation followed routinely by the other
could help the airline save close to ~10 commercial airlines, it can save not just
billion each and this coupled with the 5 per cent but even 10 per cent of its cur-
reduced interest burden could help the rent yearly expense of ~260 billion. Even
carrier keep its nose above water. from the outside, I can tell you at least 10
Therein lies the rub. Increasing yields areas where the airline can cut costs
by 5 per cent is to my mind more of a including rationalising routes and reduc-
dream that almost all airline chiefs in ing the salary bill by trimming numbers.
India today hope to turn to reality. But it’s A saving of ~25 billion annually on this
more a chimera than anything else. With front alone is not an impossibility.
competition on both domestic and inter- But it requires — like everything
national fares intense and intensifying, else — some common sense and a huge
increasing yields is not something in Air will, neither of which the airline’s man-
India’s or anybody else’s control. Pinning agement is famed for. A former avia-
its hopes on something as unlikely as tion secretary I spoke to said that he
this is a bit like expecting its 25,000-odd had lost count of how many revival
recalcitrant employees to suddenly plans had been drawn up for Air India
adopt rules, procedures and norms like but all had amounted to little as can be
the Indian Army rank and file. I’d advise seen from where we find ourselves
everyone to forget about it! today. He didn’t see how this one
So the hope is only one: cutting costs. would be any different.
es), increased 12.5 per cent from
~185.86 billion a year ago to ~209.06
billion in Q2FY19. SBI also recorded
exceptional gains of ~15.6 billion from
a stake sale in SBI General Life
Insurance, and a 26 per cent stake sale
in the Merchant Acquiring Business
to a subsidiary. The real good news
was that net NPAs declined to 4.84 per
cent of advances from 5.29 per cent of
advances as of Q1. Provisioning for bad
Nifty: Sharp recovery on low volumes.
loans dropped to ~120.92 billion, down
from ~165.41 billion a year ago.
Resistance at the 200 DMA (10750)
Political equations are now start-
ing to have an impact. Five state
assembly elections in the next few
weeks will indicate how much the
mood has changed since 2014 and
investors will be looking forward to
Value Equations gauge outcomes in the General
Elections in April-May 2019. Every
Change %
opinion poll and assembly result from
10585.2 10030 5.54 here onwards, not to mention Rafale,
25.46 24.12 5.56 CBI etc. could cause volatility and that
1.25 1.34 -6.72 will tend to dominate news cycles and
3.35 3.19 5.02 perhaps, spook investors.
72.98 73.46 0.65 Technically speaking, it’s worth
2.15 *-108.25 sounding a note of caution. The mar-
0.40 *260.34 ket indices are up over 5.5 per cent in
the past fortnight. But this is on very
low volumes. Foreign portfolio
investors have been net positive but
the contributions are tiny and
reduced to ~576 billion and in Q2 (Jul- Domestic Institutions have also made
Sep 2018), further reduced to ~507 bil- tiny net contributions. The market
lion. Big players such as the State Bank indices are below their respective 200
of India (SBI), ICICI Bank and Axis Day Moving Averages (the 200 DMA is
Bank saw reductions in NPA ratios. about 10750 for the Nifty) and will face
This is heartening. high resistance. In plain terms, there
Incidentally SBI claimed a turn- was a lot of buying at 10700-10800
around with a profit in Q2, (July-Sep Nifty. Short-term traders will cut their
2018) after reporting losses in the three losses by selling if those levels are hit
previous quarters. Net interest income again. Fresh buying in high volumes
(NII), (revenue minus interest expens- will be required to absorb that selling.
> LETTERS
Don’t threaten the RBI knowledge and understanding of the
product for sale. The frontline staff,
trying to sell the product, knows little
about the comparative advantages of
products offered by competition.
Though it is mandated that persons
selling financial products have to be
certified, the rule is usually not fol-
lowed.
Some recommendations of the Bose
Committee have been implemented --
such as, elimination of upfront com-
missions on mutual funds. Only trail
commissions are now allowed which
will accrue to the seller, only after a
year. This has made selling of mutual
funds less attractive as commission
will flow in only after a year, if the
money remains invested. The churn-
ing of portfolios, a cash cow for agents,
will also be stalled. Now that income
The ill-conceived demonetisation and on a sale is deferred, attention will
poorly implemented Goods and shift to insurance products. India is
Services Tax (GST) hit the economy grossly under-insured. The primary
very badly and the impact is still being objective of buying an insurance poli-
felt in a number of sectors while inad- cy is to provide a safety umbrella for
equate employment has been gener- family members in the unfortunate
ated. The government also did little to event of the death of the bread winner.
substantively reform public sector Efforts should be made for the pol-
banks (PSBs). To bridge the fiscal icy amount that will accrue to be large
deficit gap, it has extracted extraordi- enough to enable the family to enjoy
nary dividend from profit-making the same lifestyle they are used to
public sector undertakings. Now this when the policyholder was alive. But
open rift with the Reserve Bank of most policies that get sold will not pro-
India on the regulatory treatment of vide such a safety net. A majority of
weak PSBs, dividend payable by the the policies hawked today are premi-
RBI and transfer of a major portion of um guzzlers with only a paltry sum
the apex bank’s reserves to the gov- assured on death. Most agents do not
ernment, moving payment system reg- profile customers properly but will
ulation from the RBI and putting polit- push products they have been man-
ical activists on the RBI Board are dated to sell.
attempts to weaken the central bank For more than a decade we have
financially and erode its operational
autonomy. This does not augur well > HAMBONE
for the economy and the country. Any
onslaught on the functioning of
autonomous institutions is not wise.
Arun Pasricha New Delhi
Mis-selling of products
“Rampant mis-selling of financial
products’’ by Sanjay Kumar Singh
(November 12) is a timely article.
One of the main reasons for mis-
selling is the seller’s own lack of
1
WHISPERS
Dealing with monkeys
On Monday, the Lok Sabha Secretariat
issued an advisory to visitors and its
staff on ways to protect themselves
from monkeys roaming in the
premises. The set of dos and don'ts
include directives such as "do not
make direct eye contact with
monkeys", "do not cross the path
between a mother and her infant" and
"do not tease or irritate the monkeys.
Leave them alone and they will leave
you alone", among others. It also
urged people to "not get scared if a
monkey makes a 'kho-kho' noise as
normally, it is a bluff."
Mixed signals from Kushwaha
Rashtriya Loktantrik Samata Party
president Upendra Kushwaha
(pictured) met Opposition leader
Sharad Yadav in New Delhi on
Monday. Kushwaha, a Union minister
whose party is an ally of the
Bharatiya Janata Party (BJP) in Bihar,
has been giving mixed signals on his
continuation in the BJP-led National
Democratic Alliance. Yadav had
severed ties with Nitish Kumar after
the Janata Dal (United) [JD (U)] chief
joined hands with the BJP last year.
Kushwaha has expressed his
reservation about BJP president Amit
Shah's proposal that his party and
the Ram Vilas Paswan-led Lok
Janshakti Party contest fewer seats in
2019 compared to 2014 so that
Kumar’s JD(U) could be allotted as
many seats as the saffron party
fights. He has also accused his former
mentor and Bihar Chief Minister
Nitish Kumar of humiliating him.
Yes to bahu, beta; no to bhai
Veteran Bharatiya Janata Party (BJP)
leader and Madhya Pradesh cabinet
minister Kusum Mehdele is upset and
she made it known on the social
media. This came after her brother
Ashutosh Singh Mehdele was denied a
party ticket to contest the coming state
Assembly elections while "bahus and
betas of other party leaders" were
given tickets. She dropped a Twitter
bomb: "...Is this the BJP of Deendayal
Upadhyaya and Shyama Prasad
Mukherjee?" Mehdele is a four-time
MLA from the Panna constituency.
had the new generation private sector
banks selling insurance. Horror sto-
ries of mis-selling have emerged based
on complaints. Now the nationalised
banks have also jumped on to the
bandwagon of selling insurance. Most
of the customers of the nationalised
banks will be more gullible than that of
the new generation private sector
banks. The chances of mis-selling to
these customers is all the more likely.
Antidote to mis-selling has to be
administered before it is too late.
K V Premraj Mumbai
A walk for peace
The 100th anniversary visuals of the
Armistice Day in Paris were a reminder
of the constant quest for peace among
warring humans who are split into
nations. In both the World Wars,
Germany was the enemy pitted against
a group of nations. Angela Merkel, rep-
resenting the vanquished nation, nev-
ertheless walked the solemn paces to
the venue as the other world leaders in
a gesture of universal peace and broth-
erhood. Strange that US President
Donald Trump, the leader of the free
world, skipped the short walk.
Ceremonies like these carry a certain
significance and leaders need to keep
this in mind.
R Narayanan Navi Mumbai
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone
number
BY MIKE FLANAGAN
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>
OPINION 11
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Volume XXIII Number 64

ILLUSTRATION BY AJAY MOHANTY
MUMBAI | TUESDAY, 13 NOVEMBER 2018 for NBFC’s to access. Healing at the long end will take
time. The infusion of liquidity by the Reserve Bank of

More questions on Rafale India (RBI) has definitely helped the normalisation,
and this will need to continue.
There was a very large bunching of short-term debt
The government must provide the answers repayments in the months of October and November.
The October debt cliff has been navigated successful-

A
s more and more details on the controversial Rafale aircraft deal ly, with no defaults. It is likely that even November will
become public, the government’s continued silence on the pur- be seen through, after which the next big test is March
chase of 36 fighter aircraft from France in September 2016 is baf- 2019. The liquidity concerns seem to have been
addressed. The NBFC majors have been able to roll over
fling. Most recently, a three-part series in this newspaper has
or repay their obligations. They have passed this stress
drawn extensively from the aborted 2007 tender (Request for Proposals, or test. The worst case fears of the market of there being
RFP) for 126 Rafale fighters to show how all the four issues which the gov- a liquidity crisis have thankfully not come to pass.
ernment claimed as new in the 2016 deal was already there earlier. For exam- However, all NBFCs will henceforth need to keep larg-
ple, the government has argued that India-specific enhancements have raised er liquidity buffers. The market and rating agencies will

More thoughts on
the Rafale’s price. But the 2007 RFP contains all of these elements. Also, con- demand it. They will also need to be more conservative
vis-à-vis asset liability mismatches. One should also
trary to the government’s argument, the RFP stipulates the supply of weapons,
expect regulatory intervention on defining what con-
along with the first 18 aircraft. The same is true for other issues such as tech- stitutes an acceptable asset-liability mismatch (ALM).
nology transfer and spares and logistical guarantees. The government must All of this will impact profitability. ALM and gearing,

the NBFC crisis

now explain why the per-aircraft price that India agreed to in 2016 was sig-
nificantly higher than the price that French vendor, Dassault, quoted in
response to the 2007 tender, even though the terms, conditions, and aircraft
configuration in the 36-Rafale deal in 2016 were almost identical to the 2007
RFP. Explanation is also needed for the defence ministry’s sudden decision
to quietly change government oversight of offsets that absolved it from its func-
tion of pre-vetting and clearing offsets.
Prime Minister Narendra Modi must also explain how the decision was
two levers to optimise return on equity are both going
to be constrained going forward.
Taking a step back, this was never going to be a
Lehman type solvency crisis for India. The housing
finance companies have leverage ratios of 7-8, and the
Resolving this crisis of confidence requires either more granular other major NBFCs have leverage ratios of between 4
and 6. This is not Lehman, wherein the banks had
information or getting independent confirmation of asset quality leverage ratios of 20-30, and were dealing in complex
derivatives. On asset quality, fears remain over real

I
arrived at to reduce the number of Rafale fighters being procured from 126 (six t has been two months since Infrastructure Leasing
and Financial Services (IL&FS) first defaulted on its
squadrons) to merely 36 fighters (two squadrons). On the one hand, Defence
debt-market obligations. That default has thrown
Minister Nirmala Sitharaman and Finance Minister Arun Jaitley have justi- debt and money markets into turmoil and created a
fied the hurried nature of this deal by citing an urgent need to make up the mini panic on some NBFCs (non banking financial
IAF’s fighter shortfalls. On the other, no rationale has been offered for reduc- companies), including housing finance companies. It
ing the number of Rafales to one-third. The defence procurement procedure has been a very tough period for NBFC stocks in par-
(DPP) requires every arms procurement contract to begin with the user serv- ticular and the equity markets in general.
What have we learned in the past two months?
ice (in this case, the IAF) specifying the numbers and capabilities it requires. What is the way forward?
That process was quite clearly abandoned in the inexplicable hurry to conclude Firstly, the government superseding the board of
this deal. Among those left out of the process was the IAF, in whose name these IL&FS was probably the right response
decisions were being taken. and it did manage to calm the situa-
A look at the 2007 RFP also reveals that India lost out badly in replacing tion. It gave IL&FS breathing room
a contract that involved building most of the fighters in the country for one and hopefully allowed the preserva-
tion of asset value at the subsidiary
that involved building them abroad. The former arrangement catered not just level. However, the issue has also now
for maintenance, repair and overhaul of the Rafale during its 40-year service acquired a political dimension
life, but also for the cost of transferring a host of specified technologies, set- because of the takeover. Government-
ting up a manufacturing line in India, and developing a chain of vendors that owned institutions such as State Bank
would have galvanised domestic defence aerospace manufacturers. The 126- of India (SBI) and the Life Insurance
Corporation of India (LIC) may now
Rafale deal even included the cost of operating the six Rafale squadrons for
find it difficult to recapitalise IL&FS,
their entire service lives. So far, the BJP has fielded party spokespersons and and do not want to be seen as bailing
government ministers to answer the many questions swirling around the out a private company. In the absence
AKASH PRAKASH
Rafale. However, these functionaries, howsoever able, were simply not part of a takeover they may have found it
of the decision that was taken in the prime minister’s office in April 2015 to much easier to support a recap. In the
announce the Rafale purchase in Paris. Like in all democracies, the govern- absence of a recap the ultimate resolution may take
much longer. Any politicisation of an economic issue of
ment is duty-bound to account for the expenditure of public funds. It’s time
this magnitude is very dysfunctional.
for the prime minister to explain the Rafale deal. It still remains unclear how much of a haircut
IL&FS’ lenders need to absorb on their outstanding
debt. Will lenders to the holding company get any
they have lent to and the quality of the collateral. There
may be a move to club all the subsidiaries and give the
lenders a uniform haircut, with excess collateral at
one subsidiary being used to fund the deficit at anoth-
er entity — basically, pooling of all the exposures. It will
be fascinating to see which way this goes. It will be in
a way setting a precedent, as to how a bankruptcy of
this type is handled in all future cases.
The IL&FS case has made lending to holding com-
panies a non-starter. The risks are simply too great. No
one will want to be seen holding such exposures. The
initial fears that the losses and mark-
downs on IL&FS paper would mark
the end of debt and liquid mutual
funds seem to have been too hasty.
While there was a withdrawal of
~2,000 billion from these funds in
September, 25 per cent of these funds
returned in October, as investors
calmed down. I would expect more
funds to slowly come back in the com-
ing months, as there are few alterna-
tives available to high-net worth
investors and corporate treasurers.
The more aggressive funds, who were
trying to maximise yields by fully util-
ising all the permitted regulatory lim-
its on NBFC paper have lost assets, while more conser-
vative funds have gained. There also seems to have
been some consolidation, with the larger, more-estab-
lished fund houses gaining share from smaller rivals.
The short-term commercial paper markets have
reopened for non-NBFC issuers, and even some of the
estate developer exposure. Given the lack of granular
detail available, markets fear the quantum of expo-
sure, the extent of mark downs and who has this expo-
sure. Given the inter-linkages in the financial system,
these fears are infecting the perception of all wholesale-
oriented NBFCs. There is a general lack of confidence
on real estate exposures, and a strong perception that
there was ever-greening of loans and a movement of
troubled exposures from one balance sheet to anoth-
er to prevent non-performing assets (NPAs) surfacing.
With deleveraging of balance sheets, this ever-green-
ing and shifting of exposures will end. We are fighting
perceptions and whispers here. The only way for the
wholesale NBFCs to regain market confidence is to
provide more granular details on their developer expo-
sures. An alternative would be for the Regulators to
conduct a stress test of the asset quality of the major
players in this space. This would stop the rumours.
Markets need assurance that there is no time bomb sit-
ting in the books of one or two of the larger NBFCs with
significant real estate exposure. The rating agencies
have lost all credibility. We need someone else to give
us an independent stamp of approval on asset quality.
NBFCs have grown their developer exposures by more
than 50 per cent over the past two years, and while the
total real estate exposure of ~5 trillion cannot blow up
the system, it can severely damage the balance sheets
of one or two players. Given a general lack of under-
standing of the real estate lending business model,
and anecdotal evidence that high-end property is not
selling, investors fear the worst.
This is a crisis of confidence. You can only boost
confidence by giving more granular information or

Lessons from a life recovery at all? Depends on whether the excess collat-
eral at a specific subsidiary level will be allowed to be
transferred upstream to the holding company or not.
Learning from the illustrious career of T N Srinivasan Will the lenders to the individual subsidiaries be
allowed to firewall their exposures, and restrict their
best NBFC issuers are now hesitatingly coming back to
issue fresh paper. After the initial shock, markets are
now differentiating between NBFC issuers based on
leverage and asset quality. However, undoubtedly the
percentage of assets invested in NBFC paper will
getting external independent confirmation of your
asset quality. Otherwise time will heal, and the fears
and rumours will slowly dissipate but in the interim
certain more wholesale NBFC business models could
really suffer. Can they profitably thrive in an environ-

T
he sad news that T N Srinivasan, who was for long one of the pillars of exposure to the specific project they have collateral decline for all debt-market players, their investors will ment where they cannot raise even three-year paper at
the economics department at Yale University, passed away in Chennai against? In this case some lenders may have no haircut demand it. There are also likely to be regulatory competitive rates?
on Saturday should cause a stock-taking not just of his illustrious career on their exposures and others could have very large hits changes on these lines. While things are normalising
but also of the state of thinking about economic policy in India today. of up to 50 per cent, depending on the specific project in the short end, longer-tenure debt is still very difficult The writer is with Amansa Capital. Views are personal
Srinivasan, who was 85, was in the forefront of his field for more than six decades;
his first major work on the “choice of techniques” problem — what technological

Values and aberrations

choices are appropriate for developing countries — was published in 1961, at generis #MeToo movement, entirely spontaneous and
around the same time that Amartya Sen was also working on the same problem. leaderless, has been strong enough to dislodge
As with many others of his generation, Srinivasan moved back and forth effortlessly entrenched holders of asymmetric male power the
between the institutions of the Indian state — universities and the Planning world over. Women have electorally challenged

H
Commission — and economics departments in the West. This is worth thinking ere are a couple of questions, obviously the spectre of a flood of criminal immigrants not just increasingly successfully male bastions of political
rhetorical, pertaining to the Diwali just over: at election times. In Sweden and Germany, long the authority and have given a stinging reply to the Trump
about at a time when “foreign-educated” economists are being attacked as pro- Did crackers fall silent in your area after 10 European bastions of liberal democracy, Sweden Republicans by snatching the House of
viding recommendations that are considered unsuitable for India. Few could pm? And, did women aged between 10 and 50 man- Democrats and Alternative for Germany have made Representatives from them earlier this month. These
argue that Srinivasan’s policy advice was relevant and important, however. age to enter the Sabarimala temple when it opened significant parliamentary gains on anti-foreigner plat- developments would be far more potent in establish-
Together with Jagdish Bhagwati and Padma Desai, he was crucial in advo- briefly? That these Supreme forms. ing gender equality and justice than any law ever
cating market-friendly macroeconomic reforms from the early 1970s onwards. This Court edicts have been observed Such developments are seri- could.
in breach rather than compli- ous enough for some public intel- The all-too-frequent wanton acts of mass killings
argument remained a dissenting opinion for more than a decade until the con-
ance would seem to suggest that lectuals to conclude that they indi- by unhinged gun-wielding individuals in the United
tradictions inherent in India’s centrally planned and licence-ridden development our oft-proclaimed reverence for cate a decline of civilisational States have met with protests not just from the expect-
path eventually led to the 1991 reforms. Naturally, the underlying facts about the highest judiciary as the keep- values. Pratap Bhanu Mehta wrote ed quarters of liberals but young adults who witnessed
macroeconomic imbalances were the main driver of this change. However, the er of the faith is hollow. The rising “The America of Warren Court lib- these horrors. Their not-so-silent protests would more
power of argumentation of the reform advocates should not be discounted, either. tide of individual or majoritarian eralism and the Cold War sense of likely silence the powerful gun lobbies than could
They created the consensus and laid the framework for the academic work and the intolerance resulting in murder- global purpose was an aberration Congressional activism. The tide is already turning
ous rage was also evident in the in American history”, immediate- against Brexit isolationism, and the vision of a unified
white papers that were essential to the quick actions taken between 1991 and 1993.
same period: The horrific stran- ly following the Trump victory Europe may yet prevail. If India eschews casteism, it
Srinivasan himself focused particularly on the problems with India’s external gulation of a pregnant woman two years ago (The Indian Express, would not be because of the host of legal measures
sector. Through his work in the 1970s, he showed that Indira Gandhi’s controver- objecting to a fellow train-pas- ET CETERA November 11, 2016). The historian against it, but because more young educated Indians
sial rupee devaluation helped address an unsustainable trade deficit. In some sense, senger’s smoking and the Patrick French concurred in his see its utter irrelevance to modern living.
the 1991 reforms — in which the external sector was addressed first, alongside Tinsukia killings of five Bengalis SHREEKANT SAMBRANI column “The end begins now” on The Harvard psychologist Steven Pinker has per-
industrial licensing — reflected Srinivasan’s policy priorities. are not exactly one-off incidents. the same day. The angst of our suasively argued that violence in human nature has
We have been here before. own intelligentsia caused by events of the last four abated over millennia and we are now more enlight-
Yet, it could be argued that those reforms were incomplete, as fiscal reform
The historian, Dr Harbans Mukhia, had observed years is only too well-known. ened than ever before. Values take generations and
was not taken on board; factor markets were left largely unchanged aside from some in a perspicacious essay two decades ago that the One can understand the anguish at being chal- centuries to emerge and become rooted. They do so
liberalisation of finance, and the question of how to manage the building of infra- world over, development means a greater sense of lenged on one’s core values. But that should not war- not by coercion of law but by persuasion of logic
structure was largely set aside. Srinivasan himself began to take on the first of these, responsibility and self-control, while in India, the rant either a rethinking, much less their repudiation, and appeal to decency, coupled with compulsions of
fiscal reform, as an issue in the early 2000s, once again making pithy and acces- exact reverse appears to be happening. We seem to or a sense of an irredeemable loss. existence.
sible arguments against those who argued that quick enough growth meant that place pursuit of our personal or group interests above Human history is of evolution in desirable direc- Years and decades from now, the world will not
unexceptionable norms of decent behaviour. In our tions, but it is not without hiccups or even major remember a grumpy Donald Trump, the foremost
public deficits and debt were rendered unimportant. The product of these efforts
polluted atmosphere, physical and moral, this is a reversals at times. Even the foulest deeds have been champion of unbridled nationalism through his
to put public spending on the intellectual map of the time was the Fiscal major cause of concern, transcending narrow political corrected by all that is good and decent among America First doctrine, sitting through the centenary
Responsibility and Budget Management Act. and electoral considerations. homo culturis. The Nazis threatened the world order commemoration of Armistice Day on November 11. It
The careers of Srinivasan and the other giants of his generation — Dr Sen and Intolerance and the fear of the Other have raised like never before for a full 15 years. But the will instead recall the rousing exhortation of the
Dr Bhagwati above all — are a reminder that successful policy must be informed their ugly heads elsewhere in the world as well, and Holocaust notwithstanding, a kinder, gentler, more French president Emmanuel Macron on that occa-
by the work and arguments of academic-practitioners trained to world-class stan- not just in lands ruled by despots and autocrats. The tolerant world emerged where Nazism is the ulti- sion: “By pursuing our own interests first, with no
words of Emma Lazarus at the Statue of Liberty, “Give mate horror. Stalin and Mao held supreme power in regard to others, we erase the very thing that a nation
dards. Meanwhile, economists themselves must also seek to intervene in the pol-
me your tired, your poor,/Your huddled masses yearn- their countries, but like the czars and emperors holds most precious, that which gives it life and makes
icy debates that are relevant — and should, ideally, seek to develop the clarity, pre- ing to breathe free,/…Send these, the homeless, tem- whose successors they were, their legacy has long it great: its moral values.”
cision and rhetorical flair that were characteristic of Srinivasan’s writing. pest-tossed, to me” have symbolised the United Sates been effaced. Aberrations are transitory, values are permanent.
since its unveiling in 1886. Yet its present president, We have been witness to some remarkable changes
Donald Trump, openly panders to racism by invoking for the better even in this present dark period. The sui The writer is an economist

Taking stock of Sebi

BOOK REVIEW
SANJAY KUMAR SINGH
Today the Securities and Exchange
Board of India (Sebi) is held in reason-
ably high esteem. Its recent reforms are
widely credited with having galvanised
the large-scale participation of retail
investors in mutual funds. But things
were not always so hunky-dory. When
the author, then serving as chairman of
the Life Insurance Corporation of
India, was asked to take over as Sebi
chairman, its prestige had taken a
severe battering in the wake of a stock-
manipulation scam, locally known as
the Ketan Parekh scam. In this book,
Mr Bajpai recounts how he pulled the
regulatory body out of that mess.
The author writes with endearing
candour about the doubts that assailed
him initially over whether he was up to
the task. In the introduction, he also
explains why he waited for more than a
decade to write his memoir. The risk in
waiting, he says, is that the events of
the past may not have the same
salience in the minds of many readers
today. Nonetheless, he deliberately
allowed himself this cooling period to
be able to take a more dispassionate
view of the events of those times. An
honourable course, one would say, but
likely to find few takers in an age when
the dominant credo is to make hay
while the sun shines.
A regulator’s job entails standing up
to a variety of pulls and pressures exert-
ed by vested interests. Mr Bajpai shares
several examples of how he dealt with
them. When the dividend distribution
tax (DDT) was introduced in the 2002
Budget and companies tried to circum-
vent it for at least the first year, he
thwarted their efforts. The disinvest-
ment of ONGC in 2003-04 was another
instance when he had to take a firm
stand, this time against investment
bankers. A bidding process was fol-
lowed to choose the investment banker,
and the lowest bid came in at 7.5 basis
points. The mandate was given to a
consortium of bankers. Having bid at
low prices because all of them wanted
to win this prestigious issue, the
bankers then began to clamour to raise
the fee. This was denied. Then they
proposed that a prospectus must be
produced, for which they would charge
a fee of ~10 million. Again, the regulator
had to deny them this chance to make a
buck, since a prospectus is required
only for an initial public offering (IPO)
or a follow-on public offer (FPO), and
this was neither (it was only a stake sale
of a listed company).
A markets regulator often does not
have the luxury of time to make a
decision. One hair-raising instance
Mr Bajpai describes pertains to the
events of Bloody Monday. The mar-
ket reacted negatively to the news of
the United Progressive Alliance com-
ing to power with the support of the
Left parties, and tanked on May 17,
2004. Circuit breakers were applied
and trading halted, not once but
twice. The question then was
whether to reopen the markets for a
third time and risk a bigger fall. As
chance would have it, Mr Bajpai was
in Jordan for a conference and had
only 30 minutes to decide. After
weighing the pros and cons, he decid-
ed to go by the rule book and reopen.
Thankfully, the markets recovered.
When taking decisions under great
pressure, the best course, according
to the author, is to base them on
sound principles.
Many of the initiatives Mr Bajpai
took during his tenure are described
in detail here. He tried to reduce the
massive backlog of cases at Sebi. The
settlement cycle (number of days
after which the buyer receives deliv-
ery of shares) was reduced. Sebi also
raided brokers’ offices to curb dabba,
or off-exchange, trading and took
steps to reduce the misuse of partici-
patory notes, through which overseas
investors can trade in the Indian
stock market.
Mr Bajpai’s memoir will be useful
to anyone interested in a history of
Sebi’s growth and evolution. Many
readers will also find in it a useful
guide on how to manage an organisa-
tion. What should you do to stabilise
an important institution, especially
one that is in the intensive care unit?
How does a leader go about boosting
employee morale? Once the situation
has stabilised, how does he assess
the organisation’s strengths and
weaknesses, and chart the best
course for it? A Sebi chairman gets
only a limited tenure and must pri-
oritise what he wishes to achieve
within it.
After retiring as Sebi chairman, Mr
Bajpai headed a committee that pro-
duced a landmark report on how the
National Pension System’s reach can
be enhanced. Recently, his appoint-
ment to the reconstituted IL&FS
board was opposed by proxy advisory
firms because of his association with
companies like Kingfisher Airlines
and Financial Technologies, and he
resigned on November 1.
Nonetheless, his place as an institu-
tion builder is assured.
A GAME CHANGER’S MEMOIR
G N Bajpai
Portfolio Penguin
347 pages; ~599
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official

The Smart 1 QUICK TAKE: CAPEX WOES FOR INDIA CEMENTS

Investor
TSI P13
Shares of India Cements fell 6.13% on Monday. The
company had, on Friday, posted mixed results for the
TITAN TO
September quarter. While it will benefit from the REMAIN
MUMBAI |
TUESDAY, 13 NOVEMBER 2018
positive demand and price outlook, Motilal Oswal
Securities has cut its estimates due to higher interest
OUTLIER IN
costs and depreciation led by expansions FY19
WWW.SMARTINVESTOR.IN.FOR INFORMED DECISION MAKING <

Markets slide on oil,

election uncertainty
India’s reliance on FII flows reduces ROLE REVERSAL
FII flows as a percentage of FDI lowest since makethedomesticeconomyless
sensitive to external flows. Even
FII flows in equities ($mn)# FDI into India ( $mn)** (LHS)
2003; trend seen as positive for the economy 50,000 FII as % of FDI flows (RHS) 350
though it would not make India
326 immunetoflows,theimplications
JASH KRIPLANI
40,000
27,074 300 would be limited as compared to
Mumbai,12November 250 the past,” Desai said.
1,182 Experts say that though the
30,000

T
heflowsfromforeigninsti- 200 rising prominence of FDIs is
tutional investors (FIIs) 20,000 150 favourable, these flows need to

ILLUSTRATION: AJAYA MOHANTY

SUNDAR SETHURAMAN
Mumbai, 12 November
The benchmark indices fell
on Monday by nearly a per
cent — reversing the gains
made last week — as the rise
in oil price and election
uncertainty weighed on sen-
timent. Domestic investors
were seen booking profits
after a 5 per cent rebound in
the market, from its eight-
month low last month.
The Sensex fell 346 points
or 0.98 per cent to end at 34,813,
while the Nifty ended at 10,482,
down 103 points, or 0.97 per
cent. The India Vix index, a
gauge for market volatility,
shot up 9 per cent to 19.4.
Domestic institutional
investors (DIIs) were net sell-
ers to the tune of ~10.7 billion,
DOWNHILL
Sensex intra-day
Source: Exchange
until we have the outcome for
the 2019 General Elections.
The outcome of state elections
will be a cue to what could
happen next year. As of now, it
seems like a closely contested
fight in each state. It will not
be a clean sweep for either of
the parties,” Gaurang Shah,
chief investment strategist,
Geojit BNP Paribas.
into India have been thin-
ning,butthereisreasontocheer,
given the share of foreign direct
investments(FDIs)inoverallfor-
eign flows is gaining promi-
nence.
The shift in balance has
reduced the share of portfolio
flows into equities as a percent-
ageofFDItoitslowestlevelinthe
last 14 years.
Experts say this trend is
favourable for the domestic
economy as FDI money, unlike
FII flows, is less bound by short-
term gains and therefore less
volatile.“Thegoodnewsisthata
largepartofcapitalflowscoming
into India has moved to the FDI
route, which is less sensitive to
shiftininvestorsentiment,”said
Ridham Desai, Managing
DirectoratMorganStanleyIndia.
Alibaba’s $31-bn Singles’ Day
Echoing the sentiment,
Jyotivardhan Jaipuria, founder
and chief executive officer of
Valentis Advisors, said: “Money
cominginthroughtheFDIroute
tends to stay longer, creates new
capacities and jobs. Therefore, it
is more desirable.”
AsofAprilthisyear,FIIflows
as a percentage of FDI stood at 4
per cent, the lowest level since
the Reserve Bank of India (RBI)
startedcollatingthedatain2003.
From April onwards, FII flows
haveturnednegativefortheyear,
indicating that FDI has gained
even more prominence in the
overall scheme of things.
On a year-to-date basis, FIIs
have pulled out $5 billion from
equity markets.
WhilealargeinflowfromFIIs
could shore up the equity mar-
kets,largepull-outscanalsolead
to sharp volatility in currency
markets, consequently putting
pressure on the rupee.
6,701 be driven more towards the real
2,057 100
10,000 economy.
4 50 “At least 30 per cent of the
0 0 FDIflowstohavecomeintoIndia
2003 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘12 ‘14 ‘15 ‘16 ‘17 ‘18 has moved into growth sectors
*Excluding years when FII flows have been negative; #FII flows till April 2018; post-April flows turn
negative for CY18, ** RBI data available till August 2018 Data compiled by BS Research Bureau like e-commerce. Other sectors
thathaveattractedFDIflowsare
The combined FII pull-out Between 2003 and 2012, the non-banking financial compa-
from equity and debt markets FII flow as a percentage of FDI niesandrealestate.Iftheseflows
thisyearis$14billion.Therupee flow, on an average, stood at 165 are directed more towards sec-
has depreciated 12.4 per cent per cent. This means that for tors linked to real economy, the
against the dollar over the same every$100investedthroughFDI impact could be much larger,”
period. during this period, FIIs invested said Kunj Bansal, partner and
This volatility has a wider $165. chiefinvestmentofficeratSarthi
impact on the overall economy. Since 2013, this trend seems group.
“If you go back — excluding the to have reversed. Between 2013 Further,expertssaidthatthe
last five years — almost 80 per and 2017, the FII flow as per- scaleofFDIintoIndiaisstilllow,
cent of capital flows came centage of FDI has been hover- ascomparedtoothereconomies
through FIIs. Therefore, India ing around 30 per cent. So, for like India. With the right drivers
was over-reliant on capital mar- every $100 coming through the in place, there is huge scope for
kets to fund its balance sheet. FDI route, $30 comes by the way attracting even more FDI flows,
That led to volatility in econom- of FIIs. they added.
ic growth,” Desai added. “The rising share of FDI will
Mrs Bectors, Sansera Engineering get IPO nod

sales fail to cheer investors

while foreign portfolio
investors (FPIs) bought shares
worth ~8.3 billion, continuing
their recent buying streak.
Market participants said
the increase in oil prices fol-
lowing the Organization of the
Petroleum Exporting
Countries’ (Opec) decision to
cut supply dampened domes-
tic investors’ mood. Oil prices
jumped 2 per cent after Opec
said output could be cut by 1
million barrels per day.
“The run-up in the market
was mostly because of oil
prices falling. If there is a cut
in production, things will look
gloomy,” said U R Bhat, man-
aging director, Dalton Capital
Advisors.
Ahead of the supply cut
announcement by Opec, oil
prices had slipped into bear
market territory, sliding 20 per
cent from their four-year high
last month.
Experts said uncertainty
on the outcome of the polls in
five states, which kick-started
on Monday, are also a key wor-
ry for the market.
“Markets will be volatile
Barring five, all Sensex
constituents fell. Automobile
shares were the biggest losers,
followed by financials.
Tata Motors fell 4.84 per
cent, Hero Motocorp declined
3.8 per cent and Maruti Suzuki
fell 2.6 per cent.
Experts said investors
were concerned about the
growth of the domestic auto-
mobile industry, following the
spike in oil prices and tighter
regulations surrounding
insurance and emissions.
Shares of financial compa-
nies traded weak as investors
continued to fret over the fall-
out of the liquidity crunch.
Shares of HDFC fell 1.2 per
cent, Bajaj Finance 4 per cent
and Srei Infrastructure
Finance by nearly 6 per cent.
In a note, UBS said it
expects the issues in the finan-
cial sector to cause a general
liquidity squeeze in the near-
term. “While the improvement
in banks’ balance sheet might
help banks gain market share
in 2019, the overall credit con-
ditions are likely to see only
limited upside,” the note said.
MOXY YING
Hong Kong, 12 November
Monday’s meagre volume
across Asian stock markets
means one thing: everyone’s
waiting for solid news to trade
on before getting overly excit-
ed one way or another.
Most benchmarks in the
region posted moves between
0.1 per cent and 0.8 per cent in
either direction. A gauge track-
ing volatility in Japan’s Nikkei
225 Stock Average dropped for
a fifth straight session.
Even a $31-billion record
sales figure from Alibaba
Group’s Singles’ Day didn’t
give stocks a big lift (consumer
shares in the MSCI Asia Pacific
Index fell).
Bloomberg Opinion colum-
nist Tim Culpan said savvy
investors would do well not to
get caught up in the fluff and
hype of the famous sales event.
The one notable exception
was China — the Shanghai
Composite Index erased earli-
DULL RUN
MSCI Asia-Pacific Index
Source: Bloomberg
er losses to climb for the first
time in six sessions as Premier
Li Keqiang promised more
support for the private sector,
over the weekend. Its ChiNext
gauge of small-cap and tech-
nology stocks advanced 3.5 per
cent.
Apart from that, what solid
news are investors waiting for?
Corporate profit and econom-
ic growth outlooks are both on
top of their minds.
Everyone’s going to be
watching Asian tech behe-
moth Tencent Holdings (the
Biscuit-maker Mrs Bectors The two companies had bility and brand and provide
Food Specialities and auto- filed their draft papers with liquidity to its existing share-
components maker Sansera the regulator in August, seek- holders,” the company said.
beaten down T in the BAT Engineering have received ing its go-ahead to float initial Sansera Engineering’s IPO
complex), which is slated to
report its third-quarter results
markets regulator Sebi’s go-
ahead to launch initial share-
public offerings (IPO).
According to its draft
will see a sale of up to
17,244,328 equity shares by
this week. Analysts have sale offers. papers, Mrs Bectors Food’s IPO existing shareholders as well
trimmed their estimates with- Mrs Bectors Food and will see sale of shares to the as promoters.
out mercy — Goldman Sachs Sansera Engineering obtained tune of ~8 billion by existing “The listing of equity
cut its target price by 17 per- “observations” from the shareholders and promoters. shares will enhance our brand
cent, after CICC lowered its Securities and Exchange Linus, Mabel, GW name and visibility and pro-
projection by 16 pe rcent last Board of India (Sebi) on Confectionary, GW Crown Pte vide liquidity to the existing
week, shows data compiled by November 9 and November 12, Ltd and Anoop Bector will be shareholders. The listing will
Bloomberg. respectively, showed the lat- offering shares in the IPO. also provide a public market
There’s also the US CPI est update with the markets “Listing of the equity for equity shares in India,”
numbers on Wednesday, watchdog. shares will enhance our visi- Sansera Engineering said. PTI
which could move the green-
back and in turn impact mar-
kets in this region.
The docket this week also
includes a plethora of speech-
es by US Fed officials and retail
sales numbers that will pro-
vide an important glimpse
into the tone of economic
activity, inflation and fedspeak
through the end of the year.
Of course, if there’s any
new information, the US-
China trade war will also give
investors a reason to make
decisions.
BLOOMBERG

THE COMPASS

Strong volumes key to Britannia’s rich valuation

Led by double-digit volume growth, revenues grew 12.5% and net profit was up 16.1%
SHREEPAD S AUTE
With strong volume growth
in the September 2018 quar-
ter (Q2), Britannia walked the
path of many of its fast-mov-
ing consumer goods (FMCG)
peers.
The company clocked
double-digit volume growth
of 10-11 per cent, which was
on expected lines according
to analysts, helping the com-
pany post in-line numbers for
Q2 (announced on Monday).
This helped consolidated
revenue growth by 12.5 per
cent year-on-year (YoY) to
~28.5 billion in Q2, while net
profit increased 16.1 per cent
to ~3 billion.
But now, as the low base
effect wears out, the question
is whether this strong volume
show will continue.
First, given that Q2 was the
fourth consecutive quarter of
double-digit volume growth
by the biscuit manufacturer,
some analysts expect the vol-
ume to rise at slower pace
from here on.
Since the December 2017
quarter, Britannia has been
posting above 11 per cent vol-
ume growth; compared to low
single-digit volume growth
during first two quarters of
FY18.
Thus, with such a higher
base, some analysts believe
volume growth may slow to
6-7 per cent.
At the same time, what
should restrict the down-side
risk to volume growth is the
faster growth anticipated for
rural markets (30-35 per cent
of Britannia’s revenues) and
new launches.
Second, high input costs
amid implementation of min-
imum support price (MSP),
and higher prices of
milk/dairy products, among
others, are expected to war-
rant price hikes for margins
to sustain.
The management, too,
indicated that it witnessed
marginal price inflation in key
raw materials.
The company’s earnings
before interest, tax, deprecia-
tion and amortisation (EBIT-
DA) margin improved 100
basis points (bps) YoY to 15.8
per cent, mainly due to a
sharp 218 bps expansion at the
gross level, in the September
quarter.
Although Britannia has
strong pricing power, price
hikes could weigh on vol-
umes to some extent, given
the price-sensitive market.
Cost efficiency could also
provide support to
Britannia’s margins, but in a
limited manner.
The jury is out on how vol-
ume growth and margins will
pan out going ahead. But,
these are crucial given that the
Britannia stock has outper-
formed the Sensex as well as
many of its FMCG peers over
the past one year, aided by
strong volume and profit
growth.
For now, the Street seems
to believe that Britannia will
not disappoint. After decla-
ration of results on Monday,
the stock surged to close lit-
tle changed at ~5,754, even
as the markets fell.
The FMCG major now
trades at rich valuations of 46
times its FY20 earnings esti-
mate.

Shree Cement: Good show amid cost pressure

Easing of axle norms and railway rebate should lower expenses, say analysts
UJJVAL JAUHARI
In a seasonally soft period
impacted by monsoon and
amid cost pressures, Shree
Cement reported better-than-
expected profitability for the
September quarter (Q2).
This should ease the
Street’s concerns, given
cement realisations are likely
to improve after the festive
season as demand momen-
tum remains healthy. The
stock, which fell to its 21-
month lows last month, has
since risen 14 per cent and
should see more gains with
improving profitability.
Revenues at ~25.87 billion
were up 21 per cent year-on-
year and came ahead of
Bloomberg consensus esti-
mates of ~25.28 billion.
Cement volume growth
remained strong, growing 15.6
per cent year-on-year (YoY) to
5.64 million tonnes (mt), while
realisation improved 2.1 per
cent YoY (3.9 per cent sequen-
tially) to ~4,268 per tonne,
according to analysts’ calcu-
lations.
Better volumes and reali-
sations for the north India-
based cement maker helped
boost the top line. However,
cost pressures were also visi-
ble. With diesel prices up 24
per cent YoY (4.8 per cent
sequentially) and petcoke
surging 35 per cent YoY (3.6
per cent sequentially) in Q2,
fuel costs jumped by almost
half over the year-ago period.
Transportation costs, how-
ever, were curtailed and rose
10 per cent. The rise would
have been more but for the
easing of axle load norms, and
the company becoming eligi-
ble for railway freight rebate
under the Long Term Tariff
Contract scheme of Railways.
Rebate on eligible freight for
the October 2017-September
2018 period was ~280.9 mil-
lion.
Yet, adjusted operating
profit at ~5.33 billion was
ahead of expectations of ~4.97
billion; profit per tonne of
cement came in at ~946, says
Sanjeev Kumar Singh of
Emkay Global, better than his
estimate of ~785.
Power business volumes,
too, jumped 36 per cent YoY
led by strong demand, while
per unit realisation at ~4.5 was
better than ~3.5 in Q2FY18.
The company, however,
provided ~1.78 billion for its
exposure to the IL&FS group
and consequently reported
net profit of ~493.3 million.
Nevertheless, adjusted for
this provision, profit was
ahead of the estimates of ~1.88
billion.
Continuing with its expan-
sion, Shree Cement has pro-
posed capacity additions to
the tune fof 5.5 mt.
Analysts at ICICI
Securities, after the results,
said that they expect cost
pressures to decline (freight
cost to decline sequentially on
account of increase in load-
carrying capacity, stabilisa-
tion of fuel prices), and believe
the input price increase has
peaked out in power business.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official

.
MUMBAI | TUESDAY, 13 NOVEMBER 2018 THE SMART INVESTOR 13 <

> TODAY’S PICKS

Nifty
Titan to remain outlier in FY19
Current: 10,482 (fut: 10,505),
Target: NA
Exceptionalshowmaycontinueasitgrabshighershareoftheunorganisedsegment
Stop-long positions at 10,425. RAM PRASAD SAHU
Stop-short positions at 10,580.
Big moves could go till 10,650,
Mumbai,12November
D
10,370. A long 10400p (110), short espite a miss on margins for
10,300p (82) could gain 10-15 if the Titan Company in the
the index drops till 10,425. September quarter,
investors are not complaining. The
jewellery retailer had declared its
Bank Nifty results for the quarter after market
Current: 25,540 (fut: 25,585) hours on Friday; on Monday, its
Target: NA share price jumped a little over five
Stop-long positions at 25,475. per cent. It was pushed by robust
Stop-short positions at 25,700. revenue growth in that quarter
Big moves could go till 25,925, and, more importantly, a strong
25,225. Trend is negative. outlook for the second half of the
current financial year.
The reason the Street is not too
worried about its lower profit is
HPCL
the strong performance on sales,
Current price: ~225 in an environment where a num-
Target price: ~220 ber of other consumer goods com-
Keep a stop at ~228 and go panies are struggling to drive vol-
short. Add to the position umes. In the September quarter,
between ~221 and ~222. Book Titan's jewellery segment (80 per
profits at ~220. cent of its revenue) grew 28.5 per
cent (wholesale) over the year-ago
period. At the retail level, the com-
Tech Mahindra
pany indicated growth was even
Current price: ~725 stronger at 38 per cent.
Target price: ~740 Sharp outperformance, as oth-
Keep a stop at ~717 and go er larger jewellery retailers are
long. Add to the position expected to have grown at about 15
between ~733 and ~736. Book per cent. The higher growth in
profits at ~740. jewellery was on account of con-
tinued momentum in its Golden
Harvest plan (fixed monthly pay-
Adani Ports & SEZ ments), gold exchange pro-
Current price: ~329 grammes and market share gains
Target price: ~323 from the unorganised segment.
Keep a stop at ~332 and go
short. Add to the position Growth forecast
between ~324 and ~325. Book What is key is the positive man-
profits at ~323. agement commentary about the
DEVANGSHU DATTA sales growth in the second half of
2018-19. The company expects to
Target prices, projected movements in terms of next session, maintain 25 per cent growth, on
unless otherwise stated the back of market share gains,
launch of new collections and
stores. The company has
announced plans for 31 new
Tanishq stores in the second half,
after having added 14 (aggregat-
ing to 35,000 sq ft) in the first half.
While sales growth improved,
the margins did disappoint. This is
because the plain jewellery seg-
ment grew faster than the studded
jewellery one which fetches higher
margin. Analysts at JM Financial
estimate studded jewellery sales
grew 22 per cent; the plain gold one
rose33percent.Titanacquiredtwo
large stores from a franchise in
Hyderabad for ~2.5 billion and
STRONG JEWELLERY GROWTH
Q2 figures in ~billion Jewellery Overall
Sales 35.8 44.3
% change y-o-y 29.0 26.0
Ebit 3.92 4.56
% change y-o-y 7.0 4.0
Ebit margins (%) 10.9 10.3
Change in basis points -230 -220
Standalone numbers; Ebit: Profit before interest and tax Source: Company
margins of the segment to
improve, on the back of operating
The firm has
leverage and ongoing cost optimi-
announced
sation. For the eyewear business,
plans for 31
Titan expects strong volume
new Tanishq
growth (focus on lower value
stores in the
items) and hopes to breakeven at
second half,
the Ebit (operating profit) level by
after having
the end of the current financial
added 14
year.
(aggregating
While the stock’s valuation at
to 35,000
45 times the FY20 earnings esti-
sq ft) in the
mate is at a premium, brokerages
first half
believe the company deserves
this. Analysts at Motilal Oswal
Securities say the premium valu-
spending on marketing was higher ation is for a business that has
than usual in the quarter. A key perhaps the best revenue growth
one-off the Street will keep an eye potential among large-cap fast
on is the ~290-million write-off the moving consumer goods retail-
company took, given the ~1.45-bil- ers. The brokerage estimates 20
lion exposure to inter-corporate per cent annual average growth
deposits from the suddenly ill-liq- for jewellery, Titan’s largest seg-
uidIL&FSgroup.Thecompanywill ment, over the next five years.
furtherdecideontheexposureover This, coupled with the healthy
the next two quarters, once more margin outlook on operating
clarity emerges on the issue. leverage, higher share of studded
Among other businesses, jewellery and in-house manufac-
watches continues to post strong turing of eyewear frames, should
growth. It was 17 per cent in the percolate to the net profit level.
September quarter, with new
launches and products to fill gaps
in its portfolio. Analysts expect
DERIVATIVES STRATEGIES
Strong resistance
for Nifty in the
10,700-10,800 zone
DEVANGSHU DATTA
The market rebounded from a bottom (Nifty at
10,005), to hit a high of 10,645 this Monday before it
fell again. Volumes were low with little institution-
albuying.BothFPIs(foreignportfolioinvestors)and
domesticinstitutionswerenetpositivebutthequan-
tum of buying was extremely small. Breadth looks
poor,withadvancingstocksoutnumberedbydeclin-
ing stocks. Volatility is high.
The major indices are all trading below respec-
tive 200 day moving averages (200-DMA) and those
could serve as areas of resistance. Bond market
yields have eased down. The rupee has recovered
to ~72.90- 73/dollar.
Corporate results have just about met expecta-
tions. Crude prices dropped in the last two weeks.
India received a respite with a conditional waiver
from US sanctions versus Iran. The US-China trade
war continues but trade projections look better,
given lower crude prices.
The Nifty hit its all-time high of 11,760 in late
August and it retracted to a low of 10,005. The 200-
DMA is currently trending at 10,750, so it has been
completely broken. The rebound has set up rising
peaks, which is a good sign, but it stopped well
short of the 200-DMA.
The Vix continues to run FPIs and DIIs were
high, indicating fear is net positive but
there. Session volatility is the quantum of
high, with session high- buying was
low ranges of near 1.5 per extremely small.
cent. Breadth looks
The downtrend lasted poor, with
eight weeks and there advancing stocks
was a 14.9 per cent retrac- outnumbered by
tion off the peak, before declining stocks
the 6 per cent rebound in
the last two weeks. There
is strong resistance in the 10,700-10,800 zone. There
were high volumes when the Nifty was last in that
zone and there will be a lot of selling pressure to
absorb when it next hits those levels. For sustainable
bullishness, the index would have to move above the
200-DMA and ideally, beat 10,850. On the downside,
a fall below 10,000, could mean a deep dive till

Gifts from employers are taxable taxes.

Butnotallgiftstoprofessionalsare
taxable.Ifsomeoneoffersagiftina
personalcapacity,thenthetaxationwill
TAXATION ON GIFTS
| Employer to employee –
9,500-9,600 as a target.
The Bank Nifty slid till 24,400, well below its
own 200-DMA. The pullback went till 25,900 and
its now back at 25,540. A long November 29,
If an employee receives a present from a business acquaintance, it is tax bedifferent.Inthiscase,theywon’t Taxable* 24,500p (112) and a long 26,500c (69) has asym-
needtopaytaxonelectronicgadgets, metric premiums despite being almost zero-delta.
free unless items include jewellery, bullion & property, among others justlikethesalaried.Onlythoseitem
| Business acquaintance to
employee – Depends on It can be offset with a short November 22, 24,500p
includedinthelist(shares,bullion,etc) (50), short 26,500c (27). Net cost is 104. There could
TINESH BHASIN giftsandpaytaxonitbasedonhistax it,”saysNaveenWadhwa,achartered mentionedabovearetaxable,ifthe
the gift** be a huge payoff if the financial index moves by 3.5
slab.Usually,theemployerwilldeduct accountantwithTaxmann.com.Asan marketvalueofallgiftsreceivedina | Gift to professionals from per cent.
Surat-baseddiamondmerchantSavji thetaxatsourceonsuchperquisites,” employee,mobilephonesorother financialyearcross~50,000. clients – Taxable The Nifty is at 10,482. A long November 10,600c
Dholakiagiftedaround600carstohis saysChetanChandak,headoftax electronicgadgetsreceivedfrom Ifyoureceivegiftswhichareinthe (103), short 10,700c (65) costs 38, and pays a maxi-
employeesasDiwaligiftthisyear.Some research,H&RBlock. vendorsorclientswillnotattracttax. specifiedlist,youwillneedtodeclareit | Gift from friends, mum of 62. A long November 10,400p (111), short
employeesalsoreceivedflats Butifyouarean Thingsareslightlydifferentfor underthehead‘incomefromother acquaintance, and distant 10,300p (83) costs 28, and pays a maximum of 72.
andcash,sayreports. employeewhoreceivesa professionalssuchasdoctors,lawyers, sources’whenfilingreturnsandtaxed relatives – Depends on These are almost zero-delta. The trend seems neg-
Whileit’sgoodtohavea
YOUR MONEY giftfrombusiness charteredaccountant,andsoon. accordingly.Thisistrueevenifitis the gift** ative.
large-heartedemployer, acquaintances,there’s Section28laysdownwhatistaxedas fromafriendordistantrelative.Gifts
theonusofpayingtaxon somerelief.TheIncome- businessincomeandincludesthevalue are,however,nottaxableonlywhenthe | Gift from a ‘close relative’ –
thesegiftslieswiththe TaxActspecifiesalistof ofanybenefitorperquisite,whether personreceivesitfromcloserelatives. Not taxable
recipientemployee. itemsthataretaxableif convertibleintomoneyornot,arising TheIncome-TaxActsaystheseinclude Note: Close relative is as per the definition
Anygiftfroman receivedasgifts.This frombusinessortheexerciseofa spouse,siblingsandtheirpartners,
under in the Income-Tax Act
employertoemployeeis includessharesand profession. siblingsofspouseandtheirpartners,
taxableasperquisites,ifit securities,jewellery, Thefairmarketvalueofsuchitems brotherorsisterofeitheroftheparents *If the value of all gifts in a financial year is
crosses~5,000.Inthe archaeological receivedbyabusinessorprofessional oftheindividualandanylineal ~5,000 or more
incometaxreturn(ITR) collections,drawings, shouldbeaddedtothebusinessincome ascendantordescendantoftheperson **If the gift include specified items like
form,thesearetaxedunderthehead paintings,sculpturesoranyotherwork andtaxneedstobepaidonit.Giftsthat ofhis/herspouse.Also,ifyouare jewellery, bullion, cash, property etc, all
‘salaries’.Thelimitof~5,000isforthe ofart,andbullion.“Asanemployee,if professionalsreceiveinduecourseof gettingmarried,anygiftreceived such gifts such are taxable if their
entirefinancialyear.“Anemployee youreceiveanygiftotherthanthe businessaretaxabletoensurethatthey duringtheweddingisfreefromtax. aggregate value crosses ~50,000 in a
receivingthegiftofacarorhousehasto specifieditems,youdon’tneedto don’treceiveexpensivegiftsfrom financial year
considerthefairmarketvalueofsuch disclosetheminthereturnsorpayon clientsinsteadoffeesandtherebyavoid

COMMODITIES1
>

> PRICE CARD

Sugar exports come to India emerges major
As on Nov 12 International Domestic
------------------------------------------------------------------------------

Price %Chg# Price %Chg#

------------------------------------------------------------------------------

a halt as prices decline seed hub in Asia: Study

METALS ($/tonne)
PRESS TRUST OF INDIA
Aluminium 1,964.5 -3.7 2,263.7 -2.6 DILIP KUMAR JHA an Indian delegation visited New Delhi, 12 November
Copper 6,088.0 -0.5 6,530.4 -7.7 Mumbai, 12 November Bangladesh, which consumes 2.5-
3 mt a year. Also being considered India has emerged a major
Nickel 11,470.0 -15.9 12,210.2 -15.9

A
fter a bumper start, sugar are Taiwan, Indonesia and China. seed hub in Asia as 18 compa-
Lead 1,957.0 -6.5 2,153.9 -8.5 export from India has “The 850,000 tonnes of export nies out of 24 leading firms
stopped, due to a sharp contracts signed in the first month evaluated, have invested in
Tin 19,310.0 -1.3 20,167.4 -1.2 decline in the sweetener’s prices (of the sugar year) is itself a record. breeding and production
Zinc 2,556.0 0.1 3,073.1 -3.8 over two weeks. The government and the industry activities in the country,
Raw sugar on the benchmark are trying hard to export sugar as according to a latest study.
Gold($/ounce) 1,204.2* -0.6 1,331.1 -0.1 Chicago Mercantile Exchange much as possible,” said Prakash Both global and regional
Silver($/ounce) 14.1* -8.1 15.8 -7.7 (CME) for near-month delivery was Naiknavare, managing director seed industry players have
down four per cent to trade on (MD) of the National Federation invested in a big way to boost
ENERGY Monday at 12.8 cents/lb. This trans- of Cooperative Sugar Factories. crop yields of small holder
CrudeOil($/bbl) 70.2* -2.6 69.1 -2.4 lates into a ~1,000 a tonne fall. India has so far contracted for farmers in India, it said.
Following these reports of export NOT SWEET ANY MORE export of 650,000 tonnes of raw There are about 100 mil-
NaturalGas($/mmBtu) 3.9* 32.0 3.8 28.9 becoming unviable, refined sugar Year Quantity and 200,000 tonnes in white sug- lion small holder farmers in
AGRI COMMODITIES ($/tonne) in India (M-30 variety) declined by (`000 tonnes) ar, primarily to West Asia and Sri the country. They provide up
2.5 per cent to trade on Monday at 2012-13 350 Lanka. Considering the expected to 80 per cent of the food sup- Acsen HyVeg, There are about 100 inaccessible,
Wheat 214.9 -12.5 277.4 -3.5 ~33,100 a tonne in the spot whole- 31.5-32 mt of output for the cur- ply and helping them to grow Namdhari million small holder Verhagen added.
2013-14 2,130
Maize 195.5* -10.1 207.3 11.2 sale market at Vashi, Navi Mumbai. rent year and around 10.5 mt of more and more food is key to Seeds and farmers in the With regard to
With large stocks to clear, the
2014-15 1,090 carryover stock from the previous achieving food and nutrition Nuziveedu country. They provide intellectual prop-
Sugar 346.7* 9.8 455.1 -7.4 central government is offering a 2015-16 1,660 year, total supply in India would security, it added. Seeds — have up to 80 per cent of erty (IP), the
Palmoil 497.5 -12.3 883.0 -7.7 transport subsidy of ~1,000 a tonne 2016-17 50 be 42-42.5 mt, against the coun- “An evaluation of 24 lead- made it to the the food supply and Index showed
to mills located within 100 km from 2017-18 1,500 try’s annual consumption of ing seed companies in the top 10 seed helping them grow that the global
Rubber 1,202.9* -18.4 1,671.2 -12.8 a port, ~2,500 a tonne for those 25 million tonnes. region shows that 21 companies companies in more and more food is companies East-
Source: CARE Ratings report
beyond 100 km from a port in Mills in Maharashtra say they sell seeds in India and 18 have South and key to achieving food West Seed and
CoffeeRobusta 1,654.0* -1.2 1,920.7 -5.6
coastal states and ~3,000 a tonne for are working on strategy to achieve invested in breeding and pro- Southeast Asia and nutrition security Syngenta, outper-
Cotton 1,704.2 -10.0 1,817.4 -12.0 mills located in other than coastal
states. The Minimum Indicative
PRICE MOVEMENT the state's full MIEQ of 1.55 mt.
“We will achieve the full MIEQ. We
duction activities in the coun-
try,” according to the Access to
on their efforts formed their
to support small holder farmer peers, with strong positions
*As on Nov 12, 1800 hrs IST, # Change Over 3 Months
Conversion rate 1 USD = 72.9 & 1 Ounce = 31.1032316 grams. Export Quota (MIEQ) it has set for Sugar M30 ~/Qtl are also gearing up for additional Seeds Index (ASI) published by productivity. on IP, while considering the
Notes: the current sugar year (October 2018 export, for which mills in Uttar the World Benchmarking The list was topped by needs of small holder farm-
1) International metals, Indian basket crude, Malaysia Palm oil,
Wheat LIFFE and Coffee Karnataka robusta pertains to previous
to September 2019) is 5 million Pradesh would have to pass on Alliance (WBA). the Thailand-based East- ers and being transparent
days price. tonnes (mt). production incentives and other In comparison, only 11 West Seed. about such positions.
2) International metal are LME Spot prices and domestic metal are “After the 850,000 tonnes of benefits from the Centre or state companies have invested in “With many foreign seed “Monsanto scores highly
Mumbai local spot prices except for Steel.
3) International Crude oil is Brent crude and Domestic Crude oil is export contracts signed till the third with buyers in Maharashtra. The breeding activities in companies investing in India for its transparency on IP,
Indian basket. week of October, no new ones have incentives given to mills are Thailand and eight in and strong-performing com- however its positions are
4) International Natural gas is Nymex near month future &
domestic natural gas is MCX near month futures.
been signed thereafter, due to the meant to meet farmers’ cane pay- Indonesia, the two other panies from India itself, the unfavourable to the needs of
5) International Wheat, White sugar & Coffee Robusta are LIFF E price fall. Exporters are waiting for a ment and not for mills' margins. major regional seed hubs. country shows itself as a real small holder farmers,” it
future prices of near month contract.
6) International Maize is MATIF near month future, Rubber is
recovery in global prices to re-start Source: Bombay Sugar Merchants’ We are taking up this issue with WBA is global multi-stake- powerhouse for the develop- observed.
negotiations with overseas Association the government. If some mills holder initiative that measures ment and supply of quality The domestic Namdhari
Tokyo-TOCOM near month future and Palm oil is Malaysia FOB
Compiled by BS Research Bureau
spot price. importers. A price below 13.25 achieve their own target, benefits and incentivise business seeds for small holder farmers Seeds and Nuziveedu Seeds
7) Domestic Wheat & Maize are NCDEX future prices of near month
contract, Palm oil & Rubber are NCDEX spot prices. cents/lb is not viable at all, even with on tradable quantity should be efforts to achieve Sustainable in the region,” Access to Seeds scored high points due to
8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai subsidy,” says one of the country's gations with industry representa- given to them to export more,” Development Goals (SDGs). Index’s Executive Director Ido breeding programs with a
local spot price.
9) International cotton is Cotton no.2-NYBOT near month future &
largest exporters, on condition of tives to all possible destinations said Sanjay Khatal, MD of the According to the Index’s Verhagen said. strong focus on the preferences
domestic cotton is MCX Future prices near month futures. anonymity. where otherwise Brazil used to Maharashtra State Co-operative first ever ranking, four Indian However, majority of small and needs of small holder
Source: Bloomberg Compiled by BS Research Bureau The government has sent dele- supply the sweetener. Last month, Sugar Factories Federation. seed companies — Advanta, holder farmers still remain farmers, says the Index.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
14 WORLD
>
MUMBAI | TUESDAY, 13 NOVEMBER 2018 1

IN BRIEF
We expect Cabinet to back PM SoftBank eyes $21 billion in Oil gains after
on Brexit: May’s spokesman Saudi talks of
British Prime Minister Theresa May’s spokesman on Monday said he
expected Cabinet ministers to keep backing their leader on Brexit,
and that they would be called to a meeting to discuss an EU exit deal
as and when there was something to talk about. The spokesman also
one of world’s biggest IPOs cut in output
told reporters that negotiations with the European Union were
ongoing, but that substantial issues relating to Northern Ireland
Bid to transform telecom operator into a global investment company REUTERS Saudi Arabia, the world's
London, 12 November largest oil exporter, said on
remain. In a sign that Brexit talks could go down to the wire, EU BLOOMBERG Sunday it would cut its ship-
sources said they want clarity from London by the end of Wednesday Tokyo, 12 November Oil prices rose about 1 per cent ments by half a million bpd in
at the latest if there is to be a summit this month to approve a Brexit on Monday, breaking a stretch December due to seasonal
deal. May’s compromise plan, which seeks to maintain close trade

S
oftBank Group founder Masayoshi of losses, after Saudi Arabia said lower demand.
ties with the EU in the future, is facing opposition from Brexiteers, Son is seeking to raise 2.4 trillion yen OPEC and its partners believed “We’re kind of back to
pro-Europeans, the Northern Irish party that props up her ($21.1 billion) in an initial public demand was softening enough square one: It must feel like
government, and even some of her own ministers. “I think it’s the offering of his Japanese telecom business to warrant an output cut of 1 November 2016 to them, a
worst of all worlds,” former education minister Justine Greening, that could be the country’s largest IPO yet. million barrels per day lot,” said John Kilduff,
who supported staying in the EU in the 2016 Brexit referendum, told The Japanese technology giant said in next year. a Partner at Again
BBC radio. REUTERS< Brent
a prospectus on Monday it will sell 1.6 Saudi Energy Capital Management
billion shares at 1,500 yen apiece in a Minister Khalid al-Falih $70.88
in New York, refering
new entity, SoftBank, that will start trad- said the Organization S 70 cents to the time period
China to open up its California fires death ing on December 19. At that price, the of the Petroleum Expo- when OPEC and its
economy, slams toll rises to 31 with IPO would surpass the offering of former rting Countries and its US light crude allies agreed to initiate
rising protectionism more winds predicted national carrier Nippon Telegraph &
Telephone in 1987.
allies agree that techni-
cal analysis shows a
$60.79
production cuts. “The
Saudis and Russians,
S 60 cents
Chinese Premier Li Keqiang said The most destructive wildfires in Son is listing the company’s cash cow need to cut oil supply especially, rushed
on Monday Beijing will further California’s history have killed at as he transforms SoftBank from a tele- Why is SoftBank doing this? How big, and why so big? next year by around 1
till 9.35 pm IST
production to market
open up its economy in the face least 31 people and forced tens of com operator into a global investment million bpd from to offset losses that
of rising protectionism, as he thousands more to evacuate, as company, with stakes in marquee startups SoftBank Group has shifted its focus from The total size of offering could rise by October levels. aren’t materialising.”
headed for meetings with Asia- firefighters struggled to gain such as Uber Technologies and WeWork being mainly a Japanese telecoms 240.6 billion yen if an overallotment is ex- Brent crude futures were up The market had anticipat-
Pacific leaders in Singapore that control in swirling winds. The so- He’s racing to complete the offering as operator to a major investor in global ercised, taking the total fundraising closer 70 cents at $70.88 a barrel by ed that exports from OPEC
are expected to focus on trade called Camp Fire in Northern Japan’s wireless industry faces the threat technology startups. to the $25 billion that Alibaba Group raised 9.35 pm , following four sessions member Iran would fall pre-
tensions. Li’s remarks in an California and the Woolsey Fir, in of lower prices, with market leader NTT By listing the domestic carrier business, in 2014 in the world's biggest-ever IPO. of losses. US crude rose 60 cents cipitously following the insti-
article in Singapore’sStraits suburban Los Angeles, have Docomo saying it plans to cut rates 40 per SoftBank is seeking to concentrate on its While IPOs usually offer opportunities to $60.79 a barrel, the first tution of US sanctions in
Times newspaper, ahead of his destroyed more than 6,700 cent in response to government pressure. global investments and give investors a with relatively young companies with big increase after the longest stretch November. However, the US
arrival in the city-state later in structures and could cost the “Market sentiment is not as good as it choice to decide between a stable mobile growth potential, SoftBank's offering will of daily declines since 1984. has granted waivers to certain
the day, came as Singapore’s PM state, insurers and homeowners used to be, and investor appetite may not business and a more risky investment provide investors with access to an Prior to Monday’s increase, major importers of Iranian
Lee Hsien Loong called for more at least $19 billion in damages. be so strong,” said Yasuhide Yajima, chief business. established business with stable cash flow crude futures had fallen for 10 crude, diminishing the
regional integration, saying More winds are forecast for the economist at NLI Research Institute in The parent group’s founder and chief generated from its 40 million mobile straight trading sessions. expected cuts.
multilater-alism was under afflicted areas and there is no Tokyo. “Still, their focus is on data, AI and executive, Masayoshi Son, has said the IPO subscribers.
threat from political pressures. sign of the seasonal rain ahead. communication — industries where they proceeds will also enable SoftBank to pay SoftBank forecasts net profit to grow
“China has opened its door to It could take another five days can anticipate growth.” down debt and provide a supply of cash 4.8 per cent to 420 billion yen in the
the world; we will never close it before fire fighters put out SoftBank is looking to tempt investors for further investment. REUTERS business year through March 2019. REUTERS
but open it even wider,” Li said Woolsey and the rest of the with a dividend payout ratio of about 85
in the article, in which he called month to extinguish the Camp percent of net income, according to the fil-
for an “open world economy” in Fire, the California Department of ing. Based on net income in the last fiscal bets on companies such as Alibaba Group Group, the parent, will hold about 63 per
the face of “rising protectionism Forestry and Fire Protection, or year, that would work out to an almost 5 Holding and Yahoo! His $100 billion cent of the wireless unit.
and unilateralism”. REUTERS Cal Fire, said. BLOOMBERG< per cent yield at the indicated IPO price. Vision Fund is the largest technology Amir Anvarzadeh, a senior strategist at
“The dividend payout ratio is very investment fund ever, and he has said he Asymmetric Advisors in Singapore, point-
high,” said Masahiko Ishino, an analyst at plans to establish similar sized funds ed out the valuation of the business is
Tokai Tokyo Research Center. “That pro- every two to three years. lower than earlier, bullish speculation that
vides an incentive.” The Japan wireless business, valued at it could be worth 9 trillion yen. But the
REFLECTING ON THE PAST Son has shifted his focus in recent 7.18 trillion yen at the indicated price, offering will have some positive implica-
years to concentrate on technology would provide additional money for such tions for SoftBank Group, including by The US has granted waivers to certain major importers of
investments, in the wake of successful deals. After the public listing SoftBank lowering its debt load. Iranian crude, diminishing the expected cuts PHOTO: REUTERS

Tulsi Gabbard may run for US presidency in 2020

US President Donald Trump during the American
Commemoration Ceremony at the Suresnes
American Cemetery in Paris, on Sunday
PRESS TRUST OF INDIA Gabbard, a Democrat, who out to prospective donors, including a reaching out to this community, candidate ever from a major political
Washington, 12 November addressed the gathering, however, large number of Indian Americans, and which is considered as the richest eth- party to announce to enter the race
neither confirmed or denied that she volunteers to build an impressive cam- nic group after the Jewish Americans. for White House. And if elected in
Tulsi Gabbard, the first Hindu law- is running for presi- paign for her 2020 run. And in many critical States, Indian 2020, she could be the youngest ever
maker from Hawaii in the US dent in 2020. A deci- Tulsi Given that Gabbard is Americans can play an important role and first woman to be elected as the
Congress, is considering to run for sion on this could be Gabbard, highly popular among in her electoral chances. US president. A Democrat, Gabbard
American presidency in 2020, accord- taken before the first Indian-Americans, a Gabbard is not Indian. She was last week was elected for the fourth
ing to sources close to her. Christmas, which Hindu US constituency she born in American Samoa to a Catholic term for the US House of
On Friday, at a Medtronic confer- might not necessarily lawmaker has nurtured from father (Hawaii State Senator Mike Representatives.
ence in Los Angeles an eminent Indian- result in a formal the very begin- Gabbard) and her mother, Carol Porter Notably, Dr Shivangi is a
American Dr Sampat Shivangi intro- announcement as ning of her polit- Gabbard, is of Caucasian descent who Republican and has been the party's
duced Gabbard, 37, and said that she that could be delayed ical carrier, it professes Hinduism. Gabbard moved delegate for the past several presiden-
could be the next president of the US in till the next year, people is but natu- to Hawaii when she was two and tial conventions. However, he had held
2020. The brief statement was marked familiar with her thinking ral that her embraced Hinduism as a teenager and fund raisers for Gabbard when she ran
by a standing ovation, in the presence process told PTI. team has is well-versed in the scriptures. for the Congress for the first time in
of the four-term Congresswoman from However, it is said that she and quietly If Gabbard declares her presiden- 2012. She was the first US lawmaker to
PHOTO: BLOOMBERG the 50th US State. her team has quietly been reaching started tial bid she would be the first Hindu take her oath on Bhagwat Gita.

STOCKS
IN THE
> STOCK
> SMS Lifesciences India > Wockhardt > Balrampur Chini Mills

NEWS Close at upper circuit

filter of 20 per cent
Top gainer among the
A group stocks
Trading volume jumps
three times OF THE DAY
Linde India : Stock hits
~400.00 PREVIOUS CLOSE ~521.25 PREVIOUS CLOSE ~108.90 PREVIOUS CLOSE life-time high at ~620.10,
~480.00 CLOSE ~568.25 CLOSE ~117.50 CLOSE up 59 per cent from one
S 20.00% UP S 9.02% UP S 7.90% UP month low
> z .

NIFTY 50 ADVANCES/DECLINE
Company Close (~) % Wt PE Company Close (~) % Wt PE
F&0 SNAPSHOT DAY’S TOP GAINERS DAY’S TOP LOSERS
12 Nov ’18 Chg (%) Con Std 12 Nov ’18 Chg (%) Con Std Futures Cash Premium Futures Cash Discount
price price (%) price price (%) Company Day’s high Close % chg* 3mth high 52 wk high Company Day’s low Close % chg* 3mth low 52 wk low
Adani Ports 328.7 -2.7 0.6 21.0 29.9 IOC 135.1 -4.7 1.3 5.8 5.7
Asian Paints 1278.8 -1.3 1.3 57.3 60.0 ITC 273.9 -1.2 7.6 29.2 28.4 MOST BULLISH MOST BEARISH Wockhardt 578.0 568.3 9.0 691.3 1012.0 Oriental Bank 79.4 79.9 -8.6 58.1 58.1
Axis Bank 606.6 -1.1 2.6 341.95487.8 JSW Steel 344.6 -0.8 1.1 9.2 10.4 Balram Chini 119.6 117.5 7.9 119.6 168.0 HPCL 224.1 225.6 -6.2 163.5 163.5
Suzlon Energy 6.1 6.1 0.8 Kaveri Seed 486.8 501.2 -2.9
Bajaj Auto 2652.3 -1.5 0.9 17.1 17.8 Titan Company 900.0 892.8 5.3 947.0 1006.0 India Cement 90.3 91.1 -6.1 80.1 80.1
Kotak Mah Bank 1153.7 1.6 3.5 32.7 50.7 Reliance Com 13.9 13.9 0.7 Page Inds 28806.0 29593.7 -2.7
Bajaj Fin 2277.6 -4.1 1.3 49.2 40.6 Dewan Hsg 249.7 241.7 4.0 690.0 690.0 SREI Infra Fin 36.5 37.1 -6.0 25.4 25.4
L&T 1367.2 -0.1 4.3 21.3 30.3 JP Associat 7.0 7.0 0.7 Petronet LNG 213.5 218.6 -2.3
Bajaj Finsrv 5549.1 -2.7 0.8 22.3 276.7 Future Retail 514.0 508.8 3.2 593.5 660.0 Jet Airways 238.0 242.1 -6.0 163.0 163.0
Mah & Mah 780.9 -1.8 1.7 12.2 20.1 Shree Cement 15492.0 15396.4 0.6 V Guard Inds 187.8 192.0 -2.2
Bharti Airtel 296.2 -1.2 0.9 69.3 - Repco Home 419.0 411.3 3.1 619.0 739.0 GSFC 108.0 108.3 -5.8 85.6 85.6
Maruti Suzuki 7087.8 -2.7 2.1 27.2 27.1 Can Fin Home 277.4 275.9 0.5 NHPC 26.4 26.7 -1.3
Bharti Infratel 258.5 -2.8 0.5 19.7 18.6 Tech Mahindra 730.8 724.6 2.7 780.1 780.1 Allahabad Bk 41.1 41.6 -5.2 33.3 33.3
NTPC 152.8 -1.1 1.1 12.0 12.2
BPCL 291.2 -1.9 0.7 6.5 7.6 Mphasis 977.0 968.0 2.3 1278.0 1278.0 Kaveri Seed 497.3 501.7 -4.9 448.5 433.0
ONGC 156.1 -0.2 1.5 7.7 7.9 BSE NSE
Cipla
Coal India
531.9
263.9
0.9
-1.7
0.6
0.8
31.3 26.7
19.4 17.6
Power Grid 186.0 -3.0 1.0 11.9 11.3 Index Stock Index Stock PUT-CALL RATIO Cummins (I)
Tata Global
806.0
216.8
796.2
214.4
2.2
2.1
806.0
246.5
993.5
328.8
Bank of India
Tata Motors
86.1
185.3
87.3
186.0
-4.9
-4.8
73.3
164.6
73.3
164.6
Reliance Ind 1080.0 -1.2 8.3 18.0 19.7 FUTURE NIIT Techno 1203.5 1193.3 1.8 1425.0 1425.0 DCB Bank 157.0 157.9 -4.7 139.5 139.5
Dr Reddys 2415.6 0.6 0.7 25.6 34.9 (Open Interest in Mn) Put Call PC Ratio
SBI 278.0 -1.9 2.4 - - Contracts - - 295818 806641 Bombay Burm 1425.2 1410.0 1.8 2113.9 2113.9 IOC 134.4 135.3 -4.6 105.7 105.7
Eicher Motor 21933.6 -2.5 0.7 28.8 33.0 Market 530.9 883.3 0.6
Sun Pharma 589.5 -1.3 1.5 35.0 134.3 Open Int.(000) - - 26753 4451450 Tata Steel 589.8 582.9 1.7 646.7 755.1 InterGlobe Avia 940.4 948.5 -4.3 697.0 697.0
GAIL 364.8 -0.7 0.9 17.1 14.9
Tata Motors 186.1 -4.7 0.8 103.8 54.8 Shares(In Mn) - - 14.0 1616.7 Top 5 PC Ratio Bottom 5 PC Ratio Maha Gas 864.5 858.3 1.6 967.0 1174.9 Tata Mot-DVR 98.0 100.6 -4.2 90.6 90.6
Grasim Ind 860.8 -0.8 0.8 14.8 27.4
Tata Steel 582.9 1.9 1.0 3.5 11.0 Value(Rs Mn) - - 193110 449925
HCL Techno 1036.8 0.9 1.3 15.6 18.2 Adani Power 1.9 Godfrey Ph 0.1
HDFC 1795.9 -1.1 7.0 19.0 23.4 TCS 1914.9 0.3 4.5 25.0 26.1 OPTIONS
UPL 1.3 Bosch 0.1 * Ranked on the basis of percentage gain/loss on previous close
HDFC Bank 1921.1 -1.3 9.3 28.2 27.4 Tech Mahindra 724.6 2.5 1.0 17.3 17.4 Contracts - - 8331629 585741
Titan Company 894.8 5.6 0.8 72.1 63.4 Asian Paints 1.3 PTC India 0.1
Hero MotoCorp
Hindalco
2839.4
229.3
-4.0
-4.0
0.8
0.8
15.2 15.5
8.5 34.9 UltraTech 3726.9 -2.4 0.9 53.6 53.9
Open Int.(000)
Shares(In Mn)
-
-
-
-
112284 1301870
252.4 990.1
SKS Microfin 1.2 MRPL 0.1 MOST TRADED TOP M-CAP TRENDS
PC Jeweller 1.2 Ajanta Phar 0.1
HPCL 225.1 -6.7 0.8 4.8 5.3 UPL 733.2 -0.9 0.6 17.7 72.0 Value(Rs Mn) - - 4732316 340344 Value Volume Rank Company Mcap (~ billion) Company % change Company % change
HUL 1654.3 -1.1 2.7 68.5 62.5 Vedanta 203.2 -2.8 0.9 5.9 10.9 BSE+NSE BSE+NSE
1 TCS 7189.2 BS200 Innovative Idea 36.5
Wipro 323.4 -0.5 0.8 19.0 20.6 (~ million) (Mn shrs)
ICICI Bank
Indiabulls Hous
352.4
865.3
-1.3
0.4
5.1
0.7
29.4 65.6
8.6 9.4 YES Bank 223.1 -2.1 0.9 12.2 11.5 ACTIVE CALLS ACTIVE PUTS Titan Company 13286.1 15.1
2 Reliance Ind 6837.7
UP 7 DAYS DOWN 7 DAYS
3 HDFC Bank 5227.2 Baid Leasing -30.1
IndusInd Bank 1493.0 -0.1 1.7 - 23.4 Zee Enter 437.8 -2.7 0.6 33.3 24.3 Indiab Real 25.8
Infosys 664.2 0.7 5.7 17.5 17.5 Nifty 50 10482.2 È-1.0 100.0 19.2 21.5 MARKET OVERVIEW Expiry
Date
Strike Traded
Price
Open
Qty Interest
% Chg
(OI)
Expiry
Date
Strike Traded
Price
Open
Qty Interest
% Chg
(OI)
YES Bank 7256.2 32.3 4
5
HUL
ITC
3579.9
3352.9
Kajaria Cer 10.7 TAHL -30.0
SBI 7214.2 25.8 Ashapura Intima -30.0
INDEX PE Shrs Trds 1 Yr Index Index 6 HDFC 3082.9
AGGREGATES Reliance Ind 6579.4 6.1 DOWN
S&P BSE SENSEX STOCKS Sensex
C/S
20.7/23.3 16.2
Mn ‘000
138
Adv Dec
5 26
return
4.5
Nifty Bank
Nifty
15/11/18
29/11/18
26000
10700
13.1
10.5
1.3
3.1
99.9
19.4
Nifty Bank
Nifty
15/11/18
29/11/18
25500
10500
12.1
9.5
0.5
2.2
-25.6
-5.6 Dewan Hsg 6397.5 26.6
7 Infosys 2902.6
UP 3 DAYS
Ashari Agen
Umiya Tubes
-29.6
-24.1
8 SBI 2478.8
Adani Ports 328.6 -2.4 0.7 21.0 29.9 Mah & Mah 780.3 -2.1 2.1 12.2 20.1 Nifty 50 19.2/21.5 267.7 3843 10 40 1.6 Nifty 29/11/18 10800 9.0 3.0 11.3 Nifty Bank 15/11/18 25400 7.8 0.3 27.9 PC Jeweller 6302.0 68.5 Balram Chini 13.3
9 ICICI Bank 2267.4 Universl Str -13.1
Asian Paints 1275.6 -1.7 1.6 57.2 59.8 Maruti Suzuki 7073.9 -2.6 2.5 27.1 27.1 Nifty 29/11/18 10600 8.4 2.3 15.8 Nifty 29/11/18 10600 7.5 1.1 -18.5 Tata Steel 6190.1 10.6 Wockhardt 11.6
10Ç Kotak Mah Bank 2204.4 Veritas -13.0
Axis Bank 606.2 -1.0 3.2 341.75484.6 NTPC 152.8 -1.0 1.3 12.0 12.2 Cash Derivatives Nifty Bank 15/11/18 25900 7.6 0.8 276.3 Nifty 29/11/18 10400 7.4 1.8 -2.1 Maruti Suzuki 5347.9 0.7 NHPC 8.3
TURNOVER BSE NSE BSE NSE 11È Maruti Suzuki 2136.9
Bajaj Auto 2647.0 -1.8 1.1 17.1 17.8 ONGC 156.0 -0.3 1.8 7.7 7.9 Stock Stock NBCC 6.8
TCS 5076.2 2.6 12 ONGC 2002.0 UP 3 DAYS
Bharti Airtel 295.4 -1.0 1.1 69.1 - Power Grid 186.0 -2.9 1.2 11.9 11.3 Value(In ~ Min) 24202 274086 - 571569 SBI 29/11/18 300 7.0 6.7 3.1 SBI 29/11/18 280 6.2 3.5 -12.6 Mphasis 6.2
Indiabulls Hous 5013.9 5.8 13 L&T 1916.8 B C Power Contr 42.2
Coal India 264.1 -1.5 1.0 19.4 17.6 Reliance Ind 1078.8 -1.3 10.0 18.0 19.6 Shares(In Mn) 173.0 1305.5 - 2873.1 Tata Motors 29/11/18 200 6.8 4.7 19.7 SBI 29/11/18 270 5.4 2.4 -10.9 Dewan Hsg 6.1
Infosys 4974.1 7.4 14 Coal India 1639.1 Jubilant Fd 5.5 Avonmore Cap 39.5
HDFC 1795.1 -1.2 8.4 19.0 23.4 SBI 277.8 -1.9 2.8 - - Trades(000) 1238 10824 - 4708 SBI 29/11/18 290 6.4 3.4 17.1 ICICI Bank 29/11/18 350 4.4 2.3 -9.5
Wockhardt 4904.8 8.7 15 Axis Bank 1557.6 DOWN
HDFC Bank 1923.4 -1.3 11.1 28.2 27.4 Sun Pharma 589.6 -1.1 1.7 35.0 134.3 SAIL 29/11/18 70 6.1 5.8 6.2 Yes Bank 29/11/18 220 3.6 1.1 13.9 Linde India 31.3
MARKET-CAP (~ billion) 16 Wipro 1464.9 Containr Crp -3.9
Hero MotoCorp 2837.5 -3.8 1.0 15.2 15.5 Tata Mot-DVR 100.6 -4.2 0.1 - - Traded Total Tata Steel 29/11/18 600 5.9 1.6 6.2 Tata Motors 29/11/18 180 3.6 1.4 11.0 Infibeam Aven 4731.9 84.5 T & I Global 27.9
17 HCL Techno 1439.0 Ramco Cements -3.2
HUL 1653.9 -1.1 3.2 68.5 62.5 Tata Motors 186.0 -4.8 0.9 103.7 54.8 BSE 140,557 142,278 Axis Bank 4685.4 7.7 Dolat Invest 27.0
18 Sun Pharma 1414.5 KPIT Technologi -2.8
ICICI Bank 352.3 -1.0 6.1 29.4 65.5 Tata Steel 582.9 1.7 1.2 3.5 11.0 NSE 139,222 140,542 Tata Motors 4283.4 22.7 Polyspin Exp 26.3
19Ç Bajaj Fin 1317.6 Avenue Supermar -2.5
TCS 1915.9 0.3 5.4 25.0 26.1
IndusInd Bank
Infosys
1491.7
664.5
-0.3
0.5
2.1
6.9
- 23.3
17.5 17.5 Vedanta 203.5 -2.6 1.0 5.9 10.9
Derivatives 106,212 106,212 SPURT IN VOLUMES Cipla
ICICI Bank
4241.5
3970.9
7.9
11.2
20È IOC 1313.5 Themis Medi
DOWN 3 DAYS
24.7
21 NTPC 1259.9 OTHERS
ITC
Kotak Mah Bank
273.9
1155.9
-1.2
1.6
9.1
4.2
29.2 28.4
32.7 50.7
Wipro
YES Bank
323.8 -0.3
222.8 -2.2
1.0
1.1
19.0 20.7
12.2 11.5
TRADING ACTIVITY Company Days
Volume
2-week Avg
Volume
Change Close
price
*Price
%chg
HDFC Bank 3919.4 2.0 22 Asian Paints 1223.5
UP 7 DAYS
Avanti Feeds -14.4
(~ million) FIIs MF HDFC 3749.3 2.1 23 Bharti Airtel 1180.6 Talwalkar’s -14.2
L&T 1367.0 0.0 5.2 21.2 30.3 BSE SENSEX 34813.0 È-1.0 100.0 20.7 23.3 Global Offshore 70.2
Equity Debt Equity Debt remier Expl 313608.0 5125.3 6018.8 221.4 14.8 24 Hind Zinc 1113.6 Ozone World -14.1
Con = Consolidated; Std = Standalone Net Net Net Net Bajaj Fin 3661.0 1.6 Everest Org 49.5
Saksoft 410523.0 12503.1 3183.4 304.4 20.0 25 UltraTech 1024.7 Orient Abras -13.0
Tech Mahindra 3527.1 4.9 Maris Spin 40.1
On 09 Nov -27033 -3601 -1437 40689 Insectcides 368640.0 13867.9 2558.2 485.8 5.5 26Ç Nestle India 975.4
L&T 3139.6 2.3 Gujarat Poly 39.9 CRP Risk Mang -12.4
WORLD INDICES On 07 Nov
On 05 Nov
-2714
820
1533
3391
132
-271
0
8529
BGR Energy 2454187.0 137138.7 1689.6 68.8 15.4
HPCL 2859.9 12.4
27È
28È
Power Grid
Mah & Mah
973.1
970.1 Unick Fix-A-For 39.2 Spenta Intl -12.2
Lambodhara T 109609.0 6740.2 1526.2 47.6 7.3 Flexituff Vent 36.9 V-Mart Ret -11.3
Indices Close % Chg* Indices Close % Chg* On 02 Nov -1356 42049 6487 34732 Kotak Mah Bank 2778.6 2.4 29Ç IndusInd Bank 897.5
Global Offshore 303010.0 22412.2 1252.0 20.2 20.0
On 01 Nov 9406 5702 -4282 9642 Jet Airways 2731.0 11.1 30È Bajaj Finsrv 884.6 (T+2) cycleStocks which rose/fell continuously
Americas (Nov 09,18) Asia/Pacific (Nov 12,18) Sakuma Exp 1171029.0 91118.7 1185.2 24.8 1.7
Nov till date -20877 49073 2837 102087
S&P/ TSX Composite 15274.4 -0.5 Shanghai Se Comp 2630.5 1.2 Gala Global Pro 216515.0 17242.8 1155.7 43.8 -3.5
2018 till date -447734 -538899 1127263 2291637
Pokarna 108532.0 8750.0 1140.4 167.0 20.0
Dow Jones
Nasdaq Composite
25989.3
7406.9
-0.8
-1.7
Taiwan Taiex
Kospi
9831.2
2080.4
0.0
-0.3 FIIS IN DERIVATIVES SMS Pharma 318600.0 26117.6 1119.9 71.7 5.9 BOARD MEETINGS INTRA-DAY
Europe/Africa (Nov 09,18) Straits Times 3068.2 -0.3 (~million) Index Stock Index Index Stock Note : A & B group stocks with the day’s trading volumes at over 100,000 shares, * % change over previous close QUARTERLY Sunteck Rlty Dalmia Sugar Indoco Rem Monte Carlo
NET Net Fut OI Opt OI OI RESULTS Group B Damodar Ind Ineos Styroluti Fas
IBEX 35 9130.2 -0.1 Kuala Lumpur Comp 1696.1 -0.7
FTSE 100 7095.1 -0.1 Stock Exchange of Thai 1654.9 -0.8 On 09 Nov
On 07 Nov
-1289
1647
1416
116
0.4
0.4
1.0
0.9
1.5
1.5
52 WEEK NEW HIGHS/LOWS NOVEMBER 13
8K Miles
Softwa
DCM
Deccan Cem
ISGEC Heavy
Eng
Motor & Gen
Nagreeka Exp
CAC 40 5094.6 -0.2 Jakarta Composite 5777.1 -1.7 Company Price Company Price Company Price Company Price BS 200 A2Z Infra DFM Foods Ivp Limited Nagreka Cap
On 06 Nov 35360 -8233 0.4 0.9 1.5
DAX 11436.7 -0.8 Volatility (Nov 09,18) On 05 Nov 17088 -4751 0.4 0.9 1.5 Allahabad Bk Adhunik Inds Dhunseri Inv J Kumar Infr NECC
HIGH *Gallant Mtal . . . . . . . . . . 66.0 LOW *Navkar Corp . . . . . . . . . . 63.5
Asia/Pacific (Nov 12,18) CBOE S&P 500 17.8 2.7 On 02 Nov 36131 7171 0.4 0.9 1.5 Apollo Tyres Adhunik Mtlk Dolphin Off Kama Hold NESCO
BS 200 *Megastar Foods . . . . . . 59.0 BS 200 *Ashapura Intima . . . . . . 58.6
Hang Seng 25633.2 0.1 CBOE Dow Jones 17.2 2.5 Nov till date 115480 6172 - - - Ashok Leyland Allsec Tech Emmbi Kamdhenu Novartis
*Divis Lab . . . . . . . . . . . 1562.4 *Adi Rasayan . . . . . . . . . . 53.5 NONE *Jagatjit Ind . . . . . . . . . . . 37.8
2018 till date 1268474 600905 - - - Bombay Burm AMD Ind Industrie Karda Constru Optiemus Infr
Nikkei 225 22269.9 0.1 * Change over previous close Others *Nilachal Ref . . . . . . . . . . 49.4 Others Vippy Spinp . . . . . . . . . . . . 37.7
OI in number of contracts(million) CG Power Arman Fin Galaxy Karma Energ Orient Bell
*DSP Blackrock L . . . . 1000.0 *Usha Martin . . . . . . . . . . 45.7 Elantas Beck . . . . . . . . 1744.0 *Quasar I . . . . . . . . . . . 32.8
Enginers Ind Asian Hot-E Surfacta Kesar Term Orient Press
MAJOR INDICES S&P BSE SECTORAL INDICES
*Alkyl Amines . . . . . . . . 811.0
*Kanchi Karpoora . . . . . 664.0
*National Ply. . . . . . . . . . . 43.8
*Gujarat Poly . . . . . . . . . . 34.4
*VST Tillers . . . . . . . . . 1525.6
*Empire Ind . . . . . . . . . 1222.0
Photon Capital . . . . . . . . . 31.8
*Maxheights Infr . . . . . . 31.1
Glenmark Astrazen Ph GATI Kesoram Ind Ortin Lab
Jindal Steel Autoline Ind Gillander Ar KIOCL Oswal Agro.
Previous Close Open High Low Close Change % chng *Technocraft . . . . . . . . . 650.5 *Uv Der Horst . . . . . . . . . . 33.9 Shankara Bld . . . . . . . . . 950.1 *Divinus Fabrics . . . . . . . 30.9
Maha Gas Bharat Bijle Global Kirl Elect Pennar Ind
S&P BSE Sensex 35,158.6 35,287.5 35,333.2 34,756.8 34,813.0 -345.6 -1.0 Prev close Close % Chg *Linde India . . . . . . . . . . 620.1 *Calcom Vis . . . . . . . . . . . 31.4 *Sandesh . . . . . . . . . . . . . 791.0 *Vamshi Ruber . . . . . . . . . 30.0
NCC Bharat Wire Offshore Lemon Tree PG Elect
S&P BSE Sensex 50 11,062.5 11,097.3 11,122.4 10,936.7 10,953.1 -109.4 -1.0 Auto 20,845.2 20,364.5 -2.3 *Dalal Street . . . . . . . . . 550.0 *Sakuma Exp . . . . . . . . . . 28.9 Yuken India . . . . . . . . . . . 525.0 Rajoo Engg . . . . . . . . . . . . 28.0
NMDC Bindal Agro GOCL Corp Hot PGIL
S&P BSE-100 10,871.3 10,904.3 10,927.9 10,742.3 10,758.3 -113.0 -1.0 Bankex 29,098.3 28,854.0 -0.8 *Magalam Org . . . . . . . . 521.6 *Hind.Fluroca . . . . . . . . . . 27.0 Central Prv . . . . . . . . . . . 350.3 *Womens Next Lou . . . . . 27.4
PTC India Birla Cable Gokul Agro Lovable Lngr Premier Auto
S&P BSE-200 4,531.8 4,545.7 4,554.5 4,479.2 4,485.5 -46.3 -1.0 Cons. Durables 19,512.0 19,780.8 1.4 SMS LifeS . . . . . . . . . . . . 480.0 *Tijaria Polypip . . . . . . . . 26.7 V2Retail . . . . . . . . . . . . . . 250.0 *Mystic Ele . . . . . . . . . . . . 26.6
Sun Pharma BKM Inds Greencrest Mangalam Premier Poly
S&P BSE-500 14,185.4 14,228.0 14,254.5 14,024.2 14,042.7 -142.7 -1.0 Cap. Goods 18,246.3 18,167.7 -0.4 *Bajaj Steel . . . . . . . . . . . 448.0 *UTL Inds . . . . . . . . . . . . . . 22.1 *GE T&D Ind . . . . . . . . 227.3 *Kushal . . . . . . . . . . . . . . . . 23.9 Scapdvr SPL Ind Texmo Pipes Weizmann Group M
Tata Steel BLB Gss Infotech Cem Prime Focus
S&P BSE IPO 4,189.2 4,203.7 4,208.1 4,166.0 4,175.0 -14.3 -0.3 FMCG 11,210.4 11,125.8 -0.8 *Coast Corp . . . . . . . . . . 378.5 *Superior Finlea . . . . . . . 19.6 *TPL Plastech . . . . . . . . 168.0 21st Cnt Fin . . . . . . . . . . . . 23.8 SEAMEC STC India The Byke Hosp Forex Captain Tech
Healthcare 14,692.8 14,587.7 -0.7 Group A Bombay Dyng Gufic Bios Marksans Ph Prime Sec
S&P Dollex-30 3,974.5 - - - 3,917.4 -57.1 -1.4 *Garware Poly . . . . . . . . 290.0 *Spicy Ent Media . . . . . . 17.9 Narmada Gelt . . . . . . . . . 112.4 *V B Inds . . . . . . . . . . . . . . 23.4 Shiva Mills Sutlej Text Tokyo Plast Weizmann Ind Dynamic
Infra 196.5 194.5 -1.0 Abbott India BSL Gulshan Poly Max Ventures PSL Holdings
Nifty 50 10,585.2 10,607.8 10,645.5 10,464.1 10,482.2 -103.0 -1.0 *IOL Chem . . . . . . . . . . . 164.9 Nihar Info . . . . . . . . . . . . . . 16.1 *PG Elect . . . . . . . . . . . . . 103.8 *Aunde Faze . . . . . . . . . . 22.7 Shiva Texya Suyog TVS Srichakr Wheels India Cables
IT 14,185.5 14,250.4 0.5 Corp Bank C & C Constr Harrisons M Mayur Uniqu PTL Enter
Nifty next50 27,367.5 27,443.1 27,519.5 26,996.8 27,051.6 -315.9 -1.2 *Polyspin Exp . . . . . . . . . 160.6 B P Capital . . . . . . . . . . . . . 16.0 *Arman Ho . . . . . . . . . . 91.0 *Umiya Tubes . . . . . . . . 22.1 Shreyans Ind Telematic Ujaas Energy Xchanging Group M
Metal 12,863.1 12,692.4 -1.3 Deepak Fert CCHHL Hawkins Cook Megasoft Pun Sind Bnk
Nifty 500 8,946.4 8,967.8 8,991.2 8,846.4 8,859.3 -87.1 -1.0 *KIC Metaliks . . . . . . . . 110.9 *Mishtann Fo . . . . . . . . 13.5 *Veritas . . . . . . . . . . . . . . . 81.3 *Beardsell . . . . . . . . . . . . . 22.0 Siyaram Silk Talbros Auto United Bank Solut GCM Capital
Oil & Gas 13,584.5 13,320.3 -1.9 Dilip Build Celebrity F Hind Syntex Mercator Ramky Infra
India VIX 17.8 17.8 19.5 16.5 19.4 1.6 9.0 *Darjeeling Rope . . . . . . . 86.9 Super Bakers . . . . . . . . . . 12.6 *IRB InvIT Fund . . . . . . . . 70.3 *SKC (I) . . . . . . . . . . . . . 19.8 SKIL Infras Talwalkars Life Vardhmn Hold Group M H K Trade Intl
Power 1,977.6 1,940.7 -1.9 GE T&D Ind Compucom Sft HOV Services MIRC Elect RITES
Nifty CPSE 2,184.7 2,190.1 2,196.1 2,139.7 2,143.5 -41.1 -1.9 *Jet Infravent . . . . . . . . . . 80.2 *Shukr Bullions . . . . . . . . 12.3 *GP Petroleums . . . . . . . . 66.3 *Adroit info . . . . . . . . . . . 18.7 Skipper Technofab Varroc Eng Amrapli Fincap HPC
PSU 7,220.6 7,082.4 -1.9 GIC of India Country Con IMP Powers Mishra Dhatu Rossell India
MSE SX 40 20,720.5 20,720.5 20,720.5 20,514.5 20,514.5 -206.0 -1.0 Realty 1,762.8 1,734.5 -1.6 * Indicates that the market price of these companies reached two-year highs/lows. Hind Copper Cubex Tubing Indian Terr Ni RSWM SMS LifeS Tera Software Walchand Ind Captain Pipes Biosciences
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
20 ECONOMY & PUBLIC AFFAIRS
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MUMBAI | TUESDAY, 13 NOVEMBER 2018 1

Cautious govt ‘defers’

GDP back series data
During the ensuing discussion,
experts sought analytical info,
which is being worked out
ABHISHEK WAGHMARE
NewDelhi,12November
Minutes before the back series
of gross domestic product
(GDP) for the base year 2011-12
was to be released, the NITI
Aayog and the Ministry of
Statistics and Programme
Implementation (MoSPI) on
Monday decided to “defer” it.
The decision was taken at a
meeting between the two along
with economists.
“During the discussion,
experts sought analytical infor-
mation, which is being worked
out. It was, therefore, decided
to have a follow-up round-table
discussion with experts soon,”
said Anna Roy, advisor for data
management and analysis at
theNITIAayogsaid.Therelease
of the data could have put to
rest all speculations that rose
after the National Statistical
Commission (NSC) came out
with its recommendations on
the back series data, which
showed two years of double-
digit growth in the UPA regime.
Sources in government said
it was cautious about the data
since it pertains to economic
growthduringpreviousgovern-
ments. In addition, they said
MoSPI officials were unable to
answer queries raised by
experts.
“The experts said a better
understanding of the back
series at the disaggregated lev-
els was needed. In addition, the
series needs to be substantiated
with pertinent data used to for-
mulate it, such as interest rates
of previous years, which needs
to be obtained from the Reserve
Bank of India (RBI). The process
would be complete in the next
two weeks,” said a senior offi-
cial. Questions were raised on
the methodology, the econo-
metric model and the assump-
tions made to arrive at the val-
ues for previous years. But
officials present at the meeting
said this was merely a “techni-
cal deferral”. Formulating a
back series requires several
assumptions that have to be
substantiated with pertinent
data, the officials said.
“Backseriesformulationisa
research exercise involving a
multitude of approximations.
Whenever there is a consider-
able divergence between the
back series (Base: 2011-12) and
the old series (Base: 2004-05),
the reasons for it must be clear,”
oneoftheexpertspresentatthe
consultation said. The CSO is
using a variety of data sets for
thepurposeofcreatingtheback
series, including data from
MCA-21 — the Ministry of
Corporate Affairs data set,
Annual Survey of Industries,
andtheCentreforMonitoringof
Indian Economy.
In addition to Chief
Statistician Pravin Srivastava,
former CSI T C A Anant, former
chairman of National Statistical
Commission (NSC) R B
Barman, former NSC member
Manoj Kumar Panda, and
Biswanath Goldar, economics
professor at the Institute of
Economic Growth were some
of the experts invited by the
NITI Aayog. The meeting was
facilitated by Vice-Chairman
Rajiv Kumar. The Sudipto
Mundle committee on real sec-
tor statistics in its report to the
NSC in July had devised a back
series for the base year 2011-12.
This report had created a polit-
ical storm, since with the new
base GDP growth in two of the
years under the previous gov-
ernment crossed the 10 per cent
mark.
The Mundle report had men-
tioned that CSO had already for-
mulated‘tentative’estimatesforthe
officialbackseriesusingavarietyof
datasets.Thesetentativeestimates
were sent to the Advisory
Committee of National Accounts
Statistics for deliberation. These
were then finalised, after which
the parent ministry MoSPI, in
consultation with NITI Aayog,
decided to release the data.
RBI for privatisation of PSBs
Acharya put forth the proposal as govt nominees raised capital needs of PSBs in Oct 23 meet
SOMESH JHA
New Delhi, 12 November
T
he Reserve Bank of
India’s (RBI’s) central
board saw a heated
exchange between the repre-
sentatives of the government
and the central bank over the
capital needs of public sector
lenders in its last meeting,
where Deputy Governor Viral
Acharya suggested that pri-
vatisation of these banks be
considered.
The government nominees
on the board told the RBI that
it might not be able to give
money to PSBs for capitalisa-
tion beyond a point as it would
affect the fiscal deficit target.
Acharya responded by saying
that the government should
consider privatising PSBs “if
the fiscal deficit is a binding
constraint”, at least three per-
sons, including a member of
the RBI board, told Business
Standard.
The October 23 board
meeting of the RBI went on
for about 10 hours, one of the
longest in the recent past,
during which four to five key
issues flagged by the govern-
ment were discussed.
Economic Affairs Secretary
Subhash Chandra Garg and
Financial Services Secretary
Rajiv Kumar are government
nominees on the RBI’s cen-
tral board.
A committee under veter-
an banker P J Nayak, to review
governance of boards of banks,
had asked the government in
May 2014 to reduce its stake in
PSBs to below 50 per cent.
The incumbent National
Democratic Alliance (NDA)
government has recapitalised
PSBs in two tranches so far –
GOVERNMENT VS RBI
| Govt proposed a
slew of measures
to free up capital
for PSBs during RBI's
October 23 board
meeting
| Govt said it could
recapitalise banks only
to an extent due to fiscal
deficit constraints
| RBI Deputy Governor
Viral Acharya suggested
~700 billion (announced in
August 2015) and ~2.12 trillion
(October 2017). Of the ~2.12 tril-
lion recapitalisation plan, the
government has already
infused over ~1 trillion.
However, rising non-perform-
ing assets (NPAs) have led to
higher provisioning by PSBs,
which may require additional
funding to meet their regula-
tory capital requirements.
To ease the financial bur-
den, the government has asked
the RBI to bring the minimum
capital requirement norms in
line with international prac-
tices, followed in the form of
the Basel norms. The move
that govt consider
privatising PSBs if
financing them
was a challenge
| RBI and govt are holding
backchannel talks on
forbearance to MSMEs
and to review PCA
framework
| Governance in RBI to be
discussed in the
next board meeting
may unlock capital of ~600-
650 billion for PSBs, according
to the government’s estimates,
sources said. However, the RBI
has not yet agreed to the gov-
ernment’s demand.
According to the RBI guide-
lines, the common equity tier-
1 (CET-1) of banks must be at
least 5.5 per cent of its risk-
weighted assets. However, the
government feels that the RBI
should prescribe banks to keep
CET-1 at 4.5 per cent of their
assets, which was stipulated by
the Basel Committee on
Banking Supervision while
releasing its report on the
Basel-III norms in December
2010. The RBI’s capital norms board meeting. The financial
are also part of the prompt cor- position of some banks under
rective action (PCA) frame- PCA will be reviewed follow-
work. ing their second-quarter
The next board meeting of results,” the person cited above
the RBI is scheduled for said. However, the RBI is
Monday where a series of unwilling to provide liquidity
issues raised by the govern- measures for non-banking
ment is going to be discussed. financial companies (NBFCs)
Both the RBI and the gov- and review its surplus transfer
ernment have exchanged to the government, the person
notes on ‘governance in the added.
RBI’ and further discussion On its part, a senior gov-
will happen in the upcoming ernment official said, the
meeting, a source said. The “middle ground” for the gov-
discussion will mainly revolve ernment would only be to align
around the RBI General the capital adequacy norms
Regulations, 1949, which deals with the Basel framework. An
with the manner in which the official said it was unlikely that
proceedings of the RBI’s board a resolution would be passed
are conducted along with pro- through voting in the upcom-
cedures to be followed during ing board meeting.
the meeting. Among a dozen issues, the
The regulations also deal government has suggested the
with the delegation of powers RBI to set up a special refi-
and functions of the board to nancing window for NBFCs,
deputy governors, directors or housing finance companies
officers of the RBI. and mutual funds and create a
“The proposal facility for banks to
is to review the raise $30 billion. It
regulations relat- has also asked for
ed to the central A committee review of: the appli-
board of the RBI,” under banker cation of Basel III
an official said. P J Nayak, norms to banks
Sources said to review that are not inter-
the RBI and the governance of nationally active,
government were boards of building up a capi-
in regular touch banks, had tal conservation
over two issues – asked in May buffer during peri-
easing provision- 2014 to reduce ods of stress and
ing norms and its stake in PSBs the efficacy of the
providing other to below 50% PCA framework in
forbearances to restoring banks to
the micro, small health.
and medium enterprises, and The need for high-risk
reviewing the PCA framework. weights for credit to MSMEs,
“Some middle ground can and enhancement of opportu-
be found. There is some will- nities for rectification and
ingness to look at these two restructuring of MSMEs’ loan
issues from both sides. The accounts are also some
position may become less demands raised by the gov-
hardened before the RBI’s next ernment.

ANANTH KUMAR 1959-2018

‘From soil to
skies, I’ve had
10 avatars’
ILLUSTRATION: AJAY MOHANTY

ARCHIS MOHAN wife set up Adamya

New Delhi, 12 November
Ananth Kumar, the
Union minister of chemi-
cals and fertilisers, would
say the Narendra Modi
government’s efforts at
providing affordable
medicines to people was
very close to his heart.
Kumar, who was 59, died
early on Monday morn-
ing. He was suffering
from lung cancer.
Earlier this year, while
detailing his efforts to
expand the network of
outlets selling affordable
generic drugs, Kumar
said it became a mission
for him after his mother
died of cancer.
Kumar’s father was a
second-division clerk in
Indian Railways. The
minister grew up in the
railway workers’ colony
in Hubli, Karnataka. “My
father was the sole
breadwinner, and while I
was still young, my
mother was diagnosed
with cancer,” the minis-
ter said. The doctor pre-
scribed her two tablets
daily of Nolvadex.
Each tablet was priced
at ~20 then, Kumar said.
“My father earned ~1,200
a month. The choice my
father had was whether
to give my mother two
tablets a day, which
would leave little money
for food, or one tablet,”
the minister said.
Kumar’s father did
what he thought was
best for the family: one
tablet a day for his wife.
The minister and his
Chetana, projects to pro-
vide mid-day meals to
schoolchildren and the
poor under Girija Shastry
Memorial Trust, in memo-
ry of his mother. Kumar
was a six-time Lok Sabha
member from Bengaluru
South, undefeated since
1996. His success at the
Ministry of Chemicals and
Fertilisers, and his affable
personality and rapport
with leaders across the
political spectrum had
made the PM give him the
additional responsibility
of the parliamentary
affairs portfolio in last
year’s Cabinet reshuffle.
But Kumar was no
stranger to other min-
istries. In 1998, he was the
civil aviation minister in
the Atal Bihari Vajpayee
government. He had han-
dled tourism, culture,
youth affairs and sports,
urban development and
poverty alleviation, and
rural development and
panchayat affairs. “From
soil to skies, from village
panchayats to parliamen-
tary affairs, I have had my
dashavatara (10 avatars),”
the minister said.
Last year, Kumar and
his wife left the Delhi
political elite, particular-
ly those within their par-
ty, floored when they had
one of their daughters
marry her friend from a
north Indian middle-
class family and outside
their caste at a simple cer-
emony. But Kumar would
say he has not forgotten
that he grew up in a work-
ers’ colony.
https://t.me/pdf4exams
.
MUMBAI | TUESDAY, 13 NOVEMBER 2018
India’s mismatched steel target
The country is set to achieve its steel capacity target ahead of time, but the
infrastructure to supply iron ore and coking coal to plants lags
KUNAL BOSE
Kolkata, 12 November
T
here is no longer any official prevar-
ication about the country achieving
300 million tonne (mt) crude steel
capacity target by 2030-31 that the
government was bold enough to incorporate
in the steel policy announced in 2017. India’s
present capacity now is close to 140 mt. Steel
Minister Birender Singh is using every forum,
as he recently did at NMDC diamond jubilee
celebrations, to say that India is well on course
to be a 300-mt steel capacity country, next
only to China, in another 12 years.
The most bullish of them all, JSW Steel
Chairman Sajjan Jindal, citing the Chinese
example of building capacity of over 1 billion
tonnes (bt) and then producing 832 mt last
year and using most of that domestically, says,
“India too will cause a global sensation by
arriving at that magic 300 mt figure ahead of
due date.”
Robust demand for steel sustaining prices
at remunerative levels and the country’s com-
pulsion to build a strong infrastructure are
drawing significant investments in the steel
sector. Intense competition among business
groups to buy the insolvent steel assets and
then initiate major brownfield capacity
expansions are indicative of what the future
holds for this basic industry. The immediate
past steel secretary Aruna Sharma explains:
“If annual steel demand growth is sustained
at around 10 per cent, then lifting our per
capita steel use from 69 kg now to the target-
ed 160 kg by 2030-31 is eminently possible.” At
the same time, there remains a growing indus-
try concern as to whether the infrastructure to
support raw materials movement to steel pro-
ducing units from far away mines and ports in
the case of coking coal will be sufficiently
beefed up to support crude steel production of
255 mt on a capacity of 300 mt by 2030-31.
Let’s see how the raw materials figures
stack up. The steel policy says achieving the
2030-31 capacity and production targets will
call for the use of 859 mt of raw materials,
including 437 mt of iron ore, 136 mt of non-
coking coal for direct reduced iron produc-
tion and for use as pulverised coal injection in
blast furnaces, and 161 mt of coking coal for
which the country is becoming increasingly
import dependent. As is reported at regular
intervals, iron ore producers find it an uphill
struggle to evacuate the mineral from mines
using road and rail for domestic use. Miners in
Odisha and other iron ore bearing states will
more often than not put up with shortages of
rakes leading to piling up of ore at mine-head,
inviting rebukes from environmentalists.
On more than one occasion, miners in Goa,
Karnataka and Odisha were censured by the
Supreme Court for causing much damage to
the environment. In fact, ahead of the court
cancelling all the 88 leases in Goa by a
February 7 order as the local government
made the mistake of giving second renewal of
leases instead of holding fresh auctions, the
state had a court directed production cap of 20
mt against its peak output of 38 mt in 2010.
Karnataka too has a 35 mt cap. In the court’s
https://www.estore33.com/
BUILDING
BLOCKS
Steel capacity:
300 mt
by 2030-31
Current
capacity:
140 mt
Raw material
requirement:
859 mt
Iron ore:
437 mt
Non-coking
coal:
136 mt
assessment, the available infrastructure in
the two states could support iron ore produc-
tion only up to the cap points without harm-
ing the environment.
The challenge for miners then is to avoid
inviting any further wrath of the court and
state regulatory agencies but still be able to
meet the steel industry’s growing demand for
iron ore. It will be a sad day for the country if
steel mills close to the ports make it a practice
to use growing quantities of imported ore tak-
ing advantage of the low 2.5 per cent customs
duty. After all, India is sitting on iron ore
resources of 33 bt. A time tested way out from
a crisis developing in ore despatches is to
build growing numbers of slurry pipelines
(SPs) between the points where the mineral is
beneficiated on excavation and where the
fines are turned into pellets. SPs have been
globally found ideal from Australia and Brazil,
the world’s two major mining nations to some
European countries for transportation of low
value, high volume concentrates such as iron
ore and bauxite.
Quite appropriately, the credit for building
the world’s first pipeline to carry slurry iron
ore concentrate in 1967 goes to Australia,
which has a growing profile in ore production
and exports and also discovery of new
deposits. It was 39 years since then that Essar
commissioned India’s first slurry pipeline
linking its ore beneficiation plant at Kirandul
in Chhattisgarh with its 8 mt pellet unit at
Vizag. The 267-km Essar SP traverses some
very tough terrain through three states but
making minimum impact on the environ-
ment. In another eight years, Essar built a
253 km SP connecting its ore processing facil-
ity at Dabuna in Keonjhar district with a 6 mt
pellet plant at Paradip. In both cases, the pel-
let plants are in proximity to all weather ports
where the sponge iron making material is
sent through conveyor for sailing to Essar
steel complex at Hazira in Gujarat. The coun-
try’s largest iron ore producer, NMDC, is
building a 455-km SP connecting Kirandul
first with Nagarnar, where the company is
about to commission a 3 mt steel mill, and
then with Vizag.
Even while transportation of water mixed
ore concentrate through SPs over long dis-
tances makes minimum impact on the envi-
ronment and has the potential to remove a big
load on the country’s road and rail systems, it
is only now after government prodding that
the steel industry and miners are looking at
the option with some seriousness. Besides
freeing road and rail network of iron ore load,
SPs allow the dusty material to move silently.
Ore concentrate being encased in pipes,
there is no emission of dust damaging public
health and the environment. To the extent
the pipes remain underground, the land
above can be used for growing crops. Sending
ore in slurry form will give users a cost advan-
tage of at least 50 per cent over rail trans-
portation and over 80 per cent when trucks
are used. In order to bring down cost of trans-
ferring ore from mines at Keonjhar to its 6 mt
steel mill, covering a distance of around 250
km, JSPL is building an SP. A few more such
initiatives are in discussion stage.
https://t.me/TheHindu_Zone_official
TAKE TWO 23 <
French President Emmanuel Macron is hoping to
revive efforts to regulate cyberspace after the last
round of UN negotiations failed in 2017
Macronandtech
giantslaunch‘Paris
call’tofixinternetills
REUTERS
12 November
FranceandUStechnologygiantsincludingMicrosofton
Mondayurgedworldgovernmentsandcompaniesto
signuptoanewinitiativetoregulatetheinternetand
fightthreatssuchascyberattacks,onlinecensorshipand
hatespeech.
Withthelaunchofadeclarationentitledthe‘Pariscall
fortrustandsecurityincyberspace’,FrenchPresident
EmmanuelMacronishopingtoreviveeffortstoregulate
cyberspaceafterthelastroundofUnitedNations
negotiationsfailedin2017.Inthedocument,whichis
supportedbymanyEuropeancountriesbut,crucially,
notChinaorRussia,thesignatoriesurgegovernmentsto
beefupprotectionsagainstcybermeddlinginelections
andpreventthetheftoftradesecrets.
ThePariscallwasinitiallypushedforbytech
companiesbutwasredraftedbyFrenchofficialsto
includeworkdonebyUNexpertsinrecentyears.
“Theinternetisaspacecurrentlymanagedbya
technicalcommunityofprivateplayers.Butit’snot
governed.Sonowthathalfofhumanityisonline,we
needtofindnewwaystoorganisetheinternet,”an
officialfromMacron’sofficesaid.
“Otherwise,theinternetasweknowittoday—free,
openandsecure—willbedamagedbythenewthreats.”
Bylaunchingtheinitiativeadayafteraweekendof
commemorationsmarkingthe100thanniversaryof
WorldWarOne,Macronhopestopromotehispushfor
strongerglobalcooperationinthefaceofrising
nationalism.InanothersignoftheTrump
administration’sreluctancetojoininternational
initiativesitseesasabidtoencroachonUSsovereignty,
FrenchofficialssaidWashingtonmightnotbecomea
signatory,thoughtalksarecontinuing.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
24
>
MUMBAI | TUESDAY, 13 NOVEMBER 2018 1

Sivakasi fireworks units CBI versus CBI: CVC

submits probe
fall silent to protest SC ban report in SC
The Central Vigilance Commission (CVC) on
Monday filed in the Supreme Court its pre-
Traders claim 60% fall in sales since SC order, go for ‘indefinite shutdown’ liminary enquiry report, in a sealed cover,
about CBI Director Alok Kumar Verma who
T E NARASIMHAN cent of its business after the has been divested of his duties and sent on
Chennai, 12 November Supreme Court prohibited the leave in view of allegations of corruption
sale of crackers in the National against him.

A
bout 1,400 fireworks
units in Sivakasi on
Monday decided to
shut down indefinitely,
demanding lifting of the
Supreme Court ban in
October that restricts the
time for bursting crackers.
Tamil Nadu Fireworks
and Amorces Units Owners’
Association, a body of crack-
er manufacturers, claimed
there has been a 60 per cent
fall in the sale of firecrackers
following the SC order.
Sivakasi, about 550 km
from Chennai, produces
nearly 95 per cent of the
country’s crackers. The
industry employs 800,000 to
1 million directly or indirect-
ly and has an annual
turnover of about ~60 billion.
The decision to shut
shops was taken in a meet-
ing of the association, E
Mariappan, the secretary of
the body, said.
He said the industry,
mostly comprising medium
and small enterprises (MSEs)
and micro, small and medi-
um enterprises (MSMEs),
Sivakasi produces nearly 95 per cent of the country's crackers
and employs 800,000 to 1 million people
had been affected severely
by the SC order on the time
restrictions and the ban on
use of certain chemicals.
Mariappan said there
was no such thing as “green
crackers” and claimed that
domestic crackers were
much better than those pro-
duced in foreign countries.
The SC order banning the
use of raw materials such as
barium hydride in the man-
ufacture of crackers would
also affect the industry. He
said a lot of people would
have lost their jobs because
of the ban.
Meanwhile, association
representatives on Monday
met state minister K T
Rajendra Balaji, who repre-
sents Sivakasi in the assem-
bly, and discussed the issue.
The association has
already said that it is consid-
ering filing a review petition
against the SC directive. Retail
sales of Sivakasi firecrackers
amount to over ~100 billion a
year. But sales have been
plummeting in the last couple
of years, owing to bans on fire-
crackers imposed by various
courts. In 2017 and 2018, the
industry lost nearly 50 per
Capital Region (NCR). The allegations have been levelled against
Industry experts said the Verma by his deputy Rakesh Asthana, Special
Council of Scientific & Director at the agency, against whom an FIR
Industrial Research (CSIR), on has been lodged by the CBI on graft charges.
the advice of the Ministry of Asthana was also sent on leave by the Centre.
Environment, Forest and Acting CBI director M Nageswara Rao also
Climate Change, has already filed in a sealed cover the decisions taken by
explored the possibility for him from October 23-26. A bench of Chief
producing low-emission Justice Ranjan Gogoi and Justice Sanjay
crackers. However, the fire- Kishan Kaul took both the reports on record
crackers industry felt that the and fixed the matter for further hearing on
suggestions were not feasible. November 16. PTI
“The solution has to come
from the industry and CSIR
can be part of the research.
Here, the CSIR was asking for
royalty to use its invention,
which is not viable for the fire-
works industry,” Mariappan
said.
He feels that even with
intensive research, it would
take at least four years to
come up with zero- or low-
emission crackers. One
ingredient that has been
tested to reduce emissions
in fireworks is nitrocellulose.
However, the chemical
becomes unstable after
being exposed to the atmos-
phere for a while, making it
unsuitable for use, he said.

AYUSHMAN BHARAT: 50 DAYS ON...

200,000 benefit;
states approve
claims of ~3 bn
VEENA MANI
NewDelhi,12November

Fifty days since the launch of

Ayushman Bharat on September 25,
200,000 beneficiaries have already
availed of treatment; 500,000 health
cards have been distributed to date.
Senior government officials say let-
ters are being sent in regional lan-
guages to beneficiaries to espouse the
notion of universal health care.
Claims worth ~17 billion have been
received across the country. Of this, ~3
billion worth of claims have been
approved by various states, inform
government sources.
“Most claims are from
Maharashtra, West Bengal, Gujarat,
Tamil Nadu, Uttar Pradesh (UP), and
Chhattisgarh,” says a senior govern-
ment official. UP has registered the
maximum cases, with 2,300 benefici-
aries availing of the scheme in the first
50 days of its launch in Ranchi. He
says Bihar still has the least number of
hospitals - the state has empanelled
only nine private hospitals.
The scheme aims at providing ter-
tiary health care of up to ~500,000 for
500 million people. While Ayushman
Bharat will provide health care for
those listed in the socio-economic
Claims worth at least ~17 billion have
been received across the country
caste census, states are also adding
beneficiaries below the poverty
threshold. For these BPL beneficiaries,
the states will bear the premium.
For the new flagship scheme, the
total annual requirement is ~120 bil-
lion. This will make it the largest
health scheme ever in India in terms
of yearly expenditure. This will be
from 2019-20, the first full year for the
scheme.
For this fiscal year (2018-19), the
health ministry has projected a total
expenditure of ~60 billion, of which 60
per cent will come from the Centre
and 40 per cent from the states. This
compares to ~20 billion allocated in
the Budget by the Centre. For the
approaching fiscal years, the total cost
would go up to ~120 billion.

HRD Ministry okays

process to form IIMs’
boards of governors
PRESS TRUST OF INDIA
New Delhi, 12 November
The Human Resource
Development (HRD) Ministry
on Monday approved the
process of constitution of new
boards of governors for the
Indian Institutes of Mana-
gement (IIMs) according to
the IIM Act, 2017.
“The process of constitu-
tion of boards for IIMs, which
havebeengivenfullpowersto
run the institutions, is a major
development that signals
complete autonomy of quali-
ty institutions in higher edu-
cation and will ensure quality
expansion of higher educa-
tion,” Union HRD Minister
Prakash Javadekar said.
This process is in accor-
dance with the provisions of
Section 10 of the IIM Act and
has been approved in consul-
tation with the Ministry of
Law and Justice.
Under the Act, the IIMs
have been provided com-
prehensive autonomy for
the first time.
"In accordance with the
spirit of the Act, the govern-
ment has decided to imme-
diately withdraw the gov-
ernment nominees who are
in excess of the provisions of
the Act. This will pave way
for complete control of the
institutions by reputed aca-
demicians and alumni,"
Javadekar said.
The process of constitu-
tion of the boards would be
kicked off with three ex-offi-
cio members selecting the
chairperson who would lead
the further process of consti-
tution of the boards as laid
down under the Act.
Thereafter, the board
comprising the chairperson
and ex-officio members will
co-opt five alumni from
every IIM who will normally
be the current serving mem-
bers, except in cases of inel-
igibility.
"In the first meeting of
the board, the regulations
for selection of for eminent
persons and two faculty
members would be framed
and based on this, normally
the current serving persons
would be selected for a full
term. This process is expect-
ed to be completed before
December 15. On completion
of the constitution of the
boards, the rules under the
IIM Act would be issued...
which would bring out the
operational details more
clearly," Javadekar added.