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me/TheHindu_Zone_official
THURSDAY, 30 MAY 2019
34 pages in 2 sections www.business-standard.com
MUMBAI (CITY)
~8.00
VOLUME XXIII NUMBER 205

THE MARKETS ON WEDNESDAY Chg#

Sensex 39,502.1 247.7
Nifty 11,861.1 67.7 BACK PAGE P24 COMPANIES P3
Nifty Futures* 11,895.8 34.8
Dollar
Euro
~69.8
~77.9
~69.7**
~77.9** STAR PULLS OUT ALL STOPS WHY GOOGLE CEO TURNED
FOR WORLD CUP TELECAST DOWN A BIG STOCK AWARD
Brent crude ($/bbl)## 68.5## 69.9**
Gold (10 gm)### ~31,798.0 ~80.0
*(June) Premium on Nifty Spot; **Previous close;
# Over previous close; ## At 9 pm IST;
### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

INDICES FALL ON
PROFIT BOOKING,
GLOBAL CUES
PM meets Jaitley after IndiGo opts for
Pratt&Whitney
he opts out of Cabinet
SENSEX Snapping their
39,800
39,502.1 39,700 three-day

rival, deal soon

record- setting run,
39,600
the benchmark
39,500
39,749.7
indices racked up
39,400
May 28 May 29 losses on
Source: Exchange
Wednesday as No word on meeting’s JAITLEY'S REPORT
investors scrambled to book profits
amid a broad reversal in the global outcome; in letter to CARD AS FM
markets on recession fears. After
slumping over 300 points, the BSE Modi, outgoing FM What he may be
leaving for the next
Sensex ended 247.7 points, or 0.62 per
cent, lower at 39,502.1. The broader NSE
said he needed time to finance minister
What he inherited
Nifty dropped 67.7 points, or 0.57 per concentrate on his health from UPA 2
cent, to 11,861.1.
ARUP ROYCHOUDHURY & INDIVJAL DHASMANA GDP GROWTH (In%YoY)
ECONOMY & PUBLIC AFFAIRS P4
New Delhi, 29 May
7.0 6.4

Bond yields rally in May
on rate cut hopes
Since the beginning of May, the 10-year
bond yields have fallen 28 basis points
(bps), as investors factor in sharp rate
cuts by the Reserve Bank of India (RBI)
after the Bharatiya Janata Party’s
resounding victory in the polls. Most of
the movement in yields has come after
the exit poll results, as foreign portfolio
investors also increased their
investments in the Indian bonds. The
10-year bond yields closed at 7.13 per
cent, 2 bps lower than its previous close.
ECONOMY & PUBLIC AFFAIRS P4
India to battle it out with
US, UK to tax digital firms
India will press for widening the scope
of permanent establishment (PE) to tax
digital enterprises such as Google,
Facebook, Microsoft, and Netflix at the
Organisation for Economic Co-operation
and Development (OECD) Base Erosion
and Profit Shifting (BEPS) Inclusive
Framework meeting next month.
BACK PAGE P24
China ready to hit back
at US with rare earths
P
rime Minister Narendra Modi met
Arun Jaitley at the latter’s residence
on Wednesday evening, hours after
the outgoing finance minister
requested that he should not be given any
responsibility for now and be allowed time off
due to his ill health.
Though there was no official announce-
ment on the outcome of the meeting, which
lasted about 20 minutes, Modi is learnt to have
requested Jaitley to reconsider his decision. It
is not known if Jaitley agreed to stay on in the
government. However, the buzz in political
circles is that Jaitley could hold the post of a
Cabinet minister without portfolio. If that hap-
pens, the country will have a new finance min-
ister, and the names of Piyush Goyal and
Nirmala Sitharaman are doing the rounds.
The new council of ministers will be sworn in
on Thursday.
Earlier in the day, Jaitley tweeted a letter he
had written to Modi, ending days of fervent
speculation regarding his health. “I am writing
to you formally to request you that I should be
allowed a reasonable time for myself, my treat-
ment and my health and therefore, not be a
part of any responsibility, for the present, in
the new government,” he said.
“During the last eighteen months, I have
had some serious health challenges… After
the campaign had concluded and you were
leaving for Kedarnath, I had orally informed
you that even though I was able to discharge
the responsibilities assigned to me during the
(FY19)* (FY14)
CPI INFLATION (In%YoY)
2.9 8.3 ARINDAM MAJUMDER
New Delhi, 29 May POWERING
(FY19 end) (FY14 end)
THE FLIGHT
IndiGo, the largest customer of Airbus’ Marketshare of engine
FISCAL DEFICIT (As%ofGDP)
fuel-efficient A320neo family aircraft manufacturers for
3.4 4.4 with Pratt & Whitney (P&W) engines, is
A320neo familyaircraft
(FY19) ** (FY14) learnt to have decided on rival CFM
International for LEAP1-A engines. The Market share (in %)
CURRENT ACCOUNT DEFICIT airline is looking at an order for 280 air- CFM International
(As%ofGDP) craft. IndiGo’s move to shift to CFM, a 39
2.6 1.7 50:50 joint venture between the US’ Unannounced
General Electric and French engine mak- 32
(First9months (FY14)
ofFY19) er Safran, follows a series of issues, Pratt & Whitney
including the grounding of planes due to 29
FOREX RESERVES (In$billion) trouble with P&W engines. Note: Unannounced means the
411.9 304.2 IndiGo’s deal with CFM could be airline hasn’t yet opted for the
announced during the Paris Air Show to
type of engine
(FY19 end ) (FY14 end) Figures are as of Nov 2018
be held from June 17 to 23, sources in Source: FlightGlobal
* Second advance estimates
the know said. The deal is valued at
** Revised estimates $8.12 billion, according to the listed price.
Sources: MoSPI, RBI, Controller But airlines pay far less than what the listed price is.
General of Accounts IndiGo’s decision to go for CFM is seen as a big blow for P&W’s
geared turbo fan engine programme, which is the only other option
GOURMET TO TROUBLESHOOTER FM P6 besides CFM’s LEAP1-A for the A320neo family.
Charles Soret, a CFM spokesperson, while refusing to respond to
campaign, I would in future, like to keep away Jaitley has undergone a bariatric surgery, a queries on the deal citing client confidentiality, said the engine mak-
from any responsibility,” he wrote to the PM . kidney transplant and a surgery in the er was looking to strengthen its position in the Indian subcontinent
Jaitley said while doctors had enabled him United States to remove soft tissue cancer in by winning customers for the LEAP engine. “As of today, 57 LEAP-
to come out of most of his health concerns, he his left leg. Currently, he is said to be under- powered aircraft are operated by Indian airlines and several hun-
would need time to recover.
Since becoming finance minister in 2014,
going chemotherapy. dreds of LEAP engines will be delivered in the coming years to
cover the needs of Indian market,” Soret said.
Turn to Page 21 > Turn to Page 21 >

China is ready to use rare earths to

strike back in a trade war with the
United States, Chinese newspapers
warned on Wednesday in strongly
worded commentaries on a move that
L&Tfacesdelayinlaunch SCagreestohear
ofopenofferforMindtree Centre’spleaon
would escalate tensions between the
world's two largest economies.

DEBASIS MOHAPATRA
Bengaluru, 29 May powersunderCGST
ON Engineering major Larsen & AASHISH ARYAN while granting anticipatory bail
SPECIALS
THURSDAY Toubro (L&T) is behind New Delhi, 29 May to a person accused of evading
schedule in the launch of its CGST, asked the government to
PRIVATE EQUITY:
open offer for the sharehold-
ers of information technology MAHARASHTRA’S PLAN The Supreme Court on file an FIR and only then pro-
Wednesday agreed to hear the ceed with the arrest.

TO BE DROUGHT-FREE
II, 2 > company Mindtree. government’s plea seeking clar- The HC had directed that
More hits It has already exceeded the ifications on powers the accused could
than misses in
Ratan Tata’s
start-up bets
timeline fixed
Securities and Exchange
under

Board of India (Sebi) regula-

COMES A CROPPER to arrest an accused
without filing a first
information report
The court also
not be arrested by
the authorities
“without following
asked high
Tata has invested in tions in this regard. That rule In April 2016, Maharashtra (FIR) under the courts across the procedure pre-
43 start-ups; only says a company should launch operated the water train to Central Goods and scribed under the
two have failed, an open offer within 55 days HANGING IN BALANCE supply drinking water to Services Tax (CGST)
the country
not to Criminal Procedure
from the date of a public MAN Vs drought-affected Latur. In laws. The court, while Code, and specifical-
writes RANJU | Experts see this as | Overturning of open offer DROUGHT interfere in
announcement. L&T, after an the same year, the state constituting a three- ly registration of an
SARKAR implicit extension of the request could be a matter such cases at
agreement to buy Cafe Coffee embarked on its Jalyukt judge Bench to hear this stage FIR”. The accused
proposal as it is still being of worry
PERSONAL FINANCE: Day founder V G Siddhartha's Shivar Abhiyan to become the matter, also asked person, who was
evaluated by Sebi | Currently, L&T is pursuing
stake, issued the public drought free by 2019. Despite high courts (HCs) being probed by the
Investors should stick to | Delay in open offer likely market purchase of
announcement on March 18. the ambitious plan, across the country not to inter- Serious Fraud Investigation
gold-linked instruments II, 3 >
Its detailed public statement to create uncertainty Mindtree shares to PAGE 4 >
40 per cent of the state is fere in such cases at this stage. Office (SFIO), had moved the
Pricing is more transparent and some in that regard was on March among shareholders of increase its stake in reeling from drought and The apex court’s order came HC, seeking anticipatory bail.
even pay interest regularly, writes 26 in newspapers. L&T, Mindtree the IT firm its water tanker economy is booming. on a plea moved by the govern- The central government
SANJAY KUMAR SINGH “As the open offer is still Jalyukt Shivar Abhiyan aimed at making ment in which it claimed that had, on the other hand, con-
TECHNOLOGY: under examination (by Sebi), Maharashtra a drought-free state by HCs were granting ex-parte tended that the filing of FIR was
it becomes an implicit sort of InGovern. “Of course, the (However,) there will not be deepening and widening streams as well as interim relief to petitioners not necessary to arrest an
Data fortress 20 >
extension,” opines Shriram delay will create some any impact on the pricing of constructing cement and earthen stop dams, without considering any prin- accused in the cases of indirect
Data centres, which store critical data
Subramanian, founder of cor- amount of uncertainty Mindtree shares.” nullahs and digging farm ponds. ciples. The plea challenged a tax evasion.
of hundreds of millions of Indians, porate governance advisory among all stakeholders. Turn to Page 21 > AMRITHA PILLAY writes Bombay HC order that had, Turn to Page 21 >
have multiple and rigorous layers of
security. NEHA ALAWADHI
gives the lowdown

> RESULTS RECKONER

High interest payments hit earnings of India Inc
Quarter ended Mar 31, 2019; common sample
KRISHNA KANT
Mumbai, 29 May
cent YoY during the second
half of FY19, its worst show in at
INTEREST BURDEN ON RISE AGAIN receivables (amount due from
customers). This has forced
of 1,673 companies (results available of 1,955) YoY chg (%)
least three-and-a-half years. In companies to raise working
SALES Borrowing costs have come the same period, companies’ capital loans to either fund
back to bite corporate earnings net sales were up 11 per cent incremental inventory or plug
Mar 31, ’18 13.6% 16.49 trillion
after remaining muted for YoY, showing moderation in gaps in their cash flows," says G
Mar 31, ’19 11.2% 18.34 trillion three years. The combined growth on a sequential basis. Chokkalingam, founder and
NET PROFIT interest payment for India's An uptick in interest MD, Equinomics Research &
top listed companies, payment without a matching Advisory Services.
Mar 31, ’18 -55.0% 48,519 crore excluding financial and oil and improvement in operating The numbers suggest that
Mar 31, ’19 82.5% 88,565 crore gas firms, was up 15.2 per cent profit puts pressure on net the rise in interest payment
Companies which have reported zero sales are excluded year-on-year (YoY) during the profits. The combined net was due to both higher interest
Data compiled by BS Research Bureau; Source: Capitaline six months ended March 2019, profit (adjusted for exceptional rates as well as an increase in
outpacing the change in net gains and losses) for the borrowings.
sales and operating profit. sample was down 3.5 per cent The combined borrowings
TO OUR READERS This was the fastest growth in YoY during H2FY19, their worst Note: The analysis is based on the half-yearly numbers for 1,202 (based on unaudited numbers)
listed companies, excluding financial and oil and gas firms
The two-page commercial feature companies’ interest payment show in at least three-and-a- Source: Capitaline Compiled by BS Research Bureau was up 13.3 per cent YoY during
on B-School, being carried on in at least three-and-a- half years. Excluding H2FY19 against a decline of 3.3
Page 22-23, is equivalent to a half years. exceptional gains, net profit per cent during the second half
paid-for advertisement. No Business In comparison, companies’ was down 24 per cent during banks, non-bank lenders and borrowing by companies and been an increase in working of 2017-18. The total
Standard journalist was involved in combined operating profit or the period. oil and gas companies the firming up of interest rates capital requirement in many outstanding debt of the sample
producing it. Readers are advised to Ebitda (earnings before The analysis is based on the including Reliance Industries. in the last one year due to sectors as demand slowdown companies increased to ~12.7
treat it as an advertisement. interest, tax, depreciation and half-yearly numbers for 1,202 Analysts attribute this to a liquidity squeeze in the has resulted in inventory pile- trillion against ~11.2 trillion a
amortisation) was down 5.9 per listed companies, excluding combination of incremental domestic market. "There has up at companies and a rise in year ago. Turn to Page 21 >

https://t.me/SSC4Exams https://t.me/Banking4Exams https://t.me/UPSC4Exams

 https://t.me/TheHindu_Zone_official

2 COMPANIES MUMBAI | THURSDAY, 30 MAY 2019

STOCKS > Power Finance Corporation

121.10 122 Q4 net profit at ~2,118 cr
> S Chand and Company
135.05
139 Q4 net profit down 46%
> IRCON International
110 Q4 net profit down 55%
> P C Jeweller
110 Top loser among
> Info Edge (India)
2,090 Q4 net profit at ~66 cr
IN THE NEWS 118 against ~796 cr in the 131 at ~122 crore; YoY
106.20
100 at ~96 crore; YoY
106.20
100 F&O segment
2,052.60
2,015 against loss of ~14 cr in
1,965.75
113.65 118.00 year-ago quarter 132.45
95.80 95.80 1,917.40 the year-ago quarter
114 123 90 90 1,940

110 ~121.10 CLOSE 116.55 115 ~116.55 CLOSE 83.80 80 ~404.40 CLOSE 83.80 80 ~83.80 CLOSE 1,865 ~2,052.60 CLOSE
May 2019 May May May 2019 May May May 2019 May May May 2019 May May May 2019 May May
* OVER PREVIOUS CLOSE 22 28 29 2.63% UP* 22 28 29 13.70% DOWN* 22 28 29 5.37% DOWN* 22 28 29 12.53% DOWN* 22 28 29 4.42% UP*
> .

IN BRIEF
Cognizant to offer higher salary Tower firms’ top line woes to REPORT CARD

Goenka: Passenger
to entry-level engineers
IT major Cognizant, which has close
to 200,000 employees in India, will
continue despite 4G switch vehicle sales will
outdoSiamforecast
offer over 18 per cent higher pay
packages to entry-level engineers
joining next year, according to in-
SOHINI DAS & ROMITA MAJUMDAR
Mumbai, 29 May
TOWER RENTALS CONTINUE TO DECLINE
dustry sources. Engineering stud-

T
ents graduating in June 2020 will see the offer made by the US- elcos’ focus on densification of 4G Rental per tower Growth rate SHALLY SETH MOHILE
based company increase from ~3.38 lakh per annum to ~4 lakh, network is unlikely to result in bet- 800 8 Mumbai, 29 May
they said. IT companies are slated to visit campuses around ter top line for tower companies, a 7
August-September this year to present offer letters for next year. recent CRISIL report has suggested. 665 652 Amid slowing sales and poor
Confirming the salary increase, a Cognizant spokesperson said As telcos stress on densification of 4G, 600 668 4 buying sentiment, Pawan
the company already offers higher packages for employees with the replacement of 2G and 3G base trans- 601 630 Goenka, managing director,
"premium" skills in digital technologies. “In line with that, we ceiver station (BTS) or signal transmit- 548 563 Mahindra & Mahindra (M&M),
have decided to increase the compensation of entry-level engi- ters with 4G will slow down the net BTS 400 -2 0 is hopeful that passenger vehi-
neering graduates, as digital technologies have become an inte- additions to about 155,000 in FY20 from
715 cle sales in India in the ongoing
gral part of engineering curricula in progressive institutions from 275,000 in FY19. financial year may do better
where we recruit talent,” the spokesperson said. PTI< The number of BTS per tower is, how- 200 -4 than what the auto industry
ever, expected to increase marginally to body has projected.
3.85 this fiscal compared with 3.67 in FY19 Goenka expects the newly M&M on Wednesday reported
0 -8
T-Series becomes Jaypee case: Lenders on increased loading by telcos to increase
their capacity per site. This will support FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20P
elected government to take
aggressive steps to boost con-
a 16 per cent decline in its net
profit for the fourth quarter
first channel to put 5 riders to NBCC existing coverage during high traffic and E: Estimated; P: Projected; (Rentals in ~ '000 crore) Source: CRISIL Research sumption and expedite refor- ended March 31 at ~969 crore
cross 100mn users for considering bid congestion, CRISIL said in a note shared ms after a strong mandate the
with Business Standard. rulingBJPhasgotintherecent- India advanced 3.27 per cent in
BhushanKumar-ledmusic LenderstoJaypeeInfratechhave Hetal Gandhi, research director, For instance, the recent merger of half of FY18, owing to tenancy losses. ly concluded Lok Sabha elec- 2018-19, the slowest in four
labelT-Serieshasbecomethe askedNBCCtosweetenitsbidto CRISIL, said this loading results in a dis- Vodafone and Idea resulted in over The Indus Towers-Bharti Infratel tions. “The industry will do bet- years. As a run-up to the imple-
firsteverYouTubechannelto acquirethedebt-ladenrealty count to telcos (which need to pay just 57,000 tenancy losses. Moreover, reduc- merger, expected to be completed by late ter than the Society of Indian mentation of the Bharat Stage
crossthe100-millionsubscriber firmandhavedemandedthat 10-15 per cent of rent). This reduces the tion of around 21,000 tenancies is 2019, is set to create the world’s second- Automobile Manufacturers’ (BS)-VI emission norms, the
mark.Indoingso,ithasalso thepublicsectorfirmshould potential for higher top line of tower firms. expected in the first half of FY20. While largest mobile tower operator, with over (Siam) forecast,” he said at the biggest unknown is the extent
pulledaheadofYouTuber offer1,426acresinsteadof950 Telecom operators are pushing con- exit penalties are expected to partially 163,000 towers and 36 per cent tower company’s annual press meet. to which pre-buying will take
PewDiePie'schannels,and acresbesidestakingonusof sumers to shift to 4G network as it allows offset the revenue loss, the impact of ten- market share in India. Post-merger, the Uncertainty ahead of the elec- place and inventory planning.
becomesolidifieditspositionas gettingapprovalsfromincome them to offer more data services which ancy losses is expected to spill over to industry will have three large players tions, liquidity issues, and a Meanwhile, like most the other
themostsubscribedchannelon taxanddevelopmentauthor- convert to higher revenue. FY20 as well. controlling over 70 per cent of the tower prediction of below-normal manufacturers such as Maruti
theplatform.Tilllastmonth, ities.Accordingtothedirectionof Going forward, loaded sites are “The telecom sector is moving market. monsoon, among other factors, Suzuki India and Tata Motors,
SwedishYouTubecelebrityFelix theNationalCompanyLawApp- expected to account for a higher propor- towards an oligopolistic structure, with Meanwhile, with telecom operators had prompted the industry M&M too will discontinue its
ArvidUlfKjellberg'schannel ellateTribunal,lendersare tion of incremental tenancies. In addi- three players accounting for more than divesting tower assets, the industry is body to forecast a moderate 1.2-litre turbo diesel engine
PewDiePieandT-Serieslocked negotiatingwiththeNBCConthe tion, rentals may come under pressure 90 per cent market share. This will pose expected to the shift to pure-play inde- 3-5 per cent growth for passen- with the transition to BS-VI.
hornstobecomethemost latter’sbidtoacquireJaypee during contract renewals as telcos have challenges for tower firms and put pres- pendent tower firms from the operator- ger vehicle sales in 2019-20. Small-capacity diesel engine
subscribedchannel.Thetwo Infratechandcompletestuck higher bargaining power, Gandhi felt. sure on rent revenue per tower as the led model. “The government will have ‘will be too expensive’ to meet
havebeenplayingmusicalcha- housingprojectscomprisingover This is because telcos’ return on cap- number of tenants per tower would go Telecom sector debt remains elevated to turn the curve on demand,” the new norms and expected
irsforthetopspot.TheSwedish 20,000units.TheIDBI-ledlend- ital employed (RoCE) is less than around down. Also, the stressed financial con- due to high network investments and said Goenka, pointing out that to disappear from the market,
YouTuberevenreleased‘diss ers’consortiumhaswrittento 2 per cent, compared with tower compa- dition of debt-ridden telecom incum- spectrum price. CRISIL Research esti- growth in India’s passenger said Goenka.
tracks’makingfunofand NBCCsayingitsbidwouldbe nies’ RoCE, which is as high as 19-20 per bents will restrain any material hike in mates the total debt to be ~4.3 trillion as vehicle market has been taper- M&M on Wednesday repo-
throwingshadeatT-Series,and considered“favourably”ifthe cent. After a decline of about 7 per cent in rentals, at least over the medium term. of March 2019. ing off over the past five years rted a 16-per cent decline in its
manybelievethattheact firmmeetsitsfiveconditions. PTI< fiscal 2019, CRISIL Research expects the In addition, though the towers added Thus, telcos are resorting to measures due to frequent pace of regula- net profit for the fourth quarter
instigatedBollywoodfansacross rent revenue per tower to remain under by Bharat Sanchar Nigam and Reliance such as selling standalone towers or tory changes. ended March 31 at ~969 crore.
theglobetorallyinsupportofT- pressure and decline by another 2-3 per Jio account for a considerable share of reducing stake in existing tower sub- Rajan Wadhera, president, Revenue for the period rose 4.7
Series'channel. BS REPORTER< Cholamandalam cent in FY20. captive towers, the revenue from this sidiaries, to pare debt. For instance, Siam, and president-automo- per cent to ~13,808 crore over a
Investment raises Tower companies are already hit by does not flow to the industry,” Gandhi Vodafone and Idea, last year, sold 20,000 tive sector at M&M, said the year ago. On the back of weak
tenancy losses. Consolidation in the tele- added. standalone towers to American Tower industry lobby has made a rep- tractor volumes, margins dec-
FASTags can now be $222 million com industry has changed the dynamics A look at tower rentals in the past 12 Company (ATC) for around ~7,800 crore. resentation to the government lined to 13.5 per cent, from 15.1
purchased online InternationalFinanceCorpora- of tower firms. The latter reported mas- quarters indicate a stabilising trend till Also, Bharti Airtel had raised over ~12,000 to cut the goods and services a year ago. The company has
tion(IFC)hasanchoredadebt sive tenancy losses over the past one and the first half of FY18 and then a drop for crore through multiple rounds of stake tax rate on passenger vehicles recommended a dividend of
through Amazon investmentroundof$222mill- half years. the first time in five years in the second sale in Bharti Infratel. to 18 per cent, from the current ~8.5 (170 per cent) per ordinary
FASTagsarenowavailableone- ion(~1,550crore)intoChola- 28 per cent. (equity) share of the face value
commerceplatformAmazonto mandalamInvestmentand Passenger vehicle sales in of ~5 each.
furtherpromotedigitalpayment FinanceCompany.Themoney
oftollforseamlesstraffic,the
governmentsaidonWednes-
day.FASTagisareloadabletag,
willhelpMurugappaGroup’s
non-bankfinancingentityto
expandcreditaccessformicro
India Tourism may start working Cadila Healthcare net down 22%

out of Air India’s overseas offices

whichenablesautomatic
deductionofchargesattoll
plazas.TheonlineNHAIFASTag
shallbeavailableforcars,jeeps
andvansfornow.“FASTagsare
nowavailableone-commerce
platformAmazon...Theonline
NHAIFASTaghasbeenconceived
inaDIY(Do-It-Yourself)concept
whereinacustomercanself-
activateitbyenteringcustomer
andvehicledetailsinMyFASTag
mobileapp.Thereafter,the
customerwillhavetolinkthe
tagtoanexistingbankaccount
ofhis/herchoice,”theMinistry
ofRoadTransportandHighways
said. PTI<
Flipkart launches
in-house sports
brand Adrenex
FlipkartonWednesdayannou-
ncedthelaunchofanewpri-
vate-labelbrandAdrenex,
addingtoitsgrowingportfolioof
in-housebrandsinelectronics,
fashionandfurniture,asthe
Walmart-ownede-commerce
majortargetshighermargins
anddifferentiatedproduct
offeringstotakeonrivals.Apri-
vatelabelisabrand,whichis
designed,producedandmark-
etedin-house. PTI<
andsmallborrowers,especially
inruralandsemi-urbanparts.
Itisthefirm’sfirstdollar-synd-
icateddealsinceJanuary,when
theRBIpermittednon-bank
financialcompaniestotapinto
theoffshorecreditmarket.Of
the$92million,therestissyndi-
catedfromFirstAbuDhabiBank
($50million),MUFGBank($50
million),NationalBankofRas
Al-KhaimahPJSC($20million)
andCTBCBank($10million).
BS REPORTER<
Vedanta has
a warning
for Zambia
AnilAgarwal,ownerofVedanta
Resources,saidminingcomp-
aniesarelikelytostopoperating
inZambiaasaresultofastate-
ownedfirmseekingtoliquidate
hiscopper-miningbusiness
there.Agarwal’swarningcomes
ashiscompanyistryingtomeet
withPresidentEdgarLunguover
state-ownedZCCMInvestments
Holdings’movethismonthto
windupKonkolaCopperMines.
“Iseealotofminingfirmslook-
ingtoexitZambia,despitethere
beinghugepotentialtodevelop
downstreamindustries,”
hesaid. BLOOMBERG<
MEGHA MANCHANDA &
ARINDAM MAJUMDER
New Delhi, 29 May
Cash-strapped Air India may
soon join hands with the
Ministry of Tourism for a work-
ing partnership overseas. The
plan includes shifting of tourist
offices at eight overseas desti-
nations to Air India offices.
Discussions for the partner-
ship are on between the Mini-
stry of Civil Aviation and the
Ministry of Tourism. The move
is part of cost restructuring by
theMinistryofTourismandwill
requireittoshutofficesatprime
tourist destinations, like Lond-
on, Paris, Amsterdam, Toronto,
Tokyo, Sydney and Milan. As
part of the arrangement, India
Tourism will pay rent to Air
India along with a nominal
amountfortheservicerendered
by the Air India staff.
India Tourism, that had
close to 15 such overseas offices,
wasaskedbythegovernmentto
bring the number down in two-
three years and shift operations
to the embassies in those cities.
But the tourism ministry argu-
India Tourism will pay rent to Air India along with a nominal
amount for the service rendered by the Air India staff
ed that the embassies are better
equipped to handle diplomatic
relations while travel and tou-
rism promotion related matters
should be with India Tourism.
The embassies also raised secu-
rity concerns, saying that they
cannot be opened to unlimited
public access. “Since Air India
has offices in prime locations
in those cities, both functions
can be handled from a single
office and by the same work-
force,” said a person aware of
the development.
A clear-cut business deal
between India Tourism and Air
India could also help in clean-
ing up the books of the state-
owned air carrier before the
Union government starts the
process of the airline’s sale.
Air India reported a net loss
of ~5,377.7 crore in the financial
year2017-18andtotalrevenueof
~23,900.4 crore.
There was more than 10 per
cent increase in the company’s
total expenses, including a
jump in fuel cost, at ~29,125.8
crore. After a failed attempt at
selling the national carrier last
year, the central government
has re-started the process and is
believed to have approached
business houses.
KLM increases
India flights
KLMisincreasingitsflightsto
Indiaandtakingoverslotsit
gavetoJetAirwaysatAmster-
damairport.Jet,whichoper-
atedfourdailyflightsfromAm-
sterdam(Mumbai,Delhi,Ben-
galuruandToronto),suspended
operationsonApril17.KLMis
steppingintofillupthecapacity
voidcausedbyJet’sgrounding.
FromOctoberend,theDutch
airlinewilllaunchthrice-weekly
servicefromAmsterdamto
Bengaluruandoperatedaily
flighttoMumbai.Currently,it
hasadailyflighttoDelhiand
thrice-weeklyservicetoMum-
bai.“Thethrice-weeklyconne-
ctionfromBengaluruwillopen
upmoreopportunitiesfortravel
fromIndiawitheasyconnec-
tionstoEuropeandNorthAmer-
icaviatheconvenienthubof
AmsterdamSchiphol,”KLMsaid.
JetmoveditsEuropeangateway
fromBrusselstoAmsterdamin
2016forgingclosecommercial
tieswithAirFrance-KLM
andDelta. ANEESH PHADNIS
AhigherinterestchargeonaccountoftherecentHeinzacquisition
hasseenCadilaHealthcare(ZydusCadila)posta22percentfallinits
consolidatednetprofitforthequarterendedMarch31,to~460
crore,fromthesameperiodayearbefore.Totalrevenueforthe
quarter,thefourth(Q4)andfinalonein2018-19was~3,771crore,
upfrom~3,282croreinthecorrespondingquarterlastyear.The
consolidatedresultsincludetheacquiredbusinessofHeinzIndia
fortwomonths.Cadila’sUSbusiness,halfitssales,hadflatyear-
on-year(YoY)growth,evenasitfellby6percentonaquarter-on-
quarter(QoQ)basis.Analystsattributedlowermarketshareamid
heightenedcompetitionforitskeyproduct,Lialda,intheUSforthe
flatperformance,thoughitmetthecompany'searlierforecastfor
$900millioninsales. VINAY UMARJI
Adani Enterprises PFC annual profit
net rises 47% at record high
Adani Enterprises (AEL) has State-runPowerFinance
reported a 46.87 per cent Corporation(PFC)reporteda
jump in consolidated profit to recordstandaloneprofitof
~266.09 crore for the fourth ~6,953croreforthefullyear.
quarter ended March, mainly Forthefinalquarterof2018-
driven by higher income. Its 19,itwas~2,118crore.Compa-
consolidated net profit for the nyofficialssaiddebtresolution
same quarter last year was foritsstressedassetswasund-
~181 crore. The total consolid- erway.The~2,118croreprofit
ated income for Q4 of FY19 fortheMarchquarterwas
stood at ~13,473 crore, as morethandoublethe~796
against ~10,548 crore in the croreinthesameperiodayear
same period last year. On a beforeatthestandalonelevel.
standalone basis, AEL Thefull-yearstandaloneprofit
registered a net profit of ~331 of~6,953crorewas58percent
crore for the quarter ended higherthanthatin2017-18.
March 2019, as against ~61 Full-yearconsolidatedprofitat
crore for the same period ~12,640crorewashigherby7
last year. VINAY UMARJI percent. AMRITHA PILLAY

‘Transition from BS-IV to BS-VI Tata Motors’ biggest challenge’

Tata Motors closed the March quarter in line with Street expectations, despite facing ones of which will particularly hit diesel the personal segment is concerned, we
its toughest years in recent history. GUENTER BUTSCHEK, chief excutive officer and managing engines. The compliance therein will believe that progressive and rapid pen-
director (CEO and MD), told T E Narasimhan why 2019-20 is expected to be an extraordinary particularly be more expensive com- etration of EVs in the next decade is not
year for Tata Motors. Edited excerpts: pared to that required for petrol vehi- possible until the personal segment
cles. If we set aside the price increase also adopts them. It is five-six times
What is your outlook and strategy for OMEGARC and ALFARC. We are set to due to BS-VI, the narrowing price differ- larger in size than the fleet segment.
the passenger vehicles (PV) industry? introduce our premium hatchback ence between petrol and diesel itself
How many launches are on cards? Altroz in the market in the coming few raises a pertinent question in terms of How do you see the commercial
With the election results out, there is months. The launch should help amortisation of higher cost of diesel vehicles (CV) industry performing
expected to be some certainty extend our current market cars. This becomes compounded by the this year?
going forward, especially share. This will be followed by expected price hike due to BS-VI norms. One of the key focus areas in our turn-
among the first-time buyers, the launch of our seven-seater We are sceptical in terms of future pro- around journey is to be less vulnerable
who did not enter the market in SUV, codenamed H7X, along- duction of small displacement engines to volatility. Currently, we are in a mut-
the last five-seven months on side the BS-VI updates of our upto 1.2 litres. But, in higher displace- ed demand environment. Hence, we
account of political uncertainty. existing models towards the end ments of 1.5 litres and above used in need to understand our customers’
Apart from this, the much-talked- of FY20. mid-size and large SUVs as well as requirements and the market condi-
about transition from BS-IV to BS-VI sedans, there is no other practical alter- tions for a sustainable growth. Also,
has been the biggest challenge in the Any plans to exit the small diesel native to diesel. Petrol engines in that based on past sales, one needs to evalu-
last few months. At the company level, car segment after BS-VI? range will have a significantly higher ate the volumes and product mix at a
we are prepared to meet the BS-VI We have taken a two-step approach fuel consumption. So, we are certain nies’ expertise and ongoing collabora- directed towards this segment. micro level, to better understand what
deadline. With Turnaround 2.0 into with regard to BS-VI norms that take that high displacement diesel engines tion with other ecosystem players, we Currently, the Tigor EV, apart from worked and predict the way forward.
play, we have strategised a renewed effect on April 1, 2020, as well as the will remain a viable option. intend to offer a comprehensive range serving the order by Energy Efficiency
focus on the PV business by controlling CAFE regulations that kick in during of EVs and other ecosystem solutions. Services, is also being sold in the fleet What are your capex and
costs, filling in product gaps and tap- 2022. Of the two, BS-VI is more signifi- What is Tata Motor’s electric vehicles At present, we foresee the primary segment. In future, we will have more investment plans?
ping the white spaces that will emerge. cant, in terms of its far-reaching effects (EV) strategy and FAME 2 orders? market for EVs for the next 4-5 years to products serving this segment and will Our annual capex remains the same
We have consolidated our vehicle plat- across the industry. BS-VI already Using Tata Motors’ in-house capabili- primarily be for the fleet segment. Tata be closely aligned to what the FAME2 and as per our policy we would not be
forms in PVs from six to just two – requires a technology step-change, ties coupled with Tata group compa- Motors will have multiple products scheme intends to promote. So far as able to share any investments plans.

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.
MUMBAI | THURSDAY, 30 MAY 2019 COMPANIES 3 <

Singapore court rejects Piramal to pare ~1K cr of Lodha debt in Q1

RAGHAVENDRA KAMATH ments/repaymentsof~200crore ~56,624 crore in FY19. Though Lodha is in the mid-

India plea against Nissan

ADITI SHAH & CEPA gives some protections to
SUDARSHAN VARADHAN Japanese firms investing in
New Delhi, 29 May India and vice versa.
India, which according to
Mumbai, 29 May
Piramal Capital & Housing
Finance is looking to reduce its
~1,000 crore of loan exposure to
Lodha Developers in the first
quarter of the financial year
2019-20 (Q1FY20).
“Aspartofourrecent annual
results, we had announced that
YTD (year-to-date),” the
spokesperson said.
Reports on Wednesday said
Piramal is in talks with
Goldman Sachs to sell ~2,000
crore worth of Lodha loans.
However, the company
spokesperson did not comment
on the matter.
Piramal’s exposure to Lodha
However, the share of real
estate loans in the book has
come down from 83 per cent in
FY15 to 63 per cent in FY19 as
part of Piramal’s plans to diver-
sify and de-risk its book.
In February this year,
Piramal Enterprises along with
Canada’s Ivanhoe Cambridge
invested ~500 crore equity in
dle of selling 28 per cent equity
stake in London properties to a
buyer, there have been delays
in the receipt of funds from the
sale, Moody’s said. The amount
received is substantially lower
than Moody’s expectations.
Saranga Ranasinghe, assis-
tant vice-president and analyst
at Moody’s, said while Lodha

T
he Permanent Court of
Arbitration in Singapore
has rejected India’s argu-
ment that the court does not
have the jurisdiction to rule on
a case brought against India by
Japan’s Nissan Motor, accord-
ing to two people and docu-
ments reviewed by Reuters.
If India had won the plea,
the entire case would have been
thrown out, said one of the peo-
ple who has direct knowledge
of the matter, adding that the
Indian government is now like-
ly to file an appeal with
Singapore’s Supreme Court.
Nissan sent a legal notice to
India in 2016 claiming more
than ~5,000 crore ($720 million)
in a dispute over incentives it
said were due from Tamil Nadu
as part of a 2008 agreement to
THE STORY SO FAR
| Nissan has sent legal
notice to the Indian
govt in 2016
| It claimed $720 mn in
unpaid dues, damages
set up a car manufacturing
plant in the southern state.
The Japanese car maker
brought the case against India
| India argued that court
does not have jurisdiction
| If India would have
won, the case would be
thrown out
for alleged violation of a
Comprehensive Economic
Partnership Agreement (CEPA)
the country has with Japan. The
the source agreed to have the we would look to systematically has come down from ~4,300 Lodha’s Palava project. has assets that it could sell to
arbitration in Singapore, filed a bring down our single borrower crore as of September-end 2018 Lodha has been facing improve its liquidity position,
plea in 2017 saying the arbitra- exposure to Lodha Developers. to ~3,800 crore in December rough weather in recent uncertainty remains around the
tion court in Singapore does not In line with that focus, ~1,000 2018, Khushru Jijina, managing months. Two rating firms — company’s ability to execute
have the authority to rule on the crorewillbereducedwithinthis director, Piramal Capital & Moody’s and Fitch — have these asset sales in a timely
case for many reasons, includ- quarter itself,” a Piramal Housing Finance, said in a downgraded their outlook on manner and at values that
ing that it was a tax-related mat- spokespersonsaid.“Inaddition, recent conference call. Lodha Developers back to back would be sufficient to address
ter outside the purview of the we have also received prepay- Piramal had a loan book of in the recent weeks. the liquidity needs.
CEPA with Japan.
The international tribu-
nal, in a 140-page order dated
April 29, denied India’s objec-
tions, saying it has the
authority to rule on the mat-
ter and would hold the final
hearing in February 2020
after submission of evidence
and arguments from both
sides. The order has not pre-
viously been reported.
Nissan said it “continues to
work with the government to
resolve this matter”. REUTERS

Google CEO shunned

a huge stock award
MARK BERGEN & ANDERS MELIN
San Francisco/New York, 29 May

Sundar Pichai was, for years,

one of the world’s highest-paid
corporate executives. Now he’s
facing the opposite reality: No
big paychecks at all.
The Google chief executive
officer hasn’t received an equi-
ty award in more than two
years.AkeyreasonisthatPichai
turned down a big new grant of
restrictedstockin2018because
he felt he was already paid gen-
erously, according to a person sparked a new round of con-
familiar with the decision. troversy for the mild-man-
It’s unclear how much he nered executive.
passed up. But another giant A Google spokeswoman
payday — on top of hundreds declined to comment, and said
of millions of dollars in previ- the Alphabet board won’t com-
ous awards — could have ment either. BLOOMBERG

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4 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 30 MAY 2019

“It is certain that they (Congress, JDS) will go home “Post-election ground analysis revealed “I did not start the controversy... I had said
fighting each other. We are 105 (MLAs), we are two big reasons. First, the atmosphere in that eloquence of silence is difficult but far
ready to wait. Let them work efficiently or resign the country rubbed off on Delhi as well. more desirable to see the elections through
and go. By creating an atmosphere of confusion Second, people saw this poll as a Modi instead of creating ill-timed controversies.
and loot, they cannot be forgiven“ and Rahul fight, and voted accordingly” This is what I had said and I stand by that”
B S YEDDYURAPPA, Leader of Opposition, Karnataka Legislative Assembly ARVIND KEJRIWAL, Delhi chief minister SUNIL ARORA, Chief Election Commissioner
>

Fadnavis moots penalty

on lenders failing to India to battle it out with Bond yields
rally in May on
meet crop-loan target
ABHIJIT LELE
Mumbai, 29 May
US, UK to tax digital firms
DILASHA SETH
rate cut hopes
Maharashtra Chief Minister ANUP ROY
Devendra Fadnavis has moot-
New Delhi, 29 May
Mumbai, 29 May
FPI NET INVESTMENT
ed an idea to impose penalty IN DEBT (~ crore)

on banks for failing to meet
lending targets of farm loans,
especially crop loans, in the
state that is reeling from agri-
culture distress.
He rubbished claims by
banks that they could not
meet crop-loan targets due to
draught conditions. “There
are widespread complaints
from farmers about problems
in getting money (loans),”
Fadnavis said while address-
ing State Level Bankers’ Com-
mittee (SLBC), Maharashtra.
The crop-loan target for
FY19 was ~58,324 crore for
Maharashtra, but actual dis-
bursements were at ~31,231
crore. So the lenders met 54
per cent of crop-loan target in
FY19. The disbursement was,
IN BRIEF
India moves to 43rd
in competitiveness;
Singapore tops chart
however, 23 per cent higher
than that in FY18. At present,
there is no legal arrangement
for levying fine on lenders for
failing to meet loan targets.
SLBC Maharashtra’s convener
bank, Bank of Maharashtra,
will be writing to bank chiefs
on the thrust on meeting FY20
lending targets. “There has to
be accountability for perfor-
mance (targets) in banks with
respect to the farm sector. The
state government is paying
banks amounts that have
been waived off. Decisions
taken at top levels do not seem
to be percolating to people
working at bank branch lev-
els,” Fadnavis said.
US rules out sanction
exemptions from
Iranian oil import
I
ndia will press for widen-
ing the scope of perma-
nent establishment to tax
digital enterprises such as
Google, Facebook, Microsoft,
and Netflix at the Organisation
for Economic Co-operation
and Development (OECD)
Base Erosion and Profit
Shifting (BEPS) Inclusive
Framework meeting in June.
With G24 backing, it will
fight it out with the US and the
UK to push through its ‘signif-
icant economic presence’ pro-
posal at the OECD, as 128
counties sit together to put in
place a multilateral instru-
ment to bring these compa-
nies into the tax net.
In its representation, India
has pitched for ‘significant
economic presence’ principle,
arguing that permanent estab-
lishment should not only
require a fixed place of busi-
ness and that the definition of
‘nexus’ needs to be changed,
to give more taxing rights to
market-driven economies, or
developing nations. The US,
meanwhile, is pressing for tax-
Since the beginning of May,
-2,601.1 20,000
10-year bond yields have fall-
en 28 basis points, as investors 1,040.0
factor in sharp rate cuts by the
Reserve Bank of India (RBI) 10,000
after the ruling BJP’s resound-
ing victory at the polls.
Most of the movement in 0
yields have come after the exit
poll results, as foreign portfolio
investors also increased their -10,000
investments in Indian bonds. Jan ‘19 May ‘19
The 10-year bond yields closed Till May 27, 2019
at 7.13 per cent, two basis
points lower than the previous INDIA 10-YEAR
close, but considering that the
yields were at 7.41 per cent at G-SEC YIELD (%)
the end of April, the move-
ment is pretty sharp. 7.80
package. The OECD report on Therefore, India’s proposal tors for determining corporate The bond market expects 7.37
the subject will be finalised in of the significant economic profits attributable in a tax at least 25 basis points cut in 7.60
2020. India has the backing of presence will establish the jurisdiction. According to the the June 6 policy, but it is
28 countries of G24. nexus between remote and US’ ‘marketing intangibles’ divided on if the stance would
At present, when a non-res- digital engagement of non-res- principle proposal, the current be changed to accommoda- 7.40
ident business supplies goods ident businesses with Indian tax allocation rules would tive. While most economists
and services, its profits may be consumers, providing a basis change, so that the market expect a cut, some are advo- 7.20
taxed attributable to the oper- for taxation of the income. jurisdiction (where users are cating a pause in the policy. 7.13
ations in that country, based In the Budget last year, the located) would be entitled to “The bond market has 7.00
on its ‘fixed place of
business’ or perma- India has pitched
government pro-
posed that the
tax some or all of the ‘non-rou-
tine’ income properly associ-
baked in a rate cut of 25 basis
points, if the stance also
Dec ‘18 May ‘19
Sources: Sebi (NSDL), Bloomberg
nent establishment, for ‘significant number of Indian ated with such intangibles, changes with that, there will compiled by BS Research Bureau

India has moved up one place to
rank 43rd most competitive
economy in the world on the
back of its robust economic
growth, while Singapore has
toppled the US to grab the top
position, a global study showed.
Singapore has moved up to the
top, from the third position last
year, while the US has slipped to
the third place in the 2019
edition of the IMD World
Competitiveness Rankings. PTI<
FinMin may look at
10-yr tax holiday on
builders’ rental profits
The finance ministry may look at
a 10-year tax holiday for
developers on profits earned
from rental housing as it looks to
revive investment and boost a
slowing economy, sources said.
In a recent meeting with senior
finance ministry officials, realtors
have been asked to suggest steps
to address challenges faced by
the sector. PTI<
The US has ruled out giving any
exemption from its punitive
sanctions to countries,
including India, for buying oil
from Iran, saying America's
maximum pressure campaign
was working and the Trump
administration remains
“unwavering” in its tough
policy on Tehran. PTI<
Modi united India
like no PM in
decades: TIME article
Weeks after TIME magazine
featured Narendra Modi on the
cover of its international
edition with a controversial
headline, it has now run an
article that says no PM has
united India in decades the
way he has done. The article
titled Modi Has United India
Like No Prime Minister in
Decades is written by Manoj
Ladwa, founder of the India Inc
Group, a London-based media
organisation. PTI<
ing digital economy through
the ‘marketing intangibles’
principle and the UK through
a ‘user-base’ principle.
“We are seeking changes in
the digital economy taxation
rules. The definition of nexus
needs to be changed from hav-
ing a fixed place of business to
having a significant economic
presence. This should give us
more taxing rights. The US’
proposal of marketing intan-
gibles is too complicated to
work for developing countries,
while the UK’s user-base prin-
ciple is too basic. We need a
broader proposal,” said a gov-
ernment official.
The Inclusive Framework
brings together over 125 coun-
tries and jurisdictions to col-
laborate on the impl-
ementation of the BEPS
NCLAT prods IL&FS amber firms to pay
AASHISH ARYAN
New Delhi, 29 May
according to the tax economic presence’, users and a revenue while ‘routine’ income would be a movement of another five
treaty. The defini- arguing that threshold should be continue to be allocated, based basis points. If there is no rate fear that the growth prospects
tion of permanent permanent used to tax the busi- on existing transfer pricing cut though, there will be a of the world’s largest economy
establishment is establishment ness profits of non- principles. Marketing intangi- chaos,” said Harihar may not be as robust as was
primarily based on should not only resident digital bles include brand, trade Krishnamurthy, head of trea- expected before. US-China
a fixed place of busi- require a fixed companies derived name, customer data, cus- sury at First Rand Bank. trade tensions are dragging
ness, and also place of business from Indian con- tomer relationships, and cus- Devendra Dash, head of global growth, which is reflect-
includes service or sumers. However, it tomer lists. risk at AU Small Finance ed in the softer oil prices.
construction activi- will require amend- However, India feels that Bank, said if the yields climb Despite Iran sanctions, oil
ties carried out beyond specif- ment of each double taxation the US’ proposal may not be up on no rate cut, it will soon prices are trading at $68 a bar-
ic duration, existence of a avoidance agreement partner, feasible, as it will be very diffi- start falling as the market is rel, from $74 earlier this year.
dependent agent, and collec- making it challenging. Hence, cult to compute income, con- pretty convinced that sooner At the same time, a significant
tion of insurance premiums. a multilateral instrument will
However, such a business be a better option.
sidering the volume of data
required for the purpose.
or later there will be rate cuts.
Bonds from big corporates
section in the market is
expecting the gross domestic
connection with the local New Delhi has said that “Most developing countries are also showing some signs product (GDP) numbers for
economy, in terms of a fixed there is a need to rework the don’t have that capacity to dis- of easing, at least in the short- the last quarter to come at
place of business, does not international tax framework tinguish routine and non-rou- er tenure. The corporate below 6 per cent. That may
exist in the case of remotely or regarding nexus and profit tine profit or identify and put bonds had remained elevated drag the annual GDP growth
digitally delivered goods and allocation rules. These should a value to intangibles of an even when government bond rate to just about 7 per cent, or
services. India has argued that take into account value creat- enterprise,” said another offi- yields were falling. After the even below that. The RBI in
today a non-resident can par- ed within the supply chain, cial. He added that UK’s user- election results, though, some that case will have to chip in
ticipate in the economic affairs representing the contribution based principle only talks of the corporate bond yields with rate cuts, said bond deal-
of a jurisdiction without being of supply side, along with con- about one part of the digital have fallen 15-20 basis points, ers. The landslide victory of
physically present there. tribution of demand-side fac- economy, making it restrictive. following the fall in rates by the NDA government has att-
government bonds. As yields racted foreign investors, look-
fall, prices of bonds rise. ing for an avenue to invest. In
State Bank of India’s chief May so far, FPIs have bought
economic advisor Soumy-
akanti Ghosh expects the six-
member monetary policy
~1,040 crore in Indian debt.
Krishnamurthy, the sys-
tem liquidity deficit being at
companies to service the debt debts in accordance with the and red, based on their finan- committee to cut rates by 50 ~25,000 crore, from nearly
on a “proportionate basis”, the February 11 order of the appel- cial health and ability to ser- basis points in the June policy, ~60,000-70,000 crore a month

Modi to host West Coast Paper Mills The National Company Law
two-judge Bench said. The oth- late tribunal, in which it had
er firm of the allowed firms un-
vice debt obligations to secu-
red and unsecured creditors.
but Goldman Sachs’ Prachi
Mishra and Andrew Tilton
ago, and the RBI’s indication
to provide enough liquidity in
China’s Xi for to buy International Appellate Tribunal (NCLAT) IL&FS, which der the green cat- The appellate tribunal also sees rates to remain stable in the system through open mar-

informal summit
Prime Minister Narendra Modi
will host Chinese President Xi
Jinping this year for an informal
summit, an Indian foreign min-
istry spokesman said, after me-
eting several times over the past
year to try to defuse tension. The
two held their first informal su-
mmit in Wuhan in April 2018 and
then Xi had accepted Modi's
invitation to come to India. PTI<
Paper APPM
West Coast Paper Mills has
entered into a pact to buy 51-60
per cent in International Paper
APPM, a subsidiary of US-based
International Paper, for ~275 a
share, which works out to
~557.8-656.2 crore. It will also
make an open offer to
International Paper APPM's
non-promoter shareholders,
who have a 25 per cent stake in
the firm. BS REPORTER<
said on Wednesday if the
Infrastructure Leasing & Fina-
ncial Services (IL&FS) compa-
nies placed under the amber
category could not be reclas-
sified into the green category
by the next date of hearing on
July 12, the appellate tribunal
will pass orders asking such
companies to service 100 per
cent debt obligations of the
provident and pension funds.
For other lenders, the
NCLAT may ask the amber
may be classified Other IL&FS egory to start asked the government to pro- June as the RBI waits for past ket operations has buoyed the
green in the firms, which are servicing debt vide an updated report on the rate cuts to be passed by banks bond market sentiment.
future can service re-classified under within the reso- classification process of all to the customers first. “The government is
their debt obliga- the green category, lution framewo- IL&FS group companies. So Whatever be the expecta- expected to front-load its
tion automatical- can automatically rk under the far, 55 companies have been tions, there are solid reasons spending, and that would cre-
ly. The new board start servicing supervision of placed under the green cate- why the bond yields are falling ate additional liquidity, which
of directors of their debts retired Supreme gory and 13 have been placed in India. Globally, yields have is positive for bonds,” said
IL&FS can permit Court Judge under the amber category. softened, led by an inversion Krishnamurthy.
such firms to ser- Justice D K Jain, A total of 82 companies in US yield curve. The US 10- However, it is highly
vice their obligations to lenders, the NCLAT said on Wednesday. have been placed under the year yields have fallen below unlikely that the 10-year
a two-member Bench led by The new board at IL&FS red category, while 11 are yet the three-month yield and yields can fall below 7 per
Chairperson Justice S J had classified IL&FS group to be classified, the counsel overall, the yields have cent, considering the heavy
Mukhopadhaya said. companies into three cate- appearing for the new board fallen 5-6 basis points across supply of government bonds,
Such firms will service their gories, namely green, amber, of IL&FS said. the curve. This gives rise to the according to bond dealers.

Maharashtra’s drought-free state plan by 2019 comes a cropper

Second part of the series maps how over 40%
talukasin the state still face water crisis
AMRITHA PILLAY
Mumbai, 29 May
In April 2016, Maharashtra
operated the water train to sup-
ply drinking water to drought-
affected Latur.
In the same year, the state
embarked on its Jalyukt Shivar
Abhiyan to become drought free
by 2019. Despite the ambitious
plan, 40 per cent of the
state is reeling from
drought and its water
tanker economy is
booming. Jalyukt Shivar
Abhiyan aimed at mak- MAN Vs
ing Maharashtra a DROUGHT
drought-free state by
deepening and widen-
ing streams as well as
constructing cement
and earthen stop dams,
nullahs and digging
farm ponds.
But, as of February 2019, the
state government declared
drought in 151 of the 358 talukas.
In these talukas, 28,524 villages
have been declared drought affect-
ed. Of this, 112 are severe drought
hit. While activists say that the
Jalyukt scheme has failed after a
spectacular start, government offi-
cials defend their work, claiming
the last monsoon rainfall was at a
historical low. According to
Central Water Commission (CWC)
data, reservoir storage during the
current year has been less than the
storage last year for the western
region, which includes the states
of Gujarat and Maharashtra. “It is
also less than the average storage
in the last 10 years of the corre-
sponding period,” the
commission’s report
suggested. Of the 19
reservoirs that the CWC
monitors in Mahar-
ashtra, five were record-
ed as completely dry on
May 23. Between FY17
and FY20, the state bud-
get allocated ~5,200
crore towards the
Abhiyan. Eknath
Dawale, secretary, water
conservation and employment
guarantee scheme (EGS), said the
total expenditure for the scheme
from various sources stands at
~8,000 crore.
Despite the allocation, 40 per
cent of the state is now struggling
to get access to water for basic
needs. The shortage has brought
to fore the conflicts yet again.
Earlier this month, the local
media reported that a first infor-
mation report (FIR) was filed for
water theft from a residential
over-head tank in Maharashtra’s
Manmad district.
“The scheme started on a good
note. Had they (officials) main-
tained the momentum, it would
have worked. However, what start-
STATE RAINFALL SHARE
Percentage departures of rainfall from the
long-period averages for districts in Maharashtra
From March 1
to May 29, 2019
ed as a community work-driven
scheme, got converted into a con-
tractor-driven one, and the
decline started,” said Rajendra
Singh, water conservationist who
is also known as waterman.
Dawale, however, refutes
claims that the scheme failed.
“Nothing went wrong with the
scheme. September rainfall was at
n Deficient (-20% to -59%)
n Large deficient (-60% to -99%)
n No rain (-100% )
Note: Rainfall figures are
based on operation data
a historic low of 26 per cent and
storage was not replenished. We
have created the spots. Only those
works which are large are given to
contractors while smaller works
are community driven,” he added.
State authorities responsible
for drinking water supply claim
that the affected areas have been
provided drinking water through
tankers. Sham Lal Goyal, addition-
al chief secretary, water supply
and sanitation department of the
state, said 216 government tankers
and another 5,643 private ones
have been roped in to supply
drinking water. Goyal pegs the
cost to government for private
tankers at over ~4,000 per
tanker per day. However,
activists working on the ground
point out that a tanker lobby
is flourishing. “A family of
four will have to pay ~3,000
or more for their water
needs,” said Ranjit Acharya, a
Latur resident and a social
activist. That compares to the
average household monthly elec-
tricity bill in a city like Mumbai.
Though private tankers are
expected to supply water for free,
activists add the process involves
touts and other middle-men, who
villagers in some parts of the state
may need to pay off.
In districts like Latur, Acharya
points out that water was a big
issue during election campaigns.
“This has been an election issue
since the last two years. They talk
about water restoration projects
and make promises of water
trains. Last time, the water train
only helped the city, not the dis-
trict. The people feel that if some-
thing has to change, they will need
to do it themselves,” he added.
Most agree that the situation
will change only with community
efforts. “The Jalyukt Shivar
worked well in some places like
Sangli, where the community
helped develop restoration pro-
jects. When the community builds
these, they also fight for its sus-
tainable use,” said Singh.
Parallel to the tanker economy,
some of these drought-affected
areas are also witnessing the boom
of mineral water facilities.
“These companies set up bore
wells, pump water and fill them
into plastic jars and sell. There is
no check on the water quality and
these are sold at double the rate
in Aurangabad,” said Subhash Lo-
mte, social activist from the city,
who was also an Aam Aadmi
Party (AAP) Lok Sabha candidate
in 2014. As the state approaches
the end of May, some activists feel
relief for the drought-prone areas
is near. Some parts of the state
start receiving early pre-monsoon
showers by May-end, they added.
Goyal is also hopeful the state
will not need its water train this
summer. But the recently
announced delay in the onset of
monsoon could mean that the
worst is not yet over for farmers
and others in Maharashtra.
Part three of the series will look at
Gujarat

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6 POLITICS & PUBLIC AFFAIRS
>
RBI constitutes task
force on market Gourmet to troubleshooter FM
for corporate loans
ANUP ROY
Mumbai, 29 May
T
he Reserve Bank of
India (RBI) on Wednes-
day constituted a task
force on the development of
secondary market for corpo-
rate loans. In India, banks sell
their stressed loans to the asset
reconstruction firms, but has
practically no other alterna-
tive. However, globally, there
is a healthy corporate loan
market where banks can off-
load their stressed assets and
those get traded. Credit Def-
ault Swaps against these loans
also get developed as a result.
“A vibrant, deep and liquid
secondary market for debt
would go a long way in
increasing the efficiencies of
the debt market in general and
would aid in resolution of
stressed assets in particular. A
well-developed secondary
market for debt would also aid
in transparent price discovery
of the inherent riskiness of the
debt being traded,” the RBI
said in a statement.
In April policy, the RBI had
suggested composition of
such a committee. The terms
of the committee, which
should submit its report by the
end of August, would be to
suggest required policies for
facilitating development of
secondary market in corporate
loans, including loan transac-
tion platform for stressed
assets, creation of a loan con-
tract registry, its ownership
structure and related protocols
such as standardisation of
loan information, independ-
ent validation and data access.
The task force would
design the market structure
for loan sales/auctions, includ-
ing online platforms and the
related trading and transac-
tion reporting infrastructure.
More on business-standard.com
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RBI breather for NBFCs
The Reserve Bank of India (RBI) on Wednesday extended the
relaxation given to the NBFCs on minimum holding period
of their secutised assets, for loans above 5 years, till
December. The relaxation was first offered at the end of
November last year for six months.
RBI panel for mortgage
securitisation market
SUBRATA PANDA
Mumbai, 29 May
To develop the housing
finance securitisation market
in India, the Reserve Bank of
India (RBI) on Wednesday
formed a committee to review
the existing state of mortgage
securitisation and suggest
ways to develop the market
further under the chairman-
ship of Harsh Vardhan, senior
advisor, Bain & Co.
The committee has been
asked to submit its report by
the end of August 2019.
The newly appointed com-
mittee has been mandated to
examine the existing structure
for mortgage-backed securiti-
sation transactions in India,
including legal, tax, valuation
and accounting-related issues.
It has also been asked to sug-
gest necessary modifications
to address the requirements
BS REPORTER
of originators and investors.
The RBI has asked the
committee to also suggest
measures for facilitating sec-
ondary market trading in
mortgage securitisation instr-
uments, such as broadening
investor base, and strengthen-
ing market infrastructure.
Moreover, it has been
tasked to analyse the inter-
linkages between securitisa-
tion and other related
financial market instruments
and suggest policy interven-
tions to leverage these inter-
linkages.
The mandate of the com-
mittee also requires them to
evaluate the role of various
counterparties, including the
servicers, trustees, rating
agencies in the securitisation
process, and suggest meas-
ures required, if any, to
address the key structural,
fiduciary and servicer risks.
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NEWSMAKER: ARUN JAITLEY
ADITI PHADNIS
New Delhi, 29 May
Arun Jaitley, who’s played a critical role
in the Narendra Modi government
over the last five years, was the centre
of attention on Wednesday as he cited
health reasons to opt out of the
Cabinet. A day ahead of the swearing-
in ceremony of the council of minis-
ters, nothing could be bigger than this.
As Finance Minister (2014-19), his
contribution was political much more
than economic. After a two-term
tenure of the United Progressive
Alliance (UPA) when L K Advani
seemed loath to leave the spotlight and
the BJP seemed to be staring at a polit-
ical dead end, Jaitley was one of those
who pushed and propelled Narendra
Modi centre-stage, edging out his for-
mer mentor. Little wonder then, that
not only was he given the most impor-
tant portfolio in the Modi government
— finance — but his protégés, Piyush
Goyal, Nirmala Sitharaman, Prakash
Javdekar, Ravishankar Prasad and
many others, also got important posi-
tions.
His friends and followers in govern-
ment reflect a conviction he has held
all his life: the talent available in politics
is inversely proportional to the power
politicians wield. Because parties are
— mostly — deficient in internal
democracy, people coming into politics
are subject to no quality control.
They form political parties that
have no quality control systems. These
parties became one-person operations
at best; and caste-driven set ups at
worst. Caste provides legitimacy to
anti-social behaviour through bogus
kinship appeals. Naturally, gover-
nance-related issues get a short shrift.
Caste is a peculiar problem in India
and it provides an additional twist in
the tale. Criminals in politics are
defended through caste appeals.
Jaitley has never been against affirma-
tive action-type of politics, only its fall-
out — the rise of caste-based parties,
which seem to have no superstructure
of governance or ethics driving it. “I
am totally opposed to non-ideological
politics,” he told Business Standard in
an interview a few years ago.
Because of this conviction, Jaitley
has nurtured professional talent, pro-
tected it and pushed it to its full growth
potential.
This is because he has seen his own
growth being nurtured by his seniors
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MUMBAI | THURSDAY, 30 MAY 2019
– both in the family and in politics. He were rich if they had cash. Credit was national Emergency (June 26, 1975) was
had no inheritance: he comes from a expensive, labour was highly
family that was based in Lahore and unionised, jobs, even for professional
Amritsar. During the Partition, his engineers were scarce. India’s ambi-
mother, who was expecting her first tions soared when its people went
child, Jaitley’s elder sister, had come abroad. But here, they had to be kept
imposed to help her cope with the chal-
lenging circumstances and most polit-
ical leaders were sent to jail. For 19
months, Jaitley, the promising young
boy who seemed to have such a nice
to her parents’ home for her delivery. in check. Jaitley’s well-wishers, while safe, middle class future was pitch-
His father would visit but when the sympathetic to his desire to become an forked into the hurly burly of under-
family’s first daughter was born in engineer, urged him to study com- ground politics. Rather than dodge the
June 1946 amid the raging riots of the merce and become a chartered police, he opted for arrest in 1974 and
Partition, they decided to stay on in accountant instead: that was a profes- was locked up for 19 months.
India and moved to Delhi in a house sion much in demand those days. During his stint in jail, Jaitley devel-
abandoned by a Muslim family and That is why Jaitley joined SRCC, oped a taste for good food. “One of my
declared evacuee property. considered a top of the senior colleagues described me as both
His family are Brahmins line business school. a gourmet and a glutton,” he had told
from Punjab. As elsewhere He could hardly have Business Standard. During the 19
in India, in Punjab too, the Jaitley has known how useful the months in jail, he got a first class in his
caste had little land but nurtured skill of reading a bal- second year of law and decided to make
placed a tremendous pre- professional ance sheet would be in law his career.
mium on education. talent, the future. Between 1977 and 1979, he came
Opportunities did not exist protected it and By this time, Jaitley close to many stalwarts of the JP move-
for exalted university edu- pushed it to its had already become an ment. He was also put on the Janata
cation. But school teaching, full growth
potential
activist of the Akhil Party’s national executive. In 1980 elec-
law and science were con- Bharatiya Vidyarthi tions, the Janata Party was defeated
sidered respected streams. Parishad (ABVP), the resoundingly. By then, Jaitley had
Jaitley’s seven uncles were youth wing of the already bid temporary adieu to politics
educated by his grandmother at a time Bharatiya Jana Sangh. He had contest- and decided to concentrate on his legal
it was both expensive and hard to edu- ed the local college union elections and career and left the ABVP.
cate. So the extended family grew up ABVP was trying to persuade him to Jail taught him something: a
to value good grades, but more than contest the Delhi University Students’ strong bias in favour of strengthening
that, contributed to educate each oth- Union (DUSU) election.
er. All the brothers helped to fund the In 1974-75, this counted as an act of
education of one of them who trained subversion. Indira Gandhi was the
existing institutions, reform and rec-
tification rather than abolition. But
most of all, Jaitley has stuck to one
as a psychiatrist in the UK, studying in Prime Minister, but around her, all she
England to become an FRCS. But most- saw was people threatening her author-
principle throughout his life: never,
ever, to be a political activist who lives
ly, they studied and practised law. ity and trying to undermine it. A well without the means or the income
Jaitley studied in a missionary to live well.
school — St Xavier’s — and while in “There are people who change par-
school, although he opted for the sci- ties to save the roof over their heads.
ence stream believing ultimately that The political system does not pay you
engineering was what he wanted to enough to live properly. Salaries are
study, he joined the Bachelor of not enough to maintain the standard
Commerce programme at Sri Ram of living you get used to. Most politi-
College of Commerce (SRCC) under cians have learnt the art of living well
Delhi University. without working. I haven’t,” he said,
This was the India of the Nehru- “and I never will”.
Indira era, of big dams, abolition of Law and politics taught him a lot.
privy purse and bank nationalisation. But when Vajpayee became Prime
It was also the time of extended famine Minister, his appointment as minis-
in East Pakistan (later Bangladesh) ter for information and broadcasting
rationing in India (remember the con- (for a short period), disinvestment
troversy over whether Sanjay and and law prepared him for the
Menaka Gandhi’s wedding was consis- Finance Ministry in 2014. Most peo-
tent with the Guest Control Order?). ple forget that he was the only per-
But poverty and hunger per- son whom Modi appointed a
sisted in India. Locked minister despite losing
as the country was in the Lok Sabha election
the non-aligned- in a Modi wave.
but-sympathetic- What Pranab
to-the-Soviet Mukherjee was to
Union syn- UPA, Jaitley has
drome, entre- been to NDA.
preneurs
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8 ISSUES AND INSIGHTS
>
A flight that wasn’t
How did Naresh Goyal and his wife clear immigration at the
Mumbai airport if there was a lookout circular?
NOT FOR PROFIT
NIVEDITA MOOKERJI
A
powerful business tycoon being
deplaned and stopped from fly-
ing out of the country could any
day be a scene from a racy thriller. But
the dramatic sequence of events leading
Switching from slow to fast track
After languishing for over a decade, the DFC corridor
now has a new deadline. And it’s a race against time
SHINE JACOB
I
n January 2004, Australia commis-
sioned what is regarded as one of
the most difficult railway lines to be
ever built in the world — across the
inhospitable terrain from Alice Spring
in the north to the deepwater port of
Darwin in the south. Around the same
time, the Railway Board in India, head-
ed by Chairman R K Singh, was working
on pulling off a similar feat with a ded-
icated track for freight to speed up traf-
fic flow.
The project was shelved after initial
deliberations citing cost effectiveness,
but was given a fresh lease of life in
2006. But since it received the final go-
ahead, the Dedicated Freight
Corridor (DFC) has been
stumbling over hurdles —
from land acquisition issues
to cost escalation and delay
in implementation.
Nearly a decade and a half
later, however, DFC may
finally see the light of day
with the Narendra Modi gov-
ernment planning to com-
plete it by December 2021,
ahead of India’s 75th
Independence day in 2022.
According to multiple sources close
to the development, completion of
Eastern and Western Dedicated Freight
corridors by 2021 will be one of the key
priorities of the Modi government dur-
ing its second tenure. “The western and
eastern dedicated freight corridors,
covering 3,360 km of track across nine
states, are vital to increase the total traf-
fic of the Railways by at least 144 mil-
lion tonne (mt) by 2022,” said an official
close to developments.
In a strategic vision document pre-
pared in March, the Railways’ has set a
target to increase its share in the coun-
Competitor obsession promotes hubris
R GOPALAKRISHNAN
M
any Indian startups,
designed on Silicon Valley
principles, appear to be aim-
ing to destroy the enemy and to grab
the prize of winner takes all. In the pro-
cess, they are drowning in a dangerous
ocean of swirling losses. I cannot
understand why so many Indian uni-
corns are eulogised for business savvy
and growth even though they incur
every year a loss of three to four times
their revenue.
Commenting on Silicon Valley, The
Economist (April 20, 2019) reported
that 12 or so American unicorns that
have listed are likely to post combined
losses of $14 billion for the last year,
with cumulative losses of $49 billion.
The poster boy startup for stupidity in
funding and management preoccupa-
tion with valuations is Theranos.
Among well-established companies,
Xerox's inability to read emerging con-
sumer needs has been well document-
ed as a case of losing focus.
Cycles of human folly have played
out for centuries, so why would people
not continue withe their foolish acts?
On the flip side, there are magnificent
startups that invested heavily, incurred
losses but built up unbelievably valu-
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to Jet Airways Founder Naresh Goyal
and his wife getting off-boarded from
an Emirates flight to Dubai holds a mys-
tery that hasn’t been unravelled.
How did Goyal and his wife clear the
immigration at Mumbai airport if there
was a lookout circular, on the basis of
which they were told to get off the plane
some minutes later? With no clear
answer to the question from the author-
ities, there are two possibilities that may
have played out last Saturday when
Goyal, an NRI, almost left for Dubai
where he has a residence, and may have
wanted to proceed to London from there.
The first and the most likely scenario
a deconstruction of the event throws up
is that there was no lookout circular for
the Goyals but it may have been in the
making. That’s why the immigration,
which had no evidence of a lookout cir-
try’s overall freight basket from 33 per
cent to around 50 per cent by 2030.
Studies conducted by the World Bank,
which is funding the Eastern DFC with
a loan of $2.360 billion, and Japan
International Cooperation Agency,
which offering ~38,722 crore for the
Western DFC, traffic flow is set to reach
264 MT for eastern corridor and 284 MT
for the western corridor in 20 years.
The corridor is a massive logistical
exercise for the Railways. So far, the
Dedicated Freight Corridor Corporation
of India (DFCCIL) — a special purpose
vehicle for the project incorporated in
2006 — has awarded all contracts for
construction to begin, except for sys-
tem contracts for Khurja-Dadri and
Khurja-Ludhiana sections of
the eastern corridor.
Land acquisition was ini-
tially a big hurdle but by
February this year, nearly
98.5 per cent of the land has
been acquired — except for
the Sonnagar to Dankuni
section, which is in the pro-
cess of being acquired,
according to a senior DFC-
CIL official.
But the construction
work is only half way through and
meeting the target is a race against
time. On August 15 last year, the
Railways had conducted its first suc-
cessful trial run of the western corridor
covering a 190-km stretch from Ateli
to Phulera. This was followed by two
more trials between Badan and Khurja
(194 km of the eastern corridor in
November) and Madar and
Kishangarh Balawas (306 km on the
eastern corridor).
The delay has of course not been
without consequences for the Railways.
Though the initial cost of the project
was ~28,181 crore, a revised estimate in
INNOCOLUMN
able companies. Remember, it is not
the incurring of losses that is incorrect.
How come losses work for some, and
not for others? Winners are consumer-
focused, not competitor-focused.
Companies like Microsoft, Amazon and
Apple, which invested in deep tech-
nologies behaved differently from the
undifferentiated, copycat companies
that simply out-advertise competitors.
In my book, CRASH: lessons from
the rise and exit of CEOs, I have
reviewed the pernicious and damaging
effects of power on leaders. The sup-
pression of the empathy neurons in the
brain results in an over-assessment of
their capabilities — recall how
Napoleon invaded Russia foolishly in
1812 when he famously said that
Impossible is a word found only in a
fool's dictionary. Such an arrogant and
self-preening leader would be least
aware of the effect of power on his or
her behaviour.
As argued in some writings (Mark
Bonchek and Gene Corfield, Harvard
Business Review, April 28, 2016), cus-
tomers are individuals, who are sort of
tiny enterprises. Individually, con-
sumers are changing faster than the
company; their needs are quite liquid,
and they are concerned with the ser-
vice that suits them, not with the ser-
vice provider or the technology.
Changing consumer preference is the
reason why getting a management’s
eye off consumer-orientation produces
unintended consequences.
Modern design thinking lays great
emphasis on the role of empathy. This
is quite foundational and requires you
to put yourself in the hearts of people
and experience the feelings of the oth-
er person. When the voice of the prod-
uct, the voice of the system and the
voice of the process are all heard
together, then an infinitely superior
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cular, cleared them and the duo got into
their first class cabin on the plane. After
the Goyals cleared the immigration, an
alert, either at the airport or on the flight,
would have been sent to top government
officials, resulting in a flurry of activity
on the ground including giving the final
touches to the lookout circular. By the
time the Goyals returned to the Mumbai
airport after being de-boarded from the
Emirates flight, the authorities were pos-
sibly ready with the lookout circular
issued by the Serious Fraud Investigation
Office (SFIO), stopping them from trav-
elling overseas. It is not known who at
the Mumbai airport or from the Emirates
flight raised an alarm that Goyal and his
wife, with unpaid dues of more than
~8,500 crore, were leaving the country.
Functionaries in the SFIO, under the
Ministry of Corporate Affairs, later clarified
FREIGHT
MOVEMENT
Total Distance:
Maximum speed:
3,560 km 100 Kmph
Eastern Dedicated Freight Western Dedicated
Corridor: Freight Corridor:
LUDHIANA TO DANKUNI JAWAHARLAL NEHRU
1,856 Kms Of this, 538 PORT TERMINAL (JNPT)
Kms from Sonnagar to TO DADRI
Dankuni are under PPP 1,504 Kms
2015 pegged it at ~81,459 crore — fac-
toring in price escalation and interest
during construction.
“DFC was initially conceptualised
with a lower axle load, which was later
increased to a heavier 32.5 tonnes sub-
structure axle load and superstructure
with axle load of 25 tonnes, that natu-
rally increased the cost of the project.
In addition to this, cost of land,
change of scope of the project and
some other technical requirements
also added to the cost,” said R
Sivadasan, former finance commis-
sioner with the railways.
After the renewed focus, the
Railways seem confident of finishing it
product experience emerges with
effectiveness. A technique known as
TRIZ is used by experts.
An institution that is competitor-
focused to a fault comes through as
self-preening and over-confident,
especially when a firm has enjoyed a
winning spree. During the onslaught
of Nirma on Hindustan Unilever’s
detergent business from 1970s to mid-
1980s, there were many internal dis-
cussions about the unfair tactics of the
competitor. When the company waded
from ankle-deep into hip-deep hot
water, a spirited chairman and vice-
chairman (Ashok Ganguly and Susim
Datta) massively aligned the company
back to consumer-focus, creating
Wheel. Wheel detergent played a car-
dinal role in restoring the company’s
focus and became a valuable brand for
HLL over time.
Patanjali Ayurved started with huge
bluster, captured through the personal
image of Baba Ramdev. It was highly
competitor-focused. The company
pretended to be in national service,
and about to blast MNCs off their prof-
it-sucking ways. Equity analysts wrote
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that a list of around 20 persons had been
drawn up for lookout circulars, based on
transaction frauds and origin of funds, and
that the Goyals were part of the list.
A second scenario, as to why the
Goyals were allowed to cross the immi-
gration and board the flight to Dubai, is
not completely unbelievable either.
That is, the SFIO lookout circular
against the Goyals was already in place
but the immigration failed to spot the
names. Such errors do happen routine-
ly, it seems. For example, a top banker
was stopped a few months ago at an
Indian airport on his return from a trip
abroad. He was asked how he had man-
aged to travel overseas because there
was a lookout circular against him. The
stunned executive, who’s part of a list
of bankers under the scrutiny of the
Central Bureau of Investigation (CBI)
for loans given to the now defunct Vijay
Mallya-founded Kingfisher Airlines,
tried to explain that the immigration
did not stop him when he was leaving
the country and that he had no clue
there was a lookout circular against
him. In that case too, the immigration
probably didn’t catch the name right
INVESTMENT
TOTAL ~ 81,459 CRORE
Expenditure incurred so far:
43,000 crore 55 %
Over ~
on time. “Though started work in 2007,
the DFCs were initially expected to be
on track by 2011. However, due to
speeding up of work in last three years,
we will be able to deliver it by December
2021,” said another official.
What's of concern though is that land
acquisition woes and project delays are
not rare for the Railways. According to
available data, at least 505 projects —
including 263 doubling of lines, 185 new
lines and 57 gauge conversion — are
under various stages of execution. Of
this, several projects are facing a cost
overrun — owing to issues like acquisi-
tion of land, shifting of utilities and
delay in various statutory clearances.
ILLUSTRATIONS BY BINAY SINHA
fawning reviews, so did the pink press.
Patanjali has lost its way amidst its own
competitor obsession.
It is not only companies, but other
institutions as well that should avoid
competitor-obsession. Among politi-
cal parties, history suggests that if
communications to the voter ooze
with self-praise and obsessive derision
of the competition, unexpected
results can emerge. As examples,
recall the self-preening behaviour of
the then ruling political parties that
lost elections in India in 1977
(Congress) and in 2004 (Bharatiya
Janata Party); think of the superbly
confident Yahya Khan before the
Pakistani elections of 1970, resulting
in the East Pakistan revolt.
Arrogant, self-centered, competitor
obsession is more than likely to fail —
whether a company, a political party
or any other institution.
The writer is a corporate advisor and
distinguished professor of IIT Kharagpur.
During his career, he was a director of Tata
Sons and a vice chairman of Hindustan
Unilever. Email: rgopal@themindworks.me
MUMBAI | THURSDAY 30 MAY 2019
> CHINESE WHISPERS
despite the CBI circular being in place.
So much for a lookout circular, that
by definition, is a letter used by authori-
ties to check whether a travelling person
is wanted by the police. The circular is
typically used at immigration checks at
international borders like airports or sea
ports to monitor entry and exit of people
required by law enforcement authorities.
Whether or not the immigration officers
are aware, a lookout circular comes with
an expiry date. According to the guide-
lines prepared by the Ministry of Home
Affairs, validity of a circular is stated by
the originating law enforcement agency.
Unless specified, it is valid for a period of
one year but it can be extended in case
there’s a request. That implies that a look-
out circular stands suspended beyond
one year, unless the validity is extended
or specified.
Now that elections are over and
results are out, the government would
like to be seen as coming down hard on
industrialists, who are under the scan-
ner. In that backdrop, the lookout circu-
lar against the Goyals is just a beginning,
despite the mystery of the immigration
giving them an all clear.
Land acquired:
98.5 %
Physical
progress:
All these projects are important to
increase the Railways' freight and pas-
senger traffic as well to help it compete
efficiently with other means of trans-
port. The DFC, for instance, will not just
increase the freight volume, but also
increase the average pace of freight traf-
fic in the country. According to the
Railways, the average speed in DFC will
be around 75 kmph, compared to the
existing 25 kmph. One advantage for
consumers will be the cost effective-
ness, as it is expected to cut the unit
cost of transport by at least 40 per cent.
DFCCIL also expects savings of 457 MT
of CO2 emission over a period of 30
years, once the project is on track.
> LETTERS
Static, not dynamic
Please refer to the article, “Average tax
payer 346 years behind MPs” (May 29) by
Sachin Mampatta. It says that the average
assets of an MP are now 345.8 times that
of the annual income of a tax filing indi-
vidual. This is fine. But when in the next
sentence he says that “this means that it
will take the average taxpayer 345.8 years
to earn the equivalent of the assets of an
average Lok Sabha MP”, he has commit-
ted the mistake of assuming that the
income of the MPs will stay put. In terms
of economics, he has committed the mis-
take of a ceteris paribus assumption
which means, “other things remaining
the same”. The correct assumption is
called mutatis mutandis, which means
“other things changing”. He has made a
static assumption rather than a dynamic
assumption. What will change is that the
rich will become richer at a much faster
rate than the poor. Thomas Piketty, in his
famous book, Capital in the Twenty-First
Century, has proved this thesis. The most
quoted Piketty theory is, "... that no one,
to my knowledge, has questioned: that 60
per cent of the increase in US national
income in the 30 years after 1977 went to
just the top 1 per cent of earners. The only
section of the US population that has
done better than the top 1 per cent is the
top 10th of that 1 per cent. The top 100th
of the 1 per cent have done best of all". So
the average man will never ever catch up
with the rich MPs.
Sukumar Mukhopadhyay via email
> HAMBONE
https://t.me/UPSC4Exams
Fanboy moment
There are many first-time Members of
Parliament this time and most of them
are in the news for some reason or the
other. Shankar Lalwani (pictured) from
Indore is one of them. When he
reached Delhi to attend a meeting of
the NDA parliamentary board, he noted
that actor and fellow MP Hema Malini
was also present at the meeting.
Without wasting time, he clicked a
selfie with the actor in the background.
The selfie went viral in no time. When
he returned to Indore and local leaders
asked him about the picture, an
embarrassed Lalwani backtracked: "I
was just clicking a selfie. I had no idea
who was sitting behind me," he told
his party colleagues.
All eyes on Raveendranath
The All India Anna
Dravida Munnetra
Kazhagam won
just one of the 38
seats in Tamil
Nadu in the just
concluded Lok
Sabha election.
But the party is
hopeful of getting
a plum post in the
to-be-formed
National Democratic Alliance (NDA)
government at the centre, said minister
Kadambur Raju. OP Raveendranath
(pictured), son of state Deputy Chief
Minister and AIADMK coordinator O
Panneerselvam, is the only winner from
the party and he is known to share a
warm relationship with the Bharatiya
Janata Party leadership at the centre. All
eyes, therefore, are on the 39-year-old.
Coming soon: Chambers’ PC
Not many remember that the various
business chambers did not hold the
traditional press conferences (PCs) by
their incoming presidents this year. The
appointments were over by April but
the PCs had been postponed to ensure
they are heard by the new government.
Wait for the announcements about
those PCs soon.
Sachin Mampatta responds:
Unfortunately there is no way to find out the
rate at which an MP's asset might grow in the
future, or the quantum by which the average
tax payer will fall behind. The availability of
such estimates may well prove the reader's
point that the gap will worsen. In their
absence however, we can only wait for 2024.
Right assessment
The column “Why monetary transmission
is not easy in India” (May 29) by Hasmukh
Adhia was worth reading. The writer has
identified a number of reasons for ineffec-
tive monetary policy transmission. The
journey to bring in different yardsticks
such as prime lending rate to benchmark
prime lending rate and from base rate to
marginal cost of funds based lending rate,
has not facilitated the desired level of
transmission so far. Besides the reasons
narrated by the writer that are posing hur-
dles in effective transmission of monetary
policy, one major risk that banks face is
the “mismatch risk” — between its assets
and liabilities. The writer is correct in say-
ing there is a need to address the inherent
compulsions that stop banks from passing
on rate cut benefits to borrowers.
Saagar Soni Gandhinagar
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
 https://t.me/TheHindu_Zone_official

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

Volume XXIII Number 205

MUMBAI | THURSDAY, 30 MAY 2019

Disciplining NBFCs
It’s about high-quality jobs
RBI’s draft rules will help reboot the sector We need millions of high-quality jobs to become a developed nation
ILLUSTRATION: BINAY SINHA

I
he Reserve Bank of India’s (RBI’s) proposal to introduce liquidity buffers n earlier articles, “It’s about jobs” (Business

T for non-banking financial companies (NBFCs) may restrict their ability

to lend, but this short-term pain is necessary to make the sector more
responsible. NBFCs did play a critical role by partially filling the vacuum
created by the trouble in public sector banks (PSBs) and increasing their geographical
reach via swift adoption of new technologies. As a result, the share of NBFCs in
Standard, 1st April and 29th April), I argued that
India’s essential need is to create millions of
high-quality jobs. That requires us to get the supply
of quality talent right — improving our skilling pro-
gramme, school quality, and female participation
in the workforce. In the second article, I argued that
total loans rose to 23 per cent in FY19 from just 13 per cent in FY12 — a period that millions of good jobs in manufacturing companies
could absorb the supply of well-educated and trained
saw a sharp erosion in PSB lending. However, reckless lending practices and wide
women and men — but this required labour reform.
asset-liability mismatch (ALM) due to borrowing short-term and lending long-term This concluding article is about why high-quality
have caused a huge liquidity shortage. The stringent guidelines, which are expected jobs are so important, and how tourism is the essen-
to improve liquidity management in NBFCs and cushion them against crises that tial service sector that can add to a jobs boom in
arise from asset-liability mismatches, are necessary as the IL&FS crisis caused a lot manufacturing.
of pain, especially among banks and mutual funds. For debt mutual funds, defaults The great Stanford sociologist Alex Inkeles was
a seminal contributor to modernisation theory.
in repayments have led to erosion in net asset values. With another ~1.3 trillion
Modernisation theory argues that the development
NBFC papers set to mature in the next few months, mutual funds are expected to of a country is built on the development of its people.
reduce their exposure to the sector significantly. Against this backdrop, cleaning In particular, as a society modernises, people adopt
up of books and a clear idea of the asset-liability situation will give more confidence a set of more modern attitudes. These include “a ductive. And decision-making requires data, valuing diversity (with everything from Mughal forts and
to lenders and make the sector healthy in the long run. sense of personal efficacy; openness to new experi- a scientific temper over superstition. tombs to Hindu temples and the colonial grandeur
RBI’s proposals include maintaining a liquidity coverage ratio (LCR) equal to ence; respect for science and technology; acceptance It is for these reasons that manufacturing jobs of New Delhi), unmatched natural beauty (from the
of the need for strict scheduling of time; and a pos- matter. But why not service jobs? Formal service backwaters of Kerala to the beauty of the Kashmir
30 days of net cash outflows for all systemically important NBFCs. LCR, maintained
itive orientation toward planning ahead”. These jobs can be powerful modernisers — our challenge Valley), and a richer diversity of culture than in any
in high-quality liquid assets, ensures that financial institutions have enough liquidity modern attitudes are the essential building blocks is that most formal service occupations require high other country (there is no such thing as Indian dress
to fall back on for 30 days in case of a significant liquidity stress. If implemented, of an advanced society — and indeed an advanced levels of education, and there aren’t that many of or Indian food — we have dozens of distinct dress
the process will start from 2020 with LCR at 60 per cent, and end in 2024 at 100 per economy. Not only do they make the individual them. Take our most successful industry — the IT styles and even more cuisines). With all this to offer,
cent. The central bank has also granulated the one- to 30-day maturity bucket into modern, but they also make for participant citizens sector. An industry that has boomed for over 30 why are we at No 25 in the world tourism rankings?
three buckets — one to seven days, eight to 14 days, and 15-30 days buckets. This — with interest in the news and a sense of national years employs 4 million people directly today. And Why can’t we match the No 1 country, France, with
identity that rises above religious and local ties. So some of those directly employed, and most of those 83 million annual tourist arrivals instead of our cur-
maximum ALM has been capped at 10-20 per cent in the buckets running up to a
how does an individual become modern? indirectly employed, are informal occupations — rent 15 million (half of whom are NRIs)? A first step
year — a relief as ALM guidelines were expected to be more stringent at 5 per cent Alex Inkeles’ classic book, Becoming Modern, drivers, and security services, and domestic staff — would be to match Thailand’s 33 million.
from the current 15 per cent. reported the results of a major multi-year six country that are not “schools for modernity”. A country of The alternative to hundreds of millions of formal
The move has its detractors, too, who say the central bank is proposing “liquidity (that included India) research project. The key con- 1.3 billion, with a workforce of 500 million growing high-quality jobs — in manufacturing or tourism —
management” at a time when there is no liquidity in the system. Also, the LCR tribution was to provide an empirical scale of moder- at 20 million a year, needs a lot more. is one of millions of informal marginally employed
requirement margin will impact NBFCs with longer-term products. For example, nity that applied universally, and to establish its There is a big exception: Tourism. Tourism can drivers and cleaners and delivery boys. T N Ninan’s
source. The two key sources of be as effective a school for moder- insightful and thought-provoking edit in Business
commercial and other vehicle financiers with product durations of three to five
modernity were the school and the nity as the factory — indeed, done Standard many years ago on the horrendous
years would feel the pinch, and housing finance companies will be impacted the factory, with one year in school worth right it can be even better. One of Nirbhaya rape has always haunted me. He pointed
most, as their asset maturity is the highest at seven to eight years. They also argue roughly two in a factory. Nothing else my favourite resorts anywhere in out how different the victim and rapists were in
that credit is likely to slow down in the medium-term and margins will get crimped came close — not family background, the world is the Shillim resort. their paths of modernity. The victim and her friend
due to investments in low-yielding assets, thereby hitting profits. or the friends one has, or what one Shillim is in the middle of a thor- were educated, and with good job prospects in for-
A possible consequence of these measures is that weaker NBFCs with poor reads, or mass media, or the speeches oughly rural area, 30 km from the mal occupations. The rapists were all in informal,
of political or religious leaders. The nearest town, Lonavla, which is unstable occupations — with nothing that either
liquidity management will get absorbed into their larger counterparts to comply
school one can understand — devel- itself no metropolis. Shillim today taught them modern attitudes nor gave them a stake
with the RBI’s liquidity buffer norms. This is not necessarily a bad thing as the oping the individual is what it is there directly employs around 450 peo- in the existing system. The difference was not where
NBFC sector has too many players without the required scale. In a way, this is for. But a factory employs people not ple. A policy of recruiting locally the victims and rapists had come from, but the edu-
inevitable as even the staunchest supporters of NBFCs can’t deny the fact that a to develop them, but to produce has created two hundred jobs for cation, exposure and employment of their families.
large number of such companies have been slipshod in implementing prudential things. Why was it such a powerful INDIA’S WORLD? young men and women from the A modern future for India requires that we do all
norms or risk mitigation standards. moderniser, in Inkeles’ words, “a nearby villages that have a popu- that is necessary — labour reform to unleash labour-
school for modernity”?
NAUSHAD FORBES lation of around 1,000. These intensive manufacturing, policies to promote gar-
A factory is about production. But young people are taught all those ments and footwear and food-processing, and a

Water woes the way a factory is organised inherently develops things that make people modern. An intensive train-
the individual. People work to a manufacturing ing programme teaches everything from hospitality
schedule; this teaches planning. One sees a direct domain skills to the soft skills essential to success
tourism Czar with the power to work across min-
istries and state governments to attract 80 million
annual tourists to India in the term of this govern-
Crop diversification is the need of the hour connection between work and output — so it isn’t in a luxury resort. In the eight years since Shillim ment. The alternative could condemn us, in
luck that delivers results but learning and using opened, hundreds of lives have been transformed, Trotsky’s words, to the ash heap of history.
aryana’s decision to incentivise diversion of cropland from water-

H
skills. That fosters efficacy. Any decent factory has and with it the fortunes of their families in the next
guzzling paddy to less water-consuming crops like maize, pulses and a focus on efficiency — that directly connects using generation. The writer is co-chairman of Forbes Marshall, past
others is a welcome step towards mitigating the high-water footprint time productively to output. Change is the norm in Shillim needs to become India writ large. Tourism president of CII, and chairman of the Centre for Technology,
of its agriculture. Widespread rice cultivation is deemed the chief factories, so new experience is valued. Technology is our greatest untapped opportunity. No country Innovation and Economic Research (CTIER)
is all around one, making the individual more pro- can match us in the combination of architectural Email: ndforbes@forbesmarshall.com
cause of rapid decline in groundwater in nearly 75 per cent of the state. Paddy,
especially non-Basmati paddy, has not been the traditional crop of this inherently
water-stressed state. It was introduced chiefly to meet the needs of the other

Pluralism lives
food-deficit regions, most of which are now growing enough rice on their own.
Haryana, therefore, need not expend its scarce water on cultivating non-Basmati
rice, each kilogram of which takes a massive 3,000 to 3,500 litres of water to
grow. The sops mooted to spur changes in cropping pattern include ~2,000 per
providing bijli, paani, schools and health to the

L
utyens’ liberals and sundry “sickular” ana-
acre as cash, free seeds of the alternative crops, full reimbursement of crop insur- lysts have been dumbfounded by the election
ance premium and assured procurement of the output at the minimum support results that handed Narendra Modi’s
prices fixed by the Centre. Bharatiya Janata Party (BJP) an unanticipated
Haryana, indeed, is not the only state that needs crop diversification of this majority in the Lok Sabha. The elite intellectual
kind to ensure sustainable use of water. Its adjoining areas of Punjab, western discourse since then has eddied around the xeno-
phobic and communal content of the campaign,
Uttar Pradesh and eastern Rajasthan, as also parts of southern states like Andhra
which appears to have trumped the myriad non-
Pradesh, Tamil Nadu, Karnataka and Maharashtra, need to modify their cropping achievements of Mr Modi’s 2014 promises. So
systems to conserve water. Though, arguably, fiscal incentives-based crop diver- should we pronounce the funeral oration for plural,
sification can worsen the already strained state finances, this burden would seem inclusive India?
trivial when weighed against the consequences of inaction on this front. Going The past five years offer clues to why the answer
by the reckoning of the National Institute for Transforming India (NITI) Aayog, can as well be no.
Critics of Mr Modi have attribut-
the lives and livelihood of millions of Indians are in jeopardy due to water depri-
ed his almost single-handed victory
vation. About 600 million people are already facing high to extremely high water to his undoubted charisma, money
stress and 200,000 of them die every year due to inadequate access to it. The power, youthful muscle power and
consequential economic losses are anticipated by the NITI Aayog to mount to a command over the national broad-
worth around 6 per cent of the gross domestic product (GDP) by 2050. casting apparatus. All these advan-
Moreover, with business as usual, the demand of water is projected to surge tages multiplied from 2014 onwards
— in fact, Mr Modi’s All India Radio
to twice the availability by as early as 2030. The water level in about 54 per cent talk show Mann Ki Baat was consid-
of wells across the country is receding at a worrisome pace due to withdrawals ered a potent electoral tool. Yet his
exceeding the annual recharge. Worse still, the quality of nearly 70 per cent of party lost eight seats in Lok Sabha
the available water is rather poor, thanks to rampant contamination, rendering bypolls and several key state elec- SWOT
it unfit for domestic uses and, in some cases, even for irrigation. Unsurprisingly, tions in the past five years. In the
India ranks 120 among 122 countries in the global water quality index. 20-odd Assembly polls since then, KANIKA DATTA
non-BJP parties won almost as often
The potential advantages of crop diversification, on the other hand, can be many. as the BJP, though the exigencies of power politics
Apart from saving water, it can stave off the demand for power and diesel needed for induced two of them to tie up subsequently with
running irrigation equipment. Besides, it can help improve environment by cutting the saffron party and the party broke ground in
down emissions of greenhouse gases like methane and nitrous oxide which are the north-east.
spewed routinely from the flooded paddy fields and the smoke generated by burning For evidence recall: The Assembly elections of
Delhi and Bihar (2015), Odisha (in 2014 and 2019),
paddy stubbles. Most importantly, inclusion of legumes (pulses) in the cropping sys-
West Bengal (in 2016) and the Big Three of 2018 in
tems can restore soil health by fixing nitrogen into it, thus diminishing the fertiliser Chhattisgarh, Madhya Pradesh and Rajasthan, the
requirement of the subsequent crops. It is, therefore, imperative to economise the UP Assembly by-elections in Gorakhpur and
use of water in agriculture through measures like crop diversifications, strict regulation Phulpur in 2018.
of groundwater extraction and pricing water in accordance with its scarcity value. The Hindutva tide was no weaker then than it
is today. But all of these wins came on the back of
down-to-earth bread-and-butter issues: Delhi on
urban poor, Bihar and Odisha on development,
West Bengal on protecting land rights (until
Mamata Banerjee inexplicably opted for communal
appeasement), and Chhattisgarh, MP and
Rajasthan on widespread farmer unrest, to offer
some examples.
Mr Modi’s 2014 majority owed much to the non-
casteist, job-creating development plank on which
he campaigned convincingly and energetically. His
vision of a red-tape— and corruption-free India, of
efficient administration with plentiful jobs and a
fast-growing economy — a stark
contrast to the tired, venal alliance
in power — encouraged many vot-
ers steeped in India’s foundational
values to press the button next to
the lotus symbol.
Thus, presented with an ener-
getic, credible competing vision
of progress that is not necessarily
predicated on religion and nation-
alism, it is just as possible for elec-
torates to respond positively. It is
easy to forget now that at the start
of 2019, Mr Modi’s poor perfor-
mance on the economic front had
raised prospect of a comeback but
with a significantly reduced number of seats. That
the Congress was unable to offer voters a credible
nationwide alternative vision at all had as much to
do with the oblique nature of its campaign when
compared with Mr Modi and Amit Shah subliminal
messaging.
Rahul Gandhi’s distance from the aam aadmi
way of thinking caused him to focus on issues that
have little resonance for them. Whether Mr Modi
made money on the Rafale deal (especially when
there was no evidence of this) is irrelevant when
livelihoods are at stake. Mr Gandhi’s mawkish big
message of Love (as against the BJP’s hate cam-
paign, in case you missed the memo) made no
sense at all. Ill-conceived warnings of Muslims
being killed en-masse if the BJP came to power
even as the Congress offered soft Hindutva imagery
via multiple temple visits only confused the signals
for the average voter. Although it is possible to
debate the wisdom or otherwise of the income sup-
port programme NYAY, it came far too late and
was poorly propagated. The irony is that the
Congress has an entrenched grassroots organisa-
tion and capable state satraps that Mr Gandhi did
not leverage judiciously. His performance has only
served to validate Mr Modi’s sneers at the inade-
quate “dynast”.
In contrast, Messrs Modi and Shah had some-
thing Mr Gandhi, two decades younger, lacked: the
zealots’ vitality to mobilise the people and craft a
narrative that is guaranteed to resonate when times
are bad. Generating fear of an inchoate Other —
Pakistan, Islamic terrorists, issues that it single-
handedly revived in Jammu & Kashmir after a
decade of relative peace — is a handy alibi when
an economy stagnates and foreign investors seek
other pastures. Mr Modi’s detractors compare him
with Indira Gandhi in his authoritarianism and dis-
regard for institutions and constitutional norms.
His regime’s similarities with West Bengal’s defunct
Left Front are also striking. Just as the Left Front’s
success with land redistribution rooted its three
decades in power, the initial triumphs of schemes
such as Jan Dhan and Ujjwala exposed the aam
aadmi outside Gujarat to Mr Modi’s capabilities.
Just as the Left Front found a useful recruiting base
among unemployed youth — the result of its own
anti-industry policies — record youth unemploy-
ment provided Mr Modi with a large cohort of polit-
ical foot soldiers.
Mr Modi, in permanent campaign mode, is plan-
ning his strategies for various elections in 2020. Time
for his secular opponents to get their act together
asap, you would think.

BJP’s ‘Chanakya’ unplugged family and his political journey. The

Sheikh encounter case. Four years later, Mr
Shah was the BJP chief. He debuted in the
Rajya Sabha by 2017, and BJP MPs were
soon turning to him for advice on the par-
ty’s floor strategy instead of Leader of the
House Arun Jaitley. Mr Shah is now a Lok
BOOK REVIEW Sabha member, having won his election
from Gandhinagar, and thought of as the
ARCHIS MOHAN natural successor to Mr Modi post-2025.
In Amit Shah and The March of BJP,
believe, have never had access to actual
information.
The writers state that their several meet-
ings with BJP chief “busted” the “false and
often peddled descriptions” of Mr Shah’s
style being “corporate and isolated”. “Shah
came across as very earthy and hands-on,
someone who has risen through the ranks
and, more importantly, has not forgotten
his roots and past,” the authors write.
authors quote an unnamed BJP leader
who was pleasantly surprised to find Mr
Shah sitting with his five-month-old
granddaughter Rudri, “repeatedly look-
ing at her in deep compassion and smil-
ing, while humming the Mahatma’s
favourite bhajan.”
Mr Shah was born in 1964 to a wealthy
Nagar-Vaishnav family of Gujarat. His
grandfather relocated the family to their
ancestral home in Gujarat’s Mansa from
Mumbai. Shah’s great-grandfather and
grandfather were nagarsheth of the prince-
ly state of Mansa. According to his family
Bharatiya Vidyarthi Parishad. The rest of
the story is known widely enough for it to
be recounted here.
The authors say Mr Shah does not like
to travel abroad. He has keen interest in
cricket and chess and his last visit abroad
was to Munich when he headed the chess
association of Gujarat and has a good grasp
of astrology. The authors write that Mr Shah
refused to discuss his interest as it was “per-
sonal and therefore inconsequential while
emphasising that astrology is a completely
scientific subject.”
The book has an interesting episode
from Mr Shah’s life when the courts had
only meant to dump the dirt that others
generate?...She needed to be saved,” the
authors write, stressing how the experience
“left a deep imprint on his psyche”.
The authors write that there was then
no possibility of Modi becoming the party’s
prime ministerial candidate. “Yet Shah’s
heart had hitched itself to the city, the
thought of its plight was gnawing at him
from within. It was as if he had to replay a
debt to the city of Kashi. Shah told one of
his confidantes, ‘As soon as I get a chance,
I will do something for this city and this
state’. His usually rock solid demeanour
melted like wax at the site of Varanasi, his

P
rime Minister Narendra Modi will
take the oath of office for his sec-
ond term, with his council of min-
isters, on Thursday. There is anticipation
that Bharatiya Janata Party (BJP) presi-
dent Amit Shah would be a member of
the cabinet committee on security, repris-
ing his role as home minister, a portfolio
he held in Gujarat when Mr Modi was
chief minister.
Mr Shah has had a meteoric rise in
national politics. In mid-2010, Mr Shah
spent time in jail in the Sohrabuddin
authors Anirban Ganguly and Shiwanand
Dwivedi, both associated with a BJP think
tank, the Syama Prasad Mookerjee
Research Foundation, are effusive in their
praise of the BJP’s “Chanakya” as a master
political strategist.
The book, the authors state in the intro-
duction, is an attempt at recording the story
of Mr Shah’s years at the BJP’s helm “relying
on authentic sources, material and infor-
mation” since most of the available material
on the man is based “on speculations, sur-
mises and assumptions” by people, they
The book provides, for the benefit of its
readers, “selected video links with QR
codes” of 15 of Mr Shah’s speeches. There
is a separate eight-page section titled “Amit
Shah’s Thoughts”. These include Mr Shah’s
praise of khadi, his simple lifestyle, com-
mitment to “garib kalyan”, or welfare of
the poor, his paeans to India’s cultural her-
itage and so on.
More interesting are some of the per-
sonal details.
The chapter, “Rising Through the
Ranks”, has details on Mr Shah’s ancestral
lore, Arvind Ghose, later known as Sri
Aurobindo, visited the family once and it
still preserves the chair that saint sat on.
The authors say Mr Shah’s family was rich
but prepared him for a life of hard work.
While his sisters would go to school in a
horse-drawn carriage, Mr Shah had to walk
to the school.
Shah started his political work as a 13-
year-old in 1977 when he stuck posters for
Janata Party candidates from Mehsana,
Maniben Patel, the daughter of Sardar
Vallabhbhai Patel. Later, he joined the Akhil
externed him from Gujarat in 2010.
In September 2010, Mr Shah was on
his first visit to Varanasi. One evening he
joined the Ganga aarti and had an
epiphany. “Shah felt strange ripples rising
within himself, these were waves of
thoughts, of a deep inward rumination
of which he had no inkling, it was in a
state of being which he had never expe-
rienced before,” the authors write.
“Certain questions began haunting him:
Why is this immortal city in such a state of
degeneration? Is the lap of Mother Ganga
experience had been a transformative one;
his willpower and resolve had strength-
ened,” the authors write.
Is it too much to ask of a prestigious
international publisher such as
Bloomsbury to come up with biographies
that are a tad more dispassionate?
AMIT SHAH AND THE MARCH OF BJP
Anirban Ganguly &
Shiwanand Dwivedi
Bloomsbury; 296 pages, ~399

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>
MUMBAI | THURSDAY, 30 MAY 2019
NHB directs bigger housing finance
firms to appoint chief risk officer
SOMESH JHA
New Delhi, 29 May
N
ational Housing Bank (NHB)
on Wednesday directed big-
ger housing finance compa-
nies (HFCs) to appoint a chief risk offi-
cer (CRO) in a bid to improve risk
management practices.
“While the boards of HFCs should
strive to follow best practices in risk
management, it has been decided that
HFCs with asset size of more than
~5,000 crore shall appoint a CRO with
clearly specified role and responsibil-
ities,” NHB said in a circular dated
May 29, adding that the CRO will act
independently to “ensure highest
standards of risk management.”
The circular added that the board
of HFCs should put in place policies to
“safeguard the independence of the
CRO” who should report directly to the
managing director and chief executive
officer.
The circular will cover top 15 HFCs
controlling 95 per cent of the business,
including Housing Development
Finance Corporation, LIC Housing
Mamata to skip swearing-in Odisha CM Naveen opts for lean
as BJP-TMC tensions mount team in fifth Assembly term
CM’s U-turn comes amid
BJP’s claims of political
violence by members of
TMC; Mamata refutes
AVISHEK RAKSHIT
Kolkata, 29 May
Bengal Chief Minister Mamata
Banerjee has decided not to attend
Prime Minister Narendra Modi’s swear-
ing-in on Thursday. She had earlier said
she would attend the event as “consti-
tutional duty and courtesy”. Her U-turn
comes after the BJP’s claim of political
violence in Bengal, which she has refut-
ed. She had skipped the ceremony in
2014 as well.
“Congratulations, new prime min-
ister Narendra Modi Ji. It was my plan
to accept the Constitutional invitation
and attend the oath-taking ceremony.
However, in the last one hour, I am see-
ing media reports that the BJP is claim-
ing 54 people have been murdered in
political violence in Bengal. This is
completely untrue”, her statement on
a social media platform said.
It added, “So, I am sorry, Narendra
Modi Ji, this has compelled me not to
attend the ceremony”.
Banerjee affirmed, “There have
been no political murders in Bengal.
These deaths may have occurred due
to enmity, family quarrels and other
disputes; nothing related to politics.
There is no record with us”. Modi, in
his address in Varanasi, on Tuesday,
had claimed that BJP workers are being
killed in the state for their ideology.
According to reports, the BJP has invit-
ed kin of BJP workers, who allegedly
lost their lives in political violence in
Bengal, as special invitees, in Modi’s
oath-taking ceremony.
Banerjee said such a ceremony was
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HFCs may have to maintain adequate funds in case of a crisis and to submit their
asset-liability management data weekly
Finance, Tata Capital, GIC Housing
Finance, PNB Housing Finance,
Indiabulls Housing Finance, and
Dewan Housing Finance (DHFL),
among others.
Recently, the liquidity-starved
DHFL had said it won’t allow prema-
“Congratulations, new prime
minister Narendra Modi Ji. It
was my plan to accept the
constitutional invitation and
attend the oath-taking
ceremony. However, in the
last one hour, I am seeing
media reports that the BJP is
claiming 54 people have been
murdered in political
violence in Bengal.
This is completely
untrue. I am
sorry, Narendra
Modi Ji, this has
compelled me
not to attend the
ceremony”
MAMATA
BANERJEE
Bengal CM
an “august occasion to celebrate
democracy” and it should not be used
to “score political points”. The 2019 Lok
Sabha elections witnessed a pitched
battle between the BJP and the TMC,
not only via the democratic process of
polling, but numerous incidents of vio-
lence and voter intimidation.
Political observers like Biswanath
Chakraborty noted that at least four
people were casualties of political vio-
lence during the polls while the entire
poll season saw 12 people getting killed
in political violence. In another devel-
opment, another TMC MLA, Manirul
Islam and party leaders — Gadadhar
Hazra, Mohd Asif Iqbal and Nimai Das
– joined the saffron party on
Wednesday after two MLAs and over 50
councillors from the TMC camp had
crossed over to the BJP. A CPI(M) MLA
had also defected.
“There are many in the TMC who
wants to join the BJP. They know that
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ECONOMY & PUBLIC AFFAIRS 19
(NBFC) with asset size more than
~5,000 crore.
Sources said there are more regu-
latory instructions in the pipeline in a
bid to give comfort to the market,
lenders, analysts and investors, follow-
ing last year’s default by the
Infrastructure Leasing & Financial
Services, which led to the reporting of
a series of defaults by other players in
the NBFC and HFC space, dampening
market sentiments.
The instructions may ask HFCs to
maintain adequate funds in case of a
crisis situation. HFCs may also be
asked to submit their asset-liability
management data on a weekly basis.
“The move to appoint CROs will
put a deeper glare on the HFC sector.
Many HFCs have approached the
PHOTO: ISTOCK NHB, demanding tightening of regu-
lations on them in a bid to boost mar-
ture withdrawals of its deposits, with ket sentiments,” said a senior finance
immediate effect, in order to reorganise ministry official.
its liability management. The official said that HFCs are
The move follows a similar direction complaining of a liquidity crunch and
given by the Reserve Bank of India a a tight regulation on HFCs may ‘gen-
few days back to appoint a CRO in a erate confidence among market play-
non-banking financial company ers to invest in them’.
JAYAJIT DASH
the time for TMC is over. These people
were intimidated by the TMC from join-
Bhubaneswar, 29 May
ing the BJP but now they have started Biju Janata Dal (BJD) presi-
coming to us,” Dilip Ghosh, the state’s dent Naveen Patnaik took
president of the BJP, who won in the oath as Odisha chief minister
Lok Sabha elections, claimed.
Last month, in one of his campaigns
for the fifth straight term on
Wednesday.
in this state, Modi had claimed that This made him the third
Banerjee is losing her hold in West chief minister after Jyoti Basu
Bengal as 40 MLAs from her party are (West Bengal) and Pawan
in touch with him and they will desert Kumar Chamling (Sikkim) to
the TMC once the BJP wins. In response, achieve the rare feat.
TMC leader Derek O’Brien had claimed State Governor Ganeshi Lal
that not even a councillor will jump ship. administered the oath of office
The Lok Sabha election results came and secrecy to Patnaik and his
as a blow to Banerjee and the TMC, as new council of 20 ministers –
the party lost its hold on entire northern 11 of Cabinet rank and 10 as
West Bengal and tribal areas of the west- ministers of state (MoS).
ern part of the state. Its seat count The portfolios were allocat-
reduced from 34 in 2014 to 22. On the ed swiftly after the swearing-
other hand, the BJP increased its tally in closed. Patnaik will addi-
from two in 2014 elections to 18. tionally oversee home, general
administration and public
grievances as well as any other
Doesn't matter if department not assigned to
other ministers.
some opportunist Niranjan Pujari, former
speaker of the state Assembly,
MLAs join BJP: TMC is the new minister for finance
& excise. Prafulla Mallick
The TMC leadership on Wednesday retains his old portfolio of steel
shrugged off party MLAs joining the & mines along with works.
BJP, saying it “doesn't matter” if some New entrant Naba Kishore Das
“opportunist” legislators switch will look after health and fam-
loyalties. It also claimed some among
those who had joined the saffron
party had been threatened to do so.
"It doesn't matter if one or two Odisha govt starts disbursements under KALIA scheme
opportunist MLAs switchover to the
BJP. Some are opportunist and some PRESS TRUST OF INDIA
are being forced to join by using threat Bhubaneswar, 29 May
and intimidation," senior TMC leader
Tapas Roy said. Roy's comment came The Biju Janata Dal (BJD)
after TMC MLA Monirul Islam joined the government on Wednesday
BJP earlier on Wednesday. Two other started disbursement of
legislators, including Subhrangshu funds to farmers under the
Roy, and over 50 councillors, had KALIA scheme.
joined the BJP on Tuesday. PTI “As part of our commit-
ment to farmers, today in
Job woes to remain if Huawei challenges US
manufacturing doesn’t defence Bill as war on
pick up: Kotak Securities sanctions intensifies
AVISHEK RAKSHIT
Kolkata, 29 May
Growth momentum in India
may turn out to be a “jobless
growth scenario” in the next 3
years, if the manufacturing sec-
tor fails to pick up, said broker-
age house Kotak Securities.
According to Kamlesh Rao,
MD and CEO of the firm, job
opportunities in the services se-
ctor — a key contributor of em-
ployment — are expected to re-
duce in the current economic
scenario. “The services sector,
which fuels job growth, will def-
initely go down. And so, the
manufacturing sector is need-
ed which can create job oppor-
tunities”, he said. He was resp-
onding to questions asked over
merger of public sector banks,
and other such proposals.
The merger of SBI with
associates had resulted in
restructuring of the workforce,
but such fears have been
allayed among other public
sector firms in banking and
insurance sector. In a reply to
Lok Sabha last December, Pon
Radhakrishnan, Minister of
State for Finance, had said the
services sector had contributed
53.9 per cent to the country’s
gross value added at current
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PNB to mop up ~10K cr
from non-core asset sale
PRESS TRUST OF INDIA
Mumbai, 29 May
State-owned Punjab National
Bank is looking to raise
~10,000 crore in FY20 from
sale of non-core assets, rights
issue and expected write-
backs from two large
accounts undergoing insol-
vency proceedings.
The lender is expecting a
write-back of ~4,000 crore
from Essar Steel and
Bhushan Power and Steel
which are undergoing reso-
lution under the Insolvency
and Bankruptcy Code.
“For FY20, we are looking
to raise ~10,000 crore. We are
expecting ~1,000 crore from
sale of non-core assets,
~4,000 crore write-back
(from) two accounts (Essar
Steel and Bhushan Power and
Steel) and ~5,000 crore from
markets,” the bank’s manag-
ing director and CEO Sunil
Mehta told reporters.
The bank expects to raise
~600 crore from sale of its
Secretariat employees greet CM Naveen Patnaik in Bhubaneswar on Wednesday
ily welfare. Tukuni Sahu,
Patnaik’s lone female col-
league in the Cabinet, has
bagged the ministry of women
and child development &
Mission Shakti.
Patnaik led his BJD to a
thumping victory in the 2019
elections, winning 112 of the
146 Assembly constituencies
polled. His immense mandate
our first cabinet meeting,
the fund release under
KALIA scheme starts with
immediate effect, and about
2.5 million additional fami-
lies will be assisted in a
weeks’ time,” Patnaik told
reporters here.
He also said the first cab-
inet meeting has increased
prices, during FY18.
The manufacturing sector,
on the other hand, accounted
for 16.7 per cent of the GVA.
The brokerage firm said
the government needs to
attract foreign direct invest-
ment in manufacturing to
make India a global hub, and
that the move may entail
improvement in ease of doing
business along with land and
labour laws in the country.
“The trade war between
the US and China presents
India with a huge opportunity
to develop its manufacturing
vertical. The global situation
might bring the markets
down, but it’s an opportunity
at the same time,” he said.
Rao feels the government
needs to act on reforms in the
next two fiscal quarters to
keep growth momentum in
the country, as well as the
bourses, going.
He opined that the IBC res-
olution process needs to be
fastened and steps needs to be
taken to solve the liquidity sit-
uation of non-banking finan-
cial companies. Increase in
financialisation and conver-
sion of savings into invest-
ments have also been suggest-
ed by Kotak Securities.
erstwhile headquarters, situ-
ated at Bhikaji Cama Place in
South Delhi, to the income
tax department. The deal is
in the final stage.
It is also planning to raise
~400 crore by selling some
real estate properties.Mehta
said the lender would raise
~5,000 crore through rights
issue or qualified institution-
al placement (QIP) route.
The bank has set a recov-
ery target of ~20,000 crore in
blew away the Modi wave and
transcended the anti-incum-
bency factor.
Patnaik will not attend the
swearing-in ceremony of
Prime Minister Narendra
Modi in Delhi on Thursday,
officials said.
The newly elected mem-
bers of the 16th Vidhan Sabha
will take oath on Thursday. As
the target of KALIA benefi-
ciaries to 7.5 million farm
families from 4.2 million
families.
“This is 3.3 million more
than the existing benefici-
ary families,” the chief min-
ister said.
On Wednesday, the first
instalment of ~5,000 was
SIJIA JIANG
Hong Kong, 29 May
Huawei Technologies has filed
a legal motion seeking to
declare a US defence law
unconstitutional, in the tele-
com equipment maker’s latest
bid to fight sanctions from
Washington that threaten to
push it out of global markets.
The motion for summary
judgment in its lawsuit against
the US government, filed late
on Tuesday in the US District
Court for the Eastern District of
Texas, asks a judge to declare
the 2019 National Defense
Authorization Act (NDAA)
unconstitutional. Huawei filed
its lawsuit in March.
The NDAA bill, passed by
the US Congress last summer,
places a broad ban on federal
agencies and their contractors
from using Huawei equipment
on national security grounds,
citing the company’s ties with
the Chinese government.
Huawei, the world’s largest
telecoms network gear maker,
has repeatedly denied it is con-
trolled by the Chinese govern-
ment, military or intelligence
services.
US Secretary of State Mike
Pompeo kept up the pressure
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the current financial year.
In FY19, its recovery more
than doubled to ~20,000 crore
from ~9,666 crore in FY18. The
bank narrowed its loss by
nearly 65 per cent to ~4,750
crore during the fourth quar-
ter of fiscal ended March 2019.
Its net loss was at ~13,417 crore
in the same quarter of FY18.
Gross NPAs improved to
15.50 per cent from 18.38 per
cent at the end of
March 2018.
PHOTO: PTI
leader of the House, the chief
minister will be present during
the occasion.
So, Patnaik will not be able
to visit Delhi to attend the
swearing-in ceremony of the
prime minister and his council
of ministers, an official com-
munication issued by the
Chief Minister's Office said on
Wednesday.
released to about 840,000
farm families under the
Krushak Assistance for
Livelihood and Income
Augmentation (KALIA)
scheme. Patnaik had earlier
assured his government, on
the first day of taking oath,
will release funds under the
KALIA scheme.
on Huawei on Wednesday.
“Huawei is an instrument of
the Chinese government,”
Pompeo said in an interview
with Fox Business Network.
“They’re deeply connected. It’s
something that’s hard for
Americans to understand.”
Glen Nager, a partner at law
firm Jones Day and lead coun-
sel for Huawei, told Reuters the
US court had agreed on a
schedule to hold hearings in
September on motions by
opposing sides.
Some legal experts said
Huawei’s lawsuit was likely to
be dismissed because US courts
are reluctant to second-guess
national security determina-
tions by other branches of gov-
ernment. REUTERS

20 TECHNOLOGY 4.0
>
Data fortress
Datacentres,whichstorecriticaldataofhundredsofmillions
of Indians, have multiple and rigorous layers of security.
Neha Alawadhi gives the lowdown
T
he Noida branch of CtrlS, a
data centre company based
in Hyderabad, stands tall on
a busy highway. The
unmarked building has 24X7 video
surveillance through multiple cam-
eras, including one on the roof that
scans the perimeter surrounded by 15-
feet-high walls with barbed, electrified
wires on top. The walls are crash-rated
to guard against a vehicle ramming
into the facility.
Needless to say, getting into the
high-security building is no cakewalk.
You are frisked and your identity and
bag rigorously checked. You are
required to put on disposable over-
shoes as you walk in. Inside the build-
ing, too, access is rigidly controlled.
Even employees don’t have access to
every part of the facility — not all
employees are allowed on all floors.
The core of the building, the data cen-
tre itself, is also protected by multiple
layers of security. You are body-
scanned before you enter. Nothing gets
in from outside — not even a pen.
Data centres and their security in
India have been in the limelight ever
since the conversation intensified
recently around the localisation of data
of Indian users. Companies like CtrlS,
Netmagic and Tata Communications,
which are among the biggest names
ALGO RHYTHM
AGE OF FINTECH
DISRUPTORS
Corporate banks in India face
greater degree of disruption today
than even before, thanks to the
mushrooming of new age digital
banking platforms and fintech
companies. With no legacy system
to drag them, these new age
companies with their asset light
models use different tenets of
digital technologies to keep them
agile and keep the business model
transparent to service the digital
savvy customers effectively. In their
2019 report Unlocking Success in
Corporate Banking through
Digital, Boston Consulting Group
and SWIFT India have pointed out
that corporate banks need to ride
the digital wave by leveraging Big
Data and analytics among several
other digital tools in order to thrive
in this environment.
NEW CHOICES
QuizTime
A slew of online games such as BrainBaazi, Loco
and Trivia Live are bringing the joys of quizzing
to your mobile phone, reports Yuvraj Malik
I
ndia loves quiz shows. You only have
to look at the phenomenal success of
Kaun Banega Crorepati, a show host-
ed by Bollywood legend Amitabh
Bachchan, to be convinced of that fact. In
another era, legions of school kids sat
glued to the hugely popular Bournvita
Quiz Contest, which used to air on the
radio before it reinvented itself for tele-
vision. And now, in this age of the inter-
net, a bunch of startups and app compa-
nies are bringing the joys of quizzing to
Indians on their mobile phones.
BrainBaazi, Loco, Qureka Quiz, IQ
Live and Trivia Live are just some of the
apps that you can dip into if you feel like
engaging in a spot of quizzing. Their
USP? Unlike quiz shows on television,
where you are more of a spectator, you
can be an active participant in these
shows. This is made possible by a
combination of innovative game-play,
faster mobile internet speeds, live
stream technology and digital payment
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MUMBAI | THURSDAY, 30 MAY 2019 1
Modi2.0must
metric form of identification is almost
always built into the access controls. So
employees authenticate themselves
enhancetech
either through a fingerprint or a retina
scan or facial recognition or a combi-
nation of these. This is done so that
prowess
no unauthorised person can enter the
building in case an ID card gets stolen.
Again, if there is a security breach
because an employee has not adhered
to the processes, stringent protocols India’s effort at improv-
are in place. Extensive logs are main- ing competitiveness
tained for all activities and video sur- has been so far focused
veillance tapes are available to pin- on ease of doing busi-
point the exact source of the breach. ness. The government
Besides, there are regular audits, hasbeenmakingefforts
as frequent as once every six months, to improve the environ-
to ensure that the protocols are being ment for approvals
followed. while enhancing physi-
Simple rules like no tailgating are cal infrastructure. In its
important in a data centre because of second term, the NDA
the criticality of the data stored on the KRANTI NATION government, led by
premises. There is also under-vehicle Prime Minister
surveillance cameras set up on the PRANJAL SHARMA Narendra Modi, should
ground to check vehicles from bring- now target improving
ing in anything that could pose a India'stechnologicalcompetitiveness.Intheeraofthe
threat to the data centre. fourth industrial revolution, mere tinkering with
existing government procedures will not enhance its
Environment control economic competitiveness.
Apart from the human element, the A large part of national competitiveness derives
environment inside a data centre is from its ability to create and deploy technology for
also tightly controlled to ensure
smooth operation at all times. The
development, welfare and industrial activity.
According to the IMD Digital Competitiveness
main building that houses the storage
equipment is usually made of higher
report, the ranking of India improved from 56 to 48
between 2014 and 2018. Lausanne based business
reinforcement and can withstand
earthquakes measuring up to nine on
school IMD says “the objective of the digital com-
petitiveness ranking is to assess the extent to which
the Richter scale. The power supply is a country adopts and explores digital technologies
in managing data centres in the coun- veillance of people and equipment to tained for a proper back-up. We have taken from two or more different leading to transformation in government practices,
try, have several layers of physical choosing the right materials for the systems that help monitor this and sources so as to minimise the down- business models and society in general.”
security and contingency measures to building that contains the servers that they trigger an automatic response, time in case of power failures. The linkage between technological and overall
ensure that the data of hundreds or store data, these facilities are truly informing the person in charge Air quality is another critical aspect competitiveness is very high. Countries that tend to
millions of users remains safe. state-of-the-art. through SMS alerts that action needs that impacts the performance of a data invest in their technological prowess improve their
With more and more organisations A data centre essentially looks like to be taken,” says an executive at one of centre.“TheairqualityinDelhiandNCR overall competitiveness. While earlier, the invest-
choosing to trust data centres with a library, with rows upon rows of India’s largest data centres who does isabigproblemasthedatacentreequip- ment was mostly in physical machines, factories and
their most critical data, these firms are metallic shelves that house thousands not wish to be named. ment can corrode faster with toxins like industrial products, now the shift is towards smart
taking every measure possible to of servers which look like DVD players A camera control room with feeds sulphur and nitrogen present in the air. solutions. In many ways, it is easier for developing
ensure that none of their system or stacked one on top of the other. The from over a 100 cameras is also part of Hence, we have a chemical filtration countries to adopt artificial intelligence (AI)-based
subsystem ever goes down. humming machines with their glow- the set-up. The room has bulletproof capability at the facility itself,” says an solutions that enhance productivity and efficiency for
US-based cybersecurity firm Palo ing connection lights look a bit eerie. glass on the door and windows. A com- executive at one of the data centres. business and government. “Countries that rank high
Alto Networks defines But every single aspect bination of low-light cameras, pan-tilt- In fact, data centres have been in technological aspects tend to rank high in overall
a data centre as “a facil- of the server rooms is zoom cameras and standard fixed experiencing a rapid rate of hardware competitiveness,” says Dr Jose Caballero, senior econ-
ity that centralises an Data centres use building controlled, monitored cameras are used and footage from failures due to sulphur bearing gases. omist at IMD.
organisation’s IT oper- automation to manage and maintained — right these is typically stored for a mini- CtrlS says it has deployed an air filtra- TheIMDWorldCompetitivenessReport2019bears
ations and equipment, every system in the down to the air you mum of 90 days. This can be handed tion and purification technology that out the importance of
as well as where it building such as video breathe or the amount over to customers if needed. removes gaseous contaminants and technological prowess.
stores, manages, and surveillance, fire alarm of light you see. particulates and inhibits corrosion. In the era of the Singaporeranks1st intech-
disseminates its data. systems, generators and Data centres use The human element Every effort is also made to keep fourth industrial nological infrastructure
Data centres house a smoke detectors. And all building automation to One of the biggest challenges of manag- dust to a bare minimum. “Dust has to revolution, mere while topping the overall
network’s most critical these are monitored manage every system in ing physical security at a data centre is be kept low. Sticking paints are often tinkering with ranking, the USA is 6th in
systems and are vital to through a single the building such as getting people to follow the processes, used on the floor, so the dust sticks to existing technology, Sweden is 5th,
the continuity of daily dashboard console video surveillance, fire says Nitin Mishra, senior vice president the paint. The air conditioners also government Denmark is 7th and
operations”. alarm systems, water and chief product officer at Netmagic, have high quality filters to ensure that procedures will Switzerland is 8th. They
A typical multi-lay- leak detectors, genera- an NTT Communications company. dust does not circulate in the air,” says not enhance rank 3rd, 9th, 8th and 4th
er security protocol in a data centre tors, smoke detectors and so on. And Though data centres are increasingly Netmagic’s Mishra. India’s economic (respectively) in overall
would be: Main gate security, a physi- all these are monitored through a sin- becoming non-labour intensive facili- According to Data Foundry, a data competitiveness competitiveness.
cal scan by security personnel, turn- gle dashboard console. The lights in ties,thehumanelementcontinuestobe centre company based in Austin, India’s overall level has
stile entry, a scanner for bags or equip- the building are usually kept low to important. For example, even the build- Texas, “If not kept under control, air- improvedmarginallyto43from44outof63countries
ment, door access, another turnstile, conserve energy. ingautomationdashboardsaremanned borne contaminants in data centres ranked. Within the sub-factors India ranks at the bot-
frisking, and a biometrics-based “The battery used in the server at all times of the day. cause a variety of problems from tom at 63 for education. However it has better rank-
access. It’s no different inside the rooms is a critical resource. A mini- Along with digital access cards for impaired power efficiency to equip- ing in technological infrastructure (28) and scientific
building. From round-the-clock sur- mum level of charge has to be main- different levels of employees, a bio- ment failure.” infrastructure (36). This means that while India has
the ability, it has not been able to develop its strengths
because of weak foundations in education.
"Technological infrastructure is closely related
to the scientific infrastructure and education.
Therefore, to improve in the technological sub-fac-
Fintechs ushering in digital disruption across Coporate banks face key challenges on multiple fronts tor, countries need to increase not only, for example,
the corporate banking ecosystem
Capital Quant
Shrinking lending
revenues: Erosion in
NPAs instances of
reported fraud on LoUs
convenience in digital
banking
funding for technological development but also their
total expenditure on R&D and education in general,"
Dr Caballero says. "It is also necessary to develop
Rupeeseed share of corporate (Letter of undertaking) Competition from high levels of knowledge transfer between companies
Capital float
Market lending revenues to Rising customer Fintechs: Disruption in and universities to ensure knowledge spill-overs,
ICres IBSFINtech overall banking expectations: business model across and to strengthen the quality of education."
Indoinventing
Lendingkart SME revenues Increasing the banking AI is now an important medium for delivering
NeoGrowth
Treasury Treasury Line Increasing credit and expectations of ecosystem through
government and business solutions. The need for
lending understanding data science has extended to near-
Power2SME Treasury Press fraud risks: Growing sophistication and digital offerings ly all professions in the world.
Key facts and figures The Indian education systems is still divided by
silos that prevent students from blending skills for
KredX
KrypC
Billing 300 45% of India corpo- return on capital
below hurdle rate
between top quartile
and bottom quartile
specific objectives. AI and data science are needed
by doctors, engineers, but also town planners and
Casfe rate banks showed
(6%) in FY’18 banks tax officers. Accountants and human resource man-
M1 fonePaisa declining profits in agers need to understand data science as do dairy
FY’18
ROUTE.com
Trade
Cash Giddh 10% difference in 2.7% increase in gross businesses and retail salesforce.
management An overhaul of the education system will allow
SimplyFI Invoicera (Trade) 64% of india corpo- pre-tax returns on
regulatory capital
non-performing assets
from FY’17 to FY’18 students and professionals to go beyond the labels
TallyX numberz rate banks had of science and arts studies. In today’s world every-
body has to understand basic technology.
Key facts and figures Options before corporate banks to survive in the game Improvement in ease of doing business is nec-
Develop Drive operational Leverage Big Data and advanced essary for the country but not sufficient. India has
$960m 42% yearly 1260 India fintech start- productised solutions excellence by digitising analytics to transform their
to benchmark itself on technology to assess its com-
investment in growth in fintech ups founded between petitiveness. Dr Caballero sums it up well,
for clients across their front-end channels topline through a mix of pricing, “Education is at the core of the technological and
India fintechs investments in 2015-2018 (second highest priority sectors and back-office processes selling and retention algorithms scientific infrastructures. To sustain India’s tech-
in 2018 2018 vs 2017 globally)
Note: Coporate banks refers to those banks that offer banking services. Hurdle rate refers to the repo rate of 6%, nological and scientific performance, therefore,
Source: BCG Research, FIDAC survey 2018 (Covering 30+ Indian banks including public and private sector banks) education needs to be strengthened.”
that manages user responses. Since The company claims that that was acquired by media firm the emotional impact it has had on the
everything happens in real-time, often BrainBaazi, which was launched in PocketAces in 2018. “A smartphone’s community is something we did not
with as many as 50,000 concurrent February 2018, has got over 10 million hallmark is interactivity and this has anticipate. People are playing it in
users, the games depend heavily on a downloads on the Android, with every not been exploited to its potential thus groups, with friends in hostels, playing
scalable and high-bandwidth cloud user playing the quiz at least eight times far,” says Anirudh Pandita, co-founder it at workplaces. I have heard that some
infrastructure. in a month. of PocketAces, which produces web companies have office happy hours
Take BaaziNow, the gaming app
from Times Internet. “BaaziNow takes
“Our team envisaged what mobile
video entertainment could be with real
series and viral videos.
Like BrainBaazi, Loco has also got
around Loco. In the evening, people are
playing with their families.
the online gaming phenomenon to the
next level with live games such as
participation from people via their
mobile phones,” says Sinha. BrainBaazi
over 10 million downloads on Android,
with as many as 60,000 concurrent
Interestingly, our biggest winners on
the app are from tier 2 towns in
BrainBaazi, PollBaazi and BingoBaazi
that engage users across India. Our
beams its live quiz at 8.30 pm every day
and disburses cash prizes worth
users at times.
“The extent of Loco’s success and
Jharkhand and Bihar or towns like
Lucknow,” says Pandita.
intuitive user interface has a strong ~50,000 to the winners. PayTm, too, has a quiz game called
integrations. focus on integrating gaming and BrainBaazi’s biggest competitor is Trivia Live, which streams at 9 pm every
Another big draw of these online interactive entertainment. This has Loco, a Mumbai- day with ~63,000 worth of prize money
brain-teasers is that they promise real helped achieve some great results in a based startup on offer. Trivia Live is part of a gamut of
cash rewards if you win. With PayTm short period,” says Gautam Sinha, chief internet games offerings from
integrated across all such platforms, the executive officer, Times Internet. Gamepind, a joint venture between
rewards are transferred to the users’ Paytm and Alibaba. In August 2018,
digital wallets. Alibaba-owned gaming company
Here’s how it works. A live quiz is “People are playing it in groups, AGTech Holdings and Paytm
beamed on the app at a set time of the with friends in hostels, playing invested $16 million to launch
day; a show host on live video talks to the it at workplaces. I have Gamepind.
audience and asks questions; the heard that some Also crowding the field are
questions as well as the answer options companies have office such independent apps as
appear over the video as text; the user happy hours around Loco. Qureka Quiz, launched by a
has to click on the correct option; if In the evening, people are startup called
correct, the next question is presented playing with their CoolBoots Media, and
and so it goes on, till a wrong answer is families. Interestingly, IQ Live, which does a
selected. If the user answers incorrectly, our biggest winners on the quiz show hosted by TV
he or she can still stay on and watch the app are from tier 2 towns in Personality Rohit Roy.
rest of the quiz. A typical quiz has 10 to 20 Jharkhand and Bihar or towns They largely follow the
questions, and runs for 20 to 30 minutes. like Lucknow” same model with minor
From a tech point of view, the online ANIRUDH PANDITA, tweaks.
quiz is nothing but a live-stream with Clearly, the Indian quiz
Co-founder of PocketAces
graphics being fired over it in real-time enthusiast is now spoilt for
and supported by a game-play software choice.
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MUMBAI | THURSDAY, 30 MAY 2019 BRAND WORLD 21 <

Ethnic fashion
of the GI tag for the embroi-
dered work says that GI tag-
ging and monitoring is a com-
plex and expensive process. It
took five years to get it done

brands trip over GI

for the Toda embroidery.
“Who takes it forward? The
group involved in the work is
small, just about 300 women
in the tribe who do this as part
time work after their day’s
As a small community from TN battles Reliance Trends, chores are done and they don’t
have the resources, nor does
Tjori over GI violations, it signals trouble for many more the NGO,” John said.
IMAGE:ISTOCK Poorly organised crafts
ROMITA MAJUMDAR & groups and scanty resources
ARUNDHUTI DASGUPTA could give retailers a free run
Mumbai, 29 May and the tag may just remain a
worthless piece of paper. But

I
t was a routine promotion
by one of the big online
ethnic-wear retailers, but
one that went horribly wrong.
Even as it drew the attention
of the growing tribe of ethnic
fashion enthusiasts, as it was
meant to, the ad also set off
the alarm bells among the
Todas, a tribe that lives in
the Nilgiri mountains of
Tamil Nadu.
Surprised to see a
retailer promote their
trademark black and
red embroidery work
(pohor) without any
acknowledgement
of its GI tagged ori-
gins and worse still,
labelling it wrongly, the com-
munity fought back with legal
notices with help from a group
of lawyers, NGOs and local
artisans and store owners. So
far the retailers have main-
tained a standard denial, say-
ing there has been no wrong-
doing on their part. But many
sense trouble ahead for retail-
ers, especially those that have
mushroomed online and are
positioning themselves as pur-
veyors of an authentic Indian
product.
The two retailers under fire
in this case are Reliance
Trends, for its fashion label
Siyahi and the e-commerce
portal Tjori. Both have been
accused of misleading con-
sumers and violating the rights
of the GI tag holders. While
Reliance Trends refused to
respond to questions sent for
this story, Tjori said it was tak-
ing down the products while
(Left) A pouch embroidered in the Toda
community’s trademark black-and-red
embroidery that is at the centre of the dispute
it investigates the matter.
The GI tag is held
jointly by Pompuhar (the
Tamil Nadu Handicrafts
Development Corporation),
Keystone Foundation (an NGO
working in the Nilgiris) and the
Toda Nalavaazhvu Sangam (a
body of Toda artisans and a
non-Toda dentist based in
Coonoor). Priti David who
worked on the story for People’s
Archive of Rural India (PARI)
says that it is unfortunate that
crafts people make the most
beautiful things, but they are
the most disenfranchised. It is
not just one embroidery style
or a single tribe that is facing
the brunt of blatant misuse, the
story runs a similar course
across communities.
As David researched the
story she found that the por-
tals were selling a Toda
embroidered saree for any-
where between ~2,500-3000
while the authentic product
costs closer to ~7,000. The
huge discrepancy in prices led
people to investigate further
and they discovered that
retailers were passing off
machine printed work as the
real deal, instead of sourcing
authentic hand-embroidered
work from the community.
While the legal notices can
act as a deterrent, what hap-
pens next? Mathew John,
founder-CEO of Keystone
Foundation who is joint holder
Zaheda Mulla, a lawyer who
worked towards GI tagging the
Toda embroidery, believes that
there is a lot that can be done.
People need to come togeth-
er and commit to a solution said
Mulla. India could learn from
how the EU protects its food,
wine and cheese GIs, she said.
They set prohibitive fines for
even the slightest infringement
and she added, in India it
should be mandatory for retail-
ers selling ethnic wear to give
credit to the crafts people and
source from authorised
users of the GI tag.
However most people
said that the task of mon-
itoring and implement-
ing GI tags is daunting.
Even if one focuses just on
the handloom sector, a posi-
tion paper released by FICCI
earlier this year showed that in
India, nearly 27.83 lakh hand-
loom households are engaged
in weaving and allied activities,
out of which 87 per cent are
in rural areas. The diversity
and spread is staggering,
retailers said.
However some attempts are
underway. Amazon India,
according to the position paper,
is keen to promote the Indian
Handloom Brand and
Handloom Mark products on
its marketplace. It has
launched Weavesmart, an e-
commerce store for handlooms
in India that currently has
more than 3,000 weavers in its
network and more than 20,000
products. This could encourage
other retail brands too to wear
their ethnicity on their sleeve.

> FROM PAGE 1

Jaitley...
He took leave from the ministry twice in
the past 13 months and could not present
the 2019-20 interim Budget. A source told
Business Standard that chemotherapy had
left him weak and he needed some months
off to recover. He has been advised relative
isolation to avoid infection. “Call it rest and
recuperation. He needs it,” the person said.
Shortly after Jaitley tweeted the letter,
reactions started coming in. “Wish Arun
Jaitley ji speedy recovery. Despite political
differences, I have always found him to be
affectionate,” tweeted Delhi CM Arvind
Kejriwal. “I wish you a speedy return to
good health. A salute to your grace in
requesting a break from Cabinet. Your col-
laborative skills will, I’m sure, be emulated
by your successor,” tweeted Mahindra
group Chairman Anand Mahindra.
Over the last week, there has been
intense speculation about his health.
Reports said he had been admitted to the
AIIMS, New Delhi, for a day. A day after
the election results, Jaitley met the five sec-
retaries of the finance ministry and senior
officials at his residence. On Sunday, RBI
Governor Shaktikanta Das visited him.
The next FM will be facing a tough chal-
lenge to push up economic growth amid
resource crunch. GDP growth is officially
projected to come down to 7 per cent in
2018-19, the lowest in the first tenure of the
Modi government. While there are
demands of a stimulus package to perk up
subdued private investments and sagging
demand, the government does not have
money to give it. The Centre's fiscal deficit
overshot the FY19 target by 34 per cent till
February. However, under Jaitley, inflation
has been benign. The CPI inflation rate was
> BS SUDOKU # 2756
SOLUTION TO #2755 Very easy
« offer,” the executive said.
Solution
tomorrow
HOW TO PLAY
Fill in the grid so
that every row,
every column
and every 3x3
box contains
the digits 1 to 9
less than 3 per cent in March 2019 against
over 8 per cent in the same month five years
ago. The retail food and beverages inflation
rate was 8.61 per cent five years ago, which
came down to 0.66 per cent in March 2019.
During his stint as FM, Jaitley played a
key role in building a consensus to get the
constitution amendment Bill on the GST
passed in Parliament. Then, the GST laws
were passed in Parliament and respective
state assemblies to enable the introduction
of the new indirect tax from July 1, 2017.
After that, 34 meetings of the GST Council,
chaired by the FM, have taken place and
all decisions, including rate cuts, were tak-
en by a consensus. The other big achieve-
ments were the enactment of the
Insolvency and Bankruptcy Code, merger
of associate banks and Bharatiya Mahila
Bank with State Bank of India, merger of
Dena Bank and Vijaya Bank with Bank of
Baroda, and enactment of the Fugitive
Economic Offenders Act, among others.
IndiGo...
IndiGo, with 50 per cent share of domestic
aviation market, is the largest customer for
A320neo family with an order book of 430
aircraft. It chosen P&W for the first 150 air-
craft of which 85 have been delivered.
IndiGo refused to comment.
Since induction in 2016, P&W engines
have faced issues primarily due to design
flaws. Problems stretched from long engine
start-up times, problems with seal of the
engine and durability issues with the tur-
bine blades. The situation became complex
in March 2018 when DGCA grounded 11
A320neos including eight of IndiGo.
Induction of IndiGo’s long-range
A321neos, for foreign routes, were delayed
as P&W has been retrofitting the
engines with more durable tur-
bine blades. P&W didn’t com-
ment on the issue. However, the
company during its first-quarter
earnings call in April had said
shipments engines had more
than doubled year on year in Q1.
“Pratt’s GTF engine has been
fantastic, reducing fuel burn by
almost 16 per cent. But A320neo
operators feel the stabilisation
period has taken far longer than
promised. Airlines will naturally
explore if there is an option,” said
a source. Airline executives said
in such deals, manufactures com-
pete by giving lucrative offers.
“This is a binary competition
where the airline has to choose
either P&W or CFM. With IndiGo
being a bulk customer, CFM must
have given them a very lucrative
Philippe Couteaux, executive
vice-president, sales and market-
ing at CFM, had earlier indicated
it was in talks with IndiGo.
L&T...
Queries to L&T and Mindtree
went unanswered. The open
offer was to be launched on May
14 and completed on May 27.
However, the firm is yet to get a green sig-
nal from Sebi. L&T group chairman A M
Naik had said last week they expected to
launch the offer within 10 days. Some
legal experts said the 55-day timeline was
not sacrosanct, pointing to earlier
instances. "Failure in sticking to this dead-
line is not any breach of provisions, as the
offer is still under examination," a
Mumbai-based corporate lawyer said.
CGST...
To support its stand, it had cited an order
passed by the Telangana HC, which had
refused to provide any interim relief to the
petitioner and upheld the powers of the
commissioner of CGST to arrest. The order
was later upheld by SC on May 27.
As the two HCs had taken differing
views in similar cases, the government
approached the SC and sought that it
should settle the issue of powers of arrest.
In its order on Wednesday, the SC clar-
ified that if HCs were to entertain such cas-
es, they “will keep in mind” that the top
court had on May 27 agreed with the
Telangana HC order upholding the powers
of the GST commissioner to arrest an
accused without filing an FIR under CGST
laws. Though the SC asked HCs not to
interfere at this stage, it did not set aside
Bombay HC’s order granting interim relief.
The favourable interim relief granted by
the Bombay HC will continue to protect
taxpayers until the matter is finally decided
by the three-judge Bench of the SC, said
Abhishek A Rastogi, partner at Khaitan &
Co, who represented the accused.
In its plea, the government has claimed
to have noticed a trend of “short-circuiting
the procedure established by law by indi-
viduals being investigated for economic
offences by filing writ petitions, challeng-
ing the constitutional validity of every pro-
vision”. Apart from the interim orders, the
government has challenged before the SC
certain observations made by the HC. One
such observation is that the CGST officers
are not police officers and must first file an
FIR before making arrests. The govern-
ment, however, pleads that CGST officers
acting under the CGST Act, 2017, cannot
be compelled to register an FIR.
High interest payments...
Firms borrowed at an interest rate of 9.04
per cent (on average) during H2FY19
against 8.85 per cent a year ago. On the
brighter side, the interest rate was down
by 24 bps on a sequential basis from the
highs of H1FY19. One bps is one-hundredth
of a per cent. Firms’ inventory was up 12.9
per cent YoY during H2FY19, outpacing the
top line growth for the second consecutive
half-yearly period. In the same period, their
receivables were up 12.8 per cent. In com-
parison, firms’ total fixed assets (invest-
ment in plant and machinery) was up 9.7
per cent during H2FY19. The rise in inven-
tory and receivables was most prominent
in sectors such as automobiles and power
utilities. This, analysts say, corresponds
with the changes in demand conditions in
the respective industries.
More on business-standard.com

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24
>
MUMBAI | THURSDAY, 30 MAY 2019 1

Star pulls out all stops Chinamayuserareearthsas

AROUND THE WORLDN

for World Cup telecast weaponintradewarwithUS

REUTERS Chinese people will never

CRICKET MANIA URVI MALVANIA

Mumbai, 29 May
the trophy thus far. Special creatives have
been produced for India matches, each
Beijing, 29 May accept this!” the paper
added. The industrial
drawing on an insight based on India’s China’s Communist Party chain between China and
ADVERTISING

W
ith the one-and-a-half-month- cricketing history with the opponent. newspaper warned the US the US is highly integrat-
REVENUE long ICC World Cup 2019 taking Star’s on-ground activities involve the on Wednesday that the ed and highly comple-
off on Thursday in England and theme #LeJayenge. In the first phase of country was ready to use mentary, and there are no
~1,800cr Wales, there is plenty of time for brands to this campaign, auto drivers in multiple rare earths to strike back in winners in a trade war,
~700cr 2019 get on to the advertising wagon for the
most-watched sport in the country. And,
cities held up placards stating ‘LeJayenge’,
inviting passengers to ride with them. The
their bitter trade war, say-
ing in an extremely strong-
it said.
2015 Star India is pulling out all stops to ensure second phase will begin in Mumbai on ly worded commentary Oil slumps to lowest
audiences remain interested in the rather June 5 — the day India begins their World “don't say we didn’t since March
long World Cup season. Reports suggest Cup game against South Africa. On the warn you”. Oil joined a selloff for global
LANGUAGES 6 that Star India, the official broadcaster of day, BEST buses will provide free rides President Xi Jinping's equities as escalating trade
all International Cricket Council (ICC) across three prime routes in Mumbai. visit to a rare earths plant hostilities between the US
OF TELECAST 2015 events, could rake in as much as Star Sports also has an extensive pro- last week fuelled specula- and China stoked fears about
(Bengali, Tamil,
~1,800 crore from this year’s World Cup, grammingstrategy,includingregionallan- tion that China would use growth, while Opec and its
Malayalam,
against ~700 crore in the last season. guage feeds, to ensure the tournament’s its dominant position as a A man works at the site of a rare earth metals mine at allies vacillated about their
Kannada,
Gautam Thakar, CEO, Star Sports, reach expands. “One of the learnings from supplier of rare earths for Nancheng county, Jiangxi province, China FILE PHOTO next steps.
English, Hindi)
said: “We have in place a 360-degree the IPL is that we aim to carry forward leverage in the trade war. As of 10.50 pm IST, Brent
7 marketing plan starting with the core
thematic#CricketKaCrown, astheWorld
going deeply regional. We will have a big
opening for the tournament as well as
Rare earths are a group remarks from the editor of “Will rare earths become
of 17 chemical elements influential paper the Global a counter weapon for China
Crude was trading at $69.19
per barrel. Futures slumped
2015
(English, Hindi, Cup is regarded as the most prestigious India’s opening by telecasting the match- used in everything from Times on Twitter late on to hit back against the pres- as much as 3.8 per cent in
Tamil, Telugu, prize in world cricket. Bringing the com- es on some movie channels,” Thakar said. high-tech consumer elec- Tuesday. In a commentary sure the US has put on for no New York, putting them on
Kannada, Bengali, petitive element that every country holds The tourney’s and India’s first match- tronics to military headline “US, don't under- reason at all? The answer is track for their worst month-
Malayalam) during this tournament, the campaign es will be telecast on Star India’s general equipment. estimate China’s ability to no mystery,” it said. ly loss since December.
showcases the very nucleus of the sport entertainment channels like Maa Movies, While China has so far strike back”, the ruling “Undoubtedly, the US The plunge followed sug-
LANGUAGES
OF TELECAST 5
and how every team is going to England to Vijay Super, Jalsha Movies, Suvarna Plus, not explicitly said it will Communist Party's official side wants to use the prod- gestions in Chinese media
get their hands on the Crown of Cricket.” and Asianet Plus, along with sports chan- restrict rare earths exports People's Daily noted the ucts made by China's that the nation could restrict
2015 While a promo few weeks ago showed nels.Therestofthematches,includingthe to the US, Chinese media “uncomfortable” depend- exported rare earths to rare-earth exports critical to
each country gearing up for the India-Pakistan tie will be telecast on mul- has strongly implied this ence on rare earths from counter and suppress the US defense, energy and
15* tournament, Star Sports
released specific commer-
tiple channels across the Star network.
The network has roped in experts like
will happen, including China of the US. China's development. The electronics industries.
2019
cials. For example, the kick- Sachin Tendulkar for surround shows. It
off match on May 30 is being has planned shows like Fab 15, which
*Only first match and first
India match on 15
promoted through a creative
that draws on the insight that
focuses on the Indian squad, and Follow
the Blues, which provides off-the-field US drops India from Pakistan extends airspace
closure till June 15
channels. Rest will be
neither country has ever won insights into the teams.
currency watchlist
telecast on 10 channels

AGENCIES Foreign carriers using

A PRICEY AFFAIR “The office

space demand
PRESS TRUST OF INDIA
Washington, 29 May
include China, Japan, South
Korea, Germany, Italy.
China welcomed the US’
29 May

Pakistani airspace with

ConnaughtPlace(CP)inNewDelhihas
emergedasthefourthmostexpensiveoffice
marketintheAsiaPacific,withamodest
1.4%increaseinrentalcosts,KnightFrank
said. Hong Kong, Tokyo, and Singapore are
the top three most expensive office
markets. Mumbai’s BKC stood at seventh.
Average office rent at CP rose to ~330 per sq
ft a month in the first quarter of 2019, from
~326 per sq ft in the year-ago period.
Monthly office rent at Mumbai BKC rose to
~300 per sq ft, up 5% from ~286 sq ft.
Bengaluru’s CBD saw an increase of 17%
in office rent at ~125 per sq ft per month,
from ~107 a sq ft
Indian airspace have been
forcedtotakecostlydetours
because they cannot fly
witnessed
record growth The US on Tuesday removed decision, saying the US’ deci- India will remain closed over Pakistan. The closure
in 2018 with India from its currency mon- sion was in line with the until June 14, a civil affects flights from Europe
over 47 million itoring list of major trading “basic common sense” and aviation official said on to Southeast Asia. “The
sq ft of leasing, partners, citing steps being promised to deepen reforms Wednesday, the latest closure will continue until
while new taken by New Delhi which of the exchange rate of its cur- extension months after a June 14,” a spokesperson
office space addressed some of the rency. The US Treasury standoff between the for Pakistan's Civil Aviation
Donald Trump administra- department in its semi- arch rivals. Authority said, without
supply rose by
tion's major concerns. annual report on macroeco- Pakistan closed its air- giving further details.
City Submarket(s) Prime net (~) Forecast: Next 13 per cent in
the same For the first time, the US nomic and foreign exchange space in February after a Pakistan lies in the middle
headline rent 12 months
period” placed India in its currency policies of major trading suicide attack by a of a vital aviation corridor
NCR Connaught Place 3,960.0 No change monitoring list of countries partners of America said, Pakistan-based militant and the airspace restric-
SHISHIR BAIJAL
Mumbai Bandra Kurla Complex 3,603.6 Increase in May 2018 with potentially that no country meets the group in Indian-controlled tions impact hundreds of
Chairman and questionable foreign criteria to be labelled as one Kashmir led to aerial commercial and cargo
Bengaluru Central Business District 1,495 Increase Managing Director, exchange policies. seeking to gain unfair trade bombing missions on each flights each day, adding
Prime net headline rent in ~ per sq ft per annum (gross floor area) Knight Frank India
PTI Source: Knight Frank Research Switzerland is the other advantages over the US by other's soil and a fighter flight time for passengers
nation and the other nations manipulating its currency. dogfight over Kashmir. and fuel costs for airlines.

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