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SUNDAY, 6 JANUARY 2019

12 pages in 1 section BACK PAGE P12 WORLD P8
MUMBAI
~10.00
VOLUME XII NUMBER 43
MODI ACCUSES CONGRESS OF POWELL HINTS FED OPEN TO PAUSE,
PLAYING TO MIDDLEMAN’S TUNE SAYS WON’T QUIT IF TRUMP ASKS
PUBLISHED SIMULTANEOUSLY FROM BENGALURU, KOLKATA, MUMBAI AND NEW DELHI

JET AIRWAYS DELAYS

PAYMENT OF SALARY
TO MANAGERS
Managers at Jet Airways are yet to receive
their December 2018 salary, said a source.
Salaries of pilots, engineers and senior mana-
gement were already being paid in instal-
ments for the past few months, as the airline
faced pressure to settle overdue payments to
lenders and vendors. The airline’s
management wrote an email to employees
on Friday evening, informing them about the
delay. The email said the new date of
payment would be communicated next
week. However, a few hours later, the email
was recalled. ANEESH PHADNIS reports
ECONOMY & PUBLIC AFFAIRS P5
CBDT withdraws
controversial circular
DPCO amendment Mallya first tycoon to be
may benefit MNC declared fugitive offender
PRESS TRUST OF INDIA
Mumbai, 5 January
ROCKY
device makers
Weeks after a UK court ordered his extradition, former
liquor baron Vijay Mallya, accused of defaulting on
ROAD
loans of over ~9,000 crore, received another blow as a
Mumbai court on Saturday declared him a “fugitive
AHEAD
economic offender” (FEO).
Local industry fears global firms will register equipment Mallya became the first businessman to be
2> declared an FEO under the Fugitive Economic
as ‘innovative’ to secure price control waiver for 5 years Offenders Act, which came into existence in
August 2018.
SOHINI DAS The Enforcement Directorate had moved the special What is Fugitive Economic Offenders Act
Mumbai, 5 January court for FEOA for this purpose. Offenders Act, 2018? When did this Act come
The agency had requested the court that Mallya, cur- It seeks to confiscate
into force?

R
ecent amendments to the Drug rently in the UK, be declared a fugitive and his proper- the assets of economic President Ram Nath
The income-tax department has withdrawn Prices Control Order (DPCO), 2013, ties be confiscated and brought under the control of the offenders who evade
a controversial circular, after four days of have fuelled concerns that the Union government as provided under the Act. Kovind gave his
prosecution by assent to the Bill on
issuing it. The Centre had come out with the authorities might find it difficult to “The application of the ED is partly allowed. Vijay
move to tax the shares received by firms keep the prices of essential medical devices Mallya is declared as fugitive economic offender
remaining outside the August 5, 2018
below the fair market value under Section in check as multinational firms would now under Section 12 (i) of the FEO Act,” said Judge M S jurisdiction of Indian
What will happen to
56(2)(viia) of the Income Tax Act. As officials be able to use patent protection to exempt Azmi in the order. courts
Mallya now?
started imposing the tax even on receipt of such equipment from price control for Hearing on the second part of the ED’s plea — con- What comes under its The government
fresh issuance of shares, the CBDT came out five years. fiscation of properties — will start from February 5. ambit? can now initiate
with a circular on December 31 that these According to a government notification, Incidentally, the same court is also hearing the
receipts should not to be taxed. new drugs patented under the Indian Patent ED’s plea to declare diamond merchants Nirav Modi
Economic offences proceedings to
Act will be exempted from price control for
five years from the date of the commence-
DEVICE DEPENDENCY and Mehul Choksi FEOs in the Punjab National Bank
fraud case.
with a value of more
than ~100 crore, which
confiscate his
properties in the
The Indian medical devices industry,
BS SPECIALS ment of their commercial marketing by the
estimated at~80,000 crore, is hugely
Mallya’s lawyers requested the court to stay the are listed in the alleged ~9,000-crore
manufacturer in the country. order for four weeks so that they could obtain its full schedule of the loan default
OPINION A senior official explained that the DPCO
dependenton imports, with the US being the
top supplier (Imports in ~cr)
copy and move the high court. Turn to Page 4 > Fugitive Economic case
controls the prices of drugs and medical
devices listed under the National List of
World US
Essential Medicines (NLEM). “Hence, while
29,764

the order mentions ‘a manufacturer produc-

Pratt & Whitney jet Michel got
27,388

ing a new drug patented under the Indian

25,626

Patent Act, 1970 (39 of 1970)’, it applies to

kickbacks
22,692

engines under
the devices too that are listed in the NLEM.”
The official said that in India, medical
devices are treated as drugs and governed

regulator’s scanner for many

by the Drugs and Cosmetics Act. “The NLEM
What to expect on the
7,421
7,220
6,792

has a list of both drugs and devices (notified

6,148

tax front in 2019 as drugs), which include cardiac stents

India is on the brink of overhauling its tax
system, implementing the BEPS project and
seeing a further evolution of the GST despite
this being an election year 9>
IN DEPTH
Govt, industries dodge
law, take over forest land
The forest land is allegedly being acquired in
multiple pockets without seeking their
consent 7>
COMPANIES P2
NCLT orders against auditor
first time under new Act
The National Company Law Tribunal (NCLT)
has removed the statutory auditor of Zen
Shaving with immediate effect and per-
mitted the ministry of corporate affairs to
appoint an independent director in his
place. This is the first time that NCLT has
ordered against an auditor in terms of the
Companies Act, 2013. VEENA MANI reports
COMPANIES P2
Fintechs’ access to credit
data may be restricted
Credit scoring firms may restrict access of
fintech companies to consumer credit data
till clear regulations on data sharing for
these entities emerge, said experts. The
Indian Banks Association held a meeting
with the country’s top credit scoring
companies on Friday to discuss the risks of
allowing data access to fintech companies.
NIKHAT HETAVKAR & ABHIJIT LELE report
(including drug eluting stents), orthopaedic
implants (hip and knee), intra-uterine
devices, and condoms. This notification ARINDAM MAJUMDER
deals: ED
would apply to devices that have already New Delhi, 5 January SHRIMI CHOUDHARY
been included in the NLEM,” added the 2014-15 2015-16 2016-17 2017-18 New Delhi, 5 January
official. 27% 27% 26% 25%
Twenty-three medical devices have been
notified as drugs and are regulated under
Share of US The Enforcement Directorate (ED) on
Saturday told a special court at Patiala
the Act. Of these, four have already been
Source: Ministry of Commerce
Airbus’ most popular single-aisle
TROUBLE IN House Courts Complex that Christian
included in the NLEM. Addressing the media jet model, A320neo with Pratt & THE AIR Michel, middleman in the Agu-
in the national capital earlier this week, around 20 years, new generation technology Whitney engines, faces fresh Pratt& WhitneyA320neo staWestland deal, received kickbacks for
Pharmaceuticals Secretary Jai Priye Prakash replaces the earlier one sooner than that and scrutiny from the government engines have faced technical many other defence transactions.
said the government was working to cate- manufacturers stop making the old genera- after IndiGo reported another faults earlier as well Michel was extradited to India from
gorise more devices as drugs. tion product. Moreover, process patents are incident of a mid-air engine fail- Dubai in connection with the ~3,600-
The domestic medical devices industry very common in this space, and by making ure on Saturday. 2016: Operators reported crore deal with Anglo-Italian company
fears that multinationals would now be able slight alterations in the delivery methods, A320neo is the workhorse of long engine start up time, AgustaWestland to purchase choppers
to use the law to register devices as ‘innova- devices are registered under patents,” said IndiGo and GoAir. Together, they leading to impact on for VVIPs in India.
tive’ and take advantage of price exemption.
“Compared to drugs, where a new mole-
the head of a leading domestic medical
device maker.
have over 500 such planes on
order. Minister of State for Civil
punctuality The Special Court judge Arvind
Kumar has sent Michel to judicial cus-
cule or chemical entity is protected by intel- The industry feels it is now imperative to Aviation Jayant Sinha has called 2017: Engine oil metal tody till February 26.
lectual property rights (IPR), the number of differentiate between “radical” and “frugal” a meeting to review the opera- detection warning Seeking Michel’s judicial custody for
medical devices protected by IPR is much innovations in medical devices. tions of the engines and to decide 15 days, the ED told the court that during
higher. Also, while the life of a patent is Turn to Page 4 > whether they pose any threat. Faster wearing out of engine interrogation, he had given contradic-
The IndiGo aircraft which suf- combustion chamber tory answers to many questions.
fered the engine failure was flying According to the agency, even Michel
to Kolkata from Chennai. It had to
2018: Damage of engine seal was unable to explain the contradiction.
SOUND REGULATION BETTER FOR DEVELOPMENT return mid-way. The aircraft has
been grounded because of dam-
leading to mid-air shutdown Michel was sent to a seven-day ED
remand on December 29, 2018.
OF NBFCs: ECONOMIC AFFAIRS SECRETARY aged engine blades. Sources said
the regulator was contemplating
NUMBER OF A320NEO PLANES
WITH INDIAN AIRLINES
Citing the prosecution complaint
filed in 2016, the ED said Michel had
Batting for sound regulation of non-banking financial companies (NBFCs) in a partial grounding of the fleet if received 24.25 million euros and 1.6 mil-
the times of instability, Economic Affairs Secretary Subhash Chandra Garg
(pictured) said regulation was necessary for development, but a regulation
the engine manufacturer, Pratt &
Whitney, could not come up with
lion pound from the Agusta deal.
“During the interrogation it was
that throttled was not the way to go. “We need to nurture this (NBFC) story, an explanation. 66 observed that he had also received mon-
protect, promote and develop it. At the same time, we have to ensure that this “The regulator has taken note IndiGo 30 ey from other defence deals, which the
gets regulated,” said Garg. “I don’t see a conflict between regulation and of the incident and it will be GoAir ED will enquire,” the agency said in the
development. Sound regulation is necessary for better development. reviewed on Tuesday,” Civil remand application to court. During the
Regulation that throttles is not proper regulation,” he added, at the NBFC Aviation Secretary Rajiv Nayan hearing, ED counsels D P Singh and N K
Summit organised by the Confederation of Indian Industry. However, Choubey said. Asked if the gov- Matta alleged that all the documents
he stressed that systemically important NBFCs, which are about 276 ernment was contemplating to tion has been given as of now.” such as the audit report submitted dur-
in number and have 85 per cent of credit assets in the sector, need halt the deployment of the Pratt & Whitney and Airbus ing the trial in the Italian Court appeared
different regulations than the other 9,000-odd NBFCs. A320neo, he said, “We will review did not comment on the issue. “factually incorrect”.
SUBRATA PANDA writes 12 > the incident, but no such direc- Turn to Page 4 > Turn to Page 4 >

In price and value, Chinese phonemakers outpace Apple PHOTO: REUTERS

RAYMOND ZHONG
Beijing, 5 January
To most Americans, the names are unfamiliar,
maybe a little hard to pronounce: Huawei, Xiaomi,
Oppo, Vivo.
They are China’s biggest smartphone brands.
Around the world — although not in the United
States — they are making the handset business
brutally competitive. This week, after Apple
warned of disappointing iPhone sales in China,
industry observers said that devices from the
Chinese brands were a major culprit.
As the phone market in China reaches
saturation and sales shrink over all, the
country’s hardware makers are pushing hard,
As the phone market in China reaches saturation, the country’s hardware
and increasingly winning fans, in places like
makers are pushing hard in places like India where consumers find that the
France, Germany, India and Southeast Asia,
phones can do just about everything an iPhone can do at a fraction of the cost
where consumers find that the phones can do
just about everything an iPhone can do at a
fraction of the cost.
Apple sits comfortably atop the market in many
countries, including China, for the highest-end
handsets. But companies like Huawei have started
to do elsewhere what they have done in China,
competing with the iPhone on experience and
value and luring customers with price
comparisons that make them rethink buying
Apple’s signature product.
The cost difference is notable: In China, an
iPhone XR starts at around $950, while Huawei’s
top-end handsets start at about $600, and Xiaomi’s
comparable models start at even less. The iPhone
XS starts at around $1,250.
Companies like Huawei and Oppo have made
improvements in features and overall quality that
24.9
22.6
Huawei Vivo
Note: Share values through November
are enticing many wealthy Chinese people, said Mo
Jia, an analyst in Shanghai for the technology rese-
arch firm Canalys. Chinese brands’ aggressive
marketing and sales campaigns in Europe indicate
that the companies believe consumers there who
have traditionally used iPhones will do the same
thing. “Maybe it won’t happen this year or next year,”
Jia said. “But Huawei is going in that direction.”
HOME-GROWN COMPANIES DOMINATE
21.1
CHINA’S SMARTPHONE MARKET
Seven of the top 10 smartphone
brands in the countryare Chinese
(Share of Chinese market in %)
13.1
7.0
2.5
1.0 0.9 0.9
Oppo Xiaomi Apple Meizu Samsung Hisense Nubia
Source: Canalys
In its pursuit of the European market, Huawei
(pronounced “HWA-way”), which has its
headquarters in Shenzhen and is now the world’s
No. 2 seller of smartphones, has gone far beyond
the phone store. Huawei has sponsored summer
concerts in Greece, teamed up with Lithuania’s
basketball federation and backed a “China
Festival” in Cologne, Germany. Vivo sponsored last
year’s World Cup in Russia.
Xiaomi (pronounced “SHAO-mee”), which is
based in Beijing and was founded in 2010,
seemingly came out of nowhere to become the No.
4 mobile brand in Europe early last year, according
to Canalys. The gadget maker has also become the
top seller of phones in India, in part by opening
hundreds of stores in rural areas.
Clément Blaise, a 25-year-old banker in
northern France, has an iPhone for work and a
Xiaomi as a personal phone. He said he needed to
recharge the Apple device “all the time” but could
go two days without charging his Xiaomi.
“We have this false, preconceived idea that
Chinese brands are not as good, that their products
0.5 are of cheap quality,” Blaise said. “But the price gap
Nokia leavens the fears. For 150 euros” — around $170 —
“what do you risk anyway?”
Chinese phone makers have not made similar
inroads in the United States. The American
government has worked for years to stymie the sale
of Huawei’s smartphones and telecom-network
equipment, after a congressional inquiry in 2012
deemed Huawei a potential vehicle for
cyberspying by the Chinese government. The
Trump administration has urged Western allies to
do the same. Turn to Page 4 >
©2019 The New York Times New Service
2 COMPANIES
>
MUMBAI | 6 JANUARY 2019 1

SC orders status quo Jet managers yet to receive December

on HDIL arm’s land salaries; airline says payments cleared
Pilots, techies, management getting salary in instalments
AASHISH ARYAN velopment of nearly 3,000 biggest construction compa-
New Delhi, 5 January flats. Of these, 672 flats were to nies in India, is facing litiga- ANEESH PHADNIS lenders for fresh funds and
be built for rehabilitation of tion from several lenders. The Mumbai, 5 January debt-restructuring. Jet is also
WOOING THE CUSTOMERS
T
he Supreme Court has MHADA tenants living in company has already avoid- in talks with strategic
ordered that status quo Patra Chawl and Guruashish ed insolvency twice by reach- Managers at Jet Airways are | Jet Airways on Saturday | The sale will be on till Friday midnight and customers investor Etihad Airways for
be maintained with was free to sell the remaining ing settlements with banks. yet to receive their announced upto 50% will be able to book cheaper fares on airline’s flights and fresh funding and loan guar-
respect to the 40 acre land flats without any interference In the first instance, it December 2018 salary said a discount on economy and those of partner carriers — Air France-KLM antees.
leased to Guruashish from the authority. reached a settlement with source in the airline. Salaries business class tickets on Reuters on Friday night
Construction by Maharashtra Owing to delays in the Andhra Bank, which had of pilots, engineers and sen- | Executives said the discount would help airline generate reported that the airline is
domestic and base loads for February-March which is a lean season for
Housing and Area project, MHADA had termi- dragged HDIL to NCLT for ior management were international sectors close to reaching a deal with
Development Authority (MHA- nated the joint development failing to clear dues worth already being paid in instal- travel. The idea is to stimulate demand and increase SBI for a fresh loan of ~1,500
in a seven-day sale overall occupancy and revenue, they said
DA). The apex court will hear project agreement it had ~49 crore. The application was ments for the past few crore to meet its working-
the matter on February 13. signed with Guruashish withdrawn by the bank after months, as the airline faced capital requirements. The
It was hearing a petition Construction. MHADA had the two parties reached a set- pressure to settle overdue airline has scheduled a meet-
moved by the resolution pro- also seized nearly 10 acres of tlement. payments to lenders and ven- ing with its lessors and
fessional (RP) of Guruashish land back following an order Other than Andhra Bank, dors. lenders on Tuesday to dis-
Construction. The company of the Bombay High Court. HDIL was also taken to NCLT The airline’s management cuss a payment plan.
was admitted to insolvency in The rest of the land could not by Bank of India which sought wrote an email to employees Jet has defaulted on lease
July 2017 for failing to pay be taken back as Guruashish to recover nearly ~510 crore on Friday evening, inform- rent and vendor payments,
debt worth nearly ~250 crore had already sold it to other from the construction major. ing them about the delay. and is under pressure from
to Union Bank of India. developers. The two parties, however, The email also said the new them to clear the.
The RP of the company Following complaints from reached an arrangement on date of salary payment would The airline deferred
had pleaded for a moratorium some tenants, the economic terms of re-payment, follow- be communicated next week. induction of Boeing 737 air-
on the land that was leased to offences wing of the Mumbai ing which the bank withdrew However, a few hours lat- craft in its fleet, and will
it by MHADA. The plea was, Police also registered a case its application. er, the email was recalled. return a few of its older
however, rejected by both the against the directors of HDIL The company had to also The airline claimed there was 25 per cent of their October salary cut for 150 senior-most after the airline declared that planes before completion of
National Company Law and Guruashish Construction reach a one-time settlement no delay. “Jet Airways would 2018 salary. They have been executives, including its it had defaulted on principal lease terms. It has also car-
Tribunal (NCLT) and National for duping flat owners. with IDBI Bank in order to like to clarify that except for assured payment in January Chief Executive Officer Vinay and interest payments to a ried out a network rationali-
Company Law Appellate It is alleged that HDIL and avoid the sale of a chunk of its the informed groups, all this year. Dube. consortium of lenders, sation and is suspending
Tribunal (NCLAT), following Guruashish Construction took land. IDBI Bank had in March salary payments are up to The airline said last A pay-cut plan for pilots including State Bank of flights to nine destinations
which the RP approached the booking amounts from home last year said it would sell a date,” the airline said in month salary payments and engineers was dropped India. This resulted in credit in India and West Asia.
Supreme Court. buyers and promised to pro- parcel of land at Vasai in response to a query. would normalise by April because of resistance from rating agency Icra down- Jet Airways posted a net
The land in question was vide them flats within a time- Maharashtra, owned by HDIL, Sources at the airline said this year, and pilots, engi- both. grading the airline’s debt rat- loss of ~1,297 crore in the sec-
leased to Guruashish line. The builder, the home to recover debt worth ~40 the ground staff and cabin neers and senior manage- The airline had 16,000 ing. ond quarter of fiscal year
Construction, an arm of arm buyers had alleged, neither crore. HDIL is also in the crew have already got their ment would get their March employees and a wage bill of The airline has to repay 2018-19, its third successive
of Housing Development & gave them the flats nor process of reaching another December 2018 salaries. salary in full, in April. ~3,174 crore in March 2018. debt of about ~1,700 crore loss. It had a net profit of ~49
Infrastructure Limited refunded them the money. settlement with J&K Bank by Top executives, pilots and The airline has already The latest instance of between December and crore in the same period a
(HDIL), for building and rede- HDIL, once among the selling some of its assets. engineers are yet to receive enforced a 5-25 per cent salary delay comes two days March. It is negotiating with year earlier.

Hospital sector Exim Bank eyes Japan to raise funds Kerala govt to
take over TIAL
to bounce back On export financing:
VINAY UMARJI
Ahmedabad, 5 January
those spots. Nepal and Sri Lanka will
be growth areas, too,” he added.
As part of its African strategy, Exim
operations
GIREESH BABU
Even as it readies for a fresh round of EXPORT FINANCING HAS BEEN Bank had recently extended a credit Chennai, 5 January
fund raising, the Export Import Bank facility of $500 million (approximate-
of India (Exim Bank) is eyeing the QUITE GOOD IN THE LAST NINE ly ~3,400 crore) to Tanzania for water The government of Kerala is
Japanese market. Having already con- MONTHS. IMPOSITION OF TARIFFS BY supply projects as part of an agree- in the process of completing
ducted a roadshow in December 2018, CERTAIN COUNTRIES AND TRADE WARS ment signed on May 10, 2018, with the the steps to participate in the
Exim Bank is looking to tap the country’s government. Airports Authority of India’s
Japanese market with bond issues MAKE IT ABIT CHALLENGING. HOWEVER, On non-performing assets, (AAI) bid to privatise
based on market conditions in IN TERMS OF PERFORMANCE IN THE FIRST Rasquinha stated that the bank was Thiruvananthapuram airport.
January-February 2019. This was confident of bringing down the cur- The government has con-
revealed by David Rasquinha, man-
NINE MONTHS, THE GROWTH HAS BEEN rent net NPA rate of four per cent as stituted a committee to
aging director of Exim Bank. AHEAD OF LAST YEAR. WE HAVE ALSO well as address the minor defaults in decide on the technical-
“We may target the Japanese mar- PROJECTED THAT THE FULL-YEAR its international portfolio. cum-financial consultant for
ket (for fund raising) which is very “Export financing has been quite the newly formed consor-
receptive to good Indian names. We NUMBERS WILLBE MORE THAN LAST YEAR good in the last nine months. In the tium Thiruvananthapuram
did a roadshow there in December ALTHOUGH WE WON'T KNOW THAT world around us, certain countries are International Airport (TIAL).
and it was well received. So, if the mar- UNTILTHE YEAR IS COMPLETED” putting tariffs and indulging in trade The government said the
ket conditions look good in January- wars. So, it makes life a little bit chal- state has so far provided over
February, we may tap that market,” David Rasquinha
SAMREEN AHMAD
Bengaluru, 5 January
SECTOR OUTLOOK Rasquinha said. MD, Exim Bank
lenging. However, in terms of the first
nine months performance, growth has
290 acres of land to the air-
port for free, and taking over
IN NUMBERS The move comes in the wake of ris- been ahead of last year. We have also of another 18 acres is in
33,194

After witnessing a growth ero-
sion for the past two years due
ARPOB (~/day) ing challenges in markets like the US projected that the full year numbers process. It recently formed
with cost of raising funds going up. $2 billion (~7,000 crore to ~14,000 “If you look at the African conti- will be more than last year although the special purpose vehicle
31,947
31,511
30,956

to several regulatory restric- Based on market conditions, the bank crore, approximately). The last time nent, then probably eight out of 10 we won't know them until the year is TIAL in lines with the
31,153

tions, the hospital sector seems plans to raise anywhere between $1 we did that was in January 2018. So, it fastest growing countries are from completed,” he said. Cochin International Airport
32,280

to be on the path to recovery. billion and $2 billion from various is soon going to be time for us to go that region. So, we are looking at doing Last month, Exim Bank had stated (CIAL).
The sector’s revenue is markets through bond issues, similar the market. We will see the markets a lot of business in Africa. We have a that the country’s exports growth Earlier, Chief Minister
likely to grow in the range of 8- or more compared to last year. and then decide,” Rasquinha told large exposure in Bangladesh. would surge to seven per cent Pinarayi Vijayan said it has
10 per cent in short-to-medi- Q1 Q2 Q3 Q4 Q1 Q2 “We typically raise funds in the Business Standard. In fact, it is one of our largest single for the October-December quarter, decided to appoint law firm
um term, supported by a high- international markets because more According to Rasquinha, as against exposures where we are funding rail- with merchandise exports likely Cyril Amarchand Mangaldas
FY18 FY19
er number of patients and than 70 per cent of our loan portfolio fund raising, it is deployment of funds way projects, power projects and to rise to $82.39 billion (~5,700 crore as legal consultant to partic-
better pricing, said an Icra 3.71 3.69 3.73 3.8 3.67 3.59 is in US dollars. So, we tap the bond that is set to pose some challenges. homes, among others. It is not that roughly) for Q3 of fiscal 2018-19, ipate in the bid and has
report. The report gave a sta- ALOS (No of days) markets. So, we will go to the bond However, the bank is eyeing emerging the entire world is doing badly. There as against $77 billion (~5,300 crore, formed a committee led by
ble outlook to the sector. ARPOB: Average revenue per occupied bed markets for anywhere between $1 and markets to address the same. are bright spots and we look to target approximately). the chief secretary.
Significant bed additions ALOS: Average length of stay
in the last four years, and their Icra’s sample of companies include
Apollo Hospitals Enterprise Limited,
ramp-up is expected to show Fortis Healthcare Limited, Narayana
marked results, it said.
Further, the sector is
expected to benefit from an
Hrudalaya Limited, Healthcare Global
Enterprises Limited, Max India Limited
and Shalby Limited
Source: Icra
IISc centre makes SMEs future Fintech firms may see
curbs on data access
increase in the disease bur-
den, higher incidents of
lifestyle diseases, and an age-
ing demographic profile.
patients, added the report.
In the second quarter of
ready with R&D support
Implementation of the FY19, the companies in Icra's SAMREEN AHMAD NIKHAT HETAVKAR & ABHIJIT LELE
goods and services tax (GST), sample set had reported a 7 Bengaluru, 5 January Mumbai, 5 January
the cap on prices of stents, per cent drop in earnings
knee implants by the National before interest, tax, deprecia- Imagine a wardrobe that can dry Credit scoring companies may
Pharmaceutical Pricing tion and amortisation clothes straight out of a washing restrict access of fintech companies to
Authority, and stiff regulatory (Ebitda), from ~5.56 billion in machine. This might well be a consumer credit data till clear-cut
action by certain states, Q2 FY18 to ~5.16 billion. It also breakthrough innovation for mil- regulations on data sharing for these
including putting restrictions saw a drop in operating mar- lions of Indian houses, which do entities emerge, said experts.
on procedure rates, levying gin from 15 per cent to 13.3 per not have a balcony or get enough The Indian Banks' Association
penalties and placing opera- cent during this period. sunlight for drying clothes. (IBA) held a meeting with the coun-
tional limitations on erring The aggregate revenue There are a string of such inno- try’s top credit scoring companies on
hospitals had hurt the prof- grew by a subdued 5 per cent vations happening at TIME2 — , a Friday to discuss the risks of allowing
itability of the sector. from ~37.07 billion in Q2 FY18 centre for small and medium enter- data access to fintech companies and
Ayushman Bharat, the to ~38.89 billion. Shubham prises (SMEs) — at the Society of possible solutions, said sources. Various fintech firms have opted for
government's healthcare Jain, group head and vice- Innovation and Development, the An executive of a leading credit credit scoring partnerships to
plan, is also likely to fuel the president, Icra had said the Indian Institute of Science (IISc), scoring company said discussions facilitate lending in online
mandatory and discretionary aggregate number of opera- Bengaluru, to prepare the ground with the IBA and other stakeholders marketplaces like Bankbazaar
healthcare spending in the tional beds has gone up 4 per for them through its research and Even though India is a hub for SMEs, with over 40 million registered and regarding access of fintech compa-
country as the plan boosts the cent, from 20,665 beds in Q2 development (R&D) prowess. unregistered ones, which employ over 40 per cent of India’s workforce, nies to data are on. “The restrictions credit scoring companies but to the
spending power of the FY18 to 21,551 beds in Q2 FY19. Even though India is a hub of they are not technology ready to expand their product lines on data sharing will remain till clear customer. “Fintech companies access
SMEs, with over 40 million regis- regulations and rules on data protec- data with the explicit consent of con-
tered and unregistered ones, a corporate. But if it fails, it might shoe storage box which disinfects tion and privacy emerge. The rules sumers. This allows us to provide a
Sunday Business Standard which employ over 40 per cent of have to wind up the business. the shoes and deodorizes shoes are expected to spell out the respon- more efficient and personalised serv-
MUMBAI EDITION India's workforce, they are not Hence, TIME2 does not disturb the and socks - a boon for diabetic sibilities and conditions of data shar- ice,” he added.
Printed and Published by Sangita Kheora on behalf of Business Standard Private Limited and technology ready to expand their current operations of the SME, patients as minor foot alterations ing with fintech companies,” he Various fintech companies have
printed at M/s. Dangat Media Private Limited, 22 Digha M.I.D.C., TTC Industrial Area, Vishnu product lines. irrespective of the development on could mean disabling infections added. There is no clarity on time- opted for credit scoring partnerships
Nagar, Digha, Navi Mumbai, 400708 and published at 3rd & 4th Floor, Building H, Paragon
“We are making SMEs technol- the innovative side, said Dravid. for them. line for these regulations now. to facilitate lending in online market-
Condominium, Opp. Century Mills, P. B. Marg, Worli, Mumbai - 400 013
ogy-ready. They have product Of the five SMEs, which are a "The products will be launched In December, leading banks had places like Bankbazaar and Rubique.
Editor : Shyamal Majumdar
ideas, but do not have the R&D part of the first batch at TIME2, in the market by the year end. So approached the IBA over data securi- Fintech players said banks are
RNI NO. : MAHENG/2007/28487 capability to make them a com- most of them are legacy enterpris- far, we have filed for six patents ty concerns arising due to fintech wary of the changing market dynam-
Readers should write their feedback at feedback@bsmail.in
Fax : +91-22-24978456-68 mercial success. We help them es focused on business as well as for such products," said Dravid. companies being allowed access to ics while bankers say that there is
For Subscription and Circulation enquiries please contact: develop a capability to come up consumers. However, even Another 15 year-old SME, which credit bureau data. increasing risk of frauds due to the
Ms. Mansi Singh Head-Customer Relations with technologies and create a though some of them are seen as is into scientific instrumentation, “Fintech companies are not regu- unregulated fintech players.
Business Standard Private Limited, Nehru House, 4, Bahadur Shah Zafar Marg , New Delhi - 110 002
marketable product out of it,” said leaders in their respective fields, has developed a technology to lated and could easily breach data A banking technology executive
E-mail: subs_bsdel@bsmail.in “or sms, SUB BS to 7007”
Overseas subscription: (Mumbai Edition Only) Yatishwar Dravid, head of TIME2, they are anonymous to the end grade cashew nuts. Cashews have privacy and security norms. While said the large scale of banks allows
One year subscription rate by air mail INR 46620 : USD 725 IISc. This is a collaborative effort customer. Hence, they are devel- around 18 steps of gradation, which some top fintech players have volun- them economies of scale but also
DISCLAIMER News reports and feature articles in Business Standard seek to present an unbiased including, investment, time and oping their own products to reach are not followed in India due to the tarily implemented data protection weighs them down with excessive
picture of developments in the markets, the corporate world and the government. Actual develop-
ments can turn out to be different owing to circumstances beyond Business Standard’s control and
human resource shared between out to the end consumers directly lack of technology. "Hence, our standards, there needs to be defined regulation. He added that access to
knowledge. Business Standard does not take any responsibility for investment or business decisions the enterprise and IISc. and grow in scale. cashew exports get one-tenth the guidelines to protect customer inter- data must also come with responsi-
taken by readers on the basis of reports and articles published in the newspaper. Readers are expect- But for a SME to get into prod- A Mumbai-based furniture cost of those in international mar- est,” said a senior banker, on condi- bility to guard it.
ed to form their own judgement.
Business Standard does not associate itself with or stand by the contents of any of the advertise-
uct development is a risky affair. company, which is a part of the kets," added Dravid. tion of anonymity. Fintech compa- Data restriction would severely
ments accepted in good faith and published by it. Any claim related to the advertisements should "Big companies can parallely run first batch of SMEs innovating at The same enterprise is also nies leverage data from traditional impact the business model of vari-
be directed to the advertisers concerned. research processes, develop new IISc, is exploring smart furniture - developing a medical application sources like credit bureaus as well as ous fintech companies. This comes
Unless explicitly stated otherwise, all rights reserved by M/s Business Standard Pvt. Ltd. Any print-
ing, publication, reproduction, transmission or redissemination of the contents, in any form or by
products, and probe the market something more than static. Apart which will make blood tests auto- alternative data points, such as as an additional blow to the indus-
any means, is prohibited without the prior written consent of M/s Business Standard Pvt. Ltd. Any for success," he added. from developing a wardrobe, matic without human interfer- spending patterns and utilities. try, which is still reeling from the
such prohibited and unauthorised act by any person/legal entity shall invite civil and criminal If an SME's product becomes which will dry the clothes, this ence to assure the samples do not An executive of a fintech company impact of the Supreme Court’s
liabilities.
successful, it will end up becoming company has also developed a mix up. said data does not belong to banks or Aadhaar judgment.
No Air Surcharge
.
Open-ended NBWs
against Sterling
Biotech owners
PRESS TRUST OF INDIA
New Delhi, 5 January
A
Delhi court on
Saturday issued open-
ended non-bailable
warrants (NBWs) against four
directors of Sterling Biotech
(SBL) - Gujarat pharma firm -
in a ~8,100-crore money
laundering probe case.
Additional sessions judge
Satish Kumar Arora allowed
the Enforcement Directorate's
plea seeking issuance of NBW
against SBL directors Nitin
Jayantilal Sandesara,
Chetankumar Jayantilal
Sandesara, Dipti Chetan
Sandesara and Hiteshkumar
Narendrabhai Patel.
The ED has registered the
alleged bank fraud case against
the firm under sections of the
Prevention of Money
Laundering Act (PMLA).
The accused are also
being probed by the ED for
allegedly bribing senior
income tax department offi-
cials as part of an earlier
criminal complaint.
On December 24, 2017, the
agency had informed the
court that it wanted to
approach Interpol for
issuance of a red corner
notice (RCN) against the
SBL's directors.
The ED's special public
Nafed to set up 100 bio-CNG
plants with ~5k-cr investment
PRESS TRSUT OF INDIA
New Delhi, 5 January
Farm cooperative major Nafed
Saturday announced setting up
100 bio-CNG manufacturing
facilities using agri-waste such
as stubble through public-pri-
vate partnership (PPP) with an
estimated investment of ~5,000
crore.
The first three centres will
come up in Muzaffarnagar in
Uttar Pradesh, which is the
largest sugarcane producing
state where waste from sugar
mills is available in abundance,
Nafed Managing Director
Sanjeev K Chadha said.
NCLT removes auditor
for the first time under
new Companies Act
VEENA MANI
New Delhi, 5 January
The National Company Law
Tribunal (NCLT) has removed
the statutory auditor of Zen
Shaving and allowed the
Ministry of Corporate Affairs
(MCA) to appoint an inde-
pendent director in his place.
This is the first time the NCLT
has passed such an order
against an auditor under the
Companies Act, 2013.
Metals and chemicals
manufacturer Zen Shaving
had applied to be listed for an
initial public offering (IPO) on
the Pune Stock Exchange.
In its order, the NCLT not-
ed that family members of the
auditor, Mukesh Maneklal
Choksi, are shareholders of
Zen Shaving. Also, the auditor
had not examined the com-
pany’s books before giving the
audit certificate.
The NCLT has also
observed that the actions of
1.5 mn public sector power
employees call strike on Jan 8
VIRENDRA SINGH RAWAT
Lucknow, 5 January
Over 1.5 million public sec-
tor power employees, includ-
ing engineers, would partici-
pate in a two-day strike
across India on January 8,
against the government's
reported attempt to privatise
the energy sector.
The strike has been called
by the national federations
of power sector employees,
under the National
Coordination Committee of
Electricity Employees and
Engineers (NCCOEEE).
MUMBAI | 6 JANUARY 2019
Sterling Biotech — a Gujarat pharma firm — is embroiled in a
~8,100-crore money laundering probe case
prosecutor Nitesh Rana had
told the court the Interpol
guidelines for opening RCN
against the four accused per-
sons required open-ended
NBWs from the court.
An "open-ended NBW"
does not carry a time limit
for execution unlike non-
bailable warrants.
The ED had earlier told
the court the accused per-
sons have left the country
under suspicious circum-
stances, and evaded the
process of law to face crimi-
nal prosecution, and were
"shifting countries to escape
the clutches of the law".
“An agreement has already
been signed with 4-5 private
investors like Reliance, United
Nations Environment
Programme (UNEP) and tech-
nology provider. Initially, 100
units will be set up across the
country with an estimated cost
of about ~5,000 crore,” Chadha
told reporters. Another agree-
ment has been signed with
Indian Oil for purchase of bio-
CNG from the plants at a rate of
~48 per kg, he said.
Chadha said that Nafed
presently is in the processing of
mapping farm waste from sug-
ar mills, mandis and other areas
to ensure assured supply.
the company make it seem
like a shell company.
The tribunal has asked Zen
Shaving and its auditor to file a
counter affidavit within 15
days, and posted the matter for
further hearing on February 2.
The MCA had also sought that
Choksi be debarred from being
an auditor of any company for
the next five years.
The regional director,
western region, MCA has
alleged the company’s stocks
were not listed on the Pune
Stock Exchange and it
siphoned of investors’ money
by not paying them when the
IPO did not work out.
Apart from that, the com-
pany has not issued financial
statements after 1995 and
changed its registered office
frequently.
The NCLT said the compa-
ny had failed to list on the
exchange despite giving such
an assurance in the prospec-
tus, filed in October 1996.
The protestors have raised
concerns over the Electricity
(Amendment) Bill, 2018, con-
demning the privatisation
policies of the Centre and the
state governments.
Their other demands
include integration of sepa-
rate power utilities in the
state electricity boards,
implementation of old pen-
sion scheme for all employ-
ees recruited, after regulari-
sation of contractual
workers, All India Power
Engineers Federation (AIP-
EF) chairman Shailendra Du-
bey told Business Standard.
The court had earlier
issued a NBW against all the
four accused, which could not
be executed because of the
"unavailability of the afore-
said concerned persons".
The agency has also
attached a number of prop-
erties belonging to the
accused, and a charge sheet
was filed against them and
others.
The ED had told the court
it was suspected the accused
were in Nigeria, the United
States or the United Arab
Emirates because they have
extensive business interests
in these countries.
Farmers' aggregators will also
be identified from whom the
agri-waste will be purchased.
Already, work is in progress
in setting up of first three units
in Muzaffarnagar, which is
expected to be completed soon,
he added.
Nafed chief further said that
each unit will have a capacity to
process at least 100-300 tonne
agri-waste, from which one-
tenth of the CNG will be pro-
duced.
The focus initially will be in
Delhi and NCR. Gradually, the
number of units will be
increased in other parts of the
country, he said.
COMPANIES & PUBLIC AFFAIRS 3 <
Energy, not loan waivers or polls,
will be India’s key challenge in 2019
The country must get its act on global alliances right in order to feed its fuel-hungry economy;
on the agricultural front, reforms could be the biggest change, if handled well
SUBHOMOY BHATTACHARJEE
New Delhi, 5 January
The interest cuts across
party lines. West Bengal, for
instance, is trying out the
Trend spotting on a global application of block chain in
scale for 2019 shows up hard- land records and in the health
ly any one that will really sector. But, if as state com-
make a persuasive case. merce, finance and industries
Commentaries for the year minister Amit Mitra claims, it
have, instead, thrown up a can demonstrate a successful
wide menu, which means the adoption of blockchain in the
case for the year is wide open. city traffic control system,
There were strong contenders there wouldn't be any looking
though, like President Donald back. There is still a long way
Trump's engineered shut- ahead, though. The UN's
down of the US government biennial E-Government
into the New Year or that of Survey 2018 ranks India at 96,
Nikkei's fall in Japan on its up from 107 in 2016 and 118
final trading day of the year, in 2014.
leading to its first annual loss India's challenge comes
in seven years. from the energy sector. Crude
The 12.1 per cent decline of prices ended 2018 at just
the index in 2018 broke its about the same place where
longest winning streak since they began, with a violent
the late 1980s. spike in October in between.
For India too, despite a And domestic coal supplies at
general election due in four a third of the country's power
months, the guidance seems stations have dried up. The
muted. Of course, it isn't like- Crude prices ended 2018 at just about the same place where they began, with a violent spike in twin scare mirrors a challenge
ly to turn out that placid as October in between. And domestic coal supplies at a third of the country's power stations have for India. Should it stick to
none of the previous editions dried up. The twin scare mirrors a challenge for India coal and attempt to jump
have passed without their straight to renewable energy
share of drama. But it does missing in action for the rest the rules to the rewritten. This those, the ~81,400 crore Delhi- or make a detour via natural
seem that irrespective of the of the year. (RBI’s MPC will could be the biggest change Mumbai Freight Corridor, in gas? Should it attempt to
occupant of 7 Lok Kalyan meet on February 5). So while in the economy in 2019, if the works since 2006, has a develop a long-term partner-
Marg post elections, some of IMF expects growth to slow handled well. deadline of March ship for oil wells abroad?
the trends for the economy down in 2019, the year-end The markets There is no point 2020, but most of it Oil minister Dharmendra
are fairly long term. The sec- risks seem to have got muted. may have realised for India to spend should get going Pradhan does not have the
tors likely to see the most For India too, some of the some of this story scarce resources within this year. mandate to sort through these
promising action are in agri- tail risks are finally over. Year already. In a year on the high seas Railways has questions, but a lot rides on
culture and related sectors 2018 has ended with the polit- when most sectors in 2019, as it has already begun trial the choices made. There is no
like food processing, as well ical parties picking up the tanked, the market begun to runs on some point for India to spend scarce
as the infrastructure sector. worst one, that of loan waiver cap for food and stretches of these resources on the high seas in
The risks all come from the for farms. The consequent beverages has lines that are capa- 2019, as it has begun to. It has
unresolved energy questions. risks have already been climbed 2.59 per cent on the ble of carrying heavier than established a bridge head at
We shall come to those short- stitched in to the new year BSE, leaving heavyweights the 22.5 tonne axle load run Chabahar port, taken on the
ly. expectations for the banking telecom and cement behind. on other lines. Technological
It is also in line with the sector. It is possible to look Outstanding bank credit for changes like those for semi-
global trends, though the first beyond now. The most prom- the sector has ready reached high speed trains are catch-
mantle of a pan-oceanic part-
ner with Japan through the
Asia-Africa Growth Corridor.
quarter of 2019 has an event- ising one of those is an expect- ~1.4 trillion by the end of ing up. The laggards are those Yet, it is still scared to
packed calendar. ed spike in demand for agri October and ranks seventh, for institutional changes. The make choices among friends.
The Brexit calendar says and dairy products. catching up with the engi- NDA government had set a In 2019 it might import as
UK would leave the EU by 29 There are two ways to fac- neering sector. target of leasing out 100 pri- much as half the quantity of
March, 2019; reports from the tor in this spike. First, the ris- The other runaway sector vate sector-run fresh termi- coal as it mines inland but
latest round of US-China ing population and the reju- could be infrastructure espe- nals two years ago. A little that could mean investing in
trade talks seem most prom- venated rise in income cially the railways. Some of it above half of those-58 as on African states, which is a
ising and could create a sta- because of the renewed in the passenger segment December 2018-are in place. thorny quest.
bilising influence on world growth momentum of the would be derived from the ris- But the most promising New Delhi also shows no
trade soon, while along with economy creates a strong ing income of the lower half of change for 2019 could be in clarity on who would be its
India, a host of countries go to demand for these products. It the Indian population. The adoption of e-governance by preferred partners to keep
elections at the same time. could be supplemented with a other is freight and the rail- the states. The scale of rapid imported oil and gas flowing
These are Indonesia, universal basic income for ways' expanded capacity to disaster relief in Kerala in to a hungrier economy, but
South Africa and Nigeria. which the consensus is build- carry it. 2018 showed what e-gover- the choices again have to be
Bangladesh has already ing up. Roads are expanding fast nance is capable of delivering. made. And those are political
returned a ‘yes’ mandate for Second, there is another but the pondering turn The other states watched choices.
the ruling Awami League over consensus developing around around in the Indian Railways carefully. Telangana has Yet the risks for 2019
the past weekend. And key getting the long delayed is what is likely to catch atten- become the first to tie up with appear to have a downward
central banks, beginning with reforms in the agricultural tion in 2019. The changes are a government abroad, bias. Among those from the
the US Fed meeting in late marketing infrastructure, not as drastic as railway min- Estonia, to deliver on e-gov- sixth largest economy's point
January would decide if infla- going. ister Piyush Goyal will have ernance results, and even of view, the unpleasant ones
tion, at least wage push has Most of the changes here you believe, but they are arriv- puny Nagaland has joined could only spring from them
returned or could remain do not need money but need ing. The most ambitious of suit. who will govern.
4 YOUR MONEY
>
MUMBAI | 6 JANUARY 2019 1

TRENDS
BS TUTORIAL
Health insurance disruption in 2019 Jayant Pai

Financial literacy
1. Luca Pacioli is considered as the father of
With the IRDAI committee making significant recommendations, customers are likely to benefit ________________.
ASHISH MEHROTRA the breadth of expenses covered – A. Business management
from OPD to diagnostics, pharmacy B. Accounting
C. Assembly line production

I
n a compelling case for univer-
sal health coverage, the World
Bank argues that it “allows
countries to make the most of their
strongest asset: Human capital.”
This idea has very real relevance
for India, which will have the
world’s largest workforce by 2027.
To harness our demographic divi-
dend for economic growth, we need
a healthy workforce. It follows that
all Indians must have access to the
health services they need, without
impact to their productivity or a
crippling financial burden.
To that end, 2018 was a pivotal
year for health insurance in India.
Ayushman Bharat, the world’s
largest public health insurance
scheme, will benefit an unprece-
dented 500 million Indians. With
forward-looking regulation, The
Insurance Regulatory and
Development Authority of India
(IRDAI) paved the way for greater
inclusion, bringing treatment of
HIV and mental illnesses within
the ambit of health insurance.
Going into 2019, these measures
and other emerging trends will
unlock value for millions of cus-
tomers, while simultaneously
increasing penetration of health
insurance in the country. A look at
the shifts I see panning out in 2019.
Increasing inclusion with
customer-focused regulation
Customers have often complained
about the complex terminology in
health insurance policies. That is
set to change in 2019. An IRDAI
working group has made signifi-
cant recommendations on stan-
dardisation of exclusions in health
insurance. A proposed change is to
limit the number of illnesses and
diseases that remain outside the
ambit of insurance coverage. As per
another key recommendation, after
8 years insurers will not be able to
deny a claim based on non-disclo-
sures at the time of taking the pol-
icy, thus protecting the interests of
customers. Standardisation of
exclusions would benefit customers
on many levels. It would regulate
insurance contracts through uni-
formity in policy wordings, min-
imising differences across products
and insurers. It would lead to more
comprehensive products. Most
importantly, it would improve the
customer experience, with policies
that are unambiguous and simple
to understand.
Through 2018 the IRDAI
stepped up efforts to bring greater
inclusivity and make health insur-
ance more comprehensive. The
impact will follow in 2019, as insur-
ers solve challenges to implemen-
tation. For instance, while data is
available on the mortality rate of
HIV in India, it is inadequate on
morbidity, making it challenging to
set premiums. While insurers
might initially introduce supple-
mentary coverage for HIV and
mental illnesses, stand-alone prod-
ucts will emerge with experience
over a longer period of time.
Towards a tech-powered value
proposition
Wearable tech and the Internet of
Things (IoT) are poised to upend
health insurance in India.
Wearables can capture data that
lead to actionable insights – from
monitoring the heart rate to track-
ing blood pressure and sugar levels.
Within the ambit of data privacy
guidelines, insurers would be able
to leverage insights to develop
products that are tailor made for
the customer. This could be based
on age, geography, current health
condition, family history and exer-
cise regimen, among other factors.
Since insurers would know the risks
associated with a customer’s
lifestyle, they would be able to
design coverage best suited to that
customer’s needs, at an appropriate
price. Beyond being built into the
product, wearables and IoT will
also have applications at the
onboarding stage. Monitoring a
customer’s blood glucose while
underwriting the risk, would guide
an insurer to offer a diabetes prod-
uct that is customized and priced
fairly for that customer. I also see
IMAGE: iSTOCK
wearables powering the growing
shift from reactive to preventive
care, as customers proactively look
to stave off chronic illnesses.
Insurers will increasingly lever-
age technology in the near future,
to create products that are specific
in nature. This could be at a dis-
ease level, that is, products meant
for cancer, cardiac ailments, dia-
betics, or customised for particu-
lar customer segments – like prod-
ucts that reward customers for a
healthier lifestyle. The IRDAI
recently announced its “regulatory
sandbox approach” towards fintech
innovations, geared at bringing
greater efficiency, managing
risks better and enhancing value
for customers. This will further
encourage break-out thinking with-
in the industry.
Delivering value and
convenience with service to
match
As customer expectations evolve,
and preventive health check-ups –
will expand far beyond hospitali-
sation. While creating GoActive,
which focuses on everyday health
and fitness, our research revealed
that customers wanted everyday
convenience baked into the prod-
uct. They asked for overall expens-
es towards healthcare – 65 per cent
of expenses are typically out of
pocket – to be taken care of by
insurance. Insurers are accordingly
developing new models and ecosys-
tems – driven by technology and
data analytics — to cover a broader
spectrum of expenses that deliver
this convenience.
Customers want insurers to
simplify the healthcare journey for
them, and this will guide the direc-
tion of products in 2019. The grow-
ing breed of tech-savvy Indians put
a premium on their time and want
regular health activities such as
scheduling doctor's appointments
or personalized health coaching to
all be available on the go! In a six
city survey we conducted, more
than a third of potential buyers said
they were willing to download a
health insurance app. Based on cus-
tomer insights our health app built
in real-time appointments with
doctors, payment on a cashless
basis, and online ordering of
medicines – all in one place,
accessible on the go and with just
one click.
The health insurance industry
grew by 40 per cent this year. This
growth was largely driven by the
launch of Ayushman Bharat, which
has contributed hugely to the rising
awareness about health insurance.
Inclusive regulation will further
level the playing field, bringing
health insurance to many more
Indians. Insurers now have newer
opportunities to expand their serv-
ices by offering customers tremen-
dous value, convenience and dif-
ferentiated services, wrapped in a
personalised experience. In this
new landscape, I see the role of the
insurer transforming from facilita-
tor and provider to partner, for a
new generation of customers.
The writer is MD & CEO,
Max Bupa Health Insurance
D. Internet
2. Which of these banks has the envious distinction of
never having suffered a quarterly loss since the late
1950s?
A. Brazil-based Bradesco
B. The US-based Wells Fargo
C. Spain-based Santander
D. Italy-based Banco Popolare de Vicenza
3. Which of these celebrated its Golden Anniversary around
a year ago?
A. ATM
B. Cheque book
C. Credit card
D. Debit card
4. The Du Pont ratio helps to dissect ______________.
A. Earnings per Share
B. Return On Equity
C. Sales turnover
D. The components of leverage
5. The Phillips Curve measures the relationship between
___________ and _______.
A. Unemployment and education
B. Inflation and weather patterns
C. Unemployment and Inflation
D. Weather patterns and migration
that result within an economy.
unemployment and corresponding rates of inflation
historically inverse relationship between rates of
5. C. The curve, named after William Phillips, describes the
margin while computing Return On Equity.
components - asset turnover, leverage and net profit
4. B. It helps to know the contribution of three individual
Branch in London in 1967.
3. A. The first ATM was installed by Barclays at its Enfield
2. C.
keeping in Europe.
to publish a work on the 'double-entry' system of book-
1. B. He was an Italian mathematician and the first person
Solutions
The quiz master is head - marketing, PPFAS Mutual Fund
Send your queries and feedback at yourmoney@bsmail.in

> FROM PAGE 1

DPCO amendment may
benefit MNC
device makers
“Judging radical versus frugal innovations in
medical devices for the purpose price dif-
ferentiation shall be a challenge for the
National Pharmaceutical Pricing Authority
(NPPA) as they do not have expertise on the
subject. They must constitute a medical
expert panel of doctors, engineers, scien-
tists, NGO members, patent lawyers and
Central Drugs Standard Control
Organisation (CDSCO) officers who (can)
analyse the submissions and differentiate
the technologies that are truly disruptive
and bring extra benefits to the patient,” said
Gurmit Singh Chugh, managing director,
Translumina Therapeutics, which manu-
factures cardiac stents.
After a price cap on stents was intro-
duced, Abbott discontinued its Alpine stents
from the Xience family in April last year
and has not introduced the Xience Sierra
stent in India. Currently, Xpedition and
Prime stents, under the Xience family, are
available in India.
Rajiv Nath, forum coordinator of the
Association of Indian Medical Device
Industry (AIMED), said that in order to allow
any manufacturer or importer to sell a car-
diac stent or any medical device at a price
higher than what was notified by the NPPA,
the government had earlier said one had to
produce supporting clinical data. “However,
now there is no need to provide clinical
superiority data to seek circumventing
applicability of price caps under the DPCO.
They have been provided a five-year exemp-
tion window if their product or process is
patented by India,” he added.
According to the earlier norms, the
exemption was applicable to products devel-
oped through “indigenous research and
development”.
An e-mail sent to the market leader in
cardiac stents Abbott, asking if this would
encourage them to bring in more innovative
products to India and registers them under
the Indian Patent Act, remained unan-
swered till the time of going to press.
As such the Indian medical devices
industry is completely dependent on
imports -- India imports close to 75 per cent
of its medical devices. “The market size of
the domestic medical devices industry is
around ~80,000 crore, of this around ~31,000
crore is imports. This value is without the
After a price cap on stents was
introduced, Abbott discontinued
its Alpine stents from the Xience
family in April last year and has
not introduced the Xience Sierra
stent in India. Currently,
Xpedition and Prime stents,
under the Xience family, are
available in India
duties and trade margins. Going by maxi-
mum retail price, the market size of the
imported medical devices in India is rough-
ly ~60,000 crore,” Nath explained.
The pharma industry is divided in opin-
ion at this point on the DPCO amendments.
While the Organisation of Pharmaceutical
Producers of India (OPPI), which represents
multinational drug firms, welcomed the
move, saying the government is “acknowl-
edging research and development of new
medicines to address the unmet medical
needs of Indian patients”, the Indian Drug
Manufacturers’ Association (IDMA) felt that
this was detrimental to the government’s
Make in India move. The Indian
Pharmaceutical Alliance, which represents
the leading domestic pharma companies,
felt that the exemption for innovative drugs
was applicable only if they were manufac-
tured in India.
Mallya first tycoon to be
declared fugitive
offender
The judge declined, saying a court under
the FEO Act cannot stay its own order.
The ED had argued that it made all pos-
sible efforts to bring Mallya back to India,
but failed.
The extradition process in the UK court
was proof enough that he was unwilling to
return, ED counsel D N Singh contended.
Even after the London court upheld
Indian authorities’ plea for his extradition,
Mallya decided to appeal against the order
before the higher court there and refused to
return, so he should be declared an FEO,
Singh argued.
Mallya's lawyers contended that as he
had surrendered before a magistrate’s court
in London (during the hearing on his extra-
dition case) and obtained bail, he could not
be called a fugitive.
They had also questioned the ED’s claim
that he left India under suspicious circum-
stances, arguing that he had left to attend a
meeting of World Motor Sports as the direc-
tor of an F1 team (Force India).
Mallya left India on March 2, 2016. A
court in London on December 10, 2018
ordered his extradition.
Facing cases registered by the ED as well
as the Central Bureau of Investigation, he is
wanted for alleged fraud and money laun-
dering amounting to an estimated ~9,000
crore.
Under the FEO Act, a person can be
declared a Fugitive Economic Offender if a
warrant has been issued against him for an
offence involving an amount of ~100 crore or
more and he has left the country and refus-
es to return.
Pratt & Whitney jet
engines under
regulator’s scanner
Last year, the Directorate General of Civil
Aviation (DGCA) grounded around 14
A320neo planes, after European safety reg-
ulator European Aviation Safety Agency
(EASA) raised an alarm about the engine.
Sources said the aircraft’s engine stalled
mid-air, followed by a loud noise and an
abnormal vibration in the engines. “The
engine suffered damage to its blades.
Currently, it is waiting for a replacement at
the Chennai airport,” said a source.
IndiGo confirmed the incident, but
insisted that the pilot brought the engine to
idle deliberately and followed the proce-
dure. Pilots of A320neo planes have been
asked by the engine manufacturer to bring
engine to idle mode whenever they notice
any malfunction. In its idle mode, the
engine uses minimum thrust and power.
Though the problem has not been diag-
nosed, it is related to overheating of the
compression chamber, according to sources.
Preliminary investigation of the incident
by the enginemaker has found that the tem-
perature of the rear-end of the dry face seal
is increasing more than the front end, as it is
not getting lubricated adequately. So, Pratt
is working on a modification of the seal that
would increase the flow of oil, leading to
higher lubrication in the rear end of the
engine. The new design will be released to
operators only in early 2019, said a person
aware of the development.
Michel got kickbacks
for many deals: ED
They said, “we have documents to show
they misled the Italian court. Our probe has
been fruitful.’’ Michel (pictured) routed
money through hawala operators to acquire
cash and purchase property, the ED said.
The probe agency in the remand application
to court said it had identified Michel’s prop-
erties which were purchased out of the pro-
ceed of the crime. ‘’We have investigated
how cash circulated through multiple bank
accounts.’’
The prosecutor pointed out that docu-
ments from five nations have been received
so far through letters of request to foreign
countries.
“There are reasons to believe based on
the evidence and material in possession to
link the said accused to the offence of mon-
ey laundering. His role is duly explained in
the prosecution complaint (chargesheet).
The accused is a British national and has no
roots in India. There is every likelihood that
he may abscond from India and evade the
process of law, especially in light of his past
conduct,’’ the ED said.
The ED has filed three supplementary
chargesheet in the case so far. The counsel
will now initiate bail application with the
court. During the hearing, Michel’s counsel
argued that no incriminating evidence was
shown to them during the interrogation.
Michel is among the three middlemen
being probed in the AgustaWestland deal,
besides Guido Haschke and Carlo Gerosa, by
both the ED and the Central Bureau of
Investigation (CBI).
In 2014, India had scrapped the contract
with AgustaWestland for supplying 12 VVIP
choppers to the Indian Air Force over an
alleged breach of contractual obligations
and charges of paying kickbacks to the tune
of Rs 423 crore by it for securing the deal.
Former IAF chief S P Tyagi was also
chargesheeted by the CBI in a Delhi Court
along with nine others over allegations of
bribery linked to the deal.
In price and value,
Chinese phonemakers
outpace Apple
Security concerns have not dissuaded some
buyers across the Atlantic. Giannis
Vassilopoulos, a college student in Athens,
said he had been bombarded by Huawei
ads during his recent travels around Europe.
He said he had bought a Huawei phone
because the brand felt more familiar, more
European even.“Seeing Huawei in the mid-
dle of London makes it look immediately
more Western,” he said.
Apple still has a hold on consumers in
many places. Announcing the sales slump
in China this week, the company’s chief
executive, Timothy D. Cook, said Apple
expected to set revenue records in wealthi-
er countries like Germany, Italy, the
Netherlands, South Korea and Spain and
in some emerging markets like Malaysia,
Mexico, Poland and Vietnam.
In China, though, Apple’s market share
has been declining, and the company is
clinging to the No. 5 spot in smartphone
shipments, according to the market
research firm Counterpoint. An Apple
spokeswoman declined to comment.
China became the world’s largest smart-
phone market over the past decade as rising
incomes coincided with an explosion in
mobile technology.
People in China rely on handsets in an
all-encompassing way, using them to rent
bikes, sign into gyms and pay restaurant
bills. The market is increasingly saturated,
and there are fewer people in China who
do not have an advanced device. But there
are also new economic reasons to buy local-
ly made goods: Consumers who are replac-
ing or looking to upgrade are dialing back in
light of China’s slowdown.
Today, mainland China’s top smart-
phone seller is Huawei, whose handset line
includes midrange devices and higher-end
models with all the latest features. Vivo and
Oppo, brands owned by the same Chinese
parent company, are next. And then comes
Xiaomi, whose phones, smart home devices
and even sneakers command a passionate
fan base. Samsung of South Korea, which
sells more smartphones globally than any
other brand, has only around 1 percent of the
market in China. Feng Yin, a 32-year-old
engineer, has an iPhone now, but he is con-
sidering switching to a Huawei device.
“In the past few years, the technology in
Apple’s phones has not had any big break-
throughs, while the technology in domestic
phones has gotten better and better,” he
said while browsing in a Huawei store in
Shanghai on Friday. “The difference is get-
ting smaller.”
Apple products have long been seen in
China as conferring on their owners the ulti-
mate in cachet and cool. But Chinese com-
panies have used slick marketing and
celebrity endorsements in hopes of giving
their products more personality, while pro-
moting advances in camera technology, bat-
tery life and microchips.
On Friday, Xian Longfei, a restaurant
chef, and a friend were at an Oppo store in
Shanghai. When it comes to cellphone
brands, Mr. Xian, 35, has tried many: Nokia,
Motorola, Samsung and three different
iPhone models. He switched to an Oppo a
few months ago. He acknowledges that
Apple’s devices still seem better on the
whole. But so many of his friends in
Shanghai and people in his hometown are
Oppo users. And the price — around $400
on sale — was hard to beat.Also, he said,
holding up his pink handset, “the form fac-
tor is pretty.” Another factor working against
Apple in China is the dominance of WeChat,
a messaging, social media and payments
app used by more than a billion people. It
works on Google’s Android operating sys-
tem as well as Apple’s, making a phone’s
software less of a differentiating factor. “Why
would people pay such a high price for an
iPhone,” asked Kiranjeet Kaur, an analyst for
the industry research firm IDC, “if, from a
hardware perspective, there isn’t much of an
upgrade from Huawei and, from a platform
perspective, there’s nothing to lock people
in?” In Europe, buyers of Chinese brands
describe undergoing a sort of conversion.
Irritating flaws in their iPhone or Samsung
devices lead them to seek alternatives.
Presented with unfamiliar Chinese prod-
ucts, they initially have doubts. But after a
while, they get hooked.
When Alessandro Del Mastro, 33, bought
a Huawei handset in southern Italy three
years ago, he was skeptical.
“My friends teased me that it was not
going to last, like most Chinese products, but
we were all wrong,” he said.
Faruk Kaya uses an Apple iPhone and
tablet but, as a salesman at a Berlin elec-
tronics store, he encounters German cus-
tomers who prefer Chinese brands.
“Now you can get a smartphone with
the best photo and audio quality for about
half the price of an iPhone or a Samsung,” he
said. Gregory Lauseiro, a telecom executive
in Paris, bought his eighth Huawei phone
last summer. He has turned his 56-year-old
aunt, Christine Jankowski, into a believer,
too. “I wasn’t really worried about the fact
that it was a Chinese brand,” Ms. Jankowski
said of her Huawei phone. She added: “We
know that they make amazing technologi-
cal products.“If I had to buy a Chinese frying
pan, I don’t know,” she said. “But a phone?”
.
MUMBAI | 6 JANUARY 2019 ECONOMY & PUBLIC AFFAIRS 5 <

Controversial tax Focus on recovery from

defaulters: NSEL brokers
Can’t return for safety
concerns: Nirav Modi
notice withdrawn
PRESS TRUST OF INDIA Prevention of Money Laund-
Mumbai, 5 January ering Act (PMLA).
RAJESH BHAYANI Uttam Bagri, chairman, In the NSEL default case Modi feared for his safety
Mumbai, 5 January BSE Brokers' Forum said, (affecting 13,000 investors, Fugitive diamond merchant given the violent threats made
"Brokers (non-defaulters) nev- with a default amount ~5600 Nirav Modi, a prime accused against him “as illustrated by
INDIVJAL DHASMANA The BSE Brokers' Forum and er got the crime proceeds, nor crore), stocks missing from the in the PNB fraud case, told a the burning of his effigies”, the
New Delhi, 5 January The circular had Association of National have they worked in collusion warehouses and controlled by court here on Saturday that reply said. Statements made
prompted the Exchanges members have with defaulter(s) or NSEL. the exchange form the core of he could not return to India by politicians from all parties
Congress to demand

T
he Central Board of Direct
Taxes (CBDT) has with-
drawn a controversial cir-
cular just four days after issu-
ing it. The circular had
prompted the Congress to
demand immediate relief for its
leaders, including party presi-
dent Rahul Gandhi and UPA
chairperson Sonia Gandhi in
the National Herald case.
Earlier, the government had
moved to tax shares received by
companies below the fair mar-
ket value under Section
56(2)(viia) of the Income Tax
Act. Under the section, returns
filed by Sonia, Rahul and Oscar
Fernandes for the financial year
2010-2011 were sought to be
reopened by the I-T department
and they were sought to be
taxed. A debt of ~90 crore of
Associated Journals Limited
(AJL), the company which runs
National Herald, was bought by
Young Indian, a firm which has
three shareholders, Sonia,
Rahul and Fernandes.
This debt was converted into
equity and the Congress
Sonia Gandhi
claimed it was not a taxable
income. The CBDT, on Dece-
mber 31, came out with the cir-
cular that Section 56 (2) (viia)
would not apply for receipt of
fresh shares. It basically clari-
fied that only transfer of shares
would be subject to tax.
This gave boost to the
Congress demand for relief to
their leaders in the National
Herald case.
Amit Maheshwari, partner
Ashok Maheshwary & Assoc-
iates LLP, said according to the
circular, the section will not be
applicable in cases of receipt of
fresh shares by a company or a
firm. The CBDT withdrew that
circular on Friday night. It now
said that the term receipt used
immediate relief for
its leaders, including
party president
Rahul Gandhi and UPA
chairperson
Sonia Gandhi in the
National Herald case
in the section is pending before
judicial forums and stakehold-
ers have sought clarifications
on similar provisions in the sec-
tion. Accordingly, CBDT stated,
“The matter is required to be
examined afresh so that a com-
prehensive circular on the mat-
ter can be issued.”
Maheshwari said the clarifi-
cation given by the circular
(now withdrawn) signified the
government’s intent to only tax
transfers rather than fresh
issuance of shares for the pur-
poses of Section 56(2)(viia).
“The circular would have
been binding on the tax depart-
ment and hence would have
resolved pending litigation
under this clause,” he added.
asked all brokers registered on
the National Spot Exchange
Limited (NSEL), prior to its
default in 2013, to deposit ~5
lakh to a common account to
fight their legal battle for jus-
tice.
In their defence, the bro-
kers, who have attracted the
ire of almost all security agen-
cies, have stressed that they
have not received any pro-
ceeds of the crime, and efforts
should be made to recover
money from the actual NSEL
defaulters. Moreover, the
money trail of the defaulters
has been established.
Off late agencies such as
the Securities and Exchange
Board of India (Sebi), eco-
nomic offences wing (EOW) of
the Mumbai police, and
Serious Fraud Investigation
Office (SFIO) were reportedly
behind NSEL's brokers, who
were not involved in the
default. Even the Mumbai
High Court had asked
Mumbai police to consider
attaching their properties.
NSEL has been held as a finan- the controversy. because of safety concerns, showed they had “prejudged
cial establishment under Bagri said, "Efforts need to and also because his case had the issue of his guilt” and his
MPID Act, and hence brokers' be on recovery of money from been politicised. case was being used for polit-
assets cannot be attached." the defaulters. The attached Modi's lawyer filed his ical purposes, it added.
Sebi had issued showcause assets (of defaulters) need to reply to the Enforcement While he left the country
notices to 300 brokers, filing be sold as soon as possible, Directorate’s (ED’s) plea seek- long before a case was regis-
police complaints against and the proceeds need to be ing to declare the diamond tered against him, the ED
them, and the Mumbai High distributed among investors." merchant a fugitive under the tried to “falsely implicate”
Court had asked the EOW to While hearing the petition Fugitive Economic Offenders him for offences “backed by
consider attaching of 63 Moons, pro- Act (FEOA) before the special shallow claims", Modi’s reply
properties of all 632 Sebi had issued moter of NSEL, court for cases filed under the read.
NSEL brokers, incl- showcause Mumbai HC had
uding those regis- notices to 300 questioned why
tered with Sebi. The brokers, filing brokers’ assets were
high court had police complaints not being attached.
specifically men- against them, Brokers had
Jharkhand govt denies
tioned in its order, and the Mumbai
“the State
pitched that they
of HC had asked the were not party to starvation death claims
Maharashtra has EOW to consider the petition, and,
other options to attaching hence, they were Jharkhand reported around 18 with the state investigations and
attach the proper- properties of all moving court. The cases of alleged starvation questioned the findings on
ties of the bro- 632 NSEL brokers hearing was on deaths between December 2016 grounds that all evidences
kers/defaulters, February 8. and November 2018. However, weren’t considered before
who fall in the first part of NSEL, on the other hand, subsequent investigations done arriving at the conclusion. Rece-
Section 4 (of MPID Act), which has moved court, asking the by the state government didn’t ntly, the state sent a report to the
says when properties of a EOW to file final charge sheets find any evidence of starvation Centre on the deaths, looking at
financial establishment are in the case as early as possi- and showed that most deaths various aspects of each of the
insufficient, properties of its ble. Its case will be heard on occurred because of medical incidents. However, the civil
prompter, director, partner or January 7. Eow had filed conditions, including age. This society activists said the report is
manager or members can be charge sheets against 63 enti- probe has infuriated civil society riddled with inconsistencies.
attached.” ties last week. activists. The activists disagreed SANJEEB MUKHERJEE

Draft IT rules won’t make social media safe: Stakeholders
PRESS TRUST OF INDIA
New Delhi, 5 January
Internet activists, law firms and
public advocacy groups on
Saturday said the proposed
changes to IT laws would lead to
censorship and not achieve the
government’s goal of removing
objectionable content from the
web.
Putting forth their views at
a consultation meeting called
by the Ministry of Electronics
and IT, various stakeholders
said the new rules would also
put undue regulatory burden
both on the internet firms and
users.
“...the plan to push social
media platforms to proactively
monitor and moderate content
will be a violation of privacy and
will lead to censorship of free
speech by the platforms. This is
unnecessary and dispropor-
tionate,” Medianama Founder
Nikhil Pahwa said.
However, government offi-
cials denied having any inten-
tion to impose censorship
through the proposed amend-
ments and invited suggestions
to meet the goal of removing
objectionable content from the
internet and trace miscreants.
“This is not an effort to curb
freedom of speech or censor-
ship. If you ... have a society
where social media is liable to be
misused by terrorists and bad
elements, some amount of com-
promise to the extent of being
able to trace the source of such
messages, that is the effort in
these guidelines,” Ministry of
Electronics and IT, Joint
Secretary, Gopalakrishnan S
said.
On December 24, the IT
Ministry released draft amend-
ments under which social
media and online platforms
would need to trace originators
of information when required
by government agencies.
The amendments, which
come ahead of the general polls
this year, also said the platforms
would have to ask users to
refrain from hosting, uploading
or sharing any content that is
blasphemous, obscene, defam-
atory, “hateful or racially, eth-
nically objectionable”.
Stakeholders pointed out
lacunae in the interpretation of
“unlawful content” in the draft
Information Technology
(Intermediary Guidelines)
Rules, 2018.
They also said the govern-
ment’s proposal to include auto-
mated solutions may create a
ruckus as technology is not
highly developed to handle
complications. One of the par-
ticipants said the proposed law
will also apply to internet serv-
ice providers (ISPs), that may
lead to blocking of websites on
the discretion of such firms.
Another participant said the
proposed rules applicable to
platforms with "more than fifty
lakh users in India" cannot be
made part of intermediary
guidelines as it will interfere
with other applicable laws of the
land and the IT Act does not
have scope to introduce such
provisions.
Gopalakrishnan asked all the
stakeholders to provide their
suggestions by January 15.
LADAM AFFORDABLE HOUSING LIMITED
RegdOffice :Ladam House, C-33, Opp. ITI, Wagle Industrial Estate, Thane (W) – 400 604.
Tel No. 022 71191000 Email ID: compliances@ladam.in
Website: www.ladamaffordablehousing.com
CIN NO.: L65990MH1979PLC021923
POSTAL BALLOT NOTICE
Members of the Company are hereby informed that the Company has, on 5th January, 2019 completed the
dispatch of Noce of Postal Ballot pursuant to the applicable provisions of Companies Act, 2013 and the rules made
thereunder along with the Postal Ballot Form and self-addressed postage pre-paid envelope to the Members
whose e-mail IDs are not registered and sent e-mail to the Members whose e-mail IDs are registered as on 28th
December, 2018 seeking approval by postal ballot including e-vong by electronic means.
Mr. Prak Kalsariya & Co., Praccing Company Secretary has been appointed as the scrunizer to scrunize the e-
vong process and physical postal ballot in a fair and transparent manner.
The vong period begins from Saturday, 5th January, 2019 (09:00 a.m) and ends on Sunday, 3rd February, 2019
(5:00 p.m), the e-vong module shall be disabled by CDSL thereaer. Once the vote on a resoluon is cast by the
members, the members shall not be allowed to change it subsequently. Any postal ballot form received by post
from the members aer 3rd February, 2019 will be strictly treated as if no reply from such member(s) has been
received.
In case you have any queries or issues regarding e-vong, you may refer the Frequently Asked Quesons (“FAQs”)
and e-vong manual available at www.evongindia.com, under help secon or write an email to
helpdesk.evong@cdslindia.com or write e-mail to Ms. Mohini Budhwani, Company Secretary at
compliances@ladam.in.
Members who have not received the Form and are desirous of seeking a duplicate Form can send email to
support@purvashare.com
Any grievance pertaining to the Postal Ballot process including vong by e-vong can contact Ms. Mohini
Budhwani, Company Secretary at Ladam House, C-33, ITI, Wagle Industrial Estate, Thane West- 400604, Contact
number- 022-71191000, Email ID: compliances@ladam.in
The results of the vong of postal Ballots and e-vong will be declared by the Chairman or any other Director of the
Company on or before 6:00 p.m. on 6th February, 2019 at the registered office of the Company.
The result will also be inmated to the Stock Exchange and updated on the Company’s website
hp://www.ladamaffordablehousing.com
By Order of the Board
For Ladam Affordable Housing Ltd
Sd/-
Place: Thane Mohini Budhwani
Date: 6th January, 2019 Company Secretary
6 ECONOMY
>
MUMBAI | 6 JANUARY 2019 1

PEOPLE IN THE NEWS BINAY SINHA

GST IN A NEW AVATAR

How GST could pan out after LS polls

INDIVJAL DHASMANA returns the government has put in rules and the rate for this purpose.
New Delhi, 5 January the public domain proposes that big But experts say the limit could be
businesses file one return monthly fixed at ~50 lakh to ~1 crore.

Amid competition from lower-priced Chinese
products, the India arm of Koh Dong Jin-led
Korean smartphone maker Samsung saw its
net profit falling 11%, even as revenues grew
10% to cross ~60,000 crore in FY18
Reliance Jio, part of Mukesh
Ambani-controlled RIL, added 10.5 million
users in October, wresting market share from
Sunil Mittal-led Bharti Airtel and Balesh
Sharma-led Vodafone Idea, which lost 1.8
million and 7.3 million users, respectively
W
hether it is a
Bharatiya Janata
Party (BJP)-led gov-
ernment or a There will also be three kinds of
Congress one at the
Centre after the 2019 general elections,
one thing is sure: The goods and serv-
ices tax (GST) will see quite a number
of changes. While the Congress has
promised an overhaul of the tax, the
BJP itself is talking about single stan-
dard rate now. Let us examine the five
possible changes that the GST may
undergo after the Lok Sabha polls:
Changes in rates
It is certain now that the peak rate of
the GST, at 28 per cent, would have
only sin products such as cigarettes
and tobacco, and luxury goods such
as air conditioners and dish washers.
After cutting rates on 23 items,
finance minister and GST Council
chairman Arun Jaitley said, eventu-
ally the 12 per cent and 18 per cent
rates would be merged to form a sin-
gle standard rate. However, he want-
ed a significant increase in tax col-
lections before such a step could be
taken.
A future road map could be to
work towards a single standard rate
instead of two standard rates of 12 per
cent and 18 per cent, he said.
"It could be a rate at some mid-
point between the two. Obviously,
this will take some reasonable time
when the tax will rise significantly.
The country should eventually have a
GST which will have only slabs of
zero, 5 per cent and standard rate with
luxury and sin goods as an excep-
tion," Jaitley said.
It is anybody's guess what this 'rea-
sonable time' is, as GST collections
have not keeping pace with the target.
While the target was roughly
~1 trillion a month, only April and
October have yielded this figure for
the first eight months of 2018-19.
What the single standard rate
would be is also anybody's guess,
though the mid-point between 12 and
18 per cent is 15 per cent.
In fact, this was the revenue neu-
and one annual return. That makes it
13 returns a year, down from 25 cur- Threshold limit of exemption
rently for big businesses. The next Council meeting is likely to
increase the exemption limit for medi-
quarterly returns. One for manufac- um and small enterprises to ~75 lakh
turers or service providers and two annual turnover from the current ~20
others for traders. lakh. Those with annual turnovers less
Those traders with only business than or equal to this threshold are not
to consumer (B2C) supplies will file required to register under GST.
Sahaj and those with both B2C and However, this is unlikely to impact
business to business (B2B) supplies the number of GST registrants or the
will submit the Sugam form. exchequer significantly. About 10.2
However, assessees will have to con- million assessees are registered under
tinuously upload invoices and keep GST as of now. Almost 25 per cent of
track of matching purchase receipts those registered with GSTN have a
THE PRESENT GST RATE STRUCTURE with those of sales, to claim input tax
credit. This, many say, will be burden-
turnover in the range of ~20 lakh to
~1 crore. GST paid by them makes up
Rate Number Category some for taxpayers because currently only five per cent of the overall col-
of items they self-certify the credit claims. lection.
This is so because only taxes paid
0% 183 Mostly agricultural produce on invoices uploaded till the 10th of Compensation cess for another
5% 308 Branded cereals, various kinds of edible oils, pizza bread, the next month by suppliers will be three years
snacks, insulin, footwears of up to ~1,000, parts of wheelchairs available for input tax credit for buy- Though the devolution formula is
Butter and other fats, pasta, branded snacks, diabetic foods, ers. Though the facility of quarterly still being worked out by the Finance
12% 178 drinking water packed in 200 litre bottles, feeding bottles, surgical returns will be available, taxes have to Commission, it is likely that GST com-
rubber gloves, carpets, mobile phones, bicycles be paid monthly. Every business will pensation cess may be extended by
have to pay taxes monthly by the 20th three more years. The devolution for-
18% 517 Vinegar, marbles, paints, varnishes, fibre board, plywood of the following month. mula may be affected by the Centre's
Cement, auto parts, air conditioners, dish washers, These are just draft forms, and the decision to extend the compensation
28% 28 tobacco, cigarettes, aerated drinks final version will be put in the public cess beyond 2022. While the finance
domain by April this year. commission's recommendations will
tral rate (RNR) that was arrived at a expected to be rolled out on July 1 this be implemented for the period
committee headed by former chief year. Originally, it was to be rolled out Composition scheme for services between 2020-21 and 2024-25, the
economic advisor Arvind in December 2018 or in January 2019. Under the Composition scheme, compensation cess would cease to
Subramanian. It had suggested that Anyway, after much hue and cry, the which has been introduced in GST to exist by 2022. The commission is in
the RNR be fixed in the 15-15.5 per GST Council had allowed small and woo small businesses, taxpayers pay a talks with the states as to how their
cent rangem though a 15 per cent rate medium taxpayers to file sale quar- flat rate at lower level, but aren't enti- deficits would be met after 2022.
would be preferable. terly returns instead of monthly. The tled to get input tax credit. The ceiling However, the need of the cess is com-
However, the Committee had sug- annual turnover cap for this category for availing this scheme currently is ing down a bit. Cess to the tune of
gested a standard rate of 17-18 per cent was fixed at ~1 crore earlier, but now it ~1.5 crore. ~48,000 crore was distributed to the
and a lower rate of 12 per cent. It had has been increased to ~10 crore. Also, Manufacturers, dealers and states in the first eight months of 2017-
also recommended a 40 per cent sin form GSTR2 (purchase returns) and restaurant owners can avail this 18, but now only ~30,000 crore has
or demerit rate. input-output returns (GSTR 3) had scheme. While manufacturers and been distributed. This was due to
"While fixing the standard rate, been suspended. dealers are required to pay one per improved collections from GST, Jaitley
the GST Council may have to balance However, taxpayers have to file cent tax, restaurant service providers had said earlier. The GST collections
the GST revenue collection targets GSTR1 (supply returns) and GSTR 3B pay five per cent. Now, there are have improved in most states, includ-
and, at the same time, ensure that it (summary input-output returns). So, demands that small service providers ing consuming states of the northeast
does not entail too much of a burden big businesses are filing two returns in also be brought under the scheme. and manufacturing states of
on the industry and consumers spe- a month and one annual return, or 25 The issue is that when these service Maharashtra and West Bengal. Also,
cially for the goods which are cur- returns a year. Small businesses file one providers raise bills, their buyers are the average GST collections stood at
rently in the 12 per cent basket," said return — summary input-output return reluctant to pay GST. As such, these ~89,000 crore last year and ~96,000
Abhishek Jain, tax partner at EY. — a month and one supply return in a providers are unwilling to join the crore this year so far. This was despite
quarter, apart from the annual return. new tax system. The next Council the fact that the collections have
Return simplification So they file 17 returns in a year. meeting will discuss this issue this missed the target of ~1 trillion a month
This process is underway and is In its place, the draft of simple month and will come out with the till December.

HEALTH
>
1

FIT & PROPER

Your weekly health guide

Tech and workplace stress

Dementia may never improve but Are sugar
alternatives
instantaneous. This is
because with every notifica-
there are new ways to tackle it ISTOCK
healthy?
tion, dopamine is released in PAULA SPAN improve upon.
the body. Dopamine is the 5 January In weekly sessions over several LINDA CARROL
feel good hormone. It is the months, the therapists devise individ- 5 January

PRAKRITI PODDAR
Managing Trustee of Poddar
Foundation and Director of Poddar
Wellness, Mumbai
This is the age of Netflix,
YouTube, Facebook and a
host of other social media
platforms for shopping, net-
working or entertainment.
And, facilitating this viewer-
ship is a host of gadgets,
which for many are not luxu-
ries but necessities. These
gadgets have rapidly entered
the category of addictions
due to the dependency of
modern day workplaces on
technology. This has led to
a situation where office
workers are spending six
hours a day in front of a
screen. Apparently, Indians
spend three hours a day on
smart phones.
Modern-day offices employ
technology for work which
adds to stress and our work-
place is also the space where
an individual is under high
emotional stress.
So, what makes technolo-
gy addictive? Addiction is a
biopsychosocial disorder,
which means it is a combi-
nation of genetics and neu-
robiology that react with
psychological and social fac-
tors. To understand it in sim-
pler terms, consider what
happens when a person pub-
lishes a thought on
Facebook. Say the responses
to the thought are ten likes
and five agreeable com-
ments. With every notifica-
tion, the person finds a rea-
son to smile as he or she feels
accepted and acknowledged.
This joy is even more when a
person posts a photograph
that receives such validation.
With every notification,
there is an increasing feeling
of happiness, acknowledge-
ment and satisfaction. Also,
all of these events are almost
same chemical which is
released when one smokes,
drinks or takes drugs.
The instantaneous satis-
faction which one achieves
through the use of modern day
technology — the need for
success through validation or
the fear of failure which keeps
one attached to the screens —
all of this is contributing to an
interaction of genetics and
neurobiology in an intensely
competitive and professional
psychological environment.
With machines replacing
humans as social points of
interaction, there is instant
impatience or anxiety if the
computer is running slow.
Dismissing technology is
not the answer to these chal-
lenges. However, at Poddar
Wellness, we share many
measures that can be imple-
mented at an individual and
an organisational level to
reduce our dependence on
technology. They are:
Have dedicated time to
answer emails and complete
correspondences.
Don't miss breaks. Instead,
take smaller but more num-
ber of breaks. These breaks do
not mean checking your
mobile phones, but drifting
away from all screens technol-
ogy. Implement a "no phone"
rule while having meals.
Increase physical activity
as it reduces stress hormones.
Avoid playing games online
and get yourself enrolled in
some indoor or outdoor sports.
Use offline media to com-
municate with people. Walk to
your colleague's desk rather
than calling or messaging.
Get enough rest and sleep.
Follow sleep hygiene. Take out
some time for meditation.
Have a tech-free day once
a week and limit social
media activity.
Keep yourself hydrated
and on a light healthy diet.
Last but not the least, focus
on interacting with humans
and nature.
H
e was a retired factory worker, ual strategies that can help, at least in
living with his wife outside a the early and moderate stages of the dis- A review of research on artifi-
small town in Wales, in the ease. The therapists show patients how to cial and natural sweeteners
United Kingdom. Once outgoing and compensate for memory problems and commonly used as alterna-
sociable, engaged in local activities to practice new techniques. tives to sugar failed to find
including a community choir, he'd been But she and other European strong evidence they provide
jolted by a diagnosis of early dementia. researchers have demonstrated that significant health benefits,
A few months later, at 70, he would- people with dementia can significantly but also found no harm from
n't leave the house alone, fearful that if he improve their ability to do the tasks using them.
needed help, he couldn't manage to use they've opted to tackle, their chosen pri- The analysis, published in
a cellphone to call his wife. He avoided orities. Those improvements persist over The BMJ, was commissioned
household chores he'd previously under- months, perhaps up to a year, even as by the World Health
taken, such as doing laundry. When his participants' cognition declines in other Organization with the aim of
frustrated wife tried to show him how to ways. In the United States, Gitlin's TAP able to go out alone, but "he was terri- developing guidelines on the
use the washer, he couldn't remember "They want to be enabled to manage programme includes more patients fied of the mobile phone, thinking he'd use of non-sugar sweeteners
her instructions. their lives," said Clare. "It gives hope that with serious cognitive loss than cogni- do something wrong and break it," such as aspartame and stevia.
"He'd lost a lot of confidence," said they can handle everyday challenges." tive rehab does. TAP aims to reduce the Clare said. His wife had bought a sim- “Unfortunately, we don’t
Linda Clare, a clinical psychologist at the This approach may represent the troubling behaviours that can accom- plified phone, but he couldn't remem- have sufficient data to assess
University of Exeter. "He was actually future for the growing number of older pany dementia: repeated questions, ber how to use it. fully the potential benefits
capable, but he was frightened of making adults around the world with dementia. wandering, rejecting assistance, verbal "The therapist taught him each step and harms of non-sugar
a mistake, getting it wrong." Trials of drugs to prevent or treat demen- or physical aggression. A pilot study in sequence," Clare said. Once he felt sweeteners,” said senior
Clare directed a recent trial of cogni- tia have failed over and over. Even if found that with TAP, the frequency of confident about being able to call his researcher Joerg Meerpohl,
tive rehabilitation in England and Wales some future treatment demonstrated such behaviours decreased compared wife if he needed her, he had to director of the Institute for
in which the patient was enrolled. effectiveness, millions of people and to a control group, allowing family remember to take his phone when he Evidence in Medicine at the
Cognitive rehabilitation, which Clare has their stressed family caregivers need members to spend fewer daily hours ventured out. He and his therapist University of Freiburg in
been researching for 20 years, evolved help now. caring for patients. developed a mnemonic, the letters Germany.
from methods used to help people with Laura Gitlin, dean of the College of "Let's think of these as treatments, BMW, to remind him he needed his Meerpohl and colleagues
brain injuries. Nursing and Health Professions at Drexel with the same level of evidence as if bus pass, mobile phone and wallet. gathered research that
The practice brings occupational and University has developed something you went to a doctor and got a pill, but Over several months, the man explored the impact of artifi-
other therapists into the homes of called the Tailored Activity Program with no adverse effects," Gitlin said. regained some independence, Clare cial sweeteners on important
dementia patients to learn which every- (TAP), somewhat similar to cognitive "This is what's effective." said. He told his therapist, "My fear health outcomes like weight
day activities they're struggling with and rehab, which also brings occupational The retired factory worker in Wales, has gone." and blood sugar levels. They
which abilities they want to preserve or therapists into people's homes. for instance, decided he wanted to be © 2019 The New York Times News Service eventually settled on 56 stud-
ies, 35 of which were not clin-
ical trials.
Some of the small studies
Fixing age-related deafness may fight depression suggested non-sugar sweeten-
ers might slightly improve body
mass index (BMI, a measure of
weight relative to height) and
PRESS TRUST OF INDIA Justin S Golub, assistant pro- raise the risk of health data from 5,239 indi- depressive symptoms. blood sugar. And a study of
Washington, 5 January fessor at Columbia University other conditions, such as cog- viduals over age 50 The study does not prove overweight and obese individ-
in the US. nitive impairment and who were enrolled in the that hearing loss causes uals who were not trying to lose
Treating age-related hearing "Hearing loss is easy to dementia. Hispanic Community Health depressive symptoms. weight found that the artificial
loss, which is often under- diagnose and treat, and treat- However, there are few Study/Study of Latinos. "But it's understandable sweeteners were associated
treated among all elderly, can ment may be large studies ask- Each participant had an how hearing loss could con- with a loss of nearly 4.5 lbs.
help stave off late-life depres- even more impor- The research ing whether hear- audiometric hearing test — tribute to depressive symp- But artificial sweeteners
sion, scientists say. tant if it can help found that ing loss may lead an objective way to assess toms. People with hearing did not seem to help over-
The study, published in ease or prevent individuals with to depression in hearing loss — and was loss have trouble communi- weight and obese adults and
the journal JAMA depression," said mild hearing loss the elderly — par- screened for depression. cating and tend to children who actually were
Otolaryngology-Head & Neck Golub, lead were almost ticularly in They found that individ- become more socially isolat- trying to lose weight.
Surgery, found that with author of the twice as likely Hispanics, a uals with mild hearing loss ed, and social isolation What’s important when
age-related hearing loss study. to have clinically group in which were almost twice as likely to can lead to depression," you’re trying to lose weight,
had more symptoms of Age-related significant depression may have clinically significant said Golub. Michele Pfarr said, “is a focus
depression. hearing loss is the symptoms of be underdiag- symptoms of depression Although the study on overall calorie intake and
"Most people over age 70 third-most com- depression nosed because than those with normal focused on Hispanics, the eating nutrient-rich foods like
have at least mild hearing mon chronic con- of language hearing. results could be applied to fruits and vegetables, along
loss, yet relatively few are dition in older and cultural Individuals with severe anyone with age-related with low-fat dairy, whole
diagnosed, much less treat- adults. barriers. hearing loss had over four hearing loss, according to the grains and lean meat.”
ed, for this condition," said The condition is known to The researchers analysed times the odds of having researchers. REUTERS
.
MUMBAI | 6 JANUARY 2019 IN DEPTH 7 <

Gram sabha consent

a must to acquire land
> The Forest Rights Act, 2006, gives gram
sabhas the right to protect their forest and
power to regulate access to community
forest resources
> A 2009 circular issued by the environment
ministry makes it mandatory to seek consent
of gram sabhas for use of forest land for non-
forest purposes
> The 2013 judgement of the Supreme Court in
Vedanta’s Niyamgiri mining case said gram
sabhas have the authority to decide on
forest-land diversion
> The Ministry of Tribal Affairs has been issuing
circulars to reinforce the requirement of gram
sabhas’ consent for acquisition of tribal and
forest land.

place.” Kodiveri is researching the implementa-

tion of the consent provision.
It is also one of the most commonly violated
provisions of the law, showed the official records
and testimonies of communities.

Villages get left out of decision making

In 2009, the environment ministry issued a cir-
cular stating that project developers need to
submit consent letters from the village assem-
blies (with a quorum of at least 50 per cent of all
adult members present) to divert their forest-
land. Their certificates need to show that the
process of recognition of rights under the FRA is
complete. This requirement was ignored in the
case of Alnar, we found.
Consider this letter from Kumar uploaded
on the MoEF website: “Each of the concerned
Gram Panchayat(s) has certified that all formal-
ities/processes under the FRA have been car-
ried out and that they have given their consent
to the proposed diversion (of forestland) and the
compensation.”

Tribals and forest dwellers’ fight

To support the claim, the collector annexed
a resolution passed by 10 members of the
Ghumiyapal panchayat on September 23, 2016,
in which they resolved that “no forest rights title
has been prepared in the name of any farmer in
the Ghumiyapal Panchayat and its dependent

to protect their land rights

villages — Alnar, Tongpal and Badepalli —
because the village residents have said ‘no’ to the
title”. The resolution did not specify why the vil-
lagers did not want titles.
The law requires the village assembly and
not the panchayat to decide on matters of for-
est rights. The tribal ministry has reiterated
The forest land is allegedly being acquired in multiple pockets without seeking their consent this legal requirement in the past. While every
adult member of a hamlet forms a village
assembly, panchayats generally consist of
MANIRA CHAUDHARY dated September 26, 2016, certified that the tra- people and are spread over 1,734 sq km. traditional rights over this forestland were not elected representatives of more than one vil-
ditional rights of the tribals and forest dwellers on Of the 38 cases, forest clearance documents recognised in the past and they were seen as lage. Asking panchayats to decide on forest

I
n early 2017, Mangal Kunjam, a 25-year-old
journalist, heard a commotion outside his
house in Ghumiyapal village in the southern
corner of the heavily forested state of
Chhattisgarh. His neighbours had gathered
together and were anxiously discussing a car that
had just passed their neighbourhood.
“This is a tribal area and people here keep to
their water, forest and land,” said Kunjam. “When
they saw a car with a group of outsiders, they were
curious and worried at the same time.”
Kunjam and a few other villagers followed the
car headed towards a local hill. There, they met a
few people who said they were there to conduct a
survey on how many and what kind of trees could
be felled to mine iron ore in the area. The forest-
land, which falls in Alnar village in Bastar dis-
trict, was being “diverted” for mining by Raipur-
based Aarti Sponge and Power Ltd, the villagers
were told.
The website of the union ministry of envi-
ronment, forests and climate change
(MoEFCC) showed that the Chhattisgarh gov-
ernment had sent the company’s proposal to
mine 31.55 ha of forestland to the ministry in
August 2016. Under existing laws, non-forestry
activity cannot be started in an area like this
without the ministry’s permission.
One of the proposal papers signed by Saurabh
Kumar, the district collector of south Bastar and
the land had been “settled”. Villagers through
their gram (village) panchayat had consented to
the mining proposal, the document stated.
This document is crucial. Without the consent
of tribals and forest dwellers and without recog-
nising their traditional rights, forestland cannot be
diverted to non-forest use as per the Forest Rights
Act (FRA), 2006. But the real picture is different, we
found in our investigations.
The tribals and forest dwellers of Alnar were
never consulted on this acquisition proposal nor
was their consent sought for the mining project,
said Kunjam. Documents accessed by IndiaSpend
show that the panchayat had passed a resolution
against the mining proposal in May 2017. But
based on the letter issued by Kumar, the regional
MoEFCC office has already approved the project,
the documents showed.
Alnar is not the only Indian village where the
legal requirement of consent of tribals and other
forest-dwelling communities is being violated to
make way for big projects. Land Conflict Watch or
LCW, a network of researchers tracking land con-
flicts across the country, has so far documented 38
cases where tribals and forest dwellers are protest-
ing the diversion of forestland.
These cases are spread across Chhattisgarh,
Odisha, Maharashtra, Andhra Pradesh, Himachal
Pradesh, Telangana, Uttar Pradesh and Karnataka.
Together, these conflicts affect close to 1 million
for 23 projects are uploaded on the MoEFCC
website. When LCW reviewed these applica-
tions, it found that in 13
of those cases, the con-
sent was not men-
tioned in the docu-
AN ments. In 10 cases,
indiaspend.org local authorities
claimed that there
STORY were no tribals in the
project-affected area
Alnar is not the only or issued certificates
Indian village that their forest rights
where the legal had been settled and
requirement of that they did not
consent of tribals oppose the projects.
and other forest-
dwelling Consent, one of the
communities is most commonly
being violated violated conditions
to make way for for takeover
big projects A little less than a quar-
ter of India’s land is cov-
ered by forests.
Industries and governments can use forest land to
set up development projects through a process
defined in the Forest Conservation Act of 1980.
But these forests are also home to millions of
tribals and forest dwellers who have depended
on them for centuries for their livelihood. Their
encroachers. This means that project developers
could simply kick them out of their homes
because they had no document that established
their land rights.
As many as 40.9 per cent of all 21.3 million
people displaced in India between 1951 and
1990 by development activities were tribals
and forest dwellers, according to a 2014 report
of the ministry of tribal affairs (MoTA). This is
considered the root cause of Maoist insurgency
in forest areas.
To correct this “historical injustice”, the FRA
was passed in 2006. The law mandates that forest
dwellers cannot be evicted from the forests unless
their traditional land rights are recognised and
permission granted by the village assembly or
gram sabha.
This provision, for the first time, handed nego-
tiating power to tribal communities. They could,
if they want, now part with their land on their
own terms or veto projects. The Dongria Kondh
tribe in Odisha’s Niyamgiri Hills used this law to
win the famous legal battle in 2013, in which they
rejected the mining project of multinational baux-
ite giant Vedanta.
“Consent is, by far, the most important provi-
sion [of FRA],” said Arpitha Kodiveri, a research
scholar at the European University Institution.
"If one is to look at not just forest diversion but also
at the nature of development that should take
rights will likely deprive smaller hamlets the
right to participate in decision-making and
leave them vulnerable to manipulation by a
few elected panchayat members.
“From what we got to know, they (the com-
pany) held a meeting with a handful of people
from another panchayat and took their signa-
tures,” Kunjam said. Sunil Bhaskar, secretary of
the Ghumiyapal panchayat, under whose juris-
diction Alnar falls, agreed with Kunjam.
“A man from Raipur came to meet me
sometime in 2013-14. He told me to conduct a
gram sabha (assembly) and to get some papers
signed,” he said. “When I refused, he told me
that they would still get their work done, even
without the signatures.”
Rajiv Mundra, director of Aarti Sponge and
Power Ltd., did not respond to questions on the
alleged violation of the FRA, neither did the envi-
ronment ministry despite repeated attempts by
IndiaSpend.
In an emailed response, Kumar maintained
that he had “verified the recommendations
received from the SDLC (sub-divisional level
committee) constituted under the FRA (to
process the land rights claims forwarded by the
Village Assembly) after due process”.
The government documents show that even
the SDLC’s recommendation to the collector was
based on the flawed panchayat resolution.

IMO
‘We cannot fulfil our ambitions
the country at a macro level. The
earlier brain drain is reversing.
What’s even more worrying is that
many parents cannot afford to send

through our children’ their children abroad but they buckle

ON WOMEN ENTERING SABARIMALA
Priti Gandhi@MrsGandhi
It's painful to watch on television the ignorant
woman excitedly giggling & explaining how she
sneaked into the temple sanctorum. Strongly
condemn the unavowed, hostile entry of two
women inside Sabarimala Temple. It’s a sad, sad
day for us! #SaveSabarimalaTradition
Ranjana Kumari@ranjanakumari
The recent incident of purification of Sabarimala
temple after visit of two women belonging to
menstruating age was nothing less than
demeaning and humiliation of women,
contempt of court order as well as violation of
human rights of women.
Sunanda Vashisht@sunandavashisht
I think PM @narendramodi has finally settled the
forced comparison between Sabarimala and
Triple Talaq. One is about tradition specific to one
temple and other us about gender equality
and justice.
ON RAFALE DEBATE IN LOK SABHA
Amit Shah@AmitShah
A LIE goes only so far and no further. Defence
Minister Smt @nsitharaman ji has completely
demolished Congress party's lies and
misinformation campaign on Rafale with her
excellent speech loaded with facts. I congratulate
her for bringing the truth to the nation.
M K Venu@mkvenu1
If the CAG does not go into all the objections
raised in the file notings on Rafale by top defence
ministry officials it will be nothing short of
dereliction of constitutional duty on the part
of CAG.
MinhazMerchant@MinhazMerchant
Cong showing great reverence for SC on
#RamMandir issue (which CJI Gogoi today put
off for a week), saying piously that’s it’s the last
word but displaying insolence over SC’s verdict
on #Rafale. Redefining the very meaning of
hypocrisy.
Priyanka Chaturvedi@priyankac19
Raksha Mantri don’t you remember ordering the
Defence Secretary to share the prices of Rafale Jets
in your PC because GoI had nothing to hide? Then
went on to hide behind a secrecy clause which
has nothing to do with the prices? Does that
make you a liar or truthful or clueless?
VIRAL DOSHI started counselling, doing
psychometric testing, and working with
young people in the mid-1980s
informally rather than as a career. What
started as a hobby soon became a full-
blown career, as parents increasingly
value a university education and reach
out to him for advice. Every year, he
counsels 200 children heading off to
college. He also counsels children aged
14-16 years and helps them identify
where their passions lie. Doshi lectures at
forums across the country on where
parents are going wrong and how
affluence has its own challenges. Doshi
shared his observations with Anjuli
Bhargava at his Tardeo office in Mumbai:
Edited excerpts:
What changes do you see in parents
today as compared with earlier?
When we grew up, this dekha-dekhior
one upmanship was not there. In
certain circuits today, I feel parents are
more led by what others are doing for
their children than what may be best
for the child. Where your child goes to
college is akin to which watch you wear,
which car you drive, where you
stay…People have become over-
ambitious. A child’s ability is x and they
want it to go to x square for college.
They are looking more at their own
happiness and their standing in society
based on where he or she studies rather
than the child’s own capabilities or
desires. Remember, a child flourishes
best in an environment where he is on
par with his peers, not vastly above or
below in terms of academic and
intellectual prowess.
In today’s competitive environ-
ment, children cannot enjoy their
childhood the way we did. I’m not
blaming anyone here as it is an
increasingly competitive world but the
biggest change is far more aggressive
and far more informed parents — a bit
too ambitious.
A lot of the parents are themselves
from IITs and IIMs and expect their
children to achieve at almost the same
scale as them. Parents need to sit back
and realise that we cannot push our
children so much for our own satisfac-
tion. We cannot fulfil our own ambi-
tions through our children. Rising afflu-
ence makes them think they can buy
anything they want, which is not nec-
essarily true.
Almost everyone I meet tells me their
child lacks ‘hunger’…where has this
hunger or drive gone and what can
bring it back?
Competition to get into the premier
institutes has certainly intensified
many-fold but the hunger too is gone.
In the upper middle class in particular,
things come to children too easily. In
our time, for instance, going abroad
was not something you could take for
granted at all. There wasn’t even the
foreign exchange available. A handful
went overseas and mostly on fully paid
scholarships. Now children take it for
granted that parents will muster
the funds.
Another interesting factor I Head
note is that often parents to
who themselves went Head
through the grind — and
made it to IIT and IIM —
are unwilling to put their A child flourishes to privileged schools and
kids through what they best in an
went through. There is a environment
protectiveness that where he is
seems to have kicked in, on par with
for better or for worse. his peers, not
They don’t want their vastly above or
children to suffer what below them
they may
have suffered.
So in some cases, these parents
send their kids abroad for an
undergraduate and then bring them
back to do an MBA from an IIM or an
ISB. Parents, in fact, are no longer
keen that kids settle abroad. Today,
they are saying that India has
opportunities and you must come
back. In the ‘80s and ‘90s, if 10
students went, maybe one came back.
Now from every 10, at least 5-6 come
back. This is a very positive change for
in to social pressure and somehow put
together the funds. They do this even
to send them to a B and C grade college,
which may not be worth it.
What I’m seeing as more positive is
the rise of the second and third tier
cities — Karnal, Muzaffarnagar,
Kanpur, Raipur. Here, the parents are
less educated, less aware but equally
ambitious and, unlike their parents,
they see the value of a good education.
They may run businesses running into
a few hundred crore but are willing to
expose their child even if they do
eventually return to take on the family
business.
But how does one revive or
create that ‘hunger’?
It’s something we all need to
think about. I think bringing
back hunger in the elite and
their wards seems difficult in
the immediate future. The
helicopter parenting we are
seeing today is doing more of
a disservice. Hunger comes
from limiting choice. Are we
as parents willing to do that?
Are today’s parents more open to new
professions? Have we finally put the
doctor-engineer obsession behind us?
Again, this depends on the profile of
the parents but in the bigger cities,
parents are far more open to new
careers but not so much in second
and third tier cities as yet. Parents
are also allowing their children to
become entrepreneurs and get into
start-ups. This too is a change from
the past. But the herd mentality is
still evident.
8 WORLD
>
MUMBAI | 6 JANUARY 2019 1

Trump threatens govt shutdown, Powell hints Fed open to

emergency powers to build wall
RICHARD COWAN & JEFF MASON
Washington, 5 January
P
resident Donald Trump
threatened to keep the
US government partial-
ly shut for months or years on
Friday after he and Democratic
leaders failed to resolve their
dispute over Trump’s request
for $5.6 billion to build a wall
on the Mexican border.
After Democratic congres-
sional leaders refused Trump’s
requests at a meeting in the
White House Situation Room,
the Republican president threa-
tened to take the controversial
step of declaring a national em-
ergency and building the wall
without congressional approval.
Trump is withholding his
support for a bill that would ful-
ly fund the government until
he secures money for the wall.
As a result, around 800,000
public workers have been un-
paid, with about a quarter of
the federal government closed
for two weeks.
Senate Democratic Leader
Chuck Schumer said Dem-
ocrats had told Trump during
the meeting to end the shut-
down. “He resisted,” Schumer
said. “In fact, he said he’d keep
the government closed for a
very long period of time,
months or even years.”
Trump confirmed that com-
ment but painted a more posi-
tive picture of the meeting, the
first since a new era of divided
government began when Dem-
ocrats took control of the House
of Representatives on Thursday.
“We had a very, very pro-
ductive meeting, and we’ve
come a long way,” Trump said.
According to a source famil-
iar with the White House disc-
ussion, Trump began the mee-
ting with a speech that lasted at
least 15 minutes in which he
insisted on the need for billions
of dollars to fund a border wall.
President Donald Trump confers with Vice President Mike Pence (right) and House Minority
Whip Steve Scalise on Friday
The source also said Trump
brought up recent impeach-
ment threats during those
remarks, arguing that he had
notched a strong performance
as president and should not be
a target for impeachment.
The president later told
reporters that Nancy Pelosi, the
new Democratic speaker of the
House of Representatives, said
Democrats were not looking to
impeach him.
Raising the stakes in his tus-
sle with the newly emboldened
Democrats, Trump threatened
extraordinary measures to
build the wall, which he says is
needed to stem the flow of ille-
gal immigrants and drugs into
the United States.
A reporter asked Trump
whether he had considered
declaring a national emergency
to build the wall.
“Yes, I have. And I can do it
if I want,” Trump said. “We can
call a national emergency
because of the security of our
country ... I may do it. But we
can call a national emergency
and build it very quickly. And
it’s another way of doing it. But
if we can do it through a nego-
tiated process, we’re giving that
a shot.”
Emergency powers have
been invoked by previous US
presidents during times of war.
Senator Jack Reed, the sen-
ior Democrat on the Senate
Armed Services Committee,
criticised the comments, say-
ing in a statement, “Declaring a
trumped up national emer-
gency in order to skirt congres-
sional approval is wrong.” The
US Constitution assigns Con-
REUTERS
gress the power to fund the fed-
eral government, so Trump
likely would face legal chal-
lenges if he tried to bypass
Congress on financing the wall.
Building a wall — and having
Mexico pay for it — was one of
Trump’s main promises when
he ran for president in 2016.
Trump’s wall project is esti-
mated to cost about $23 billion.
Democrats have called the
wall immoral, ineffective and
medieval.
Pelosi said Friday’s meeting
with Trump was “sometimes
contentious” but that they
agreed to continue talking.
“But we recognise on the
Democratic side that we really
cannot resolve this until we
open up government and we
made that very clear to the pres-
ident,” she said. REUTERS
‘China woes
help US in
trade talks’
JEFF MASON & MICHAEL MARTINA
Washington/Beijing, 5 January
President Donald Trump on
Friday downplayed a reve-
nue warning from Apple that
cited slowing sales in China
and said China’s weakening
economic growth puts the
US in a strong position as
negotiators from the two
largest economies prepare
for trade talks next week.
Trump has slapped
import tariffs on hundreds
of billions of dollars of
Chinese goods as he seeks
concessions from Beijing on
issues ranging from indus-
trial subsidies to hacking,
sparking retaliation by
China. The measures have
disrupted trade, hurt manu-
facturing, roiled interna-
tional markets and slowed
the global economy.
US officials are heading
to Beijing next week for the
first face-to-face talks since
Trump and China’s
President Xi Jinping in
December agreed to a 90-
day truce in the trade war as
they sought to strike a deal.
“I think we will make a
deal with China,” Trump told
reporters at the White House
after a meeting with
Democratic and Republican
lawmakers about the US gov-
ernment shutdown.
“I really think they want
to. I think they sort of have
to.” Beijing on Friday cut
bank reserve requirements
for a fifth time this year amid
slowing growth at home and
the punishing US tariffs on
exports. REUTERS
pause, says won’t quit
JEANNA SMIALEK & RICH MILLER
5 January
Federal Reserve Chairman
Jerome Powell signalled the
central bank could pause inter-
est-rate increases if the US
economy weakened and pled-
ged he will stay at his post even
if President Donald Trump
presses him to resign.
Invoking events of 2016,
when the Fed held rates
unchanged through most of
the year amid financial market
turmoil spurred by concerns
over slower growth in China,
Powell said he’s “listening sen-
sitively to the message that
markets are sending” about
downside risks to growth.
“With the muted inflation
readings that we’ve seen, we
will be patient as we watch to
see how the economy evolves,”
Powell said Friday on a panel
with his predecessors Janet Yel-
len and Ben Bernanke at the
American Economic Associati-
on’s annual meeting in Atlanta.
“No one knows whether this
year will be like 2016,” Powell
said in remarks that appeared
to be scripted at the start of the
event. “But what I do know is
that we will be prepared to
adjust policy quickly and flexi-
bly and to use all of our tools to
support the economy should
that be appropriate to keep the
expansion on track.”
The dollar weakened, Trea-
sury yields advanced and the
S&P 500 Index closed 3.4 per
cent higher as investors bet the
Fed chairman would wait and
see how the economy performs
before raising rates again.
“Powell’s more dovish tone
supports our expectation for
only one rate hike in 2019, fol-
lowed by a pause through
2020,” economists Mickey Levy
and Roiana Reid at Berenberg
Capital Markets wrote in a note
to clients. “Powell’s change in
tone is appropriate and we
expect a similar, more cautious
WHAT I DO KNOW IS
THAT WE WILL BE PREPARED
TO ADJUST POLICY QUICKLY
AND FLEXIBLY AND TO USE
ALL OF OUR TOOLS TO
SUPPORT THE ECONOMY
SHOULD THAT BE
APPROPRIATE TO KEEP
THE EXPANSION ON TRACK”
JEROME POWELL
Federal Reserve Chairman
tone to continue in light of
increased uncertainties.”
Powell’s Fed hiked rates four
times last year and projections
from its December 19 meeting
show officials expect two more
hikes in 2019. Sliding equity
prices, weakness abroad and
mixed economic data at home
have prompted calls for the Fed
to put rates on hold, but the US
labour market remains strong.
Data released earlier on Friday
showed US employers added
the most workers in 10 months
as wage gains accelerated.
Powell called the employ-
ment figures a “very strong
report,” though he showed no
anxiety about the advance in
wages. “Average hourly earn-
ings moved up and that’s quite
welcome and also for me at this
time does not raise concerns
about too-high inflation.”
“This seemed like a pretty
well-coordinated message,”
said Julia Coronado, president
of Macropolicy Perspectives
LLC in New York. “They can be
patient. He said the word
patient. I think that they’re sig-
nalling a pause.” That suggests
the Fed won’t tighten again in
March, she said.
In response to questions,
Powell also signalled a willing-
ness to include changes to the
Fed’s gradual run-off of its bal-
ance-sheet in any review of
monetary policy.
“If we ever came to the con-
clusion that any aspect of our
plans was somehow interfering
with our attainment of our
statutory goals, we wouldn’t
hesitate to change it, and that
would include the balance
sheet,’’ he said. “We don’t be-
lieve our issuance is an impor-
tant part of the story of the mar-
ket turbulence that began in
the fourth quarter last year.”
Trump has for months crit-
icised the Fed chief for raising
rates, and Bloomberg News rep-
orted December 21 the presid-
ent had discussed firing Powell.
The Fed chairman, respon-
ding to a question about what
he would do if Trump asked
him to step down, said he
wouldn’t resign. Fed watchers
have said that the bar is very
high for Trump to remove
Powell “for cause” as the law
appears to require, provided
Powell decides to fight the dis-
missal in court.
Friday’s event offered a rare
show of public unity by a sitting
Fed chairman and his two
immediate predecessors, who
were asked about Trump’s app-
arent disregard for the institu-
tion’s independence. US presid-
ents of the past quarter century
have kept private their opini-
ons about Fed policy so the Fed
can focus on employment and
inflation rather than feel pres-
sure from the short-term wish-
es of politicians. BLOOMBERG

Moscow Iran okays anti-money laundering BREAKING BOUNDARIES

accuses US of
detaining
Russian
REUTERS
5 January
The Russian Foreign Ministry
said on Saturday the United
States had detained a Russian
citizen, days after Moscow
arrested the former US
Marine Paul Whelan on sus-
picion of spying.
Whelan was arrested by
Russia’s Federal Security
Service on December 28. His
family have said he is inno-
cent and that he was in
Moscow to attend a wedding.
The ministry said the US
detained Russian citizen
Dmitry Makarenko on the
Northern Mariana Islands on
December 29 and had moved
him to Florida.
“... Makarenko, born in
1979, has arrived on Saipan
Island with
The his wife,
accusations underage
from both children and
sides could elderly par-
further ents. He was
complicate a detained by
strained FBI personnel
relationship at the airport
between right after his
Moscow and arrival,” the
Washington ministry said.
The US
Embassy in Moscow could
not immediately be reached
for comment.
The accusations from
both sides could further com-
plicate a strained relationship
between Moscow and Wash-
ington, despite the professed
desire of Presidents Donald
Trump and Vladimir Putin to
build a personal rapport.
US Secretary of State Mike
Pompeo said this week Wash-
ington had asked Moscow to
explain Whelan’s arrest and
would demand his immedi-
ate return if it determined his
detention is inappropriate.
Britain cautioned Russia
on Friday that individuals
should not be used as diplo-
matic pawns. Whelan also
holds a British passport.
The Russian ministry said
in its statement Moscow
diplomats had not been able
to reach Makarenko in Florida
and said Washington had yet
to explain his detention.
Before Moscow gave
details of Makarenko’s deten-
tion, experts had speculated
that Moscow could exchange
Whelan for Russian nation-
als held by Washington.
Bill to ease foreign trade
REUTERS
5 January
A powerful Iranian council
approved an anti-money laun-
dering Bill on Saturday, state
media reported, a major step
towards reforms that would
bring Iran into line with glob-
al norms and could facilitate
foreign trade in the face of US
sanctions.
Iran has been trying to
implement standards set by
the Financial Action Task
Force (FATF), an inter-gov-
ernmental organisation that
underpins the fight against
money laundering and terror-
ist financing.
Foreign businesses say
Iran’s compliance with FATF
standards and its removal
from the organisation’s black-
list are essential if they are to
increase investment, especial-
ly after reimposition of the US
sanctions on Tehran.
However, Iranian hardlin-
ers have opposed passing leg-
islation toward compliance
with the FATF, arguing it could
hamper Iranian financial sup-
port for allies such as Leba-
non’s Hezbollah, which the US
lists as a terrorist organisation.
Parliament last year passed
the anti-money laundering
Why cut-price long-haul flights can mean arriving late
IRENE GARCÍA PÉREZ & RICHARD WEISS
5 January
Discount carriers Norwegian Air
Shuttle ASA and AirAsia X may
fly you between continents for
significantly less than many other
operators, but there’s also a good
chance you’ll arrive late.
The Malaysian airline and the
UK arm of Norwegian, global
trailblazers in low-cost long-haul
travel, were among the worst six
performers last year for arrivals 15
minutes beyond the advertised
time, according to information
provided to Bloomberg by flight-
scheduling specialist OAG.
The rankings show the chal-
lenges in applying the no-frills
model that has thrived on short-
haul routes to the more complex
inter-continental market.
Discount specialists lack the
mammoth hubs of their full-serv-
ice rivals, leaving them with fewer
resources to fall back on when
things go wrong.
Almost two-fifths of services at
Norwegian’s UK arm were late in
Sanctions have depressed
the value of Iran’s rial and
aggravated annual inflation
fourfold in November REUTERS
bill, one of four amendments
Iran needs to implement to
meet FATF requirements, but
the Guardian Council, a vet-
ting body, rejected it, saying it
was against Islam and the con-
stitution.
On Saturday, the Exped-
iency Council, a body intend-
ed to resolve disputes between
parliament and the Guardian
Council, approved the bill with
some changes, state news
agency IRNA said, quoting a
member of the council.
The move came after Aya-
tollah Sadeq Amoli Larijani —
the chief of hardline judiciary
— was appointed last week as
the head of the Expediency
Council. He is the brother of
LATECOMERS
(Worst on-time performance in 2018)
Airline
TAP Portugal
Cebu Pacific
Pakistan International
Philippines AirAsia
Norwegian Air UK
AirAsia X
Czech Airlines
Shenzhen Airlines
Air India
Egyptair
Source: OAG
2018, partly because the airline
had to ground some Boeing Co. 787
jets — among the most modern
flying — for repairs to their Rolls-
Royce Holdings engines. Bigger
carriers such as British Airways
also idled planes but were better
able to cope.
Ali Larijani, the speaker of the
parliament.
Seven months after his
harsh dismissal of parliamen-
tary efforts to adapt FATF and
other international conven-
tions on money laundering,
Supreme Leader Ayatollah Ali
Khamenei seems to have
warmed to the reforms, a
reversal that experts say is
aimed at preventing Iran's eco-
nomic collapse.
In recent months, cities
have been rocked by demon-
strations as factory workers,
teachers, truck drivers and
farmers protested against eco-
nomic hardship. The sanc-
tions have depressed the value
of Iran's rial currency and
aggravated annual inflation
fourfold to nearly 40 per cent
in November. US President
Donald Trump withdrew from
a nuclear deal with Iran last
year and reimposed the sanc-
tions on its banking and ener-
gy sectors, hoping to curb its
missile and nuclear program-
mes and counter its growing
influence in the Middle East.
European signatories of the
nuclear deal are still commit- A devotee has her hair cut by a female Buddhist monk during a mass female Buddhist novice monk ordination ceremony at
ted to the accord and seek to the Songdhammakalyani monastery, Nakhon Pathom province, Thailand, on Saturday. Officially, only men can become
launch a mechanism, a so- monks and novices in Thailand under a Buddhist order that, since 1928, has forbidden the ordination of women. A growing
called special purpose vehicle, number of women defy generations of Thai Buddhist tradition by becoming ordained as novice monks at the unrecognised
aiming to sidestep the US. all-female monastery REUTERS
groundings, while adding that the
rankings show 75 per cent of
ty of airlines to quickly turn
around their aircraft, Grant said.
flights at the group’s main busi- Ranked bottom overall is
ness, which predominantly oper- Portugal’s TAP SGPS SA, where
Percentage of arrivals delayed
ates short-haul services, were on more than 42 per cent of services
by more than 15 minutes
time, placing it in the top 20 arrived late last year. The carrier
42.4 among low-cost carriers. told Bloomberg it faces “huge
41.6 AirAsia X said it views on-time infrastructural constraints” in
performance as a key indicator Lisbon and is working with the
40.6 not only for guest satisfaction but government and airport operator
38.9 also operational efficiency and ANA, owned by Vinci SA, to
cost, and that it holds a weekly secure investment.
38.3
meeting to review recent figures In the meantime, TAP has set
37.7 and investigate irregular delays. up a fleet of three backup aircraft,
36.7 The carrier is the long-haul hired more pilots and crew,
arm of AirAsia Group Bhd., improved boarding procedures,
36.5 Southeast Asia’s largest budget revised its timetables and signed
35.9 carrier, and serves destinations crucial union agreements. That
35.6 spanning the Middle East to has helped reduce flight cancella-
Hawaii and Australia to Japan tions and boosted punctuality, it
from hubs in Kuala Lumpur, said in an email. For a carrier to be
Bangkok and Bali using a fleet of included in the rankings, OAG
“These are developing long- over that are perhaps not as large.” Airbus SE A330 wide-body jets. must have data for at least 80 per
haul airlines and their fleet sizes The OAG data concerns the Six of the 10 worst on-time cent of its scheduled services.
are not as large as those of some of Norwegian Air UK arm of the performers were from Asia, where Among absentees is Ryanair
the legacy airlines,” OAG director Nordic carrier, which operates tropical weather can severely Holdings Plc, where flights were
John Grant said. “When they have long-haul flights from London’s impact flights. The development last year disrupted by strikes but
a delay or an aircraft that goes tech- Gatwick airport to the Americas of airports and terminal capacity for which insufficient data is
nical, which could happen to any- and Asia. A spokesman pointed to there also lags behind growth in available for some operations in
one, the available resources to rec- the impact of the engine-related demand, compromising the abili- Eastern Europe. BLOOMBERG
.
MUMBAI | 6 JANUARY 2019 WORLD 9 <

UK economy shows Samsung, Huawei supply majority of

own modem chips, says Qualcomm
signs of Brexit strain STEPHEN NELLIS
San Jose, California, 5 January
market — which includes slower
chips that go into cheaper handsets —

in first week of 2019

but rather the market for speedy “pre-
The two largest smartphone makers mium” chips where Qualcomm is
in the world supply a majority of their among the only options.
own modem chips to help their Huawei and Samsung are both
devices connect to wireless data net- large diversified technology corpora-
JILL WARD works, according to evidence pre- tions that make many other products
5 January sented at an antitrust trial for chip aside from premium-priced smart
supplier Qualcomm. phones. Huawei’s HiSilicon unit sup-

T
he first week of the new year
brought a slew of bleak
reports for the UK economy,
highlighting the scale of the chal-
lenges to come as Britain prepares
to leave the European Union.
Data on Friday showed the
housing market had its worst 12
months since 2013 last year, con-
sumers remained reticent about
borrowing and a gauge of services,
the largest part of the economy,
stayed sluggish. The latter report,
combined with measures of con-
struction and manufacturing, indi-
cates growth may have slowed to
0.1 per cent in the final quarter of
last year, according to IHS Markit.
“The economy effectively has
ground to a halt, primarily due to
mounting concerns about Brexit,”
said Samuel Tombs, an economist
at Pantheon Macroeconomics.
“Recent indicators point to softness
in retail spending. What’s more, the
official data have begun to mirror
the weakness of the PMIs.” He pre-
dicts growth slowed to just 0.2 per
cent in the fourth quarter.
Fears the nation may crash out
of the EU without a deal are increas-
ing as Parliament prepares to vote
A disorderly Brexit would put the Bank of England in crisis-fighting
mode — the pound would fall, fanning inflation, while new trade
barriers would put the brakes on growth
casts on growth and inflation in
February as they announce their
decision on interest rates. Markets
have priced out any increase in the
next 12 months, even as BOE Mark
Carney warned that a disorderly
exit from the EU may force the bank
to raise rates to contain inflation.
A disorderly Brexit would put
the BOE in crisis-fighting mode —
REUTERS
weak spending over the key
Christmas period.
Policy makers have insisted
domestic inflationary pressures are
building, and that they could stay
on a path to normalising monetary
policy even if a deal is signed in
time. The services PMI published
Friday showed that wages are inc-
reasing, pushing up costs for firms.
A trial between the US Federal
Trade Commission and Qualcomm
kicked off in a federal courtroom in
California on Friday, with the regula-
tors arguing that Qualcomm engaged
in anticompetitive patent licensing
practices to preserve a monopoly on
modem chips. The case is being close-
ly watched because it may shed light
on the likely eventual outcome of the
global legal battle between Apple and
Qualcomm.
Apple has alleged that Qualcomm
engaged in illegal business practices,
and Qualcomm in turn has alleged
that Apple violated its patents, scoring
victories in China and Germany last
month. Qualcomm has argued its
licensing practices follow long-estab-
lished industry norms and that it
charges broadly the same licensing
rates that it had for many years before
it ever started selling chips.
That has become a big market for
Qualcomm, which controlled 59.6 per
cent of the $15.3-billion market for 4G
German state sues VW for damages
plies the chips for its high-end phones
such as its Mate and P series.
Samsung’s chip division supplies
processors and other components for
many of its handsets and is also a
dominant global supplier of memory
chips beyond its own products.
The two firms are also Apple’s
fiercest rivals in the market for pre-
mium smart phones costing $700 or
A trial between the US Federal Trade Commission and Qualcomm is being more. Apple depends entirely on Intel
closely watched because it may shed light on the likely eventual outcome Corp and Qualcomm for modem
of the legal battle between Apple and Qualcomm REUTERS chips, though the iPhones released
in 2018 use Intel modems exclusively.
modem chips in 2017, according to and gets only 22 per cent of its mod- Technology news publication The
IDC’s Phil Solis, who studies mobile ems from Qualcomm, with the rema- Information last month reported that
chips for the research firm. inder coming from other unnamed Apple was designing its own modem
But Bob Van Nest, an attorney rep- makers. Samsung internally sources chip, citing Apple job listings and a
resenting Qualcomm in the case, also 52 per cent of the modem chips it source briefed on Apple’s plans. Apple
sought to show that Qualcomm is not uses, with 38 per cent from Qual- declined to comment on its plans.
dominant in the world’s two biggest comm and the rest from other mak- For the second quarter of 2018 —
handset makers. ers, according to the presentation. the most recent figures available from
During opening arguments, Van Huawei and Samsung did not IDC — Apple was the third-largest
Nest’s presentation said that Huawei immediately respond to a request for smart phone supplier by volume, with
internally sources 54 per cent of the comment. Also, the FTC’s case cen- Samsung and Huawei in first and sec-
modem chips it puts in its devices tres not on the overall modem chip ond place, respectively. REUTERS
Ex-North Korean

diplomat urges
on Prime Minister Theresa May’s the pound would fall, fanning infla- The BOE will still have a tricky REUTERS Volkswagen could not confirm this,
widely opposed Brexit deal in less tion, while new trade barriers would trade-off between supporting grow- 5 January and told Reuters the company had not
than two weeks. put the brakes on growth. th and fighting inflation. Econo- seen the particular lawsuit.

With Britain due to leave the EU
on March 29, with or without an
agreement, May is running out of
time to resolve the divisions in her
Conservative Party. The govern-
ment has stepped up its planning
for a no-deal exit, while Markit said
this week that manufacturers are
aggressively stockpiling as they
brace for a potentially disruptive
departure.
Policy challenge
The uncertainty also poses a chall-
enge for officials at the Bank of
England, who will publish new fore-
House prices grew just 0.5 per
cent in 2018, according to a Nation-
wide Building Society report on
Friday. Mortgage approvals dipped
to a seven-month low in November
and unsecured credit rose at its
slowest annual pace for almost four
years, BOE data showed.
Confidence drop
Household confidence fell to the
lowest level since 2013 last month,
according to a report on Thursday
from YouGov and the Centre for
Economics and Business Research.
Retailers have been bracing for
mists in a Bloomberg survey are
forecasting growth of just 1.3 per
cent overall for 2018, and only a sli-
ght recovery to 1.5 per cent this year.
Carney may face questions
about the potential impact of
Britain’s new trading relationship
with the EU when he takes part in
an online forum about the future of
money on January 9. The event
comes in the wake of criticism that
post-Brexit economic scenarios
published by the central bank late
last year overstated the risks of a
no-deal departure.
BLOOMBERG
The German Federal State of Baden-
Wuerttemberg is seeking damages from
Volkswagen after local authorities pur-
chased VW diesel vehicles which now face
bans in cities like Stuttgart, Frankfurter
Allgemeine Zeitung said on Saturday.
The value of diesel cars plummeted
after German environmental groups
scored a court victory last year that forced
cities to consider bans of older diesel vehi-
cles to bring emissions into line with
European Union clean air rules.
The FAZ daily said state authorities
filed a lawsuit with a court in Stuttgart at
the end of last year, seeking damages
totalling “low double-digit millions”.
But it added that previous court deci-
sions had backed its stance that legal
actions to seek damages are without mer-
it given that VW cars had valid road certi-
fication at the time of sale.
Officials at Baden-Wuerttemberg could
not be immediately reached for comment.
The paper said taxpayer money had been
spent on buying and leasing diesel vehicles
for the police service. It didn’t specify how
Baden-Wuerttemberg had lost money.
US regulators in 2015 blew the whistle
on Volkswagen’s systematic emissions test
cheating which revealed the carmaker’s
vehicles emitted far higher levels of nitro-
gen oxide pollution than permitted by law.
missing colleague
to go to S Korea
HYONHEE SHIN
Seoul, 5 January
A former North Korean diplomat who staged a high-profile defec-
tion to the South on Saturday urged an old colleague who has gone
missing in Italy to defect to Seoul, following a report that he was
seeking asylum in the United States.
Jo Song Gil, the 44-year-old who was until recently North
Korea’s acting ambassador to Italy, disappeared with his wife
after leaving the embassy without notice in early November,
South Korean lawmakers said on Thursday.

Mining world watches as Congo counts votes

THOMAS BIESHEUVEL
6 January
The Democratic Republic of
Congo is in uncharted waters
as the nation awaits election
results marking the end of
President Joseph Kabila’s rule.
One thing is certain: the min-
ing world is watching closely.
Congo, which held presi-
dential polls on December 30,
is one of the world’s most
important but difficult min-
ing jurisdictions. Companies
including Glencore, Barrick
Gold Corp. and China
Molybdenum have major
operations in the country and
Congo is the biggest producer
of cobalt, a key material for
batteries, as well as an impor-
tant source of minerals from
tungsten to tin.
One of the industry’s big-
gest concerns in the past year
has been a new mining code
introduced by Kabila’s govern-
ment that raised royalties,
added taxes and cancelled a
clause that would have pro-
tected them against fiscal
changes for 10 years. There has
been vocal opposition from the
mining industry, but so far no
concessions.
An official of Congo’s Independent National Electoral Commission reads out the presidential
elections results of one polling station at a tallying centre in Kinshasa, Democratic Republic of
Congo, on Friday
The presidential contest is a
three-way race between Kab-
ila’s protege, Emmanuel Ram-
azani Shadary, and the two
main opposition candidates —
Martin Fayulu and Felix Tshi-
sekedi. While Shadary is exp-
ected to stick with the new
mining code, the issue has not
been a prominent campaign
theme, so investors largely
remain in the dark on the pos-
sible impact.
Fool’s errand
On the campaign trail, Shadary’s
team criticised the opposition
by claiming they would reverse
the mining code, while Fayulu
and Tshisekedi’s camps have
indicated in interviews they’d
at least re-engage with the min-
ing companies and listen to
their concerns.
“No one’s made any specific
assertions on what they’re going
to be doing to the mining indus-
REUTERS
try post elections,” said Ben
Davis, an analyst at Liberum
Capital Markets. “There are too
many unknowns. Praying for
any one candidate is a bit of a
fool’s errand.”
State-owned mining com-
pany Gecamines, headed by
Kabila ally Albert Yuma, last
year renegotiated joint ventures
with Glencore and Eurasian
Resources Group BV in deals
that involved billions of dollars
of debt forgiveness by their par-
ent companies. Yuma has
repeatedly said he plans to revis-
it all partnerships with interna-
tional mining companies, a
course of action that would like-
ly continue under a Shadary
presidency.
The elections are a milestone
for Congo, which has never wit-
nessed a peaceful transfer of
power. The electoral commis-
sion has said it can’t give provi-
sional results before January 6,
however an organisation repre-
senting the country’s influen-
tial Catholic bishops said
Thursday that “data in its pos-
session” from polling stations
already show the outcome.
Global giant
Congo, home to deposits of gold,
diamonds, tin and coltan, is
renowned for its copper and
cobalt output — it accounts for
more than half of global pro-
duction of cobalt. Glencore, the
biggest commodity trader, oper-
ates cobalt and copper mines in
the country and mined almost
300,000 metric tons of copper
and 26,000 tons of cobalt in the
first nine months of 2018. It
plans to produce significantly
more this year, as it ramps up
production at its Katanga mine.
Barrick Gold, which com-
pleted the $5.4-billion takeover
of Randgold Resources Ltd. this
week, inherited an interest in
the country as part of the deal.
The company now operates the
Kibali gold mine in the Congo’s
northeast, one of the best in the
world. The operation will pro-
duce more than 700,000 ounces
of gold this year. AngloGold
Ashanti Ltd. also owns 45 per
cent of the mine.
“We believe it’s an important
step for the country. We await
the outcome and the conse-
quences of the final election
results,” Barrick’s new Chief
Executive Officer, Mark Bristow,
said earlier this week. “We will
continue to work with the new
authority in the DRC to ensure
that we can deliver on our view
that there is enormous oppor-
tunity, particularly in the North
East DRC, for discovering world
class gold deposits.”
Other companies in Congo
include China Moly, which
bought the giant Tenke
Fungurume copper and cobalt
mine from Freeport-McMoRan
in 2017, and privately-held
Chemaf, which also mines
cobalt. BLOOMBERG
Jo has sought asylum in the US and is under the protection of
Italian intelligence, Italy’s La Repubblica newspaper said on
Friday, citing an unidentified diplomatic source.
The State Department and the US embassy in Seoul did not
immediately respond to a query from Reuters.
In an open letter, Thae Yong Ho, Pyongyang’s former deputy
ambassador to Britain, who said he went to the same university
and worked with Jo before defecting to South Korea in 2016,
urged Jo to follow in his footsteps.
To defect to the South is an “obligation, not a choice” for
North Korean diplomats committed to unification, Thae said, call-
ing Seoul “the outpost” for that task. “If you come to South Korea,
the day when our suffering colleagues and North Korean citizens
are liberated from the fetters would be moved forward,” Thae said
in the letter released on his website.
“If you come to Seoul, even more of our colleagues would fol-
low suit, and the unification would be accomplished by itself.”
Thae said his family visited Jo in Rome in 2008, where the lat-
ter was studying from 2006 to 2009. He guided them to sites
such as St. Peter’s Basilica in Vatican City. South Korea could not
be “heaven on earth” but a place where Jo can realise his wishes,
Thae said, highlighting the ardent desire for unification among
many of the roughly 32,000 defectors there.
“The defectors may not be as wealthy as South Koreans,”
Thae added. “But isn’t it the only thing you and I, as North Korean
diplomats, should do the rest of our lives — to bring about unifi-
cation and hand over a unified nation to our children?”
If confirmed to have fled, Jo would be another Europe-based
diplomat who has sought to leave the impoverished, oppressive
North under the rule of Kim Jong Un.
In 2015, a counsellor in charge of science affairs at the North’s
embassy in Germany defected with his wife to an unidentified
country, while a secretary-level trade official stationed in Bulgaria
and his wife also fled, Thae told South Korean cable news Channel
A in an interview this week. South Korean officials said they
could not comment on intelligence matters.
Europe could be a safer place for North Korean diplomats than
elsewhere due to its openness to receiving asylum seekers, defec-
tors and experts say. North Korea has formal diplomatic ties with
26 European nations, as well as Britain and Germany, since 2013,
Seoul’s Unification Ministry says. REUTERS

No, China isn’t winning the space race anytime soon

ADAM MINTER
5 January
On Wednesday, China successfully land-
ed its Chang’e-4 spacecraft on the
moon’s far side — an impressive techno-
logical accomplishment that speaks to
China’s emergence as a major space
power. Understandably, some Chinese
scientists are taking a victory lap, with
one going so far as to gloat to The New
York Times that “We Chinese people
have done something that the
Americans have not dared try”.
That cockiness speaks to the spirit of
great-power competition animating the
Chinese space programme. China is open
about the fact that it isn’t merely looking
to expand human knowledge and bound-
aries; it’s hoping to supplant the US as the
21st century’s dominant space power.
And, if this were still the 1960s, when the
American and Soviet space agencies
fiercely competed against one another,
China’s deep pockets, focus and methodi-
cal approach to conquering the heavens
might indeed win the day. But the truth
is, thanks to the development of a dynam-
ic, fast-moving American commercial
space industry, China’s almost certain to
be a runner-up for decades to come.
That doesn’t mean the People’s
Republic isn’t making progress in its
attempts to colonise the moon and turn it
into the outer-space equivalent of its
South China Sea outposts (an avowed
goal of Ye Peijian, head of China’s lunar
programme). China will launch a mission
to bring back samples from the moon lat-
er this year. Over the next decade, it plans
to launch a space station, a Mars probe,
asteroid missions and a Jupiter probe,
while continuing to develop reusable
rockets and other vehicles that will
enhance its access to space. A human
mission to the moon is targeted for 2030,
and a permanent colony by the middle of
the century.
By contrast, NASA’s own ambitions
seem limited. American astronauts
haven’t left low-Earth orbit since the
last Apollo moon landing in 1972, while
the US lost the ability to fly to the tax-
payer-funded International Space
Station with the retirement of the Space
Shuttle. Too often, new presidents have
shifted space priorities, forcing NASA to
cancel or reconfigure expensive mis-
sions that have been years in the plan-
ning. Worse, many members of
Congress still view NASA as a tool to
deliver wasteful, pork-barrel spending
in fields ranging from small satellites to
lunar exploration. The results have been
spectacular: By NASA’s own estimates,
the cost of SpaceX developing its work-
horse Falcon 9 rocket was less than 10
per cent of what it would have cost if
NASA had done it.
NASA’s backing is paying dividends
elsewhere, too. In coming weeks, SpaceX
will launch uncrewed orbital test flights
of its Crew Dragon spacecraft — a cap-
sule designed to deliver US astronauts to
the International Space Station. At least
two other companies are looking to
launch commercial space stations. Jeff
Bezos’ Blue Origin LLC is planning an
uncrewed moon landing by 2023 (in line
with NASA’s lunar goals). Meanwhile,
SpaceX is developing a larger rocket
that’s scheduled to take tourists around
the moon that same year. And NASA,
As long as the US remains focused on cultivating its commercial space industry keen to encourage more lunar explo-
and continuing to fund cutting-edge science programmes, it has little reason to fear ration, just announced a partnership
falling behind with nine companies developing lunar
landers, with the first missions set to
to politically connected constituencies. tant role has been as a seed investor and launch as early as this year.
But, that hardly describes the entirety adviser to private space companies. While Of course, space exploration isn’t just
of the US space programme. Since the Elon Musk’s Space Exploration about making money and colonising the
mid-2000s, when Congress authorised Technologies — or SpaceX — receives the moon. Science, too, remains a motivation,
the agency to begin cultivating public-pri- bulk of attention, the commercial space and there the US remains a global leader
vate partnerships, NASA’s most impor- industry now comprises dozens of firms with a nearly insurmountable lead. Just
this week, the New Horizons probe com-
pleted the most distant exploration in his-
tory (of a small rock 4 billion miles from
Earth), and the OSIRIS-REx probe went
into orbit around a small asteroid (that
it’ll sample in 2020). NASA also has —
among other missions — one ongoing
mission at Jupiter and four at Mars, a
solar probe, and two spacecraft that have
entered interstellar space.
Neither China nor any other country
has plans to compete with this record of
accomplishment, nor do they have the
scientific or engineering experience to do
so. As long as the US remains focused on
cultivating its commercial space industry
and continuing to fund cutting-edge sci-
ence programmes, it has little reason to
fear falling behind. Better yet, it has a
much better chance to attract space sci-
entists and other talent keen to profit
from one of the 21st century’s most prom-
ising growth industries.
China, too, isn’t oblivious to the poten-
tial of commercial space — it’s developing
its own industry — but the persistent
dominance of China’s state sector ensures
that its entrepreneurs will spend as much
time on politics as propulsion systems. If
we’re in a new race to the stars, the US
remains a good bet to win. BLOOMBERG
 10 DEMOCRACY AT WORK
>
MUMBAI | 6 JANUARY 2019 1

DID THEY REALLY SAY THAT?

CHATTERBOX

Capital calling for TRS CHECKLIST

The demand for real estate from political parties never seems to end. The latest to join
the chorus is the Telangana Rashtra Samithi (TRS) that has announced it will con-
DONALD TRUMP'S BLUNT-SPEAK ON INDIA
struct its office in Delhi soon. The Centre has agreed to grant the party an area of 1,200 On the Harley Davidson duty cut, 2018: "Now, countries. And it's going to stop. Or we'll stop
sq yards.TRS president and Telangana Chief Minister K. Chandrasekhar Rao (KCR) the prime minister (of India Narendra Modi), trading with them. And that's a very
was in Delhi last week to inspect the land available on offer. TRS will have to pay ~5 who I think is a fantastic man, called me the profitable answer.."
crore to the Ministry as the land price. KCR has sent a team of his MPs led by B Vinod other day and said we are lowering it to 50 Modi’s accent, 2018: According to the
Kumar to select one of the three sites suggested by the Ministry. He has also told par- per cent. I said okay, but so far we're getting Washington Post, “Senior administration
ty MPs that he would lay the foundation stone for a party office with all the mod cons nothing. So we get nothing. He gets 50 (per officials said that the president has been
after 15 January and complete the construction by the last week of May, before the cent), and they think we're doing -- like known to affect an Indian accent and imitate
formation of the new Lok Sabha. The cost is expected to be around around ~25 crore. they're doing us a favour. That's not a Indian Prime Minister Narendra Modi, who in
The TRS office in the national capital would be designed to meet its future needs favour…I wasn't sure -- he said it so an Oval Office meeting last year told him,
as the party wants to play a major role in central politics through formation of a fed- beautifully. He's a beautiful man. And he ‘Never has a country given so much away for
eral front. Besides an office for the national president (as TRS wants to become a said, 'I just want to inform you that we have so little in return’ as the United States in
national party by expanding its activities in Andhra Pradesh too), there will be pro- reduced it to 75, but we have further reduced Afghanistan.”
vision for a meeting hall for guests and visiting dignitaries. it to 50'. And I said, huh. What do I say? Am I India’s role in Afghanistan, 2017: “We
The decision to build an office of TRS in Delhi is in tune with KCR’s decision to supposed to be thrilled?” appreciate India’s important contributions to
build offices in all 33 district headquarters in Telangana within six months. "Modiji, your 'I's and lies' have destroyed the On trade with India, 2018: "This isn’t just G7. stability in Afghanistan. But India makes
TRS at present has only one own office, Telangana Bhavan, in Banjara Hills social fabric and the economy of the country, I mean, we have India, where some of the billions of dollars in trade from the United
in Hyderabad. The party has offices in some big districts, but in rental premis-
trampling upon Constitutional institutions as tariffs are 100% ... And we charge States and we want them to help us more
also rights of individuals."
es. KTR has been entrusted with the responsibility of constructing own offices
Congress spokesman Randeep Surjewala on Prime Minister
nothing….Can't do that. We are talking to with Afghanistan, especially in the area of
in all the districts. Narendra Modi's interview, January 2, New Delhi many countries, we are talking to all economic assistance and development.”

ILLUSTRATION: BINAY SINHA

OPINION PM is not overly worried about these criticisms.
She seems happy that she has got legitimacy for
from the recent interception of a telephonic con-
versation between a BNP leader and an under-
FROM THE RAJYA SABHA her elections from India, China, Russia, Sri cover ISI operative.
Lanka, Saudi Arabia and even Iran. Also, her

The image of
personality is such that she is defiant in the
face of pressure. Displaying her resolve and
courage of conviction, she has, in the past, pro-
Politics in Bangladesh impacts politics in
parts of India, especially West Bengal,
Tripura and insurgent-hit areas of Assam.
Will insurgency increase or decrease?

Parliament is
ceeded with grit in trying the war criminals and
even executing them. She was indifferent to Ans: India’s North East has always been vulner-
Islamic countries who advocated leniency to able to attacks in the states of Assam , Tripura ,

taking a beating
the Jamaat-linked war criminals .
She is also expected to launch a diplomatic
offensive and try to get Tareq Rahman (son of
former Prime Minister Khaleda Zia who is cur-
Manipur etc. Assam was most affected as the
United Liberation Front of Assam (ULFA)
enjoyed a safe haven in Bangladesh with state
support. It received training there and ULFA

C
hairman: Honourable Members, I am sorry that I rently in jail on corruption charges) deported chairman Paresh Barua remained in various
could not be here the other day because of some from London to Bangladesh to face trial on a parts of Bangladesh and moved as freely as a
bereavement in my family. I normally do not miss number of important charges and see that he is Bangladeshi citizen. Indian agencies gave pin-
the Parliament, but it was beyond my control and, then, also convicted. Tareq Rahman is in exile in pointed intelligence on Paresh Barua’s where-
it was duty also to be there in my village. London and is suspected to be receiving support abouts but Dhaka refused to acknowledge his
Now, I would like to make an appeal to all the from quarters that want to hurt Indian and presence or act against him. Fortunately, in
Members once again that we have entered into a new Bangladesh interests. His extradition will reaf- Hasina’s second stint, Paresh and his accom-
year and we are left with just four working days. Then, firm Hasina’s credibility and plices were all evicted and the
after that there may be another Session — as we are all reinforce her political creden- north east insurgents including
aware that before the elections the Government normal- tials. This will also help unity Manipuri and Tripura insurgent
ly just go for Vote on Account — only for few days. That among the liberal and secular groups are on the run. Today
will also be for only a few days. So, it will be a continuous forces and give a sense of secu- there are no insurgents on
Session as per the present arrangement. rity to the religious minorities . Bangladeshi soil.
Keeping that in mind, we have to understand that we However, some disturbing
have a heavy agenda before us. A number of Bills — the The opposition Bangladesh trends have been noticed. ULFA
Bills which have even gone to the Select Committees and National Party (BNP)- has again flexed its muscles and
Jamaat e Islami have ganged SHANTANU MUKHARJI
come back with some unanimous recommendations and killed a number of Bengalis in
up. The nature of the Former IPS officer &
the Bills on which there is a broad consensus in the parts of Assam. It would seem
opposition is as anti-India as security analyst
Business Advisory Committee about the need to pass there is a resurgent ULFA. This
them after making our suggestions and criticisms, if any, Shantanu Mukharji is from the Indian Police Service who has served in Dhaka and is a security it is Islamic fundamentalist. would then seek support from
— there are also a number of such Bills lying. analyst. In this interview with Aditi Phadnis, he explains the political and geostrategic How big a danger is this to the internal its Bangladesh handlers to give them some space
All these Bills have been allocated time by the implications of Sheikh Hasina’s victory in Bangladesh. Edited excerpts: politics of Bangladesh? How much space to operate. More than Bangladesh, it is India
Business Advisory Committee. In addition to this, we will Pakistani fundamentalist groups get that should be alert to ULFA movements.

‘Dhaka is eyeing a
have also identified certain important issues to be dis- in Bangladesh now? Similar vigil needs to be exercised in West
cussed in this Session of Parliament to which I have The unholy nexus between BNP and Jamaat is Bengal too. Bangladesh has come to notice in the
already given permission. These have been admitted. We well known. They have actively partnered in gov- past for smuggling fake currency notes into West
could not take up the discussion on the cyclone in the ernance (2001-2006). Two Jamaat ministers were Bengal through the long porous borders to crip-
Southern States. Then, we have on agenda, the issue of given crucial cabinet berths tacitly allowing them ple the Indian economy. Some groups in

agrarian problem in the rural sector. Then, we have the
problem of price rise for which notices have been given
by some people. Then, we also have issues which have
been agreed upon to be discussed here, plus Bills.
…(Interruptions).. That is a Bill. When the Bill comes,
then your Resolution also will come up automatically.
Then, there is Rafale issue also. So, with all these
important things, the country is looking to us. I am, par-
ticularly, concerned because of the loss of the image the
House is suffering. Another thing is, not to make com-
parison or to be envious -- the other House is functioning;
the Bills are getting approved, and we are not able to func-
tion here.
So, please, I appeal to all of you. We have just now,
today, released the calendar for the New Year canalizing
all the great people who have presided over this House, the
Leaders of the House and the Leaders of the Opposition at
that time, then, the Leaders of the Opposition who became
the Leaders of the House subsequently, the Leaders of
the House who became the Leaders of the Opposition
subsequently, and then, the Leaders of the Opposition
who became Prime Ministers. So, there is a history.
Then, there have been 12 Chairmen before me. We all
have expressed the need to have a meaningful debate in
this House. One of the Leaders of this House has become
Prime Minister, another Leader of the House has become
the President of India also, Shri Pranab babu. So, keeping
all these traditions in mind, I earnestly appeal to all of
you. Whatever issues you have, please come to me if they
are already not admitted, I will consider them positive-
ly. Secondly, any issue cannot be dictated that you do this
way, only then we will allow the House. This is not accept-
able in a system. The House started on 11th December,
2018. Today, we are on 2nd January, 2019. We have not
been able to do anything. So, please understand this.
The entire country is watching us. I have the habit of
going around and addressing universities, scientific com-
clean government’
Sheikh Hasina has won the Bangladesh
elections again, despite anti-incumbency,
croneyism and undeniable corruption.
What are the changes we should expect to
see in policy, so that these concerns are
addressed in her new term?
Sheikh Hasina with a fresh mandate with an
unprecedented majority, will start her fresh
innings with a signal to voters that she would
now pursue a policy of ‘zero tolerance’ against
corruption. The task is onerous and very chal-
lenging . How will she convey that she means
business? While a change in portfolios of the
erstwhile ministers is on the cards, she might
retain those ministers who have performed and
delivered and drop the non performers and cer-
tainly those with a taint .
The new ministerial cabinet will likely be in
place by January 6. There will be three to four
technocrats in the Cabinet to lend a modern
outlook to governance. At present, there are 49
ministers in the cabinet: 30 of cabinet rank; 17
ministers of state and 2 deputy ministers. While
the numbers might not change, new ministers,
especially those judged to be competent, should
be expected.
Significantly, Hasina is also thinking of
accommodating some in her cabinet who were
denied tickets. This could be to rule out dissent
in the new ministry.
Here are a few names. Lt Col ( retd ) Farooq
Mohammad Khan, Presidium member Abdur
Razzak and Prime Minister’s Private Sector
Affairs Advisor Salman Rahman are being con-
sidered for ministerial berths. More interest-
ingly, Bangladesh cricket player of interna-
tional repute Mishrafe Bin Mortaza, who won
the elections from Narail 2 constituency, may
be inducted provided it does not clash with his
cricketing commitments. However, he has
every chance of being included after the World
Cup. It is, therefore, evident that Hasina’s
ongoing exercise for a new cabinet is all inclu-
sive: A cricketer, scientists, technocrats, et al.
The idea is to provide a clean, development-
oriented government.
She is also required to allay fears amongst the
western powers and the European Union that
the December 30 election was not transparent
and was marred by irregularities, intimidation
and coercion.
Human Rights Watch, Bangladesh based in
New York, came down heavily on the
Bangladesh government on charges of tamper-
ing of ballot boxes. The US and the EU have
voiced similar allegations. That said, the new
to deepen the Pakistani footprint in Bangladesh, Bangladesh had also sent terrorists as deep as
encouraging anti-India propaganda and foment- inside Burdwan detonating bombs. An all-out
ing Islamic fundamentalism which nourished alertness therefore is called for to safeguard the
different terror groups threatening the secular vulnerable borders.
fabric of Bangladesh. BNP remained a ‘white col- Further, Bangladesh needs to be diplomati-
lar’ entity which abetted fanaticism by proxy cally kept in good humour on NRC. Mamata
through Jamaat. That remained a dark chapter in Banerji needs to be persuaded to accommodate
the Bangladesh history. Bangladesh concerns on water. With a huge
Threat to internal affairs in Bangladesh mandate in her favour, Hasina may now step up
remain as several zealot groups derived and con- the demand for Teesta water-sharing. It is a del-
tinue to get oxygen from the Jamaat and its icate issue meriting deft handling.
extremist ideology. We have seen systematic
killings of LGBT activists , liberals and progres- India's efforts to prospect gas and other
sive elements , bloggers and intelligentsia since resources in Bangladesh have made
2013. But for a determined action by the gov- extensive headway and a pipeline is to be
ernment and noise by the secular elements, this constructed starting this year. What are the
pattern would have continued with disastrous other areas where there is going to be
consequences. progress in business?
Bangladesh agencies should not be compla- There is a huge potential between India and
cent following Hasina’s overwhelming victory. Bangladesh in the business sphere. Both the
The same forces , frustrated by the decisive rout, leaders jointly inaugurated (September 2018) a
will try to regain lost ground by acts of terror. 130 km friendship oil pipeline. It will connect
India should also hold Bangladesh’s hand in Siliguri ( West Bengal) in India to Parbatipur
combating the menace through a collaborative (Dinajpur in Bangladesh). The ~346 crores proj-
counter intelligence measure so that the anti- ect is expected to be complete in 30 months
Bangladesh and anti-India forces are denied with a capacity to produce oil amounting to one
breathing space . Internally again , terror outfits million metric tonnes per annum.
like Harkatul Ansar, Jamaitul Mujahdeen Another landmark area of mutual coopera-
Bangladesh , Hijbut Tahrir, etc should be under tion is dual gauge railway lines between Dhaka-
the scanner 24/7 to avoid any act of misadven- Tungi-Joydebpur rail project essentially to
ture . Technology should be used to the opti- improve connectivity and generate revenue.
mum to foil any attempt by Pakistani ISI to cause This apart, both the countries are in agreement
any dent in Bangladesh’s secular fabric . The in the field of nuclear cooperation and a constant
situation calls for abundant caution as evident endeavour to narrow down the trade deficit.

The voice of storytellers

munities, attending convocations, wherever I go, and
also I come across the media! That is causing a loss of
image to the House. …(Interruptions).. Please, please.
The image of Parliament is taking a beating. That is why
people are laughing at us. I am not able to digest it as the
Chairman of this House. After all, you are all senior Once a loner, Nikhil Chandwani is now an author and a TEDx speaker and runs a rescue centre for writers that
Members. Please, tell what is the problem?
Shri Anand Sharma: No problem, Sir. grooms and provides them a platform to evolve as public speakers and mentors, writes Sneha Bhattacharjee
Mr Chairman: People are laughing at us; still, we are

laughing. We are laughing at them, that you have elected
us but see, what is happening! I don’t want this sort of sit-
uation in the House. I earnestly request to all of you again,
please cooperate; see to it that this House functions for the
remaining days in a meaningful manner, and, then, pass
some legislations after having some meaningful discus-
sions. This is my appeal to all of you. ..(Interruptions)..
Dr T Subbarami Reddy: Who is disturbing every day? It
is only the AIADMK. Please request them to cooperate.
See, again, they are coming.
Mr Chairman: Each one accusing the other is not going
to help. …(Interruptions).. Dr. T. Subbarami Reddy, please
sit down.
Mr Chairman: The calendar and diary are available in
the Publication Centre. …(Interruptions)… Let the House
discuss and decide that 'we need to go for action.' The
Chair is ready for action. …(Interruptions)… But it cannot
be selective. …(Interruptions)… Anybody disturbing the
House, anybody coming to the Well of the House, action
has to be taken. If I have the consent of the entire House,
then we can think on those lines and move forward.
…(Interruptions)… But it cannot be selective. 'If they come
to Well, take action; if we come to Well, excuse us.'
…(Interruptions…(Interruptions)… So, please understand.
…(Interruptions)… Dr. Santanu Sen to speak on concern
over certain provisions of the Consumer Protection Bill.
Dr Shantanu Sen. …(Interruptions)…
Shri Y S Chowdhury: Sir, the House has to be in order.
…(Interruptions)…
Edited excerpts from proceedings of the Rajya Sabha, 2 January
in New Delhi
A
bhishek Mohurley hails from stories that could help create a vision to WRC publishes and markets it for writers.
Gadchiroli in Maharashta. He had develop India as well as build a generation of “Once enough copies are sold, our students
more than 10 backlogs in Physics sub- young dynamic leaders, WRC was able to are groomed by another mentor in the art of
ject while pursuing his engineering, a subject bring together under its umbrella people from public-speaking and script-writing based on
his father holds a PhD in. Coming from a town all walks of life. their interest level,” says Chandwani. This
hit by left-wing insurgency, Mohurley was “I put pen to paper in my early teens. I was way, the organisation has managed to mentor
more interested in writing. His interest piqued able to publish my debut novel at the age of 18, over two hundred writers with their works.
when he met a surrendered Naxalite. He wrote nine more books but I was driven to They have also been able to create 30+ TED(x)
decided to bring to life the journey of this make a difference through social entrepre- speakers and as many national award win-
Naxalite from a non-decrepit vil- neurship and so, I took a long pause ners across India.
lage to taking up arms against his from personal ambitions and started The authors have ranged from a dyslexic
own country. Mohurley, who once focusing on developing a Gurukul writer, Yash Singhania, who emerged from
considered himself a black sheep (mentorship) system for storytellers, his failures in chartered accountancy to write
in the family, ended up writing his depressed, suicidal, introverts, poets and publish three books and currently works
first book in Marathi on a Naxalite. alike,” says the 25-year-old founder. as a columnist for LA Times and Chicago
As the book was launched in the Irked by the negativity towards life Tribune to a differently-abled writer called
market, his family and well-wish- had people as young as him in its Nikhila Chalamalasetty from Vijayawada.
ers were taken by surprise. He grips, Chandwani wanted to give them Chandwani takes pride in talking about his
became an overnight celebrity in THE OTHER all a platform to share their stories students and how he has been able to train all
his village. No one could believe
that someone who had failed in
INDIA thereby making them embrace the
positivity that life has to offer. That’s
Nikhil Chandwani, founder, Writers’Rescue
Centre, identifies himself more as a political
211 of them. “Through my guest lectures, I
was able to reach out to over 30,000 individ-
studies could one day publish his why Chandwani named his venture enthusiast now than a social entrepreneur and uals across Asia,” he adds.
own work that would strike a “Writers’ Rescue Centre” aiming at writer and has taken it upon himself to teach Chandwani who identifies himself more as
chord with the readers. Mohurley is no longer the writers who are either unable to reach out Indians about their own history and how it a political enthusiast now than a social entre-
a depressed soul, and delivers lectures across or don’t know how to tell their stories to the plays an important role in religion preneur and writer and has taken it upon him-
colleges in Maharashtra. world. “Writing has many variables. From self to now teach Indians about their own his-
This is just one story. There are several script writing to a screenplay, book writing, mentor/guru is assigned to a storyteller or an tory and how it plays an important role in
such instances of storytellers, of people with travel writing, political commentary, historical interested writer based on the genre. The religion. “For long, religion has been used to
their own stories to share that the Nagpur- research, technical writing and speech polish- mentor teaches them how to write and shape divide the people. I want to put an end to it. I
based Writers' Rescue Centre (WRC) has been ing, no field in writing is saturated but people up the story. Daily brainstorming over what- want people to be encouraged about every-
trying to bring to the world. Founded in 2016 don’t have a definite path,” he says noting how sapp/emails/phone calls are done until the thing they encounter in their daily lives,” says
by Nikhil Chandwani with the aim to bring WRC is trying to bridge that. story is ready. Once it is ready, the book is Chandwani who is hoping to unite the young-
the young generation to speak up and share The organisation works like a Gurukul. A then sent for editing. Once the book is edited, sters through his mentoring.
 >
OPINION 11
Volume XII Number 43
MUMBAI | 06 JANUARY 2019

Enforced patriotism
ly basis would encourage a student to
become a model patriotic citizen — to pay her
taxes, help the poor, keep the streets clean,
lower her carbon footprint, and so on.
Mechanically intoning ‘Jai Hind’ makes little sense To pose the issue differently, can the fol-
lowing acts be considered patriotic: Beating
up people who choose not to or cannot stand
interrupting the singing of the national
anthem to exhort those around him to put
their hands over their hearts, American style.
Apparently, this stance contradicted some
section in a law called Prevention of Insult to
National Honour Act, 1971. The Act imposes
imprisonment, for as much as three years, for
recommendations on the playing of the
national anthem and modifications to the Act.
Should a state define how its citizens
should demonstrate their patriotism? This is
not a settled issue even in advanced democ-
racies, which allow a degree of political incor-
rectness against public figures that Indians

I
t can be said safely that at 71 years, the
Indian nation is mature enough for
mandatory demonstrations of patriot-
ism to be redundant. A year ago this
month, the Supreme Court made precisely
this point when it modified its 2016 ruling
making it compulsory for cinema halls to play
the national anthem. Making the action vol-
untary, the court observed that Indians cannot
be expected to wear their patriotism on their
sleeve. Somehow, politicians in Gujarat appear
not to have gotten the memo on this. From this
month, the state government has decided on
an initiative to have school students respond
with “Jai Bharat” or “Jai Hind” instead of “pres-
ent” or “yes” in the daily roll call.
The motive: To instill patriotism, which
they believe is lacking in the new genera-
tion. Given that patriotism is a complex val-
ue that is hard to define, this is a remarkable
observation. Instead of demanding such quo-
tidian responses from school kids, politicians
of Gujarat would do better to wonder why
the younger generation, that too in India’s
most prosperous and certainly most nation-
alist state, should be thinking this way (if
indeed they are). Would it, for instance, have
anything to do with the lop-sided develop-
ment in the state? It is uncertain how
mechanically intoning “Jai Bharat” on a dai-
during the national anthem, or suing Shashi
Tharoor (a member of Parliament) and
Infosys co-founder N R Narayana Murthy for
allegedly disrespecting the national anthem?
Mulling on the case in a private lecture
recently, Mr Narayana Murthy pointed out
that Indians seem to be wholly tolerant of
rampant corruption but were unduly sensi-
tive to patriotism. He was sued for choosing
an instrumental version of the anthem at a
company function in deference to foreigners
who were attending. The case, which went
right up to the Supreme Court, cost him ~48
lakh in lawyers’ fees. Mr Tharoor was sued for
anyone who intentionally prevents the
singing of the national anthem. Since Mr
Tharoor’s “interruption” had an uber-patri-
otic motive, a lower court sensibly dismissed
the case. The sensitivity that Mr Tharoor’s liti-
gious opponent showed is ironic when Indian
businessman Naveen Jindal had to fight a
case — again, in the Supreme Court — for the
right of all citizens to fly the tricolour.
Still, it is noteworthy that last year, the
apex court thought it necessary to direct the
government to set up an inter-governmental
panel, headed by the home secretary, who
surely has better things to do, to come up with
can only envy. Witness Donald Trump’s tweet
tantrums over black footballers kneeling dur-
ing the US national anthem protesting police
brutality against African-Americans. History
has shown repeatedly that overt demonstra-
tions of patriotism tend to morph into militant
nationalism with all its destructive potential
(two world wars being compelling evidence).
In a country where nationalism is being tout-
ed as a valued ethic and is sought to be given
an exclusionary religio-political dimension,
enforced demonstrations of patriotism have
a dangerous, chauvinistic element that the
Indian republic can do well without.

What to expect on the tax front in 2019 Serving the tech-savvy

India is on the brink of overhauling its tax system, implementing the BEPS project and seeing a further power consumers
evolution of the GST despite this being an election year
PRAVEER SINHA will be installed in north and south-west
Delhi. We expect around 1.6 million smart

In view of GST collections falling short of the expected target, the government is expected to strengthen anti-evasion measures
MAULIK DOSHI & JIGAR DOSHI
Recently, the government invited suggestions from
various stakeholders for prescribing the above thresh-
should be in the right spirit and taxpayers should not
be slapped with arbitrary orders.
A
new breed of customers is emerg- meters to become operational in this
ing in the power sector which wants region by 2025.
more than just 24x7 electricity. This The reflex generation — which is envi-
“reflex” generation, born in the digital era, ronment-conscious and looks for cheap,
is more technically savvy and is constant- convenient and sustainable solutions —
ly involved in changing the business land- tries to choose products and services from
scape. How prepared are the utilities to entities with social values that are aligned
empower them? with its own. This on-the-go set of cus-
The relationship between Indian ener- tomers seeks more personalisation and
gy companies or utilities and their cus- wants information or services that can be
tomers is increasingly starting to resem- accessed instantaneously and from any-
ble the more vibrant telecom sector. And where. This trend of more personalised,
this is just the tip of the iceberg. At the convenient and cheap offerings along with
core of the fundamental shift taking place technological innovations in the power
in the Indian power sector are two vital sector has led utilities to continuously eval-
parts — technology and enlightened cus- uate new business models for providing
tomers. Together, they are ushering in a access to electricity and related services.
new era in the sector. Let us examine One of these is the emergence of micro-
them more closely. grids in the country.
The whole digital transformation has Micro-grids bring in more efficiency in
influenced how today’s generation of cus- the power ecosystem and at the same
tomers interacts, thinks, feels and wants. time provide electricity access to the
This has led to a change in the business underserved or unserved population who
landscape from traditional-led to digital- have great aspirations but are bound by
first, which is revolutionising the power resource constraints. These tiny islands of
industry and the way people consume micro-grids, isolated from the main grid,
power. Smart grids, smart meters and dig- help reduce the time taken to electrify

T
he year 2018 witnessed significant tax changes
and reforms across the globe and India was no
exception. The government intensified its steps
towards increasing the tax base and took further meas-
ures to crack the whip on the parallel economy. The lat-
ter half of 2018 saw government take initial steps on
reforming the Indian Income Tax Act with the for-
mation of a committee to draft a new tax law which
promises to be simple and non-adversarial. In this
backdrop, 2019 promises to be yet another year where
some tax challenges will intensify, and some aspects
will get simplified.
Let us look at what can we expect in 2019.
1. Direct Tax Code
The government’s stated position is that it propagates
a simplified and non-adversarial tax regime in India.
The current law is perceived to be complicated,
lengthy, open to interpretation, and was amended
several times since its inception in 1961.
From the initial attempts, it appeared that govern-
ment wanted to introduce this in their current term.
However, the government had to reconstitute the task
force in November 2018. It is currently drafting new
income-tax code. It is now expected that the new code
will be available in 2019. However, when it will be
implemented will primarily depend on the outcome of
the forthcoming general elections.
2. Taxation of digital economy
Businesses still tend to be taxed where they have a phys-
ical rather than a virtual presence and taxation contin-
ues to be built on traditional product and service lines.
The current international tax laws have become out-
dated and are not in a position to tax such digital trans-
actions. The entire world is struggling over taxation of
the digital economy and the lack of international con-
sensus on the issue is creating uncertainty.
However, India has taken a leadership position on
this, and it started by introducing the equalisation
levy on online advertisements in June 2016. The con-
cept of significant economic presence (SEP) was intro-
duced from April 2018 in Indian domestic law, trig-
gering a possible tax exposure for non-residents who,
though situated outside India, have a digital presence
above a certain threshold that is yet-to-be-specified.
olds by August 2018. It is expected that after consid-
ering the recommendations from stakeholders, the
government will prescribe the thresholds sometime in
early 2019. The limits will decide whether only tech
giants are impacted, or even mid-size companies will
be under the net.
3. Critical decisions from Supreme Court
There are certain matters which affect many corpo-
rations, especially MNCs, which are now pending
before the Supreme Court. There is a raging contro-
versy on whether payments made overseas to non-res-
idents/foreign companies for purchase of software
could constitute payments in the nature of “royalty”.
Over 50 appeals have been filed before the Supreme
Court and the matter is now scheduled for hearing in
January. This could be a significant judicial prece-
dent, as it will bring clarity to a highly litigative subject,
hopefully putting the controversy to rest.
Similarly, the issue of marketing intangibles has
gained significant importance in India, where Indian
subsidiaries of global multinational companies incur-
ring advertising, marketing and promotional (AMP)
expenses have been challenged by the revenue author-
ities. The revenue authorities argue that AMP-related
activities add value to the trademark/brand (owned by
the foreign parent) by way of brand building and the
local subsidiary must be compensated by the brand
owner (the foreign parent) either by way of a service fee
or reduced/nil royalty payments. Indian transfer pric-
ing regulations do not provide any specific guidelines
on intangibles, other than defining them as part of
“international transactions”. This issue is also pending
for adjudication before the Supreme Court and the
outcome is expected in 2019. This will have an impact
on cases of various MNCs.
4. Full-fledged electronic assessment
In previous years, the Indian revenue authorities have
implemented electronic assessment on a pilot basis
and then extended its reach to a large number of tax-
payers. It is now expected that e-proceedings may be
implemented for all taxpayers. This would be helpful
in reducing the time and costs involved in the process
and should significantly reduce the discretionary pow-
ers of the tax authorities. However, implementation
5. Tax notices for master file and CbCR
In line with the base erosion profit shifting (BEPS) proj-
ect, India introduced enhanced transfer pricing docu-
mentation in the form of master file and country-by-
country report (CbCR). Both filings were applicable for
FY 2016-17 and the first round of audit is expected to be
undertaken in 2019. MNCs will be keen to understand
the approach of the revenue authorities on these filings.
6. Budget 2019: What can be expected?
Typically, in election year an interim budget is
announced, and the newly elected government comes
out with the final budget. News reports suggest that
this year the government is proposing a full budget in
2019. It will be interesting to see whether it will be a
populist pre-election budget or the government sticks
to the path of fiscal prudence.
7. Goods and Services Tax
The most awaited development on the GST front is the
new compliance mechanism which the government is
slated to introduce on an optional basis from April 1,
2019 and compulsorily from July 1, 2019. It is antici-
pated that the government will take all steps to ensure
smooth implementation to avoid the confusion and
technological challenges faced at the time of initial
stages of implementation of GST. The government
has already extended the deadline for annual return
(GSTR-9) and reconciliation [i.e. GST Audit (GSTR-
9C)], which will now be due by June 30, 2019, and it
would be interesting to watch how taxpayers over-
come the challenges, given the lack of precedent on
this front. Further, in view of GST collections falling
short of the expected target, the government is expect-
ed to strengthen anti-evasion measures, such as spe-
cial audits, making e-way bills robust, deploying data
analytic tools and going after businesses involved in
tax frauds.
With the dawn of 2019, India is on the brink of
overhauling its tax system, implementing the BEPS
project and seeing a further evolution of the GST at the
same time as a general election. This makes 2019 an
exciting and challenging year.
The writers are with SKP Business Consulting LLP
ital technology, now available off the shelf, places (it would have taken longer if done
are allowing power consumers to exercise through extension of the main grid).
better control over their energy consump- Micro-grids, powered by renewable
tion. Customers can now not sources such as solar or wind,
only decide how they pay We have started when connected to larger
their monthly power bills but seeing a conventional grid systems
also how much they pay. fundamental shift improve the reliability of util-
Combined with yet another in how power is ities, which is what today’s
revolutionary idea such as consumed, generation of customers
solar rooftops that are start- requiring utilities wants. For example, an out-
ing to pop up across the coun- to become more age in one part of the grid
try, the power sector in India customer-centric does not have to bring the
is catering to a new breed of in fulfilling those entire system to a halt for
enlightened customer. needs maintenance. And a hospital
Today’s solar rooftops are or a school connected to a
much more than those the earlier genera- micro-grid can then run more smoothly
tion used. They do more than power the without its operations being affected.
water geysers through photovoltaic panels For a power-hungry nation aiming to
sitting on rooftops. Solar rooftop cus- consistently push economic growth at
tomers not only produce their own elec- rates in the vicinity of 8 per cent or high-
tricity, but with the help of digital tech- er, universal availability of power has to
nology, have the power to manage their become a norm. Therefore, use of tech-
consumption and feed excess power back nology to offer smart solutions in the
into the grid, thus making them energy power sector cannot remain a preroga-
producers too. Tata Power has launched it tive of customers only in large cities and
in four cities (Mumbai, Delhi, Ajmer and towns. The central government’s
Bhubaneswar), and will be covering 14 oth- Saubhagya scheme, which aims to make
er cities in the next four months. electricity accessible to every household
Also, customers today don’t stop at just in the country, can move ahead with
asking for better control over their energy more vigour thanks to faster prolifera-
bill from a household budget point of view, tion of energy infrastructure.
but are also concerned about the impact of There is no disagreement on using
their power consumption on the environ- technology in the power sector to meet the
ment. This is why homes and commercial country’s economic and social agendas.
establishments fitted with solar rooftops We have started seeing a fundamental shift
and powered by digital technology are in how power is consumed and demanded
gaining popularity in many parts of the by consumers, thus requiring utilities to
country. The size of this fast emerging become more customer-centric in fulfilling
composite ecosystem in the country, those needs. The business models of util-
known as the smart home market, is esti- ities will undergo massive change in order
mated at $870 million (~62 billion), and to become more responsive, so as to ade-
the average revenue per installed smart quately address the needs of this impa-
home is $97.59 (~7,000). tient generation.
Recently, Tata Power-DDL rolled out
its smart meter project in the National The writer is chief executive officer and
Capital Region with 250,000 devices that managing director, Tata Power

> OTHER VIEWS

Dark side of the moon A bad start Women make history
China’s successful mission will greatly Stalling pensions for those jailed during A contest of social forces is being
advance knowledge of earth’s satellite Emergency reflects poorly on MP govt played out through politics
China joined a select group of countries with successful Any newly-elected state gov- ing the Emergency under the Two women in their forties, around Sabarimala is unlikely
missions to the moon, when its spacecraft, Chang’e-4, suc- ernment, especially one which draconian Maintenance of Bindu and Kanakadurga, to end with the two menstrual-
cessfully made a landing at ‘10.26 on January 3’, according has come to office months Internal Security Act and made history early on age women using guerrilla tac-
to the China National Space Administration. It landed at a before a general election, will Defence of India Rules is prob- Wednesday when they tics to reach the shrine. Since
spot on the moon’s far side, the Von Kármán crater, which have two broad areas of con- lematic… The optics of the breached a local Hindu taboo the temple priests conducted a
is untouched by earlier missions from earth…Among other cern: First, it must address Kamal Nath government’s of not permitting females “purification” ceremony after
things, the mission could pave the way to setting up a radio issues of administration and decision signal a disturbing below the age of 50 to offer Bindu and Kanakdurga gate-
telescope on the far side of the moon. Considering that governance, of getting down thought process. Mere weeks prayers at the famous Ayyappa crashed the sanctum sancto-
earth is right next door to the moon, we know precious lit- to the nitty-gritty of actually after winning, the government shrine at Sabarimala in rum, a new element in the
tle about it. Its formation and early evolution present mys- fulfiling its poll-time promises, appears to be focused on what Kerala…Not unexpectedly, the debate is whether they should
teries which, if understood, could guide us in planetary or at least be seen as attempt- the BJP in the state has termed two women’s brave action has be hauled up for contempt of
studies, and help in understanding exoplanets. The near ing to do so, in as short a time- “political vendetta”. Given that set off social turmoil in the the Supreme Court order and
side, which faces earth, has dark patterns; the far side, frame as possible. Second, it the chief minister first came state, with the Sangh Parivar violating untouchability laws.
turned away, is marked with circular spots that are craters must set the political narrative into limelight during the and the BJP in the forefront of Prudence demands that this
formed by meteorite collisions. The moon’s near side is in the state and signal the kind Emergency, this is a narrative the backlash of the conserva- extreme course be eschewed.
believed to have a thinner shell, so that when meteorites of political milieu it will seek to that can easily distract the gov- tive folk — including women What we are witnessing is a
bombarded it they cracked its shell, releasing lava which create. On both counts, the ernment in the crucial first few — who defer to the popular contest of social forces, being
gushed out and covered traces of the impact and left dark decision of the Congress gov- months of its tenure. CM belief that Lord Ayyappa at played out through politics. All
patches. Being thicker, the far side did not face such an “soft landing” on the moon. But beyond underlining China’s ernment in Madhya Pradesh Kamal Nath must focus on Sabarimala is worshipped in points must be made through
erasure and bears the marks of the crater impacts. This technological advances, Chang’e-4 could herald a new chap- and Chief Minister Kamal issues that urgently require his his celibate state. This has, by social action, avoiding vio-
mission could verify these theories and discover the reason ter in lunar exploration. Nath to put on hold the attention. custom, prevented women of lence and extreme tendencies.
behind these dichotomies. China has now joined the U.S. monthly pension given to menstrual age from entering
and the former USSR as the only countries to have made a The Hindu, January 4 those who were detained dur- The Indian Express, January 4 the temple… The debate The Asian Age, January 4
12
>
K P S MUMBAI | 6 JANUARY 2019 1

UTMT: Transforming the lives of organic honey farmers

ANJULI BHARGAVA
New Delhi, 5 January
As an enterprise, Under the
Mango Tree (UTMT) had an
unusual genesis — the name
came years before the organisa-
tion. In 1994 Vijaya Pastala was
working with women’s groups
on behalf of DFID in
Maharashtra’s earthquake-rav-
aged Latur district. She often
held meetings with the women
under a mango tree. Along with
a few lessons she learnt about
giving out grants and loans to
self-help groups, her time
“under the mango tree” stuck in
her mind.
Today, Under the Mango
Tree, a brand that Pastala set up
in 2008, sources high-quality
organic honey from farmers and
farmers’ cooperatives, ensuring
that the farmer gets a fair price
for his produce. In the process, it
also offers the urban consumer
a range of regional varieties and
flavours in honey. A hybrid
enterprise comprising both a
for-profit and a not-for-profit,
the brand sells 65,000 kilos of
honey a year working with any-
where between 4,000-5,000
farmers. It is available in 22
cities in India across 700-plus
stores. It also sells online,
through sites like Amazon, Big
Basket and so on.
Pastala says her journey to
the setting up of UTMT has been
marked with learning experi-
ences. After she left Gujarat and
returned to Mumbai in 2006-07,
Pastala, an MIT graduate, won-
dered what to do next. Born of
an Eurasian mother and a
Telugu father, she had led an
unconventional life. Her interest
was in rural India and she had
had stints with the Aga Khan
foundation, DFID, Tata Trusts,
among others. For some time,
she worked with the Himachal
Pradesh government helping it
reframe its forest policy. That
was when she was exposed to a
variety of flora and fauna and
also to honey bees. Visiting a
friend’s apple orchard in
Narkhanda, she learnt that bee-
keepers were invited into apple
orchards to help in pollination
and increase production. The
experience stayed with her
when she got back to her urban
environment in Mumbai.
Her career in the develop-
ment sector had taught her
something else: the limitation of
grants and donations. Not only
was one limited by the funds in
terms of scaling, she herself had
been instrumental in disbursing
a number of grants and loans
without doing any real due dili-
gence. She was convinced that
one had to have a product that
was saleable and marketable,
one that could stand on its own
two feet and not on the strength
of the wider community it bene-
fited. “People should be willing
to pay for the product itself, and
not because they consider it
charity,” she says.
Then in 2008 December,
Pastala participated in a gour-
met food show in Mumbai
where she showcased various
types of honey, which she
sourced from her NGO network,
to see if people were interested
in this. Soon after this, she
founded UTMT.
Pastala counts many learn-
ings as she changed from what
she calls an “NGO type” to a
businesswoman.
For one, she realised that
running an enterprise and run-
ning a profitable enterprise were
two very different things. Unlike
in the NGO sector, where dona-
tions, grants and loans are given
out quite easily, raising equity
capital or getting funded by
investors involves a certain
degree of accountability. “One
learns the discipline required,
especially with financial mat-
ters and how it is critical to bring
in all the efficiencies possible to
make the business viable,” she
says. In the for-profit part of her
business, Pastala has raised two
rounds of funding through
Acumen and Firstlight Ventures
and is currently in the process of
raising the third round.
At present, the consumption
of honey is quite low in India as
compared with most countries.
For example, India consumes
one-and-a-half teaspoons of
honey per head per year where-
as in Germany the correspon-
ding figure is one-and-a-half kg.
Hence, there is considerable
scope for growth in the market
for honey here, although
changing habits is never easy.
Pastala now has nine vari-
eties of honey under the UTMT
brand and is yet to tap the export
market. However, by and large,
investors prefer a more diversi-
fied range of products, she says.
Vineet Rai, founder of
Avishkaar-Intellecap Group,
argues that the UTMT model is
“difficult to scale” and hence
funding it is not easy.
Yet, he says the firm has had
a real impact in improving lives
of farmers and could be “trans-
formational” if longer term
funding could be made avail-
able to it. “UTMT’s journey has
made me rethink about limited
life impact investing,” says Rai.
Paul Basil, founder and CEO
of Villgro, which supports entre-
preneurs at later stages and also
supported Pastala, adds that a
consumer product like this
requires considerable invest-
ment and resources in differen-
tiated branding, a strong distri-
bution push, working capital
and a powerful sales engine.
Pastala feels that perhaps the
most important lesson that she
has derived from her UTMT
experience is that it is not easy to
run a for-profit and a not-for-
profit under the same umbrella.
She says that it is tough to merge
the two philosophies and ethos
while trying to match the pace of
growth of the two verticals. But
then Pastala has never been
short on perseverance. This bee
is firmly in her bonnet.

Sound regulation better for PM Modi slams Congress for

playing to middlemen’s tune
development of NBFCs: Garg NIRMALYA BEHERA
Bhubaneswar, 5 January

Given lack of representatives, whom to talk to in the sector remains a challenge for govt On the heels of a heated duel in
Parliament on the Rafale defence
SUBRATA PANDA managed — not only in regulation deal, Prime Minister Narendra Modi
Mumbai, 5 January WHAT HE SAID terms but also in terms of infor- launched an attack on the Congress
mation and data collection, inter- for allegedly working at the behest of
| There is no conflict between

B
atting for sound regulation
of the non-banking finan-
cial company (NBFC) sector
in the times of instability, Union
economic affairs secretary
Subhash Chandra Garg said regu-
lation is necessary for develop-
ment, but a regulation that throt-
tles is not the proper way to go.
“We need to nurture this
(NBFC) story, protect, promote and
develop it. At the same time, we
have to ensure that this gets regu-
lated,” said Garg.
“I don’t see a conflict between
regulation and development.
Sound regulation is necessary for
better development. Regulation
that throttles is not proper regula-
tion,” he added, at the NBFC
Summit organised by the
Confederation of Indian Industry
(CII) in Mumbai.
However, he stressed that sys-
temically important NBFCs, which
are about 276 in number and have
85 per cent of credit assets in the
sector, need different regulations
than the other 9,000-odd NBFCs.
Moreover, investment NBFCs also
need a different approach.
With 11 public sector banks
READERS’ PARADISE
Visitors sift through books on display at the World Book Fair 2019, held at Pragati Maidan in New Delhi, on Saturday
regulation and development
| Regulation that throttles is not
proper regulation
| Systemically important NBFCs
need different regulations than
the others
| Depending on deposits for funds
won’t serve any purpose; NBFCs
need to consider debentures,
bond financing
| IL&FS fiasco has made the
government realise there is a large SUBHASH CHANDRA GARG
gap in the way NBFCs are managed Economic affairs secretary
under the RBI’s prompt corrective
action framework and liquidity
drying up for these shadow banks,
there has been a lot of discussion
on how NBFCs need to look at their
funding issues more maturely.
Garg said depending on
deposits for funds won’t serve
NBFCs any purpose. They need to
look at debentures and bond
financing as the future source of
funding.
Institutional investors like
insurance companies, pension
funds, among others, have so far
been lukewarm to NBFCs.
Therefore, they need to tap into
that.
Moreover, a large pool of sav-
ings that are available globally are
pension funds, and sovereign
wealth funds, among others. This
is another area that deserves atten-
tion, so that they get excited about
the NBFC space.
The IL&FS fiasco has made the
government realise that there is a
large gap in the way NBFCs are
action with the Centre or regula-
tors. Garg said the government
doesn’t even know who to talk, to
if it wants to talk to NBFCs. There
are no organisations that represent
NBFCs. There are diverse cate-
gories but no differentiated enti-
ties. There is no data regarding
NBFCs.
Moreover, he said, the ambi-
tion of the non-banks should not
be to become banks as the NBFC
space has its own characteristics,
and become larger than banks
instead.
According to a recent report by
rating agency Icra, the retail cred-
it for NBFCs stood at ~8.3 trillion as
of September 2018. It has regis-
tered a 25 per cent growth year-
on-year in H1FY19.
However, the prevailing liq-
uidity scenario is likely to slow
down its growth to 16-18 per cent
during FY19. In addition, the
incremental cost of funds for the
sector has increased by about
100-125 bps since H1FY2019, and
this will have an impact on their
earnings profile, moderation in
portfolio growth, said rating
agency Icra.
PHOTO: DALIP KUMAR
middlemen while in power.
Addressing a jam-packed rally at
Baripada, Modi assailed the Congress
over Christian Michel, dubbing him
‘Michel Mama’ or ‘Michel Uncle’ of Prime Minister Narendra Modi visited Odisha for the second time in a
the Congress. Michel is an alleged go- fortnight to set in motion projects worth over ~4,500 crore PHOTO: PTI
between in the AgustaWestland VVIP
chopper case. Modi said in a sardonic tone. three highway projects, and inaugu-
Alleging that Michel had deep He went on to say that the inves- ration of a multi-modal logistics park
liaisons with top Congress leaders tigative agencies would probe all (MMLP) and railway projects.
and ministers, the Prime Minister irregularities of those who tried to Modi commended defence min-
said: “The middleman (Michel) had save the middlemen. ister Nirmala Sitharaman for her spir-
information about every file move- Modi was in Odisha, his second ited response to the Opposition’s
ment in the Prime Minister’s office- visit to the state in less than a fort- barbs on the Rafale deal.
perhaps more information than the night, to set in motion projects worth “I commend Raksha Mantri
prime minister himself. He even had over ~4,500 crore. The projects Nirmala Sitharaman for showing the
the details of the deliberations of the include dedication of the Balasore- people the real face of those who
Cabinet Committee on Security.” Haldia-Durgapur section of the deceive the country, those compro-
“I do not understand whether the Paradip-Haldia-Durgapur LPG mising the national security for poli-
Congress was running the govern- pipeline by Indian Oil Corporation, tics, and those who insult the revered
ment or its Michel Uncle’s court,” laying of the foundation stone for Parliament with their immaturity.”
Cong looks at ‘Jangipur model’
in UP to help grand alliance
ARCHIS MOHAN Backward Classes vote in UP, claim
New Delhi, 5 January Congress strategists. The Congress
can eat into the BJP’s upper-caste
The Samajwadi Party (SP) and vote bank, thus helping the alliance
Bahujan Samaj Party (BSP) seem to beat the BJP in more seats.
have snubbed the Congress by keep- A pre-poll alliance with BSP
ing it out of their putative grand could hurt the Congress’s support
alliance for the 80 Lok Sabha seats of base among upper-castes, OBCs, and
Uttar Pradesh. However, leaders in the aspirational urban voters, espe-
the Congress and the SP say the cially if the BSP performs well in
Opposition parties are working on a 2019 and Mayawati emerges as a
plan to defeat the Bharatiya Janata prime ministerial candidate. The
Party (BJP). party is apprehensive the BJP will
SP President Akhilesh Yadav and exploit this.
BSP chief Mayawati met in New Two reasons have prompted a
Delhi on Friday evening to seal a change in the Congress’s attitude:
deal. The two parties will contest 37 SP President Akhilesh Yadav met First, it feels that its good perform-
seats each. Ajit Singh-led Rashtriya BSP chief Mayawati in New Delhi ance in Chhattisgarh, Madhya
Lok Dal will contest three seats — on Friday, to seal a deal Pradesh and Rajasthan was helped
Kairana, Mathura, and Baghpat. One by urban voters as well as OBCs hav-
seat will go to the Nishad Party. The Dalit vote base had been eroded over ing shifted their loyalties. Second, is
alliance will not field any candidates successive elections in Rajasthan its disastrous alliance with the SP in
on Gandhi family pocket — Amethi and MP. In 2008, the BSP had won 2017 UP Assembly elections.
and Rae Bareli. seven seats in MP; it went down to For the seats where the Congress
The SP-BSP alliance keeping out four in 2013, and two in 2018. Its vote hopes to win in UP, a “Jangipur mod-
the Congress could adversely affect share declined from 8.97 per cent in el” is being explored. The SP-BSP is
leaders close to Rahul Gandhi, such 2008 to 5 per cent. In Rajasthan, the being persuaded to field weak can-
as Jitin Prasada, R P N Singh, Nirmal BSP vote share has increased by 0.63 didates in these seats. The model
Khatri, P L Puniya, and Annu per cent to 4 per cent in 2018 from refers to the 2004 Lok Sabha polls for
Tandon. They had all won in the 3.37 per cent in 2013, but is much the Jangipur seat in West Bengal,
2009 Lok Sabha polls. lower than the 7.6 per cent in 2008. where the Trinamool Congress and
Congress leaders, however, claim The Congress analysis also Communist Party of India (Marxist)
this was a plan, and after analysing reveals that the BSP hurt the BJP in fielded weak candidates to help
the results in Chhattisgarh, Madhya more seats than the Congress in Pranab Mukherjee of the Congress.
Pradesh (MP) and Rajasthan, they these two states. The BSP’s alliance The Congress also believes that in
had arrived at the decision that a with Ajit Jogi’s Janata Congress the Hindi heartland outside UP and
pre-poll alliance with the BSP might Chhattisgarh benefitted the former Bihar, it and the BJP will be key play-
actually hurt its chances. more than the latter. ers. The BSP’s vote share is bound to
According to the Election An SP-BSP alliance would better go down. The party wants to regain
Commission data, the BSP’s core consolidate the Dalit-Other its upper caste vote base.

Growth in Indian students going to the US likely to fall further in 2019

Hostile environment towards outsiders a major reason for dip, say experts
VINAY UMARJI
Ahmedabad, 5 January
The trend of declining growth in the
number of Indian students flying
abroad to study in the US, is expected to
continue in 2019, say overseas
education players. Even as more and
more Indian students are going to the
US for studies, the growth rate has been
falling since couple of years, thanks to
the economic and political uncertainty
in the host country.
With most of the applications having
been filed by December, January is
expected to see varsities reverting with
confirmation of admission, which goes
on till April. With the likelihood of a
regime change in the US after the next
presidential elections, overseas
education providers and education
experts believe 2019 could see a final dip
in number of Indian students going to
the US before rising again next year.
The uncertain environment for
foreigners under the current regime in
the US may have contributed to the dip,
some believe.
“Students not only want to study in
the US but also want to work there — at
least for few years. If students are
uncertain of employment or feel the
environment is hostile, then they will
reconsider the decision to pursue
higher studies in the US. So the policy
drift in the incumbent US government
has affected the student outflow from
India. This is despite the US economy
having bounced back in recent times,”
said Narayanan Ramaswamy, Partner
and Leader for Education and Skill
Development Sector, KPMG India.
As a result this — coupled with
feedback from students already
studying in the US as well as the
improving job market in India — growth
in number of students going to the US is
set to fall this year as well, before rising
again in the near future.
“Lot of Indians are getting adverse
feedback from people in the US who had
applied in 2015-16 and are now set to
graduate. People who apply in 2019 will
get in college by 2019-20 and graduate
by the time new regime comes in. Since
technology and consulting sectors in
the US cannot do without India, there is
a hope that things will change if a new
regime comes in. Hence, we may see a
dip in growth of Indian students going
to US this year, followed by a resurgence
next year,” said Arun Jagannathan, CEO
and founder of CrackVerbal, an overseas
STUDENTS IN US: WHERE THEY COME FROM KPMG’s Ramaswamy said: “There
have been reasons like proactive
Rank Place of origin 2017-18 2016-17 % of total % change measures from countries like Canada
1 China 3,63,341 3,50,755 33.2 3.6 and Australia, which are attracting the
pool of talent from India, and other
2 India 1,96,271 1,86,267 17.9 5.4 global destinations. In India, with some
3 South Korea 54,555 58,663 5.0 -7.0 recent developments like availability of
good liberal arts, engineering and other
4 Saudi Arabia 44,432 52,611 4.1 -15.5 professional education through
5 Canada 25,909 27,065 2.4 -4.3 emerging private universities, as well as
online education, students are also
World total 1,094,792 1,078,822 100.0 1.5
having the option of staying back and
SOURCE: 2018 OPEN DOORS REPORT studying in India.”
According to Jagannathan, Canada,
education service provider. According students went to the US, as against Australia, Ireland and Germany are
to the recent Open Doors International 350,755 Chinese students, said the seen as safer with lesser nationalistic
Education Report for 2018, growth in report. India, at 18 per cent, continues to moods and wider embracing of foreign
Indian students going to the US had be the originating nation for the second- students. Further, with more number of
slowed down from a 12 per cent growth highest number of foreign students institutes accepting GMAT scores,
in 2016-17 over the previous year, to 5 per after China’s 33 per cent. students who having trained for studying
cent in 2017-18 over the previous year, Analysts point to the emergence of abroad would also want to stay back.
with 196,000 students going to the US. ‘better options’ as destinations for
In 2016/17, around 186,267 Indian Indians for the dip in growth to the US. More on business-standard.com