NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO.

187

TUESDAY, AUGUST 4, 2020

LOCAL LOCKDOWNS SHRINK MARUTI, HYUNDAI LOOK
LIVEMINT.COM
BUSINESS ACTIVITY IN JULY uP1 TO RAMP UP PRODUCTION uP1
BUSINESS OF LIFE
Daily articles on lifestyle,
sports, leisure, technology,
and health

To get your MINT copy, give a missed call on

7039035039 or visit www.mintreaders.com
or write to us at subscription@livemint.com
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 187

TUESDAY, AUGUST 4, 2020

LIVEMINT.COM

SENSEX NIFTY DOLLAR EURO OIL

GOLD
36,939.60 10,891.60 ₹75.01 ₹88.07 ₹53,615.00 $43.59
667.29 181.85 ₹0.19 ₹0.17 $0.29

mint primer
QUICK EDIT
The dollar might The PMI
be falling, but its letdown
reign is not over Automobile sales data for July
put out by companies over the
weekend had raised hopes that
BY KARAN BHASIN an economic recovery may be
near. Those hopes looked
The US dollar has registered its worst performance in a decade by
dropping nearly 5%. This has resulted in fresh speculation regarding somewhat forlorn on Monday,
the end of the greenback’s hegemony as the default international after IHS Markit released its
currency. Mint explores the issue in detail. Purchasing Managers’ Index
figure for the manufacturing
Greenback slump sector in India. It showed a dip
The extent of decline in the US dollar’s value over the last month has been driven to 46 in July from 47.2 in June.
by an increase in euro’s worth. The EU’s strong political leadership has renewed A reading below 50 indicates a
investor confidence in the region, causing the euro to gain. contraction, and the latest
US Dollar Index - Monthly Adjusted Close number marks a fourth straight
100
99.38 month of it.
99 With our lockdown gradually
98 being lifted, commerce was
97
expected to pick up. But India is
also seeing a sharp rise in covid
96
cases—we are now recording
95 the second-highest daily case
94 93.38 count in the world after the US.
93
As new hotspots emerge, local-
1 Sep 2019 2 Aug 2020 ized lockdowns have been
Source: Yahoo Finance enforced. But it’s not just the
physical disruption of the pan-
What are the reasons Doesn’t it gain during demic that has hurt economic
1 for weakness in dollar?
The recent decline in the US dollar
2 a downturn?
Generally, during a period of an
prospects. Uncertainty has
warped private spending and
even as the treasury bills’ prices economic slump, the US dollar investment decisions. Rural
remained close to highs indicate gains as investors look for safe India remains a relatively
the expectation of low growth in assets. Conservative investors such bright spot, but the rest of our
the foreseeable future because of as central banks typically use economy is still reeling from
the ongoing coronavirus dollar reserves during economic the crisis we’re beset with. Most
pandemic. There are concerns that downturns to provide support to
factories are now allowed to
a fresh round of monetary their domestic currencies in case
stimulus and the economic impact of volatility in the foreign operate, but supply is pointless
of the pandemic would result in exchange market. This was without the requisite demand
interest levels remaining low for a observed during the 2008-09 for manufactured goods. Alas,
significant period of time. Many financial crisis when the dollar August may not be much better.
investors have their doubts gained, even as investors rushed
regarding the inflationary impact for safe assets. The greenback
of such a stimulus and have moved advanced even during the early
towards other currencies and gold. days of the covid-19 pandemic as
The rationale is that relatively
safer assets will now perform the
investors rushed for both the US
dollars and the US 10-year
MINT METRIC
function of storing value as well. treasuries as safe assets. by Bibek Debroy

Inside your jeans, when you wake,

3 Why is it that the US dollar is
not a safe asset anymore?
A decline in the US dollar’s value illustrates
If you find a cobra snake!
optimism regarding global economic
From Mirzapur, a true story,
growth. A decline in the value shows the After seven hours in purgatory,
confidence of investors in parking money
in riskier assets. The inherent weakness of
Lovekesh was rescued, all quake and shake.
the US economy is driving investors
towards other countries, which have
contained the pandemic and its economic
impact. QUOTE OF THE DAY
A number of vaccines are now
4 What about the gain
in gold and the euro?
There has been a steady increase
5 Is this the end of the
US dollar’s hegemony?
Recent political developments
in phase three clinical trials and
we all hope to have a number of
in the price of gold as investors have undermined the credibility of effective vaccines that can help
rushed to buy the safe asset. There US institutions to provide for a
is a renewed demand for gold bars stable global currency, but the US prevent infection. However,
and coins, which has caused an dollar’s hegemony is far from over. there’s no silver bullet at the
increase in the price of gold over Moreover, most central banks hold
the last few weeks. However, a bulk dollar reserves for intervention in moment—and there
of the US dollar’s decline has been foreign markets. The dollar is likely might never be.
against the euro, which has gained to be an integral part of the global
as much as 10% since May. The financial system, at least for now.
reason is the EU’s strong policy However, the inability to respond
response to covid, which is an to covid has eroded the credibility
outcome of political, institutional of several institutions, which poses TEDROS ADHANOM
robustness provided by EU leaders a long-term threat to the US dollar. GHEBREYESUS
in contrast with the polarized Karan Bhasin is a Delhi-based WHO-DIRECTOR
political environment in the US. policy researcher. GENERAL

m MINT SHORT

Bitcoin surpasses $12,000 then slides in minutes

REUTERS
BLoomberg confirming a new tactical uptrend,”
feedback@livemint.com according toRob Sluymer, technical
strategist at Fundstrat Global Advisors

B
itcoin reminded investors of both
its promise and peril in trading
this weekend.
The world’s largest cryptocurrency
rose to $12,112 in trading just after mid-
night New York time Sunday, its first
foray above $12,000 since August 2019,
according to pricing compiled by
Bloomberg. But it plunged shortly there-
after—30 minutes after the high, it had
dropped to $10,638. It was up 0.6% to
$11,159 as of 12:15 am Monday.
Bitcoin had fallen as low as $4,904 in
mid-March.
“Clearing resistance at
$10,000-$10,500, which coincided with
the downtrend line from the late 2017
highs and first-quarter 2020 highs,
established a higher high for Bitcoin
Llc. Bitcoin has rallied strongly in recent
days after rising above $10,000. It had
fallen as low as $4,904 in mid-March
around the height of coronavirus-fueled
market uncertainty, but by mid-May
was back around $9,000.
Other cryptocurrencies rallied as
well. The Bloomberg Galaxy Crypto
Index gained 6% to $532.64. Ether rose
2.3% to $381.95, capping a torrid rally
that has seen it advance in 13 of the last 14
sessions in data compiled by Bloomberg.
 FLIP SIDE
U RA L ET
Y OS V
N E W m
Mint Lite
A daily wrap of news and views, opinions and talking points to start your day

THE PANDEMIC is allowing governments worldwide to track people more closely than before due to the rapid digitization
of personal data, Alibaba Group’s Joseph Tsai warned on Monday. Digitization of information has accelerated in the past
few months as countries try to trace people to curb covid-19, he said at the virtual launch event of Singapore Fintech Festival.
Singapore is planning an online and physical event in December, where participants meet at key physical locations and
connect to an “online city”. For the rest of the national and world news, here’s Mint Lite.

WORKOUT IN A MASK
GYMS AND yoga studios are set to open from Wednesday after
months of closure due to the covid-19 outbreak, and the health
ministry on Monday released standard operating procedures
for them. Masks or face shields are mandatory, equipment has
to be spaced out, people have to maintain six feet distance,
workout sessions have to be staggered and the premises have to
be disinfected regularly. Meanwhile, Union law minister Ravi
Shankar Prasad went into isolation as a precaution because he
met home minister Amit Shah, who has tested positive for
covid-19, on Saturday. Six staff members of Karnataka chief
minister B.S. Yediyurappa’s office have tested positive for the
virus, a day after he was admitted to hospital with the infection.
On Monday, India’s case count crossed 1.8 million, while global
cases surpassed 18 million on Monday, with the pandemic now
adding a million infections every four days.

COVID TOLL ON DIESEL SALES

SALE OF diesel has fallen sharply across India, as various states
imposed regionalized lockdowns to curb the spread of the novel
coronavirus. The drop in demand in India could have a follow-
on effect on world markets. Diesel sales of Indian Oil, Bharat
Petroleum and Hindustan Petroleum, the three biggest oil
marketing companies, dropped 13% in July from the previous
month. Their sales are down 21% from a year ago, Bloomberg
reports. It’s a reversal from a few months ago when rising diesel
sales were seen as evidence the economy was on the mend after
one of the strictest lockdowns in the world. Diesel demand does
tend to fall at this time of the year due to the monsoon, but this
decline exceeds the 8% month-on-month drop at the same time
last year. India is the world’s third largest crude importer, and a
drop in demand here will have an effect on global sales at a time
when oil producing countries are returning to pumping more.

INDIA STEPS ON THE GAS Fossil fuel imports by Indian utilities

Coal Gas (LNG) Quarter-wise imports over the years
INDIAN POWER plants used the most liquefied 40
natural gas (LNG) in the last three years in the quarter 39.21
ended June. The cost of importing LNG is not much 35
higher than coal now as covid-19 puts a squeeze on the
30
world economy. Power producers say the trend is
20.16
likely to continue until at least September, Reuters 25
reports. Gas consumption by India’s power plants rose
11.7% to 104.83 million standard cubic metres per day 20
(mmscmd) in the three months to June compared to
15
the same period last year, data from Central Electricity
Authority showed. The increased use of gas comes as 15.19 10.86
10
India’s overall electricity demand is expected to fall Q2 2017 Q2 2020
this year for the first time in decades. Coal-fired gene- Note: Coal imports in million tonnes. Gas imports in MMSCMD
(million metric standard cubic metre per day)
ration is declining and imports of coal by power plants
Source: Central Electricity Authority, Reuters
fell to the lowest in seven years in the June quarter.
SATISH KUMAR/MINT

RED ZONES AND VIOLENCE

THERE’S BEEN a rise in cases of domestic violence during
enforced stays at home during the pandemic, but a new paper
draws an even stronger line between the two. Researchers from
University of California found that districts with the strictest
lockdown, or red zones, in India, recorded a bigger rise in
domestic violence than others. Published by US National
Bureau of Economic Research, Unintended consequences of
lockdowns: Covid-19 and the shadow pandemic by Saravana
Ravindran and Manisha Shah, uses data from National Comm-
ission for Women and maps it against the government’s red,
orange and green covid containment zones. They found red
zone districts recorded a 131% increase in domestic violence
complaints compared with green zones. The figure for cyber-
crime complaints was 184%. Rape and sexual assault complaints
declined more in red zones.

COURTESY: ESO

SEE A SPACE BUTTERFLY

IT’S A splash of blue, purple and red shaped like a butterfly in
outer space—and it’s the first time European Space Observat-
ory’s Very Large Telescope in Chile caught a photograph of it.
The stunning space butterfly is actually a planetary nebula, or a
bubble of gas that forms around an ancient star that hasn’t yet
exploded. It’s named NGC 2899, and it’s 3,000 to 6,500 light
years away from Earth in the constellation Vela. As the parent
star collapses, it releases gases that ultraviolet radiation heats to
temperatures upwards of 10,000 degrees. The superheated
hydrogen forms a reddish halo around the oxygen, which glows
blue. It’s rare for planetary nebulae to form this kind of shape.
This one has two central stars—as one reached the end of its life
and cast off its outer layers, the other interfered with the flow of
gas, forming the shape. The “butterfly” will disappear in 1,000
years—which is forever for us but not very long for the universe.

Curated by Shalini Umachandran. Have something to share with us?

Write to us at businessoflife@livemint.com or tweet to @shalinimb

PEANUTS by Charles M. Schulz

 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 187 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 18 PAGES

REGULATOR PULLS UP SPICEJET GYMS, YOGA CENTRES TO RESUME

TUESDAY, AUGUST 4, 2020
LIVEMINT.COM
OVER PROMOTIONAL OFFER uP3 OPs WITH STRICT NORMS uP6

Cipla’s India
Local lockdowns shrink boss, two top
DON’T MISS
CURBS ON FOREIGN
WORKERS IN US
execs resign
business activity in July
US President Donald
Trump has barred federal
agencies from replacing
in shake-up green card holders with
workers on H-1B visas, in
Leroy Leo an executive order
Curbs imposed by states put the brakes on manufacturing at the national level leroy.d@livemint.com
NEW DELHI
m MINT GRAPHITI CHINA FIRMS TO
Asit Ranjan Mishra

C
ipla Ltd witnessed a SPEND BIG IN IPL
asit.m@livemint.com
NEW DELHI
GROWTH PANGS Large NBFCs such as Shriram Transport Finance are relatively better
off than the rest but may not be completely free of stress. MINT
spate of senior man-
agement exits on Mon-
Chinese brands are
expected to spend ₹700
The Purchasing Managers’ Index (PMI) for manufacturing declined slightly in July to 46 from 47.2 in June, data day, with Nikhil Chopra, the crore to advertise during

I Shadow banks scout

ndia’s manufacturing out-
put in July contracted at a
faster pace than in June,
indicating that sporadic
local lockdowns at a time
of muted demand are hurting
business activity at the
national level, potentially
delaying economic recovery.
Data released by analytics
firm IHS Markit showed that
Purchasing Managers’ Index
released by analytics firm IHS Markit showed. company’s chief executive of the Indian Premier
India business, and two others League 2020, which
60
REVIVAL STUMBLES resigning after more than two begins in September. >P5
55 PMI
ON LOCAL CURBS
SOME HICCUPS
BUSINESSES were struggling
for funds, mergers decades at the drugmaker.
The other two executives
were Nikhil Lalwani, head of PM MODI, GHANI
50
51.8 46 to obtain work as some clients Shayan Ghosh & tion for some non-banking
India prescription business,
and Kunal Khanna, cluster
HOLD TALKS
were affected by lockdowns Prime Minister Narendra
45 Gopika Gopakumar financial companies (NBFCs), head of chronic and emerging Modi and Afghanistan
FRESH HURDLES especially the better-rated business development. President Ashraf Ghani
40 Note: A figure of above 50 EMERGENCE of new hotspots led MUMBAI ones, those with inferior asset “They have served signifi- discussed the security
indicates expansion, while a
sub-50 print signals contraction. authorities to impose strict local quality may find it tough to sur- cant tenures in Cipla. We situation in Afghanistan

(PMI) for manufacturing
declined slightly in July to 46
from 47.2 in June. A figure
above 50 indicates expansion,
while a sub-50 print signals
contraction.
Eliot Kerr, an economist at
IHS Markit, said the survey
results showed a “re-accelera-
tion of declines” in the key
indices of output and new
orders, undermining the trend
towards stabilization seen over
the past two months.
“Anecdotal evidence indi-
cated that firms were strug-
gling to obtain work, with
some of their clients remain-
ing in lockdown, suggesting
that we won’t see a pickup in
activity until infection rates
are quelled and restrictions
35
30
25
April 2019
Source: IHS Markit
can be further removed,” he
added.
More than two months after
imposing a harsh nationwide
lockdown to curb coronavirus
infections, the central govern-
ment lifted many restrictions
on 1 June, allowing most busi-
ness activities to resume; how-
ever, new disease hotspots
emerged in the southern and
eastern Indian states soon
after, prompting local authori-
ties to put fresh mobility
July 2020
restrictions, disrupting busi-
ness again.
During an interaction with
journalists on Saturday, Union
finance minister Nirmala
Sitharaman said a complete
picture about growth recovery
is yet to emerge.
“As long as the pandemic is
active, we are talking about a
situation full of uncertainty,”
she added.
Indian Oil Corp. Ltd (IOC),
the country’s largest fuel
curbs, thus disrupting biz activities
CASE IN POINT
INDIAN Oil’s capacity utilization
was 93% in early July, but is down
to 75% amid fresh limitations
SARVESH KUMAR SHARMA/MINT
retailer, on Friday said its
capacity utilization, which had
increased to around 93% in the
first week of July, has fallen to
75% after many state govern-
ments imposed fresh curbs.
Madan Sabnavis, chief
economist at Care Ratings,
said the latest decline in PMI is
indicative of the fact that sup-
ply chains have not yet been
cemented and the localized
TURN TO PAGE 11
I
ndia’s non-bank lenders, vive without rescue. deeply value their contribu- in a call on Monday. >P14
staring at ₹1.51 trillion debt For instance, InCred, an tion, respect their professional
repayments due in the next NBFC backed by global private aspirations and wish them all
six months, are rushing to raise equity firms, including Invest- the best,” Cipla said in a state- ‘COVID IS A CRISIS
fresh equity and corp, is seeking a ment. FOR AVERAGE COs’
pursuing mergers Non-banks merger with the The exits had been in the
Covid-19 has pushed all
with bigger peers lenders are wholesale NBFC works for a few months and average organizations to
to avert defaults, rushing to raise business of PE were due to personal reasons, review everything, says
as the coronavirus fresh equity and firm KKR. Srei two company officials said. Ronnie Screwvala, co-
pandemic dark-
pursuing mergers Infrastructure “Nikhil Chopra has been founder of edtech startup
ens the outlook Finance, a promi- with the company for around upGrad. >P7
for the sector that with bigger peers nent Kolkata- 24 years. He has played his
has struggled to avert defaults based non-bank innings,” one of the officials
since the collapse lender, is looking said, adding that Lalwani was BFHL OFFLOADS
of Infrastructure to merge with a transitioned out of the US 20.95% STAKE
Leasing and Financial Services bank. In a recent interview, business into India in January
Bandhan Bank said it has
Ltd (IL&FS) nearly two years Hemant Kanoria, chairman, but he wanted to stay back met the promoter holding
ago. Srei Infrastructure Finance, because his family is based norms of RBI after its
While the Reserve Bank of said it is open to merging with a there. parent BFHL sold 20.95%
India’s Targeted Long Term bank if permitted by RBI. Lalwani has been at Cipla stake in the bank to at
Repo Operations (TLTRO) least seven investors. >P3
have eased the liquidity situa- TURN TO PAGE 11 TURN TO PAGE 9

Expect no covid-19 Trump gives Microsoft Govt charts defence

silver bullet: WHO 45 days for TikTok deal production targets
HT
Neetu Chandra Sharma Greg Roumeliotis & Echo Wang The proposed acquisition of Elizabeth Roche
neetu.s@livemint.com NEW YORK/WASHINGTON TikTok, which boasts 100 mil- elizabeth.r@livemint.com
NEW DELHI lion US users, would offer Mic- NEW DELHI

U
S President Donald rosoft a rare opportunity to

D I
espite advances in Trump only agreed to become a major competitor to ndia, one of the world’s top
efforts to find a vaccine, allow Microsoft Corp. to social media giants such as importers of military hard-
there may never be a negotiate the acquisition of Facebook Inc and Snap Inc. ware, has unveiled an ambi-
“silver bullet” against the sars- popular short-video app Tik- Microsoft also owns profes- tious plan to locally produce
Automakers have also been finding it tough to ramp up cov-2 virus that has infected Tok if it could secure a deal in sional social media network defence equipment worth ₹1.75
production due to disruption in supply chains. PRATHAM GOKHALE/HT more than 18 million people 45 days, three LinkedIn. trillion ($25 billion) a year by
around the world, the director people familiar The proposed Trump had dis- 2025.

Maruti, Hyundai to general of the World Health

Organization (WHO) warned
on Monday. WHO director-general Tedros
with the matter
said on Sunday.
acquisition will missed the idea of
offer Microsoft a a sale to Microsoft
The move rep- rare opportunity on Friday. But fol-
The plans outlined in the lat-
est draft of the Defence Produc-
tion and Export Promotion Pol-
India aims to locally produce
defence equipment worth

ramp up production “The message to people and

governments is clear: ‘Do it
all’,” Tedros Adhanom Ghe-
Adhanom Ghebreyesus. REUTERS

though they were past the

resents an about-
face for Trump
and prompted the
to become a
major rival to
Facebook, Snap
lowing a discus-
sion between
Trump and Mic-
icy 2020 (DPEPP 2020)
unveiled on Monday underscore
attempts by the government to
₹1.75 trillion a year by 2025.

tured among the world’s top

breyesus said at a virtual news
to peak FY18 levels briefing from the UN body’s
headquarters in Geneva.
“We know from serology
studies that most people
Malyaban Ghosh ended 31 March 2020. remain susceptible to this
malyaban.g@livemint.com Both companies increased virus, even in areas that have
NEW DELHI vehicle production in FY18 experienced severe out-
and in the first half of FY19 to breaks,” he said, adding that
worst are now having to con-
tend with fresh spikes in
cases.
“A number of vaccines are
now in phase three clinical
trials and we all hope to have a
number of effective vaccines
that can help prevent people
from infection,” said Ghebrey-
US tech giant to rosoft chief execu- push local manufacturing of three importers for many years.
declare its interest
in the blockbuster
tive officer Satya
Nadella, the Red-
social media deal that could wood, Washington-based com-
arms to reduce costly imports
and achieve self-reliance.
Identifying the defence sec-
Estimates suggest the Indian
armed forces could spend
about $130 billion to procure
further inflame US-China ties. pany said in a statement on tor as a driver to boost the over- defence equipment in the next
Trump said on Friday he was Sunday that it would continue all economy, the draft policy set five years.
planning to ban TikTok amid negotiations to acquire TikTok an annual export target of “The share of domestic pro-
concerns that its Chinese own- from ByteDance, and that it ₹35,000 crore in aerospace and curement in overall defence
ership represents a national aimed to reach a deal by 15 Sep- defence equipment and servi- procurement is about 60%. In

M
aruti Suzuki India Ltd meet robust demand in line over the past week several security risk because of the per- ces within the next five years.
and Hyundai Motor with a pickup in economic countries that looked as TURN TO PAGE 11 sonal data it handles. TURN TO PAGE 11 India has consistently fea- TURN TO PAGE 11
India Ltd are looking to activity. Sales later decelerated
ramp up vehicle production due to factors such as a slowing
back to the peak levels of FY18, economy, higher fuel prices,
said two people directly aware insurance costs and farm dis-
of the plans, as the country’s two tress.
largest carmakers gear up for an This year, too, automakers
expected spurt in sales during remain cautious about the sus- Blue-collar jobs show RBI board to Curtains for some cinema screens
the coming festival season. tainability of demand despite
meet on 14 Aug
Maruti plans to produce an expected spike in festive
160,000-170,000 vehicles in sales. Maruti Suzuki, for
October, and has instance, has
revival signs in metros over dividend
Lata Jha
lata.j@livemint.com
According to trade experts, in a mess, thanks to the combi-
since the beginning of the lock- nation of an indefinite delay in
also asked suppli- The country’s two declined to share RAMESH PATHANIA/MINT NEW DELHI down, 10-12% of cinemas have making films, in addition to the
ers and employ- largest carmakers sales volume gui- Kalpana Pathak & Gopika Gopakumar & shut down per- absence of clarity

A
ees to work extra are gearing up for dance for this fis- Romita Majumdar Asit Ranjan Mishra large number of India’s manently, a num- The worst-hit will on a reopening
days during the an expected spurt cal. 10,000-odd cinema ber which could be single-screen date for theatres,”
month, the two Automakers MUMBAI MUMBAI/NEW DELHI screens may never light rise to 15-20%, if cinemas, which said film trade and
in sales during the
people said, have also been up again, as more than four they remain may not be able exhibition expert
coming festival

B T
requesting ano- finding it tough to lue-collar jobs are gradu- he central board of months of closure and uncer- closed longer.
season to bear additional Girish Johar. The-
nymity. Hyundai, ramp up produc- ally returning, with the Reserve Bank of India tainty over reopening prompt India had 6,327 atres are unsure
on the other tion due to dis- top metros leading the (RBI) will meet on 14 many of them to down shutters single screens and costs of safety when they can
hand, is likely to ruption in supply uptick in hiring. August to discuss the dividend forever. The worst-hit will be 3,200 multi- and hygiene reopen, whether
manufacture 58,000-60,000 chains. Lockdowns in various IT-enabled services (ITeS) transfer to the government, single-screen cinemas, which plexes as of 2019, audiences will feel
vehicles as it expects demand states, rising number of coro- companies are expected to hire according to a person aware of may not be able to bear the according to the confident enough
for its Creta and Venue utility navirus cases, shortage of security, cleaning and mainte- Most firms in metros confirmed the matter. additional costs of safety and latest Ficci-EY media and to return and whether there
vehicles to peak during Diwali, skilled manpower and nance workers, emerging as their intent to step up hiring of The government has bud- hygiene whenever they are entertainment industry report.
which falls in November, they increased inspection of the biggest employer of blue- blue-collar and entry-level staff. geted ₹60,000 crore as divi- allowed to open. “The film exhibition sector is TURN TO PAGE 11
added. imported parts from China fol- collar workers in Bengaluru, dends from RBI and state-run
The plans of Maruti Suzuki lowing escalating tensions while logistics will lead hiring employers, followed by the banks and financial institu- For short takes on the news Listen to Mint Evening
and Hyundai are a bellwether between the two nations have in Delhi-National Capital financial services sector. tions, according to the Union before you start your day, Market Wrap for Nasrin
for India’s car industry as they added to the woes of automak- Region, according to a survey Ninety percent of companies Budget 2020-21. follow our daily podcast Mint Sultana’s detailed analysis of
had a combined 68% share of ers and their suppliers. by online marketplace OLX surveyed in Bengaluru con- RBI had transferred a ₹1.76 Lite Morning Shot with the day’s news from Dalal
Shalini Umachandran on Street and other markets on
the domestic passenger vehi- group. In Mumbai, ITeS and htsmartcast.com htsmartcast.com
cle market in the fiscal year TURN TO PAGE 11 logistics will remain top TURN TO PAGE 9 TURN TO PAGE 9
02 TUESDAY, 4 AUGUST 2020
NEW DELHI DEALS
PLAIN
FACTS

WHICH STATES ARE LEADING REVIVAL?

A few large state economies such as Rajasthan and Delhi that may have seen off the worst of covid-19 are showing early signs of economic recovery
m MINT STATE RECOVERY TRACKER
Tanay Sukumar & GDP) and small ones (1–2% of Chart 1
Chart 3

Surbhi Bhatia GDP). Mobility declined in states with fresh virus outbreaks, improved elsewhere Dismal covid-19 situation could delay
Rajasthan was the only state Rise in mobility compared to the growth of coronavirus cases in July. Bubble size depicts death toll as on 31 July. States economic recovery for Karnataka and Andhra
NEW DELHI/MUMBAI where all indicators on the with faster virus spread and restrained mobility marked in red, those with slower virus spread and improved mobility Active coronavirus cases as a percentage of total cases, state-wise.
tracker showed an improve- marked in green, and outliers marked in blue.

I
Compound daily growth rate of
n early June, the Centre ment since June. Karnataka Slower virus spread, Faster virus spread, coronavirus cases (in %) used for
left lockdown orders to the and Andhra Pradesh were the improved mobility Tamil Nadu improved mobility x-axis. Improvement in mobility
figure (in % points) used for
states with the hope of only ones where all available Haryana y-axis. The central point
Delhi Punjab represents India. Mobility figure
kick-starting economic data points showed a dip in Rajasthan refers to the percentage gap
recovery. The effect has activity. Uttarakhand Telangana Assam between average footfall at
Gujarat public locations on a given date Delhi
been mixed across different Nationally, in the last week and that during the baseline Rajasthan
8 Meghalaya
Jharkhand Karnataka Andhra period (3 January to 6 February). Uttar Pradesh 73
states, partly because of their of July, public mobility was Madhya Pradesh Uttar Pradesh Seven-day rolling average used 28
Pradesh 40
varying approaches to tackling about 60% of pre-covid levels, Odisha Kerala
for mobility calculations. States
Maharashtra with fewer than 2,000 cases as of
the pandemic. The picture down from 64% at June-end. Slower virus spread, West Bengal Faster virus spread, 1 July not included. Jammu and
Kashmir excluded due to skewed
looked the brightest for Mobility improved the most in restrained mobility restrained mobility mobility data.
Bihar
Rajasthan and Delhi in July, Tamil Nadu and Delhi. Bihar, Chhattisgarh
but it was a mixed bag for other West Bengal and Kerala saw Chart 2

large state economies, shows the biggest declines since June Key indicators still behind 2019 levels, but recovery is picking up in a few large states
Mint’s new State Recovery levels. Mobility refers to Goo- Relatively low Relatively high Recovery Year-on-year, change in %, July
Tracker. gle footfall data at groceries State Virus case growth in mobility GST Electricity Vehicle
Some key indi- and pharmacies, (% share in India's GDP) rate (CDGR in %, July) (in % points, July) collections consumption registrations Gujarat
cators showed an Rajasthan was the w o r k p l a c e s , Maharashtra (14.1) 2.9 -4 -17.2 -6.2 -39 23
increase in states only state where parks, transit Tamil Nadu (8.6) 3.4 7.2 -23.8 -15.9 -38.4
where the virus hubs, and retail Uttar Pradesh (8.5) 4.2 -5.5 -6 5 -35.3 Andhra Pradesh
all indicators on 53
situation has and recreation Karnataka (7.9) 7.1 -8.4 -15.2 -15.5 -49.3
the tracker Gujarat (7.8) 2.1 -2.2 -12.3 -9.9 -51.4
improved. How- spots. The com-
showed an West Bengal (5.9) 4.4 -12.3 -16.1 -5.9 -34.5 Maharashtra
ever, regions parison has been
where it deterio- improvement made with the Rajasthan (4.9) 2.7 2 3.6 11.7 -17.2 36

rated, such as since June baseline period of Andhra Pradesh (4.6) 7.5 -7.7 0 -10.4 NA
Karnataka, 3 January to 6 Telangana (4.4) 4.5 -2.9 -9.1 11.6 NA Less than 10
Madhya Pradesh (4.2) 2.8 -3.4 0.3 13.8 NA 10-30
Andhra Pradesh February. Kerala Tamil Nadu 30-40
Kerala (4.1) 5.5 -9.9 -12.8 -9.9 -48.2 45 24
and Kerala, pulled back on On electricity consumption, 40-50
Delhi (4) 1.5 6.2 -22.8 -11.9 -27.2
economic recovery. Google mid-sized and small-sized More than 50
Medium-sized economies (3) 4.2 -6 -15.3 2.3 -34.8
data showed a clear link state economies surpassed the Data as of 31 July
Small-sized economies (1.6) 4.6 -5.5 -17.8 3 -29.5
between the outbreak and levels of the year-ago period, India 3.5 -3.6 -14 -2.1 -37
public movement in 17 of the data from the National Load
Analysis covers 12 states with highest GSDP (2017-18). Medium-sized economies are Haryana, Punjab, Bihar and Odisha. Small-sized economies are Assam, Chhattisgarh, Jharkhand Sources: Google covid-19 Community Mobility Reports, National Load Despatch Centre,
20 high case-load states last Despatch Centre showed. and Uttarakhand. Mobility data is till 27 July, and refers to seven-day moving average of public movement. Recovery is in percentage points and refers to the difference between
figures for 30 June and 27 July. NA—Not available. CDGR—Compound daily growth rate of coronavirus cases. road transport ministry, health ministry, finance ministry, MoSPI.
month (see chart 1). Among large states, Telan-
AHMED RAZA KHAN/MINT
Public movement is one of gana, Madhya Pradesh, and
the high-frequency indicators Rajasthan did the same, possi- try’s dashboard recorded Most states saw a sharper declined from 101% in June to states where mobility rose in desh, start August in a bad mies. Despite performing bet-
in the recovery tracker. Three bly because of the slower virus about 1.13 million vehicle reg- year-on-year fall in GST col- 84% in July. July. Power consumption and shape. Their covid-19 death ter in previous months, they
other indicators—electricity spread than earlier. The rest of istrations in July, still only 63% lections in July than they did Enforced lockdowns could vehicle sales have also curves have been steep lately could fall behind if they do not
consumption, goods and servi- the country remained 2.1% of the year-ago level. Mid- in June. From a 3% year-on- soon run their course as a pan- improved since June. and the virus is not relenting. tame fresh outbreaks soon. As
ces tax (GST) collections, and lower on this indicator (see sized economies were able to year decline in June, the demic mitigation strategy. The Kerala’s outbreak has inten- For other large state econo- is now clear, revival is possible
vehicle sales—are also consid- chart 2 ). match 65% of the year-ago national figure fell back to 14% link between the disease and sified in recent weeks. As such, mies, mainly Delhi, Gujarat, even after a high case-load and
ered in the tracker. The Though still in negative ter- vehicle registration numbers, in July, the latest figures from economic revival could only its mobility level suffered one and Telangana, economic shutdowns can again cripple
tracker looks at the 12 largest ritory, the national figure and small-sized ones climbed the finance ministry showed. strengthen, as illustrated best of the worst declines among recovery could pick up pace states that had once appeared
state economies individually reflects a recovery since June, up to 70%. Richer states such Mid-sized and small-sized by Delhi and Kerala. Delhi has states last month, with other (see chart 3). to be flattening their curve.
(each having at least 4% share when power consumption was as Tamil Nadu (62% of year- economies were at 85% of the largely controlled the out- indicators mirroring the same Though the national econ- The health and economic bat-
in India’s gross domestic prod- 11% lower than the year-ago ago levels), Maharashtra (61%), year-ago GST collections. break since June and 92% of its trend. omy will get a fillip from large tles must go hand-in-hand.
uct or GDP), and clubs mid- period. and Karnataka (51%) are far Rajasthan led the way with patients have been discharged. Two large state economies, states recovering, the warning tanay.sukumar@live-
sized economies (2–4% of The road transport minis- behind. 104%, while Karnataka As a result, it is one of the few Karnataka and Andhra Pra- is clear for smaller state econo- mint.com

m POLITICAL TWITTER DASHBOARD Firms put people first during virus crisis
Who are the most influential Indian political leaders on Twitter? How active were they last week? What resonated with their Sneha Alexander
followers the most? Presenting the Mint Political Dashboard of Twitter activity, which uses data extracted from the micro-blogging
500 listed firms during April
website to answer these questions for 20 most followed leaders across four categories in the political firmament
sneha.a@livemint.com and June and also studied
MUMBAI financial statements to gauge
Tweets and retweets Followers (in million) reactions to the pandemic.

L
Most retweeted Last Weekly Last Weekly imited state support and Companies from Bangladesh,
Politician Party topic week change week change constrained finances Indonesia, Malaysia, Pakistan,
made the developing the Philippines, Saudi Arabia,
MEMBERS OF PARLIAMENT - TREASURY
world more vulnerable to the South Africa, Thailand, Tur-
NARENDRA MODI Arrival of Rafale fighter aircraft in India 26 73.1% 60.29 0.4%
BJP economic fallout of the coro- key, and Vietnam were cov-
@narendramodi
navirus outbreak. Yet, many ered in the survey.
AMIT SHAH* PM Modi, arrival of Rafale fighter aircraft 38 5.3% 21.78 0.6%
BJP firms in emerging economies Survey results show that
@amitshah
chose a human-centric around three-fourths of the
RAJNATH SINGH approach over firms reported a Even while facing huge losses, many firms in emerging economies
BJP PM Modi, arrival of Rafale fighter aircraft 17 82.4% 17.95 0.4%
@rajnathsingh
self-serving
SMRITI IRANI means to cut
m SNAP FACT negative impact
of the pandemic.
chose to uphold the interests of their stakeholders. BLOOMBERG

BJP PM Modi, arrival of Rafale fighter aircraft 146 50.0% 11.22 0.1%
@smritiirani costs, finds a Companies in efforts towards protecting interests during the pandemic.
SUBRAMANIAN SWAMY study published by VoxEU. the Philippines and Bangla- labour, addressing short-term This shows that the financial
BJP Actor Sushant Singh Rajput's death 207 -29.5% 9.37 0.6%
@Swamy39 Based on a survey across 10 desh were the most affected, needs of stakeholders and markets valued such firms
MEMBERS OF PARLIAMENT - OPPOSITION emerging markets, the study with 89% facing negative maintaining long-term rela- more, the researchers say.
RAHUL GANDHI* finds that most firms reacted effects. The real estate and tionships. Many firms also The authors also find that
INC Questioning terms of Rafale contract 13 38.5% 15.36 0.6% to the pandemic by reducing non-essential consumer goods contributed to the fight companies were fast to react to
@RahulGandhi
investments instead of layoffs. sectors were hit the most. against the pandemic through the outbreak and take stake-
SHASHI THAROOR Rahul Gandhi, on Chinese intrusion in Ladakh 115 32.2% 7.63 0.1%
INC Some trimmed executive sala- However, the study finds donations, the study finds. holder-centric steps, even
@ShashiTharoor
ries, but many refrained from that, to a large extent, compa- The researchers find less before their governments.
KAPIL SIBAL Irony in who are termed Naxal or anti-national 4 -50.0% 2.56 0.0% cutting employee benefits. nies received cooperation negative impact on the stock Also read: Covid-19 in
INC
@KapilSibal
Researchers Thorsten Beck from employees and stake- prices of companies that cared emerging markets: Firm survey
SHARAD PAWAR Wishing Uddhav Thackeray on his 60th birthday 19 -15.8% 1.86 0.5% and others surveyed nearly holders. The study reports about their stakeholders’ evidence (bit.ly/3hYhvNF).
@PawarSpeaks NCP

DEREK O’ BRIEN TMC On Amit Shah's homage to Ishwar Chandra Vidyasagar 57 -8.8% 1.21 0.0%
@derekobrienmp
CHIEF MINISTERS
YOGI ADITYANATH PM Modi, launching covid-testing facilities 12 25.0% 10.68 0.8%
@myogiadityanath
BJP m NEWS IN NUMBERS CORRECTIONS AND
NITISH KUMAR*
JD(U) Officials to take daily feedback from covid patients 6 116.7% 5.85 0.2% CLARIFICATIONS
HT
@NitishKumar
6,803 3 Mint welcomes comments,
MAMATA BANERJEE TMC Saluting martyrs on Kargil Vijay Diwas 9 0.0% 4.55 0.7% What is it? The number of fires recorded What is it? The suggestions or complaints
@MamataOfficial in the Amazon rainforest in July by number of teams about errors.
VIJAY RUPANI BJP PM Modi, arrival of Rafale fighter aircraft 65 -6.2% 2.72 0.4% Brazilian authorities. that will take part
@vijayrupanibjp Readers can alert the
Why is it important? This is up 28% from in the Women’s
newsroom to any errors in the
UDDHAV THACKERAY SHS Thanking PM Modi for birthday wishes 10 390.0% 0.74 2.7% 5,318 fires in July 2019 and has raised T20 Challenge, to paper by emailing us, with your
@OfficeofUT concerns it could worsen in August. With be held alongside full name and address to
PARTY CHIEFS 30,900 fires, August 2019 was the worst this year’s IPL. feedback@livemint.com.
ARVIND KEJRIWAL month in 12 years. While Brazil has banned Why is it
AAP VAT on diesel cut from 30% to 16.75% in Delhi 49 24.5% 20.18 0.0% burning, it had little impact as it was not important? It is our policy to promptly
@ArvindKejriwal respond to all complaints.
AKHILESH YADAV
backed by proportionate patrolling. The Before the pandemic, there were plans to Readers dissatisfied with the
SP Deteriorating law and order situation in UP 19 -10.5% 12.44 0.3% Amazon lost 3,069 sq. km to deforestation expand it to four teams. However, the
@yadavakhilesh response or concerned about
between January and June this year. expansion has been put on hold, even as Mint’s journalistic integrity may
CHANDRABABU NAIDU Following actor Sonu Sood to help farmer family 42 4.73
TDP -11.9% 0.2% Tell me more: The Amazon, which stores the BCCI shifted IPL 2020 to the UAE. write directly to the editor by
@ncbn sending an email to
over 180 billion tonnes of carbon, is key to Tell me more: The WT20C was launched
NAVEEN PATNAIK Tributes to soldiers who fought 1999 Kargil War 11 109.1% 2.89 0.0% fighting global warming. Activists have in 2018, with Harmanpreet Kaur’s asktheeditor@livemint.com
BJD
@Naveen_Odisha
complained that President Jair Bolsonaro Supernovas and Smriti Mandhana’s Mint’s journalistic Code of
KT RAMA RAO Action against alleged apathy of hospitals 184 -83.7% 2.47 0.4% hasn’t done enough to protect the forests. Trailblazers playing a single match.
TRS Conduct that governs our
@KTRTRS newsroom is available at
*Appear in multiple categories, included in most relevant role. www.livemint.com
Data for the week to midnight of August 1 Data compiled by howindialives.com Data and text compiled by Howindialives howindialives.com is a search engine for public data

FOR ANY QUERIES/DELIVERY ISSUES

CALL: 60004242, Monday-Saturday, 10am-6pm (Delhi, Mumbai, Bengaluru, Kolkata, Chennai, Hyderabad, Ahmedabad, Pune and Chandigarh) MAIL: delivery@livemint.com TO SUBSCRIBE: Give a missed call on 7039035039 or visit www.mintreaders.com or write to us at subscription@livemint.com

First published in February 2007 to serve as an unbiased and clear-minded chronicler of the Indian Dream.
VAMAN VASSUDEV KAMAT (EDITOR); PUBLISHED/PRINTED BY DINESH MITTAL (Interim) ON BEHALF OF HT MEDIA LTD, 18-20 Kasturba Gandhi Marg, New Delhi 110001
Printed at HT Media Ltd presses at •Plot No. 8, Udyog Vihar, Greater Noida, Distt Gautam Budh Nagar, Uttar Pradesh 201306; •MNSPrinters Pvt. Ltd, 345/4, Bhatrahalli, Near KR Puram RTO, Old Madras Road, Bangalore 560049; •Saraswati Print Factory Pvt. Ltd, 789, Chowbhaga (W), Near China Mandir, Kolkata 700 105; •MNSPrinters Pvt. Ltd, 76/1, Poonamallee High Road, Velappanchavadi, Chennai 600077; •
Bhaskar Print Planet, Survey No. 148P, Changodar Bavla Highway, Sanand (Tal), Distt Ahmedabad, Gujarat. •Jagati Publications Ltd, Plot No. D75 & E52, APIE Industrial Estate, Balanagar, Rangareddy Distt. Hyderabad 500037 *Also available in Chandigarh and Pune.
RNI Registration DELENG/2007/22485; Mint welcomes readers’ responses to all articles and editorials. Please include your full name, address and telephone number. Send in your views to the editor at letters@livemint.com. ©2020 HT Media Ltd All Rights Reserved
 NEWS TUESDAY, 4 AUGUST 2020
NEW DELHI 03

Bandhan Bank holding firm sells

mint

SHORT TAKES
Oil near $40 as Opec, allies start
unwinding production cuts
New York: Oil was steady near $40 a barrel as Opec+ producers
started supplying more crude to a global market with many coun-
20.95% stake to meet RBI norms
tries still struggling to contain the coronavirus. The Organization
of Petroleum Exporting Countries (Opec) and its allies will pump
about 1.5 million barrels a day more this month than in July as
they started to unwind their historic virus-driven output curbs, BFHL offloaded its stake to at least 7 investors, including GIC, Temasek, Morgan Stanley Asia Singapore
with Russia already having lifted its production slightly last
month. At the same time, diesel sales in India were down 21% on
the previous year in July, a sign of the stuttering demand recov- Shayan Ghosh & company was required to bring
ery in one of the world’s largest consumers. BLOOMBERG Ravindra Sonavane its shareholding to 40% of the
paid-up voting equity capital of
MUMBAI the bank.
SoftBank-backed Oyo merging “The bank has been exploring

B
Govt andhan Bank Ltd on various options to bring the
Japan units, posting new CEO appoints 3
Monday said it has met shareholding to the prescribed
BLOOMBERG members of
Central the promoter holding level. Pursuant to amalgamation
Board of norms of the Reserve of Gruh Finance Ltd into and
Indirect Bank of India (RBI) with the bank effective from 17
Taxes and
Customs
after its holding company Ban- October 2019 and consequent to
dhan Financial Holdings Ltd issuance of fresh equity shares to
bit.ly/3k9cCDp
(BFHL) sold 20.95% stake in the the shareholders of Gruh on 21
bank to at least seven investors. October 2019, the shareholding
The buyers included Singa- of NOFHC in the bank diluted
pore’s state investors GIC and from 82.26% to 60.96% of its
Temasek, which purchased the paid-up voting equity share capi-
shares through affiliates Cala- tal,” the bank said on Monday.
dium Investment Pte Ltd and In January 2019, Bandhan
Camas Investment Pte Ltd Bank had acquired HDFC Ltd-
Tokyo: Oyo, the Indian hotel-booking startup backed by respectively, and others such as owned Gruh Finance Ltd
Masayoshi Son’s SoftBank Group Corp., is merging its oper- Morgan Stanley Asia Singapore through an all-share deal, as part
ations in Japan and appointing a new chief executive officer Pte, Bandhan Employees Wel- of its efforts to bring down pro-
to oversee the combined entity. The reorganization fare Trust, Copthall Mauritius moter shareholding. Prior to the
involves Oyo’s hotel-booking and apartment-rental units Investment Ltd, Societe Gener- deal, Bandhan Financial held an
coming together into a single company called Oyo Japan, ale and Credit Suisse Singapore Under the Reserve Bank of India norms, Bandhan’s holding company was required to bring its shareholding to 82.28% stake. The acquisition
to be led by Ryoma Yamamoto as CEO with Ryota Tanozaki Ltd. 40% of the paid-up voting equity capital of the bank. MINT helped Bandhan Bank expand its
as his deputy, both promoted from senior roles in the exist- GIC is an existing shareholder housing finance portfolio.
ing Oyo operations. BLOOMBERG of Bandhan Bank, owning a 4.9% on 3 August 2020 informed the the bank said in a regulatory fil- exchanges, citing deal terms. After it failed to comply with
stake through Caladium, before bank that it has diluted its excess ing. Mint reported on 2 August A floor price of ₹311.1 per share RBI’s norms on shareholding in
Monday’s transaction. shareholding of 20.95% or that Bandhan Financial Holdings has been set for the share sale, September 2018, the central
Electricity generation in India While Caladium took which is a discount of bank imposed restrictions on
declines at slower rate in July 40.07 million shares, SHAREHOLDING PATTERN 9.89% to Friday’s closing expansion of branch network and
Camas Investments pur- price of ₹345.25 apiece, chief executive officer remuner-
Chennai: India’s electricity generation declined at a slower pace chased 24.58 million GIC is an existing WHILE Caladium MORGAN Stanley INVESTMENT banks Mint reported. Invest- ation. However, citing the efforts
in July compared with June, provisional government data shares, and Morgan shareholder of
Bandhan Bank,
took 40.1 mn shares,
Camas Investments
Asia, however, bought Credit Suisse, JP
8.17 million shares, as Morgan, Goldman
ment banks Credit made by the bank in reducing its
showed, driven by a recovery in consumption in populous Stanley Asia bought 8.17 owning a 4.9% stake purchased 24.58 part of the lender’s Sachs, JM Financial Suisse, JPMorgan, Gold- promoter shareholding, RBI
northern and central states. July power generation fell 1.8%, a million shares, showed through Caladium million shares share sale advised on the sale man Sachs, and JM lifted the restrictions in February
Reuters analysis of daily load despatch data from federal grid data from BSE. Financial advised Ban- 2020, with certain conditions.
operator Power System Operation Corp. Ltd showed, compared “To be fully-compli- dhan Financial on the Shares of Bandhan Bank fell
with a 9.9% decline in June. In the second half of July, electricity ant with the licensing guidelines, 33,73,67,189 equity shares, of ₹10 will sell shares worth ₹10,500 share sale. 10.6% on Monday to close to
generation declined 3.1%, compared with a 0.6% slide during the the Non-Operative Financial each fully paid-up in the bank crore or $1.4 billion, through Under the Reserve Bank of ₹308.65.
first fifteen days of the month. PTI Holding Company (NOFHC) has through secondary market sale,” block trades on the stock India norms, Bandhan’s holding shayan.g@livemint.com

SBI economists pitch for loan

restructuring in select sectors
Mumbai: Economists at State Bank of India (SBI) on Monday
pitched for a sector-specific loan restructuring package after the
end of the six-month loan repayment moratorium on 31 August.
Sebi issues disclosure norms for proxy advisers
They said the moratorium data is not “significantly perturbing”
but hit out against the “spate of unplanned and unintelligent Jayshree P. Upadhyay founder and managing higher standards in their advi-
lockdown mania” in many pockets. There is a growing list of voi- jayshree.pyasi@livemint.com director, InGovern Research, a sories.
ces demanding loan restructuring given the impact of the coro- MUMBAI proxy advisory firm. The clause mandating they
navirus pandemic on economic activities. PTI Starting 1 September, the must submit a report to a com-

I
n a first, the Securities and
Exchange Board of India
Exide Industries posts net loss (Sebi) on Monday mandated
higher standards of disclosure
of ₹13.56 crore in June quarter for proxy advisory firms to
New Delhi: Battery major Exide Industries on Monday reported manage conflict of interest and
a consolidated net loss of ₹13.56 crore in the quarter ended 30 offer companies a chance to
June 2020, due to the impact of disruptions caused by the cov- respond.
id-19 pandemic. The company had posted a net profit of ₹161.58 So far these firms were regis-
crore in the corresponding quarter a year ago. Total income dur-
ing the quarter under review stood at ₹2,537.55 crore as against
₹3,691.33 crore in the quarter ended 30 June, 2019, Exide Indus-
tered under and governed by
the research analyst norms of
2014, which prescribed a code
tries said in a BSE filing. of conduct. Proxy advisory
Starting 1 Sep, firms will also
have to disclose conflict of
interest on every document
firms will also have to disclose
conflict of interest on every
document where they are giv-
ing their advice on. “The dis-
closures should especially
address possible areas of
potential conflict and the safe-
guards that have been put in
place to mitigate possible con-
flicts of interest,” said Sebi.
J.N. Gupta, co-founder and
MD of proxy advisory firm
Stakeholder Empowerment
pany and seek their comments
before releasing it may find
some opposition.
As per the circular, firms
need to share their report with
its clients and the company at The budget airline had offered discounted one-way base fares
the same time. “Timeline to starting at ₹899, along with a free flight voucher worth the base
receive comments from com- fare of the booked flight, for a limited period. MINT
pany may be defined by proxy
advisors and all comments/
clarifications received from the
company, within timeline,
Aviation regulator
shall be included as an adden-

PVR rights issue of 382.3 million

PTI
firms provide institutional
investors with research, data,
and recommendations on
equity shares oversubscribed management and shareholder
proposals, which are voted at a
company’s annual meeting or
extra ordinary general meet-
ings. They also comment on
governance practices in com-
panies, which helps institu-
where they are giving their
advice on. MINT
that proxy advisors will need to
formulate the voting recom-
mendation policies and dis-
close it to their clients, besides
disclosing the methodologies
adopted for research.
“It is not clear whether these
Services (SES), said the Sebi cir-
cular has codified norms and
standards which were already
being followed.
“We believe Sebi is trying to
standardise processes across
proxy advisors registered with
them,” said Amit Tandon, chief
executive, Institutional Inves-
tor Advisory Services (IIAS)
dum to the report. If the com-
pany has a different viewpoint
on the recommendations
pulls up SpiceJet over
stated in the report of the proxy
advisors, then proxy advisors,
after taking into account the
promotional offer
said viewpoint, may either Rhik Kundu of raising funds.
revise the recommendation,” rhik.k@livemint.com “The goal for such an offer-
said Sebi. NEW DELHI ing is to generate more revenue
For instance, InGovern nei- by getting the limited passen-

tional investors make invest-
ment decisions.
The Sebi’s move is based on
an expert panel report of
August 2019, which had made
recommendations at manag-
ing conflict of interest and
ensuring independence.
New Delhi: Leading multiplex operator PVR Cinemas’ In a circular, Sebi mandated
rights issue has been oversubscribed, according to data
available with stock exchanges. Its rights issue opened on
17 July and closed on 31 July. According to issue subscrip-
tion data, PVR proposed to issue 382.3 million equity
shares. The company’s board had fixed rights issue price at
₹784 per equity share. It received total bids for 4.79 million
shares by the time of closure on 31 July, including non ASBA
(application supported by blocked amount) bids. PTI
HSBC India’s pre-tax profit up 9.5% in H12020
Shayan Ghosh
Dhanlaxmi Bank Q1 profit tumbles shayan.g@livemint.com
69% on higher NPA provisioning MUMBAI
guidelines originate from the
recommendations by the panel
set up by Sebi that reviewed
regulations governing proxy
advisory firms. In any event,
many of these guidelines are
currently being adopted by us
in some form or other,” said
Shriram Subramanian,
Some companies had
alleged that recommendations
of many proxy firms go beyond
what is required under the law
and regulations. To address
this, Sebi directed proxy advis-
ors to disclose the legal
requirements and the rationale
behind the recommendation of
ther shares the report with a
company unless they pay for it
nor do they seek comments
from the company. IIAS follows
a practise of sharing the report
with the company before shar-
ing with clients to get their
comments and also shares the
final report with the both.
H1 2020, a 69% decline from
the year-earlier. Pre-tax profit
plunged 65% y-o-y to $4.3 bil-
lion because of higher-than-ex-
S
piceJet Ltd has with- gers to fly them rather than
drawn its ‘1+1’ promo- other airlines,” said a senior
tional ticket offer soon industry executive, requesting
after launch following an objec- anonymity.
tion from the Directorate Gen- Auditors of SpiceJet—S.R.
eral of Civil Aviation (DGCA). Batliboi and Associates Llp—
The budget airline had have earlier raised doubts
offered discounted one-way about the carrier’s ability to
base fares starting at ₹899, continue as a going concern
along with a free flight voucher after it reported its highest-
worth the base fare of the ever quarterly net loss of ₹807
booked flight, for a limited crore in the March quarter.
period. “The company has incurred
The five-day a net loss during
sale was launched DGCA, however, the current and
on Monday and censured SpiceJet previous year and,
passengers could as it wanted to its current liabili-
fly till 31 March keep the process ties exceeded its
2021 on tickets
of buying tickets current assets in
bought under the
simple for
the balance sheet,
scheme. till date. These
The DGCA, passengers conditions...indi-

H
New Delhi: Private sector Dhanlaxmi Bank on Monday posted SBC Holdings Plc
a 69% decline in its net profit at ₹6.09 crore for the first quarter posted a 9.5% year-on-
ended June 2020 due to higher provisioning. The bank had reg- year (y-o-y) rise in pre-
istered a net profit of ₹19.84 crore during the same quarter of the tax profit in its Indian opera-
previous fiscal. On a sequential basis, however, its net profit in the tions in the first half of 2020 at
quarter under review increased from ₹2.6 crore in the March $561 million.
2020 quarter. Total income during April-June 2020 increased India is the third-largest con-
to ₹278.62 crore from ₹256.75 crore in the year-ago period, the tributor to HSBC’s profit, after
lender said in a regulatory filing. PTI Hong Kong at $5.09 billion and
Mainland China at nearly $1.5
billion in the same period. The
Markets regulator extends deadline performance marked a growth
from the $494 million pre-tax
to apply for 147 senior level posts profit HSBC India clocked in
New Delhi: Markets regulator Sebi has again extended the dead- the H2 2019.
line to apply for 147 senior level posts by three months till 31 Octo- “We maintained a high level
ber due to the ongoing covid-19 situation. On 7 March, the regula- of business continuity with 85%
tor had invited applications for these positions as part of its plan of colleagues equipped to work
to beef up the headcount for faster and more effective execution from home, all of our customer
of its job. The deadline for applying for the said posts was 23 contact centres fully opera-
March. It was later extended to 30 April, thereafter till 31 May and tional, and between 70% and
again till 31 July. PTI 90% of our branches open for
pected credit loss and lower
revenue. Profit during the
period under review also
included a $1.2 billion impair-
ment of software intangibles,
mainly in Europe, HSBC said.
The net interest margin
(NIM) of 1.43% in H1 2020 was
down 18 basis points (bps) from
Globally, HSBC reported a profit after tax of $3.1 billion in H1 2020, the year earlier, reflecting the
a 69% decline from the year-earlier. MINT initial impact of the lowering of
interest rates due to the cov-
business in the first half,” said “For our wholesale lending id-19 outbreak, HSBC said.
Noel Quinn, HSBC’s group customers, we provided more The company’s outlook on
chief executive. Quinn said for than $52 billion of facilities to jobs appeared grim and Bloom-
personal lending customers, more than 172,000 customers berg quoted chief financial offi-
the bank granted more than globally over the same period, cer Ewen Stevenson as saying
700,000 payment holidays on both through government that more than 4,000 staff had
loans, credit cards and mortga- schemes and our own relief ini- left in the first-half of the year,
ges, providing more than $27 tiatives.” the first of 35,000 jobs
billion in customer relief dur- Globally, HSBC reported a expected to be cut over the next
ing the period. profit after tax of $3.1 billion in three years.
however, cen- cate the existence
sured SpiceJet as of a material
it wanted to keep the process of uncertainty that may cast sig-
buying tickets simple for pas- nificant doubt about the com-
sengers, said a senior official at pany’s ability to continue as a
the civil aviation watchdog. going concern,” the auditors
The government has capped said in a note with the March
domestic air fares according to quarter result. The auditors
flight duration till 24 Novem- have raised similar concerns
ber. A SpiceJet spokesperson about the airline in the past
said the airline has withdrawn quarters. Indian airlines are
the offer after DGCA’s objec- staring at a revenue loss of ₹1.3
tion. “We have already com- trillion between fiscal 2020
plied with the DGCA directive,” and 2022 due to the covid-19
the spokesperson said. pandemic that has severely hit
SpiceJet’s offer highlights demand, rating agency Crisil
the methods deployed by air- said in a report in July. Airlines
lines globally to raise much- are also unlikely to recoup from
needed cash in times of crisis. this loss and bounce back to
Selling tickets through promo- pre-pandemic levels of double-
tional schemes are one of the digit growth at least in the
quickest and sure shot methods medium term, said the report.
04 TUESDAY, 4 AUGUST 2020
NEW DELHI

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE

36,939.60 -1.77 10,891.60 -1.64 8,932.05 -1.15 26,725.75 -0.50 11,056.00 -1.49 13,716.79 -0.31 13,154.61 1.02
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

37,606.89 37,595.73 11,073.45 11,057.55 9,035.75 9,029.60 26,861.35 26,852.10 11,222.95 11,208.55 13,759.11 13,774.54 13,021.76 13,058.96
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

37,596.02 36,911.23 11,058.05 10,882.25 9,029.80 8,925.05 26,990.00 26,674.45 11,208.95 11,046.95 13,856.95 13,705.85 13,184.80 13,043.93

A monthly pickup fails to enthuse

mint

SHORT TAKES
Euro’s strength carries a
bullish message for stocks
The stronger euro, often a headwind for Euro-
pean equities, now is sending an encouraging
auto investors wary of slowdown
message to some stock investors: That the
region’s economy looks like a better bet than the Clifford Alvares PVs. Sales of Honda two-wheelersfestive season, driven by normal
mess in the US. The euro is up more than 5% ver- clifford.a@livemint.com rose by more than 50%. monsoons,” said Aditya Makharia, Looking up
sus the dollar in July, the biggest monthly gain vice-president, HDFC Securities Ltd.
Interestingly, PV sales are closer to The auto sector has seen a monthly improvement in sales due to pent-up

T
demand and the need for personal mobility. Tractor sales have grown
since September 2010, and it’s approaching levels he auto industry’s sales However, partial lockdowns are
their pre-covid levels. Year-on-year
moderately on a yearly basis.
that back in 2017 caused some pain for the stock engines are revving up, but impacting sales. In fact, Hero Moto-
growth has been flat. Note that last
Y-o-y growth M-o-m growth (in %)
market. Euro strength is a perceived nemesis to Nifty falls the demand pickup is Corp said that localized restrictions
year’s base was weak due to a slow- 120
for the sixth
Europe’s exporting companies, reducing the time in
largely being seen in the are impacting sales and that a stable
down in the auto sector. Besides, part
90
value of revenue earned in the US and damping seven days. mini-passenger vehicle environment would be important for
of the improvement in sales could be
international demand for goods produced in the Key levels to and personal mobility segments. demand to sustain.
attributed to channel restocking. 60

common currency bloc. BLOOMBERG watch now While the uncertainty dogging the Demand for small cars and motor-Sales growth in the tractor seg- 30
bit.ly/30q7KSy sector has reduced, ment has been decent 0
covid-19 challenges CAUTIOUS STANCE on a year-on-year basis.
-30
still persist. The Strong demand in the
Real talk Street’s reaction to the WHOLESALES of AUTOMAKERS say THE Street’s reaction rural market and -60
Maruti Hero TVS Motor M&M M&M
The UK yields, adjusted for inflation, are auto numbers shows both two-wheelers
and PVs were
that localized curbs
are impacting sales
to the auto numbers
shows that investors
higher Kharif sowing Suzuki MotoCorp (Two-wheeler) (CVs) Tractors
hovering close to a record low. that investors are not noticeably higher in and timely monsoons M&M Bajaj Auto Royal Ashok Escorts
and stability would aren’t convinced that (PVs) (Two-wheeler) Enfield Leyland
UK 10-year real yield (%) quite convinced that July over June be key for demand demand will persist are the key drivers of
0 Source: Company, Nirmal Bang Equities
-0.8 demand will persist. growth. Government
-0.5 The Nifty Auto index spends have also been SATISH KUMAR/MINT

-1 fell by about 0.5% on Monday. cycles have increased, showing that contributing to rural demand. Here too, demand is being seen from excited if some of the higher-end cars
The month-on-month (m-o-m) personal mobility is the need of the Meanwhile, the commercial vehi- the rural and semi-urban markets. show a sharp improvement, which
-1.5
growth numbers for some large vehi- hour. “The overall numbers are quite cle (CV) segment is not quite yet out of Supply chain constraints still per- would support margins in the coming
-2 cle makers certainly look impressive. positive given the circumstances. the woods, though July saw an sist. “Although supply chain contin- quarters. It also remains to be seen
Wholesales of both two-wheelers and There are signs of downtrading as the improvement in sales over June. ues to recover gradually, the situation whether the pent-up demand will
-2.5
passenger vehicles (PVs) were notice- demand for entry-level cars and Ashok Leyland’s July sales fell about continues to remain volatile due to continue during the festive season. As
-3 ably higher in July over June. Maruti motorbikes has risen sharply as con- 56% y-o-y, but surged 99% from June. local lockdowns,” said analysts at Nir- such, auto stocks may remain in the
-3
-3.5
Suzuki and Mahindra and Mahindra sumers opt for personal mobility. M&M’s CV segment also showed an mal Bang in a note to clients. slow lane till signs of further improve-
3 Aug 2015 31 Jul 2020 reported 88% and 40% rise m-o-m in This demand should sustain till the improvement of about 25% m-o-m. Of course, the Street will be more ment in demand are noticeable.
Source: Bloomberg

SATISH KUMAR/MINT

Bond investors alarmed

over the UK economy
The UK bond market is flashing warning signals
to Bank of England (BoE) governor Andrew Bailey
June quarter turned out to be Bank of India’s Q1 results offer cheer,
ahead of the central bank’s meeting next week.
While traders don’t expect the BoE to alter mone-
tary policy on Thursday, bets on easier funding
a damp squib for Dabur India but risks still linger around the corner
conditions are building. Yields out to eight years
are submerged below 0%, a sign that the market Pallavi Pengonda
expects interest rates to soon follow, according to pallavi.p@livemint.com
Staying low Aparna Iyer also reported a drop in its bad loan assured that a majority of these
Luke Hickmore, a money manager at Aberdeen Dabur India’s international revenue fell 22% y-o-y in Q1FY21, aparna.i@livemint.com pile; a sign that its legacy problems loans are strong in their credit pro-
denting the company's overall revenue growth.

I
Standard Investments. Real yields, which strip out t is said that change is the are thawing slowly. file and the risk of them turning bad

inflation, are hovering just above record lows.
That’s putting strain on savers and pension funds,
while inflation expectations are rising. Throw in
a rise in coronavirus cases and the end of Brexit
transition period, and Bailey faces the problem of
how to support the economy. BLOOMBERG
Investors rethink ‘60/40’
as low yields test portfolio
The staple US portfolio of 60% equities and 40%
fixed income proved resilient this year, but strate-
gists are now considering alternatives to govern-
ment debt after some bond yields reached historic
lows. Sanford C. Bernstein recommends taking
more risk by favouring stocks and gold, and
argues the negative correlation between equities
and fixed income is likely to unwind. Morgan
Stanley said corporate bonds may be the best
alternative to sovereign notes for curbing portfo-
lio volatility and providing a level of income. “I
don’t think bonds can provide the standard his-
torical returns,” said Andrew Sheets, Morgan
Stanley’s chief of cross-asset strategy. BLOOMBERG
All-time high
After stabilizing last week, gold surged to a
record high on Monday.
Spot gold ($/oz)
2000
1,971.19
1900
1800
1700
1600
1500
1,517.27
1400
31 Dec 2019
Source: Bloomberg
B
only constant. During the 12 9
Y-o-y growth in net sales (In %) ank of India’s (BoI) first-quar- The management said that slip- is low.
June-quarter earnings con- 7 ter metrics were a reflection pages going ahead would be con- “The proportion of loans where
ference call, Mohit Malhotra, 5 4 of an improved balance sheet. tained irrespective of the pandemic. three instalments have not been
CEO, Dabur India Ltd, said In addition, optimistic commentary Nevertheless, the bank has pro- received is just 4%,” said managing
covid-19 has acted as a catalyst from the management cheered vided against nearly all director and CEO
for change. “We have investors. possible risks. At 52%, BoI has Atanu Kumar Das in a
enhanced our risk-taking abil- The stock gained more than 2% The bank has a pro- reported the virtual press meet.
ity as an organization,” he said. on Monday in response to the quar- vision coverage ratio highest level of Even so, the lender
However, following the shift
-12
terly numbers. The public sector of 85% and has pro- moratorium is in a tough spot com-
in strategy, it may take some lender’s net profit more than dou- vided ₹1,035 crore
-13
among banks that pared with most of its
time before it is reflected in the Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21
bled to ₹844 crore for the June specifically towards private sector peers
results. Dabur’s June-quarter quarter. covid-19 risks. have announced that have reported sin-
Source: Company, JM Financial
results were unimpressive. This is significant because the But there are hid- their results so far gle-digit moratorium
Consolidated revenues SATISH KUMAR/MINT bank has been struggling to rebuild den dangers in the bal- levels.
declined by about 13% y-o-y to tion and amortization (Ebitda) about 2% lower. But valuations itself after it came out of regulatory ance sheet despite the Another factor has
₹1,980 crore. The domestic margin expansion of 91 basis remain pricey. Dabur’s shares quarantine in January last year. The positive commentary. been the sharp increase in write-
FMCG business declined by points (bps). trade at about 47 times esti- bank was put under the Prompt Bank of India has reported the offs. The bank wrote off ₹3,505
almost 7% and volumes fell by Gross margin contracted by mated earnings for FY22, Corrective Action scheme in highest level of moratorium among crore during the quarter, which is
9.7%. Dabur’s food segment 10 bps. One basis point is one- based on Bloomberg data. December 2017 after its capital banks that have come out with their double that of the previous quarter.
suffered last quarter, as con- hundredth of a percentage For current valuations to be position weakened considerably. results so far. About 52% of its loan Writing off a loan is the final stage
sumers shied away from having point. justified, the increased risk- The lender reported a 25% rise in book is under moratorium. wherein the potential recovery is at
cold beverages, To be sure, dur- taking must start producing operating profit for the quarter. It To be sure, the management has its minimum for the bank.
hurting sales. The company did ing the pandemic, results. In the past few months, Given the lockdown, upgrades
Dabur’s home well in curtailing Dabur remains on Dabur has had more than 50 Looming risk and recoveries were a shadow of
and personal care operating costs, a strong footing as new launches. New product previous quarters.
Over 50% of Bank of India’s loans are under moratorium, primarily due
category declined which helped its far as the health- contribution improved to 6% of Another risk is a bulk of the
to potential risk, even as the lender’s operating metrics improved.
by 15%, while care portfolio revenue. Sure, there is a flip- bank’s bad loan resolutions depend
Ebitda margin Q1FY19 Q1FY21
healthcare saw goes. It said Dabur side to this as well. “Sustenance on insolvency cases getting con-
29% growth. The to expand by Chyawanprash of this pool of revenue could be Gross bad loan Provisions (₹ crore) Operating
cluded quickly.
ratio (in %) profit (₹ crore)
company’s inter- 91 basis points grew nearly seven- questioned since it would be While the Insolvency and Bank-
national business fold last quarter, contingent upon the success of 16.5 ruptcy Code has been suspended
13.91 2,217
remained sub- while Dabur the new launches,” said ana- 1,911 1,512 for a year, existing cases in courts
dued with revenues declining Honey saw more than a 60% lysts from JM Financial Institu- are running their course.
by 22%. surge in demand. tional Securities Ltd. Even so, recovery and the pace of
Dabur did well in curtailing And, investors are taking They added, “It’s quite well- 2,845 it is a big uncertainty.
operating costs, particularly, note. After all, the Dabur stock known that >50% (or much It is clear that Bank of India needs
Moratorium
advertising and publicity is flirting with its pre-covid more) of new product develop-
expenses. This helped earnings highs seen in February on the ments fail to take off after initial
(as % of loans) 52 Source: Bank filings
to shore up its capital and not just
provisions. And here, the govern-
before interest, tax, deprecia- NSE, currently trading just placements.” ment’s role is crucial.
SATISH KUMAR/MINT
3 Aug 2020

Gold erases gains after

SATISH KUMAR/MINT

As inflation rears its ugly head, RBI will find it hard to focus on growth
jumping to a record high Aparna Iyer recovery seen in June has stalled.
Familiar foe Headline inflation Core inflation (in %) bank will need to tiptoe carefully sector commercial paper rates
Gold opened the week with a surge to a record aparna.i@livemint.com While growth remains a major 8 on its inflation narrative. barely above the policy rate of
before retreating to trade little changed as Euro- concern, the biggest headache Inflation, especially Most economists believe this 4%.
7.5
core inflation, has

T
pean equities turned positive and the dollar he Reserve Bank of India’s
nudged higher. Spot gold surged 11% in July, the (RBI) rate-setting commit-
biggest monthly gain since 2012, as investors tee will begin its three-day
weighed a weaker dollar and record low US real meeting on Tuesday and the con-
yields. Strategists are now considering alterna- ditions are treacherous.
tives to government debt, such as cash, credit, div- FY21 is expected to be a reces-
idend shares and gold. RBC Capital Markets said sionary year, but more worrying
that gold looks like a “freight train” due to haven is the declining prospect of an
demand. Spot gold rose as much as 0.6% to early recovery.
$1,988.40 an ounce, before retreating to trade Regional lockdowns and a
0.2% lower by 12:46 pm in London. BLOOMBERG stubborn infection curve of the
coronavirus pandemic have
For more reports and analysis meant that business activity
on the markets, follow our would be seen in spurts rather
Mark to Market podcast with than a steady rise.
Pallavi Pengonda and Aparna Indeed, India’s manufacturing
Iyer on htsmartcast.com purchasing managers’ index
(PMI) data for July shows that the
for the Monetary Policy Commit-
tee is the return of inflation.
Blame it on supply chain dis-
ruption, taxes by a fund-starved
government and even ingenious
ways through which service pro-
viders price in a pandemic cost.
The prices of most commodities
have shown a rise despite a large
part of demand being wiped out
due to the lockdown.
Analysts at Standard Char-
tered Bank note that 90% of the
pressure on headline inflation in
April came from core inflation.
“We raise our CPI inflation
forecast for FY21 to 4.7% from
3.5%. This is mainly due to a
risen again above
the Reserve Bank 6.5
of India's comfort
zone, making it 5.5
difficult to
prioritize growth.
4.5
3.5
Source: CMIE
likely rise in food and core CPI,
which we see at 4.9% and 4.7%,
respectively (versus 2.8% and
4.2% earlier),” said a research
note by the bank.
The committee’s comfort zone
7 return of inflation would tie the In short, the RBI already seems
committee’s hands in voting for a to have created a conducive
6
rate cut again in this week’s interest rate environment for
6.09 deliberations. companies to borrow for usual
5
“Inflation is going to be a prob- business needs.
5.04 lem. So, prudently, the RBI What companies now need is
3.95 should pause now and wait to see for demand to come back, and
4
how the price situation pans out,” this could take a while. Indians
3.18
said an economist with a foreign are unlikely to boost their discre-
3
Jun 2019 Jun 2020
bank, requesting anonymity. tionary spending amid a pan-
But the RBI need not feel anx- demic. That said, the initial signs
SATISH KUMAR/MINT
ious about a recovery because it of a pickup in retail loan growth
is 4% inflation and clearly the has done what it can. The central are encouraging.
readings would be higher. Also, bank has already chopped its pol- Much of the recovery now
food inflation has a big potential icy rate by 115 basis points in just depends on the infection curve
to lift household inflation expec- six months. Market yields are and how the regional lockdowns
tations, which are mostly adapt- way ahead with short-term trea- influence this curve. And there,
ive in nature. Ergo, the central sury bill yields and even private the RBI can do little.

Mark to Market writers do not have positions in the companies they have discussed here
 NEWS TUESDAY, 4 AUGUST 2020
NEW DELHI 05

Chinese brands expected to EXPERT

VIEW
spend ₹700 cr on ads for IPL KAUSHIK DAS

Respond to this column at

feedback@livemint.com

Brands like Oppo, Xiaomi, Realme, OnePlus take up premium ad slots, with Vivo being the title sponsor
RBI SHOULD NOT
Saumya Tewari & Elizabeth Roche cused V-series models in June. The
DELAY EXPECTED
NEW DELHI company has been highlighting its
India-focused approach to create a RATE CUT TO OCT
C
hinese brands are positive image amid the anti-China
expected to spend sentiment in India. The company,
₹700 crore to adver- however, chose not to comment on BHEL
uncertain
tise during the Indian its IPL plans. over
Premier League (IPL) Xiaomi India was an early returning to
2020, which begins in the United adopter of Prime Minister Naren- normal
Arab Emirates on 19 September, dra Modi’s Make in India initiative, operations
media buyers said, with the Board beginning local assembly of bit.ly/30t5eel
of Control for Cricket in India printed circuit boards.
(BCCI) deciding to retain Chinese “We manufacture 99% of the
sponsors. smartphones locally, with 65% of
Chinese mobile phone brand the value of the smartphone being
Vivo had been paying ₹440 crore locally sourced, and in the process
annually as IPL’s title sponsorship have directly and indirectly created
fee since 2018 for a five-year period. employment opportunities for
It also invests heavily on television more than 50,000 people to date,
advertising and dealer engagement in the country. Our aim is to trans-
and offers estimated to be around form India into a global manufac- In case the MPC decides to keep the repo rate steady, then RBI
₹150 crore during the two-month turing hub and we have been could consider delivering some indirect form of easing. MINT
long T20 tournament. actively contributing towards this,”

T
A bunch of other Chinese smart- A file photo of Hardik Pandya (centre) during an Indian Premier League (IPL) match. Experts say the money said a company spokesperson. he August monetary policy will be a close call, as far as
phone brands also spend a lot of Chinese brands spend on the IPL contributes about 20-25% of its total revenue. HT The government needs to come policy rate cut is concerned. We think the Monetary Pol-
money on the tournament. Brands out with a medium- to long-term icy Committee (MPC) should deliver a 25 basis points
such as Oppo, Xiaomi, Realme, and spends contribute about 20-25% of rities, bagging title sponsorship for tifying the advertising blitzkrieg on plan to reduce Chinese depend- (bps) repo and 35bps reverse repo rate cut. However, the uncer-
OnePlus take up premium ad slots, the total IPL revenues,” said San- sports properties for peak visibility, both offline and online platforms. ence in strategic areas such as phar- tainty posed by the current higher-than-anticipated consumer
spending more than ₹500 crore of deep Goyal, chairman, Mogae and concentrating advertising The lockdown put in place to maceuticals and telecom, said Bis- price index (CPI) print may push the MPC to deliver a dovish
on-air advertising money through- Media, a Mumbai-based marketing money on cricket. contain the spread of coronavirus wajit Dhar, professor of trade, Jaw- pause, keeping hopes alive for an October rate cut. In our view,
out the tournament, has created pent-up aharlal Nehru University. the Reserve Bank of India (RBI) should not delay the expected
according to estimates of ADVERTISING BLITZ demand and made con- “Decoupling from China has to be rate cut to October, for the following reasons.
media buyers. sumers realize that tech- carefully done and it has to be a well The current spike in CPI inflation, particularly core CPI, is
“The Chinese brands IPL 2020 is set to VIVO had been THE strategy of CHINESE brands, nology is important as thought out process and not a due to statistical issues, as well as higher gold and local pump
begin in UAE on 19 paying ₹440
were quite visible on The Sep and BCCI will be as title sponsorship cr a year Chinese brands has dominate the Indian they continue to work knee-jerk one. India’s economy prices, without which, true core inflation is around 3.5% year-
been centred around smartphone market
Kapil Sharma Show as it deciding on retaining fee for IPL since 2018 leveraging Bollywood despite a campaign from home. Handset right now is too dependent on on-year. Meanwhile, risks to growth are rising by the day as cov-
returned to the screen Chinese sponsors for a 5-year period and sports celebrities to boycott them industry executives China,” he said. The sponsorship of id-19 cases are surging in economically relevant states such as
after the lockdown hiatus. expect consumers to con- IPL is one area where government Maharashtra, Tamil Nadu, Gujarat and Karnataka (together
I presume Chinese tinue investing in these policy “seems unclear,” he said. contributing 40% to national gross domestic product). We
mobiles will advertise on IPL too. and communication agency. Despite a campaign to boycott products. Taking loans from the China-led expect real GDP to contract 6.2% y-o-y in FY21 under our base-
They account for a substantial The strategy of Chinese brands Chinese brands, smartphones from Vivo India launched a high-deci- Asian Infrastructure Investment line scenario, but if localized lockdowns are broad-based and
chunk of the advertising revenues has been centred around leverag- the northern neighbour continue bel campaign with actor Aamir Bank is another, Dhar said. extended, we see risks of growth declining by more than 8%
that Star is expecting. In fact, their ing big Bollywood and sports celeb- to dominate the Indian market, jus- Khan to promote its camera-fo- saumya.t@livemint.com y-o-y under our worse-case scenario.
Given the expected growth-inflation trajectory, the absence
of meaningful fiscal space to support growth and the lag with
which monetary transmission works, it is not advisable to delay
any rate cut to October, particularly as it will be very close to the
US presidential election, which may

Cognizant bets on ReNew looks to raise funds via dollar bonds The uncertainty coincide with greater financial mar-
posed by high ket volatility. It is not as if the inflation
trajectory will be altered significantly
inflation may
acquisitions to grow Swaraj Singh Dhanjal
swaraj.d@livemint.com
past. In January, ReNew
raised $450 million through
push the MPC
to deliver a
depending on whether the MPC cuts
rates in August or not. If that were the
case and RBI decided to pause in
MUMBAI dollar bonds. Indian compa- dovish pause August, then the central bank should
its digital business nies are slowly returning to not cut rates even in the subsequent

R
eNew Power, one of the dollar bond market post meetings.
India’s largest renewa- the disruption caused by the But a pre-emptive rate cut can be helpful for other reasons.
ble energy producers, covid-19 pandemic. Last The six-month loan moratorium period is coming to an end in
Ayushman Baruah is gearing up to raise offshore week, billionaire Gautam August and it is unlikely that there will be a blanket extension,
ayushman.b@livemint.com debt by issuing dollar bonds Adani-controlled Adani Ports given moral hazard risks. In the backdrop of this looming “mor-
BENGALURU as it looks to refinance and Special Economic Zone atorium cliff”, it will help if RBI at least reduces the repo rate by
domestic debt of certain (SEZ) Ltd launched an off- 25bps, so that banks in turn reduce the lending rate further and

C
ognizant Technology operating assets, according to shore bond offering, raising faster, thereby making it easier for individuals and sectors not
Solutions Corp is bet- two people aware of the as much as $750 million. This eligible for moratorium relief to be able to service their debt
ting on mergers and development. was the third and the largest obligations. The benefit of a front-loaded rate cut is signifi-
acquisitions (M&As) to build “ReNew is in talks to offshore bond deal launched cantly higher in the backdrop of elevated financial stability risks
its digital business, which the appoint a banker syndicate to by an Indian company since and a worrying non-performing assets (NPA) outlook, in our
company believes is still in a manage the bond offering. the pandemic disrupted view, as against any structural risk to inflation, which we fore-
nascent stage. The size of the bond sale is yet global markets in March. cast to fall below 3% by end-December.
“I believe we are in the early to be decided,” said one of the ReNew could look at raising around $500 million and the State-owned REC Ltd and Even a dovish pause can push up term-premium, lead to
stages of digital and that cov- persons aware of the talks, proposed bond offering could be launched as early as this agrochemicals major UPL Ltd tightening of financial conditions, increase financial stability
id-19 has accelerated digital requesting anonymity. month or latest by September. AFP raised $500 million each in risks and force RBI’s hand to eventually announce more Opera-
adoption. Digital creates an ReNew could look at rais- May and June, respectively. tion Twist and open market operation (OMO) purchases to
enormous opportunity for ing around $500 million and rating to the pro- In January, RG will use the The offshore bond market reverse the potential negative trend. Consequently, “doing
Cognizant and we intend to the proposed bond offering posed notes to be India’s largest proceeds to is not yet as welcoming as it nothing” is not an option for the central bank, as the repercus-
capture this. We have comple- Brian Humphries, chief could be launched as early as issued b y renewable energy repay its existing was at the start of the year sions of such a move will likely be a net-negative for the econ-
mented organic investments executive officer, Cognizant. this month or latest by Sep- ReNew-owned producers raised senior and share- when close to a dozen Indian omy, in our view. In case the MPC decides to keep the repo rate
with a targeted M&A strategy tember, said the second per- entities ReNew holder debt and companies sold their bonds to steady, then RBI could consider delivering some indirect form
$450 million
focused 100% on digital,” said which contributed 75.8% to son mentioned above, also Wind Energy for on-lending to offshore investors. of easing, which could include i) a 25-35bps cut in reverse repo
Brian Humphries, chief execu- the overall revenue in 2019. requesting anonymity. (Jadeswar) Pvt. through dollar ReNew Power In July, SoftBank-backed rate; ii) an introduction of Standing Deposit Facility below the
tive officer, Cognizant. “Cognizant’s digital book- An email sent to ReNew Ltd and six other bonds group compa- Indian renewable energy reverse repo rate; iii) an announcement of longer tenor LTROs;
The Nasdaq-listed company ings grew almost 50% in the Power did not elicit a subsidiaries in a nies,” Moody’s company SB Energy had to iv) or an increase in “hold to maturity” (HTM) limit of bonds.
has already made five digital- first half of the year fuelled by response till press time. newly estab- said in its note. pull back its maiden $600 On the regulatory side, we expect an extension of the loan
based acquisitions this year, all digital engineering, artificial On Monday, international lished restricted group (RG). ReNew Power is a seasoned million bond offering, moratorium by another three months for only severely stressed
of which are primarily in the intelligence and analytics, ratings agency Moody’s “The bonds are denomi- dollar bond issuer and has because of tepid investor sectors and the announcement of a one-time loan restructuring
cloud computing space. interactive and software-as-a- Investors Service assigned a nated in Indian rupees but raised debt capital through interest, the Economic Times to give a breather to banks to deal with pipeline NPA risks.
“Cloud computing has service,” Humphries said. first-time provisional Baa3 will be settled in US dollars. this route several times in the reported. Kaushik Das is India Chief Economist, Deutsche Bank.
changed the way IT is deliv- Analysts believe acquisi-
ered across infrastructure tions are an efficient way to
applications and platforms,” achieve fast growth in digital
Humphries said. business. “When organic
In February, it acquired growth is complemented with
Code Zero, provider of cloud- acquisitions, it helps with
based billing faster time-to-
solutions, and the Cognizant’s digital market and also
IFSCA panel to draw roadmap to woo international retail investors
French opera- revenue grew 14% provides ready
tions of EI-Tech- Jayshree P Upadhyay
year-on-year for access to skills national financial services. The panel will consider infrastructure are already
nologies, a Paris- the June quarter, and clientele,” jayshree.pyasi@livemint.com “The committee was also ways to attract foreign firms established and so from an
based independ- said a Mumbai- MUMBAI tasked to draw up a roadmap to trade from IFSC and attract administrative perspective,
ent Salesforce
and represented based IT analyst.
for the growth of interna- retail non-resident Indian we do not see the incorpora-
42% of the firm’s

T
specialist. In Although, he work to establish the tional retail business at IFSC,” (NRI) clients. tion of an FPI (foreign portfo-
March, it total revenues overall revenues International Financial said IFSCA in a press state- Guidelines of the Securities lio investment) in IFSC as an
acquired Lev, a have been hit by Services Centre (IFSC) ment. and Exchange Board of India attractive option. Sebi-regis-
digital marketing covid, IT services as a credible international jur- India is trying to promote (Sebi) require that any broker tered FPIs intending to oper-
consultancy that helps busi- firms’ digital business has been isdiction and gain from the IFSC, situated at the Gujarat or trading member who is ate in IFSC can do so without
nesses modernize their mar- benefiting as clients transi- changing geopolitical situa- International Finance Tech trading from additional
keting campaigns with data- tioned to cloud-based tech and tion has picked up steam. (GIFT) City, as an alternative IFSC needs to The panel has requirements,”
driven insights. collaborative tools to enable On Monday, the Interna- for investors, after Hong incorporate an been tasked to said Nlioufer
In May, it acquired Collabo- the work-from-home model. tional Financial Services Cen- Kong’s ability to function as a entity at GIFT, as suggest measures Lam, partner,
rative Solutions, which is Cognizant’s digital revenue tres Authority (IFSCA), the global financial centre came this will ring- for developing ZBA law firm.
expected to add new finance grew 14% year-on-year for the regulator for IFSC, set up a under a cloud when after fence domestic “Several FPIs
and HR advisory and imple- June quarter and represented committee for international China tightened its grip on exchange trading
international have their own
mentation services to its cloud 42% of its total revenues. This retail business development. the city, Mint had reported on India is trying to promote IFSC, situated at GIFT City in Gujarat as from trading at retail business in investment cri-
offerings and, in June, it compares with Infosys Ltd’s The seven-member com- 24 July. an alternative for investors. AFP IFSC. This IFSC teria with their
entered into a deal to acquire digital revenue growth of mittee will need to submit its IFSCA, which was set up in requirement is a investors, which
New Signature, an independ- 25.5% y-o-y in constant cur- report within three months. April, is working to provide an cial services. gin payments, a one-point problem, say set out the listing
ent Microsoft public cloud rency and a contribution of The panel has been tasked to efficient and facilitative regu- The five major reform areas local dollar clearing mecha- experts. “Most foreign inves- jurisdiction of instruments
transformation specialist. 44.5% to its total revenues. suggest measures for devel- latory system comparable being considered is launch of nism, facilitating retail non- tors already have their own that can be invested in and
Except EI-Technologies, Of late, Tata Consultancy oping international retail with the best jurisdictions in more products at IFSC, resident Indian participation, foreign portfolio investor this also limits FPIs from
the four other acquired com- Services (TCS) Ltd and Wipro business in IFSC along with the world, to develop IFSC in extending the liberalized and doing away with require- (FPI) entities incorporated investing in instruments
panies are based in the US, Ltd have stopped reporting potential strategies for mak- India as a preferred global remittance scheme (LRS) for ments for setting up a broking outside of India, where its listed in GIFT City,” Lam
Cognizant’s largest market, digital revenues separately. ing IFSC attractive for inter- hub for international finan- derivatives trading and mar- or trading entity at GIFT. operations, management and added.
06 TUESDAY, 4 AUGUST 2020
NEW DELHI NEWS
VIRUS EFFECT
All shops in
Mumbai to Gyms, yoga centres to open Millennials, Gen Z
take workcations to
remain open
from 5 Aug
tomorrow with strict norms relieve WFH stress
Rashmi Menon
PTI rashmi.m@livemint.com
feedback@livemint.com Govt says only asymptomatic people with face masks will be allowed in the fitness centres MUMBAI
MUMBAI

A
fter three months of
Neetu Chandra Sharma

I
n a major relaxation in the
lockdown norms, the Bri-
hanmumbai Municipal Cor-
poration (BMC) on Monday
RECOVERIES IN INDIA working from home,
neetu.s@livemint.com Kiran Gupta, 27,
NEW DELHI
CROSS 1.2 MILLION decided to change the view
from her window. The tax con-

G
said all shops in the city are
allowed to remain open all days
from 5 August irrespective of
the odd-even rule.
In a circular issued under the
Mission Begin Again, the civic
body also allowed the counter
sale of liquor in Mumbai with
proper social distancing norms.
“It is further directed that all
shops shall remain open on all
days on all sides of roads irre-
spective of odd and even (rule),”
the circular said.
Besides, all essential shops
which were allowed to remain
open earlier shall continue to
do so whereas all non-essential
markets, market areas and
shops will remain open from
9am to 7pm, the BMC said.
Malls and market places will
be allowed to work from 9am to
7pm from Wednesday. How-
ever, theatres, food courts/res-
taurants will continue to
remain shut.
ymming and yoga ses- INDIA sultant packed her bag, and
sions may not be the same left her Mumbai home for the
during covid times with
the Union health ministry
1,833,922 38,532 Deaths
beaches of Goa last month. “I
was miserable. Work was hec-
Total cases
mandating all centres to tic, especially for my depart- Now, working professionals
follow social-distancing and hygiene 1,210,318 585,072 ment, as we had never closed a prefer to rest and unwind at
protocols, as they resume operations Recovered Active cases financial year-end remotely. place for a longer duration.
under Unlock 3.0, starting 5 August. But the change of scene has
However, spas, saunas and swimming done wonders to my produc- cern, Shah chose a location
pools will remain closed, while yoga GLOBAL tivity,” says Gupta, who “loves that he had been to. “We knew
institutes and gyms in containment meeting people”. the family that owns the farm
zones will be out of bounds. 18,117,821 After completing her quar- very well. And that’s the rea-
With India’s total covid-19 count sur- Total cases antine period and having son they let us use the prop-
ging to 1,808,122 on Monday, the min- spent some time at her friend’s erty,” says Shah.
istry aims to minimize physical contact
between the staff members and visi- 690,181 apartment in Goa, she is now A recent study on the
looking to rent a flat till at least impact of lockdown on behav-
tors. The government said only asymp- Deaths September. The consultancy ioural change by creative
tomatic people with face masks and
face covers will be allowed in the prem-
10,739,036 6,688,604 she works for is looking to agency Mcgarrybowen India,
work remotely till then. “After owned by Dentsu Aegis Net-
Recovered Active cases
ises, while children below 10 years, A worker wearing personal protective equipment sanitizes fitness gear inside a the change of place, I can meet work, said guarded and well-
Source: Union health ministry, states
pregnant women, members with gym in New Delhi ahead of its reopening. PTI the new friends I made, and do planned domestic travel is
co-morbidities and the elderly (65 creative things I wanted to do. going to replace spontaneous
years or more) will not be permitted. only a visor may be used. Use of mask, air should be as much as possible and metros. Their closure had led to con- It makes me feel more efficient adventure trips amid the cov-
“In view of the potential threat of the particularly N-95 masks, during exer- cross-ventilation should be adequate. siderable job losses. These are some of and productive,” she says. id-19 crisis. “People are
spreading of infection, as far as feasible cise may cause difficulty in breathing,” The central government has decided the decent jobs in the informal econ- With increasing burden stressed with work, home
recorded music or songs may be played the guidelines added. “Practice fre- to open yoga institutes and gymnasi- omy. The revival is expected to contrib- and boredom while U S I N E S S O chores, and generally
and shouting or laughter yoga exercise quent hand washing with soap (for ums considering the health and physi- ute to growth and employment genera- working from home, staying at home. They

“Kitchen of restaurants and
food courts will be allowed to
operate in malls wherein only
home delivery through aggre-
gators will be allowed,” the
BMC said.
Apart from allowing sale of
liquor at shop counters, the
BMC said home delivery of
booze is allowed with strict
compliance with norms.
The corporation warned fil-
ing of criminal cases against
owners of shops and persons
found violating its directives.
Referring to the national
directive for covid-19 manage-
ment, the BMC said consump-
tion of liquor, paan and tobacco
in public places is prohibited.
E-commerce activities for
essential as well as non-essen-
tial items and material will be
permitted, it added.
F
should not be allowed,” said the minis- 40-60 seconds) even when hands are cal benefits of yoga and physical activ- tion,” said Arup Mitra, professor of eco-
try, adding that members must bring not visibly dirty. Use of alcohol-based ity, the ministry said.
their own exercise mats and take them hand sanitizers (for 20 seconds) can be
nomics at the Institute of Economic
According to experts, the health Growth, University of Delhi.
and the anxiety and
stress around job secu-
rity, some millennials
Life will eventually travel
to relieve this stress but
with safety and hygiene
back home. In yoga institutes, footwear practised wherever feasible.” ministry’s decision to allow yoga cen- Meanwhile, India’s covid-19 case and Gen-Zers are willing as top priorities. They will
should be preferably taken off outside “Spitting should be strictly prohib- tres and gymnasiums to resume opera- fatality rate remained at 2.11%, with to take workcations in the want to avoid touristy clusters
the premises, and must be kept in over 40,574 patients cured in the hills, a farmhouse or even to avoid crowd, and would
separate slots. Personal trainers EXERCISING CAUTION past 24 hours alone, taking the total move to the outskirts of a city, want to rather rest and unwind
must also maintain six-feet dis- recoveries to 1,186,203, at a recov- to take a break. at place for a longer duration,”
tance during workouts, it added. SPAS and swimming YOGA institutes and KIDS below 10 years, PERSONAL trainers ery rate of 65.77%. With improving “There is no incentive to says Nishi Kant, president,
According to the guidelines, pools will remain out gyms in containment pregnant women,
of bounds for the zones will remain elderly and those
must also maintain
six-feet distance
daily recoveries, the gap between return to the city even by Mon- Mcgarrybowen India.
strict crowd management meas- time being, the closed until further with co-morbidities during workouts, recovered cases and active cases day. So, you can plan a longer Vaibhav Kala, who runs
ures and social-distancing norms health ministry said orders, officials said will not be permitted the guidelines say increased to 606,846 on Monday, stay,” says Jay Shah, the Mum- Atali Ganga, comprising 22
must be put in place at parking lots, with the country’s active case count bai-based founder of One Tree cottages, near Rishikesh, said
corridors and elevators, besides at 579,357, all of whom are under Hill Wealth Partners. Two queries on internet facility and
members should be allotted separate ited. Installation and use of Aarogya tions will help a section of the informal medical supervision. weeks ago, Shah and his family conference room have
time slots to maintain adequate physi- Setu app shall be advised to all,” it said. section workers, as these institutions India has tested 20,202,858 covid-19 went for a five-day farm stay in increased since July, espe-
cal distance. Disinfection of premises The government said all establish- contribute considerably to the number samples so far, with 381,027 tests in the the outskirts of Mumbai. “The cially from Delhi-NCR. “We
and equipment are also mandatory. ments must follow the Central Public of jobs in India. past 24 hours. The number of tests per place was very basic, but I felt a have seen families coming,
Gymnasiums must also place their Works Department guidelines on air- The closure of such centres follow- million (TPM) increased to 14,640 on sense of peace. I was working with kids doing their online
exercise equipment six feet apart. conditioning and ventilation—temper- ing the covid-19-induced lockdown Monday. While the country’s TPM wit- in the open, spreading out my classes and parents working
“Use of face covers or masks is man- ature setting of all air-conditioning and strict hygiene and physical distanc- nessed a steady upward trend, with its calls, spending time with my on their laptops,” says Kala,
datory at all times within the premises. devices should be in the range of 24-30 ing norms caused massive employment growing diagnostic network, 24 states child. At night, we watched a who opened the property in
However, during yoga exercise or exer- degrees C; relative humidity should be and revenue losses, the experts said. and Union territories reported higher movie with the hosts.” Consid- early July and had at least a
cising in gymnasiums, as far as possible in the range of 40-70%, intake of fresh “There are many gymnasiums in TPM than the national average. ering safety was a major con- dozen bookings in the month.

Serum Institute gets DCGI nod for trials of Oxford vaccine Moody’s upgrades Yes Bank by
Leroy Leo
leroy.d@livemint.com
a notch following capital raise and also specify the role of the ing clinical trials, with human
Indian Council of Medical trials of more than two dozen
NEW DELHI Research (ICMR) in the trial. of these underway. However,
Mint could not ascertain a link the University of Oxford’s Shayan Ghosh MTN programme rating from tier 1 ratio will more than dou-

T
he Drug Controller between ICMR and Serum vaccine candidate is seen as shayan.g@livemint.com (P)Caa1 to (P)B3. ble from 6.6% to 13.4% based
General of India’s Institute’s trial for the Oxford the front runner. MUMBAI Moody’s also upgraded Yes on the bank’s capital position
(DCGI’s) office has vaccine candidate. Interim data from a clinical Bank’s long-term local and at the end of June, bringing its

approved the Serum Institute
of India’s application for
phase II and III clinical trials
of the University of Oxford’s
covid-19 vaccine candidate
Covishield, the Union health
ministry said on Monday.
Pune-based Serum Insti-
tute is the third firm to get
approval for conducting
human trials in India after
Bharat Biotech (for Covaxin)
and Zydus Cadila (for
ZyCoV-D), which got the
approval for phase I and phase
II trails last month.
The approval from DCGI
comes after an expert com-
mittee last week recom-
mended that the company be
Serum Institute is the third firm to get approval for conducting
human trials in India.
allowed to conduct clinical
trials after studying the
revised proposal of the firm
for a 1,600-patient human
trial, according to people
aware of the development.
The Subject Expert Com-
mittee (SEC) for Covid-19
R
The company, which is the study published in The Lancet ating agency Moody’s foreign currency Counter- capitalization largely in line
world’s largest journal last week on Monday upgraded party Risk Ratings and long- with its private sector peers.
vaccine manu- The University of showed that the private sector lender term Counterparty Risk The significantly improved
facturer by num- Oxford’s vaccine vaccine candi- Yes Bank’s long-term foreign Assessment from solvency ratio,
ber of doses pro- candidate is seen date was safe and currency issuer rating by one Caa1 to B3 and According to Moody’s said,
duced and sold as the front provided dual notch from Caa1 to B3, citing from Caa1(cr) to Moody’s, Yes strengthens Yes
globally, had
runner among the i m m u n i t y the bank’s recent success in B3(cr), respec- Bank’s funding Bank’s resilience
signed an agree- against the raising capital. tively. “The suc- and liquidity have to potential asset
ment with Brit- candidates highly infectious “The outlook on Yes Bank’s cessful equity quality risks from
moderately
ish-Swedish mul- undergoing trials respiratory dis- ratings where applicable is raising showcases the impact of the
BLOOMBERG tinational phar- ease. Serum changed to stable from posi- Yes Bank’s improved in economic slow-
maceutical Institute plans to tive,” said Moody’s. The bank regained access Q2 of 2020 down and coro-
Related Therapies had on 28 company AstraZeneca, the price the vaccine at less than had recently raised ₹15,000 to external mar- navirus-related
July recommended various co-developer of the vaccine, ₹1,000 per dose, chief execu- crore, bolstering its capital ket funds, which disruptions on
amendments to Serum Insti- in June to supply an addi- tive officer Adar Poonawalla adequacy ratios. is a result of its improving India’s economy. According to
tute’s earlier protocol to con- tional 1 billion doses, princi- had told Mint in an interview Moody’s also upgraded the financial strength and will Moody’s, Yes Bank’s funding
duct the trials here. Among pally for low- and middle-in- last week. Poonawalla also bank’s long-term foreign and support depositor confi- and liquidity have moderately
the eight protocol changes, come countries. said the company will reserve local currency deposit ratings dence,” Moody’s said. improved in the second quar-
the panel had asked the com- There are more than 150 around half the vaccines it from Caa1 to B3 and its foreign Following the capital raise, ter of 2020, though they are
pany to hold a pan-India trial vaccine candidates undergo- produces for India. currency senior unsecured Yes Bank’s common equity still weaker than a year ago.

mint products such as cameras, thermostats, doorbells and alarm sys- Kansai Nerolac’s Apr-Jun quarter
tems with ADT’s installation, service and professional monitor-
Ravi Shankar Prasad, who had
SHORT TAKES ing network. ADT expects to offer certain Google devices to its
customers beginning this year and to expand the integration in
2021. Google will receive ADT shares of a newly created Class B
met Shah last week, isolates self
MINT
net declines 79% to ₹29.64 crore
New Delhi: Kansai Nerolac on
Monday reported a 79.42%
MINT

Chinese Artificial Intelligence firm
files $1.4 bn lawsuit against Apple
REUTERS Shanghai: Chinese artificial
intelligence company Shanghai
Zhizhen Intelligent Network
Technology Co. Ltd has filed a
lawsuit against Apple Inc., call-
ing for 10 billion yuan in dama-
ges. It has demanded that Apple
cease “manufacturing, ... sell-
ing, and importing” products
that infringe on its patent. PTI
Google to buy 6.6% stake in ADT
for $450 mn in home security push
New York: Alphabet Inc.’s Google is buying a 6.6% stake in home
security firm ADT Inc for $450 million in a deal that will allow it
to provide service to customers of its Nest home security devices.
ADT said on Monday the companies will work to combine Nest
common stock that will not have right to vote. REUTERS
GMR Infrastructure to divest much
of non-core assets, including land
New Delhi: GMR Infrastructure is working on divesting non-
core assets, including land and hopes to yield “significant value”
even from 50% of land monetization, according to a document.
The conglomerate in a presentation said land at strategic loca-
tions will benefit from possible manufacturing dislocation from
China. “Plan is to divest much of other assets identified as non-
core divestment initiative,” the document said and noted that it
REUTERS has 10,500 acres of port and
industrial land and “even 50%
land monetization” could yield
significant value. About its Kak-
inada Special Investment
Region, the group said that it is
in discussion with a large num-
ber of clients for monetization
of land. PTI
decline in consolidated net
profit at ₹29.64 crore for the
first quarter ended 30 June, on
account of lower income. The
company had posted a net profit
of ₹144.69 crore in June quarter
a year ago, Kansai Nerolac said
in a BSE filing. Total income
declined 58.23% to ₹647.08 crore during the quarter under
review as against ₹1,549.18 crore in the corresponding quarter a
year ago. PTI
New Delhi: Information technology and telecom minister
Ravi Shankar Prasad has gone into self isolation, as he had Tech Mahindra starts covid-19
met home minister Amit Shah on Saturday evening, a per-
son with knowledge of the matter said. Prasad is not show-
screening to detect antibodies
ing any symptom of the infection and the self-isolation is New Delhi: IT company Tech Mahindra on Monday started a
purely based on existing protocol, this person added. Shah coronavirus screening service, “Mhealthy”, which can also detect
on Sunday said that he had tested positive for covid-19 and covid-19 antibodies, said a senior official of the company. The
is getting admitted to a hospital following the advice of doc- firm said the platform is clinically tested and compliant with gov-
tors. PTI ernment regulations, guidelines, and has been approved by the
central drugs standard control organization. PTI
 NEWS TUESDAY, 4 AUGUST 2020
NEW DELHI 07

‘Covid-19 has created a crisis
for all the average companies’
Pooja Singh
pooja.s@livemint.com
NEW DELHI
reach $350 billion by 2025. In an
interview, Ronnie Screwvala,
co-founder of edtech startup
sector is not for the faint-
hearted—it’s a long-term com-
mitment, it’s a high-impact and a
Jubilant Generics
launches remdesivir
under ‘JUBI-R’ brand
Leroy Leo
Do you think the startup com- own sense of conviction and leroy.d@livemint.com
munity has received enough clarity of thought and then dem- NEW DELHI
financial support from the onstrating true leadership by

J
upGrad, spoke about the devel- high-repeat business and I think government? inspiring others to believe in ubilant Generics Ltd has

O
nline education is
one of the few
lucky sectors that
have been spared
by the virus crisis.
Education technology had been
witnessing high growth and
adoption even before the pan-
demic, with global edtech invest-
ments reaching $18.66 billion
last year and the overall market
for online education projected to
opment of online education, the
challenges the virus has posed to
the startup world and the ways to
overcome them. Edited excerpts:
Has there been a drastic atti-
tude shift when it comes to
online education?
Yes, both an attitude and
acceptance shift. Universities
and colleges have realized it’s
now and not tomorrow; faculty
have seen the clear advantage of
their teaching experience being
augmented, and corporate HR
companies that build their moats
with this in mind will stay the
course. The market is large, but
the outcomes we have on gradu-
ates or working professionals will
differentiate the great companies
from the competition.
How has the virus affected
Why should the startup com- you. Franklin launched the covid-19
Templeton
munity get sops from the govern- My mantra has always been debt funds
drug remdesivir under the
ment when it has many other scale, but with that I have added see further ‘JUBI-R’ brand at ₹4,700
bigger priorities? Yes, the SME a strong filter of “less for more”. dip in NAV per vial in the Indian market,
sector does need support That has given me incredible as Future the Noida-based pharmaceuti-
Group
because many of them are in focus on what I need to do in defaults
cal firm said on Monday.
manufacturing or social enter- every aspect of work and per- The subsidiary of Jubilant
bit.ly/30lzqaW
prises. B2B businesses, which sonal priorities. Life Sciences Ltd will make the
have experienced a slowdown, One of the prime concerns drug available to more than
need a line of credit to see them when it comes to online edu- 1,000 hospitals providing cov-
through the next two years. But cation is that internet tech- id-19 treatment in India JUBI-R will be sold at ₹4,700
the startup community should nology hasn’t reached many through its distribution net- per vial in the Indian market.
not have that sense of entitle- remote parts of our country. work. The company will also
ment. This is a good time to test Doesn’t a shift to online provide a 24-hour helpline to for its sale in 127 low- and mid-

‘
heads and CEOs have been your business? who all are building long- learning put certain sec- enhance access to the drug dle-income countries, includ-
pushed to accept that online or Great organizations are those term sustaina- tions at a dis- during the pandemic. ing India.
blended learning will actually that create their own crisis from ble businesses advantage? The Jubilant Group’s non- US-based Gilead has given it
make their future workforce time to time and then respond not predicated Yes, there is always Online learn- profit organization, Jubilant the licence on a royalty-free
more job-ready. For the aspir- and improve, and form a perma- on permanent a herd mentality ing is not about Bhartia Foundation, will also basis till an alternative drug is
ing graduate, this is a boon as nent culture of being nimble and funding, dis- whenever things look having a camera launch programmes to give discovered, or till the World
now it does not matter which sharp. I think what the covid-19 counting or in front of you or increased access to the drug Health Organization declares
city you live in: you can have crisis has done is create a crisis non-justified hot in a sector. But the doing a live lec- for patients below the poverty the end of its ‘Public Health
access to a degree of your choice for all the average organizations marketing edtech sector is not ture. Online line and to frontline paramedi- Emergency of International
from a college of your choice. But and pushed them to review spends. What for the faint-hearted learning has to cal staff. Concern’ for the drug. It has
most of all, I see the massive everything—from the way they the government be equivalent to “We have launched the also given the companies free-
Ronnie Screwvala
impact on our 100 million in the do business and their cost model can do more of is Co-founder, upGrad
being in an off- product at afford- dom to price their
workforce in the 25-50 age to the way they view their con- to make it really line environ- able prices and JUBI-R will products.
group now looking at “lifelong sumer, their price points and easy to do busi- ment, even bet- strive to make it require to be On 20 July,
learning” as very accessible and their value proposition. ness in India, and right now it’s ter. The whole learning experi- available in suffi- administered Jubilant received
also urgent to stay relevant At upGrad, this is the moment tough for most, especially those ence is as important as the cient quantities intravenously in approval from the
and in the top 50% of where we step up and look to dis- starting business for the first lecture. In rural India, where we to meet high
their organization.
a hospital setting Drug Controller
rupt the market forever. While time. work with our Swades Founda- demand for the General of India
With the increased we have had some great tailwinds The challenge of demand tion, we work with 1,200 schools drug in the Indian under medical to manufacture
focus on online and overall our 1,100-plus strong matching supply will continue and 800 angadwadis, and I can market and in supervision and market the
education, team is working efficiently from for the next two years and will tell you, with 80% of them we other countries,” antiviral drug for
there’s bound to home, our focus is how do we test entrepreneurs, but many will have been able to do WhatsApp said Shyam S. restricted emer-
be a spurt in make “lifelong learning” really become stronger because of that. voice and videos calls. Bhartia, chairman and manag- gency use in India for the
edtech startups. affordable and accessible to What can the founders do in In our upGrad courses, we also ing director, and Hari S. Bhar- treatment of severe covid-19
How well is many and yet build ambition lev- hard times like these? have the option that when you tia, co-chairman of Jubilant patients. ‘JUBI-R’ will require
UpGrad pre- els and a sense of urgency in You need to break tough times have a bandwidth problem you Pharma Ltd, in a statement. to be administered intrave-
pared for the working professionals. This DNA into a couple of things. If you can switch to a lower resolution The entire treatment, which nously in a hospital setting
competition? change will help us focus. think there’s a sense of uncer- and still get going. requires six vials of the drug, under the supervision of a
Yes, there is The present conditions have tainty, remove it. I think the rea- For the 100 million people will cost ₹28,200, the com- medical practitioner, it added.
always a herd made us realize that we can, in son many are having a tough who should be getting into pany said. The promoters of HT Media
mentality when- the next 18 months, do whatever time right now is we are thinking online learning—graduates, Pharma major Gilead Scien- Ltd, which publishes Mint, and
ever things look we could have taken four years to too short-term. Most of us are post-graduates, working profes- ces Inc., the innovator of rem- Jubilant Life Sciences, are
hot in a sector. do in a pre-covid world. So, we looking for an external cue, sionals—I think 60% of them do desivir, had signed a pact with closely related. There are, how-
But the edtech need to make every day count. whereas what is called for is our have good access to bandwidth. Jubilant Life for licensing the ever, no promoter cross-hold-
generic of its novel drug and ings.

Remittances
to decline by
$100 bn this
year: ADB
Reuters
feedback@livemint.com
MANILA

R
emittances across the
world could decline by
$108.6 billion this year
as job losses mount and
employers trim payrolls amid
a covid-19 pandemic that has
devastated economies,
according to a report by the
Asian Development Bank.
Money sent to Asia, where
about a third of migrant work-
ers worldwide come from,
could fall by $54.3 billion, or
about a fifth of baseline remit-
tances, the Manila-based len-
der said in the report released
on Monday.
Remittances to Asia and the
Pacific, which amounted to
$315 billion in 2019, help fuel
the consumption-led growth
for some of the region’s devel-
oping economies.
The countries facing “more
severe” effects are those
where the share of remittan-
ces to the gross domestic
product and per capita remit-
tances are high, such as
Tonga, Samoa and other
Pacific nations, it said. Geor-
gia, Kyrgyzstan and Tajikis-
tan, which send a large num-
ber of seasonal and long-term
migrants mainly to Russia and
Europe, will also be hard-hit,
along with Nepal and the Phil-
ippines, it said.
“The worst-case scenario
assumes that the domestic
outbreak control and resump-
tion of economic activities
take a year’s time,” it said.
“Uncertainty looms about the
timing of full recovery, even
as lockdowns are lifted.”
Developing Asia, a group of
45 countries in the Asia-Pa-
cific region, is forecast to
clock up its weakest growth in
nearly six decades this year,
the lender had forecast in its
Asian Development Outlook
report released in June.
08 TUESDAY, 4 AUGUST 2020
NEW DELHI

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

WHY BHARAT WON’T LIFT

A TROUBLED ECONOMY
Many theories have been floated about a farm economy-fuelled revival. Here’s why those hopes are unrealistic

During the last two decades, the farm sector

has grown by a little over 3% per year on
average. Given this, there is no way that
only agriculture doing well is enough to
revive the overall economy. PTI

Vivek Kaul capital may lead to further stress on varied availability of work under the deposited in Jan Dhan accounts has also What this means is that as covid
mint
feedback@livemint.com employment.” scheme across different states. States like SHORT helped. Of course, the MGNREGS budget spreads through states which have a
MUMBAI There have been huge job losses in the Andhra Pradesh and Tamil Nadu have STORY has been increased helping fund more weaker medical infrastructure, the one
MSME sector. The third national multi- better coverage under the scheme in work under the scheme. Essentially, this big way for governments to tackle it will

O
ne of the theories that institutional survey on MSMEs in India comparison to states like Uttar Pradesh, means money has been put into the be to enforce local lockdowns. And this
emerged quickly after the estimates that 25-30 million jobs had Bihar, Jharkhand, etc. A bulk of internal WHAT hands of rural citizens. But can this help can’t be good news for the economy.
pandemic began to spread been lost in the MSME sector by the end migrants in India’s cities come from the pull up the overall Indian economy as is
was that the agricultural of June 2020. It further estimates that latter states and those are the geograph- While India’s economy is being suggested? THE TRACTOR SALES PUZZLE
expected to contract this year,
economy would save the another 10-15 million jobs will be lost by
day for the Indian economy. In a year in August.
which the wider economy is expected to The MSME sector employs around 110
ies where more work under MGNREGS
needs to be created. agriculture is expected to
continue to grow. This fact has
Other than a do-gooder government,
there are other factors at work as well.
With many workers moving back to their
T ractor sales in June have gone up
and this has been widely cited as a
sign of rural recovery. There are multi-
contract, agriculture is expected to con- million individuals. Hence, even at a con- THE PROCUREMENT PARADOX given wings to the theory that native places from urban centres, inter- ple problems with this argument. First,
rural demand will save India.
tinue to grow. Some early data—such as servative level of 35 million job losses,
the jump in tractor sales and robust close to a third of the jobs in the sector
motorcycle sales—gave wings to what would have disappeared by the end of
A nother reason offered in support of
the rural economy doing well this
year is the massive government procure-
nal remittances are bound to come down
dramatically during this financial year.
This impacts the rural economy in a neg-
April to June is traditionally the tractor
buying season. Given that April and May
barely saw any sales, June sales could
was at best a very weak theory. this month. ment of wheat. The government buys BUT ative way. just be pent up demand.
The weakness of this thought comes In fact, the job losses in the MSME sec- rice and wheat directly from the farmers As analysts at Credit Suisse referred to But even if we ignore that, one needs
from the assumption that the agricultural tor are clearly visible in the massive through the Food Corporation of India Agriculture and rural are not earlier point out: “We find that the net to take into account that tractors are just
economy and the rural economy are one demand for work under the Mahatma (FCI) and state procurement agencies at synonymous. Even in an monthly gain from oft-discussed reasons too expensive for a normal farmer. In
and the same thing, which they aren’t. Gandhi National Rural Employment a minimum support price that it sets agricultural household, only 35% is approximately ₹75 bn, or 0.9% of rural 2019-20, a little over 700,000 lakh trac-
Guarantee Scheme (MGNREGS). Indi- every year. Between April and June this of the income comes from GDP: ₹350 bn/month of fiscal support tors were sold in India. Assuming that an
RURAL IS NOT ONLY AGRI viduals who have lost MSME jobs—both year, the government has procured cultivation; another 34% comes offset by ₹275 bn/month decline due to average tractor costs ₹500,000, this
from wage labour.
T he Nabard’s All India Rural Finan- in rural and urban areas—are looking for
cial Inclusion Survey 2016-17 pub- work under MGNREGS.
lished in August 2018 found that only Between April and July this year, 125
388.81 lakh tonnes of wheat directly from
farmers. This is a jump of 13.9% from the
total amount of wheat procured in
lower remittances, weak agri-perisha-
bles, and low agri credit growth.”
Clearly, this is barely enough to get the
amounts to around ₹35,000 crore. The
size of the entire agriculture economy in
2019-20 was at ₹32.6 trillion. Hence,
23% of the income of an average rural million households demanded work 2019-20. Over and above this, the price at MOREOVER rural economy going, forget the overall tractors form an insignificant part of the
household came from what can be cate- under the scheme. In fact, between April which the government has been buying economy. overall agricultural economy and their
gorised agriculture (19% from cultivation and July 2019, 90 million households wheat this year has been increased by Indicators like tractor sales or increased sales only indicate that
and 4% from livestock rearing). had demanded work under the scheme. 4.6% to ₹1,925 per quintal (100kgs). increased govt procurement of WEAK STATE FINANCES extremely rich farmers are doing well.
foodgrains affect only a small
Interestingly, even in an agricultural Hence, the work demanded under the
household, only 35% of the income came scheme this year has gone up around
from cultivation. In comparison, 34% of 38%.
Hence, wheat farmers have made more
money by selling wheat to the govern-
ment this year than last year. Does this
slice of the agri economy. It
would be misplaced to read
O ver the last five years, the total They neither reflect the state of the
expenditure of the state govern- overall agricultural economy, nor the
ments has been around 89% more than rural economy for that matter.
the income in agricultural households What does this tell us? The govern- mean that the rural economy will now do these as signs of a rural revival. that of the central government. In To conclude, it is worth remembering
came from wage labour. ment pays an average of ₹202 per day well as these farmers might now go out 2020-21, this is bound to take a beating that the share of agriculture in the
In a note dated 20 July, analysts at under this scheme. The scheme is self-se- and spend money? as tax collections of state governments Indian economy has been falling over
Credit Suisse point out that agriculture lecting and pays a low daily-wage. Hence, Procurement at MSP benefits only curement of rice later this year. But the (primarily through a tax on real estate the years. It had stood at 54.1% of the
forms around 29% of the rural economy. only those who want to work under the those farmers who produce enough to be impact of this on the rural economy will transactions, excise duty on alcohol and economy back in 1960-61 and has come
The non-agricultural rural economy con- scheme actually end up working in it. able to sell to the government. Over and be limited. sales tax on petroleum products) have down to 13.4% in 2019-20.
sists of construction, manufacturing, Work demanded under the scheme has above this, they need to be in a position to The agricultural economy also consists collapsed. Also, with the state govern- The question is: How can a sector,
financial services, communication and gone up by 38% and this tells us that the incur the upfront expenses involved in of more than just rice and wheat. As sup- ments having to allocate money towards which is anywhere between one-sev-
the government. With cities running out non-agricultural part of the rural econ- selling to the government. Also, most ply chains have broken down and hotels fighting covid, expenditure on every- enth and one eight of the overall econ-
of land, a bulk of the new factories have omy, which forms more than 70% of the importantly, the procurement opera- and restaurants have remained shut, thing else will have to come down. This omy, revive the country’s economic for-
come up in rural areas rural economy, is not tions of the government are concen- everyone from vegetable to fruit growers will impact rural tunes?
in the last two decades. generating enough trated in certain parts of the country and to dairy and poultry farmers have had a growth negatively. During the last two
This has helped in job Of the 63 million MSMEs, work, forcing people tend to benefit the farmers in those parts. tough time over the last few months. Besides, post-June, Tractors form an insignificant decades, the farm sec-
creation and in the which account for 30% of towards MGNREGS. As the Commission for Agricultural There are no MSPs for vegetable and covid is now spreading part of the overall tor has grown by a little
movement (albeit slow) This can’t be good Costs and Prices points out in the context fruits given their perishability. It is worth beyond India’s big cit- over 3% per year on an
of people from agricul- GDP, about half are in rural news despite the fact of wheat: “For example, in Uttar Pradesh, mentioning here that since 2012-13, the ies. As the Credit Suisse agricultural economy and average. Given this,
ture to manufacturing, a areas. These MSMEs have that some work is better the largest producer of wheat in the total horticulture production (everything analysts point out: their increased sales only there is no way that only
more productive sector. than no work and helps country, only about 7% of wheat growers from vegetables to fruits to spices to flow- “Covid-19 is now agriculture doing well—
In fact, of the 63 mil- been going through a tough in bringing down the are covered under procurement opera- ers to honey to plantation crops) has sur- spreading rapidly in indicate that extremely rich even accounting for its
lion micro, small and unemployment rate. tions and in Rajasthan, about 4% farmers passed the production of food grains. Tier-3/4 cities (which positive spillover on the
medium enterprises time Also, not every house- are covered. On the other hand, more Hence, saying that the entire agricultural some call ‘rural’), and farmers are doing well. rural economy—can
(MSMEs) which con- hold that demands work than 80% of wheat growers in Punjab are economy has been doing well isn’t cor- possibly onward to revive the overall econ-
tribute to around 30% of India’s gross under the scheme gets work through it. getting the benefit of procurement while rect. There are many farmers out there truly rural areas; this would stall the omy, simply because its share is too
domestic product (GDP), around 50% are Of the 125 million households which have the state accounts for around 3% of total with very little government support. rural momentum.” small and it grows too slowly.
in rural areas. These MSMEs have been demanded work this year, around 104 wheat growers in the country.” Again, this will impact some states All these reasons essentially tell us
going through a tough time during the million households (or around 84%) have The excess procurement comes with FALL IN REMITTANCES more than others. The medical infra- that while the agricultural economy and
pandemic. managed to get work. This has been pos-
As the Reserve Bank of India’s latest sible given that the government has
systemic risk survey points out: “The increased the budget of MGNREGS to
its own costs. It encourages farmers to
grow rice and wheat at the cost of other
crops—everything from pulses to oil-
O ther than higher wheat procure-
ment, the government has tried to
help the rural economy through the dis-
structure varies across the country. Doc- the rural economy may end up being in
tors are not uniformly spread all across a better shape than the urban economy
India. Karnataka with a population that during the course of this year, they are
MSME sector is affected because of a lack more than ₹1 trillion this year. seeds. Of course, the government doesn’t tribution of free rice, wheat and pulses is less than one-third of Uttar Pradesh really not in a position to drive growth
of cash flows. Low demand, lack of man- Also, the all-India data for MGNREGS think about second-order effects and under the Pradhan Mantri Garib Kalyan has 1.23 lakh doctors. Uttar Pradesh has across the overall economy.
power, stuck working capital and a lack of hides a very important point, which is the given this, there will be an increased pro- Ann Yojana. The ₹1,500 which has been 77,549 doctors. Vivek Kaul is the author of Bad Money.
 NEWS TUESDAY, 4 AUGUST 2020
NEW DELHI 09

WHO to meet Indian team MODI FULFILLED BJP’S AGENDA

BUT IS YET TO WIN TRUST OF ALL
on high sero-positive rate STRAIGHT
Arab countries, in this matter.
Before this decision, a lot of preparation was
done on the internal front. The Amarnath Yatra
was halted with the deployment of security for-
F O R WA R D ces in Jammu and Kashmir before deciding to
remove Article 370. Tourists were being sent
SHASHI SHEKHAR back. Everyone understood that something big
Studies in metros suggest number of people exposed to covid could be much more was going to happen, but no one expected this.
Respond to this column at All major political leaders were arrested or put
feedback@livemint.com under house arrest as soon as the decision was
Leroy Leo taken. Barring Omar Abdullah, all top Kashmiri

P
leroy.d@livemint.com rime Minister Narendra Modi is going to leaders, including Mehbooba Mufti, are still
NEW DELHI participate in the auspicious ceremony to under house arrest. But this was not the first time
begin Ram temple construction in Ayo- for Kashmiri leaders. Sheikh Abdullah, the tallest

T
he World Health Orga- dhya on 5 August. Is it just a coincidence that leader of Jammu and Kashmir so far, was placed
nization (WHO) will Love him or exactly one year ago, on this day, with the abroga- under house arrest on 8 August 1953. He
hate him,
hold a meeting with an Elon Musk is
tion of Article 370, a special provision for Jammu remained in jail till 1964. Later, the separatists of
Indian delegation later enjoying a and Kashmir, the basic changes in the constitu- Hurriyat Conference, terrorist sympathizers or
this week to analyse the spectacular tional and geographical situation of the state other political figures, have been in and out of jail
unusually high rate of exposure to run were made? Are these decisions going to have an as the situation required. That is why they were
the novel coronavirus found in the bit.ly/31druIa effect on the interaction of society and politics? no longer in a position to resist such a huge inter-
sero-surveillance studies con- It was never a secret that since the inception of vention by Delhi. Those who thought that there
ducted in Delhi and Mumbai. the Bharatiya Jana Sangh, the construction of the would be great resistance in J&K have been
“What we are finding generally ‘grand’ Ram temple in Ayodhya and removal of proven wrong in the last one year.
is that most of the sero prevalence Article 370 were always the main agenda of the Ayodhya is a completely different case. India’s
results find that less than 10% of saffron party. But, it was Modi who proved his Supreme Court gave its decision after a long
the population is positive, sero- mettle by carrying out this agenda to its final cul- debate. The 162-year-old dispute had become
positive, indicating that they had mination. Not only this, on issues such as triple too tedious for the country. So people accepted
an infection... But the two studies talaq and Citizenship (Amendment) Act (CAA), the decision of the court as destiny. The Prime
that you point out in India are he always pushed the agenda and ideology of his Minister is going to
indeed very, very interesting and party. Being a politician, he knows that his deci- Along with give a direct message
we need to look at a few things,” sions attract a majority of India’s population. He political victory, to Hindu believers by
said Maria van Kerkhove, WHO’s is hell-bent on capturing 51% of the votes for the attending the pro-
technical lead for covid-19 emer- BJP, a long-cherished dream of the Rashtriya the BJP will also gramme on 5 August.
gency programme. Swanyamsevak Sangh. have to take This is surely going to
The WHO will look at whether Is this possible? We will discuss this later. Let’s care of social help the BJP in the
the studies focus on a specific pop- first talk about the risks behind these decisions. harmony coming days. Elec-
ulation, or a wider population, and After the demolition of Babri Masjid in 1992, tions are on the cards
the assays used. “We will fold these A medical personnel collects a blood sample during a serological survey in New Delhi. HT and Operation Bluestar, Indian prime ministers in Bihar in November
into our general understanding had to give clarifications about these incidents in and then in West Bengal, Assam, Kerala, Tamil
and we look forward to hearing The high exposure rate led to to it. Sero-surveillance usually 23.48% recorded in the survey. almost every foreign trip. Liberal leaders of the Nadu and Puducherry by next May.
from the actual researchers who concerns that the number of peo- shows a higher rate of exposure to The WHO on Monday also West feared that the interests of minorities might As I said at the beginning of this article, along
were carrying out these studies, ple who were exposed to the virus the disease compared to the num- expressed concerns over the rising not be safe in India. The biggest problem in with political victory, the BJP will also have to
later this week,” she said. could be multifold, compared to ber of patients diagnosed with the positivity rate, which is the pro- resolving the issues of Article 370, the Citizen- take care of social harmony. Those who main-
A sero-surveillance conducted the people who were tested posi- disease. In India’s case, the differ- portion of people testing positive ship Law and Ram temple was international pub- tained silence on the issues of triple talaq and
by the Union health ministry in tive through RT-PCR tests. ence has been stark. compared to the total number of lic opinion, which needed to be taken care of. The Ram temple, suddenly erupted on the issue of the
New Delhi found that tests, and the spread of the Prime Minister had started to hone his strategy CAA. More than two dozen people were killed in
23.48% of the national CAUSE FOR CONCERN disease in rural India, right from his first term. the violence. Opponents of CAA sat on long dhar-
capital’s population had a which has poor health In his first term he coined the slogan “sabka nas, which were not dispersed by the govern-
history of being infected SERO-surveillance A sero- surveillance ANOTHER study in EXPOSURE rate led infrastructure. saath, sabka vikas” (collective efforts, inclusive ment’s efforts, but by the coronavirus outbreak.
with SARS-CoV-2, the involves antibody
tests on blood to
in New Delhi found
that 23.48% of
Mumbai found 57% of to concerns that no.
the participants in of people exposed
“The worrying aspect is growth), after winning the next general election, There is apprehension in this section that after
novel virus that causes look at a person’s people had a history slums had been could be more than that the positivity rate con- he added another ‘sabka’ in this slogan—“sabka Ayodhya, there may be similar efforts for Kashi
covid-19. Another study history of infection of covid infection exposed to covid that of RT-PCR tests tinues to increase and is vishvas” (trust of everyone). Obviously, here and Mathura. The development in Kashmir also
conducted on 6,936 peo- now at about 12.5%. So, it ‘sabka’ means both the minority and majority. He prompted China to raise the pitch along the Sino-
ple from three municipal does demonstrate that the actually was giving a clear message within and Indian border. Beijing may now try to use it on
wards in Mumbai found that 57% A RT-PCR test detects if a At 1.8 million, the total number disease is circulating intensely. As outside the country before taking some tough different diplomatic levels. That means the gov-
of participants in slums had been patient has contracted covid-19, of patients who tested positive in I said, India is a large country..., decisions. The result was that when Pakistan ernment’s job is still not complete. In terms of
exposed to and developed anti- while sero-surveillance is con- RT-PCR test in India is less than but the disease is moving around tried to rake up the issue of Article 370 and the popularity, Modi has left all BJP leaders, includ-
bodies against SARS-CoV-2 virus. ducted through antibody tests on 1,000 per million population. In from urban to rural and back to partition of Kashmir, along with China at the UN ing Atal Bihari Vajpayee, far behind. But the real
In residential societies of the city, blood, which look at whether a Delhi, the number of patients who urban,” said Michael Ryan, WHO’s it had to face the odds. Almost all the major coun- test will be to win the trust of everyone.
the study found a 16% exposure person has a history of infection to tested positive is less than 0.7% of executive director for its health tries treated it as India’s internal issue. Modi had Shashi Shekhar is editor-in-chief, Hindustan.
rate. the virus and developed immunity the city’s population against the emergencies programme. successfully persuaded the West, as well as the His Twitter handle is @shekarkahin

RBI board to meet on Blue-collar jobs show revival signs in metros Cipla India sees spate
14 Aug over dividend
FROM PAGE 1
trillion to the central exchequer
for the year to June 2019, includ-
ing ₹52,637 crore of excess con-
tingent reserves. The panel
headed by former RBI governor
Bimal Jalan set up in 2018 had
recommended a formula for the
sharing of its profits with the
government. The panel had
approved a record dividend and
has said an interim dividend
could be paid only “under
exceptional circumstances.”
An email sent to RBI didn’t
elicit any response
RBI and the government fol-
low different fiscal years. RBI is
in the process of changing its fis-
cal to the same as that of the gov-
ernment from 1 April 2021.
RBI did not pay any interim
dividend to the government for
the year to June 2020 as the
Jalan panel had recommended
of exits in shake-up
that interim dividend should be
paid to the government only in
“exceptional circumstances”.
The dividend from RBI will
come at a time when the Cen-
tre’s finances are under severe
strain. The government’s fiscal
deficit as on 30 June touched
83.2% of the full-year target of
₹7.96 trillion, primarily on a
sharp fall in revenues due to the
nationwide lockdown.
“The liquidity situation,
given that there has been a pre-
ponderance of excess liquidity
in the banking system, which is
parked with RBI, may have a
connotation in the form of a
lower dividend to govern-
ment,” said Soumyakanti
Ghosh, chief economist, State
Bank of India. “Dividend trans-
fer also needs to be juxtaposed
against the possibility of mone-
tization of government deficit
in the current fiscal,” he added.
FROM PAGE 1
firmed their intent to increase
the hiring of blue-collar and
entry-level workers in the third
quarter of 2020 against 86% in
Mumbai and 76% in Delhi,
according to the Employer Sen-
timent Survey by OLX People,
an HR platform. The company
surveyed around 200 compa-
nies across 14 cities during June.
The top metros have seen an
exodus of migrant workers fol-
lowing the imposition of lock-
down beginning 25 March. In
Maharashtra, home to the larg-
est migrant workforce in the
country, around 1.15 million
migrant workers had left by the
end of May, while in Delhi,
60-70% of the labour force left
for their homes.
Almost all companies in
these segments expect a com-
plete revival by December. As
consumer demand revives
beyond non-essential items,
demand for labour, too, will
While a lot of firms laid off staff in the past few months, further
downsizing is unlikely, according to some analysts.
pick up gradually, according to
staffing solution companies.
“Most employment recovery,
whatever little is happening, is
likely to happen in Bengaluru,
Delhi, Pune, Hyderabad, Chandi-
garh, Mumbai and Kolkata. A
large chunk of the movement will
happen in tier-I cities,” Rituparna
Chakraborty, co-founder and
executive vice-president, Team-
lease Services, told analysts.
Businesses driving demand
include education services, agri-
culture and e-commerce start-
BLOOMBERG
ups, and testing. “We are expect-
ing much deeper play in e-com-
merce for sure for obvious
reasons. Healthcare and
pharma, again, for obvious rea-
sons,” added Chakraborty, refer-
ring to businesses that have ben-
efited from the pandemic.
“It is exciting to see that the
job market is showcasing green
shoots of recovery, especially as
the economy gradually opens
up and economic activity con-
tinues to gather pace. Strong
growth indicators for recovery
are visible not just for white-col-
lar workers or the formal econ-
omy but also in the informal sec-
tor,” said Tarun Sinha, head of
OLX People (part of OLX India).
“We are weeks away from what
is otherwise India’s startup sea-
son. And as August and Septem-
ber come in, there are more and
more clients who start to give
orders in terms of hiring posi-
tions. We are now looking at
about twice the growth in new
hiring mandates (client require-
ment) in July over June, but this
is still about 60% of pre-covid
times,” said Lohit Bhatia, presi-
dent of Workforce Manage-
ment, Quess Corp.
Bhatia added that while a lot
more clients downsized compared
to those who added employees
during the past months, further
downsizing is unlikely.
Clients are still watching the
Central government and state
regulations on further lock-
downs before taking any strate-
gic decisions on hiring people.
FROM PAGE 1
since June 2012 and was the
head of US business and its
US-based subsidiary InvaGen
Pharmaceuticals from April
2016 till earlier this year.
Before that he had headed
the company’s respiratory
business, one of its major seg-
ments, according to his
LinkedIn profile.
Khanna has been at the Nikhil Chopra, Cipla’s chief
company since June 2016. His executive of India business.
exit was also a personal choice
after a long tenure, another The company has
official said. appointed Arunesh Verma as
Khanna’s exit was also a per- CEO of its North America
sonal choice after a long ten- business in December.
ure, another official said. In its statement, Cipla said
The two officials said the its “business momentum con-
company has a strong pool of tinues to be on strong footing
executives that is ready to fill and we are backed by a solid
the roles, and Chopra’s workforce of 23,000 employ-
replacement will be ees who are driving Cipla in its
announced soon. next growth phase.”

Goldman, Bank of America left off Ant IPO for work with Alibaba rivals
Bloomberg record $29 billion IPO. parts in the US or Europe to Ltd to advise on China-related declined to comment. Ant and 55.1% in the fourth quarter,
feedback@livemint.com The directive shows that demand non-compete com- deals. Goldman and Bank of Alibaba declined to comment according to consultant iRe-
Wall Street banks are having to mitments as a show of loyalty, America’s recent work with Ali- in separate emailed statements. search. Tencent has 38.9% of

G
oldman Sachs Group
Inc. and Bank of Amer-
ica Corp. were left off
Ant Group’s upcoming stock
sale in Hong Kong because of
their past work with rivals of its
affiliate Alibaba, according to
people familiar with the matter.
Bankers have been told by
senior executives at Alibaba
Group Holding Ltd, which
owns a third of Ant, that they
should refrain from doing deals
for its competitors if they want
business from Jack Ma’s
sprawling empire, the people
said. Ant has kicked off plans to
go public in Hong Kong and
Shanghai in offerings that
could top Saudi Aramco’s
make early bets on which firms
to stick with in China, espe-
cially as juggernauts like Ali-
baba and Tencent Holdings Ltd
extend their tentacles into hun-
dreds of businesses in finance,
transportation, retail and
entertainment.
“The duopoly issue is not
unique to China, but the scale
and scope of Alibaba and Ten-
cent’s business operations cre-
ate an excruciating dilemma for
investment banks,” said Andy
Mok, a senior research fellow at
the Center for China and Glo-
balization in Beijing. “Alibaba
and Tencent’s businesses are so
big, you can risk being blocked
out of a significant future reve-
and to ensure that sensitive
strategies don’t land in the
hands of competitors. And with
fewer deals to go around, bank-
ers in the hyper-competitive
Chinese market have little
choice but to comply.
Though minor distribution
roles on Ant’s Hong Kong IPO
are still up for grabs, those don’t
Ant has kicked off plans to go public in Hong Kong and Shanghai offer the out-sized fees that
in offerings that could top Saudi Aramco’s record $29 billion IPO. banks can expect from leading
the sale.
nue stream.” ensure separate teams handle “Competition has increased
While bankers everywhere deals for the likes of Alibaba and Chinese issuers have got-
have to be careful doing work and Tencent, that’s proving to ten strong bargaining power,”
for their clients’ rival firms, not be enough, the people said Bob Dodds, who worked as
Chinese conglomerates are familiar said. an investment banker at China
taking it to a new level. Even Chinese clients are much International Capital Corp.
though banks have firewalls to more likely than their counter- before setting up DRP Capital
baba rivals include $7.7 billion Ant is aggressively compet- the market.
in stock sales for Tencent- ing with Tencent’s WeChat Pay Ant hired Citigroup Inc.,
backed Pinduoduo Inc. and to maintain its dominance of JPMorgan Chase & Co., Morgan
JD.com Inc. in the last two China’s $29 tril- Stanley and CICC
years, helping these companies lion mobile pay- The sale is to lead its Hong
build their war chests to take on ments space. It has expected to raise Kong IPO. The
their larger competitor in the been pitching dig- more than $10 sale is expected to
hotly contested e-commerce ital payment ser- billion and could raise more than
arena. The two banks have vices to the local $10 billion and
value Ant
reaped at least $70 million from arms of KFC Hold- could value the
advising Pinduoduo and ing Co. and Mar- Financial at firm at $200 bil-
JD.com on stock deals, accord- riott International $200 billion lion, people famil-
ing to data compiled by Bloom- Inc. as it trans- iar have said. Ant
berg. The figure doesn’t include forms its Alipay hasn’t selected
the undisclosed fees of a $1 bil- app into an online mall for banks for the Shanghai portion,
lion bond sale by Pinduoduo in everything from loans and though global firms will proba-
September and the $4.5 billion travel services to food delivery. bly be left out because lead
secondary listing by JD.com in Alipay’s share of mobile pay- underwriters for any IPO on the
June. Representatives at Gold- ments has increased for three tech-focused Star board must
man and Bank of America consecutive quarters, rising to buy shares in the deal.
10 TUESDAY, 4 AUGUST 2020
NEW DELHI PERSONAL FINANCE

When it’s okay to question your adviser

Quizzing your financial planner on a portfolio’s performance is fine but make sure you do the right return comparisons and have a fair expectation
ISTOCK
Tinesh Bhasin dabbled in direct stock investment during It’s the responsibility of the planner to when Franklin Templeton (FT) Mutual
tinesh.b@livemint.com
When sticking with your the lockdown and may be sitting on hand- set the return expectation right. “If a client Fund announced winding up of six debt
financial planner is right some profits made between 1 April and 29 has expectations of 15-20%, we tell them schemes in April this year.

I
n the second week of July, a senior
executive with a private firm called up
Malhar Majumder, partner, Positive
Vibes Consulting and Advisory, a
financial planning firm. The caller was
unhappy with his existing adviser as his
portfolio was down around 20% in the
past few months, and wanted to avail of
Majumder’s services.
The potential client had a 10-year rela-
tionship with his existing adviser. When
Majumder looked at his portfolio, he
didn’t find any unnecessary investments
like unit-linked insurance plans (Ulips) or
too many mutual funds. “Given the
requirement of the client, any adviser
would have done the same. I told him that
if it’s about returns, he shouldn’t change
his adviser,” said Majumder.
Other planners have had similar experi-
ences recently. “We do get potential cli-
ents who think their existing planner has
not done enough due to which portfolio
returns are suboptimal. But, lately, such
cases are on the rise,” said Vishal Dhawan,
founder, Plan Ahead Wealth Advisors, a
financial planning firm.
The primary role of a financial planner
is to help clients meet their goals by ana-
lysing different factors and identifying
suitable asset classes. They are supposed
Sets the right expectations for
1 your money goals
Keeps you from trendy investments
2 or panic redemption
Admits a mistake to you
3 whenever it is made
Is proactive in protecting
4 your investments
Handholds you when asset classes
5 underperform, portfolio drops
to focus on mitigating risk, and not sug- loss, and whether there are enough funds
gest products that offer the highest if they want to start a new business.
returns. But this doesn’t mean that a client But with medium-term returns in the
should not raise the issue of portfolio per- present scenario depressing, investors
formance with the adviser. may feel discontented. The average cate-
gory returns from most large-cap equity
DO THE RIGHT COMPARISON funds are flat in the past one and three
Investors have started taking stock of their years, and in the red for most mid- and
portfolios as there is uncertainty around small-cap funds. What could be adding to
jobs and businesses. Common queries this discontent is comparing the returns
from them include how long the contin- from recent direct stock investments with
gency fund will last, if the portfolio can the returns from long-term portfolios.
help them sustain longer in case of a job According to planners, many investors
July, as the Sensex is up 29% in this period.
One of Majumder’s clients was unhappy
about the returns from his mutual fund
portfolio. He redeemed the investments
to trade in futures and options (F&O).
“The client is absolutely confident of mak-
ing 3-3.5% monthly returns (36-42%
annually) through F&Os,” said Majumder.
Comparing short-term returns of direct
equity investments with the portfolio that
a financial planner has built is fallacious.
Also, consistently making profits in direct
equity investment is not possible.
UNREALISTIC EXPECTATIONS
Unrealistic return expectation is one of
the common problems that planners face
when investors approach them. “Clients
expect that equities will give them 15-20%
returns annually, and it would be linear
(they would get that return every year). I
have to make them understand that equi-
ties are volatile and every year the returns
will differ,” said Melvin Joseph, a Sebi-
registered investment adviser and
founder of Finvin Financial Planner.
It’s tricky to onboard investors who are
unhappy with their existing planner
because the portfolio returns don’t meet
expectations. The same clients could raise
similar issues with the new adviser.
historical data shows that it’s not possible Some advisers have been active in mov-
in a diversified portfolio,” said Deepesh ing clients’ debt fund investments to
Raghaw, a Sebi-registered investment schemes that have over 85% AAA-rated
adviser and founder of PersonalFinance- papers in their portfolio. But those who
Plan. One of the ways investors should set did not saw clients’ money getting stuck.
their return expectation is by looking at “While no one knew that schemes would
average inflation. It would be wounded up, there were
help calculate the real rate of Comparing short- signs of stress due to the
return. For equities, it should term returns of quality of papers. If an
be 3-4% above inflation. direct equity adviser didn’t move out of it,
Another way is by looking investments to there’s nothing wrong if the
at the fixed deposit (FD) rates client questioned the plan-
the portfolio that ner,” said Arnav Pandya,
of public sector banks, which
have the highest safety. At a planner has financial planner and
present, State Bank of India’s built is fallacious founder, Moneyeduschool, a
one-year FD is giving 5.1%. In financial literacy initiative.
July 2019, the rate was 7%. Raghaw and Majumder
“Investors should expect equity returns shifted most of their clients before the FT
to be one-and-a-half times of SBI FD rates. episode. But both have a few clients whom
In the current scenario, they would be they couldn’t ask to move out of the funds
about 8%. If the FD rates are at 8%, equity in time as their portfolios were not reflect-
returns expectations should be 12%,” said ing on their software. They owned up the
Dhawan. But if an adviser hasn’t set expec- mistake. Clients were unhappy but con-
tations right, there’s nothing wrong in the tinued with them.
client questioning the performance. Planners are supposed to take certain
decisions in the interest of clients. But
PROACTIVENESS OF ADVISERS there are many occasions when their calls
For close to two years, debt funds have may go wrong. So before you think about
been facing problems of rating down- changing your planner because of returns,
grades or companies defaulting on pay- consider whether he has been acting in
ments. One of the biggest blows came your best interest or not.

EXPERTSPEAK An NRI can file ITR and claim credit or

refund due out of tax deducted in India
How covid-19 could change Archit Gupta
ISTOCK
deducted tax money and now

the face of residential realty When

I am a non-resident Indian (NRI)
living in the UK. We recently par-
titioned our ancestral properties
and I got my share of ₹75 lakh. I
homebuyers
With covid-19 forcing people to stay in, homes are not only doubling as offices, as people work from turn home
have decided to give this money
home, but are also becoming the space people spend most of their time in. This, together with the builders to my brother. Will there be any
lifestyle changes that the pandemic has brought in, are set to change the residential real estate bit.ly/2PiA4jd
tax implication?
segment in more ways than one. Nilanjana Chakraborty asked four industry experts to weigh in on what —Satendra Yadav
demand-driven changes can be expected in the residential units as the needs of homebuyers change in You have received this money
the wake of the pandemic. from the sale of inherited property.
Any gains from the sale of an inher-
ited property in India will attract cap-
ital gains tax. When the property is
sold after holding for more than two
years, the gains from the sale of such
a property are long-term capital
gains (LTCG), and are taxed at 20%.
To calculate the period of holding,
you can include the period for which
the original owner held it. To calcu-
late LTCG, one has to take the cost to
the original owner, and the date of
purchase of the original owner and
index the cost by applying appropri-
ate CII (Cost Inflation Index). Apply
similar indexation to any cost of
improvements made. Subtract this
ANUJ PURI SHISHIR BAIJAL ANSHUL JAIN TANUJ SHORI from the sale price. The resulting
Chairman, ANAROCK Chairman and managing Managing director, India & SE Co-founder and CEO, Square
Property Consultants director, Knight Frank India Asia, Cushman & Wakefield Yards amount is your capital gains.
Your share in the capital gains
shall be taxable in your hands. Even
though you are an NRI, such a sale
The focus will Covid-induced Focus is now on Many people must be reported in your income tax
return (ITR) in India. In case you do
shift to larger design changes agile designs may consider not want to pay tax on these capital
formats such as may become with workspace buying homes gains, you’ll have to invest them in a
property in India or invest through
2.5, 3 BHK flats redundant soon elements outside cities other means as per the rules applica-
ble for claiming exemption on capital
ASK MINT
m N R I TA X AT I O N
for you or for your brother to whom
you plan to gift this some of the
money. Additionally, since you are a
tax resident of another country,
you’ll have to comply with local tax
regulations with respect to the sale of
the property.
I have completed 230 article
days in FY19-20. Out of which, I
spent 173 days in international
water and the rest in Indian
waters. That means 173 days as
an NRI. My company has
For more stories about how to manage your
money life, listen to the podcast Why Not Mint
Money with Mint’s Personal Finance team on
htsmartcast.com. Invest smartly to make every
they are saying that as I haven’t
completed 182 days, they will not
refund tax money. Will I get tax
money back from the company?
—Santosh
In case you are an Indian citizen
and you leave India as a member of
the crew on an Indian ship; to be resi-
dent in India you must be in India for
182 days.
Such crew is considered as non-
resident Indian (NRI) for income tax
purposes, when they have spent less
than 182 days in India. While calcu-
lating this stay of 182 days, the entire
period mentioned in the Continuous
Discharge Certificate (CDC) shall be
excluded even though the ship may
have been on Indian coastal waters in
its journey. The period begins from
the date entered in the CDC for join-
ing the ship and ends on the date
entered for signing off from the ship.
You can claim a refund out of the
tax deducted by your company by fil-
ing your ITR in India. A non-resident
can file an ITR in India reporting the
income taxable in India and also
claim credit or refund due out of the
tax deducted in India.
Archit Gupta is founder and chief
executive officer, ClearTax. Queries
and views at mintmoney@live-
mint.com

W ith the advent of

work from home, we
may see some of the mid-
R esidential realty is ex-
pected to remain under
pressure due to the erosion
T he covid-19 pandemic is
bringing about some
seminal changes in buying
C ovid-19 has accelerated
consolidation in the
real estate sector. We will
gains from the sale of a property.
Note that there is no tax implication
penny count.

income residential demand
pushed to the far suburbs
and even smaller cities. For
those who can afford it, the
walk-to-work option will
become more important.
For many, the focus will
be on slightly larger for-
mats such as 2.5 and 3 BHK
flats, and on societies with
sufficient security. There
will be increased interest in
integrated townships with
stand-alone social and civic
infrastructure. Proximity to
healthcare, shopping and
of buyer confidence, de-
spite the fact that loans
rates are at the lowest now.
The segment will need re-
medial measures. Demand
will grow when the govern-
ment takes demand-boost-
ing measures by providing
economic stability and
long-term growth.
Space will remain at a
premium in top cities,
therefore, creating designs
to incorporate aspects of
social distancing may be
tough to come by. Any
behaviour for residential
real estate. Uncertain eco-
nomic forecasts and job se-
curity concerns have lim-
ited buyer activity at
present, with decisions cur-
rently being deferred,
though some are looking at
the current market dy-
namic as an opportunity.
Covid-19 has confined
people to their homes and
with a prolonged work-
from-home scenario loom-
ing, many have realised the
inadequacies of their cur-
have only a handful of es-
tablished and renowned
players who will cater to
the majority of homebuy-
ers. Developers with strong
balance sheets will survive.
India never had a de-
Returns on my investments
mand issue, but we always Building a portfolio is a complex exercise, and it has to be maintained too. A person’s portfolio holds different types of assets
had a demand-supply mis- based on her financial goals, and each asset class gives different types of returns, which is why a portfolio must have an ideal mix
match, as most developers of financial products. One must also keep in mind the volatility risk of the asset class, liquidity, lock-in rules and taxation. Here's a
focus at the peak of the pyr- look at how four commonly used asset types—equity, cash, gold and fixed income—have done in different periods.
amid. There are a few cred- Returns (in %)
ible developers with inven- 39.58
tories in the affordable and Equity (Sensex) Cash (liquid fund)
mid-segment housing.
As far as changes in the 39e re.5 8% Gold Fixed income (fixed deposit)

schools will continue to be
relevant. Buyers are in-
creasingly gravitating to-
wards quality developers
with established brands
and quality assurance.
A ready-to-move-in
home will be the first
choice for most people, and
the rest will focus on pro-
jects in advanced stages of
construction with six
months or less until com-
pletion. Branded develop-
ers will corner the market,
as they are most likely to
complete projects on time.
Buyers will prefer projects
with the option to view
them online audio-visually.
change in designing will
have to be done with a
long-term perspective, as
homes take between 36
and 40 months to be deliv-
ered. Pricing would be a
significant factor in bring-
ing back demand once the
economy stabilizes, there-
fore, creating more homes
for price-sensitive buyers
may become a priority for
property developers.
As per reports, we may
have a drug or a vaccine for
covid-19 in a few quarters,
which can make homes de-
signed now, with social dis-
tancing factors in mind, re-
dundant and expensive.
rent homes in terms of ded-
icated workspaces while
support facilities or ameni-
ties and health and safety
have also taken on a vital
importance. Hence, there is
now focus on agile home
designs, which incorporate
workspace elements.
Developers are looking
at such home+office con-
cepts, which will be more
attractive for buyers. Buy-
ing patterns will also gravi-
tate towards established
players offering new pro-
jects even as we see a con-
sistent trend in looking at
ready-to-move-in homes or
those close to completion.
demand scenario is con- Th turn that
en
cerned, homebuyers are gold has giv r
looking for bigger flats over a 1-yea
where they can have a sepa- period
rate room or a corner to 15.88
set-up an office or work
desk. While it would be dif- 12.49
ficult for buyers with bud-
get constraints to buy big- 4.93 5.10 4.90
6.24 5.30 5.99 6.63 5.40
ger homes within city or lo- 3.75 2.90
cations near to central 0.06 0.34
business districts, many are -1.37
exploring suburbs or pe-
riphery of major cities. 1 WEEK 1 YEAR 3 YEARS 5 YEARS
Homebuyers will not
mind the distance from the Data as on 31 July 2020; Look out for returns on various asset classes in this space. For FDs, we use current rates on offer, while returns from
city as they will have flexi- other assets indicate past performance. This is because an investor, typically, looks at current rates of FDs before investing, but relies on past
performance for others.
bility of work from home Equity is the benchmark index return; Cash refers to the average return for liquid funds category as defined by Valueresearchonline; Gold refers
and going to the office only to returns from domestic MCX gold prices; and fixed income is SBI fixed deposit rate. *Other than fixed deposits all returns are absolute.
for a few days in a month. Returns above one year are annualised.
Source: SBI, Bloomberg, Value Research

Maruti Suzuki,
Hyundai seek to
ramp up output
to FY18 levels
FROM PAGE 1
Mint on 18 June reported
that Osamu Suzuki, chairman
of parent Suzuki Motor Corp.,
had written to Maruti’s suppli-
ers, urging them to help the
company in this regard by pro-
ducing more components.
Both Maruti Suzuki and
Hyundai managed to ramp up
production in the past two
months as retail demand
picked up due to faster recov-
ery in the rural markets and a
shift in customer preference
for personal mobility.
Maruti’s domestic wholesa-
les, or factory dispatches,
touched the 100,000 mark in
July, up from 51,274 vehicles in
June and 13,865 units in May.
Hyundai recorded sales of
38,200 vehicles in July, rising
from 21,320 units in June and
just 5,500 units in May.
Both companies though
plan to reduce manufacturing
after the festive season since
the long-term demand sce-
nario is still uncertain due to
the rising tally of coronavirus
cases, said the first person
cited above.
“Both companies are known
for sticking to their production
forecast,” the person added.
A spokesperson for Maruti
Suzuki declined to comment
on the production forecast.
Hyundai did not respond to an
emailed query sent on Mon-
day.
Ever since the easing of the
lockdown, Maruti’s vehicle
production has been trailing
retail sales as demand for its
small cars picked up in rural
and semi-urban markets.
In the fiscal first quarter,
Maruti’s retails stood at
119,000 vehicles against
wholesales of 67,027 units in
the domestic market. Dealers,
as a result, are left with stocks
of less than 30 days.
“As of now, we are not lim-
ited by demand but by supply.
We have suppliers in 46 dis-
tricts in nine states and local
lockdowns are impacting their
operation. We are running the
Gujarat plant with one shift
due to rising covid-19 cases
and plan to start the second
shift from August, which will
help us add another 900 cars
per day,” said Rahul Bharti,
vice-president, corporate
planning and government
affairs, in a post-earnings con-
ference call with analysts on 29
July.
The second person cited
above said Maruti has been
quite bullish about the festive
season as retail sales are pick-
ing up and the production
forecast of 170,000 vehicles
can be achieved due to the
ramp-up at the Gujarat plant,
where popular models such as
Swift and Baleno are made.
“Production in Gujarat
plant could not be ramped up
because of the curfew at night,
and labour issues. Also, the
management expects demand
to sustain till the festive season
in the rural markets and some
uptick in urban demand has
also been witnessed. Produc-
tion though will be reduced
after Diwali,” the person said.
Curtains for some cinema screens Amid churn, non-banks explore consolidation option
FROM PAGE 1
will be any films for release due
to the extended production
halt and the completed films
streaming on digital platforms.
Like India, the world’s big-
gest movie market, China is
witnessing a threat to 40% of its
nearly 70,000 theatres in the
wake of covid, according to a
BBC report. Theatres that shut
in January reopened briefly in
March, but closed again and
have now slowly started to
reopen.
According to Atul Mohan,
editor of trade magazine Com-
plete Cinema, small, single-
screen cinemas were already
struggling to provide entertain-
ment in small towns at low
ticket prices. In the past few
months, iconic Chennai thea-
tres such as AVM Rajeswari and
Maharani have shut.
“So many single screen own-
NEWS TUESDAY, 4 AUGUST 2020
NEW DELHI 11
Wockhardt inks pact with Manufacturing output
shrinks at a faster clip
UK to bottle covid vaccine in July than in June
RAMESH PATHANIA/MINT
FROM PAGE 1
The company will fill and finish vaccine vials at its facility in Wrexham, North Wales lockdowns have affected pro-
duction. “Also, notwithstand-
ing the unlock process, house-
Leroy Leo holds are still not free to move
leroy.l@livemint.com to provide a push to the con-
NEW DELHI sumption cycle. Further, the
beginning of the monsoon has
W
ockhardt Ltd has impacted both construction
entered into a A list of and other infrastructure work,
hand-picked
pact with the UK funds to
thus pushing down the PMI,”
government to fill invest in a he added.
and finish cov- volatile The International Monetary Sentiment towards the 12-month
id-19 vaccine vials at its unit CP market Fund (IMF) last week said business outlook improved for
Pharmaceuticals’ facility in Wrex- bit.ly/39OVXjG high-frequency indicators sig- the second month in a row.
ham, North Wales. As per the agree- nal a plateauing of economic
ment, Wockhardt will fill finish the activity in India, as the positive measures that need to be
vaccines in vials after receiving bulk impact from unlocking is not employed, we now expect a
products from the firm producing as strong as the negative deeper pace of GDP contrac-
vaccines, chairman Habil Khoraki- impact of the lockdown. It tion in Q2 FY21 relative to our
wala said at a press meet on Monday. urged the government to con- earlier forecast. The timeline
Khorakiwala said talks are on with tain the spread of the corona- for a firmer recovery out of the
the Indian government to offer simi- virus pandemic on a priority to contractionary phase is now
lar facility for covid-19 vaccines that make the economic recovery being pushed ahead to at least
will be developed in the country. sustainable. Q4FY21 from Q3FY21,” it
There are also talks with some firms The IMF has estimated the added.
whose vaccines are now in phase I Indian economy to contract by Subdued demand was evi-
and II trials globally. Wockhardt chairman Habil Khorakiwala said talks are on with the Indian government to offer similar facility for 4.5% in FY21, while Goldman dent in the latest PMI by a
“We have been in touch with the covid-19 vaccines that will be developed in the country. MINT Sachs expected the June quar- marked decrease in new
scientific advisor to the Prime Min- ter to be the worst, with gross orders placed with manufac-
ister’s Office, Mr K. Vijay Raghavan, and its spinout company, Vaccitech, developed in the UK are by the & Johnson’s subsidiary Janssen domestic product (GDP) turers during July. Similar to
and we are in communication with and licensed by AstraZeneca. Imperial College in London and a Pharmaceutical, China’s Sinovac, shrinking by 45% the trend for out-
him. We have a covid task force for In June, AstraZeneca had signed joint venture of GlaxoSmithKline US-based Novovax and University of as business activ- Subdued demand put, the pace of
this very purpose,” Khorakiwala a pact with Serum Institute of India, and Sanofi Pasteur. Queensland. In India, Zydus Cadila ity stalled for at was evident in the decline acceler-
said, adding Wockhardt would offer the world’s largest vaccine pro- The UK government has also and Bharat Biotech International least two months latest PMI by a ated from June
its finishing capacity to companies ducer, to supply an additional 1 bil- secured pacts for the supply of total Ltd are conducting human trials of due to stringent marked decrease but remained
who will be making vaccines in bulk, lion doses, principally for low- and 90 million doses of two possible cov- their vaccine candidates. lockdown meas- slower than at the
in new orders
but do not have adequate Experts say filling and fin- ures. height of the cur-
placed with biz
capacity to fill it in the vials. SHOT IN THE ARM ishing of vials would be a key ICRA Ltd ear-
during July
rent crisis.
Khorakiwala said Wock- bottleneck for vaccine pro- lier this month However,
hardt has a capacity to fill VACCINE candidate OTHER vaccine WOCKHARDT is in EXPERTS say filling duction once a successful revised its GDP despite deterio-
finish 400 million doses of AZD1222, invented
by Oxford, is one of
candidates in the UK talks with more firms
are by the Imperial whose vaccines are
and finishing of vials
would be a key issue
vaccine is available. projection for rating operating
vaccines each year at its UK the contenders for College and a JV of now in phase I and II for production once “The challenge is not to India in FY21 to a contraction conditions, manufacturers
plant, with an additional fill and finishing GSK, Sanofi Pasteuris trials globally a vaccine is available make the vaccine itself but of 9.5% from 5% estimated ear- were increasingly optimistic
600 million dose capacity at to fill vials, which sounds a lier, pointing to the continued regarding future activity. Sen-
its plant in Aurangabad, bit silly but that’s what it is. rise in covid-19 infections in timent towards the 12-month
Maharashtra. middle-income nations. Wock- id-19 vaccines being developed by There are not enough vials in the the unlock phase and persist- business outlook improved for
Potential candidates the Mum- hardt’s pact, however, does not the alliance of Pfizer Inc and BioN- world... So, we are looking at pro- ing labour supply mismatches the second month in a row to
bai-based drugmaker will fill finish cover the vaccine made by Serum Tech, and the French firm Valneva. ducing more doses with a limited affecting supply chains and reach a five-month high even
at its North Wales plant include the Institute and is only for vaccine can- Some of the over two dozen can- number of glass vials,” AstraZeneca consumption patterns. “Given though the degree of positivity
vaccine candidate AZD1222—co-in- didates in the UK. didates undergoing human trials executive director and CEO Pascal the severity of the pandemic was still well below the histori-
vented by the University of Oxford Other vaccine candidates being include those by Moderna, Johnson Soirot had said in May. and the duration of the safety cal average.
There may never be a ‘silver bullet’ Trump gives Govt charts arms production goals
FROM PAGE 1
Microsoft 45 FROM PAGE 1 currently available on the To support the local indus-
esus.
days for deal order to enhance procurement
defence ministry’s website for try, critical products and mate-
public comments, which can be rials that are currently
“However, there’s no silver from domestic industry, it is sent until 17 August. imported could be procured
bullet at the moment and there FROM PAGE 1 incumbent that procurement is DPEPP 2020 is envisaged as through long-term orders by
might never be,” he said, add- doubled from the current “a guiding document” to pro- defence public sector under-
ing that for now, stopping out- tember. ₹70,000 crore to ₹140,000 vide a “focused, structured and takings (DPSUs). In such cases,
breaks comes down to the This is a deadline that was crore by 2025,” according to significant” thrust to produc- the resultant single vendor
basics of public health and dis- put to ByteDance and Micro- the draft document. tion of military hardware and should also be acceptable with
ease control—in this case, soft by the Committee on For- India remained the world’s platforms for self- due price discov-
wearing masks, social distanc- eign Investment in the United second-largest arms importer reliance and Estimates suggest ery and negotia-
ing, hand-washing and testing. States (CFIUS), which scruti- during 2015-19, with Russia as exports, the the armed forces tions, the docu-
Tedros said international nizes deals for potential its largest supplier, though defence ministry may spend about ment says. It has
epidemiologists had laid the national security risks, accord- Moscow’s share of the Indian said in a state- $130 bn in capital also proposed
groundwork to retrace the ori- WHO officials said an advance investigation team was not yet ing to the sources. weapons market declined from ment. It is aimed indigenization of
procurement
gins of the coronavirus in back from China, where the virus originated. ISTOCKPHOTO Trump changed his mind 72% to 56%, the Stockholm at “developing a around 5,000
Wuhan, China. following pressure from some International Peace Research dynamic, robust over the next imported compo-
The WHO and Chinese dence and hypotheses gener- current pandemic. It recom- advisers and many in his Institute (SIPRI) said recently. and competitive five years nents by 2025.
experts have drafted the terms ated through this work will lay mended that countries engage Republican party, one of the In May, finance minister defence industry”, These compo-
of reference for the studies the ground for further, longer- in the access to covid-19 tools sources said. Banning TikTok Sitharaman announced a series including aero- nents, including
and a programme of work for term studies,” said Tedros. (ACT) accelerator, participate would alienate many of its of steps for the defence sector, space and naval shipbuilding, alloys and special materials,
an international team led by He pointed out that testing, in relevant clinical trials, and young users ahead of the US including a separate budgetary to cater to the needs of the and sub-assemblies for defence
the WHO. It will include lead- isolating and treating patients, prepare for safe and effective election in November, and outlay to procure locally made armed forces, it said. equipment will be made in
ing scientists and researchers and tracing and quarantining therapeutics. would likely trigger a wave of military hardware, lifting the The paper has recommenda- India.
from China and around the their contacts is the only way More than 18 million people legal challenges. Several prom- limit on foreign direct invest- tions to boost domestic defence On increasing defence
world. in current times to prevent the have been infected with the inent Republican lawmakers ment from 49% to 74% under manufacturing so that the sec- exports, the policy states
“Epidemiological studies disease from spreading. disease and 690,181 have died, put out statements in the last the automatic route and gener- tor complements the govern- defence attachés in Indian
will begin in Wuhan to identify On Friday, the WHO’s according to Johns Hopkins two days urging Trump to back ating a year-wise negative list of ment’s aim to make the country embassies have been mandated
the potential source of infec- emergency committee on cov- University’s live dashboard of a sale of TikTok to Microsoft. weapons that would not be a $5 trillion economy by 2024, and are supported to promote
tion of the early cases. Evi- id-19 met and reviewed the the disease REUTERS imported. The draft policy is it added. exports of defence equipment.
BLOOMBERG
ers are so disheartened that they such desperation yet, but the FROM PAGE 1 disbursements. Parentage- (G-secs) with equivalent tenure
don’t wish to continue in the going is equally tough for them. backed and higher-rated NBFCs has also softened on an average
business at all,” said Bihar-based Gautam Dutta, CEO, PVR Cine- Large NBFCs such as Shri- have access to capital markets by 30-35 basis points since the
independent exhibitor Vishek mas, said it is normal for non- ram Transport Finance, where the cost of funds has sof- beginning of the fiscal,” Soumya
Chauhan. In the past few performing assets to be shut Mahindra and Mahindra tened,” said Pankaj Naik, associ- Kanti Ghosh, group chief eco-
months, top stars such as Akshay each year, but trade experts Financial Services and PNB ate director, India Ratings. nomic adviser, State Bank of
Kumar and Ajay Devgn, who point out that this unending cri- Housing Finance are relatively As on 19 June, outstanding India, said in a report on Monday.
could guarantee returns at a sis will compel many multiplex better off, but may not be free of bank credit to NBFCs rose Ghosh added that in the last
time when Bolly- screens to close stress. Several companies in 25.7% from a year ago to ₹7.98 four months, there were com-
wood is increas- Multiplexes are down, particularly this segment are now looking trillion, although it was down mercial paper (CP) issuances
ingly leaning on not showing such in small towns and to raise money from existing 1.1% since 27 March. worth ₹4.6 trillion, dominated
urban, niche, mul- desperation yet, virgin territories investors through rights issues. Naik added that collections by sectors such as oil and gas
tiplex subjects, but the going is where the pene- “In many instances, we are wit- have improved in June as com- and NBFCs. “Commercial
have taken their
equally tough for tration of movie nessing that there is very little pared to April and May 2020. paper issuance by NBFC has
films Laxmmi halls is anyway or no interest from external That apart, NBFCs have seen a been around ₹1 trillion in the
Bomb and Bhuj: them, according negligible. investors in the fundraising dip in their loans under morato- last four months and the
The Pride of India to some analysts “Also, Bolly- exercise of many NBFCs, which Firms in this segment such as Mahindra Finance are said to be rium as repayment picks up pace. decline in yield of CPs will also
to digital plat- wood will proba- is forcing them to raise money looking to raise money from existing investors via rights issues. Meanwhile, new regional help NBFCs to protect their
forms. Chauhan bly not have fancy internally to meet debt obliga- lockdowns and the rise of cov- margins,” said Ghosh.
says that when these stars do not box office numbers to speak of tions,” a top executive at a large standing borrowings of the ₹1,500 crore in a rights issue. id-19 infections are expected to Although disbursements
care to stand by the sector that is for a while,” Mohan said. “Stars wholesale NBFC said on condi- company, augment long-term Industry experts said that hamper collections for NBFCs. from NBFCs are set to drop in
responsible for their stardom, used to being part of the ₹100- tion of anonymity. capital and resources for meet- recently, the situation has Experts said the market is FY21, they want to be prepared
there is no option for these sin- 200 crore club may struggle to Rural market-focused ing funding requirements for improved to some extent. “For gradually improving for NBFCs for the next round of growth. In
gle screens but to explore rentals reach these numbers with Mahindra Finance said in a the company’s business activi- most NBFCs rated by us, liquid- as mutual fund investments India, NBFCs have been filling
by converting to either marriage many screens out of the game statement on 27 July that it will ties and for general corporate ity buffers are sufficient to take return to the bond market. in for traditional banks with
halls or shopping complexes. until new players come up to use the proceeds of its rights purposes. Shriram Transport care of three months of obliga- “The spread between NBFC their greater reach and quicker
Multiplexes are not showing take their place,” he added. issue to prepay certain out- Finance has already raised tions, assuming no collections and government securities credit approval processes.
12 TUESDAY, 4 AUGUST 2020
NEW DELHI VIEWS

OUR VIEW MY VIEW | BARE TALK

HT

Can India show the path ahead

if the US ends up losing its way?
New Delhi should take the opportunity to influence the world’s future if America lacks the resolve

one to be unreasonable. So, here goes.
An axis of Germany-Russia-China is
becoming more likely, no matter how
infinitesimal a rise in the probability of
such an outcome is, and how unlikely it
was to begin with. With the euro tempo-
rarily becoming stronger against the US
dollar, and the EU seen to have agreed
on debt mutualization among its mem-
V. ANANTHA NAGESWARAN ber-states (not quite; but mainstream
is a member of the Economic Advisory media is painting it as such), and with
Council to the Prime Minister. Germany and the EU under Berlin’s
influence found to be pussy-footing the
China threat, such a scenario is that
the mainstream media would coerce
the administration to fall in line and
agree on a multi-currency standard.
America will need a leader who can
steer the country through this flux. Will
it find one? Unlikely. It might take a fur-
ther decline in US standing, perhaps till
2028, for the country to embark on a
long road to recovery of its status. But, it
might not be the same country again.
Should the scenario outlined above
come to pass, where would it leave
India? It would leave India vulnerable.
The Quad minus the US will be largely

Bank reforms must not

much more plausible than a year ago. rudderless. Indeed, it might fall on India
Fearing isolation and lacking self- to lend substance to the troika. In fact,

O
n the last day of the month of confidence, a new Democratic adminis- India might have to induce greater
July, a risk scenario began to tration in the US (for now, it looks as if resolve among many fence-sitting
form in my head as I woke up this year’s White House election is for nations, not to speak of a reluctant new

be held off by this crisis to the following five news items:

One, China and the European Union
(EU) are to speed up negotiations on an
investment agreement; two, US secre-
the Democratic candidate to lose), while
keeping up the anti-China rhetoric in
public, will quietly try to isolate Russia,
bring Germany around and mend ties
American administration. India will
have to become adept at harnessing US
public opinion and influencing its law-
makers. To gain a chance of succeeding
tary of state Mike Pompeo insisted on with China. The Pew Survey brings out in these extremely challenging tasks,
Thursday that the “tide is turning” in the Democrat ambivalence over China there are at least four prerequisites.
Regardless of covid impact, stake sales in public sector banks would be a good start. We also dealings with China, citing interna- quite starkly. However, the other three One is that India must shed its long-
tional support for Washington’s policies countries will not be persuaded because standing diffidence and must under-
need other structural changes aimed at reducing government dominance of this vital sector even as he expressed “dismay” at the it won’t be credible. American public stand that it has an opportunity to play a
number of countries supporting Bei- sentiment will likely be against it, and major role in influencing global geopol-
jing’s new security law for Hong Kong; even the US Congress may not fully itics. Two, it must be clear-headed, for
three, anti-China sentiment in the US is back this stance. In the wake of such there will be any number of detractors—

S
ometimes, it does take a crisis to set
things right. Recall the severe dollar
crunch three decades years ago that
prompted India to adopt free-mar-
ket principles for its economy.
Now, with covid-19 having wreaked
havoc, magnifying almost every weakness of
our economic system, we must turn our atten-
tion to a sector being counted upon by the
Centre to keep thousands of enterprises afloat:
banking. It remains dominated by public sec-
tor banks (PSBs), which have over two-thirds
of all assets and seem poised to be hit by a sharp
fall in loan repayments after the covid morato-
rium ends. A majority of their borrowers have
deferred their pay-backs, but interest charges
have been piling up and business conditions
are so bad that a large chunk of them may not
be able to meet their eventual obligations. By
one estimate, PSBs may need nearly ₹90,000
crore in extra capital this fiscal year to keep
going. Some of this could be raised if the Cen-
tre were to take the Reserve Bank of India’s
(RBI’s) advice and reduce its stakes in six PSBs
prudent commercial decisions and compete at a “historic high”, a Pew Research sur- overtures, an emboldened China could inside and outside the country—who
with their private sector counterparts. If a vey finds, amid friction over trade, coro- try something even more adventurous will ridicule the effort, as they did when
navirus and human rights; four, China’s or rash in Hong Kong, Taiwan and the India tested nuclear devices. Three,
holding company is given autonomy, it may 14th five-year plan would mark a move South China Sea. India must punch above its weight with-
also be able to judge which PSBs would serve towards “the second centenary goal”, In all likelihood, a new US adminis- out appearing to do so. And, four, India
the country better in private hands, and help namely turning China into a powerful tration will respond fecklessly, further should work on gaining economic girth.
the government withdraw from the sector bit socialist country by 2049 when it cele- eroding its geopolitical credibility at a Adding to economic girth is possible
by bit. To attract investors, these banks would brates its 100th anniversary, the Polit- time when its economic might will look only if economic problems are tackled
buro said; it added that the nation rather brittle, given its sub-par eco- promptly and with confidence. Policies
need loan books that are easy to judge the qual- would continue to enjoy a “strategic nomic growth, large fiscal deficits and a that foster self-reliance can and should
ity of. As of now, they are suspected to be much period of opportunities”; five, in a sepa- mountain of public and private debt. be pursued without being apologetic,
too opaque, a problem worsened by the mora- rate meeting with China’s political The US dollar will be increasingly but with a clear-eyed focus on extract-
torium, an extension of which would make it advisers earlier this week, President Xi threatened by a coalition of the euro ing performance, productivity, good
even harder to obtain clarity. As senior bankers Jinping said, “No country or person can and Chinese Yuan. Stories abound of governance and ethical behaviour from
stop the historical march of the Chinese Russia and China wanting to settle trade the private sector in return. Without
in the private sector like Deepak Parekh of nation’s great rejuvenation.” in currencies other than the US dollar. any obvious intent and plan, India may
HDFC and Uday Kotak of Kotak Mahindra The scenario I will speak of is blue- They may even call for a new Bretton find itself in a position to influence—
Bank have cautioned, deferring repayments sky thinking, or perhaps an exercise in Woods meeting and global arrange- more than ever before—the shape of
beyond their expiry date of 31 August could unreason. It is neither plausible nor ment. The International Monetary global events to come. It should not let
create more problems than it solves. Many probable at the moment, I admit, but Fund will throw its weight behind it. such an opportunity go waste.
anticipating black swans often requires The US will still have a veto, legally. But, These are the author’s personal views
business debtors do deserve relief, but this can
be done through a rejig of their loan terms. As
for borrowers that cannot be saved and are
bound to default, it is best to know of their trail
of bad debts well in time. This would grant the
government time to address a PSB crisis before
it assumes unmanageable proportions.
There’s no way to rule innocent
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Chandigarh*, Pune* Friday, August 6, 2010 Vol.4 No.186 Rs. 3.00 32 PAGES
www.livemint.com

ECONOMY: Subbarao wants RBI

to 51% over the next 12-18 months. In Punjab Delayed recognition of the inevitable has to maintain current role >6
REAL ESTATE: Competition hearing into DLF

men. The only power any

case raises hope for speedy redressal >4

National Bank, Union Bank, Bank of India and
haunted India’s financial sector for decades.
ENERGY: Reliance Industries acquires third
shale gas asset in the US >3
EXCLUSIVE PARTNER
MINT MONEY: Will property ratings by Crisil
really help? >20

Canara Bank, the government’s stake is above In a country where capital is scarce and its cost government has is the power to
SENSEX 18,172.83 æ 44.61 NIFTY 5,447.10 æ 20.75 DOLLAR Rs46.19 Æ Re0.02 EURO Rs60.72 Æ Re0.03 GOLD Rs18,030 ® OIL $81.52 æ $0.71

Zoom debt COMMONWEALTH GAMES INDIA CALLING QUICK EDIT

cover to hit
Govt moves Japan’s Mitsui plans Waving

75%. In State Bank of India and Bank of Baroda, relatively high, money has higher “time value” ECGC hard
B Y A NUP R OY,
K HUSHBOO N ARAYAN
S ANGEETA S INGH
·························
MUMBAI/NEW DELHI
&

to contain
steel plant in Gujarat
B Y M AULIK P ATHAK
maulik.p@livemint.com
·························
AHMEDABAD
JV ROUTE
Mitsui and Ruchi have a 50:50 joint
venture (JV) firm, Indian Steel Corp (ISC)
goodbye
C ompanies often
make bad decisions,
say stupid things and
recall bad products.
While this can happen crack down on criminals. Well,
M umbai-based engineering,
J apanese conglomerate with to anybody, people

it is less. Still, in all, over ₹40,000 could be than elsewhere. This puts a premium on
procurement and con-
struction firm Zoom Developers
Pvt. Ltd, which is set to create a
Rs2,650 crore hole in the bal-
damage
The JV plans to develop a multi-product
revenue of around $30 bil- SEZ in Kutch that will house an don’t react in the same
lion (Rs1.4 trillion), Mitsui integrated steel complex way. When Microsoft
and Co. Ltd, is planning to set announces a browser
up a steel project in India, fol- The $1 billion complex will have a security hole, nobody

when there aren’t enough

ance sheets of 26 banks, may hit
the government-owned Export
Credit Guarantee Corp. of India
Ltd (ECGC) hard.
ECGC has insured most of the
capacity of 1.2-1.5 million tonnes (mt) in
lowing in the footsteps of other the first phase, which would be further
bats an eyelid. But
global companies such as ramped up to 3-4 mt when Google rolls
PTI ArcelorMittal and Posco. back a product, some
Heads roll, Kalmadi Mitsui and its Indian partner While Gujarat has initiated the process
of transferring about 950 ha of govt land
are surprised. And
survives, and Gill seeks Ruchi Group have firmed up many are delighted.

raised at current market levels. resolving debt problems quickly. But, as

Rs2,650 crore worth of guaran-
tees that Indian banks extended
to the ailing company, according
to two persons familiar with the
development.
ECGC has an exposure of
plans to build a multi-product
divine intervention as special economic zone (SEZ) at
India moves a day Tagdi village in Kutch, Gujarat,
which will house the $1 billion
closer to the Games integrated steel complex, said a
state government official famil-
at Tagadi village, ISC has already
acquired about 50 ha of
private land in the area
about 50ha of private land at
Kutch and the transfer process
Google has announced
that it is dumping Wave
(see Page 15). Wave was
an odd messaging system
that created more buzz in
the unveiling than in the

criminals, one makes them.

Rs2,000 crore to Zoom, they B Y L IZ M ATHEW iar with the development, who for another 950ha of govern- using. Few high-profile
said. Indian banks have already liz.m@livemint.com did not want to be named. ment land is on, this person Google products have
·························

The broad goal, though, should go far former RBI Governor Urjit Patel has argued,
started making claims as their Mitsui and Ruchi have a added. The company has ap- fizzled out like this.
exposures have turned bad even NEW DELHI
50:50 joint venture, Indian proached the state government Which explains
as they have embarked on a
large-scale restructuring activity
to put the company back on its
feet. Punjab National Bank, the
lead bank overseeing the re-
S uresh Kalmadi, the man
at the centre of the con-
troversies
the Commonwealth Games
surrounding

(CWG) survived to fight anoth-

structuring activity, has appoint-
ed SBI Capital Markets Ltd (SBI
er day, but three of his aides
were suspended by the Games’
Feeling the heat: Games OC chief
Steel Corp. Ltd (ISC), which is
engaged in the business of set-
ting up and operating steel ser-
vice centres in India. ISC also
has a steel cold rolling and gal-
vanizing plant in Gandhidham
with an annual capacity of
for a total of about 1,000ha of
land for the project.
The steel plant will have a
production capacity of 1.2-1.5
million tonnes (mt) in the first
the blogs and reports
dripping with
Schadenfreude.
Google, however,
seems the least affected
phase, according to a proposal party. CEO Eric Schmidt
sent to the state government by said the company

beyond arranging money to pump back into policymakers face a trilemma. The sector can-
Caps)—the investment banking
arm of State Bank of India—and
Lazard India Pvt. Ltd to revive
the company.
Under such restructuring
plans, a company is normally
given more time to clear debt,
interest rates are cut and even
fresh loans are given by banks.
organizing committee (OC)
The committee, of which Ka-
lmadi is the chairman, termi-
nated the services of Mel-
bourne-based sports market-
ing company that was given a
contract.
Both were presumably done
at the behest of the govern-
Suresh Kalmadi (right) with senior
committee official T.S. Darbari,
who was suspended on Thursday.
NTPC seeks
to sever
200,000 tonnes, which is being
trebled.
ISC will set up the steel and
SEZ projects in Gujarat, ac-
cording to another top govern-
ment official, who also did not
want to be identified. The
company has already acquired
One declares so many things to
ISC. The project also envisages encouraged failure
an expansion plan to raise the and would use Wave
capacity of the steel complex to learnings in other
3-4 mt in the second phase. products. Maybe he was
The projects will help bring trying to save face. Or
in a substantial amount of for- maybe that’s a good
way to run a company.
TURN TO PAGE 2®

PSBs. The country needs them to perform bet- not have PSB dominance under independent
ECGC was established in 1957 ment, which has been at the
by the Indian government to receiving end of flak over al-
Games links

be a crime that it becomes

cover the risk of exporting on
credit. It is the fifth largest credit
insurer in the world in terms of
coverage of national exports, its
website said.
According to a banker familiar
leged financial irregularities in
appointing suppliers, and
sourcing equipment and mate- B Y U TPAL B HASKAR
rial for the Games. The com- utpal.b@livemint.com
mittee also decided to hand ·····················
over the investigation to the NEW DELHI

with the development, banks are Enforcement Directorate,

I n yet another blow to

ter. Short of privatization, which could be regulation—which makes bad debts hard to
asking for their dues from ECGC, which looks at violation of laws the Commonwealth
but the insurer is not in a hurry regulating foreign exchange Games (CWG), state-
to oblige them. “ECGC has asked transactions. owned NTPC Ltd plans to
all banks to form a unit and put Kalmadi couldn’t be drop the use of the event

impossible for men to live

up their claims together. It is
buying time,” said the banker.
ECGC chairman and manag-
ing director A.V. Muralidharan
did not respond to email and
reached for comment on logo from all its commu-
Thursday evening. nications and sever all
At a press conference, OC’s ties with the sporting fix-
secretary general Lalit Bhanot ture because it’s worried
said that it had suspended T.S. that the negative publici-

placed on the agenda for later, one way to do hide—and also expect these banks not to drain
phone calls from Mint. Accord-
ing to his office, ECGC executive
director Geetha Muralidharan is
the concerned person who
could speak on the issue. She
was not available for comment.
Darbari, joint director general ty associated with the al-
of the committee; Sanjay Mo- legations of widespread
hindro, deputy director gener- graft will hurt its own
al; and M. Jeychandren, officer brand image.
on special duty (finance and In addition, India’s
accounts).

without breaking laws.

According to the banker, A government official, who TURN TO BACK PAGE ®
ECGC is insisting that the re- did not want to be identified,
confirmed that all three

this would be to keep their ownership apart public resources. If RBI supervision must not
TURN TO PAGE 2® were associates of Kal-
madi.
In a letter to the com-
mittee earlier this week,
India’s sports secretary
Sindhushree
had asked Kalmadi to
Khullar
“relieve” Darbari and
Mohindro of their du-
from the opposition par-
ties in Parliament over
the mismanagement of
the preparation for the
Games, scheduled to be
CWG held in the Capital be-
tween 3 October and 14
WATCH October, the Congress-
2010 led United Progressive

from management by setting up an equity- let distress stay hidden and taxpayers must be
ties. Khullar said the al-
legations of corruptions
against the two had tarnished
the image of the Games.
With the government clamp-
ing down, Kalmadi has set up a
three-member panel headed
by Jarnail Singh, OC’s chief ex-
ecutive officer, to look into
Alliance government
has assured that it
would take action, but ruled
out setting up of an apex com-
mittee to oversee the event.
“As far as corruption is con-
cerned, government will take
all actions. I will write to the
authorities, including finance

holding company as a buffer between the two. spared the bill of bad assets, then the govern- AYN R A N D
various charges.
After coming under attack TURN TO BACK PAGE ®

Mint is also available for Rs5.50 with Hindustan Times under a combo offer

This may grant managers more space to take ment must let PSBs out of its clutches.

MY VIEW | THE IMPARTIAL SPECTATOR

A legal case that highlights an entire legacy of bad laws

procedure followed for testing impeacha-
SHRUTI RAJAGOPALAN ble—there is no receipt for the sample sent
for testing the next day, and no evidence that
it was not tampered with during the 18-day
delay in report submission by the office of
the public analyst. It will be 38 years this
aggrieved consumer through tort law or The problem disappears when the same William H.J. Hubbard and Sital Kalantry,
consumer courts. The state deals with error goods are sold in a market where prices are categorizing the Supreme Court’s decisions
or negligence through civil penalties or allowed to adjust to market conditions. Not from 2010 to 2015, finds that 29.1 % of the
fines. Criminal penalties are usually because the government is more vigilant in court’s cases were criminal matters—which
reserved for those who wilfully add poison- prosecuting food adulteration, but because makes sense, since these involve questions
ous or unsafe substances, or violate food adulteration hurts the reputation of sellers. of life and liberty. But in the same time

L
ast week, Supreme Court justices Ram-
ana, Kant and Murari finally gave Prem
Chand long-due relief, acquitting the
shopkeeper from Haryana 38 years after he
was accused of a crime. The crime? On 18
August 1982, the state food inspector, upon
testing, allegedly found four living meal
worms and two live weevils in a sample of
month since this absurdity began. To add safety standards in cases like pharmaceuti- An area where India still grapples with adul- period, only 5.3% were constitutional mat-
salt, not haldi, to old wounds, the case didn’t cals, where markets are teration is poisonous ters, and a mere 0.2% were habeas corpus
even move at a weevil’s but a snail’s pace. thin or marked by high hooch in states enforcing cases, which relate to even more grave and
When Prem Chand was accused in 1982, asymmetry of information. The needless alcohol prohibition. urgent matters of life and liberty.
Indira Gandhi was India’s prime minister In a socialist economy, Much of the blame falls All branches of government are to blame
and the Bharatiya Janata Party was two years even everyday food items criminalization on socialist planners who for their failure to understand economic
old and Namak Halaal, starring Amitabh are prone to adulteration. enabled the criminaliza- dynamics and for this clog-up of India’s
Bachchan, had just been released. When Socialists impose price and
of ordinary rule tion of ordinary activities in already weak state capacity. Overzealous leg-

is a senior research fellow with

haldi (turmeric) powder taken from Prem
Chand’s shop. He was charged under the
the Mercatus Center at George
Mason University, US
Food Adulteration Act, 1954, for selling
adulterated haldi and for selling without a
licence, both of which carry prison sentence
and fines.
The case went through a trial court, which
acquitted Prem Chand after 13 years on 31
August 1995. Inexplicably, the State of Hary-
ana appealed this decision. The high court
took another 14 years to rule, and, reversing
the trial court’s decision, convicted Prem
Chand on 12 September 2009. Prem Chand
appealed the high court’s decision, and after
almost a decade, on 30 July 2020, the
Supreme Court acquitted him. It found the
Prem Chand was accused, Y.V. Chandra-
chud was chief justice of India; the Supreme
Court that acquitted Prem Chand includes
his son, justice D.Y. Chandrachud.
This is not the only case of delayed justice.
Criminalizing the ordinary is not an excep-
tion but the rule for state engagement with
citizens in India, it seems. State ineptitude
and excesses add to people’s misery.
What kind of society criminalizes poor
quality haldi? One that implements social-
ism. In a market economy, the market for
everyday food commodities is robust and
branding and reputation solve most kinds of
adulteration problems. Typically, such
problems are resolved directly by an
quantity controls, and the
unintended consequence
violations has India. Their misunder-
standing of market process,
islation has criminalized everything from
haldi adulteration and the pulling of a train’s
of price ceilings is a drop in
quality, often through
clogged courts and how incentives operate
laid the foundation of
halt-chain to cutting trees. A weak executive
that lacks the capacity to execute these laws
adulteration. When the and thus denied much bad regulation in the fairly then arbitrarily turns ordinary citizens
price per kilogram of country. India continues to into criminals with the full force of absurd
pulses is fixed by the State, others justice criminalize a number of regulation. So far, the judiciary has not struck
the retailer’s incentive is to activities that would be bet- down the constitutionality of these punitive
add sandy gravel to adjust ter regulated by a combina- laws, even though it has had time for matters
its quantity and “balance” the fixed price tion of market processes and civil litigation. like service pensions and college fees, leaving
with the informal market rate. This was so An important and under-recognized con- constitutional matters and even habeas cor-
rampant in India that it led to illness or death sequence of such criminalization of ordinary pus petitions unattended.
in some cases. The socialist solution was activities is that it clogs the criminal justice Irrespective of economic ideology, a
more bad regulation; i.e. criminalizing the system and delays justice. Justice was not country that cannot swiftly dispose habeas
activity to deal with the unintended conse- just denied to Prem Chand, but many others. corpus petitions should not criminalize haldi
quences of the original bad regulation. A recent working paper by Aparna Chandra, adulteration.
 VIEWS TUESDAY, 4 AUGUST 2020
NEW DELHI 13

MY VIEW | A VISIBLE HAND M I N T C U R AT O R

Formalizing labour is the ideal

way to provide worker welfare
India should simplify its labour laws into a few codes, reduce business compliances and grant all workers an identity for aid

RAJ K RAJ/HT

Some French champagne producers have lost 90% of their business. ISTOCKPHOTO

Now covid is causing champagne wars in France

I n the champagne vineyards of France, the season of ripening, plumping and

sweetening of the grapes ready for harvesting at the end of August, known as the
veraison, has begun. Maxime Toubart, a relatively small vigneron who produces
25,000 bottles of bubbly, has been cultivating his clients as well as his vines during
NARAYAN RAMACHANDRAN the coronavirus crisis and is confident his business will survive. The same cannot
is chairman, InKlude Labs. Read Narayan’s Mint be said for many other small vineyards, who say they will face ruin if they are forced
columns at www.livemint.com/avisiblehand to let their grapes wither on the vine. “We’re very dependent on these export mar-
kets, which have been severely hit by Brexit and the coronavirus,” Toubart added.
“Like everyone else, the champagne producers are suffering. Some of our members
have seen a 90% loss of business.”
The Guardian

T
he world of work, wages and liveli-
hoods is being deeply impacted by the
pandemic. In addition to the direct
health threat to workers and their
families, the disruption threatens their
physical, emotional, social and eco-
nomic well-being. It is no exaggeration to say that
the policy response for worker welfare and jobs
will be among the most important responses to the
current covid crisis.
The immediate responses to the pandemic
related to public health, including lockdowns,
social distancing, hand washing and quarantine
rules. The economic responses included cash
grants and macroeconomic liquidity measures.
Around the world, and particularly in developed
economies, workers have been assisted through
various measures, such as unemployment insur-
ance and a worker wage subsidy. Many European
countries, including Denmark, Germany, France,
the Netherlands and the United Kingdom, subsi-
dized companies to keep workers on their payrolls.
The US Federal Pandemic Unemployment Com-
pensation Program under the Cares Act raised the
unemployment insurance payment by an extra
$600 a week (that programme lapsed over the
weekend). European nations have also actively
facilitated job-sharing programmes among work-
ers, reducing the requirement for retrenchment.
Some 10 million German workers stand to benefit
from a scheme called Kurzarbeit, which literally
means “short-work”. Workers are paid nearly full
wages for partial work without a need to lay people
off. These work sharing programmes appear to be
the most effective way (in terms of cost per
employee) to manage a crisis from the worker’s
point of view, and they address the mental, eco-
nomic and social impacts of the crisis.
The International Labour Organisation (ILO),
which came into being in 1919, brings together the
governments, employers and workers (GWE) of its
187 member states to help set labour standards,
develop policies, and devise programmes that pro-
mote decent work for all women and men. The
ILO has catalogued responses to covid-19 by four
pillars: 1) Stimulating the economy and jobs 2) Sup-
porting enterprises, employment and incomes 3)
Protecting workers in the workplace, and 4) Dia-
loguing among the GWE to promote solutions.
The ILO exhorts its members to “tailor their sup-
port packages so as to save businesses and jobs,
prevent layoffs, protect incomes and leave no one
behind”.
The pandemic is like no other crisis in recent
times. Some workers in the technology, finance
and consulting sectors have been able to mitigate
the effects because of work-from-home (WFH)
policies. The pain, however, is being felt quite
widely, and vulnerable workers are bearing the
brunt of it. Among the most deeply affected are
women, who hold 70% of all jobs in the health and
social care sectors, informal and temporary work-
ers, including some in the gig economy, and young
workers who are currently seeking employment.
Migrants within a country and international immi-
grants have also been disproportionately
impacted, with the degree of their adversity vary-
ing by the sustainability of their jobs and the cover-
age of their health care burden. Micro, small and
medium enterprise (MSME) workers, particularly
those who are employed in their own micro busi-
nesses, have suffered the most acutely.
India has undertaken several measures to rescue
its economy, including doses of fiscal and mone-
tary stimulus and an MSME support programme.
Direct measures related to the formal and informal
labour market have been chaotic and uncoordi-
nated. According to Schedule VII of the Indian
Constitution, labour is a concurrent subject
between the states and the Centre. The central
government response has largely been restricted
to repatriation transportation. After a complete
snafu with respect to migrants, a semblance of
order has been restored with Shramik trains letting
migrants travel to and from their homes. Due in
part to labour shortage caused by mismanage-
ment, a dozen states have relaxed labour regula-
tions by issuing ordinances. Uttar Pradesh (UP),
Punjab, Gujarat and Karnataka have increased the
maximum factory work hours per day to 12, and
I n 2010, Takeshi Kuwabara was sentenced for the murder of his lover, Rie Isohata.
C oronavirus outbreaks at mink farms in Spain and the Netherlands have scien-
from 60 to 72 hours per week (the ILO specifies a
maximum of 9 hours per day and 48 hours per
week). UP and Gujarat have further specified that
the extra hours are not eligible for overtime pay-
ment. Many of these regulations are in violation of
the draft labour codes proposed by the central gov-
ernment, which are currently in various rounds of
discussion in Parliament. It seems likely that the
President will not sign these and that they will be
struck down under the principle of subsidiarity.
India’s task is complicated by the fact that only
10% of its labour force makes up the formal labour
market. Add to this another 12-15% working as con-
tract labour, and it means that only about 22-25%
can be identified and provided specific support.
Large segments of unorganized labour, particu-
larly in the MSME sector, agriculture, household
activities and construction, are not part of the for-
mal system, and therefore can only benefit from
generalized subsidies or direct government-to-
resident transfers, rather than as workers. So “wel-
fare” becomes a general rather than specific idea.
By collating and simplifying labour laws into a few
codes and reducing labour compliances at the
Centre and in each state, a concerted effort should
be made to give workers a financial identity. Only
then can the ILO’s notion of dialogue be con-
ducted and marginalized workers be given a voice
that translates to welfare in times of crisis.
P.S: “The future depends on what you do today,”
said Mahatma Gandhi.
Hire a saboteur if you want to end a relationship
What captured the world’s imagination was not the tragedy itself, but the fact that
Kuwabara was a wakaresaseya—a professional hired by Isohata’s husband to break
up their marriage. The wakaresaseya industry took a hit after the killing of Isohata.
Along with fraud cases, the tragedy inspired some reform of the industry, including
a requirement that private-detective agencies obtain licences. Yusuke Mochizuki,
an agent of the “farewell shop” First Group, says that the effects included a clamp-
down on online advertising of wakaresaseya services, and more suspicion on the
part of the public... Yet a decade on, online ads are back and business appears to be
flourishing again, despite the high costs and controversies involved.
BBC
Corona outbreak among minks? It’s happened
tists digging into how the animals got infected and if they can spread it to peo-
ple. In the meantime, authorities have killed more than 1 million minks at breeding
farms in both countries as a precaution. The virus that first infected people in China
late last year came from an animal source, probably bats, and later spread from per-
son to person, as other coronaviruses had done in the past. Some animals, including
cats, tigers and dogs, have picked up the new coronavirus from people, but there
hasn’t been a documented case of animals spreading it back to humans. The out-
breaks among the minks on farms in the Netherlands and Spain likely started with
infected workers, although officials aren’t certain.
AP
Matrimony in South Korea can be a risky affair
T rinh met her murderer through a matchmaker. She was 29 years old and her
future husband was in his 50s, court documents show... Seven months later,
Trinh moved to South Korea to be with her husband, named Shin. Three months
after that, she was dead. Trinh is one of thousands of Vietnamese women to marry
South Korean men through matchmakers who set up brides with grooms—a service
that is not only encouraged in South Korea, it is even subsidized by local authorities.
Some couples have successful, happy marriages. But many foreign brides who meet
men this way, officially classified as migrants through marriage, have become vic-
tims of discrimination, domestic violence and even murder at the hands of their
husbands.
CNN
A site that will stay lethal for over 300 millennia
T his place is not a place of honour,” reads the text. “No highly esteemed dead is
commemorated here… nothing valued is here. What is here was dangerous and
repulsive to us. This message is a warning about danger.” It sounds like the kind of
curse that you half-expect to find at the entrance to an ancient burial mound. But
this message is intended to help mark the site of the Waste Isolation Pilot Project
that has been built over 2,000 feet (610m) down through stable rocks beneath the
desert of New Mexico. The huge complex of tunnels and caverns is designed to con-
tain the US military’s most dangerous nuclear waste. This waste will remain lethal
longer than the 300,000 years Homo sapiens has walked across the surface of the
planet.
BBC

MY VIEW | IT MATTERS

The deep fakes that publications must guard against

for imperiling public health and forced air-
SIDDHARTH PAI line leaders to atone for years of treating
their passengers poorly. Now, lawmakers are
set to turn their attention to technology,
channeling long-simmering frustrations
with Amazon, Apple, Facebook and Google
Tech regulation; Google and Facebook
could be forced to pay Australian news pub-
lishers to distribute their content. If
approved, a draft code announced by the
Australia Competition and Consumer Com-
mission would allow Australian outlets to
Understandably, Masri and Barnard were
upset. But Masri sensed something awry and
reported Taylor to Reuters, which ran an
investigative piece (https://reut.rs/2Xnx21v)
on Taylor, who claimed to be in his 20s and
a student at the University of Birmingham.
The perfect way to hide behind a false
statement is to employ a deep fake. The
problem for content moderators is that deep
fakes are almost untraceable. One expert
interviewed by Reuters said investigators
chasing the origin of such photos are left

L
ast week, we saw four of US’s Big Tech
chief executives give evasive answers to
sustained grilling by US legislators. The
latter have mountains of evidence pointing
to the violation of monopoly laws in that
country. This covers both external represen-
tations and revelations from within each of
the firms: Alphabet (Google’s parent), Ama-
into a high-profile hearing some Democrats
and Republicans hope will usher in sweep-
ing changes throughout Silicon Valley.”
The Big Tobacco hearings took place
while I lived in the US during the 1990s, and
the fallout of those was indeed large, spin-
ning off one of the largest and most finan-
cially damaging class-action lawsuits in his-
secure payments in a few months. This The University couldn’t find the individual, “searching for a needle in a haystack–except
seems fair, and hopefully and so Reuters had the only the needle doesn’t exist.”
the rest of the world will known photograph of him Big Tech recognizes this problem. Even
arrive at a similar view on Non-existent analysed, and found it was a identifying a deep fake, let alone finding its
paying news outlets for the deep fake. The news creator, is a difficult task. Facebook got many
reportage that they work people could agency was unable to trace participants for an open deep fake detection
very hard and spend heav- the journalist. Oliver Tay- challenge that it ran last year. The company
ily to create.
end up offering lor simply doesn’t exist. released the results in June 2020. The best

is founder of Siana Capital, a

venture fund management
company focused on deep
science and tech in India
zon, Apple and Facebook.
The issues with Google relate to its search
results and advertising exchanges, while
those with Amazon centre around its deci-
sion to compete with retailers that use its
online presence as their primary go-to-mar-
ket channel. The problems with Apple relate
to its App Store fees and restricted competi-
tion on iPhone. Facebook had to answer
queries on its 2012 Instagram acquisition.
Parts of the American press see this as the
start of a large comeuppance for US Big
Tech. The Washington Post, commenting on
the eve of the hearings, said: “Congress
brought the country’s big banks to heel after
the financial crisis, cowed a tobacco industry
tory. Big Tobacco paid heavily.
The Washington Post and others may well
be right about the long term. For now, the
day after the hearings, all four companies
under scrutiny reported their earnings, and
while Google saw its first ever revenue
decline, the other three posted surprisingly
positive results, causing their stocks to climb
rapidly. It would seem that investors and
speculators on the stock market have not yet
caught up with what the American press sees
as a potential reality.
Speaking of the press, however, while Big
Tech stocks were surging on 31 July, there
was a landmark move down under. Australia
is now leading the way in another area of Big
But there is a technologi-
cal wrinkle that is begin-
op-ed opinions
ning to affect news outlets.
In a US newspaper, Alge-
unless we devise
mainer, a journalist named tools to filter
Oliver Taylor accused Lon-
don-based academic out such fakes
Mazen Masri and his wife
Ryvka Barnard of being
“known terrorist sympathizers”. Masri and
Barnard are activists who gained prominence
for a lawsuit they filed against an Israeli com-
pany named NSO Group Technologies whose
spyware Pegasus is known for its remote sur-
veillance of smartphones. Taylor also had sto-
ries in the Times of Israel and Jerusalem Post.
While some of America’s
legislators were railing
against Big Tech last week
for “censoring” free speech
on social media, the spread
of misinformation is rap-
idly becoming one of the
internet’s most intractable
issues. I have written
before on how almost every social media
network is on high alert over objectionable
video content. Trying to weed out online
conspiracies keeps them on the edge too.
But no matter how vigilant they are, deep
fakes have made it easier for conspirators to
spread misinformation.
deep fake detection model thrown up by the
challenge, it turned out, only worked 65% of
the time (bit.ly/2Dg5EeZ). Facebook says that
this figure of 65% establishes a shared base-
line for the artificial intelligence community
to work with.
What was once a difficulty only for social
media is now a pressing problem for news
outlets as well. Publications that insist on
factual accuracy and also allow varied voices
to be heard may now need barriers to screen
out the deep fake Taylors of the world. Being
paid for their content by social media net-
works, as Australia is enforcing, will cer-
tainly help defray the costs of vigilance that
news publishers have to bear.
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 187 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR)

SERUM INSTITUTE GETS NOD FOR WHO TO MEET INDIAN TEAM ON

TUESDAY, AUGUST 4, 2020 TRIAL OF OXFORD VACCINE uP6 HIGH SERO-POSITIVITY RATE uP9
LIVEMINT.COM

DON’T MISS
Doval-led group to take stock of TWITTERVERSE

India-China talks on border row

Ravi Shankar Prasad
@rsprasad
Wockhardt, UK ink People are not only
covid vaccine pact Both countries are yet to disclose the outcome of the fifth round of military-level talks held at Moldo maintaining social
Wockhardt has entered distancing but using
into a deal with the UK to payment options like
fill and finish vaccine vials Elizabeth Roche Last week, Chinese ambassador UPI. In July 2020, UPI
at its North Wales facility. recorded 149 cr transac-
elizabeth.r@livemint.com to India Sun Weidong said the
See Page 11
NEW DELHI Chinese perception of LAC at tion, highest for UPI.
Pangong Tso was at Finger 4 and

Sebi tightens
disclosure norms
Sebi mandated higher
standards of disclosure
for proxy advisory firms
to manage conflict of
interest. See Page 3
Cognizant bets on
M&As to grow biz
Digital creates enormous
scopes and we intend to
capture this, said
Cognizant CEO Brian
Humphries. See Page 5
Moody’s upgrades
Yes Bank
Moody’s upgraded Yes
Bank’s long-term foreign
currency issuer rating by
one notch from Caa1 to
B3. See Page 6
S
enior government and
Six staffers military officers in New
from CM
Delhi are to review the
Yediyurapp
a’s office outcome of the fifth
test positive round of talks between
for Indian and Chinese commanders
coronavirus
on reducing tension along the
bit.ly/3i20HFp international border, two people
said on Monday, requesting ano-
nymity.
The meeting of the China
Study Group, led by national
security adviser Ajit Doval, will
likely take place on Tuesday and
take stock of the progress of the
discussions held on Sunday
between Lt Gen Harinder Singh,
the Commander of the Leh-based
14 Corps, and Major General Liu
Lin, Commander of the People’s
Liberation Army’s South Xinjiang
military region, the first person
said.
The Singh-Liu talks at Moldo
on the Chinese side of the Line of
Actual Control (LAC) were held
between 11 am and 9.30 pm.
There was, however, no word
from India or China on the out-
come. Indian Army chief general
Manoj Mukund Naravane is
expected to brief defence minis-
ter Rajnath Singh before the
China Study Group meeting, this
person added. The focus of Sun-
day’s talks was on disengagement
Chinese troops had not intruded
into Indian territory.
“The Chinese do not seem will-
ing to go back to the status quo
ante. There has been some disen-
gagement in the Galwan Valley
and Hot Springs area. Pangong
Tso continues to remain a prob-
lem,” the second person cited WHO
above said. @WHO
Indian analysts said this was It’s never too late to
part of China’s attempt to change turn this #COVID19
the status quo and then present around. If we act
India with a fait accompli. New together today, we can
Delhi insists that Chinese troops save lives, we can save
return to positions held in April. livelihoods if we do it all
According to the second per- together—@DrTedros
The meeting of the China Study Group, led by national security adviser Ajit Doval, will oversee the progress of son, the presence of Chinese
the disengagement discussions held on Sunday at Moldo on the Chinese side of the LAC. REUTERS troop in the hinterland was as
strong as before without any pull-
of Chinese troops from the banks killed 20 Indian soldiers and an not kept their word and have back even as the two countries
of the Pangong Tso lake, one of unknown number of Chinese refused to pull back from the peak discussed steps to disengage at
the many friction points along the troops, exacerbated the tensions of Finger 4, a mountain spur jut- the military and diplomatic lev-
LAC. Tensions ting out into the els. With the Chinese not show-
between the two TENSIONS RUNNING HIGH Pangong Tso ing any intention to budge, India
countries have lake. Chinese has started scouting for emer-
been high since THE focus of Singh- HOWEVER the THE Centre and the troops have how- gency purchases of weapons, Joe Biden
May when Chi- Liu meeting was
pullback of Chinese
presence of Chinese Indian Army expect
troops in the the disengagement
ever moved back high-altitude clothing and tents @JoeBiden
nese t r o o p s troops from banks
hinterland remains as process to take a long from the base of for 30,000 additional troops
intruded into of Pangong Tso lake strong as before time. Finger 4 to Finger deployed in forward locations. It’s not enough to go
Indian territory at 5, they con- Indian embassies in Europe, the back to the way things
multiple points in firmed. India said US and Russia have been asked to were. We have to create
Ladakh. and ties plummeted to new lows. the LAC runs through Finger 8, help in procurements as the Cen- a new America where
everyone gets an equal
The intrusions and a violent Though the two sides agreed to situated 8 km from Finger 4 and tre and the Indian Army expect
clash between the two sides on 15 disengage, people familiar with that Chinese troops have the disengagement process to chance to get ahead.
June at Galwan Valley, which the matter said the Chinese have intruded into Indian territory. take a long time.

IITs look beyond tech, PM Modi, Afghan President Ghani discuss security situation, covid
to offer diverse courses Elizabeth Roche
elizabeth.r@livemint.com
ment and the Taliban
announced by the latter on the
security personnel held cap-
tive by the Taliban.
However, according to the
Afghan government, there has

in tandem with NEP NEW DELHI occasion of Eid came to an end.

The Afghan government
The Ghani government has been no let up in the violence
so far released around 4,900 in Afghanistan since the

P
rime Minister Narendra has released hundreds of Tali- prisoners, according to news US-Taliban deal was agreed
Modi and Afghanistan ban fighters to bring the group reports. On Friday, Ghani was upon, with more than 3,500
Prashant K. Nanda President Ashraf Ghani to the table for talks, in line quoted as saying that he had Afghan troops killed by armed
prashant.n@livemint.com discussed the evolving secu- with an agreement signed in “no authority” under the fighters.
NEW DELHI rity situation in Afghanistan February. President Ghani and country’s consti- New Delhi,
and the wider region, besides the Taliban have both indi- tution to release PM reiterated which has

T
he Indian Institutes of other subjects of mutual inter- cated that long-delayed nego- the remaining India’s allegiance pledged more
Technology (IITs) are set est in a telephone call on Mon- tiations could begin after Eid, prisoners as they to the people of than $3 billion in
to go beyond technology day, the government said. according to news reports were involved in Afghanistan in aid for recon-
and engineering courses to They also exchanged Eid–ul– from Kabul. serious crimes. struction since
their quest for a
focus on a diverse and multidis- Adha greetings, it added. Under the peace deal signed The Afghan presi- 2001 when the
ciplinary curriculum that will Ghani thanked Modi for the President Ashraf Ghani (left) thanked PM Narendra Modi for the in February between the US dent said he peaceful and US-led coalition
benefit more students in the timely supply of food and timely supply of food, medical assistance to Afghanistan. MINT and the Taliban, the “intra-Af- would soon call a inclusive society dislodged Tali-
higher education space. medical assistance to Afghani- ghan” talks were slated to start consultative Loya ban from Kabul,
Some older IITs offer non- stan. Modi reiterated India’s dramodi exchanged greetings amid reports that Afghan for- in March, but have been Jirga, a traditional is keen to see an
engineering courses, but there commitment to the people of on the joyous festival of ces had retaken a prison in the delayed amid political infight- grand assembly of Afghan India-friendly administration
is an increasing demand for a IITs aim to reduce the rigidity Afghanistan in their quest for a #EidAlAdha & also discussed country’s east, a day after the ing in Kabul and the conten- elders, to decide their fate. in Afghanistan.
fresh approach, which is at the between various streams. HT peaceful, prosperous and the evolving security situation Islamic State terrorist group tious prisoner swap condition On its part, the Taliban said New Delhi is wary that a Tal-
core of the New Education Pol- inclusive society, the Prime in the region and other areas of attacked the facility killing at put forth by the Taliban. it has freed all 1,000 Afghan iban government in Kabul will
icy (NEP). and yoga, in addition to the Minister’s Office said. bilateral interests,” Tahir Qad- least 29 people. Under the terms of the deal, prisoners it had pledged to tilt towards Pakistan, which is
The Graduate Aptitude Test centre for linguistic science “HE President @ashraf- iry, Afghan charge d’ affaires in The telephone conversation the Kabul government was to release in a deal with the US, seen as supporting the group
in Engineering (GATE), the and technology, a centre for ghani in a telephonic conver- New Delhi, said in a Tweet. also came as a ceasefire free 5,000 Taliban prisoners fulfilling their side of the with finances, training and
post-graduation entrance energy and centre for rural sation with HE PM @naren- The phone call took place between the Afghan govern- in return for 1,000 Afghan exchange. safe havens.
exam for getting admission to technology, which are already
the IITs, are introducing two part of its academic setup.
papers, environmental science In line with the NEP, which
and engineering, and humani- seeks to adopt a multidisciplin-
ties and social sciences. IIT ary approach to education, by
Guwahati aims to open a medi- reducing the rigidity between
cal school and explore the pos- different streams, IIT Madras
sibilities of diversifying into has also decided to offer a bach-
Deferring pictorial warnings on tobacco items to escalate virus risk
arts, philosophy and architec- elor’s degree programme in
ture. data science with multiple Neetu Chandra Sharma and severity of pulmonary during the covid-19 pan- lion users every year. Several
“The institute is entry and exit sys- neetu.s@livemint.com infections and a decrease in demic, it is adversely impact- studies have established a
willing to set up a IITs are embracing tem, while IIT NEW DELHI pulmonary immune func- ing the motivation of tobacco connection between tobacco
medical school in multidisciplinary Delhi has set up a tions. users to quit while being in use and the spread of cov-

T
the immediate curriculum that school of public he Union health minis- The ministry also issued a conducive environment id-19.
future. It is also branch into policy. try has deferred imple- notification on 13 April notify- socially,” said Dr Rakesh The Global Adult Tobacco
interested in a IIT Kharagpur mention of its new pic- ing new sets of pictorial Gupta, a consultant working Survey (GATS)
philosophy, arts,
management said it will be torial health warning for health warnings on all for Tobacco Ces- 2016-17 by Union
school and discus- architecture, happy to help tobacco products even as it tobacco products from 1 Sep- sation. The delay negates health Ministry
sions have started. social sciences new-generation sends out advisories to all tember. However, it issued “As quitting in health ministry’s showed that 62%
Moreover, the IITs become more states to prohibit their sale another notification on 21 higher numbers own advisory of c i ga r et t e
institute also diverse. and use in public places in July, delaying implementa- definitely redu- while adversely smokers and 54%
offers a bachelor’s degree in “In NEP the thrust is on mul- view of the coronavirus crisis. tion until 1 December. ces the demand of bidi smokers
impacting
design and will aim to diversify tidisciplinary education, The new warnings will be Public health experts said of tobacco prod- said they had
into subjects related to arts and including more of humanities enforced from 1 December that in the new notification, ucts, is this motivation of thought of quit-
performing arts, philosophy, and social sciences at the IITs. instead of 1 September. the warning has been watered The new warnings will be enforced from 1 Dec instead of 1 Sep. MINT repeat defer- tobacco users ting because of
ancient and modern languages We are already offering micro- The health ministry down by the removal of the ment under pres- the 85% pictorial
and architecture,” said T.G. specializations, micro-credits recently issued an advisory definition of a package, which amid an extensive drive “By delaying the next sure of tobacco warnings on the
Sitharam, director of IIT Guwa- and research programmes that saying consumption of ciga- had been specifically inserted across India to discourage round of pictorial warnings industry or its front groups?” packets.
hati , in an email response. are typically interdisciplinary,” rettes, smokeless tobacco, to facilitate action against tobacco use to contain spread on tobacco products, the he asked. And 46% of smokeless
IIT Guwahati has also said IIT Kharagpur director paan masala and similar prod- point-of-sale (PoS) displays on of covid-19 as well as non- health ministry is not only Tobacco is consumed by tobacco users thought of quit-
“decided to start a centre for V.K. Tewari in a social media ucts during the covid-19 pan- cigarette cartons. communicable diseases, contradicting its own advi- 270 million adults in India ting because of warnings on
Indian knowledge, Sanskrit post. demic can increase the risk Ironically, the delay comes mainly cancer. sory to hold back tobacco use and it kills more than 1.3 mil- smokeless tobacco products