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FRIDAY, MAY 29, 2020

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mint primer
QUICK EDIT
What will India’s Sanctions
recovery be like? won’t help
3 letters hold key The US no longer considers
Hong Kong autonomous from
China, a declaration that drew
BY KARAN BHASIN an angry response from the
People’s Republic on Thursday
There is growing concern about India’s slowing economy, which has
weakened further due to the covid-19 pandemic. Some experts worry and threatens to ratchet up ten-
recovery will be slow; others say normalization could be swift as curbs sions across the Pacific. The US
are lifted. Mint explains the different kinds of economic recovery. observation was triggered by
China’s move to impose a
A long road to recovery national security law in Hong
India has been experiencing a slowdown since Q2 FY19 and grew 4.7% in Kong, which has sparked vio-
Q3 FY20. The covid-19 pandemic is likely to further delay a recovery, as lent anti-mainland protests in
economic activity nearly came to a standstill in the last couple of months. the former British colony. Now
10 Washington might deprive
GDP growth at market prices
8.0 (year-on-year in %) Hong Kong of its special eco-
9
nomic status under a US law
8 that granted it trading privi-
leges and some tariff and visa
7
exemptions. The island prov-
6 ince could also lose access to
4.7 high-end US technologies.
5
It isn’t fully clear how far the
4 US would go in revoking Hong
Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q3 Kong’s special status. But the
FY15 FY16 FY17 FY18 FY19 FY20
Source: Statistics ministry threat is high, given the poor
PARAS JAIN/MINT state of US-China relations. It is
What are the kinds of Why do the recoveries clear that Beijing ought not to
1 economic recovery?
Economic recovery can take many
2 take different shapes?
The fundamental difference
have reneged on its promise of
“one country, two systems” that
forms, which is why it is often between the different kinds of assured Hong Kongers some
depicted using alphabetic recovery is the time it takes for democratic rights as part of a
notations. For example, a V-shaped economic activity to normalize. 1997 treaty with the UK. The
recovery, U-shaped recovery, The time taken is often a factor of British withdrawal was condi-
prolonged U-shaped recovery and multiple things such as the depth tional. Today, China seems to
W-shaped recovery. The letters of the economic crisis. This is
see itself as a regional hegemon.
generally denote the graph of because the deeper the recession,
growth rate, which resembles the the longer it takes a society to get It brooks little dissent, as seen
shape of the letter. A V-shaped back to normal. The other aspect in its repression of Hong Kong
recovery is usually a quick one has to do with the kind of policy residents. But will US sanctions
from a recession, while a U-shaped response as that determines how modify its behaviour? Unlikely.
recovery is one where the quickly economic growth will
economy stays at a low growth rate recover. For instance, an adequate
for a time. The recovery is W- fiscal or monetary package offered
shaped generally when economic by a government has in the past
activity recovers, but falls again
only to recover during the
been instrumental in swift
economic recoveries across
MINT METRIC
subsequent period. different countries. by Bibek Debroy

Looking for an individuality

3 What are some examples of
these kinds of recovery?
The US recession of 1953 is an example of a
To correlate with covid mortality?
V-shaped recovery as economic activity
A longer ring finger length
returned to normal swiftly. In the 1980s, its Gives you innate strength,
recovery took a W shape. Its recovery after
the 1973-75 recession and after the savings
Research finds this as source of vitality
and loans crisis were U-shaped. Most
nations experience either a U-shaped or V-
shaped recovery; a W- shaped recovery is
limited to weaker economies. QUOTE OF THE DAY
The 1991 economic crisis was
4 Hadn’t growth already
slowed down in India? 5
India witnessed a slowdown from
What kind of recovery
is expected for India?
It is difficult to predict the shape of
very different, we had a balance
the second quarter of 2018-19. economic recovery in India at this
of payment problem of a very
Tight money market conditions juncture as there are too many deep kind. We did not have
and the collapse of Infrastructure unknowns. What we do know is
Leasing and Financial Services that for China, the recovery was
sufficient forex reserves...Today
created stress in the non-bank swift and resembled a V shape, but we have resources and high
sector, hampering consumption as it was short-lived. If there is no
consumer loans suffered. This led second wave of covid-19, we should
forex reserves. So the current
to lower demand for investment expect swift normalization from circumstances are very
goods. The recession continued negative growth levels to the pre-
throughout 2019 and economic covid levels of 5% and a gradual
different from 1991.
activity picked up from November. recovery to 7%—the trend in the
Growth may turn negative in the last few years—but only by the
current quarter and economic second half of the next fiscal.
activity will take time to return to Karan Bhasin is a Delhi-based
pre-recession growth levels. policy researcher. BIMAL JALAN
FORMER RBI GOVERNOR
m MINT SHORT

Zuckerberg raps Twitter for fact-checking DJT

Prasid Kumar Banerjee claimed mail-in voting would lead to a
prasid.b@livemint.com “rigged election” in November, with a
NEW DELHI warning label that directed users to
fact-checking articles about mail-in

F
acebook chief executive officer
(CEO) Mark Zuckerberg has criti-
cized rival platform Twitter for
fact-checking two tweets by US Presi-
dent Donald J. Trump. “I just believe
strongly that Facebook shouldn’t be the
arbiter of truth of everything that peo-
ple say online,” Zuckerberg said in an
interview with Fox News. “Private com-
panies probably shouldn’t be, espe-
cially these platform companies,
Facebook CEO Mark Zuckerberg.
shouldn’t be in the position of doing
that,” he said.
The comment followed Twitter tag-
ging two of Trump’s tweets, which
voting.
Twitter CEO Jack Dorsey was quick
to respond. “Fact check: there is some-
one ultimately accountable for our
actions as a company and that’s me.
GETTY Please leave our employees out of this.
We’ll continue to point out incorrect or
disputed information about elections
globally. And we will admit to and own
any mistakes we make,” Dorsey
tweeted.
 FLIP SIDE
T
U RA L E
O
Y SV
N E W m
Mint Lite
Daily wrap of news and views, opinions and talking points to get you started on your day

T
hough the US continues to have the highest caseload, South America appears to be emerging as the new epicentre of
covid-19, according to WHO. Infections are rising the fastest in Brazil. India, whose rate of growth of infections is second
only to Brazil, has 3% of cases worldwide. Daily recoveries exceeded new cases in Russia for a third day, and Germany’s
infection rate dropped further. For the rest of the news, here’s Mint Lite.

FINALLY, SC STEPS UP FOR MIGRANTS

AFTER WEEKS of debates about charging migrants train fare, the
Supreme Court ordered the Centre to ensure free travel for workers
returning home either on buses or trains. States will have to share the
costs, it said. The court also set out detailed orders on provision of food
and shelter. “There had been instances where one state sends migrants
but at the border another State says we are not accepting the migrants.
We need a policy on this,” the bench told the Centre. Over 97 lakh
migrant workers have been sent home between 1 and 27 May, the Cen-
tre said, adding, 80% were from Uttar Pradesh and Bihar. Railways has
been running shramik trains from 1 May. Several migrants have died of
starvation or dehydration on the trains in temperatures that have
crossed 45 degrees Celsius. For the past two days, videos of a child try-
ing wake his dead mother in a railway station and of workers grabbing
food from vendors have been doing the rounds of social media.

END OF AUTONOMY FOR HK?

CHINA’S PARLIAMENT on Thursday approved a decision to
go forward with national security legislation for Hong Kong. It
will be enacted before September. This is likely to worsen
US-China relations, already at a low over Beijing’s claims in the
South China Sea, trade and the coronavirus pandemic. It has also
sent jitters through Asian and European markets, which fear that
curbs on Hong Kong’s freedom would jeopardize its role as a
global financial hub. China says the legislation aims to tackle
secession, subversion, terrorism and foreign interference in the
city. On Wednesday, US Secretary of State Mike Pompeo said
Hong Kong no longer qualified for special treatment under US
law. More than 1,300 US companies have offices in the city, pro-
viding about 100,000 jobs. Global markets were largely higher
on Thursday, despite the tension. Investors dismissed the unrest,
which drove the Hang Seng down 0.8% late in the trading day.

70% COVID CASES IN 15 STATES India's top 15 cities have

nearly 70 percent of all
EARLY THIS week, India became the ninth country to covid cases and deaths
have 150,000 covid-19 cases, and 14th to record over 15,257
Delhi 359
4,000 related deaths. However, the fatality rate has Lucknow
337
declined to 2.9%. Almost 70% of the cases continue to be 11,334 1,940 Kanpur
centred in 15 big cities (see chart), though the fear is the Ahmedabad Jaipur
virus will spread to rural India now that domestic travel 3,145
has begun. In the past week, confirmed cases in Chen- 1,421 Indore
nai and Pune rose to 14,254 and 6,445, respectively, the Surat 2,728
fastest increase among the top 15 cities by population. 34,018 474 Kolkata
Mumbai Nagpur
Lucknow, Kanpur and Bengaluru have relatively fewer
cases compared to other cities. Among the top 15 cities, 1,338
6,455 Hyderabad
the case fatality rates are the highest in Kolkata (8.4%), Pune Data as of 27 May, 7.30pm.
Ahmedabad (6.9%) and Surat (4.6%). The case fatality 14,254 Map shows top 15 cities
297 Chennai by population.
rates are the lowest in Lucknow (0.6%), Chennai (0.8%) Bengaluru Source: howindialives.com
and Hyderabad (1.7%). For more, read Plain Facts.

FRANCE, US JOBLESS CLAIMS RISE

THE NUMBER of jobless claims in France rose to a record high
in April despite the government pouring billions of euros into a
furlough programme to keep people in work. Full-time unem-
ployment rose 22.6% from March-end. The sectors most affected
include retail, tourism, hotels, transport, logistics and construc-
tion. The US labour department said Thursday that 2.1 million
more people filed unemployment claims last week, taking the
total unemployment figure since mid-March to over 40 million.
Worldwide, jobless rates are rising, reflecting the effect of cov-
id-19 lockdowns on livelihoods and economies. These figures,
however, do not show the fact that the careers of those who still
have jobs are also on hold as salaries have been slashed. What’s
more, existing employees are overworked in newly short-staffed
companies, which could lead to a rise in mental health issues.

LOCKDOWN DIET: BOILED RICE, SALT

IN BANDA district in the dry and arid Bundelkhand region of Uttar
Pradesh, 80% of families have at least one member who is a migrant
worker, sending money home from a job in a city. In the past two
months, this source of income has dried up as the country went into a
lockdown to combat the novel coronavirus, and many workers made a
perilous journey to the relative safety of their homes. Now, hunger is
their bigger worry. Most families in villages are consuming little more
than boiled rice and salt or wheat flatbread with chilli paste. Even pota-
toes are unaffordable for them. Entire families, including children are
skipping meals; families out of the food security scheme are on the
brink of starvation. In an agriculturally-impoverished region, their
only hope is the paltry wages from the rural jobs scheme, but even
those are hard to come by. For more details, read our ground report in
Long Story.

For more short takes on the news, and

quick updates to bring you up to speed
before you start your day, follow our
daily podcast Mint Lite Morning Shot
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Curated by Shalini Umachandran. Have something to
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PEANUTS by Charles M. Schulz

 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 130 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 16 PAGES

COVID-19 KEY THREAT TO

GLOBAL GROWTH: FSDC
The Financial Stability and Development Council
(FSDC), chaired by finance minister Nirmala
Sitharaman, on Thursday cautioned that the
pandemic poses a serious threat to the stability of
the global financial system as the impact of the
FRIDAY, MAY 29, 2020 crisis and the timing of recovery is uncertain. P6
LIVEMINT.COM

India Set For Deepest Recession Yet

Economists paint a grim picture of the Indian economy for FY21 ahead of the statistics department’s release of the March quarter GDP print today
m MINT GRAPHITI
Asit Ranjan Mishra
asit.m@livemint.com
Sachs projected India’s econ-
omy to contract 5% in FY21. GROWTH BEFORE THE FALL ONE-DAY SPIKE
RBI may allow
DELHI SEES BIGGEST
NEW DELHI Although the government has
eased restrictions and allowed The government is set to release the gross domestic product numbers for the fiscal-fourth quarter on Friday. Given that the nationwide lockdown INDIA
relaxation for

P
rofessional forecast- businesses to restart operations, was enforced in late March, the figures may not paint that dismal a picture as there were a little over two months of normal economic activity.
ers veered towards a India’s more than two-month-
consensus that long lockdown and flight of
However, rating agencies, investment banks and multilateral agencies have sharply downgraded their full-year growth forecasts for the Indian
economy in the wake of the shutdown with projections ranging from about 2% to almost -6%, and most estimating a 5% contraction. 164,362 4,670
MSME loans
India’s economy will migrant workers from urban Total cases Deaths
face its worst reces- and industrial centres have crip- Present tense Future bleak (Year-on-year, in %) Gopika Gopakumar
sion in 40 years, contracting by pled economic activity. Gold- Quarterly GDP growth
(Year-on-year, in %)
Projections for FY21
6
70,005 89,687 gopika.g@livemint.com
at least 5% this fiscal, a day man Sachs has pointed out that 7.1 Earlier/Now Recovered Active cases MUMBAI
before the statistics depart- India’s stringent lockdown and Expansion forecast
IMF 5.8/1.9

T
ment releases the March quar- tepid fiscal support, small com- GLOBAL he Reserve Bank of India
6.2
ter GDP print, which will par- pared with even other emerging 4
(RBI) is in favour of scrap-
tially reflect the unfolding economies, may lead to GDP 5.6 5.7 5.6 ping the risk weight on
impact of the contracting by a
5.1
Barclays 2.5/0
5,731,837
Total cases
loans given by banks to small
pandemic on the massive 45% in and medium enterprises under
economy. the June quarter. 4.7 Moody's 2.5/0 the government’s ₹3 trillion
2
On Thursday,
S&P Global Rat-
EFFECT
S&P said a big
hit to growth will
S&P 1.8/-5
356,606 loan guarantee scheme, a top
official at RBI said. The Union
ings said the
VIRUS mean a large, 3.6 Deaths finance ministry had proposed
Indian economy permanent eco- 0 the scrapping as part of the
will contract 5% in FY21, nomic loss and deterioration in Fitch 0.8/-5
2,376,542 2,998,689 operational guidelines of the
2.5 2.5 Recovered Active cases
assuming that the ongoing out- balance sheets throughout the scheme following the
Source: Union health ministry, states
break in India will peak in the economy. “The risks around 2 2.1 announcement by finance
1.9 -2 Goldman
September quarter while Swiss the path of recovery will -0.4/-5 minister Nirmala Sitharaman.
bank UBS said India’s economy depend on three key factors. Sachs Currently, loans to medium,
could shrink 5.8% during the First, the speed with which the FULL COVERAGE INSIDE small and micro enterprises
current financial year amid covid-19 outbreak comes under 0.5 -4 UBS -0.4/-5.8 ˜ Plain Facts: Most states see (MSMEs) carry a risk weight of
weaker-than-expected domes- control. Faster flattening of the rebound in cases, cities 20%.
tic economic activity and the curve—in other words, reduc- continue to be hotspots P2 The move, which comes as
ongoing global recession. Ear- ing the number of new cases— HSBC Axis ICRA Crisil IDFC Care HDFC yet another nudge for lenders
Capital Ratings ˜ Long Story: Rural India’s lockdown
lier, S&P’s Indian arm Crisil, Q1 FY19 Q3 FY20 Q4 FY20 -6 Source: MOSPI, Mint research diet is boiled rice, salt as it suffers
Fitch Ratings and Goldman TURN TO PAGE 10 from undernutrition P8 TURN TO PAGE 10
GRAPHIC BY SARVESH KUMAR SHARMA/MINT

DON’T MISS
INVESTORS SEND NOTICE TO SEBI
A clutch of high net worth investors of Franklin
Templeton India has issued a legal notice to
Sebi saying an administrator must oversee the
management of the fund house. >P5
LIC TO INVEST IN RIL RIGHTS ISSUE
Insurer LIC will invest ₹2,500-3,000 crore
in Mukesh Ambani-owned Reliance Industries’
ongoing ₹53,125 crore rights issue, which had
opened for subscription on 20 May. >P11
AUTO DEALERS FEEL COVID PAIN
Several auto dealers are staring at uncertainty
as a high level of unsold inventory of BS-VI
vehicles are leading to an increase in interest
cost, with many unable to repay banks. >P7
SC RESPITE FOR MIGRANTS
The Supreme Court has directed central and
state governments to provide free transport
and adequate food to those seeking to go to
their home states. >P14
CUT FLIGHT TRAFFIC: K’TAKA
The Karnataka government has said it has
written to the Centre, asking it to reduce the
number of flights from five high-risk states as it
was leading to a surge of cases in the state. >P5
INDIA IGNORES TRUMP OFFER
India said on Thursday it was engaged with
China to resolve a tense border standoff,
ignoring an offer of mediation made by US
President Donald Trump a day earlier. >P14

Regulators sharpen
focus on China FPIs
Jayshree P. Upadhyay
PM bats for solar cities Google may acquire UAE fund eyes Jio stake
Utpal Bhaskar
utpal.b@livemint.com
ernment statement said.
“He (PM) also emphasized
stake in Voda Idea Anirudh Laskar
anirudh.l@livemint.com
been happening over the past
few days. Mubadala is keen to
NEW DELHI on an innovative model for MUMBAI buy a little more than 1% in Jio
Investments from high-risk rooftop solar and desired that Romita Majumdar talks with private equity firms Platforms. The deal is likely to

P A
jayshree.p@livemint.com jurisdictions attract greater rime Minister Narendra each state should have at least romita.m@livemint.com for potential investments, the bu Dhabi-based sover- happen at a valuation of close
MUMBAI scrutiny from regulators and Modi on Wednesday one city (either a capital city or MUMBAI person said seeking anonymity. eign fund manager to ₹5 trillion, which is similar
those providing custodial ser- called for each state to any renowned tourist destina- A spokesperson for Vodafone Mubadala Investment to what has been estimated by

F G
oreign portfolio investors vices. have at least one ‘solar city’ tion)” that will be a “fully solar oogle Inc. is consider- Idea did not comment while Co. is in talks for a potential the deals agreed upon
(FPI) from China may face Sebi-registered foreign whose electricity needs would city through rooftop solar ing picking a stake of Google did not immediately investment of about $1 billion between Jio and Silver Lake
restrictions in India with portfolio firms invest in India be met entirely through roof- about 5% in Vodafone respond to emailed queries. in Reliance Industries Ltd’s and Vista Equity Partners,”
the government and markets through 56 jurisdictions. top solar power. TURN TO PAGE 10 Idea Ltd, said a person aware According to the average (RIL’s) digital assets subsidiary said one of the persons cited
regulator consid- Funds coming in The call came in the course of the development. price of the Vodafone Idea Jio Platforms Ltd, said two peo- above.
ering including India’s wariness of from jurisdictions of a review of the work of the New Delhi invites bid for
The telecom joint venture of stock in the past two weeks, a ple aware of the development. “Clearly, Jio’s platform is
mainland China Chinese funds has that are not com- ministries of power and new cross-border power grid >P10
Vodafone Group Plc and the “The talks between RIL and
and Hong Kong grown in the wake pliant with the and renewable energy, a gov- Aditya Birla Group is also in TURN TO PAGE 10 Mubadala Investment have TURN TO PAGE 10
in Securities and of the covid-19 regulations laid
Exchange Board down by the
pandemic and
of India’s (Sebi’s) Financial Action
list of high-risk the subsequent Task Force, or
jurisdictions, two border skirmishes FATF, are consid-
people with ered high-risk.
direct knowledge FATF is an
of the matter said. inter-governmental policy-
The Department of Eco- making body that monitors
nomic Affairs (DEA) has money laundering and terror
drafted a proposal to this effect financing.
and is currently working on its India’s wariness of Chinese
modalities, they said, request-
ing anonymity. TURN TO PAGE 10

Uninsured PPE kits

add to hospital bills
Disha Sanghvi nature of the virus and the
disha.s@livemint.com severity of the outbreak has
MUMBAI forced hospitals to make it
mandatory for health workers

H
ospitalizations in the
middle of the coronavi-
rus pandemic, even if a
patient has not contracted the
virus, may add thousands of
rupees in out-of-pocket
expenses as insurers are unwill-
ing to cover the costs of personal
protective gear as they fall in the
list of non-payable items.
Patients could end up spend-
ing as much as a fourth of their
hospital bills on personal pro-
tective equipment (PPE) dur-
ing an extended hospitaliza-
tion, according to some
experts.
The highly contagious
to wear protective gear, includ-
ing body suits and face shields,
adding to the costs of patients,
as well as hospitals.
What’s making matters com-
plicated is that costs of PPE kits
are not standard. Given the
varying and unregulated costs
of PPE kits, many insurers are
wary of hospitals overcharging
them.
Mahavir Chopra, a health
insurance expert, said he has
seen hospitals levying special
charges for care and hygiene to
manage covid-19 patients.
TURN TO PAGE 10
02 FRIDAY, 29 MAY 2020
NEW DELHI DEALS
PLAIN
FACTS

MOST STATES SEE REBOUND IN CASES

Big cities continue to be the largest hotspots, but Lucknow, Kanpur and Bengaluru have relatively fewer cases compared to other populous cities
m MINT COVID TRACKER Chart 1b Chart 2
Pooja Dantewadia & Chart 1a
India has the second highest rate of new cases Sharp spikes in Assam, Bihar
Sriharsha Devulapalli India's trajectory steeper than most peers Compound daily growth rate (in %) Seven-day rolling average. Day 0 for each state corresponds to
Seven-day rolling average. Day 0 for each country corresponds to the day
the 100th confirmed covid-19 case was recorded. Brazil 4.5 5.4 the day the 50th covid-19 active case was recorded.
NEW DELHI Maharashtra
407,897 1,619,999 India 4 5
6,400

I
ndia began its nationwide Mexico 4.6 5.3 3,200 Bihar
lockdown on 25 March, one Peru 3.8 3.9 1,600
of the most stringent in the US Russia 800 Karnataka
335,548 Brazil Pakistan 3.2 3.7
world, with a resolve to flat- 344,184 400
Indonesia 2.2 3.3 Andhra
ten the virus curve. Two 200
229,132 Pradesh
Italy Russia 2.7 4.3 100 Assam
months later, India prepares to 50
bring an end to the lockdown 138,534 Poland 1.1 2
100,000
even as coronavirus continues Iran 0.8 1.6
China 8,4087
to spread across the country. Sweden 1.4 1.6
50,000 India 0 10 20 30 40 50 60 68
Earlier this week, India US 1.1 1.4 Only states with more than 500 active cases as of 28 May 8am have been considered.
became the 9th country to have Canada 1.7 The vertical axis is a logarithmic axis.
1.4
150,000 coronavirus cases, and
Ecuador 1.3 1.7 Chart 3
the 14th country to record over
4,000 covid-related deaths. Romania 1 1 Top 15 cities have about 70% of all
10,000
The case tally took eight days UK 0.7 0.9 cases and deaths
to jump from 100,000 to 5,000 Portugal 0.8 1.1
150,000, making India the 4th Turkey 0.7 0.7 Delhi
fastest country to do so. How- The vertical axis 15,257
uses a logarithmic Belgium 0.4 0.4
ever, since the surge in the scale which makes
Active cases
Netherlands 0.4 0.4 over the past Ahmedabad
death count was not as big, the the scale appear 11,334
smaller than it Ireland 0.3 0.5 seven days
fatality rate has now declined 1,000
actually is. Germany
slightly to 2.9%, after hovering 0.3 0.5 Deaths over
around 3.2% for weeks. 500 Spain -0.3 0.3 the past
Though the US continues to seven days
Italy 0.3 0.4 Mumbai
have the highest caseload, France 0.2 0.3 34,018
South America appears to be Switzerland 0.1 0.3 Pune Chennai
emerging as a new epicentre of 6,455 14,254
100 China 0 0
the outbreak, according to the
World Health Organization. 10 20 30 40 50 60 70 80 90 100 110 120 129 Data for India as of 28 May 8am. Data for all countries as of 27 May, Only countries
Days since 100th case was recorded with more than 1,000 deaths have been considered Data as of 27 May 7.30pm Source: Our World in Data, MoHFW, howindialives.com
The infections are rising the
AHMED RAZA KHAN/MINT
fastest in Brazil, the country
with the second-highest case- Tamil Nadu, Delhi and Gujarat cases exclude deaths and fourth phase of the lockdown. rationing tests, the number of cases, the case fatality rates are Wednesday evening. pur and Bengaluru have rela-
load. The US, Brazil and Russia continue to be the worst-hit recoveries from the list of con- Bihar, which has seen a major cases could well reflect low highest in West Bengal (6.9%), Delhi with 15,257 confirmed tively fewer cases compared to
together have 44% of all the states with the highest number firmed cases. The seven-day influx of migrants testing rates (See Gujarat (6.2%), and Madhya cases, Chennai (14,254 cases), other cities at the moment.
cases worldwide. India, whose of cases. These states now rolling averages help smoothen moving to their chart 2). Pradesh (4.3%). Large cities Ahmedabad (11,334 cases), and Among the top 15 cities, the
India’s doubling
rate of growth of infections is account for 67% of confirmed volatility effects in daily report- hometowns from Maharashtra continue to be disproportion- Pune (6,445 cases) are the other case fatality rates are highest in
second only to Brazil among cases and 72% of fatalities. ing and are useful to gauge urban centres, time for total (1,897 deaths) ately affected by the coronavi- major hotspots so far. The cities Kolkata (8.4%), Ahmedabad
countries with more than 1,000 Among states with more trends over time. has seen a sharp confirmed cases leads in the num- rus, with Mumbai crossing of Mumbai, Delhi, Chennai, (6.9%), and Surat (4.6%). The
deaths, has 3% of cases world- than 1,000 active cases, the Several states with few cases spike over the has remained ber of covid-re- 34,000 cases and 1,000 deaths Ahmedabad, and Pune account case fatality rates are lowest in
wide (See charts 1a and 1b). doubling rates (based on the previously, such as Assam and past week. steady at 14 days lated deaths so far, this week. The top 15 cities in for 58% of confirmed cases and Lucknow (0.6%), Chennai
India’s doubling time for seven-day rolling averages) are Kerala, have seen a surge in Cases appear over the past followed by Guj- terms of population together 62% of deaths nationally (See (0.8%), and Hyderabad (1.7%).
total confirmed cases has the fastest for Maharashtra (15 cases over the past week. Other to be slowing in week arat (938). Madhya account for 67% of cases and chart 3). In the past week, con- pooja.d@livemint.com
remained steady at 14 days over days), Tamil Nadu (17 days), and states such as Karnataka, which the states of Pradesh (313), 70% of covid-related deaths firmed cases in Chennai and The Mint Covid Tracker runs
the past week. At its current West Bengal (18 days) and the had seen a dip earlier, have also Andhra Pradesh, Delhi (303), and nationally. Data for all cities Pune rose to 14,254 and 6,445 every week in the print edition.
pace, India could cross the slowest for Uttar Pradesh and seen a rebound, partly because Telangana, and Madhya Pra- West Bengal (289) are other have been aggregated from dis- respectively, the fastest For daily updates to the tracker,
200,000 mark in five days. Madhya Pradesh (32 days for of the opening up of travel desh. However, in the case of high-fatality states. Among the trict-wise case data compiled increase among the top 15 cities visit https://www.livemint.com/
Within India, Maharashtra, both) among such states. Active restrictions in the ongoing Telangana, which has been top 10 states with most active by howindialives.com as of by population. Lucknow, Kan- topic/mint-covid-tracker

m OOGLE TRENDS DASHBOARD Loss of smell a covid sign to watch out for
Whether it's to check the weather forecast, the cricket score, or the news, Google is the first port-of-call globally. Sneha Alexander for covid-19 and 7,178 were
And as more Indians get connected to the internet, data from the world's biggest search engine has emerged as a sneha.a@livemint.com found positive.
powerful tool to quantify what the country is searching for. Mint’s Google Trends Dashboard provides a weekly
MUMBAI The researchers found that
overview of the top trending topics of the current week across ten select countries. It also shows the top locations
65% of those who turned posi-
for the most searched topic in India and related topics linked to that topic.

L
oss of smell, or anosmia, tive had reported loss of smell
recently entered the and taste, but the figure was
COUNTRY MOST SEARCHED TERM REACH 2ND MOST SEARCHED TERM REACH World Health Organiza- only 20% for those who tested
tion’s list of possible symp- negative.
Australia George Floyd 200K SpaceX launch 100K toms of the coronavirus infec- The researchers used this to
Sara Winter tion. Prior to this, a study in the suggest that loss of smell and
Brazil 500K Borussia x Bayern 500K scientific journal Nature had taste could be used to identify
Germany Bundesliga 1M Bayern Dortmund 500K found that loss of smell and potential mild cases rather The loss of smell and taste could be used to identify potential
taste was a more than just relying mild cases rather than just relying on flu-like symptoms. AFP

India India Result 5M Locust 200K common cov- m SNAP FACT on flu-like symp-
id-19 symptom toms. Impact on who identified symptoms but disease. As of now, most coun-
Japan Disney 200K Rakuten Mobile 100K than believed smell receptors did not get tested could also be tries rely on established flu
and, thus, could help predict has been observed even in infected. This means 5.4% of symptoms for testing and iso-
Nigeria Children's Day 200K George Floyd 50K the infection. other respiratory viruses and the app responders were likely lation. A restrictive definition
Researcher Cristina Menni previous coronaviruses. to be infected as opposed to would mean non-detection of
Russia Border Guard Day 200K Last call - 2020 50K and others examined symp- The authors said it is impor- only 0.3% who actually tested mild and asymptomatic cases.
South Africa George Floyd 100K Menzi Ngubane 50K toms reported by users of a tant to look at combinations of positive. Looking for loss of smell as
mobile app in the US and the symptoms such as loss of smell The model has limitations as well could help detect more
UK SpaceX launch 1M Mary Wakefield 500K UK. Though 2.6 million users along with fatigue, cough and it is based on self-reported cases.
reported having symptoms, loss of appetite. Using such symptoms and may have over- Also read: Real-time tracking
US SpaceX launch 5M Amy Cooper 2M only around 824,000 identi- combinations reported by pos- predicted infections, but pro- of self-reported symptoms to
fied specific ones. Of these, itive cases on the app, they vides emerging insight on the predict potential covid-19
18,401 said they had got tested predicted that 17.4% of those varying symptoms of a new (go.nature.com/3c6rugB)
MOST SEARCHED TERM IN INDIA: India Result
SEARCH INTEREST BY STATE Search interest SEARCH INTEREST BY LOCATION
1
Babubarhi 100
2-5

NA
6-9
(Bihar)
Baheri
m NEWS IN NUMBERS CORRECTIONS AND
100 92 CLARIFICATIONS
(Bihar) GETTYIMAGES

Berthu
13% 6,000 Mint welcomes comments,
Delhi (Bihar) 92 What is it? The share of tourism in the What is it? The suggestions or complaints
3 Bihar economy of Cyprus. seating capacity about errors.
100 Pachrukhiya 90
(Bihar) Why is it important? The country is keen planned for The
Readers can alert the
to get tourists back as it expects to lose Oval cricket
Baht simar newsroom to any errors in the
(Bihar) 90 70% of the revenue from tourism this year ground in London paper by emailing us, with your
due to the coronavirus lockdown. It’s once the sport full name and address to
opening international travel from 19 resumes. feedback@livemint.com.
RELATED SEARCH TERMS
countries, including Germany, Finland, Why is it
Israel, Greece and Norway, from 9 June. important? It’s It is our policy to promptly
Jharkhand 1 India result 2020 Tell me more: To reassure visitors, the less than a fourth of its normal capacity of respond to all complaints.
9 Readers dissatisfied with the
Daman government has promised to cover the 25,500 seats. This is one of the measures response or concerned about
and Diu 2 Sarkari result
holiday costs for those who might test that Surrey County Cricket Club, which Mint’s journalistic integrity may
6 positive for covid-19 after landing in the operates the Oval, is implementing ahead write directly to the editor by
3 India result 10th
country. The Mediterranean island has had of the reopening. sending an email to
Search interest as measured by Google is asktheeditor@livemint.com
based on the relative interest in a topic 4 10th result 937 confirmed cases of covid-19, of which Tell me more: The last international
compared to all other topics for a 594 people have recovered. No new cases match that happened there was an England Mint’s journalistic Code of
particular location (country/state/city). 5 India result 2020 10th have been reported in the past few days. versus Australia Test in September 2019. Conduct that governs our
newsroom is available at
Source: Google Trends
www.livemint.com
All search data pertains to the 25-27 May period. Data accessed at noon on 28 May. SNEHA ALEXANDER/MINT Data and text compiled by Howindialives howindialives.com is a search engine for public data

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 FRIDAY, 29 MAY 2020
NEW DELHI 03

LOUNGE
Indian Institute of Corporate Affairs
(Ministry of Corporate Affairs)
Plot No. P-6,7,8, Sec-5, IMT Manesar
Distt. Gurgaon, Haryana
29.05.2020
IICA invites applications for engagement on
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DIARIES
Uprooted trees, broken windows, roofs blown
away—the cyclone left the city devastated.
Lounge speaks to six locals about their
experience of living through one of the worst
storms ever to hit the city

MOVIES: Shoojit LUXURY: Can ‘revenge BOOKS: The VANTAGE: Check

Sircar: ‘cinema will buying’ save the many lives of in to the Indian
not go anywhere’ Indian luxury market? emperor Akbar hotel of the future
04 FRIDAY, 29 MAY 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

32,200.59 1.88 9,490.10 1.88 7,732.25 1.80 23,496.50 1.77 9,648.20 1.86 11,622.06 1.34 10,769.34 1.42
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

31,605.22 31,827.80 9,314.95 9,364.95 7,595.55 7,635.00 23,088.50 23,163.25 9,471.60 9,519.70 11,467.83 11,542.25 10,619.01 10,661.76
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

32,267.23 31,641.77 9,511.25 9,336.50 7,746.40 7,616.80 23,539.95 23,114.50 9,669.05 9,492.75 11,633.37 11,505.55 10,777.28 10,661.19

TVS’s better-than-expected Q4
mint

SHORT TAKES
With M&A dead, bankers
keep busy with stock sales
Wall Street bankers are a lot less busy these days,
what with the pandemic-induced drop-off in
performance reassures investors
mergers and acquisitions (M&As) and initial public
offerings. But there’s a gritty, less glamorous deal- R. Sree Ram sharp fall in volumes and negative ery in the rural sector. “While eco-
making realm that has held up, and it’s helping sreeram.r@livemint.com operating leverage, analysts had nomic challenges are there, things
Tough quarter Total sales volume (lakh units) Ebitda margin (%)

banks offset some of that lost M&A and IPO reve- feared a sharper drop in operating should slowly and steadily pick up,” Adjusted for one-time 10

S
expenses, TVS 9.2
nue. A variety of firms, looking for liquidity in the hares of TVS Motor Co. Ltd profit margins. TVS management said on a call with
weak economy, are selling off big stakes they’ve gained 2.7% after it reported While all this is good, financial per-
analysts. “We feel we will see consoli- Motor's profit margin
7.6
long held in public corporations. The latest came Deutsche better-than-expected results formance can be expected to deterio- dation in the September quarter and had limited impact 8
Bank despite negative
Monday when French pharmaceutical giant Sanofi for the March quarter. Sales rate in Q1FY21. TVS Motor clocked are optimistic about the second half of 8
receives operating leverage.
launched a $13 billion sale of its 21% stake in Regen- nod to offer volumes dropped 30% from zero sales in the domestic market last
the fiscal year.” 6
eron Pharmaceuticals Inc. Regeneron agreed to the year-ago period, reflecting the month and exports were below par. Concurrently, the management 6.3
custodial
buy back about $5 billion of stock while the remain- services for impact of the lockdown and transition However, things are gradually expects exports to improve from next
silver
ing $7 billion was sold to public investors in the to BS-VI emission month, helped by eas- 4
largest public equity offering in the heath-care bit.ly/2M7ygrG norms. BUMPY RIDE AHEAD ing of restrictions in key
industry on record, according to data compiled by But thanks to a bet- markets and recovery in
Bloomberg. BLOOMBERG ter product mix and FALL in Q4 revenue TVS Motor’s HOWEVER, the crude oil prices from 2
higher realizations, the was confined to operating profit automaker’s financial
20%, owing to better margin stood at 7.6%, performance can be
record lows. The man- Source: Company;
fall in revenue was product mix and and was better than expected to agement expects to per- Q4FY20 profit margin
before the 0
confined to 20%. It higher realizations the Street’s estimates deteriorate in Q1FY21 form better than the Q1FY20 Q2FY20 Q3FY20 Q4FY20
So low donated ₹32 crore for industry in FY21.
exceptional items

The offshore yuan trades near record intraday SARVESH KUMAR SHARMA/MINT
covid-19, and provided Following the recent
low of 7.1965. for ₹22 crore worth of one-time dis- improving; its manufacturing plants dealer and retailer checks, Dolat Capi- ers, given their better affordability But the recovery will take time. Retail
CNH per USD
7.2 counts to dealers to clear BS-IV inven- resumed production after the relaxa- tal Market Pvt. Ltd analysts agreed that levels. “Covid-19 should also trigger a two-wheeler sales are only 25-30% of
tory. Adjusting for this, operating tion of lockdown measures. Many there will be a slow improvement in shift towards personal mobility, where normal levels, according to channel
7 earnings dropped 13.2% from the year- dealers across India and overseas have demand. Sales began picking up from a section of public transportation users checks by Dolat Capital Market. The
6.8
ago quarter, which was again better started operations. the second week of May, driven by the should switch to two-wheelers, espe- pace of recovery will determine the
6.73 7.18 than the Street’s estimates. With the weather office predicting absence of public transportation. Sep- cially in urban areas,” Jefferies India stock returns. At 20 times FY22 earn-
6.6 Operating profit margin stood at a normal monsoon and the agriculture arately, analysts said the need for pri- Pvt. Ltd said in a note. The commen- ings estimates, the stock is costlier
7.6%, down 1.2 percentage points from sector expecting a stable rabi crop sea- vate transportation in the light of cov- tary and the gradual improvement in than its peers—Bajaj Auto Ltd and
6.4
the December quarter. Given the son, the management expects a recov- id-19 will drive demand for two-wheel- demand should reassure investors. Hero Motocorp Ltd.
6.2

6
23 Aug 2010 28 May 2020
Source: Bloomberg

Trump vs China risks are

SATISH KUMAR/MINT

Covid-19 impact aside, reducing Why the Sun Pharma stock has been
mounting for markets
It’s only a matter of time before the Trump admin-
debt key for Aditya Birla Fashion absent from this year’s pharma rally
istration hits China over a range of grievances. The
question for CEOs, investors and economic policy
makers is how bad things will get. Investors have Pallavi Pengonda Clifford Alvares Nevertheless, in the past year, its falls at clinics. Sun has a large pres-
so far taken rising tensions in their stride, pushing pallavi.p@livemint.com Not fashionable clifford.a@livemint.com formulation, Ilumya, clocked reve- ence in the chronic therapy seg-
global share prices to the highest levels since early ABFRL’s Q4FY20 revenue declined primarily due to weak nue of about $94 million, beating ment, and has been gaining overall

A A
March on optimism over unprecedented govern- ditya Birla Fashion and performance in the month of March. fter a long hiatus, the Nifty analysts’ estimates. This product is market share in the home market.
ment stimulus and an easing of coronavirus lock- Retail Ltd (ABFRL) is Standalone revenue growth Pharma index has outpaced expected to gather pace in FY21 with Nevertheless, it needs to strengthen
23
downs. But that doesn’t mean markets are flashing primarily grappling other sector indices, with sales of about $145 million, accord- its sales force to further drive reve-
the all-clear sign. China’s yuan tested a record low with two things. On one hand, 14.4 some pharma companies making ing to analysts. nue growth. In fact, dragging on its
in offshore trading on Wednesday, while Hong it has to deal with the adverse 11.2 12.3 high double-digit gains. But Sun That growth might otherwise decent Q4
Kong’s $4.9 trillion equity market is valued at its consequences of covid-19 and, 8.8 9.2 Pharmaceutical Industries Ltd’s still not suffice to coun- revenue growth was
7.9 While the stock
most depressed level relative to global shares since on the other, high debt. stock gained a mere 6% in 2020 ter sluggish growth in trades at about the impact of cost
the Asian financial crisis in 1998. BLOOMBERG The branded apparel com- against the Nifty Pharma’s nearly other products and 27.5 times FY20 increases. Selling and
pany’s net debt was ₹2,500 18% rise. cost escalations. Note, earnings, some administration
crore in March-end. ABFRL is -5 For one, while the specialty prod- its US revenues have expenses jumped about
headwinds may
Japan needs more virus looking to raise ₹1,000 crore Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ucts business is growing, it is yet to picked up sequentially
affect
4% while staff costs rose
through a rights issue. One see any marked pickup in revenue. by about 7.1% to $375 5%, crimping overall
stimulus, analysts say aim of this issue is to lower
FY19 FY20
Further, one of its large specialty million. One also needs performance margin growth. Q4
Source: Company, Motilal Oswal Financial Services Ltd
Prime Minister Shinzo Abe says Japan’s virus debt. “Debt build-up is a con- products, Absorica, is likely to face to watch research and Ebitda margin shrunk
response measures are the world’s biggest, but cern, though we believe some SATISH KUMAR/MINT
generic competition in the US in development costs, to 18.4% from 21.6% in
economists say the packages won’t be the last. The unwinding should happen in loss of ₹340 crore due to cov- quarter, given that the turn- December. Besides, the sales push which may rise on further develop- the December quarter.
cabinet approved measures Wednesday that dou- FY21,” said Kotak Institutional id-19. However, under a nor- over for that quarter could be required to drive revenues in spe- ment of its specialty product busi- “Ebitda missed our estimates by
ble Japan’s stimulus to about 40% of gross domes- Equities analysts in a report on malized scenario, revenue down 75-80%,” said brokerage cialty products faces hurdles due to ness. Research and development 9%, with margins showing no signs
tic product. Masaki Kuwahara at Nomura Securi- 28 May. Meanwhile, ABFRL’s growth would have been 13%, firm JM Financial Institutional covid-19. Also, Sun has to incur (R&D) expenses are likely to inch up of any operating leverage of
ties is among economists who say a third or even March quarter results, according to ABFRL. Securities Ltd in a report on heavy marketing and other related to 8-9%, against the present 6%. improved specialty performance,
fourth extra budget will be needed because the first announced on Wednesday Earnings before interest, Wednesday. expenses, which will tend to keep Some challenges in the domestic with SG&A spend and staff costs
two, as big as they are, only limit the economic after market hours, reflect the taxes, depreciation and amor- However, it is encouraging costs high. business are due to a paucity of foot- remaining elevated,” said analysts at
damage from coronavirus, but don’t boost demand hit on its finan- tization (Ebitda) that the company is evaluating Kotak Institutional Equities in a note
as needed for a strong revival. Policy makers are cials because of Investors will do stood at ₹156 several cost-cutting initiatives. to clients. Ebitda is earnings before
hoping to hold the games next year, but Japan will covid-19. well to follow the crore. Adjusting Investors will do well to follow Clawing back US sales ($ million)
(Left-hand scale)
Quarter-on-quarter
growth (%) interest, taxes, depreciation and
need to get back on its feet quickly to do so, accord- Standalone progress of the for I n d i a n the progress on this front from US revenue growth in amortization. Still, much of the
500 30
ing to economist Yoshimasa Maruyama at SMBC revenue declined firm’s cost-cutting Accounting Stan- the medium-term perspec- the fourth quarter
443
firm’s fortunes hinge on a meaning-
Nikko Securities. “The economy won’t be able to 5% year-on-year dard 116 changes, tive. It also helps that more picked up ful ramp-up in specialty products.
measures from sequentially due to a 400 375 20
survive unless they do a third extra budget in the to ₹1,817 crore. c o m p a r a b l e than 1,300 stores of ABFRL’s Covid-19, though, could keep the
summer,” he said. BLOOMBERG Even though the medium-term Ebitda shows a network of 3,041 stores are perk-up in some ramp-up slow and gradual. Costs are
January and Feb- perspective loss of ₹57 crore, operational now. On Thurs- speciality products 300
22.4
10 likely to be alleviated in the near
and steady revenues
ruary saw some said analysts. day, ABFRL’s shares rose by in the Taro business. future. Further, risk of a huge pen-
growth momen- Outlook for the 9.5% on NSE. The rights issue 200 7.1 0 alty on drug price inflation charges
Cash wall gets bigger tum, performance in March current quarter remains sub- and cost cutting measures are in the US is an overhang.
Clear demand emerges when 10-year treasury was hit due to the lockdown, dued, too. “Given the high being viewed positively. 100 -10 While the stock trades at a price-
yields rise above 0.7%. which in turn weighed on fixed-costs nature of ABFRL’s Despite the gains, the stock earnings multiple of about 27.5
2
US generic govt 10-year overall performance. business, we reckon that the has seen a sharp correction of 0 -20 times FY20 earnings, lower than
Source: Emkay Global Q4 Q4
For the March quarter, the June quarter financials would 58% from the 52-week highs Financial Services FY19 FY20 some of its peers, the headwinds may
1.6 company estimated revenue look far worse than the March seen in February. continue to affect performance.
1.92 SATISH KUMAR/MINT

1.2

0.8

0.68
0.4

0
31 Dec 2019 28 May 2020
India’s savers should brace for more pain in this round of interest rate cuts
Source: Bloomberg
Aparna Iyer banks to follow suit and cut demand and supply of non-essen- way into other financial products
Savers losers Weighted average term deposit rate (in %)
SATISH KUMAR/MINT aparna.i@livemint.com deposit rates. To be sure, the 7 tials. The very fact that individu- such as equity mutual funds and
weighted average term deposit Bank deposit rates als are opting for moratorium on shares. Value of equity funds have
have been declining 6.9
Asia money wall looks to
T
he covid-19 pandemic has rate declined by 53 basis points for the past several
loans shows that demand for fresh plummeted. Although bonds
prompted policymakers to between January and March. “In 6.8 loans will be minimal. Further, the have done well as an asset class,
keep lid on treasury yields rush to protect borrowers the banking space, we see that the
quarters and are
expected to drop increase in currency with the investors have withdrawn from
6.7
There’s a wall of money out of Asia capping Trea- from its impact. Inadvertently, as PSBs, while transmitting the repo further due to 6.71 public (16.8% year-on-year as of 8 debt funds owing to troubles with
sury yields. It’s about to get bigger. For 10-year US always, the savings account hold- rate cut, have tried to minimise surplus liquidity and 6.6 May) shows Indians now would the structure of some schemes.
debt, the 0.70% to 0.75% yield range has acted as a ers in India will be collateral dam- the cut in term deposit rates to successive policy
6.5
want to keep a stash of cash for Another avenue where savings
ceiling in the past six weeks. Traders point to moti- age. One sign of this is the falling have minimal impact on the rate cuts. exigencies. go are the government’s small
vated buyers out of Asia, with bonds often gaining interest rates on deposits of the depositor. Meanwhile, for private 6.4 In fact, given that bank deposits savings schemes. There, too,
in early trade when yields are in this range, an indi- country’s largest bank, State Bank banks, the deposit rate cuts have 6.38 are considered most liquid and interest rates have been chopped.
6.3
cation of dip buyers attracted to the levels. There’s of India (SBI). been more aggressive than the Source: CMIE May 2018 Mar 2020 safe, the flow of money into them For the FY21, the rates on various
a school of thought developing that buying of dol- The unprecedented surplus MCLR cuts,” economists at SBI has only grown despite the fall in small savings schemes have been
PARAS JAIN/MINT
lar products from Asia is about to get bigger, mostly liquidity rush to safety of deposits wrote in a note. rates. Between 1 April to 8 May, cut between 70-140 basis points.
due to how economies are reopening across the and the policy rate cuts so far has The most sticky savings deposit the headline inflation. In other save less? The odds are low. One, banks’ time deposits increased by For instance, public provident
region. Traders at large funds have probably been meant that SBI has reduced its rate, too, is now vulnerable. This words, if you leave money in your despite a more relaxed lockdown, ₹4.41 trillion as against a smaller fund interest rate was cut from
less willing to be aggressive in purchasing some less deposit rates twice in just a rate was deregulated in 2011, and savings bank account, it is losing spending is far from pre-pan- increase of ₹1.46 trillion in the 7.9% for FY20 to 7.1% for FY21. It is
liquid bonds, often known as spread products for month. Its one-year deposit rate is banks were allowed to reduce it. value everyday due to inflation. demic levels. Urban centres, corresponding period of the pre- clear that Indians may end up sav-
being quoted as a spread over Treasuries, while at its lowest in 17 years. SBI’s savings deposit rate is down Does this mean that Indians will which are big contributors to con- vious fiscal year. Besides deposits, ing more but earning less on their
working from home. BLOOMBERG It is natural for most other to 2.75% now, which is lower than now start borrowing more and sumption, are yet to see both household savings also find their savings in the current fiscal year.

Mark to Market writers do not have positions in the companies they have discussed here

Dell mulls
tie-ups for
tech-led
education
Ayushman Baruah
ayushman.b@livemint.com
BENGALURU
A T
fter partnering with
NITI Aayog to launch
Mumbai’s first Atal
Tinkering Lab in March, Dell
Technologies is looking to col-
laborate with government and
private institutions to build a
technology-led education sys-
tem geared to develop skills
for the future workforce.
“Our mission is to techno-
logically enable human
progress in every aspect of
life…education is one of the
areas which will have maxi-
mum impact by bringing in
technology and so, it is a natu-
ral focus area for us in India,”
Alok Ohrie, president and
managing director, Dell Tech-
nologies India said.
There is a need for much
richer content and curriculum
to prepare the students for the
future, he added. “Inclusion of
new-age technologies like
artificial intelligence (AI),
machine learning (ML), inter-
net of things (IoT), robotics,
and automation will be very
helpful in building the right
skills for the future.” Ohrie was
speaking at a webinar, ‘Trans-
forming Tomorrow – Skilling
Today’s Youth with Technol-
ogy for Workforce 2030’.
The Atal Tinkering Lab
under the Atal Innovation Mis-
sion aims to foster an innova-
tion and entrepreneurial
mindset in students from a
young age.
Dell’s focus on technology-
led education in India gains
increased significance given
that a large number of stu-
dents have moved to online
modes of learning from physi-
cal classrooms due to the cov-
id-induced lockdown.
Franklin investors send legal notice to Sebi
Jayshree P Upadhyay
Jayshree.pyasi@livemint.com
MUMBAI
A
clutch of high net
worth investors of
Franklin Templeton
India on Thursday sent a legal
notice to the market regulator
asking it to appoint an adminis-
trator to oversee the manage-
ment of the fund house and
evolve a mechanism for timely
payouts to unit holders.
They also wanted the Securi-
ties and Exchange Board of
India (Sebi) to direct Franklin
Templeton to withdraw the
winding up process and under-
take it only if unit holders vote
in favour of the exercise.
They have also demanded
that investors be paid up to ₹2
lakh each in the interim,
according to the legal notice, a
copy of which has been
reviewed by Mint.
The notice has been sent by
Franklin Templeton unit hold-
ers Kaj Associates LLP, Ultra
Walls and Floors LLP and Sat-
Discoms with dues barred from covid loans
Dhirendra Tripathi
dhirendra.t@livemint.com
NEW DELHI
P
ower distribution com-
panies (discoms), hoping
to benefit from the
₹90,000 crore loans that
finance minister Nirmala
Sitharaman said Power
Finance Corporation (PFC)
and Rural Electrification Cor-
poration (REC) will provide
them to help them combat the
covid-19-induced stress, are in
for a surprise, according to a
copy of the document seen by
Mint.
The power sector lenders
have set stiff conditions to lend
money under the scheme. One
of them is that a discom should
not be owing money to either
at the time of availing the loan.
As per the scheme, approved
CORPORATE FRIDAY, 29 MAY 2020
NEW DELHI 05
VIRUS EFFECT
30 Indian groups working to Karnataka calls for
less air traffic from 5
develop vaccine for covid covid-afflicted states
Sharan Poovanna
sharan.p@livemint.com
Globally, 10 vaccine candidates have entered the human trial stage, according to the WHO BENGALURU
he Karnataka govern-
Neetu Chandra Sharma ment on Thursday said it
neetu.s@livemint.com has asked the Centre to
NEW DELHI reduce the number of flights
from five states which were
A
bout 20 groups in India contributing to rising coronavi-
are making quick progress rus infections in the state.
in their efforts to develop a “The state government has
vaccine for covid-19, the requested the civil aviation
government’s principal ministry to reduce the number
scientific adviser, Dr K. Vijayraghavan of flights, emanating from
said on Thursday. These groups are Maharashtra, Tamil Nadu, Guj-
among the 30 in India who are aggres- arat, Madhya Pradesh and Around 1,140 people who came
sively trying to develop a vaccine. Rajasthan to Karnataka, in view back from Maharashtra have
“There are about 30 groups in India, of the high number of covid-19 tested positive for virus. PTI
big industry to individual academics, cases prevalent there,” a state-
who are trying to develop a vaccine. ment by law and parliamentary seen a rise in cases ever since
Some companies are in late pre-clinical affairs minister J.C. Madhus- restrictions on interstate move-
stage. Vaccine development usually wamy said. ment of people by trains and
takes 10-15 years. However, consider- The statement added that road were lifted by the centre.
ing the seriousness of the pandemic, we this was being done with the At least 1,140 people who
need it within one year,” said Vijayra- “sacred intention that there returned to Karnataka from
ghavan, who is also co-chair of the gov- may not be adequate quaran- Maharashtra have tested posi-
ernment’s covid-19 task force on scien- tine facilities” if too many peo- tive, according to government
tific development. ple turn up at the same time. data. Gujarat accounts for 58
“The world is investing in more than The restriction on people’s cases, Delhi and Tamil Nadu 54
100 vaccines as covid-19 is a new dis- movement by each, Rajasthan
ease and we have to get a vaccine as road will continue The state has 39 and Madhya
soon as possible. The entire process A passenger wearing protective gear and face mask waits for transport at the Bagdogra airport on Thursday. AFP for those coming requested the Pradesh two.
will cost $2-3 billion,” Vijayraghavan from Maharash- govt to reduce Though the num-
said. Even after a vaccine is available, reported successful results in human in the fundamental properties of the “In the next few months, covid-19 tra, Gujarat and flights emanating ber of cases from
access will remain a challenge, he said. trials. virus. tests would be available, both nation- Tamil Nadu. Delhi is high, the
from states like
The principal scientific adviser’s The WHO’s list of firms from India On drug discovery, the government ally and internationally, that could be Madhuswamy state government
statement came as the number of coro- involved in developing a vaccine for the said that it is adopting three done on an individual. RT-PCR tests for said that those Maharashtra, TN, h a s l e f t t h e
navirus cases in India crossed 160,000, highly infectious disease includes the approaches. The first approach is virus genetic material. Now, a second coming from Gujarat, MP national capital
among the 10 highest in the world. Serum Institute of India, Zydus Cadila, repurposing existing drugs. The sec- test is in the offing to check for virus these states were out of the list as
The fight against coronavirus particles. There are variations of not only testing this sector has
will be won through vaccine and RACING AGAINST TIME RT-PCR, The Indian Institute of positive, and adding to the VVIP travellers, Union minis-
drugs, said Dr V.K. Paul, member, Technology Delhi developed one,” pressure on institutional quar- ters and stranded citizens
NITI Aayog. THE entire process EVEN when a MODERNA of the US SERUM Institute of Vijayraghavan said. antine centres as well as testing returning to India from other
Ten vaccine candidates from of developing vaccine finally
vaccines globally will becomes avaiable,
and China’s Cansino
Biologics have
India, Zydus Cadila
and Bharat Biotech
Till the time a vaccine is made infrastructure. The restrictions countries.
across the world have entered the cost $2-3 billion, access will remain a reported successful are among the Indian available, so far, total 67,691 people will be in place for eight to 10 Karnataka confirmed 115
human trial stage and 115 are in pre- according to experts huge challenge results in human trials groups at work have been cured in India. In the days. covid-19 cases on Thursday, of
clinical evaluation stage or pre-hu- past 24 hours, 3,266 patients were The state has seen a surge in which 97 cases are people who
man trial stage, according to the found cured. This takes the coun- covid-19 positive cases even as entered from other states (and
World Health Organization’s (WHO’s) Indian Immunologicals Limited, and ond is testing extracts from herbal and try’s total recovery rate to 42.75%. it prepares to relax more lock- countries) and only 18 are from
draft landscape of covid-19 candidate Bharat Biotech. medicinal plants, while the third is Meanwhile, the government said down restrictions post 31 May. local sources, S. Suresh Kumar,
vaccines on Thursday. As of now, US Vijayraghavan said designing drugs using a variety of approaches for new changes in the covid-19 discharge pol- Karnataka, one of the few big Karnataka’s primary and sec-
biotechnology company Moderna Inc to combat covid-19 is challenging, drug discovery, including a hackathon icy shortening hospital stays, have states that managed to keep the ondary education minister
and China’s Cansino Biologics Inc have though so far there has been no change for computational drug discovery. improved the recovery rate. health crisis under control, has said.
for Franklin Templeton in a
response to Mint said, “We
deny all allegations and wish to
clarify that there has been no
illegality, wrongdoing or mis-
representation. We continue to
follow due process, both in
making investment decisions
and in the winding up of these
schemes. We have acted in the
best interest of our investors
and in accordance to all regula-
tions.”
The investors alleged Frank-
lin Templeton had violated all
The investors have asked Sebi to appoint an administrator to regulations and safeguards and
oversee the management of the fund house. MINT thereby defrauded investors of
their funds. According to them,
yam Jain. Last week, these These schemes have combined the asset manager’s violations
investors had sent a notice to assets under management of included investment in securi-
Franklin Templeton demand- ₹25,856 crore. ties contrary to stated invest-
ing a refund of their entire These investors in the legal ment objectives.
investment, and withdrawal of notices alleged that the reasons The investors raised a com-
notice announcing the winding for winding up were not the plaint against Sebi norms list-
up of six debt schemes. ones mentioned by Franklin ing out circumstances under
On 23 April, Franklin Tem- Templeton. They said the real which mutual fund schemes
pleton announced that it is reason was violations of Sebi can be wound up. They said
winding down its six debt norms. that regulation does not pro-
schemes due to severe illiquid- While an email sent to Sebi vide the mechanism through
ity and redemption pressures, did not result in a response which an open-ended scheme
leaving 300,000 in the lurch. immediately, a spokesperson can be wound up.
iar with the development. irrevocable state government
The discoms will have to guarantee before the first dis-
show that the undertakings bursement. The guarantee
given at the time of tranche-I shall cover the loan amount
loan are being implemented, if along with interest and any
not already done so, the offi- other charges towards the
cial said. loan. The tenor of the loan will
The loans be up to 10 years
under the scheme The primary including a mor-
will be co-funded condition for a atorium not
by PFC and REC loan from PFC exceeding 3
in equal propor- and REC is that years. The mora-
tion. The
Loans under the ₹90,000
applicant discoms torium shall only
scheme will be disbursed in amounts under be on the pay-
two tranches. MINT the two tranches are not existing ment of princi-
will be equal. borrowers pal.
by PFC board on 16 May, the In another Interest shall
two power sector-focused len- twist, aimed at be serviced regu-
ders will give funds in two ensuring correct end-use of larly on monthly basis, as per
tranches, each carrying a set of the funds, PFC and REC will the PFC guidelines, also appli-
riders. “The primary condition release the amounts directly to cable to REC loans. There will
before extending the loan will the generation or transmission also be a 1% pre-payment pen-
be that the borrower should company. alty if the borrower does so by
not have any overdues to PFC The borrower will have to taking fresh loans from a bank
or REC,” said an official famil- submit an unconditional and or a financial institution.
06 FRIDAY, 29 MAY 2020
NEW DELHI CORPORATE
VIRUS EFFECT
‘Virus crisis a serious threat Govt explores ways
to open up economy,
to global financial system’ contain virus spread
Elizabeth Roche &
Gireesh Chandra Prasad
The ultimate impact of the pandemic and timing of recovery are uncertain, cautions FSDC
NEW DELHI

Asit Ranjan Mishra

Almost 11% of the shipments
comprising non-essential items
were stuck in transit at hubs.
Medicine,
I
ndia on Thursday explored a
asit.m@livemint.com strategy for containing the
NEW DELHI spread of coronavirus cases
and the possible restoration of
more economic activity with

T
he Financial Stability and minimal risk of spreading
Development Council infection before the fourth
grocery most (FSDC) chaired by finance
minister Nirmala Sithara-
phase of the lockdown ends on
Sunday.
shipped man on Thursday cautioned
that the pandemic poses a serious
A meeting between cabinet
secretary Rajiv Gauba and chief
threat to the stability of the global secretaries of various states
items in financial system as the ultimate impact
of the crisis and the timing of recovery
took stock of the situation in 13
cities, considered the worst Cabinet secretary Rajiv Gauba
April: report is uncertain at this point of time.
“While, decisive monetary and fiscal
affected by the coronavirus and chief secretaries of states
outbreak with about 70% of the took stock of the situation. HT
policy actions aimed at containing the positive cases in the country,
fallout from the pandemic have stabi- according to a government meeting includes working on
Nandita Mathur lized investor sentiment in the short- statement issued after the high-risk factors, indices such
nandita.m@livemint.com run, there is a need to keep a continu- meeting. as confirmation rate, fatality
NEW DELHI ous vigil by government and all regula- Measures taken by the rate, doubling rate, and tests
tors on the financial conditions that municipal corporations for the per million people, according

M
edicines and food
items were the most
sold products across
India in April, with Mumbai,
Delhi, and Bengaluru topping
the chart in terms of pickup
and delivery, according to the
State of logistics in lockdown
report by Shiprocket, a tech-
enabled logistics startup.
The government had per-
mitted the shipment of essen-
tial goods during the nation-
wide lockdown. Shiprocket
said medicines accounted for
80% and groceries contrib-
uted 16% to overall shipments
during the month.
The survey, which involved
1,931 sellers, revealed that
Delhi, Mumbai, and Benga-
luru, were followed by Hyder-
abad and Gurugram in terms
of maximum pickups and
deliveries. The report noted
that 11% of the shipments com-
prising non-essential items
were stuck in transit at hubs.
The findings highlight how
the supply chain was disrupted
despite a rise in demand for
e-commerce deliveries during
the lockdown and order ful-
filment remained an industry-
wide challenge. Delivery of
non-essential products also
suffered because many con-
sumers cancelled their orders
because of the coronavirus
threat, further impacting
demand, said Saahil Goel,
chief executive officer and
co-founder of Shiprocket.
The logistics sector has
played a key role in ensuring
minimal disruption of supply
chains for businesses offering
essential goods, since the lock-
could expose financial vulnerabilities management of covid-19 cases to the government statement.
in the medium and long term. The were reviewed in the meeting, “The central government
efforts of the government and regula- the government said. has already issued guidelines
tors are focused on avoiding a pro- The development comes at a on management of covid-19 in
longed period of dislocation in finan- time when the central and state urban settlements. The Centre
cial markets,” the finance ministry said Finance minister Nirmala Sitharaman chairs the FSDC meeting along with MoS Anurag Thakur in New Delhi on Thursday. PTI authorities are has stressed that
in a statement after the meeting. under pressure to Measures taken containment
Covid-19 has thrown the global month said while financial system resil- The FSDC meeting also reviewed the afloat, which would require developing find solutions for by the civic zones are to be
economy into its worst recession since ience, fiscal support, regulatory flexi- current global and domestic macro- the tools to fairly and efficiently do so. rising job losses bodies for the geographically
the Great Depression in the 1930s, and bility and liquidity provision to date economic situation, financial stability “As the crisis develops from a ‘liquid- and predictions of management of defined, on the
India is no exception. Domestic eco- have helped ensure that the financial and vulnerabilities issues, major issues ity phase’ into a ’solvency phase’, it will a sharp contrac- basis of factors
covid-19 cases
nomic growth is expected to contract system is supportive of economic likely to be faced by banks and other be necessary for governments to con- tion to the econ- such as mapping
for the first time in forty years in FY21. recovery, a more protracted slowdown financial institutions as also regulatory sider a range of policy tools, including omy this fiscal. were reviewed in of cases and con-
Crisil, Goldman Sachs and Fitch Rat- may present new risks to the financial and policy responses, solvency of non- efficient bankruptcy and restructuring India has the meeting tacts and their
ings have projected the Indian econ- system. “Whereas most advanced bank financial institutions, housing systems, government guarantees and entered the list of geographical dis-
omy to contract 5% during the cur- other support for private invest- 10 countries worst persion. This
rent financial year. The Centre has FSDC TAKES STOCK OF THE SITUATION ments, programmes for sector-spe- affected by the coronavirus would help establish a well-de-
announced a ₹20.9 trillion finan- cific government equity injections, outbreak with 164,362 cases of fined perimeter and enforce
cial package including reform FINANCE ministry BUT there is need to THE meeting looked IT also reviewed and establishing asset manage- infection and 4,670 deaths so the strict protocol of lock-
measures to help mitigate the eco- said policy actions to keep vigil on
contain fallout have conditions likely to
at the current global
economic situation,
major issues likely
to be faced by
ment companies,” the report said. far. down,” the government said.
nomic fallout of the pandemic. stabilized investor expose financial financial stability and banks, solvency of The meeting was attended The 13 cities worst affected “Municipal corporations can
The FSDC discussed the initia- sentiment vulnerabilities vulnerability issues NBFIs and HFCs through video conference by the by the pandemic are Mumbai, decide if residential colonies,
tives taken by the government and Reserve Bank of India governor Chennai, Delhi, Ahmedabad, mohallas, municipal wards or
the regulators to help revive the Shaktikanta Das, Securities and Thane, Pune, Hyderabad, police station areas, municipal
economy. “Government and the RBI economies are addressing emerging finance companies and micro-finance Exchange Board of India chairperson Kolkata, Howrah, Indore, Jai- zones, and towns can be desig-
have announced various fiscal and recessions with large fiscal packages, institutions. “Besides, market volatility, Ajay Tyagi, Insurance Regulatory and pur, Jodhpur, Chengalpattu, nated as containment zones, as
monetary measures to pre-emptively many emerging-market and develop- domestic resource mobilisation and Development Authority of India Sub- and Thiruvallur. Many of the required. The cities were
limit the economic damage and would ing economies lack the fiscal space to capital flows issues were also discussed hash Chandra Khuntia, Insolvency and cities such as Delhi, Mumbai, advised that the area should be
continue to address the liquidity and adequately respond. Moreover, since by the Council,” the ministry said. Bankruptcy Board of India chairperson Chennai, Ahmedabad, Pune appropriately defined by the
capital requirements of the financial the beginning of the crisis, investors The WEF report said while in the M.S. Sahoo, Pension Fund Regulatory and Hyderabad are major eco- district administration and
institutions,” the statement said. have fled from emerging markets, with short term, the focus should be on and Development Authority chairper- nomic hubs as well and crucial local urban body with technical
In a report titled “Impact of covid-19 portfolio outflows exceeding those liquidity support, ultimately, govern- son Supratim Bandyopadhyay, among to the revival of the Indian inputs from the local level,” it
on the global financial system”, the during the GFC and other periods of ments might need to take equity in others, and secretaries and senior offi- economy. said.
World Economic Forum (WEF) last major stress,” it added. some firms in order to keep them cials in the ministry of finance as well. The strategy discussed at the elizabeth.r@livemint.com
Kochi is waking up to the trouble with winning solo against the coronavirus
Ajai Sreevatsan & ing that it has only a dozen India. ies,” said K.J. Sohan, a former unique strategies. In the US,
Nidheesh M.K. active covid-19 cases (the low- “This lockdown is not only mayor of Kochi. “Things need for instance, a group of seven
est caseload among major impacting supply chains, but to improve elsewhere.” heavily urbanized states on the
ERNAKULAM/KOCHI Indian cities). also demand,” said Radhicka The port is, in fact, a central eastern seaboard, including
Despite those obvious Kapoor, an economist with the cog in Kochi’s local economy. New York, have decided to

down began on 25 March, but
pharmacies were badly hit.
“The business has seen a
30% hit because of the early
lockdown,” said Puru Dhawan,
a Delhi-based pharmacy
owner. Another pharmacy
owner, requesting anonymity,
said 70% of his business was
impacted by the lockdown, as
his team was not able to sched-
ule pickups.
“Now that the government
has given the green light for
the delivery of non-essential
goods in several areas, we are
looking forward to businesses
picking up pace and resuming
their growth trajectories, to
provide a fillip to the logistics
space,” said Goel.
M
K Hamsa’s plywood advantages, Hamsa’s business Indian Council for Research And, much of the produce coordinate better on opening
factory on the eastern is at a standstill. The raw mate- on International Economic from the state’s plantation up their economies. However,
suburbs of Kerala’s rials (rubber trees) need to be Relations. “Cities like Mumbai economy, from spices to tea, is India still has no such regional
Ernakulam is open for busi- procured with ready-cash, and Delhi have a larger section exported via plans to step out
ness, but he spends a bulk of which Hamsa says he doesn’t of the population who are rela- Kochi. “Export Even in a state like of the lockdown.
his time taking phone calls have since existing orders are tively more affluent. We know demand has Kerala where very To tide
from labour not moving. retail activity is not going to fallen drastically. few items are through the
contractors, m I N D I A “The orders pick up, malls are not going to Despite our resil- produced locally, times, Hamsa has
instead of actu- UNLOCKING were to be sent Local demand within Kerala is heavily reliant on two sources, open up. As long as metros ience in tackling started accepting
inter-linkage of
ally running to big cities remittances and tourism, but both sectors have been hit hard. AP remain shut, we won’t be able the disease, nor- small local orders,
the operations. “I really don’t like Mumbai and Chennai, to capture whatever little mal economic businesses are which he would
need more workers. Shutting which are witnessing rising realized that with the covid-19 bavoor, one of Asia’s biggest demand there is.” activity may be hard to ignore not have taken
down was so easy compared to infections and are not receiv- outbreak, winning alone is no plywood manufacturing hubs, Local demand, within Ker- affected at least otherwise, just to
this (opening up),” he said. ing orders. Not a single load win at all. Even in a state like and a transport nerve centre, ala, is heavily reliant on two for a year,” Sohan retain his migrant
On many counts, Hamsa is can be sent anywhere. All cit- Kerala, where the manufactur- thanks to the British-era rail- sources, remittances and tour- added. workforce. “Except for some
lucky: 80% of his workforce, ies have not recovered like us. ing footprint is low and very head connecting it to the erst- ism, which contribute “Only when more and more 20 people, the remaining
mostly migrants, has stayed They are saying, ‘oh there is no few items are produced while Madras province. The ₹35,000 crore annually to the cities get out of it (full or partial 70-75 workers are still here,”
back, and Kochi, the urban way to pay now’,” he said. locally, inter-linkages of busi- chemical and fertilizer manu- state exchequer, but both sec- lockdowns), we can get closer he said. “If people (in other cit-
hub, which is just an hour’s Despite resuming economic nesses are hard to ignore. facturing units in the area have tors have been hit hard. to normal,” said ICRIER’s ies) don’t build houses or buy
drive from his factory, has activity substantially, Kochi Hamsa’s Southern Plywood also decided to wait it out for “Our future is connected to Kapoor. This has prompted furniture, we are doomed!”
largely opened up, consider- and its surrounding areas have company is located in Perum- things to improve in the rest of the world, not just Indian cit- economies, globally, to adopt ajai.s@livemint.com

mint vaccine maker said it was in talks with governments to back a

BookMyShow sacks, furloughs Karnataka planning to do away
manufacturing expansion that would help to scale up production
SHORT TAKES of future vaccines for covid-19, the disease caused by the novel
coronavirus. It gave no indication of the programme’s costs, say-
ing only that production would take place at sites in Europe and
18% employees amid crisis
MINT
with institutional quarantine
Bengaluru:An expert commit-
tee comprising epidemiologists
REUTERS

Roche partners with Gilead in
covid trial of drug combination
AFP Munich: Roche Holding AG and
Gilead Sciences Inc. are initiating a
late-stage trial of a two-drug com-
bination in hopes of creating a new
weapon in the battle against cov-
id-19. The study will pair Roche’s
immune suppressor Actemra along
with Gilead’s antiviral remdesivir,
the only drug shown so far to fight
coronavirus.
BLOOMBERG
GSK aims for 1 billion doses with
virus vaccine booster plan
Bengaluru: Britain’s GlaxoSmithKline laid out plans on Thurs-
day to produce 1 billion doses of vaccine efficacy boosters, or
adjuvants, next year as the race to develop and produce a success-
ful solution to the coronavirus crisis heats up. The world’s largest
North America and that it would reinvest any profit into corona-
virus research and preparation for future pandemics. Meanwhile,
GSK is working on its own covid-19 vaccine in collaboration with
French drugmaker Sanofi. REUTERS
Debt relief must be offered to all
developing countries: UN chief
United Nations: United Nations Secretary-General Antonio
Guterres said on Thursday that debt relief “must be extended to
all developing, middle-income countries that request forbear-
ance” amid the pandemic.
REUTERS
“Many developing and middle-
income countries are highly
vulnerable and already in debt
distress — or will soon become
so, due to the global recession.
Alleviating debt relief, there-
fore, cannot be limited to the
least developed countries only,
he said. REUTERS
New Delhi: Online ticketing site BookMyShow will either
lay off or furlough 270 employees across its offices in India
and globally, which make up 18.6% of its workforce amid
the covid-19 crisis. In an email to employees on Thursday,
founder and chief executive Ashish Hemrajani said the
company has tried to do its best to offer financial support,
continued health insurance cover and outplacement sup-
port to try and make the exercise less painful and ease the
burden for employees and their dependents. LATA JHA
and virologists, among other
medical professionals, has said
institutional quarantine must
be avoided, Karnataka officials
said. The state has reduced
mandatory institutional quar-
antine for people coming from
other states to just seven days,
and is deliberating on doing away with it. SHARAN POOVANNA
India can be an alternative to China
for sourcing materials, says report
New Delhi: The outbreak of the global pandemic may prompt
US-based companies to look at India as a sourcing partner for
goods, and become a partial replacement for imports from China,
according to a Harvard Business Review article. The article said
heads of several companies are confidentially asking their supply
chain teams to develop sources that are completely independent
of China. “In addition, in the US, there is pressure from employ-
ees who are wary of travelling to China,” it said. SHREYA NANDI
 CORPORATE FRIDAY, 29 MAY 2020
NEW DELHI 07
VIRUS EFFECT
Fitch warns
of big hit to Auto dealers may default on Pricing model based
on outcome to be key
asset quality
of lenders
loans due to unsold stock for IT firms’ survival
PRIYANKA PARASHAR/MINT
Shayan Ghosh Romita Majumdar
shayan.g@livemint.com romita.m@livemint.com
MUMBAI An expected 25% dip in car sales may dent passenger vehicle dealers’ ability to repay debt MUMBAI

I A
ncreased pressure to lend n outcome-based pric-
will erode the asset quality Malyaban Ghosh ing model for new pro-
of Indian banks by 200-600 malyaban.g@livemint.com jects may just aid the
basis points for at least the next NEW DELHI survival of IT service provid-
two years, Fitch Ratings said. ers, who are being forced by

The latest measures
announced by the Reserve
Bank of India (RBI), including
an extension of the 90-day
moratorium on recognition of
impaired loans and allowing
banks to fund interest on
working capital loans, will put
a heavy burden particularly on
state-owned banks to bail out
affected sectors, the ratings
firm said in a note on Thurs-
day.
“The lockdown to contain
the spread of the virus has
taken a severe toll on busi-
nesses, supply chains and indi-
vidual incomes. The impact
for many micro and small, and
medium business sectors is
structural, a meaningful
revival is unlikely even when
the lockdown ends,” it said.
In the near term, banks are
expected to prioritize asset
quality stress management
and capital preservation. Pub-
lic sector banks may not be
able to fully adjust their risk
profiles, in light of the state’s
influence and management
instability, seen by Fitch as key
reasons for poor execution.
“ICICI Bank and Axis Bank’s
execution has also been less
than satisfactory. However,
there is greater management
accountability because of the
presence of strong institu-
tional shareholders and more
intense regulatory scrutiny
compared with state-run
banks, which are ring-fenced
from certain regulatory pow-
ers because of the state’s
involvement,” it said.
Bad loans as a percentage of
total loans will trend up
because of both higher fresh
slippages and lower loan
growth, according to Fitch.
S
everal passenger vehicle deal- the economic disruption
ers are staring at an uncertain caused by the covid-19 pan-
future as high levels of unsold demic to seek new ways of
inventory of Bharat Stage-VI doing business, said experts.
emission norm compliant Outcome-based models are IT service providers are forced
vehicles are leading to increase in not new to the sector, but are to seek new ways of doing
interest cost, which many of them may generally used for proof of business due to the pandemic.
not able to repay to banks. concept before clients commit
Automobile dealers got a breather to invest in a technology or ent. Outcome-based models
from the banks because of the morato- solution. The current global will continue to be popular in
rium of six months on loan repayments crisis has increased the need support, maintenance, and
granted by the Reserve Bank of India. for businesses to have an IT business processing types of
Some of the car makers helped with the backbone, while they struggle projects where the outcomes,
inventory cost on the unsold BS-VI to keep the lights on. With roles, and responsibilities can
stocks but for a limited period. lower capital inputs, this pric- be clearly defined, governed,
However, as sales of passenger vehi- ing model can help businesses and reported,” said Sharath
cles are likely to decrease by more than efficiently to adopt technology Srinivasamurthy, research
25% this financial year because of the without burning a hole in their director, enterprise solutions
slowdown in the domestic automobile pockets. This is more so for and ICT practices, IDC India.
industry, heightened by the coronavi- smaller enterprises, which are The fixed-price or transac-
rus outbreak, dealers will likely need to rapidly adopting technology. tion-based pricing model is
hold on to the inventory for more than Under the outcome-based most commonly used, apart
twice the expected period. model, the IT vendor commits from the time and material
This will significantly increase the Car dealers are saddled with twin problems of depleted car sales and operation costs like property rent payment. MINT to certain service model that
capital requirements of the dealers. levels in the con- This model can involves periodic
Dealers depend on banks and non- turing into dealerships. the same problem in which the stock become a further burden on dealers,” tract. If they help small payments for
banking financial institutions (NBFCs) Sales plunged more than 70% with they hold at present is much higher he added. exceed their ser- businesses to long-term
for short-term capital requirements, the lockdown still in place in urban than monthly sales. According to ratings agency Crisil, vice levels, they adopt technology I T p r o j e c t s
which include buying vehicles from areas, according to a Hyundai dealer in “Dealers who are renting or paying sales of passenger vehicles can decline get paid more based on
without burning
manufacturers, and will struggle to Telangana. for physical infrastructure in high cost in the range of 24% to 26% in this finan- than the agreed e x p e c t e d
meet repayment commitments. However, the cost of real estate and real estate markets will continue to cial year as affordability of customers billing amount. If a hole in resource utiliza-
A Maruti Suzuki India Ltd dealer in other fixed cost still have to be borne by have a tough time going ahead if has fallen drastically because of the they default, they their pockets tion. Srinivasa-
Tamil Nadu, who took loans from the dealers, said the dealer. demand doesn’t improve,” said Vinay economic slowdown. are penalized. murthy warned
banks while purchasing stock “Sales in the first six months of This model that firms should
before the lockdown, is now stuck DEALERSHIP WOES this year will be down by more than works when there is mutual not look for an outcome-based
with inventory of more than 45 50% and that means the number of trust and agreement between model just because they were
days. AS sales crash, THIS situation may IN a normal year, DEALERS for small days required to liquidate the an IT vendor and a client on under financial constraints.
However, with automobile sales task dealers face an uphill propel a slew of manufacturers have manufacturers are stocks will double. How will we pay how to measure and report the However, the pandemic and
of repaying dealerships to shut stock with dealers also beset by the
crashing, dealers will face an uphill banks once loan shop, say industry expecting clearance problem of stocks the interest cost on the inventory service levels and the associ- lockdown have pushed busi-
task of repaying their loans to the moratorium ends experts by FY-end in March exceeding sales and other loans in such a scenario ated billing. The next level of nesses to explore the option
banks once the moratorium gets as the fixed cost will be there?” maturity is to link outcome- aggressively.
lifted. asked a dealer principal of a leading based billing to business out- “All clients are facing prob-
This, according to industry experts, “In such a scenario if we continue to Raghunath, leader, automotive prac- automaker in Haryana, requesting not comes, rather than IT out- lems because of the pandemic
might prompt a slew of dealerships to carry the stock, the interest cost keeps tice, EY India. to be identified. comes. This is gaining traction and are looking for ways to
close down. rising and some may not be able to “Some dealers may have no choice Some dealers with strong balance across ITeS, KPO and BPM reduce costs. That is why they
Dealers expected stocks to be cleared repay the banks. Most dealerships don’t but to exit the business. We could see sheets are, however, of the opinion that sectors. “We can expect an are increasingly seeking digi-
by the end of March, when sales typi- have cash reserves like big businesses,” some consolidation as well across the the situation may not be dire for every- increase in outcome-based tal solutions and outcome-
cally zoom before the end of the finan- said the dealer mentioned above, on dealership network. In addition, many one given the partial help from the pricing models (because of the based pricing models,” Keshav
cial year. With covid-19 spreading in condition of anonymity. OEMs across segments still have sizea- companies. If sales pick up in the com- pandemic), where the rela- Murugesh, group chief execu-
major cities, auto sales crashed during Dealers of some of the smaller auto- ble inventory levels at dealerships and ing months, the situation will start tionship between client and IT tive officer, WNS Global Servi-
the month as customers stopped ven- mobile manufacturers are also beset by if sales don’t pick up then that can improving, they said. vendor is strong and transpar- ces, said in an interview.

Bike-sharing, carpooling gain traction as offices reopen Firms pledge to not profit from
Salman S.H.
salman.h@livemint.com
covid vaccines till pandemic ends as colleagues or the same resi- ing to carpool. “We are actively
dential building,” he said. trying to minimize the risk of
BENGALURU Routematic’s clients can exposure by building a closed-
now directly control the num- loop of known contacts while Leroy Leo Vaccines, when they suc- supply expected next year,

A
s offices reopen with ber of employees per trip. The carpooling. Even if there is an leroy.d@livemint.com cessfully complete clinical going by the pace at which the
the gradual lifting of startup, which used to facili- infection, it would be easier to NEW DELHI trials, will be available at a few development of vaccines is tak-
travel curbs and tate 50,000-60,000 trips per contact-trace,” said Prakash. dollars per dose, relatively ing place. Stoffels said that J&J,

demand increases, urban
mobility startups are rework-
ing their business models, and
introducing new features to
prepare for a world wherein all
must live with the coronavirus.
However, pre-covid demand
will take several months to
return since workplaces are
operating at minimal strength.
Sriram Kannan, co-founder
of employee transport man-
agement startup Routematic
said that in May, it saw demand
from financial services and
media firms as lockdown rules
were relaxed in many states.
Offices that have reopened
are prioritizing employee
safety and productivity, and
Taking a safety-first approach, offices want to have a larger role
in minimizing the risk of infection among commuting staff.
want to have a larger role in
minimizing the risk of infec-
tion among commuting staff.
Vinay Prakash, manager,
public policy at carpooling app
QuickRide said it is working
with private offices and IT
parks to relaunch carpooling
options, while limiting the
HT
number of passengers per trip.
“Irrespective of how one
travels to work, there is a cer-
tain level of risk they are
exposed to, and this is highest
on public transport. Hence, we
are mandating our users to
carpool with people they are
already in contact with, such
G
day before the lockdown, is Bike-sharing startup lobal manufacturers inexpensive compared to what which is working on a vaccine
now doing Bounce has seen AstraZeneca, GlaxoS- even testing of the disease through a subsidiary, is also
1,000-1,500 trips Bike-sharing demand from mithKline, Pfizer and would cost, Soriot said. exploring tie-ups for manufac-
per day. startup Bounce financial services Johnson & Johnson on Thurs- GlaxoSmith- turing in India.
“Because there has seen demand firms and IT day pledged to supply covid-19 Kline CEO Emma The move by “There is a lot of
is a lot of dynamic from financial parks to procure vaccines on a no-profit basis to Walmsley, Pfizer AstraZeneca, J&J, capacity in India.
routing that hap- improve access to any success-
services firms, IT vehicles in bulk. chairman and GSK and Pfizer So we are actively
pens in our ser- “Earlier, our ful vaccine when it is available CEO A l b e r t aims at increasing exploring what
vice, especially parks to procure B2B tie-ups for in the market. Bourla, and Paul we can do. This is
vehicles in bulk the accessibility
between security bike rentals were “It’s certainly a situation Stoffels, Johnson all of over the
checks at office with delivery where we will not charge any & Johnson’s vice of the potential world but the very
gates, and drop- startups, but now royalty and make no profit dur- chairman of the vaccine logical place for
off points, employers can now this is expected to change as ing the time of this pandemic,” executive com- capacity is India,”
intervene and limit the num- more commuters are expected Pascal Soriot, executive mittee and chief he said.
ber of people their employees to use private modes of trans- director and chief executive scientific officer, made similar AstraZeneca is known to be
are exposed to,” said Kannan. port to go to work…We are officer (CEO) of AstraZeneca, pledges at the briefing. in talks with Serum Institute of
QuickRide is also limiting providing corporates with said at a global press briefing Soriot said he expects the India over the manufacturing
the number of users per trip, bikes on lease for three-six hosted by the International first successful vaccine to be and supply of a covid-19 vac-
apart from building a network months, said Vivekananda Federation of Pharmaceutical ready by the end of the year, cine being developed by
of private vehicle owners will- Hallekere, CEO, Bounce. Manufacturers & Associations. with scaling up of capacity and Oxford University.

mint demand met during May so far was recorded at 166.42 GW on

Air India employee unions seek IIT alumni to set up testing lab in
May 26. In the same month a year ago, the peak power demand
SHORT TAKES was 182.53 GW. This shows a year-year-year decline of 8.8%. In
the first fortnight of the month, the peak power demand met was
recorded at 141.87GW on May 15, registering a slump of over 22%
₹50,000 cr rescue package
MINT
Mumbai with 10 million capacity
New Delhi: The IIT Alumni
Council will set up a massive
HT

Country suffered but government
did not realize it: Sonia Gandhi
PTI New Delhi: Congress president
Sonia Gandhi, in a video message,
said the entire country has suf-
fered from the two-month-long
lockdown but this was something
PM Narendra Modi’s government
was yet to realize. “Jobs were lost,
millions of businesses were
destroyed, factories were shut and
farmers had to sell crops.” ANUJA
Power demand surges as mercury
soars, industrial activities revive
New Delhi: Heat wave coupled with higher commercial and
industrial activities under lockdown 4.0 has pushed peak power
demand closer to the normal level this week as compared to May
last year. According to the power ministry data, peak power
compared to the highest level in the same period of May 2019. An
industry expert said peak power demand has risen mainly due to
heat wave and higher commercial and industrial activities under
lockdown 4.0 effective from May 4. PTI
Nearly 2.3 mn people in quarantine
across the country, says Centre
New Delhi: Nearly 2.3 million people, who have moved within
the country or arrived from international destinations during the
ongoing lockdown due to the covid-19 pandemic, are currently
in quarantine facilities
HT
arranged by states and Union
territories. According to an
official estimate, as on 26 May,
a total of 2.28 million people
were in quarantine facilities—
almost double from 12 days
ago (14 May) when the people
put under quarantine were
nearly 1.2 million. PTI
Mumbai: A joint forum of Air India employees and staff
unions has sought a ₹50,000 crore financial rescue pack-
age from the government, stating the airline is a necessity
for the country. In a letter to PM Narendra Modi, the Joint
Forum said that Air India is a “necessity” for the country,
especially in times of crises, and a financial package will aid
not just the carrier but the entire aviation sector. “We
request you to kindly grant Air India ₹50,000 crore pack-
age,” the Joint Forum said in the letter. PTI
genetic testing lab, MegaLab, in
Mumbai for covid-19 and other
infectious diseases. It will have
a capacity of 10 million RT-PCR
tests per month. The IIT body
will start identifying partners to
run labs through a global com-
petition. The council has con-
sulted several domain experts to set up the labs.ABHIJIT AHASKAR
Projects worth ₹21.11 tn at standstill
in red zone districts, says report
Mumbai: While the government has relaxed lockdown norms,
as many as 8,917 projects worth over ₹21.11 trillion—which
account for 37.4% of total projects underway in the country—in
108 red zone districts are at a standstill, a survey said. When the
government announced lockdown 4.0, it allowed relaxations in
the green, orange and red zones, while restricting activities in the
containment zones. The zones have been classified based on the
number of covid-19 cases. PTI
08 FRIDAY, 29 MAY 2020
NEW DELHI

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

BHARAT’S LOCKDOWN
DIET IS BOILED RICE, SALT
A ground report reveals pervasive hunger and undernourishment in rural India awash with returning migrants

Clockwise, from left: Residents of Kherwa village at a hunger strike last

week; Manpyari with her children at the MGNREGS worksite near Banjara
village; and eight-year-old Sandip whose diet is boiled rice and salt on
most days in Jhandupurva village in Bundelkhand. SAYANTAN BERA/MINT

Sayantan Bera are unaffordable. During a three-day visit off the list, most likely due to a mismatch hunger was killing them. Later that day, back is a compulsion),” said Suresh Kumar
mint
sayantan.b@livemint.com to Bundelkhand last week, this reporter of details while linking their ration card SHORT local government officials reached the vil- whose family had to borrow ₹6,000 to pay
BANDA witnessed signs of pervasive hunger and with Aadhaar number. STORY lage with an offer to settle matters by pro- for his journey back home. Earlier that
undernourishment. Entire families, The other problem is that the list of viding 5kg of grains per family. They day, Kumar went to a MGNREGS worksite

T
hanks to an all-familiar power including children are skipping meals; beneficiaries is based on the population refused. As evening fell on Kherwa, chil- but was turned back.
cut in the evening, it’s pitch families out of the food security scheme figures from the 2011 census. Poor WHAT dren with skeletal figures rolled on the Early evening, that worksite next to
dark in Jhandupurva village. A are on the brink of starvation. households with young chil- mud, pleading for food. Banjara village was brimming with peo-
few torch lights from smart The region is a hub of dren and newly married Bundelkhand in Uttar Pradesh “We were tired. The local officers are ple. Over 50 workers were digging
phones pierce through the distress migration— women are often left is an impoverished hub of like monkeys sitting on a tree, eating fruits earthen pits and carrying the soil to make
darkness and illuminate the shape of an they say 80% of the out. Currently, the distress migration. Now these and throwing leftovers at us,” said Babulal, a narrow road. Among them was Manpyari
Delhi migrant workers are returning
eight-year-old boy. Thin, frail, head tilted families here have a food security Act a burly man in his 50s. and her children, two boys aged 10 and 13,
a little to the side, he can barely speak member who is a covers about 770 from states like Gujarat, It took the district administration more who were helping their mother struggling
when asked his name. Sandip is so weak migrant. Now, million people, Maharashtra and Delhi than three days, during which residents with a hoe. Manpyari’s husband who
that he stutters and pauses between they are coming UTTAR PRADESH but a recent esti- continued their hunger strike, to agree to works at a construction site in Delhi could
words. back, returning Banda mate by econo- the demand of a ration card for every fam- not send money for two months. She is
The boy has already finished dinner, his from states like Bundelkhand mists Jean Dreze AND ily. It took kuchbandhiyas two and a half hoping the MGNREGS wages will provide
mother Vidya said. Boiled rice with milk: Gujarat, Maha- and Reetika months of struggle to achieve what could the much needed cash to buy groceries.
about half a litre of milk for the six-mem- rashtra and Delhi Khera suggests Entire families, including children, have been fast tracked by the govern- A peculiar feature of the job scheme is
ber family, including four children. A rice (which is 700km that at least 100 are skipping meals; families out of ment—enrolling vulnerable families that workers are paid according to earth-
gruel with more water than milk, and salt away). Migrant work- million eligible peo- the food security scheme are on under the NFSA during a pandemic. work and not a daily wage. For instance, if
added to taste. No wonder Sandip is suf- ers are fleeing both job ple have been left out. the brink of starvation. Wages Manpyari manages to complete earth-
MADHYA PRADESH from the rural jobs scheme are
fering from what nutritionists term “wast- loss and the coronavirus Gita, a widow and BACK TO NOWHERE work equivalent to 80 cubic feet in a day,
hard to come by
ing”—a sign of acute malnutrition and pandemic for the relative
chronic hunger.
This landless family dependent on day
safety of their homes.
mother of seven, is among
them. She relocated with her chil-
But in an agriculturally-impoverished dren to her in-laws’ house after her hus-
A t six in the morning last Wednesday,
Prem Narayan was the first to arrive
at the office of a local non-profit in Atarra.
she will receive a day’s wage of ₹202. This
is why her children were helping her fin-
ish the task by the end of the day.
jobs is covered under the federal food region, their only hope is the paltry wages band died of tuberculosis. Despite MOREOVER He came to collect a food kit consisting of At the same worksite where Manpyari
security scheme and normally gets 20kg from the rural jobs scheme. Even those are repeated attempts, Gita could not get a pulses, grains and oils the non-profit toiled with her young children, 65-year-
of rice and wheat every month. As a special hard to come by. ration card. The family’s daily bread is Just providing rice and Vidya Dham Samiti was distributing old Haricharan worked with his two
assistance to help families tide over loss of now contingent on the charity of neigh- wheat at a highly subsidized among vulnerable families. A year ago, grown up sons. He had high hopes on the
economic opportunities during the lock- FALLING OFF THE MAP bours and handouts from local non-prof- price may not be Prem Narayan could not have foreseen scheme to sail him through these difficult
enough when day jobs
down—enforced to contain the spread of
covid-19—the family is also getting an I n Musanagar, a tiny hamlet in Atarra its. The afternoon this reporter met her,
town in Banda, women struggling to the menu for lunch was the ubiquitous salt
extra 20kg of grains free for three months. cook and feed their children were on the and rice.
are scant and families
have no cash in hand
standing in a queue to collect a handout.
Some days back he had made an ardu-
ous five-day journey from Surat in Guj-
times. It turns out, the family had already
finished earthwork equivalent to 100 days
(the maximum permitted in a year) but
But despite this support, they are bat- edge. Most here start their day before sun- However, nothing was more symbolic arat, piled into the back of a truck like an kept on working. “I think they will not
tling persistent hunger. rise to unload sacks of groceries at the of systemic neglect than a visit to a ration “animal” with 70 other migrant workers. deny the wages even if I work for more
Without a day job, Sandeep’s father local market. They receive between 50 shop on the fringes of the Atarra town. A HUNGER STRIKE “We slept while standing and only had than 100 days,” Haricharan said. This des-
Rajesh has run out of cash. Earlier that paise to a rupee for a bag, but there is too Last month, as part of a relief package to
day, he borrowed ₹1,000 at an exorbitant much of a rush nowadays.
10% interest per month. Vidya meanwhile
help poor families deal with the lockdown,
There are fewer bags to unload and the Centre decided to add a kg of nutri-
T he sights and sounds of Kherwa vil-
lage in Naraini tehsil of Banda
seemed straight out of a surreal film. The
soaked chickpeas to eat,” Narayan said.
Yet, he would not waste much time before
making his way back to Gujarat once the
peration to work without guaranteed
wages will work out for Haricharan only if
the government revises the 100 day norm.
banks on barter—exchanging wheat for more hands willing to work. Labouring for tion-rich pulses to the monthly quota of word bhookh, vernacular for hunger, was lockdown is lifted.
vegetables, spices and oil. The subsidised four hours between 3am and 7am, the ration for every NFSA household. But the scribbled with bright red paint all over— There is little which can sustain landless HOPE FOR NORMALCY
food grains double up as a currency. But it lucky ones earn about ₹50. At least a third kala chana or black gram supplied to the
also means the grains get over quickly. In of the families in Musanagar do not have shop was in fact green: it was rotten and
the morning, Vidya ration cards under the infested with fungus. The shop owner
on a giant concrete pipe at the entrance to
the village, on the walls of mud huts, and
each and every brick and mortar toilet
families in parched Bundelkhand. Agri-
culture is marginal. The rural jobs scheme
which guarantees 100
D espite the gloom all around, there
were moments when the desire for
normalcy shone
bought a kg of brinjals in National Food Security Ram Bihari Yadav said the entire supply of built with government grants. days of work for a family through. This reporter
exchange for a kg of NFSA beneficiaries Act (NFSA), 2013, which 800kg he received from the Food Corpo- For over two months, ever since a strin- is mired by low wages There is little which can met a young five-year-
wheat. “It has been often fall off the list, guarantees 5kg of grains ration of India was fungus-ridden, not gent lockdown was enforced on 25 March, and delayed payments. sustain landless families in old boy Anshu and his
months I cooked arhar per person per month. even fit to use as animal feed. Yet families the residents have been knocking on all Of late, work generated friend who were busy
(a nutrition rich pulse most likely due to a “Who do we complain were collecting their share. doors for food relief and demanded that all under the Mahatma Bundelkhand. Agriculture is working on a pile of
variety),” she said. mismatch of details to? Who do we cry A brief chat with Yadav led to more dis- excluded households be enrolled under Gandhi Rural National marginal. The rural jobs earth with a hoe. This
The plight of this fam- before?” asks an angry closures. The Uttar Pradesh government, the food subsidy scheme. But local offi- Employment Guarantee was in Kherwa, where
ily, from the Banda dis- while linking their ration Laxminiya. She recently for instance, announced that during the cials dropped some grains as a one-time Scheme (MGNREGS) scheme is hamstrung by low the elders were busy pre-
trict in the dry and arid applied for a ration card lockdown period families without a ration relief and disappeared. has picked up pace but paring for the hunger
Bundelkhand region of card with Aadhaar w h i c h h a s b e e n card will receive subsidised grains. But The residents of Kherwa are Kuchban- there are too many wages and delayed payments strike.
Uttar Pradesh, points to approved, yet she was Yadav is yet to receive any extra allocation dhiyas, a nomadic tribe which roam villa- hands eager to work. “We are building a
a peculiar problem. Just providing rice asked to wait for three months to get her of grains to implement this promise. ges in Bundelkhand sharpening stone Several rights groups have urged the colony,” Anshu said in an excited manner.
and wheat at a highly subsidised price of share of grains. The local ration shop Families without a ration card often grinders and selling trinkets and clothes. government to pay workers daily wages in In the local parlance, colony means subsi-
₹2-3 per kg may not be enough when day dealer told her she can lodge a complaint visit his shop but are turned away. He The lockdown, which also sharpened cash, and provide on-site employment to dised government housing—a highly
jobs are scant and families have no cash in before the district magistrate if she wishes. added that more families are being caste prejudices, meant they were unable workers and increase workdays to help sought-after benefit in these impover-
hand. Is it possible to survive on just boiled Another woman, 40-year-old Siasakhi enrolled under NFSA, but old beneficia- to move around and were left to fend for families tide over the ongoing pandemic. ished villages. As I moved further away
rice and rotis? said that names of two members in her six- ries are also getting dropped. In 2020 till themselves. The Centre is yet to relax the norms but and was about to disappear into a lane,
But most families are doing exactly that: person household were deleted from the date, 42 names were included but 72 were Frustrated, they decided to sit on a hun- has provided an additional ₹40,000 crore Anshu screamed at the top of his voice:
consuming boiled rice and salt or wheat ration card recently. This was a pervasive dropped from the list of beneficiaries ger strike last week. They banged steel for the scheme to ensure more families get “Arey colony nahin, toh basta de deo.” If
flatbread with chilly paste. Even potatoes complaint. NFSA beneficiaries often fall Yadav caters to. plates and sang in a languid tone how the work. “Wapas jana majboori hai (going you can’t give a colony, give a school bag.
 INESS O
US FRIDAY, 29 MAY 2020
NEW DELHI 09

F
Life
ISTOCKPHOTO

REAL TIME
LEADERSHIP
SHALINI LAL

Write to us at
businessoflife@livemint.com

IN THE NEW OFFICE,

EVERYONE NEEDS TO
THINK AS A FOUNDER
ISTOCKPHOTO

F
or over two decades, the idea of the ambidextrous organiza-
tion has influenced leaders across the world. The idea is sim-
ple. To do well over the long run, any organization has to be
good at two very different tasks—exploitation and exploration.
There is, however, a tension between the two. The skills and
mindsets that support the two are different. So different that
Charles A. O’Reilly III and Michael L. Tushman in their famous
2004 Harvard Business Review article, “The Ambidextrous Orga-
nization”, recommended that it would be best if different parts
of the organization focused on each.
The first of these, “exploitation”, is easily translated to “busi-
ness as usual” and is about becoming better at the business
already working for you. It is about building a better brand and
attracting more customers. This is the place where logic holds

At home, CEOs learn to

sway. The problems to be solved are amenable to logic, analysis,
tools and processes. There are uncertainties but can be managed.
The natural home ground of the MBA. The second, “exploration”,
is about discovering future business opportunities by predicting
trends in popular culture, technology, geo-political realities and
economics, and then building a response that can serve the best.

FACE THE CAMERA

All this is a messy non-linear process. Part intuition, part sci-
ence, and part pure economics. Traditionally, the playground of
innovators and entrepreneurs.
Given how distinct the work, skills and mindsets are for these
two tasks, different parts of organizations have focused on each.
This was always an uneasy balance, but
Exploration is it worked, till now.
A sudden shift to remote work means corporate leaders have had to learn to shoot video, discovering The pandemic has put an end to
business as usual. So what does this
communicate better on screen and do tasks that their assistants would handle in the office future business mean for leaders from here on?
opportunities The answer is doing the difficult bal-
by predicting ancing act between exploration and
Shweta Taneja new normal,” says Ashutosh Gupta, country manager, ers now need to practice more emotional intelligence trends exploitation. This balance, which once
LinkedIn India. when using digital tools, says Shalini Bhattacharya, resided at the organizational level, has

P
rashanth Achar, 51, was making a video on
anxiety management for his employees at
GP Petroleums, sometime in April. But the
experience was making the Mumbai-based
CEO himself tense since it was his first time
working with a selfie camera. Before the lockdown, his
PR team used to take care of such initiatives. “You look
so anxious yourself,” laughed his wife, seeing the result.
He did many takes that day, finally sending the one
which his wife shot.
Ever since the lockdown started, corporate leaders
have seen a dramatic change in the way they communi-
cate. In the absence of face-to-face meetings with clients
or employees, it’s the camera pinhole that has become
the medium to instill confidence, drive productivity and
mentor the organization, and leaders are rising to the
occasion by upskilling themselves. CXOs, especially
from traditional industries, have been taking trainings
by their digital teams, learning new tools to do webinars,
e-town halls, virtual meetings and virtual coffees.
“I call it public speaking in private, to a camera,” laughs
Achar.
The use of camera has become critical, agrees Koki
Sato, who took the mantle of general manager in Takeda
India, a pharmaceutical multinational, in April. Sato,
who has been stuck in Ukraine since India stopped inter-
national flights, has slowly developed trust with his 100-
plus employees in India using WebEx and Microsoft
Teams, doing one-on-one meetings, webinars, town
halls, presentations and discussions as well as attending
informal catch-ups. “It was sudden, so I made connecting
with the team a key priority,” he says.
A recent LinkedIn survey suggests 67% of senior exec-
utives have increased their time spent in online learn-
ing. “Most of these are first-time managers and senior
leadership who are figuring out how to operate in the
The lockdown has brought the communication func- founder, White Ray Coaching, who specializes in leader- now moved to team and individual lev-
tion to the fore and accelerated deployment of video con- ship coaching. els. It is not just organizations that need to balance the two tasks.
ferencing apps like Zoom, Skype, WebEx, says N. Bringi Individual leaders will have to do it too.
Dev, advisor and retired professor, Indian Institute of THE RIGHT ANGLE A recent study by the Miami Herbert Business School on what
Management-Bangalore. “Leadership has realized they With the distance of working-from-home, the personal differentiates organizations that have managed to stay “liquid”
cannot take communication for granted anymore and life has also become part of the professional space, giving during the pandemic is the willingness of leaders across levels to
need to spend time for volatile, uncertain, complex and more creditability to the leader’s image. When Arvind shift their focus from exploitation to exploration. Not surpris-
ambiguous situations and be prepared and adequately Subramanium, managing director and chief executive ingly, in the most responsive organizations, leaders are spending
provisioned in terms of infrastructure, security, access officer of real estate business Mahindra Lifespaces, suf- more than half of their time on the medium to long term futures.
and bandwidth,” says Dev. fered a back spasm, he conducted a video conference With covid-19 and technology changing the rules of the game,
It’s not that easy though. In online while lying in his bed. To avoid today every leader needs a much stronger eye on the future.
interactions, it’s easy to miscommu- The camera embarrassment, he had switched off This is, of course, a mixed blessing. The task of business leader-
nicate as emotions, body language are the video but it turned out that his ship gets even more complex, as leaders are forced to shift their
harder to decode. That’s why Achar lens has team could see his supine posture. focus several times a day between business as usual and business
spends more time in online meetings. become the “My three children keep demanding for the future. They will need the logic of the MBA while dealing
“The lesser I see the team, the more devices and spaces at home while I’m with logical and analytical problems, and they will need the logic
important I think is the need to medium to instil in meetings and my employees hear of the entrepreneur while dealing with the future.
engage, empathize and minimize confidence, drive them screaming,” he says, laughing, In the past, ambidexterity referred to the ability to use both
anxiety,” he says. productivity and adding that needs to improve his tech one’s left and one’s right hand equally well. In the future ambi-
Globally, according to LinkedIn’s skills more. dexterity will be about the mind. It will mean the ability to use the
survey, two out of five professionals mentor the Like Subramanium’s incident, the left brain focused acts of exploitation as well as the right brain
working from home believe their organization team meeting which Noida-based focused acts of exploration. It is not just organizations which need
leaders can help them feel supported Saurabh Goyal, president, Havells to be ambidextrous. It is each of us.
by organizing more team video India Limited, was heading, erupted
meetings. “There’s no feedback into laughter when his vegetable ven- Shalini Lal is the co-founder of Unqbe, a think tank and advisory
loop, so it affects discussions on sensitive personal top- dor called him in the middle of it. “These moments might firm focused on the future of work.
ics or even ideating together using a whiteboard,” says sound embarrassing but they help soften relationships
Jacob Peter Kidangath, senior vice president, Robert and make me look more human,” says Goyal.
Bosch Engineering and Business Solutions. This has At the end of the end of the day, it’s the art of listening
made a fundamental change in the way Kidangath com- and empathizing that will define a leader in this new nor- Want to know what Gens Y and Z
municates. “Since observing body language is not pos- mal, adds Mankiran Chowhan, managing director, soft- really want? Find out more about
sible, as a leader it has become important to use the ware solutions company SAP Concur. “We have to pre- their world, what they follow, and
right pace, right words, use pictures and examples,” he pare harder for the meeting and listen more actively as why, in Business Of Life’s podcast
explains. it’s virtual.” The Millennial Mind hosted by
The medium has pushed leaders to communicate Pooja Singh
feedback on one-on-one calls instead of messages. Lead- Write to us at businessoflife@livemint.com

Bengaluru’s supersized breweries go the takeaway route

Shivani Kagti already have drained their brews as they were about 15% of its stock in the first week of the breweries in the first week. “I went to breweries
unsure about whether we’d get permission to sell,” announcement being made. Additionally, they’re where I was a regular,” says Manchanda, who found

A
little under two weeks ago, the Karnataka
government allowed microbreweries to sell
beer in takeaway growlers (airtight jugs
made of glass, ceramic or stainless steel), bringing
some cheer to brewery owners, who hope this will
become the norm in a city that loves its beer but has
been under lockdown for more than two months.
The excise department has agreed to let micro-
breweries sell existing stock of beer until end of
June. For brewers, this is a relief as craft beer only
has a shelf life of three months. Bengaluru’s 60
microbreweries are large spaces of at least 10,000
sq ft, and brew several thousands of litres of beer.
Most of the stock of craft beer would have had to
be drained by the end of June if the order had not
come through. The announcement came after the
Craft Brewers Association of India (CBAI) in Benga-
luru spent over a month lobbying with the excise
department.
Ajay Nagarajan, CEO, Windmills Craftworks,
said it the utility bills alone to keep beer cold runs
up to a lakh a month. “Some breweries might
he says.
Given that microbreweries in Bengaluru are
super-sized (as per a government order they have
to be located within premises spanning a minimum
of 10,000 sq ft), upkeep and maintenance has been
a challenge with no revenue coming in since the
lockdown was announced in March. The largest
among them is Byg Brewski in Hennur, in north
Bengaluru, which is spread over 65,000 sq ft.
Pravesh Pandey, director-partner at Byg Brewski
Brewing Company, likes to look on the bright side.
“When we reopen we won’t have a problem with
social distancing among tables. In fact, we’ve
already compiled a 30-pointer guideline on what
measures we’ll be taking right from valet to hostess
to service in the kitchen. There will be new roles
like someone who just keeps sanitising the space,”
Pandey says.
Apart from selling their own brew, bars have also
got permission to sell existing stock of liquor bottles
at MRP until end of May. Toit, which had 20,000
litres of beer in its cold room, managed to move
Thousands of litres may have to be drained as craft
beer has a shelf life of three months.
also selling liquor bottles at MRP. “If we could
afford to retain the stock, we would have preferred
that but we need to pay salaries and overheads,”
says Arun George, one of the co-owners of Toit.
Pandey shares a similar sentiment. “Right now, we
just need to liquidate whatever assets we can as
there are too many liabilities,” he says.
There was a rush for beer during the first week-
end but demand has tapered off after that. Vishal
Atreya, chef and managing partner, The Pump
House, is hopeful things will pick up since public
transport has been allowed now. “We have about
5,500 litres of beer in stock and I don’t think we’ve
sold even 1,000 litres. There’s only a limited
amount [5 litres] that one person can take away.
Plus, craft beer cannot be stored at home for more
than a few days,” Atreya says.
Byg Brewski has stuck instruction labels regard-
ing storage and consumption on each bottle.
Some craft brew enthusiasts have made multiple
trips to their favourite breweries already. Food con-
sultant and writer Monika Manchanda visited three
that each place had a fairly organised system. “At
Windmills, a masked valet asks you want you want.
If you are buying in their bottle, they bring what
you want. You pay online via mobile apps. If you
have a growler, they collect and fill it. The person is
wearing gloves and mask all the time,” she adds.
Akash Hirebet, beer consultant and co-founder
of Craft & Co, an online community of craft bever-
age enthusiasts, has put up a rather helpful post on
Facebook with a list of 30+ microbreweries that are
selling craft beer along with details on which beer
types are available. “I picked up some brew from
Arbor Brewing Company few days ago but am wait-
ing for my growler to arrive so that I can head out to
more places,” says Hirebet, who has also shared
specifications on kind of containers people are
allowed to carry to bring their beer home. Most
microbreweries also have stock of one litre and two
litre corked or sealed bottles that they are providing
to customers.
Write to us at businessoflife@livemint.com
10 FRIDAY, 29 MAY 2020
NEW DELHI NEWS

Uninsured
India co-opts solar grid to Modi makes case for
PPE kits
each state to have at
add to bills
FROM PAGE 1
fend off OBOR’s shadow least one ‘solar city’
PTI

“These charges include cost of FROM PAGE 1

PPE billed at as high as
₹5,000-9,000 a day; care and
hygiene, and waste manage-
ment charges, which are other-
wise part of the room rates,”
Chopra said. “The current con-
struct of a health insurance pol-
icy does not cover these spe-
The proposed grid gives India a chance to take the lead in evolving global strategies power generation”, the state-
ment said.
The move could add heft to
Utpal Bhaskar India’s image as a global clean
utpal.b@livemint.com energy champion, as the
NEW D review also focused on creat-
ing an ecosystem in India for

cialized charges for covid treat-
ment, including the cost of care
and hygiene and, hence, insur-
ers are not wrong in making
such deductions,” he said.
The Insurance Regulatory
and Development Authority of
India (Irdai), in its circular
dated 27 September 2019, pub-
lished a list of 68 items that can
be treated as optional. The list
includes kits that are used for
treatment of patients. The reg-
ulator has left it to the insurers’
discretion whether they want
to pay for such kits.
“Such costs are not covered as
they can be treated as optional.
The regulator has mentioned
‘kits’ in the list because there are
a variety of them available and
PPE is just one of them,” said
Prasun Sikdar, managing
director of ManipalCigna
Health Insurance Co. Ltd.
The excluded items, which
also include oxygen masks,
may account for almost 20-25%
of hospital bills. Given that the
average cost of covid-19 treat-
ment could be ₹1.9 lakh, a
patient may have to pay as
much as ₹47,500, or 25% of the
hospital bill.
This is not a blanket exclu-
sion and insurers are paying for
kits wherever it forms a part of
the packaged rate. “If PPE kits
get billed into the overall room
charges, insurers pay for it, but
if they are shown separately
like in the case of non-covid
treatments, then they can be
excluded,” said Kapil Mehta,
co-founder, SecureNow.
Anything that is billed exorbi-
tantly will not be covered, said
Dr S. Prakash, managing
director of Star Health and
Allied Insurance Co. Ltd. “Exor-
bitant by definition means any-
thing that is above the market
price. There are various grades
of PPEs. Hospitals can charge up
to ₹1,000,” said Prakash.
Insurers said there’s a prob-
I
ndia has invited bids from con- manufacturing of ingots,
sultants to make an ambitious HDFC Life wafers, cells and modules.
launches
cross-border power grid plan rider for
This ties in efforts by India
that would seek to transfer solar cancer, to become an integral part of
power generated in one region accidental the global supply chains, as PM Narendra Modi has called
to feed the electricity demands of death and firms look to move production for an innovative model for
disability
others. lines out of China due to the rooftop solar plants.
A request for proposals (RFP) bit.ly/2XyGlLo disruptions caused by the cor-
prepared by India’s ministry of new onavirus pandemic. cost of power generation.
and renewable energy for inviting “Emphasis was also made on “Policy initiatives including
consultants to develop a long-term ecosystem development for revised Tariff Policy and the
roadmap for the ‘One Sun One manufacturing of ingots, Electricity (Amendment) Bill
World One Grid’ (OSOWOG) com- wafers, cells and modules in 2020, to redress the problems
prises a technical and financial pro- India, which would also help afflicting the power sector
posal. The RFP was reviewed by generate employment, in addi- were discussed,” the state-
Mint. The ministry has called a pre- tion to various other advanta- ment said.
bid meeting with the interested ges,” the statement said. Reflecting its intention to
consultants on 5 June. The pre-bid meeting for developing One Sun One World One Grid has been called 5 June. BLOOMBERG India is home to the world’s use the coronavirus crisis to
“This is by far one of the most largest clean energy pro- initiate power sector reforms,
ambitious schemes undertaken by supply across borders, with the “With India at the fulcrum, the about India starting consultations gramme, which the government
any country and is of global signifi- mantra of ‘One Sun One World One solar spectrum can easily be with the World Bank as its techni- aims to have India is home to has readied a raft
cance in terms of sharing economic Grid’ (OSOWOG). The vision divided into two broad zones, viz. cal partner to implement the global 175GW of clean the largest clean of measures. In
benefits,” said a senior Indian gov- behind the OSOWOG mantra is Far East which would include electricity grid plan pitched by energy capacity energy scheme, the draft Electric-
ernment official, requesting ano- ‘The Sun Never Sets’ and is a con- countries like Myanmar, Vietnam, Prime Minister Narendra Modi. by 2022, includ- which aims to ity Act (Amend-
nymity. stant at some geographical loca- Thailand, Laos, Cambodia, etc., and The plan has been spread across ing 100GW from ment) Bill, 2020,
have 175GW of
The building of the global grid tion, globally, at any given point of Far West which would cover the three phases. The first phase deals solar projects. the government
comes against the backdrop of time,” according to the RFP. Middle East and the Africa Region,” with the Middle East-South Asia- The current clean energy has pitched for a
China’s attempt to co-opt South-East Asia (MESASEA) capacity is 33GW capacity by 2022 cost-reflective
countries into its ambitious POWER RACE interconnection for sharing of solar power. tariff and setting
One Belt One Road initia- green energy sources such India is also up an Electricity
tive that seeks to invest bil- BUILDING of the COVID-19 has given THE global grid may FOSTERING cross- as solar for meeting electric- ushering in next-generation Contract Enforcement
lions of dollars in infra- global grid is to
countervail China’s
India a chance to be leverage the ISA,
seen as taking a lead which India
border energy trade
is key to Modi’s
ity needs including peak power sector reforms that Authority to implement power
structure projects includ- attempt to co-opt in evolving global co-founded and has neighbourhood-first demand. include implementing a direct purchase agreements (PPAs).
ing railways, ports and countries into OBOR strategies 67 member nations policy Fostering cross-border benefit transfer (DBT) scheme Mint reported on 18 February
power grids across Asia, energy trade is an important for better targeting of subsidies about the Union government’s
Africa and Europe, and the part of Modi’s South Asia- and a new tariff policy, which plans to set up a new tribunal
withdrawal of the US from the Paris The global grid may also leverage the RFP added. focused neighbourhood-first pol- proposes a cost-reflective tariff, solely to enforce PPAs.
climate deal. the International Solar Alliance The ambitious task unveiled on icy. India has been supplying power penalty on unjustified power “PM emphasized the need
It also comes at a time of the cor- (ISA) co-founded by India that has 26 May has been taken up under to Bangladesh and Nepal and has cuts and limiting cross-subsi- to enhance consumer satisfac-
onavirus pandemic giving India the 67 countries as members. It has the technical assistance pro- been championing a South Asian dies. tion while increasing opera-
opportunity to be seen as taking a become India’s calling card on cli- gramme of the World Bank with Association for Regional Coopera- A cost reflective tariff struc- tional efficiency, and improv-
lead in evolving global strategies. mate change and is increasingly the last date of proposal submission tion electricity grid minus Pakistan ture is aimed at helping elec- ing financial sustainability of
“India’s Prime Minister recently being viewed as a foreign policy being 6 July. to meet electricity demand in the tricity distribution companies, the power sector,” the state-
called for connecting solar energy tool. Mint reported on 9 January region. or discoms, realize the actual ment added.
Regulators sharpen focus on Chinese FPIs RBI may allow relaxation for
FROM PAGE 1

investments has grown in the

lem with the number of kits that
are billed as well. Dr Prakash said
if there are 10 patients in an ICU
and there are four nurses in four
shifts, 16 PPEs are used in a day
to take care of 10 patients. So
each patient should be charged
for 1.6 PPEs per day. “If every
patient is charged for four PPEs
for four shifts, it is exorbitant. If
we find such abnormal instan-
ces, we won’t cover.”
Insurers paying for PPE kits
don’t seem to be picking the tabs
for non-covid patients. For
instance, New India Assurance,
Oriental Insurance, National
Insurance and United India
Insurance are covering the cost
of PPEs for covid patients if it is
under reasonable and custom-
ary charges, said Dr Suman
Tilak, chief medical officer, Par-
amount Health Services (TPA)
Pvt. Ltd. Only New India Assur-
ance has agreed to cover PPE
costs for non-covid patients, she
added.
aftermath of the coronavirus
pandemic and subsequent
border skirmishes.
Equity indices have been
falling sharply across econo-
mies as the world grapples
with the pandemic. This has
made many bellwether stocks
cheaper and affordable for
both domestic and foreign
investors. Last month, Hous-
ing Development Finance
Corp. Ltd said the People’s
Bank of China (PBOC) had
raised its stake in the Indian
lender to 1.01% from 0.8% in
the March quarter through
open market purchases,
prompting concerns about
foreign acquisitions of strate-
gically important Indian com-
panies in a depressed market.
Currently, there are only 16
registered FPIs from mainland
China but Hong Kong has 111
registered FPIs investing in
Indian markets.
Currently, there are only 16 registered FPIs from mainland China
but Hong Kong has 111 registered FPIs investing in Indian markets.
The US government on
Wednesday said it could no
longer certify Hong Kong’s
political autonomy from
China, a week after Beijing
declared its intention to pass a
national security law curtail-
ing the rights and freedoms of
Hong Kong citizens.
“If the (DEA) proposal is
accepted then FPIs from these
two locations would face
stricter know-your-client
(KYC) requirements, not just
at the time of registration but
also on a continuous basis—
they would need to comply
with higher reporting stan-
dards,” said the first person
cited above. Once approved,
this would be applicable for
firms that have 10% of their
funds coming from either
China or Hong Kong as the end
beneficiary but the rules are
yet to be finalized,” this person
said.
“New FPIs coming from
either China or Hong Kong
would require prior Sebi
approval after proper vetting.
The specific modalities are
being worked out by the DEA,”
said the second person.
The government has
already restricted foreign
direct investment (FDI) from
countries that share a border
with India, including China,
but also Hong Kong. Since the
22 April notification under
Foreign Exchange Manage-
ment Act (FEMA), any FDI
coming from these countries
needs prior approval from the
government. While the FDI
route has been restricted, the
FPI route is still open.
To be sure, FPI ‘control’ of
Indian companies is already
restricted as a single FPI can-
not hold more than 10% of the
paid-up capital of a listed com-
pany.
MSME loans, scrap risk weight
FROM PAGE 1
to rescue the struggling sector
that employs millions of Indi-
ans, follows the government
agreeing to fully guarantee
these loans in case of default.
According to the official cited
above, who spoke on condi-
tion of anonymity, the uncon-
ditional government guaran-
tee gives enough comfort to
RBI to remove the risk weight
on these loans, leaving banks
with more capital to lend.
Queries sent to an RBI
spokesperson remained unan-
swered.
The central bank assigns
risk weights to every type of
loan, depending on the likeli-
hood of its default. The risk
weight on a government bond
is zero, while it could be as
much as 100% for lending to a
real estate developer. The
bank accordingly adjusts the
asset value as per the risk facilities up to 20% of the out-
weight. The riskier the asset, standing credit limit up to ₹25
the higher the risk weight and crore as on 29 February. For
the lower its value. A lower risk instance, if a business has a
weight means the bank will loan outstanding of ₹1 crore, it
have to set aside less capital can borrow an additional ₹20
against these loans. lakh. Only existing borrowers
The RBI’s latest move aims with revenue of up to ₹100
to encourage crore and those
banks to provide RBI’s move aims to with up to 60 days
fresh credit to encourage banks past dues can
these borrowers to provide fresh avail of this
without the pres- credit without the scheme.
sure of setting The tenure of
pressure of setting
aside additional loan under this
capital against aside additional scheme will be
these loans. capital four years, with a
Loans under moratorium
this government period of one year
scheme will be guaranteed by on the principal amount. The
the National Credit Guarantee NCGTC will not charge any
Trust Co. Ltd (NCGTC) in the guarantee fee.
form of a Guaranteed Emer- The interest rate under the
gency Credit Line (GECL) scheme is 9.25% if the loan is
facility. The guarantee cover extended by banks and finan-
will be available for additional cial institutions, and 14% if
working capital and term loan given by NBFCs.

Google may buy stake in Voda Idea UAE’s Mubadala eyes India Set For Deepest Recession
FROM PAGE 1
$1 billion stake in Jio
5% stake sale could fetch the
company around $101.5 million.
The stock has lost more than
57% in the past 12 months. To be
sure, an eventual deal could
happen at a significant pre-
mium to the recent stock price.
Google’s interest in Voda-
fone Idea comes at a time of
financial stress on the Mumbai-
based company amid cheap
mobile tariffs and strong com-
petition that intensified with
the entry of Reliance Jio Info-
comm Ltd in September 2016.
An investment in Vodafone
Idea will pit the US internet
giant in a battle against the
Facebook-Jio combine for the
world’s fastest-growing mobile
market, according to the Finan-
cial Times, which first reported
the news earlier in the day.
Facebook last month
announced a $5.7 billion
investment in Vodafone Idea’s required to run it, and a part-
rival Jio Platforms, which nership with a telco can give
FROM PAGE 1 have some kind of bunching of
activity towards the end of the
employment and income
prospects can lead to a breed of
houses the digital assets of them immediate access to mil- will potentially allow faster financial year to meet their tar- cautious consumers,” said
FROM PAGE 1
Reliance Industries Ltd. lions of subscribers. ver Lake, Vista Equity Partners normalization of activity. Sec- gets. This lends an upward HDFC Bank in a report released
So far, telecom and internet Vodafone Idea owes the and General Atlantic. ond, a labour market recovery thrust to growth numbers. In in Thursday.
firms were independently try- Indian government ₹53,000 attracting a wide range of Jio Platforms combines all will be key to getting the econ- the Indian case, while the shut- “Without adequate fiscal
ing to woo the Indian data user crore in adjusted gross reve- world-class investors, given its of Reliance’s digital and tele- omy running again. Finally, the down was in the last week of support during a recession
base, but the Jio-Facebook nue dues. It posted losses of enormous potential to serve com initiatives, including Jio ability of all sectors of the econ- March, several restrictions had year, the damage to income
deal has paved ₹6,453 crore in one of the world’s largest mar- digital services, mobile and omy to restore their balance come in earlier, especially for that has already happened is
the way for larger An investment in the December ketplaces,” said Mubadala, broadband, apps, tech capabil- sheets following the adverse services that would have pushed going to start working through
possibilities. Voda Idea will pit quarter. Revenue according to Reuters, which ities such as artificial intelli- shock will be important. The back growth numbers further,” the multiplier, which means
While globally Google in a battle in the period rose first reported the news earlier gence, Big Data, and Internet longer the duration of the said Madan Sabnavis, chief the damage will get worse,”
Microsoft, along against Facebook- 2 . 2 6 % to on Thursday. of Things, and other invest- shock, the longer recovery,” it economist at Care Ratings. former chief statistician of
with Amazon ₹11,089.4 crore, On Thursday, Mint reported ments such as in Den Net- cautioned. HDFC Bank on Thursday India Pronab Sen said.
Jio for the fastest-
Web Services, thanks to 4G cus- that Microsoft Corp. is also works, Hathway Cable, and Growth projections by said stay-at-home guidelines “While there is no doubt
dominates the growing mobile tomer additions negotiating an investment of Datacom Ltd. economists for the March and the nationwide lockdown that India is facing a significant
on-demand cloud market and improve- as much as $2 billion in Jio The deals will take RIL quarter vary between 0.5% are likely to severely hit con- economic shock, the pace of
computing plat- ment in average Platforms. closer to its ambition of becom- and 3.6%. That compares with sumer demand, especially for recovery, if any, will be deter-
forms and appli- revenue per user. If the two transactions are ing free of its net debt of ₹1.53 the 4.7% growth registered in non-essential items, which mined by the economic policy
cation programming interface Ebitda, or earnings before completed, the world’s most trillion as at the end of Decem- the preceding December account for 47% of total con- choices taken to ensure that
business, it faces a three-way interest, taxes, depreciation valuable firm, Microsoft, and ber at the group level. The quarter. The March quarter sumption expenditure. the significant secondary
fight in India, including Goo- and amortization, increased Mubadala will get a slice of Jio company aims to become net- growth number will be keenly “While demand is likely to impacts (job losses, reduced
gle Cloud. All of these provid- marginally to ₹3,420.5 crore, Platforms, which has already debt free by March next year. watched as it includes one recover somewhat once the income levels, corporate
ers are rapidly trying to reach while Ebitda margin fell 47 attracted investments of $10 RIL’s debt has surged in the week of lockdown, which has lockdown is lifted, it is unlikely defaults, rising NPLs (non-per-
both the market of “new to basis points to 30.84%. Voda- billion in just a month from past few years, especially due to the potential to skew the to pick up to pre-covid levels as forming loans), rating down-
digital” businesses, legacy fone Idea has not announced marquee investors comprising the aggressive expansion of growth numbers. social distancing policies and grade, etc.,) can be contained,”
enterprises and the talent pool its March quarter earnings. Facebook Inc., KKR & Co., Sil- Reliance Jio Infocomm Ltd. “Several companies tend to uncertainty over future UBS said in a report.
 NEWS FRIDAY, 29 MAY 2020
NEW DELHI 11

LIC set to subscribe to RIL’s rights

mint

SHORT TAKES
Patanjali’s ₹250 cr NCD issue fully
subscribed within minutes
New Delhi: Baba Ramdev-led Patanjali Ayurveda’s ₹250 crore
issue, may invest ₹3,000 crore
debentures issue got fully subscribed within three minutes of
opening on Thursday. “This is historic that our maiden issue of
₹250 crore non-convertible debentures (NCD) is fully subscribed
within 3 minutes of opening of the issue. This shows the excite-
ment and faith of investors,” said Patanjali Ayurveda managing The life insurer plans to subscribe to more than 20 million or more shares of RIL in the rights issue
director Acharya Balkrishna. The Haridwar-based firm will use
this fund for working capital requirement and strengthening of
its supply chain network. “This is a reflection of trust of billions, Anirudh Laskar & The insurer, which is one of the
which has made Patanjali the most trusted brand of India and has Swaraj Singh Dhanjal largest domestic institutional
made Swadeshi Movement led by Swami Ramdev a must for MUMBAI investors, has often acted as the
strong and self-reliant India,” Balkrishna added. This is the first key indicator for many public
ever bond issue by Patanjali Ayurveda, which has become one of institutional investors in the

S
the leading companies in the FMCG segment. PTI Suryoday tate-run Life Insurance listed space. If LIC indeed invests
Small
Finance
Corp. of India (LIC), the in RIL’s rights issue, it may move
Bank raises largest institutional a number of other smaller domes-
UCO Bank slashes lending rate ₹62 crore investor in the Mukesh tic investors into putting in
from Gaja Ambani-run Reliance money in RIL’s ongoing mega
by 40 basis points to 6.9% Capital,
Industries Ltd (RIL), will invest share sale.
MINT Kotak Life,
others ₹2,500-3,000 crore in the com- The issue, which closes for sub-
bit.ly/2MiU18h
pany’s ongoing rights issue, said scription on 3 June, is the largest
two people directly aware of the such share sale the country has
life insurer’s plans. seen. The previous record was
RIL’s massive ₹53,125 crore held by Bharti Airtel Ltd and
rights issue opened for subscrip- Vodafone Idea Ltd, both of which
tion on 20 May. raised around ₹25,000 crore in
“LIC plans to subscribe to more 2019. Reliance has hired a banker
than 20 million or more shares of syndicate comprising 14 invest-
RIL in the rights issue. The pro- ment banks to manage the share
posal has been discussed inter- sale. These include including
nally and sent to LIC’s board for Morgan Stanley, Citi, Bank of
approval,” said one of the two At present, public shareholders have a 49.93% stake in RIL, of which LIC alone holds 6.01% or 3,71,805,415 shares. America and Axis Capital.
persons mentioned above, who Ahead of its rights issue, RIL’s
Kolkata: UCO Bank on Wednesday said it has reduced the did not wish to be named as the sidiary Jio Platforms Ltd, said this “LIC is likely to get the investor in RIL and it has bene- subsidiary Jio Platforms has
repo based lending rate by 40 basis points to 6.9%, reflect- internal decision was market- person. approval of its board for the rights fited thousands of policyholders already attracted investments
ing the cut announced by the Reserve Bank of India (RBI). sensitive. This is also going to be one of issue investment latest by Mon- so far. RIL is no longer just an oil- worth $10 billion in just a month
As a result, the retail and micro, small and medium enter- The insurer is con- and-gas company. It has from marquee investors includ-
prises (MSME) loans would get cheaper by 40 basis points, vinced that an invest- BETTING BIG shown tremendous ing Facebook Inc. and global pri-
the bank said. The bank did not mention any changes to the ment in RIL is likely to strength in the digital vate equity players such as KKR &
deposit rates. The government expects banks to reduce fetch an above-average LIC is convinced THE investment will LIC is likely to get the IF LIC invests in RIL’s payment and retail Co. Inc., Silver Lake, Vista Equity
lending rates, which is required to kick start the economy return for all public that an investment
in RIL is likely to
be one of the largest approval of its board
investments by the for the rights issue
rights issue, it may
attract other investors
space,” said the second Partners and General Atlantic.
hit hard by the coronavirus-forced lockdown, among other investors, including LIC, fetch an above- insurer in any firm’s investment latest by to put in money in RIL’s person, who also spoke These deals and the rights issue
factors. Since March 1, banks have sanctioned loans worth in the medium to long average return rights issue Monday share sale on condition of anonym- are aimed at helping RIL reach its
₹6 trillion. UCO Bank has sanctioned loans worth ₹15,000 term, as more than half a ity. ambitious goal of becoming a
crore, of which ₹12,000 crore has been disbursed. Over 1.36 dozen large global inves- At present, public zero net-debt company by March
lakh customers have been benefited, a senior official of the tors have recently shown strong the largest investments by the day. LIC has to keep the interest shareholders have a 49.93% stake 2021. The company had a net
bank had said recently. PTI confidence in RIL’s businesses, insurer in any company’s rights of policyholders as the foremost in RIL, of which LIC alone holds debt of ₹1.53 trillion as of 31
especially in its digital assets sub- issue so far. priority. It has been a long-term 6.01% or 3,71,805,415 shares. December.

Pradip Burman sells off Sanat

Products to Willmar Schwabe
New Delhi: Pradip Burman—part of fast-moving consumer
goods major Dabur India’s Burman family and grandson of the
company’s founder SK Burman—has sold off his over three-dec-
ade-old nutraceutical company Sanat Products to homeopathy
Govt seeks $520 mn from Cairn Oil No exit; have capital Passenger
major Willmar Schwabe India for an undisclosed amount. Bur-
man, 77, said he will now focus on building his non-for-profit PTI
for 3-4 yrs, says Oyo BLOOMBERG
abide by whatever award of the
vehicle sales
organization Mobius Foundation of which Burman is chairman.
“Ratna Commercial Enterprises, a closely held NBFC and invest-
ment company owned primarily by Pradip Burman and other
feedback@livemint.com
NEW DELHI
dispute resolution proceeding
comes out, sources said adding
the company will have to pay Tarush Bhalla employees on furlough.
to decline by
24-26% in
T
members of the Burman family, today announced that Dr. Will- he government has 30% of the $520 million tarush.bhalla@livemint.com A significant part of Oyo’s
mar Schwabe India (P) Ltd, a wholly owned subsidiary of Dr. Will- slapped a $520 million demand in case the arbitration BENGALURU capital allocation has gone
mar Schwabe GmbH, Germany, has acquired RCE’s entire stake, (around ₹3,941 crore) panel upholds the DGH into the Indian, European,
FY21: Crisil
H
amounting to 100%, in its nutraceutical company, Sanat Products demand notice on billionaire demand. ospitality unicorn Oyo and South-East Asian markets
Ltd,” the company said in a statement. SUNEERA TANDON Anil Agarwal’s oil and gas unit The arbitration notice sent Hotels and Homes and strategic investments
Cairn after an audit found by Cairn triggered disputed founder Ritesh Agar- have been made in the US and
alleged discrepancies in cost resolution proceedings under wal said the company has China, Agarwal said. Now, the Malyaban Ghosh
Jet Airways receives fresh EoIs recovery in the Rajasthan oil the Production Sharing Con- more than $1 billion in cash, company aims to invest heav- malyaban.g@livemint.com
and gas fields operated by the tract (PSC). A three-member which is enough to run its ily in the staycation and long-
from 11 investors ahead of deadline company, people familiar with arbitration panel, comprising business for at least three stay category.
NEW DELHI

Mumbai: Beleaguered airline Jet Airways has received expres- the matter said adding the firm
sions of interest (EoIs) from 11 investors, including UK-based has disputed the demand and
Kalrock Capital, Hyderabad-based Turbo Aviation, Alpha Air- initiated arbitration proceed-
ways, and Canadian citizen Siva Rasiah. The deadline for sub- ings.
mitting EoIs was reported to end on Thursday. This is the fourth The Directorate General of
attempt by the airline’s resolution professional to find a suitor Hydrocarbons (DGH), the
for reviving the ailing company. Previously, South American upstream technical arm of the
conglomerate Synergy Group and New Delhi-based Prudent ministry of petroleum and nat-
ARC were given time to submit a resolution plan, but failed to ural gas, sought $520 million
meet the deadline. Earlier this month, fresh expressions of in additional profit petroleum
interest for the airline were invited and the deadline for submis- for the government after an
sion was set for 28 May. GOPIKA GOPAKUMAR audit of capital and operating
expenses incurred on the
Mangala and other oilfields in
BSE to halt scheme to enhance the Rajasthan block
RJ-ON-90/1, people with
equities’ liquidity from 11 June direct knowledge of the devel-
MINT
opment said.
The audit alleged discrep-
ancies in the way capital
expenses made on setting up
the infrastructure to produce
oil were booked.
The law provides for opera-
tors recovering all the capital
and operating cost from reve-
New Delhi: Leading stock exchange BSE has said it will
discontinue liquidity enhancement scheme (LES) for
equity derivatives segment from June 11. The exchange had
Govt makes onshore management of offshore funds easier
introduced LES in equity derivative segment in August
2019. The scheme was provided on index futures and Jayshree P Upadhyay
options and 50 stock futures and options. “The exchange jayshree.pyasi@livemint.com
shall discontinue the LES...with effect from June 11, 2020,” MUMBAI
BSE said in a circular. Under the LES, brokers and other
An audit found alleged
discrepancies in cost recovery
in the Rajasthan oil and gas
fields operated by Cairn Oil.
nues earned from the sale of oil
and gas before sharing a fixed
percentage of profit with the
government. Booking a higher
expenditure curtails govern-
ment’s profit share.
Cairn Oil and Gas, a vertical
of Agarwal-controlled
Vedanta Ltd, earlier this
month sent an arbitration
notice, disputing the demand,
they said.
A company spokesperson
declined to comment.
Cairn is the operator of
Rajasthan block with 70%
interest while the balance is
held by state-owned Oil and
Natural Gas Corp (ONGC).
ONGC is not a part of the
arbitration but will have to
expected to open the flood-
gates and prompt more Indian
fund managers located outside
the country to return. How-
a nominee each of Cairn and
the government and a neutral
judge, will be set up to adjudi-
cate on the dispute.
Cairn and ONGC are already
in a dispute over payment of
royalty from the block. Cairn
had stopped paying for its
share of royalty on oil pro-
duced from its Rajasthan block
following differences with
partner ONGC on cost recov-
ery.
As much as $400 million of
royalty dues since July 2017
have not been paid to ONGC,
the people said.
ONGC is the licensee of the
Barmer block in Rajasthan,
home to India’s biggest onland
oil discovery to date, and is
responsible for payment of
royalty at the rate of 20% of the
oil price on the entire output
from the field irrespective of
its stake.
I
more years without raising The hospitality unicorn, ndia’s automobile industry
capital and clari- which banks is headed for another year of
fied that the com- The hospitality heavily on hotel double-digit sales decline
pany does not unicorn, which stays and vaca- this fiscal, given the extended
plan to exit any of has a footprint in tion homes, saw lockdowns and sharp fall in
its markets at 80 countries, has its revenue drop customer affordability in an
present, despite by more than economy forecast to contract
of late been
the collapse in 60% from March. due to the coronavirus out-
the hotel busi- cutting costs to However, the break.
ness globally fol- conserve cash company said it Overall sales volume are
lowing the coro- is seeing some expected to fall to multi-year
navirus outbreak. recovery in lows, with sales of passenger
“We have the necessary China and some European vehicles and commercial vehi-
capital runway beyond 3-4 countries, which have started cles reaching fiscal 2010 levels,
years, considering the cost reopening their economies Crisil Research said on Thurs-
restructuring and the mini- after flattening the curve of day.
mal revenue estimates that we transmissions. Sales of tractors and motor-
expect. We do not anticipate Oyo was registering occu- cycles would recover faster
raising any more capital,” pancy rates of 60-65% in than other segments due to
Agarwal said. China before the coronavirus their exposure to the rural
Oyo, which has a footprint outbreak. However, the figure markets where demand is
in 80 countries, has of late in the country, its second-big- expected to recover faster than
been cutting costs to conserve gest market after India, the urban markets, the
cash. Towards this end, the dipped to below 20% during research arm of rating agency
company cut thousands of the crisis and is now at about Crisil said in a note.
jobs, reduced salaries, and put 50%. Domestic passenger vehicle
sales are expected to fall
24-26% this fiscal year. Com-
mercial vehicle sales are also
expected to decline 26-28%
this year, it said.
Passenger vehicle sales in
India had fallen 18% last fiscal
with commercial vehicle sales
falling 29%.
Business, an equity fund by According to Hetal Gandhi,
Avendus Capital, and White director, Crisil Research, auto-
Oak Capital Management, a mobile sales are running out of
boutique firm from Mauritius. steam as the pandemic has

T
market intermediaries are given incentives for a specified he finance ministry on
period of time to bring in and generate investor interest in Wednesday amended
securities that have limited trading activity. the income tax rules
making it easier for offshore
funds to relocate fund man-
Monsoon rains to arrive on India’s agement to India.
Section 9A of the Income-
southern coast around 1 June Tax Act provides a special tax-
New Delhi: Monsoon rains are likely to enter India through the ation regime for offshore
southern coast around June 1, the state-run weather office said funds if their fund managers
on Thursday, marking the start of the four-month rainy season are located in India. This was
that is crucial for the country’s farm-dependent economy. done to ensure that more fund
Weather conditions are “very likely to become favourable from management is done in India
1 June, 2020” for the monsoon onset over the southern state of without adverse tax implica-
Kerala, the India Meteorological Department (IMD) said in a tions. The section was first
statement. The IMD had earlier forecast the arrival of monsoon introduced in April 2016. It
rains over Kerala on 5 June, four days later than usual. Nearly then said that only a fund man-
half of India’s farmland, without any irrigation cover, depends ager’s income or management
on annual June-September rains to grow crops such as rice, fee, and not the entire global
corn, cane, cotton and soybeans. The IMD said last month India income of the global fund, will
is likely to get average monsoon rains this year. REUTERS be subject to tax. This was
ever, there was lack of clarity
on how much the Indian fund
manager’s remuneration or
fee should be to be eligible for
section 9A relaxation, prompt-
ing the bulk of fund managers
not to opt for this route.
The Central Board of Direct
Taxes then floated draft norms
in December 2019 to clarify
the rules on remuneration or
management fee. The minis-
try said on 27 May that for a 9A
special dispensation foreign
portfolio investor (FPI) cate-
gory 1, which includes sover-
eign wealth funds and pension
funds, the amount of remuner-
ation or management fee paid
by the fund to the Indian fund
manager needs to be at least
“These thresholds further
refine the 9A rules and make
onshore management of for-
eign funds easier for local asset
managers like us. This avoids
any adverse tax implications
on the fund or FPI for the for-
eign assets being managed
from Mumbai. Now at least
The clarifications are expected to boost flows in India as fund there is clarity at what level of
managers will be closer to the deal ecosystem. MINT management fee can a Cat 2
offshore fund or any mandate
0.1% of the AUM. For category As of today there are asset from Cat 1 FPIs be managed
2 FPIs, typically hedge funds, managers whose plans to shift with an Indian fund manager
the fund management fees has fund management to India was under section 9A without any
to 0.3% of AUM or at least 50% in limbo because of this lack of risk of impacting the safe har-
of the total management fee. clarification. These include bour provisions that this very
These new clarifications are Eastspring India Fixed Income policy enables,” said a spokes-
expected to boost flows in and Balanced funds from person for ICICI. Avendus
India as fund managers will be Japan and Taiwan advised by could not comment immedi-
closer to the deal ecosystem. ICICI Prudential International ately.
severely impacted urban
income sentiments.
“We assessed 26,000 com-
panies that have a total
employee cost of ₹7 lakh crore.
It indicates that over 60% of
this cost resides in companies
that are expected to see a sharp
reduction in revenue growth,
and where employees are a
meaningful cost head. This is
expected to lead to higher risk
of job losses or pay cuts,”
added Gandhi.
Besides the drop in afforda-
bility of buyers, the rapid
spread of covid-19 in metros
and tier one cities will also
impact demand in the urban
markets where most of the
passenger vehicles are sold.
12 FRIDAY, 29 MAY 2020
NEW DELHI VIEWS

OUR VIEW MY VIEW | TECH WHISPERS

SANCHIT KHANNA/HT

The Great Decentralization

that coronavirus has heralded
We have already had intimations of this phenomenon in the migration of workers back to villages

and congregated in a few large cities.
Covid has reversed the equation, and
many of those trudging home are
swearing never to come back. What this
means for industry is profound. They
will have to spread themselves out, or
decentralize, so as to get the labour and
talent needed for their operations. They
might have to go to the people, as the
JASPREET BINDRA people might not come to them.
is the author of ‘The Tech Whisperer’, and Change the collar’s colour to white,
co-founder of Unqbe and you see the same phenomenon
playing out. Work has got decentral-
come to save the day under our Great
Lockdown. This is not necessarily true
in India, where haphazard regulations
and controls did not allow it to happen.
But globally, it was food-delivery and
e-commerce companies that kept cities
and homes running while every mall,
restaurant and departmental store was
closed in fear of contamination. Ama-
zon, for example, added 100,000
employees in the US, and has declared it
will add 50,000 in India now. The
decentralized gig economy of e-com-

Some of our taxpayers

ized. Work from home and anywhere merce, food-tech and freelance work
has suddenly become the corporate survived the disruption far better than
response to this disruption, one that the centralized “old economy”.

T
echnology experts and adminis- millions of employees, primarily in In the Indian context, the same could
trators have always known that knowledge companies like technology be said of retail, and how kirana or

need their money back decentralized systems, while

sometimes more unwieldy and expen-
sive to manage, are far more resilient
and resistant to disasters and disrup-
and services, have embraced. Our great
centralized offices are barren. What is
interesting is that large and small firms
(Google, Twitter, TCS, Udemy) have
mom-and-pop grocery stores came to
the rescue. Armed with basic but func-
tional technology like WhatsApp-or-
dering and UPI payments, they played
tions. Redundancy is an inbuilt feature declared that they will continue a large saviours, even as big malls and e-com-
in these systems—cloud operations, for element of work from home even after merce ground to a halt. This super-de-
Our crisis of urban unemployment has hit the formal sector, which has been shedding jobs, example, are always distributed across the current lockdowns are lifted. They centralized retail model has become the
multiple locations, rather than being have discovered hitherto unknown cynosure of all eyes, and is attracting
and now seems set to worsen. We need a tax credit scheme as a safety net for India’s better-off centered in one. advantages of this—cost reduction, a massive investment, as companies look
As the covid pandemic rages on, flat- productivity spike, and talent diversifi- upon technology to enhance their
tening and disrupting entire industries cation. The interview question, “Will decentralized infrastructure. The Face-
and societies in its wake, companies and you be willing to relocate to where we book-Jio deal is a case in point.

A
crisis of formal sector unem-
ployment in urban India seems
set to sharpen over the months
ahead. According to a tracker
run by the Centre for Monitoring
Indian Economy (CMIE) that
offers a daily average of the past 30 days’ num-
bers for trend analysis, the country saw overall
joblessness spike in cities after the lockdown
began. Since then, job deprivation has weighed
upon every fourth urban-dweller, by CMIE
data, and this high rate of joblessness seems to
have risen slightly over May. This month’s
stability, however, might be masking worse to
come. It is, after all, a rolling-average, designed
to smoothen volatility. Also, a recent surge of
provident fund (PF) withdrawals would point
to rising job losses among better-off Indians
working in the organized sector. Of the 2.84
million subscribers of India’s state-run PF
scheme who have withdrawn their funds so far
this fiscal year, only about half availed of the
Centre’s covid-relief scheme allowing job
holders to dip into their savings. The rest, we
can safely assume, needed to tide over lost
government ought to consider special meas- countries are scrambling to figure out a are?” suddenly looks passé`. This Great Decentralization that
ures to allay the pain. Granted that openly way forward. Not only is it about recov- The same is true of how the gig econ- covid has wrought will extend itself to
ering quickly from the onslaught, there omy, which is nothing but decentral- other sectors too. I can see how decen-
offering handouts to India’s better-off at a is a great deal of thinking on how and ized work taken to a logical extreme, has tralized models can help disparate and
time of mass distress among the poor may not what kind of organizational and opera- distraught sectors like hospitality, res-
be politically feasible. Those who earn above tional design can make them more resil- taurants, events, education, healthcare
₹5 lakh per annum, enough to be liable for ient. In this context, organizations will and even manufacturing. I will detail
income tax, have long had to make do without need to borrow a leaf out of the IT play- QUICK READ these one by one in my next few dis-
book, and make themselves more patches of Tech Whispers in Mint.
unemployment benefits. Socially, they were decentralized. Migrants returning to villages Taking a philosophical view, this was
expected to either rely on family support or We have already seen the beginning offer us the most tragic example a long time coming. In many ways, the
find new jobs. Under the circumstances that of this phenomenon in several ways. of the Great Decentralization pandemic and the ensuing lockdowns
prevail today, however, neither can fully be Perhaps the most tragic and in-our-face that’s underway. Work and have taken us back to the way human
counted upon. An uncontroversial way to example is the Great Migration. In resources will no longer be beings lived and worked earlier: spread
scenes reminiscent of the 1947 Parti- concentrated in a few large cities. out, peer-to-peer, local (and vocal). If
offer taxpayers who have been laid off a life- tion, millions of people, generally poor successful, the model could generate
line would be to offer them tax credits. This day-labourers, are walking Indian high- Organizations may need to more employment, make our cities
would serve as a badly-needed social security ways to get home. Our big cities had reach far and wide for labour more livable, and clean up the air. It is
net for formal-sector employees. attracted them from far-flung villages rather than expect employees ironic that it took a pandemic to make
The income tax department should give tax- with the economic opportunities they to show up. Decentralized us realize this, but that is how it has
offered. This was the Big Centralization, operations are the way ahead always happened in history, and how it
payers who have lost their jobs the entire sum as millions of people left their villages for almost every business now. will now happen again.
of taxes they paid in 2019-20, regardless of
their tax bracket, as a zero-interest loan to be
repaid in five annual instalments after they
regain employment, whenever that might be.
Such a scheme would not only be justifiable
from an equity perspective, since it was origi-
nally their money, it would also address the pet www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Chandigarh*, Pune* Saturday, May 29, 2010 Vol.4 No.127 Rs. 3.00
++20
20PAGES
PAGES LOUNGE
LOUNGE + 412 PAGES
12 PAGES
PAGES MARKETS
MARKETS WATCH

Tata Global Beverages

sources of income. The proportion of non- peeve of India’s taxpayers that they get soaked
Q&A:
CEO on building the brand >4
CORPORATE: Unitech net falls 43.64% in
FY10, sales rise marginally >11

covid withdrawals was far higher in May than by the State without much in return. The SENSEX 16,863.06 Æ 196.66
EXCLUSIVE PARTNER

NIFTY 5,066.55 Æ 63.45 DOLLAR Rs46.35 æ Re0.95

RAPID FIRE: E&Y’s Prashant Singhal on
impact of 3G licence fees on tariffs >10
EURO Rs57.08 æ Re0.85 GOLD Rs18,400 æ Rs170 OIL $75.32 Æ $2.31 When one door closes,
April. The PF scheme has about 60 million par- advantage of this over other giveaways is that FIRST EVER HARDENS STAND

ticipants, most of whom have not touched their the support provided would be proportionate
Saturday Reading
Awareness is the first challenge that the unique identity
programme, or Aadhaar, has encountered at the
grass-roots level. While it will encounter more challenges,
this is something the Unique Identification Authority of
India, which oversees Aadhaar, needs to address quickly
as it increases the scale and scope of its effort. >P3
StanChart Air
IDR issue
India excludes
two unions from talks
B Y P .R . S ANJAI
pr.sanjai@livemint.com
·························
tiations.
“We are not taking decisions
to pull them back next day. We
another opens; but we
often look so long and
PHOTO ESSAY MUMBAI
are firm in our stand and we

sailsthrough I
n an indication that it will have given all necessary pow-
stand by its Thursday deci- ers to Air India to handle the

retirement egg, but still, with our economy to the recipient’s former earnings. It would
sion to derecognize two labour
unions, National Aviation Co.
of India Ltd, or Nacil, which
operates Air India, will meet
all its labour unions on 1 June,
Institutional investors TEPID RESPONSE except the All India Air Engi-
bid for more than twice neers Association(AIAEA) and
Air Corporation Employees
situation,” said a senior official
at ministry of civil aviation on
condition of anonymity.
In an SMS response, Jadhav
said he would have to stick to
his decision.
However, AIAEA’s Raju said
his union members are also

so regretfully upon
the number of shares, THE NEWS Union (ACEU), said two senior standing firm. “We are now
The first ever IDR issue was

expected to shrink by about 5% this year and

while retail subscribe to

also be easy to implement, as losers of formal

On Russell Street in Kolkata, the charm of the city’s old- executives at the airline. Air holding emergency general
world auction houses is slowly giving way to the brutal oversubscribed twice, but retail India has a total of 13 unions, body (meetings) across the re-
reality of their endangered existence. Yet, not all is lost.
less than half the IDRs investors' response was muted. including AIAEA and ACEU, gions,” he said.
There is hope in a steadfast breed of connoisseurs. >P6-7 THE BACKGROUND which have been derecog- In the midst of the stand-off,
B Y N . S UNDARESHA Volatile markets over the past nized. though, there was relief for fli-
S UBRAMANIAN & couple of weeks, tax issues and The executives said Air India ers as the airline resumed nor-
A NIRUDH L ASKAR novelty of the instrument have put chairman and managing direc- mal schedule of operations
························· off small investors. tor Arvind Jadhav is firm in his across the entire network with
MUMBAI
decision to crack down against total passenger bookings on

T
the layoffs this could result in, we should jobs can be identified by a halt in their PF con-
he first-ever issue of In- THE IMPLICATION striking employees. the domestic flights crossing

the closed door that

LEADING THE NEWS
Shares of healthcare com-
panies Fortis and Apollo
dian depository receipts
(IDRs) went down to the
wire, with a late rush by insti-
tutional investors to bid for the
receipts helping Standard
COLUMNS Chartered Plc see the issue
The silly season through despite a lukewarm
of May was
? response from retail investors.
The listing price of IDR will depend
on the prevailing market conditions
two weeks from now and may not
be completely linked to its
issue price.
sue, thus making it unattrac-
The airline will also likely
stick to its decision of dismiss-
ing 58 executives and suspend-
ing another 26, all of who went
on a flash strike on 26 May, re-
sulting in the cancellation of
138 flights and revenue loss of
at least Rs10 crore.
32,000.
“The daily average passen-
ger carriage for May 2010
stands at 29,070, up from an
average of 24,350 in May
2009,” Air India said in a state-
ment.
But the deteriorating indus-

expect millions of more PF applicants. tributions and taxes deducted at source. The
moved in opposite direc- unusual this year, Institutional investors bid tive for them to enter the bid- AIAEA general secretary Y.V. trial relations will only slow
tions after the announce- not just in terms for more than twice the num- ding game early and locking in Raju on Thursday had served a down the turnaround exercise
ment of annual and quar- of temperature, ber of shares on offer while re- their funds for a few extra days. fresh notice to Air India, saying underway at the ailing flag car-

we do not see the one

terly results. Fortis shares what with a tail investors subscribed to less Retail investors stayed away 700 union members would rier, said civil aviation experts.
fell 1.6% while those of surfeit of an- than half the IDRs reserved for despite the fact that the IDRs strike work starting 12 June to Air India currently has out-
Apollo rose 0.32%. >P3 nouncements, them. offered them a rare opportuni- demand withdrawal of the standing debt of Rs16,000
*** says R. Sukumar. >P5 The late arrival of institu- ty to diversify their portfolio by derecognition order as well as crore and is running a monthly
Glenmark Pharmaceuticals, *** tional investors was anticipat- owning a British bank that reinstatement of the sacked cash deficit of Rs400 crore.
driven mainly by robust Manas Chakravarty looks at ed since the Indian stock mar- does most of its business in employees. Experts are also divided on

As the name suggests, a provident fund is fiscal cost of this exercise is unlikely to be high,
growth in sales in India
and the US markets, moved
from being a loss-making
company a year earlier and
posted profits in the last
a study that says about half
of China’s current account
surplus and the US current
account deficit can be ex-
plained by the unbalanced
ket regulator had mandated
earlier this month that institu-
tional investors have to make
upfront payments for their en-
tire bid amount in a public is-
emerging markets. ACEU’s general secretary
“The retail participation was J.B. Kadian had served another
low mainly because it was a notice nearly two weeks ago
for industrial action starting 31
TURN TO BACK PAGE ® May, demanding wage renego-
Jadhav’s unprecedented
moves as he must salvage an
airline that had cumulative
TURN TO BACK PAGE ®

which has opened for us.

quarter of 2009-10. >P3 Chinese sex ratio. >P10
LEISURE
INDICATOR Based on
R-Power gets INTERNAL THREAT

meant for a financial emergency. For many, it and since a mechanism already exists for tax
Q4 CORPORATE RESULTS AGGREGATE
AS OF 28 MAY NET SALES the Gulf
2,710 Rs8,31,488.11cr

26.03%
War-era
video game,
Prince of
433MW from 73 dead as Maoists sabotage
AGGREGATE
R-Infra for
tracks, train derails in WB
NET PROFIT Persia: The
Rs84,060.34cr Sands of Time has some
0 4,170
TOTAL COMPANIES 4,170
13.87%
whiplash camerawork and
dumb-fun appeal. Rs1,095 crore INDRANIL BHOUMIK/MINT
B Y R OMITA D ATTA

is not sufficient to serve its primary purpose of refunds and delayed payments, cash transfers
B Y A VEEK D ATTA & romita.d@livemint.com
B HUMA S HRIVASTAVA ·························
························· JHARGRAM, WEST BENGAL

QUICK EDIT KOLKATA/MUMBAI

T he Reliance-Anil Dhirub- M aoist insurgents were

blamed for a train acci-

Early warning failure hai Ambani Group (R-

Adag) has consolidated its en-
tire power generation business
dent in West Bengal that killed
73 people and injured at least
250. The death toll is expected

F
A L E X A N D E R G R A HA M B E L L
riday’s attack by Maoists of Bengal are especially under one roof. to rise.

seeing a person past superannuation. In the can be made swiftly, too. It’s the least the Cen-
on a train, forcing its
derailment, and collision with
a goods train was the ninth
attack by the Reds this year
and the fourth on trains in
the past 10 days.
Account for the Rajdhani
Express incident where one
vulnerable.
Having failed to prevent the
attack—all the signs pointed
that a big one was coming—
the government’s response
has been to say no trains will
run during the night in areas
infested with Maoists. That
Reliance Infrastructure Ltd
(R-Infra) has transferred
433MW of gas-based power
generation assets to group
company Reliance Power Ltd
(R-Power) for Rs1,095 crore.
At one stroke, this deal
makes R-Power a company
The engine and 13 coaches
of the Mumbai-bound How-
rah-Kurla Jnaneswari Express
jumped tracks and hit a goods
train coming from the opposite
direction at around 1.30am on
Friday.
Chief minister Buddhadeb
Fatal run: Rescue workers and police gather at the scene of the Mumbai-

current instance, it was a State action—

of India’s most prestigious kind of disruption is just with an operating income and Bhattacharjee said Maoist

tre can do. People deprived of tax-paying levels

trains was hijacked by Maoists
earlier this year and the fact
that most attacks against
trains have been in West
Bengal’s West Midnapore
district, and two conclusions
emerge: one, that Maoists
like to target trains; two, that
what the insurgents would
have wanted.
The government can
continue to debate the best
way to tackle Maoists, but
its best-laid plans will go
nowhere if it is not able
to prevent attacks it can
positions R-Infra as a focused
utilities firm. R-Infra holds
45% equity stake in R-Power
and is its largest shareholder.
Post Friday’s announce-
ment, R-Power—at 35,000MW,
has the largest development
portfolio in the power sector,
rebels were behind the acci-
dent, which took place in the
Jhargram area of West Bengal’s
West Midnapore district, a
stronghold of the insurgents.
Some 100 clips that fasten
railway tracks with concrete
sleepers were found missing at
bound Howrah-Kurla Jnaneswari Express train crash in West Bengal.
The accident took place a West Midnapore’s district
few kilometres from the Sardi- magistrate N.S. Nigam said.
ya station, where the Maoists Many among the 250 people
had in October laid siege to a hurt were battling life-threat-
Bhubaneswar-New Delhi Rajd- ening injuries in hospitals in
hani Express for some eight Kolkata and Kharagpur, the

namely, the lockdown—that has led to corpo- of income may not need outright doles, but
trains plying through this part see coming. but wasn’t producing a single the accident site. The Maoists hours to enforce a strike. district headquarters.
had removed them, the state The death toll in Friday’s ac-
Mint is also available for Rs5.50 with Hindustan Times under a combo offer TURN TO BACK PAGE ® government said. cident could approach 100, TURN TO BACK PAGE ®

rate retrenchments. This being the case, the they do need money to fall back on.

THEIR VIEW

China is likely to harm itself with its bullying tactics

China’s neighbours and around the world.
BRAHMA CHELLANEY Had Xi been wise, China would have
sought to repair the pandemic-inflicted
damage to its image by showing empathy
and compassion, such as by granting debt
relief to near-bankrupt Belt and Road Initia-
While the world grapples with covid-19, Whereas Japan readily allowed the Inter- to the potential threats stemming from
the Chinese military has provoked border national Atomic Energy Agency to conduct China’s grip on many global supply chains,
flare-ups with India and attempted to police a full investigation into the 2011 Fukushima and moves are already afoot to loosen that
the waters off the Japanese-controlled Sen- nuclear disaster—a probe that helped the control.
kaku Islands. China has also recently estab- country to improve safety governance— In the past, China’s reliance on persuasion
lished two new administrative districts in China strongly opposed any coronavirus secured its admission to international insti-

is professor of strategic studies
at the New Delhi-based Centre
for Policy Research
T
he global backlash against China over
its culpability for the international
spread of the deadly coronavirus from
Wuhan has gained momentum in recent
weeks. And China itself has added fuel to the
fire, as exemplified by its recent legal crack-
down on Hong Kong. From implicitly seek-
ing a political quid pro quo for supplying
other countries with protective medical
gear, to rejecting calls for an independent
international inquiry into the virus’s origins
until a majority of countries backed such a
probe, the bullying tactics of President Xi
Jinping’s government have damaged and
isolated China’s communist regime.
The backlash could take the form of West-
ern sanctions as President Xi’s regime seeks
to overturn Hong Kong’s “one country, two
systems” framework with its proposed new
national-security laws for the territory,
which has been wracked by widespread pro-
democracy protests for well over a year now.
More broadly,the Chinese president’s over-
reach is inviting increasing hostility among
tive partner countries and providing medi-
cal aid to poorer countries without seeking
their support for its handling of the out-
break. Instead, China has acted in ways that
undermine its long-term interests.
Whether through its aggressive “Wolf
Warrior” diplomacy—named after two Chi-
nese films in which special-operations for-
ces rout US-led mercenaries—or military-
backed expansionist moves in China’s
neighbourhood, Xi’s regime has caused
international alarm. In fact, Xi, a self-styled
indispensable leader, views the current
global crisis as an opportunity to tighten his
grip on power and advance his neo-imperi-
alist agenda, recently telling a Chinese uni-
versity audience that, “The great steps in his-
tory were all taken after major disasters.”
After buying up much of the world’s avail-
able supply of protective medical equipment
in January, it has engaged in price-gouging
and apparent profiteering. And Chinese
exports of substandard or defective medical
gear have added to the international anger.
the South China Sea, and stepped up its inquiry, as if it had something to hide. In fact, tutions and helped to power its economic
incursions and other activities in the area. In some Chinese commentators denounced rise. But under Xi, spreading disinformation,
early April, for example, a Chinese coast calls for an inquiry as “racist”. exercising economic leverage, flexing mili-
guard ship rammed and sank a Vietnamese But once a resolution calling for an tary muscle, and running targeted influence
fishing boat, prompting the United States to “impartial, independent and comprehensive operations have become China’s favourite
caution China to “stop exploiting the [pan- evaluation” of the global response to cov- tools for getting its way. Diplomacy serves as
demic-related] distraction or vulnerability id-19 gained the support of more than 100 an adjunct of the Chinese Communist
of other states to expand countries in the World Party’s propaganda apparatus.
its unlawful claims in the Health Organization, Xi Xi’s approach is alienating other coun-
South China Sea.” QUICK READ sought to save face by tries, in the process jeopardizing their appe-
Meanwhile, China has [saying] that “China sup- tite for Chinese-made goods, scaring away
made good on its threat Its brazen defiance of global ports the idea of a com- investors, and accentuating China’s image
of economic reprisals opinion on the need for a prehensive review”. problem. China currently faces the most
against Australia for initi- coronavirus probe, crackdown Make no mistake: The daunting international environment since it
ating the idea of an inter- in Hong Kong and aggression world will not be the began opening up in the late 1970s, and now
national coronavirus with other countries are fast same after this wartime- it risks suffering lasting damage to its image
inquiry. Through trade alienating the rest of the world. like crisis. Future histori- and interests. A pandemic that originated in
actions, the Chinese gov- ans will regard the pan- China will likely end up weakening the
ernment has effectively The pandemic will lead to a demic as a turning point country’s global position and hamstringing
cut off imports of Austra- reshaping of global politics and that helped to reshape its future growth. In this sense, the hollow-
lian barley and blocked supply chains, weakening China’s global politics and ing out of Hong Kong’s autonomy in the
more than one-third of image and growth. Its actions restructure production shadow of covid-19 could prove to be the
Australia’s regular beef could yet be the last straw that networks. The crisis has proverbial straw that breaks the Chinese
exports to China. breaks the Chinese camel’s back. made the world wake up camel’s back. ©2020/PROJECT SYNDICATE
 VIEWS FRIDAY, 29 MAY 2020
NEW DELHI 13

THEIR VIEW M I N T C U R AT O R

The question of whether India’s

economic stimulus is adequate
Supply-side measures could be just as effective in boosting consumer demand as direct fiscal expenditure might have been

MINT Martin Scorsese’s film will star Leonardo DiCaprio and Robert De Niro. REUTERS

Apple secures a deal for Scorsese’s next movie

A pple Inc has secured a deal for Hollywood veteran Martin Scorsese’s next film,
Killers Of The Flower Moon, US media reported on Wednesday, citing sources.
Killers of the Flower Moon will star Leonardo DiCaprio and Robert De Niro. It is the
second major film that Apple has acquired after Greyhound, starring Tom Hanks,
last year. The film will be labeled an Apple Original Film, and ViacomCBS Inc’s Par-
amount Pictures will distribute it theatrically worldwide, according to reports from
INDIRA RAJARAMAN the Wall Street Journal and Deadline. Apple beat rivals such as Netflix Inc that were
is an economist also interested to produce the film, the WSJ reported... Killers Of The Flower Moon
is an adaptation of the non-fiction book of the same name, by David Grann. The
book is based on an FBI investigation into the killings of Native American Osages
during the 1920s.
Reuters

SpaceX launch could have been catastrophic

T
he Union government has been
accused of excessive fiscal conserva-
tism by critics who see the fiscal stimu-
lus as not boosting consumer demand
sufficiently. That charge has to be
assessed separately from the slow
response to the desperate exodus of migrant
workers from urban India. If the Shramik trains
had been started two months earlier, during the
first lockdown, disease transmission would have
been more effectively contained. Today, there are
estimates that one in four Shramik passengers is
testing covid positive (I hope they are wrong). Two
months ago, it would have been close to zero. If
only the process had begun in March.
The fiscal conservatism charge arises because
out of the ₹20.97 trillion aggregated across the
Garib Kalyan package on 26 March and the five
daily tranches announced over 13-17 May, the
direct fiscal expenditure adds up to ₹2.14 trillion (a
low estimate; it might be a touch more). I am stay-
ing with absolutes for now, because the gross
domestic product (GDP) denominator will have to
be settled (more on that below).
The Garib Kalyan package carried the highest
“fiscal content”, with two avenues of cash transfer
and one in kind. There was ₹1,500 over three
months to 204 million women holding Jan Dhan
bank accounts; and an upfront transfer of ₹1,000 to
30 million recipients of old age, widow and disabil-
ity pensions. There was also a front-loading (not an
additionality) of the first instalment (₹2,000) due
to 87 million farmers under the PM Kisan Yojana.
The last, in particular, played a key role in ensuring
completion of the rabi harvest followed by buoyant
kharif sowing, both of which will help stem the fall
in GDP growth this year.
In kind, there was the free matching additional-
ity to foodgrain entitlements under the public dis-
tribution system (PDS), with a small supplement of
free pulses, benefiting 800 million individuals,
also for three months; and the free cooking gas
under the Ujwala scheme, benefiting 83 million
households.
Garib Kalyan also raised the daily wage under
the Mahatma Gandhi National Rural Employment
Guarantee Act (MNREGA) to a little over ₹200 per
day, with a potential reach to roughly 136 million
job-card holding households. The corresponding
enhancement of the budgetary provision for
MNREGA by ₹40,000 crore was announced in the
fifth tranche on 17 May. These transfer provisions
were non-trivial in depth and coverage.
There was, however, a clear rural tilt to the
Garib Kalyan provisions. Although there are
urban Jan Dhan and social security beneficiaries,
and roughly 178 million PDS recipients in the
urban sector, many poor urban households get
excluded for not satisfying documentary require-
N ASA has revealed that the SpaceX launch ‘could have triggered lightning’ if
it went ahead last night. The space giants were forced to cancel the historic
launch to the International Space Station due to poor weather conditions around
the Kennedy Space Centre in Florida. Now, Jim Bridenstine, NASA administrator,
has revealed that the launch could have been catastrophic had it gone ahead. He
said: “I know there’s a lot of disappointment today. The weather got us. There was
a concern that if we did launch, it could actually trigger lightning. We made the
right decision.” While the initial launch countdown went according to plan last
night, launch officials warned SpaceX Launch Director Mike Taylor that the
weather just wasn’t good enough for launch to go ahead.
Daily Mirror, UK
Of human bondage and the sex work recession
T he bondage chairs and polished metal whipping tools sit gathering dust on a
quiet street near London’s trendy Shoreditch neighbourhood—and Madame
Caramel is not pleased. The coronavirus lockdown has punished the London domi-
natrix, whose Hoxton Dungeon Suite has stood silent for weeks. “In regards to the
dungeon, completely stopped, zero percent, no income whatsoever, and in regards
to Madame Caramel as a professional dominatrix it is exactly the same,” said the
ments. In any case, the free grain would not have a better way for an immediate supply-side impact. red-haired self-proclaimed “femme domme”. “The one-to-one... is gone, just the
helped pay the rent falling due at the end of Remember that we are clinging desperately to the online stays,” she told AFP. In Europe’s red-light capital Amsterdam, sex work is
March. Many single migrants would in the nor- supply resilience of agriculture to reduce the nega- due to officially resume in September. Prostitution in the Netherlands is legal and
mal course have returned home by bus or train at tive impact of the lockdown on GDP this year. In regulated, which allows for more support and structure during the coronavirus
this time of the year. All of them, families and sin- the whole commendable effort of Garib Kalyan to lockdown. But many sex workers... are now moving online to make ends meet.
gle, were given no alternative but to begin a long shore up farmer incomes and enable rabi-harvest- AFP
walk home. The later waves of the exodus taking ing and kharif-sowing, there was a lamentable lack
place now are of better skilled labourers, who of attention to the marketing problem. The focus
were able to tide over March rent, but could not was on grain procurement, with no thought to pro- Meet the bomb-maker who turned peacemaker
hold out much longer. ducers of vegetables and other perishables. It was
Back to the adequacy of the fis-
cal stimulus. It is wrong to imag-
ine that direct fiscal expenditure
only state governments that
could have arranged for the
trucking of those vegetables to
I am an expert bomb maker. I can make bombs in just five minutes.” Ali Fauzi was
a key member of Jemaah Islamiyah, a militant group with links to al-Qaeda, which
was responsible for Indonesia’s worst attack—the 2002 Bali bombing that killed
QUICK READ
is better at boosting consumer consumption centres and man- more than 200 people. “My brothers carried out the Bali bombing. It was huge
demand than supply-side restora- One cannot argue that the fiscal aged the elaborate links in that bomb in the heart of the island’s tourist district.” The group went on to carry out
tion through credit flows of ₹3 stimulus won’t boost demand process. a string of bombings in Indonesia... The seemingly sleepy village of Tenggulun in
trillion, collateral-free and guar- because not enough direct An earmarked transfer to Lamongan, East Java was the group’s base camp. Now Ali Fauzi’s mission is very
anteed, for medium, small and expenditure was announced. states just to enable marketing different. He works to help former jihadis leave a life of violence and to stop new
micro enterprises, which carry no Supply-side measures can also operations for perishable crops recruits from joining the next wave of militant groups in South East Asia.
immediate fiscal outlay, but could do that job effectively. would have prevented the BBC
later on. Both types of stimulus present unfolding disaster, of
generate incomes from which From a budgetary point of farmers dumping their crops,
consumer demand will flow. view, the combined deficit of the even as high prices reign in Is China’s anthem sacrosanct in Hong Kong too?
The second criticism has Centre and states could add up urban vegetable markets.
been the absence of adequate
fiscal assistance to states. Here
again, states have been dealt a
to 10% of GDP. Anything more Finally, on the GDP denomi-
than that may not be advisable at nator for converting the fiscal
this juncture. stimulus to a percentage figure.
T hree pro-democracy lawmakers were ejected from Hong Kong’s legislative
chamber Thursday morning, disrupting the second day of debate on a conten-
tious bill that would criminalise insulting or abusing the Chinese national anthem.
somewhat better hand than We continue to use ₹2 trillion as This comes as China’s National People’s Congress (NPC) has approved a controver-
alleged. State disaster relief funding has been a marker of 1% of GDP, which optimistically sial national security law for Hong Kong, bypassing Hong Kong’s internal legisla-
front-loaded, and tax devolution payments have assumes inflation will raise nominal GDP in ture to punish acts seen as endangering national security and subverting state
been generously paid as per budget estimates of 2020-21 to rough equivalence with that last year. power in the semi-autonomous Chinese territory. The NPC is a largely ceremonial
revenue (which will, of course, be adjusted down By this measure, the additional borrowing inten- body in the one-party state... The president of Hong Kong’s legislature, Andrew
to actual receipts before the year closes). States tion declared by the Union government, to reach a Leung, suspended the meeting of the council minutes after it began and ejected
have also been allowed to borrow an additional total of ₹12 trillion, would raise the fiscal deficit to Eddie Chu for holding up a sarcastic sign about a pro-Beijing lawmaker that read
two percentage points of gross state domestic 6% of GDP. With state government borrowings “Best Chairperson, Starry Lee”.
product, with conditions. added, it could add up to 10%. More than that may The Sydney Morning Herald
These conditions could have been configured in not be advisable at this juncture.

MY VIEW | PEN DRIVE

The millennial’s guide to corona lockdown survival

ticular. We grew up during the tech boom,
PRERANA DESHPANDE a time when the world was a far cry from the
one we live in today. Despite the tech boom,
the 1990s were a motley mix of the simplic-
ity of a bygone era and the promise of the
fast-paced excitement of a new millennium.
launching innovative startups, acquiring a income losses. At an individual level, it is pied will provide the mind the right fodder
foreign education, a burning desire for pro- crucial to focus on mental health. Counsel- during free time but without the stress.
ductivity, and so on, can all be traced back to ling is your best friend. The Centre has set Back to basics: Savour running your
that itch. And yet, today, as a life-altering up helplines for people suffering from covid errands. Parted from our house helps, we’re
pandemic has thrust unexpectedly upon us anxiety. Many private counsellors are also now forced to tackle the cooking, cleaning,
the mantle of shaping history, all that we offering their services free of charge. laundry and other tasks ourselves. These are

E
veryone wants to live in an exciting,
epoch-making era—until they do. His-
toric times, after all, are hardly as
adventurous and exciting to experience as
a perusal of history might later suggest. The
pursuit of adventure—that fickle enchant-
ress—is what drives and sustains life. I recall
countless instances growing up and even
later while at university, of sitting sedately
is a Mumbai-based around with friends with nothing to worry
journalist about aside from an upcoming test, and
someone observing wistfully that the times
we lived in were too “ordinary”, or normal.
That 2020 foresight, pun fully intended,
sure was elusive. Fast-forward to the
present day, where we’re over two months
into the Great Lockdown, waking up to a
spiking covid death count every morning,
desperate for life to get back to the mundane
old normal.
The funny feeling of wanting our times to
be more consequential or remarkable must
be familiar to many of us, millennials in par-
Economic liberalization and a hitherto
unwitnessed rate of growth of technology
meant that disposable incomes had
increased, snazzy import goods had become
available at kirana stores, consumption was
growing, job creation had accelerated, and
life had got prosperous. We played outdoor
games and the prototype MS-DOS-based
computer games in equal measure. Modest
Marie biscuits co-existed with the more ele-
gant Danish cookies in our snack boxes.
Traditional TV shows like Bharat Ek Khoj
and Malgudi Days were essential viewing,
but our loyalties began to splinter as cable
TV introduced us to the new glamour of
Seinfeld and Friends. Growing up in an aus-
tere time with just enough exposure to tech-
nology and the finer things in life left a gen-
eration with an unmistakable keeda (itch)
for adventure.
Millennial aspirations were shaped in a
defining way by a liberalizing and globaliz-
ing world. Ambitions of globetrotting,
know and aspire to has turned upside down. Solitary reaper: Isolation has forced us to basic survival skills that are never too out-
There are sudden fears associated with be in our own company. But few are used to dated to acquire. Aside from being hum-
travel. Increased protectionism is quelling it, much less while feeling at peace. Take the bling, the chores can also be the source of a
hankerings for imported possessions. And time to understand the delicate distinction quiet joy that comes from the dependability
the idée fixe of productivity is now at odds between loneliness and solitude. You can be of a routine, especially at an uncertain time.
with the need to avoid workplaces for social in solitude but not necessarily feel lonely. Stayin’ alive: Life in times of a pandemic
distancing and the Appreciating your own really boils down to survival; that’s the
drudgery of work-from- company and being com- golden word. So make your Instagram-
home routines to boot. QUICK READ fortable in your own trending Dalgona coffee and your banana
So then, how do we step space are indispensable bread and make your apocalypse 2020
up and prove worthy of As a life-altering pandemic has tools for self-growth. memes. Whatever it takes to survive and get
the mantle? thrust unexpectedly upon us Busy is a blessing: Pick by, right? But you can do more. No matter
Here’s a list of five the mantle of shaping history, all up that hobby you’ve had how aatmanirbhar one is, we can’t survive
fundamental but micro- that we know and aspire to has on your bucket list for in silos. We need each other to rebuild the
changes that will be key, turned upside down. But how ages, but not for the sake post-pandemic world. This transcends bor-
a list of corona com- do we prove worthy of it? of being productive. ders and religions and politics. Extraordi-
mandments, if you will. Humanity is going nary times bring out the best in some people
Mental health mat- Make your Instagram-trending through a collective and the worst in others. Let’s prove capable
ters: The United Nations Dalgona coffee and put out your trauma, and being pro- of leaving behind any divisiveness and
warned of an impending apocalypse memes. But, for all ductive cannot be the top being consciously more humane: herein lies
mental health crisis our self-reliance, we can’t survive focus right now. Pursu- our true adventure. This will determine
amid isolation, surging in silos. Re-imagining the world ing a hobby just to how well we wear that mantle of shaping
domestic violence and is the true adventure we await. unwind and stay occu- history. Hindsight is definitely 20/20.
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 130 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR)

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DON’T MISS
SC orders free travel, food for TWITTERVERSE

migrant workers going home

Donald J. Trump
@realDonaldTrump
Pharma cos not to Big Tech is doing every-
profiteer off virus State to provide food and water at stations or bus stands, Indian Railways responsible for other needs thing in their power to
Global pharma firms CENSOR in advance the
have pledged to supply 2020 Election. If that
covid-19 vaccines when Japnam Bindra issued notice to the Centre and all happens, we no longer
available on a no-profit have our freedom. I will
japnam.bindra@livemint.com states and Union territories.
basis. See Page 7
NEW DELHI Solicitor general Tushar Mehta, never let it happen!
who represented the Centre, told

No benefits for
discoms with dues
Discoms that have dues
with PFC or REC cannot
tap into the ₹90,000
crore package the FM
announced. See Page 5
Auto dealers sit
on huge inventory
Many auto dealers face
uncertainty in repaying
loans as they have huge
unsold inventory of BS-
VI vehicles . See Page 7
Asset quality of
banks to worsen
Fitch Ratings has stated
that Indian banks face
asset quality
deterioration for at least
two years. See Page 7
T
he Supreme Court on
CBI court to Thursday provided
record
much-needed relief to
statements
of Babri migrant workers by
mosque directing state govern-
demolition ments to provide free transport
accused
and adequate food to those who
from 4 June
seek to go to their home states.
bit.ly/36KmWv
The directive by the apex court
i
bench comprising Justices Ashok
Bhushan, Sanjay Kishan Kaul and
M.R. Shah came in a suo motu
action related to the miseries faced
by India’s informal workforce hit
by the lockdown put in place to
check the spread of coronavirus
and the subsequent job losses.
The originating state will be
responsible for providing food and
water at stations and bus stands,
while Indian Railways must be
held responsible for their require-
ments during the journey, said the
top court.
States must also oversee the
registration process of migrant
workers and ensure that they
board the train or bus at the earli-
est, the Supreme Court said. It also
directed the governments to pub-
licize complete information for all
concerned. “We further direct that
the state shall simplify and speed
up the process of registration of
migrant workers and also provide
help desk for registration at the
the court that 3,700 Shramik Spe-
cial trains had transported 9.1 mil-
lion migrants to their home states
between 1 May and 27 May. As
many as 185,000 migrants were
being ferried on 187 trains every
day by the Railways, he said.
Migrant workers were not being
asked to bear the cost of the ticket Bill Gates
as the Railway fares were being @BillGates
borne by either the receiving state I continue to be inspired
or originating state, Mehta said. by all of the volunteers
The top court also heard the (including many retired
submissions by counsels repre- health care workers and
senting Bihar, Rajasthan, Maha- teachers) on the front
rashtra, Madhya Pradesh, and lines of the fight against
Uttar Pradesh governments. The coronavirus each day.
The top court directed that the receiving state shall provide transport, health screening and other facilities. HT counsel for Bihar submitted that
the state has reimbursed the fare
places where they are stranded,” with food and all necessary facili- The bench directed all the states to migrants who had paid for their
the court said. ties. and Union territories to file a tickets. Uttar Pradesh’s counsel
The top court also directed that The court clarified that railway detailed report with details said the state has taken several
the receiving state shall provide fares have to be borne by the states regarding the number of migrants, steps to encourage quarantine of
transport, health plans for trans- migrants by paying them Rs1,000
screening and TO-DO LIST portation and reg- in cash, besides providing food.
other facilities istration, besides However, senior advocate Kapil
free of charge SC directed that STATES shall oversee MIGRANT workers other related Sibal, who represented two NGOs Joe Biden
once the migrant railway fares have to registration of
be borne by the workers and ensure
found walking home
must immediately be
details concern- who wanted to be impleaded in @JoeBiden
workers reach states and Union ing migrant work- the petition, told the court that the
they board trains or taken to shelters and
their native pla- territories buses at the earliest given the necessities ers, by 5 June government has not provided for Presidents are sup-
ces. when the case the minimum standard of living posed to lead by exam-
The apex court comes up for under Section 12 of the Disaster ple—and every day
also said that those who were and Union territories, and the hearing next. Management Act, because of Donald Trump proves
how incapable he is of
walking along highways to reach Railways must make arrange- On Tuesday, the apex court which people staying in the relief
their villages should immediately ments as soon as a state places its bench took suo motu cognizance camps are not getting quality food doing that.
be taken to shelters and provided request for trains. of the miseries of the workers and and other items.

India ignores Trump Returnee migrants, their skill mapping could rewire state politics
offer to mediate, says Gyan Varma & Anuja
NEW DELHI
government know what kind
of work these migrants were
to give us information on their inputs will be recorded.
requirements of skilled and Non-Bharatiya Janata Party
involved in, in different states. unskilled workers. We have (BJP) ruled states, too, are
is in talks with China T he surge in the number
of returning migrants
amid the covid-19 crisis
This data will help us estimate
the number of migrant labou-
rers,” said a cabinet minister in
received requests for 500,000 looking to tap similar skill
skilled workers from different mapping initiatives. “We have
industries in the state. The a control room where we are
has forced state governments the Bihar government. process is continuing and the taking down details of all
Elizabeth Roche to create local job opportuni- Bihar has completed skill state government is confident migrant labourers who are
elizabeth.r@livemint.com ties and a social safety net mapping of at least 500,000 that it would be able to provide getting in touch with us. The
NEW DELHI around India’s low-skilled migrant labourers who had jobs to migrant idea is to note
floating workforce. returned to the state. If the workers,” said a The first big test down what their

I
ndia on Thursday said it was With over 6.5 million daily- state government manages to cabinet minister, of the strategy of skill set is, so that
“engaged” with China in wage workers returning to alleviate the sufferings of its requesting ano- states to provide t h e y c a n b e
efforts to resolve a tense their villages amid an uncer- daily-wage workers in time, it nymity. Uttar Pra- jobs to migrants employed gain-
border standoff—a short mes- tain future, the politically sig- could make significant gains in desh has prom-
would be the next fully in the future.
sage that ignored a mediation nificant population may well the assembly elections five ised to provide We are getting a
offer by US president Donald expect some respite as states months hence. jobs to 2 million elections in Bihar diverse range of
Trump. launch several initiatives to The exercise to collect data on India’s unorganized workforce will Likewise, Uttar Pradesh, migrants. in five months occupational
Asked to comment on map their numbers, bridge the also give states a handle on how to address unemployment. AP too, has set up a migration On Wednes- inputs even from
Trump’s offer, foreign minis- skill gap and help them earn a commission and a panel to day, Madhya Pra- labourers from
try spokesman Anurag Srivas- livelihood. ized workforce and skill map- migration of these labourers address the welfare of migrant desh chief minister Shivraj other states, such as Jhark-
tava did not directly refer to India and China are looking for So far, Uttar Pradesh has ping could be a first-of-its- started two months ago, we labourers. According to the Singh Chauhan held a review hand, for handicrafts, indus-
Trump but said: “We are a bilateral solution. REUTERS received 2.5 million migrants, kind initiative, which may had no estimate to know how initial data, the worst affected meeting of the ‘Shram Siddhi trial and construction, as well
engaged with the Chinese side Bihar recorded 2 million finally help state governments many people had left the state were real estate workers, car- Abhiyan’, which is aimed at as agricultural labourers who
to peacefully resolve this ease and has demanded a returnees, while Madhya Pra- to get a handle on how they and how many could possibly penters, painters, electricians providing employment to work in sugarcane fields of
issue”—an indication that transparent investigation into desh and Jharkhand expect 1.3 can address employment return. The idea of creating a and artisans, besides handi- unskilled labourers. The state Uttar Pradesh,” a senior offi-
India would sort out the prob- how covid-19 became a pan- million and 1 million workers, issues in a fragmented labour nodal agency to collect infor- craftspeople. “So far, we have will form a skill register of cial from the labour depart-
lem bilaterally with China. demic. respectively. market. mation on migrant labourers some good result of our work. migrant labourers at the pan- ment of Jharkhand said, also
“The two sides have estab- Ironically, the US offer came The massive exercise to col- “This is an important data will not only help us create The Uttar Pradesh govern- chayat level, wherein informa- requesting anonymity.
lished mechanisms both at on a day when China indicated lect data on India’s unorgan- set for us because when the jobs but also help the state ment had asked all industries tion on their skills and related gyan.v@livemint.com
military and diplomatic levels a dialling down of tensions fol-
to resolve situations which lowing a military build-up by
may arise in border areas Indian and Chinese armies
peacefully through dialogue along their borders in Sikkim
and continue to remain and Ladakh after physical
engaged through these chan- fights with exchange of blows.
nels,” he said when asked Despite the seeming softening
about the ten- of Beijing’s
Delhi govt defends 70% ‘corona fee’, tells high court liquor a privilege
sions with China. India has stepped stance, two peo-
Trump said in a up efforts to find ple familiar with Prathma Sharma The pleas are likely to be heard number of vends operational crore in May 2019.
Twitter post on a diplomatic the development prathma.s@livemint.com on Friday. last year were about 800 and, A batch of petitions were
Wednesday, “We solution to the said Indian and NEW DELHI The affidavit also cited simi- as of now, only 40% of them filed before the Delhi high
have informed Chinese troops lar actions by 10 other states, were operational due to vari- court challenging the state
ongoing border

L
both India and were holding iquor trade and con- including Assam, Meghalaya, ous restrictions government’s
China that the dispute with their positions sumption is not a funda- Karnataka, Andhra Pradesh, imposed by the The government decision to levy a
United States is China with no changes. mental right, but a privi- Telangana, Uttar Pradesh, government in argued that the “corona fee” on
ready, willing and On the ten- lege and the state has the Haryana, Rajasthan, Tamil view of the coro- lockdown shrank the ground that it
able to mediate or sions with China, authority to regulate its trade, Nadu and West Bengal. navirus out- revenues of the was arbitrary, as
arbitrate their now raging bor- Srivastava said that talks the Aam Aadmi Party (AAP) It further argued that owing break,” it said. the maximum
state by nearly
der dispute. Thank you!” between military officers at government told the Delhi to the clampdown on all eco- The govern- retail price
The post seen as surprising various levels had not yielded high court on Thursday. nomic activities to contain the ment said the 90% in April from included taxes,
even by Trump’s standards, any results thus far and that In response to a batch of covid-19 outbreak, the state total excise reve- that of last year duties and levies.
since US-China relations are diplomatic efforts were under petitions challenging its 4 May government’s revenue, which nue collected by Another plea had
fraught due to tensions over way to find a solution. notification to levy a ”special primarily comprises value- Delhi cited similar actions taken by 10 other states in court. PTI the state during 4 alleged that the
trade and finger pointing over Meanwhile, Trump said in a corona fee’’ on liquor, the added tax (VAT) and goods and May to 25 May was around Delhi Excise Act does not
the handling of the covid-19 Twitter post on Thursday, “All Delhi government in its affida- services tax (GST) collection, compared to about ₹4,000 tional liquor vends has been ₹227.44 crore, which includes empower the state to levy any
pandemic. over the World the CoronaVi- vit added that it was free to state excise and stamp duty, crore in April 2019. ₹187 crore, which is way too ₹127 crore in special corona fee or charges except as pro-
The US has accused China rus, a very bad “gift” from accord or regulate liquor pri- had shrunk by almost 90% in “Between 4 May and 25 less as compared to the sales fee. In comparison, it had col- vided under section 26 of the
of hiding facts about the dis- China, marches on. Not good!“ ces as per the state excise law. April, to a mere ₹300 crore, May, the total sale of opera- figure of May 2019, as the lected a revenue of ₹425.24 Act.
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