NEW DELHI, MuMBAI, BENGALuRu, kOLkATA, CHENNAI, AHMEDABAD, HyDERABAD, CHANDIGARH*, puNE* VOL. 17 NO.

34

Thursday, February 9, 2023

livemint.com

mint primer QUICK EDIT

Will Microsoft Modi’s

Bing outplay
Google’s Bard?
BY LESLIE D’MONTE & PRASID BANERJEE
Jolted by the phenomenal success of ChatGPT, Google launched
Bard, its AI-powered chatbot. Microsoft countered two days later with
its AI-powered Bing search engine and Edge browser. Will Google
succumb to, or prevail over, the onslaught of OpenAI and Microsoft?
Is this a battle for AI
1 supremacy?
Twitter was abuzz on Wednesday
over AI radically transforming
chatting, searching, and surfing.
Futurist and author of Rise of the
Robots, Martin Ford, tweeted: “A
Tech Race Begins as Microsoft
Adds #AI to Its Search Engine”.
OpenAI’s ChatGPT is based on a
transformer model called GPT-3.5
but Google pioneered transformer
models. Google’s Bard, yet to be
integrated with Google Search, is
powered by its Language Model for
Dialogue Applications, which a
former Google engineer said had
become sentient. Bing countered
with a ChatGPT-like search version
and an AI-powered Edge browser.
The AI war has just begun.
Will this change search
2 engines, browsers?
So far, search engines have
displayed an array of results best
suited to answer a user’s query.
With the inclusion of a chat
interface, users may simply ask a
question instead of scouting
through scores of links. The use of
such AI could also change how
search engine optimization (SEO)
works for websites, since they will
now seek to provide the ‘best’
answer to a query instead of simply
appearing at the top of Search
results. For browsers, the AI could
become value adds, where they
will display additional or related
information, or even summarize a
document you’re viewing
automatically.
message
Prime Minister Narendra
Modi’s Motion of Thanks to the
President’s address in the Lok
Sabha stood out for reasons
beyond his oratory. On
Wednesday, he wore a sky-blue
jacket made from recycled PET
bottles, presented to him by
Indian Oil Corp. at the India
Energy Week in Bengaluru ear-
lier this week. The idea was to
popularize the concept, and the
company is reportedly recy-
cling over 100 million PET bot-
tles to make garments for its
employees and Indian armed
forces. Since plastic bottles are
made of a polymer which yields
a synthetic fibre that blends well
with cotton to give us wearable
poly-fabrics, turning used con-
tainers into clothes is an ideal
way to deal with the mountains
of PET waste we all generate,
threatening streams, rivers and
lakes with micro-pollutants.
Modi acting as the idea’s market
ambassador, could stir curiosity
and get trials. The jump that
khadi clothes got after Modi’s
promotion of them testifies to
his influence. PET recycling is
not very cheap, so mass adop-
tion of recycled polyester would
be too much to expect. But it’s a
good sign that environmental
causes have begun to outweigh
cost concerns for many con-
sumers.
MINT METRIC
by Bibek Debroy

When he got acquainted

3 Can we access the new
Bard and Bing?
Google’s Bard is currently open only to
With fellow examinees, he fainted.
“trusted users”, while anyone can access
There were five hundred girls
Bing.com to sample queries or join the In pony-tails and curls.
waitlist. You can use Microsoft’s Edge
browser’s “compose” and “chat” features
As the only boy, he felt tainted.
too. Microsoft plans to soon introduce it
on mobiles too. It has a waitlist to access
the full version of the new Bing. For now,
you can only access preset queries. QUOTE OF THE DAY
..the expected higher rabi output has
Will this lift digital ad What are the
4 revenue for Microsoft?
Google leads search engine,
5 challenges?
Experts say ‘smart’ platforms like
improved the prospects of agriculture &
rural demand. The sustained rebound in
browser, and digital ad markets. ChatGPT can give ‘incorrect’ and contact-intensive sectors should support
Microsoft recorded $18 billion ‘nonsensical’ answers, causing
revenue from digital advertising in more misinformation. Microsoft urban consumption. Broad-based credit
CY22 as opposed to Google’s says it has built in classifiers to its growth, improving capacity utilization,
$168.44 billion net revenue in the AI to avoid biases when using Bing
same period. Chrome has about for search, but there’s a need for AI
govt’s thrust on capital spending &
65% of the browser market while governance policies. Further, infrastructure should bolster
Edge has a mere 4.5%, according to there could be questions about investment activity
Statcounter. Google tops the search how publishers will be paid for
engine market with a whopping Microsoft or Google using the
89% share as opposed to Bing’s same content. Search engines
4.55%. But Microsoft feels its need to ensure that they continue
changed Bing and Edge will help it driving traffic to websites, instead SHAKTIKANTA DAS
“innovate at a greater pace because of simply capturing the user Governor, Reserve Bank
of the smaller market share”. within their own walled gardens. of India

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 PLAIN FACTS

Is India’s gender budget

promise only on paper?
BY NITI KIRAN

G ender budgeting, a strategy to ensure that promises on gender equality show up in public budget allocations as well,
was first adopted by India in 2005-06. A host of other countries have also adopted such initiatives. But in India and
elsewhere, achieving gender equality has stayed a major challenge. In the Indian context, the budgetary allocations
to schemes benefiting women have grown nearly 13% at an annualized rate since inception, but its share in the overall govern-
ment spends has stayed almost at 5%. Various studies have drawn parallels between gender equality and improved economic
efficiency. Can India get its act together? Mint explores:

Key budget announcements

A ONE-TIME new small savings scheme, Mahila CENTRE TO enable women's self-help groups in rural
Samman Savings Certificate, to be made India to reach "the next stage of economic empower-
available for a two-year period up to March ment" under the Deendayal Antyodaya Yojana-National
2025. This will offer deposit facility up to 2 lakh Rural Livelihood Mission, by setting up large producer
for women or girls for two years at fixed 7.5% enterprises or collectives "with each having several
interest rate with partial withdrawal option. thousand members and managed professionally".

Mind the gap The fine print

While successive governments may promise gender Close to three-fifths of the total gender budget has been allocated
sensitivity, the budget allotted on this front has stayed to schemes partially benefiting women in 2023-24. This dominance
uniform when seen as a share of total spending. has stayed since inception. Moreover, the top five schemes featuring
in the gender budget are not entirely women-focused (Part B), and
Share (%) of gender budget in total expenditure
account for more than half of the allocations under the provision.
6
5.0 Share (%) in the total gender budget Part A Part B
5 100

4
80
3
26 basis points
This is the decline in the share 60
2
of gender budget in the overall
1
estimated expenditure of the
government for 2023-24 40

0
2005-06 2023-24 20
All figures are revised estimates as actuals are not available for
several years. 2023-24 figures are budget estimates.
Source: Budget documents 0
2005-06 2023-24
What is gender budget? All figures are revised estimates as actuals are not available for
several years. 2023-24 figures are budget estimates. Source: Budget documents
Gender budget, as the women and child development
ministry describes it, is a "powerful tool for achieving
gender mainstreaming" to ensure that benefits of
development reach women as much as men. The
41 The number of ministries, departments and Union territories
that made allocations for gender budget in 2022-23
ministry says the allocation of resources has the
Share (%) of top five schemes (in terms of allocations)
potential to transform gender inequalities. in total gender budget for each year
What is the allocation for 2023-24? 2019-20 49.8
₹2.23 trillion 2020-21 58.9
up 2.2% since the revised estimates for 2022-23.
Which schemes fall under the gender budget? 2021-22 57.6
Part A schemes: those with 100% allocation for women, e.g. 61.9
2022-23
 Pradhan Mantri Awas Yojana (Urban)
 Rural Housing (Pradhan Mantri Awas Yojana) Share (%) of top schemes in gender budget, 2023-24
 Indira Gandhi National Widow Pension Scheme
Part B schemes: those where at least 30% allocations
are for women, e.g. Rural Housing (Pradhan
24.4
 Mahatma Gandhi National Mantri Awaas Yojana)
Rural Employment
Guarantee Scheme 11.2 Pradhan Mantri Awas
35.3 Yojana (Urban)
 Flexible Pool for RCH and Other
Health System schemes 11.2 MGNREGS
Strengthening, National
Health Programme and
Saksham Anganwadi and
National Urban Health
6.7 Poshan 2.0
Mission 5 6.2
 Pradhan Mantri Poshan Flexible Pool for RCH and
Shakti Nirman Health System Strengthening
(PM-POSHAN) Samagra Shiksha

A global challenge
Achieving gender equality
remains a significant
challenge globally. The
average level of gender
budgeting practices in G20
countries is low.
Score on gender budgeting
index, G20 countries
High Medium Low

The index is based on a score of 0 to 3, which

is derived from 23 parameters.
Source: IMF Working paper: Gender Budgeting in
G20 Countries, November 2021

Many schemes that benefit

Matching steps women to a large extent or have
Complementing the central goverment's initiative, most gender implications have not
states and Union territories have adopted gender budgeting been receiving very high
initiatives. A handful of them are yet to follow suit. budgetary priorities in the overall
Implementation of distribution. But it's important to
gender budgeting by note that there are entire sectors
states and UTs or ministries that do not report in
Early adopters this statement even though their schemes have
Subsequent adopters gender implications or benefit women.
Recent adopters SHRUTI AMBAST, senior policy analyst,
Centre for Budget and Governance Accountability
Not adopted
Conceptually, the way the
gender budget defines itself has
loopholes and this 30% part (Part
B) is even more questionable. It
becomes a bit arbitrary. This
needs to have a relook. The
concept should not only connect
with the allocations but also how
the same budget, or any other economic policy,
Early adopters: between 2004 impacts men and women differently.
and 2007); subsequent adopters:
between April 2007 and March Source: Lok Sabha reply JYOTSNA JHA, director, Centre for Budget and Policy Studies
2011; recent adopters: since 2011. (March 2021), Mint research
PARAS JAIN/MINT

PEANUTS by Charles M. Schulz

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 NEw DElHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 17 NO. 34 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 10.50 (FOR DELHI & NCR) 16 PAGES

Thursday, February 9, 2023

Ola Electric takes off, against Death toll tops 11,700 in

livemint.com the odds uP10 Turkey-Syria quake uP9

SENSEX 60,663.79 377.75 NIFTY 17,871.70 150.20 DOLLAR ₹82.49 ₹0.21 EURO ₹88.73 ₹0.15 OIL $83.83 $0.38 GOLD ₹57,335 ₹93

RBI hikes repo rate to 6.5%, DON’T MISS

says core inflation a worry

Reserve Bank slows pace of rate hikes to a quarter-percentage point as inflation moderates
Flipkart gets interim HC relief
Gopika Gopakumar over ₹1,100 crore tax demand
gopika.g@livemint.com kEEPING A ClOSE wATCH Das: Banks Walmart-backed Flipkart on Wednesday won
MUMBAI interim relief over a tax demand of more than
RBI governor Shaktikanta Das said inflation may remain above 4%, the
are prudent; Blackstone has hired investment bank JP Morgan to sell 40% of ₹1,100 crore for assessment years 2016-17 and 2018-

T
mid-point of the central bank’s 2-6% target range, in the next fiscal.
he Reserve Bank of India its total 44% stake in the travel and hospitality software provider. 19. The Karnataka HC granted protection to the
slowed the pace of inter- 7.3 Retail inflation rate (in %)
lend against online retailer from ‘coercive measures’ until the

Blackstone looks
7.0 next hearing on 24 February. >P3
est rate hikes to a quarter- 6.3
percentage point as infla-
tion moderated, while
6.1
5.7
5.4 5.4 5.6 fundamentals
5.1 5.0 5 Shayan Ghosh Modi hits out at oppn for ‘wild
keeping the option of rate hikes
open amid stubborn core inflation.
With the latest hike, RBI’s mon-
shayan.g@livemint.com
MUMBAI
to sell $1 bn stake allegations’, mum on Adani
The blessings of India’s 1.4 billion people who
etary policy committee (MPC)
in IBS Software
experienced basic services for the first time under

I
raised the repo rate to 6.5%, the ndian banks follow pru- this government is an armour that baseless charges
highest since 2018, as it attempts to dent lending practices, by the opposition can’t pierce, PM Narendra Modi
cool inflation closer to its target. basing their decision on said in Parliament, responding to a political storm
The committee kept the policy borrowers’ financial health, Ranjani Raghavan Spokespeople for JP Mor- over allegations of fraud levelled at Adani Group. >P8
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
stance of “withdrawal of accom- FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY21 FY24 FY24 and have significantly raised ranjani.raghavan@livemint.com gan and Blackstone declined
modation” unchanged. The deci- Source: MoSPI, RBI RBI projections their loan evaluation stan- MUMBAI to comment. Representatives
sion was not unanimous, with four dards, Reserve Bank gover- for IBS Software did not Sheela Foam looks to buy

out of the six members of the MPC
voting in favour of the rate hike.
Ashima Goyal and Jayanth Varma
voted against an increase.
Governor Shaktikanta Das on
Wednesday said inflation is likely
to remain above 4%, the mid-point
of the central bank’s 2-6% target
range, in the next fiscal with risks
from geopolitical tensions, global
financial market volatility, rising
non-oil commodity prices and vol-
atile crude prices.
“The rate hikes since May 2022
are still working their way through
the system. On balance, MPC was of
the view that further calibrated
monetary policy action is warranted
GOVERNOR SPEAK
THE rate hikes since May FuRTHER calibrated
are still working their monetary policy action
way through the system is warranted
to keep inflation expectations
anchored, break the persistence of
core inflation and thereby
strengthen medium-term growth
prospects,” Das said, adding that the
stickiness of core or underlying
inflation is a matter of concern.
With inflation seen at 5.6% in the
fourth quarter of the next fiscal,
adjusted for inflation, the policy
rate still trails pre-pandemic levels,
Das added.
MPC expects CPI
inflation to average
5.3% next fiscal year
SARVESH KUMAR SHARMA/MINT
While retail inflation has
dropped below RBI’s 6% upper tar-
get, core inflation, which excludes
volatile components of the index
such as food and fuel, has remained
stubbornly high for over a year.
With the monetary policy stance
remaining unchanged, ICRA chief
economist Aditi Nayar expects the
monetary policy panel to reserve
TURN TO PAGE 6
B
nor Shaktikanta Das said on
Wednesday in response to a
question regarding lenders’
exposure to the embattled
Adani Group.
“In RBI, we have made
our own assessments... The
large exposure guidelines
prescribed by RBI are fully
complied with by all banks,”
Das said.
According to Das, the
strength, size and resilience of
the Indian banking system are
strong enough to be not
TURN TO PAGE 6
lackstone Inc. is in talks
with multiple private
equity funds to sell a sig-
nificant minority stake in IBS
Software after its plans for a
foreign listing failed to materi-
alize, two people familiar with
the development said.
The private equity giant has
hired investment bank JP
Morgan to sell at least 40% of
its total 44% stake in the travel
and hospitality software pro-
vider for about $1 billion, the
people cited above said on
condition of anonymity, add-
ing the process is still in the
early stages.
respond to a request for com-
ment till press time.
Blackstone acquired a
minority stake in IBS Software
for approximately $170 million
in 2015 from General Atlantic
and other shareholders.
The founders are not inter-
ested in selling their stake, the
people cited above added.
IBS Software provides solu-
tions to airlines, hospitality
and logistics businesses.
The company had made a
confidential filing for a US list-
ing in 2022, seeking a valua-
TURN TO PAGE 6
furniture rental Furlenco
Sheela Foam Ltd is in advanced talks to
acquire furniture rental startup Furlenco,
said three people with knowledge of the
development, as the maker of the Sleepwell
brand of mattresses looks to expand into
newer business categories. >P6
Airtel bets on enhanced 5G
network to grow revenue
Bharti Airtel plans to deploy a multipronged
approach for future business growth, managing
director and chief executive Gopal Vittal said.
This will include improving the network
experience in 150 cities while taking 5G services
to 300 cities by March 2024 from 70 now. >P5

REUTERS

France’s Total puts green hydrogen IT cos to axe 2,500 new hires
tie-up with Adani Group on hold who flunked screening tests
Bloomberg and Ram Sahgal Devina Sengupta & Shouvik Das
ram.sahgal@livemint.com
Trial by fire
MUMBAI/NEW DELHI
Screening tests for freshers are seemingly getting tougher, as IT services
MUMBAI
firms slowed their hiring pace after two years of pandemic-led growth.

I
ndian software service pro-

F
rench energy giant TotalE- viders may let go of around 1,00,000
FY22 FY23
nergies SE put a multi-bil- 2,500 recent recruits for fail- 80,000
lion dollar plan to produce ing screening tests mere
60,000
green hydrogen with Adani months after they were
India is Indonesia’s largest palm oil buyer, and experts fear that a Group on hold, pending audits of onboarded, even as some 40,000
long-term curb could drive up prices in India. the Indian conglomerate industry experts claimed the 20,000
accused of fraud by a US investor. downsizing resulted from com-

Indonesian curbs The hydrogen partnership

announced by the two groups
last year “hasn’t been signed,
The French oil and gas company has invested $3.1 bn in stakes of
panies taking on more people
than they needed during the
pandemic.
0

Note: FY23 figures based on company targets;

hiring numbers for campus recruits only Source: Company

on palm oil stokes

and won’t be signed for the Adani assets such as Adani Total Gas and Adani Green Energy. AFP “We expect around 2,500-plus
moment,” TotalEnergies chief freshers to be removed from SATISH KUMAR/MINT

executive Patrick Pouyanne French company conducted to ₹10.41 trillion. these companies due to poor per- ongoing client projects. Das repeatedly, even after train-
said at an earnings presentation due diligence before and after On 24 January, the US-based formance, post-training,” said estimated that about 2% of ing,” Wipro said in response to

inflation concerns near Paris on Wednesday.

Ravi Dutta Mishra domestic supply. There are
ravi.dutt@livemint.com contradictory signals. So, there
NEW DELHI is little clarity. The market has
tightened because of this
“We’ll wait for the results of the
audits.”
The French oil and gas com-
pany has invested $3.1 billion in
stakes of Adani assets such as
Adani Total Gas Ltd and Adani
investing in the Adani compa-
nies, he said.
Shares of Adani Green and
Adani Total Gas are still up by a
factor of two and eight, respec-
tively, since Total invested in
them, the CEO said.
short-seller released a report
alleging fraud and manipula-
tion against Adani group com-
panies, which caused the
group’s market cap to shed
almost half its value through
Monday. The Adani group, has
Anshuman Das, chief executive
and co-founder of Careernet, a
talent solutions provider. The hit
is larger this year as the number
of campus hires has been lower
than in the past two years of the
covid-19 pandemic.
around 200,000 recruits from
engineering colleges in FY23
might not clear these tests.
Typically, freshers who fail to
clear these screening tests are
around 1% of the total hires.
Media reports said Infosys
Mint’s queries.
Wipro said its evaluation
process includes “assessments
to align employees with the
business objectives” of the firm
and its clients. “This systematic
and comprehensive perform-

I
nternational palm oil prices
turned volatile a day after
Indonesia, the world’s largest
exporter of the commodity, said
it will suspend some export per-
mits to cool cooking oil prices
ahead of next month’s Ramzan.
Indonesia currently allows
palm oil manufacturers to
export six times what they have
sold at home under a policy
called domestic market obliga-
tion (DMO). Exporters will be
allowed to use those rights only
after the situation has calmed,
Reuters reported, citing Indo-
nesia’s senior cabinet minister
Luhut Pandjaitan. Around a
third of the total exports quota
could be used now, while the
rest could be used after 1 May,
another official said.
report. There is a fear that if
Indonesia again restricts
exports, prices in India could
rise. The commodity market
would stabilize only when we
have clarity,” Mehta added.
“We need to wait for official
announcement to give any
comments,” the commerce
ministry said in response to
Mint’s query.
Every year, India imports
about eight million tonnes of
palm oil, accounting for nearly
40% of its overall edible oil con-
sumption basket. Palm oil and
M
its derivatives are used to man-
ufacture soaps, shampoos, bis-
cuits, and noodles, and supply
disruptions promise to have a
wide-ranging impact.
Palm oil prices in the inter-
Green Energy Ltd, which rep-
resent 2.4% of TotalEnergies’
capital employed last year.
“These companies have
assets and revenue” and are
“healthy,” Pouyanne said. The
Microsoft unveils Bing search engine using OpenAI tech
Bloomberg
feedback@livemint.com
icrosoft Corp. showed
off plans to use new
tools from startup
OpenAI to improve its little-used
internet search and browsing
services, seeking to gain ground
Meanwhile, the combined
market capitalization of listed
Adani companies rose for the
second straight day.
The market value of 10 listed
Adani firms rose by ₹48,516 crore
however, denied the allega-
tions.
Although the market cap
has risen in the last two day, it
TURN TO PAGE 6
time” innovation was restored to
internet search, he said.
The new Bing, which runs on an
OpenAI language model that is
more advanced than the one
behind ChatGPT, can be switched
in and out of chat mode, and users
can tap the bot to compose emails.
The new Edge browser adds the
The screening tests typically
take place within a year of a
campus recruit joining an IT
firm and are done to assess
whether the new hires will
match the requirements of
Google strikes back in AI battle
AFP
feedback@livemint.com
PARIS
may let go of 600 employees
who failed screening tests.
Wipro, too, let go of a few
hundred. “We had to let go of
452 freshers after they per-
formed poorly in assessments
essays, speeches and even
exam papers in seconds.
Microsoft has announced a
multibillion-dollar partner-
ance evaluation process trig-
gers a series of actions such as
mentoring and retraining and,
in some cases, separation of
TURN TO PAGE 6
Analysts have suggested
Google has rushed its
announcement under pres-
sure from Microsoft, but

The move assumes signifi-
cance as India is the largest
palm oil buyer from Indonesia
and depends heavily on its
imports. Experts fear that a
long-term curb could drive up
prices in India.
“This report has sparked a lot
of uncertainty,” said B.V.
Mehta, executive director of
the Solvent Extractors’ Associ-
ation of India (SEA). “ It’s
unclear if Indonesia wants to
restrict exports or improve
national market doubled from
$1,000 to $2,000 when Indo-
nesia last banned palm oil
exports. Mehta said Indonesia
might avoid restricting exports
as it suffered heavily in August.
At a meeting in Delhi, Indone-
sian officials had requested
Indian importers to restart
buying as they ran out of stor-
age capacity, and the fruits
started to rot, triggering farm-
TURN TO PAGE 6
against market leader Google by
being first to offer conversa-
tional responses powered by
artificial intelligence.
The company unveiled a
new version of its Bing search
engine and Edge browser that
incorporate technology from
OpenAI, maker of the viral
chatbot ChatGPT, a revamp
designed to make it easier for
users to create content and find
answers on the web.
“This technology is going to
Microsoft chief executive
officer Satya Nadella. AP
reshape pretty much every soft-
ware category,” Microsoft chief
executive officer Satya Nadella
said at an event Tuesday at the
company’s Redmond, Washing-
ton, headquarters. It’s “high
AI-based Bing for chat and writing
text, and it can summarize web
pages and respond conversation-
ally to queries. The answers come
with citations to sources, so users
can see where the information is
coming from. A flurry of product
announcements from Microsoft
and Google in recent weeks comes
amid a sudden intense focus on
generative AI, which can generate
new content from digital troves of
TURN TO PAGE 6
G
oogle on Wednesday
announced a slew of
features powered by
Artificial Intelligence (AI) as it
ramped up a battle with Micro-
soft to maintain its dominance
of the web search industry.
The two Silicon Valley
titans are rushing into the
space after the ChatGPT bot
caught the imagination of
web users around the world
with its ability to generate
ship with ChatGPT maker
OpenAI and unveiled new
products on Tuesday, while
Google tried to steal the march
a day earlier by announcing its
“Bard” chatbot.
Google vice-president Prab-
hakar Raghavan told an event
in Paris that Bard was now
being used by “trusted testers”
but did not give a timeline for a
public release, which is
expected within weeks.
Raghavan denied the claim.
“This has been a multiyear
journey,” he said, adding that
no single event had “dramat-
ically changed the course” of
Google’s plans.
Google executives
announced on Wednesday
several AI-induced improve-
ments across products
including maps, translation
and its image recognition
tool Lens.

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 02 ThursDay, 9 February 2023
New Delhi
Stiff fines on the
way for violation of
competition law
Gireesh Chandra Prasad
gireesh.p@livemint.com
NEW DELHI
T
he central government is
likely to introduce fur-
ther changes to the Com-
petition Amendment Bill 2022,
which is pending in the Lok
Sabha, to steeply increase pen-
alties for anti-competitive
practices, said a person
informed about government
discussions on the matter.
This is one of the amend-
ments the ministry of corporate
affairs is proposing to get incor-
porated in the Bill before it is
taken up for passage in the
ongoing budget session of Par-
liament. The amendments are
likely to be moved this week,
said the person, who spoke on
condition of anonymity.
The idea is to levy penalty as
a percentage of the offending
company’s global revenue or
income, rather than the current
practice of levying a part of the
‘local or relevant market’ reve-
nue as penalty. This is a signifi-
cant scale-up of the penalty
provision and assumes impor-
tance given that increasingly
global technology giants are
being investigated for alleged
anti-competitive practices in
India. “This will step up deter-
rence in a big way,” said the
person quoted above.
The change is being pro-
posed by introducing an expla-
nation to the penalty provision
to the effect that “turnover
(revenue) means turnover
derived from all the products
After extensive consultations,
MSME policy ready for release
Ravi Dutta Mishra
ravi.dutt@livemint.com
NEW DELHI
T T
he national policy on
micro, small and
medium enterprises
(MSMEs) is ready for release,
having completed a protracted
stakeholder consultation, a top
government official said.
“An MSME policy has been
prepared after long stake-
holder consultations. We are
hopeful that we will be able to
bring it into the public domain
quickly,” MSME ministry sec-
retary B.B. Swain said at the
National MSME Conclave 2023
on Wednesday.
Minister of state for MSMEs
Bhanu Pratap Singh Verma
said the sector is set to witness
high growth thanks to various
government schemes launched
over the years. Verma added
that the Emergency Credit
Line Guarantee Scheme
(ECLGS) scheme has helped
MSMEs survive the covid
shocks. “We must manufacture
locally, and local items should
be used by our industry too.
Our MSMEs should go global,
which will lead to new India.
Our economy in 2014 was in
m MINT SHORTS
Digital lending cos meet MeitY
officials on app ban
New Delhi: Digital lending companies affected by the
MeitY’s sudden move to ban 94 loan apps met with the
ministry officials. About 15
companies met the MeitY offi-
cials in Delhi. “Companies
were given some 30 minutes
slots to make individual repre-
sentations and there were
some group representations
too,” two persons aware of the
details told Mint. ARTI SINGH
Indian airlines to order around
1700 aircraft over next 2 yrs
New Delhi: Indian airlines are expected to place orders
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First published in February 2007 to serve as an unbiased and clear-minded chronicler of the Indian Dream.
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I
Idea is to fine a percentage of
company’s global revenue MINT
and services by a person or an
enterprise.”
At present, the law says pen-
alty in the case of anti-competi-
tive agreements or abuse of
dominance is not more than
10% of the average revenue for
the preceding three financial
years, on each of the guilty enti-
ties. A modification to the pen-
alty provision proposed in the
original Bill tabled in the House
last year to give the option of
levying penalty either in terms
of revenue or income will be
retained.
The parliamentary standing
committee on finance led by
the BJP’s Jayant Sinha has
already reviewed the Bill. Some
of its recommendations have
been accepted while a few have
not made it into the amend-
ments being proposed by the
ministry.
The Amendment Bill seeks
to expand the scope of those
covered under provisions pro-
hibiting anti-competitive
agreements.
Minister of state for MSME,
Bhanu Pratap Singh Verma.
10th position globally. But now,
by 2022, our economy has
reached the fifth position,”
Verma said.
Secretary Swain said that
within 31 months of the launch
of the Udyam portal, 15.3 mil-
lion MSMEs employing 101 mil-
lion people have already regis-
tered. The rate of registration
on the portal has crossed
30,000 per day.
On public procurement,
Swain said the ministry has
reviewed the reserve list of
products provisioned under
the public procurement policy,
and a new draft list has been
prepared targeting relevant
for around 1500-1700 aircraft over the next two years, avi-
ation consultancy firm Centre for Aviation CAPA India
said. Currently, airlines in India have over 700 commer-
cial aircraft in operation and around 800 are on order. Air
India and India’s largest airline IndiGo are expected to be
the biggest contributors as CAPA India expects them to
place orders for 500 aircraft each.
Reliance, BPCL among buyers
using dirham for Russian Oil
New Delhi: Reliance Industries Ltd., Bharat Petroleum
Corporation Ltd. and Nayara Energy Ltd. are among
Indian refiners using United Arab Emirates dirham to pay
for some shipments of Russian crude as they navigate
ECONOMY & POLICY
Industrial cluster ranks to
fuel competition on cards
Govt is digitally mapping industrial parks and economic zones to ease investment flows
Dilasha Seth
dilasha.seth@livemint.com
NEW DELHI
ndustrial clusters in nearly a dozen
upcoming industrial parks may be
ranked on the quality of infrastruc-
ture periodically to attract invest-
ment, drive competition and raise
standards of manufacturing facilities.
The government is also digitally map-
ping industrial parks and economic
zones to ease investment flows, besides
provisioning for a single-window sys-
tem for all clearances.
Currently, 11 industrial corridors are
being developed by the government to
enhance industrial infrastructure in the
country, connecting metros and some
large cities.
These include Delhi-Mumbai, Chen- Currently, 11 industrial corridors are being developed by the government to
nai-Bengaluru, Amritsar-Kolkata and enhance industrial infrastructure in the country.
Bengaluru-Mumbai industrial corri-
dors.
The industrial corridors are aimed at person aware of the development.
attracting investment in what the gov-
ernment hopes will become global man- bled database that furnishes informa- against global benchmarks on four met-
ufacturing hubs with
modern infrastructure
and amenities.
“The idea is to create INDUSTRIAL corridors RANKINGS are based on
quality infrastructure are aimed at attracting
investments in what
ahead of demand. The govt hopes will become existing external & internal
focus is to keep developed manufacturing hubs
clusters ready for imme-
diate allotment for
attracting investments. Therefore, tion about existing external and internal suitable investable areas based on infra-
ranking of these clusters and industrial infrastructure such as road, air, rail and structure, connectivity, business sup-
parks on regular intervals will bring in port connectivity and other common port services and environment and
competition among these clusters and facilities in the manufacturing clusters. safety standards,” said another person.
and a wider ranges of products
for MSMEs. Last year, against a
target of 25% procurement
from MSMEs, the achievement
stands at 36%, he added.
In the Union budget for
FY24, the finance minister has
allocated a record ₹22,138 crore
for the MSMEs ministry, higher
than the revised estimate of
₹15,628 crore for the current
fiscal year.
The budget also announced
several measures to boost the
MSME sector, including exten-
sion of the ECLG till 31 March,
and a Raising and Accelerating
MSME performance (RAMP)
programme with an outlay of
₹6,000 crore.
According to Reserve Bank
of India data, bank loans to
MSMEs, under the priority sec-
tor, stood at ₹19.12 trillion as of
30 December, up 11.6% from a
year earlier. The small business
sector, with an estimated work-
force of 110 million, has also
gained importance owing to its
status as one of the largest
employment providers. A
report by consulting firm
KPMG and industry body CII
said in November that these
entities account for 30% of
India’s GDP and 45% of exports.
ANU SHARMA
Western sanctions. Buyers
have shifted some transactions
to the currency, according to
people with direct knowledge
of the matter. Reliance, BPCL
and Nayara didn’t respond to
requests for comment.
states to provide better facilities,” said a
The rankings are based on a GIS-ena- competitiveness of an industrial park
INFRA AGENDA
GIS-enabled database that
furnishes information about regions and integrated
infrastructure
Finmin releases
draft of Vivad se
Vishwas 2 for
consultations
Staff Writer
feedback@livemint.com
T
he finance ministry has
circulated the draft
scheme for a one-time
settlement of contractual dis-
putes—called Vivad se Vishwas
2—for stakeholder consultation.
The move, announced in the
budget last week, is aimed at
promoting ease of doing busi-
ness and will cover disputes up
to 30 September 2022.
Finance minister Nirmala
Sitharaman had announced in
the budget that in order to settle
contractual disputes involving
the government and govern-
ment undertakings, where an
arbitral award is under legal
challenge, a voluntary settle-
ment scheme with standardized
terms will be introduced.
This will be done by offering
graded settlement terms
depending on pendency level of
the dispute, the finance minister
had said. “Such cases are not
only holding back fresh invest-
ment but are also reducing the
ease of doing business with the
government,” the finance min-
istry said on Wednesday.
Travellers coming from G20
nations can use UPI in India
Mumbai: The Reserve Bank on Wednesday
allowed inbound travellers from G20 nations arriv-
ing at select airports to use UPI for making pay-
ments in the country. Later, the RBI also proposes
to extend the UPI facility to travellers from all coun-
tries.
BLOOMBERG
BLOOMBERG
The industrial Park Rating System
report released in 2021 evaluated the
rics—internal infrastruc-
ture and utilities, external
infrastructure and con-
TOTAL of 32 projects nectivity, business servi-
including smart industrial
ces and facilities, and
manufacturing clusters are environment and safety
being developed management.
“Based on rankings,
investors can identify
CBDT issues new guidelines to
streamline digital economy tax
Gireesh Chandra Prasad
gireesh.p@livemint.com
NEW DELHI
he Central Board of
Direct Taxes (CBDT) has
issued norms for pro-
cessing returns filed by digital
economy firms that are liable to
equalization levy, streamlining
the administration of India’s
digital economy tax.
The Centralized Processing
of Equalization Levy Statement
Scheme, 2023, which is effec-
tive from Tuesday, sets the
modalities for processing the
returns filed by these entities.
The equalization levy was
introduced in 2016 on online
advertisements and later
expanded to cover the sale of
goods and provision of services
through e-platforms.
While online advertising
services rendered by offshore
entities are taxed at 6%, e-com-
merce supplies by non-resi-
dent firms are taxed at 2%.
Experts said that the scheme
was long awaited as there was
no procedure for processing of
equalization levy statements so
far, which had created some
uncertainty, especially regard-
ing refund claims made.
PTI
LIVEMINT.COM
Finland’s minister for foreign
trade Ville Skinnari.
Commerce and industry minister
Markets want
Piyush Goyal last year urged states to
fast-track National Industrial Corridor trust and
Corporation (NICDC) projects and set a
transparency,
deadline for the acquisition and allot-
ment of land in these industrial clusters.
He cautioned that projects could be
shifted to other states if the allotted state
says Finnish
failed to acquire land and fast-track the
project.
minister
Under the industrial corridors pro-
gramme, 32 projects including smart on Adani
greenfield industrial regions, integrated
manufacturing clusters and multimodal Shashank Mattoo
logistics hubs are being developed with shashank.mattoo@livemint.com
‘plug and play’ infrastructure. NEW DELHI
Trunk infrastructure in four indus-
M
trial nodes is complete and land allot- arkets are looking for
ment is being worked out in coordina- trust and transpar-
tion with special purpose vehicles. ency, Finland’s minis-
The other industrial corridors being ter for foreign trade Ville Skin-
developed would connect Delhi-Nag- nari said on Wednesday in rela-
pur, Hyderabad-Bengaluru, Hyderabad tion to the controversy over
Nagpur, Hyderabad-Warangal, the Odi- allegations surrounding the
sha Economic Corridor, and extension Adani group.
of Chennai-Bengaluru Industrial Corri- “In Finland, we always
dor to Kochi via Coimbatore. emphasize transparency.
“The government is also working to Everything is open and can be
provision single window system for all monitored and analyzed. This
clearances and handholding investors brings us back to the question
and promote ease of doing business,” of trust. The market is looking
said the second person quoted for trust. Where there is trust,
above. there is money and invest-
Until last year, a combined invest- ments. In the European Union,
ment of ₹16,760 crore had been made in we really stress and emphasize
four ‘smart industrial cities’ that are the importance of smart policy-
coming up at Dholera (Gujarat), Shendra making and trust building,” the
Bidkin (Maharashtra), Vikram Udyog- visiting European minister said
puri (Madhya Pradesh) and Greater in response to a question on the
Noida (Uttar Pradesh). Adani group at a press interac-
tion. He was, however, opti-
mistic about investments
opportunities in the Indian “in
the long run.”
“India is a very interesting
investment destination. I really
believe that in the long run,
India’s stock market and IPOs
offer many opportunities for
Pai said referring to the new
European and Finnish compa-
nies. The message from our
rule. This would keep the tax- companies is that let’s build up
payer informed by providing trust and transparency. That
processing status updates on a enables more investments,”
real-time basis through email, Skinnari said.
text message and through the Skinnari, who is slated to
income-tax department web- meet with commerce minister
site, said Pai. Piyush Goyal and railway min-
The scheme also provides for ister Ashwini Vaishnaw, also
adjustment of refund with said European companies were
demand due for other years. pushing for an even playing
“We now hope to see the equal- field in India through the
ization levy statements to be India-EU FTA that is being
processed and refunds claimed negotiated. “I think the most
in the statements to be important message from Nor-
CPC of IT dept will process released,” added Pai. dic countries to India is that the
equalization levy statements. MINT The statement on equalisa- world needs a level playing
tion levy is to be furnished by field. Once we have a level play-
As per this scheme, the Cen- businesses by 30 June after the ing field, we can build up trust,
tralised Processing Centre end of a financial year. we can build up further invest-
(CPC) of the Income Tax The centralized scheme ments and we can create jobs.
department which currently aims to put more clarity in the In other words, we need to
processes income-tax returns procedural mechanism of the really build up the free trade
will also process equalization levy since revenue to govern- agreement and we hope that
levy statements electronically ment from this source is likely India and the EU can find each
and all communication should to be on the increase, said Amit other sooner than later,” he
be on email or on the Income- Maheshwari, tax partner, AKM said.
tax portal, explained Sneha Pai, Global, a tax and consulting “India is a very important
senior director at Nexdigm, a firm. partner for Finland, for our
consultancy. The rules also say that in case companies, and for our people.
“The consistent, uniform, of a revised equalisation levy India and Finland complete
rule-driven manner in which statement, no further action each other since we have a lot of
the CPC processes income tax will be taken on the original similarities,” he added citing
returns, is expected to be repli- statement, if it has not already technology skills. “Both coun-
cated for equalization levy been processed, explained tries are very engineering
statements,” Maheshwari. minded.”
Companies get extra time to
file 46 statutory forms
CORRECTIONS AND
CLARIFICATIONS
New Delhi: Companies have Mint welcomes comments,
been given 15 more days to file suggestions or complaints
46 statutory forms relating to about errors.
Companies Act compliances
Readers can alert the
without additional fee as the
newsroom to any errors in the
government is in the process paper by emailing us, with your
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 LIVEMINT.COM DEALS, TECH & STARTUPS ThursDay, 9 February 2023
New Delhi 03

m MINT SHORTS
TCS bags £600mn contract from
Flipkart gets interim HC relief Lendingkart
acquires
UK insurer Phoenix Group
New Delhi: Tata Consultancy Services (TCS) has secured a £600
million digital transformation contract from British insurance
and financial services firm, Phoenix Group. The deal, which will
over ₹1,100 crore tax demand Upwards for
retail foray
count among the largest signed by Indian software services firms
in the current quarter, will see TCS offer its ‘BaNCS’ platform to Aman Rawat
the Phoenix Group, including handling customer administration aman.rawat@livemint.com
and servicing of Phoenix’s life insurance subsidiary, ReAssure. Case pertains to marketing, Esop expenses; protection from coercive steps till 24 February NEW DELHI
SHOUVIK DAS

F
intech startup Lending-
Aman Rawat kart Technologies Pvt. Ltd
IISc, Samsung join hands for aman.rawat@livemint.com has acquired retail lender
Upwards Fintech to offer per-
safe semiconductor chips NEW DELHI
sonal loans to small businesses.

W
almart Inc.-backed The deal, a mix of cash and
Flipkart on Wednes- equity, valued Upwards at
day won interim ₹100-120 crore and gave exits
relief over a tax to some of its existing investors
demand of more such as Shunwei Capital, said
than ₹1,100 crore for assessment years Harshvardhan Lunia, founder
2016-17 and 2018-19. and chief executive, Lending-
The Karnataka High Court granted kart.The Mumbai-based firm
protection to the online retailer from had earlier raised capital from
‘coercive measures’ until the next hear- Shunwei Capital, India Quo-
ing on 24 February, over a 31 January tient and Mayfield Fund.
order by the Commissioner of Income Founded in 2017, Upwards
Tax (Appeals) to make the payment offers personal loans to salaried
within four days. professionals and gives facili-
New Delhi: Public research university Indian Institute of The case pertains to Flipkart’s ties such as automated loan
Science (IISc) and South Korean electronics company Sam- expenses related to marketing and underwriting and disburse-
sung have joined hands to develop solutions to produce employee stock ownership plan (Esop). ment to reduce the loan pro-
reliable and safe semiconductor chips. Under this partner- The charges for marketing and Esop cessing time to a few hours.
ship, the two organizations will promote research and stood at around ₹4,500 crore and ₹180 The company has nearly 70
development work in the field of on-chip electrostatic dis- crore, respectively, employees
charge (ESD) protection. SHRADDHA GOLED during the two On 31 January, the tax department had ordered Flipkart to make the payment within four days. MINT and it has
assessment years. disbursed
The bone of con- mit the demand within four days, filed just a notional entry and not a real both of which are contentious issues l o a n s
LinkedIn crosses 100 mn users in tention is whether companies such as a writ petition against notices issued by expense, hence was disallowed (by the and appears to be a legacy issue for exceeding ₹500 crore till date.
Flipkart can leverage the loss for mar- CIT(A). The company submitted that CIT(A)),” said Sood. e-commerce operators,” said Eco- It claims to be operating in over
India, its second-largest market keting intangibles and Esops for tax the issue of capitalization of marketing In its submission,Flipkart said previ- nomic Laws Practice’s Visalaksh. 200 cities in India and aims to
New Delhi: Microsoft-owned networking platform LinkedIn deductions, said Kumar Visalaksh, intangibles was decided in its favour by ous court rulings involving Biocon, Flipkart argued that the appellate expand its footprint under
announced that it has reached 100 million users in India, making partner at Economic Laws Practice. Income Tax Appellate Tribunal (ITAT), PVP Ventures and NDTV over allowa- orders were passed in “gross violation Lendingkart.
the country its second largest market after the US. This comes “Flipkart was booking the massive Bangalore for the assessment year bility of ‘Esop cross-charges’ were in its of principles of natural justice” as the “Post-acquisition, Upwards
after a 56% increase in membership for LinkedIn over the past discounts it offered to customers as documents forming the basis of will continue to work separately.
three years.The company said software and information technol- well as its marketing costs in its UnDER TAx SCRUTIny findings were not provided to it for The buyout will help Lending-
ogy (IT) professionals make up the largest base of its members in profit and loss (P&L) statements. rebuttal. It also claimed violation of kart provide access to capital to
the country. Manufacturing and corporate services comprise the However, the tax department is of THE charges for THE firm was THE tax department FLIPKART had judicial discipline and consistency the blue-collared workforce
other top sectors for LinkedIn in India. PAHI MEHRA the view that these expenses marketing and Esop
stood at approx.
booking discounts
offered as well as its
is of the view that
these expenses
filed a writ
petition against
as previous orders by ITAT for AYs employed with micro-small and
should be added to its capex costs, ₹4,500 cr and ₹180 marketing costs should be added to notices issued 2012-13 to 2015-16 were in favour of medium enterprises (MSMEs) as
not P&L, as the expenditures will cr, respectively under profit and loss its capex costs by CIT(A) the e-commerce firm on the same well as to those individuals who
Isro confirms second SSLV help the company create goodwill issues. CIT(A)’s order for AY are just starting their busi-
in long term among its customers,” 2017-18 also was in favour of Flip- nesses,” Lunia said. “Upwards
launch for 10 February said Saurrav Sood, global tax advisor 2015-16. ITAT had allowed the com- favour. Esop cross-charges refer to the kart, it added. Flipkart also pointed out has the best-in-class lending
New Delhi: The second demonstrator launch mission of Indian leader at SW India. pany to treat the marketing expenses costs borne by a company with respect in his grievance that no reasonable capabilities for its target market-
Space Research Organisation (Isro)’s Small Satellite Launch Capex costs provide long-term bene- and discounts as a loss at the time. to its employees, which would be an time was provided to deposit the place in providing personal
Vehicle (SSLV) has been confirmed for Friday. This comes after fits to a company, while operating “On the Esop part, Flipkart, like actual business expense. “The heart of demand and there is no justification to loans. With this partnership,
the first attempt to launch India’s central space agency’s first expenses are costs that give returns for other companies, books the difference the dispute is disallowance of deduc- provide only few days for this purpose, Upwards will be aptly positioned
‘small’ rocket launcher ended in a partial failure on 9 August, with a shorter period of time, and are added between the market price of the stock tion of marketing intangibles by reclas- which also restricts the limitation to execute its strategy of helping
the SSLV rocket failing to inject its satellite payload in their to the P&L statements. and the issued price as an expense sifying them as capital expenditure and period available to the assessee for pre- customers smoothly obtain per-
intended orbits. SHOUVIK DAS Flipkart, which was required to sub- under employee benefits expense. It’s disallowance of Esop expenditure— ferring an appeal before ITAT. sonal loans,” he added.

Unitus Ventures eyes ₹300 cr for new fund

Sneha Shah Mantha said. Network, the venture network
sneha.shah@livemint.com “We will be looking at a investing in tech startups of the
MUMbAI cheque size of around $3 million Global South.
through this new fund. We are “As we entered the India

U
nitus Ventures plans to
raise a total of ₹300
crore (about $36 mil-
lion) for its new Opportunities
Fund that will be invested in
winner portfolio firms from its
first and second fund, said a
senior official at the early-stage
venture capital firm.
Unitus has so far invested in
startups such as Bet-
terplace, Cuemath,
Awign and Masai
from the new fund,
said Surya Mantha, managing
partner. He added the firm is
targeting a final close of the
fund later this year.
“We have raised $10 million
also keeping aside 20% of the
fund for new investments out-
side of our portfolio that will
enable us to explore opportuni-
ties in early-growth or growth-
stage companies (Series A
onwards) that are capitalizing on
advances in generative AI and
climate technologies,” he added.
He also said the firm will
consider raising its
third fund by this
year-end.
Across its first and
second fund, Unitus has made
investments in 39 startups so
far. “The fund also gives the LPs
(Limited Partners) a co-invest-
ment opportunity alongside
Surya Mantha, managing
partner, Unitus Ventures.
investors.
Asked if the massive drop in
valuations of growth-stage
startups is a concern, Mantha
said with the 25-30% drop in
valuations amid the funding
winter, Unitus is at an advan-
tage to get good companies at
market, Unitus was the natural
partner, given their expertise,
networks and unparalleled
portfolio of startups. We also
aligned with their commitment
to identify and support startups
with sound business models
Predict the
that can create value over the
long term,” said Hidekazu Ito,
head-India at Mynavi, a Japa-
Sensex
nese company offering educa-
tion and job-related services.
Some early-stage investors
such as Blume and Avataar
Ventures have also raised
Play and win
Opportunities Funds to invest
in their star portfolio firms in
the recent past. While Blume
raised ₹350 crore in a new sec-

(₹80 crore) towards the first
close of the fund from investors
such as Mynavi Corporation of
Japan, B.V.R. Mohan Reddy of
Cyient, Nandkumar Seksaria of
Govindram Brothers, and other
new and returning investors,”
the fund and hence, we will be
in a position to support portfo-
lio companies longer,” he said,
adding that as a matter of com-
pliance, it will never lead or
co-lead a round and leave the
valuation exercise to other
reasonable prices.
Unitus supports early-stage
tech startups in jobtech, fin-
tech, software-as-a-service
(SaaS) and climate sectors.
Launched in 2012, Unitus is a
founding member of Capria
subscription.
ondary fund it launched along
with Avendus Capital, Avataar
raised a top-up fund of $100
million. Also, Chiratae Ven-
tures said it would invest a large *Exclusively on the Mint app
part of its growth fund in its
own portfolio firms.

Fewer smartphone launches likely in ’23 Scan to know more

Abhijit Ahaskar recently. Counterpoint said
abhijit.ahaskar@livemint.com smartphone shipments in India
NEW DELHI fell 9% in 2022, while Canalys
noted a 27% drop in the

S
martphone makers are
set to go slow on new
model launches this cal-
endar year amid muted con-
sumer demand.
According to industry
experts and executives, brands
will take a cautious approach
with their product portfolio
this year and may not rush new
handset launches until they
exhaust last year’s inventory.
Many firms couldn’t clear their
2022 stocks even till the
December quarter as inflation-
ary pressures weighed on con-
sumer demand.
Muralikrishnan B, president
of Xiaomi India, the country’s
second largest smartphone
seller, said the company plans
to focus on streamlining its
product portfolio, scaling the
affordable range, and bringing
affordability offers on select
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Many firms couldn’t clear their 2022 stocks even till the
December quarter.
products to fuel demand. He
added that the brand will have
a “leaner” portfolio this year.
Similarly, rival Realme is also
adjusting its portfo-
lio in line with the
shifting consumer
preferences and the
economic downturn. “Macroe-
conomic scenarios can impact
demand for consumer prod-
ucts in more ways than one. We
BLOOMBERG
are closely monitoring con-
sumer trends and adapting our
offerings to meet these chang-
ing needs and preferences,”
said Madhav Sheth,
CEO, Realme India.
Market trackers
like Counterpoint
Research, the International
Data Corporation (IDC) and
Canalys, have all noted a drop
in India’s smartphone market
December quarter compared
to a year earlier.
“Brands will be conservative
with their portfolio and more
thoughtful with their inventory
management. Retailers are
already holding on to last year’s
inventory. Due to overestima-
tion towards the start of last
year, brands ended up holding
a lot of older model component
inventory. The entire year went
in clearing the inventory as the
demand was much lower than
their expectation,” said Sanyam
Chaurasia, Technology Market
Analyst at Canalys.
Tarun Pathak, Research So what are the
Director at Counterpoint, con-
curred, and said most brands Editor's Picks for today?
will be more aligned towards Read Exclusively on the Mint app
premium products. “We will
see more foldable phones this Download Now
year from Chinese brands,” he
added.
 04 ThursDay, 9 February 2023
New Delhi MARK TO MARKET LIVEMINT.COM

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

60,663.79 0.63 17,871.70 0.85 15,028.30 0.85 38,961.00 0.89 17,719.85 0.85 24,883.24 1.00 28,169.62 0.76
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

60,286.04 60,332.99 17,721.50 17,750.30 14,902.20 14,927.55 38,615.50 38,704.80 17,569.70 17,598.55 24,637.58 24,677.59 27,956.74 28,006.49
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

60,792.10 60,324.92 17,898.70 17,744.15 15,046.70 14,924.05 38,988.90 38,659.25 17,743.90 17,596.85 24,896.35 24,630.91 28,193.51 27,950.35

m MINT SHORTS
Shoppers to face fresh price
RBI rate hike down, but not out
hikes as stores pass on costs Tightening spree Mind the gap “So, we can’t take too much solace in probability of further tightening may
Shoppers around the world will pay more for groceries Harsha Jethmalani & Bavadharini KS the fact that headline inflation rates be low.
this year than they did in 2022, according to retailers, harsha.j@livemint.com The Reserve Bank of India's 25 basis While the headline CPI inflation is showing will likely continue to fall, as it could be “There’s clearly a possibility of
consumer goods firms and investors, unless commodity points repo rate hike in February was signs of easing, core inflation remains sticky. a long time before core rates move another 25bps hike in April; lots will

T
costs decline or the shift to cheaper store-brand products he Reserve Bank of India’s
accelerates. Retailers and consumer goods producers (RBI) monetary policy com-
have been stuck in tough price negotiations for more mittee met widely held
than a year now, with friction beginning in 2021 over cov- expectations of a 25 basis
id-related supply chain logjams. This has since ballooned points (bps) repo rate hike.
into fights over the high cost of raw materials and energy The key benchmark lending rate now
in the wake of Russia’s invasion of Ukraine, with rising stands at 6.50%. One basis point is
prices of basic foodstuffs from bread to milk and meat 0.01%. The latest data showed that on
exacerbating a cost-of-living crisis in Europe. Britons an annualised basis, inflation measured
paid a record 16.7% more for food in the four weeks to 22 via the consumer price index (CPI) is
January compared to the same period last year, according easing, falling below RBI’s 6% upper
to research firm Kantar. The US food index, including tolerance mark.
meals eaten at home and in cafes and restaurants, No wonder then, the central bank
increased 10.4% for the year ended in December.REUTERS was anticipated to slow down its pace of
monetary tightening with a smaller
quantum of rate hike. That it did. Recall
that in September and December, the
RBI had hiked repo rate by 50bps and
35bps, respectively.
Also, a small section of economists
was hoping that the central bank would
change its monetary policy stance to
neutral. One reason to expect this was
softening headline CPI inflation. Fur-
ther, there is an expectation that the
trend setter, the US Federal Reserve,
may also be reaching an end of its tight-
ening cycle. Nevertheless, those hopes
largely in-line with expectations.
Repo Rate (in %)
7 FY23 has been revised lower to 6.5% India economist at Capital Economics
6.5
6
5 6.5
4
4.0
3 relatively robust economic sticky
Dec 2021 Feb2023
were dashed. RBI said that it remains
focused on the withdrawal of accom-
modation stance to ensure inflation
remains within the target range. The
central bank’s worry is that while head-
line CPI softened, driven by a strong
decline in the prices of vegetables, core
inflation remains sticky. Point taken.
CPI Core Inflation (year-on-year change in %) down and into line with them,” he said. hinge on the inflation data for January
8 Note that the inflation estimate for and February,” said Shilan Shah, senior
from 6.7% earlier. For FY24, the CPI in a note.
7.5 inflation is pegged at 5.3% “But the softer growth
assuming that the monsoon TAMING outlook and the likelihood
7
will be normal. The infla- THE BEAST that inflation remains
tion battle is still underway, within the target mean we
considering that RBI does SOME economists are maintaining our view
not see inflation cooling were hoping that
RBI would change its
that the hiking cycle is at
6.3
6.2 below the 4% mark soon, monetary policy the end,” he added.
but India’s growth pros- stance to neutral Meanwhile, a repo rate
6 pects seem to be encourag- hike would have repercus-
6.01 ing. RBI projected India’s RBI’s worry is sions on the banking sector,
5.7 that while headline
5.5
real gross domestic product CPI softened, core as the rising cost of funds is
Jan 2022 Dec 2022 growth for FY24 at 6.4%. A inflation remains likely to weigh on lenders’
net interest margin.
Note: Core inflation excludes food, fuel and tobacco
Source: Reserve Bank of India, IDFC First Bank
growth outlook leaves the “NIMs are likely to
door open for policy flexi- expand initially before nor-
SATISH KUMAR/MINT
bility, and to raise interest rates further, malising. This is because most loans are
“What is also fairly clear about these if required. either MCLR or EBLR, so lending rates
core measures of inflation, is that, Against this backdrop, the moot will get repriced quicker than deposit
unlike some western economies, the question is whether this is the end of rates as nearly 80% of deposits are
core inflation rates can deviate from the interest rate hike cycle for India. term-deposits with an average matur-
headline inflation for considerable The answer to this is not simple. Since ity period of 18 months,” said Sujan
periods of time,” said Robert Carnell, RBI did not change its stance, there is Hajra, chief economist and executive
regional head of research for Asia-Pa- room for another hike. That said, with director, Anand Rathi Shares and Stock
cific at ING. inflation expected to inch lower, the Brokers.

Momentum picked up for Tesla in January after another

round of aggressive price cuts. AP Hero MotoCorp finds it hard to speed up in tough environment
China’s car sales fall amid weak Vineetha Sampath amortization) level. One basis industry-leading features, we regain the lost market share,
Good and bad
buying over Lunar new year vineetha.s@livemint.com point is 0.01%. This was due to
In Q3FY23, Hero MotoCorp’s gross profit per vehicle touched an
believe the company’s strategy which largely hinges on rural
Sales of cleaner cars in China plunged in January as con- adverse operating leverage to focus on the premium seg- demand recovery,” said Varun
all-time high but the Ebitda margin was muted.

H
sumers dialled back purchases during the Lunar new ero MotoCorp Ltd’s thanks to weak volumes and a ment by pricing its product Baxi, an analyst at Nirmal Bang
year holiday and others got in earlier in December before record gross profit per rise in other expenses. Ebitda Gross profit per vehicle (in ) Ebitda margin (in %) (right-hand scale) above competition will limit vol- Equities. In January, Hero’s two-
electric vehicle subsidies fell away. A total of 332,000 vehicle in the December margin was up by only 10bps 25,000 15 ume growth,” analysts at Kotak wheeler volumes declined by
new-energy vehicles, including pure electric cars and quarter (Q3FY23) was not sequentially to 11.5% in Q3. 20,000 12 Institutional Equities said in a 9.5% sequentially to 3,56,690
plug-in hybrids, were sold last month, down 48.3% from enough to lift investor senti- Moreover, Ebitda margin was report on 7 February. units. The company noted pre-
15,000 9
the month prior and 6.3% lower than sales in January ments. Shares of the company impacted to the tune of 70bps Overall, while softening raw miumization has been a trend
2022, according to final data released by the China Pas- closed 1.4% lower on Wednesday owing to spends on its electric 10,000 6 material costs and price hikes and is accordingly strengthening
senger Car Association. Chinese automaker BYD Co. and while the benchmark Nifty50 vehicle (EV) launch, Vida V1, 5,000 3 would aid margin expansion, its 125cc portfolio. The XTEC
US manufacturer Tesla Inc. led the pack, shipping 151,341 index was up 0.85%. Hero said in the earnings call. 0 0
volume growth is paramount. variants are seeing good traction.
and 66,051 cars, respectively. Momentum picked up for What gives? Overall perform- The company expects such Q1FY21 Q3FY23 Hero primarily caters to the The stock could see near-term
Tesla in January after another round of aggressive price ance remains muted. The expenses to continue going for- Note: Ebitda is earnings before interest, entry level segment and the pressure given the muted rural
tax, depreciation and amortization Source: Company data, Jefferies
cuts. The EV pioneer was forced to cut output in Decem- sequential rise of 254 basis ward as it expands its EV offering company notes green shoots in markets and accordingly, slow
SATISH KUMAR/MINT
ber from its Shanghai factory amid muted demand. points (bps) in Q3 gross margin to more cities. In view of this, rural demand recovery. How- recovery in volume. Valuations,
China’s Lunar new year holiday was always going to be to 30.6% did not translate to Hero’s Ebitda margin trajectory Delhi, Bengaluru and Jaipur– been in the range of 250-300 ever, rural still lags urban. “As of though, appear reasonable. The
an extraordinary one this year, being the first since 2020 commensurate improvement at is unlikely to surprise positively. and investors would do well to vehicles so far. now, there is nothing concrete in shares trade at almost 15 times its
where people were able to travel freely and return to their the Ebitda (earnings before Currently, the EV product is track the market acceptance. “While the company has terms of strategy as to how Hero FY24 estimated earnings, show
home towns. BLOOMBERG interest, tax, depreciation and available in only three cities – Hero said that EV deliveries have equipped its EV product with will ramp up its volume and thus Bloomberg data.

Mark to Market writers do not have positions in the companies they have discussed here

Macquarie upgrades Didn’t seek loan app ban: RBI Consumer confidence increased
Paytm to ‘outperform’ further in January: RBI survey Shayan Ghosh
shayan.g@livemint.com
in some fintech industry-spe- stores in India. Over the past
cific WhatsApp groups since couple of years, several preda-
Monday. tory loan apps have used the
Bloomberg Swaraj Singh Dhanjal

T
Sharp rise he Reserve Bank of India Junior finance minister proliferation of smartphones recovery path for the ninth sur-
feedback@livemint.com
The company’s shares rose as
(RBI) did not seek to ban Bhagwat Karad said in the and cheap data connections in swaraj.d@livemint.com vey round since the historic low
much as 19% to ₹698. any specific loan app Rajya Sabha on Tuesday that India to their advantage to recorded in mid-2021 and

T I
he brokerage with the
most bearish call on
India’s Paytm is now
calling for the stock to outper-
form as the fintech firm shows
prospects of turning profita-
ble. Shares rose for a third
day.
Macquarie Capital Securi-
ties (India) Pvt., which had
kept an underperform call on
the stock since its listing until
the “double upgrade” on
Wednesday, has set an ₹800
target for the shares. The
shares rose as much as 19% to
₹698 in Mumbai but pared
some gains to trade 14.5%
higher as of 2:43 p.m in Mum-
bai.
The firm is joining seven
other brokerages that have
either a buy or overweight
recommendation on One 97
Communications Ltd., the
parent company of the fintech
firm. Shares are up more than
40% since a record low in
November, with gains accel-
One 97 Communications
700
670
618 Open
640
610
588.6
580
Previous close
9:15am
Source: NSE
SATISH KUMAR/MINT
operating leverage kicking in,
we expect accounting profits
to be delivered by full-year
2026.”
The company posted a nar-
rower third-quarter loss after
its drive to add customers
boosted revenue, it said in an
exchange filing last week.
Revenue from operations
rose 42% to ₹2,060 crore,
while total costs climbed at a
slower pace, according to the
filing.
Paytm has never traded
above its IPO price of ₹2,150
from app stores but has merely
shared with the government a
list of apps that are used by
entities it regulates, deputy
governor Rajeshwar Rao said
675.95 on Wednesday.
Close
Mint reported on Wednes-
day that a report on the gov-
ernment banning close to 138
gambling apps and 94 loan
3:30pm apps over concerns of “Chi-
nese linkages” has caused
panic in the industry. The
report said that some popular
loan apps, such as PayU’s buy-
now-pay-later (BNPL) service
LazyPay, Kissht, and Faircent,
are seen as part of a ‘partial’ list
that has been floating around
Expected rate hike, positive global cues lift stocks and bonds
Ujjval Jauhari
ujjval.j@livemint.com
RBI has furnished a list of digi- offer quick loans. ndian consumers showed increased by 1.3 points in Janu-
tal lending apps being used by During covid-19, several increasing optimism about ary 2023 on the back of
regulated entities such apps were the general economic condi- improved sentiments on the
to the ministry of RBI said it has accused of charg- tions and household income, general economic situation and
electronics and merely shared ing usurious according to a survey conducted household income,” the survey
information tech- interest rates and by the Reserve Bank of India in results showed.
with the
nology (MeitY). government a list using unfair January. The current situation index
MeitY has, in recovery prac- The January round of the climbed to 116.2 points in the
of apps that are
turn, shared the tices when bor- bi-monthly Consumer Confi- January survey from 114.9 in the
list with app used by entities it rowers failed to dence Survey obtained current The survey covered 6,047 previous round. A number
stores and regulates repay on time. perceptions (vis-à-vis a year respondents. BLOOMBERG above 100 reflects optimism.
requested them “These apps do ago) and one-year-ahead The one-year ahead outlook,
to ensure that not belong to expectations on the general January, covering 6,047 as reflected by the future expec-
only the apps in the list are entities regulated by RBI. economic situation, employ- respondents, RBI said. tations index (FEI), also rose by
hosted on their app stores, Those that have our registra- ment scenario, overall price sit- “Consumer confidence 1.3 points to its two-year high on
Karad said. tions are primarily NBFCs. In uation and own income and improved further both for the the back of improved optimism
This is not the first time the turn, NBFCs use several apps,” spending across 19 major cities. current period as well as for the on the general economic situa-
government has moved to RBI governor Shaktikanta Das The latest survey round was year ahead; the current situation tion, employment and income
remove certain apps from app said on Wednesday. conducted from 2 January to 11 index (CSI) continued on its over the next year.
Ambuja Cements, ACC and With no negative surprises stance or sounding data
NDTV added to their gains with from the RBI’s MPC meet, dependent. But the governor’s
only Adani Total and Adani investor buying continued in statement did not entertain

erating this week after reports
in the Indian media that the
government had banned doz-
ens of Chinese rivals.
“Since our last downgrade,
Paytm has positively sur-
prised on the distribution of
financial services revenues by
a wide margin and has also
managed to control overall
expenses and charges,” ana-
lysts Suresh Ganapathy and
Param Subramanian wrote in
a note.
“We were earlier expecting
losses to continue but at cur-
rent rate of revenues and
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rupees since its listing in
November 2021 and had the
worst first-year share plunge
among large IPOs over the
past decade.
At the time of the offering,
Macquarie had a view that
price-to-sales valuation for
the startup was expensive,
with profitability elusive for a
long time.
Among the remaining risks
for the stock are risks related
to competition, regulatory
issues and corporate govern-
ance, the analysts wrote in the
report.
M
arkets added to the
gains on Wednesday,
on smaller and
expected rate hike by the
Reserve Bank of India as well as
favourable global cues and con-
tinued rebound in Adani
stocks. Nifty ended with gains
of 0.85% on Wednesday while
Sensex gained 0.63%.
Adani Enterprises and Adani
Ports led the gains, rising
23.13% and 9.01%, respectively
at the Nifty , while other group
stocks such as Adani Transmis-
sion, Adani Power and Adani
Wilmar gained up to 5%.
Green being down by 5%.
Dhiraj Relli, MD & CEO,
HDFC Securities said, “The
bond markets and equity mar-
kets reacted well to the mone-
tary policy committee (MPC)
outcome as the MPC did not
sound more hawkish than most
expectations. Absence of a CRR
hike also was a relief.”
Experts said that the RBI has
taken a more optimistic view
on domestic growth by increas-
ing the GDP forecast while cau-
tiously keeping CPI inflation at
5.3% for FY24.
Meanwhile, global markets
the IT, banking & others.
The reducing recession con-
cerns post Powell’s comments
on disinflation also led to
improved sentiments for the IT
services. Stock prices of other
rate sensitive sectors including
auto, consumer durables,
realty, also reacted well to the
Adani Enterprises and Adani Ports led the gains, rising 23.13% MPC outcome. The strong US
and 9.01%, respectively at the Nifty. MINT market cues in overnight trades
too had boosted market senti-
traded with hopes as investors possibility of further rate hikes ment.
digested US Fed chair Jer- in response to a stronger job Sandeep Yadav, head—
ome Powell’s speech, which market, said Vinod Nair, head Fixed Income, DSP Mutual
stated that disinflation had of research at Geojit Financial Fund said “There was some
begun but pointed towards the Services. expectation of RBI easing the
such thoughts, due to which
g-sec yields rose marginally by
3bps to 7.33%.”
Lakshmi Iyer CEO—Invest-
ment Advisory, Kotak Invest-
ment Advisors Ltd said that
while chances of pause still
remain, the uncertainty may
persist and she expects range
bound yield movement till then
—oscillating between global
data and domestic cues.
The rupee after the policy
announcement closed 20 paise
stronger at ₹82.49 to a dollar,
which analysts attribute to dol-
lar inflows.
 LIVEMINT.COM
Hero
MotoCorp
fast-tracks
EV plans
Alisha Sachdev
alisha.sachdev@livemint.com
New DelHi
H
ero MotoCorp, India’s
largest two-wheeler
maker, has set sights
on an accelerated product plan
for its electric vehicle (EV)
business under the Vida
brand. The company aims to
develop a new range of EVs in
the next 18-20 months to
expand its portfolio and cater
to different segments of the
electric two-wheeler market,
including more affordable or
“mainstream” products, Swa-
desh Srivastava, head of the
emerging mobility business
unit said in a post-earnings call
with analysts on Wednesday.
He said the company began
customer deliveries of the Vida
scooters in December in three
cities, and has so far delivered
more than 250 scooters.
Meanwhile, Hero MotoCorp
posted a net profit of ₹711 crore
in the December quarter, a
3.6% rise from ₹686 crore a
year earlier. Revenue from
operations rose 1.8% to ₹8,031
crore from ₹7,883 crore. Gross
margins at 30.6% expanded
250bps sequentially to a
record ₹19,600 per vehicle.
This was helped by periodic
price hikes, cost saving pro-
gramme and softer commod-
ity prices. However, higher
discounts during the festive
season and increased spend-
ing on the emerging mobility
business unit, marked by
expansion of the EV business
hit net margins.
Margins are likely to
improve in the coming quar-
ters with stable inflation and
with EV scooters starting to
contribute to revenue, said
Niranjan Gupta, chief financial
officer.
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CORPORATE ThursDay, 9 February 2023
New Delhi 05
Airtel bets on enhanced
5G network to grow rev
Airtel plans to take 5G services to 300 cities by March ’24 from 70 at present
Gulveen Aulakh
gulveen.aulakh@livemint.com
New DelHi
B
harti Airtel Ltd plans to deploy a
multipronged approach for
future business growth, manag-
ing director and chief executive
Gopal Vittal said. This will
include improving the network experience
in 150 cities while taking 5G services to 300
cities by March 2024 from 70 currently.
India’s No. 2 telecom operator will also
expand its coverage into 60,000 new villa-
ges and 40,000 community clusters, step
up investments in its digital businesses of
CPaas, IoT and cloud, reduce network run-
ning costs at 80,000 high-cost sites while
directing some 4G capacity investments to
5G as customers upgrade to the next-gen-
eration services. Expansion of network will give Airtel its fair market share and provide tailwinds to the
“This expansion will give us our fair mar- business, managing director and chief executive Gopal Vittal has said. REUTERS
ket share, and provide tailwinds to the busi-
ness,” Vittal said at Airtel’s December quar- it towards 5G,” he said. that will be dictated by how the 5G devices
ter earnings call on Wednesday. Reiterating the need for tariffs to rise to shape out,” he said, noting that 5G-enabled
In the 150 cities, Airtel will use 5G with Rs 300 to get a ‘respectable’ return on capi- smartphones is currently at 11% of India’s
high speeds, going up to 500 Mbps, to pivot tal employed, Vittal said the company’s total smartphone base, which could rise to
customers to move to high-value postpaid portfolio was resilient and diverse, with 20% by March 2024, even as 5G phones
services, to boost average revenue per user 30% coming from Africa operations, India comprise 35-40% of quarterly shipments.
(Arpu) and stickiness with the service. Air- wireless contributing 50% and the balance “We have to look at where the devices
tel will also use data science to predict from the fast-growing digital and enter- are likely to come over the next 6-9 months
demand patterns across all its businesses to prise businesses. and plan a rollout, in addition to the cover-
deploy resources to build better age that we will provide in
coverage, which will drive effi- BROADER FOOTPRINT whichever cities that we
ciencies even as it invests in have decided to go,” Vittal
building network infrastructure AIRTEL will also ITalso plans to step THE carrier will also said.
in these areas. expand its coverage up its investments in use data science to Outlining the tally of
into 60,000 new digital businesses of predict demand
The carrier will also focus on villages and 40,000 CPaas, internet of patterns across all its 5G-ready devices across
building better engagements community clusters things and cloud businesses India, he said in metros like
with enterprise business custom- Delhi, 15% of smartphones
ers in these 150 cities through are 5G ready, while in states
more investments in CPaas, IoT and cloud, “This portfolio gives us a unique ability like Bihar, the penetration is just about 9%.
to generate more business from the exist- to withstand risks by being solidly posi- Airtel’s rival, Reliance Jio, the No 1 telco,
ing set of 500 enterprises. tioned for where growth is coming from,” has set a target for pan-India 5G rollout by
On reducing sales and distribution costs, he said. the end of 2023.
Vittal said 80,470 high cost sites have been Vittal also said the expansion of 5G servi- Meanwhile, the Sunil Bharti Mittal-pro-
identified where solutions to reduce the ces into the rural areas will hinge upon the moted company has extended the entry
operating costs will be found over the next adoption of 5G smartphones in those mar- level Rs 155 plan to more circles as of Janu-
six to nine months. “5G could be a capacity kets. “The rollout is going to happen across ary, from two – Odisha and Haryana – in
offload for 4G, so we’re looking at squeez- urban India by March 2024, the pace of the November last year, but is yet to roll it out
ing out 4G capacity investments and direct rollout beyond urban India is something across all circles.
 06 ThursDay, 9 February 2023
New Delhi CORPORATE LIVEMINT.COM

Sheela Foam looks to buy IT firms likely to let go of about 2,500

new hires who flunked screening tests
furniture rental Furlenco FROM PAGE 1

certain employees from the

have been met.
Akshara Bassi, an analyst for
global cloud and servers at
company,” it added. market researcher Counter-
Spokespeople for Infosys, point India, estimated
Tata Consultancy Services and increased aggression among IT
The enterprise value of the furniture rental startup is being pegged at ₹500 cr Tech Mahindra did not majors to manage costs leading
respond to Mint’s emails seek- to the trimming of the work-
ing clarification on the matter. force. “What we can expect is to
Sneha Shah A spokesperson for HCL Tech- see the bottom of the employee
sneha.shah@livemint.com nologies said the firm does not pyramid facing a greater threat
mumbai conduct screening tests after of holding on to their jobs. This
recruitment. is an indicator that there are

S
heela Foam Ltd is in advanced Industry experts expect the concerning headwinds in the
talks to acquire furniture rental screening tests to get more strin- coming quarters, even though
startup Furlenco, said three peo- gent. “There is pressure on firms Some industry experts said the downsizing resulted from firms the overall order execution
ple with knowledge of the devel- to honour the campus offers, and taking on more people than they needed during the pandemic. MINT pipeline is robust at the
opment, as the maker of the the cut-off marks of these screen- moment,” Bassi said.
Sleepwell brand of mattresses looks to ing tests are getting changed,” highly likely that such hiring track to meet the hiring targets TCS, Infosys, Wipro and
expand into newer business categories. said Harpreet Singh Saluja, presi- would have led to an unwitting given at the start of the year. HCL Tech are grappling with
“The enterprise value (equity and debt) dent of Nascent Information drop in standards, which man- However, the hiring pace for high employee costs, too,
of Furlenco is being pegged at ₹500 Technology Employees Senate, dates a natural demand for a new projects has significantly despite a decline in overall
crore,” one of the people said. which looks at employee griev- correction at some point in fallen over the past two headcount. Despite the
Furlenco, which counts Lightbox Ven- ances in the tech sector. time,” said Chirajeet Sengupta, months. Data from employ- sequential drop (56.2% in the
tures and Zinnia Global Fund among its Questions have also been partner, global technology ser- ment tracker Foundit (formerly September quarter to 55.1% in
backers, has been scouting for financial raised about the quality of cam- vices at consulting firm Everest Monster)’s January 2023 the December quarter), wage
investors for a while, the person added. pus recruits as India’s top IT Group. report, published on 8 Febru- costs as a share of revenue are
According to the second person, the firms rushed to fill positions Tata Consultancy Services, ary, said new jobs in IT services still higher than in the same
discussions are at an advanced stage, and amid a surge in digitization pro- Wipro, HCL Tech, Infosys and and business process outsour- quarter a year ago. However,
an announcement is likely soon “if all con- jects over the past two years. Tech Mahindra projected a cing (BPO) sectors fell for the Bassi added that while the jun-
ditions are met”. The person didn’t elabo- “Many of the major IT compa- combined hiring figure of second consecutive quarter, ior workforce does not add
rate on the conditions. nies faced excess demand in the 180,000 freshers for the year at with a 15% drop last month. much to the costs, the stricter
“For Sheela, the furniture rental cate- market due to a boost in digital the start of FY23. During the IT companies also said the screening “could essentially be
gory opens up a lot of new business possi- Furlenco has been scouting for financial investors for a while. But the company founder deals across sectors of clients, latest earnings season last pace of hiring is likely to slow a headcount consolidation
bilities,” the third person said. The com- and chief executive Ajith Mohan Karimpana has not responded on the matter. MINT which led them to hire aggres- month, all companies said they for the rest of FY23 since most exercise, rather than a major
pany has been looking at inorganic growth sively amid a war for talent. It is have either fulfilled or are on targets for the financial year move to save cost.”
opportunities in its core as well as non- presence in Bengaluru, Delhi/NCR, Sheela Foam listed in 2016. The company
core categories, the person added. Hyderabad, Chennai, Mumbai and Pune, has a market cap of ₹11,965.93 crore as of
All three spoke on condition of ano- among other cities. The offerings range closing on BSE on Wednesday. During the
nymity.

for Sheela Foam said, “We constantly keep

from furniture to appliances on a monthly, day, the stock rose 1.31% to close at
In an emailed response, a spokesperson half-yearly and full-yearly rental basis.
Meanwhile, Furlenco fired 180-200
₹1,226.45 apiece.
Media reports said last year that Sheela
Blackstone to sell $1 bn stake in IBS Software
evaluating businesses, and this is one such employees in March last year, citing Foam was looking to buy rival Kurlon Ltd
case. Nothing concrete.” Calls in a ₹2,000 crore deal. FROM PAGE 1 US, Canada, Japan, Australia, cial services sectors. focused on private equity, real
and messages to Ajith Mohan EXPLORING OPTIONS For the fiscal ended March and Dubai, according to its In November 2022, Black- estate, public debt and equity,
Karimpana, founder and chief 2022, Sheela Foam posted a tion of $2 billion. website. stone acquired life sciences, growth equity,
executive of Furlenco, went THE discussions are FURLENCO works in THE co’s offerings revenue of ₹2,124.44 crore It was looking to raise Blackstone has Founded in 1999 information tech- opportunistic, non-invest-
unanswered. at an advanced rental furniture and range from furniture and a profit after tax of ₹197.31 around $500 million at the made several by V.K. Mathews, nology services ment grade credit, and real
stage, and may be appliances market to appliances on
In 2021, the subscription- announced if all and is present across monthly, half-yearly crore. time, Bloomberg had reported other invest- IBS Software company R Sys- assets, according to its website.
based furniture rental startup conditions are met cities such as Delhi and yearly rentals In the September quarter, in June 2022. Since then, soft- ments across soft- reported global tems Interna- In India, Blackstone also
raised $140 million in a fund- the company reported a ware valuations have tem- ware technology tional, which pro- owns Essel Propack, Aadhar
revenues of
ing round led by Zinnia 30.5% drop in consolidated pered globally. services over the vides digital Housing Finance, edtech busi-
Global in a mix of debt and equity. In May restructuring. It has also outsourced key net profit from a year ago at ₹53.09 crore. Founded in 1999 by V.K. years. $145 million in product engi- ness Simplilearn, and PGP
2022, it raised yet another round of debt functions such as asset management and Consolidated net sales grew 8.1% to Mathews, IBS Software It has a major- fiscal year 2019 neering services, Glass (erstwhile Piramal
funding from the revenue-based financ- asset collection to third parties since then. ₹722.16 crore. Earnings before interest, reported global revenues of ity stake in Mpha- for $359 million. Glass).
ing platform, Klub, against future recur- It competes with companies such as Rent- taxes, depreciation and amortization $145 million in fiscal 2019. Its sis Ltd, which Blackstone has Separately, Blackstone is
ring revenue. omojo, Cityfurnish, Pepperfry, Rentickle, (Ebitda) stood at ₹100.79 crore in the latest global revenues could provides cloud and digital over $649 billion in assets also in talks to exit a part of its
Furlenco operates in the $5 billion rental and Bhadepay, among others. September quarter, a 21% decline from a not be ascertained. solutions to companies in under management and stake in Embassy REIT, Reu-
furniture and appliances market and has a One of India’s top mattress makers, year earlier. It also has a presence in the banking, insurance and finan- includes investment vehicles ters reported last month

‘Banks lend against fundamentals’ Reserve Bank hikes Total puts

Adani deal
FROM PAGE 1
repo rate to 6.5% PTI

“Individual cases and their

numbers, as you are aware, we on hold
affected by “an individual inci- do not discuss. Having said REUTERS
dent or a case like this”. He said that, let me mention in addition FROM PAGE 1 FROM PAGE 1
that questions regarding bank because so many questions are
exposure are being asked because being raised,” Das said. the possibility of further rate is still down 46% to ₹10.41 tril-
of the changes in the group’s mar- Das then pointed out some hikes if inflation exceeds its lion from the levels before the
ket capitalization, but banks give regulatory measures of RBI projections. “We expect the Hindenburg report was pub-
loans against other metrics. that he said have strengthened monetary policy committee to lished.
India imported 80,50,731 metric tonnes (mt) of palm oil during “When banks lend money to a the resilience of the banking remain vigilant and data-de- Shares of Adani Enterprises
FY22, compared to 85,91,302 mt in 2019-20. REUTERS company or to a group of com- system. “We have issued guide- pendent in FY24,” she said. gained almost 20% to close at
panies, they do not lend on the lines about the functioning of Assuming an average price of ₹2,158.65 on Wednesday, fol-

Indonesian curbs basis of the market cap of that

company; they do it on the basis
of the strength of the company,
RBI governor Shaktikanta Das.
the audit committees; we have
issued guidelines for the func-
tioning of the risk management
$95 per barrel for crude oil, the
MPC expects CPI inflation to
average 5.3% next financial year.
lowed by Adani Ports, which
gained 8% to close at ₹599.45 a
share.

on palm oil stokes the fundamentals of that com-

pany...,” he said, adding that
credit appraisal methods of
closures, India’s top three state-
owned banks have an aggregate
committees; we have now
made it mandatory for appoint-
ment of chief risk officers; and
“We need to see a decisive
moderation in inflation. We
have to remain unwavering in
MPC expects CPI inflation to
average 5.3% next fiscal year
The stocks saw investors
returning, reflecting in the
delivery to traded volumes,
Indian banks have significantly exposure of close to ₹40,000 have also made it mandatory our commitment to bringing data-dependent, and this does which was higher than both the
inflation worries improved over the years.
Asked if banks should set
aside more funds to cover
crore to the group. This is 0.8%
of the aggregate gross advances
of these three banks. Banks and
for appointment of chief com-
pliance officers,” he said.
RBI, he said, has also given the
down inflation. Thus, mone-
tary policy has to be tailored to
ensuring a durable disinflation
not rule out another rate hike in
the upcoming policy. Even as
headline inflation is likely to
one- and three-month average.
Adani Wilmar reported 16%
growth in its December quarter
FROM PAGE 1 not expecting much increase in potential loan losses to Adani the regulator have asserted that desired level of autonomy to the process,” Das said. moderate in the coming months, consolidated net profit to
prices, but this kind of disrup- Group, Das said that during there were no concerns ema- chief risk officer and the chief India’s economic activity is core inflation could remain ₹246.2 crore in the December
ers’ protest, he said. tion causes a physiological covid, most banks built up their nating from their loans and compliance officer with regard seen holding up well despite the sticky—and if RBI chooses to quarter, on revenue of ₹15,438
“Indonesia cannot afford to impact in the market, which capital and are well-capitalized. bank guarantees to the embat- to their functioning within the interest rate increases. For the continue seeing signs of durable crore.
lose the confidence of importers. causes price rise,” Sahai added. “They are prudent. Bank man- tled group, which has seen its bank. “We have also rational- year starting 1 April, the monetary moderation in core inflation as a Adani Power, which
I don’t think they will curb exports “This is a temporary measure agements will decide whenever stock value plunge and later ized, in the last two years, the panel projected real GDP to grow yardstick for policy tightening, declared its quarterly numbers
for a long time,” Mehta added. on the part of Indonesia to cool they feel there is a need for addi- recover after a US-based short large exposure norms, and all at 6.4%. It expects first-quarter another 25bps rate increase in after the closing of market,
India’s import bill doubled to down palm oil prices. Indone- tional provisions,” Das said. seller, Hindenburg Research, that I would like to add at this GDP growth at 7.8% and second- April could be likely. We think reported a 96% drop in net
$10 billion in FY22 from $5 bil- sia produces a huge quantity of Domestic banks have an accused the group of stock point in time is that the Indian quarter at 6.2%. GDP growth in that a change in stance to neutral profit to ₹8.77 crore due to a
lion in FY20, owing to supply palm oil. The impact will be exposure of $9 billion (over manipulation and accounting banking sector, including the the third quarter is seen at 6%, is unlikely until the RBI pauses higher tax expense of ₹194
chain disruptions and high limited in the long term. It’s ₹74,000 crore) to Adani Group fraud. Adani Group has denied NBFC sector, continues to be and 5.8% in the fourth quarter. its rate hike cycle,” HDFC Bank crore against tax credits of ₹13
commodity prices. India done keeping Ramzan in mind companies, and, based on dis- these allegations. resilient and strong,” he said. “RBI is likely to become more said in a research note. crore in the year earlier.
imported 80,50,731 metric and, therefore, should not last
tonnes (mt) of palm oil during for over two months,” D.N.
FY22, compared to 85,91,302 Pathak, executive director of
mt in 2019-20. the Soybean Oil Processors
“Since Indonesia is one of the Association (SOPA) of India.
major suppliers of palm oil, any Last year’s ban boosted prices
Microsoft unveils Bing search engine using OpenAI tech
disruption on the supply side everywhere, Pathak said, adding
with the demand remaining the global prices were at a record FROM PAGE 1 game tools. with Microsoft. “We’re so the format for search results —
same is definitely high following the The new Bing search query grateful to have a partner to a list of links — remains.
going to have an India’s import bill Ukraine war. Soya text, photos and art. Last week box can accept up to 1,000 char- share our vision and values of ChatGPT and other generative
impact, though it doubled to $10 bn in bean oil prices Microsoft unveiled a customer- acters. In a demonstration, Mic- building advanced AI that is AI search products aim to change
may not be imme- FY22 from $5 bn in were $2,000/mt, management program that uses rosoft vice president Yusuf safe and will have a very posi- that, replacing links that may or
diately because we FY20, owing to but it is signifi- OpenAI text-generation tools to Mehdi asked the chat-based tive impact on society,” he said. may not address a user’s query
may have the cantly lower at compose emails for salespeople, engine about events in Scotts- Alphabet Inc.’s Google, with a conversational, contextual
supply chain
inventory. But if $1,300/mt. Palm and jazzed up the premium tier of dale, Arizona, during this week- whose search answer. The risks
the trend contin- disruptions and high oil prices were its Teams chat and meeting soft- end’s Super Bowl. The new Bing engine has almost Microsoft said the to this burgeoning
ues, then, of commodity prices quoting $8,000/ ware with AI-written post-meeting returned information about a 90% of the mar- approach are that
new version of
course, it is bound mt, it has cooled notes. Super Bowl week party, a culi- ket, uses AI but Bing is available inaccuracies or
to increase prices,” down since then to Microsoft recently nary event and other related hap- relies on an older now as a preview, misinformation
Ajay Sahai, director general and nearly half, he stated. “Palm oil announced a multibillion-dol- penings. The souped-up service language model.
which means users can seep into
CEO of the Federation of Indian cannot be stored for long. lar investment in OpenAI, can also estimate whether an From a competi- responses, and —
Exports Organisation. Besides, the fundamentals will solidifying ties with the startup Ikea love seat will fit in a 2019 Yusuf Mehdi, Microsoft corporate vice president of modern life, tive standpoint, can try a limited depending on how
“So, the crucial question is work according to global supply to get the inside track on its Honda Odyssey—Bing told search, and devices, in Redmond, Washington. AFP Google’s longtime number of queries results are pre-
how long this kind of restric- and demand. And the global sup- artificial intelligence models Mehdi it wasn’t sure, and it dominance has sented — users may
tion will continue. But it had ply of edible oils is adequate. like ChatGPT and Dall-E, depends on whether the second each substitute, like which will the company hopes to expand meant the market not be able to tell
removed it in a short duration Soya bean is going to come from which have attracted millions and third row of the vehicle are make the recipe fluffier. to millions in the coming has grown stodgy, with the the source or veracity of informa-
as it is one of their principal Argentina and Brazil in the next of users in just months. Beyond folded down. Microsoft said the new ver- weeks, Mehdi said. It also 14-year-old Bing and other tion that the service has given as a
items of export. And with an three months. A huge crop will search, Microsoft executives Asked for an egg substitute sion of Bing is available now as intends to bring the AI search upstarts unable to make signifi- definitive answer.
otherwise slowdown in be coming from 30 mt of extra have said they want to add in recipes, Bing offered several a preview, which means users features to rival web browsers. cant inroads. While parts of the In recent months, Google’s
exports, each country would soyabeans being grown in Brazil. OpenAI’s technology into choices and the measurements can try a limited number of OpenAI CEO Sam Altman basic page design and features once-vaunted AI unit has lost
like to have as many dollars as So, the supply position has to be Office productivity software, of each that equals one egg. It queries. People can also join a appeared at the event to tout from the main players have momentum and lately has been
possible. At the moment, I am taken in totality,” Pathak added. security programs and video- also discussed the properties of waitlist for full access, which the company’s partnership been tweaked over the years, overshadowed by OpenAI.
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 LIVEMINT.COM CORPORATE ThuRsDay, 9 FebRuaRy 2023
New Delhi 07

‘Levi Strauss allocating more HINT OF HAWKISHNESS IN RBI’S

TONE ON FUTURE ACTIONS
dollars towards Asia in 2023’ EXPERT
Balancing inflation
RBI’s CPI inflation estimate for FY24 stands at 5.3%.
Suneera Tandon are driving momentum. In 2023, we CPI inflation Real GDP growth RBI projections (in%)

suneera.t@htlive.com are allocating a few more dollars VIEW 8

NEW DELHI towards Asia, such as the growing mar- 6

kets like India, besides Latin America. R S i va k u m a R

C
4
onsumer preference for In China, it’s still a little early. Our busi-
casual and active wear like ness in China is about 3% of our total Respond to this column at 2
sweatpants during covid revenues, and the lockdowns there feedback@livemint.com
0
lockdowns had prompted have just been lifted. We are watching Q1 Q2 Q3 Q4 FY24
Source: RBI figures

A
clothing brands to step up if the trend sustains, and if it does, then fter a pro-growth and fiscally conscious
efforts to align their product ranges to we will allocate resources appropri- budget, the Reserve Bank of India (RBI) SATISH KUMAR/MINT

meet new demand. American apparel ately. has backed the government with a mar- term. Those with investment horizons of above
maker Levi Strauss & Co. also firmed up On ground, what does it mean for a ket consensus policy announcement. The mon- three years, incremental allocations to duration
a strategy to target the youth, and hired market like India? etary policy committee on Wednesday decided may offer significant risk reward opportunities.
actor Deepika Padukone as the brand’s It basically means a couple of things: to raise policy rates by 25 basis points, in line Those with short-term horizons (six months to
global ambassador and acquired Ameri- One, India is an exporter of talent, so we with market expectations. According to gover- two years) money market strategies continue to
can athleisure brand Beyond Yoga in might invest in talent. We have taken nor Shaktikanta Das, the RBI has three simulta- remain attractive, offering competitive ‘carry’
2021. Known for its denims, the company folks overseas from India, not only in the neous targets—to keep inflation expectations and low volatility.
reported $6.2 billion net revenues in US, but in other parts of the world: for anchored; break core inflation persistence; and The policy caps a busy week for debt market
2022. In an interview, Harmit Singh, the general management, finance, mer- contain the second-order effects of inflation. participants as it digests the budget, the US Fed
brand’s San Francisco-based chief finan- chandising, marketing and operations. The governor said the global economic out- and other central bank actions. Going forward,
cial and growth officer responsible for In terms of investments, they will help look improved from a few months ago. Growth markets should operate with normalcy. Market
driving corporate strategy and global grow our direct-to-consumer business, prospects improved in major economies. While reaction may react to the possibility of further
retail real estate, said its flagship Levi’s which is both stores and e-commerce. inflation is on a descent, it is well above the tar- reduction of system
operates 400 stores and is set to acceler- really driving trends these days is the Are consumers in Asia and India India is largely a franchised business, but get in major economies. Uncertainties and risks Growth may liquidity driven by
ate marketing efforts. For FY22, it had looser and baggier fit. It has really taken more resilient to price hikes? we opened a few doors like in the Mall of in the external sector warrant a keen eye from a trend slightly redemption of LTRO
posted income of ₹1,153 crore in India off in time just before the pandemic. Peo- Our view is that consumers are a lot India (Noida). Then for campaigns, we policy standpoint. RBI reviewed its estimates & T-LTRO securities
while profit was up 41% to ₹50 crore. The ple want to dress more comfortably. more resilient in the eastern part of the are in season-2 of the Deepika Padukone for inflation and growth. While inflation, espe- below RBI due in February and
company plans to achieve $9-10 billion in With a hybrid way of working, the work- world. But in the West, inflation is campaign. We had some collaborations cially core inflation, remains elevated, RBI has projections due April. The curve has
revenue by FY27, he said. Edited excerpts: place is becoming a lot more casual. higher than they have ever seen, with music-fest Lollapalooza. Levi’s is in built in some degree of buffer, estimating crude to lingering moved higher by 5-7

‘
The company’s fourth quarter Where does India rank? Is infla- besides the impact of high energy the centre of culture, and music plays prices for the year at $95/barrel. Currently, the pressures bps.We believe RBI is
earnings beat street expectations. tion eroding consumer demand? bills at home. We may a big role. We’re look- India crude basket hovers at $83/barrel. Despite focused on bringing
Could you elaborate on it? We’re not seeing it. Globally, consum- witness a tale of two ing at things like that the optimism, the governor’s words should be down inflation and
Our Q4 results were at the high-end of ers are aware of the price-value equa- halves in 2023—the What’s really driving for growth. read closely: “We need to see a decisive modera- even remains cautious of markets getting over-
our guidance—both rev- tion. Due to inflation, we first half probably a lit- trends these days is the Will investments in tion in inflation. We have to remain unwavering optimistic. While our call for lower inflation for
enue and profit. We grew m INTERVIEW took price hikes globally tle weaker than the looser, baggier fit that India be high? in our commitment to bring down inflation. the next year stands, our call to action on portfo-
12% when the category in 2021 and 2022. We second half; and a tale We do not give Thus, monetary policy has to be tailored to lios will be driven by high-frequency data and
grew about 1%, as look at the price-value of two worlds—the has really taken off.... numbers by market. ensure a durable disinflation process.” the actual inflation prints as they are released.
reported by Euromonitor. For the fifth equation and we are not seeing it actu- West (Europe and US) People want to dress What I would say is The line, along with the conservatism on gui- Growth may trend slightly below RBI projec-
year in six years, we continued to grow ally diluting even with higher pricing, showing single-digit more comfortably that we are stepping dance for both GDP and inflation, indicates a tions due to lingering pressures from the base
market share. And in the last two years, which really means that the products growth while eastern up. Our view is India is hint of hawkishness in the tone of future policy effect and external factors, but we remain con-
Harmit Singh
our market share growth has been the we’re offering are hitting home in terms world grows in high CFO, Levi Strauss & Co a big market for us, we actions. On the positive side, with the rate hike structive from a medium-term perspective, as
highest among peers. Our Asia business, of trends, both with him and her, and the single or low double are a market leader, and inflation estimates, RBI has finally achieved the overall Indian economy is backed by domes-
including India, grew 17% (during the trend is very similar in India. As we think digits. and we have to see real positive rates in India, which is good news tic spending and government capex. While we
three months ended 27 November); about 2023, there’s going to be some So, will the company’s focus on how we accelerate the investments. for savers in India’s debt markets. Basis policy believe we are at the peak of policy rates, infla-
Latin America business was up double- price increases in Asia, but very little of it Asia intensify? Amisha (Jain, managing director and rates at 6.50% and RBI’s CPI inflation estimate tion and the US Fed action can be wild cards for
digit. As you think about channels, we are in the West. In the western world, we’re A large part of my job is about allo- SVP, South Asia-Middle East & Africa) for FY24 at 5.3%, real positive rate now stands at market participants.
putting a lot more effort into growing our seeing the value-conscious consumer, cating resources (along) with the CEO, is now on board for a couple of months, 120bps.The current yield curve presents oppor- R Sivakumar, Head Fixed Income, Axis Mutual
direct-to-consumer business. What’s really tightening their spending. and executive team to fuel things that and she’s working on her strategy. tunities for investors in the short-to-medium Fund

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Keisuke Sadamori MK Jain Dr Niranjan Hiranandani
Mahua Moitra IEA’s director of energy RBI Deputy Governor @N_Hiranandani
TMC MP markets and security Our domestic banks’ expo- MD, Hiranandani Group
The pride of India is not China will be consum- sure is against the underly- Economic resilience is
the wealth of one indi- ing more electricity ing assets, the operating reflected with improved
vidual, pride of India than the European cash flows and the pro- capex, enhanced capacity
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its institutional struc- States and India com- tion. And not based on urban+rural demand,invest-
tures bined. market capitalization ments boost & jobs creation...

NHPC net profit AERIAL DISPLAY Shree Cements Q3

falls 12.6% in Q3 profit dips 44%

S S
tate-owned hydro power giant NHPC hree Cement Ltd reported a 43.7% fall in
(National Hydroelectric Power third-quarter profit on Wednesday,
Corporation) has posted a 12.59% decline missing expectations, as persistently high
in its consolidated net profit to ₹775.99 crore input and fuel costs triggered by the Russia-
for the December 2022 quarter, mainly due to Ukraine war weighed on the cement sector.
higher expenses. The Kolkata-based company posted a
The consolidated net profit of the company standalone profit of ₹277 crore ($33.5 million)
was ₹887.76 crore in the quarter ended for the quarter ended 31 December, compared
December 2021, showed a BSE filing on with ₹492 crore a year earlier.
Tuesday.Its total income rose to ₹2,691.34 Analysts, on average, had expected a profit of
crore in the quarter from ₹2,373.72 crore ₹322 crore, according to Refinitiv IBES data.
a year ago. Total expenses rose 26.8% to ₹3,846 crore,
Expenses increased to ₹1,303.06 crore from amid a surge in global oil prices.
₹1,259.28 crore in the corresponding period Even though prices of key fuel components
last year. such as petroleum coke and coal slightly
The board of the company has also cooled-off in the third quarter, prices remained
announced the interim dividend at the rate of elevated.
14% (₹1.40 per equity share) on the face value of Marginal cement price hikes, largely led by
paid-up equity shares of ₹10 each for the the eastern region of the country, failed to
financial year 2022-23. PTI offset the surge. REUTERS

An Indian Air Force’s Sukhoi aircraft takes off during rehearsals for the upcoming Aero India-2023 air show, at Yelahanka airbase in Bengaluru on
Wednesday. The five-day air show is scheduled to start from 13 February. PTI

Six tonnes of relief materials handed over to

Modi hits out at oppn for ‘wild Continuous increase in interest rates will dampen
borrowing sentiment, say experts. ISTOCK
earthquake-hit Syria

India sends relief

PTI

allegations’, silent on Adani Realtors see rise in

home loan rates
materials to Syria
T
he Reserve Bank of India’s decision to

I
ndia on Wednesday handed over six tonnes
of relief materials, including essential
medicines and medical equipment, to
earthquake-hit Syria. The consignments were
sent on a C-130J military transport aircraft on
Tuesday night and were handed over to the
Syrian authorities by India’s Charge’d Affaires
S K Yadav this morning. India has already sent
hike repo rate by 25 basis points will
Rahul Gandhi earlier alleged links between PM’s foreign visits and Adani’s global gains result in an increase in interest rates on
home loans and may impact demand for
affordable and lower mid-income housing
HT Correspondent Lower House. mentary committee probe. “I am not satisfied segments, according to property developers
feedback@livemint.com He hailed his government for working through with the PM’s speech. However, it has revealed and consultants. However, many industry
NEw DElhI difficult times, ensuring basic amenities, boosting the truth. His speech had nothing about an experts said strong demand momentum in the
the economy, and ensuring covid-19 vaccination, inquiry,” Gandhi said outside Parliament. residential segment would remain intact while

T
to Turkiye relief materials, a mobile hospital
and specialized search and rescue teams in four
C-17 Globemaster military transport aircraft on
Tuesday to support the country’s rescue efforts
following the massive earthquake that has
killed thousands of people.
In the wake of tragic earthquake that struck
North-Western Syria on 6 February, causing
massive destruction and loss of precious lives,
the government of India has despatched six
tonnes of emergency relief assistance through
a special aircraft of the Indian Air Force to
Syria, the ministry of external affairs (MEA)
said. It said the consignments were handed
over by Yadav to the deputy minister of local
administration and environment of Syria
Moutaz Douaji at Damascus airport. PTI
he blessings of India’s 1.4 billion people
who experienced basic services for the
first time under this government is an
armour that baseless allegations by the
Opposition cannot pierce, Prime Min-
ister Narendra Modi said on Wednesday in Parlia-
ment, responding to a political storm over allega-
tions of fraud levelled at the Adani Group.
In his reply to the motion of thanks to the Presi-
dent’s address in the Lok Sabha, Modi hit out at
what he called dispirited leaders who had
thwarted India from achieving its potential and
challenged the Opposition to convince millions
of beneficiaries of his social welfare programmes
with their “wild allegations” and “dirty abuses”,
“The blessings of 140 crore Indians are my
suraksha kavach,” he said to applause in the
and said that the Indian society rewarded positiv- In his speech, Modi said the Opposition was in some said there would not be much impact.
ity, not negativity. But he didn’t mention any denial that they could succeed by only abusing Commenting on the RBI policy, realtors’
opposition parties the PM. “The faith in apex body Credai National President Harsh
or the Adani Group, Modi is not due to Vardhan Patodia said the continuous increase
which lost north of Modi said in his speech that the newspaper head- in interest rates will dampen the sentiment of
$100 billion in mar- Opposition was in denial that they lines or television borrowing for individuals and businesses alike.
ket value after an images. It is because NAREDCO National vice chairman Niranjan
American firm could succeed by only abusing I have spent my life, Hiranandani said, “The outrageous hike of 250
accused it of fraud the Prime Minister every moment, for basis point since May 2021 needs to be
and manipulation. the people of the warranted before it turns negative for the
The PM was country, for its ascending Indian economic growth curve.” PTI
speaking a day after Congress leader Rahul Gan- bright future,” he said, to chants of Modi Modi by
dhi alleged links between official foreign visits the treasury benches.
and the Adani Group’s global gains, accusing the During his speech, the Bharat Rashtra Samithi
government of bending the rules to benefit the walked out. Opposition leaders demanded he
embattled tycoon. A number of other opposition speak about Adani even as the Congress walked
GVK clarifies on
parties supported him, demanding a joint parlia- out briefly.
Mum airport sale

B
usiness conglomerate GVK Group on
Comments sought Wednesday categorically said there was
Nomura discloses Adani exposure no “extraneous pressure” from anyone to
on HVDLE norms sell its stake in the Mumbai airport as alleged by
Congress leader Rahul Gandhi in the Lok Sabha.
management arm released details on GVK reiterates that the decision to sell its stakes

T
he Securities and Exchange Board of India
on Wednesday floated a consultation
paper seeking comments on review of
corporate governance norms for a high value
debt listed entity (HVDLE). The public
comments have been sought till 22 February.
This comes as Sebi received representations
made by HVDLEs seeking exemption requests
with certain listing obligations and disclosure
requirements (LODR) regulations. Essentially,
HVDLEs are listed companies which have listed
their non-convertible debt securities (NCDs)
with an outstanding value of ₹500 crore and
above. According to the regulator, the LODR
regulations further states that in case an entity
Nomura’s AMC released details on 30 of its
publicly offered investment trusts BLOOMBERG
Tuesday about 30 of its publicly offered
investment trusts that hold either stocks
or bonds of Adani companies. The move
followed similar steps last week by units of
Sumitomo Mitsui Financial Group Inc.
and Mizuho Financial Group Inc.
“We have judged it necessary to
provide information this time because
volatility in the share and bond prices of
the Adani group hasn’t fallen,” Nomura
Asset Management Co. said in an emailed
response to Bloomberg queries.
A rout sparked by market manipulation
claims wiped out more than $100 billion
of the Adani group’s value before a rally in
We think we’re 30%-40% there, said Ola’s chief
financial officer GR Arun Kumar.
Ola says on track
in Mumbai Airport to Adani, “was taken by the
management and there was absolutely no
question of any extraneous pressure being
exerted on us,” GVK Group spokesperson said.
Adani Group, which is currently in the eye of a
storm over the recent report by short-seller
Hindenburg Research related to its company’s
business dealings, took over the management of
the Mumbai airport from GVK Group in July
2021. While explaining the circumstances that
led to the sale of the airport, GVK Group vice
MINT chairman Sanjay Reddy told a TV channel that it
was looking to raise funds for the airport
business. PTI

T for first car in 2024

triggers the specified threshold of ₹500 crore
during the course of the year, it must ensure
compliance with the provisions of corporate
governance norms within 6 months from the
date of such trigger. The provisions were made
applicable on a ‘comply or explain’ basis until 31
March 2023 and on a mandatory basis
he turmoil in Gautam Adani’s
empire is spilling over to Japan,
where major asset managers are
stepping up disclosure over mutual funds
with exposure to the group in response to
jittery investors.
Nomura Holdings Inc.’s asset
stock prices on Tuesday. Concerns had
grown over the conglomerate’s access to
funding since US-based Hindenburg
CSC partners with
E
Research released a report in late January lectric-scooter maker Ola Electric Mobility
alleging market rigging and accounting
fraud — claims Adani has repeatedly
Pvt. is on track to deliver its first four-wheel
vehicle in the second half of 2024, according October Cinemas
denied. BLOOMBERG to chief financial officer GR Arun Kumar. The

thereafter. PRIYANKA GAWANDE manufacturer and ride-hailing company is
focused on advanced stages of design and
benefiting from the sharing of some technology
deployed in its two-wheeler products, Kumar said
Celebrate ‘Cow Hug Day’ on 14 Feb: Animal Welfare Board in an interview in Bengaluru on Wednesday.
“Software, safety systems, electronics, cells,
the drive train — a lot of it is common,” Kumar
C
ommon Service Centres (CSC), the
physical facilities for delivering
Government of India e-Services to rural
and remote locations, has tied up with a firm
called October Cinemas to meet an ambitious
target of opening 10,000 movie screens over the
next five years. The latter will coordinate with

T
he Animal Welfare Board of India has issued a notice appealing to
people to celebrate “Cow Hug Day” on 14 February to spread “positive
energy” and encourage “collective happiness”, officials said on
Wednesday. Valentine’s Day is celebrated on 14 February every year.
“All cow lovers may celebrate 14 February as Cow Hug Day keeping in mind
the importance of mother cow and make life happy and full of positive
energy,” read the notice issued by the board under the department of animal
husbandry and dairying.
The notice further said hugging cows will bring “emotional richness” and
increase “individual and collective happiness”.
It also mentioned that Vedic traditions are almost on the “verge of
extinction” due to the “progress of West culture” and that the “dazzle of
western civilisation has made our physical culture and heritage almost
forgotten”. The notice has been issued with approval of the competent
authority, the officials said. PTI
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The notice said hugging cows will bring “emotional richness” and
increase “individual and collective happiness.
said on the sidelines of the India Energy Week
forum. “We think we’re 30%-40% there.”
Last year, Ola’s founder Bhavish Aggarwal
said the company aimed to price its first car at
less than $50,000, manufacturing
components such as lithium-ion cells and
batteries in-house to lower costs. Ola aims to
compete with the likes of Tesla Inc., Hyundai
Motor Co. and local rivals such as Tata Group
in India’s EV market, which consultancy RBSA
Advisors forecasts to be worth more than $150
billion by 2030. Kumar said Ola is also making
progress on its target to deliver an eventual 100
gigawatt hours of battery-cell manufacturing
ISTOCK capacity by adding local plants. BLOOMBERG
village level entrepreneurs to build movie
theatres with seating capacity of 75-150 in small
towns and provide them low-cost projectors
besides acting as distributors of films. These
theatres, developed as community centres, for
other occasions such as weddings and birthdays,
will sell tickets starting at ₹50 and will serve as
spaces for family entertainment. In the first
phase, markets in the north east, UP, Bihar and
Rajasthan are being targeted. Punit Desai
managing director, October Cinemas said, the
company is considering villages with population
between 50,000 and 1,00,000 and is in the
process of shortlisting 500 locations, which
should see openings within this year. LATA JHA
 LIVEMINT.COM
m MINT SHORTS
High freight prices lift Maersk to
Death toll tops 11,700
record profit in 2022
Global shipping giant Maersk reported its biggest ever full-year
profit in 2022, amid soaring freight prices and easing bottlenecks
following the covid-19 pandemic. Maersk posted a net profit of
in Turkey-Syria quake
$29.2 billion, the highest earnings ever reported by a Danish
company. Sales rose by 32% to $81.5 billion. AFP
Officials, medics said 9,057 people had died in Turkey and 2,662 in Syria
Apple expands testing of ‘buy
now, pay later’ service AFP
REUTERS
feedback@livemint.com
AnTAkyA, Turkey
S
earchers were still pulling survi-
vors on Wednesday from the
rubble of the earthquake that
killed over 11,700 people in Tur-
key and Syria, even as the win-
dow for rescues narrowed.
For two days and nights since the 7.8
magnitude quake, thousands of searchers
have worked in freezing temperatures to
find those still alive under flattened build-
Apple Inc. has expanded an internal test of its upcoming ings on either side of the border.
“buy now, pay later” service to the company’s thousands of Turkish Red Crescent chief Kerem
retail employees, a sign the long-awaited feature is finally Kinik had warned that the first 72 hours
nearing a public release. The tech giant contacted retail were critical in search and rescue efforts
staffers this week to offer them a test version of the service, but pointed to complications of “severe
according to Apple workers who asked not to be identified. weather conditions”.
The offering, called Apple Pay Later, lets shoppers split the Emergency workers on Wednesday
payment for purchases into instalments. BLOOMBERG saved some children found under a col-
lapsed building in the hard-hit Turkish
province of Hatay, where whole stretches
TotalEnergies posts record net of towns have been levelled.
“All of a sudden we heard voices and
profit of $20.5 billion in 2022 thanks to the excavator... immediately we
France’s TotalEnergies said Wednesday that high oil and gas pri- heard the voices of three people at the
ces bolstered its net profit to a record $20.5 billion in 2022 and same time,” said rescuer Alperen Cetink-
announced higher dividend payments for shareholders. The 28% aya.
gain would have been much higher save for the nearly $15 billion “We are expecting more of them... the
in charges linked to its leaving the Russian market, with adjusted
chances of getting people out of here alive
profits excluding such exceptional items rising to $36.2 billion. are very high,” he added.
Nevertheless, the surge in oil and natural gas prices following Officials and medics said 9,057 people
Russia’s invasion of Ukraine and Western sanctions was a major had died in Turkey and 2,662 in Syria
boost for TotalEnergies, as it was for its rivals. AFP from Monday’s 7.8-magnitude tremor,
bringing the total to 11,719 — but that could
yet double if the worst fears of experts are
China’s oil mkt makes comeback realised.
The World Health Organization (WHO)
on covid zero exit and exports chief Tedros Adhanom Ghebreyesus has
China’s oil market is making a comeback after a torrid year, warned that time is running out for the
driven by rising consumption at home and abroad that could help thousands injured and those still feared
lift global prices and deliver a big payoff for its embattled refining trapped.
sector. The stars are aligning after the government’s abrupt end Due to the scale of the damage and the
to growth-sapping covid zero restrictions was followed by a burst lack of help coming to certain areas, survi-
of travel during the Lunar New Year break. At the same time, the vors said they felt alone in responding to
war in Ukraine is lifting overseas demand for oil products, with the disaster.
Chinese firms poised to benefit from Beijing’s generosity with “Even the buildings that haven’t col-
export quotas. BLOOMBERG lapsed, were severely damaged. There are
Introducing News in Numbers
Exclusively on the Mint App
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GLOBAL ThursDay, 9 February 2023
New Delhi 09
Zoom Video to cut
1,300 jobs, 15% of
global workforce
Bloomberg
feedback@livemint.com
Z
oom Video Communi-
cations Inc. is eliminat-
ing 15% of its workers as
the service that became ubiq-
uitous during the pandemic
adapts to slower growth.
The company will cut about
1,300 jobs as part of a restruc-
turing, chief executive officer
Eric Yuan said on Tuesday in a
blog post. Yuan called himself
“accountable” for the com- The cuts are likely a bid to
pany’s issues. improve margins. AFP
“Our trajectory was forever
changed during the pan- digit revenue increases for the
demic,” Yuan said, adding that last two quarters, and analysts
Zoom headcount tripled in project that sales have contin-
two years. “We didn’t take as ued to decelerate in the cur-
much time as we should have rent quarter. The cuts are
to thoroughly analyse our likely a bid to preserve or
teams or assess if we were improve margins in the face of
growing sustainably.” slowing growth, wrote Bloom-
The reductions are a bigger berg Intelligence analyst John
share of the workforce than Butler.
cuts announced at enterprise Competition from Micro-
Thousands of searchers have worked in freezing temperatures to find those still alive. AP software companies including soft’s Teams collaboration ser-
Salesforce Inc., Microsoft vice has also become more of a
now more people under the rubble than in a race against time,” he told AFP from Corp. and Workday Inc. The concern for Zoom in recent
those above it,” a resident named Hassan, neighbouring Turkey. shares gained quarters, accord-
who did not provide his full name, said in The issue of aid to Syria was a delicate 9.9% to close at Competition from ing to industry
the rebel-held town of Jindayris. one, and the sanctioned government in $84.66 in New Microsoft’s Teams analysts. In an
“There are around 400-500 people Damascus made an official plea to the EU York, the biggest collaboration interview with
trapped under each collapsed building, for help, the bloc’s commissioner for crisis single-day jump service has also Bloomberg last
with only 10 people trying to pull them management Janez Lenarcic said. in three months. month, President
become more of a G r e g T o m b
out. And there is no machinery,” he added. A decade of civil war and Syrian-Rus- Despite Tues-
The White Helmets lead- sian aerial bombardment had day’s rise, the concern for Zoom acknowledged
ing efforts to rescue people The WHO chief already destroyed hospitals, stock has plum- in recent quarters the competition,
buried under rubble in rebel- Tedros Adhanom collapsed the economy and meted 85% from but said compa-
held areas of Syria have Ghebreyesus has prompted electricity, fuel an all-time high nies using Zoom
appealed for international warned that time and water shortages. in October 2020 and is now at rarely quit the platform. Tomb
help in their “race against The European Commis- pre-pandemic levels. added the company’s biggest
is running out for
time”. They have been toiling
the thousands
sion is “encouraging” EU While people and busi- opportunity is getting existing
since the quake to pull survi- member countries to nesses continue to rely on customers using the rest of its
vors out from under the injured respond to Syria’s request for Zoom in post-pandemic life, portfolio, which includes tools
debris of dozens of flattened medical supplies and food, the “uncertainty of the global such as the Zoom phone ser-
buildings in northwestern while monitoring to ensure economy” is affecting custom- vice.
areas of war-torn Syria that remain out- that any aid “is not diverted” by President ers, Yuan said. After gaining Yuan, the founder of the San
side the government’s control. Bashar al-Assad’s government, Lenarcic millions of users at the height Jose, California-based com-
“International rescue teams must come noted. of the pandemic, Zoom is now pany, said his base salary,
into our region,” said Mohammed Shibli, In parts of quake-hit Turkey, shops trying to reverse slowing which was $301,731 last year,
a spokesperson for the group known for- were closed, there was no heat because gas growth by expanding its tools will be cut 98% and he will give
mally as the Syria Civil Defence. lines have been cut to avoid explosions, for business. up a corporate bonus for the
“People are dying every second; we are and finding petrol was tough. Still, it has reported single- current fiscal year.
Download
Now
 10 ThursDay, 9 February 2023
New Delhi LONG STORY LIVEMINT.COM

rEpOrTagE | TalkIng pOInTS | IDEaS | InSIgHT | THE bOTTOm lInE

OLA ELECTRIC TAKES OFF,

agaInST THE ODDS
The EV firm is now the largest player in the electric two-wheeler industry. But the stakes are getting higher as well

Sumant Banerji
mint
sumant.banerji@livemint.com
SHORT
NeW DelHi STORY

F
or 21-year-old Arpan Rai of Chan-
dausi, a city in Uttar Pradesh, the WHAT
penny dropped after about an hour
at the biennial Auto Expo he visited Defying pundits, Ola ended 2022
in January. At the motor show, as the largest player in the fast-
held in Greater Noida, Ola Electric Tech- growing electric two-wheeler
nologies Pvt Ltd didn’t have a pavilion. industry—the company sold
A second year BTech student, this was over 100,000 vehicles, ahead of
the first Expo Rai had ever been to. “I was Hero Electric, Okinawa and TVS.
hoping to check out Ola’s electric scooter
from a close proximity and maybe even
catch a glimpse of their car,” he said. “If I NOW
had known they were not participating, I
would not have come.” Ola has bigger plans. In 2023-24,
Rai’s disappointment packs mixed mes- the company will venture
sages for the two-year-old electric vehicle into electric motorcycles
(EV) company that seeks to not just dis- and is hoping to disrupt the
rupt but also revolutionize the domestic market. It also has plans
automotive industry. While it highlights to launch a car.
how Ola has captured the imagination of
people like Rai, who represent the con-
sumers of tomorrow, it also underlines the BUT
brand’s lack of accessibility. Unlike other
automotive firms, Ola does not have the The current EV market is nascent
hub and spoke dealer and service centres. with quick shifts in market
Every transaction is online and the scoot- shares, experts held. The
ers are delivered direct-to-home. competition will heat up with
What Ola Electric’s founder Bhavish more products expected from
Aggarwal is trying in India is similar to the traditional auto companies.
what Elon Musk did in the US—exploit the
traditional industry’s complacency and
take advantage of the rapidly evolving before the first of the scooters had hit the
technology to make a mark in a mature market. This received a fair amount of
sector like automobile. Outside of the IT backlash. Aggarwal remained committed.
and tech sectors, it is not something that “It’s not just one car, but a whole spectrum
startups have managed to pull off. of cars. And it is ‘born electric’—the first
Yet, it has been an encouraging start. greenfield electric vehicle in India,” he said.
Defying pundits, Ola ended 2022 as the This is an even more ambitious bet than
largest player in the fast growing yet nas- his tryst with scooters and motorcycles.
cent electric two-wheeler industry—the There are only four companies in the
company sold more than 100,000 vehi- world that straddle both two and four
cles, ahead of Hero Electric Vehicles Pvt wheels in the automotive industry—
Ltd, Okinawa Autotech Internationall Pvt Honda, Suzuki, BMW and Mahindra. Ola
Ltd, TVS Motor Company Ltd, and Ather wants to be the fifth. And it will be the only
Energy Pvt Ltd. one to go all electric.
It is only a start. The company has big Alongside, Ola is also investing in its
plans and, possibly, bigger hurdles to own lithium-ion cell manufacturing. Lith-
cross in the future. ium-ion cell is the beating heart of any EV
since it makes up the battery. It is a hi-tech
Trials and TriBulaTions capital-intensive process but will be cru-

I t has not been all smooth sailing. To

begin with, Ola struggled ramping up
capacity at its 10 million unit a year factory
cial in times to come. Aggarwal believes
having his own cell will give him the edge.
There are issues the founder doesn’t
in Tamil Nadu. The hype it had generated want to talk about right now. Among them
since the scooter broke cover on 15 is funding. The last time Ola Electric
August 2021 ensured it received nearly raised funds was in January 2022, when it
100,000 bookings. received $200 million at a $5 billion valua-
But Aggarwal soon realized that pro- tion. The company, overall, has raised
ducing vehicles at scale wasn’t easy. The $866 million over eight rounds. There are
supply chain wasn’t ready and the global murmurs within the investor community
semiconductor shortage erupted at the that funds might be drying up.
most inopportune time. Customers had “I have access to resources and in any
to wait; they got restless. The angst market, resource will not be a problem
played out on the social media pages of for anybody with a vision,” Aggarwal
the company. maintained.
“From a supply chain perspective, we
did have some learnings in the first three- TempesTuous Boss
four months. Then we got aligned with
our suppliers,” said Aggarwal. “They are
now very comfortable with our scale and Ola Electric’s founder Bhavish Aggarwal says the company takes very calculated risks. “That’s the essence of entrepreneurship. You shouldn’t take bravado or mindless risks.”
T here is yet another issue the founder
has to work on—retaining key talent.
As in any business, this could determine
rate of growth and are investing accord- the long-term sustainability of Ola Electric.
ingly. Many are actually opening up new Almost two dozen senior executives
units right next to our factory.” have exited the company over the last two
The bigger challenge was in the front- they had over promised,” said Puneet year. The S1 Air is priced at ₹85,000, com- “The current market is still nascent years, some calling the working environ-
end. Without the local dealer, the com- Gupta, director, S&P Global mobility, an ROLLER COASTER pared to the ₹1.1 lakh price tag of S1 and with quick shifts in market shares. So, it is ment almost toxic. Aggarwal has acquired
pany needed a robust logistics system to automotive research firm. “Given the kind How Ola vaulted to the top in a few ₹1.28 lakh of S1 Pro. premature to crown winners. The start- a reputation of being a tough boss.
enable delivery of scooter to the doorstep of disruption the industry has seen in the months, leaving other players behind “The S1 platform will become the larg- ups, of course, have had a head start in the “Bhavish is not somebody who likes to
of every customer. It also went pan India post pandemic era, we should appreciate Monthly sales of electric two-wheelers by Ola est selling scooter in India by the end of EV space but the advantage will sustain take no for an answer. If there is some-
from the first day. The inefficiencies of that Ola did not get diverted from their this year. It’s not an easy prediction nor only for those that have utilized this to thing that is not happening, he will say
India’s regional transport authorities core vision.” 20,000 18,245 will it be easy to deliver. A lot of back- and strengthen their position to build more ‘make it happen’. If you can’t, he will
became a bugbear. 16,000 front-end has to scale up and we need to robust products,” he added. judge you as incompetent,” said an exec-
“Again, lot of learnings there...in the GunninG for The Top deliver many scooters but that is the aim,” utive who survived only six months at
registration process and the logistics of
taking the vehicle from the factory to the W ith the niggling issues sorted, sales
have rebounded. For four months
customer. We worked through the first in a row now, Ola has not only been at the
12,000

8,000
Aggarwal said, in his now signature non- Bikes and cars
chalant style.
“We are a company that takes very cal- O la’s ambitions don’t stop with scoot-
the firm.
“He can be unreasonable. Working
ers. In 2023-24, the company will hours are erratic and there is no concept of
half of the year (2022) trying to sort things top but has also distanced itself from the 4,000 culated risks. That’s the essence of entre- venture into electric motorcycles. Just a weekend. He will call you for a meeting
out,” Aggarwal said. rest of the pack. 240 preneurship. You shouldn’t take bravado like electric scooters, at 11 in the night and
Ola started with two When needed, the 0 or mindless risks. We analyse, measure this is also a segment expect a final presenta-
models, S1 Pro and S1. Ola is investing in its company has tweaked its
Dec 2021 Jan 2023
and research very deeply and then we that is waiting for dis- Ola Electric has, in total, tion early morning,” said
The first product, S1 Pro, own lithium-ion cell strategy. For example, it Share in the sale of electric two-wheelers commit to a plan,” Aggarwal added. ruption as none of the raised $866 million over another executive.
had teething issues. The opened up experience in January 2023 (in %) “There can be no looking back from there. incumbent players— The IIT Mumbai grad-
first lot of customers did manufacturing. It is a capital centres, which also dou- It has to happen.” Hero MotoCorp Ltd, eight rounds. There are uate smiles at these
not get some of the fea- intensive and complex ble up as service centres. 18.1 Ola, in effect, wants to compete with the Bajaj Auto Ltd, TVS or murmurs within the investor accusations but doesn’t
tures that had been There are already over long-time bestseller in scooters—Honda Honda Motorcycle & totally refute them. He
10.2
promised and the soft- process but will be crucial 100 of them in the coun- Activa, which is priced between ₹56,000 Scooter India Pvt Ltd— community that funds also doesn’t claim to be
ware that runs the try. Though the com- 9.1 and ₹90,000. By all means, it is an ambi- have shown any incli- reasonable. “If I was a
scooter wasn’t flawless in times to come. pany insists that the sales 6.4 tious target. Currently, Honda sells more nation to launch an might be drying up. reasonable man, I would
either. It led to malfunc- still happen entirely 4.4 Activas in a month than what Ola man- electric bike. Motorcy- have been in a job some-
4.3
tions and in some cases, accidents. Even as online, these centres give consumers the aged in 2022. In 2021-22, over 1.7 million cles account for over 60% of India’s two- where,” Aggarwal chuckled.
the company was fighting the wave of neg- ‘touch and feel’ experience they are so Activas were sold in India. Ola would need wheeler industry and early movers may He added that the company is misun-
ativity, one of the scooters in Pune caught used to while buying vehicles. Others to scale up over 10 times this year to catch stand to gain. derstood. “Many people have formed an
fire in March last year. This is a departure from its earlier 47.5 up— at a time when the competition is “We will launch a range of bikes and opinion without meeting me and I am
While Ola became the segment leader stance of not having any footprint on the likely to get more intense. ramp up in terms of sales next year,” not who they think I am,” he said.
in EV two-wheelers in just four months— ground. The willingness to change was “The competition will heat up with Aggarwal said. “The motorcycle segment “There would always be people who do
since December 2021, when they started appreciated even by some of the com- more products from the traditional com- is equally complex and competitive as not like my working style but there are
Source: Vahan dashboard
deliveries—it couldn’t remain on top of the pany’s staunchest critics. panies, i.e. Hero, Bajaj and TVS, expected scooters but it has many more sub-seg- also others who like it and have been
SARVESH KUMAR SHARMA/MINT
pecking order for long. Sales nosedived in “They have not delivered on everything to be launched. They bring with them a ments, across many price points. We with me for years now. We are not doing
the middle of 2022 and by August, they they promised but you have to say they very deep understanding of customers, have spent a lot of time understanding the usual thing—so, Ola is not your
had come down to nearly a fourth of what have done well,” said Vinkesh Gulati, can listen to your problem.” strong capabilities across the value chain this segment and I am now very excited usual place.”
the company sold in April (see graphic). former president of the Federation of For 2023, Aggarwal has set a different and above all, a brand loyalty,” said with what we will be bringing to the mar- This, in short, is Ola’s playbook. And,
“The intent was always there to deliver Automotive Dealers Association. “With target now. With the more affordable S1 Ashim Sharma, senior partner and group ket,” he added. 37-year-old Aggarwal wants to win by sac-
a greener, safer and reliable vehicle. But the physical centres, the customer now Air slated to hit the roads in the next few head (auto, engineering and logistics) at Sometime in the next calendar year, Ola rificing the usual and rewriting existing
there were so many disruptions which has a face to discuss any grievance. Half of months, it is aiming to become the overall Nomura Research Institute Consulting also plans to launch a car. Aggarwal first rules. Traditional auto makers will closely
derailed their plan and made it look like the problem goes away when somebody scooter segment leader by the end of the and Solutions. teased an image of it back in 2021, even watch these new rules.
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in corporate health policies? 20
We have hand-picked 20 mutual funds for your portfolio that have jumped
through hoops of good returns, low risk, good portfolio hygiene and our own
qualitative research. We have restricted the choice universe to 10 categories out
of the total 37 and given you at least two options to pick from each.

3-years return 5-years return Corpus

EQUIT Y (%) (%) (₹ cr)

Such group health policies allow employees to take care of their parents’ medical expenses LARGE-CAP
UTI Nifty Index Fund - Growth 14.41 12.09 9,337
HDFC Index Fund - Nifty 50 Plan 14.17 11.90 7,411
Navneet Dubey Category average 13.99 11.73
navneet.d@livemint.com
EQUITY FLEXICAP

I
t is not mandatory for companies to Canara Robeco Flexi Cap 14.34 12.83 8,730
provide medical insurance for their Parag Parikh Flexi Cap 21.29 16.74 28,248
employees. Yet, many companies Category average 14.05 11.05
do offer a group or corporate health
insurance scheme that covers not EQUITY SMALL AND MIDCAP
just employees but also their immedi- Axis Midcap 16.06 15.67 19,144
ate family members, mainly spouses SBI Small Cap 24.55 13.90 15,348
and children. Category average Midcap 18.84 12.26
Such health policies, often given for
Category average Smallcap 23.93 12.47
free as perks, may not extend to other
relatives of the employees such as their EQUITY (TAXSAVER)
parents and in-laws. But, some compa-
Canara Robeco Equity Tax Saver 16.97 14.62 4,563
nies allow the employee to pay an extra
Mirae Asset Tax Saver 17.06 13.69 14,020
premium and extend the policy cover-
age to these relatives as well. Category average 13.97 10.30
The moot question, though, is
whether it is beneficial to include your HY BR ID
parents under the employer’s group BALANCED ADVANTAGE
health insurance scheme? The answer Edelweiss Balanced Advantage 12.98 10.44 8,962
to this lies in understanding the impli- ICICI Prudential Balanced Advantage 10.97 9.77 44,634
cations of such a policy. Also, note that Category average 9.76 8.41
such policies are tailor-made and not
standardized. ARBITRAGE
Here are some advantages of the cor- Kotak Equity Arbitrage 4.28 5.03 21,566
porate health insurance plan: illnesses. Many insurers even impose a medical policy in a single year. In such Hence, it is prudent not to completely Tata Arbitrage 4.25 NA 5,630
No pre-medical check-ups: An waiting period of two to four years in a case, it can leave other family mem- depend on a group policy for your par- Category average 3.95 4.64
individual or family health policy case of PEDs or specific illnesses. But, bers with insufficient or no coverage if ent’s medical needs.”
entails a pre-medical check-up, among there is no such waiting period where it they get hospitalized in the same year. Change of job: Companies offer the 1-year return* 3-years return Corpus
other formalities. However, there is no concerns a corporate health policy. Hence, it is always better to have an group health scheme to their current DEBT (%) (%) (₹ cr)
requirement for such check-ups— Rakesh Goyal, director of Probus additional retail health policy, without employees alone. The policy lapses if SHORT TERM
either for the employee or his family Insurance Broker, said, “Typically, if which an employee will have to bear you shift jobs or are laid off. HDFC Corporate Bond 4.20 5.96 23,220
24,430
members, including his parents— any senior citizen wants to buy a retail the entire expenses when the group Tax benefit: Employees who pay IDFC Corporate Bond 3.21 5.66 15,405
11,980
under the group medical policy offered health policy, they need to undergo a health coverage limit is exhausted. additional premium to get enhanced
Category average 4.31 5.76
by the employer. medical test. Moreover, Employer's discre- medical coverage for self or the imme-
No paperwork: For a retail health there will be a waiting Group health tion: “Although the pro- diate family or even extend the policy
CREDIT RISK
policy—be it for an individual or fam- period too, but in a group insurance polices cess of you and your fam- coverage to their parents can claim tax
HDFC Credit Risk Debt 4.38 8,508
6.82 24,430
ily—an insurer usually prepares a pro- insurance policy, parents offered by ily getting covered under deduction of up to ₹1 lakh (under Sec-
ICICI Prudential Credit Risk 5.01 7,866
6.57 11,980
posal form that will have details of an get coverage from day companies have the group policy is seam- tion 80D of the Income Tax Act). “If an
individual’s and family’s health history, one. Besides, the premi- less, there is no guarantee employee has enhanced medical cov- Category average 4.98 5.35
any pre-existing diseases (PEDs),
advantages and
ums are lower, and there is that the benefits offered erage using a top-up policy or taken an
smoking or drinking habits, etc., before coverage against PEDs.” some limitations by your employer will additional cover for parents and is 6-month 1-year Corpus
DEBT (LESS THAN 1 YEAR) return* (%) return* (%) (₹ cr)
underwriting a policy. In the case of a Do note that the group as well always be the same,” said bearing the premium, one can avail tax
HDFC Money Market 3.05 5.10 13,976
group medical policy, employees don’t policies have their own Vivek Chaturvedi, chief benefits for the same,” said Chaturvedi.
need to do any paperwork. Moreover, limitations. marketing officer at Digit Should you opt for the group Kotak Money Market 3.04 5.22 12,835
they are not required to share medical Limited coverage: Employees usu- Insurance. “The coverage opted for is at health policy? Category average money market 3.00 4.91
history details to get coverage under a ally do not get to choose the sum the employer’s sole discretion, and the You must weigh the pros and the
Returns since Date of Corpus
group policy. insured in a group medical policy. company may choose to exclude your cons, and determine your answer to OU T OF T HE BOX launch launch (₹ cr)
Zero waiting period: Generally, Many companies only offer a cover of parents from the policy in future. They this question. Chaturvedi said, “If you
BHARAT Bond ETF - April 2031 4.01 23 Jul 2020 11,522
retail health policies come with a wait- ₹3-5 lakh, which might not be suffi- may also amend the medical benefits do not have an individual retail health
ing period—the period of time before cient for the extended family, including offered by decreasing the coverage or policy for your elderly parents or are Motilal Oswal S&P 500 Index Fund 16.63 28 Apr 2020 2,307
you can get cashless hospitalization your parents. There are chances that discontinuing the health insurance struggling to find an adequate retail *Absolute returns
Returns as on 6 February 2023; Corpus data as of December 2022; Growth option in regular plans has been used
facility or even claim any hospitaliza- elderly parents are responsible for altogether. This could leave your par- policy, then covering them under
Data and analysis by CRISIL Research Compiled by Neil Borate
tion expenses for any PEDs or specific higher claims made under the group ents without any health coverage. group policy would make sense.”

What is the corpus
that I should target
for retirement?
Harshad Chetanwala
I am a 53-year-old profes-
sor and plan to work till the
age of 60. After retirement,
I would like to devote some
time to social causes. For
this, I would like to create a
sufficient retirement cor-
pus. I have around ₹38 lakh
at present in the following
mutual funds (MFs) – Parag
Parikh Flexi Cap, PGIM
India Midcap Opportuni-
ties, Mirae Asset Emerging
Bluechip, Canara Robeco
Emerging Equities, Mahin-
dra Manulife Multi Cap
Badhat Yojana and ITI
Multi Cap Fund. I have
close to ₹10 lakh in public
provident fund (PPF). Are
these sufficient for my
retirement? My monthly
expenses come to
₹40,000. Should I with-
draw money from PPF and
invest in MFs or extend the
PPF account?
—Name withheld on request
You could need a corpus of
₹1.43 crore for your monthly
retirement expenses if we con-
sider inflation of 6% per
annum. With this, you will be
able to withdraw for monthly
expenses from the first month
of your retirement.
Your present investment in
MFs and PPF will help you
build a corpus of ₹90 lakh if we
assume a return of 10% per
annum from MFs and 7.50%
from PPF. Despite this, you
still need an additional ₹53
lakh to achieve the retirement
corpus. Since you have seven
more years to retire, you can
consider investing through
MFs to achieve this, with a
monthly systematic invest-
This PDF was uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
ISTOCKPHOTO
ASK MINT
m MUTUAL FUNDS
ment plan (SIP) of ₹44,000 in
equity MFs.
You can also extend your
PPF account and continue to
remain invested in it as this
will also work as a diversifica-
tion in your overall portfolio.
As for the MF portfolio,
most of the funds you are
investing in have done well for
their investors and you can
invest the SIP for your retire-
ment in these funds as well.
However, you may like to rel-
ook at ITI Multicap Fund from
a further investment perspec-
tive. You may consider SBI
Large and Mid Cap or IIFL
Focused Equity Fund as an
alternative, as these funds
have performed well across
market cycles .
Harshad Chetanwala is
co-founder at MyWealth-
Growth.com.
Do you have a personal
finance query? Send in your
queries at
mintmoney@livemint.com
and get them answered by
industry experts.
Home loans: claim deduction now or while selling your house?
Shipra Singh
shipra.singh@livemint.com
(AY) 2024-25. To be sure, the
IT laws did not have a provi- Why now is a better option
also increase to adjust for infla-
tion during the holding period
Since the deduction is lim-
ited to ₹2 lakh (for self-occu-
sion allowing taxpayers to avail and considerably bring down pied property), interest in
T
he budget had some ter-
rible news for taxpayers
servicing home loans.
double tax benefit on home
loan interest. It was a loophole
that taxpayers were taking
u INDEXED cost of acquisition is
compounded by the Cost Inflation
Index (CII). But, interest benefit each
the tax on capital gains.
A word of caution here
though. “The assumption here
excess of this threshold can be
included in the cost of acquisi-
tion at the time of selling the
year will compound by your rate of
Until now, they could get tax advantage of. return—which can be higher. is that when the homebuyer property. For properties let
benefit on the interest portion For properties sold after 31 sells the property in the future, out on rent, full interest is
uBENEFIT on capital gains may not
of the loan twice. First, by March, sellers cannot include be available in the future, so it’s current tax rules would not deductible under section 24.
claiming deduction up to ₹2 the interest portion of the better to claim what is available have changed by then. The Though this change will be
lakh (for self-occupied prop- home loan in cost of acquisi- today. probability of that happening applicable from 1 April, it is
erty) every year under section tion while calculating capital uINTEREST in excess of ₹2 lakh is low, especially when the advised that taxpayers who sell
24 (available only under the gains if they have already threshold can be included in the government is moving a property in FY2022-23 do
old tax regime). Second, after claimed deduction on it. Add- cost of acquisition at the time of towards a simpler tax system not include interest compo-
selling off the property, they ing the interest amount selling the property. that may see a lot of changes in nent in the cost of acquisition
were allowed to add the inter- increases the cost of acquisi- the income tax rules over the while filing their tax return if
est part of the loan to the total tion and thereby reduces the next few years,” said Jigar they have claimed deductions
cost of acquisition (purchase tax on capital gains. This now is whether homeowners culation shows that choosing Mansatta, a Jamnagar-based on it. “In case of a dispute, the
price) that is used to arrive at essentially means that the tax- should claim deduction every the latter is more beneficial. chartered accountant. court will consider the rule
the capital gains. payer were getting double tax year or forego it to use the Long-term capital gains “I will suggest that taxpayers announced by the govern-
The budget has inserted an benefit on the same interest interest amount later to lower (LTCG) made on a house prop- claim deduction under section ment even if it is not in effect at
either-or condition to this, amount. the capital gains tax? erty enjoy indexation, which 24 while it is available,” he the time of filing income tax
starting with assessment year The question that arises A back-of-the-envelope cal- means the interest amount will added. return (ITR),” said Mansatta.
THE CONVENIENCE OF INVESTING COMES WITH COSTS ATTACHED
million in 2018-19 and it jumped to 3.58 million in 2021-22. So, in demat accounts as well.
many more individuals lost money in 2021-22. What happened But this convenience comes at a cost. One can end up con-
POWER here? First, the covid-19 pandemic spread and many people were
working from home. This gave them an opportunity to earn extra
stantly checking the value of the investment portfolio. This on a
good day creates excitement and on a bad day creates anxiety.
POINT money through trading. In the case of people who had lost jobs Investing has become like a video game.
they thought they could earn money through trading. The convenience can also lead to bad investing decisions. The
VIVEK KAUL Second, cheaper internet, smartphones and apps had a role to lack of skill in active investing doesn’t hold back people anymore,
play. This was true in 2018-19 as well, but it became truer in something which explains the massive
We welcome your views and comments at
mintmoney@livemint.com
2021-22. It is much easier to carry out trading sitting at home Cheap increase in the number of futures and
using an app on a smartphone than in the past. smartphones options traders. Futures and options
Third, cheap smartphones and the internet led to the rise of
and the internet trading is not an easy way to invest.
W hy do we invest money? To ensure that it grows and over
a period of time beats the rate of inflation. At the same
time, one needs to ensure that the capital amount invested is pro-
financial influencers who told prospective investors that making
money through regular futures and options trading is easy and
their message was bought. Fourth, there was the general reason
have led to the
Further, take the case of a bad day on
a stock market, one can immediately
rise of financial take out the phone and sell, instead of
tected. So, while generating a return on capital is very important, of people seeking excitement while investing. influencers holding out. If the market is going
one shouldn’t forget the importance of return of capital as well. In fact, close to 3.36 million individuals (94% of 3.58 million through a bad week, one can pause or
The trouble is many people seek excitement and meaning in traders) who lost money would have been simply better off by discontinue an SIP. Doing this goes
their lives through investing and forget this basic point, as high- having their money lying idle in a savings bank account or a fixed against the basic idea of cost averaging at the heart of running an
lighted by a report recently released by the Securities and deposit. But they were looking for excitement and quick money. SIP investment strategy.
Exchange Board of India on individual traders participating in In the last few years, investing has become very convenient. In the past, discounting an SIP would have meant calling up the
the futures and options segment of the equity market. In 2021-22, We have come a long way from standing in a line to invest in a agent, signing another form and so on. The process would have
a whopping 90% of the active traders lost money. At 87%, the fig- new initial public offering of a company or a new fund offer of a probably ensured that one would have postponed the decision
ure was only slightly better in 2018-19. If we leave out the outli- mutual fund. We have also moved on from the time when our to discontinue the SIP to another day.
ers—people who have made huge profits or huge losses—94% mutual fund agent had to come and visit us to get our signatures To conclude, the convenience of investing has led to a situation
made a loss in 2021-22. The average loss in such cases was on forms, to invest as well as to sell. Now buying stocks and where the psychology of investing has become even more impor-
₹60,314, whereas the average profit was a meagre ₹3,365. mutual funds can be automated on an app. One can also buy and tant than before. It is worth remembering that just because one
In fact, the average loss in 2018-19 had stood at ₹90,691 and it sell in a few seconds. This applies to stock futures and options as can invest any time anywhere and quickly, doesn’t mean that
fell by a third to ₹60,314 in 2021-22. Interestingly, the total num- well. This explains the massive increase in the number of active one’s going to become rich quicker.
ber of active individual traders without the outliers stood at 0.56 traders between 2018-19 and 2021-22 and the massive increase Vivek Kaul is the author of Bad Money.
 12 ThursDay, 9 February 2023
New DelhI VIEWS LIVEMINT.COM

OUR VIEW THEIR VIEW

PTI

India’s emergence is vital for the

global economy to keep growing
The world would see production plateau without demand generated in its most populous country

These facts indicate that ‘people’
matter for economic growth. However,
the question is: Why? Surprisingly,
economic theory has no answer. The
dominant Keynesian thinking is that it is
income that limits consumption. Even in
macro growth models, population
growth is mostly exogenously given,
and the role of demographics per se is not
MANOJ PANT & explained. But, today, income is not as
SUGANDHA HURIA much of an issue as dwindling popula-
are, respectively, former vice-chancellor tions. This is why Keynesian solutions
and a faculty member at the Indian that worked well in response to the Great
Institute of Foreign Trade. Depression of the 1930s did not work
or consume it. Thus, if population stag-
nates and enlarged production must find
consumers, technology must necessarily
be time-saving. Empirically, this is what
has happened in the West since the
1980s. Think of instant services and pre-
cooked food, while saving time in sectors
like electronics has worked through con-
vergence: we use the same hand-held
device for multiple needs today. Thus,
demand growth in such economies
depends on the extent to which technol-
ogy can save people time. (The formal
development of these results is shown in

RBI’s policy stance isn’t

during the Great Recession of 2008, a publication by the authors in the B.E.
despite massive pump-priming by the Journal of Theoretical Economics).

I
ndia a “priority market” that will con- US and China, among others. Yet, time-saving technology is insuffi-
tinue to see growth, said Salesforce’s Let’s look at fundamental relation- cient to solve a demand deficiency.
president and COO Bret Taylor; it is a ships between technology, capital and Every consumer has only 24 hours a day.

neutral yet: Fair enough “must win” market for Royal Philips
Electronics, according to its global CMO
Geert van Kuyck; and it’s the “most
important emerging market Bacardi is
demographics. On the supply side, tech-
nology raises the productive capacity of
factors of production (displaces jobs?). In
addition, increased R&D and innovation
Hence, there is a limit to which technical
progress on this score could increase
aggregate disposable time. What this
implies is that while time-saving tech-
focusing on” as stated by Bacardi India’s often lead to new (and better) products. nology could deal with the asymmetry
marketing director Zeenah Vilcassim. Thus, it also creates new jobs, at least on the production and demand side to
Its concern over core inflation and adherence to ‘withdrawal of accommodation’ point to a These are only some of many corporate those needed for new goods. Today’s some extent, it cannot offer a long-term
voices that have been making the same world of automation implies there is no balance of demand and supply. There
policy rate peak that’s yet to come. Price stability deserves the priority it has been accorded point over the past two years. limit on production. Yet, if robots are two possible options. One, shift con-
In another vein, several writers have increasingly replace humans, or head- sumers to where income is generated or
argued that the world’s growth is con- counts fall, there will be no one left to advanced technology is available (i.e.,
strained by the natural growth rate of consume these products (unless robots the West allows immigration). Second,

A
s central banks globally slow their
tightening of monetary policy
amid data on inflation coming off
last year’s peaks, the Reserve
Bank of India (RBI) seems to be
following in step. On Wednesday,
its monetary policy committee (MPC) raised its
repo rate by 25 basis points to 6.5%, slowing its
pace from December’s hike of 35 basis points.
Other policy rates went up in tandem. But our
central bank did not shift its stance. It remains
“focused on withdrawal of accommodation”. In
January, it absorbed surplus liquidity of about
₹1.6 trillion on a daily average, and the peak rate
on the May-onwards repo incline likely lies
further ahead, with at least another hike in
store. As retail inflation had fallen below RBI’s
6% upper limit in the last two months of 2022
and was projected at 5.3% in 2023-24, and with
growth looking harder fought next fiscal year,
some observers expected a ‘neutral’ stance,
with rates put on pause. However, as Governor
Shaktikanta Das made clear, core inflation is
still too sticky. This hawkish tone also stems
tourism and hospitality, among other indica- its population. This is why the world start!) The conundrum, thus, lies in the shift production to where consuming
tors. Yet, at 6.4%, its GDP growth forecast for economy is not out of the woods yet as asymmetric treatment of labour and cohorts are in abundance, via FDI.
far as a global recession is concerned. capital in the analytical models of eco- This is why emerging market econo-
2023-24 may turn out more rosy than realistic, Japan, most of Europe, New Zealand nomics: while labour and capital are mies matter, especially India. Data shows
especially if flagging global growth takes a big- and now even China, which have suf- substitutes in production, there is no that our ‘young workforce’, which con-
ger toll than anticipated. If so, RBI may have to fered prolonged economic weakness, capital on the demand side. sumes approximately thrice as much as
reassess its policy. Right now, credit is looking all have populations that are either Recently, some economists tried to the older cohort, is still rising in India,
up; what matters is the confidence of investors ageing or declining. In addition, com- show how the productivity of time (not while it has been falling in developed
pared to younger people, the elderly labour) could be increased on the pro- markets and even in China now. These
in obtaining real returns that exceed their real consume up to a third fewer calories. duction side, with reference to virtual trends are normally irreversible in the
cost of capital. Under today’s dynamics of post- Consequently, the problem seems not trade and offshoring. An IT firm in the short to medium term.
pandemic normalcy, business prospects rather one of too many people (the Malthusian US can maximize time productivity by The bottom line? India is valuable to
than cheap loans ought to drive investment, trap), but also one of too few young outsourcing some tasks to Indians who the global economy because this is
making space for RBI to fulfil its legal mandate workforces posing another constraint work while the US sleeps. Yet, this only where consumers reside in terms of
to economic growth. addresses the supply side and doesn’t numbers and consumer cohorts.
of keeping our cost-of-living in control. The last observation explains the solve the consumption problem. Since open immigration is unlikely
Inflation needs to be held at 4% for a sustained innovative immigration policies that So, what is the solution? It is critical to to be acceptable politically in most
period once it’s tamed for RBI to consider itself countries are adopting today: the UK’s understand the role of ‘consumption- countries, the only option is to transfer
successful. Else, a rupee whose true value is and Australia’s Global Talent Visa, Sing- time’. Consumption requires not only production to high-population
wobbly will cause inefficiencies all around on apore’s Global Investment Programme, income, but physical time. Buying some- markets. For FDI, ‘destination India’
and other options like golden visas, etc. thing is useless if one has no time to use should be the call.
account of the ‘money illusion’ it creates,
making macro stability a challenge and acting
as a drag on output expansion beyond the short-
term. What’s more, while India does not have
wage-push pressures like America does, RBI
has to watch the impact of widened asset-yield
differentials with the US each time the Federal www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Wednesday, February 13, 2013 Vol.7 No.38 `3.00 in Delhi­NCR/`4.00 outside Delhi­NCR 24 PAGES
+ 4 MARKETS PAGES

from sensitivity to the role of people’s expecta- Reserve tightens its own policy. This factor may SPORTS: Olympic snub shatters
Indian wrestlers’ hopes >24
TECHNOLOGY: Indian IT taps Silicon Valley
for its future >8

tions. After last year’s failure on price stability, also have tipped the scales in favour of tighter EXCLUSIVE PARTNER
MOVIES: ‘Django Unchained’ gets
an almost easy A >24
INTERNATIONAL: G7 fires currency
warning short, Japan sanguine >15
We need to be patient.
this is an emphasis well judged. It suggests an money in India, exposed as we are to dearer SENSEX 19,561.04 Æ 100.47 NIFTY 5,922.50 Æ 24.65 DOLLAR `53.85 ® EURO `72.24 ® GOLD `30,255 æ `180 OIL $118.27 Æ $0.28

We think we’re going

INDRANIL BHOUMIK/MINT

Lenders to FRESH PRESSURE QUICK EDIT

recall loans
Economy’s Playing

RBI committed to meeting its 4% medium-term imports if capital outflows weaken our currency to Kingfisher
B Y P .R . S ANJAI
·························
MUMBAI
& A NUP R OY

macro woes
interference
T he International
Olympic Committee’s

to need to keep rates at

(IOC) executive board

L enders to Kingfisher Air-

lines Ltd said they have de-
has recommended that
wrestling, a sport that

target for inflation, as distinct from being con- further. Thankfully, food prices have cooled
cided to recall all loans given has, of late, given India a

worsening
to Vijay Mallya’s stricken air- toehold on the winner’s
line, kicking off the process for podium, be axed from the
the recovery of `7,000 crore in 2020 Games. A final
debt and marking the end of decision is yet to be
banks’ patience with the firm’s taken, but a Reuters
inability to outline a plan to re- report suggests that the
cover from its financial woes. sport will eventually go.
Bankers’ representatives Industrial production To be sure, India’s factory The impending exit of

tent with a rate under 6%. Inflation targeting, lately and fuel may have turned benign. Last a restrictive level for
said after a meeting with King-
fisher executives on Tuesday
falls 0.6% in December output numbers have always
tended to be volatile, because
wrestling, one of the
oldest Olympic sports,
in Mumbai that they had given while retail inflation of the way the index is con- shouldn’t be seen as a
the promoters sufficient time rises to 13­month high structed, and prone to fre- ploy to do India out of
to pump much-needed capital quent revisions. medals it would have
into the airline. of 10.79% in January The industrial production won in 2020. India’s
“We have reached a dead data should be seen in the recent successes on the
end. Now we will seek legal ad- B Y A SIT R ANJAN M ISHRA context of CSO’s projection mat have encouraged
vice for recovering the debt,” asit.m@livemint.com that the Indian economy could hundreds of young

after all, needs to shore up its credibility. year, these items were inflamed by war-led
said a senior banker, request- ························· grow only 5% in 2012-13. The people to take up the
ing anonymity. NEW DELHI finance ministry later rejected sport, but it is the US that

Airline officials, however,
put a positive spin on events.
Sanjay Aggarwal, chief execu-
tive officer (CEO), said the
grounded airline was prepar-
ing for a restart by summer
and that salary dues of em-
T
a period of time before
wo weeks before the the forecast, holding that it is the most successful in
presentation of budget was based on dated informa- wrestling, in terms of
2013, the Congress-led tion and said growth would be Olympic medals.
United Progressive Alliance 5.5% or more during the year Instead, the exit of
faced fresh macroeconomic ending March. wrestling from the
challenges after data released Some experts were also ex- Olympics should be seen
on Tuesday showed that facto- pecting the December factory as an act of fate, although

Sure, if RBI overdoes its policy withdrawal, an scarcities and its effect worked its way around
ployees will be paid shortly.
Kingfisher Airlines has been
grounded since 1 October, first
because of staff protests
ry output contracted in De- output number to reflect the India would do well to
cember and consumer price widely held belief that the Writing on the wall: If popular perception is anything to go by, the Left is lobby the powers-that-be
inflation accelerated in Janu- economy had bottomed out, set to retain power in the forthcoming Tripura assembly elections. In to change their mind.
ary to a 13-month high. and that most government the event that this indeed does pan out, it would have little to do with Then, that can’t happen

[inflation] comes down.

against unpaid salaries and
thereafter because of regulato-
ry issues. Its flying licence ex-
pired on 31 December, al-
though that can be revived
Together with the projection
that economic growth would
drop to a 10-year low of 5% in
the current fiscal year, the data
has the potential to roil the un-
data would slowly move north.
CSO has projected factory out-
put growth will slow to 2% in
2012-13 from 2.7% a year ago,
mostly due to a drastic slow-
the lack of anti­incumbency and more to do with the so­called TINA when the country’s
(there is no alternative) factor. Mint takes a look at the electoral Olympic body isn’t even
campaigns, the Congress party’s disconnect, and the unemployment recognized by IOC.
factor that may come into play in the run­up to the polls. See Page 10

approach it signalled last April with a switch to heat up the core rate of inflation. At this
through a re-application.
Shyamal Acharya, deputy
managing director (corporate)
at State Bank of India (SBI),
said the process of recalling
the loans will take 7-10 days to
get under way.
“They were given a chance;
derlying arithmetic of the
budget; at the same time, it
also seems to suggest that the
economy is yet to bottom out
and is still being subjected to
volatility.
The Index of Industrial Pro-
duction (IIP) surprisingly con-
down in manufacturing and
mining activities.
C. Rangarajan, chairman of
the Prime Minister’s economic
advisory council, said there
was a need to stimulate invest-
ment to get back to the high
growth path.

away from its covid accommodation, it may put juncture, all taken into account, RBI has done
they were required to say
what’s their plan,” Acharya
said. “The consortium (of
lenders) didn’t find anything
new or concrete... A small
group of lenders will be consti-
tuted to take legal advice.”
On 20 January, a core group
tracted 0.6% in December
while retail inflation based on
the Consumer Price Index ac-
celerated to 10.79% in January
from 10.56% in the previous
month, according to data re-
leased by the Central Statistics
Office (CSO).
“Our investment rate has
fallen, but it is still growing at a
rate of 30% to 32% (as a pro-
portion of gross domestic
product, or GDP). We need to
TURN TO PAGE 5®

JE ROME P OWE L L
of lenders had asked grounded According to the revised ALSO SEE

India’s economic recovery at risk. The central well to keep its monetary squeeze going. With
Kingfisher to infuse at least data, factory output in Novem-
`800 crore into the airline be- ber contracted 0.8%, worse >Mark To Market: The CSO was right
fore the banks considered any than the provisional estimate after all >P14
further loan recast and the ex- of a 0.1% decline. >OurView: Inflationary tidings ahead >P22
tension of a no-objection cer-
tificate that would enable the
airline to resume flights.
Bankers have taken over two UPA’S CHALLENGES

Chopper deal, 2G furore

bank seems to be counting on the resilience of the government’s fiscal deficit set to tighten
TURN TO PAGE 4®

resurrect graft shadow

B Y S AHIL M AKKAR, Investigation (CBI) on Tuesday
T ARUN S HUKLA & A MI S HAH after Giuseppe Orsi, chief ex-

our economy. In support of this view, it cited only slightly in 2023-24 and its borrowing plan
························· ecutive officer (CEO) of Fin-
NEW DELHI/MUMBAI meccanica SpA, was arrested

A llegations of corruption
have returned to haunt the
Congress-led coalition govern-
ment, with a potential scandal
surfacing over suspected kick-
backs paid by an Italian de-
fence company to secure a
in Rome for allegedly paying
kickbacks for the deal to sell
helicopters for VVIP security.
It came on the heels of me-
dia reports of an audio tape
purported to contain a conver-
sation between Unitech Ltd

buoyancy in urban consumption, as seen in still quite huge, RBI’s bond market actions will
deal from India and a new managing director Sanjay
front opening up in the 2G Chandra, one of the accused in
scam case. the 2G scam, and a prosecutor
Mint is also available for R7 with The government ordered a
Hindustan Times in Delhi-NCR only
probe by the Central Bureau of TURN TO PAGE 4®

passenger vehicle sales, domestic air traffic, serve as subtle signals of its resolve.

GUEST VIEW

Our unique EV transition is a leadership opportunity

cost of owning an electric three-wheeler
ARAVIND HARIKUMAR & HIMANI JAIN (e-3W) is 13-46% lower than that of owning
similar vehicles using petrol, diesel and
compressed natural gas. When drivers
switch to electric, a 30% increase in daily
savings is enough to pay back an e-3W loan.
and 3W drivers rely on high-interest loans resolution assessments of how e-3W and needs and reduce their costs. Undoubtedly,
from informal markets. MSMEs, which face e-2W users would be best served. there are also behavioural biases that impede
a similar challenge, have benefited from Third, incentivize battery swapping ecosys- EV adoption. A larger allotment of funds for
credit guarantee funds (enhanced in this tems: Time lost on charging is very costly for information, education and communication
budget). The Centre could create a similar passenger 3W and 2W delivery users. This is (IEC) by the government under its Faster
EV-focused fund that city/state governments why complementary battery swapping eco- Adoption and Manufacturing of EVs

I
f in the West the environmentally con-
scious and affluent are going the electric
vehicle (EV) way with four-wheelers like
Tesla’s, a unique transition is happening in
India. Here, it is being spearheaded by two-
and three-wheelers. Electric two-wheelers
and three-wheelers (including e-rickshaws)
accounted for 92% of EVs registered in the
Commercial two-wheeler delivery riders may leverage to back loans for e-3Ws and systems are evolving in these segments. (FAME-II) scheme, specifically to address
can also significantly improve their earnings commercial e-2Ws. These provide charging e2W and e3W segments biases, would help.
by adopting EVs. Second, make chargers solutions by swapping Including administration costs, FAME-II’s
So what’s delaying the transition? Despite easily accessible: Spatially India should empty batteries with IEC allocation remains just 0.004% of the
clear economic gains and availability of EV uniform charging infra- charged ones, which helps overall scheme outlay. This is minuscule in
models, e-2Ws and e-3Ws are still not being structure development double down users avoid long waits. comparison with other schemes like the Jaw-
adopted at the desired pace. Only 4.5% of guidelines, as suggested by However, most local swap- aharlal Nehru National Urban Renewal or
three-wheelers registered last year were the ministry of power, do
on its thrust by ping ecosystems in India are Swachh Bharat missions, which have 5-8%

are, respectively, a research

analyst and a senior
programme lead at the
Council on Energy Environment
and Water.
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country in 2022. And the 2023-24 budget
gave the EV industry a boost by announcing
the removal of customs duties on capital
goods used for manufacturing lithium cells
used in these vehicles.
India’s transport decarbonization is a
good example of inclusive development and
green growth, where lower income groups
and vulnerable businesses stand to gain the
most from the transition. In the Global
South, then, India stands to gain from posi-
tioning itself as a global hub for EV two- and
three-wheelers. Our scooters and auto-rick-
shaws can be at the forefront of this.
Analysis by the Council on Energy, Envi-
ronment and Water (CEEW) shows the total
electric, up from 1.7% in 2021. Even though
about 5.8 lakh e-2Ws were registered in
2022, they made up just 3.9% of total two-
wheelers. This slow uptake can be attributed
to low awareness, lack of trust in EV per-
formance, high finance cost, poor visibility
and poor access to charging infrastructure.
A greater focus on passenger three-
wheelers and commercial two-wheelers can
accelerate India’s green push by improving
livelihoods while reducing environmental
and transport costs. We suggest four steps:
First, set up EV credit guarantee trust funds
to de-risk financiers: Financiers are appre-
hensive about extending loans to users with-
out a CIBIL score. Most 2W delivery riders
not consider the needs of
2Ws and 3Ws whose idle-
focusing on cost focused on large homoge-
neous fleets of the same
allocation for IEC. Delhi is an example of how
state-level awareness campaigns with EV
time locations are not uni-
formly distributed across
sensitive users manufacturer‘s make and
model. We recommend
fairs and demonstrations can catalyse an
upshoot in e-2W and e-3W sales.
the city. Auto-rickshaws of two and three incentives for batteries, EVs We propose that India double down on its
spend their operational and with swappable batteries, or electric 2W and 3W transition to maximize its
non-operational idle times wheelers for battery-swapping infra- benefits for the environment, people’s liveli-
at specific parking loca- structure. This will promote hoods and the Indian economy. The Union
tions with high footfall. battery interoperability government must take strategic steps
Similarly, 2W delivery riders spend their idle among heterogeneous fleets within the same focused on the e-2W and e-3W segments to
time near pick-up hubs and restaurants. The battery-swapping ecosystems. ease financing, improve awareness and
charging infrastructure being developed on Fourth, allocate higher funds to improve reduce charging costs, accessibility and time.
national highways also does not cater to 2Ws awareness: What was done for the Swachh With these two EV segments, India has an
and 3Ws, which mainly operate within cities. Bharat Mission can serve as a model. There opportunity to lead the efforts of other Asian
We recommend charging locations that are are still considerable awareness gaps among emerging economies to chart their own
strategically chosen based on city-level high- users about the ability of EVs to cater to their inclusive energy-transition strategies.
 LIVEMINT.COM VIEWS ThursDAy, 9 FebruAry 2023
New DelhI 13

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

The monetary policy committee The AI robots eyeing our jobs

could help laying us off as well
vote was closer for good reason Layoffs aided by artificial intelligence are no longer unthinkable

Posterity will tell whether the MPC’s stance is what the doctor would’ve ordered for an economy not quite in the pink of health

ISTOCKPHOTO

BETH KOWITT
is a Bloomberg Opinion columnist covering
corporate America.

MYTHILI BHUSNURMATH
is a senior journalist and former central banker.

F
or those who take a sadistic pleasure in
looking for evidence that we are all

A
week to the day, Finance Minister
Nirmala Sitharaman unveiled a
responsible if somewhat elitist
Union budget, the Reserve Bank
of India’s (RBI) Monetary Policy
Committee (MPC) announced its
own monetary policy decision—a hike in the repo
rate (at which RBI infuses liquidity) by 25 basis
points and an unchanged stance, “focused on with-
drawal of liquidity”.
Unlike in the past, when inflation was on an
upward trajectory, we now have data showing two
consecutive months of slowing but still high
inflation. In the circumstances, one could argue,
as many economists, including MPC member
Jayanth Varma, have done, that there is a case to
pause rate hikes; see how past hikes have played
out, both on growth and inflation, and then act.
Economists, however, are seldom known to
agree. “If all the economists were laid end to end,
they’d never reach a conclusion,” quipped English
playwright George Bernard Shaw.
Understandably, therefore, there were many
who argued for a rate hike, but at a slower pace
than before. Hence, the case for a 25 basis points
hike, down from 35 basis points in the December
2022 policy announcement. And this is what the
MPC has gone with, albeit by a smaller majority
than earlier.
Unlike in December, when the MPC voted by a
5:1 majority to hike rates 35 basis points, this time
round, the vote was closer, at 4:2. Remember,
MPCs in India have always set great store by una-
nimity, so the split-vote warrants close examina-
tion. It suggests a third of the MPC members, more
particularly two-thirds of its external members
(who are more likely to take an independent view),
did not quite agree with the majority decision.
On the growth front, we see the same difference
in opinion, with two MPC members—the same
two who struck a different note on the rate hike—
voting against continuance of the ‘focused-on-
withdrawal-of-liquidity’ stance in a scenario
where the growth-inflation trade-off has subtly,
but clearly, changed.
But central banking, we all know, is more an art
than a science. Especially when the data is so
ambiguous. With that caveat, my quarrel with
RBI’s latest monetary policy announcement is on
three counts: stance, current account deficit
(CAD) and risks to growth. Take these one by one.
On stance: Excess liquidity has, doubtless, come
down from over ₹8 trillion about a year ago to a
little over ₹1 trillion today. But monetary policy is
not about today; it is about tomorrow.
Over the coming months, liquidity will be
impacted by the redemption of LTRO (long-term
repo operations) and TLTRO (targeted long-term
repo operations) funds. At the same time, substan-
tially higher credit vis-a-vis deposit growth and
the government’s larger borrowing programme—
of ₹15.4 trillion as against ₹14.2 trillion in fiscal
2022-23—is bound to put pressure on liquidity.
Rising US interest rates and growing prospects of a
soft-landing are also likely to see a reversal of
funds coming to India in search of yields.
Remember, RBI is the Indian government’s
debt manager, charged with ensuring that govern-
ment borrowing goes through smoothly and at the
best (read, lowest) possible rate of interest. That
cannot happen if liquidity is tight. After all, it is not
so long ago that the governor termed low interest
rates a “public good” and RBI frowned at yields in
excess of 6% on 10-year government securities.
Today, yields are well over 7% and likely to move
higher.
On stance, therefore, there was a strong case to
move to “neutral”. That would have given the
MPC the freedom to either tighten or ease liquid-
ity, depending on the “evolving situation”. And a
chance for RBI to prove its agility.
On the CAD: With the current account deficit
touching 4.4% of gross domestic product (GDP) in
the second quarter, RBI’s view that the CAD is
expected to “remain eminently manageable and
within the parameters of viability” seems exces-
sively optimistic. Today, the net balance under
services and remittances is in large surplus and
partly offsets the trade deficit. But the slowdown
in global software and IT spends is bound to
impact services exports adversely.
With China opening up, there is no certainty the
present moderation in commodity prices will
endure. And while lower import costs could help
lower India’s trade deficit, where lower import
costs are because of lower import volumes, driven
in turn by lower growth, the outcome may not be
unambiguously good. Especially when merchan-
dise exports are also expected to slow.
On growth: Prima facie, downside risks to eco-
nomic growth are much higher than the statement
cares to admit. One, because exports are unlikely to
be an engine of growth and private investment is
still fighting shy. In all probability, the growth
estimate of 6.4% will have to be toned down,
necessitating the case for a relook at the present
restrictive stance.
So, where do I agree with the MPC, or rather, its
majority decision? On balance, on the repo rate
hike. Given the stickiness we have seen on core
inflation—over 6% for more than a year now—a 25
basis points hike may not do much good given that
a cumulative hike of 250 basis points in less than a
year is yet to deliver on the price front and is yet to
play out fully as well. But then, it is unlikely to do
much harm either!
On a lighter note, for the first time, Governor
Shaktikanta Das ended his statement with a quote
from Netaji Subhas Chandra Bose, rather than
Mahatma Gandhi (though the latter came in for a
mention earlier). I leave it to the reader to form her
own take (stance?) on that!
creeping closer to a dystopian future
where humans are ruled by their robot
overlords, consider this possible nightmare
scenario: Artificial intelligence (AI) is not
only coming for your job, but will have a
hand in laying you off, too.
AI has already infiltrated multiple parts of
the human resources process, from hiring
to onboarding to training to evaluating. It’s
not a huge stretch to think that in an effi-
ciency-obsessed sector like technology,
tools designed to smoothen decisions are
now making their way to layoffs. The condi-
tions are ripe for it: the tech sector’s nearly
42,000 job cuts last month were the second
highest on record for the sector, according
to data from outplacement firm Challenger,
Gray & Christmas.
One of the reasons we know there’s a
movement toward automating parts of
so-called ‘workforce reduction’ is because
human resources executives have admitted
to it: A report last month from Capterra, an
arm of tech industry research firm Gartner,
found that 98% of the human resource (HR)
leaders it surveyed said they would at least
somewhat rely on software and algorithms
to reduce labour costs in a 2023 recession.
For hourly workers, management by
algorithm is nothing new. In 2021, for
example, Bloomberg News reported that
Amazon.com was tracking every move of its
Flex delivery drivers, some of whom were
fired by automated email when the com-
pany’s algorithms decided the workers were
falling down on the job. The information
deluge that Amazon collects on these inde-
pendent contractors is what makes it possi-
ble for algorithms to evaluate performance,
but the volume of data also makes it easier
for proponents of AI to argue that these
tools are necessary; it’s far too many inputs
for a human to possibly interpret.
Office workers have until recently
escaped such intense scrutiny, in large part
because the data to track them the same way
didn’t exist. But that’s changing with the
popularity of the ‘workforce productivity
score’ and a growing inclination and ability
to monitor not just whether employees are
in front of their keyboards, but their every
keystroke and mouse click.
To be clear, I am not suggesting here that
HR managers will simply push a button and
out will pop a pile of pink slips (and along
with that a whole bunch of legal and reputa-
tional issues), although it’s almost guaran-
teed that someone will try. The greater like-
lihood is that AI helps narrow the pool and
provides a first pass before a human gets
Tech sector HR may welcome a chance to shift
the blame for sackings to AI ISTOCKPHOTO
involved—akin to what happens currently
in the hiring process. This might seem like
the holy grail for HR managers, a chance to
remove all emotion from layoffs and shift
the blame and feelings of guilt from humans
to machines.
But we know that’s not how AI works. As
the edict goes, bad data in, bad data out. And
there’s plenty of evidence that the data
companies already rely on for employee
evaluations is far from perfect.
Capterra analyst Brian Westfall told me
that while 70% of HR leaders say they would
use performance metrics in layoff decisions,
a higher percentage report that they are
considering changing performance evalua-
tions because they think the process is
flawed. Even the HR leaders in the Capterra
study who said they would rely on software
and algorithms to cut labour costs in a 2023
recession were wary of the technology. Only
half said they are completely confident that
these tools will produce unbiased recom-
mendations, while 47% reported being
completely comfortable making layoff deci-
sions based on these recommendations.
Rather than remove bias from a round of
messy and uncomfortable layoffs, AI has the
potential to encode it. Several experts
pointed me to another Amazon example, in
which the technology giant tried to build an
automated tool to narrow down a pool of job
applicants. Its engineers trained the system
to look at historical data on people who had
submitted resumes in the past. But because
technology is a male-dominated industry
and most past candidates were men, women
who applied for technical jobs were penal-
ized by the algorithm. Reuters reported that
Amazon abandoned the programme, with
the company saying it never used the tool to
evaluate candidates.
It’s yet another case study of how AI has
the potential to make us forget that human
resources is about, well, humans. We are
steadily marching toward a robotic apathy
now, with reports of some tech employees
being told by email that they had lost their
jobs rather than by an actual person.
Today, we readily acknowledge that a
layoff can be one of life’s most traumatic
events. Somehow, that doesn’t seem to
square with turning such a devastating deci-
sion over to algorithms—especially when
we readily acknowledge that we don’t really
trust them. ©BLOOMBERG

MY VIEW | BehAviOur By BrAin

We should demand explainable artificial intelligence

human action. But how well can you explain
BIJU DOMINIC how to ride a bicycle? Most explanations of
this ride will not go much beyond “adjust the
handlebar properly until you get proper bal-
ance and then start to peddle”. The numerous
small but significant actions taken by a bike
a non-conscious level, it has been found, and
the conscious human brain has very little
access to it. So the explanations humans pro-
vide for their decisions are nothing but mere
rationalizations made after the act has hap-
pened. These ‘intelligent explanations’ of
level, they tend play at a conscious level. Con-
scious thinking could aid explainability, no
doubt, but it impedes the performance of
human brain.
Human decisions are the result of the
activity of billions of neurons, trillions of syn-
On the other hand, powerful algorithms
such as neural networks, ensemble methods
including random forests, and other similar
algorithms that provide better performance
and accuracy might be discarded to preserve
transparency and explainability. So, in our

A
s artificial intelligence (AI) advances,
the algorithms powering AI tools have
become a ‘black box’ that is difficult to
interpret. Even the engineers or data scien-
tists who created the algorithms in use cannot
understand or explain what exactly happens
inside this ‘black box’ or how a particular AI
algorithm arrived at a specific result. So there
rider to stay up and moving is missed in all
verbal explanations. What explains this
explainability deficiency among humans?
In recent decades, learnings from neuro-
science have shown that explaining human
decisions is a very difficult task, maybe even
an impossible job. Of the 11 million bits of the
human brain’s processing capacity, more
why a decision was made has very little con-
nection with what actually
happened within the deci-
sion-maker’s brain. This AI tools that
facet is also evident in most
consumer research studies explain their
that uncover huge gaps
between what people say
output would
aptic connections and hundreds of neuro-
transmitters. These human
decisions are contaminated
with many biases and this is
reflected in the data that AI
algorithms use. Neurosci-
entists admit that under-
standing the hugely com-
quest for XAI, one should not end up with an
algorithm that compromises efficiency for
better explainability.
Explainability improves the overall under-
standing of algorithms and so the whole AI
system. But too much understanding has a
downside. As the comprehension of some-
thing increases, the level of expertise attrib-

is chief evangelist, Fractal

is now a growing movement for explainable
AI (XAI), or interpretable AI, to create tools
Analytics, and chairman,
FinalMile Consulting.
whose decisions or predictions we humans
can understand.
There are many advantages of grasping
how an AI-enabled system has arrived at a
particular output. Explainability can help
developers ensure that their algorithms are
working as expected and meeting regulatory
standards. It also makes it possible for those
affected by an AI decision to challenge or
change that outcome. But before we hold AI
machines to such high levels of explainabil-
ity, there is a crucial question: How good are
humans in explaining themselves?
Riding a bicycle is considered a very simple
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than 99.99% function at a non-conscious
level. Experiments by Benjamin Libet have
shown 500 milliseconds before a human
supposedly takes a conscious decision, the
action potential related to that decision is
already noticed at a non-conscious level.
This precedence of non-conscious activity
before conscious decisions are taken has
been confirmed by several other experi-
ments. In the early stages, all learning activi-
ties are directed by the conscious brain. But
once a person gains expertise, as it happens
after we learn to ride a bicycle smoothly, it is
the non-conscious part of the human brain
that takes charge.
Almost all human behaviour is managed at
and what they really do.
Attempts to make the
serve us better
non-conscious processes in
the human brain more con-
and address a
scious could have disas- known human
trous consequences. For
example, research has deficiency
shown that when expert
golfers were asked to take
more time to think consciously about every
small detail of their shot, their performance
was worse than when they were to take their
shot as quickly as possible. This is because,
when players have lot of time to play their
shots, they tend to overthink their play, and
instead of playing at their non-conscious
plex workings of the human
brain and so providing
explainability for human
decisions is nearly impossi-
ble. Compared to the com-
plex human brain, however,
it might well be easy to
make AI algorithms more
explainable.
XAI’s quest for explainability is not going
to be a smooth ride, though. To attain
explainability in AI systems, one could end up
using simpler forms of machine learning,
such as decision trees, Bayesian classifiers
that can provide better traceability and trans-
parency in their decision making.
uted to it may decrease. Studies have shown
that AI algorithms that are easily understood
are more often overruled by human intuition
than algorithms that are less understood. So
as we improve the explainability of an algo-
rithms, it could negatively affect AI adoption
or the market price AI tools command.
Yet, the lack of explainability of the human
brain is a golden opportunity for the AI indus-
try. If AI companies can develop superior
ways to remove biases from the input data
being used and come up with algorithms that
can explain themselves better, AI may steal a
march over humans. Indeed, AI machines
that compensate for human inadequacies
could serve us humans as useful allies.
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