NEW DELHI, MuMBAI, BENGALuRu, kOLkATA, CHENNAI, AHMEDABAD, HyDERABAD, CHANDIGARH*, puNE*
154
Friday, June 30, 2023
mint primer
Why states are
falling short on
capital spending
BY N. MADHAVAN
Today, Indian states are at the forefront when it comes to capital
expenditure (capex). Aware of this, the Centre has been incentivizing
them in a big way. But the outcome is far from optimal. Mint explains
the importance of capex and the bottlenecks.
How the states fared
Capital expenditure as a % of budgeted, FY23
Top Performers
131
126
119
101
Karnataka Sikkim Arunachal Bihar
Pradesh
What’s the importance
1 of capex?
Capex creates assets. These
improve the efficiency of the
economy: a port will speed up
transportation of goods/people
thereby reducing logistics cost and
a hospital will ensure healthier
human resources. They contribute
to future economic growth: a
factory set up today will create jobs
and its output will add to the gross
domestic product going forward.
Revenue expenditure (salaries, etc)
on the other hand, does not create
any asset and contributes to
present growth—if the recipient
spends the money rather than save
it. Capex, thus, makes an economy
efficient and lays the foundations
for future economic growth.
4 How have states fared
on capex? 5
According to a study by Bank of
Baroda, 25 states (for which data is
available) have cumulatively
achieved 76% of their capex target
in FY23. They had budgeted ₹7.49
trillion and spent ₹5.71 trillion.
Karnataka, Sikkim, Arunachal
Pradesh and Bihar exceeded their
target. Jharkhand, Madhya
Pradesh, Himachal Pradesh,
Chhattisgarh, Tamil Nadu, Gujarat
and Odisha spent over 80% of the
budgeted amount. Andhra
Pradesh was the worst performer
spending just 23% of allocated
fund.
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Recruiters say the April-June quarter
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Sunil Chemmanko-
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Digital breakdowns
the dichotomy in
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ble insights!
livemint.com
Worst Performers
(in %) (in %)
Andhra
23
Pradesh
Tripura 41
Nagaland 48
Haryana 48
Source: Bank of Baroda Research
SARVESH KUMAR SHARMA/MINT
Who should be
2 spending on capex?
Ideally the bulk of the capex
should be done by the private
sector with the government
playing a supportive role.
However, it has been the other way
around in India for some years
now as the private sector, dogged
by over-capacity, is reticent about
investing. As a result, the
government has taken it upon
itself to invest heavily with the
hope that it will trigger private
investment. Here the states have
come to play a larger role as their
combined capex spending is more
than that of the Centre. In FY22
states spent ₹10.5 trillion on capex
compared to the Centre’s ₹8.4
trillion.
3 How are states being
encouraged to spend more?
The Centre is offering states a 50-year
interest-free loan for capex. In FY23 it
approved ₹95,147 crore and for FY24, ₹1.3
trillion has been allocated under the
scheme (₹56,415 crore has already been
approved). The Centre has also been
releasing tranches of tax devolution early
to help states front-load capex rather than
wait till the end of the fiscal.
Why are states falling
short despite support?
Firstly, states are legally mandated
under the Fiscal Responsibility
and Budget Management Act to
keep their fiscal deficit under
control. Unable to reduce their
revenue expenditure on salaries,
pension, subsidies etc, they end up
cutting down on capex to meet the
deficit norms. States, experts say,
are also constrained by a lack of
projects or skills to implement
them. Then there are state-level
political disruptions such as
government instability or elections
which come in the way of decision-
making pertaining to capex.
FRAUD PROTECTION
Join Mint’s Satya Sontanam for an
insightful conversation with Rama-
krishnan Gopalan,
head of products for
India and South Asia
at Visa, a leading
player in the digital
payments industry.
Discover how to
safeguard yourself against credit card
fraud and learn about the concept of
card tokenization.
VOL. 17 NO.
QUICK EDIT
Wordplay
overdone
Buoyed by an election win in
Karnataka, where it ran a
“PayCM” campaign accusing
the state’s since-ousted Bharat-
iya Janata Party government of
corruption, the Congress party
seems to have adopted the same
game in Madhya Pradesh,
which is due for polls soon. Only
this time, it could backfire, with
digital payments firm PhonePe
warning of legal action if its logo
and name aren’t removed from
unsigned election posters that
portray Madhya Pradesh chief
minister Shivraj Singh Chouhan
as asking for “50%” to get work
done “on the phone” (the Hindi
of which is “phone pe”). Unlike
in Karnataka, though, where
wordplay was used that merely
reminded people of another
digital payments firm, an actual
brand has been named here.
Naturally, PhonePe isn’t
amused and has demanded that
these posters be taken down.
Exactly whose handiwork it is
remains hazy, but the offended
company clearly has reason to
protest. Whether it’s an over-
sight or an error of judgement,
Congress will need to respond
because it echoes a campaign it
has run in the past and is seen as
trying to convey a similar mes-
sage. With the country’s politi-
cal battle heating up, our rules
of fair play must prevail.
MINT METRIC
by Bibek Debroy
On Mumbai-Ahmedabad highway, a horse-cart race
Prevented traffic from keeping pace.
A new bridge the racing track,
Like the Benhur race, back to back.
Organizers now police guests, just in case.
QUOTE OF THE DAY
A strong majority of committee
participants expect that it will
be appropriate to raise interest
rates two or more times by
the end of the year.
JEROME POWELL
FEDERAL RESERVE
CHAIR
YOUR ANGEL INVESTORS
Discover the world of angel investing
as we dive into the realm of startup
buzz. Join us to
know about five
influential angel
investors who can
serve as mentors on
your entrepreneur-
ial journey. Listen
in and gain insights from these mod-
ern-day heroes who turn ideas into
success.
 PLAIN FACTS

Data recap: Services

trade, diabetes woes
CURATED BY PRAGYA SRIVASTAVA
very Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you

E delve deeper into the stories reported by Mint in the week gone by. India’s services trade has once again shown impress-
ive performance, helping bring the current account deficit down, while a recent report on diabetes prevalence has been
ringing alarm bells. Meanwhile, bad loans have fallen to a decade low.

Services Dominate Decadal Low

Net inflow of services trade (in $ billion) Gross NPAs of commercial banks as % of gross advances
40 39.1 12

10
30
25.8 8

20 6

4
10 3.9
2

0 0
Jun 2021 Mar 2023 Mar 2013 Mar 2023
Source: CMIE Source: CMIE

EVEN AS India’s merchandise trade had been facing
challenges against the backdrop of the global growth
slowdown, services trade had continued to lend support.
According to RBI data, services surplus rose to $39.1
billion in the quarter ended March from $38.7 billion in
the previous quarter and $28.3 billion in the same quarter
last year. Robust services surplus along with moderation
in merchandise trade deficit helped bring the current
account deficit to 0.2% of the GDP during the quarter.
BAD LOANS in the Indian banking sector have
declined to a decadal low, sidelining earlier worries that
the covid-19 pandemic would lead to a rise. According
to the latest data from RBI, gross non-performing assets
at commercial banks as percentage of gross advances
declined to 3.9% as of March 2023, lowest level seen
since March 2013. The central bank said the gross NPA
ratio of all banks may continue to decline further to
3.6% by March 2024 under its baseline scenario.

Debt Refinancing

14,300
THAT’S THE money Shapoorji Pallonji Group has raised
from a clutch of private credit investors and high-net-worth
individuals, pledging its shares in Tata Sons Ltd as collateral
to primarily refinance its debt, Mint reported. The group’s

crore borrowing comes as it seeks to meet its financial obligations,

including ₹4,400 crore, making a prepayment of around
₹3,250 crore in debt, and obtaining ₹3,000 crore working
capital for its real estate and ports businesses.

Diabetes Worries Freight Slows

Prevalance rate of Total air freight (in metric tonne)
diabetes across 28 states
Rajasthan Himachal 22,00,187
and three UTs (%) 6.8 20,03,123
Pradesh 19,61,112 18,64,544
0-9 10-13 13.5
>17 15,21,424
13-17

Madhya Tripura
Pradesh 11.3
7.1
States marked in grey didn't Telangana
have a survey. All figures are Goa
26.4 9.9 2018-19 2019-20 2020-21 2021-22 2022-23
mean estimates.
Kerala Tamil Nadu (Apr-Mar)
Source: ICMR-India Diabetes Source: AAI
(ICMR-INDIAB) study 25.5 14.4

THE PREVALENCE of diabetes is not new in India but YET TO recover from the pandemic blow, India’s air
a recent study has confirmed the worst. According to cargo exports are facing challenges from the growth
the study by Indian Council of Medical Research slowdown in the US and Europe and higher taxes.

18
(ICMR), over 100 million Indians aged 20 and above are
now estimated to be living with diabetes, while another
136 million are prediabetic. The disease is more
common in southern and some northern states, with
Goa and Kerala faring the worst, followed by Delhi,
West Bengal and Himachal Pradesh.
According to data from Airports Authority of India,
international air freight in 2022-23 not only declined
from the previous financial year but was also sharply
lower than the pre-pandemic levels at 1.9 million metric
tonnes. The industry came under the 18% slab of GST in
October 2022, making air freight costlier.

Capex Support

₹56,514 THAT’S THE amount of capital investment proposals the

finance ministry has approved for 16 states during the
current financial year under its special assistance to states
scheme.The Budget had allocated ₹1.3 trillion as part of the

crore scheme in the form of 50-year interest free loan to help

boost capital spending by the states to support growth.
Proposals have been approved in several sectors including
health, education, irrigation, roads, and railways.

Market Consolidation billion Chart of the Week: Beauty Buzz

Market share (%) of top five electric two-wheeler auto makers As % of total spending on beauty and personal care in 2021
78 Skin care 14
77.8 27
76 Hair care 21
15
74 Colour cosmetics 8
12
72 24
Bath and shower 9
70 10
70.2 Men's grooming
9 India Global
68 11
Oral care 9
66
Apr-Jun Apr-Jun Apr-Jun 12
Others 19
2021 2022 2023
Data till 26 June Source: Vahan, Mint analysis Source: Euromonitor, Nomura

INDIA’S ELECTRIC two-wheeler market is currently MORE AND more celebrities are launching their own
dominated by top five companies and the government products in the beauty and personal care (BPC) industry
action against wrongful claim of subsidies likely has as there is scope for growth, especially in the skin care
accelerated the consolidation in the industry. The top and colour cosmetics segment. India’s
five companies accounted for 77.8% of e-two-wheeler BPC market is currently dominated by
registrations in the June quarter, up from 70.2% in the bath and hair care segments, while
same quarter two years ago, a Mint analysis of Vahan global market is led by skincare.
data showed. Okinawa and Hero Electric dropped out of Follow us on #MintCharts on our
the top five, while Bajaj and TVS secured the top spots. social media handles.
PARAS JAIN/MINT

TOP 5 FAMILY DRAMAS TOP 5 FRENCH FILMS

1 UUNCHAI 4 BALAGAM 3 JOSEP
Language: Hindi, Language: Telugu
1 CLÉO DE 5 À 7 (CLÉO
FROM 5 TO 7) Stars: Sergi López, Emmanuel Vottero,
Platform: Zee5 Platform: Amazon Prime Video Xavier Serrano, Platform: Mubi
Stars: Corinne Marchand, Antoine
Bourseiller, Dominique Davray
2 AYISHA Platform: Mubi 4 J’AI PERDU MON CORPS
(I LOST MY BODY)
Language: Malayalam
Platform: Amazon Prime 2 UN BEAU
MATIN
Stars: Hakim Faris, Victoire Du Bois,
Patrick d'Assumçao, Platform: Netflix
Video
Stars: Léa
3 GAALIPATA 2 5 THIRUCHITRAMBALAM Seydox, Pascal 5 VORTEX
Greggory, Melvil
Language: Kannada Language: Tamil Poupaud Stars: Dario Argento, Françoise
Platform: Zee5 Platform: Sun NXT Platform: Mubi Lebrun, Alex Lutz, Platform: Mubi

This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
 NeW DelhI, mUmBAI, BENGALURU, kOLkATA, CHENNAI, AHmEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 17 NO. 154 Rs. 10.00 . Price with Hindustan Times Rs. 15.50 18 PAGES

Friday, June 30, 2023

Where have all the startup ‘India is a place where P&G can
livemint.com hedgehogs gone? uP12 set up plants for exports’ uP8

SENSEX 63,915.42 499.39 NIFTY 18,972.1 154.7 DOLLAR ₹82.06 ₹0.02 EURO ₹89.86 ₹0.11 OIL $73.92 $0.15 GOLD ₹57,918 ₹0.00

Byju’s exposes gap Limited impact

Though CET-1 ratios will fall by 10-60bps across top banks,
capital levels will remain above regulatory limits
CET-1 ratio (%)
Tata’s Chandra
expresses deep
pain over job
DON’T MISS

in NFRA mandate
Current Post risk weight revision (25 percentage point hike)
HDFC Bank 15.8
ICICI Bank 16.6 scam at TCS
Axis Bank 13.9
Shouvik Das
IndusInd Bank 15.8
Regulator’s oversight extends to listed firms, banks, insurers Kotak Mahindra Bank 20.3
shouvik.das@livemint.com
NEw DELHI
State Bank of India 9.9 ICICI Bank’s board approves
Gireesh Chandra Prasad delisting of stockbroking arm

T
ata Sons Ltd chairman,
gireesh.p@livemint.com BlINDSPoT Bank of Baroda
5
12.7
10
CET-1 stands for common equity tier 1 capital
15 20 25
Source: Macquarie note on 26 June
Natarajan Chandrase- Private sector lender ICICI Bank’s board has
NEw DELHI karan, said he is deeply approved the delisting of the equity shares of
The audit regulator’s oversight doesn’t extend to private limited pained over the discovery that its stockbroking arm, ICICI Securities. As part

T Boom in risky loans

he resignation of Deloitte
Haskins & Sells Llp as the
auditor of Think and
Learn Pvt. Ltd, which
runs the online learning
platform Byju’s, has exposed a gap
companies, no matter how big they are. six employees of Tata Consult- of the deal, shareholders of ICICI Securities
1.44 mn
THE total number of firms
Companies under NFRA's mandate
as of February 2022
101
ancy Services (TCS) Ltd
received favours from staffing
will receive 67 shares of ICICI Bank for every
100 shares held in the broking subsidiary. >P6
(listed, unlisted public
limited, and private limited)
as of January 2023
Unlisted public
limited

1,156
Insurers
and banks
may spur curbs on firms to recruit temporary
workers.
Chandrasekaran, who is also
Northern, western India see first
dip in electricity use in 3 years
in the regulatory framework for the chairman of TCS, assured
auditors, a person informed about
the government’s regulatory
response in the case said.
95%
THE share of
private limited
companies
6,820 unsecured lending shareholders at the company’s
28th Annual General Meeting
of stringent measures to
Electricity use dropped this summer for
the first time in three years in the northern
and western regions of the country as
Total unexpected and repeated rainy spells
The oversight of audit regulator Shayan Ghosh unsecured segments like con- tighten the way it engages with brought some relief from the heat, a Mint
National Financial Reporting THE share of shayan.g@livemint.com sumer loans and credit card the entire network of over analysis showed. >P2
Authority (NFRA) extends only to 37% private limited 5,563 Listed mUmBAI receivables attract 100% and 1,000 staffing firms and
statutory auditors of listed compa- firms in total 125% risk weights, respec- ensure such incidents do not
paid-up capital Reliance Capital’s lenders back

nies, banks, insurers, power utili-
ties, and large unlisted public lim-
ited companies but excludes private
limited companies, no matter how
big they are, the person said on con-
dition of anonymity.
Therefore, NFRA faces a chal-
lenge in looking into the issue of
auditor resignation in this case and
concerns around the delay in finan-
cial reporting, the person said.
This concern around auditors of
private limited companies remain-
ing outside the ambit of NFRA’s
oversight is significant in the con-
text of the rapid growth of the
startup ecosystem and the mush-
rooming of unicorns, many of
NEED FOR IMPROVEMENT
DeloITTe’S exit AuDIToRS of
from Byju’s exposed unicorns remain
oversight gap outside NFRA’s ambit
which remain private limited enti-
ties but raise substantial capital and,
in some cases, have a vast customer
base.
This certainly makes a case for
amending the NFRA Rules of 2018,
which defines the public interest
entities, the auditors of which come
under the regulator’s ambit,
according to the person.
Source: MCA and NFRA
ChANGeS required
to include private
limited firms
SARVESH KUMAR SHARMA/MINT
Emails sent to the ministry of cor-
porate affairs, NFRA, Think and
Learn, and Deloitte on Monday
seeking comments for the story
TURN TO PAGE 8
Byju Raveendran tries to allay
staff concerns >P9
T
he Reserve Bank of India
(RBI) is likely to raise
risk weights on unse-
cured loans by 10-25 percent-
age points to caution banks
against unfettered lending
under this category, bankers
and analysts said.
While risk weights are likely
to increase, leading to more
capital consumption, RBI will
not raise it equally for all cate-
gories of unsecured loans, they
said. The higher the perceived
risk, the greater the risk
weight assigned to a particular
loan category.
Under the current norms,
tively. In September 2019, RBI
reduced the risk weight on
personal loans by 25 percent-
age points.
Analysts said while banks,
especially the private ones,
have been pushing personal
loans and other forms of unse-
cured credit, changes by RBI if
it happens, would not have a
significant impact.
“Personal loans have sub-
stantially grown, but so has our
ability to underwrite them bet-
ter, and while RBI might
increase risk weights by 10
TURN TO PAGE 8
happen again.
“Let me first say that for a
Tata group company, the most
important thing that is
expected of every employee is
ethical conduct and integrity
in operation. That comes first
ahead of any financial per-
formance,” he said in response
to shareholders’ quizzing the
management following the
Mint report on the bribery
scandal involving some staff-
ing firms and TCS employees.
“So whenever there is a vio-
lation of ethical conduct by
TURN TO PAGE 6
IndusInd’s resolution plan
A majority of lenders to Reliance Capital Ltd
have voted in favour of IndusInd Group’s
resolution plan for the bankrupt firm, two
people said. After the voting process ended
on Thursday, it was revealed that 99% of the
lenders supported the plan. >P6
After 6 yrs of GST, ₹1.5 tn monthly
tax revenue is ‘new normal’
Six years after the rollout of the indirect tax
reform, a GST revenue of ₹1.5 trillion every
month has become the new normal and tax
officers are focusing on dealing with
fraudsters who are adopting newer modus
operandi to game the system. >P2

Aspartame sweetener UAE gold imports

possible carcinogen fall despite pact
Reuters Dilasha Seth & Rhik Kundu
feedback@livemint.com NEw DELHI
LONDON

G
old shipments from the

O
ne of the world’s most
common artificial
sweeteners is set to be
declared a possible carcinogen
next month by a leading global
health body, according to two
people with knowledge of the
process, pitting it against the
food industry and regulators.
Aspartame, used in products
from Coca-Cola diet sodas to
Mars’ Extra chewing gum and
some Snapple drinks, will be
listed in July as “possibly car-
cinogenic to humans” for the
first time by the International
Agency for Research on Cancer
(IARC), the World Health
Organization’s (WHO) cancer
research arm, the people said.
The IARC ruling, finalised
earlier this month after a meet-
ing of the group’s external
Aspartame is used in products
like Coca-Cola diet sodas and
Mars’ Extra chewing gum. REUTERS
experts, is intended to assess
whether something is a poten-
tial hazard or not, based on all
the published evidence.
It does not take into account
how much of a product a per-
son can safely consume. This
advice for individuals comes
TURN TO PAGE 8
United Arab Emirates
(UAE) have nearly
halved from the previous year
to a two-decade low in the year
ended 31 March 2023 despite
the concessional duty offered
under the bilateral compre-
hensive trade pact that came
into force in May last year.
Under the India-UAE free- India bought 52.8 tonnes of gold
trade pact, a concessional tariff from Abu Dhabi in FY23. ISTOCK
is applicable on the first 120
tonnes of gold imports in the gold import from the UAE since
first year, referred to as the tar- FY03, when it was 18 tonnes.
iff rate quota (TRQ). However, India’s overall gold
In FY23, India imported only imports dropped by 23% in
about 52.81 tonnes of gold from FY23 to 677 tonnes from 878
Abu Dhabi, one of the seven tonnes in the previous year.
emirates that constitute the During this period, Switzerland,
UAE, the data showed. That is India’s largest source of gold
47% lower than 99.86 tonnes imports, saw its shipments fall
imported during the previous
year. It is also the lowest annual TURN TO PAGE 8

Hotel demand soars as travellers return

Varuni Khosla the Kashmir valley, such as
varuni.k@livemint.com Travel rebound Skyview by Empyrean at Patni-
NEw DELHI
Despite higher airfares, travel demand has seen a threefold top in Jammu, saw a 29%
increase this summer
Fares (in )
increase over last season. Both

T
he Khyber Himalayan
Resort & Spa in Gulmarg,
Jammu and Kashmir, has
witnessed a surge in demand
this summer, unlike anything it
has seen in its over a decade of
operation.
In the peak season of April to
June, the hotel has recorded an
occupancy rate of 91%, with
most days sold out. The resort
achieved an average daily room
rate of ₹40,000 this summer,
surpassing previous records.
Families are travelling despite
steep airfares, contributing to
the exceptional performance,
said Vinit Chhabra, the hotel’s
general manager.
Long queues of cars and traf-
fic jams on the highways to hill
stations have become com-
mon, with many families stuck
for hours on the roads. This
demand surge has been partly
2019 summer
Chennai to Srinagar 18,000
Bengaluru to Srinagar 22,000
Mumbai to Srinagar 21,000
Delhi to Bagdogra 10,000
Mumbai to Ladakh 30,000
Delhi to Ladakh 25,000
Mumbai to Chandigarh 14,000
Chennai to Bagdogra 16,000
fuelled by the preference
among Indians for domestic
vacations this year.
An increasing number of
Indians have favoured domes-
tic vacations due to soaring
international airfares and
accommodation costs, further
fuelling the post-pandemic
local travel rebound. In addi-
2023 Change (in %) its tourist ropeway lines and its
45,000 150
cottage rooms have reported
95% occupancy in the past two
48,000 118 months. It is averaging 14,000
42,000 100 travellers a month on its leisure
ropeway project located at a
20,000 100 two-and-a-half-hour drive
48,000 60 from Katra.
40,000 60
Many other destinations,
such as those in Himachal Pra-
21,000 50 desh and some in the South,
22,000 38 have clocked three times the
Source: Thomas Cook India
revenue in the period from the
preceding three months. Loca-
tions like Mussoorie, Kodaika-
tion, delays in visa approvals for nal, and Chikmagalur led the
Europe and other Western surge with almost a fivefold
countries are prompting Indi- surge in bookings over the pre-
ans to opt for local travel or vious quarter, followed by
visa-friendly destinations in Munnar in Kerala, said online
Southeast Asia. travel agency, Cleartrip. The
Locations in India are run- prices have been 15% higher
ning absolutely full, travel than last year, but this has not
agencies said, despite the high
room rates. Other businesses in TURN TO PAGE 8

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 02 FriDay, 30 JuNe 2023
New Delhi ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
US Supreme Court bans the use of
Rain plunges electricity use
race in university admissions
New Delhi: The US Supreme Court on Thursday banned the use
of race and ethnicity in university admissions, dealing a major
blow to a decades-old practice that boosted educational opportu- Western disturbances believed responsible for wet weather; South and East India saw an increase in energy use
nities for African-Americans and other minorities. The court’s
conservative majority again demonstrated its readiness to scrap
liberal policies set in law since the 1960s. PTI Manjul Paul & Tanay Sukumar many industries to a standstill. sumption, as seen in the analy-
NEW DELHI Consumption has been rising
consistently since then as the
Rain respite: first time in three years sis.
Another important measure

E
Kasargod-Trivandrum is the best lectricity use dropped economy recovered, with an Despite heatwaves in some Many states saw a drop in electricity use this summer of electricity use is peak power
this summer for the 18.4% growth in 2021 and demand, which is the instant
performing Vande Bharat Express first time in three 14.4% in 2022 in the summer
parts, electricity use dropped
this summer in the northern
Year-on year change (%) in electricity consumption across states in 2023
with the highest simultaneous
PTI
years in the northern months analyzed. and western regions of India. -11.9 demand. India hit a peak
and western regions Regions other than the Punjab -10 0 10 power demand of 223.2 giga-
North-east, South and East still
of India as unexpected and West and North continued to consumed more power. -6.7 watts this season on 9 June at
repeated rainy spells brought see an increase in energy use. Rajasthan -12.9 2.52 pm. Yet, this fell short of
Delhi
some relief from the heat, a The South used 8.7% more the 230-GW projection made
Mint analysis showed. electricity, the East 5.6% more, in February by the Central
The northern region used and the North-east 4.7% more Electricity Authority (CEA),
140 billion units of electricity in the period. Overall, India’s the electricity regulator.
between 1 March and 25 June, electricity consumption was Despite the minor increase
a 7.4% drop from the same 508 billion units, up 0.5%. in total energy consumption,
period in 2022. The western Electricity is measured by -1.4 peak power demand was the
Odisha
region used 157 billion units, kilowatt-hours, the unit that highest ever. The figure in the
down 1.9%. monthly power bills are 15.9 first half of 2022 was 211.9 GW.
New Delhi: The Kasaragod-to- Trivandrum train in Kerala The biggest based on. An aver- Karnataka 8.8 This is because electricity
Andhra
is the best-performing Vande Bharat Express with an aver- declines were age Indian used Pradesh Data for 1 March to and power are different meas-
age occupancy of 183% among the 23 pairs of such trains
running across the railway network, according to official
seen in Delhi
(12.9%), Chandi- 7.4%
drop in power use
371 kWh of elec-
tricity in the 1
25 June. The data for
Jammu and Kashmir
and Ladakh
is reported together.
ures. Peak power demand is
measured in watts, and a
data.The Vande Bharat Express from Trivandrum to Kasa- garh (12.2%), March-25 June power demand of 1 kW sus-
ragod, with an average occupancy of 176% is the next best- Punjab (11.9%), in North as against period this year. tained for 1 hour leads to a con-
performing train, followed by the Gandhinagar-Mumbai and Haryana same period in ‘22 The West, South Northern states' electricity usage in summer 2023 However, India's peak power sumption of 1 kWh of electric-
Central Vande Bharat Express with an average occupancy (7.3%). Twelve and North were fell, as did western states' demand continued to rise ity. Power demand is like a
Region-wise per capita electricity used during March-June (in kWh) India's peak power demand met, Jan-Jun (in gigawatt)
of 134%. PTI other states wit- the biggest per-cap- vehicle’s speed at an instant,
600 2019 2020 2021 2022 2023
nessed a decline in ita consumers of electric- 211.9 223.2 and electricity consumption is
energy consumption, includ- ity—518 kWh, 501 kWh, and 182.5 176.4 191.2 like the total distance covered
Paracetamol maker Granules India ing Uttar Pradesh, Rajasthan, 327 kWh in the 117-day period. 400 over time.
Gujarat and Maharashtra. The The off-season rain in April Seven of the 32 states and
warns of loss due to cyber attack analysis is based on daily data and May is likely to have Union territories considered
200
Bengaluru: Granules India on Thursday warned of a significant reported by the Grid Control- resulted in reduced use of for analysis have shown a year-
loss of revenue and profitability due to a cyber attack that the ler of India. cooling appliances this sum- 2019 2020 2021 2022 2023 on-year decline in peak power
pharmaceutical company faced late last month. The IT security To be sure, some parts of the mer. This year, India has wit- 0 1 GW = 1 million kW. 1 kW is the demand, which demand so far in 2023. In
North East North-east South West
incident caused a major disruption in its business operations, the country, including Uttar Pra- nessed a large number of west- when sustained for 1 hour, leads to electricity
consumption of 1 kWh.
2020, 14 states reported a
Period considered for analysis: 1 March to 25 June every year.
paracetamol maker said in an exchange filing. PTI desh and eastern parts, also ern disturbances, a recurring Source: Grid Controller of India, CMIE, Mint calculations Map data: © OSM
decline in peak power demand
experienced heatwaves this weather phenomenon in the first half of the year.
SARVESH KUMAR SHARMA/MINT
summer. believed to be responsible for The arrival of the Southwest
UN gives clean chit to India on The last time electricity use the unusual weather pattern. to a dip in demand for states CRISIL Market Intelligence the states with a high share of monsoon in several parts of
saw a decline was in 2020 May alone saw six instances of with a high share of domestic and Analytics. She cited Uttar domestic consumption. the country is set to bring relief
‘kids in conflict areas’ report when the lockdown in the western disturbances. consumption,” said Hetal Gan- Pradesh, Rajasthan, Madhya Indeed, these states saw in temperatures.
REUTERS
summer months brought “Unseasonal rains can lead dhi, director of research at Pradesh and Maharashtra as declines in electricity con- manjul.paul@livemint.com

Rules for discoms to India, Israel to boost ties in agriculture

ensure power supply Puja Das & Shashank Mattoo
NEW DELHI
recyclable. “We have the sim-
plest greenhouse technology
of several different green-
Staff writer

I
electricity regulatory commis- ndia and Israel are planning houses across the globe. It is
feedback@livemint.com sion or the joint electricity reg- a slew of initiatives to bol- not because it is cheap but it
United Nations: UN Secretary-General Antonio Guterres NEW DELHI ulatory commission. The com- ster their cooperation in benefits farmers,” Eshel said.
has removed India from his annual report on the impact position of the contracts will agriculture, said Ohad Nakash “We have a total of 72 plans to

P
of armed conflict on children, citing measures taken by the ower distribution compa- depend on the load- curve of Kaynar, Deputy Chief of Mis- improve yields of flowers, veg-
Indian government to better protect them. India was men- nies will have to secure each distribution utility, the sion at Israel’s Embassy in New etables and fruits.”
tioned in the report of the Secretary-General on Children 75% of their required guidelines said. Delhi. Additionally, Israel plans to
and Armed Conflict since 2010 along with other countries capacities through long-term “The share of long-term con- The two countries are plan- expand its Villages of Excel-
of Burkina Faso, Cameroon, Lake Chad basin, Nigeria, contracts, according to new tracts is suggested to be at least ning to push high-level agri- lence Programme. The pro-
Pakistan, and the Philippines for alleged recruitment and power ministry guidelines, so 75% of the required capacities cultural technology coopera- gramme, which was
use of boys by armed groups in Jammu and Kashmir; that adequate availability of as per LT-DRAP or as specified tion between Israeli institu- announced in 2022, aims to
detainment of boys by Indian security forces in J&K for power can be maintained dur- by the respective SERC/JERC. tions and the Indian Council of convert 150 villages into
their alleged association with armed groups, or on national ing peak demand seasons. The medium–term contracts Agricultural Research (ICAR). model villages through Israeli
security grounds. PTI According to the ‘Guidelines are suggested to be in range of In recent years, both sides Ohad Nakash Kaynar, deputy chief of mission at Israel’s Embassy technical support on key agri-
for Resource Ade- 10-20% while the have worked closely on water in New Delhi, says crop yield may be increased up to 30-35%. technologies.
quacy Planning The guidelines rest can be met reuse, fertigation, soil man- According to Eshel, Israel
Internet shutdowns cost $1.9 bn to Framework for have been through short- agement, drip irrigation, canopy irrigation and mulch,” properly. “We introduce the hopes to expand the number
India’, all power term contracts,” it desalination, advanced filtra- said Israel Agriculture Attache idea of the technology to farm- of villages to 270 by next year.
India in Jan-Jun 2023 discoms shall
framed under
said. tion, advanced water leakage Yair Eshel. ers, and they can adopt it by Eventually, the number of vil-
the Rule 16 of
Mumbai: Internet shutdowns by law enforcement agencies like undertake a The guidelines, detection, soilless agriculture, Mulch is one of the effective purchasing it from anywhere lages is expected to grow to
Electricity
the one in Manipur and Punjab cost $1.9 billion to the Indian resource ade- have been framed rainwater collection and treat- technologies that they want or find around 1,500 by 2026.
economy in the first half of 2023, a report said on Thursday. The quacy plan (RAP) (Amendment) under the Rule 16 ment systems and water secu- is benefitting In recent years, it cheap,” said Israel may also expand the
shutdowns also led to a loss of nearly $118 million in foreign for a 10-year hori- Rules, 2022 of the Electricity rity technologies. Indian farmers in both sides have Kaynar. number of its Centres of Excel-
investment and triggered over 21,000 job losses, the global non- zon, known as (Amendment) Israel also plans to dramati- saving water and worked closely on “The yield of lence for agriculture, which
profit Internet Society said in its report ‘Netloss’. PTI long-term Distri- Rules, 2022 cally step up its presence in the protecting crops water reuse, c r ops may stand at around 30 at present.
bution Licensee Resource Ade- which were notified on 29 country. from weeds, so increase up to The Israeli Centre of Excel-
fertigation, soil
quacy Plan (LT-DRAP) to meet December 2022.The Central Representatives of Israel in that they can save 30-35% by using lence, an Indo-Israel Agricul-
Cube Highways secures ₹1,030 cr their own peak and electrical Electricity Authority (CEA) will India keep visiting universities on chemicals and management and all tools, includ- ture Project, seeks to bring
energy requirement. publish the Long-term and all 14 ICAR centres across reduce weeds, drip irrigation ing drip irriga- best practices and useful agri-
funding from IFC The discoms are meant to National Resource Adequacy the country and provide tech- while ensuring tion, canopy irri- cultural technologies to Indian
New Delhi: Cube Highways Trust (Cube InvIT), managed by demonstrate their plan to meet Plan (LT-NRAP) which will nology-based courses for stu- more moisture gation and farmers.
Cube Highways Fund Advisors Pvt. Ltd., has secured ₹1,030 crore their peak demand and energy determine the optimal plan- dents and farmers. “Last year, and increasing productivity mulch,” Kaynar added. These centres are spread
through long-term listed non-convertible debentures (NCDs) requirement with a mix of long- ning reserve margin require- we trained about 170,000 stu- and quality. With the Israeli technologi- across the country, with a
from the International Finance Corporation. The transaction was term, medium-term and short- ment at the all-India level con- dents and farmers about our Mulch is very cheap and cal intervention in the green- strong presence in Haryana
finalized on 28 June. The funds raised through this deal will be term contracts, including forming to the reliable supply technological solutions on recyclable. This can be used house segment, sustainability and Maharashtra.
utilized for a SPV owned by Cube Highways Trust. STAFF WRITER power exchanges, to the state targets. greenhouse, drip irrigation, for 2-3 years if you maintain it can be achieved as those are puja.das@livemint.com

After six years of GST, ₹1.5 tn monthly tax revenue is the ‘new normal’ CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
PTI cers have started using data est businesses, Srivastava the corner a wait-and-watch the apex decision-making suggestions or complaints
feedback@livemint.com analytics, artificial intelligence added. approach needs to be adopted body with regard to policy about errors.
and machine learning aiming Issues like rationalization of to see if the government at all making and GST rate deci-
Readers can alert the

S
ix years after the rollout
of the biggest indirect tax
reform in India, a Goods
and Services Tax (GST) reve-
nue of ₹1.5 trillion every
month has become the new
normal and tax officers are
focusing on dealing with
fraudsters who are adopting
newer modus operandi to
game the system, causing loss
to the exchequer.
To apprehend fraudsters,
who operate in syndicates and
create fake entities on the basis
of forged documents to claim
input tax credit (ITC), tax offi-
to curb evasion, which is over
₹3 trillion since the inception
of the GST. It was over ₹ 1 tril-
lion in 2022-23.
Thinktank Global Trade
Research Initiative (GTRI) said
the most critical pending GST
reform is upgradation of the
GST Network to prevent fake
supplies and fraudulent claims
of Input Tax Credit (ITC).
“Data analysis and physical
checks alone cannot com-
pletely solve the problem. The
GSTN should enable linking of
invoice level information filed
for claiming ITC by buyer
tax rates and slabs, levying
GST on petrol, diesel and ATF,
are still pending. Tax experts
are of the opinion that the GST
Council must pursue these
reforms to make GST more
inclusive.
However, in an election
year, it is unlikely that the
Tax officers are using data analytics, artificial intelligence and Centre and states will go ahead
machine learning to curb tax evasion. ISTOCK with these reforms.
Tanushree Roy, Director -
(from GSTR 3B) with the infor- GSTN is unable to connect the Indirect Tax at Nangia Ander-
mation provided by input sup- supplies in a value chain, sen India, said simplification of
pliers (GSTR 2A and GSTR resulting in significant reve- the GST rate structure would
2B),” Srivastava said. nue loss to the government provide a fillip across sectors.
Even after six years, the and causing problems for hon- However with elections round
decides to take up this issue.
“Some of the areas on which
industry expects more clarity
from the GST Council and
should be considered on prior-
ity pertain to levy/applicability
of GST on winnings from
online gaming; transactions
involving cryptocurrency; EV
charging infrastructure, and
setting up of GST appellate tri-
bunals,” Roy said.
The GST Council which is
chaired by finance minister,
has met 49 times since it was
set up in September 2016.
The members of the council,
sions, include finance minis-
newsroom to any errors in the
ters from all states and UTs, paper by emailing us, with your
besides the minister of state full name and address to
for finance. feedback@livemint.com.
A nationwide GST, which
subsumed 17 local levies like It is our policy to promptly
respond to all complaints.
excise duty, service tax and Readers dissatisfied with the
VAT and 13 cesses, was rolled response or concerned about
out on 1 July 2017. Mint’s journalistic integrity may
Under the GST, a four-rate write directly to the editor by
structure that imposes a low sending an email to
rate of 5% tax on essential asktheeditor@livemint.com
items and a top rate of 28% on Mint’s journalistic Code of
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The other slabs of tax are 12 www.livemint.com
% and 18%.

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S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%)

63915.42 1.07 18972.10 1.07 16277.20 0.85 43465.45 0.18 18901.20 0.95 28584.84 0.91 32437.88 0.21
1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%)

2.26 10.94 2.56 11.92 3.70 14.53 4.27 17.53 2.76 12.54 6.65 21.91 7.54 24.00
6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%)

4.93 20.19 4.69 19.70 5.47 20.89 2.85 17.67 3.45 18.07 13.24 29.75 13.24 29.93

m MINT SHORTS
Dealmakers are adrift as $1 tn
Easing costs give paint cos less relief
vanishes in first half of year Harsha Jethmalani
Bright spots would mark the culmination of two fac- offerings, paint companies are also
The world’s dealmakers are roughly $1 trillion down in harsha.j@htlive.com tors: easing costs and Grasim’s product entering adjacent categories such as
one of the worst years for takeovers and stock market lis- The prices of crude-based chemicals used by paint and adhesive firms pricing,” he added. waterproofing. Notably, the paint

L
tings in a decade. That’s the year-on-year drop in the ooming concerns of a global
value of mergers and acquisitions and initial public offer- recession have weighed on
ings in the first half, a period in which inflationary pres- crude oil prices. Brent crude
sures, financing constraints and geopolitical tensions prices have dropped by 13% so
nixed activity across regions and sectors. And with the far this year. So, prices of crude-
traditional summer lull on the doorstep, and fears of a based derivatives have eased. This is
recession lingering, the next six months could bring good news for the margin outlook of
more pain on Wall Street, where banks have already been paint and adhesive companies. Prices of
slashing bonuses and jobs in response to the slump. titanium dioxide and vinyl acetate mon-
“Deals are being delayed,” said Dominic Lester, head of omer—key input chemicals for these
investment banking for Europe, the Middle East and companies—have moderated lately.
Africa at Jefferies Financial Group Inc. “Boards are hav- But this time around, other factors
ing difficulty valuing assets, and are therefore taking could partially offset the benefits of eas-
longer to commit to transactions.” Deal volumes are ing input costs. “The benefit that paint
down 42% year-on-year at $1.3 trillion. BLOOMBERG companies would derive from moderat-
ing prices of crude-derivatives would
largely be offset by higher selling
expenses due to aggressive sales push
and increase in advertising spend by
companies to counter competition from
new entrants,” Poonam Upadhyay,
director, Crisil Ratings, said.
In the March quarter earnings call,
the management of Asian Paints Ltd, a
leader in decorative paints, said it is
looking to spend on advertisements to
propel demand. Similarly, close com-
petitor, Berger Paints (India) Ltd said its
ad spends as a percentage of sales are
have moderated. Grasim Industries Ltd and JK Cement industry is said to have high entry barri-
Brent crude (in $/barrel) Vinyl acetate monomer Titanium dioxide (in $/tonne)
Ltd have allocated capital expenditure ers, so the fight for market share is
(in $/tonne) for their entry into the paints sector. feared to translate into an increased
140 3,500
2,500 With the launch of Haisha paints, Fevi- pricing pressure. Thus, hurting profita-
3,261.96
col-maker Pidilite Industries Ltd has bility of incumbents.
3,200
also entered the decorative That is not all. “The aver-
120
2,000
paint category. “Notably, MUTED age rupee-dollar exchange
1,983
Pidilite is not looking at a COLOURS rate is likely to remain high
2,900 full-fledged paints foray; at ₹82-83 per dollar even in
paints business is more for AGGRESSIVE sales FY24 impacting the cost of
100 1,500 ‘range completion’. Grasim, push and rise in ad
spends may offset
imported materials. Domes-
2,600 meanwhile, has a presence benefits of input tic paint companies import
in white cement and putty; costs cuts almost a third of their overall
80
in paints, it will have to start raw material requirements,”
1,000
2,300 from scratch and convert NEW entrants may Crisil’s Upadhyay said.
78.4 force incumbents to
880 wholesale distribution to protect market share Meanwhile, demand for
74.06 2,252.35 direct while building brand with ads and decorative paints is
60 500 2,000 recall. We believe Grasim is discounts for dealers expected to be reasonable in
03 Jan 2022 29 Jun 2023 31 Jan 2022 31 May 2023 03 Jan 2022 19 Jun 2023
likely to be much more FY24, but potential risk
Source: Bloomberg
aggressive in paints than from an El Niño event on
SATISH KUMAR/MINT
Pidilite,” a Nuvama Research report rural demand remains. FY24 growth is
ahead of pre-covid levels with the com- half,” Jay Gandhi, analyst at HDFC said. In this backdrop, protecting mar- expected to be largely volume-led.
pany seeing saw marginal increase in TV Securities Ltd said. That said, it remains ket share would be crucial. For that But shares of paint companies have
ad spends and substantial growth in dig- to be seen if some of this is passed-on to companies are expected to step up been resilient. In the past one year,
ital spends. customers by reducing prices.“That advertisement spends for brand build- stocks of Asian Paints, Berger Paints and
“We are factoring 150 basis points would depend on how aggressive ing in a run-up to the upcoming festival Kansai Nerolac Paints Ltd have gained
improvement in gross margin in FY24 Grasim gets with its pricing strategy. season. Plus, dealer discounts or 23%, 16% and 21%, respectively. Valua-
aided by easing input costs, which will Historically, price cuts in paints have schemes are likely to be introduced. tions of paint stocks are not by any
come gradually, mostly in the second been rare and this time, if it happens, it Interestingly, to expand their product means cheap, according to Gandhi.

Eurozone consumers’ inflation expectations have

dropped to the lowest since 2016. AP SRF’s chemicals biz may drive growth but margins are sore point
Eurozone consumers inflation Bavadharini KS ings before interest and tax (Ebit). ness growth would be aided by domestic market. Chemicals
Key catalyst
expectation gauge slumps bavadharini.ks@livemint.com Year-on-year, both segments saw
SRF’s chemicals business is expected to continue to drive growth
continuous capital expenditure business comprises specialty
Eurozone consumers’ inflation expectations dropped a drop of about 900 basis points (capex) and new product laun- chemicals and fluorochemicals
in FY24.

S
to the lowest since 2016 in a gauge compiled by the hares of SRF Ltd have been each in Ebit margin in FY23. ches. For FY24, the company has (including refrigerant gas).
European Commission, suggesting price increases flat in the past one year and Outlook largely remains dull. Chemicals revenue Ebit (in  crore) planned capex of ₹2,500 crore, “The refrigerant gas prices
aren’t becoming entrenched in the economy. The are now nearly 20% lower “The packaging film segment is 8,000 out of which the lion’s share will have seen some correction in the
measure fell to 6.1 in June, down from 12.1 the prior than its 52-week highs of ₹2,865 expected to witness moderate be for chemicals. It plans to com- past few months,” Rohan Gupta,
6,000
month, according to the release published in Brussels apiece seen in September. While growth going ahead as margin mission 10 plants in FY24 in seg- director, Nuvama Institutional
on Thursday. The index reflects survey responses on the company’s chemicals busi- pressure is likely to continue for 4,000
ment, launch 7-8 active ingredi- Equities, said. “With weak
households’ views of where inflation will be in a year’s ness is on a reasonably good the near term. Increasing share ents in agrochemical and demand currently in exports and
time. The news will provide reassurance to the Euro- footing, the problem is that of value-added products and 2,000 increase focus on pharma seg- domestic, prices may remain
pean Central Bank, which has made such measures a SRF’s other two segments, tech- operational efficiency will aid ments. Management expects under pressure with further price
central plank of its policy monitoring as it tries to bring nical textiles and packaging films profitability,” said Motilal Oswal 0 chemicals revenue growth of correction. It remains to be seen
FY18 FY19 FY20 FY21 FY22 FY23
consumer prices under control. “We must ensure that businesses have not been firing Financial Services analysts in a over 20% in FY24. In FY23, this if demand recovers after
Note: Ebit is earnings before interest and tax Source: Company, Motilal Oswal Financial Services
inflation expectations remain anchored as the wage enough. 27 June report. “The technical segment’s revenue grew 41% Q2FY24,” he added. All said, lin-
catch-up process plays out,” ECB president Christine Weaker demand and higher textile business is expected to SATISH KUMAR/MINT
year-on-year. gering margin pressures are
Lagarde said on Tuesday. “While we do not currently input costs have weighed on recover on the back of improv- under pressure due to cheap business is expected to continue However, in the June quarter likely to keep sentiments for the
see a wage-price spiral or a de-anchoring of expecta- these businesses in FY23. These ing NTCF demand and capacity imports from China.” Nylon to drive growth in FY24 as well, (Q1FY24), performance of refrig- stock subdued in near term even
tions, the longer inflation remains above target, the segments contributed 25.6% of addition in belting fabrics seg- Tyre Cord Fabric is NTCF. though margin trajectory could erant gas business could be soft after last one year’s returns have
greater such risks become.” BLOOMBERG SRF’s FY23 consolidated earn- ment. Margins are likely to stay Further, SRF’s chemicals be a dampener. Chemicals busi- owing to erratic weather in been muted.

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

Adani Total Sebi says MFs don’t

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₹20,000 cr PTI
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arkets regulator Sebi TOP COUNTRIES
Mayur Bhalerao does not see any need

1 2 3
INDIA retained first spot with an BRAZIL kept its second spot, being INDONESIA ranked third as
mayur.bhalerao@livemint.com for giving more time to impressive GDP growth in March the only country to stage double-digit inflation remained under control,
MUMBAI mutual fund houses with large quarter. PMI remained high and exports growth. Inflation eased and exports growth returned to
holdings in the merger-bound stock markets outshone peers. marginally, and stock markets surged. positive territory.

A
dani Total Gas Ltd HDFC twins, to realign their
(ATGL), a joint venture portfolios post-merger since
between Adani Group there’s no material data and
and French energy behemoth given the highly liquid nature Composite Real GDP PMI Export CPI Import Exchange rate Stock market
TotalEnergies, plans to invest of these stocks demanding index score, growth manufacturing growth inflation cover movement** capitalization**
₹18,000-20,000 crore in the such an extension. Country May 2023 (y-o-y, in %) (y-o-y, in %) (y-o-y, in %) (no. of months) (m-o-m, in %) (m-o-m, in %)
next 8-10 years to build infra- In the biggest merger in the HDFC twins’ merger is
structure for its gas distribution history of India Inc, HDFC in expected by 1 July.
business, said Parag Parikh, April 2022 said it would merge
MINT
INDIA 74 6.1 58.7 -10.2 4.3 11.2 -0.4 4.2
CFO, ATGL, in a note in the with its own banking subsidiary not demand that mutual funds
company’s FY23 annual report. in a $40-billion all-stock deal— should be given more time to
The company, which cur-
rently has a network of 460
after 46 years of being a home realign their portfolios after the
loan financier and in between merger of the HDFC twins.
BRAZIL 71 4 47.1 11.6 3.9 17 0.8 4

compressed natural gas (CNG)
stations and 700,000 domestic
consumers of piped cooking
creating the country’s largest “There is no material evi-
private sector bank and four dence to suggest that the
other financial sector brands in merger and the resultant
INDONESIA 59 5 50.3 1 4 7.9 0.1 -0.1

gas, said it will use the invest- the insurance, AMC and bro- increase in their holdings in the
ment to add more CNG stations
and expand its network of gas
kerage businesses. much larger HDFC Bank needs
And on 27 June, HDFC any special attention since only
MEXICO 56 3.7 50.5 -2.6 5.8 4.2 2 1

pipelines. chairman Deepak a few schemes will

“We intend to build over
3,000 electric vehicle charging
Parekh said the Another reason is have marginally
boards of the Cor- larger than the
THAILAND 55 2.7 58.2 -7.6 0.5 9 0 -2.2
that the HDFC
points across India; we are poration and twin stocks are so permissible 10%
commissioning one of India’s
largest biomass plants at Bar-
HDFC Bank will
meet on 30 June
liquid there is no holding,” she said,
adding “and none
PHILIPPINES 54 6.4 52.2 -20.2 6.1 9.9 -0.9 0
reason to worry
sana in Uttar Pradesh with a to finalise the last of them will have
starting capacity of 600 tonnes
per day,” Parikh said. The com-
contours of the
merger which is
about market
demand
more than 12%
holdings in the
CHINA 49 4.5 48.8 -7.5 0.2 15.3 -1.5 -4.3

pany is optimistic about the expected to be merged bank.”

future of gas in India, as the
government is looking to
effective 1 July. She further
He has also said that would said, another reason is that the
MALAYSIA 37 5.6 47.8 -17.4 3.3 5.4 -2.1 -2.7

increase the share of natural be the last meeting of HDFC HDFC twin stocks are so liquid
gas in the country’s energy mix
to 15% by 2030, from 6% now.
board and also his as chairman there is no worry about market
after working in the company demand. Moreover, there are
TURKEY 12 4 51.5 -17.1 39.6 1.8 -2.1 -8.9

ATGL has invested at least
₹1,150 crore to create additional
infrastructure in FY2023 and
now waits for clarity on allega-
tions made against Adani
Group by short seller Hinden-
burg Research on 24 January.
This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
from day one of its inception in already existing exceptions in
October 1978. place and fund houses already Scoring method: The best-performing economy's value on any given indicator gets a score of 100, the worst one gets zero, and the rest are interpolated linearly for their relative scores.
A country's composite index score is the simple average of its seven indicator scores. Latest available data used (as of 28 June 2023). Scores/ranks may change as more data comes in.
After a marathon board have three months to realign. *Russia has been dropped from the tracker temporarily as some data has not been reliably available since the Ukraine war began.
meeting, Sebi chairperson She admitted that mutual
Source: Bloomberg, Mint calculations **Change in monthly average. Exchange rate is against US dollar.
Madhabi Puri Buch told report- funds umbrella body Amfi had
ers late last night at her head- sought some special dispensa- Data: Payal Bhattacharya; Graphics: Paras Jain
quarters that “available data do tion to realign their portfolios.
 LIVEMINT.COM
How technology helps to handle
fraud and scale up digital payments
I
ndia is spearheading the
global digital economy, with
approximately 70 billion
digital payment transactions
recorded in 2022—the highest
globally, according to Statista.
This remarkable figure repre-
sents substantial growth com-
pared to the corresponding
number of 44 billion in 2021.
However, with the emer-
gence of a digital-first econo-
my,organisationshavebecome
increasingly vulnerable to
payment data breaches. The
shifttoremoteaccesshasmade
it easier for unauthorised indi-
viduals to exploit digital pay-
ment systems for malicious
purposes, as the boundaries of
organisation firewalls are no
longer a strong deterrent. This
widening scope has provided
fraudsters with more oppor-
tunities to carry out illicit
activities within digital pay-
ment systems.
With this, a growing num-
ber of payment processors are
incorporating AI into their
operations to enhance their
understanding, streamline
transactions and intensify
security measures.
Shedding some light on
these areas, Sathyan S, Head
of Data Science/ AI,
Thoughtworks India; Vinod
Sankaranarayanan, Head of
Digital Public Goods and
Infrastructure,Thoughtworks;
and Leslie D’Monte, Senior
Associate Editor, Mint took
partinanintriguingdiscussion
on the topic, How Tech Helps
to Handle Fraud, Scale Up
Digital Payments on 9 June
2023, in Bengaluru at the Mint
Digital Innovation Summit &
Awards.
Leslie D’Monte provided
brief insights into the growth
of NPCI and UPI in India. He
mentioned that UPI witnesses
aboomofastaggering 8billion
transactions every month.
Managing such a massive scale
requires significant
This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
FriDay, 30 JuNe 2023
New Delhi 05
technological infrastructure experience. people in India have embraced
to ensure the seamless opera- Additionally,LeslieD’Monte these advancements. He
tion of payments. How does inquired about the utilisation
technology handle and enable of generative AI in addressing
emphasised the fact that the
general population had shown THE MSME COMMUNITY IS
the smooth functioning of UPI challenges within the wider remarkable progress, surpass- THE SPINE OF OUR ECONOMY.
at this scale? digital goods sector. In ing even Indian corporates in
Sathyan S responded that response, Sathyan S highlight- their utilisationof AI. AND WE’RE PROUD
NPCI,incollabo- ed the specific In the subsequent topic of TO HAVE YOUR BACK .
ration with focus on leverag- Innovation Comes at a Cost,
Thoughtworks, inggenerativeAI Vinod Sankaranarayanan We reaffirm our commitment to your
is focused on for fraud man- addressed the upfront transac- big dreams with our Business Insurance
building engi- a ge m e n t . He tion cost involved in UPI. He Solutions.
neeringcapabili- Summit and Awards mentioned that emphasised the need for UPI Year after year, the collective might of the MSME community
ties, specifically they are cur- to engage with multiple banks has driven India's economic progress. And the risks you
in the domain of AI engineer- rently operating in an experi- and build an entire ecosystem, undertake help achieve this mammoth feat. This is why
ing, to address scaling. mental realm, primarily work- requiring active participation we are proud to secure these risks and safeguard your
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mately 95,000 actively working ascertain cost associated with UPI trans- path to success. It's our way of saluting the big contribution
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taining to UPI possibilities of action is relyonmachinelearningmod-
#
and other sec- generative AI to fraudulent. els. Inference processes are Business Insurance Solutions
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 06 FriDay, 30 JuNe 2023
New Delhi
ICICI Bank approves
delisting of brokerage
For every 100 shares of the co, investors will receive 67 shares of ICICI Bank
Mayur Bhalerao
mayur.bhalerao@livemint.com
MuMBAI
P
rivate sector lender ICICI Bank
said on Thursday that its board
has approved the delisting of
the equity shares of its stock-
broking arm ICICI Securities.
As part of the deal, shareholders of ICICI
Securities will receive 67 shares of ICICI
Bank for every 100 shares held in the
broking subsidiary.
In a separate statement, ICICI Securi-
ties confirmed that its board has
approved the delisting.
“Public shareholders of ICICI Securi-
ties will get access to a much larger and
more diversified business with greater
stability in revenue. ICICI Securities’
public shareholders would also receive a
more liquid stock, which is owned by the
public shareholders,” the brokerage sub-
sidiary said.
The delisting is, however, subject to bank.
the necessary approvals from the share-
holders and creditors of ICICI Bank and will not be required to infuse additional ago period.
ICICI Securities, as well as the Reserve capital into the broking arm.
Bank of India, the National Company
Law Tribunal (NCLT) as well as the stock between the bank and its subsidiary, con- the announcement, shares of ICICI Secu-
exchanges.
Following the delisting, ICICI
Securities will become a whol-
ly-owned subsidiary of the
private lender.
“Both companies will be 74.85%
ICICI Bank’s stake
able to leverage the strong
composite proposition to in the brokerage
offer holistic financial servi- arm as on 31 March
ces to both existing and new
customers,” ICICI Bank said in
a statement.
Once the company becomes a 100% ship plan) finance, distribution of finan-
subsidiary, the management expects the cial products, advisory services and mer- stake before 9 September 2024. On 31
entities to better capitalise on the syner- chant banking. On 31 March, ICICI Bank March, the bank held 48.02% in ICICI
gies. ICICI Securities is a low-capital had a 74.85% stake in ICICI Securities.
business and its internal accruals are
more than adequate to fund business net profit of ₹262.7 crore in the three ties ended 1.78% higher, at ₹615.95 apiece
growth, ICICI Bank said, adding that it months to March, down 23% from a year- on the National Stock Exchange.
THE MYSTIQUE
OF WIMBLEDON
At Wimbledon, tennis almost always comes first. Yet, this
cathedral of the game also pulls in millions of pounds in TV
TASTE: The café now
serves cocktails as
well as espresso
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CORPORATE
Reliance Cap lenders back IndusInd bid
Gopika Gopakumar
gopika.g@htlive.com
MuMBAI
A
majority of lenders to
Reliance Capital Ltd
have voted in favour of
IndusInd Group’s resolution
plan for the bankrupt firm, two
people aware of the develop-
ment said.
After the voting process for
the cash-strapped non-bank-
ing financial company ended
on Thursday, it was revealed
that 99% of the lenders sup-
ported IndusInd International
Holdings Ltd (IIHL)’s plan.
Under the proposed plan,
IIHL will offer an upfront cash
amount of ₹9,661 crore to the
lenders. Considering the exist-
ing cash balance of ₹500 crore
on Reliance Capital’s balance
sheet, the lenders’ consortium
will get ₹10,200 crore, which
will be distributed among its
members.
The administrator oversee-
ing the bankruptcy proceed-
ings has acknowledged claims
of ₹23,666 crore from the len-
ders, and the approved offer
Following the delisting, ICICI Securities will become a wholly owned subsidiary of the
MINT I’m deeply pained: Chandra on TCS’s job scam
On 26 June, ICICI Bank had said it FROM PAGE 1
“While there are business synergies plans to delist ICICI Securities. Following
any employee, it pains us. It
solidation by way of a merger is not per- rities rose as much as 15% intraday. pains me and all the leaders
missible on account of regulatory Mint reported that the bank had real- very deeply. And we take it
restrictions on the bank from ized that it is better to make this business extremely seriously. We deal
undertaking securities brok- a wholly-owned subsidiary as most of the with it very strongly.”
ing business departmen- services are intertwined. The idea of get-
tally,” it added. ting it listed five years ago was perhaps to
“We received two whistle-
blower complaints in end-
Established in 1995, the allow the firm to raise funds at a cheaper February and March. And both
company was listed in 2018. rate than unlisted entities. the whistleblower complaints
It offers institutional and Interestingly, ICICI Bank had recently were investigated. The com-
retail broking services, announced its plans to increase stake in plaints were about certain
including margin trade finance its general insurance business, ICICI favouritism being done and
and ESOP (employee stock owner- Lombard, by up to 4% in tranches. certain favours being received
The bank will acquire at least a 2.5% in the recruitment of BAs
(business associates or con-
tract workers).”
Lombard. Chandra, as he is addressed
Meanwhile, ICICI Securities posted On Wednesday, shares of ICICI Securi- by colleagues, explained that
the two whistleblower com-
plaints were pertaining to the
TD Power Systems’ promoters
plan to offload over 24% stake
Ranjani Raghavan
ranjani.raghavan@livemint.com
MuMBAI
T C
D Power Systems Ltd, a
ISSUE OUT producer of AC genera-
TOMORROW
tors and motors, is plan-
ning to offload a 24% stake in
the company, or over 37 mil-
lion shares, as per a term sheet
reviewed by Mint.
The shares are expected to
be sold at a 4.12% discount to
Thursday’s closing price, or for
over ₹800 crore ($98 million).
The stock closed at ₹223.2
apiece on 28 June, according
to the term sheet.
TD Power’s selling share-
holders include Nikhil Kumar,
Mohib Nomanbhai Khericha,
Hitoshi Matsuo, Sofia Mohin
Khericha and Lavanya Sanka-
ran. Currently, the promoters
hold a 58.45% stake, which will
be reduced to 34.45% on com-
pletion of the sale. Khericha is
broadcasting rights and sponsorship deals the chairman of TD Power,
Dior most popular global brand on Insta
Varuni Khosla
varuni.k@livemint.com
new DelhI
D
ior has emerged as the
leading international
luxury brand to receive
the highest number of unique
Instagram mentions and posts
from local influencers, clock-
ing an earned media value of
$26.08 million, according to a
survey by HypeAuditor.
Gucci, Prada, Louis Vuitton,
and Versace were other global
luxury brands to find a place in
the top five for most mentions
by Indian influencers. How-
ever, despite being the third
most popular brand on Insta,
Louis Vuitton was the highest
grosser in earned media value
amassing $30.36 million from
PAUSE: Andrew CULTURE: Siddhartha BUSINESS LOUNGE: these posts. Versace‘s earned
Jefford on wine Basu answers Fireside Ventures’ media value came in third with
writing questions on quizzing Kanwaljit Singh $12.99 million in earned media
value, the researcher said.
While Dior was mentioned
LIVEMINT.COM
However, Reliance Capital’s
sale is awaiting the outcome of
a plea filed by Torrent Invest-
ments in the Supreme Court,
challenging the extension of
the auction beyond the origi-
nal deadline.
IIHL will also seek approvals
from the Securities Exchange
Board of India, the Insurance
Regulatory and Development
Authority of India and Reserve
Bank of India, next week.
During the first auction on
21 December, Torrent Invest-
Following the voting process, it was disclosed that 99% of the ments made the highest offer
lenders backed IIHL’s plan for the cash-strapped NBFC. MINT of ₹8,640 crore, while the Hin-
duja Group firm bid for ₹8,110
from IIHL indicates a recovery ment obligations. Reliance crore. However, within a day,
rate of 43%. Capital had previously offered Hindujas had revised its offer
IIHL’s resolu- a corporate guar- to ₹9,000 crore, prompting
tion plan also Under the antee to the the Torrent Group to contest
takes into account proposed plan, bondholders. the move. The second auction
the Credit Suisse- IIHL will offer an A second per- was held on 26 April.
led bondholders, upfront cash son cited above Even after the revised bids,
who had enforced
amount of ₹9,661 said the approved Torrent’s and Hinduja’s offers
their rights over plan will be sub- are far below the liquidation
37% of the shares crore to the mitted to the value calculated by independ-
pledged to them lenders National Com- ent valuers.
by Reliance Gen- pany Law Tribu- While Duff and Phelps sug-
eral Insurance Co, nal (NCLT) next gested a liquidation value of
due to the failure of Reliance month before the deadline ₹12,500 crore, RBSA pegged it
Home Finance to fulfil pay- ends on 15 July. at ₹13,200 crore.
US and, in India, the company (RMG), on leave and sacked there could be some volatility
has sacked six employees and four employees. on macroeconomic challenges.
blacklisted six staffing firms RMG is the arm of TCS that TCS, which went public in
even as a probe continues recruits contract employees 2004, clocked an 8.6% dollar
against three other employees. and deploys its engineers growth to end with $27.9 bil-
“We cannot across various lion in revenue. The com-
quantify what
TCS, which went projects. TCS has pany’s new chief executive
favours they got,
but they certainly public in 2004,
clocked an
appointed Siva-
kumar Viswa-
officer, K. Krithivasan, who
took over from Rajesh Gopi-
behaved in a way nathan, a veteran nathan on 1 June, has a chal-
that they were 8.6% dollar of about 30 years, lenging task as he steers the
favouring certain growth to end as the new head firm to retain an industry-
firms,” Chandra with $27.9 billion of RMG, Mint leading operating margin of
said. in revenue reported earlier 24.1% and to grow faster than
Chandra’s this week. its peers, according to analysts.
comment is the Speaking via “(IT firms) face the twin
first comment by video conferenc- pressure of maintaining prof-
a Tata group leader after Mint ing, Chandra also assured itability and on growth as
reported on 23 June that the shareholders that the com- more cost-takeout large deals
company sent E.S. Chakrav- pany’s outlook in the medium take centre stage,” said a
arthy, the former head of to long term remains strong, Mumbai-based analyst at a for-
Resource Management Group although, in the short-term, eign brokerage.
CreditAccess
to sell ₹1.1k cr
stake in MFI
profit of ₹88.46 crore. “Orders Ram Sahgal & Ranjani Raghavan
have increased from domestic ranjani.raghavan@livemint.com
market as well as export mar- MuMBAI
ket across the board,” Kumar,
said during an earnings call on reditAccess India BV,
11 May. “The domestic market promoter of CreditAc-
is seeing a big revival in capex, cess Grameen Ltd, will
and we see demand across all sell up to 5.8% of its stake in the
sectors,” he added. micro finance institution
“Macro factors continue to through a block deal on the
drive the business—the move exchanges on Friday. The stake
to renewables, etc. Increased is worth around ₹1,100 crore
demand for power from elec- with shares being sold in a
Nikhil Kumar, managing tric vehicles and for domestic ₹1,230-1,255 per share range.
director, TD Power. heating in the future, will pro- The closing price on Wednes-
vide sustained demand for the day was ₹1,325.70, implying the
while Kumar is the managing long term for power plants in deal at the lower end of the
director. The trade arrange-
ment will be handled by Moti-
lal Oswal.
TD Power has a market cap
this segment,” he said.
The company expects to see
60-70% growth in the hydro-
segment within a year, espe-
range to be at a 7.2% discount.
The promoter holds 73.68%
stake in the company and its
stake will reduce to 67.88%.
of ₹3,470 crore as of 28 June.
On 29 June, the markets were
closed for Bakri-Id.
Founded in 1999, TD Power
went public in 2011. In FY23,
the company reported a reve-
cially in its growth markets of
Nepal, Vietnam and Europe. It
owns a technology for four-
pole generators of up to 60
MW and has a licence from
Siemens AG for two-pole gen-
CreditAccess Grameen is an
Indian microfinance institu-
tion headquartered in Benga-
luru, focused on providing
micro-loans to women custom-
ers predominantly in rural
nue of ₹821.48 crore and a net erators for up to 200 MW. areas across India.
mega influencers (about 6.5%),
Influencer advantage from the likes of Avneet Kaur,
Gucci, Prada, Louis Vuitton, and Versace were other global luxury brands Anushka Sharma and Sonam
to find a place in the top five for most mentions by Indian influencers. Kapoor, among others.
Gucci secured the second
Brand Posts Influencers Likes (in mn) Earned media value (in $ mn) spot with 1,126 mentions from
Dior 1,431 841 29.1 26.1 701 influencers, comprising
celebrities such as Alia Bhatt,
Gucci 1,126 701 161 7.34 Sonam Kapoor, and Darshan
Raval, among others.
Louis Vuitton 936 557 259 30.4
Louis Vuitton received 936
Prada 519 356 110 7.86 mentions across posts made by
557 influencers,to clock the
Versace 500 329 113 12.9 highest earned media value. It
Research period 1 Jan 2023 — 31 May 2023 Source: Hype Auditor was not only mentioned by its
house ambassador, Deepika
SATISH KUMAR/MINT
Padukone, but also by Urvashi
1,431 times by 841 influencers including Instagram, TikTok, Rautela and Sonam Kapoor.
in six months between Janu- and YouTube for analytics. About 40% of all posts were
ary and May, these five brands Dior was mentioned at least in reels, the most popular con-
collectively received mentions once in about 154 posts, while tent format in India.
from 2,099 local influencers in 51% of the posts included five Additionally, 231 posts were
4,189 posts, reaching out to a or more mentions, suggesting created by mega influencers,
staggering 554 million users. that it has been extremely pop- who have a following of over
said the analytics firm, which ular among fashion influen- one million. The most liked
uses artificial intelligence (AI) cers who showcase their daily post was a carousel by
tools to compile data. outfits to include all the brands Anushka Sharma, featuring
HypeAuditor captures data they wore in their photos. It Dior. The post garnered 4.2
across social media platforms received mentions from 93 million likes on Instagram.
 LIVEMINT.COM DEALS, TECH & STARTUPS
m MINT SHORTS ‘Believe risk-reward
Fugitive venture capitalist ordered
to surrender $64 mn in SEC case
A former venture capital fund manager who fled to India to avoid
fraud charges was ordered by a US appeals court to surrender $64
million to the SEC, though the regulator will need to determine if
has turned favourable’
assets like real estate, jewellery and a Hermès handbag are actually Aman Rawat
owned by him or his wife. Iftikar Ahmed, a former Oak Investment aman.rawat@livemint.com
Partners executive, and his wife, Shalini Ahmed, have been fighting New Delhi
the Securities and Exchange Commission (SEC) disgorgement
N G
order, claiming it was improperly enlarged from the original $42 mil- uvama Asset Management, a
lion after a 2021 change in the law and that many of their assets can’t backer of Ola Electric and
be seized because they belong to her and not him. BLOOMBERG Dailyhunt, has recently
invested in two homegrown
startups after 16 months. The
Reloy raises ₹7.2 crore from Mumbai-based company, earlier known as
Edelweiss Asset Management, has raised
investors to grow business about ₹6,000 crore so far and is currently
ISTOCK
investing out of its third fund under the
Crossover Opportunities banner, for which
it has secured commitments of nearly
₹4,000 crore so far.
In an interview, Pranav Parikh, manag-
ing partner and head of private equity at
Nuvama Asset, said the company remains
cautious post last year’s economic uncer-
tainties and macro headwinds. But now, he
believes the risk-reward of its investments
has turned favourable. Parikh also spoke
about the slowdown in dealmaking, invest-
ment returns, and the thesis for its latest
New Delhi: HDFC Capital-backed proptech firm Reloy, bets. Edited excerpts:
which helps realtors in generating referral sales, has Has Nuvama’s
raised ₹7.2 crore from investors to expand its business. In investment strategy
a pre-series A2 funding round, Reloy (earlier known as evolved? Has it iden-
Loyalie) said all the existing investors participated along tified new invest-
with new investors like BlueLotus VC and Dream Green ment opportunities or refined its cri-
Capital. The investment will be used to fuel the company’s teria for selecting companies?
growth and expansion plans, the company said. In Febru- There has been no change in our strat-
ary last year, the company had raised ₹5.9 crore from egy. We chose to be cautious over the last
investors, taking the total external funding to over ₹13 16-odd months due to stretched valuations
crore. “India is now the world’s most populated nation in the private markets and the uncertain
with only the 7th largest landmass. We need our builders macro environment’s impact on the busi-
to create the largest cities the world has ever seen. It’s time ness outlook. We are increasingly optimis-
we empowered good builders with our referrals,” Reloy tic now with macro conditions and reason-
founder and CEO Akhil Saraf said. PTI able valuations and believe the risk-reward
has turned favourable. The Crossover
framework has, over time, successfully
US mulls new export restriction on identified and invested in leaders across
sectors with structural growth and in com-
computing power in AI chips panies with established business models
US officials are considering tightening an export control rule and seasoned management teams.
designed to slow the flow of artificial intelligence chips to China What are the returns you are sitting on
by clamping down on the amount of computing power the chips from the first two funds?
can have, according to two people familiar with the matter. The The first two funds have rewarded us
Biden administration last October issued a sweeping set of rules with an internal rate of return (IRR) of
designed to freeze China’s semiconductor industry in place 20-30%.
while the US pours billions of dollars in subsidies into its own Have you marked the final close of the
chip industry. An update to those rules may come by late July, third Crossover series fund?
two people said, but one cautioned that such US actions involv- No, we still have the last series open. We
ing China often get delayed. The US Commerce department have already raised commitments of
declined to comment. REUTERS ₹4,000 crore for the vehicle, but we will
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FriDay, 30 JuNe 2023
New Delhi 07
Good Capital takes
aim at AI startups
with $50 mn fund
Malvika Maloo
malvika.maloo@livemint.com
BeNGaluru
ood Capital, an early-
stage investor in uni-
corns such as Meesho
and Lead school, has launched
its second fund worth $50 mil-
lion (₹410 crore) with a green
shoe option of $15 million,
general partner Arjun Mal-
hotra said.
The VC firm, led by brothers
and co-GPs Arjun and Rohan
Malhotra, aims to back startups Good Capital general partner
that are using AI in intelligent Arjun Malhotra.
ways. However, it won’t just
focus on AI businesses only. However, this time, Good
“The way we see the oppor- Capital is looking to cut larger
tunity is that AI is enabling a cheques than before which
lot of interface developments, was about $500,000.
both around growth as well as “Now, it will be more
user engagement,”Arjun Mal- because (even as) the entry
hotra said in an interview. cheque size is probably going
now turn towards deploying capital from it. tries and one that will likely see consistent “(Integrating AI) can really to be a little bit higher, but
I do not see a large push at this point, given growth over the next decade. Partnering make a step change for any there’s more money to fol-
that we’ve been cautious. with Course5 to capitalize on this opportu- startup, and that creates a low-on,” Malhotra said. “We
What kind of investments are you nity is a natural fit for Nuvama Private land-grab opportunity. I think can also do initial cheques
looking at? Equity’s Crossover fund strategy. it is as profound as what the larger than a million dollars.”
A few of our investments based on What was your investment thesis for shift from desktop to mobile It has reserved about
domestic consumption themes include Ozone Overseas? was,” he added. 35-40% of its capital for fol-
Sapphire Foods (KFC/Pizza Hut fran- For Ozone, our thesis is built on the strong The latest fund comes about low-on funding.
‘
chisee), MedPlus (pharmacy retail), momentum seen in commercial and resi- four years after the seed-stage Good Capital’s investment
Amber Enterprises (AC dential segments leading to investor launched its strategy, however,
manufacturer), and Poly- the demand for ancillary maiden fund worth isn’t focused on spe-
cab, as well as leaders in We chose to be building and architectural $25 million in 2019. cific sectors.
financial services such as cautious over the hardware solutions that The VC firm actually “Our approach has
NSE and SBI Life, as well last 16-odd months the company specializes in. ended up deploying about $45 been a lot more bottom up in
as leaders in new-age The inherent growth in million, which included further terms of trying to find entre-
businesses such as CAMS, due to stretched these markets is further co-investments from its limited preneurs. We’re operating in
KFIN, Affle India, IndiaM- valuations in the enhanced by structural partners, in 25 startups, includ- spaces that probably are not as
ART InterMESH, Ola private markets trends such as premiumi- ing OrangeHealth, SimSim well covered in the main-
Electric, among others. zation as well as increased (which was acquired by Google), stream, but where founders
We continue wanting
Pranav Parikh
use of modern materials and SolarSquare, among others. find a really unique insight,
Head of private equity at
to identify similar struc- Nuvama Asset and feature-rich designs, So far, for the second fund, (they can) extrapolate and cre-
tural stories as above and driving up the volume and Good Capital has received ate a really large opportunity,”
believe that the penetra- value of architectural prod- commitments and marked an Malhotra said.
tion of advanced analytics and AI (artificial ucts used across home and office markets. initial close for about half of Its LPs are based in Singa-
intelligence) in enterprises is at a very nas- Unlike other home improvement cate- the $50 million fund, Malhotra pore, Europe and the US. With
cent stage globally. gories, this space is still highly fragmented, said. It aims to make the final the change in global factors,
What was your investment thesis with a large share being catered by unor- close by April next year. the firm expects more early-
behind backing Course5? ganized players. We see an increasing shift The fund also plans to invest stage capital to flow into India,
Recent advances in technological inno- from unorganized to organized and expect up to $1.5 million in about 25 which is emerging as a bright
vations may be the tipping point for wide- consolidation of market share among a few startups or slightly more over spot amid tough markets
spread, democratic adoption across indus- large players over the next decade. the next four years. worldwide.
 08 FriDay, 30 JuNe 2023
New Delhi CORPORATE LIVEMINT.COM

UAE gold
imports fall
despite pact
FROM PAGE 1
by 39% to 220 tonnes from 360
tonnes in the previous fiscal.
Gold imports from the UAE
had fallen last year as clarity
‘India is a place where P&G m
MOVES
can set up plants for exports’ A weekly list of C-Suiters who have moved up
the corporate ladder either within or outside
their companies.
Ajay Appointed as chief executive
Suneera Tandon FMCG firms are coming out of a very keep going along. Chitkara officer at Ecom Express
suneera.t@htlive.com high inflationary period. Would you Can you talk about P&G India’s Ashish Appointed as president sales and
new DelhI say the worst is behind you? integrated growth strategy? Maheshwari marketing at Wanbury
Well, it’s too early to say that but I We embarked on this integrated

around TRQ was expected, said
Colin Shah, a former vice chair-
man of the Gem and Jewellery
Export Promotion Council
(GJEPC). “Till last year, the
modalities of import under
TRQ were not clear. There was
no clarity, no SOPs (standard
operating procedures), and
customs, and due to the lack of
clarity for nominated agencies
/importers, the benefits of the
rebate were not seen. This
(financial) year onwards, these
(challenges) are clear,” Shah
said, adding that he expected
I
n July last year, LV Vaidyanathan would say there’s a little bit of easing up growth strategy journey about six-to- Ashish Appointed as chief operating officer
took charge as managing director that we are seeing, at least on commod- seven years ago. That starts with having Tiwari wind & solar at ACME Group
and chief executive of Procter & ity inflation at this point in time. There a portfolio of brands and being in a set of
Gamble (P&G) India that comprises are some commodities which are easing, categories where performance drives Bhautik Appointed as chief executive
four separate entities, including two there are others which haven’t yet eased brands. The second one is to deliver Ambani officer India at Alphagrep
large listed companies—Gillette India up right now. We are treading very cau- ‘irresistible superiority’, as we call it—
and Procter & Gamble Hygiene & tiously; I would not declare that across not just across products, but across dif- Davinder Appointed as senior vice president
Health Care. On Wednesday, the local commodities we are seeing an easing up. ferent dimensions i.e. product packag- and chief operating
arm of the US company announced an Has P&G started passing on any ing, communication, retail presence,
Singh officer - insurance at Genpact
investment of ₹2,000 crore to build a price benefits to consumers? and value. The third part of the strategy
new export-focussed plant in the coun- Again, it’s too early to comment on is productivity in everything that we do Appointed as managing director,
Gagandeep head of human pharma India
try. In an interview, Vaidyanathan said what the future really holds for us across all value streams. The fourth part Singh
investments will “continue to come” to because, as I said, we are in a fairly of the strategy is what we call ‘construct- at Boehringer Ingelheim
India as favourable demographics drive uncertain phase at this point in time. ive disruption’—basically building those Ganesh Appointed as chief product and
demand for its products and as the com- Therefore, it would be difficult to guess capabilities which future-proof our busi-
pany builds on India’s role as a manufac- where the industry is actually going to ness across different parts, whether it’s
Ramaswamy technology officer at Cleartrip

higher growth in gold imports

from the UAE during FY24.
Industry experts also attrib-
uted the fall to the increase in
import duty on 30 June 2022,
which, they said, encouraged
the smuggling of gold.
The Centre then hiked gold
turing and talent hub. He also said while
fast-moving consumer goods (FMCG)
businesses are seeing early signs of
moderation in raw material prices, the
company remains cautious in the short-
term. Edited excerpts:
has gained importance in the P&G
world— it is now amongst the top 10
markets for P&G (globally). But more
importantly, it’s also been a very impor-
You have returned to India in an tant source of talent for the company.
go. But just to step back and look at
it—it has been a tough
two years for the entire
industry. We’re hoping
that the cycle of infla-
tion is starting to ease
up; the data is still not
conclusive enough for
‘
brand building, manufacturing, sup-

Our manufacturing
footprint in India has
steadily expanded,
both to cater to our
ply chain, go-to- mar-
ket, innovation etc.
And last is to build an
organization, which is
agile, empowered.
What's your view on
the direct-to-con-
Gauri
Malhotra
Puneet
Chopra

Rajat
Verma
m Appointed as chief marketing
officer at Bombay Shaving

Appointed as chief business

office at Eduauraa

Appointed as managing director

and head of institutional banking

import duty to 15% from 10.75%
to check the widening current
account deficit owing to a surge
in imports of the yellow metal.
A loophole in regulations
allowed many to import refined
gold as platinum alloy, as the
latter attracted a 10.75% duty
compared to 15% on gold.
This was finally stopped in
October, with the government
hiking duty on platinum alloys
to 15.4%.
Around 25 tonnes of such
imports were recorded during
September and October,
according to an industry repre-
sentation reviewed by Mint.
However, after the duty hike on
platinum to deter imports, the
value of such inbound ship-
ments of the precious metal
moderated to just $1.13 million
in November.
dilasha.seth@livemint.com
MOVES
official capacity after a gap of nearly We have over 350 expats out of India in us to say that it’s easing domestic demand and sumer market? Is India at DBS Bank
two decades. What changes have the system. Even if you look at our global up and that we are also exports there an appetite to
you seen in the market as well as in leadership council, we have four Indi- starting to see a very invest in this ecosys-
Rajesh Appointed as chief information
LV Vaidyanathan Gopal officer APAC at Kimberly-Clark
P&G’s business in India? ans; when I left India, we had just one of different cycle right MD & CEO, P&G India tem?
I approach this like my seventh coun- them. P&G’s global COO (Shailesh G. now in our business. There’s enough
try that I was getting into. I have to say Jejurikar) is Indian too. It’s great to see Fundamentally, room for many players
Sachin Appointed as chief executive
that I am now blown away by the num- how this flywheel has worked. where do you think Indian house- to come in and continue to offer proposi- Jain officer at Cleantech Solar
ber of changes that I have seen, the level What are P&G’s plans to expand its holds, especially rural consumers, tions. If I look at a category like feminine- Appointed as managing director &
of awareness that con- manufacturing oper- are when it comes to paying for care, and look at the category develop- Satyajit chief executive officer at Power
sumers have about our m INTERVIEW ations in India? essential goods? ment in India versus Indonesia or Philip- Ganguly Exchange India Limited
categories, the level of Our manufacturing Purely, if I look at the data over the last pines, there is still a lot of opportunity for
aspiration that consum- footprint in India has three to six months, I see green shoots, I the category. We continue to keep an eye Shweta Appointed as people director
ers have, and how the categories have steadily expanded, both to cater to our see some sequential improvement, but on everyone who comes in with their Gambhir MESA at Smollen
actually grown over the last many years. domestic demand and exports. Over the I really don’t see volume growth coming offerings and how those are going to
The time when I left (2004), the business last 25 years, we’ve invested over back. Volume growth typically in rural contribute to category growth. Our pri- Vasudha Appointed as country manager
was less than ₹1,000 crore; today we are ₹20,000 crore on creating manufactur- should be in early-to-mid single digits; mary focus really starts from the con- Vijayvergiya of 3Shape India
at about ₹16,000 crore. The number of ing capacity in India. We have they are not yet there. sumer understanding their needs, the
employees has grown significantly; we announced a ₹2,000 crore investment Are you done with investments in jobs to be done there and then designing Vivek Appointed as chief risk officer
used to have two plants, now, we have into a manufacturing facility in the India? our propositions to ensure that we Bajpeyi at IndusInd Bank
eight plants and 13 contract manufactur- digestives space (within healthcare) in It is work in progress. The company delight them. We already have a direct-
ers. These plants, plus contract manu- Sanand, Gujarat. This is a reaffirmation views India very favourably, simply to-consumer play; our P&G store is on Vyshak Appointed as head of culture
facturers and distributors have close to of how important the company sees because of the demographics and the ONDC as well. We will keep learning in Das at One Source
55,000 employees. It’s great to see the India as not just in terms of domestic consumption that we already see and this space vis-vis our existing offerings
journey that P&G has had in India. What consumption but also as a place where also the runway that we have growth. So, and keep an eye on the rest of the brands Source: Accord India, executive search worldwide
this has done is that the (India) business we can set up manufacturing for exports. with that, investments will come as we and the ecosystem as well.

Hotel demand soars as Indians Curbs likely on unsecured loans

explore domestic hill stations FROM PAGE 1 man Sachs said in a note on 14 125% and credit cards at 150%),
June that it has gathered feed- we note that impact on com-
percentage points or more, we back from the industry on the mon equity tier 1 (CET-1) levels
FROM PAGE 1 “There has been a steep are not indiscriminate in unse- latest portfolio behaviour and is negligible,” analysts at Mac-
increase in hotel fares this sum- cured lending,” said a senior found repayment delays of quarie said in a note on 26
dampened demand. mer compared to last summer, banker at a large public sector over 30 days trending June.
Manu Sasidharan, the head of and while international pack- bank. An emailed query to an upwards in small-ticket per- According to Macquarie’s
hotels and accommodation at age prices went up on average RBI spokesperson remained sonal loans. That apart, the calculations, CET-1 ratios will
Deloitte resigned as the auditor of Byju’s last week. REUTERS Cleartrip, said summer travel by 11%, domestic prices were up unanswered. share of below-prime custom- decline by 10-60 basis points
drove profitability for the entire a staggering 38%,” said Ashok, A private sector banker said ers has also inched higher. (bps) across top banks, and

Byju’s exposes gap industry. “It has been strong

from a summer travel perspec-
tive, and we advanced the
also regional head for India and
the Middle East. About 16% of
its domestic orders are for
he does not see a challenge in
the unsecured loan space as
banks are cautiously growing.
The Goldman Sachs note despite this, capital levels
pointed out that
the share of While risk weights well above the
would remain

in NFRA mandate demand with a scheme we ran in

March for the season,” he said.
Similarly, Yatra.com saw a
north Indian hill stations.
Indiver Rastogi, the presi-
dent and group head of global
He said there is demand for
such consumption loans, and
banks are just catering to that
i n c r e m e n t a l may rise, leading regulatory limits.
unsecured loans
in the total loan
to more capital
use, RBI won’t
Others believe
that the situation
30-35% jump in domestic hotel Air travel costs rose by 60-150% business travel for Thomas demand at the right price. book has could come to a
raise it equally for head only if there
FROM PAGE 1 interest is involved,” said Ved bookings and a 20-25% for popular hill stations. PTI Cook (India) Ltd and SOTC Personal loans comprised increased for
Jain, a former president of increase in the domestic air Travel Ltd, despite the higher 27% of all retail loans in April, some banks all types of are massive job
remained unanswered at the ICAI. travel segment between April dampen demand in the coming airfares, travel demand has up from 25% two years ago, between FY22 unsecured loans losses, especially
time of publishing the story. “Startups are expected to and June from a year earlier. years. This year’s summer seen a threefold increase this showed data from RBI. Credit and FY23. While in the informa-
Mint reported on Tuesday innovate, and greater regula- But the hill station growth is far travel in India has been an summer. In some popular city bureau TransUnion Cibil HDFC Bank has tion technology
that the corporate affairs min- tory burden is not in their more staggering. It has seen interesting study in contrast sectors going to the hills, air showed in a report in April that seen it increase from 14% to sector.
istry was examining the nature interest. ICAI is entrusted with between a 50-60% surge in because of the extremes in travel costs have shot up by vintage delinquency—the per- 18%, ICICI Bank saw it go up “About two-thirds of total
of enforcement action it needs the task of addressing govern- demand for popular hill sta- hotel and airfare rates. While 60-150%. centage of loan accounts from 17% to 24%, and Axis personal loans in the banking
to pursue in the wake of the ance issues of entities which tions such as Manali, Nainital, international bookings are yet During the April-June where repayments have ever Bank saw it increase from 8% system are to employees in the
resignation of Deloitte Has- are outside the mandate of Mussoorie, Kashmir, Leh, and to achieve pre-covid levels and period, room tariffs in popular been delayed by over 30 days to 18% in the same period. financial sector or the IT sec-
kins & Sells Llp last week as the NFRA,” said Vijay Kapur, a Ladakh in April-June 2023 ver- bookings are down by 34%, hill stations and cooler destina- in the first six months—in per- That said, analysts believe tor, and unless you see a mas-
auditor for Think and Learn. former director at ICAI. sus the corresponding quarter domestic bookings recovered tions such as Srinagar, Shimla, sonal loans was higher in the that the impact of an increase sive job loss in these sectors or
The options range from an NFRA has so far taken strin- in 2022, and this has also quickly post covid outbreak to Manali, Dharamshala, Mcleod- December quarter of 2022 in risk weights in unsecured a drastic correction in salaries,
inquiry in the form of seeking gent action in the case of what resulted in an increase in air- about double the 2019 levels, ganj, and Dalhousie witnessed than the pre-pandemic period. loan categories would cer- there is unlikely to be an asset
information, an inspection of it regards as wrongful audit fares to these locations by said Arun Ashok, the India a substantial surge of 70-100%, Analysts tracking the sector tainly be manageable. quality challenge,” said Parag
books of account that is a more engagement and compromise 40-50%. head of curated travel com- according to Thomas Cook are watching the growth of “Assuming a 25% increase in Jariwala, director of invest-
formal step meant to check in the case of auditor inde- But rising hotel rates could pany, Luxury Escapes. India. unsecured credit books. Gold- risk weights (personal loans at ments, WhiteOak Capital.
compliance or a full-fledged pendence and has flagged
investigation. cases where the quality of
Independent regulators financial statements needed
such as registrars improvement. Its
of companies and The regulator has orders seek to
NFRA and probe issued an order make auditors
Aspartame sweetener may be declared a possible carcinogen
agencies such as explaining that who sign finan-
the Serious Fraud quitting an audit cial statements FROM PAGE 1 that IARC makes public its welfare, wrote in a letter dated damages to customers blaming
Investigation decision–on 14 July. 27 March to WHO’s deputy their cancers on use of its gly-
assignment does more diligent
Office are within about their task, from a separate WHO expert Since 1981, JECFA has said director general, Zsuzsanna phosate-based weedkillers.
the ministry’s not absolve a as investors make committee on food additives, aspartame is safe to consume Jakab. The letter also called for IARC’s decisions have also
regulatory eco- statutory auditor decisions based known as JECFA (the Joint within accepted daily limits. the conclusions of both bodies faced criticism for sparking
system. on these docu- WHO and Food and Agricul- For example, an adult weighing to be released on the same day, needless alarm over hard to
However, not ments. ture Organization’s Expert 60 kg (132 pounds) would have as is now happening. The Japa- avoid substances or situations.
everyone is keen on tightening On Monday, the regulator Committee on Food Additives), to drink between 12 and 36 cans nese mission in Geneva, where It has previously put working
the regulatory framework for issued an order explaining that alongside determinations from of diet soda–depending on the WHO is based, did overnight and
auditors, and some experts quitting an audit assignment national regulators. amount of aspartame in the not respond to a JECFA is also consuming red
suggested that the self-regula- does not absolve a statutory However, similar IARC rul- beverage–every day to be at request for com- reviewing meat into its
tor of the accounting and audit auditor of its responsibility to ings in the past for different risk. Its view has been widely ment. aspartame use. it “probably cancer-
profession Institute of Char- report fraud noticed during substances have raised con- shared by national regulators, IARC’s rulings is due to causing” class,
tered Accountants of India the audit. It is a misconception cerns among consumers about including in the United States can have huge and using mobile
announce its
(ICAI), can address any gov- among auditors that resigning their use, led to lawsuits, and and Europe. impact. In 2015, its phones as “possi-
ernance issue relating to enti- from audit engagement will pressured manufacturers to An IARC spokesperson said committee con- findings on the bly cancer-caus-
ties outside NFRA’s mandate. absolve them from the conse- recreate recipes and swap to both IARC and JECFA commit- Aspartame will be listed in July as “possibly carcinogenic to humans” cluded that gly- same day as IARC ing”, similar to
“Byju’s case may be an quences of not reporting alternatives. That has led to tees’ findings were confidential for the first time by IARC, WHO cancer research arm. ISTOCK phosate is “proba- aspartame.
exception. Large investors in fraud, NFRA said. criticism that IARC’s assess- until July, but added they were bly carcinogenic”. “IARC is not a
private limited companies, An expert on the regulatory ments can be confusing to the “complementary”, with IARC’s cer) to occur under certain con- by Reuters. Years later, even as other bod- food safety body and their
who sit on their boards, are framework for statutory audit public. conclusion representing “the ditions and levels of exposure.” “We kindly ask both bodies ies like the European Food review of aspartame is not sci-
astute and financially very said NFRA’s mandate also cov- JECFA, the WHO committee first fundamental step to However, industry and regu- to coordinate their efforts in Safety Authority (EFSA) con- entifically comprehensive and
well-informed, and they ers any company, person, or on additives, is also reviewing understand carcinogenicity”. lators fear that holding both reviewing aspartame to avoid tested this, companies were is based heavily on widely dis-
remain aware of the develop- corporate body on a reference aspartame use this year. Its The additives committee “con- processes at around the same any confusion or concerns still feeling the effects of the credited research,” Frances
ments in the company. NFRA made to the authority by the meeting began at the end of ducts risk assessment, which time could be confusing, among the public,” Nozomi decision. Germany’s Bayer in Hunt-Wood, the secretary gen-
may focus its resources on central government in the June and it is due to announce determines the probability of a according to letters from US Tomita, an official from Japan’s 2021 lost its third appeal against eral of the International Sweet-
companies where the public public interest. its findings on the same day specific type of harm (e.g., can- and Japanese regulators seen ministry of health, labour, and US court verdicts that awarded eners Association (ISA), said.
This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
 LIVEMINT.COM CORPORATE FRiDay, 30 JuNe 2023
New Delhi 09

Byju Raveendran tries WHAT DEMOCRATIC MAJORITY MEANS

Then again, there’s a growing and widely-accepted recogni-

to allay staff concerns A M AT T E R

OF NUMBERS
tion that we must accommodate the disabled—make public facili-
ties disabled-friendly, that is. Why should this be, when disabled
people who would benefit are, again, a tiny minority in this coun-
try? Well, it should be. Because, yet again, that’s the promise of
a democracy.
DILIP D’SOUZA But let’s take another majority. Males, I mean. The numbers I
cited above translate into a 51.5%:48.5% male majority in India.
Respond to this column at That’s a pretty slim margin for us men, pretty close to equal actu-
Byju’s was working to resolve the bondholder crisis at the earliest, he said feedback@livemint.com ally. That’s why, for example, bathroom facilities are generally
equally distributed between women and men across this land. I

T
rade secret: I am just over 6 feet tall. Now I haven’t con-
Sneha Shah & Devina Sengupta ducted a study of heights in the population myself. Nor do
MUMBAI I know of one that’s out there. But just going by what I see
around me, I know my height makes me part of a minority. That
realize women might take issue with that claim. After all, we have
all been in situations where it is much harder for a woman than
a man to relieve herself. Still, at least in theory, we make equal
arrangements for each sex.

B
yju Raveendran, the founder of is, the majority of Indians are less than 6 feet tall. And yet, women actually do form a minority in India—just
edtech major Byju’s, on Thurs- In fact, I feel safe in saying the majority of Indians have been 48.5% of the population, remember? Men are the majority. So
day allayed employee fears by less than 6 feet tall for pretty much all our history, going back as why shouldn’t the interests of men alone drive our democracy?
projecting a positive outlook. At many thousands of years as you like. Since they are the majority, why care about the interests and
a town hall meeting organized Another trade secret: I am a man. In this case, there is plenty of needs of others? That is, why not dispense with such facilities as:
by the Bengaluru-based firm, Raveendran data out there—example, our regular decadal Censuses until we toilets for women, ladies’ special trains, athletic competitions for
reassured the employees that the company didn’t do the last one, in 2021. The Census data shows that my women alone...you get the idea. And dispense with them not
had amicably ended its associations with gender makes me part of a majority in this country. The 2011 Cen- because we recognize women as equal to men, and thus in need
Deloitte as well as its board members, and sus, for example, showed that there are 943 females for every of no special treatment, but because men are the majority, period.
was working diligently to resolve the bond- 1,000 males in India. The promise of democracy, right?
holder issue at the earliest. In fact, I feel safe in saying the majority of Indians have been Yet of course, most of you (the majority?) would scoff at this,
While he did not say anything about the male for...well, at least much of our Independent history, going and rightly so. One argument you might make is that we don’t dis-
layoffs, or the delays in remitting provident back to 1947. criminate on the basis of gender and, therefore, the male majority
fund amounts and realigning certain loss- What’s my point? The idea of a “majority”, and what that doesn’t amount to anything. Another argument might be that the
making businesses within the group during implies in a democracy. difference between the male and
the town hall, in an email addressed to all Plenty of people will nod their heads sagely at the idea that What matters in female populations is so small as to be
employees on Thursday evening he said: democracy means that the majority’s will, or interests, must pre- a democracy is negligible. Again, the male majority
“My heart goes out to each and every team vail. There’s some truth in that. But as with a lot of things, it bears doesn’t amount to anything. In this
member who is facing the difficult reality of some examination. Right off the bat, it might suggest this ques- that you are case, democracy is not about the
downsizing, a decision that was made as a Byju’s founder Byju Raveendran said in an email to employees late on Thursday that the tion: which majority? heard; that majority; in fact, the word “majority”
last resort and with a heavy heart.” decision to downsize was made as a last resort and with a heavy heart. MINT For example, why not the majority that’s shorter than 6 feet? every voice is doesn’t really apply.
The company “will grow more sustaina- That is, why should policies and development not be driven by heard Odd, because we’ve seen that it does
bly going forward”, he added. ber, 5 November, 12 November and 24 Vu representing Chan Zuckerberg Initia- the interests of the country’s shorties? For one thing, that indeed apply with people shorter than
In his first address to employees since December— and a final one to Raveendran tive and Russell Dreisenstock representing might mean that doors need not be higher than 6 feet. Standing 6.5 feet. It’s for that 99% majority, after
the differences with bondholders over the on 29 March 2023, regarding the statutory Prosus had confirmed their exits from the room in buses and trains, likewise. You get the idea. Such fea- all, that we design buses and doors and such like. Not for people
$1.2 billion term loan B came to light, Rav- audit of 31 March 2022. Deloitte said it had board last week, leaving Raveendran, his tures will be a serious disadvantage to Indians like me, and taller than that.
eendran said, “Today, our challenges can not started work on the FY22 audit. wife Divya Gokulnath, and brother Riju even worse for those taller than me. But not to most Indians, So here’s the question for a column about numbers: Is there a
no longer be solved behind closed doors. Raveendran told his employees that the Raveendran, as board members. Raveen- who will pass through those doors, or stand in our buses, with- point somewhere between 50% and 99% that democracy does
But I want you to know that things are company has taken a strategic decision to dran said “departures of the three board out any problem. The majority, after all. Isn’t that the promise become the servant of a majority?
rarely as glorious as they seem or as dire as appoint BDO as Byju’s statutory auditors members are unrelated to Deloitte’s resig- of democracy? Well, perhaps you think these explorations of height and
they are presented.” He nation”. Painting a positive And in fact, something like this does actually happen. Doors in gender majorities are just facetious. They are not. And that’s
assured the 50,000 employ- DAMAGE CONTROL picture of the edtech industry, buildings are rarely more than about 6.5 feet tall. Buses top out because by now, perhaps you know where I’m going with all
ees of the company that he was Raveendran said it was here to below even that much. Yet there are Indians—a minority, of this. Hindus make up about 80% of India—a significant major-
working to resolve it through RAVEENDRAN said HE said he was THE edtech founder stay, and Byju’s was inching course—who are too tall for those doors, or too tall to stand com- ity. Therefore there’s an argument to be made, and plenty of
constructive discussions, and Byju’s parted ways working towards
with board members resolving the issue
said Deloitte’s exit
followed Byju’s plan
toward profitability at a group fortably in those buses. In other words, doors and buses are people do make it, that it is Hindu interests that should drive
the firm was confident of and Deloitte on through constructive to appoint BDO as level. “We have stopped all designed for the great majority that can use those without prob- the functioning of Indian democracy. Is that the promise of
achieving a positive outcome amicable terms discussions statutory auditors advertising spends and reve- lems. Again, the promise of democracy, right? The doors will just democracy?
within a few weeks without nue is coming organically,” he about allow us 6-footers entry, but not 6.5-footers. You may nod your head, you may not. But I’ll offer you one
court intervention, company added. There’s something, I’d suggest, to think about here. I don’t more way to consider all this. Whatever your particular majority
executives said, seeking anonymity. for five years, which led to Deloitte’s exit. Raveendran admitted that the acquisi- know real figures, but if I had to guess, I’d say 99% of the popula- is, it hardly matters. Instead, what does matter in a democracy is
Last week, Deloitte Haskins and Sells Disregarding Deloitte’s public statement, tions made in the past led to a lot of cash tion of India is shorter than 6.5 feet tall. That can’t be very far off that you—yes, you—are heard; that every voice is heard. And from
tendered its resignation as auditor, after six he said the separation was on “mutually burn for the company, and it is now work- the mark. So clearly, we are completely okay with measures that that cacophony of voices that are heard, the idea of a democratic
years of service, citing lack of communica- agreed-upon” grounds. ing toward curbing cash burn. suit this overwhelming majority. Nobody, not even the tiny tall majority emerges.
tion from the management despite having The three non-promoter board mem- “The best of Byju’s is yet to come, and the minority, would seriously complain about this. Nobody even pays Certainly that’s the ideal. But striving for that ideal is, in my
sent five letters addressed to Raveendran, bers of the company had resigned earlier firm has “not come this far to only make it it much attention. In fact, if there ever was a demand to accom- book, the real promise of democracy.
the managing director of Byju’s, and its this month. G.V. Ravishankar representing this far,”he added. modate the tallest among us everywhere around us, I think it Once a computer scientist, Dilip D’Souza now lives in Mumbai
board members in 2022—on 30 Septem- Peak XV (formerly Sequoia India), Vivian sneha.shah@livemint.com would attract some strange looks. and writes for his dinners. His Twitter handle is @DeathEndsFun.

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 10 FriDay, 30 JuNe 2023
New Delhi NEWS WRAP LIVEMINT.COM

TWEETS & QUOTES

Christine Lagarde Michael Barr Janet Yellen
Antonio Guterres @Lagarde Vice chair, US Fed US treasury secretary
UN secretary-general President, ECB We should remain humble There are a new group of
In view of the measures ...We look forward to con- about how risks can arise leaders [in China].... We need
taken by the govt to better tinuing working together and continue our work to to discuss our disagreements
protect children, India has with other EU institutions ensure that banks are with one another so that we
been removed from the towards a digital euro that resilient to a range of eco- don’t have misunderstand-
2023 report on Children ensures our currency is fit nomic scenarios, market ings, don’t misunderstand one
and Armed Conflict. for the digital age. shocks, and other stresses. another’s intentions.

ONGC sells gas WATER WOES No public namaz

from KG basin at $11 held in Purola town

S U
tate-owned Oil and Natural Gas nder pressure from the Vishva Hindu
Corporation (ONGC) has sold initial gas it Parishad, Muslims in the communally
is producing from its KG basin fields in sensitive Purola town did not gather for
the Bay of Bengal to three firms, including namaz in public places on Eid-ul-Adha.
Torrent Gas, sources said. Muslims living in Purola for generations had
In an e-auction, the firm sold 1.4 million to go to other places like Sandra, about 30 km
standard cubic metres per day, a fraction of the away from the hill town, and Vikas Nagar near
planned output from the block that sits next to Dehradun, to offer namaz collectively.
Reliance Industries’ prolific KG-D6 area in the The break in the tradition drew a sharp
Bay of Bengal, to Torrent Gas Pune Ltd, GAIL reaction from Muslim organizations in
(India) Ltd and Hindustan Petroleum Dehradun which said such things went against
Corporation Ltd (HPCL). the secular spirit of the Indian Constitution.
GAIL picked up 0.8 mmscmd while HPCL “If there was no Eidgah in Purola, people
took 0.42 mmscmd and Torrent 0.12 mmscmd, should have been allowed to gather at the
sources aware of the matter said. mosque and offer prayers. Not letting them
The company had sought bids from users gather for namaz anywhere reinforces the fact
like city gas operators that sell CNG to that Muslims will continue to be treated as
automobiles and piped cooking gas to second class citizens in this secular and
households, companies using gas to produce culturally diverse country,” Muslim Seva
fertilizer or make electricity, LPG producers Sangathan president Naim Ahmad said. PTI
and traders. PTI

Workers gather maize crop at a wholesale market in Jalandhar on Thursday after heavy rainfall. With the onset of the southwest monsoon, most
parts of north India have been witness to heavy rainfall over the last few days. PTI

Peace has to be only priority, The price will most likely go further down during
negotiations. AFP
The airline stopped flying from 3 May.

Go First extends
PTI

Rahul says after Manipur visit US drones cost 27%

cheaper for India
flights cancellation
A
senior government functionary claimed

C
ash-strapped Go First on Thursday
announced extending the cancellation
of its scheduled flights till 6 July.
The airline, which is undergoing insolvency
resolution process, stopped flying from 3 May
and since then, it has extended cancellation of
flights multiple times.
on Thursday that the average estimated
Rahul visits Churachandpur relief camps by chopper as police halt convoy midway cost of MQ-9B long endurance drones for
India would be 27% lower than the price
incurred by other countries which have bought
PTI and loving. It’s very unfortunate that the govern- against the visit. Gandhi’s supporters demanded it from the US, asserting that it will most likely go
feedback@livemint.com ment is stopping me,” Gandhi tweeted. that he be allowed to go to Churachandpur, refer- further down during negotiations unless India
“I came to listen to all my brothers and sisters of ring to the visit of Union home minister Amit Shah seeks additional features.

E
On Wednesday, senior representatives of the
current management of Go First discussed
various aspects of the revival plan with officials
of the Directorate General of Civil Aviation
(DGCA).
“... due to operational reasons, Go First
flights scheduled till 6th July 2023 have been
cancelled,” the budget carrier said in a tweet.
The company has filed an application for
immediate resolution and revival of
operations.
“We will be able to resume bookings
shortly,” the airline said.
Sources on Wednesday said DGCA will
examine documents submitted by Go First
related to the revival plan and will also conduct
an audit on operational preparedness before
allowing the carrier to restart operations. PTI
thnic strife-torn Manipur witnessed high
drama on Thursday over the visit of Con-
gress leader Rahul Gandhi to relief camps
in Churachandpur after his convoy was
stopped by the police midway and he had
to take a helicopter to reach his destination.
Gandhi who interacted with those sheltering in
relief camps in Churachandpur, 63 km from Mani-
pur’s capital Imphal, said “Manipur needs healing.
Peace has to be our only priority.” The blocking of
his convoy triggered a political slugfest as the Con-
gress alleged that the BJP-led government is trying
to thwart the leader’s visit, while the saffron party
accused him of being “stubborn” and choosing to
take the road trip even though he was advised to
take a chopper as his trip was opposed by various
quarters.
“People of all communities are very welcoming
Manipur. Manipur needs healing. Peace has to be there late last month. The police used tear gas He also categorically underlined that so far
our only priority,” he said in the Twitter post. shells to disperse the mob. negotiations on the pricing issue have not begun
During his visit to Churachandpur, he interacted After remaining stuck for a few hours in Bishnu- as the latest official development towards the
with the inmates in pur, Gandhi proposed acquisition of 31 of these drones has
relief camps set up at returned to Imphal been the “acceptance of necessity” accorded by
a school and a col- Meanwhile, one person was killed airport and took a the Defence Acquisition Council, which
lege there, where and a few others were injured when helicopter to go to happened on 15 June. The pricing issue is not
around 200 people Churachandpur, one part of this, he added.
are camped. “rioters” opened fire without any of the worst affected The indicative cost of the drones made by
The Congress provocation at Haraothel village towns in the ethnic the US government is $3,072 million. This
leader was stopped rioting which broke works out to be $99 million for each drone, he
by the police at Bish- out in the state said. PTI
nupur, around 20 km from Imphal, citing demon- nearly two months back.
strations on the way. “There is a security threat. We Meanwhile, one person was killed and a few oth-
cannot take the risk of allowing Rahul Gandhi to ers were injured when “rioters” opened firing with-
proceed,” a senior police official said. out any provocation at Haraothel village in Kang-
A large number of people, mostly women, gath- pokpi district of Manipur on Thursday morning,
ITU accepts India’s
ered near the spot and demonstrated both for and leading to tension in the area.
inputs on 6G tech

U
N body International Telecom Union has
TN Guv dismisses accepted India’s inputs on the 6G
Social media influencers under lens technology framework, indicating the
minister Balaji country’s crucial role in the development of
next-generation high-speed technology, an
official sources said on Thursday. official statement said on Thursday. According

T
amil Nadu Governor R.N. Ravi on
Thursday dismissed minister V. Senthil
Balaji from the council of ministers days
after his arrest by the Enforcement Directorate
in a cash-for-jobs scam, a move that Tamil
Nadu chief minister M. K. Stalin said the
government would challenge legally. In an
official release, Raj Bhavan said, “There are
reasonable apprehensions that the
continuation of V. Senthil Balaji in the council
of ministers will adversely impact the due
process of law, including fair investigation that
may eventually lead to the breakdown of
Constitutional machinery in the State.” Balaji
“is facing serious criminal proceedings in a
Social media influencers and online content
creators are making substantial earning.
The department initiated the action last
week after it searched about 10
YouTubers and other social media
influencers, mostly young artistes and
actors, in Kerala.
The sources said a “data analytics”
investigation undertaken by the
department found out that these social
media influencers and online content
creators are making “substantial”
earnings but either not showing or under-
reporting it in their income tax returns
(ITRs) or filings, largely due to ignorance
of tax laws.
Social media influencers and online
Unlocking value cannot be the sole purpose of all
enterprises, Coal India chairman Agrawal said. HT
‘CIL should remain
to the ITU-APT Foundation of India (IAFI), the
Indian administration has played a critical role
in getting ubiquitous connectivity accepted as a
key usage scenario. “India is emerging as a key
player in the development of 6G technology.
ITU has recently accepted India’s contribution
towards setting a global framework on 6G. It is
PM Modi’s clear vision that India must lead the
world in 6G,” telecom minister Ashwini
Vaishnaw said in the statement.
Modi released India’s 6G vision document in
March 2023, envisaging India to be a front-line
contributor in the design, development and
deployment of 6G technology by 2030. PTI

public sector entity’

number of cases of corruption, including
taking cash for jobs and money laundering.
Abusing his position as a minister, he has been
influencing the investigation and obstructing
the due process of law and justice,” the release
added. Reacting to the development, Stalin
said Governor Ravi has no authority to dismiss
T
he income-tax department has
launched a probe against certain
social media influencers and
content creators on platforms like
YouTube and Instagram for allegedly not
showing their income and profits
commensurate with their earnings,
content creators are those who have the
power to address online and affect their
audiences’ purchasing decisions or
Shareholders nod
C
opinions about a product, service, brand oal India chairman Pramod Agrawal said on
or experience because of their authority,
knowledge, position or relationship with
Thursday that the company should
continue to remain as a “government for PTC India head
their audience. PTI entity” in the future to maintain “price stability” of

a minister from the Cabinet.
India’s GMRT plays key role in detecting universe’s vibrations
PTI the dry fuel in the country and suggested an
alternative methodology for coal pricing in future.
In an interview with PTI a day before his term
ends as the head of Coal India on 30 June,
Agrawal said unlocking value cannot be the
“sole” purpose of all enterprises. As a
government-owned entity, Coal India holds the
P
TC India shareholders have approved the
appointment of Rajib Kumar Mishra as
the company’s chairman and managing
director with requisite majority votes.
According to a regulatory filing,
shareholders approved an ordinary resolution
to appoint Mishra as chairman and managing

I
ndia’s Giant Metrewave Radio Telescope (GMRT) was one of the world’s six
large telescopes that played a key role in finding the first direct evidence for
the relentless vibrations of the fabric of the universe, caused by ultra-low
frequency gravitational waves. The findings were published on Thursday by a
team of global scientists, including from Indian Pulsar Timing Array (InPTA)
which used the Pune-based GMRT telescope.
“We are within a whisker of achieving such a dynamic range where one can
finally listen to the bass sections in this cosmic gravitational-wave-symphony,”
said Pratik Tarafdar of The Institute of Mathematical Sciences, Chennai.
Such waves are expected to originate from a large number of dancing
monster black hole pairs, several million times heavier than the Sun, the
scientists said. “It is fantastic to see our unique uGMRT data being used for the
ongoing international efforts on gravitational wave astronomy,” said Yashwant
Gupta, Centre Director at National Centre for Radio Astrophysics (NCRA),
Pune, which operates the GMRT.
responsibility of ensuring that the benefits of
coal production are distributed to the public, he
said. Agrawal also pointed out that the miner’s
identity is synonymous with the country’s
energy sector, and the present structure with
CIL as the apex holding company is “strong and
stable”. “We have seen severe price escalation in
international coal prices last year. In such a
scenario, private companies would have
stepped up their prices as well. However, for a
government agency like Coal India, such a
situation is unlikely,” Agrawal said while
responding to a question on whether the miner
The waves are expected to originate from a large number of dancing should continue to be a government entity to
PTI monster black hole pairs, the scientists said. AFP unlock its value.
director (CMD) at the seventh extra ordinary
general meeting (EGM) held on 28 June.
As per the voting result, 77.71% of votes were
in favour of the ordinary resolution and 22.29%
against the proposal.
Mishra has been appointed as the CMD in
PTC India with effect from 29 March.
He was named as the whole-time director of
the company with effect from 24 February,
2020, up to 23 February, 2025, or the age of 62
years—whichever is earlier, by the members of
the company at their annual general meeting
(AGM) held in September 2020.
Mishra holds a PhD from Aligarh Muslim
PTI University. PTI

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 LIVEMINT.COM
m MINT SHORTS Russian military brass
Sunak’s proposal to deport asylum
seekers to Rwanda hits roadblock
Rishi Sunak suffered a major blow Thursday after London judges
ruled his attempt to deport asylum seekers to Rwanda is unlaw-
ful, a decision that undermines his key pledge to show his Con-
off radar post mutiny
servative government as being tough on immigration. Sending
asylum seekers to Rwanda would violate the European Conven-
tion on Human Rights, which the government must comply with,
General Gerasimov has not been seen in public or on TV since the mutiny
the judges said in the split decision. BLOOMBERG
Apple defies EU over antitrust Reuters
feedback@livemint.com
charges in Spotify probe London
REUTERS
R
ussia’s most senior generals have
dropped out of public view fol-
lowing a failed mercenary
mutiny aimed at toppling the top
brass, amid a drive by president
Vladimir Putin to reassert his authority.
Unconfirmed reports say at least one
person has been arrested.
Armed forces chief of staff General Val-
ery Gerasimov has not appeared in public
or on state TV since the aborted mutiny on
Saturday when mercenary leader Yevgeny
Apple Inc. is set for a showdown with European Union anti- Prigozhin demanded Gerasimov be
trust regulators, insisting it doesn’t need to make any more handed over. Nor has he been mentioned
changes to its App Store after it was hit by formal charges in a defence ministry press release since 9
over its treatment of music streaming rivals such as Spotify June. Gerasimov, 67, is the commander of
Technology SA. Ahead of a hearing in Brussels on Friday, Russia’s war in Ukraine, and the holder of
the iPhone maker insists that the EU wrongly accused it of one of Russia’s three “nuclear briefcases”,
illegal curbs on the likes of Spotify that prevent developers according to some Western military ana-
from steering users away from the App Store.BLOOMBERG lysts.
Absent from view too was General Sergei
Surovikin, nicknamed “General Armaged-
UBS taps Morgan Stanley’s Wipf to don” by the Russian press for his aggressive
tactics in the Syrian conflict, who is deputy
help lead Credit Suisse tie-up commander of Russian forces in Ukraine.
Tom Wipf, a vice chairman at Morgan Stanley, is departing the Meanwhile, Bloomberg has reported cit-
bank after almost four decades to join UBS Group AG. Wipf con- ing an unnamed person aware of the matter
firmed the move in a telephone interview on Tuesday, while that military prosecutors have questioned
declining to comment on the specifics of his new role. Represent- Surovikin over several days about his links
atives for Morgan Stanley and UBS declined to comment. An to Wagner mercenary leader Prigozhin.
industry stalwart, Wipf first joined Morgan Stanley in 1986 after The general is being kept in one place but
heading up securities lending at Citi, according to his LinkedIn isn’t in prison, the report citing the person
profile. BLOOMBERG said.
A New York Times report, based on a US
intelligence briefing, said on Tuesday Sur-
Smoke hangs over US Midwest, ovikin had advance knowledge of the
mutiny and that Russian authorities were
East, hurting air quality checking if he was complicit.
Chicago/Washington: Hazy, smoke-filled skies from raging The Kremlin on Wednesday played
Canadian wildfires hovered on Wednesday over the US Midwest down the report, saying that there would
and East, where millions of Americans were urged to limit out- be a lot of speculation and gossip.
door activities as the poor air quality made for dangerous, US officials told Reuters on Wednesday
unhealthy conditions.Much of the Midwest —from western Iowa that Surovikin had been in support of Pri-
through Illinois and Wisconsin and into Michigan and Ohio—was gozhin, but that Western intelligence did
under an air quality alert expected to last into Thursday or even not know with certainty if he had helped
longer, the National Weather Service said. REUTERS the rebellion in any way.
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GLOBAL FriDay, 30 JuNe 2023
New Delhi 11
Amazon to face its
biggest challenge
yet from the FTC
Bloomberg
feedback@livemint.com
L
ina Khan’s Federal Trade
Commission has already
filed three cases against
Amazon.com Inc. Now she’s
gearing up for the Big One.
In the coming weeks, the
agency plans to file a far-reach-
ing antitrust suit focused on
Amazon’s core online market-
place, according to documents
reviewed by Bloomberg and
three people familiar with the Lina Khan, chairwoman of the
case. The main allegation is Federal Trade Commission.
expected to be that Amazon
leverages its power to reward already includes complaints
online merchants that use its against Alphabet Inc.’s Google
logistics services and punish and Meta Platforms Inc., along
those who don’t. with an investigation into
FTC investigators and Apple Inc. Amazon says Khan
Khan’s office have been honing should recuse herself, owing to
the complaint for several her public statements about the
months, two of the people said, company. Doing so would
and finalizing key details such avoid drawn-out litigation on
as where to file suit. Khan and whether Khan has a conflict of
General Valery Gerasimov, 67, was the commander of Russia’s war in Ukraine. AP her colleagues are keen to file interest, but could make the
before personnel changes in case harder to win.
The Russian-language version of the “The armed insurgency by the Wagner August, according to the peo- Amazon executives will get a
Moscow Times and one military blogger private military company has become a ple, who cautioned that the final chance to argue their case
reported Surovikin’s arrest, while some pretext for a massive purge in the ranks of timing could slip. before the FTC’s three com-
other military correspondents who com- the Russian Armed Forces,” Rybar said. Based on her public com- missioners, including Khan,
mand large followings in Russia said he and Such a move, if confirmed, could alter ments, Khan is unlikely to but that “last rites” meeting
other senior officers were being ques- the way Russia wages its war in Ukraine— accept compromises from hasn’t been scheduled, said one
tioned by the FSB security service to verify which it calls a “special military opera- Amazon and could seek to of the people and another indi-
their loyalty. tion”—and cause turmoil in the ranks at a restructure the company—a vidual who requested anonym-
Reuters could not determine whether time when Moscow is trying to thwart a dramatic outcome that Ama- ity to discuss the situation.
Surovikin had been arrested Ukrainian counteroffensive. zon would surely appeal. Both Amazon and the FTC
or was being screened, along Rybar, an It could also cement or ele- Taking on Amazon promises declined to comment.
with others, for their reliabil- influential vate the positions of other to be a career-defining moment
ity in a more standard exer- Telegram channel senior military and security for the 34-year-old Khan, who
cise. run by a former figures regarded as loyal. rose to prominence articulat-
Rybar, an influential chan- There was no official com- ing fresh analysis of how the
Russian defence
nel on the Telegram messag- ment on what was going on Seattle-based company abuses
ing application run by a press officer, said from the defence ministry. its market power. In a promi-
former Russian defence min- a purge was on Some Russian and Western nent law review article, Khan
istry press officer, said a purge military and political analysts argued that the existing anti-
was under way. He said the believe defence minister Ser- trust enforcement framework
authorities were trying to weed out military gei Shoigu, a veteran Putin ally who Prigoz- was ill-equipped to tackle the
personnel deemed to have shown “a lack of hin wanted to bring down with Gerasimov potential harm Amazon poses
decisiveness” in putting down the mutiny because of his alleged incompetence, may to competition.
amid some reports that parts of the armed actually now be safer in his job. General Khan’s appointment to lead
forces appear to have done little to stop Viktor Zolotov, head of the National Guard the FTC supercharged the
Wagner fighters in the initial stage of the and once Putin’s bodyguard, appears to be Biden administration’s crack-
rebellion. another beneficiary. down on Big Tech, which
 12 FriDay, 30 JuNe 2023
New Delhi LONG STORY LIVEMINT.COM

WHERE HAVE ALL THE

sTArTup hEDgEhOgs gOnE?
Probably, there is no VC-funded unicorn in India that is likely to stand the test of its private valuation in a public market
BLOOMBERG

Investors are marking down the valuation of their startup portfolio. Earlier this year, US-based investor Baron Capital marked down the valuation of Swiggy, while BlackRock and Prosus did the same with Byju’s. Last year, SoftBank slashed the valuation of Oyo Hotels on its
books. Going by the benchmarks of 2022, even an undervalued company like BigBasket may struggle to justify its valuation when measured by the yardstick of price-earnings to growth. MINT

T.N. Hari their investors through initial public disintermediate the platform. In anticipation, some of this has already The nexT 400 mn
mint
feedback@livemint.com
bengaluru
offerings (IPOs).
Zomato kicked off this IPO fest, listing at
a premium of 53% on its issue price. The
The platform was both a game changer
and a necessity. Many e-commerce start-
ups, too, would pass this test. However,
SHORT
STORY
begun to happen with unicorns that con-
tinue to have high cash burn. US-based T he excessive euphoria around build-
ing large and valuable companies
investor Baron Capital marked down the with VC money is probably fading slowly.

S
ome comparisons can be eye- verdict was unanimous: ‘India’s new age not all big problems are amenable to tech valuation of Swiggy by 40%; Blackrock India will continue to offer large and inter-
popping. Here’s one of them. tech companies had come of age’. And solutions. The devil, therefore, lies in the WHat and Prosus did the same with Byju’s, by esting problems that would excite entre-
IT services companies in India when Nykaa went public less than four details. Tech solutions to the big problems nearly 70%; and SoftBank cut the valua- preneurs, and many of these problems can
have been around for 30-40 months later, and listed at a premium of in education, healthcare, skills/employa- During the era of easy money, tion of Oyo by more than 70%. be solved only by applying the basic prin-
years, and the collective market nearly 80% on its issue price, this narrative bility, property/real-estate, and financial many ill-conceived ideas were Going by the benchmarks of 2022, even ciples of business building.
cap of the top 10 companies, which gener- solidified. Those sceptical about unprofit- inclusion were hastily deployed without a funded, valuations across the board a grossly undervalued company like Big- But not all problems and markets are
ate a profit after tax of nearly $12 billion, isable companies going public had to lie low. careful assessment to determine whether got inflated, and fundamentals of Basket would struggle to justify its valua- conducive to being addressed by a few
roughly $320 billion. The average growth In the meantime, Paytm was preparing they were really game changing enough to what constitutes good tion when measured by the yardstick of well-funded hyper-scaleable startups.
rate of these companies is about 15%. This for the country’s biggest IPO. The IPO was get customers to pay. product-market fit were ignored. price-earnings to growth. Therefore, the Founders need to revisit the idea of scal-
translates to a price-earnings ratio of 27 subscribed nearly two times and the The collapse in the edtech and prop- majority of unicorns that could have real- ing, and ‘small’ may after all be beautiful in
and a price-earnings to growth ratio of 23. demand from institutional buyers was tech sectors in the recent past is sympto- istically aimed for an IPO in 2023 will have certain contexts.
And IT services companies have been nearly three times the number of shares matic of this gap. and to take haircuts, in varying degrees, on There is also the realization that it is far
operating with a near perfect product- reserved for them. Just 10 days after Nykaa’s In the property transaction space, broker their valuation, or postpone the IPO. They easier for first generation entrepreneurs
market fit, or the extent to which a product stellar debut, when Paytm went public, it networks were already doing a reasonably Easy money induced two fatal will need to sharply reorient the business in India to build tech companies that
or service is addressing a real market need. opened at a 10% discount to its issue price. good job of addressing an infrequent and errors. One was a mistaken towards profitability. deliver products and services for well-off
They also operate in a space that has a rela- It closed day one 27% below the issue price. high-value need of the customer. Quite belief that the ubiquity and Another category of startups includes consumers at the top of the pyramid than
tively low degree of difficulty in compari- This was probably the worst debut on the obviously, if one would have asked custom- size of a problem was all it took those that continue to be unprofitable to build and deliver basic products and
son to startups that followed Flipkart— stock markets in a very long time. ers if they were totally happy with the cur- to rapidly build large and because of blindly using high customer services profitably for those in the middle
startups have tried to solve some of India’s Though many analysts and observers rent state of affairs in this space, their profitable companies. experience scores and large funding with lower disposable income.
most wicked and intractable problems had questioned Paytm’s business model answer would be ‘no’. However, mere dis- rounds as surrogates for great product- The ultimate example of pandering to
with varying degrees of product-market fit. and its utter lack of focus, very few had satisfaction with the current solution, as market fit. They will have to question their the top 100 million consumers has been
Yet, in 2022, the collective valuation of anticipated this collapse on day one. So, Rob Fitzpatrick tells us in his book The Mom moreover offerings and seek to make sensible pivots. the irrational obsession for quick com-
the unicorns, or private companies with a what happened in just 10 days? Test, does not automatically mean that this But there may not be enough room for a merce and the rush to launch 10-minute
valuation of over a billion is a problem worth solving. Dissatisfaction Many believed that customer meaningful pivot. Some grocery delivery. The
dollars, was roughly the TwO faTal errOrs with the current state of affairs is the default delight and high repeat rates of them are likely to shut. top of the pyramid con-
There is a category of The excessive euphoria
same as that of the top 10
IT services companies
even though these uni-
unicorns that lost their T he era of easy money
was both good and
bad. Good because by
state of customers. What needs to be vali-
dated early on in the game is whether the
alternative solution is a game changer that
meant great product-market fit.
The truth? There is no fit until
they come at a price point that
All quick commerce
startups and many in the
edtech and proptech
around building large and
sumers had already been
spoilt for choice and a
60-minute delivery by
corns were burning a way by diversifying into putting the startup eco- customers would be willing to pay for. makes the business profitable. sectors would fall into valuable companies with VC multiple platforms was
whole lot of money. unrelated areas, opting for system on steroids, it Easy money also lulled everyone into this category. money is probably fading already available. Cut-
Take the case of inspired thousands of believing that customer delight and high Probably, the only two ting this down to 10 min-
edtech company Byju’s, hasty M&As to keep the young professionals to try repeat rates meant great product-market and learn the new rules of the game. Public edtech startups that will slowly. Founders need to utes was stretching the
one of India’s most valu- their hand at entrepre- fit. Customer love and repeat rates are companies are managed to a quarterly continue to thrive in the idea of convenience to a
able startups. In growth story alive. neurship. And bad merely indicators that you are probably rhythm, with a high degree of predictability, new environment are revisit the idea of scaling. new level.
2020-21, the company’s because many ill-con- doing something right. The truth, how- governance, and disclosures. By the time Simplilearn and Entri. While it is certainly
loss, at ₹4,588 crore, was twice its revenue. ceived ideas were funded, valuations across ever, is that there is no real product-mar- startups come close to an IPO, there is also Both have deeply understood that the an acceptable market segment and a
Yet, its valuation in 2022 was an incredi- the board were highly inflated, and funda- ket fit until customer love and repeat pur- far more clarity on the valuation drivers. only time most Indians pay for any kind of meaningful target for some, it pales in
ble $22.6 billion. mentals of what constitutes good product- chases come at a price point that makes Earnings and growth, as opposed to rev- offering in education is when it results in comparison to the massive existential
Things didn’t quite add up, but an era of market fit were ignored. And the heady the business profitable. enue multiples and scarcity value, have a a job, a promotion, or a salary increase. problems that limit availability of afford-
easy money was probably not the right concoction of venture capital (VC) money, One indicator of the structural attract- disproportionate influence in valuations as And finally, there is a category of uni- able, effective and essential services to
time to unpack the nuances. media spotlight, and instant fame created iveness of a business is the ratio of the life- embodied in the idea of price-earnings to corns that lost their way by diversifying the next 400 million Indians—just below
The funding winter that followed on the wrong role models. It also proved to be time value (LTV) that any one customer growth. Any mismatch between prior valu- into unrelated areas, opting for hasty the top of the pyramid.
the heels of startup India’s tentative entry the undoing of many founders and startups. generates for the business to cost of ations and valuations as determined by the mergers and acquisitions to keep the Startups that aim to be successful in the
into the public markets arena in the sec- Easy money induced two fatal errors in acquiring the customer (CAC). This ratio more acceptable methods relevant for growth story alive. They also indulged in next phase need to nurture a deep under-
ond half of 2021 offered some rich judgement. One was a mistaken belief that could be low or even negative for a short mature and public companies are expected massive mis-selling, or deliberately standing of the problems of this 400 mil-
insights, and created conditions condu- the ubiquity and size of a problem was all while in the initial phase. But if it contin- to be corrected in favour of the latter. ignored governance. lion Indians. They also need some imagi-
cive to reflect from these insights. it took to rapidly build large and profitable ues to remain low or negative for extended The correction could happen with a Some of them have just withered away nation around creating low-cost products
companies. When viewed with a macro periods of time, it is a big red flag that you sharp decline of the share price (as in the and others have been in the headlines and solutions .
IPO euPhOrIa Of 2021 lens, many of India’s problems are big and could ignore at your own peril. case of Paytm) or the share price remain- with bad news trickling in every other day. India’s destiny cannot be equated to the

T he founding of Flipkart in 2008 trig- waiting to be solved more efficiently. And

gered a new wave of first-generation in all fairness, some tech startups have
entrepreneurship in India. In the follow- come up with innovative solutions. In the
Startups that ignored this wisdom
eventually went down. Quick commerce
is stuck in this quagmire and is desper-
ing flat over an extended period even
when the company keeps growing (as is
likely with Zomato or Nykaa).
These unicorns, and their investors, will destiny of the upper crust that comprises
have to do some soul searching. less than 10% of the population. It is the
In the ultimate analysis, when all the destiny of those at the middle and the bot-
ing decade, startups that were inspired by process, they created insurmountable ately hoping to find a way out of this trap. There is probably no VC funded uni- noise dies down and the dust settles, the tom of the pyramid—which comprises
the success of Flipkart—Zomato, Nykaa, entry barriers that allowed them to grow corn in the current lot that is likely to winners would be what author Jim Collins more than 90% of the population. And
Paytm and BigBasket among others— unhindered. For example, technology The endgame stand the test of its private valuation in a calls the ‘hedgehogs’—those that stayed entrepreneurship must enable their tryst
made themselves both loved and indis- combined with network effects worked
pensable in the lives of Indian consumers. like magic when it came to cab aggrega-
Some of them were set to unlock value for tion and there was no way anyone could
S tartups that have listed or plan to list are
at a sharp kink in their journey as they
graduate from a private to a public company
public market. Even those that are profita-
ble, or near to profitability, will have to
take a non-trivial haircut.
incredibly focused on the one or two with destiny.
things they did well and remained
grounded.
T.N. Hari is an author and co-founder of
Artha School of Entrepreneurship.
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 LIVEMINT.COM MINT MONEY FriDay, 30 JuNe 2023
NeW Delhi 13

WHAT'S THE FOREX RATE?

Whether you are planning
overseas travel or want to
Verified trading P&Ls are fine
but be wary of the loopholes
send money abroad, it is
always a good idea to shop
around for the best forex
exchange rate. From banks,
travel aggregators to money
changers, various small and
big players sell foreign
exchange. To simplify your
work, here is a list of INR to
USD forex rates offered by
some of the major banks
and travel aggregators. We
Verified P&Ls, a collaborative effort between brokers and third-party platforms, promote transparency
recommend that you also
check the commission being Akshat Rohatgi
charged by these players to
ensure that you are getting feedback@mintmoney.com
the best deal. How credible are verified trading P&Ls

I
t was in 2020—the year of the Here are the loopholes and limitations of verified P&Ls that stress on comprehensive metrics
FOREX RATES (/$) Covid pandemic, that a new trend and consistent disclosure for retail investor protection.
Wire transfer* Buy forex started playing out. Self-pro-
Bank/travel
claimed financial gurus began to MAR 2020 2020-2022 JUN 2022 ONWARDS
aggregator inward Outward Forex/travel card Cash adopt social media, mainly You- Market crashes due to Finfluencers advertise F&O Trader finfluencers
SBI 81.25 82.75 83.20 83.40 tube and Instagram, to lure and exploit covid; millions of retail trading, start selling courses. post fake P&L
people stuck in their homes during the demat accounts are Thousands of paid telegram screenshots to trap
Bank of Baroda 81.57 82.38 82.80 83.20 lockdown. Their modus operandi was opened trading calls channels emerge retail investors, market
takes note
Canara Bank 81.64 82.37 82.58 NA
simple: First, a message to the viewers:
“Here is how you can amass a fortune FEB-MAY 2023 JAN 2023 NOV 2022
IndusInd Bank 80.48 83.48 84.27 84.57 by trading in the markets.” This was fol-
FYERS and Zerodha Sebi says 89% retail traders lose Sensibull launches
lowed by screenshots of their trading launch there own money; NSE becomes the largest #VerifiedP&L; fake
Kotak Bank 80.54 83.45 83.85 84.42 statements that showed astronomical #Verified P&L products derivative exchange by volumes traders are exposed
HDFC 80.74 83.33 83.57 84.14 profits made by them in daily trades. for the 4th time
And with that, they established their
ICICI 80.15 83.76 83.55 85.11 credibility and gained the trust of their How #VerifiedP&Ls work?
followers. The trading statements were
Axis Bank 79.67 84.46 85.15 84.90 Brokers: Zerodha & FYERS Third-party platforms: Sensibull
fake, but it got investors hooked.
Yes Bank 80.53 83.38 84.29 84.29 For most retail investors, the lure of TRADERS can access their SELECT verified P&L; TRADER has to connect SENSIBULL uses the
easy money was irresistible as these P&L under ‘my account’ at move on to select time his broking account to broker's backend API
broker's backend. period (custom time Sensibull and provide to fetch the current
Thomas Cook 80.46 83.35 83.20 83.58 influencers promised to share their frames available) access market values of the
Note: Data collected from website of respective entities as on 28 June 2023; Rate denotes INR/USD; Rates are as mentioned
‘expert’ guidance on trading in futures trader's positions
on the website of the bank/FI and it may vary according to different amount slabs; *Telegraphic Transfer (TT) buying and and options (F&O). This expert gui- REALIZED as well as ONE broker account = One
selling rates used. SELECT trading segment:
Compiled by BankBazaar.com dance was soon sold in the form of paid unrealized P&L shown, as equity, F&O, currrency, Sensibull account = One
online courses on how to successfully opposed to only MTM of commodity and MFs Twitter account.
trade in derivatives. And subscribers third party apps
lapped them up. BROKER OPTION to hide trades, ENABLE the ‘share
Between 2020 and 2022, the study OPTION to hide trades, generates a link on Twitter’ toggle
total capital employed

Should I buy insurance right material and other financial content

offered by finfluencers sold like hot
cakes. It was a hugely successful ven-
total capital employed
(cash+collateral)
that can be shared
over Twitter
(cash+collateral), masks
the ROI
and click on
‘publish’

P&L: Profit and loss; F&O: Futures and options; MTM: Mark-to-market; CAGR: Compound annual growth rate; XIRR: Extended internal rate of return;

after acquiring any property? ture, as measured by the large number

of new demat accounts opened by retail
investors during this period. A report
FIFO: First-in, first-out; ROI: Return on investment

Abhishek Bondia
Is it necessary to buy insur-
ance immediately after
acquiring property? If so,
what factors should I con-
sider when obtaining
insurance coverage for my
house, and how can I evalu-
ate different insurance
products to select the most
suitable one?
—Name withheld on request
Yes, you must buy insur-
ance for your house, office or
factory, after you have taken
possession. Such insurance
would cover your property
against damages from various
perils including fire, flood,
earthquake and flood. The
good thing is that a number of
such insurances are now stan-
dardized. For example, for
homes, insurers offer a prod-
uct known as Bharat Griha
Raksha policy. These stan-
dardized products have incor-
porated several of the neces-
sary extensions such as earth-
quake, reinstatement value
clause and waiver of under-in-
surance clause. So, the policy
selection and buying process is
significantly simplified.
The critical thing you must
keep in mind is the declaration
of the sum assured. This can
have a significant bearing on the
settlement amount for claims.
You should fix the sum assured
considering the estimated
amount required to reconstruct
the asset to bring it to similar
condition before the incident.
What is a whole life pol-
icy and an endowment pol-
ASK MINT
m INSURANCE
icy? Are these better than
term cover?
—Name withheld on request
Whole life policy is a type of
endowment plan. A whole life
policy typically matures at the
age of 100. The returns are gen-
erated by virtue of periodic
bonuses declared by the insurer.
If the person dies before 100,
then the sum assured is paid out
as death benefit.
The principal objective of
the term plan is to cover the
active income generating
period of the individual. Most
term insurance plans do that
by covering individuals till the
age of 65 years, the typical
retirement age. If the individ-
ual survives till this age, then it
is likely that they would have
built a corpus to take care of
their retirement and their
dependents. So, their financial
objectives are not dependent
on the payout from term
insurance.
The whole life plan works
differently. The purpose of
whole life insurance is to
almost guarantee a death
claim payout or to create a
large corpus. Since the average
life expectancy is well below
100, it is expected that a death
claim would most likely be
registered on the policy or that
a large corpus could be with-
drawn in the later years of the
insurance. The financial plan-
ning of the individual is done
in such a way that the death
benefit from the policy would
help take care of the financial
needs of the dependent.
Since the coverage period is
much longer for whole life pol-
icies, and there is a maturity
benefit too, these plans are
more expensive than term
insurance. In most cases, term
insurance is a better life cover
because it does not bundle risk
with investment return.
Abhishek Bondia is principal
officer and managing director
at SecureNow.in.
Do you have a personal
finance query? Send in your
queries at
mintmoney@livemint.com
and get them answered by
industry experts.
by the Securities and Exchange Board
of India (Sebi) states that the number of
individual traders in F&O segment
soared by about 540% from FY19 to
FY22.
After two years of euphoria, the mar-
ket finally took notice of the fabricated
profit and loss (P&L) screenshots and
deceptive practices of finfluencers. By
this time, retail investors were wary of
those who proferred investment
advice. And this affected genuine
advisers. Sensing the urgent need for
transparency and accountability, Sen-
sibull, a leading trading platform, intro-
duced a solution–verified P&L. It is
now a popular hashtag on social media:
#VerifiedP&Ls. This revolutionary ini-
tiative aimed to expose impostors and
restore faith in the trading community.
By November 2022, verified P&Ls
became a norm in the traders commu-
nity, benefitting genuine advisers and
unmasking impostors. This also helped
regain the trust of retail investors.
Recognizing the significance of
transparent P&L reporting, some
prominent brokerage firms, such as
Fyers and Zerodha, followed Sensi-
bull’s lead and introduced their own
verified P&L products.
How verified P&Ls work
Verified P&Ls is a collaborative effort
between brokers like Zerodha, and
third-party platforms like Sensibull.
Investors who are trading in the F&O
segment can access their P&L state-
ments directly in their broker’s back-
end, under the ‘my account’ section.
On Sensibull, they need to connect
their broking account and provide
access.
Once logged in, investors can select
the ‘verified P&L’ option and choose
the desired time period for their P&L
statement. This includes the option for
custom time frames. Sensibull levera-
ges the broker’s backend API to fetch
real-time market values of their trading
positions, ensuring accuracy and
up-to-date information.
Loopholes exist
Third-party platforms Brokers
Optional disclosure of capital: A trader posts an MTM Transfer of holdings & gifting of stocks: Since the
of 50 lakh in absolute terms, but they might do it on a broker cannot determine the average entry price,
capital of 50 crore. Most retail traders focus on absolute traders can manipulate prices to increase their returns.
profit without checking the ROI.
Corporate actions and unrealized P&L of pledged
Selective disclosure: Platforms do not mandate trading securities: Buyback, dividend, merger, and de-merger
frequency. Traders posting only profitable trades, could impact the buying price for extended periods.
especially in random time frames, show survivorship bias. Additionally, the P&L of pledged securities can be
manipulated until they are unpledged.
Carry forward P&L: Trader shorts Nifty, MTM 50 lakh on
Wednesday. Carries positions to Thursday, MTM 1.2 crore. No XIRR or CAGR: While brokers have ledgers and
Illusion of consistent profits. Masking positions aggravates realized and unrealized P&L, they still lack a metric to
the issue. represent performance that incorporates
Cross-trading can still occur: Linking unique IDs to twitter pay-ins pay-outs and FIFO. As performance
accounts doesn't prevent traders from buying and selling serves as a mirror to traders, this would
impact broking revenues.
through each other's accounts, trapping retailers.
GRAPHIC: PARAS JAIN/MINT
Investors can further specify the Loopholes persist the unrealized P&L of pledged securi-
trading segment they want to analyse, Third-party platforms present cer- ties can significantly impact the buying
such as equity, F&O, currency, com- tain challenges and drawbacks where it price and distort performance figures.
modity, or mutual funds. This allows concerns the disclosure of trading per- Factors like buybacks, dividends,
them to generate P&L reports tailored formance. One notable issue is the mergers, and demergers can influence
to their specific trading activities. optional disclosure of capital. For prices for an extended period, and the
A notable distinction of verified instance, an investor may post an MTM P&L of pledged securities can be
P&Ls is that they showcase both real- profit of ₹50 lakh in absolute terms but manipulated until they are unpledged.
ized and unrealized P&L, providing a could be trading with a capital of ₹50 Carry forward P&L also poses an
comprehensive view of a trader’s per- crore. Retail investors often focus on issue. Investors may post a high MTM
formance. This sets them apart from absolute profit without considering profit on one day, but if they carry for-
some third-party apps that only display return on investment (ROI), leading ward the same positions to the next
mark-to-market (MTM) values. them to join F&O training groups with- day, it can create an illusion of consist-
Privacy and customization options out fully understanding their profita- ent profits. Masking of positions can
are also available. Inves- bility in relative terms. help alleviate this problem.
tors can choose to hide Third-party Another concern arises A significant limitation of brokers is
individual trades and platforms present with the transfer of hold- the lack of metrics like XIRR or CAGR
mask the total capital certain challenges ings and gifting of stocks. to judge performance accurately. While
employed, which includes where it concerns In such cases, brokers can- brokers provide ledger information and
cash and collateral. These
the disclosure of not determine the average
realized/unrealized P&L, they do not
features offer control over entry price, allowing them incorporate metrics that consider fac-
the level of information trading to manipulate prices and tors like pay-ins, pay-outs, and the
shared publicly. performance increase their returns and first-in, first-out (FIFO) method. Bro-
Once the P&L state- thus falsify actual per- kers often avoid showcasing a compre-
ment is generated and ver- formance figures. hensive performance metric as it could
ified, brokers generate a link that inves- Selective disclosure is another chal- potentially impact their revenues.
tors can share on Twitter. By enabling lenge, as platforms do not mandate a Even with unique IDs linked to Twit-
the ‘share on Twitter’ toggle and click- specific frequency of posting, resulting ter accounts, cross-trading can still
ing ‘publish’, investors can showcase in inconsistency. Some investors tend occur. A group of traders may engage in
their trading skills with verified P&Ls. to showcase only profitable trades, buying and selling within each other’s
Though the concept of verified P&Ls often in random time frames, which accounts, trapping unsuspecting retail
has helped establish credibility of those introduces survivorship bias and does investors. This can be exemplified
advertise their trading performance on not provide a complete picture of their through activities like converting black
social media, there are loopholes that trading performance. money to white through illiquid
can skew the true picture. Furthermore, corporate actions and options.

WHAT FACTORS SHOULD YOU CONSIDER WHEN APPLYING FOR AN EDUCATION LOAN?
depend primarily on the type of course, university, and academic ing excessive loans hampers the financial health of the student
track record. Also, various factors, such as credit rating, collateral, due to the increased cost of the loan. Hence, taking an education
POWER etc., affect interest rates. Therefore, students should improve
their credit rating before applying for a loan to get the lowest pos-
loan only for the required amount is vital. Also, students should
consider repaying the education loan as soon as possible to reduce
POINT sible rate. its overall cost. In most cases, no prepayment penalty is charged
Loan repayment: The repayment terms of the loan differ in the case of education loans. However, there is another option
EELA DUBEY depending on the lender and the type of loan. With moratorium, where students or co-applicants can repay only a part of the loan
there are two options. amount to cut down on the interest and EMI amount or to reduce
We welcome your views and comments at a) With interest payment: The parent/student is required to the tenure. For instance, a student who
mintmoney@livemint.com pay interest (whether in full or in part) only on the disbursed loan Interest rates borrows ₹20 lakh can repay ₹2 -3 lakh
amount. Principal repayment starts after the moratorium period. and processing earlier to close a part of the loan. It is

E
ducation loans have become an increasingly popular option
among students, enabling them to pursue their desired
courses at their dream universities. However, several fac-
tors, like interest rate, moratorium period, tenure, etc., have an
impact on the overall cost of the education loan that the student
must bear. Therefore, due diligence is required when applying
for an education loan to avoid excessive costs. Consider the fol-
lowing factors while applying for an education loan:
Eligibility: Different lenders have different eligibility criteria
for education loans. Some institutions offer education loans only
for studying abroad, whereas others offer loans for inland and
abroad studies. Sometimes, a co-applicant who can be a parent or
guardian or spouse, etc., is mandatory. The loan can be available
only for specific courses or even those offered in specific countries.
Interest rates: Interest rates and processing charges are the
direct costs a student must bear. The interest rates for these loans
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b) Without interest payment: The parent/student is not
required to pay interest. The interest during the period of study
gets added to the loan amount, and the EMI (equated monthly
installment) starts after the moratorium period (duration of the
course plus 6 months or 1 year).
When the loan is without moratorium, the EMI starts immedi-
ately. It can significantly burden the students if the repayment
starts immediately after the course ends. Therefore, knowing the
repayment terms before taking the loan is crucial, as a default in
repayment can damage the credit rating significantly.
Interest subsidies and government guarantee schemes:
In India, the government offers interest subsidies through vari-
ous schemes to promote higher education. These subsidies
include Central Sector Interest Subsidy Scheme, Padhao Pardesh
Scheme, Central Government Interest Subsidy Scheme, etc. Also,
there are various schemes, such as Credit Guarantee Fund
not necessary to do this before starting
charges are the EMI. This can be done anytime dur-
the direct costs ing the tenure of the loan.
a student Tax Planning: Section 80E of the
Scheme for Educational Loans (CGFSEL), Credit Guarantee must bear Income Tax Act, 1961 allows a deduction
Fund Scheme for Skill Development (CGFSSD), etc. which pro- of interest on education loans taken for
vide guarantees up to a certain limit. Some schemes are available the higher education of the individual,
for inland studies, and some provide assistance for studies spouse or children of the individual. The deduction is available
abroad. The eligibility criteria are different for each of the without any limit. Therefore, the education loan can be applied for
schemes. Students should check whether any such scheme is and repaid after considering the tax planning opportunities.
available before applying for an education loan to reduce the Though funding higher education through our own finances
overall cost of an education loan. is an ideal plan, it may not be possible to do so for everyone. To
Amount of loan and early repayment: Although education avoid excessive costs, consider the above factors, compare the
loans provide the opportunity to fund high-cost education, stu- available options and choose wisely.
dents should keep the loan amount to a minimum. Loans with Eela Dubey is co-founder of EduFund, an Ahmedabad-based
lower amounts can be repaid early and can save on interest. Tak- edtech firm.
 14 FrIDay, 30 JuNe 2023
New DelhI VIEWS LIVEMINT.COM

OUR VIEW MY VIEW | FARM TRUTHS

PTI

India needs a stronger statistical

system for better policymaking
Liberate data from political interference so that India can frame policies that are better informed

the credibility of the statistical system is
now under threat.
Criticism of official statistics by
governments and political parties was
usual, and there was never an attempt to
deny us access to data. This happened
for the first time with the 2017-18 Con-
sumer Expenditure Survey (CES) that
was junked without any public debate.
HIMANSHU Questions have been raised even ear-
is associate professor at Jawaharlal Nehru lier, notably with the 1999-00 CES. But
University and visiting fellow at the Centre the then government had released the
de Sciences Humaines, New Delhi data and allowed a debate on it. Simi-
larly, the fact that for the first time after
despite demands from the general pub-
lic and academic community.
Second, even when data has been
released, there were attempts to deni-
grate and delegitimize it. The Periodic
Labour Force Survey (PLFS) is an exam-
ple. It faced unnecessary and irrelevant
criticism when it was leaked by a jour-
nalist. Employment data also suffered
the fate of the CES and Census when the
labour bureau’s annual employment
surveys, started after the 2008 financial
crisis, were discontinued after 2015.
Finally, for every official statistic,

Vande Bharat’s appeal

independence, India is unlikely to have there is plenty of alternative data that is
the decennial population Census thrown up to raise doubts on the credi-

O
fficial statistics play an impor- amounts to another attempt at denying bility of official statistics. Provident
tant role in any society, more so access to vital data. Both data-sets are fund and pensions data was used to dis-
in a developing country. They crucial policy inputs. For example, the credit the official employment statistics

goes well beyond speed are vital not just for basic information
on the economy and society, but are
crucial inputs to policymaking in any
modern democracy. That is why Indian
CES is essential for updating the
national accounts and inflation indices.
In their absence, we are using national
accounts and inflation data that is more
and create an alternative narrative.
The absence of credible official statis-
tics has obviously given rise to alterna-
tive statistics from the private sector,
policymakers placed special emphasis than a decade old and does not reflect which is unlikely to be a substitute for
on developing the statistical system for prevailing consumption patterns. It is credible, robust and publicly available
This train service is not all that fast and surely no match for Chinese railway achievements. an independent India. The develop- not just survey data, but even adminis- data. While these private statistics fill a
ment of our statistical system coincides trative data that is no longer readily void, they come with their own set of
Yet, it’s a scalable project and could easily impress millions in a country of rickety railways with the freedom of the country, and in available as it used to be. Data on distri- issues and are unlikely to be viewed in
several cases even predates it. bution of income tax by income classes policy circles with the same credibility.
It was the careful support of policy- available since independence was dis- Data-sets on employment, poverty,
makers and the political class that con- continued after 1999-00. It was briefly inequality, education and even basic

T
rains running on time have been
overtaken by speed as a talking
point. When exactly this happened
is hard to identify. On a timeline
stretching all the way back to steam
engines, we can pin the shift on
Japan’s Bullet trains. Flagged off in the 1960s,
their clever branding gave them instant fame
around the world—and other railways a fast-
moving target to chase. It was decades later
that China zipped ahead with its sudden
maglev acceleration. As visitors to Shanghai
testify, magnetic-levitation travel is a marvel
of technology. Freed from the friction of track
contact, a maglev train ride is a smooth glide at
a whizzy 400km per hour. By most accounts,
it’s a sensation in a class of its own. Its engine
does not have a Bullet-like snout, but a sleek
aerodynamic front. This is a look sported by the
Indian Railways’ Vande Bharat trains as well.
While it may be taken as a sign that India has
also joined the race for pace, the fact that these
move no faster than about 130km per hour
should keep expectations capped.
travel hours. Technically, it represents only a tributed to the Indian statistical system revived in 2012, but was again discon- population numbers are essential
modest advancement over what we had earlier. commanding respect globally. It is no tinued after 2016. Data on caste as part inputs for several government pro-
exaggeration to say that it was in many of the SECC 2011 is yet to be released grammes. Public availability of such
In a key sense, it’s what the auto industry calls a ways top-notch, and even a pioneer in data would let researchers generate
‘re-skin’ job—a spiffy new exterior, that is, to implementing sample surveys and debates on various important matters of
mask much the same under the hood. As it other statistical system instruments. governance. In fact, credible data is no
boasts of slightly better traction and speed than But the last 75 years have seen India’s QUICK READ less essential to a democracy than a free
other Indian trains, it qualifies as an upgrade. economy and society change. Our press. It allows society to question the
statistical system also needed to change It is regrettable that data is being government, analyse social and eco-
But it doesn’t rid the ride of shudders and jerks. to adapt. And it has. Ever increasing withheld and debates prevented nomic problems, and raise fundamental
Among its most notable features is its use of data is required to provide a better for political reasons despite the questions. Denying people access to
‘regenerative braking’, by which the energy snapshot of the economy. importance data holds not just in vital data is not just undemocratic, but
generated in this process is captured for re-use. Unfortunately, while the last few dec- assessing an economy or society also blinds policymaking to changes in
As for cabin comfort, with on-board wi-fi and ades have seen a proliferation of data but also for better policymaking. the economy and society that may need
from multiple sources, its quality has attention. The need of the hour is to
accessible plug-in points for devices, Vande declined. In particular, the statistical We must liberate India’s data strengthen the country’s statistical
Bharat offers just about the minimum that a system has been politicized and has mechanisms from political system to reflect these changes and
traveller would expect, even if that’s a lot more largely lost its independence. Interven- clutches so that more and better provide better-quality data. An essential
than what the country’s railway users have tions have taken the form of denial, quality data is produced and prerequisite for this is that the system
been accustomed to. All taken into account, delegitimization and diversion. While the credibility of the country’s is given the independence needed to
all governments have been complicit, statistical system is restored. generate data without fear or favour.
spruced up railway services mark a welcome
break from the past. But had it not been for a
markedly more contemporary facade, little else
about Vande Bharat would impress anyone
who has taken trains in well-off countries.
Given the constraints of our railway infra-
structure, incremental improvement is perhaps www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Monday, July 1, 2013 Vol.7 No.155 `3.00 in Delhi­NCR/`4.00 outside Delhi­NCR 24 PAGES

This week saw the launch of five new Vande the best we can hope for. As land-acquisition RAGHURAM RAJAN: Central
bankers on the ground >23
CAPITAL CALCULUS: What are
Indian politicians thinking? >5

Bharat Express services, taking the total to 23. delays in the Ahmedabad-Mumbai Bullet train CONTENT PARTNER
BANKER’S TRUST: Rupee at 60—the
options before the Reserve Bank >6
INTERNATIONAL: EU demands answers
over alleged US bugging >5

The electric locomotive that powers them was project indicate, a speed-up of the sort that SENSEX 19,395.81 ® NIFTY 5,842.20 ® DOLLAR `59.39 ® EURO `77.74 ® GOLD `25,775 ® OIL $102.16 ®

India­Asean Inside the

Nowadays almost all
BACK TO TAHRIR QUICK EDIT

trade pact Egypt on the edge over pilgrimage Balance

locally developed, and since it can operate on could rival what took place in China—where to be inked
in August fresh wave of protests
of horrors
B Y R UDRANEIL S ENGUPTA
rudraneil.s@livemint.com
·························
sheet bomb
T here is a ticking
bomb in many

capable people are terribly

corporate balance sheets,
B Y E LIZABETH R OCHE MOHAMED ABD EL GHANY/REUTERS GAUCHAR/JOSHIMATH and two releases by the
elizabeth.r@livemint.com
O n 14 June, when constable Reserve Bank of India

our creaky old network of tracks, the plan is to one can reach a city like Hangzhou at 300km
························· Kuldeep Singh Mehra of (RBI) serve as a useful
KUALA LUMPUR
the Uttarakhand Armed Police reminder of this.

A long-awaited trade pact

between India and the As-
sociation of Southeast Asian
reached Kedarnath, teeming
crowds of pilgrims had taken up
every inch of space in the tem-
RBI put out external
debt numbers that show
how the stock of foreign
Nations (Asean) will be signed ple town. The lodges were debt raised by Indian
in August, Malaysia’s trade bursting, and the tide of people firms has soared since
minister Mustapa Mohamed going up the 14km trek route— 2007. In a separate
said, presaging a freer flow of by foot, horse, mule or on the publication on financial

span much of the country with “high-speed” per hour on a non-maglev train—is likely to be afraid of being ridiculous,
investment and services. back of porters—was relentless. stability, it noted that
India and the 10-member In season, 10,000-12,000 people much of this private
Asean announced the conclu- visit the area every day. corporate debt raised
sion of talks on the free trade Mehra, 27, squat, square- overseas is unhedged.
pact on investments and serv- jawed and with large forearms, The rush to raise debt
ices in December when mem- was back in service after a abroad took off during
bers of the grouping met in month’s holiday to celebrate the great credit bubble of
New Delhi for the India-Asean the birth of his first baby. That the previous decade,
commemorative summit. The night he called his wife, heard goaded on by a finance

links afforded by it. Although these trains fraught with complications. Still, modernizing
Asean members are Brunei, his baby crying, and went to ministry that took a
Cambodia, Indonesia, Malay- sleep content. remarkably benign view

and are miserable

sia, Myanmar, Laos, the Philip- The next morning, when the of the risks involved.
pines, Singapore, Thailand first rains fell, Mehra was Then companies misread
and Vietnam. pleased—it would offer some the direction of exchange
“It will be signed in August,” respite from the push-and- rates—or were given
Mustapa told a group of Indian shove of the pilgrims, cool wrong advice by their
journalists last week in Kuala bankers—and decided
Lumpur, Malaysia’s capital. TURN TO PAGE 7® not to buy insurance

hurtle along swiftly in comparison with the what we have is a worthy enterprise for the vast
“We are country coordinator
for the negotiations for Asean.
The movement of people has
been the biggest problem, but
against a drop in the
ALSO SEE value of the rupee by
Marching against Morsi: Egyptians massed by the tens of thousands to demand President Mohamed Morsi’s hedging against rate
ouster while the Islamist leader’s backers gathered at a duelling rally, stoking fears of a conflagration of >Systems inadequate to predict repeat of movements.These

because of it.
we have been able to narrow violence after days of deadly clashes. In scenes reminiscent of the uprising that drove Hosni Mubarak from disaster >P9 unhedged exposures cast
the gap and the target is now power in 2011, thousands streamed into Cairo’s Tahrir Square, saying they were determined to reclaim >Debate deepens on construction activity a long shadow over
to sign this (pact) in August. control of a revolution in Egypt whose goals have been trampled to cement the power of Morsi’s Muslim in region >P9 corporate finances.
August is when our Asean eco- Brotherhood supporters. See Page 24 >Views: A state caught unprepared >P22
nomic ministers’ meeting

slow coaches that carry most of our railway number of people it can serve, even impress. If
takes place in Brunei. We man-
aged to keep the compromise
agreed to in Delhi in Decem- CURRENCY RISK
ber.”
India hoped to sign the deal
at the December summit in
New Delhi, but both sides an-
Rupee fall to diminish
nounced the conclusion of
returns of PE firms
passengers, they can only move as fast as our wowing multitudes of people who haven’t had
talks with the governments of
the 10-member Asean going
back to their parliaments for
ratification of the deal. B Y D EEPTI C HAUDHARY Friday, it closed at `59.39 to a
The summit was held to deepti.c@livemint.com dollar.
························· Investors say they may now
MUMBAI consider increasing currency
TURN TO PAGE 4®

O verseas private equity (PE) depreciation rates, which may

F YOD OR D OSTOE VSKY

NOTE TO READERS investors, who are finding prompt them to seek higher re-

ageing rails allow. Unlike China’s maglev, a better experience is a priority, then it’s on
The Media Marketing Initiative
on Pages 18 and 19 is the
equivalent of a paid­for
advertisement, and no Mint
journalists were involved in
creating it. Readers would do
well to treat it as an
advertisement.
it difficult to exit Indian firms
in which they had invested 5-7
years ago because of poor mar-
ket conditions, now also stand
to lose 30-40% on returns if
they do so since the rupee has
weakened sharply against the
dollar.
Such investors typically in-
turns or premiums on their In-
dia investments. These inves-
tors typically expect 20-25% re-
turns.
“When investments are
made in dollars, it’s difficult to
hedge currency risks as costs
involved are very high. We
would eventually consider

which uses costly magnetic tracks and has the right track with Vande Bharat. The very
vest for 5-7 years before exiting
companies and factor in a cur-
rency depreciation of about 3%
a year.
The largest quantum of pri-
vate capital came into India be-
tween 2006 and 2008, at a time
when the rupee hovered be-
tween 44 and 48 to a dollar. On
seeking higher returns and
could consider 3-4% extra pre-
mium,” said a Mumbai-based
India head of a prominent glo-
bal PE fund. He declined to be
named.
“In the last two months, a
TURN TO PAGE 4®

ended up as a showpiece, Vande Bharat has the imagery it generates works in favour of the INSIDE

Rating health insurance plans

R ising healthcare costs have made insurance covers an urgent need in India.
For people who want to buy health covers, there are many options now
available, but finding the correct one is fraught with difficulty. The Mint

advantage of low-cost scalability. This means it
government. Making trains run on time isn’t
Mint is also available for R7 with
Hindustan Times in Delhi-NCR only
Mediclaim Ratings, developed by SecureNow Insurance Broker Pvt. Ltd, is a
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could eventually save a lot more passenger novel. This makeover is.

THEIR VIEW

Close the prestige gap to find takers for unfancied jobs

to stay unemployed? How do people feel
VIdya MahaMbare & VIVek JadhaV about new-age careers being pursued by
online teachers, personal trainers, content
creators and therapists in comparison with
the status of engineers and doctors? Do
Indian youth recognize how rapid changes
finding that has come to be known as the even if the expected incomes don’t differ perceived importance of job status may fall
Treiman constant (after the work of Donald much. The measured unemployment, thus, the longer one stays unemployed, especially
Treiman in 1977). has a voluntary component. Groh et al (2014, for men. If this were the case, the unemploy-
Job status and income tend to go hand-in- shorturl.at/oFOR9) find substantial evidence ment rate among educated people would be
hand. For example, high public sector sala- of Jordanian unemployed youth’s reluc- lower in higher age groups.
ries induce many unemployed to queue for tance to accept jobs that are not socially We find that unemployment among edu-

are, respectively, professor of
economics at Great Lakes
Institute of Management,
Chennai; and a doctoral
student at the Madras School
of Economics
This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
I
ndia has a lot to celebrate. It will remain
among the fastest-growing economies in
the world. One disturbing feature, how-
ever, has remained unchanged: high unem-
ployment among the educated youth.
The unemployment rate, the proportion
of people unable to find work among those
who wish to work, peaks at over 20% among
Indian graduates aged 22-25 years, based on
our estimates from the Periodic Labour Force
Survey Report 2021-22. Among those with
less than graduate level of education, peak
unemployment is about 5%.
The adoption of artificial intelligence (AI)
and other tech tools by companies may
worsen unemployment among the edu-
cated. A debate around the lack of employa-
bility of educated youngsters and a skill mis-
match has raged over the years. A less dis-
cussed issue is the role of occupational
prestige or job status. Often, it gets skirted,
since ‘unsuitable’ jobs don’t get discussed.
How far does the occupational prestige of
available jobs induce highly educated youth
in the future of work have the potential to
alter the matrix of job prestige?
Which are high- and low-status occupa-
tions? For the US, prestige ranks are availa-
ble for 860 occupational titles derived from
the 2012 General Social Survey, the most
common measure of status in sociology. As
one would expect, doctors, lawyers, engi-
neers, university professors, scientists,
financial analysts and investment bankers
are among the top-status occupations.
At the other end, low-status jobs include
cleaners, fast-food workers, farm labourers,
truck drivers and security guards, among
others. During covid, healthcare workers,
who are less visible than frontline doctors
and nurses, were crucial in keeping hospitals
and other medical facilities up and running.
These essential jobs lack prestige.
While societal perceptions of job status
can vary based on cultural factors and across
genders, it is by and large similar across soci-
eties at both ends of the spectrum. Most soci-
eties tend to rank occupations similarly, a
public sector jobs. But occupational prestige prestigious. Dolton et al (1989) find that cated Indians declines as age rises and
and income may not always go hand-in- among UK graduates, the social status of reaches around 5% among 30-year-olds.
hand. For example, nurses, teachers or even occupations is a major determinant of occu- Men can no longer afford to stay unem-
factory workers may sometimes earn more pation choice. ployed, so they take up a job even if they
than a typical engineer. Low-status jobs, especially for men, compromise on salary and status, while
In India, education levels have rapidly adversely affect their chances of a ‘good’ women stop looking for a job. Can we alter
increased. States such as Tamil Nadu now marriage. In Indian society, where many the rank order of occupational prestige?
have half their 18-23- marriages are arranged Educated youth aspire for professional
year-olds in higher edu- or take place only with careers and growth opportunities. But
cation. At the all-India QUICK READ parental consent, job sta- equally, dignity and respect at workplaces
level, the goal of govern- tus influences the socio- (or accorded by clients), recognition and a
ment policy is to reach The debate on unemployment economic background. good work environment are essential, as also
the 50% mark for gross must also address the issue of When will educated vocational skill-based education alongside
enrolment in higher prestige associated with various youth take up medium-to formal education. Promoting skill develop-
education by 2030. professions that keeps educated low status jobs? First, low ment and entrepreneurship while ensuring
When educated youth youth from taking up jobs that job status increases its opportunities to enhance skill intensity and
search for jobs, they get tagged as ‘unsuitable’. reservation wage—the mobility across occupations may help
often experience a dis- salary level at which peo- change perceptions of job prestige.
connect between their Job status is crucial for social ple will accept that job. If Job status is a crucial determinant of an
education levels and the standing in Indian society and the income premium individual’s social standing and thus influ-
jobs available. Medium- affects our employment choices. outweighs the lower ences our employment decisions. Policy-
to-low-status jobs induce India needs to bridge prestige occupational status, then makers may want to initiate discussions on
young educated people gaps so that there are more people may be willing to ways to alter the prestige of occupations that
to remain unemployed takers for all kinds of jobs. take it up. Second, the are expected to require more workers.
 LIVEMINT.COM VIEWS FriDAy, 30 JUNe 2023
New Delhi 15

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

Fiscal federalism needs a look-in Abortion law in America’s like

a rude joke on US democracy
by the 16th Finance Commission Turning it over to ‘the people’ has resulted in deprivation of rights

It’ll have to deal with some tricky matters such as domain overlaps, externalities and the delegation of funds to lower levels

MINT

FRANCIS WILKINSON
is a Bloomberg Opinion columnist covering
U.S. politics and policy.

SUDIPTO MUNDLE
is chairman, Centre for Development Studies.

I
t is time to heed the Constitution, and
return the issue of abortion to the peo-
ple’s elected representatives,” Justice

T
he Sixteenth Finance Commission
(16th FC) is likely to be appointed soon.
It is a good time to reflect on some
challenging issues of fiscal federalism
that the 16th FC may have to face.
First, there is the intersecting
domain of the Finance Commission and Goods and
Services Tax (GST) Council. The latter’s decisions
impact the own tax revenue flows of states and,
more importantly, the size of the central tax reve-
nue pool which is to be shared among the central
and state governments as per the recommenda-
tions of Finance Commissions. Clearly, Finance
Commission projections of state and central tax
revenues, and recommendations based on them
will be impacted by decisions taken by the GST
Council. This was a major concern during the 15th
FC deliberations when GST revenues were highly
volatile, the GST administration was yet to stabilize
and the GST Network IT platform was still prob-
lematic, especially for the preparation of e-way
bills. This greatly exacerbated the challenges the
15th FC was facing in making revenue projections
because of the unprecedented contraction of the
economy in 2020-21 in the wake of the covid pan-
demic. Fortunately, most of these problems have
been sorted out and GST has now emerged as a
large and buoyant source of revenue for both the
Centre and states.
Recent demands for greater centralization of
expenditure assignment is another issue. India has
a quasi-federal system. For purposes of legislation,
regulation and administration, Schedule 7 of the
Constitution assigns 97 subjects to the Union List,
including all key subjects dealing with national
security, external relations, Union finance, bank-
ing, foreign trade and major infrastructure.
Another 66 subjects are assigned to the State List
and 47 to the Concurrent List. But for concurrent-
list subjects, in the event of differences between
any state or states and the Union, the latter’s view
will be decisive. Similarly, if there is any conflict
between Union and State legislation, Union laws
will prevail. Finally, even for State subjects, the
Union government can and does intervene
through centrally sponsored schemes in which it
incentivizes states to take up the Centre’s chosen
schemes by financing a part of the cost of these
programmes.
The case for further centralization of this quasi-
federal system mainly rests on economic consider-
ations. The analytical literature has long estab-
lished that private benefits are maximized when
the jurisdictional assignment of a subject closely
corresponds with the spatial benefit spread of
public interventions under the subject. However,
private benefit maximization has to be set off
against possible cost savings from scale economies
and lower transaction costs with greater centrali-
Samuel Alito wrote in his ruling last June Politics has hijacked the popular will on
overturning Roe vs Wade. Such democratic abortion rights in the US AFP
sentiment was a staple of the US abortion
debate long before the American court’s all state vote. This outlandish gerrymander
Republican majority overthrew Roe with that makes it possible to disenfranchise so
its ruling in Dobbs vs Jackson Women’s many voters was blessed by none other
Health Organization. After all, who were than Alito and four other Republican
these unelected judges making decisions appointees to the US Supreme Court.
for Americans? Contentious, complicated But how are “the people’s elected repre-
issues belonged in state legislatures, where sentatives” faring in delivering popular
elected representatives, close to people, sovereignty on abortion elsewhere?
subject to their influence and vote veto, Republicans in Ohio approved a ballot
would render a more judicious outcome. measure, scheduled for August when turn-
In a concurring opinion in Dobbs, Justice out is expected to be low, to raise the
Brett Kavanaugh declared that the court threshold for passing statewide ballot
would no longer meddle in the debate. measures from a simple majority to a super
“Instead, those difficult moral and policy majority of 60%. As AP reported , the
questions will be decided, as the Constitu- August measure “is aimed at thwarting an
tion dictates, by the people and their effort to enshrine abortion rights in the
elected representatives through the con- state’s constitution this fall.” The move to
stitutional processes of democratic self- seize power from people is backed by the
zation. Further, there is the issue of externalities. If of subjects that should be assigned, respectively, to government.” gun lobby, another minority faction that
social benefits or losses can spill over across Panchayati Raj institutions (PRIs) and urban local So, a bit more than a year later, how is relies on Republicans for unpopular laws.
boundaries of a lower-level jurisdiction, it requires bodies (ULBs). But once again, it was left to the “democratic self-government” going? Elsewhere, Missouri Republicans are
assignment of the subject to a higher-level jurisdic- state legislatures to decide which functions, funds In Wisconsin, the reversal of Roe left the eager to counter the popular will in similar
tion with wider spatial coverage. Finally, equity and functionaries should be assigned to PRIs and state subject to an 1849 law banning abor- fashion, as are Republicans in North
considerations may require greater centralization ULBs. Not surprisingly, there has been little tion outright (when its population was Dakota. In Arkansas, they succeeded in
to enable the provision of comparable levels of progress in such assignment in most states, since it about 305,000). The state legislature, making the ballot initiative process more
public or merit services for all citizens in a country. would empower elected PRI and ULB representa- dominated by Republicans as a result of cumbersome for the state’s people.
These economic arguments for greater centrali- tives at the cost of state legislators. State govern- gerrymander magic, has not overturned Roe vs Wade always struck me as a pretty
zation have to be seen in the context of larger polit- ments also correctly point out that it is difficult to the 1849 law and has rejected calls to legal- sketchy act of constitutional legerdemain.
ical considerations and the distribution of political transfer functions to PRIs and ULBs, which typi- ize abortion. In March, some Republican But as a political compromise, it was both
power across different levels of cally have very low capacity. Assembly members proposed modifying brilliant and more credible than the US
government. This question However, the capacity of these the 1849 ban to make exceptions, but only Supreme Court’s return of power to “the
became important when non- QUICK READ institutions cannot be strength- for rape and incest and to “clarify” when people’s representatives.” Roe acknowl-
Congress parties came to power ened unless they are provided doctors could perform an abortion to save edged the nation’s overall ambivalence on
in several states in the late 1960s, The soon-to-be-appointed 16th the resources to build such the life of a mother. Both the Democratic abortion while giving women the power to
demanding greater de-centrali- Finance Commission will have capacity. It is a ‘chicken and egg’ governor and Republican Senate majority decide on an individual case-by-case basis.
sation. It is again a major politi- to tackle problems in Centre- problem. To help break this leader declared it a non-starter. Roe was also popular. It clearly still is. In
cal issue today, with non-Bharat- state relations and solve issues conundrum, the 13th, 14th and The legislature’s proposal not a response a Pew Research Center national poll last
iya Janata Party governments in of centralization or otherwise on 15th FCs have all attempted in to the will of the people. In a decade of polls fall, 62% said abortion should be legal in all
power in several states. A change power and resource sharing. different ways to ensure substan- taken prior to the Dobbs ruling by Mar- or most cases; 57% disapproved of the
in the assignment of subjects tial fund flows to PRIs and ULBs. quette University Law School, roughly Supreme Court overturning Roe, with 43%
under schedule 7, whether An important challenge will be Vijay Kelkar, chairman of the 60% of Wisconsin voters regularly said strongly disapproving.
towards greater centralization empowering India’s third tier 13th FC, suggested that consoli- abortion should be legal in all or most Alito’s co-partisans in state legislatures
or greater decentralization, will of governance that comprises dated funds should be created cases. In a poll of likely voters taken in Wis- do not appear terribly interested in what
entail constitutional amend- panchayati raj institutions for PRIs and ULBs, funded by consin last September, only 37% supported individuals, let alone “the people,” think
ments. How this plays out will and local bodies, as this has only earmarking a share of the central a ban with exceptions for rape, incest and about abortion rights or much of anything
depend a great deal on the politi- been paid lip service so far. GST and state GST for them. the life of the mother. Only 5% said they else. Time and again, the Republican party
cal profile of the country after So far, except in one or two wanted a total ban. has shown it is committed to imposing fac-
the 2024 general elections. states, there have been no serious reforms to The irony is not only that the Republican tional rule, replacing “the people,” the
Another issue is the third tier of government. empower the third tier of government. However, if legislature, “the people’s elected repre- polyglot of America, with the chosen group
Though the Constitution referred to the impor- the electoral success of legislators at the state level sentatives,” don’t care what people want. looking to ‘Make America Great Again.’
tance of local governments and Panchayati Raj comes to depend on empowering the elected It’s that these legislators are insulated from Government of the people, by the peo-
institutions, it left it to the states to decide what representatives in PRIs and ULBs, that could set in electoral consequences for their failure to ple, for the people? One year after the
functions from the state list in the 7th schedule motion a whole different political dynamic. Bot- represent the whole public. The state’s leg- momentous overturning of Roe, returning
should be further delegated and assigned to local tom-up dependence could gradually replace the islative maps are expressly designed to the issue of abortion to the people’s repre-
governments. Subsequently, the 73rd and 74th prevailing system of top-down political patronage. deliver Republicans almost two-thirds of sentatives has proved to be just another
constitutional amendments spelt out detailed lists These are the author’s personal views. legislative seats with about half of the over- joke on democracy. ©BLOOMBERG

THEIR VIEW

Geopolitical realities may yet push India closer to Nato

have withstood the test of time. Even after
HARSH V. PANT the demise of the Soviet Union, all Indian
leaders since the end of the Cold War tried to
maintain strong ties with Russia, hoping
against hope that the Cold War romance
could be rekindled. From Narasimha Rao to
Despite growing convergence with Wash- has not been able to ignore. China’s rise and Delhi, which declared that the “Nato tem-
ington ever since the fall of the Berlin Wall, its aggression has made a strong India-US plate doesn’t apply to India.”
the Indian leadership has been wary of being partnership a veritable necessity. The It is certainly true that at the moment any
seen as closely allied with the US. It took the re-emergence of the Quadrilateral Security discussion on India’s engagement of any
threat of a prime ministerial resignation for Dialogue (Quad) and its sustained momen- kind with Nato would be a non-starter. New
Manmohan Singh’s party to rally behind him tum is a testament to the strategic impera- Delhi doesn’t do military alliances goes the

F
is professor of international
relations, King’s College
London, and vice president for
studies at Observer Research
Foundation, New Delhi
This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
oreign policy is a strange terrain where
even the best laid plans of nations have
to be moulded and remoulded, con-
structed and deconstructed, depending on
the plans of other actors. Much as nations
would like to think that they have it all
planned out, their friends and adversaries
often end up surprising and challenging
their long-held assumptions. Most of foreign
policy, as a result, ends up not what nations
plan for themselves, but what others end up
doing to them. Policymakers may feel that
they are in the driving seat, but more often
than not, it is external factors that shape the
trajectory of nations. Structural realities
transcend personal predilections and ideo-
logical preferences.
India’s strategic community is emotional
about Russia and there are good reasons for
that. When the West shunned and ostra-
cized India, then Soviet Union stood by India
through thick and thin, providing strategic
cover to New Delhi’s foreign policy aspira-
tions. Bilateral ties between the two nations
Narendra Modi, all invested in the relation-
ship to ensure that the two nations could
continue to work on areas of mutual interest.
Yet, the relationship has been on a down-
ward spiral despite the best efforts of New
Delhi. And it is primarily because of the
choices that Russia has been making. Rus-
sia’s inability to emerge from its economic
stasis, Tsarist ambitions on its periphery,
cosying up to China, and more recently its
aggression vis-à-vis Ukraine have all been
exposing Russian strategic weaknesses and
making a robust Russia-India partnership all
the less likely. Many in the Indian strategic
community wax eloquent about Russia’s
strategic importance for India, but the rela-
tionship just refuses to take off for all the
efforts being put in by Indian policymakers.
The India-US relationship, on the other
hand, presents a striking contrast. Indian
policymakers often talk about standing up to
the US. It is a barometer of Indian strategic
autonomy. Resisting American pressure,
real or fictitious, is a badge of honour.
in support of the civil nuclear deal. tive for regional players in the Indo-Pacific popular theology. And perhaps India will
Prime Minister Narendra Modi did to create mechanisms and instruments for never enter one. But just as the US is recog-
declare in 2016 that “the hesitations of his- managing power shifts in the region. nizing the need to work with a partner like
tory” were over when it came to India-US It is in this context that one must view the India which doesn’t fit the mould of a tradi-
ties, and he has indeed managed to carve out debate on India’s engagement with Nato. tional treaty ally that Washington is used to
a strong partnership with Washington. But Recently, the US Senate’s India Caucus dealing with, India should also recognize
even with this remarkable convergence, a Co-Chairs, Mark Warner and John Cornyn, that in international relations, structural
formal alliance with the declared that they would realities trump everything else. If China con-
US remains out of the introduce legislation to tinues with its assertive and aggressive for-
question. There is no QUICK READ give India ‘Nato plus five’ eign policy agenda vis-à-vis India, New
political support within defence status. This came Delhi’s options will have to evolve accord-
India for it. It offers a notable contrast that after the House Select ingly. Ideological rigidity has not served
Structural changes, India’s ties with Russia haven’t Committee on the Strate- India well in the past and it is unlikely to help
however, have their own taken off despite New Delhi’s gic Competition between India in the future.
ways of manifesting keenness while its relationship the United States and the Modi’s visit to the US last week was an
themselves. Even as with the US has expanded Chinese Communist acknowledgement that for all the Indian
many in India would notwithstanding hesitations. Party (CCP) recom- strategic community’s desire to keep away
have preferred a more mended that the inclu- from Washington, the pulls and pressures of
hands-off engagement Russia’s bad choices and sion of India in Nato Plus foreign policy have ended up making the
with the US, the chang- China’s aggression explain how would strengthen global India-US partnership the most consequen-
ing global and regional things have turned out and India security and deter Chi- tial one for India. And if this trend continues,
balance of power has could find it harder to resist nese aggression. many other shibboleths of the past will end
produced a strategic Western entreaties for a closer This saw a swift up biting the dust. India’s ‘no’ to Nato may
reality that New Delhi partnership with the West. response from New also be one of them.
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