HUAWEI INDIA JOURNEYHITS A WALL AS US TECHGIANTS UP THE ANTE

American internet major Google hasbanned Huawei from some of the Androidmobile services, in a new twist to thecontinuing trade war between the US andChina. Other US-based tech giants such asIntel and Qualcomm, too, have desertedHuawei globally, adding to the adverseimpact on the India business of theChinese telecom major. 12 >

Madhya PradeshCongress governmentin minority, says BJP

NDA leaders to meetModi, Amit Shah fordinner today amid exit poll euphoria

POLLVAULT2019

POLITICS & PUBLIC AFFAIRSPAGE 6

SUNDAR SETHURAMAN & JASH KRIPLANIMumbai, 20 May

The benchmark Sensex and Nifty hit new all-timehigh on Monday after exit polls showed the rulingNarendra Modi-led Bharatiya Janata Party (BJP)was set to win a second term in the general elections

concluded on Sunday.The Sensex climbed 3.75 per cent, or 1,422 points, to

end at 39,353, while the Nifty50 index vaulted 421 points, or3.7 per cent, to close at 11,828. Both indices surpassed theirprevious record highs touched on April 16. This is the biggestone-day gain in 10 years in point terms and the most sinceSeptember 2013 in percentage terms.

Investor sentiment was buoyed by exit polls predictingthat the BJP, with the help of its coalition partners, will comfortably reach the majority mark, allaying market fears that a change in regime at the Centre would derail economic reforms.

The benchmark indices had declined 6 per cent after hitting an all-time high last month, partly due to fears that the Congress-led resurgent Opposition would make it challenging for the Modi government to retain power in the wake ofagrarian distress and rising unemployment.

“The exit poll outcome is a big sentimentbooster. We expect the rally to continue till the final resultsare out (May 23). Markets could extend the gains even furtherif the final result mirrors the exit poll projections,” said A Balasubramanian, chief executive officer, Aditya BirlaSun Life Mutual Fund.

In the past three sessions, the Sensex has gained 2,238 points, or 6 per cent, erasing all losses for the month.

Mahesh Nandurkar, India strategist, CLSA India, said that a strong mandate for the Modi government meansconcerns on populist steps such as cash transfers and farm loan waivers will probably decline.

Foreign portfolio investors (FPIs) were seen stepping uptheir buying ahead of the election results. On Monday, they bought shares worth ~1,734 crore, even as their domestic counterparts sold shares worth ~543 crore. In theprevious eight sessions, FPIs had pulled out ~8,500 crorefrom domestic stocks.

Across-the-board buying was seen on Monday, with three stocks advancing for every one declining. Beaten-down stocks in the realty, non-banking financialcompany (NBFC) space, state-owned banking, and evenshares of beleaguered groups rallied sharply.

The Nifty PSU Bank index jumped 8 per cent, Nifty Realtyindex rose 6 per cent, and Bank Nifty index jumped 4.5 per cent to a new all-time high. Turn to Page 13 >

NIVEDITA MOOKERJI & SURAJEET DAS GUPTANew Delhi, 20 May

A high-level meeting islearnt to have been fixedbetween the HindujaGroup and Etihad Airwayson May 23 in a bid to reviveJet Airways. Top execu-tives of State Bank of India(SBI), which leads thelenders’ consortium, willbe present at the meetingto be held in Abu Dhabi,the corporate headquar-ters for Etihad.

A source in the knowsaid this was possibly thelast attempt by the SBI torescue Jet, which was

grounded in April due todearth of funds. If theEtihad-Hindujas talks failthis week, Jet will be headed to the NationalCompany Law Tribunal(NCLT), he pointed out.According to people close

to the development, thislooks like a tough deal andmoving NCLT appears tobe the logical next step.

An email sent to theHinduja Group lateMonday evening did notget a response. An Etihad

spokesperson didn’t replyto a query sent by the newspaper on the proposed meeting.

While Etihad put in aconditional letter of inter-est earlier this month to bea minority investor in Jet,the lenders have beenhunting for a majority part-ner to stitch a deal. Even asseveral big businesses weretapped over the last fewmonths for investing in Jet,the talks didn’t progress.

As things stand now, theHinduja group has showninterest but it may like toinvest conservatively, anot-her source close to the busi-ness said. Turn to Page 13 >

THE CMIE TRACKERCONSUMER SENTIMENT INDEX (Base: October-December 2016=100)

UNEMPLOYMENT RATE (%)

PALLIATIVES ARE NO SOLUTIONS 8 >

Source: CMIE

39,352.6

Etihad and Hindujas set forAbu Dhabi meet on May 23

RIDE THEWAVENifty50

May 20

RATE-SENSITIVES SHINE INVESTORS HAVE BEEN STUMPED BEFORE WHO MOVED THE SENSEX WAIT BEFORE TAKING A CALL PAGE II, 1PAGE II, 2

INSIDE

Indices salute exitpoll projections, zoom to record highs

BACK IN THE GAMEBiggest gains in terms of points

Date S&P BSE %chg * Change*Sensex

Nov 14, ‘07 19,929.06 4.69 893.58Jan 25, ‘08 18,361.66 6.62 1,139.92Mar 25, ‘08 16,217.49 6.07 928.09May 18, ‘09 14,284.21 17.34 2,110.79May 20, ‘19 39,352.67 3.75 1,421.90*Change over previous close

GAINING GROUNDBiggestgains in S&P BSESectoral Index

Index May 20, ‘19 % change*Infra 206.3 5.8Capital Goods 18,735.4 5.6Industrials 3,139.1 5.6Realty 2,062.9 5.5Bankex 34,416.5 4.7Energy 4,848.5 4.5Power 1,944.8 4.4Oil & Gas 15,299.6 4.4Auto 18,982.0 4.1Metal 10,804.7 3.3

*Change over previous close

CAPITALGAINSM-cap addedon Monday

May 17, ‘19~146 trillionMay 20, ‘19~151 trillion

Change

~5.24 trillion

37,930.7

UPBEAT MOODGAINERS May 20, ‘19 % change*IndusInd Bank 1,492.6 8.6State Bank of India 344.6 8.0Tata Motors 190.0 7.5YES Bank 143.6 6.7Larsen & Toubro 1,451.1 6.5HDFC 2,117.4 6.2Maruti Suzuki 7,088.4 5.7ONGC 176.1 5.3M&M 654.3 5.3Reliance Industries 1,325.5 4.7* Change over previous closeCompiled by BS Research Bureau

BULLRUN

May 17

YIELDS SOFTEN10-year bond (yield in %)

RUPEE GAINS~ vs $ (inverted scale)

~ TAKES CUES FROM EQUITY, RISES SHARPLY P4

IF EXIT POLLSARE RIGHT, ABJP SINGLE-PARTY

MAJORITYMAYRESULT IN AN UPMOVE OF UPTO 10% FOR THE NIFTY. THEREALITYCHECKS OF FISCALSLIPPAGE OR ANEGATIVEGROWTH SURPRISE AWAITSAFTER THIS BINARYEVENTGAUTAM CHHAOCHHARIAMD & Head of India Research, UBS Securities

THE ECONOMYIS PRIMEDFOR RE-ACCELERATION

AFTER ASERIES OF SHOCKS, INCLUDING GSTAND DEMONETISATION.EARNINGS GROWTH WILLACCELERATE TO 20% ANDTHAT’S AKEYDRIVER OF OURSENSEXTARGET OF 42,000JONATHAN GARNER Chief strategist for Asia and EM, Morgan Stanley

APOSSIBLESTRONGMANDATE FORMODI MEANS

CONCERNS ONPOPULIST STEPS SUCH AS CASHTRANSFERS AND FARM LOANWAIVERS WILLPROBABLYDECLINE. AVICTORYCOULDALSO BRING BACKLOCALFUND FLOWS TO EQUITIES,WHICH IS GOOD NEWS FOR MID-CAP STOCKSMAHESH NANDURKAR India strategist, CLSA India

Best day in a decade for markets

YOUR MONEY

OpinionPAGE 9

EDIT: CHEERIN THEMARKETS

Corporate earnings may disappoint againKRISHNA KANTMumbai, 20 May

Corporate India looks set to disappoint investors for the secondquarter in a row, defying D-Streetprediction of strong earnings growthduring the fourth quarter (Q4) of2018-19 (FY19). The combined netprofit of 564 companies (excludingfinancials and energy), which havedeclared their results for theJanuary-March 2019 quarter, is down10.3 per cent year-on-year (YoY),their worst showing in at least 12 quarters.

The combined net sales of thisuniverse was up 9 per cent YoY inQ4FY19, growing at the slowest pacein six quarters, hinting at a demandslowdown in the economy.

The entire sample of 670 companies performed better, reporting a 26.4-per cent net profit

growth, thanks to an earnings recov-ery reported by public sector banksafter a bad Q4 in 2017-18. In theMarch 2018 quarter, net profit for theentire universe had declined 24.5 percent. However, despite this recovery,the net profit in absolute terms is 5 per cent lower than what

companies had reported in theJanuary-March 2017 quarter.

The banking sector, as a whole,remains under water, with combinedlosses of ~9,853 crore during the quarter, against a combined net lossof ~31,576 crore a year ago and a profit of ~6,600 crore during the

October-December 2018 quarter.On a positive note, banks

reported an uptick in their net interest income for the second consecutive quarter, taking advantage of the turmoil in the non-banking lending space.

The combined revenue of theentire sample was up 10.3 per centduring the quarter, growing at theslowest pace in the last six quarters.It includes fee income and investment income earned bylenders, besides their core net interest income. Turn to Page 13 >

GROWTH SLOWING DOWNTrend in net sales growth of companies (% YoY)

Total income for the entire sample to include lenders fee and investment incomeNet profit excludes exceptional gains and losses Source: Capitaline

MANUFACTURERS BACKIN PRESSURE Trend in net profit growth (% YoY)

TATA MOTORS NET PROFITSKIDS 49% ON JLR WOESHPCL HIGH ON INVENTORYGAINS, PROFIT JUMPS 70%

Page 3

Health ministry mayoffer dialysis at home In a first, the health ministry is planning tooffer peritoneal dialysis facility to kidneypatients at home under the PradhanMantri National Dialysis Programme. It waslaunched in 2016 to provide free dialysiscare to patients in district hospitals.

ECONOMY & PUBLIC AFFAIRS P4

Irdai proposes to hikethird-party insuranceThird-party insurance premium for cars,two-wheelers, and transport vehiclesmay go up, with Irdai proposing increasein premium rates for the current financialyear. Irdai has proposed to increase motorthird-party premium rates for cars below1,000cc to ~2,120, from the existing ~1,850.

BACK PAGE P14

‘Official end for Iran’ if ithurts our interests: USUS President Donald Trump has issued anominous warning to Iran, suggesting that ifthe Islamic republic attacks Americaninterests, it will be destroyed.“If Iran wantsto fight, that will be the official end of Iran.Never threaten the US again,” he tweeted.

THE MARKETS ON MONDAY CChhgg##

Sensex 39,352.6 1,421.9Nifty 11,828.3 421.1Nifty Futures* 11,859.5 31.2Dollar ~69.7 ~70.2**Euro ~77.8 ~78.4**Brent crude ($/bbl)## 72.9## 73.3**Gold (10 gm)### ~31,571.0 ~370.0

COMPANIES P2

ENFIELD SUED IN US OVER PATENT INFRINGEMENT

COMPANIES P12

www.business-standard.com

*(May) Premium on Nifty Spot; **Previous close; # Over previous close; ## At 9 pm IST; ### Market rate exclusive of VAT; Source: IBJA

TUESDAY, 21 MAY 201922 pages in 2 sectionsMUMBAI (CITY)~8.00VOLUME XXIII NUMBER 198

GENPACT’S INDIA WORKFORCEPOWERS E-CAR RACING EVENT

PUBLISHED S IMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL) , NEW DELHI AND PUNE

https://t.me/TheHindu_Zone_official

https://t.me/SSC4Exams https://t.me/Banking4Exams https://t.me/UPSC4Exams

2 COMPANIES MUMBAI | TUESDAY, 21 MAY 2019

> .

STOCKSIN THE NEWS

* OVER PREVIOUS CLOSE

> State Bank of IndiaMarket capitalisationcrosses ~3-trillion mark for the first time

348

333

318

303

318.95

344.60

306.75May13

May17

May20

2019

~344.60 CLOSE

8.04% UP*

> Adani EnterprisesTop gainer amongGautam Adani-led group companies

157

142

127

112

118.95

151.55

117.75

May13

May17

May20

2019~151.55 CLOSE

27.40% UP*

> Dr Reddy’s LaboratoriesQ4 Ebitda margin at 22% against 22.5% in Q3

2,850

2,750

2,650

2,550

2,748.10

2,588.05

2,804.95

May13

May20

May17

2019~2,588.05 CLOSE

5.82% UP*

> Tata MotorsQ4 consolidated netprofit better thanexpected at ~1,118 crore

192

184

176

168

176.70

190.00180.25

May13

May17

May20

2019~190.00 CLOSE

7.53% UP*

>HeidelbergCement IndiaLikely to report healthieroperational performanceon the back of strongrealisation

198

190

182

174

179.55

195.00

178.05

May13

May17

May20

2019~195.00 CLOSE

8.60% UP*

Adidas India namesNeelendra Singhgeneral managerSportswear major Adidas Indiaon Monday announcedappointment of NeelendraSingh as the general manager ofthe company. Singh will succeedDave Thomas, the company saidin a statement. "Neelendra willfill the position effective of May20, 2019, reporting to Thomas,managing director of emergingmarkets," Adidas said in astatement. Singh has been withAdidas for over 14 years, mostrecently as senior vice-presidentof Global DTC and Franchise.Thomas has moved to a newrole as Adidas' managingdirector of emerging marketseffective April 1, reporting toRoland Auschel board memberresponsible for global sales. PTI<

Mercedes-Benzdrivesin BS-VI compliantE-Class at~57.5 lakhGerman luxury carmakerMercedes-Benz on Mondaylaunched the BS-VI compliantLong Wheelbase E-Class sedanin India priced between ~57.5lakh and ~62.5 lakh. The NewLong Wheelbase E-Class featurestwo BS-VI compliant petrol anddiesel engines along with a hostof new interior features,Mercedes-Benz India said. Thepetrol version is powered by a1,991 cc engine delivering 197horse power (HP) and comes intwo variants priced at ~57.5 lakhand ~61.5 lakh, respectively. Onthe other hand, the dieselversion has a 1,950 cc enginedelivering 194HP and comes intwo options priced at ~58.5 lakhand ~62.5 lakh, respectively. PTI<

GSKPharma Q4 netprofit rises 16.5% to ~123 crore

Drug firm GlaxoSmithKlinePharmaceuticals on Mondayreported a 16.56 per cent rise inits standalone net profit to~123.03 crore for the quarterended March 31. The companyhad posted a net profit of~105.55 crore for the corresp-onding period of the previousfinancial year, GlaxoSmithKlinePharmaceuticals said in a filingto the BSE. Its standalonerevenue from operations stoodat ~751.22 crore for the quarterunder consideration. It was~748.62 crore for the corresp-onding quarter a year ago. PTI<

Eveready names 2finance officials,denies restructuring Eveready Industries India (EIIL)has appointed two joint chieffinancial officers, amid talks thatits parent, the Williamson MagorGroup, is scouting for a strategicpartner for the dry cell batterymajor. Eveready Industries hasdenied the appointments to beany indication of a possiblerestructuring in the company,maintaining that the move wasa part of the career successionplan of employees. EIIL hasnamed Indranil Roy Chow-dhury, senior vice-president(finance), and Bibhu RanjanSaha, senior VP (accounts &banking), as joint CFO withimmediate effect. PTI<

IN BRIEF

Ikea pumps money into interiordesign start-up Livspace

Swedish furniture retailer Ikea, whichopened its first local store in Hyderabadin 2018, has invested an undisclosedamount in Livspace, an interior designstart-up. The investment is from IngkaInvestments, the venture capital arm ofIkea's parent firm Ingka Group, which

operates 90 per cent of the 367 Ikea retail stories across the world.Avendus Capital was the advisor to the deal. While the deal size was notdisclosed, the investment translates into a minority stake in Livspace,the two companies said in a statement on Monday. According tosources, this is a strategic investment by Ikea, which is simultaneouslyplanning to open more stores in major Indian metro cities. “Thisminority investment aligns closely with the digital direction of IngkaGroup and our core business, IKEA Retail,” Krister Mattsson, head ofIngka Investments, said in a statement.“We are thrilled to welcomeonboard Ingka Group and a world-class brand like IKEA,” said AnujSrivastava, co-founder and CEO at Livspace. BS REPORTER<

SHALLYSETH MOHILE Mumbai, 20 May

Flash Electronics India, a lead-ing electronic and electric autocomponents maker, has filed alawsuit against Royal Enfield(RE), challenging patentinfringement in the US regard-ing production of a criticalcomponent for two-wheel-ers/motorcycle.

To be sure, while instancesof part suppliers in mature automarkets filing a lawsuit againstan automaker is not uncom-mon, it is perhaps the first timethat a homegrown auto ancil-lary firm has taken on an autocompany. It comes at a timewhen the two-wheeler makingarm of Eicher Motor is battlingslowing sales in the domesticmarket and looking to reapbenefits of the Interceptor andContinental GT 650.

Royal Enfield in a statementsaid, “No official communica-tion has been received, but wehave learnt of a lawsuit filed inthe US by Flash Electronics Pvtthat alleges that one of the com-ponents used in some of ourmotorcycle models sold thereinfringe on the plaintiff’s regis-tered patent. We would like toclarify that the said componentis supplied to us by an exter-nal, proprietary supplier, whichindependently develops andowns the IP rights. The suppli-er denies plaintiff’s claimsvehemently.”

The New Delhi-based com-pany has alleged that RoyalEnfield has infringed Flashelectronics’ patent on“Regulator Rectifier Device andMethod for Regulating anOutput Voltage of the Same”,duly issued by the UnitedStates Patent & TrademarkOffice to Flash Electronics onFebruary 20, 2018 after Flash’sR&D department made abreakthrough invention of thecomponent in 2014.

Since then, FlashElectronics has been the keymanufacturer and supplier of

this component to many lead-ing two-wheeler manufactur-ers in India and overseas, it said.

“They have taken some ofour regulators and it has beencopied blindly by another man-ufacturer (Varroc). So, I wouldsay, Royal Enfield has got intothis knowingly,” SanjeevVasdev, founder and managingdirector, Flash Electronics, toldBusiness Standard. Varroc hasfiled a caveat petition againstFlash. A spokesperson declinedto comment.

“The litigations have beeninitiated in the US and Europehence the way forward willdepend on the laws of thosecountries. Given the globalclientele Flash caters to, itseems like a strong technologycompany and its importantthat it enforces its stand. It isone of the rare cases of anIndian company taking onanother company in a foreigncourt,” said Gayatri Roy, partnerat Luthra & Luthra. Vasdev saidhis firm warned Enfield onOctober 12, 2018 and they hadassured they would stopinfringing but “they never livedup to their talks.”

Enfield sued inUS over patentinfringement Flash Electronics India claims thebike maker has infringed patent on ‘regulator rectifier device’

SURAJEET DAS GUPTANew Delhi, 20 May

Air Asia India is all set to launch inter-national flights from September end.The airline had sought permissionfrom the government this January.

The airline is a joint venturebetween the Tatas, who have a 51 percent stake, and Tony Fernandes-con-trolled Air Asia, which holds the rest ofthe stake. Sanjay Kumar, chief oper-ating officer of the airline, said: “Ourplan is to first fly to the SoutheastAsian market and start with flights toBangkok and Kuala Lumpur. Our tar-get is that we will fly about 7-8 per centof our total available seat kilometres tointernational locations in the first yearof operations.”

The airline, which received its 21stplane recently, is set to double its fleetby April next year, after which it willhave 40 Airbus A320 planes. Most ofthe additional planes will come in thelater part of this year and in the begin-ning of next year and Air Asia is alreadytalking to prospective companies totake aircraft on lease. However, it isexpected to add in two more aircraft tothe fleet in June and July.

Kumar said while the Indian loca-tions have not been decided, it wouldbe perhaps from Delhi, Bengaluru orKolkata. The eventual plan is to fly frommost of the 19 destinations that it cur-rently flies in and add in another twofor international destinations.

However, the plan for the secondyear is to go beyond Southeast Asia to

West Asia, China as well as CIS coun-tries in the next phase, which wouldrequire about four planes. The CIScountries are: Azerbaijan, Armenia,Belarus, Kazakhstan, Kyrgyzstan,Moldova, Russia, Tajikistan, Turkm-enistan, Uzbekistan, and Ukraine.

Kumar said slots were available forthe Thailand and Malaysia routes, how-

ever, the carrier hoped to apply forsome that have been vacated by JetAirways in the West Asia if it got per-mission by that time to fly abroad.“While we will compete with ourMalaysian partners Air Asia, we will tryand minimise the competition as muchas possible. Our main battle will be withIndiGo, SpiceJet and Air India, which is

putting in more flights in these routes.” In the domestic market, Air Asia

has substantially increased its opera-tions by expanding its capacity and itflies over 25,000 passengers every day.So, from Delhi, the number of depar-tures has increased from 14 to 31 per dayin the past three months. It has alsogot additional eight slots, which havebeen vacated by Jet in Mumbai tem-porarily, and have launched 10 flightsfrom Mumbai daily. As a result, Air Asiahas been able to push its operations byputting in 164 daily flights across thecountry from 19 destinations.

Kumar said with the firms’s focuson corporate flyers, flight timings havebeen rejigged in many key routes sothat travellers can fly out in the morn-ing and return by evening. This hasbeen done on routes such as Delhi-Mumbai, Delhi-Bengaluru.

Air Asia India to fly to Bangkok, KL from SeptThe airline to double its fleet by April next year

The carrier hopes to apply for some slots vacated by Jet Airways for West Asia if it gets permission to fly abroad

RAGHAVENDRAKAMATHMumbai, 20 May

After an over $1-billioninvestment in Indianmalls by US private

equity (PE) firm Blackstone,another global PE playerWarburg Pincus has chartedplans to pump in a similaramount in malls here with itsMumbai-based partner, theRunwal group.

Both partners – Warburgand Runwal – would inject $200million each in the form of equi-ty and hold 50 per cent stake each.

They plan to raise another$600 million in the form of debtto create a corpus of $1 billion todevelop malls across tier-I, IIand III cities in the country, theduo said on Monday. WarburgPincus has deals in mall space inChina, Vietnam and Indonesia,with entities such as Red StarMacalline, Vincom Retail, andNWP Retail. This is the first suchJV for the PE firm in India.

Banking on rising consump-tion and large middle class, thelikes of Blackstone have bet bigon malls here. Blackstone hasbought nine malls in cities suchas Mumbai, Pune, Chandigarh,Indore, Bhubaneswar, andAmritsar in the last three yearsand has a portfolio totalling 5.4million square feet.

Canada’s CPPIB has formeda partnership with PhoenixMills to invest and developmalls. It has put in about ~1,600crore into the venture. In 2016,

Dutch pension fund APGformed a $450 million joint ven-ture (JV) with the Xander group.

The Warburg-Runwal JVwould be seeded with severalpipeline projects which are cur-rently under development andwould also have the option ofacquiring some of the Runwalgroup’s operational retail malls.

“Going forward, the plat-form would look to acquireboth greenfield as well asbrownfield projects,” a releasefrom the JV said. The JV, float-ed by Runwal-Warburg Pincus,would look to build large desti-

nation malls as well as smallerhypermarket and cinemaanchored community malls.The JV would be led by SanjayDube, its chief executive officer(CEO). Dube was recently theCEO of Landmark Hospitality(a part of the Dubai-basedLandmark group).

Anish Saraf, managingdirector, Warburg Pincus India,said, “With a growing middleclass and expansion of brand-ed retail, shopping malls pres-ent a meaningful opportunityto participate in India’s evolv-ing consumption story.”

Sandeep Runwal, managingdirector of the Runwal group,said that the retail real estatesector is expected to see tremen-dous growth, driven by lack ofcommunity spaces in Indiancities and the growing dispos-able income. This is resulting ingreater spend on entertainmentand branded retail.

The Runwal group alreadyoperates four malls in Mumbaiwith a total leasable area ofapproximately 2 million squarefeet. This includes its flagshipR-City mall in Ghatkopar whichhas a total leasable area of 1.2million square feet.

Ashutosh Limaye, directorand head, Anarock ConsultingServices said that on a pan-Indian basis, India’s retail spaceis set to rise to 120 million squarefeet over the next three yearsfrom 100 million square feetnow in Grade A mall space.

According to Limaye, withinthree years, 20 million squarefeet of Grade A mall space willget built in India, even as over 50malls have either shut down ordowngraded into mix-use cen-tres in recent times. The growthis likely to come on the back oforganised retail which, is set todouble from nine per cent to 18per cent and online retail, whichmay grow from three per cent toseven per cent in the next fouryears. Limaye said about 50 percent malls where PE funds haveinvested in the last three yearsare in non-metro cities such asAhmedabad, Amritsar, Bhuba-neswar, Chandigarh and Indore.

Warburg Pincus, RunwalJV to invest $1 bn in malls

Warburg, Runwalput in $200 mneach; to raiseanother $600 mn in debt

Blackstone-ownedNexus Malls ownsnine malls and has a portfolio of 5.4 mnsquare feet

Canada’s CPPIB hasformed partnershipwith Phoenix Millsto invest in anddevelop malls

In 2016, Dutch pension fundAPG formed a $450 mn JV with the Xander group

Singapore's GIC owns stakes in RCity of Runwal and Viviana Mallin Thane

BETTING BIG

The Open Acreage Licensing Policy(OALP) rounds are considered to be thenext big thing. What is your take on it andwhat are your investment plans for theareas held by Oil India?OALP will allow us to go for moreexploration. The last round of NELP (NewExploration Licensing Policy) was almosta decade back. After that we didn’t haveany chances for new mining leases forexploration.

We have won nine blocks in OALP-1.Most are in close proximity to producingareas. So, there are two advantages. One isfrom a geological point of view, as it maybe extension of the existing structure, sothe potential is high. Second is evacuationof oil and gas will not be a problem, as allour infrastructure are nearby. We shouldbe able to monetise them within 2-3 years.

OALP investment will be phase-wise.

We will have survey period, thenexploration drilling, appraisal drilling,field development. Some of explorationdrilling will be part of our normalexploration budget and spread over 2-3years. Our capex has been of the order of~3,500-4,500 crore over the years,including overseas acquisitions.

What are the further policy changes thatOil India is looking from the nextgovernment?Main advantage of OALP over NELP isthat of having no cess, reduced royaltyrates, marketing freedom for gas and it is arevenue-sharing model. We can alsochoose our own areas. We are happy withthe incentives that the government hasprovided. It is a big boost for Oil India andONGC. However, enhanced oil recovery(EOR) policy needs further review.

What is your take on the rising crudeprices globally?Our cost of production including levieswas around $33 a barrel in 2018-19. We aredefinitely comfortable with the currentoil price, but it is a big concern for thecountry. We are importing around 82 percent of our requirement, so lower oilprices are more beneficial to the country.

Over the years, oil and gas production in

India has seen a declining trend. Whatare the reasons?You must appreciate the fact that ourfields are very old. Oil India fields are 45years old on an average. The naturalreservoir decline is inevitable. Theaccepted rate is 8-10 per cent across theworld. If you look at giant fields across theworld, including Vankorneft in Russia,the decline is very high. I would say thatOil India is at least successful in

maintaining the production. Any company can increase

production only through newdiscoveries. If you see the history ofONGC and Oil India, at times when theproduction was declining, new fieldswere discovered. But in the past 10-15years, no major discoveries were made byOil India or ONGC. With OALP, we hopethis problem will be solved. We go for EORwhen oil fields decline. Through this wecan recover 8-15 per cent additional oil.EOR from lab study to commercial rollingout takes minimum 5-6 years. We havedone some lab studies and launching onepilot this year and one next year.

In terms of gas, we are seeing hugepotential. Production is around 2.9 bcm(billion cubic metres) at present. By 2021,it may go up to 3.5 bcm. There are manypotential areas where the gas is stranded.

What is the status of the country’s plans to reduce oil imports by 10 per cent by 2022?To achieve the Prime Minister’s vision of

10 per cent energy import reductiontarget, Oil India has committed toincrease crude oil production to 3.46million tonnes and natural gas to 3.70bcm, respectively, by 2021-22. Theprojected increase is 7.25 per cent in oilproduction and 30.4 per cent in gasproduction by the end of 2021-22 from2015-16 levels.

Oil India is emphasising on increasedexploration and development drillingactivities, reducing decline rate inalready-producing, matured anddeveloped fields (redevelopmentactivities). We have engaged withrenowned institutions from the country and abroad. Proventechnologies like hydro-fracking, gravelpack, etc. shall also be implemented on a larger scale.

A number of infrastructure projectsfor oil and gas handling, more particularlyfor enhanced gas production andtransportation, are in different stages ofimplementation, which will enable us toachieve the targets.

State-run Oil India is expected to see a huge increase in oil and gas production by 2022.Chairman and Managing Director UTPALBORA speaks about the company's planned role inbringing down the country's crude oil imports and the future of India's exploration sector in an interview with Shine Jacob. Edited excerpts:

‘To cut imports, Oil India aims to raise output by over 7% in 2 years’“We areimportingaround 82 per cent of ourrequirement,so lower oilprices are morebeneficial tothe country”

Will pay ~42K cr upfront for Essar Steel: ArcelorAASHISH ARYANNew Delhi, 20 May

Global steel giant ArcelorMittalon Monday assured theNational Company LawAppellate Tribunal (NCLAT)that it would pay upfront thetotal amount of ~42,000 crore ithad placed as bid for debt-ladenEssar Steel India. This amountwould also include a payment of~2,500 crore as guaranteedworking capital adjustment,

senior advocate Harish Salveappearing for ArcelorMittalsaid.

Since Essar Steel had gener-ated a profit of ~3,495 crore sinceAugust 2017, when it was admit-

ted into corporate insolvencyprocess, the extra amount of~1,000 over and above the work-ing capital would also be givento the financial creditors, Salvetold NCLAT.

Apart from these payments,a sum of ~196 crore has beenkept aside for operational cred-itors with claim of less than ~1crore and ~17.4 crore has beenkept aside for unsecured finan-cial creditors who have a claimof ~10 lakh or more.

The statement made byArcelorMittal is similar to theone made by Essar Steel India’sCommittee of Creditors (CoC)last week.

The lenders to the companyhad told the NCLAT last weekthat of the total amount ~42,000crore, only nearly ~39,500 crorewas meant for distribution. Therest ~2,500 crore had been keptaside as a minimum guaranteeof profit for financial creditors,the CoC had then said.

Uber bets big on ICC Men’sCricket World Cup 2019

San Francisco-based ride-hailing giantUber has formed a key partnership withThe International Cricket Council (ICC), asthe official sponsor of the ICC Men's WorldCup 2019. The deal will make Uber the firstmobility and food delivery app to strike asponsorship deal with the ICC for theMen's Cricket World Cup, one of the mostwatched sporting events. The gamewould be played in England and Wales

from 30 May to 14 July with an estimated global viewing audienceof 1.5 billion. "We're excited to further our commitment to cricketas a global sport and bring our community of riders, eaters,drivers and delivery partners closer to each other and a game theylove so much," said Uber's Chief International Business OfficerBrooks Entwistle. "Cricket is passionately followed in eightparticipating countries, where Uber and Uber Eats are an integralpart of people's day-to-day life." PEERZADAABRAR

Royal Enfield clarifiedthat “the saidcomponent is supplied to us by an external,proprietary supplier,which independentlydevelops and owns the IP rights. The supplierdenies plaintiff's claimsvehemently”.

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MUMBAI | TUESDAY, 21 MAY 2019 COMPANIES 3. <

TaMo Q4 net profitskids 49% on JLR woes

SHALLY SETH MOHILEMumbai, 20 May

Tata Motors on Mondayreported a 49 per centdecline in net profit for

the March quarter ended March31. But the earnings beat esti-mates as the cost-control meas-ures initiated a few months agoto turn around operations ofJaguar Land Rover (JLR)Automotive started showingresults.

In the three months toMarch, net profit of the compa-ny fell to ~1,108.66 crore against~2,125.24 crore in the same quar-ter last year. Revenue for thequarter fell to ~85,676.33 crorefrom ~88,966.34 crore in thesame quarter last year.

Revenue from whollyowned subsidiary JLR fell 5 percent to ~65,146 crore. The unitbrings in most of Tata’s revenue.

Three months ago, under“Project Charge”, Tata promised“decisive action” to cut costs atJLR and improve cash flow afterweak sales at the British luxurycar brand led Tata to post thebiggest-ever quarterly loss inIndian corporate history.

P B Balaji, chief financialofficer at Tata Motors, guided

for challenging quarters aheadfor the JLR as well as the Indiabusiness as weak sentimentsweigh on truck and passengervehicles sales and disruptionsahead of BSVI emission normstake effect.

“The Q1FY20 for JLR willreflect the seasonality and willbe a weak quarter,” he said. Ashutdown taken by the compa-ny in anticipation of the Brexitwill also have an impact. Butnotwithstanding the challengesin China which is one of itsmost-profitable markets andother headwinds, he said TataMotors is confident of acceler-ating its cash flow delivery andimprove its profit before tax inthe 2019-20 financial year andreturn a margin of 3-4 per centand achieve the cost savings of£2.5 billion by the turn of thefinancial year. During the quar-ter, it had a saving of £1.3 billion.

Meanwhile, Balaji said thecorrective actions taken inChina should help in revivingsales by the next quarter. “Whilethere is sequential improve-ment in JLR, domestic opera-tions got impacted because ofthe slowdown. Therefore, therewould not be any majorchanges in our estimates interms of overall performance,”said Mitul Shah, vice president,research a Reliance Securities.

JLR’s retail sales in Chinadeclined by more than 50 percent during the quarter, muchsteeper than the broader luxurycar market in the region.

“Had it only been for whole-sales, one would have attributedit to an inventory correction,but drop in retail indicates thatthe end user demand is poor forJLR products. Therefore, Chinacontinues to be a big worry,”said Shah.

CFO says correctiveactions taken inChina will help inreviving sales bynext quarter

PRESS TRUST OF INDIANew Delhi, 20 May

Hindustan Petroleum Corp(HPCL) on Monday reported a70 per cent jump in its fourth quarter net profit asinventory gains and rupeeappreciation negated a dip inrefinery margins.

Net profit in January-March came at ~2,970 croreagainst ~1,748 crore in thesame period a year back,HPCL Chairman andManaging Director M KSurana said.

“Increase in profits ismainly attributable toincreased sales, improvedlogistics, efficiency, inventory

gains and rupee appreciationduring Q4 of financial yearending March 31,” he said.HPCL had an inventory gainof ~916 crore as the value ofstock it held rose due to inter-national price movement.The firm had an inventorygain in the fourth quarter ofprevious year, he said.

Besides the company had acurrency exchange gain of ~248crore as opposed to a forex lossof ~84 crore a year ago, he said.The company earned $45.1 mil-lion on turning every barrel ofcrude oil into fuel as comparedto gross refinery margin of $7.07 per barrel. Surana said HPCL sales rose 6.5 percent to 10.03 million tonnes.

HPCL high on inventorygains, profit jumps 70%

The company earned $45.1 million on turning every barrel ofcrude oil into fuel as compared to gross refinery margin of $7.07 per barrel PHOTO: REUTERS

PRESS TRUST OF INDIANew Delhi, 20 May

After a botched attempt forsale of Pawan Hans, the gov-ernment is likely to issue afresh bid document by theend of this month and pro-vide indemnity to the poten-tial buyers against contin-gent liability of about ~500 crore in the helicopterservice company.

The government hasdecided to make the biddocument more attractiveafter discussions withinvestors on their concernsas the sale process of PawanHans failed to attract anysuitor when bidding endedon March 6.

“The fresh preliminaryinformation memorandum(PIM) would be issued byend of May. It has beendecided to indemnify theinvestors of the contingentliability of ~500 crore whichrelates to disputed taxdemand,” an official said.

The government holds 51 per cent stake in helicopterservice provider Pawan Hans,and the remaining 49 percent is with Oil and NaturalGas Corporation (ONGC). Atotal of 100 per cent stake inPawan Hans, which has afleet of 46 choppers, havebeen put on the block.

Pawan Hanssale: Centre to issue fresh bid document

Drug firm Torrent Pharm-aceuticals on Monday reporteda consolidated net loss of ~152crore for the quarter endedMarch 31, 2019, mainly onaccount of exceptional items.

The company had posted a netprofit of ~228 crore for the corre-sponding period of the previousfiscal, Torrent Pharmaceuticalssaid in a filing to the BSE.

The company's consolidated

revenue from operations stoodat ~1,856 crore for the quarterunder consideration. It was~1,708 crore for the same periodyear ago. Net loss of ~152 crore forthe fourth quarter is on account

of exceptional items of ~357 croreand lower hedging gains, thecompany said. Out of ~357 croreexceptional items, ~217 crore per-tains to impairment provision ofcertain intangible assets under

development and goodwillrecognised with respect to theacquisition of Bio-Pharm Incand ~140 crore is in relation toproduct recalls made during thecurrent year, it added. PTI

Drug firm Torrent Pharma posts Q4 net loss of ~152 crore

JLR’s retail sales in China declined by more than 50 per centduring the quarter, much steeper than the broader luxury carmarket in the region

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IN BRIEF

CERC tariff relief forIPPs positive forpower gencos: ICRA

Power regulator CERC allowing atariff relief to independentpower projects (IPP) affected bydomestic coal shortfall ispositive for the powergeneration segment, ratingagency Icra said Monday. TheCentral Electricity RegulatoryCommission (CERC) in its orderon May 16, 2019, approved atariff relief for coal-basedpower project of GMR WaroraEnergy arising from the use ofimported / e-auction coal inlieu of shortfall in supply ofdomestic linkage coal underthe fuel supply agreement (FSA)signed with Coal India. PTI

Telcos rue lack ofchecks on variousOTT services

Telecom players on Mondaymounted a blistering attack onOver the Top (OTT) serviceproviders such as WhatsAppand Facebook, arguing thatcompeting OTTs should besubject to same stringentsafeguards as telcos, especiallyon lawful interception anddata localisation aspects. OTTservices refer to applicationsand services that are accessibleover the Internet and ride onan operator's network. Skype,Viber, WhatsApp, Facebook and Hike are some of thepopular and widely-used OTT services. PTI

~ logs biggest gain in2 months on exit pollsANUP ROYMumbai, 20 May

The rupee rose 0.69 per centfrom its previous close on exitpolls indicating strong perfor-

mance for the incumbent NationalDemocratic Alliance (NDA) govern-ment in the Lok Sabha elections.

The possibility of NDA continu-ing in the government, and offeringpolitical stability, would be a strongpull for foreign investors to puttheir money in Indian assets, andthe swing in equity indices reflect-ed that.

Sensex rose 1421.9 points, andNifty 50 rose 421.1 points, both up3.7 per cent from the previous close.The rupee reflected that sentiment,strengthening to close at 69.74 a dol-lar, from its previous close of 70.23a dollar. In the morning trade, therupee had strengthened to 69.45 adollar, but weakened subsequentlyas importers, including oil market-ing companies rushed in to buycheaper dollars for their future com-mitments. Exporters were also seenselling their dollars fearing therupee to become stronger in thecoming days.

Rupee had last seen a similarjump on March 18.

The strength in the rupee hap-pened despite oil prices remainingfirm on middle-east tensions. Thedollar index, which measures thegreenback’s strength against majorglobal currencies, fell 0.07 per centto 97.92. Other Asian currencies in

the region also strengthenedmarginally, but not as close as therupee. There is still some room forthe rupee to improve, say experts.

Year-to-date, rupee hasstrengthened .038 per cent, aidedby Monday’s performance. Most ofthe other currencies in Asia haveremained weaker than their year-ago level against the dollar.

The 10-year bond yields also fellto close at 7.29 per cent, from itsprevious close of 7.36 per cent.Bond prices rise as yields fall.

“The markets reacted to the exitpolls. If the final results are broadlyin-line with the polls, the momen-tum of the rupee will continue inthe short run,” said A Prasanna,chief economist of ICICI Securities

Primary Dealership.According to currency dealers,

the Reserve Bank of India (RBI) waslargely absent from the market, andlet importers to hedge.

“Monday’s rupee movement haslargely captured the actual event ofthe government getting formed.But the bias will continue towardsa stronger rupee. However, if theactual number comes around 260-270 for the NDA, the markets mayreact negatively,” said RiteshBhansali, vice-president, MecklaiFinancial.

“We saw lots of smart moneymoving in on Monday. If the NDAcomes with a great majority, thenforeign inflows will be strong andthat may push rupee to 68-68.5 adollar level,” he said.

The markets will start followingpolicies and soundbites once thegovernment is formed but till thattime rupee is placed favourably,Prasanna said. If the NDA returns topower with a clear majority in linewith exit polls, markets wouldrejoice the policy continuity, saidMadhavi Arora, Economist, FX &Rates- Edelweiss Securities.

For the bond market, the near-term implications would be posi-tive, backed by the predictable fiscal guidance, near-term inflationcertainty, positive Gsec supplydynamics, strengthening furtherrate cuts expectations, and globally dovish monetary stanceamid growth concerns, accordingto Edelweiss.

HC nod to input tax credit for malls

The Prime Minister Narendra Modi-ledgovernment has taken a number of reformsbut more needs to be done by the nextgovernment on the implementation front toensure job creation, said former Reseve Bankof India Governor Bimal Jalan (pictured). Thegovernment, Jalan said, should also take upadministrative reforms that are complicated

but essential for the implementation of government policies.“By and large, in terms of economic reforms, number of stepshave been taken (by the Modi government)… everybody agreesthat job creation is relatively low. The question is why, it could bepartly because of slow implementation of economic reforms,”he said. PTI

‘Under GST norms,refunds for export of goods not linked topayment realisation’

We have exported goods onpayment of IGST and got refundof the same also under Rule 96 ofthe CGST Rules, 2017. We alsohave some cases where weexported goods under LUTwithout IGST payment andclaimed refund of unutilisedinput tax credit under Rule 89 ofthe CGST Rules, 2017. Now, insome cases, we agreed to shortpayment from buyer due toquality claims. We sought write-off from our bankers forthe shortfall. They have asked usto surrender proportionateexport incentives. We havesurrendered the proportionatedrawback and MEIS benefits. Arewe required to surrenderproportionate refunds obtainedunder GST laws also?No. Under the goods and servicestax (GST) laws, exports of goodsare zero-rated and refunds underthe said Rule 96 of 89 of the CGSTRules, 2017 for export of goods arenot linked to realisation of pay-ments.

We refer to DGFT Public NoticeNo. 84/2015-2020 dated April 3,2019, and Trade Notice No.03/2015-2020 dated April 3, 2019,phasing out physical copies ofMEIS and SEIS Duty Credit Scripsissued with EDI port as port ofregistration from April 10, 2019onwards. Does it mean we neednot go through the process ofregistration of such scrips?No. The CBIC has issued a circularno. 11/2009-Customs dated April9, 2019, referring to the same mat-

ter. It says that MEIS/SEIS dutycredit scrips shall continue to betransmitted electronically byDGFT to the Customs system andfor registration, assessment anddebiting of scrips, the current pro-cedure as per the extant CircularNo. 12/2016-Customs dated March28, 2016, shall continue to be fol-lowed, except that instead of pre-senting physical copies of theMEIS/SEIS scrips printed on secu-rity paper, the current owner orhis authorised representativeshall approach the proper officerof Customs with details of theMEIS/SEIS scrip such as IEC num-ber, scrip number, etc. As regardsverification of ownership of scrip,the same will be checked from theDGFT website.

We refer to DGFT Public NoticeNo. 62/2015-20 dated February 16,2018, regarding processing ofMEIS applications on the basis ofHS Code as mentioned in theshipping bill. Para 3 of the PublicNotice says that "past caseswhich have been decided, willnot be re-assessed based on thedirectives in this public notice".We are not clear which past casesit refers to. Can you help usunderstand it?It refers to all cases or applicationswhere the claims for duty creditscrips have already been grantedor rejected before the date of thePublic Notice by the RegionalAuthorities or by the DGFTHeadquarters.

We have fulfilled exportobligation against advanceauthorisation but have notutilised the authorisation forimports even after gettingrevalidations due to somefinancial difficulties. Can we getfurther revalidation if weapproach the Policy RelaxationCommittee (PRC)?Normally, the PRC considers suchrequests sympathetically, as theexport obligation is fulfilled, pro-vided it is convinced about thegenuineness of the reasons for therequest.

Business Standard invites readers’ SME queries related to excise, VAT and exim policy.

You can write to us at smechat@bsmail.in

CHATROOMT N C RAJAGOPALAN

Revamp of labour conference may givemuch-needed boost to reforms in key laws SOMESH JHANew Delhi, 20 May

The revival of the Indian LabourConference (ILC) by the nextgovernment may act as a key catalystto push through the agenda of labourlaw reforms in the country.

After assuming power in 2014, theNational Democratic Alliance (NDA)government had planned majorreforms in the labour laws in form ofcodes. It had planned four codes eachfor industrial relations, wages, socialsecurity and welfare, andoccupational safety, health andworking conditions.

However, none of the proposedcode Bills could be converted into alaw, as the government struggled tobring trade unions and industryrepresentatives on board in the fiveyears of its tenure.

The plan was to amalgamate over40 central labour laws into thesecodes. Of these, only one code onwages was tabled in Lok Sabha but itwas referred to the standingcommittee and the bill lapsed afterthe dissolution of the 16th Lok Sabha.

The code on industrial relationssaw multiple rounds of consultationsbetween industry, trade unions andthe government but it could not reachthe stage of the Union Cabinetapproval. The code on social securityand welfare was re-drafted multipletimes since it was first put up forpublic consultation in early 2017 and amajority of trade unions boycottedthe consultation meeting on the codeof occupational safety health andworking conditions.

The NDA government’s five-yeartenure was first such instance in thecountry’s recent history when oneonly session of the ILC, also referred toas the Labour Parliament of thecountry, took place in 2015. Thesession was inaugurated by Prime

Minister Narendra Modi, who gave aspeech addressing the labour unionsand industry bodies.

The concept of ILC as a tripartitebody was envisaged by B R Ambedkar,the architect of Indian constitution.He had thought of it as a forum wherediscussions on labour legislation andwelfare would take place betweenstate governments, the Centre, tradeunions and industry representatives.

Ambedkar had chaired fourannual sessions of the ILC, which wasthen known as the Plenary LabourConference, between 1942 and 1945.During the first session of the ILC in1942, Ambedkar said the industrialproblems and problems of labourwelfare could not be solved “unless

the three parties — government,employers and employees —developed a sense of responsibilitytowards one another, showed morerespect for the views of one anotherand agreed to work in a spirit of giveand take and that there was not muchchance of such a sense of mutualrespect and responsibility growing upso long as one was engaged in talkingat the other.”

During the UPA’s five-year tenure,which started in 2004, three ILCsessions took place — twiceinaugurated by then PM ManmohanSingh and once by then FM PranabMukherjee. Three sessions took placeduring the second tenure of the UPAbeginning 2009 and were

inaugurated by Singh.Modi had planned to inaugurate

the ILC in February 2018 after a gap ofthree years but the governmentcancelled it to avoid anembarrassment, as central tradeunions had threatened a boycott ofthe event.

“The five years (of the NDAgovernment) saw a decay of all thetripartite bodies and system,including the ILC. We have struggledduring the regime of previousgovernments too but during the NDAgovernment’s tenure, we felt workerswere not considered as a stakeholder,”Left-affiliated Centre of Indian TradeUnions Vice-President AKPadmanabhan said. He, however, saidthat many recommendations of theILC sessions were not implementedby any of the governments in the pastmany years.

The longest period when no ILCsessions were held was between 1972and 1981 during which the firstcountrywide strike of railway workerstook place in 1974 which was followedby a nationwide Emergency declaredby the then Prime Minister IndiraGandhi in 1975.

INDIAN LABOUR CONFERENCE’S JOURNEYnIt started as a conference of labourministers from 1940-42

nBR Ambedkar gave it the shape ofthe highest tripartite body todiscuss labour-related issues in 1942

n46 sessions of the ILC have taken

place till 2015

nOnly one session of the ILC took place during the NDAgovernment’s tenure

nThe longest period when no ILCsession was held was between 1972and 1981

NEXT GOVT’S AGENDA FOR POWER & TELECOM Power and telecommunication sectors have seen excess capacity and squeezing margins afteraggressive bidding, both for electricity tariffs and spectrum, over the years. Regulatorychallenges and setting templates for realistic bids could be the way forward.

COMPILED BY SHREYA JAI & MEGHA MANCHANDA

RENEWABLE STATUSIndia is targeting to add 1 lakhMw of solar and 60,000 Mwof wind power by 2020 tomeet its climate changecommitment of 40% powergeneration from renewablesources. While solar powerhas seen an unprecedentedrise, wind has slowed downdue to change in biddingterms. Solar is also facing lowtariff pressure and lack offinancing. Low cost domestic financing, regular tenders in wind sector, and promotingdomestic manufacturing could improve investment scenario.

UDAY STATUS According to a CRISILreport, aggregateexternal debt of state-owned electricitydistribution companies(discoms) is set toincrease to pre-UDAYlevels of ~2.6 trillion byMarch 2020. With moststates having limitedfiscal headroom,continuous financialsupport to their discomsmay be difficult. Sodiscoms have to becomecommercially viablethrough prudent tariffhikes and reduction inAT&C losses.

Bonds issued ~26,213 crBonds to be ~2,69,056 crissuedAT&C loss level 19.08%ACS-ARR Gap ~0.25/unitFeeder metering 100%Smart metering 4%Feeder segregation 72%

POWER DEMAND Power demand touched a new high in the past two years,crossing more than 1.5 lakh Mw. But thermal plants are runningat lower capacity, driven by rising share of renewable energyand stressed thermal units shutting down. Growth of hydrounits has been stagnant for a decade. The new governmentwould have to look at reviving hydropower to balanceincreasing share of renewable energy. Coal supply scenario alsoneeds to be boosted to address stress in the sector.

5G spectrum auctions would be top-most agenda of the newgovernment. The auctions, expected by 2019-end, will becrucial for bringing next generation technology to India

2014-15 2015-16 2016-17 2017-18 2018-19

l Power demand (Mw) (% Avg PLF in March in bracket)

Figures as on May 17, 2019

140,296(65.59)

148,463(66.81)

156,934(64.90)

170,765(64.52)

175,528(63.40)

2014-15 2015-16 2016-17 2017-18 2018-19

(89.

20)

Installed capacity (Mw) n Wind power n Solar power (% growth in bracket)

22,6

45.0

(NA)

3,07

7.60

(NA)

25,0

88.0

(10.

79)

4,87

8.80

(58

.53)

28,7

00.4

4 (14

.40)

9,01

2.69

(84

.73)

32,7

48.4

6(14

.10)

17,0

52.3

7

35,6

25.9

7 (8

.79)

26,3

84.3

0 (5

4.73

)

PLF: Plant load factor, which shows capacity utilisation; SOURCE: MNRE. UDAY Portal,CEA

Total subscriber Q4 net Net profit Net debtbase FY’19 profit/loss FY’19 (in ~cr) (~trillion)

(in million) (in ~cr)

Vodafone-Idea 334 -4,881.9 Merger in 1.8Aug 2018

Reliance Jio 306.7 840.0 2,964 2.16

Bharti Airtel 284* 107.2 409.5 1.00*(as on Dec 2018); Source: Annual reportsSource for Reliance Jio net debt: Kotak Securities report

Irdai proposes to hikethird-party insurance

Better reforms implementationneeded for job creation: Jalan

Third-party insurance pre-mium for cars, two-wheelersand transport vehicles maygo up with the regulator Irdaiproposing substantialincrease in premium rates forthe current financial year.

The Insurance Regulatoryand Development Authorityof India (Irdai) has proposedto increase the Motor ThirdParty (TP) premium rates forcars below 1000 cc to ~2,120from the existing ~1,850 forthe 2019-20 fiscal year.Similarly, for cars fallingbetween 1,000 cc and 1,500cc also, premium is beingproposed to be increased to~3,300 from the existing~2,863. However, for luxury

cars (with engine capacity ofover 1,500 cc) no change inTP premium has been pro-posed from the existing~7,890. Normally, the TP ratesare revised from April 1.However, this time, the Irdaihad decided to continue withthe old rates until furtherorder. Now, the regulator hascome out with a draft of newrates for TP premium for thecurrent financial year.

According to the draft, TPfor two-wheelers below 75 ccis proposed at ~482, up from~427. A hike has also been pro-posed for those between 75 ccand 350 cc, while no rate hikehas been proposed for super-bikes (exceeding 350 cc). PTI

INDIVJAL DHASMANA New Delhi, 20 May

The Orissa High Court has resolvedan important issue of blocked creditunder the goods and services tax(GST) regime for real estate compa-nies constructing commercial spacesfor the purpose of letting it on rentor lease.

The court has allowed input taxcredit to a shopping mall construc-tion company.

Meanwhile, real estate compa-nies moved Delhi High Court over asimilar issue.

The issue revolves aroundSection 17 (5) (c) and (d) of the CGSTAct and similar sections under the

respective state GST laws. The sec-tions disallow input tax credit forgoods and services used to buildimmovable property on ownaccount.

One of the interpretations wasthat since property given on rent orlease is owned by owners and not bya tenant or lessee, input tax creditshould not be given.

This interpretation was theredespite the fact that GST is imposedon rent and lease.

A petitioner, Safari Retreats Ltd,which is in the business of construct-ing shopping malls, has movedOrissa High Court challenging thetax authorities to deny it the inputtax credit on construction of an

immovable property which would begiven on rent.

Meanwhile, real estate compa-nies have petitioned the Delhi HighCourt to strike down the provisionsof Section 17 (5) (c) and (d) of theCGST Act and similar provisions inthe Delhi GST Act. The high courton Monday issued notices to theUnion government, the GST Counciland the Delhi government.

Abhishek Rastogi, counsel forpetitioners in Delhi High Court andpartner at Khaitan & Co, said whilethe objective of the GST is seamlessflow of credits, the section is againstthe very spirit of the GST and hasaccordingly been challenged. More on business-standard.com

4 ECONOMY & PUBLIC AFFAIRS

>

MUMBAI | TUESDAY, 21 MAY 2019

“Many of us may continue to squabble overcorrectness and accuracy of the exit polls...when multiple exit polls convey the samemessage, the direction of the result broadlywould be in consonance with the message”ARUN JAITLEY, finance minister

“Even developed countries haveopted for traditional polls throughpaper ballets. The exit poll surveysreiterated the concern of misuse ofvulnerable EVMs by the ruling party”HD KUMARASWAMY, Karnataka CM

“Exit polls are not the finaldecision, but are indications. But, by and large, what comesout in the exit polls also reflects inthe results”NITIN GADKARI, Union minister

TELECOM SECTOR

.038%Rupee’s gain year to date, aided byMonday’s performance

69.45 the day’s high for rupee

18th March The last timerupee saw a similar jump

TRACKINGMOVES

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SURAJEET DAS GUPTA

In 2011, just after getting anotherfive-year term as chairman of ITC,Yogesh Chandra Deveshwar

(excluding cigarettes) elaborated hisbroad vision for the tobacco-to-FastMoving Consumer Goods (FMCG)company in a free-wheeling interviewwith Business Standard. One, he want-ed ITC to become the country’s largestFMCG company (excluding cigarettes)overtaking its key rivals likeHindustan Unilever and Nestle in thenext 10 to 15 years. Two, heenvisioned that half of thegroup’s profits would comefrom non-tobacco businesswithin the same time peri-od. Three, he was open tospinning off the FMCGbusiness into a separatecompany maybe when ithas revenues over ~15,000crore. A few years later, headded a fourth target:Revenues of ~1 trillion for the FMCGbusiness by 2030.

These ambitious plans will now bethe responsibility of Sanjiv Puri wholast week was appointed chairman, aman whom Deveshwar, who died ear-lier this month, had handpicked forthe job. To say that achieving the tar-gets his mentor set will be challengingwould be an understatement.

To take the ~49,000 crore ITC to thetop slot in the highly competitiveFMCG business will require someaggression. Hindustan Lever’s rev-enues continues to be over three timesthose of ITC’s FMCG (non-cigarette)revenues, and the gap is not really get-ting smaller. In FY2019, the gap

between ITC’s non-cigarette FMCGrevenues and Hindustan Lever’s saleswas over ~25,000 crore, comparedwith ~21,000 crore in FY2015.

Indeed, Deveshwar’s ambition togarner a larger share of profit fromITC’s non-tobacco business still looksa tall ask. In FY19. tobacco accountedfor around 80 per cent of ITC’s profitbefore tax (PBT), even though the bulkof the capital outlay was invested inthe non-tobacco businesses. FMCG’scontribution is a mere 1.7 per cent toPBT. To be fair, Deveshwar had suc-ceeded in garnering sufficient vol-

umes from the FMCG busi-ness; it accounts for 25 percent of company’s grossrevenues from sales. It alsohas been in the black forthe past six years.

But Deveshwar’s rev-enue target for 2030 forFMCG simply means thatthis business has to growover eightfold in the next11 years to reach that magic

number. To offer an idea of the chal-lenge: in FY2019, Deveshwar’s last fullyear as chairman, ITC’s non-cigaretteFMCG revenues grew only 10 per cent.

Puri is well placed to understandthe multiple challenges involved inITC’s transformation, having workedthrough various divisions from tobac-co to consumer goods. Old ITC handsalso say he’ll likely have an easier timeorganisationally. Thanks to the man-agement changes, which saw manysenior and older executives leave orretire, Deveshwar has ensured thatPuri has a free hand in running theshow. “That is very different fromwhen Deveshwar was appointed aschairman, which saw the old guard

and contenders challenge him andsplit the board. He has ensured thathis successor does not have to face thesame challenge,” says a former topexecutive of ITC who worked closelywith Deveshwar.

But Puri’s challenge is no longerjust to ensure that the share of non-tobacco revenues grows year on year.He has to go to the next stage to ensurethat the share of ITC’s profits from thenon-tobacco business grows exponen-tially to meet Deveshwar’s target —from FMCG, hotels, paper boards, agribusiness amongst others.

The cornerstone of that strategyhas to be the FMCG business wherethere is huge potential for volumeexpansion in new categories, deepen-ing of distribution, as well as increas-ing the brand portfolio. That is whyPuri is pushing the FMCG businessinto dairy, coffee, frozen and fresh veg-etables as well as chocolates. Butcrowding the shop shelves is onething; catching the consumer’s atten-tion is another. As an analyst pointedout, “In tobacco, ITC dominated themarket and there was hardly any cred-ible challenger. Those who came either

failed to enter or closed operations(Japan Tobacco, Rothmans and so on)or made no dent due to regulatory andforeign direct investment restrictionsand the ban on manufacturing.”

FMCG, however, is another ball-game. ITC does not enjoy protectionfrom competition here, and faces notjust global giants but even domesticbiggies like Patanjali and Dabur.“Each segment of the FMCG markethas entrenched players where ITC isjust a new challenger — for instance,in juices it faces PepsiCo as well asDabur,” an analyst who has trackedthe FMCG space points out.

Still, concentrating on the non-tobacco business is imperative forITC’s long-term survival: Cigarettesales are slowing, margins are beingsqueezed with the governmentincreasing duties by over 200 per centand the anti-tobacco lobby is pushingin for more restrictions.

That is yet another area that Purihas to handle: Managing the environ-ment, whether it is with the govern-ment, which has relentlesslyincreased duties or when it periodi-cally reviews FDI policy in tobacco.

He also has to engage with tobaccofarmers in Andhra and Karnatakaalways looking for better price or takea stand against anti-tobacco lobbies,such as those that recently went tocourt challenging Life InsuranceCorporation’s equity in tobacco com-panies. It’s an area that Deveshwarand his small team handled effective-ly, with his frequent and long visits inDelhi and continuous engagementwith key stakeholders as well as polit-ical networking.

Puri also has to manage a some-what contentious relationship that thetop management has historically hadwith its largest single shareholder,BAT, with 29.5 per cent equity. InDeveshwar’s time, the UK tobaccogiant had clashed with the Indianmanagement over its plans to up itsstake in the company.

This time round, BAT has endorsedPuri’s elevation and said it does notwant to increase its shareholding. Butonly last year it defeated a special res-olution for the issuance of stockoptions to ITC employees saying itwould dilute their shareholding. Andwith on-again, off-again news thatSUUTI (Specified Undertaking Of TheUnit Trust Of India, an administratorfor a rump government-owned mutu-al fund), which holds 7.96 stake in ITCwanting to sell it off, Puri has to keepa close watch on how existing share-holders respond to such a sale. “Purihas to keep BAT at bay even whileengaging with them and getting theirsupport for entering non-tobaccoareas,” an old ITC hand said.

In other words, he’ll have to walkthe tightrope even as he focuses onturning Deveshwar’s grand plan intoa reality.

8 ISSUES AND INSIGHTS>

MUMBAI | TUESDAY, 21 MAY 2019

> CHINESE WHISPERS

> LETTERS

When we were growing up inthe late 70s and early 80s, itwas common for many girls

to study in what we then called con-vents. The Convent of Jesus and Mary(CJM), Loreto Convent (LC) and CarmelConvent were three well-known andrespected institutions in Delhi. Boyswere often sent to St. Columba’s, St.Xavier’s and Mount St Mary’s. Mumbai

too had its own counterparts —Cathedral & John Connon, QueenMary, Campion, branches of CJM andLoreto and Don Bosco to name a few.

But no matter which school youattended, St Stephen’s College in Delhiand Xavier’s College in Mumbai werequite the place to be. By and large, bothinstitutions were the first choice for anystudent who finished their board exam-inations and were headed to college.

But close to 30 years later, I findthings have changed rather dramati-cally. Hardly anyone I know aspires tosend their children to any of theschools I mention above. How manyof you know children currently study-ing in St. Columba’s or Loreto Conventin Delhi? CJM? Be it Delhi or Mumbai,the old names have been relegated tothe backbenches.

In a certain set, the only names onehears of today are Sanskriti, VasantValley, The Shri Ram School, TheBritish School and even The AmericanEmbassy School. These are considered

“the” places to be. Those who fail tomake it to what is considered the A listgo to Modern School (slipped downfrom being in the A list back then), DPSand Step by Step, to name a few.

In Mumbai, where fewer newschools have been added, BombayScottish, Bombay International andCathedral still figure quite high in thelist. A new aspirational addition hasbeen Dhirubhai Ambani InternationalSchool but many more wealthy Indianparents send their wards to theAmerican, German and French schoolsin the city and even overseas to UnitedWorld College, Singapore.

The college scenario too haschanged drastically. Almost anyonewho can comfortably afford it headsout of the country after school, mainlyto the US to pursue an undergraduateusually funded by parents. This holdstrue for both science and engineeringfields and for the humanities.

But even those who stay back seemless and less enamoured with St

Stephen’s and St Xavier’s. Why has thishappened? What has led to the declineof these Christian institutions — be itat the school or college level — that wereonce considered absolutely the best. Iasked a few alumni and some academi-cians and here’s what they had to say.

One, they all argue that these insti-tutions have simply refused to changewith the times. For instance, I was hor-rified to learn that St Stephen’s hasfailed to add any kind of liberal arts pro-gramme to its offerings. This at a timewhen several new private options likeSymbiosis and Flame in Pune andAshoka in Sonepat, offering a credibleliberal arts degree, have sprung up.Why wouldn’t a St. Stephen’s manageto introduce a similar course and do abetter job of it than the newbies?

In times as politically charged astoday, I learnt to my surprise that StStephen’s doesn’t even offer a degree inpolitical science. In fact, the courses onoffer were pretty much what they were30 years ago when we went to college.

A former Xavier’s student told methat he recently visited the college tospeak at a function and was amazed tofind how little had changed. To repeathis words: “Everything seemed at astand-still and set in stone”. Whilethere’s something to be said for consis-tency, it’s alarming if an educational

institution appears to be unchanged forthree decades. Almost all the alumniwere of the view that these institutionshave failed to invest in their faculty.

The same holds for the schools. Thephilosophy, content, delivery and ethosin these convent schools has remainedstubbornly unchanged. Coupled withthis is the fact that many parents nolonger see any advantages in keepingthe two sexes apart: When the worldcomprises both men and women,learning to deal with them from theword go makes more sense than thembeing suddenly thrust in your face.

A more worrying factor has been thedecline of these Christian institutionsthat has set in primarily after theyreserved a large percentage of theirseats for their own community. Thishas ensured that many students whofail to make it on merit get admission,resulting in both a drop in the qualityof minds that are entering and subse-quently leaving the institution and areduction in diversity.

None of these moves bode well forthe institutions. Reserving seats,refusal to let go of traditions and teach-ing styles that have long outlived theirutility and a failure to change with thetimes are ensuring that these institu-tions lose their edge. It’s a heavy priceto pay.

Don’t be a dinosaur!Failure to change with the times is making some of the besteducational institutions of yesteryear lose their sheen

Too much confusionThe announcement of the exit poll resultshas landed the regional satraps — at leastin the south — in a state of disarray. Withhardly two days to go before the results ofthe Lok Sabha election are announced,there is much confusion about a possiblemeeting of the Congress-allied regionalparties with the party high command inDelhi on May 23. While Tamil Nadu Congresschief K S Alagiri said leaders of the regionalmajor Dravida Munnetra Kazhagam (DMK)would participate in the meeting on May23, DMK President M K Stalin told partycolleagues there was no such meeting onthe cards that day. Later, Alagiri toldjournalists since he wasn't participating inthe proposed meeting he wouldn't knowwhen it had been scheduled.

Enough clarification

A day after nearly all exit pollspredicted a comfortable majority forthe Bharatiya Janata Party-led (BJP-led) National Democratic Alliance in theLok Sabha polls, Union minister andsenior BJP leader Nitin Gadkari(pictured) launched the poster of PMNarendra Modi, a biopic on PrimeMinister Narendra Modi, in Nagpur.Gadkari, who contested from theNagpur Lok Sabha seat, said the exitpolls were not the "final decision" butindicated that the BJP would onceagain come to power. Asked if hisname was also being considered forthe PM's post, Gadkari said, "I haveclarified this around 50 times. Wefought the elections under theleadership of Modiji and he willcertainly become the prime ministeragain. The people of the country areonce again supporting the BJP, PrimeMinister Narendra Modi and the workdone by us in the last five years. Andthe exit polls are an indication," hesaid. The makers of the biopic,announced earlier this month, said thefilm would be released countrywide onMay 24, a day after the results of thegeneral elections polls are declared.

The most aware stateMadhya Pradesh has emerged as the"most aware state" with the largestincrease in the proportion of votes polledin the just concluded Lok Sabha election.The state recorded a 10 percentage pointincrease in the votes polled compared tothe 2014 election. According to the ChiefElectoral Officer of the state, V L Kantarao,in 2014, Madhya Pradesh recorded 61 percent voting but in 2019, it crossed 71 percent. Andhra Pradesh recorded an 8.78percentage point increase in voting andis in second position. Polling for thegeneral elections concluded on Sunday.In the last phase Madhya Pradeshrecorded more than 75 per cent voting.

Introspect, don’t accuse

The much-coveted exit polls predict thereturn of the National DemocraticAlliance (NDA). It is understandablethat the parties which find the predic-tions disappointing remain scepticalabout the exit poll predictions. Suchparties dismiss the predictions andterm the predictions as somethingwhich “isn’t exact poll”. They wouldlike to be optimistic till the officialannouncement of results. Most of thetime exit polls have predicted accurate-ly which way the wind was blowingeven if it hasn’t been on point when itcame to predicting the exact numberof seats won by the parties. There are afew isolated cases where exit polls havegone wrong. If these predictions cometrue, Narendra Modi will be the primeminister for a second term and all theparties that lose the electoral battle willindulge in a drama where they grudg-ingly concede the defeat first and thenpretend to introspect about the resultsof the defeat. After doing all this, theywill start accusing the victorious partyof hacking the EVMs and of indulgingin electoral malpractices with moneyand muscle power.

According to exit poll trends, NChandrababu Naidu is on his way out,losing ground to Y S Jagan MohanReddy of the Yuvajana ShramikaRaithu Congress (YSRC). Naidu

deserves defeat. Naidu joined NDA andleft it in 2018 when Modi did not con-sider his plea for special status to hisstate. Now the Andhra Pradesh chiefminister has warmed up with the par-ties which he had opposed during hisstay in NDA. This only makes him anopportunistic politician who is ideolog-ically bankrupt and people alone canteach a lesson to such politicians.

K V Seetharamaihah Hassan

Proceed with cautionWhether it’s about television ratingpoints (TRP) or the love for PMNarendra Modi is the matter of debatebut the news channels started declaringthe exit poll results within seconds ofthe last votes polled (6.30pm). The sixmain pollsters showed that for the sec-ond time, Modi’s National DemocraticAlliance (NDA) will rule, winning any-where between 287 and 336 seats.What’s funny is that the final tally eachsurvey predicted was varied but wereuniformly well above the 272 seatsneeded to form a government. As if toprovide some relief to the Opposition,two surveys showed the NDA fallingshort — by between five and 30 seats.Surprisingly, Vice-President M.Venkaiah Naidu has mocked the exitpolls, saying “exit polls do not meanexact polls. We have to understand that.Since 1999, most of the exit polls havegone wrong”.

I agree with Naidu and want to men-

tion here that exit polls after the 2004Lok Sabha polls had given 68 more seatsto the NDA than it got. But after theresults, we had the Congress-led UnitedProgressive Alliance (UPA) ruling Indiafor the next 10 years. It has also beenobserved that when forecasters mademistakes in a few states but got the big-ger picture right, the error in one statewas cancelled out by the error in anoth-er; if the NDA or the UPA did not rise tothe expectations in one state, it excelledin another. Hence there is nothingwrong with Naidu devaluing exit polls.

Bidyut Kumar ChatterjeeFaridabad

Checks and balancesIt’s good that this impatient nation getsa few days to ponder over the ethos,evolution and the economy of the peri-od that we are passing through now.Nationalism cannot be reduced to grossmajoritarianism. Likewise, politics doeshave its genesis in confrontation butthe reverse would be the very antithesisof socio-political evolution .The “us ver-sus them” needs to yield to the notionof “we and the problem”.

R Narayanan Navi Mumbai

Letters can be mailed, faxed or e-mailed to: The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar Marg New Delhi 110 002 Fax: (011) 23720201 · E-mail: letters@bsmail.inAll letters must have a postal address and telephonenumber

> HAMBONE

Early in his tenure as PrimeMinister, Narendra Modi hadcalled the Mahatma Gandhi

National Rural Employment Guaranteescheme as a living monument of the fail-ure of the country’s effort to tacklepoverty. The heavy sarcasm was, ofcourse, directed at the Congress. By theend of his tenure, the Modi governmenthad progressively increased the alloca-tions for MGNREGA and to top it, alsoannounced the Pradhan Mantri KisanSamman Nidhi Yojana (PM-KSNY) totransfer ~6,000 per year unilaterally intothe accounts of farmers.

This is perhaps, the most eloquentevidence of an admittance of the failureof the Modi government to raise the well-being of rural folk. If MGNREGA was amonument of failure, what is the PM-KSNY on top of a bloated MGNREGA ifnot band-aid over a festering wound?

NYAY by the Congress raises the barof support to ~6,000 per month. Andthere is a growing argument that theMGNREGA should be extended tourban regions.

One suggestion is that employmentmay be guaranteed and that it may beguaranteed at living wages, not just min-imum wages. This is possibly a bettermeans of achieving the minimum

income guarantee that what NYAYseems to suggest.

A mere transfer, that NYAY seems tosuggest, would be a bad idea. If thesource of household incomes is largelybenevolent transfers from government,who will be willing to work? Wouldn’t itget a lot more difficult to raise the labourforce participation rate if householdshave fewer reasons to look for jobs?India’s labour force participation rate isamong the lowest in the world.

Political parties are competing to pro-vide direct transfers to householdsbecause they have failed to address theproblem of lack of quality jobs. But, com-petitive unilateral transfers to house-holds is a race to the bottom.

A far more promising and sustain-able way of providing quality jobs thatmay be expected to pay living wages isto spur investments by the private cor-porate sector.

The Indian private corporate sectorhas stopped, for all practical purposes,creating new fixed assets. Growth in netfixed assets was at its lowest in 2017-18and there is no reason to believe that thesituation could have improved during2018-19.

Net fixed assets of the private corpo-rate sector grew by 6.5 per cent in 2017-18 and before that, at 7.2 per cent in 2016-17. These are the two lowest annualgrowth rates of net fixed assets in the pri-vate sector in the past 14 years. Growthin plant and machinery assets was evenlower at 7.1 per cent and 5.7 per cent in2016-17 and 2017-18, respectively.

Let’s place these statistics in someperspective. During the first four yearsof the Modi government, the averageannual growth of plant and machineryof the private sector was 9.2 per cent.In UPA II, it was 13 per cent and in UPAI, it was 19.5 per cent.

The impact of the sharp fall in invest-ments on employment by the privatecorporate sector is direct. The growth incompensation to employees fell from 23per cent per annum during UPA I to 18.8per cent per annum in UPA II to 11.4 percent per annum during the Modi gov-ernment. The growth in employment inthe private corporate sector was worse.This grew at 10.5 per cent per annumduring UPA I. It then dropped to 6.5 percent per annum during UPA II and fur-ther to a mere 1.3 per cent per annumduring the Modi regime.

The Indian private sector is the bestprovider of quality jobs. And to ensurethat the private sector does continue toprovide quality jobs, it may be a goodidea to review the impact of increasedcontractualisation on quality jobs by thecorporate sector.

It is likely that contractualisation hasnot helped much in growing employ-ment in the private corporate sector. But,even if it has helped a little or substan-tially, it may not be a good idea.Contractual jobs are not good qualityjobs like regular corporate jobs. If the pri-vate corporate sector does not providequality jobs then there would be no qual-ity jobs in India. The government is out-sourcing jobs and the private sector iscontracting out jobs. If this continues,India may be turned into the sweat shopof the world. This is not the future thatwe may aspire to.

If labour has to be motivated to gaineducation and skills, then it needs assur-ance that the end outcome would bequality jobs.

Employment guarantee and incometransfer schemes could be a short-termpalliative to extreme distress but these arenot a solution to the need for quality jobs.

The author is the MD & CEO of CMIE

Palliatives are no solutions

MAHESH VYAS

ON THE JOB

ITC’s post-Deveshwar challengesWhy Sanjiv Puri will have his work cut out achieving his late mentor’s long-term goals

OUT OF THE BLUEANJULI BHARGAVA

CRUISING ALONG Gross revenue from sale

Cigarettes Other-FMCG Hotels Agri business Paperboards,paper & packaging

The key segmental revenues, does not include some others. Other FMCG include packaged foods, dairy and beverages,apparel, education and stationery products, personal care, safety matches and agarbattis. Source: Company

nFY 18 nFY 19 (figures in ~ cr)

24,8

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13

11,3

57

12,5

35

1,4

94

1,7

46

8,1

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9,5

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47,362 49,348

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OPINION 9> STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

The stock markets responded positively to predictions in the exit pollsthat the incumbent National Democratic Alliance government wouldeasily win re-election. Over the course of trading on Monday, marketindices hit new all-time highs and posted their biggest one-day gains

in 10 years. The rupee appreciated by 49 paise, the biggest single-day gain intwo months, to close at 69.74 against the US dollar. Some exuberance at theprospect of a stable government is understandable. However, it is relevant toask whether an over-reaction to opinion polls — or even to the final results onMay 23 — is a product purely of sentiment or a rational response to the under-lying fundamentals. Naturally, markets will react to any new information, suchas was delivered by the exit polls. But the possibility of some volatility followingthe actual results should not be discounted. The markets have already ralliedconsiderably, so investors will know there is scope for a correction.

The fundamentals deserve some attention. Emerging market shareshave suffered as a result of renewed trade tension between the United Statesand China. Corporate India is still in the midst of its quarterly results seasonfor the March quarter, but in spite of mixed results, analysts have pointedtowards a trend of constrained demand. Analysts have reported a major shiftin tone for the worse on the short-term demand narrative of companiesreporting. Emerging from this situation will not be easy. Another brokeragefirm reported that 60 per cent of the firms that it covered had reported low-er-than-expected earnings. A demand slowdown in the automobile sectorhas received particular attention; and IT companies continue to strugglewith their margins. It is not easy to identify the next big sources of earningsgrowth. Given that, and given also that the indices are already close to recordlevels, a certain degree of caution till the political and policy environmentstabilises after the election seems warranted.

The question that will be asked on May 23 and after is: What the next gov-ernment can and will do to support growth and earnings? If the markets arerising on hope, the new government has to deliver to keep that hope going.Once the noise around election results die down, the new government’s policyand reform agenda to stimulate demand, boost consumption, revive capex andrevive economic growth will thus be closely watched. The experience after theNDA government’s assumption of power in 2014 was that there were no imme-diate big-bang reforms implemented. It is not likely that the first weeks andmonths would be any different this time even if the government were re-electedas the exit polls suggest. It will take some time to identify the policy prioritiesof the government, and even longer for those priorities to translate into actionon the ground. Thus, any positive policy shock will take time to show up in thefundamentals. Till then, regardless of political volatility, the underlying trendsof the market may well continue to be determined by broader, and global,factors. The trade and tariff war between the US and China, the developmentsin the Gulf and the prospects of a slowdown in the global economy are really aspositive for the markets as the news from the exit polls.

Whatever the final results for the 2019 Lok Sabha elections, it is fairto say that the Election Commission (EC) has emerged from the36-day exercise with a marked diminution of its prestige. Havingbeen prodded to consider complaints against gross transgressions

by both ruling party and Opposition candidates in one of the least edifying cam-paigns on record, it now presents the spectacle of internal discord. One of theelection commissioners, Ashok Lavasa, has recused himself from attending theEC meetings to discuss violations of the Model Code of Conduct, saying hisminority dissenting view had gone unrecorded. Mr Lavasa has been at the centreof a controversy, having opposed five clearances that the EC gave to PrimeMinister Narendra Modi and party president Amit Shah for making obvious ref-erences to religion in the course of their campaigns and invoking the Balakotstrikes. Under EC rules, majority decisions prevail and the Chief ElectionCommissioner (CEC) has argued that minority decisions do not get recordedbecause code violations are not quasi-judicial decisions.

This view may hew to the letter of the EC’s mandate but not to its spirit. It isan open question, for instance, whether it should have approved the use of gov-ernment resources to televise the prime minister’s visit to Kedarnath at a timewhen all campaigning had mandatorily ended; this would not have been anissue had the visit occurred during campaigning. It is also worth wonderingwhy it allowed both Mr Modi and Mamata Banerjee a whole day to campaign inBengal before it shortened the campaigning period over some reprehensiblepoll violence the day before.

Given the fierce whataboutery that dominates the public debate in recentyears, it is fair to say that previous ECs have not exactly covered themselvesin glory either, nor have political establishments in dealing with them. Thereis the 2009 example of CEC N Gopalaswami recommending the removal ofhis colleague Navin Chawla for political partisanship (Mr Chawla was con-sidered close to the Congress party). In 2002, Mr Modi, then chief minister ofGujarat, had suggested that then CEC J M Lyngdoh had turned down hisrequest to call early Assembly elections after communal riots in the statebecause he was Christian. The introduction of the three-member committeein 1989 was the result of the display of some unwarranted independence bythen EC R V S Peri Sastri, who is credited with introducing some wide-rangingelectoral reforms in his time. This was struck down by the Supreme Courtonly to be revived in 1993 to rein in T N Seshan, who displayed an inconvenientpredilection for independent action that discomfited politicians of all hues.Both Peri Sastri and Mr Seshan set new standards of objectivity for the EC —till then a somewhat pliant institution — that earned it considerable publicrespect for institutional impartiality. This hard-won reputation has beenwhittled away since the 2000s. At least part of the weakness lies in the factthat EC appointments are in the hands of the executive that the EC has togovern. In that sense, Mr Lavasa has shown courage in speaking truth topower. It’s a pity the EC has chosen to ignore his well-considered view.

Volume XXIII Number 198

MUMBAI | TUESDAY, 21 MAY 2019

In India, over the past few years, we have seen anintense balance sheet deleveraging among largecorporate houses. The infamous Credit Suisse

“House of Debt” reports had chronicled how severallarge Indian companies had unsustainable capitalstructures, with no free cash flow, and a desperateneed to deleverage. Their debt burden had to comedown. This deleveraging has taken place over the pastsix to seven years, through assetsales, bank write-offs and in certaincases change in control. Both thebanking system (with the non-per-forming assets peaking at near 15 percent) and the economy have bornethe pain of this debt workout. Justwhen we thought we were comingnear the end of this deleveragingcycle, and could look forward to apickup in private sector investment,we are now faced once again withexcess leverage.

This excess leverage and balancesheet deleveraging will now be at thepromoter level, at their personal balance sheet. Thisis where there is intense stress today, stress whichcan damage the credit markets and once again shortcircuit any potential recovery in private sector invest-ments. All balance sheet deleveraging cycles involvedebt pay-downs, which reduce investments andinevitably slow down the economy. If you are scram-bling to deliver free cash flow, you will cut investmentsto the bone.

Post the IL&FS default in September, we have seenintense pressure on all except a handful of Non-bank-

ing Financial Companies (NBFCs). They have hadtheir access to long-term funds constrained and costsof funding have risen 100-200 basis points. ManyNBFCs have had simply no choice but to sell downassets to meet debt maturities. Most have limited abil-ity to lend as they are unable to raise fresh funding.These same NBFCs were major players in promoterfunding and structured credit. With their inability to

lend, they are no longer willing torole over maturing promoter fundingstructures, forcing promoters toscramble to raise the cash needed topay off their liabilities. This has comeas a shock to promoters used torolling over their liabilities.

A second source of promoterfunding has been the debt mutualfunds. Through various structures,we have seen funds subscribe to thedebt of many promoter holding com-pany entities, collaterised againstlisted company shares of the pro-moter. Market scuttlebutt has it that

such funding is more ~1 trillion. This is spooking themarkets, as we do not know exactly where this pro-moter funding is sitting. We also do not know whetherit is being marked-to-market accurately. Debt fundshave had to take a markdown for their exposure toIL&FS paper, and it seems possible that more suchmarkdowns may happen as more promoter fundingstructures come to light.

Most investors did not seem to realise the risksbeing taken by some funds on their behalf.Consequent to this realisation many debt funds are

now facing redemption pressures. The regulator alsoseems to be taking a dim view of this type of lending.It is fair to say that going forward, debt funds will pullback their exposure to such promoter funding struc-tures. There is no question of these structures beingrolled over. Once again the promoters are being askedto repay maturing structures, there is no rollover.

The third source of funding for promoters was thestructured credit book of private corporate banks.These banks are under intense pressure from investorsto curtail such types of risk exposures. It is unlikelythat this source of funding will continue to be extend-ed. The biggest player in this space has serious capitaland management challenges. It also seems deter-mined to undergo a business model change, and de-risk its lending book.

There is therefore a severe liquidity shock for pro-moter balance sheets. Most business families arescrambling to cut their promoter funding exposuresgiven the lack of alternative funding sources.

This promoter balance sheet deleveraging hasmany unintended consequences.

First of all, in certain cases, markets have ham-mered the stocks of the companies whose shares havebeen pledged. In many cases, wherever we see largepledged share exposures, the stocks have been ham-mered so as to trigger a default event, and createforced selling of the shares pledged as security forthe loan. Companies which have no underlying oper-ating issues, have seen their shares fall by 50-60 percent because of these pledges.

Secondly, we have seen attempts by promoter fam-ilies to sell large blocks of stocks to raise the cash toreduce their personal debt. These block sales will bemuch more common and may put pressure on stocks.

Thirdly, this scramble to reduce personal leveragehas also driven most promoters to attempt to sellassets. In most cases all this leverage was taken tobuild infrastructure businesses or assets in their per-sonal capacity. Once again, we have a buyer’s marketfor assets, as numerous infrastructure and real estateassets are put up for sale by various promoter families.Given the amount of wealth destruction seen in infras-tructure, it is amazing to me that anyone actuallyexpects the private sector to invest again in greenfieldassets in this space.

With this new balance sheet deleveraging cycle,just like the one we have just gone through, it will taketime to repair balance sheets, and rebuild risk appetite.It will take time for the financial intermediaries to getcomfortable. For the majority of Indian promoters,there is no chance they will invest in a hurry.

We are unfortunately back to where we were sevenyears ago. The government will have to drive andfront-load investments in the economy, and the finan-cial intermediaries in the system will take time toregain confidence. One can only hope that this work-out gets completed faster. We cannot afford anotherseven years of single digit earnings growth. The pri-vate sector has to rebound faster than the first bal-ance sheet deleveraging cycle.

The writer is with Amansa Capital

A second balancesheet deleveragingThis time round, it is the promoters who are grappling withintense liquidity shock

Public interest in renewable energy in India haspicked up only in recent years. But the silhou-ettes of windmills on the horizon are no novelty

to the country, having been around for more than twodecades. With an installed capacity of 35.6 gigawatts(GW) and a total potential for over 300 GW at conser-vative estimates, onshore wind in India can acceleratethe country’s clean energy ambitions.

However, wind speeds have been slowing in thesector, causing much angst for developers and man-ufacturers. New capacity addition was less than 2 GWfor the last two years. Despite a pro-ject pipeline of over 10 GW, the trendin low annual capacity addition isexpected to continue this year. Windturbine manufactures are operatingat unsustainable capacity utilisationrates of less than 20 per cent.According to the Council on Energy,Environment and Water (CEEW),workforce needs in wind projectimplementation dropped to 1,140 in2018, 73 per cent lower than in 2016.How can we save our homegrownwind industry before it is too late?

The first signs of troubleappeared soon after the sector shiftedto reverse auctions, from the 15-year-old feed-in-tariff(FiT) regime. With an aggressive bid within the firstyear, the sector achieved the lowest tariff discoveredfor renewable power in the country, ~2.43/kWh (inDecember 2017). After the auction, developers startedscrambling to procure land and secure connectivityto evacuation infrastructure. Wind power relies ongeographically concentrated resources where gettingcontiguous land can be arduous. More than 60 percent of the capacity auctioned in 2017 has not yet beencommissioned and is behind schedule owing to landand connectivity issues.

While these challenges seem common to bothwind and solar photovoltaic, there are two reasonswhy the wind sector needs some urgent attention.One, even though there are seven wind-rich states,only two of them have sites with mean wind speedshigh enough to provide the expected low tariffs

(<~2.85/kWh), causing stress on existing land andevacuation facilities. Two, unlike solar PV, the windsector has a globally competitive domestic supplychain in India. Low annual capacity additions aregravely impacting small domestic turbine and partsmanufacturers, while bigger (mostly international)players can survive the turbulence.

How do we solve these issues? Policymakers mustchoose between two approaches: To distribute thecapacity or distribute the energy generated.

Distributing capacity means tapping into windresources available in medium-to-low wind power density (WPD)regions. While Tamil Nadu andGujarat have the highest windspeeds and account for 39 per centof the total wind potential in India,(according to the National Instituteof Wind Energy), there is an aggre-gate potential of 184 GW in othermedium-to-low WPD regions.Commissioning wind farms in thesestates could reduce stress on landand evacuation facilities, potentiallyreduce the investment required forinter-state transmission infrastruc-

ture, and reduce the overall cost ofintegrating wind power into the grid.

However, lower wind speeds would mean higherlevelised cost of electricity. CEEW analysis indicatesa 6 to 36 per cent increase from current ceiling tariffsbut comparable with the national average power pur-chase cost for conventional generation. In order tooptimise energy production from low-WPD sites,there is need for policy support to give incentives todevelop advanced turbine technologies, which couldtap low wind speeds.

For the second approach — distributing the energygenerated — to work, effective mechanisms are nec-essary to transfer power from point of generation tothe nearest transmission network and to the peripheryof offtakers’ networks. The Renewable PurchaseObligation (RPO) mechanism is meant to facilitatethe inter-state transfer of power. But compliance ofdistribution companies with RPOs is staggeringly low.

Stricter compliance would go a long way to facilitateinter-state power exchange. Strengthening existingmarket mechanisms, such as power trading and openaccess, with regulatory and technological meanswould be another option. Agile power procurementplanning by distribution companies, effective openaccess regulation across states, and developingadvanced electricity market are among the measuresthat could move the needle.

Additionally, inter-state and intra-state transmis-sion networks need rapid expansion to keep pacewith renewable energy deployment to pre-empt areal technical constraint in power transmission acrossthe country. Large injections of variable renewableenergy within a regional network would also needadditional investments in grid balancing technologies.

Regardless of the approach chosen, India has torethink the way reverse auctions are conducted. Intheir current form, reverse auctions will not encourageexploration of low-WPD sites. Nor would they ensuresmooth commissioning of plants in high-WPD areas.Site-specific auctions with a ceiling tariff estimatedfor the chosen geography could support optimumwind farm designs — and more realistic tariffs. Theprocedure for Long-Term Open Access of the trans-mission network and substation connectivity alsoneeds to be streamlined with the auction process.This would ensure that the timelines for plant com-missioning and network expansion are in sync. Thisreformed approach would facilitate more capacitybeing commissioned annually, giving the industry amore stable growth path.

India may or may not meet the wind energy targetof 60 GW by 2022. But obsession with targets andlowest tariffs, alone, is a bit like tilting at the windmills.Saving wind energy from the doldrums would needaccurate assessment of the costs (of generation andtransmission), streamlining the auction process (togive incentives for innovation), and far better enforce-ment of regulations.

Ghosh is CEO and Saji is Research Analyst, Council on Energy,Environment and Water (http://ceew.in). Follow@GhoshArunabha @CEEWIndia

Anti-business feelings in Americanow run so strong that even someleading bankers and hedge-fund

bosses want capitalism reformed.Socialism (of some kind) is espoused by agrowing number of Democratic politi-cians. A Harvard University study found51 per cent of 18- to 29-year-old Americansdo not support capitalism. The businessbashing is not solely from the political left;Donald Trump has tweet-attacked plentyof companies for offending his populistinstincts. Voices demanding higher taxesand tougher regulations grow louder.Echoing the vigorous trust busting of the

Progressive era, there are calls to break upFacebook and Google, the increasingly dom-inant tech platforms, while the titans ofSilicon Valley are rebranded as 21st-centuryrobber barons.

Amid so much criticism, who woulddare dispute that there is something rottenabout the state of corporate America today?Enter Tyler Cowen, an economics professorwho has written a determinedly positivebook about business. Mr Cowen did notbecome one of the world’s most-read blog-gers on economics without understandingthe value of a well-timed contrarian blast.He showed this to great effect in 2011 in abest-selling e-book, The Great Stagnation,arguing that the rate of increase in medianincome had slowed since the early 1970sas a direct consequence of a falling rate ofinnovation in the American economy,which was thus likely to continue to strug-gle to grow for the foreseeable future. Nowhe is back “to speak up for business, to per-suade you that it deserves more of yourlove and less hate.”

If you are hoping for a billet-doux to setyour heart aflutter, remember that theauthor is a practitioner of the dismal science;the romance in his love letter is less HarryMet Sally than Demand Meets Supply. Still,there is no shortage of passion from MrCowen. His beloved is the source of “mostof the stuff we enjoy and consume” andgives “most of us jobs.” Mr Cowen alsoargues, persuasively, that America tops theworld in the quality of its corporate man-agement — if Chinese firms were managedequally well, they would be up to 50 percent more productive. American businessis also the leading innovator globally inmany areas.

Some of his defence of business is lesscertain than his positive headline messagesuggests. He devotes a chapter to refutingaccusations that Big Tech companies areevil, only to confess to worrying about thethreat they pose to personal privacy, whichhe fears will get dramatically worse as facialrecognition and voice-recording technolo-gies become ever more ubiquitous. He

argues that business should be trusted more,despite so many high-profile scandals,because it is less prone to lying and cheatingthan governments or nonprofits. This couldbe read not as a ringing endorsement butas damning with faint praise.

For Mr Cowen, the real reason businessis so unpopular is that we humans tend toanthropomorphise companies, turning cor-porations “into people in our minds, andalso in our hearts” (and even writing loveletters to them). Companies play along inthis charade, because it pays them to do so,branding themselves with human char-acteristics like being friendly and listeningto our concerns. Inevitably, we feel letdown when they turn out instead to be“abstract, sharklike legal entities devotedto commercial profit.”

Mr Cowen’s explanation is not partic-ularly convincing. Nor is his two-partadvice for clearing the current atmosphereof distrust. First, the public should acceptthat business will always fall short of ourunreasonably high expectations, and getover it. Second, rather unexpectedly froma member of the famously libertarian eco-nomics faculty at George MasonUniversity, he wants business to try harder

at being socially responsible.In 1970, The New York Times Magazine

published an extraordinarily controversialarticle by Milton Friedman, titled “TheSocial Responsibility of Business Is toIncrease Its Profits.” At the time, thisshocked even much of corporate America,never mind the regular New York Timesreader. The article was intended to defendbusiness against heavy-handed governmentregulation, including of prices and wages,that threatened to squeeze dynamism andinnovation out of corporate America. Yetover the years, as deregulation spread acrossAmerica and then the world, Friedman’swords were, I believe, twisted into a sim-plistic justification for doing anything thatincreased profits regardless of the conse-quences for society and the planet.

Mr Cowen rejects Friedman’s definition,arguing instead that the “social responsi-bility of business is to come up with themagic of a vision that will help us trust itmore, whether as consumers or workers.”For Mr Cowen, business at its best is a “fun-damentally ethical enterprise” and (pre-serving his libertarian credentials by citingAyn Rand in support of it) “can be a vehiclefor the achievement of heroic goals.”

This would have been a far better bookhad Mr Cowen focused more on how toovercome the negative consequences of thespread of the Friedman Doctrine, which Ibelieve has helped socially irresponsible,greedy, unheroic business leaders flourishat the expense of the heroic kind.

Happily, a new generation of moresocially responsible business leaders isemerging, like Marc Benioff of Salesforce,the Chobani founder Hamdi Ulukaya andIndra Nooyi (until recently at the helm ofPepsiCo). If only Mr Cowen had shownless unconditional love for corporateAmerica and instead concentrated onwhat needs to be done to ensure that beingethical and heroic becomes business asusual. That “love letter” would have leftmost readers hopeful that there might yetbe a Happily Ever After.

©2019 The New York Times News Service

Save wind energy from the doldrums

Paean to big business

BOOK REVIEWMATHEW BISHOP

BIG BUSINESS:A Love Letter to an AmericanAnti-Hero Tyler Cowen St. Martin’s Press; 272 pages, $28.99

But caution is warranted about headwinds

Cheer in the markets

ILLUSTRATION: AJAY MOHANTY

Commission & omissionsEC has not upheld the spirit of the law

INFLEXION POINTSARUNABHA GHOSH & SELNA SAJI

AKASH PRAKASH

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12 COMPANIES MUMBAI | TUESDAY, 21 MAY 2019 1>

PAVAN LALLMumbai, 20 May

Most real estate players differ-entiate themselves through pre-mium dwellings, transparentbusiness practices and timelydeliveries, but southern devel-oper Sobha is deploying anunusual tactic with its latestoffering that will add furnitureto what it calls its fully back-ward-integrated approach.

Metercube, which gets itsname from the unit of measur-ing space and volume, is thename of Sobha's latest businessline. The brand will offer anarray of furniture and homefurnishings. It has opened thefirst ‘experience’ centre, spreadover 3,000 square feet, and it isalready live at its corporateoffice over at Outer Ring Roadin Bengaluru. The centre fea-tures dining tables, chairs, sofaframes, coffee tables, bookshelves, and entertainmentcabinets, among other things.

Products are designed withmodern sensibilities andpriced a couple of notchesabove Swedish furniture giantIkea. So its furniture rangestarts from ~4,000 and goes upto ~60,000, and has an averageprice point of ~12,000. The firstMetercube store will opensometime in October at a25,000 sq ft location on St.Marks road in the city centre.“We will roll out more Meter-cubes in a hub-and-spoke mod-el first in Bengaluru, thenpotentially across other citiesand will cater to all kinds of cus-tomers and not just those whobuy flats from Sobha," said J CSharma, Sobha's managingdirector and vice-chairman.

Who will Sobha go head tohead with? "We are not goingto be competing with Ikea,"

Sharma said. He said the com-pany’s furnishings and newproducts are an evolution fromtheir already existing business-es that include an interiors divi-sion, a glazing and metal worksunit, a concrete division as wellas a mattress business underthe brand Restoplus. At theinteriors division, Sobha'swoodwork factory is set up overa facility that is 325,000 sq ft,employs 1,000 people and ma-kes doors, wardrobes, and inte-rior fit outs. That's also wheremost of Metercube's productswill be made to start with.

Sobha sells around 3,000flats a year with an averageprice of ~1 crore, and its buyersall represent a target audience

for the company. AdityaYamsanwar, director at TeamOne Architects, which worksclosely with developers, saidthat historically its always beenreal estate consultants who runservices that range from HVAC(heating, ventilation, and airconditioning) to nowadayseven automatic logistics coor-dination for guests and visitorsat facilities so that they neednot fill out a piece of paper toenter the building. “Very fewhave done back-end integrationto this degree,” Yamsanwarsaid, adding that Pune-basedrealtor Panchshil Realty isanother rare example of a firmthat custom builds bathrooms,and door frames.

Sharma said there was muchdeliberation before getting intothe B2B (business-to-business)line. Originally, the companywasn't planning to sell productssuch as doors to other realtors.Eventually, that changed direc-tion and today it makes on aver-age 50,000 doors a year, ofwhich 60 per cent is supplied toother realtors such as Prestige,Shapoorji Pallonji Real Estate,Mahindra Lifespaces, and oth-ers. That business is growing ataround 20 per cent a year.

Sobha, generated ~3,500crore last financial year with anet profit of ~296 crore. Theinteriors and furnishings busi-ness, which includes mattress-es, generated around ~143 crore,company officials said.

According to Yamsanwar,the advantage of real estateadd-ons being retained in-house is that it becomes easierto manage supply and demandas well as quality. “Especiallyfor companies doing a lot ofbusiness in office campuses,they are better geared to back-ward-integration than justpure-play residential becauseof the design and volume fac-tors that are at play with regardsto standardisation.”

Gulam Zia, executive direc-tor at Knight Frank, said thatwhile furnitures and fit-outs area value-add for a homebuyer, adeveloper doesn’t make hugemargins on it unless the quan-tities are huge, which haverecently been slower due tolowering sales volumes andvelocities.

“But, it will be a value-addfor mid- to lower-range housing since upper- to luxu-ry-end of market buyers tendto seek stripped down homesto fit it out,” Zia said. “That isinnovation.”

Realty player Sobha enters furniturebusiness with Metercube brand

EXPANDING BUSINESSSobha's other Revenue Productsbusinesses (~crore)

Glazing & metal 157 crore Metal works, aluminum works divison doors windows, glass works

Interiors & 143 crore Cabinets, cupboards, doors, furnishing furniture, mattresses

Concrete products 43 crore Pavers, blocks, kerbstones,slabs, drainage channels

Source: Company

DEBASIS MOHAPATRABengaluru, 20 May

Software services firms glob-ally are likely to see a sluggishdemand in the banking,financial services and insur-ance (BFSI) space, along withhealth care vertical in the cur-rent financial year.

Industry experts are of theopinion that while rising paceof insourcing by bankingclients apart from consolida-tion in the banking sector areseen as primary reasonsbehind this slow growth indemand, lingering uncertain-ty after scrapping ofObamacare is likely to pulldown growth figures in thehealth care vertical.

“We believe that there isgoing to be continued weak-ness in the banking and healthcare segments. Serviceproviders such as Cognizantand Infosys have been indenial (so far). However, thesecompanies are starting to seewhat we have been seeing forsome time,” said Peter Bendor-Samuel, founder and chiefexecutive officer (CEO) of glob-al research firm Everest group.

Despite big banks’ contin-uing investment in digitaltransformation, most of thesenew budgets are being spenton fintech firms with more ofinsourcing, he added. As partof insourcing, clients are man-aging their IT-related work in-house than outsourcing it toIT services players.

Within the BFSI vertical,while banking segment isgoing through a slowgrowth phase, client spendon the insurance segmentremains strong.

IT cos to facelowdemandin health care,BFSI space

NEHAALAWADHINew Delhi, 20 May

Business process manage-ment (BPM) major Genpact is helping the Envision VirginRacing Team for the Formula E Championship — the world’s first fully electric carracing event.

The current fifth season dif-fers from the very popularFormula One racing in the crit-ical way that the participants donot race based on laps but in a45-minute and 30-minute for-mat with the only constantbeing the energy of the car bat-tery. The drivers have to makereal-time decisions on how toutilise the available power to beable to not just win, but alsoensure that it lasts through theprescribed time limit.

Genpact is training its peoplein India, giving data scientiststhe chance to work on real-time,real-world outcomes. It has ateam of data scientists dedicat-ed to driving performance,based in India. “(The event has)11 race teams, 22 drivers andeach team has identicalresource — the energy of thebattery...then it’s a mix of thecars' drivers' talent and thesophistication of the algorithm

which we are providing,” saidGenpact’s Chief Science OfficerArmen Kherlopian.

The team has worked on algo-rithms that take into accounthundreds of parameters, includ-ing pre-race track conditions anddetailed telemetry from sensorsmonitoring every major compo-nent and system in the car.

At the centre of the work thatGenpact is doing with EnvisionVirgin Racing is Genpact’s Cora,an artificial intelligence plat-form that collects and analysesthe available data and makesrecommendations about energymanagement, speed, or passingstrategies using all availabledata, in the fastest time possible.

The drivers talk in real-timewith the engineers while theyrace, and the human machineinteraction becomes critical.

The use of AI in car racing is agrowing trend, given that lastyear, Formula One choseAmazon Web Services to providetechnology based insight.Researchers and teams study tele-

metric data, temperature, pres-sure, frequency, speed and so onreceived from onboard sensors.This data can help individualteam drivers take decisions likesteering, acceleration and brake,along with data such as lap times,top speeds, pit stop times, windspeeds on the track, and others forprecise forecasting.

Organised by the same enter-prise that hosts Formula Oneraces — the FédérationInternationale de l’Automobile— the difference with Formula Eracing is that sustainability anda cleaner planet are built intoevery aspect of the races. Eventhe advertising sign boards usedin the races since April this yearwill be environment-friendly.

“In Formula E, you haveelectric race cars, implication ofsustainable cities, clean ener-gies. They've also enabled sus-tainability in the business mod-el. In Formula One, you canhave one team spending $600million while another can spend$100 million. The innovation inFormula E is that all teams arecapped at an operating budgetof $25 million, so this means thenumber of people that can bemobilised would count in thefew dozens, not in the hun-dreds,” said Kherlopian.

Genpact’s India staff powers e-car racing event

Genpact is training its people in India, giving data scientists the chance to work on real-time,real-world outcomes

Orchid Pharma is a step clos-er to finalising its secondattempt to find a plan underthe Corporate InsolvencyResolution Process it had ini-tiated earlier.

As on Friday, theResolution Professional (RP)for the case had got three suchplans, the company informedthe stock exchanges.

Earlier, the NationalCompany Law Tribunal(NCLT) cancelled the resolu-tion plan from US-basedIngen Capital after the latterhad not met the final date forinfusing an upfront amount.Ingen had said it first wantedspecified sets of data fromOrchid.

Resolution plans wereinvited on April 10, in line witha February 28 order of theNCLT. The last date for send-ing plans was May 10, laterextended to May 17.

The RP will now evaluatethe plans and place the rec-ommendation before theCommittee of Creditors (CoC).The latter is expected to meetlate this week or early nextweek. GIREESH BABU

Orchid Pharmadebt resolution:RP gets 3 plans

Incumbency wave in India,Australia lifts Adani stocksSUDARSHAN VARADHAN & CHRIS THOMASNew Delhi/Bengaluru, 20 May

Shares in various Adani Group compa-nies, including those of flagship AdaniEnterprises, surged on Monday after

exit polls predicted Prime Minister NarendraModi would return to power, even asAustralian poll results also spelled goodnews for the Indian conglomerate.

Adani Enterprises rose as much as 29%in afternoon trade, its sharpest intradaygain in over two years. Other Adani Groupstocks such as Adani Power, Adani Gas andAdani Green Energy were all up more than15% in afternoon trading.

The rally in Adani stocks outshone abroader market rally, which saw the NSEindex close 3.7% higher at 11,828.25 points,while the benchmark BSE index was 3.8%higher at 39,352.67 points.

The surge comes after exit polls onSunday predicted that Modi may return topower with an even bigger majority in par-liament, a far better showing than expectedin recent weeks.

Billionaire Gautam Adani's rapid ascentto the top tier of Indian business is oftenassociated with the rise of Modi, who is alsofrom the western state of Gujarat.

Shares of Adani Enterprises have risenby about 170% since Modi assumed power,compared to around 40% under the previ-ous Congress-led regime.

Analysts say Adani Group's rally onMonday was in line with the euphoria in

Indian markets, but did not specify whythe group's stocks did so much better thanthe broader market.

"It is broadly an election-based rally.People are expecting reforms on the infra-structure side to continue," said an analystcovering Adani Ports, which rose more than10%. Adani's empire, which includes bil-lions of dollars worth of investments inmining, ports, trading, electricity and gasamong other things, has benefited fromModi's emphasis on economic develop-ment. The business tycoon has in the pastbrushed off any notions that he has beengranted undue favours.

Separately, news that Australia's conser-vative coalition has swept back to powerwith an outright majority also boded well forAdani Mining Australia, which has beenstruggling for years to kick off its ambitiousCarmichael coal mine project in Queenslanddue to environmental concerns.

Adani Mining Australia used the elec-tion results to slam the labor government inthe state, saying the poll verdict reflectedpublic consensus on the mine.

"Let's hope they (Queensland state gov-ernment) realise it is time to start listeningto the people of Queensland," Lucas Dow,Chief Executive of Adani Mining, said.

27.41%Adani Enterprises

Gautam Adani, chairman of Adani Group

A NEW HIGH (BSEprice on Monday)

15.26%Adani Power

12.54%Adani Gas

14.97%Adani Green Energy

Kesoram toentercartyremarketby SeptAround three years afterscouting for a partner to enterthe passenger car tyre seg-ment, Kesoram Industries’Birla Tyres, part of the B KBirla Group, has decided to doso by itself, and within fourmonths.

Its chief financial officer, PRadhakrishnan, told BusinessStandard they’d rely on thebrand value Birla Tyres hadwith its dealership base. “Theover ~2,000-crore tyre mar-ket in the country is expectedto grow in double-digitsannually, and we will targetthe after-market” he said.

AVISHEKRAKSHIT

Huawei India journey hits a wallas US tech giants up the ante ARNAB DUTTANew Delhi, 20 May

American internet major Go-ogle has banned Huawei fromsome of the Android mobileservices, in a new twist to thecontinuing trade war betweenthe US and China. Other US-based tech giants such as Inteland Qualcomm, too, havedeserted Huawei globally,adding to the adverse impacton the India business of theChinese telecom major. Inter-national reports suggest thatsuppliers from Europe may fol-low suit, a development thatcould hit Huawei even harder.

Marketing its handsetsunder brands like Huawei andHonor, the Chinese firm hadmanaged to grow its share inthe highly competitive Indiamarket recently. With the lat-est developments globallylinked to a perception of secu-rity threat, Huawei is lookingat a bleak future in India andsome other key markets, ana-lysts pointed out.

Without Google’s Androidoperating system (OS), Huaweimay have to put off new

launches, market analysts andexperts said. Android OS, thatpowers over 90 per cent of thesmartphones in the country,has been the only operatingsystem used by Huawei to date.From its flagship devices likeHuawei P30 Pro and P9 to itstop-selling mid-level smart-phones like Honor 9N and 9i,each one is dependent on dif-ferent versions of Android.

Its tablets, too, are solelyrunning on Android OS.

Moreover, Google’s virtualmonopoly over the smart-phone market (globallyAndroid holds over 80 per centof the market) and its vast soft-ware ecosystem would meanan unprecedented control overany hardware maker. The burn

of dissociation with it could becatastrophic for any handsetmaker, said analysts.

“Without access to AndroidOS, it would be nearly impossi-ble for Huawei to operate,” saidNavkendar Singh, researchdirector, IDC India. WhileHuawei has been developing anin-house OS for quite some time,Singh said for any new OS toestablish itself in the markettakes years. “In today’s world,where an all-round OS ecosys-tem like Android exists, it takesat least two to four years to devel-op another OS that can standbefore competition,” he said.

“Huawei has made sub-stantial contributions to thedevelopment and growth ofAndroid around the world. Asone of Android’s key globalpartners, we have worked close-ly with their open-source plat-form to develop an ecosystemthat has benefited both usersand the industry,” the companysaid in an email statement.

Google’s latest move meansthat all its mobile apps likeYouTube, Google Maps,Chrome, and Gmail will beinaccessible to Huawei.

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T E NARASIMHANChennai, 20 May

Old habits die hard butas Cherry Blossom, theshoe polish brand

from British multinationalconsumer goods companyReckitt Benckiser, is discover-ing, once they do disappear, itcan be tough reinstatingthritual. In its latest campaign,the brand, is urging people togo back to what was once aneveryday routine. And bydoing so, the hundred-plusyear old brand is looking toreclaim its position in con-sumer’s lives as a daily habit.

Interestingly the campaignthat addresses working classIndians, across geographies, isbeing released only on digitalplatforms at the moment. Asexperts point out, the need toreaffirm the brand’s status ismost acute for the 20-45 agegroup and these customersare largely present online.

Not only has the brandchosen a different platform tospeak from, it is also present-ing a different story arounditself. Instead of the nostalgicreferences to the brand’s pres-ence in the country and itsfamous mascot, the trampplayed by Charlie Chaplin, thenarrative focuses on the posi-tive impact of polishingshoes. ‘Polish to shine’ is thetagline. Sukhleen Aneja, CMOand marketing director,Hygiene Home-South Asia,Reckitt Benckiser said, “Overthe years shoe polishing as acategory has started to fadefrom public memory and theonus of re-igniting growth lieswith the company.”

Shoe polishes face thethreat of being forgotten onthe shelf and soon to being

forgotten as a category alto-gether. This is the premise ofthe ads. The first film has aschool girl highlight how pol-ishing shoes stands in for val-ues such as being responsibleand disciplined. The secondad has a father-son banteringover the need to look one’sbest and going out in polishedshoes.

“Our endeavour is toincrease the importance ofpolishing shoes in the con-sumer’s life especiallyamongst children and officegoers,” said Aneja.

The last campaign was in2006 for the completion of100 years of Cherry Blossomshoe polish, which waslaunched in 1906 in the UK.The ‘100 shining years’ cam-paign was based on theCharlie Chaplin theme.

The brand is not only look-ing to get people to go back tothe old ‘polish and shine’ rou-tine, but is also hoping toupstage competitor Kiwi that

has upped its presence in theretail stores significantly inrecent years.

The ads this time roundare more purposedriven and theintention is tomake it more relat-able. Harish Bijoor,founder-CEOBijoor Consultssaid that there aretwo ways of adver-tising, functionaland emotional.“Normally brandstend to yo-yobetween these twodepending on theneed. In the case ofCherry Blossom, itis a basic shoe polish. But afterhaving built the brand, thenext step is to make it thebrand of choice. What thebrand now does is it look atthe functionality of really wellpolished shoes and whetherone can make shoe polishinga desired activity.”

Few dispute the leadershipstatus of Cherry Blossom inthe market. One of its rivalssaid that there are very few

brands that havesurvived with thesame leadership for100-plus years andmaintained a near-generic recall in themarket. It is criticaltherefore that thebrand not just tack-le competition witha message pro-claiming to be bet-ter, or older, buttake a stand thaturges people tothink CherryBlossom every time

they think of stepping out ofhome.

“We have a loyal set of cus-tomers who would reach outfor our brand irrespective ofany other options available.With the new campaign, ouraim is more to reach out to awider audience,” said Aneja.

Cherry Blossom stepsup to the digital pitchReckitt Benckiser emphasises the functionality of its iconic shoe polish brand,as it reaches out to a new generation of customers

Diligence, sincerity and discipline are the values that the brand wants to be associated with

“Over the yearsshoe polishing asa category hasstarted to fadefrom publicmemory and theonus of re-igniting growthlies with thecompany”

SUKHLEEN ANEJACMO and marketingdirector, HygieneHome-South Asia,Reckitt Benckiser

Best day in adecade for markets

Adani Group and Anil Ambani Groupshares saw huge gains. Market playerssaid investors were betting that the newgovernment would take steps to ease liq-uidity pressure faced by realty andNBFCs.

Some, however, cautioned investorsfrom getting swayed by the ongoing elec-tion-related euphoria in the market.They said the elections have a short-termbearing on the market.

“After the election dust settles, mar-kets will again start searching for funda-mentals such as corporate earnings, oilprices, and how the US-China trade warspan out,” said Raamdeo Agrawal, co-

founder Motilal Oswal Financial Services.Sonal Varma, managing director and

chief India economist at Nomura, saideven if the BJP returns to power, “we donot foresee a major reversal of the cur-rent (weak) economic conditions in theshort term, although the end of politicaluncertainty and policy continuity wouldbe a medium-term positive.”

Corporate earningsmay disappointagainAnalysts attribute the slowdown ingrowth to the adverse impact ofdemand slowdown in sectors such asautomotive, consumer durables, non-banking finance, and consumer staples,which were leading the top line growthin the last few quarters.

The results season is, however, farfrom over and the earnings trend couldchange further. The current sampleonly represents around 60 per cent ofthe listed universe in rupee terms,based on the historical run rate of quar-terly revenues and profits. Many of theindustry leaders such as InterGlobeAviation, Bharat Heavy Electricals, Oiland Natural Gas Corporation, and SunPharmaceutical Industries are yet todeclare their results for Q4FY19.

The mainline domestic market-focused companies (excluding finan-

cials, energy, technology,pharma, and metals)remained under pressure,with 8.9 per cent YoY declinein net profit (adjusted forexceptional gains and losses)during the quarter, againstearnings growth of 17.7 percent a year ago. These com-panies’ combined net saleswere up 7.8 per cent, growingat the slowest pace in the lastfour quarters.

Among domestic busi-nesses, fast-moving con-sumer goods (FMCG) compa-nies outperformed, with 21.9per cent growth in combinednet profit in Q4, despite aslowdown in volume and rev-enue growth. Their combinednet sales were up 9.5 per centYoY, a sharp cut from 13.7 percent growth during the thirdquarter. Their marginsdeclined, as employee costsand marketing expenses grewfaster than the top line. This,coupled with the recent risein crude oil prices anddemand slowdown, raises aquestion mark over the earn-ings sustainability in theFMCG industry.

Technology companiessuch Tata Consultancy

Services, Infosys, HCL Technologies,and Wipro reported a recovery in earn-ings growth, driven by rupee depreci-ation. The industry’s combined netprofit was up 17.1 per cent YoY, growingat the fastest pace in at least 12 quar-ters. Net sales growth at 15.4 per centwas, however, the lowest in three quar-ters, a result of the adverse impact of aslowdown in the global economy.Margins were also under pressure, asemployee costs account for nearly 53per cent of industry revenue, up steadi-ly from 50 per cent three years ago.

Technology and FMCG playerstogether account for 56 per cent of thecombined net profit of ex-financials andenergy companies. In the total universe,these four sectors take up 80 per centof the combined net profit, but only 47per cent of combined revenues.

Etihad and Hindujasset for Abu Dhabimeet on May 23

The Hindujas want lenders to take a sub-stantial haircut on their dues, he said.Jet owes around ~8,600 crore to banksand has failed to pay up to its employeesand suppliers.

Apart from Hindujas, a couple ofunsolicited bids, keen to invest in Jet,are also being vetted. The unsolicitedbids came from London-based AdiGroGroup, British entrepreneur JasonUnsworth, and Mumbai-based DarwinPlatform, some of them seeking to part-ner Etihad in a bid to rescue Jet. Therehave been talks with government-backed wealth fund National Investmentand Infrastructure Fund (NIIF) as well.

Earlier, the consortium of 26 lendershad shortlisted Etihad, NIIF, and privateequity players TPG Capital and IndigoPartners as possible bidders for Jet afterthese companies had put in their expres-sion of interest. Of these, only Etihad putin its bid, that too in the form of a condi-tional letter of interest, on May 10 — thelast day for submission of bids. Otherplayers have in the meantime lost inter-est in picking up a stake in Jet as theNaresh Goyal-founded airline is left withfew aircraft and airport slots.

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Trade growth slowdown mayworsen amid tariff war: WTOSUBHAYAN CHAKRABORTYNew Delhi, 20 May

Rising trade tensions haveprompted the World TradeOrganization (WTO) to dim its

prospect for trade growth in the sec-ond quarter of the 2019 calendar year.

“World trade growth is likely toremain weak into the second quarterof 2019,” the WTO said on Monday,pointing towards falling levels ofgrowth in international air freight,automobile production, sales andtrade in agriculture raw materials.“The outlook for trade could worsenif heightened trade tensions are notresolved or if macroeconomic poli-cy fails to adjust to changing cir-cumstances,” it further said.

While the WTO did not mention theUS and China in its latest assessment,the escalating trade war between thetwo largest economies had beenblamed by it earlier as asource of destabilisation ofgrowth. The Geneva-basedbody brings out its quarterlyforecast of global tradegrowth through the WorldTrade Outlook Indicator(WTOI) index. It shows asustained slowdown in con-tainer port throughput,stemming from slow growthin crucial sectors.

The WTO has maintained that theindex is not intended as a short-termforecast, suggesting it provides an indi-cation of trade growth in the near

future. The index had correctly fore-cast continued reduction in tradegrowth since 2018. Readings greater

than 100 suggests growthabove medium-termtrends, while thosebelow the number indi-cate the opposite.However, actual tradevolumes have closely fol-lowed its predictions.

This was driven bydeclines in all, but twocomponent indices, elec-

tronic components and most impor-tantly, export orders, which managedto rise slightly.

Indices for export orders (96.6) andelectronic components (96.7) appear to

have bottomed out, even as bothremained firmly below-trend, the WTOsaid. Elsewhere, the index for contain-er port throughput (101.0) also declinedbut remained above 100, suggestinggrowth in line with recent trends.

In April, economists at the globaltrade body estimated that merchan-dise trade volume growth would fall to2.6 per cent in 2019, down from 3.0 percent in 2018, before rebounding to 3per cent in 2020. However, they hadcautioned that significant downsiderisks remained to the 2019 forecast.“Any rebound in 2020 would dependon reduced trade tensions and/orimproved macroeconomic perform-ance,” the WTO had said.

India's exports had a disappoint-

ing start in the first month of the newfinancial year as growth crashed to afour-month low of only 0.64 per centin April, with sectors such as engi-neering goods, gems and jewellerysuffered sharp contractions. Of the30 major product groups, 14 recordeda growth in April, a steep climb downfrom 20 in March.

Tensions between the two largesteconomies are not expected to subsidesoon as Beijing has taken a sternerstance now. The last bilateral meetbetween both parties ended inconclu-sively on May 10 - the same day US res-ident Donald Trump raised the tariffrate on $200 billion worth of Chineseproducts from 10 per cent.

The Xi Jinping administration hasresponded by putting a similar 25 percent import duty on US imports worth$ 60 billion.

‘Any rebound in 2020 depends on reduced trade tensions and/or improved macroeconomic performance’

KEY FINDINGSBELOWTREND 96.6 indices for export orders

96.7 indices for electroniccomponents

Steadying the ship101.0 index for container portthroughput

India’s exports0.64%export growth in April, at afour-month low

The WTO bringsout its quarterlyforecast of globaltrade growththrough the WorldTrade OutlookIndicator index

Maharashtra mootsone-stop data shop for land title records

RAJESH BHAYANIMumbai, 20 May

The Maharashtra govern-ment is working on a newsystem of registration ofland title that will ensuresingle-point availability ofa gamut of information. Thestate proposes to introducethe Maharashtra LandTitling Act, which sourcessay will be a single-windowmechanism for authenticat-ing land titles.

The state had released adraft land titling Act last yearfor public debate and hasnow decided to go aheadwith its plan. The state'smove is seen as a pilot projectfor national rollout of onlineland title records with thegovernment. Maharashtra isplanning to implement it inMumbai first.

Government officials arecurrently tight-lipped dueto the code of conductahead of the Lok Sabhapolls, but sources said thatthe land titling mechanismwill first take off in Mumbaibecause linking of variousdepartments and digitisingrecords has already beencompleted there.

The first move will be toclear the draft bill in the stateCabinet and get it passed inthe Assembly session begin-ning mid-June. Once the Actis passed in both the Houses,notifying it would be easier.However, all processes haveto be completed in the next

three months as state assem-bly elections are scheduledin October.

The state will first set upthe Maharashtra Land TitlingAuthority for the implemen-tation. This authority willensure that all informationrelated to an immovableproperty is accessible at oneplace. This will be done bybringing together informa-tion available with differentagencies in the existing sys-tem like Registration, Surveyand Land Records. It alsostands for the single agencytaking care of the mainte-nance of records as well asupdating the records as perthe transactions that happen,said the source.

There will be one or moretribunals for land titling andone or more appellate tri-bunals. The appellate tri-bunal’s awards can be chal-lenged in a special Bench ofthe high court. The authoritywill also appoint the title reg-

istration officer.Once a property’s prelim-

inary record draft of title isprepared, objection will beinvited and after consideringthose objections, if any, thetitle would be registered. Thegovernment also proposespenalties, including fine andimprisonment, in case of wil-ful concealment of informa-tion or deliberate furnishingof false information to anyofficer or tribunal establishedunder this Act.

The state governmentsource also said that oncethe new system is imple-mented, the land title willgive security to the title andrights of persons owning,purchasing or receiving theproperty. This will protecttitle-holders from fraudwhen dealing with propertyand also provide trans-parency and easy accessibil-ity of information on landand also transactions. This,in turn, will make evenfinancing smoother.

The records will containdetails related to immovableproperty owned by a person,nature of ownership, chargeor covenant on the land, andso on.

At present, it is left to theindividual to ascertain thetitle of the property. Underthe proposed system, thetitle registration officer willcarry out the process ofpreparation, maintenanceand updating of the Titlesregister.

SMOOTHER PROCESSAt present, no conclusive

system for land titles

Property deals, financingand acquisition becomestime-consuming

For the first time, state orpublic authority would beconfirming land titles

Land title insurance willalso be a reality once thenew system is implemented

McAloo, grilled chicken wrap off McD menu PRESS TRUST OF INDIANew Delhi, 20 May

US-based fast foodMcDonald’s has droppedmany items — like McAlooand Grilled Chicken Wrap —from the menu of the 13 stores,which it has reopened inDelhi-NCR after its agreementwith partner Vikram Bakshi toacquire Connaught PlazaRestaurants Pvt Ltd (CPRL).

The company has also tak-en Maaza beverage off the list,a fruit based drink brand fromCoca-Cola.

“To ensure a more consis-tent McDonald’s India experi-ence across the differentregions, we have permanentlyremoved some of the leastpopular items, including theMcAloo Wrap, ChickenMcGrill, Egg Wrap, Grilled

Chicken Wrap, and Maazabeverage. The rest of the menuremains the same,” BarrySum, director of corporaterelations for Asia atMcDonald’s.

Besides, the menu boards,tray mats, and packaging havea new design to be consistentwith McDonald’s simple, mod-ern brand identity, he added.

“Paper packaging and

wooden utensils are alsoForest Stewardship Council(FSC) certified to supportMcDonald's global commit-ment to sustainability,” Sumadded.

According to the company,customers visiting the 13 re-opened stores will experiencean enhanced service experi-ence with more customisedhospitality, refreshed menuboards, merchandising andpackaging.

CPRL, after its agree-ment with estranged part-ner Vikram Bakshi to trans-fer his share in the JV to theUS-based firm, had tem-porarily shut down its 160stores.

On Sunday, CPRL, whichis now controlled byMcDonald's, announced re-opening of 13 restaurants inDelhi-NCR.

The company plans to re-open the rest stores "overthe coming days andweeks", McDonald's Indiahad said in a statement.

AROUND THE WORLDN

‘Official end for Iran’ if it hurts us, says Trump

Ford to cut 7kjobs globally

AFP/PTIWashington, 20 May

President Donald Trump has issued anominous warning to Iran, suggesting thatif the Islamic republic attacks Americaninterests, it will be destroyed.

"If Iran wants to fight, that will be theofficial end of Iran. Never threaten theUnited States again," Trump said in atweet.

Tensions between Washington andTehran have been on the rise as the UnitedStates has deployed a carrier group and B-52 bombers to the Gulf over what it termedIranian "threats." This account has beenmet with widespread skepticism outsidethe United States. The White House hassent mixed signals in recent days, amidmultiple US media reports of infighting inTrump's cabinet over how hard to pushWashington's arch foe Iran.

The Trump administration has orderednon-essential diplomatic staff out of Iraq,citing threats from Iranian-backed Iraqiarmed groups, and sent an aircraft carrierand heavy B-52 bombers to the region.

On Sunday, a Katyusha rocket was fired

into Baghdad's Green Zone housing gov-ernment offices and embassies includingthe US mission. It was not immediatelyclear who was behind the attack.

According to US media reports,Trump's long-hawkish national securityadvisor John Bolton is pushing a hard lineon Iran, but others in the administrationare resisting.

Trump himself said recently that hehas to "temper" Bolton.

Iran's foreign minister downplayed theprospect of a new war in the region onSaturday, saying Tehran opposed it andno party was under the "illusion" theIslamic republic could be confronted.

"We are certain... there will not be a warsince neither we want a war nor does any-one have the illusion they can confrontIran in the region," Mohammad JavadZarif told state-run news agency IRNA atthe end of a visit to China.

Iran-US relations hit a new low last yearas US Trump pulled out of a 2015 nucleardeal and reimposed unilateral sanctionsthat had been lifted in exchange for Tehranscaling back its nuclear program.

Saudi Arabia called Sunday for emer-gency regional talks to discuss the mount-ing Gulf tensions, saying that it does notwant war with Iran but is ready to defenditself.

ON THE BRINK OF A WARTensions between US and Iran

have been on the rise as the US hasdeployed a carrier group and B-52 bombers to the Gulf

The Trump administration hasordered non-essential diplomaticstaff out of Iraq

Trump’s national securityadvisor John Bolton is pushing ahard line on Iran: Reports

Billionaire pays off $40-mn loan of students at US collegeBLOOMBERGNew York, 20 May

Billionaire investor RobertF Smith (pictured)announced in a com-mencement address atMorehouse College onSunday that he would payoff the student loans ofevery member of the classof 2019.

“On behalf of the eightgenerations of my family thathave been in this country,

we’re gonna put a little fuel inyour bus,” Smith said duringa speech to the Atlanta col-

lege’s graduating class. “Myfamily is going to create agrant to eliminate your stu-

dent loans,” Smith added,according to a Twitter post byMorehouse College.

“This is my class, 2019.And my family is making agrant to eliminate their stu-dent loans,” he was quoted assaying. An official at the his-torically-black, all-male col-lege told a local news stationthat the gift was worth about$40 million. There are almost400 graduating seniors in theclass. Federal student loansare the only consumer debt

segment with continuouscumulative growth since theGreat Recession. There’s $1.6trillion in outstanding debtthrough the first quarter of2019 while delinquent USstudent loans reached arecord $166 billion at the endof 2018.

Smith, the richest blackperson in the US with a networth of $4.5 billion on theBloomberg Billionaires Index,had already announced a $1.5million gift to Morehouse.

AFP/PTINew York, 20 May

Ford plans to cut 7,000jobs, or 10 percent of itsglobal salaried workforce,as part of a reorganizationas it revamps its vehicleofferings, the companysaid Monday.

The downsizing willinvolve some layoffs andreassignments of white-collar staff and should becomplete by the end ofAugust, a Ford spokes-woman said. Ford hasbeen phasing out mostsedan models in theUnited States as more con-sumers have opted forpickup trucks and sportutility vehicles. The move,which began last year andfollows some job cutsannounced earlier in oth-er regions, will lead to 800layoffs in North Americain total, including about500 this week, said Fordspokeswoman MarisaBradley.

SC to take upgovt plea onblack moneylaw todayPRESS TRUST OF INDIANew Delhi, 20 May

The SC agreed on Monday tohear on Tuesday the Centre’splea challenging the Delhi HighCourt order staying its notifica-tion to allow the 2016 blackmoney law to operate with ret-rospective effect from July, 2015to book and probe offenders.The Centre is also aggrieved bythe interim order of the highcourt that restrained theIncome Tax (I-T) departmentfrom taking any action againstVVIP chopper scam accusedGautam Khaitan, againstwhom a black money case hasbeen lodged. The high court, inits order, said the Black Money(Undisclosed Foreign Incomeand Assets) and Imposition ofTax Act, which was enacted inApril 2016, could not be allowedto operate with retrospectiveeffect from July, 2015.

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