read to lead...2020/05/18 · resume productionatitsgurgaon plantfrommonday,after57...
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Terms and conditions of ICICI Bank apply
Maruti Suzuki toresume ops atGurgaon plant
MARUTI SUZUKIIndia (MSI) onSunday said itwillresume
production at its Gurgaonplant fromMonday, after 57days of closure due to thecoronavirus-inducedlockdown, reportsPTI.Thecompanywould re-startproduction ofvehicles at itsGurgaonplant fromMay 18,MSI said in a statement.Theautomajor has resumedoperations at itsManesarplant lastweek after around50days ofclosure.PAGE 4
12 lakhmembersof EPFOwithdraw`3,360 cr, says FM
FINANCEMINISTERNIRMALASithara-manonSundaysaid around12 lakh
members of the Employees'Provident FundOrganisation(EPFO)withdrew`3,360crore retirement savingsduring lockdown, reportsPTI. Earlier, onMarch28, theEPFOallowed formal sectorworkers towithdrawanon-refundable advance fromtheir retirement savings.
GST law changes:Lack of clarity ontransitional claims
WITHTHECentrenotifying theGSTchangesmade inthe FinanceAct,
2020, a recentHC judgmentallowing taxpayers till June30 to claim the transitionalcreditwouldbenullified,reports fe Bureau inNewDelhi.TheAct hadamendedrelevant sections of theCGSTAct,whichwould come intoeffect fromMonday. PAGE 4
OUT INTHE COLD TAKING STOCK
NATION, P4
FRESH INFUSION
INTERNATIONAL, P13
AHMEDABAD, MONDAY, MAY 18, 2020
GeneralAtlantic toinvest about `6,600 crin Jio Platforms
COVID BLUES
UK PMJohnson acceptspublic frustrationwithlockdown easing rules
OPINION, P6
ASHOK GULATI SHOBHANASUBRAMANIAN
New reforms in could
be farm sector’s
1991moment
Govt's economic package
could kick offNPA2.0, if
banks have to lend in a
weakening economy
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THE STIMULUS IS IN
Banks to bleed as no new IBC cases fora year, relief forMSMEs& ‘covid debt’
State govt borrowing limit hiked to 5%of GSDP;mostly linked to reform goals
‘PACKAGE’ DEALLEAVESMOSTUNHAPPY
BANIKINKAR PATTANAYAK&ANKURMIISHRANewDelhi/Mumbai, May 17
INABIG relief to cash-starvedfirms, the government onSunday said insolvency pro-ceedings against freshdefaulterswould remain sus-pended forup to oneyear andCovid-19-related debt wouldbe excluded from the defini-tion of default.The breather,however, will potentially hitfinancial and operationalcreditors hard and bleed theirbalancesheet,apartfromtem-porarily depriving them of acrediblemodeofbaddebtres-olution.Lendersmaybeforcedtoseekregulatoryforbearanceon provisioning and capitalrequirements.
Initially, proceedingsunder the Insolvency andBankruptcyCode(IBC)can’tbeinvokedforsixmonths,whichcan then be extended byanother six months, depend-ingonthepandemicsituation.There will be a special insol-vency framework under sec-tion240-Aof the IBC.
Already,inabid to insulatesmall businesses from beingdragged to the NCLT, thedefault threshold for trigger-ing insolvency has recentlybeen raised to `1 crore fromjust`1 lakhearlier.
Finance minister NirmalaSitharamansaidanordinancewill be promulgated soon toimplement the proposedchanges. However, proceed-ings in the cases alreadyadmitted will remain unaf-fectedbythelatestmove.Dataavailable with the IBBI show,
proceedings in 1,961 casesweregoingonasofDecember2019.
Despite risks of a sharpdeterioration in credit qualityof banks and cash flows ofoperational creditors due tothe suspension of IBC initia-tion,manyexpertsbelievethatgiven the unprecedented cri-sis,theexistenceofcompaniesmusttakeprecedenceovertheresolutionof stressedassets.
The suspension on freshinitiation of insolvency pro-ceedings for one year is likelyto increase provisioningfor banks.“The advantagewewere getting to refer a case tothe National Company LawTribunal (NCLT) was reversalof additional provisioning,now that option will not bethere,” a managing directorandchiefexecutiveofficerofabankwhodidnotwishtobenamed toldFE.
According to theJune7,2019,circularof the Reserve Bankof India (RBI), bankscan reverse 20%provisioning for unre-solved cases, afterreferring acase to theNCLT.
ContinuedonPage13
PRASANTASAHUNewDelhi, May 17
THE CENTRE ON Sundayacceded to a strident demandfrom states that theirmarketborrowinglimitbeenhancedtomeet the expenditure contin-gencies of the Covid-19 pan-demic amid a glaring revenuedeficit. However, the govern-mentdidasmartthingbylink-ing a considerable part of theextra borrowing freedom toefforts towards and fulfilmentof long-pending reforms,including in the key areas ofease of doing business and thepowersector,wherefreeplayofmarketforcescontinuestobeapoliticalanathema.Themoveisalso being seen a sequel to theCentre’s recent informal advi-soriestothestates,urgingthemto undertake labour and landreforms, that are critical toenhancing theglobal competi-tivenessofIndianindustries.
Finance minister NirmalaSitharamanraised thenetbor-rowing limit for state govern-ments from 3% of the grossstate domestic product (GSDP)to 5% to make available anadditional `4.28 lakh crore toall the states combined.While0.5 percentage point (pps) ofthe extra borrowing windowwill be available to all statesunconditionally,oneppswillbe
made available in four equaltranches with each to clearly“specified,measurableandfea-sible reform actions”.The bal-ance 0.5 pps can be accessed ifmilestones are ‘completelyachieved’inatleastthreeoutoffour reformareas.While a spe-cific schemewill benotifiedbythe expenditure department,the reform linkage will be infourareas–universalisationof‘OneNationOneRation card’,ease of doing business,powerdistributionandaugmentationofurbanlocalbodyrevenues.
Sitharaman pointed outthat the states together haveonlyutilised14%of`4.8 lakhcrore (75% of the FY21 netborrowing limit of `6.41 lakhcrore set earlier for the fullyear) so far this fiscal. Eventhough the FY21 net borrow-ing limit is being raised to`10.69 lakh crore, the statesmaynotfinditeasytotapmar-ket for funds given the recentspike in state developmentloans (SDLs).
ContinuedonPage13
Most disappointed at lack of bold measures in stimulus packages.Don’t think demandwill be created and consequently economicactivitywill be stifled. `20 lakh crorewas a huge amount and itwas meant to stimulate economic revival and growth—KIRANMAZUMDAR-SHAW, EXECUTIVE CHAIRPERSON, BIOCON
ASMITADEY&KIRAN RATHEENewDelhi, May 17
AIRLINESAND HOSPITALITY—thetwomostdistressedsec-torswith their entire businesslockedduring lockdown—areclearly themost disappointedwith the government’s eco-nomicrevivalpackage,astherewasnothingspecific forthem.Tobe fair, the government didlist out somemeasures for theaviation and airport sectorsbut they were neither in thenature of an instant relief norto kickstart operations.Theywere mostly long-termmea-sures,which have been in thepipeline for long.
Just howbadly the airlinesare going to behit by the lock-down can be gauged from thenumbers put out by Crisilwhich said that the aviationindustry will crash-land thisfiscal with revenue loss of`24,000-25,000 crore in theApril-Junequarter.
Airlines will be theworst-affected, contributing morethan 70% of the losses, or`17,000crore,followedbyair-port operators with `5,000-5,500 crore and airport retail-ers (including retail, food and
beverages and duty-free)with`1,700-1,800 crore,Crisil hasestimated.
The disappointment overbeingleftoutwasexpressedbySpiceJetchairmanandmanag-ingdirectorAjaySingh.
ContinuedonPage13
DEEPTIMANTIWARYNewDelhi, May 17
AS THE THIRD phase of thenationwide lockdown endedon Sunday, the Centreannounced an extension tillMay31,butlistedconsiderablerelaxations in non-contain-mentzonesthataresettoopenuptheeconomywiththeoper-ation of all markets, offices,industriesandbusinesses,andinter-state and intra-statemovementof“passengervehi-cles and buses”with the con-sentof thestates involved.
InitsguidelinesforPhaseIVof the lockdown beginning
Monday,theministryof homeaffairs (MHA) said the “delin-eationof red,greenandorangezoneswillbedecidedbythestateandUTgovernments after tak-ingintoconsiderationthepara-meterssharedbytheministryofhealthandfamilywelfare.”
ContinuedonPage13
MALINI BHUPTAMumbai, May 17
MARKETS ARE UNLIKELY tobe“overjoyed”withthedetailedstimulus package announcedby finance minister NirmalaSitharaman over four days, asthere’s nothing in the packageto take equities higher in nearterm.While thereformswouldhave a positive impact on theeconomyovermediumto longterm, there is little to resusci-tate a standstill economy.AndrewHolland, chief execu-tive officer atAvendus CapitalAlternate Strategies,said,“Theannouncementsaregood,butIdon’t thinkthemarketswillbeoverjoyed as no money hasbeen put into the pockets ofpeople and nothing has beendoneforcompanieseither.Thereform measures would playout over the medium to longterm.There’s nothing to keepourmarketshigher.”
Indian markets hadrecouped some of the lossesafterhittingalowonMarch23,as developed economiesannouncedpackagestosupporttheir economies. But Indian
equities have turned choppy inMay taking cues from otherglobalmarketsasasecondwaveis expected to hit theseeconomiesastheyeasethelock-downs.Emergingmarkets areexpectedtowitnessfurthersell-ing.Jefferies in its strategynoteonFridaysaid,“The`3.2-trillionpackage announcement today(Friday) was unexciting. Thedetailsfor`16-18trillion(8-9%ofGDP)arenowknownandthenet hit to the central govern-mentfiscalis1%ofGDP.”
Marketexpertsbelievethatthestimuluspackagehasdonelittletoputmoneyinthepock-etsofthepeople anditdoesn’t
havemuchtooffertothereallystressed sectors.The packagehadnothingforthehospitalityandaviationsectors,whicharemost impacted by the lock-down. Both these sectorsaccountforasignificantnum-ber of jobs. The market cur-rently lacks triggers in neartermas the first quarterof thenewfinancialyearislikelytobea washout. Formarkets to goup, there has to be optimismand the package doesn’t offeranything immediately toreviveanimal spirits.
On the reforms front,mostmarket participants found theannouncements forward look-ing.Given that the rotation ofmoney is the lifeblood of aneconomy,the creditmeasuresannounced for MSMEs alongwith that for non-bankingfinancialinstitutionsandinfra-structureareverypositive.ABal-asubramanian,managingdirec-tor&CEOofAdityaBirlaSunLifeAMC,said,“Thegovernmenthasapproached things systemati-cally so that growth is revivedandemploymentisgenerated.
ContinuedonPage13
Airlines, hotels stareat large job losses
ENS ECONOMIC BUREAUNewDelhi, May 17
APART FROM TACKLING thehealth challenges of Covid-19,Indianeedstoeffectivelyimple-ment plans to comeout of theeconomicslumpresultingfromthe lockdown.Twokey sectorscrucial to theseplansare trans-port infrastructure andmicro,small andmediumenterprises(MSMEs),forwhichthegovern-menthas alreadyannounced a
full credit guarantee on freshloansupto`3lakhcrore.
Nitin Gadkari, the Unionminister in charge of both
these crucial sectors, has theunenviable task of overseeingthis economic revival exerciseas the country eases out oflockdown.Gadkariwill be theguest at the e-Adda, an onlineinteraction thatwill hostedbyThe IndianExpressonMay18.
The survival and revival ofMSMEs is at the heart of the`20-lakh-crore packageannouncedbythegovernmentover theweek,andmoremea-suresareexpectedtobreathelife
into the economy. One of themost senior members of theUnionCabinetsince2014,Gad-kari has launched a “bank” ofschemes,ideas,innovationandresearch portals for gettingMSMEs back in business andalleviate thedistress in a sectorthatmakesupabout45%ofthecountry’s totalmanufacturingoutput,40%ofexports,almost30%ofthenationalGDP.
ContinuedonPage13
ECONOMIC REVIVAL
LOCKDOWN 4.0
90,927TOTALCASES
DEATHSSOFAR 4,987NEWCASES
COVID-19 UPDATE
AS COVID-19 pandemicspread quickly, India facedtwin challenge — shortsupply of testing swabsand those imported fromChina at a steep price of`17 per stick were provingtobe inferior.Asolutionwasfixed in10-dayscombining
the expertise of Johnson &Johnson of manufacturinga similar product in ear-buds, and Reliance Indus-tries providing custom-made polyester staple fibrethat resulted in the cost ofswabs coming down to just`1.7 perunit. PAGE3
Markets to open, stateswill get to decide onroad transport, zoning
23,000
25,500
28,000
30,500
33,000
35,500
26,674.03
31,097.73
March 24,
2020
May 15,
2020
Sensex
Markets unlikely to be overjoyedwith govt’s ‘unexciting’package
MSMEs are the backbone of economy and it isadmirable how the govt is prioritising their needs.The fine printwill tell usmore but a special insolv-ency framework for MSMEs looks like a goodmove.—SAJJAN JINDAL, CHAIRMAN &MD, JSWGROUP
QuickPicks
Sections7,9and10ofIBCthatdeal
with insolvency initiationtobesuspended
Movetohitcreditqualityofbanks,
raise theirprovisioninganddentcash flowofoperationalcreditors
Default thresholdtotrigger
insolvencyraisedto`1crore from`1 lakh, toinsulateMSMEs
Someanalystssayblanketsuspension
tohaveunintendedconsequenceswhileotherssayexistenceoffirmsmusttakeprecedenceoverresolutionofdebt
COVERFORINDIAINC
17,500
24,500
2,6002,700
1,700
0
5,000
10,000
15,000
20,000
25,000
30,000
Airlines AAIairports
Privatisedairports& JVs
Airport retailconcessionaires
(privatised airports)
Total
Potential revenue loss to the Indian aviation industryApr–Jun 2020* (` crore)
Crisil analysis for Q1FY21; revenues for AAI airports and airport retail concessionaires havebeen adjusted for revenue share; Airport retail concessionaires include retail, F&B, duty-free stores
Excludes otherconcessions revenue lossof `750-1,000 crore
Asmuchas80%ofthehotelsand
restaurant industryexpectedtoshut
Sectorwantscertainproportion
ofthe funds lyingwithESICtobeusedforsalarypayments
Otherdemandsincluderestoration
ofITCunderGST, liquiditysupportanddeclarationofforcemajeure
Cash inflowsdeadfor retail,outflows
towardsbanking intact
Restaurantsemploy7.3million,
organisedretaildirectlyemploys12million
15thFinanceCommission
chairmanNKSinghhasunderlinedneedforreforms in factorsofproductionsuchas landand labour toboostprivateinvestments
After failingtogetthebackingofthe
oppositionparties, there isachange inCentre'sstrategyto let thestatesease landacquisitionbyindustry,couldbeapprovedlaterbyCentre
The states’ revenuescould suffer
massively in FY21. theirown tax revenues inAprilwere less than a fourth
of theestimatedlevel
Even asCentre ismerging44central
labour acts into fourcodes. UPgovt hasdecided to keepmostlabour laws in abeyancefor the next three years,MPtoed the line
NitinGadkari
Nitin Gadkariwill be the guest at e-Adda today
India brings down test swab price to a tenth
Budget stimulus looks low...
`20.97 lakh cr
RBI
8.01
8.751.8
2.41
Budget (extra)
Banks/FIs(Credit,etc)
Extra GoI borrowings
States' additional borrowings
after the cap is raised to 5% GSDP
`4.2 lakh cr
`4.28 lakh cr
Additional size of Central Budget
`1.8 lakh cr
Other
*unaffected by huge revenue shortfall
...but include govt spending*
...the actualstimulus may be
`10.28 lakh cror 5%of GDP
PANDEMIC PACKAGE
`40,000crextraforMGNREGS, for
300-crorepersondays
IBC tweakedtoshieldMSMEs,no
newcases forayearand Coviddebtexcludedfrom‘default’
Hike instategovtdebt to5%ofGSDP
from3%now.Partofthistobe contingentonreforms inelectricityetc
SEBstoget`90,000cr inorder
torepayoldduesbuthavetocommit toreforms
Agrigetsabigboostwith
defangingofECA, inter-statemovementofcropsallowed,contract farmingtobeallowed
Defencegetsaboostwith
automaticFDI limitraisedto74%
Someminingreformbutnoactiononcut
in levies thatareveryhigh
Inearlierpackages:
MSMEloansofupto`3 lakhcr tobe
guaranteedbygovt.DefinitionofMSMEchangedtoallowunits tobecomebigbutnot loseMSMEbenefits
NBFCstoget`75,000crbyway
ofextra liquidityandpartialcreditguarantees
2,872
Ahmedabad
FinalPushMONDAY, MAY 18, 2020
TRANSFORMATIVE IMPACT
Narendra Modi
@narendramodiMeasures and reforms announced by the FM todaywill have a transformative impact on our healthand education sectors...
FINANCIALEXPRESS2 WWW.FINANCIALEXPRESS.COM
● BIG BENEFITS
URVASHIVALECHAMumbai, May 17
AHOSTOF Indian companiescan nowtap foreign capital bydirectlylistingoverseas.
Start-upsandcomplexcon-glomerates and their holdingcompanies,alongwithnew-agetechnology companies, cannowlook at anoverseas listingwithout listing inIndia first.
Finance minister NirmalaSitharamanonSundayclearedthedecksforIndiancompaniesto directly list overseas. Themovewill allow Indian start-
ups and other specialised sec-tors to list overseas, whereinvestors are sophisticatedenoughtotakebetsonnewsec-tors.
Vishesh C Chandiok, CEO,Grant Thornton India, said:“DirectlistingoverseaswithouttheneedtolistinIndiaisamas-sivebenefit forstart-ups,com-panies in high-tech andbiotech,metals andminerals,etc. which are better under-stood by investors in specificmarketsoverseas.”
Other than start-ups,hold-ing companies, banks andselect technology companiesmay find better valuationswhile listing overseas. Forinstance, conglomerates andholding companies trade at adiscountduetothecomplexityof the business, but the samemay enjoy a better valuationoverseas.
ThismovewouldalsoallowIndian companies to raise for-
eign capital through directoverseaslisting.Marketexpertsbelieve themove is positive asforeign listing gives Indiancompaniesbettervisibilitytoo.
RusmikOza,executivevicepresident-headoffundamen-tal–research,KotakSecurities,said, “A foreign listing wouldgive access to overseas capital,
bettervisibilityandallows for-eigninvestorstodirectlyinvestinthosecompaniesratherthancoming through the foreignportfolio route. Additionally,foreigninvestorscanavoidINRcurrency risk by investing inthemdirectlyoverseas.”
InvestinginIndianequitiescomeswith not only the assetclass,butalsocarriesacurrencyrisk. A depreciating currencytends to impact dollar returnsfor foreign portfolio investors.With thismove,a foreign list-ingwould cut the foreign cur-rency risk for this class ofinvestors.
Deven Choksey,managingdirector, KRChoksey Invest-mentManagers,said:“This isabig move where globalinvestors could continue totrade theirfunds inglobal cur-rencywithoutconvertingthemintorupee.Companiesthatarelisting abroadmay find bettervaluations.”
SHRITAMABOSEMumbai, May 17
WITHTHE INSOLVENCY lawremaining out of bounds for ayear, banks are pinning theirhopes on a regulatory dispen-sation for restructuringstressed assets. An existingrestructuring scheme formicro, small and mediumenterprises(MSMEs)couldalsocome in handy in a year thatwillhave little toofferin termsofrecoveries,bankerssaid.
Unfazed by the absence ofanymention of restructuringin the five rounds of briefingsheld by the finance ministry,industryexecutives expect theReserve Bank of India (RBI) toaccede to their request forallowing a one-time restruc-turing of stressed assetswith-out classifying them as badloans.SunilMehta,chief exec-utive officer, Indian Banks’Association, said loan restruc-turing and asset classificationfall within the domain of theRBIandthere isstill scopeforarelaxationonthat front.
At the same time, he said,theextensionoftheInsolvencyand Bankruptcy Code (IBC)’sapplicability by a year is cer-tainly a setback for recoveries.“Aone-yearmoratoriumontheIBCwilldefinitelyaffectrecov-eries from those accounts,whichareyettobeadmittedastheywill nownot be admittedforoneyear.Thatwilldefinitelyimpactrecovery,”hesaid.
This year, banks mayincreasingly resort to an exist-ing debt recast scheme forMSMEs, available till Decem-
ber31,2020,which allows therestructured assets to remainstandard as long as theywerenot in default as on January1,2020.“Thiskindof restructur-ing could happen in a largernumberofaccounts incomingdays. While the repaymentmoratoriumis there forevery-one till May, even if the unitopensoperationsonMay18,itmaynot be able to payme theJune instalment after just 10days,” said a senior executivewithamid-sizedpublic-sectorbank(PSB).
Repayments fromMSMEscould be particularly limitedbecause being small busi-nesses, theywill tend to con-serve cash till the Covid threatblows over. “They may havebeenrepayingwithgreatdiffi-culty before Covid,but in thisscenario,theywill start toholdback repayments,” the bankeradded.
Inordertoensurerecoverieskeephappening,therearesomeoptions before banks, Mehtaexplained.OneistogettheRBI’spermission to restructureaccounts where the units arefunctional. The regulator willhave to then relax certainnorms,such as Section 29Aofthe IBC,whichbars banks fromentering intoanyrestructuringdealwithadefaultingpromoter.
Thesecondoptionistolookfor resolutions outside theNational Company Law Tri-bunal (NCLT). This couldinvolve a stressed companycomingupwithacompromiseproposalandthelendersagree-ing to it if they find itacceptable.
ISHAAN GERANewDelhi, May 17
DIKSHA, THE GOVERN-MENT’S online learning por-tal,hasregisteredover61croreviews since March 24. How-ever, those with no access tothe internet are still excludedfrom quality learning. So, thegovernment on Sundayannouncedanextensionof itse-learning programme tocoverofflinemediums.Insteadof theexisting three channels,thegovernmentwillbe rollingout one channel for each classcatering to those not havinginternet connection.
There is also a big pushtowards online learning,with
the government planning torelease 200more books for e-pathshalaportalwithQRcodesand added functionality tomake learning interactive.However, this is not the firstinitiative to offer teaching viapodcasts,TV, and othermedi-ums. Earlier, initiatives likeGyan Bharti and the Swayamportal have not been able togeneratemuchinterestamongstudents.
Manish Sabharwal, chair-man, TeamLease Services,believes that the governmentisstillstucktothefirstgenera-tionofed-tech.“Theworldhasshifted to third-generation ofed-tech. The governmentneeds to create competition,
theyneedtostoptryingtobeaserviceprovider,andratheractasaregulatorandpolicymakerwhich encourages competi-tion,”he said.
Lockdown has certainlymade online learning essen-tial and online teaching plat-formslikeByju’sclaimtohaveincreased their user base by
about 200%.“We have regis-tered 6 million new userssince the lockdown. Sessiontimes have increased, and sohas engagement” says DivyaGokulnath, co-founder,Byju’s.
Rules, however, have con-strained Indian educationinstitutionstotakeadvantage.For instance, the Sundayannouncement still does notallow all universities to offeronline teaching.The privilegeis limited to the top-100 uni-versities, a criterion specifiedunder the UGC Regulations2018.
While the rules have beenin place since 2018, till now,the UGC has only licensed 7
universities to offer onlinecourses.Thecurrentrelaxationwillmeanthetop-100willnotrequire licensing from theUGC,astheycanautomaticallystart courses fromMay30.
“It is a good start, but thegovernment needs to allowmuchmore.Overseasuniver-sities have signed up morethan 100,000 students overthe last 60days,so there is anappetite for it. The next stepwould be to allow all univer-sities to offer online courses.If they can be a university,they can be online,” said Sab-harwal.
India has 993 universitiesand38million university stu-dents.
Banks cling to restructuring hopesin toughyear for recoveries
`7,800-crorerevenue losson tax-relatedreliefmeasures
ANUPAMCHATTERJEENewDelhi, May 17
STATESWILL LIKELY have toreduceaggregate technical andcommercial (AT&C) losses oftheirpowerdistributioncompa-nies (discoms) to 15%, allowopen access to industrial con-sumers to procure electricityfromsourcesoftheirownchoiceand implement direct cashtransfers to provide subsidy toeligible power consumers toavail apart of the increasednetborrowing permitted by thegovernmentonSunday.
Though the final frame-workoftheprescribedreformshavenotbeenfinalisedyet,theCentre is likely to direct states
to reduceAT&C losses throughimprovement of the discoms’corporate governance andincreased intervention of IT-enabledinfrastructuretolowerpilferage in supply, sources inthepowerministrysaid.
Financeminister NirmalaSitharamanonSundaysaidtheborrowinglimitsofstateshavebeenincreasedfrom3%to5%of the gross state domesticproduct (GSDP) for FY21,butpart of the borrowingwill belinked to specific reforms infour sector, including powerdistribution. Of the incre-mented borrowing limit, 1%(of GSDP)will be given in fourtranches of 0.25%, linked toreformineachsector.
Under the ‘Atmanirbhar’package, the government hasannounced fresh loan of`90,000 crore via PFC-REC todiscoms,butwithdefiniteriderstoensurethatthefacilityindeedcomestotheaidoftheseentities.
Thismovewouldalso allow Indiancompanies to raiseforeign capitalthrough directoverseas listing
Companies allowed to list overseas
RISHI RANJANKALANewDelhi, May 17
THE GOVERNMENT HASdecriminalised various provi-sions in theCompany’sAct andstreamlinedvariousotherregu-lations,butauditorsandcorpo-rate law professionals soughtmore clarity on some of thesechanges.
Finance minister NirmalaSitharaman on Sunday,whileannouncingthefifthtrancheofeconomicstimulus,spokeaboutgovernment’s thrust onenhancing the ease of doingbusiness andmakingefforts toincrease India’s doingbusinessreport(DBR)ranking.
Amendments were earlierintroduced in the Lok Sabhaunder theCompanies (Amend-ment)Bill,2020,whereinitwasproposed to re-categorise 23offences out of 66 compound-ableoffences.Companylawvio-lations involvingminortechni-calandproceduraldefaultstobedecriminalised.Shiftingmajor-ityofcompoundableoffencestotheinternaladjudicationmech-anismhasalsobeenproposed.
The finance ministerinformed that government isworkingonamissionmodeforthenext phase of ease of doingbusiness reforms relating toeasy registration of property,fastdisposalofcommercialdis-putesandsimplertaxregimefor
makingIndiaoneof theeasiestplacestodobusiness.
Nangia Andersen directorSandeep Jhunjhunwala said,“Decriminalisation of com-poundable offenceswhich aretechnical or procedural innature andwhichotherwisedonot involve largerpublic inter-est,woulddefinitelyprovecost-effective as well as time-effi-cientforcorporates.”
Corporate lawprofessionalswelcomed government mea-sures for streamlining regula-tions and doing away withunnecessary rules, but manysaid several initiativesannouncedbythegovernmentneedfurtherrevision.
AMRG & Associates CEOGaurav Mohan said, “Eventhough the government isannouncing measures forbringing in ease of doingbusi-ness,themeasuresaredeficientinaddressinginherentissues.”
Forinstance,everynewcom-pany has to now fill in FormSPICe+ for incorporation andincidental registrations effec-tive February 2020. But soonafter its inception,users of thisutilityare facing issuesrangingfromdifficulty indownloadingforms to prior association ofDSCwithPAN,heexplained.
“Main ideabehind thisutil-itywastolessenhasslesforbusi-nesses and professionals, butsuch teething issues pose aserious difficulty for its opti-mumusage for the endusers,”Mohanadded.
Dipti Lavya Swain,a corpo-rateM&AlawyerandpartneratHSA Advocates, said: “In thegovernment’s continuedattempt,decriminalisation ofvarious minor defaults andeffectualisation of an internaladjudicationmechanismwillbe much welcome, but at thesame time,the process shouldbemore objective anddigitallyfacilitised”.
DolphyD’Souza,a partnerat auditor SRBC and Co,pointedout,“Itwill project thecountry as a more matureeconomy. An internalmecha-nism for compoundingoffenceswill de-clog criminalcourts andNCLT,who are cur-rentlyover-burdened...”
Thrust continueson ease ofdoingbusiness reforms
SURYASARATHI RAYNewDelhi, May 17
TO ENSURE THAT crores ofmigrant labourers who havegoneback to theirvillages findenough job opportunities, thegovernment on Sunday allo-cated an additional `40,000crore under the MahatmaGandhiNationalRuralEmploy-mentGuarantee Scheme (MG-NREGS) for the current fiscal,over and above `61,500 croreallocated in the Budget for2020-21.
The finance minister saidwith the infusion, nearly 300crorepersondaysof jobscanbegenerated under the schemeanda largernumberofdurableandlivelihoodassetscanbecre-ated. The move will boost therural economythroughhigherproduction,shesaid.
The government had allo-cated `71,002 crore underMGNREGA in 2019-20 and`61,815 crore in 2018-19.Around 265 crore person dayswere created in the entire2019-20.In2018-19,thetotalnumberwas 268 crore.As onMay,17,a total of 15.85 croreperson days of job have beengenerated.
The scheme has always in
great demand, and so thebudged provisions almostinvariablygotrevisedupwards.
“Therewas a pressingneedto increase the allocation asmany migrant workers whohavereturnedhomefrommet-ros andothercitieswould sub-stantially increase thedemandfor jobs under the scheme inrural areas,” said a senior gov-ernmentofficial.
As part of its relief packageunder Pradhan Mantri GaribKalyan Yojana (PMGKY), thegovernment had onMarch26enhanceddailywagerateunderMG-MREGS by `20 to `202perday.
TheincreasedratecameintoeffectfromApril1.
PRABHUDATTAMISHRANew Delhi, May 17
THECENTRE’SDECISION tofocuson implementing long-pending reforms and boost-ing capital investment forexpanding infrastructure intheagriculture sector,despitedemands fromfarmers’lead-ers for direct financial resis-tance, has been based on apositive outlook on the sec-tor’s growth.
Prediction of a normalmonsoon, higher-than-normal water levels in reser-voirs, good start to sowingof early-kharif crops andhigher fertilisers sales pointtowardsmakingavailable liq-uidity at farmers’ handsto achieve another bumperoutput.
Out of `20-lakh-crorepackage announced to steerthe economymove forward,thegovernmenthasprovided`3.64 lakhcroreasadditionalcredit and `14,000 crorebudgetary support (maxi-mum since details of theschemes are yet to beannounced) for the agricul-tureandallied sectors suchasanimal husbandry, dairy andfisheries this fiscal. In addi-tion,farmersarealsogoing toreap the benefits of invest-ment that the governmenttargets in themicroandsmallunits in food processing sec-tors.
The IMD last month pre-dicted this year’s monsoonrainfall to be 100% of thelong period average (LPA)of 88 cm.
Govt eyes sliverlining in farmsector normalcy
Govt expands digital literacy project, to cover offlinemediums
SUMITJHANewDelhi, May 17
THE GOVERNMENTHAS lost`7,800croreinrevenueduetotax-related relief measuresannounced sinceMarch 22—when the lockdown began.These measures includedextensioninvariousreturnfil-ingdeadlines,lowerinterestondelayed tax payment andreduction inwithholding taxrateamongothers.
Althoughtheimpactontaxrevenueismarginalcomparedtothesizeofthestimulus(`21lakh crore), this does notinclude the compensationdues owed by the central gov-ernment to states, whichstands at estimated `30,000crorefortheDecember-Marchperiodof the last fiscal.
However, the compensa-tionduesislikelytoberesolvedonly at theGSTCouncilmeet-ing as the compensation fundhas dried up due to higherrequirement this financialyear.
Making a pointFinanceMinister Nirmala Sitharaman addresses a press conference to announce thefifth and final tranche of economic stimulus package, at the National Media Centre,in NewDelhi on Sunday
Start-ups,companies in
high-tech andbiotech, metals andminerals to benefit
Overseasinvestors are
sophisticatedenough to take betson new sectors
Holding firms,banks and
select technologycompaniesmay findbetter valuations
Foreign listingwill reduce
the currency riskfor a select class ofinvestors
Experts believemove is
positive it givesIndian firms bettervisibility
Firms can nowlook at
overseas listingwithout listing inIndia first
States’borrowing leewaylinked to power reforms
Open accessfor industrial
consumers
DBT for powersubsidies
Reduction inAT&C losses
Swiftdisposal
of commercialdisputes, easypropertyregistration planned
Working on amissionmode
for next phase ofease of doing bizreforms, FM said
Auditors,corporate
law professionalsseekmore clarityon some changes
Restructuringof accounts
can be donewherethe units arefunctional
RepaymentsfromMSMEs
could be limited astheywill tend toconserve cash
Anotheroption can be
is to look forresolutions outsidethe NCLT
Once IBC isreactivated,
asset valuationscould come understress, experts said
Governmentwill start 12
additional learningchannels, one foreach class
One nation,one digital
platform programmeto startwith DIKSHA,e-content, etc
Top-100varsitiesallowed
toautomaticallystartonlinecoursesfromMay30
Earlier steps bygovt did not
generatemuchinterest amongstudents
CREDIT
`2 lakh crCredit to additional KCCbeneficiaries
`1,00,000 crAgriculture InfrastructureProjects at farm gate &aggregation points
`30,000 crAdditional credit support ofNABARD for coops & RRBs
`15,000 crAnimal HusbandryInfrastructureDevelopment Fund
`10,000 crMicro food enterprises
`9,000 crPradhanMantri MatsyaSampadaYojana
`5,00 crBee keeping
`500 crSubsidy underOperation Green
BUDGETARYSUPPORT
`11,000 crPradhanMantri MatsyaSampadaYojana
`4,000 crHerbal cultivation (2 yrs)
2016-17
2017-18
2018-19
2019-20
2020-21
MG-NREGS outlay (` cr)
(RE- Revised Estimate;
*latest Budget Estimate
48,215
55,166
61,815
71,002 (RE)
1,01,500* (BE)
Outlay for ruraljobs scheme raised65% to `1,01,500 cr
Ahmedabad
VEHICLES WITH INVALID ornon-functional FASTagwill bechargeddouble the toll fee ap-plicable on the national high-ways, the government said onSunday.Beforethisamendment,the user of vehicle was to paytwiceonthefeeplazaonlyifthevehicle didn't carry theFASTagandenteredindedicatedlaneforthe tag.Theamendment to the
NationalHighways Fee (Deter-mination of Rates and Collec-tion)Ruleswasdone inexerciseof thepowers conferredon theCentre. PTI
PRESSTRUSTOF INDIANewDelhi, May 17
ASCOVID-19CASES spikedinthe country, India faced thetwin challenge of short supplyof testingswabs,and those im-ported from China at a steepprice of `17 per stick wereprovingtobe inferior.
A solutionwas fixed in 10-dayscombiningtheexpertiseofJohnson&Johnsonofmanufac-turinga similarproduct inear-buds, and Reliance Industriesproviding custom-made poly-esterstaplefiberthatresultedinthecostof swabscomingdowntojust`1.7perunit.
While the earbuds typicallyuse cotton and the stick is toosmall to take throat and nasalswabs,anextenderwasused toincrease the lengthof thestemandthePSFfromReliancepro-videdlab-approvedmaterialfortesting.
SandeepMakkar,managingdirector, Johnson and JohnsonMedical India said that the en-tireplanwas stitched inmatterof 7 to 10 days, soon after theministryoftextilecontactedthecompany for a solution to theshortageoftestingswabs.Vasai-based Adi Enterprise, whichdoes third-partymanufactur-ing of earbuds for J&J, hasstartedmanufacturing the testswabs which are approved bytheNational Institute ofVirol-ogy,Pune.
Itisimportingnewmachin-ery which will eliminate theneed formanualputtingof ex-tendersandfurtherbringdownthecost to just`1perswab.
"Manufacturing of the testswabs in a record seven daysfromconceptualisationtopro-ductionunder theMake In In-dia initiative required ingenu-ityandrapidaction.
"In this design, Relianceprovided the rawmaterial andJohnson& Johnson India pro-videdprobonoscientificexper-tise of research,development,engineeringformanufacturingof the test swabs. Productionhas already started onMay6,2020,bythemanufacturerAdiEnterprise,an IndianMSMEinMumbai,"hesaid.
Officialsinvolvedinthepro-ject said themove started overa'Zoom'calltheministryoftex-tile didwith J&J andReliance,andwithin24hoursAdiEnter-prisewas given permission toproduce a prototype thatwassenttotheNationalInstituteofVirology.
The premier institute sug-gestedmodificationsthatwereincorporatedandprototypere-sent.After approval,Adi Enter-prisewas given orders toman-ufacture.
The company, they said, ismaking about one lakh of testswabs a day, which after ma-chineautomationwill increaseto5-6 lakhin3weekstime.
J&J ismaking sure the gov-ernmentisawareofthepricingand batchesmanufactured soastopreventmark-ups inpriceorswabsbeingexported.
As capacity scales up, Indiamay begin to export swabs aswell,theysaid.
Officials said it all startedabout 10 days backwhenRaviKapoor,secretary,textiles con-tactedJ&JandReliancetocheckwhether India can manufac-ture swab required for testingpurposes.The two companiesreadily agreed to take the pro-jectonamissionmodewithnocommercial considerations.
PRASANTASAHUNewDelhi, May 17
TAKINGFORWARDITS intentto exit from businesses, theCentrewillsooncomeoutwithanewpolicytoprivatiseallcen-tral public enterprises (CPSEs)in non-strategic space andsome in strategic sector in or-dertoopenall theindustriestoprivateplayers.
“Instrategicsectors,at leastone enterprisewill remain inthe public sector but privatesectorwill also be allowed,” fi-nance minister NirmalaSitharamansaidonSunday.Tominimise wasteful adminis-trativecosts,numberofenter-prises in strategic sectorswillordinarily be only one to four;others will be privatized ormerged or brought underholding companies,she said.
Currently, there is no cleardefinition of strategic sector.Air India, which used to be astrategic CPSE earlier, is nowbeing privatized. “List ofstrategic sectors requiringpresence of PSEs in public in-terestwillbenotified,”Sithara-mansaid.
Accordingtodepartmentof
public enterprises document,strategic areas include arms&ammunition and the allieditems of defence equipments,defenceaircraftsandwarships;atomicenergy(exceptinthear-eas related to the operation ofnuclearpowerandapplicationsofradiationandradio-isotopesto agriculture, medicine andnon-strategic industries); andrailwaytransport.
Currently,there are close totwo dozen companies underrailways, including IRCTC,IRFC,ConCor,Ircon andRVNL.Besides, privatizing some ofthese companies, the railwaysalsoplans toofferprivateplay-ers to run 150 trains in 100routesacross thecountry.Sim-ilarly, there are over a dozencompanies underministry ofdefence, including HAL, Hin-
dustan Shipyard, MazagonDock Shipbuilder,Bharat Elec-tronicsandBharatDynamics.
With the Centre allowingupto 74%FDI in defence pro-duction,someof these compa-
niesmayalsogotoprivateplay-ersinduecourse.Currently,thegovernmentisintheprocessofsolicitingbidsfortwobigCPSEs---oil retailer and refinerBPCLand Air India. The Centre has
also made its intent clear tobringdownitsdirectholdingincompaniessuchasIndianOiltobelow51%tomobilisenon-taxrevenues to funds plans andprogrammes aswell exit frombusinessesgradually.
Disinvestment of govern-ment stakes in companieshave become a major sourceof non-tax revenue in recentyears with collections of `1lakh crore in FY18, `85,000crore in FY19 and `50,300crore in FY20.With marketconditions not conducive,the Centre might nearlyhalve the disinvestment rev-enue target of `2.1 lakhcrore for FY21.
ECONOMY 3FINANCIALEXPRESS
WWW.FINANCIALEXPRESS.COM MONDAY, MAY 18, 2020
Whilst care is taken prior toacceptance of advertising copy,it is not possible to verify itscontents. The Indian Express (P.)Limited cannot be heldresponsible for such contents,nor for any loss or damageincurred as a result oftransactions with companies,associations or individualsadvertising in its newspapers orPublications. We thereforerecommend that readers makenecessary inquiries beforesending any monies or enteringinto any agreements withadvertisers or otherwise actingon an advertisement in anymanner whatsoever.
''IMPORTANT''
Date:18.05.2020
(A Govt. of India Undertaking)Head Office – II, Department of Information Technology
3 & 4, DD Block, Sector – 1, Salt Lake, Kolkata–700064
NOTICE INVITING TENDERUCO Bank invites Request for Proposals (RFP) for the following:Selection of System Integrator (SI) for Supply, Installation, Integration,Implementation and Maintenance of Hardware, Software, FacilityManagement Services for Finacle Core Banking (Version 10.x) & E-Banking (FEBA) atDC, DR andNear DRSite (Retendering).For any details, please refer tohttps://www.ucobank.com.
Deputy General Manager (DIT, BPR & BTD)
CORRIGENDUM TO THE DETAILED PUBLIC STATEMENT FOR
THE ATTENTION OF THE PUBLIC SHAREHOLDERS OF
INDOSTAR CAPITAL FINANCE LIMITEDCIN: L65100MH2009PLC268160
Registered Ofice: One Indiabulls Center, 20th Floor, Tower 2A,Jupiter Mills Compound, Senapati Bapat Marg, Mumbai - 400 013
Telephone Number: +91 22 4315 7000 • Fax: +91 22 4315 7010
Open offer for acquisition of up to 37,195,411 (Thirty seven million one hundred ninety
ive thousand four hundred and eleven) fully paid up equity shares of face value of
INR10 (IndianRupeesTen) eachof IndoStarCapital FinanceLimited (“TargetCompany”)
from the public shareholders of the Target Company (“Public Shareholders”), by
BCP V Multiple Holdings Pte. Ltd. (“Acquirer”), together with Brookield Business
Partners L.P. (“PAC”) in its capacity as a person acting in concert with the Acquirer
(“Open Offer” or “Offer”).
This Corrigendum to Detailed Public Statement (“Corrigendum”) is being issued by Nomura
Financial Advisory and Securities (India) Private Limited Private Limited (“Manager”) on
behalf of the Acquirer and PAC in respect of the Open Offer to the Public Shareholders
pursuant to and in compliance with Regulations 3(1) & 4 of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
(“Takeover Regulations”). This Corrigendum should be read in conjunction with the Public
Announcement iled on January 31, 2020, the Detailed Public Statement (“DPS”) which was
published in in all editions of Financial Express (English), all editions of Jansatta (Hindi) and
the Mumbai edition of Mumbai Lakshadeep (Marathi) on February 7, 2020. In addition, the
draft letter of offer in relation to the Open Offer was iled with the Securities and Exchange
Board of India (“SEBI”) on February 14, 2020.
The capitalized terms used but not deined in this Corrigendum shall have the same meaning
assigned to them in the DPS.
THE PUBLIC SHAREHOLDERS OF THE TARGET COMPANY ARE REQUESTED TO
NOTE THE FOLLOWING REVISIONS WITH RESPECT TO THE DPS:
On May 15, 2020, the Acquirer and Indostar Capital (“ICM”) entered into a letter agreement
(“Letter Agreement”) to record certain revisions in relation to the shareholders’ agreement
dated January 31, 2020 (“SHA”) entered into amongst the Acquirer, the Target Company
and ICM, and approved by the Board on January 31, 2020, which records the terms and
conditions governing the management of the Target Company and the inter se rights and
obligations between the Acquirer and ICM, in relation to the Target Company.
The Letter Agreement should be read together with the SHA. The revisions contained
therein are outlined below. The relevant paragraphs of Paragraph II(1)(c)(ii) (Background to
the Offer) of the DPS, setting out provisions of the SHA dealing with the MPS Requirement
(as deined in the DPS) and the right of the ICM Group to nominate directors on the board of
the Target Company shall stand amended to the extent set out below.
1. If, at any time, so long as the ICMGroup is classiied as a part of the promoter and promoter
group of the Target Company, the Target Company: (a) is in breach of the minimum public
shareholding (“MPS”) requirement under Applicable Law pursuant to the Open Offer; or
(b) requires head room to facilitate conversion of compulsorily convertible preference
shares held by the Acquirer (“CCPS”), then the ICM Group shall be solely responsible
for ensuring such compliance with the MPS requirement under Applicable Law (together
the “MPS Obligation”). Further: (i) if conversion of all the CCPS held by the Acquirer can
be undertaken by the Acquirer in one tranche without triggering a mandatory tender offer
under the SEBI (SAST) Regulations, then the Acquirer shall undertake such conversion
in the 18th month from the date of issuance of the CCPS in accordance with the terms
of the CCPS, provided that the Acquirer shall be entitled to convert any of the CCPS
held by it prior to the 18th month from the date of issuance as long as such conversion
does not cause the shareholding of the promoter and members of the promoter group of
the Target Company to exceed the MPS requirement under Applicable Law or trigger a
mandatory tender offer under the SEBI (SAST) Regulations; and (ii) the MPS Obligation
shall fall away upon any mandatory tender offer being triggered under the SEBI (SAST)
Regulations by the Acquirer upon conversion of CCPS held by the Acquirer or otherwise
in breach of the valid/ invalid transfers or purchases related provisions of the SHA, and
subject to the ICMGroup being in compliance with the valid/ invalid transfers or purchases
related provisions of the SHA.
2. As a result of compliance with the MPS Obligation, if at any point, the ICM Group’s
shareholding in the Target Company is less than or equal to 20% (twenty percent) of the
share capital of the Target Company (on a fully diluted basis) (“X%”), then the right of the
ICM Group (and not the Acquirer) to nominate directors on the board of the Company be
revised as given below and all references to “Revised Threshold Shareholding” shall
be construed to mean the higher of: (i) 12% (twelve percent) of the share capital of the
Target Company (on a fully diluted basis); and (ii) X- 2% of the share capital of the Target
Company (on a fully diluted basis):
Sr.
No.
Threshold Shareholding Requirement
(% of the share capital on a fully diluted basis)
Number of
Directors
1 Equal to or more than the Revised Threshold Shareholding 2
2 Equal to or more than 10% but less than the Revised Threshold
Shareholding
1
3 Less than 10% 0
3. Correspondingly, theAcquirer shall have the right but not the obligation to nominate a total of:
(i) 3 (three) nominee directors, subject to the Acquirer holding at least 25.1% (twenty
ive point one percent) of the share capital of the Target Company (on a fully diluted
basis), in the event that the ICM Group ceases to hold the right to nominate 1 (one)
nominee director i.e., the ICM Group ceases to own and hold at least the Revised
Threshold Shareholding; and
(ii) 4 (four) nominee directors in the event that the ICM Group falls below 10% (ten
percent) of the share capital of the Target Company (on a fully diluted basis).
It is clariied that the above amendments will not affect the Acquirer’s right to nominate
a total of 4 (four) nominee directors in case of a change in control of ICM or such of its
afiliates, in the manner contemplated in the SHA.
4. Except as detailed in this Corrigendum, all the other terms of the DPS remain unchanged.
5. The Acquirer and PAC and their respective directors accept full responsibility for the
information contained in this Corrigendum and shall be jointly and severally responsible
for the fulillment of their obligations laid down in the Takeover Regulations in respect of
the Open Offer.
6. A copy of this Corrigendum will also be available at SEBI website at http://www.sebi.gov.in.
7. Issued on behalf of the Acquirer and the PAC by the Manager to the Open Offer:
NOMURA FINANCIAL ADVISORY AND SECURITIES (INDIA) PRIVATE LIMITEDCeejay House, Level-11, Plot F, Shivsagar Estate,Dr Annie Besant Road, Worli,Mumbai, 400 018, Maharashtra, IndiaTel: +91 22 4037 4037Fax: +91 22 4037 4111Email: [email protected] Person: Vishal Kanjani / Sandeep BaidSEBI Registration Number: INM000011419
For and on behalf of the Acquirer and the PAC
BCP V Multiple Holdings Pte. Ltd. Brookield Business Partners L.P.Sd/- Sd/-Authorized Signatory Authorized Signatory
Place : MumbaiDate : May 16, 2020
PRESSMAN
ISHAAN GERANewDelhi, May 17
THE CORONAVIRUS PAN-DEMIChasexposedIndia'sun-der-preparedness in terms ofhealth infrastructure.Thegov-ernment, thus,on Sunday,an-nounced plans to ramp uphealth andwellness centres inrural and urban areas. It alsosaid that itwould increase in-vestment in public health.Atpresent,onlyone-fourthof In-dia's health expenditurecomes fromstates and centralgovernment.As a percentageof GDP, the central govern-ment'shealthexpenditure is ameagre 0.3%, while statescontribute0.7%.
The governmentwishes tocorrectthiswithaslewofmea-sures. On Sunday, it an-nounced that itwould be cre-ating infectious diseasehospitalblocks ineachdistrict.It also plans to integrate pub-lic health labs in all districts &block level labs and publichealth units to manage pan-demics.
But the more significant
push is foronlineservices.Thegovernment has conducted291 consultations for 17hours since April 13 using itse-sanjeevani portal. It nowplans to extend its initiativesto strengthen the NationalDigital Health Blueprint,which will store electronichealth records of the popula-tion. When Niti Aayog hadlaunchedthis service lastyear,Kerala was the only state to
have registered 2.58 crorepeople.
However, health analystsbelieve this may not beenough, as the governmentstill lacksplanstotackleapan-demic situation.
"The government needs tosetacriterionforpublichealthstandards," says Ali Mehdi,lead, health policy initiative,ICRIER."Nodoubt,Indianeedsto spend more, but we alsoneedanactionplan,a strategyto dealwith the crisis,"he fur-therhighlighted.
There is also the issue ofpersonnel. National HealthProfile data for 2018 shows ashortageofcloseto4lakhdoc-tors and 30 lakh nurses. Ananalysisofdatahighlightsthatin rural areas where there isonly one functioning primaryhealthcare centre (PHC) forevery 64,800 people and onePHC doctor for every 38,000people, the situation is muchworse.Telemedicinemayhelpcoverthisshortage.ButMehdipointsoutthatweneedto lookat the issueof lackof auxiliarynurses, midwives and Ashaworkers,aswell.
While the CDDEP esti-mates project country to have18.99 lakh beds and close to94,000 ventilators, if infec-tions double in 10 days, wemaynot have adequate infra-structure to dealwith the cri-sis. Indiawould need 41 lakhbedsbythe endof July.
● PANDEMIC PACKAGE
HIGHLIGHTS■ Public healthexpenditure to beincreased
■ Implementation ofNational Digital HealthBlueprint for creatingelectronic healthrecords
■ Integrated publichealth labs in alldistricts & block levellabs and public healthunit to managepandemics
Upgrading infranecessary, buthealth care centresneed doctors andnurses aswell
Govtprescribespushforhealth reforms
NewPSE policy opens all sectors for privatefirms; non-strategic PSUs to be privatised
The Centrewill sooncome outwith a newpolicy to privatise allCPSEs in non-strategicspace and some in
strategic sector in orderto open all the industries
to private players
India brings down corona test swab price to one-tenth
Vehicleswith non-functional FASTagto be charged double toll fee
Ahmedabad
NATION4 FINANCIALEXPRESS
WWW.FINANCIALEXPRESS.COMMONDAY, MAY 18, 2020
Maruti to resume operationsat Gurgaon plant from todayPRESSTRUSTOF INDIANewDelhi, May 17
COUNTRY’S LARGESTCAR-MAKERMaruti Suzuki India(MSI) on Sunday said that itwill resume production at itsGurgaon plant fromMonday,after57 days of closure due tothecoronavirus-inducedlock-down.
The company would re-start production of vehicles atits Gurgaon plant from May18,MSI said inastatement.
All activitieswill be carriedout strictly inaccordancewiththe government regulationsand guidelines and observingthe company’s own concernfor the highest standards ofsafety,it added.
The auto major hasresumed operations at itsManesar-based plant(Haryana) last week afteraround50daysof closure.
BothManesarandGurgaonplantshaveaninstalledcapac-ityto churnoutover15.5 lakhvehiclesperannum.
TheGurugramfacilityrollsoutmodels likeS-Cross,Vitara
Brezza, Ignis and Super Carrylight commercialvehicle.
TheManesar plant, on theotherhand,produceshighsell-ing models like Alto, Swift,Dzire, S-Presso, Ertiga andBaleno.
MSIhadsuspendedworkatbothof its plants onMarch22after nationwide lockdownwasannouncedtofightspreadof coronavirus pandemic inthecountry.
On April 22, the Haryanagovernment had granted per-
mission to the auto major torestart itsManesarmanufac-turing facility, but the com-pany had said it will resumeoperations only when it canmaintain continuous produc-tionandsellvehicles,‘which isnot possible at this point oftime’.
Thedistrictadministrationhad allowed the automajor torunthefacilityonasingleshiftbasis, while fixing the totalnumberof employees at plantat4,696.
12LEPFOmemberswithdrew `3,360 crduring lockdownFINANCE MINISTERNIRMALASitharamanonSundaysaidaround12 lakh members ofthe Employees'Provi-dent Fund Organisa-tion (EPFO)withdrew`3,360 crore retire-ment savings duringthe coronavirus-induced lockdown.
Earlier, on March28, the EPFO allowedformal sectorworkersto withdraw a non-refundable advancefrom their retirementsavings to deal withthe hardships due tothe lockdown.
The governmentonMarch 25 imposeda nationwide lock-downtofightthecoro-naviruspandemic.
Unveiling the fifth
and final tranche ofthe `20-lakh croreeconomic package,Sitharaman on Sun-daysaid12lakhmem-bers of the EPFO havewithdrawn as non-refundableadvanceof`3,360 crore duringthepast twomonths.
The EPFO, underthe Union labour andemploymentministry,hassettledatotalof12lakh claims under thePradhanMantriGaribKalyan Yojana(PMGKY)package.
The provision for aspecial withdrawalfrom the EPF Schemeto fight the Covid-19pandemicispartofthePMGKY schemeannouncedbythegov-ernment. —PTI
INVITATION FOR EXPRESSION OF INTERESTFROM LEADING BIOTECH COMPANIES
Innovative, complementary and synergistic partnerships are becoming increasinglyimportant to move a step closer to exploiting the benefits of modern biotechnology.Regional Centre for Biotechnology (RCB) is an institution of national importanceestablished by the Department of Biotechnology (DBT) , Govt. of India, under theaegis of UNESCO. The Centre is located in the 200-acre NCR Biotech Science Clusterin Faridabad at the Faridabad-Gurgaon Expressway. The Cluster has state-of-theart laboratories of serval other leading biotech research institutions established bythe DBT.
The Mission of RCB is to impart education and training, and conduct research inthe frontier areas of biotech sciences. To this end, RCB runs several Master’s andPhD level academic programs, To encourage the culture of entrepreneurship on thecampus, RCB also runs a BIRAC-supported Bioincubator housing several biotechstart-up companies. To further promote the industry presence on the campus, RCBinvites Expression of Interest (EOI) from leading Biotech companies to set up theirR&D activities at RCB, aiming to provide solutions for human and animal health, andagriculture and environmental challenges.
Interested companies may send the details as asked for on the RCB website www.rcb.res.in by email to [email protected] by 05 June, 2020. The shortlisted applicantswill be consulted further to understand the feasibility to take their proposal forward.
Registrar
An
under the
Date:18.05.2020
(A Govt. of India Undertaking)Head Office – II, Department of Information Technology
3 & 4, DD Block, Sector – 1, Salt Lake, Kolkata–700064
NOTICE INVITING TENDERUCO Bank invites Request for Proposals (RFP) for the following:Selection of System Integrator (SI) for Supply, Installation, Integration,Implementation and Maintenance of Hardware, Software, FacilityManagement Services for Finacle Core Banking (Version 10.x) & E-Banking (FEBA) at DC, DRand NearDR Site (Retendering).For any details, please refer to https://www.ucobank.com.
Deputy General Manager (DIT, BPR & BTD)
MINOSHA INDIA LIMITED(FORMERLY RICOH INDIA LIMITED)
Registered Office: 1132, 3rd Floor, Building No. 11, Solitaire Corporate Park, Guru Hargovindji Marg, Andheri Ghatkopar Link Road, Chakala,
Andheri East, Mumbai – 400 093
CIN: L74940MH1993PLC074694
Tel: + 91 - 22-66833000; Email: [email protected], Website: https://www.minosha.in/
Corporate Office: 7th Floor, Tower ‘B’, Windsor IT Park, A-1, Sector – 125, Expressway, Noida, Gautam Budh Nagar, Uttar Pradesh – 201 301,
Telephone Number: +91-120-4582900
POSTAL BALLOT NOTICE
At the outset, Members of the Company are hereby informed that the Name of the Company has been changed from ‘Ricoh India Limited’ to‘Minosha India Limited’ with effect from 3 March 2020 pursuant to fresh Certificate of Incorporation dated 3 March 2020 issued by the Registrar ofCompanies, Mumbai, Ministry of Corporate Affairs, Government of India. The change of Name of the Company has been done pursuant to ResolutionPlan as approved by the Hon’ble NCLT, Mumbai Bench vide its Order dated 28 November 2019.
Members are hereby further informed that pursuant to the provisions of Section 110 of the Companies Act 2013 read with the Companies (ManagementandAdministration) Rules, 2014 (including any statutory modification(s), amendments(s) or re-enactment(s) thereof for the time being in force), GeneralCircular No. 14/2020 dated 8 April 2020 and No. 17/2020 dated 13 April 2020 issued by Ministry of Corporate Affairs, Government of India (MCACirculars) and other applicable law, if any, ‘Minosha India Limited’ (Formerly ‘Ricoh India Limited’) (“Company”) is seeking approval from itsMembers by passing Resolutions as set out in the Postal Ballot Notice dated 11 May 2020 by way of Remote E-Voting only.
In terms of relevant provisions of the Act and in accordance with the Guidelines prescribed by the Ministry of Corporate Affairs (MCA) for holdingGeneral Meetings/conducting Postal ballots through Remote E-Voting vide above mentioned General Circular No. 14/2020 dated 8 April 2020 and No.17/2020 dated 13April 2020, the Postal Ballot Notice along with Explanatory Statement and instructions regarding E-Voting has been sent by Email onThursday, 14 May 2020 to all those Members whose Email address are registered with the Registrar and Share Transfer Agent of the Company/Depository/Depository Participants and whose Names appear in the Register of Members/list of Beneficial Owners as on Friday, 08 May 2020 (“Cut-off Date”) as received from National Securities Depository Limited (NSDL)/Central Depository Services Limited (CDSL).
Members are requested to communicate their Assent or Dissent through Remote E-Voting System only.
Due to non-availability of Postal and Courier services, on account of threat posed by COVID-19 pandemic situation and in the light of aforesaid MCACirculars, the Company is sending Postal Ballot Notice in Electronic form only and express its bonafide inability to print and dispatch hard copy of thePostal Ballot Notice along with Postal Ballot Form & Pre-paid Business Reply envelope to the Members of the Company towards this Postal Ballot.
To facilitate such members to whom physical Postal Ballot could not be dispatched, the Company has made special arrangement for registration ofEmail addresses in terms of aforesaid MCACirculars so that they may receive the Postal Ballot Notice Electronically and cast their Vote Electronicallyas well. The process for registration of email address by a Member is as under:
a) For Voting on the Resolution proposed in the Postal Ballot through Remote E-Voting, Members who have not registered their Email address mayget their Email address registered by sending an Email to the Company’s Registrar & Share Transfer Agent M/s MCS Share Transfer AgentLimited, F-65, 1st Floor, Okhla Industrial Area, Phase I, New Delhi – 110020, Telephone Numbers - + 91-011- 41406149 - 52, Fax Number: 011-41709881 at their Email ID at [email protected]
Alternatively in the aforesaid matter, Member(s) may approach the Company - Minosha India Limited at its Corporate Office at 7th Floor, Tower‘B’, Windsor IT Park, A-1, Sector – 125, Expressway, Noida, Uttar Pradesh – 201 301, Telephone Number : + 91-120-4582900 by writing anemail to the Company at [email protected]
The members while sending an Email either to the RTA/STA or the Company in the above matter shall provide the following information in the email –
(a)Full Name of the Shareholder;
(b)Number of Shares held;
(c)Folio Number (Where Shares are held in Physical);
(d)Share Certificate number (Where Shares are held in Physical);
(e)DP ID & Client ID (If Shares are held in Demat);
(f) Email ID to be registered
Post successful registration of the Email, the Member would get soft copy of the Postal Ballot Notice and the procedure for Remote E-Voting along withthe User ID and Password to enable Remote e-voting for this Postal Ballot.
b) It is clarified that for permanent registration of Email address, Members are required to register their Email addresses in respect of Electronicholdings with their concerned Depository Participant(s) & in respect of Physical holdings with the Company’s Registrar & Share Transfer Agent- MCS Share Transfer Agent Ltd., F-65, 1st Floor, Okhla Industrial Area, Phase - I, New Delhi- 110 020 Tel.: 011- 41406149-52 Fax No.: 011-41709881 E-mail: [email protected] by following Due Procedure.
A person whose name appears in the Register of Members/Beneficial Owners as on Cut-Off which is Friday, 8 May 2020 only shall be entitled to voteon the Resolutions proposed to be passed by Remote E-Voting.
The Voting Rights of Members shall be in proportion to their Shares of the Paid Up Equity Share Capital as on the Cut Off.
A person who is not a Member as on Cut Off date should treat this Postal Ballot Notice for information purpose only.
The Company has engaged the services of Central Depository Services (India) Limited (CDSL) for providing Remote E-Voting facility to all theShareholders of the Company.
Shareholders are requested to note that the Remote E-Voting shall commence from Tuesday, 19 May 2020 from 09:00 AM (IST) and shall end onWednesday, 17 June 2020 at 5:00 PM (IST).
The E Voting Module shall be disabled by CDSL for Electronic Voting thereafter at 5:00 PM (IST) on Wednesday, 17 June 2020.
Once the Vote on the Resolution(s) is casted by a Member the Member shall not be allowed to modify it subsequently.
The Company has appointed Mr. Ashish O. Lalpuria, Practicing Company Secretary (CP No. 11155, FCS: 9381), Proprietor M/s. Ashish O. Lalpuria& Co., Practising Company Secretaries as Scrutinizer for conducting the Postal Ballot Remote E Voting process in a fair and transparent manner.
The Postal Ballot Notice of the Company will also be available on the Investors Section of the Website of the Company at https://www.minosha.in/and in the Website of Central Depository Services (India) Limited (CDSL) at www.evotingindia.com.
Members who does not receive the Notice may download the same from the Website of the Company https://www.minosha.in/ or from the Websiteof CDSL www.evotingindia.com or may write to the Company at [email protected] or contact the Company Secretary at 7th Floor,Tower ‘B’, Windsor IT Park, A-1, Sector 125, Expressway, Noida, Uttar Pradesh – 201 301, Telephone Number: +91-120-4582900 or write to RTA/STA of the Company MCS Share Transfer Agent Limited, F-65, First Floor, Okhla Industrial Estate, Phase I, New Delhi – 110020 [email protected], Telephone Numbers: +91-011-4140 6149-52, Fax Number: +91-011-4170 9881
The result of the Postal Ballot will be announced on Friday, 19 June 2020 on or before 4:00 P.M. (IST).
Postal Ballot results will also be displayed at the Registered and Corporate Offices of the Company provided the ongoing Lockdown is lifted.
The Resolutions, if passed by the requisite majority shall be deemed to have been passed on the last date specified by the Company for Remote EVoting which is Wednesday, 17 June 2020.
The result of the Postal Ballot will be available on the Website of Electronic Voting Platform provider - CDSL at www.evotingindia.com and on theWebsite of the Company at https://www.minosha.in/
In case you have any grievance, queries or issues regarding Remote E-Voting, you may refer the Frequently Asked Questions (“FAQs”) and E-votingManual available at www.evotingindia.com under help section or you may contact Mr. Rakesh Dalvi, Manager, CDSL at `A’ Wing, 25th Floor,Marathon Futurex, Mafatlal Mills Compounds, NM Joshi Marg, Lower Parel (E), Mumbai – 400 013, Maharashtra or at Toll free Number1800225533 or you may write an email to [email protected]
Members alternatively can also get in touch with the RTA/STA of the Company at [email protected] or the Company [email protected]
The concern/query of the Member shall be addressed forthwith.
For MINOSHA INDIA LIMITED(Formerly Ricoh India Limited)
Manish SehgalCompany Secretary
FE BUREAUMumbai, May 17
PRIVATE EQUITY MAJORGeneralAtlanticwill pick up a1.34% stake in Jio Platformsforcloseto`6,600crore($875million),makingthisitslargestinvestment inIndia.Themovewill put Reliance Industries(RIL)onroadtobecomingdebtfree this year. RIL's net debtcurrently stands at `1.6 lakhcrore.Inaddition,thedeal fur-ther repositions Jio Platformsasa technologycompany.
ThedealalsoplacesJiointheelite company of Airbnb,Alibaba, Ant Financial, Box,
ByteDance, Facebook, Slack,Snapchat,Uberandotherglobaltechnologyleaders,whereGen-eralAtlantichas invested.
In less than four weeks,togetherwith the $5.8 billioninfusion by Facebook(announced onApril 21), andSilver Lake at $750 million(announced on May 4), VistaEquityPartners at $1.5 billion(announcedonMay8),GeneralAtlantic’s investment nowtakestheequityinflowinto JioPlatforms to $8.82 billion(`67,194.75 crore) and totalequitysale tonearly15%.
General Atlantic infusion,which is on similar lines asVistaandSilverLake,valuesJioPlatformsatanequityvalueof`4.91 lakhcrore,a12.5%pre-mium to valuation of `4.62lakh crore post the Facebookinvestment. Jio Platformsenterprise value is `5.16 lakhcrore.The investmentwill fur-ther help in pegging equityvalueof Jio Platformsandalsoimprove the cash flows, thus,
accelerating the company’sdeleveraging initiative, saidanalysts atAxisCapital.
Global investors of differ-enthuesarelookingatJioPlat-forms as a long-term invest-ment because it offers the
opportunity of providing ahost of digital services to thesecondmost populated coun-try in theworldwith a uniquetechnologiesandplatforms.
Of course the money willcome in handy. AlthoughReliance Jio’s operating cashflows jumped 149%year-on-year in FY20, thanks to a bigjump in the operating profitsand lower working capitalinvestments,thehighercapexof`67,200croreresultedinaneg-ative free cash flowof`50,700crore.Over the past fiveyears,RelianceJiohasreportedaneg-ative free cash flowof $24bil-lion,analystsatJefferiesnoted.
Moreover, analysts at JPMorganpointedout thatRIL’sorganic free cash flowgenera-tion for FY21 could beimpacted and if the reportedcapex continues to be in therange of `60,000-80,000crore,itwouldbeFCF-negativeagain inFY21E.
The rise in Jio’sARPU (aver-age revenue per user) during
Q4FY20waslacklustre,analystssaiddespitethefairlysharp14-53% hike in tariffs in earlyDecember.However, the addi-tiontonetsubscriptionswasup18%at17million,allayingcon-cerns that thediscipline in tar-iffsmightnotsustain.Thelowerlevel of churn, analysts at Jef-feriesnoted reflect Jio’s 7-20%discounttotariffsofBhartiAir-tel’s,evenafterthehikes.
The RIL management hassaiditwouldliketobedebt-freeby 2020. Analysts at MorganStanley said that the companycontinuestodeleverageitsbal-ancesheetviastakesalesinsub-sidiaries,rightsissuesandslow-ing down new investment.Moody’s Investors Service hasobserved that including therecentlyannouncedrightsissue($7billion)andtheinvestmentsbySilverLakeandFacebook,RILhas announced initiatives thatcould reducenetdebtbyabout$13.6billionfromreportednetdebt of $21.4 billion as onMarch31,2020.
RIL transactions announced
Facebook-Jio
(` crore)
Rightsissue
SilverLake-Jio
Vista-Jio
GeneralAtlantic-Jio
BP-FuelRetailing
*In the
pipeline
43,574
53,125*
5,656
11,367
6,598.38
7,000*
Themovewill putRILon road tobecoming debt-freethis year.RIL’s netdebt currentlystands at `1.6L cr
FE BUREAUNewDelhi, May 17
WITH THE GOVERN-MENT notifying theGST-related changesmade in the FinanceAct, 2020, the recentDelhi high court judg-mentallowingtaxpay-erstill June30toclaimthe transitional creditwouldbenullified.TheFinanceAct,earlierthisyear,hadamendedrel-evant sections of theCGSTAct,whichwouldcome into effect fromMonday.
Earlier thismonth,the Delhi high courthad allowed taxpayersregistered under GSTto claim accumulatedCENVAT credit frompre-GST regime tillJune 30, 2020, andnoted that the benefitof transitional creditwill be applicable forthree years (sincelaunch of GST on July1, 2017) which is theperiod mentioned inthe limitationAct.
Under the GSTAct,taxpayerswereallowedto carry forward inputtax credits fromexciseand service tax regimebyfilingTRAN-1form.Although, the originaldeadline expired inSeptember 2017, thegovernment grantedseveral extensions tillDecember 27, 2017.Further,taxpayerswhocouldn’t file the claimdue to technical glitchin the system wereallowed to do so tillMarch31,2020.
“This retrospectiveamendment needs tobe challenged atappropriate time.There is no stayon theDelhi high court orderand hence the taxpay-erswhohavetakenthebenefit of the court’sorderbeforethedateof
the notification are inclear safe zone,” saidAbhishek A Rastogi,partner at Khaitan &Co,who argued for thethe lead petition onthis issue. He addedthat the amendmentwill have to be testedon the constitutionalvalidity as any retro-spective amendmentisafterthecourtorder.
While the rule 117under the GST Actmandated a deadlineforclaimingthecredit,taxpayers have arguedin court that input taxcredit was a right andnot a taxpayer conces-sion, which made adeadlineultravires.
Rajat Mohan,senior partner atAMRG & Associatessaid that the highcourt’s decision wasbased on the fact thedeadline for claimingtransitional credit isderived fromrules buthadno standing in thelaw as such.He addedthatwith this amend-ment that particularground for ruling hasbeendiluted.
JigarDoshi, found-ing partner at TMSLsaid:“Theamendmentmay bring the time-limitissueforclaimingCENVAT credit to restfromGST lawperspec-tive. However, legalchallengesontheothergroundsofcreditbeingsubstantive right andproceduraltimelinesorlapsescannotrestrictacompany to claim thecreditandaswellover-allLimitationActbeingapplicabletosuchcaseswill continue.”
Govt notifies GST lawchanges, lack of clarityon transitional claims
GeneralAtlantic to invest about`6,600 crore in Jio Platforms
Ahmedabad
COMPANIES 5FINANCIALEXPRESS
WWW.FINANCIALEXPRESS.COM MONDAY, MAY 18, 2020
FORM B-RAREVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2020
(AUDITED) (Miscellaneous Business)`000
S.No ParticularsFor the YearEnded 31stMarch 2020
For the YearEnded 31stMarch 2019
1 Premiums earned (Net) 50,34,357 39,25,173
2 Profit/ (Loss) on sale/redemption of Investments - -
(b) Profit on sale of investments 86,018 11,649
Less: Loss on sale of investments - -
3 Others
(a) Interest Income - -
(b) Excess provision written back - -
(c) Contribution from Shareholders Funds towards Excess EoM 14,83,229 -
4 Interest, Dividend & Rent – Gross 2,47,225 2,36,818
TOTAL (A) 68,50,829 41,73,640
1 Claims Incurred (Net) 31,03,170 24,31,392
2 Commission 6,30,251 5,93,975
3 Operating Expenses related to Insurance Business 28,81,132 28,38,814
4 Premium Deficiency - -
TOTAL (B) 66,14,553 58,64,181
Operating Proit/(Loss) from Fire/Marine/Miscellaneous Business C= (A - B)
2,36,276 (16,90,541)
APPROPRIATIONS
Transfer to Shareholders’ Account 2,36,276 (16,90,541)
Transfer to Catastrophe Reserve - -
Transfer to Other Reserves - -
TOTAL (C) 2,36,276 (16,90,541)
- -
-
(16,90,541)2,36,276
APPROPRIATIONS
(16,90,541)2,36,276
- -4
28,38,81428,81,1323
5,93,9756,30,2512
24,31,39231,03,1701
2,36,818
14,83,229
-
-(a) Interest Income
-
86,018
-2
39,25,17350,34,3571
FORM B-PLPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED
31ST MARCH 2020 (AUDITED) (Miscellaneous Business)`000
S.No Particulars
For the Year
Ended 31stMarch 2020
For the YearEnded 31stMarch 2019
1 OPERATING PROFIT/(LOSS)
(a) Fire Insurance - -
(b) Marine Insurance - -
(c ) Miscellaneous Insurance 2,36,276 (16,90,541)
2 INCOME FROM INVESTMENTS - -
(a) Interest, Dividend & Rent – Gross 1,26,608 1,34,279
(b) Profit on sale of investments 49,320 8,259
Less: Loss on sale of investments - -
3 OTHER INCOME - -
TOTAL (A) 4,12,204 (15,48,003)
4 PROVISIONS (Other than taxation)
(a) For diminution in the value of Investments 1,89,695 -
(b) For doubtful debts 4,344 2,984
(c) Others - -
5 OTHER EXPENSES
(a) Expenses other than those related to Insurance Business - -
Personnel Cost 28,582 56,712
Interest & Bank Charges 230 199
Share Issue Expenses (Stamp Duty & Franking) 1,420 2,317
Expenses related to issuance of Debentures - -
Interest on Non-convertible Debentures 38,700 38,700
Miscellaneous Expenses 3,147 5,115
Contribution to policyholders Funds towards Excess Expense ofManagement
14,83,229 -
(b) Bad debts written of - -
(c) Others - -
TOTAL (B) 17,49,347 1,06,027
Profit / (Loss) Before Tax (13,37,143) (16,54,030)
Provision for Taxation - -
Profit / (Loss) After Tax (13,37,143) (16,54,030)
APPROPRIATIONS
(a) Interim dividends paid during the year - -
(b) Proposed final dividend - -
(c) Dividend distribution tax - -
(d) Transfer to any Reserves or Other Accounts - -
Balance of profit/ (loss) brought forward from previous year (75,40,275) (58,86,245)
Balance carried forward to Balance Sheet (88,77,418) (75,40,275)
Notes:
1Ratios are computed as per definitions laid down by IRDA Master circular dated October 5, 2012 and Corrigendum onMaster circular dated July 3, 2013.
2 Previous year figures are re-grouped/re-classified wherever necessary to conform to the current year classification.
The above financial results have been approved by the Board of Directors at its meeting held on May 05, 2020.
4 The financial Statement are audited by the Joint Statutory Auditors.4
3
2
1
(58,86,245)(75,40,275)
-
-
-
-
(16,54,030)(13,37,143)
-
(16,54,030)(13,37,143)
- -
-
14,83,229Management
5,1153,147
38,700
-
2,3171,420
199
56,71228,582
-
-
2,9844,344
1,89,695
4
- -
-
8,25949,320
1,34,2791,26,608
-2
(16,90,541)2,36,276
-
-
1
FORM B-BS BALANCE SHEET AS AT 31ST MARCH 2020 (AUDITED) `000
ParticularsAs at 31st
March 2020
As at 31st
March 2019
SOURCES OF FUNDS
SHARE CAPITAL 72,89,022 59,08,630
RESERVES AND SURPLUS 32,98,637 32,71,040
FAIR VALUE CHANGE ACCOUNT
FAIR VALUE CHANGE ACCOUNT - SHAREHOLDER 422 22
FAIR VALUE CHANGE ACCOUNT - POLICYHOLDER 230 320
BORROWINGS 4,30,000 4,30,000
TOTAL 1,10,18,311 96,10,012
APPLICATION OF FUNDS
SHAREHOLDER'S INVESTMENTS 21,85,023 19,08,653
POLICYHOLDER'S INVESTMENTS 38,68,095 34,51,423
LOANS - -
FIXED ASSETS 2,47,987 86,465
CURRENT ASSETS
CASH AND BANK BALANCES 1,64,319 2,92,230
ADVANCES AND OTHER ASSETS 3,98,147 3,59,517
Sub-Total (A) 5,62,466 6,51,747
CURRENT LIABILITIES 18,82,716 16,62,277
PROVISIONS 28,39,962 23,66,274
Sub-Total (B) 47,22,678 40,28,551
NET CURRENT ASSETS (C) = (A - B) (41,60,212) (33,76,804)
MISCELLANEOUS EXPENDITURE (to the extent not written of or adjusted) - -
DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT 88,77,418 75,40,275
TOTAL 1,10,18,311 96,10,012
75,40,27588,77,418
-
23,66,27428,39,962PROVISIONS
16,62,27718,82,716
3,59,5173,98,147ADVANCES AND OTHER ASSETS
2,92,2301,64,319
2,47,987
-LOANS
34,51,423
19,08,65321,85,023
4,30,0004,30,000BORROWINGS
320230
22422
32,71,04032,98,637RESERVES AND SURPLUS
59,08,63072,89,022
ANALYTICAL RATIOS
Performance Ratios As at 31st March 2020 As at 31st March 2019
Health PA Health PA
Gross Direct Premium Growth Rate 21% -48% 44% -23%
Gross Direct Premium to Net Worth Ratio 3.32 0.05 2.86 0.09
Growth Rate of Net Worth 4% 66%
Net Retention Ratio 95% 94% 95% 90%
Net Commission Ratio 12% 9% 13% 13%
Expenses of Management to Gross Direct PremiumRatio
62% 72%
Expenses of Management to Net Written PremiumRatio
65% 76%
Net Incurred Claims to Net Earned Premium 62% 62%
Combined Ratio 126% 137%
Technical Reserves to Net Premium Ratio 0.62 0.61
Underwriting Balance Ratio -0.31 -0.49
Operating Profit Ratio -25% -43%
Liquid Assets to Liability Ratio 0.41 0.51
Net Earnings Ratio -24% -36%
Return on Net Worth Ratio -78% -101%
Available Solvency Margin (ASM) to Required SolvencyMargin (RSM) ratio
1.90 2.23
NPA Ratio- -
NPA Ratio
2.231.90
-78%
-24%
0.510.41
-25%
-0.31
0.610.62
137%126%
62%62%
76%65%Ratio
72%62%Ratio
13%13%9%12%
95%94%
66%4%
0.092.860.053.32
-48% 44%21%
E-commfirmsmayresumedeliveryof non-essential itemsFE BUREAUNewDelhi, May 17
E-COMMERCE COMPANIESLIKEAmazonandFlipkartmaynow be able to sell non-essen-tials in designated red zonesbarring the containmentareas, thereby starting fulloperations.
Theguidelinesissuedbythe
ministryofhomeaffairs(MHA)onSundaysaid‘allotheractivi-ties will be permitted, exceptthose which are specificallyprohibited. However, in con-tainment zones,only essentialactivitiesshallbeallowed’.
“Inamajorrelief toe-com-merce operators, the govern-ment has substantiallyrelaxed the curbs on delivery
of non-essential items by e-commerce players by nowpermitting all activities apartfrom those specifically pro-hibitedtobeundertakenevenin red zones (which was notpermitted earlier) except incontainmentzones,”saidAtulPandey, partner at Khaitan &Co. In addition, as a majordecentralizing measure,
power has now been vestedwith the local state govern-ment to decide the delin-eation of zones. However, thesame will be as per the guide-linesprescribedbythecentralgovernment,Pandeyadded.
E-commerce companieshad so far been allowed to sellnon-essentials in green andorange zones only. The firms
were restricted to selling onlyessentials intheredzones.
An executive at one of thetop e-commerce firms con-firmed that online companiescan deliver non-essentials inred zones as per the latestguidelines.However,somesaidstate governments may putrestrictions.
“At Snapdeal,we are ready
andequippedtonowstartserv-ingcustomersallacrossIndia-inred,greenandorangezones-byprovidingthemaccesstotheentire selection of millions ofproducts. This is also themoment thatwill enable lakhsof medium and small onlinesellers to start rebuilding theirbusinesses as they serve theneeds of users in cities and
townsacrossIndia,”acompanyspokespersonsaid.
“Wethankthegovernmentfor taking the decision forallowing the delivery of non-essentials in red zones acrossthecountry.Thismovewillhelpusdelivertomostof themetrocitieswhichpresentlyfallinthered zones. The government'sdecisionwill alsohelp inopen-
ing up supplies of consumerelectronics from warehouseswhichareintheredzones,”saidSrinivas Mothey, senior vice-presidentatPaytmMall.
In the coming week,Mothey hopes for more relax-ations in the interstate move-mentofnon-essentialgoodssothat e-commerce activityscalesup.
Ahmedabad
MONDAY, MAY 18, 2020
FINANCIALEXPRESS6 WWW.FINANCIALEXPRESS.COM
❝ ❝
MEANINGFULRELIEFNirmala Sitharaman, on Rahul Gandhi meeting migrants
Insteadofwasting the timeofmigrants and sittingwith
them,walk alongwith themandcarry their suitcase. In
Congress-ruled states, request formore trains so that
moremigrants can reachhome
THE MODI GOVERNMENTdeserves compliments forfinallybitingthebulletandusheringreformsinIndia’sagri-marketing system. If
the final print of the proposed legalchanges followsthespirit inwhichthefinanceministerannouncedherpack-age for farmers, this can go a long wayin building efficient value chains,ensuring better prices for farmers, aswellaslowerpricesforconsumers,withimproved quality.
The FM’s package had 11 majorpoints,ofwhicheightrelatedtomiscel-laneous items ranging from `1 lakhcrore for building agriculture infra-structureto`500croreforbeekeeping,or another `500 crore to go from TOP(tomatoes,onions,potatoes) to TOTAL(allfruitsandvegetables).Theyareallinthe right direction,but we do not havethe details of howtheywill unfold,andwhat impact theywill have.Most gov-ernmentschemesinthepast,beitdou-blingfarmers’incomesby2022orcom-pletion of 99 irrigation projects by2019, have a success rate of less than50%. So, I am not very much enam-ouredof thesefirsteightpoints.
What excites me are the last threepointsofherspeech,whichrelateto (a)amendingtheEssentialCommoditiesAct (ECA) of 1955; (b) bringing a cen-tral legislationtoallowfarmers toselltheir produce to anyone, outside theAPMCmandiyard,alongwithbarrier-free interstate trade; (c) creating alegal framework forcontract farmingwhere the buyer can assure a price tothe farmer at the time of sowingher/his crop.Let me explain each oneof these, and why I consider thesegame changers.
First, the ECA of 1955 actually hasits roots in Defence of India Rules of1943,when India was facing famineand effects of theSecondWorldWar.It
was re-coined,with some changes, in1955astheECA.Itwasscarcity-eraleg-islation.Bythemid-1960s,hitbyback-to-backdroughts,Indiahadtofallbackon PL480 importsofwheat fromUSA,and the countrywas labelled a“ship tomouth” economy.Today, India is thelargestexporterofriceintheworld,andthe second-largest producer of bothwheat and rice, after China. Our gra-naries are overflowing. But, our legalframework is of the 1950s,which dis-couragesprivatesectorinvestmentsinstorage as the ECAcan put stock limitson anytrader,processor,orexporteratthe drop of a hat.As a result, storagefacilities in the country lack badly;when a farmer brings their produce tothemarketafterharvest,there isoftenaglutandpricesplummet,hurtingthefarmers.Intheleanseason,pricesstartflaring up for the consumers. So,bothloseduetothelackofstoragefacilities.This amendment, if done in its truespirit,will remove this roadblock andhelp both farmers and consumerswhile bringing relative stability inprices—as also savings on largewastages of agri-produce that occurbecauseofthelackofstoragefacilities.
Second,theproposedcentral lawtoallowfarmers tosell toanyoneoutsideAPMC yards will bring greater compe-tition amongst buyers, lower mandifee, arhatiya commission, and othercesses that many state governmentshavebeenimposinginAPMCmarkets.Our farmers suffer more in the mar-
ketingoftheirproducethaninproduc-ing it. APMC markets have becomemonopsonistic,withhighintermedia-tion costs.This law will open up morechoices forthefarmers,andhelpthemget better prices. So, farmers’ incomesshouldimprove.Creatingabarrier-freeinterstatetradeandmovementofagri-goods will lead to betterspatial integration ofprices, helping farmersfrom regions of surplusgrowth get better pricesand consumers inregionsofdeficitproducelowerprices.Indiawillbeone common market foragri-produce, finally!Mamta didi can nolonger stop the move-ment of potatoes fromWestBengaltoOdisha,asshe did some time back.
Third, the legal environment forcontract farming,with assurance of aprice to the farmerat the time of sow-ingwill help them take cropping deci-sion based on forward prices. Nor-mally, our farmers look back and seewhatpriceswere lastyear,basingtheirsowingdecisionsonthese.It leads toatypical cobweb problem of boom andbust. The new system will minimisetheirmarket risk.
However, one must bring in somesupplementary notes for optimalresults. Big buyers like processors,exporters, organised retailers, etc,
going to individual farmers, who arevery small, is not a very efficientproposition.Theyneedtocreatescale,and for that, building Farmer Pro-ducer Organisations (FPOs) based onlocal commodity interests, is a must.Thiswillhelpensureuniformquality,and lower transaction costs, alongwith improving bargaining power offarmers vis-à-vis large buyers.NABARD has to ensure that all FPOsget their working capital at a 7%interest rate—the rate that the farm-ers pay on their crop loans.Currently,most of them depend on micro-finance institutions, and get loans atinterest rates of 18-22%.This makesthe whole business high-cost.
Another thing towatch is the fine print ofthe legislation. I hear, inthe corridors of power,talk that stocking limitsunder the ECA can bereimposed if prices ofperishable itemsgoupby100%, and that of non-perishables by 50%. So,would the governmentimposestockinglimitsononions if the price goesfrom, say, `22/kg,whichis the price right now in
Safal kiosks, to `44/kg after a month?Doing sowill be sheerstupidityon thepartof thegovernment.Itwillundoallthe reforms of the ECA. One needs tosee howmuch of an‘extra burden’thisprice increase inflicts on the overallfood budget of a household.
In conclusion, the government hassurely shown willingness to walk theright path and deserves compliments.Itcanbeaharbingerofmajorchangeinagri-marketing, a 1991 moment ofeconomicreformsforagriculture!But,before one celebrates it, let us wait forthe fine print to come.
● FROM PLATETO PLOUGHINDIA’S NEWAGRI-MARKETINGREFORMSCOULDBETHE 1991-MOMENTFORAGRICULTURE,
BUTTHEYNEEDSUPPLEMENTARYACTION FOROPTIMALRESULTS
ASHOKGULATI
InfosysChair Professor forAgriculture, ICRIERViewsare personal
AMARPATNAIK& SARTHAKDAS
Patnaik is a Member of Parliament, Rajya Sabha, fromOdisha & Dasworks in the EVsector.Views are personal
IT IS NO secret that the pandemic hashit the sectors that were reeling themost.Aprime example is the automo-bile sector,which was experiencing aslowdown well before the virus hitIndian shores.The industry had beenbattling against a host of issues—decliningconsumerdemand,difficultyintransitioningintoBS-VItechnology,extinguishing inventories of left-overBS-IVvehicles,andcreditcrunchintheNBFCsector.Post-lockdown,itwillhavetodealwithacompletelynewenviron-ment,rightfrommanufacturingcapa-bilities and inventory management toemergency response mechanisms.Couldtheelectricvehicle(EV)segmentbecome a permanent and significantpart of this neworder?
Global forecastsToday, studies from research uni-
versitiesclaimthatby2050,everysec-ond car produced globally would beelectrically powered.While marketinglessonsteachustheimportanceofcon-sumer acceptance for the successfuladoption of any concept, research byDeloitte Global Automotive says thatover 50% of the consumers are stillunclearabout the safetyof the batteryandtheavailabilityofadequatecharg-ing stations. Surprisingly, more thantwo-thirds of the consumers surveyedmentioned that their biggest fearis sharing the highway with heavycommercial vehicles driving inautonomousmode.But,whathasbeenseen is that despite high resistance tothe introduction of CNG vehicles dur-ing the mid-1990s, consumersaccepted the technology widely, somuchsothatafewbigbrandsnowhavetheirfactory-producedMUVsandSUVsretrofittedwith CNG-run engines.
Indian scenarioThe EV industry in India managed
to post a decent 20% increase in salesin FY20 compared to FY19.Out of the156,000unitsthattheindustrysoldinFY20, the bulk came from the electric
two-wheelers segment.The industrybelievesthatgoingforward,thefastestgrowth would come from the e-rick-shaws and e-autos segment.The factthatthepresidentoftheUSwasferriedto the Taj Mahal by e-vehicles has notgone unnoticed byindustryplayers!
However, the uptake of this seg-menthasnotbeenasrapidasexpected,despite a slew of measures and incen-tives provided by the government.Fromataxpointofview,theGSTcoun-cil reduced the rates from 12% to 5%for vehicles, and from 18% to 5% forvehicle chargers. TheDelhi 2019 e-VehiclePolicy aims at introduc-ing more than 35,000 e-vehicles, and addingcapacityof250chargingand battery-swappingstations. It envisions theadoption of EVs suchthat they constitute atleast 25% of all newvehicle registrations by2024.TheNationalElec-tric Mobility Missionplan2020(NEMP)isalsoaligned similarly. TheKerala government hasbroughtinamajorpolicyshift,instructingall itsdepartmentstopurchaseonlye-vehiclesfromthenextfinancialyear.
Schemes like FAME (Faster Adop-tion and Manufacturing of Hybridand Electric Vehicles) have certainlyincentivised localmanufacturingandthe growth of domestic technology.Looking at how other countries arekeen to take their manufacturing outof China and are looking for alterna-tivedestinations,it isparamountthatIndiastepsuptoofferthemanattrac-tive ecosystem in this sector in thepost-Covid world. As global supplychainshavebeendisruptedduetothecrisis,therequirementsof lithium-ioncells will be addressed by the upcom-ing 40 GWH of installed Li-ion capac-ity plants in India, which itself is a
great opportunity.
Possibilities for growthin demand
Going forward, there are a lot ofgrowth drivers for this industry in thenewnormal.
Firstly, its commercial advantagesshould lead to a surge in the usage of e-rickshaws and e-carts in short distancelogistics,and last-mile connectivity inthe e-commerce segment.Second,sur-veys find thatyoungerconsumers,par-ticularlyfemales,morewillingtoinvest
in EVs than older genera-tion. As India is over-whelmingly young, thispresentsabrightfutureforEVmanufacturers.
Given that personalmobilityisgoingtopickupagain post-Covid, thereshould be a further policypush (beyond what hasalreadybeenannouncedinsuccessive budgets) for avisible shift towardsincreasedEVadoption,par-ticularly since consumersare seeingthe benefits of acleaner environment.Banks should devise inno-
vative credit schemes (now that reporate is low) to push for such a shift.Simultaneously,thegovernmentshouldfocus on augmenting the charginginfrastructureandhaveinplaceascrap-pagepolicythatdrivesnew-vehiclesale.In the longer term,the existing brandswill need to go formore indigenisationto make the vehicles more affordableand maintenance easier, with quickavailability of parts (no dependence onimport).This would ensure better ser-vices to customers; this,as of now, is apainpoint.Besides,wirelessandon-the-go charging are the new technologiescomingupthatmightboostsales.
EVsare theonlywaytodecarbonisethetransportsectorandachieveIndia’sambitious target of complete greenmobilityby2030.
Actualising the zerohunger goalAs per the Food andAgricultureOrganization, 194.4 million peopleare undernourished in India, i.e.,14.5% of the population. In spite ofthe sustainable development goalof zero hunger by 2030, withvarious schemes in operation,there is little implementation tosolve this crisis even in the face ofsurplus agriculture produce in thecountry. Provision of food producerich in calories and micronutrientsis an absolute linchpin to progress,as well as to building a holisticnation, with nutrition as its corefoundation. That said, bridging thegap between a rising populationand unmet hunger is crucial, too.Establishing the optimalrelationship of agriculture producewith the annual requirement anddistribution to all segments ofthe society is the desiredequilibrium point.—Aayushi Jain, Bhopal
Agri-solutionsThe Covid-19 pandemic hascaused labourers to loseemployment, and forced them togo back to their native places. TheCentre has announced a `20 lakhcrore relief package,which alsoincludes doubling the number ofemployment days provided underMGNREGA. Themove iswelcome,but the agony is that the schemehas failed to provide the already-existing 100 days employment toits registeredworkers even after adecade of its inception. Thepresent announcement seems tobe on-paper only as the developedstates don’t havemuchwork to bedone under this scheme. Thegovernment must attach theMGNREGAworkforcewith theagriculture sector to provideemployment at the native place.Thiswill surely help theagriculturally forward states likePunjab and Haryana in the sowingof paddy, and also motivatefarmers to look for cropdiversification alternatives.—Navneet Seth, Dhuri
In the post-Covid world, electricvehicles will be key not only tobreathing new life into theautomotive sector but also todecarbonising it
LETTERSTOTHE EDITOR
Looking at howother countries arekeen to take theirmanufacturing outof China, it isparamount thatIndia offers EV
maker an attractiveecosystem in thepost-Covidworld
Unshackling farmersto push agri growth
Reviving the automobile sector
The amendmentswill benefit bothfarmers and
comsumers, whilebringing stability inprices and savingsonwastage ofagri-produce
●Write to us at [email protected]
Opinion
TourTRAPPINGSThe Army must offer more than “military experience”
to make the tour-of-duty route attractive
THEARMY’S PROPOSALofa“TourofDuty”—voluntarythree-yearenlist-ment of youth in the Army,with the usual selection criteria applying—soundsappealing.ItwillmeandrasticallylowercostsfortheArmy,evenasthe shortage of personnel is addressed.By theArmy’s own reported reck-
oning,the cost incurred on a person joining through the new route will be `80-85lakh,againstthe`5-6.8croreincurredonaShortServiceCommissionentrant.Tour-of-dutyentrantswill getanexperienceof life in thearmedforces,apart fromtrain-inginmanyskills—anddiscipline—thatwouldhelpthemintheirlifeafter.But,whilethis,combinedwithahandsomeincomeoverthreeyearsatatimelikenow,isnoth-ingtosneezeat,theproposal’sattractivenessfortheyouthendshere.
Tomorrow’s job marketwill be looking at highly-skilled persons and super spe-cialists.Doesashortstintinthearmyaftergraduation,then,addanythingthatcouldmeansmoothfuturegrowth?AgigintheArmymightsignalgreaterdisciplineinexe-cutingapieceofwork,butthereisnothingtosuggestthatitwillequiponetoexecutethat piece ofwork in the first place—thatwill have to come from a different sourcethantheArmy.ThereisnodoubtthattheArmyislookingatbringingdownpersonnelcosts,especiallyatatimewhenmostdevelopednationsarefocusingonmachine-ledwarfareandtheArmy’spensionstructuremeansamassivefinancialburden.But,ifitistoattractyouth,ithastosweetenthedealforthem.
THENUMBERSTELL thestory.But,the`20lakhcrore,thesizeof thegov-ernment’s package to provide both relief to the vulnerable sections andalsohelp jumpstarttheeconomy,isn’tatallwhat itpromises.Althoughastriking amount, the package doesn’t pack enough of a punch.Where
economistsprescribealargishfiscaldoseof`20lakhcrore,orroughly10%ofGDP,theactualinjectionhasbeenafractionofthat,at0.8%ofGDP.Tobesure,thefinan-cial support extended via other means—credit guarantees for NBFCs, loans forMSMEs,credit for farmers and streetvendors—will contribute.But as banks turneven more risk-averse, it is unlikely the cash crisis caused by the Covid 19 pan-demicwill be resolved.
ThecontractionintheeconomyinFY21,nowestimatedatminus5-6%,couldbesharperasdemanddoesadeepdive.Thebiggestworrythoughisthattheweak-eningeconomy,togetherwithmeasureslikeputtingtheIBConholdforayearandleaving defaults out of its purview,will deal the banking system a body blow.Thesovereign mayhave saved itself a fewblushes,but ratings agencies are unlikelytobe lenientwith the bulk of companies and NBFCs as theyslip into a debt trap,thesupport fromtargeted liquiditymeasuresnotwithstanding.Intheabsenceofanycapitalisation commitments, state-owned lenders are expected to remain shy ofbuying assets from NBFCs, or lending tothem, except when the loans are of top-quality;thatwillnothelpweakerbusinessesand NBFCs,and could lead to insolvencies.
Indeed, India’s already fragile financialsectorcouldreelundermountingbaddebtstriggered by the Covid 19 shock.Againstthisbackdrop,thesuspensionofinsolvencyproceedings for one year is troublingbecause every other debtor will claim hisdebt to be ‘Covid-related’ leaving bankersin an unenviable position. Already, thethree-month repayment holiday for termloanswill lead to a spike in NPAs.
FrightenedbytherelaxedIBCnormsthatallow defaults related to Covid 19 not to berecognised as defaults,banks could becomeeven more risk-averse. Consequently, thepartial credit guarantee scheme for PSUbankstobuyinvestment-gradepooledassetsfrom NBFCs from even lower-rated balancesheets might remain a non-starter, thoughthey may be inclined to participate in the`30,000 crore government-guaranteedscheme, where they can buy investment-gradedebtpaperofNBFCs/HFCs/MFIsintheprimaryandsecondarymarkets.
There is no denying corporate balancesheets are strained,but it would be impru-denttoforcebankstolend.Itisalsobesttheybegiventhediscretiontoextendtherepay-ment moratorium beyond three months.Moreover,asmuchas there isaclamourfora one-time restructuring for stressed assets RBI shouldn’t give in; it is critical toknow,atanypointintime,whatthetruevalueoftheassetsinbanks’loanportfoliosareandlet theprovisioningbeginnow.
It ispossibleweakershadowbanks—manyofwhomhaveverybigexposures tocommercialandresidential realestate—willbewipedout.It isalsopossiblebankswill hold back from buying bonds floated by relatively weak state governmentsunless RBI allows these to be held to maturity so there is no capital loss. Indeed,banksmayevenresistdisbursingadditionalloanstoMSMEs,eventhoughtheseareguaranteed by the government, for fear of not being speedily reimbursed fordefaults.Also,thereisvirtuallynofiscalsupportforservicessuchastravel,tourism,hotels and restaurants—whichwill incuroperating costswhile generating nomi-nal revenues.The lenient classification normswill camouflage the stress in thou-sands of the units; manyof themwill go bellyup leading to huge job losses.
Thefact is thestrengthof the`20lakhcrorepackage lies inthe impressiveros-terof reformsacrossagriculture,defence,mining,powerandspace.But,thesepol-icychangeswillattractpatientcapitalonlyoverthe longterm,andthattooif therearenohiddencaveats. Inthenearterm,posttheVodafoneepisode,itisunlikelythattoomanyglobalcorporationswouldbewaitingtoriskcapitalnomatterhowmouth-wateringIndia’smarketis.Eventhepackage’sothermeasures—creatingaffordablerentalaccommodationorinterestsubsidiesforhomeloan—can’thelpimmediately.
Right now,we could see a deceleration in private consumption—which fell tosub-6% in the nine months to December from about 7% in FY19—and this willprecludeanycaseforcreatingextracapacity.TheunfortunatetruthisIndia’sindus-trialists,whowerealreadyshortofequitycapital,willnowbeshortofcashflowsasrevenuesslow.Thatmeansprivatesectorcapexisunlikelytoaccelerateforanotherfiveyears,making itadecadeofweak investmentsata timewhengross fixedcap-ital formation (GFCF) is sub-30% of GDP.
Tobesure,the`4.8lakhcroreofadditionalborrowingsbytheCentreandagoodpart of the `4.28 lakh crore allowed for the states will all help boost demand.Sowill thewelfaremeasuresof`1.7lakhcrore—inroundone—includingdirectcashtransfers and the additional `40,000 crore allocation to MGNREGA. Free food-grains,too,areastimulus.Butallofthisthis is inadequatetosupportthousandsofstruggling businesses and to prevent job losses of an unimaginable number.Thebrunt of the painwill be borne bybanks.
SHOBHANASUBRAMANIAN
On acrash course
Banks will be hurt as defaults rise in a weakeningeconomy; it is the start of NPA 2.0
Feb 1, 2019 Apr 24, 2020
14.43
9.63
9.83Deposit
Credit
Credit and deposit growth(%, y-o-y )
6.67
4
6
8
10
12
14
16
18
16
14
12
10
8
6
4
2
0PSBs
12.7
3.9
2.9
9.3
PVBs FBs All SCBs
SCBs’ GNPA ratios (%)
Source: RBI
Mar ‘17
Mar ‘18
Mar ‘19
Sep ‘19
Ahmedabad
RNI No. GUJENG/2006/22183 Printed and published byHareshkumar K Bhagdev on behalf ofM/s The Indian Express Private Limited and printed at Bhaskar Print Planet, SurveyNo. 148P, Changodar-Bavla Highway, Tal. Sanand, Dist. Ahmedabad and published at 3rd Floor, SambhavHouse, Bodakdev, Ahmedabad-380 015. Phone (Board) : 26872481-82-83, Fax: 079-26873950.
Chairman of the Board - Viveck Goenka,Managing Editor - Sunil Jain, Editor (Ahmedabad): Jyotsna Bhatnagar* (*Responsible for selection of news under the PRBAct ) © Copyright: The Indian Express Private Limited. All rights reserved. Reproduction in anymanner, electronic or otherwise, inwhole or in part, without priorwritten permission is prohibited. The Financial Express®
ABACKLASH TO GLOBALValue Chains (GVCs) seemsimminentintheaftermathofCovid-19.There is an emerg-ing view that global integra-
tionanddependenceonGVCshavemadecountriesmorevulnerabletothespreadofthe disease and to the supply shocks aris-ing from curbs on trade and travel.Thereare statements that had countries beenmore self-reliant, theywould have beenmore resilient.The Covid-19 crisis has certainly
exposed the risksofoverdependenceonaparticularcountryforprocurementofrawmaterials.Evenwhentheviruswaslimitedonly toWuhan,the supplyofActive Phar-maceuticalIngredient(API)hadbecomeacause of concern for the Indian pharma-ceuticals industry.Whenthevirus startedspreading to other countries, includingIndia,heavydependenceonChinaforper-sonal protective equipment and testingkitsaffectedtheirabilitytotest theirpop-ulationstocontainthespreadofvirus.It isironical that the very countrywhere thiscrisisoriginatedhasalsobecomethemainsource country for the essential suppliesneeded to control the pandemic. It, thus,seems justified to question theunbridledenthusiasmwith GVCs and globalisationthatprevailed till recently.Butwould this be the right response?
Wouldcountrieshavefaredbetterintermsof growth,employment andpovertyalle-viation had they taken the path of self-relianceinsteadofallowingtheprinciplesof competitive advantage to play outthrough trade and investment? India’s
experiencebefore1991withamoreinsu-lated economycertainlydoesnot suggestso.On the contrary, theWorld Develop-mentReport2019hasnotedthat regionshaving active participation in GVCs haveseen fasterreduction inpoverty.It would not be correct to fault GVCs
anddependenceontradeforthefailureofnations toprovide fortheirhealth sectorsor for the economic impact of this pan-demic.Acountry’sabilitytowithstandthiscrisis due to a lowerdegree of integrationshouldalsonotbeseenasanendorsementof insulation. In this context, there arethree important lessons fromthis crisis.
◗ First, excessive dependence on any
particular country in a GVC is not desir-able.China’s currentdominance inglobalmanufacturingvalue chains and thecon-straintsthisposesforothercountriesdur-ingthispandemichighlightstheproblem.EvenlargecountriesliketheUSandIndia,which have domestic manufacturingcapabilities,arepronetodisruptionsinthesupply chain as they rely on getting partsand intermediates fromothercountries.But this does notmean that countries
should create entire forward and back-wardlinkagesdomesticallyasitwouldnotbe feasible or cost-effective. Instead, theneedistodistributeactivitiesacrossmorecountries in GVCs.The scope of activities
should also bewidenedwhere possible atdifferent nodes in these GVCs, as a risk-mitigation strategy.Thismeans trading-off scale economies by involving moreplayers inthevaluechainwitheconomiesof scope,or ‘glocalisation’, i.e.mixing dis-persionandlocalintegrationstrategically.
◗The second lesson is the importanceof domestic preparedness and capacity.Any dispersion strategy is contingent oncountries having the capacity to act asadditional nodes and engaging inmoreparts of the value chain.This, in turn, isdependent on theirpolicyand regulatoryenvironment. Countries that invest ininfrastructure, skills, standards, ease of
doing business and social protectionwillnotonlyhavethecapacitytobenefit fromGVCs, but will also be better placed intimesof crisis like thecurrentpandemic.
◗ Third, international coordination,strongmultilateral institutions and col-lective leadership will be even moreimportant in the future. Instead ofwith-drawingfrominstitutions,theneedofthehour is to improve their capacity and togivethemmoreteethinobligingmembernations toabidebyexistingrules.There isalso a need to address unfair and non-transparent trade and investment prac-tices and hidden barriers that distort theoutcomes of integration and create an
uneven playing field. International plat-forms such as theG20 summits, interna-tional development agencies and institu-tionssuchastheWHOandtheWTOmustput greater thrust on playing by the rulesof the game. The current crisis, in part,reflectsthefailuretoaddresstheseissues.Unfortunately, when such enlightenedleadership and coordination is mostneeded, theworld seems to bemoving intheotherdirection.In short, the Covid-19 pandemic is a
wake-upcall forgovernments,theprivatesector and international institutions toshapethefuturecourseofglobaltradeandGVCs.Thepolicyquestionat this junctureis not about whether countries shouldintegrate or not into GVCs, but ratherabout the kind of global integration theyshould pursue. How can they calibratetheirliberalisationstrategiesandGVCpar-ticipation to ensure the desired benefits?How should they support external sectorpolicieswith appropriate domestic poli-cies and preparedness to reduce theadverse impact of an external shock suchas the current crisis? The pandemic alsoposes questions to transnational firmsabout howmuchdependence onGVCs asopposed to localisation is desirable andwhatkindsofGVCstheyshouldbuildorbeapartof in the future.Thiscrisisshouldnotresultinthought-
lessreaction.If itwasthoughtlessglobali-sationinthepast,itshouldn’tbethought-less localisationnow.The risk,however, isthatinapostCovid-19worldthediscourseon globalisation andGVCsmight just getshaped inablackandwhitemanner.
OPINION 7FINANCIALEXPRESS
WWW.FINANCIALEXPRESS.COM MONDAY, MAY 18, 2020
COVID-19
YOGESH SURI &SHARMISTHA SINHASuri is senior adviser, Governance andResearch, and
Sinha is deputy director, NITIAayog.Views are personal
COVID-19 HAS compelledmany towork fromhome.Thisswitchtodigitalwork,enmasse,hasbrought in a change in ourperception ofworkand thewaywe think aboutworking arrange-ments.Newacademicsessionshavebegunand
communicationshave shifted fromin-personclassrooms toliveonlineclasses,newmodesofinstructionhavebeendevel-oped,courtshavegonedigitalwithcasesbeingheardthroughvideoconferencing,officeshaveshiftedtoe-officemode,thereisasurgeindigitalpayments,manymusiciansarestreaminglive performances fromhome.GoogleMeet’s day-over-daygrowthexceeded60%andusageofHangoutssoared.ItisnotonlyGenerationZandAlphawhoareadaptingtothisnewsys-tem,butgiven the smartphonepenetrationevenseniorciti-zensareadaptingtotelemedicine,digitalpayments,etc.Post-Covid-19,asnormalcyreturns,theworldofworkwill
notbethesameagain.Itmaywellbeanopportunitytotrans-formintoadigitally-enabledworkenvironment.It’s time India jumps into thenext innovation line in the
communicationworld.China,aftertheUS,hasboomedinthedigital economy.WeChat,amessaging and payment app, iswidelyused,andBaiduhasemergedasthemostsought-aftersearchengine leavingGoogleatadistantfifth inChina.AppssuchasTikTok,gameslikePUBG,toe-commercesiteslikeClubFactoryareexpandingtheirfootprint,includinginIndia.India,whichboastsofhavingoneofthebestITspecialists
in theworld,canuse thedevelopments in thecloudworld toitsadvantage.WeneedtoreachthenexttechlevelwhereIndiacanbetheleadexporterincommunicationsoftware.Whycan-notwethinkofvideoconferencingsoftwareinlocallanguagesthat canbeusedbyawholesalerorusedat localgovernmentlevels?This requires technology,upskilling and reskilling inanalytics,datamanagementmethods,onlinemodules,invest-mentsandafavourableregulatoryenvironment.India has to enter this sector in a bigway;weneedhigh-
level engagement at the inter-sectionofICT,humanrightsandsurveillance activities.But thistransformation delivers anarray of cybersecurity chal-lenges.With online activities,there are spikes in hacking,cyberscamming, ransomwareattacks,whichneedsstrictalert,strongencryptionandactions.Thereisaneedtoestablishor
strengthen state computeremergencyresponseteams,and
take steps to enhance cybersecurity capacity building andtraining,extending the Information SecurityEducation&Awareness programme, introducing curricula, academia,establishmentofforensicslabs,etc.Thereisacuteshortageofskilled resource persons, research and academic courses inthisarea.GenZcanbetrainedtobespecialistsinTrustworthyInformationSystemsEngineering.Governments have been making forays into usage of
advancedtechnologyingovernance,andIndiaisnodifferent.Digital identities,financial inclusion,digitalpayments,DBT,governmentschemesexpandedusingITandbroadband,dis-tancelearning,e-commerce,etc,havechangedthelivesofpeo-ple.Covid-19hasprovidedamajorboost to these initiatives.Anotherimportantfeaturehasbeentoconnectwithemploy-ees, customers and public using technology.Despite con-straints,all these haveworked fairlywell in these distressedtimes.Peoplehavegotusedtoworkingfromhome,andthisisexpected to continue reducing employee costs in terms ofmaintaining offices.Another aspect of the future ofworkcouldbelowertravelbillsasorganisationswouldpreferonlinemeetings.As regards education,no onewouldhave believeditwas possible to studyand teach onlinewith such alacrity,and this is expected to lead to a sea change.Last but not theleast,therehasbeen increasingconcern towardsemployees,customersandsocietyinthesetimes.While it isunclearwhenthecrisiswill end,therearesigns
itmaycome sooner than later.As andwhen it resumes,onethingisclear,thefutureofworkwillneverbethesameagain.
Unleashing newforms ofwork
It’s an opportunity to transform into adigitally-enabledwork environment
A threat to globalvalue chains?
RUPACHANDA&PRALOKGUPTA
Chanda is RBIChair professor in Economics, IIMBangalore;Gupta is associateprofessor, Centre forWTOStudies, IIFT, Delhi
The current crisis should not result in thoughtless
reaction. If it was thoughtless globalisation in the past, it
should not be thoughtless localisation now
People have gotused toworkingfrom home, andthis is expected tocontinue, reducingemployee costs
MOST HAVE,WITH somejustification, panned thegovernment’s `21-lakh-crore stimulus packagegiventhattheactualbud-
getary outgo is probably a tenth of theamount; the rest is liquidity created byRBI, loans that banks and othergovern-ment-owned financial institutions aresupposedtogive,etc.Most,afterall,wereexpecting the government to hand outdollopsofcashashasbeendoneincoun-tries like theUS.Given how large swathes of business
will have to shut down—especially intourism,hospitality,etc—thedisappoint-mentisunderstandable,butkeepinmindthatdecadesofprofligacyhavemeantthegovernment has very little room formanoeuvre. The combined central andstate fiscaldeficit isalreadyhigh,andwillrise by another3-4%ofGDPdue to theeconomycontractingthisyearastaxescol-lapse and the disinvestment programmegoesforatoss;itcouldcontractinFY22aswell.Thecombinedcentralandstatedebtis already70%ofGDPand can go up tojust short of 80%thisyearwith the gov-ernment borrowing at 6%+,while evennominalGDPislikelytocontract5-6%;ifit doesn’t revive in FY22,a downgrade isnearcertain.This,ofcourse,iswhatmanysaywill happenevennowsince theeffec-tivestimulushasn’tbeenlargeenough;tobe fair, it is difficult to dismiss this argu-ment outright either.There are no easysolutions,onewayoranother.The broader point, though, is that a
5-dayexercise,marathon though itwas,byfinanceministerNirmalaSitharamanisn’t the best way to judgewhether thegovernment’sstimulus—orreforms—areenough.The `3 lakh crore bank loans toMSMEs that the government has guar-anteedisseenasthemostconcretestim-ulus being offered. But, as some haveargued, the loans are unlikely to be aslarge as believed.Even though there is a12-month moratorium on the loans,prudentbankerswillneedtostartprovi-sioning for the loans since a large pro-portion of these will go bad. Logically,banks shouldn’t have to do any provi-sioning since the government haspromised topayup if the loansgobad.Butithastobearealoptimistwhofeels
the governmentwill pay`2 lakh crore tobanks—assumingthatmuchwillgobad—inoneshotattheendof12months.Giventhegovernment’shistoryofrecapitalisingbanks,thebankswillnaturallybereluctantto lend; so, if primeministerModiwantsthe loans togo through,heneeds topushbankstodothis.Moreimportant,heneedsto budget for another`3-4 lakh crore ofbankrecapitalisationearlynextyearsincethe impact of the economic collapse onbankbalancesheets isgoingtobehuge.The `90,000 crore the FM has
promised bankrupt—and recalcitrant—state electricity boards (SEBs)was a realdisappointment since it suggestedbusi-ness-as-usual has already won overreforms.It is truethepowerministerhassaid REC and PFC can withdraw theirloansiftheSEBsdon’tcuttheirlosses,butiftheyarebankruptalready,howdoeshethink theywill repay?TheFMhas linkedpartoftheincreaseintheborrowinglim-itsforstatestotheirelectricityreforms—like raising tariffs, cutting ATC losses,etc—buthowmuchthegovernmentwillholdbacktheincreasedloan-limitsorgetPFC-REC to recall their loans remains tobeseen.Afterall,this is thesamegovern-ment thatgave theSEBs theUDAYpack-age thatyielded littlebywayof reform.Tobefair,theUPA’sfetedbureaucrat-
economistsdidmuchthesame,which iswhy the power sector is in themess it istoday; the same is true of the bankingsectorwhichmatters a lotmore. Ideally,if Modi is serious about reforming thesector, he should let RBI deduct themoney the SEBs owe electricity genera-tors—over`1lakhcrorerightnow—fromthestategovernments’accountwithRBI,where the central government depositsthe states’ share of taxes.The UPA hadcreatedaframeworkforthis,butonlyfor
the dues of PSUs like NTPC; amazingly,though,despite having the ability to askRBItopaytheirdues,PSUslikeNTPChaveallowedSEBdues tobuildup.That,ofcourse,isalsoamajorreason
whyprimeministerModi needs to freeup PSUs; it is impossible to believe a
truly freeNTPCwouldhave allowed theduestopileupwhenithadaviablealter-native available. This brings us to theconvoluted PSU plan that the financeminister spoke of; while some claritywill be available when the policy isannounced, there is a much simpler
solutionthatModineedsto implement,andmoresonow,since it is clearthere isnoway hewill be able to privatise PSUsforquite some time.Modi needs to get Parliament to
amendArticle 12 of the Constitution,toremove PSUs from the ambit ofwhat iscalled ‘instrumentality of state’; this isthe clause that says PSUs have to tendereverything, go by government rules onprocurement,reservation,etc.IfPSUsareto competewith the private sector, thisclause simply has to go as it is this that,primarily,hobblesPSUsevenwhenthereis no political directive to them in termsofwhat they should do. It is due to thisclause that BSNL’s 4G tender has beendelayed by the government.When is thelast time an RJio or Bharti Airtel tenderwas put on hold because a vendor com-plained—asonedidinthecaseofBSNL—that itwas being discriminated against?It is precisely such delays that, in the1990s, resulted in BSNL losing its edge,and it is this that will ensure the just-cleared `70,000 crore revival plan forBSNL-MTNLcomes tonought.There has been a lot of talk recently,
bytheprimeministerandhiscolleagues,of Indiawooingenterprisesthatwanttomove out of China.While some successseems to have been achieved going bytheplans ofmobile phonemanufactur-ers likeApple,keep inmindthatthefirstthingwould-be investorsdo is to lookathowcurrent investors are doing.But, asthis columnhas repeatedlypointedout,fromVodafone to Cairn to TRowe PricetoMonsantotoAmazontoWalmart,andso manymore, government policy hasbeenveryunfriendly,evenhostile; if thisisnotfixed,it isdifficulttoseehowIndiacan make anything of the post-pan-demicworld.Whilebureaucratsareusuallyblamed
for scuttling most things, a lot reallydependsonwhatthepoliticalclasswants.Whyelsewas thePVNarasimhaRaogov-ernmentable tomakesweepingchangesin1991?OrhowdidaVajpayeecoalition-governmentmanage implement a far-reaching telecom package—Vajpayee isthe father of India’s telecom revolution,not theUPAthat came outwith a flawedmodel in 1994—when the politicallypowerful Modi government has beenflounderingoverthisforthelastsixyears?It is early days yet but, by way of
example, it appears the Modi govern-mentisunlikelytoslashexorbitanttele-comleviesthatareresponsibleforkillingthe sector.While the earlier argumentwas that thiswill hurt government rev-enues—even with higher levies, theabsolute amount the government getshas been falling each year—the latestargument is that other industries likeaviationandtourismwill thenwantsim-ilarpackages!The problemwithnot taking correc-
tiveactioninsomanyareasforso longisthat,when something is done, it is seenasafavour;‘howmuchmoredoesindus-try want us to give it?’, is the typicalresponse.Viewing it thisway allows thegovernment to take a call on whichindustry is to be ‘helped’ instead ofhumbly admitting that all that is beingdoneistocorrectahistoricalwrong;this,of course, is what allowed financemin-ister Nirmala Sitharaman to pass off adecision to clear government/PSU duesto industry—estimated at `5 lakh croreby NITI Aayog last year—as part of thepost-Covid stimulus!
Beware thebabu, and thepolitician
The stimulus/reforms package has disappointed
most,but the real issue is how far primeminister
Modi iswilling tomake a breakwith the past to
give a better deal to firms.The FM’s 5-day
package is not the bestway to judge the
commitment to reform,but offers some pointers
● POST-COVID-19
[email protected]@thesuniljain
SUNILJAIN
ILLUSTRATION: ROHNITPHORE
The firms the govtwants toattract fromChinawon’t belured by lower taxes or
incentives, theywill look at howinvestors fare in India.And, thereare huge issues there, fromAirtel-Vodafone toCairn, fromWalmart toMonsanto,TRowe
Price etc
RATIONALEXPECTATIONS
Ahmedabad
❝❝ ❝❝
NEWVISIONCPGurnani, MD & CEO, Tech Mahindra
Let’smake 2020 the yearwhenwe get freedomfrom a non-digitalworld tomake India truly a globaldigital leader in every aspect, so that the commonman aswell as businesses come out resilient.
Ajit Mohan,MD and VP, Facebook India,stressesthatIndiaisinthemidstofoneofthemostdynamicsocialandeconomictransfor-mationstheworldhaseverseen,drivenbytherapidadoption ofdigital technologies.WhileFacebook’s familyofappsisplayingacriticalrole duringCovid-19by removingmisinfor-mation and harmful content, its recent col-laborationwith Reliance Jio is intended tobringmorepeopleonlineandgivethemaccessto digital tools that have the power to trans-form their lives.“The60-million small busi-nesses account for themajority of jobs in thecountry,andformtheheartandsoulofruralandurban communities alike.In the face ofCovid-19, we are putting together pro-grammes to help these businesses stayresilient through the economic recovery.India’srecoverywillbefuelledbytheenergyofentrepreneurs and small business owners,andwewill be very focused on findingwaysto help,”he tells SudhirChowdhary in aninterview.Excerpts:
Thereisadelugeofmisinformationcircu-lating online about Covid-19.What stepshaveFBtakentocurbthis?
Facebook family of apps are playing acritical role in the lives of people duringthesechallengingtimesastheyleverageourplatformsmore than ever to connectwithfriends and family.Abig part of oureffortshas been tomake sure that everyone hasaccess toaccurate informationandthatwedo everythingwe can to reducemisinfor-mationandharmfulcontent.
Globally,wehavedirectedover2billionpeopletoresourcesfromtheWHOandotherhealthauthoritiesthroughourCoronavirusInformationCentre andpop-ups onFace-bookand Instagramwithover350millionpeople clicking through to learnmore. InMarch alone, we displayed warnings onabout 40 million posts related to coron-avirus on Facebook globally, based onaround4,000articles byour independentfact-checking partners.Whenpeople sawthosewarning labels,95%ofthetimetheydidnotgoontoviewtheoriginalcontent.
InIndia,weworkwitheightindependentthird-party fact-checkingpartners includ-ing IndiaTodayGroup,JagranGroup,Vish-vas.news, Factly, Newsmobile, FactCrescendo,BOOMLiveandAFP,covering11IndianlanguagesaswellasEnglish.OnFace-bookandInstagram,wereducethedistrib-utionofcontentthatthesepartnerslabelasfalse. If users still see this content thatappears on their news feed, we attach awarning label that this ismisinformationtogetherwithalinktoafact-checkedarticle.
Most recently,WhatsApp announcedlimiting“highlyforwardedmessages”tojustone chat.Sinceputting intoplace this newlimit,globallytherehasbeena70%reduc-tioninthenumberofhighlyforwardedmes-sagessentonWhatsApp.Thischangeishelp-ingkeepWhatsAppaplaceforpersonalandprivateconversations.
Amongotherkey initiatives,FacebookCoronavirus InformationCentre providesthe latest news andupdates fromMyGov
Corona Hub, health ministry and globalhealth organisations.MyGov and healthministry, along with WhatsApp, haslaunchedahelplinenumbertoraiseaware-ness andanswerquestions about the coro-navirus.By the end ofMarch,over2 crorepeoplehadmessaged thehelplinenumberfor information.WhatsApphas partneredwith13 state governments and launched
helplines in regional languages to providethe government and health authorities apowerfulmechanismtodispelrumoursandmisinformation that may be circulatingaboutcoronavirus.
WhatisFB’sstrategytohelpSMBs?Morethan140millionsmallbusinesses
across theglobeusetheFacebookfamilyof
appseverymonth.ManyofthesebusinessessetupaFacebookandanInstagrampage,oruseWhatsApp to communicatewith theircustomersmuchbefore theycreate aweb-site or start offline operations.There arethree steps we are taking to help micro,small, and medium businesses navigatethese challenging times.Wehave createda$100 million grant programme to help30,000 small businesses across 30 coun-tries,includingIndia.Wearefocusedonthetimelyskillingandmentoringofbusinessesforwhichwealreadyhaveindustry-leadingprogrammes,and in light of Covid-19wehave further strengthened those.We justconcludedourfirstvirtual‘BoostwithFace-book’ through a Facebook Live that sawentrepreneursattendfromacrossthecoun-try.Boostwith Facebook is ourglobal flag-ship programme for skilling small busi-nesses.WehaveIndia-focusedprogrammessuchastheFacebookAdvertiserVintagepro-gramme for skilling advertisers of all sizesthathavetrained800businessesthroughavirtualformatsincemid-March.
Canyou elaborate on the broad contoursofFacebook’spartnershipwithJio?
This investmentunderscores ourcom-mitment to India,and ourexcitement forthe dramatic transformation that Jio hasspurred in the country. In less than fouryears,Jiohasbroughtmorethan388millionpeopleonline,fuelingthecreationofinnov-ativenewenterprises and connectingpeo-ple in newways.Ourgoal is to enable new
opportunities for businesses of all sizes,especiallyforthe60million-plussmallbusi-nesses in India.Theyaccount formost jobsinthecountry,contributing29%toitsGDP.
One focus of ourcollaborationwith Jiowillbeoncreatingnewwaysforpeopleandbusinessestooperatemoreeffectivelyinthegrowingdigital economy.For instance,bybringing together JioMart,Jio’s small busi-nessinitiative,withthepowerofWhatsApp,wecanenablepeople toconnectwithbusi-nesses,shop,andultimatelypurchaseprod-ucts in a seamlessmobile experience.Thespirit of the partnership will be an openecosystemwherewewillwelcome otherswhobelieveinourmissionofenablingdigi-tisationandgrowthforsmallbusinesses.
WhatsApp payment has not been rolledoutnationally.HowdoyouseeWhatsApp’sintegrationwithJioMartplayingout?
OurcollaborationwithJiohasthepoten-tial topositively impactmore than60mil-lionMSMEs; 120million farmers in Indiaand other small businesses thatmaycur-rentlybeoperating intheunorganisedsec-tor.Wewillgive themaccess todigital toolsthatallowthemtoconnectandinteractwitheachotherandtheircustomers.Weenvisionenablingpeopletobrowsetheavailabilityofshops,getanswersfromabusiness,andulti-mately purchase a product right withinWhatsAppchatwiththebusiness.
We continue toworkwith the govern-ment so thatwe canprovide access topay-mentsonWhatsApptoallofourusers.
● INTERVIEW:AJITMOHAN, MD &VP, Facebook India
FE BUREAU
INDIANINSTITUTEOFTechnology,Roor-kee (IITRoorkee) has developed a uniquecontinuously operated sterilisation sys-temforeverydayaccessoriestoreducethetransmission risk of Covid-19. Thismachine can be used for the disinfectionof personal accessories such as electronicgadgets (mobiles,watches,wireless gad-gets) andmetallic and plastic accessories(wallets,keys,spectacles,bags).
The product has uses in governmentand private offices, airports, educationalinstitutes, shoppingmalls, among otherstodisinfecttheseeverydayitems.Thepro-totypeofthesystemhasbeenhandedovertotheHaridwarMunicipalCorporationforitsuse.MunicipalCommissionerofHarid-war,Narendra SinghBhandari,said,“Thiswill be aboon toeverypublic sectorofficewhich are open 24x7 and thus demandsmoreprotectivemeasures tobe taken.”
Theproduct consists of anultra-violetchamberequippedwithamoving systemwhich helps in carrying the object in andoutof the sterilisationsystem.Ithasbeendesigned, in linewith the InternationalStandardsandScientificLiteratureontheuse of ultraviolet radiation for sterilisa-tion.Theproduct,bydesignandoperation,takescareofall thehealthhazardsassoci-ated with the use of the UV light. AjitChaturvedi, director IIT Roorkee, said,“Underthecurrentsituation,thismachinewould play a useful role in blocking thetransmission of coronavirus throughcommonaccessories.”
The continuously operated sterilisa-tion systemhasbeendesignedbya teamconsisting of Vimal Chandra Srivastavafrom the department of chemical engi-neering;andhis researchgroupstudentsnamelyNavneet Kumar,Rohit Chauhan,andSwatiVerma.Theprototypewascon-ceptualised, designed, locally fabricatedinRoorkee,and testedwithin a period of20 days of lockdown. A patent is alsobeing filed forthedevelopedsystem.Theteamwill improviseandscaleupthepro-duction of this system in line with con-sumer feedback.
“The highlight of this steriliser is thatit isoperatedincontinuousmodefornon-stop screening of common-use acces-sories.All the UV sterilisers available inthe market, till now, are table-top orbatch mode sterilisers,” said VimalChandraSrivastava.
Make yourmobilegerm-free
SUDHIRCHOWDHARY
POWER MEETS STYLE—three simplewords that best describe the mobilephones fromrealme,ayoungyet hugelysuccessful brand that has been steam-rollingitscompetitorsintheIndiansmart-phonemarket.Recently,realme reachedtwo keymilestones—first, itmarked itssecond anniversary; second, it nowhasover35millionworldwideusers(selling10millionsmartphonesinfourmonths),outof which 21 million users are based inIndia.MadhavSheth, CEO,realme India,sumsup the success of the brand rathersuccinctly:“realme is the5-startrendset-terbrandthathasalwaysdeliveredexcel-lence in areas of design,power,battery,cameraandquality.”
Lastweek,realmedebuted itsmuch-awaitedNarzoseries,butweareheretotalkabout twonot-so-old devices from its 6series—realme6andRealme6Pro—thatwere launched in,what is nowknownas“BeforeCorona”days.Wetakealookatthekeyfeaturesandperformanceofboththedevices,themainfocusbeingonrealme6(myprimarydeviceduringlockdown).
realme6 (8GB,`15,999)realme positions this device as the
most powerful smartphone in the sub-15,000pricesegment,withflagship level
features including 90Hz single punch-holedisplay,64MPAIquadcamera,anda30W Flash Charge that can charge thelarge 4300mAhbattery in only60min-utes.There are two colouroptions avail-able: CometWhite (our reviewunit) andCometBlue.Thecometdesignofrealme6isextremelybrightandfast;withthenewopticalplatingtechnology,thebrightnessandsaturationofthecolourareincreasedby60%and50%,and thevisual effect isbrightandeye-catching.Itcomesinthreememoryvariants:4GB+64GB(`12,999),6GB+128GB(`14,999)and8GB+128GB(`15,999).
realme 6 contains a 6.5-inch 90HzUltra SmoothDisplaywith90Hz refreshrateand120Hzsamplingrate,resultingina seamless and smoothvisual experiencewith every swipe of the screen.With asuperb screen-to-body ratio, the phonebringsyouaverygoodvisual experience.The display is also covered by CorningGorillaGlass3forbetterprotection.
Inside,thephoneispoweredbyMedi-aTekHelioG90T,intendedtobethecoreofa great smartphone gaming experience.The processor is made using a 12nmprocess,makingitmorepowerfulandeffi-cient.With the combinationof the latestupdatedCPU,GPU,super-fast RAMandpowerfulAI,realme6bringssmoothexpe-riencetomobilegamelovers.
With anupgraded30WFlashCharge,thephone’s4300mAhbatterycanbefullychargedwithin 60minutes.Evenwhileheavygaming,the30WFlashChargecanchargeupto55%injust60minutes.
Then,realme6boasts the latest flag-ship, ultra-clear quad-camera set-up,comprising of a 64MP main camera,
an 8MP 119 degree ultra-wide-angle,and a macro lens and a B&W portraitlens. One click is all it takes to switchto thewide-anglemode,enabling usersto capture more stunning images oflandscapes, architecture, and largegroups.Theultra-macro lenswill enableuserstogetclosershotsanddiscoverthebeautyof themicroworldwith the4cmshootingdistance.
The phone’s 16MPUltra-clear frontcamera will satisfy the verified selfieneeds with F2.0 aperture, supportingsmart beautymode, Bokeh effect, etc.It comeswith abeautyalgorithmdevel-oped for different genders, differentskin types, and different facial shapesand features allowing the user to easilytake selfies that show natural anddelicate skin.
Mytakeaways:Thephone’sbrightandattractivedisplay is ahugedrawhere,aptforWebsurfing,watchingmoviesorplay-ingmobile games. Plus, there’s smoothperformancewith fairly long-lastingbat-terylife,decentcameras–that’s realme6foryou.
realme6Pro (8GB,`18,999)Therealme6Proisaverygood-looking
device and is said to be the the world’sfirst smartphone to come with theQualcomm Snapdragon 720G mobileplatformthat ismadeusinganadvanced8nmprocess,making itmore powerfulandefficient.
It comes in two attractive colours:LightningOrangeandLightningBlueandcontains a4300mAhbatterythat canbecharged in 60 minutes, with a newlyupgraded30Wflashcharge.realme6Prohasa6.6-inch90HzUltraSmoothDisplaywith90Hz refresh rate and120Hz sam-pling rate foran enhancedvisual experi-encecoveredwithCorningGorillaGlass5forbetterprotection.
Therealme6Profeatures6camerasintotal, including dual wide-angle frontcamerasand64MPquadrearcamerawith20xhybridzoomcapabilities.
ThebrandnewNightscape3.0willalsofeaturemanyexcitingupdatessuchasTri-podMode,whichcantakeupto50secondsof super long exposure, and UltraNightscapeModethatcantakeclearshotsin extreme low light environments.Thephone comes in three variants: 6GB +64GB(`16,999),6GB+128GB(`17,999)and8GB+128GB(`18,999).
Two smooth and fastsmartphones with stylishlooks, great cameras andlong-lasting battery
●TECH FOR DAILY LIFE
IIT Roorkee develops asterilisation system forpersonal accessoriesrealme 6
■Display: 16.51 cm (6.5 inch) FullHD+Display
■Processor: MediaTekHelioG90Tprocessor
■Memory& storage: 4/6/8GBRAM, 64/128GBROM, expandableupto 256GB
■Camera: 64MP+ 8MP+ 2MP+ 2MP| 16MPFrontCamera
■Battery: 4300mAhbattery, 30WFlashCharge
■Estimated street price:4GB+64GB (`12,999), 6GB+128GB(`14,999) and 8GB+128GB (`15,999)
realme 6Pro
■Display: 16.6cm (6.6-inch) FHD+Fullscreen
■Processor: QualcommSnapdragon 720G
■Memory& storage: 6/8GBRAM,64/128GBROM
■Camera: 64MPAIQuadCamera,Dual In-Display Selfies
■Battery: 4300mAhbattery, 30WFlashCharge
■Estimated street price:6GB+64GB (`16,999), 6GB + 128GB(`17,999) and 8GB+ 128GB(`18,999)
SPECIFICATIONS
Anopen ecosystem is the spirit of Facebook-Jio tie-up
FINANCIALEXPRESS8 WWW.FINANCIALEXPRESS.COM
● REALME 6 & 6 PRO
realme steals thethunder, yet again
Gadgets
eFEMONDAY, MAY 18, 2020
Aarogya Setu phishingscandals on the riseITSECURITYFIRMHumanFirewallhasseenameteoric rise in thenumberofphishingscamsbaitingenterpriseemployees,Armypersonnel andconsumersalike.Thenumberofattacks,andthevarietyofattacks ranging frombutnot limited to‘HRreleaseonAarogyaSetu’,‘HRmandatesAarogyaSetu’,‘Yourneighbouris affected’,‘Seewhoall areaffected’,‘Yourarea is thenext togo intoquarantine’,aredoing the rounds.“Themassive rise inAarogyaSetu focussedscamshas seenameteoric riseamongenterprise customers,specificallysincethegovernmentmandated theuseof itforpublic andprivateorganisations’employees,andputting theonusof100%complianceontheheadof theorganisation,”saysAnkush Johar,directoratHumanFirewall and InfosecVentures.“Scammershaveseenthis asahugeopportunitybecausepeopleexpecttohearfromtheirCEOs,headsoforganisationsandHRdepartmentsatsuch times,meaningthatemailswill beopened,andemployeesbaited.”EarlierGoogle said itwasblocking18millionphishingemails adayrelated toCovid-19alone.Globallytoo,HumanFirewallanti-phishing labhas seenariseofover700%,that is7x increase inphishingattacks inApril2020.
Combating Covid-19 inTamil Naduwith HCLtechTAMILNADUGOVERNMENThaspartneredwithHCLtosetupadisastermanagement-dataanalytics centre tostrengthenthestate’sdisastermanagementefforts in the faceof theCovid-19pandemic.HCLisalsohelpingimproveandexpandthestate’sdisastermanagementhelpline (1070) throughtechnologicalupgradation,manpowerassistanceandeffective reportingmechanisms.Thedisastermanagement-dataanalytics centre,supportedbyHCLwillhelpcapturedata trends fromacrossall districts in real timeanddisplaythemlive to informthegovernment’s futuredecisionsondegreeof responseneededforeachdistrict andalso forgradedrelaxationof thecurrent lockdowntoresumeeconomicactivities.
Giventhe increasedcallvolumes inthewakeofCovid-19,HCLishelping toupgrade theexistingcall centrebyimpl-ementinganautomatic call distribution(ACD) systemtoeffectivelyroutecallsbetweendifferentgovernmentdepart-mentsandalsoput inplacean inter-activevoice response (IVR) system.
Tech
Bytes
Ahmedabad
The quarterwas inconsequential for MSIL’s stock orbusiness outlook, in our view. Quite understandably,management refrained fromoffering a concreteoutlook – either near term or long term
—HSBC
EXPERTVIEW
Investor
MARUTI REPORTEDA4.2% EbitmargininQ4,missing the consensus estimate of5.5%. Ex one-offs (BSIV write-off of70bps) the Ebit margin was only a tadlower.Thequarterwasinconsequentialforthe stockorbusinessoutlook,inourview.Quite understandably, managementrefrainedfromofferingaconcreteoutlook
–eitherneartermorlong term.Positively, they didmention a further
fall in diesel ratio for the industry (to15-20%inQ4)whichwillbenefitMaruti.The companyalso alluded to likelydown-tradingbybuyers.Treasuryincome(whichwas48%ofPBTinFY20) is likelyto comedown inFY21due to loweryields,though
managementwasconfidentofthequalityofinvestmentportfolio.Capexisexpectedtobecut to`27bn(from`32bninFY20).Inourview,fourdriverswilldetermine
thepushpullforindustrygrowthinFY21e:Benefit from shift to personal
mobility:Asdiscussedinanearlierreport,in our view, the potential upside from ashift to personal cars is not more than3-4%ofcar industrysales.
Demand hit from WFH (workingfromhome):Forlargewhite-collarsectorssuch as IT and banks,we believe 20-25%
of the workforce may continue toWFHeven post COVID-19.This amounts to ac2%headwindtocardemandinourview.
Pent-updemand: IndianPVindustryvolumes inFY21are likelytobesimilartoFY11, in a countrywith lowpenetration.Whilesavingshaveincreasedforpotentialbuyerswith stable income,spendingpat-ternsmaychange.Andpeoplemaytendtosavemore thanspend inpost-COVIDera.
Job creation and wage deflationremain the most important drivers:Based on our interactionwith 75 compa-
nies,weestimatewagedeflationat5-30%across companies.This is certainly nega-tive fordiscretionaryspending.
WereviseourestimatesforFY21/22to factor in the lockdown – impactingboth revenues and margins. Lowerinterest rates and MTM gains shouldimpact other incomeaswell.This leads toFY21/22eEPSestimatecutsof30%/11%,respectively. We now forecast a 13%decline involumes inFY21e.
HSBC
●MARUTI SUZUKI RATING: HOLD GOVERNMENT'S FIRSTBAILout packagecan abate NPL risk fromSME loans—12-14% of credit and weaker profile.`3 trn of goverment guaranteed loans are15-20%of this credit andwill be easier toexecute.WhileweexpectedanRBI-leddebtrestructuring package for all, this is a tadbetter thanexpectedoutcome.`750bnofrefinancing lines to NBFCs (2%of loans)maybe inadequate and a tad complex. Inourcoverage,PSUshavehigherSME; IIB&SHTFhavehigherofCV/SMEloan.
PackageforSMEspracticallydesignedIn the government’s first batch of bailoutpackageforeconomyworth`6trn,halfcon-stitutes funding lines toSMEs.Theseunitswith borrowingof up to`250masof 29-Feb-20canseekadditional20%creditfrombanks/NBFCsfor4-yeardurationand12-mmoratoriumonprincipal.Ourconversationswithlendersindicatethat(i)sizeofguaranteeline is reasonable;(ii) credit-guarantee fromgovernmentwill give confidence to lendasbankshaveliquiditytolend–`7-8trnofsur-pluswithbanks; and (iii) packageshouldbesmoothtoimplement.Detailsontheframe-workareawaited—especiallyifthesecanbeavailedinsegmentslikeCV/LAPloans.
Eases NPL risk for banks; demand pick-up iskeySMEs form12-14%of system credit andwe understand that this package cantouch15-20%of thembyvalue.Hence,it
should reasonablyreduce liquidityriskofSMEs and so the asset quality risk forbanks andNBFCs.As discussed in an ear-lier report, we expected RBI to offer arestructuringfacility to allborrowers thatwould havehelpedtoreduceNPL pressureand/or delayrecognition.This liquiditysupport forSMEs shouldabate pressureson asset quality in SME loans,CV loans aswell as LAP segments. Improvement indemandwillnowbekeyespeciallyastheseborrowerswillnowbe20%more levered.
LiquiditylinestoNBFCssmall&complexWebelieve that `750 bn of liquidity linesto NBFCs (of which `100 bn existed insomeform) is relativelysmall as it equatesto ~2% of loan-book and could be a bitcomplex to implement. That’s because(i) details on qualified companies areawaited;and(ii)itwillinvolvecoordinationbetween nodal-agency and banks.Addi-tionally, if NBFCs are to extend additionalfunding lines to SME borrowers theywillalsoneedtoraisefundsfromthemarket—whichremainstight formostof them.
DiscomlendingcanliftPFC/RECgrowthAdditional funding lines by PFC/REC todiscomswill be backed by state govern-ment guarantees and`900bnof lendingcanadd~15%toloansandreduce imme-diate risk,but spreadscouldbe low.
KeybeneficiariesInourcoverage,PSUshavehigherSME;IIB&SHTFhavehigherofCV/SMEloan;anyspe-cificpackageforMFI/borrowercanhelpIIB.
JEFFERIES
Govt bailoutlowers NPL riskfrom SME loans
SIEMENS (SIEM), DESPITE in line sales(down20%y-o-y),missedours/consensusbottom line estimates by a wide marginowingtosharprise inotheroperatingcost.High base forgas&power (HVDC impact)andhitongrowth&OPMsofsmartinfraledto a sharp14%/28%dip inH1 sales/Ebit.The plunge in OPMs (Ebitda margin fell330bpsy-o-yto8.3%),inourview,wasduetonegative operating leverage,COVID-19expenses(`200mn)andpossibleforexloss.Management highlighted rising cus-
tomer thrust on reducing capex and dri-ving productivity,which augurswell forSIEM’sexpandingportfolio.WhilewetrimourFY20/21eEPS6/7%,weexpect SIEMtobenefit fromrisingtrendof lowvoltageandautomationproducts,apartfromgov-ernment’s sharpening focus on revivinginfrastructure.MaintainBuywithrevisedTPof`1,400(`1,425earlier)aswerollfor-ward toMarch2022e,valuingat42xPE.
Lockdown takes a toll on revenue:Deferredofftakebycustomers,slowdownintheshort-cyclebusinessandweakdemandinlargeinfraprojectsresultedinoverallrev-enuedeclining20%y-o-y.Highercostsdur-ing the lockdown (`200mn) dentedmar-gin—down330bpsy-o-yto8.3%.
Partial resumption of operations:Managementhighlighted that currentlysix factories have resumed operationsand another two are expected to startsoon.Inourview,SIEMisbestpositionedtobenefit fromrisingfocusondigitalisa-tion bycustomers.
Outlook: Access to parent’s robustglobal product portfolio and a favourabletransformation in domestic industrialcapex (rising spend towards automa-tion/efficiency in thepostCOVID-19era)will improveSIEM’sreturnsovertheyears.Wemaintain ‘BUY/SO’.The stock is trad-ingat43x/33xFY20e/21eEPS.
EDELWEISS
Costs took atoll on thebottomline
FY20/21e EPS down 6/7%;company poised to tap newopportunities; ‘Buy’ retained
● SIEMENS RATING: BUY
● FINANCIALS
Q4 saw a slight miss on margins; FY21/22e EPS cut by30/11% to factor in Covid-19; TP reduced to `5,700
Hard times aheadfor the company
FINANCIALEXPRESS9 WWW.FINANCIALEXPRESS.COM
MONDAY, MAY 18, 2020
Pick-up in demand is key;aid for NBFCs is inadequate;PSUs have higher SME andIIB & SHTF,CV/SME loans
The liquiditysupport for SMEsshould abate
pressures on assetquality in SME
loans, CV loans aswell as LAPsegments
FY20E FY21E
(` m) New % chg New % chg
Net Revenue 116,925 (5.7) 134,913 (5.9)
Ebitda 11,096 (5.7) 14,524 (7.6)
Ebitda margin(%) 9.5 10.8
Adjusted ProfitAfter Tax 8,666 (5.9) 11,151 (7.0)
Net profit margin 7.4 8.3
Capex 1,800 0.0 2,000 0.0
Source: Edelweiss research
FY19 FY20 FY21e FY22e
Volumes (units '000s) 1,862 1,563 1,366 1,699
Growth y-o-y 4.7% -16.1% -12.6% 24.4%
ASP (`, 000) 446 459 445 458
Growth y-o-y 1.6% 2.9% -3.1% 2.9%
Net Revenues (excl other operating income in ` bn) 830 717 607 777
Growth y-o-y 6.3% -13.7% -15.3% 28.0%
Total Revenues (` bn) 860 756 643 818
Growth y-o-y 7.8% -12.1% -15.0% 27.3%
Ebit (` bn) 80 38 23 63
Growth y-o-y -14.5% -52.5% -38.2% 171.2%
Ebit margins 9.6% 5.3% 3.8% 8.2%
EPS (`) 248.4 187.2 124.9 233.4
Growth y-o-y -2.9% -24.6% -33.3% 86.9%Source: Company data, HSBC estimates
Summary of estimates
Change in estimates
Slippages should nearly doublein FY21 and moderate a bit in FY22
0%
1%
2%
3%
4%
5%
6%
7%
0
500
1,000
1,500
2,000
2,500
3,000
FY14
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
FY22E
Slippages (LHS) Delinquency ratio (RHS)(` bn)
(% of past year loan)
Source: Company data, Jefferies estimates
THEREAREMANY employees of publicsectorundertakings,commercial banks,andprivate sector companieswho solelyrelyongroupmediclaimorofficeprovidedmediclaim throughout their life.Whentheygetretiredfromtheirrespectivejobs,theyenduphavingvery loworno insur-ancecoverfromtheirorganisationswhichmaynot helpmeet theirhospitalisationexpensesduringpost-retirementphase.With technology advancement and
innovation in themedical sector,the costof healthcare is increasing every year.
Expensesonhealthcarealsoincreasewithage.Therefore theneed forhealth insur-ance coverage is equally important evenafterretirement.Therearemanygoodhealthinsurance
plans available in the market, speciallydesigned for senior citizens.Let’s under-standwhich planwill suit a retiree best.Thesearethefactorstokeepinmindwhilechoosinghealthinsurance:
Waiting period forpre-existingillness coverSome insurers coverpre-existing ill-
nessandsomedonot.Checkforthisbeforepurchasingapolicy.Thewaitingperiodcanbe24monthsto48months.Choosethoseplanswhich coveryourpre-existing dis-easesafterashorterwaitingperiod.
Co-payment shareCo-paymentisthefixedamountwhich
apolicyholderpays fromhis ownpocketfor the covered services.Almost all plansavailable in themarket forseniorcitizenscomewith co-payment clause.You canchoose a planwhich allowsyou to payalower percentage for pre-existing andotherclaims.Youcanalsochoosetowaive-
off this co-payment by opting for addi-tionalpaymentofpremium.
Disease-wise cappingClaimamountoncertaincriticalillness
arecappedirrespectiveofthesumassuredon the policy. To avoid any rejection ofclaims,make sure to read the documentcarefullyandlistofcritical illnesscover.
Room/ICU limitsMany insurance companies put caps
on roomand ICU limits and the policy-holderhastopaybeyondthegivenlimits.Choose those insurance policies whichcoveryourfullin-patienttreatment(Roomrentplusnursingexpenses).
Long-termpayment andotherdiscountsMany insurance companies provide
discountsonupfrontpremiumsonmaxi-mumpolicyterms.Themaximumpolicytermcanrangeupto3years.Youcanalsoavail of family discounts and discountsuponsubmittingtest reports inadefinedperiodgivenbytheinsurer.Forpeaceofmindafterretirement,buy
healthinsurancesothatyourhard-earnedsavings areutilised formaintainingyourlifestyleandnot forpayingheftyhospitalbills.Apartfromtheabove-mentionedfac-tors,seniorcitizenscanalsoconsiderroadambulancecoverageandfreeannualmed-ical check-up while choosing the righthealthplan.
Thewriterischiefproductofficer,BajajCapital
Are you a retiree? Five tips for buying a health plan
PSARAVANAN
EVERYECONOMICDOWNTURN is dif-ferent in its own way. But, the currentCovid-19poses anunprecedented threatto the global economy.Countries acrosstheworld adopteddifferent tactics rang-ingfromdifferentversionsof lockdowns,workfromhome,strictquarantine,severerestrictions on international anddomes-tictravel,etc.,whichhavebroughtbusinessvirtually to a halt. Now,many dividendpaying sectors are cutting theirpayouts.So, if you are an investor,here is how tohandlethereductionindividendincome.
Whydividend cut?A quick empirical check on the BSE
listed companies, during the last onedecade,revealsthatdividendpayoutratiohas increased from30%to roughly50%whereas forbanks this increase is around22%.But it hasnot beenahappystart totheyear fordividend stocks.Leading oilcompanies have cut their dividend andhave also suspended their sharebuyback
programme.The Reserve Bank of India(RBI) recentlybarred banks temporarily,frompayingdividendforFY2020asapol-icymeasure andasked themto conservecapital.Banks areundermuch straindueto lockdownand the three-monthmora-toriumon loan repayments.This undis-tributed profit of the companies can beused as a reserve to cushion the fall indemand expected in the forthcomingmonthsorcanbeusedasabufferagainstacrisisorforexpansion.
What should investors do?Asmany of the traditional dividend
paying sectors are stopping dividends,whatshould investorsdoforareasonableand sustainableyield.If thedividend cutsurprises themarket,the sharepricewilldrop immediately.Therefore,one cannotreallyget out of it fast; rather,onemustfirst accept the loss of both revenue andcapital.Then,onemust find out the rea-sonsfordividendcutandwaitforacoupleof days before taking anydecision.Thus,
therationalwaytocomeoutofsuchprob-lemistowaituntilsharepricecomesback.
Is it good to buymore on the dip?Often,investors attempt to buymore
shares on thedip anddo somecost aver-age.Thelogicisthatyoualreadyholdsomesharesat`10,whynotbuymoreat`6andgetyouraveragepricedownto`8.So,oncewhen the sharebouncesback,youwill beable to sell them faster. But investorsshould note that this strategycanmakesenseonly if the companyhas someplantorevivethebusiness.
Diversification is the keyAdividendcutannouncement isdefi-
nitely not good news for investors. Itreducesyourimmediatesourceofincomeand it cuts a good part of yourportfoliovalue.To avoid such things,donot investmorethan15%ofyourportfolio inasin-glesector.Diversificationisthekey.Companies in sectors such as con-
sumerstaples,pharmaceuticals,utilitiesareresilientandmayactuallybenefitfromlockdown.Dividendswill not disappearcompletelyas somesectorsmay just sus-pendpaymentsuntil things revivewhileotherswillreduceratherthancancel.To conclude,the synchronised global
shutdown presents an unprecedentedchallenge to dividends payments. So,investors should adopt the above strate-giestobeatthedividendcutblues.
Thewriterisaprofessoroffinance&accounting,IIMTiruchirappalli
Personal Finance
Learning to livewith dividend cuts
Senior citizens need tocheck the rules forwaitingperiod for cover of existingdiseases and co-paymentchargeswhen selecting ahealth insurance plan
Dividend`
Dividend
`
Buy
ILLUSTRATION: SHYAMKUMAR PRASAD
ILLUSTRATION: SHYAMKUMAR PRASAD
● INSURANCEVINAYTALUJA
●COVID-19: IMPACTON DIVIDEND INCOME
Cut in dividend payoutswill reduce your incomeand also your portfoliovalue.To avoid this, donot invest more than 15%of your portfolio in asingle sector
Ahmedabad
DEVIKASINGH
THE RESTAURANT INDUSTRY is amongthoseworsthit due to theongoingCovid-19pandemic.Whilethelockdownorderedrestaurants to shutter, it has had a severeimpact on online food deliveries, too.Quick-service restaurants (QSRs) such asMcDonald’s, Burger King and KFC havefound few takers, as consumers arewaryofeating‘outside’food.
According to Rajat Wahi, partner,DeloitteIndia,mostrestaurantshaveseenadeclineof2-6%insalesinthefirstquar-ter of 2020,which is substantial consid-eringthe25-30%growththeywitnessedduring the same period last year.Food aggregators have seen a 50-60%decline in orders being placed on theirplatforms,he adds.
Withconsumerscuttingdownontheirdiscretionaryspends,fearinganeconomicdownturn,restaurantsmaynotseethesit-uationimprove.ArecentonlineconsumersurveybyNielsenrevealedthatasmanyas64%of respondents intend to spend lessonrestaurantsandmovies in theatres.
Experts sayQSRs need to realign theirstrategies towards online deliveries andtakeaways.“In the pre-Covid times,mostQSRsusedtoget20-30%oftheirrevenuefrom deliveries.Theyneed to take this to50-70%now,asrestaurantswillcontinueto see low footfalls,” says PinakiranjanMishra, partner and leader, consumerproductsandretail,EY.
Social distancing on themenu
MostQSRsaregearingupforthischange.BurgerKing,forinstance,besidesdeliver-ies through food aggregators such asZomatoandSwiggy,planstointroduceitsown app soon. Srinivas Adapa, CMO,
BurgerKingIndia,says,“Weplantohaveatech-enabled omnichannel approachfrom nowon.Our appwill not only helpcustomers get contactless deliveries attheir homes, but will also feature a ‘zerocontact dining’ feature.Using this, theycan visit our restaurants, and order andpay directly through this app, avoidingqueues, cash payments or any sort ofphysical contact.”
“Whenwe reopen our restau-rants, social distancingwill con-tinue to be our focus,” saysArvind RP,director –marketingandcommunications,McDonald’s(West and South).The company isalso planning to introducecontactless dine-in andstorepick-upoptions.
Meanwhile, KFCIndia, which hadstoppedtakingdeliveryorders through its appand website, plans torestart themsoon.Cur-rently, it is servicingcustomers throughSwiggyandZomato.The
company, Moksh Chopra, CMO, KFCIndia shares, is devising changes in itsrestaurant design and processes toenable contactless dining, goingahead, including signage and floorstickerstohelpdeliveryridersmaintain
a safe distance while waiting tocollect orders.
Burger King India, on theotherhand,hasalreadyputinmarkers on the floors, chairsandtablesacrossitsrestau-rants for customers tomaintain social distanc-ing.These QSRs are alsomulling servicing cus-tomers via contactlesstakeaways,when theyare
allowed to resume operations fully.TataStarbucks restarted operations in eightcities recently,where it is offering con-tactless delivery and takeaway.The com-panyhas also introduced gridmarks anddesignatedwaitingareas in itsoutlets.
Online challenge
The move towards online could bring afairshareof challenges forthesebrands,primarilythatof converting the in-storecustomer into an online customer.Theywould also need to rethink their depen-denceonfoodaggregators since thebulkof the business for these restaurantswill come through home deliveries,going forward.
“Theywill have to build their onlinedeliverycapabilities.Iftheyaredependenton foodaggregators,theywon’t be able tounderstand their customers to targetthemmore effectively. Theywould alsohave to pass on themargins to food techcompanies. In the current scenario, theyneed every penny that comes theirway,”saysMishraofEY.
QSRs pay 15-20% per order to foodaggregators for deliveries through theirplatforms.
Paying high rent for restaurantpremisesevenasbusinesscontinuestobeslowcouldalsobe trickyforthesecompa-nies. Wahi of Deloitte is hopeful thatthingswill “get back to normal in abouttwomonths,ashasbeentheglobaltrend”.He says,“China and parts of Europe arereopening after twomonths, and seeingabout30-50%customers back in restau-rants.Wemayseeasimilarpatternhere.”
However, strong communication onhygiene and safety measures taken byrestaurants,expertssay,willbeimperativeinbringingcustomersback.
● F&B
Restaurants are focussingon home deliveries andzero-contact dining towincustomers back
QSRs in‘adaptorperish’mode
BrandWagonFINANCIALEXPRESS10 WWW.FINANCIALEXPRESS.COM
MONDAY, MAY 18, 2020
Mindshare India rejigssenior leadership
UNDERMINDSHAREINDIA’S restructuredleadership,HarshDeepChhabra,AjayMehta,NikhilMayneandSamraatKakkarhavebeengivenkeyroles.Chhabrahasbeenappointedasseniorvicepresident,MindshareFulcrum;Mehtahasbeendesignatedseniorvicepresident,Content+;Mayneasvicepresident,Content+;andKakkarhasbeennamedvicepresident,Neo India.
LeoBurnettOrchardbagsanewbusiness
SCOOTERSHARINGCOMPANYVogohasbroughtLeoBurnettOrchardonboardas
its creativepartner.Theagencyhasbeentaskedwithdeveloping the long-termbrandstrategy,brand identityandrelaunchcampaignforVogo.Theaccountwaswonthroughavirtualpitch,andwill behandledbyLeoBurnett’sBengaluruoffice.
MRUCIndiareleases IRSQ42019resultsMEDIARESEARCHUSERSCouncilIndia’s (MRUCIndia) findings showa“rapidlyevolvingmedia landscapewithmulti-mediaadoptionacross consumerstrata”.Internet consumptioncontinuesto surge,particularly in rural India.However,newspaperreadership,acrosslanguages,isonaslowdecline.
TikTokhiresmarketingheadforIndia
TIKTOKHASAPPOINTEDAshokACherianasmarketinghead for India.Hejoins fromApplauseEntertainment,apartofAdityaBirlaGroup,wherehe led themarketingand
revenue functions.Prior to that,hewasCMOatSmaaashEntertainment.
AbbeyThomastoheadmarketingatVolkswagenVOLKSWAGENPASSENGERCARSIndiahas roped inAbbeyThomasasheadofmarketing.ThomashaspreviouslyworkedwithAudi India asheadofplanning (product and sales),andhasover25years of automotiveindustryexperience.
MirumIndiawinsanewaccountMIRUMINDIAHASwon the socialmedia and online querymanagementmandate forWileyNXT,a learningsolutions company.
In The
News
VENKATASUSMITABISWAS
GENERALENTERTAINMENTCHANNELS(GECs) have had to rejig their program-ming strategytokeepaudiences engagedduring the lockdown,having run out offresh content. Apart from reruns of oldshows and longer edits of recent shows,broadcastersarenowalsotappingintothelibraryofOTTplatforms.
Zee TV replaced its top-rated showsKumkumBhagyaandKundaliBhagyawiththree shows from ALTBalaji’s contentlibrary—KarLeTuBhiMohabbat,BaarishandKehnekoHumsafarHain—onMarch25 in the9-11pmslot.Disney+Hotstar’sHostages, a 10-episode crime thriller,wasairedonStarPlusat10:30pmonApril13,replacing the paranormal thrillerNazar,whoseproduction isnowonhold.
Thisexperimenthasbeenalitmustestfor the mass appeal of OTT shows andwhether broadcasters could continue tobank on them. And the result has notbeenencouraging.
Flop show?Initially,airingOTToriginalsseemedlikeagood option for GECs looking for short-term relief.“These shows fit the purpose,giventheirfinitenatureandthelockdownperiod being a temporary phenomenon,”says PrathyushaAgarwal,chief consumerofficer,ZeeEntertainmentEnterprises.
But TVviewers are not impressed.Asper a report byBARC India,viewership ofOTToriginalshasbeendismalintheHindispeakingmarkets in urban India (HSM-Urban).This is significant as HSMUrbanhas been the primary contributor to thegrowth of Hindi GEC viewership duringthe lockdown.
The reportfound that theviewershipdur-ing the timeslots in theweekswhen theOTTshowswereon air, in com-parison to theusual program-ming in January, has dropped signifi-cantly in HSM-urban. For instance, the10:30-11 pm slot on Star Plus had gar-nered 29.8 lakh impressions on averagein January; and this fell to 2.55 lakhimpressionswhenHostageswas on air inthe same timeband.
The shows on ZeeTVmetwith a simi-larfate.Thenumberofimpressionsforthe9-10pmslotfellfrom66lakh,asrecordedinthepre-Covidperiod(January11-31),to8.37 lakh during March 21-April 24.“ReadymadeOTTshowslookedlikeagoodoption to fill the gap.But the experimenthas not really succeeded,” says SandeepGoyal,founder,MogaeMedia.
Niche versusmassThis experiment has reiterated that thepreferences of TVandOTTaudiences arefar from similar. Sameer Nair, CEO,Applause Entertainment, is certain thatnot all OTT content is TV-friendly.“GECscreate content with a one-size-fits-allstrategy;whereas OTTplatforms cater toindividualistic consumptionpatterns.”
Headds that showsmade forOTTplat-formsfollowatemplateoflimitedepisodes,multipleseasonsandedgycontent,ascom-pared to“GECs’saas-bahu shows and thevariations thereof,which have been theirmainstayforthelast20years.”
Interestingly,theshowshavedonebet-terintheBARCIndiaPrimaVUpanel,whichmeasures viewership in premiumhouse-holds.Couldtheseshowshavehadabetterchanceonnichechannels,insteadofGECs?
“Higher ratings for these shows onGECs,which have awide audiencewouldhavemeantmoreadvertisingdollars,butthat has not happened. Putting them onniche channels would havemeant smallaudiences and consequently low adver-tising,”saysGoyal.
Arevival inviewershipdependsonhowsoonproductionoffreshcontentcanbegin,and if productionhouses are able toman-age shootswhile following requisite pre-cautions.“We are trying to figure out newways of production,whereinwemayhaveleanercrews,greateremphasis onhygieneandacontrolledenvironment,”Nairsays.
Fresh offtheweb
●MEDIA
What consumerswill buymore online in the next fewweeks:■ 58% - Groceries■ 49% - Household products■ 39% - Beauty and personal hygiene products
— Criteo
●NUMEROLOGY
As per a report byBARC India,
viewership of OTToriginals has beendismal in the Hindispeakingmarketsin urban India
Withtheadventofcomputers,arguesMan-ishKumar,people assumedmany jobswillbe lost, but many more got created.“Thesamewill happen in theautomotive sectoreven if automakers decide to digitise theshopfloor,”arguesKumar,theMD&CEOofNSDC.In an interviewwith FE’sVikramChaudhary, he adds that the need forreskilling andupskilling hasneverbeenasimportantasitisnow,duringtheCovid-19crisis.Excerpts:
Automotive companies and their sup-pliersarebigjobcreators.If,post-Covid-19, some players automate theirprocesses more and digitise the shopfloor,willitleadtojoblosses?Disruptionhas always been there.Whencomputersstartedbecomingmainstreamin India over twodecades ago,somepeo-ple thoughtthatmanyjobswouldbe lost.Instead,wesawnewjobsgettingcreated—jobs thatwehadn’t foreseenat that time.Then, people who got reskilled andupskilled got thosenewjobs; the same isthecasenow.
For example,notmanypeople knowthatthedriverlesscarsbeingtestedinCal-ifornia are supported by girls fromBhubaneswar (Odisha) and24Parganas(West Bengal). These girls examine thestreetsofCaliforniaonacomputer,andtagthemedians of the roads and the speedlimit.Every10minuteswhenanewpic-ture is presented, they update the tagsaccordingly.Yes, a certain driver mighthave lost the job in California,but hun-dredsgot created in India.That’s thenewnormal.
Essentially,nomatterhowmuchyouautomate at the back end,youwill needdata,and that datawill be processed byhumanbeings,andforthatyouwillhavetoskillyourstaff.
Howwill changedpracticesat the automotive shop floorchangejobprofiles?With labourforcemovingawayfromfac-tories duringCovid-19,and the ensuingdemandandsupplyconditions,labourwillhavemorebargainingpower;wagesmight
goupand thevalue of skilled labourwillincrease. If automotive companies go informoreautomation,itisagoodthingfor
the labour force,as newtypes of jobswillget created.However, these necessarilymaynotbeinthesamesectororindustry;these could be somewhere else,anothersector.
Post-Covid-19,doyou foreseeautomo-tivecompaniestrainingmoreandmoreoftheirstaff?AutomotivecompaniesinIndiavaluetheirstaff,andovertheyearswehaveseencon-tinuous skill development happening. Iforeseethoseskillingeffortswill increase,goingforward.
In the future shouldworkersbe skill-agnostic?In the long term,it is inevitable.Skills such as complex problemsolving, communication skillsand teamworkwill becomevery
important; these are foundational skills.Thentherearedomainskillsthatyouhavelearntforaspecificsector.Howyouareabletoapplybothofthesetodifferentsettingswilldefinehowyougrowprofessionally.
VIKRAMCHAUDHARY
“THE INDIANAUTO sector is one of theearlyadoptersofdigitisationinmanufac-turing,but the journeyhasbeenslowdueto apprehensions about its benefits andreturns,” notes a new EY report on howautomotiveshopfloorsmaychangepost-Covid-19.Towards that,the report‘Now,NextandBeyond:Autofactoryofthefuture’reflects upon how automotive OEMsshould increase adoptionof digital tech-nologies, thereby building resilience tosucheventsinthefuture.
“With staff refraining fromattendingwork due to the lockdown, some shopfloors have been left deserted (even asmanufacturing is graduallypicking up).Further,duetomigrationof labour,avail-abilityofcontractlabourpost-lockdownisamajorconcern.Thelockdowncouldleadto several complexities around supplyofcontract labour, forcing companies toautomate,”saysVinayRaghunath,EYIndiaAutomotiveSectorLeader.
Inthenearterm,thereportsaysOEMs
shouldproactivelyprepare forpost-lock-down scenarios, including employeesafety,social distancing,staggered shiftschedule,caution inuseofequipmentontheshopfloor,andsoon.
Over time, both OEMs and compo-nent supplierswill have to adjust to thenew normal, i.e. combine traditionalmanufacturingwithIT/OT—integrationof IT systemswith operational technol-ogy(OT)systems.“Afewautomotivefac-tories in India are using substantialautomation in their production lines—robots, automated vehicles,AI,ML,pre-dictivemaintenance.The Covid-19 cri-sis would force other players totransform their operations leveragingdigital technologies,”addsRaghunath.
This, however, doesn’t necessarilyimply job losses in the sector.“Given lowlabourcostsinIndia,wedon’tseeasignif-icant change in the numberofworkers;there could be a change in job roles,”hesays,adding that newskill setswill defi-nitelyberequired.
Thetransitiontosmartmanufacturingpracticescouldalsoleadtomorecompet-itiveness of Indian auto factories. “If,becauseofthat,weareabletotakeagreatershare of the global value chain bydoingbetteronbothcostandqualityparameters,itmightleadtonetadditionofjobs,”arguesRaghunath.
Areport says auto firmsmust combine traditionalmanufacturingwith IT/OT
‘Automation of the shop floorwill create new jobs’
Motobahn
Towards a newautomotiveshop floor
● POST-COVID-19
● INTERVIEW: MANISH KUMAR, MD & CEO, National Skill Development Corporation
PORTRAIT: SHYAMKUMAR PRASAD
TheNewNormal
Socialdistancing
Workingwith lessermanpower
Revisingshift
schedulesFocusonemployeehealth andsafety
Modifyingplantlayouts
GECs air OTT shows tomake up for the dearth ofnew content
Ahmedabad
401 infra projectsshow cost overrunsof over `4.06 lakh crAS MANYAS 401 infrastructureprojects,each worth `150 crore ormore,have been hit by cost overruns ofover `4.06 lakh crore owing to delaysand other reasons,according to aMinistry of Statistics and ProgrammeImplementation report.Of the 1,701such projects,401 projects reportedcost overruns and 583 projects,timeescalation.“Total original cost ofimplementation of the 1701 projectswas `20,65,739.00 crore and theiranticipated completion cost is likely tobe `24,71,954.78 crore,which reflectsoverall cost overruns of `4,06,215.78crore (19.66% of original cost),”theministry's latest report for December2019 said.The expenditure incurred onthese projects till December 2019 was`10,89,178.11 cr,which is 44.06% oftheir anticipated cost.The ministrymonitors infrastructure projects worth`150 cr and above.
Aviationsectortoneed`35kcrextra funding: IcraTHE DOMESTICAVIATION industry,which has been impacted bythelockdown imposed to fight thecoronavirus pandemic,will requireadditional funding of `32,500-35,000crore during FY21-23,according torating agencyIcra.Industry-level debt isexpected to increase to `465 billion(around `46,500 crore) overFY2021-22,the agencysaid.At the same time,theindustryis expected to report revenuede-growth of 44% and a negative CAGRof 26% in 2021-2023,Kinjal Shah,Vice President at Icra,said during awebinaronThursday.
IRCONsignsMoUforinfraprojectswithRussianfirmIRCON INTERNATIONALLIMITED,aMiniratna PSU,has signed an MoUwithRZD International LLC,a subsidiaryofthe state-owned Russian RailwaysCompany,to explore opportunities forjoint development of railwayand otherinfrastructure projects inAsia,Africa andLatinAmerica.Both parties have agreedto form a joint India-Russiaworkinggroup to look intoways of developing astrong partnership,to coordinate,planand subsequentlyimplement projects inrailwayand other infrastructure sectorsnot onlyin India but also in countries ofmutual interest.
Quick
View
Rlys runs special trainsbut regular servicesunlikely before June 30NEARLYTWOMONTHSafteritsuspendedoperationsofpassengertrainsoverthecoronaviruscrisis,theIndianRailways (IR)resumedserviceswith15pairsoftrainsonselectroutes lastTuesday.Thesetrainswill runbetweenDelhiandsomemajorcities:Dibrugarh,Agartala,Howrah,Patna,Bilaspur,Ranchi,Bhubaneswar,Secunderabad,Bengaluru,Chennai,Thiruvananthapuram,Madgaon,MumbaiCentral,AhmedabadandJammuTawi.Thenationaltransporterissuedspecificguidelinesforpassengerstravellingonthesetrains.Therailwayshadalsooperatedover400trainsfromMay1toMay11toferrylakhsofmigrantworkersfollowingrequestsfromseveralstategovernments.However,onThursdayIRannouncedthatbookingsmadebeforeandduringthelockdownperiodforjourneystobetakentill June30onregulartrainshadbeencancelled,indicatingthatnormalpassengerservicesareunlikelytoresumebythatdate.
Low-endhousingtogetPPPboostaspartofcrisis reliefAS PARTOF the `20-trn relief packageto fight Covid-19,the Centre onThursdayextended the credit-linkedsubsidyscheme (CLSS) byayear to FY21,aiming at `70,000-crore of investmentin housing projects for the middleincome group,and also proposed tolaunch a scheme foraffordable rentalhousing complexes (ARHC) throughpublic-private partnership.The movesignals use of the PPPmodel,which hasbeen employedwith considerablesuccess in other infrastructuresegments,to boost the low-end housingsegment.The steps are expected toprovide much-needed impetus for therevival of real estate and alliedindustries like steel and cement.
JetAirwaysRPseeks freshEoIs forbankruptairlineJETAIRWAYS'INSOLVENCY resolutionprofessional onWednesdayinvited freshexpressions of interest (EoIs) forthegrounded airline.This is the fourth timethat EoIs have been invited for JetAirwayswhichwas shuttered lastyear.Interested parties can submit an EoI byMay28,while the final list of eligibleprospective resolution applicants (PRAs)will be given to the lenders'committeeon June 10,as perthe EoI document.
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Tendering activity inAprilwas driven by a sharp
pick-up in Roadways (188%y-o-y), Irrigation (469%),
Water Supply (2,390%), Real Estate (722%) and
WaterTreatment (1,361%)
—Emkay
EXPERTVIEWInfrastructure
THECOVID-19PANDEMIChaspummelledeconomicactivityandbroughtthetransportandlogistics industry,includingtheIndianRailways (IR),to a nearhalt.The behemoth,which stopped passenger operations fromMarch22,2020,hasgraduallyresumedser-vices since May 12. While movement ofgoods is allowed,freight is expected to bematerially curtailed. It is plain that theIndianRailwayswillbleedbigthisfiscal.
IRcouldlose`13,000-16,000croreinpassengerearningsthisfiscal:WithIRfer-rying 22-23 m passengers daily,we expectthe~50-daysuspensiontoleadtoapassen-gerearnings loss of `6,500-7,500 cr.Prob-lem is,passengertraffic and rail operationswould face high uncertaintyeven after theresumptionofservices.Evenundertheopti-mistic assumption that passenger opera-tions would gradually rebound by, say,10-20% in the first quarter of FY21 (postresumption),70-80% by the second quar-ter,and100%bythethird,IRisexpectedto
incur passenger-earnings loss of `13,000-16,000crorethisfiscal.
Lossof`12,000-15,000crestimatedinfreightearnings:AsIRmajorlycaterstocoresectors,theimpactofthepandemiconthesewill drawa ratherdismal freight traf-fic curve this fiscal.We expect the coal,ironand steel,cement,and petroleum,oil andlubricants sectors,which account for 75-80% of railwaytraffic,to face strong head-windsgivenfallingdemandinend-usersec-tors. Foodgrains, however, may be theextenuatingfactor.Assumingthatrail traf-ficwouldhavegrown3~5%on-yearthisfis-cal inanormalscenario,thepandemicmaylead to (on an optimistic basis) lost freighttraffic of 120-150 MT.That translates into`12,000-15,000croreofearningsdeficit.
Giventhatitstotalearningscouldfallby`25,000-31,000crore,IRcouldfacefinan-cial issues,with the operating ratio goingunder the pump.Counter-intuitively, thedecline in passengertraffic maynegate therisk emanating from falling freight.That’sbecausesubsidycostsaredirectlyrelatedtopassengernumbers.
But all is not lost.IRcould go forthe fol-lowing three strategies after the end of thelockdowntomakegoodsomeofthelosses:
Captureunconventional cargo: IR isbetter positioned now in the modal battlewithroadwaysbecauseofshortageoftruckdriversandrestrictedroadmovement.Fur-ther,owing to lowpassengertraffic,freighttrainscanberunpunctually.Thishighlightsa significant opportunity to engender a
modal shift in unconventional cargo (non-bulkcargo,agro-produce,ande-commerce)towards rail. Along with increasing con-tainer, parcel, roll-on-roll-off, and cargoexpress trains,collaboration with e-com-merce companies and logistics players willbeagoodmovetoenablemodalconsolida-tion and offer last-mile connectivity,a sinequanonforsuchcategories.
Leverage technological solutions forsafety: In orderto ensure passengersafety,IR may consider integrating the ticketingsystem with the Aarogya Setu app so thatonly low-risk passengers can embark onjourneys.Therailwaysshouldalsograduallyadopt technology to ensure no or minimaltouchtravelforpassengers.
Utilise the leanperiod toaccelerateworks toupgrade thenetwork:The lowtraffic on tracks also provides an opportu-nitytoexecutevariousrepair,maintenanceand upgradation works at a faster pace tomakeIRsafer,morereliableandefficient.Atestimony to this is the rehabilitation of acentury-oldbridgeintheSouthernRailwayzonewithin36hourstwoweeksago.
It’s a now-or-never opportunity for therailwaystoshowcaseitsabilitytoservenon-traditional segments and capitalise onprospectsemanatingfromthepandemictogetbackontrack.
AkshayPurkayastha isDirector,andGoleshGupta isManager,
Transport&Logistics,CRISILInfrastructureAdvisory
● IMPACTOF LOCKDOWNON INDIAN RAILWAYS
Handling atypical cargo,leveraging technology, andundertaking revampworkscould be smartways to dealwith losses due to Covid-19
Moveonnewlines to reducedamage
FINANCIALEXPRESS11 WWW.FINANCIALEXPRESS.COM
MONDAY, MAY 18, 2020
-100
0
50
100
150
0
400
800
1,200
1,600
Apr-18Aug-18
Dec-18Apr-19
Aug-19Dec-19
Apr-20
Value oftenders (` bn)
Growthm-o-m(%, RHS)
Irrigation12
Railways7
Communityservices14
Watersupply14
Realestate9
Powerdistribution
6Hospitals4
Watertreatment
2%
-100
0
100
200
300
400
0
200
400
600
800
Apr-18Aug-18
Dec-18Apr-19
Aug-19Dec-19
Apr-20
Value ofcontracts(` bn)
Growthratem-o-m(%, RHS)
Roadways9
Railways
11
Process
5
Water4
Others
1
Source: Projects Today, Emkay Research
On a mom basis, total tenders publishedgrew 30% in value terms in April’20…
The value of orders announcedfell 67% mom…
Breakdown of the number oftenders in April’20 (in %)
Project awards in April’20 (in %)
Roadways32
Powerequipment
69
DATAMONITOR
Awards hit even as tenderingwent up inAprilCovid-19-related disruptionsmarred awarding activity inAprilwhich fell by70% y-o-y,with a sharp decline beingwitnessed in Railways (-44%), RealEstate (-97%), Pipeline (-81%) andOthers segments (-100%). PowerEquipment (70%) and Roadways (49%)were the only segments thatreported growth in themonth. The total value of tenders came as a positivesurprise, going up 241% y-o-y and 30%m-o-m, albeit on a low base.
Akshay Purkayastha andGolesh Gupta
SUDHIR CHOWDHARY
GURGAON-BASED SPYNE, ANAI-dri-ven startup, that helps online busi-nesses with all kinds of photoshootsand photographers to leverage theirvisual content for business growth,hassuccessfully raised an undisclosedamount as growth capital in their pre-Series A funding. The investment wasled by Angellist, Smile Group, ManishAmin (COO, Yatra), Anil Goel (CTO,OYO),AnubhavSonthalia (CEO,Sokrati),Deepak Mittal (CEO, To The New),among other entrepreneurs.
The startup raised its seed funding
last year from investors led by the SmileGroup and otherangel investors.
Spyne was launched in 2018 by anIIT-Kharagpur alumnus Sanjay Kumarwho has worked with brands such asAmazon, Yatra, OYO, etc., and DeeptiPrasad, a Delhi School of Economicsalumnus with over eight years of con-sulting and marketing experience.ThefirmwillusethecurrentfundingtobuildandreinforcetheAI-basedimageeditingsuite thatwillhelpbusinesses ingettingimages edited four times faster withthe highest precision.The technol-ogy will also ensure that market-place image specifications andcustomisationsarefolloweddur-ing bulk processing, helpingbusinessessaveupto90%ofthecosts.
Sanjay Kumar, co-founderand CEO, Spyne, said, “Everybusiness, big or small, needshigh quality images and videosto sell its products and services
online.We are in the business of provid-ing the best visual content and photo-shoot services to them anywhere, any-timeat~30%quickerratewith99.99%accuracy.Withthenetworkof2500-plushighlycurated photographers across 35cities and advanced image processingand distribution technology, we areuniquely placed to cater to the largeincoming demand coming from busi-nesses in the post Covid-19 era.”
The startup is also reinforcing itsbusiness operations for SpyneStudiosand freelance photography networksacrossthecountry.Recently,itopeneditsfirststudio inDelhiNCRandaddedover150freelancephotographerstoitsexist-ing network of over 2500 freelancers.Spyne plans to spread its operationsacross tier 2 and tier 3 cities and then toSouth Asia and the Middle East to helpbusinesses order any kind of shoot atscale at anytime and anywhere.
Itcurrentlyprovidesawidearrayofphotoshoot services such as highquality images,videos, social mediacontent,360-degreeshoots,3Dren-dering, etc., to cater to industriesincluding sectors such as e-com-merce, real estate, fashion, jew-elleryand food.
SUDHIR CHOWDHARY
OVERTHELASTtwomonths,workfromhome has been the norm for most of us.Littlewonder,agrowingnumberofcom-panies have turned to online employeetrainingforacomprehensive,interactiveway for workers to learn.According toSameer Nigam, CEO and co-founder atStratbeans Consulting, a fast-growinglearning management solutions firm,theworldoftrainingistransformingataveryfastpace,frominstructor-ledtrain-ing in the past to a more evolved way oftraining with advancements like Artifi-cial Intelligence-powered chatbots.
Founded by Sameer Nigam, PrasoonNigamandPradeipAggarwal,Stratbeansprovides enterprises with a 360-degreeapproach that helps repurpose thefuture of work through continuouslearning, engagement, and inclusion ofeveryone in the value chain includingemployees, partners,vendors and cus-tomers.
Says Nigam,“Stratbeans helps bringall the learning activity onto a singleplatform which is accessible to eachstakeholder.This learning and perfor-mance support platform uses gamifica-tion, AI-enabled chatbot, interactive
learning videos leveraging adult learn-ing principles.”
Reminiscing about the initial years,hesaysStratbeansstartedatatimewhencompaniesacrosssectorswereusingtra-ditional methods of employee training.Back then, the importance of reskillingandupskillingwasalsonotfeltbyalotofcompanies. “In such an environment,embracingdigitalwasn’teveryone’scupof tea,”he says.
Stratbeans,thus,sawan opportunitytocreateaplatformthatprovidesaholis-ticdigitalstrategywheretheentirecom-pany can benefit from digitisation.Today, its automated learning frame-
works are helping enterprises in savingtimeandcostintrainingnewemployeesandupskillingtheexistingones.Thishashelped enterprises drastically reducetheir costs and has opened up new rev-enue streams for them.The company’smission is to empower enterprisesthrough advanced digital learning andperformance support solutions toengage, train and inspire employees forbettercustomerengagement.
Cuttopresent.Stratbeanshasenableddigitaltransformationforover150clientsglobally.WithapresenceinIndia,theMid-dle East, and the US, Stratbeans workswith large enterprises such as Tata,Gen-
pact,EXL,Aviva,HDFC,ASPEN pharma,and Honda.Stratbeans is also the exclu-sivepartnerofArticulate,aUS-basedtech-nology company that designs e-learningsoftware.More than 83 million learnersin 151 countries have learned newskills,gained new insight,and received career-boostingtrainingfromonlinecoursescre-atedwithArticulateapplications.
Stratbeans has been a bootstrappedcompany since its inception.The startupuses its funds forhuman resources,R&D,and marketing.It earns money from twolines of businesses —services and prod-ucts.Under services,Stratbeans has cre-ated various interactive forms of digitalaudio-visualmodulesforcapabilitydevel-opment.On the other hand,with its digi-tal transformation products,Stratbeansenables these digital learning videosthroughAI-basedplatformsandenhancesemployeeperformancethroughAI-basedchatbots.Lastyear,thecompanyclockedarevenueof$1.1million.
Today,thebenefitsofe-learningintheworkplace are taking the world by stormwiththemarketsettotouch$200billionby 2024.“Over the last decade,we havesomeamazingcasestudiesincludingSBICard,Tata,Genpact,etc.,”saysNigam,talk-ingaboutStratbeans’futureplans.“Wearecertain about the range and quality ofexpertise we have gained over the yearsand aim to capture the market in a morespecificandtargetedmannerintheyearsto come.In terms of revenue,we are tar-getingtohit$10millionby2021.Wearealsoplanningtoexpandourproductport-folioto includelearningcollaborationonsocial networking and binge-watchingframeworks.”
Stratbeans brings all thelearning activity onto asingle platformwhich isaccessible to each stake-holder in the value chain
● FUND RAISE
Book your shoot with Spyne
Startups● STRATBEANS
Transforming online learningwithAI
Spyne is an AI-drivenstartup that deliversimpactful photos andvideos; recently, it hasraised pre-Series A funding
(L-R) Stratbeans co-founders PradiepAggarwal, Prasoon Nigam andSameer Nigam
Sanjay Kumar,co-founder &CEO, Spyne
Ahmedabad
EducationFINANCIALEXPRESS12 WWW.FINANCIALEXPRESS.COM
ISHAAN GERA
IN INDIA,MUCHhastranspiredtechno-logicallyinthelastfortnight.Ontheonehand,the government’s contact tracingapp,Aarogya Setu reached 100milliondownloads.Besides,thegovernmentwasable to contact trace 100,000 peopleusing the app by using data of 12,500infectedindividuals,withanefficacyrateof23%. Ontheother,ICMRannouncedthatitwouldbeleveragingIBM’sWatsonto enhance performance.Although thepartnershipisonlylimitedtousingWat-son’s capabilities for chat, it is still a sig-nificant step in government relying onartificial intelligence to improve itsresponsetime.GiventhatIndiawillneedto ramp up testing in the coming
months,everyminutecounts.
Whyis ICMRusingWatson?By March 7, ICMR had 52 testing
labs readyandoperational,but as caseskept onpiling it had to increase testinginfrastructure.Today, as ICMR is clos-ing in on conducting 1 lakh tests a day,it has 360 government labs and 147private labs operational across thecountry. Registering test kits, keepingan inventoryandpresentingresults isa
logistical nightmare. So, ICMR tied upwithWatsonto improvedatabaseman-agement,using itschatservice.Watson,in this case, helps laboratories recorddata in the format prescribed by ICMRso that there are little infractions andICMR has regular and real-time infor-mation of conditions.
How many languages is the serviceavailable in andwhat all canWatsoncover?
Gargi Dasgupta, Director, IBMResearch India and CTO IBMIndia/South Asia, explains that at pre-sent the service is available in two lan-guages,HindiandEnglish.SheexplainsthatWatson,inthiscase,isnotonlypro-viding a menu-driven response plat-form but is relying on its natural lan-guage processing capabilities torespond to all kind s of questions. IBM,she says, collated documents fromICMR, to makeWatson learn on whatsort of questions could arise and howbest it couldanswerthem.HowWatsonreplies alsodependsonhoweffectivelyit can understand your question. If itcan match what you are asking it will
give a definitive answer; otherwise, itshall provide two-three solutions fromits knowledge database.
What are the savings due to thisprocess?
Eachtimeanoperatorwouldpickupthe call and answer queries, it wouldtake at least 3-4minutes.So,Watson issaving that time. Besides, ICMR canfocus on other analysis and not worryabout data entrywith the help ofWat-son, so that gives the agency moreresources to do research.
So,whatelse is IBM doingforICMR?As faras analysis is concernedICMR
has dashboards and database of theirown.Butwearealsoprovidingthemananalysis on requests placed withWat-son and howwe can better the system,saysDasgupta.IBM is also in talkswithICMR about expanding this to otherapplications.
[email protected] to send in
queries that youwantexplained,mailusat [email protected]
ISHAAN GERA
ALTHOUGH IT HAS been discussedmany times before in this column,onecannot everover-emphasise theneedofusingtechnologytocounterconcernsofprivacy and security.A fewmonths ago,whenmeeting people at cafeswas stillpossible,Imetanentrepreneurwhowasexperimentingwithblockchaintocreatea decentralised identitymanagementprogrammecalledEarth.ID.ShivAggar-wal, CEO of Earth.ID was clear thatblockchain could be the solution toensure privacy and data privacy. Hisproduct,he explained,did this by creat-ing a trustmechanism,allowing peopletoshareonlypartsofuserdataandcreatean additional layer of security.Earth.IDis a decentralisedwallet,which verifiesuser information stored on mobilephone and then encodes itwith hashesforblockchain.Ifavendordesiresaccessto confirm identity, the service asks theuserto share access.Once the identity isconfirmed, user's trust score getsupdated.AggarwalatthetimewastryingtoropeinmoreIndianplayerstoagreetothis system.
What is so different about Earth.IDfromtheDigitalLocker,whichtheIndiangovernment runs. While the DigitalLockerworks inasimilarmanner,wherethe usermust agree to grant access toorganisations for know-your-customerverification, unlike Earth.ID, data is
stored on the server, and the securityprotocols are not so stringent.Plus, thesystemof trust score onEarth.ID estab-lishesa furthermethodofverification.
Whilethetechnologymaycatchonaspeopletrytocutdownonphysical inter-actions, paper IDsmay become passe-this is already happening at airportsacross theworld-the real testwill be toincorporate such systems for contacttracing.Manygovernments andprivateinitiativeshavelaunchedtheirappsrely-ing on Bluetooth orGPS or both to helpcontain the spread of the virus. Theseapps are beingmade as secure as possi-ble,butcriticismfromprivacyadvocatesstems from issues related to data shar-ingandusertracking.
Aarogya Setu-India's initiative in thefield-isstrugglingwithasimilarproblem.Although the government has assuredthat informationwillbesharedonacen-traldatabase,and innoway,it canaccessuserdatawithout permissions,trust is aproblem.This trust deficit can be over-come using blockchain or distributedledgertechnology.Thedata,eventhough,storedonamobilephone,canbehashedand user permission can be mademandatoryforaccessingsuchdatabase.
Imagine,havinga locker in thebank.Now,even though the bank has one keyto thevault until you decide to useyourkey,thebankcannotwithdrawcontentsfrom the locker.Your key, in this case, ispermissiontoaccesslocationdata.While
thegovernmentcanextractpartsofdig-ital identifier attached to the Bluetoothdevice and traceotherdevices thathavecomeincontact,itshallneedpermissiontoaccesslocationinformation.Onceyougiveaccess,youcandecidehowlongyouwish to provide access for, and, thendecide to revokepermissions.
Whilethesystemmaywork,fornow,itneeds more innovation. At present,blockchainscan'tinteractwitheachother.Onceblockchainscaninteract,datacanbetransferred fromonedomain to anotheranonymously.Notonlywiththisenhancesecurity.Onceablockchain comesunderattack,itcantransferresourcestoanotherDLT; it can alsomean different govern-mentdepartmentscaninteractwitheachother.Thisbridgewillhelpmaketechnol-ogymorepervasive.
Another issue in this regard whichrequiresmoreresearchishowtobuildanAI,whichcandifferentiatebetweenper-
sonal data and anonymised data. Forinstance,mobility trends.If the govern-ment can somehowunderstandmobil-ity,itwillhelpthemaddressalotofcom-mon public issues. Smart cities canbecome smarter.Butwithout anonymi-sation,this is bothdangerous andviola-tive of privacy.AnAI,which can distin-guish betweenwhat can be sharedwithits masters andwhat cannot, can helpsolve problems of trust.A Facebook, inthis case,will knowhowmanypeople ina certain demographic like Jazz,but notknowwho they are.Meanwhile, it canstill carry out targeted advertisements.This anonymisation requires muchdeliberation.
Until then,thebestwecandoisshareinformation and keep questioning thegovernmentandbigbusinessestoadoptbettersecuritystandards.
Blockchain can be essential to address privacy, but it'simportant for blockchains to interactwith each otherfor the technology to have a significant impact
The Langlois Bridge atArles,Vincent van Gogh (1888)
●TECHSPLAINED@FE
Ready tochat
Science& tech● EAVESDROPPER
Building bridges
MONDAY, MAY 18, 2020
VIKRAMCHAUDHARY
WHENEVER THE WORLD changes itsworking patterns,arguesManishKumar,MD&CEO of the National Skill Develop-ment Corporation (NSDC), some jobs canbeatrisk,butmanymoregetcreated.“Thesamewillhappennow,inapost-Covid-19world,”he says.“Going forward, the key isconstant reskillingandupskilling.”
While there are reports that a sectionof the formal economyworkforcemaybeat risk of losing livelihoods—and espe-cially industries such as tourism, travelandhospitalityarebadlyhit—allisnotlost,it appears.
New job rolesDigitalcapabilitiesaregoingtobecru-
cial in future job roles, says NarayananRamaswamy,national head,Education&SkillDevelopment,KPMGinIndia.“Thosejobsthatdon’tneedaphysicalpresence(orminimumphysical presence)would be indemand.Analyticsandrelatedareaswouldsee an uptick, and we will see more jobrolescreatedacrossindustries.Intheshortterm,health-relatedjobroleswillseemoredemand,”he says.
KrishnaKumar,CEO&founderofSim-plilearn, the online certification trainingprovider, says that jobs in areas of digitalmarketing,datascience,machinelearningand artificial intelligence will increase.“Fullstackdeveloper,scrummaster,theseare the kind of roles thatwill bemuch indemand,”he says.
As workplaces are rebooting andbecoming smaller, the Covid-19 crisis iscreatingopportunitiesforrolescateringtoremoteworking,addsDivya Jain,founder& CEO of Safeducate, a skills trainingprovider.“Thelocalisationofsupplychainin retail, travel, fashion, food and experi-
enceswillgiveafilliptothe‘MakeinIndia’initiative, and drive the country’s smallbusiness owners to spearhead economicrevival,”she says.
To fight the pandemic, the pharma-ceuticals industry is pulling out all thestops.Jain adds thiswill lead to skilled jobopenings in the research, treatment anddiseasepreventionspace.
Siddharth Chaturvedi, EVP of theAISECTGroup—which runs a skills uni-versity,amongotherthings—expects sig-nificant increase in roles such as Covidmarshals, sanitationmanagers, generalduty assistants for office premises,telemedicine operators and the like.“In
the digital domain, promising rolesincludecybersecurityexperts,contentcre-ators, video editors, digital marketingexecutives,etc,”he says.
Reskilling and upskillingThe current crisis has forced us to
rethink on skilling.ArjunMohan, IndiaCEO,upGrad,theonlinehighereducationplatform, says that, today, anybodywhowants to seriously learn is learning.upGrad recently launched the Free 101Program initiative,where it is offering10upskillingprogrammesfreeofcosttocol-lege studentsandworkingprofessionals.
Similarly, Simplilearn has started the
Campus Connect initiative,which offersfree access to learning programmes forfaculty and students across 200 Indianuniversities.
NSDC has the e-Skill India e-learningaggregatorplatform—itconsolidatesB2Ce-learning portals operating over theinternet within the skilling ecosystem,enabling multiple e-learning players—stronginspecificskillingsectors—tosharetheirstrengths.
“Hardandsoft skills suchasdigital lit-eracy,learnability,agileleadership,coding,fungibilityandflexibilityarewhatpeopleshould focus on,” says RituparnaChakraborty of Teamlease. She adds that
allkindsofprofilesinhealthcarewouldbein demand, as would be digital skills inareasofmarketing,productdevelopment,sales,customerservices,onlineeducationande-workforcemanagement.
“Certain job roles are at risk, too,” shesays,“but that is a temporaryrisk.Any jobthat involves high touchwould be at riskfor the next 12 months for sure.All butthose inhealthcare,I suppose.”
Ramaswamy adds that, in the shortterm,tourismcouldbebadlyhit,butitwilldefinitely not go extinct.“Personalised,non-physicalservices—financialadvisors,insurancebrokers,coaching,counselling—will be replaced by online formats, andhencethecurrentface-to-facemodelsareatrisk.”Healsosaysthatcertainmanufac-turingjobs—thosethatcatertotheindus-trial automation/mass production era—couldbecomeredundantinthenearterm.“These could be replaced with bots andself-learningmachines.”
Jobrolessuchasfrontofficeexecutivesat hotels, travel and tour operators, eventmanagers, sports instructors and restau-rantservicestaffareatrisk.Theseemploy-ees, Chaturvedi says,will need to reskillthemselves.
Going forward, it appears peoplemayneed tobemulti-skilled,orskill-agnostic.“In addition to domain skills, complexproblem solving, communication andteamworkwill become very important,”saysKumarofNSDC.Jain agrees:“Wewillwitness an increase in versatility of skillstoperformdifferent roles.”
Essentially—andwe have known thisall along—to thrive, and not just survive,employees will have to focus on bothdomainskillsandfoundationalskills.Howyou are able to apply both of these to dif-ferent settings will determine how yougrowprofessionally.
❝
❝Therewill be a demand forjob roles like caregivers,customer services, also inlogistics and supply chain.
—DIVYAJAIN, CEO, SAFEDUCATE
❝
❝Digital capabilitieswill becrucial in many future jobroles. Health-related jobroleswill be in demand.
—NARAYANANRAMASWAMY, KPMG
❝
❝Roles in digital marketing,data science, ML, ALwill bein demand; also full stackdeveloper, scrummaster.
—KRISHNAKUMAR, SIMPLILEARN
● POST-LOCKDOWN
Jobs of the (near) future
Pearson launchesMyPediaAlexa skillPearson India has introduced aninteractive skill onAmazonAlexafor learners of all ages to learnEnglish.The PearsonMyPedia skilloffers engaging stories coupledwith fun facts, trivia, quizzes andrewards. It can be accessedon allAmazon Echo smart speakers,Echo Show smart displays, aswellasAlexa app for smartphones.
India’s first MAPL atRishihood UnivRishihoodUniversity, in Sonipat,Delhi NCR,will startwhat it says isIndia’s firstMaster ofArts in PublicLeadership (MAPL). Initiatedbythe RashtramSchool ofPublicLeadership,MAPL is a residentialprogrammeandwill be housed inthe 25-acre RishihoodUniversityCampus.Applications are open tillMay 30, 2020, and it is slated tocommence fromearly September.
Bada Business offerslifetimemembershipTo help entrepreneurs build newskills, edtech firmBadaBusinesshas started ‘lifetimemembership’thatwill offer them tools to helpthem re-strategise businesses andsolve problems, duringCovid-19.Initiative ofmotivational speakerVivek Bindra, Bada Business said itwill offer all businesses, and SMEs,knowledge into strategies to helpthem scale up andgrow.
Medeor hosp trainsstaff for Covid-19MedeorHospital, inManesar nearDelhi, has said it has given specialtraining to doctors, nurses andsupport staff on the coronavirustreatment protocols. Itwill nowwork as an independent clinicalunit for the treatment ofCovid-19positive patients, andwill alsotreat patientswithmild andmoderate symptomsofCovid-19.
Acer starts ‘Back toSchool’ campaignAcer India has started its ‘Back toSchool’ campaign for 2020, aimedat helping students easily procurea newAcer laptop.The companyhas partneredwith EduThrill, anedtech firm that uses gamificationto deliver tests, assessment tools.Acer said it is offering zero downpayment and EMI starting `1,666amonth for laptops for students.
Manipal Global tolaunch MIND seriesManipal Global Education Servicesin partnershipwith SpreadDesign& Innovation has launchedManipalInnovation andDesign (MIND)—itis organising a series of leadershipworkshops calledMIND Leaders.
FE BUREAU
●NEWS BRIEF
Top new techskills post-CovidABHIMANYU SAXENA
POST-COVID-19 some skills willbecomeobsoleteandsomewill takecentre-stage.Theonesthatmayhelpyousucceedpost-Covid-19are:Software development:Most
businesseswill be looking to trans-form to digital. This means moredemand for professionals who canbuild tools and software. Full-stackdevelopment is a skill that will behighlyvaluedoverthenextyear.Appdevelopment anddesign:
The ability to create, design anddevelopappsandcontentformobiledevices is expected to be valuedextensivelyacross industries.Data science:With right data,
companies will be able to under-stand better how to manage theirenterpriseandprepareforsituationslike thepandemicweare facing.AIandML:Technologiessuchas
artificial intelligence andmachinelearning coupledwith the Internetof Things and robotics have anextremelybright future.Emotionalintelligence:Allfour
parameters under EI—i.e. self-awareness,self-management,socialawareness and relationship man-agement—will need to be learnedand imbibed bymost professionalsif theywant to succeed.
Theauthoris co-founder,InterviewBitandScalerAcademy
To start from September 23
Integratewhole educationstructurewith e-learning
KAVITASAHAYKERAWALLA
COVID-19 HAS interrupted education ofoverabillion studentsworldwide.In suchtimes, the optimum solution to sustaineducation is online learning. Schools areconductingclassesonlineviaZoom,Moo-dle and proprietary school software.Thesuddenneedforonlineeducationhascre-ated an opportunity to experience howonline learning can improve the educa-tional landscapeandpolicies in India.
While there are policies that provideresources to implement online learning,integrating the education structurewithe-learning is absent.Themost daring useof online learning is byprovidingnation-ally standardised education, irrespectiveof social classandruralbackground.
There is a lack of structure or frame-workthatallowse-learningplatformsandmainstream education to amalgamateandprovideequaleducationforall.Creat-inganintegratedcurriculumthatisacces-sible across all boardswill lead to a seam-lesseducationinfrastructurethatbenefitsstudentsacrossIndia.Thisobstaclecanbecrossedbybetterpolicymaking and tech-nologypercolationbytelecomgiants.
Collaboration between government,school management service providers,edtech companies andpublic andprivateenablers is theneedof thehour.Acapabletaskforce isneededtoachievethiscollab-oration.Thiswillhelphighlight strengthsandweaknessesofthecurrentsystemandhelpdelivereffectiveeducation.
Theauthorisvice-chairperson,AmpersandGroupandVIBGYORGroupofSchools
RethinkingIndia’s trystwith e-learning
●COVID-19
●MBA, REBORN
IFIM B-school tolaunchMBA4.0
FE BUREAU
BENGALURU’S IFIM Business School hasstartedwhat it calls as India’s firstmulti-city,multidisciplinaryliberalprofessionalMBA,orMBA4.0.It’s forgraduatesof law,fashion,design,arts,social sciences;engi-neers with interest in design, arts, per-forming arts; and professionals like CAs,cost accountants,companysecretaries.
ScheduledtostartfromSeptember23,2020,MBA4.0 draws from the Future ofJobs report of theWorld Economic ForumandtheIFIM-NHRDNsurvey.ThefindingsshowedthatfutureprofessionalswouldbeT-shapedprofessionalsthatcombinebothaliberalmindsetandin-depthknowledgein a specialised area. Students will firstcomplete professional modules of MBA4.0 in Bengaluru, and thenwill move togreater Mumbai campus (VijaybhoomiUniversity,which ispartof IFIMgroup) togothroughtheliberalmodules.Admissionwill require test scores of CAT,XAT,MAT,CMAT,GMAT,NMATorGRE,andselectionwill beonline.The feewill be`12 lakh.
The lockdown has left students justifiablyworriedabout their educational prospects.Wewerereceiving queries about admissions process andrequests for early round of counselling.We arecommitted to ensuring student safety and havetherefore taken the process completely online.
—YajuluMedury, Director, Mahindra Ecole Centrale
EXPERTVIEW
Ahmedabad
From the Front Page
INTERNATIONAL 13FINANCIALEXPRESS
WWW.FINANCIALEXPRESS.COM MONDAY, MAY 18, 2020
LAYANODEH &SIDDHARTH PHILIPDubai/London, May 17
EMIRATESGROUP IS consider-ing plans to cut about 30,000jobs as the operator of theworld’slargestlong-haulcarrierseeks to reduce costs after thecoronavirus pandemicgroundedairtravel.
Thegroup could reduce thenumberof employees byabout30%frommore than105,000at the endofMarch,accordingtopeoplefamiliarwiththemat-ter.Emiratesisalsoconsideringaccelerating the retirement oftheA380 fleet—ofwhich it isthe biggest operator, some ofthepeople said,declining tobeidentifiedbecausetheinforma-tionhasn’tbeenmadepublic.
AspokespersonforEmirates
said the company declined tocommentonrumours.
Airlines across theglobe arecuttingjobsafterbeinghitwithan unprecedented near-totalshutdownoftravelasthehealthemergencyswept across conti-nents andgovernments closedborders and ordered popula-
tions to stay at home. About70%ofglobalcarriercapacityisidledandtheindustrystandstolose $314bn in2020 in ticketsales,according to the Interna-tionalAirTransportAssociation.
Emirates President TimClark earlier this month toldAbuDhabi-basedTheNational
thatheexpectsdemandforair-line travel to be“tempered”foratleastthenextcoupleofyears.He also called the pandemic ablackswanevent forthe indus-try, referring to a rare occur-rencewithextremeimpact.
Dubai’s government said inMarchitwouldfinanciallysup-porttheairline,whichhastakena slewofmeasures to shore upcash since the virus outbreak.Thoseincludetemporallyslash-ing salaries,groundingmost of
its passenger flights anddefer-ring the delivery of the lastbatchoftheA380superjumbos.
Still, profit for March wasmore than1.5 billion dirhams($408million) lower than ex-pected and the group lost over3.4 billiondirhams in revenuethatmonth,it said in itsannualreportpublishedlastweek.
Emiratesalreadydecidedla-styeartopareback itsA380or-der,kickingoffasweepingfleetreview at the carrier,with thesuperjumbo ceding its role asthe linchpin of a strategy thatmadeDubaitheleadinghubforflightsaroundtheglobe.Airbusannounced at the time thatA380productionwould end in2021.Thestate-ownedairline’sfleet comprises 115Airbus SEand155Boeing777.
—BLOOMBERG
Emirates considers cutting 30,000jobs, retirement ofA380s faster
●GROUNDED FEARS
MICHAELHOLDENLondon, May 17
BRITISH PRIMEMINISTERBorisJohnson admitted on Sundaythattherewaspublicfrustrationwithhisgovernment'smeasur-estoeasethecoronaviruslockd-ownfollowingwidespreadcrit-icismofthenewrules,whichheadmittedweremorecomplex.
Asapoll fortheObserverne-wspaperindicatedgrowingdiss-atisfactionwith Johnson'shan-dlingofthecrisis,hewroteintheMailonSundaypaper:“Iunder-standthatpeoplewillfeelfrustr-atedwithsomeofthenewrules.”
On Wednesday, ministersbegan a gradual easing of re-strictions inEngland,withpeo-ple who could not work fromhome encouraged to return totheir jobs whilst being told toavoid using public transport ifpossible.
Thechangesdonotapplytopeople in Scotland, Wales orNorthern Ireland,whose semi-
autonomousgovernmentshavenot eased the lockdown.Therehasbeencriticismthat thegov-ernment'smessageisconfusingand sent out mixedmessages.People are forbidden to invitefriends and relatives into theirhomes,forexample,but canal-lowinprospectivehomebuyersforpropertyviewings.
Sunday's Observer pollshowed42%nowdisapprovedofthegovernment'shandlingofthe crisis -- a fall of ninepointsfrom lastweek.That comparedwith 39% who approved, thefirsttimemorepeoplewereun-happywith the government's
performancethansupportive.“We are trying to do some-
thing that has never had to bedonebefore—movingthecoun-try out of a full lockdown, in awaywhich is safe anddoesnotrisk sacrificing all ofyourhardwork,”Johnsonsaid in theMailonSunday.“Irecognisewhatwearenowaskingismorecomplexthansimplystayingathome—but this is a complex problemandweneedtotrustinthegoodsenseoftheBritishpeople.”
So far 34,466 people havediedinBritainaftertestingpos-itive forCOVID-19,the respira-torydiseasecausedbythenovelcoronavirus,thehighest figureinEurope.Thelockdownhasalsodevastated the economy,withfigureslastweekshowingithadshrunkby5.8% inMarch.TheBank of England has said eco-nomicactivitycouldcontractbynearly25%intheApril-Junepe-riod, leading to the largest an-nualdecline inmore thanthreecenturies. —REUTERS
Johnson accepts public frustrationwith lockdowneasing rules
REUTERSBeijing, May 17
CHINA'S COMMERCE MIN-ISTRY said on Sunday it isfirmly opposed to the latestrules by the United Statesagainst Huawei andwill takeallnecessarymeasurestosafe-guard Chinese firms' rightsand interests.
Theministrysaid inastate-ment that it urges the UnitedStates to immediatelystopthewrongactions.
TheTrumpadministrationon Friday moved to blockglobal chip supplies to black-listed telecoms equipmentcompany Huawei Technolo-gies,spurring fears of Chineseretaliation and hammeringsharesofUSproducersofchip-making equipment.The newrulewent into effect onFridaybut would have a 120-daygraceperiod.
China's state-run newspa-per Global Times, citing an
unidentified source, reportedthatBeijing,in response to thenew limits on Huawei, wasready to put US companies onan “unreliable entity list” aspart of the countermeasures.
Thosecountermeasuresin-cludelaunchinginvestigationsand imposing restrictions onU.S. companies such asApple
Inc, Cisco Systems Inc andQualcomm. “The US has ut-ilisednational powerandusedthe so-called national securityconcern as an excuse, and ab-used export controls to con-tinue to suppress somepartic-ular firms in other countries,”China's commerce ministrysaid intoday's statement.
China saysopposed to latestUS rules againstHuawei
Marketsunlikely tobe overjoyedwith govt’s‘unexciting’package
Rural demand could comeback soon as activity contin-ues to be near normal there.Measures on the liquidityfrontshouldrevive rotationofmoney in credit markets.However, reviving economicgrowth could be challenging.Digesting thenewnormalwilltake time.The cycle will taketime to return to normal.”Dhiraj Relli, CEO of HDFC Se-curities, seconds this view.Hesays that that overall the lasttwo announcements havebeen small in terms of fiscalspend but big on reformsthrust.
Lockdown 4.0:Markets toopen, stateswill get todecide on roadtransport,zoning
Many state governmentshadraisedthisdemandduringtheir interactions with theCentre atvarious levels.
The district authoritieshave been told to demarcate“containment”and“buffer”ar-eas within red and orangezones as per the HealthMin-istry’s guidelines.
The restrictions on airtravel andMetro rail serviceswill continue,andschools,col-legesandothereducational in-stituteswill remain closed.
All social,political and reli-gious functions and gather-ingswill be barred,and placesofworshipwill remain shut.
While hotels, cinema halls,malls, swimming pools, gymswill continue to be closed,restaurantswill be“permittedto operate kitchens for homedelivery” only. “Sports com-plexes and stadiawill be per-mittedtoopen;however,spec-tatorswill not be allowed,”the
MHAhas said.“All other activitieswill be
permitted,except thosewhichare specifically prohibited,” ithas said. It is likely to open allservices as well, includingthose of barber shops, salonsand spas.
Thedecisiontoallowinter-state travel will greatly easepublic transportation,helpingmigrant labourers on theroads.
However, movement ofpeople will remain “strictlyprohibited”across thecountryfrom7 pm to 7 am,except foressential activities.
Inthecontainmentszones,onlyessential activitieswill beallowed. There shall be strictperimeter control to ensurethere is nomovement of peo-ple inorout of these zones ex-cept formedical emergenciesoressentialgoodsandservices,theMHAhas said.
The Centre has reiteratedthat those above 65 years ofage,pregnantwomen,peoplewith co-morbidities, and chil-dren below 10 years shouldstayathome.
It has specified that“statesandUTs,basedontheirassess-ment of the situation, mayprohibit certain other activi-ties inthevariouszones,orim-pose such restrictions asdeemednecessary.”
However, it has underlinedthat states and UTs“shall notdilute theseguidelines”.
While in its last guidelines,the Centre had made use ofAarogya Setu appmandatoryfor employees in an office andput the onus of implementa-tion on employers, the newguidelineshaveasked themtomake“best efforts” in that di-rection.
The MHA has also ex-empted people who do nothave smartphones.
Inthe last lockdownguide-lines, therewere considerablerestrictions in red zones, in-cludingbanonplyingofbusesevenwithin the zone,openingof market complexes andmany serviceswhich involvedclose contactwith customers.
Now,withmarketsopeningin red zones, all liquor shopsarealsoallowedtoopen,givingmuchneeded revenue fillip tostates.Consumption of liquorandpaanshall remainprohib-ited in public places. Earlier,such shops were allowed toopen in red zones only if theywere standaloneoutlets.
Airlines,hotelsstare at largejob losses
He said on Saturday,“I cer-tainly hope there will be amore significant package forthe aviation sector.”His hopeswere pinned on the financeminister's Sunday announce-ments,whichwasthefifthandthe last tranche of the revivalmeasures.
As isknown,duetothecashflow problem, all the airlineshave cut salaries of their em-ployees and even sent severalof themonunpaid leave.
Similar is the casewith thehospitality and retail sectors.Here also according to Crisil'sestimate, the organised dine-in segment of the restaurantindustrymay see its revenuesslashedbyasmuchas40-50%inthecurrent financialyearasconsumers are unlikely to getback to restaurants even afterthe lockdown is lifted.
Pradip Shetty, joint hon-orary secretary at The Federa-tion ofHotel&RestaurantAs-sociations of India (FHRAI),told FE that about 70-80%ofthe industrywill shutdownasdue to the lack of financialsupport, nobody has thewherewithal torunabusiness.“Business has come down tozero and is likely to remain sofor the next six months. Youwill see a huge number of joblossesas it isa labour-intensivesector,”Shettysaid.
Anurag Katriar, presidentat theNationalRestaurantAs-sociation of India (NRAI), toldFE that a huge number of joblossesandbusinessfailuresareinevitable, given the lack ofstimulus for the sector. “Weneed a better policy frame-work to make ourselves self-reliant. It is also clear thatwewill perhaps be one of the lastsectors to open up, whichmeansweperhapsneedmaxi-mumsupporttostayalive.Ourprimarydemandswere largelyaround policy and liquiditysupport and did not require amassive financial outlay fromthe government,” Katriaradded.
The old hotel chains maysurvive but a lot of new pro-jects that are heavily depen-dentonborrowingfromfinan-cial institutions will have nooption but to shut.Many ho-tels operating in tier-2 and
tier-3 cities are unlikely to re-sume operations. Standalonerestaurants are staring at ableak future too as in-diningwill remain stalled for some-time, evenwhen it restarts, itwill operate only at 30% ca-pacity which is not viable,Shetty said. “We wanted thegovernmenttotakecareofthewages. Somuch funds are ly-ing with the ESIC, some of itcould have been used towardssalary disbursal.Our expecta-tion of extending soft-loan tothe industry at zero interestrate has also not been met,”said adisappointedShetty.
RajneeshMahajan,CEO atInorbit Mall and director atShopping CentresAssociationofIndia (SCAI),saidthebiggestrequirementis liquidityfortheretail sector that directly em-ploys 12million people in theorganised segment.“Our cashinflows have stopped as thereisnosalebutoutflowstowardsbanking, one of the largestcomponents remains alongwith other fixed costs such assalaries,”Mahajan told FE.Thecurrent challengemay lead torationalisationofportfoliosbyretailers and further rejiggingofteamstrength,therebyjeop-ardising some jobs,Mahajanadded.
States’borrowing limithiked to 5%,key reforms amust to fullyuse thewindow
The spike in SDLs forcedsome states like AndhraPradesh not to accept bids inrecent auctions while Keralawas forced to borrowat a highrate of8.9%.
To create competitionamong states on the ease ofdoingbusiness,theendeavourwill likely be to make theprocesses simpler and trans-parent, reduce the timelinesfor various regulatory ap-provalsandeliminatephysicalinterface between the depart-ment and the business withtheultimateaimof increasinginvestments in the states toboostexports.Whiletheremaynot be any direct reference toland and labour reforms, theCentre could also push states
in this regard. The 15th Fi-nance Commission chairmanhas on several occasionssought reforms in importantfactors of production such asland and labour to boost pri-vate investments.
After failing to get thebackingof theoppositionpar-ties,whohaveobjected topro-posed removal of themanda-tory social impact assessmentand consent clauses from theland acquisitionAct, the firstNarendra Modi governmenthad kept its plan on hold in2015.Since the land is on theconcurrent list,whereboththeCentre and states have juris-dictions, there is a change instrategy to let the states bringaboutchangeswhichwill laterbe approvedbytheCentre.
The states will also likelyplay a key role in labour re-formsas theCentre is amalga-mating 44 central labourActsinto fourcodes.The IndustrialRelations Code empowersstates to offer flexibility to theinvestors, employing up to300from100now,toresort tolayoff,retrenchmentorclosurewithout government permis-sion.Takingthe lead,theUttarPradesh government has de-cidedtokeepmost labourlawsin abeyance for the next threeyears,while Madhya Pradeshchief minister Shivraj SinghChouhansaidhis governmentwouldseizethecurrentoppor-tunity to bring the much-needed reforms in the state’slabour laws to lure investors,including those likely relocat-ing fromChina.
“Statesneedtoget theiracttogether doing discom re-forms, ULB revenue, rationcard and ease of doing busi-ness. These 4 conditions arequite open ended and wouldhave to be defined bytheCen-treorelse therecouldbeambi-guity,”CARERatings said.
The states’ revenues couldsuffermassively in FY21 dueto lockdown and social dis-tancing to check the spread ofcoronavirus.At thesametime,their expenditure obligationshave risen.Officials fromoverhalfadozenstates toldFEthattheir states’own tax revenues(OTRs) inAprilwere less thanafourthoftheusual (estimated)level, with some putting thefigure at even 10%.This hadprompted several state chiefministershavedemandedthatthe FRBM-mandated fiscaldeficit ceiling be raised from
3%ofGSDPto5%forFY21toenable them to borrowmorefunds.While petitioning theCentre for additional funds tocombat the pandemic,manystates have front-loaded theirborrowings. Some even usedmorethan90%oftheQ1bor-rowing window, even disre-gardinghigh interest costs.
Even before Covid-19 hittheir finances hard, state gov-ernments had faced severerevenue constraints throughthe second half of the last fis-cal.Taxrevenuesof14states–whose budgetswere reviewedbyFE–grewameasly1.9% inthe first eleven months ofFY20,against 13%ayear ago.Tosoftentheblowtotheirbal-ance sheets, these states ap-plied the brakes on capital ex-penditure (flat growthagainst20% growth a year ago), butmightstillhavetoreport fiscalslippages for FY20.The com-bined fiscal deficit of all stateswas budgeted at 2.6%ofGDPin FY20, up from 2.4% inFY19. However, the actualcombined fiscal deficit ofstates in FY20 is believed tohave risen from the budgetedlevel.
NitinGadkariwill be theguest at e-Addatoday
One of the key strategistsin theBJPleadership,asUnionminister for road transportand highways, Gadkari hasearned a reputation in theCabinet as a crisis managerand doer,who has revived thetepid highways constructionsector.During the lockdown,he has been brainstormingwith officials and industrystakeholders to ensure thatthespeedof roadconstructiondoes not suffer.
TheAddawillbeconductedoverwebinar byAnil Sasi,Na-tional Business Editor, andRavishTiwari,Political Editor.
TheExpressAdda isaseriesof informal interactions or-ganisedbyThe IndianExpressGroup and features those atthe centre of change andwhose ideas touch thewaywelive and the waywework, es-pecially in these uncertaintimes.Former chief economicadvisorArvind Subramanian
and AIIMS director Dr Ran-deep Guleria were recentguests at the e-Adda.
Banks to bleedas no new IBCcases for a year,relief forMSMEs&‘covid debt’
“NCLTwas anyway the lastoption forus,sonowwill try toresolve cases outside courtthrough inter-creditor agree-ment (ICA) as much as possi-ble,”anotherseniorbankertoldFE.“Wemayseemorecasesget-tingresolvedthroughone-timesettlement (OTS), he furtheradded.SanjeevKrishan,partner& leader,deals,PwC,said,“Weexpectbankstousetherestruc-turingroutealotmoreoverthenextyearorso.”
Casting the IBC as a land-mark law,the government as-sertedthatjustthethreatofthelegislation has ensured recov-eryof asmuchas`5 lakhcroreup to February29 since its in-ceptionin2016.Thefigurewasarrived at by aggregating thedefault involved in asmanyas13,556caseswhere insolvencyapplications were withdrawnfromtheNCLTbeforetheywereadmitted, as defaulting pro-motersrushedtosettleduesforfears of losing their companiesoncetheproceedingsstarted.Inthe221casesresolvedsofarviaIBC,about`1.84lakhcrorewasrecovered,againsttheadmittedclaims of `4.13 lakh crore,marking a recovery rate of44%,Sitharamansaid.
Once theOrdinance comesinto force following the Presi-dentialassent,sections7,9and10 of the IBCwill remain sus-pended. Section 7 of the codeallows a financial creditor, ei-therbyitself or jointly,tomakeanapplicationforinitiatingthecorporateinsolvencyresolutionprocess against a corporatedebtor. Section 9 of IBC givespowertotheoperationalcredi-torstoinitiatethecorporatein-solvencyresolutionprocess af-terdefault.UnderSection10ofthe IBC,a defaulting companyhas the right to approach theadjudicating authority to de-clareitinsolvent,givingprotec-tionfromcreditors.
While the RBI has allowedborrowers a three-month re-payment holiday for termloans,keeping insolvencypro-ceedings in abeyancewould bean additional breather forbor-rowerswhomaydefaultonloanrepayments thereafter.
Even before the pandemic,the slowdown in the economyhad caused a deterioration incredit quality. For instance,SMA-2 loans– thosewhere re-paymentsaredelayedby61-90days–increasedbyabout143%betweenMarch2019andSep-tember2019,theRBIdatacau-tioned.Anyrepayment defaultpost 90days sees the exposureslipintoanon-performingasset(NPA) andbanksneed tomakebiggercapitalprovisions.
Veena Sivaramakrishnan,partnerat ShardulAmarchandMangaldas, said,“The blanketsuspension of defaults on ac-countofCovidcouldleadtoun-intended consequences.Ques-tions likewhyshould an entitynot refer itself to insolvency,what is the parallel regime ofresolution...what is the frame-work for creditors to come upwith a viable resolution planoutside of IBC,continue to re-mainunanswered.”
Corporate lawyerSumitBa-tra the proposals will “surelybenefit corporate entitieswhogenuinelywant to pull them-selves out of an economicslumporslowdownbutwillul-timatelyhamper the recoveryprospects of financial institu-tions in cases of existing de-faultsandinthosecasesaswellwhere the accounts have al-readybeendeclaredNPAs”.
AshishPyasi,associatepart-ner,Dhir andDhirAssociates,saidthatthesuspensionofpro-visionoffilingbythecompanyunder IBCmayworsen the sit-uation as these businesseswillbe forced to run the showwithmeansnotavailable.MakarandJoshi,partner,MMJCandAsso-ciates LLP, said that the gov-ernmentshouldhaveprovidedan option to those companiestochooseIBC,whoarenotcon-fident of sailing through thisperiod.
There isalsofearofnumberof cases to rise after one year.AbhishekDafria,vicepresident,Icra,said,“If the severityof thepandemic were to increase,thusdelayingeconomicrevival,then we could see a suddensurge in cases being referredunder the IBC after the one-yearperiod.”
REUTERSJerusalem, May 17
ISRAEL'S PARLIAMENT AP-PROVED on Sunday PrimeMinister Benjamin Ne-tanyahu's new unity govern-ment,endingmorethanayearofpoliticaldeadlock,buthestillfaces a trial startingnextweekforallegedcorruption.
His decision to share powerwith formerrival,centrist BlueandWhite leaderBennyGantz,opensthewayforNetanyahutoproceed towards a pledged an-nexation of parts of the occu-piedWestBank,landthatPales-tiniansseekforastate.
After three inconclusiveelections,the conservativeNe-tanyahuwillremainprimemin-ister for 18 months beforehandingovertohisnewpartner.
Gantz, a former armedforceschief,willbeNetanyahu'sdefenceministerand“alternate
primeminister”,anewpositionthatNetanyahuwill holdwhenGantztakesthehelm.
Byassumingthat“alternate”premiershiponcehehandsoverto Gantz,Netanyahu hopes toavoidhavingtoresignunderle-galrulesthatallowaprimemin-ister to remain in office even ifchargedwithacrime.
Israel's longest-servingleader, Netanyahu, 70, firstcametopowerin1996andhasserved three consecutive termssince2009.Hegoes on trial onMay24 on charges of bribery,breachoftrustandfraud,whichhe denies.“The peoplewantedunity, and that is what it got,”Netanyahutoldparliament,cit-ing a desire to steer clear of afourthelectionandtheneedfora national battle against thecoronaviruscrisis.
Lawmakersratifiedthenewadministration byavote of 73to46.
Netanyahu can now pushforward his plan to extend Is-raeli sovereignty to Jewish set-tlements and the JordanValleyin theoccupiedWestBank,ter-ritoryPalestinianswantfortheirownindependentstate.
“TheseregionsarewheretheJewish nation was born androse.ItistimetoapplyIsraelilawon them and write anothergreat chapter in the annals ofZionism,”hesaid.
But while Netanyahu hasset July1asastartingpoint forcabinet discussions on thehighlycontentious issue,thereis no publicly stated deadlinefor annexation of land that Is-raelcapturedinthe1967Mid-dleEastwar.
Palestinians haveveheme-ntlyopposed suchamove,urg-inginternationalsanctionsaga-inst Israel in response.Itwouldbe certain toheighten tensionsintheWestBankandGaza.
Netanyahu’snewIsraeli govt okayed,eyesWestBankannexations China injects $2.2 bn into
local chip firm amidUS curbsBLOOMBERGBeijing, May 17
CHINA’S STATE-BACKEDFUNDS pumped $2.25 billioninto a SemiconductorManu-facturing International Corp.wafer plant to supportadvanced-chip making asWashingtontightens technol-ogy restrictions on the Asiannation.
TheSemiconductorManu-facturing International Corp.plant’s registered capitaljumps from $3.5 billion to$6.5 billion after the invest-ment, the company said in anannouncementonFriday.
The chipmaker’s stake intheShanghai facilitywill dropfrom50.1% to38.5%,it said.The plant has capacity to pro-duce 6,000 14-nanometer
wafers a month and plans toboost that to 35,000.
The new investment cameasWashingtonmoved to pre-ventsalestoHuaweiTechnolo-gies Co. by chipmakers usingUS technology.
The Commerce Depart-ment on Friday said itwould require licenses beforeallowing US technology to beusedbytheChinese companyorits114subsidiaries,includ-ing its chip-designunitHiSil-icon.
SMIC is planning a Shang-hai share sale that could raisemore than$3billion,basedonits closing value ofmore than$13billiononFriday.
China is betting the localchipmaker can reduce thecountry’s reliance onUS tech-nology.
About 70% of globalcarrier capacity is idledand the industry stands tolose $314 billion in 2020 inticket sales, according tothe International AirTransportAssociation
Ahmedabad
BACK PAGE14 FINANCIALEXPRESS
WWW.FINANCIALEXPRESS.COMMONDAY, MAY 18, 2020
● POLLRESULTS
BRENDANMURRAYLondon, May 17
IT’S NOT QUITE a new ColdWaryet.Justthecoldshoulder.
Some 40% of Americanssaid they won’t buy productsfromChina,accordingtoasur-veyof 1,012 adults conductedMay 12-14 by Washington-based FTI Consulting, a busi-ness advisory firm.That com-pareswith 22%who say theywon’tbuyfromIndia,17%whorefusetopurchasefromMexicoand 12% who boycott goodsfromEurope.
Thepollalsofound:55%don’t thinkChina can
be trustedto followthroughonits trade-deal commitmentssigned in January to buymoreU.S.products
78%percent said they’d bewillingtopaymoreforproductsifthecompanythatmadethemmoved manufacturing out ofChina
66%saidtheyfavoUrraisingimport restrictions over thepursuit of free-trade deals as abetter way to boost the U.S.economy
Forobserversoftradepolicy,that last point is striking be-causea largemajorityintheUShavetraditionallyshunnedpro-tectionism.AccordingtoGallup,almostfour-fifthsofAmericansembrace international com-merceasanopportunityratherthat a threat, a number that’ssteadily risen over the pastdecade.
Aftertwoyearsoftariffwarsandnowthescourgeofacoron-avirus thatoriginated inChina,
it’s hardly surprising to seesomesouringofUSpublicopin-ion about the country’s maineconomic rival.But the degreeof the shift and the timingof it—lessthansixmonthsbeforeapresidential election — maymark a sea change in the elec-torate.It couldemboldensomeof China’s harsher critics inWashington,withhugepoten-tial consequences for financialmarkets.
“Foreigners are an all tooeasypolitical target in normaltimes. But once they becomeunpopular, politics can turndangerous,astheyturnintopol-icy,”saidChadBown,atradeex-pertatthePetersonInstituteforInternational Economics. “Ascandidates compete overwhocan adopt a more extremestance toward China betweennowandNovember,theirpost-electionpolicies towardBeijingare increasingly being set instone.”
President Donald Trumpdrove thewedge a little deeperlastweekwhenhesuggested inan interview on Fox Business
Network that the U.S. couldsever ties entirely. “There aremanythingswe coulddo—wecouldcutoffthewholerelation-ship,”Trump saidwhen askedabouttakingpunitivestepslikereducingU.S.visas forChinesestudents.
Beijing’s responseonFridayshowed littleeffort towina lik-abilitycontest.“Suchlunacyisaclearbyproduct,first and fore-most,of theproverbial anxietythat theU.S.has suffered fromsinceChinabegan its global as-cension,”accordingtoanedito-rial in theGlobal Times, a Chi-nesetabloidrunbytheflagshipnewspaperof the CommunistParty.
Trump’s divorce threat re-vivedmemoriesofhistweetlastAugustwhen,in theheatof thetradewar,he“herebyordered”Americancompaniestolookforalternatives, saying “we don’tneedChina and,frankly,wouldbe farbetteroffwithout them.”Hecalledonexecutivestobringjobs home andmake productsintheU.S.—repeatinghisargu-ment for a decoupling from
China that the pandemic hasonlyamplified.
FTI’s survey from lastweekshowed 86% of respondentssaytheU.S.relies tooheavilyonforeignsupplychains.
ForamajorityofU.S.compa-nies that dobusiness inChina,uprooting themselves fromworld'ssecond-largesteconomyisn’t really feasible.But accord-ing to aMarch surveyofmem-bers of theAmericanChamberofCommerce inChina,44%ofrespondents said it’s not possi-bleforthetwoeconomiestode-couple,down from66%polledinOctober.A fifth said decou-plingwillaccelerate.
ForUSconsumers,whomaynot fullygrasphowmuch theyconsumefromChina,thedesireforabreakupisintensifying.Ac-cordingtoKatDevlin,aresearchassociate at the PewResearchCenter’s GlobalAttitudes Pro-ject, “we’re in somewhat un-charted territory with howAmericansseeChina.”
A Pew poll taken in Marchshowed66%ofU.S.adultsheldChinainanunfavorablelight—arecordhighinPewsurveysgo-ingbackto2005andupalmost20 percentage points sinceTrump took office in January2017.The surveydidn’t explic-
itlyaskaboutthecoronavirus.Itmeasured favorable views at26%, down from 44% threeyears ago. That’s anunusuallyabruptturnbecauseittakesalottoswayAmericanopinionaboutforeignpowers.
Favourable sentiment to-ward the EuropeanUnion, forexample,has held fairly steadyaround50%since2002,Devlinsays.PositiveviewsonRussia,ontheotherhand,fellfrom44%in2007to18%lastyear—adropDevlin says becamenoticeableafterRussia’sactionsinCrimea.
Galluppollingpublished in2018showed favorable ratingsfor Japan peaking at 87%, re-covering from lows set twodecades earlier.That same re-portshowedfavorableviewsonChina’s surpassing50%forthefirsttimesinceearly1989—anupswing that's since been re-versed. “China’s diminishedviewsinrecentyearsisaninter-esting example because,whileviewstendedtofluctuatesome-what, they historically stayedwithina set range,”Devlin said.“While negative views did in-creaseamidtheU.S.-Japantradewars of the 1990s, it neverpeakedasdramaticallyaswe’reseeingwithChinatoday.”
—BLOOMBERG
COLLEEN BARRYSoave (Italy), May 17
FIAT CHRYSLER AUTOMO-BILEShas confirmeda requestforanItalianstate-backedloanto help the automotive sectorrelaunchfromthecoronavirusshutdown,amove that set offdebate in Italy over whethersuch money should be madeavailabletocompanieswithle-gal headquarters overseas.
FCAsaid inastatement lateSaturday that it was seeking6.3 billion euros ($6.8 billion)in financing through IntesaSanPaolo,orone-quarterof itsindustrial revenue in Italy.
Themoneywouldbe“dedi-cated exclusively to financingFCA's activities in Italy and in-tendedtoprovidefurthersup-port tosome10,000smallandmediumenterprises intheau-tomotive supply chain,” thestatement said. It noted thatthe automotive sector gener-ates 6.2% of Italy's gross do-mesticproductandrepresents7%ofallmanufacturing jobs.
Some politicians in thegoverning coalition ques-tioned the loan to the car-maker,whichmoved its legalheadquarters to the Nether-lands and fiscal headquartersto Britain in 2014 after com-pleting the merger betweenItaly's Fiat and U.S. carmakerChrysler.
But Premier GiuseppeConte told reporters Saturdaynight that the better questionis why big companies find itmore attractive tomove their
legal or fiscal headquartersabroad.
Conte said that the issuewould be addressed in an up-coming decree aimed at sim-plifyingbureaucracy.
“We don't need pose theproblemwho goes andwhy toBritain, the Netherlands orother countries. We simplyneed to make our countrymoreattractive.Weneedtoaskourselveswhytheygoabroad,''hesaid,underscoringthatFCAis amajor Italianemployer.
The shutdown of FiatChrysler production and
showrooms in Italybecauseofcoronavirushada``dramaticshort- andmedium-term im-pact on the entire automotiveecosystem,'' Fiat Chrysler saidina statement.
Fiat Chrysler began re-opening Italian plants at theend of April. The automakeremploys 55,000 people at its16 Italian plants and 26 re-searchanddevelopmentsites,making it Italy's largest indus-trialgroup.It isalso the largestpurchaser of auto parts in thecountry, accounting for 40%of around 50 billion euros inrevenue generated by 5,500suppliers.
Fiat Chrysler is in theprocess of a merger withFrenchcarmakerPSAPeugeot.Bothcarmakershavescrappeddividend payments promisedtotheirshareholdersaspartofthemergerdealbecauseof theCOVID-19 crisis, but they saythe deal remains on track toclose by the end of the firstquarterof2021. —AP
Fiat Chryslermakes$6.8-bn Italy-backedloan request to restart
ASSOCIATED PRESSSoave (Italy), May 17
IN SEPARATE, STARKwarnings,two major European leadershave bluntly told their citizensthattheworldneedstoadapttolive with the coronavirus andcannotwait to be saved by thedevelopmentofavaccine.
The comments by ItalianPrimeMinisterGiuseppeConteandBritishPrimeMinisterBorisJohnson came as both nationsaroundtheworldandUSstatesarestrugglingwiththeincreas-ing need to reactivateeconomies blindsided by thepandemic.
With 36 million peoplenewly unemployed in the USalone,thateconomicpressureisbuildingevenasauthoritiesac-knowledge the risks of kickingoffnewwavesof infectionsanddeaths fromavirus thatpeoplehavenoimmunityto.
Britain and Italy haverecorded themost coronavirusdeathsintheworldaftertheUS.
Pushed hard by Italy's re-gional leaders andweeks inad-vance of an earlier timetable,Conte is allowing restaurants,barsandbeachfacilitiestoopenMonday, the same day thatchurchservicescanresume.
''We are facing a calculatedrisk,intheawareness...that theepidemiological curve couldgobackup,”Conte said late Satur-day. “We are confronting thisrisk, andwe need to accept it,otherwise we would never beabletorelaunch.”
ConteaddedthatItalycould“not afford”towait until avac-cinewasdeveloped.
Healthexpertshavesaidtheworld could bemonths, if notyears,away fromhaving avac-cine available to everyone de-spite the scientific gold rushnowon to create a coronavirus
vaccine—orvaccines.“We would find ourselves
with our social andproductivefabric heavilydamaged,”Contesaid.Italy's economyis forecastto contract 9%thisyeardue tothe impact of the coronavirus,which has prompted Europe'slongeststrictest lockdown.
For his part, British PrimeMinister Boris Johnson, whowas hospitalized last monthwith a serious bout of COVID-19, speculated Sunday that avaccinemaynotbedevelopedatall,despitethehugeglobalefforttoproduceone.
“I said we would throweverythingwecouldatfindingavaccine,”Johnsonwrote in theMail on Sunday newspaper.“There remainsaverylongwaytogo,andImustbefrankthatavaccine might not come tofruition.” Johnson said Britainwas taking“babysteps”towardreopening,“trying todo some-thing that has neverhad to bedone before — moving thecountryoutofafull lockdown.”
“Despite these efforts, wehave to acknowledge we mayneed to livewith this virus forsome time to come,” Johnsonwrote.
Coronavirushasinfected4.6million people and killed over312,000worldwide,accordingtoatallybyJohnsHopkinsUni-
versityof government reports,whichexpertssayclearlyunder-counts the true toll of thepan-demic. The US has seen over88,000people die andEuropehashad at least 160,000dead,includingover34,000inBritainandnearly32,000inItaly.
Professionalsoccermatchesin Germany's Bundesliga re-sumed over the weekend, amovekeenlywatchedbytherestof the soccer world as well asAmerican sports leagues likeMLB,theNBA,theNFLand theNHL, which all face majorchanges to their operationsamidthepandemic.
Germany has won widepraiseforitswidespreadtestingamid the pandemic, whichsomecoachessaidwas theonlyway the league could resume.Not all fanswere happyaboutthe restart,which tookplace inemptystadiums,butthegameswere broadcastwidelyaroundtheworld.
Playerswerewarnednot tospit, shake hands or hug eachotherincelebrationsaftergoals.Teamstaffandsubstitutesworemasks on the bench,and ballsandseatsweredisinfected.
“Thewholeworld iswatch-ingGermanyto see howwedoit,”BayernMunich coachHansiFlicksaid.“Itcanactasanexam-pleforall leagues.”
European leaders areblunt: Vaccineswon’tcome soon enough
ADITI KHANNALondon, May 17
TWO SETS OF Indian-originsiblings dominate the annualtally of Britain'swealthiest asthe Hinduja and Reubenbrothers share the secondspot with a fortune of 16 bil-lion pounds each, whileBritish inventor-entrepre-neur James Dyson tops ‘TheSundayTimesRichList2020’with £16.2 billion.
Srichand and GopichandHinduja,who run theHindujaGroupofcompanies,lost6bil-lion pounds to slip from thetopslot in lastyear's list.Mum-bai-born David and SimonReuben lost £2.66billionoverthe past year,but their secondposition in the tally remainsunchanged from2019.
The coronavirus pandemicisseenasamajorfactorbehindthe fall in theoverallwealthoftheUK's richest people.
"Few people lost moremoney in the Indian stockmarket during the coron-avirus-induced crash than theHindujabrothers.Oneanalysissuggested their listed busi-nesses shed at least 67% oftheirvalueinMarchbeforeral-lying last month," notes thenewspaperanalysis.
"Thesharepricehashalvedat their lorry-maker Ashok
Leylandover thepastyearandfallenevenmoresharplyat In-dusInd, their Pune-basedbankingoutfit,withthebroth-ers trying to increase theirholding while the stock re-mainscheap.Elsewhere,theoilpricehasplummetedintoneg-ative territory,hitting theiroiland lubricants division Gulf,while its marine arm has alsobeen laid lowbythedownturninworld trade,"it adds.
Dyson, in comparison,hadagoodyearwithrisingsalesforhis products in China andother international marketsadding 3.6 billion pounds tohisfortunes,forhimtoemergethe richest on the list for thefirst time.
"With his family, Dysonnow ownsmore land in Eng-land than theQueen,totallingmorethan36,500acresacrossLincolnshire, Oxfordshire,Gloucestershire and Somer-
set,"the report said.The Reuben brothers are
poised to take a 10 per centstake in Premier League foot-ball club Newcastle United,whichwouldmark amajor in-vestmentfortheduowhowereborn in India and grew up inLondon.
"Waryofdebtandpublicity,the brothers prefer to keep alarge proportion of theirwealthincashandbonds.Withcombined business interestsvalued at £15 billion,we add£1billion fortheiryachts,jets,private properties and cash,"said theanalysis.
A fall in fortunes was alsotheoverallpictureforotherIn-dian-origin billionaires in theUK's top 20,withminingma-jorAnil Agarwal losing £2.07billion to come in at number15with an estimated fortuneof£8.5billionandsteel tycoonLakshmiNMittal losing£3.88
billion to drop to number 19with an estimated fortune of£6.78billion.
"The commoditiesmarkethas been badly shaken by theCOVID-19 outbreak —Agar-wal has donated 10 millionpounds to fight the disease inIndia — and falling shareprices atVedanta Limited andAngloAmerican lead us to cuthis wealth, factoring in £800million forpast dividends andotherassets,"the report said.
And,in reference toMittal,it adds: "Already battered bythe China-US tradewar, lowersteelpricesandthehighercostof rawmaterials have set theshare price sliding over thepastyear."
Overall, the wealth of thetop 1,000 richest people inBritain fell for the first timesincethefinancialcrash,downby 3.7% overall. The annualtally's compiler,RobertWatts,
said it marks a reversal of thetrend which saw Britain'swealthiest become richer andrichersincethefinancialcrisis.
"COVID-19has called timeon their golden period. Thisyear's rich list paints a pictureof Britain on the brink ofcalamity – twomonths afterlockdown and already billionsof pounds have been wipedout,"saidWatts.
"You may not like the su-per-rich,but it is hard to denythatoureconomywillneedthejobs they create and the taxesthey and their companies payifweare toescapeaprolongedrecession that causes furthermiserytomillions,"he said.
The listalsohasarecord25female billionaires this year,withthewealthiestwomanbe-ingKirstenRausing,whoownsathirdoftheholdingcompanywhich has the rights to TetraPak cartons. —PTI
Hindujas share 2nd spotwith Reuben brothers onUKRich List
KAUNAIN SHERIFFM,AVISHEK DASTIDAR &KARISHMAMEHROTRANewDelhi, May 17
ASMIGRANTS POUR in to theirvillages from urban Covidhotspots, theypose a growingchallenge to states fighting tokeeptheviralloaddown:howtoquarantinethem,inlargenum-bers, for at least 14 days andhowtomaintainsocialdistanc-ing during that quarantinegiven that most of them areasymptomatic.
Defining the challenge,AI-IMSDirectorRandeepGuleria,memberofthehigh-levelCovidcommittee,said:“Wemust re-member that these migrantscan be asymptomatic but arecarrying the infection.That iswhy isolation is most impor-tant.Only thatwill prevent thespread,rather than just testingsymptomaticpatients.Also,thenumber of migrants is huge.Testing.will runintolakhs.”
The numbers are a chal-lenge.An analysis of the trainnetwork opened for the mi-grants shows that of the 1000ShramikSpecialtrainsthathaverunsinceMay1toMay15,until
overtwo-thirdsofthem,or668,originated fromRedzones andasmanyas508of themmovedpassengers toGreenorOrangezones.
Inotherwords,anestimated8lakhmigrants,assumingeachtrain carried the designated1,200passengers,moved fromRed zone“hotspots”(classifiedbased on case load, doublingrate, extent of testing) to dis-tricts that have either beenCovid-free for the past 28days(Green) orare inOrange zones,which are classified as neitherGreennorRed.
Just 71 trains originatedfrom locations designated asGreenzones.Ofthese,30termi-natedinGreenzones,17inRedzones and the rest in Orangezones.
Of thedestination stations,mostfall instateslikeBihar,Ut-tarPradesh,Jharkhand,Odisha,MadhyaPradeshandWestBen-gal.Asmanyas295areinGreenZones,223areinhotspotswhile482areinOrangezones.
“Aspeopletravelhomefromhotspots,chances ofmigrantsturningpositivearehigher,”saidGuleria,whoheadsthementor-ing team for Bihar, one of the
primarydestination states formigrants.“The strategyhas tobe toprevent that spreadof in-fectioninruralcommunities.Soit is important that they arequarantined for 14 days andthosewhoaresymptomaticaretested;thosetested,areisolatedand treated in Covid care cen-tres,so that the chain of trans-mission is broken. And onlythose who remain asympto-matic should be allowed to gointo the community,” Guleriasaid.
Hisremarksassumesignifi-cancegiventhatmorethan350trainsmoved fromorigin dis-tricts that have more than a500-case difference from thetrain’sdestinationdistrict.UttarPradeshhad206trainscominginfromdistrictsthathavemorethan500 cases than the desti-nationdistrict.Biharisreceivingthemost trains,55of184,that
aretravellingfromredtoGreen.Manyofthemigrantsareon
theyoungerside andmayhaveamilderformofinfectionorre-mainasymptomatic,saidKSri-nathReddy,presidentofPublicHealthFoundationofIndiaandmemberoftheCovidhigh-levelcommittee.
“But the important thing isto prevent transmission fromthem to others. It means theyhavetobeisolatednotonlynon-infectedoutsidersbutalsokeptin relative isolation fromeachother,so that theviral load be-come less foreachperson.Oth-erwise,if theykeepexchangingthe virus, viral load will notcomedown,”Reddysaid.
TheIndianExpressreportedhowahighpositivityrate is be-ing seenamongmigrantwork-ers returning toBihar.Said thestate’s Principal Health Secre-tary: “Our challenge is to save
ourhomepopulationfromget-ting infected from migrantscoming to Bihar since the lastweekofApril”.
TheHealthMinistryalsoan-nounced last week a surveil-lance survey to test returningmigrants.
Classification of zones hasbeenmired incontroversywithstateslikeWestBengalobjectingtothedefinitionssetbytheCen-tre.
Among the source stations,mostlyinGujarat,Maharashtra,Karnataka,Telangana, Kerala,Andhra Pradesh, Tamil NaduandPunjab,668areinhotspots,71 are inGreen and261are inOrangezones.
Themost numberof trainshave originated fromGujarat.Data shows that Surat,whichsawmultipleincidentsofunrestandviolenceinvolvingstrandedmigrant workers, sent outaround 128 trains so far andplanstosendanother20imme-diately taking the total tally toaround148 - themost for anyone source station in India,mostly to Uttar Pradesh, andother states.Gujarat, inciden-tally,hassentthemostnumberofthe1000trainssofar.
After two years of tariffwars and now the scourge of acoronavirus that originated in China, it’s hardly
surprising to see some souring ofUS public opinionabout the country’smain economic rival. But the degreeof the shift and the timing of it— less than sixmonthsbefore a presidential election—maymark a sea
change in the electorate
Themoneywould be“dedicated exclusively tofinancing FCA's activitiesin Italy and intended toprovide further support tosome 10,000 small and
medium enterprises in theautomotive supply chain,”
the company said
An analysis of the train network opened for themigrants shows that of the 1000 Shramik Special trainsthat have run since May 1 to May 15, until over two-thirds of them, or 668, originated from Red zones and
as many as 508 of themmoved passengers toGreen or Orange zones
Most Shramik trains fromCovid hotspots;isolatingmigrants is the newchallenge
Hinduja brothers Reuben brothers
PRESSTRUSTOF INDIAIslamabad, May 17
PAKISTAN PRESIDENT ARIFAlvihaspromulgatedanorderto form a caretaker govern-ment as well as to conductelections in Gilgit-Baltistanprovince, amove strongly op-posedbyIndia.
Thepresidentialpromulga-tion came days after the Pak-istan Supreme Court onApril30allowedthefederalgovern-
menttoamenda2018admin-istrativeordertoconductgen-eral elections in the region.
The Gilgit-Baltistan Orderof2018providedforadminis-trative changes, including au-thorising the PrimeMinisterof Pakistan to legislate on anarrayof subjects.
India has conveyed itsstrongprotesttoIslamabadforits efforts to bring "materialchange"toterritoriesunderits"illegal and forcible" occupa-
tion after the apex court al-lowed holding of elections inGilgit-Baltistan.
Earlierthismonth,theMin-istryofExternalAffairsinDelhisaidademarchewasissuedtoaseniorPakistanidiplomatlodg-ing a strong protest over thecourtrulingandclearlyconvey-ing that the entire union terri-tories of Jammu andKashmirandLadakh,includingtheareasof Gilgit and Baltistan, are anintegralpartof India.
Pak President issues order to formcaretakergovt, conduct polls inGilgit-Baltistan
Pandemic effect?Americans giving‘made-in-China’the cold shoulder
Ahmedabad