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FRIDAY, 9 NOVEMBER 2018
16 pages in 1 section
NEW DELHI (CITY)
~7.00
VOLUME XXV NUMBER 147
PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE
MOODY’S PLACES
AIRTEL'S RATING
ON REVIEW
Hong Kong-based Moody’s Investors Service
has placed on review a possible downgrade
of the Baa3 issuer and senior unsecured
rating of Bharti Airtel and the ratings on the
backed senior unsecured notes issued by
Bharti’s wholly owned subsidiary, Bharti
Airtel International (Netherlands) BV.
The review reflects the company’s low levels
of profitability, particularly from its core
Indian mobile operations, negative free
cash flow, and higher debt levels. 2>
ECONOMY P6
RBI circular may send
100 more firms to NCLT
Eighty-100 stressed companies may soon be
referred to the National Company Law
Tribunal (NCLT), with the Reserve Bank of
India (RBI) making 100 per cent voting
mandatory for any debt-restructuring
proposal. “It’s not only the power
companies that are facing the brunt of the
RBI move, but many other companies from
the telecom and allied industries. In many
cases, a bank with less than 1 per cent vote at
the committee meetings has stopped
debt-resolution plans,” said a lender.
COMPANIES P3
Fortis Healthcare CEO
Bhavdeep Singh quits
Fortis Healthcare said on Thursday its CEO
Bhavdeep Singh has resigned but will
continue in his current capacity till a
successor is found. Singh has resigned from
his position by communication dated
November 8, 2018. The Board of Directors of
the company has accepted his resignation.
ECONOMY P6
Government assures
faster GST refunds
The government has assured exporters that
there is “no let-up in the sanction of goods
and services tax (GST) refunds” or that there
is no delay from the government’s side in
processing refunds of the GST. About 94 per
cent of the refund claims have been settled
by the Central Board of Indirect Taxes and
Customs (CBIC) and respective state
authorities, the CBIC said in a press release
on Thursday.
ECONOMY P4
Verma meets CVC, refutes
charges levelled by Asthana
CBI Director Alok Verma on Thursday met
Central Vigilance Commissioner K V
Chowdary and denied corruption charges
levelled against him by his deputy and
special director in the probe agency Rakesh
Asthana, officials said. Verma came to the
Central Vigilance Commission (CVC) office in
the late afternoon and stayed there for
about two hours, they said.
ON
SPECIALS
FRIDAY
STRATEGY: Dressing for
the occasion
Rooted in tradition, Raymond is
looking to grow by penetrating tier-III
and -IV towns. SAMREEN AHMAD writes
PERSONAL FINANCE:
Commercial property is
costlier, but delivers
better returns
Investors can earn a steady 7-9 per cent
rental yield in this segment, compared
to only 2-3 per cent in residential.
SANJAY KUMAR SINGH writes
ISSUES AND INSIGHTS:
Sniff? Yes. Paws? No.
The RBI isn’t inviolate. But the
government must remember
a maxim: “Nose in, paws
out”. Ask questions;
critique; but hands off the
till, says OMKAR GOSWAMI
E-paper
Since the Mumbai office of
Business Standard was closed on
Thursday (8 November), Delhi edition
is available for the e-paper
WORLD P7
DENHOLM TO REPLACE
MUSK AS TESLA CHAIR
6 airports get Centre’s
nod for privatisation
Willbegiventoprivate
playersfor30yearsona
revenue-sharingmodel
ARINDAM MAJUMDER
New Delhi, 8 November
T
he government on Thursday
decided to privatise six air-
ports. The ones chosen for
operation, management and
development through a public-private
partnership (PPP) model are Lucknow,
Ahmedabad, Jaipur, Mangaluru,
Thiruvananthapuram, and Guwahati.
This comes 12 years after Delhi and
Mumbai airports were privatised in
2006. The decision was taken at a
Union Cabinet meeting. “After the
modernisation of airports in Delhi and
Mumbai through the PPP model, we
saw a great improvement in the quali-
ty of the airports. Tourist flows also
increased. So we have decided to
develop six more airports under this
model,” said Minister of Law and
Justice Ravi Shankar Prasad.
A group of secretaries from the
Ministry of Civil Aviation and depart-
ments of economic affairs and expen-
diture, headed by NITI Aayog Chief
Executive Officer (CEO) Amitabh Kant,
will decide the contours of the sale.
Sources in the government said the
airports would be bid out for 30 years
and the chosen private player will be
given a controlling stake.
DISINVESTMENT TARGET: GOVT TO SELL ENEMY SHARES, EXIT DREDGING CORP
In a bid to meet the Centre’s steep
~800-billion disinvestment target, the
Cabinet, on Thursday, approved selling
of ‘enemy shares’, currently with the
Custodian of Enemy Property for India
(CEPI), in 996 companies, and gave its
nod to the government divesting its
Green shoots of liquidity for NBFCs
in commercial paper market
JASH KRIPLANI & ABHIJIT LELE
Mumbai, 8 November
The worst may be over for non-banking
finance companies (NBFCs) and housing
finance companies (HFCs) as far as rais-
ing funds from the commercial paper
(CP) market is concerned.
After the liquidity squeeze following
the default by the IL&FS group in
September, there are early signs of a
recovery in the CP market with non-bank
lenders (NBFCs and HFCs) raising ~300
billion in October.
Almost half of this, or ~150 billion, was
raised in the last week of October, albeit
at a higher cost, according to market
sources.
The Reserve Bank of India (RBI) data
on CP issuance by corporates and finance
companies also points to the shift in sen-
timent. After the amount of reported CP
issuances declined sharply in September
(see adjoining chart) and plunged further
to an almost six-month low in the first
fortnight of October, there has been some
recovery. The CP issuances rose by 19 per
13 >
India Inc staff addition in FY18 slowest in three years
Slowdown in industrial, infrastructure sectors and low volume growth in IT led to only 1.9% year-on-year rise in hiring
10 >
KRISHNA KANT
Mumbai, 8 November
A slower-than-expected economic
recovery has hit fresh hiring by
corporate India.
The employee count of India Inc
was up just 1.9 per cent year-on-year in
8> 2017-18, growing at the slowest pace in
at least three years.
In comparison, the headcount was
up 3.5 per cent year-on-year in the
previous year and 4.6 per cent in 2015-
16 (see chart).
At the end of March 2018, around
3.5 million people were employed by
India's top 171 listed companies that
are part of the BSE 200 Index. The
sample includes only companies
whose headcount is available for the
last six years.
The numbers have been sourced
from the Capitaline database and
companies' annual reports.
https://www.estore33.com/
www.business-standard.com
COMPANIES P2
RECORD DEALS
CHEER IT FIRMS
AAI REVENUE
FROM LEASE
RENTALS in ~bn
“The Airports
Authority of India (AAI)
will hold a minor stake,
just like it does at the
Delhi and Mumbai air-
ports. The private player
29.07 (31.0)
will hold at least 75 per
cent stake,” said an official
aware of the development.
The bidding will be
held in a revenue-sharing
model, where bidders are
‘14-15
required to pay a specified
share of gross revenue to
the AAI. This is known as Figures in brackets:
the concession fee. The Percentage of lease rental largely driven by revenue
in AAI revenue
bidder who quotes the
highest fee wins it. The
same model followed was during about ~100 billion from GMR and
the privatisation of Delhi and GVK. Sector experts feel the airports
Mumbai airports. chosen for privatisation will also get
Under the agreement, Delhi airport attractive bids.
operator GMR has to share 45.99 per
entire stake in Dredging Corporation of history with acquisitions within the public
India (DCI) to a consortium of four sector companies’ space, the consortium of
ports. The ‘enemy shares’ are valued at Visakhapatnam Port Trust, Jawaharlal
~30 billion at current rates, the Centre said,
while the Centre’s 73.47 stake in DCI is
valued at ~7.17 billion as on Wednesday’s
closing date. Given the government’s past
EARLY HOPE
Thecommercial paper marketis seeing
signs ofrecoveryfrom IL&FSfallout
Issuances (~ billion)
Source: Reserve Bank of India; fortnightly data
cent to ~949 billion in the fortnight end-
ed October 31, up from ~799 billion in the
previous fortnight.
Rating agency CRISIL in a statement
said there had been some change in mar-
ket sentiment over the past two weeks
These are largely permanent
employees as most companies don’t
report contractual workers and those
working for their sub-contractors. In
most cases, the headcount is largely for
the listed parent firm and operating
companies and excludes their
subsidiaries — domestic as well as
foreign ones.
In all 64,380 employees joined the
rolls of these companies in the last
fiscal year, down sharply from 116,300
a year ago and 146,800 in 2015-16.
The high point for the job market
was 2013-14, when India Inc's
headcount was up 6.2 per cent and
183,707 people had joined the rolls of
these top 171 listed companies.
Experts attribute this to the
continued slowdown in the industrial
and infrastructure sectors and low
volume growth in the information
technology (IT) industry. “Till a few
years ago, infrastructure, especially
TOP PICKS FOR SAMVAT 2075 P15
LOOKING FOR VALUE IN
THE NEW SAMVAT
The six airports are:
Lucknow
Ahmedabad
Jaipur
Mangaluru
38.36 (30.6)
Thiruvananthapuram
33.79 (31.2)
31.02 (23.9)
Guwahati
cent of its revenue with
the AAI every year. GVK,
which operates the
‘15-16
‘16-17
‘17-18
Mumbai airport, shares
38.7 per cent of the rev-
enue. The AAI’s profits are
it earns from these two
airports. It has earned
Turn to Page 7 >
Nehru Port Trust, Kandla Port Trust, and
Paradip Port Trust is likely to acquire the
Centre’s stake in DCI at a premium.
ARUP ROYCHOUDHURY writes
with gradual easing in funding access for
non-banks.
Krishnan Sitaraman, senior director,
CRISIL Ratings, said CP volumes had
increased in the last week of October and
if the trend continued, rollover rates
should be higher in November.
Seconding that view, Lakshmi Iyer,
chief investment officer (debt), Kotak
Mutual Fund, said, “Right now, CPs up to
three-month maturities are having
demand. However, the sentiment has
improved. The issuances in the CP mar-
ket could possibly cross ~1 trillion in
November.”
Experts say the larger non-bank enti-
ties are covered to meet their near-term
repayment cycle, and hence the much-
talked about crisis may be averted.
The 50 large CRISIL-rated non-banks
have debt repayments worth ~950 billion
due in November. Of this, ~700 billion is
related to CPs maturing. While some non-
banks are well-placed to meet debt repay-
ments without using the bank lines, oth-
ers may have to do so, at least partially,
CRISIL said. Turn to Page 7 >
construction, was the main job
creator at the lower end while IT
services exporters created most of the
new jobs at the higher end of the
salary bracket. Both are now facing
growth headwinds,” says G
Chokkalingam, founder and
https://t.
TWO YEARS ON, DEMONETISATION CONTINUES TO DIVIDE
Note ban expanded
tax base: Jaitley
FM says move led to digitisation, helping RuPay,
UPI overtake Mastercard and Visa
SCARS MORE
VISIBLE
NOW, SAYS
MANMOHAN
On the second
anniversary of
demonetisation on
Thursday, former PM
Manmohan Singh
advised the Narendra
Modi government to
“WHAT HAS HAPPENED TO PROPHETS OF show prudence,
thought and care in its
DOOM WHO SAID INDIA'S GDP WILL
handling of economy
DECLINE BY AT LEAST 2%? FOR THE FIFTH policymaking. “I urge
YEAR RUNNING INDIA WILL BE THE the government to
FASTEST GROWING (LARGE) ECONOMY IN restore certainty and
THE WORLD. ... (THEY) HAVE BEEN visibility in economic
policies,” the former
CONCLUSIVELY PROVED WRONG”
prime minister said. 4 >
ARUN JAITLEY, FINANCE MINISTER
INDIVJAL DHASMANA
New Delhi, 8 November
Personal income tax (I-T) collection rose 20.2 per
cent and corporation tax 19.5 per cent in the first sev-
en months of the current financial year (2018-19 or
FY19), over the corresponding period of the previous
year (2017-18 or FY18), said Finance Minister (FM)
Arun Jaitley on Thursday. For this, he credited the
government decision to demonetise high-value cur-
rency notes on November 8, 2016.
In the Budget for FY19, the government targeted
19.88 per cent growth for personal I-T and 10.15 per
cent growth for corporation tax.
Quoting a plethora of statistics, Jaitley said on
his Facebook page in the two years before demon-
etisation — 2014-15 (FY15) and 2015-16 (FY16) — “IT IS OFTEN SAID
6> direct tax collections increased 6.6 per cent and 9 THAT TIME
per cent, respectively. Since demonetisation, the
IS A GREAT
increase has been 14.6 per cent in 2016-17 and 18 per
cent in 2017-18. HEALER. BUT
He also said the formalisation of the economy
because of demonetisation and the goods and serv-
ices tax (GST), rolled out in July 2017, had yielded
UNFORTUNATELY,
IN THE CASE OF
DEMONETISATION,
THE SCARS AND
growth in indirect tax collection as well.
“In FY15, the indirect tax-to-gross domestic prod-
uct (GDP) ratio was 4.4 per cent. Post-GST (sic), it
WOUNDS OF
has climbed up by at least 1 percentage point to 5.4 DEMONETISATION
ARE ONLY GETTING
per cent,” he said in his post, “Impact of
Demonetisation”. MORE VISIBLE
He said despite an annual I-T relief of ~970 bil- WITH TIME “
lion to the smaller taxpayers and a ~800-billion to MANMOHAN SINGH,
the GST assessees, tax collections have gone up. FORMER PRIME MINISTER
Turn to Page 7 >
FLASH STRIKE DELAYS 50 AIR INDIA
FLIGHTS FROM MUMBAI
The Air India ground staff — affiliated to a Shiv Sena
labour union — went on a flash strike from
Wednesday night, disrupting flights at Mumbai
airport in the process. However, the strike was
called off on Thursday night. Air India operates around
470 daily flights and around 50 of those were delayed by
close to two hours across the network, by Thursday
afternoon. Ground handling functions like check-in and
loading/unloading of bags are handled by the airline’s subsidiary Air India Air
Transport Services (AIATSL). Its staff comprises both Air India employees on
deputation or transfer, and employees on contract. The contract staff went on
strike from 11:00 pm on Wednesday, demanding reinstatement of three
employees who were sacked from work as well as recognition of their
labour union. 3>
JOBS GROWTH IN Dewan Housing Finance. They were
followed by insurance companies such
CORPORATE INDIA as HDFC Standard Life and ICICI
Prudential Life Insurance.
The headcount in the financial
services industry was up 5.6 per cent
year-on-year in 2017-18 to 922,000.
Companies in this industry added
49,212 people to their rolls in 2017-18,
though down from 52,561 people a
year earlier. The sector accounted for
three-fourths of new jobs created in
the last fiscal year, stealing the mantle
from the IT services exporters such as
Based on the numbers of 171 out of 200 BSE 200 index
companies Source: Capitaline, companies' annual report
Tata Consultancy Services, Infosys
and Wipro.
In comparison, top IT exporters
managing director, Equinomics added just 6,776 people to their rolls in
Research & Advisory Services. 2017-18, accounting for only 10 per cent
Most new jobs were created by retail of all fresh hiring by India's top 171
lenders, especially non-banking companies in the last fiscal year. This
finance companies such as Bajaj is much lower than the past track
Finance, Edelweiss Financial Services, record of the IT industry.
Indiabulls Housing Finance and Turn to Page 7 >
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2 COMPANIES
>
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 1

IN BRIEF
Mphasis buys automation
firm Stelligent for $25 mn
Record deals cheer tech companies
ROMITA MAJUMDAR enterprise side, the whole customer retail. Half of all deals it signed by val-

Mid-tierITservicesfirmMphasison
Mumbai, 8 November
ORDER BOOK experience management and integra-
tion of some of our platforms to deliv-
ue terms came from North America.
Pune-based Persistent Systems,

T
ThursdaysaidithadacquiredUS-based he September quarter’s finan- Tech Mahindra posted er solutions in the customer experience despite negligible revenue growth in
cloudtechnologyservicescompany cial results of information deals worth of $ 550 mn area has been a big component,” said the quarter, said the demand pipeline
StelligentSystemsLLCfor$25millioninan technology (IT) majors have during the quarter, with Manoj Bhatt, its financial head, during looked very robust and was confident
allcashdeal.Virginia-basedStelligent delivered festive cheer, at least on the communications a post-earnings meet. of a bounce-back, with very strong
SystemsspecialisesinDevOpsautomationonAmazonWebServices the deals front. vertical constituting Nirmal Bang analyst Girish Pai says growth in the second half of 2018-19. It
apartfromhavingexpertiseinfinancialservices,whichhelpcusto- Most of the majors saw impressive $550 mn the deal wins posted by Infosys were is seeing strong demand on the digital
merstodeployapplicationsonthecloudwithgreaterspeed,agility order booking, reporting deals with a Infosys reported a record helped by an excellent demand envi- side, it says, especially in the health
andsecurity.“TheadventofpubliccloudinfrastructureandSaaS record amount in total contract value high large deal TCV of ronment and aggressive bidding. With care vertical, with bigger deal sizes,
softwarehaselevatedtheimportanceofrapidautomationinpro- (TCV). Tech Mahindra, for example, $2.03 bn in the quarter the $700-million Verizon deal, Infosys, compared with the earlier period.
ductdevelopmentandproductengineeringforenterprisesmoving reported an all-time high in net new against all estimates which does not have a a strong com- Zensar reported bookings with
tothecloud,”saidNitinRakesh,CEOandexecutivedirector, deal wins, with a TCV of $550 million. munications portfolio, has managed to TCV of $290 million in the first half of
Mphasis.“WithStelligent,webelieveweareuniquelypositionedto Infosys recorded its best-ever large deal TCS reported $4.9 bn enter a space occupied largely by TCS 2018-19, of which $120 million was in
takeadvantageofthismarketopportunity,”hesaid.Establishedin wins in a quarter, with a TCV of $2 bil- worth of deals, with andTechMahindra,headded.“Clearly, the September quarter. Among the
2007,StelligentisapremierconsultingpartneronAWSPartner lion (the previous highest was $1.2 bil- almost 50% coming in the market is in good shape. As we other mid-size IT firms, Hexaware
Networkandhasateamofover50engineerswithmorethan100 lion), almost 63 per cent of which were from North America shared earlier, our view is the demand ,and Mindtree said they expected a
certifications.ItcountsmanyfirmswithintheFortune500listsuch new deals. Tata Consultancy Services environment is quite strong across softness in new deal closure.
asWashingtonPostandVerizonasitsclients. PTI< (TCS) reported quarterly large deals many of our large sectors. We see good Mindtree won deals worth $271 mil-
(new deals and renewals) with $4.9 bil- in spending to core transformation and TechMahindra(fifth-largestamong demand across all the geographies; we lion, of which $225 million were
lion inTCV(comparedto$4.8billionin integrated digital deals, as opposed to ITservicecompanies)saiditwasseeing see stable demand,” said Salil Parekh, renewals and $49 million in new deals.
MRF Q2 profit India pips US to the June quarter). a consulting-heavy phase earlier. very interesting deal wins, with clients chief executive at Infosys. The company indicated some delay in
falls 12.29% to become 2nd-largest Wipro did not disclose this num-
ber, but indicated a good quarter of
Also, continuing momentum of deals
signed that will flow into revenues in
embarking on transformation plans.
“We are winning synergy deals
TCS, the largest, attributed differ-
entiated capabilities for its $4.9-billion
new deals from the US and Europe
had affected its revenues, though it
~2.63 billion smartphone market order booking. “A stronger demand the early part of the year,” said which balance out the revenue streams deal TCV, of which $1.5 billion came was expecting to see this recovering in
TyremajorMRFonThursday IndiahasovertakentheUSto environment was helped by continued Kanwaljeet Saluja, analyst, Kotak on a quarter-on-quarter basis. Looking from banking, financial services and the December quarter, despite season-
posteda12.29percentdecline becomethesecond-largest increase in digital sizes, aided by a shift Institutional Equities. at the deal win composition, on the insurance (BFSI) and $0.7 billion from al weakness.
initsprofitat~2.63billionfor smartphonemarketinthe
thequarterendedSeptember July-September2018quarter,
30,onaccountofhigherexpe- accordingtoareportbyresea-
nses.Thefirmhadreporteda
profitof~2.99billionduringthe
sameperiodoftheprevious
rchfirmCanalys.India,which
sawashipmentof40.4million
unitsduringthethirdquarter, RB’s India growth flattens in Moody’s places
spite of Swachh Bharat boost Airtel on review for
fiscalyear.Totalincomeroseto wassecondtoChinawhere
~40.04billionforthequarter 100.6millionsmartphones
underreview,up9.41percent wereshipped,thedatashow-

ascomparedwith~36.60bil-
lioninthesameperiodofthe
previousyear,MRFsaidina
regulatoryfiling.Totalexpenses
inthesecondquarterofthisfis-
calyearstoodat~36.11billion,
up12.17percent,asagainst
~32.19billionreportedinthe
correspondingquarterayear
ago.Theboardofdirectorshas
alsoapprovedthepaymentof
interimdividendof~3persha-
reforthefinancialyearending
March31,2019. BSREPORTER<
Godrej Properties
cuts net debt by
half in one year
RealtyfirmGodrejProperties
hasreduceditsnetdebtby
51percentinlastoneyearto
~15.39billionmainlywiththe
helpofbettersalesbookings.
ThenetdebtofGordej
Properties-therealestatearm
ofGodrejgroup-stoodat
~15.39billionasonSeptember
30,asagainst~31.37billiona
year-ago,accordingtoan
investors'presentationforthe
secondquarterofthisfiscal
year.Theaverageborrowing
coststoodat7.88percentason
September30asagainst8.1per
centayear-ago.Netdebt-
equityratiohasalsoreducedto
0.6from2.08duringtheperiod
underreview.Mumbai-based
GodrejPropertiessales
ed.Smartphoneshipmentin
theUSwasat40millionunitsin
theJuly-Septemberperiod.
"IndiaovertooktheUSthis
quartertobethesecond-
largestmarket,thoughboth
countrieswerehitbyweaker
seasonalperformancecom-
paredwithlastyear,"itsaid.
Worldwidesmartphoneship-
mentsfellby7.2percentyear-
on-yearto348.9millionunits
duringJuly-September2018,a
fourthconsecutivequarterof
decline,Canalyssaid. PTI<
Telcos tell DoT on
proof of concept
sites for digital KYC
Telecomoperators,including
BhartiAirtel,RelianceJio,and
VodafoneIdea,haveinformed
thetelecomdepartmentabout
theirreadinesstoconductproof
ofconceptforthenew‘alter-
natedigitalKYCprocess’attwo
locations,asstipulated.The
DepartmentofTelecom(DoT)
hasalsoissuedthedetailsof
theprocedureandmodalities
tobefollowedbytelecom
operatorsforissuingnew
mobileconnectionsusingthe
alternatedigitalKYCprocess.
AccordingtoaDoTcircular
datedNovember6,BhartiAirtel
hasensured“readinessto
conductPoC(proofofconcept)”
inDelhiandMeerut,while
Company saw sales growth slowing to 1.8% in 2017-18
ARNAB DUTTA
New Delhi, 8 November
RB India, local arm of British con-
sumer goods giant Reckitt Benckiser,
hit a slow lane in 2017-18.
The maker of widely used hyg-
iene brands Dettol, Lysol, and Harpic
registered a 1.8 per cent rise in rev-
enue from the year before, to
~58.1 billion (data from the office of
the Registrar of Companies). This
was much below the rise for the
earlier two years, of 13 per cent in
2016-17 (FY17) and 16 per cent in 2015-
16 (FY16).
The profit numbers for FY17 and
2017-18 (FY18) and were not available.
In FY16, the net profit jumped 105 per
cent to a little over ~15.1 billion.
RB’s India business depends heav-
ily on its health and hygiene related
products. Since 2014, this had been
riding on the growing awareness on
these subjects. In line with Prime
Minister Narendra Modi’s flagship
Swachh Bharat Mission, it had launc-
hed a ~1-billion campaign to further
promote hygiene products.
Dettol contributes an estimated 60
per cent of RB’s revenue here; Harpic
generates a little over 10 per cent.
Avantha offers ~24.3 billion
Rival Hindustan Unilever that
sells hygiene products under the
Lifebuoy and Domex brands, had
raised a pitch on similar lines. It had
begun a drive to educate consumers
in Bihar about the importance of
hygiene. It then expanded this in ear-
ly 2018 with a Swachh Aadat, Swachh
Bharat programme, targeting chil-
dren across India.
Kolkata-based ITC that owns rival
brads Savlon and Nimyle is also try-
ing to lure consumers. Reckitt’s per-
formance in FY18 might be showing
the impact of the then newly intro-
duced goods and services tax (GST),
which took effect from July 1, 2017.
The firm had noted a loss of sales in
mid-2017, when businesses were
struggling to realign operations with
the new tax regime. The third-party
distribution system, comprising
mostly the wholesaler and stockist
channels, had come to a near halt.
RB’s global management had said
in July 2017 that “sales have been hit
by the (GST introduction), which has
prompted retailers to slash their
prices”, referring to its June quarter
business. “The company has suffered
lower orders from some customers in
June because of the new GST”.
rating downgrade
ROMITA MAJUMDAR
Mumbai, 8 November
Hong Kong-based Moody’s
Investors Service has placed
on review a possible down-
grade of the Baa3 issuer and
senior unsecured rating of
Bharti Airtel (Bharti) and the
ratings on the backed senior
unsecured notes issued by
Bharti’s wholly owned sub-
sidiary, Bharti Airtel Intern-
IN SLOW LANE ational (Netherlands) BV.
The review reflects the
The review reflects Airtel’s
low levels of profitability,
RB’s India revenue flattened in 2017-18 (~ bn) company’s low levels of prof- particularly from its core
58.14 itability, particularly from its Indian mobile operations,
57.11
core Indian mobile operations, negative free cash flow, and
50.62 negative free cash flow, and higher debt levels
43.68 higher debt levels. “The review
for downgrade is primarily reduce debt levels significan-
driven by our expectation that tly. However, Bharti is becom-
Bharti’s cash flow generation ing increasingly dependent
will remain weak and leverage on a major turnaround of the
elevated,” said Annalisa Di- underlying Indian operations.
Chiara, Moody’s vice-president “Because we believe a
and senior credit officer. more rational competitive en-
In the September quarter, vironment in India’s tele-
7.38 15.15 NA NA Bharti Airtel posted a consol- communications market is
FY14-15 FY15-16 FY16-17 FY17-18 idated net income of ~1.18 bil- unlikely over the next 12-18
Sources: Registrar of Companies, MCA lion, up from ~0.97 billion months, the review reflects
in the previous quarter but uncertainty as to whether the
65 per cent down from company's profitability, cash
~3.4 billion a year ago. flow situation and debt levels
Consolidated revenues for
September quarter were
~204 billion, a decline of 6.2
can improve sustainably and
materially over the same peri-
od,” added DiChiara, who is

to salvage Jhabua plant

performancehavebeengood
despiteoverallslowdownin
thepropertymarket. PTI<
Raymond eyes small
town stores for 20%
of its retail sales
Raymondexpects20percentof
itstextileandapparelretail
businessinIndiatocomefrom
smalltowns,whereitisopen-
ing‘MiniTRS’storescateringto
aspirationsofthepeople,a
companyofficialsaid.The
company,whichhasrecently
achievedthetargettoopenits
200th'MiniTRS'(TheRaymond
Shop),hasplanstoaddaround
600moreinitsnetworkintier
IV,VandVItowns.“FortheTRS
channel,wesee,thesestores,
MiniTRSwhichweareopening
up,tocontributearound15to
20percentoftherevenue,”
RaymondDirector-Retail
MohitDhanjalsaid.According
tostrategy,Raymondhasiden-
tified800smalltownshaving
populationabove50,000to
sustainastoreandtapthe
potentialthroughMiniTRS. PTI<
BharatSancharNigamLtd
(BSNL)hasidentifiedtwo
locationsinTelanganafor
thesame. PTI<
Coca-Cola plans
energy drinks under
namesake brand
Coca-Cola Co said on Thursday
it plans to launch two energy
drinks under its namesake
brand, its latest move to
diversify away from sugary
sodas. Coca-Cola, in an
emailed statement, declined
to provide a timeline for the
launch of the drinks, to be
named “Coca-Cola Energy”
and “Coca-Cola Energy No
Sugar.” The beverages would
likely have caffeine from
naturally-derived sources and
guarana extract, Coke said.
Coke is currently in arbitration
with energy drinks maker
Monster Beverage, in which it
is the top shareholder, over
the launch of the drinks,
which Monster says could
violate an agreement bet-
ween the companies. REUTERS<
JYOTI MUKUL
New Delhi, 8 November
Gautam Thapar group pro-
moted Avantha Holdings has
offered to pay ~24.30 billion to
lenders to escape insolvency
proceedings for its Jhabua
power plant.
The plant is one of the proj-
ects for which lenders, led by
Axis Bank, were looking for suit-
ors outside the IBC. The lenders
have meanwhile cancelled the
bid of the little-known Worlds
Window group that had emer-
ged as the successful bidder for
thepowerplantthroughthreeof
its firms. The Worlds Window
Group was backed by London-
based GFG Alliance, Srei Alter-
native Investment, and Goyal
MG Gases. Liberty House, a part
of GFG Alliance, is in trouble for
two of its other bids for
insolvent assets — Amtek and
Adhunik Metaliks.
The Avantha offer is higher
than ~23.50 billion the Worlds
Window Group’s bid, which was
rejected on the grounds of not
meeting certain requirements
before the October 15 deadline
for signing a definitive agree-
ment. The Gautam Thapar-led
Avantha Group plans to take
~19 billion from Deutsche Bank,
while it is also discussion with
investors for another ~5.3 billion
through an equity infusion.
InalettertoAxisBank—one
ofthelenderstothepowerplant
— Avantha Holdings said it
would be in a position to pay up
the dues in three months from
thedateofreceivingfinalaccept-
ance from lenders. While an
Avantha group spokesperson
didnotrespondtoemailqueries,
an Axis Bank’s spokesperson,
said the bank did not comment
on client-specific matters.
Avantha Power & Infra-
structure has an operational
power generation capacity of
626 Mw, with another 660 Mw
of capacity under implementa-
tion.JhabuaPower,asubsidiary
of Avantha Power & In-
frastructure, is based at Seoni
district in Madhya Pradesh.
With the plant having its 71 per
cent of 600 Mw capacity tied up
for sale with Madhya Pradesh
and Kerala, and its fuel linkage
inplace,itisoneoftheattractive
power assets on sale.
Industry players like JSW
Group were keen on the asset
but did not eventually put in a
bid. Though, under the Reserve
Bank of India’s February 12 cir-
cular lenders were asked to
refer all defaulting firms to the
insolvency court, companies
across a host of sectors includ-
ing power got a reprieve from
the Supreme Court in Septem-
ber for two months from the
order. The next hearing will be
held on November 14.
While cancelling the place-
ment of letter of intent on Wor-
lds Window, lenders said the let-
ter and documents of fund
commitment by GFG Alliance
andSrei“donotinspireanycon-
fidence” regarding funding for
the transaction. The GFG letter
of support was rejected on the
ground that it was subject to cer-
tain“termsandconditions”that
were not spelt out. “Further the
letter does not cover the entire
amount of consideration for the
proposed transaction,” lenders
said in their communication to
Worlds Window.
Besides Jhabua, Avantha
has a 26 Mw gas-based captive
power in Malanpur in Bhind
district of Madhya Pradesh.
per cent year-on-year but up
just 1.7 per cent sequentially.
Net debt increased to ~1.13 tril-
lion from ~1.03 trillion in the
last quarter. On September 30,
Bharti’s consolidated adjusted
debt-to-Ebitda was around
4.5x. Ebitda is earnings before
interest, tax, depreciation and
amortisation.
India revenues for Q2FY19
at ~149 billion declined 10.9 per
cent on a reported basis from
~167 billion a year ago. Mobile
revenues continued to witness
a fall and were down 7.2 per
cent year-on-year on an under-
lying basis, led by continued
average revenue per user
(ARPU) down-trading im-
pacted by competitive pricing
pressures, said the company in
its results statement. While
Moody’s expects that most of
the $1.25 billion raised from the
pre-IPO of its African business
will be used to reduce debt, the
leveragewillonlyimprovemar-
ginally, the rating agency said.
Moody’s views positively
the management’s plans to
further raise capital, includ-
ing asset sales, which aim to
also Moody’s lead analyst for
Bharti. The review will focus
on issues like Bharti Airtel’s
commitments and plans to
substantially reduce debt over
a short period of time and
turn around the underlying
Indian mobile operations.
The ratings could be down-
gradedifthefirmfailstousethe
proceeds from its recent pre-
IPOofitsAfricanbusinessorits
proposedcapitalraising.More-
over, any further deterioration
in its operating performance,
particularly in the Indian mob-
ile segment, would also lead to
a downgrade, said Moody’s.
JPMorgan research analyst
Viju George noted in a recent
report the strategic investment
in Bharti Africa ($1.25 billion
from a clutch of investors)
would help reduce the debt by
only 8 per cent, which is
scarcely enough, given the rate
of Ebitda decline in India wire-
less. Bharti’s India wireless
Ebitda margins at 21 per cent
declined 540 basis points
quarter-on-quarter (13.5 per
cent year-on-year) largely due
to revenue decline.

This Diwali, a little light of hope in ghost towers

With low prices and ready properties, buyers are again showing some interest in housing assets Q32017,thesaleswentup15percentina
yearacrossthetopsevencities.Ifwego
managing director, Tulip Infratech.
Earlierthisyear,thecountry’sbiggest
MAKING A KARAN CHOUDHURY
NewDelhi,8November
But,thatwasthen.Now,thewhole
areaisfilledwithhundredsof
showsapositivetickamong
homebuyers. “Realestatecontinuesto
bythesenumbersandlookatthe
currentscenario,wecanexpectsalesto
real estate player DLF said it would only
sell apartments when it gets occupancy
RETURN? unfinishedghostprojects.Thesehave bethefirstpreferenceforbuyersand goupby12percentinQ42018against certificate after completing the project as
Units sold between Aboutsixyearsback,Diwaliwas quashedthedreamsofasmanyas investorsalike,withnearly53percent theprecedingquarter,”Puriadded. part of its new business model.
Q1 and Q3 of 2018 celebratedwithmuchalacrityinand 72,000homebuyerswhohavenoidea respondentspreferringtoinvestinit. However,theongoingliquidity The policy has already started reap-
aroundNoidaExpressway,Noida whentheygetthekeystotheirflats. The Genuinerequirementforhomes crisisintherealestatesectorcould,to ing benefits as DLF’s sales bookings in
Total: 178,470 Extension,andGreaterNoida. trustdeficitcreatedbymajordevelopers coupledwithdiscountedpricesof someextent,playspoilsportfor 2018-19 may go higher than ~22.5 bil-
Chennai Largebillboardsadvertisingthe suchasAmrapali,Unitech,andJaypee propertiesareonceagainattracting developersthisfestiveseason. lion, according to a guidance provided
8,060 Kolkata latestresidentialprojects,amenities notonlyaffectedtheDelhi-NCRreal buyers,”saidAnujPuri,chairman, by the company at beginning of this
11,740 beingpromisedbyfewofthebiggest estatemarketbutthewholecountry. AnarockPropertyConsultants. Buyerseagerforreadyhomes fiscal year. Sales bookings are likely to
Hyderabad
13,640 Pune developersinthecountrysuchas But,itisstillearlytocommentasthe Accordingtoindustryexperts,more jump over twofold this fiscal year as
24,520 Unitech,Amrapali,Jaypee,aswellas AlikelyU-turn festiveseason’ssaleshavenot than49percentofthepropertybuyers the company had sold flats worth just
hundredsofsmallerdeveloperswould Expertssaythingsmaybestartingto concludedyet,saidAnarock.Thefirm areoptingforthoseflatsthatareready ~10 billion during 2017-18 because of a
NCR bevisibleformiles. lookupthisDiwali,twoyearssincethe saidtrendsinrecentyearssuggestthe to movein. six-month suspension of sales to com-
31,570 Marketingteamsofthese implementationoftheRealEstate entirefourthquarterofayearwasan “The situation seems better than last ply with Rera.
developerswouldputuphugetents, (RegulationandDevelopment)Act, auspicioustimeduringwhichhousing year. People are buying ready-to-move- “At the current sales momentum,
Bengaluru sometimesasbigasamid-sized orRera,thatweededoutofdevelopers salesincrease. in properties. Enquiries for under-con- it looks like new sales bookings may
31,570 conventionhall,almostevery2km. whohavenotfulfilledtheir “Consideringquarter-on-quarter struction properties are low. Also, a lot of cross our sales guidance of ~20-22.5 bil-
Thesewouldbefilledwiththousandsof commitments. trendsin2018,saleshaveincreased ready-to-move-in inventory is also avail- lion for this fiscal year,” DLF Group
MMR prospectivehomebuyershaving Accordingtopropertyconsultancy acrossthemajorcities.Forinstance,in able and prices are under control. Buyers Chief Financial Officer Saurabh
46,220 intensenegotiationswithproperty firmAnarock,itsconsumersentiment Q32018itincreasedby9percentover are, in fact, a little confused about what Chawla told analysts during a confer-
Source:
Anarock advisorstryingtheirbesttoclosedeals. surveyforthesecondhalfofthisyear theprecedingquarter.Incomparisonto to buy,” said Praveen Jain, chairman and ence call last week.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official

.
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 COMPANIES 3 <

Flash strike delays 50 AI Fortis CEO Bhavdeep Singh steps down

flights from Mumbai

SOHINI DAS
Mumbai, 8 November
As the new management of
Fortis Healthcare (FHL) is all set
to take charge after the
Competition Commission of
Contract staff went on strike to protest the termination of three employees India (CCI) gave nod to the
merger with Malaysian health-
ANEESH PHADNIS care firm IHH Healthcare
Mumbai, 8 November Berhad, FHL Chief Executive
Officer (CEO) Bhavdeep Singh
however, will continue in his
current capacity till his succes-
sion planning is crystallised.
Singh had joined Fortis as CEO
inJuly2015.Thiswashissecond
stint with the firm as CEO. This
is the second senior-level resig-
nation after Gagandeep Singh
Bedi, CEO of FHL, quit in
August.
Announcing his decision to
leave the company, Singh said:
stableplatformandcanlookfor-
ward to the future with opti-
mism.”
He said his role with Fortis
did not allow him to spend time
with his family. “The challenges
over the past couple of years
have not allowed me to spend
any time with my family. Also, I
am very pleased that business
recovery is well under way with
solid improvement demon-

T
he Air India ground staff — affiliated has put in his papers. “I believe that the right time to strated during Q2 and with
to a Shiv Sena labour union — went Singh tendered his resigna- make this transition is now. October results reflecting the
on a flash strike from Wednesday tion on Thursday citing profes- After two very challenging best performance we have had
night, disrupting flights at Mumbai airport sionalandpersonalreasons.He, years, the company is now on a in the past 12 months,” he said. Bhavdeep Singh
in the process. However, the strike was
called off on Thursday night.
Air India operates around 470 daily
flights and around 50 of those were delayed
by close to two hours across the network, by
Thursday afternoon.
Ground handling functions like check-
in, and loading/unloading of bags, are han-
dled by the airline’s subsidiary Air India Air
Transport Services (AIATSL). Its staff com-
prises both Air India employees on depu-
tation or transfer, and employees on con-
tract. The contract staff went on strike from
11:00 pm on Wednesday, demanding rein-
statement of three employees who were
sacked from work as well as recognition of
their labour union.
While the termination of staff was not
revoked, the management agreed to other
demands of the union, related to transport,
among others. The strike led to long queues at check-in counters and delays from Mumbai airport
The strike led to long queues at check in
counters and delays from Mumbai airport.
While the average flight delay was of two
hours, a Bangkok flight took off six hours
DGCA asks Jet, SpiceJet to check Boeing issues
late. “There was no strike notice. The union PRESS TRUST OF INDIA official told PTI. The official said that if the
members prevented staff from joining duty New Delhi, 8 November condition is not addressed, it could cause
last night. Their action is illegal. The four the flight crew to have difficulty in
employees were sacked for indiscipline or The Directorate General of Civil Aviation controlling the plane. The condition
absenteeism,” said a senior executive. (DGCA) has asked Jet Airways and SpiceJet could even lead to "excessive nose-
While labour issues had been simmer- to take corrective action to address down attitude, significant altitude loss,
ing for a year in AIATSL, Thursday’s con- possible issues with their Boeing 737 MAX and possible impact with terrain," the
frontation is being viewed as a show of planes that could lead to "significant official noted.
strength by the union. Within AIATSL, altitude loss" of the aircraft, a senior Based on initial investigations of the
there are two recognised unions that rep- official said on Thursday. The latest Lion Air aircraft accident, the FAA issued
resent permanent employees. directive follows advisories issued by US Emergency Airworthiness Directive (AD)
“The strike is to protest the exploitation watchdog Federal Aviation on November 7.
and harassment of employees. The com- Administration (FAA) and Boeing, Boeing released a bulletin about the
pany has not followed due process while regarding the B 737 MAX planes, after the issue on November 6. The DGCA official
sackingthethreeemployees.Properinquiry crash of a Lion Air in Indonesia. said that within three days after receipt
was not conducted and this is against the Currently, Jet Airways and SpiceJet fly of FAA AD, changes to airplane flight
spirit of natural justice,” said Santosh Boeing 737 MAX planes in India. Together, manual have to be done, for procedures
Chalke, general secretary of Bharatiya there are at least six such aircraft with the which have to be followed by flight crew.
Kamagar Sena. two carriers. “Both the documents “The DGCA has ensured that all Indian
“Due to a sudden industrial situation at address erroneous high 'angle of attack' operators are aware of the FAA AD and
Mumbai by AIATSL employees, some (AOA) sensor input and corrective action have taken appropriate corrective
flights have got delayed. We are assessing for the same as it has potential for action,” he added.
the situation and all efforts are being made repeated nose-down trim commands of Comments from Jet Airways and
to minimise delays or disruption,” an Air horizontal stabiliser,” a senior DGCA SpiceJet were awaited.
India spokesperson said.

Slots, global business

of Jet key attractions
for Tatas, say experts
ANEESH PHADNIS
Mumbai, 8 November

A possible acquisition of Jet Airways will

allow the Tata group to scale up its aviation
business and take on IndiGo as it will gain
large international market share and slots at
busy airports.
While Jet Airways, with its 15.8 per cent
market share, is a distant second in the
domestic market (IndiGo is nearly thrice its
size), it is the leader on international routes.
Jet Airways had a share of around 14 per
cent on international routes in FY18, high-
er than Air India and Emirates.
A deal would also secure Tata group slots
at the congested Mumbai airport where its
airlines have been unable to expand their
base. Vistara operates only 11 daily flights
from Mumbai while AirAsia India does not
operate to Mumbai at all.
Jet has around 35 per cent share of
domestic departures from Mumbai and is
the market leader in Mumbai. In fact, it is
the only large airport where Jet holds the
number one position.
Tata and Jet executives have held pre-
liminary talks and one such meeting took
place in London two weeks ago.
A deal is not certain and could depend
on several factors, including Jet Airways
Chairman Naresh Goyal ceding control of
the airline. Goyal owns 51 per cent in the
airline which he founded 25 years ago.
Etihad Airways controls 24 per cent stake.
The Tata group is also said to be evalu-
ating how it would turn around the airline in
an event of acquisition while group sources
are calling discussions between the two as
exploratory.
Both Jet Airways and the Tata group
have termed the talks as speculation.
“Tata group ultimately has to decide
what it sees as Jet’s long-term future — will
it want to re-examine it strategy and fleet
procurement? Will it want to merge it with
Vistara? Merging Vistara with Jet and keep-
ing one of their brands would help exploit
Jet’s international routes better and help
shore up domestic traffic and become a bet-
ter rival to IndiGo and GoAir,” said aviation
expert Saj Ahmad.
Jet Airways, which is currently facing a
severe cash crunch, has a fleet of 124 planes,
including a mix of turboprop ATR, Airbus
and Boeing planes.
It has 220 Boeing 737 Max on order which
will serve both as replacement of old leases
and fresh addition.
As of September, Tata group-owned air-
lines AirAsia India and Vistara have domes-
tic market shares of 4.4 per cent and 3.8 per
cent respectively. Both the airlines operate
Airbus A320 fleet.
Vistara has placed an order for 13
A320Neo and six Boeing 787-9 planes and
will induct another 37 A320Neo on lease.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
4 ECONOMY & PUBLIC AFFAIRS
>
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 1

IN BRIEF
Illicit products adversely affecting Note ban scars are more
visible now: Manmohan
Indian industry, says report
Illicit products are adversely affecting the Indian industry, risking
millions of legitimate jobs and resulting in an estimated loss of
~1.05 trillion in just seven sectors, according to industry body FICCI
CASCADE. Citing latest figures, FICCI CASCADE — industry chamber
FICCI’s anti-smuggling and anti-counterfeiting arm —said illicit Former PM asks Modi “TODAYISA DAYTO REMEMBER HOW
ECONOMIC MISADVENTURESCAN ROIL
trade is also affecting the government revenue and loss to the
exchequer in these industries is ~392.39 billion. The trade in illicit
to show prudence in THE NATION FOR A LONGTIMEAND
Senior Congress leader P Chidambaram took on the Centre at
a press conference in Kolkata on Thursday PHOTO: PTI
goods is highly pervasive across countries and sectors. It is estim- handling economy UNDERSTAND ECONOMIC POLICYMAKING
ated that 8-15 per cent of the global GDP is impacted due to illicit
trade and criminal activities, FICCI CASCADE said in a statement. PTI< ARCHIS MOHAN
SHOULD BE HANDLEDWITH CARE... Govt aims to capture
New Delhi, 8 November
WITHADEPRECIATING CURRENCYAND
RISING GLOBALOILPRICES, RBI: Chidambaram
Allahabad bank to Most e-wallet
O
n the second anniversary of
demonetisation on Thursday, for- MACRO-ECONOMIC HEADWINDSARE
receive ~30.54 bn deals for recharges, mer Prime Minister Manmohan ALSO STARTINGTO BLOW NOW” PRESS TRUST OF INDIA had packed the central bank’s
capital infusion utility bills: Study Singh (pictured) advised the Narendra Kolkata, 8 November board with handpicked nomi-
Modi government to show prudence, nees and was making every
Allahabad Bank, in a press A majority of transactions on thought and care in its handling of econo- and society. He said beyond the steep drop of age, gender, religion, occupation or Senior Congress leader and for- attempt to push through its
release on Thursday, said e-wallets in the country are my policymaking. in headline GDP (gross domestic product) creed,” Singh said. mer Finance Minister P proposals at the RBI board
that it received a commun- used for mobile recharges “It is often said that time is a great heal- growth numbers “the deeper ramifications Congress President Rahul Gandhi said Chidambaram on Thursday meeting on November 19.
ication from the Ministry of and paying utility bills, a er. But unfortunately, in case of demoneti- of ‘notebandi’ are still unravelling”. November 8 “will forever go down in the accused the Narendra Modi “If the RBI either defies the
Finance regarding fresh study by market research sation, the scars and wounds, are only get- The former PM said small and medi- history of India as a day of infamy”. “On government of trying to cap- government or the RBI gover-
capital infusion of ~30.54 firm Velocity MR has said. The ting more visible with time,” Singh said, um businesses are yet to recover from the the second anniversary of the monu- ture the Reserve Bank of India nor resigns, in either event, the
billion towards contribution study, which was based on a attributing some of the problems the “demonetisation shock”, with the result mental blunder, the governments spin (RBI) to tide over its fiscal crisis, consequence will be cata-
of the central government in sample size of 2,455 respon- Indian economy faced with respect to the the economy is struggling to create new doctors, including our incompetent warning that any such move strophic,” he said.
the preferential allotment of dents from cities such as New decision to scrap old ~500 and ~1,000 notes. jobs for the country’s youth. finance minister, have the unenviable would be catastrophic. In this situation, the senior
equity shares (special Delhi, Kolkata, Bengaluru The former PM suggested it would be “The financial markets are volatile as task of defending an indefensible crimi- “The government stares at a Congress leader said, there
securities / bonds) of the and Pune, said approxima- “prudent” for the Modi government to not the liquidity crisis wrought by demoneti- nal policy,” Gandhi said. fiscal deficit crisis. It wants to were only two options for Patel:
bank during financial year tely 9 of every 10 e-wallet resort to “further unorthodox, short-term sation is taking its eventual toll on infra- The Congress chief said demonetisa- step up the expenditure in an either resign or transfer the
2018-19, as government’s transactions are used for economic measures that can cause any structure lending and non-bank financial tion was an ill-conceived and poorly exe- election year. Finding all ave- amount to the government.
investment. REUTERS < mobile recharges, followed more uncertainty in the economy and services firms,” Singh said. cuted economic policy, but disputed that it nues closed, in desperation, it “In my view, whichever option
by paying the utility bills (8 of financial markets.” Singh said the country was “yet to was “innocent intent”, and alleged it was a has demanded ~1 trillion from is taken by the governor, it will
10). It added that apart from “I urge the government to restore cer- understand and experience the full carefully planned criminal financial scam. the reserves of the RBI,” the for- damage the credibility and
Govt: India to start e-wallets, consumers also tainty and visibility in economic poli- impact of the demonetisation exercise”. West Bengal Chief Minister Mamata mer Union minister said at a image of the RBI. It also means
exporting sugar to prefer using debit/credit cies,” the former prime minister said, “With a depreciating currency and ris- Banerjee, who was the first leading politi- press conference in Kolkata. If capturing the RBI. One more
cards, internet banking, etc, possibly alluding to recent develop- ing global oil prices, macro-economic cal figure to criticise demonetisation with- RBI Governor Urjit Patel stands crucial institution will fall from
China from next yr as a mode of payment for ments, particularly the Modi govern- headwinds are also starting to blow now,” in hours of it being announced, said the his ground, the Centre is plan- grace,” he added.
India will next year resume digital transactions. “The ment’s relations with the Reserve Bank of the former PM said. reason she did it was because she “knows ning to issue a direction under
exporting raw sugar to China usage of credit cards, three India. Singh was the governor of the cen- On November 24, 2016, speaking in the the pulse of grassroots”. Section 7 of the RBI Act, 1934, ‘RBI, FinMin should
as it eyes overseas markets to out of every four, is observed tral bank between 1982 and 1985. Rajya Sabha a little over two weeks after “After the announcement of demon- directing the apex bank to resolve differences’
shed surplus stocks that have to be the highest among pe- “Today is a day to remember how eco- Prime Minister Narendra Modi announced etisation, I asked the grassroots people transfer ~1 trillion to the gov- Amid the ongoing tussle
muted prices and created ople who have monthly nomic misadventures can roil the nation demonetisation, Singh had described it as about their reaction — housewives, dai- ernment’s account, he claimed. between the government and
financial distress in mills. personal income between for a long time and understand economic “organised loot and legalised plunder of ly labourers, the domestic helps and Section 7 of the RBI Act the RBI, former NITI Aayog
India plans to export 2 mt of ~150,000 and ~200,000, wh- policymaking should be handled with the common people”. others. They were crying. It was then gives special powers to the gov- Vice-Chairman Arvind
sugar to China to cut trade ereas people having a mon- thought and care,” Singh said. In his Thursday’s statement, Singh that I realised that this was a big disas- ernment to issue directions to Panagariya has suggested that
deficit with the neighbo- thly personal income around Singh termed demonetisation an “eco- said demonetisation was an “ill-fated” ter, and decided to call it out,” Banerjee, the RBI governor on issues of the two sides must eventually
uring country, a government ~75,000 mostly prefer debit nomic misadventure”. He said “notebandi” and “ill-thought” exercise. “Notebandi whose party Trinamool also means public interest. Chidambaram ‘compromise’ and ‘come
statement said. PTI< cards...” said the study. PTI< unleashed “havoc” on the Indian economy impacted every single person, regardless grassroots, said. alleged that the government together in national interest’.

Policymakers concerned over WTO verdict Alok Verma meets

SUBHAYAN CHAKRABORTY
New Delhi, 8 November
The recent verdict against India by
the World Trade Organization (WTO)
on a dispute on iron and steel imports
from Japan has disconcerted policy-
makers about major upcoming rul-
ings affecting New Delhi’s trade poli-
cy and the export sector.
On November 6, a panel formed
by the dispute settlement body of the
WTO — the first stage of a winding
arbitration process — said certain
safeguard duties imposed by India
on iron and steel imports from Japan
were not in keeping with trade rules.
It said India had failed in proving that
domestic injury had suffered serious
economic losses owing to higher
imports. This latest move by the glob-
al trade watchdog against New Delhi
— the fourth major instance in the
past five years — have raised serious
concerns among experts and policy-
makers regarding the fate of other
upcoming cases.
Prime among these are the Trump
administration’s assault on India’s
export promotion schemes including
the flagship the Merchandise Exports
from India Scheme and Export-
Oriented Units Scheme. It had argued
that New Delhi under-reports its farm
subsidies, after which the Centre had
raised the minimum support price
(MSP) for farm produce twice. Earlier
thisyear,theUSTradeRepresentative
(USTR) office had initiated dispute
settlement proceedings on both mat-
ters. Similar action has been initiated
over sectoral schemes including the
Electronics Hardware Technology
Parks Scheme, special economic
zones and the Export Promotion
Capital Goods Scheme.
“These subsidies provide bene-
fits to Indian exporters, allowing
them to sell their goods more cheap-
ly to the detriment of American
workers and manufacturers,” the
USTR said. It has cornered India at
the multilateral platform, stating
WTO rules prohibit nations from
providing export subsidies.
India has promised to fight the
charge that it was misusing export
subsidies and is set to reply within 60
days."That60-daydeadlinewassetto
endonSeptember23,butbothparties
are yet to complete their submission,"
Jayant Dasgupta, former ambassador
of India to the WTO, said.
He suggested the case might only
move ahead in the early part of 2019.
Amatteroftime
New Delhi is set to argue that the law
invoked by the US — the Agreement
on Subsidies and Countervailing
Measures (ASCM) — allows it a win-
dow of eight years to phase out these
subsidies, according to a senior trade
department official.
Developed nations including the
US have long argued export subsidies
INDIA’S PERFORMANCE DROP IN RECENT TIMES IN MAJOR WTO CASES CVC, refutes charges
Date of last WTO
engagement
Issue Complainant Verdict
levelled by Asthana
Appellate body Prohibitions imposed by India on United States India’s Avian Influenza measures are inconsistent PRESS TRUST OF INDIA officials probing crucial cases
accepts report in import of chicken, pigs on from US because they are not based on a risk assessment New Delhi, 8 November that figured in Asthana’s
June, 2015 due to concerns about Avian complaint of corruption agai-
Influenza CBI Director Alok Verma on nst the probe agency’s chief
India sought further US imposing higher fees on certain India Inconclusive with consultations dragging on Thursday met Central Vigil- Verma, they said. The offi-
consultations in applicants for L-1 and H-1B ance Commissioner K V Chow- cials said CBI personnel from
March 2016 categories of non-immigrant visas dary and denied corruption the rank of inspector up to
charges levelled against him by superintendent of police
Report adopted in Domestic content requirements United States The Appellate Body upheld the Panel’s finding that his deputy and special director were called and their ver-
October 2016 imposed by India on solar power India’s DCR measures were inconsistent with WTO in the probe agency Rakesh sions recorded before a sen-
developers under the Jawaharlal non-discrimination obligations Asthana, officials said. ior CVC official.
Nehru National Solar Mission Verma came to the These officials, who
Central Vigilance had recorded their
Initial panel report Safeguard duties imposed by India Japan Despite India pleading the measure had expired, the
Commission (CVC) VS statements
sent to members in
November 2018
on imports of iron and steel
products
panel ruled India failed to demonstrate that an
increase in imports of the the product concerned
office in the late
afternoon and sta- CBI CBI included those
who had handled
caused serious injury to domestic industry yed there for about the Moin Qureshi
Final panel report "Two border charges, consisting of an United States The Appellate Body ruled that both duties result in two hours, they said. bribery case, the
adopted “Additional Duty” imposed by India the imposition of duties in excess of those set forth in He met Chowdary and IRCTC scam, involving
Vigilance Commissioner former railway minister Lalu
in November 2008 on alcoholic beverages and “Extra- India’s Schedule of Concessions
Sharad Kumar, the officials Prasad, the cattle smuggling
Additional Duty” on wider imports Source: World Trade Organization
said,withoutgivingdetails.The case in which a senior BSF offi-
Supreme Court had on October cer was caught with wands of
26 asked the CVC to complete cash. The Supreme Court
provide unfair competitive advantage $1,000 per capita income. India was ini- US might contest the eight-year period. within two weeks of its inquiry directed that the CVC’s inquiry
to recipients, pointing out that WTO tially within this group, but was The trade department is fine tuning into allegations against Verma into the allegations against
rules prohibit them. The ASCM aims to informed last year by the WTO secre- its policy on this. India has some lee- levelledbyAsthana.Vermaand Verma, who has challenged the
lower and finally prohibit export subsi- tariat in a report that it had crossed the way on the agriculture issue because the Asthana have been sent on government’s decision divest-
dies. However, a limited exception to threshold in 2015. US has not officially launched any cases, leave by the government. ing him of his duties, would be
this rule is for specified developing "We don’t think there is any miscon- a senior official said. Officials said Asthana also met conducted under the supervi-
countries that may continue to provide ception that we will deny this. It’s just the CVC. sion of retired SC judge Justice
export subsidies temporarily until they that the economy needs time to adjust," OPINION The commission had A K Patnaik and this was a
reach a defined economic benchmark of the official added. However, he said the EDIT: Another WTO loss recently examined some CBI “one-time exception”.

IAF’s 36 Rafales cost 40% more than Dassault’s earlier offer

The first of a three-part series compares the ^7.85-billion deal to purchase 36 Rafale fighters with the aborted tender for 126 Rafale jets
AJAI SHUKLA
New Delhi, 8 November
The price per Rafale aircraft that the
government agreed in 2016 with
French company Dassault for 36
fighters is 40 per cent higher than
what Dassault had offered in 2012, in
a global tender for 126 medium mul-
ti-role combat aircraft (MMRCA).
Two senior defence ministry offi-
cials who were directly involved in
contract negotiations with Dassault
from 2012 onwards, have told
Business Standard that Dassault’s
winning bid amounted to ^19.5 bil-
lion for 126 Rafale fighters. The ^19.5
billion quote averaged out to ^155
million per aircraft. This included
the cost of 126 fighters, technology
transfer, indigenisation, India-spe-
cific enhancements, weaponry,
spares and maintenance guarantees.
At an exchange rate of ~65:14 to
the Euro on January 30, 2012, when
Dassault was declared the lowest bid-
der, its price amounted to ~1,270 bil-
lion, averaging almost exactly ~10 bil-
lion per Rafale fighter, inclusive of
all the above additional aspects.
The MMRCA offer included 18
Rafales fully built in France, and 108
fighters to be built in India by
Hindustan Aeronautics Ltd (HAL)
from kits supplied by French ven-
dors, Dassault, Thales and Snecma
(renamed Safran Aircraft Engines in
2016). Even HAL’s labour costs were
factored into this price.
In comparison to that Euro 155
million average cost per Rafale, the
the National Democratic Alliance
(NDA)government’sSeptember2016
purchaseof36Rafalefightersfor^7.8
billion works out to ^217 million per
Rafale — exactly 40 per cent higher
than Dassault’s 2012 quote.
It is not clear how the NDA gov-
ernment — including Defence
Minister Nirmala Sitharaman and
Finance Minister Arun Jaitley,
backed by senior IAF officials — has
claimed that the 36-Rafale contract
with Dassault in 2016 cost the IAF
nine-20 per cent less than Dassault’s
126 Rafale offer.
These officials have argued that
the ^7.8 billion cost of 36 Rafales
included add-ons like weaponry,
spare parts and logistic guarantees.
However, the IAF’s 2007 tender for
the MMRCA — termed “request for
proposals” (RFP) — which Business
Standard has reviewed in
detail includes all these
enhancements in the
2012 price.
The 2007 RFP stipu-
lates that vendors must RAFALE
price in the “total cost of
acquisition”.Thisincludes
DEAL
the purchase cost of the PART-1
“bare bones” aircraft,
specified enhancements,
weaponry, spares, maintenance and
the cost of operating the aircraft for
40years,including thecostoffuel,oil
and lubricants.
The 2007 RFP requires vendors
to price seven specified aspects into
their bids. These are: (a) Direct acqui-
sition cost, or the cost of buying and
building 126 Rafales along with
weaponry(termedM1);(b)
Cost of Total Technical
Life (TTL) reserves, or the
spares needed over the
Rafale’s service life of 40
years (M2); Cost of
reserves for ensuring
availability of 75 per cent
of the fleet at all times
(M3); Cost of intermediate
level periodic servicing
(M4); Cost of depot level overhaul
(M5);Operatingcostofthefleetfor40
years (M6) and the cost of technolo-
gy transfer for building the Rafale in
India and for other technologies
specified in the RFP (M7).
Appendix F of the RFP man-
dates that the “total cost of acquisi-
tion” (M8), would be arrived at by
adding all seven aspects above —
i.e. M1 to M7. The vendor with the
lowest “total cost of acquisition”
would be declared L-1, and would
be awarded the contract.
Infact,the differencebetweenthe
two bids is greater, since the 126
MMRCA bid involves building 108
fighters in India, which adds to the
cost. In contrast, the 18 Rafales that
were to be supplied in flyaway con-
dition would cost significantly less.
While the price Dassault quoted
for the 18 fully built Rafales is not
known, an estimate can be obtained
from the pricing of the Sukhoi-
30MKI. About five years ago, a
Sukhoi-30MKI built in Russia would
cost below ~3 billion, while the same
built by HAL in Nashik would cost
the IAF about ~4.50 billion – a 50 per
cent mark-up for indigenisation.
Dassault’s Euro 19.5 billion quote
remained valid at the time Prime
Minister Narendra Modi announced
in Paris on April 10, 2015 that he had
requested President Francois
Hollande to supply 36 fully-built
Rafale fighters in a government-to-
government arrangement. In
February 2015, at the Aero India 2015
show in Bengaluru, Dassault chief
Eric Trappier confirmed: “Our pric-
ing remains the same from Day One
of L-I (lowest bidder). So there has
been no change on that front.”
Stipulations in the 2007 RFP
impose several additional require-
ments on the vendor. The 126
Rafalefightersweretocompriseofsix
independent squadrons of 18 fighters
each and 18 additional reserve air-
craft to cater for losses. They were to
be based in three main operating
bases, each housing one squadron.
Appendix F of the RfP specifies:
“Each squadron would be required to
operate two independent detach-
ment of six aircraft for a period of 30
days at a time while continuing oper-
ations from the parent base.” The bid
price is required to include the cost of
spare parts, ground handling equip-
ment and ground support equip-
ment needed for these operations.
Paragraph 45 of the RfP requires
the vendor to “confirm his willing-
ness to provide the aircraft for field
evaluation in India on ‘No Cost No
Commitment’ basis.” Eventually, the
six vendors ended up spending in
the region of $50 million each on
fielding and marketing their aircraft.
Even so, the government eventu-
ally cancelled the MMRCA tender
andwentinforagovernment-to-gov-
ernment purchase of 36 Rafale fight-
ers on September 23, 2016. Now, the
IAF is preparing a fresh RFP for 110
medium fighters, in which the same
vendors are expected to participate.
(Next:2007RFPincludesdetailedoffset
andtechnologytransferclauses)
https://t.me/pdf4exams
6 ECONOMY & PUBLIC AFFAIRS
>
RBI circular may send
100 more firms to NCLT
DEV CHATTERJEE
Mumbai, 8 November
A
bout 80-100 stressed companies
may soon be referred to the
National Company Law Tribunal
(NCLT), with the Reserve Bank of India
(RBI) making 100 per cent voting manda-
tory for any debt-restructuring proposal.
“It’s not only the power companies
that are facing the brunt of the RBI move,
but many other companies from telecom
and allied industries. In many cases, a
bank with less than 1 per cent vote at the
committee meetings has stopped debt-
resolution plans. The rest of the banks
have no other option but to refer the com-
pany to the NCLT,” said a lender. On
February 12, the RBI issued a circular,
requiring banks to finalise a resolution
plan in case of a default on large accounts
of ~20 billion and above within 180 days,
failing which insolvency proceedings will
have to be invoked against the defaulter.
An association of power producers
has moved the Supreme Court against
the central bank’s circular. The case will
be heard from October 13.
Any order will also affect companies
from sectors other than power, as the SC
has bunched all petitions against the RBI
circular.
Lenders and chief executive officer
(CEO) of many stressed companies said,
following the RBI circular, the Life
Insurance Corporation (LIC), the Power
Finance Corporation (PFC) and the Rural
Electrification Corporation (REC), as well
as public sector banks, are not consenting
to any debt-restructuring plans.
A lender said, with 80-100 more com-
panies likely to be referred to the NCLT,
jobs and supply chains of many more will
be affected.
A CEO of a mid-sized company said
they had to move the Supreme Court
(SC) after only one bank decided to vote
against its debt-sale plan, which was
cleared by the rest of the lenders.
“This bank, with less than 5 per cent
vote, made sure we are referred to the
No heavy goods SMOGGY HANGOVER
vehicle in Delhi
for three days
The entry of heavy and
medium goods vehicles into
the national capital will be
banned for three days begin-
ning 11 pm on Thursday, as
Delhi's air quality worsened
to the “severe-plus emer-
gency” category, or 11 times
the permissible limit.
Joint Commissioner
(Traffic) of Police Alok Kumar
said adequate police person-
nel have been deployed at
border entry points to
enforce the ban. Vehicles
headed for other destinations
are being asked to take the
Eastern Peripheral
Expressway, Kumar said. The
Supreme Court-appointed
Environment Pollution Con- Rajpath, New Delhi, on Thursday. Officials said Delhi recorded its worst air quality of the
trol Authority said it was year the morning after Diwali as the pollution level entered ‘severe-plus emergency’
monitoring the situation and category as citizens fired away on SC order. Stubble burning impact, by contrast, was
will take emergency steps if minimal. Experts have advised people to avoid too much of physical activity outdoors, and
pollution rises. The steps shut windows and to frequently wet-mop floors in place of vacuum cleaning or dusting
include odd-even rationing
of private vehicles. PTI
Iranoilwaivers:HowIndia,ChinaareliningupafterUSexemptions
HEESU LEE & DEBJIT CHAKRABORTY
8 November
Armed with waivers to keep importing
Iranian oil without running afoul of US
sanctions, some of the Islamic
Republic’s top customers are preparing
to buy.
The exemptions mean at
India was one of
least some supplies from the most vocal
OPEC’s third-biggest negotiators for
producer will keep flowing an exemption...
into international markets,
as the govt faced
after its exports plunged protests over
almost 40 per cent since rising fuel costs
April —the month before before national
Washington announced the
curbs. In a bid to keep
elections
customers, the state-run
National Iranian Oil Co. has been
offering record discounts on its crude.
Almost all major buyers of Iran’s oil
had negotiated with the US for the
waivers, arguing that cutting purchases
to zero would affect their energy
industries and boost fuel costs. US
Secretary of State Michael Pompeo has
defended the exemptions and said the
Trump administration’s campaign to
pressure Iran has already reduced
exports by over 1 million barrels a day
and they’ll continue to shrink.
A summary of plans by some of Iran’s
biggest oil customers and what they
may buy under the waivers is set out
below. This story will be updated as new
information becomes available. The
exemptions have been granted for 180
days, and will be reviewed toward the
end of the period.
South Korea
Waiver: Up to 200,000 barrels a day of
condensate Purchases before sanctions:
NCLT. This might impact returns for all
the banks,” he said, asking not to be
named as the matter was sub-judice.
In September this year, the SC grant-
ed a stay on all NCLT cases faced by
power companies, 34 of which appealed
for cancelling the circular.
The SC has recently cleared a plan
by three Gujarat-based power producers
— Adani Power, Tata Power, and Essar
Power — to re-negotiate their power-
purchase agreements, after lenders,
including State Bank of India, submitted
these projects had become unviable
because of a change in the Indonesian
coal export regulations.
During the hearing, the Indian
lenders, who have filed debt-recovery
suits under the Insolvency and
Bankruptcy Code (IBC) against 977
companies in the past two years, have
said three power projects — Coastal
Gujarat Power, Adani Power Mundra
and Essar Power — should be revived
with some efforts by all stakeholders
and not be allowed to become insolvent.
Indian lenders’ track record with the
NCLT companies has not been good so
far. According to the initial data, Indian
lenders will take a 56 per cent haircut on
loans worth ~2.65 trillion to the 12 com-
300,000 barrels a day (condensate) in
2017. While the Asian country was the
third-biggest importer of Iranian oil, it
was the first major buyer to cut
purchases to zero as the US prepared to
impose sanctions. It’s now allowed to
buy as much as 200,000 barrels a day,
though actual imports may
not be that high.
Purchases must be
limited to cargoes of
condensate, a type of ultra-
light oil that’s critical for
South Korea because many of
the nation’s plants are geared
to process it. The country
bought about 300,000
barrels a day of South Pars
condensate from Iran in 2017.
The government is said to be in
discussion with companies to decide
how to split the import volume. They’ll
maintain a won-based payment system
with Iran, making deposits into local
escrow accounts in Industrial Bank of
Korea and Woori Bank. The money
won’t directly go to Iran, which can only
use it to buy food, medicine or other
non-sanctioned goods from its
customers.
India
Waiver: Up to 300,000 b/d purchases
before sanctions: 560,000 b/d in Jan-
October 2018.
India was one of the most vocal
negotiators for an exemption from the
US, as the government faced protests
over rising fuel costs before national
elections next year.
Under the exemptions, it will be
allowed to import as much as 300,000
barrels a day. That’s under Iran’s average
daily exports to the nation of about
https://www.estore33.com/
RBI vs INDIA INC
| Supreme Court to hear
petitions of companies from
Tuesday
| 100% mandatory voting is
hitting debt-recasting plans
| Banks taking 56% average
haircut in the NCLT cases
| Lenders/companies want
Supreme Court to reverse the
RBI order
| RBI’s February 12th circular
hitting firms across the board
| A total of 1,000 companies
facing NCLT proceedings
currently
panies identified for resolution under
the IBC by the RBI in June 2017.
Considering the offers received till now,
lenders would be able to recover only
~1.15 trillion from bidders.
PHOTO:DALIP KUMAR
SANCTIONS EFFECT
Some Asian buyers had halted Iranian oil imports ahead of US deadline (‘000 barrels/day)
China India Japan
806.5 787.1
633.3 706.7
144.4 150.5
Jun ‘18 Jul ‘18
560,000 barrels this year, and almost
450,000 barrels in 2017, shipping data
compiled by Bloomberg show.
Indian refiners are expected to buy
about 9 million barrels of oil for loading
in November from Iran. They too will
make payments into a local escrow
account for the crude supply.
China
Waiver: 360,000 b/d purchases before
sanctions: 658,000 b/d in January-
September 2018.
94%ofGSTrefundstoexporters
amidinputtaxcreditconcerns
Pending GST refund claims of ~54 bn being processed expeditiously: Ministry
ABHISHEK WAGHMARE
NewDelhi,8November
The finance ministry on
Thursday said that 93.8 per
cent of GST refunds of
exporters have been issued as
on October end this year. The
statement came amid
exporters raising concerns
about their input tax credits.
The ministry re-assured
exporters for the second time
in a month there is no let-up
in the sanction of GST
refunds.
It said in a statement that
the total GST refunds to the
tune of ~827.75 billion have
been disposed by the Central
Board of Indirect Taxes and
Customs (CBIC) and the state
authorities of the total refund
claims of ~881.75 billion
received so far.
“The pending GST refund
claims amounting to ~54 bil-
lion are being expeditiously
processed so as to provide
relief to eligible exporters.
Refund claims without any
deficiency are being cleared
expeditiously,” the ministry
said.
There are two kinds of
refunds when it comes to
PE investment in
NBFCs goes up
88% this year
T E NARASIMHAN
Chennai, 8 November
Private equity (PE) investments in India’s
non-banking financial companies
(NBFCs) from the start of this calendar
year have reached a little over $2 billion
(about~148billionatthecurrentexchange
rate). This is 88 per cent more than in the
full 12 months of 2017 and the highest in
four years.
This increase in overall investment
value has been despite the number of
deals this year being lower than last year;
also, the NBFC sector has been facing a
lack of liquidity.
According to data from Venture
Intelligence, the NBFC sector has received
a total of $2.04 billion in 25 PE investment
deals so far this calendar year, compared
with $1.09 billion over 32 deals during all
of 2017. Among the biggest such was the
$1,062-million KKR-GIC investment in
HDFC in January. Besides, two major
deals were announced last week — a TPG
Growth-led $42-mn (~3 billion) equity
investment in Ess Kay Fincorp, and a ~2-
billion investment by Norwest Venture
Partners X, CDC Group, UK’s
Development Finance Institution and P
Surendra Pai in Chennai-based Veritas
Finance.
Experts say you could see more deals
being announced in the coming months,
as many funds believe is it an opportune
time to acquire portfolios and assets at
reasonable valuation. These funds are
also bullish on the long-term scope and
prospects of the NBFC sector.
More on business-standard.com
645.2
700.0
500.0 488.3
408.1
333.0
161.3
22.2
Aug ‘18 Sep ‘18 Oct ‘18
The biggest buyer of Iran’s crude is
allowed to import 360,000 barrels a day
under the exemptions, according to
people with knowledge of the matter.
That doesn’t include oil produced by
projects in the Islamic Republic in
which Chinese companies have equity.
While China had bought about
658,000 barrels a day over the first nine
months of this year, the government
was said to have told at least two state oil
companies to avoid purchasing the
producer’s oil before the sanctions went
https://t.me/TheHindu_Zone_official
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 1
GST: The input-tax credit that to tax authorities
an exporter claims since by hand, which
exports are zero-rated, and makes the process
the refund of Integrated GST tedious. Sahai
(IGST) to take back the tax said the value of
paid on imports for the pur- refunds not set-
pose of exports. tled because of
The ministry said about deficiency might
93.27 per cent (~429.35 billion) not be high, but
of the total IGST refund the number of
claims of ~460.32 billion exporters whose
transmitted to customs from refunds are pend-
GSTN as on October 31, 2018 ing is dispropor-
have already been disposed. tionately high.
The remaining claims “Small
amounting to ~30.96 billion exporters are the
are held-up on account of var- worst-hit when it
ious deficiencies, which have comes to unsettled
been communicated to states. refunds,” he added.
exporters for remedial action. The respective GST GST officials said after the
Exporters said they are not
worried about IGST refunds.
authorities have issued defi-
ciency memos for the rest of
refunds are sanctioned by the
CBIC, the Pay and Accounts
They said that the online the ~52.39 billion. Office (PAO) in the office of
process for claiming IGST Ajay Sahai, director gener- the controller of accounts is
refunds is robust. However, al & CEO of the Federation of obligated to disburse the
when it comes to claiming the Indian Export Organisations refund to the beneficiary.
input-tax credit (ITC), (FIEO), also said, “The CBIC Some refunds get stuck at this
exporters expressed concerns. disposes the refund claims stage, they said.
The ministry said orders they receive, but in case of While the sanction of
have been issued for input tax ITC, many applications do not refunds pertains to those
credit worth ~346.02 billion of reach the right authorities done by the CBIC, the actual
the total claims of ~421.45 bil- due to deficiency in applica- refund amount disbursed by
lion as on October end. tions.” the respective pay and
Refunds worth ~1.59 billion Exporters claim that they account offices at the central
are pending with the Centre have to resort to printed appli- and state levels is not yet
and ~21.46 billion with the cations and have to submit it available.
Eye on divestment target,
govt to sell enemy shares,
exit Dredging Corp
ARUP ROYCHOUDHURY said at a post-Cabinet media briefing.
NewDelhi,8November According to the statement, a total
number of 65 million shares in 996 com-
In a bid to meet the Centre’s steep ~800- panies of 20,323 shareholders are under
billion disinvestment target, the Union the custody of CEPI. Of these 996 com-
Cabinet, on Thursday, approved selling
of ‘enemy shares’, currently with the
panies, 588 are active companies and
139 are listed on the exchanges. These
Custodian of Enemy Property for India
(CEPI), in 996 companies, and gave its
shares have been held by CEPI since
1968, Prasad said.
nod to the government divesting its
entire stake in Dredging Corporation of
CEPI is a body which holds assets
previously held by those who emigrated
India (DCI) to a consortium of four to Pakistan.
ports. The process for selling these shares
The ‘enemy shares’ are valued at ~30 will be approved by an alternative
billion at current rates, the government mechanism comprising Finance
said, while the Centre’s 73.47 stake in Minister Arun Jaitley, Home Minister
DCI is valued at ~7.17 billion as on Rajnath Singh, and Minister of Road
Wednesday’s closing date. Given the Transport and Highways Nitin Gadkari.
government’s past history with acquisi- The alternative mechanism will be
tions within the public sector compa- supported by a panel of officials co-
nies’ space, the consortium of chaired by the secretary, Dipam and
Visakhapatnam Port Trust, Jawaharlal home secretary, and representatives
Nehru Port Trust, Kandla Port Trust, from other department, and will give
and Paradip Port Trust is likely to its recommendations with regard to
acquire the Centre’s stake in DCI at a quantum, price band, and mechanisms
premium. for sale of shares.
“In principle approval has been “Before initiation of sale of any ene-
accorded for sale of enemy shares under my shares, CEPI shall certify that the
the custody of Ministry of Home sale of the enemy shares is not in con-
Affairs/CEPI, as per sub-section 1 of travention of any judgment, decree or
Section 8A of the Enemy Property Act, order of any court, tribunal or other
1968,” said an official government state- authority or any law for the time being
ment. in force and can be disposed off by the
The shares will be sold by the government,” the statement said, and
Department of Investment and Public added that Dipam will appoint mer-
Asset Management (Dipam) and count chant bankers, legal advisors, and oth-
towards disinvestment proceeds for the ers for the process of disposing enemy
year, Law Minister Ravi Shankar Prasad shares.
Iran's crude oil exports to India
‘000 barrels per day
India opens Padur
800 strategic reserves for
600 foreign oil firms
400 After Abu Dhabi National Oil
462.4 354.8 Corporation (Adnoc) started storing
200 crude oil at Mangaluru strategic
Jan 31,’17 Sep 31,’18
reserves recently, the Union Cabinet on
S Korea's Iran condensate imports to Thursday approved the filling of Padur
strategic petroleum reserves (SPRs) in
be kept below 200,000 b/d (in ‘000) Karnataka too by overseas national oil
405 500 companies. The SPR facility at Padur is
400 an underground rock cavern with a
300 capacity of 2.5 million tonnes (mt)
0 200
100
having four compartments of 0.625 mt
each. The filling of the SPR under
0 public private partnership model is
Jan 31,’17 Sep 31,’18 being undertaken to reduce budgetary
Iran'sshareofTaiwan'stotaloil support of Government of India.
importshasfallenoverpast15yrs(%)
SHINE JACOB
18 20
15 now that it’s one of the eight recipients
2 of exemptions, Minister of Economy,
10 Trade and Industry Hiroshige Seko told
0.0
5 reporters on Tuesday.
0 While JXTG Holdings Inc., the
2003 2018 country’s biggest refiner, echoed that
view, it’s still considering whether to
into effect. That decision preceded an resume purchases from the Persian Gulf
upcoming meeting between President state, according to Senior Vice President
Xi Jinping and US counterpart Donald Yasushi Onoda.
Trump and coincided with flaring trade If the company decides to import, oil
tensions between the countries. will arrive in Japan as early as January,
Chinese ship owners had also stopped after it makes nominations in
hauling Iranian oil. December or the following month, he
said. Japanese processors halted
Japan purchases of Iranian crude in October
Waiver: TBC purchases before under US pressure. The Asian nation cut
sanctions: About 160,000 b/d in Jan.- shipments in order to get the waiver,
Sept. 2018. The nation’s refiners are Finance Minister Taro Aso said on
likely to restart imports of Iranian oil Tuesday. BLOOMBERG
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official

.
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 WORLD 7 <

IN BRIEF
Gunman kills 12 in California Trump fires A-G, says will VW Is Planning
$21,000 e-car to
fight if Congress probes
bar packed with students
Agunmankilled12people,includingapoliceofficer,whenhe
openedfireinacountrymusicbarpackedwithcollegestudentsin
California,officialsandwitnessessaidonThursday.Policesaidthe
gunmanwasfounddeadinsidethebarontheoutskirtsofLos
challenge Tesla
Angelesalthoughitwasnotimmediatelyclearifhewaskilledby REUTERS BLOOMBERG 200,000 per year, they said.
officersorshothimself.Speakingatpressconferenceinthewee Washington, 8 November San Francisco, 8 November That would put it on par
hoursofThursday,asheriffsaidthataroundadozenotherpeople with current production levels

U
hadbeeninjured.Hesaidthemotiveoftheshootingandthe S President Donald Trump forced Volkswagen plans to add a of the more-expensive Tesla
identityoftheshooterwerenotknown.Itwasthesecondmass out his attorney general on subcompact crossover costing Model 3, the US electric-car
shootinginAmericainlessthantwoweeks.Witnessessaidthatthe Wednesday and threatened to fight about ^18,000 ($21,000) to its leader’s most affordable vehi-
gunman,whowaswearingablacktrenchcoat,throwseveral back if Democrats use their new majority in all-electric ID range, expand- cle, which is due to arrive in
smokegrenadesinsidetheBorderlineBarandGrillbeforehe the US House of Representatives to launch ing its lineup of zero-emis- Europe next year.
startedheshootingataround11:20pmonWednesdaynight.“We investigations into his administration and sions vehicles that are more The ID range is at the heart
havenoideaifthereisaterrorismlinktothisornot.Asyouknow, finances. affordable than those of Tesla, of one of the auto industry’s
theseareongoinginvestigationsandthatinformationwillcome Trumpcameoutswingingadayafterhis according to people familiar most aggressive electric-car ini-
outassoonasweareabletodetermineexactlywhothesuspect Republicans lost control of the House, and with the matter. tiatives — a plan to put 50 mod-
wasandwhatmotivehemighthavehadforthishorrificevent,” followed through on repeated threats to The entry-level vehicle may elsontheroadacrossthegroup,
VenturaCountySheriffGeoffDeantoldreporters. AFP/PTI remove Attorney General Jeff Sessions. be built at VW’s factory in including volume brands such
Sessions, a 71-year-old former US sena- Emden, Germany, said the as VW, Seat and Skoda. The
tor from Alabama, was an early and loyal people, who asked not to be world’slargestautomakerplans
Nike, LVMH stick Toshiba sheds more supporter of Trump but drew his fury when identified because the plan to use its massive scale to offer
up for China in the assets, cuts jobs to he recused himself from an investigation
into Russian meddling in the 2016 White
hasn’t received final approval
by the manufacturer’s super-
less-expensive e-cars than
rivalslikeTesla,hopingtoblunt
piracy fight gain investor trust House campaign. visory board. Sales could start their early advantage as more
NikeandLVMH,whohave Toshibaannouncedon His departure was the first in what could sometime after 2020, and the consumers adopt zero-emis-
struggledagainstknockoffsof Thursdayitissheddingassets, be a string of high-profile exits as Trump company expects to sell about sions vehicle.
theirfamousproducts,are cuttingjobsandbuyingbackits reshapes his team to gird for his own 2020 US President Donald Trump during a news conference following Tuesday’s midterm
stickingupforChinawhenit stockstartingthisweek, re-election effort. The Republican presi- congressional elections at the White House in Washington PHOTO: REUTERS
comestofightingpiracy.TheUS sendingitssharesup13per dent named Sessions’ chief of staff,
PresidentDonaldTrumphas
citedthetheftofAmerican
cent,astheonce-mighty
Japaneseconglomerateaimsto
Matthew Whitaker, as acting attorney gen-
eral and said he would nominate someone US President blames White House Tesla Director Denholm to
intellectualproperty,including
thecounterfeitingofmajor
regaininvestorconfidence.The
companyannounceditis
for the job soon. Trump’s move prompted
sharp criticism from Democrats, who said media, Republicans suspends CNN replace Musk as board chair
brands,asjustificationfor
imposingtariffsonChinese
liquidatingitsBritishnuclear
powerunitandsellingitsUS
he was seeking to undermine the Russia
probe. Nancy Pelosi, the House Democratic for losses reporter’s press pass Tesla said Robyn Denholm
will replace Elon Musk as
imports. Butexecutivesattwo liquefiednaturalgasbusiness leader who could be the next speaker, said Thedayafterhispartylostitslockonthe TheWhiteHouseonWednesdaynight chair of the electric-car mak-
ofthebiggestvictimsofsuch toChina’sENNGroupaspartof in a statement posted to Twitter that USCongress,theUSPresidentDonald suspendedthepresspassofCNNreporter er’s board, more than a
violationspraisedBeijing’s anewfive-yearbusiness Sessions’ ouster was a “blatant attempt” to TrumpwalkedintoaWhiteHousepress JimAcosta,hoursafterDonaldTrump month after the billionaire
effortstocrackdownon strategy,whichalsoincludes undermine the Russia probe. She urged conferencereadyforpoliticalcombat, lashedoutatAcostaduringatensepost- had to step down from the
intellectualpropertyabusesat 7,000jobcuts,or5percentof Whitaker, who now oversees Special name-checkingRepublicanswhohe electionnewsconference.WhiteHouse role as part of a settlement
theChinaInternationalImport itsworkforce,overfiveyears. Counsel Robert Mueller and has argued blamedforlosingtheirseatsandlashing PressSecretarySarahHuckabeeSanders with US regulators.
ExpoinShanghaionThursday. REUTERS< Mueller’s investigation has gone too far, to outatreporterswhochallengedhis accusedAcostaofbeingdisrespectfultoa The appointment of
BLOOMBERG< recuse himself from any involvement. assertions.Trumphasmadeaccusations WhiteHouseintern.Theinternhadbeen Denholm, one of the two Robyn Denholm
During a combative news conference in ofunfaircoveragefromthemediaastaple passingthemicrophonetoaskquestions. women on the firm’s nine-
Bombardier to cut which he tangled with reporters, Trump onthecampaigntrail.Republicanslost Atonepoint,shetriedtotakeitfromhim member board, caps months been on Tesla’s board since
Asia buoyed by 5,000 jobs, shares trumpeted his role in Republican gains in controloftheHouseofRepresentativesto andhewouldn’tletgo.“Wewillnever of turbulence for the compa- 2004, quit as chairman but
post-election Wall dip on cash concerns Tuesday’smidtermcongressionalelections, Democrats,butTrumpshruggedthatoff, tolerateareporterplacinghishandsona ny and its stock as investors retained his role as CEO. His
and warned of a “warlike posture” in castingTuesday’selectionresultsas“very youngwomanjusttryingtodoherjobasa called for stronger oversight tweets attracted scrutiny
St rally, $ bounces Bombardieragreedtoselltwo Washington if Democrats investigated him. closetocompletevictory”. REUTERS WhiteHouseintern,”shesaid. BLOOMBERG of Musk, whose erratic public from several other govern-
Asian stocks scaled a one- ofitsunitsforaround$900 Democrats will now head House com- behaviour raised concerns ment agencies as well.
month peak on Thursday, millionandcut5,000jobsto mittees that can probe the president’s tax about his ability to steer the Denholm is currently
after investors drove a Wall focusonbusinessjets,butits returns, which he has refused to turn over victories that added to the Republican going to do is end up in back and forth and company through a rocky chief financial officer at
Street rally on relief the US sharesfellasmuchas26per since he was a candidate, possible business majority in the US Senate, telling reporters back and forth, and two years is going to go phase of growth. Australian telecoms operator
midterm elections delivered centonadisappointingfree conflicts of interest and any links between at the White House that the gains out- up and we won’t have done a thing.” The company had until Telstra Corp and has been an
no major political surprises, cashflowforecast.The his 2016 campaign and Russia, a matter weighed the Democrats’ takeover of the The divided power in Congress com- November 13 to name an independent director on
while the dollar bounced and Canadianfirmsaiditwouldonly being investigated by Mueller. House. The expanded Senate majority bined with Trump’s expansive view of exec- independent board chair- Tesla's board since 2014. She
pulled away from 2-1/2-week beabletomeetits2018freecash Trump said he could fire Mueller if he could make it easier for Trump to confirm utive power could herald even deeper polit- man under its agreement takes over as Tesla's chair
lows. Spreadbetters expected flowestimatebyusing$635 wanted but was hesitant to take that step. “I a new attorney general, who will need a ical polarisation and legislative gridlock in with the Securities and immediately and will be
European stocks to follow Asia millioninproceedsfromthe could fire everybody right now, but I don’t majority of votes in the 100-seat chamber. Washington. There may be some room, Exchange Commission, tasked with overseeing the
higher at the open, with saleofaTorontoplantearlier want to stop it, because politically I don’t Trump added that he was willing to however, for Trump and Democrats to work which followed an investiga- firm as it ramps up produc-
Britain’s FTSE seen adding thisyear.Analystshadexpected like stopping it,” he said. work with Democrats on key priorities but together on issues with bipartisan support tion into Musk’s tweets that tion of its Model 3 sedans,
0.36 per cent, Germany’s Bombardiertoachieveitstarget Moscow denies meddling. Trump, call- felt any House investigations of his admin- such as a package to improve infrastruc- he had “funding secured” for seen crucial for the carmak-
DAX rising 0.55 per cent ofroughlybreakingevenon ing the Mueller probe a witch hunt, has istration would hurt prospects for biparti- ture, protections against prescription drug a deal, later scuttled, to take er's sustained profitability.
and France’s CAC climbing cashwithoutrelyingonthose repeatedly said there was no collusion. sanship. “They can play that game, but we price increases and the push to rebalance Tesla private. Musk, who has REUTERS
0.45 per cent. REUTERS< proceeds. REUTERS< Trump was buoyed on Wednesday by can play it better,” Trump said. “All you’re trade with China.

FROM PAGE 1
There was a simplicity to my
>

India Inc staff ing an eye out for the amount of the

life in Chennai, says Pichai

rollover, which is low as of now. “For

addition in FY18 top tier companies (as perceived by the

market) the extent of rollovers is

DAVID GELLES
WHEN I FIRST slowest in 3 years around 50 per cent. However, for tier II
companies, the rollover is under 10 per
New York, 8 November Six out of 10 new corporate jobs were cent,” Jajoo added.
JOINED created by the industry in the previous Recent steps by regulators such as
Google is facing more chal- GOOGLE I WAS three years. The headcount in domestic the RBI and the National Housing
lenges today than at any time in STRUCK BY THE manufacturers (companies ex-banks & Bank, and large banks such as State
its 20-year history. Employees FACT THAT IT WAS financials and IT services exporters) Bank of India, to improve access to
areoutragedoversexual harass- A VERY IDEALISTIC, was up 0.5 per cent year-on-year in the funds, have also benefited non-banks.
ment. Executives are under last fiscal year, slightly up from the 0.3 SBI has provided liquidity to NBFCs
scrutiny for an effort to secretly
OPTIMISTIC PLACE. per cent growth in the previous year and HFCs by purchasing their loans
make a censored version of its I STILL SEE THAT but down from 2.3 per cent in 2015-16. worth ~52.50 billion in October and
search product for China. IDEALISM AND The headcount in the industry was up deals worth ~159.4 billion are in the
Political and social debates, OPTIMISM A LOT 8,392 in 2017-18, up from 4,718 new hir- pipeline. SBI has set a target of ~450
including one over building IN MANY THINGS ing in 2016-17. billion for buying assets from non-bank Jaitley said the formalisation of the
military-grade artificial intelli- WE DO TODAY. Experts, however, doubt the capacity lenders by the end of March 2019, said economy had prompted the
gence,areroilingtheworkforce. of financial services to fully compensate the bank's chairman, Rajnish Kumar.
Yet the man responsible for
BUT THE WORLD IS for the hiring slowdown in the IT indus- DBS Bank in a research note on
government to earmark more
resources for the welfare and
leading Google through this DIFFERENT try. Worse, they don’t see any upswing in years, preparing it to handle 1 billion Thursday said amid support from pub- infrastructure development
minefield is not one of the com- SUNDAR PICHAI corporate hiring in FY19 given the head- air trips per year. The government lic sector banks, the liquidity squeeze
pany’s founders — Larry Page winds being faced by non-bank lenders expects that a lion’s share of the faced by India’s NBFCs had eased a bit Modi-led government came to power in
and Sergey Brin — or even Eric currently. “As NBFCs and retail banks investment would come from private in recent days. But balance-sheet con- May 2014, the number of I-T filers was
Schmidt, the company’s former were leading job creators in the last three players. straints and higher funding costs will 38 million. Now, the number has
chief executive and chairman, Firm changes policies on sexual misconduct years, the present liquidity crisis will The decision to change the model of likely prompt NBFCs to slow their lend- reached 68.6 million.
whowasusheredasidelastyear. Googlechangedsomepoliciesonsexualmisconductafter force them to go slow on new business privatisation comes after the AAI’s ing activity. “By the time the first five years of
Instead, the man in charge ofthousandsofemployeeswalkedoutoftheirofficeslastweek.The growthandfreshhiring,adverselyaffect- plans of handing over only operation In this milieu where raising money this government are over, we will be
arguably the most influentialAlphabetunitismakingarbitrationoptionalforindividualsexual ing the overall job creation by corporate and maintenance (O&M) of airport ter- becomes a challenge, securitisation has close to doubling the assessee base,”
harassmentandsexualassaultclaims.Itpledgedtoexpand
company in the world is Sundar sector,” said Madan Sabnavis, head minals at Ahmedabad and Jaipur end- emerged as a significant alternative for he said. The FM said another success of
mandatorytrainingontheissue."Goingforward,wewillprovide
Pichai, a soft-spoken engineer economist at Care Ratings. ed in a stalemate. liquidity, especially for HFCs. Another demonetisation was the push to digiti-
who grew up in Chennai. moretransparencyonhowwehandleconcerns.We’llgivebetter Sabnavis expects a pick-up in hiring Industry sources said private play- funding avenue gaining traction is sation. With paucity of cash in the
supportandcaretothepeoplewhoraisethem.Andwewilldouble by consumer companies in FY19, but ers stayed away as they found O&M of retail bonds. economy immediately after ~500 and
Tellmeaboutgrowingupin downonourcommitmenttobearepresentative,equitable,and they are unlikely to move the overall nee- airport terminals unattractive. Under Non-banks have raised around ~270 ~1,000 notes were demonetised, indige-
Chennai. respectfulworkplace,"GoogleChiefExecutiveOfficerSundarPichai dle given their smaller employee base. this model, only certain activities such billion through retail bonds in FY19 (up nous cards and payment systems such
There was a simplicity to my wroteinapublicmessagetoemployeesonThursday. BLOOMBERG The financial services industry is as maintenance of terminal and car to September), compared to ~50 billion as RuPay and Unified Payments
life, which was very nice com- also highly cyclical where growth is parking at Jaipur and Ahmedabad air- raised in 2017-18, CRISIL said. Interface (UPI) have overtaken
pared with today’s world. We so brown here.” technologyandscreentime greatly affected by macro-economic ports were to be handed over to private Mastercard and Visa.

lived in a kind of modest house,
shared with tenants. We would
sleep on the living room floor.
There was a drought when I was
growingup,andwehadanxiety.
Even now, I can never sleep
The family was like, “We like
to call it golden.” When I was
back at IIT, I had access to the
computer so rarely — maybe I’d
been on it four times. To come
and just have these labs in
withyourfamily?
When I come home on a Friday
evening, I really do want to let
go of my devices for a couple
days. I haven’t quite succeeded
in doing that. At home, our TV
changes such as interest rates,
exchange rates and corporate capex.
In contrast, the IT services industry is
highly stable and is counted as a defen-
sive sector by investors.
developers.
Executives of major airport devel-
opers welcomed Thursday’s decision
but cautioned that the investment
appetite will depend on the terms and
conditions of the sale.
Note ban
“Today, Visa and Mastercard are los-
ing market share to indigenously devel-
oped payment system. The share of
expanded tax UPI and RuPay has reached 65 per cent
of payments through debit and credit
base: Jaitley cards,” Jaitley said.

without a bottle of water beside
my bed.
Other houses had refriger-
ators, and then we finally got
one. It was a big deal. But I had
a lot of time to read. I was pro-
cessing a lot. I read whatever I
which you had access to com-
puters and you could program,
it was a big deal to me. I was so
wrapped up in that, that to
someextentIdidn’tunderstand
there was a much bigger shift
happening with the internet.
6 airports get
is not easily accessible, so that “If the terms and conditions of the He also dismissed those who criti-
there is “activation energy” sale are simple and attractive, there will The finance minister also said the GST cised demonetisation as “ill-informed”
before you can easily go watch be great interest from the bidders. We had made it increasingly difficult to for saying the entire demonetised cash
TV. I’m genuinely conflicted,
because I see what my kids
Centre’s nod for will go through the details and take a
decision,” said R K Jain, CEO, Mumbai
evade taxes. The indirect tax-to-GDP
ratio had gone up to 5.4 per cent since
was deposited in banks. Confiscation of
currency was not an objective of the
learn from all this. My son is 11
years old, and he is mining
privatisation International Airport. the GST roll-out, from 4.4 per cent in
FY15.
note ban, he said.
“Getting it into the formal econo-

could get my hands on. I read
Dickens. Friends, playing
street cricket, reading books
— that was kind of the totality
of life. But you never felt lack-
ing for anything.
Whatwasitlikecomingoverto
attendStanford?
It was the first time I had ever
been on a plane. I always want-
ed to be in the Valley. I kind of
knew that’s where everything
happened. I remember landing
in California, and I stayed with
a host family for about a week.
I was in the car going from the
airport, and was like, “Wow, it’s
YoustartedatGoogle14years
ago.Doesitstillfeellikethe
samecompanyyoujoined?
When I first joined Google I was
struck by the fact that it was a
very idealistic, optimistic place.
I still see that idealism and opti-
mismalotinmanythingswedo
today.Buttheworldisdifferent.
Maybe there’s more realism of
how hard some things are.
We’vehadmorefailures,too.But
there’s always been a strong
streak of idealism in the com-
pany, and you still see it today.
What’syourapproachto
Ethereum and earning money.
He’s getting some insight into
how the world works, how
commerce works.
Every generation is worried
about the new technology, and
feels like this time it’s differ-
ent. Our parents worried about
Elvis Presley’s influence on
kids. So, I’m always asking the
question, “Why would it be
any different this time?”
Having said that, I do
realise the change that’s hap-
pening now is much faster
than ever before. My son still
doesn’t have a phone.
©2018 The New York Times New Service
“The bid is likely to attract a good
response from global operators since
all six airports are growing fast, with
robust catchment areas and low uncer-
tainties. The concession fee is likely to
be higher than the limited profits being
earned by the AAI currently because
of many administrative restrictions.
This can be used for airport develop-
ment in the interiors,” said Amber
Dubey, head of aerospace and defence
at consultancy firm KPMG.
In order to handle the rush in the
Indian skies, the government has
announced a plan to start a massive
airport-building and upgrade project.
This would entail a total expenditure
of about ~2 trillion over the next 10
Green shoots of
liquidity for NBFCs
in commercial
paper market
“Liquidity for NBFCs is comfortable.
While they are covered for their cur-
rent repayment cycle, any fresh fund-
ing remains a challenge. So their busi-
ness expansion rate may slow,” said
Mahendra Jajoo, head (fixed income),
Mirae AMC.
Besides difficulties in getting fund-
ing for fresh business, experts are keep-
Tax rates — both direct and indi-
rect — have been cut, he said, citing
the example of 334 commodities on
which the pre-GST effective levy was 31
per cent. Jaitley said the formalisation
of the economy had prompted the gov-
ernment to earmark more resources
for the welfare and infrastructure
development.
In FY18, 68.6 million tax returns
were filed — an increase of 25 per cent
over the previous year.
As of October 31 this year, 59.9 mil-
lion tax returns have been filed — an
increase of 54.33 per cent over the pre-
vious year. About 8.6 million new tax-
payers were added this year.
When the Prime Minister Narendra
my and making the holders pay tax was
the broader objective. The system
required to be shaken up in order to
make India move from cash to digital
transactions. This would obviously
have an impact on higher tax revenue
and a higher tax base,” Jaitley said.
Economic Affairs Secretary
Subhash Chandra Garg said demoneti-
sation and the GST reflect the long-
term vision of the government and its
ability to undertake massive structural
reforms.
“Tax filers under both direct and
indirect taxes are close to getting dou-
bled. Digital payments have risen
sharply and become commonplace.
Fake notes are out,” Garg tweeted.
https://t.me/pdf4exams
8 ISSUES AND INSIGHTS
>
Sniff?Yes.Paws?No.
The RBI isn’t inviolate. But the government must remember a maxim:
“Nose in, paws out”. Ask questions; critique; but hands off the till
OMKAR GOSWAMI
I
n the past, there have been some
contentious meetings of the central
board of the Reserve Bank of India
(RBI), but none as acrimoniously incon-
clusive as the one on October 23, 2018.
There were major differences of opinion
between the RBI brass plus some of its
nominee directors and the trio of
Subhash Garg and Rajiv Kumar from
the Ministry of Finance (MoF) and S
Gurumurthy, a chartered accountant
better known as a convenor of the
Swadeshi Jagaran Manch.
Matters worsened with Deputy
Governor Viral Acharya’s AD Shroff
Memorial Lecture on October 26, 2018
Darjeeling in 1905
The two most important factors in the development of Darjeeling have been the choice of the district for a health resort
and the subsequent planting of tea in the hills
INFRA DIG
BIBEK DEBROY
I
n 1905, there was a district gazetteer
for Darjeeling. “The history of
Darjeeling presents a late chapter
in the extension of British rule, for it
was not until the beginning of the 19th
century that the East India Company
was brought into direct relations with
the tract of country which now bears
the name. It then formed part of the
dominions of the Raja of Sikkim, a pet-
ty ruler who had long been engaged in
an unsuccessful struggle against the
growing power of the warlike Gurkhas...
The intervention of the British was thus
successful in preventing the Gurkhas
from turning the whole of Sikkim and
the hills west and south of the Tista into
an outlying province of Nepal; and
Sikkim, including the present district
of Darjeeling, was retained as a buffer
state between Nepal and Bhutan.”
This takes us to the next step. “From
a report dated the 18th June 1829, in
which he claims to have been the only
European who ever visited the place,
we learn that Lloyd visited “the old
Goorka station called Dorjeling” for six
We’re running out of road
That’s why sitting in bumper-to-bumper traffic is becoming more of a
headache, especially in emerging countries
DAVID FICKLING
T
hink traffic is bad in New York
or London? They ain’t got noth-
ing on Jakarta and Chongqing.
The top of TomTom NV’s ranking
of the world’s most congested places is
dominated by emerging markets.
Among cities in rich countries, only
Los Angeles makes it into the top 15.
Some of the world’s worst traffic
snarls are in South Asian cities not
even picked up by TomTom’s rank-
ing, such as Dhaka, Delhi and Karachi.
Their problems are only likely to get
worse as growing populations and ris-
ing incomes push already-straining
transport networks to the limit.
In emerging economies, many cities
have reached the point where roads’
carrying capacity is running out. There
are about 40 registered vehicles for
every kilometer of road in the US,
France, Russia and Brazil, based on
analysis of World Health Organization
and Central Intelligence Agency data.
That compares with Iran, Thailand,
Vietnam and Indonesia, which are all
north of 200 vehicles per kilometer. It’s
hardly an accident that the traffic jams
in Tehran, Bangkok, Ho Chi Minh City
and Jakarta have become so legendary.
Two factors have made this just
about manageable, for the time being.
First, fewer people own vehicles in
poorer places: There are just 13 regis-
trations per 1,000 people in
Bangladesh, 30 in Nigeria, and 44 in
Pakistan, compared with more than
500 in most wealthy countries. And
when people in low-income regions
do get their first vehicle, they tend to
where he pointedly demonstrated the
pitfalls of government interference in
the finances and decision-making inde-
pendence of central banks. The RBI gov-
ernor has now called the next central
board meeting on November 19 to deal
with various unresolved issues. Every
economic and financial commentator
tensely awaits its outcome.
Make no mistake about this: The core
issue is that the MoF wants to dip into
the RBI’s reserves to pocket ~3.6 trillion
— and has utilised the never-used sec-
tion 7(1) of the RBI Act to make this
claim. Here are some facts. From 2013-14,
the RBI has been transferring its entire
annual surplus of income over expen-
diture to the central government. These
amounts are huge: ~500 billion in 2017-
18, ~306.5 billion in 2016-17, more than
~658 billion each year in 2014-15 and
2015-16, and almost ~527 billion in 2013-
14. The smaller transfer in 2016-17 was
due to huge additional costs incurred
because of demonetisation, the govern-
ment’s economic idea par excellence.
Not satisfied, the MoF believes that
the RBI has no reason to have ~10.46
trillion of reserves, and ‘under public
days in February 1829, and “was imme-
diately struck with its being well adapt-
ed for the purpose of a sanitarium.”…
On all grounds, he strongly urged the
importance of securing possession of
the place, and, in particular, pointed out
its advantages as a centre which would
engross all the trade of the country, and
as a position of great strategical impor-
tance, commanding the entrance into
Nepal and Bhutan... General Lloyd was,
accordingly, directed to open negotia-
tions with the Raja of Sikkim, on the
first convenient occasion, for the ces-
sion of Darjeeling in return for an equiv-
alent in money or land.” This happened
in 1835. “This was an unconditional ces-
sation of what was then a worthless
uninhabited mountain; but in 1841 the
Government granted the Raja an
allowance of ~3,000 as compensation,
and raised the grant to ~6,000 in 1846.”
However, “the Sikkim Raja had prohib-
ited his subjects from going to
Darjeeling and helping in establishing
the new settlement; and various expe-
dients were proposed to repopulate the
country, that is, to invite the Lepcha
refugees to return, to import labourers
from the indigo concerns in Rangpur
and Ramgarh (that is, Gaya and
Hazaribagh), or to procure settlers from
Nepal and Bhutan.”
We move to some years later. “The
year 1866 may be taken as marking an
epoch in the history of Darjeeling.
Peace was established within its bor-
ders; and thenceforth began the march
of progress and civilization. Rapid
progress was now at last made in the
development of the communications
of the district, which the Sikkim expe-
BUSINESS LIFE
Some of the world’s worst traffic snarls are in South Asian cities. Their
problems are only likely to get worse as growing populations and rising
incomes push already-straining transport networks to the limit
be motorbikes and scooters, which
take up less space than passenger cars.
Both those mitigating issues are less
helpful than they look. For one thing, as
incomes rise, vehicle ownership does,
too. For another, two-wheelers still
require surrounding space to avoid col-
lisions. Scooters and motorbikes on the
move take up about half the space of a
car. That, alongside the exhaust fumes
they spew, helps explain the motorbike
bans already implemented in parts of
Jakarta and Manila and planned for the
entire city of Hanoi by 2030.
One way of stemming this flood has
been restricting vehicle usage. Road-
space rationing programmes, which ban
driving for some cars on particular days,
have been implemented in cities from
Manila and Mexico City to Bogota and
Beijing. London charges for entry into
thecentralcity,whichhasasimilareffect.
https://www.estore33.com/
interest’ it ought to fork out ~3.6 trillion
to the exchequer. This year, the central
government is in a fiscal hole. Cutting
excise on petroleum products to damp-
en fuel price hikes has exacted a big toll;
tax buoyancy is less than estimated; and
disinvestment proceeds might fall short
of the target. The government needs to
demonstrate its fiscal prudence as well
as to fund some extra handouts before
the general election. Where better to get
the funds from than the RBI’s coffers?
On this, the RBI shouldn’t budge an
inch. For one, if the government can’t
meet its deficit targets, so be it. It can’t
march to the RBI and say, “Hand over
your reserves. It’s mine.” For another,
these reserves have been accumulated
over the years from seigniorage income
(the difference between the value of new
notes printed by the RBI and the costs of
printing and distribution) and interest
paid by the government to the RBI on the
latter’s holdings of government securi-
ties. These are kept to fight contingen-
cies. There are many: Sudden currency
fluctuations, decline in the rupee value
of gold, depreciation in the value of the
RBI’s holdings of government bonds,
Darjeeling’s most famous landmark, the Capitol Clock Tower. The British colonial
administration had left behind many historical landmarks and heritage buildings
including churches, parks, schools etc
dition of 1860 and the Bhutanese war
the year before had shown to be vitally
essential... The construction of the
Darjeeling Cart Road, that wonderful
example of engineering work which
subsequently made the alignment of a
railway so comparatively easy, was
accordingly begun in 1861…From this
time dates the first attempt to make the
hills the home of European education
in India. For some years Bishop Cotton
had been advocating the establishment
of hill schools for Europeans, and his
efforts were supported by Lord Canning
who pointed out in a celebrated minute
how the domiciled English and
Eurasians would, if neglected, become
profitless, unmanageable, and a glar-
ing reproach to the Government, while,
if properly cared for, they might
Alternatively you can limit car num-
bers by mandating special permits for
car ownership and using auctions or
lotteries to allocate a fixed quota. First
established in the 1990s by Singapore,
these systems have since spread to more
than half a dozen Chinese cities, includ-
ing Beijing, Shanghai, Guangzhou,
Shenzhen, and even the comparatively
sleepy outpost of Guiyang.
Then there are more free-market
solutions that have attracted the most
investment dollars and interest in
recent years — ride-sharing and
autonomous driving. These aren’t
likely to make a decisive difference.
Studies of ride-hailing services such as
Uber and Lyft suggest they may
encourage some people to give up on
owning their own vehicles — but they
also tempt riders away from higher-
capacity public transport modes.
insuring deposits, extraordinary expens-
es and, most importantly, to ensure that
the RBI has enough financial muscle as
the lender of last resort. You can’t use
disingenuous arguments about the
reserves being greater than warranted.
The red line is this: Such reserves are
not for the government to pocket when
its exchequer faces threat. Period.
The RBI must also stand firm on two
other issues. First, there can’t be any
dilution whatsoever on the Prompt
Corrective Action (PCA) framework that
was unveiled on April 13, 2018, which
constrains the operations of 11 weak
public sector banks riddled with bad
loans. These are, in increasing order of
feebleness, Corporation Bank,
Allahabad Bank, Bank of India, Oriental
Bank, United Bank, Dena Bank, Bank
of Maharashtra, UCO Bank, Central
Bank of India, IDBI Bank and Indian
Overseas Bank.
As on March 31, 2017, their ratio of
gross non-performing loan assets
(NPAs) to gross advances ranged from
11.7 per cent to 22.4 per cent. The situa-
tion is worse today. Acutely hyperten-
sive diabetic patients must be under
tight control. They can’t be given extra
doses of glucose. So too these banks.
They have to turn around before
demanding relaxation.
The second is the RBI’s notification
of February 12, 2018 on early recognition
of stressed assets. Today, banks have to
inform the RBI on a weekly basis which
become a source of strength to British
rule and of usefulness to India... The
two most important factors in the
development of the district have been
the choice of Darjeeling for a health
resort and the subsequent planting of
tea in the hills.”
“There has been a similar absence in
improvement in the industries followed
by the natives…The tools and imple-
ments in universal use are very much
what they have been for centuries past;
the old wooden plough and a little
kodali, the primitive spade of their fore-
fathers, have been handed down to the
present generation practically
unchanged. In spite of the fact that the
planters have shown how an improved
tool produces improved work, the
native impassively holds to his old
Autonomous vehicles could, in theo-
ry, increase road capacity by using short-
er stopping distances than would be safe
with human drivers. But for the moment
such technology remains science fiction,
especially in the complex, dynamic
streetscapes of emerging-world cities
crowded with scooters, hawkers, pedes-
trians, tuk-tuks and livestock.
The solution that’s likely to be the
most effective in the long term is also
the most drastic: An expansion of pub-
lic transport — in particular metro and
suburban rail networks that remove
traffic from roads altogether.
Luckily, that’s already underway.
The world will add about the same
length of metro-rail tracks in the 10
years through 2022 as it built in the pre-
vious 150 years since the opening of
London’s Metropolitan Railway in 1863.
China’s metro systems have expanded
at breakneck speed this century, and
India is gradually catching up. Even
laggards like Dhaka, Jakarta, Lahore
and Lagos are finally building dedicat-
ed commuter-rail networks. It’s unlike-
ly to be enough, though.
Take Beijing. If any city should be
able to meet the demands of transport-
ing a fast-growing urban population,
it’s the showpiece capital of the most
ambitious infrastructure-developer the
world has ever seen. And yet the city is
still bursting at the seams, despite road-
space rationing; vehicle quotas; a brand-
new metro system that carries more
passengers than New York and London
put together; and longstanding hukou
restrictions on residency.
The city governments elsewhere in
the developing world will find it a lot
harder to accommodate their swelling
populations without grinding to a halt.
If you want a vision of the future, imag-
ine a boot idling on a brake pedal while
stuck in traffic — forever.
© 2018 Bloomberg
https://t.me/TheHindu_Zone_official
NEW DELHI | FRIDAY 9 NOVEMBER 2018
accounts have not paid their principal
and interest dues in the first 30, the sec-
ond 30 and the third 30 days of each
quarter; myriad unsatisfactory restruc-
> CHINESE
turing schemes have been eliminated;
instead, the stressed accounts, where
so deemed, must be sent for resolution
under the Insolvency and Bankruptcy
Code. Defaulting companies hate such
toughness. So do banks because rolling
loans gather no loss. No surprise, there-
fore, that defaulting companies and
banks have been complaining to the
powers that be. Given funding needs for
the 2019 elections, such complaints
have become more significant.
There are a couple of issues where
the RBI can accommodate the govern-
ment. These relate to higher credit flows
for medium and small enterprises that
are genuinely suffering from the want of
working capital; and easing the credit
flow from banks to non-banking finan-
cial companies. But on walking off with
the reserves, easing PCA and early
recognition of stressed assets, there
should be no ‘give’ whatsoever.
Some of these issues can be resolved
if the actors learn how to quietly com-
municate, not gesticulate. And it will
do for this government to follow a sim-
ple maxim: “Nose in, paws out”. Ask
questions; critique when required; but
keep your hands off the till.
The author is an economist and chairman of
CERG Advisory Private Ltd
ways…It is confessedly difficult for an
Indian to learn any trade but that of his
forefathers.”
“At one time, optimistic hopes were
entertained that a large European
colony would be established in the dis-
trict. Brian Houghton Hodgson looked
forward not only to the rearing of sub-
tropical products under European
supervision, but also to agricultural set-
tlements by the British race; and he
hopefully pointed out that with “the
backing of fifty to one hundred thou-
sand loyal hearts and stalwart bodies of
Saxon mould, our empire in India might
safely defy the world in arms against it.”
This expectation has not been fulfilled,
nor is it likely that the European farmer
will ever be able to compete with the
cheap labour of the hillmen in rearing
country crops. Similar failure met the
early attempts of the Moravian mis-
sionaries to maintain themselves by
industrial labour, and in the end a few of
them turned tea-planters and secured
some of the best land in the district.”
When this gazetteer was written, there
were actually 1,309 Europeans and 329
Eurasians in the district. “The only oth-
er (other than Darjeeling and Kurseong)
places of any importance are Siliguri
and Kalimpong, the former being a vil-
lage of some 784 souls in the Tarai, and
the latter having a population over 1,000
inhabitants. The former is a swampy
malarious village close to the
foot of hills, but Kalimpong is
charmingly situated.”
The author is chairman, Economic Advisory
Council to the Prime Minister.
Views are personal
> LETTERS
Enough is enough
Apropos “Labour statistics disappoint in
October”(November 5). This is a matter of
great concern that the unemployment
rate in India is increasing day by day.
According to the Centre for Monitoring
Indian Economy data, it rose to 6.9 per
cent in October that is the highest in two
years. The labour participation rate fell
sharply to 42.4 per cent, which is the low-
est since January 2016. The count of the
unemployed persons actively looking for
jobs almost doubled to 29.5 million in
October 2018, while October to December
is traditionally the job creation period
across all sectors in the Indian economy.
The government is indulged in making
statues and changing the names of cities.
People are now disillusioned by the fake
promises of the government.
Q B Malik New Delhi
Take a stand
The editorial “Dealing with Iran”
(November 6) is fabulous. The US
announcement to temporarily waive eight
countriesincludingIndiafromsanctionsis
not only a great relief but also provides a
chance to get over the financial crisis it is
undergoing. The further increase in crude
oil will put the share markets down and
also increase commodity prices causing
distress to the common man. India should
not succumb to the US pressure and stand
> HAMBONE
1
WHISPERS
Bharatiya Janata Pariwar
Bharatiya Janata Party (BJP) has time and
again blamed the Congress party and the
Gandhi family for foisting dynastic
politics on the nation. But in Madhya
Pradesh, the party might find it difficult
to follow the same strategy given the
number of senior leaders fighting to
secure tickets for their kin. Till now, the
party has announced 225 candidates who
would run for the coming Assembly
elections; of that, at least 42 are sons,
wives or close relatives of senior BJP
leaders. In other words, every fifth
candidate in the state is a relative of a
BJP leader. Former chief minister Babulal
Gaur's daughter-in-law Krishna Gaur
and party general secretary Kailash
Vijayvargiya's son Akash Vijayvargiya are
among the latest to get tickets. And guess
what, Congress leaders are not letting
that opportunity pass them by. They have
already started calling the BJP the
Bharatiya Janata ”Pariwar”.
Growing importance
The candidature of Sanjay Singh
Masani, brother-in law of Madhya
Pradesh Chief Minister Shivraj Singh
Chouhan, from the Waraseoni
(Balaghat) seat has started to bother
leaders of his former party. Bharatiya
Janata Party leader and state
agriculture minister Gaurishankar
Bisen, who had earlier said that
Masani was a political lightweight, has
now announced he would campaign
against Masani. “As long as the CM’s
brother-in-law was in the party, he
had some standing but not any
longer,” said Bisen, an MLA from
Balaghat. The change of stance might
have something to do with the
importance the Congress has attached
to Masani's switch from day one.
Masani had joined the Congress in the
presence of PCC chief Kamal Nath and
campaign committee chief Jyotiraditya
Scindia in Bhopal on Saturday.
What's in a spelling
Using artistic licence, an oft-used
Shakespearean quote might be
changed to, “What's in a spelling... as
long as the pronunciation is the
same”. A Facebook post on
demonetisation by Finance Minister
Arun Jaitley was released verbatim
through a prepared note by the Press
Information Bureau. The only
difference was, instead of
“demonetisation”, the note called the
episode “demonitisation”. The FM
hailed “demonitisation” for increasing
digitalisation, tax collections and the
tax base to give more resources to the
government to spend on the poor and
on infrastructure.
firm to protect its interest. All-out effort
should be made to frame strong opinions
amongtheaffectedcountriessuchasChina,
SouthKoreaandJapanandputpressureon
the US to extend the waiver.
P S Mukhopadhyay Nagpur
Overhaul needed
This refers to the editorial “Be ready for
volatility” (November 8). The persisting
negative sentiments are driving away
investors from the market resulting in a
sizable outflow of capital and finally lead-
ing to a drastic erosion in the market cap-
italisation of the India Inc. The govern-
ment has to look for immediate
resolution of the disturbing factors.
Further, the government and the banking
regulator must function in sync to engage
in the resolution of disturbing issues to
regain the faith of investors.
The government must bestow more
attention to enhancing the earnings of
the farmers. Swift execution of reforms is
needed to boost cash flow in India Inc. All
these would boost investor confidence.
VSK Pillai Vishakham
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone
number
BY MIKE FLANAGAN
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official

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

Volume XXV Number 147 ILLUSTRATION BY BINAY SINHA

There may be some minute difference when it

NEW DELHI | FRIDAY, 9 NOVEMBER 2018 comes to specific issues of religion, but even here,
for an outsider, it will not be easy to separate the left

Another WTO loss from the right or the centre.

For example, look at the most recent expres-
sion of misogyny. It has come with respect to the
India is failing to make a case for its protectionist turn rights of women and temple entry. The Congress

A
president offered this waffle: “My opinion is that
three-member dispute settlement panel at the World Trade women are equal and should be allowed into the
Organization (WTO) has ruled against India in its disagreement temple. But my party unit in Kerala has a different
with Japan over import duties on hot-rolled steel. In the last view. It is an emotional issue with men and women
financial year, Indian imports of steel from Japan and South in Kerala. There’s a difference of opinion with my
Korea were 45 per cent of the total steel imports of 8.4 million tonnes; the party unit on this but I’m going with the party.” He
means he’s not going with the women.
total value of steel imports was $6.5 billion. India has sought to protect the
On the other side, the prime minister fashions
domestic steel industry consistently over the past three years, following a himself as a champion of the rights of Muslim
plea by domestic producers to the government. The official argument giv- women against Muslim men. But if you cannot
en for this action was that Chinese over-capacity was distorting the market. recall what he has said about the issue of
Yet, it is clear that a major impact has also been felt by Japanese, and pre- Sabarimala, it is for a reason. Strategic silence, we
sumably Korean, steelmakers. It is now the case that India has lost its claim might call it.
that its safeguard duties on hot-rolled steel in particular were consistent with There is nothing that is “right” about the
mischief that Hindutva is up to, whether through

Whogainsbyholding
WTO rules. In other words, India failed to substantiate that a sudden and sus-
the ABVP or the Vishwa Hindu Parishad or indeed,
tained increase in imports had significantly harmed domestic producers. the political formation at the Centre. It is an
This means that one of two facts must be true. Either the steel industry was instance of bigotry parading as ideology. It needs
complaining without sufficient reason; or the government has failed to to be “called out”, in the coinage of our times, for
present these arguments convincingly enough in Geneva.

India’s turn towards protectionist trade policy over the past years has not
gone unnoticed at the WTO. In one landmark ruling earlier this year, a WTO
panel ruled that “domestic content requirements” in India’s solar panels
breached trading rules. These requirements were scaled up as part of India’s
effort to indigenise the manufacturing of solar panels amid a scale-up of
renewable energy generation capacity. The decision itself was contested
within the government; the ministry of new and renewable energy argued
that cheaper solar panels were essential to India’s solar mission, while the
backRamGuha?
what it is.
This brings me to the second thing I found inter-
esting about the Guha story. It is the question:
Which is the constituency that is being appeased
when the ruling party is silent about such things (as
it was — there was not a squeak though it was
Either the BJP does not care or else the forces of Hindutva reported internationally and brought great disre-
pute to India)?
can no longer control what they have unleashed I confess I have not been able to crack this one.
Are there actually Indians who are delighted that

Y
department of industrial policy and promotion wanted to push Indian solar ou may have read the news about histori-
panel manufacturing. Two errors were made. First, given that the central fear an Ramachandra Guha a few days ago.
was imports of panels from the People’s Republic of China, with its subsidised His teaching stint next year in
Ahmedabad has been called off after
manufacturing, would skew purchasing choices, other sources of solar pan-
threats from the Akhil Bharatiya Vidyarthi Parishad
els should have been brought on-side. Instead matters were allowed to slide (ABVP). Before setting off I should declare an inter-
with other panel-producing countries till the US filed and won its case. The est here on both sides. Mr Guha is a friend and a
second error was, again, in failing to make the case that the well-known crash couple of years ago the ABVP filed
in solar panel prices was damaging Indian industry. a case against my organisation
A pattern is beginning to be visible when it comes to India at the WTO. for sedition (which the police
A sharp protectionist action is taken; and, subsequently, India fails to back investigated and dropped, hav-
it up at the WTO with suitable arguments. This might well happen next with ing found no evidence).
Anyway, the BBC reported the
its hard stand on agricultural procurement, where it is defending its com-
story under the headline
plex web of minimum support prices at the WTO amid international isola- “Ramachandra Guha: How the
tion and even opprobrium. The government has only two options. Either it right wing hounded out a Gandhi
stops trying to erect barriers that disadvantage Indian consumers in the biographer”.
name of domestic protection. Or it creates sufficient capacity that ensures To me, there are two interest-
it is able to win enough of the disputes that such barriers will cause. A larg- ing aspects of the story. The first REPLY TO ALL
er debate is needed on the nature and orientation of India’s protectionist concerns the term “right wing”
turn, which harms consumer welfare and causes international embarrass- in the BBC headline. What does AAKAR PATEL
the BBC mean by saying that the
ments of this sort.
ABVP is right wing? Does it mean that it is con-
servative in the sense that the West understands
the word “right”? And what is the opposite of that
for balance, when he speaks against extremism
and extremists. And so Mr Guha isn’t “left” by
any stretch of the imagination, but let us return to
the “right”.
As I have written before in this space, if we
examine the issues on which ideology is defined,
it is not easy in India to define right wing. On the
economy, on welfare, on defence
and pretty much on any other
matter which separates a
Democrat from a Republican or
a liberal from a conservative,
India’s main political parties
speak the same language. What
is the difference between a
Chidambaram budget and a
Jaitley one? It is unlikely that 99
per cent of Indians who can read
can go through them and tell
what represents “right” and
what doesn’t. On economics,
there is no left and right, it is
all the same.
Similarly, the National Register of Citizens in
Assam, through which we are in the process of
Mr Guha is not going to teach in Ahmedabad? Who
can they possibly be? Are these people who have
read Mr Guha and think he’s a danger to the repub-
lic? I find this hard to digest. Readers of tomes of
the sort Mr Guha writes are not given to the reduc-
tion which comes so easily to the ABVP and its ilk.
I am not for a moment dismissing the idea that
liberal-bashing is not productive. Of course, it is,
and that is why the two most viewed channels ped-
dling English “news” do it so well. But this is not
about Kashmir or terrorism or one of those things
that liberals can be easily hammered on.
This is about a historian of Gandhi. Who
delights in seeing him hounded out? And what do
the ABVP and the ruling party get from this, and
whom do they enthuse and mobilise on such an
issue? As you have seen, it is the BBC that has
reported it in the most embarrassing terms. Surely
there must be some benefit accruing that sets off
this damage? If there isn’t, and, as I said, I do not see
it, then why does this happen?
I’ve given it some thought and have arrived at
two conclusions. One is that the ruling party and
the prime minister do not care. It’s unimportant if
the ABVP gets up to unauthorised mischief.

Focus on big polluters word “right” in the Indian context? Mr Guha, as

those who have read him and know him will know,
has a deep and frequently expressed dislike of the
left, particularly the communists and the Maoists.
Efforts to clean the air have been largely misdirected
making millions stateless, is the gift to this nation
of Rajiv Gandhi, as was the reopening of the Babri
issue. This is the definition of what the right wing
The other conclusion is that it has gone out of
hand. The forces of Hindutva can no longer control
what they have unleashed. The authority to bully,
does. What else can we think of that can separate harass, violate and manhandle Indians in the name

E
Indeed, it is usual for him to include them, perhaps the left from the right in India? of ideology has devolved to whoever wants it.
ven an abundance of initiatives undertaken to restrain the stub-
bornly high pollution in the National Capital Region (NCR) has

The undoing of doing business in India

failed to produce the desired outcomes. Reason: The initiatives are
largely misdirected. The relatively minor contributors to this men-
ace have received the bulk of the attention even as some of the main culprits
remain unaddressed. For instance, a lot of blame is ascribed to the burning

of paddy stubble in the surrounding states even though it only adds to the
locally generated pollution and that, too, for a short period of around a
month (mid-October to mid-November). But pollution remains high, and
escalates to dangerous levels, even at other times of the year. The consistent
polluters are the industries, transport vehicles, construction activity, fossil
fuel-based power plants and generator sets, brick kilns and the torching of
local waste. Unfortunately, not much is being done on these fronts.
Going by the findings of a recent study by the Delhi-based The Energy and
Resources Institute (Teri), about 30 per cent of the NCR’s pollution is caused
by industrial units, 28 per cent by transport vehicles and 18 per cent by the
dust produced from construction sites, road sweeping and rock crushing.
Though crop residue flaming can account for 30 per cent or more of the pol-
lution during the peak paddy-harvesting season, the overall contribution of
smoke from outside Delhi during most part of the year has been reckoned
by the Teri study at merely 4 per cent. The inflaming of garbage and brick
kilns located in and around Delhi further inflate the atmosphere’s smoke con-
tent, which, in association with humidity, dust and other hanging pollutants,
leads to the formation of health-injurious smog. While, no doubt, crop burn-
ing needs to end, well-judged measures are required to curb other air-viti-
ating factors as well.
An elaborate plan has been formulated to control the NCR’s pollution
through short- and long-term actions. It includes a well-crafted Graded
Response Action Plan (GRAP) to deal with emergencies. However, the imple-
mentation of this plan is tardy. One reason for this could be the multiplici-
ty of laws, authorities and agencies dealing with this issue. Most of these bod-
ies such as the pollution control boards are just paper tigers. None of them
is directly accountable for poor results. Polluting activities such as con-
struction, non-mechanised road sweeping, waste burning, use of diesel
generators, etc. are continuing despite the GRAP being in force. Nearly
52,000 polluting industrial units, which have been asked to shut down,
continue to operate in the residential and other non-conforming areas.
Though the Indraprastha thermal power plant in the heart of Delhi has
been closed, even if temporarily, about a dozen other thermal plants continue
to function within the 300-km radius of the Capital. The emission levels of
most of these do not conform to the standards notified by the environment
ministry in December 2015. These emissions are relatively hazardous as they
contain highly toxic sulphates, nitrates, mercury and secondary particulate
matter. Such blatant violations of pollution control norms need to be
checked. Otherwise, the NCR’s ambient environment will remain unhealthy.
I
f the Bharatiya Janata Party were to lose its
majority even as the principal opposition, the
Indian National Congress, doubles (at the very
least) its Lok Sabha tally in the 2019 general elec-
tion — both scenarios that look terribly likely as of
now — one would have to unhesitatingly look back
at the ill-fated, primarily because it was remark-
ably ill-thought out, announcement of demoneti-
sation of 86 per cent of India’s currency exactly two
years ago. It was a secular disaster in that it did not
distinguish between one Indian and another. But
this only made the move quite regressive because
it hit the poor far more than it hit the rich or indeed
whoever was guilty of hoarding black money. And
for what? The massive exercise
extinguished barely ~110 billion
after demonetising about
~15.5 trillion. The proportion of
fake currency too is equally
embarrassing.
In the final analysis, there’ll
be very few in this country who
would say that the demonetisa-
tion of 2016 left them better off.
By the way, I am one of those rare
beneficiaries since, thanks to the CLAY SQUARE
sudden flood of bank deposits,
interest rates fell and my creditor
UDIT MISRA
knocked off by around three
years from my home loan tenure — that’s 36 EMI
less in one fell swoop. Readers who have paid an
EMI would know my joy knew no bounds. I was
grateful to the government at a personal level but
as someone observing the economy, it was a horror
story unravelling out there.
Over the past two years, it has become increas-
ingly clear that small businesses, often designated
as the medium, small and micro enterprises
(MSMEs) — that reportedly employ most people
after agriculture — have been the worst sufferers of
demonetisation. A survey by the All India
Manufacturers’ Organisation (AIMO) conducted
across 25,000 units, comprising nearly 50 per cent
of micro and small industries and 25 per cent each
of medium and large firms, found a sustained blow
to the bottom line. According to a report in Business
Standard, this survey, which was released on the
second anniversary of demonetisation yesterday,
also found 32 per cent job losses in the MSME sec-
tor, with over 86,000 of the total of 270,000 employ-
ees losing their employment in the aftermath of
demonetisation. The president of the AIMO has
been quoted as saying: “You are either already sick
or are in the process of becoming sick.” Some of
the worst news is coming from the prime minis-
ter’s home state Gujarat, where MSMEs involved
in textiles, diamonds, tiles and sanitaryware are in
severe stress even two years later. In fact, since
demonetisation, the turnover of these industry clus-
ters has either plummeted or, at
best, remained stagnant.
What is most unfortunate, and
rather ironic, is that such MSMEs
continue to trade in cash.
Champalal Bothra of the
Federation of Surat Textile Traders’
Association says that “the govern-
ment’s intention to promote digital
payments through demonetisation
and later though GST has been a
pipe dream.” While digitisation has
struggled at the MSME level, cor-
ruption seems to have survived the
intended reform. Raja M
Shanmugam, president, Tamil Nadu’s Tirupur
Exporters Association, says “corruption is still at peak
levels… [and demonetisation was] negated because
the loopholes were exploited by manipulators”.
This worsening state of doing business in India
actually explains why the central government has
even risked souring relations with the country’s
central bank. Indeed, after failing to get the Reserve
Bank of India to ease up on its prudential norms
and allow banks and non-banking financial com-
panies to lend to these struggling businesses, the
government has now decided to do it all by itself,
promising loans within an hour to all MSMEs. The
essential point is that the government cannot allow
this distress to carry on like it is until the election
season. Not unless it fancies sitting in the opposi-
tion benches.
And yet, just in these two very years, India’s
ranking in World Bank’s Doing Business index has
shot up over 50 rungs. This is not to denigrate
India’s achievement in Doing Business rankings
but to just put it in perspective. These ranking are
based on specific changes in Mumbai and Delhi. It
is, in a very real sense, a misnomer to call them a
ranking for “India”. In reality, they are, at best,
rankings for Delhi or Mumbai. The ease of doing
business could be plummeting through the floor in
the rest of the country — as indeed it has done —
and yet one could end up shooting up in the Doing
Business index.
There is another way to understand what I am
saying. Let me lean on the magical oratory of our
PM. On Thursday, most people revisited PM’s
speech two years ago. Let me go a step further and
reintroduce readers to a speech made exactly three
years ago. On November 6, 2015, the PM inaugu-
rated the Delhi Economic Conclave. It was a heady
time for his government. The economy was fast
benefitting from falling crude oil prices and
improving global growth and, barring the Delhi
debacle, where the Aam Aadmi Party gave the BJP
more than a black eye, Mr Modi was leading one
election victory after another. Before you ask: The
Bihar Assembly results, where the BJP were to get
stunned again, had not yet been declared. In many
respects, it was a crucial speech as it showcased
what many of us admire about Mr Modi: His clari-
ty of thought.
“I would like to raise two issues. The first is:
Reform for what? What is the aim for reform? Is it
just to increase the rate of GDP growth? Or is it to
bring about a transformation in society?… The sec-
ond question is: Reform for whom? Who is our tar-
get audience? Is our aim to impress groups of
experts and score points in intellectual discus-
sions? Is it to achieve ranks in some international
league tables? Again, my answer is clear. Reform is
that which helps all citizens and especially the
poor achieve a better life.”
This explains the true state of doing business in
India and the real reason for it.

Weighing up rationalism riage and offspring falls neither here

time. In it, Dabholkar charts the growth
of the Andhashraddha Nirmoolan
Samiti (ANiS), the organisation he
founded in 1989 to spread his message
throughout Maharashtra (he was a
native of Pune).
BOOK REVIEW Dabholkar’s aim in writing the book
was twofold: One, to enumerate the var-
VIKRAM JOHRI ious ways in which superstition affects
the life of the common man. In this
nor there.
Broadly, Dabholkar’s argument can
be attacked on two planks. One, his
case of Sabarimala brings a measure of
balance to the debate. While the
Supreme Court has directed the shrine
to permit the entry of women, some
Dabholkar’s work and acknowledge its
limitations. Few will deny that
unchecked superstition has been a bane
of Indian society and an enlightened
Two, Dabholkar goes beyond specif- unquestioned belief that science has have questioned if this is really a case of effort to move people away from ortho-
ic instances of superstition to speak the answer to every question. gender discrimination given that doxy is desirable. But it is equally
about rationalism as a way of life. An Rationalism, like theism, is a belief sys- Ayyappan, the God the shrine is dedi- important to not drown an entire edi-
atheist, he writes passionately about the tem and to assume that the faculty of cated to, is a celibate deity. fice, one that fulfils deep human needs,
need for a social revolu- reason can, say, quench It would have been interesting to in our race for egalitarianism.
tion, one that should our thirst for the sublime hear Dabholkar’s views on the matter. Dabholkar’s death, and of other
attack the very idea of God Dabholkar’s death, and is to take a dim and incom- Would he decry women devotees for rationalists, was an unmitigated
if India is to be rid of the of other rationalists, plete view of human needs seeking to pray in the first place, an act tragedy. Not only did it vitiate the
many troubles that afflict was an unmitigated and potential. that is as problematic as superstition in movement against superstition, it also
it. He sees a direct line tragedy. Not only did it Two — and this is more his book, or would be look upon this took away the chance for greater nuance

N
arendra Dabholkar was a
Maharashtra-based doctor and
anti-superstition activist who
achieved national fame when he was
gunned down by unidentified assailants
in 2013. His killing, along with those of
Govind Pansare and MM Kalburgi,
alerted authorities to the grave threat
faced by rationalists, an umbrella term
for those working to promote a spirit of
scientific inquiry.
The book under review was written
by Dabholkar in Marathi and is available
in an English translation for the first
regard, the book is chock-full of exam-
ples of superstitious behaviour that
ANiS activists uncovered as well as the
actions they took to get people to see
their viewpoint.
A lot of the examples Dabholkar
quotes are instantly recognisable.
Bhanamati (black magic) and buvabaji
(playing God) are common occurrences
in our land. ANiS activists challenged
such practitioners to open debate, or if
that were not possible, to perform their
miracles before them. Little wonder
these charlatans were exposed.
between belief in God and vitiate the movement pertinent — Dabholkar’s as a gender fight worth lending his in a debate that is too often hijacked by
the string of superstitions against superstition, it tendency to paint all ritu- voice to? extreme voices. While his murderers
that holds back Indians. also took away the als as emerging from a Neither position is free of contradic- effected a sickening termination to the
While Dabholkar’s chance for greater reactionary ignorance. He tion for a rationalist. If he were to stand argument, The Case for Reason reiter-
advocacy in the first nuance in a debate that cites the case of Shani up for the right of a woman to pray ates that, intellectually, neither
instance is laudable, his is too often hijacked by Shingnapur, the before a celibate God, he would be effec- Dabholkar nor they were entirely right.
broader argument fails to extreme voices Ahmednagar shrine that tively arguing that God, or a God, is an
convince. He presents restricted entry of women entity whose nature can be in conflict
gullibility — a despicable trait in his to the sanctum sanctorum until a with the demands of His devotees, and
THE CASE FOR REASON
Understanding the Anti-Superstition
view — as a direct consequence of Bombay High Court order overturned that it is up to modernists and rational-
Indians’ fatalism, which in turn, stems the practice in 2016. ists to choose one over the other. But Movement
from their religious views. His acknowl- While the restriction in that case was that would go against the rationalist’s Narendra Dabholkar (Translated by Suman Oak)
edgement that people are superstitious based on nebulous notions of “energy” creed of a non-existent God. Westland
about major life events like career, mar- at the site of the temple, the current It is thus possible to both appreciate 298 pages; ~699
https://t.me/pdf4exams
10 PERSONAL FINANCE
>
Commercial property is costlier,
but delivers better returns
Investors can earn a steady 7-9 per cent
rental yield in this segment, compared to
only 2-3 per cent in residential
SANJAY KUMAR SINGH
W
ith the residential segment
of the property market lan-
guishing, many high net
worth individuals (HNIs) are now
making a beeline for commercial
buildings that have the potential to
offer them steady rental returns
along with reasonable capital appre-
ciation. By opting for completed and
leased buildings, these savvy
investors are avoiding development
risk - the risk of delay in delivery -
that has marred returns in the resi-
dential segment.
Robust demand: While the resi-
dential space has languished,
demand for office space has been
strong during the past four years.
This year, about 33 million square
feet of grade-A space has already
been leased between January and
September across the country’s top
eight cities. This is a rise of 15 per
cent over the corresponding period
last year, according to Cushman &
Wakefield India. “Office space take-
up is being driven by growth in out-
sourcing (IT-ITeS) and services sec-
tor. India also has a fast-growing
financial and banking services sector.
It is also a key startup hub. New tech
firms, and upcoming sectors such as
e-commerce and co-working, have
contributed to growth in office space
demand,” says Anshul Jain, country
head and managing director,
Cushman & Wakefield India.
Demand has consistently out-
paced supply in the recent past.
“Today, any supply that comes into
the market is leased out before com-
pletion or gets lapped up within a
couple of months of completion,
especially if it is a high-quality devel-
opment from a reputed developer,”
Beforegettingadventurous,buycover
Insurersonlycoveradventuresportsifundertakenasahobby,notinaprofessionalcapacity
PRIYADARSHINI MAJI
Adventure sports such as bungee
jumping, skydiving, mountaineer-
ing, hang gliding, scuba diving,
trekking and parasailing are becom-
ing increasingly popular among
vacationers. And many plan holi-
days with the sole purpose of expe-
riencing such extreme sports.
However, such
sports can also lead to
injuries and hospitali-
sation. Explains
YOUR MONEY
Bhaskar Nerurkar,
head, health adminis-
tration team, Bajaj
Allianz General
Insurance: “Adventure
sports are perceived to
have a higher level of
inherent danger. These
activities often involve speed,
height, a high level of physical exer-
tion and highly specialised gear.”
The usual travel policies do not pro-
vide any cover for these. In fact,
even personal accident plans do not
cover these sports.
MUTUAL FUNDS
Readers’ Corner
ASHWANI BHATIA
I plan to enrol for a systematic
investment plan (SIP). I have
heard that some online players
offer a top-up facility at the
time of signing up. As I would
want to invest more than the
SIP amount in some months
when I have the money, I liked
that top-up option. I want to
know if fund houses also offer
any such option.
Fund houses do offer a SIP top-up
facility, which allows investors to
increase the SIP by a fixed
amount at pre-defined intervals.
Investors need to choose the
option at the time of enrolment.
The top-up details cannot be
modified later.
What’s the difference between
the following debt funds: Low
duration, ultra-short duration,
liquid, money market and
overnight. If I am planning to
says Abhinav Joshi, head of research,
CBRE India.
Many corporates are currently
reviewing their real estate strategies.
“They are relocating and consolidat-
ing and taking up larger spaces to
hedge against increases in rentals in
the future, due to which this segment
has seen significant price apprecia-
tion,” says Arpit Mehrotra, senior
director, office services (Bengaluru
& Hyderabad), Colliers International
India.
More attractive than
residential: Investors who entered
the residential segment in 2013-14
have seen negligible capital appreci-
ation, while older investors have even
suffered some capital erosion.
“Project delays, especially in areas
like the National Capital Region
(NCR), have affected the returns that
investors expected to earn from the
residential sector,” says Joshi. For
those wanting a regular income, the
residential sector is not attractive as
yields are low at 2-3 per cent. On the
other hand, by investing in a pre-
leased office property, investors can
expect to earn a rental yield of 6.5-8
per cent, besides some capital appre-
ciation, according to Jain.
A commercial property is also
more desirable from the perspective
of longevity of the asset, as construc-
tion quality and maintenance are
both better in these buildings. On the
flip side, however, ticket sizes tend to
be much bigger.
Check the builder’s track record:
Before betting on a developer, the
investor must check out how many
buildings he has delivered in the
past, and whether he delivered
them on time. If he failed to do so,
he should have paid a fine. Joshi
Things are changing now.
Companies like Bajaj Allianz
General Insurance, HDFC Ergo,
Bharti Axa General Insurance and
GoDigit cover adventure sports as
an inbuilt feature. Be it in the form
of a specific adventure sports policy
or as an add-on to the base policy,
these insurance companies have
introduced policies that provide
cover for such activi-
ties.
Under the adven-
ture sports cover,
insurers usually pay
for treatment charges
incurred due to an
accident during par-
ticipation in adven-
ture sports. The
adventure sports add-
on from Bajaj Allianz
is a lump sum benefit policy cov-
ering up to ~10 million in case of
death, or any permanent disability
that may occur while taking part
in the sports. However, claims for
all adventure sports will only be
payable if the activity is performed
invest for a period of 15 days to
three months, which is the best
option among these funds?
The duration of the instruments
that these funds invest in is the
fundamental difference between
the categories mentioned above.
Overnight funds invest in securi-
ties maturing in a day, while liq-
uid funds invest in securities with
a maturity of up to 91 days.
Further, the remaining funds can
be differentiated based on the
duration of the portfolio. For
ultra-short-duration funds, the
duration is between three
months to six months, whereas
for low-duration funds it is
between six to 12 months. For
money market funds, invest-
ments are made in instruments
having maturity up to one year.
You can look at investing in any
of the above funds based on your
investment horizon. You may
consider liquid funds, for exam-
ple, if you are investing for 15
days. As interest rate cycle sta-
bilises and rates start to come
down, longer duration funds are
expected to do better.
What’s the difference between
large- and mid-cap and multi-
cap funds?
Post Securities and Exchange
Board of India's re-categorisation
of funds, large- and mid-cap
PRICE RANGE FOR COMMERCIAL
PROPERTY IN LEADING CITIES
City Location
NCR Gurgaon
NCR Noida
Mumbai BKC
Mumbai Andheri-Kurla Road
Bangalore Outer Ring Road
Bangalore Peripheral East
Chennai Suburban South (pre Toll OMR)
Chennai Peripheral South (Post Toll OMR)
Pune SBD East
Pune SBD West
Hyderabad Madhapur
Hyderabad Gachibowli
Kolkata CBD
Kolkata Salt Lake
Source: Cushman & Wakefield Research
suggests that an investor who is
buying a pre-leased building should
also check the quality of the tenants
in it – whether they are top Indian
corporates and multinationals.
“What is the size of the floor plate?
How energy efficient is the building?
What is the quality of the generator
set and air-conditioning system that
the developer has installed?
Developers try to cut corners in these
PREMIUM FOR ADVENTURE
SPORTS INSURANCE
Age-31, sum insured ~1 million
Insurance company Premium (~)
HDFCERGO 1,049
BhartiAxa General Insurance 1,942
BajajAllianz General Insurance 1,300
Source: PolicyX.com
under the supervision of trained
professionals, and if the insured
had followed necessary safety
measures and guidelines laid down
by the instructors. Says Adarsh
Agarwal, appointed actuary, Digit
General Insurance: “Under adven-
ture sports cover, an accident sus-
tained during the policy period
when the policyholder is engaged
in adventure sports in a non-pro-
fessional way or as a hobby and
under the supervision of a trained
funds and multi-cap funds are
defined as two separate cate-
gories. While large- and mid-cap
funds are mandated to invest a
minimum of 35 per cent each in
large-cap and mid-cap stocks,
multi-cap funds have no restric-
tion on investment in a specific
market-cap band. They can
invest across market capitalisa-
tion with minimum equity expo-
sure of 65 per cent.
Why is it that most equity funds
have fared worse than Sensex
for the past one year?
So far in 2018, there has been a
sharp divergence in perform-
ance across the market capital-
isation curve. The S&P BSE
Small-Cap index, for example,
is down 28 per cent when com-
pared to S&P BSE Sensex. Only
two-three stocks have con-
tributed substantially to the
index returns. The market
movement has been concen-
trated. Equity mutual fund
portfolios are diversified, and
the impact of this concentrated
rally in only a few stocks has
led to the funds underperform-
ing the broader market in the
short term. These anomalies,
however, will not sustain in the
long term and mostly, funds
tend to outperform their bench-
mark indices in the long run.
https://www.estore33.com/
Area (~/sq ft)
8,000-25,000
6,500-20,000
34,000-38,000
15,000-18,000
7,000-12,000
5,000-6,500
7,500-8,500
5,000-6,500
9,500-12,000
12,000-15,000
9,000-11,000
7,500-9,000
15,000-20,000
5,000-5,500
matters,” says Mehrotra.
Location is crucial: An office build-
ing should preferably be located in a
key office hub that is witnessing
robust leasing activity. “Check the
rental appreciation that has hap-
pened in the area in the recent past,”
says Joshi. The area should enjoy
easy accessibility and should be well
provided with public transportation.
professional is covered.”
The premium for these covers,
which come under travel insurance,
varies depending on the plan opted
for by the insured, sum insured and
the number of days of travel. The
add-on plan is linked to the base
cover, and you can opt for 25 -100
per cent payout of the sum insured.
For a ~10 million sum insured from
Bajaj Allianz, where the base cover
is for death and permanent disabil-
ity, you will have to give an extra
I had given Aadhaar for KYC
(know your customer). With the
new Supreme Court ruling on
Aadhaar, will the mutual fund
house let me continue or make
my folio dormant until I
furnish alternative documents?
Yes, your current investment will
continue to remain active, and
you can transact in your existing
folio. In case of any further notice
from the regulator, investors will
be informed about the addition-
al requirement, if any.
I am a US citizen now. When I
was an Indian citizen, I had
mutual fund investments. I had
not yet complied with the
Foreign Account Tax
Compliance Act (FATCA)
norms. I want to know what
happens to my investments.
Your prior investments will
not be impacted because of
change in citizenship or residen-
tial status. The investments
will keep growing in line with the
market. However, you will not
be able to initiate any further
transactions in the fund until
you adhere to FATCA
compliance.
The writr is MD & CEO, SBI Mutual
Fund. The views expressed are the
expert’s own. Send your queries to
yourmoney@bsmail.in
https://t.me/TheHindu_Zone_official
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 1
Do nothing –
just pay fees
The current fall in the markets
has been a godsend for profes-
sional investment advisers.
Let me give you the many rea-
PROS AND CONS OF
sons why. As required, we
always assess the risk-taking
INVESTING AT DIFFERENT ability of our clients and docu-
STAGES
ment our findings. We also ask
our clients to fill up a risk-pro-
| An investor who buys at the filing questionnaire.
Sometimes, the risk profile
under-construction stage will thrown up is lower or higher
enjoy higher capital FRANKLY
than what we have assessed,
appreciation once the
building gets completed
SPEAKING based on our interactions. In
such cases, we almost always
| However, such an investor also HARSH ROONGTA follow our personal assess-
ment (rather than the statistical
faces the risk of delays in risk profile thrown up by the questionnaire), after properly
completion documenting the variance.
| Buying at the second stage – a Here’s an example. I had assessed this middle-class
completed building that is not retired client as a low-risk taker. But he was urging me to
leased out – helps to avoid invest his monies in pure equity funds, as he did not require
development risk
the money for the next 8-10 years at least. He claimed he
was well aware of the risks of investing in equity and was
| However, there is lower capital capable of bearing it. He already had a substantial equity
appreciation portfolio that he had built up over the years. I was reluctant
to invest more in equity and suggested long-term gilt funds
| The key risk at the second stage instead as interest rates were expected to fall in the coming
is delay in finding quality quarters and gilt did not carry any credit risk. I had hoped
tenants the interest rate movements would benefit him. Even the
| The safest bet is to invest in a mutual fund house described the scheme as moderately
low risk. I told him that these invest-
building that is ready and
ments could give him a fixed deposit It’s better to sit
leased out as cash flows begin plus/minus 2-3 per cent return, but out when
from day one his post-tax return would be good markets turn
| But a pre-leased building since he needed the money only after volatile rather
comes with tenant-related many years. than rush to
I also warned him that if interest withdraw your
restrictions
rates move higher, he could see a investments
| The contracts have been temporary drop in the value of his
signed with the tenants and investments. But it would recover over time. Initially, things
the investor can't change went right. Interest rates dropped by around 0.25 per cent in
the first few months. The value of his investment improved,
them until a tenant’s lease
expires and the annual internal rate of returns was almost double
digit. However, after nine months when the interest rate
became a little higher, the annualised return dropped to five
per cent. He withdrew his entire amount even though he
What to avoid: Experts suggest that did not need it. It was a lesson to me to never again distrust
investors should avoid strata invest- my risk analysis skill and to work harder to manage the
ing. This refers to a small share along expectation of clients.
with a large number of investors on We human beings are so attuned to problem-solving
one floor of a commercial building. that we don’t realise that some problems are solved by not
“Such buildings have struggled to doing anything at all. But the itch to do something is quite
attract tenants in recent times,” says intense. So, when another person recently called me to seek
Jain. He also suggests avoiding poor- advice on falling returns of his New Pension Scheme invest-
ly-maintained buildings. Investors ments, my advice was – do nothing. I understand that they
should also steer clear of projects that would feel more than a little dissatisfied if a top doctor
promise a guaranteed return. charges them a fee and tells them to take hot soup and wrap
themselves warmly. But the advice remains sound.
Investment advisors should be like that doctor. Do our
homework well, and tell clients to stick to the plan.
~8,000 for an adventure sports
death with 50 per cent payout. The writer is a Sebi-registered investment advisor
In addition to accidental benefits
arising out of adventure sports,
travel policy also covers other
travel exigencies for instance trip
delay, loss of baggage, loss of
passport. TIPPING POINT
As an alternative, if you are trav- What is the message in the latest
elling abroad, opt for covers from
global insurers, which are much SPIVA scorecard?
The latest S&P Indices Versus Active (SPIVA) India
extensive. Globally, these covers are
available either as a standalone plan Scorecard is out. It shows that actively managed funds
or as a part of your travel insurance. in most of the key categories underperformed their
The pricing of these covers varies indices over the one-year period ending June 30, 2018.
by the activity you choose. For This is not surprising, given that the markets turned
instance, buying a policy from a UK- from being strongly bullish in 2017 to completely bearish
based insurer with £50,000 sum in 2018. Sebi’s reclassification exercise also meant they
assured for skydiving will cost you had to make large changes to their portfolios. The mes-
roughly £65. This plan includes
death and permanent disability
sage in the numbers below is that only when you hold
equity funds for five years or more do they have an
(£50,000), medical expenses even, around 50 per cent, chance of beating the index.
(£100,000) personal liability
(£5,000,000) and much more.
According to experts, people Funds (%) that underperformed their indices
travelling to destinations such as YEAR (%)
New Zealand and Thailand where FUND CATEGORY COMPARISON INDEX 1 3 5 10
activities like scuba diving, cliff div- Indian Equity
ing, and parasailing are very com- Large-Cap S&P BSE 100 87.88 78.35 48.08 62.77
mon should opt for such policies.
Adventure sports have also become
Indian ELSS S&P BSE 200 83.72 61.54 27.78 43.33
a bigger trend for senior citizens. Indian Equity S&P BSE 400
People above 60 years who have Mid-/Small-Cap MidSmallCap Index 62.22 78.26 53.03 50.67
retired and now want to explore the Source: S&P Dow Jones Indices LLC, Morningstar,
world should also opt for these and Association of Mutual Funds in India. Data as of June 30, 2018.
kinds of travel insurance policies.
BUDGET: ~20 MILLION - 25 MILLION
Realty check
Business Standard bringsyou a snapshotofaveragecurrentrates and unit sizes in localities
that offer propertyin the pricerange of ~20 million-~25 million. Ifyou are looking at buying
real estate, an idea aboutprevailingrateswould come in handy
Avg price (~/sq ft) Avg unit size (sq ft) Avg price (~/sq ft) Avg unit size (sq ft)
BENGALURU Gachibowli 6,750 3,423
Haralur Road 7,481 2,796 Hitech City 7,200 3,012
Koramangala 11,696 1,921 MUMBAI
Nagavara 8,400 2,625 Mulund(W) 15,417 1,478
Padmanabha Nagar 9,250 2,225
Andheri(E) 16,752 1,320
White Field 6,979 3,266 Jogeshwari(W) 15,423 1,469
CHENNAI Powai 18,857 1,286
Egmore 16,000 1,465 Chembur 17,241 1,276
Muttukadu 5,637 3,939
NEW DELHI
Thiruvanmiyur (OMR) 12,500 1,735 Kishan Ganj 12,500 1,612
Saidapet 12,500 1,807
NOIDA
Thirumangalam 13,750 1,525
Sector 128 (Expressway 9,029 2,702
GURUGRAM
Sector 78 (Central Noida) 7,500 2,785
Sector 106 (Dwarka Exp.way) 7,906 2,872 Sector 98 (Expressway 10,100 2,100
Sector 104 (Dwarka Exp.way) 7,000 3,150 Sector 108 (Expressway 6,895 3,200
Sector 81 (New Gurugram) 5,695 4,140
PUNE
Sector 109 (Dwarka Exp.way) 6,750 3,150
Baner 8,339 2,514
HYDERABAD Gultekdi 11,500 1,937
Kondapur 6,352 3,806 Bibwewadi 6,711 3,328
Manikonda 5,300 3,809 Senapati Bapat Road 13,648 1,575
Tolichowki 5,500 4,202 Viman Nagar 8,772 2,387
Note
·Ticket price range considered for the above data points is between ~20 milion and ~25 million
· All the data points discussed in the above table refer to primary market only
· Above residential data set comprises of residential apartments only
· Above residential data is representative of organised real estate developers only
· The top performing micromarkets based on sales during last year Sep-2017 to Aug-2018 is represented on the above table
· Data points are updated till Aug-2018 Source: PropEquity
https://t.me/pdf4exams
.
NEW DELHI | FRIDAY, 9 NOVEMBER 2018
T E NARASIMHAN
Chennai, 8 November
T
he new container terminal at the
Kamarajar Port that became opera-
tional in October has come as a relief
both for traders and shipping lines
alike. Within a span of 30km, they now have
three ports —Chennai, Ennore and Kattupali
—and four container terminals to choose from,
which compete with one another for traffic.
This is a sea change from the time when ship-
ping lines had to jostle for berthing slots at
Chennai and spend two to three days anchored in
the sea if they missed their allotted slot. The con-
gestion not only increased their turnaround time,
but also inflated their charter rates.
The terminal and the Kattupali port are being
developed by Ahmedabad-based infrastructure
conglomerate Adani Group. Katupalli was
acquired by Adani from Larsen &Toubro earlier
this year for ~19.5 billion. An additional invest-
ment of ~500 billion has now been envisaged to
develop and expand its handling capacity to
259 million tonnes from the existing 24.65 mil-
lion tonnes. To this end, a revised master plan
has been submitted to the government.
Beyond easing traffic at the Chennai Port,
Ennarasu Karunesan, CEO for southern ports,
Adani Ports & Special Economic Zone, says,
Kattupali is being designed to handle everything
from bulk cargo to containers under one roof.
“The key would be efficiency backed by tech-
nology, congestion free flow of traffic and
enough backyard space for trade,” he says. “Even
if the ships come late, they can berth, unlike at
other ports.”
The container terminal is already proving to
be a viable alternative to Chennai. Late last
month, the world’s largest shipping line
Maersk’s container vessel Leonidio berthed at
the Adani Ennore Container Terminal inside
the Kamarajar Port in Ennore . It marks a shift in
operations to Ennore from Chennai where its
container ships have been calling since 2003.
“Ennore has the potential to be the new gate-
way of South India, and we are geared to support
our local customers to move their cargo to and
Adani’s port
projects catch
a tailwind
As Chennai grapples with congestion, the promise of
quick turnaround at the recently opened container
terminal at Ennore is drawing the attention of
large shipping lines
from markets around the world. In addition to
no commodity restrictions at Ennore, Maersk
can provide seamless end-to-end solutions from
here,” says Steve Felder, managing director for
South Asia, Maersk.
“As global trade increases, so does the con-
gestion at existing ports. There comes a point
when moving to a new port becomes
inevitable, which is why we are shifting oper-
ations from Chennai to Ennore,” a Maersk
spokesperson adds.
With its shorter turnaround time by one to
two days and tie-ups with inland container
depots, ports and feeder operators, Ennore
could give a tough fight to Chennai.
Over the next few months, industry repre-
sentatives expect more volumes may switch
over to Adani’s ports. Over 60 per cent of the
container freight stations in the Chennai cluster
are in close proximity to Ennore and Kattupalli,
and that makes shifting to the new ports easier.
The ports are part of Adani’s cluster-based
approach towards India’s maritime transport.
With four ports (including one container termi-
https://www.estore33.com/
nal) on the west coast and
four ports (including one
container terminal) on the PORT
east coast, the group now
has 10 strategically-located PORTFOLIO
ports along the Indian coast- Total ports
line. This, especially on the 10
east coast, would lead to
improvement in efficiency Global trading capacity India as an alternative to Colombo, or
and cost savings for trade in 380 MMT
the longer run, say industry
representatives. All India cargo share
“Capacity shortage at 15 %
Chennai and the fact that
the Krishnapattinam Port All India container
may take time to lure large share
vessel operators, Ennore 33 %
and Kattupalli have the
opportunity to wean away
volume from Chennai,” says G Raghushankar,
chairman-logistics committee, South India
Chamber of Commerce and Industry.
Industry expects the new ports to intensify
competition, increase efficiency, and reduce
transportation costs once the operators have
recovered their initial investment. This is crucial
to reducing the logistical gaps with China if
India is to become an export hub.
R Shankar, CEO, TVS Logistics, expects sup-
ply chain costs, including that of inventory, to
come down once the ports become fully oper-
ational. De-bottlenecking the existing ports
will increase the throughput time for manu-
facturers and boost their overall export and
import capacity.
Although manufacturers are yet to derive
any direct cost benefit by trading via Kattupalli
or Ennore terminals, there are indirect savings
in terms of shorter turnaround time.
Raghushankar says scaling down handling
tariff should be easier for private ports as they
are not under any regulator. “While undoubt-
edly efficiency and effectiveness are important
considerations, costs, too, have a major
impact in Exim trade,” he says.
The Adani group’s foray into
South India started in 2016
with the acquisition of
Katupalli, near Chennai,
and the award of deepwater
container terminal project
at Vizhinjam in Kerala.
Karan Adani, CEO, Adani Ports,
believes the terminal will mark a new
chapter in trade for Tamil Nadu. His proj-
ects also sit well with his plan to develop
Singapore as a trading hub. Currently,
due to limited depth and handling facili-
ties at Indian ports, bulk of India’s cargo
is routed via Singapore or Colombo,
adding time and expense.
J Krishnan, former chairman for the
committee on logistics at the Madras
Chamber of Commerce and Industry and
former Trustee of Chennai Port Trust, says,
“The port terminal operations are not
standalone businesses and can be a serious long
term player in the global trading network.”
Vizhinjam in Kerala, once operational, will com-
pete directly with Colombo, Singapore and
Salalah as a transshipment hub, he adds.
https://t.me/TheHindu_Zone_official
TAKE TWO 11 <
Netflixturnsto
AsiawithPacific
Rimanime,new
originals
BLOOMBERG
8 November
NetflixbroughtitscheckbooktoAsia.The
streaming company announced a slate of 17
new Asian original series during an event in
Singapore on Thursday, part of a pipeline of
more than 100 projects being produced in the
region. The new shows will include nine Indian
programs, its first Thai original and the
company’s first Mandarin-language series.
Netflix has much riding on the success of
those titles in the region, home to more than
half of the world’s people. While Netflix boasts
more than 130 million customers, the vast
majority of them live in the US, Latin America
and Europe.
Though Netflix doesn’t break out
subscribers by region outside the US,
researcher Media Partners Asia estimates the
service has yet to surpass two million
customers in any Asian market. The company
acknowledged it has a long way to go.
“When you think about the entire world,
we’re still quite small,’’ Chief Executive Officer
Reed Hastings said. Hastings, who co-founded
the company 21 years ago, kicked off a two-day
press event in Singapore with a brief synopsis of
the history of entertainment, as he has done at
many events in recent years.
The new titles include a series that is a
prequel to Baahubali, the highest-grossing
franchise in Indian history, and will involve S.S.
Rajamouli, who directed the films. The
company is also making an anime version of
the popular Pacific Rim monster movies, and
bringing in Taiwanese stars Eugenie Liu and
Jasper Liu to appear in Netflix’s first Chinese-
language series, Triad Princess.
The Asia production boom follows a familiar
pattern for Netflix, which spends more cash
than it generates by plowing its growing sales
into new programming. The company plans to
spend $8 billion on content this year — and
more in the years to come — to build its online
video library, though it’s unclear how much of
the budget will go to Asia.
Investors have accepted the company’s cash
burn because of their confidence in its ability to
sign up as many as 400 million customers
worldwide. Netflix shares have climbed more
than 70 per cent this year, boosting its market
capitalisation past $140 billion and
approaching levels that would rival
entertainment giant Walt Disney. Yet investors
are bound to be disappointed unless the
company has a strong showing in Asia, which is
littered with Netflix-like companies already
offering vast trove of shows in local languages.
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
12 BRAND WORLD
>
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 1

Nokia tunes in to
ket leader at present.
However it is not going to be
an easy run, given the near
complete domination that

the millennial pitch

the Chinese brands now have
in the country.
According to IDC
India’s (International Data
Corporation) Quarterly Mobile
Phone Tracker published on
TheFinnishbrandfollowsinthefootstepsofChinese August 2018, Xiaomi leads the
smartphone market with 29.7
rivalsasittrainsitsattentionontheyoungconsumer per cent market share as com-
pared to 17.2 per cent market
share during same period last
year. The brand reported a
107.6 per cent growth.
Samsung was in the second
position with 23.9 per cent
market share during the quar-
ter (as against 23.6 per cent in
the same quarter last year),
followed by Vivo with 12.6 per
cent (12.8 per cent).
According to IDC, smart-
phone companies shipped a
total of 33.5 million units to
India during the second quar-
ter of the year, resulting in a 20
per cent year-over-year (YoY)
growth. This is the result of a
slew of online exclusive
launches and strong ship-
The company has signed Alia Bhatt as brand ambassador and is planning to set up a community ments by offline heavy ven-
for fans in the country, similar to what rival brand Xiaomi has done with its Mi club dors on the back of high deci-
bel promotional
T E NARASIMHAN global Mi community spans Nokia in “Brand Nokia stands activities and
Mumbai, 8 November 14 countries and has nearly 3.5 India has decid- for reliability, trust channel schemes.
million users. ed to focus on and quality, and it has “The market is

A
year after its re-entry It will be some time before both offline and an emotional aspect seeing rapid con-
into the Indian market, the brand gets a clear answer online retail as to it. It has its own solidation at the
the Finnish brand is on the strategy it has now in many mar- character and top end, as the top
learning to play by the rule- adopted, but brand expert kets people still identity, which many 5 vendors made
book of its Chinese rivals. Harish Bijoor believes that prefer to touch of our competitors up 79 per cent of
Much like what competing there is still enough recogni- and feel their lack at this stage of the smartphone
brands such as Xiaomi, One tion and recall that Nokia can brands. E-com- their evolution. We market in 2Q18,
Plus, Oppo and others have leverage in the Indian market. merce is impor- will leverage it to the marginalizing
done, the brand has built its “It has had a very positive run tant, but in the fullest but at the same smaller brands”
association with Bollywood in India in the past. At one recent times, time, products must says Upasana
and cricket is now looking to point of time it had around Mehta says that keep the brand Joshi, associate
set up its own consumer com- 65.8 per cent market share. the online promise” research manag-
munity. But in doing that, When we talk Nokia today, it is channels have AJEY MEHTA er, Client Devices,
does Nokia that once enjoyed a new dispensation, new own- slowed slowed Vice president & country IDC India.
a near cult status in the Indian ership and brand ethos,” he down and cur- head, HMD Global India Times have
market, run the risk of turning said, implying that the brand rently con- changed and so
into a copycat brand? would be looking at a new way tribute to around 38-40 per have consumer expectations
Nokia has just signed Alia to pitch itself in its old market, cent of sales. from their mobile brands. So
Bhatt as brand endorser and is given that the consumer base “Brand Nokia stands for Mehta says that the message
already associated with the was no longer the same. reliability, trust and quality, going out from Nokia this
popular Indian Premier and it has an emotional aspect Diwali is that the brand is
League (IPL) team, the Kolkata A new avatar to it. It has its own character well suited for all that a
Knight Riders (KKR). The future is a combination and identity, which many of young user would want to use
According to Ajey of brand, product our competitors lack at this it for. He adds that the insight
Mehta, vice presi- “When we talk and channel pres- stage of their evolution. We that drove the current Diwali
dent and country Nokia today, ence, the compa- will leverage it to the fullest campaign is that the young
head with HMD it is a new ny said. The but at the same time, products are an integral part of the fes-
Global India, the dispensation, new brand's strategy, must keep the brand prom- tival as they are relied upon
actor connects ownership and while building vis- ise,” said Mehta. by their loved ones “for so
strongly with brand ethos” ibility and mass many things that they do
today's generation HARISH BIJOOR appeal, would be The big challenge with just a few clicks on their
of Indians who are CEO, Bijoor Consults to expand its port- To beat its rivals Nokia has phones–from paying a bill to
multi-dimension- folio so that it is done what most Chinese capturing memories.”
al, multi-faceted and multi- present across price points. brands did soon after they Bijoor says that the biggest
achievers. A similar connec- Nokia is also working to deep- entered the Indian market. strength of Nokia is its brand
tion was sought to be en channel presence, both Tied up with a well-known equity, which it still maintains
established with the associa- offline and online. It has Bollywood actor as endorser, reasonably well in the Indian
tion with KKR, he added. around 550 exclusive distrib- associated with cricket and context. “Old brands can be
Now, the company says, utors selling the products established fan engagement milked profitably even with-
the next step will be building a through over 110,000 stores initiatives. By going down the out advertisements,” he adds,
fan community and creating across the country, the com- same road, Nokia expects to implying that even if the new
fan engagement through pany said. Nokia's smart- win over the new and young owners of the brand do not
meets and events. This is in phone range starts from consumer. have the resources to adver-
line with what Xiaomi has ~4,999 and goes up to HMD is modelling the tise heavily in the market
done with its Mi community. ~30,000, while the feature brand’s journey around that today, they can gain from its
As of 2017, Xiaomi said that its phone starts from ~999. of Xiaomi, which is the mar- past associations.

> THE BS CROSSWORD # 3189

filthy (5) the clock, and with a straight
15 Took a breath, as robber finally face (9)
departed (9) 8 Bound in faith (7)
17 So-so kitsch-sounding 14 Dreadfully sectarian sort
game (9) of logic (9)
19 Ridiculed a conductor,
16 For pasting in odd pictures (9)
we hear (5)
21 Coming down to earth, 17 Fly high oddly with friend
but never rising to the attempt around in umbrella ? (7)
(2-5) 18 Electric chair presents a difficult
23 All those smile keeping position (3,4)
members together ? (3,4) 19 Explosive device used by tailless
25 Disgusting filth now, but used renegade, perhaps (7)
to be miles worse (5) 20 Be discouraging about me being
26 Quite a distinctive feature ? (9) a goddess (7)
27 Medicine was our connection, 22 Calls for lemon and mustard,
we hear (7) losing zero weight (5)
28 Some dispel termites with
24 What pilot may do, about to be
impure zinc (7)
trapped by European MiG? (5)

DOWN SOLUTION TO #3188

ACROSS
1 By which one may be a little
carried away? (7)
5 Transport that is on the road is
the most active (7)
9 Sixth anniversary of an
affair? (9)
10 Victory of endless truism,
perhaps, shows excellent
tastes ! (5)
11 Crystallised preserve came to
an end (7)
12 Her kiss may lead to cries of
alarm (7)
13 Cruel, perhaps, and often
1 Evita, for example, making false
claim about American (7)
2 Ex-president with nothing on?
(5)
3 Bound to be against
punishment (7)
4 You don't know who you'll meet
on one (5,4)
5 In exchange, they can't bear
papal directives (5)
6 Cutter that is more rigorous (7)
7 A bird's home inside ahead of

> BS SUDOKU # 2612 Easy: > WEATHER TODAY’S FORECAST

Solution tomorrow Max/min temperatures in C
O

HOW TO PLAY NATIONAL

Fill in the grid so that every
row, every column and
every 3x3 box contains the
digits 1 to 9
SOLUTION TO #2611
Ahmedabad . . . . . . . . . . . . . . . . .Sunny 36/18
Aizawl . . . . . . . . . . . . . . . . . . . . . . . .Sunny 24/12
Bengaluru . . . . . . . . . . . . . . . . . . .Sunny 31/17
Bhopal . . . . . . . . . . . . . . . . . . . . . . .Sunny 31/15
Bhubaneswar . . . . . . .Mostly sunny 31/21
Chandigarh . . . . . . . . . .Mostly sunny 27/14
Chennai . . . . . . . . . . . . . .Partly cloudy 31/25
Delhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fog 28/14
Guwahati . . . . . . . . . . . . . . . . . . . .Sunny 29/17
Hyderabad . . . . . . . . . . . . . . . . . . .Sunny 34/18
Imphal . . . . . . . . . . . . . . . . . . . . . . .Sunny 26/13
Indore . . . . . . . . . . . . . . . . . . . . . . . .Sunny 32/16
Kochi . . . . . . . . . . . . . . . .Thunderstorm 32/23
Kolkata . . . . . . . . . . . . . . . . . . . . . . .Sunny 31/19
Lucknow . . . . . . . . . . . . . . . . . . . . .Sunny 28/15
Mangalore . . . . . . . . . . . . . . . . . . .Sunny 33/23
Mumbai . . . . . . . . . . . . . . . . . . . . . .Sunny 36/26
Pune . . . . . . . . . . . . . . . . . . . . . . . . . .Sunny 34/21
Srinagar . . . . . . . . . . . . . .Partly cloudy 17/07
Surat . . . . . . . . . . . . . . . . . . . . . . . . . .Sunny 37/22
Thiru’puram ..........Thunderstorm 28/24
https://t.me/pdf4exams https://www.estore33.com/ https://t.me/TheHindu_Zone_official
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 STRATEGY 13 <

Dressing for the occasion

GUEST COLUMN

No quick fixes
Rooted in tradition, Raymond is looking said Dhanjal. The company is now
looking to open its 300th TRS by
Onlyamulti-prongedapproachinvolvingall
to grow by penetrating tier III and IV the end of FY19. stakeholderswillhelpIndiacombatfakenews
But isn’t the company which
towns rather than making a dash online.
D
has several brands such as Park espite how much we are tent. Research by Dartmouth
Avenue and Colorplus under its learning about the prolifer- College Professor Brendan
Will that dilute the brand's exclusivity? belt, giving up on its exclusivity tag
by entering more and more towns?
ation of fake news, it con- Nyhan has found that labelling a
tinues one of the biggest challenges Facebook post as “disputed”
The company feels this pres- in modern-day information-shar- reduces the percentage of read-
SAMREEN AHMAD With e-commerce giants ence won’t affect the quality of the ing. Fake news is now being shared ers believing the false news by
Amazon and Flipkart looking to brands but rather, provide faster than real news and has been 10 percentage points.
Paul McCartney was known to spread their hold deep into the Raymond a competitive advantage especially rampant in India. Flag it to Indian fact-checkers:
have said that a good tune was one semi-urban and rural areas as the by bringing alive the engaging Further, the omnipresence of Hoax-busting web sites such as
that one could sing or whistle to, next wave of customers will come brand experience to its customers. WhatsApp in India has intensified snopes.com have become more
right after one has heard it. One of from these regions, the country is Further, these stores continue to the ability for fake news to spread. commonplace in the US, and now
the most recognisable tunes asso- hurriedly moving towards a vir- add incremental revenue and According to a study last year, similar sites such as Social Media
ciated with an Indian brand is tual shopping experience. income to the company since they 42 per cent of millennials validate Hoax Slayer have popped up in
Raymond and its "representative", According to a report by consult- have opened in completely new the accuracy of a news story, but India. Mumbai-based BOOM fact
the Complete Man. The musical ing firm EY India, this market will markets and towns, said the com- only 25 percent of baby boomers check website, which is certified
tune that has stood by Raymonds throw up a $12 billion opportuni- pany. “Over 90 per cent of the and 19 per cent of Gen Xers do the by the International Fact-
over the decades and has become ty for e-commerce majors in the stores opened have exceeded our same. Fake news spreads quickly Checking Network, runs a
a signature of the brand is origi- next four years. Also, internet expectations in revenue genera- on social media sites WhatsApp helpline
nally from the work Traumerei access in rural and semi-urban tion,” claimed Dhanjal. such as WhatsApp where people can
from Kinderszenen Op 15 by areas is expected to reach 45 per Raymond has so far introduced and Facebook simply send in questions and
Robert Schumann. The piece cent by 2021 from the current 18 a host of new product categories because it’s easy to flag content.
became famous at the end of per cent, says the report. including performance enhancing share, but this doesn’t Use available AI
World War II when radio stations But Raymond refuses to go fabric such as the Techno-Smart bode well for the rep- technology that
across the world played it to signal with the flow. series, the all-Natural Linen col- utation of media out- spots fake news:
the end of the war. With a presence in over 500 lection, leveraging new age tech- lets at large. Facebook recently
The use of that tune over the cities, the company’s plan is to nology such as 3D printing for According to that announced a partner-
years also says a lot about the DNA expand The Raymond Shop (TRS) accessories, to the latest introduc- same survey, 78 per ship with BOOM to
of the Raymond brand — and its across all emerging towns of India tion of Khadi by Raymond. cent said fake news help the social net-
penchant for tradition. Little won- by leveraging strong channel part- The diversified Raymond has damaged the work combat the
der, Raymond is refusing to go nership as the growth drivers for its group, which reported a 4.75 per credibility of the KATHY BLOOMGARDEN spread of fake news
with the flow. Har shahar main Raymond strate- cent increase in consolidated net media industry. And Chief executive officer on the site. And ad-
Even in this era of online com- gy. With the emergence of over profit to ~652 million for the sec- a recent poll showed Ruder Finn blocking technology
merce and virtual shopping, 1,200 new urban towns because of ond quarter ended September 30, that public trust in such as Adblock
Raymond Ltd, one of India’s oldest urbanisation, the company sees said it will continue to offer com- media on a global level is at an all- Plus’s Trusted News extension is
textile manufacturers and retail- these as potential Raymond mar- plete solutions to a men’s time low similar trends are evident being developed to help Internet
ers, has tailor-made an offline strat- kets. The new asset-light model wardrobe from fabric to ready- in India. users spot fake news online.
egy to maintain a strong foothold requires an investment that is less made garments to custom tailor- What can we do in India to help AltNews, an Indian fact-checking
in the tier III and IV towns. “While than a third of a regular TRS — Raymond has so far introduced a host of new product categories ing in the coming years. Its rev- combat fake news? web site, announced last year it
the world is moving to a more vir- and this offers the company valu- including performance enhancing fabric such as the Techno-Smart series enue from branded textile was at One thing is clear: Fake news isn’t would start WhatsApp Broadcasts
tual shopping experi- able cash to fuel ~8.84 billion in Q2FY19, higher by going away. But what can busi- lists to help WhatsApp users iden-
ence by the day, growth in these suitable retail space of 600-1,200 had piloted its format of mini TRS 15 per cent over the previous year nesses and the population at large tify fake news.
Raymond is still com- With a presence emerging markets. square feet and investment of up in September 2016, which was led by 14 per cent growth in the in India do to combat it, or even Call for increased journalistic
mitted to providing its in over 500 The agile design and to ~5 million,” said Mohit Dhanjal, tweaked over six months and was suiting business and 17 per cent in manage it? Here are some meas- accountability: Stricter guide-
customers physical cities, the modular interiors director, retail, Raymond. commercially launched in March the shirting business. ures which can work: lines and additional accreditation
retail touch-points company’s plan ensure that the stores The optimised format TRS also 2017. The first mini TRS opened in The branded apparel segment Challenge fake news: According would make it easier to hold indi-
closer to their home is to expand are set up within 15 has an integrated digital Bihar’s Bihta town. Since then, over sales was at ~4.84 billion, up 15 per to Harvard Kennedy School, call- viduals accountable for what they
that enhances experi- The Raymond days instead of regular omnichannel capability, through 200 mini TRS have been rolled out cent, “driven by strong perform- ing out fake news in comments post or disseminate online, and
ential shopping,” says Shop across all 45 days. “In addition which customers can access a in the past 19 months. “We have ance in multi-brand outlet channel on social media can slow down also help stop people from hiding
Sanjay Behl, chief exec- emerging to the entrepreneurial curated range of products on the leveraged the local knowledge and along with growth in Raymond overall sharing of the content behind fake names when they
utive officer, lifestyle, towns in India mindset, the fran- online store, Raymond Next. expertise of entrepreneurial fran- and Parx brands supported by new and reduce the activity of the make offensive comments or
Raymond. chisee needs to have a The over 90-year-old company chisees with a growth mindset,” customer segments”. individuals who create fake con- engage in prohibited activities.

SNIPPETS STATSPEAK
Home in homeland TRANSFORMING Benchmark groups (2018 versus 2016)
2018 2016 Figures in %
Comparison
with China
DIGITALLY Digital leaders
(Digital transformation ingrained
8
12
India China* Figures in %

IN INDIA
in the business' DNA) Digital leader businesses
Digital adopters 12
(Those with a mature digital plan
34
The DT Indexmaps mid- to large- 29 7
and innovations in place)
sized companies' digital
transformation progress and Digital evaluators 40 Intend to invest in cyber security
(Gradually embracing digital 74
examines business leaders' digital 37
transformation)
hopes and fears. Itcalculates the 55
Digital followers 14
state of digital transformation (Few investments, tentatively
As per ANAROCK's survey, Consumer Sentiment today, howcompanies are 21 Intend to invest in multi-cloud
Outlook,realestatecontinuestobethefavourite planning the future)
progressingwith their 62
InvestmentoptioninIndiaformostnon-resident Digital laggards 2
Indians(NRIs).Thesurveyfoundthat78percent transformation initiatives, their (Don't have
55
respondentspreferredrealestateoverotherasset priorities, plans and investments a plan at all) 5 Intend to invest in IoT
classes—stocks,FDs,mutualfunds—largely and the barriers theyface. Recently,
becauseofthecharmofowningapropertyback technologies
intheircountryoforigin.Recenttrendssuggest
thattherehasbeena15-20percentsurgein
the indexwas released for India
after surveying 200 businesses in
Trends Uses and challenges 67
55
seriousNRI-specificinquiriesforpropertiesin 2018 and calculating thecompanies' Indian businesses facing
major impediments to
93 % Accelerating new product/
63%
Indiaoverthelastoneyear.Whilethefallinthe services development Intend to invest in Artificial
Indianrupeeisbelievedtohavecontributedin
perceived performance in the digital transformation
following areas: Delivering against Equipping IT leaders with business Intelligence
renewingthefocusinrecenttimes,thereismore 63%
toit.Forinstance,foranincreasingnumberof thecore attributes of a digital Indian business leaders skills and business leaders with IT skills 61
NRIs,returninghomemaynolongerbejusta business, existing IT strategy, believe that digital Striving to develop the right skills sets 61% 60
choicebutacompulsion.DonaldTrump’s
workforce transformation strategy transformation should 91 % Building security and privacy *Numbers as proportion of businesses
increasinglyhard-lineworkvisaandimmigration 61%
policiesarecausingmanyNRIswhohadlong- and planned investments. be more widespread into all devices
surveyed in China
Source: Dell Technologies
termplansfortheLandofOpportunitytohaveto
considerreturningtoIndia.PrashantThakur,
headofresearch,ANAROCKPropertyConsultants,
saysjobprospectsandfamilypresenceinthe SHUBHOMOY SIKDAR VasudaMisra, that delivered the that it was by far the most mad-
targetcountryare alsoresponsiblefortheir MY BEST CAMPAIGN impossible under pressure. dening, irksome part. Everybody
interestinpropertyhere. Which is your best campaign and loved to crib about something or
why have you chosen it? Which What did the campaign achieve the other about telecom operators

Powering China year was the campaign launched? for the brand? Could you also — the way they fleeced the con-

Dialling a funny No creative guy is ever going to be

able to pick one campaign he
would unequivocally call his
share some numbers to
corroborate your claim?
It was too long back for me to give
sumer, the appalling service, the
utterly illogical tariffs and a hun-
dred other things. And Tata

number
“best”. But one campaign I cer- you specifics, but with Tata Docomo was one brand that was
tainly remember very vividly is Docomo in those days, the chal- clearly seen as different from the
KISS — the stand up comedy series lenge was simply staying as far rest. So a series of jokes about
featuring Ranbir Kapoor that we ahead in image and preference mobile phones was just begging to
did for Tata Docomo terms as the brand be written.
in 2011 during the had consistently
Indian Premier been from day one. What was the industry response
League. For starters, The added chal- to the campaign?
we shot 43 ads in the lenge was, to bring The response was almost uniform-
series — in two days. those scores among ly, overwhelmingly positive. Most
For another, once the older genera- people were fulsome in their
Capgemini’s annual study World Energy Markets the idea was cracked tion on par with praise. Of course, a few writers
Observatory (WEMO) for 2018 reveals China’s role and approved (I what we enjoyed cribbed a bit about it being “a great
as a leading worldwide player in technology, shared the idea — with the youth. In idea, but could have been funnier”.
equipment and utilities ownership. The study Keep It Simple, Silly fact, people thought
also highlights that global economic growth — with Gurinder stand up was a won- What were the execution
has increased energy demand and leaves Sandu and Ritesh derful creative idea challenges?
long-term climate change targets in question. Ghosal on the we used before any- Apart from my sheer lunacy in
To the surprise of many, demand has remained phone, actually) we
KS CHAKRAVARTHY body else. The truth deciding we could do 40-plus
high in a year that saw both rising European really struggled to Chief creative officer, is it was a very films in two days, nothing, really.
carbon prices and falling renewable energy turn out that many Tidal7 Brand and Digital smart strategic and Ranbir isn’t just a brilliant actor
costs. China’s high demand also means more situations. The creative solution to and a phenomenal improviser, he
emission. Energy requirements are constantly toughest part was the challenge of is also a wonderful guy to work
growing in China, which in 2017 increased its keeping the jokes funny without using a youth icon for a youth- with. No airs, no starry tantrums,
imports of Liquid Natural Gas by 46 per cent, MY TAKE making it controversial — no overt centric brand, to radically broad- nothing. In fact he didn’t believe
making it responsible for 30 per cent of the Everybodylovedtocribaboutsomethingortheotherabout sexual innuendo, no taking digs at en our appeal among the mature till the end we could actually com-
growth in global demand. Pollution levels any particular community, no post-paid user. And the campaign plete all the scripts we had ready.
remain a concern and China is the world’s telecomoperators.ButTataDocomowasonebrandthatwas political wisecracks. In short, none did that effortlessly, in a way the The sad thing was, some of the
biggest emitter of greenhouse gases. The clearlyseenasdifferentfromtherest of the staples of everyday Indian whole world loved. funniest films never got aired
country has a long-term policy of developing humour were used. But more than because certain products and
equipment for domestic usage first before anything else, it was the perfect What was the key idea behind offerings never happened.
BRAND: Tata Docomo
selling it internationally. China also has a storm in a creative guy’s life — the campaign?
dominant share in the worldwide production of YEAR: 2011 great brand, wonderful client, an Mobiles had become an integral Given a chance, what would you
highly sought-after rare metals and rare earth AGENCY: FCB Ulka incredibly talented actor and a fan- part of everyday life and luckily for do differently?
elements needed for energy transition. tastic creative team, headed by us, mobile operators made sure Not a single thing.
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14 MARKETS IN SAMVAT 2074

>
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 1

Resurgent market runs COURSE CORRECTION

Midand small-cap shares came off sharply during the year

into rough weather

Samvat To Samvat returns (%)
Samvat Sensex Nifty 50 Nifty Nifty NSE500
Year Midcap SmallCap
2065 103.6 103.7 118.7 108.6 112.5
2066 20.6 22.2 35.7 36.2 23.3
Samvat 2074 has ended on a rocky note; most concerns continue to linger going into the New Year 2067 -17.4 -17.4 -27.5 -24.7 -20.7
2068 8.2 9.5 12.8 2.0 10.2
2069 13.5 11.0 -3.6 -10.4 6.7
2070 26.4 26.8 49.9 58.2 33.5
2071 -3.9 -2.7 12.4 5.4 1.6
2072 8.5 11.0 23.3 23.8 14.7
2073 16.6 18.2 19.1 25.3 19.9
2074 7.4 3.1 -8.5 -23.4 -1.3

MUTUAL FUNDS DOMINATE

FIIs pulled out money,while MFs stepped up buying

SAMIE MODAK
Mumbai, 8 November

B
arring the last two months, most
part of Samvat 2074 has been
rewarding for stock market
investors. In the first 10 months of the
Hindu calendar year, the benchmark
indices gained 15 per cent and climbed
to all-time highs helped by strong
inflows in mutual funds (MFs) by
domestic investors. The sell-off in
September and October, triggered by a
mix of global and domestic concerns,
saw the S&P BSE Sensex and the
Nifty50 wipe out the entire gains made
during the year.
As the markets usher into Samvat 2075,
most of the concerns continue to linger.
Monetary tightening by central banks,
global trade tensions and worries sur-
rounding slowdown in world economic
growth led by China are some of the exter-
nal factors that could keep markets on
tenterhooks. On the domestic front, wor-
ries of widening current account and fis-
cal deficit amid rising crude oil prices and
rupee weakness, sluggish corporate earn-
ings growth and expensive stock valua-
tions are keeping expectations in check.
Also, the NBFC liquidity crisis triggered by
the default at IL&FS has dampened
investor mood.
As the just-concluded Samvat started
well but ended on a rocky note, the com-
ing year threatens to be volatile, at least
until the big event—2019 General
Elections—is over. Besides, the market
direction will also be dictated by other
factors such as oil prices, US dollar and
bond yield and overall liquidity condi-
tions. The results of forthcoming State
elections will also add to the volatility.
Most analysts expect equities to be
range-bound for most part of the year.
Full-year returns, they believe, could be in
low single-digit.
Given the multiple headwinds, most
AFTER A CHOPPY RIDE, THE NIFTY ENDED FLAT DURING THE YEAR
brokerages have scaled back their one-
year Sensex and Nifty targets recently.
Nomura has cut its 12-month Nifty target
to 11,270 from 11,900. Goldman Sachs too
recently downgraded its stance from
‘overweight’ to ‘marketweight’ saying ele-
vated valuations make risk-reward for the
Indian markets less favourable. Edelweiss
also expects Indian markets to be range-
bound over the next 12 months, with
Nifty50 gyrating between 9,800 and
10,500 ahead of the General Elections in
May next year.
A key worry for the market continues
to be the pull-out by foreign institution-
al investors (FIIs), who have been the key
drivers for Indian equities in the past few
years. The flows that had made their way
into emerging markets (EMs) during
benign liquidity conditions are finding
their way back into the US. This follows
the rate-tightening path taken by its cen-
tral bank, the US Federal Reserve. The
high yield on the 10-year US Treasury
has dimmed the appeal of risky assets
such as equities.
During Samvat 2074, FIIs pulled out
~255 billion from domestic stocks. While
mutual funds (MFs) provided buying
support to the tune of ~1.4 trillion, it was-
Winners Change (%) Laggards Change (%)
Sector show: Defensiveplays ITandFMCGgainedthemost
IT 37.2 Telecom -36.1
FMCG 8.2 Realty -19.2
Bankex 6.3 Auto -17.8
ConsumerDurables 5.1 Oil & Gas -16.3
Capital Goods 3.4 Infrastructure -15.7
Stock performance: Technologysharestopthewinners’list
Tech Mahindra 51.5 Tata Motors -55.4
TCS 49.4 HPCL -51.2
Infosys 44.2 BPCL -44.5
Titan Co 38.1 Bharti Infratel -43.2
JSW Steel 35.6 YES Bank -40.8
Source: Exchanges, Sebi Complied by BS Research Bureau
n’t enough to prevent a sharp correction year. Starting with next month’s State sales (India), Investec Capital. “For the
in the markets. While flows into equity elections, market players will look for market point of view, any stable gov-
MF schemes have been strong, there are cues of a change in political winds. ernment formation is a positive. As of
concerns that they could be moderating. The market has got de-rated as the now, the only stable possibility seems
“We do not expect the recent liq- Nifty now trades at 16 times its one-year to be a government headed by the BJP.
uidity squeeze to turn into a pro- forward earnings estimate, down from 20 If another stable outcome emerges, that
longed credit crunch, though the era times in August. While the current valu- is also not too bad.”
of easy money of the last three-four ations are close to long-term averages, “The markets are not going to be at
years is behind us. Two risks remain: market players don’t rule out valuations all calm about elections…(they) are
will Modi win in 2019 and retail flows dropping further if election results spring going to be all over the place,” said
into mutual funds,” says Gautam a surprise. Ridham Desai, head of India research
Chhaochharia, head of equity “Valuations can undershoot in the at Morgan Stanley. The market has not
research, UBS Securities India. near term in an event we get an unstable yet priced in a fragmented coalition
Market players say election will be a outcome in next year’s election,” says result. If that happens, it will result in
key theme for the markets in the coming Mukul Kochhar, head of institutional significant volatility, he said.

Gold to recover some lost IPO pipeline may moderate

glory in new Samvat SUNDAR SETHURAMAN
Mumbai, 8 November

RAJESH BHAYANI
Mumbai, 8 November LACKLUSTRE RETURNS IN RECENT YEARS
A fter back to back blockbuster years,
the initial public offering (IPO)
market is expected to witness
Domestic gold International gold Gold hits moderation in activity in Samvat 2075.

A fter a dull year, gold is

expected to recover
some of its lost shine in the
new Samvat, which is begin-
ning from November 8. This
comes on the back of an
almost eight per cent rise in
Samvat 2074, which had
seen huge volatility.
Last Samvat,
international gold prices had
spiked to above $1,360 an
ounce before falling to below
$1,200. Currently, it is
around $1,235 levels. A
similar trend was seen in
India, but domestic gold
prices ended higher mainly
due to a weak rupee.
This recovery in gold is
only the second such in six
years (see table).
The bullish bias for gold
in new Samvat is mainly due
to the likely weakness of
dollar, safe haven demand
and favourable supply-
consumption dynamics.
Dollar has stolen the
thunder for the whole of
2018 so far and with further
hikes in interest rates by the
US Federal Reserve on the
anvil, the dollar may
remain firm in the next
few months.
T Gnanaseker, director,
Commztrends, explains,
“Due to the equity market
rout gold has come in favour
and investors have started
building positions again.
Also, the dollar could peak
sometime in the first quarter
of 2019 when further rate
hike could endanger the US
economic recovery (and this
could further support gold).”
On the consumption side,
he feels that investment
demand could rise much
higher in the coming year.
Samvat Year (~/10 gm)
2065 15,800
% Chg *
2066
2067
19,635
26,720
2068
2069
31,900
30,510
2070 27,315
2071 25,735
2072 29,995
2073 29,495
2074 31,810
* Change over previous Samvat
Compiled by BS Research Bureau
A study by the Thomson
Reuters too indicates that
demand for gold will
increase. The study suggest
that global economic growth
is expected to moderate
gradually in 2019 and 2020,
due to slowing economic
expansion in both advanced
and developing economies.
This will be a reason for
gold to shine.
The demand-supply
dynamics are also seen to be
favourable.
Debajit Saha, Senior
Analyst - Precious Metals
Demand, GFMS Thomson
Reuters explains, “Global
physical supply is expected
to grow by 2.2 per cent year-
on-year to 4,509 tonnes in
2018, and remain stable
around the same level in
2019. Physical demand is
expected to grow by 1.4 per
cent in the current year,
while we are moderately
bullish in 2019 as we
expect the demand to grow
by 3.9 per cent. We estimate
the average gold price to
settle around $1,267 per
ounce this year and $1,285
in 2019.”
33.3
( $/oz)
1,053.6
% Chg *
44.2
24.3
36.1
1,392.5
1,705.5
32.2
22.5
19.4
-4.4
1,728.2
1,316.2
1.3
-23.8
-10.5 1,241.3 -5.7
-5.8 1,089.6 -12.2
16.6 1,275.5 17.1
-1.7 1,281.1 0.4
7.8 1,234.9 -3.6
Sources: IBJA/Bloomberg
How prices will behave in
India however will depend
on the rupee’s movement.
“This quarter, we expect the
price to stay around ~31,600 -
31,800. For next year, our
initial estimate is that
average price will remain
around ~31,100 per 10 gram
(2.7 per cent higher than
average prices seen in
Samvat 2074),” says Saha.
Gnanaseker, however is
more bullish. He says, “We
expect gold to hover around
$1,475-1,500 by next Samvat
and in the local markets
around ~35,000-36,000 per
10 gram. The domestic price
could rise relatively less as
we foresee a strengthening
rupee post first half of 2019
as the dollar could peak in
the first quarter of 2019
when further rate hike could
endanger the economic
recovery there.”
Finally, the yellow metal
usually moves in a cycle that
reverses every decade. It
now seems to be in the last
leg of consolidation which
began after its fall in 2011
from the peak levels of
$1,900.
1-week low
as dollar
recovers
SWATI VERMA
Bengaluru, 8 November
Gold slid to a one-week low
on Thursday as the dollar
firmed in the wake of the
US midterm elections, with
market participants now
awaiting clues on the pace
of interest rate hikes from
the US Federal Reserve.
The metal is on track
to post a fifth straight ses-
sion of losses, hurt more
broadly by a recovery in
investor appetite for nom-
inally higher-risk assets
like stocks.
Spot gold was down
0.3 per cent at $1,222.11 per
ounce at 1342 GMT, after
touching its lowest
since November 1 at
$1,221.10. US gold futures
fell 0.5 per cent to
$1,223.10 per ounce.
The dollar’s recovery
ahead of the Fed meet-
ing is pressuring gold,
ABN AMRO analyst
Georgette Boele said,
while technical factors
are also weighing.
“Speculators are not yet
anticipating a recovery,”
she said. “The longer-term
trend is still negative as it
is still under the 200-day
moving average. If you
break above that level,
then you would see a spec-
ulative move into gold.”
REUTERS
Weakness in the secondary market and
political uncertainty are expected to
weigh on new issuances in the coming
months, say experts.
A total of 30 companies raised Rs
510 billion in Samvat 2074 surpassing
the previous year’s tally of Rs 489
billion, data sourced from Prime
Database shows.
Market players say the sharp
correction in small- and mid-cap
stocks and spike in volatility is forcing
companies to hold back their IPO TOP 10 IPOS OF SAMVAT 2074
plans. Experts say there will be a
limited window of opportunity till
Theyear sawseveral big-ticketissuances
next year’s general elections for deal- Issue size Price in ~
making.
(~ bn) Issue price Nov 6, 2018 % chg*
Besides elections, macro stability,
liquidity conditions and risk appetite New India Assurance Co 96.00 400 220.1 -45.0
of foreign investors will be some of the
factors that will determine the fate of HDFC Standard Life Insurance 86.95 290 397.7 37.1
the IPO market.
"The IPO pipeline is quite healthy Bandhan Bank 44.73 375 436.7 16.4
with several companies sitting on Hindustan Aeronautics 41.44 1,215 766.3 -36.9
approvals and several more filing with
the Securities and Exchange Board of ICICI Securities 35.15 520 237.2 -54.4
India. However, before the general
elections, we don't see too many deals
HDFC Asset Management 28.00 1,100 1,402.9 27.5
getting launched,” says Pranav Haldea, Varroc Engineering 19.46 967 805.0 -16.8
managing director, Prime Database.
“Primary markets are a derivative IndoStar Capital Finance 18.44 572 302.7 -47.1
of the secondary market. A revival and
Aavas Financiers 17.34 821 662.4 -19.3
stability in the secondary market is
critical to give a push to the pipeline,” Reliance Nippon Life 15.42 252 162.3 -35.6
he said. Sources: Bloomberg/Exchanges; Complied by BS Research Bureau; *Issue to date
Poor post-listing of recent IPOs is
another factor that will weigh on
investor sentiment. Capital. “If we get a stable government, New India Assurance’s offering,
The BSE IPO index, a gauge for the there will be more reforms on the which raised Rs 96 billion, was the
performance of newly-listed infrastructure side. We might see large biggest public issue in the year. The
companies, fell 13.5 per cent in Samvat deals in sectors such as infrastructure, next big IPOs were by HDFC Standard
2074 as against a gain of 32 per cent in power and retail. There will be lot more Life and Bandhan Bank, which raised
the previous year. Also, share prices of opportunities as there could be revival Rs 87 billion and Rs 45 billion,
most new listings has slipped below in economy growth and capex cycle." respectively.
their IPO price. In Samvat 2074, companies in the Ajay Garg, managing director,
Some believe the strong IPO banking financial services and Equirus Capital, says there could be
pipeline will get a push if election insurance (BFSI) segment accounted some IPO launches post the next
outcome is favourable. for bulk of the fund raising. The year month’s state elections.
“If there is political stability, we will also saw IPOs from state-owned Experts say Samvat 2075 could see
see several large IPOs getting defence companies such as Hindustan issuances from across sectors and it is
launched,” says Dharmesh Mehta Aeronautics, Midhani and Bharat unlikely that one sector will dominate
managing director and CEO, Axis Dynamics. this year.
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.
NEW DELHI | FRIDAY, 9 NOVEMBER 2018 TOP PICKS FOR SAMVAT 2075 15 <

Looking for value in the new Samvat

After a stellar Samvat 2073 that saw most indices rise by over 20 per cent, the past year or Samvat 2074 has not been as rewarding. Barring the large-cap indices S&P BSE
Sensex and Nifty50, many others ended in the red. If last year was about toning down investor expectations, for Samvat 2075 brokerages, while being cautious, see
pockets of value emerge across sectors. The cautious stance is due to multiple headwinds such as expensive oil, weak rupee, impact of IL&FS default on non-banking
financial companies (NBFC), uncertainty over political outcomes in state and general elections, and global trade wars. However, with the correction over the last few
months and Nifty valuations closer to its 10-year average, brokerages believe it is time to selectively buy good quality businesses at reasonable prices. The cautiousness
also stems from the corporate earnings outlook. For FY19, earnings growth, which has been muted over the past couple of years, is again expected to be lower than initial
expectations of 18-20 per cent, thanks to the pressure on margins, high interest rates and subdued demand. For the new Samvat, analysts are bullish on the domestic
consumption themes-both staples and discretionary, select private banks, information technology and pharmaceutical stocks. Ram Prasad Sahu & Shreepad S Aute

TOP LARGE CAP PICKS

INDUSIND BANK INFOSYS
RELIANCE INDUSTRIES ASIAN PAINTS
CMP (~) 1,475 CMP (~) 667
CMP (~) 1,103 Target price (~) 1,965 Target price (~) 795 CMP (~) 1,239
Target price (~) 1,310 Current Price/book (x) 3.5 33.2% Current PE (x) 17.8 19.2% Target price (~) 1,425
Current PE (x) 18.4
18.7% 15.0%
Current PE (x) 55.5

| Reliance Industries’ (RIL) refining and petrochemicals businesses | IndusInd is one of the best performing
are significant cash generators and will help fuel growth of new private banks with a 27-28 per cent
businesses like retail and digital (Jio) annual growth in advances and net profit
| RIL’s retail business is India’s largest. It has clocked a compound over FY14-18, and a strong capital base
annual growth rate of 45 per cent in the past five years placing it | Asset quality remains strong with gross
among the world's top five fastest-growing retail firms. RIL plans to non-performing assets as a percentage of
integrate its physical and digital platforms and double the share of gross advances standing at 1.09 per cent
retail in consolidated revenues by FY21 from 15 per cent now as of September 2018
| Jio, having garnered 250 million subscribers in 25 months, is seen | Growth momentum is likely to persist
growing at a similar pace. The fibre-to-home business is expected with recovery in advances aided by thrust
to boost revenues. Acquisition of Hathway Cable and Den Networks on commercial vehicle loans
will add to Reliance’s digital business | Merger with Bharat Financial could add
| Petcoke gasification project and new fuel regulations to boost to earnings with increase in customer
margins of its largest business of refining base and increased cross selling. But, the
| Vertical integration to drive profits of petrochemicals business merger can also lead to rise in credit risk;
~30 bn IL&FS exposure is another risk
| All-time high order wins in September
quarter suggest that strategies under the
new CEO are starting to bear fruit
| Impressive order pipeline is despite no
compromise on pricing and margins
| Top accounts, banking, insurance and
financial services and digital verticals are
the key growth engines. Further, growth
across geographies and weak rupee to
add to the bottom line growth
| Analysts say if the revenue momentum
continues, Infosys could narrow the
growth differential with larger peer, TCS
· Valuations at 15.1 times FY20 earnings
estimate are reasonable and the discount
of over 20 per cent to TCS could narrow
| The leader in domestic paints with around 54 per cent in the
organised sector, Asian Paints is also amongst the top 10 decorative
paints player in the world
| Government’s initiatives to push up housing sector growth,
increasing disposable income levels, the recent slash in goods and
services tax and rising consumer demand are expected to fuel the
prospect of India’s paints industry
| Asian Paints would benefit from this amid strong distribution
network, capacity additions (at Visakhapatnam and Mysuru with
combined annual capacity of 1.1 million kilolitres) and new
product launches
| Concerns over rising crude oil prices and weak rupee are likely to be
mitigated with improved product mix and operating leverage
besides selective price hikes. Analysts expect 12-15 per cent annual
rise in net profit over next two years

MARUTI SUZUKI | Favourable product cycle with BRITANNIA INDUSTRIES

leadership in high-growth | A leader in biscuits with 33 per
CMP (~) 7,073 segments, better mix with rising cent market share by value,
CMP (~) 5,713
share of premium vehicles and Britannia has forayed into
Target price (~) 8,580 falling discounts to lift margins Target price (~) 6,870 bakery and dairy products; the
Current PE (x) 32.6 21.3% of India’s largest car maker Current PE (x) 65.6 20.3% latter is seen as a sunrise sector
| Maruti’s market share is for organised players.
expected to rise further on better | Innovation, increase in the
demand, steady volume growth launch of premium products,
and shrinking waiting periods. expansion of distribution
Lower supply constraints and network in under-penetrated
higher demand from rural areas areas (total outlets 5.2 million)
should also help and gains from goods and
| Headwinds in the form of services tax rollout would help
insurance costs, high interest sustain its leadership
rates, commodity inflation and | Though high input costs are a
rising vehicle running costs are near-term worry, higher
expected to ease over the product premiumisation, cost
medium term efficiency, and backward
· Lower exposure of imports, integration in diary to protect
increasing localisation of parts margins
and cost efficiencies to keep | Analysts expect the company’s
overall expenses under control net profit to grow by 15-20 per
and boost cash flows cent annually over FY18-20

TOP MID AND SMALL CAP PICKS

Quality takes centre stage as on one for the other.

Says Naveen Kulkarni, head of
research at Reliance Securities,
Company

Arvind 317
CMP
(~)
Target
price (~)
467
Upside
(%)
47.0
EPS CAGR (%)*
(FY18-FY20)
35.3
PE
ratio (X)
26.5

investors seek safety

“While flight to quality is a consensus
trade, the market is witnessing a Mphasis 911 1,328 45.8 20.9 21.4
trend reversal with value
investing making a certain
Zensar Technologies 240 335 39.8 28.9 22.3
RamPrasadSahu and though it has corrected, the degree of comeback. HeidelbergCement India 148 200 35.5 40.2 25.1
premium is still there.” He believes Thus, exploiting the
Jubilant FoodWorks 1,044 1,410 35.1 39.6 70.2
W hen there is a flight to safety, it is
stocks which are lower down
the market cap ladder which get
that one needs to tread with caution
while looking at companies in this
space and look for opportunities from
best of the both worlds,
which is quality backed
by value or value backed by
Parag Milk Foods 248 329 32.6 27.7 23.9
Oberoi Realty 438 574 31.2 58.8 32.4
impacted the most. That has been the a bottom-up perspective. quality, seems to be the most
case over the last year with the BSE Thus, the key theme which apt strategy at this juncture.” Mold-Tek Packaging 264 345 30.6 26.7 26.3
SmallCap and MidCap indices down emerges from the risk-on mode of the Though the definition of value Mindtree 835 1,081 29.5 25.7 19.9
25-35 per cent from their peaks while markets is the focus on quality. differs, investors could look at
the S&P BSE Sensex still remains in Analysts at JM Financial believe that companies trading below their Praj Industries 108 140 29.5 45.2 49.4
the green. There have been multiple volatility often compels investors to historic levels as well with respect Sundram Fasteners 535 677 26.5 26.2 29.1
reasons for the rise of the small and search for pockets of safety. They to peers.
mid-cap companies in 2016 and 2017 suggest that when investors position While there is opportunity for Ashok Leyland 121 149 23.3 20.7 19.9
and the slide in the current calendar themselves for a deteriorating bottom-fishing after the steep United Spirits 626 770 23.1 24.6 70.0
year. Analysts highlight incessant environment, their portfolios correction, analysts at IIFL have a
domestic fund flows into smaller should consist of companies piece of advice small-cap investors L&T Technology Services 1,662 2,042 22.9 24.5 33.5
companies driven by need for high which are high-quality, cash- should not ignore: Avoid averaging Exide Industries 253 309 22.3 22.6 31.1
returns and expectations of higher generative entities that could do stocks whose fundamentals have
earnings growth. While these stocks well on market reversals. Quality thus deteriorated significantly. Instead, L&T Infotech 1,692 2,068 22.2 21.7 26.1
got re-rated, earnings however did boils down to managements, which IMAGE: iSTOCK look for companies which can deliver Biocon 629 768 22.0 70.9 53.9
not follow, which coupled with a have a proven track record of The other factor is valuations. sustainable earnings growth. To get
deteriorating macro environment led delivering consistent growth without Experts say after a long spell of you started on this process we have
Trident India 71 86 20.8 25.8 13.4
to the correction. Says Gautam compromising on profitability and overvaluation, pockets of value are picked some companies suggested by Apollo Hospitals 1,134 1,368 20.7 91.0 134.3
Duggad, head of research at Motilal cash flows. Business models also have emerging across the market brokerages which could deliver good
Dr Reddy's Labs 2,451 2,952 20.4 49.9 41.5
Oswal Securities, “Valuations had to be strong or stable enough to capitalisation spectrum. This means earnings growth over the next couple
* estimates; Price is rounded off; Upside is potential gain (target price over current price); EPS: earnings per share; PE: price-to-earnings
reached an unsustainable premium weather the changes in industry and investors can look at both quality and of years and outperform the overall ratio; CAGR: compounded annual growth rate; List includes companies with minimum upside potential of 20 per cent and estimated EPS
(over large caps) in January this year market cycles. value names without compromising markets. CAGR of 20%; Source: Brokerages Compiled by BS Research Bureau

Current price to earnings (PE) is based on trailing 12 months financials ended June 2018 (or September 2018 where results have been declared); net sales, net interest income (NII) and net profit data is in rupees billion; CMP is current market price as on Nov 6,
2018; Top large cap picks are those with at least two brokerage recommendation and with upside potential of at least 15 per cent. Share price figures rounded-off; figures inside the arrows indicate potential upside for the next 12 months based on target price of
brokerages; Source: Motilal Oswal Securities, HDFC Securities, Reliance Securities, Centrum Broking, Axis Direct, Prabhudhas Lilladher, Anand Rathi, IIFL, Nirmal Bang, Religare Broking, Sharekhan by BNP Paribas and JM Financial Data compiled by BS Research Bureau