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Note ban expanded

nod for privatisation
Hong Kong-based Moody’s Investors Service

tax base: Jaitley

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. Willbegiventoprivate FM says move led to digitisation, helping RuPay,
The review reflects the company’s low levels
of profitability, particularly from its core playersfor30yearsona UPI overtake Mastercard and Visa
Indian mobile operations, negative free
cash flow, and higher debt levels. 2>
New Delhi, 8 November

RBI circular may send he government on Thursday
decided to privatise six air-
100 more firms to NCLT ports. The ones chosen for MANMOHAN
operation, management and
development through a public-private AAI REVENUE On the second
partnership (PPP) model are Lucknow, FROM LEASE anniversary of
Ahmedabad, Jaipur, Mangaluru, RENTALS in ~bn demonetisation on
Thiruvananthapuram, and Guwahati. “The Airports Thursday, former PM
This comes 12 years after Delhi and Authority of India (AAI) The six airports are: Manmohan Singh
Mumbai airports were privatised in will hold a minor stake, Lucknow advised the Narendra
2006. The decision was taken at a just like it does at the Ahmedabad Modi government to
Union Cabinet meeting. “After the Delhi and Mumbai air- Jaipur “WHAT HAS HAPPENED TO PROPHETS OF show prudence,
Eighty-100 stressed companies may soon be modernisation of airports in Delhi and ports. The private player Mangaluru thought and care in its
38.36 (30.6)

Thiruvananthapuram handling of economy

29.07 (31.0)

referred to the National Company Law Mumbai through the PPP model, we will hold at least 75 per
33.79 (31.2)

31.02 (23.9)

Tribunal (NCLT), with the Reserve Bank of saw a great improvement in the quali- cent stake,” said an official Guwahati DECLINE BY AT LEAST 2%? FOR THE FIFTH policymaking. “I urge
India (RBI) making 100 per cent voting ty of the airports. Tourist flows also aware of the development. YEAR RUNNING INDIA WILL BE THE the government to
mandatory for any debt-restructuring increased. So we have decided to The bidding will be cent of its revenue with FASTEST GROWING (LARGE) ECONOMY IN restore certainty and
proposal. “It’s not only the power develop six more airports under this held in a revenue-sharing the AAI every year. GVK, THE WORLD. ... (THEY) HAVE BEEN visibility in economic
companies that are facing the brunt of the model,” said Minister of Law and model, where bidders are which operates the policies,” the former




RBI move, but many other companies from Justice Ravi Shankar Prasad. required to pay a specified Mumbai airport, shares prime minister said. 4 >
the telecom and allied industries. In many A group of secretaries from the share of gross revenue to 38.7 per cent of the rev- ARUN JAITLEY, FINANCE MINISTER
cases, a bank with less than 1 per cent vote at Ministry of Civil Aviation and depart- the AAI. This is known as Figures in brackets: enue. The AAI’s profits are
the committee meetings has stopped ments of economic affairs and expen- the concession fee. The Percentage of lease rental largely driven by revenue INDIVJAL DHASMANA
in AAI revenue
debt-resolution plans,” said a lender. diture, headed by NITI Aayog Chief bidder who quotes the it earns from these two New Delhi, 8 November
Executive Officer (CEO) Amitabh Kant, highest fee wins it. The airports. It has earned
will decide the contours of the sale. same model followed was during about ~100 billion from GMR and Personal income tax (I-T) collection rose 20.2 per
Sources in the government said the the privatisation of Delhi and GVK. Sector experts feel the airports cent and corporation tax 19.5 per cent in the first sev-
Fortis Healthcare CEO airports would be bid out for 30 years Mumbai airports. chosen for privatisation will also get en months of the current financial year (2018-19 or
and the chosen private player will be Under the agreement, Delhi airport attractive bids. FY19), over the corresponding period of the previous
Bhavdeep Singh quits given a controlling stake. operator GMR has to share 45.99 per Turn to Page 7 > year (2017-18 or FY18), said Finance Minister (FM)
Fortis Healthcare said on Thursday its CEO Arun Jaitley on Thursday. For this, he credited the
Bhavdeep Singh has resigned but will
continue in his current capacity till a DISINVESTMENT TARGET: GOVT TO SELL ENEMY SHARES, EXIT DREDGING CORP government decision to demonetise high-value cur-
rency notes on November 8, 2016.
successor is found. Singh has resigned from In a bid to meet the Centre’s steep entire stake in Dredging Corporation of history with acquisitions within the public In the Budget for FY19, the government targeted
his position by communication dated ~800-billion disinvestment target, the India (DCI) to a consortium of four sector companies’ space, the consortium of 19.88 per cent growth for personal I-T and 10.15 per
November 8, 2018. The Board of Directors of Cabinet, on Thursday, approved selling ports. The ‘enemy shares’ are valued at Visakhapatnam Port Trust, Jawaharlal cent growth for corporation tax.
the company has accepted his resignation. of ‘enemy shares’, currently with the ~30 billion at current rates, the Centre said, Nehru Port Trust, Kandla Port Trust, and Quoting a plethora of statistics, Jaitley said on
Custodian of Enemy Property for India while the Centre’s 73.47 stake in DCI is Paradip Port Trust is likely to acquire the his Facebook page in the two years before demon-
ECONOMY P6 (CEPI), in 996 companies, and gave its valued at ~7.17 billion as on Wednesday’s Centre’s stake in DCI at a premium. etisation — 2014-15 (FY15) and 2015-16 (FY16) — “IT IS OFTEN SAID
nod to the government divesting its closing date. Given the government’s past ARUP ROYCHOUDHURY writes 6> direct tax collections increased 6.6 per cent and 9 THAT TIME
Government assures per cent, respectively. Since demonetisation, the
increase has been 14.6 per cent in 2016-17 and 18 per
faster GST refunds cent in 2017-18. HEALER. BUT
The government has assured exporters that
there is “no let-up in the sanction of goods
and services tax (GST) refunds” or that there
Green shoots of liquidity for NBFCs 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

in commercial paper market THE SCARS AND

is no delay from the government’s side in growth in indirect tax collection as well.
processing refunds of the GST. About 94 per “In FY15, the indirect tax-to-gross domestic prod-
cent of the refund claims have been settled uct (GDP) ratio was 4.4 per cent. Post-GST (sic), it
by the Central Board of Indirect Taxes and has climbed up by at least 1 percentage point to 5.4 DEMONETISATION
Customs (CBIC) and respective state
authorities, the CBIC said in a press release
Mumbai, 8 November EARLY HOPE with gradual easing in funding access for
per cent,” he said in his post, “Impact of
Demonetisation”. MORE VISIBLE
on Thursday. Thecommercial paper marketis seeing Krishnan Sitaraman, senior director, He said despite an annual I-T relief of ~970 bil- WITH TIME “
The worst may be over for non-banking signs ofrecoveryfrom IL&FSfallout CRISIL Ratings, said CP volumes had lion to the smaller taxpayers and a ~800-billion to MANMOHAN SINGH,
finance companies (NBFCs) and housing Issuances (~ billion) increased in the last week of October and the GST assessees, tax collections have gone up. FORMER PRIME MINISTER
finance companies (HFCs) as far as rais- if the trend continued, rollover rates Turn to Page 7 >
Verma meets CVC, refutes ing funds from the commercial paper should be higher in November.
(CP) market is concerned. Seconding that view, Lakshmi Iyer,
charges levelled by Asthana After the liquidity squeeze following chief investment officer (debt), Kotak
CBI Director Alok Verma on Thursday met
Central Vigilance Commissioner K V
the default by the IL&FS group in
September, there are early signs of a
Mutual Fund, said, “Right now, CPs up to
three-month maturities are having
Chowdary and denied corruption charges
levelled against him by his deputy and
recovery in the CP market with non-bank
lenders (NBFCs and HFCs) raising ~300
demand. However, the sentiment has
improved. The issuances in the CP mar-
special director in the probe agency Rakesh billion in October. ket could possibly cross ~1 trillion in The Air India ground staff — affiliated to a Shiv Sena
Asthana, officials said. Verma came to the Almost half of this, or ~150 billion, was November.” labour union — went on a flash strike from
Central Vigilance Commission (CVC) office in raised in the last week of October, albeit Experts say the larger non-bank enti- Wednesday night, disrupting flights at Mumbai
the late afternoon and stayed there for at a higher cost, according to market ties are covered to meet their near-term airport in the process. However, the strike was
about two hours, they said. sources. repayment cycle, and hence the much- called off on Thursday night. Air India operates around
The Reserve Bank of India (RBI) data talked about crisis may be averted. 470 daily flights and around 50 of those were delayed by
on CP issuance by corporates and finance Source: Reserve Bank of India; fortnightly data The 50 large CRISIL-rated non-banks close to two hours across the network, by Thursday
companies also points to the shift in sen- have debt repayments worth ~950 billion afternoon. Ground handling functions like check-in and
timent. After the amount of reported CP cent to ~949 billion in the fortnight end- due in November. Of this, ~700 billion is loading/unloading of bags are handled by the airline’s subsidiary Air India Air
issuances declined sharply in September ed October 31, up from ~799 billion in the related to CPs maturing. While some non- Transport Services (AIATSL). Its staff comprises both Air India employees on
ON (see adjoining chart) and plunged further
to an almost six-month low in the first
previous fortnight.
Rating agency CRISIL in a statement
banks are well-placed to meet debt repay-
ments without using the bank lines, oth-
deputation or transfer, and employees on contract. The contract staff went on
strike from 11:00 pm on Wednesday, demanding reinstatement of three

FRIDAY fortnight of October, there has been some
recovery. The CP issuances rose by 19 per
said there had been some change in mar-
ket sentiment over the past two weeks
ers may have to do so, at least partially,
CRISIL said. Turn to Page 7 >
employees who were sacked from work as well as recognition of their
labour union. 3>

STRATEGY: Dressing for

the occasion 13 >
Rooted in tradition, Raymond is
looking to grow by penetrating tier-III
and -IV towns. SAMREEN AHMAD writes
India Inc staff addition in FY18 slowest in three years
Commercial property is
Slowdown in industrial, infrastructure sectors and low volume growth in IT led to only 1.9% year-on-year rise in hiring
costlier, but delivers
better returns 10 >
Mumbai, 8 November
These are largely permanent
employees as most companies don’t
JOBS GROWTH IN Dewan Housing Finance. They were
followed by insurance companies such
Investors can earn a steady 7-9 per cent report contractual workers and those CORPORATE INDIA as HDFC Standard Life and ICICI
rental yield in this segment, compared A slower-than-expected economic working for their sub-contractors. In Prudential Life Insurance.
to only 2-3 per cent in residential. recovery has hit fresh hiring by most cases, the headcount is largely for The headcount in the financial
SANJAY KUMAR SINGH writes corporate India. the listed parent firm and operating services industry was up 5.6 per cent
The employee count of India Inc companies and excludes their year-on-year in 2017-18 to 922,000.
ISSUES AND INSIGHTS: was up just 1.9 per cent year-on-year in subsidiaries — domestic as well as Companies in this industry added
Sniff? Yes. Paws? No. 8> 2017-18, growing at the slowest pace in foreign ones. 49,212 people to their rolls in 2017-18,
The RBI isn’t inviolate. But the at least three years. In all 64,380 employees joined the though down from 52,561 people a
government must remember In comparison, the headcount was rolls of these companies in the last year earlier. The sector accounted for
a maxim: “Nose in, paws up 3.5 per cent year-on-year in the fiscal year, down sharply from 116,300 three-fourths of new jobs created in
out”. Ask questions; previous year and 4.6 per cent in 2015- a year ago and 146,800 in 2015-16. the last fiscal year, stealing the mantle
critique; but hands off the 16 (see chart). The high point for the job market from the IT services exporters such as
Based on the numbers of 171 out of 200 BSE 200 index
till, says OMKAR GOSWAMI At the end of March 2018, around was 2013-14, when India Inc's companies Source: Capitaline, companies' annual report
Tata Consultancy Services, Infosys
3.5 million people were employed by headcount was up 6.2 per cent and and Wipro.
India's top 171 listed companies that 183,707 people had joined the rolls of In comparison, top IT exporters
are part of the BSE 200 Index. The these top 171 listed companies. construction, was the main job managing director, Equinomics added just 6,776 people to their rolls in
sample includes only companies Experts attribute this to the creator at the lower end while IT Research & Advisory Services. 2017-18, accounting for only 10 per cent
E-paper whose headcount is available for the continued slowdown in the industrial services exporters created most of the Most new jobs were created by retail of all fresh hiring by India's top 171
Since the Mumbai office of last six years. and infrastructure sectors and low new jobs at the higher end of the lenders, especially non-banking companies in the last fiscal year. This
Business Standard was closed on The numbers have been sourced volume growth in the information salary bracket. Both are now facing finance companies such as Bajaj is much lower than the past track
Thursday (8 November), Delhi edition from the Capitaline database and technology (IT) industry. “Till a few growth headwinds,” says G Finance, Edelweiss Financial Services, record of the IT industry.
is available for the e-paper companies' annual reports. years ago, infrastructure, especially Chokkalingam, founder and Indiabulls Housing Finance and Turn to Page 7 >

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-

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,

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-
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-

rating downgrade
ascomparedwith~36.60bil- ed.Smartphoneshipmentin
Company saw sales growth slowing to 1.8% in 2017-18
regulatoryfiling.Totalexpenses "IndiaovertooktheUSthis ARNAB DUTTA Rival Hindustan Unilever that
inthesecondquarterofthisfis- quartertobethesecond- New Delhi, 8 November sells hygiene products under the ROMITA MAJUMDAR
calyearstoodat~36.11billion, largestmarket,thoughboth Lifebuoy and Domex brands, had Mumbai, 8 November
up12.17percent,asagainst countrieswerehitbyweaker RB India, local arm of British con- raised a pitch on similar lines. It had
~32.19billionreportedinthe seasonalperformancecom- sumer goods giant Reckitt Benckiser, begun a drive to educate consumers Hong Kong-based Moody’s
correspondingquarterayear paredwithlastyear,"itsaid. hit a slow lane in 2017-18. in Bihar about the importance of Investors Service has placed
ago.Theboardofdirectorshas Worldwidesmartphoneship- The maker of widely used hyg- hygiene. It then expanded this in ear- on review a possible down-
alsoapprovedthepaymentof mentsfellby7.2percentyear- iene brands Dettol, Lysol, and Harpic ly 2018 with a Swachh Aadat, Swachh grade of the Baa3 issuer and
interimdividendof~3persha- on-yearto348.9millionunits registered a 1.8 per cent rise in rev- Bharat programme, targeting chil- senior unsecured rating of
reforthefinancialyearending duringJuly-September2018,a enue from the year before, to dren across India. Bharti Airtel (Bharti) and the
March31,2019. BSREPORTER< fourthconsecutivequarterof ~58.1 billion (data from the office of Kolkata-based ITC that owns rival ratings on the backed senior
decline,Canalyssaid. PTI< the Registrar of Companies). This brads Savlon and Nimyle is also try- unsecured notes issued by
was much below the rise for the ing to lure consumers. Reckitt’s per- Bharti’s wholly owned sub-
Godrej Properties earlier two years, of 13 per cent in formance in FY18 might be showing sidiary, Bharti Airtel Intern-
cuts net debt by Telcos tell DoT on
proof of concept
2016-17 (FY17) and 16 per cent in 2015-
16 (FY16).
the impact of the then newly intro-
duced goods and services tax (GST), IN SLOW LANE ational (Netherlands) BV.
The review reflects the
The review reflects Airtel’s
low levels of profitability,
half in one year The profit numbers for FY17 and which took effect from July 1, 2017. RB’s India revenue flattened in 2017-18 (~ bn) company’s low levels of prof- particularly from its core
RealtyfirmGodrejProperties sites for digital KYC 2017-18 (FY18) and were not available. The firm had noted a loss of sales in 58.14 itability, particularly from its Indian mobile operations,
hasreduceditsnetdebtby Telecomoperators,including In FY16, the net profit jumped 105 per mid-2017, when businesses were core Indian mobile operations, negative free cash flow, and
51percentinlastoneyearto BhartiAirtel,RelianceJio,and cent to a little over ~15.1 billion. struggling to realign operations with 50.62 negative free cash flow, and higher debt levels
~15.39billionmainlywiththe VodafoneIdea,haveinformed RB’s India business depends heav- the new tax regime. The third-party 43.68 higher debt levels. “The review
helpofbettersalesbookings. thetelecomdepartmentabout ily on its health and hygiene related distribution system, comprising for downgrade is primarily reduce debt levels significan-
ThenetdebtofGordej theirreadinesstoconductproof products. Since 2014, this had been mostly the wholesaler and stockist driven by our expectation that tly. However, Bharti is becom-
Properties-therealestatearm ofconceptforthenew‘alter- riding on the growing awareness on channels, had come to a near halt. Bharti’s cash flow generation ing increasingly dependent
ofGodrejgroup-stoodat natedigitalKYCprocess’attwo these subjects. In line with Prime RB’s global management had said will remain weak and leverage on a major turnaround of the
~15.39billionasonSeptember locations,asstipulated.The Minister Narendra Modi’s flagship in July 2017 that “sales have been hit elevated,” said Annalisa Di- underlying Indian operations.
30,asagainst~31.37billiona DepartmentofTelecom(DoT) Swachh Bharat Mission, it had launc- by the (GST introduction), which has Chiara, Moody’s vice-president “Because we believe a
year-ago,accordingtoan hasalsoissuedthedetailsof hed a ~1-billion campaign to further prompted retailers to slash their and senior credit officer. more rational competitive en-
investors'presentationforthe theprocedureandmodalities promote hygiene products. prices”, referring to its June quarter In the September quarter, vironment in India’s tele-
secondquarterofthisfiscal tobefollowedbytelecom Dettol contributes an estimated 60 business. “The company has suffered 7.38 15.15 NA NA Bharti Airtel posted a consol- communications market is
year.Theaverageborrowing operatorsforissuingnew per cent of RB’s revenue here; Harpic lower orders from some customers in FY14-15 FY15-16 FY16-17 FY17-18 idated net income of ~1.18 bil- unlikely over the next 12-18
coststoodat7.88percentason mobileconnectionsusingthe generates a little over 10 per cent. June because of the new GST”. Sources: Registrar of Companies, MCA lion, up from ~0.97 billion months, the review reflects
September30asagainst8.1per alternatedigitalKYCprocess. in the previous quarter but uncertainty as to whether the
centayear-ago.Netdebt- AccordingtoaDoTcircular 65 per cent down from company's profitability, cash
equityratiohasalsoreducedto datedNovember6,BhartiAirtel ~3.4 billion a year ago. flow situation and debt levels
inDelhiandMeerut,while Avantha offers ~24.3 billion 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 BharatSancharNigamLtd per cent year-on-year but up also Moody’s lead analyst for
despiteoverallslowdownin (BSNL)hasidentifiedtwo just 1.7 per cent sequentially. Bharti. The review will focus
thepropertymarket. PTI< locationsinTelanganafor Net debt increased to ~1.13 tril- on issues like Bharti Airtel’s
thesame. PTI< lion from ~1.03 trillion in the commitments and plans to
JYOTI MUKUL the dues in three months from refer all defaulting firms to the last quarter. On September 30, substantially reduce debt over
Raymond eyes small New Delhi, 8 November thedateofreceivingfinalaccept- insolvency court, companies Bharti’s consolidated adjusted a short period of time and
town stores for 20% Coca-Cola plans ance from lenders. While an across a host of sectors includ- debt-to-Ebitda was around turn around the underlying
of its retail sales energy drinks under Gautam Thapar group pro- Avantha group spokesperson ing power got a reprieve from 4.5x. Ebitda is earnings before Indian mobile operations.
moted Avantha Holdings has didnotrespondtoemailqueries, the Supreme Court in Septem- interest, tax, depreciation and The ratings could be down-
Raymondexpects20percentof namesake brand offered to pay ~24.30 billion to an Axis Bank’s spokesperson, ber for two months from the amortisation. gradedifthefirmfailstousethe
itstextileandapparelretail Coca-Cola Co said on Thursday lenders to escape insolvency said the bank did not comment order. The next hearing will be India revenues for Q2FY19 proceeds from its recent pre-
businessinIndiatocomefrom it plans to launch two energy proceedings for its Jhabua on client-specific matters. held on November 14. at ~149 billion declined 10.9 per IPOofitsAfricanbusinessorits
smalltowns,whereitisopen- drinks under its namesake power plant. Avantha Power & Infra- While cancelling the place- cent on a reported basis from proposedcapitalraising.More-
ing‘MiniTRS’storescateringto brand, its latest move to The plant is one of the proj- structure has an operational ment of letter of intent on Wor- ~167 billion a year ago. Mobile over, any further deterioration
aspirationsofthepeople,a diversify away from sugary ects for which lenders, led by power generation capacity of lds Window, lenders said the let- revenues continued to witness in its operating performance,
companyofficialsaid.The sodas. Coca-Cola, in an Axis Bank, were looking for suit- 626 Mw, with another 660 Mw ter and documents of fund a fall and were down 7.2 per particularly in the Indian mob-
company,whichhasrecently emailed statement, declined ors outside the IBC. The lenders of capacity under implementa- commitment by GFG Alliance cent year-on-year on an under- ile segment, would also lead to
achievedthetargettoopenits to provide a timeline for the have meanwhile cancelled the tion.JhabuaPower,asubsidiary andSrei“donotinspireanycon- lying basis, led by continued a downgrade, said Moody’s.
200th'MiniTRS'(TheRaymond launch of the drinks, to be bid of the little-known Worlds Window Group’s bid, which was of Avantha Power & In- fidence” regarding funding for average revenue per user JPMorgan research analyst
Shop),hasplanstoaddaround named “Coca-Cola Energy” Window group that had emer- rejected on the grounds of not frastructure, is based at Seoni the transaction. The GFG letter (ARPU) down-trading im- Viju George noted in a recent
600moreinitsnetworkintier and “Coca-Cola Energy No ged as the successful bidder for meeting certain requirements district in Madhya Pradesh. of support was rejected on the pacted by competitive pricing report the strategic investment
IV,VandVItowns.“FortheTRS Sugar.” The beverages would thepowerplantthroughthreeof before the October 15 deadline With the plant having its 71 per ground that it was subject to cer- pressures, said the company in in Bharti Africa ($1.25 billion
channel,wesee,thesestores, likely have caffeine from its firms. The Worlds Window for signing a definitive agree- cent of 600 Mw capacity tied up tain“termsandconditions”that its results statement. While from a clutch of investors)
MiniTRSwhichweareopening naturally-derived sources and Group was backed by London- ment. The Gautam Thapar-led for sale with Madhya Pradesh were not spelt out. “Further the Moody’s expects that most of would help reduce the debt by
up,tocontributearound15to guarana extract, Coke said. based GFG Alliance, Srei Alter- Avantha Group plans to take and Kerala, and its fuel linkage letter does not cover the entire the $1.25 billion raised from the only 8 per cent, which is
20percentoftherevenue,” Coke is currently in arbitration native Investment, and Goyal ~19 billion from Deutsche Bank, inplace,itisoneoftheattractive amount of consideration for the pre-IPO of its African business scarcely enough, given the rate
RaymondDirector-Retail with energy drinks maker MG Gases. Liberty House, a part while it is also discussion with power assets on sale. proposed transaction,” lenders will be used to reduce debt, the of Ebitda decline in India wire-
MohitDhanjalsaid.According Monster Beverage, in which it of GFG Alliance, is in trouble for investors for another ~5.3 billion Industry players like JSW said in their communication to leveragewillonlyimprovemar- less. Bharti’s India wireless
tostrategy,Raymondhasiden- is the top shareholder, over two of its other bids for through an equity infusion. Group were keen on the asset Worlds Window. ginally, the rating agency said. Ebitda margins at 21 per cent
tified800smalltownshaving the launch of the drinks, insolvent assets — Amtek and InalettertoAxisBank—one but did not eventually put in a Besides Jhabua, Avantha Moody’s views positively declined 540 basis points
populationabove50,000to which Monster says could Adhunik Metaliks. ofthelenderstothepowerplant bid. Though, under the Reserve has a 26 Mw gas-based captive the management’s plans to quarter-on-quarter (13.5 per
sustainastoreandtapthe violate an agreement bet- The Avantha offer is higher — Avantha Holdings said it Bank of India’s February 12 cir- power in Malanpur in Bhind further raise capital, includ- cent year-on-year) largely due
potentialthroughMiniTRS. PTI< ween the companies. REUTERS< than ~23.50 billion the Worlds would be in a position to pay up cular lenders were asked to district of Madhya Pradesh. ing asset sales, which aim to 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
managing director, Tulip Infratech.
homebuyers. “Realestatecontinuesto
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
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-
Anarock advisorstryingtheirbesttoclosedeals. surveyforthesecondhalfofthisyear theprecedingquarter.Incomparisonto to buy,” said Praveen Jain, chairman and ence call last week.


Flash strike delays 50 AI Fortis CEO Bhavdeep Singh steps down

flights from Mumbai

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

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
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
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.

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
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
Allahabad bank to Most e-wallet
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

New Delhi, 8 November
(USTR) office had initiated dispute
settlement proceedings on both mat-
The recent verdict against India by
the World Trade Organization (WTO)
ters. Similar action has been initiated
over sectoral schemes including the
Electronics Hardware Technology
Date of last WTO
Issue Complainant Verdict
levelled by Asthana
on a dispute on iron and steel imports Parks Scheme, special economic Appellate body Prohibitions imposed by India on United States India’s Avian Influenza measures are inconsistent PRESS TRUST OF INDIA officials probing crucial cases
from Japan has disconcerted policy- zones and the Export Promotion 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
makers about major upcoming rul- Capital Goods Scheme. June, 2015 due to concerns about Avian complaint of corruption agai-
ings affecting New Delhi’s trade poli- “These subsidies provide bene- Influenza CBI Director Alok Verma on nst the probe agency’s chief
cy and the export sector. fits to Indian exporters, allowing India sought further US imposing higher fees on certain India Inconclusive with consultations dragging on Thursday met Central Vigil- Verma, they said. The offi-
On November 6, a panel formed them to sell their goods more cheap- consultations in applicants for L-1 and H-1B ance Commissioner K V Chow- cials said CBI personnel from
by the dispute settlement body of the ly to the detriment of American March 2016 categories of non-immigrant visas dary and denied corruption the rank of inspector up to
WTO — the first stage of a winding workers and manufacturers,” the charges levelled against him by superintendent of police
arbitration process — said certain USTR said. It has cornered India at 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-
safeguard duties imposed by India the multilateral platform, stating 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-
on iron and steel imports from Japan WTO rules prohibit nations from developers under the Jawaharlal non-discrimination obligations Asthana, officials said. ior CVC official.
were not in keeping with trade rules. providing export subsidies. Nehru National Solar Mission Verma came to the These officials, who
It said India had failed in proving that India has promised to fight the Central Vigilance had recorded their
Initial panel report Safeguard duties imposed by India Japan Despite India pleading the measure had expired, the
domestic injury had suffered serious charge that it was misusing export Commission (CVC) VS statements
economic losses owing to higher
imports. This latest move by the glob-
subsidies and is set to reply within 60
sent to members in
November 2018
on imports of iron and steel
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
al trade watchdog against New Delhi endonSeptember23,butbothparties caused serious injury to domestic industry yed there for about the Moin Qureshi
— the fourth major instance in the are yet to complete their submission," 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
past five years — have raised serious Jayant Dasgupta, former ambassador adopted “Additional Duty” imposed by India the imposition of duties in excess of those set forth in He met Chowdary and IRCTC scam, involving
concerns among experts and policy- of India to the WTO, said. Vigilance Commissioner former railway minister Lalu
in November 2008 on alcoholic beverages and “Extra- India’s Schedule of Concessions
makers regarding the fate of other He suggested the case might only Sharad Kumar, the officials Prasad, the cattle smuggling
upcoming cases. move ahead in the early part of 2019.
Additional Duty” on wider imports Source: World Trade Organization
said,withoutgivingdetails.The case in which a senior BSF offi-
Prime among these are the Trump Supreme Court had on October cer was caught with wands of
administration’s assault on India’s Amatteroftime 26 asked the CVC to complete cash. The Supreme Court
export promotion schemes including New Delhi is set to argue that the law 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
the flagship the Merchandise Exports invoked by the US — the Agreement 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
from India Scheme and Export- on Subsidies and Countervailing 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
Oriented Units Scheme. It had argued Measures (ASCM) — allows it a win- 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-
that New Delhi under-reports its farm dow of eight years to phase out these 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
subsidies, after which the Centre had subsidies, according to a senior trade 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-
raised the minimum support price department official. countries that may continue to provide ception that we will deny this. It’s just the CVC. sion of retired SC judge Justice
(MSP) for farm produce twice. Earlier Developed nations including the export subsidies temporarily until they that the economy needs time to adjust," OPINION The commission had A K Patnaik and this was a
thisyear,theUSTradeRepresentative US have long argued export subsidies 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 In comparison to that Euro 155 been no change on that front.”
New Delhi, 8 November million average cost per Rafale, the Stipulations in the 2007 RFP
the National Democratic Alliance impose several additional require-
The price per Rafale aircraft that the (NDA)government’sSeptember2016 ments on the vendor. The 126
government agreed in 2016 with purchaseof36Rafalefightersfor^7.8 Rafalefightersweretocompriseofsix
French company Dassault for 36 billion works out to ^217 million per independent squadrons of 18 fighters
fighters is 40 per cent higher than Rafale — exactly 40 per cent higher each and 18 additional reserve air-
what Dassault had offered in 2012, in than Dassault’s 2012 quote. craft to cater for losses. They were to
a global tender for 126 medium mul- It is not clear how the NDA gov- be based in three main operating
ti-role combat aircraft (MMRCA). ernment — including Defence bases, each housing one squadron.
Two senior defence ministry offi- Minister Nirmala Sitharaman and Appendix F of the RfP specifies:
cials who were directly involved in Finance Minister Arun Jaitley, “Each squadron would be required to
contract negotiations with Dassault backed by senior IAF officials — has operate two independent detach-
from 2012 onwards, have told claimed that the 36-Rafale contract ment of six aircraft for a period of 30
Business Standard that Dassault’s with Dassault in 2016 cost the IAF days at a time while continuing oper-
winning bid amounted to ^19.5 bil- nine-20 per cent less than Dassault’s ations from the parent base.” The bid
lion for 126 Rafale fighters. The ^19.5 126 Rafale offer. price is required to include the cost of
billion quote averaged out to ^155 These officials have argued that spare parts, ground handling equip-
million per aircraft. This included the ^7.8 billion cost of 36 Rafales ment and ground support equip-
the cost of 126 fighters, technology included add-ons like weaponry, The 2007 RFP requires vendors India and for other technologies from the pricing of the Sukhoi- ment needed for these operations.
transfer, indigenisation, India-spe- spare parts and logistic guarantees. to price seven specified aspects into specified in the RFP (M7). 30MKI. About five years ago, a Paragraph 45 of the RfP requires
cific enhancements, weaponry, However, the IAF’s 2007 tender for their bids. These are: (a) Direct acqui- Appendix F of the RFP man- Sukhoi-30MKI built in Russia would the vendor to “confirm his willing-
spares and maintenance guarantees. the MMRCA — termed “request for sition cost, or the cost of buying and dates that the “total cost of acquisi- cost below ~3 billion, while the same ness to provide the aircraft for field
At an exchange rate of ~65:14 to proposals” (RFP) — which Business building 126 Rafales along with tion” (M8), would be arrived at by built by HAL in Nashik would cost evaluation in India on ‘No Cost No
the Euro on January 30, 2012, when Standard has reviewed in weaponry(termedM1);(b) adding all seven aspects above — the IAF about ~4.50 billion – a 50 per Commitment’ basis.” Eventually, the
Dassault was declared the lowest bid- detail includes all these Cost of Total Technical i.e. M1 to M7. The vendor with the cent mark-up for indigenisation. six vendors ended up spending in
der, its price amounted to ~1,270 bil- enhancements in the Life (TTL) reserves, or the lowest “total cost of acquisition” Dassault’s Euro 19.5 billion quote the region of $50 million each on
lion, averaging almost exactly ~10 bil- 2012 price. spares needed over the would be declared L-1, and would remained valid at the time Prime fielding and marketing their aircraft.
lion per Rafale fighter, inclusive of The 2007 RFP stipu- Rafale’s service life of 40 be awarded the contract. Minister Narendra Modi announced Even so, the government eventu-
all the above additional aspects. lates that vendors must RAFALE years (M2); Cost of Infact,the differencebetweenthe in Paris on April 10, 2015 that he had ally cancelled the MMRCA tender
The MMRCA offer included 18
Rafales fully built in France, and 108
price in the “total cost of
DEAL reserves for ensuring
availability of 75 per cent
two bids is greater, since the 126
MMRCA bid involves building 108
requested President Francois
Hollande to supply 36 fully-built
ernment purchase of 36 Rafale fight-
fighters to be built in India by the purchase cost of the PART-1 of the fleet at all times fighters in India, which adds to the Rafale fighters in a government-to- ers on September 23, 2016. Now, the
Hindustan Aeronautics Ltd (HAL) “bare bones” aircraft, (M3); Cost of intermediate cost. In contrast, the 18 Rafales that government arrangement. In IAF is preparing a fresh RFP for 110
from kits supplied by French ven- specified enhancements, level periodic servicing were to be supplied in flyaway con- February 2015, at the Aero India 2015 medium fighters, in which the same
dors, Dassault, Thales and Snecma weaponry, spares, maintenance and (M4); Cost of depot level overhaul dition would cost significantly less. show in Bengaluru, Dassault chief vendors are expected to participate.
(renamed Safran Aircraft Engines in the cost of operating the aircraft for (M5);Operatingcostofthefleetfor40 While the price Dassault quoted Eric Trappier confirmed: “Our pric-
2016). Even HAL’s labour costs were 40years,including thecostoffuel,oil years (M6) and the cost of technolo- for the 18 fully built Rafales is not ing remains the same from Day One (Next:2007RFPincludesdetailedoffset
factored into this price. and lubricants. gy transfer for building the Rafale in known, an estimate can be obtained of L-I (lowest bidder). So there has andtechnologytransferclauses)

RBI circular may send 94%ofGSTrefundstoexporters

100 more firms to NCLT
Pending GST refund claims of ~54 bn being processed expeditiously: Ministry
ABHISHEK WAGHMARE GST: The input-tax credit that to tax authorities
Mumbai, 8 November NewDelhi,8November an exporter claims since by hand, which
exports are zero-rated, and makes the process

bout 80-100 stressed companies The finance ministry on the refund of Integrated GST tedious. Sahai
may soon be referred to the Thursday said that 93.8 per (IGST) to take back the tax said the value of
National Company Law Tribunal cent of GST refunds of paid on imports for the pur- refunds not set-
(NCLT), with the Reserve Bank of India exporters have been issued as pose of exports. tled because of
(RBI) making 100 per cent voting manda- on October end this year. The The ministry said about deficiency might
tory for any debt-restructuring proposal. statement came amid 93.27 per cent (~429.35 billion) not be high, but
“It’s not only the power companies exporters raising concerns of the total IGST refund the number of
that are facing the brunt of the RBI move, about their input tax credits. claims of ~460.32 billion exporters whose
but many other companies from telecom The ministry re-assured transmitted to customs from refunds are pend-
and allied industries. In many cases, a exporters for the second time GSTN as on October 31, 2018 ing is dispropor-
bank with less than 1 per cent vote at the in a month there is no let-up have already been disposed. tionately high.
committee meetings has stopped debt- in the sanction of GST The remaining claims “Small
resolution plans. The rest of the banks refunds. amounting to ~30.96 billion exporters are the
have no other option but to refer the com- It said in a statement that are held-up on account of var- worst-hit when it
pany to the NCLT,” said a lender. On the total GST refunds to the ious deficiencies, which have comes to unsettled
February 12, the RBI issued a circular, tune of ~827.75 billion have been communicated to states. refunds,” he added.
requiring banks to finalise a resolution been disposed by the Central exporters for remedial action. The respective GST GST officials said after the
plan in case of a default on large accounts
of ~20 billion and above within 180 days,
NCLT. This might impact returns for all
the banks,” he said, asking not to be RBI vs INDIA INC Board of Indirect Taxes and
Customs (CBIC) and the state
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
failing which insolvency proceedings will named as the matter was sub-judice. authorities of the total refund They said that the online the ~52.39 billion. Office (PAO) in the office of
have to be invoked against the defaulter. In September this year, the SC grant-
| Supreme Court to hear claims of ~881.75 billion process for claiming IGST Ajay Sahai, director gener- the controller of accounts is
An association of power producers ed a stay on all NCLT cases faced by petitions of companies from received so far. refunds is robust. However, al & CEO of the Federation of obligated to disburse the
has moved the Supreme Court against power companies, 34 of which appealed Tuesday “The pending GST refund when it comes to claiming the Indian Export Organisations refund to the beneficiary.
the central bank’s circular. The case will for cancelling the circular. claims amounting to ~54 bil- input-tax credit (ITC), (FIEO), also said, “The CBIC Some refunds get stuck at this
be heard from October 13. The SC has recently cleared a plan | 100% mandatory voting is lion are being expeditiously exporters expressed concerns. disposes the refund claims stage, they said.
Any order will also affect companies by three Gujarat-based power producers hitting debt-recasting plans processed so as to provide The ministry said orders they receive, but in case of While the sanction of
from sectors other than power, as the SC — Adani Power, Tata Power, and Essar relief to eligible exporters. have been issued for input tax ITC, many applications do not refunds pertains to those
has bunched all petitions against the RBI Power — to re-negotiate their power- | Banks taking 56% average Refund claims without any credit worth ~346.02 billion of reach the right authorities done by the CBIC, the actual
circular. purchase agreements, after lenders, haircut in the NCLT cases deficiency are being cleared the total claims of ~421.45 bil- due to deficiency in applica- refund amount disbursed by
Lenders and chief executive officer including State Bank of India, submitted expeditiously,” the ministry lion as on October end. tions.” the respective pay and
(CEO) of many stressed companies said, these projects had become unviable | Lenders/companies want said. Refunds worth ~1.59 billion Exporters claim that they account offices at the central
following the RBI circular, the Life because of a change in the Indonesian Supreme Court to reverse the There are two kinds of are pending with the Centre have to resort to printed appli- and state levels is not yet
Insurance Corporation (LIC), the Power coal export regulations. refunds when it comes to and ~21.46 billion with the cations and have to submit it available.
Finance Corporation (PFC) and the Rural During the hearing, the Indian
RBI order
Electrification Corporation (REC), as well lenders, who have filed debt-recovery | RBI’s February 12th circular
as public sector banks, are not consenting suits under the Insolvency and
hitting firms across the board
to any debt-restructuring plans.
A lender said, with 80-100 more com-
Bankruptcy Code (IBC) against 977
companies in the past two years, have | A total of 1,000 companies PE investment in Eye on divestment target,
panies likely to be referred to the NCLT, said three power projects — Coastal
facing NCLT proceedings NBFCs goes up
jobs and supply chains of many more will
be affected.
A CEO of a mid-sized company said
Gujarat Power, Adani Power Mundra
and Essar Power — should be revived
with some efforts by all stakeholders
88% this year govt to sell enemy shares,
they had to move the Supreme Court
(SC) after only one bank decided to vote
against its debt-sale plan, which was
and not be allowed to become insolvent.
Indian lenders’ track record with the
NCLT companies has not been good so
panies identified for resolution under
the IBC by the RBI in June 2017.
Chennai, 8 November
exit Dredging Corp
cleared by the rest of the lenders. far. According to the initial data, Indian Considering the offers received till now,
“This bank, with less than 5 per cent lenders will take a 56 per cent haircut on lenders would be able to recover only Private equity (PE) investments in India’s ARUP ROYCHOUDHURY said at a post-Cabinet media briefing.
vote, made sure we are referred to the loans worth ~2.65 trillion to the 12 com- ~1.15 trillion from bidders. non-banking financial companies NewDelhi,8November According to the statement, a total
(NBFCs) from the start of this calendar number of 65 million shares in 996 com-
year have reached a little over $2 billion In a bid to meet the Centre’s steep ~800- panies of 20,323 shareholders are under
(about~148billionatthecurrentexchange billion disinvestment target, the Union the custody of CEPI. Of these 996 com-
No heavy goods SMOGGY HANGOVER
rate). This is 88 per cent more than in the
full 12 months of 2017 and the highest in
Cabinet, on Thursday, approved selling
of ‘enemy shares’, currently with the
panies, 588 are active companies and
139 are listed on the exchanges. These
vehicle in Delhi four years.
This increase in overall investment
Custodian of Enemy Property for India
(CEPI), in 996 companies, and gave its
shares have been held by CEPI since
1968, Prasad said.
for three days value has been despite the number of
deals this year being lower than last year;
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
The entry of heavy and also, the NBFC sector has been facing a India (DCI) to a consortium of four to Pakistan.
medium goods vehicles into lack of liquidity. ports. The process for selling these shares
the national capital will be According to data from Venture The ‘enemy shares’ are valued at ~30 will be approved by an alternative
banned for three days begin- Intelligence, the NBFC sector has received billion at current rates, the government mechanism comprising Finance
ning 11 pm on Thursday, as a total of $2.04 billion in 25 PE investment said, while the Centre’s 73.47 stake in Minister Arun Jaitley, Home Minister
Delhi's air quality worsened deals so far this calendar year, compared DCI is valued at ~7.17 billion as on Rajnath Singh, and Minister of Road
to the “severe-plus emer- with $1.09 billion over 32 deals during all Wednesday’s closing date. Given the Transport and Highways Nitin Gadkari.
gency” category, or 11 times of 2017. Among the biggest such was the government’s past history with acquisi- The alternative mechanism will be
the permissible limit. $1,062-million KKR-GIC investment in tions within the public sector compa- supported by a panel of officials co-
Joint Commissioner HDFC in January. Besides, two major nies’ space, the consortium of chaired by the secretary, Dipam and
(Traffic) of Police Alok Kumar deals were announced last week — a TPG Visakhapatnam Port Trust, Jawaharlal home secretary, and representatives
said adequate police person- Growth-led $42-mn (~3 billion) equity Nehru Port Trust, Kandla Port Trust, from other department, and will give
nel have been deployed at investment in Ess Kay Fincorp, and a ~2- and Paradip Port Trust is likely to its recommendations with regard to
border entry points to billion investment by Norwest Venture acquire the Centre’s stake in DCI at a quantum, price band, and mechanisms
enforce the ban. Vehicles Partners X, CDC Group, UK’s premium. for sale of shares.
headed for other destinations Development Finance Institution and P “In principle approval has been “Before initiation of sale of any ene-
are being asked to take the Surendra Pai in Chennai-based Veritas accorded for sale of enemy shares under my shares, CEPI shall certify that the
Eastern Peripheral Finance. the custody of Ministry of Home sale of the enemy shares is not in con-
Expressway, Kumar said. The Experts say you could see more deals Affairs/CEPI, as per sub-section 1 of travention of any judgment, decree or
Supreme Court-appointed being announced in the coming months, Section 8A of the Enemy Property Act, order of any court, tribunal or other
Environment Pollution Con- Rajpath, New Delhi, on Thursday. Officials said Delhi recorded its worst air quality of the as many funds believe is it an opportune 1968,” said an official government state- authority or any law for the time being
trol Authority said it was year the morning after Diwali as the pollution level entered ‘severe-plus emergency’ time to acquire portfolios and assets at ment. in force and can be disposed off by the
monitoring the situation and category as citizens fired away on SC order. Stubble burning impact, by contrast, was reasonable valuation. These funds are The shares will be sold by the government,” the statement said, and
will take emergency steps if minimal. Experts have advised people to avoid too much of physical activity outdoors, and also bullish on the long-term scope and Department of Investment and Public added that Dipam will appoint mer-
pollution rises. The steps shut windows and to frequently wet-mop floors in place of vacuum cleaning or dusting prospects of the NBFC sector. Asset Management (Dipam) and count chant bankers, legal advisors, and oth-
include odd-even rationing PHOTO:DALIP KUMAR towards disinvestment proceeds for the ers for the process of disposing enemy
of private vehicles. PTI More on year, Law Minister Ravi Shankar Prasad shares.

HEESU LEE & DEBJIT CHAKRABORTY 300,000 barrels a day (condensate) in Iran's crude oil exports to India
8 November 2017. While the Asian country was the
third-biggest importer of Iranian oil, it ‘000 barrels per day
India opens Padur
Armed with waivers to keep importing was the first major buyer to cut 800 strategic reserves for
Iranian oil without running afoul of US
sanctions, some of the Islamic
purchases to zero as the US prepared to
impose sanctions. It’s now allowed to
600 foreign oil firms
Republic’s top customers are preparing buy as much as 200,000 barrels a day, 400 After Abu Dhabi National Oil
to buy. though actual imports may 462.4 354.8 Corporation (Adnoc) started storing
The exemptions mean at not be that high. 200 crude oil at Mangaluru strategic
India was one of Jan 31,’17 Sep 31,’18
least some supplies from the most vocal Purchases must be reserves recently, the Union Cabinet on
OPEC’s third-biggest negotiators for limited to cargoes of S Korea's Iran condensate imports to Thursday approved the filling of Padur
producer will keep flowing an exemption... condensate, a type of ultra- strategic petroleum reserves (SPRs) in
into international markets, light oil that’s critical for
be kept below 200,000 b/d (in ‘000) Karnataka too by overseas national oil
as the govt faced
after its exports plunged protests over South Korea because many of 405 500 companies. The SPR facility at Padur is
almost 40 per cent since rising fuel costs the nation’s plants are geared 400 an underground rock cavern with a
April —the month before before national to process it. The country 300 capacity of 2.5 million tonnes (mt)
Washington announced the
curbs. In a bid to keep
elections bought about 300,000
barrels a day of South Pars
having four compartments of 0.625 mt
each. The filling of the SPR under
Some Asian buyers had halted Iranian oil imports ahead of US deadline (‘000 barrels/day)
customers, the state-run condensate from Iran in 2017. China India Japan 0 public private partnership model is
National Iranian Oil Co. has been The government is said to be in Jan 31,’17 Sep 31,’18 being undertaken to reduce budgetary
offering record discounts on its crude. discussion with companies to decide 806.5 787.1 Iran'sshareofTaiwan'stotaloil support of Government of India.
Almost all major buyers of Iran’s oil how to split the import volume. They’ll 633.3 706.7 645.2
had negotiated with the US for the maintain a won-based payment system
500.0 488.3
waivers, arguing that cutting purchases with Iran, making deposits into local 408.1 18 20
to zero would affect their energy escrow accounts in Industrial Bank of 333.0 15 now that it’s one of the eight recipients
industries and boost fuel costs. US Korea and Woori Bank. The money 144.4 150.5 161.3 2 of exemptions, Minister of Economy,
Secretary of State Michael Pompeo has won’t directly go to Iran, which can only
10 Trade and Industry Hiroshige Seko told
22.2 0.0
defended the exemptions and said the use it to buy food, medicine or other 5 reporters on Tuesday.
Trump administration’s campaign to non-sanctioned goods from its Jun ‘18 Jul ‘18 Aug ‘18 Sep ‘18 Oct ‘18 0 While JXTG Holdings Inc., the
pressure Iran has already reduced customers. 2003 2018 country’s biggest refiner, echoed that
exports by over 1 million barrels a day view, it’s still considering whether to
and they’ll continue to shrink. India 560,000 barrels this year, and almost The biggest buyer of Iran’s crude is into effect. That decision preceded an resume purchases from the Persian Gulf
A summary of plans by some of Iran’s Waiver: Up to 300,000 b/d purchases 450,000 barrels in 2017, shipping data allowed to import 360,000 barrels a day upcoming meeting between President state, according to Senior Vice President
biggest oil customers and what they before sanctions: 560,000 b/d in Jan- compiled by Bloomberg show. under the exemptions, according to Xi Jinping and US counterpart Donald Yasushi Onoda.
may buy under the waivers is set out October 2018. Indian refiners are expected to buy people with knowledge of the matter. Trump and coincided with flaring trade If the company decides to import, oil
below. This story will be updated as new India was one of the most vocal about 9 million barrels of oil for loading That doesn’t include oil produced by tensions between the countries. will arrive in Japan as early as January,
information becomes available. The negotiators for an exemption from the in November from Iran. They too will projects in the Islamic Republic in Chinese ship owners had also stopped after it makes nominations in
exemptions have been granted for 180 US, as the government faced protests make payments into a local escrow which Chinese companies have equity. hauling Iranian oil. December or the following month, he
days, and will be reviewed toward the over rising fuel costs before national account for the crude supply. While China had bought about said. Japanese processors halted
end of the period. elections next year. 658,000 barrels a day over the first nine Japan purchases of Iranian crude in October
Under the exemptions, it will be China months of this year, the government Waiver: TBC purchases before under US pressure. The Asian nation cut
South Korea allowed to import as much as 300,000 Waiver: 360,000 b/d purchases before was said to have told at least two state oil sanctions: About 160,000 b/d in Jan.- shipments in order to get the waiver,
Waiver: Up to 200,000 barrels a day of barrels a day. That’s under Iran’s average sanctions: 658,000 b/d in January- companies to avoid purchasing the Sept. 2018. The nation’s refiners are Finance Minister Taro Aso said on
condensate Purchases before sanctions: daily exports to the nation of about September 2018. producer’s oil before the sanctions went likely to restart imports of Iranian oil Tuesday. BLOOMBERG


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
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

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
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,
Matthew Whitaker, as acting attorney gen-
eral and said he would nominate someone US President blames White House Tesla Director Denholm to
for the job soon. Trump’s move prompted
sharp criticism from Democrats, who said media, Republicans suspends CNN replace Musk as board chair
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.

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

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,”
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
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.

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

6 airports get
without a bottle of water beside which you had access to com- is not easily accessible, so that “If the terms and conditions of the He also dismissed those who criti-
my bed. puters and you could program, there is “activation energy” sale are simple and attractive, there will The finance minister also said the GST cised demonetisation as “ill-informed”
Other houses had refriger- it was a big deal to me. I was so 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
ators, and then we finally got
one. It was a big deal. But I had
wrapped up in that, that to
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
a lot of time to read. I was pro-
cessing a lot. I read whatever I
there was a much bigger shift
happening with the internet.
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
note ban, he said.
“Getting it into the formal econo-

Green shoots of
could get my hands on. I read Ethereum and earning money. “The bid is likely to attract a good Tax rates — both direct and indi- my and making the holders pay tax was
Dickens. Friends, playing YoustartedatGoogle14years He’s getting some insight into response from global operators since rect — have been cut, he said, citing the broader objective. The system
street cricket, reading books how the world works, how all six airports are growing fast, with the example of 334 commodities on required to be shaken up in order to
liquidity for NBFCs
— that was kind of the totality samecompanyyoujoined? commerce works. robust catchment areas and low uncer- which the pre-GST effective levy was 31 make India move from cash to digital
of life. But you never felt lack- When I first joined Google I was Every generation is worried tainties. The concession fee is likely to per cent. Jaitley said the formalisation transactions. This would obviously
ing for anything. struck by the fact that it was a
very idealistic, optimistic place.
about the new technology, and
feels like this time it’s differ-
be higher than the limited profits being
earned by the AAI currently because
in commercial of the economy had prompted the gov-
ernment to earmark more resources
have an impact on higher tax revenue
and a higher tax base,” Jaitley said.
I still see that idealism and opti-
ent. Our parents worried about
Elvis Presley’s influence on
of many administrative restrictions.
This can be used for airport develop-
paper market for the welfare and infrastructure
Economic Affairs Secretary
Subhash Chandra Garg said demoneti-
It was the first time I had ever today.Buttheworldisdifferent. kids. So, I’m always asking the ment in the interiors,” said Amber “Liquidity for NBFCs is comfortable. In FY18, 68.6 million tax returns sation and the GST reflect the long-
been on a plane. I always want- Maybe there’s more realism of question, “Why would it be Dubey, head of aerospace and defence While they are covered for their cur- were filed — an increase of 25 per cent term vision of the government and its
ed to be in the Valley. I kind of how hard some things are. any different this time?” at consultancy firm KPMG. rent repayment cycle, any fresh fund- over the previous year. ability to undertake massive structural
knew that’s where everything We’vehadmorefailures,too.But Having said that, I do In order to handle the rush in the ing remains a challenge. So their busi- As of October 31 this year, 59.9 mil- reforms.
happened. I remember landing there’s always been a strong realise the change that’s hap- Indian skies, the government has ness expansion rate may slow,” said lion tax returns have been filed — an “Tax filers under both direct and
in California, and I stayed with streak of idealism in the com- pening now is much faster announced a plan to start a massive Mahendra Jajoo, head (fixed income), increase of 54.33 per cent over the pre- indirect taxes are close to getting dou-
a host family for about a week. pany, and you still see it today. than ever before. My son still airport-building and upgrade project. Mirae AMC. vious year. About 8.6 million new tax- bled. Digital payments have risen
I was in the car going from the doesn’t have a phone. This would entail a total expenditure Besides difficulties in getting fund- payers were added this year. sharply and become commonplace.
airport, and was like, “Wow, it’s What’syourapproachto ©2018 The New York Times New Service of about ~2 trillion over the next 10 ing for fresh business, experts are keep- When the Prime Minister Narendra Fake notes are out,” Garg tweeted.

Sniff?Yes.Paws?No. 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
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-

The RBI isn’t inviolate. But the government must remember a maxim: disingenuous arguments about the turing schemes have been eliminated;
Bharatiya Janata Pariwar
reserves being greater than warranted. instead, the stressed accounts, where
“Nose in, paws out”. Ask questions; critique; but hands off the till The red line is this: Such reserves are so deemed, must be sent for resolution Bharatiya Janata Party (BJP) has time and
not for the government to pocket when under the Insolvency and Bankruptcy again blamed the Congress party and the
where he pointedly demonstrated the interest’ it ought to fork out ~3.6 trillion its exchequer faces threat. Period. Code. Defaulting companies hate such Gandhi family for foisting dynastic
pitfalls of government interference in to the exchequer. This year, the central The RBI must also stand firm on two toughness. So do banks because rolling politics on the nation. But in Madhya
the finances and decision-making inde- government is in a fiscal hole. Cutting other issues. First, there can’t be any loans gather no loss. No surprise, there- Pradesh, the party might find it difficult
pendence of central banks. The RBI gov- excise on petroleum products to damp- dilution whatsoever on the Prompt fore, that defaulting companies and to follow the same strategy given the
ernor has now called the next central en fuel price hikes has exacted a big toll; Corrective Action (PCA) framework that banks have been complaining to the number of senior leaders fighting to
board meeting on November 19 to deal tax buoyancy is less than estimated; and was unveiled on April 13, 2018, which powers that be. Given funding needs for secure tickets for their kin. Till now, the
with various unresolved issues. Every disinvestment proceeds might fall short constrains the operations of 11 weak the 2019 elections, such complaints party has announced 225 candidates who
economic and financial commentator of the target. The government needs to public sector banks riddled with bad have become more significant. would run for the coming Assembly
tensely awaits its outcome. demonstrate its fiscal prudence as well loans. These are, in increasing order of There are a couple of issues where elections; of that, at least 42 are sons,
Make no mistake about this: The core as to fund some extra handouts before feebleness, Corporation Bank, the RBI can accommodate the govern- wives or close relatives of senior BJP
issue is that the MoF wants to dip into the general election. Where better to get Allahabad Bank, Bank of India, Oriental ment. These relate to higher credit flows leaders. In other words, every fifth
OMKAR GOSWAMI the RBI’s reserves to pocket ~3.6 trillion the funds from than the RBI’s coffers? Bank, United Bank, Dena Bank, Bank for medium and small enterprises that candidate in the state is a relative of a
— and has utilised the never-used sec- On this, the RBI shouldn’t budge an of Maharashtra, UCO Bank, Central are genuinely suffering from the want of BJP leader. Former chief minister Babulal

n the past, there have been some tion 7(1) of the RBI Act to make this inch. For one, if the government can’t Bank of India, IDBI Bank and Indian working capital; and easing the credit Gaur's daughter-in-law Krishna Gaur
contentious meetings of the central claim. Here are some facts. From 2013-14, meet its deficit targets, so be it. It can’t Overseas Bank. flow from banks to non-banking finan- and party general secretary Kailash
board of the Reserve Bank of India the RBI has been transferring its entire march to the RBI and say, “Hand over As on March 31, 2017, their ratio of cial companies. But on walking off with Vijayvargiya's son Akash Vijayvargiya are
(RBI), but none as acrimoniously incon- annual surplus of income over expen- your reserves. It’s mine.” For another, gross non-performing loan assets the reserves, easing PCA and early among the latest to get tickets. And guess
clusive as the one on October 23, 2018. diture to the central government. These these reserves have been accumulated (NPAs) to gross advances ranged from recognition of stressed assets, there what, Congress leaders are not letting
There were major differences of opinion amounts are huge: ~500 billion in 2017- over the years from seigniorage income 11.7 per cent to 22.4 per cent. The situa- should be no ‘give’ whatsoever. that opportunity pass them by. They have
between the RBI brass plus some of its 18, ~306.5 billion in 2016-17, more than (the difference between the value of new tion is worse today. Acutely hyperten- Some of these issues can be resolved already started calling the BJP the
nominee directors and the trio of ~658 billion each year in 2014-15 and notes printed by the RBI and the costs of sive diabetic patients must be under if the actors learn how to quietly com- Bharatiya Janata ”Pariwar”.
Subhash Garg and Rajiv Kumar from 2015-16, and almost ~527 billion in 2013- printing and distribution) and interest tight control. They can’t be given extra municate, not gesticulate. And it will
the Ministry of Finance (MoF) and S 14. The smaller transfer in 2016-17 was paid by the government to the RBI on the doses of glucose. So too these banks. do for this government to follow a sim-
Gurumurthy, a chartered accountant due to huge additional costs incurred latter’s holdings of government securi- They have to turn around before ple maxim: “Nose in, paws out”. Ask Growing importance
better known as a convenor of the because of demonetisation, the govern- ties. These are kept to fight contingen- demanding relaxation. questions; critique when required; but
Swadeshi Jagaran Manch. ment’s economic idea par excellence. cies. There are many: Sudden currency The second is the RBI’s notification keep your hands off the till.
Matters worsened with Deputy Not satisfied, the MoF believes that fluctuations, decline in the rupee value of February 12, 2018 on early recognition
Governor Viral Acharya’s AD Shroff the RBI has no reason to have ~10.46 of gold, depreciation in the value of the of stressed assets. Today, banks have to The author is an economist and chairman of
Memorial Lecture on October 26, 2018 trillion of reserves, and ‘under public RBI’s holdings of government bonds, inform the RBI on a weekly basis which CERG Advisory Private Ltd

Darjeeling in 1905
The two most important factors in the development of Darjeeling have been the choice of the district for a health resort
The candidature of Sanjay Singh
and the subsequent planting of tea in the hills Masani, brother-in law of Madhya
Pradesh Chief Minister Shivraj Singh
days in February 1829, and “was imme- ways…It is confessedly difficult for an Chouhan, from the Waraseoni
diately struck with its being well adapt- Indian to learn any trade but that of his (Balaghat) seat has started to bother
ed for the purpose of a sanitarium.”… forefathers.” leaders of his former party. Bharatiya
On all grounds, he strongly urged the “At one time, optimistic hopes were Janata Party leader and state
importance of securing possession of entertained that a large European agriculture minister Gaurishankar
the place, and, in particular, pointed out colony would be established in the dis- Bisen, who had earlier said that
its advantages as a centre which would trict. Brian Houghton Hodgson looked Masani was a political lightweight, has
engross all the trade of the country, and forward not only to the rearing of sub- now announced he would campaign
as a position of great strategical impor- tropical products under European against Masani. “As long as the CM’s
tance, commanding the entrance into supervision, but also to agricultural set- brother-in-law was in the party, he
Nepal and Bhutan... General Lloyd was, tlements by the British race; and he had some standing but not any
INFRA DIG accordingly, directed to open negotia-
tions with the Raja of Sikkim, on the
hopefully pointed out that with “the
backing of fifty to one hundred thou-
longer,” said Bisen, an MLA from
Balaghat. The change of stance might
BIBEK DEBROY first convenient occasion, for the ces- sand loyal hearts and stalwart bodies of have something to do with the
sion of Darjeeling in return for an equiv- Saxon mould, our empire in India might importance the Congress has attached

n 1905, there was a district gazetteer alent in money or land.” This happened safely defy the world in arms against it.” to Masani's switch from day one.
for Darjeeling. “The history of in 1835. “This was an unconditional ces- This expectation has not been fulfilled, Masani had joined the Congress in the
Darjeeling presents a late chapter sation of what was then a worthless nor is it likely that the European farmer presence of PCC chief Kamal Nath and
in the extension of British rule, for it uninhabited mountain; but in 1841 the Darjeeling’s most famous landmark, the Capitol Clock Tower. The British colonial will ever be able to compete with the campaign committee chief Jyotiraditya
was not until the beginning of the 19th Government granted the Raja an administration had left behind many historical landmarks and heritage buildings cheap labour of the hillmen in rearing Scindia in Bhopal on Saturday.
century that the East India Company allowance of ~3,000 as compensation, including churches, parks, schools etc country crops. Similar failure met the
was brought into direct relations with and raised the grant to ~6,000 in 1846.” early attempts of the Moravian mis-
the tract of country which now bears However, “the Sikkim Raja had prohib- dition of 1860 and the Bhutanese war become a source of strength to British sionaries to maintain themselves by
the name. It then formed part of the ited his subjects from going to the year before had shown to be vitally rule and of usefulness to India... The industrial labour, and in the end a few of What's in a spelling
dominions of the Raja of Sikkim, a pet- Darjeeling and helping in establishing essential... The construction of the two most important factors in the them turned tea-planters and secured Using artistic licence, an oft-used
ty ruler who had long been engaged in the new settlement; and various expe- Darjeeling Cart Road, that wonderful development of the district have been some of the best land in the district.” Shakespearean quote might be
an unsuccessful struggle against the dients were proposed to repopulate the example of engineering work which the choice of Darjeeling for a health When this gazetteer was written, there changed to, “What's in a spelling... as
growing power of the warlike Gurkhas... country, that is, to invite the Lepcha subsequently made the alignment of a resort and the subsequent planting of were actually 1,309 Europeans and 329 long as the pronunciation is the
The intervention of the British was thus refugees to return, to import labourers railway so comparatively easy, was tea in the hills.” Eurasians in the district. “The only oth- same”. A Facebook post on
successful in preventing the Gurkhas from the indigo concerns in Rangpur accordingly begun in 1861…From this “There has been a similar absence in er (other than Darjeeling and Kurseong) demonetisation by Finance Minister
from turning the whole of Sikkim and and Ramgarh (that is, Gaya and time dates the first attempt to make the improvement in the industries followed places of any importance are Siliguri Arun Jaitley was released verbatim
the hills west and south of the Tista into Hazaribagh), or to procure settlers from hills the home of European education by the natives…The tools and imple- and Kalimpong, the former being a vil- through a prepared note by the Press
an outlying province of Nepal; and Nepal and Bhutan.” in India. For some years Bishop Cotton ments in universal use are very much lage of some 784 souls in the Tarai, and Information Bureau. The only
Sikkim, including the present district We move to some years later. “The had been advocating the establishment what they have been for centuries past; the latter having a population over 1,000 difference was, instead of
of Darjeeling, was retained as a buffer year 1866 may be taken as marking an of hill schools for Europeans, and his the old wooden plough and a little inhabitants. The former is a swampy “demonetisation”, the note called the
state between Nepal and Bhutan.” epoch in the history of Darjeeling. efforts were supported by Lord Canning kodali, the primitive spade of their fore- malarious village close to the episode “demonitisation”. The FM
This takes us to the next step. “From Peace was established within its bor- who pointed out in a celebrated minute fathers, have been handed down to the foot of hills, but Kalimpong is hailed “demonitisation” for increasing
a report dated the 18th June 1829, in ders; and thenceforth began the march how the domiciled English and present generation practically charmingly situated.” digitalisation, tax collections and the
which he claims to have been the only of progress and civilization. Rapid Eurasians would, if neglected, become unchanged. In spite of the fact that the tax base to give more resources to the
European who ever visited the place, progress was now at last made in the profitless, unmanageable, and a glar- planters have shown how an improved The author is chairman, Economic Advisory government to spend on the poor and
we learn that Lloyd visited “the old development of the communications ing reproach to the Government, while, tool produces improved work, the Council to the Prime Minister. on infrastructure.
Goorka station called Dorjeling” for six of the district, which the Sikkim expe- if properly cared for, they might native impassively holds to his old Views are personal


We’re running out of road Autonomous vehicles could, in theo-

ry, increase road capacity by using short-
er stopping distances than would be safe
Enough is enough firm to protect its interest. All-out effort
should be made to frame strong opinions
That’s why sitting in bumper-to-bumper traffic is becoming more of a with human drivers. But for the moment Apropos “Labour statistics disappoint in amongtheaffectedcountriessuchasChina,
such technology remains science fiction, October”(November 5). This is a matter of SouthKoreaandJapanandputpressureon
headache, especially in emerging countries especially in the complex, dynamic great concern that the unemployment the US to extend the waiver.
streetscapes of emerging-world cities rate in India is increasing day by day. P S Mukhopadhyay Nagpur
DAVID FICKLING crowded with scooters, hawkers, pedes- According to the Centre for Monitoring
trians, tuk-tuks and livestock. Indian Economy data, it rose to 6.9 per Overhaul needed

hink traffic is bad in New York The solution that’s likely to be the cent in October that is the highest in two
or London? They ain’t got noth- most effective in the long term is also years. The labour participation rate fell This refers to the editorial “Be ready for
ing on Jakarta and Chongqing. the most drastic: An expansion of pub- sharply to 42.4 per cent, which is the low- volatility” (November 8). The persisting
The top of TomTom NV’s ranking lic transport — in particular metro and est since January 2016. The count of the negative sentiments are driving away
of the world’s most congested places is suburban rail networks that remove unemployed persons actively looking for investors from the market resulting in a
dominated by emerging markets. traffic from roads altogether. jobs almost doubled to 29.5 million in sizable outflow of capital and finally lead-
Among cities in rich countries, only Luckily, that’s already underway. October 2018, while October to December ing to a drastic erosion in the market cap-
Los Angeles makes it into the top 15. The world will add about the same is traditionally the job creation period italisation of the India Inc. The govern-
Some of the world’s worst traffic length of metro-rail tracks in the 10 across all sectors in the Indian economy. ment has to look for immediate
snarls are in South Asian cities not years through 2022 as it built in the pre- The government is indulged in making resolution of the disturbing factors.
even picked up by TomTom’s rank- vious 150 years since the opening of statues and changing the names of cities. Further, the government and the banking
ing, such as Dhaka, Delhi and Karachi. London’s Metropolitan Railway in 1863. People are now disillusioned by the fake regulator must function in sync to engage
Their problems are only likely to get China’s metro systems have expanded promises of the government. in the resolution of disturbing issues to
worse as growing populations and ris- at breakneck speed this century, and Q B Malik New Delhi regain the faith of investors.
ing incomes push already-straining Some of the world’s worst traffic snarls are in South Asian cities. Their India is gradually catching up. Even The government must bestow more
transport networks to the limit. problems are only likely to get worse as growing populations and rising laggards like Dhaka, Jakarta, Lahore Take a stand attention to enhancing the earnings of
In emerging economies, many cities incomes push already-straining transport networks to the limit and Lagos are finally building dedicat- the farmers. Swift execution of reforms is
have reached the point where roads’ ed commuter-rail networks. It’s unlike- The editorial “Dealing with Iran” needed to boost cash flow in India Inc. All
carrying capacity is running out. There be motorbikes and scooters, which Alternatively you can limit car num- ly to be enough, though. (November 6) is fabulous. The US these would boost investor confidence.
are about 40 registered vehicles for take up less space than passenger cars. bers by mandating special permits for Take Beijing. If any city should be announcement to temporarily waive eight VSK Pillai Vishakham
every kilometer of road in the US, Both those mitigating issues are less car ownership and using auctions or able to meet the demands of transport- countriesincludingIndiafromsanctionsis
France, Russia and Brazil, based on helpful than they look. For one thing, as lotteries to allocate a fixed quota. First ing a fast-growing urban population, not only a great relief but also provides a
analysis of World Health Organization incomes rise, vehicle ownership does, established in the 1990s by Singapore, it’s the showpiece capital of the most chance to get over the financial crisis it is
Letters can be mailed, faxed or e-mailed to:
and Central Intelligence Agency data. too. For another, two-wheelers still these systems have since spread to more ambitious infrastructure-developer the undergoing. The further increase in crude The Editor, Business Standard
That compares with Iran, Thailand, require surrounding space to avoid col- than half a dozen Chinese cities, includ- world has ever seen. And yet the city is oil will put the share markets down and Nehru House, 4 Bahadur Shah Zafar Marg
Vietnam and Indonesia, which are all lisions. Scooters and motorbikes on the ing Beijing, Shanghai, Guangzhou, still bursting at the seams, despite road- also increase commodity prices causing New Delhi 110 002
north of 200 vehicles per kilometer. It’s move take up about half the space of a Shenzhen, and even the comparatively space rationing; vehicle quotas; a brand- distress to the common man. India should Fax: (011) 23720201 · E-mail:
hardly an accident that the traffic jams car. That, alongside the exhaust fumes sleepy outpost of Guiyang. new metro system that carries more not succumb to the US pressure and stand All letters must have a postal address and telephone
in Tehran, Bangkok, Ho Chi Minh City they spew, helps explain the motorbike Then there are more free-market passengers than New York and London
and Jakarta have become so legendary. bans already implemented in parts of solutions that have attracted the most put together; and longstanding hukou
Two factors have made this just Jakarta and Manila and planned for the investment dollars and interest in restrictions on residency. > HAMBONE BY MIKE FLANAGAN
about manageable, for the time being. entire city of Hanoi by 2030. recent years — ride-sharing and The city governments elsewhere in
First, fewer people own vehicles in One way of stemming this flood has autonomous driving. These aren’t the developing world will find it a lot
poorer places: There are just 13 regis- been restricting vehicle usage. Road- likely to make a decisive difference. harder to accommodate their swelling
trations per 1,000 people in space rationing programmes, which ban Studies of ride-hailing services such as populations without grinding to a halt.
Bangladesh, 30 in Nigeria, and 44 in driving for some cars on particular days, Uber and Lyft suggest they may If you want a vision of the future, imag-
Pakistan, compared with more than have been implemented in cities from encourage some people to give up on ine a boot idling on a brake pedal while
500 in most wealthy countries. And Manila and Mexico City to Bogota and owning their own vehicles — but they stuck in traffic — forever.
when people in low-income regions Beijing. London charges for entry into also tempt riders away from higher-
do get their first vehicle, they tend to thecentralcity,whichhasasimilareffect. capacity public transport modes. © 2018 Bloomberg



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

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

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.

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

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

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

Weighing up rationalism riage and offspring falls neither here

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
time. In it, Dabholkar charts the growth 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-
of the Andhashraddha Nirmoolan ic instances of superstition to speak the answer to every question. gender discrimination given that doxy is desirable. But it is equally
Samiti (ANiS), the organisation he 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-
founded in 1989 to spread his message 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,
throughout Maharashtra (he was a need for a social revolu- reason can, say, quench It would have been interesting to in our race for egalitarianism.
native of Pune). tion, one that should our thirst for the sublime hear Dabholkar’s views on the matter. Dabholkar’s death, and of other
BOOK REVIEW Dabholkar’s aim in writing the book 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
was twofold: One, to enumerate the var- 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
VIKRAM JOHRI ious ways in which superstition affects many troubles that afflict was an unmitigated and potential. that is as problematic as superstition in movement against superstition, it also
the life of the common man. In this 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

arendra Dabholkar was a regard, the book is chock-full of exam- 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
Maharashtra-based doctor and ples of superstitious behaviour that the string of superstitions against superstition, it tendency to paint all ritu- voice to? extreme voices. While his murderers
anti-superstition activist who ANiS activists uncovered as well as the 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
achieved national fame when he was actions they took to get people to see While Dabholkar’s chance for greater reactionary ignorance. He tion for a rationalist. If he were to stand argument, The Case for Reason reiter-
gunned down by unidentified assailants their viewpoint. 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
in 2013. His killing, along with those of A lot of the examples Dabholkar 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.
Govind Pansare and MM Kalburgi, quotes are instantly recognisable. broader argument fails to extreme voices Ahmednagar shrine that tively arguing that God, or a God, is an
alerted authorities to the grave threat Bhanamati (black magic) and buvabaji convince. He presents restricted entry of women entity whose nature can be in conflict
faced by rationalists, an umbrella term (playing God) are common occurrences gullibility — a despicable trait in his to the sanctum sanctorum until a with the demands of His devotees, and
Understanding the Anti-Superstition
for those working to promote a spirit of in our land. ANiS activists challenged view — as a direct consequence of Bombay High Court order overturned that it is up to modernists and rational-
scientific inquiry. such practitioners to open debate, or if Indians’ fatalism, which in turn, stems the practice in 2016. ists to choose one over the other. But Movement
The book under review was written that were not possible, to perform their 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)
by Dabholkar in Marathi and is available miracles before them. Little wonder edgement that people are superstitious based on nebulous notions of “energy” creed of a non-existent God. Westland
in an English translation for the first these charlatans were exposed. 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

Commercial property is costlier, Do nothing –

just pay fees
but delivers better returns The current fall in the markets
has been a godsend for profes-
sional investment advisers.
Let me give you the many rea-
Investors can earn a steady 7-9 per cent PROS AND CONS OF
sons why. As required, we
always assess the risk-taking
rental yield in this segment, compared to INVESTING AT DIFFERENT ability of our clients and docu-
only 2-3 per cent in residential STAGES
ment our findings. We also ask
our clients to fill up a risk-pro-
| An investor who buys at the filing questionnaire.
SANJAY KUMAR SINGH says Abhinav Joshi, head of research, Sometimes, the risk profile
CBRE India.
under-construction stage will thrown up is lower or higher
enjoy higher capital FRANKLY
ith the residential segment Many corporates are currently than what we have assessed,
of the property market lan-
guishing, many high net
reviewing their real estate strategies.
“They are relocating and consolidat-
appreciation once the
building gets completed
SPEAKING based on our interactions. In
such cases, we almost always
worth individuals (HNIs) are now ing and taking up larger spaces to | However, such an investor also HARSH ROONGTA follow our personal assess-
making a beeline for commercial hedge against increases in rentals in ment (rather than the statistical
buildings that have the potential to the future, due to which this segment
faces the risk of delays in risk profile thrown up by the questionnaire), after properly
offer them steady rental returns has seen significant price apprecia- completion documenting the variance.
along with reasonable capital appre- tion,” says Arpit Mehrotra, senior | Buying at the second stage – a Here’s an example. I had assessed this middle-class
ciation. By opting for completed and director, office services (Bengaluru completed building that is not retired client as a low-risk taker. But he was urging me to
leased buildings, these savvy & Hyderabad), Colliers International leased out – helps to avoid invest his monies in pure equity funds, as he did not require
investors are avoiding development
risk - the risk of delay in delivery -
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
that has marred returns in the resi- More attractive than PROPERTY IN LEADING CITIES | However, there is lower capital capable of bearing it. He already had a substantial equity
dential segment. residential: Investors who entered City Location Area (~/sq ft) appreciation portfolio that he had built up over the years. I was reluctant
the residential segment in 2013-14 NCR Gurgaon 8,000-25,000 to invest more in equity and suggested long-term gilt funds
Robust demand: While the resi- have seen negligible capital appreci- | The key risk at the second stage instead as interest rates were expected to fall in the coming
dential space has languished, ation, while older investors have even NCR Noida 6,500-20,000 is delay in finding quality quarters and gilt did not carry any credit risk. I had hoped
demand for office space has been suffered some capital erosion. Mumbai BKC 34,000-38,000 tenants the interest rate movements would benefit him. Even the
strong during the past four years. “Project delays, especially in areas Mumbai Andheri-Kurla Road 15,000-18,000 | The safest bet is to invest in a mutual fund house described the scheme as moderately
This year, about 33 million square like the National Capital Region low risk. I told him that these invest-
Bangalore Outer Ring Road 7,000-12,000 building that is ready and
feet of grade-A space has already (NCR), have affected the returns that ments could give him a fixed deposit It’s better to sit
been leased between January and investors expected to earn from the Bangalore Peripheral East 5,000-6,500 leased out as cash flows begin plus/minus 2-3 per cent return, but out when
September across the country’s top residential sector,” says Joshi. For Chennai Suburban South (pre Toll OMR) 7,500-8,500 from day one his post-tax return would be good markets turn
eight cities. This is a rise of 15 per those wanting a regular income, the Chennai Peripheral South (Post Toll OMR) 5,000-6,500 | But a pre-leased building since he needed the money only after volatile rather
cent over the corresponding period residential sector is not attractive as comes with tenant-related many years. than rush to
last year, according to Cushman & yields are low at 2-3 per cent. On the Pune SBD East 9,500-12,000 I also warned him that if interest withdraw your
Pune SBD West 12,000-15,000 restrictions
Wakefield India. “Office space take- other hand, by investing in a pre- rates move higher, he could see a investments
up is being driven by growth in out- leased office property, investors can Hyderabad Madhapur 9,000-11,000 | The contracts have been temporary drop in the value of his
sourcing (IT-ITeS) and services sec- expect to earn a rental yield of 6.5-8
Hyderabad Gachibowli 7,500-9,000 signed with the tenants and investments. But it would recover over time. Initially, things
tor. India also has a fast-growing per cent, besides some capital appre- the investor can't change went right. Interest rates dropped by around 0.25 per cent in
financial and banking services sector. ciation, according to Jain. Kolkata CBD 15,000-20,000 the first few months. The value of his investment improved,
them until a tenant’s lease
It is also a key startup hub. New tech A commercial property is also Kolkata Salt Lake 5,000-5,500 expires and the annual internal rate of returns was almost double
firms, and upcoming sectors such as more desirable from the perspective Source: Cushman & Wakefield Research digit. However, after nine months when the interest rate
e-commerce and co-working, have of longevity of the asset, as construc- became a little higher, the annualised return dropped to five
contributed to growth in office space tion quality and maintenance are per cent. He withdrew his entire amount even though he
demand,” says Anshul Jain, country both better in these buildings. On the suggests that an investor who is matters,” says Mehrotra. What to avoid: Experts suggest that did not need it. It was a lesson to me to never again distrust
head and managing director, flip side, however, ticket sizes tend to buying a pre-leased building should investors should avoid strata invest- my risk analysis skill and to work harder to manage the
Cushman & Wakefield India. be much bigger. also check the quality of the tenants Location is crucial: An office build- ing. This refers to a small share along expectation of clients.
Demand has consistently out- in it – whether they are top Indian ing should preferably be located in a with a large number of investors on We human beings are so attuned to problem-solving
paced supply in the recent past. Check the builder’s track record: corporates and multinationals. key office hub that is witnessing one floor of a commercial building. that we don’t realise that some problems are solved by not
“Today, any supply that comes into Before betting on a developer, the “What is the size of the floor plate? robust leasing activity. “Check the “Such buildings have struggled to doing anything at all. But the itch to do something is quite
the market is leased out before com- investor must check out how many How energy efficient is the building? rental appreciation that has hap- attract tenants in recent times,” says intense. So, when another person recently called me to seek
pletion or gets lapped up within a buildings he has delivered in the What is the quality of the generator pened in the area in the recent past,” Jain. He also suggests avoiding poor- advice on falling returns of his New Pension Scheme invest-
couple of months of completion, past, and whether he delivered set and air-conditioning system that says Joshi. The area should enjoy ly-maintained buildings. Investors ments, my advice was – do nothing. I understand that they
especially if it is a high-quality devel- them on time. If he failed to do so, the developer has installed? easy accessibility and should be well should also steer clear of projects that would feel more than a little dissatisfied if a top doctor
opment from a reputed developer,” he should have paid a fine. Joshi Developers try to cut corners in these provided with public transportation. 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,
Insurersonlycoveradventuresportsifundertakenasahobby,notinaprofessionalcapacity travel policy also covers other
travel exigencies for instance trip

PRIYADARSHINI MAJI Things are changing now.

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Bharti Axa General Insurance and
SPORTS INSURANCE elling abroad, opt for covers from
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trekking and parasailing are becom- an inbuilt feature. Be it in the form Insurance company Premium (~) available either as a standalone plan Scorecard is out. It shows that actively managed funds
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head, health adminis- for treatment charges (£100,000) personal liability
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inherent danger. These on from Bajaj Allianz Agarwal, appointed actuary, Digit the number of days of travel. The ing, and parasailing are very com- Large-Cap S&P BSE 100 87.88 78.35 48.08 62.77
activities often involve speed, is a lump sum benefit policy cov- General Insurance: “Under adven- add-on plan is linked to the base mon should opt for such policies.
height, a high level of physical exer- ering up to ~10 million in case of ture sports cover, an accident sus- cover, and you can opt for 25 -100 Adventure sports have also become
Indian ELSS S&P BSE 200 83.72 61.54 27.78 43.33
tion and highly specialised gear.” death, or any permanent disability tained during the policy period per cent payout of the sum insured. a bigger trend for senior citizens. Indian Equity S&P BSE 400
The usual travel policies do not pro- that may occur while taking part when the policyholder is engaged For a ~10 million sum insured from People above 60 years who have Mid-/Small-Cap MidSmallCap Index 62.22 78.26 53.03 50.67
vide any cover for these. In fact, in the sports. However, claims for in adventure sports in a non-pro- Bajaj Allianz, where the base cover retired and now want to explore the Source: S&P Dow Jones Indices LLC, Morningstar,
even personal accident plans do not all adventure sports will only be fessional way or as a hobby and is for death and permanent disabil- world should also opt for these and Association of Mutual Funds in India. Data as of June 30, 2018.
cover these sports. payable if the activity is performed under the supervision of a trained ity, you will have to give an extra kinds of travel insurance policies.

Readers’ Corner BUDGET: ~20 MILLION - 25 MILLION
invest for a period of 15 days to funds and multi-cap funds are I had given Aadhaar for KYC Realty check
three months, which is the best defined as two separate cate- (know your customer). With the Business Standard bringsyou a snapshotofaveragecurrentrates and unit sizes in localities
option among these funds? gories. While large- and mid-cap new Supreme Court ruling on that offer propertyin the pricerange of ~20 million-~25 million. Ifyou are looking at buying
The duration of the instruments funds are mandated to invest a Aadhaar, will the mutual fund real estate, an idea aboutprevailingrateswould come in handy
that these funds invest in is the minimum of 35 per cent each in house let me continue or make
fundamental difference between large-cap and mid-cap stocks, my folio dormant until I Avg price (~/sq ft) Avg unit size (sq ft) Avg price (~/sq ft) Avg unit size (sq ft)
the categories mentioned above. multi-cap funds have no restric- furnish alternative documents?
Overnight funds invest in securi- tion on investment in a specific Yes, your current investment will BENGALURU Gachibowli 6,750 3,423
ties maturing in a day, while liq- market-cap band. They can continue to remain active, and Haralur Road 7,481 2,796 Hitech City 7,200 3,012
uid funds invest in securities with invest across market capitalisa- you can transact in your existing Koramangala 11,696 1,921 MUMBAI
a maturity of up to 91 days. tion with minimum equity expo- folio. In case of any further notice Nagavara 8,400 2,625 Mulund(W) 15,417 1,478
ASHWANI BHATIA Further, the remaining funds can sure of 65 per cent. from the regulator, investors will Padmanabha Nagar 9,250 2,225
be differentiated based on the be informed about the addition- Andheri(E) 16,752 1,320
White Field 6,979 3,266 Jogeshwari(W) 15,423 1,469
I plan to enrol for a systematic duration of the portfolio. For Why is it that most equity funds al requirement, if any.
investment plan (SIP). I have ultra-short-duration funds, the have fared worse than Sensex CHENNAI Powai 18,857 1,286
heard that some online players duration is between three for the past one year? I am a US citizen now. When I Egmore 16,000 1,465 Chembur 17,241 1,276
offer a top-up facility at the months to six months, whereas So far in 2018, there has been a was an Indian citizen, I had Muttukadu 5,637 3,939
time of signing up. As I would for low-duration funds it is sharp divergence in perform- mutual fund investments. I had NEW DELHI
want to invest more than the between six to 12 months. For ance across the market capital- not yet complied with the
Thiruvanmiyur (OMR) 12,500 1,735 Kishan Ganj 12,500 1,612
SIP amount in some months money market funds, invest- isation curve. The S&P BSE Foreign Account Tax Saidapet 12,500 1,807
when I have the money, I liked ments are made in instruments Small-Cap index, for example, Compliance Act (FATCA) Thirumangalam 13,750 1,525
Sector 128 (Expressway 9,029 2,702
that top-up option. I want to having maturity up to one year. is down 28 per cent when com- norms. I want to know what GURUGRAM
know if fund houses also offer You can look at investing in any pared to S&P BSE Sensex. Only happens to my investments. Sector 78 (Central Noida) 7,500 2,785
any such option. of the above funds based on your two-three stocks have con- Your prior investments will
Sector 106 (Dwarka Exp.way) 7,906 2,872 Sector 98 (Expressway 10,100 2,100
Fund houses do offer a SIP top-up investment horizon. You may tributed substantially to the not be impacted because of Sector 104 (Dwarka Exp.way) 7,000 3,150 Sector 108 (Expressway 6,895 3,200
facility, which allows investors to consider liquid funds, for exam- index returns. The market change in citizenship or residen- Sector 81 (New Gurugram) 5,695 4,140
increase the SIP by a fixed ple, if you are investing for 15 movement has been concen- tial status. The investments
Sector 109 (Dwarka Exp.way) 6,750 3,150
amount at pre-defined intervals. days. As interest rate cycle sta- trated. Equity mutual fund will keep growing in line with the Baner 8,339 2,514
Investors need to choose the bilises and rates start to come portfolios are diversified, and market. However, you will not HYDERABAD Gultekdi 11,500 1,937
option at the time of enrolment. down, longer duration funds are the impact of this concentrated be able to initiate any further Kondapur 6,352 3,806 Bibwewadi 6,711 3,328
The top-up details cannot be expected to do better. rally in only a few stocks has transactions in the fund until Manikonda 5,300 3,809 Senapati Bapat Road 13,648 1,575
modified later. led to the funds underperform- you adhere to FATCA Tolichowki 5,500 4,202 Viman Nagar 8,772 2,387
What’s the difference between ing the broader market in the compliance.
What’s the difference between large- and mid-cap and multi- short term. These anomalies,
·Ticket price range considered for the above data points is between ~20 milion and ~25 million
the following debt funds: Low cap funds? however, will not sustain in the The writr is MD & CEO, SBI Mutual · All the data points discussed in the above table refer to primary market only
duration, ultra-short duration, Post Securities and Exchange long term and mostly, funds Fund. The views expressed are the · Above residential data set comprises of residential apartments only
liquid, money market and Board of India's re-categorisation tend to outperform their bench- expert’s own. Send your queries to · Above residential data is representative of organised real estate developers only
overnight. If I am planning to of funds, large- and mid-cap mark indices in the long run. · 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


8 November

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.

Adani’s port
T E NARASIMHAN transportation costs once the operators have Netflix has much riding on the success of
Chennai, 8 November recovered their initial investment. This is crucial those titles in the region, home to more than
to reducing the logistical gaps with China if half of the world’s people. While Netflix boasts

he new container terminal at the India is to become an export hub. more than 130 million customers, the vast
Kamarajar Port that became opera- R Shankar, CEO, TVS Logistics, expects sup- majority of them live in the US, Latin America

projects catch
tional in October has come as a relief ply chain costs, including that of inventory, to and Europe.
both for traders and shipping lines come down once the ports become fully oper- Though Netflix doesn’t break out
alike. Within a span of 30km, they now have ational. De-bottlenecking the existing ports subscribers by region outside the US,
three ports —Chennai, Ennore and Kattupali will increase the throughput time for manu- researcher Media Partners Asia estimates the
—and four container terminals to choose from, facturers and boost their overall export and service has yet to surpass two million

a tailwind
which compete with one another for traffic. import capacity. customers in any Asian market. The company
This is a sea change from the time when ship- Although manufacturers are yet to derive acknowledged it has a long way to go.
ping lines had to jostle for berthing slots at any direct cost benefit by trading via Kattupalli “When you think about the entire world,
Chennai and spend two to three days anchored in or Ennore terminals, there are indirect savings we’re still quite small,’’ Chief Executive Officer
the sea if they missed their allotted slot. The con- in terms of shorter turnaround time. Reed Hastings said. Hastings, who co-founded
gestion not only increased their turnaround time, Raghushankar says scaling down handling the company 21 years ago, kicked off a two-day
but also inflated their charter rates. As Chennai grapples with congestion, the promise of tariff should be easier for private ports as they press event in Singapore with a brief synopsis of
The terminal and the Kattupali port are being
developed by Ahmedabad-based infrastructure quick turnaround at the recently opened container are not under any regulator. “While undoubt-
edly efficiency and effectiveness are important
the history of entertainment, as he has done at
many events in recent years.
conglomerate Adani Group. Katupalli was
acquired by Adani from Larsen &Toubro earlier
terminal at Ennore is drawing the attention of considerations, costs, too, have a major
impact in Exim trade,” he says.
The new titles include a series that is a
prequel to Baahubali, the highest-grossing
this year for ~19.5 billion. An additional invest- large shipping lines The Adani group’s foray into franchise in Indian history, and will involve S.S.
ment of ~500 billion has now been envisaged to South India started in 2016 Rajamouli, who directed the films. The
develop and expand its handling capacity to with the acquisition of company is also making an anime version of
259 million tonnes from the existing 24.65 mil- from markets around the world. In addition to nal) on the west coast and Katupalli, near Chennai, the popular Pacific Rim monster movies, and
lion tonnes. To this end, a revised master plan no commodity restrictions at Ennore, Maersk four ports (including one and the award of deepwater bringing in Taiwanese stars Eugenie Liu and
has been submitted to the government. can provide seamless end-to-end solutions from container terminal) on the PORT container terminal project Jasper Liu to appear in Netflix’s first Chinese-
Beyond easing traffic at the Chennai Port, here,” says Steve Felder, managing director for east coast, the group now at Vizhinjam in Kerala. language series, Triad Princess.
Ennarasu Karunesan, CEO for southern ports, South Asia, Maersk. has 10 strategically-located PORTFOLIO Karan Adani, CEO, Adani Ports, The Asia production boom follows a familiar
Adani Ports & Special Economic Zone, says, “As global trade increases, so does the con- ports along the Indian coast- Total ports believes the terminal will mark a new pattern for Netflix, which spends more cash
Kattupali is being designed to handle everything gestion at existing ports. There comes a point line. This, especially on the 10 chapter in trade for Tamil Nadu. His proj- than it generates by plowing its growing sales
from bulk cargo to containers under one roof. when moving to a new port becomes east coast, would lead to ects also sit well with his plan to develop into new programming. The company plans to
“The key would be efficiency backed by tech- inevitable, which is why we are shifting oper- improvement in efficiency Global trading capacity India as an alternative to Colombo, or spend $8 billion on content this year — and
nology, congestion free flow of traffic and ations from Chennai to Ennore,” a Maersk and cost savings for trade in 380 MMT Singapore as a trading hub. Currently, more in the years to come — to build its online
enough backyard space for trade,” he says. “Even spokesperson adds. the longer run, say industry due to limited depth and handling facili- video library, though it’s unclear how much of
if the ships come late, they can berth, unlike at With its shorter turnaround time by one to representatives. All India cargo share ties at Indian ports, bulk of India’s cargo the budget will go to Asia.
other ports.” two days and tie-ups with inland container “Capacity shortage at 15 % is routed via Singapore or Colombo, Investors have accepted the company’s cash
The container terminal is already proving to depots, ports and feeder operators, Ennore Chennai and the fact that adding time and expense. burn because of their confidence in its ability to
be a viable alternative to Chennai. Late last could give a tough fight to Chennai. the Krishnapattinam Port All India container J Krishnan, former chairman for the sign up as many as 400 million customers
month, the world’s largest shipping line Over the next few months, industry repre- may take time to lure large share committee on logistics at the Madras worldwide. Netflix shares have climbed more
Maersk’s container vessel Leonidio berthed at sentatives expect more volumes may switch vessel operators, Ennore 33 % Chamber of Commerce and Industry and than 70 per cent this year, boosting its market
the Adani Ennore Container Terminal inside over to Adani’s ports. Over 60 per cent of the and Kattupalli have the former Trustee of Chennai Port Trust, says, capitalisation past $140 billion and
the Kamarajar Port in Ennore . It marks a shift in container freight stations in the Chennai cluster opportunity to wean away “The port terminal operations are not approaching levels that would rival
operations to Ennore from Chennai where its are in close proximity to Ennore and Kattupalli, volume from Chennai,” says G Raghushankar, standalone businesses and can be a serious long entertainment giant Walt Disney. Yet investors
container ships have been calling since 2003. and that makes shifting to the new ports easier. chairman-logistics committee, South India term player in the global trading network.” are bound to be disappointed unless the
“Ennore has the potential to be the new gate- The ports are part of Adani’s cluster-based Chamber of Commerce and Industry. Vizhinjam in Kerala, once operational, will com- company has a strong showing in Asia, which is
way of South India, and we are geared to support approach towards India’s maritime transport. Industry expects the new ports to intensify pete directly with Colombo, Singapore and littered with Netflix-like companies already
our local customers to move their cargo to and With four ports (including one container termi- competition, increase efficiency, and reduce Salalah as a transshipment hub, he adds. offering vast trove of shows in local languages.

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

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.


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)


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


Solution tomorrow Max/min temperatures in C


Fill in the grid so that every Ahmedabad . . . . . . . . . . . . . . . . .Sunny 36/18
row, every column and Aizawl . . . . . . . . . . . . . . . . . . . . . . . .Sunny 24/12
every 3x3 box contains the Bengaluru . . . . . . . . . . . . . . . . . . .Sunny 31/17
digits 1 to 9 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
SOLUTION TO #2611 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

Dressing for the occasion


No quick fixes
Rooted in tradition, Raymond is looking said Dhanjal. The company is now
looking to open its 300th TRS by
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.
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 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.

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

in the business' DNA) Digital leader businesses
Digital adopters 12
(Those with a mature digital plan
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
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
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
the indexwas released for India
after surveying 200 businesses in
Trends Uses and challenges 67
seriousNRI-specificinquiriesforpropertiesin 2018 and calculating thecompanies' Indian businesses facing
major impediments to
93 % Accelerating new product/
Indiaoverthelastoneyear.Whilethefallinthe services development Intend to invest in Artificial
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
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
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

“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.



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


FIIs pulled out money,while MFs stepped up buying

Mumbai, 8 November

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

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


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


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

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


Quality takes centre stage as on one for the other.

Says Naveen Kulkarni, head of
research at Reliance Securities,

Arvind 317
price (~)
ratio (X)

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