MONDAY, 1 JUNE 2020

14 pages in 1 section www.business-standard.com

MUMBAI (CITY)
~9.00
VOLUME XXIV NUMBER 197

How markets performed last week

% Chg over Dec 31, ‘19
Index on *One- --————————————————————————————————————————————————————————

May 29, ‘20 week Local currency in US $

Sensex 32,424 5.7 -21.4 -25.8
Nifty 9,580 6.0 -21.3 -25.7
Dow Jones
Nasdaq
Hang Seng
25,383
9,490
22,961
3.8
1.8
0.1
-11.1
5.8
-18.5
-11.1
5.8
-18.1
MUMBAI REMAINS SHUT WHILE RIL’S $2-BILLION
Nikkei
FTSE
21,878
6,077
7.3
1.4
-7.5
-19.4
-6.8
-24.9 INDIA BEGINS TO UNLOCK TECH POWERPLAY
DAX 11,587 4.6 -12.5 -13.4
*Change (%) over previous week Source: Bloomberg PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE
MONDAY, 1 JUNE 2020
14 pages in 1 section www.business-standard.com
MUMBAI (CITY)
~9.00
VOLUME XXIV NUMBER 197

How markets performed last week

% Chg over Dec 31, ‘19
Index on *One- --————————————————————————————————————————————————————————

May 29, ‘20 week Local currency in US $

Sensex 32,424 5.7 -21.4 -25.8
Nifty 9,580 6.0 -21.3 -25.7 BACK PAGE P14 BACK PAGE P14
Dow Jones 25,383 3.8 -11.1 -11.1
Nasdaq
Hang Seng
9,490
22,961
1.8
0.1
5.8
-18.5
5.8
-18.1 EXPAND OUTDATED G7 BLOC ECHOESOFKARGIL:PLAINTRUSION
TO INCLUDE INDIA: TRUMP CANLEADTOINDIALOSINGDBOLINK
Nikkei 21,878 7.3 -7.5 -6.8
FTSE 6,077 1.4 -19.4 -24.9
DAX 11,587 4.6 -12.5 -13.4
*Change (%) over previous week Source: Bloomberg PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

Mumbai remains Covid-19 crisis may wipe out

VIRUS INDIA CASES
TRACKER RISE BY 8,380
IN SINGLE DAY

INDIA
shut while India corporate tax rate cut gains
Total 182,143 KRISHNA KANT over the next two weeks.
DEEP CUTS

begins to unlock
Mumbai, 31 May “Both Nifty and Motilal Oswal uni-
Active cases Recovered Deaths verse companies have so far missed on Trend in Nifty50 Indexunderlying earnings
89,995 86,983 5,164 The Covid-19 crisis is threatening to the pre-tax and post-tax profit front. per share (EPS) since April 2019
Total cases include
wipe out most of the gains in corporate FY21 earnings revision is significantly
WORLD Total 1 migration; figures earnings accrued from the September tilted in favour of downgrades and
6,108,525
as of 11 pm IST;
Sources: Ministry
2019cutincorporationincometax.The management commentaries suggest
of Health and underlying earnings per share (EPS) of more volatility and disruption in earn-
Family Welfare,
Deaths Johns Hopkins the benchmark Nifty 50 index are now ings ahead with several Nifty compa-
370,247 Coronavirus
Resource Centre
down to ~428 per unit of the index from
the January high of ~453 and inching
nies seeing fresh double-digit EPS cuts
for FY21,” write Gautam Duggad and
towards the level prior to the tax cut. DevenMistryofMotilalOswalFinancial
The tax cut in September last Services in Q4 interim earnings review.
GOVT NOTIFIES ITR year had resulted in a 10 per cent
increase in the post-tax profits of
The trend in corporate earnings
suggests that index earnings could
FORMS FOR 2019-20 index companies, and Nifty EPS
shot up from around ~410 in the
fall to the levels last seen in early 2014.
At current level, the Nifty EPS is the
Thegovernmenthasnotifiednewincometax middle of September 2019 to ~450 same as it was in the September 2014
returnformsfor2019-20allowingassessees after the tax cut. quarter and a further 5 per cent
toavailbenefitsofextendedtimelinesin Analysts expect a further decline in decline will wipe out the entire earn-
viewofCovid-19besidesmakingfiling the index earning as more Nifty com- ings growth since early 2014.
mandatoryforhighspenders.Thosespending panies declare fourth quarter results Turn to Page 6 > Source: Capitaline, Business Standard calculation
over~2lakhonforeigntravel,incurringover
~1lakhonelectricityordepositingover

RIL’s $2-billion tech powerplay

~1croreincurrentaccountwillhaveto
mandatorilyfileincometaxreturns. 6>

People at a railway reservation counter at Ghaziabad on Sunday PHOTO: PTI

ECONOMY & PUBLIC AFFAIRS P4
Covid-19 to delay GDP, A FINGER IN EVERY PIE SURAJEET DAS GUPTA
BS REPORTERS
WHERE THEY STAND Some of Reliance’s technology
New Delhi, 31 May

CPI base year revision Mumbai/Kolkata/Chennai/Ahmedabad/Hyderabad/

Lucknow/Bhubaneswar/NewDelhi,31May Maharashtra | Places of worship, deals (Stake in %) Mukesh Ambani-controlled Reliance Industries and its sub-
TherecessionforecastcausedbyCovid-19has restaurants, hotels, malls, salons to sidiaries have invested over $2 billion in its four-pronged strat-

A
derailedtheCentre’splanstocarryoutthe day after the Centre suggested eDreams Edusoft 90.5 egy to become a technology powerhouse.
remain shut; shops can open from Education
consumerexpendituresurveyinFY21,further opening up of most activities The strategy includes spending over $1.6 billion on buying
delayingthebaserevisionexerciseforthenation’s outsideofthenearly6,000con- June 5; shooting for films, TV AsteriaAerospace 51.8 Drone stakes in 24 tech firms across the US, UK, and India; winning
keymacro-economicindicatorsandraising tainment zones across the okayed in non-containment zones Reverie LanguageTech 81.3 30 US patents out of the 53 it applied for, mostly in telecom and
dataqualityconcerns. DILASHA SETH writes country, Maharashtra and Rajasthan Rajasthan | Religious places, malls Language localisation Mukesh Ambani, chairman & radio communications; and developing in-house tech in arti-
turned out to be the outliers as they ficial intelligence, machine learning, block chain, virtual real-
and hotels to remain shut; 100% SankhyaSutra Labs 83.0 managing director, Reliance
ordered places of worship, hotels, restau- Software simulation ity, big data, and 5G. Also, the ‘Gennext’ programme is provid-
rants, and malls to remain shut. staff in govt and private firms; NowFloatsTechnologies 85 ing venture capital support and mentoring to 150-odd
Vakt Holdings 5.6
ON In another departure from the
Centre’s guidelines, which permitted
inter-, intra-state buses can start
Digitiseglobalcommoditytrade
SaaSsolution forSMEs
skyTran 56.4
companies across fields ranging from finance and retail to e-
procurement, logistics,non-invasivetestingoffruitquality,and
MONDAY unrestricted inter-state movement, the
Tamil Nadu | Malls and places
of worship will remain shut; inter-
Shopsense Retail 87.6 Personal transportation delivering Indian products to global consumers, among others.
SPECIALS Delhi-Noida border will not be opened
district bus services to be restricted
Software Source: Axis Capital A RIL spokesperson declined to comment. Turn to Page 6 >
for public amid rising number of coron-
BANKERS’ TRUST avirus cases in the national capital, Delhi | To open most shops; but
Banker as Covid warrior 8> according to the Uttar Pradesh govern- govt says no money to pay salaries
After demonetisation, Covid-19 is ment. Most other states extended the to employees, seeks ~5K cr from FM
lockdown in contain-
giving a big push to digital banking. PAGE 9 Uttar Pradesh | Ghaziabad, Noida
ment zones until June
TAMAL BANDYOPADHYAY writes 30, but issued guidelines administrations to take a call on
EDIT:
THE SMART INVESTOR UNLOCKING consistent with that of
the Centre’s, allowing
allowing inter-state movement Share a glass of milk
INDIA Telangana | Reportedly asks
Signs of base metals nearlyalleconomicactiv-
cycle bottoming 11 >
PAGE 6
ities in areas outside
Metro Rail to be prepared to
resume services this month
this
After hitting multi-year lows, metal prices MODI TO these zones.
MEET In its guidelines, Gujarat | Ahmedabad and Surat
have seen some gains. Yet, demand is the INDIA INC
crucial missing piece. VISHAL CHHABRIA TOMORROW ‘Mission Begin Again’, will have intra-city bus services
issued on Sunday, at 50% occupancy
& UJJVAL JAUHARI write
Maharashtra departed
from the Centre’s guidelines. CM Uddhav West Bengal | Private firms can
BUSINESS LAW work with 100% workforce from
Thackeray said the state needed to tread
cautiously now that monsoon was round June 8; Govt offices to have 70% staff
the corner. It said intra-district bus serv-
ices can operate, but inter-district bus
operations will remain restricted.
The state said places of worship, MIND THE GAP
Amid pandemic, a
restaurants, hotels, malls, and salons
would remain shut. The state, however, THE NEW MALL
litmus test for GST 12 >
allowed shooting for films and serials.
Maharashtra has allowed all private MANTRA P2
Experts for staggered payments, liberal offices to operate, but with only 10 per The first of a three-
input tax credit norms, and expediting cent strength, from June 8, and markets part series offers a
and shops can open from June 5 on odd- glimpse into the new
e-invoicing. SUDIPTO DEY writes
even basis. In shops, Maharashtra has ways of shopping as
REBOOT-1 lockdown eases
To all the dairy farmers &
POLITICS & PUBLIC AFFAIRS asked trial rooms to be kept shut.
In Gujarat, BJP in Autos and cabs with two occupants
were allowed in the Mumbai Metro-
MALLS across many cities.
Sauntering into a
producer owned institutions
damage control 13 >
politan Region, Pune, and nine other mall and passing a few pleasant
The party dials up propaganda on
the govt’s behalf as Covid-19
cities in a phased manner. Parks, gar- hours there, may never be the same ensuring stability of our country's
dens, and beaches will be open between again. SAMREEN AHMAD, ARNAB DUTTA &
continues to ravage the state.
RADHIKA RAMASESHAN writes
5am and 7pm, but no group activity will
be allowed. Turn to Page 6 >
RAGHAVENDRA KAMATH write dairy supply chain during this
unprecedented situation:

India Inc goes all out to woo buyers Thank you for the
exemplary service.
SHALLY SETH MOHILE, VIVEAT SUSAN PINTO &
ARNAB DUTTA
BONANZA AFTER CURBS LG Electronics
(Home appliances)
Mumbai/New Delhi, 31 May
| Offers up to | Cashbacks of
Consumerdiscretionaryfirmsare
~10,000 against up to 12.5% Tast
astee the goodness
pre-orders with partner
pullingoutallstopstograbashareofthe
consumer’swalletasshoppinggains
on its website bank cards of milk & milk produc
products
ts
speedafteralmosttwomonths.From | Flexi EMIs as well as zero
auto,refrigerator,andmobilehandset down payment schemes
makerstorealestatefirms,companiesare
tyingupwithbankstodoleoutattractive Panasonic
financeschemesanddiscountstomake | Cashback offers on credit cards
buyingmoreaffordable.Theseoffersare
beingdrivenbythe135- | Interest-free EMIs
PAGE 2 basispointcutinthe
ReserveBankofIndia’s Flipkart (on | Cashback
CONSUMER mobiles & other offers, interest
GOODS DEMAND policyratesafterthe -free EMIs
SHOT UP IN Covid-19pandemic, electronics)
LOCKDOWN 4.0 whichhasmadeloans
cheaper,too. Oberoi Realty,
Encouragedbythepreferencefor Goregaon (Mumbai)
personaltransportationgainingtraction,
carmakershavejoinedhandswith | Homebuyercanpay25%&move
commercialbanksandNBFCs(non-bank in.Pay15%ayearfornext5years
financecompanies)andlaunchedEMI Source: Companies | Developer to pay interest to banks
(equatedmonthlyinstalment)schemes
aimedatreducingtheinitialpurchase
costandmonthlyoutgo. gradedoptionofstartingwithasmallEMI pushthroughdiscountsandgoodfinance
MarutiSuzukiIndiahasrolledout amountandthengraduatingtopayinga schemeshelps,”saidShashank National Dairy Development Board, Anand 388001, Gujarat | www.nddb.coop
EMIschemesthatgivebuyersanoption highersum.“Affordabilitybecomesabig Srivastava,executivedirector,Maruti. @NationalDairyDevelopmentBoard youtube/NationalDairyDevelopmentBoard @nddb_india @NDDB_Coop
toeitherdeferrepayment,orchosea factorduringtimeslikethese.Asales Turn to Page 6 >
2 COMPANIES
>
MUMBAI | MONDAY, 1 JUNE 2020 1

The new mall mantra: Mind the gap, wait for your turn
Thefirstofa3-partseriesoffersaglimpseintothenew all the mall entrances and visitors and all bins for plastic, paper and general waste, a

waysofshoppingaslockdowneasesacrossmanycities
SAMREEN AHMAD, ARNAB DUTTA &
RAGHAVENDRA KAMATH
Bengaluru/Delhi/Mumbai, 31 May
Sauntering into a mall and passing a few
pleasant hours there, shopping and din-
ing, may never be the same again. As the
country prepares to open itself
up after over two months of a
lockdown to contain the Covid-
19 pandemic, malls, too, are
gearing up to start operations,
but with a raft of safety and pre-
cautionary measures.
At Orion Mall near the World REBOOT-1
Trade Center in Bengaluru, the
staff are busy sanitising the floors
MALLS
and every nook and cranny of the
building. Square blue stickers are being
pasted everywhere, that say: “Maintain a
safe distance and wait for your turn”.
Once the mall opens for business, vis-
itors will be welcomed with a namaste
and an infra-red thermometer. If a visi-
tor’s body temperature is above 99
degrees Fahrenheit, he or she will not be
allowed to enter. Also, every visitor will
have to pump out a generous amount of
hand sanitizer from the foot-operated dis-
penser stand placed at the entrance.
From deploying technology for ensur-
ing deep sanitization to adopting painstak-
ing steps for maintaining social distancing
norms, malls across India, except those in
containment zones, are working
overtime to put in place meas-
ures that will make them safe to
visit once they open their doors a
week from now.
“We are adopting operational
measurestoensuresocialdistanc-
ing within the premises, such as
allowing only one person per 75
square-feet and putting rollovers
on escalators so that there is a gap
of three steps between every two persons,”
says Pushpa Bector, executive director, DLF
Shopping Mall in Delhi. What’s more, the
mall has developed a mobile app — DLF
Malls Lookout App — which will help shop-
pers follow social distancing norms in the
common areas and allow them to pre-book
an entry slot. Prozone Malls in Tamil Nadu
and Maharashtra have also developed an
Orion Mall in Bengaluru gears up
to reopen PHOTO: SAMREEN AHMAD
app, through which people can pre-book
their entry into the malls.
Most malls have also made it mandatory
to have the Aarogya Setu app for allowing
entry. QR-based download mechanisms are
being set up for those visitors who do not
alreadyhavetheapp.Moreover,peoplewith-
out masks will not be allowed inside and
mask counters are being set up at the
NEW NORMAL AT MALLS
Face masks Only 1 customer
mandatory per 75 sq ft.
Operational from 50% staff strength
Noon to 9 pm in first phase
OPENING IN PHASE I
Infant clothing, eyewear, electronics &
electricals, apparel, personal care and
accessories, salon and spa, home & furnishing,
sportswear, footwear, takeaways and home
deliveries from food courts and restaurants
OPENING IN PHASE II
Multiplexes, family entertainment centres,
and F&B outlets
Source: Shopping Centres Association of India
entrance from where these can be bought.
“Insteadofscanningmachines,wewillbe
usinghandheldscannerstoavoidanycontact
betweencustomers’bags,”saysDeepakRaju,
deputy manager at Bengaluru’s Orion Mall.
Mumbai-based Viviana mall has
installed ultraviolet light-enabled baggage
scanners to sanitize and scan visitors’ bags.
“We have also put up sanitizing tunnels at
staff will need to walk through them,” says
Manoj K Agarwal, CEO of Viviana Mall.
“We will be following the same SOPs
being followed by airports,” adds Gajendra
Singh Rathore, senior centre director,
Phoenix Marketcity, Bengaluru, which has
installedthermalscannersatentrancepoints
ofthemall.Mallownersarealsomullingthe
settingupofemergencyroomstoisolatevis-
itors who exhibit Covid-positive symptoms.
Thenewnormalwillincludelongqueues
before washrooms, lifts, stores and escala-
tors, as people will have to wait their turn on
social distancing markings. To ensure that
taking the lift is a touch-less experience, a
dedicatedpersonwillstandinfrontofliftsto
press buttons. Wardens will also be placed
across the mall to keep a check on social dis-
tancing.Also,youwillnolongerbeallowedto
lean against the railings on the upper floors.
The railings will be sanitized and security
guardswillseetoitthattheyarenottouched.
Changes have been made in the use of
washrooms, too. You can forget about doing
a spot of preening in front of the mirror,
since visitors won’t be allowed to tarry in
front of mirrors. Every alternate wash basin
is being cordoned off to maintain adequate
physical distance and the washrooms will
be sanitized after each use. Apart from dust-
fourth type of dustbin is being installed for
trashing used masks, gloves, and tissues.
Water dispensers have been suspended
temporarily. “These measures will make
the total costs go up by 7-8 per cent,” says
Bipin Gurnani, CEO of Prozone Malls.
Trying out clothes and accessories is
also about to become a thing of the past.
While 90 per cent of store owners will not
allow trials of products, apparel brands
which will allow it, are installing steamers
to sanitize clothes that have been tried on.
As for the car parking and food court
areas, these are to have only 50 per cent
occupancy. “We also plan to adopt various
technology solutions for food court order-
ing and self-pick-up, along with digital pay-
ments, mall stores’ merchandise catalogues
and enhancement of the mall’s loyalty app
and website for customer convenience and
ease of shopping,” says Kumar of Viviana
Mall. These measures are likely to bring
down the overall footfall at malls to 40 per
cent of what it was before the lockdown.
“However, we expect the conversion rate to
go up since only serious shoppers will visit
now,” says Bector of DLF Shopping Mall.
According to industry estimates, the
organised retail sector has suffered losses of
over ~90,000 crore during the lockdown.

IN BRIEF
MakeMyTrip to lay off 350 Consumer goods demand Lupin ramps up
manufacturingof
staff as travel ban bites
MakeMyTripwillbelayingoff350
employees,astheCovid-19impactontravel
continuestohurtthetravelindustry."Over
thepasttwomonths,wehaveanalysedthe
shot up in Lockdown 4.0
ARNAB DUTTA
drugsindemand
impactcloselyandhavespentconsiderable New Delhi, 31 May SOHINI DAS
timethinkingaboutthepathtobusiness Mumbai, 31 May

I
recovery.Asaresult,it’sbecomeclearthat f the first three phases of the nation-
therearecertainlinesofbusinessthataredeeplyaffectedandwill wide lockdown left marketers of Drug major Lupin has stepped
takemuchlongerthantheotherstorecover.Aswerevisitedsome non-discretionary products gasping up production of key drugs
ofourstrategies,itisevidentthatthepandemichaschangedthe for sales, the fourth phase breathed life that are in demand during the
contextandviabilityofsomeofourbusinesslines,"saidRajesh into a choked consumer goods segment. novel coronavirus outbreak,
Magow,CEO,inanemailtoemployees. BS REPORTERS< From fast food and athleisure to air and is also evaluating its exist-
conditioners (ACs), the demand for sev- ing portfolio to see if any drug
eral non-discretionary items has spiked can be repurposed for the
Not recommended Infosys sees since May 17, when Lockdown 4.0 was
extended till May 31.
treatment of Covid-19.
The company was not sup-
11-digit mobile marginal impact Executives at sportswear major “On average, we “People have become “We are registering plying hydroxychloroquine
number plan: Trai on profits Puma India, for instance, are witnessing are seeing 10% more cautious about 400% surge in (HCQ) to the US market before
FY20 GROWTH IN
jump in sales of performance wear growth day-on-day fitness and the need demand for the Covid-19 crisis. It has since
TelecomregulatorTraisaidit Infosyshassaiditsprofitability and athleisure. since May 7. We are to stay healthy. We our flagship started. Besides, it sees signif- MAJOR MARKETS
hasnotrecommended11-digit maybe“marginally A majority of white-collar workers — seeing maximum are already getting immunity booster icant supply opportunity
Region YoY growth
mobilenumbersbutonly impacted”.Also,InfosysCEO normally bound by dress codes — are traction in the 75% of business from chyawanprash and for anti-infective drug
rate (%)
suggestedprefixing‘0’when SalilParekhdrewapay not letting the pandemic crimp their cooling and the stores that an 80% growth Azithromycin to the US and
mobilenumbersarecalled packageofabout$6.15million style, even as they are trading business grooming products” have opened” in honey” expects an expedited approval North America 4.1
fromlandlines. infiscal2020,Infosyssaidina trousers for sweatpants and stiff blazers for MANISH SHARMA ABHISHEK GANGULY MOHIT MALHOTRA for its inhaler product in the India 10.8
PTI< filingtotheUSSEC. PTI< hoodies. Comfortwear in these uncom- CEO, Panasonic India MD, Puma India CEO, Dabur India pipeline, Albuterol.
fortable times is the new normal being Speaking to Business Europe,
3.8
embraced by the work-from-homers. Standard, Lupin Chief WestAsia,Africa
Despite Puma being allowed to open Since hygiene is a primary factor in for Manish Sharma, president and chief Executive Officer Vinita Latin America 8.6
SEVEN OF TOP 10 FIRMS ADD less than a third of its stores (100 out of
370), the German sportswear brand has
consumers, they tend to rely more on
trusted brands. However, tethering
executive officer (CEO), Panasonic India
and Southeast Asia.
Gupta said, “We looked at our
portfolio and the products Asia Pacific 8.4

~1.76 TRILLION IN M-CAP

Source: Company
registered 10 per cent rise in sales of issues like movement of employees and While markets in the West and East that were immediately
apparel, compared to pre-Covid days. delivery personnel, especially in border continue to remain subdued due to lock- relevant were HCQ,
According to Abhishek Ganguly, areas, have impacted operations,” said down and Cyclone Amphan, markets in Azithromycin, and Albuterol.” it even at Tarapur. The fin-
Seven of the 10 most- managing director (MD) at Puma India, Merrill Pereyra, MD, Pizza Hut (Indian North India, led by the Delhi-National Albuterol helps to open up ished dosage form is made at
valued Indian companies the share of workout gear in its portfolio Subcontinent). So far, it has been able to Capital Region, are now active, with over the airways in the lungs and Goa,” she added.
added ~1.76 trillion to their has gone up substantially. tap the online delivery channel only. 50 per cent physical stores now opera- is used to treat asthma as well As for HCQ, it can trans-
market capitalisation (m- “People have become more cautious However, the QSR is preparing to open tional, said Krishan Schadev, MD, as chronic obstructive pul- fer the technology to manu-
cap) last week, with HDFC about fitness and the need to stay its outlets in one week. Carrier Midea India. monary disease. facture to its US site, but
Bank emerging the biggest healthy. The demand for fitness and While the lockdown has impacted Avneet Singh Marwah, CEO of Super “With HCQ and would take a call depending
gainer. RIL, HUL, HDFC, ITC, training products, and performance the sale of consumer durables during Plastronics, manufacturer of Kodak and Azithromycin, we made major on demand. As of now Lupin
Kotak Mahindra Bank, and wear, such as trackpants, trainers, and peak summer months, the pent-up Thomson brands of smart televisions, efforts to build supply-chain is prioritising Azithromycin
ICICI Bank were the other sports bras, has jumped. We are already demand is now a saving grace for mak- said, “Online sales have spiked 40-50 capabilities as well as flexibil- and Albuterol.
winners in the top-10 list, getting 75 per cent of business from the ers of ACs and refrigerators. per cent. At offline stores, however, the ities, so that we could supply It has made significant
BIG WINNERS while TCS, Bharti Airtel, stores that have opened,” said Ganguly. Manufacturers are no longer breaking business is yet to match that level.” both to the Indian and the US progress with its application
and Infosys finished with Since markets in the red zones in into a sweat as lockdown curbs cool off. In the fast-moving consumer goods markets through our manu- for Albuterol with the US Food
Value added (~ cr)
61,612.11 losses for the week ended major metros of the country have According to Vijay Babu, vice-presi- (FMCG) space, non-discretionary FMCG facturing facilities,” she said, and Drug Administration
Friday. PTI< opened for e-commerce deliveries, sales dent of home appliances at LG India, items are in demand as well. adding, the company is work- (USFDA). "We made progress
through the online channel have also the sell-out of compressor-fitted prod- “Consumers are increasingly seek- ing on technology transfer to on the application with the
SORE LOSERS spiked 15 per cent. Puma used to get 30 ucts (like ACs and refrigerators) has ing ayurveda-based interventions for its Somerset site in the US. agency (USFDA) and hope to
26,487.04 24,733.64 Value lost (~ cr) per cent of its revenue from e-commerce been impressive. “Due to rising levels boosting immunity, besides products “We do not know how get approval soon," said Gupta.
before lockdown. of mercury, these products are in that meet their personal and household long this crisis will continue. There is demand for the prod-
Airtel TCS Infosys Despite the rise in food delivery and demand. Consumers, earlier holding hygiene needs. We are registering 400 It is prudent to be prepared,” uct which has an estimated $1
out-of-home consumption in recent back their purchases, have started buy- per cent surge in demand for our flag- she added. billion market size in the US.
375.34 years, few would have considered the ing,” he said. ship immunity booster chyawanprash For Azithromycin, Lupin These apart, Generic
unleavened bread becoming the pantry “On average, we are seeing 10 per and an 80 per cent growth in honey,” enjoys 40 per cent market Tamiflu (Oseltamivir), which
HDFC ICICI HDFC 17,786.3 staple in the lockdown. Not to be left cent growth day-on-day since May 7. We said Mohit Malhotra, CEO, Dabur India. share in the US in terms of is used to treat influenza A and
Bank Bank 22,149.56 behind in the race to make dough, quick- are seeing maximum traction in the Suresh Narayanan, chairman and volume. Demand for B, too, is witnessing good off-
service restaurants (QSRs), too, want a cooling and grooming products. In fact, MD, Nestlé India, said the Indian arm Azithromycin surged 3x from take in the US market and
521,660.14 739,801.41 slice of the lockdown trade. At Pizza Hut, we have seen 5x increase in the sales of of the Swiss FMCG major witnessed rise pre-Covid-19 levels, said Lupin is focusing on that as
sales have surged 30-50 per cent. trimmers, while pent-up demand for in consumption in categories like Gupta. “The active pharma- well. The demand for these
215,029.01 287,407.32 301,364.99 294,453.42 “Wherever we have opened - be it other appliances is starting to kick in — instant noodles, coffee, dairy whitener, ceutical ingredient is made drugs has gone up 20-40 per
Total m-cap (~ cr) Total m-cap (~ cr) Bengaluru or Delhi — we have wit- specially ACs, washing machines, and partly skimmed sweetened con- in Dabhasa (Gujarat) and we cent. For Azithromycin, the
nessed significant surge in demand. microwaves, and refrigerators,” said densed milk. have the flexibility to make demand has nearly tripled.

‘Some customers are talking about delaying payments’

With a debt-free balance sheet, Siemens is focusing on profitability rather than Are you receiving new orders? challenging year. We are learning Areyoufacingdelaysinpayments Is a pass-through of the higher expect orders across segments.
revenue. At the sectoral level, SUNIL MATHUR, managing director and chief Yes. Our business is very varied to adapt, be agile, and flexible. fromcustomers?Haveyou cost feasible? The country needs to ramp up
executive officer, Siemens India, points to the financial stress showing up in and we are heavy on digitisation. extendedyourpayablecycle Currently, our understanding is green energy, power
receivables. In conversation with Amritha Pillay, Mathur says clients are Overall, it is fair to say ordering in forsuppliers? no customer is going to agree to an transmission, power distribution,
deferring certain orders, payments are likely to be delayed, and cost of general has become sluggish Some customers are talking about increase in prices, and no supplier Metro rail, and railways. Factories
production is on the rise. Edited excerpts: because companies are not in delaying payments and we are in will agree to a reduction in cost have immense potential to turn
their offices to provide physical conversation with them. For now, either. You will have to balance the more competitive.
How has the first month of Are customers deferring signatures to book an order. we have not delayed any payment two and deliver and
operations been since the existing orders? Is it due to our suppliers. But this is a fine still be profitable. Our Will the finance
lockdown was eased for to financial concerns? Are there more digitisation balance to strike — if our strategy for the past “””
“In the current minister’s ~20-
the industry? There are some customers who orders? customers are not paying us in seven years has been Covid crisis, the trillion stimulus
The whole process of opening want to wait for normalcy to Absolutely. In the current Covid time, we may have to take a call for to focus only on top three priorities package help in
factories has become return and then take crisis, the top three priorities (for our suppliers as well. profitable growth. are — conserve rebooting the
onerous and delivery of material, companies) are — conserve That will not change. cash, reduce economy?
complicated. One as their projects have cash, reduce capex, and Is the cost of production on the Orders need to be capex, and Some of the measures
needs to ensure social not advanced due to lower cost. Digitisation rise with labour now scarce? profitable and our lower cost” are a step in the right
distancing without the lockdown. There provides a solution to all This is a time when the customers need to be direction. For others,
upsetting the are still others saying, three. Companies are ecosystem — our customers paying us. the fine print is
machinery process in a SUNIL MATHUR ‘I know we had looking for ways to and suppliers — is feeling awaited. For instance, the
factory. Then there is MD & CEO, Siemens ordered this, but now replace capex with the cost squeeze; What is your guidance for order ~90,000-crore package for
the supply chain, we have a different operational expenditure. demand and supply inflow this year? What is the distribution companies is a step in
capacity utilisation, logistics, and view of the business’. Covid-19 are unclear. We expected mix of domestic and the right direction, support for
labour-related concerns. There has brought in a new In terms of revenue will have to export orders? agriculture is a good measure. I
are logistical issues to receiving dimension and we will now recognition and new orders, adjust our cost We need to gauge the impact of would have wished for a more
raw material and despatching need to rethink whether we is it going to be one of the structure Covid on the world and on India. clear guidance on infrastructure
orders. Lastly, why are you want to continue with that worst years the industry accordingly. We are still in the middle of the spends. I believe the government
manufacturing? Is it for building a capital expenditure (capex) or has seen? Labour cost crisis. India’s overall story and needs to concretely step up infra
stock and hence, blocking your whether we want to defer it by a It is difficult to predict how the is not a major potential have not changed due to spends as it will fuel the economy.
funds? Or, are you manufacturing few months. These are year will end. We do not know component, Covid. This is a hiccup. But the It was mentioned in the package.
because there is a customer who different conversations we are how Covid will pan out; it has but not intrinsic growth story of the We need to see that convert into
wants an offtake? having with our customers. been a highly unusual and insignificant either. country does not change. We actual tendering on ground.
.
MUMBAI | MONDAY, 1 JUNE 2020 COMPANIES 3 <

Next-gen steel industry BEML firming

uptie-upswith
braces for value creation
KUNAL BOSE
2 foreign firms
JYOTI MUKUL
Kolkata, 31 May
BALANCE

3,481.06
New Delhi, 31 May
SHEET
T
his should be an enabler for the
steel industry to arrive at a capaci- BEML is firming up tie-ups Revenue
ty of 300 million tonnes, in accor- with two foreign companies for Netprofit (~cr)
dance with the national steel policy, by setting up joint manufacturing
2030-31: Rescuing from ruin several mil- facilities in India. Besides, the
lion tonnes of sick steel capacity, owing state-owned company has also

687.74

693.59

63.49
-25.92
thousands of crores to secured financial called for global expressions of

4.82
creditors and others, and also the promise interest (EoIs) for more tie-ups
of restoring their health and creating as part of its efforts to indi-
expansion by new owners. genise technology. Sep ‘19 Dec ‘19 FY18-19
The Insolvency and Bankruptcy Code These planned units would Source: BSE
(IBC), 2016, a platform for a one-stop, time- be set up in its Make in India
bound resolution of insolvencies, has laid
the ground for ambitious steel groups with
financial and technological muscle to
Park. In an interview with Bus-
inessStandard, Deepak Kumar
Hota, BEML’s chairman and
theywanttode-riskthemselves
and not depend on one single
manufacturing country. So,
17 private gencos to
forgo imported coal
acquire ailing steel assets. managing director, said the Indiaisamajorinvestmentdes-
From Tata Steel to JSW Steel to Vedanta Steel operations, participate in “infrastruc- the advantage of easy imports of raw mate- nature of tie-ups through the tination because it provides the
from within the country and ArcelorMittal ture building and urbanisation” here, and rials and export of steel products, which EoIs would be open-ended. market. But we need to

for domestic supply

and GFG Alliance from outside but both
with Indian-born promoters, industry
majors saw in sick assets an opportunity to
expand operations, offer synergistic bene-
fits, or make entries into a market where
demand for the ferrous metal was set to
grow at the highest rate in the world.
From among the first major dozen
defaulters, Bhushan Steel was the first to
emergesuccessfullyfromtheIBCresolution
process in May 2018. This has proved to be
“valueaccretive”forTataSteel.Morerecent-
ly, after months of agonising wait and
uncertainty about the outcome, Arcelor-
Mittal, in partnership with Nippon Steel,
bagged Essar Steel at a cost of ~42,000 crore,
making it the largest stressed asset deal.
That acquisition, with great promise of
growth in capacity and product enrich-
ment, brought to fruition Lakshmi Mittal’s
commitment to “build a meaningful pro-
duction presence in the country for over a
decade”. All his earlier attempts to build
greenfield steel mills in Odisha, Jharkhand,
and Karnataka were futile because of issues
related to land acquisition, iron ore mines
linkages, and red tape. For identical rea-
sons and recurring violent protests, South
Korean steelmaker Posco had to give up its
plan of a 12 million-tonne plant in Odisha.
Therefore, acquiring a major stressed steel
asset was the only option left for Lakshmi
Mittal and his son Aditya, who is chairman
of ArcelorMittal Nippon Steel (AMNS), an
India joint venture (JV) formed to run Essar
also make a meaningful contribution to the
steel capacity building programme.
The Mittals could not have asked for
anything better for acquisition than the
operationally well-integrated Essar with a
capacity close to 10 million tonnes. In the
two years ahead of ownership change,
Essar, under Dilip Oommen’s leadership,
lifted production by 2 million tonnes to 7
million tonnes. Oommen continuing to
lead AMNS as chief executive officer brings
continuity in management as the two joint
venture partners, both global leaders in
automotive and flat steel products, have
stated their intention to bring their tech-
nologies available here to make the Hazira
plant an industry leader. ArcelorMittal
owns 60 per cent in the JV and Nippon
Steel 40 per cent.
Their track record is such that once the
new promoters have completed the initial
investment to take annual shipments to 8.5
million tonnes, along with improvement
in operational efficiency and margins, they
will be targeting a capacity build-up of up to
15 million tonnes. Hasn’t the Odisha gov-
ernment already asked AMNS to build a 3
million-tonne mill at Paradip, for which it
had a commitment from Essar Steel dating
back to 2005? Interestingly, while the pan-
demic has made groups cautious with fresh
capacity building at acquired stressed
assets, AMNS claims its expansion pro-
gramme is sailing through as planned.
Being port-based, the Hazira mill enjoys
will support expansion.
Besides routine rehabilitation and
capacity ramping up following the acquisi-
tion of assets from the sick bay, the buyers
in most cases bring something new to the
table by way of technology, brand-building
techniques, or manpower management.
For example, UK-based Sanjeev Gupta’s
GFG Alliance, on acquiring bankrupt
Adhunik Metaliks and Zion Steel, said it
would introduce here its green steel strate-
gy, practised at its mills in several other
countries. The strategy is a combination of
recycling steel scrap with low-carbon
renewable power. Odisha-based Adhunik
makes steel both through the blast furnace
and electric arc furnace routes.
None of the new promoters has any
complaints about the quality of acquired
assets. T V Narendran, chief executive offi-
cer and managing director of Tata Steel,
says: “We were keen on Bhushan because
we found it to be a good asset and we could
ramp up production there without much
capex. This is exactly what we have done.
Our target was to achieve a rated capacity
at Bhushan in two years. We have achieved
that. Were it not for the crisis created by the
pandemic, we would be comfortable oper-
ating Bhushan at a 5 million-tonne level.”
Not only Tata Steel, the other acquirers
such as AMNS and Vedanta are not taking
long to derive value from assets that
became stressed for the failings of past
managements.
Though Hota did not share
the names of the two firms, he
said the tie-up with a Czech
firm was for spare parts and the
other with a Japanese firm was
forpropulsion.Tie-upsthrough
the EoIs would be for products
that complement BEML’s exist-
ing products. “We would not
only focus on the Indian mar-
ket, but the joint ventures will
export to markets defined in
the contract,” he said.
Over the years, BEML has
exported to 68 countries.
Heavy Electricals (BHEL),
too, is seeking tie-ups with for-
eign original equipment man-
ufacturers for jointly setting up
manufacturing facilities. The
advantage for foreign firms will
be that no new land would be
required to set up factories wh-
ich could come on the land ow-
ned by BEML and BHEL.
Whether such EoIs would
be possible considering the
global economic scenario, Hota
said even though there was a
slowdown in the short run, it
would stabilise in the medium
term and would “take off explo-
sively” in the long term. “We
are seeing a kind of shift among
manufacturing companies as
improve the ease of doing busi-
ness,” he said.
Hota said BEML was born
in the womb of self-reliance,
and that was the key growth
driver for the company from its
inception in 1964. “Our capa-
bility to absorb technology res-
ulted in achievement of indi-
genisation level of over 80 per
cent in defence products, over
90 per cent in mining and con-
struction products and over 65
per cent in rail and metro prod-
ucts,” he said. Nearly 68 per
cent of BEML’s products are
developed through its own
research and development. “In
thepasttwoyears,wehavefiled
65–70 patents a year,” he said.
On being asked whether the
government’s push on Atmani-
rbhar Bharat would help the
company, he said around 90
per cent of everything that
BEML sells was through open
competition with global OEMs
across all its three verticals. The
government on May 13 said it
would not procure goods or
services worth up to ~200 crore
from any foreign supplier. For
this, the general financial rules
would be amended to disallow
global tender enquiries.
SHREYA JAI
New Delhi, 31 May
RespondingtotheCentre’snew
scheme to reduce import of
coal, 17 independent power
producershaveappliedtoforgo
their imported coal quantity,
replacing it with supply from
Coal India (CIL).
Adani Power, GMR Energy,
AvanthaPower,LalitpurPower,
and Vedanta are some of the
private companies that have
applied for the ‘import sub-
stitution’ scheme of the
Centre. These units totalling
22,450 Mw have cumulatively
requested for 17.9 million
tonne (mt) of coal from CIL to
substitute their imported
capacity. This quantity is over
and above the amount of coal
these units already get from
CIL under the fuel supply
agreement (FSA). Business
Standard has reviewed the
request details submitted to
the government.
The power ministry in
several notices to all gencos
over the past month urged
them to replace imported
coal with domestic coal. “It is
to not import coal for blending
purposes,” the ministry’s letter
has stated. The ministry is aim-
ing for zero coal import in this
financial year.
For the ‘Import Substit-
ution’ scheme, a genco has to
submit the amount of coal it is
currently getting from CIL, the
amount it is importing, which
will be substituted through
domestic supply, and the pre-
ferred subsidiary of CIL from
which it wants the supply.
Business Standard
MUMBAI EDITION
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For Subscription and Circulation

Tata-Mistry dispute to test small shareholders’rights

DEV CHATTERJEE
Mumbai, 31 May
The dispute between Tata group
and its former chairman Cyrus
Mistry in the Supreme Court
(SC) will test the rights of minor-
ity shareholders and set a prece-
dent for other companies, say
corporate lawyers.
Before the apex court deci-
des on the merits of the case,
lawyers said, the Tata group and
the Mistry family-run Shapoorji
Pallonji(SP)Groupnowhavethe
last chance to settle their differ-
ences out of court. “Both groups
should try to settle the issue.
While Tata Sons should offer a
board seat to the Mistry family,
which they held since 1980, the
SP Group may look at selling
Tata Sons shares in the long run
as the group is facing liquidity
issues,”said HP Ranina, a noted
SC lawyer. The SC on Friday
agreed to hear a plea filed by the
SP Group challenging the Nati-
onal Company Law Appellate
Tribunal’s (NCLAT's) December
order. In its petition, the SP
Group has sought a seat on Tata
Sons board and removal of veto
powergrantedtothedirectorsof
Tata Trusts. The SP Group also
sought similar veto powers for
the minority shareholders like
them in Tata Sons. Reversing
the 2018 order of the National
Company Law Tribunal (NCLT)
Mumbai, the NCLAT had held
the decision to remove Mistry
as Tata Sons chairman was ille-
gal and he should be reinstated.
Though the NCLAT order
was initially hailed as a victory
for them, the Mistry family
appealed against the verdict as
the reinstatement of Cyrus
Mistry as the chairman of Tata
MISTRY’S APPEAL TO THE SC
| Allowproportionate
representation onTata Sons
board to the Mistry familyand
representation onall
board committees
| Delete provision of Tata Sons’
Articles of Association which
gives full veto on all board items
to Tata Trust’s nominee directors
Sons and director of the listed
Tata firms (from which he was
removed by the shareholders in
2016) for the ‘rest of the tenure’
was symbolic at best.
It was also a relief that legal-
ly, lawyers said, appeared to be
on tenuous ground. The other
NCLAT direction that hence-
forth the SP Group should be
consulted for all future appoint-
ment of directors to the Board of
| Limit the affirmative vote to
select number of items as
covered under Articles 121A of
Tata Sons Articles of Association
| Extend the same
veto rights to
directors represe-
nting the minority
shareholders
Tata Sons would simply create a
deadlock in Tata Sons. It did
not give to the Mistry family, as
a matter of right, the ability to
appoint their own person on the
board. If they get it, it will give
the Mistrys sufficient foot in the
door to build on and negotiate
for much more in the future.
Mistry group's plea for repre-
sentation on Tata Sons board in
proportion of their 18.5 per cent
shareholding in Tata Sons was
not granted by the NCLAT; nor
were the provisions in the Tata
Sons Articles of Association,
which the Mistry camp had
called ‘oppressive’, struck down
by the NCLAT. The SP Group’s
appeal to the apex court now
seeks these reliefs (see box).
The appeal by the Mistry
family was delayed as the
NCLAT judgment was delivered
on the last working day of the
Supreme Court before it closed
for the winter recess and the
Tatas could not immediately
appeal against the judgment.
Once the apex court re-ope-
ned, the bench, led by Chief
Justice of India SA Bobde, stay-
ed the NCLAT order on January
24. The bench indicated that it
saw‘basicerrors’intheNCLAT’s
order and was going to stay its
operation. Despite vociferous
opposition by the Mistry camp’s
lawyers, the NCLAT judgment
was stayed in its entirety.
Mistry had also indicated
soon after the NCLAT order that
he is not interested in the chair-
manship of Tata Sons, but want-
ed a board seat in Tata Sons as
the family had been holding the
seat since June 1980. The initial
reactions about the correctness
of the NCLAT’s order that came
from the SC bench would have
not been very encouraging for
the Mistry camp, say sources.
The Mistry family now has
two options: either choose to
reply to the Tatas’ appeal and
defend the NCLAT’s verdict, or
they could come out with a case
of their own and try to get what
they wish to get, which has been
rejected twice — first by the
NCLT and then by the NCLAT.
The SC is their last hope.
advised that all the gencos
who are importing coal for
blending purposes may
make best efforts to replace
their imports with domestic
coal,” said the letter by the
ministry in April.
Apart from stations built
to operate on imported coal,
many generating stations ble-
nd 8-10 per cent of their total
coal requirement with im-
ported coal. This is mostly
done for operational purpos-
es. At times, when domestic
supply dwindles, gencos
depend on import.
However, the with power
demand now witnessing re-
cord decline due to the lock-
down and muted industrial
growth, coal supply with CIL
is in surplus. “The coal stock
available with the thermal
power plants has reached an
all-time high of 50 mt and the
stock with coal companies
stands at 70 mt. In this sur-
plus situation, it is advisable
enquiries please contact:
Ms. Mansi Singh
Head-Customer Relations
Business Standard Private Limited.
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No Air Surcharge

VST INDUSTRIES LIMITED

Regd. Office : Azamabad, Hyderabad – 500 020
Phone: 91-40-27688000; Fax:91-40-27615336;
CIN: L29150TG1930PLC000576,
Email:investors@vstind.com, website: www.vsthyd.com
TRANSFER OF EQUITY SHARES TO THE INVESTOR
EDUCATION AND PROTECTION FUND
Notice is hereby given that pursuant to the provisions of Section 124(6) of the
Companies Act, 2013 (‘the Act’) read with Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘Rules’)
as amended to date, the dividend declared for the financial year 2012-13
which remained unclaimed for a period of seven years will be credited to Investor
Education and Protection Fund (‘IEPF’) on or before 4th September, 2020.
The corresponding shares in respect of which dividend amount have remained
unclaimed for seven consecutive years or more will also be transferred by the
Company to the Demat account of IEPF Authority.
Unclaimed or unpaid dividend up to the year ended 31st March, 2012 was
transferred by the Company to the IEPF within the statutory time period.
The Company will be sending individual notices to all the concerned
shareholders whose shares are liable to be transferred to IEPF as per the
aforesaid Rules at their Registered Address once the lockdown is lifted and
normalcy is restored, requesting them to encash the unclaimed dividend on or
before 19th August, 2020 by sending a letter under their signature to KFin
Technologies Private Limited (‘Karvy’), Unit : VST Industries Limited, Karvy
Selenium Tower B, Plot No.31 & 32, Gachibowli, Financial District, Hyderabad
– 500 032, e-mail : einward.ris@kfintech.com, phone : 040-67162222, Fax :
040-23420814. The details of shareholders whose shares are liable to be
transferred to IEPF will be available on the Company’s website i.e.
www.vsthyd.com under Investors Relations Section.
In this connection, please note the following :-
a) In case you hold shares in physical form; Duplicate Share Certificate(s)
will be issued and transferred to the IEPF. The original Share Certificate(s)
which stand registered in your name and held by you, will stand
automatically cancelled.
b) In case you hold shares in electronic form; your demat account will be
debited for the shares liable for transfer to the IEPF.
In the event valid claim is not received by Karvy on or before 19th August,
2020, the Company shall take action towards transfer of the shares to the
IEPF pursuant to the said Rules. Once these shares are transferred to the
IEPF by the Company, such shares may be claimed by the concerned Members
only from the IEPF Authority by making an application in the prescribed form
IEPF-5 online and sending the physical copy of the same duly signed as per
the specimen signatures recorded with the Company along with the requisite
documents enumerated in Form IEPF-5 to the Company Secretary or to Karvy.
Please also note that no claim shall lie against the Company in respect of
shares/unclaimed dividend transferred to the IEPF pursuant to the said Rules.
For VST INDUSTRIES LIMITED
Sd/-
Place : Hyderabad PHANI K. MANGIPUDI
Date : 30-05-2020 Company Secretary
4 ECONOMY
>
Q4 figures likely inflated: Experts
Economists say substantial changes in the figures for the first three quarters of the year raise doubts on data quality
INDIVJAL DHASMANA
New Delhi, 31 May
T
he gross domestic product
(GDP) numbers for the fourth
quarter of 2019-20, put out by
the National Statistical Office (NSO),
may have been overstated, according
to economists.
They said substantial changes in
the growth figures for the first
three quarters of the year raised
doubts on data quality.
Former chief statistician Pronab
Sen is of the view that GDP at current
prices for the fourth quarter, shown
as ~53.3 trillion, has been overstated
by ~2 trillion. GDP growth is taken
on the basis of constant prices. On
this parameter, growth crashed to a
69-quarter low of 3.1 per cent in the
fourth quarter of 2019-20. But econ-
omists doubt this figure too.
“While it is customary to change
the quarterly numbers in May, the
extent of such revision reveals possi-
bly the loss in Q4 because the impact
of the lockdown may have been even-
ly distributed across quarters,” SBI
Group Chief Economic Advisor
Soumya Kanti Ghosh said.
He estimated that the ~1.18 trillion
loss was distributed over the quarters
in FY20, and Q4 accounted for only
50 per cent of that.
If the Q1, Q2 and Q3 numbers are
unchanged, Q4 growth comes at just
Covid-19 to delay GDP, CPI base year revision
DILASHA SETH
New Delhi, 31 May
The recession forecast caused
by the Covid-19 pandemic has
derailed the government’s plans
to carry out the consumer exp-
enditure survey in 2020-21, fur-
ther delaying the base revision
exercise for the country’s key
macro-economic indicators and
raising data quality concerns.
The revision of the con-
sumerpriceindexandGDPbase
years from 2011-12 and 2012,
respectively, were dependent on
the outcomes of the consumer
expenditure survey of 2017-18
that the government decided to
junk recently. Besides chal-
lenges related to carrying out
field surveys amid the pandem-
ic, primary concern pertains to
the current year not being a nor-
mal economic year.
Base year revision process is
recommended on a five-year
basis to keep up with the struc-
tural changes in spending pat-
terns; however, it should be a
normal economic year. The
government had earlier decided
to revise the base year from
YES Bank seniors
will have up to
30% of CTC as
variable pay
ABHIJIT LELE
Mumbai, 31 May
YES Bank has restructured
the salaries of its senior lead-
ership team for the current
financial year by moving up
to 30 per cent of their total
cost to company (CTC) to
variable pay category.
The bank said the leader-
ship team had taken a volun-
tary decision for restructuring
of their compensation pack-
age.Earlier,thecompensation
on CTC basis was fixed at 100
per cent, YES Bank Managing
Director and Chief Executive
Prashant Kumar said. About
300 employees would
come under the ambit of vol-
untary decision.
At YES Bank, the
bonus-performance linked
compensation was outside of
CTC. It was based on
management’s discretion.
The Reserve Bank of India,
in November 2019, had issued
guidelines for compensation
to chief executives, material
risk takers, and control func-
tion staff. The variable pay
could be in the form of share-
linked instruments or a mix
of cash and share-linked
instruments. The entire vari-
able pay can be in cash only in
cases where rules and regula-
tions do not permit
share-linked instruments.
YES Bank’s payments to
and provisions for employees
stood at ~2,599.87 crore in
FY20, higher than ~2,469.77
crore in FY19. For FY20, it
posted a whopping loss of
~16,418.02 crore on stand-
alone basis, as against a net
profit of ~1,720.27 crore in the
previous fiscal year.
1.2 per cent, he said.
The data released on November 29
last year showed that GDP grew 5 per
cent in the first quarter and 4.5 per cent
in the second quarter of FY20.
The third-quarter GDP data, which
came on February 28 this year, and the
second advance estimates, showed
that economic growth stood at 5.6 per
cent in the first quarter, 5.1 per cent in
the second quarter, and 4.7 per cent
in the third quarter of 2019-20.
If growth for the entire year — 5 per
cent — estimated by the second adv-
ance estimates is taken into account,
the growth rate for the fourth quarter
was implicitly taken as 4.7 per cent.
However, the GDP data released
2011-12 to 2017-18. If the survey
is conducted in 2021-22, or 2022-
23, the base year revision would
finally happen much after 2025-
26, an over 15-year gap in revi-
sion. Former chief statistician
of India, Pronab Sen, who heads
a committee to improve quality
of Indian statistics, told
Business Standard that CPI and
GDP were ‘seriously outdated’
and needed a revision.
“The GDP based on 2011-12 is
already very old. The revision
should have been done some-
time around 2017-18, and that’s
why the consumer expenditure
survey was taken up.”
He said that while 2020-21
was completely ruled out for
carrying out the survey, the
government would have to
take a call for 2021-22 and see
whether it would be a normal
year. “FY21 will see negative
growth. But even if you recov-
er from it, it should seem that
the normal growth momen-
tum is returning and that one
could use it as a base year. The
base should capture a stable
economy,” said Sen, who has
estimated GDP to contract 10.8
STATSGURU
The grave
warning
INDIA’S ECONOMY GREW at
a paltry 3.1 per cent in the
quarter ended March
2020, the lowest in 44
quarters. One thing that
makes this gradual
slowdown more serious than the ones
experienced before is that it came without
any external shock. Also, the data shows
the slump has covered all the sectors.
Manufacturing is weakening, as is the job-
generating construction sector (chart 1).
Agriculture and public spending are the
only green shoots of the economy, and the
concentration of the slowdown in the core
economy is becoming sharper (chart 2). Core
GVA is the gross value added in the economy
without that in the farm sector and public
administration. Consumer spending grew at
2.7 per cent in the March quarter, while
investments contracted for a third straight
month, falling faster than the preceding
quarter every time (chart 3).
The data also showed the economy grew
slower than initially estimated in the first
half of the fiscal year 2019-20. For example,
the output from construction activities in
Q1FY20 was 6 per cent lower than what it
had been estimated (chart 4) in November
2019. The economic slump, which began
after demonetisation and implementation
of the GST, has shown no signs of recovery
until the end of FY20 (chart 5). The Covid
economic shock would play over and above
this pre-existing slowdown.
Slowing of growth has had a definite
impact on the Centre’s revenues, but
revenue spending, most of which is salaries,
pensions and interest payments, has grown
massively (chart 6). Capital expenditure has
grown slower over years. While the gap
between capex and fiscal deficit was
narrowing till FY17, it blew out of proport-
ions in FY20. Fiscal deficit neared ~10 trillion
last year, and its quality deteriorated
(chart 7). These underline the limitations
the Centre faces in giving a direct stimulus
to the economy. ABHISHEK WAGHMARE
StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines
on May 29 altered the growth rates
by showing them at 5.2 per cent for
the first quarter, 4.4 for the second
quarter, 4.1 for the third quarter, and
3.1 for the fourth quarter. One can
understand the variation for the
fourth quarter because in the earlier
data the growth numbers of only
three quarters were available and the
one for the fourth quarter was
deduced from the second advance
estimates for 2019-20.
However, such a significant
variation for the earlier three quarters
is surprising.
Madan Sabnavis, chief economist,
CARE Ratings, said there would be
revisions for sure as all data was not
“FY21 will see negative growth.
But even if you recover from it,
it should seem that the normal
growth momentum is returning
and that one could use it as a
base year. The base should
capture a stable economy”
PRONAB SEN, Former chief statistician of India
“More than GDP, it is the CPI that
needs a revision as consumption
patterns of people change and are
required to be revised. GDP, on the
other hand, is not as much a worry.
It can continue with the current
base for some more time as the
companies’ data is already getting
updated from the MCA 21 database”
PC MOHANAN, former chairman, National Statistical Commission
per cent with first three quar- Covid growth level was unlikely
ters reporting negative growth. over the next three years.
Meanwhile, ratings agency The earlier GDP base was
Crisil has projected 2020-21 to revised from 2004-05 to 2011-
see the worst recession in coun- 12. The 2008 SNA guidelines
try’s history, with GDP to con- recommend base revision
tract by 5 per cent. It has said every five years.
that about 10 per cent of GDP in In the earlier case, the GDP
real terms could be permanent- base was initially to be revised
ly lost, so going back to the pre- from 2004-05 to 2009-10, but it
1: SLOWDOWN HAD SPREAD TO ENTIRE
ECONOMY EVEN BEFORE COVID-19
Manufacturing Services
10.7
8.7
7.4
7.4
7.4
6.6
6.4
6.0
5.6
5.2
5.2
3.0
2.1
Q1 Q2 Q3 Q4
2019
Source: National Statistical Office
2: CORE ECONOMIC GROWTH NEARLY STOPS,
FARM AND FEDERAL SPENDING GROWS
Agriculture Public administration*
Core GVA growth (YoY GVA growth in %)
* Includes defence and other services
3: INVESTMENTS CONTRACT FOR THIRD
SUCCESSIVE QUARTER PRIOR TO COVID-19
Consumer spending
Investments
YoY growth is in real terms; consumer spending is private final consumption expenditure;
government spending is government final consumption expenditure; investments refer to
gross fixed capital formation Source: National Statistical Office (in real terms)
DATA VARIATIONS
GDP growth in %YOY
Nov 29 Feb 28 May 29
2019 2020 2020
Q1FY20 5.0 5.6 5.2
Q2FY20 4.5 5.1 4.4
Q3FY20 - 4.7 4.1
Q4FY20 - - 3.1
Source: MoSPI
available for the fourth quarter.
“There will be a downward bias
for the fourth quarter (GDP num-
bers),” he said.
Aditi Nayar, principal economist at
ICRA, said the initial data for the fourth
quarter had not been able to
incorporate earnings, which will reveal
the impact of the lockdown on
profitability. “The initial growth
estimate is likely to be prove to be too
optimistic,” she said.
Motilal Oswal Institutional
Research in a note said such large
revisions in May were unusual
because major revisions took place in
January every year.
Devendra Pant, chief economist at
India Ratings, said frequent data revi-
sions were not healthy.
“It raises the issue of data consis-
tency. If I am a corporate house, I am
preparing a strategy based on these
numbers. That strategy will not look
turned out to be quite an abnor-
mal year with the financial
crises and the drought. “The
financial crises were such that
we didn’t know how long it was
going to play out, so we decided
to go with 2011-12,” Sen said.
On whether the government
should consider revisiting the
consumer expenditure survey
carried out in 2017-18, Sen said it
would be pointless as that year
saw two economic shocks —
demonetisation and the intro-
duction of goods and services
tax. The leaked CES report for
2017-18 showed that consumer
spending fell for the first time
in more than four decades.
PC Mohanan, former chair-
man of National Statistical
Commission, said all statistical
activitieswouldcometoastand-
still, as besides the fact that col-
lection of data would be near
impossible amid the Covid-19
pandemic for the next few
months, the current year will
not be a normal year.
“More than GDP, it is the
CPI that will need a revision as
consumption patterns of peo-
ple change and are required to
(YoYGVA growth in %)
Construction
6.5
5.7
5.5
5.2
4.4
2.6
-0.8
-0.6
-1.4
-2.2
0.0
Q1 Q2 Q3 Q4
2020
Source: National Statistical Office
4: MASSIVE REVISIONS IN ESTIMATES
FOR FIRST TWO QUARTERS
Downward revision from November 2019 to March 2020 estimates
Government spending
(YoY growth in %) Apr - Jun 2019
-6.6%
Jul - Sep 2019
-6.9%
Construction
Note: * Investments refer to gross fixed capital formation and are part of the expenditure
side estimates of the gross domestic product, while the first two parameters are part of the
supply side estimates of the gross value added in the economy
correct in hindsight when data is
altered significantly.”
D K Srivastava, chief policy advisor
at EY, said some difficulties arose
because the NSO was not able to
complete all the steps it took for data
collection in Q4, which had seen
lockdown for a few days.
Data collection became a
constrained exercise, he said, adding
this particularly related to prices.
However, he said it was difficult to
say that the Q4 data was overstated
because lockdown affected only a few
days in March.
The NSO also said the data flow
from economic entities had been
affected because in view of the pan-
demic and consequent nationwide
lockdown measures since March.
“As some of these units are yet to
resume operations and owing to the
fact that the statutory time-lines for
submitting the requisite financial
returns have been extended by the
Government, these estimates are
based on the available data.
Consequently, the Estimates
(Quarterly as well as Annual) are like-
ly to undergo revision,” it said.
However, an economist said that
the data collection was affected in the
fourth quarter and not the previous
three quarters.
“Why were then such sharp
revisions for the first three quarters,”
he wondered.
be revised. GDP, on the other
hand, is not as much a worry. It
can continue with the current
base for some more time as the
companies’ data is already get-
ting updated from the MCA 21
database,” he said.
The entire expenditure side
of national accounts depends
on the consumer expenditure
survey. The expenditure side
comprises data indicators per-
taining to trade, private invest-
ments, government spending,
and demand. The production
side of national accounts is ba-
sed on various enterprise sur-
veys. Before the pandemic
struck in March, the Centre had
put on hold indefinitely all the
surveys and economic census
following reports of attack on
surveyors due to the National
Register of Citizens (NRC) fears.
Sen said fears related to the
Citizenship Amendment Act
and NRC remained, and
appeared to be overshadowed
by Covid-19. “Hence, may resur-
face again later. That is another
challenge because if households
do not cooperate, there can’t be
a survey,” he added.
Apr - Jun 2019 Apr - Jun 2019
-2.2%
Jul - Sep 2019 Jul - Sep 2019
-2.2%
Financial services Investments*
Source: National Statistical Office
MUMBAI | MONDAY, 1 JUNE 2020
Cayman Islands
now India’s 10th
biggest investor
Inflowshavegoneupfromtaxhavens;
corporate tax dodging worries DPIIT
SUBHAYAN CHAKRABORTY
New Delhi, 31 May
Famous offshore tax haven
CaymanIslandsisnowthe10th
largest source of Foreign Direct
Investment (FDI) for India,
leaving behind major nations
like South Korea and the
United Arab Emirates.
While inbound FDI from
tax havens have risen over the
past few years, estimates
released by the DPIIT earlier
this week show it spiked
unprecedentedly in 2019-20.
Foreign direct equity
investments in 2019-20 grew by
14 per cent, a four-year high, to
arecord$49.8billion,according
to the data released by the
Department for Promotion of
Industry and Internal Trade
(DPIIT) on Thursday.
The figures are expected to
comfort policymakers who
were worried about tepid
growth in equity investments,
which had contracted by 1 per
cent in 2018-19 and risen only 3
per cent in the year before that.
But sources say the DPIIT is
wary of inflows shooting up
from tax havens, generally
defined as a country or place
with very low effective rates of
taxation for foreign investors.
“We have noticed the increas-
ing incidence of potential
round tripping of profits by
Indian companies. This will be
discussed with the Corporate
Affairs Ministry,” said a senior
official. Even if seen as pure
investments by foreign entities,
these flows tend to be volatile
and unsustainable, he added.
Equity inflows worth $3.7
billion came from the sunny
Caribbean jurisdiction in 2019-
20, a 267 per cent increase from
the $1 billion registered in 2018-
19. Located nearby, the tiny
British Virgin Islands pushed
in $262.5 million, a small figure
until someone considers that it
onlysent$46millionin2018-19.
The two United Kingdom
FDI FROM TAX HAVENS GO UP
2018-19 2019-20 Annual growth FY20 (%)
British Virgin Islands 46.17 262.85 469.3
Cayman Islands 1,007.97 3,702.22 267.29
Cyprus 296.09 879.4 197.0
Netherlands 3,870.26 6,499.72 67.94
Hong Kong 599.79 694.09 15.7
Luxembourg 269.97 305.9 13.3
5: THE DOWNWARD SLIDE HAS
WORSENED AFTER COVID-19
Source: National Statistical Office
6: POOR GROWTH PULLS DOWN CENTRE'S
TAX REVENUES, BUT SPENDING GROWS
Centre's net tax revenue
14.7 15.4
11.0
9.0 9.4
‘14-15 ‘15-16
Sources: Union Budget, Controller General of Accounts, Ministry of Finance
7: CAPEX GROWTH SLOWS; FISCAL DEFICIT
AND ITS QUALITY DETERIORATE
Capex Fiscal deficit (LHS)
~trillion
10.0
-2.9% 8.0
4.1 3.9
6.0
-8.2%
5.3
4.0
5.1
2.0
2.53
1.97
0 0
‘14-15 ‘15-16 ‘16-17 ‘17-18 ‘18-19 ‘19-20
Sources: Union Budget, Controller General of Accounts, Ministry of Finance
1
dependencieswererankedfirst
and third in the Corporate Tax
Haven Index (CTHI) released
last year by the Tax Justice
Network,anindependentinter-
national network advocating
against tax avoidance. The
CTHI ranks the world’s most
importanttaxhavensformulti-
national corporations which
erode the tax revenues of other
countries around the world.
Largernationspresent
It also lists larger, more for-
malised tax heavens like the
Netherlands, Switzerland, and
Cyprus as being major hubs for
hiding corporate profits.
As of March 2020, the
Netherlands and Cyprus con-
tinue to be in the top-10 sources
of historical FDI for India. In
particular, Netherlands is the
3rd-largest source of historical
FDI for India, accounting for an
impressive 7.2 per cent of all
FDI into India since 2000. In
the last financial year, it sent
$6.49 billion, a handsome 67
per cent increase over its tally
from the year before.
Investments from Cyprus, the
eighth-largest source FDI, also
accelerated. Equity worth
$879.4 million came in from the
Mediterranean nation, up from
$296 million a year back.
Figures presented by the
government to Parliament in
2018 showed that FDI from
nations widely regarded as tax
havens began spiking in 2017-
18. Investment flows from
European principalities such
as Luxembourg also rose.
In FY20, the liberal tax hub
of the Singapore continued to
be the largest source of FDI for
India for the second consecu-
tive year, pushing in $14.6 bil-
lion, followed by Mauritius at
$8.2 billion. Singapore has long
been the highest source of for-
eign funds for India, pumping
in around $97.6 billion since
2000, constituting a fifth of all
inbound FDI over this period.
Sources:
DPIIT, RBI
(YoYgrowth in %)
Revenue expenditure (~ trillion)
23.5
20.1
18.8
16.9
13.6
12.4 13.2
‘16-17 ‘17-18 ‘18-19 ‘19-20
Fiscal deficit as
% of GDP (RHS)
4.6 5.0
4.0
3.5 3.4
9.4
3.5
3.0
6.5
5.9
5.4
2.0
3.37
1.0
3.08
2.85
2.63
>
MUMBAI | MONDAY, 1 JUNE 2020 5

Insure your family's future

and prepare them to bounce back.

HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited)
: 13th Floor, Lodha Excelus, Apollo Mills Compound, N. M. Joshi Marg, Mahalaxmi, Mumbai - 400 011. • CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2020
FORM L-1A-A-RA - Revenue Account - Policyholders' Account (Technical Account) (`
( in Lakh)

For the year ended March 31, 2020 For the year ended March 31, 2019
Non-linked Linked Non-linked Linked
Particulars
Total Individual Individual Total Individual Individual
Group Group Group Group
Life Pension Life Pension Life Pension Life Pension
PREMIUMS EARNED - NET
(a) Premium 3,270,689 1,053,336 299,641 798,463 961,748 68,971 88,530 2,918,602 795,497 308,584 682,355 980,360 90,938 60,868
(b) Reinsurance ceded (48,329) (24,778) - (21,718) (1,833) - - (26,201) (19,596) - (4,943) (1,662) - -
(c) Reinsurance accepted - - - - - - - - - - - - - -
Sub-Total 3,222,360 1,028,558 299,641 776,745 959,915 68,971 88,530 2,892,401 775,901 308,584 677,412 978,698 90,938 60,868
INCOME FROM INVESTMENTS
(a) Interest, dividend & rent - gross 684,532 234,658 83,699 135,997 165,846 28,524 35,808 565,364 196,767 53,545 97,768 152,095 30,750 34,439
(b) Profit on sale / redemption of investments 484,411 88,153 20,201 14,481 258,881 77,614 25,081 328,524 24,260 3,635 5,150 218,248 61,990 15,241
(c) (Loss on sale / redemption of investments) (233,794) (81,312) (3,676) (1,930) (106,578) (31,068) (9,230) (95,031) (7,051) (617) (471) (59,716) (15,631) (11,545)
(d) Transfer / gain on revaluation/ change in fair value (1,266,236) (3,915) (1,843) - (1,083,551) (149,927) (27,000) 103,892 - - - 77,154 19,066 7,672
Sub-Total (331,087) 237,584 98,381 148,548 (765,402) (74,857) 24,659 902,749 213,976 56,563 102,447 387,781 96,175 45,807
OTHER INCOME
a) Contribution from Shareholders' Account towards Excess EoM 9,537 9,537 - - - - - 22,140 4,619 3 17,518 - - -
b) Contribution from the Shareholders' Account 938 - - 938 - - - 8,755 - - 1,477 7,278 - -
c) Income on Unclaimed amount of Policyholders 3,816 - - - 3,816 - - 5,225 - - - 5,225 - -
d) Other income 20,579 15,874 385 12 4,300 8 - 12,386 7,037 342 12 4,972 23 -
Sub-Total 34,870 25,411 385 950 8,116 8 - 48,506 11,656 345 19,007 17,475 23 -
TOTAL (A) 2,926,143 1,291,553 398,407 926,243 202,629 (5,878) 113,189 3,843,656 1,001,533 365,492 798,866 1,383,954 187,136 106,675
Commission 149,118 104,076 2,274 12,825 29,428 514 1 113,155 54,912 3,070 10,073 44,343 755 2
Operating expenses related to insurance business 426,690 304,461 10,575 22,034 88,116 1,404 100 380,076 184,539 10,294 49,569 134,285 1,294 95
Provision for doubtful debts - - - - - - - - - - - - - -
Bad debts written off - - - - - - - - - - - - - -
Provision for income tax 14,903 (9,138) - 23,624 186 - 231 22,679 13,577 - 14,767 (5,873) - 208
Provisions (other than taxation)
(a) For diminution in the value of investments (net) 53,084 45,437 7,647 - - - - 7,407 7,247 160 - - - -
(b) Others - Provision for standard and non-standard assets 3,658 112 - - 2,482 589 475 1,649 9 3 - 1,117 295 225
Goods and Services Tax on linked charges 35,324 - - - 31,648 2,642 1,034 33,982 - - - 30,058 2,975 949
TOTAL (B) 682,777 444,948 20,496 58,483 151,860 5,149 1,841 558,948 260,284 13,527 74,409 203,930 5,319 1,479
Benefits paid (net) 1,817,304 395,791 53,542 364,878 711,358 208,969 82,766 1,341,464 260,622 36,391 214,997 560,660 196,999 71,795
Interim bonuses paid 5,850 5,517 333 - - - - 6,137 5,814 323 - - - -
Terminal bonuses paid 78,994 76,148 2,846 - - - - 51,290 48,381 2,909 - - - -
Change in valuation of liability in respect of life policies in force
(a) Gross 1,322,439 646,369 303,180 367,769 4,252 892 (23) 1,175,211 450,171 297,403 428,518 (595) (314) 28
(b) Fund reserve (967,707) - - - (768,711) (224,527) 25,531 592,307 - - - 592,128 (30,303) 30,482
(c) Funds for discontinued policies 48,173 - - - 56,926 (8,753) - 26,895 - - - 27,848 (953) -
(d) Amount ceded in reinsurance (158,829) (157,600) - (1,241) 14 (2) - (43,667) (38,251) - (5,399) (17) - -
(e) Amount accepted in reinsurance - - - - - - - - - - - - - -
TOTAL (C) 2,146,224 966,225 359,901 731,406 3,839 (23,421) 108,274 3,149,637 726,737 337,026 638,116 1,180,024 165,429 102,305
SURPLUS/ (DEFICIT ) (D) = (A) - (B) - (C) 97,142 (119,620) 18,010 136,354 46,930 12,394 3,074 135,071 14,512 14,939 86,341 - 16,388 2,891
Balance of previous year (Funds for Future Appropriations) 110,301 72,579 37,722 - - - - 95,920 65,027 30,893 - - - -
Total 207,443 (47,041) 55,732 136,354 46,930 12,394 3,074 230,991 79,539 45,832 86,341 - 16,388 2,891
APPROPRIATIONS
(a) Transfer to Shareholders’ Account 119,139 (93,746) 14,127 136,360 46,930 12,394 3,074 120,690 6,960 8,110 86,341 - 16,388 2,891
(b) Transfer to other reserves - - - - - - - - - - - - - -
(c) Balance being Funds for Future Appropriations
(Participating - Life & Pension) 88,304 46,705 41,605 (6) - - - 110,301 72,579 37,722 - - - -
Total 207,443 (47,041) 55,732 136,354 46,930 12,394 3,074 230,991 79,539 45,832 86,341 - 16,388 2,891

Form L-2A-A-P&L - Profit and Loss Account -

Form L-3A-A-BS - Balance Sheet Form L-22A - Analytical Ratios
Shareholders’ Account (Non-technical Account)
(`
( in Lakh) (`
( in Lakh)
For the year For the year As at March As at March For the year For the year
Particulars ended March ended March Particulars 31, 2020 31, 2019 Sl. ended ended
No. Particulars March 31, March 31,
31, 2020 31, 2019
SOURCES OF FUNDS 2020 2019

Amounts transferred from the Policyholders’ SHAREHOLDERS’ FUNDS:

201,880 201,738 1 New business premium income growth rate (segment-wise)
Share capital
Account (Technical Account) 119,139 120,690 Non-linked Individual Life 107.64% 8.57%
Share application money received pending allotment of 559 39
Income from investments: Non-linked Individual Pension -2.33% 119.61%
shares Non-linked Group 17.44% 49.84%
(a) Interest, dividends & rent – gross 36,025 29,426 Reserves and surplus 496,750 364,088 Linked Individual Life -38.38% 4.59%
(b) Profit on sale / redemption of 10,841 11,698 Credit / [Debit] Fair value change account (19,197) (301) Linked Individual Pension -45.61% -19.80%
investments Sub-Total 679,992 565,564 Linked Group 45.45% -34.04%
BORROWINGS - - 2 Net Retention ratio 98.52% 99.10%
(c) (Loss on sale / redemption of (3,085) (285) 3 Expense of Management to Gross Direct Premium ratio 17.61% 16.90%
POLICYHOLDERS’ FUNDS:
investments) Credit / [Debit] Fair value change account 4,960 111,213 4 Commission ratio (Gross Commission paid to Gross Premium) 4.56% 3.88%
Sub-Total 43,781 40,839 Policy liabilities 6,527,081 5,363,471 5 Ratio of Policyholder’s liabilities to Shareholder’s Funds 1770.40% 2108.11%
Other income 6 Growth rate of Shareholders’ Fund 20.23% 19.09%
1,856 2,108 Insurance reserves - -
7 Ratio of surplus to Policyholders’ liability 0.81% 1.13%
TOTAL (A) 164,776 163,637 Provision for linked liabilities 5,437,675 5,144,904 8 Change in Net worth (` in Lakh) 114,428 90,646
Remuneration of MD/CEOs/WTDs over 801 482 Add: Fair value change (353,256) 907,221 9 Profit after tax / Total income 4.37% 3.31%
Specified limits Provision for linked liabilities 5,084,419 6,052,125 10 (Total real estate + loans) / (Cash & invested assets) 0.42% 0.29%
Funds for discontinued policies 11 Total investments/(Capital + Surplus) 18.25 22.20
Expense other than those directly related 2,541 2,299
to the insurance business i) Discontinued on account of non-payment of premium 332,790 284,574 12 Total affiliated investments/(Capital+ Surplus) 0.32 0.32
ii) Others 999 1,042 13 Investment yield (gross and net)
Contribution to Policyholders' Account 9,537 22,140 A. Without unrealised Gains
towards Excess EoM Total provision for linked & discontinued
Policyholders’ liability 5,418,208 6,337,741 Shareholders’ Funds 6.52% 9.12%
Bad debts written off - - Policyholders’ Funds
Sub-Total 11,950,249 11,812,425
Contribution to Policyholders' Fund 938 8,755 Non Linked
Funds for Future Appropriations (Participating -
Provisions (Other than taxation) - Participating 6.96% 7.42%
Life & Pension) 88,304 110,301 - Non Participating 9.58% 8.41%
(a) For diminution in the value of TOTAL 12,718,545 12,488,290 Linked
investments (net) 19,785 973 APPLICATION OF FUNDS 6.30% 6.61%
- Non Participating
(b) Provision for doubtful debts - - INVESTMENTS B. With unrealised gains
Shareholders’ 585,548 504,979 Shareholders’ Funds 2.93% 7.51%
(c) Others - Provision for standard and - -
Policyholders’ 6,718,861 5,712,446 Policyholders’ Funds
non-standard assets
Assets held to cover linked liabilities 5,418,208 6,337,741 Non Linked
TOTAL (B) 33,602 34,649 5.43% 9.50%
LOANS 29,905 7,959 - Participating
Profit before tax 131,174 128,988 - Non Participating 15.00% 9.59%
FIXED ASSETS 33,013 33,330
Provision for taxation 1,647 1,309 Linked
CURRENT ASSETS -14.63% 7.50%
Profit after tax 129,527 127,679 - Non Participating
Cash and bank balances 67,987 123,982 14 Conservation ratio
APPROPRIATIONS Advances and other assets 362,717 280,099 Non-linked Individual Life 82.32% 84.75%
(a) Balance at the beginning of the year 327,402 239,365 Sub-Total (A) 430,704 404,081 Non-linked Individual Pension 84.53% 82.64%
(b) Interim dividends paid during the year - (32,883) CURRENT LIABILITIES 490,192 506,397 Non-linked Group 21.37% 52.44%
PROVISIONS 7,502 5,849 Linked Individual Life 81.59% 84.31%
(c) Proposed final dividend - - Linked Individual Pension
Sub-Total (B) 497,694 512,246 74.59% 80.76%
(d) Dividend distribution tax - (6,759) NET CURRENT ASSETS / (LIABILITIES) (C) = (A – B) (66,990) (108,165) Linked Group NA NA
Profit carried forward to the Balance Sheet 456,929 327,402 MISCELLANEOUS EXPENDITURE 15 Persistency ratio (Original premium basis)*
for 13th month 90.06% 87.24%
Earnings per equity share (to the extent not written off or adjusted) - -
for 25th month 80.22% 80.47%
Basic earnings per equity share (`) 6.42 6.34 DEBIT BALANCE IN PROFIT & LOSS ACCOUNT for 37th month 73.78% 72.00%
Diluted earnings per equity share (`) 6.41 6.32 (Shareholders’ Account) - - for 49th Month 67.21% 67.67%
Nominal value per equity share (`) 10.00 10.00 TOTAL 12,718,545 12,488,290 for 61st month 55.05% 52.25%
16 NPA ratio (gross and net)
A. Gross NPA ratio
Shareholders’ Funds NIL NIL
Notes: Policyholders’ Funds
1) The above public disclosure is made in accordance with Insurance Regulatory And Development Authority of India (IRDAI) Master Circular no. IRDA/F&A/Cir/232/12/2013 dated December 11, 2013. Non Linked
2) The above public disclosure is based on the audited financial statements for the year ended March 31, 2020 which have been reviewed by the Audit Committee and which, thereafter, have been approved by the Board of - Participating NIL NIL
Directors on April 27, 2020. - Non Participating NIL NIL
3) Figures for the previous year have been re-grouped wherever necessary, to conform to current year’s classification. Linked
- Non Participating 0.09% 0.10%
B. Net NPA ratio
Shareholders’ Funds NIL NIL
Policyholders’ Funds
For and on behalf of the Board of Directors Non Linked
- Participating NIL NIL
sd/- - Non Participating NIL NIL
Linked
Vibha Padalkar - Non Participating NIL 0.05%
Managing Director & CEO
*The persistency ratios are calculated in accordance with the IRDAI circular no. IRDA/ACT/CIR/MISC/035/01/2014
(DIN: 01682810) dated January 23, 2014 and hence are with a lag of one month.
6 ECONOMY & PUBLIC AFFAIRS
>
MUMBAI | MONDAY, 1 JUNE 2020 1

Modi to meet India Inc tomorrow

In Mann ki Baat, PM stresses the need to restrict imports of some goods, saying it’s wasteful expenditure
Power bill over
~1lakh?Nowit’s
WILL MAKE COVID-19 TESTS AFFORDABLE: THACKERAY
musttofileITR
ARCHIS MOHAN & PTI
New Delhi, 31 May
Maharashtra will WORLD UPDATES
P
rime Minister Narendra Modi will share make Covid-19 tests
his vision on ‘Getting Growth Back’ with
India Inc during an address at the annual
accessible and | Scientists develop method
to reduce coronavirus count
| UKministersuggests
local lockdowns to fight
Centre notifies changes; last date for
affordable to all, Chief
session of the Confederation of Indian Industry Minister Uddhav in plasma, blood products second coronavirus wave filing extended to Nov 30 from Jul 31
on Tuesday, sources said.
Thackeray said in his | NewYorkgovernorsigns bill
The address comes at a time when | Nepal extends lockdown DILASHA SETH
address to residents granting death benefits to
companies are resuming operations following until June 14 New Delhi, 31 May
relaxations and gradual easing of the lockdown.
on Sunday deceased front-line workers
The PM will deliver the inaugural address at UP augments Covid-19 | Parts of Columbian capital | Coronavirus cases The government has notified
the annual session of the CII to mark 125 years hospital beds to to be shut down in Pakistan rise new income-tax return forms
since its inception in 1895, sources in the 100,000; targets above 69,470; death toll for 2019-20, making it manda-
industry chamber told PTI. The virtual event 20,000 testing a day | Russia sees over9,000 tory for high spenders to file
new virus cases nears 1,500-mark
will also witness participation from top corporate Anganwadi workers listen to PM Narendra Modi’s ITR and allowing assesses to
honchos such as Piramal Group Chairman Ajay Delhi Police loses two Mann Ki Baat, in Ajmer on Sunday | Italy records 75 new avail benefits of extended
ASIs to Covid-19
PHOTO: PTI | Bangladesh reopens offices,
Piramal, ITC CMD Sanjiv Puri, Biocon CMD Kiran transport services amid Covid-19 deaths, against 111 timelines in view of Covid-19.
Mazumdar-Shaw, SBI Chairman Rajnish Kumar, within 24 hours From June 1, Goa to get flight Covid-19 test People incurring large
more trains, flights results are negative spike in coronavirus cases the day before; 55 new cases
and CII President Vikram Kirloskar. Railways to repaint spending will not be able to

Swadeshipitch
In his 65th Mann ki Baat address, Prime
Minister Narendra Modi on Sunday said the
pursuit of Atmanirbhar Bharat, or self-reliant
India, will take the country to new heights in
this decade.
Stressing the need to restrict import of goods
that can be manufactured in the country, he
termed imports of such goods as wasteful
expenditure. The prime minister spoke of the
need to offer a “new paradigm” to offer jobs and
self-employment opportunities to millions of
migrant workers who are heading back home to
their towns and villages by setting up cottage
and small-scale industries.
Modi said a national migration commission
could soon be set up, while skill mapping of
migrant workers is being done, including by
private startups. He also promised help to
farmers hit by locust attacks.
With India registering its highest single-day
spike of 8,380 Covid-19 infections on Saturday,
the PM urged people to remain even more
vigilant now as major chunk of the economy has
opened up. Coronavirus is very much there and
isolation coach tops to Arunachal villagers
reduce the heat inside build huts to
CISCE allows class 10,12
quarantine
returnees
students to change
AI makes it mandatory
exam centre, appear
for crew to check pre-
for boards later
we cannot be complacent, he said. “Road ahead
is a long one. We are fighting a pandemic about
which little was previously known,” he said.
Modi said there was renewed interest across
the world, from “Hollywood to Haridwar”, in the
healing powers of Yoga and Ayurveda. “Truly,
Yoga is good immunity and unity,” he said.
On the subject of Aatmanirbhar Bharat,
the PM chose to read out a letter he received
from a listener from Bihar. The letter is
significant for its content.
Modi said Himanshu from Bihar has written
to him that “he dreams of the day when India will
have reduced imports to the bare minimum”, be
it the import of petrol, diesel, fuels, electronic
items, urea or even edible oils.
“I understand his sentiments. There are many
products that find their way into the country from
Uttarakhand Tourism
“ROAD AHEAD IS A LONG ONE. WE ARE
escape paying taxes, with the
government making filing
KEY CHANGES
Minister Satpal
In ITR 4, PAN number
Maharaj's wife and FIGHTING A PANDEMIC ABOUT WHICH mandatory in specific cases
has been made optional
former minister Amrita even in their income is below
LITTLE WAS KNOWN PREVIOUSLY” the taxable limit. With this, if Aadhaar number is
Rawat has tested
NARENDRA MODI, Prime Minister those spending over ~2 lakh provided
positive for Covid-19
on foreign travel, incurring
ITR-6 (forcompanies)
more than ~1 lakh electricity
outside resulting in wasteful expenditure on part “There is no class of people who did not suffer bills, or depositing over ~1
provides new drop-
of the honest taxpayers. Their substitutes can eas- because of this outbreak, but poor, labourers crore in current account will down utility to opt for
ily be manufactured in India,” he said. were hit the hardest,” he said. have to mandatorily file ITR. concessional tax regime
The PM said people across the country are He said, for example skill mapping of labour- Earlier, an individual was ITR Forms 3, 5 and 6
taking the reins of the leadership of the ers is being carried out at places, while at other required to file a tax return seek details pertaining
Atmanirbhar Bharat in their own hands. places start-ups are engaged in doing this. He only if the total income to assessee's choice of
“Many have mentioned that they have made said the establishment of a migration commis- exceeded the minimum
paying additional
lists of products being manufactured in their sion is being deliberated upon. threshold.
vicinity. These people are now buying only these “Recent decisions taken by the Central gov- The Central Board of income tax in case of
local products, promoting ‘vocal for local’. In ernment have opened up vast possibilities of vil- Direct Taxes (CBDT) on non-repatriation of
order to encourage 'Make in India' everyone is lage employment, self-employment and small- Saturday notified Sahaj (ITR- primary adjustment
expressing one's own resolve,” he said. scale industry,” Modi said, adding that this will 1), Form ITR-2, Form ITR-3, within the prescribed
In the context of millions of migrant workers help attain the objective of Make in India and self- Form Sugam (ITR-4), Form time limit
heading back home to their towns and villages, reliant India. ITR-5, Form ITR-6, Form ITR-
All new forms have
particularly to eastern India, Modi said “the need “Had our villages, towns, districts and states 7 and Form ITR-V for the
of the hour is devising a new solution — a para- been self-reliant, problems facing us would not assessment year 2020-21.
a separate table to
digm” in that direction. He said his government have been of such a magnitude as is evident The last date for filing of disclose tax saving
is “constantly taking steps in that direction". today,” he said. ITR has been extended to investments, donations
November 30 from July 31. made during April-June
The new ITR forms also 2020, and the amount
require taxpayers to furnish which is attributable

‘Govt, firms should take note of ICC’s suggestions’

EXIM MATTERS
T N C RAJAGOPALAN
The International Chamber of
Commerce (ICC) has called upon gov-
ernments and large businesses to
cooperate and coordinate their
responses to ensure that immediate
stimulus efforts flow into the real
economy, particularly to the micro,
small, and medium enterprises
(MSME) and their workers, who are
the most vulnerable to the economic
disruptions caused by Covid-19.
The ICC wants the governments to
provide direct and immediate support
to small businesses to ensure their
continued operation, provide direct
and immediate support to workers
and those most vulnerable, ensure
that support reaches MSMEs and their
workers quickly, and adapt to exist-
ing government-led social pro-
grammes. Other measures include
ensuring open trade and expedited
flow of essential goods across borders
and implementing dialogues between
government, employers, workers, and
communities.
To avert worst-case scenarios, gov-
ernments should extend and increase
social protection for all those without
coverage or with inadequate coverage,
provide emergency income support
and temporary direct cash payments to
all vulnerable households to ensure
dignified living conditions, the ICC has
recommended.
It has also suggested governments
and the companies to provide tempo-
rary relief from mortgage/rent pay-
ments, personal and household loans
and tax payments, and ensure tailored
support for the most marginalised
workers including women, migrant
workers and refugees.
On global trade, the ICC says gov-
ernments must keep global supply
chains fluid and trade lines open and
free of encumbrances because a dis-
ruption in one part of the supply
chain puts the whole supply chain at
risk. The global chamber calls on gov-
ernments to reverse and ban all tar-
iffs, quotas and other non-tariff meas-
ures that affect the deployment of
medical equipment, medicines and
other essential goods and services,
including foodstuffs, avoid or unrav-
el unnecessary trade barriers in key
supply chains, ensure the adequate
supply of trade finance and take
immediate steps to legally recognise
the use of electronic trading docu-
mentation in lieu of paper-based doc-
umentation to ensure the continued
shipment and release of goods. The
ICC has also suggested ten ways to
use trade to save the MSMEs that
include immediate responses to lim-
it the damage of Covid-19, short term
measures to mitigate further disrup-
tion and mid-term measures to level
the trading field for MSMEs.
The ICC says that beyond govern-
ment action, clear and principled cor-
porate leadership is needed, particu-
larly from multinational companies,
for whom many global supply chains
exist. Companies that successfully
preserve their supply chains, opera-
tions and workforce during the pan-
demic will be able to rapidly resume
operations in the recovery phase of
the pandemic, benefitting their busi-
ness and the lives and livelihoods that
depend on them. So, the ICC exhorts
the large businesses to ensure the
health and safety of the workforce in
the supply chain, uphold contracts
with suppliers/distributors, facilitate
continued business operations of the
supply chain, insist on integrity and
responsible business conduct and
advocate for stimulus efforts to flow
into the real economy.
The ICC claims to have spoken to
more than 45 million companies in
over 100 countries. So, its set of rec-
ommendations are addressed to
developed countries, emerging
economies and poor companies as
well as the cash-rich companies and
other businesses struggling to cope
with the present crisis. Naturally, its
suggestions do not take into account
the constraints that individual coun-
tries or companies may face. Even so,
the policymakers in governments and
companies should take note of its rec-
ommendations while addressing the
challenges ahead.
email:tncrajagopalan@gmail.com
details of tax saving
investments or donations
made up to June 2020
for 2019-20 separately.
To give relief to taxpayers
facing Covid hardships, the
deadline for making invest-
ment or payments for claim-
ing deduction under Section
80C (LIC, PPF, NSC, ELSS
mutual funds, etc.), 80D
(Medi claim), 80G
(Donations), etc for FY20 was
extended till June 30 from
March 31. In addition, the due
dates for investment,
construction, or purchase for
claiming rollover benefit
for capital gains was also
extended till June 30.
The revised ITR forms
allow taxpayers to enjoy ben-
efits of their transactions car-
ried out between April 1 and
June 30.
Usually, notification for
the ITR forms comes in the
first week of April, but this
time the income tax depart-
towards deduction for
AY20-21
ment notified the two simpli-
fied forms ITR-1 (Sahaj) and
ITR-4 (Sugam) for the assess-
ment year 2020-21 in the first
week of January, which has
been further revised now.
Returns in ITR-1 Sahaj can
be filed by an ordinary resi-
dent individual, whose total
income does not exceed ~50
lakh, while Form ITR-4
Sugam is meant for resident
individuals, HUFs and firms
(other than LLP) having a total
income of up to ~50 lakh and
having presumptive income
from business and profession.
The government has
allowed assesses owning a sin-
gle house property to file ITR
using simple forms — ITR 1
and 4. Besides, the high
spenders mandated to file
returns have been allowed to
use the simple forms.

India Inc goes all out... cashbacks,discountsonAMCs,andeasyEMIoptions.

Mahindra & Mahindra has introduced “own now,
pay in 2021” scheme apart from a 90-day moratorium
offer and customised schemes for women. It is also
offering100percenton-roadfinancingandeight-year
loan tenure and other special schemes for India’s
corona warriors. Veejay Nakra, chief executive, auto-
motive division at M&M, said: “The schemes will
ease any burden on our consumers during such chal-
lenging times. To offer greater value for money, the
company has priced BS-VI models attractively and
keptpricesofsomemodelsatthesamelevelasBS-IV.”
LG India is wooing consumers with offers worth up
to ~10,000 against pre-orders placed on its website.
Buyers can also avail cashbacks of 12.5 per cent on
purchase of home appliances with cards of banks it
has partnered with. LG is also offering flexi EMI
schemes, discounts on AMCs, gift vouchers, extend-
ed warranties, and freebies on select range of prod-
ucts.
Mobile handset players, however, are staying clear
of freebies and discounts. A six percentage point
increase in rate of goods and services tax – from 12 per
cent to 18 per cent – just ahead of the lockdown crip-
Mumbai, which allows buyers to pay 25 per cent
upfront, move into the house and pay the balance
in five equal instalments of 15 per cent each every
year. Oberoi said it would bear the entire interest
cost over five years.
Bankers are, however, not very optimistic as they
feel the response to such schemes is likely to be lim-
ited, given impact on cash flows on families and small
businesses, and the wide-scale pay cuts and lay-offs.
WithinputsfromSamreenAhmad,RaghavendraKamath&
AbhijitLele
Corporate tax rate cut...
The Nifty EPS was around ~400 during the January-
March 2014 quarter. “The collapse in India’s manu-
facturing and services Purchasing Managers’ Index
(PMIs) and weakness in goods export data has been
quite extreme when compared to other Asian coun-
tries. UBS India-Financial Conditions Index tight-
ened sharply in March and April. We do not see any
respite in May, dampening any hopes of a near-term
recovery,” said Gautam Chhaochharia, head of India
research at UBS Securities India.
In all, 28 Nifty firms have declared Q4 results, of
deputy chief minister Manish Sisodia complained
that its coffers were empty. Sisodia said Delhi need-
ed nearly ~3,500 crore to pay salaries of its employees
and to keep its offices functional. He said the Delhi
government had not received the disaster relief fund
thattheCentrehassanctionedtostates.WithGSTcol-
lections plummeting to ~500 crore each in the past
two months, Sisodia said the Delhi government had
~1,735 crore currently. He said he has sought ~5,000
crore from Finance Minister Nirmala Sitharaman.
Himachal allowed opening of hotels and hospi-
tality services. Uttarakhand is also likely to do so.
Uttarakhand CM Trivendra Singh Rawat along with

Companies in other sectors are equally cognizant
of the scenario. “We understand that savings matter
a lot to consumers now, across segments, which is
why we have worked out offers ranging from long-
term lucrative finance schemes to cashbacks and
extended warranties, as well as exchange and dis-
counts on annual maintenance contracts (AMCs),”
said Kamal Nandi, business head and executive vice-
president, Godrej Appliances.
GodrejAppliancesisofferingextendedwarranties,
> BS SUDOKU # 3064
pled their power to bring down prices. Some like
Xiaomi even had to increase prices. Mobile handset
makers are, therefore, focused on financing offers to
make purchase affordable. Samsung India, the coun-
try’s largest electronics maker, has launched a glob-
alfinancingsolutioninpartnershipwithDMIFinance
to support its smartphone portfolio. “It is our 'Make
for India' initiative towards financial inclusion and
Digital India,” said Mohandeep Singh, senior vice-
president, mobile business, Samsung.
Xiaomi is ensuring credit facilities to its retailers
through the in-house Mi Credit business, said Manu
Kumar Jain, the firm’s vice-president.
According to Arvind Singhal, chairman,
Technopak, a lot of clearance sales can be expected
after the lockdown is completely lifted. “Every brand
and store will be in a hurry to clear old stocks and
make space for new products,” Singhal said.
E-tailers such as Amazon and Flipkart have also
begun offering discounts of 10-60 per cent on prod-
ucts ranging from mobile phones to durables and
apparels now that sales of non-essential retail has
been permitted. They are offering interest-free EMIs
for 12 months as well as 10 per cent discounts with
RIL’s $2-billion...
The companies, in which the group has stakes, strad-
dle varied areas. There is Asteria Aerospace, which is
developing drone technology. There is eDreams
Edusoft, which is an education technology company.
UK-based Vakt Holdings plans to digitise the global
commodities trading market. US-based Ecorithim
is working on the Internet of Things. And, at home,
RIL also has a stake in SankhyaSutra Labs, a soft-
ware simulation service company in Bengaluru.
In what is a big push in the telecom space, the
group has won patents in the US including for a
system to update the status on non-active SIMs
and to develop a system and method to determine
capacity utilisation in a network in order to provide
differential service schemes, according to patent
search public data.
Other patents it has won are for offering a seam-
less service in a mobile device and making it possible
to offer multimedia service to a legacy device. Sources
close to the company say winning the patents took
between two to four years.
which 20 reported either losses or decline in their
profit before tax (PBT) on a year-on-year (YoY) basis.
The combined PBT of these 28 index firms was down
29.2 per cent YoY during Q4 while their net profit
was down 18.6 per cent. In comparison, the com-
bined PBT of these 28 index companies was up 4 per
cent during the October-December 2019 quarter
(Q3FY20) while their net profit was up 12.4 per cent.
On a trailing 12-months basis, index firms’ PBT
was down 9.1 per cent YoY while net profit was down
4.1 per cent during Q4 based on the results declared
so far. Analysts say the full impact of the pandemic
will be visible in the corporate earnings for June and
September quarters. “I foresee a sharp decline in the
Nifty EPS in the first half of FY21 as the economy will
be in lockdown during most of April-June. This could
wipe out years of growth in corporate earnings,” said
G Chokkalingam, founder & MD, Equinomics
Research & Advisory Services. A contraction in Nifty
EPS is pushing up the valuation of Nifty, which could
make the index expensive with just a small rise in the
index level. This, analysts say, could cap the upside in
the market during the current calendar year.
all others who attended the Friday Cabinet meeting
were placed under home quarantine after a minister
who was present at the meeting tested positive.
Uttar Pradesh followed the Centre’s guidelines, as
did Andhra Pradesh and Telangana. In UP, industries
are now allowed to work night shifts, too, if they can
ensure transportation to staff. Telangana and Andhra
Pradesh were relieved at the Centre’s guidelines on
opening up. But the states are worried about their rev-
enues. Telangana is the only state to continue the 50
per cent pay deferment to the government employ-
eesforthethirdmonthinarowwhileAndhraPradesh
decided to pay salaries to its staff in full from May.
Telangana has allowed unrestricted inter-state
movement of people and has reportedly asked the
Metro Rail to be prepared to resume services this
month. Andhra Pradesh education department has
submitted proposals on reopening of institutions
with strict social distancing protocols.
Gujarat also has largely stuck with the Centre’s
guidelines,barringforafewrestrictions,especiallyfor
Ahmedabad. State public transport will be made
operational throughout Gujarat, though for
Ahmedabad special depots will be earmarked.

India begins to unlock

SOLUTION TO #3063
banking partners such as State Bank of India, and ICI-
CI Bank. Naveen Kukreja, CEO and co-founder,
Paisabazaar.com, said the schemes come with riders
and buyers must exercise caution. “Many of these
offers can really help in reducing the purchase cost.
However, before opting for such offers, buyers need
to compare them with personal loan or credit card
EMI offers available through their existing banking
relationships or other lenders.” Buyers also need to
evaluate processing fees and other charges, he said.
Medium: The schemes come on the back of findings of sev-
eral consumer research projects that show pent-up
Solution demand. The accent may be on saving rather than
tomorrow splurging during the Covid-19 crisis, but consumers,
according to a recent Nielsen study, appear willing to
HOW TO PLAY set aside some money for buying durables. According
Fill in the grid so to Deloitte, 77 per cent of consumers surveyed want-
that every row, ed to limit the use of public transit, 70 per cent are
every column avoiding ride-hailing options altogether, 79 per cent
and every 3x3 have an intention to own a new vehicle, while 73 per
box contains cent want to keep their current vehicle.
the digits 1 to 9 In the real estate sector, Oberoi has launched a
scheme for ready-to-move in flats at Goregaon in
Having developed its 5G technology in-house, Jio
has sought permission from the government to test
it. The firm is already part of the Open Source
Alliance, which is pushing for open source software
and hardware to power 5G networks. As software will
constitute 85 per cent of the cost of 5G gear, many
global firms believe that proprietary technology,
which is expensive because of royalties, should be
replaced by open source technology with operators
given freedom to buy the hardware as well as the
software from any vendor, helping to reduce costs.
In the AR/VR space, Reliance has developed tech-
nology to enable these services with a lower band-
width requirement. Talks, say sources, are under-
way with its new partner Facebook, which has taken
a 9.99 per cent stake in Jio Platforms, to leverage this
technology with Facebook’s expertise in areas such as
e-commerce, media, travel, and tourism.
In artificial intelligence and machine learning,
Reliance’s own R&D teams are working closely with
Indian companies Haptik and Embibe.com (in which
it has stakes) to work in education, customer care
and chatbots, among others.
Rajasthan on Sunday allowed full attendance in gov-
ernment and private sectors. The Ashok Gehlot gov-
ernment also allowed interstate and intrastate oper-
ation of buses, while providing that the buses would
ply within the state only on permitted routes and
outside containment zones. City buses, however,
were yet not allowed to ply.
Tamil Nadu said malls and places of worship
would remain shut, but opened hotels and restau-
rants. It also restricted inter-district bus services.
Except in Chennai and containment zones, all firms
can function with 100 per cent employees from June
1. In non-containment zones of Chennai, all private
firms can function with 50 per cent workforce. Public
transport will resume with reduced services from
June 1, but buses will not be operated in Chennai,
Kancheepuram, Tiruvallur, and Chengalpet districts.
The state has allowed salons to operate without ACs.
Giventhatitisaquasi-state,Delhihasfollowedthe
Centre’s guidelines to open up considerably, but
Ahmedabad and Surat will have intra-city bus serv-
icesoperateat50percentoccupancy,whileitis60per
cent capacity for areas outside containment zones.
Street vendors will be allowed to operate from June
8 in areas designated by urban local bodies. The state
is yet to release a list of containment zones.
West Bengal has extended the lockdown till June
15. It has allowed private firms to operate with 100 per
cent workforce from June 8. Construction activities
havebeenallowedatfullcapacity.Governmentoffices
willoperatewith70percentworkforce.Hotels,restau-
rants, and malls can open from June 8. Religious
places have also been given permission to operate
from June 1. However, Tarapith temple said it would
remainclosedandtheBengalImam’scommitteesaid
it would rather have mosques closed for now.
Karnatakaallowedinter-statetravel,butsaidthose
coming from Maharashtra will have to spend seven
days in institutional quarantine.
WithinputsfromAvishekRakshit,TENarasimhan,
VinayUmarji,DasarathReddy,VirendraSinghRawat,
JayajitDash&ArchisMohan
.
MUMBAI | MONDAY, 1 JUNE 2020 7
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8 ISSUES AND INSIGHTS
>
MUMBAI | MONDAY, 1 JUNE 2020

The problem with Aarogya Setu to be stored or shared since it includes

medical information and location.
Anonymising is hard. The protocol does-
n’t detail how anonymising will be done.
CHINESE WHISPERS

The app gathers a lot of data, which is unnecessary for the task it supposedly performs
This is iniquitous for many reasons.
One is that India lacks a privacy law,
which means there is no legal redress
for being placed under surveillance.
The second reason is, the AS app
requires a smartphone to run. Roughly
500 million Indian mobile subscribers
don’t have smartphones and this is
therefore, a barrier against travel for
500 million citizens.
TECH-ENABLED After pushback from civil society,
the protocol for data-sharing was
DEVANGSHU DATTA released. This protocol was opaque and
released on the website GitHub. Now it
turns out the code released on GitHub
was not only incomplete; it is not the
actual code the app is running according
to researchers.
Contact tracing apps have been
released by governments in Singapore,
Israel, UK, Australia, Italy, Austria,
Germany, etc. Such apps have also been
jointly developed by Google and Apple,
ensuring smartphones running Android
or iOS are covered.
The government apps, as well as the
accessed if asked for. The AS data is
stored on the handset but it can
uploaded to a cloud server at the gov-
ernment’s discretion.
AS uses Bluetooth and location data.
Most other apps use Bluetooth but many
don’t use locational data. Some use the
new DP-3T (Decentralized Privacy-
Preserving Proximity Tracing) protocol
developed post-pandemic. DP-3T
assigns randomised anonymised unique
IDs to users. Those IDs change every so
often. Google-Apple uses a similar sys-
It is easy to de-anonymise, if any clues Poster war in MP
remain. For example, given a phone
number, or handset EMEI, the user is
known. Given location data over 30 days,
it would be possible to write a dossier
detailing users’ habitual routines.
Net-net, the app gathers a lot of data,
which is unnecessary for the task it sup-
posedly performs. How it stores this data,
and how and why this may be shared is
also opaque. The server-side code is def- As Assembly bypolls draw near in Madhya
initely not open-source. The app may Pradesh, the poster wars have also
exclude people who don’t own smart- intensified in the state. It started when
phones from travelling. The data it MP Congress Spokesperson Siddharth
gathers could be used to build a profile Singh Rajawat was arrested for putting
of every user’s daily routines. up posters in Gwalior, declaring former

T
here are new developments in
the controversy around the
Aarogya Setu (AS) app. The app
was officially designed for con-
tact tracing, like many other apps devel-
oped and released by governments, as
well as multinational corporations.
The AS app does not conform to global
best practices in many ways. It was
denounced for being surveillance soft-
ware by many IT researchers. It was
forced down the throats of Indians, before
there was legal challenges, unlike contact
tracing apps released in other countries.
ambiguous in several key respects.
Personal data including medical infor-
mation and location data would be
gathered and stored for a minimum 30
days, and maybe till November 2020,
or even later.
The data could be shared with any
government organisation, and also with
private organisations if deemed “neces-
sary”, without details as to when and why
it would be necessary. While data would
be anonymised, the anonymisation pro-
cess was also not indicated.
Soon after release, researchers
reported bugs. The code was then
private sector apps are mostly open-
source. Open source allows code to be
studied by independent researchers.
Bugs can be quickly discovered and
patched. It is important source code for
both user and server-side operations is
open to identify and plug security
leaks. The AS app did not release
server-side code. Researchers say the
actual code is not what has been
released on GitHub.
Apart from China, most governments
have not made using contact-tracing
apps mandatory. In many apps, data is
stored on the user’s handset, to be
tem. These ephemeral IDs allow prox-
imity to a corona-positive person to be
picked up without identity or location
being disclosed.
If bluetooth is on, two handsets com-
municate if they are in close proximity.
Hence the app will flag proximity to users
who may be corona-positive. This can
throw up false positives — Bluetooth
works through walls. But location is not
recorded. (Location also throws up false
positives.) AS uses location data, which
means whereabouts and movements of
users is known 24x7.
Data must be anonymised if it is going
India lacks a digital privacy law
though the Supreme Court ruled that was
a fundamental right in September 2017.
A Committee under Retired Justice B N
Srikrishna drafted a model law, released
into public domain in July 2018. That
model legislation has since been
redrafted in a fashion that Justice
Srikrishna described the redraft as
“Orwellian”. The new draft legislation
proposes to allow the government to per-
form surveillance as it likes, with no
checks and balances. The design of the
Aarogya Setu app will facilitate wide-
spread surveillance.
parliamentarian Jyotiraditya Scindia
(pictured) was “missing”. In the posters,
Rajawat declared anybody who was able
to locate Scindia would get ~5,100 as prize
money. Again, over the last weekend,
several gumshuda ki talaash (search for
the missing) posters came up in Bhopal,
claiming that the Lok Sabha MP from the
city, Pragya Thakur, was “missing”.
“Corona mahamari mein Bhopal ki janta
pareshan. Sansad Pragya Thakur kahan
lapata? (while residents of Bhopal are
distressed because of the coronavirus
outbreak, where is their MP?)” Similar
posters were also spotted in Chhindwara,
claiming that former chief minister and
MLA Kamal Nath and his MP son Nakul
Nath were also missing.

Banker as Covid warrior

Afterdemonetisation,Covid-19isgivingabigpushtodigitalbanking
India, launched a UPI QR-based loan
instalment payment facility for its cus-
tomers in end-March. QR or quick
response code is a type of 2D bar code
that is used to provide easy access to
information through a smartphone. This
channel is typically used for P2P (person
to person) and P2M (person to merchant)
payments. A total of 4 million customers
of this SFB can also check the balances
BANKERS’ TRUST in their savings accounts and fixed
deposits via their mobile phones.
TAMAL BANDYOPADHYAY Kotak Mahindra Bank has recently
introduced video KYC to open savings
towns and even in villages, cash-strapped
families are rushing to bank counters to
borrow against gold ornaments.
This is one part of the banking story
in India during the current pandemic.
The other part is the grit and determi-
nation with which the bankers are going
about their business these days, at times
even risking their lives. Like doctors,
health workers, police and media per-
sons, bankers are also Covid warriors.
They are with their customers to meet
their banking needs and more.
On November 8, 2016, when Prime
dents (BC), popularly known as bank
mitra, too. There are around 800,000 BC
outlets across India; typically each outlet
is managed by two BCs. Of these BCs,
126,000 work exclusively for the
Pradhan Mantri Jan Dhan Yojana, which
covers 387.3 million depositors. The
movement of migrant workers from
being treated at the Bombay Hospital for
12 days. Eight employees of State Bank
of India’s Kaveripakkam branch in
Ranipet district in Tamil Nadu were
quarantined after one banker — on a
three-day deputation at that branch —
tested positive. The assistant manager
at the bank’s Ranipet town branch went
back to Chennai after the district admin-
istration ordered suspension of bank
operations in Ranipet town. When the
manager of the bank’s Kaveripakkam vil-
lage branch went on a three-day leave,
the assistant manager of the Ranipet
town branch was deputed to the
Kaveripakkam branch.
These bankers may have got the
virus from their customers. Six employ-
ees of State Bank’s Park Town branch
in Chennai were found to be Covid
positive after they visited the nearby
Rajiv Gandhi Government General
Lego & NITI
Lego Group, the Danish toy brand, is
collaborating with the NITI Aayog and
Save the Children to give kids frustrated
by the lockdown restrictions something
to smile about. It is working on a project
to improve access to quality pre-school
education through the government’s
Integrated Child Development Services
(ICDS) and pre-school centres when
they re-open. It will also collaborate
with the Atal Innovation Mission of the
NITI Aayog, under which the toymaker
plans to provide offline and online
resources and play activities for
students, and also webinars under a
“Tinker from Home” campaign.

B
askar Babu Ramachandran,
managing director and CEO of
Suryoday Small Finance Bank
Ltd, says at least 100,000
microfinance borrowers of his bank paid
their loan instalments through digital
channels in May. His bank has around
1.3 million such customers.
Loans have always been disbursed
digitally but when it comes to repayment
of loan instalments or collection, as
opposed to disbursement by the bank,
each and every borrower of Suryoday
SFB has paid in cash till March this year.
In April, a few thousand customers used
the digital channel as they were confined
to their homes because of the lockdown.
In May, that number swelled to 100,000.
Another unlisted small finance bank
headquartered in Bangalore, along with
the National Payment Corporation of
accounts. This is a pilot project and
the bank wants to extend this to get
customers on board in a zero-contact
digital way for other products in a
phased manner.
Three years ago, demonetisation gave
a big push to digital banking in India.
Now Covid-19 is giving it an even bigger
push as bank customers are opting for
social distancing. Even octogenarian
pensioners are refraining from visiting
branches and instead learning how to
bank through their mobile phones from
their grandchildren.
This is a good omen. All banks are
gearing up to seize the digital opportunity
to bring down the cost of customer acqui-
sition and cut down the turnaround time
for transactions. The crisis is also opening
up new business avenues for banks. For
instance, the demand for loan against
gold has been rising every day. In small
Minister Narendra Modi made the his-
toric announcement of a currency swap
which was to replace 86 per cent of
~17.97 trillion worth of currency in cir-
culation, most branch managers could
not sleep well till the 50-day exercise got
over on December 30. They had to make
sure that every customer was taken care
of, old high-value currency notes were
exchanged with new notes, and that the
bank could use the opportunity for gen-
erating low-cost current and savings
accounts. On top of that, they needed to
be on their toes so that none of their col-
leagues was used for money laundering.
For the 155,000 branch managers in
India, the Covid-19 time is far more chal-
lenging than the demonetisation days.
For the record, India has the maximum
number of bank branches globally, fol-
lowed by China and Columbia.
This is true about banking correspon-
cities to their native places has made
their job much more difficult.
Rajkiran Rai G, managing director of
Union Bank of India, talks about a
branch manager in Thane, Maharashtra,
who goes to this workplace every day in
public transport, changing three buses.
The working hours at the branches have
been cut and footfalls have come down
but work has not been reduced to that
extent since the employee strength has
been halved as each of them comes to
the branch every alternate day. On top
of that, there is the lurking fear of being
affected by the virus. In one branch of a
private bank in Mumbai, I have seen a
sofa set kept in front of the counter of
the cashier to create distance between a
customer and the banker.
A 56-year-old employee of the Malad
branch of IDBI Bank inMumbai died of
the novel coronavirus on May 1 after
Hospital to distribute masks, sanitisers
and food packets.
The Pradhan Mantri Garib Kalyan
Package,athree-monthinsurancescheme
for health workers fighting Covid-19
beginning March 30, offers
~50 lakh to health workers if they die while
discharging their duties fighting Covid-19.
This does not cover bankers. Public sector
banks have announced up to ~20 lakh
compensation for their employees till
September 2020 in case of death on duty
due to Covid-19. That’s too small a cover
for what these Covid warriors have been
doing for their customers and businesses.
The writer, a consulting editor with Business
Standard, is an author and senior adviser to
Jana Small Finance Bank Ltd.
Twitter: TamalBandyo
To read the writer’s previous all previous
columns, please log into www.bankerstrust.in
Return of disputes
The return of more than 2.5 million
migrants to Uttar Pradesh is not only
posing a tough socio-economic
challenge to the state government but
has also got the state police machinery
on its toes. The UP police are expecting a
spurt in disputes on property and similar
things in the families of the migrants. UP
Director General of Police (DGP) Hitesh
Chandra Awasthi has directed senior
officers, posted in different zones and
ranges, to be alert about the potential
causes that might fan disputes involving
property or over old enmities, political
affiliations, caste, etc. In a circular, the
DGP has ordered beat constables to
maintain constant vigil and collect
relevant information so that preventive
action can be taken.

AS I SEE IT
Sifting through Covid stats
Isthefightagainstthevirusgettingtougher?Dowehavetheinfrastructureto
handleaspikeinthehinterlands?Andwhatabouttestingfacilities?
late the curve and bring the peak
sooner. That’s because their positivity
rate is said to be double or triple the
national average. They could spark off
a new surge in rural UP, Bihar, Orissa
and Bengal.
Do we have the health care infras-
tructure to handle a spike in these hin-
terlands? How many of the thousands
of corona hospitals and corona-care
centres are in rural UP or rural Bihar?
KARAN THAPAR And what about testing facilities?
Meanwhile, the government insists
rate, which is 4.9 per cent compared to
Spain’s 10.5 per cent and UK’s 11.7 per
cent, and the fact only 6.4 per cent of
our cases need hospitalisation and less
than 0.5 per cent need ventilators com-
pared to around 3 per cent globally, and
ask does this suggest the virus is less
virulent in India or do Indians, for wha-
tever reason, have better immunity?
Health Minister Harsh Vardhan says
“it’s not that virulent”. Dr Guleria told
me the government has data which
suggests the virus has mutated and its
INSIGHT
An opportunity in disguise
Covid-19offersanopportunitytoimprovecablesubscriptioncollections
usingdigitalplatforms—awin-winforstakeholders
Additionally, these losses continue
to reverberate through an elaborate
network of partnerships including,
MSOs, broadcasters, and the govern-
ment exchequer. MSOs or multi-sys-
tem operators are channel partners
that provide LCOs access to specific TV
channels. The network of LCOs and
MSOs is known as distribution plat-
form operators or DPOs that control
T V RAMACHANDRAN the vast highway of channels. Isn’t
there a more effective method to plug
deals with small amounts, saw a 16 per
cent increase from 2018 to 2019
(MediaNama).
Sectors that digitised operations
reaped immense benefits (McKinsey).
For example, the logistics industry
reduced fleet turnaround time by 50-
70 per cent. Post-demonetisation,
India’s rank on the World Bank’s Ease
of Doing Business Index leapfrogged
to 77. The time is ripe for India to
streamline the payment process for

O O
n the assumption today’s
the first day out of lock-
down, let me attempt to
answer a question that must
be at the back of many people’s minds:
What’s the true picture of the spread of
Covid-19? Over the last 65 days we’ve
had a bewildering profusion of statis-
tics often pointing in different direc-
tions. So a clear understanding may be
difficult.
As of 9 am on Saturday, May 30, the
health ministry’s website reports
173,763 cases of Covid-19, which is more
than double that of China. Also, accord-
ing to the Hindustan Times, the daily
average of cases and deaths calculated
on a weekly basis has grown every week
for the last nine weeks. Today we have
more Covid-19 deaths than China.
Finally, according to Worldometer,
India is ninth in terms of overall cases
but has the fifth-largest number of
active cases. Does all this suggest the
fight against the virus is getting
tougher?
The lockdown was intended to
flatten the curve but that clearly hasn’t
happened although it’s not growing as
steeply as we feared. Now the govern-
ment has produced mathematical
models to claim up to 78,000 deaths
and 2.9 million cases have been
averted. But AIIMS Director Randeep
Guleria says “mathematical modelling
is a rough guess”. Similar modelling in
America has gone horribly wrong.
Some projections suggest we’ll
reach the peak in June/July, others say
August/September. But the tens of mil-
lions of returning migrants could esca-
India hasn’t entered community trans-
mission. But with 173,763 cases, that’s
hard to believe. Epidemiologists like
T Jacob John claim it began as far back
as March 18 when a young man trav-
elled from Delhi to Chennai and tested
positive on arrival but had no history
of foreign travel or meeting someone
who is positive. When I asked
Dr Guleria, he said whilst we can claim
we haven’t reached nationwide com-
munity transmission — because in
large parts of the country, the number
infected is very small — it’s hard to
deny we’ve reached that stage in our
multiple hotspots.
If all this suggests things could get
worse before they start getting better,
we also have statistics that offer com-
fort and re-assurance. Lav Agarwal
doesn’t miss an opportunity to broad-
cast them. Let’s consider some.
First, India has a recovery rate of 42.8
per cent. However, Italy with 33,229
deaths has a recovery rate of 65 per cent
whilst Spain’s with 27,121 deaths is 69
per cent. So clearly a high recovery rate
does not preclude a disturbingly large
number of deaths. In which case how
comforting is India’s recovery rate? No
one asked Lav Agarwal but Jayaprakash
Muliyil, a former principal of Christian
Medical College, says, ultimately recov-
ery rates will be roughly the same all
over the world.
The other statistic Mr Agarwal loves
to cite is the mortality rate. On Tuesday
(May 26), he announced three versions.
In percentage terms, it’s 2.87 (compared
to a global average of 6.36), per lakh it’s
0.3 and per million it’s 3.08. You could
add to this India’s low overall infectivity
virulence has diminished but this
needs confirmation. But on Thursday
(May 28), the PM’s principal scientific
advisor Prof. VijayRaghavan seemed to
disagree.
Of course, if we’re to draw comfort
from our low mortality rate, we need to
ask how accurate is it? Several papers
suggest Delhi’s municipal corporations
are reporting more than twice as many
corona-positive cremations and burials
compared to the Covid-19 deaths
acknowledged by the government. I’m
sure that’s happening elsewhere too.
And in rural India, it could be worse
because I doubt if we have a reliable
way of determining the cause of death.
Still, if a lot of deaths had happened
we’d have found out. In the age of social
media, they’re difficult to hide. So even
if the actual mortality rate is higher
than the reported, it’s probably still
comfortably low.
Now what should we make of all
this? We haven’t flattened the curve but
it’s not rising as steeply as feared. Also,
the later the peak the easier for our
health care system to cope. Finally,
there are good reasons why our mor-
tality rate could be amongst the world’s
lowest, the most credible of which is
90 per cent of Indians are under the
age of 60.
The problem is our minimal testing
levels. As of Saturday, it’s only 2,619 per
million compared to Spain’s 76,071 and
Italy’s 62,102. Most importantly, we
need mass serological surveillance to
establish how far the virus has spread.
At the moment we just don’t know. The
ICMR is doing that in 69 out of 739 dis-
tricts. But is that enough?
ver 50 million Indian sub-
scribers pay to watch their
favourite shows on paid
cable TV, even in the days
of endless free entertainment on
Youtube, TikTok, and social media. No
wonder the Indian pay-TV market, one
of the fastest-growing in Asia, was
expected to reach $16 billion by 2023
(MPA). Well, at least until the Covid-19
pandemic hit.
Due to a nationwide lockdown, TV
consumption rose 38 per cent com-
pared to pre-Covid times (BARC-
Nielsen). However, the pandemic dis-
turbed the entire cable TV supply chain
— from creators of TV programmes to
viewers. Broadcasters have been unable
to produce fresh content or conduct
sporting events, leading to a 26 per cent
dip in advertisement revenue (BARC-
Nielsen). It is an enormous drain on the
broadcasting and cable sector (B&CS).
In March, local cable operators or
LCOs saw revenues dip by 80 per cent,
largely since the primary mode of pay-
ment collection is cash. Due to the pan-
demic, collection activity was curtailed.
Even though eventually cable operators
were deemed to be essential services
andlockdownmeasureswereeased,the
coronavirus remains highly contagious.
It is still of paramount importance to
safeguard the health, safety, and well-
being (HSW) of LCO collection staff and
their customers. It is impossible for
door-to-door collectors to stay one
metre away from customers when col-
lecting cash. Surely, there is a better way
to collect payments without endanger-
ing LCO staff and their customers?
the potential revenue leakage for
upstream stakeholders?
A mandate on digital payments in
this sector could ease some of the load.
It would also reduce LCO billing and
collection costs and avoid the risk of
spreading infection between LCOs and
the larger public. Right now, sub-
scribers can opt for either a prepaid or
a postpaid model. Many choose post-
paid services and pay cable operators
in cash each month. If the telecom reg-
ulator (Trai) advises DPOs to offer pro-
motions or discounts for à la carte and
bouquet MRP pricing, these users
would be incentivised to convert to a
prepaid digital payment model.
Digitising is a vital buffer against
further disruptions.
It is time the cable industry
embraced the Digital India movement.
Previously, an LCO could have objected
to migrating users to a digital path due
totheresourcesrequiredtoeducatecus-
tomers. Thanks to a massive push by
the central government and technologi-
cal advances in digital payments, this is
becoming a moot point. Even kirana
shops and small vegetable sellers accept
digital modes like PayTM or PhonePe.
Adoption is rapid as customers become
receptive to the digital landscape.
Ninety nine per cent of Indians are
on the Aadhaar system. The govern-
ment is transferring coronavirus relief
packages digitally to citizens through
the Jan Dhan Yojana programme. Set
to grow over 20 per cent for the next
four years, the volume of Indian digital
payments is expected to surpass even
China’s (KPMG). Even the prepaid pay-
ment instruments industry (PPI), that
the cable TV industry.
Due to the Covid-19 crisis, the gov-
ernment requested broadcasters not to
cut services even if payments could not
be collected. We are talking about 117
million subscribers. Any drop in pay-
ments can and should be mitigated
digitally. Broadcasters can then afford
to keep the services activated and
maintain their active workforce. The
ultimate beneficiary is the viewer with
uninterrupted viewing of channels.
In the short term, a Trai mandate
that B&CS collections should be
through digital payments could offer
relief to the struggling sector. DPOs
could promote incentives on both à la
carte and bouquet pricing and drive
subscribers to prepay, digitally. In the
longer-term, the Trai could recom-
mend that MIB implements a perma-
nent mandate for end-to-end electronic
payments in this sector through the
licensing conditions for all the licensed
broadcast distribution platforms.
In Dan Millman’s book, Way Of The
Peaceful Warrior: A Book That Changes
Lives, a character named Socrates said,
“The secret of change is to focus all of
your energy not on fighting the old but
on building the new.” Opportunities
are ripe to build a robust framework of
digital B&CS payments. Incentivising
subscribers to favour digital prepaid
payments will modernise a valuable
Indian industry and improve the qual-
ity of service.
The author is hon. fellow IET (London) &
president, Broadband India Forum.
Research inputs by Chandana Bala
Views are personal
 >
OPINION 9
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Volume XXIV Number 197 ILLUSTRATION: AJAY MOHANTY

community will slow down the epidemic.
MUMBAI | MONDAY, 1 JUNE 2020 Despite the best decisions by individuals and
neighbourhoods, the disease will spread, and there
is a possibility that much more capacity will be

Slowdown, then pandemic required in health care. Much more needs to be

done to gear up in terms of establishing greater
health care capacity.
GDP data shows virus hit an already weakened economy The bulk of health care in India is private. Hence,

T
he National Statistical Office last Friday released its provisional esti- we require the Indian private health care sector to
be working at full swing, looking for ways to achieve
mates of gross domestic product (GDP) for the fiscal year 2019-20, as
much larger capacity, fighting a health care problem
well as its quarterly estimates of GDP for the last quarter, January- of epic proportions.
March, 2019-20. The headline estimate, for the year 2019-20, is low Unfortunately, the Indian private health care
by Indian standards but not as low as many feared: Growth in 2019-20 at sector is facing severe difficulties. Some health care
constant prices would be, according to the statisticians, 4.2 per cent, as distinct workers have retreated from their work. Patients
from the over 6 per cent growth registered in 2018-19. The slowing in nominal are postponing their health care requirements
GDP growth is even sharper. owing to a fear of infection. The decline in revenues
The quarterly numbers were being carefully watched to see what the impact has created financial stress in many health care
ofthenovelcoronaviruspandemicwouldbe.Giventhatthenationwidelockdown firms. While the ambition of health care policy
should be to increase capacity for the simple sup-

Health policy for

was announced only towards the end of March, that itself would not impact the
portive care that is required for Covid-19, what we
numbers enormously; but state-level lockdowns had begun to be imposed a have is degraded capacity through the combination
little earlier, and of course the pandemic had already begun to affect supply of finance and human resource (HR) crises.
chains by then, particularly those that relied on China. The index of industrial State organisations have occasionally wielded
production in March 2020 had contracted almost 17 per cent year on year, after coercive power and commandeered private health

the coming year

small expansions in the previous months. Given these concerns, the last quarter’s
GDP growth of 3.1 per cent was not a surprise. Overall, these numbers would
suggest that the immediate effect of the pandemic on India’s economy is not as
worrisome as elsewhere.
Yet jumping to that conclusion would be a mistake. There are several points
to be noted. First, the impact of the stringent national lockdown will really be
evident in the numbers for the April to June 2020 quarter. Second, there are
considerable statistical questions to be asked about the last quarter’s numbers,
which might lead to large downward revisions in the estimates in the near future
care facilities. This approach will disappoint for
three reasons. First, there is much more to an airline
than the hardware, the aircraft. There is much more
to a hospital than physical infrastructure and med-
ical equipment: A hospital is a complex web of infor-
mation and incentives. If a state agency seizes con-
The priority for health policy is now a decentralised process trol of the physical facility, the organisational
for testing and engaging with private health care capability could melt away, particularly given the
finance and HR crises that these organisations face.
Second, the health care capacity required in India

W
— senior government statisticians have said as much explicitly. Furthermore, it hile the lockdowns are easing, the pan-
is clear that the pandemic hit an economy that was already showing distinct demic is not. How should health policy
signs of weakness and a slowdown. In particular, gross fixed capital formation play for the coming year? In public health,
the key gap is the population-scale measurement,
(GFCF) has been in crisis over the 2019-20 fiscal year, shrinking in several quarters.
which will generate better private decisions, and
Without investment there can be no growth. Government spending has primed also help the decentralised process of evolving
the growth pump in recent years, but it is running out of fiscal headroom now. social distancing rules. A large expansion of health
RecoveryfromCovid-19isthereforedoublydifficult,astheeconomyisstructurally care capacity is prudent. This requires a wise
weak at the moment and the government is already resource-constrained. engagement with private health care firms, which
The short-term outlook for the economy depends upon the pace and nature are under great stress today.
of the re-opening. Even China is still operating at about 90 per cent after ending India started out in late
its strict lockdown; there is every expectation that economic activity will be at a March with what has been
lower level during the course of the pandemic. Thus a snap-back to previous described as the world's most
comprehensive lockdown.
levels of production — a V-shaped recovery — might be too much to expect.
From mid-April, a pragmatic
Aside from the course of the pandemic, however, there are other considerations process of easing restrictions
when it comes to the longer-term outlook. High among them is whether the has begun. The employment
government carries through on its promise of structural reform, which could rate, which was at 40 per cent
attract investment, particularly to manufacturing. Given the banking crisis and in February-end, and had
the strains on public finance, foreign investment in productive assets in India dropped to 26 per cent in mid-
becomesanecessityfor stability and recovery. Given thatthelong-term slowdown April, is back to 29 per cent. It
is expected that this will recov-
oftheeconomyhasnowbeenexacerbatedbythepandemic,thereisnoalternative
to painful structural reform.
er further in the coming SNAKES & LADDERS
weeks. There is an unmistak-
able sense of moving towards AJAY SHAH
normalcy in everyday life.
outcome, but there is a possibility of a bad outcome,
and that bad scenario is sufficiently bad to justify
effort today in forestalling it. Hence, we should be
willing to undertake large-scale efforts on health
policy starting today, in order to fare better if the
bulk of the pandemic lies in the next one year.
Health policy consists of two prongs, prevention
(i.e. public health) and cure (i.e. health care). On
prevention, the standard methods of isolation and
social distancing have not worked too well, with
the possible exceptions of
Kerala and Tamil Nadu.
How can public health do
better? We should undertake
decentralised work, at cities
and districts, to measure the
state of the population using
polymerase chain reaction
(PCR) and antibody testing.
Where has the disease reached
so far? What kind of people
have developed immunity?
How far are we from herd
immunity? This measurement
needs to take place, one sub-
urb and one village at a time.
for a gloomy scenario does not exist today, and the
only people who have the management capacity to
rapidly build and operate large new facilities are in
the private sector. But state coercion will not elicit
their energy and passion. Third, each act of expro-
priation sends a wrong message to the private sector;
it diminishes the commitment of private persons to
build organisations in India for the coming decades.
How can we do better? Health care policy needs
to recognise that 70 per cent of health care in India
is done by private firms. This vital sector is facing a
crisis right now and needs help in overcoming this
crisis. Policymakers need to understand and respect
the pursuit for profit, by private health care firms,
and give them the appropriate incentives to play
the dominant role in a scenario where a surge in
health care capacity is required.
Local and state governments should invite vol-
untary participation by private health care firms to
build new capacity for Covid-19 care. This requires
sophistication on the part of the government in
public financial management (PFM). The govern-
ment should pay a fixed cost at the commissioning
date so that the private firm does not take traffic
risk. These additional facilities would then be there
for us, for the scenario of a large increase in hospi-

Unlocking India At the same time, the pandemic is still with us.
The data on infections and deaths has many prob-
lems, and we should be cautious about using this.
Reopening essential; time for awareness campaigns The data does, however, suggest that a large number
Why are these facts useful? First, when each
individual is presented with salient information
(the share of antibody-positive people, and infect-
talisation for the coming year.
This will call for financing. Back of the envelope
calculations show that large resource flows will
ed people, in my neighbourhood) and the charac- need to be organised, to pay private firms for testing

T
of persons in India are infected and that the pan-
he government on Saturday issued further instructions on the national
demic is spreading. Simplistic multiplication of
lockdown, which has been in effect with various levels of stringency age-specific infection fatality rates, applied to the
since the end of March. The salient issue is that, with effect from June Indian population, yields large values.
8, most restrictions in areas outside designated containment zones Looking forward, a risk management approach
for the coronavirus will be lifted, and many normal activities will be permitted. is useful. We don't know that there will be a bad
These include hospitality services and shopping malls. Importantly, the Centre
has advised that there should be “unrestricted” inter-state movements of persons
and goods; however, this will be subject to state government decisions. Giving
power where it is due is a welcome move in a structurally diverse country such
as India. So all states need not unlock in the same manner or at the same rate.
There should only be transparent agreements on key metrics so that the scope
Migrants: Future of work and production
E
for political brownie points is minimised. vents are moving so fast in our world. It was
Giving consideration to livelihood and economic sustainability was overdue, just two weeks ago that I wrote how the eco-
anditiswelcomethatgoodsensehasprevailedinthisrespect.However,questions nomic collapse because of Covid-19 had
can and will be asked about timing, nevertheless, and on how the policymakers’ made the invisible visible. I wrote about the images
calculations may have changed. After all, India now has 173,000 cases and over of migrant labourers that haunt us, who made their
5,000 deaths. Further, the daily rate of increase in confirmed cases continues to way from villages to cities for jobs and are now
walking back home because of job loss — often
set records. About 8,000 were registered on the very day of the government’s
dying and collapsing with hunger. Since then, the
notification, Saturday — another new record in terms of single-day increases. migrant crisis has made its way into our homes;
The government needs to be more open about its strategy to live with the pan- into our living rooms; and into our consciousness
demic. Clearly activity cannot return to the pre-virus “normal”, given that some like never before. We have seen them; we have felt
form of social distancing will continue to be imposed. Already in areas that have their pain; and we have wept
a concentration of Covid-19 cases — Mumbai city in particular — are suffering when we heard how tired
some strain on hospital facilities. The original argument that this strain cannot migrants sleeping on train
in any way be allowed to spread to areas of India under-served by tertiary care tracks were crushed to death
continues to apply. by an incoming train.
But it is also important to
In effect, the responsibility has now been passed to state governments and
note that their pain has not gone
district administrations to identify localities that host outbreaks, declare them unnoticed — trains have been
containment zones, and put in place the restrictions on movement into and out started to bring migrants back
of them. They will also have to determine the regulations underlying the resump- home. But as yet, all these
tion of normal life. But the fact is that without sufficient testing this continues to efforts, including the move to
provide free food to the return-
be a tough ask. Testing in India remains at an abysmally low level — 2,500 tests
per million, one explanation of why the detected case rate in India is also so low. DOWN TO EARTH
ing people, are still too little, too
The reason for the lockdown was partly to put in place mechanisms for dealing meagre, and almost seemingly
reluctant. Much more needs to
SUNITA NARAIN
with the pandemic, including expanding testing facilities. The government
be done to take them home with
shouldnowexplainwhethertestinglevelsareinfactsatisfactoryandasenvisioned dignity and to provide them the wherewithal to survive
at the start of the lockdown, and how those fit into its broader strategy to contain in the coming months.
virus breakouts. However, what we need to discuss now is not
State governments must now rise to the occasion, and put in place granular just the returning migrants but what this will mean
and well-publicised control measures. As the public returns to the streets and for the future of work and the future of production
mingles in workplaces, constant reminders of the danger and education about — not just in India but across the world. So, what
the nature of the virus’ spread in vernacular languages and innovative ways are happens to work now — workers have returned
a must. The period of strict control is clearly at an end; now India moves to a home; they may come back as things improve or
they may not. Already in Indian cities, we are getting
period which depends upon community and individual co-operation and data
news about how essential municipal services are
collection and analysis. This will strain state capacity, but there may be no option. affected without this workforce. We are getting news
about the panic of builders — industry is finding
teristics of people who have got the disease, each
person will make better decisions on how to mod-
ify everyday life. Second, each community will
use this data to make better local decisions about
the activities that can be safely restarted. Better
decisions at the level of each individual and each
that even when lockdowns are lifted, production
needs workers.
So, the value of their work — the worker who was
until now dispensable and cheap — is being felt.
These workers were kept in the worst conditions;
sleeping and eating in hovels — inside the “sweat”
factory that the world has come to know. There is
no government housing or transport or any other
such facility for industrial areas — factories are sup-
posed to produce and workers are supposed to find
whatever means they can to survive. We know that
people live cheek-to-jowl with
industry — this makes them
vulnerable to toxic gas leakages
or pollution. But have we ever
stopped to ask why these infor-
mal, illegal habitations are
built — because there is no
housing provided. But labour
needs jobs; industry needs
labour. But now labour
has gone; some say they will
never return.
Work needs to be reimag-
ined. In areas where people will
return, this is the great oppor-
tunity to renew rural
economies and make them resilient. But this is not
going to be easy. Just consider how, in the 1970s,
when Maharashtra had the great famine looming
and it feared massive unrest in its cities because of
a rural exodus, one man, V S Page, a Gandhian, had
come up with the scheme to keep people employed
at their place of residence. This was the start of the
Employment Guarantee Scheme (EGS), which mor-
phed into the Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA) many
years later. But what we forget as this programme
took the avatar of government rules is that it was a
and for health care. Fiscal planning is required,
through which these resources reach the cities and
the districts.
The writer is a professor at National Institute of Public
Finance and Policy, New Delhi
contract — between the rural and urban.
Professionals in cities paid a tax, which went into
the scheme meant to provide employment at home
for villages. It was a win-win for both. What we also
forget is the opportunity that this work provides to
rebuild nature’s capital — through real and tangible
assets of water, forests, grazing lands, horticulture,
and investment in livelihoods. This is not to say that
these words are not there in the government docu-
ment. All this is said, but there is little understanding
of the intent or the opportunity. It is a tired scheme,
meant to provide menial and back-breaking work
during distress.
We need new direction and leadership. We must
stop seeing this as a scheme for breaking stones in
the scorching sun. We must see this as the scheme
for providing livelihoods for renewal — do all we
can to build the rural economy, driven as it is through
value addition in agriculture, dairy and forestry. It
needs a new blueprint; a new compact between the
rural and the urban.
But this then brings me to the question of pro-
duction — India and all other countries of the world
are desperate to re-start factories and re-build
economies. The fact is that the global economy is
built on cheap labour and by discounting environ-
ment protection — there is a cost to providing homes
for workers; providing adequate living conditions and
wages that would give people well-being. There is a
cost to ensure that water and air and waste are not
dumped, but treated and then disposed of. The rich
did not want to pay this cost; they wanted cheap goods
for consumption. That’s why production moved to
China and other similar worlds, including ours. So,
what happens now? Let’s keep discussing this.
The writer is at the Centre for Science and Environment
sunita@cseindia.org
Twitter: @sunitanar

A neo-con rethinks
the Republican Party no longer had an
intellectual elite. “I came of age inside
the conservative movement of the 20th
century,” he writes in a new, post-
coronavirus introduction. “In the 21st,
that movement has delivered much
BOOK REVIEW more harm than good, from the Iraq
war to the financial crisis to the
JOE KLEIN Trump presidency.”
Donald Trump’s victory was
they helped destroy the public trust?
These are the questions that impelled
the writing of Trumpocalypse.
Trumpocalypse is divided into two
parts. The first is a brutal takedown of
Donald Trump. “President Donald J
Trump did not start the pandemic of
course,” he writes in the new
introduction. “But at every step of the
way, Trump has acted as if guided by
one rule: ‘How can I make this
trauma worse?’”
Trump’s tribal
appeal has
reality? If so, the Constitution itself will
look “ever less credible.” And as the
United States becomes an increasingly
polychromatic nation, Republicans
may begin to argue that “with the
country composed of the wrong
kind of majorities demographically, it
cannot be governed by majority
rule electorally.”
Happily, Mr Frum remains a small-c
conservative, not a radical. The
solutions he
TRUMPOCALYPSE: proposes in the
Restoring second half of
climate legislation — a comprehensive
national health care system, a carbon
tax (that would include products
imported from polluters like China and
India). “If Democrats want to
perpetuate their health care reforms,
they must do a better job of solidifying
a sense of national belonging. If
Republicans want to safeguard the
border, they must offer a better deal to
those living on that border’s
American side.”
This would be a difficult pill to
swallow for those of us who believe that
Voting Rights Act, Medicare and
Medicaid, he also signed an
immigration law that loosened the 1924
strictures and, arguably, set us on the
path to toxic hyperpartisanship. Mr
Frum is careful not to attribute
everything to this dilemma. Still, Mr
Frum’s proposal seems prescient:
Covid-19 may have pushed the national
mood toward the deal he posits — a
stronger health care system and
stronger borders.
There is a problem with basing a
national restoration of civility in a

I
n our current contagion —
biological and political viruses,
rampant — a terrible question,
unimaginable since the Civil War, has
emerged: Are we in danger of a crisis
that will shatter our brilliant
experiment in self-government? And, if
so, what can we do about it? The Atlantic
writer David Frum is well situated to
consider these questions and in
Trumpocalypse — a dreadful title for a
serious book — he gives it his best shot.
Mr Frum is a former neoconser-
vative, a long-time pillar of the
Republican Party’s intellectual elite
who was shocked to learn in 2016 that
devastating for people like Mr Frum.
The more enlightened of them went
back to first things and wondered what
had gone wrong. By tacitly supporting
Richard Nixon’s Southern strategy, had
they been accomplices to the racial
tribalisation of American politics? By
coddling anti-science evangelicals, had
they taken the wrong side on issues
ranging from “creationism” to climate
change? By pushing for a bellicose
crusade — yes, “crusade” is the proper
word — in the Middle East, had they
destroyed America’s credibility in the
world? By denigrating almost every
aspect of the federal government, had
exacerbated a American Trumpocalypse our immigrant heritage is truly what has policy proposal. Tribal identity may be
structural defect in Democracy are bold but not made America exceptional. But Mr a stronger force than ideology in
our Constitution, Author: wild-eyed. His Frum builds his case carefully. politics. To my mind, the only
the overrepresen- David Frum boldest proposal Immigration has always been tangled government programme that can
tation of rural Publisher: Harper involves policy, up in our “tortured racial history.” A mitigate tribalism is a robust form of
America, a region not governmental century ago, Jews and Italians were the national service. The US military has
slipping farther Price: $28.99 structure, and it non-white interlopers; it took no equal when it comes to creating a
away culturally and Pages: 272 goes back to the generations for them to be seen as “us.” sense of “us.” Mr Frum doesn’t address
economically from notion that too It is possible, he observes, that stopping this, which is a shame. But he has done
dynamic urban many Americans — the human flow from Eastern Europe, something crucial: He has recognised
centres. There is a strong chance that if Trump supporters, mostly — see and creating a more homogeneous that a new national conversation is
Trump wins in 2020, he will do so, again, government benefits going to the America, made it easier for Franklin coming, and, with Trumpocalypse,
with a minority of the popular vote, but “wrong” people. He proposes a Roosevelt and Lyndon Johnson to pass he has provided a thoughtful way to
a majority of the Electoral College. Is it political trade: a severe tightening of their enormous social programs.” It may start it.
possible, Mr Frum wonders, that this immigration rules in return for the be no accident that at the very moment
will be the new American electoral passage of much-needed social and President Johnson was passing the 1965 ©2020 The New York Times News Service
10 PERSONAL FINANCE MUMBAI | MONDAY, 1 JUNE 2020

VALUE OF ~1 LAKH SENSEX

1-YEAR
GOLD SILVER FD (SBI) PPF
INVESTED IN VARIOUS ASSET 82,082 1,46,994 1,34,448 1,07,000 1,08,000
CLASSES 1-YEAR 82,082* 1,32,896 1,24,114 1,04,900 1,08,000
(AFTER TDS)
*Note: Cumulative equity gains up to
~1,00,000 in a financial year are tax-free. 5-YEAR 1,16,514 1,74,082 1,25,107 1,46,933 1,51,757
All post-tax returns are calculated for an
individual in the 30 per cent tax bracket, 5-YEAR 1,16,514* 1,66,674 1,22,596 1,31,317 1,51,757
without considering the indexation benefit (AFTER TDS)
As on May 29, 2020, in ~; compiled by BS Research Bureau
> .

First-time buyers may opt for Arogya Sanjeevani

If you already have an insurance policy, Buy now, top-up later: This
UNIFORM POLICY, VARIABLE PRICING policy with its affordable premi-
opt for super top-up to enhance the Insurers Individual Family floater
um rates is suited for those who
do not have their own health
sum insured premium (~) premium (~) insurance cover yet. Says Singh:
“Those who do not have a person-
BINDISHA SARANG room for dsiputes. Says Amit Go Digit General 3,263 7,194 al health policy should get them-

T
Chhabra, head-health insurance, Star Health & Allied 4,170 9,255 selves covered under this plan.”
he Insurance Regulatory Policybazaar.com: “There is a trust As the ongoing spate of job losses
and Development Auth- deficit because often policyholders Universal Sompo General 4,164 9,304 has highlighted, one cannot
ority of India (IRDAI) has don’t understand what they have depend on the health insurance
asked all general and bought. But with the launch of this Max Bupa Health 4,723 11,044 cover provided by the office. As
health insurance companies to standardised policy, things will SBI General 4,501 11,721 soon as one is out of a job, that
offer a standard health cover called become simpler for policyholders.” cover vanishes. Hence, everyone
Arogya Sanjeevani. Says Gurdeep Kotak General 5,842 13,473 needs a personal health plan.
Singh Batra, head-retail underwrit- Who can buy: Anyone aged If you are single and a first-
ing, Bajaj Allianz General between 18 and 65 years is eligible Bajaj Allianz General 5,950 13,510 time health insurance buyer,
Insurance: “It’s a straightforward to buy this policy. It can be bought Future Generali General 5,996 14,089 Arogya Sanjeevani, which offers a
policy, has easy wordings, is as an individual cover or as a family cover of up to ~5 lakh will suffice.
The individual policy premia are for a 35-year-old male. The family
easy to understand, and comes floater plan that includes two floater premia are for a family where the oldest member is 35 years But as a person’s family expands,
with a good coverage at a reason- dependent children aged between old, and which has two adults and two children he grows older, and medical infla-
Source: Policybazaar.com
able price.” three months and 25 years. tion takes a toll, he may feel the
This policy offers Besides husband, need for a higher sum insured. He
standard coverage, Two key wife and two children, a Sanjeevani provides a decent cover covered by this policy. It also offers A few limitations and exclu- treatment, weight loss, unproven should then supplement his
Texclusions, and limita- limitations of family-floater Arogya ranging from ~1 lakh to ~5 lakh. coverage for Covid-19. (For that sions: Two key limitations of this and experimental treatments, Arogya Sanjeevani cover with a
tions across companies. this policy Sanjeevani Plan can also Policyholders can get a cumulative matter, all the other health insur- policy relate to room rent and co- sterility and infertility, gender super top-up policy. Says Singh:
Only pricing, based on relate to room cover parents and par- bonus of 5 per cent of the sum ance — hospitalisation, reimburse- pay. Room rent up to two per cent change, hazardous adventure “Buy Arogya Sanjeevani as a base
the claim ratios of vari- ents-in-law. insured if they do not raise a claim ment type policies — sold by insur- of sum insured subject to a maxi- sports, and injuries caused by cover with ~5 lakh as sum insured.
ous companies, will be rent and Independent children in a particular policy year. This can ers today also cover Covid-19.) mum of ~5,000 per day is permit- breach of law or war. Once you want to expand your
different. co-payment above the age of 18 can- go up to a maximum of 50 per cent Clarifying the confusion that pre- ted. Intensive Care Unit Even though the coverage sum insured beyond this level, go
of 5% with not be covered by the of sum insured. vails on this issue, Chhabra says: (ICU)/Intensive Cardiac Care Unit offered by this policy is the same for a floater super top-up policy
Building trust among every claim family policy; they will The policy will cover the expens- “Yes, Covid-19 will be covered (ICCU) up to 5 per cent of sum for all insurers, the premium rates so that your family is covered
customers: Experts have to buy an individ- es for hospitalisation for a mini- under Arogya Sanjeevani. It even insured subject to a maximum of can vary from one to another. “The comprehensively.”
believe this is an excellent initiative ual plan of their own. mum 24 hours, along with pre- and covers OPD and ambulance ~10,000 per day is allowed. premium for a 30-year-old with no Those who already have a health
by the regulator that will help The policy offers lifelong post-hospitalisation expenses. Even expenses, should one seek treat- The second limitation pertains health conditions can range from insurance policy (a basic hospitali-
bridge the trust deficit between renewability. Says Jayesh Gadekar, day care procedures, AYUSH and ment for Covid-19. As an infection to co-payment. Every claim under ~3,000 plus GST to ~5,100 plus GST sation reimbursement cover)
policyholders and insurers. Often head–health & benefits, innovative expenses incurred on treatment of caused due to Covid-19 does not the policy will be subject to a co- for a sum insured of ~5 lakh. The should not buy Arogya Sanjeevani
policyholders don’t have a clear solutions at Global Insurance cataract (subject to a cap of 25 per fall under the pre-existing disease payment of five per cent. This por- buyer should factor in both the pre- for additional coverage. It is always
idea of what is covered and what is Brokers: “Existing policies can be cent of sum insured or ~40,000, category, claims will be covered for tion of the claim amount will have mium and reputation for customer better to buy a super top-up to
not by their policy, and this often renewed even after a policyholder whichever is lower) are covered. this illness from day one.” He adds to be paid by the insured out of his service while choosing his insurer,” enhance the level of sum insured.
leads to conflict. In the case of crosses the age of 65, but one can- Expenses incurred on dental treat- that in the past as well, hospitali- own pocket. says Gadekar. Chhabra adds that “Buying Arogya Sanjeevani,
Arogya Sanjeevani, since the policy not buy a fresh policy after 65.” ment, plastic surgery (provided it is sation due to conditions arising Arogya Sanjeevani also comes customers should look for a player which is also a base policy, will be
wordings will be the same across necessitated by disease or injury) from H1N1 and Ebola were covered with a few exclusions. It will not that offers cashless benefit and has costlier than buying a super top-
insurers, there will be much less A basic, no-frills policy: Arogya and ambulance charges are also by health policies. cover expenses such as maternity a good settlement track record. up,” says Singh.

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Under the assumption that value earliest age Maha Raksha Supreme Critical Illness Benefit 3,278 19,916
should be available in this list of n Premium tends to be lower at Bajaj Allianz life 10,359 Accidental Death Benefit 851 11,210
stocks trading below long-term aver- a younger age and remains Smart Protect Goal Critical Illness Benefit 6,749 17,108
ages, they looked for companies, PNB MetLife Mera Term Plan 12,862 Accidental Death Benefit 904 13,766
unchanged for the entire
which had steady growth in rev-
enues, Ebitda and PAT over the last
policy tenure Accidental Disability 177 13,039
ten years. This narrowed the search n Even if you have just begun Kotak Life eTerm 12,626 Accidental Death Benefit 5,900 18,526
down to about 25 companies – about working and do not have any
MARKET INSIGHT one-sixth of the sample. The 20 per liabilities, buy a large cover n If you find the premium rate
Aegon Life iTerm
Kotak Critical Illness Plus Benefit
11,444 Accidental Death Benefit Rider
9,198
531
21,824
11,975
cent rebound has meant that the burdensome, go for the
DEVANGSHU DATTA shortlist has further shrunk. Fewer n As your liabilities increase,
monthly option.Go for an Insurance Plan CI Comprehensive Care Rider 4,352 15,796
stocks are now trading below the PE you will not have to augment
your cover at a later date insurer with claim settlement
In mid-April, the website and EV/Ebitda benchmarks set as Premiums are for term insurance plans for a 35-year-old made living in a metro for a sum assured of ~1 crore. The policy is valid
ratio of 95 per cent or above upto 70 years of age Source: Policybazaar.com
Capitalmind.in ran an exercise that filters. Also earnings and PEs have
tried to identify value in midcaps. changed for much of the set as
This focussed on the 150 constituents results have come in.
of the Nifty Midcap 150 Index. At that That list of 25 is still worth looking

Beat the monotony with OTT

point of time, the index had already at. As Capitalmind pointed out, this
plunged from the heights of 6,800- is only mid-way through an exercise
plus to a low of about 4,100 and start- to find stocks that may be good val-
ed a recovery. ue. The investor would have to make
As of last week, the index pushed a judgment call about the quality of
back to above 4,900-mark. That’s a management, and follow up by mak- Original content and aggressive pricing have led to Indians binge-watching on these platforms
retraction of 40 per cent in just over a ing another judgment call about how
month (February 20-March 24) fol- the core business is affected by pan- NAMRATA KOHLI the Hindi belt.”
lowed by a bounce of 20 per cent off demic and lockdown. Smaller cities are emerging as an
the low in the last 9 weeks. The principle of trying to find val- When the web series Mentalhood important market. Says ZEE5’s Maroli:
Anyway, the website discovered ue in this way remains sound whether starring Karishma Kapoor was “Our goal now is to go deeper into tier-III
over half the stocks in the index were there’s a pandemic or not, and announced on ALTBalaji, the promos and IV cities with our mass premium
below their median long-term price- whether the market is in a bull-run, seemed anything but mainstream. content.”
to-earnings (PE). Then it dug into or not. Pick some financial ratios;
their finances using the early April Look for stocks that are below long-
Offbeat, out-of-the-box and
contemporary are some of the adjectives
OTT SERVICES AND THEIR PRICE PLANS Content for every mood
values. They used a simple concep- term valuations in terms of those used to describe it. The title, an OTT platform Monthly subscription (~) Annual subscription (~) Diversity of content is the unique
tual model with two ratios. Then seek out interesting play on ‘motherhood’, Amazon 129 999 selling proposition of OTT platforms.
financial ratios. By using historical stocks in that sample, somewhat gave it away—it deals with the Prime Video Horror, comedy, family drama, social,
One was the enter- medians as the which appear to have unreasonable expectations women cope political and psychological thrillers—
prise value (EV) as a stable financial growth with while raising their children. Netflix 199 (Mobile-only plan) 2,388 you name it and there is a web series on
ratio of the operating
benchmarks, the records. Speaking with Business Standard, 499 (SD Single-screen plan) 5,988 that genre. Bestselling content can vary
profits (Ebitda) and the market is allowed Another analysis actor Karishma Kapoor said: “What 649 (HD Plan) 7,788 from the likes of Tashkent Files to
second was the PE. EV to decide what is may choose to compare prompted me to act after such a long Mission over Mars. Says Thomas
is a company’s market reasonable value, some other financial time was the script. It touched upon a 799 (Ultra HD 4K four-screen plan) 9,588 Cherian, director-communications,
capitalisation plus its
rather than some ratios versus the topic that was mature and relevant to the Hotstar 299 (Disney + Hotstar 1,499 (Disney + Hotstar Premium Netflix India: “Netflix has a lot of
debt, minus cash (and respective historical times.” Kapoor says she has been Premium – 1 screen) –2 screens) diversity in its content. For example,
cash equivalents) on the human judgment means or medians. For receiving messages during the lockdown yesterday’s top-ten list has Money
balance sheet. If you being applied example, book-value from people saying how they could Heist, a Spanish series, licensed Hindi
bought the company based calculations are identify with the emotions a parent
Voot 99 999 movies, an original English film like
and took it over, this is what you pay said to have been accurate at finding goes through. Zee5 99 (for 1 month) 599 (for 6 months) 999 Extraction, and a German one like
and take on as liability, net of undervalued stocks during the Great Primacy of content is what has SonyLiv 99 (for 1 month) 299 (for 6 months) 499 Dark.”
encashable reserves. The EV/Ebitda Depression (1929-37). contributed to the popularity of over-
compares what the investor is pay- Note that there also is an implicit the-top (OTT) platforms. “Real, relevant Hoichoi NA 499 (for 1 screen), 699 (for 2 screens) And now film releases too
ing, to the operating profits. The PE admission that market action does and resonant are the three pillars on AltBalaji 34 (for 1 month); 100 (for 3 months) 25 (for 1 month); 300 (for 12 months) With Shoojit Sircar announcing the
is of course, the price of earnings. It a better job of long-term valuation which our content rests,” says Rahul Viu 99 (for 5 screens) NA direct digital release of Gulabo Sitabo,
consists of market cap divided by than any human analyst. By using Maroli, senior vice president, ZEE5. He many filmmakers are contemplating the
shares outstanding. Both ratios need historical medians (or means) as the further adds: “With the lockdown, there Eros Now 49 (for 1 month) 79 (for 3 months) 399 same due to theatres being shut. This has
to look reasonable in terms of avail- benchmarks, the market is allowed has been a two-fold increase in the Data compiled by Verizon Media not gone down well with multiplex
able risk-free interest rates. to decide what is reasonable value, number of people subscribing to our owners, such as INOX theatres. Says
The long-term values of these rather than some human judgment content,” says Maroli. Tajdar Amrohi, producer and director,
two ratios was calculated and the being applied. Eros Now has witnessed a 78 per cent Aggressive pricing subscription at ~199.” and son of renowned filmmaker Kamal
current values compared to the The pandemic or any other finan- surge in engagement before and after Aggressive pricing strategies have Amrohi: “I would encourage launch on
median values over three, five and cial crisis throws up larger potential March 24, according to Ali Hussein, chief contributed to the popularity of many Unique positioning OTTs provided the return on investment
eight years. By definition, the medi- lists of undervalued stocks. But this executive officer, Eros Now. Explaining platforms with the mass market. So, you Each of these OTT platforms strives for a is fair. How long can one wait? The future
an is the mid- point, which means sort of multi-step exercise is always the growing popularity of OTT, he says: have ALTBalaji at ~34 per month and distinct identity. While Netflix is niche is digital. Even the cost of publicity will
that half the time the ratio will be necessary to zero in. Two steps in “On-demand feed offers a very different ~300 per year, Eros Now at ~49 per and premium, Eros Now is filmy, with 70 decrease.”
higher than the median. the process are more art than num- viewing experience from watching month and ~399 per year and Voot, per cent of the content being movies. OTT platforms believe that the
At that stage, in April, some 80 ber-crunching. linear TV. Consumers today choose what SonyLiv, Viu and ZEE5 at ~99 per month. Hotstar is known for live events and technology exists today for delivery of a
companies were trading below their One is judging quality of man- they want to watch and make discoveries In this price-sensitive country, ZEE5 caters to the mass market. Says theatre-like experience at home, thanks
respective median ratios. The web- agement. This must always be done. along the way.” clever pricing is important if you wish Sundar: “The one to watch out for is to the bandwidth, the Dolby apps
site also compared the average The other call is unique to this cri- As India adjusts to 24X7 stay-at- to ramp up the numbers. Says Jayshree ALTBalaji, which has 150 web series available on devices, and so on. The
(mean) ratios, which were higher sis. Which businesses will not only home, millions are turning to OTT Sundar, an advertising professional under production. Voot comes with Big bottomline, as Sundar puts it is: “There
than the medians (it is usual for the survive but emerge stronger? How platforms for entertainment. The top ten and professor of marketing: “A case Boss. MX Player is popular with the are movies that need the big screen
mean to be higher if there have been long will this process take for a platforms, according to Verizon Media, study we undertook showed how Telugu and Tamil audience, while experience. They will be fit for the
more extreme high values). Some given business? Those answers are are Amazon Prime Video, Netflix, Netflix was going nowhere with its Hoichoi is a hit with the Bengali multiplex only. But there will also be
95 companies were below their long- also critical. Hotstar, Voot, Zee5, SonyLiv, Hoichoi, expensive monthly subscription of audience. But the one that could surprise story-driven movies that will be a perfect
AltBalaji, Viu and Eros Now. ~500-700 until it launched its mobile everyone is ZEE5 with its popularity in fit for OTT.”
 MUMBAI | MONDAY, 1 JUNE 2020 THE SMART INVESTOR 11
BSE 200: TOP 5 GAINERS OF LAST WEEK QUICK TAKE: STREET CONFIDENCE RISING ON BALKRISHNA INDUSTRIES “THE POSITIVE MOMENTUM IN EMS IS LIKELY GOING TO
BSE price in ~ May 22 May 29 % Chg The share price of Balkrishna Industries is up more than 50 per BE CARRIED INTO JUNE AND BEYOND, PARTICULARLY
Jindal Steel & Power 96.60 121.55 25.83 cent from its March lows. Analysts expect the stock to remain in
Godrej Industries 256.15 318.65 24.40
BECAUSE AT CURRENT LEVELS, EMs ARE DEEMED TO BE
focus after Ceat and Apollo Tyres posted strong numbers. The
Future Retail 69.95 84.80 21.23 graded easing of the lockdown and restart of activities in India AMONG THE MOST ATTRACTIVE ASSET CLASSES”
Motherson Sumi Systems 79.20 95.30 20.33 and Europe bode well for the off-highway tyre maker, while an KHIEM DO,
Federal Bank 37.35 44.90 20.21 economic stimulus by China can add to the gains. Head of Greater China Investments, Barings Hong Kong
>

Signs of base metals cycle bottoming STREET

SIGNS

Afterhittingmulti-yearlows,metalpriceshaveseensomegains.Thoughlowerinputcostsaresupportive,demandisthecrucialmissingpiece Makingmostoflargesharesales
The month of May saw two large share sales —
VISHAL CHHABRIA & UJJVAL JAUHARI by being convertors of aluminium ~25,000-crore in Hindustan Unilever (HUL),
Mumbai/ New Delhi, 31 May into value-added products. and ~8,400-crore in Bharti Airtel (Airtel). The

A
nil Agarwal is well
known for his stupen-
dous rise — from a
small metal scrap dealer
in the mid-1970s to executive
chairman of Vedanta Resources,
which has interests in aluminium,
copper, zinc, silver, iron ore, and
crude oil through majority stakes
in Vedanta Limited and
Hindustan Zinc. Over the past
45 years, Agarwal has made at
least six acquisitions and scaled
up many into cash-generating
businesses.
The most successful is the
acquisition of a majority stake in
Hindustan Zinc in 2002. His acqui-
sition cost of about ~ 1,000 crore is
now worth ~47,000 crore even in
these depressed markets — a com-
pound annual return of almost 24
per cent (dividends excluded) over
18 years. So, it will be safe to
assume that the 66-year-old knows
the metals trade and business val-
uations more than most ordinary
investors. And now, when Agarwal
is wanting to take Vedanta Limited
private by buying out minority
shareholders, a key reason will be
that the business is available cheap.
Most experts agree.
“In the promoters' view, the
sell-off in metals may be over-
done, and thus they could be look-
ing to take Vedanta private at
these attractive valuations,” says
Deepak Jasani, head-retail
research, HDFC Securities.
Ajay Bodke, CEO & chief port-
folio manager (PMS), Prabhudas
Lilladher, shares a similar view.
“Typically, promoters want to take
their companies private when the
markets are not valuing them at
intrinsic value. Second, the com-
modity business is characterised
by cyclicality. Such announce-
ments are indications that the
promoters believe the cycle is near
the trough.”
Bodke says Agarwal is a savvy
investor, and he may not keep
Vedanta private for long (if the
current bid is successful) and take
it public again when valuations
are favourable.
So, where does the business
cycle stand currently? Prices of
base metals, such as aluminium
and copper, after falling to a dec-
ade and 5-year lows, respectively,
have rebounded up to 16 per cent
from their March-April lows. The
uptick is led by the resumption of
industrial activity in China and
the easing of lockdown around the
world. This brings respite for
India's base metals players, such
as Hindalco, Vedanta, and Nalco.
Yet, some analysts warn about
the near-term outlook. Vikash
Singh of PhillipCapital, says:
“Aluminium inventories on major
exchanges improved marginally to
1.78 million tonne (mt) and global
and China month-on-month aver-
age daily production fell 1 per cent
each to 175,000 tonne and 99,000
tonne, respectively.” Domestic
demand — largely from power
transmission, automobile, and
construction sectors — has plum-
meted, points out CRISIL Ratings.
The falling coal prices,
however, are a saving grace. The
price of coal sold under fixed con-
tracts is 30-40 per cent cheaper
than imports and the average pre-
mium of e-auction has fallen
steadily from 131 per cent in
December 2018 to 36 per cent in
March. “The industry's current
operating profitability would still
be only 60 per cent of the average
per tonne profitability over the
past five years,” says Naveen
Vaidyanathan, associate director,
CRISIL Ratings. A global recession
and US-China trade war are key
downside risks.
Meanwhile, the rebound in
metal prices and benign costs
have helped stocks post gains.
Hindalco, after more than halving
from January highs of ~220 to ~88
in March, is now at ~139. Vedanta,
too, has recovered to ~ 92, after
falling over 60 per cent from
January highs.
The sharper fall in Vedanta
can be attributed to its diversified
natural resources pie, where a
steep fall in oil prices is hurting.
Hindalco, which is also a diversi-
fied player, gets cushion from its
US subsidiaries Novelis and Aleris
(70 per cent of revenue), which
continue to see firm profitability
While Jasani believes that
delisting Vedanta may not be easy
for its promoters as the large insti-
tutional investors will not agree
at current price offered, what is
the advice for investors looking to
invest in metal stocks. “Metals is
a very cyclical industry and most
companies are highly leveraged.
In good times companies enjoy
fat margins and operating lever-
age, and in bad times many go
bankrupt. Now we may be
towards the lower end of the
cycle, but the final panic is yet to
happen,” says Jasani.
In a recent note, Vishal
Chandak of Emkay Global said the
pandemic will lead to a reduction
in both demand and prices for
most commodities in FY21. Howe-
ver, a revival is expected in FY22
and the normalisation of demand
in FY23, driven by fiscal stimulus
by large global economies.
In other words, investors with
a short-term horizon may want to
wait for a better opportunity and
global economic growth indi-
cators to improve. But, for those
with a long-time frame, Bodke
sums it up well: “If you are an opti-
mist, you will not be holding that
the economic disruption caused
by coronavirus is permanent. It is
a matter of time before fear psy-
chosis subsides and normalcy pre-
vails. Once the global trade picks
up, the industrial activity will
improve, too. So, what better time
to pick up shares than now.”
common factor in both share sales was that
French bank Société Générale (SG) was the
biggest buyer. In the case of HUL, SG picked up
nearly 10 per cent of the shares on offer at an
outgo of over ~2,400 crore. In the case of Airtel,
it picked up nearly a fourth of the shares on
offer by paying ~1,981 crore. At a time when
overseas investors are in withdrawal mode,
such huge investment is an encouraging sign.
“Marquee long-term investors like SG are on
the lookout for block deals in large companies.
Such a huge acquisition is not possible in the
secondary market without price distortion,”
said an investment banker.
SAMIE MODAK
Niftymayhoverbetween9K-10K
The long build-up by foreign portfolio
investors (FPIs) in index futures during the last
few days and the fall in India VIX, a fear gauge,
by 11 per cent in May has added to optimism
that the Nifty50 index will see an uptick in the
June series. The options data suggests a wider
trading range between 9,000 and 10,000.
Crucial support for Nifty is placed at 9,000-
8,800 zone, while resistance can be seen
around 9,900 and then 10,300 levels. Banking
counters ended the May series in negative
territory and formed a good amount of short
positions. Some short covering was seen in
bank stocks in the last few trading sessions. "If
the Nifty Bank sustains above 19,500, we may
see further short covering taking it towards
20,600 and then 22,000 mark. The immediate
support for the index is at 18,200 level," said
Chandan Taparia, derivatives analyst at Motilal
Oswal Financial Services.
ASHLEY COUTINHO
MFequityflowstomoderate
Equity mutual funds (MFs) are expected to see
further moderation in investor inflows during
May. Industry players say the tally for the
month could be lower than April. Despite a

Broader market MFs eye low-volatility over 21 per cent.

Among other fund houses, Axis MF
has filed for a capital protection-
sharp rebound in the market, net equity
inflows in April stood at around ~6,200 crore,
nearly half that in the preceding month.

outperforms in May options for investors

oriented fund series. The capital pro- Market players said the weakness in the
tection fund, as the name suggests, market during the start of May could have
seeks to safeguard investors’ capital. It weighed on investor sentiment. “The first
is a close-end hybrid fund with port- trading session of the month itself saw the
SAMIE MODAK JASH KRIPLANI MANAGING IMPACT folio skewed towards debt to achieve benchmark indices plunge 6 per cent. The
Mumbai, 31 May Products exposed to low-volatility the scheme objective. weakness persists, especially in banking
May was a weak month for indices can limit downside The maturity of the debt portfolio stocks. This coupled with rising Covid-19 cases
the market, with the Mutual funds (MFs) are looking at
0
is typically aligned to the lock-in and extended lockdowns have hit inflows,”
benchmark indices logging launching low-volatility products — period of the fund. Analysts say as debt said an industry player.
negative returns. The bright equity, as well as hybrid — to give -5 papers tend to be held to maturity, the SAMIE MODAK
spot, however, was the investors alternatives in the current chances of mark-to-market losses
broader market BROADWAY SHOW market environment. -10 because of interest-rate fluctuations
-11.54
outperformance. For the first ForthefirsttimesinceJanuary,allthreemajorbroad-
time since January, the three marketindicesoutperformedthebenchmark
ICICI MF recently filed for an
exchange-traded fund (ETF) that will -14.61
-15 are mitigated.
“However, investors need to be
EVENTS THIS WEEK
key indices representing the Nifty 50 Out/under-performance (in bps) track the Nifty Alpha Low-Volatility 30 -20 aware that these are close-end pro-
year-to-date return (%)
broader market — Nifty 500, 2020 (% chg) Nifty 500 Midcap 100 Smallcap 100 Index. It is part of the suite of smart- -21.40 ducts with a lock-in period,” said an Date Particulars
-25
Nifty Midcap 100, and Nifty January -1.7 158 700 840 beta indices with the NSE, with the Nifty Nifty Alpha Nifty100 MF analyst. 01-Jun India - Markit PMI mfg
Smallcap 100 — outperformed February portfolio designed using a combina- Low-Vol 30 Low-Vol 30 The capital protection fund can
-6.4 1 -44 -249 US - Markit PMI mfg
the benchmark Nifty 50 index. March -23.2 -100 -703 -1,341 tion of two factors. Source: NSE invest between 70-100 per cent in the US - ISM employment rate
Though the broader markets As much as 50 per cent of the index debt portfolio and invest as much as China - Caixin PMI mfg
delivered negative returns, the April 14.7 -16 68 -124 portfolio is oriented towards low-vol- level capping of 5 per cent and is rebal- 30 per cent in equity products.
May -2.8 46 114 99 02-Jun UK - National House Price
fall was less compared to the atility stocks on the Nifty, and the rest anced periodically which normally PGIM MF also plans to launch a bal- Index
benchmark. The broader Source: Bloomberg; Note: Negative denotes underperformance are oriented towards the alpha com- helps assign a higher weighting to anced advantage fund (BAF). While UK - consumer credit figures
market, despite the negative ponent. stocks/sectors that are doing well,” said the fund house had the plans before
Results: Motherson Sumi,
undercurrent, is a positive sign, several mid- and small-caps are The index consists of 30 stocks that Chintan Haria, head-product develop- Covid-19-triggered volatility, it expects
Britannia & InterGlobe
which underscores that investors are compelling and companies with meet the low-volatility and alpha crit- ment and strategy at ICICI MF. the product to gain traction in the cur- Aviation
willing to look beyond the frontline strong balance sheets can generate eria. Stocks in the Nifty 100 and the “The other factor i.e. ‘low-volatility’ rent environment.
03-Jun India - Markit PMI services &
stocks. During the market crash in superior returns. They, however, say Nifty Midcap 50 (at the time of review) endeavours to limit downside and pro- BAFs are dynamically-managed composite
March, the broader markets had one should avoid blindly investing in are eligible for inclusion in the index. vide portfolio stability,” he said. equity mutual funds that typically
US - ADP employment change
suffered more than the benchmarks, this space as smaller companies are “The ‘alpha’ factor enables selec- In year-to-date, the Nifty Alpha alter their equity allocation between
with index levels plunging to five- more vulnerable in a deteriorating tion and assigning a weighting to the Low-Volatility 30 Index has given 30 per cent and 80 per cent, depending
Markit PMI services & composite
year lows. Experts say valuations of macro environment. stocks which have performed well on negative returns of 14.6 per cent. on market valuations, usually consid- UK - Markit/CIPS PMI services
a relative basis. The index has a stock At the same time, the Nifty is down ering the price-earnings ratio.
& composite
China - Caixin PMI services
& composite
Results: CholaInvestment

‘Pandemicmattersmuchmorefor
by the virus than others in the region.
Constraints on the fiscal policy give the
government less capacity to support the
economy and the markets than in other
& Aurobindo Pharma
04-Jun US - trade balance figures
05-Jun India - BoP CAD figures#
Results: L&T & Gujarat Gas

marketsandeconomiesthantradewar’
countries. We expect a reversal of the 06-Jun Results: Relaxo Footwares
emerging markets sell-off, as the dollar 07-Jun China - trade balance figures
rally loses strength and the global econ- Source: exchange/websites/Bloomberg
omy starts to dig out of its hole, but #tentative inJune2020 CompiledbyBSRB
The re-emergence of the US-China trade spat has come as a major blow to the global financial markets that were already reeling from not foresee much pain for investors. flows to India will likely lag.
the impact of the Covid-19 pandemic. Thailand-based DAN FINEMAN, co-head of equity strategy for Asia-Pacific at Credit Suisse, tells Most likely, Hong Kong and mainland It is fairly easy to group markets
Puneet Wadhwa he is underweight on India, which entered this crisis with weaker economic momentum than its Asian peers, but has
been hit harder by the virus than others in the region. Edited excerpts:
exchanges would find ways to accom-
modate relisting.
according to their success in control-
ling the virus domestically. Clearly, COMMODITY PICKS
Taiwan, Hong Kong, China, and South
Is the market recovery will remain tense at least There are expectations of another Korea lead the pack, while the COTTON SEED OIL CAKE
from their March lows through the US presidential round of stimulus by the US Federal Philippines, India and Indonesia are
sustainable? election and possibly beyond. Reserve (US Fed). Will the other struggling the most. Both the
From a six-12 month view, From a long-term perspec- central banks follow? Philippines and India seem the most
the markets can rise above tive, this clearly is not posi- Global monetary and fiscal easing will problematic in the APAC region regard-
the current levels on easing DAN FINEMAN tive, but the impact on the continue. The case for a continued ing the ability to control the pandemic
lockdowns and aggressive Co-Head of equity Asian economy in 2020 monetary easing and a dip in real rates without stringent lockdowns, and
policy response. That said, strategy for Asia-Pacific, should be less than in 2019. over the medium term to significantly neither market has strong leverage to
Credit Suisse
China-US tensions may act The pandemic now matters negative territory across developed the global currency realignment. India
Cotton seed oil cake is trading at ~2,074 per
as sentiment damper. The much more for the markets markets (DMs) is strong. Big increases is possibly the most fiscally con-
quintal at Akola. For the week ahead, prices are
pandemic should remain by far the top and economies than the trade war. in public debt will need to be covered, strained market in the region. expected to head towards ~2,040 per quintal.
variable for the global markets. The Tariffs may not be extended to new pro- and it seems more likely that central Supplies of cotton seed oil cake are improving
short-term pullback we anticipate will ducts, but one cannot rule out higher banks will encourage an increase in Your view on global growth in the due to increase in crushing amid higher seed
largely result from a reassessment of rates on exports already tariffed. inflation and cut nominal rates. Policy coming quarters? availability, while demand for cake is subdued
earnings expectations. Once more real- rates can be cut to zero or below, and The second quarter of the financial year from end users.
istic earnings numbers are applied, Are the markets factoring in an the US Fed and European Central 2020-21 (FY21) should be the bottom
some valuation metrics look quite escalation in the US-China trade spat? Bank (ECB) can follow Bank of Japan’s globally, including for India, but GDP MAIZE
stretched. Emerging Asia is our favou- The US and China will continue seeking (BOJ’s) path in capping bond yields. will take a long time to return to the
rite on valuations, structural growth a financial de-coupling but do not If we turn to monetary policy within pre-Covid-19 levels. North Asia should
and gains from a bottoming of global expect a great impact on investors. Asia Pacific (APAC) itself, we do not see the fastest recovery due to its suc-
economies. China's promotion of the renminbi as expect as much easing as in the US cess in battling the pandemic and lev-
an alternative international reserve and and Europe. Growth in much of the erage to cyclical and structural growth
Can the pandemic take the trade currency will likely take years if region should prove more resilient in technology. As regards India, we
US-China relations to not decades to succeed. Moves to force than in the West. would like to see greater stimulus and
a new low? Chinese firms to de-list from US more support for the financial sector, Maize is trading at ~1,236 per quintal in
The US-China relations exchanges could have legs, but we do How does India appear as an but understand the constraints posed Gulabbagh. Prices are expected to trade lower
investment destination compared to by the fiscal situation. To avoid a down- towards ~1,200 per quintal in the near-term.
its Asian peers? grade, the government needs to supply Weak demand and increasing crop arrivals are
putting pressure on prices in Bihar.
FROMASIX-12 MONTH VIEW, WE EXPECTTHE MARKETSTO RISE We’re underweight on India that enough support to keep the financial
entered this crisis with weaker eco- sector healthy, but can’t push up the
ABOVETHE CURRENT LEVELS ON EASING LOCKDOWNSAND nomic momentum than almost all its deficit to levels that would worry rating Prerana Desai,
AGGRESSIVE POLICYRESPONSES Asian peers, but is now being hit harder agencies. Research Head - Edelweiss Agri Services
and Credit
12 BUSINESS LAW
>
Amid pandemic, a litmus test for GST
Experts for
staggered
payments, liberal
input tax credit
norms, and
expediting
e-invoicing
SUDIPTO DEY
T
he GST Council is gearing up
for a meeting in June, the
first time after the imposi-
tion of the nationwide lock-
down, amid the clamour for tax relief
by industry lobby groups and pres-
sure from states to shore up tax reve-
nues. While the Council is likely to
deliberate and come out with short-
and medium-term measures to miti-
gate liquidity concerns of business,
experts say it should not let go of the
opportunity to expedite substantive
reforms in the indirect tax system.
“The Covid-19 pandemic is likely
to be a litmus test for GST,” says
Pritam Mahure, a Pune-based GST
expert. Tax experts agree procedural
and compliance reliefs, so far
announced by the government, are
not enough for businesses to tackle
various issues arising out of the lock-
down, including the consequent loss
of sales. “In the long-run, only sub-
stantive GST measures would help
GST payers sail over the challenging
times,” says Mahure.
On top of mind of almost all busi-
ness leaders is the lockdown's adverse
impact on working capital, making it
difficult for them to pay GST in time.
Most businesses wish to have a brief
— three to six months — interest-free
deferral of GST payments, says MS
Mani, partner, Deloitte India.
For many small businesses, filing
GST returns from home — with limited
broadband bandwidth — has been a
challenge. Digital submissions are dif-
ficult considering the voluminous
nature of submissions, adds Mani.
Experts say most businesses are
exploring ways of optimising their
cash flows by reviewing their input
tax credit, including ways to liquidate
the accumulated credits across states.
“The government could come up with
a mechanism where GST collected is
allowed to be deposited in instal-
STRATEGY
>
SHUBHOMOY SIKDAR & ARINDAM MAJUMDER
T
his past week saw the
resumption of air services in
parts of the country. For the
airport leg of air travel, the
“new normal” was fast-tracked, thanks
to a slew of digital transition measures.
So how are the operators ensuring
contactless travel and what were the
challenges before them? How did they
zero in on the new infrastructure to
enable safe travel under the shadow of
the coronavirus? More importantly,
what does this means for the future of
the industry?
Experts like Mark Martin, founder
and CEO of aviation safety firm Martin
Consulting, say the pandemic caught the
Indian aviation industry off guard
because prior to the crisis, the flying
experience was largely contact driven.
“Except for self check-in kiosks, we did
not have anything that qualified as “con-
tactless”. Compare this to Europe or
Singapore where they have invested
heavily in technology, where you just
open an app and it navigates you through
the entire process from your boarding
gate to the correct seat,” he says.
In other words, airport operators
back home had an uphill task ahead
of them. The first step was identifying
the touch points to reduce contact and
go for sanitisation wherever that is not
possible. These points were classified
according to “stages” and correspon-
ding solutions were put in place with-
out delay. Broadly speaking, the
changes, mostly driven by technology,
kick in at the pre-entry, check in, secu-
rity check and boarding processes,
which are common for all passengers.
So from magnifying glasses to read ID
cards without touching them or using
the Arogya Setu app to screen pas-
sengers to the use of mobile phones to
scan the QR code on the self-service
kiosk, technology took over.
Coming to the food and beverages
sale, the GMR group which operates
the busy airports of Delhi and
Hyderabad has introduced an app,
HOI, that enables a passenger to order
and pay digitally before reaching the
airport or while waiting at the airport
terminal. It also enables contactless
payment. Similarly, at the Bangalore
airport, passengers can pre-order F&B
through their smartphones using the
QR code displayed at the kiosks.
The food can be delivered at the
passenger's place of choice within
the terminal.
For all its usage, technology has its
own limitations in reducing contact
and then it comes to human restraint
and rules like following the safe dis-
ON TAXPAYERS' MIND
Tax implications arising from
cancellation/reduction in prices of
contracts during the lockdown
Complications arising from availing
input tax credit due to non-
approval of tax invoices
Instancesoftemporarysuspensionof
billingduetothelockdown.Apprehension
that a delay in billing could be challenged
by the tax department, leading to the
imposition of interest and penalty
Given the liquidity concerns,
businesses want a staggered tax
payout mechanism
ments over the next 6 months or so,”
says Pratik Jain, partner and leader
indirect tax, PwC India.
Another key demand from indus-
try is making GST payout on a 'collec-
tion' basis, and not 'invoicing'. “The
reason is that in a lot of cases the cus-
tomer may not eventually pay the
amount invoiced and there is no way
for industry to recoup the GST, which
has been deposited,” says Jain. One
idea that is floating in the tax circles
is to allow offset of input credit accu-
mulated in one state against GST pay-
out in another state, at least for the
central GST component.
According to Rajat Mohan, senior
partner at AMRG & Associates, his
advice to clients hit by the lockdown
Get, set, fly
Here's how airports across the country ensured
contactless flying as air services resumed in
large parts of the country
tance markers at the baggage collec-
tion area or not letting transit pas-
sengers leave the transit area like they
did in the past.
Most changes are uniform and
guided by the standard operating
procedures provided by the
authorities. However, operators also
came up with innovative mechanisms
of their own to ensure maximum
safety. For example, placing trolley dis-
infection tunnels on departure ramps
or retrofitting the hand rails with an
HOW HAVE OTHERS TACKLED THE ISSUE
GST/ VAT is present in around 160 countries. Most have
announced a mix of procedural and substantive tax
relief. Some standout measures are:
ITALY: Introduced a ‘super-reduced’ 5% rate of VAT for
supplies of certain medical goods
GERMANY: The VAT rate for restaurant and catering
services reduced from 19% to 7% until June 30, 2021
(with the exception for drinks)
n The current transitional regulations to handle the
Covid-19 pandemic extended to December 2022
GREECE: Announced waiver of 25% of GST liability
UAE: Expedited processing of VAT refunds
has been to develop procedures to
proactively assess the impact areas in
compliance and take requisite meas-
ures to address them.
Businesses must gather enough
evidence on the entitlement of input
tax credit on credit notes given due to
a reduction of prices or a revision of
contracts because of the lockdown, he
adds. Also, businesses have to keep in
mind that supplementary contracts
establishing discounts in the wake of
Covid-19 may not be accepted by the
tax department. Further, goods that
were in transit but not delivered are
ineligible for input tax credit at the
hands of the recipient.
Experts say some relief measures
may entail legislative changes.
automated system that provide a 360-
degree sanitisation mechanism are
some of the concepts developed by the
GMR group which runs the airports at
Delhi and Hyderabad. The trolley tun-
nels spray coat passenger baggage with
a chemical disinfectant that evapo-
rates by the time the luggage reaches
the passenger on the belt.
At the Kannur airport in Kerala, an
artificial intelligence system to check
temperature has been installed that
cuts out human intervention. V
MUMBAI | MONDAY, 1 JUNE 2020 1
No need to include
petroleum in GST
GST,therewillbeasingle differencebetween
rate;manypeoplespeculate petroleumandothergeneral
thatitwillbe12or18percent. productsofmerchandiselike
Thatwillnotmostcertainly
betherate.Itislikelybe28per
soaporpaperormachinery.
Petroleumismanufactured
centbecauseithasto inrefineriesby,say,Indian
generaterevenue.Afterinput OilCorporationandsoldto
credit,theeffectiveratewill thesamecompany'sdealers
beevenlessthan12percent throughtheirretailers.There
becausethevalueadditionif ishardlyanyvalueaddition.
nothighatall.Revenue Ontheotherhand,the
EXPERT EYE buoyancyistheprime
considerationwhenrevenue
generalmerchandisearesold
throughseveralwholesellers
IMAGING: AJAY MOHANTY SUKUMAR MUKHOPADHYAY fromGSTisfallingsoshort andmanyretailerswhere
thateventhecompensation thereisveryhighvalue
fortheshortfallisdifficultto addition.Valueaddedtaxis
Ifindthatitisnolongereasy pay.Someanalystshave meantforsuchgoods.For
togetasubjecttowriteabout expressedtheirobservation petroleum,thetaxis
GSTanditsbasicstructure. thatpetroleumandits practicallyonthe
Theprevioustaxes,namely productsareregardedbythe manufacturingpriceand
centralexcise,servicetax, governmentassingoodsand hardlyonthevalueadded.In
andsalestax,hadsomany sotherateoftaxisnecessarily anycase,taxonpetroleumis
problemssuchthattherewas tobehigher.Thisisa notevadedatall.The
nodearthofsubjectsfor misnomerasthegovernment differencebetweenGSTand
writingarticlesbymeand hasatnostage turnovertaxon
otheranalysts.Nowafter calleditasingood. At present, petroleumisonly
GST,Ifindthatthereisno Onlyalcoholic petroleum is an thatthereisno
subject,exceptthenumberof productsand item, along with inputcreditin
rates,evasion,andinput tobaccoproducts alcohol, which caseofturnover
creditdelays.Thatprovesby areconsideredas gives satisfaction tax.Butitdoesnot
implicationthatGSThas singoods, to states that they makeany
solvedmanyproblems,such irrespectiveof have some fiscal differencesince
asdefiningmanufacture, whetherstatesor federalism left thevalueaddition
findingoutthecorrect theUnion,which with them ishardlythere.
taxableevent,determining levytheduty. Inconclusion,I
whatwasintermediate Thereisamisconception say thehurrytobring
goods,andall. thatbringingpetroleumwill petroleumunderGSTis
Notgettinganysubject, bringsubstantialbenefitto undue.Thereis
A case in point is liberalising the someanalystshaverecently theaviationandtransport constitutionalprovisionfor
input credit provisions or bringing in takentowritingabout industryandeventhe imposingataxonit,butthat
input services for refund under includingpetroleuminto manufacturingsectorsince doesnotmeanit’salow-
inverted duty structure. GST.Iamwritingtosayitisa petrolisabiginputforthem. hangingfruit.Oncethe
On the procedural front, the pro- non-issueandthereisno Itwillbeabenefitifonlythe attemptismadetobringit
cess of reconciliation between the hurrytoincludethisintoGST. rateofdutycomesdown. underGST,thefruitwillgo
vendor's invoices and the purchaser's Norisitallthatnecessary. Thereisnocertaintythatif upandbeyondthereachas
records needs simplification. “In the Atthetimeofthe petroleumcomesunderGST, stateswillnotagreeatall.At
Covid-era and beyond, businesses are introductionofGST,petrol thetaxratewillcomedown. present,petroleumisan
looking for the government to provide anddieselwerenotincluded Italldependsonwhatthe item,alongwithalcohol,
detailed guidelines for conducting andtheyremainedunderthe GSTCouncildecides.Ifafter whichgivessatisfactionto
hearings and assessments virtually, existingsystemofcentral givingtheinputcredit, statestheyhavesomefiscal
through increased use of technology,” excisebytheCentreandsales sufficientrevenuedoesnot federalismleftwiththem.
says Jain. taxbystatessothatinput come,surelytheCouncilwill Thisisapreciousfeeling
Mohan is of the view that the creditofprevioustaxpaid jackuptheratetohigheror whichtheywillnotpartwith.
implementation of e-invoicing and wasnotadmissible.That thehighestorevenputacess.
new returns form at the earliest may madethetaxhigher,though, Itisaninvalidargumentthat The writer is a retired member of
help further simplification of the ofcourse,itdependsonthe GSTwillbringdowntherate the Central Board of Excise &
GST law. rateoftaxlevied. oftax. Customs
Ifpetroleumisincludedin Onemustunderstandthe E-mail:smukher2000@yahoo.com
1
Thulasidas, managing director of
QUIZ 666
Kannur Airport, says at present these
devices have been installed at two of
its gates; all seven would have the
device by next week.
Such decisions couldn't have been 1 The true story about migrant la-
bourers renovating and painting a
school in Rajasthan a month ago
5 Whose ad has the base line “Your
Extraordinary Story”?
taken without consultation among var-
ious stakeholders. Video conferencing
and other remote working applications
has now been replicated in a
brand’s commercial.Name it. 6 Name this 100 year plus interna-
tional spirits brand that gets its
brand name from the place where
that have found traction across indus-
tries came in handy in carrying out
these changes. As a Bangalore
International Airport spokesperson
2 This company began life in 1929
when Radio Corporation of America
formed a UK subsidiary, to support
it sources its raw material has es-
tablished itself. The name of the
place, in the language of its
puts it: “All additional infrastructure the country's growing cinema in- natives, actually means yellow
was procured in keeping with the strict dustry. Today it is one of the big brown water.
guidelines that we normally follow, on names in the Global BPO industry
7
an accelerated schedule. Due to long- space. Name it. Name the brand that is running a
standing relationships with most part- Covid era campaign called “Never
3
ners, the tests were conducted from Name the brand that says that its __ too far down — You can’t stop us”
remote locations, using BIAL’s in-
now comes with triple the number
house experts for support.”
“These changes will give confi-
dence to airlines and passengers on
of raw onions, in order to ensure
that stench of the onion breath is
good enough to keep people away,
8 Name the Rock group which origi-
nally composed the Dhara Oil sig-
nature tune and has now recreated
the safety of air travel. This will kick-
start the revenue cycle of the aviation thus helping social distancing goals. the same during the Covid times
sector,” says Kuljit Singh, transactions
partner, EY.
That said, the journey hasn’t been
glitch-free. Operators attribute the
4 This company founded in the 1930s
was influenced by the modernism
movement that propounded the
9 Name the product that was
launched in the 1950s with the in-
tention to fit in a pocket and cost
early hiccups to the short notice they concept of Art and Technology — a no more than a pack of cigarettes.
got before restarting operations. Take new unity. Their USP is selling
Air India’s IT system that is waiting to
be embedded in the server of private
airports. That means an Air India flyer
standardised individual compo-
nents that can be pieced together
to form a comprehensive collection
10 Connect the two images and what
do you arrive at?
cannot print her boarding card outside of furniture. Name it and one of its
the entry gate and has to do it at the world-famous creations launched
kiosk inside the airport premises
in 1933.
where touching the screen is unavoid-
able. Similarly, some airports like Delhi COMPILED BY GAURAV SRI KRISHNA, www.facebook.com/gaurav.s.krishna
still await body scanner devices at pre-
embarkation security check-points. So
long — longer than usual — metal ANSWERS TO THE STRATEGIST QUIZ 665
detectors continue to be used by secu-
rity personnel during frisking. These 1.Skittlesbrandowned India and can be 8.HackerOne. It is a
longer metal detectors increase the byHershey’s found on their vulnerability
distance between the passenger and 2.InHongKong.All website coordination and
the security person but ideally the businessesthat 4.BackronymforSlack, bug bounty platform
whole process should be contactless. openlysupportpro- asoftwarecompany that connects
“The sudden announcement by the democracy whichoperatesa
government to resume flights took us businesses with
movementand collaborationtool
by surprise. Till the last moment, we penetration testers
displaytheirintentin andwhosestock
weren’t clear about the number of
theirrespective priceshaverisen and cybersecurity
flights that would be allowed to oper- researchers
ate,” says an Airports Authority of
premisesare postCovid
India (AAI) official while discussing calledyellow 5.Jharkand 9.Dell
the initial hiccups. businesses
And while these changes were pan- 3.All dishes whose 6.RiteshAgarwalof 10.Theplayingcard
demic-induced, the industry acknowl- recipes have been OYOHotels industry
edges that they are here for good. crafted by Hershey’s 7.Budweiser
Mumbai International Airport
(MIAL) CEO Rajeev Jain said during a
One lucky winner will receive a cheque for ~2,000. Send your entries to strategist@bsmail.in.
webinar on May 29 that compulsory
All entries must carry the postal address of the contestant. Last date for receiving entries is
web check-in would help in reducing
June 2 till 8 pm. Previous winners and employees of Business Standard and their families are
the number of counters. He also high-
lighted the scope for another change not eligible to participate. The winner is chosen on the basis of the first correct entry received.
— identification checks at the gate — There were 17 correct entries to Quiz number 665 and the winner is
and said that the industry has been Dattatreya Sengupta from Agartala
working on it for a long time.
 MUMBAI | MONDAY, 1 JUNE 2020 POLITICS & PUBLIC AFFAIRS 13
"MODIIMPLEMENTEDDECISIONSWHICHWERE "THEMANTRANAMEDMODIIS "THISGOVERNMENTISTRYINGTOFILL
AWAITEDFORDECADES.THESEDECISIONSHAVE ENSHRINEDINTHEHEARTOF COFFERSOFTHESELECTRICHANDIS
CHANGEDTHECOUNTRY'SFACE" EVERYCITIZENOFINDIA” INFLICTINGPAINONTHEPOOR"
J P NADDA, SHIVRAJ SINGH CHOUHAN, RANDEEP SURJEWALA,
BJP president Madhya Pradesh chief minister Congress chief spokesperson

> .

In Gujarat, BJP in damage control NEWSMAKER/ NITIN PATEL

The party dials up propaganda on the govt’s behalf as Covid-19 continues to ravage the state
Ambition on hold
VINAY UMARJI
RADHIKA RAMASESHAN

I
f the death and devastation caused
by Covid-19 in Gujarat — ranking
fourth, after Maharashtra, Tamil
Nadu and Delhi, in the number of
cases but way ahead of the latter two in
fatalities (on the last count, 1,007 to Delhi’s
416 and Tamil Nadu’s 160) — are
ineluctable realities, as striking is the
Bharatiya Janata Party (BJP)’s instinct and
ability to persist with its politics.
It’s a matter-of-course for the pandemic
and politics to co-exist, because there’s an
election on the horizon. Indeed, the munic-
ipal and zilla panchayat elections are
scheduled to be held between October and
December this year. “The outcome will be
a referendum on the way our government
handled the Covid-19 pandemic,” a Gujarat
BJP office-bearer said.
“The administration should stop dis-
seminating the figures of the dead and
focus on the recoveries to lift people’s
morale. Our party machinery should dial
up propaganda on the good work that the
government and the BJP are carrying on.
We have distributed close to 200,000 med-
ical kits. If our each booth pramukh (chief)
publicises this fact, he will have covered
300 households and that translates into
1,000 voters. That should be the BJP’s
goal,” stated a south Gujarat MP. The MP
brushed aside the social and economic
upheaval that shook cities like Surat after
the painful exodus of migrants who pow-
ered diamond and textile trades as a “tem-
porary setback”.
“Before long, those who left will return
because they have little or no land to fall
back on in their villages. The MGNREGA
(Mahatma Gandhi National Rural
Employment Guarantee Act) brings only
~3,000 for 15 days compared to ~20,000 per
month they earn in Gujarat,” the MP
claimed.
A senior Gujarat leader admitted: “We
have to reflect on why a resource and cash-
rich state like ours faces this health crisis.
Administrative incompetence? I can’t say
but something has gone seriously wrong.”
According to observers, the pandemic
highlighted the flaws in the official policy
that for years overlooked the health sector
and encouraged private players to the
detriment of the state medical infrastruc-
ture. “This happened for over 20 years.
Health and education were accorded no
priority. There was hardly any recruitment
of doctors and paramedics. In terms of
vacancies (in the medical sector), Gujarat
is among the top states. New hospitals
that came up were owned by private busi-
nesspeople, largely from the Patel com-
Notsolongago,on29February,Gujarat’s
Health Minister, Nitin Patel bared his
heart. At the stone-laying ceremony of
the Maa Umiya temple — the tallest to
bebuiltinAhmedabad—he said:"Ihave
reached here at this junction only
because of the blessings of Maa.
Otherwise, everybody knows that I am
on the one side, whereas everybody else
is on the other."
It took no time at all for the Congress
to respond. The Congress MLA from
Lathi (Amreli), Virji Thummar, while
speaking on the 2020-21 Budget said:
“The health minister, who is also the elected from the Mehsana constituency,
deputy chief minister, Nitin Patel, is a Patidar stronghold, from where Patel
doing a good job and we support him. — a commerce graduate — also runs a
But his own party does not. I make him cotton ginning and oil industry.
an offer: defect to the Congress, along It is to the Patidar community (to
with 15 other BJP members, and we will which he belongs) that Patel owes a debt
be ready to make you the chief minister.” of gratitude. He is an almost unques-
This was not an empty boast. In the tioned leader of the powerful caste vote-
182-member Assembly, the BJP has 103 bankfortheBJPthatthreatenedtomove
seats and the Congress 73. The BJP away in the aftermath of the Hardik
immediately defended Patel and said Patel-led agitation, but amazingly rallied
the Congress was dreaming. Chief behind Patel even after that phase of dis-
Minister Vijay Rupani remained quiet. contentment. Patel was instrumental in
But Patel’s ambitions might have to holding talks with his community lead-
take a back seat after the Covid-19 crisis ers and assuaging their concerns.
in which Gujarat has seen a meteoric While Rupani is seen as an amiable
rise in cases and deaths. A Gujarat High take-everyone-alongkindofleader,Patel
Court (HC) Bench pulled the state is much more pugnacious. In a recent
The Covid-19 crisis is likely to be a major issue in the municipal and zilla panchayat elections, which are scheduled to be held between administration up for its handling of the interview with a local TV channel, Patel
October and December. As of Sunday, the state had reported 16,343 cases and 1,007 deaths PHOTO: PTI pandemic, especially in Ahmedabad, said: “Experts are saying that the Covid-
thecitywiththemostnumberofpositive 19 pandemic is going to continue a long
munity. Doctors and pharmacists are also with testing, a rule that decelerated the ister), continues to be in Rupani’s CMO cases and deaths in the state. time… Therefore, the interest of 63 mil-
Patels. This is not the time to speak of caste critical process of identifying the infected. after superannuation. “He is the main link The Division Bench of the high court lion citizens of Gujarat and their liveli-
conflicts. But I can’t help feeling that the The MP’s admission about Delhi’s inter- between the political leadership and the had last week described Ahmedabad hood are important. Until now, we have
BJP government’s management of the vention, inadvertently or otherwise, bureaucracy, between Delhi and Civil Hospital, the state’s biggest Covid- been strictly implementing the lock-
Patels’ demand for reserva- focussed attention on Gandhinagar,” a source said. 19 facility, as being “worse than a dun- down… Now, a stage has come where
tion and the ensuing vio- another trend. An insider The other angle in the grey zone of geon”. It asked if Patel and Chief we have become acquainted with coro-
lence impacted the com- According to said: “We are upset with the the power hierarchy is Nitin Patel, deputy Secretary Anil Mukim had any idea navirus… Now, if business, jobs, agricul-
munity at all levels. Private observers, the chief minister (Vijay chief minister, who holds the health and about the problems facing patients and ture,animalhusbandry,andlabourwork
hospitals didn’t cooperate pandemic brought to Rupani) for his ineptitude finance portfolios. It is common knowl- staffers. To this, Patel had responded remain stopped, not only a person or his
with the government. It light the flaws in the to work the system.” Rupani edge in Gujarat that Patel, who has been that in the last two months, he had vis- family will be in a bad condition, but
had to fall back on its own official policy that for — who succeeded a senior minister for 20 years, is sulking ited the civil hospital five times. also the state’s economy. It is not appro-
medical resources that years overlooked the Anandiben Patel in August since he was overlooked for the CM’s post. “I have held three meetings with priate to let that happen. Relaxations are
were woefully inadequate,” health sector and 2016 — is perceived as the “We get a feeling that Patel is indifferent experienced and renowned private doc- being given in a phased manner…”
explained an observer. encouraged private hand-picked nominee of to what’s happening because of his tors and seniors of civil hospital, kidney Rupani, by contrast, has been con-
A Saurashtra BJP MP players to the Delhi, and of Amit Shah, the reported differences with the CM,” a BJP hospital, and heart hospital on the civil sistent in every phase of lockdown, say-
conceded that private hos- detriment of the home minister. “We are not source said. hospital campus... Chief Principal ing the state will be guided by the Centre.
pitals “failed” to rise to the state’s medical sure of how much leeway Meanwhile, the Gujarat BJP dutifully Secretary to the CM K Kailashnathan, That may be the factual position but it
challenge. “They treated infrastructure he is given,” the insider con- organises weekly audio and video confer- Additional Chief Secretary Pankaj certainly isn’t a political position.
the lockdown like a holiday. ceded. ences addressed by the state party presi- Kumar, who is holding special responsi- Patel has held senior positions in the
They got into the act when the Delhi brass So even as the transfer of Vijay Nehra, dent, Jitu Vaghani, and the general secre- bility of Civil hospital, and Principal government and enjoys the backing of
directed them to help,” said the MP. Even Ahmedabad municipal commissioner, was tary (organisation), Bhikunhai Dalsaniya, Secretary(Health)JayantiRaviwerealso thepartypresidentAmitShahandPrime
after that, private hospitals, whose services seen as the “first decisive” step Rupani for workers at all levels. present in those meetings,” Patel said. Minister Narendra Modi. In 2014, when
were requisitioned under the Epidemic took, the overall sense of the Gujarat BJP “The idea is to get feedback from the “Ourfamilymembersareconcernedand Modi was predicted to win, Patel had
Diseases Act, got into a spat with the civic was in this skewed delegation of power — cadre, as well as monitor and assess how they stop us from stepping out. In such a said he would be happy to take up the
authorities over the rates prescribed by the it was Kuniyil Kailashnathan who exercised active party workers are on the ground,” scenario,Ihaveneveravoidedgoingout.” chief minister’s post when Modi
state for treating patients. The Gujarat gov- a veto. Kailashnathan, who was Prime the Saurashtra MP said. Can the party In the complex caste politics of becomesprimeminister.Butintheafter-
ernment also mandated that private labs Minister Narendra Modi’s chief principal organisation be a substitute or effectively Gujarat, a rap by the court is not much math of Covid-19, that ambition may
had to seek its approval before going ahead secretary (when Modi was the chief min- complement the government? of a political setback. The deputy CM is have to be nursed for a while.

STORY IN NUMBERS

WORK FROM HOME IS A BIG HIT
Urban working professionals
across 10 cities in India — Delhi
NCR, Mumbai, Chennai,
Bengaluru, Hyderabad,
Kolkata, Jaipur, Ahmedabad,
Pune, and Surat — would like to
continue working from home
even after the lockdown, a
survey has found.
As many as 69%
respondents said they would
like working from home if that
would mean less commute and
cleaner air, among other
reasons, such as more flexibility
and family time, found the
online survey of 1,082 urban
professionals conducted by
New Delhi-based
communications initiative
Climate Trends in partnership
with YouGov, a UK-based data
analytics company.
The survey was an attempt
to understand how people
were feeling under the
lockdown since March 25. Of
the respondents, 60% were
male and 59% were between
the ages of 25 and 34.
KEY TAKEAWAYS
64% said working from
home allowed them to
spend more time with
family
43% are willing to WFH
AAP, BJP battle it out over Covid
SHUBHOMOY SIKDAR
Delhi’s Covid-management
infrastructure has started showing
signs of fatigue. Cases continue to
rise at an alarming rate, even as the
Aam Aadmi Party (AAP) government
looks to balance containment
strategies with more relaxations after
May 31.
So far, the story of the national
capital is similar to most states,
especially the worst-affected ones.
However, over the past fortnight or
so, it had to contend with an
% of respondents (1,082 interviewed across 10 cities)
aggressive political opposition,
69% Willing
to work from home 31% to office
to continue Want to return especially the Bharatiya Janata Party
(BJP), which has intensified its
attacks on the Arvind Kejriwal-led
REASONS FOR CONTINUING WFH government. The Opposition party
Want to avoid traffic claimed the AAP government failed
and crowds 76 on various counts and accused it of
under-reporting of the death figure.
Enjoying clean air due to While the odd Twitter exchanges
less traffic and pollution 67 were on, it was widely believed that
Enjoy flexibility Kejriwal was relying on the strategy
of schedule
66 of avoiding confrontation that served
him well in the Assembly elections;
Want to spend more time some even speculated that he has
with my family 59
had a deal with the Centre. For its
Want to avoid part, the BJP’s local unit was also
commuting 58 reeling from the impact of a
humbling defeat at the hands
of the AAP.
The Covid-19 crisis, however, has
provided the BJP with an
traffic and pollution if proper work
opportunity to strike the ruling party
65% expect the govt to infrastructure is in place,
where it hurts the most: Its
put in regulations to force productivity is
governance record.
industries to go maintained, and there is Sanjay Kumar, director at the
evidence of health
pollution-free Centre for the Study of Developing
The BJP has been attacking the Arvind Kejriwal government over the alleged
under-reporting of deaths and non-availability of hospital beds. The Covid-19
case tally stood at 18,549 in Delhi as of Sunday; this included 416 deaths PHOTO: PTI
ever since, attributing the difference
(between reported and purported
numbers) to cremations or burials
according to the standard protocol
in their respective areas.
“The number of death
is something we have been
vocal about for some time
now, but of late, we have
also seen a major jump in
Covid-19 cases being
reported every day. The
said that it has 30,000 beds, it
counted private beds as its own. Now
for patients who have large families
and smaller houses, home
quarantining is not a
workable solution and the
government needs to
ensure an adequate
number of beds,” he said.
Jasmine Shah, AAP
spokesman and Delhi
Dialogue Commission
mandatorily submit the previous
day's death summary by 5 pm next
day,” said Shah.
The standing committee
chairman of North MCD, Jai Prakash,
who earlier had claimed that 282
people were cremated or buried in
accordance with the Covid-19
protocol in his area, said the
corporations will continue to raise
the matter as the court hearing (on a
PIL seeking the scrapping of the
DAC) did not involve the
corporations as a party. “Every day,
we are getting reports of more and
more bodies coming to
crematoriums and burial grounds;
someone has to explain the
mismatch.”
BJPleadersarealsosaidtobeupset
aboutthefactthatthefoodgrain
distributionunderthe
PradhanmantriGaribKalyanYojana
tonon-rationcardholdersisbeing
donefromthestate-runPDFshops,
whichdeniesthemtheopportunityto
claimcreditforacentralscheme.
“Nowimagineabeneficiarycollecting
therationfromashopwherehesees
thepictureofthechiefminister,what
willhethink.Wealsobelievethatthe
disbursalisnothappeningproperly,”
saidanotherleader.
Amid all these claims and
rebuttals, what remains a fact that
the government has its work cut out.
The rising numbers and a major
spike in May is an uncontested claim.
On Friday, it came out with a full-
page newspaper advertisement that
highlighted how “more than 80 per

STATE
benefits
between half a month 9 of 10 employers said Societies, said: “The elections are other fallout has been that vice-chairman, dismissed cent coronavirus-positive patients
and the entire month; their company saved on 85% employers said this away but perception makes some private hospitals are most of these allegations can recover easily at home”, thus

SCAN
mode of working saved difference. The votes that the AAP looting patients charging and accused the BJP of signalling a change in the
37% said 11 to 15 days each operational costs since gets here don’t come from loyal anywhere between ~5 to playing politics. He cited a hospitalisation strategy.
month employees began to work substantial man-hours
supporters but those who reward it ~15 lakh. Someone has to recent Delhi High Court Also on Friday, the Delhi High
by eliminating the
67% are enjoying from home; 89% are
willing to encourage commute time
for performance. When the take responsibility for this DELHI order refusing to scrap the Court took suo moto notice of the
cleaner air because of less government is not able to perform and we have taken it upon Death Audit Committee matter related to the cremation of
work-from-home options Data and text: IndiaSpend and you keep attacking the ourselves to alert the (DAC) constituted by the bodies of Covid-19 patients based on
government, they may take a government, so that it doesn’t repeat Delhi government as a vindication of a news report that brought to light
“It is important to not overstate the findings... It is fair to say that there negative view.” its mistakes,” Delhi BJP President the government’s stance that there the lack of facilities for the
The controversy over the death Manoj Tiwari told Business Standard. was no fabrication of data. cremation of bodies at cremation
is an appetite among a certain number of professionals to deepen the
toll erupted earlier this month. BJP Tiwari has been vocal about lack “There was a procedural delay in grounds. The BJP was quick to lap
gains from this lockdown” NAVROZ DUBASH, Professor, Centre for Policy Research (CPR) leaders from the three municipal of hospital beds in the past few days. sending death summary... All it up, launching a fresh attack on
corporations have upped the ante “Similarly, when the government hospitals were told that they have to the government.
14
>
Expand ‘outdated’ G7 bloc to include India, says Trump
Postpones
G7meettill
September
PRESS TRUST OF INDIA
Washington, 31 May
T
he US President Donald
Trump has postponed the
G7 Summit till September,
and expressed his desire to
expand the ‘outdated’ bloc to G10
or G11, including India and three
other nations to the grouping of
the world’s top economies.
Trump has been over the
weeks suggesting that there is
“no greater example” of
reopening amid the Covid-19
pandemic than holding an in-
person G7 summit by the end
of June. The president on
Saturday said he is “postpon-
ing it (the summit) until
September” and plans to invite
Russia, South Korea, Australia
and India.
“I don’t feel that as a G7, it
properly represents what’s going
on in the world. It’s a very out-
dated group of countries,” he
China intrusion can lead
to India losing DBO link
China continues to consolidate its defences in Galwan River and Pangong Lake
areas up to 3 km inside the territory that Indian Army has claimed for decades
AJAI SHUKLA
New Delhi, 31 May
In what the Army is recognising
as a repeat of Pakistan’s 1999
Kargil intrusions, but this time
by China in eastern Ladakh,
troops of the People’s
Liberation Army (PLA) contin-
ue consolidating their defences
in the Galwan River and
Pangong Lake areas, up to three
kilometres (km) inside territory
that the Indian Army has
patrolled and claimed for
decades.
Just as the Kargil intrusions
allowed Pakistani troops to
dominate the Srinagar-Zojila-
Kargil-Leh highway and threat-
ened to cut off Ladakh from the
north; the Chinese intrusion
into the Galwan River valley
allows PLA troops to overlook
the strategic Darbuk-Shyok-
Daulat Beg Oldi (DSDBO) high-
way and cut off the army’s lone
year-round connection with its
isolated “Sub-Sector North”
(SSN), at the base of the
Karakoram Pass.
PLA soldiers that have
established themselves at the
mouth of the Galwan River
valley at its confluence with
the Shyok River are just
one-and-a-half kilometres
from the DSDBO road. They
overlook the road, which
winds along the Shyok River
valley, and can bring down
artillery and missile fire to
prevent its use.
The PLA apparently intends
to dominate this road perma-
nently. Even as top Chinese offi-
cials declare the issue can be
resolved through dialogue, PLA
intruders are building bunkers
while PLA engineers are con-
necting their forward troops
with China’s formidable road
infrastructure on the Line of
Actual Control (LAC).
Dockingconfirmed—CrewDragon
hasarrivedatthe @space_station!
PRESS TRUST OF INDIA
Washington, 31 May
SpaceX’s Dragon spacecraft
with two Nasa astronauts on
Sunday successfully docked
with the International Space
Station (ISS) after a historic
launch from the Kennedy Space
Center in Florida.
Elon Musk’s SpaceX compa-
ny confirmed the successful
docking of Nasa astronauts Bob
Behnken and Doug Hurley with
the ISS, the orbiting laboratory.
“Docking confirmed— Crew
Dragon has arrived at the
@space_station!” the California-
headquartered company
announced on Twitter.
The National Aeronautics
and Space Administration
(Nasa) also took to Twitter to
announce the docking.
“Docking confirmed!
@AstroBehnken and
said. “So it might be a G10, G11,
and it could be after the election
(in the US) is over...,” Trump
said. He said the G7 Summit
could happen before the UN
General Assembly session in
September.
Trump said the summit
could take place the weekend
before or after the UN General
Assembly, which is currently
scheduled to begin on
September 15. Trump has
already “roughly” broached the
idea with the leaders of the four
countries he’d like to add.
“We want Australia, we want
India, we want South Korea. And
what do we have? That’s a nice
group of countries right there,”
he said, not mentioning Russia.
Trump has already talked about
re-inviting Russia back to the
group, which was kicked out of
the bloc which was originally G8
countries. In 2014, Russia was
disinvited from gatherings of the
former G8 after the country’s
annexation of Crimea.
G7 is the group of top seven
developed economies. These
include the US, United
Kingdom, France, Germany,
Italy, Japan and Canada. The
US currently holds the annual
presidency of G7 countries.
SINO-INDIA BORDER
Intrusion points byPLA
Shahidullah
Yarkand
Kashgar
Ka
rak
ora
m After the Kargil intrusions
Ra
ng
Galwan River
Valley
Hot Springs,
Gogra, PP14
and PP15
Pangong Tso
LADAKH
Macartney-MacDonald
Line(1899)
ForeignOfficeLine(1873)
LineofActualControl
Chinese1956claimline(affirmed
byPremierChouEn-Laiin
December1959asthecorrect
boundaryclaimedbyChina)
Chineseclaimlineof1960
PointstowhichIndianpatrols
hadbeengoingupto1958
NewDelhi,December1962
Courtesy: CIA report, the Sino-Indian border dispute, s ection III, 1961-62
Government sources con-
servatively estimate that the
PLA has captured more than 60
square kilometres of Indian-
patrolled territory in the last
month— equally divided
between the northern bank of
the Pangong Lake and the
Galwan River sectors.
Chinese troops now block
access to several Indian
“Patrolling Points” (PPs) along
the LAC, which Indian army
patrols have regularly visited
for decades to assert their claim
over the area. Amongst them
are PP-14, 16, 18 and 19.
At this time of the year,
when the risk of Chinese intru-
@Astro_Doug officially docked
to the @Space_Station at 10:16
am ET:” Nasa said in a tweet.
The docking took place 19
hours after a SpaceX Falcon 9
rocket blasted off from the
Kennedy Space Center. The
25 US cities under curfew; one protester shot dead, hundreds arrested
Sinkiang
Amtogar Lake
e of 1999, which an enquiry
Lak
tsa
ng
Ra
ng
e
TIBET
C H I N A
Gartok
sions is highest, it has been cus-
tomary for the army’s
Udhampur-based Northern
Command to move reserve for-
mations into the area, ostensi-
bly for “training exercises”. But
this year, reserve troops were
retained in their peacetime
locations because of the
Covid-19 pandemic.
Consequently, there has
been a dire shortage of reserve
troops to react to the PLA’s
multiple intrusions. By the
time the northern army was
able to move reserves into the
area, the PLA had already con-
solidated its hold over its new-
ly acquired positions. Army
crew will be welcomed aboard
the ISS, where they will
become members of the
Expedition 63 crew, which cur-
rently includes Nasa astronaut
Chris Cassidy.
The SpaceX Crew Dragon
MUMBAI | MONDAY, 1 JUNE 2020 1
Bridges over the Chicago River lifted to limit transportation amid national outrage
Protests spread to at least 30 cities in
the US on Sunday over the death of
George Floyd at the hands of a police
officer in Minneapolis last week. At
least three protesters were shot at —
one of them fatally — in downtown
Indianapolis late on Saturday night,
CNN reported. In New York City, police
arrested about 350 people overnight
even as 30 officers suffered minor
injuries. In Chicago, at least 240 people
were arrested and six shot at. At least
25 cities across 16 states in the US have
imposed curfews. The accused officer
has been charged with third-degree
PITTSBURGH CHICAGO murder and manslaughter PHOTOS: PTI
Nepal tables bill to clear map
that includes Indian territory
The Nepal government on Sunday tabled a Constitution amend-
ment bill in parliament aimed at altering the country’s map amid
a border dispute with India. Minister for Law, Justice and
Parliamentary Affairs Shivamaya Tumbahangphe, on behalf of
the Government of Nepal, tabled the bill, a day after the main
Opposition Nepali Congress also backed the legislation. Nepal
recently released the revised political and administrative map of
the country laying claim over the strategically key areas of
Lipulekh, Kalapani and Limpiyadhura. India reacted angrily to
the move saying such ‘artificial enlargement’ of territorial claims
headquarters in New Delhi is
coming round to the view that
will not be acceptable and asked the neighbouring country to
refrain from such “unjustified cartographic assertion”. PTI
top generals in Ladakh have
been caught napping. There is
growing talk about replacing
the corps commander in Leh,
and even the northern army
commander in Udhampur.
blamed on “intelligence fail-
ure”, not a single general lost
his job or was replaced. The
army pinned the entire blame
on a single brigadier in Kargil.
A retired defence intelli-
gence chief, speaking anony-
mously retired, blames the cur-
rent situation on an
intelligence, as well as an oper-
ational failure. “The Chinese
have always been ultra-sensi-
tive to India expanding its
presence in northern Ladakh.
That is because this adjoins the
Aksai Chin, through which
China has constructed its
strategic Western Highway that
connects Tibet with Xinjiang.
When we built the 255-kilome-
tre DBDSO Road through this
area, why did the army not
deploy troops on the eastern
side of the Shyok, especially in
the Galwan Valley, to protect
the eastern approaches from
the Chinese side?” he says.
The officer cites the Chinese
intrusion in 2013 into Depsang,
in the Daulat Beg Oldi sector,
soon after India activated a
landing ground there and
beefed up troop numbers.
Within the army, there is
growing concern that New
Delhi will allow the Chinese to
retain the territory they have
occupied in the last month. In
public statements last week,
Defence Minister Rajnath Singh
has already conceded that the
alignment of the LAC, and
therefore the ownership of ter-
ritory, is unclear in this area.
spacecraft, carrying Nasa
astronauts Behnken and
Hurley, lifted off at 3:22 pm
EDT on Saturday atop the
company’s Falcon 9 rocket
from Launch Complex 39A at
Nasa’s Kennedy Space Center.