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27

FRIDAY, JANUARY 31, 2020

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mint primer
QUICK EDIT
Budget: When Brexit
short on options, blunder
where do we go? Britain exits the European
Union (EU) today. The With-
drawal Agreement Bill cleared
BY KARAN BHASIN its final hurdle with the Euro-
pean Parliament okaying its
When Nirmala Sitharaman presents the budget on Saturday, she is
expected to outline the Centre’s plans to deal with challenges posed departure. After endless bouts
by the slowdown and achieve the $5 trillion economy target by 2025. of confusion and several politi-
Mint looks at what to expect in the budget for the year starting 1 April. cal slugfests, London has finally
acted upon its 52% “leave” vote
A big push needed to kick-start growth in 2016. The outcome of that
The slowdown has deepened in India as major economic indicators including referendum had left us stunned
GDP growth have declined in the last couple of quarters. at Britain’s capacity for self-de-
Growth (year-on-year change in %) feat seven decades after the sun
14
GDP PFCE GFCF set on its empire. Breaking free
12
of the EU has a steep price tag
10 attached. Even if London gets a
7.85
8 trade deal with the EU, the Brit-
6 5.06 ish economy would be hit.
6.45
4 4.55
The risks of turning inward,
2.86
2 however, got eclipsed by an
0
1.02 inflated sense of sovereignty
among Britons, prodded along
-2
Q1 2013 Q2 2020 by a “leave” campaign that had
GDP: Gross domestic product, PFCE: Private final consumption expenditure, GFCF: Gross fixed capital
formation, GFCE: Government final consumption expenditure xenophobic undertones. While
Source: Statistics ministry London gets greater policy lee-
NAVEEN KUMAR SAINI/MINT
way without the bureaucracy of
hen we fall asleep, where do nue shortfalls provide the govern- Brussels in its way, it could face

W we go—a song by Billie Eil-

ish, Grammy winner for
Album of the Year.
ment little room to raise expenditure
without widening our deficits. Thus,
the extent of fiscal measures would
Irish discontent and a Scottish
push away from the UK toward
the EU. Much hinges on bilat-
depend on a political economy call eral trade ties. These haven’t
1 WHY IS THIS BUDGET
SO IMPORTANT?
The series of announcements made
regarding the fiscal deficit and medi-
um-term fiscal consolidation plan.
snapped yet, but the EU’s cur-
rent reprieve for its ex-member
is temporary. It is a pity that
by the finance minister post August to
revive growth have raised hopes of a 3
A TAX CUT OR HIGHER
GOVT SPENDING?
“dream” budget that would kick-start This is again an area where there is
Britain’s nativist impulses,
expressed as a desire for border
the Indian economy. This budget limited consensus. Some experts have controls, have got the better of
comes at a time when we are witness- argued the need to give a boost to good economic sense on open-
ing a consumption slowdown, accu- rural consumption, which would ness. Expect Brex-regret.
mulation of stress in the financial sec- require the government to increase its
tor, low levels of private investments, expenditure on schemes such as
a prolonged period of stagnation in MGNREGA, PM-Kisan Samman
the real estate sector and revenue Nidhi and/or increase outlays on
shortfalls on the fiscal front. The development of rural infrastructure.
electoral mandate of 2019 combined Others argue the need to consider
MINT METRIC
with the government’s ability to take rationalization of direct taxes com- by Bibek Debroy
tough decisions as witnessed over the bined with an overall direct taxation
last few months has led reform. This comes against
many to believe this could the backdrop of the his-
A sniffer dog, camera on the head?
indeed be a historic bud- toric corporate tax cut in Yes, that is exactly what you read.
get. The recent decision to September. The argument
privatize select public sec- I M P E T U S in favour of a tax cut is that In Visakhapatnam station
tor undertakings, includ- the current peak tax rate is A railway experimentation,
ing national carrier Air India, hints 17% higher than our current corporate
that Sitharaman may make path- tax rate and a tax reform would addi-
Will take time to become widespread.
breaking announcements. tionally revive sentiment, which
could lead to further revival of discre-

2 WHAT SHOULD BE THE tionary consumption.

POINTS OF FOCUS?
Though many are anticipating a big-
bang budget, it would be wise to
realign our expectations given the
constraints faced by the government.
For starters, this budget must focus on
addressing the financial stress in
India’s banking and financial services
sector, particularly shadow banks.
This would require a US-like Troub-
led Asset Relief Program (TARP),
which infused billions of dollars into
the system by purchasing toxic assets.
Addressing the weakness in con-
sumption, which is partly due to the
liquidity squeeze that gripped non-
bank lenders, is critical for the revival
of economic growth. Equally impor-
tant would be to boost confidence and
revive economic sentiment through
taxation reforms. The recent tax reve-
QUOTE OF THE DAY
4 WILL THERE ALSO BE
HIGHER OUTLAYS?
It is possible that the government pre-
My goal for this next decade
pares a comprehensive stimulus isn’t to be liked, but to be
package that focuses on tax reform by
implementation of the proposed
understood.
Direct Tax Code. Alternatively, the
long-term capital gains tax (LTCG)
may be removed from equity consid-
ering that we already have the securi-
ties transaction tax and the LTCG
imposition has mostly led to confu-
sion rather than helping the govern-
ment’s kitty. LTCG for other assets MARK ZUCKERBERG
may be streamlined and the dividend CHIEF EXECUTIVE
distribution tax levied at the recipi- OFFICER OF FACEBOOK
ent’s level. Tax rationalization would
require a rejig with tax slabs com-
TURN
TURN TO TO PAGE
BACK 92
FLAP

m MINT SHORT

Musk adds $2.3 bn to his fortune in 60 minutes

AP
Sophie Alexander outstanding stock, which comprises the
feedback@livemint.com bulk of his fortune, while his closely held
NEW YORK Space Exploration Technologies Corp.
accounts for about $14.6 billion.

E
lon Musk’s fortune swelled by $2.3
billion in the span of an hour on
Wednesday after shares of Tesla
Inc. soared in extended trading on
stronger-than-expected fourth quarter
earnings and the company ramping up
production of its Model Y crossover
sport utility vehicle.
The electric-vehicle maker’s stock,
which closed at $580.99, surged 12% to
$649 at 5.16pm in New York, boosting
Musk’s net worth soared to about $36 bn
after Tesla reported strong Q4 results.
the chief executive officer’s net worth to
about $36 billion, according to the
Bloomberg Billionaires Index.
Musk, 48, owns about a fifth of Tesla’s
Tesla’s shares have been on a roll
since October, when it posted a surprise
third quarter profit. The company’s
market value now tops $100 billion, and
if it stays above that threshold for an
extended period, Musk will be eligible to
unlock the first chunk of a long-term
compensation award that could net him
more than $50 billion if all performance
targets are met. He receives no salary or
bonuses. BLOOMBERG
Inflation worry amid industry pick-up
The divergence between WPI inflation and retail inflation has increased in
the current fiscal. A bright spot is that factory output has started picking
up, an early sign of economic recovery.
WPI CPI IIP (year-on-year change in %)
10

6 4.26
5.54

4 3.53

1.82
2

3.17
0
0.58
-2

-4

-6
Jan 2017 Nov 2019
WPI: Wholesale Price Index, CPI: Consumer Price Index, IIP: Index of Industrial Production
Source: RBI Retail inflation hit 7.35% last month, the highest in
NAVEEEN KUMAR SAINI/MINT more than five years. MINT

FROM PAGE
FRONT91FLAP have their asset reconstruction companies, which can be
used for the creation of a special purpose vehicle that is open
bined with a reduction in the tax rate. An ideal taxation to foreign investments.
reform for personal income tax would eventually have just
three rates. Additionally, the government could create a spe-
cial package for the agricultural economy comprising
investments in rural roads, irrigation and warehousing.
8 WILL TARP BE ENOUGH GIVEN THE
STATE OF THE REAL ESTATE SECTOR?
The fundamental problem in the real estate space is lack of
demand. Therefore, while TARP would help non-banks, the

5 WHAT ABOUT CONCERNS ON INFLA-

TION TARGETING FRAMEWORK?
A key issue highlighted during the current economic slow-
down was the role played by monetary policy since the intro-
duction of the inflation targeting regime. Many have argued
that our monetary policy has been too tight for several years
and this could have caused the non-bank crisis. The inflation
targeting regime has come into serious question as many
believe that the current framework is not the best one for a
developing economy like India. Though a monetary policy
framework review is due in 2021, the term of the present
monetary policy committee (MPC) members ends in Sep-
tember 2020. Therefore, it makes sense to review the frame-
work in 2020 rather than in 2021 so that we can make
changes as necessary before appointing the new MPC mem-
bers.
The answer to this question isn’t clear as there are strong
arguments both for and against it. Those against it argue lim-
real estate sector needs adequate policy support. The gov-
ernment recently announced a scheme to help complete
unfinished projects and a further extension of this scheme
is possible. A key policy instrument could be to let real estate
firms use their CSR funds for completion of unfinished pro-
jects by other builders. Additionally, we may witness a
reduced rate of interest on home loans. Another important
point is that though the government may implement the
Direct Tax Code, which advocates for a removal of exemp-
tions, it may keep some exemptions to encourage savings.
So, a higher tax exemption for those with home loans is pos-
sible even if the Direct Tax Code is implemented.
9 SHOULD THE GOVERNMENT GO FOR A
FISCAL STIMULUS?

6 WHAT ABOUT OTHER

ECONOMIC REFORMS?
Recent steps towards a new labour code,
ited fiscal space with the government and discuss the off-
budget borrowings, which reveal a higher-
than-stated deficit. Their argument also
A TARP-like
privatization and corporate tax cuts indi- highlights the impact of higher borrowings
cate a new direction of economic policy- programme is on government bond yields, which may
making and, therefore, we should expect needed to clean up increase the cost of borrowings for the pri-
some other important reforms in the bud- vate sector. Others point out the fact that
get such as allowing Indian firms to list the balance sheet of our current growth slowdown is a classic
abroad without having to list in India. The many non-banks demand slowdown and as consumers cut
government should also consider selling back on spending, the government should
its Specified Undertaking of the Unit Trust of India (SUUTI) increase its expenditure to support growth. Robust growth
holdings, which will further help the government raise non- is essential to meet our medium-term fiscal consolidation
tax revenue. There could also be amendments in the Special and public debt management objectives.
Economic Zones Act, which are in line with the recommen-
dations of the of the Baba Kalyani committee. Recommenda-
tions by several high-level advisory groups may also be part 10
WHAT DOES THE BUDGET MEAN FOR
INDIVIDUALS, POLICYMAKING?
of the reforms package as we look to become the desired des- It is important to recognize that the goods and services tax
tination for companies leaving China. (GST) is within the ambit of the GST Council, so we may not
witness many changes on that front. Moreover, the budget

7 WHAT COULD BE THE SHAPE OF AN

INDIAN VERSION OF TARP?
is just one part of economic policymaking as several reforms
such as land, labour and agriculture are outside the purview
A TARP-like programme is necessary to clean up the balance of the budget. However, there are several other reforms and
sheet of several of our non-banks to ensure availability of policy changes that are essential for revival of our economic
last-mile credit. A similar programme was launched by the growth rates in the short run. More importantly, this budget
US Fed in 2008 when it provided cheap capital to several would present an economic road map for the next five years
banks for a specified period with the expectation that banks and, hence, it has the potential to ensure that this decade
would resume lending. A similar clean-up is required for belongs to India. It is this road map that is of most interest as
India’s non-banks, which have accumulated bad assets, it would show just how bold a government with a mandate
especially related to the real estate sector. While such a pro- of 303 BJP members of Parliament could be when it comes
gramme is indeed required, it would require a specialized to economic policies.
institution to execute the same. Several public sector banks Karan Bhasin is a Delhi-based policy researcher.

AFTER-HOURS WITH THE BOSS

Z
ulfiqar Khan is managing What is your greatest What talent would you
director at HOOQ India, a extravagance? most like to have?
video on demand streaming I own a limited edi- Being multilingual. It
service formed in partnership tion watch made from makes life thrilling and
with Singtel, Warner Bros and the engine cladding of exhilarating.
Sony Pictures. The 45-year-old the Soyuz rocket that’s If you were to die and
executive is focused on driving been to space. It lets come back as a person
the company’s premium content you live stream a view or a thing, who/what
distribution and monetization in of the Earth on your would it be?
India. Khan was previously the phone, directly from A space traveller—to
business head of Eros Now, where the International Space immerse in the magic of
he led its distribution Station. the vast unknown, look-
across markets, along- What is your current ing back at the blue mar-
side rolling out origi- state of mind? ble and staring ahead at
nal content. He has Junoon (passionate). So the colourful and magi-
also held several much to explore, so much cal beyond.
positions at Star to do, so much to influ- What is your motto?
India, including ence. If you’re not living on
heading revenue What do you consider the edge, you’re occupy-
for several portfo- the most overrated ing too much space.
lio channels, net- virtue? What is your biggest
work accounts Common sense is quite regret?
and handling the overrated. Extraordinary Having regrets of not
sales of the larg- geniuses leave a mark in doing enough.
est branch. history. —BIDYA SAPAM

PEANUTS by Charles M. Schulz

02 FRIDAY, 31 JANUARY 2020
NEW DELHI
PLAIN
FACTS

ARE CRICKETERS PLAYING MORE NOW?

Compared with 2009, they are not, shows data. There is more cricket being played, but rotation and rest are active levers of time management now
Harsh Gupta m MINT GRAPHITI
of a set of 40 leading interna-
104
Chart 1 Chart 2
howindialives.com tional male cricketers in 2019 Average playing days have dropped Of the most active cricketers by number of playing
with a similar set in 2009.
for all four leading nations days, only two are from 2019 and just one from India

L
ast week, Ishant Given that Test matches are
Sharma, the highest the longest format, as a start-
wicket-taker among ing point, we took the 10 play-
Average playing days for top 10 players by Test appearances (in %) Top 10 players by number of playing days in 2009/2019
98
the current crop of ers who played the most Tests 2009

89 90 90 97
85 86 86 87
Indian pace bowlers, that year for four countries: 2019
injured his ankle in a domestic Australia, England, India and
match. This was happening South Africa. We added the
even as India’s pace spearhead other matches played by them
Jasprit Bumrah was returning that year, both international
from a six-month cricketing and domestic. We assigned
hiatus caused by a stress frac- four playing days to a Test 66
ture on his back. match and a first-class game,
64
Ishant Sharma joins Deepak and a day to one-dayers and 52 64
Chahar, Bhuvneshwar Kumar, T20 matches. 64
Hardik Pandya, and Shikhar On an average, the 40 play- 74
James Mitchell Ajinkya Ricky Rory Michael Andrew Simon Matt Alastair
Dhawan on the bench. Such is ers in 2019 registered fewer
the cautionary tale that player playing days compared to their 80 80 Anderson Johnson Rahane Ponting Burns Hussey Strauss Katich Prior Cook
Australia India
fitness has 40 counterparts (England) (Australia) (India) (Australia) (England) (Australia) (England) (Australia) (England) (England)
England South
become, the Policies of in 2009. For Africa
Indian cricket rotation and rest example, the pool
Chart 3 Chart 4
board recently have gone from of 10 Indian play-
asked wicket- Indians are taking the lead in terms of playing more matches All four player profiles have seen a drop in game days
debate to diktat ers averaged 64 Top 10 players by number of matches played Average playing days
keeper Wriddhi- match days in
man Saha,
in cricket, and 2019, the same as Rohit Sharma (India) 62
returning from format specialists in 2009. The big Gautam Gambhir (India) 61 2019 2009
an injury, to not have emerged drop was in the 58
M.S. Dhoni (India)
risk himself in a case of Australia, Virat Kohli (India) 58 Wicket-keepers 62 82
domestic match where the aver- J.P. Duminy (South Africa) 57 Batsmen
and instead save himself for age of 80 days fell to 66 days.
66 74
Mark Boucher (South Africa) 54
international duty. (Chart 1). Spinners 66 70
A.B. de Villiers (South Africa) 53
The long line of walking One reason why the drop is Yuvraj Singh (India) 53 Fast bowlers 60 66
wounded begs the question: more perceptible for Australia, Quinton de Kock (South Africa) 53
Are players, especially Indians, England and South Africa is Harbhajan Singh (India) 52
working more than before? that they have fewer players
Source: ESPNCricinfo.com Players who played in 2019 are highlighted in orange; players who played in 2009 are highlighted in blue.
Data shows they are not. On playing across formats inter-
the one hand, there’s generally nationally. AHMED RAZA KHAN/MINT

more cricket being played, In India’s case, there’s a core matches). 82 days. (Chart 2) playing more Test cricket and Rohit Sharma, a shorter-for- doing more. (Chart 3) and 2019. In shorter formats,
especially with new T20 lea- group playing all three for- As many as 17 of these 20 This list is dominated by long-format domestic cricket mat specialist, who tallied 62 The rise of T20s and fran- the drop is 25%. Further, the 12
gues, and the international mats, and also Test specialists, players are from 2019. The players from England. Five will experience a different matches in 2019 for 77 playing chise cricket has meant more fast bowlers in our set from
calendar is packed. On the such as Ravichandran Ashwin three from 2009 are V.V.S. players are from England, workload than a player who is days. and lucrative cricketing 2009 all played other formats
other hand, policies of rotation and Ajinkya Rahane choosing Laxman of India, Simon Katich who, if they were not on inter- more active in shorter formats Assuming a spacing of three opportunities. However, there internationally as well.
and rest have gone from other assignments like playing of Australia, and Paul Harris of national duty, turned out for and is moving around. For days between matches sug- are trade-offs. All profiles of In 2019, four out of nine
debate to diktat in cricket, and county cricket in England. South Africa. county matches. example, Test-specialist Ala- gests he spent about 240 days players are, on an average, pacers only played Tests at the
format specialists have The concept of specialist Across these 80 players, in Number of playing days is stair Cook’s 104 playing days a year moving cities, and the logging fewer playing days. international level. That’s spe-
emerged. As a result, leading players for different formats the list of top 10 by playing one thing. Number of matches are across 38 matches. Kohli’s endless triumvirate of airport, (Chart 4) cialists and time management
players are playing as much, or gained momentum only in this days, there are only two play- is another. Tests apart, the 82 playing days are across 58 hotel and field. In terms of In our set, fast bowlers, who at work.
less, than they were a decade decade. Of our set of 80 play- ers from 2019: Ajinkya Rahane norm is to have a spacing of matches. matches played, six Indians are most injury-prone, have howindialives.com is a data-
ago. ers, 20 played only Tests in a and Rory Burns of England. three days between two The player with the maxi- feature in this list, though seen their average playing base and search engine for pub-
We compared the workload year (and no ODIs or T20 Virat Kohli is ranked 16, with matches. Thus, a player who is mum number of matches is again the 2009 set seems to be days drop 10% between 2009 lic data

m MARKETS DASHBOARD How trade mis-invoicing hurts tax revenues

EQUITY FOREX Sneha Alexander
BLOOMBERG

ing 2007-17 from the United

MARKETS % change vs MARKETS % change vs
sneha.a@livemint.com Nations Comtrade Database to
Latest Last A A Last A A MUMBAI identify cases of mis-invoicing.
(index week month year week month year The UN database records all

T
Index level) average ago ago Currency Latest average ago ago ax revenues from trade global imports and exports. On
can be a major source of this database, the value of
INDIAN STOCK EMERGING MARKET government revenue, Indian exports to China
MARKETS CURRENCIES VS THE $ but its potential could be com- should, after adjusting for
promised by deliberate mis- freight and insurance charges,
SENSEX 40,914 ▼ -1.2 ▼ -1.3 ▲ +13.9 Indian Rupee (per $) 71.49 ▼ +0.4 ▼ +0.2 ▼ +0.5
invoicing. In India, trade mis- match the value of Chinese
NIFTY 50 12,036 ▼ -1.2 ▼ -1.5 ▲ +12.1 Chinese Yuan 6.91 ▼ +0.1 ▲ -0.8 ▼ +2.7 invoicing, the often deliberate imports from India. When
BANK NIFTY 30,647 ▼ -1.1 ▼ -5.0 ▲ +14.0 Brazilian Real 4.25 ▼ +1.4 ▼ +5.5 ▼ +14.9 misreporting of the value and these values do not match, Jain
volume of trade, considers it as
Russian Ruble 63.20 ▼ +2.1 ▼ +2.1 ▲ -3.8
GLOBAL STOCK had cost the gov- m SNAP FACT mis-invoicing. Trade mis-invoicing exists in different forms and requires greater
INDICES Indonesian Rupiah 13,657 ▼ +0.2 ▲ -1.7 ▲ -2.8 ernment an esti- She restricts her transparency to stem tax losses, suggests new study.
DOW JONES (US) 28,734 ▼ -1.5 ▲ +0.5 ▲ +15.7
mated $13 billion analysis to the 20
OTHER MAJOR
CURRENCY PAIRS
in tax revenue in 2016, accord- products that account for 36% invoiced to the tune of $7.2 bil- of tax evasion via mis-invoic-
S&P 500 (US) 3,273 ▼ -1.4 ▲ +1.2 ▲ +22.4 ing to Global Financial Integ- of total exports and 46.2% of lion. ing, the author recommends
NIKKEI (Japan) 22,978 ▼ -3.9 ▼ -2.9 ▲ +11.1 Euro ($/€) 1.10 ▼ -0.4 ▼ -1.6 ▼ -3.7 rity, a US-based think tank. total imports of India. Within imports, coal improving the way transac-
SHANGHAI 2,977 ▼ -1.8 ▼ -2.6 ▲ +14.8 Japanese Yen A new study by Aastha Jain, She finds that mis-invoicing imports saw over-invoicing tions are recorded and adopt-
COMPOSITE (China) (¥/$) 108.9 ▲ -0.7 ▼ +0.2 ▲ -0.3 a doctorate student of Jawa- patterns vary across products across trading partners. Gold ing global tax standards.
HANG SENG (HK) 26,449 ▼ -6.2 ▼ -6.6 ▼ -4.6 British Pound
harlal Nehru University, and countries. For instance, imports from Switzerland, a Also read: Trade Mis-invoic-
1.31 ▲ +0.1 ▼ -0.8 ▼ -0.1 presents further evidence of over-invoicing in oil-related tax-haven, experienced over- ing: Evidence from India,
($/£)
IBOVESPA (Brazil) 113,733 ▼ -4.0 ▼ -2.3 ▲ +17.7 the scale of India’s trade mis- exports to the United Arab invoicing of $34.1 billion, sug- 2007–17 (bit.ly/3191aOJ)
FTSE/JSE TOP 40 50,350 ▼ -2.6 ▼ -1.5 ▲ +5.1 THE DOLLAR INDEX invoicing problem. Emirates was a staggering gesting a push to shift profits Snap Fact features new and
(South Africa) Jain uses disaggregated $41.23 billion, while exports to outside India and minimize tax interesting reads from the
JCI (Indonesia) 6,058 ▼ -3.0 ▼ -3.8 ▼ -6.6 Dollar index 97.9 ▲ +0.3 ▲ +1.3 ▲ +2.4 trade data of India’s trade dur- the United States were under- liability. To address this issue world of research.
Red denotes depreciation in the mentioned currency, green denotes appreciation

FIXED INCOME COMMODITIES

MARKETS Absolute change in yields (bps) vs MARKETS % change vs

Last A A
Latest Last A A
m NEWS IN NUMBERS CORRECTIONS AND
(index week month year CLARIFICATIONS
Bond yield or short-term Latest week month year REUTERS
Commodity level) average ago ago
interest rate (%) average ago ago 3,220km 32 Mint welcomes comments,
What is it? The distance that millions of What is it? The suggestions or complaints
MAJOR COMMODITY Monarch butterflies travel every winter current ranking of about errors.
INDIAN FIXED
PRICES
INCOME MARKET from Canada to warmer central Mexico. Spanish tennis
Readers can alert the
Brent crude ($/barrel) 58.6 ▼ -7.2 ▼ -12.1 ▲ +4.7 Why is it important? It’s the longest that player Garbiñe
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any insect migrates. The pine and fir forests Muguruza. paper by emailing us, with your
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Overnight call rate 4.95 ▲ -17 ▲ -30 ▲ -148
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1-month Mibor 5.50 ▼ +1 ▲ -8 ▲ -152 It is our policy to promptly
MCX gold spot activist fighting to protect butterflies and the Australian
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forests went missing about two weeks ago. Open semi-finals against Simona Halep in Readers dissatisfied with the
GLOBAL SHORT-TERM He was found dead on Wednesday. straight sets, earning a place in the finals—
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An increase in yields reflects a fall in bond prices. Indian data is as of market believed to have been killed by gangs for with her joining hands with her former Mint’s journalistic Code of
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 DEALS AND STARTUPS FRIDAY, 31 JANUARY 2020
NEW DELHI 03

DEALS ROUND-UP
Theobroma sees sales Denmark packaging
B2B MARKETPLACE ZETWERK company Hartmann
RAISES ₹16 CRORE FROM INNOVEN
Zetwerk, an online business-to-business (B2B)
marketplace for custom manufacturing, raised ₹16 crore
in debt funding from venture
surge fourfold in 4 yrs acquires Mohan Fibre
debt and lending platform
InnoVen Capital. Founded in
2018 by Indian Institute of The ICICI Venture-backed patisserie plans to grow sales to ₹500 cr Ridhima Saxena
Technology-Madras alumni ridhima.s@livemint.com
Amrit Acharya and Srinath MUMBAI
Ramakkrushnan, Zetwerk Ridhima Saxena &

D
procures manufacturing Swaraj Singh Dhanjal enmark’s Brødrene
services such as fabrication, Hartmann A/S, a manu-
machining, casting and MUMBAI facturer of moulded
forging from small and fibre packaging for eggs and

P
medium companies and rivate equity firm ICICI Ven- fruits, on Thursday announced
connects them with mid-to- Amrit Acharya, CEO and ture Funds-backed patisse- Two major the acquisition of Mohan Fibre
security
large original equipment co-founder of Zetwerk rie Theobroma Foods Pvt. flaws
Products Pvt. Ltd, marking its
manufacturers and Ltd has set out on an aggres- detected in entry into India. Punjab-based
engineering, procurement and construction firms in sive expansion plan as it Microsoft Mohan Fibre sells moulded
India and south-east Asia. The buyers include Jindal, looks to multiply its sales fourfold over Azure fibre packaging for egg and Hartmann sells egg and fruit
Cloud,
BGR Energy, Embassy Group, Sterling & Wilson and the next three to four years, two senior reveals
apple producers in India, with a packaging to manufacturers,
Fidelity Contracts, who procure custom products and executives of the company said in an report focus on Himachal Pradesh, distributors and retail chains
machine parts that are not available off-the-shelf. At interview. bit.ly/37DL3LC
Punjab and Haryana. across the world.
present, the firm has 1,500 small and medium “We plan to grow our sales to ₹500 The acquisition was made for
businesses and 100 enterprises on its platform— crore, the number of stores to 150 and 119 million Danish Krones/DKK said, adding the combination of
including Bharat Wires, RN Fabricators and GM our employee strength to 3,000 over (or ₹125.41 crore), correspond- population growth and rising
Engineers. “We look forward to partner with InnoVen the next three to four years. We are also ing to an Ebitda (earnings before urbanization in the coming
Capital as we continue to scale our business, both looking to serve two million customers interest, tax, depreciation and years forms a solid foundation
domestic and international. We are focused on in that time,” said Rishi Gour, chief amortization) multiple of for continued development of
deepening our capabilities and widening our supplier executive officer, Theobroma. Kainaz Messman, founder of Theobroma Foods Pvt. Ltd. around 9, Hartmann informed the retail industry and increas-
base, as we build a world class platform for Having started as a family-run café at US stock exchanges. “The trans- ing demand for quality packag-
manufacturing services,” said Acharya, who is also the Colaba in 2004, the Mumbai-based also ship our products across 25 cities business for the next three years. We action will strengthen Hart- ing as supply chains are profes-
chief executive officer of Zetwerk. baker has grown to 50 stores with in the country from our central kitchen do not have any loss-making stores and mann’s earnings per share (EPS) sionalized.
1,000 employees across Mumbai, in Mumbai,” said Messman. are also reasonably profitable on the immediately after the acquisi- EY acted as the exclusive
OPEN SOURCE DIGITAL SOLUTIONS Delhi and Pune, and a topline of ₹120 The company got its first private corporate level, which is why we are tion, which is expected to be financial adviser to Mohan
STARTUP UNOTECH RAISES $2 MN crore, according to Kainaz Messman, equity funding of ₹100 crore from able to fund most of our growth from completed by mid-2020, condi- Fibre.
Unotech Software, an open source-led platform offering the founder of the firm. ICICI Venture Funds in 2017. The internal cash generation.” tional on a formal Hartmann said
digital solutions to enterprises, raised $2 million in its “When we started, there was no funds were allocated in two equal tran- The brand witnessed a com- authority approval The acquisition the acquisition is
Series A financing round. The organized bakery firm in the market ches, of which the first tranche was pounded annual revenue growth rate of Hartmann as a is in line with its in line with its
Mumbai-based startup and it was either the high-end shops in used to expand the brand to Delhi- of 35% over the last five years. In its buyer,” it said. strategy, which strategy, which
secured the funds from five-star hotels or local bakery outlets. NCR, besides deepening its presence endeavour to push revenue growth, “Mohan Fibre is entails significant entails significant
Manish Choksi, promoter of We tried to place ourselves some- in Mumbai and Pune. the firm is also toying with innovative a profitable com- investments in
Asian Paints, along with
investments in
where in between and, strategies such as sub- pany and will existing markets.
contribution from Vinay today, while our core EXPANSION PLAN scription models for improve our earn- existing markets, In 2020, the
Shah, co-founder of advisory products are brownies, certain product lines. ings from day one. said Hartmann company plans to
and investment banking firm, savouries and pastries, THE firm looks to THEOBROMA plans THE firm is now “We are also experi- The acquisition complete capacity
Mosaic Capital Services. we are also focusing on expand to 150 stores express stores and
and raise employee cafés, along with
experimenting with
subscription models
menting with sub- marks a strategic expansion across
Founded in 2011 by Vikash other product lines strength to 3,000 central production and alternative sales scription models and decision to enter the great Europe, with a focus on the Brit-
Jha, it provides open source such as snacks, breads, over 3-4 years units, in four cities channels for products alternative sales chan- Indian market in which we see ish and southern European
solutions and services, salads and drinks,” she nels for our bakery significant growth potential,” markets. It also looks to signifi-
Vikash Jha, CEO of focused on identity added. products and brown- said Torben Rosenkrantz-Theil, cantly expand its existing fac-
Unotech management, business The brand has a customer base of “The second tranche came recently ies. In terms of new product lines, we chief executive officer, Hart- tory in the US and open a new
process automation and 500,000, of which nearly 85% are and will be used to expand our pres- plan to focus more on chocolates and mann. factory in Brazil.
digital transformation to enterprises such as banking take-away customers, or orders online. ence in Bengaluru and Hyderabad. We hampers for corporate gifting pur- The transaction establishes a Founded in 1917, Hartmann
and financial institutions and manufacturing firms. The company operates across three will have a combination of express poses. For now, our focus will entirely solid platform for Hartmann in sells egg and fruit packaging to
“Unotech Software is realigning its IT products and store formats: Café, express and kiosks, stores and cafés, along with central be on scaling up the business, while not the attractive Indian market, manufacturers, distributors and
services to adapt to its new approach of rapid offering over 200 items. production units in four cities, with sat- compromising on quality, because it is which is characterized by a retail chains across the world.
development, rapid partnership and alliances, and rapid “Our brand has loyal customers and ellite cities being supplied from the the taste of our products that lingers favourable demographic devel- Headquartered in Gentofte,
go-to-market, under the core pillars of access, automate, our repeat customers buy from us 3-5 base locations,” said Gour. “We have with our customers,” Messman added. opment and increasing egg and Denmark, Hartmann has 2,000
and assist,” said Jha, also the chief executive and times a month. Beyond our stores, we enough capital in hand to grow the ridhima.s@livemint.com fruit production, the company employees.
technology officer of Unotech. Registered under the
Startup India initiative of the Department of Industrial
Policy and Promotion (DIPP), Unotech Software has so
far developed two enterprise technology products—
Cymmetri, which enables and manages organizational
unified digital identity, and Felicity, a business process
automation platform that complements Cymmetri as its
subsystem.
Xander Group looks
UNIPLATFORM TECH RAISES FUNDS
FROM FRONTLINE, SUCSEED
Uniplatform Tech—which runs real estate sales
to scale up funding in
platform MultiplyMyLeads.com—raised an undisclosed
amount from early-stage venture capital firms Frontline
Strategy Funds and SucSEED
Indian realty this year
Venture Partners, besides Madhurima Nandy agement, the private equity real
other investors. Founded in madhurima.n@livemint.com estate arm of Xander Group,
2015 by Rohit Manghnani BENGALURU said in a telephonic interview.
and Amit K. Jaiswal, the The ongoing NBFC crisis has

S
startup helps users put their ingapore-based The Xan- re-rated credit risk in India,
properties on multiple der Group Inc. has despite the stress, he added.
websites and aggregates all invested around $500 “We would grow our NBFC
these leads on its website and million in India’s office, retail book too and we are sitting on
mobile application. and warehousing projects in cash, but we are looking at good
“Uniplatform Tech’s ability to 2019, a top company executive risk-adjusted opportunities
provide technology-enabled said, adding that the firm plans given the state of the market.
real estate sales engine will be Rohit Manghnani, co- to scale up its investments fur- There’s urgency but we are not
critical in transforming the founder of Uniplatform ther this year. in a hurry to deploy credit.”
real estate industry Tech Xander has invested around Xander not only does 100%
roadmap,” said Manghnani. “Over the last two years, $200 million in shopping malls acquisitions for its own plat-
UniPlatform Tech has been seeing high growth in user and $125 million in commercial form, but also has operational
traction to emerge as the platform with high number of offices, besides announcing a capabilities.
real estate business-to-business (B2B) participants in the $250 million The prolonged
pilot city. With this new investment, we aim to increase industrial real Thus far, slowdown in the
the size of our team and do a pan-India roll out,” he estate venture. It Singapore-based residential sector
added. The company has over 5,000 brokers registered has also offered The Xander Group may have dried up
on its platform, who can leverage its network of 15,000 credit from Xan- has invested investor interest,
unique customers every month. der Finance, its
about $3.7 billion but large global
—COMPILED BY RIDHIMA SAXENA/MINT non-banking investors have
financial company in India’s real continued to bet
(NBFC) arm. estate sector ion commercial
So far, Xander office, retail and

Alto Pharmacy raises has invested about industrial real

funds from SoftBank
Anirban Sen & Munsif Vengattil
BENGALURU
including Greenoaks Capital
and Jackson Square Ventures
also participated in the Series D
$3.7 billion in India’s real estate estate. “We are looking at two
sector. “We plan to expand all more acquisitions in office
asset classes this year and, given space. We will also deploy the
the pipeline of acquisitions and $250 million in the warehous-
investments we have, the fund- ing platform in 12-18 months.
ing momentum will continue. Our co-working business is also
All our platforms are in growth doing well and complements
mode and we are looking for our office portfolio and we plan
opportunities. We believe good to grow that too. We have an
portfolios are built in bad income-oriented strategy

S
oftBank’s second Vision
Fund has led a new round
of funding for Silicon Val-
ley-based drug delivery firm
Alto Pharmacy that valued it at
over $1 billion, according to two
people familiar with the devel-
opment.
Reuters also obtained the
information from Delaware
State filings.
SoftBank’s Vision Fund II
contributed a majority of the
funding round that totals
around $250 million, accord-
ing to both people. At one
point, the fund considered
investing as much as $300 mil-
lion, but eventually decided to
limit its exposure, they said.
Other existing investors
round, the sources said. times,” Rohan Sikri, senior part- which is a big mitigator of risk,”
Alto, a digital pharmacy that ner, Xander Investment Man- Sikri said.
delivers prescriptions to
patients in California, Nevada
and Washington, is expected to
announce the deal next week.
The Alto Pharmacy invest-
ment comes at a challenging
time for SoftBank. A number of
its portfolio companies have
struggled in recent months,
most notably WeWork, which
scrapped its initial public offer-
ing last year and needed an over
$10 billion bailout from Soft-
Bank to stay afloat.
Alto Pharmacy did not imme-
diately respond to requests for
comment while SoftBank
declined to comment. REUTERS
feedback@livemint.com
04 FRIDAY, 31 JANUARY 2020
NEW DELHI

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE

40,913.82 -0.69 12,035.80 -0.77 9,919.20 -0.90 28,533.00 -1.76 12,165.40 -0.91 15,556.34 -1.26 14,703.96 -0.92
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

41,198.66 41,380.14 12,129.50 12,147.75 10,009.30 10,025.35 29,045.40 29,078.75 12,276.95 12,295.10 15,754.41 15,777.20 14,840.69 14,849.10
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

41,380.14 40,829.91 12,150.30 12,010.60 10,026.90 9,902.30 29,094.85 28,423.30 12,297.30 12,144.25 15,777.80 15,533.63 14,862.31 14,676.34

m SHORT TAKES
Tough times
JLR drives profit at Tata Motors,
but domestic drag is severe in Q3
Airline stocks have been laid low by the
coronavirus, particularly in the Asia-Pacific region.
Bloomberg Airlines Index
Asia Pacific World
4

-4 -6 Vatsala Kamat meagre 3% year-on-year (y-o-y). Ebitda Jigar Shah, chief executive of May-
-8
vatsala.k@livemint.com (earnings before interest, tax, deprecia-
bank Kim Eng Securities India Pvt. JLR joy
tion and amortization) margin zoomed Ltd, “JLR continues to incur a decline Tata Motors’ Ebitda margin expansion came mainly from subsidiary Jaguar Land

T
-12 -10
31 Dec 2019 30 Jan 2020
ata Motors Ltd’s December by 350 basis points to 10.8%. in several key markets and has to suc- Rover improving its profitability, even as the stand-alone entity is a drag.
quarter (Q3 FY20) consoli- JLR’s margin expansion also pow- cessfully transition from Brexit.” Wholesales (in units)
Year-on-year change
Base value taken as zero Source: Bloomberg Gold prices dated net profit of ₹1,756 ered consolidated Ebitda margin by And, the outlook in China has Q3 FY20
Revenue (in %)
SATISH KUMAR/MINT jump over Earnings before interest, tax, depreciation
₹400 per
crore beat Bloomberg’s 140 basis points to 9.9%. This is in spite
turned hazy with the coronavirus Year-on-year change (in %) and amortizaion margin (in basis points)
gram, silver consensus estimate of a of a major drag in profitability of thethreatening the economy.
Coronavirus could threaten rates surge ₹673 crore profit by a mile. It also stand-alone domestic entity, where In a media call, the management JLR 3 -800 140
₹800 marked a smart turnaround for the truck sales continue to plummet. said that while the company is moni- 129,900 -0.1
several struggling airlines bit.ly/36HaE4Y company, given the toring the situation
(Excluding
China JV)
350 -7
hefty loss recorded in NOT OUT OF THE WOODS closely, it could impact
The fast-spreading coronavirus could spell the the year-ago period on earnings ahead.
end for the weakest airlines as travel demand the back of huge COST savings under HEADWINDS to LEADERSHIP change For now, China is Stand-
129,100 -25
dries up in and out of China. The outbreak, impairment charges. Project Charge drive sales growth persist in with JLR CEO Ralph
Jaguar Land Rover’s, China (virus),Brexit, Speth retiring in Sep
once again leading the alone -33
JLR Stand-alone Consolidated
which originated in Wuhan, has claimed 170 Most of the profits consolidated entity’s domestic market for is critical for firm and way to sales growth.
lives. Total infections have soared past 7,700 in came by virtue of deft Ebitda margin in Q3 commercial vehicles parent Tata Motors Sales rose 24.3% in Q3 Source: Company
China, surpassing the country’s official num- cost savings, particu- as demand expanded
SATISH KUMAR/MINT
ber from the 2003 SARS epidemic. SARS cost larly at its subsidiary for the sixth month in a
the global economy an estimated $40 billion in Jaguar Land Rover Ltd (JLR). Accord- However, the margin expansion row. However, US sales showed a flat- are plenty. Operating leverage is low, points y-o-y in Q3, in that backdrop,
just six months and led to a 45% plunge in traf- ing to the company, it extracted cost may not appease investors as the tish trend. given the 33% y-o-y drop in revenue is not surprising.
fic for Asia-Pacific airlines in April that year. savings worth £2.9 billion through Street had pencilled in consolidated Analysts also point to the impend- on the back of declining truck sales. A steady improvement across
The coronavirus hasn’t killed anyone outside Project Charge, by containing invest- margins of 12-13% for the quarter on ing exit of JLR chief executive Ralph BS-VI transition costs, hike in vehicle global markets, including domestic
China, but infections are spreading faster than ments, operating costs and invento- the back of margins of 14% in Q2 Speth—who will retire in Septem- prices, weak economic activity and stand-alone operations, holds the key
SARS and that’s triggering a raft of flight can- ries. It hopes to rein in another £1.1 FY20. The stand-alone operations ber—as a worry. “Suitable and timely axle-load norms that lowered capac- to future profit growth. Until then,
cellations to and from one of the world’s fast- million by end-FY21. are clearly hurting overall numbers. replacement would help mitigate this ity utilization in trucks may continue the Tata Motors’ stock may continue
est-growing markets for air travel. For Asia-Pa- These cost efficiencies helped, espe- And there are still multiple head- concern,” said Shah of Maybank. to dent profitability. to be volatile, as it has been in the
cific airlines, already buffeted by US-China cially since JLR’s revenue grew by a winds to sales growth. According to In the domestic market, problems Ebitda margin decline of 800 basis recent past.
trade tensions and protests in Hong Kong, the
virus is potentially an existential threat, said
Qantas Airways Ltd CEO Alan Joyce. “It’s sur-
vival of the fittest,” he added. BLOOMBERG

Slowest ever
Facebook’s quarterly sales growth is showing that
Why Colgate Palmolive’s results Bajaj Auto changes gears on profit
the trajectory is limited by world internet users.
60
Change in revenue (year-on-year in %) came as a rude shock to investors growth but demand concerns remain
42
40
Clifford Alvares Vatsala Kamat mix and price hikes, which offset quarter’s Ebitda by 12.8% year-on-
25 clifford.a@livemint.com
Mixed bag vatsala.k@livemint.com the slowdown in sales volumes,” year to ₹1,367.2 crore.
20 Colgate Palmolive’s revenue growth was in line with estimates, said Bharat Gianani, analyst at Sha- However, Bajaj Auto is no excep-
but Ebitda margins slipped from a year ago due to higher costs.

T B
raders avoided Colgate ajaj Auto Ltd surprised the rekhan Ltd. tion to the challenges in the coming
Palmolive (India) Ltd on Revenue (in  crore) Earnings before interest, tax, depreciation Street with better-than- Another factor that drove Q3 quarters for the auto industry and
0 (Left-hand scale) and amortization margin (in %)
31 Mar 2015 31 Dec 2019 Thursday as if its shares expected profitability in the profit is the company’s diversified for two-wheelers in particular.
1400 35
Source: Bloomberg
had bad breath. The stock fell 1200
28.6 27.6 30 December quarter even as higher product mix. Three-wheelers, A report by Nomura Research on
SATISH KUMAR/MINT
6% after the company 1000 25
exports offset some of the pain in which comprise about estimated auto sales
announced the December 1,099.4 1,147.2
the domestic market. 15% of its total sales, Nomura sees flat for January said
800 20
Facebook shares slump as quarter results. Prima facie,
600 15
The highlight of the quarter was enjoyed better profit y-o-y growth in domestic two-wheeler
the results didn’t look bad. a 160 basis points jump in Ebitda margins than two- FY21. Perhaps, sales volumes may
results show slowing growth Against an expected volume 400 10
margin year-on-year to 17.9%—the wheelers. The share of this is why the decline 11% from a year
growth of about 3%, Colgate’s 200 5 highest in six quarters. Importantly, three-wheelers in total
stock rose just 2% ago. While this is nar-
Facebook Inc.’s growth is slowing, adding pres- 2.3% volume growth in Q3 was 0 0 the reported margins exceeded sales was a tad better rower than the 17%
sure to a company facing more-restrictive pri- a bit of a disappointment.
Q3 FY19 Q3 FY20
analysts’ estimates by nearly 200 from a year ago. despite the strong drop in December, the
vacy regulations and continued scrutiny from So what gives? Dig a bit
Source: Company, Mint research
basis points. Ebitda stands for earn- Further, the 11% rise beat in profits sharp price hikes for
SATISH KUMAR/MINT
global lawmakers and antitrust officials. The deeper and it turns out that ings before interest, tax, deprecia- in two-wheeler Bharat Stage-VI mod-
world’s top social media firm reported record growth on the basis of tonnage urban and rural markets wit- some festive season increase. tion and amortization. exports, which again els are headwinds for
fourth quarter revenue of $21.1 billion, boosted was merely 1% in Q3, against nessed category headwinds. Besides, much of the benefits The margin outperformance was brought in better realizations, offset sales growth. The brokerage fore-
by ads on Instagram and in video. The 25% 2% in Q2. In other words, Additionally, to tide of lower raw material prices driven by multiple factors, starting demand weakness and margin pres- casts flat year-on-year growth in
increase from a year ago was the slowest-ever growth has nearly come to a through the market condi- were offset by higher costs. with an improvement in realiza- sure in the domestic market. Of FY21. Perhaps, this is why Bajaj
quarterly sales growth, though it topped ana- standstill. Growth during the tions, Colgate incurred high So, while the Street tions. Average price realizations course, benign commodity prices Auto’s stock rose just 2% despite the
lysts’ average estimate of $20.9 billion. Shares quarter was lacklustre due to advertising and promotional expected a moderate increase rose 8% year-on-year, a relief in a and lower other expenses also strong beat in profits.
fell about 7% in extended trading on the news. the challenges in retaining spends. Advertising costs in profit before tax, it fell by challenging quarter. “This can be helped operating performance. That said, Bajaj Auto is relatively
Facebook said it had 2.89 billion monthly market share. increased by 13.8% y-o-y. In about 5.1%. explained by its healthier product All these factors pushed up the insulated from the BS-VI transition
active users of its products around the world, Colgate’s reve- fact, analysts Also, on a quarter-on-quar- woes because of its diversified prod-
but growth stagnated in the US and Canada on nue growth, Growth on basis noted that promo- ter basis, net profit dropped at uct mix. The norms are not applica-
the main social network—the primary source however, was just of tonnage was tional intensity in a pronounced 18.4%. Profit focus ble on exports and on three-wheel-
of advertising sales. Monthly active users hit about in line with Higher realizations in spite of weak sales volumes have driven
merely 1% in Q3, the category con- Despite the dull perform-
Bajaj Auto’s operating performance in Q3 FY20.
ers, both of which enjoy higher
2.5 billion on the main network as of 31 the Street’s fore- against 2% in Q2— tinued to be high ance, the Colgate Palmolive profitability. Further, only 29-30%
December, slightly topping analysts’ estimate casts, which can
due to challenges due to an increase stock has undergone a rerat-
Year-on-year change (in %) of its two-wheeler sales are in the
of 2.49 billion. BLOOMBERG be explained by a in competition. ing after a management Net revenue (in ₹ crore) Total sales volume entry-level category, where the
moderate rise in in retaining the Employee costs, change. However, now with price hike due to BS-VI norms will
7,639.7 2.7
blended price market share too, increased by slower volume growth weigh- 1,202,486 -5 be the highest. It is at an advantage
hikes of 3-4%, say about 8.4% y-o-y. ing on the stock, investors are Earnings before interest, tax, compared to Hero MotoCorp Ltd,
Resurgent iPhone analysts. Consequently, waking up to smell the coffee. depreciation and amortization Realization (in /unit) which has a 70% exposure to this
At a time of slumping smartphone demand, Revenue rose 4.3% year-on- Ebitda (earnings before inter- Some its new launches will 12.8 segment.
Apple’s iPhone 11 has driven the surge.
1,367.20
Smartphone shipments (in million)
year (y-o-y) in Q3. The man- est, tax, depreciation and have to post high-single-digit 63,532 8 But, while Bajaj Auto looks rela-
Samsung Apple Huawei
agement noted that the com- amortization) margin declined growth in the coming quarters Ebitda margin tively better poised for sales and
100 pany continued to witness 110 basis points to 27.6% y-o-y, for the company to regain (in %) 160 profit growth on these counts, the
17.9 basis points
78.2 demand moderation and soft which came as a disappoint- some of its lustre, which could Source: Company overall pressure on demand will
80
70.7 consumer sentiments. Both ment considering Q3 also sees be difficult. continue to act as a headwind.
60 52.2 68.8 NAVEEN KUMAR SAINI/MINT
56
40
39.3
20
Q1 2018 Q4 2019

Dabur commentary adds to valuation worries of consumer goods stocks

Source: Strategy Analytics, Bloomberg

SATISH KUMAR/MINT

Apple, Samsung tied for Pallavi Pengonda be pain for another couple of for the September quarter was a Revenues were marginally better
No. 1 smartphone seller pallavi.p@livemint.com quarters before we see the Report card bit lower at 4.8%. Domestic than Street estimates.
revival,” Mohit Malhotra, chief Dabur India’s Q3 FY20 volume performance appears reasonable FMCG (fast-moving consumer Ebitda (earnings before inter-

A
While 2019 started off with expectations of pall of gloom surrounds executive of Dabur India, said in given last year’s high base. goods) segment contributed 71% est, tax, depreciation and amorti-
Huawei Technologies Co. Ltd challenging stocks of consumer goods an interview with CNBC-TV18. Domestic volume growth (in %) of Dabur India’s overall business. zation) margins rose 70 basis
21
Samsung Electronics Co. Ltd for the title of firms. Shares of Godrej In a press statement, he said, Net sales increased by 5%. “We points to 20.9%, partially helped
world’s most prolific smartphone vendor, it’s Consumer Products Ltd and Col- “The near-term outlook for 13 12.4
see this as a satisfactory perform- by gross margin expansion.
the more familiar foe of Apple Inc. that’s now gate Palmolive (India) Ltd fell demand growth remains chal- 8.1 9.6 ance considering the slowdown “True, Dabur’s volume num-
7.2 7.7
threatening the South Korean titan’s throne. more than 8% and 6%, respec- lenging with most key categories 4.3 4.8 5.6 in the rural market and slow- bers missed my estimate of 7%.
Industry trackers on Thursday released esti- tively, after disappointing quar- reporting a steady decline in -4.4 down in general,” wrote analysts However, if in testing times they
mates that show the iPhone maker close to terly earnings. Dabur India Ltd value and volume growth.” Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
at Dolat Capital Market Pvt. Ltd. are managing well, once the
matching or surpassing its Korean rival in ship- seemed a bit better off, with its This perhaps explains the FY18 FY19 FY20
The company’s international recovery comes they may be able
ments during the pivotal holiday quarter. Strat- shares falling 2.6% on Thursday. decline in the Dabur India stock Source: Company, SBICAP Securities
business expanded by almost 12% to do better than peers. One posi-
egy Analytics put Apple’s iPhone shipments for However, the company added to despite the 5.6% volume growth in constant currency terms led by tive thing is that the company has
the fourth quarter at 70.7 million, slightly the gloom with its commentary in the domestic business for the SATISH KUMAR/MINT
strong growth in key markets gained share from market lead-
ahead of Samsung’s 68.8 million. Canalys about near-term prospects. December quarter. Note that the doesn’t quite sit with the fancy Coming back to the December such as the Middle East and ers in certain categories such as
gauged the US company had moved 78 million, “December has been the worst stock touched a 52-week high of valuations of these stocks. The quarter results, volume growth is North Africa; Egypt; Nigeria; oral care and hair care,” said Nitin
surpassing the Asian brand’s 71 million. And month in the last 10-15 quar- ₹505.85 on 27 January. Dabur India stock, for instance, nothing to complain about when Turkey and Nepal. Gupta, analyst at SBICAP Securi-
researchers at IHS Markit have the positions ters…. We haven’t really turned Investors are suddenly waking trades at 44 times estimated consumer confidence is low in Overall, consolidated revenue ties Ltd. However, Dabur India’s
flipped—with Samsung at 70.7 million and the corner. Things are seemingly up to the fact that the commen- earnings for FY21, according to the country. In fact, the com- at ₹2,353 crore increased by 7% valuations more than adequately
Apple at 67.7 million. BLOOMBERG getting worse. I think there will tary by consumer goods firms Bloomberg data. pany’s domestic volume growth over the same period last year. captures this optimism.

Mark to Market writers do not have positions in the companies they have discussed here
 CORPORATE FRIDAY, 31 JANUARY 2020
NEW DELHI 05

Rahul Bajaj to end

his executive stint
Tycoon to become non-executive chairman at Bajaj Auto
Amit Panday
amit.p1@livemint.com
MUMBAI

B
usiness tycoon
Rahul Bajaj, 81, will
step down as the
chairman and
whole-time director
of Bajaj Auto Ltd on 1 April, the
company said on Thursday,
ending an over 50-year stint at
the helm of India’s second-
largest motorcycle maker.
In a stock exchange filing,
the company said Bajaj will be
a non-executive chairman. He
was the director of Bajaj Auto
since 1 April 1970, and was last
re-appointed as chairman for a
full five-year term with effect
from 1 April 2015.
“Due to certain commit-
ments and other preoccupa-
tion, Rahul Bajaj has decided
not to continue as the whole-
time director of the company
after the expiry of his current
term on 31 March 2020,” the
statement said.
The Bajaj Auto board on
Thursday approved the move.
“The approval of shareholders
will be taken up by special res-
olution by way of postal ballot
for his appointment as the
non-executive chairman as
required under Regulation
17(1A) of the Securities and
Exchange Board of India Reg-
ulations, 2015,” it said.
Bajaj’s move marks the end
of an era for a company, which
became a household name in
the early 1970s with the launch
of Bajaj scooters, ushering in a
two-wheeler era with its popu-
lar ‘Hamara Bajaj’ advertising
Rahul Bajaj, 81, will step down as chairman and whole-time
director of Bajaj Auto on 1 April. BLOOMBERG
and marketing campaign. Over of Bajaj Finserv, the group’s
the years, Rahul Bajaj had financial services arm run by
stepped away from the day-to- younger son Sanjiv, to take up
day affairs of the company, the role of chairman emeritus.
handing over the reins to his His departure from the
sons Rajiv and Sanjiv. He was executive role at Bajaj Auto
elected to the Rajya Sabha as comes at a time when markets
an independent in 2006. regulator the Securities and
One of the most prominent Exchange Board of India (Sebi)
leaders of the is pushing for
Indian Inc., Bajaj Rahul Bajaj has separation of
built a reputation been a director at roles at top com-
as an outspoken the 2-wheeler firm panies.
voice when it since 1970 and was In May 2018,
came to impor- Sebi had
last re-appointed
tant issues per- amended Regula-
taining to trade, chairman tion 17 of the List-
business and pub- on 1 April 2015 ing Regulations of
lic welfare. Speak- 2015, inserting a
ing at the com- new clause,
pany’s annual general meeting which required the top 500
(AGM) last August, he had crit- listed companies by market
icized the Centre for being in capitalization to separate sen-
denial over the economic slow- ior management roles by 1
down. April 2020.
“There is no demand and no Bajaj had publicly spoken
private investment,” he report- against the Sebi decision.
edly said. “So, where will Through a gazette notification
growth come from?” on 13 January, Sebi deferred
In March 2019, he had the implementation of the
stepped down as the chairman norms to 1 April 2022.

HT

The move will end the longstanding monopoly of the Indian

Railways in running trains.

Global firms queue

up to board pvt trains
FROM PAGE 1 tion mechanism, service deliv-
ery standards in terms of fre-
start running,” Yadav said, quency of trains, amenities
adding that the idea is to be and value-added services with
able to offer trains on demand, linked incentives and penal-
similar to what happens in the ties; effective dispute resolu-
aviation sector. tion mechanisms.”
While the infrastructure, Bombardier Transportation
maintenance, operations and India Pvt. Ltd said the com-
safety will be handled by the pany is in talks with senior rail-
Indian Railways, private train way officials on the project. “It
operators can take rakes on is too early at this stage to com-
lease and provide better ment on the future course of
on-board experience and ser- action as we shall evaluate the
vices to passengers, in terms of project once tender specifica-
food, comfort, tions are final-
entertainment, As many as 150 ized,” a company
among others. modern trains will s p o k e s p e r s o n
A discussion be run by private said in an emailed
paper issued ear- operators on 100 response to que-
lier this month by ries.
routes, offering
the government’s “We, at Bom-
policy think tank world-class tech bardier, feel that
NITI Aayog and and services reinforcement on
the railway minis- public private
try has forecast an partnerships will
investment of about ₹22,500 gain momentum in the com-
crore to run the 150 private ing years in India resulting in
trains on 100 routes. Compa- faster development of railway
nies will have to bid for a net- infrastructure, including roll-
work of routes and bids will be ing stock. We share Indian
finalized on a revenue-sharing government’s vision to decon-
model. gest India by rail investments
“While private freight with higher involvement of
movement has been quite private sector in train opera-
common across countries, tions as an initial project and
only a few countries have suc- outlining a safer railway sys-
cessfully adopted private par- tem in India,” the spokesper-
ticipation in passenger train son said.
operation,” said Arindam Alstom and Macquarie
Guha, partner at Deloitte. declined to comment. KEC
“Some of the key enablers have declined to comment, saying
been selection of viable routes the company is “currently in
with sufficient revenue poten- the silent period” due to
tial; having a regulatory frame- upcoming quarterly results.
work, addressing tariff fixation Siemens, Adani Ports,
linked to cost of services, IRCTC and NIIF did not
transparent cross-subsidiza- respond to emailed queries.
06 FRIDAY, 31 JANUARY 2020
NEW DELHI CORPORATE

All stocked up, electronics makers

see no immediate hit from virus
Firms that stocked up ahead of Chinese New Year may be affected from March if coronavirus isn’t contained
Prasid Banerjee more than a month, production
prasid.b@livemint.com could be seriously hurt, suggested
NEW DELHI N.K. Goyal, president of Cellular
Manufacturers Association of

I
ndian electronics makers are India. He said that even today 80% Ramco Systems CEO Virender Aggarwal.
unlikely to face immediate of all components are imported Jack Ma to
production disruptions
because of the coronavirus
outbreak in China, the global
from China, which means there
will be a shortage even for compa-
nies making in India if the corona-
donate
$14.5 million
to help fight
coronavirus
‘2020 will be the year
manufacturing base for electronic
parts, as many of them had stocked
up in advance anticipating Chi-
virus lockdown extends over a
month.
The disruptions are also
outbreak
bit.ly/2OdNTzj of delivering digital
nese New Year holidays.
Many of them may have to
resort to production cutbacks if
expected to affect global giants
such as Apple Inc. In its first quar-
ter earnings report, Apple had set
transformation with AI’
the health crisis worsens in China, an unusually wide revenue gui-
where entire cities have been dance range of $63-67 billion in Ayushman Baruah tions will result in Ebidta
under lockdown due to the disease view of the uncertainty. ayushman.b@livemint.com improvement and better cus-
outbreak, according to industry Government warnings asking BENGALURU tomer experience.
executives. While the March quar- citizens to refrain from travelling What is the demand for

E
ter should be easy to manage, most to China have already forced com- nterprise software firm AI-based ERP solutions in
of the impact will become clear in panies to cut down on travel. Ramco Systems Ltd India?
a month or so, they said. Workers at an electronics factory in Wuhan, the originating point of the new coronavirus. REUTERS Three people aware of the matter posted a global consoli- AI-based solutions are bene-
The fact that the coronavirus said the employees of Xiaomi, dated income of ₹149.24 crore fiting a lot of industries with
outbreak happened during the and CEO of television manufac- that market-level shortages won’t impacted. He said most smart- Realme, Vivo and Oppo phones for the third quarter ended umpteen business use cases
Chinese New Year holiday period turer Vu Technologies, said that it reflect for at least four weeks right phone makers have started assem- had to halt all travel to and from December, down from ₹151.4 built especially in consumer-
helped companies as they had to might be too early to make assess- now. bling products in India, which China. As a result, employees who crore in the previous quarter facing sectors like banks and
plan in advance for this quarter. ments right now. She said that Arvinder Khurana, president of means they already have compo- had travelled to China for the Chi- ended September. This year, financial institutions or retail,
“If they are unable to solve this while summer inventories for tele- the All India Mobile Retailers nents for this quarter. nese New Year are unable to the company plans to focus on where user experience is key.
by 15 February, that will impact vision companies might be hurt, Association, said that based on his “Brands have components and return to India, while others had to driving digital transformation Another area that is witness-
the manufacturing dependent this quarter shouldn’t see cancel their plans to for large companies by leverag- ing demand for AI-based tech-
industry from March onwards,” much impact. PRODUCTION HURDLE travel to China. ing emerging technologies. nology is natural language
said S.N. Rai, co-founder and Essentially, a pro- Further, many of the In a Mint interview, chief processing (NLP), where AI
director of Lava. Rai said compa- longed disruption will see MANY companies WHILE the March THE Chinese New PROLONGED Chinese companies also executive officer Virender infused enterprise applications
nies would have stocked up in production capacities may have to resort
to production
quarter should be
easy to manage, the
Year holiday period
helped companies as
disruption will see
production going
depend on their Chinese Aggarwal talks about the key are able to communicate with
advance for the January to March going down but little cutbacks if the crisis impact will become they had to plan in down but little units for software R&D. technology focus areas, the the users in multiple languages.
segment. change in demand for worsens in China clear in a month or so advance change in demand This is the side of the demand environment and hir- While mature markets are
“The situation will be very pre- electronic products in business that takes care of ing strategy. Edited excerpts: widely adopting AI based appli-
carious if this continues for India. smartphone user interfa- What are the cations, the end-
another 15-30 days, because in the That said, Rai added that costs conversations with mobile phone stocks for an entire quarter in ces, apps and other software. key technology m INTERVIEW user adoption of
electronics industry you can’t aren’t expected to increase at the companies such as Realme, Oppo advance usually, so there While some of them also have areas Ramco AI/ML in India is
manufacture even if one compo- moment, and if they do then com- and Vivo, among others, that shouldn’t be any impact in this Indian units for R&D as well, any Systems will be focusing on relatively slow. However, it is
nent is missing,” he added. panies will have to pass them on to assemble products in India, stocks quarter,” he said. core issue can only be solved from in 2020? exciting to see India becoming
Devita Saraf, founder, chairman customers. However, he added or prices of products shouldn’t be If the disruptions extend for China. 2019 was the year of artificial a hotbed of innovation with
intelligence (AI) and machine umpteen high-tech firms get-
learning (ML) becoming main- ting massive investment and
stream in enterprise technol- global clientele.
ogy. With this, Ramco focused For Ramco, in India, espe-
on utilizing AI and ML-based cially, we are seeing a good
m SHORT TAKES Uday Kotak’s voting rights capped by RBI algorithms to help organisa- traction from large business
tions match the needs of conglomerates trying to con-
changing business landscape. solidate their core operations
Our focus was on moving and move towards optimiza-
Samsung Electronics reports 38% FROM PAGE 1 market sale or fresh issuance from Passive ERP (enterprise tion and digital transformation.
slump in Dec quarter net profit of shares, leading to a signifi- resource planning) to an Active This will be a sweet spot for
ers will not purchase any fur- cant erosion in the stock’s ERP era, where us as we are not
Seoul: The world’s biggest smartphone maker, Samsung Elec- ther “paid-up voting equity market capitalization. The systems could ‘While mature just talking tech-
tronics, reported a slump in fourth-quarter net profits on Thurs- shares” of the bank till pro- current agreement, under alert users on markets are nology adoption
day, blaming weakening demand in key products and falling chip moter shareholding reaches which Kotak has to trim his anomalies in data; widely adopting but are able to
prices. Net profit in the October-to-December period was 5.23 tril- 15%. stake by 4% over six months, is reduce data entry AI-based show process
lion won ($4.4 billion), down 38% from a year ago, it said in a state- The proposal was submitted still manageable. by defaulting val- improvements
applications, the
ment. by Kotak Mahindra Bank on 19 “With the Kotak issue now ues or even pre- and cost benefits
“Fourth-quarter profit dropped from a year earlier due to the August and later on 10 Janu- resolved, we expect RBI to populating fields adoption in India that are proving to
continued fall in memory chip prices and weakness in display pan- ary, to which the regulator resolve the non-operating based on histori- is relatively slow.’ be game changers
els,” Samsung said in a statement. The firm is the flagship subsidi- gave its in-principle approval financial holding company cal data through in getting the
ary of the giant Samsung Group, by far the largest of the family- on 29 January. The regulator structure issue in the banking Smart Fill boardroom com-
controlled conglomerates known as “chaebols” that dominate had earlier asked Kotak to system. Only two banks—Ban- phrases, and so on. mitment.
business in the world’s 12th-largest economy. AFP lower his stake to 20% by the Kotak will now sell 4% of his stake worth ₹12,500 crore over the dhan and IDFC—have been We have been leveraging What is the impact of the
end of December 2018 and to next six months. MINT issued licences under this behavioural analysis and pre- recent five-year contract
15% by March 2020. structure. These institutions diction to reduce data entry Ramco bagged from a West
Microsoft profit beats estimates Section 12(2) of the Banking the Bombay high court after promoter’s holding to 19.7%. may now get permission to and train the model to arrive at Asia-based multinational
Regulation Act restricts an RBI struck down its proposal However, the bank informed reverse-merge the holding quick predictions. 2020 will be company to implement its
as cloud demand persists individual’s voting rights to to issue perpetual non-con- the stock exchanges on 14 company with the bank and, the year of delivering digital logistics solution?
BLOOMBERG
10% of the total voting rights of vertible prefer- August that the therefore, comply with pro- transformation to businesses West Asia, especially Saudi
all shareholders in the bank. ence shares to Kotak’s promoter method did not moter holding regulations,” leveraging AI/ML, bots, user- Arabia and the UAE, are key
However, a proviso added comply with pro- voting rights will meet the Reserve said Ashutosh Mishra, head of based personalization, image markets for logistics as a lot of
through a later amendment in moter sharehold- be capped at 20% Bank of India’s research at Ashika Stock Brok- recognition, etc. road transport is prevalent in
the same section allows the ing norms. of the paid-up requirements. ing. Also, with voice and chatbots these markets. The five-year
regulator to increase the cap On 2 August, If Kotak had to The central bank has been becoming mainstream for cus- order that we have bagged from
voting share tomer/employee engagement, one of the largest independent
on voting rights, in a phased Kotak Mahindra comply with the engaged with Kotak Mahindra
manner, to 26%, which cur- Bank completed capital until earlier regulation Bank over reducing promoter user interfaces (UIs) have family-owned multinationals
rently has been fixed (through an issue of non- 31 March of paring his stake shareholding since 2008. On become passé, as we are wit- in the West Asia, to implement
a notification) at 15%. convertible per- by 15% by March 8 June 2019, RBI imposed a nessing users carry out transac- Ramco Logistics ERP, will help
With this settlement, the petual non-cu- 2020, it would penalty of ₹2 crore on the bank tions by chatting with the bot. the group effectively manage
bank has also decided to with- mulative preference shares have entailed a huge dilution for non-adherence to guide- The business implication of capacity exceeding 40,000 sq.
Seattle: Microsoft Corp.’s quarterly sales beat analysts’ pro- draw the writ petition filed in (PNCPS) to bring down the through either a secondary lines. transforming the core opera- metres of storage space.
jections by more than $1 billion, fuelled by persistent demand
from corporate customers seeking to shift computing tasks
to cloud-based systems. Revenue in the period ended 31
December rose 14% to $36.9 billion, marking the software
maker’s 10th straight quarter of double-digit sales growth.
Analysts on average had predicted $35.7 billion.
Fiscal second-quarter profit was $11.6 billion, or $1.51 a
share, Microsoft said Wednesday in a statement. That com-
Fed keeps rates steady, to tailor Treasury bill purchases later this year
pared with the $1.32 per-share estimate of analysts polled by
Bloomberg. Shares rose 4% in late trading. Chief executive Howard Schneider & He noted signs that global announce any immediate been underway since October,
officer Satya Nadella has been trying to narrow the gap in Lindsay Dunsmuir economic growth was stabi- changes to the central bank’s and what sort of permanent
cloud infrastructure with market leader Amazon.com Inc., lizing and diminishing uncer- current practice of buying $60 replacement it could use to
in both technical capabilities and the calibre of customer it WASHINGTON tainties around trade policy, billion monthly of US Treasury ensure the central bank keeps
can attract for its Azure products and services. BLOOMBERG concern about both of which bills to ensure adequate short- control of the federal funds

IndiGo pilot who flew Kamra says he
wasn’t unruly; airline begins probe
New Delhi: The IndiGo pilot in command of the plane flying
comedian Kunal Kamra and Republic TV’s Arnab Goswami has
written to the airline’s management, insisting that the heckling
incident was not “reportable in any way”. Separately, IndiGo has
launched a probe into the issue, the
carrier said on Thursday. The pilot
has conveyed to the management
his anguish over not being con-
sulted before the six-month ban on
Kamra was ordered, PTI reported
on Thursday.
The pilot said he was “disheart-
ened” to learn that Kamra was
banned on the basis of social media
posts, and that though his behav-
iour was “unsavoury”, it was not
“qualifying of a level 1 unruly pas-
senger”. GIREESH CHANDRA PRASAD
T
he Federal Reserve
held interest rates
steady on Wednesday
at its first policy meeting of
the year, with the head of the
US central bank pointing to
continued moderate eco-
nomic growth and a “strong”
job market, and giving no sign
of any imminent changes in
borrowing costs.
“We believe the current
stance of monetary policy is
appropriate to support sus-
tained economic growth, a
strong labour market and
inflation returning to our sym-
metric 2% objective,” Fed chair
Jerome Powell said at a news
conference following the cen-
tral bank’s unanimous deci-
sion to maintain the key over-
night lending rate in a range of
between 1.50% and 1.75%.
were key factors in the Fed’s
decisions to cut rates three
times last year.
But, he added, “uncertain-
ties about the outlook
remain, including those
posed by the new coronavi-
rus.” The outbreak of the new
flu-like virus in China has led
to fears of a further slowdown
in the world’s second-largest
economy.
After ticking off a list of posi-
tive developments, including
the initial trade agreement
reached recently by the US and
China and some indication a
slip in global manufacturing
has hit bottom, Powell noted
China’s economy would see at
least a short-term hit from the
coronavirus outbreak.
“We are very carefully mon-
itoring the situation,” Powell
US Federal Reserve chair Jerome Powell.
told reporters, adding that
while the implications of the
outbreak for China’s output
are clear, it is “too early” to
determine its global effect or
impact on the US economic
outlook.
The Fed’s statement, calling
out solid job gains and low
unemployment, was little
changed from the one issued
term liquidity in bank funding rate.
markets. Yields on US Treasury secu-
But Powell said the Fed rities ground lower as Powell
would likely begin scaling spoke, while benchmark U.S.
back that amount sometime in stock market indexes gave up
the April-June most of their
period, when the Federal Reserve’s gains on the day.
amount of statement, The dollar was
reserves in the calling out low largely flat
banking system unemployment, against a basket
would likely be
was little changed of major trading
BLOOMBERG deemed ade- partner curren-
quate. from the one after cies.
after its December meeting. After that, pur- its Dec meeting In a related
“The Fed’s going to remain chases would be decision, the Fed
on hold for the foreseeable made and the raised the inter-
future, as long as GDP growth Fed’s balance sheet expanded est it pays banks for excess
and inflation doesn’t move as necessary to ensure the level reserves by five basis points to
outside of the bands that we’re of bank reserves remained 1.60%, a technical adjustment
stuck in, anchored right “ample,” he said. officials say was needed to
around 2%,” said Chris Gaff- Fed policymakers have been keep the federal funds rate
ney, president of world mar- discussing how and when to around the middle of the tar-
kets at TIAA Bank. end the temporary Treasury get range. BLOOMBERG
The Fed’s statement did not bill purchases, which have feedback@livemint.com
 CORONAVIRUS OUTBREAK FRIDAY, 31 JANUARY 2020
NEW DELHI 07

Potential virus case traps First Indian case of C-virus in

Kerala, fears of a global slump
7,000 on Italy cruise ship FROM PAGE 1

with an outbreak. “A patient

has been tested positive for
Carnival ship blocked from leaving port after passenger shows coronavirus symptoms coronavirus infection and is
kept in isolation. There is no
need for panic. We have
Alberto Brambilla briefed chief minister Pinarayi
feedback@livemint.com Vijayan about the situation.
ROME We are closely monitoring the
situation. Our health network

A
cruise ship owned by
Carnival Corp. was
blocked from leaving
an Italian port with
some 7,000 people on
board, after a passenger came down
with symptoms that raised con-
cerns about a possible case of coro-
navirus.
Carnival’s Italian unit Costa Cro-
ciere SpA said that a 54-year-old
woman from Macau is currently in
isolation on board its Costa Smer-
alda cruise ship in the port of Civi-
tavecchia, near Rome.
A medical team from a Rome
hospital examined the patient, who
demonstrated fever and respiratory
symptoms, this morning, according
to the Italian Coast Guard. Further
operations on the ship “will be
decided later,” a Coast Guard
spokesman said.
The Costa Smeralda case could
mark the first case of a cruise ship
being affected by the coronavirus.
Cruise vessels, where passengers
are in close contact over extended
periods of time, are particularly
susceptible to outbreaks and
spreads of viruses. It would also be
the first confirmed case of the dis-
ease in Italy.
Carnival Corp. shares fell as
much as 11% in London and traded
down 6.7% at 12:52pm local time.
Prime Minister Giuseppe Conte
said Italy was adopting all the meas-
ures necessary to tackle risks linked
to the virus, adding that “there is no
need to spread alarmism or to fuel
any form of panic.” “As soon as the
suspected case emerged, medical
staff onboard immediately activated
the necessary health procedures,”
Costa Crociere said. BLOOMBERG
The Costa Smeralda cruise ship docked at the Italian port of Civitavecchia, near Rome.
Deadliest day takes China toll to 170
FROM PAGE 1
6,000 tourists were put under
lockdown aboard a cruise ship at
an Italian port on Thursday after
two Chinese passengers were
isolated over fears they could be
carrying the coronavirus.
Beijing has taken extraordi-
nary steps to arrest the spread of
the virus, including effectively
quarantining more than 50 mil-
lion people in Wuhan and sur-
rounding Hubei province.
The pathogen is believed to
have emerged in a market that
sold wild game, and spread by a
Lunar New Year holiday season
in which hundreds of millions of
Chinese travel domestically or
abroad.
Thousands of foreigners have
been trapped in Wuhan since it
was sealed off last week. Cities
like Beijing and Shanghai were
also eerily quiet as countless peo-
ple followed advice to stay
indoors, or at least wear masks
when venturing out.
Japan and the US on Wednes-
day became the first countries to
organise airlifts from Wuhan for
their citizens. A second US flight
is planned in the coming days.
Tokyo on Thursday reported
that three people who were
aboard the first evacuation flight
had tested positive for the virus
after landing back in Japan.
The WHO also has come
under fire after it last week
decided not to declare a global
health emergency. A meeting
on Thursday will decide
whether to reverse that deci-
sion, possibly leading to travel
or trade barriers.
“The whole world needs to
is capable of handling any
Infosys emergency,” she said.
signs multi-
million
Shailaja said the student is
contract one of four people who are in
with ABN isolation at the Thrissur Gen-
AMRO eral Hospital. “We are waiting The student of Wuhan University is one of four people who have
bit.ly/36GurSj for the test results of the other been kept in isolation at the Thrissur General Hospital. AP
three. Six more people are in
isolation wards in other hospi- exact fatality is not estimated said that isolation wards have
tals. The student will soon be and how the virus will behave been readied in hospitals
shifted to a medical college.” in the new population is also across all states and Union ter-
The Indian Council of Medi- not known. Therefore, pre- ritories (UTs) to face any con-
cal Research-National Insti- vention and strict surveillance tingency. Personal protection
tute of Virology (ICMR-NIV), is very important in India,” equipment and masks are
Pune has so far tested 49 sam- said Jugal Kishore, director available in adequate quanti-
REUTERS ples. “The only positive sample professor and head of depart- ties in all the states and UTs.
so far belongs to a student ment-community medicine at Health authorities continued
from Kerala, who was studying Vardhman Mahavir Medical to screen all passengers com-
in Wuhan, China. Now a next- College and Safdarjung Hospi- ing from China and Hong
gen sequencing test will be tal, New Delhi.
done on her sam-
Kong at over 21 airports. The
“When we talk government said it is procur-
take action,” Michael Ryan, head ple and the final With the virus about India, the ing more of the thermal
of the WHO Health Emergencies result will be having entered cities here are screening sensors that are
Programme, told reporters in declared by India, monitoring overpopulated operational in airports. Immi-
Geneva. tomorrow even- and surveillance and the poor liv- gration and other staff mem-
Major airlines that have sus- ing. Per day a total ing conditions, bers at airports have been sen-
will have to be
pended or reduced service to of 9-10 samples i n a d e q u a t e sitized and ambulances are on
China include British Airways, are received at stepped up, say amenities, poor standby. Medical and para-
German flag carrier Lufthansa, NIV for testing. health experts waste manage- medical staff are being
American Airlines, KLM, and All facilities and ment, unhygienic deployed in shifts for round-
United. capacity are avail- habits and prac- the-clock service.
Toyota, IKEA, Starbucks, able for testing of samples at tices, and the degraded sewer- According to government
Tesla, McDonald’s and tech giant NIV and it takes a day to test a age system help spread viruses officials, there are 1,200 Indi-
Foxconn were among the corpo- sample for coronavirus,” said here with tremendous rapid- ans in Hubei, but it is not clear
rate giants temporarily freezing ICMR-NIV director Priya ity,” said Arup Mitra, professor if all of them are still there.
production or closing large num- Abraham. -health policy research unit at “We have made a formal
bers of outlets in China. Volks- With the virus having the Institute of Economic request to the government of
wagen said Thursday its China entered India, monitoring and Growth. “On the whole, the China for bringing back Indian
joint-venture plants would not surveillance will have to be environment under which the nationals from the Hubei
start production again before 9 stepped up to prevent its fur- virus grows has become domi- province on two flights. We
February. ther spread, public health nant. At the same time, the hope this will be granted
US Federal Reserve chairman experts said. “As there is no possibilities of close contacts soon,” said Raveesh Kumar,
Jerome Powell said the coronavi- vaccine or drug available have become stronger due to spokesperson for the ministry
rus posed a fresh risk to the world against the virus, the cases are concentration of people.” of external affairs.
economy. managed according to their Stepping up its prepared- Elizabeth Roche contributed
symptoms. N-CoV is fatal but ness, the central government to this story.

As coronavirus fear grips

the world, the Chinese
are no longer welcome
Eric Pfanner
feedback@livemint.com
LONDON
Japanese city of Ito—on a penin-
sula south of Tokyo—said that a
server at a restaurant shouted
“Chinese! Out!” at her, according

A
irlines halt flights from to a recording shared on a Weibo
China. Schools in Europe account.
uninvite exchange stu- Health concerns aside, the reac-
dents. Restaurants in South Korea tion in South Korea and Japan to
turn away Chinese customers. the virus reflects longstanding
As a deadly virus spreads friction with China, as well as
beyond China, governments, resentment over its growing influ-
businesses and educational insti- ence in the region. That’s even as
tutions are struggling to find the an influx of visitors from China has
right response. Safeguarding pub- boosted neighbouring economies,
lic health is a priority. How to do including South Korea, where
that without stigmatizing the tourists surged by a quarter to
entire population of the country more than 5.5 million through
where the outbreak began—and November from the previous year.
where nearly a fifth of all humans Signs of insensitivity aren’t lim-
reside—is the challenge. ited to Asia. French regional news-
With the death toll reaching 170 paper Courrier Picard sparked
and the roster of cases climbing outrage with its headline “Yellow
above 7,700, worries are growing. Alert” on a front-page story about
Many global companies with the coronavirus. The paper apolo-
operations in China have asked gized to readers who took to Twit-
workers to stay home. Airlines are ter to condemn the allusion to
curtailing flights to “Yellow Peril,” a xen-
the nation. Several In South Korea, ophobic term refer-
countries have signs have begun ring to the peoples of
begun evacuating popping up on East Asia that dates to
citizens from the restaurant the 19th century.
most stricken zone In Denmark, the
windows saying, Chinese Embassy
around the city of
Wuhan. ‘no Chinese called on the coun-
Though the vast allowed’ try’s Jyllands-Posten
majority of cases newspaper to apolo-
involve people from gize for an editorial
the central Chinese metropolis or cartoon that depicts China’s flag
nearby cities, or those who have with virus symbols instead of stars
been in contact with them, people on a red background.
of Asian appearance around the Those of Chinese descent, but
world say they’ve been subject to not from China, have also been
increased wariness since the dis- met with harsh reactions. In Sri
ease began spreading. In some Lanka, a group of tourists from
cases, baser emotions have come Singapore—a Southeast Asian
to the fore. country where the majority of
In South Korea, signs have people are of Chinese descent—
begun popping up on restaurant were barred from climbing local
windows saying, “no Chinese attraction Ella Rock because of
allowed”. A Korean casino cater- their appearance, according to
ing to foreign visitors said it’s no Tucker Chang, 66, one of the tour-
longer accepting groups of tour- ists. No one in the group had a his-
ists from China. More than half a tory of recent travel to China.
million people signed a petition, Asians have taken to social media
submitted to the government, to register their outrage. Over the
calling for a ban on visitors from past two days, #jenesuispasunvi-
the nearby country of 1.4 billion. rus—“I am not a virus” in French—
A Chinese woman visiting the trended on Twitter. BLOOMBERG
08 FRIDAY, 31 JANUARY 2020
NEW DELHI

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

DON’T SMILE, YOU ARE

BEING MONITORED
The street protester now has to contend with facial recognition systems. What can it do and why should you care?

While facial recognition software can clearly add some

value to policing, given the well-documented concerns
regarding privacy and accuracy, governments and
private firms must tread cautiously. INDIAN EXPRESS

Prasid Banerjee where cameras have become cheap, anxi-
prasid.b@livemint.com ety runs deep. For example, when the
NEW DELHI National Crime Records Bureau (NCRB)
issued a tender in mid-2019, proposing to
the FICCI Smart Policing award for an app
called Punjab Artificial Intelligence Sys-
tem (PAIS). The app helped the police dig-
itize its records and analyse a crime (or the
use of FR. “This (lack of any regulation) is
mint
SHORT what the police seem to be taking advan-
STORY tage of,” said N.S. Nappinai, cyber law
expert and a Supreme Court lawyer.
that “across demographics, false positive
rates often vary by factors of 10 to beyond
100 times”.
NIST also noted that false positives “are

O
n the morning of 22 build a “national-level searchable plat- possibility of one) on the go, using FR and According to Nappinai, even targeted sys- highest” in West/East African and East
December 2019, Delhi was form for facial images”, advocacy body other emerging technologies. It was the WHAT tems that only screen against other data- Asian people and lowest in Eastern Euro-
preparing for an important Internet Freedom Foundation immedi- first such system in Indian policing. bases are impermissible. “You are then, pean individuals. It also found that false
speech by Prime Minister ately shot off a legal notice. When a criminal gets sentenced and Facial recognition (FR) systems technically, treating all the citizenry as negatives are “higher in Asian and Ameri-
Narendra Modi. By end- NCRB now insists that there is no pro- then jailed, the police feeds in particulars are increasingly being adopted criminals unless proven otherwise,” she can Indian individuals, with error rates
December, several parts of India were in posal to link the automated FR software such as personal information, crime by state police units. The attempt added. above those in white and African Ameri-
the grip of intense protests against newly system to an existing public database, details, known associates, etc. into PAIS. It is to target habitual protesters. Furthermore, the facial tech adoption can faces”. Simply put, FR is inherently
codified changes to the citizenship law, such as Aadhaar. But in the absence of an also takes photos of the criminal’s face Private firms are also considering that is fast spreading across many state racist.
and Modi was expected to directly explicit privacy or data protection law— from the front, left and right. Once the FR-based loyalty programmes. police units may be in violation of the Whereas Staqu’s and Innefu’s software
address the fears that were being which remains stuck in Parliament—trust information is in the database, the soft- Supreme Court’s tight to privacy judge- used faces from various parts of India,
expressed by the people who were out on is hard to come by. ware can then identify the criminal with ment. “The (right to privacy) judgement there is no one size fits all when it comes
the streets. Most privacy activists and lawyers more than 99% accuracy. BUT very clearly says that you need laws to to FR. While FR software can clearly add
The Delhi Police, however, was busy point to the Orwellian FR nightmare that “Until very recently, there was no digi- allow the state to do it. It is not a matter ofsome value to policing, given the well-
ensuring “habitual protesters” wouldn’t is already unfolding in China, where an tal database for criminals,” said Nilabh In an age of mass public protest whether there are laws against it or not,” documented concerns regarding privacy
get into the venue. The tool of choice: infamous social credit system has been Kishore, who was the Inspector General where cameras are cheap, said Nappinai. and accuracy, governments and private
facial recognition (FR). Everyone who proposed. It seeks to assign scores to citi- (IG) at Punjab Police at the time. “We used anxiety runs deep. The National Former IG Kishore said that the FR soft- firms must tread cautiously.
walked in through the metal detectors zens in order to determine their trustwor- to maintain files for crimes and criminals.” Crime Records Bureau (NCRB) ware they put in place cannot be used as And the debate is not restricted to
that day was screened against a FR data- thiness in the eyes of the government. The manual system dates back almost to plans a national-level searchable proof in a court of law. He called FR an India. Various cities in the US have
base. Unofficial estimates put the Delhi While aspects of the social credit sys- the British era, when crime was mostly platform for facial images. investigative tool and said it has to be com- banned or issued moratoriums on the use
Police’s growing database of “rabble- tem use existing mechanisms like bank localized. But that system of manual filing bined with existing methods of investiga- of FR software in public spaces, including
rousers and miscreants” in the hundreds. transactions, it is also closely tied into had become obsolete as criminals began tion to build the whole case. It cannot be California, San Francisco, Oakland, etc.
If the Delhi Police begins to tap into China’s mass surveillance system that to frequently cross state borders, and sev- NOW used to prove guilt in a court of law. The European Union is also considering
public databases of photos, then anything uses FR. In 2017, the Chinese govern- eral new types of crimes also emerged. a five-year ban on FR, buying itself time to
is fair game. For instance, that picture you ment demonstrated to the BBC how it The fact that crime and criminals have NCRB now insists that there is no CHECKS AND BALANCES understand how to regulate such systems.
proposal to link the Automated
posted on Facebook with the settings set could track one of its reporters in seven
to “public” is available to the police to minutes by using FR and surveillance
track you. cameras.
evolved is why NCRB first made a push to
develop a national Crime and Criminal
Tracking Network and Systems (CCTNS)
Facial Recognition Software
system to an existing public
B ut even if a few checks and balances The United Nations special rapporteur
eventually end up governing the use on freedom of opinion and expression,
of FR, the debate is only going to become David Kaye, had called for an immediate
Many aspects of the Delhi Police’s FR Whether India goes that way or not, the a decade ago. However, CCTNS is a record database such as Aadhaar. more and more contentious as the tech- moratorium “on the sale, transfer and use
technology are still not publicly known. technology is out there. Even many pri- of only the criminal’s name and the crime. But trust is hard to come by. nology improves. Pam Dixon, founder of surveillance technology until human
But Tarun Wig, vate Indian firms have It also works only on desktop computers and executive director rights-compliant regu-
co-founder of InnefuL- begun to tap into its and on closed networks inside police sta- of the World Privacy latory frameworks are
abs, the Delhi-based potential. Cafe chain tions. CCTNS doesn’t allow a police officer criminal record. Forum, said, “We may in place,” in his report to
security and research Chaayos, for example, to check a person’s criminal profile on the be at the cusp of some the UN Human Rights
firm that supplied the recently introduced a go. With PAIS, a police officer in the field MASS SURVEILLANCE ‘very problematic’ Council on the surveil-
software, confirmed
that the system can use
both video and static
face-based tool to track
“loyal customers”.
The rapid growth in
can simply whip out the mobile phone,
boot the app and take a photo of the crimi-
nal. The officer can also use other search
I ’m not sure about what Delhi Police
does,” Staqu’s Rai said, adding, “But I’ve
read in the newspapers that they’re doing
forms of identity theft.
Your face may only
unlock your phone
lance industry in June
last year.
Law enforcement
images as input to FR technology is thus parameters and the latest update even face recognition in crowds as well. If they right now, but with pub- bodies in India, though,
check a person’s cre- inevitably going to incorporates fingerprints. are, then they’re connecting it (FR) to citi- lic biometric FR sys- have largely ignored
dentials against a data- result in some hard If a person has a past criminal record, zen-centric records.” tems, it can be used for these concerns as a con-
base. We made our software questions: What is the the app flags it in a matter of seconds. FR systems connected to a common cit- authentication for The (right to privacy) certed push towards
The database of pho- balance between tar- According to Kishore, nearly 90% of crim- izen database such as Aadhaar or voter ration cards and voter implementing FR sys-
tos that the software has (for Punjab Artificial geting criminals and a inals are repeat offenders. But the critical records is an example of mass surveil- records eventually.” judgement very clearly tems got under way a
access to depends Intelligence System) in m ass-surveillance element of PAIS is that the database is lance. Such a system essentially allows According to reports, says you need laws to couple of years ago.
entirely on the user, he regime? How much restricted to convicted offenders. government or law enforcement to con- Indian Railways—one of Interestingly, the pro-
said. Wig claims he a way that it will target facial data should gov- “We specifically made our software in a duct surveillance on any and all citizens, the largest transporter allow the state to do it posed Personal Data
doesn’t know what is with or without probable cause.
powering the Delhi’s criminals, not citizens. ernments and private
firms have access to?
way that it will target criminals, not citi-
zens,” said Atul Rai, chief executive and “The Chinese are supposed to be resort-
in the world—is going to
instal FR systems to (facial tech adoption). Protection Bill, 2019,
classifies face data as
Police’s background ATUL RAI And how does an ordi- co-founder of Staqu Technologies, the ing to this sort of technology heavily “fight crime” soon. N.S. NAPPINAI sensitive and explicitly
database, but says that CO-FOUNDER OF STAQU TECHNOLOGIES nary citizen exercise company behind PAIS. He said it is a tar- where they’re looking for a fugitive and “If the system is used SUPREME COURT LAWYER states that “consent of
since the software runs choice and “opt out”? geted surveillance system that cannot be the man can be identified from a crowd,” broadly across the data principal in respect
on an artificial intelligence platform, it linked to citizen databases like Aadhaar. It said N. Ramachandran, president and country (such as on the railway network), of the processing of any sensitive personal
has the ability to improve over time. That TARGETED SURVEILLANCE works only with data the police digitizes CEO of think tank Indian Police Founda- it means that there are a lot more uses for data shall be explicitly obtained”. When
is, the more faces it sees, the better it
becomes at recognizing and matching W hile the Delhi Police’s use of FR
software has caused alarm and
them. Both Mandeep Singh Randhawa, raised questions about mass surveillance,
and creates in-house.
When Staqu’s app is used to click a per-
son’s photo, it doesn’t enter any database
tion. “I don’t think we have reached there.
But the frontiers of technology do lie in
these applications, and like all good appli-
that data (for hackers and cybercrimi- the government scans faces, doesn’t it
nals),” said Dixon.
Fraud and breaches aside, FR software
become a data principal?
The answer to that question and the
public relations officer (PRO) at Delhi the use of FR in India for purposes of unless it matches an existing criminal pro- cations, they can be misused.” has been found to be affected by demo- legal complexities it throws up may deter-
Police, and Anil Mittal, deputy PRO, policing dates back to at least a couple of file. Kishore said that the photos a police Indian citizens currently have little or graphics as well. An FR vendor test by the mine whether FR systems show up more
declined to offer comment. years now. officer takes are temporary on the app and no defence against such misuse because National Institute of Standards and Tech- frequently at political rallies and public
But in an age of mass public protest Three years ago, the Punjab Police won enter a database only if the person has a there is almost no regulation to guide the nology (NIST) in December 2019 found protests.
 SCIENCE FRIDAY, 31 JANUARY 2020
NEW DELHI 09

The final set of eight little answers ‘fore I go

Here’s the second set of solutions to my 16 end-of-2019 puzzles, some mathematical and some on logic. Readers had been given a month to solve these
3. Using only these three statements, you your neighbourhood MCubed Library. It bility of heads-tails (heads followed by tails)
can figure out the answer to this question. was due on 2 January 1990. The fine print is 0.4 x 0.6 = 0.24. The probability of tails-
A MATTER A) Clearly, statement #1 is true. Thus if
#2 is true, it claims itself and #3 as false.
says the fine is ₹1, with interest charged at
1% every week that it is not paid.
heads is 0.6 x 0.4 = 0.24 again. That is, each
of these combinations is equally likely to
OF NUMBERS That is, if #2 is true, it is false: a contradic- Good citizen that you are, you start walk- occur when we flip the coin twice, and that
tion, you’ll agree. Thus #2 is false, and since ing to MCubed to pay the fine. Your buddy makes for a fair “toss”.
DILIP D’SOUZA all three statements cannot be false (#1 is Rambehari, who has been busy with a cal- (Question: would getting the captains to
true), only one of the statements is false: #2 culator, suddenly shouts: “You crazy? call either H-H or T-T be fair?)
Respond to this column at itself. Therefore #3 is true. Don’t pay the fine! Just keep the book and 16) Below are two number sequences.
feedback@livemint.com 11) How many letters does the correct forget the library!” Tell me what number comes next in the
answer to this puzzle contain? Why’s he shouting and what would you first sequence, and the next few numbers in

A
nd now for the second set of A) Could it be one? But “one” has three do? the second.
eight answers to the puzzles in letters. So does “two”. “Seven” has five, etc. A) He’s shouting because he did some a) 2, 12, 1112, 3112, 132112, 1113122112,
my column here on 27 We want a number that has its own count of quick calculations. In one week, your fine 311311222112, 13211321322112,
December 2019 letters. The only such is 4. becomes ₹1.01. In two, ₹1.02. In 25 weeks, 1113122113121113222112,
(bit.ly/2RZLrxw). 12) Which planet is closest to our Earth? ₹1.28. In general, after “n” weeks, the fine 31131122211311123113322112 …
9) Here’s one more of Tom and Ray’s Is that a reasonable question? If not, what’s will be 1.01^n. Now the book was due 30 A) Each new number, when read out,
“tough” puzzles: You have in your posses- a more reasonable question to ask about years, or 1,560 weeks, ago. The fine, then, describes the previous one. Try it! You’ll
sion two pieces of string. Let’s say that each planetary distances, and what’s the will be 1.01^1,560 = ₹55,12,430.17 Over half see that the second is “one two”, which
is a couple of feet long, but it doesn’t really answer? of your inheritance from your beloved describes the first. The third is “one one
matter. And they can both be different A) A truly fascinating inquiry here. The mausi. No wonder Rambehari urges you to one two”, which describes the second. The
lengths, it doesn’t matter either. And commonest answer is Venus; no planet keep the book. Best to buy the library a new fourth is “three one one two” … and so on.
they’re burnable, like the fuses used to light makes a closer approach to us. But the real- copy of Cry the Beloved Country, about Thus the next number in the sequence
dynamite. You could light either end of ity is that given the planets’ respective ₹400 right now on Amazon. must describe the last one above. Thus
either string, and it would burn. In fact, if orbits, Venus spends much of its time fur- 14) This one might or might not be rele- 132113213221133112132123222112.
you lit one end of a string, it would burn in ther from Earth than … Mercury! So the vant to the world, circa 2019. Well, circa (Question: will a 4 ever appear in some
exactly an hour. more reasonable question might actually anytime: 100 politicians arrive in Bombay number in this sequence?)
But here’s the wrinkle: the strings do not be: “Which planet is closest to Earth most to attend a workshop on parliamentary b) 1, 2, 2, 3, 3, 4, 4, 4, 5, 5, 5, 6, 6, 6, 6, 7, 7,
burn at a constant rate. For procedures. You know that 7, 7, 8, 8, 8, 8, 9, 9, 9, 9 …
example, the string might each of them is either A) For a given entry in the sequence,
burn for two minutes and Which planet is closest to our Earth? Is crooked or honest. The per- note its serial number in the sequence. The
then go crazy and burn like that a reasonable question? If not, son running the workshop entry is the number of times that serial
mad and then slow down. what’s a more reasonable question to tells you these two things number appears in the sequence. (It took
You don’t know what rate about his attendees: me a minute to think about that and get it
the string’s burning at, at ask about planetary distances? • At least one of the politi- clear in my mind; you might want to do the
any specific time. All you cians is honest. same). Thus the first entry is 1, meaning
know is that in an hour’s time, the whole of the time?” (Or “which planet is, on aver- • In any given pair of them, at least one is there’s only one 1. The second is 2, meaning
string is burned. It’s not linear. And not pre- age, closest to Earth?”), and the answer crooked. there are two 2s—the second and third
dictable. there is Mercury. Can you tell the world how many of the entries. The third is 2 again, for two 3s—the
So, the question very simply is, with a In fact, here’s the amazing thing about 100 politicians are honest and how many fourth and fifth entries. The fourth is 3, for
lighter and these two strings, how would our solar system: if you ask the question of crooked? three 4s. And so on.
you measure exactly 15 minutes of time? any other planet in our solar system, the A) We know there’s at least one honest There are only three 4s, but in the
A) Light one string from both ends. At answer is still Mercury: in the sense of this politician. Are there two? Well, no: because sequence as I’ve given it to you, there are
the same time, light the second string from more reasonable question, it is the closest then if you picked that pair of politicians, four 6s, four 7s, four 8s and four 9s. Those
one end. The first string will burn out in planet to every other planet. See this terri- both would be honest and we know that at three 4s refer only to the 6s, 7s and 8s, and
exactly half an hour. As soon as it does, light fic video to understand: bit.ly/2u1LOQ8 least one of every pair of politicians is thus there must be five 9s, five 10s, and so
JAYACHANDRAN/MINT
the other end of the second string. In 13) Your beloved mausi just died and left crooked. Thus there’s one honest politician on. So the sequence must contain another
exactly 15 minutes, the second string will her entire savings to her favourite niece: and 99 crooked ones. underway … you have no time to get occurrence of either heads followed by tails 9, then five 10s, and so on. So next few
burn out. There’s your 15 minute measure. you. That’s ₹1 crore coming to you, and 15) You have been sent out to conduct another coin. How can you still carry out a or vice versa. The captain who correctly entries are 9, 10, 10, 10, 10, 10 …
10) Is statement #3 below true or false? while you mourn, you’re also grateful to the coin toss for a Test match between fair (50/50) coin toss and get the match called that first occurrence wins. I know you enjoyed these as much as I
1. There are three numbered statements her. Papua New Guinea and Ecuador. Unfortu- going? Why does this work? Say the coin lands did! Right?
here. Going through her belongings, you nately, you’ve been given a dud coin, one A) Get the captains to call either “heads- heads just 40% of the time. So the probabil- Once a computer scientist, Dilip D’Souza
2. Two of the numbered statements are come across a copy of Alan Paton’s Cry the that doesn’t land heads half the time. The tails” and “tails-heads”. Toss the coin twice, ity of landing heads is 0.4, and thus of tails now lives in Mumbai and writes for his din-
false. Beloved Country that she forgot to return to crowd is expectant, the TV coverage is repeating tosses pairwise until the first 0.6. Clearly an unfair coin. But the proba- ners. His Twitter handle is @DeathEndsFun
10 FRIDAY, 31 JANUARY 2020
NEW DELHI

TECH @YOU
TECHCETERA

GOOGLE’S ANSWER FACEBOOK GETS A NEW FOR AUDIOPHILES APPLE HOMEPOD IS

502.2 million
TO TIKTOK: TANGI PRIVACY TOOL WITH DEEP POCKETS COMING TO INDIA
Area 120, Google’s lab The social network’s Music buffs in India can Apple’s smart speaker
for experiential projects, Off-Facebook activity buy Sennheiser’s Ambeo HomePod will soon be
has launched Tangi, a feature that allows soundbar, which supports The number of smartphone users in India as of available at ₹19,900 in
video-sharing app that has users to see which apps December 2019. This means more than 77%
a 60-second time limit for and websites are linked Dolby Atmos, has 13 speaker white and space grey. It
drivers and offers 3D sound. of Indians are accessing wireless broadband has Siri that now supports
how-to videos on cooking, to their account is now through smartphones, as per a techARC report
makeup and crafting available worldwide It costs ₹1,99,990 Indian English accent.

ISTOCKPHOTO

Samsung Galaxy S10 Lite: Rich

in features and worth buying
Prasid Banerjee PROS
prasid.b@livemint.com uDisplay is bright and colourful
NEW DELHI uPlenty of storage
uDependable battery life

T
he Samsung Galaxy S10 Lite is the first
in what we expect to be a line of new CONS
devices in the premium segment this uNot the fastest phone for the price
year. With growth rates increasing in this uDoesn’t have curved screen
segment, manufacturers, such as Samsung, uA simpler UI might be better
are pushing more and more phones here.
The S10 Lite tries to take advantage of the and won’t run out of storage easily.
premium Galaxy S brand name. However, But the Galaxy S10 Lite is still not the fast-
there’s a stark difference in design. It doesn’t est phone you can buy in its price range.
have the S series’ trademark curved screen, There are noticeable lags even in menu ani-
settling for a regular Full HD (high defini- mations on games. While they’re noticeable,
tion) panel instead. they aren’t deal-breaking.
Curves aside, the active matrix light emit- The phone has three cameras on the back.
ting diode (AMOLED) panel here is no In general, the camera is what we’ve come to
slouch in terms of colour, touch latency expect from Samsung. It loses sharpness
and brightness. It’s oversaturated, in fluorescent (like indoors) and very
which many do enjoy, and unless low lights, while it does really well in
you’re used to colour
Price: daylight or well lit
₹39,999
neutral displays, cafes. If social
which almost none media sharing is

AI, ML chip in to fight climate

of us are, it does what you do, this
impress. doesn’t disappoint.
The really impor- The macro cam-
tant specs though era is a nifty addi-
are the Snapdragon tion, but not per-

change, protect environment 855 chipset, 8GB

RAM and 128GB
storage. Together,
they make for a
phone that is fast for
fect. In sum, the
Galaxy S10 Lite has
the right specs, it’s
good to look at and
doesn’t ask for too
the most part, capa- many compro-
ble of retaining that mises. The OnePlus
Did you know you could contribute idle computing power to help environment research projects? speed over an 7 is definitely faster
extended period and smoother.
Abhijit Ahaskar traps located across Antarctica. Gramener used an the most of it with an acoustic alert system that listens
abhijit.a@livemint.com image dataset of penguin colonies in Antarctica that for indicators of deforestation and poaching such as
NEW DELHI included images from more than 40 locations.
To clean up the penguin image dataset, they used
sound of chainsaws, vehicles or guns that can be used
to immediately alert authorities. Sony WI-C200: Balanced
G
lobal warming-induced climate change multi-column convolutional neural networks (CNN). “Global warming has changed the way climate mod-
has started taking its toll on animals, They then trained the deep learning model on Micro-
plants and even humans. Until 2019, soft’s DSVM (data science virtual machine) platform
around 14,000-25,000 pairs of breeding and used Intel’s Xeon scalable processors to repurpose
elling is done. Using AI/ML is very important as it will
make things happen faster. All this will require lots of
computing power and, going forward, quantum com-
audio and affordable pricing
emperor penguins would gather every and benchmark it. puters might play an important role,” said Jaspreet
he WI-C200 headphones from Sony PROS

T
year at Halley Bay colony in Antarctica, making it the The model uses a density-based counting approach, Bindra, digital transformation expert and author of
second-largest penguin colony in the world after Coul- which not only estimates the numbers faster but can also The Tech Whisperer. IBM’s new AI-driven global high are a peculiar set of headphones. While uMagnetic earbuds are easy to handle
man Island, also in Antarctica. Today, the colony at give more accurate results when compared with the resolution atmosphere forecast (GRAF) can detect the cheaper price segments in India are uGood balance between different
Halley Bay has almost disappeared, as per a 2019 study manual counting of penguins from the images. Gra- high-impact events such as tropical cyclones and thun- usually marked by emphasis on bass, which audio frequencies
by the British Antarctic Sur- mener has also used AI and derstorms. Predictions powered by GRAF can also be often compromises high- and mid-ranged
vey. The deteriorating air data analytics to estimate pop- accessed on IBM’s The Weather Channel app. audio, the C200 takes the opposite route. It’s CONS
quality in large cities like Environment meets tech ulation of 12 salmon species. Solving many of the scientific and mathematical focused on the high notes, putting mids sec- uBass fans may be disappointed
Delhi, particularly during Another AI-driven initia- problems related to the environment require massive ond and then bass. uNoise isolation isn’t the best
winter, has serious health Google’s flood forecasting system tive empowering environ- computing power. UC Berkeley’s BOINC (Berkley It’s a brave route for a market like India,
implications. To be sure, as uses ML to give a more accurate mentalists with better Open Infrastructure for Network Computing) is help- where listeners usually care for bass more EDM will perhaps find the WI-C200 some-
per the Centre for Science picture of areas that will be flooded insights is the Elephant Lis- ing researchers, including climatologists, by crowd- than anything else. Most headphones are what disappointing. Indian music like Rowdy
and Environment, 30% of so that people can be alerted in tening Project, which uses sourcing the processing resources of multiple PCs and judged primarily on how well they Baby by Dhanush will lack the impact the
premature deaths in India time. A pilot was run in Patna, Bihar, acoustic sensors to listen to smartphones from around the world. handle the bass notes. beats should have.
are caused by air pollution. in 2018 with 90% accuracy. forest elephants in Africa. Users who want to contribute can install the BOINC You would be forgiven for However, if your music
The recent bushfire in Aus- Their population has dwin- software on their devices. When their system is idle, the not liking the audio experi- tastes are more eclectic, these
tralia killed an estimated one IBM’s Green Horizon project in dled due to poaching. The available CPU and GPU resources will be automatically ence on these headphones, are a great pair of headphones
billion animals and has Beijing, China, uses AI and IoT brainchild of California- channelled to power computing projects. The project because of this very reason. to buy.
endangered more than 100 to forecast pollution levels by based Conservation Metrics, has more than 310,000 participants, with the comput- However, the C200 delivers On the whole, the WI-C200
different species. identifying the sources contributing the project uses ML to more ing power of 800,000 devices at their disposal. just enough bass to keep things may not suit every listener, but
While cutting down global to pollution—such as traffic, accurately identify the low- Among Indian companies, Gurugram-based Blue energetic where required. they have something to offer for
emissions and switching to weather and wind pattern—so that frequency rumbling sounds Sky Analytics is using AI-powered solutions to ana- Take Lazarus by Porcu- everyone. Which is something
renewable sources of energy they can lower the pollutants. made by elephants to com- lyse high volumes of satellite data, ground-level pine Tree for example. The we can say for very few afforda-
will help in the long run, municate with each other measurements from sensors and ancillary public song sounds excellent in ble headphones today.
emerging technologies such amid sounds made by other datasets to deliver real-time high resolution data on the soothing opening Are there better headphones
as artificial intelligence (AI) and its various branches, animals. the environment. One of their solutions, Zorro, is moments, where it’s just in the market? Sure, but in this
along with internet of things (IoT), can help in the con- By using Microsoft’s Azure cloud computing servi- helping with environment regulation by monitoring vocals, guitars and piano. The price range, the Sony WI-C200
servation of plants, animals and birds by providing ces, researchers at Conservation Metrics have been industrial emissions with satellite data, another drums kick in at the one min- is certainly among the best. If
more accurate climate predictions. They are also help- able to process months of sound data in a few weeks. called BreeZo provides information on air quality ute mark, but it’s not meant to you want more pronounced
ing authorities detect acts of deforestation and poach- Both projects were supported by Microsoft’s AI for while Zuri allows compliance authorities to monitor be very loud, thumping bass, bass, Sony’s own WI-C310 costs
ing while some are creating awareness among masses. Earth programme. farm fires. which the WI-C200 handles Price: ₹500 more and have what you
Take the machine learning (ML)-based detector Using ML to identify unique sound patterns and AI and IoT are changing the world’s approach to with ease. ₹2,490 need. The Realme Buds Air are
model by Princeton, US-based data science company then using sensors to capture that data can also be very problem solving. Tasks that took months earlier take In essence, those who listen also an option, but only if you
Gramener, which can estimate the number of pen- effective against illegal deforestation and poaching. a few minutes now. Environmentalists need to to bass-driven music like really want true wireless buds.
guins from the images captured by multiple camera San Francisco-based Rainforest Connection is making embrace them on a larger scale to boost their efforts.

CYBERSECURITY A CRITICAL CHALLENGE FOR INDIA’S DIGITAL PAYMENTS ECOSYSTEM ISTOCKPHOTO

com, and information technology. This change will also come with sensor embedded in the card while making payments at a point of
its fair share of challenges, both in the short and the long term. sale. Safety is ensured as the consumer’s fingerprint is stored only
EXPERT Cybersecurity is one of the most critical challenges faced by
stakeholders of the digital payment ecosystem. With more and
in the secure chip within the card and the same chip is used to
match the scanned fingerprint with the stored one. The biggest
VIEW more users preferring digital payments, the chances of getting advantage is that the bank or merchant cannot access the con-
exposed to cybersecurity risks such as online fraud, information sumer’s biometric data, which also counters potential privacy con-
S A N J AY G U P TA theft, and malware or virus attacks are also increasing. cerns. For enrolment of fingerprints, banks can send a device called
Digital payment frauds account for about half of all bank frauds an enrolment sleeve along with the card. This can power the card
Respond to this column at in India. The increasing number of frauds was also recently high- and guide consumers via enrolment.
feedback@livemint.com lighted in the Rajya Sabha, where it was said that 1,367 frauds in FY Frauds in digital
2016-17, 2,127 in FY 2017-18, and 1,477 frauds in FY 2018-19 were payments FUTURE LOOKS PROMISING

D
emonetization resulted in the withdrawal of 86% of India’s
total currency value in circulation, leading to an enormous
increase in the adoption and dependence on digital pay-
ments. Three years on, digital payments in India are witnessing
consistent growth at a compound annual growth rate (CAGR) of
12.7%, while the mobile wallet market is expected to continuously
grow at a CAGR of 52.2% by volume between 2019-23, according
to a recent report by KPMG. This digital explosion can be seen in
the accelerating rise in the download and use of electronic wallets
as well as an unprecedented increase in digital transactions/pay-
ments.
While becoming a cashless economy is the end-goal, it is impor-
tant to understand that the sudden push to ‘go digital’ may test the
existing security and fraud control frameworks extensively. India’s
status as a digital economy is at a very nascent stage and will evolve
and innovate drastically in the coming years, especially with the
increased convergence of sectors such as financial services, tele-
reported with regard to ATM/debit card, credit card and internet
banking transactions of more than ₹1 lakh.
In view of this, the Reserve Bank of India (RBI) has also issued
some guidelines as security and risk mitigation measures for digital
payments. The central bank has taken steps for securing card
transactions, internet banking, electronic payments, ATM transac-
tions, and prepaid payment instruments (PPIs). It has also issued
guidelines that limit the liability of customers on unauthorised
electronic banking transactions.
SECURING THE FINTECH REVOLUTION
We need to understand that fraudsters today are building
advanced technologies that can target the digital payments ecosys-
tem. The changing nature of cybersecurity attacks such as web
application attack, ransomware, reconnaissance, and DDoS attack
clearly establish cyber-risk as a new reality.
A robust regulatory framework, an effective customer redressal
framework, foolproof security measures to enable confidence and
trust, incentives for larger participation and benefits similar to cash
transactions are some measures that can help ensure long-term
success for digital payments.
India is witnessing a consistent growth in usage of debit/credit
cards over the last few years, but along with it also comes the
increasing number of frauds involving these cards. Here, we can
leverage technology for making these popular methods of cashless
payments secure. Biometric authentication-enabled cards can
provide a greater layer of security by enabling replacement of tra-
ditional PIN. Through biometric authentication, consumers can
authenticate transactions by placing their finger on a fingerprint
Despite all the security concerns,
account for instruments such as debit/credit cards
about half of all are becoming extremely popular in
bank fraud India with millennials emerging as the
cases in India primary growth drivers. Also, RBI has
forecast a 50% increase in mobile-based
payment transactions. Payment sys-
tems such as UPI/IMPS are likely to register average annualised
growth of over 100%, according to RBI’s 2021 vision document.
Though cybersecurity and digital payment fraud cases pose a great
risk, the digital payment ecosystem can surely be strengthened,
with organisations, users, and the government sharing the respon-
sibility of securing the digital payments. NXP, being the market
leader in credit cards, makes it a top priority to secure the digital
payment infrastructure and maintain the privacy of its customers.
Sanjay Gupta is vice-president and India country manager at NXP
Semiconductors.
12 FRIDAY, 31 JANUARY 2020
NEW DELHI BUDGET 2020

Pulls and pressures the FM faces

IMPETUS Finance minister Nirmala Sitharaman will present her second Union budget on Saturday after having held extensive consultation with industry on what
needs to be done to reverse the economic slowdown. Ahead of the budget, EY has put together a sectoral view which identifies the pain points as well as
the major trends in the economy that capture the context in which the Union budget for FY21 will be presented.

Rural demand stays muted since FY17...

Low growth in rural wages and two-wheeler sales are hurting growth
Greater funding for farmer income support and rural jobs can provide a short-term boost to the rural economy
Agriculture terms of trade show relative growth in food prices vs prices of non-food goods

Rural wage growth (in %) Growth in two-wheeler Agriculture terms of trade (in %)
Average year-on-year growth automobile sales
(in %) 3.5
Agriculture wages 15 3.1
8 3.0
Non-agriculture wages 10
8 2.5
6 5
2.0
0
1.5
4 1.2
-5 1.0
-10 0.5
2
-15 0.0
-16
0 -20 -0.5
2015-16 2019-20* 2014-15 2019-20* Q1 2014-15 Q3 2019-20
* growth rate in Apr to Dec

…while farm output growth is modest

Agriculture sector growth has been modest in the past two years
Raising the share of high-value non-cereals in farm output needed
The share of rice and wheat cropped area has been stagnant for a decade India’s share of non-oil Services biggest gainers
$
Agriculture gross value added (GVA) and exports growth rate Area under major crops (in %)
exports stagnate in FDI inflow
49
Agriculture GVA growth Agriculture exports growth 2007-08 2017-18
47 India’s share in non-oil merchandise exports stays Retail sector emerges as a winner in attracting foreign
20 stagnant this decade but China, Vietnam and Bangladesh direct investment (FDI)
(in %) 38 38 raised their share Services in computer, communication and business too
15
Measures needed to boost India’s competitiveness in the attract FDI
10 manufacturing sector Real estate, construction and hospitality not among
5 A revitalized coastal economic zones or special economic preferred sectors for FDI
0 zones policy will help exports
15 Growth in FDI Inflows in 2014-19 vs 2009-14 (in %)
-5 Non-oil exports share in total global non-oil exports
13
-10 Bangladesh India Vietnam China (RHS) Retail
-15 (in %) Computer services
1.8 16
-20 Communication services
2012-13 2019-20* Rice and wheat Nutri cereals Others 1.6 14 Business services
* Advance estimates Source: Ministry of statistics and programme implementation, ministry of agriculture and 1.4 Financial services
farmers welfare annual report, ministry of commerce and industry 12
1.2 Others*
10 Other services
1.0
8 Manufacturing
Housing inventory keeps rising... 0.8
6
Power
Construction
0.6
Number of unsold houses has been rising for nearly a decade 4 Hospitality
0.4
Tax on real estate from state stamp duty rises faster than sales growth in 2017 and 2018 Real estate
Policy steps to boost real estate sector demand could help clear unsold inventory 0.2 2 -100 0 100 200 300 400 500
*Others includes mining, transport,
0 0 Source: Reserve Bank of India
trading, education, R&D
1990 2018
Unsold inventory and growth in housing prices Growth in housing sales value and stamp duty
Stock of unsold
collections
Annual growth in average
inventory (in '000) (RHS) Housing sales value (top 8 cities)
housing prices (in %) (LHS)
25 1,000 Stamp duty collections (all states)
(in %)
25 It gets harder for investments to spur growth
18 Incremental capital to output ratio Industry capacity utlilization (in %)
20 800 16 17 Incremental capital to output ratio 9 78
12 11 worsened to 2012-13 levels, showing 8 8
15 600 10 9 8 growth slowdown is a larger issue 76
7
5 than slowdown in savings, investment 6.2 74
4 2 6 4.7
10 400 2 rates
-4 5 (2018-19PE) 72
2012 2013 2014 2015 2017 2018 If key bottlenecks in capital 4
200 70
5 investments are resolved, this could
*Up to September 2019
2016 3
quickly raise economic growth levels 68
2
0 0 Top-8 cities include Mumbai Metropolitan Region, National Capital Region, at current investment rates 66
2012 2019* Bengaluru, Pune, Hyderabad, Ahmedabad, Chennai and Kolkata 1
Capacity utilization rates are 64
0
multi-year low. Hence revival in 2008-09 2019-20AE Q2 2013-14 Q2 2019-20
capital investments are unlikely to Source: National Accounts Statistics, Database of Source: Quarterly order books, inventories and capacity

...and discoms’ health worsens emerge in short-term Indian Economy, RBI utilization survey, Reserve Bank of India

Unpaid dues by electricity distribution companies for power purchases are at an all-time high
More reforms needed in power distribution, which is a bottleneck in the sector’s growth
Clean energy capacity addition slows down from its peak in 2016-17 Demand slowdown takes its toll on the economy
There is a notable demand Private consumption growth and consumption deflator inflation (in %)
Discom dues Renewable energy capacity and growth
Outstanding amount at month-end ( crore)
slowdown in the economy as seen Private consumption growth Private consumption deflator inflation
RES generation RES generation capacity 9
(in GW) (RHS) by the drop in private consumption
90,000 capacity growth (in %) 8
90
growth
80,000 0.5
0.45 80
Resolving the financial sector 7
70,000
0.4 70
uncertainty will help in monetary 6
60,000 transmission
0.35 60
50,000 0.3 Lower interest rates and growth in 5
50
40,000 0.25
40 consumer durable loans and auto 4
30,000 0.2 loans needed
30 3
0.15
20,000 20
0.1 2
10,000 0.05 10
1
0 0 0 2012-13 2019-20*
Nov 2018 Nov 2019 2011-12 2019-20 *Advance estimates
Source: https://praapti.in/
Source: Ministry of statistics and programme implementation, Reserve Bank of India
Powered by EY

PARAS JAIN/MINT

THE GOVERNMENT’S MANY STALEMATES ARE A DRAG ON UNION BUDGET

crunch with outlandish forecasts of tax collection that have
fallen badly short.
EXPERT Doubling down on those rosy predictions with an off-budget
corporate tax cut cheered the stock markets but worsened the
VIEW government’s revenue shortfall and did nothing for an econo-
my-wide insufficiency of demand. Nominal gross domestic
ANDY MUKHERJEE product growth of 7.5% is the slowest in more than four decades.
Virtually every industry, from banking and auto to real estate,
Respond to this column at
feedback@livemint.com
power and telecom, is in disarray. The fiscal space available to
fight the slowdown is limited.
hen Prime Minister Narendra Modi began his second
from Modi’s party snubbed the Washington Post owner over the
newspaper’s criticism of the country’s policies.
India is doing some things right. Modi has restarted a privati-
zation programme that’s been dead for nearly two decades: A
white elephant like Air India Ltd may finally cease being a bur-
den on the taxpayer. Legislation to make layoffs easier so that
private firms will undertake labour-intensive work is also wel-
come, though the likes of Bangladesh
The 1 February and Vietnam have already stolen a
budget will march in textiles and electronics.
To reclaim the economic goals
present another obscured by a fog of political nation-
BUDGET OR FUDGE IT?
But fixing the GST isn’t something that can be done in the bud-
get. It will require a buy-in from states that are being starved of
resources. With many of India’s state governments virulently
opposed to what they see as home minister Amit Shah’s agenda
of turning India into a Hindu nation, it’s unclear if a coordinated
effort to stabilize the rudderless economy is politically feasible.
Equity markets may be chuffed if finance minister Sithara-
man does away with a tax on long-term capital gains, though I
would be more keen to see a bold recapitalization of the broken
shadow banking system. An Indian version of the US Troubled
Asset Relief Program, which floated the American economy

W
term in May, I’d hoped for a reset of his government’s
fraught relationship with domestic business and
global capital. Eight months later, the stalemates have only mul-
tiplied, while the world’s view of the country under his watch
has dimmed. Growth has collapsed.
The annual budget on 1 February will present another oppor-
tunity for course correction. But if the previous budget in July—
it is presented late in election years—is any guide, truth and
honesty may rank way below expediency and bravado.
There’s no shortage of ideas to fix the economy, provided
New Delhi accepts that it’s facing a crisis. The last budget would
have been the right time to press the panic button. However, the
newly re-elected government tried to whitewash its funding
WHERE’S ALL THE MONEY GONE?
Broader society, grappling with a multi-year drought in invest-
ment and jobs, has been swept up in the frenzy of Modi 2.0’s
non-economic agenda. India’s 200 million Muslims fear that
the Hindu-majority nation is weakening the protections of its
secular constitution. Mass protests have erupted against a
project that might require 1.3 billion people to furnish docu-
ments to prove citizenship. The end result could be discrimina-
tory along religious lines, hurt the undocumented poor, or
both.
Microsoft Corp.’s Indian-born chief executive, Satya Nadella,
has expressed his disappointment and financier George Soros
has rebuked the government. When Amazon.com Inc. boss Jeff
Bezos visited recently to promise more investment, an official
opportunity alism, finance minister Nirmala through the 2008 financial crisis, is needed.
for course Sitharaman has to acknowledge that As for generating resources in a weak economy, a push to
correction the fiscal deficit of the federal govern- include Indian government debt in global indexes is a good
ment is around 4.5-5% of GDP— idea, but foreigners will demand even more transparency than
nowhere close to the 3.3% target for local investors. Telling them that the government’s debt-to-
the financial year ending 31 March. There’s little chance of that GDP ratio, currently 46%, will perhaps miss the 40% target set
happening. for March 2025 by as many as five years could push borrowing
The 2017 goods and services tax (GST) has flopped, pushing costs higher, and nudge the rupee lower.
New Delhi to incur more liabilities outside the budget, for A safer choice would be to acknowledge an annual fiscal slip-
instance by dipping into people’s post-office savings for food page of, say, 0.5 percentage point—to 3.8% of GDP for a couple
subsidies. Without accepting that the GST needs an overhaul, of years—and finance the additional budget deficit with money
a fair share won’t reach India’s states and into the hands of peo- printed by the central bank. That, I suspect, is India’s current
ple who can spend it. ceiling on truth-telling. BLOOMBERG
14 FRIDAY, 31 JANUARY 2020
NEW DELHI
India Inc Eyes A Boost In Spending
To Revive Demand, Trigger Investments
Apart from capital infusion into the infrastructure sector, analysts call for taxation reforms to improve investor sentiment
Biman Mukherji & Malyaban Ghosh
NEW DELHI
W
ith the Indian economy in the
grip of a severe economic
slowdown, companies are
hoping that the government
will announce measures in the
budget to increase spending, with a focus on the
infrastructure sector, and cut taxes to boost con-
sumer demand.
India’s economic growth slipped to 4.5% in the
July-September quarter, the slowest in more
than six years. Despite a cut in corporate tax to
22% from 30% for existing companies and to 15%
from 25% for new manufacturing companies, a
revival in industrial investments eludes the econ-
omy.
“There are nascent signs that point towards an
improvement and we need to make sure that
these find a more solid footing,” said Sangita
Reddy, president of the Federa-
tion of Indian Chambers of Com-
merce and Industry (Ficci).
Reddy suggested that the gov-
ernment infuse as much as ₹2 tril-
lion in the economy in the coming IMPETUS
year “to give a boost to demand
and trigger investments”. Higher demand could
be created by providing cheaper loans and by
taking steps to augment rural incomes under the
PM-Kisan scheme, she said.
Steps are also required to boost construction,
infrastructure and exports, according to the Ficci
president.
The slowdown in the economy has persisted
for six straight quarters and non-banking finan-
cial companies (NBFCs) are still facing a liquidity
squeeze as most banks have tightened lending to
them. Overall economic activity has also suffered
because of pressure on manufacturing and infra-
structure sectors, industry officials said.
“Basically, we have to spend our way out of the
slowdown,” said Vikram Kirloskar, president of
the Confederation of Indian Industry (CII).
1 2017-18: BREAKING CONVENTIONS
Historically budgets fall in
two buckets. Those that are
situational—dominated by
an unravelling challenge and
hence largely reactionary—
and the few out-of-the-box
essays seeking to reset the
economic agenda. Mint picks
10 budgets which stand out
for one or the other of these
reasons.
F inance minister Arun Jaitley
advanced the budget
presentation to 1 February,
breaking several conventions
to give a better picture of the
fisc. He also merged the railway
budget with the Union budget
and dropped the plan and non-
plan classification of spending.
Spending on infrastructure should be a key focus,
said Kirloskar. He also urged the government to
“consider setting up a refinance agency for well-
governed NBFCs on the same lines as the Mudra
scheme for MSMEs”.
Saddled with bad loans, banks have stopped
funding NBFCs in the wake of the defaults by
Infrastructure Leasing and Financial Services
Ltd (IL&FS), which impacted sectors such as
automobiles and real estate.
In December, finance minister Nirmala Sithar-
aman announced a massive nationwide pro-
gramme of ₹102 trillion for infrastructure pro-
jects with an eye on achieving Prime Minister
Narendra Modi’s ambitious $5 trillion economy
by 2024-25. However, the programme would
require follow up support at multiple levels,
many of which could be through the budget, said
Arindam Guha, partner at Deloitte India.
Specific credit support for many of the infra-
structure programmes could be announced in
the budget, given that local gov-
ernment bodies are financially
constrained, according to Guha.
Besides, independent regulatory
mechanisms for determination of
tariffs and subsidies could be
announced.
The goal of achieving a $5 trillion economy
could only be achieved by a bold bet on reforms
to drive ease of business for industrial invest-
ments to pick up, said Niranjan Hiranandani,
president of the Associated Chambers of Com-
merce and Industry.
“Though India’s ranking in ease of doing busi-
ness has improved at the national level, many
states need to catch up by addressing ground-
level constraints and simplifying the approval
process,” Hiranandani said. The government
should focus on the development of small and
medium enterprises, he said.
Consequently, the reduction in income-tax
rates announced for corporate entities should
also be extended to all MSMEs registered as pro-
prietary or partnership concerns, Hiranandani
BUDGET 2020
ANIRUDDHA CHOWDHURY/MINT
m MINT GRAPHITI
EXPERT
The way of the slowdown VIEW
The slowdown in the 14
GDP PFCE GFCF year-on-year (in %)
economy has persisted for AMIT SINGHANIA &
12
six straight quarters with 10.1 R A H U L YA DAV
NBFCs still facing a liquidity 10
7.8
squeeze in the wake of the 8
IL&FS crisis. Overall 6
6 Respond to this column at
feedback@livemint.com
economic activity has also 4
suffered because of 3.9 4.5
Incentivize HFCs and
2
pressure on manufacturing 1
0
and infrastructure sectors. Q1 FY18 Q2 FY20
GDP: Gross domestic product; PFCE: Private final consumption expenditure;
GFCF: Gross fixed capital formation
WHAT INDUSTRY WANTS
Give additional fiscal flexibility
RELAX mandatory 80% land acquisition condition
startups, cut tax rates
before highways construction can start to 50%
of 0.5% to 0.75% of GDP
Rationalize personal
income-tax in five slabs:
BOOST rural income growth by increased public
spending on rural infrastructure
to increase demand
(in ) (in %)
RECONSIDER proposal to deny full minimum
he stage is set for the Union budget 2020-21. As the
T
alternative tax, or MAT, credit on opting for Section
Taxable income Tax rate 115BAA under Income-Tax Act finance ministry gears up for the big day amid a slowing
0-5 lakh Nil TAX deducted at source (TDS) on rent should be economy, uninspiring consumer demand and falling tax
5-10 lakh 10 reduced from 10% to 5%. To improve the effective revenues, various industrial sectors and the public at large have
ROR from renting, it is suggested that the deduction voiced their expectations. The government, as always, will have
10-20 lakh 20
from rental income under Section 24(a) be increased to maintain a fine balance between boosting tax revenue and
20 lakh-2 crore
Above 2 crore
25
35
from 30% to 50%. introducing tax reforms to increase demand, besides reviving
Source: Mospi
the economy. Here’s some of the expectations from the budget:
Real estate: The sector has been among the worst hit. The
SANTOSH SHARMA/MINT government must take certain measures to make the real estate
said. Moreover, those MSMEs that provide high- ₹25,000 crore and approved creation of alterna- sector financially more lucrative for homebuyers. Currently,
level of employment should be given financial tive investment funds to increase funding for the the tax laws offer a rebate of up to ₹2 lakh for bank home loans.
incentives or a specific tax rebate linked to jobs stressed real estate sector. However, Hiranan- An upward revision of the limit, coupled with tax incentives for
creation, he said. dani called for measures for new segments such personal income will help boost demand, and make invest-
Sectors that bring about import substitution as rental housing. ments into real estate more lucrative. To incentivize housing
should be kept out of free trade agreements and Besides measures aimed at specific sectors, finance, the government should extend the tax benefit to loans
digitization should be encouraged by giving Neeru Ahuja, partner at Deloitte India, said that from housing finance companies, prescribed financial institu-
interest or capital subsidies on systems and the upcoming budget should also aim to give a fil- tions and non-banking financial companies.
equipment. lip to the overall sentiment for investors by taxing Manufacturing: The government’s move to reduce corpo-
Hiranandani also suggested that the govern- dividend distribution tax in the hands of inves- rate tax rates was a welcome move. New manufacturing compa-
ment help with measures to create a market for tors rather than corporates. nies (set up after 1 October 2019) are now entitled to a reduced
long-term bonds, where pension funds can The government could also announce meas- tax rate of 15%, subject to certain conditions. However, it puts
invest, to bridge the liquidity problems that arose ures for speedy resolution of tax disputes, which existing manufacturers at a disadvantage. With a view to pro-
in the wake of the IL&FS crisis. often drag on for years. mote manufacturing activity across all sectors, the government
The government has already earmarked biman.m@livemint.com may further rationalize the corporate tax rate for existing man-
ufacturers as well. The government must offer a clarification on
whether the reduced tax rate (for
The govt may manufacturing activity) also covers
HT
further
rationalize the
corporate tax
contract manufacturing.
Micro, small and medium
enterprises: Many MSMEs are
incorporated as limited liability part-
rate for existing nerships (LLP), for various reasons.
1 The finance minister
announced a
₹20,000 limit on cash
2 To give relief to small
businesses, the FY18
budget cut tax rates for
manufacturers With a view to bring LLPs on a par
with companies, it is recommended
that re-organization/merger of LLPs
donations to political companies with an annual be also brought under the capital gains exemption, as is the case
parties and an electoral turnover of up to ₹50 crore with companies. Besides, tax rates applicable for LLPs should
be aligned with the reduced tax rates applicable for corporates.
bonds scheme, which later from 30% to 25%. It was
Such a measure will provide a level playing field for all entities
turned out to be an estimated to benefit 96% regardless of their structure and facilitate ease of doing busi-
intensely debated issue. of small businesses. ness. Further, with a view to promote growth for MSMEs,
incorporated as companies, the government may consider
3 The budget lowered rate of taxation in the income
bracket of ₹2.5-5 lakh from 10% to 5%. The move
reduced the tax liability of those earning less than ₹5 lakh
abolishing the dividend distribution tax.
Startups: The government has remained committed to pro-
moting startups and a culture of entrepreneurship, which play
a key role in any developing economy. To incentivize startups,
to zero with rebate, or their tax liability by half. the government may introduce tax exemptions for promoters
4 In view of the goods
and services tax, 5 Jaitley announced a
₹10,000-crore capital
or founders who are issued additional shares for turning
around a company. Further, to promote investments, govern-
ment may also make exits from startups tax neutral in the hands
of long-term investors.
which was scheduled to infusion for public sector E-commerce/digital: A global consensus is being devel-
be rolled out in July 2017, banks and set a ₹2.4 trillion oped on framing rules to tax the digital economy. India has
Jaitley refrained from target for loans to small introduced ‘significant economic presence’ rules, but it is rec-
making changes to and micro enterprises ommended that such rules be deferred till a global consensus is
reached.
the central excise duty under the Pradhan Mantri Amit Singhania is partner and Rahul Yadav is principal
and service taxes. Mudra Yojana. associate at law firm Shardul Amarchand Mangaldas and Co.
Views expressed are personal.
16 FRIDAY, 31 JANUARY 2020
NEW DELHI VIEWS

OUR VIEW MY VIEW | FARM TRUTHS

ISTOCKPHOTO

Sitharaman’s second budget

must do what the first didn’t
An increase in public expenditure is a must to boost demand and provide a safety net to the poor

Employment Guarantee Scheme ing. If the deficit is a result of public

(NREGS), has seen a cutback, according
to data, at a time when rural distress is at
its peak.
Since the recent sharp slide in the
economy is primarily a result of a
decline in consumption demand, the
best way to revive it would be by
increasing public expenditure. While
HIMANSHU this situation has arisen due to short-
is associate professor at Jawaharlal Nehru sighted policies and a misdiagnosis of
University and visiting fellow at the Centre the problem, the solution does not lie in
de Sciences Humaines, New Delhi cutting back essential social sector
expenditure, but in enhancing it. This is
not only necessary to revive demand in
rural areas, given the large multiplier
expenditure that raises demand in the
economy, it will lead to higher revenues
in subsequent years. It will also generate
demand for investment and increase
savings in the medium to long term.
Such a rise in public expenditure can
easily be funded by rationalizing taxes.
These are currently highly skewed in
favour of large corporations at the cost
of small and medium enterprises
(SMEs), even though it is the latter
which hold the key to an economic
bounce-back. Reviving SMEs is not just
a necessity for reviving demand and
investment, but also for employment

Salary earners have O

n Saturday, finance minister impact of such spending, it also pro- generation at a time when unemploy-
Nirmala Sitharaman will vides a social safety net for the rural ment rates are at five-decade highs.
present the second budget of poor, who are struggling with reduced This budget is also an opportunity for
the National Democratic Alliance (NDA) incomes, high inflation and rising the finance minister to come clean on
government after it returned to power unemployment. the basic economic aggregates pre-

been squeezed enough last year. Conditions have changed

quite dramatically since her July 2019
budget. That budget came amid an
exultant mood following the NDA’s
With inflation likely to remain high
for some time now, monetary policy is
unlikely to help boost either demand or
investment; more so with the financial
sented by the government. Doubts have
been raised, for instance, on the true
extent of the fiscal deficit, while dis-
crepancies between estimates of the
emphatic electoral victory. The govern- sector under stress and credit flows hav- Economic Survey and the budget are
ment’s target of a $5 trillion economy in ing slumped to their lowest level this puzzling. Similarly, the practice of
The salaried in India are voiceless and vulnerable. They serve as a soft target for taxation. five years was a reflection of that eupho- decade. reaching out to public sector units for
ria. This budget, however, comes While critics and rating agencies may greater dividends to shore up govern-
But it’s time for our tax policy to relieve a group that bears an unfairly heavy burden against the backdrop of a sinking econ- frown upon an expansion in the fiscal ment receipts—which are falling short
omy amid rising inflation, poverty and deficit, it is the only way out of the eco- in the wake of low revenues and slug-
unemployment. nomic mess. What matters in the long gish disinvestment—is hurting these
A large part of the blame for this shift run is not the extent of the fiscal deficit, companies. The credibility of most eco-

I
t is fair to say that income tax payers are a
hapless minority in India. Within this class
is a sub-class of the salaried, the most
oppressed. In a country of 1.3 billion, they
simply do not constitute a group large
enough for their voice to matter in the
political scheme of things. They are not a
voting bloc by any definition, dominate no
electoral constituency for a representative to
air their grievances in Parliament, and have no
weighty forum to lobby the government in
their favour. Caught up in the daily grind of
their work routines, they rarely get a chance to
look up and cry foul over the taxation policy.
Even if they did, a deaf reception is usually all
they can expect. This, then, is the lot of those
who know they make up just 3% of the
country’s citizenry, the few who actually pay
income tax. It is a tale of woe that need not be
one if the burden is shared more equitably.
Thanks to government efforts to widen the
tax net, far greater numbers have been filing
finance minister Arun Jaitley, salary earners in outlook in just six months lies with but the quality of government spend- nomic data is under doubt. It is impor-
shelled out an average income tax of ₹76,306 the government, which, despite ample tant, therefore, for the government to
evidence of distress in the economy present a true picture.
in 2017-19, three times the non-salaried tax- over the past five years, ignored the A budget is essentially a statement of
payer’s mean outgo of ₹25,753. This is a stark warning signs. Its actions subsequent to QUICK READ government accounts. But it is also seen
difference. All the more so because it does not the budget only worsened the situation, as a declaration of its economic priori-
conform with socially observed lifestyle gaps while weakening its ability to intervene. A large part of the blame for the ties. While there may be little room for
A recent giveaway was its corporate tax shift in India’s economic outlook large-scale reforms, this budget could
between the employed and the self-employed cut, which has now come to haunt it since the July budget seems to lie signal the NDA’s approach to reviving
within the same socioeconomic class. through a significant decline in direct with the government, which the economy. To do so, it has hardly any
With several measures adopted by the tax collections—the first in more than ignored warning signs despite option but to hike public expenditure in
government to plug tax evasion, one would two decades. This has triggered a panic ample evidence of distress. rural areas and lend support to SMEs.
have expected the tax net to have left little reaction, leading to a sharp cutback in There are numerous ways of raising rev-
government spending, even though Public expenditure must be enues and rationalizing expenditures to
room for escape by now. Either way, it is time such spending is essential for reviving enhanced to generate demand. fund this spending. The issue, there-
for the Centre to cut the salaried some slack. demand. Social sector spending, for This can be funded through tax fore, is not how this can be done, but
This could be by way of raising the exemption instance, the bulk of which is aimed at and expenditure rationalization. whether the government has the eco-
limit above ₹2.5 lakh in annual income. Tax the poor in rural areas through such But has the government got nomic sense and political will to do so.
rates could also be rationalized. Reams have programmes as the National Rural its priorities right? We will know on 1 February.
been written on the so-called Laffer Curve and
how tax collections may actually rise if rates
fall. The benefits of a benign tax framework
can never be overemphasized. Finance
minister Nirmala Sitharaman did well to
lighten the burden on corporations last year, www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Chandigarh*, Pune* Monday, February 1, 2010 Vol.4 No.27 Rs. 3.00 32 +248 PAGES

income tax return statements in recent years. lowering the rate of corporate tax to globally AUSTRALIAN OPEN: Paes,
Black
win mixed doubles title >10

This counts as a success, but there is reason
competitive levels. This budget, she could
MARK TO MARKET: Tata Motors profit
way off street estimate >12
EXCLUSIVE PARTNER
CORPORATE: Coal India plans to
invest in overseas coal mines >6

enough to suspect that a significant portion of slash the top rate of income tax from 30% to a SENSEX 16,357.96 ®

What’s inside
NIFTY 4,882.05 ®

NIFTY FIRMS
DOLLAR Rs46.17 ® EURO Rs64.31 ®

ECONOMIC REFORMS
GOLD Rs16,245 ®

Tell it right: it’s three

OIL $71.46 ®

Best profit
those who file these are non-salaried earners relatively reasonable 20-25%. In return, ANNIVERSARY SPECIAL

growth in
not two decades

[I] shall never use profanity

I f you repeat a point often
enough, it will, sooner or
later, become a fact.
CAPITAL CALCULUS
ANIL PADMANABHAN
This seems to have hap- when India was in the throes

who have managed to dodge their real liability taxpayers would perhaps be ready to give up
pened with the story of India’s of one of its worst economic

8 quarters
tryst with economic reforms. crises.
Repeated over and over again Responding to this chal-
in the last two decades, most lenge, the minority Congress
Three wise men, the trin- people in the country have government, despite severe
THE ity, three dimensions, come to believe that economic
POWER hat-tricks and triple sun- reforms began in 1991-92, TURN TO PAGE 13®
OF 3

except in discussing house

daes. The number three
finds resonance every- Auto and metal firms GAINING MOMENTUM

by using various tricks of accountancy. Some
some of the rebates that tend to complicate
where, in mythology, in fables, books, films, every- were top performers
day life and now, in Mint’s anniversary issue. Read THE NEWS
about the third generation tragedy in business, due to higher volumes, Average profit growth in the three months
Note to readers of what makes Mint unique—best-in-
ended 31 December has been the best in
evolving India as seen from the NH3, real life sto- lower costs in the three eight quarters at companies that make up
class offerings in the personal finance
(Money Matters), news-you-can-use
ries that mirror 3 Idiots, the magic of the number Dear Reader,
three and much more. >P13 months ended Dec the 50-stock Nifty.
Thank you. Mint is now three years (Business of Life), and weekend maga-
THE BACKGROUND old. The latest edition of the Indian zine (Lounge) areas; credible and objec-
Government stimulus packages and a series
B Y R AVI K RISHNAN & Readership Survey says Mint is the tive reporting; excellent narratives; in-
of interest rate cuts by RBI have helped
country’s second most read business depth investigations; as well as the

two-fifths of the returns filed show zero tax calculations. An elementary canon of taxation
A SHWIN R AMARATHINAM revive economic growth.
························· paper, after The Economic Times courage to take on subjects not consid-

rent and taxes.

MUMBAI
THE IMPLICATION (which, to be fair, is far ahead) but ered apt for a business paper or issues
Analysts say earnings growth may continue that are too controversial to be covered.
ahead of the Business Standard, The

A verage profit growth in

the three months ended
31 December has been
the best in eight quarters at
companies that make up the
because of the base effect, but the
market is concerned about the
Budget and a possible rollback
of fiscal stimulus.
Hindu Business Line, and The Financial
Express. It is also India’s No. 1 media
brand according to a survey done by
Pitch magazine that rated publications
Between the paper, the mobile phone
offering (Mint Mobile), the website
(livemint.com) and our online video
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and TV channels on several parameters, match your needs for news, views, and
50-stock Nifty, the benchmark average posted a year-on-year including how well the sales team sold analysis across media. And we will do
CORPORATE NEWS ECONOMY & POLITICS

payable. Data reveals that the bulk of Indian is simplicity. As the old wisdom goes, a good
index of the National Stock Ex- net profit increase of 21.92% the product, and the kind of audience all this without deviating from our code
Spice Televentures Five-day Davos meet ends change. While the momentum for the December quarter. delivered by the product, so thank you of conduct.
will be merged into with widespread agreement is likely to be carried forward That’s their best performance (too) advertisers. Thank you for choosing to read Mint,
Spice Mobiles in a that a fragile recovery is to the next quarter, the market since the December 2007 quar- That’s a fine progression of numbers and do continue to send your feedback
bid to raise capital under way but no consen- is concerned about the Budget ter, when earnings grew by and no one could ask more of a paper to feedback@livemint.com, or to me
and shift the group’s focus sus on what’s going to spur and a possible rollback of fis- 32.27%. that remains a start-up—in spirit as directly at sukumar.r@livemint.com
to mobile Internet. >P10 job growth and prevent an- cal stimulus. Profit at firms in the narrow- well as age. In days (and years) to R. Sukumar
*** other economic crisis. >P4 A Mint analysis shows that come, we will continue to give you more Editor
Reliance Industries’ new *** 41 firms listed on the Nifty on TURN TO PAGE 4®

return filers are in the zero or lowest tax tax is one that takes only a few syllables to
Jamnagar refinery has ex-
ceeded its design capacity
by at least 20%. >P6
NOTE TO READERS
Due to our anniversary
special issue, most of our
regular columns will
resume next week.
The extension of trading
hours at Indian bourses has
started boosting trading
volumes, disproving con-
cerns among brokers of a Banks rush to
open branches
MA R K T WA I N
possible loss in market
depth, with the turnover on
BSE and NSE reaching a six-
month high in January. >P5 in Mukherjee’s

bracket. Given India’s socioeconomic pyra- explain. The need for a progressive system of
VIEWS
The decision to
squeeze out
constituency
around Rs36,000 B Y A VEEK D ATTA
crore of liquidity aveek.d@livemint.com
from the economy ·························
JANGIPUR (WEST BENGAL)
may well have some
unexpected conse-
T he opening of an Alla-

mid, this is only to be expected. What is not taxation means that slabs graded by income
quences, says habad Bank branch near
S. Narayan. >P30 his home in Panchgram vil-
lage, in the interiors of West
Bengal’s Murshidabad district,
has brought relief to Moham-
med Samiruddin, a wholesale
QUICK EDIT dealer of fertilizer and insecti-
cide.

Banking for more trouble The bank where he had an

plausible, however, is that everyone paying levels still need to exist. The better off must
account until Allahabad Bank
opened a branch in his village

I t has been debated, but no

one knows what to do. First
in London, then Pittsburgh
and now at Davos. The world
does not know how to make
its big banks safe. “Too big to
fail” bailouts are deeply
the fund? These are, however,
just surface issues.
The big problem is, can
moral hazard ever be
eliminated when banks know
that rescue packages are
around the corner? No one
was nearly 7km away. “I would
often have to carry Rs4-5 lakh
in cash when I returned home,
which at night wasn’t an advis-
able thing to do, but at times
there would be no alternative,”
said Samiruddin, who now

nothing or little by way of tax is doing so in full always pay more. But there is nothing quite
unfashionable with
electorates, but bankers don’t
seem to mind them.
At Davos, one proposal was
to create a rescue fund, the
so-called resolution fund, to
manage the affairs of troubled
institutions that threatened
the financial system at large.
wants to talk about that.
Eliminating moral hazard
will require a basic redesign
of the global financial
architecture. Expectations of
huge profits being whipped
out of thin air and magic in
financial markets will have to
be given up. After the initial
wants his loan account, too,
moved to the branch near his
home. Samiruddin is one of
tens of thousands of people in
Murshidabad for whom acces-
sibility to banks has improved
dramatically since Pranab
Mukherjee became finance
minister last year—after win-

honesty. According to numbers presented in like a clean and snappy figure as a tax rate, a
It has, predictably, run into shock of the 2008-09 crisis, ning the parliamentary elec-
problems. Who will run it? that matter has not returned tion from Jangipur constituen-
How will the money come for to the reform agenda. cy.

Mint is also available for Rs5.50 with Hindustan Times under a combo offer TURN TO PAGE 5®

the 2018-19 budget speech made by then percentage with no ifs and buts.

GUEST VIEW

Greta Thunberg, Trump and the future of capitalism

I could not contain myself after Mnuchin’s
YANIS VAROUFAKIS Davos remark. “Mnuchin, sadly, makes
sense,” I tweeted. “If Greta were to study
mainstream economics, she would spend
several semesters studying models of mar-
kets in which neither a climate disaster nor
energized against some ill. her spirit or divert her from endeavours that nature at breakneck speed, financed by
Economics is no exception. The textbooks could make her even more dangerous to the debt-turbocharged financialization.
Thunberg would have to read begin with economic interests Trump represents. This “technostructure”, as John Kenneth
models of markets where the unfettered pri- Some lament the Trump administration’s Galbraith christened this mechanism, will
vate profit drive is shown mathematically to animosity toward young people and scien- never willingly accept the limits on physical
serve public interest. Only after she has tists who speak common sense about a mas- growth and extraction necessary for con-

is former finance minister
of Greece and professor of
economics at the University
of Athens
S
teven Mnuchin, US President Donald
Trump’s treasury secretary, outraged
liberal commentators at this year’s
World Economic Forum meeting in Davos
with a snide remark directed at teenage cli-
mate activist Greta Thunberg. Responding
to Thunberg’s call for an immediate exit
from fossil fuel investments, Mnuchin said
that she should go to college “to study eco-
nomics” before “she can come back and
explain that to us”. Two days earlier, Trump
had referred to climate scientists as “the
heirs of yesterday’s foolish fortune tellers”.
The Trump administration’s attitude to
climate change, and those campaigning for
drastic measures to contain it, is ugly, nasty
and wrong. But behind the crassness and
toxicity of Trump, Mnuchin, et al is cold
logic and brutal honesty: Their politics is the
only authentic defence of contemporary
capitalism. And, judging by Mnuchin’s
patronizing advice to Thunberg, they
understand that mainstream economics,
unlike climate science, is their friend.
an economic crisis is possible. Time to trans-
form both economic policy and economics!”
Many fellow economists were unhappy
with my tweet. One tweeted back: “Not sure
which undergrad programs you’re looking
at but all the Econ 101 courses that I know of
involve market failures, where climate
change is the main example.” Quite right.
But it is, I fear, beside the point. While many
examples and concepts in economics
courses would no doubt strengthen Thun-
berg’s resolve and arm her with powerful
arguments against the likes of Mnuchin and
Trump, she would also feel frustrated and
ultimately undermined by economics and its
effect on her fellow students.
One reason is the discipline’s framing and
default settings. In societies where organ
donation is the default setting—automatic
without a signed opt-out—the supply of
transplant organs is substantially larger than
in countries where people must carry donor
cards. Framing is crucial in every setting
where the human mind and heart must be
learned these theorems, and has practised sive threat that we should confront through taining climate change, because it could not
the mental gymnastics needed to derive global cooperation. But Trump and his cabal survive. With the political class utterly
their mathematical proofs, will she be appear to understand something that their dependent on it for campaign financing, any
exposed to “exceptions”—for example, liberal detractors do not: One cannot cap, quota or emissions trading scheme
“externalities” of the production process, acknowledge the perils of climate change, imposed by the government will prove cos-
like climate-change-inducing pollution. commit to doing whatever it takes to reverse metic and, ultimately, impotent. In the same
The very framing of market failures as an it, and continue to think of capitalism as a way that economics students study market
“exception”, perhaps natural system that can failures as exceptions to an otherwise well-
caused by some “exter- be tweaked to deliver functioning market system, centrist reform-
nality”, is an immense QUICK READ shared, green prosperity. ers undergo the Sisyphean task of imagining
propaganda victory for Trump gets it: climate a reformed, green capitalism.
the Trumps and Mnu- The Trump administration’s change is capitalism’s Uncouth and disagreeable, Trumpism is
chins of this world. attitude to climate change is ugly, Waterloo. There is sim- nonetheless an honest manifestation of the
Viewed from this per- nasty and wrong. But behind ply no feasible path historic moment when late capitalism
spective, Mnuchin know- it is the cold logic that their toward the re-stabiliza- pushed humanity past the point of no return.
ingly (or instinctively) politics is the only defence of tion of the climate that is Trump urges us to carry on, while Mnuchin
delivered more than a contemporary capitalism. consistent with the main- suggests that Thunberg numb her soul with
sneering put down. Were tenance of capitalism’s the opium of mainstream economics. The
Thunberg to take his The only alternative to their main pillars. The system only alternative to their policy of accelerated
advice, she would be policy of accelerated climate we live in turns on a path- climate change, to the oil and finance curses
weakened. A degree in change is the disintegration of ological dynamic recy- that drive capitalism, is the wholesale disin-
economics, rather than the mechanism that Kenneth cling mechanism: Oligo- tegration of today’s technostructure. Do we
in science, politics or his- Galbraith christened as the polies extract exhaustible have the stomach for it?
tory, would either crush ‘technostructure’. value from humans and ©2020/PROJECT SYNDICATE
 VIEWS FRIDAY, 31 JANUARY 2020
NEW DELHI 17

THEIR VIEW M I N T C U R AT O R

What the budget can and can’t

do for our rise as a global power
An economic revival would grant India the resources for power projection but strategy matters even more if those are scarce

RAMESH PATHANIA/MINT

Facebook’s ‘like’ logo at the company’s headquarters BLOOMBERG

Facial recognition and $550 mn suit settlement

F acebook said on Wednesday that it had agreed to pay $550 million to settle a
class-action lawsuit over its use of facial recognition technology in Illinois, giv-
ing privacy groups a major victory that again raised questions about the social net-
HARSH V. PANT work’s data-mining practices. The case stemmed from Facebook’s photo-labelling
is professor of international relations service, Tag Suggestions, which uses face-matching software to suggest the names
at King’s College, London of people in users’ photos. The suit said the Silicon Valley company violated an Illi-
nois biometric privacy law by harvesting facial data for Tag Suggestions from the
photos of millions of users in the state without their permission and without telling
them how long the data would be kept. Facebook has said the allegations have no
merit.
The New York Times

A
s the nation awaits the Union budget
for 2020-21, there is a sense of antic-
ipation in the air. In more ways than
one, this is being viewed as a make-
or-break budget for the Narendra
Modi government. A decline in
India’s economic growth rate has energized the
prophets of doom and gloom. It is certainly imper-
ative for Indian policymakers to bring the Indian
growth story back onto the front pages of newspa-
pers, but it is equally important to ascertain the
implications of this decline for Indian foreign pol-
icy. After all, India’s emergence as a global power of
reckoning is predicated on its sustained economic
rise in the international order for decades together.
Resources are fundamental to the emergence of
major powers. In international relations, power is
by and large measured in terms of resources, eco-
nomic wealth, and military might in particular. It is
economic power that not only allows a nation to
invest in building its military capabilities, but also
makes it possible for it to enhance its influence
abroad through economic diplomacy and soft
power. The wealthier a country becomes, the
more its ambitions expand, and it invests in those
resources which enhance its ability to project
power. If military resources allow it to target its
adversaries and draw red lines, trade and invest-
ment relations allow it to attract partners. Eco-
nomic success, therefore, is seen as the principal
propeller of a country’s rise to power. It is well
known that states can easily convert economic
resources into military might. As economic
strength declines, countries find it difficult to
balance their gun-versus-butter preferences.
It was India’s economic rise that made it possible
for its policymakers and their global interlocutors
to envision India as a major pole in the evolving
global order. If the global centre of gravity of eco-
nomics and politics has been shifting from the
West towards the East, then India’s economic heft
along with that of China’s has been a large part of
this dynamic. If the world has been talking about a
multipolar order on the horizon, then it was India’s
surging rates of growth that made it possible for
New Delhi to think of a role for itself. And even
those who believed the global order was headed
for a kind of bipolarity, this century saw India’s
economic might as the key variable that would
shape the outcome between the US and China.
Diplomatically, it was a robust economic profile
that enabled Indian policymakers to think of an
expansive global footprint beyond just South Asia
and the Indian Ocean region. New Delhi could
position itself as a maritime power and a continen-
tal power simultaneously in the emerging
geographies of the Indo-Pacific and Eurasia, partly
because it assumed it had the wherewithal to
manage turbulence in these areas. India as a net
Dinosaurs as firewalkers of the Jurassic period
A bout 183 million years ago during the early part of the Jurassic Period, enor-
mous amounts of lava flowed across the landscape in what is now South Africa,
transforming the environment into a land of fire. But fossil footprints described by
scientists on Wednesday showed that intrepid dinosaurs and other animals man-
aged to inhabit this region—now the semiarid Karoo region of South Africa—during
quieter periods between the volcanic eruptions. These “Karoo firewalkers,” as Uni-
versity of Cape Town geologist Emese Bordy called them, were some of the last
animals known to have lived in this inhospitable region before it ultimately was
engulfed by molten rock.
Reuters
Marks & Spencer’s ‘criminal’ bakery product
C adbury Creme Eggs are already back on the shelves, so it shouldn’t surprise
you that some shops have also started stocking other Easter treats. High street
favourite Marks & Spencer have jumped on the bandwagon and are filling their
bakery section with traditional goodies such as hot cross buns. However they’ve
got a new addition for 2020—but shoppers aren’t entirely convinced by it. M&S are
offering shoppers chilli and cheese flavoured hot cross buns, which they recom-
mend slathering with butter and chilli jam... Plenty of customers were outraged by
the whole thing, with one person branding the savoury hot cross buns “criminal”...
“Shouldn’t be allowed,” commented a different user [on the now-viral M&S Face-
book post]. “REAL hot cross buns should not have any of these faddy flavourings.”
security provider in the wider East and Southeast economy will bounce back, sooner or later. The The Daily Mirror, UK
Asia looked like a realistic possibility, and Indian challenge for New Delhi will be not to lose the
assurances acquired a little more credibility for its momentum generated by its economic rise over
allies even as its threats gained a sharper edge for the last three decades on the international frontier. Reward for plucking tyre off giant croc’s neck
its adversaries. Domestic contestations will continue and the eco-
Militarily, India could expand its ambitions and nomic situation will go back and forth. New Delhi’s
shape the global defence markets as one of the larg- engagement with the world should not recede, for
est buyers of military hardware. that will undermine Indian for-
I ndonesian authorities are offering a reward to anyone who can rescue a saltwater
crocodile with a motorbike tyre stuck around its neck—and survive. The contest
will see one brave croc hunter land an unspecified amount of cash, but it will mean
Its defence diplomacy attained eign policy achievements of the coming face to face with the 13-foot (4-metre) reptile in Palu, the capital of Central
greater salience because it had QUICK READ last two decades which have Sulawesi. Local conservation authorities have been trying—and failing—for several
more resources allowed India to emerge as a seri- years to find a way to untangle the croc after video showed it gasping for air. That
to devote to militarily engaging It is economic power that allows ous player in the global hier- sparked worries the tyre was slowly killing the beast. After a recent sighting, the
other nations. It has been acquir- a country to invest in its military archy. While higher rates of eco- province’s governor instructed his resource-strapped conservation agency to fig-
ing land-, air- and sea-based capabilities, increase its influence nomic growth would allow India ure out how to end years of fruitless attempts. The agency offered few details on
assets and obtaining greater abroad , project power beyond to continue to pursue its expan- the reward, or how outsiders might pull off the task.
coercive power to shape out- its littoral, and draw red lines sive global diplomatic engage- AFP
comes in its favour on the back of for its adversaries. ments relatively easily, eco-
higher rates of economic growth. nomic growth is no substitute for
Politically too, the India India’s economy will bounce strategy. A Scottish pub stands accused of snobbery
model became attractive as an back, but growth is no substitute Strategy matters even more
alternative to the Chinese
model. Here was a democracy
trying its best to bring millions
for strategy. New Delhi’s when resources are in short
engagement with the world must supply. Any nation can claim to
not recede and its foreign policy have global ambitions when its
A pub has banned ‘jobby catcher’ grey tracksuits and shoes with no socks in a
crackdown on hipsters—but has defended accusation of snobbishness. The
Dreadnought in Leith, Edinburgh, describes itself as “old skool” and “a pub that
out of poverty, not in an authori- must respond to challenges. gross domestic product growth knows how to party”. It won the Campaign for Real Ale (CAMRA) City of Edinburgh
tarian setup, but in a liberal, con- is high. It is only when the Pub of the Year award in 2018 and 2019. But the trendy boozer has raised eyebrows
tested political system. And this has been a rebuke domestic and global economic situation is tight by putting a sign in the window—telling men they will not be allowed in if they are
to those who first talked of India as a land of the that the real value of strategy becomes palpable. dressed head-to-toe in grey marl trackies, or wearing shoes with no socks. The
“Hindu rate of growth” and then put China on a So, even as the nation awaits a budget that can Dreadnought is also considering a ban on flip-flops. A sign, reading “gentlemen’s
pedestal for achieving economic prosperity. hopefully spur India on to a high growth trajectory, dress code” depicted a man dressed in a grey tight-fitting tracksuit cuffed at the
So, it is not surprising that as the Indian eco- policymakers in New Delhi should be crafting a ankles and trainers, described as “jobby catchers”.
nomic story faces some headwinds, it will have long-term response to what are likely to be chal- The Daily Mirror, UK
implications for its global posture. But the Indian lenging times in the days and months ahead.

MY VIEW | PEN DRIVE

India’s big fat wedding industry is slowdown-proof

back to India and, a year later, The Wedding
SANNA VOHRA Brigade was born, a one-stop platform where
brides could find curated and verified wed-
ding content, products, venues and services.
The business has given me a front-row seat
to not just the intricacies of wedding plan-
willing to go to any length to ensure that gant celebrations has become so wide- ready-to-wear options for the family, opting
every aspect of the occasion is perfect. They spread that the concept of the “big fat Indian against a famed photographer, and choos-
are planned well in advance and frequently wedding” has transcended borders. ing a local destination instead of a foreign
scheduled to coincide with auspicious dates However, an industry that assumes itself one. All of these options can result in signifi-
on the calendar. Parents begin saving for to be immune to the broader economic cant savings, while doing little to detract
their children’s weddings as soon as they are environment is setting itself up for failure. from the overall spectacle of the event.

is chief executive officer
and founder of The
Wedding Brigade
A
few years ago, I was on a holiday in
Mumbai where a friend was plan-
ning her sister’s wedding. To get a
sense of the location, outfits, décor and invi-
tations, she had to go through multiple
email threads, WhatsApp groups and web-
sites. Not only was the process extremely
inefficient and disorganized, but the family
was stressed out, exhausted and not enjoy-
ing what was supposed to be the “most mag-
ical time” in their lives. I asked around and
found that most brides felt the same way.
I went back to New York where I was
working at Morgan Stanley and did some
research on the Indian wedding space. I
found that despite the size of the industry
and the cultural significance of Indian wed-
dings, India had no reliable platforms for
brides to fulfil all their wedding needs.
Though my only entrepreneurial experience
thus far was a small restaurant-discount
startup I had at Brown University with a few
friends, I decided to take the plunge. I moved
ning, but overall industry trends as well.
The Indian wedding industry has always
been a robust contributor to the nation’s
economy. Given the size and scale of the
average function, the sheer variety of servi-
ces and products involved, and the number
of people engaged in putting together this
grandest of affairs, that is only to be
expected. However, the past decade has
seen the industry boom to another level
and, in the process, it has revealed itself to
be much more resistant to macroeconomic
trends than other consumer-led sectors.
That should hardly come as a surprise. A
recent KPMG report estimated India’s cur-
rent wedding market at $50 billion, growing
rapidly every year. With close to half of
India’s 1.3 billion-strong population under
the age of 30 and more than 10-12 million
weddings held annually, a steady flow of
future nuptials seems assured.
Weddings represent an irreplaceable part
of our cultural fabric, and many families are
born and allocate a significant portion of Thankfully, the wedding industry is cogni- This is especially true of the Indian mid-
their life’s savings to the event. Some esti- zant of this peril and has taken steps to safe- dle class, long renowned for frugality and
mates suggest that up to one-fifth of an indi- guard its pre-eminent position in India’s financial prudence. Yet, after spending
vidual’s total lifetime wealth is poured into festive calendar by constantly seeking to most of their lives working towards this one
this occasion. diversify its offerings, offer lots of customi- pivotal moment, they are unlikely to scale
Signalling the social and financial status zation/personalization, and being able to back their expenses much on account of an
of the families involved, work around small shifts economic slowdown. In this instance, the
weddings have seen the in budget. only visible sign of it would be a reduction in
glamourization of tradi- QUICK READ So far, we have not relatively frivolous expenditures such as
tional ceremonies, such seen a large overall spending at wedding exhibitions, or per-
as the haldi (turmeric The past decade has seen India’s reduction in the size and haps a slight reduction in the number of
ceremony) and mehendi wedding industry boom and also scope of the average guests. Spending on key staples such as
(henna ceremony), and revealed itself as one haven of a Indian wedding, but an venue, decor, food, bridal lehenga (bridal
also the incorporation of sector, resistant to recessionary underlying concern over dress), and jewellery stay largely unaffected.
western dos, such as stag trends elsewhere. the state of the economy As the industry continues to mature and
and hen parties, and may prompt families to formalize, it will enter an entirely new phase
cocktail evenings, which The country’s demographic be more discerning in of professional expansion and growth. Ulti-
in recent years have profile and evident need for some of their choices. mately, the Indian wedding is a bread-and-
increased the popularity social and financial status This could manifest itself butter industry. Come rain or shine, wed-
of destination weddings signalling will likely sustain that through compromises dings will happen and forever remain a
in foreign locales. story, but the sector is bracing across an array of highlight in the lives of the families involved.
Indeed, India’s reputa- for a slight slackening in demand options, such as a switch So, as we begin a new decade under a cloud
tion for hosting extrava- for a few extravagances from couture clothing to of worry, I say, “Here comes the sun.”
 EXCLUSIVE FROM

18 FRIDAY, 31 JANUARY 2020

NEW DELHI

Demand is set to go up from Pidilite gained from shutdown of

Chinese plants: MD Bharat Puri
Mar, says Tata Power’s Sinha Surabhi Upadhyay &
Nigel D’Souza
Latha Venkatesh & Sonia Shenoy CNBC-TV18
CNBC-TV18
On an overall
E
xports benefitted from

W
e expect Mundra basis, the ADITYA China shutting some
recovery to sustain at plants and continue to
current levels, says scheme will bring look good for the next 3-6
Praveer Sinha, man- about a huge change months, says Bharat Puri,
aging director and in the operational managing director Pidilite
chief executive officer, Tata Power. Industries. Edited excerpts of
Edited excerpts of an interview: capability, financial an interview:
First on Mundra. You all reported health of discoms. It was really quite a solid
an Ebitda profit versus loss and with quarter. The 24% margins
no loss funding and under-recover- Praveer Sinha are actually at the upper
Managing director and chief
ies halving to 32 paisa per unit, what executive officer, Tata Power end of your historical
part of this improvement can be guided band of 20% to 24%.
accounted for by lower coal prices? Can you stay right there at
To what extent is this sustainable? the top? Could it go higher?
The performance has been very con- Could you improve it?
sistent and very good for this quarter for At Pidilite, our focus is
Tata Power. Both Ebitda and profits always on topline volume Bharat Puri, MD, Pidilite Industries.
have improved. This is the third quarter, growth. We have always said
where we have consistently improved that we will manage margins actions which we will act on pen to crude, what is going to
on Ebitda and profit. within a band between 20% what is within our control, happen, are there any black
Of the changes that we have made in and 24% depending upon raw whether it be in the area of swan events we do not know.
Mundra, one is the coal prices which material/input costs. new product launches, So, I think the right way is cau-
have come down. However, there are We are at the top end, but as whether it be in the area of tious optimism.
two other things that have happened. far as we are concerned, going investment in brands, invest- For two straight quarters,
One is the blending of coal that we forward our focus will remain ment in capability. So all of you have had 13% volume
have been doing and today nearly 48% on stimulating volume growth that continues. growth in your industrial
blending that we are doing over there. because we believe that is the If you look at for example, business. Is the worst
That has helped us to use different varie- right mantra for a pioneer like this year over the first nine behind you?
ties and different types of coal, which is we see among all the states to resolve the Ebitda for each quarter is going up budget or thereafter is a very good us. months we have No. Actually the industrial
helping us to bring down the average this. because of better performance by the scheme because it brings to focus the Have you cut INTERVIEW actually stepped growth is a little bit of a misno-
cost of coal that is to be used. You have been consistently reduc- renewables. Of course October-Decem- challenges the distribution companies prices to pass up advertising by mer. A large part of the growth
The other is that we have been doing ing your under-recovery, is there ber quarter is not the best quarter for are facing and they have been told that on the lower commodity 0.5% of sale. is because of the exports. We
a lot of sourcing in a very smart way and more to go? renewables because the wind speeds are they need to either do privatisation of cost in quarter four? What So, we continue to invest have a substantial amount of
that has helped us to spot purchases, dis- I think the prices have been very soft. low and this year because of the distribution or go for multiple franchise is the blended impact and obviously we are believers exports from our pigments
tressed sell of coal, which has been there We saw the HBA prices coming down to extended monsoon the solar generation or network franchise. across the board? strongly in the India story and division and actually what is
in the market, we have been able to get $65-66 per metric tonne and I don’t in October and November was much So on an overall basis the new scheme We have not cut prices as economic growth returns, happening is as China has
those coal. That has brought down the think in the immediate future this will less than last year. will bring about huge change and trans- across the board, but wherever we want to be riding it. tightened up on environmen-
average under-recovery from last year’s go any further down. We find that all our plant are operat- formation in the distribution companies necessary, where we need to How is demand sentiment tal regulations within China,
93 paisa to last quarter 51 paisa to this So this is the best that has been done ing at nearly 100% availability. All our because at the end of the day, the distri- cut prices, if we believe that panning out now? we have been one of the bene-
quarter 32 paisa. So we are virtually at under the given circumstances and we solar plants operated at 100% in last bution companies should have money the price premium is untena- It is difficult to say, but I ficiaries of the China close
the high-power committee (HPC) level, do expect that we would be in this range quarter and the wind ones also were at to pay to the generating companies and ble, we obviously take action. think the right word should be down/shut down of some of
which we were expecting. for a few quarters. 98-99%. So our renewable portfolio is transmission companies and that is what The very fact that we are on cautious optimism. Let us wait their factories.
I think this is there to INTERVIEW Power consumption has doing very well and it’s operating at full we expect the new scheme to imple- the top end of our margin band for the next two quarters, let us So, a large part of the of
continue for some more gone up—from very bad capacity. We did have challenges espe- ment. suggests that if raw material look at conditions on the industrial growth is actually
time typically because the market prices levels but we do see a recovery. Can cially with two states about the payment. There are certain incentives but those prices were to soften further, ground. We also get impacted exports, it is not domestic
for imported coal has been soft and we you detail to us whether January However, in the month of December incentives will be given only if they meet over a period of time we would by the soft real estate sector; if growth. Our exports are grow-
do not expect huge changes to happen at was better than December in terms and January we have seen some pay- these requirements of the reforms. We look at price corrections. we see some amount of recov- ing substantially and that is
least for next few quarters. of demand and consumption? ments come through. expect that going forward we in Tata Do you witness volume ery there, all of what is fuelling
The resolution on Mundra, you ear- On an overall basis, we do find that Some of them have been Power will play a very criti- recovery in Q4 and can that will add back ‘The industrial industrial
lier told us that it should happen by there are shoots of recovery, which are through factoring arrange- ‘The market cal role in improving the there be double digit vol- to growth. growth is a little growth.
Q4. What is the latest now and happening. The months of December, ment or through bill dis- prices for financial health and opera- ume growth in the next How did raw bit of a misnomer. O n export
where is it stuck? January are not high consumption counting arrangement and imported coal has tional capability of dis- year as well? material prices Our exports growth, what is
We had a very good meeting in the months. We only see the trend of high some of it is direct cash been soft and we coms. First, as far as volume recov- do for you? I am the outlook
ministry of power on 12 December 2019 consumption starting from March
are growing
payment that has hap- So we are very excited ery is concerned, the only guessing the there on that
and all the states were called and they all onwards when the summer starts in
do not expect substantially
pened from these states. about the change that the greenshoot that we do see is, if slight softness side of the busi-
agreed that this is a low cost power and many places. So our average is about huge changes to government is coming up you recall last year quarter there played a and that is what ness?
they would like to continue supply from So we do expect that once the recov- 60 day payment in renew- occur at least for with and we do hope that three was actually our best huge part in the is fuelling That will con-
this power. They also mentioned that ery happens both in terms of consump- ables and most of the states the next few Tata Power can contribute quarter; we grew volumes big margin out- industrial growth.’ tinue for the next
they are working on resolving this issue. tion by the industries as well as by the are making the payment. quarters.’ a lot in the reform process double digit, we grew value by performance three to six
There were some delays in some of residential users and domestic users – In fact, many of them have of discoms. about 17%. that we have months.
the states especially in Maharashtra we will see an upside on the consump- opened the LC also and we You have got Odisha dis- The very fact that we have seen this time around. How significant is the
where the government was formed and tion patterns in the coming months. expect that going forward our receiva- com. Should we expect some grown in volume is a little bit What is the trend on your waterproofing business for
the new minister has taken charge just a Can you give us an update on what is bles will drastically improve from all the announcement shortly on another of a green shoot, but frankly I key raw material VAM for you currently and what is
few weeks back. happening in the renewable busi- states. discom win? would wait for at least the next the next quarter? the rate of growth there?
All the states are working towards ness. The performance has been For distribution companies (dis- Yes, Odisha discom is huge. It is two quarters before declaring Currently input prices con- We are clear it is a growth
resolving this. Ministry of power has steady there but receivables have coms) in general, do you think there 30,000 square kilometers and 27 lakh that, yes, there is some kind of tinue to be benign and yes business, it is a business where
given a very strong statement to them gone up to around ₹1,100 crore. is any relief as far as receivables are consumers. So we need to take it from 1 recovery. given the fact that we are we compete more against non-
that you need to resolve this otherwise What is the outlook now and is concerned because now I under- April and stabilize the operation but we At Pidilite we have always already in quarter four and consumption rather than
the plant may not continue to operate there a possibility of renewables stand the dues are over ₹80,000 definitely are bidding for the other 3 dis- maintained that we corelate therefore we have pretty much against any other company.
and in case you have any shortfall going into Infrastructure Invest- crore. Any relief for the discom coms that are going for privatization in very well to gross domestic bought for quarter four, they Waterproofing penetration
because of this plant not operating, we ment Trusts (InvITs) anytime soon? woes and what about these schemes Odisha. The north, south and the west product (GDP) growth and continue to mirror the trends in India, out of 10 homes it has
will not be supporting you with any Our renewable portfolio is doing very Ujwal DISCOM Assurance Yojana and we are expecting that some of the therefore any improvements of quarter three. built, at best four homes do
additional power during the summer well. We have added nearly 400 mega- (UDAY) and Atal Distribution other states who have already appointed in economic growth and in However, as I always say, we proper waterproofing. There-
months. watt in last 12 months and that has Transformation Yojana (ADITYA). consultants. Those will also come up for GDP growth will always live in a volatility, uncertainty, fore, as far as the long run is
We definitely expect that all the states helped us to improve our Ebitda – our Will it do any good? privatization and we will definitely be impact us positively. complexity and ambiguity concerned, we see it abso-
within this quarter should take a deci- Ebitda for renewables has gone up by The new scheme, ADITYA, which is bidding in many of them. Having said that, we are (VUCA) uncertain world and lutely as a growth area.
sion and there is a sense of urgency that nearly 15% and we see that consistently expected to be announced either in the feedback@livemint.com obviously taking a whole set of therefore what is going to hap- feedback@livemint.com

Patanjali’s competitive intensity has abated, says Dabur CEO Mohit Malhotra
Surabhi Upadhyay & for us but the moment we very upbeat at the moment. includes our fruit concentrates, seen to be turning the corner Patanjali has got huge port-
Anuj Singhal entered the month of Novem- What should we expect on herbs, spices, sugar, all those that has grown by 10.8% which folio, oral care being one of
ber, we saw the volume growth margins? You have hit the are seeing an uptick in the price is a great news. them and I think they are hold-
CNBC-TV18 plummet further and Decem- 21% number. Can that be which is also getting reflected We revamped the entire ing fort in oral care. Except for
ber has been the worst month sustained? What is happen- in the CPI which is 7.35% and so Babool franchise. We launched oral care they have also

T
here could be pain for a that we have ever seen in ing on the raw material we will also witness a inflation a Babool Ayurvedic that has impacted us in couple of other
few more quarters before almost 10-15 quarters. front? of 3-4%. However, we will want also grown after around 10-15 categories like Chyawanprash,
there is a revival, says However what we have done Raw material till now we to maintain our margins defi- quarters. Suddenly we have honey.
Mohit Malhotra, chief execu- is some fundamental work have had very benign raw nitely. now seen a growth on back of There we have more than
tive officer of Dabur. Edited without considering what is material prices, so there has Have you gained market all the marketing activities that compensated the share that we
excerpts: happening on the extraneous been a margin upside. There is share at the expense of Col- we have done. We have grown have actually lost so the com-
It has been a good perform- factors and which seems to be 80 basis points increase in our gate or Patanjali and any by 5%. Even Meswak has regis- petitive intensity of Patanjali
ance considering the envi- paying off for us and the consol- gross margins and this increase numbers on that front? tered growth. has abated, but we have to con-
ronment. Your volume idated revenue growth that you in the gross margin was on back Our oral care business has So we have seen a secular tinuously watch and we cannot
growth has beaten street see of around 7% backed by vol- of benign raw material prices done very well and this growth growth in entire oral care. be very complacent. In oral
estimates. What visibility ume growth of 5.6%, our oper- which is what we have invested in oral care that Overall the oral care they are still holding on.
do you have? Have we ating margin is up by 10.7%, behind brands and therefore we have seen is care category for What will that mean for
turned the corner when it PAT is up by 8.7%, that is also brands have actually surged in secular across our ‘We are waiting us has grown by your advertisement strat-
comes to rural growth? because of exceptional item terms of market share. portfolio. with bated breath 8.4%, whereas the egy and your ad spends?
We have got a otherwise it would We are witnessing some Our flagship for the govt to category per se So whatever upside in the
good set of numbers INTERVIEW have been up by inflation in the agri basket as we brand, R e d announce budget, has declined by margin will be investing behind
looking at the very 12.8%. Mohit Malhotra, CEO, Dabur. PRADEEP GAUR/MINT enter into the fourth quarter. Toothpaste has 3%. If you see who our brands and that is what we
and some fiscal
challenging environment So, we are very happy with However we are pretty much gained 80 basis is the major player have done. Our overall ad
where we are. the numbers but to answer it could be a case that Janu- terms of volume, toothpaste is covered for the fourth quarter, points market stimulus for the there it will be spends have gone up by 15%
I do not think we have actu- your question have we turned ary to March quarter would negative 3% in volume terms, so in the fourth quarter our share and now sits rural consumer, Colgate more and we will stay course on this
ally turned the corner because the corner, the answer is not be sequentially much worse juices segment is negative 11%. margins will be pretty stable if at all time high which should than 50% market strategy and that has given us
sequentially quarter after quar- really. Things are seemingly than the quarter gone by? So things are sequentially actu- not expanding. breaching the 10 revive sentiment.’ share. rich dividends across all cate-
ter we are seeing that slow- getting worse. Yes, if you extend the trend ally becoming worse and we are Going forward into next fis- percentage So we have gories.
down is actually becoming I think there will be pain for line that we have seen. I told waiting with bated breath for cal we will have to consider cali- points, so we are taken market We have gained market
severe. another couple of quarters you we entered the quarter the government to announce brated price increases because at 10.4% market share in our shares from our competitors. share across all the categories
The FMCG growth in the before we see the revival going with 6.6% growth and if you see the budget and hopefully there of slowdown environment, so Red Toothpaste. However, Patanjali seems to be where Dabur is existing. So in
industry which used to be 16%, forward in the next fiscal year. the December numbers 6.6% will be some sops and fiscal we cannot take reckless price Surprising thing for us is we still holding fort and the high- Chyawanprash we have gained
now sits at 6.6%. When we This fiscal I do not see the has become 5.3% and if I extend stimulus for the rural consumer increase also, so we will have to were taking a punt we invested est growing herbal toothpaste 300 basis points, Dabur Real
entered the third quarter we revival in the foresight. that line forward it could actu- and should revive the rural sen- be very calibrated and watch money behind our flagship in the category is Dant Kanti. which is outlier in terms of
thought that because of festive That is a very interesting ally become worse. In couple of timent. the competitive intensity brand which got extend into You are saying that the decline of 1.7, market shares
season things would turn and point you make that Decem- categories where we are Today we see down trading before we take price increases red which is Lal Dant Manjan. Patanjali threat is not over have actually improved by 500
we saw some greenshoots and ber was the worst. So, in that present, we are in the red zone. happening across the market, but definitely agri basket which We invested money behind it yet for the two major play- basis points.
the volumes actually picked up case if I were to extrapolate, Hair oil is negative 8% in so things are really not looking includes our edible oil, which taking a celebrity that also has ers? feedback@livemint.com
 POLITICS FRIDAY, 31 JANUARY 2020
NEW DELHI 19

B-school final placements off to a R O OT

CAUSE
strong start, average pay up 15% SUDEEP CHAKRAVARTI

Read Sudeep Chakravarti’s earlier columns at

livemint.com/rootcause

Strategy and consulting, banking and financials, IT companies top recruiters at leading business schools
OPTIMAL DELIVERY
Prashant K. Nanda At IIM Kozhikode at least 29% of
OR MERE OPTICS IN
prashant.n@livemint.com
NEW DELHI
the offers were made by consult-
ing firms. At IMI Delhi consulting
firms and IT (including e-com-
BODO PEACE DEAL?

B-
schools are wit- merce) companies made 56% of

O
nessing a strong the total offers (28% each). Govt to get ptics? Or optimal delivery? The Bodo peace deal poses
over
beginning to the The ongoing placement season ₹39,500 cr
tricky questions for India in general and far-eastern India
final placement is “reflective of” what “quality under Sabka in particular. The deal was announced on 27 January in
season, after the B-schools such as IIM-Kozhikode Vishwas New Delhi in an attempt to bring closure to a conflict in the
Indian Institutes of Technology have achieved over the years” in Scheme homelands of the Bodo people—or Boro, as they call them-
reported a strong season, and a terms of talent credibility, said bit.ly/37Gxrzm selves—in Assam. A formal surrender-and-integrate ceremony
couple of Indian Institutes of Man- Debashis Chatterjee, director, IIM is intended for later this week.
agement (IIMs) announced that Kozhikode. On the face of it, fine. Four factions of the National Democratic
they have placed all their outgoing The top recruiters at B-school Front of Bodoland (NDFB), along with an influential Bodo stu-
students. campuses include Accenture, dents’ organization and a Bodo civilian pressure group, signed
IIM Lucknow and IIM Kozhik- Amazon, Cisco, Reliance Jio, Bain the peace agreement with the central and Assam governments.
ode have announced the comple- and Company, Boston Consulting Among other concessions, the Bodoland Territorial Area Dis-
tion of the placement process in Group, Dalberg, Deloitte India, tricts, the name given to Kokrajhar, Baksa, Chirang and Udalguri,
just five days. Top private E&Y, KPMG, McKinsey & Co, Flip- the four contiguous districts bordering Bhutan and Arunachal
schools, including Bharatiya kart, PWC India, Avendus Capital, Pradesh, will now be known as Bodoland Territorial Region.
Vidya Bhavan’s S.P. Jain Institute Royal Bank of Scotland, Siemens The changed nuance from districts to region is significant as
of Management and Research Management Consulting and ZS it acknowledges a Bodo homeland within the state of Assam,
(SPJIMR), Mumbai, Indian The robust beginning to an eventful B-school placement season does not reflect the overall jobs market in India. HT Associates, Goldman Sachs, Mic- without separating from Assam. This is dialled down from earlier
School of Business (ISB) in rosoft, Nomura, Uber, GE Health- rebel demands for a breakaway state and later suggestions for
Hyderabad and Mohali, and the SPJIMR, the average salary was lakh per annum. Trade (IIFT), were also witnessing care, Asian Paints, Bajaj Auto and Union territory status.
International Management Insti- ₹26.36 lakh per annum, growing The final placement processes good initial response from recruit- Google. The renaming is designed to satisfy the identity and aspirations
tute (IMI) and Fore School of 15% from the last season. at IIM-A, IIM-B and IIM-C will ers. The robust beginning to an of the Bodo people, as well as solve the politically tricky matter
Management in New Delhi, have IIM Lucknow said its batch of start in February. Strategy and consulting, bank- eventful placement season in of ceding territory for the Bharatiya Janata Party (BJP)-led gov-
either completed the process or 443 students was placed in more Other IIMs and private ing and financials, and informa- B-schools, however, does not ernment of Assam. Ceding territory would set off the Assamese
are on the verge of doing so. than 100 firms with an average sal- B-schools, including IIM Indore, tion technology (IT) firms have reflect the overall jobs market in chauvinist and territorialist, as it were, and could trigger similar
Leading B-schools said been the top recruiters. India. If anything, it reflects the demands in other parts of Assam, such as Karbi Anglong, Dima
the average salary offer ON A HIRING SPREE At ISB, consulting firms upcoming appraisal season in pri- Hasao and Cachar, which also have homelands of non-Ahom eth-
was up by 7% to 15% from made 22.75% of the total vate organizations, besides high- nicities.
the last placement season. TOP B-schools said IIM Kozhikode’s AT SPJIMR, average FINAL placements offers, while IT and lighting that companies are ready Indeed, it could also affect the ongoing Naga peace process,
IIM-Kozhikode said that the average salary
offer was up by 7%
average package
rose from ₹20.6 lakh
salary was ₹26.36 lakh at IIM Ahmedabad,
per annum and at IIM Bombay and
IT-enabled services sec- to pay a premium to attract quality leading Naga rebels to demand territorial and administrative
the average salary packa- to 15% from the last per annum in 2019 IIM Lucknow it was IIM Calcutta will tors made 15% of the total talent from top institutions even autonomy in Naga homelands in Manipur, which will trigger a
ges increased from ₹20.6 placement season to ₹23.08 lakh ₹24.25 lakh per annum start in February offers. At IIM Lucknow, amid a tough employment sce- firestorm of politics, and ethnic ten-
lakh per annum in 2019 to strategy and consulting nario. Recent government data It is to be seen sion between the Nagas and the Meitei,
₹23.08 lakh per annum. jobs were taken up by shows that India is facing a four- if the pact will the largest ethnic group in Manipur
The B-school said in an email that ary of ₹24.25 lakh per annum. IIM Rohtak, Birla Institute of Man- 32% of the students, operations decade high unemployment rate whose language, culture and history
its outgoing batch of 413 students At ISB, the average annual sal- agement Technology (BIMTECH), and IT jobs went to 24%, and and job creation has not been able lead to true dominate the state.
was absorbed by 131 recruiters. At ary offered this year was ₹26.15 and the Indian Institute of Foreign finance firms made 19% offers. to keep pace with market demand. autonomy, true There is already an inherent vulner-
peace, and true ability to the Bodo peace deal even
development without the overhang of ceding terri-
tory. This is rooted in the birth of the
Bodo rebellion, which began in the
1980s not on account of slights from India, but administrative and

Supreme Court dismisses Delhi gang rape Saying ‘Yeh lo Azadi’, man development apathy of the state of Assam, and a feeling that
Bodo, the people, the language, the identity, were subsumed by
the Assamese and migrants. The initial demand for Bodoland,
fires at CAA protesters which grew out of a students’ movement (in much the same way,
convict’s curative petition against death row FROM PAGE 1
PRADEEP GAUR/MINT
ironically, as a movement led by students in Assam that later
birthed armed rebellion by the United Liberation Front of Asom),
came even earlier, in the early 1970s.
This vulnerability extends to other parts of Assam and far-east-
Prathma Sharma issued notice to Tihar jail provocative speeches, Union ern India and indeed any geography in India that either has active
prathma.s@livemint.com authorities asking them to minister of state for finance conflict, or has neutralized conflict with military or policing dom-
NEW DELHI reply on Friday on a plea of Anurag Singh Thakur and BJP inance and now hopes to seed positivity with governance and
death row convicts in the case, Lok Sabha MP Parvesh Sahib development. How much independence will Bodoland Territo-

T
he Supreme Court on
Thursday dismissed a
curative petition filed by
Akshay Kumar Singh, one of
the four death row convicts in
the 2012 Delhi gang rape and
murder case.
Singh is one of those who
have been convicted of brutally
gang-raping and fatally assault-
ing a 23-year-old physiother-
apy intern in a moving bus in
south Delhi on 16 December
2012.
“The application for oral
hearing is rejected. The appli-
cation for stay of execution of
the death warrant is also
rejected. We have gone
through the curative petitions
and relevant documents. In our
opinion, no case is made out
within the parameters indi-
cated in the decision of this
court in Rupa Ashok Hurra v
Ashok Hurra and another.
Hence, the curative petitions
are dismissed,” said a five-
judge bench comprising Justi-
seeking stay on their execu-
tions, which is scheduled for
6am on 1 February.
The top court had on
Wednesday dismissed a plea by
Mukesh Kumar Singh, another
of the death row convicts in the
case, against the rejection of his
mercy petition by President
Ram Nath Kovind on 17 Janu-
ary.
Vinay Sharma, the third con-
vict, also had his curative peti-
Akshay Kumar Singh, one of the death row convicts, was seeking tion rejected by the apex court.
a stay on his execution scheduled on Saturday. HT His mercy plea is pending
before the President. Pawan
ces N.V. Ramana, Delhi court issued Hurra v Ashok Gupta , the fourth convict, has
Arun Mishra, a notice to Tihar Hurra case, where not filed any plea.
Rohinton Fali jail authorities the question was The four are among the six
Nariman, R. Ban- asking them to whether an who had been convicted of bru-
umathi, and aggrieved person tally raping and assaulting the
reply by Friday
Ashok Bhushan. was entitled to physiotherapy intern. One of
A curative peti- on a plea of death any relief against a the accused, Ram Singh, died
tion is typically row convicts dismissal of in Tihar Jail on 11 March 2013.
the final judicial review petition by Another accused, a juvenile,
remedy available the apex court. was given three years’ impris-
to a person convicted by courts. Singh can now seek mercy onment in a reform facility, the
The concept of a curative peti- from the President. maximum sentence under with
tion evolved in Rupa Ashok Meanwhile, a Delhi court the Juvenile Justice Act 2000.
Singh Verma, were on Thurs-
day pulled up by the Election
Commission (EC).
The poll panel ordered a tem-
porary ban on the two, finding
their speeches violative of the
model code of conduct.
Thakur has been banned
from campaigning for 48 hours
from 5pm on Thursday, while
Verma cannot campaign for 96
hours. On Thursday, EC sent
another show-cause notice to
Thakur.
EC felt that the statements by
the two leaders had the poten-
tial of aggravating “existing dif-
ferences” or “create mutual
hatred between different com-
munities” and said an earlier
order of keeping them out of
BJP’s star campaigners list will
remain in force.
Hours before EC’s order,
Delhi chief minister and AAP
national convener Arvind Kejri-
wal made an emotional appeal
at a news conference on the
controversial remarks by Verma
Protesters demonstrate
against the shooting and the
citizenship law, near Jamia
Millia Islamia, on Thursday.
and said it was up to the people
of Delhi to decide if he (Kejriwal)
was a “terrorist”.
Senior AAP leaders also
approached EC and filed a com-
plaint against the “seditious”
comment made by Verma.
The party has demanded that
an FIR be registered against
Verma and BJP Delhi state chief
Manoj Tiwari for their com-
ments.
anuja@livemint.com
Shaswati Das contributed to
this story.
rial Council, which is now nominally responsible for administra-
tion and development, and which has purse-strings and political-
strings tied to Dispur, Assam’s capital, be accorded?
The Kokrajhar-based council has elections due for its next five-
year term. Elections were last held in April 2015. The Bodoland
People’s Front, the civilian avatar of the Bodoland Liberation
Tigers that signed a peace deal in 2003, a deal which led to both
the birth of the council and continuing rebellion by factions of
NDFB, is in majority in the council. Will the front be comfortable
with newly peaceable colleagues of NDFB?
Will the BJP, which is certain to again contest elections to the
council and try to increase its tally from one seat, emerge as the
pivot? Will the ₹1,500 crore promised to the Bodo territory as
part of the peace deal, the amount to be shared equally by the cen-
tral and Assam governments and disbursed over three years, lead
to real development? Or will it continue to provide candy for the
council and Assam’s paymasters, who oversee the Bodo region
that includes some of the most under-developed districts in
Assam?
What of non-Bodo people, mainly Bengali-speaking Muslims
and migrants, who were attacked and killed in large numbers
during elections in 2014? And the Adivasi community attacked
by Bodo rebels later that year, around Christmas? And the mas-
sive violence that broke out with Muslim settlers in Bodo areas
in 2012?
True autonomy, true peace, and true development are always
worth more than the paper on which they are promised.
This column focuses on conflict situations and the convergence
of businesses and human rights.

“Electric vehicles will become much cheaper than combustion

m SHORT TAKES vehicles in three years. The price of battery packs of EVs is
Sri Lankan PM Rajapaksa to PNB fraud case: Nirav Modi to
expected to fall to $76 per kilowatt hour (or unit) in three years, visit India from 7-11 February appear for remand hearing in UK
down from the present-day $156 per unit,” he said. Reaffirming
Govt to sell imported onion at up to the national vision towards moving to clean mobility, Kant said,
BLOOMBERG
London: Fugitive diamantaire
ANIRUDDHA CHOWDHURY/MINT

₹23 per kg to avoid rotting at port
New Delhi: The Centre may soon offload imported onions at a
MINT highly subsidized rate of
₹22-23/kg to prevent rotting of
the perishable kitchen item at
ports, said people familiar with
the matter on Thursday.
A large quantity of imported
onion is still lying at ports as
many states did not show inter-
est to lift the commodity at high
rates at a time when retail prices
started cooling down on arrival
of fresh crop, they said. PTI
EVs to be cheaper than combustion
vehicles in three years, says Kant
New Delhi: Electric vehicles (EVs) will become cheaper than
combustion vehicles in three years as the price of battery packs
of EVs is expected to fall by almost 51% per unit, NITI Aayog chief
executive officer (CEO) Amitabh Kant said on Thursday.
given its size and scale of growth potential, Indian industry must
be the biggest driver of change to make the country the centre for
manufacturing EVs. PTI
Petrol and diesel prices to go up
by ₹0.50-1 per litre from April
New Delhi: Petrol and diesel prices may go up by 50 paise to ₹1
per litre beginning April when India leapfrogs to using Euro-VI
emission-compliant ultra-clean auto fuels. Currently, BS-IV
MINT grade fuel—equivalent to
Euro-IV emission-compliant
fuel—is being supplied in the
country and the government
decided to leapfrog to BS-VI
grade fuel from April 2020 to
cut vehicular emissions.
“We are 100% sure that pet-
rol and diesel in the country
will be
from 1 April,” said Sanjiv
Singh, chairman of Indian Oil
Corp. Ltd. PTI
Nirav Modi, fighting extradition
to India on charges over the
nearly $2 billion Punjab
National Bank (PNB) money
laundering case, is to be pro-
duced for a hearing at West-
minster Magistrates’ Court in
London on Thursday.
The 48-year-old, who has
been lodged at Wandsworth
Prison in south-west London,
will appear via videolink from prison. PTI
New Delhi: Sri Lankan Prime Minister (PM) Mahinda
Rajapaksa will visit India from 7-11 February, during which
he will hold extensive talks with his Indian counterpart Trade helps US economy grow
Narendra Modi. “The visit is in continuation of the tradition
of high-level exchanges between India and Sri Lanka,”
2.1%, but consumption slows
external affairs ministry spokesperson Raveesh Kumar said
during a media briefing. Washington: US consumer spending moderated and business
A host of issues including fulfilling the aspirations of the investment continued to deteriorate at the end of 2019, while a
Tamil community in Sri Lanka, the situation in the Indian smaller trade deficit and more home construction helped keep
Ocean region and ways to boost defence and trade ties, are economic growth steady.
expected to figure in the talks between Modi and the Sri Gross domestic product expanded at a 2.1% annualized rate in
Lankan PM. PTI the October-December period for a second straight quarter,
according to Commerce Department data Thursday. BLOOMBERG
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 27 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR)

DABUR CEO ON REVIVAL HOPES, SRI LANKAN PM RAJAPAKSA TO

FRIDAY, JANUARY 31, 2020 THREAT POSED BY RIVALS uP18 VISIT INDIA FROM 7-11 FEB uP19
LIVEMINT.COM

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B-school hiring off

TWITTERVERSE
to a strong start At all-party meet ahead of budget session, PM says govt will discuss all issues raised by the Opposition
Leading B-schools said
the average salary offer
was up by 7% to 15% Gyan Varma & Anuja attention towards the sinking
from the last placement economy, rising unemployment
NEW DELHI
season. See Page 19
and Kashmir. We told them Farooq

SC dismisses Delhi
rape convict’s plea
SC dismissed a curative
plea filed by Akshay
Kumar Singh, a death row
convict in 2012 Delhi gang
rape case. See Page 19
Petrol, diesel rates
to go up from April
Petrol and diesel prices
may go up by 50 paise to
₹1 per litre beginning
April when India shifts to
BS-VI fuel. See Page 19
Bodo pact: optics or
optimal delivery?
The Bodo peace deal
poses tricky questions
for India and far-eastern
India, writes Sudeep
Chakravarti. See Page 19
A
day before the start of
Parliament’s budget
Food session, Prime Minis-
ministry
seeks over
ter Narendra Modi
₹2 trillion pointed to the impor-
for food tance of the economy at an all-party
subsidies in meeting, adding that there should
next fiscal
be greater focus on how the global
bit.ly/2GDsLhC scenario could be turned in favour
of India.
At the meeting called by the
National Democratic Alliance
(NDA) government, Modi made
clear the government was ready to
discuss all issues raised by the
Opposition.
According to parliamentary
affairs minister Pralhad Joshi, the
prime minister, in his concluding
remarks on the economy, spoke of
how India could take advantage of
the situation, keeping the global
perspective in mind.
A statement released later said
Modi highlighted that a discussion
on the economy would be in the
best interest of the country. “In this
budget session and in the begin-
ning of the new year, if we can give
a proper direction to the country’s
economy, it would be in the best
interest of the country,” he said,
according to the statement.
Joshi said 26 political parties
attended the meeting. Another
round of an all-party meeting was
called by Lok Sabha Speaker Om
Abdullah should be released so that Narendra Modi
he can attend Parliament and that @narendramodi
the government also release other
The accord between the
political leaders.” Bodo groups & Govt will
The budget session is expected strengthen the unity &
to witness fireworks over the state integrity of Assam. I
of the economy, unemployment,
welcome decision of my
detention of political leaders and Bodo friends for leaving
internet curbs in Jammu and Kash- violence & reposing
mir and issues related to NRC and faith in democracy &
NPR in the North-East. This is the Constitution.
first full budget session after Modi
returned to power, and could see P. Chidambaram
the announcement of key policy @PChidambaram_IN
initiatives, which the Centre wants The correct tax to cut is
to push in the next five years. GST, but the govern-
Pressure also comes from Bihar ment has tied itself in
chief minister Nitish Kumar, also knots that it cannot find
Prime Minister Narendra Modi with Union ministers and Opposition leaders, in New Delhi on Thursday. PTI the president of JD(U). Kumar has a way to cut the GST
asked the government to make rates.
Birla in the evening to ensure the (NPR). Among the parties within ered about the people protesting changes to the NPR forms and drop
smooth functioning of Parliament. NDA that have spoken out against on streets over CAA-NRC,” said at least 4-5 columns that deal with
Although an all-party meeting CAA and the National Register of Ghulam Nabi Azad, leader of the the names of parents and place of
precedes every session of Parlia- Citizens (NRC) are Janata Dal Opposition in the Rajya Sabha and birth of parents. He has already
ment, there is a senior Congress announced that JD(U) parliamen-
sense of urgency ON THE AGENDA leader. “This tarians would urge the government
this time given shows their arro- to drop these questions from the
ongoing protests MODI said a HE said there should APART from CAA gance. They are NPR form because it is sending a Sitaram Yechury
against the imple- discussion on the
economy would be
be focus on how the and economy, Oppn
global scenario could wants to discuss
not bothered message that this information @SitaramYechury
mentation of the in the best interest of be turned in favour about farmers too. would be used for NRC. The best tribute to
Kashmir, jobs crisis,
C i t i z e n s h i p the country of India. farmers’ distress The Opposition The budget session is also crucial Mahatma Gandhi on
(Amendment) Act, wants that these because the Delhi assembly elec- Martyrs Day is to pledge
or CAA. Most issues be discussed tion results will be out in the middle once again to defeat the
Opposition parties, along with (United) and Shiromani Akali Dal too and the government should be of the session on 11 February and majoritarian forces in
some members of the NDA, have (SAD), the two oldest allies of the sensitive about it. The Union gov- will impact the functioning of the India that are still trying
raised doubts about both CAA and Bharatiya Janata Party (BJP). ernment is focused only on getting session. to kill his ideas.
the National Population Register “The government is least both- bills passed, but we also drew their gyan.v@livemint.com

SC to fix modalities for As European Parliament defers vote, Delhi says CAA ‘internal matter’
hearing case on faith, Elizabeth Roche
elizabeth.r@livemint.com
the voting and get a direct per-
spective about CAA from
sage could have been awkward The EU resolution also
for Modi as it would have come expressed concerns over
Indian foreign minister S. Jais- ahead of the India-European India’s National Register of Cit-
equality on 3 February NEW DELHI
hankar, who is scheduled to Union summit. izens (NRC)—an exercise

I
ndia on Thursday said it had visit Brussels in the coming The Strasbourg-based Euro- aimed at identifying illegal
taken note of the decision by weeks. pean Parliament was expected immigrants—marking a shift in
the European Parliament to The European Parliament’s to vote on a final the way citizen-
Japnam K. Bindra defer voting on a resolution move to vote on the resolution joint resolution on Jaishankar is ship will be deter-
japnam.b@livemint.com against the Citizenship was earlier opposed by India, CAA put forward scheduled to visit mined in India,
NEW DELHI (Amendment) Act, or CAA, and which said that “as fellow by more than 500 Brussels to prepare thereby creating
would continue to engage with democracies, the EU Parlia- of its 751 members the ground for “a large-scale cri-

T
he Supreme Court on
Thursday indicated that
the nine-judge bench set
up to examine the scope of judi-
cial review when religious faith
and women’s equality are at
odds, like in the Sabarimala
case, will assemble on 3 Febru-
ary to frame issues and prepare
schedules for the hearing.
Chief Justice S.A. Bobde told
senior advocates V. Giri, Arvind
Datar, and Indira Jaising that
“we are disappointed that you
have not arrived at a consensus
(on issues to be considered).”
The Constitution bench will
pass orders with respect to the
“case management”, fixing
timelines and other modalities
related to the case on Monday,
said Chief Justice Bobde.
Senior advocate Abhishek
Manu Singhvi and solicitor
general Tushar Mehta will also
be arguing the case, along with
other senior advocates.
The Supreme Court bench
SC had said that the bench
will not decide anything on the
Sabarimala review petition, but
deliberate on larger issues. PTI
Parsi women in Towers of
Silence.
When Jaising submitted that
she will be arguing on the inter-
section between gender and
Constitution, Chief Justice
Bobde said: “It will not be pru-
dent to allow two lawyers to
argue the same issue…Our
objective is to try and settle
issues, which will then impact
the individual cases later on.”
The CJI had on Tuesday
the European Union (EU) par-
liamentarians to make them
understand that it is India’s
“internal matter”.
New Delhi had also taken
note of the European Commis-
sion’s clarification that the
European Parliament’s views
did not reflect the official posi-
tion of the grouping, said for-
eign ministry spokesman Rav-
eesh Kumar.
“As I have mentioned earlier,
the CAA is an internal matter of
India. It has been adopted
Home ministry, Isro team up to boost internal security surveillance system
Shaswati Das
shaswati.d@livemint.com
NEW DELHI
European lawmakers have agreed to postpone the voting against
CAA and get a direct perspective from foreign minister S. Jaishankar.
through due process and demo-
cratic means. We will continue
to engage with the MEPs (mem-
bers of the European Parlia-
ment) and other stakeholders in
this matter,” he said.
India had reached out to
almost all countries of the eco-
ment said the ministry, in col-
laboration with the Indian
Space Research Organisation
(Isro), is working on a state-of-
nomically powerful bloc to per-
suade them against adopting a
resolution against the CAA, one
person familiar with the devel-
opments said, requesting ano-
nymity.
As a compromise, European
lawmakers agreed to postpone
ment should not take action from five different sis of statelessness
Modi’s visit for a
that call into question the rights groups, on and causing
and authority of democratical- grounds that it summit with the immense human
ly-elected legislatures in other was discrimina- EU bloc in March suffering”, news
regions of the world”. tory against Mus- reports said.
Jaishankar is expected to pre- lims and violates The European
pare the ground for Prime Min- India’s international obliga- Parliament resolution had
ister Narendra Modi’s visit to tions, news reports said. described the CAA as “funda-
Brussels on 13 March for a bilat- The new citizenship law mentally discriminatory in
eral summit with the 28-mem- passed by the Indian Parliament nature” and violative of interna-
ber bloc. The European Parlia- in December 2019 offers citi- tional guidelines on human
ment resolutions do not affect zenship to non-Muslim perse- rights and called on the Indian
the decisions of the European cuted religious minorities from government to “repeal the dis-
Council or European Commis- Pakistan, Bangladesh, and criminatory amendments”,
sion, but the timing of its pas- Afghanistan. according to reports.
into the most remote corners, for Defence Studies and Anal-
using highly sophisticated yses.
technology so that any suspi- The home ministry did not
cious movement can be disclose the name of the satel-

also comprising Justices B.R.
Gavai and Surya Kant observed
that the chart on the draft
issues submitted by Giri will
also be considered.
Jaising submitted before the
bench that there were about 11
senior lawyers appearing for
the petitioners and they were of
the view that the court should
not interfere in matters of reli-
gion. “I am a part of the few on
the other side. I would need
some clarification regarding
which issue is being argued and
by whom,” said Jaising.
She added that there seems
to be certain suggestions that
senior advocate Fali S. Nariman
would argue on the entry of
fixed a 10-day period to com-
plete the hearing of petitions
seeking women’s entry to
Sabarimala temple, mosques
and Parsi Agiyari.
On 13 January, the last date of
hearing, Bobde had said that
the bench will not decide any-
thing on the Sabarimala review
petition, which seeks to over-
turn the court’s order uphold-
ing the rights of women of
menstruating age to offer
prayers at the hill shrine in Ker-
ala. Instead, the court will
deliberate on the larger issues
pertaining to the matter. “We
are not hearing the review peti-
tion—only sticking to the larger
issues,” said Bobde.
S
pace scientists, defence
researchers and the
home ministry are pre-
paring satellite maps of all sen-
sitive areas, a project that will
set India’s security parameters
several notches higher.
In tandem, the Indian
Army, too, has beefed up its
anti-infiltration grid along the
Pakistan border, while the
Border Security Force (BSF)
has stepped up surveillance
along the border with Paki-
stan and Bangladesh. How-
ever, infiltration from across
the border along the Line of
Control remains a threat.
Senior home ministry offi-
cials familiar with the develop-
the-art surveillance system.
“There will be constant sur-
veillance at all areas of interest,
particularly sensitive border
areas where infiltration
attempts are higher. All such
areas will be optically visible—
this means that areas that are
all above ground will be
manned by the satellite,” said a
an official, requesting ano-
nymity.
While the modalities of the
project are still being finalized,
the ministry’s Technical Con-
sultancy Group is marking out
areas which will be under sat-
ellite surveillance.
“The next war will be cyber
warfare. We are developing
tracked by security forces,” he lite that will be used. However,
added. earlier this
Isro did not Home ministry month, Isro’s Car-
reply to queries and Isro scientists tosat-3 satellite,
till press time. are working on a launched in
Experts said project that November 2019,
such high resolu- released images
tion data will bol-
uses satellite of sites in Qatar,
Satellite images of Qatar captured by space agency Isro’s ster India’s ability imagery to man which were cap-
Cartosat-3. The government has not yet disclosed the name of to man border all sensitive areas tured by its pan-
the satellite that will be used for the surveillance project. areas. “Data chromatic (PAN)
indigenization is cameras.
capabilities in this regard. We general A.P. Maheshwari said . the most crucial element in Cartosat-3 has PAN cameras
are also involving and upgrad- A second home ministry achieving and maintaining with a ground resolution of
ing ourselves on space tech- official said the government data sovereignty. The entire 25cm, the highest-ever
nology, UAVs (unmanned aer- was “capitalizing on all availa- chain of command will operate achieved by India. This means
ial vehicle), surveillance tech- ble technologies to ramp up from one map sheet so to say,” that the satellite can detect a
nologies, etc., so that we are internal security surveillance”. said D.P.K Pillay, former feature of that size (25cm) from
ready for the future,” Central “The satellite imagery will Indian Army officer and a height of 506km, where the
Reserve Police Force director have the capability to zoom research fellow at the Institute Cartosat-3 is placed.