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 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 192

MONDAY, AUGUST 10, 2020

LIVEMINT.COM

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mint primer
QUICK EDIT
The repo rate cut For safe
cycles help PSBs landings
shore up capital It will take some time to pin-
point the cause of Saturday’s
crash landing at Kozhikode air-
BY VIVEK KAUL port by an Air India Express air-
craft. Its black boxes have been
The Reserve Bank of India (RBI) on Thursday decided to keep the
repo rate or the interest rate at which it lends to banks, at 4%. In his recovered and will aid an inves-
new book, former RBI deputy governor Viral Acharya explains why tigation that might look into
the government loves the cycle of repo rate cuts. Mint takes a look. such questions as whether its
pilot was misled on wind speed
Spillover effect under poor visibility. Planes
In June 2020, inflation, as measured by the consumer price index stood at 6.1%, must ideally land into the wind,
while the repo rate is at 4%. The fixed deposit (FD) interest rate is between and a miscalculation could
5%-6%, which means that people are losing money by investing in FDs. result in the kind of faulty
Inflation as measured by the consumer price index (in %) touchdown and runway over-
8
shoot that appears to have hap-
7
6.1
pened in this case. Given the
6 heavy rain, aquaplaning may
5.1 have played a role in the disas-
5
ter too. Various other theories
4
abound. Whatever caused the
3 crash, it’s a wake-up call for us
2 to review the safety of our short
tabletop runways. It’s not just
1
Jan 2018 Jun 2020 Kozhikode, several other air-
Source: Centre for Monitoring Indian Economy ports have these as well.
Since fly-by-wire technolo-
What does Acharya What is the problem gies and air traffic control sys-
1 say in his book?
Viral Acharya writes in Quest for
2 with repo rate cuts?
The government is trying “to keep
tems are evidently still not up to
scratch, perhaps it’s time to
Restoring Financial Stability in the budgetary allocation for public either extend these runways or
India: “Rate cuts are preferred … sector banks’ capital needs low”. tighten the conditions under
whereas rate hikes are particularly Repo rate cuts help in doing that. which landings are given the
disliked.” Now, this is primarily When the repo rate is cut, the go-ahead. Mangalore airport
because the government is a major value of the government bonds has had a similar accident in the
owner of the public sector banks held by the state-owned banks
past but, sadly, our safety levels
(PSBs). These banks, in particular, goes up. This is because when
have been in a mess for the last 10 interest rates go down, bond prices don’t seem to have improved
years. As a result, they have go up and vice versa. When bond much since then. If flying pro-
accumulated a huge amount of bad prices go up, the PSBs end up tocols need revision, so be it.
loans, or loans that have not been making profits. This profit is Indian aviation deserves better.
repaid for 90 days or more. recognized almost immediately,
Due to loan defaults, the and helps shore up the capital base
government, as the owner of these of these state-led lenders. Also, the
banks, needs to constantly government does not have to dip
recapitalize them or keep
investing more money in them, to
into its budgetary revenues to
shore up the capital of public
MINT METRIC
keep them going. sector lenders. by Bibek Debroy
MINT

A retired MIG-23 on OLX site

3 What else does Acharya say
about central bank’s role?
“The central bank is often working the
Doesn’t sound quite right.
hardest to ensure that public sector banks
AMU’s probe drew a blank
can show profits and adequate capital to On who played the prank,
markets,” he writes. Hence, repo rate cuts
are not just about signalling banks to cut
Perhaps the cops will shed some light.
their deposit and lending rates, they are
also a way of pushing up bond prices and
help shore up the capital base of
state-owned lenders. QUOTE OF THE DAY
Considering the effect on
4 What about when the
repo rate goes up? 5
When the repo rate goes up, PSBs
What is the cost of
cutting repo rates?
Slashing rates often leads to a
employment and livelihoods,
make losses on their bond situation where the repo rate is
we must do all we can to avoid
investments. However, these lower than the prevailing rate of re-issuing the (emergency)
losses, which are referred to as inflation, as is the case at present.
treasury losses are not recognized In June 2020, inflation, as
declaration, while controlling
immediately. “Treasury gains measured by the consumer price the infection as far
[profits made when bond prices go index had stood at 6.1%. On the
up] are transferred for the most contrary, the repo rate is at 4%.
as possible.
part as soon as bond prices rally. In The fixed deposit interest rates
striking contrast, treasury losses offered by most banks are between
are allowed to be recognized over 5% and 6%. This means that people
several quarters,” writes the are basically losing money by SHINZO ABE
former RBI deputy governor. This investing in fixed deposits, once it PRIME MINISTER, JAPAN
is bad policy as it is influenced by is adjusted for inflation.
the government’s need to keep Vivek Kaul is the author of
shoring up the capital of PSBs. Bad Money.

m MINT SHORT

Twitter, TikTok had preliminary merger talks

AFP
Bloomberg bidders. Microsoft has been negotiating
feedback@livemint.com for weeks with TikTok’s owner, Beijing-
based ByteDance Ltd, and is considered

T
witter Inc. has held early talks
about a potential combination
with TikTok, the Chinese-owned
video-sharing app that the Trump
administration has declared a national-
security threat, Dow Jones reported, cit-
ing people familiar with the matter.
It’s unclear whether Twitter will pur-
sue a deal, which would involve Tik-
Tok’s US operations, the people said.
Because Twitter is much smaller, the
San Francisco-based social media com-
Twitter would almost certainly need
help from other investors if it does
buy TikTok.
pany has reasoned it probably wouldn’t
face the same level of antitrust scrutiny
as Microsoft Corp. or other potential
the front-runner for any possible deal,
according to the people. Microsoft CEO
Satya Nadella spoke with President
Donald Trump about the matter a week
ago. Twitter’s market capitalization is
about $29 billion, smaller than Micro-
soft’s at more than $1.6 trillion. Twitter
would almost certainly need help from
other investors if it does buy TikTok,
Dow Jones said, though it counts pri-
vate-equity firm Silver Lake among its
investors.
 FLIP SIDE
T
U RA L E
O
Y SV
N E W m
Mint Lite
A daily wrap of news and views, opinions and talking points to start your day

NEW ZEALAND on Sunday marked 100 days since it stopped the spread of covid-19 with a strict lockdown, a rare bright
spot in a world that continues to be ravaged by the virus. For the past three months, the only new cases in the country of 5
million have been a handful of returning travellers. Brazil, which has not imposed many restrictions, crossed a grim mile-
stone: 100,000 deaths, five months after the first reported covid-19 case. The country of 210 million people has been report-
ing an average of more than 1,000 daily deaths since late May. For more national and world news, here’s Mint Lite.

TIME TO RETURN TO SCHOOL

THE CENTRE plans to reopen schools in a phased manner
between 1 September and 14 November. Rules for reopening of
educational institutions, closed since end-March due to covid-
19, will be notified with the final unlock guidelines at the end of
the month, but states can take a final call. Apart from masks,
distancing and sanitizing, schools will have to focus on indoor
air quality as more evidence backs the hypothesis that covid-19
could be airborne. University of Nebraska Medical Center rese-
archers, in a paper in Nature, said they found coronavirus-filled
aerosols, or tiny airborne particles of fluid and virus, in the air in
covid-19 patients’ hospital rooms. School and college buildings
across India, whether government or private, are poorly venti-
lated, which could lead to indoor transmission. The solutions
range from keeping windows open to adjusting air-condit-
ioning to circulate air more to using UV light to kill the virus.

NOW, LANDSLIDE IN KERALA

AT LEAST 42 people have died in Kerala’s Idukki district in a
landslide triggered by heavy rains on Friday. More than 30
people are still missing. A portion of a hill came down, burying a
colony of tea plantation workers, the same day that an Air India
Express jet, buffeted by a tailwind following heavy rain in the
area, overshot the runway and fell down a gorge at Kozhikode
airport, killing 18. An investigation is underway but the pilot
could be at fault as the plane landed about 3,000ft, instead of
1,000ft, into a 9,000ft long runway, Arun Kumar, director
general for civil aviation, has since told CNN News-18. The
Western Ghats have been inundated by heavy rainfall for over a
week, affecting Kerala, Tamil Nadu and Karnataka. A number of
dams are at capacity and have been opened to release water.
Meanwhile, Kerala recorded 1,420 new coronavirus cases and
four deaths in 24 hours, the state’s highest single-day increase.

MORE FOOD, LESS RIDES Food rides high

Uber's gross bookings by segment
THE PANDEMIC and restricted mobility is likely to
change the way ride-hailing companies do business in Q2 2019 Q2 2020 % increase or decrease
future. Bookings for Uber’s global food delivery 12,188 75%
business grew faster than its ride-hailing segment for
Rides
the first time, going by Q2 results announced late last
week (see chart). Ride booking fell 75% in the second 3,046
quarter of 2020 compared to the same period last year,
while food delivery bookings rose 106%. In India, Uber
3,386
sold its food delivery arm to Zomato in January, just
Eats
before the pandemic, but its Q2 results point to the
troubles that mobility services will face in the near 6,961 106%
future without a diversified business model. India’s $3-
Gross bookings is total dollar value of rides, meal deliveries without
billion cab market is likely to see a sharp contraction adjustment for discounts, refunds, driver & restaurant earnings
this financial year, and it could take up to two years for Source: Uber, Statista
demand to return to pre-covid levels.
PARAS JAIN/MINT

NO WATER TO WASH HANDS

COVID-19 MAY be spreading faster because billions of people
worldwide don’t have water to wash. Two in five people don’t
have access to soap or water. Frequent and thorough
handwashing is an effective means to restrict the spread of the
virus, but this is a hard rule to follow for many: three billion
people worldwide don’t have access to running water and soap
at home, and four billion suffer severe water scarcity for at least
one month a year, UN-Water has said. In India, over 163 million
people do not have access to a safe water supply. The lack of
access to basic water and sanitation is another instance of
inequality exposed by the pandemic. The world needs to spend
$6.7 trillion on water infrastructure by 2030, not just for the
urgent sanitation needs, but to tackle long-term issues from the
pandemic such as providing better irrigation to head off a
potential food crisis, UN-Water chair Gilbert F. Houngbo said.

WHAT KILLED THE JUMBOS?

THE MYSTERY over the deaths of more than 200 elephants
in Botswana continues as the government has ruled out viral
disease, pesticides or agrochemicals as the reason. A total of 281
elephants have died mysteriously since March, the government
said. They appear to be dizzy, walk in circles and then drop dead
suddenly. Some reports put the number of carcasses at 350. The
environment ministry has also ruled out two suspected mineral
elements and starvation as possible causes of death. The
statement said that results received so far do not eliminate
poisoning and therefore, environmental factors, including
naturally occurring toxins, are still being investigated. Since the
tusks and other parts were intact, the authorities have ruled out
poaching. Botswana, with an estimated 130,000 elephants, is
dependent on the large animals for tourism, which accounts for
one-fifth of the economy.

Curated by Shalini Umachandran. Have something to share with us?

Write to us at businessoflife@livemint.com or tweet to @shalinimb

PEANUTS by Charles M. Schulz

 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 192 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 16 PAGES

PM LAUNCHES ₹1-TRILLION AGRI TECH GIANTS PLAN PUSHBACK

MONDAY, AUGUST 10, 2020
LIVEMINT.COM
INFRASTRUCTURE FUND uP6 ON INDIA’S DATA-CURB PLAN uP6

Ball in govt’s court Indian phone

makers now
DON’T MISS
HINDUJA LEYLAND FINANCE IN
TALKS TO RAISE $100 MILLION
gear up to tap
after RBI’s pause
Hinduja Leyland Finance Ltd (HLFL), the captive
financing arm of commercial vehicle maker
global orders Ashok Leyland, is in talks to raise up to
$100 million in primary equity. HLFL has named
EY as sell-side advisers for the deal, which will
Prasid Banerjee see it divesting a 15-20% stake. >P3
The next one month will be crucial for Centre to firm up its plans prasid.b@livemint.com
NEW DELHI
m MINT GRAPHITI ICICI BANK SEIZES MANTRI

W S
ith inflation forc- martphone makers in GROUP’S OFFICE IN BENGALURU
ing the Reserve
Bank of India
GROWTH CONCERNS India’s second tabletop plane crash in a decade has drawn the
attention of authorities to these short runways. PTI
India are seeing rising
interest from global firms
ICICI Bank has taken possession of Mantri
Economic indicators such as factory output and purchasing managers’ index House, the corporate office of Mantri
(RBI) to hold off for partnerships to produce Developers that has a built-up area of
(PMI) for manufacturing show recovery is fragile and could be prolonged.
on further easing
of monetary policy, the pressure is
now on the Union government to
MIND THE CURVES
Manufacturing PMI Railway freight GST e-way bills
Crash puts spotlight phones and key components in
India, said two senior industry
executives.
30,268 sq. ft, on Bengaluru’s Vittal Mallya
Road, under the Sarfaesi Act following
non-payment of dues, it said in an ad. >P3
(in million tonnes) (in million)
support an economic recovery amid
the world’s fastest rise in coronavirus
cases.
55

45
51.8
110

100
103.1
60

40
40.6
48.3 on tabletop airports This comes amid border ten-
sions between India and China,
and the Modi administration’s HNI HOLDINGS IN NIFTY 500 RISE
The government is discussing 46 90
95.2 call for self-reliance in the pro- TO A 10-QUARTER HIGH IN Q1
measures to be implemented but is Rhik Kundu Landing aircraft on tabletop duction of mobile phones and
35 80
20 Holdings of high net-worth individuals (HNIs)
waiting for more signals about the rhik.k@livemint.com runways, which are located on electronic parts. The govern-
70 in 479 firms in the Nifty 500 index climbed to
direction the economy is taking, NEW DELHI top of a hill or a plateau with ment announced in June a pro- at least a 10-quarter high in April-June. By
according to five people who are 25 60 0 deep gorges running down duction-linked incentive (PLI)
March July March July March July value, HNI holdings in these firms was 1.69%,

aware of these discussions.
“Presentations are being readied
with suggestions and recommenda-
tions from ministries for the Prime
Minister to consider,” said a senior
member of Modi’s council of minis-
ters, one of the five cited above.
The Indian economy is struggling
to recover since the government
imposed a stringent lockdown in
March. While the shutdown brought
most industries to almost a standstill
and depressed demand, it has failed
to slow the spread of the coronavirus
with the number of infections cross-
ing the 2.2 million mark. With the
gross domestic product (GDP) set to
contract by the most since Inde-
pendence, the government is ready-
ing urgent steps to stimulate the
economy.
“The next stimulus will be timed
after examining the June quarter GDP
GROWTH PATTERN
IIP
March April May June
NA
-18.3
-34.7
-55.5
IIP: Index of Industrial Production
growth figures—to be released end of
August. The focus will be on migrant
workers and urban joblessness. Under
Atmanirbhar Bharat, more policy
reforms may be announced such as
production-linked incentive schemes
for more consumer goods sectors,” a
government official said seeking ano-
nymity.
Businesses are pinning hopes on
more demand-boosting measures
from the government, including
ramping up the execution of infra-
M
ost civilian plane their sides, is a stiff ask in poor scheme for firms to promote or ₹2.20 trillion, in the quarter, up from 1.68%,
Year-on-year change (in %)
crashes are followed weather conditions. electronics manufacturing. or ₹1.76 trillion, in the previous quarter. >P7
Core sector Exports by speculation over The slightest lapse in such “We are looking at a very big
March April May June March April May June
whether they were caused by conditions can lead to fatal opportunity, and we’re already
-8.6
-22 -15 -12.4 human error or a technical crashes, three senior pilots said. in talks with large global players ARAMCO IS STILL WORKING ON
-37 -34.6 -36.5 defect. With Friday’s crash at “If visibility is poor and there for servicing not only the DEAL TO INVEST $15 BN IN RIL
Kozhikode airport, there’s an are tailwinds, landing on a tab- domestic markets but also
-60.3 Saudi Aramco said it’s still working on a deal
added complication: tabletop letop airport becomes a chal- export markets,” said Atul Lall, to buy a $15 billion stake in RIL’s oil-to-
Source: IHS Markit India, MOSPI, Railways, GSTN
runways. lenge,” a pilot with national car- CEO of Dixon Technologies. chemicals business. “The work is still on. We
SARVESH KUMAR SHARMA/MINT
India’s second tabletop plane rier Air India Ltd said, seeking Dixon Technologies also will update our shareholders in due course
structure projects, more economic crash in a decade has drawn the anonymity. owns Padget Electronics— about the Reliance deal,” said Aramco chief
reforms and a goods and services tax focus of authorities on these The human at the centre of among domestic manufactur- executive officer Amin Nasser. >P7
(GST) rate cut if the other steps fail to short runways that can chal- Friday’s crash of the Boeing ers that have applied for the
revive consumption. lenge the best of pilots when 737, was Deepak Vasant Sathe, ₹41,000 crore PLI that aims to
Business leaders said they are the weather’s bad. the flight captain and a former make India a global manufac- PHARMA SALES RECOVER AT
worried about movement restric- An Air India Express flight Air Force pilot described by turing hub for smartphones. MUTED PACE; GROW 0.2% IN JULY
tions imposed by local authorities, crashed after overshooting the aviation minister Hardeep Puri The country is currently the
Medicine sales in India were almost flat in July
an issue that was also cited by RBI runway at Kozhikode airport in world’s second-largest smart- on a year-on-year basis as they were up 0.2%
last week as a reason for several high- Kerala on Friday night, killing TURN TO PAGE 6 phone market, with 152.5 mil- to ₹12,124 crore, with cardiac care and anti-
frequency economic indicators lev- 18 people and injuring scores. A lion units shipped in 2019, diabetic drugs posting healthy growth, albeit at
elling off. very similar accident at the Boeing’s technical team
according to IDC. a slower pace compared to June, showed data
Mangalore tabletop airport in from market researcher AIOCD-AWACS. >P5
to examine debris >P6
TURN TO PAGE 7 2010 killed 158 people. TURN TO PAGE 7

Take it with a pinch of salt

An RBI survey suggests there is optimism about the future,
but notes that consumers don’t expect an increase in their
India to halt imports Gratuity cut-off Sebi vets ABB Power
discretionary spending for the next year.

60
Discretionary spending expectations
Employment expectations
Future expectations
(right-hand scale)
160
of 101 defence items may be relaxed offer price, valuation
MINT
50 140 Elizabeth Roche Prashant K. Nanda Jayshree P Upadhyay
40
ered. The parliamentary stand-
120 elizabeth.r@livemint.com prashant.n@livemint.com jayshree.pyasi@livemint.com
30
ing committee on labour, too,
100 NEW DELHI NEW DELHI has suggested that it be lowered MUMBAI
20
80 and made part of the social
10

I T A
0
60 ndia on Sunday said it will he government is consid- security code,” one of the two BB Power Products and
-10 40 halt the imports of 101 items ering easing the mini- government officials cited Systems India Ltd’s plan
-20 20 used by its armed forces mum eligibility condition above said, seeking anonymity. to buyback shares
-30 0 over four years to provide a for gratuity payments to Labour market experts said worth ₹917 crore through an
Jun 2018 Jul 2020 push to indigenous manu- employees from five years of the five-year threshold is out- open offer has attracted the
Source: CMIE
facturing of military hardware. continuous employment as dated and no longer serves the scrutiny of the markets regula-
SARVESH KUMAR SHARMA/MINT
The defence ministry will shorter tenures are increasingly interest of employees. Trade tor after complaints by a sec-

Demand story is give contracts worth almost ₹4

trillion to local manufacturers
over the next five to seven years
Defence minister Rajnath Singh
said the embargo list includes
becoming the norm in India,
government officials said.
There is a growing demand
unions claim some firms fire
workers before they become
eligible for gratuity payments
tion of minority shareholders,
said two people with direct
knowledge of the matter.
Sebi is examining if the price
offered to minority investors

still dark; upticks

as a result of this move. high-tech weapon systems. PTI to make the gratuity eligibility to save on costs. “The five-year The Securities and Exchange as well as the valuation is fair.
The ministry has also bifur- criteria shorter—between one threshold was formulated dec- Board of India (Sebi) is examin-
cated the procurement budget Export Promotion Policy 2020, and three years—as declining ades ago to promote long-term ing whether the price offered to ple issues that need to be con-
for 2020-21 between domestic which identified defence man- job security and increasing con- work culture. The realities now minority shareholders as well sidered. These include

are just fireflies and foreign routes.

A separate budget of
₹52,000 crore has been cre-
ufacturing as a key part of a
strategy to revive the economy
that has been battered by the
tractualization of employment
are depriving workers of their
dues. “There is demand from
are different. I think gratuity
threshold of 2-3 years is a better
option. One year may not be a
as the valuation is fair, and
whether it needs to be revised,
said one of the two people cited
whether the promoters of ABB
Power will earn better value
for their holdings than minor-
ated to procure equipment coronavirus pandemic. several quarters to lower the feasible idea,” said R.P. Yadav, above. “Sebi is examining ity investors, whether interest
Aparna Iyer think demand will pick up from local firms this year. Of the contracts to be given gratuity threshold. How to take chief executive of Genius Con- whether there is a need to should be added to the offer
aparna.i@livemint.com quickly. When the economy The announcement comes to domestic manufacturers, it forward and lower the five- sulting, a staffing company. appoint an independent val- price, and also whether the
unlocked, we saw an initial days after India brought out a year threshold is a subject on uer,” the person said.

T
he demand collapse that pickup. The boost from new Defence Production and TURN TO PAGE 7 the table; it is likely to be low- TURN TO PAGE 7 There are, however, multi- TURN TO PAGE 7
the coronavirus pan- pent-up demand has already
demic brought on has happened,” said D.K. Joshi,
pulled down both business chief economist at Crisil Ltd.
and consumer sentiment. He added that it would take a
Cooped up in their homes and long time for demand to reach
unable to spend, it was pre-pandemic levels.
expected that Indians Note that the consumption Chinese brands hold Contribution Bharat to get ₹10 LED bulbs
wouldn’t be upbeat about any- growth that has been fuelling
to NPS slows
thing. It is not surprising that a the economy over the past few
survey of the Reserve Bank of years was largely led by discre-
India (RBI) found consumer tionary spending. If consum-
back spending on ads down in Q1
Utpal Bhaskar
utpal.b@livemint.com
Under UJALA, the world’s
largest domestic lighting pro-
sentiment at its historic low in ers stick to their pandemic NEW DELHI gramme by EESL, India earlier
July. But what is unusual is the purchase pattern of just essen- Saumya Tewari Anirudh Laskar reduced LED bulb prices to ₹70

M
optimism the future expecta- tials, demand is going to be saumya.t@livemint.com anirudh.l@livemint.com illions of households from around ₹310 in 2014.
tions index showed. This index only a fraction of what it was NEW DELHI MUMBAI in India’s countryside EESL is now finalizing a new
rose to 105.8 in before the pan- will get energy-saving scheme called Gram UJALA,
B E H I N D demic.
C A
the July round of hinese brands across gainst the backdrop of LED bulbs at a mere ₹10 each, a which will be registered under
the survey, from
m T H E N E W S Saugata Bhat- categories are holding widespread job losses seventh of the market price and the United Nations’ Clean
97.9 in the pre- tacharya, chief back on advertising and economic distress, the lowest in the world, thanks Development Mechanism
vious one, a sizeable jump. economist at Axis Bank Ltd, spending in India, especially on the number of private sector to an ambitious scheme by the In the first phase of the new (CDM), which will enable it to
But Indian businessmen believes that demand may not traditional media platforms firms contributing to the state-run Energy Efficiency scheme, 10 mn LED bulbs will claim carbon credits. EESL
and even policymakers need reach pre-pandemic levels such as television and print, National Pension System (NPS) Services Ltd (EESL). be offered.PRIYANKA PARASHAR/MINT expects the carbon credit reve-
to be very careful and take this until the fag end of FY22. media buyers said. grew at a slower pace in the The scheme, which does not nues to fetch ₹60 per LED bulb,
uptick with a huge dollop of Among discretionary The advertising go-slow The advertising go-slow comes June quarter than a year before, involve any government sup- project comes as a boost for with the balance ₹10 to be paid
salt. One has to only dig into spends, services such as travel comes after smartphone brand after Vivo pulled out of IPL 2020 even as withdrawals rose. port or subsidy, aims to provide India’s climate change strategy by the rural consumer.
the RBI survey to find that the and hospitality formed a sig- Vivo’s exit from Indian Premier as title sponsor. GETTY IMAGES According to HDFC Pension 600 million made-in-India under the proposed Gram “We realised that a rural con-
signs of demand uptick are nificant portion. These are the League (IPL) 2020 as the tour- Management Co., one of the LED bulbs in villages, a top UJALA (Unnat Jyoti by Afford-
fragile. worst-affected sectors and are nament’s title sponsor owing to spent around ₹1,500 crore on largest fund managers of NPS EESL executive said. The able Lighting for All) scheme. TURN TO PAGE 11
The survey shows that con- expected to remain moribund. growing anti-China sentiment. advertising in 2019. by assets under management,
sumers don’t expect an Joshi at Crisil points out that According to media buyers, Dinesh Rathod, chief execu- the number of companies con- For short takes on the news Listen to Mint Evening
increase in their discretionary even in countries where the smartphone firms Vivo, Oppo, tive at media agency Madison tributing to NPS rose 8.24% to before you start your day, Market Wrap for Nasrin
spending for the next year. lockdowns have lifted entirely, Realme and Xiaomi have cut Media Omega, said Chinese 497,000 during the quarter, follow our daily podcast Mint Sultana’s detailed analysis of
Analysts have already begun people are reluctant to spend down on the number of ad spot brands were active spenders against a 11.86% growth seen a Lite Morning Shot with the day’s news from Dalal
Shalini Umachandran on Street and other markets on
discounting upticks where purchases on television and htsmartcast.com htsmartcast.com
demand is concerned. “I don’t TURN TO PAGE 7 print. These firms together TURN TO PAGE 7 TURN TO PAGE 5
02 MONDAY, 10 AUGUST 2020
NEW DELHI DEALS
PLAIN
FACTS

THE GEOGRAPHY OF GROWTH IN INDIA

A more broad-based growth process will boost overall GDP in India, reduce regional disparities, and generate jobs where they are needed the most

A shramik special train from Patiala carries migrant workers back to Bihar during the covid-induced lockdown. By driving hordes of migrant workers to their native states, the lockdown may have put the spotlight on regional inequalities. BHARAT BHUSHAN/HT

Nikita Kwatra &

m MINT GRAPHITI
methodology in 2014-15 may generate the number of jobs Chart 1 Chart 2

Pramit Bhattacharya be responsible for accentuat- that its vast population Just five states account for almost half Countries with per capita GDP comparable
ing the divergence across requires, though it counts of India's GDP to Indian states
MUMBAI/NEW DELHI states in recent years. How- among the five largest state % share in India's GDP in 2018-19 Per capita GSDP in current $ (2018-19)
ever, even if one considers the economies because of its sheer

A
striking feature of period up to 2013-14 and uses size. India’s most populous
India’s growth the old GDP series, the story state accounts for 15% of the Jammu and
Cambodia
boom since the remains one of divergence country’s working-age popu- Kashmir*
1980s has been rather than convergence. lation, but accounts for just 9% Haryana
the concentration The regional skew poses a of salaried jobs and barely 7% Himachal Egypt
Pradesh Arunachal Sri Lanka
of economic activity in a hand- big challenge for the country. of factory jobs. Punjab Pradesh Laos
Delhi Uttarakhand Morocco
ful of states. Roughly half of However, it also presents an By driving hordes of Iraq
Jamaica
India’s gross domestic product opportunity. If this divergence migrant workers to their states Uttar Pradesh
Sikkim Ghana
(GDP) came from just five can be reversed and the natu- of origin, the pandemic-in- 8.8
states then, as it does now. ral “catch-up” process is duced lockdown may have put Gujarat
Rajasthan Assam Nagaland
Uzbekistan Nepal Myanmar
Maharashtra, Uttar Pradesh, allowed to play out, that alone the spotlight on regional ine- 7.9 Bihar Liberia Myanmar Bangladesh
Meghalaya
Tamil Nadu, Karnataka, and will provide a big thrust to qualities. However, the Manipur
Jharkhand Tanzania
Gujarat accounted for 47% of India’s next growth surge. regional skew has been a long- Morocco
Pakistan
Madhya Pradesh Myanmar Uzbekistan
the country’s output in That growth surge will also be running feature of India’s Tripura Mizoram Nigeria
2018-19. The same set of states more evenly balanced than the development journey. Chhattisgarh Cambodia Kenya
accounted for roughly the previous one. Economists have argued West Bengal
Odisha Cambodia
same share of India’s output Consider India’s growth that in the absence of state Vietnam
nearly four decades ago, in journey over the 1980-2014 interventions to facilitate Maharashtra
Less than 1
1980-81 (see chart 1). period. States such as Delhi, investments, capital tends to Telangana 1-3 Morocco
13.9
India’s big five state econo- Gujarat, Maharashtra, Hary- move towards already devel- 3-5
5-7 Less than $1,000
mies may be similar in size, but ana and Tamil Nadu were the oped regions. This partly Goa Andhra 7-9
Peru Laos $1,000-2,000
they are not all at the same main engines of growth, while explains why states such as Pradesh More than 9
Karnataka $2,000-3,000
stage of development once we Bihar, Odisha and Uttar Pra- Maharashtra, Gujarat, and
8.1 Philippines $3,000-4,000
consider their per capita desh lagged (see chart 3). Tamil Nadu have outper- *The map considers all states as they existed in
fiscal 2019, the latest year for which GSDP figures More than $5,000
incomes. Maharashtra is as If all Indian states had formed other states since the Egypt
Tamil Nadu are available, and hence does not consider the
affluent as Vietnam, while grown at the same rate since 1980s. Kerala 8.6 Union territories created out of the erstwhile GDP per capita of each state has been converted to
Philippines
Uttar Pradesh is comparable to 1980 as the five fastest-grow- “Private corporate invest- state of Jammu and Kashmir in fiscal 2020. dollars using the average rupee-dollar rate during 2018-19.

Nepal. The gap in per capita ing states (7.2%), India’s GDP ment is potentially highly
incomes between the richest per capita would have been mobile across states and is, Chart 3

and the poorest states has close to $1,900 by 2014, 1.4 therefore, likely to flow to Among major Indian states, Bihar, Odisha and UP have grown the least since 1980
grown over the times higher than states that have a skilled labour GSDP ( billion) % share in India's GDP Average annual growth in GSDP
past few decades. If laggard states the actual $1,347. force with a good ‘work cul- between 1980-81 and 2013-14
in 2013-14 in 1980-81 in 2013-14 in 1980-81
As these pages are to catch up, India would have ture’, good infrastructure...
have pointed out surpassed Viet- and good governance gener- Delhi 3,911 32 3.7 2.3 7.6
they will need
earlier, at the nam, which had a ally,” wrote former Planning Gujarat 7,656 88 7.3 6.4 7.1
bigger Maharashtra 15,101 188 14.4 13.7
beginning of the per capita income Commission chief Montek S. 6.9
millennium, the
investments in Haryana 3,889 39 3.7 2.9 6.8 The top 15 states by
of $1,887 at the Ahluwalia in a 2000 Economic
per capita physical & social time (see chart 4). and Political Weekly article on Tamil Nadu 8,542 103 8.2 7.5 6.6 GSDP (current prices)
have been considered
income of the five infrastructure A more broad- the wide variation in growth Rajasthan 5,176 62 4.9 4.5 6.6 here. Growth
richest states was based growth performance of states. What Karnataka 6,146 76 5.9 5.5 6.3 calculations are based
on constant price
Andhra Pradesh 8,548 96 8.2 7.0 6.1
145% higher than process would Alhuwalia wrote then remains figures (2004-05
West Bengal 7,066 119 6.7 8.7 5.8 series). Newly created
that of the bottom five states. also have generated jobs true even today. states—Telangana,
Kerala 3,963 60 3.8 4.4 5.7
That difference rose to 289% where they are needed the If laggard states are to catch 6,204 101
Chhattisgarh,
Madhya Pradesh 5.9 7.4 5.5 Jharkhand, and
in 2010-11 and further to 322% most. A majority of India’s fac- up with richer ones, they will 3,176 54 3 Uttarakhand—were
Punjab 3.9 5.3 merged with their
in 2018-19. India looks like a tory jobs are clustered in Tamil need bigger investments in Uttar Pradesh 9,856 188 9.4 13.8 5.1 parent states for
continent of diverse countries Nadu, Maharashtra, Gujarat, both physical and social infra- Bihar 5,164 99 4.9 7.3 5.1
this chart.
once we map the per capita Uttar Pradesh and Karnataka, structure. Faster growth for Odisha 2,730 48 2.6 3.5 4.9
income of each state to the according to the Annual Sur- the poorer states would give a
closest comparable country vey of Industries (ASI) data for fillip to the country’s overall Chart 4 Chart 5

(see chart 2). 2017-18. The five states also growth rates even while bring- If poorer states had grown faster, The big five state economies account for roughly half of factory
Conventional economic account for a little less than ing down inequality. Such an India would have been far richer jobs and salaried jobs
theory suggests that poorer half of all salaried jobs in India, inclusive growth process GDP per capita in 2013-14 (current $) % share of factory jobs in India (2017-18) % share of salaried jobs in India (2018-19)
states should have grown the latest Periodic Labour would also help prevent 0-0.5
faster during India’s growth Force Survey (PLFS) data for India’s economic fault lines Pakistan 1,209 0.5-1
boom since the 1980s. Return 2018-19 shows (see charts 5a from turning into deep politi- 1.1-5
India (actual) 1,347 Uttar Pradesh 5.1-10
to investments tend to be and 5b). cal chasms. Gujarat 6.9 more than 10 Uttar Pradesh The share of each
9 state in total
higher in poorer regions. The concentration of eco- This is the concluding part of Zimbabwe 1,430 11.7 salaried jobs
Economists call this process nomic activity and jobs in a few a four-part data journalism created in India is
calculated based
“convergence” or the states has meant that the most series on India’s growth chal- South Sudan 1,779 on estimates of
worker population
“catch-up effect”. Even as populous states of the country lenge. The first part examined Laos 1,826 ratio, distribution
India managed to catch up to are job-deficit regions. Bihar, how three decades of rapid Gujarat of workers (casual
or regular salaried)
some extent with the rest of for instance, accounts for 7% of growth have transformed the Vietnam 1,887 7.2 and state
the world, poorer states within the working-age population in country , the second part had population
India (projected)* 1,906 Maharashtra
estimates. The
India have failed to play the country (aged 15-59 years, looked at India’s growth meas- Maharashtra state population
12.9 12.7 estimates for 2018
catch-up. according to the last census). urement challenge, and the Philippines 2,871 have been derived
The changes in the way However, it accounts for less third part had examined what Tamil Nadu Karnataka
Tamil Nadu using 2001 and 2011
Karnataka 16.2 10 census data.
gross state domestic product than 3% of salaried jobs and India can learn from Asia’s *Projected per capita income if all states had grown at the same rate as the 6.8 6.2
top five (7.2% per annum) over the 1980-2014 period. Only countries with
(GSDP) figures are being cal- barely 1% of factory jobs. growth miracles. per capita incomes similar to India have been shown in this chart.
Source: CMIE, ASI, World Bank, Bloomberg, PLFS (2018-19), census, Mint calculations
culated since the change in Even Uttar Pradesh does not nikita.k@livemint.com
AHMED RAZA KHAN/MINT

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 NEWS MONDAY, 10 AUGUST 2020
NEW DELHI 03

m SHORT TAKES
Rajnath says PM to present outline
for self-reliant India on 15 August
Hinduja Leyland Finance ICICI Bank
takes possession
of Mantri’s
New Delhi: Prime Minister Narendra Modi will present a new
outline for a self-reliant India in his address to the nation from the
ramparts of the Red Fort on 15 August, Defence Minister Rajnath
Singh said on Sunday. Speaking at an event, Singh also referred
in talks to raise $100 mn corporate office
to the defence ministry’s decision to ban import of 101 military Madhurima Nandy
weapons and platforms and said “big and tough” decisions are madhurima.n@livemint.com
being taken in sync with the prime minister’s vision for a self reli- The fundraise will see the financer divest anywhere between 15% and 20% stake BENGALURU
ant India. PTI

I
CICI Bank has taken posses-
Deborshi Chaki sion of the corporate office of
ONGC cuts debt, but planned deborshi.c@livemint.com Mantri Developers in Benga-
luru’s Vittal Mallya Road, fol-
expenditure remains challenge MUMBAI
lowing non-payment of dues.

H
REUTERS
induja Leyland
Finance Ltd (HLFL),
the captive financing
arm of commercial
vehicle maker Ashok
Leyland, is in talks with potential
investors to raise up to $100 million
in primary equity, two people
aware of the development said,
requesting anonymity.
HLFL has appointed EY as sell-
side advisors for the transaction,
New Delhi: State-owned Oil and Natural Gas Corporation which will see it divesting between
(ONGC) has cut its debt by more than one-third but faces an 15% and 20% stake to an incoming
uphill challenge to meeting planned expenditure during investor, said the people cited
current fiscal due to oil and gas prices falling below sub-op- above.
timal levels, according to company officials and regulatory “The transaction is currently at
filings. ONGC’s outstanding debt of ₹21,593 crore as on 31 an early stage and discussions are
March, 2019, has come down to ₹13,949 crore as on 31 underway with several potential
March, 2020, as it used revenue from better operations to investors including large private
retire some of the borrowings, according to the company’s equity funds,” said one of the peo-
regulatory filings. PTI ple mentioned above.
Incorporated in 2008, HLFL
commenced operations in 2010 as
BSH Home Appliances to launch a non-banking financial company
(NBFC). It was made a captive fin-
dishwashers specific for India ancier by Hinduja group flagship
New Delhi: BSH Home Appliances, which sells Bosch and Sie- Ashok Leyland. HLFL eventually
mens brand of appliances, is set to launch an India-specific dish- diversified into financing non-
washer model and start a marketing campaign amid a surge in Ashok Leyland vehicles while
demand for such products following the covid-19-induced lock- entering into the loan against prop-
down. “We are launching our new range...that will be two inches erty segment (LAP) in fiscal 2015.
shorter, because...Users (women) are short here,” said Neeraj The company extends loans for
Bahl, managing director and chief executive, BSH Home Appli- commercial vehicles, as well as
ances India. SUNEERA TANDON three-wheelers, two-wheelers,
Read more on livemint.com tractors and construction equip-
ment. It has also been buying loan
portfolios over the past two years to
IndusInd Bank invokes Eveready’s diversify its product profile,
thereby augmenting net interest
pledged shares, takes 7.82% stake margins.
New Delhi: Private sector IndusInd Bank on Saturday said it has As of December 2019, corporate
acquired 7.82% stake in battery maker Eveready Industries by filings show that Hinduja group
invoking pledged shares following loan default. The bank entities held 93.08% in HLFL with
invoked pledge on 56,83,320 shares forming 7.82% of paid-up Ashok Leyland the primary share-
equity share capital of Eveready Industries. PTI holder with a 61.83% stake. Ashok
The bank has taken posses-
Harley sion of Mantri House, spread
Davidson’s
cheapest bike
across 30,268 sq. ft of built-up
in India gets area under the Securitisation
massive price and Reconstruction of Finan-
cut cial Assets and Enforcement of
bit.ly/3fHWDZs
Security Interest (SARFESI)
Act, it said in a newspaper
advertisement on Saturday.
In a similar move last month,
private sector lender Yes Bank
Ltd took possession of Reliance
Centre, the headquarter of Anil
Dhirubhai Ambani Group in
Mumbai, under the SARFESI
Act, after the group failed to
repay dues of ₹2,892 crore.
ICICI Bank had issued a
demand notice last November
The company extends loans for commercial vehicles, as well as three-wheelers, two-wheelers, tractors, and to the borrower Shore Dwell-
construction equipment. BLOOMBERG ings Pvt. Ltd, formerly known
as Mantri Dwellings Pvt. Ltd, to
Leyland raised its stake to 67.2% as ₹200 crore for an undisclosed stake Mint reported on 4 August that repay ₹53.62 crore within 60
on 25 March 2020 with plans to in the company and followed it up India’s non-bank lenders, who are days, according to the adver-
increase it further to around 70% in with another round in 2017 before currently staring at ₹1.51 trillion tisement on Saturday.
the near future to keep majority exiting the investment in January debt repayments due in the next six It took possession of the
shareholding. this year for an undisclosed sum. months, are rushing to raise fresh property on 4 August as the
HLFL plans to come out with an The NBFC has over the past few equity and pursuing mergers with developer failed to repay the
initial public offering (IPO) in the years also explored IPO opportuni- bigger peers to avert defaults. amount, ICICI said.
near to medium term. The Hinduja ties but is yet to finalize plans in this This is because the pandemic has A Mantri spokesperson said
group is expected darkened the out- the project, against which
to continue to hold THE ROAD AHEAD look for the sector ICICI Bank lent, has got suffi-
majority stake even that has struggled cient cash flow to repay loan
after the IPO. HINDUJA Leyland HLFL plans to come THE Hinduja group is since the collapse of obligations.
Emails sent to Finance has
appointed EY as sell
out with an initial
public offering in
expected to continue
to hold majority
Infrastructure “Due to current recessionary
HLFL remained side advisors for the the near to medium stake even after the Leasing and Finan- trend in real estate business,
unanswered until transaction term IPO cial Services Ltd sales couldn’t happen as per
press time. A nearly two years projections given at the time of
spokesperson for ago. loan sanctioned, hence bank
EY chose not to comment. regard. Significantly, the latest fun- The Reserve Bank of India’s tar- expressed their inability to
Existing shareholders have also draise comes at a time when the geted long term repo operations release funds from balance
infused capital at regular intervals commercial vehicle business of have eased the liquidity situation undrawn ₹70 crore limit and
in HLFL. From June 2017 onwards, most manufacturers continues to for some NBFCs, especially the bet- classified account as NPA and
they have infused fresh capital of be under severe stress because of ter-rated ones, but those with infe- subsequently issued the pos-
around ₹650 crore. In 2103, PE firm the coronavirus outbreak, which rior asset quality may find it tough session notice,” the spokesper-
Everstone Capital, invested around has heavily impacted demand. to survive without rescue. son said.

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04 MONDAY, 10 AUGUST 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 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%)

38,040.57 1.15 11,214.05 1.27 9,198.65 1.80 27,130.45 1.00 11,361.40 1.23 14,218.87 3.34 13,668.69 4.97
1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%)

3.72 20.98 3.84 21.90 3.94 22.31 2.80 19.20 3.68 21.49 5.05 24.51 6.46 27.90
6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%)

-7.54 3.68 -7.31 3.30 -8.02 3.88 -6.60 5.44 -7.25 3.56 -10.60 5.26 -7.89 9.51

Embassy’s impressive Q1 earnings

mint

SHORT TAKES
Trump extends payroll tax
deferral, jobless benefits
US President Donald Trump announced four
executive actions, including continued expanded
justify demand for Mindspace Reit
unemployment benefits and a temporary payroll
tax deferral for some workers, as the coronavirus Harsha Jethmalani June quarter result was that despite a pause in decision making by occupi-
pandemic continues to hobble the US economy. harsha.j@livemint.com the lockdown, rental collections fromers. However, in the medium-term, Key 12 IBM
Trump also ordered continued eviction protec- office occupiers remained robust at high-quality properties would benefit occupiers
9 Cognizant

B
tion and student-loan relief. The moves could lackstone-backed Mind- 98.9%. In a post-earnings conference from supply shrinkage and increased
jeopardize negotiations with Democrats over an space Business Parks Reit’s call, the Embassy management said offshoring to India, it added. Around 42% of 4 NTT Data
additional relief package, with the two sides tril- Sensex, stock made its market there has been a great deal of conjec- Speaking about tenants, the man- Embassy's
Nifty week gross rentals
lions of dollars apart on key issues, including aid ahead: The
debut on Friday at a 10% ture around WFH, domestically and agement said domestic IT firms, the 3 ANSR
to state governments and the amount of supple- premium over its issue globally. However, in India, WFH has key occupiers, have performed well are contributed
mentary unemployment benefits. BLOOMBERG
key levels to
watch out price of ₹275. The issue itself was over- significant challenges relating to the
despite covid-19, as reflected by their
by its top 10
tenants.
42%Total
3 Cerner
for subscribed 13 times, with investors sal- physical and digital infrastructure. It is
large deal wins. This gives them confi- (in %) 3 PwC
bit.ly/2XLWjmq ivating at the prospect dence about future 2 Google
Rich valuations of a tax-free yield of HOLDING FIRM demand for office spa- India

about 7%. ces from the Indian IT 2 Nokia

Nasdaq’s record-setting rally has pushed the With a 10% rise on HIGHLIGHT of its HOWEVER given the OVERALL Reits sector. Around 42% of
price-earnings ratio to a 16-year high.
listing, the expected Q1 results was that general focus on cash provide a stable 7%
despite curbs, rental conversion by the post-tax return from
Embassy’s gross rentals 2
Price-earnings ratio Source: Embassy JPMorgan
40 yield drops to about collections remained tenants, near-term locked-in rentals from come from its top 10 Office Park Reit
36.4
6.6%. But demand robust at 98.9% demand could be hit current tenants occupiers. Out of these, presentation
30
29.9 even at these levels was the top three are IT 2 Lowe's
20
resilient, which is companies, contribut- SARVESH KUMAR SHARMA/MINT
10
interesting, considering the concerns indeed likely that there will be more ing 25% to gross rentals. mercial real estate, the two Reits, Embassy distributed 100% of its net
Nasdaq 100 over the commercial real estate sector flexibility in terms of work place with Mindspace largely has multina- Embassy and Mindspace, have shown distributable cash flows in Q1FY21 and
12000
11,267.1 likely to be a key casualty of the grow- a hybrid of traditional office and home tional clients occupying its spaces, but strong rental collections during the the distribution stood at ₹5.83 per
9000
ing work-from-home (WFH) culture. locations. But offices will continue to the company is not dependent on any last quarter. Hence, even as escalations unit. This is in-line with what it had
6000 However, Q1FY21 results of be a core amenity for the business one or two clients. Its largest client, may be questioned, Reits provide a outlined. Indeed, the Embassy Reit
3000 1,318.8 Embassy Office Parks showed that community, the management said. Accenture, contributes to 7.7% of gross stable 7% post-tax return from has also appreciated meaningfully
0 such concerns may be a bit of a stretch, Given the focus on cash conserva- rentals and are at 92% occupancy. locked-in rentals from existing ten- since its IPO last year. Including pay-
9 Aug 2004 6 Aug 2020
Source: Bloomberg
especially for grade-A office spaces. tion, the management cautioned that “Despite the impact of covid and ants,” Sharad Mittal, CEO, Motilal outs, shareholders have ended up with
The key highlight of Embassy’s near-term demand could be hit due to weakened sentiment around com- Oswal Real Estate Fund, said. returns of 33% in a little over a year.
SATISH KUMAR/MINT

Nasdaq valuations hint at

curbs staying put for long
A theory exists as to how the value of companies
in the Nasdaq 100 has expanded by $2.9 trillion in
this of all years. It’s that the covid-19 crisis’s
Lupin’s Q1 disappoints; its stock Raw material constraints, local curbs
impact, or at least the social-distancing strictures
it has forced upon the world, will prove to be per-
manent. The idea gets tossed around after weeks
may take some time to recuperate pose potent risks to M&M’s recovery
like this, in which the tech gauge jumped over 2%
and its price-earnings ratio topped 36 for the first
time since 2004. “The digital transformation ini- Clifford Alvares R. Sree Ram Q1, the stock level is much lower. Revenue dropped 56% y-o-y, track-
tiatives have just rocketed us into the future. So clifford.a@livemint.com
Challenges galore sreeram@livemint.com That is one of the reasons we are not ing a similar fall in sales volumes.
those valuations may be very justified,” said Rich Lupin’s revenues fell sharply as covid-19 disrupted supplies getting (the) volume that we want. The revenue fall is broadly in line
and Ebitda margins also took a hit. The margins could,

L S
Weiss, chief investment officer, American Cen- upin’s Q1 FY21 results however, improve in the future.
omething is better than noth- Lot of effort is going into improving with estimates. The sharp revenue
tury Investments. BLOOMBERG have been disappoint- Revenue ( crore) Ebitda margin (%) (Right-hand scale)
ing. But Mahindra and Mahin- the supply chain,” it said. drop hurt operating leverage leading
ing, with its revenue fall- 4,500 25
dra Ltd (M&M) has got more The management commentary is to a 68% drop in operating profit.
ing 9% year-on-year (y-o-y), 3,877.6 than something going for itself dur- cautious. M&M refrained from pro- Going ahead, the spread of cov-
Italy’s first mid-Aug bond even lower than toned-down 3,600
3,527.8 20 ing the covid-19 crisis. Analysts feel viding guidance for the id-19 and local curbs
analyst expectations, drag- that its tractors segment has robust farm equipment busi- M&M is forced to disrupting raw material
sale in 10 yrs shows crunch ging down its stock 6% on Fri- 2,700
19.6 15
demand prospects driven by better ness, notwithstanding prioritize supplies will be an issue
This year’s Ferragosto holiday, when most of Italy day. 1,800 13.8 10
outlook from the rural market. the positive rural senti- production of as they weigh on pro-
shuts down, will be interrupted by the first sale of Lupin’s US business’ reve- Unsurprisingly, the shares are on a ments and rebound in certain categories duction. With raw
bonds in the middle of the month since 2010, as nues fell 21% in Q1 as sales of 900 5 relentless rise, flirting with their tractor sales, up 27% in material supply con-
of vehicles due
the treasury seeks funds to fight the economic some of its seasonal products 52-week highs on the NSE. July. It also expects straints, M&M is forced
crunch. The unusual timing may also have been such as Tamiflu were muted. 0
Q1 Q1
0
On Friday, after the company higher demand for to covid-led to prioritize production
encouraged by a rally in Italian debt, taking The firm also lost sales of met- FY20 FY21 warned about supply chain con- tractors this year com- disruptions of certain categories of
Source: Emkay Global Financial Services, Mint Research
10-year yields to their lowest since February, formin, which was withdrawn straints in meeting the emerging pared to last year. vehicles, potentially
before the lockdown. That followed the ECB’s from the US market. SATISH KUMAR/MINT demand, the stock lost a mere 1.5%. “From the demand ceding ground to com-
€1.35 trillion support package and the EU’s €750 The fall of 1.7% y-o-y in distribution costs. ing margins of 17% for FY21. As per the management, even as it side, we expect the tractor industry petition in other categories. “Even
billion recovery fund. The market’s welcome for domestic revenues was However, while most of its Still, while sales are likely to ramped up tractor manufacturing to see growth; but due to supply one supplier going into lockdown
the measures is likely to help contain the differ- expected. Sales of acute prod- peers have shown expanding improve, a lot will depend on levels to 90%, it was unable to fully uncertainty we cannot give (the fore- disrupts production,” it added.
ence between the borrowing costs of the bloc’s ucts in its home market were margins, Lupin’s Q1 earnings how soon the company can meet the demand last quarter. Con- cast),” M&M said after releasing The management expects the
nations. BLOOMBERG hit by covid-19 and fewer pre- before interest, taxes, depre- ramp up new launches. sequently, inventories have fallen to results for the June quarter, which supply chain and raw material sup-
scription sales. ciation and amortization Q2 could show a decent unusually low levels. “By the end of reflect covid-19’s adverse impact. plies to stabilize in one or two
Global sales were also a (Ebitda) was just 13.8%, which growth over Q1 as demand is months, or by the festive season. In
sore point with was hardly better picking up domestically, post general, with a higher exposure to
On shaky ground slower sales seen
Farm Operating profit margin (in %)
Nearly 35% of total European households claim
Q2 could show a than the fourth- the lifting of the covid-19 15.8
rural and semi-urban areas, M&M is
across geograph- decent growth quarter’s 13.7%. lockdown. support 14.5 14.8 well placed to benefit from normali-
they would struggle to meet unforeseen 14.0 14.1
expenses in case of a cash crunch. ies. over Q1 as Lupin has filed However, the stock may Steady profit 13.2 13.5 13.6 zation of demand in non-urban
% of households saying they couldn’t cope with unexpected expense
The only seg- demand is picking for about four tread water for now. It did get margins at M&M's areas. “M&M’s exposure (tractor+
ment that did
up domestically, abbreviated new a lift, rising about 15.2% in tractor biz helped 10.3 Auto) to the rural market is one of the
0 10 20 30 40 50 60
well is its active drug applications 2020 as sentiment swung contain the highest among its peers,” Dolat Cap-
Sweden
pharma ingredi- after the lifting in the US and its sharply in favour of pharma adverse impact of ital Market Pvt. Ltd analysts said.
Switzerland
Netherlands ent division with of the lockdown pipeline of drug stocks. negative operating Even so, normalization of supply
Germany leverage on its
France sales up 17% launches is quite Even so, it has undershot chain remains crucial for the revival
profitability.
European Union
Slovenia
y-o-y because of large at 158. The the Nifty Pharma Index, of the automotive or utility vehicle
UK inventory stocking. firm is relaunching generic which is up a steep 41% in business, another large business seg-
Italy However, this was not metformin in the US in the 2020. Given the overhang of ment of M&M. Sales for the segment
Spain
Ireland enough to improve margins. next few months. A launch of growth in the US, this diver- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 dropped 36% last month. Produc-
Romania
Lithuania Lupin brought down costs in Albuterol is also on the cards. gence may continue for some Source: Company FY19 FY20 FY21 tion ramp-up can help the company
Cyprus Q1, particularly selling and The management is target- time. better defend its market share.
Greece SARVESH KUMAR SHARMA/MINT
Croatia
Latvia
Source: Eurostat, Bruegel

SATISH KUMAR/MINT

Pandemic puts millions of

Europeans on path to crisis
Tata Consumer’s shares re-rate after Jun qtr; valuations match Britannia’s
More economic upheaval is on the horizon in
Europe as plans to end the unprecedented sup- Pallavi Pengonda Valuations are now on a par with sport. “International business zation (Ebitda) margin expanded
port for workers during the coronavirus pan- pallavi.p@livemint.com packaged foods company, Bri-
Covid-19 tailwinds growth may moderate in the sec- 312 basis points to 17.8%. One
Tata Consumer has benefited from a spike in at-home consumption
demic threaten to tip millions of households into tannia Industries Ltd’s stock, across segments in Q1FY21. ond half of the year, as consum- basis point is one-hundredth of a

T
a debt trap. Organizations that help individuals ata Consumer Products
sort out their financial problems are warning of a Ltd’s shares have under-
sharp increase in the number of families bur- gone a massive re-rating
dened by bills they can’t pay. Even in savings-rich since the restructuring of the
nations such as Germany and Austria, citizens are Tata group’s consumer busi-
starting to worry. “In some provinces, we already nesses last year. This has contin-
see significantly more enquiries from people ued and even accentuated after
seeking advice compared to last year,” said Maria the company’s June quarter
Kemmetmueller, deputy director of the organiza- results.
tion of debt counselling agencies in Austria. “In The non-alcoholic beverages
the autumn, we expect an increase in counselling and food company delivered a
everywhere of as much as 40%.” BLOOMBERG strong set of results, with pre-tax
earnings increasing by 42% year-
For more reports and analysis on-year (y-o-y). But the stock’s
on the markets, follow our 15% jump in three trading days is
Mark to Market podcast with clearly taking things a bit far.
Pallavi Pengonda and Aparna Tata Consumer shares now trade
Iyer on htsmartcast.com at 47 times estimated FY22 earn-
ings based on Bloomberg data.
which trades at 47.5 times FY22
estimated earnings. Britannia’s
pre-tax earnings had increased
by 81% for the June quarter, as a
result of a spike in at-home food
consumption as people stayed
indoors.
The jump in Tata Consumer’s
profits has been lower, but its
stock is now 30% higher than its
pre-covid highs, while Britannia
shares are up about 21%. In other
words, Tata Consumer’s is now
the top consumer goods stock in
the market this year.
Some analysts believe that
Tata Consumer’s good run is
likely to continue. “We expect
Tata Consumer’s India growth
Q1FY21 segmental revenue ( crore) Year-on-year growth (in %) (Right-hand scale) ers in US/ UK/ Canada increase percentage point.
1,200 21 out-of-home consumption of “While the numbers are good
1,000 18 beverages,” according to Credit amid this uncertainty, the stock
800
15 Suisse. movement seems like an overre-
600
12 The Indian beverages business action,” said an analyst com-
9 grew 11% in the June quarter, menting on Tata Consumer’s
400
6 benefiting from the strong dou- shares.
200 3
ble-digit growth in May and All is not hunky dory. “India
0 0
India India International Unbranded June. The India foods segment tea volume growth of 4% was
beverages foods beverages business grew 19% and saw high double- somewhat disappointing, given
Source: Company
digit growth each month of the the strength seen in some of the
SATISH KUMAR/MINT
quarter, despite operational other packaged foods busi-
rate to accelerate as supply chain increases in tea will kick in,” ana- challenges. International bevera- nesses,” point out analysts from
disruptions are behind and lysts from Credit Suisse Securi- ges accounted for the remaining JM Financial Institutional Secu-
in-home consumption of food ties (India) Pvt. Ltd said in a branded revenues, and grew 15% rities Ltd.
continues to grow because of the report. as consumers stocked up due to Investors need to watch how
consumer caution about eating However, not all business seg- the covid-19 pandemic. margins shape up. In the near-
out. Several levers such as distri- ments are firing away. The inter- Overall, earnings before inter- term, strong tea prices in India
bution expansion and price national business may play spoil- est, tax, depreciation and amorti- pose a threat to margins as well.

Mark to Market writers do not have positions in the companies they have discussed here
 NEWS MONDAY, 10 AUGUST 2020
NEW DELHI 05

158,000 e-consultations NEP: ASSESSMENT IS THE KEY

TO UNLOCK BETTER LEARNING
done during covid times EXPERT
quality learning by using assessment in all three
forms - for learning, of learning and as learning.
Gently layered on top of the current assess-
ment structure is the voluntary examination
VIEW offered by the National Testing Agency (NTA),
which itself is a fairly new institution. This could
Telemedicine service eSanjeevaniOPD gains traction due to various restrictions M E E TA W S E N G U P TA be used by universities to admit students, they
suggest. This examination, only a whiff of a sug-
Respond to this column at gestion right now, sits at the fulcrum of the edu-
Neetu Chandra Sharma feedback@livemint.com cation system in India. Done right, it has the
ANDHRA DEATH TOLL
neetu.s@livemint.com power to recalibrate both school outcomes and
CROSSES 2,000

T
NEW DELHI he new National Education Policy (NEP) higher education opportunities. For this to hap-
has demonstrated a clear will to move the pen, both the content of this examination, and
INDIA

C
ovid-19 is changing the needle away from the old world of learn- its acceptance across universities will be critical.
way people communi- 21 ESIC ing. This has been highlighted with the triad of Institutional changes are the third layer that
cate in their daily lives, 2,195,567 43,993 Deaths
hospitals
converted
multidisciplinary higher education, multiple supports this proposed transformation. The
reducing physical Total cases into dedicated options at senior school and multiple chances of NTA is already in place. A full-fledged national
interaction as much as covid-19 success in school leaving examinations. The assessment centre, called PARAKH, is now
possible to contain the spread of
1,513,315 638,259 hospitals: 10 focus on foundational learning, the inclusion of charged with the new approach to assessment,
Recovered Active cases points
the virus. Now, the health minis- bit.ly/2PB8eyG
the very young into formal learning and the including creating standards for the 60-odd
try’s initiative eSanjeevaniOPD, a emphasis on holistic learning are goals that are examination boards in the country. Combined
telemedicine service, is slowly GLOBAL baked into the policy. Even as institutional and with the school leaving exam suggested by the
gaining ground, with the portal structural reforms such as better teacher train- NEP, this can prove transformative and allow all
registering 158,000 online consul- 19,680,042 ing, separation of operations and governance, examination boards
tations over the past six months. Total cases and more, do their bit, the hidden key to change NEP brings in a to calibrate them-
Union minister for health and lies in assessment. well-defined selves in a way that
family welfare Harsh Vardhan, who
presided over a review meeting on 727,777 Pragmatically, the education train in India is
driven by exams and marks. All teaching is to the assessment has not been possible
before. With reliable
Deaths architecture
telemedicine services with states test, changes only in response to the key incen- and rigorous data, we
and Union territories on Sunday, 11,962,565 6,989,700 tive—marks in the test. The NEP gets that and that can prove may actually under-
said since last November, 23 states Recovered Active cases upends the rote learning cart by calling for transformative stand learning and
have launched the services cover- questions to now test for application of knowl- outcomes like never
Source: Union health ministry, states
ing 75% of the country’s popula- A health worker collects a swab sample in New Delhi on Sunday. AFP edge. This small shift is the lever needed for before.
tion, while others are in the process change. But it cannot do it alone. It is accompa- The National Assessment Survey (NAS) and
of rolling it out. The eSanjeevani States have set up dedicated hubs doctor services through eSanjeeva- tations, 67,000 were provided nied by both structural and institutional ele- the corresponding State Assessment Surveys
platform has enabled two types of in medical colleges and district hos- niOPD. Offered at no cost, this through eSanjeevani at AB HWCs, ments that will support the transformation. support this by evaluating schools, not students,
tele-consultations—doctor-to-doc- pitals to provide tele-consultation e-health service is rapidly gaining and 91,000 patient-to-doctor con- Another seemingly small but structural as part of PARAKH. It does so by anonymising
tor (eSanjeevani) and patient-to- to spokes such as sub health centres popularity as citizens in around 20 sultations through the eSanjeeva- change is the report card, which brings back the student results to test for system performance
doctor (eSanjeevani OPD). (SHCs) and primary health centres states are now consulting doctors niOPD mode. On an average, 5,000 best of the CCE (continuous and comprehen- and not individual students.This contrasts with
eSanjeevani is being imple- (PHCs), the ministry said. So far, without having to go to the hospital consultations are provided per day sive evaluation) with holistic assessment. This the plan to track individual students using
mented under the Ayushman Bha- 12,000 health professionals, physically,” said Harsh Vardhan. through both modes. The capacity supports more well-rounded activities during adaptive assessments for predictive value.This
rat Health and Wellness Centre including 2,800 doctors, have been Every day, around 250 doctors of these platforms has been school time since they are necessary for such is a red flag that raises the spectre of intrusive
(AB-HWCs) programme. It increased to 500,000 con- assessment. By reducing the importance of control, worse, an extension of the old tunnel
seeks to connect all WIDE COVERAGE sultations per day. The plat- summative marks in the report card, it helps vision, and should be pulled back to retain per-
150,000 health and well- form is hosting 40 OPDs, pivot the change while also keeping traditional- sonal agency. Individual information is for indi-
ness centres using the hub- AS many as 23 states THE telemedicine THE initiative seeks SO FAR, 12,000 including around 20 speci- ists happy. This approach has been proved to be viduals alone.
and-spoke model by have launched the
services, covering
initiative is being
implemented under
to connect all
150,000 health and
health professionals,
including doctors,
ality OPDs for gynaecology, successful in many progressive private schools Connecting the dots within the NEP, one
December 2022, he added. 75% of the country’s the Ayushman wellness centres by have been trained to psychiatry, dermatology, who have been doing this for a while. Indeed, finds a well-defined assessment architecture for
Under the model, a net- population Bharat programme December 2022 offer consultations ENT, pphthalmology, anti- many of the suggestions of the NEP are not as a National Assessment Strategy, almost as if
work will be established retroviral therapy for AIDS impractical as teachers fear. Most have been embedded in stealth mode. A strategy that can
comprising an anchor patients, and non-commu- practised and sustained in elite schools who drive fundamental change in a way that enables
establishment, or hub, which offers trained to offer consultations on and specialists are providing nicable diseases. sought and worked through different action at the level of state, school, teacher, and
a full array of services, and will be the national e-platform through eHealth services despite the lock- Meanwhile, India’s covid-19 approaches in their quest for quality education. scholar, without disrupting the deep, almost
complemented by secondary over 3,000 HWCs across 10 states. downs, he said. This service is avail- count was up to 2,195,567, with The focus on reducing pressure at the board existential faith in examinations, but works with
establishments, or spokes, which “Owing to the ongoing covid-19 able on Android apps. A patient 43,993 deaths on Sunday. The level, bringing choice of subjects, and system it constructively to improve learning. This
offer limited services, routing pandemic, the health ministry gets to see the doctor in around five country recorded the highest num- checks rather than individual scores are all an could well be the charge that shifts the needle.
patients needing more intensive launched the second tele-consulta- minutes after logging in, he said. ber of recoveries in a single day, dis- attempt to make assessments meaningful to stu- Meeta W. Sengupta is a fellow of the Salzburg
services to the hub for treatment. tion service, enabling patient-to- Out of the 158,000 tele-consul- charging 53,879 on Saturday. dent progress. The intent is to unlock better Global Seminar.

Pharma sales remain #PivotorPerish

flat, grow 0.2% in Jul

Leroy Leo
leroy.d@livemint.com
NEW DELHI
acute therapies remained sup-
pressed. Sale of cardiovascular
drugs were up 13.1%, at a HEALTHCARE
slightly slower growth rate
will have to take care
M
edicine sales in India compared to 13.9% in June,
were almost flat in July while anti-diabetic drugs
on a year-on-year posted 5.9% growth compared
basis although it to 8.5% in the pre-
has recovered The fall in sales of ceding month.
since the March to acute therapy However, anti-
May period when drugs indicates infectives contin-
the country was that people are ued to stay in the
under a strict
avoiding visiting red for the fourth
lockdown, straight month,
showed data from doctors at clinics down 10.2%. Sales
market researcher and hospitals of another acute
AIOCD-AWACS. therapy segment,
July drug sales gastrointestinal
were up 0.2% y-o-y to ₹12,124 drugs, also declined 2.4%.
crore, with cardiac care and The fall in sales of acute ther-
anti-diabetic drugs posting apy drugs indicates that people
healthy growth, albeit at a are avoiding visiting doctors at
slower pace compared to June. clinics and outpatient depart-
Growth was on account of ments of hospitals, with the fear
A playbook for growth in the new
chronic medicines as sale of of contracting coronavirus. normal. For Healthcare Sector.

Allocation to NPS slows

down in June quarter
FROM PAGE 1
year ago. “Outflows in NPS is
around 2.5% of inflows. All
kinds of customers are with-
drawing for medical reasons,
children’s education, etc., and
we do not see any other trend,”
said Sumit Shukla, chief exec-
utive of HDFC Pension Man-
agement Co.
“The overall inflow in April-
July has been satisfactory, but
withdrawals, too, have hap-
pened, which, in absolute
terms, is low; but it is higher
than last year,” said S. Bandyo-
padhyay, chairman of Pension
Fund Regulatory and Devel-
opment Authority of India
(PFRDA), which regulates
NPS. According to the Centre
for Monitoring Indian Econ-
omy, India’s urban unemploy-
ment rate stood at 9.15% in
July, against 12.02%, 25.79%
and 24.95%, respectively in the
previous three months.
“In April-July period, with-
drawal has been around ₹62
crore. The total inflow in the CEO WEBINAR
period is about ₹30,000 crore.
Withdrawal has happened
from all sectors, across govern- THURSDAY, 13 TH AUGUST 2020 | 5:45PM - 6:45PM
ment and private firms. This is
also because of the launch of
covid special partial with-
drawal scheme in NPS, which
was allowed by us to enable
customers to withdraw up to
25% from their funds invested
with us. Last year, the with-
drawals were lower during Dr Sangeeta Reddy Umang Vohra Dr Ashutosh Swapna Bapat Prashant Tandon
April-July. In EPFO, about Joint MD, MD & Global CEO, Raghuvanshi Senior Director, Founder and CEO,
₹33,000 crore was with- Apollo Hospitals Cipla MD & CEO, Sales Engineering, 1mg
drawn,” said Bandyopadhyay. Enterprise Ltd Fortis Healthcare Automation Anywhere
Due to covid‘s effect on
firms and the desperation to
conserve cash, the growth in www.livemint.com mint.live livemint live_mint livemint
the overall NPS sector has
remained flat in terms of the
number of investors.
06 MONDAY, 10 AUGUST 2020
NEW DELHI CORPORATE
VIRUS EFFECT
PM launches ₹1 trillion
‘Pharma needs more govt sops’ fund to boost agri infra
Leroy Leo even as business picks up. third. It has reduced our cash burn The policy is a step in the right
leroy.d@livemint.com Will these savings become a significantly. We are now optimiz- direction, but I think the incentives Sayantan Bera
NEW DELHI trend beyond the pandemic? ing by doing as many virtual calls as are still light. We will definitely need sayantan.b@livemint.com
I think the biggest savings would possible with a smaller sales force. additional incentives and more NEW DELHI

A
major change forced come in areas like SG&A (selling, We are basically living to fight investment than what is being dis-

P
by covid-19 on pharma- general and administrative another day. Other specialty prod- cussed. I think that the government rime Minister Narendra
ceutical companies was ucts like NaMuscla and biosimilars will be willing to consider further Modi on Sunday
in their interaction like Eternacept will not get amendments to make sure that it launched a ₹1 trillion agri-
with doctors, and impacted the same way and we are really works. culture infrastructure fund to
Lupin Ltd has now slashed its sales continuing with our plans. The US is your largest market. give a leg up to post-harvest
force to conduct its operations digi- In your earnings, APIs was the How does the US government’s management and marketing of

tally, managing director Nilesh
Gupta said. Gupta also spoke about
other changes like greater demand
for active pharmaceutical ingredi-
ents (API) as formulation manufac-
turers globally try to reduce
dependence on China, as well as the
US government order favouring
domestic essential drug sup-
plies. Edited excerpts from
an interview in Mint’s
Pivot or Perish series:
In your April-June
earnings, there was
an improvement in
margins, even
though sales were
down. What was
the reason?
The margins were
a function of the sav-
ings that we were
able to make in the
quarter and it’s
something that we
are going to work
hard to sustain
Boeing’s technical team to examine debris of crashed AI flight soon
Rhik Kundu (AAIB) has already started
rhik.k@livemint.com recovering transcripts from
NEW DELHI the black box of the ill-fated
flight to ascertain the cause of
Automation Growth
partner partner
expenses), in how we promote to
doctors, and the kind of advisers we
have. We plan to adopt a more digi-
tal approach. Nobody has travelled
in the last few months. We are now
looking at how much of that travel is
discretionary. How much can be
held off longer. The truth lies some-
where in between what was before
and what is now. We have started it
as a stream within Lupin to look at
embracing this new way of working.
We also did it as an industry, along
with Indian Pharmaceutical Alli-
ance. We are looking to embrace
this opportunity for the long term,
so that we don’t need to have the
same cost base we had in the past.
Does this pandemic delay your
plans for speciality generics and
biosimilars?
In specialty, Solosec (an anti-in-
fective) was definitely impacted. We
had to cut down our sales force to a
“We extend our deepest
condolences to the families
and friends of those who lost
their lives in the Air India
‘
only business to report a rise order affect your business? agricultural produce, in turn
in sales. Are you This is obviously helping improve farm-gate pri-
getting more limited to essential ces.
enquiries for API We are optimizing by medicines and gov- The scheme will provide bet- PM Modi transferred ₹17,100
supplies as com- doing as many virtual ernment buying. ter warehousing and cold stor- crore to farmers under the
panies plan to calls as possible with But it is a step in the age facilities for farmers, Modi PM-Kisan scheme. PTI
reduce their wrong direction. said, adding, new jobs will be
dependence on a smaller sales force. Once it goes in that created as food processing and years—₹10,000 crore in
China? We are basically living direction, what post-harvest facilities are set up 2020-21, and ₹30,000 crore in
One of the rea- to fight another day stops it from in rural areas. The scheme will the next three years.
sons for outper- becoming a longer enable startups to scale up their The launch of the infrastruc-
Nilesh Gupta
formance of APIs MD, Lupin Ltd
list? operations and India to build a ture fund follows a collapse in
was we were able to Large global global presence in organic and wholesale prices of perishable
pass on input price generic players like fortified food, he said. produce amid India’s stringent
increases to customers. The move Lupin will capitalize on the oppor- The fund was launched with lockdown between April and
away from China also opened tunity. Lupin has manufacturing in ₹1,128 crore of new loans dis- June to control the spread of
opportunities for people from other the US and can set up plants any- bursed to more than 2,200 covid-19.
geographies, including Lupin. I where in the world. cooperative societies. During Other than those growing
think it has been some time coming. This order is not an issue for indi- the event, the Prime Minister fruits and vegetables, dairy
Even covid notwithstanding, the vidual companies, but for India. also transferred ₹17,100 crore farmers too were affected due
last two or three years has seen a India was a reliable partner even in to farmers under the PM-Kisan to a fall in milk procurement
resurgence of API. This is a great the covid-19 pandemic, ensuring direct income assistance prices following the closure of
opportunity, especially with some supplies to the US on time. scheme. hotels and restau-
government backing, to ramp up. I think the Indian government Under the The scheme will rants.
Will Lupin invest in API plants has to step up advocacy to ensure we infrastructure provide better In his address
under the production-linked are recognized as a preferred sup- scheme—part of warehousing and following the
incentive scheme? plier even in such an order. the federal gov- cold storage launch, the Prime
ernment’s Minister said the
facilities for
Atmanirbhar government is
Bharat package farmers, focused on small
PM Modi said
announced in
May—banks and
financial institu-
farmers and has
brought in a new
set of laws on agri-
tions will provide ₹1 trillion in culture marketing, which will
be recovered. ratory in Delhi. loans to cooperative societies, help create a national market
“We are also going to talk to The mortal remains of the farmer producer companies, for farm produce and give
Boeing to examine the air- deceased, including the self-help groups, entrepre- farmers the choice of selling
craft’s original equipment and pilots, were also handed over neurs, startups and infrastruc- their harvest at the farm-gate.

A
technical team from
Boeing Co. is likely to
soon examine the
debris of the 787-800 jetliner
which crashed on Friday after
skidding off the tabletop run-
way while landing at the Koz-
hikode airport.
Meanwhile, the civil avia-
tion ministry’s Aircraft Acci-
dent Investigation Bureau
the accident.
Boeing said it was in touch
with Air India and has offered
support.
“Boeing is prepared to pro-
vide a technical team to assist
the US National Transporta-
tion Safety Board, in accord-
ance with ICAO Annex 13
guidelines, as the Directorate
General of Civil Aviation
Boeing said its in talks with Air
India, offering support. REUTERS
(DGCA) of India conducts its
investigation,” the company
said in a statement.
Express accident at Kozhik-
ode International Airport.
Our thoughts are also with the
passengers and crew who
were injured, and we hope for
their swift recovery,” it said.
Arun Kumar, India’s
director general of civil avia-
tion, on Sunday told news
agency ANI that transcripts
from the black box will soon
check for defects. Only after
conducting a thorough and
unbiased probe, can we tell
what exactly happened,”
Kumar told the news agency.
Aurobindo Handa, director
general of AAIB, did not
respond to Mint’s queries.
Earlier in the day, the black
box was brought from the
crash site to the DGCA’s labo-
to their families.
An Air India Express flight
from Dubai carrying 190 peo-
ple overshot a wet runway
while landing at the Kozhik-
ode airport in Kerala on Fri-
day evening and crashed into
a ravine, The accident left at
least 18 people dead including
the two pilots and scores
injured.
ture providers. Measures like contract farming
The objective is to provide will protect farmers from price
medium to long-term debt volatility, Modi said.
financing for setting up of post- The Prime Minister also said
harvest infrastructure and that new facilities like Kisan
community assets for market- Rail flagged off earlier in
ing of farm produce. According August will help farmers con-
to the guidelines, all loans up to nect to distant markets, allow-
₹2 crore will be disbursed with ing hassle-free transport of
a 3% interest subsidy. The loans farm produce between states
will be disbursed over four like Bihar and Maharashtra.

Timeline of crashes, mishaps involving Boeing 737-800 Plane crash at Kozhikode puts
Rhik Kundu
rhik.k@livemint.com
spotlight on tabletop airports On 30 July 2011, Caribbean people.
Airlines Flight 523, operating a Kenya Airways Flight 507,
NEW DELHI Boeing 737-800 overran the carrying 105 passengers and
runway at Cheddi Jagan Inter- nine crew members lost con- FROM PAGE 1 on a runway that’s 8,500-foot tems (EMAS) at seven tabletop

T
he Boeing 737-800,
launched in 1994 and
considered a workhorse,
has been one of the most popu-
lar aircraft in the sky, but it has
also been involved in several
fatal accidents over its long
period of service, including Fri-
day’s mishap at the Kozhikode
airport.
It is used by several airlines,
including Air India Express,
SpiceJet and Vistara in India,
and RyanAir, American Air-
lines and Singapore Airlines’
subsidiary SilkAir, among oth-
ers, globally.
On 5 February, a Boeing 737-
800 operated by Turkish
no-frills carrier Pegasus Air-
lines crashed after overshoot-
ing the runway in Istanbul,
amid heavy rains and strong
winds, killing three of the 183
people on board.
The Boeing 737-800 used by
Ukraine International Airlines
Flight 752, a scheduled interna-
Boeing 737-800 planes are pictured during assembly. It is used by
several airlines, including AI Express, SpiceJet, Vistara. BLOOMBERG
tional passenger flight from
Tehran to Kiev, was shot down
shortly after take-off killing 176
passengers and crew members
on 14 January.
A Boeing 737-800 operated
by Air Nuigini on the Microne-
sia-Papua New Guinea route
landed short of the runway at
Chuuk International Airport in
Weno killing one person on 28
September 2018.
On 19 March 2016, Flydubai
Flight 981, a scheduled interna-
tional passenger flight from
Dubai to Rostov, operating a
Boeing 737-800 aircraft,
crashed during an aborted
landing attempt at the Russian
airport, resulting in the death of
all 62 on board.
A Boeing 737-800 operated
by Lion Air crashed in the sea
while attempting to land at
Indonesia’s Denpasar airport in
April 2013. However, all 101
passengers and seven crew
members were evacuated.
national Airport, Georgetown, tact and crashed into a swamp long. “At the Kozhikode tabletop runways—Kozhikode and Kan-
Guyana, but there were no during a flight to Nairobi, as one of India’s “most distin- airport, aircraft normally land at nur (Kerala), Mangalore (Karna-
fatalities. Kenya, from Abidjan, Côte guished, experienced com- 800 feet, but IX1344 landed taka), Pakyong (Sikkim), Shimla
On 22 May 2010, Air India d’Ivoire, after making a sched- manders”. beyond 3,000 feet, resulting in and Kullu (Himachal Pradesh)
Express Flight 812, a Boeing uled stop at Douala, Cameroon Airport infrastructure may the accident,” the DGCA official and Lengpui (Mizoram).
737-800, overran the runway on 5 May 2007. No one sur- be another factor. said. “The incident is being EMAS, designed to stop
while landing at vived. “Aqua planning (drainage of investigated. The causes of the planes from overshooting the
Mangalore Inter- Despite the On 29 Septem- water) and rubber deposits at accident will be runway, have been
national Airport, accidents, a pilot ber 2006, Gol tabletop airports are huge out soon.” For pilots, installed at US tab-
killing 158 pas- with Air India Transportes safety threats as these can lead The airport at landing aircraft letop airports, and
sengers, includ- Express said that Aéreos Flight to poor braking and aircraft Kozhikode has on tabletop one senior airline
ing six crew mem- 1907, a brand-new overshooting the runway,” said two runways, both runways is a official told Mint:
safety is not a
bers. Only eight Boeing 737-800 another senior pilot, who, too, 2,700 metres in “The accident
concern with stiff ask in
people survived. with 154 people on didn’t want to be named. length. They have could have been
Ethiopian Air- the aircraft board, had a mid- Puri said on Saturday issues a safety feature poor weather avoided if EMAS
lines Flight 409, a air collision with like excessive rubber deposits, called Runway conditions system had been
Boeing 737-800 an Embraer Leg- water stagnation, and cracks at End Safety Area put in place by air-
aircraft, crashed into the Medi- acy 600 in Brazil killing all. the airport that were routinely (RESA) of 240 ports which have
terranean Sea after take-off However, safety is not a con- flagged by DGCA had been metres, as mandated by the runways in critical places like
from Beirut Rafic Hariri Inter- cern with Boeing 737-800 addressed by airport operator International Civil Aviation on top of a hill. However, myo-
national Airport on 25 January planes, said a pilot with Air Airports Authority of India Organization, which limit the pic views of cost and high iner-
2010, killing 98 people. India Express. “Crashes at Man- (AAI) before the crash. consequences when aeroplanes tia prevent action being taken
On 25 February 2009, Turk- galore and Kozhikode hap- According to a senior official overrun the end of a runway. until forced.”
ish Airlines Flight 1951, from pened amid adverse weather at the Directorate General of Both are Instrument Landing Another pilot, who analysed
Istanbul, crashed in a field near conditions, high tailwind and Civil Aviation (DGCA), the avia- System (ILS) CAT 1-enabled. Friday’s wreckage pictures, said
the Polderbaan during a land- low visibility. Boeing 737-800 tion watchdog, the crash hap- Experts are calling for India photographs of the engine show
ing attempt at the Schiphol Air- is otherwise a safe plane,” he pened because the aircraft to pave runways with engi- the thrust lever position was ‘full-
port in Amsterdam, killing nine said requesting anonymity. landed at the 3,000-foot point neered materials arresting sys- forward’.

mint cially in times of the lockdown, said Harsh Jain, co-founder of Govt proposes separate emission
Groww. According to data from Association of Mutual Funds in
Sonia to remain interim chief till
SHORT TAKES India, the number of folios rose by 1.79 million to 9,15,42,092 at the
end of June quarter from 8,97,46,051 at the end of March quarter.
In comparison, the 45-player industry had added 2.6 million folios
poll process implemented: Cong
HT
norms for agricultural machinery
New Delhi: The government on
Sunday said it has issued draft
HT

₹68,000 crore of loans released
under discoms liquidity package
HT New Delhi: As much as
₹68,000 crore worth of loans
under ₹90,000 liquidity pack-
age announced for stressed
power distribution utilities have
been sanctioned, which is
expected to create buoyancy in
the sector. The finance minister
had announced the liquidity
infusion in May.
PTI
Mutual funds folio count surges by
1.8 million in Apr-Jun quarter
New Delhi: The mutual fund industry has added 1.8 million inves-
tor accounts in three months ended 30 June, taking the total tally
to 9.15 crore, amid volatile market conditions. A big chunk of this
growth in folio generation is driven by digital platforms—espe-
in March quarter. PTI
EY ropes in senior Credit Suisse
executive Samir Ojha
New Delhi: Professional services firm EY has roped in Samir Ojha
of Credit Suisse to join as partner in its investment banking team,
said two people aware of the development. Ojha has spent nine
years with the Swiss bank where he led the financial coverage for
India operations. He is credited to have created mergers and acqui-
LINKEDIN sitions (M&A) franchise for the
Zurich-headquartered investment
bank. An emailed query sent to EY
remained unanswered until the
publishing of this article. Prior to
Credit Suisse, where Ojha was the
director–investment banking, he
worked as associate vice president
at Kotak Investment Banking. ISHITA
GUHA
Read more on livemint.com
notification for separate emis-
sion norms for agriculture
machinery and construction
equipment vehicles. The notifi-
cation also provides for chang-
ing the nomenclature of emis-
sion norms from Bharat Stage to
TREM Stage to avoid any confu-
sion. PTI
US tech giants, including Amazon,
New Delhi: A day before Sonia Gandhi completes one year
as the Congress chief, the party on Sunday said she will con-
plan pushback on India’s data curb
tinue in her role till the new party president is elected. Gan- New Delhi: India’s plan to regulate “non-personal” data has jolted
dhi had returned as party president on 10 August last US tech giants Amazon, Facebook and Google, and a group repre-
year.Top Congress leaders are of the view that the party senting them is preparing to pushback against the proposals,
needs a full-term president and there is a growing chorus, according to a letter seen by Reuters.The US-India Business Coun-
particularly from the younger brass, demanding that former cil (USIBC), part of the US Chamber of Commerce, calls imposed
chief Rahul Gandhi returns to the top post. ANUJA data sharing “anathema” to promoting competition and says this
Read more on livemint.com undermines investments made by companies to process and col-
lect such information, in a draft letter for India. REUTERS
 NEWS MONDAY, 10 AUGUST 2020
NEW DELHI 07

Phonemakers
in India build
capacity to tap
global orders
FROM PAGE 1
According to government
estimates, global and Indian
companies that have applied
for the PLI scheme will pro-
duce goods worth ₹11.5 trillion
over five years and export about
half of the production.
The scheme extends an
Aramco is still working on Ball in govt’s court
after RBI status quo
deal to invest $15 bn in RIL on monetary policy
FROM PAGE 1
Discussions are still on to buy a stake in oil-to-chemicals business, says Aramco CEO
Another senior government
official said there is a plan to
Kalpana Pathak launch a programme that will
kalpana.p@livemint.com offer jobs to the urban poor.
MUMBAI The next one month will be
crucial for the government to

incentive of 4% to 6% on incre-
mental sales of goods manufac-
tured in India under the tar-
geted segments.
Smartphone makers have
already begun investing in
expanding capacities and their
manufacturing capabilities to
move beyond just assembling
phones, to a more “design-led”
manufacturing approach that
includes software and hard-
ware design, and product aes-
thetics.
“We also have to extend our
service to the electronics man-
ufacturing sector (EMS). And
that’s the reason why we’re
investing in Sojo as well for
EMS,” said Shailendra Nath
Rai, co-founder of the Lava
brand of smartphones. Lava
and its unit, Sojo Manufactur-
ing Services, have also applied
for the PLI scheme. EMS
includes the manufacturing of
display panels, camera mod-
ules, silicon wafers and other
parts.
Lava plans to produce as
many as 100 million smart-
phones annually in the next few
years, while Dixon’s Lall said the
company will be able to make
almost 70-to-80 million smart-
phones per year soon. Both did
not give a specific time frame.
To attract large mobile
phone vendors to India, the
country needs to ramp up its
manufacturing capacity, Rai
said, adding that Lava is already
investing in building Sojo’s
capacities to meet future
requirements.
T
he Saudi Arabian Oil Co. firm up its plans now that the
(Saudi Aramco), the Delhi’s own RBI has provided a window to
school
world’s largest crude oil education
recast stressed assets without
producer, said it’s still board to be having to classify them as non-
working on a deal to buy operational by performing, said a third gov-
a $15 billion stake in Reliance next year: ernment official, who also Economists say another round
Sisodia
Industries Ltd’s (RIL) oil-to-chemi- bit.ly/33Haw7R
spoke on condition of anonym- of stimulus following on the
cals business, Bloomberg reported. ity as the discussions are not earlier ₹20 trillion is needed.MINT
“We are still in discussions with final. “We will get a clearer pic-
Reliance,” Aramco chief executive ture in the next one or two contain the spread of coronavi-
officer Amin Nasser said on a call months,” this official said. rus so that economic recovery
with reporters on Sunday. “The A revival of demand has to be can take place, he said.
work is still on. We will update our the focus of the government Economists are of the view
shareholders in due course about measures, said D.K. Aggarwal, that another round of stimulus
the Reliance deal.” president of PHD Chamber of following the ₹20 trillion pack-
Aramco reported a 50% drop in Commerce and Industry. “If age announced earlier is
net income for the six months demand is not reviving in the needed. Austerity is not the
ended 30 June. next one month, a 20% cut in solution to the coronavirus cri-
RIL had announced plans to sell GST rates across slabs would be sis and India needs to offer
a 20% stake in its oil-to-chemicals a great booster to revive con- more relief measures to house-
(O2C) business to Saudi Aramco as Aramco will update shareholders in due course about the Reliance deal, said CEO Amin Nasser. BLOOMBERG sumption sentiment in the holds and businesses, Mint
part of its deleveraging exercise last economy,” said Aggarwal. He reported on 28 July, citing
fiscal. This July, however, RIL’s In a press statement published quarter results,” Nasser said. petrochemicals, fuel retail and avia- also cautioned against local former RBI governor Raghu-
chairman and managing director on Sunday, Saudi Aramco said its The covid-19 pandemic has tion fuel, and bulk wholesale mar- lockdowns that disrupt eco- ram Rajan.
Mukesh Ambani said due to net income plunged to $23.2 billion resulted in substantial reductions keting businesses together with its nomic recovery After a bounce-
unforeseen circumstances in the in the first half of 2020, down by in consumer and business activity assets and liabilities. and consumption. The need now is back in June,
energy market, the deal has not half from $46.9 billion over the and significantly reduced demand RIL has also laid out a 15-year The need now to ensure speedy high-frequency
progressed as per the original time- same period in 2019. for crude oil, natural gas and petro- vision for itself to build a new is to ensure implementation macro indicators
line. Aramco reported a 73.4% fall in leum products. It has thus delayed energy company whose focus will speedy imple- of the steps showed a deceler-
“Nevertheless, we at Reli- be to recycle carbon diox- mentation of the
announced by the ation in activity in
ance value our over two- STAKE SALE ide, create value from plas- steps announced July as the pan-
government and demic spread rap-
decade-long relationship tic, and build clean and by the govern-
with Saudi Aramco and are RIL had announced IN July, Mukesh ARAMCO, the THE Saudi Arabian affordable energy with ment and RBI, the Reserve Bank idly. India’s man-
committed to a long-term plans to sell a 20%
stake in its oil-to-
Ambani said the deal world’s largest crude
has not progressed producer, reported
company reported
a 73.4% decline
hydrogen, wind, solar, fuel including the ufacturing activity
partnership. We will chemicals (O2C) as planned due to a 50% drop in net in net profit in the cells and battery. planned infra- in July contracted
approach the NCLT business to Aramco the pandemic income for H1 2020 second quarter Ambani, in his address structure projects with ₹100 at a faster pace than in June,
(National Company Law on 15 July, said that RIL trillion investment, said Chan- signalling local lockdowns
Tribunal) with our proposal aims to become net carbon drajit Banerjee, director gen- imposed across the country are
to spin off our O2C business into a second-quarter net profit and said the oil major’s deal with RIL. zero by 2035. eral of the Confederation of impacting businesses.
separate subsidiary to facilitate this it expected capital expenditure for The RIL board had this April While RIL will remain a user of Indian Industry. “This spend- Elizabeth Roche, Asit Ranjan
partnership opportunity. We 2020 to be at the lower end of a $25 approved a scheme of arrangement crude oil and natural gas, it is com- ing must be fast-tracked to Mishra, Gireesh Chandra
expect to complete this process by billion to $30 billion range. for transfer of O2C undertaking of mitted to embracing new technolo- achieve as much as possible in Prasad, Shreya Nandi, Prashant
early 2021,” Ambani said at the “Strong headwinds from the company to Reliance O2C Ltd. gies to convert its carbon dioxide the next two years,” said Baner- K. Nanda and Utpal Bhaskar
company’s annual general meeting reduced demand and lower oil pri- The O2C undertaking of the emissions into useful products and jee. District-level spending on contributed to the story.
on 15 July. ces are reflected in our second- company comprises of refining, chemicals, he said. healthcare is now critical to feedback@livemint.com

Sebi probes ABB Power’s open offer Chinese brands hold Demand story is still dark as the
FROM PAGE 1
back spending on ads recent upticks are just fireflies
offer price has considered the
low valuation at the time due
to covid-19 and, finally, the
precedence of having an inde-
pendent valuation in earlier
instances as seen in the case of
Federal-Mogul Goetze (India)
Ltd last year.
“Sebi is conducting its routine
review as customary prior to
granting clearance. ABB
remains in close dialogue with
the regulator on the matter,”
said ABB in an emailed response.
ABB Power, which was hived
off from ABB India Ltd when
the parent sold its power grid
business to Japan’s Hitachi Ltd,
debuted on exchanges in
March through a demerger. In
this deal, the merchant banker
had considered the date of list-
ing as 30 March and also con-
sidered the target company as
infrequently traded.
The mandatory open offer
was announced in June jointly
by parent ABB Group and Hita-
ABB Power debuted on the
exchanges in March through a
demerger. MINT
chi for acquiring 25% of the
public shareholding of ABB
Power at ₹865.92 apiece.
The minority investors
claimed in their complaint to
Sebi that ABB was frequently
traded at the time of the main
transaction in 2018, and conse-
quently, the resultant com-
pany must be treated as a fre-
quently traded company and
its valuation should have been
done based on that price
instead of March 2020.
“The manager to the offer
has accepted valuation as on 24
March 2020, the date on which
the global markets were at an
all-time low, thus making the
valuation less than it should
be,” the minority investors said
in their complaint, a copy of
which was reviewed by Mint.
They also claimed the deal has
placed minority investors at a
disadvantage as compared to
promoters, who got an exit at
the much higher valuations of
December 2018.
The investors also argued
that interest should be added to
the open offer price. They
claim that the open offer was
triggered in December 2018
when the demerger was
announced. The company
announced the open offer 15
months later in March 2020.
An ABB spokesperson said
the ABB Power was valued by
two independent experts—EY
and Bansi S. Mehta.
FROM PAGE 1 estimates put out before the FROM PAGE 1 More Indians believe that “While agriculture’s share
covid outbreak. On second spot their employment prospects in GDP (gross domestic prod-
even during the incursions in are home appliances firm Haier on eating out or travel. may improve in the next one uct) is not large, it has a wealth
Ladakh in May and June but and technology brand Lenovo. Indeed, the British govern- year and, therefore, incomes, effect and the dependence is
they put a stop to advertising as Emails sent to these firms on ment said last month that it too. higher in terms of employ-
anti-China feelings grew. their advertising plans would bear 50% of the bill for This could be a direct out- ment,” said Joshi.
“Vivo pulled out of the title remained unanswered. those eating out during the come of the national lockdown But this, too, is under threat
sponsorship of IPL and proba- “Most of these brands are on month of August, to alter con- being lifted in June. as the pandemic travels into
bly on-air spon- red alert and sumption patterns after The unlocking the hinterlands
sorship, too. The Realme, Oppo, therefore decided months of lockdowns. of the economy The consumption already having a
trend may con- Vivo and Xiaomi, to lie low and wait In India, regional lock- meant that growth fuelling weak health net-
tinue and we will which together for the situation to downs continue. Metro cities e m p l o y m e n t the economy over work.
see fewer Chinese spent ₹1,500 cr on evolve,” said San- and urban centres are witness- o p p o r t u n i t i e s the past few years While the rural
brands on big deep Goyal, chair- ing intermittent lockdowns as that evaporated
ads in 2019, have was mostly led by sector may pro-
properties like man, Mogae a stubborn infection curve is in cities due to vide a much-
Kaun Banega cut spending on Media, a Mumbai- challenging local govern- the pandemic discretionary needed boost to
Crorepati com- print and TV ads based marketing ments. have come back spending demand, the driv-
pared to previous and communica- “Rising cases are leading to slowly with the ing force of urban
years,” he added. tion agency. intermittent local lockdowns opening up of discretionary
Smartphones are the hottest Firms with substantial Chi- and increased consumer risk small businesses, construction demand would be largely
category with investments of nese investment, such as e-learn- aversion is resulting in a activity and even services in absent.
₹2,500-2,700 crore annually. It ing platform Byju’s and online bumpy recovery path,” some cases. Abheek Barua, chief econo-
has the largest share of roughly food ordering sites Swiggy and warned analysts at Nomura But companies need spend- mist at HDFC Bank Ltd, puts it
4% of the overall Indian adver- Zomato, have been promoting Financial Advisory and Securi- ers. Analysts hope that the vil- in a pithy comment: “Things
tising expenditure, which was themselves on digital platforms, ties (India) Private Ltd. lages generate spending faster may get worse for the econ-
expected to touch ₹75,952 which are cost-effective and So what were consumers than urban centres, given the omy as the pandemic is not
crore by 2020, according to have high return on investment. hopeful about? upbeat outlook on agriculture. under control.”

Central govt may cut HNI holdings in Nifty companies soar in Q1 Now, defence ministry
threshold for gratuity Nasrin Sultana
nasrin.s@livemint.com
3.61% quarter-on-quarter.
“Equity markets sharply
61.79%, while HNI holdings fell
in 691 companies, according to
goes vocal for local
MUMBAI declined because of covid-re- primeinfobase data, part of
FROM PAGE 1 “There are two options—pro- lated sell offs, which resulted in Prime Database group. FROM PAGE 1 foreign technology partner

H
rata basis or proportional oldings of high net- valuations turning attractive in Companies that saw the under the strategic-partner-
Gratuity payments to staff change for a few sectors, or a worth individuals late March. As valuations highest increase in HNI hold- almost ₹1.3 trillion each will be ship model.
are equivalent to 15 days of sal- reduction in the five-year (HNIs) in 479 compa- became attractive post steep ings in percentage terms in the procured for the army and the The air force aims to place
ary for each year an employee threshold for all sectors. nies in the Nifty 500 index corrections, investors with last quarter were Euro Ceram- air force, while items worth orders for 123 light combat air-
has spent at an organization. Demand for the second option climbed to at least a 10-quarter strong risk appetite favoured ics, Reliance Naval Engineer- almost ₹1.4 trillion will be pur- craft MK 1A worth approxi-
The changing nature of jobs has more takers in the normal high in the April-June period. buying stocks in following ing Ltd, Sundaram Multi Pap chased by the navy, defence mately more than ₹85,000
makes this a discourse with Market data showed the months. Many investors made Ltd. HNI holdings in these minister Rajnath Singh said in crore from Hindustan Aero-
necessity, said Labour market experts and econ- ownership of HNIs in the com- re-allocations in their portfolio companies stand at 29-61% in a series of tweets on Sunday. nautics Ltd.
another govern- experts said the omists. The stand- panies under review for NSE by re-balancing equities,” said the June quarter. Even beaten The list includes “not just The army is expected to
ment official, who five-year ing committee has 500 index was 3.17% by per- an analyst, seeking anonymity. down stocks such as Reliance simple parts but also high-tech- place an order for 200 wheeled
also declined to threshold is suggested to lower centage shares in the June By value, HNI holdings in 479 In the three months ended Capital and Videocon Indus- nology weapon systems such as armoured fighting vehicles
be named. The
outdated and no it to 1-3 years from quarter compared to 3.09% in companies was 1.69% or ₹2.20 March, benchmark indices had tries Ltd saw an increase in HNI artillery guns, assault rifles, cor- worth more than ₹5,000 crore,
official said fixed- the current five the previous three months, trillion in April-June period. MINT crashed around 29% with a holdings of 23.91% and 20.28%, vettes, sonar systems, light the ministry said.
term employ- longer serves the years,” the second while it was 2.98% in the same more than 20% slump in a sin- respectively, by end-June. combat helicopters, transport “The embargo on imports is
ment will increase interest of staff official said. period last year. By value, HNI 1.84% by June-end from 1.78% gle day in the month while the “After the rally from March aircraft, radars and other items planned to be progressively
going forward, A labour minis- holdings in these companies in March. In absolute value markets gained nearly 19% in 20 lows, the Nifty at 21 times to fulfil the needs of our implemented between 2020 to
more so after the try spokesperson was 1.69% or ₹2.20 trillion in terms, HNI holding was ₹2.50 the April-June period. price to earnings (PE) is now defence services,” Singh said. 2024. Our aim is to apprise the
pandemic. The Industrial Rela- said he has no official informa- the June quarter from 1.68% or trillion in April-June, an On an overall basis, HNI trading at a premium to its The ministry said the navy defence industry of the antici-
tion Code has also favoured tion about the talks. The standing ₹1.76 trillion in the previous increase of 28.12% over the pre- holdings went up in 669 com- long-period average. However, will place orders for six subma- pated requirements of the
fixed-term employment, echo- committee on labour in its report quarter. vious quarter. HNI ownership panies listed on NSE in the last it is not looking as attractive as rines at an approximate cost of armed forces so that they are
ing a school of thought that job on social security code suggested For 1,594 firms among all by value percentage for all quarter. The average stock it did in March,” said analysts at ₹42,000 crore. This is to be better prepared to realize the
creation is more important the expansion of gratuity to all listed companies on the NSE, listed firms went up to 3.73% in price of these companies in the Motilal Oswal Financial Servi- produced by an Indian com- goal of indigenization,” Singh
than job protection. segments of the workforce. HNIs’ holdings increased to the quarter ending June from same period increased by ces Ltd. pany in collaboration with a said.
08 MONDAY, 10 AUGUST 2020
NEW DELHI

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

RETURN OF THE RUMBLE

IN THE VC JUNGLE
There are signs of a V-shaped recovery in venture funds investing in startups. Will the broader economy play ball?

From left: G.V. Ravishankar, managing director, Sequoia Capital India; Harsha Kumar, partner, Lightspeed India; and Subrata Mitra, partner, Accel Partners.

Mihir Dalal many unicorns. Ergo, Indian internet
mihir.d@livemint.com startups—and their backers—could avoid
BENGALURU widespread value destruction that looked
inevitable earlier this year.
Sequoia Capital, Accel Partners and Light-
speed established themselves as the most
powerful venture investors, in parallel to
the dominance that the major American
ment partners and entrepreneurs who
mint
SHORT pass on promising deals. These factors
STORY that help bring them higher (and better)
deal flow in normal times only exert more
ing—another distinct feature of this
downturn—although it is concentrated in
companies that have gained ground dur-
ing the pandemic.

W
hen covid-19 began With large amounts of global capital tech firms like Google, Facebook, Amazon influence during crises. Ed tech startups, Byju’s and Vedantu,
spreading rapidly in available, growth will be rewarded, espe- and Walmart have built in their respective WHAT “When deal volumes are lower, the top which raised capital last month, are
India in March, Sanjay cially at tech companies that are expand- sectors in India. funds end up capturing more deals already in talks to receive fresh funds from
Mehta deferred his ing their reach, said G.V. Ravishankar, The pandemic is allowing these funds VCs are again spending more because they can always outbid smaller investors. Gaming and content startups,
fund 100X.VC’s second managing director, Sequoia Capital India. to consolidate their power, especially with time hunting for deals. While funds,” Inventus’ Doshi said. “That hasn’t Dream11, MX Player, DailyHunt and Shar-
batch of startup investments. It was essen- “We’re not seeing (a significant fall in the freeze on Chinese capital that was overall deal volumes are much happened so far, but we’ll have to see.” echat are all in talks to raise capital at
tial to first figure out how the firm’s exist- startup valuations) right now, and if the US emerging as a rival network. lower than pre-covid levels, Another spoiler for independent funds higher valuations. Software and payments
ing portfolio would cope with the pan- continues in this way, where markets and In July, Sequoia announced a fresh sum cheque sizes and valuations have is that exits, already short in supply, are startups, too, are seeing strong investor
demic. particularly technology stocks are doing of $1.35 billion to invest in India and largely held firm being delayed. With late-stage invest- interest.
As lockdowns stretched far longer than so well, we don’t know if there’ll be any Southeast Asia. Its asset under manage- ments declining in most sectors, second- Still, on the whole, many more startups
what he had initially assumed, 100X.VC significant correction,” he added. ment in India jumped to about $5.5 bil- ary share sales, which have become the are struggling than are doing well. Most
reluctantly drew up a new deal-making Though venture funds seem to have lion—many times higher than most of its AND biggest source of exits, are expected to fall haven’t seen revenues recover to pre-
process. Mehta and his colleagues would taken the covid-19 crisis in their stride, it peers. Of this, nearly $3.5 billion has come too. The cutback by Chinese investors and covid levels. Distressed sales, consolida-
do up to eight Hangout calls with entre- is triggering some major changes within since 2015, more than the next four funds The pandemic is allowing US SoftBank will further depress the second- tion and startup closures are rising, even
preneurs instead of the one or two meet- the business. In sectors like digital adver- combined. funds like Sequoia Capital, Matrix ary market. if lesser than previously thought.
ings they would have done in the past. tising, e-commerce and software prod- In April, Lightspeed US raised $1.5 bil- Partners and Lightspeed to As a result, most VCs are expected to But the experience that investors and
They would conduct far more extensive ucts, the pandemic has had a deep, uneven lion to invest in mature startups in India consolidate their power, face delays in returning funds, and will entrepreneurs have accumulated from
background checks on founders including impact that has increased the dominance and other countries outside the US. Light- especially with the freeze on likely seek one or two-year extensions to navigating past cycles is helping. Coming
checking credit scores, and ask for tax of the biggest companies like Amazon, speed India is separately raising a new Chinese capital previous fund vehicles, which typically into the present downturn (before the
compliance proof. Facebook, Google and Microsoft. In ven- fund this year—its third such vehicle in run for eight or ten years. pandemic), many mid-stage and late-stage
In this way, Mehta’s team has finalised ture capital, too, something similar is five years. However, investors insisted that these internet companies, having seen previous
about 10 new deals, all with entrepreneurs afoot. At the same time, fund-raising for many BUT factors are unlikely to lead to a shakeout in cycles, had stocked up on capital. And
they have never met in person. local VCs has become problematic. Mint venture capital. “Generally, investors in most startups responded quickly to the
His experience will resonate with other CONCENTRATION OF POWER learns that several independent funds Though the global glut in capital is VC funds don’t take a 1 or 2-year view. pandemic by conserving cash.
keeping funding taps flowing for
venture capitalists (VCs). At the start of the
pandemic, investors had frozen new U ntil 2014, with the exception of Accel
Partners, Silicon Valley-based global
investments, pulling term sheets and investors like Sequoia Capital, Matrix
including Stellaris Venture, Chiratae Part-
ners, Blume Ventures, India Quotient and
Inventus Partners India will be forced to
now, a higher-than-expected
economic contraction could
They take a much longer term view that
spans a decade or more,” said Tarun
Davda, managing director, Matrix Part-
“As soon as the pandemic hit, investors
and entrepreneurs got together and
immediately drew up cost-cutting strate-
ordering founders to cut costs. The few Partners and Lightspeed weren’t firm delay fund-raising (including for opportu- force more startup closures and ners India. “Most investors believe that gies to lengthen their companies’ run-
VCs willing to invest were demanding cut- believers in India’s tech entrepreneurship nity funds) either this year or in 2021. distress sales there will be a further acceleration in digi- way,” said Harsha Kumar, partner, Light-
price deals, and there was unanimity that scene. They only invested part of their Attracting limited partners (LPs)— tal adoption across sectors leading to speed India. “Their quick reaction has
the next year or two would be a bleak funds in internet companies. Some like investment firms based in the US, Europe increased VC activity.” positioned many startups to see out the
period for internet startups and investors. Canaan Partners and Kleiner Perkins gave and Asia that invest in VCs—takes any- agers, cutting some who haven’t per- next year.”
But within months, the venture busi- up on the market entirely. where from one to three years. With travel formed and increasing allocations to those THE ART OF THE DEAL Those companies that have enough
ness has largely returned to normalcy, as
greed trumps fear.
Tech investing was dominated by Tiger
Global, a New York-based investment
Investor confidence has revived—one firm whose prolific, high-risk bets on
impossible, LPs are becoming more con-
servative, sticking to fund managers they
already know and delaying investing in
who have returned more capital, accord-
ing to Ash Lilani, managing partner,
Saama Capital.
S ince June, new startup formation has capital will simply wait out the downturn
slowed and there is intense competi- to avoid painful down rounds, said Sumir
tion for deals, which has sustained valua- Verma, founder, Merisis Advisors, an
of the very few V-shape recoveries seen companies like Flipkart, Myntra, Ola and new funds. “Because of the slowdown in What makes it worse for some inde- tions. Most of the investors mentioned investment bank. But there could be a
during the pandemic, and much faster others helped bring the Indian startup growth, the portfolio maturity gets shifted pendent funds is that LPs in India includ- above said that they will end up with a sim- flood of Series B-C deals at the end of the
than those at their port- scene to the attention of by at least six months, so you need to post- ing high net worth individuals (HNIs), ilar number of invest- year as travel starts
folio companies. VCs are large investors. pone your own fund raise by six months to family offices and corporate venture arms ments this year as in opening up, he said.
again spending more Indian internet startups, In mid-2014, India a year,” said Rutvik Doshi, managing have become even more wary than their 2019 (excluding the Since June, new startup More than the availa-
time hunting for deals— and their backers, could witnessed its first major director, Inventus Capital India. international peers because of the uncer- three months from formation has slowed bility of capital or down
for the most part over funding boom, which Raising capital from LPs “you never met tainty around the size of the economic March to May), even if rounds, what is worrying
Zoom and Hangouts. avoid widespread not only drew late-stage before is going to be almost impossible” contraction and the volatility in public the kind of investments and there is intense investors and entrepre-
While overall deal vol- value destruction that tech investors like Soft- for the foreseeable future, said Karthik markets. This affects only independent may change. competition for deals, neurs is the broader
umes are much lower Bank and DST Global, Reddy, partner, Blume Ventures. “Right funds as the Valley-based VCs don’t raise “In peacetime, every- economy. Though the
than pre-covid levels, looked inevitable earlier but also prompted the now, our focus is on getting the portfolio capital in India. one is optimistic, and which has sustained glut in capital globally is
cheque sizes and valua- global Valley funds to get in order and seeing that our winners play you end up investing in keeping funding taps
tions have largely held this year serious about tech out well this year. We would have proba- SHAKEOUT COMING? companies that you valuations flowing for now, a high-
firm, with those in a

tion soaring.
investing here. By then, a
small number of sectors like digital educa- handful of homegrown tech investors like
Blume Ventures and India Quotient had
bly started the process of raising the next
fund by the middle of 2021. But now, there
could be a delay,” he added.
T o be sure, while many independent
VCs are facing delays, they all expect
to raise their next funds at some point.
know may cap out at er-than-expected eco-
only $100 million in value. In war time, nomic contraction could force more
you’ll only invest if you think a company startup closures and distressed sales.
VCs now say that the funding downturn entered the fray, joining older independ- Among independent funds, too, the Many of them have attractive portfolios can get to $1 billion. So you’re likely to take “If a company or a fund are performing,
that was expected even before the pan- ent funds like SAIF Partners, Nexus Ven- Valley-based ones like Saama Capital and and respectable track records. Still, the higher-risk and higher-conviction bets,” there will be ample capital available, even
demic may not be as severe as previously ture and Saama Capital. Nexus, which have better access to soft- disparity between independent funds and Blume’s Reddy said. if there’s a small delay,” said Ritesh Bang-
feared. This is thanks to a combination of From 2015, the Valley-based funds, ware startups and a stronger network of the Valley-based global funds is only wid- While early-stage investments are lani, partner, Stellaris Venture. “What is
factors: a rebound in public markets glo- which could raise capital at will to invest in LPs, are prospering more than the VCs ening during the pandemic. going strong, activity at the Series B-C far more worrying is the demand slow-
bally; a boom in US and Chinese technol- India on the back of the performance of based in India. Apart from not having to worry about stage has shrunk, partly as most Chinese down. If it lasts more than a year or if there
ogy stocks; an acceleration of digitisation their parent firms, came to dominate tech LPs in US and Europe will become fund raising, the global funds have far firms have stopped investing for now. Sur- is a huge second wave of covid-19, all bets
across sectors; and large capital reserves at investing at the early and mid stages. selective among their present fund man- larger teams, a wider network of invest- prisingly, late-stage investments are thriv- are off.”
 CORPORATE MONDAY, 10 AUGUST 2020
NEW DELHI 09
STARTUP INC.
interface and teacher’s video open simulta-
neously with one click.
Coding learner kits from MIT and others THE VALUE OF
have been around for over a decade. The
key to the WhiteHat Jr approach is its one- SOFTWARE
on-one teacher guidance instead of self- In August 2011, investor Marc Andreessen wrote
serve toolkits or books which are more 'Why Software is Eating the World', saying more
suited to adult learners. major industries are run on software and
This involves creating a supply of good delivered as online services. His words hold
coding teachers and scaling that with rigor- truer today than ever before.
ous processes for selection and training. howindialives.com
Currently, there are over 6,000 teachers
on the platform with 150 more being SOFTWARE FORTUNES
onboarded each day, according to Bajaj.
Six of the world's 10 richest made their pile from tech,
eight if you add software-dependent Elon Musk and
ROOM FOR ALL Mukesh Ambani's rise due to Jio.
Rapid growth in users and revenue has cre-
ated a virtuous cycle. “Like any two-way World's richest people
Net worth (in $ bn)
platform, you need liquidity at both the
demand and supply sides. More students Jeff Bezos
Amazon 189.5
make it more attractive for teachers; the Bill Gates
best teachers make it more attractive for Microsoft 112.7
students,” says Bajaj. Bernard Arnault & family
LVMH 106.4
Coding teachers can potentially earn 10
times what they would in their normal jobs. Mark Zuckerberg
Facebook 91.6
There’s growing demand for them as a
Mukesh Ambani
number of players have entered the field. Reliance 80.2
This includes other startups like Guru- Warren Buffett
gram-based Camp K12 as well as top- Berkshire Hathaway 76.9
funded edtech startups like Toppr and Steve Ballmer
72.6
Microsoft
Vedantu, which recently launched coding.
Larry Ellison
Bajaj says there’s room for all because Oracle 72.1
Mae Mae, 10, who was bullied in nursery school, learned to code with WhiteHat Jr, and built an app to report bullying directly to school authorities. the category is nascent. “I’m anticipating Elon Musk
that India will become the supply hub for Tesla, SpaceX 70.5

Getting an army
edtech player Byju’s. teaching coding to kids all over the world.” Larry Page
Google 66.2
Bajaj began with the thesis that “kids What’s more, all the teachers on White-
who are creators of technology will be har- Hat Jr are women, many of whom dropped Source: Forbes Real Time Billionaires List
bingers of a future generation.” He believes out of the workforce to raise children. “The
traditional schools will find it hard to thesis that we operated on is that warmth, PROFIT FROM DEVELOPERS

of coders ready
impart such skills even though India’s new compassion and internet safety should be
Businesses now have to build 'developer velocity'
National Education Policy mandates inclu- at the heart of the site because we have kids to improve performance through software
sion of coding in the school curriculum. as young as six years old. So we choose only development.
“Tech is constantly evolving, but for women and train them to become excellent
Business performance and developer velocity
schools to have a dynamic curriculum is coding teachers for kids,” says Bajaj.
Correlation with Developer Velocity Index

for the world

almost antithetical to how they operate,” Some of the women have a teaching
Bajaj says. background, but that’s not a prerequisite as 0.6 0.6
“Empowering children with the right the site has learning systems for anybody 0.5 0.5 0.4
future skills has always been part of our who demonstrates aptitude. Panzy Saran
vision at Byju’s and coding fits well into was an engineer with Wipro when she mar- Innovation Customer Brand Talent Overall
satisfaction perception management
this,” said Byju Raveendran, founder of ried an army officer who was posted to new
Byju’s, while announcing the acquisition of locations every few years. She quit and Note: DVI measures critical factors that empower software developers
WhiteHat Jr. Bajaj will con- looked for work-from-home Source: McKinsey

tinue to lead WhiteHat Jr and options. “I was sceptical when

Recently acquired by Byju’s, WhiteHat Jr’s women teachers its expansion into global mar-
kets. But it remains to be seen
provide a safe environment for children to learn to code how the culture of the nimble
startup meshes with that of
decacorn Byju’s.
Malavika Velayanikal ter, who is seven, is also learning to code Just as with OTT video
with WhiteHat Jr,” says Mae Mae. streaming, the secret to the
for a dynamic home
Coding is a I came across Whitehat Jr as it
crucial skill, sounded too good to be true.
but schools But I started in April 2019 and
now teach 45-50 hours a
aren’t ready week. I’m happy to work from
and earn as much as
anybody at a 9-5 IT job,” says
CODE FOR WORK
Businesses are responding by hiring talent in this
field. The five fastest growing jobs on LinkedIn’s list
of emerging jobs globally are all related to coding.
Top emerging jobs in US
(Hiring growth rate in %)

T
he best way to deal with a bully in Karan Bajaj quit his job as CEO of Dis- fast adoption of coding classes curriculum to Saran. 74 40 37 35 34
school is to report them to some- covery Channel to launch the first version lies in the ability to schedule
one in authority. But this is of WhiteHat Jr in April 2019. He had $1.3 and deliver them at scale with
accommodate ticBajaj himself had an eclec-
career after his MBA at
stressful, and often there’s no million in seed funding from Nexus Ven- automated systems to handle the constant IIM-Bangalore in 2002. He Artificial
Robotics
Engineer
Data
Scientist
Full Stack Site
Engineer Reliability
redressal even when you work ture Partners and Omidyar Network. Later connectivity and device-re-
up the courage to tell somebody about it. in the year, he raised a $10 million series A lated issues. “We do 20,000
evolution in worked as a manager for
Procter & Gamble before tak-
Intelligence
Specialist
Engineer

Mae Mae, who is 10 years old now, was round to build and scale up the product, live one-on-one classes a day the tech world ing a sabbatical to write a
Source: LinkedIn Emerging Jobs Report 2020

bullied right from nursery in Shillong. “It although it had paying customers from the and our algorithms are fine- novel. Then he switched
stopped only after the girl moved to outset, spending around $10 for each one- tuned to a 93% delivery rate when some- between management jobs, writing novels, CLASSES GO ONLINE
another school after Class 2,” she says. on-one session with a teacher. body books a class,” says Bajaj. “For exam- becoming a yoga instructor and launching Online coding classes are growing to meet the
This left a deep impression on her. So ple, we can predict that when people book TV channels, before taking the plunge with demand. Seven of the top 10 courses on Coursera in
2019 were related to coding.
last year, when she started learning to code, QUICK ACQUISITION free trial classes in India, 60% them will WhiteHat Jr. “I think I’m experimentative.”
the first project she took up was to build an Five months ago, WhiteHat Jr launched in show up. So we overbook the class to Writing the first novel was transforma- 2019's most popular online courses
(No. of reviews)
app to expose bullies in school. Now the the US where it caught on fast. “Currently ensure the teacher’s time is well-utilized.” tive because it was a dive into a creative
Programming for Everybody
anti-bullying app, which can be down- the company is at $150 million annual reve- From beginner to advanced levels, the process that begins with a blank page and (Getting Started with Python) 146,985
loaded from Google Playstore, helps report nue and 60% of that is from the US. We’re curriculum modules and payments are uncertain outcome. “This startup is partic- Machine Learning 143,914
harassment instantly to the school princi- doubling every month,” he says. structured for simplicity. You book a slot ularly aligned to me because my life Neural Networks and
DeepLearning 90,601
pal, teachers, parents and friends. Monetization and customer acquisition for a free trial to get a feel of what it’s like, changed after I wrote my first novel. I’m
It was her father, a civil servant in costs have been a challenge for edtech then sign up for a course of 144 classes at keen about this idea that kids should build What is Data Science? 37,885
Meghalaya, who introduced Mae Mae to an startups in India. Thus, WhiteHat Jr’s reve- whatever level suits you. Each class is a stuff creatively early in their lives,” says AI For Everyone 23,935
online coding school for children, White- nue run rate within a year of starting opera- one-hour slot at any time of the day that Bajaj, who is a father of two daughters still Introduction to TensorFlow 10,763
Hat Jr, launched last year by a Mumbai tions, with hardly any advertising, is the suits the student-teacher pair. too young to start WhiteHat Jr. Algorithms, Part I 7,377
startup. “I built the anti-bullying app last envy of others in this space. It puts into The product is designed with children in
Source: Coursera
December and published it a few months context last week’s $300 million acquisi- mind. Younger ones find it hard to manage Malavika Velayanikal is a consulting edi-
ago. Now I’m making a chatbot and my sis- tion of WhiteHat Jr by India’s top-funded multiple tabs and windows, so the coding tor with Mint. She tweets @vmalu. PARAS JAIN/MINT

For more stories on how startups

PROBLEM, One-year-old startup WhiteHat Jr
offers online coding classes for chil-
CHALLENGE
dren, providing one-on-one teacher
& SOLUTION guidance instead of self-serve toolkits.
It had paying users from the start. It’s
at $150 million annual revenue. This
is rare in edtech where monetization
and customer retention are hard.
Byju’s acquired WhiteHat Jr for $300 are changing the way we work
million last week. It remains to be seen and the way we live, follow our
weekly podcast Startup Inc
how the culture of the nimble startup
meshes with that of decacorn Byju’s.
hosted by Shalini Umachandran
on htsmartcast.com

This MIT alumnus is building a coding school of the future

Sumit Chakraberty classmates were on a beach some- K12 are building managed plat-
where in the Bahamas.” forms, where they create the cur-

India will become the supply
hub for teaching coding to
children all over the world.
Karan Bajaj
FOUNDER, WHITEHAT JR
It’s a platform where you
go to learn, play, socialize,
compete, collaborate.
Anshul Bhagi
FOUNDER, CAMP K12
I teach online 45-50 hours a
week from home and earn as
much as I did at a 9-5 IT job.
Panzy Saran
CODING TEACHER, WHITEHAT JR
A
nshul Bhagi moved to Sili-
con Valley from India
when he was seven, with
his father who worked for Apple.
Coding was an integral part of his
formative years, and was accentu-
ated when he went to study com-
puter science at MIT in 2007.
He worked as a developer for
Apple, Microsoft and Google dur-
ing his undergraduate and post-
graduate years, while developing
a passion for teaching. He built a
coding curriculum and travelled
to schools and colleges in India,
China, Kenya and Brazil on teach-
ing gigs.
He co-developed MIT’s App
Inventor, a free coding platform
for newbies learn to create apps. It
drew on visual programming con-
cepts developed for Scratch pro-
gramming language, which
allowed children to drag-and-
drop code like Lego blocks to
build apps. This became Bhagi’s
master’s thesis, but his interest
went beyond academics.
In his third year at MIT, he came
to India during the summer holi-
days and did a coding bootcamp
for Delhi Public School
R.K.Puram. Word spread and he
started getting invites from other
schools. From 2010, every winter
and summer break was a trip to
India for Bhagi, “while most of my
The passion project was formal-
ized as Camp K12 with a curricu-
lum and coding teachers on a
B2B2C (business-to-business-to-
consumer) model. It scaled up to
50,000 students across Tier-1 cit-
ies in India, says Bhagi. “We built
a gig economy of coding teachers
who were mostly college students
like me, wanting to give some-
thing back to the community.”
LEARNING BY DOING
Bhagi kept at it on a part-time
basis while getting his master’s
from MIT, working for McKinsey,
and going on to Harvard. A num-
ber of side projects around educa-
tion followed the Harvard MBA,
but he kept coming back to Camp
K12. “Teaching kids and watching
them fall in love with coding has
been the most meaningful activity
for me over the past decade.”
A couple of years back, as inter-
net bandwidth expanded and data
rates fell, he took Camp K12 online
with a product for teacher-led
learning. In April this year, it
raised $4 million in seed funding
from Matrix and SAIF Partners to
expand to global markets.
Zoom and other video confer-
encing tools have become familiar
in the post-covid scenario. But
platforms like Camp K12 are tak-
ing that to another level to provide
Coding education startups are building virtual classrooms that can be customized for both one-on-one
teaching and group experiences.
the interactivity required for per-
sonalized guidance to children,
with a mix of A/V streaming, cod-
ing editors, doc and screen shar-
ing. The pedagogy is also evolving
to emphasize learning by doing.
“We’ve built a virtual classroom
which can be customized for both
one-on-one teaching and group
experiences,” he says. “It allows us
to teach on mobile as well as web.
Coding on mobile is different
because you can’t have a text edi-
tor or keyboard. You have to drag-
and-drop. Zoom doesn’t have
such features and isn’t built for
education. That’s where product
vision allows for differentiated
pedagogy and becomes a source of
competitive advantage,” says
Bhagi, alluding to the rush among
top-funded edtech companies to
launch coding classes for children.
Personalization also offers huge
scope for differentiated value
propositions. Camp K12 has coun-
GETTY IMAGES
sellors to understand a child’s
interest and recommend a learn-
ing path. “Some kids will do more
visual gamified stuff; others will do
mathematical algorithmic stuff.
We’re creating a new playbook.”
The promise of personalized
learning has been around since
the advent of MOOCs (massive
open online courses) such as
Coursera, Udacity and edX. But
low retention rates have belied the
hype. Instead, startups like Camp
riculum, onboard and train teach-
ers, and create personalized user
experiences in live classes.
NEXT-GEN LEARNING
Bhagi calls it the school of the
future, because coding is only the
start—the same methodology can
be applied to any STEM subject.
“K12 education is broken across
the globe. I don’t think we teach
the right skills, and I don’t think
we teach them in the right way.”
Language learning apps like
Duolingo from the US and adapt-
ive tutoring like Squirrel AI of
China have brought artificial
intelligence to identify learning
gaps. But the likes of Camp K12 are
creating a model where an abun-
dance of potential human teachers
in India can play a part in the tran-
sition to 21st century learning.
“It won’t be just a platform
where you take a coding course.
It’s a platform where you learn,
play, socialize, compete, collabo-
rate, things you do in a real school,
and maybe some things you don’t
do in a real school today,” says
Bhagi. For him, it’s one of the big-
gest global problems to solve
where India can take the lead.
Sumit Chakraberty is a consult-
ing editor with Mint. Write to him
at chakraberty@gmail.com
10 MONDAY, 10 AUGUST 2020
NEW DELHI PERSONAL FINANCE

UPI set to be more convenient, B E YO N D T H E

TA X B O O K
facilitate more interoperability G AU TA M N AYA K

We welcome your comments at:

mintmoney@livemint.com

Ease in payment through UPI and the proposed availability of credit through it could boost its adoption
HOW WAIVER OR FALL
Tinesh Bhasin
ISTOCK
IN RENT MAY IMPACT
tinesh.b@livemint.com
NFC payments YOUR TAX LIABILITY

S
ome recent and upcom-
can secure your
D
ing developments on the ue to the lockdown, many people working in cities have
Unified Payments Inter- relocated temporarily to their home towns, leaving their
face (UPI) platform will transactions rented city homes empty. Many tenants have been unable
make it more conve- to pay the rent in the present scenario. Such tenants may or may
nient and interoperable across the Tinesh Bhasin not have been able to use the rented premises during the lock-
entire payment ecosystem and tinesh.b@livemint.com WhatsApp a down. Rental rates have fallen due to lower demand.
step closer
could increase its adoption. to pay play
Landlords have been approached by such tenants for waiver
The National Payments Corp. of
India (NPCI) is in the process of
linking UPI to payment wallets,
N ear-field communica-
tion is a technology
through which digital pay-
bit.ly/30BkZQe
or reduction of rentals during the lockdown period, and at times,
even for subsequent months. In some cases, landlords have
agreed to partially waive or reduce the rent, either for a few
executives of companies involved ments can be made. It works months, or on an ongoing basis. How does such waiver or rent
in payments solutions told Mint, like Bluetooth that allows two reduction impact the income tax liability of the landlord? What
on the condition of anonymity. “At devices to pair with each if the tenant defaults in payment of rent? What is more advanta-
present, NPCI is addressing con- other and exchange data. geous for the landlord—to waive the rent for a few months, or
cerns of stakeholders so that However, unlike Bluetooth, reduce the rent partially for a longer period?
everyone agrees on the modali- NFC works when the devices Under the income tax law, every house property is liable to tax
ties. UPI could be available on wal- are in close range. Also, it each year on an annual value, except for one residential house
lets within a few weeks,” said a doesn’t require devices to which is occupied by the owner himself. The annual value is a sum
person involved in the discus- pair. All these features make it for which the property may reasonably be expected to be let, or,
sions, on the condition of ano- more secure for payments. if the property is let out, and the actual rent receivable is higher,
nymity. Once this happens, indi- Many new cards and PoS then such higher actual rent. Further, if the property was vacant
viduals will be able to transfer terminals come with an NFC for a part of, or for the entire year, then the actual rent received
money from the wallet of one chip embedded in them. After or receivable would be the annual value, even if it is lower than the
company to another, send money the merchant enters the sum for which it may reasonably be expected to be let.
from their wallet to another per- amount on the PoS terminal, In places where municipal taxes are levied on the basis of an
son’s bank account and use their compared with the existing meth- But this technology could take UPI, for which banks need to the buyer takes the card close annual rateable value, or where the rent control law applies with
credit cards to send money to ods,” said Akash Gehani, a bit of time. “The majority of PoS agree. Borrowers who want to to the machine and the pay- standard rent, courts have taken a view that the standard rent or
another person’s bank account. co-founder, Instamojo, a pay- terminals don’t have NFC yet. avail low-ticket loans quickly ment is made. To ensure that the annual rateable value would be the annual value, for taxation
Apart from this, there are three ments gateway. Also, most of the affordable smart- would benefit from it. “Many fin- the card is the right one, some of self-occupied property or for comparison with actual rent.
more developments that will ben- Users opting for recurring pay- phones don’t support NFC. So this tech companies are already doing cards and PoS manufacturers However, where there is no rateable value nor does standard rent
efit you. One, autopay, which ments tend to be more loyal. “We would be a long-term plan,” said it. But UPI will give them a more require the card to be tapped apply, determining the annual value becomes highly subjective.
allows users to make recurring have seen this with credit cards Bipin Preet Singh, founder and reliable platform,” said Gopal. In normal times, the rent is fixed at
payments. Two, the integration of abroad. If users allow recurring CEO, MobiKwik. If a landlord the market rent and, therefore, a land-
UPI on WhatsApp, which could payments without the PIN, it NFC payment could help in WHAT TO KEEP IN MIND defers payment lord may face no difficulty in paying tax
means they trust the system. This financial inclusion as internet
significantly increase the user
base. Three, offline payments feature would make UPI sticky,” connectivity is still not available in
There’s one hindrance, however,
that can affect user experience. of some part of on the actual rent receivable. However,
where the rent is waived partially, the
using NFC, which will allow indi- said Murali Nair, president, bank- many rural areas or is patchy. It According to reports, NPCI could rentals, he or question is with which figure should
viduals to pay merchants over ing, Zeta India, a fintech company would also be another avenue to cap the transaction share to 50% she would still the actual rent be compared—the mar-
points of sale (PoS) terminals. that provides banking solutions. pay at merchant stores that have in the first year, 40% in the second have to pay tax ket rent prevalent before the pandemic
The best part is the ease. “With not signed up for UPI but have a and 33% from third year onwards. and the lockdown, or the reduced
PAYMENTS THROUGH UPI existing methods, stopping recur- PoS terminal or if the customer’s “It is done to ensure that no single on the machine to establish a rental prevalent post the commence-
Autopay: Recently, NPCI added ring payments could be tedious. network is erratic. company is dominant on the UPI physical contact. ment of the pandemic and lockdown? Logically, the comparison
the recurring payments feature to UPI allows users to cancel the platform. It is to avoid concentra- For mobile payments, the has to be done with the lower rentals prevalent post the pandemic
UPI. It allows companies to deduct recurring payment mandate or LOANS THROUGH UPI tion risk,” said Singh. A balance technology works in a similar and lockdown commencement, for a fair and proper comparison.
a fixed monthly pay- pause it, making it the There have been dis- could be maintained manner but requires an app Therefore, even the reduced rental or rents after partial waiver
ment from an indi- NPCI has added most feasible option,” cussions about using There have been if payments apps stop and the payer to authenticate would be more or less in line with the now prevalent market rent-
vidual’s bank the recurring said Mohit Gopal, UPI for credit, where discussions about “unreasonable” cash- the transaction with a pass- als. Since the comparison is of the annual rent, it does not make
account at regular payments feature senior vice-president lenders could assess using UPI for back offers, he added. word or fingerprint. For any difference whether a few months’ rent is waived or whether
intervals. to UPI which and strategy head, borrowers based on credit, where It’s not clear yet example, in India, Samsung there is a reduction in rent for a larger number of months.
If the amount is up
allows deduction PayU India, a pay- their payments his-
lenders could give how NPCI will imple- has tied up with banks to offer Interestingly, the premises cannot be regarded as having been
to ₹2,000 for each ments gateway. tory to give small- ment it and whether NFC payments. The user has vacant during the lockdown period, because technically, it was
transaction, the user of fixed monthly WhatsApp con- ticket loans, accord- small-ticket loans it could lead to apps to register on Samsung’s pay- still occupied by the tenant who was in possession of the prem-
doesn’t even need to payments nect: Companies in ing to executives of to borrowers restricting the num- ments app and then add a fin- ises, though he may not have been able to use them.
enter the PIN (per- the payments space payments company, ber of transactions gerprint and PIN to it. Next, If the landlord merely defers the payment of some part of the
sonal identification expect UPI adoption who did not want to for each user. the user adds the credit or rentals to the subsequent year, the landlord would still be liable
number), as per the Reserve Bank to increase manifold once it is be named. According to Nair, NPCI could ask payments app debit card details in Samsung to pay tax during the current year on the rental income for the
of India (RBI) regulations. “It’s available on WhatsApp. “It can loans on UPI seem like the next with a higher market share to go Pay app. A person can add up entire year, as such rent is receivable by the landlord.
possible to set up a recurring pay- help onboard the next 100 million logical step. “If banks have to slow on onboarding new custom- to 10 cards. What if the tenant fails to pay the rent altogether? Would the
ment of a higher amount. But that users faster,” said Gehani. make money, credit is the only ers, said experts. If this happens, To make payments, the landlord still have to pay tax on unpaid rent, which is never real-
would require the user to enter Most of the popular UPI apps way. There is a cost to maintaining users may need to look at signing user needs to launch the app, ized? The law provides that rent receivable shall not include rent
the PIN for authorization,” said N. are specifically developed for pay- the UPI infrastructure and ensur- up with alternative apps. select the card for payment which cannot be recovered. However, certain conditions are pre-
Sathish, deputy chief product offi- ments or banking use. “No app in ing its security,” he said. Additional features on the UPI and authenticate it. Once the scribed for such rent to be excluded from taxable income. These
cer at FSS, a payments technology the country can compete with The other way for institutions platform could boost its adoption, payer takes the phone close to are that the tenancy should be bona fide, the defaulting tenant
and transaction processing com- WhatsApp on engagement. If to make money in payments is and many new customers could the card machine, the pay- has vacated or steps have been taken to make him vacate the
pany. making a payment is made as sim- through the merchant discount become first-time users of digital ment is made. The technology property, the defaulting tenant should not be in occupation of
Recurring payments can come ple as sending a message, it would rate (MDR), which is the commis- payments. But the industry also uses security options such as any other premises of the landlord, and the landlord should have
handy for various things, apart be more intuitive. It can help UPI sion levied on each transaction. needs to ensure that such users encryption and tokenization, taken all reasonable steps to initiate legal proceedings for recov-
from your utility bills. Consumers reach a significant scale and However, banks are not allowed to don’t fall prey to cyber frauds. A which makes it more secure ery of the rent or should satisfy the tax officer that such legal pro-
are increasingly using subscrip- higher penetration,” said Gehani. charge any fees or commission for one-stop solution may also boost than swipe transactions. ceedings would be useless.
tion-based products and services The increase in adoption means payments over UPI or RuPay net- digital adoption in the long term. Given the seriousness of the current pandemic and the severe
such as streaming platforms. Even more merchants would accept works. “Credit is the only way to financial impact of the lockdown, the government should con-
e-commerce companies offer dis- digital payments. make money if you are in the pay- sider softening the impact of these tax provisions. This could be
counts on products if customers Offline payment: NPCI has ments space. MDR charges only For more stories about how to manage your done by doing away with the requirement of initiation of legal
subscribe to them. been working on adding near- cover the cost of transactions. money life, listen to the podcast Why Not Mint proceedings for the current year. Another step which would help
“There are other options availa- field communication (NFC) capa- That’s why we offer loans on Mob- Money with Mint’s Personal Finance team on tenants renegotiate rents would be by amending the law to tax
ble for recurring payments. But bilities to its payments that would iKwik,” said Singh. htsmartcast.com. Invest smartly to make every only the actual rent receivable for the year, and not requiring
those come with a cost. UPI auto- allow offline transactions on UPI According to Gopal, this feature penny count. comparison with market rents, at least for the current year.
pay is far simpler and cheaper at merchant stores. requires lien or escrow facility on Gautam Nayak is a chartered accountant

Check how your NPS Capital losses can be set off against capital gains
investments are faring Parizad Sirwalla
ISTOCK
erty will not be available.
Further, for getting yourself
here are very few retirement products that help you accumulate a retirement I have taken a loan for con- added as a co-owner to the
nest egg and one such product is the National Pension System (NPS). It is a struction of a house in joint property now, you should seek
market-linked, defined-contribution product that needs you to invest regularly capacity with my father. legal opinion on the appropri-
in the funds of your choice. The returns are based on the performance of the But I am not a co-owner. ate documentation, stamp
fund that you choose. There are eight pension fund managers to choose from Can I get myself added as duty implications and any
and one of the ways to do that is by tracking the returns. Here is a breakdown of the co-owner now—as I other implications.
the performance of different funds—equity fund, government bond fund and have already taken the loan On your second query, the
corporate bond fund—of the private sector NPS. —to be eligible for tax set-off of losses on the sale of
deductions? Also, suppose shares will depend on the
Returns (in %) Tier-1 account a person purchases a stock, nature of the capital asset
but at the time of liquidat- (Indian or foreign stock) and
1 year 3 years 5 years Equity fund Government bond fund Corporate debt fund ing the stock, the investor also the nature of capital losses
makes a loss. Is this loss (short-term or long-term)
Birla Sun Life Pension Scheme 5.52 4.57 - 12.04 9.62 - 12.89 9.79 - amount tax deductible? incurred from the sale of the
HDFC Pension Fund 2.88 3.79 6.87 12.76 10.20 10.99 12.65 9.33 10.24 —Avtar stock. Capital losses are
Fund Manager

On your first query, a should be apportioned in the deductible only against capital
ICICI Prudential Pension Fund 0.80 2.68 5.50 11.64 9.86 10.80 11.19 9.01 10.12 ASK MINT
deduction for interest and m ratio of the respective funding gains during the year, as per
principal repayment towards a TA X AT I O N done by your father and you the rules prescribed. Also, any
Kotak Pension Fund 2.97 3.15 6.18 12.05 9.78 11.00 9.81 8.01 9.54
housing loan is available under towards the property or loan, unadjusted capital losses can
LIC Pension Fund -1.27 1.01 4.25 12.01 10.92 11.90 12.47 8.92 9.95 Section 24 and Section 80C, ship and legal ownership of within the specified limits. It be carried forward up to eight
respectively. For the purpose the property may be consid- may also be noted that both succeeding financial years for
SBI Pension Fund 0.13 2.75 5.79 12.35 10.03 10.98 12.23 9.13 10.07
of these deductions, you are ered by tax authorities for the deductions, can be claimed set off only against future capi-
UTI Retirement Solutions* 0.16 2.59 5.82 12.30 9.57 10.49 12.15 8.74 9.81 required to be the owner of the determining the ownership of only after the construction is tal gains.
property and the income from the property. Accordingly, in completed and possession of Read the full answer on
AUM: assets under management; NAV: net asset such property should be case where you are not the the property is received. livemint.com/money
value; For the Equity Fund the benchmark is Nifty 50 Total Return CCIL All Sovereign Bond-TRI CCIL Bond Broad-TRI
NIFTY 50 Total Return Index, Government Bond chargeable to tax in your legal co-owner of the property, In case you are opting for Parizad Sirwalla is partner
Fund the benchmark is CCIL All Sovereign Bond - 1.90 4.56 6.74 11.46 9.51 10.35 12.07 9.41 10.05 hands under the head “income the claim of the said tax deduc- the new taxation regime, and head, global mobility servi-
TRI, Corporate Debt Fund the benchmark is CCIL
Bond Broad - TRI; Returns as on 4 August 2020;
Benchmark index from house property”. tions may be contentious. deductions under Sections ces, tax, KPMG in India. Que-
Assets as on 30 June 2020; *Assets as on 31 May
2020; 1-year returns are absolute returns. PARAS JAIN/MINT Source: Value Research
While there is no express Once you acquire the legal 80C and 24 for interest on loan ries and views at mint-
clarity, both financial owner- co-ownership, the deductions taken for self-occupied prop- money@livemint.com
 NEWS MONDAY, 10 AUGUST 2020
NEW DELHI 11

‘Pvt companies to run trains on C A P I TA L

C A LC U LU S

freight corridors after Dec 2021’

A N I L PA D M A N A B H A N

Read Anil Padmanabhan’s earlier columns at

livemint.com/capitalcalculus

Shreya Nandi
shreya.n@livemint.com
NEW DELHI
around ₹13.6 trillion. Of this, financing world, it has been proved that with able to run many trains. The DFC is
for ₹10 trillion has been frozen. This also improved efficiency of operations and designed for 100 km per hour and there
includes work on the dedicated freight maintenance, the cost of operations of will be a lot of network capacity available
RBI PLAYS REVIVE
corridor and the bullet train project. these private trains will be much less. to introduce more freight trains.
NOTE, WILL FINMIN
I
ndian Railways has been facing a The second type of finance is We have decided that we will be
challenging year because of the coro- through extra budgetary resour- going for private freight operators
navirus outbreak. With passenger ces, borrowing from those Indian
revenues hit by the limited train ser- Railway Finance Corp. projects
vices in the first quarter of the fiscal, where the rate of return is more
also for these corridors. The point
that I want to make is that we can
go for bidding only when these
DO AN ENCORE?
the national transporter is pinning hopes than 12%. corridors are commissioned and
on an increase in freight revenue and The third type of projects trains start operating.
lower expenditure to match last year’s involve those of national impor- The bidding process will start
operating ratio. tance, such as the ones in Jammu closer to commissioning of the
Plans are being finalized for private and Kashmir, and improving con- railway lines. Right now we are
firms to run freight trains on dedicated nectivity with the northeastern working out the details and the
freight corridors, Railway Board chair- part of the country. These pro- project report. We have deputed
man Vinod Yadav said in an interview. jects don’t have a rate of return a consultant. The details and con-
Also, for the first time, 150 modern pas- and are being implemented as tours are still being worked on.
senger trains will be launched by private they will improve the condition of
companies in the next three years. The people staying in such areas.
private sector will also take part in the
redevelopment and transformation of zation. Railways has taken two ini-
railway stations into commercial hubs. tiatives.
‘We have increased the speed of Can
The fourth type is asset moneti- our freight trains from 23 km/hr

to 46 km/hr. Hence, we are in a

‘
you take us through your
earnings position this fiscal?
If you look at last year, ₹50,000
crore was earned from the passen-
ger segment, ₹1.15 trillion from RBI said it was aware of the stress in the financial sector. MINT
Edited excerpts: One is where passenger trains freight revenue, and then non-
position to carry more freight.
L
There has been a rising focus on will be run by private players via fare revenue of ₹9,000 crore was ast week, the Reserve Bank of India (RBI) changed gears. The
diversifying infrastructure financ- public private partnership (PPP). VINOD YADAV earned. central bank hit the pause bottom on rate cuts, but left no one
ing models, with While the fixed Railway Board chairman In April-June this year, the pas- in doubt that it is going to focus on reviving the economy from
asset monetization
being one of them.
mint infrastructure
will be con-
senger earning is almost zero, as
railways was able to run limited
now on. At the same time, RBI maintained that it was aware of the
build up of stress in the financial sector and assured everyone that
What is the plan of CONVERSATION trolled by Indian Rail- The only benefit will be that Indian trains and a lot of refunds had to be made Electric it was on top of things (fingers crossed, given that every sign points
cookers can
Indian Railways in VINOD YADAV ways, we are allowing Railways is not free to revise fares on advance bookings done till March. As be used to
to a crisis in the making).
this regard? private train operators because of social considerations, but far as freight revenue is concerned, we sanitise N95 I first heard of the three step approach—survive, revive, and
Let me give you a macro picture. There to bring more rolling stock, which will these private players will have the free- have earned ₹22,000 crore (in April- masks: Study thrive—to fix the post-covid Indian economy from the very insight-
is a lot of thrust on infrastructure devel- entail an investment of ₹30,000 crore. dom to fix their fares according to market June) as compared to ₹29,000 crore last bit.ly/3aavuNz ful analyst observations penned by Saugata Bhattacharya, chief
opment and modernization of our net- The other one is the station redevelop- conditions. year. However, the good news over the economist, Axis Bank. Very similar to the Olympic motto: Citius,
work. The infrastructure pipeline capital ment plan. Some projects, Habibganj, However, while fixing the fares, they last few days is that our freight loading Altius, Fortius meaning faster, higher, stronger—three words to
expenditure for the next five years is Bhopal, and Gandhinagar, will be com- will have to see that there will be compe- and revenue has been more than last inspire the athletes to deliver their best in competition. This fits the
pleted by December. tition from roads, air-conditioned buses, year. current circumstances rather well.
We plan to finalize the tender for and airlines. There are two or three reasons for that. From RBI’s actions on Thursday, it is apparent that we are
50 more stations in this fiscal. How has the response from private We did safety-related work and improved indeed transitioning to the second phase. All is well, but it is only
We have already floated six companies been so far? What is the mobility during the lockdown. As all the that there is some uncertainty about the timing and substance of
tenders and the response quantum of penalty for not main- passenger trains are not running, we have the next steps. RBI alone cannot do the heavy lifting. It has to be in
has been very good. This is taining punctuality and other key a lot of network capacity. So, we have tandem with the Union government.
another way of financing performance indicators (KPI)? increased the average speed of our This is because the challenge is daunting. Essentially, the econ-
the development of the sta- We will deploy a regulator to keep a tab freight trains from 23 km per hour to 46 omy runs on twin engines: consumption and investment. The lat-
tions to make it world class, on these. We are working towards that. km per hour. So, we are in a position to ter took a massive knock after the global crisis of 2008 and has in
without taking any money There are KPIs for every division of carry more freight. the last few years all but ceased to perform. The consumer econ-
from the cental govern- Indian Railways. It will be similar for pri- We have also utilized the covid-19 omy started to take a hit after prolonged agricultural distress
ment. vate train operators. Right now, we are at lockdown and set up business develop- (ignored by policymakers till recently) began to take a toll. The cov-
So, the remaining ₹3.6 the request for quotation (RFQ) stage (to ment units and they have started inter- id-19 pandemic and the subsequent lockdown was the final blow.
trillion (out of ₹13.6 tril- shortlist bidders), where we only give acting with our stakeholders. While there In short, the twin engines of the economy are not functioning. The
lion), will be financed broad contours of the project. has been a reduction in coal loading, fer- only solution is for a kick start (read stimulus).
through PPP, asset moneti- We will float requests All eyes are then on North Block. Its
zation, or any other means. for proposals (RFPs) in RBI’s action to incumbent, Nirmala Sitharaman, in an
Those details are yet to be November. Penalties will transition to the earlier interview with Mint, immedi-
worked out. be defined in the RFP doc-
Will private passenger ument. We still have suffi- revive phase has ately after the ₹20 trillion stimulus
package was announced, had signalled
trains have any advantages cient time for that. to be in tandem that a stimulus was very much on the
over those being operated at The response on RFQ with the Union table. The question was priorities and
present by Indian Railways? has been good and we got government timing. The initial strategy, and rightly
We are not thinking in terms of a lot of queries on bidding so, was to protect lives. As the initial
giving them any advantage. parameters and opera- shock of the covid-19 pandemic has
However, across the tions. waned, the focus is gradually shifting to protecting livelihoods,
We will not be able to which is particularly relevant for India where millions of lives
disclose details at this depend on what people earn from their daily livelihood.
stage. We have another The time for tough decisions is here. RBI has already shown its

‘ ‘
pre-bid conference this
week. We are open to In this fiscal, we may be able to
making changes in RFQ
based on the feedback earn ₹15,000-₹20,000 cr from
received from companies. the passenger segment, based
When do we get to see
private trains on the on the coronavirus situation.
dedicated freight corri-
dor (DFC)? How will you implement tilizer and cement has grown, foodgrain
this and how many routes are you loading has doubled and additional com-
looking at? modities are coming to us.
We are trying to complete the dedi- In this fiscal, we may earn
cated freight corridor project by ₹15,000-₹20,000 crore from the passen-
December 2021. There have been ger segment, depending on the coronavi-
some problems (in the progress rus situation. Whatever we are going to
of this project) because of cov- lose in the passenger segment, we are
id-19, but we are trying to making an effort to make it up in the
sort it out. As of now, the freight segment. We will try to reach as
work has picked up close as possible and also bring down
well. Having said this, expenditure by cutting fuel cost, coach
we are working out maintenance cost, redeployment of staff
the business devel- without reducing staff or allowances. A
opment plans. reduction in cost will increase earnings,
When this but there is no way for us to reduce staff
DFC is com- or cut back on any allowances.
pleted, there We hope to maintain an operating
will be a lot of ratio similar to that of last year (2019-20)
c a p a c i t y , at 98.36% by increasing freight revenue
where we will be and reducing expenses.
hand and very uncharacteristically owned up to how it has success-
fully lowered borrowing costs for businesses. Similarly, politically
incorrect, yet economically pragmatic need to be taken by the
Union government. It has the social capital, especially with Prime
Minister Narendra Modi’s popularity ratings, as reported in India
Today last week, at record highs, to absorb the political criticism
that will accrue from the Opposition (it is the dharma of the Oppo-
sition to oppose).
What the Modi government has going in its favour is what the
late Arun Jaitley put as the ability of the National Democratic Alli-
ance to be simultaneously “pro-poor and pro-business”. It has,
therefore, not shied away from backing business or providing a
helpful nudge to potential foreign investors.
At crunch time, it is clear that the industries hurting most are
those who are part of the contact economy. The enforcement of
social distancing and subsequent lockdowns have devastated hos-
pitality and aviation in particular. Without help, they risk going
under. Not only will it worsen the economic situation and create
bad press, but also debts owed by them can push the financial sec-
tor to the edge.
The problem is how the Union government does help. Not only
does it have to be calibrated but it also has to be selective, given the
paucity of resources. Almost every rupee to be borrowed by the
government will have to be accounted for, not so much to manage
the politics, but to ensure the economy recovers in earnest. The
spate of recent foreign investments in the digital economy suggests
that the tide may be turning. Over to North Block then.
Anil Padmanabhan is managing editor of Mint and writes every
week on the intersection of politics and economics.
Comments are welcome at anil.p@livemint.com

Bharat to get LED bulbs at ₹10

FROM PAGE 1 investment requirement of India is running the world’s
₹4,000 crore for the Gram largest energy efficiency pro-
sumer isn’t able to pay ₹70 per UJALA scheme, rural consum- grammes, with EESL offering
LED bulb. Under the proposed ers will pay ₹600 crore with the large procurement contracts,
scheme, we will be taking back balance ₹3,400 crore coming enabling businesses to leverage
the consumer’s incandescent from carbon credit revenue. scale and achieve economy to
and CFL (compact fluorescent “The moment bring down pri-
lamp) bulbs and provide this the scheme is reg- The scheme, which ces.
LED bulb for ₹10 apiece. The istered under does not involve According to
balance cost and our margin CDM, we will any govt support or EESL, India offers
will be recouped through the launch Gram a compelling rea-
carbon credits earned,” Sau- UJALA,” Kumar
subsidy, aims to Business of Life
provide 600 million son for invest-
rabh Kumar, executive vice- said. ment in combat-
chairperson, EESL Group, said EESL w i l l made-in-India LED i n g climate
in an interview. invite tenders bulbs in villages change. While it
According to EESL, less than from local firms to takes an invest-
a fifth, or only 18% of the 360 procure bulbs ment of around
million LED bulbs already dis- locally, aiding India’s efforts to $100-200 for one-tonne
tributed under the UJALA integrate with global supply reduction of greenhouse gases
scheme, was in rural areas. chains, in the backdrop of in developed economies, in THE MOST AWESOME BUSINESS DAILY THERE IS .

In the first phase of the new many multinationals looking to India, for the same quantum,
scheme, 10 million LED bulbs move production lines out of the investment is pegged at To get your MINT copy, give a missed call on 7039035039 or visit www.mintreaders.com
or write to us at subscription@livemint.com
will be offered. Of the total China following the pandemic. $10-40.
12 MONDAY, 10 AUGUST 2020
NEW DELHI VIEWS

OUR VIEW GUEST VIEW

H.T

Our national education policy is

high on goals but low on realism
It’s unlikely to reverse the decline of a system that requires transformations in content and not form

speak about science and other subjects
both in their home language and
English” carries very little conviction.
The Indian state spends pitiful amounts
on education and it is unclear how the
devaluation of Indian languages as a
result of national and global forces can
be addressed by devoting resources to
bolster the performance of politics.
SANJAY SRIVASTAVA Would the most educationally deprived
is a British Academy global professor at benefit from being able to express
University College London, and a mathematical formulae in an Indian
sociologist at Institute of Economic language? Or instead, would it be better
Growth, Delhi. to devote scarce resources to better
science education, multiple exit options
at the undergraduate level, creation of
large multidisciplinary institutions, and
allowing foreign universities to set up
local campuses. The problem isn’t with
the form of the university system—and
it is entirely unhelpful to hold up Ivy
League colleges of the US as models to
emulate—but, rather, the content.
The MPhil programme, for example,
has been fundamental to training future
researchers in a system primed towards
rote learning rather than independent
thinking. In many western countries,

Consumer confidence
train teachers, provide infrastructure this degree is no longer offered. But it is
for schools and resources to students? necessitated in India by the weak edu-

T
he new National Education Policy Given the country’s socioeconomic dis- cational experience that precedes it.
(NEP 2020) is the third overhaul parities, it is not difficult to imagine Its demise will be a blow to an already
of India’s education system in the whose children are most likely to be the debilitated university system and fur-

could do with a boost life of the Republic. Unfortunately,

notwithstanding various policy meas-
ures, what we have is a shambles of an
education system: one where students
subjects of such arbitrary experiments
in instilling “civilisational” pride.
The mostly anti-learning board
examination system—and the coaching
ther diminish our research capacity.
There have been two kinds of promi-
nent responses to NEP 2020. The first
suggests that it is another tool to dis-
achieve perfect scores in history and culture around it—is sought to be tack- lodge an older “Nehruvian” intelligent-
literature at school, but PhD theses are, led through continuous evaluations sia through the emphases on Indian
Covid-19 pushed RBI’s current situation index to a record low in July. Future expectations in a great many instances, embarrassing involving “state school examinations in languages and Sanskrit. The second is
documents attached to unemployable grades 3, 5, and 8”. Continuous evalua- adamant that the crisis of education can
swung back into the positive zone, but State support will be needed to justify any optimism graduates. It is unlikely that weighty tion is an important tool, but in those best be addressed by greater privatiza-
terms—“social and emotional skills” and systems where the fundamentals of tion of education, with the state funding
“holistic education”—can ever be sub- pedagogy are more or less in place. In a (poor) parents to send their children to
stitutes for careful attention to the his- wildly uneven system such as ours, the private schools of their choice.

A
s an ear to the ground, our Con-
sumer Confidence Survey was
found by a recent study to have
got better after mid-2016, when
the Reserve Bank of India (RBI)
adopted its flexible inflation-
targeting regime. Overall, the survey’s data
has not been very reliable as a lead indicator of
the economy’s direction since it was launched
by RBI a decade ago, but its consumer outlook
on economic conditions and prices was found
to forecast retail inflation rather well. This
suggested that RBI had acquired either an
alert system or actual handle on inflationary
expectations. Either way, now that covid-19
has blurred the path ahead, a fog light offered
by the perceptions of people should serve as a
useful input for policy calls on price stability.
Accordingly, some of RBI’s evident wariness
of inflation can be pinned on the survey’s
latest findings. What these imply for govern-
ment policy, though, may be even more rele-
vant. While the survey’s current situation
index (CSI) fell to its gloomiest ever level of
and spending as either better than it was a year torical and structural issues that afflict immediate need is to attend to the If the NEP were as systematic a docu-
ago, or worse (or the same). Likewise, the FEI the Indian education ecosystem. basics of teaching methods, inflationary ment as to change the fundamentals of
Let us leave aside the largely per- grading, school infrastructure and out- India’s social structure, it would be
reflects how optimistic or pessimist they feel formative dimensions of NEP 2020, dated curricula. There is little value in remarkable indeed. It might even have
on those five counts a year ahead. Both indices such as its putative inspiration from evaluating continuous failure. been an object of admiration if it had
have the same formula. If positive and negative “ancient Indian knowledge”. For, this Barring a handful of professional discovered an easy way of ushering in
votes were to turn out exactly equal, the index might lead us to the tricky question of institutions, our higher education sys- social and economic change. Unfortu-
would be at a neutral 100. If the percentage of why such knowledge has not rid us of tem neither produces employable grad- nately, this is a chimera. Our most likely
some of the worst forms of social dis- uates nor capable researchers. This is future is the continuing decline of an
up-thumbs exceeds that of down-thumbs by crimination in the world. Neither is it the outcome of a lack of proper training educational system that requires trans-
10 percentage points, it would read a cheery worthwhile focusing on the formulaic of both teachers and students, the formations in content and not form.
110. And if anxiety exceeds confidence by the laundry list of supposed characteristics neglect of regional universities, and As for the view that the State should
same gap, the reading would dip to a gloomy for success in the modern world. Per- an exaggerated deference towards get out of running schools, we need look
90. An average of the CSI and FEI could offer formance is politics. Let us, instead, stay teachers that inhibits the development no further than at the “effectiveness” of
with the substantive issues. of a critical attitude. private healthcare during covid. The
us a composite index of consumer confidence, The language conundrum is one. The structural problems faced by lack of an efficient public health system
but it is the former that most analysts go by. There is great merit in valuing Indian the university system are extremely has cost us dearly. As writings on state
Expectations often go awry, after all, while the languages, including Sanskrit. How- unlikely to be solved by the establish- schools in Himachal Pradesh and Kerala
current report holds validity as a ground signal ever, the recommendation that stu- ment of a centralized administrative have shown, the State can do enormous
for analysis. This year’s crash of the CSI has dents be instructed in a manner such body, the noble but utopian goal of public good if it puts its mind to it. An
that “by the end of grade 9 they can erasing distinctions between arts and educated State is the key.
been steeper than the tumbles it took before
2014, a revival year, though it has largely been
slipping since 2015; after a spike in 2019, it was
on a downslide again. And then, in March,
covid struck. The pandemic seems to have
pushed people deeper into despondency over
earnings, employment and the economy, with www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Chandigarh*, Pune* Wednesday, August 11, 2010 Vol.4 No.190 Rs. 3.00
R3.00 32 PAGES

53.8 in July, down from 63.7 in May, its future worsening income and job worries having led Q&A:HUL’s Rajaram on the
changing Indian market >8
ENTERTAINMENT: ‘Peepli Live’ recovers
its production cost ahead of release >8

expectations index (FEI) rose to 105.4, a break
the drop of nearly 10 points from May to July. EXCLUSIVE PARTNER
EXPENSE ACCOUNT: Of investments
and advanced flights >21
WSJ: China’s trade surplus surges to
its highest level in a year and a half >27

into optimism zone, from a dismal 97.9 two Brighter job expectations next year have
SENSEX 18,219.99 æ 67.51

Tata Motors net

beats analysts’
NIFTY 5,460.70 æ 25.45

ASHESH SHAH/MINT
DOLLAR `46.40 Æ `0.27

ABHIJIT BHATLEKAR/MINT
EURO `60.79 æ `0.23

TOTALIZATION AGREEMENT

India, US close to
GOLD `18,125 æ `60 OIL $78.66 æ $2.10

QUICK EDIT
Cancun
The function of education
estimates;

months earlier. Hopes of a vaccine and the nudged July’s FEI back above 100, but finer is to teach one to think
conundrum
stock surges social security pact
B Y S HALLY S ETH
shally.s@livemint.com B Y S AHIL M AKKAR & SECURITY NET
T o get almost 200
countries to agree on
climate change is tricky.
························· S URABHI A GARWAL On Monday, United
MUMBAI ························· THE NEWS Nations secretary general

D riven by higher sales at its NEW DELHI The long-pending Indo-US totalization

Centre’s Atmanirbhar package may deserve data also points to a clear trend of tightening
Ban Ki-moon said the
UK subsidiary Jaguar
Land Rover (JLR), India’s larg- I ndia and the US are close to
clinching a long-pending
agreement, which seeks to link the social
security systems of both countries, is
climate change summit
at Cancun later this year

intensively and to think

est auto maker by revenue Tata
Motors Ltd on Tuesday report-
ed a consolidated net profit of
`1,988.73 crore for the June
quarter, beating Street expec-
tations and sending its shares
agreement that will link the so-
Court order: Securities and Exchange Board of India chairman cial security systems of both
C.B.Bhave (left) and MCX-SX vice-chairman Jignesh Shah. countries and thereby allow
workers from each country to
NEW PRODUCTS draw the benefits from their
contributions.
likely to be inked during US President
Barack Obama’s planned visit to the
country in November.
THE BACKGROUND
The issue was first discussed in 1994.
However, the US was not keen to link its
might not see such an
agreement. The stalemate
at Copenhagen last year,
and recently at Bonn,
is sufficient indicator of
the difficulties in reaching

Sebi verdict
social security system to that of India.

credit for this mood uplift, but sustaining it thrift. This is consistent with CSI signals of a
higher. In the absence of the totali- a broad consensus on
The profit compared with a zation agreement, which is THE IMPLICATION the subject. But when the
loss of `328.78 crore in the likely to be inked during Presi- The agreement will benefit Indian top cheerleader for the
same period a year earlier. dent Barack Obama’s visit later workers, mainly IT professionals, and
US nationals employed in India. People
negotiations admits this,
Revenue rose to `27,055.57 this year, expatriate workers it’s cause for concern.

critically. Intelligence plus

from both countries have been paying

on MCX-SX
crore from `16,472.97 crore. from each country forfeit their towards social security, but were That’s because the last
Tata Motors’ earnings were contributions if they do not deprived of refunds and other time the world met on
boosted by improved margins meet the criteria. benefits. climate change, the costs
at JLR, the luxury car maker it “Earlier there was a dead- outweighed the benefits.

will be hard without a renewed fiscal push. rapid descent into a spiral of scroungy times
acquired in 2008 from Ford lock on the agreement. The US Preliminary estimates put
Motor Co., and higher sales of was not very receptive about it. been pursuing the matter, the emission footprint of

by 30 Sep
new luxury models such as the But now both the countries have held meetings in the past the Copenhagen summit
Jaguar XJ. JLR accounts for have agreed to share data by one month to clear the decks at around 46,000 tonnes
two-thirds of net sales at Tata September giving details of In- before Obama’s visit. of carbon dioxide, not
Motors. dian and US workers in the re- To take the talks further, a to mention the millions
“We would have sold (a) spective countries and their delegation from the US is visit- spent. When you take

character—that is the goal

higher number of models had contributions,” said a senior ing India later this year to fi- opportunity costs into
it not been for the shortage of Bombay high court asks start trading in equities and a government official who did nalize the agreement. “Before account, you get a severely

Corona clamps meant that July’s survey had and weak demand. Arresting it would take
engines,” said Carl-Peter For-
ster, group managing director
and chief executive officer at
Tata Motors.
JLR, which has a long-term
contract with Ford for engines,
despatched 57,153 units in the
quarter, 58% higher than in the
corresponding period last year.
regulator to rule on the few other products. MCX-SX
claimed it had complied with
exchange’s application the ownership norms and recast
after the latter seeks its equity through a high court
approved scheme.
legal intervention The court also directed the
exchange to pass a board reso-
B Y K HUSHBOO N ARAYAN, lution in 10 days stating that the
A NIRUDH L ASKAR & promoters of the exchange,
not want to be named.
The ministry of overseas af-
fairs, ministry of commerce
and the department of infor-
mation technology (IT) along
with the US-India Information
and Communication Technol-
ogy working group, who have
this, officials from both coun- skewed balance sheet.
The Cancun meet is
TURN TO PAGE 3® likely to incur similar
expenses, and, if Ban and
ALSO SEE others are to be believed,
deliver similar results.
> India protests Bill to raise visa fees >P4 Will it be worth the show?
>OurView: A new visa for techies >P30

to be done by phone, like the one in May, so it direct fiscal action against a widespread loss of
A favourable exchange rate
against the dollar, euro and
pound also helped margins.
The earnings handily beat
analysts’ predictions of a profit
of `1,200 crore, and sent the
stock to `957.30 at close of trad-
ing on Tuesday, a 4.17%, jump
over the day before.
of true education.
N . S UNDARESHA S UBRAMANIAN Multi Commodity Exchange of
························· India Ltd and Financial Tech-
MUMBAI nologies (India) Ltd, will not
T he Bombay high court on
Tuesday directed capital
market regulator Securi-
ties and Exchange Board of In-
dia (Sebi) to take the final deci-
raise holdings beyond what is
permitted. Going by the current
norms, the promoters cannot
hold more than 5% each.
Meanwhile, Sebi will gather
sion on the MCX Stock Ex- information from the stake-

cannot claim to represent all of India. Yet, it is a economic confidence. Money handed out via
The benchmark Sensex fell
0.37% to 18,219.99 points. The
stock earlier hit `967.30, the
highest in more than two dec-
ades, according to Thomson
Reuters data.
Tata Motors’ India opera-
tions reported sales
`10,416.26 crore, 62% higher
change Ltd (MCX-SX) applica-
tion to launch new products on
its exchange platform by 30
September.
The court’s order follows a 16
July writ petition filed by the ex-
change, seeking legal interven-
of tion over the regulator’s delay
in deciding on its application to
holders in the exchange, includ-
ing 18 banks, on whether they
have entered into any buy-back
arrangement with MCX-SX.
The order was passed in the
backdrop of Sebi’s claim that
MCX-SX, while reducing the pro-
TURN TO PAGE 2®

credible signal of popular sentiment. Broadly, cash transfers and tax relief could work as a
than a year ago. Profit was low-
er at `395.72 crore from
`513.76 crore in the year-ago
MATH MATTERS

MA RTI N LU THE R K I N G
period, when it had been
boosted by stake sales in other
group firms.

ALSO SEE
Indian scientist offers
proof for P=NP riddle
the CSI captures the views of 5,400 randomly boost. But inflation mustn’t flare up in the
> MARK TO MARKET: JLR drives Tata
Motors performance >P18

B Y S AMANTH S UBRAMANIAN researchers”, he wrote: “This

samanth.s@livemint.com work was pursued indepen-
························· dently of my duties as a HP
NEW DELHI
Labs researcher, and without

V inay Deolalikar, a scientist

at HP (Hewlett-Packard)
the knowledge of others. I
made several unsuccessful at-

picked households in 13 cities (5,342 this time), process. Price sensitivities needs to be kept
Labs in California, has pro-
posed a possible proof for the
famed P=NP problem in math-
ematics—a feat that could net
him $1 million (`4.6 crore) for
solving one of the seven Clay
Mathematics Institute Millen-
nium Problems.
Deolalikar has released his
tempts these past two years
trying other combinations of
ideas before I began this
work.”
The paper still needs to be
published in a major refereed
journal and then be “generally
accepted” by the mathematical
community within two years of

with respondents asked to rate the economy, track of, too. Maybe RBI’s confidence survey
100-page proof online, and in a
6 August email to his “fellow TURN TO PAGE 2®

Mint is also available for R5.50 with Hindustan Times under a combo offer

jobs scenario, inflation and their own income should be done every month from now on.

MY VIEW | MODERN TIMES

The clarity with which atheists should view believers

most important attribute of God—success.
MANU JOSEPH God has endured. Across the millennia,
innumerable gods have vanished, but the
ones that survived are only evolutions of
older gods. Dismissing a force so ancient,
one that has endured, is an expensive mis-
The more we insult the past in the name of instance, the almost annual feminist rewrit- There have always been two kinds of
the future, the more territory the present ing of Sita as a more independent woman. believers. Those who believe in God, and
will have to concede to the past. The future Sita shows us the preoccupations of another atheists. Some of the most influential scien-
is merely a hope of a better age and better time, just as Agatha Christie’s depictions of tists of Western civilization were great
humans; the past, on the other hand, is a vast Africans were a reflection of her times. believers in God, like Isaac Newton, or
body of evidence of what humans really are, Should heritage only be what is good about strongly suspected there was some kind of

A
lmost every atheist has said this at
least once, “But I believe in a force.”
Some of them have since down-
graded truth as far less exciting—that life
and the universe have no point, no meaning.
Some atheists feel, even when they have not
ingested any substance, that living things are
“interconnected”. Others say something in
take that India’s modern intellectuals com-
mitted after Independence.
They were deluded by an impractical
modern political idea—secularism. Imagine
someone trying to sell a subscription to an
orphanage; that is what secularism is from a
cultural point of view. The dismissal of
Hindu discontent in the name of modernity
and what truly matters to us. That, in my our ancestors that modern atheists approve God, like Charles Darwin. And there were
view, is what God is. An of? From a literary point of many scientists who said there was no God
insight from history into view, it is pointless to con- but were deeply influenced by the magic
human nature. Self-declared vert a figure like Sita into realism of divine fables. It is not a coinci-
The sound of prayers an unremarkable fictitious dence that the Big Bang theory can be sum-
and even the physical rationalists modern person. marized by one the most famous opening
actions of rituals are from a In this light, believers lines of a story ever: “In the beginning was
very ancient time, when
ought to ask are our true conservation- the word…”

is a journalist, and a novelist,

the base of your spine can “awaken”. What is
common to the whole spectrum of atheists
most recently of ‘Miss Laila,
Armed And Dangerous’
is that they tend to look down upon believers
in God. They deny the magic of divinity.
Last week, when ground was broken for a
shrine to Ram in Ayodhya, people who con-
sider themselves rationalists once again con-
demned believers as delusional and irra-
tional. But this is a useless way to see most of
humanity. How then must they perceive
believers?
There are rational explanations for God.
As an ancient fable that has been taken too
seriously, as a contagious delusion from a
long time ago, as a misunderstanding of dra-
matic natural phenomena. All these miss the
resulted in the political annihilation of those
associated with that insult, and the present
miseries of Muslims.
There is something sad about the conse-
cration of a Hindu temple on a site where a
mosque stood for centuries and was then
demolished by a mob. The Supreme Court of
India was supposed to be a creation of mod-
ernity and rationality but, in the end, one of
its most influential verdicts, granting the
disputed site in Ayodhya to Hindus, seemed
like an emotional act. And there is a message
that the temple’s construction may send:
modernity, too, is a fable like religion, and
the overestimation of modernity will always
be punished by the past.
the present gods were
other gods and present
themselves, ists. They resist the sancti-
monious marauders who
The origin of scientific inquiry lies either
in religion or in a revolt against it. In fact, sci-
faiths existed in other
forms. This is a matter of
‘Am I a believer try to demolish their faith
in order to build a shrine to
ence itself has become religion. It has all the
crucial attributes—an abstraction explains a
pure heritage. How then too, and if so, modernity. mystery, a handful of people fully under-
can modern folk, who so From the antiquity of stand the medium in which the explanation
claim to love heritage, who is my Ram?’ God, we know the central is delivered, they evangelize, people believe,
lament God? The true heri- principles of human story- and the infidels are ostracized. Can’t we see
tage of a place is rarely telling that will endure. this quality in theories of the Big Bang, quan-
what global intellectuals nag us about. The That if you want to tell a great story, there tum mechanics and climate change?
real culture of a place is what does not can be conflicts and grey characters, but in Despite our claims of “logical thinking”,
require nagging and lament—like local food, the end, good has to triumph. we have not arrived at our present beliefs
music, practical garments, rituals and God. The fact that humans tend to believe in after a process of deep honest debate in our
Those who are hurt by a scratch on an the paranormal should ideally make the heads. We believe first, and then find evi-
ancient monument are often the type who so-called rationalist ask, “Am I a believer too, dence. We are all believers. Clarity is simply
constantly disfigure ancient myths. For and if so, who is my Ram?” knowing who is our Ram.
 VIEWS MONDAY, 10 AUGUST 2020
NEW DELHI 13

MY VIEW | IN THE MARGINS M I N T C U R AT O R

The nation-state is back with a

vengeance thanks to covid-19
Heavy post-pandemic state interventions have reversed globalization in a way that neither 9/11 nor the 2007-09 crisis could

REUTERS

Various Nasa missions have helped map the solar system ESO/L. BENASSI

Our solar system actually looks like a croissant

N asa has revealed the strange shape of our solar system: a deflated croissant. The
new findings came after researchers used data from a variety of Nasa missions
to plot out the shape of the magnetic bubble surround all of the planets in our sys-
tem. Traditionally, depictions of that bubble have shown it as something like a
VIVEK DEHEJIA comet, with a rounded leading edge and a long trail behind it.But in fact it appears
is a Mint columnist to be a much strange shape, like a croissant that has been badly baked or an ear. The
magnetic bubble that wraps around all the planets of our solar system is made as
material flows out of the Sun in the solar wind. Outside of it is the point known as
the interstellar medium, which fills up the gap between our solar system and the
other planetary systems that are our neighbours, throughout the universe.
The Independent

A helmet that works like a Fitbit for your brain

D
uring the high water phase of glo-
balization, it was becoming fashion-
able to write off the continuing rele-
vance of the nation-state, and, by
extension, the ability of national
governments to shape economic,
social and other outcomes within their borders.
What the terrorist attacks of 11 September 2001
and the global financial crisis of 2007-09 failed to
do over the span of almost two decades, the cov-
id-19 global pandemic has managed to achieve in
a matter of months: the reinvigoration of both the
nation-state and national governments.
To put it simply, borders are important again,
and national governments once again play a deci-
sive role in shaping the daily lives of their citizens,
as opposed to merely laying out the broad con-
tours of economic and social policy within which
private agents could freely interact.
Harvard economics professor and former US
treasury secretary Lawrence Summers, one of the
key intellectual architects of the “Washington
consensus” that built our globalised world, has
argued recently in the Financial Times (Covid-19
Looks Like a Hinge in History, 14 May 2020) that
the three most cataclysmic events to shape the
present century have been the 2001 terrorist
attacks, the 2007-09 global financial crisis, and
the covid-19 pandemic.
Taking a somewhat broader view, looking back
at the past 100 years, and taking a leaf from Sum-
mers himself, I would amend the list as follows:
the assassination of Austrian Archduke Francis
Ferdinand by a Serbian terrorist in 1914 that trig-
gered World War I, the stock market crash of 1929
that triggered the Great Depression of the 1930s,
and the current covid-19 global public safety
emergency. It is noteworthy that the first was a
political event that triggered a major war, and the
second was an economic event that triggered a
worldwide economic crisis, while our current cri-
sis is a global emergency triggered by the prolifer-
ation of a deadly virus.
It is remarkable that the 2001 terrorist attacks
and the 2007-09 global financial crisis did not, in
the end, succeed in unravelling the move toward
an ever more globalized world, but rather merely
stalled the movement a little bit for a few months
and a few years, respectively. For instance, after a
lockdown for a few days after 9/11, flights into the
US resumed. (I recall being in New York City
about a week later, seeing the still smouldering
ruins of the twin towers.) Meanwhile, after the
global financial crisis, the twin bazookas of
unconventional monetary policies and large-
scale fiscal stimulus managed to get the global
economy back on track, and bankers and fund
managers were back to their freewheeling and
risk-taking ways within a half-dozen years or less.
Optimists believe that the same will hold true of
the current crisis, but I have serious doubts. As I
have written earlier in this space, protracted lock-
downs and restrictions on normal economic
activity across the world are likely to have pro-
found “hysteresis” effects: that is, long-lasting or
perhaps permanent effects emanating from a sin-
gle shock to the system that itself dissipates over
time. Lockdowns, while being eased, have been in
place in most countries around the world for four
months or more. They are likely to have a signifi-
cant and potentially long-lasting impact on eco-
nomic and social outcomes. This is a longer span
of time than how long it took for normal life to
resume after either 2001 or 2007-09. Back then,
people’s daily routines sprang back rather quickly
for many—or, in quite a few cases, never stopped.
Two clear trends have emerged: a disappear-
ance of the borderless globalized world, and a
sweeping away of classical liberal or libertarian
fantasies of a permanently reduced role for gov-
ernments in economic and private activity.
Rather, hard lockdowns have made national bor-
ders more relevant than they’ve been at any time
since the end of World War II—indeed, even bor-
ders between sub-national jurisdictions within
federal states have assumed renewed impor-
tance—and governments everywhere have
invoked emergency powers to curtail economic
and personal interactions.
Meanwhile, massive fiscal stimulus across
advanced economies has once again given gov-
ernments an outsized role in economic activity,
while a doubling down on unconventional mone-
tary policies has reversed halting steps to return
to monetary policy normalcy following the global
financial crisis. In the bargain, normal democratic
functioning has been suspended just about every-
where, with governments, in effect, ruling by
decree and relying on enabling legislation that
grants them virtually unlimited powers once a
state of emergency is declared. This is the very
antithesis of the globalized, liberal, democratic
world that many of us, perhaps naively, believed
we were living in or at least moving toward a mere
six months ago.
Governments, once circumstances hand them
the opportunity to expand their powers, very
rarely, if ever, cede those powers voluntarily—and
this proclivity to grab power and hang on to it cuts
across putative distinctions of ideology and across
party lines. After the assassination of Francis
Ferdinand in 1914, it took the world the better
part of a century to recreate the globalized, liberal
world order that two world wars and a depression
in between them managed to subvert. Hopefully,
it will not take another century, but it is going
to be quite a few years before we return to that
world again.
B ryan Johnson, 42, is the founder and chief executive of Kernel, a company
which is trying to downsize the expensive, cumbersome brain scanning
machines currently used for neuroscience... Based in Los Angeles, Kernel originally
explored the option of developing invasive implants such as those already used to
combat the symptoms of Parkinson’s disease, but decided the external monitoring
market was a better niche. Johnson, a software entrepreneur who sold his first busi-
ness to eBay in 2013, has put $54m of his own money into the company, and it raised
another $53m in June this year. His company has already carried out demonstra-
tions including “Shazam for the brain”, in which the technology figures out what
song is playing simply by analysing a participant’s brain activity.
The Telegraph
Beware of fake video clips of the blast in Beirut
D octored videos of Tuesday’s devastating explosion in Beirut are already circu-
lating on every major social media platform. In videos originally shot by both
CNN and eyewitnesses in the Lebanese capital, footage of a rising smoke plume at
Beirut Port was inverted and made to look like a “negative.” In addition, a missile-
like object was superimposed on the video. Some of the manipulated footage was
taken from the Facebook page of Beirut-based, CNN Arabic social media producer
Mehsen Mekhtfe. He had captured the explosion while walking near the port—
something that he does frequently during that time of day. “Many people reached
out to me to tell me that it’s fake,” Mekhtfe told CNN, referring to the fake missile
video. “But it’s my video and I have the original and it doesn’t show that...”
CNN
Keep those quantum computers in deep freeze
I magine the US is under attack... But the nation’s best defence is not an aircraft
carrier or a missile system. It’s a box of incredibly cold atoms. “Use the quantum
computer,” yells a general. The atoms inside the computer can solve complex prob-
lems and, almost instantly, spit out an instruction. One firm already getting to grips
with a scenario like this is ColdQuanta. It recently signed a contract with US defence
research agency Darpa to build a quantum computer that can rapidly work out how
best to reposition radar equipment in the event of a defence system partially failing.
The project relies on being able to gather together enough atoms as qubits—the
building blocks of a quantum computer... To do this, the atoms have to be extremely
cold, making such computers the coldest in the world.
BBC
The shameful insensitivity of lock-ups in the UK
C hildren with Down’s syndrome and autism were among those left for hours
in [English] court cells while they waited for legal representation or transport,
a custody watchdog has revealed in a damning report. The treatment of some young
people, including those with disabilities, was labelled unacceptable and a “matter
of embarrassment” for the criminal justice system by the Lay Observers (LO)... In
its annual report, the watchdog said young people and those with health problems
were falling through the gaps. As well as raising concerns about “filthy cells” and
“complicated” transport arrangements made between police, courts and prisons,
the report warned of poor record-keeping of medical needs and a lack of sanitary
items for female detainees in some cell blocks.
The Guardian

GUEST VIEW

The menace of counterfeit drugs that India must fight

India has been battling the challenge of
GAJENDRA SINGH substandard drugs for a while. The problem
was in the spotlight when the government
launched its Jan Aushadhi initiative, in
which five medicines were reportedly
recalled in a span of 20 days because of qual-
tory quality regulations that drug makers
must adhere to. Not just locally, India’s repu-
tation in the global pharmaceutical market
is at stake.
A parallel world of fake medicines can
have a severe impact on overall healthcare,
or patient, the current procedure is that the
drug controller raids the medicine shop and
takes samples of the drug in question to lab-
oratories for testing. Once the DCGI receives
the result of a test, it releases a memoran-
dum that states the quality of the drug to be
under the name of a certain pharmaceutical
company that is almost always unaware of it.
Fighting this menace is beyond the purview
of individual pharmaceutical companies,
though it is in their interest to see it stopped
for the damage it causes their reputation,

I
ndia imports around 70% of its raw materi-
als, like active pharmaceutical ingredients
and key excipients, for the manufacture of
essential drugs from China, the fraying of ties
with which has transformed the course of the
country’s pharmaceutical business. Even as
we promise to “Make in India”, we will have
to take tough decisions as far as our drug
ity lapses. There were also reports of this
number rising to 11 in four months.
Estimates for 2019-20 reveal that during
this period, India had four drugs and 27
batches that were recalled. In fact, for many
of these drugs, the shelf-life was only three
months. The government must tighten its
noose on quality and ensure that patient
causing adverse side effects or worsening “Not of standard quality”, without informing and calls for intervention from authorities
the spread of diseases. the drug controller of the like the drug controller and even law
India has just 20-30 test state or the pharmaceutical enforcement agencies. If the ministry of
laboratories that can tell We need a company whose name the commerce and industry wants to enhance
good or relatively poor- drug’s packaging bears. It is the image of Indian pharmaceuticals, then
quality products apart regulatory important for the DCGI to solving this problem is imperative.
from counterfeits. We clearly state whether the As of now, many well-reputed drug firms
need a lot more, not least
mechanism that drug tested falls under the unfairly find themselves at the receiving end

is a public health expert

dependence and domestic market are con-
cerned. While the government is working
towards making India self-reliant, a potential
shortage of drugs and an inward-looking
approach could pose another challenge—the
perils of counterfeit drugs. Domestically-
produced generics have often come under
the scanner for failing quality tests. A World
Health Organization (WHO) report in 2017
said, “About 10.5% of medicines sold in low
and middle-income countries, including
India, are substandard and falsified.” This is
especially alarming at a time when the world
is anxious about the adequacy of basic medi-
cine supplies, given the reduced production
and increased demand mostly everywhere.
safety takes precedence over geography for
medicines. The idea is to give patients the
safest option available, whether it comes
from the domestic market or overseas.
As per 2019 statistics, India had only 47
drug testing facilities under the National
Good Laboratory Practice programme. To
make matters worse, we had only six central
labs, testing just 8,000 samples per year.
In 2018, the Central Drug Standard Con-
trol Organization identified about 4.5% of all
generic drugs in the Indian market to be
substandard. Additionally, just one-fourth of
the 12,000 manufacturing units in India
have been found to comply with the WHO’s
good manufacturing practices, the manda-
because of the rising
demand for quality health-
is geared for category of a poor quality
or counterfeit drug. This
of anger over scandals involving fake drugs
being recalled that they had nothing to do
care in India.
The Drugs Controller
quality and will help us plug a big gap in
addressing the issue of fake
with. What’s worse is the lack in clarity of fil-
ing a criminal case against the counterfeit
General of India (DCGI) armed against drugs. It could guide the drug seller or medicine shop.
should work closely with appropriate course of At a time when we are talking about mak-
local drug control authori- fake drugs action to be taken. Pharma- ing India self-reliant, we must not forget that
ties and pharmaceutical ceutical companies should we have also had feedback from drug regula-
companies to get to the only be held responsible tors around the world for discrepancies in
root of the problem. A joint effort is needed for producing poor-quality drugs, not for our manufacturing quality. What India
so that well-defined protocols are followed pills that are imitations of what they make. needs is a regulatory mechanism that not
to help combat the crisis of counterfeit drugs It is counterfeit drug sellers at the retail only promises an influx of innovative drugs
and ensure the safety of patients. level that should be held responsible for from around the world, but also ensures that
If a particular drug produced by a phar- fakes after such an investigation, because our patients have access to superior quality
maceutical company is sent for a quality they procure these from dubious suppliers. products. Combating counterfeit drugs
check after a complaint is raised by a doctor Fraudulent agents sell fake drugs illegally should be a key objective of the exercise.
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