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SUNDAY, 7 JUNE 2020

10 pages in 1 section WORLD P6 WORLD P6
NEW DELHI (CITY)
~10.00
VOLUME XIV NUMBER 11
OPEC, RUSSIA AGREE TO EXTEND BIDEN WINS ENOUGH DELEGATES TO
RECORD OIL PRODUCTION CUTS CLINCH DEMOCRATIC NOMINATION
PUBLISHED SIMULTANEOUSLY FROM BENGALURU, KOLKATA, MUMBAI AND NEW DELHI

Vedanta takes Yatra terminates ~2,300-cr

VIRUS INDIA RECORDS
TRACKER 294 DEATHS
IN 24 HOURS
INDIA
~17,000-crore merger pact with US’ Ebix
Total 236,657 Demands substantial damages due to alleged breach of agreement
Active cases Recovered Deaths

coronavirus hit
NEHA ALAWADHI benefit of Yatra’s bargain for
115,942 114,072 6,642 New Delhi, 6 June A DEAL UNDONE its stockholders.”
The deal was supposed to
WORLD Total
Note: Total cases
include 1 migration; Online travel company Yatra $27.6 mn 13: Strategic conclude in the October-
figures as of 10 pm Yatra’s revenue in acquisitions by
6,789,313 IST; Sources: has terminated its pending December quarter after regula-
Ministry of Health
and Family Welfare;
Posts pre-tax loss of ~15,269 crore in Q4FY20 merger agreement with US- the quarter ended Ebix in India in tory approvals but went through
Deaths based software firm Ebix and Dec 31, 2019 FY18; 3 in FY19 several extensions, according to
396,131
Johns Hopkins
Coronavirus due to impairment charges for oil & gas biz filed litigation against it in the regulatory filings with the US
Resource Centre
State of Delaware, seeking “sub- $32.5 mn $338 mn Securities and Exchange
ADITI DIVEKAR & UJJVAL JAUHARI stantial damages” for alleged Available liquidity US firm offered Commission.
Mumbai/New Delhi, 6 June breaches of terms of the pact. with the company to buy Yatra in “The merger agreement
INDIA, CHINA ARMIES Ebix had signed the agree- as of June 4 July 2019 contains certain termination

A
nil Agarwal-led Vedanta Ltd ment last year to acquire rights for Ebix and Yatra, includ-
HOLD TALKS OVER on Saturday reported a con-
solidated loss before tax of
Gurugram-based Yatra Online
for an enterprise value of $338
$580.6 mn Nov 2019: Original deadline to ing, among others, the right of
either party to terminate the
BORDER STAND-OFF ~15,269 crore for the March million (about ~2,327 crore) in
Ebix’s revenue
in FY19
close the deal, which went through
several extensions
merger agreement if the merger
Indian and Chinese armies on Saturday held 2020 quarter, as against a profit before an all-stock deal. has not been consummated on
Lieutenant General-level talks in their first tax of ~4,104 crore in the same period last “The complaint seeks to or prior to the outside date,
major attempt to resolve the month-long year, on account of impairment charges hold Ebix accountable for ancillary extension agreement, breached material terms of the which was previously extended
border stand-off in eastern Ladakh. The Indian for its oil and gas business assets. breaches of its representations, and seeks substantial dam- agreements and frustrated to May 4, 2020,” Ebix had said
delegation was led by Lt General Harinder The exceptional item for Q4FY20 warranties, and covenants in ages,” Yatra said in a statement Yatra’s ability to close the in a filing on May 20.
Singh, the general officer commanding of Leh- was at ~17,132 crore, primarily due to the merger agreement and an late Friday. “Ebix’s conduct transaction and obtain the Turn to Page 4 >
based 14 Corps, while the Chinese side was impairment of its Cairn and Rajasthan
headed by the Commander of the Tibet Military oil and gas assets and, to a small extent,
District. “Indian and Chinese officials continue exploration, copper, and iron ore busi-
to remain engaged through the established
military and diplomatic channels to address
the current situation in the India-China border
areas,” an Indian Army spokesperson said. PTI
nesses. The impact on property, plant
and equipment, exploration, and other
assets was triggered due to a significant
fall in crude oil prices after the Covid-19 Anil Agarwal-led firm’s revenue fell on POST-LOCKDOWN 4.0 REALITY Need to
BACK PAGE P10
outbreak, the company said.
“The Covid pandemic has hit the
world and us in the last quarter of the
the back of lower commodity prices
impacted by Covid and weak volumes
in zinc, oil and gas, and steel businesses
10,000 new cases a day reimagine
Kejriwal cracks whip
on private hospitals
Delhi Chief Minister Arvind Kejriwal on Saturday
year. We have taken a proactive
approach to keep our assets and people
safe while ensuring optimum opera-
tions during these difficult times,” Sunil
FINANCIAL METRICS
Figures in ~ crore
AFTER THE FOURTH ROUND OF LOCKDOWN THAT ENDED ON MAY 31, THE CENTRE
ANNOUNCED A PHASED OPENING OF BUSINESSES. While ‘Unlock 1.0’ will kick in from
Monday with malls, hotels, and restaurants restarting across many cities, the past
schools:
warned of strong action against some private
hospitals allegedly refusing admission to
Covid-19 patients and involving in “black-
Duggal, chief executive officer at
Vedanta, said.
For the full year 2019-20, the impair-
Revenue from
Q4
FY19
Q4
FY20
Chg
(%)
one week saw traffic building up on city roads, neighbourhood markets buzzing,
and office attendance inching up. During the week-long curtain-raiser to India
unlocking, new Covid-19 cases have been on an upward trajectory. In terms of
absolute numbers, almost 10,000 new cases — the highest so far — added each
Nilekani
marketing” of beds, and said his government ment charge was ~17,386 crore. Vedanta 23,092 19,513 -15.5 PRESS TRUST OF INDIA
operations day in this period. The new phase is especially challenging for the five
was going to issue an order stating that has taken large impairment charges in New Delhi, 6 June
Other income 1,628 627 -61.5 worst-affected states, accounting for nearly 70 per cent of the
hospitals could not deny treatment to such FY15 and FY16 on account of goodwill in
total confirmed Covid cases and over 78 per cent of Covid deaths
people. The Delhi government will depute Cairn India, where it had acquired a Staff cost 768 487 -36.6 The rapid shift to teaching and learn-
in the country. RUCHIKA CHITRAVANSHI & SACHIN P MAMPATTA
medical professionals at all hospitals, he said. majority stake in 2011. PBIDT 7,763 -11,953 PTL ing activities online, prompted by the
Also, the company’s consolidated closure of schools due to the Covid-19
Interest cost 1,401 1,064 -24.1
revenue for the March quarter declined pandemic, is only a “short-term
BACK PAGE P10 16 per cent to ~19,513 crore from the same PBT 4,104 -15,269 PTL response” and it is time to fundamen-
Indian firms continue period last year on the back of lower Net profit 2,615 -12,521 PTL tally reimagine schools as a resilient
commodity prices impacted by Covid, PTL: Profit to loss; PBIDT: Profit before interest, system that can function under con-
to make HCQ amid row weak volumes in zinc, oil and gas, and
depreciation & taxes
Source: Capitaline Compiled by BS Research Bureau
tinuous turbu-
Amidst a raging global controversy, steel businesses, and lower power sales lence, according
hydroxychloroquine makers in India continue at Talwandi Sabo Power Project. to Infosys
to manufacture the drug for the regular Base metal prices on the London MAJOR IMPAIRMENT DONE Chairman
rheumatoid arthritis and diabetes patients Metal Exchange (LME) had declined BY INDIAN COMPANIES Nandan
apart from catering to export orders. India is sharply during the March quarter. While Figures in ~ crore Nilekani.
the world’s largest manufacturer of HCQ, also average aluminium prices at $1,684 a Classroom
used as an anti-malaria drug. The Indian tonne were down 9 per cent year-on- Tata should not be the
government had placed orders for 100 million year (YoY), zinc, lead, and copper prices
Motors only location,
tablets, which have been delivered by drug averaged a 9-21 per cent YoY decline. Vedanta Hindalco teacher not the
majors Ipca and Cadila Healthcare. Lower realisations were partially off- Tata Steel only facilitator, “SCHOOLING
set by higher volume at aluminium and and textbooks
not the only BEYOND SCHOOL,
8,532

iron ore business, and rupee deprecia- Workers sanitise the South City Mall premises ahead of its reopening
5,887
7,122

COMPANIES P2 LEARNING
3,872

tion. Higher alumina production by 13 in Kolkata on Saturday medium,

19,956

PHOTO: PTI
27,838

12,304
11,605
17,386

Captives of large MNCs per cent YoY in Q4 helped reduce the

cost of production by 14 per cent, while New cases rising at a fast clip Five states account
Nilekani said on BEYOND
Saturday, while
halt new hiring in India iron sales in Karnataka were up 17 per FY19 FY15 FY20 FY16 FY15 FY14 FY13 FY16 FY09 for nearly 70% of delivering the
CLASSROOM, AND
Amid the Covid-19 pandemic, global in-house cent YoY. Turn to Page 4 > Note: Indicative list for financial year total Covid cases keynote address PLAYING BEYOND
centres (GICs), or captives of large at a virtual con- PLAYGROUND
80,229

multinational corporations, have halted new Maharashtra ference on SHOULD BE OUR

hiring. This is in line with the moves of Indian Confirmed ‘Future of
MOTIVE ”
information technology (IT) services firms,
which have decided to add employees only on
RIL LIKELY TO BECOME DEBT-FREE THREE cases
Deaths
Schools:
Overcoming Nandan Nilekani,
need basis. According to industry experts,
Indian captives of global enterprises are also
MONTHS EARLIER THAN TARGET Covid-19 chal- Infosys chairman
lenge and
optimising costs through various means. Mukesh Ambani could well be on weeks, while most other beyond’, organ-
his wayto transform Reliance companies were battling the Tamil ised by Ashoka University.
Industries (RIL) into a debt-free coronavirus (Covid-19) outbreak, Nadu “The rapid shift to move everything
Delhi
IN DEPTH company by Decemberthis year.
This is three months earlier than
RIL raised a staggering ~1.05 trillion
through a stake sale in its 100 per
Rajasthan online, zoom classes, teaching through
smartphones, all of this is part of a
28,694

Gujarat
A cycle ride to upward
26,334

10,084

what he had publicly told cent subsidiary Jio Platforms (JPL) short-term response, which was nec-
19,094

shareholders, according and via a rights issue in RIL, which essary but not sufficient. We need to
mobility
2,849

1,190

to sources close to the was oversubscribed 1.59 times. fundamentally reimagine schools,
232

708

build a resilient system strategically

218

The world might emerge from the company. In just six SURAJEET DAS GUPTA writes 2>
Covid pandemic riding on bicycles, detailing how are we going to deal with
JIO Investment Investors Stake
says JAGDISH KHATTAR. India has a chance the turbulence for next few years,” said
to lead the pack 7> PLATFORMS ~92,202 crore 6 19.9 % Source: Ministry of Health and Family Welfare, Business Standard calculations
Nilekani. Turn to Page 4 >

Under Covid shadow, the expat life is struggling to survive

Health fears, travel restrictions cause more globe-hopping workers to return; hefty allowances, once de rigueur for international postings, are rarer than ever
KATRINA NICHOLAS & EMILY CADMAN
6 June
Stuck in an apartment with a toddler and
a newborn wasn’t Australian Nikki
Martin’s dream of the exotic expat life.
Like many in Singapore in late January,
she was watching anxiously as daily
coronavirus case numbers climbed. After
seven years working in the city-state, and
in the United Arab Emirates before that,
there was a small window to leave, and
she took it. “I packed a few suitcases, and
that was it,” says the 37-year-old
marketing executive. “Within 36 hours we
were on a plane.”
Martin is one of a growing number of
expats across Asia and beyond pulling up
stakes and returning home. All too
quickly, coronavirus has taken the sheen
off many elements of expat life. Gone are
the weekend trips to Bali and carefree
getaways to Phuket. Grandparents and
parents suddenly seem very far away, and
the fear of being confined in a country
where the local language may be foreign
and governments more prepared to help
their own citizens than globe-hopping
contract workers is real.
While figures are hard to come by,
statistics agency. countries, toward hiring local personnel, employee’s children — once de rigueur
Ella Sherman, an associate executive which advances policies to provide more for many international postings — are
sales director at Knight Frank in employment opportunities for nationals, rarer than ever. With health fears now
Singapore who specialises in expat who are often paid less. Working and heightened, even countries where many
housing searches, says she’s hearing of living abroad is becoming less lucrative companies offer extra hardship pay,
“two to three people a day” leaving. “A lot for citizens of nations such such as India or China,
want to be closer to home, to parents and as Australia and the United aren’t appealing.
family, but also some are being Kingdom (UK), where The fear of being “You’ll see an increased
retrenched,” Sherman says, referring to some taxation policies confined in a reluctance for people to go
the process of employers terminating aren’t as favourable for country where the to locations where the
staffers as they trim their operations in those who live overseas. local language may medical infrastructure is
anticipation of a weakened business Meanwhile, the optics be foreign and inadequate,” says Lee
climate. “And if you’re used to travelling of all-white-male governments more Quane, regional director
every other weekend and now you can’t, leadership teams — a prepared to help for Asia at consulting firm
well, there are many who aren’t handling common sight for their own citizens ECA International. “So
this very well.” decades at the offices of than globe-trotting that’s probably the more
The pandemic, which has sickened some Western companies contract workers developing locations such
more than 6.4 million people worldwide in Asia-have become less is indeed real as the Philippines, India,
signs of an expat shift are starting to and brought global travel to a near- desirable, especially for where the issue isn’t just
emerge. Of the 42,800 New Zealand standstill, is adding to existing pressures businesses that have to the risk of catching Covid
citizens who returned from living that had already been chipping away at deal with local governments or agencies. 19, but also whether you’ll have access to
abroad in the year ended on March 31, the expat lifestyle. There’s been a shift in And headhunters say contracts that the same sort of quality treatment as back
almost half arrived in the previous three Gulf nations such as Oman and Saudi include hefty allowances for housing, home.” Turn to Page 4 >
months, according to the country’s Arabia, as well as in some other Asian cars, and international schools for an BLOOMBERG
2 COMPANIES
>
NEW DELHI | 7 JUNE 2020 1

IN BRIEF
Near-term outlook for FMCG RIL may be debt free 3 Captives halt
extremely uncertain: HUL
The near-term outlook for the fast-moving
months before target hiring in India
consumer goods (FMCG) market is DEBASIS MOHAPATRA Of late, these GICs have also
“extremely uncertain” as the Covid-19 Bengaluru, 6 June emerged as preferred employ-
outbreak had a “terrible impact” and the SURAJEET DAS GUPTA ers among Indian techies
situation remains volatile with the
trajectory of the coronavirus undeter-
New Delhi, 6 June HOW RELIANCE Amid the Covid-19 pandemic, because of higher salaries and
global in-house centres (GICs) better working conditions.
mined, according to HUL. While describing WILL MEET THE or captives of large multina- Also, the lack of overseas oppor-
CHALLENGE
M
the current situation as “much more uncertain than normal”, the ukesh Ambani could well be on tionals have halted new hiring. tunity amid restrictive visa
firm added that it is confident about its ability to manage the his way to transforming This is in line with the moves of regime of the US has made
immediate crisis.”The situation remains volatile with the traj- Reliance Industries (RIL) into a ~48,629 cr via PE deals Indian IT services firms, which working with these captives
ectory of the virus undetermined, evolving hot spot geographies, debt-free company by December this year. in Jio Platforms (JPL) have decided to add employ- attractive in recent years.
the success of containment measures uncertain, the severity and This is three months earlier than what he ees only on need basis. Given the engineering tal-
duration of resulting economic crisis and the extent of structural had publicly told shareholders, accord- ~43,574 cr raised via According to experts, as ent base of India, many GICs
damage unknown,” HUL Chairman and MD Sanjiv Mehta said in ing to sources close to the company. 9.9 per cent stake sale most global enterprises are fac- have also expanded their oper-
his address to shareholders in its annual report for 2019-20. PTI< In just six weeks, while most other in JPL to Facebook ing an uncertain demand envi- ations by driving new initia-
companies were battling the coronavirus ronment, their cap- tives out of Indian
outbreak, RIL raised a staggering ~1.05 ~13,281 cr via RIL rights tives in India are These captives centres. However,
Divi's Labs Q4 net L&T reappoints trillion through stake sale in its 100 per issue (25% paid-up ) also optimising together employ industry watchers
cent subsidiary Jio Platforms (JPL) and ~7,000 cr via 49% costs through vari- more than 1.1 said the scale of
profit up 33% at Naik non-executive via a rights issue in RIL, which was over ous means. Apart million people operation has taken
~388 crore chairman for 3 yrs subscribed by 1.59 times.
stake sale to BP in from hiring freeze, out of the total a beating in the last
Drug firm Divi’s Laboratories Engineering and construction RIL raised ~92,203 crore from six
fuel retailing deferment of digital 4.3 million three months.
on Saturday reported a giant Larsen & Toubro (L&T) on investors, which include marquee play- ~53,000 cr projected projects is among staffers in the “Many of the new
32.96 per cent rise in its Saturday said its board had ers like Facebook for a 19.9 per cent stake cash profits from measures being tak- Indian IT industry initiatives, mostly in
consolidated net profit to given nod for reappointment in Jio Platforms, which controls operations between en by these GICs to the digital space,
~388.23 crore for the quarter of A M Naik as non-executive Reliance Jio as well as various digital April and December tide over the crisis. have been scaled down in
ended March 31, 2020. chairman of the company for a platforms. It also raised ~53,125 crore “Many of the GICs operating recent months, though the ‘run
The company had posted a net period of three years from though the rights issue where share- in India have put their hiring the operation’ kind, compris-
profit of ~291.97 crore for the October 1, 2020. Naik’s present holders have paid only 25 per cent of plans on hold. As situation is ing support and maintenance
same period previous financial tenure is scheduled to end on the money upfront. The remaining Total Net debt* yet to improve in the US, UK have not been affected,” said
year, Divi’s Labs said in a BSE September 30, the amount will be paid in tranches in one ~1.65 trn ~1.61 trn and many other European Pareekh Jain, an IT outsourcing
filing. PTI< conglomerate said in a to one and a half years. That is not all — nations, there is no clarity on advisor and founder of Pareekh
regulatory filing to the BSE. PTI< Reliance also received ~7,000 crore by demand environment, leading Consulting.
*RIL’s consolidated net debt as on
selling 49 per cent stake in its petro March 31, 2020 to such moves,” said Aditya He, however, added that
Amul Twitter a/c retail business to BP. Narayan Mishra, director and GICs are likely to bounce back
blocked after ad Canara Bank cuts Sources close to the company said chief executive officer at CIEL faster than the IT services firms
targeted China repo-linked lending that based on last year’s cash genera- ed) and not December. But the target its next phase of growth without going HR Services. once the pandemic is con-
tion, RIL is expected to generate cash will be reached. for debt. Sources said salaries of tained. “If work from home
The Twitter account of the rate by 40 bps profits of over ~53,000 crore by the end Also, the sources said that due dili- It will need money for buying 5G employees working in some of becomes an integral part of
Gujarat Cooperative Milk State-owned Canara Bank on of December (for a nine-month period), gence is on by Saudi Arabian oil giant spectrum, further expansion of its net- these captives have also been operations, then we should
Marketing Federation Saturday announced reduction making it a debt-free company by Aramaco to pick up a 20 per cent stake work and for a big push in fixed broad- cut, in sync with their global expect higher volume of new
(GCMMF), owner of the Amul in its repo-linked lending rate December itself. RIL, however, declined in the oil-to-chemicals business of RIL band. Size of its cash is about half of operations. tasks to be done from these
brand, was blocked briefly (RLLR) by 40 basis points (bps) to to comment on the issue. for $15 billion (~1.18 trillion). There is what RIL has invested till date – of India is home to more than GICs,” Jain added.
after it posted a cartoon 6.90 per cent. Meanwhile, the However, critics said it will be diffi- every chance that the debt-free status around ~3 trillion in telecom. It also 1,300 captives with most of the Some GICs are also looking
apparently calling for a boycott bank also slashed its marginal cult for Reliance to reach last year’s lev- could come even earlier, if this deal is needs to invest as it makes aggressive Fortune 500 companies hav- at exiting Indian operations by
of Chinese products. GCMMF cost of fund-based lending rate els of cash profits, primarily because the done within December. moves in the e-retail space where it is ing their technology support outsourcing their work to IT
Managing Director R S Sodhi (MCLR) by 20 bps across various refining business as well as demand for With over ~1.58 trillion of cash to be taking on giants like Amazon and and development work operat- services firms in order to save
said that Twitter blocked its tenures. The revised lending petrochemicals has seen a fall due to generated through a combination of Walmart’s Flipkart in a three-pronged ing out of India. These captives cost. Earlier, in an interaction,
handle @Amul_Coop after its rates will be effective from June the Covid-19 outbreak. Aramaco sale (if the deal fructifies but race to woo consumers. And the icing on are also a major source of Keshab Panda, CEO of L&T
advertising agency posted a 7, Canara Bank said in a As a result, there may be some delay many critics are not sure) as well as from the cake is in Reliance Retail, which has employment for Indian engi- Technology Services, said the
cartoon featuring its mascot statement. All new retail loans in reaching debt-free status. Those close the remaining portion of the rights issue been valued by varying analysts at neers as they together employ engineering services firm had
‘Amul girl’ with the caption (housing, education, vehicle), to the company said that in the worst (75 per cent, which shareholders have to around ~3.5 trillion. Here, investors can more than 1.1 million people been approached by some
“Exit the Dragon?” on Thursday credit to MSMEs are linked to case scenario, it may reach the cash pay), RIL will be sitting on a large sur- be brought in with fresh issuance of out of the total 4.3 million work- companies to take over their
night. PTI< RLLR. PTI< profit number in March (as was target- plus of cash which can be used during equity just like in JPL to raise funds. ing in the Indian IT industry. captive operations in India.

CV makers expect recovery Sponge iron gains as steel imports fall

from second half of FY21
Domestic sponge
iron industry grew
T E NARASIMHAN
Chennai, 6 June
Even as domestic sales of commercial
vehicles (CV) are headed towards a
decadal low in FY21, industry leaders
are expecting better days in the sec-
ond half of the financial year.
While economic slowdown, dry-
ing up of infrastructure projects and
revised axle norms hit the sector bad-
ly in FY20, the coronavirus pandemic
has worsened the situation.
CV sales had declined 29 per cent
in FY20 and Hetal Gandhi, director,
CRISIL Research, expects them to fall
this year too. “CV sales are expected
to fall 26-28 per cent in fiscal year
2021,” said Gandhi.
In FY20, CV sales were impacted
by the increase in freight capacity
due to the revised axle norms and
limited support from freight demand.
Additionally, transporters shied
away from new purchases because of
the higher down payment demand-
ed, especially by non-bank finance
companies (NBFCs). Also, there was
lower resale value of trucks in the sec-
ond hand market, owing to the NBFC
liquidity crunch, said Gandhi.
This year, fleet utilisation will
take a further hit with declining
freight demand due to the slowdown
in economic growth and private
consumption.
Industry experts said things should
improve from the second half of the
current financial year and the industry
would return to growth in FY22.
Vinod Aggarwal, managing direc-
tor (MD) & chief executive officer
(CEO), Volvo Eicher Commercial
Vehicles, expects demand to pick up
from September or October. He said,
“Only 30-40 per cent of the fleet
capacity is being utilised in the coun-
try today.”
Ashok Leyland MD and CEO
Vipin Sondhi said the government’s
~20 trillion package has the potential
to be “sustainably beneficial” to all
sectors and help revive the commer-
cial vehicle industry.
Analysts at CLSA expect a recov-
ery in both passenger and commer-
cial vehicles in FY22.
According to the foreign broker-
age, the country’s largest truck maker,
Tata Motors, will see a 13 per cent fall
in medium and heavy commercial
vehicles (M&HCVs) sales volumes and
a 15 per cent decline in the case of light
commercial vehicles (LCVs) in FY21.
This will be followed by a 22 per
cent sales growth in M&HCV and a 10
per cent LCV growth in FY22.
Tata Motors declined to comment
on queries from Business Standard.
Sondhi added, “You will find long-
haul heavy-duty trucks definitely
come into play as the economy opens
up. It may take a little longer, but it
will have a huge impact on all the CV
companies. A farmer is allowed to sell
his produce to any part of the country
now. One can imagine how much
harvest is going to be seen across the
country. This will lead to creation of
new demand in addition to existing
ones. It is an opportunity and who-
ever moves to take it – we are deter-
mined to do that – will benefit.”
Rajaram Krishnamurthy, vice-
president, marketing and sales and
customer services, Daimler India
Commercial Vehicles, said, “A boun-
ty harvest will generate better pay-
load from the rural areas.”
7 per cent in FY20
ADITI DIVEKAR
Mumbai, 6 June
The double-digit drop in India’s
steel imports in the financial year
2019-20 (FY20) has augured well
for the domestic sponge iron
industry, which saw a 7 per cent
rise in production.
“Since sponge iron is used as
an alternative to steel scrap in sev-
eral consumption segments, a
drop in scrap imports last year
helped domestic sponge iron
industry benefit,” M Chinnasami,
director at Tamil Nadu-based
sponge unit company Agni Steels,
told Business Standard.
According to Joint Plant
Committee data, steel imports
declined 14 per cent in FY20 to
6.7 million tonnes (mt).
Meanwhile, the domestic sponge
iron industry witnessed a 7 per
cent year-on-year (YoY) growth in
production at 37.14 mt in the peri-
od under review. Scrap steel is
part of overall steel imports.
“Also, due to the economic
slowdown, consumers preferred
to keep costs low and, hence, opt-
ed for sponge iron over scrap last
year,” Chinnasami added.
Imported scrap is usually avail-
SCRAP MARKET
Imported scrap comes ata premium
of ~4,000-5,000 a tonne over
domestically produced sponge iron
 There are close to 950 sponge
iron units across the country of
which about 750 units are
able at a premium of ~4,000-5,000
a tonne over domestically pro-
duced sponge iron. The premium
is mainly because of higher yield
in scrap, which is around 95 per
cent, compared to sponge iron,
which is about 79-82 per cent.
“Steel scrap has better quality
than sponge and, hence, is used in
both long as well as flat steel con-
suming segments,” said an official
with Adhunik Metaliks, speaking
on condition of anonymity.
There are around 950 sponge
iron units across the country of
which about 750 are currently
operational. Sponge iron units are
currently operational
 Avehicle scrap policy to address
the scrap availability is in works
 Domestic vehicle scrap is a better
raw material over sponge iron or
imported scrap
either coal-based or gas-based
and quality is better in the latter.
However, coal-based production
is higher because of better avail-
ability of domestic coal.
While the sustainability of
sponge iron demand remains a
question in FY21 amid the Covid-
19 outbreak and economic slow-
down, industry officials say the
time is right for a vehicle scrap
policy to address availability.
“Since the flow of imported
scrap is weak at present, a vehicle
scrap policy can help domestical-
ly produced scrap make inroads,
helping it develop a market share
in the consumption segment,”
said the Adhunik Metaliks official.
According to Sponge Iron
Manufacturers Association, coal-
based sponge iron production in
FY19 stood at 21.3 mt, up 31 per
cent from last year, while gas-
based units produced 8 mt, up 6
per cent over last year.
“Domestic vehicle scrap would
serve as better raw material than
sponge iron or imported scrap as it
would be good quality auto steel.
Moreover, sponge iron does not
meet BIS (Bureau of Indian
Standards),” said Sushim Banerjee,
director general at Institute of Steel
Development & Growth (INSDAG).
Union Minister Nitin Gadkari
said last month that the govern-
ment would introduce a vehicle
scrappage policy, under which
recycling clusters might be estab-
lished near ports. The policy also
has the potential of creating fresh
demand for the automobile
industry, he had said.
Though a scrappage policy
seems like a solution, an alterna-
tive market for labour intensive
sponge iron industry is also need-
ed as demand for the produce
might drop with the availability
of domestically produced scrap.
“Sponge iron producers could
look at exports to Bangladesh, Sri
Lanka, and Nepal and plug them-
selves to the export market from
the current focus on domestic,”
Banerjee said.

K P Singh, the man who changed the face of India’s real estate
RAMESH MENON
There are few evocative stories in
India’s business world that can match
Kushal Pal Singh sculpting DLF into
one of India’s real estate giants. It is a
story with numerous twists and turns
that almost seem to have been crafted
by a master storyteller.
How else can one see the journey of
someone who was born in a small
room in a village, went to a madrasa
near his home for his initial education,
and then to a middle-class school and
college? No one could have even taken
a wild guess that he would script one
of India’s most colourful business
stories. Much against his wishes, he
was made to enrol in the Indian
Military Academy in Dehradun. He
planned to run away, but stayed after
an officer told him that he would be
obstructive government regulations.
In fact, in January 1975, Singh was
on the verge of selling DLF for ~26
lakh. The cheque was on the table of
his office in the Hindustan Times
building in New Delhi. Before he
signed the papers, Y S Tayal, DLF’s
chief financial advisor, persuaded him
to think it over as that would mean the
end of his family’s association with
DLF. Prem, his sister-in-law, and
Indira, his wife, also cajoled him not to
sell. The rest is history. Today, DLF has
assets of over ~52,237 crore and a net
worth of ~33,576 crore.
After that, he told himself that he
had to revitalise DLF. He started
persuading farmers to sell land in
Gurgaon (now Gurugram), on the
outskirts of the national capital, with
the ambition of building a modern city
full of high-end gated colonies. But,
trying to persuade him to sell his land. carry out construction in Gurgaon. it is in Gurgaon. multinationals and some of India’s top
He offered Rajiv a charpoy under a tree There was no looking back after that. But, it was not easy. Singh still had corporations. Today it has become a
to rest as the engine cooled. Rajiv Singh, however, was careful to ensure to deal with a plethora of laws and showcase for offices and residences in
asked him what he was doing sitting in that farmers selling their land were bureaucratic tangles to obtain India. It is a bustling modern city with
a field beside a well on such a hot day. given a good deal and even helped clearances to acquire over 3,500 acres glistening glass-fronted office
Singh told him that he wanted to build them buy larger pieces of land in areas of raw land on which a large part of complexes, large glitzy malls, and
the most modern city in India. Rajiv like Alwar. He also helped them restart Gurgaon stands today. All this was tastefully built skyscrapers towering
asked him to make a their agriculture business in their acquired without a single case of over the landscape. It has over 500 top
presentation at his New newly settled areas. As he built legislation against DLF. companies employing scores of young
Delhi office. He then goodwill, more and more Singh achieved this by personally professionals. Many were from the IT
convinced his farmers came forward to meeting with villagers who respected sector which needed contemporary,
mother, Indira sell their land. Today, him because of his army background. well-built office spaces. It was a win-
Gandhi, to make the DLF has 153 real estate He would chat with them in their win situation for both DLF and the
necessary legal projects and has houses, breaking bread and explaining corporations.
changes that would developed 330 million why they should sell their land (it was Gurgaon, however, did not turn out
make it easier for square feet. It has a land mostly unproductive as it was rocky the way Singh wanted. The
real estate bank of nearly 13,000 and there was little water for farming). infrastructure developed by the state
entrepreneurs to acres and a large part of It was a good deal for the farmers was sloppy and successive
because they could settle elsewhere governments did not do what it was
and live a better life. He even persuaded required to make it an example of good
some of them to give him back the visionary urban governance.
money he had paid for the land as a As he takes over as chairman
ILLUSTRATION: BINAY SINHA

known as a deserter, and eventually
grew to love the tough life, seeing it as
an adventure.
He quit the Army because he
wanted to become an entrepreneur in
a battery manufacturing business. It
did not do well. He then got into the
family’s real estate business; DLF was
his father-in-law’s fledgling company.
He wanted to shut it down as it was
almost bankrupt because of
there were too many hurdles in the loan. He promised that he would pay emeritus of DLF at the age of 90,
form of government restrictions and them back whenever they wanted. He handing over the reins to his son, Rajiv
red tape. Everyone told him he was kept his word and every month, on a Singh, he may well sit back and hope
wasting his time. designated day, a jeep would go into the that governments will see the logic of
A chance meeting with Rajiv villages disbursing the interest on the why private entrepreneurs should be
Gandhi changed his fortunes. Gandhi loans he had taken from the villagers. given the space and freedom to build a
was driving on the dusty roads of a This built trust, helping him to get more modern India.
village on a sweltering summer land and also gather the capital to start
afternoon when the overheated construction activities. The writer is a co-author of K P Singh’s
engine of his car stalled. Singh was DLF has built numerous high-end autobiography Whatever the Odds: The
conversing with a farmer nearby, properties in Gurgaon attracting Incredible Story Behind DLF.
.
NEW DELHI | 7 JUNE 2020 ECONOMY 3 <
Sunday Business Standard
DELHI EDITION
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A
s small businesses and liabilities.
start-ups line up to reg-
ister as micro, small and
13.6 mn Registered MSMEs No Air Surcharge
medium enterprises (MSMEs), 21,296 Added on Friday
most do not stand to benefit
from the government’s relief 21,457 Added on Saturday     
package, say officials. Source: Udyog Aadhaar Portal
     
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turnover up to ~100 crore. been tagged a non-perform- obligations, a senior MSME the stock markets may not
 7
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mum of 20 per cent of the Under this, the government While more details will of hope, those entities which         
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firm’s outstanding credit as of will disburse ~4,000 crore to soon be made clear, this par- are ambitious enough, and  7
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NEW DELHI | 7 JUNE 2020 1

CYBER SECURITY
BS TUTORIAL

Adopt a two-pronged strategy Jayant Pai

Financial literacy
1. Whose house arrest was recently extended under
the Double Criminality principle?
Adhere to stringent security measures and buy an insurance cover unauthenticated sources. Always look A. Carlos Ghosn
out for https:// to ensure that the web-
B. Meng Wanzhou
T A RAMALINGAM site you are on is a genuine one.
C. Nirav Modi
Maintain strong passwords

W
e live in an era of hyper-
connectivity which
allows us to share infor-
mation across a wide
variety of devices. While offering
many advantages, this state of exis-
tence has its flip side too. Earlier gen-
erations lived in fear of their wallets
being stolen from their pockets. We
live in perpetual fear of our banking
details and other personal data stored
online being stolen, hacked, dam-
aged, or erased.
The biggest nightmare for an indi-
vidual in this digital age is to see an
unauthorised debit in his bank
account and realise he has been a vic-
tim of an online fraud. Digital crimi-
nals are out to rob people via spoof
SMS, phishing links, fake IDs, forged
online identities, and so on. The
armoury of cyber weapons at their
command are many and varied.
In recent years, malware such as
WannaCry and Petya have wreaked
havoc on internet users across the
globe. India has emerged as the third-
most vulnerable country in terms of
exposure to cyber threats, such as
malware, spam, and ransomware,
according to a report by global secu-
rity firm Symantec. It is estimated that
the WannaCry attack alone affected
around 48,000 systems throughout
the country. It served as a major wake
up call to users on the growing risks
posed by cyber threats.
The major worry for everyone
using internet-linked devices today is
whether the latest download on his
smartphone or laptop is a bait from a
digital hacker who is out to secure
access to his hard-earned money.
According to a recent report by the
Internet and Mobile Association of
India (IAMAI), there were 504 million
active internet users in India in
November 2019. This number is
expected to reach 650 million by 2023.
Increased use of technology has
exposed organisations and individ-
ual users to advanced cyber-risks that
they are often poorly prepared to
defend themselves against. Most
banking transactions are conducted
online today. A lot of personal infor-
mation is also available online and on
social media websites which can be
ESSENTIAL POINTS ABOUT CYBER INSURANCE
 Cyberinsurance policiesare
available both as individual and
corporate covers
 When comparing the covers from
different insurers, compare not just
the prices but also look at the list
of inclusions
 These policies can have
sub-limits. A claim for phishing, for
misused by hackers.
Today, cybercriminals are work-
ing overtime to develop, hack and
deliver persistent and new attacks that
target vulnerable systems. If organi-
sations and individuals want to pro-
tect their networks and data from this
onslaught, it is essential that they
begin to firm up more well thought
out security strategies. Apart from
large corporates, even individuals
today face myriad cyber risks such as
loss of funds to online fraud, identity
theft, cyber stalking, phishing, cyber
extortion, and malware attacks.
instance, can be restricted to 10-20
per cent of the total sum insured
 Be aware of the exclusions.
Malware attack can be part of the
main policy in one cover and it can
be an add-on in another
 Some of them also coverexpenses
incurred on counselling to relieve str-
ess. Others may cover legal expenses
Strong cyber security practices at
home and at work have become more
important than ever. As employers
and individuals navigate the rapidly
evolving cyber risk landscape, here
are a few basic guidelines they should
keep in mind.
Deploy security tools
When connecting to or storing sensi-
tive data on personal devices, within
applications, or on your network, it is
important that you have security tools
in place. These tools will be able to
detect and deter malware and cyber
criminals. In case of home networks,
this often means using a firewall and
encryption. Maintain an active and
strong anti-virus in the computer sys-
tem that can detect all kinds of irreg-
ularities. A firewall ensures that mali-
cious traffic from compromised
devices, applications, or websites that
tries to enter your network is detected
and stopped. A lot of people are
unable to resist the lure of using free
public Wi-Fi. As far as possible, doing
so should be avoided as it poses sub-
stantial risk both to your device and to
network security.
Exercise care while browsing
Cyber criminals often try to scam their
way into networks through phishing
attacks or malicious emails that pose
as legitimate communications. To
ensure security, restrain yourself from
clicking on any link or advertisement
from unknown sources. Similarly, do
not click on unknown pop-up win-
dows. Also avoid downloading any
item from an unknown website. Avoid
registering your email ID at unknown
and obscure websites. Do not open
emails that have come to you from
On every platform that you use, keep
a strong password, preferably one that
has an alpha-numeric combination
and contains special characters.
Reusing the same password across
multiple accounts makes you suscep-
tible to account takeover or credential
stuffing attacks. If your password
becomes compromised on one site,
you become vulnerable on all the oth-
er sites where you use the same pass-
word. Do not disclose your passwords
to any other person.
Buy adequate cover
Despite the best preventive measures,
you could still fall prey to hackers who
are turning increasingly sophisticated
with each passing day. Therefore, buy-
ing a cyber-insurance cover has
become a necessity. A comprehensive
cyber insurance cover provides the
buyer protection against a variety of
cyber risks such as identity theft, mal-
ware attack, IT theft loss, cyber extor-
tion, cyber stalking, etc. This policy
covers financial loss resulting from
being the victim of e-mail spoofing
and phishing. Losses and expenses
related to defence and prosecution
cost related to identity theft, IT theft
loss, and restoration cost incurred on
retrieving or reinstalling data or a
computer programme damaged by
the entry of a malware is also covered.
It provides coverage for expenses
incurred on counselling services,
claim for damages against third party
for privacy breach and data breach,
and transportation for attending
Court summons.
As we move into a digital econo-
my, where data and connectivity are
highly valuable resources, ensuring
cyber security by conscientiously fol-
lowing security guidelines has
become imperative. In addition, pur-
chasing a comprehensive cyber insur-
ance cover will also help mitigate the
growing risk of cyber compromise. It
will ensure that you are financially
well protected against cyber-attacks
and can browse, surf, and transact on
the internet without undue stress.
The writer is chief technical officer, Bajaj
Allianz General Insurance
D. Jenny Qian
2. Which of these is not engaged in developing a drug
against the coronavirus?
A. British American Tobacco
B. Fujifilm
C. Philip Morris
D. Maruti Suzuki
3. Which corporate behemoth is not associated with
Haven?
A. J P Morgan Chase
B. Berkshire Hathaway
C. IBM
D. Amazon
4. According to some historians, the PulitzerPrize
winning article, The1619 Project, erroneously
conflates _____ with capitalism.
A. Slavery
B. Property rights
C. Women’s suffrage
D. Nationalism
accused it of quoting facts out of context.
economy in the South. Some historians have
it (among other things) propelled the plantation
examining the legacy of slavery in the US and how
York Times Magazine in 2019 with the goal of re-
4. A. It is an ongoing project developed by The New
costs for consumers.
3. C. It is a venture aimed at reducing healthcare
ventilators.
2. D.Maruti was involved in manufacturing
case, Canada).
considered criminal in the current country (in this
another country for behaviour that wouldn’t be
cannot be extradited to face punishment in
leaving Canada. The principle states that one
1. B. Meng, a Huawei executive, was prevented from
Solutions:
The quiz master is a certified financial planner and head-products,
PPFAS Mutual Fund.
Send your queries and feedback at yourmoney@bsmail.in

ECONOMY
>
1 > FROM PAGE 1
Vedanta takes million (over ~240 crore) in total available
liquidity and its current monthly run-rate
versations that Peter O’Brien, Asia-
Pacific managing director at Russell
~17,000-crore
PEOPLE IN THE NEWS BINAY SINHA
Road maintenance coronavirus hit
operating fixed cost was approximately
$1.2 million (over ~8 crore).
Yatra provides services such as domes-
Reynolds Associates, is having. The
Sydney-based headhunter says inquiries
have been rising over the past month

work stays on track The company’s bottom line, on the other

hand, did get some cushioning as benefit
of net deferred tax of ~3,186 crore lent
tic and international air ticketing, hotel
bookings, homestays, holiday packages,
bus ticketing, rail ticketing, activities and
from Australians considering returning
from Hong Kong, the UK, and the United
States. “There’s more anxiousness and

despite lockdown some support, bringing the net loss to

~12,521 crore in the quarter goneby.
Vedanta had reported a net profit of ~2,236
ancillary services.

Following in the footsteps of American
peer Facebook to secure a slice of India’s
telecom market, Jeff Bezos-led Amazon
may buy a 5% stake in Sunil Mittal-led
Bharti Airtel for at least $2 bn
Dealing a blow to the government’s airport
privatisation plan, the Gautam Adani-
controlled Adani group has expressed its
inability to take over the three airports it
had won after aggressive bidding last year
MEGHA MANCHANDA
New Delhi, 4 June
The road construction space
has a reason to cheer, with
the maintenance of high-
ways remaining largely unaf-
fected by the lockdown. In
some stretches, the lack of
traffic or low traffic volume
made maintenance easier.
Companies were able to
undertake road maintenance
works in May, after some
relaxations granted the gov-
ernment. However, the enti-
ties will only be able to start
construction activity after
the monsoon.
“As far as pre-monsoon
work is concerned, we were
able to accomplish some
maintenance-related activity
in May. Full-blown construc-
tion will begin only after the
monsoon,” Jayant Mhaiskar,
chairman and managing
director of MEP Infrastructure,
told Business Standard.
Experts said the first quar-
ter of the financial year is usu-
ally the peak time for con-
struction activity, and the
same was hit by the lockdown.
However, they also said that
maintenance activity was not
too much of a concern.
“Taking cognizance of
this, the government has
extended the contract period
by up to six months. Things
should revert to normalcy
after the monsoon, i.e. from
the third quarter onwards.
States that are not much
exposed to the monsoon
could see normalcy resume
by the end of the second
quarter,” said Jagannarayan
Padmanabhan, director and
practice leader (transport
and logistics), CRISIL
Infrastructure Advisory.
Maintenance activity will
be less impacted than core
construction, but the monsoon
period has always been lean
even for maintenance, he said.
Last week, the National
Highways Authority of India
(NHAI) directed its regional
officers and project directors
to prioritise maintenance of
national highways, keeping
in mind the upcoming mon-
soon season.
The aim is to facilitate
timely action and keep high-
way stretches traffic-worthy,
ahead of the monsoon, i.e.
latest by June 30, the min-
istry had said.
The NHAI has also asked
regional offices to ensure
thorough planning of the
requisite activities, and time-
ly implementation.
Regional Officers have
been delegated sufficient
financial power to take quick
decisions regarding mainte-
nance. Project directors have
been advised to make assess-
ment of the condition of
highways, supported by
technology-driven tools.
Field officers have been
directed to adhere to time-
lines, regularly monitor
progress of maintenance
work, and to keep reporting
the same to the authority, at
regular intervals.
The NHAI headquarters
will be monitoring the
progress closely, through its
project management software
— Data Lake — where pic-
tures of pre- and post- repair
works will be uploaded.
crore in the same period last year.
The normalised effective tax rate
(ETR) for FY20 stood at 34 per cent com-
pared to 28 per cent in FY19 due to a
change in profit mix amongst businesses.
In the period under review, the com-
pany’s earnings before interest, taxes,
depreciation and amortisation (Ebita)
stood at ~4,844 crore, down 23 per cent
from the same period last year, while
Ebitda margin contracted to 28 per cent
from 31 per cent in the corresponding
period last year.
As on March 31, 2020, Vedanta's gross
debt stood at ~59,187 crore, down by ~7,038
crore from the same period last year. On
May 12, 2020, the promoter Anil Agarwal
group expressed its intention to voluntar-
ily delist the equity shares in accordance
with delisting regulations and highlighted
an indicative offer price of ~87.5 per share.
In the following week, the board of direc-
tors of company approved the proposal.
Yatra terminates
~2,300-cr merger
pact with US’ Ebix
“Pursuant to the fourth extension agree-
ment, the outside date has been further
extended to June 4, 2020, in order to pro-
vide the parties with time to determine
whether they can reach mutual agree-
ment on an amendment of certain terms
of the merger agreement,” Ebix added.
After the transaction, Yatra was to
become part of Ebix's travel portfolio,
EbixCash.
In its annual report filed to the US
exchanges in March, Ebix had said diffi-
culties in attracting, motivating, and
retaining executives and key employees
were a risk to the merger, as was expo-
sure to risky Indian travel businesses such
as the closure of Jet Airways.
Ebix did not respond to the develop-
ment immediately.
Yatra in a second statement said it had
implemented several cost reduction meas-
ures since April 2020 to improve prof-
itability and efficiency. These include
reducing management salaries by 50 per
cent and variable reduction in salaries of
25-75 per cent across the board for the near
term, freezing salary hikes, renegotiating
supplier payment terms and conditions
and fixed costs like rent, as well as defer-
ring non-critical capital expenditures.
As of June 4, the company had $32.5
Need to reimagine
schools: Nilekani
Noting that the pandemic was a crisis that
had affected everybody, he said it was an
unprecedented disruption and “we have
to now strive for education excellence in
a seismic era".
Nilekani said our traditional reflexes to
a disaster were now paralysed and the
domino effect of the pandemic would be
felt for years. "Unlike other disasters
which have a certain time frame, like you
can fix cyclone impact, fix tsunami
impact...but here we do not know that
how long will this go on and we must be
prepared that we will have to coexist with
this for many years. This is not a bad
dream from which we will wake up in a
few days, this is a new reality," he said.
Revisiting the basics, decoupling school-
ing from schools, ensuring trust of students
and parents with alternative teaching meth-
ods, and ensuring all learners have access to
learning were among the focus areas out-
lined by Nilekani for schools.
“How do we ensure that there is no
physical interaction but still trust is main-
tained between teachers and students or
parents? We need to develop the ability to
deal with different children with different
speeds, mentoring them while maintain-
ing the quality of learning and teaching
and how to ensure there is inclusivity.
"We need to be able to virtualise space
so that schooling can be done from any-
where. Schooling beyond school, learning
beyond classroom and playing beyond
playground should be our motive when
we look forward to synchronizing teach-
ing learning experience ...it should no
longer be about proximity," he said.
Universities and schools across the
country have been closed since March 16,
when the Centre announced a country-
wide classroom shutdown as part of a slew
of measures to contain the Covid-19 out-
break. A 21-day nationwide lockdown was
announced on March 24, which came into
effect the next day. While the government
has announced easing of certain restric-
tions, schools and colleges continue to
remain closed.
Under Covid shadow,
the expat life is
struggling to survive
Safety is coming through in a lot of con-
more nervousness in the voices of those
reaching out to us than I’ve experienced
before,” he says. “The whole issue is
around safety. Where people see stabili-
ty is where they want to be based.”
That's true now more than ever for
Hong Kong. Even before the novel coro-
navirus hit, the Asian financial center
had been rocked for months by often
violent street clashes. Now fresh protests
have erupted following China's move to
crack down on dissent in the city.
When the pro-democracy protests
first started last year, Karen Tang, who
works in communications, began to
worry about the economy and her job
security. Covid 19 tipped the scales, and
she's decided it's time to move back to
London, where she was born. “When a
global crisis happens, it makes you
think more about family,” the 33-year-
old says. “It makes you reevaluate your
priorities in life and what you really
want out of it.”
For international corporations, mov-
ing talent around the globe to transfer
knowledge and experience will always
exist to some degree. "Companies will
continue to send what we refer to as
critical senior-level staff, essentially
people in leadership positions," Quane
says. "Sometimes companies need
somebody they can trust in the host
country who has a level of communi-
cation with senior management and
senior leaders back in HQ."
Even so, the steady trickle of expats
leaving as Covid 19 grinds on is notice-
able to real estate agents in countries to
which employees are interested in
returning. Knight Frank's head of resi-
dential property in Australia, Shayne
Harris, says that even if expats don't
want to come back right away, they're
showing more interest in acquiring a
future residence back home. For one A$9
million ($6.2 million) home on his books
in Lindfield, a leafy upper-class suburb
in Sydney, about 25% of the buyers
expressing interest were expats based in
Singapore or Hong Kong, he says.
For Martin, home with her parents
in sunny Brisbane while she awaits the
container carrying the contents of her
apartment from Singapore, life is sweet.
"We're still in a state of flux, because
we'll eventually move down to
Melbourne. But we're not stuck in an
apartment, we have a garden, Mum is
helping," she says. "Being an expat for a
long time, you forget about the little
day-to-day things: having a chat at the
local coffee shop, the amount of space,
the fresh air. I feel very lucky."
.
NEW DELHI | 7 JUNE 2020 ECONOMY & PUBLIC AFFAIRS 5 <

Bank credit growth Experts question provisions of

halves to 6.5% in three Ordinances on agri reforms
SANJEEB MUKHERJEE mentioned clause but what
New Delhi, 6 June happens if a farmer-producer

fortnight to May 22
A day after the Centre prom-
ulgated three ordinances to
free up inter-state trade in
agricultural commodities,
provide a regulatory frame-
Banks had surplus liquidity of ~4.5 trn in the period work for contract farming,
and amend the Essential
TAKING A PLUNGE Commodities (EC) Act,
experts have questioned some
Trend of YoY deposit and credit growth (%)
key provisions of the Acts.
 Credit  Deposit growth
However, the Centre’s move
11.7 10.6 has largely been welcomed.
10.1 10.1 10.0
8.9 Amendment to Essential
Commodities Act
7.9
7.4 One big point of discord that
6.3 relates to the amendments to
6.1
the Essential Commodities
Act is the provision to invoke
its controlling powers on
exempted food items.
That is when there is a 100
per cent increase in retail price
of horticulture produce or 50
per cent increase in retail price
June ‘19 Sep ‘19 Dec ‘19 Mar ‘20 May ’20 of non-perishable items as
Source: CARE Ratings compared to the previous 12
months or last five years aver-
ABHIJIT LELE unlocking phase, they said. on deposits. age, whichever is lower.
Mumbai, 6 June Also, the first quarter of the State Bank of India (SBI) Experts said this provision
financial year is usually lean as reduced the fixed deposit (FD) would restrict big-ticket
organisation (FPO) decides to
store potatoes that it bought
from farmers. Will It be sub-
jected to the same provisions,
like the case of big traders?
Sukhpal Singh, chairper-
son of the Centre for
Management in Agriculture
at IIM-Ahmedabad, said sug-
ar has been kept out of the
provisions of the exempted
foodstuff, which means the
government will continue to
exercise control over it.
Kiran Vissa, co-convener
of National Alliance for
Sustainable Agriculture, said
that amendments to the EC
Act have nothing to do with
farmers’ welfare but instead
meant to please big players
and agriculture companies.
This is because small and
marginal farmers don’t have
the storage capacity to attract states, what happens to taxes which is wrong. ten contracts mandatory,”
provisions of the EC Act. other than mandi tax and cess The Act says that a trader said Singh.
However, NITI Aayog mem- that is levied. Though GST has to necessarily make pay- He said fixing a guaran-
ber Ramesh Chand said in the will have taken care of a lot of ment to the farmer in such teed price for the produce as
definition of ‘value-chain par- these issues, but some clarity out-of-mandi transactions mentioned in the Ordinance
ticipant’ that includes anyone could have been better,” said within three days of delivery goes against the very grain of
involved in processing, pack- Mahendra Dev, director of of goods. a contract.
aging, storage, transportation Indira Gandhi Institute of “The dispute resolution “That apart, in one of the

B
anking system credit
growth halved to 6.5
per cent in the fort-
night ended May 22, reflect-
ing the impact of a nation-
wide lockdown imposed at
the end of March. The drop
was year-on-year.
The banking system had an
outstanding credit of ~102.2 tril-
lion as of May 22, according to
the Reserve Bank of India data.
Credit grew at a similar pace
— 6.5 per cent — in the previous
fortnight, while it had expand-
ed 12.7 per cent a year ago (as of
May 24, 2019), according to rat-
ing agency CARE Ratings.
Senior bankers said severe
demand destruction during the
lockdown was one of the reasons
behind the fall in credit growth.
The use of sanctioned credit
would see a gradual rise as busi-
nesses begin activities during the
units and service sector enter-
prises finalise accounts for the
year gone by.
The deposit accretion activ-
ity has remained steady in the
current financial year com-
pared to the same period last
year. Deposits grew 10.6 per cent
(as of May 22, 2020) over the pre-
vious fortnight, and improved
marginally on a YoY basis (10.1
per cent as of May 24, 2020).
The coronavirus-induced
lockdown has destroyed the
demand for money, leading to
banks sitting on surplus liquid-
ity, said a public sector banker.
The customers, too, have
enough cash in their accounts
as there’s no spending.
During the week ended May
22, the banking system had sur-
plus liquidity of over ~4.5 tril-
lion, said CARE Ratings, leading
to banks slashing interest rate
rates to 4.4 per cent from 4.8
per cent earlier on deposits with
tenures between 180 days and
210 days. The rate for FDs
maturing between five years
and 10 years was cut to 5.4 per
cent from 5.7 per cent.
Liquidity in the banking
system is expected to remain
surplus, with the growth in
bank deposits expected to be
higher than the growth in the
bank credit offtake. In the pre-
vious financial year, the pace
of bank credit growth had fall-
en sharply to 6.1 per cent, from
13.3 per cent in FY19.
Deposit accretion activity
had moderated in FY20 to 7.9 per
cent, from 10 per cent in FY19,
according to the RBI data. While
banks faced the slowdown
impact throughout the year, the
Covid-19 blow came in the final
month of the financial year.
investments in the sector.
Cereals, pulses, edible oils,
onions and potatoes have
been pushed out of the EC
Act and its provisions will
apply only if the conditions
of 100 per cent increase men-
tioned above sets in.
“So now, onions are selling
at ~15 a kilogram. If suppose,
the prices move to almost ~40
a kilogram in the next 3-4
months, will the government
impose stock limits? This is
undoing the reform measures
and will create uncertainty in
the minds of people who wish
to set up big storage facilities,”
said Ashok Gulati, Infosys
Chair Professor for
Agriculture at ICRIER.
Gulati said though the
government has exempted
‘value-chain participants’
from provisions of the above
and distribution, adequate lee-
way has been given.
Such persons can store the
exempted goods up to their
installed storage or produc-
tion capacity without attract-
ing stock limits.
Free inter-state trade
Experts said there is a lot of
confusion over some of the
definitions which, unless
fixed, could lead to major
implementation challenges.
In addition, the provision
to refer all disputes in such
forms of trade to the sub-divi-
sional magistrate or the con-
ciliation board appointed by
him gives a lot of powers to
the officer.
“Another point which I
found missing is taxes on
inter-state trade. Now, if a
trader buys goods from other
Development Research.
Dev said the role of FPOs
will also become crucial in
the inter-state Act.
Singh said that in the def-
initions, FPOs have been
recognised as farmers. That
is wrong, as they do not sell
any produce but aggregate
and purchase.
He said FPOs are not men-
tioned in the definition of
persons who can do trade
which is wrong, according to
him. He said, as per the
Ordinance, anybody who is
buying from one or more per-
sons is defined as a trader,
such a person is not a trader
but a commission agent.
He said the Act lays down
separate methods of payment
other than the one men-
tioned for traders, if any FPO
or cooperative society buys,
mechanism to me looks high-
ly complicated,” said Singh.
However, Chand said that
just to believe that all out-of-
mandi trading will land up in
dispute is false.
“In India, almost 7 crore
farmers sell milk daily to vari-
ous agencies for the last several
years and there hasn’t been any
big dispute so far. And here, we
are talking of agriculture crops,
which are sold maximum 3-4
times in a year. How many of
them will lead to a dispute is a
big question,” Chand added.
Contract farming
Sukhpal Singh says that the
Act does not make it manda-
tory for anyone to enter into
written agreements between
the buyers and seller. “So,
when you are having a law
why haven’t you made writ-
provisions, the law says that
bonus price will be deter-
mined on the basis of APMC
rates. So, when the govern-
ment believes that an APMC
does not allow proper price
discovery, why is it fixing it
to bonus rate?” asked Singh.
Vissa said his experience
shows that most seed compa-
nies in Andhra Pradesh and
Telangana do not enter into
any written contracts with
farmers. This keeps them at a
disadvantageous position as
compared to companies.
However, Chand added that
a lot of problems and details in
the pacts between farmers and
buyers will be ironed out in the
agreement formats that will
soon be circulated to states.
They include issues on area,
acreage and place of delivery,
among others.

www.QuoteUnQuote.in

Virtual Fireside Chat Series

FUTURE OF CAPITAL AND CAPITAL MARKETS
DR. JAGDISH SHETH KAPIL KHANDELWAL
Charles H. Kellstadt Professor of
Business at Emory University
In conversation with Director , EquNev Capital, Managing
Partner Toro Finserve LLP
and Padma Bhushan 2020

PREAMBLE
Covidandespeciallylockdownprocedures
bought down world economy on a fast el-
evator of the Empire State Building or the
Burg Khalifa. Quick recovery like V re-
shapedisnotgoingtohappen.GDPgrowth
willbeU-shaped.CountrieslikeChina,Ko-
rea, Japanwhichhad 3-months head start
to open up economy will recover ahead of
India.Stock markets in US is anticipating
the good things happening, unless event
like the street demonstrations don’t hap-
pen. In the short run, India will see short-
age here and surplus there. Any activity
where the consumer has to come to you
and you cannot go to the consumer will
haveatoughertimerecoveringbackagain
because the new normal from safety view-
point, social distancing.Companies which
can go to the customer will grow faster
which is why you have seen enormous
growth of ecommerce companies. Sec-
torssuchasdigitalentertainmentpharma,
healthcare, high-end manufacturing, ed-
ucation, professional services like ac-
counting, legal, R&D outsourcing lever-
aging India’svastresources andscaleand
size will be the sectors of the future.
In my 2-3 years horizon, I expect India
to go back to 7-8% GDP growth and much
greateronthePPPbasedgrowth.Derisking
from China as is evident in the PPE, phar-
ma textiles are being sourced from India.
Due to US tariffs on porcelain and quartz,
India is exporting more to the US now.To
compete, India has to improve the quality
and infrastructure As a result several ex-
port sectors will which will drive the growth
than domestic sector.Pent up demand will
release for discretionary spend once the
lock down is opened up. Due to mobile
phones, consumer markers will shift from
physical shopping to organised online re-
tail.The three main platforms will be Ama-
zon, Walmart-Flipkart and Reliance Jio.
WithFacebookfunding,Jiowillcreatemar-
ket exchanges which will create opportu-
nities for hundreds and thousands of sup-
pliers. Airtel will also have to follow suit.
There will be a majorshift frombrick n mor-
tar to online first and brick n mortar sec-
ond.Secondandthirdtiercitieswhichhave
higher levels of domestic savings will drive
consumption, investment and growth
FUTURE OF CAPITAL AND
CAPITAL MARKETS
Moody’s Rating
Downgrade of India
2008-09 financial crisis had to do with cap-
ital.USbankswereoverleveraged1:50ra-
tio and were allowed universal banking.
They could sell insurance, real estate and
it collapsed due to the hosing platform.
Covid-19 is all about employment. Com-
panieswillbemeasuredbyhowmanypeo-
ple are back in the job or new jobs created.
We are watching employment numbers
than banking numbers.So many of the rat-
ingagencieswillhavetochangetheirviews
basedontraditionalindustrialmodels.Since
2008-09 all econometricmodelsbased on
business cycles are debunked by Covid.
Today top-10 companies in S&P are non-
industrial-FANG stocks. Rating agencies
need to create appropriate measures for
risk of nations for the future.
PSU BANKS FINANCIAL
VIABILITY
There are too many banks in India. India
has the scale but not the size. Consolida-
tion of PSU banks to achieve scale to cre-
ate one or two mega banks. Only banks
with strong cash reserves should will sur-
vivetheCovid.FDIcancomeintothegroup
holding of Banks by Government likeTata
Sons which is a holding company and not
traded. Government can dilute the equity
to investors (not stock market investors) to
recapitalisethebanks.5oftopbanksinthe
world are Chinese.Don’t look at Western
Worldforbankingbusinessmodels.Iwould
look at HSBC in terms of how they organ-
izethemselves.ThelastentityIwouldwatch
is $3 trillion Post Office Savings which has
become a bank under Ministry of Finance
inJapan.Traditionalmodelsofbankingand
finance may not be the future.
NEW CAPITAL SOURCES
FOR THE NEW NORMAL
Largest capital waiting to be invested is
the personal wealth.There are 2000 bil-
lionaires and 50 million millionaires with
a total net worth of $160 trillion.These in-
dividuals will come without anyone like
Blackrock or
CAPITAL IS Blackstone in the
WAITING FOR middle like wealth
managers.Watch
INDIA.THEY Jeff Bezos, Mark
REALLYWANT
Zukerberg, Bill
SIGNALS Gates – their per-
sonal wealth
FROM INDIA There is a
WHAT ITS RE- growth of wealth
ALLYWANTS since oil crisis of
TO DO! 1974 of oil
economiesthatin-
vested abroad.
Norway a small country has $1.2 trillion
of assets invested.They do not come in-
to traditional equity or debt markets.They
want to come into the holding company
architecture.So our banks need to reor-
ganize so that with their investments a
Mega Bank from India should rank into
top 3-4 banks in the world.
Foundationshavebecomemegafoun-
dations such as Bill Gates, Rockefeller
whicharecallingtheshots.Theyaretelling
BlackrocktoinvestintoESGfunds.These
funds have done better than stock mar-
kets because you are serving the socie-
ty and still making money.These founda-
tion assets are growing faster than the
economy. University foundations are al-
so waiting to invest into non-traditional
equity portfolio thinking.
PORTFOLIO THINKING IS
NOT THE NEW NORMAl
Portfolio thinking has become obsolete.
Sharpe Ratio is to be redefined for risk
free returns which are anchored to the
US treasury bonds.With change in the
currency baskets, we may go back to
fixed exchange models because it has
become too speculative driven by traders.
Things will change dramatically.
SHANGHAI VERSUS
MUMBAI AS GLOBAL
FINANCIAL CAPITAL
Hong Kong will not be allowed as major fi-
nancial capital for investing by foreigners.
It will be Shanghai.That architecture was
putin1997whenHongKongwasannexed
to China. It is a foregone conclusion that
Shanghai will become a global financial
capital. ForMumbaitoemerge,ithastoset
up highly secure and robust IT infrastruc-
ture.Chineseunderstoodthepoweroftech-
nology well ahead.India also has to allow
foreign companies to list on their bourses
like Singapore to race ahead in the region.
THREAT OF CHINA IN
GLOBAL GEO POLITICAL
REALIGNMENT
WeareveyfortunatethatGoddessLaksh-
mi is blessing us.There is a new reorgani-
zation of the global economy. 15 nations
control 75% of the world’s GDP.They trad-
ed55%amongstthemselvesand45%was
importedlikecoal,agriproduce,etc.Anew
triad power India-China-US is emerging.
Economies are driven by consumer mar-
kets and not by Government or defense
markets.China and India are now middle-
income countries due to their buying pow-
er. China and US are in the middle of ma-
jorColdWar2.0whichisbasedonnewtech-
nologyweaponslikeStarWars-theweapons
of future.India is in a strategic position and
dilemma.ShoulditalignwithUSorChina?
Same decisions India went through in the
fifties. Due to non-alignment movement
which set us back in manufacturing.There
would have been no Japan or China if we
had become the manufacturing capital for
thewesternworldinthefifties.Indiaisinthe
same dilemma.2020s decade will decide
howthetriadpowerwillwork.WillIndiaalign
with US? Then India will have to distance
fromChinamilitarily,economicallyandpo-
litically.Thisoverarchingphenomenonwill
decidewhethercapitalwillflowtoIndiafrom
western world.Capital is waiting for India.I
thinkwehavenotmarketedwelltotheworld.
Indian diaspora is very important for us to
leverage for this.
ATMA NIRBHAR
VERSUS OWNERSHIP
Atma Nirbhar does not mean ownership
andisnotthedomainofIndiancapitalism.
Thisisthebiggestmistakewemadeinthe
past.Why are we hung us with old colo-
nial mindset that people who have colo-
nial powers should not be allowed to in-
vest into India and own up Indian compa-
nies. Top British FTSE 100 has compa-
nies not owned by British but by Indians.
Many MNCs have a global architecture
and quality.We have to leverage that and
create world-class brands from India like
the Japanese did.We should not object
ENTREPRENEURSHIP DNA IS SO
UNIVERSAL IN INDIA. IT HAS NO
CAST, RELIGION, LANGUAGE, IN-
COME OR EDUCATION STATUS
foreignownershipsolongastheydotake
money out of India.Allow foreign listing in
the Indian bourses like Singapore so that
investmentcomesintoIndia.LGandSam-
sung did in Korea.So Atma Nirbhar does
not mean owning ourselves. Ownership
and management can be separated.We
must encourage FDI in manufacturing,
services, defense.
Indiastillhasoldmanufacturingandold
warehouses. It has to go from low tech to
high tech from very dumb real estate to
smartrealestate.IOT,AIand cloud-based
software should drive infrastructure.India
has to upgrade fast. Chinese and US re-
tailers like Amazon,Walmart, Ali Baba will
cone to India not for Indian market but for
creating a supplier hub.They will put glob-
alqualitystandards.Theseretailerswillcall
the shots in upgrading the capabilities.Ali
Baba may invest in India to match the in-
cumbents like Amazon, Walmart and Re-
lianceforglobalsourcing.Wecanleverage
theseintohighqualitymomandpopshops.
Wearedoingthatindiamondcutting,phar-
ma, film production which are world class.
Wehaveallthecapabilities.Whatwedon’t
have is the finish or packaging.

-ADVERTORIAL
6 WORLD
>
NEW DELHI | 7 JUNE 2020 1

US officials block police ‘extreme HSBC’s political

tactics’ as protests enter 12th day
LISA LAMBERT & ALEXANDRA ALPER
Washington, 6 June
tightrope act opens up
White House. The night-time
internal fault lines
protests were largely peaceful BLOOMBERG
but tension remains high even 6 June

P
rotesters were expected as authorities in several places
to gather in Washington take steps to reform police pro- HSBC’s endorsement of a pro-
for a huge demonstration cedures. posed Chinese security law in
on Saturday, its police chief A federal judge in Denver Hong Kong has begun to widen
said, as U.S. street marches over ordered city police to stop using fault lines over the British insti-
the killing of a black man in cus- tear gas, plastic bullets and oth- tution’s relationship to the
tody enter a 12th day and er “less-than-lethal” devices city’s masters in Beijing.
authorities move to rein in such as flash grenades, with his The bank’s statement on
policing tactics. ruling citing examples of pro- the eve of the June 4 anniver-
George Floyd, 46, died on testers and journalists being sary of the 1989 crackdown in
May 25 in Minneapolis after a injured by police. Tiananmen Square of a loom-
police officer pinned him to the “These are peaceful demon- ing security law heightened
ground with a knee to the neck strators, journalists, and medics worries among both executives
for nearly nine minutes. The who have been targeted with and rank-and-file over staff
killing has sparked days of extreme tactics meant to sup- conflict, as well as potential
protests across the United press riots, not to suppress blowback on the streets of
States against racism and police demonstrations,” U.S. District Hong Kong.
brutality, and also demonstra- Judge R. Brooke Jackson wrote It’s an ever more precarious
tions around the world. in the ruling. balancing act for Chairman tycoons such as Li Ka-shing ple, that the firm caved to the
Some activists on social In Minneapolis, Democratic Mark Tucker, who needs to and Michael Kadoorie have political pressure, according to
media have called city leaders vot- avoid drawing the ire of clients, come out in support of employees interviewed by
for a million people Black Lives Matter ed to end the use employees, investors and policy China’s proposal in recent Bloomberg News, who asked
to attend a protest activists have called of knee restraints makers while maintaining weeks even as a poll showed not to be named discussing a
in the capital. for cities to defund and choke-holds, access to the world’s second- broad public opposition. sensitive subject.
“We have a lot police departments. where pressure is Thousands of demonstrators at the Jackson Square in New Orleans on Friday REUTERS largest economy. The lender, In Hong Kong, where
of public, open Los Angeles Mayor applied to the born in the 19th century as the employees have focused on ‘Politicised’
source information Eric Garcetti said he neck, while Calif- police departments. Los Hongkong and Shanghai steering the lender through an The situation is getting increas-
to suggest that the would seek some
event on this $150 million in cuts
ornia Governor
Gavin Newsom
Angeles Mayor Eric Garcetti, a
Democrat who in April pro-
‘Stand up to Trump!’: Protesters Banking Corp., makes 40% of
its revenue in Hong Kong and
economic upheaval ingly politicised,
after the outbreak British lawmakers with the bank
upcoming to the Los Angeles said he would posed increasing law enforce- to Trudeau who kneels at rally mainland China, exposing it of the coronavirus, slammed the being attacked
Saturday may be Police Department end state police ment funding, this week like few other western compa- the bank was put on bank, calling its from all sides, said
one of the largest training of reversed course and said he Canadian protesters chanted in other Canadian cities on nies to a standoff between the spot by the decision to back a Hong Kong-
we’ve ever had in the city,” carotid restraints similar to the would seek some $150 million “Stand up to Trump!” to Prime Friday, including Toronto, Beijing and Washington. city’s former leader, Beijing cynical. In based employee
Washington DC Police Chief technique used on Floyd. in cuts to the Los Angeles Police Minister Justin Trudeau as he where hundreds walked The fallout underscores the Leung Chun-ying, contrast, official surnamed Wong,
Peter Newsham told local In New York, Governor Department. joined thousands at an anti- downtown in protests unrelenting pressure from both who is also vice Chinese media who has been at
media, adding that much of the Andrew Cuomo said his state In another sign of how atti- racism rally on Friday and took sparked by the death of sides of the political divide. chairman of the warned that HSBC the firm for more
city centre would be closed to should lead the way in passing tudes have changed, National a knee alongside protesters. George Floyd, an unarmed British lawmakers slammed the Chinese People’s needs to toe the than five years.
traffic from early in the day. “Say Their Name” reforms, Football League (NFL) Trudeau, wearing a black black man, while in police bank, calling its decision to back Political line to keep its More questions are
Newsham did not give a including making police disci- Commissioner Roger Goodell mask and surrounded by custody in Minnesota. Beijing short-sighted and cyni- Consultative business on track being asked by
crowd estimate. Local media plinary records publicly avail- said the league had made mis- bodyguards, made a surprise Trudeau three times took a cal. In contrast, official Chinese Conference, the mainland Chinese
has predicted tens of thousands able as well as banning choke- takes in not listening to play- appearance at the “No justice knee alongside other media warned that London- nation’s top political-advisory clients about personal political
of attendees. holds. “Mr Floyd’s murder was ers, in a video denouncing = No peace” rally in front of protesters, a gesture used to based HSBC needs to toe the body, a post that qualifies him positions, Wong said.
North Carolina Governor the breaking point,” Cuomo, a racism in the United States. Parliament. His appearance protest against police brutality line to keep its business on as a state leader. He blasted it The decision to publicly
Roy Cooper has ordered that all Democrat, said. “People are say- The NFL has been locked in came a day after police shot and the treatment of African- track. “We still need to watch for not publicly supporting state HSBC’s stance was taken
flags at state facilities be low- ing enough is enough.” a debate with players over and killed an indigenous Americans by police. HSBC’s moves in the future,” China’s plan. by top management on the
ered to half-staff from sunrise to Protesters around the world kneeling protests during the woman during a wellness Afterward, several people according to a commentary in “We respect and support mainland, in response to
sunset on Saturday in honour of are also expected to take to the playing of the national anthem. check in eastern Canada. thanked Trudeau for kneeling. the Global Times, a Communist laws and regulations that will growing pressure after Leung’s
Floyd, who was originally from streets again on Saturday, a day Two police officers in Demonstrations were held REUTERS Party tabloid. “There’s a bottom enable Hong Kong to recover remark and backlash in the
the state’s Fayetteville city. after many marched in a wave Buffalo, New York, were sus- line that HSBC can’t cross, oth- and rebuild the economy and, nation’s official media, accord-
On Friday, marches and of outrage at the death of Floyd pended without pay on erwise the bank could lose the at the same time, maintain the ing to two people familiar with
gatherings took place in and racism against minorities Thursday and placed under cers’ colleagues, with all 57 nesses struggle to recover from China market.” principle of ‘one country, two the matter. HSBC is also still
Atlanta, Los Angeles, in their own nations. investigation after a video members of the police tacti- sweeping lockdowns imposed HSBC wasn’t alone. systems’,” an HSBC spokes- dealing the fallout from coop-
Minneapolis, Miami, New York showed them shoving a 75- cal unit quitting in protest at to stop the spread of the novel Standard Chartered Plc, woman said. erating with a U.S. probe of
and Denver, among other NFL: We were wrong year-old man to the ground. their treatment. coronavirus. Disease experts along with businesses includ- There was disappointment Huawei, making it even more
places, while protesters massed Black Lives Matter activists But the decision was met The demonstrations have have said the protests could ing Jardine Matheson and in the Hong Kong offices, important to stamp out any
again, in the rain, in front of the have called for cities to defund with pushback from the offi- erupted as the public and busi- spark new outbreaks. REUTERS Swire Pacific Ltd. and where it employs 22,000 peo- new controversies.

Biden officially
clinches
Democratic
presidential
nomination
Former US Vice President Joe
Biden secured enough dele-
gates to formally clinch the
Democratic presidential
nomination on Friday, setting
the stage for a challenge to
President Donald Trump in
the November election.
A candidate needs at least
1,991 delegates to secure the
nomination. Biden crossed
the threshold when results
came late on Friday after sev-
en states and the District of
Columbia held presidential
primaries earlier in the week.
The achievement was a
formality after Biden became
the presumptive nominee
when his main rival, Vermont
Senator Bernie Sanders, quit
the race in April.
“It was an honour to com-
pete alongside one of the
most talented groups of can-
didates the Democratic party
has ever fielded — and I am
proud to say that we are going
into this general election a
united party,” Biden said on
Friday.
At one point, the field had
more than 20 candidates,
with contenders dropping out
as their chances faded. Biden
had a slow start and recorded
his first win in South Carolina
at the end of February.
After that, some other can-
didates seen as centrist or
moderate dropped out before
Super Tuesday votes on
March 3, when the highest
number of delegates were up
for grabs and Biden won key
contests.
It then became a two-
horse race with Sanders, who
was seen as a progressive can-
didate challenging incum-
bent Democrats.
REUTERS
Opec, Russia to extend record President Bolsonaro threatens WHO exit
oil cuts to end of July: Draft deal as Covid-19 kills ‘a Brazilian per minute’
AHMAD GHADDAR, RANIA EL GAMAL & ALEX LAWLER
6 June LISANDRA PARAGUASSU & In an editorial running the
RICARDO BRITO length of newspaper Folha de
Opec, Russia and allies were set on Saturday to
extend record oil production cuts through July
Brasilia, 6 June S.Paulo’s front page, the
Brazilian daily highlighted
after crude prices doubled in the past two months President Jair Bolsonaro that just 100 days had passed
on the back of their efforts to withdraw almost threatened on Friday to pull since Bolsonaro described the
10% of global supplies from the market. Brazil out of the World Health virus now “killing a Brazilian
According to a draft declaration seen by Organization after the U.N. per minute” as “a little flu.”
Reuters as a video conference opened, the group agency warned Latin “While you were reading
known as Opec+ was set to demand that coun- American governments about this, another Brazilian died
tries such as Nigeria and Iraq which exceeded the risk of lifting lockdowns from the coronavirus,” the
quotas in May and June compensate with extra before slowing the spread of newspaper said.
cuts in July to September. the novel coronavirus Brazil’s Health Ministry
Opec+ had initially agreed in April that it throughout the region. reported late on Thursday
would cut supply by 9.7 million barrels per day Opec+ was set to demand that countries A new Brazilian record for that confirmed cases in the
(bpd) during May-June to prop up prices that such as Nigeria and Iraq which exceeded daily COVID-19 fatalities country had climbed past
collapsed due to the coronavirus crisis. Those quotas in May and June compensate with pushed the county’s death toll 600,000 and 1,437 deaths had
cuts were due to taper to 7.7 million bpd from July extra cuts in July to September past that of Italy late on With more than 35,000 lives lost, the pandemic has killed more been registered within 24
to December. Thursday, but Bolsonaro con- people in Brazil than anywhere outside of the United States and hours, the third consecutive
Global benchmark Brent crude LCOc1 ministerial monitoring committee, known as the tinues to argue for quickly lift- the United Kingdom REUTERS daily record. Brazil reported
climbed to a three-month high on Friday to above JMMC, would now meet once a month until ing state isolation orders, argu- another 1,005 deaths Friday
$42 a barrel, after diving below $20 in April. Prices December to review the market situation. ing that the economic costs gathering pace in countries pandemic more seriously night, while Mexico reported
still remain a third lower than at the end of 2019. Two Opec sources said the group had already outweigh public health risks. such as Peru, Colombia, Chile than Bolsonaro, some politi- 625 additional deaths.
“Despite the progress achieved to date, we agreed to a one-month extension to cuts that Latin America’s most pop- and Bolivia. cians that backed strict lock- With more than 35,000
cannot afford to rest on our laurels,” Algerian have been made by its members. ulous nations, Brazil and Overall, more than 1.1 downs in March and April lives lost, the pandemic has
Energy Minister Mohamed Arkab, the current Ahead of the talks, Opec sources said Riyadh Mexico, are seeing the highest million Latin Americans are pushing to open killed more people in Brazil
Opec president, said as he opened Saturday’s had been considering an extension to August or rates of new infections, have been infected. While economies back up as than anywhere outside of the
talks. The draft Opec+ declaration said a joint even December. REUTERS though the pandemic is also most leaders have taken the hunger and poverty grow. US and the UK. REUTERS
The debate over Silicon Valley’s embrace of content moderation
NELLIE BOWLES eventually be used against speech individuals and glorify violence.” Section 230 of the federal
6 June loved by the people now calling Ellen Pao, once the head of Communications Decency Act,
for intervention. Reddit, the freewheeling message passed in 1996, shields tech
The existential question that every “It comes from this drive to be board, publicly rebuked her former platforms from being held liable for
big tech platform from Twitter to protected — this belief that it’s a company. She said it was the third-party content that
Google to Facebook has to wrestle platform’s role to protect us from that hypocritical for the Reddit leader circulates on them. But taking a
with is the same: How responsible which may harm or offend us,” said Steve Huffman to signal support for firmer hand to what appears on
should it act for the content that Suzanne Nossel, the head of PEN the Black Lives Matter movement as their platforms could endanger
people post? America, a free-speech advocacy he recently did in a memo, since he that protection, most of all, for
The answer that Silicon Valley has organization. “And if that means had left up the main Trump fan page, political reasons.
come up with for decades is: Less is granting them greater authority, then The_Donald, where inflammatory One of the few things that
more. But now, as protests of police that’s worth it if that means memes often circulate. Democrats and Republicans in
brutality continue across the protecting people,” she added, “You should have shut down Washington agree on is that changes
country, many in the tech industry summarising the argument. “But the_donald instead of amplifying it to Section 230 are on the table. Mr.
are questioning the wisdom of letting people are losing sight of the risk.” and its hate, racism, and violence,” Trump issued an executive order
all flowers bloom online. Civil libertarians caution that Ms. Pao wrote on Twitter. “So much calling for changes to it after Twitter
After years of leaving President adding warning labels or additional of what is happening now lies at your added labels to some of his tweets.
Trump’s tweets alone, Twitter has context to posts raises a range of feet. You don’t get to say BLM when Former Vice President Joseph R.
taken a more aggressive approach in issues — issues that tech companies reddit nurtures and monetises white Biden Jr., the presumptive
recent days, in several cases adding until recently had wanted to avoid. supremacy and hate all day long.” Democratic presidential nominee,
fact checks and marks indicating the New rules often backfire. Fact checks After years of shrugging off concerns that content on social media A hands-off approach by the has also called for changes to Section
president’s tweets were misleading and context, no matter how sober or platforms leads to harassment and violence, many in Silicon Valley appear companies has allowed harassment 230. “You repeal this and then we’re
or glorified violence. Many Facebook accurate they are, can be perceived as willing to accept the risks associated with shutting down bad behaviour and abuse to proliferate online, Lee in a different world,” said Josh
employees want their company to do politically biased. More proactive Bollinger, the president of Columbia Blackman, a constitutional law
the same, though the chief executive, moderation by the platforms could shutting down bad behaviour — Zuckerberg’s decision not to act on University and a First Amendment professor at the South Texas
Mark Zuckerberg, said he was threaten their special protected legal even from world leaders. Mr. Trump’s content. “Fact-checking scholar, said last week. So now the College of Law Houston.
against it. And Snapchat said on status. And intervention goes against “Our intention is to connect the is not censorship. Labelling a call to companies, he said, have to grapple Mr. Blackman said he was
Wednesday that it had stopped the apolitical self-image that some in dots of conflicting statements and violence is not authoritarianism,” with how to moderate content and shocked that so many liberals —
promoting Mr. Trump’s content on the tech world have. show the information in dispute so they wrote, adding: “Facebook isn’t take more responsibility, without especially inside the tech industry —
its main Discover page. But after years of shrugging off people can judge for themselves,” neutral, and it never has been.” losing their legal protections. were applauding Twitter’s decision.
In the midst of this notable shift, concerns that content on social Twitter’s chief executive, Jack Timothy J. Aveni, a Facebook “These platforms have achieved “What happens to your enemies will
some civil libertarians are raising a media platforms leads to Dorsey, wrote. employee, wrote in a separate letter incredible power and influence,” happen to you eventually,” he said. “If
question in an already complicated harassment and violence, many in A group of early Facebook that he was resigning and said: Mr. Bollinger said, adding that you give these entities power to shut
debate: Any move to moderate Silicon Valley appear willing to employees wrote a letter on “Facebook is providing a platform moderation was a necessary people down, it will be you one day.”
content more proactively could accept the risks associated with Wednesday denouncing Mr. that enables politicians to radicalise response. © 2020 The New York Times News Service
.
NEW DELHI | 7 JUNE 2020 IN DEPTH 7 <

Cycling to upward mobility

The world might emerge from the Covid pandemic riding on bicycles, says Jagdish Khattar. India has a chance to lead the pack

M
otorised transport has outpaced bicycles in
more ways than just on the road. Over the
last 20 years, sales of cars and motorcycles
grew by more than 15 per cent a year, while that of
bicycles crawled at 3 per cent.
This forces some 200 million people to settle
for employment within walking distance, ham-
pering their aspirations for growth and income.
But we will come to that in a moment. First, let’s
look at the other contrasts between motorised
transport and bicycles.
In the 1970s and 1980s, the automotive industry
was concentrated in just a few pockets in Mumbai,
Kolkata, and Chennai. Over the next two decades,
it spread out and formed new clusters in
Maharashtra, Tamil Nadu, Gujarat, Haryana,
Andhra Pradesh, and Uttar Pradesh in order to be
closer to markets and suppliers.
The bicycle industry, though, has stayed where
it was — more than 90 per cent of the manufac-
turers and suppliers are in Ludhiana.
The car industry has come a long way since the
duopoly of the Ambassador and Fiat. Two-wheel-
ers have left Bajaj Chetak and Lambretta far behind.
However, the largest selling bicycle model — the
standard black Roadster — has not changed all Bicycle
that much in the last 110 years.
Over the past two decades, there has been a
ownership
huge emphasis on developing the automotive per thousand
sector with schemes and incentives by the central Netherlands
and state governments, as well as an encouraging
ecosystem for international companies to partic-
1,100
ipate in the growth of this sector. There is no Denmark
major international automaker that hasn’t set up 830
shop in India. Germany
No such efforts were made for the bicycle indus-
try, despite its being the primary mode of daily 700
commute for a majority of Indians that belong to Japan
the lower end of the income pyramid. The industry 700
has just four major players, with a few smaller ones
Sweden
joining them in the last 10 years. The industry has-
670
n’t attracted new players despite low barriers to
entry. No international player has come in.
China’s bicycle industry, on the other
hand, zoomed ahead, making 80 mil-
PEDAL POWER Finland
630
Belgium
lion units in 2016, when India made 15
million.
Bicycle share (%) Bicycle price India vs China 500
In the last 10 years, a fourth of the as share of Population England
BYSALES BYTYPE
market in India — 5 million — has gone
to unorganised players who follow no
per capita 1.24 bn 1.34 bn 400
High-
quality norms, run sweatshops with zero end income per Bicycle Austria
compliances, use unregistered labour and Rest of 5 month penetration 9% 37% 400
pay them abysmal wages, and have no the world China
research and development or technology road Low- Bicycle production (units)
map. They continue their set-up in dusty lanes of Germany 23 China
Children value INDIA 15.5 mn 84.5 mn 360
Ludhiana and adjoining areas by assembling parts
sourced from the thousands of component making
micro, small and medium enterprises. With low
capital and operational expenditure, where even
2
Italy 2
Japan 3
52
35 60
(below
~3,000)
49% Export size (of production)
12.5 % 60%
(1 mn units) (57mn units)
France
340
Spain
the assembly of the bicycle is done by the dealer, CHINA 180
Import Size India
these players are able to keep their costs low while
giving healthy margins to dealers.
Another 5 million bicycles are purchased by
state governments for distribution among the
Taiwan 7
India 11 8.3% 1.7 mn units 0 90

needy. While some of these programmes have

demonstrated a visibly beneficial impact, such as
increased school attendance by girls who can now
traverse the distance to their schools in the safety
of groups, the benefit of many other such schemes
is far less visible.
Now, let’s get back to the 200 million people
who have to walk to work. A two-way bus ride or a
shared autorickshaw ride to work can leave a per-
son poorer by ~70-80 every day, which they simply
cannot afford — more so, if their vocation fetches
irregular income from seasonal or project-based
work. As a result, most of them are constrained to
find work within a limited radius, somewhere they
can go on foot. That often means having to settle for
lower wages.
A bicycle, which needs no fuel and little main-
tenance, will empower them. They will be able to
scout for better opportunities and wages, and do
more jobs in a day than they can if they have to
walk. Their household savings will go up, estimates
say by 50 per cent to 100 per cent, and one day, they
can move up to motorised transport.
The reason why these 200 million people can-
not get a bicycle is that they do not have enough dis-
posable income to pay for it in one go. They do not
necessarily want a cheaper bicycle; on the con-
trary, they will be willing to pay more for a more reli-
able and easier ride. The trick is to help them make
the purchase through financing options.
The spread-out loan repayment smoothens out
the difference in price but the quality stays on and
helps the users avoid recurring repair and mainte-
nance expenses, such as punctured tyres, rusty
frames, and broken saddles. Financing, which has
been greatly responsible for the growth of cars and
motorcycles, couldn’t reach bicycles because of its
small ticket sizes. The same processing cost can
facilitate larger loans. A few microfinance compa-
nies do finance bicycles but it will take much more
to reach critical mass.
If the access gap of bicycles can be filled, the
nation can witness the biggest ever upward move-
ment from the bottom of the pyramid.
The need of bicycle for the bottom of the pyra-
mid is only a subset of unlocking its full potential.
The health, fitness, and urban commuter seg-
ments are the fastest growing as pricier bicycles
see an upsurge in sales. A lot of these bicycles
have to be imported, because it is difficult to
localise the technology for alloy frames, suspen-
sion, and gears at a viable cost. India should actu-
ally be exporting these bicycles.
China exports no less than 50 million of these
bicycles every year to Europe, the United States,
and elsewhere. India can easily capture a greater
share of these markets because China is subject to
anti-dumping duty by the EU and the US, and is not
a preferred trade partner. However, no one can
match China’s manufacturing prowess.
The very latest trend shows a huge jump in sales
of bicycles and e-bicycles in Europe and the US
during the Covid-19 pandemic as people look to
avoid mass transport.
India is not homogeneous. It is multiple coun-
tries within one, and very few in the world that
have customers from all segments — from super
premium to no-frills entry-level, and the bicycle
industry must evolve to serve them all, as well as the
world through exports.
That will need enormous institutional sup-
port to the industry akin to the automotive, tex-
tiles, and mobile industries with support pack-
ages. The industry needs technology upgrade, as
well as foreign partners.
The world might emerge from this pandem-
ic riding on bicycles. India has a chance to lead
the pack.
The writer is former managing director of
Maruti Udyog

IMO
up. Yet the opposition must let PM Modi off the
hook, not because he deserves to, but because not
doing so would hurt all of us, collectively.
Myra MacDonald@myraemacdonald
I have been avoiding commenting on the India-
China standoff but my only comment after years of
trying to make sense of this stuff, is that it’s really
hard to know for sure what goes on in these
Vocal for local initiative is not xenophobic
SANJU VERMA
Great leaders are almost always great
simplifiers, who can cut through argu-
ment, debate, and doubt, to offer a solu-
tion everybody can understand—Colin
Powell
per cent, which benefits 36 million ufacturing; allowing private sector in ~6,750 crore by bringing provident fund
employees and 1.28 million employ- commercial coal mining on a revenue rate down from 12 to 10 per cent, efforts
ers, a monthly pension of ~3,000 to sharing basis with no end-use restric- to make India a global maintenance,
small traders and shopkeepers in the tions; 100 per cent FDI via the auto- research and overhaul hub for avia-
unorganised sector, after they attain matic route in defence manufacturing, tion, throwing open six new airports
60 years of age under the PM Shram single-brand retail and real estate via the public-private partnership route
Yogi MaandhanYojana, Bill to repeal broking services, corporatisation of to the private sector, changing the def-
58 archaic laws, including the outdat- Ordnance Factory board; and strength- inition of MSMEs by including both

INDIA-CHINA STAND-OFF
Ajai Shukla@ajaishukla
China hanging tough on proposed military
meeting. Silent on accepting invitation, no
discussion of Galwan.My fear: To hide its debacle,
govt might leave key positions with China, accept
token withdrawal, and declare victory -- to
applause from bhakts.
Brahma Chellaney@Chellaney
Even in today's latest round of talks on the
standoff, China has shown India that it is not its
equal but an inferior: A Chinese major-general is
holding forth on China's position in talks on
Chinese-held territory with a senior Indian
lieutenant-general who is a corps commander.
M K Venu@mkvenu1
After abrogating Article 370 last August Amit Shah
reinforced in Lok Sabha India’s claims over Aksai
Chin which did not go down well in Beijing. This,
experts say, is a major cause of China’s border
intrusion now. Did Shah overreach himself?
Yogendra Yadav@_YogendraYadav
National interest must trump partisan politics on
India- China standoff. No doubt, Govt has goofed
mountains >
THE ONGOING MIGRANT CRISIS
Arvind Panagariya@APanagariya
Just as the host states found it impossible to hold
migrant workers back once in lockdown, home
states will find it hard to stop them from returning
once host states open up workplaces.
Kumari Selja@kumari_selja
In the midst of Covid-19 pandemic, migrant crisis
and tumbling economy, BJP has again resorted to
strifling democracy in Gujarat to win Rajya Sabha
seats. Condemnable how their lust for power has
superseded public service.
SURGE IN COVID CASES IN INDIA
Yashwant Sinha@YashwantSinha
Congratulations to PM Modi for ushering in 'a
golden chapter in the history of Indian
democracy'. The next year promises to be even
better when India will climb to the top in Covid
cases and the economy would have collapsed
totally.
Manish Tewari@ManishTewari
COVID-19 Cases @ 1,81,273. 6 th highest in the
world80 dead in Shramik Specials
China grabs btwn 40-60 KM’s in Ladakh.
Nepal draws up a new map that impinges on
India’s territorial integrity.
Economy is up a creek without a paddle.
Seriously What is NDA/BJP celebrating
Smita Prakash@smitaprakash
You can kiss your visas good bye, with these
numbers which country is going to allow us in
whenever international travel opens up globally?
By thurs night 2,19,117 cases in India, cumulative
deaths-6,349. Spike again due to Maharashtra &
Delhi numbers.
T
his quote in many ways exem-
plifies the leadership of Prime
Minister Narendra Modi, who
chose to bring in the biggest indirect
tax reform in post-Independent India
by implementing the goods and serv-
ices tax (GST) in his first term.
Consumers got an annual benefit of ~1
trillion due to GST in 2018-19. With a
compliance rate of over 70 per cent,
with over 13 million GST filings, suffice
to say that GST has succeeded in its
endeavour towards replicating the “one
nation, one tax” model.
Be it launching Rupay cards in Abu
Dhabi and Bhutan, spearheading the
international solar alliance, or power-
ing the India story at BRICS—the asso-
ciation of emerging economies of Brazil,
Russia, India and China— and the
Eastern Economic Forum in
Vladivostok, Modinomics, the Modi
government’s first term in office laid the
groundwork for change. The second
term has thereafter been implementing
those changes. The notable ones are the
health care scheme, Ayushman Bharat,
that has to date benefited over 10 million
people; the ~6,000 per annum income
support under the PM-Kisan Yojana that
benefits over 145 million small and
marginal farmers; and the direct bene-
fit transfer scheme, which has so far
transferred a cumulative sum of ~8.91
trillion, or approximately 4.5 per cent
of India’s gross domestic product (GDP).
In the first year of its second term,
the government’s landmark steps
include the decision to implement ~102
trillion worth of infrastructure projects
via the national infrastructure pipeline,
lowering Employees’ State Insurance
Act contribution from 6.5 per cent to 4
ed labour laws and passing the Code on ening the insolvency and bankruptcy investment and turnover related cri-
Wages Bill, 2019, which will benefit code (IBC) framework by ring fencing teria, atomic energy reforms, allowing
over 500 million workers across the new owners of bankrupt companies private sector in space exploration and
country, raising foreign portfolio from criminal liabilities of erstwhile decriminalising certain offences under
investor (FPI) limits promoters. the Companies Act have been part of
in corporate bonds The Bank the Modi government’s ~20.97-trillion,
from 9 per cent of Nationalisation Act of mega stimulus package to combat the
outstanding stock to 1969 has been a mill- economic challenges arising from the
15 per cent, and stone for public sector coronavirus pandemic.
opening up of spe- banks (PSBs). By That Modinomics is not xenopho-
cific government merging State Bank of bic is evident from the ~43,574 crore
bond limits for non- India, with its five investment by Facebook, in Reliance
resident investors, associates and the Jio. Equally, the clarion call of “Vocal
with the aim of carv- Bharatiya Mahila for local” by the prime minister is best
ing out a road map Bank in 2017, the gov- amplified by the decision to amend the
for India’s inclusion ernment created a Essential Commodities Act of 1955, to
in the emerging banking behemoth ensure deregulation of prices for food
market bond index. with an asset size of items including cereals, edible oils,
Those quick to over ~41 trillion and oilseeds, pulses, onions, and potatoes.
dismiss demoneti- Steps to defang the agricultural over 370 million cus- Also, allowing farmers in contract
sation would do produce marketing committee tomers. The decision farming and defanging the agricultur-
well to know that structure will give options to to thereafter consoli- al produce marketing committee struc-
the number of peo- farmers to sell their produce at date 10 PSBs into four, ture, will give options to farmers to sell
ple paying an indi- attractive prices starting April 2020, their produce at attractive prices, either
vidual income tax of and allowing the pri- via barrier free, inter-state trade, or via
greater than ~1.5 lakh has increased vate sector to enter into non strategic e-trading, besides ending trade carteli-
from 1.38 million in AY13 to 3.4 million areas, with not more than four PSUs in sation by middlemen and ensuring
in AY19, reflecting how demonetisa- any given strategic sector are all steps assured returns.
tion dramatically improved tax com- toward “minimum government, max- In the movie, The Curious Case of
pliance. According to data from the imum governance”. Benjamin Button, there is a quote that
National Payments Corporation of More recently, “One nation, one says, “Our lives are defined by oppor-
India, February saw 1.32 billion UPI ration card”, free food grain supply to tunities, even the ones that we miss”.
transactions totalling ~2.2 trillion, migrants, creation of affordable rental The last one year for the government
showing that demonetisation has also housing complexes in urban areas for has been extraordinary for the sheer
dramatically enhanced India’s digital migrants, ~90,000 crore support for number of opportunities that were
foot print. cash starved power distribution com- seized to create new milestones.
Big bang reforms have been the panies, ~30,000 crore special liquidity India trumped France in 2019 and
norm. Underpinning them are the scheme for non banking financial com- then surpassed the United Kingdom
reduction in corporation tax rate from panies, housing finance companies in early 2020 to become the world’s
30 per cent to 22 per cent for old com- and micro finance institutions, ~3 tril- fifth largest economy.
panies and for new ones to 15 per cent; lion of collateral free loans to micro,
100 per cent foreign direct investment small and medium enterprises The writer is an economist and chief
(FDI) in coal mining and contract man- (MSMEs) and liquidity support of spokesperson for BJP Mumbai
8 DEMOCRACY AT WORK
>
NEW DELHI | 7 JUNE 2020

DID THEY REALLY SAY THAT?

CHATTERBOX

Another threat CHECKLIST

Amid Covid-19 crisis, there is another threat that India is dealing with — locust attack
that can destroy food crops. Currently, a thick cloud of locusts is spread over Maharashtra
VIRTUAL REALITY: COVID EFFECT ON MULTILATERAL CONFERENCES
covering an area of a few kilometres from Ramtek to the Madhya Pradesh borders and it n The UN General Assembly meeting in New gathering of the rich and powerful in Davos in
is moving eastwards towards Telangana. As many as 23 swarms of locusts had entered York every September is likely to be held January 2021 is on and it will focus on a post-
India from Pakistan and experts said they were unlikely to move out before July-end. In virtually. Consultations are on but it seems pandemic world. The theme of the 51st WEF
view of this, many task forces, involving senior IAS officers, have been set up by Telangana impossible for leaders of more than 100 Annual Meeting is ‘The Great Reset’ and it will
Chief Minister K Chandrashekhara Rao to handle the possible attack. The Telangana countries to descend on New York given the be a twin summit with both in-person and
government has deployed 47 ground teams to spray chemicals and take other measures proportions of the pandemic. The occasion is virtual dialogues. The annual meeting will be
to curb the menace. The government has to make sure the threat is eliminated before an important one: the 75th anniversary of the open to everyone via an open-house policy in
the onset of the Kharif season in the last week of July. formation of the UN. UN General Assembly multiple hubs. Climate change will be one of
President Tijjani Muhammad-Bande said a the top discussion points.
Yediyurappa in trouble! decision will be taken after consulting all n The Boao Forum for Asia, China’s answer
Recently several BJP MLAs from North Karnataka, especially those belonging to the member nations. The UN has cancelled or to Davos, has been postponed. It was
Lingayat community — to which the Chief Minister B S Yediyurappa belongs —held a postponed numerous upcoming events scheduled for March 24 to 27. No new dates
meeting, in which they reportedly expressed displeasure over his style of functioning. including the five-year review of the nuclear have been announced.
The party insiders feel this could possibly be in view of the upcoming Rajya Sabha and non-proliferation treaty that had been n World Bank Spring Meeting was held
Karnataka Legislative Council elections, to be held later this month.
"EVERYBODY HAS A RIGHT TO HAVE AN OPINION BUT scheduled to start in late April, and two major virtually in April. The bank has announced its
Sources say the Congress-JD(S) rebels, who won the bypolls on BJP tickets last events in Mexico City in May and Paris in July to next meeting will be held in Washington, D.C.
December, have set their eyes on ministerial berths, hoping for a possible government RAJIV BAJAJ IS NOT AN EXPERT ON COVID-19 AND HOW TO commemorate the 25th anniversary of the on October 17, 2020.
expansion after the Legislative Council polls. While some are persistent with their DEAL WITH IT." Beijing women’s conference, which adopted a n The Asian Development Bank annual
demand for ministerial berths and have put the CM in a fix, the Centre is unwilling to BJP spokesman on economic affairs, 150-page roadmap to achieve gender equality. meeting that was scheduled in May will now
make all of them ministers. Gopal Krishna Agarwal, in New Delhi, June 4 n The World Economic Forum’s (WEF) annual be held in September in South Korea.

used big data in a way no other campaign had

ILLUSTRATION BY BINAY SINHA

The brake on physical public gatherings,
which could become a turning point in
OPINION deciding the outcome of elections, means
parties will have to rely much more on luring
HARSH VARDHAN SHRINGLA voters through digital and electronic means.
So will parties that are poorly prepared to
to date. Each night, they were running hundreds
of thousands of simulations of the election, with
a clear majority of those showing a Clinton vic-
tory. And yet, we know what happened in the
final analysis; many of our conventional politi-

‘An opportune embrace the digital modes of propaganda go

back to the basics: caste and identity politics?
Let’s stipulate one important fact: the Bharatiya
cal assumptions were outdated or simply out-
of-touch.

moment for India’s

Janata Party (BJP) has an enormous digital Yes, and to amplify in the Indian context, we
advantage over its rivals, both national and have the example of Chandrababu Naidu. No
regional. The BJP has embraced technology in politician in India is more attuned to
a manner no other party has and it can use its technology. The Telugu Desam Party just held

tech-based firms’ control of the central government, resource its Mahanadu meeting via Zoom. And yet,
advantage, and its organisation — both official despite technology, despite the promise of
and unofficial (the Sangh Parivar) — to further delivering a brand new state, Naidu and his

I
n India, we are distinctly aware of the disruptions that
this pandemic has caused in the global supply chains.
But our response to this disruption is far from turning
isolationist or protectionist. We are well aware that while
globalisation is here to stay, its norms, however, may become
different. The idea is, therefore, to make our systems and our
markets highly adaptive to the changing scenarios. We are cog-
nisant of the potential role we can play in a world that is looking
at highly uncertain times. To this extent, and to induce reliability
into our systems, we are fast developing our production and
supply chains to fill in the gaps in the global supply chains,
where we have the potential to do so.
India’s prowess in the IT sector has been established over
the last two decades. The IT and BPM sectors of India account
for over 55 per cent of the total global outsourcing market. The
sector has continued to record double-digit growth despite the
static growth in global tech spending. The sector is an important
growth driver and contributed nearly 10 per cent to the country’s
GDP. Known for its cost competitiveness and high-quality serv-
ices across the world, the IT & BPM industry in India has made
a significant contribution to transforming the perception of
India in the world economy.
Fintech has been identified as a new and emerging area of
bilateral and multilateral cooperation. The IMF had last year
identified financial innovation as an important aspect of our
future in the digital age. It was also highlighted that most coun-
tries see Fintech as transformative for financial inclusion, which
promotes growth, opens access for poor and rural communities
through lowered costs and facilitates women’s participation in
the formal economy. This offers an opportune moment for In-
dia’s tech-based companies and start-ups looking for opportu-
nities across the world. Even though there has been negative
impact of the current crisis on the Fintech sector, recent trends
look promising. There was an increase of around 40 per cent in
the funding received by the Indian Fintech sector in the first
quarter of 2020.
In the MEA, we are planning to build on our domestic suc-
cesses in the Fintech sector in a structured manner and utilise
the significant capabilities that have been evolved and devel-
oped in the domestic government, public and private sectors
in executing similar digital platforms and e-governance ini-
tiatives in friendly and partner countries as part of
Development Partnership Frameworks to project India’s soft
power and for commercial benefits. We are planning to under-
take pilot projects... on a wider scale. We are working with
several countries on making our digital payment systems
interoperable. Countries like Singapore have already launched
some of our digital payment systems such as Rupay and
BHIM. You would also recall that in 2018, the Prime Minister
had launched a global digital platform, APIX, to connect
Fintech companies and financial institutions.
Besides, our diplomatic missions have been working in col-
laboration with line ministries and state governments to carve
out a place for India as a reliable alternative in the space of low-
cost manufacturing. The missions have been instructed to pro-
mote India’s image as a safe and reliable destination where all
investment-related requirements can be facilitated for man-
ufacturing units planning to shift their base to India in the post-
Covid situation. In this regard, our missions have been requested
to provide us with detailed inputs on Non-tariff Barriers being
faced by Indian exporters in their respective countries of accred-
itation. The missions are also working to identify newer lines
of goods and services as well as new destinations where India’s
exports can be enhanced.
Rise of the 'campaign
consultant’
Covid-19 is pushing Indian political parties to quickly look for alternative ways of mobilisation. Does this
mean a new kind of politics is in the offing? Milan Vaishnav, director of the Carnegie Endowment's South
Asia programme and author of several books on Indian politics, tells Aditi Phadnis some things will
remain the same but some will change.
Covid-19 has had at least one definite and
predictable effect: mobilisation by Indian
political parties will never be the same again.
What do you think?
What we have seen so far is that Covid-19 is
further entrenching some key political trends
we were already witnessing in the pre-pandemic
era — heightened degree of social polarisation,
centralisation of power, and emaciation or atro-
phy of accountability institutions. Similarly, the
pandemic is helping to consolidate previously
apparent trends in political mobilisation. Since
2014, we have seen a pretty significant shift to-
wards digital campaigning, micro-targeting,
and online mobilisation, be it on Facebook,
Twitter or perhaps most consequentially
WhatsApp. The pandemic will push all parties
further in the direction.
Does the pandemic mark the end of noisy
rallies, (or raila as Bihar’s former chief
minister Lalu Prasad Yadav used to call
them) that gave politicians the chance to
stand at the pulpit and make stirring
speeches and rash promises?
A new dawn for Mangalore’s sunset industry
An architect couple lends support to the crumbling terracotta tile
factories, writes Anjuli Bhargava
I would not be so quick to sound the death knell
of the traditional campaigning, consisting of
large rallies and jan sabhas. Look at what is hap-
pening in the United States. For weeks on end,
Americans were locked in their homes, observ-
ing social distancing and home quarantining
norms. And yet in the wake of gruesome police
brutality against African-Americans, we are see-
ing thousands throw caution to the wind and
line the streets of major cities in protest day
after day. In India, the combination of economic
dislocation caused by the pandemic and the
communal polarisation simmering beneath the
surface means that one cannot write off the pos-
sibility of large mass gatherings, even in the
near future. The balance of digital and physical
might tilt towards the former, but I would be
extremely cautious in dismissing the impor-
tance of the latter. At the end of the day, many
parties and politicians in India derive authority
from street power — think of the Shiv Sena in
Maharashtra, the Rashtriya Janata Dal in Bihar
or the Aam Aadmi Party in Delhi. I don’t think
this link will be severed easily.
build upon this advantage. We are seeing some party have suffered a political setback.
signs of catch-up — look at how the Congress is This is a great example. Perhaps the best way of
using social media, for example — but the BJP thinking about technology is that it can be an
has a clear first mover’s advantage. I would enabler or force multiplier, but ultimately it
expect convergence over time, but we are not depends on the quality of the product you have.
there yet. What does this mean for the opposi- It reminds me a bit of the debates social scien-
tion, which seeks to displace the BJP? It has a tists used to have about the role of social capital
unique opportunity to go hammer-and-tongs and civil society networks. At first, social capital
at the ruling party on the economy. Anyone who was hailed as a sure-fire positive. But, at the end
looks at Indian data can see the slowdown pre- of the day, social capital empowered fascism in
ceded the pandemic, which has made a bad sit- inter-war Germany but it also fuelled American
uation truly awful. I don’t think caste and iden- democracy in the 18th and 19th centuries.
tity are going to give the opposition the Similarly, we can get a bit carried away with the
ammunition they need — if 2014 and 2019 are allure of “techno-governance.” Think about
any guide. We have seen an exhaustion of the many of the welfare schemes the Government
Mandal politics that prevailed over the last three of India has rolled out in recent years — if you
decades. The real question is whether the oppo- create an elaborate data dashboard to track toi-
sition has the wherewithal to articulate two let construction, this is not necessarily the same
things: a simple economic critique of the thing as tracking modern sanitation practices.
(Narendra) Modi economy and a viable future You are completely missing out on the behav-
alternative. Right now, to be fair, we are seeing ioural dimension to the problem. So perhaps
neither. I would refer here to Neelanjan Sircar’s we are entering an era where technology is nec-
brilliant argument that 2019 was essary, but ultimately insufficient
an election about vishwas (faith), for good governance.
not vikas (development). The In the realm of electoral pol-
people have a faith that Prime itics, I think what the BJP has done
Minister Modi will take the right is to leverage technology in service
calls for the country on the econ- of a product — Modi, a very pop-
omy, and foreign and domestic ular product. But technology has
policy. The opposition has to not saved the BJP in countless
undermine this premise — caste states — be in Rajasthan or Chha-
and identity alone will not get
MILAN VAISHNAV ttisgarh — where the electorate
you there. Director, South Asia programme did not view the product favou-
Carnegie Endowment for rably. One case that merits closer
Will this in turn spawn a new International Peace study is West Bengal, where the
generation of the BJP used technology as essentially
entrepreneur/IT czar political a substitute for a robust party
manager? Just like, after the rise of organisation in the 2019 Lok Sabha election.
Rajiv Gandhi, a new term for politician was the Even the BJP officials admit this now. I would
“political executive”. love to see a case study of the party’s approach
Undoubtedly, we are already seeing that. The and some thinking about whether it is replicable
rise of the ‘campaign consultant,’ who is a ubiq- elsewhere. But again, the product they were sell-
uitous character in most Western democracies, ing was Modi (not a state-level figure) and the
is apparent in India too — albeit with a lag. The ground was fertile for such a ploy.
new digital politics will accelerate the creation
of this relatively new career pathway but could Are we looking at a new app-based politics?
also lead to, frankly, a lot of charlatans flooding I think we’re looking at a spectrum of activity
the space. It is pretty easy, with the kinds of big — from digital to physical. In the political
data available today, to develop a kind of data- domain, India is moving toward the former but
driven certitude that is totally devoid of history, we should not ignore the latter. If you look at
politics, culture, and context. Again, coming ba- other walks of life — sports, film, music, work
ck to the American experience, consider the les- — data and digital applications are all the rage.
sons of the 2016 election. The Clinton campaign Why should politics be exempt?

A
In the changed times and in the event of disruptions in our s time takes its toll, the tories for alternative uses, the owners Mangalore tile industry – Unfired --
supply chains, countries around the world will be looking for centre of a bustling city increasingly see lease or sale of their in collaboration with UK filmmaker
maximum diversification of their production and supply chains surreptitiously turns into complexes as a looming inevitability. and photographer Patrick Shanahan.
in the medium to long term, weaning away from extreme de- a ghost town, rich palaces The disappearing industry, It was shown at the latest Art in Clay
pendence on any one particular country or region. This offers resemble decrepit relics and images however, has caught the imagina- festival at Farnham, UK.
us with an important opportunity. Developing India into a low- etched into the citizenry’s conscious- tion of a number of people, includ- Besides drawing the attention of
cost manufacturing hub will help us position ourselves as the ness disappear into oblivion. This is ing filmmakers, conservationists, the world towards the dwindling
preferred investment destination. India’s highly functioning the predicament of Mangalore’s ter- architects, and even the sundry res- industry, they have also created a
democratic systems and high levels of transparency in govern- racotta tile-manufacturing industry, idents of Mangalore. Among them range of prototypes for new products
ance are our prime assets, which are important to build investor a nagging reminder of the city’s lost are architect couple Arijit Chatterjee that could be designed and created
confidence. Combined with the ease of doing business and ea- glory and pride. and Asha Sumra. using the existing kilns and resources.
sily accessible capital, India is a promising manufacturing des- Terracotta production was started UK-born Sumra, who is an alumni To go ahead with the work, a 2,080-
tination. We have to bank on our strengths and plug in the gaps, in India’s Malabar coast by the of Cambridge University, is looking square-feet office complex has been
wherever possible. German missionaries in 1865. As the at possible ways for revival of the built by CoreClay on a leased space
Let me also briefly touch upon the issue of movement of hi- tile industry remained rooted in tra- industry with adaptive reuse of the on the premises of Commonwealth
gh-skilled Indian professionals, including those pertaining to dition, with stubborn resistance to factories and production of new pro- Tile Factory, Feroke, in Kerala.
the H1B visa programme. There is some anxiety among our change, over the time, it couldn’t ducts with the help of a grant from The architect couple say the idea
people and industry about restrictions on H1B visa... match the real estate industry’s rapid Intach, UK. She has subsequently col- is to explore repurposing through a
As you are aware, the government of India has closely con- strides. The Mangalore terracotta laborated with her husband, who is sensitive process of adaptive reuse
sulted all stakeholders and engaged with the US government roofs began to be replaced an architect from to revive the factories as civic
on this issue. Prime Minister (Narendra Modi) had taken this by other more practical Ahmedabad’s CEPT destinations. The generous unused
up, along with the issue of the totalisation agreement, during and cheaper alternatives. University, for the project. bungalows would make ideal home-
the visit of President (Donald) Trump to India in February 2020. Also ban on clay mining in “Referred to as a sun- stays next to waterways and within
The onset of the Covid-19 pandemic in the US and the atten- the region, that ensured set industry, Mangalore reach of cities, they feel. The duo
dant impact on the US economy has led to a change in the situ- that the primary raw mate- tile-manufacturing is paints a vivid, throbbing picture of
ation. We need to adopt a realistic yet effective approach. Acco- rial dried up, led to their THE OTHER deteriorating in line with the sites and argues that it is pos-
rdingly, our approach has been to work at the diplomatic level gradual decline. the factory buildings. sible if the right people put their
and deal with each specific issue one at a time. We were able to As things stand now, INDIA There is an urgent need might behind it. “With so many
intervene early on in our lockdown with the US Government out of over 300 factories in for conservation of the buildings and so much of unused
on the issue of temporary relief for H1B visa-holders whose the region, including some complexes and a plan for space, any proposal must be eco-
visas were expiring in this period, on a case-by-case basis. parts of neighbouring their future use. An injec- nomically as well as functionally
We have continued to stress that the economic and trade li- Kerala, there are only two left in tion of vision, energy and funds is viable,” says Chatterjee. A report
nkages are a strong pillar of our strategic partnership, particu- Mangalore that produced tiles, while necessary to counter this defeatist submitted by Sumra to the UK
larly in technology and innovation domains. High-skilled Indian two others make bricks and hollow mood,” says Sumra. Intach elaborates on a grander plan A terracotta tile factory complex in Mangalore
professionals working in the US through H1B and related non- clay blocks. Demolition of factories – Chatterjee adds that almost all in the hope that it will be adopted.
immigrant visa regimes bridge the crucial skill gap and provide now halted due to Covid-19 pandemic industries need to diversify, reimag- However, nobody denies it’s easier direction (Intach, Basel Mission, making Mangalore a smart city.
technological and competitive edge to the US companies. We – has been steadily happening over ine and keep up with the times, some- said than done. Putting in place a Calicut Heritage society), profes- But above all, it would need a
have also highlighted that (the) high-skilled Indian professionals the years. The tile factory owners too thing the terracotta tile industry structured plan — especially post sionals (architects, designers, engi- sharp nudge from the despondent
are engaged in the fight against Covid across various fields... seem to be resigned to the eventual failed to do. It is paying the price now. pandemic — would need collabo- neers) and the local community. factory owners, workers and the
demise of the remaining factories. In 2018-19, the couple who live ration among the industry (common- Besides a massive fund injection, it dependent community. Unless their
Edited excerpts from Foreign Secretary Harsh Vardhan Shringla’s virtual Lacking willingness or funds to diver- between UK, India and South wealth trust and private owners), con- would need committed government mood changes, the environment and
address to NASSCOM (June 2, 2020) sify production or convert the fac- America produced a film on the servation bodies working in this support, tying up with the plans of air around them is unlikely to.
 >
OPINION 9
Volume XIV Number 11
NEW DELHI | 7 JUNE 2020

From the private sector’s perspective, build- is scheduled for completion in 2021. But now Space Research Organisation projects that it

A new paradigm ing satellites and creating propulsion sys-

tems to place them in orbit are old hat.
Private firms such as Virgin Galactic have
The success of SpaceX has opened up immense possibilities also taken tourists to the edge of space and
brought them back in short trips.
that this test flight is done, other entrepre-
neurs will surely be inspired to emulate.
The ISS itself is due for retirement by
2024, though it may be refurbished and car-
ry on operating till 2028. The replacement
could be looking at 15,000 satellite launches
over the next six to nine years. This is apart
from possible manned missions to the moon
and Mars, and attempts to mine asteroids, etc.
The occupation and exploitation of the zone

S
paceX, the private aerospace com-
pany led by the charismatic and
controversial Elon Musk, has just
completed a historic mission. Its
Crew Dragon spacecraft delivered two astro-
nauts from America's National Aeronautics
and Space Administration (NASA) to the
International Space Station (ISS) and
returned safely to Earth. This is the first time
a private company has successfully carried
astronauts and returned, that too with the
craft in reusable condition. It marks a new
technological paradigm for the private sec-
tor and it has large implications for nations
such as India with space-faring ambitions.
After NASA retired its Space Shuttles in
2011, the US hired seats on Russian space-
craft launched from Kazakhstan to ferry per-
sonnel to the ISS, which is itself a joint ven-
ture funded by five space agencies including
the European Space Agency. NASA started
looking for companies with the knowhow
and willingness to invest in space vehicles;
“taxis” and “rucks” to ferry goods and pas-
sengers to the ISS. It zeroed in on SpaceX and
Boeing. Tendering out to the private sector
is traditional for NASA. From inception, it
has done research, set design and specifica-
tions, and tendered out for components,
which it tests, assembles, and launches.
Every component in NASA vehicles is sup-
plied by the lowest bidder. About half of
NASA’s annual budget, including the travel
costs, goes on its commitments to the ISS.
But building a reusable spacecraft,
which can carry passengers safely to a place
400 km above the Earth, and return with
them as necessary, is a different matter
entirely. It presents huge technical prob-
lems, which need to be solved on a cost-
effective basis within NASA’s budget. It isn’t
just a question of getting there and back —
SpaceX started making cargo deliveries to
the ISS in 2012 itself. But human beings are
delicate creatures. They cannot stand high-
gravity acceleration; they need oxygen, and
shielding from heat, cold, and radiation. The
original deadline for a private passenger
spacecraft was 2015. The five-year over-run
is testimony to the difficulties involved and
the Boeing shuttle, with similar capabilities,
could be the Lunar Orbital Gateway, which
will orbit the moon, or another larger facili-
ty, built with multilateral cooperation. That
will lead to greater demand for space trucks
and taxis. In addition, private companies and
well-funded academic institutions may well
be looking at facilities in space for various
kinds of research. Telescopes work better in
space, for example. There is a need to study
bio-organisms in zero-gravity, high-radia-
tion environments. There is a case for storing
digitised DNA species records off-world and
even for constructing spacecraft at the zero-
gravity zone of the Lagrange points, where
Earth and Lunar gravities cancel.
There are countless potential commer-
cial and military applications. The Indian
between the Earth and moon will present a
huge opportunity. Various nations are now
rewriting laws to enable commercialisation.
This has its dangers — SpaceX itself has been
criticised for putting up a string of satellites,
which interfere with astronomical observa-
tions. Space clutter represents another danger.
Exploiting those opportunities responsibly
will require inter-government cooperation and
rewriting treaties. Doing it efficiently will
require private enterprise to step forward with
capital, engineering knowhow, and manage-
ment skills. India has made a beginning with
the commitment to induct the private sector
into space in a larger way. The latest milestone
underlines the need for giving this area high
priority and getting the details right.

Covid-19 in perspective Blueprint for a more

Indians have long seen deadlier diseases. We need to take all precautions and get on with our lives healthy economy
JYOTI PARIKH
AKHIL BANSAL
I
n a large country like ours, there are contradic- surveillance system that can be used for pre-
tions galore. While one section of society is NUMBER OF DEATHS BY dictive analytics and preventive interventions.

either ignorant or careless about following basic
precautions such as wearing masks, maintaining
social distance, and so on, others are afraid to ven-
ture out for the past two months and imagine every
person to be a carrier of the disease. This is okay for
seniors, but when the young population gets paral-
ysed, it is time to put the problem in perspective.
First, let us see India from a global perspective.
Worldwide data showed that India, with 1.3 billion
people, stood at 40th place when we became serious
about the lockdown. Yet, due to our large size, we
have now entered the list of top 10 countries in total
Covid deaths. However, our mortality rate is 4
deaths per million population, compared to
Belgium’s 820, Sweden’s 436, Italy’s 554, UK’s 575,
and US’ 323. The number of deaths per thousand
positive cases is 28 in India, compared to 152 in
France, 144 in Italy, 141 in UK, and 95 in Spain.
Our slow start — we took 2.5 months to reach
5,600 fatalities, due to multiple lockdowns — has
helped us so far in keeping the disease under some
control. These months taught us about wearing
masks, physical distancing and other precautions.
Another hopeful statistic is that 48 per cent of cas-
es have recovered now, com-
pared to only 25 per cent just The worst-case
a few weeks ago. By and large, scenario of
when that reaches 75 per cent, further
the urgency reduces and escalation needs
relaxation starts, as we have to be weighed
seen in China and Italy. against the risk
Yes, there has been a rise of the poor
in the number of cases from suffering due to
2,000 per day on May 1 to the closure of
8,000-plus on June 2. But this economic
can be partially attributed to activities
substantially increased test-
ing, from 1.06 million to 3.73 million, which also
includes asymptomatic cases.
Second, Covid deaths should be seen in the per-
spective of the overall death rate in India, which is
seven per 1,000, which translates into 9.1 million
deaths a year, or approximately 750,000 deaths per
month, or 25,000 per day. Covid fatalities of 6,643 (as
of June 5) over a period of 2.5 months may seem a
very small fraction of total deaths. But we have to
keep in mind that there may be under-reporting of
deaths, and the total number of cases does not make
the Covid risk acceptable. There have been reports
about reduced deaths from traffic and air pollution,
and even a reduction in net death rates. But it does
raise a question about how deaths due to Covid and
its consequences should be viewed.
Third, we need to view them from the perspective
of what other threats of death we are already living
with. The accompanying table shows the burden of
deaths for the year 2017. We see that it covers com-
municable and non-communicable diseases, and acci-
dental deaths such as traffic accidents and drowning.
Here, cardiovascular diseases are at the top with 2.36
million, in which air pollution is one of several factors.
Respiratory diseases, at 1.27 million, are second.
If we insert Covid deaths of 6,643 over the 2.5-
month period of 2020, it will be only at 29th place.
This chart also includes deaths from road accidents
(218,876) and drowning (60,199), at 11th and 16th place,
respectively. Temperature stress (14,728), natural dis-
asters (1,979) and terrorism (465) are at 27th, 31st, and
T
he saying, extraordinary times call for Incentivising the setting up of health care
CAUSE, INDIA-2017 extraordinary measures, holds more
truth now than ever before. India has
facilities by leveraging public-private-part-
nerships would be key to building scale across
Cardiovascular 2.36 million
embarked on a journey of self-reliance with five key health care services, such as hospitals,
Respiratory diseases 1.27 million the Aatmanirbhar Bharat Abhiyan — an eco- primary care, diagnostics, medical colleges,
Cancers 929,500 nomic stimulus of extraordinary proportions to and digital clinics or telemedicine. A
Diarrheal diseases 719,083 provide financial relief in the wake of the Covid- “National Health Infrastructure Development
19 pandemic, so as to enable business survival Fund” could be one way to help boost the pri-
Lowerrespiratory 507,364 and continuity, improve the environment for vate health sector, especially in tier-II and
Tuberculosis 449,794 agriculture, and make India a part of the glob- tier-III cities.
Neonatal disorders 428,672 al manufacturing and services value chain.
What we need is a map — an economic blue- Attract foreign investment
Digestive diseases 419,545
print — that will address the need for domestic Apart from spurring the domestic economy,
Diabetes 254,555 growth and put in place measures that will the blueprint should also look at investments
NUMBER OF DEATHS IN Kidney diseases
Road accidentdeaths
223,821
218,876
make India attractive for foreign investment. coming in from abroad.
Given the uncertainty in global capital
THE TOP 10 COVID-19 Liverdiseases 217,896
Health is wealth flows, there has been a drying up of foreign
Providing a shot in the arm for private domes- direct investment. So, any inflow is a good step
AFFECTED COUNTRIES Suicide 210,869 tic investment, the finance minister has deci- to revive India’s post-Covid economy. The gov-
 Deaths/1 million population Dementia 180,053 phered the math behind the stimulus package ernment’s efforts should thus look at charting
 Deaths/1000 cases Hepatitis 67,273 to ensure that agriculture, business and man- a course that will focus on making India an
ufacturing are back on track as we deal with the attractive destination for investments.
USA 323 Drowning 60,199 virus. The lion’s share has been carved out to Investors would look for destinations that
57 HIV/AIDS 52,106 help micro, small and medium enterprises have strong governments, a large amount of
Brazil 141 Meningitis 50,052 thrive, bringing about a positive impact on entrepreneurial talent, and a developed
57 overall industry sentiment. But the pandemic domestic market with a thriving private sec-
Malaria 49,712
has taught us the need to have better health tor, apart from low-cost skilled labour. India
Russia 35 Nutritional 43,150 care systems; our economic has what it takes; we just need to
12 Homicide 41,850 revival will depend to a large If India’s road map package it smartly.
Spain 580 Parkinsons disease 40,590 extent on how we strengthen our for growth We must also identify and
95 health infrastructure. complements its focus on key sectors, such as
Maternal disorder 28,826 The stimulus package has capabilities with information technology/IT-
UK 575
141 Alcohol-use disorder 28,826 zeroed in on the need to improve more open trade enabled services, medical tourism
Fire 27,027 our public health systems. The and investment and pharmaceuticals, that offer
Italy 554 Centre has committed ~15,000 policies, it would greater competitive advantage,
144 Protein energy 24,542
crore for health-related measures provide an and industries where India offers
INDIA 4 Exposure to heat/cold 14,728 so far. While health care infra- impetus to a large domestic market.
28 Drug-use disorder 11,155 structure and service strength- Make in India Identifying strategic sectors based
France 442 COVID-19 6,643 ening will be the top priority of on market advantage, or the
152 the government, the other measures potential to generate employment, or those
Poisoning 5,095
announced include infectious diseases hos- that add multiplier value creation to other sec-
Germany 103 Natural disasters 1,979 pital blocks for all districts, and the strength- tors, will help in creating a priority framework.
47 Conflict 766 ening of the laboratory network and surveil- Additionally, we should look at strengthening
Peru 141 Terrorism 465 lance, apart from encouraging research. The our manufacturing ecosystem because
27 Source: Institute for Health Metrics and Evaluation (IHME), Global objectives behind these announcements are investors interested in moving their money to
Source: https://www.worldometers.info/coronavirus/ Burden of Diseases clear: Build capacity and prepare India for India would look for an environment backed
Note: Covid deaths for 2020 (updated to June 5) have been added to this chart any future pandemic; boost digital health by regional industrial frameworks and poli-
adoption; and bridge the current gaps in the cies, both at the national and state levels.
health system. Redesigning institutions for export pro-
33rd place, respectively. Of course, that does not make suffering due to the closing of economic activities. Given its significance in the current envi- motion by creating new capabilities for
them any less important. The fact that we have a new We have realised that stopping economic activities ronment, the health care sector must be made increased focus on trade promotion and
additional cause of death in the list is in itself a major will bring more misery than the disease itself. a key part of the national agenda by ensuring investment would also provide a thrust to
concern. One avoidable death is always too many, Therefore, it is imperative to address community that all policies hereafter must place the most exports. Another measure would be to sim-
and should not be tolerated, from any source. fears, as we are in the third month. vulnerable at the centre. At the core of a blue- plify the existing labour laws, facilitating
How many of the other deaths could have been Unfortunately, the danger is far from over. print must rest the belief that development access to intellectual property protection
avoided if they had received similar focused atten- Doubling time, which was rapidly improving, has will be guided by a philosophy that benefits tools, setting up free zones with tax holidays
tion, time, manpower and a ~20-trillion package? started stagnating. New epicentres and contain- the most vulnerable. Citizens need better or special economic zones, and cutting fric-
How many deaths from diabetes, cancers, HIV and ment zones are making an appearance. The early access and availability of health infrastruc- tion in logistics, which could go a long way in
tuberculosis could have been avoided with even a gains may vanish unless we strengthen precautions ture — the pandemic has underscored the attracting global companies to India.
small fraction of this effort? On a personal fear front, and our health systems. need to address fundamental issues like short- If India’s blueprint for economic growth
do we think of the 218,876 deaths caused by road Let us get on with our lives, taking precautions and age of doctors and health care professionals, complements its capabilities with more open
accidents, before we embark on a journey every day? managing several new normals — our health, lifestyles, ensure access to facilities for all and build trade and investment policies, it could not only
Yet another perspective is a socio-economic one. the way we work and our economy. We need to walk on affordability. To give the masses access to be a major beneficiary of global investments but
Images of migrants, food distribution and depriva- a tight rope, with no place for complacency. health care, we need a national fund for health it would also provide impetus to Make in India
tion may have a much longer-lasting impact on our care that will not only reduce the cost of cap- and make India truly atmanirbhar, a win-win
society. The worst-case scenario of further escala- The writer is executive director of the think tank, ital but also bring down the viability gap. situation in a post-Covid-19 world.
tion, and the attendant health risks of Covid-19, Integrated Research and Action for Development Public investment would also be required to
needs to be weighed against the risk of the poor (IRADe), New Delhi set up a data-driven community health care The writer is deputy CEO, KPMG in India

> OTHER VIEWS

Rahul’s video interactions are Spectre of a temblor in NCR Testing must be ramped up
a pleasant echo chamber Little done to quake-proof region ICMR should relax the guidelines
Opposition politics during a time of Delhi-NCR, already reeling ogists to believe that a tem- India’s dashboard showed to relax testing guidelines,
under the onslaught of the blor of a much greater mag- 216,677 cases of the coron- and standardise them across
distress needs more imagination coronavirus, seems to be nitude may very well be on avirus disease (Covid-19) and India to ensure that anyone
headed for big trouble of a dif- its way, although they cannot 6,005 deaths on Wednesday who has the symptoms, or
The Rahul Gandhi-Rajiv Bajaj conversation put out in the pub- ferent kind if any of the recent predict the exact time, scale night. The number of cases who has had contact with an
lic domain on Thursday — the latest in a series of video inter- seismic activity is any indica- and location of an continues to rise — in India infected person, or who is in
actions in which Gandhi talks to and/or interviews a guest tion. The National Centre for earthquake. and in Delhi. The pandemic is the most-vulnerable group
under lockdown — draws attention for its content, and its for- Seismology recorded an The areas next to the yet to peak here. This should (senior citizens and those
mat. Take that moment, about halfway down the conversation, earthquake measuring 3.2 on Yamuna are particularly vul- be a time when testing should with other ailments) can get
when the Congress leader speaks about how the pandemic the Richter scale late on the nerable as the water from the be fast, wide, and indiscrimi- tested — and that is in the
required a decentralised response to begin with, and how the night of June 3, the epicentre river would turn the water- nate. So, why is it so difficult first phase. In the second
correct response is happening now, but too late. As a “passing of which was 19 km south- soaked subsoil to jelly, mak- to get a test? With positivity phase, anyone who wants to
of the buck”, not as strategy, agrees the industrialist, almost east of Noida. What is scaring ing buildings collapse like a rates continuing to remain get a test — young, old, symp-
completing Gandhi’s thought, if not his sentence. These sen- residents the most is the fact pack of cards. And despite this the same or even rising in tomatic, asymptomatic —
timents are worthy, the arguments need to be heard, but here's that the latest quake is the knowledge being in the public many states — this is the pro- should be able to get a test;
the problem: By picking a guest he evidently agrees with, and 11th to strike the Delhi-NCR domain for decades, both the portion of people testing pos- and the government should
who agrees with him too, the main leader of India's leading region in a span of just 45 Centre and the state govern- itive to the number of tests pay for those who can’t afford
Opposition party defeats the intended purpose of portraying days, with two previous earth- ments have done little to done — it’s hard to believe to pay for it themselves. Three
the leader as listener and learner. quakes measuring 4.6 and 2.9 quake-proof Delhi-NCR. How that states are not making months into a pandemic’s
It is understandable that the Congress leader should chafe that it is trying to beat the BJP in its own game. Video meetings being recorded on May 29. well they can cope with the testing difficult just to keep run in India, and after 68 days
at the narrative dominance of the BJP, amplified many times may have become de rigueur in today's work-from-home mod- And the common man is not added burden of major disas- their numbers down, and do of lockdown, it isn’t accept-
over by the political lockdown induced by the pandemic and el, but politics, especially Opposition politics in a time of dis- the only one worried, this ter and relief operations is well in some irrelevant and able to say the country does-
fawning sections of the media. But if this apparent bid to join tress, may need more energy and imagination than a webinar. wave of seismic activity over anybody’s guess. imaginary contest. n’t have testing resources.
the battle of images shows anything it is this: The Congress such a short span has led It is time for the Indian
must listen to its own advice, instead of giving the impression The Indian Express, June 5 some of India’s foremost geol- The Pioneer, June 5 Council for Medical Research Hindustan Times, June 5
10
>
NEW DELHI | 7 JUNE 2020 1

Indian drug companies Experts vary on whether cyclones,

continue making HCQ rain are signs of climate change
JYOTI MUKUL (ATREE), however, said this
New Delhi, 6 June approach was not correct for a large

amid controversy
country like India, especially since
Barely a fortnight after Cyclone the monsoon was a complex phe-
Amphan struck the eastern coast nomenon with South West
and Cyclone Nisarga the western Monsoon, North East Monsoon and
coast of India, a study by the Cyclones affecting rain in the coun-
London-based Global Warming try. “The Indian Monsoon is highly
Say they supplied 100 mn tablets to govt; receiving export queries Policy Foundation (GWPF) has variable but has shown a small to
downplayed the impact of climate moderate decline in annual rainfall
SOHINI DAS change over a 100-year period, since the 1950s even though fre-
Mumbai, 6 June saying that overall rain, drought, quency of more intense rains have
and cyclones have not seen much increased in some regions. Central

A
midst a raging global contro-
versy, hydroxychloroquine
(HCQ) makers in India con-
tinue to produce the drug for regular
rheumatoid arthritis and diabetes
patients apart from catering to export
orders. India is the world's largest
manufacturer of HCQ, which is also
an anti-malaria drug.
The once touted “wonder drug”
has been battling global controver-
sies around its safety and efficacy as
a prophylactic against Covid-19. India
continues to use the drug as a pre-
ventive for frontline workers like
health care professionals and police
personnel, apart from high-risk indi-
viduals, like close contacts of Covid-
19 patients.
A source in one of India’s leading
HCQ manufacturing companies
said, “We were making HCQ even
before the pandemic broke out and
continue to do so. It is a ~100 crore
brand for us. The government had
placed a big order, which we have
already supplied. India continues to
use the drug, and we can again sup-
ply when the government inventory
for HCQ ends”. He added that the
drug has been in use for decades
and is used daily by rheumatoid
arthritis patients.
“There is a hue and cry on whether
a high dosage of HCQ is toxic. India is
administering HCQ in 400 mg doses
— two doses on the first day, followed
by one per week for three weeks for
household contacts, or for seven
weeks for healthcare workers.
Arthritis patients take 400 mg of the
drug daily, and in all these years we
have never had a medico-legal case of
toxic side effects of HCQ,” said the
senior official quoted above.
The Indian government had
placed orders for 100 million tablets
which have been delivered by two
drug majors Ipca and Cadila
Healthcare. Each patient requires
either five to nine tablets. Going by
that, the stock would last for months as
it can cater to about 10 million people.
In fact, in April, sales of the anti-
malarial drugs saw an 11 per cent
spike in the domestic market.
At one point, Ipca used to make
600 tonnes per annum of chloro-
quine phosphate and had an 80 per
cent share in the global market.
However, the demand for the drug
has reduced over the years with the
particular malaria variant cases com-
ing down.
“We are getting queries from lots
of small countries in Latin America
and Europe. We are catering to these
orders. India also continues to use
RAMPING UP
India ramped in April, sales of
up its HCQ anti-malarial
manufacturing drugs saw an
capacity to 11 per cent spike
300 mn tablets in the domestic
a month by May market
No fresh orders from govt yet
HCQ. As of now there is no fresh order
for HCQ from the government as they
have enough stock,” the source
added. By May, India had scaled up
its HCQ capacity to 300 million
tablets per month.
Controversy
The inexpensive drug that has anti-
inflammatory effects (the reason it is
used in arthritis) came into limelight
after US President Donald Trump
promoted it. Industry insiders feel
this may well have also been the
drug’s undoing.
“The drug became a political issue
and also caused a certain divide in
the medical community. On top of
that, one country in the world, sud-
denly shot to fame by supplying the
drug to world,” felt a drug firm own-
er, who did not wish to be named.
Reputed peer reviewed medical
journal The Lancet carried a study in
May that said HCQ could lead to
increased mortality rates and also
came with the risk of adverse effects
like cardiac arrhythmia. Lancet, how-
ever, red-flagged the study last week
after several researchers and doctors
wrote to it questioning the reliability
of the data. Surgisphere, the company
that supplied the data allegedly from
over 96,000 patients across the globe,
came under the scanner.
In fact, another study published
in The New England Journal of
Medicine (NEJM) that also used
the same data was later retracted.
This study was on cardiovascular
disease, drug therapy and mortal-
ity in Covid-19.
Export enquiries India is the
continue world's
especially from largest HCQ
LatAm countries maker
Firms continue to make regular
HCQ for rheumatoid arthritis
and diabetes patients
The World Health Organisation
(WHO) suspended HCQ trials,
which were part of the global
Solidarity Trials. Last week it
resumed the study after the Lancet
study was red flagged.
Meanwhile, there was another
study in NEJM that also cast doubts
on the use of HCQ. The study on 821
people had limitations though as
most participants could not be test-
ed using RT-PCR method. In an edi-
torial in NEJM, Myron S Cohen, an
American physician scientist, noted:
“Some observational studies have
suggested benefits of hydroxy-
chloroquine for the treatment of
Covid-19, whereas other treatment
reports have described mixed
results.”
Cohen further noted: “Drugs for
the prevention of infections must
have an excellent safety profile.
When hydroxychloroquine was ini-
tially promoted as a possible solu-
tion to SARS-CoV-2 infection, the
safety of the drug was emphasised.
Under closer scrutiny, however, the
potential for cardiac toxic effects
and overall adverse outcomes have
been emphasised, especially in per-
sons with underlying coexisting
conditions that increase the risk of
severe Covid-19.”
India, meanwhile, has stood by
studies conducted by the Indian
Council of Medical Research and
has recently even expanded the
use of HCQ. Whether India will
commission more studies to
assess the risks and benefits of this
drug is to be seen.
deviation.
Experts on climate science and
climate change, however, do not
agree with this approach and say
evening out trends for large hetero-
geneous geographical areas like
India will not give a correct picture.
“The scientific evidence simply
does not support the idea of any link
between drought and climate
change. The IPCC (the
Intergovernment Panel on Climate
Change) was right to express low
confidence in any global-scale
observed trend,” the GWPF said in a
study called Weather Extremes: Are
They Caused by Global Warming,
authored by Ralph B Alexander.
The impact of climate change on
the global environment has been
one of the biggest debates with
extreme political and activist posi-
tions being taken. While there has
been the birth of radical movements
like Extinction Rebellion, at the oth-
er end there are political leaders, like
United States President Donald
Trump and Brazilian President Jair
Bolsonaro, who have labelled cli-
mate change theory a hoax. This,
even as the Amazon forests in Brazil
COVID-19 UPDATES
ED headquarters was sealed for 48 hrs
after five employees, including a special
director rank officer, tested positive
Tamil Nadu caps charges for Covid-19
treatment in pvt hospitals at ~15,000 per day
Two Vistara pilots tested positive after
undergoing flight simulator training
IIT-Hyderabad have developed a Covid
test kit that will cost ~550 and can deliver
results within 20 minutes
Haryana Home Minister Anil Vij said
shopping malls and places of worship will
not reopen in Gurgaon and Faridabad
36-year-old staffer of the Multi
Commodity Exchange (MCX) died and
nine others tested positive for Covid-19
The impact of climate change on the environment has been one of the
biggest debates
and forests in Australia burnt for the
past one year to World Environment
Day on Friday.
The GWPF study cited two dif-
ferent drought indices during the
period 1910-2010 for India, a country
subject to parching summer heat fol-
lowed by drenching monsoon rain.
The two indices — the Palmer
Drought Severity Index (PDSI),
which represents both rainfall and
temperature, and the Standardized
Precipitation Index (SPI), which
relies on rainfall data only.
Negative values in the indices
denote drought and positive values
wetness. “While both indices are
useful, the SPI is better suited to
making comparisons between dif-
ferent regions. We see the SPI in
India shows no particular trend
towards either dryness or wetness
over the 100-year period, although
there are 20-year intervals exhibit-
ing one of the two conditions; show
negative values that denote drought
and positive values wetness,” said
the study.
The apparent trend of the PDSI
towards drought since 1990 is an
artefact of the index. “Similar records
for other countries around the globe
all show the same pattern – no dry-
ing of the planet as a whole over
more than 100 years,” it asserted.
Jagdish Krishnaswamy, senior
fellow, Suri Sehgal Centre for
Biodiversity and Conservation,
Ashoka Trust for Research in
Ecology and the Environment
India, for instance, has lot of hot
spots where intense rain has been
witnessed,” he added.
Krishnaswamy cites the exam-
ples of intense rain in Chennai in
2015 and Mumbai in 2005. If the
overall volume of rain remains the
same but there are days of intense
rain, that means there are days of
no rains or meteorological drought,
he argued.
On tropical cyclones, the GWPF
report quotes both the 2012 and 2013
studies of the IPCC that expressed
only “low” confidence that cyclone
activity was increasing over the long
term, and that global changes in
cyclone activity could be attributed
to any particular cause.
This assertion was repeated again
in the 2019 Special Report on the
Global Ocean and Cryosphere, in
which the IPCC said: “The lack of
confident climate change detection
for most tropical cyclone metrics
continues to limit confidence in both
future projections and in the attri-
bution of past changes and tropical
cyclone events.” The GWPF report
also said the frequency of tropical
cyclones overall was diminishing.

India now sixth

worst-hit by Covid;
crosses Italy tally
PRESS TRUST OF INDIA
ONGC Mangalore Petrochemicals Limited
New Delhi, 6 June I warn you: Delhi CM (A subsidiary of Mangalore Refinery and Petrochemicals Limited)

India went past Italy to

become the sixth worst-hit
nation by Covid-19, with the
country registering a record
single-day spike of 9,887 cases
which pushed the nationwide
tally to 236,657.
India’s death toll due to
Covid-19 rose to 6,642, with a
record increase of 294 deaths
in the last 24 hours till
Saturday 8 am.
The country has registered
over 9,000 cases for the third
day in a row.
India is now the sixth
worst-affected nation in
terms of coronavirus infec-
tion cases after the US, Brazil,
Russia, Spain and the UK,
according to Johns Hopkins
University data.
The number of active
Covid-19 cases stands at
115,942 in the country. A total
of 114,073 people have recov-
ered so far, with 4,611 Covid-
19 patients having been
cured in the last 24 hours,
the Union Health Ministry
said. “Thus, around 48.20
per cent patients have recov-
ered so far," a senior health
ministry official said. The
total confirmed cases also
include foreigners.
The health ministry said
cumulatively 45,24,317 sam-
ples have been tested so far
with 137,938 samples tested in
the last 24 hours.
Of the total 6,642 fatalities,
to private hospitals CIN:U40107KA2006GOI041258
Mangalore Special Economic Zone, Permude, Mangaluru - 574509
Delhi Chief Minister Arvind website: www.ompl.co.in
Kejriwal on Saturday Phone: +91-824 2872075 Fax: +91-824 2872004
warned of strong action
against some private
hospitals allegedly refusing
STATEMENT OF STANDALONE FINANCIAL RESULTS FOR
admission to Covid-19 THE HALF YEAR ENDED 31ST MARCH 2020
patients and engaging in Corresponding Year to Date Previous
Sl. Half year ended,
Particulars half year ended figures ended, year ended,
“black-marketing” of beds, No. March 31,2020
March 31,2019 March 31,2020 March 31,2019
and said his government is (` In Crore) (` In Crore) (` In Crore) (` In Crore)
going to issue an order Unaudited Unaudited Audited Audited
stating that hospitals 1 Total Income from Operations 2,890 4,765 4,954 8,567
cannot deny treatment to Net Profit / (Loss) for the period
such people. Meanwhile, a 2 (before Tax and Exceptional and / or (1,013) 533 (1,512) 74
Extraordinary items)
five-member panel Net Profit / (Loss) for the period
constituted by the 3 before tax (after Exceptional and / or (1,013) 533 (1,512) 74
government has suggested Extraordinary items)
that the health Net Profit / (Loss) for the period after
infrastructure of the city 4 tax (after Exceptional and / or (902) 358 (1,400) 23
should be used only for Extraordinary items)
treating residents of the Total Comprehensive income/(loss) for
the period [Comprising Profit / (Loss)
capital, sources said. An 5 (902) 356 (1,401) 21
for the period (after tax) and Other
official said that a Cabinet Comprehensive Income (after tax)]
meeting will be held on Paid-up equity share capital
2,544 2,128 2,544 2,128
6 (Face Value of ` 10/- each)
Sunday when a final
decision on the report is 7 Other Equity - - (1,960) (1,494)
expected to be taken. PTI 8 Net worth 585 633 585 633
9 Paid up Debt Capital / Outstanding Debt - 2,000 - 2,000
10 Debt - Equity Ratio 7.70 5.94 7.70 5.94
Maharashtra tops the tally Earnings Per Share (of Rs. 10/- each)
with 2,849 deaths, followed by 11 (for continuing and discontinued
operations) - 1) Basic: (3.68) 1.68 (5.71) 0.11
Gujarat with 1,190 deaths,
2) Diluted: (3.68) 2.18 (5.71) 0.11
Delhi with 708, Madhya
12 Debenture Redemption Reserve - 22.89 - -
Pradesh with 384, West Bengal
13 Debt Service Coverage Ratio (1.36) 0.85 (0.34) 0.46
with 366, Uttar Pradesh with
257, Tamil Nadu with 232, 14 Interest Service Coverage Ratio (2.97) 2.83 (1.99) 1.13
Rajasthan with 218, Telangana Note: a) The above is an extract of the detailed format of half yearly nancial results led with the Stock Exchange under Regulation 52
with 113 and Andhra Pradesh of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The full format of the half yearly nancial results
are available on the website of the Stock Exchange (www.bseindia.com) and the company's website: www.ompl.co.in
with 73 deaths.
b) For the items referred in sub-clauses (a), (b), (d) and (e) of the Regulation 52 (4) of the SEBI (Listing Obligations and Disclosure
The death toll reached Requirements) Regulations, 2015, the pertinent disclosures have been made to the Bombay Stock Exchange Limited and can be
57 in Karnataka and 48 accessed on www.bseindia.com. By order of the Board
in Punjab. M. Venkatesh
New Delhi Director
June 5, 2020 DIN : 07025342