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00 14 PAGES

US STARTS SHIPPING
COVID VACCINE
Three trucks carrying the first shipments of Pfizer
Inc’s covid-19 vaccine left a factory in Michigan early
Sunday, kicking off a historic project to stop a
surging pandemic that is claiming more than 2,400
lives a day in the US. The shipments have set in motion
MONDAY, DECEMBER 14, 2020 the biggest vaccination effort in American history.
LIVEMINT.COM

More corona shots Solar module imports to face In pandemic’s

40% customs duty, cells 25%
to be ready by Aug Utpal Bhaskar ules and 25% on solar cells as nomic response to the violent
shadow:
Increased supply is expected to pull down prices of covid jabs
utpal.b@livemint.com
NEW DELHI
part of the Atmanirbhar Bharat
or self-reliant India strategy,
Singh said in an interview. The
face-off with China along the
Ladakh border. Along with lev-
eraging its growing green
Budget 2021
I
ndia plans to impose new tar- customs duty will replace a 15% energy market to boost manu-

W
m MINT GRAPHITI iffs on imports of solar cells and safeguard duty that is being facturing, India is looking to ith mass vacci- are raised manifold by the
Leroy Leo modules from 1 April 2022, imposed on imports from play a larger role in global sup- nations begin- need to support liveli-
leroy.d@livemint.com
NEW DELHI
IN THE PIPELINE power and renewable energy
minister Raj Kumar Singh said.
China and Malaysia.
Such a move will make solar
ply chains.
“Earlier we said it will be
ning in some
parts of the world, we are
hoods, alleviate distress
and boost demand.
Apart from frontrunners Serum Institute’s Covishield and Bharat
Biotech’s Covaxin, four covid jabs are likely to roll out in Mar-Aug.
The finance ministry will cells and modules imported imposed from next year. From now witnessing the begin- Not since 1979-80 has

A
second crop of issue an order to impose a basic from China expensive and is ning of what will hopefully the Indian economy con-
Developer(s) Vaccine Benefit Challenge Potential
covid-19 vaccines, /Type launch customs duty of 40% on mod- being seen as part of an eco- TURN TO PAGE 8 be the end of this devastat- tracted for the full year.
including Zydus Quick to ing pandemic. Given the size, complexity
Lack of pre- March
Cadila’s ZyCoV-D, Zydus Cadila ZyCoV-D adapt to virus clinical data It is at this hopeful and global linkages of the
mutations
Russia’s Sputnik V, moment that we are kick- economy today, past play-
Biological E’s protein subunit Dr Reddy's/ Safety profile No clarity ing off Mint’s books will be
Gamaleya/ Sputnik V is largely March/April
shots and Gennova Biopharma- on data comprehensive poor guides for
RDIF known
ceutical’s mRNA jabs, are likely
to be ready between March and Biological E/ Protein
Baylor College subunit
Safe,
traditional
Takes time to May/June
manufacture
LIC books Eight top banks see coverage of the
2021 Union
finance minister
Nirmala Sithara-
August, and the increased sup- of Medicine technology
record profit Budget. We are man, who’ll
ply is expected to drive down
prices, experts said.
These vaccines will follow
Gennova
Biopharma mRNA
Quick to
manufacture
New tech;
safety needs July/August
to be studied in Apr-Nov wilful defaults surge calling it Road to
Recovery.
Over the next
need to chart her
own course,
under the
the frontrunners in India— mRNA: Messenger ribonucleic acid; Source: Company seven weeks in watchful gaze of
Serum Institute of India’s Cov- RDIF: Russian Direct Investment Fund disclosures, experts Anirudh Laskar Shayan Ghosh bureau TransUnion Cibil. the run-up to history and
SARVESH KUMAR SHARMA/MINT
ishield and Bharat Biotech anirudh.l@livemint.com shayan.g@livemint.com These banks—State Bank of the Union Bud- inflation.
International Ltd’s Covaxin— panel comprising scientists vaccines are expected to be MUMBAI MUMBAI India, Punjab National Bank, get, we will Our coverage
which are expected be clears the vaccines. available as early as March or Bank of Baroda, Bank of India, bring you offer- will devote spe-

L E
launched as early as next Among the vaccines that will April, if clinical trials are suc- ife Insurance Corp. of ight of India’s biggest Union Bank of India, ICICI ings across plat- cial attention to
month if they can convince an follow the first two are Zydus’s cessful and regulatory proc- India (LIC) has booked its banks have seen a signifi- Bank, HDFC Bank and Axis forms and for- a specific theme
independent vaccine review shot, which has completed its esses are completed smoothly, highest ever profit of cant jump in wilful Bank—account for 75% of all mats—coverage, commen- each week. At 7pm every
panel about the efficacy and second phase of trials and will company officials indicated. ₹25,908 crore from selling defaults in the six months to loans reported as wilful defaults tary, infographics and Monday, starting today, we
safety of the shots. Drugs Con- enter the final stage soon; and However, Biological E’s and stocks in the eight months September, with such loans ris- as of 30 September. special features in print; will organize a live panel
troller General of India V.G. the Sputnik V vaccine, which is Gennova’s shots may take ended 30 November, three ing by over ₹37,000 crore to In the same period last year, the augmented with interac- on the week’s theme, fea-
Somani will issue an emer- conducting a phase 2 and 3 ₹1.5 trillion, shows data on suit- tives, live events, video and turing top experts. This
gency use licence once the bridging study in India. Both TURN TO PAGE 6 TURN TO PAGE 6 filed accounts from credit TURN TO PAGE 8 audio, on www.live- week, we are focusing on
mint.com. the policy of atmanirbhar
DON’T MISS India’s budget-making is
a balancing act at the con-
(self-reliance) and indus-
trial revival. Scan the QR
AUTO SUSTAINS PACE OF HIRING DOORDASH SETS PRECEDENT GOVT SEEKS WAYS TO EASE JAMS ONLINE GROCERY SALES SOAR GROWTH KEY AT L&T INFOTECH fluence of impossibly com- code to register for this
+ The automotive industry continues to DoorDash’s spectacular listing should Startups could get to try out novel transport More people in India bought goods of L &T Infotech stock’s future will hinge on peting demands at the best evening’s event.
sustain its pace of hiring at the trainee have a positive effect on valuations of models under so-called regulatory sandboxes daily use online during this festive how fast the company can increase its of times. Under current You can watch it live on
level even after the 40-day festive Indian food delivery firms like Zomato as the Centre bets on innovation in mobility to season than in the previous year, market earnings, given that its valuations are circumstances, the stakes www.livemint.com at 7pm.
season, said industry executives. >P3 and sets a benchmark for IPOs. >P6 ease urban congestion. >P14 researcher Nielsen said in a note. >P5 already pricey. >P4

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 02 MONDAY, 14 DECEMBER 2020
HYDERABAD
PLAIN
FACTS

How caste can give way to class

Caste has long dominated politics. Now, a rising middle class and increasing inequality within caste groups is paving the way for a class-based fault line
Rahul Verma &
Ankita Barthwal
NEW DELHI

O
ne cliché looms
large in every
election cam-
paign in India
that caste poli-
tics may finally give way to class
politics. However, as counting
begins on the day of the verdict,
caste subsumes every other fac-
tor, even in serious analyses of
election results.
In the recent Bihar Assembly
elections, Tejashwi Yadav’s
jobs plank, couched in the lan-
guage of economic justice,
came across as the dawn of class
politics. In post-election analy-
ses, this factor disappeared
entirely. Does caste continue to
rule Indian politics as always?
Or is there a new class con-
sciousness emerging? A read-
ing of the tea leaves suggests
the latter. Three key factors
seem to have raised the salience
of class in India’s polity today.
Rising inequality in the coun-
try, widened by the pandemic,
is the first and most immediate
factor. The second is the emer-
gence of a new aspirational
class with its own values and
expectations of the state. The
final factor is the fragmentation A man rides a two-wheeler past a giant mural in Mumbai. HT
of old caste coalitions and the
interplay of caste and class in m MINT GRAPHITI
recreating caste coalitions and divide in the country today. emerging. However, it is worth Chart 1 Chart 2

political affiliations. The shifts in caste-based loyal- keeping in mind that not every- More than 50% Indians 'Independence' as a trait has become
The pandemic has widened ties that we see today are also thing has changed. That limits
the job market divide and ine- linked fundamentally to class the scope of class-based politics.
say they are middle class more and more desirable over the years
Response (as a % of respondents) to the question: ‘In your opinion, % of respondents who saw 'independence' as an important quality in children
quality is expected to remain differences. Economic expansion has compared to others, the household you live in belongs to which class?’
high. This is likely to pit two The fragmentation of old swollen the ranks of the middle
large classes against each other caste-based umbrella coali- class. Yet, this middle class only
—middle class Indians, includ- tions and the rising salience of represents the top deciles of 25 56
ing the aspirational neo middle mobilization along the lines of India’s income distribution, Lower class 67
Poor class
+ class, and the poor. India has individual sub-castes are in a and poverty, while diminished, 7
been a poor country for long. way shaped by material inter- hasn’t shown any sign of disap-
However, after three decades of ests and income differences. In pearing so far. 37
rapid economic growth, the the post-Mandal era, caste- Thus, the emergence of new
middle class has bulged and the based politics were along the class-based politics is unlikely
ranks of the poor have shrunk. axes of broad categories such as to entirely displace the conven- 55
In the 2019 Dalits and other tional axes of politics in India. 2001 90
Middle class
post-poll survey The change in the backward classes No party is going to ignore 1995 2006
by Lokniti, more perception of the (OBCs). However, caste. However, it is likely that 30
5
than 50% respon- state is driven by within-group ine- old caste-based coalitions and Upper class 1990 2012
dents considered individualism in quality in these configurations will give way to
themselves mid-
society and self- social groups are new ones, with class interests 8 No response
dle class and 32% extraordinarily providing the common glue.
considered identification as high, research Similarly, no party is likely to
The question was asked to 24,235 respondents. The question asked was: ‘Is independence an important child quality?’

themselves as middle class shows (see chart 4). turn its back on the welfare Chart 3
lower to poor Political parties state. So the real contest would India's middle class is more optimistic about the future
class. Clearly, two have already be on the different welfare % of respondents across classes Non-middle class Self-reported middle class
sizable groups have formed, begun capitalizing on these dif- models political parties can
with differing and sometimes ferences: economic aspirations offer. The Bihar elections were 66 72
Believe their children will be better off
opposing interests (see chart 1). now take centre stage across the a prime example. The two main
The economic crisis has board. The BJP has been trying alliances promised jobs, but Report social status improvement in last generation 57 65
pushed the government to leg- to widen the wedge between while the opposition alliance
Believe India is progressing 58 64
islate relatively unpopular the lower OBCs and upper promised jobs by filling gov-
reforms on labour and farm OBCs for many years now, argu- ernment vacancies, the Believe India’s economic situation is improving 53 64
laws to attract new invest- ing that it is the upper OBCs National Democratic Alliance
Report that household economic situation is improving 48 62
ments. The upper middle class who have been the chief benefi- promised jobs through private
sees these reforms as long- ciaries of quotas. The BJP’s businesses.
A total of 68,516 respondents were interviewed during Jan-May 2014 as part of a national survey, jointly undertaken by the Lok Foundation and CMIE.
pending measures that will meteoric rise under Prime Min- The final limits on class-
modernize the economy. The ister Narendra Modi is in large based politics comes from poli-
rest view them with suspicion. part because of its ability to tics that can transcend class Chart 4 Chart 5

The disruption of the old order exploit such intra-caste cleava- through more potent overarch- Inequality within caste groups is greater Economic concerns remain
helps sharpen the divide ges (bit.ly/3oH5XBB). This is not ing narratives. The 2019 Lok than inequality between them important for Indian voters
between the two groups. This easy to sustain in the long run as Sabha elections are a case in Monthly per capita expenditure of different jatis (sub-castes) in Bihar (in ) Response (as a % of respondents) to the question: ‘What will be the most
sets the stage for confronta- the party must also find a bal- point. In the year before the important issue for you while voting in the 2019 Lok Sabha elections?’
tional class politics. ance between the elections, the nar-
Further, the self-identifica- competing inter- No party is going rative of economic Chamar 635 0 5 10 15 20 25 30
SC
tion as middle class has meant ests of traditional to ignore caste stagnation and Dobha/Dobh 625 Unemployment
that expectations of the state middle classes but it’s likely old rural distress Dom 663
Development
have begun to change, with the and the neo-mid- gained traction Dushad 602
configurations Price rise
state being seen as an enabler dle classes. (see chart 5). How- Musahar 560
rather than as a provider. Even The interplay
will give way to ever, post-Bala- Pasi 640 Poverty
the Bharatiya Janata Party’s of caste and class new ones based kot, national secu- Sardar 669 Other economy-related issues
(BJP’s) rise can be linked to the in India is of on class interests rity became a big- All SC groups 600
reshaping of such expectations, c o u r s e not ger factor and Adivasi 589 Corruption
ST
as has been argued earlier entirely new. voters rated the All ST groups 580 Governance
(bit.ly/37UiR8x). Both B.R. Ambedkar and Ram government much more OBC Dhanuk 592 Other issues
This changing perception of Manohar Lohia engaged with favourably even on economy- Koeri 575
No response
the state is also driven by questions around class. How- related issues. It was as if the Kurmi 640
greater individualism in soci- ever, both recognized that Balakot missile strike cast a new Sheshabadi 649 Multiple related responses have been clubbed together in some cases.

ety. The World Values Survey caste, more than class, will be shine on everything the gov- Yadav 603
data for India shows a steady the central axis of political ernment did (see chart 6). All OBC groups 630 Chart 6
increase in the desirability of mobilization in India. Emotive issues are unlikely EBC Keuta 577 Nationalistic solidarity in early 2019 diluted
independence as a character They recognized that the to disappear from the political Mallah 616
negative perceptions on economy
trait (see chart 2). objective conditions in newly- space. Economics will not Nat 654
% of respondents who agreed with the statements below Apr 2019 May 2018
When such shifts take place, free India were not ripe for replace social and cultural All EBC groups 613
traditional identity gives way to Marxist class politics. A country agendas even as issues relating Muslims Ansari 641
the more mobile class identity with very low levels of industri- to jobs and incomes gain Other Muslims 662 Income insufficient to meet needs 51 67
and creates the ground for new alization did not offer much greater salience. The politics of All Muslim groups 658 Difficult to find a job 47 57
politics that responds to these scope for class politics to today and tomorrow will have Forward Brahmin 701
needs. In a 2017 essay, political emerge, given the limited size to contend with both socio-cul- castes Rajput 687 Dissatisfied with NDA government 35 47
scientist Devesh Kapur and of organized labour. Besides, tural and economic anxieties All forward caste groups 664 Failure of 'Achhe din' 52 52
co-authors showed how India’s most of India’s population lived even as they contend with the 400
rising aspirational class has a in poverty and depended on twin divides of caste and class. Study based on responses from 8,973 respondents in seven districts of Bihar. SC: scheduled castes; Data from 2019 Lokniti-CSDS pre-poll survey and 2018 Mood of the Nation survey
completely distinctive world- the state for their well-being. The authors are based at the ST: scheduled tribes; OBC: other backward classes; EBC: extremely backward classes.

view (see chart 3). Since then, the conditions Centre for Policy Research Sources: Lokniti-CSDS pre-poll and post-poll surveys (2019); World Values Survey data (1990-2012); ‘The Importance of Being Middle Class In
These differences lie at the have changed and, hence, a new (CPR), New Delhi. India’ by Devesh Kapur, Neelanjan Sircar and Milan Vaishnav; ‘Jati Inequality In Rural Bihar’ by Shareen Joshi, Nishtha Kochhar and Vijayendra Rao.
heart of the emerging class class-based politics seems to be feedback@livemint.com
AHMED RAZA KHAN/MINT

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Auto hiring sustains pace
even after festive season
The momentum in trainee-level hiring continues across car firms, vendors
Amit Panday
amit.p@livemint.com
MUMBAI
T
he automotive indus-
try, which contrib-
utes nearly half of
India’s gross domes-
tic product (GDP)
accounted for by the manufac-
turing sector and provides
direct and indirect employment
to about 35 million people, con-
tinues to sustain its recruitment
drive at the trainee level even
after the 40-day festive season,
said several industry executives.
Vehicle and auto component
manufacturers continue to look
out for hiring skilled and semi-
skilled diploma holders from
industrial training institutes
(ITIs), polytechnics, and even
senior-secondary school pass-
outs and upskill the trainees to
prepare for the production
Viatris plant on sale
amid restructuring
Leroy Leo
leroy.l@livemint.com
NEW DELHI
V
iatris Inc., the entity
formed by the merger of
Mylan and Pfizer’s arm
Upjohn, aims to sell its active
pharmaceutical ingredient
(API)-manufacturing plant at
Taloja, near Raigad in Maha-
+ rashtra, and is looking for buy-
ers. “Viatris today shared with
employees its plans to divest its
Unit 11 API facility in Taloja,
Growth is
not just about digging in the
heels. It’s also about pivoting
in tough times.
Growth is...On.
Follow us:
mint.live
livemint
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TOP ST RIES
Suzuki has hired over 460 staff
from ITI Berhampur alone. MINT
schedules set for 2021.
The momentum in trainee-
level hiring continues across all
leading car and two-wheeler
companies and their vendor
ecosystem, even as people are
migrating back to manufactur-
ing belts from their native pla-
ces to resume their jobs, said a
senior executive who serves as
plant head at one of India’s larg-
est two-wheeler companies
said, requesting anonymity.
The recruitments were pri-
India. The company has initi-
ated a search for a potential
buyer,” a company spokesper-
son said on Saturday.
The Taloja plant, officially
called Unit 11, is one of two API
facilities in India that would be
impacted in a global restructur-
ing of the company following
its amalgamation last month
and is part of plans to reduce its
cost by at least $1 billion by the
end of 2024 or sooner, accord-
ing to the company statement
on Saturday.
livemint live_mint
www.livemint.com
MONDAY, 14 DECEMBER 2020
marily aimed at filling the
vacant positions left behind by
workers who had gone to their
native places, while vehicle
manufacturers needed man-
power to ramp up production to
cater to the pent up demand as
the markets gradually opened.
Hiring continued to increase
sequentially through the Sep-
tember quarter.
Mahindra and Mahindra Ltd
recently said it is expanding its
tractor production unit at Zah-
eerabad (Telangana) to build
the K2 series of tractors and will
double the headcount by 2024.
The plant employs about 1,500
workers. Last week, Suzuki
hired more than 460 students
from ITI Berhampur alone.
“In the past few months the
industry has witnessed a steady
growth, which is a clear sign of
revival of this sector. The auto-
motive ecosystem is an impor-
Download
App Now:
03 MONDAY, 14 DECEMBER 2020
HYDERABAD 03
tant pillar in building the econ-
omy. With this ecosystem stabi-
lizing, the process of creating
new jobs at the entry level has
begun again, thus pointing at
economic and industry recov-
ery,” said Sunil Bohra, executive
director and group chief finan-
cial officer, Minda Industries
Ltd.
“The automobile and manu-
facturing sectors witnessed a
significant increase in hiring of
apprentices in the months of
June -July as compared to pre-
covid-19 period (January- Feb-
ruary). Between July-October,
demand for apprentices
increased by 62%. This positive
growth in hiring of apprentices
in automobile and manufactur-
ing sectors is continuing to
grow by 15-20% during Novem-
ber and December,” said Sumit
Kumar, vice president, NETAP
at TeamLease.
 04 MONDAY, 14 DECEMBER 2020
HYDERABAD

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%)

46,099.01 2.26 13,513.85 1.93 11,171.40 1.75 31,928.80 1.56 13,647.90 1.88 17,521.32 0.76 17,552.58 1.36
1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%)

5.75 18.65 6.00 17.88 7.87 18.26 10.56 17.00 6.58 17.76 11.86 19.52 14.85 20.57
6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%)

37.45 14.07 36.48 13.46 37.29 15.93 28.91 15.71 35.37 13.73 40.39 20.05 48.37 33.51

m MINT SHORTS
IPO mania stokes 111% rally
L&T Infotech’s good show has led to
in American stock market
An interesting thing keeps happening in the Amer-
ican stock market. Lately, when ownership of
young companies passes from the institutions who
rich valuations, but growth is key
nurtured them into the much broader arms of the
investing public, their valuations double. It hap- Clifford Alvares depends largely on new opportunities quarie Capital Securities (India) Pvt.
pens fast. After its price was set with professional clifford.a@livemint.com such as cloud. Ltd in a client note. Sound metrics
fund managers the night before, food-delivery ser- The management has said that its However, structural tailwinds in L&T Infotech’s focus on top companies in the US is delivering the goods as

L
vice DoorDash Inc. surged 86% in its public debut &T Infotech Ltd (LTI) is cloud business is likely to be a $1 billion
place for the IT industry augurs well revenue and margin growth have been sharp.
Wednesday. Software firm C3.ai Inc. jumped 120%. among the most expensive opportunity from the current $150- for companies such as LTI. “They are Revenue (in ₹ crore) Ebitda margin (in %) (Right-hand scale)
Airbnb Inc. more than doubled a day later, the 8 of top-10 stocks in the IT services sector 200 million and sees this segment as the least affected by the pandemic, 16,000 23
firms add
home-rental company seeing its value surpass 1.53 tn in m-
and is trying hard to prop up the growth engine of the future. LTI’s
with a strong set of clients. LTI’s expo- 21.5
$100 billion. The 2020 return in an index of IPO cap; its growth rates and keep large deal win in West Asia from the sure to stressed segments during the
12,000 21
stocks? 111%. While initial offerings are often occa- Reliance investors interested. The company Mubadala group is worth about $205 pandemic is minimal and with the
sions for appreciation, this year has been different, Industries, plans to bolster its cloud business million. dedicated business for cloud they 11,895
18.9
Hindustan
with first-day rallies almost three times bigger than Unilever top
towards this end. It should continue to 8,000 19
the average of the last 40 years. BLOOMBERG gainers also announced new FUTURE PROSPECTS clock good revenue 6,501
bit.ly/37c6c1G
deal wins recently. growth,” said Amit 4,000 17
However, the LTI sees cloud biz STRUCTURAL WITH valuations Chandra, analyst,
stock’s valuations are segment as the tailwinds in place for already pricey, stock’s HDFC Securities.
Covid resilience growth engine of the the IT industry augurs future will hinge on
around 27.3 times one- future; says it’s likely well for companies Higher utilization
0
FY17 FY18 FY19 FY20 FY21*
15
how fast LTI can
Stocks in the most covid resilient markets are year forward price- to grow to $1 billion such as L&T Infotech increase its earnings levels, higher offshor- *FY21 revenues are half-yearly annualized Source : Bloomberg
outperforming those at the bottom.
earnings multiple, at ing and lower sub-con-
Top ranked Lowest ranked (in %) SATISH KUMAR/MINT
par with market leader tracting expenses are
New Zealand 12.4 Tata Consultancy Services Ltd. A year LTI also has a large deal pipeline of some factors that could drive margin has at present to 40 delivery centres in the new business unit,” said analysts at
Japan 3.5 ago, LTI valuations were much lower about $1.9 billion, which is a 62% growth. Some of this is being reflected the next several quarters. Morgan Stanley India in a client note.
Taiwan 18.9 around 16 times earnings. increase year-on-year. However, the in its financials. Ebit margins have However, its margins’ expansion The stock’s future will hinge on how
Korea 26.2 Part of the reason for an increase in deal wins have been slow over the last increased from 15.5% in the Septem- could slow in the second half. “We are fast the company can increase its earn-
US 13.5 valuations is that the company was few quarters. “LTI continues to note ber quarter last year to 19.9% in building in lower margins in 2HFY21 ings, given that valuations are already
Argentina 28.8 least disrupted by the pandemic. LTI’s longer than usual conversion cycle Q2FY21. at 18.6% vs 19.9% in 2QFY21, given the pricey. “LTI is the TCS among tier II
-12.5 Czech Republic revenue growth of about 15% for the from a pipeline into wins, given virtual The offshore-onshore mix is tilting rollout of wage hikes effective from IT companies, and its rich valuations
-7.0 Belgium past five years has also been enthusing sales closure and slower contract sign- in favour of the former. LTI plans to Q4, low margin pass-through reve- should be supported well,” said Chan-
Peru 1.3 the Street. Continuation of this growth ing process,” said analysts at Mac- expand from the 16 delivery centres it nues coming in, and investments in dra.
Note: 2020 stock performance as of 10 December; Bloomberg
Covid Resilience Ranking as of 23 November.
Source: Bloomberg

SATISH KUMAR/MINT

Curbing covid-19 helped

boost these markets in ‘20
Stock markets in places at the forefront of contain-
ing the coronavirus are outperforming this year.
But investors are starting to look beyond their suc-
+ cess in suppressing the pandemic going forward.
Shares in New Zealand, Japan, Taiwan, South
Korea and Finland—the top five spots in Bloom-
berg’s Covid Resilience Ranking—have climbed
Steer clear, when unclear is Rising loan collections bring relief
UPL saga’s moral for investors but risks still linger in securitization
Clifford Alvares Aparna Iyer
securities were hit after the Reserve with shortage of capital, securitiz-
clifford.a@livemint.com Stock struck aparna.i@livemint.com Bank of India (RBI) had asked len- ing loan pools was a quick way to
The UPL stock has undershot the broader Nifty 500 index by a ders to provide a loan moratorium free up capital, especially when

U I
15% on average, compared with just 2% for the bot- PL Ltd’s whistleblower mile this past year, and may see pressure in the months ahead. ndia’s loan securitization market for six months. banks were willing buyers.
tom five—Mexico, Argentina, Peru, Belgium and saga is making investors UPL Ltd Nifty 500 index is slowly buzzing with activity, However, the performance has However, the pandemic has
120
the Czech Republic. Top-ranked New Zealand has a bit wary about its 115.93 encouraged by the broad-based been encouraging after the morato- changed everything. The balance
seen its benchmark rise 12%, while shares in bot- prospects. The stock of the 110 improvement in loan collections by rium, which ended in August, said sheets of NBFCs have weakened,
tom-ranked Mexico have flatlined. BLOOMBERG chemicals’ company has 100 lenders. analysts. “After payment moratori- with some seeing large contrac-
slipped about 12% in the last 90 Most banks and even some non- ums ended in August, tions. Measures by the
two days after The Economic 80 banking financial companies loan collection rates The biggest government to
China inflows spurs call for Times reported allegations 70 77.53
(NBFCs) have reported a marked for our rated Indian issuers of encourage invest-
based on a whistleblower improvement in repayments after auto loan ABS (asset- ments have yielded
strongest yuan since 1993 account. The stock has not 60
the economy steadily unlocked backed securities) and
securitized loan
50
pools are NBFCs limited results.
The unrelenting pace of inflows heading for made much of a recovery even from June. Delinquency rates, MSME (micro, small It is not a straight
but their balance
China’s bonds and stocks has one yuan bull pre- after the management issued a 40 especially those of home and auto and medium-sized and quick road to
dicting the currency could strengthen to a level not clarification.
11 Dec 2019 11 Dec 2020
loans, have dipped. This encour- enterprise) loan ABS sheets have recovery. For securiti-
Base value taken as 100
seen in nearly three decades. A “flood” of foreign Some brokers such as CLSA
Source : Bloomberg
ages investors to buy securitized improved markedly in weakened lately zation, the road is far
cash will chase yuan-denominated assets in 2021 reiterated their buy rating after SATISH KUMAR/MINT loan pools, one of the key avenues September and Octo- more challenging.
because they’ll offer far better yield than the rest of the management’s comments, ket capitalization in the past cant improvement in the first for NBFCs to raise capital. ber, though they Delinquencies are
the world, according to Liu Li-gang, chief China but the stock has stayed weak. one year. half of FY21. In 2HFY21, the Securitization is a process remained below pre-coronavirus far from dropping. Delinquencies
economist at Citigroup Inc. He predicts the cur- “Frequent governance However, smaller agro- company aims to repay $700 through which multiple loans are levels,” analysts at Moody’s Inves- could rise for loan pools of small
rency could rally 10% to 6 per dollar—or even issues for UPL, the third time chemicals player PI Industries million in debt, which would be bundled together and issued as a tors Service Ltd said a note. businesses, analysts said. These
more—by the end of next year. The yuan hasn’t within a year, are worrying. Ltd has been pulling ahead. a key thing to watch out for,” single security. The payout for the The biggest issuers of securitized loan pools had the highest propor-
been that strong since late 1993, just before China’s The UPL management has The company recently pipped said analysts at Motilal Oswal investor is directly linked to the col- loan pools are NBFCs and these len- tion of loans under moratorium as
unification of official and market exchange rates clarified its position on each UPL to become the largest agri- Financial Services Ltd in a cli- lections of the underlying loans. ders had been the key drivers of well. The stress has not reduced,
triggered a plunge in the currency. BLOOMBERG instance, though it seems to business company on the ent note. Repayments of these pooled loan growth in the past two years. Faced according to analysts. “MSME loans
provide less com- Indian bourses. Investor sentiment may also are not showing much improve-
fort to investors The company’s The one-year for- remain bogged because of low Stabilizing 300 Collection levels in % for small business loan pool ment. So those securities that have
for now,” said stock valuations ward valuation of cash-flow generation. “Recur- them as underlying will take a long
High spirits analysts at Kotak have dropped by PI Industries ring downgrades on consensus well Year of origination
time to perform,” said an analyst.
Gauge of the US consumer sentiment climbs Securitized loan 2018 2019
Institutional about 40% stands at 39 times estimates amid limited convic- 250 Meanwhile, large cash reserves
to second-highest level since March. pools of micro,
Equities in a cli- FY22 earnings tion on optimistic guidance led are offsetting the stress on these
110 against its small and medium
99.3
ent note. Inves- compared to the 9 forecasts, low free cash flow 200 securities. Stress will remain ele-
tors should “steer five-year average, times for UPL, generation, high effective lev-
Index of consumer sentiment enterprises have
100
seen steady vated for 6-12 months, said analysts
90
clear, when analysts point out according to data erage and a few other issues improvement and 150 at Moody’s.
81.4 unclear”, the from Bloomberg. have kept us cautious on the spikes due to large The outlook delinquencies are
80
report said. Another worry stock,” said Kotak analysts. prepayments. 101 not altogether sanguine and inves-
100
70 The governance factors have for UPL is its high debt levels. The performance of UPL, tors would prefer to restrain them-
96
weighed on the stock’s valua- “Debt remains a key concern as which has businesses in Latin 44 selves for some more time. The
50
120
Index of current conditions
tions, which have dropped by net debt increased by ₹1,780 America and Europe, has been securitization volume had plunged
110 115.5 about 40% against its five-year crore in the first half compared hit by the covid-19 pandemic, 37 80% in the first six months of FY21
100 average, analysts pointed out. to FY20. Overall, its balance but analysts see a second-half Source: Moody’s 0 from the year-ago period. There are
91.8 Investors Service Apr Collection months 2020 Oct
90 UPL lost about 26% of its mar- sheet has not shown a signifi- recovery in business. a lot of challenges to a quick revival.
SATISH KUMAR/MINT
80
70
31 Dec 2019 31 Dec 2020
Source: University of Michigen

SATISH KUMAR/MINT

Consumer sentiment rises NBCC’s order book needs better execution for the rally to sustain
in the US on vaccine news
A gauge of US consumer sentiment unexpectedly Ujjval Jauahri impressed on order book growth. growth in the fiscal second half to unsold inventory, sale of unused
increased in early December to the second-highest ujjval.j@livemint.com However, earnings growth in the
Earnings under pressure achieve the guidance. Analysts at floor space index (FSI) and pend-
level since March, amid prospects for a vaccine past few years has not been able to Profits have seen some rebound from lows, however, a pick-up in Antique Stock Broking say that ing payments from existing home
execution is key to drive revenue and earnings.

R
coming soon to tame the pandemic. The University ising infrastructure and
of Michigan’s preliminary sentiment index rose 4.5 construction activity have
points to 81.4, from a final November reading of been helping NBCC (India)
76.9, according to figures Friday that topped all Ltd’s order book growth. The
estimates in Bloomberg’s survey of economists. company has announced addi-
The median projection was 76. The gauge of cur- tions worth about ₹1,500 crore to
rent conditions rose to 91.8, the highest since its order book in October and
March, while a measure of expectations improved November, helping the stock
4.2 points to 74.7. Respondents’ outlook for the rebound more than 31% from its
economy in the next five years climbed in early lows in early November. The
December by the most since May 2011.BLOOMBERG growing order book bodes well, a
pick-up in execution holds the
For more reports and analysis key for the rally to sustain.
on the markets, follow our The company, which gets most
Mark to Market podcast with of its orders from the government
Pallavi Pengonda and Aparna on nomination basis under
Iyer on htsmartcast.com project management consultancy
(PMC) services, has always
keep pace and has been a key area
of concern.
Several redevelopment pro-
jects faced delays in clearances
and also encountered legal hur-
dles. Fund-raising through mone-
tization to support self-finance
generation projects, too, has not
been easy, given the economic
slowdown and weak real estate
prospects. Hence, with project
execution lagging, earnings
growth has also remained tepid.
The company saw an almost
80% drop in net profits during
FY20 and the first half of this year
has anyway been tough because of
the lockdown imposed to contain
the asking rate may be theoreti- buyers. The street thus should be
(in ₹ crore) (% change y-o-y) (Right-hand scale) cally possible for the works under watchful on progress on the same
8,000
Revenue Net profit Revenue Net profit
120
execution. However, with 60% in the current weak economic
labour availability, there is a big environment. Analysts said that
6,000 60 leap of faith. though work has started and
4,000 0 The challenges continue to NBCC awarded contracts worth
persist for self-revenue generat- ₹6,000 crore for this project, it is
2,000 -60
ing projects (half of ₹72,000 crore unclear how contracts can be
0 -120 order book at the end of Q2), awarded without finances firmly
FY19 FY20 FY21E
E- Estimates Source: Antique Stock Broking
where funding remains a concern. in shape.
The company has been in the Hence, despite the company
SATISH KUMAR/MINT
limelight for taking over develop- having awarded contracts worth
the covid-19 pandemic. The stock, year-on-year (y-o-y) during FY21, ment of the long-stalled Amrapali ₹11,500 crore for project execu-
thus, had fallen to record lows, could also have aided investor housing project in the national tion, there are limited earnings
before the recent increase. hopes in earnings revival. capital region. The project com- growth according to analysts. The
Meanwhile, the company’s gui- Analysts, however, are still not pletion would require ₹8,500 stock is trading at about 19.7 times
dance for achieving revenues of convinced on NBCC achieving crore worth of funding that is to FY22 earning estimates, and that
about ₹6,000 crore, a 15% growth this target as the asking rate is 29% be raised through selling of is not cheap either.

Mark to Market writers do not have positions in the companies they have discussed here

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X
 MONDAY, 14 DECEMBER 2020
HYDERABAD 05
TOP ST RIES TOP ST RIES
Online FMCG shopping
surges amid festive sales
Consumers moved beyond electronics and fashion to buy grocery online
Suneera Tandon
suneera.t@livemint.com
NEW DELHI

M The Most Comprehensive

ore people in India bought
goods of daily use online

Union Budget Coverage

during this festive season
than in the previous year, as
consumers warmed up to
buying more categories of products on LIVE PANELS | PODCASTS | EXPERT SPEAK | COLUMNS
e-commerce platforms, market researcher
Nielsen said in a research note.
The penetration of online shoppers who
bought fast-moving consumer goods LI V E PA NEL
(FMCG) products during this festive season
sales from 15 October to 13 November stood Monday, 14th Dec | 7:00-8:00 PM
at 20%, compared with 13.5% in 2019,

Atmanirbhar:
shows Nielsen’s research based on its
e-commerce consumer panel. This indi-
cated that consumers moved beyond elec-
tronics and fashion to buy groceries online.

Throwback
The value of FMCG bought online was
5% of the total e-commerce sales this festive The penetration of online shoppers who bought FMCG during this festive season sales
season, which is similar to last year’s levels. from 15 October to 13 November stood at 20%, compared with 13.5% in 2019. REUTERS
However, in terms of units sold, the FMCG

or Industrial Leap?
category was at 35% of all purchases made Staples and snacks saw growth during been enticed to shop online for the first
online, compared with 30% in 2019, led by covid, with 35.3% and 14% value contribu- time during the festive period in 2020, and
a surge in demand for personal care prod- tions respectively, while personal care sig- with shopper penetration remaining high
ucts, Nielsen said. nificantly gained during the festive period at almost 20% in the festive period for the
“Typically, we used to think that e-com- with 54% value contribution. year, an uptick from 14% in 2019, it indi- Moderator Panelists
merce big days or festivals sales are akin to Sales of personal care products shrank as cates that more consumers were persuaded
non-FMCG categories. However, very Indians moved to work from home and to shop online for FMCG,” Nielsen said in
quickly e-commerce recreated the offline instead bought staples and other essential its research note.
pattern with consumers and, hence, this goods online. Festive season sales marked At the peak of India’s lockdown, FMCG
led to a lot of stocking of shopper penetration as a per-
FMCG by consumers during QUICK SHIFT centage of total e-commerce
this time,” said Kunal Gupta, shopper base was at its peak of
head, consumer intelligence, IN terms of units STAPLES, with 35.3% PERSONAL care about 40%. The numbers have
Nielsen, South Asia. sold, FMCG made up value contribution, items made up 54.4% since shrunk as markets pro- Mitali Ajit Santosh Samiran Saon
35% of all online and snacks with 14%
Personal care categories led buys, compared with saw growth in buys
of overall FMCG sold
gressed towards normalcy. Mukherjee Ranade Pai Chakraborty Ray
online during the
the growth of FMCG this fes- 30% in 2019 online during covid festive season The shift and the entry of Fellow, ORF President & Chief Partner, Link Legal MD & Chief Senior fellow,
tive season, contributing new shoppers online has been Economist, Economist, India, ICRIER
54.4% in value of overall encouraging, according to Aditya Birla Group Citigroup
FMCG sold online during the period. Niel- the return of demand for skincare, creams companies. “The grocery segment (online),
sen’s e-commerce consumer panel sur- and other personal care goods. “Whether which was not as salient earlier, has been
veyed shopping bills of 160,000 internet this marks the comeback of personal care the focus of the year from a consumer per-
mint.live livemint
+ users in urban India. This panel found versus staples or not, we are yet to see,” spective,” said Sunil Kataria, chief execu- Register here : www.livemint.com
Internet users shopped online for catego- Gupta said. tive officer, India and Saarc, Godrej Con-
ries such as mobiles, appliances, electron- A lot of this was also led by new shoppers sumer Products Ltd (GCPL). E-commerce live_mint livemint
ics, fashion, and FMCG. coming online. “New FMCG shoppers have contributes 4% of the sales of GCPL.

Puma.com stays ‘Forever Faster’ with Salesforce

PUMA India is showing the Indian sports and activewear market exactly why “small is the new big”

W
hen PUMA
entered
India in
2006, they
were a late
entrant into a market where
their global competitors were
already top players. But by
2018, PUMA had sped past
them, growing to operate 375
owned stores and prowling
online through Puma.com.
Puma.com is the brand’s
largest online store. But what
made it so integral to the
PUMA ethos?
A NEW PLAYING FIELD
“In India, we are seeing a
growing focus on fitness,”
Jackson Fernandez, Head of
Ecommerce points out. “We
want to further encourage our
consumers down this fitness
journey by offering them the
right products.” PUMA’s con-
sumersarealsoadigitally-savvy
generation and increasingly
shop online. “Mobile traffic to
our site has been steadily
increasing,” says Fernandez.
“This means that ever y
decision we take has to be
mobile-first.”
THE ‘JUMPING CAT
GOES DIGITAL
The burgeoning mobile traf-
fic needed to be supported by
stable site infrastructure to
translate into conversions.
“Wequicklyrealisedthatwe
had to make enhancements to
the platform’s performance to
b e abl e to s c a le, ” s ay s
Fernandez. But offering a
delightfulshoppingexperience
onlinegoesbeyondonlyhaving
a fast and responsive site.
“Puma.com is our biggest store
and should reflect the true
essence of the brand,” he
explains. This means that the
site should offer a complete
assortment of all that the brand
has on offer. “With no retail
store agent to explain the tech-
nicalities of the product, help-
ing the consumer find the right
product for their needs
becomes an essential feature
of the site.”
Finally, Fernandez wanted
to improve consumer experi-
ence on the site by making
their entire journey more effi-
cient – from item selection to
cart checkout and post pur-
chase support.
PICKING UP SPEED AND
MOMENTUM
PUMA India deployed
Salesforce Commerce Cloud to
enhance the mobile shopping
experience for their
consumers.Withbest
practicesinmobileU
design, merchandising,
and technical architec-
t u r e b u i l t i n t o t h e consumer s are r unning smooth that dropouts have
solution, the brand could offer smoothly and visitors are reduced. We’ve been able to Technology
its customers an experience showntherightproductsbased sell more, and do it faster,” Solutions
that was seamless and efficient. on their needs. says Fernandez.
n Commerce Cloud
“On the new platform, it is fast Manysolutionsinthemarket Thebenefitsaren’trestricted provides a robust platform
and easy for customers to use todayallowbrandstooffersuch to the bottomline alone. With with inbuilt features to
filters, get results in consumer experi- the vast volumes of customer offer streamlined content
line with what they ences. So, what data now available, PUMA is for a user-friendly site
are looking for, add makes Commerce able to understand what con- n Best practices in UX
them to the cart, and Cloud different? sumers are buying and market design offer consumers a
seamless and efficient
pay with the right “The primary rea- more smartly to them. shopping experience
payment options,” son that Commerce Efficiency gains, in turn, are
explains Fernandez. Cloud is making us allowing the PUMA team to n A platform that efficiently
supports iterations and
Once the site was successful is that the focus on bettering product enhancements allows the
re-architected to platform is robust design, growing traffic and site to easily scale
deliver a smooth SALESFORCE and can scale,” optimising content.
customer experi- exclaimsFernandez.
ence, PUMA stepped up its “Today, when there is a LEAPING INTO THE
game to build efficiency into spike in traffic to the site, FUTURE
every stage of the process. we don’t even realise it. It’s The next step in the
“We’ve seen tremendous that seamless.” Salesforce and PUMA India The Results
improvement in the speed at journeyisgreatercollaboration n The site is more responsive
which we’ve been able to add PLAYING TO WIN to identify business needs and and loads 100% faster
new enhancements,” details Puma.comhas today become solve them together. “Puma. n Understanding a
Fernandez. “We can quickly a true reflection of the brand’s com is strategic to our growth consumer’s online purchase
and easily redesign product promiseofspeed.Thesiteloads and we want it to have a signifi- behaviour is allowing PUMA
to target its consumers
pages and make landing 100% faster. With a decrease in cant chunk of our overall busi- more accurately
pages responsive.
responsive ” webpage load time on both nesspie
nesspie,”Fernandezpointsout
Fernandezpointsout.
n Efficiency gains free-up
Puma.com now features mobile and desktop browsers, By delivering a speedy and teams to focus on product
more responsive landing pages the first eventful paint happens delightful consumer experi- design and website
and more accurate filters. at around three seconds. “Also, ence, PUMA India is showing improvements
Promotions to incentivise the purchase funnel is so that it is truly Forever Faster.’
We’ve seen
tremendous
improvement in
the speed at which
we’ve been able to add
new enhancements,
thanks to the stability
of the Salesforce
platform
Jackson Fernandez
Associate Director and Head of
eCommerce, PUMA India

To find out how

Salesforce brings
companies and
customer together,
scan the QR code
Created by Mint Brand Studio

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X
 06 MONDAY, 14 DECEMBER 2020
HYDERABAD TOP STORIES
TOP ST RIES
More covid
Stellar DoorDash listing MTAR Tech to file
vaccines in for ₹650 crore IPO
the pipeline
by August
sets stage for Zomato IPO Swaraj Singh Dhanjal
swaraj.d@livemint.com
MUMBAI

FROM PAGE 1
longer, considering that the
former has started phase 1 and 2
human trials last month while
Gennova received approval for
human trials only on Friday.
“Biological E and Gennova’s
M
TAR Technologies, a
Success of DoorDash may push Indian food delivery cos to list sooner, says an expert Hyderabad-based
precision engineering
company, is planning to file its
Pallavi Pengonda Financial puts it, “Amazon’s recent draft initial public offering
pallavi.p@livemint.com
Hungry for growth entry into India’s food delivery sector (IPO) papers soon, said two
MUMBAI Last year has been a high growth business for global online food needs to be keenly watched.” people aware of the develop-
delivery firms, which is one of the reasons investors are excited. To be sure, the pandemic has ment.

vaccines may potentially come in
June or August (respectively) if
the Centre expedites processes as
they did for Serum (Institute) and
Bharat (Biotech). They can also
save time if there is a vaccine
available (as standard of care), and
they are allowed to make an
immunogenicity comparison
with the existing vaccine with a
smaller cohort,” an executive
with a vaccine manufacturer said
on condition of anonymity.
The four vaccines differ from
the technology used by Bharat
Biotech and Serum Institute, as
well as between them.
Zydus Cadila claims its vac-
cine is using a DNA plasmid
platform, a relatively new tech-
nology that provides ease of
manufacturing with minimal
biosafety requirements.
“We are yet to complete com-
pilation of data on the prospec-
tive, randomized, adaptive, phase
I/II clinical study...Zydus plans to
publish the results in scientific
journals after the...study is com-
pleted,” a spokesperson for Zydus
Cadila told Mint in a statement.
For Sputnik V, originally devel-
oped by Russian Direct Invest-
ment Fund (RDIF) and Gamaleya
Research Centre with Dr Reddy’s
Laboratories conducting clinical
trials in India, there is a consensus
that while the jab is based on a
similar platform as that from
Serum Institute, there is a lack of
data on its efficacy.
A spokesperson from RDIF
said it expects the publication of
+ interim phase 3 data in a peer-
reviewed journal this month.
Read the full version of this
story on www.livemint.com
I
nvestors are on a high, with jab 186 accelerated growth in most internet The company, backed by
CY2019 GMV year-on-year growth rate (in %) How Google
sessions beginning in earnest in segments and valuations of tech Mathew Cyriac, the former
plans to help
the UK, and expected to gradu- companies are soaring. In fact, with
India private equity co-head of Investment banking arms of
ally spread worldwide soon. One 125 Airbnb Inc. saw a listing gain of over information Blackstone, develops and JM Financial and IIFL are
clear sign of the euphoria is the 108 100% last week. Against this back- on Covid-19 manufactures components advising MTAR on the IPO. MINT
massive listing gains of recent IPOs in 84 drop, it’s not surprising that shares of vaccines and equipment for the
bit.ly/3qRy96G
the US. DoorDash Inc., an American 67 Info Edge (India) Ltd, which owns a defence, aerospace and said.
online food delivery services firm, 39 20.8% stake in Zomato, hit a new nuclear energy sectors. MTAR MTAR currently operates
had an extraordinary debut, with a 29 52-week high on Friday on NSE. The was incorporated in 1970. out of seven manufacturing
17
listing gain of over 80% from its issue stock is now 33% ahead of the aver- “They will file the draft red facilities including, an export
price. The company, which posted a DoorDash *Zomato Delivery Just Eat age target price of 17 brokerage firms. herring prospectus in the oriented unit.
net loss of $149 million for the nine Swiggy Uber
Hero
Meituan
Takeaway
GrubHub News reports suggest Zomato is coming week. The plan is to “MTAR works with clients
months ended September, listed Eats looking to list in India. While some raise around ₹600-650 crore such as Indian Space Research
Note: *Reported GMV growth rate for Zomato in FY20; GMV growth rates Source: Company,
with a market capitalization of $60 are based on local reporting currencies; GMV is gross merchandise value JM Financial
experts think a listing in the US mar- through the IPO, through a Organization, Defence
billion. For perspective: private kets would enable Indian companies mix of fresh issue of shares and Research and Development
SATISH KUMAR/MINT
investors had valued DoorDash at $16 to fetch much higher valuations, an offer for sale by Cyriac’s Organization, Nuclear Power
billion in June. Based on the IPO ment India Pvt. Ltd. Swiggy and Zomato have focused there are others who feel the Indian investment firm. He holds a Corporation of India Ltd and
pricing, the firm was valued at DoorDash is among firms that on improving profitability metrics by markets are capable of absorbing 33% stake which he had US-based Bloom Energy
around $32 billion. benefited from the covid-19 crisis, charging higher delivery fees (to con- some paper. “Given the current mar- acquired from his previous Corp., besides catering to
Indian food delivery companies witnessing a significant increase in sumers), reducing discounts and ket sentiment, positioning of domes- employer Blackstone for ₹250 other well-known establish-
could well be licking their chops at total orders, marketplace GOV (gross marketing spends and saving on tic food delivery companies and crore,” said one of the people ments like Bharat Dynamics,
potential IPO valuations. Swiggy and order volume) and revenue as people other operating expenses. Analysts depth of Indian markets, a listing in cited above, requesting ano- Hindustan Aeronautics, Brah-
Zomato are being val- avoided stepping out reckon these steps, along with high India too would be a viable option for nymity as he is Mos and Rafael,”
ued at $3.5 billion and B E H I N D due to fear of infec- order values, have likely helped these such companies and fetch them not authorized to The firm plans to said the first per-
$3.6 billion, respec-
m T H E N E W S tion. companies improve their unit eco- attractive valuations as the domestic speak with the raise funds via a son.
tively, based on latest In India, though, nomics. JM Financial Institutional market can very well absorb paper media. mix of fresh issue Emails sent to
reports. Using the wide divergence the stringent lockdown has hurt Securities Ltd says, “Zomato worth a couple of billion dollars. Per- Cyriac had left of shares and an MTAR Technolo-
between the private market and pub- Swiggy and Zomato, with consumers reported contribution haps, bigger companies Blackstone in gies, JM Financial
offer for sale by
lic market’s perception of valuations preferring home-cooked or pack- margin gain of ₹27 per DoorDash’s listing such as Jio Platforms 2017 to start his and IIFL did not
of internet companies these days, the aged food. Moreover, there were order in 1QFY21 versus Ltd may fare better by own investment Mathew Cyriac’s elicit a response.
should have a
latter may well value Swiggy and supply-side challenges with several a loss of ₹47 per order positive influence listing in the US market firm after spend- investment firm The company
Zomato at well over $12 billion. restaurants not functioning, migra- in 1QFY20 (on a sus- on the valuations given the depth of the ing over a decade has seen strong
According to reports, Zomato is look- tion of restaurant workers and work- tainable level though, market, wider investor at the American order flows since
of Indian food
ing at an IPO in 2021. “DoorDash’s ing capital crunch. The good news is the company men- base and better comps private equity giant. the lockdown restrictions
spectacular listing should have a pos- that management commentary sug- tioned that it expects delivery cos, says available there for that Investment banking arms of were eased and this has
itive influence on the valuations of gests things have picked up, both in contribution margin of an analyst sector,” Kapoor said. JM Financial and IIFL are resulted in rating upgrades.
Indian food delivery companies and terms of orders and unit economics. ₹15-20 per order, with “Indeed, there is a advising MTAR on the IPO, Rating agency ICRA Ltd has
provides a good benchmark for their “Swiggy, the market leader in food Ebitda improvement frenzy going on in the said the second person. upgraded MTAR technologies
listing,” said Anuj Kapoor, managing delivery, highlighted that while covid to be driven by volume growth). At US IPO markets, and if the Indian “The company has a robust twice, taking its rating from
director and head of Investment did have an impact, order volume is the group level, Zomato’s monthly firms have proper documentation to order book of over ₹300 crore BBB- to BBB+ as on 8 Decem-
Banking, UBS India. approaching pre-covid levels of 1.2 burn had reduced to $4 million in satisfy regulators, I think you will see and they are expecting ber. In fiscal 2020, the com-
“It’s possible that DoorDash listing million per day, with positive contri- 1QFY21 versus an average monthly them pretty soon. The case is simple: another ₹200 crore of orders pany reported a revenue of
may encourage Indian food delivery bution margin and the company is on burn of $24 million in FY20.” you have to take the capital when it’s in Q4. They are also in the ₹214.2 crore and a profit of
firms to re-evaluate their plans and track to Ebitda profitability in food Penetration levels are lower com- available, and liquidity has never process of setting up an addi- ₹31.3 crore, while in the previ-
list sooner,” said Ritesh Jain, a global delivery by 1Q21,” pointed out Jeffer- pared to other markets, but there is been so easy with both DoorDash tional facility at Adibatla (Tel- ous fiscal it had reported a rev-
macro investor and a former execu- ies India Pvt. Ltd in a report on 6 the threat of potential competition and Airbnb listing way above initial angana) which is expected to enue of ₹184.1 crore and a
tive at BNP Paribas Asset Manage- December. from firms with deep pockets. As JM expectations,” Jain said. become operational soon,” he profit of ₹39.2 crore.

LIC books ₹26,000 cr gain from share sale

FROM PAGE 1
people, including a top LIC offi-
cial, said, as the state-run
insurer prepares for India’s big-
gest initial public offering.
The profit is a 66.3% jump
from the ₹15,578 crore gains in
the year-ago period and more
than 80% of its full-year target of
₹32,000 crore which, if realized,
will be the insurer’s highest
buying, leading to an increase in ₹77,000 crore, depending on
our equity portfolio, we have market conditions,” said the
booked record profits in equity,” LIC spokesperson.
the spokesperson said in Last fiscal, LIC bought shares
response to an emailed query. worth ₹61,590.02 crore. By 30
“The profit booked up to 30 November, with four more
November is the highest ever for months left in the fiscal, LIC
this period in LIC’s history,” said had already purchased shares
the LIC spokesperson. worth ₹60,574.94 crore, 51%
Regulatory data shows LIC’s more than ₹40,098.83 crore in
combined new business from the same period last year.
individual and group single pre- “In the first few months after

Automating our energy

earnings from equity invest- mium policies rose 22.4% to LIC’s gains have been boosted covid hit, sales were sluggish.
ments in its 64-year history. Last ₹95,840 crore in April-Novem- by a resurgent stock market. MINT Most LIC sales are generated via
fiscal, LIC had booked a profit of ber. This, along with record agency channel, which has at

ecosystems: Future
₹25,625 crore from stock sales. profits from share sales, could portfolio, which includes tradi- least 1.2 million agents. The
The bumper gains have been increase interest in the LIC IPO. tional life insurance policies. agents then pushed sales through
helped by a resurgent stock mar- According to Mint research, in LIC’s record profits essentially online medium, and after June,

Re-imagined, Now.
ket. The BSE’s benchmark
Sensex gained 56.4% since 1 April.
An LIC spokesperson said the
insurer is a contrarian investor
and focuses on long-term
the September quarter, the top 15
firms in which LIC cut stakes the
most include ITC, NTPC, ICICI
Bank, Nestle India, Britannia, ABB
and Dr Reddy’s. LIC has sold
mean: one, the insurer will be able
to pay better bonuses and returns;
two, it expands LIC’s investible
surplus, which can provide vital
support to stock markets at an
premium income flow jumped.
On an average basis, new busi-
ness premium is growing 10.5%,
and renewal income is by 11%
year-on-year in April-Novem-

14th December, 2020 | 6:00 PM

growth. “We are basically buy-
ers when the market sells, and
we are sellers when the market
buys. This year has been excep-
tionally good. Along with good
shares worth ₹13,710 crore in
these firms in April-September.
LIC’s profits primarily come
from sale of shares in the
insurer’s large, non-linked
uncertain time; and, three, the
ability to generate such profits
may attract new customers.
“For fiscal 2021, our target
for equity purchase is to cross
ber,” said one of the three people
cited earlier, all of whom spoke
on condition of anonymity.
Ashwin Ramarathinam con-
tributed to the story.

Growth is
Santosh Khatelsal Milan Seth Yogesh Kumar not just adopting new
Managing Director, EVP, IMEA, Head IT & Business technologies. It’s also
Enerparc Energy Automation Application and CISO,
Anywhere Tata Advanced adapting to new realities.
Systems Limited

Growth is...On.

Rajiv Sharaf Nitin Kumar

CIO & Head IT, Rohilla
Torrent Power Ltd. VP IT, Adani
Electricity
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 MONDAY, 14 DECEMBER 2020
HYDERABAD 07

ADVERTISEMENT

DIGITAL INDIA
TRANSFORMING FOR THE WIN
— Rajarshi Purkayastha
Head, Pre-Sales, India | MECAA |
SAARC, Tata Communications
AGGREGATING OPINION
Technology (MeitY) and NeGD to
drive mobile governance in India.
Today, it provides a single platform for
all Indian citizens to access pan India
e-Gov services, currently clocking over
2,000 services, which are delivered
in multiple Indian languages. Similar
success stories around Aadhaar, the
Passport Seva and many more are true
examples of transformed government
operations.
There are several initiatives in
exploration phase, involving new
technologies such as AI, ML or
Blockchain etc to enable sophisticated
operations as managing performance
drivencontractsandpay-outstosuppliers
that require real-time assessment
and intelligent digital workflows or
tapping into the vast network of CCTV
nationally using intelligent systems to
This can be enabled as follows:
n A Cloud First strategy will help
government departments to build a
centralised IT infrastructure, which
can optimise operations and reduce
maintenance costs and downtime. It
also helps build and deploy applications
in a scalable manner using containers
and microservices, enabling the
government to launch new or enhanced
citizen services seamlessly in the future.
Cloud also smoothens the adoption
of new technologies, which help
churn insights from large volumes of
data, thereby adding intelligence and
automation in the system.
n An Internet First strategy can help
with a ubiquitous, easy to access, flexible
and elastic digital infrastructure. The
Internet also brings an added advantage
of improved accessibility between
digital services of various entities in
the ecosystem, be it connecting inter-
cloud environments or data centres of
ecosystem peers.
The reach to the end consumer, i.e.,
citizens in mass, can only be enabled
through public Internet, allowing them
with easy access and consumption of
services anytime, anywhere through
smart phones, laptops, tablets using 4G
and broadband connections.
n A Security First strategy helps
manage and reduce cyber risk across
entities and layers. The frequency, scale
and severity of cyberattacks are getting
more intense. The hyper connected
digital environments have expanded the
attack surfaces and vulnerabilities. A
single security breach may lead to data
loss, disruption of day-to-day operations
impacting the credibility of the system. A
Security First strategy will not only help
enable ministries to adopt best security
standards and practices to protect the
digital infrastructure and citizen data,
but will also ensure the privacy of citizen
data and establish necessary controls
across people, processes and technology
to ensure adherence to compliances and
regulations.
The concept of Privacy Operation
Center (POC) is another key aspect
that we recommend should be a part
of digital initiatives. A central POC
can serve as the single point of data
privacy management; monitor all access
to private data, review consent, audit
services for privacy compliance and
enable wider deployment and adoption
across departments. The POC framework
will consider multiple elements as - acts
and regulations, privacy principles, data
classification, consent management,
privacy breach incident handling, digital
forensics and much more.
As a country, we’ve got a strong
digital foundation, the right talent,
players and partners, coupled with
a very clear vision. Following the
above-mentioned steps will help the
government, the citizens and the
larger ecosystem to be well-prepared
for what is and will be, a truly exciting
and exhilarating journey ahead into the
Future of Digital Governance. l

W
hen it comes
to digital
t r ans for ma -
tion, India has
come a long
way. Starting
in late 1980s with India’s first comput-
+ erised railways passenger ticketing and
reservation system to the launch of
the Digital India by the government in
2015. We’re fast moving ahead with a
clear vision to transform into a digitally
empowered society and a knowledge
economy.
Clearly, such transformation does
not and cannot happen overnight. Even
technologically advanced countries
could take years to reach close to a
desired state and even then, it’s not
over. It is a continuous journey. Years
of strategising, planning and small
successes are what contribute to each
significant milestone!
At the 68th SKOCH Summit, we
had an opportunity to interact with
stakeholders in Digital India from
across centre and state governments.
While deliberating on the future of
digital governance, what stood out
were the many interesting examples in
India’s digital transformation journey.
Consider the UMANG application
(Unified Mobile Application for New-
age Governance), developed by the
Ministry of Electronics and Information
We reccommmend
adopting a “citizen-first”
digital platform - an
integrated, scalable and
resilient digital core
that brings together the
best of infrastructure,
application, technology
stacks and systems
integration in a holistic
manner to facilitate
cohesive operations
while meeting the
various regulations
and compliances and
maintaining all security
parameters across data
privacy, residency,
sovereignty and more.
capture fugitives. While several projects DOMAIN EXPERTS ON DIGITAL INDIA
are at various stages of maturity, there
is clear consensus on the urgent need
to leverage technology to bridge the
specific gaps, which could be as basic as
reaching and engaging the right citizen
segment.
Purpose-led transformation that
is defined by a higher mission is what
helps galvanise people and inspires
change—enables common interface
towards ease of living and offers
relevant digital services, driven by
innovation, inclusion and collaboration We are clear about the sovereign New technologies are being Outlay to the Panchayats have Bhoomi Rashi portal has reduced
across government systems. function and the service delivery extensively used in development and increased three times. It is the time taken for approval
function. The journey of e-Gov is maintenance of PMGSY. It is helping important to track the funds and publication of notifications
A PROVIDER PERSPECTIVE marked by collaboration of public us to have real-time monitoring of and utilisation and measure pertaining to land acquisition.
As a service provider having enabled and private sector. MeitY and e-Gov the network and available data is outcomes. We have put in place Project Management &
multiple government projects and as an would not have moved further being used for planning further. A a robust e-Governance system to Information System does real-time
empanelled member across boards like without this partnership. Technology digital process has been developed to implement online audit to cover project monitoring and dashboard
MeitY and CERT-In, we clearly see that is helping in both ease-of-doing- track the condition and performance all Panchayats. This will enhance for the minister and all officers to
the Digital India vision is accelerating.
business and ease-of-living. of roads. the accountability. track project progress.
Use of proven technologies has set a
robust foundation to many government Abhishek Singh, President & CEO, Ashish Goel, Joint Secretary and Director Khushwant Sethi, Joint Secretary, Amit Kumar Ghosh, Joint Secretary,
initiatives like UAN, UPI, the NeGD, MeitY General, NRIDA Ministry of Panchayati Raj Ministry of Road Transport and Highways
DigiLocker and more, all of which help
the larger Digital India 2.0 imperative
to unfold. When it comes to digital
The ideal state is an intelligent
and interconnected platform that
transformation, India
will help the government to innovate has come a long way.
and collaborate across sectors and Starting in late 1980s with
revolutionise citizen services. The
need to build a population scale digital India’s first computerised
infrastructure, harnessing intelligent railways passenger
tools and technologies like AI, Big Data, ticketing and reservation
Internet of Things (IOT), Blockchain
will help various sectors to improve system to the launch of
the well-being of every Indian, ranging the Digital India by the Mobilising 7.11 cr women in Due to the end-to-end We have introduced an app called
from farmers, tribal, urban populations 66 lakh SHGs is a humongous digitisation and with the help of ‘Rail Madad’ using which, a
and from sectors as wide as agriculture,
government in 2015. effort. We have trained 3 lakh platforms like Aadhaar and Jan passenger can register complaints
natural-resource management, energy- We’re fast moving ahead community resource persons too. Dhan accounts, it was possible using all channels into a single
use, transportation, health, finance, with a clear vision to These initiatives are taken under to ensure that relief measures entity. The resultant management
urban-infrastructure, manufacturing the NRLM, which functions reach the intended beneficiaries reports present a holistic picture
transform into a digitally
and more.
empowered society
on the key principles of social in a timely and in a hassle-free of weak areas and enable focused
This will require the government mobilisation and building strong manner at the bottom of the corrective action by way of auto-
to build and sustain a robust digital and a knowledge institutions for the poor. pyramid. escalation to the concerned officials.
architecture by assessing and uplifting
the digital posture of each concerned economy. Charanjit Singh, Joint Secretary, Navaljit Kapoor, Joint Secretary, Vivek Srivastava, Executive Director,
department; further enabling an Ministry of Rural Development Ministry of Tribal Affairs Railway Board, Ministry of Railways
interconnected ecosystem of government
offices, private and peering parties and
offering seamless and secure last mile
reach to citizens. All this while keeping
the citizen’s data and identity safe.
We recommend adopting a
“citizen-first” digital platform - an
integrated, scalable and resilient digital
core that brings together the best of
infrastructure, application, technology
stacks and systems integration in a
holistic manner to facilitate cohesive
operations while meeting the various
regulations and compliances and
Cyber security has assumed The next phase of digital We are investing heavily in IoT eMARG application is helping
maintaining all security parameters
greater importance in digital governance would be backed and satellite based technology. us in objective and evidence-
across data privacy, residency,
sovereignty and more. governance. The government has by emerging technologies like We are trying to pinpoint each based monitoring of the
taken up various measures to AI, Big Data, Hybrid cloud, and every train on the railway condition of rural roads. If a
The second critical imperative is
strengthen cyber security. A lot and Analytics. It will be the network and have installed a GPS contractor gets marks less than
to knit the value chain – connect the
dispersed cross-functional offices and of attention is being given to the consumers and citizens on the aided geo-augmented navigation 80 per cent, then he won’t get
departments and the external bodies as vulnerabilities and cybercrimes one side and business houses, system (GAGAN) based devises any payment. If it is 90 per cent,
partners, suppliers and providers, that particularly against women and corporates and the service on all locomotives for real-time then he will get only 90 per cent
play a pivotal role in delivering the end- children. providers on the other. tracking. of the total payment.
services. And lastly, establish the reach to
citizens, enabling them to consume the
B N Shetty, CTO, Golok Simli, CTO, Vijay Devnath, CISO, Pradeep Agrawal, Director - Projects,
services in a secure, seamless and trusted Ministry of Home Affairs Ministry of External Affairs Centre for Railway Information Systems (CRIS) NRIDA
manner, anytime and from anywhere.

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 08 MONDAY, 14 DECEMBER 2020
HYDERABAD

‘Farmers fear the story of low
mobile tariff will be repeated’
Elizabeth Roche
elizabeth.r@livemint.com
NEW DELHI
TOP ST RIES
Import of solar cells
to face 25% customs
duty, modules 40%
ment of the laws? Finally, law and order of a state and is direct income support rather than a FROM PAGE 1
It is true that the government has proximity to markets are also extremely legally mandated MSP.
agreed to modify the recent Acts to enable important. Why are farmers afraid to try out the 2021—that’s the way we had
state governments to impose conditions of There was a very poor response to tend- new regime proposed by these laws? sent the trajectory,” Singh said

T
he reluctance of farmers to licensing in trade areas also, which PTI Do you think the position taken in an interview.
accept the central govern- are outside the physical bounda- by the Opposition parties India’s fuel While the budget had okayed
demand fell
ment’s written offer to dilute ries of APMCs. warning of the dangers of 5% in
an enabling mechanism for
the three farm laws stems from The Centre has also agreed to allowing corporates to enter November imposing a basic customs duty of
their fear that the government allow states to impose a market fee the agriculture sector is the bit.ly/3a4LaD 20% on cells and modules, chal-
could issue executive orders and dispense and other charges in trade areas right approach? Z lenges related to adequate domes-
with guarantees that minimum support also as they are applicable to trans- Many agricultural commodities tic production capacity and how
prices (MSPs) offer, said Siraj Hussain, a actions in APMCs. This should are bought by large private sector clean energy projects that have
former agriculture secretary. However, have resolved the concerns of companies. In many states, the been bid out based on lower Power and renewable energy
Hussain, a visiting senior fellow with the farmers about the withering away farmers have been selling it to cor- equipment costs will be treated minister Raj Kumar Singh. HT
New Delhi-based think-tank, the Indian of APMCs because of the differ- porates for a long time. Sugarcane prompted the Centre to rethink
Council for Research on International ence in the tax structure between and cotton are examples. More the plan. There were also discus- 2,000MW. Our actual con-
Economic Relations, is hopeful of a solu- APMCs and outside. The Centre buyers of farmers produce, sions about whether the duty will sumption that is going to happen
tion soon. For one, there could be off-the- has also agreed to modify the laws whether large corporates or be compliant with World Trade progressively will almost touch
record conversations that could be away to bring the legal dispute under the

reaching out to farmers through a long- and district magistrates.

time former ally, the Shiromani Akali Dal,
‘
from the public limelight, he said during jurisdiction of civil courts rather Farmers believe any executive
an interview. Second, the Centre could be than sub-divisional magistrates order issued by the government

The non-acceptance of these guaranteeing continuation of

‘ e-commerce players or exporters
or processors can help farmers get
a better price. The entry of orga-
nized business in the horticulture
sector, for example, can bring
Organization rules.
The market for solar compo-
nents is dominated by Chinese
firms. A surge in imports
prompted the government to
20-30GW per year. That is going
to be our requirement at the rate
I am going. So, cells have to be
imported as we only manufac-
ture 2,000MW here.”
he said. Edited excerpts. changes proposed by the govern- MSPs can be dispensed with. more stability to prices received by impose a safeguard duty from 30 This will also help attract for-
This is the biggest agitation by farm- ment is because of the loss of trust farmers. Moreover, farmers July 2018 on solar cells and mod- eign firms exploring a China-
ers to affect parts of north India since between the farmers and the gov- Siraj Hussain already have the experience of ules imported from China and plus-one strategy for produc-
the late 1980s when ernment. The Former agriculture secretary; senior visiting fellow, entering into contracts with cor- Malaysia. The safeguard duty, tion. India imported $2.16 bil-
farmers laid siege to mint groups of farm- Indian Council for Research on International porates. For example, a large quan- which was set to expire on 29 lion worth of solar photovoltaic
the national capital. ers, predomi- Economic Relations tum of seed production is through July, has been extended by a year. (PV) cells, panels and modules
What has led to the CONVERSATION nantly from Pun- contract farming. About two- Earlier, the ministry of new in 2018-19. “The demand is
anger of farmers this SIRAJ HUSSAIN jab and Haryana, thirds of poultry production is also and renewable energy was in here. We are the fastest grow-
time? would not be unaware of ers floated for warehouses for foodgrain through a contractual arrangement. favour of imposing basic cus- ing (market),” Singh said.
There has been talk about reforming recent legislation amending the labour under the Private Entrepreneurs Guaran- However, the changes in the Essential toms duty from 1 April 2021. As An investment of ₹4.7 trillion
the Agricultural Produce Market Commit- laws. They would be thinking that if the tee Scheme even though the Food Corpo- Commodities Act may also have a more part of the plan, India was look- has been made in India’s
tees (APMCs) and reducing the restric- government, which has a majority in both ration of India (FCI) was guaranteeing pay- direct and early impact on consumer pri- ing at grandfathering the previ- renewable energy space in the
tions on trading in APMCs because of Houses of Parliament could easily amend ment of rent for 10 years. In other states ces. For some high-value commodities in ous bids that were awarded by past six years, with an expected
licensing, but this is the first time that the the labour laws, any executive order such as Andhra Pradesh, FCI received very which domestic production is less than the allowing a pass-through in ₹1 trillion investment opportu-
Centre has come out with a legislation. issued by the government guaranteeing low rates under the scheme. demand, such as pulses and oilseeds, there power tariffs for projects nity annually till 2030.
The reform of APMCs has been under dis- the continuation of MSPs can be easily dis- What is the way out of the situation may be a possibility of corporates stocking awarded before the basic cus- Prime Minister Narendra
cussion since 2003 when a model APMC pensed with in future. for the National Democratic Alliance up a large quantity at the time of harvest. toms duty was to be imposed to Modi has said India’s aim is to
law was circulated to the states. The farmers have called for intensify- (NDA)? Do you think repealing the It is possible that they use their market protect solar project develop- end its dependence on import of
However, the general consensus was ing protests with a hunger strike on 14 laws would affect the credibility of the domination for hiking the prices. ers. The plan was later dropped. all equipment. The government
that agriculture is a state subject, and thus December. We also hear some sort of Union government? I think the farmers have noticed the “We will announce it now,” has come out with a production-
it was left to state governments to enact breakthrough is possible. At least, I don’t think the repeal of the Acts will entry of some big corporates in retail and Singh said. “Since we have man- led incentive scheme that offers
laws based on the model APMC Act, 2003. that is what Haryana deputy chief affect credibility. It seems that the people fear that the story of the low tariff of ufacturing capacity for modules, manufacturers in 10 sectors,
This time, the farmers in some states minister Dushyant Chautala has do not mind any action taken by the gov- mobile phones may be repeated for agri- so more BCD has been levied on including those for high-effi-
noticed with great concern the Centre’s informed. Are you hopeful of a solu- ernment. Several decisions taken in the cultural produce also. that (modules). On cells, we have ciency solar modules, benefits
action of legislating two new laws govern- tion soon? past, such as demonetization and lock- a manufacturing capacity of only worth ₹1.97 trillion.
ing trade outside APMCs and regulating I think the two parties could be carrying down in March-May 2020, enjoyed popu-
contract farming. Coupled with amend- out some off-the-record negotiations. The lar support despite extreme hardship
ments to the Essential Commodities Act, Centre has the Akali Dal as a long-term faced by the vast number of India’s
+ the farmers were convinced that the gov- ally, and it would not be surprising if its poor. If the government wishes
ernment has finally decided to bring major influence over farm leaders is used by the to repeal the two Acts and
changes to the way trading in AMPC mar- government.
kets is done.
withdraw the modifica-
Moreover, the strength of the govern- tion under the Essential
The farmers are not unaware of the rec- ment and the perseverance of farmers are Commodities Act, its
Eight top banks see
ommendations of various committees. not comparable. The farmers could not be goodwill with com-
MINT prevented from reaching mon people is not
the borders of Delhi going to go down. It is
wilful defaults surge
despite the use of tear gas, only the media that
roadblocks, water cannons has made it a prestige FROM PAGE 1 when seen on a standalone
and even the digging of issue for the govern- basis, with wilful defaults fall-
roads by the government ment. increase was about ₹10,000 crore. ing 0.2%, while HDFC Bank
of Haryana, but the central Is the demand to The merger of some state- saw a 0.8% rise. The aggregate
government’s resources legalize MSP pro- run banks on 1 April naturally increase has largely come from
and those of the farmers curement practi- led to the anchor banks taking a few public sector banks.
are not comparable. cally possible? over wilful defaulters on their A wilful defaulter is a bor-
Moreover, the govern- It would not be books. But this is not the only rower who has defaulted on
ment seems to have almost possible for the gov- space where wilful defaults loans even when it has the
the entire Hindi and ernment to enforce a have risen. capacity to pay or if it has not
English electronic media law mandating MSP For instance, SBI, not utilized the loan for the specific

‘
If the Centre wishes to repeal

under Essential Commodities

‘ on its side, barring just a for all 23 crops for
few exceptions. It is only which MSP is declared.
the two laws, withdraw changes through social media, the Sugarcane is the only crop
farmers have been able to that cannot be bought by
make their arguments sugar mills at a price lower
involved in any of the mergers, purposes for which finance was
saw total wilful defaults rise by availed for and has diverted
around ₹14,000
crore in the six
months to Sep-
SBI saw total
wilful defaults
funds .
Although wilful
defaults did not
Act, its goodwill will not go down heard. than the price declared by the tember to ₹58,475 rise by around seem to ebb even
So, it is an unequal con- government in the form of fair crore. ₹14,000 crore before covid—
frontation. So they are and remunerative price and state On 1 April, Pun- despite the fear of
The recommendation of the high-level under greater pressure to reach an agree- advised price.
in April to
jab National Bank bankruptcy pro-
committee chaired by (former Himachal ment with the government. The way to help farmers merged with Ori- September to ceedings—they
Pradesh chief minister) Shanta Kumar There are critics who point out that ental Bank of ₹58,475 crore have taken a turn
regarding reduction in public distribution Bihar phased out APMC some time Commerce (OBC) for the worse since
system (PDS) coverage from 67% of the ago, but the state is yet to see the bene- and United Bank April. The Centre
Indian population to about 40% was fits of it. Is this argument valid? of India, while Union Bank of has restricted fresh cases under
already worrying farmers as they thought It is unrealistic to believe that the mere India merged with Andhra the Insolvency and Bankruptcy
that the government’s need to procure repeal of the APMC Act will get private Bank and Corporation Bank. Code—first for six months till 25
foodgrain will go down. As Punjab and investment. The investment climate Data showed the smaller September and then for another
Haryana have large surpluses of wheat and in a state is also impacted by the banks—OBC, United Bank, three months till 25 December.
rice, their farmers are more fearful of any infrastructure of the state, such Andhra Bank and Corporation Aiming to curb wilful
dilution of PDS. as rural roads, electricity, liter- Bank—had ₹21,837 crore of wil- defaults, the Centre asked pub-
The standoff continues despite the acy, availability of land for ful defaults as of March. But lic sector banks in 2019 to
Union government offering signifi- industrial use, bureaucratic even if that is discounted, wilful examine all accounts exceed-
cant changes to the farm Acts. Why culture, and purchasing defaults are up 60% from a year ing—₹50 crore, if classified as
are farmers not open to the amend- power of consumers. ago in April-September. non-performing and check for
HT ICICI Bank is the only outlier possible fraud.

FinMin to take call on ₹14,500 cr

m MINT SHORTS phase of the fifth National Family Health Survey (NFHS-5). The
survey was released by the Union health minister Harsh Vardhan
on Saturday. Similarly, 13 states and UTs registered a surge in the
percentage of stunted children under 5 in comparison with
AstraZeneca to buy Alexion for
$39 billion in rare-disease push
BLOOMBERG
capital infusion into banks in Q4
New Delhi: The finance minis- MINT

Centre likely to pare stake in Axis
Bank, held via Suuti, next month
MINT New Delhi: The central government
may further pare its stake in Axis
Bank,held via the Specified Under-
taking of the Unit Trust of India
(Suuti), next month. Earlier, Suuti had
sold 6.143 million shares of Axis Bank
between 2 and 4 December for
₹374.21 crore and 3.625 million
shares between 26 and 27 November,
for ₹221.47 crore. ASIT RANJAN MISHRA
Read more on livemint.com
NFHS-5 shows worrying trends in
child nutrition and mortality rates
New Delhi: The Under 5 and infant mortality rate (IMR) has
come down in 18 states and Union territories, but in parallel 16
states recorded an increase in underweight and severely wasted
under 5 children among the 22 states surveyed during the first
2015-16. These states and UTs are Goa, Gujarat, Himachal Pra-
desh, Kerala, Maharashtra, Meghalaya, Mizoram, Nagaland, Tel-
angana, Tripura, West Bengal, Lakshadweep, and Dadra & Nagar
Haveli and Daman and Diu. NEETU CHANDRA SHARMA
Read more on livemint.com
Bharti Infratel gets RoC nod for
change of name to Indus Towers
New Delhi: Bharti Infratel has received approval from the regis-
trar of companies (RoC) for changing its name to Indus Towers,
following the recent merger of the two companies to create a
mega tower entity. The company has initiated due process for
RAMESH PATHANIA/MINT final approval from stock exchanges
for updating the name change. In a
BSE filing, Bharti Infratel said it “has
received approval from the registrar
of companies, NCT of Delhi and Hary-
ana for change of name of the com-
pany from Bharti Infratel Limited to
Indus Towers Ltd as provided in the
scheme of amalgamation...” PTI
try will take a call on residual
₹14,500 crore capital infusion
in the PSU banks in the fourth
quarter of this fiscal, people
aware of the matter said. Fol-
lowing the financial perform-
ance review after the first half,
the people said, Punjab & Sind
Bank was found in need of
₹5,500 crore to meet regulatory requirement. The government
approved capital infusion through preferential allotment of
equity shares in the bank last month. With ₹5,500 crore going
to the bank, the government is left with ₹14,500 crore. PTI
AstraZeneca Plc, one of the drugmakers leading the fight
against covid-19, highlighted where its growth will come
from after the pandemic with a $39 billion deal for rare-dis- Maruti Suzuki prepares to enter
ease specialist Alexion Pharmaceuticals Inc. The proposed
diesel segment again next year
cash-and-stock acquisition will add treatments for uncom-
mon blood and immunological disorders to the portfolio New Delhi: Maruti Suzuki India (MSI) is looking to enter the die-
of Cambridge, UK-based AstraZeneca, which had spent sel segment once again next year as the vertical continues to draw
years paring away older and less profitable products to a lot of customers, according to people in the industry. MSI had
focus on cancer. BLOOMBERG discontinued diesel models from its portfolio with the onset of
stricter BS-VI emission norms from April this year. PTI

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X
 MONDAY, 14 DECEMBER 2020
HYDERABAD 09
STARTUP INC.
accelerator, its thesis has been oriented
towards SaaS startups aiming for revenue-
led sustainable growth instead of chasing
STARTUP ECOSYSTEM
mega-funding and valuations. NEEDS TO THINK SMALL
SUSTAINABLE MODEL Startups across the world love to think big.
Four of the first 10 startups to join Upek- Venture capitalists bet on startups not merely
kha, founded in 2017 in Delaware, have scaling, but blitzscaling. However, this obsession
crossed $1 million in annual recurring reve- with scale might be leaving some gaps in the
nue (ARR), and 18 of the first 20 startups are ecosystem.
cash-flow positive, says Krishnamoorthy. howindialives.com
It now extends the same philosophy to its
rolling fund which follows a model pio- CHASING BIG MONEY
neered by Indie.vc. This model supports In the US, 66% of the capital raised by venture
founders who are more interested in build- investors went into funds raising $500 million or more
ing a profitable business than going after in 2018, compared to 38% in 2008.
larger and larger venture capital rounds. Capital raised in new VC funds by fund size (in $ mn)
The Indie.vc model gives such founders (in %) >500 250-500 100-250 25-100 0-25
the option to buy back their startup’s 100

equity from the VC once they hit a healthy

80
ARR, usually after about two years. Then
they can chart their own course instead of 60
coming under pressure from the VC to
scale up crazily for a mega exit. Upekkha 40
similarly will have a clause to enable a buy-
back of equity with revenue, giving the 20
fund a modest 3x return on investment.
0
“Globally, Atlassian or Mailchimp did 2008 2018
not need a lot of venture capital to hit hun- Source: Crunchbase
dreds of millions of dollars in revenue. In
India, we have seen SaaS startups like CATCH THEM YOUNG
Freshworks, Postman and WhatFix VCs' skew towards late-stage companies has led to the
SaaS startup accelerator Upekkha co-founders (from left) Prasanna Krishnamoorthy, Shekar Nair and Thiyagarajan Maruthavanan. BHASKAR/MINT becoming very large. But there’s another rise of micro VC funds, which primarily focus on seed
and early-stage companies.
set like Minjar, FusionCharts and Wingify

New rolling fund

Number of micro VC funds in the US
The challenge with an angel network which became profitable without raising a
160
model, says Rayapati, is that “you have to lot of money,” points out Krishnamoorthy.
first find a startup that you like and then Such a model works well for Upekkha’s 148
120
find like-minded people who are inter- focus segment because SaaS startups from
ested in that segment. So, if I want to invest India tend to become profitable quickly if

opens options for

in Indian SaaS startups focused on long- their product is right. 80

term sustainability, which is Upekkha’s US-based TinySeed.com, which calls

philosophy, it makes sense for me to go itself a startup accelerator for bootstrap- 40
19
through them. And the other advantage is pers, is another proponent of this thesis.
that I can invest $10,000 to $50,000 a “The main difference here is optional- 0
2008 2018

SaaS founders
quarter instead of putting up something ity,” says co-founder Einar Vollset. “We Source: Crunchbase
like $200,000 at one shot”. invest in such a way that a life-changing
The lock-in period is 10 years, just like in outcome for the founder—say getting to A FAMILIAR TALE
other VC funds. The difference is that LPs $10 million ARR and selling the company The story of Indian VC sector is quite similar, with the
invest their money over four to eight quar- for $65 million—is something the average deal size of late-stage funding growing the
ters, instead of committing the whole founders, us and our investors would cele- most between 2018 and 2019.
amount at the outset. This also enables brate. That’s not necessarily true in more Deal size in each deal stage in India (in $ mn)
them to reassess their annual traditional VCs. Typically,
2018 2019
commitment in case of a black 60
The concept is emerging as an alternative to the traditional swan event like covid.
This model there the goal is to become
worth $10 billion or above, or
One limitation with raising supports it’s considered a failure, so the
venture capital funding model for early-stage startups funds every quarter, instead
founders who companies are geared
of a larger fund for a three- towards the kind of growth
year period, is that it leaves are more you need to achieve those
26
Malavika Velayanikal ment of $100,000-500,000 per investor, little scope for participating
you could take in someone who commits in follow-on rounds of start-
interested in kinds of outcomes. Of course,
if you run that hot, then the 18.3
21.3

U
pekkha, which runs a fully $10,000 per quarter for a year.” ups that enter a growth stage building a chances that you end up
6.3 8.2
remote SaaS (software-as-a- and require more capital or
service) startup accelerator, is INVESTOR POOL encounter a blip and need a
profitable biz imploding There’s
also goes up.”
some evidence to
0.7 1.2
+
launching a “rolling fund” in Upekkha plans to invest $550,000 per runway extension. than going back the thesis. TinySeed has
Seed Early Growth
Source: India Venture Capital Report 2020, Bain Capital
Late stage

the coming quarter. This is a quarter in SaaS startups targeting global AngelList dusted out a US
concept pioneered by AngelList in the US markets with their headquarters in the US. Securities and Exchange
after larger been investing for less than
two years, “but already we are
this year as an alternative to the traditional The investors would mostly be SaaS Commission (SEC) regulation VC rounds seeing companies that have PLUGGING THE GAP
venture capital (VC) model. founders themselves, who have exited to enable the investment crossed $10 million ARR”. It is India is also seeing a growing number of micro VC
Upekkha is the first one from India to set their startups and are now based in the US. vehicle. It handles the regulatory aspects of currently raising a fund dedicated to Asia, funds as well as larger VC firms launching their own
up a rolling fund on AngelList. It has a sub- There would also be senior personnel from managing the rolling fund, for a fee. The expected to launch next year. early-stage funding programmes.
scription plan, where limited partners big SaaS firms. Thus, it broadens the inves- SEC stipulates the maximum number of “The founder should think long and No. of cumulative startups No. of funded startups
(LPs) make quarterly investments, rather tor pool by lowering the ticket size and tap- subscribers who should all be accredited as hard about what kind of outcomes they 100,000 8,000
than a lump sum. Think of it as the VC ver- ping a large SaaS community. investors in the US. One of its regulations would be happy with and what the risk/
79,000
sion of a systematic investment plan (SIP) “Apart from the SIP mode of investment, allows rolling fund managers to canvass reward functions are for various paths,” 80,000
or an equated monthly instalment. rolling funds that focus on a specific seg- openly for investment, provided they says Vollset. “If you go the traditional VC 6,000

“Normally a VC takes six to 18 months to ment, as Upekkha is doing with B2B (busi- ensure their investors are accredited. The route, then your chances of becoming a 6,400
60,000
raise a fund, which is invested in the next ness-to-business) SaaS, are attractive to me provision enables a continuous fundraise household name are definitely there. How- 4,000
three years. Then it raises another large because of their filtering criteria. I don’t quarter after quarter. On the other hand, ever, there’s also the risk that a ‘mid-level’ 40,000
fund. The challenge is to get commitments need to hunt and invest in those startups as traditional VCs can only go public after success is much less likely. Some VCs will 27,000
2,000
for the three-year investment amount an angel investor,” says Vijay Rayapati, receiving the full commitment for a fund. pressure you to take a 1/100 chance of 20,000
upfront,” says Prasanna Krishnamoorthy, founder of Bengaluru startup Minjar Cloud While the rolling fund vehicle helps reaching a $10 billion exit over a 1/2 chance 1,900
partner and co-founder, Upekkha. Solutions, which was acquired by San Jose- Upekkha get going faster than it could have of reaching a $100 million exit. Are those 0 0
2012 2019
“The subscription model lets a fund get based Nutanix in 2018. Now a GM at as a traditional VC, potentially creating the same trade-offs that you would make?” Source: India Venture Capital Report 2020, Bain Capital
going with $500,000 to $1 million per Nutanix, Rayapati intends to join the first access for smaller LPs as well, that’s only Malavika Velayanikal is a Consulting
SARVESH KUMAR SHARMA/MINT
quarter. Instead of relying on a commit- batch of LPs for Upekkha’s rolling fund. one side of its funding innovation. As an Editor with Mint. She tweets @vmalu

For more stories on how startups

PROBLEM, A VC takes 6-18 months to raise a fund,
which is invested in the next three
CHALLENGE
years. The challenge is to get commit-
& SOLUTION ments for the large amount upfront.
In Upekkha’s subscription plan, lim-
ited partners make quarterly invest-
ments, rather than a lump sum. Think
of it as the VC version of an SIP/EMI.
Upekkha plans to invest $550,000 per are changing the way we work
quarter in SaaS startups targeting global and the way we live, follow our
weekly podcast Startup Inc
markets with HQs in the US. The inves-
tors would mostly be SaaS founders.
hosted by Shalini Umachandran
on htsmartcast.com

These founders took the road less travelled to reap rewards

Malavika Velayanikal founder Sahil Lavingia raised mil- co-founded Jaaga as a collabora-
lions of dollars from top-tier VCs tive space for the artist and techie

Founders should think hard
about what kind of outcomes
they would be happy with.
Einar Vollset
CO-FOUNDER, TINYSEED.COM
We typically give three to four
times the monthly revenue of
a startup as the loan amount.
Hari Krishnan
CO-FOUNDER, STARTUPLOAN.CO
As with a lot of B2B SaaS
startups, we were very quick
to get revenue.
Raj Sheth
CO-FOUNDER, RECRUITERBOX
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X
T
he Silicon Valley venture
capital (VC) model followed
around the world has an
investment thesis skewed towards
finding mega winners. The acqui-
sition of Flipkart for $18 billion by
Walmart in 2018 gave its early
backer Accel India a manifold
return that more than made up for
any “failures” of other startups in
its portfolio. A Facebook initial
public offering in 2012 gave the
California VC a reported 1,000-
fold return on its $12.7 million
investment seven years earlier.
While such stories hog the
headlines, there’s many a tale of a
startup fallen by the wayside in
this quest for a “hockey stick”
growth trajectory. While a VC
focuses on the top 10% of its start-
ups that can scale fast by pumping
capital into marketing and expan-
sion, others come under pressure
to meet growth expectations that
may not suit their startups.
This has prompted a new breed
of startup founders who push back
against such a model. And sup-
porting them are alternative VCs
like Indie.vc, TinySeed and Ear-
nest Capital that are positioned to
back founders aiming for modest
revenue-led growth rather than
being rocketships.
The classic case is that of San
Francisco-based Gumroad, whose
when he was 19 years old. After a
couple of years, growth stalled.
The business was still going up,
“but we were venture-funded,
which was like playing a game of
double or nothing”, wrote Lavin-
gia in a blog post.
To cut a long story short, Gum-
road got written off by its lead VCs,
but Lavingia stayed the course to
build a profitable company that
creates value for its users, without
measuring his success in terms of
becoming a unicorn in valuation.
ALTERNATIVE PATH
Many SaaS (software-as-a-service)
startups out of India making a dent
in global markets are similarly
drawn towards this alternative
path. “You don’t need a lot of ven-
ture capital to build a software
product. Go-to-market (GTM) is
where it gets expensive and that’s
where large VC rounds are raised.
In our case, we decided we could
not afford a marketing-led GTM.
We wanted a product-led GTM,”
says Vijay Rayapati, founder of
Minjar in Bengaluru, which got
acquired in 2018 by US-based
Nutanix for an undisclosed
amount, rumoured to be around
$50 million. The total funding it
had raised was $2 million.
Rayapati was influenced by an
article he read early on in his
Vijay Rayapati sold Minjar for a sum rumoured to be $50 million after raising $2 million from angel investors.
startup journey that began in
2013. It made the point that a
founder who raises $2 million and
sells a company for $30 million
often makes the same amount of
money as a founder who raises
$40-50 million and sells a com-
pany for $200 million. “I didn’t
believe in raising a lot of venture
capital because then you would
have to show high growth, which
puts pressure,” he explains.
“A VC can have a portfolio of 50
companies and he would always
put pressure on growth. It doesn’t
matter so much to a VC if one com-
pany works out or not as long as he
gets a few big winners in his port-
folio. But for you as a founder, this
is the only thing you are doing.”
Another Bengaluru SaaS
startup that eschewed VC funding
was Recruiterbox. The HR tech
company was bootstrapped
through its seven-year journey to
profitable growth before being
sold to San Francisco-based Turn/
River Capital in 2018 for an undis-
closed amount.
“As with a lot of B2B (business-
to-business) SaaS, we were very
quick to get revenue. We were
basically reinvesting our revenue
into the business. We deliberated
raising funds but we were not con-
vinced we had the right strategy,”
recalls Raj Sheth, who was Recrui-
terbox’s co-founder and CEO.
Around three years into its jour-
ney, Recruiterbox got an angel
investor in Freeman Murray, a
tech entrepreneur who
communities in Bengaluru.
Murray agreed to provide capi-
tal as debt instead of taking equity
because Recruiterbox already had
enough revenue to show by then.
Recruiterbox needed the debt to
fuel its growth and Murray’s con-
tribution was handy at a time
when loans for startups were not
readily available.
BETTER OPTIONS
That has changed. Venture debt
from the likes of Alteria, Innoven
and Trifecta was available for
startups that had raised series A or
later stage funding. Now, entities
like Startuploan have brought
venture debt to even the pre-se-
ries A stage for startups reluctant
to dilute their equity too much.
There are different derisking
models at such an early stage. Get-
Vantage, for example, provides
revenue-based financing but
restricts the usage of the debt to
sales and marketing where return
on investment can be tracked.
Startuploan provides unrestricted
debt but takes a small equity stake.
“We typically give three to four
times the monthly revenue of a
startup as the loan amount. It
varies from ₹20 lakh to ₹1 crore,”
says Hari Krishnan, co-founder of
Startuploan, which has invested in
19 early-stage startups so far.
 10 MONDAY, 14 DECEMBER 2020
HYDERABAD

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

THE PUZZLE BEHIND

HEALTH PLAN PRICE SPIKES
Health insurance premiums are shooting up for many Indians. Why is it happening and what can be done?

+
With many Indians ending up in
hospitals as well as on the rolls of
health insurance companies this year,
the regulator will have to move quickly
on some long-pending reforms. HT

Deepti Bhaskaran hiked premiums by 5% in response to
feedback@livemint.com recent reforms in health insurance. Only
CHENNAI 5 products hiked premiums beyond 5%.
But thousands of people may be stuck in
health insurance increases which impacts
the claims ratio. The ageing book dynam-
ics need to be appropriately factored at the
pricing stage to avoid sharp price rises
and consulting actuary at Milliman, distri-
mint
SHORT
PRICEY PLANS bution costs are steep in India. “Commis-
STORY A claims ratio closer to 100% indicates sions are usually structured differently
optimum pricing and forces insurers to across different economies but typically

A
t a time when having a health those products. And steep hikes are not later,” he said. Claims ratio is the ratio contain costs. we have seen commissions to be in the
insurance plan should have without precedence, particularly for older between the total claims paid and the total WHAT Net incurred claims ratio (in %) range of 5%-10%. A 15% year-on-year com-
been a reason for comfort, Indians. premiums collected. Private Public mission can put a lot of pressure on cost,”
Ram Manohar Reddy (48), an Although the Insurance Regulatory and Price correction can potentially lead to Steep hikes in health insurance sector sector Total
she said. As per Buckle, medical inflation,
investment professional Development Authority of India (IRDAI) selective lapsation where the young and premium is becoming a recurrent which is more a factor of the larger health-
based out of Hyderabad, was in for a shock doesn’t publish data on lapsation in health healthy move out, whereas, the not-so- problem, particularly for older care ecosystem in India, and distribution
instead. Earlier this year, his insurer sent insurance, steep premium hikes on healthy stay back. This would worsen the Indians. IRDAI released a costs are the key challenges in retail health
him a renewal notice for his health insur- renewal do put policyholders at risk of books further, warranting a hike and clarification recently, but social 59 90 72 insurance from a sustainability point of
ance policy. The premium hike was an lapsation. Medical inflation and age band resulting in a vicious spiral. media is rife with complaints Note: Figures for FY19 view.
*Refers to the net claims paid vs net premiums earned.
eye-popping 200%—up from ₹21,762 to pricing are two common culprits for steep While there have been several anecdo- Floater policies and individual plans considered. Antony Jacob, chief executive officer of
₹66,667. hikes. tal accounts of predatory pricing, one of Apollo 24/7, a healthcare app, says that
The insurer had discontinued the old According to a white paper ‘Medical the most audacious events that ultimately WHY Assuming an illustrative premium of 100,
commission payouts in health insurance reducing renewal commissions will effec-
policy and introduced a new product in its inflation and health insurance products in forced the insurance regulator to inter- far outweigh those for a term life policy. tively bring down expenses and, by exten-
place with a few improved benefits. “I India’ by consulting firm Milliman, insur- vene dates back to nearly a decade. Reli- Predatory pricing, high sion, consumer costs. “Loss ratios or
commissions, and price signalling Total commissions paid each year# (in )
couldn’t immediately identify the bene- ers tend to hike premium by 15%-35% ance General Insurance Co Ltd launched Under health insurance claims ratio in the first 2 years look good
fits, but whatever it was, the premium was every two to four years as health insurance a health insurance policy in 2006, Health- —where older cohorts 300
given how health insurance policies come
Under life insurance
steep,” Reddy said. pricing is extremely sensitive to medical Wise, which was among the cheapest in experience a more taxing 250
with exclusions in the initial years. So,
He had bought individual health insur- inflation. This coupled with age band pric- the market. However, four years later, the premium revision—are all 200 there is room to absorb higher expenses.
ance plans for himself and his parents ing—where premiums are set in age bands insurer hiked the premiums in the range prevalent in the Indian context 150 But as claims ratio begin to increase and
back in 2002 (father is now 75-years-old of 3-5 years and change as the policy- of 60%-800% leaving policyholders in a 100 commissions remain high, there is a pres-
and the mother is 66-years-old). The sum holder moves from one age band to bind. sure on profitability,” he said.
insured totaled ₹7 lakh. Having been a another—can make renewal premiums In order to combat predatory pricing, NOW 50
0
“Paying a higher commission in the first
customer for nearly 17 years, Reddy seem rather inflated. According to the the IRDAI locked the premium for the first 1 5 10 15 20 year and tapering off commissions in the
decided to bite the bullet and renew the paper, the two factors together can three years after a new policy launch and In light of the fact that covid-19 Policy year
subsequent years would make more sense
policy. “My parents are senior citizens and account for a hike of up to 50%. allowed for an annual revision thereafter. has popularized health #15% annual commission for health and 40% first year
from a sustainability point of view,” he
and 10% renewal commission in case of pure term life
porting out at that age is difficult. I did But premium inflation akin to what But has it helped? Retail policies come insurance, it is important for India plan has been used. added. Also, give how renewals are now
approach the regulator who directed me Reddy experienced can’t be explained with a host of exclusions that are front- to move toward an insurance Note: This is for illustrative purpose and does not
actively happening online, the rationale
factor in the fact that health insurance premiums rise
to the insurer’s grievance cell. The insurer away by those factors alone. Predatory ended that keeps the claims ratio low ini- regime that is more affordable, with age and can be renewed for life. for a 15% renewal lifetime commission
got back saying the rates were approved pricing, high commissions, and price sig- tially, but as claims begin to pick up, insur- consistent and transparent Source: IRDAI, Mint Research
may need to be reviewed.
PARAS JAIN/MINT
by the insurance regulator, so I just went naling—where older cohorts experience ers are forced into price correction. Pricing in health insurance needs
ahead and renewed the policies,” he said. a more taxing premium revision—are all Therefore, predatory pricing and conse- greater monitoring, but a relook at incen-
But the hike didn’t stop there. For prevalent in the Indian context. quent premium corrections can’t be com- What lends weight to Gupta’s argument don’t report combined ratio segment- tives is important too for the long-term
FY22, Reddy has already received a Against this backdrop, and in light of pletely eliminated with the 3-year lock-in. is the prevalent claims ratio of the health wise, some of the standalone health insur- sustainability of the Indian health insur-
renewal premium notice as the insurer is the fact that covid-19 has popularized segment of insurance companies. An anal- ance companies are operating on a com- ance market. The regulator also needs to
once again revising its rates. This time, the health insurance—it accounts for nearly HIGH COST OF INSURANCE ysis of regulatory disclosures over the past bined ratio of over 100%. The gap between work on creating a healthcare inflation
hike is a total of 64%, but for Reddy, this 30% of premiums collected by non-life
really crosses the comfort barrier. “I now insurers—it is important for India to move
have to pay ₹1.09 lakh for a collective sum toward a health insurance regime that is
A ccording to Aloke Gupta, a health
financing specialist, retail health
insurance is priced on the higher side.
five years indicates that the net incurred
claims ratio for the retail book has been in
the range of 50% to 70%.
the claims ratio and the combined ratio, index to which premiums can be bench-
therefore, reflects operational expenses— marked.
of which commissions comprise a huge As per Milliman’s white paper, medical
insured of ₹7 lakh. Not only does this more affordable, consistent and transpar- “When you look at the coverage of health A lower claims ratio is desirable for the portion. inflation index is emerging as a potential
sound illogical and unaffordable, it looks ent. And this calls for not just greater insurance, which is very narrow in scope sustainability of the insurer as it means it’s global best practice to peg premium hikes.
more like a trap since older policyholders supervision but a comprehensive review with many exclusions and disallowances collecting more by way of premiums than COMMISSION CONFUSION “However, no such standardized medical
will not be able to port
out that easily,” he said.
Reddy is now contem- Predatory pricing, where
of commissions and the
creation of a healthcare
inflation index in order
built into the product, the premiums
appear to be high. This is true especially
for senior citizens for whom the contrac-
it is paying by way of claims. The surplus
then can be used for administrative and
management expenses and also earns a
R egulations allow a
15% payout to
insurance intermedia- Regulations allow a payout
inflation index is cur-
rently published in
India, although the data
plating lapsing his poli- premiums are initially at rock to benchmark premium tual disallowances in the form of deducti- profit for the insurance company. How- ries, but this is not a one- of 15% of the premium as exists to do so. Such an
cies. “The insurer has hikes. bles and co-pay are much higher and yet ever, very low claims ratios give rise to time payout but a recur- index would be
given me the option to bottom rates in order to they shell out more than 10% of the insur- concerns regarding consumer protection ring one. The agent is commission to insurance extremely useful in pro-
port to the cheaper chase the topline, can, over PRICING PAIN ance cover (sum insured) as premiums,” as it means products are overpriced. entitled to 15% of the intermediaries, but this is not viding a solid and robust
Arogya Sanjeevani, but I
am not sure,” he said.
With very few other
time, make health insurance P redatory pricing,
where premiums
are initially at rock bot-
he said. Gupta has worked with IRDAI as
part of various committees on health
insurance.
In the retail bucket, health insurance
products, especially from private and
stand-alone health insurance companies.
premium not just on
sale, but every year on
renewal as well.
a one-time payout but a
benchmark and would
allow insurers to com-
pare their own experi-
options available, Reddy unsustainable tom rates in order to Even in the case of the Reddys, who have been in the range that would invite This gets further recurring one ence against the mar-
has been vociferously chase the topline, can, paid just 2% of the sum insured as pre- concerns regarding overpricing. How- exacerbated by the fact ket,” noted the report.
complaining via social media to anyone over time, make health insurance unsus- mium in 2002, the cost has gone up to 16% ever, the story looks very different when that the regulator allows a reward—30% of With consumer interest peaking in the
who would listen. tainable and force insurers toward price of the sum insured. This, Gupta says, is an one looks at the combined ratio, which the commission—which increases the health insurance market in the shadow of
But there is no remedy in sight yet. And correction. According to Hitesh Kotak, indication of complete market failure. reflects the claims ratio as well as the payout further. Furthermore, while the a pandemic, long-overdue reforms can no
he is not alone. In response to multiple chief executive officer, Munich Re India, “Anything over and above 2.5% is indic- expense ratio. percentage of commission is fixed, the longer wait. And undertaking those
reports about steep premium hikes faced predatory pricing is a very myopic ative of a market failure, where insurers A combined ratio of over a 100 means premium in health insurance increases reforms before India shifts from being a
by policyholders, the insurance regulator approach to a long-term product like are not able to increase the penetration of that the insurers are paying out more than with age and this works like an increasing young country to a middle-aged country
clarified on 3 December that only 55 prod- health insurance. health insurance and price the product they earn by way of premium (exclusive of annuity for the agent, potentially for life. would be critical.
ucts out of a total of 388 products had “As people grow older, chances of using effectively,” he said. any investment return). While insurers According to Joanne Buckle, principal Deepti Bhaskaran is a freelance writer
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X
 MONDAY, 14 DECEMBER 2020
HYDERABAD 11
MINT M NEY
Read the terms, know tax rules POWER
POINT
before signing up for Esops RAMANI RAMACHANDRAN

Respond to this column at

mintmoney@livemint.com

STEPS THAT WILL

Employees have to pay tax on stock options at the time of receiving them as well as when they sell them
ISTOCKPHOTO
HELP INDIA STAY IN
Tinesh Bhasin
tinesh.b@livemint.com
Employees receiving Esops
must also keep in mind the risk
factors for the returns while set-
THE CRYPTO RACE

N
ot all startups went ting expectations. The returns

O
under due to the cov- depend on the company’s market ne of the things that 2020 will be remembered for is
id-19 setback. There value in the future, which is Esops don’t when the cryptocurrency creed emerged from its corner
guarantee a
were some that not uncertain. It also depends on the bonanza
and took centre stage in discussions around technology,
only were able to tide price investors are willing to pay to policy and finance. Bitcoin prices have breached highs last seen
bit.ly/2W1y5Dr
over the crisis but have started acquire the stocks of a company, in late 2017. Multiple governments across the world are investing
recovering. Some of these startups which is highly subjective and in developing Central Bank Digital Currencies (CBDCs), which
are now rewarding their employ- varies at different stages of invest- are digital versions of national currencies. The incoming Joe
ees by buying back employee ment. Biden administration in the US has announced its intent to invite
stock option plans (Esops) issued Mohini Varshneya, partner and crypto experts. China is a global crypto leader, and a good chunk
earlier. Recently, fintech startup head, Esop services, Corporate of the leading crypto companies, including exchanges and min-
Niyo and logistics company Shad- Professionals Capital Pvt. Ltd, a ing, are from the mainland or are founded by Chinese-origin
owfax rolled out Esop buyback Sebi-registered (category-I) mer- entrepreneurs based out of Hong Kong and Singapore.
plans for their employees. Accord- chant banker, gave a quick check- Against this backdrop, it is surprising and disappointing to see
ing to Niyo, its business has list of things that employees need the government of India drag its feet on clarifying laws around
crossed the pre-covid-19 level and to keep in mind when going for cryptocurrencies. For the thriving crypto community in India,
“operating profit is in sight”. Shad- Esops. According to her, progress has come in fits and starts. While the Supreme Court
owfax, too, has seen a recovery in employee must read the condi- revoked the Reserve Bank of India (RBI) ban on rupee transac-
business like Niyo. tions of Esop as elaborated in the tions, there is still uncertainty. Given the importance of this
Companies use Esops to retain grant letter. An employee must emerging technology, here are a few things that the Indian gov-
talent and to let employees benefit also go through the stock option ernment needs to do immediately so that it does not get left
from the growth in business. plan that is approved by the com- behind in the crypto race.
Employees looking forward to it pany’s Board. The vesting condi-
should know that Esops are taxed tions may require employee to CLARIFY POSITION ON VIRTUAL CURRENCIES
twice, unlike other benefits that achieve specific performance tar- Cryptocurrencies are here to stay. Regulators need to benchmark
employers provide. First, when offer the employee, when will they exchange (in case of listed compa- quantity every year for four years. get and these should be discussed policies against those in geographies such as Singapore, Switzer-
employees receive stocks and be issued, the terms and condi- nies), they will need to pay tax Alternatively, the number of units and agreed upon beforehand. land and the US and work with bodies like the G-20 to address
then, when they sell the securities. tions of allotment and so on. once more. “Here, the gains are can increase year-on-year by, say, Finally, an employee must also common concerns around money laundering, taxation and
They should also read the fine There is also a vesting date, the difference between the selling 10%, 20%, 30% and 40% in year understand the nature of the Esop potential criminal usage. Corporations and crypto firms with
print. There have been cases when an employee is entitled to price and the perquisite value that one, two, three and four, respec- plan as different plans may have Indian stakeholders should have a say in the policy and regula-
where employees were not aware buy the stocks of a company. was considered on acquisition,” tively. The vesting period is, typi- different objective and benefits. tory development process.
of the fine print and felt let down When an employee buys the said Raote. cally, spread over a few years in Further, employees must
when their expectations were not shares, it’s called vesting of Say, the FMV of the company order to retain the employees. understand that mergers and SET UP A SANDBOX
met. In new startups, sometimes options. went up from ₹1,000 to ₹2,500. Many times, Esops are also acquisitions may not offer a clear Sandboxes provide safe spaces for experimentation, and crypto
founders discuss Esops orally Then, there’s exercise date, However, the value at which the linked to performance. The vest- exit option like in the case of an sandboxes are active in multiple jurisdictions across Asia. Nodal
when hiring employees as they when stocks are purchased. The employee paid the perquisite tax ing conditions may require the IPO. When there is an acquisition agencies such as Startup India can
don’t have a framework in place. price at which an employee pur- was ₹1,000. The difference of employee to achieve a specific or merger of the company, the It is time to work with accelerators as well as cor-
When the paperwork is done, the chases the stock is called the exer- ₹1,500 (₹2,500 – ₹1,000) will be performance target. Such details treatment of Esops depends on expedite the porations that are already heavily
employee may or cise price, which taxed as capital gains. must also be clearly the deal that promot- active in this space. In addition, the
may not be satisfied If your employer depends on the fair If it’s a listed company, and the discussed and Also consider the ers, existing investors, crystallization banks and payment giants can get
with the offering. is offering you market value (FMV) holding period is over one year, agreed upon to risk: the returns and the acquiring of a clear involved, attract entrepreneurs from
“Employees should Esops, ensure of the firm. profits will be taxed as long-term avoid disappoint- depend on the company decides approach to India and the world to come in and
+ always ask for the that you get the capital gains (LTCG). There’s no ment later. company’s upon. cryptos address use cases that solve real prob-
paperwork before THE TAX BRUNT tax if the gains are up to ₹1 lakh. There’s one sig- Employees can feel lems. Building a thriving ecosystem
contract to market value in
joining a company, Most companies offer Any gains above ₹1 lakh are taxed nificant caveat that disgruntled if the exit can potentially shorten product devel-
and not go by oral understand what options at a price at 10%. Short-term capital gains many unlisted com- the future, which price for the stocks opment life cycles.
assurance,” said it entails lower than the FMV for listed firms are taxed at 15%. panies include in the is uncertain offered is low or the
Aarti Raote, partner, of the company. The In the case of unlisted compa- Esop contract. acquiring company COMMENCE A RUPEE-CBDC PROJECT
Deloitte India, a difference between nies, LTCG arises when the hold- When an employee acquires a part of the Cryptocurrencies are a heady mix of technology, politics, eco-
company that offers taxation and the FMV and the purchase price is ing period is over two years. It is wants to sell the shares, the pro- vested Esops for existing employ- nomics and game theory. CBDCs exemplify this the best. China’s
audit-related services, besides the gain for the employees, who taxed at 20% but with indexation moters will have the first right of ees and choose not to buy back the digital yuan project is being rolled out across the country and
business advisory and consult- need to pay tax on this gain in the benefit. “In the case of a foreign refusal. In other words, an vested options of past employees. over platforms such as Alibaba and WeChat. It is also expected to
ancy. financial year in which they company, the taxation is the same employee cannot sell the stocks to If the acquirer doesn’t buy back be extended to its belt-and-road initiative partners as the main
Here’s how Esops are taxed receive the shares. So, if the stocks as an unlisted company in India. It an outsider unless the promoters stocks of former employees, currency in place of the dollar.
when the company buys it back, are worth ₹1,000 apiece (the FMV) doesn’t matter whether the firm is agree. In such a case, an employee there’s nothing much you can do. Iran and Russia, among others, have been working on CBDCs
and the paperwork employees and the company offers them at listed abroad or not,” said must wait until the employer If the acquirer is only acquiring to attempt to wriggle out of the straitjackets of a dollar-centric
need to keep in mind. ₹600 apiece, the employee will Wadhwa. announces a buyback. Usually, Esops partially, the existing world where access to the SWIFT network is paramount. Crypto
need to pay tax on ₹400 (₹1,000 – companies buy back the Esops employees will need to wait for puritans abhor CBDCs for the centralization that it implies, but
THE BASICS ₹600). THE FINE PRINT when an employee quits. some more time until the firm it would behove any progressive government to explore CBDCs
To understand the taxation of “This difference between the If your employer is offering you Once the details are agreed goes for a buyback. as fiscal policy tools. Even the International Monetary fund (IMF)
Esops, there are a few jargons that FMV on the date of allotment and Esops, ensure that you get the upon, keep a copy of the contract. Look into the details to under- has acknowledged the potential for CBDCs to address key prob-
employees need to know. the buying price is taxed as a per- contract to understand what it You can also get it checked by a stand what the Esops really offer lems with cross-border remittance, currency substitution and
The quantity of stocks that an quisite, which comes under the entails. The contract, typically, lawyer to ensure it includes every- you and how much you will lose to transparent public book-keeping. Closer to home, Pakistan’s
employee would get is usually head ‘income from salaries’. The lays down the details of when thing you wanted. taxation. Securities and Exchange Commission recently published a draft
decided at the start of the financial employer will deduct the applica- Esops would be vested (will be regulation on its stand.
year but the day a company offers ble tax,” said Naveen Wadhwa, available to purchase), in what Crypto is not a panacea. However, it is a powerful technologi-
stocks to its employees is called deputy general manager, Tax- quantity, and other terms and For more stories about how to manage your cal, political and cultural phenomenon. Based on conversations
the grant date. On this date, the mann.com, a platform that pro- conditions. money life, listen to the podcast Why Not Mint with lawmakers and regulators, it does seem like things are mov-
company shares the details of the vides tax research-related servi- An employee can get a fixed Money with Mint’s Personal Finance team on ing ahead, albeit glacially. Surely it is time to expedite the crystal-
Esops with the employees. This ces. number of stock options annually htsmartcast.com. Invest smartly to make every lization of a clear approach to cryptocurrencies.
includes information such as the When employees sell the stock for a few years. For example, an penny count. Ramani Ramachandran is a crypto-investor and entrepreneur,
number of stocks the firm will either in a buyback or on the stock employer can offer 25% of the total and the author of an upcoming book

Best home loan rates If you do not pay advance tax instalments
A home loan is probably the biggest loan that one takes. Not only in terms of the loan
amount, but also tenure, which can be 15 years or more. The total final amount that one
pays can be double of what was borrowed. But a home loan is among the cheapest loans
on time, you will be charged penal interest
available, and usually it is the only way a person can buy a house. A home loan is called
a ‘good’ loan because it helps you acquire a tangible asset that can appreciate over the ISTOCKPHOTO
long term. It makes sense to buy a house if you plan to live in it. Given the fact that the Parizad Sirwalla However, please note that if
construction of several housing projects in India continues to be delayed or stalled by you are declaring your income
many years, financial advisers say that one should buy a ready-to-move-in house. Here’s a I am a 30 years old salaried in accordance with the pre-
look at the lowest home loan interest rates of some leading banks. person. I want to buy a sumptive taxation scheme
Loan amount = ₹30 lakh. Tenure = 20 years home in my mother’s name. under Section 44AD or 44ADA
I am depositing an amount of the Income-tax Act, 1961,
Interest (on which I have already you are only required to pay
Lender EMI (₹) Processing fee (excluding taxes) paid tax) in my mother’s 100% of the total tax by 15
rate (%)
account because only the March 2021.
Kotak Mahindra Bank 6.75-8.45 22,811-25,940 Up to 2% of loan amount + GST property owner can issue Any delay or deferment in
Punjab National Bank 6.80-7.90 22,900-24,907 Full waiver till 31 Dec 2020
the cheque in the name of payment of advance tax will
the builder. What will be have interest implications as
Union Bank of India 6.80-8.40 22,900-25,845 0.50% of loan amount (max. ₹15,000) + GST the taxability of this prescribed. In case the taxes
Bank of Baroda 6.85-8.70 22,990-26,416 Up to 0.50% of loan amount (min. ₹8,500; max. ₹25,000) amount in my mother’s or are not paid as advance tax or
my hands? there is a shortfall in the
Bank of India 6.85-8.25 22,990-25,562 Up to 0.50% of loan amount (min. ₹1,500; max. ₹50,000)
—Hital Negi advance tax payment, the bal-
Central Bank of India 6.85-9.05 22,990-27,088 Up to 0.50% of loan amount (max. ₹20,000) The amount deposited by ance tax liability would need to
Indian Bank 6.85-9.00 22,990-26,992 0.20-0.40% (₹50,000) you in your mother’s account ASK MINT If your total tax liability (net be discharged as self-assess-
would be considered as a gift. m TA X AT I O N of TDS on the estimated ment taxes, prior to filing of
Axis Bank 6.90-8.40 23,079-25,845 Up to 1% of loan amount (min. ₹10,000) As your mother shall receive income, is likely to be ₹10,000 the ITR along with applicable
Canara Bank 6.90-9.40 23,079-27,768 0.50% of loan amount (min. ₹1,500; max. ₹10,000) the gift, from a specified rela- or more during the relevant interest.
tive (her son in this case), the Both the places will cut 10% financial year (FY), you are Accordingly, you may pay
HDFC Bank 6.90-9.25 23,079-27,476 For salaried: up to 0.50% of loan amount or ₹3,000, whichever is higher + GST
transaction of gift itself will not tax deducted at source required to pay such tax by the entire taxes in advance as
ICICI Bank 6.90-8.05 23,079-25,187 1-2% of loan amount or ₹1,500, whichever is higher + GST trigger any income tax impli- (TDS). I am not sure if the way of prescribed advance tax per the prescribed instalments
Punjab & Sind Bank 6.90-7.60 23,079-24,352 Full waiver till festival campaign period cations for yourself or your companies will give me a instalments during the FY applicable to you, so as to avoid
mother. Form 16 for FY21. However, itself. interest implications on delay
Bank of Maharashtra 6.95-9.65 23,169-28,258 Waived up to 31 Dec 2020
We have presumed that the if I add both the incomes, I For FY21, an individual is or deferment in payment of
Nainital Bank 7.00-7.25 23,259-23,711 0.50% (min. ₹500; max. ₹10,000) + GST transfer of money to your will fall in the 20% slab. required to pay advance tax in taxes.
State Bank of India 7.00-7.85 23,259-24,814 Up to 0.50% of loan amount + GST mother is a gift, which is an How do I pay the extra tax four specified instalments (15% Parizad Sirwalla is partner
unconditional and irrevocable that I will be liable to? of the total tax by 15 June and head, global mobility servi-
Tamilnad Mercantile Bank 7.00% 23259 0.50% of loan amount + GST transfer. Should I pay it at the time of 2020, 45% by 15 September ces, tax, KPMG in India. You
Data taken from banks' website as on 10 December 2020. EMI range is indicative and calculated on the basis of interest rate range; it may include other filing my income tax return 2020, 75% by 15 December can send in your queries and
charges and fees. Actual applicable interest rate may vary based on the credit profile of the loan applicant. I have started working as a (ITR)? 2020 and 100% by 15 March views at mintmoney@live-
PARAS JAIN/MINT Source: MyMoneyMantra.com consultant at two places. —Jay Bajaj 2021). mint.com
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 12 MONDAY, 14 DECEMBER 2020
HYDERABAD

V EWS
OUR VIEW THEIR VIEW
MINT

Biden must create good jobs to

help heal scars of the pandemic
Tailored training plans that are run by local leaders might work better than offering tax breaks

the type of programmes that work.
On the skill-building front, so-called
“sectoral training” programmes have
been especially successful. These go
beyond traditional training: they are
tightly coordinated with employers and
provide skills customized to the needs
of specific industries, such as health
care or information technology. Work-
DANI RODRIK ers enrolled in the programmes receive
is professor of international political a variety of “wrap-around” services, ran-
economy at Harvard University’s John F. ging from childcare to job placement.
Kennedy School of Government The best known of these programmes
vice programmes are severely under-
funded. Bartik estimates that firms
receive $47 billion annually in state and
federal tax incentives for investment. By
contrast, total annual spending on cus-
tomized training and manufacturing
extension services, which is far more
effective in terms of job creation,
amounts to only around $1 billion.
A second problem is that pro-
grammes that are centred on workers
and firms are often not well coordi-
nated. Even though sectoral training

India must not weaken

is Project QUEST in San Antonio, Texas, programmes are built around a “dual-
in operation since the 1990s. There are customer” approach, their ability to
many others that operate on the same influence firms’ employment policies

T
he covid pandemic will leave the model. Such sectoral training schemes remains limited. Firm-centred policies
US economy with a deeply scarred have been shown to increase disadvan- can overlook local employment needs if

its resolve on inflation labour market. More than 20 mil-

lion jobs have been lost, and only half
have been regained. Not surprisingly,
job losses have hit disadvantaged and
taged workers’ earnings by more than
20% on average at a relatively low cost.
Likewise, we have considerable expe-
rience on the demand side to guide us.
they focus on other objectives, such as
innovation through new technologies.
Effective programmes to create good
jobs are tailored to specific communi-
less educated workers especially hard. Tax incentives and open-ended invest- ties’ needs and must be driven by local
This aggravates a pre-existing trend. ment subsidies can attract firms to lag- leadership. But the federal government
Calls to loosen RBI’s inflation target range have arisen, but this would be ill-advised. Price Long before the pandemic, the US ging regions, but they are not particu- can also play a major role. It can under-
labour market was becoming increas- larly effective. They are expensive and write a massive boost in funding and
stability is a prerequisite for sustainable GDP growth and so we must maintain our guard ingly polarized. Good, middle-class jobs often waste public resources on projects encourage states and localities to
had been disappearing for decades, that would have been realized anyway. engage in more experimentation. There
owing to automation, deindustrializa- What works much better, as Tim Bar- is thus a huge opportunity here for the
tion, global competition, and the advent tik of the W.E. Upjohn Institute for Biden administration.

T
he Reserve Bank of India’s (RBI’s)
retail inflation target is scheduled
for review once its validity expires
early next year. Under the flexible
inflation-targeting regime adopted
by the country in 2016, it is cur-
rently set at 4%, with leeway of 2 percentage
points above and below it. After covid pushed
our economy into a deep recession, calls for
this target band to be relaxed have grown
louder. Doing so would grant our central bank
more space to keep its policy rates of interest
+ low for longer in support of growth, argue
advocates of a relaxation. Some would even
have us abandon the framework entirely,
arguing that rising prices in India need not
always reflect excessive money supply, and
instead let RBI formulate its monetary policy
for a judicious mix of economic aims, as was
the case earlier. Any such move, however,
would be ill-advised. Along with India’s adop-
tion of a bankruptcy code and the goods and
service tax, RBI’s mandate to maintain price
stability was a major reform of the Narendra
Modi government’s first term in office. For
touched earlier this year, setting the stage for of the “gig economy”. Employment Research has shown, is to Biden has promised to raise the fed-
strong growth in 2021-22 on a shrunken base. To restore the health of America’s provide customized business or infra- eral minimum wage and to encourage
economy, society, and polity, President- structure services to local firms. Tai- greater unionization. Beyond these, his
Unless supply somehow keeps pace, a sudden elect Joe Biden’s administration must lored to [their] needs, assistance of this plans rely heavily on tax incentives.
increase in demand could push prices up. answer a straightforward question: kind can help them become more pro- Companies that increase employment
Ample liquidity underlines this risk. Apart “Where will the good jobs come from?” ductive and expand employment capac- in the US would get tax credits, while
from using other tools of cash infusion, our Good jobs require specific skills and ity by overcoming the constraints they those that invest abroad and boost
central bank has dropped its key policy rate— can be created only by productive firms. face. These programmes require build- imports would face tax penalties. He
Creating good jobs in ample quantities ing relationships between local firms also intends to increase spending on
the one at which it lends money to banks—by requires addressing both the supply and and prospective investors. goods made domestically and on gov-
more than a whole percentage point in 2020 demand sides of the problem. The bad news is that these successful ernment research and development.
so far. At 4% now, its repo rate is well below On the supply side, workers must be worker and firm-centred initiatives cur- These tax incentive, procurement
inflation, which has now stayed above RBI’s equipped with the hard and soft skills rently operate at a very small scale. Sec- and innovation plans are expected to
upper limit of 6% for a span of time too long to that productive firms require. On the toral training programmes are typically cost several hundred billion dollars. A
demand side, there must be a large operated by community groups or non- significant increase in locally developed
be dismissed by economic agents as a blip. enough segment of smaller and medi- governmental agencies, and limited and managed programmes to create
It is also true that any over-indebted govern- um-size firms that are both productive funding, as well as a lack of interest from good jobs would be a pittance in com-
ment could be tempted to inflate some of its and able to expand employment. state agencies, prevents them from parison. Biden should go further, by
debt away by letting prices rise. This should be Markets alone will not solve the prob- being scaled up. As a result, the workers building on such programmes’ demon-
resisted. Our past experience shows that infla- lem. Governments at all levels must be they serve number in thousands instead strated successes and making them the
actively involved. The good news is that of the millions that need to be reached. cornerstone of his strategy to rebuild
tion is a little like wildfire—hard to contain we have considerable evidence about Similarly, customized business ser- America. ©2020/PROJECT SYNDICATE
once it breaks loose. Not only does it singe the
common man, especially the poor for whom
high inflation acts like a regressive tax, it is
repressive of savers who find the real value of
their savings depleted if interest rates fail to
compensate for it. In general, negative or poor
returns on capital in an economy would www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Chandigarh*, Pune* Tuesday, December 14, 2010

China offers to start

DIPLOMACY:
Vol.4 No.296 `3.00 32 PAGES

the sake of our economy’s future, it deserves engender the risk of pushing it into a “liquidity FTA talks during Wen’s visit >4
MARKETS: After I-banks, registrars join the
price war for PSU mandates >4
ECONOMY: Spiralling crude oil prices may

neither dilution nor dumping. The prime pur- trap”, as private agents would have no incen- SENSEX 19,691.78 Æ 182.89
EXCLUSIVE PARTNER

NIFTY 5,907.65 Æ 50.30 DOLLAR `45.13 Æ `0.08

pose a challenge to decelerating inflation >11
VIEWS: VR Narayanaswami presents a selection
of the words of the year >31

EURO `60.13 Æ `0.69 GOLD `20,455 Æ `80 OIL $92.09 Æ $1.61

pose of the 2016 shift, the creation of a stable tive left to lend money. It is the promise of CCI wing says
NSE stifled
competition
JPC OPPOSED

Sonia sends out

Bankers going QUICK EDIT
slow as fear Shameful
grips industry statistic

monetary basis for sustainable long-term price stability that allows us to rely on long- B Y A NIRUDH L ASKAR
N . S UNDARESHA
S UBRAMANIAN
·························
MUMBAI

T
&

he director general (DG) in

graft warning
B Y A NUP R OY &
D INESH U NNIKRISHNAN
·························
MUMBAI

S tate-owned banks have al-

most stopped deciding on
N ine years ago, on 13
December, terrorists
attempted to storm
Parliament House in New
Delhi, India’s seat of
democracy. On Monday,

growth, must not be lost sight of. range financial projections made in Indian
charge of investigations at loan disbursements because both houses of Parliament
the antitrust watchdog has Asks parties to unite most bankers are scared to observed the mandatory

found that the National Stock
Exchange (NSE), the country’s
biggest bourse, had unfairly
stifled competition in the trad-
ing of equity derivatives to the
detriment of its older but
smaller rival Bombay Stock Ex-
against corruption; take calls on these in the wake
of ongoing investigations by
apex court wants to federal agencies into loans giv-
know whose complaint en by banks to some realtors
and telecom operators.
led to Radia phone taps Some banks have stopped
processing loans, especially to
Inflation is taxation
two-minute silence to
remember those who died
during that attack. A
building alone doesn’t a
democracy make—it’s
also the people inside it
and what they do there.

It is true that India’s economic contraction, rupees. Importantly, that avowal also lowers
change (BSE).
The DG’s office at the Com-
petition Commission of India
(CCI), in a 245-page report fol-
B Y L IZ M ATHEW real estate firms and small and In a way, it was the
liz.m@livemint.com medium enterprises, or SMEs. people and the process
························· The fear among bankers is that came under attack in
NEW DELHI palpable. 2001. So, it is unfortunate

lowing a probe, said NSE had
done this by systematically
waiving fees on transactions in
2000-02 to gain market share
when equity derivatives trad-
O
without legislation.
n the day Congress “Who wants to take unnec- that soon after
president Sonia Gand- essary risks when everybody is remembering the dead,
hi put the government LOW POINT after your life and looking to parliamentary
on notice over corruption, the The demand for a JPC on the 2G spectrum find fault?” asked a junior proceedings descended
Supreme Court decided to get allocation issue in the winter session credit officer at a state-owned into chaos—the hallmark

as seen in early estimates for the first half of risk premiums in the extended credit market
ing was in its infancy. Mint has
reviewed a copy of the report.
In March, CCI directed the
DG’s office to investigate pric-
ing practices at NSE and sub-
mit a report in 45 days follow-
ing a complaint by rival MCX
Stock Exchange Ltd, or MCX-
SX, which had alleged predato-
to the bottom of the phone- saw the Lok Sabha function the 66 67 67 bank in Mumbai. of business in the two
least in the past 25 years. 63 64
tapping controversy involving 59 59 India’s apex court has re- houses since 9 November
lobbyist Niira Radia by asking cently ordered the Central Bu- when the winter session
the government to confiden- Productive reau of Investigation (CBI) to began. Since 1947, each
tially disclose the name of the time probe loans given to compa- successive Lok Sabha has
(as % of total 33 36
person who made the com- nies against their telecom li- spent less time on
plaint on the basis of which the available hours) cences. State Bank of India business than the
recording was sanctioned. 5.5 9 (SBI) has given `10,000 crore previous one, and no
Addressing the Congress to four telecom companies and business at all got done in

2020-21, necessitated cheap credit as RBI’s and thus eventually the overall cost of capital,
ry pricing by NSE in the cur-
rency derivatives segment.
Based on the report, the
commission will hold a hear-
ing on 15 December.
To be sure, the report only
amounts to the findings of the
investigation. CCI is expected
Parliamentary Party, Gandhi bank officials maintain that the winter session this
said: “It is a painful fact that
Session no. 6 6 1 15 6 8 11 2 10 12 1 there is no wrongdoing in the year. This is a shameful
corruption seems to be wide- Lok Sabha 15th 11th 14th 10th 13th 13th 14th 14th 14th 10th 15th loan sanctions and all rules statistic and it doesn’t
spread and I feel strongly that were adhered to while disburs- reflect well on the
it is our responsibility as well Year 2010 1997 2004 1995 2001 2001 2007 2001 2007 1994 2009 ing them. government and the
as that of each and every polit- opposition.
Source: PRS Legislative Research
ical party to together seriously TURN TO PAGE 3®
AHMED RAZA KHAN/MINT
devise a way, a mechanism, to

top priority in its laudable effort to keep com- which is crucial to growth. From a classic per-
to deliver a final ruling only af-
ter giving an opportunity to
NSE and other parties involved
to present their case.
CCI chairman Dhanendra
Kumar declined to comment.
He also reserved comment on
whether a decision will be tak-
en on 15 December.
Officials from both BSE and
curb this growing menace.”
Gandhi, however, provided
crucial political support to the
government’s stance of not
agreeing to an inquiry into cor-
ruption by a joint parliamentary
committee (JPC), especially be-
cause the opposition, led by the
ernment’s actions and said: “It
is abundantly clear that the
government is determined to
get to the root of the matter. It
is preposterous to suggest that
the government has something
to hide or it is shying away
from the investigation.”
MI LTON F R I E D MA N
Bharatiya Janata Party (BJP), The opposition had de-
had not allowed Parliament to manded a JPC to inquire into

merce going and contain the pain. However, spective, the stability of a currency is the core
NSE declined to comment and
said they did not have access
to the contents of the report.
While concluding that NSE
had tried to stifle competition
in the currency segment by
waiving transaction fees, the
report observed it had a long
history of such behaviour be-
function after the government
rejected its demand for a JPC.
She also sought to revive
party morale and engage in
political damage control by fo-
cusing on Congress leadership
in pursuing redistributive jus-
tice through a series of social
welfare programmes. “It is for
several corruption charges in-
cluding the alleged irregulari-
ties in the second-generation
(2G) spectrum allocation. The
government, however, rejected
the demand arguing that the
parallel inquiry over the cor-
ruption allegations was already
happening. It was referring to

this shock was caused by a one-off event, our job of its issuer. Let’s not undo our hard-fought
ginning in early 2000.
Sharad K. Sharma, addition-
al director general, headed the
panel that conducted the in-
vestigation.
“Turnover figures clearly
TURN TO PAGE 2®
us all to take the message of
these programmes to the four
corners of the country and
wherever necessary to put
pressure on state governments
and local administrations to
ensure that their benefits
reach the people,” she said.
Analysts were not convinced
the public accounts commit-
tee, a parliamentary body that
is examining the Comptroller
and Auditor General report
into the 2G allocation, an in-
quiry by the Central Bureau of
Investigation (CBI) and anoth-
er probe by retired Supreme
Court judge Shivraj Patil.

nationwide lockdown, the easing of which has pre-2020 gains on inflationary expectations
by the statement.
“You have not shown any
willingness or commitment to
deal with the situation,” said
Pratap Bhanu Mehta, presi-
dent, Centre for Policy Re-
search, a Delhi-based think
tank. “Simply commenting on
the system will not help.”
Saying that the Congress had
always stood for transparency
and probity, Gandhi pointed
out that it has asked ministers
and chief ministers to step
down even when no charge
has been established or no
misconduct had been proved.
The Congress forced former

allowed commercial activity to resume by and by letting monetary myopia get the better of
Gandhi was speaking on the
concluding day of the winter ses-
sion of Parliament, which man-
aged to function only for 5.5% of
its scheduled time—the least
productive session in 25 years.
The winter session was ad-
journed sine die on Monday
Maharashtra chief minister
Ashok Chavan to resign over
the allotment of houses in the
Adarsh Cooperative Housing
Society in Mumbai, meant for
TURN TO PAGE 3®
ALSO SEE

by. Latest indicators suggest that a rebound
our long-term interests. We mustn’t let covid
Mint is also available for R5.50 with
Hindustan Times under a combo offer
after 22 days and will now re-
assemble for the budget ses-
sion early next year. >OurView: The subtext of corruption >P30
Gandhi defended the gov- >Tata poser on press freedom, privacy >P3

could well be underway from the depths weaken our resolve against inflation.

MY VIEW | MODERN TIMES

How ugly public spaces could work to reassure people

I once saw the newly-built head office of a
MANU JOSEPH fellowship of patriots. They had worked
hard to make it look hideous . The brief to
the architect must have been “Make it mod-
ern but Indian, and atheistic”. The result is
an irregular thing whose ground floor has
do almost anything and get away. cable-stayed bridges and grand exquisite age when rocket science was hot—by chiefly
Urban order is a form of intelligence, but buildings, have vast uses, but they also con- pitching satellites as a welfare programme
it also creates a sense of loneliness, a kind of tribute to disharmony in society, for they for farmers. This way, India’s space pro-
structured gloom. For instance, when an visually emphasize the failures of the gramme did not infuriate the poor.
affluent nation solves its urban congestion, unlucky. For instance, imagine how the poor It is not only India’s poor who feel a con-
it does so by creating vast infrastructure that of western Europe might feel in the spectac- nection to India through its spatial chaos; it

is a journalist, and a novelist,
most recently of ‘Miss Laila,
Armed And Dangerous’
This PDF was originally uploaded to Mint Newspaper - ePaper (https://t.me/mint_epaper). Subscribe now to get this edition before anyone else!! Backup channel: @news_backup
X
W
hen the government recently
revealed the design of India’s new
parliament building, Indians
debated its beauty. But they did not ask an
important question. Did the government
wish to achieve beauty? Symbolism, yes;
safety and economy, of course, but beauty?
The thing is, it is actually very rare for India
to consider beauty an important factor in the
design of a building, or even a town. Provin-
cial India, which also rules the country to a
significant extent, somehow accepts that
temples and other religious places should be
primarily beautiful, but not other kinds of
buildings.
From an aesthetic point of view, India
today is where Indians where until recently
with respect to tourism—they needed the
excuse of God and pilgrimage to spend
money on the fun of travel. Without God,
modern India is a bit lost about architectural
beauty. The country seems unconvinced
that it should spend immense amounts of
money on spectral secular beauty.
large rectangular glass windows, and the
floor above has contiguous arches like the
gums of a toothpaste model. There are slim
pillars here and there. As the building is not
colonial or Hindu or Islamic, or beautiful in
other ways, it is familiar to most Indians who
pass by as a place that is contemporary.
Much thought goes into the ugliness of our
great republic.
As this column had once argued, most
nations in plain sight try to look richer than
they are; India in plain sight is a lot poorer
than what it is in reality. And this modern
spatial ugliness of India performs an impor-
tant function.
It reminds most Indians that the nation
belongs to them. This is similar to the effect
of street chaos and our general civic disor-
der—millions who hail from chaotic places,
who only know chaos and the absence of
order, are not alienated. Except for some
exquisite metropolitan services, like the
Delhi Metro, India’s public spaces truly
belong to India’s public. They feel they can
hides humans—by distributing people ular urban beauty of its great cities. You are is also ordinary Pakistanis.
across so many broad in Paris, say, and broke, About 18 years ago, when I visited Paki-
streets that the human ele- gloomy and jobless, then stan, I could see that most ordinary Paki-
ment on every lane is thin, The country’s you walk into a spectacular stanis did not have a grasp of what India
or by putting them in safe lane. I think you will feel really was. One evening in Peshawar, a con-
swanky trains under the architectural more broke, gloomy and servative, bearded 20-year-old Pakistani
ground or in covered walk- jobless. boy barged into my hotel room. I thought,
ways. The idea is not to
ugliness serves The poor in a rich coun- like many Pakistanis before him, he wished
hide people; however, it is a purpose: it try are like a bitter Twitter to bore me with claims of neighbourly
the by-product of a good page trapped in Instagram, brotherhood. But he had only one thing to
city plan.
The disorder of India
reminds most where everyone else is
beautiful and having a good
say, a question: did girls in Bombay really
dance the way they did in Hindi films?
should not be venerated. It Indians that time. Even though a major- A common view in Pakistan of India was
kills thousands every day ity there have access to a that it was more fun, more decadent and
and causes unspeakable they belong quality of life in public pla- glitzy. But these perceptions did not make
misery to the poor. Even ces that is superior to that them grow fonder of India. They admired
so, like the industry of of millionaires in India, the supposed successes of modern India, but
electoral politics, it does contribute to peace they probably harbour the disenchantment not India itself. What they found appealing
between the classes. The persistence of of being surrounded by the exquisite . about India were the unflattering qualities I
India’s poverty, its chaos, its mismanage- India, on the other hand, makes even tech mentioned that made India resemble Paki-
ment, and the sheer ugliness of its public look ugly by promoting it as science that has stan, a nation that was still poor and whose
spaces ensure that nobodies do not feel like no good reason to exist if it is not helping public spaces largely belonged to the poor,
foreigners in their own nation. some poor farmer check the prices of crops. where politicians were corrupt, bridges col-
Grand symbols of progress, like giant India even made rocket science boring in an lapsed and trains fell into rivers.
 MONDAY, 14 DECEMBER 2020
HYDERABAD 13
V EWS
GUEST VIEW M I N T C U R AT O R

A plan for India to carve its own The petty history of America’s
presidential power handovers
space in the AI dominance race Trump’s exit is a throwback to a less graceful era of partisanship

We needn’t obsess over algorithm development for artificial intelligence so long as we focus on making the best use of its tools

ISTOCKPHOTO

STEPHEN MIHM
is an associate professor of history at the
University of Georgia and a contributor to
Bloomberg Opinion
SANTANU BHATTACHARYA
is chief data scientist at Airtel, visiting professor
at Indian Institute of Science, and a former Nasa
scientist

I
n 1797, president George Washington
was determined to unambiguously hand
over the nation’s reins for the first time.

T
oday, India lags behind significantly in
the global artificial intelligence (AI)
race, compared to the US or China.
Indian universities or institutes are not
yet top-notch AI-research entities,
either measured by citations or other
parameters such as winning prestigious AI con-
tests. Most recently, Chinese scientists have dem-
onstrated and claimed “quantum supremacy” in a
race that seems to upend Google and the US.
However, it is not too late, nor is it to India’s
disadvantage not to have top-notch algorithm
developments taking place outside the country.
The reality is that most useful algorithms make it
to the public domain quickly, leading to their wide
availability.
Algorithms are not hard to get, data is.
Indeed, one could argue that there could be
advantages in not getting into the algorithm race,
at least as a short-term winning strategy. We can
let others do the complex and expensive job of
creating these algorithms, and focus on India-spe-
cific use cases and data instead.
India’s national goal should be to turn data into
useful “knowledge”, specific to solving our own
+ problems.
In data science, “knowledge” comes from gener-
al-purpose algorithms and good-quality data.
Creating good quality data, which can be anywhere
between 5–30% of the total data (and rarely more),
takes up the majority of preparation time for any
AI work.
Availability of a large amount of country-spe-
cific, contextual and clean training data could be a
major source for creating useful and actionable
knowledge about data.
Hence, rather than focusing on winning the
algorithm race, India should focus on creating data
infrastructure in key areas. Think of data being the
new oil (you would have heard this cliche before),
and an algorithm being the refinery. Oil here is the
asset, and the latest refinery can be always be
bought or imported.
The real win for India would be to create data
infrastructure that will improve the quality of life
at an everyday level, and significantly enhance
governance. This would elevate interoperability,
which in turn would reduce operational costs and
serve as a “template” for developing a post-covid
global AI economy.
This will a good fit for India, given its strength in
process-driven white-collar and technology jobs,
a heritage that goes back to the days of early call
centres, business process outsourcing entities,
and software development industries. Collectively,
they trained millions of people and built formida-
ble, world-class industries that powered the
developed world.
Post-covid, this proposition is even more impor-
tant. A jump in data usage in India during the covid
pandemic has resulted in a significant increase in
the amount of data in existence. Digital data in
India was around 40,000 petabytes in 2010, and
this number is projected to shoot up to 2.3 million
petabytes by 2020, twice as fast as the worldwide
rate. Also, the government’s Atmanirbhar Bharat
(self-reliant India) initiative is focused on the
localization of manufacturing, products and tech-
nology, including citizens’ data.
The key to success would be to solve the most
pressing problems in the private sector, public and
government services, and taking a five-year view to
plan and fund these.
Projects for the private sector could be: Address,
Identity and Gender Disambiguation. Doing so
could make the delivery of everything from food
and parcels to medicines more efficient, and lower
the interest rates on loans. Gains through such effi-
ciencies can add up to 1% of India’s gross domestic
product (GDP). Our estimate is that building an
AI-based product to identify a location correctly
for an address in India can add almost 0.5% of GDP,
or about $12 billion.
Projects for public services could be: Optimiza-
tion of public transport in the post-pandemic
world, using sensor-based data collected as part of
the Indian government’s smart city programmes.
Imagine the impact of even a 5% annual additional
improvement in traffic capacity for the next 10
years in Indian cities that are plagued by traffic
delays and productivity problems.
Projects for government services could be: Inte-
gration of public services and spending to ensure
predictive usage of scarce resources for growth.
India has also built a world-class payments plat-
form, the Unified Payments Interface (UPI). The
results are dramatic. More UPI transactions were
done in the past 18 months than through the
country’s credit cards in 18 years.
Besides uplifting hundreds of millions of people,
these planetary-scale platforms are enabling over
9,000 startups to build products and services on
top, thus expanding the digital economy rapidly.
If India can build public infrastructure for the
unique digital identity of a billion-plus people
(Aadhaar), an open payment system (UPI) that has
enabled direct payment of government benefits to
hundreds of millions of its poor, then it can do the
same for public AI infrastructure as well.
The opportunity to chart a new AI future is now.
Each country will chart its own unique course in
the AI race. India’s strength lies in its large work-
force that can take part in collecting and codifying
data for consumption and in creating large-scale
technology infrastructure.
We should focus on that, rather than on algo-
rithm games like the US or China. While doing so,
we should also take advantage of technologies that
protect user privacy and enable the generation of
unbiased AI decisions to ensure that the outcomes
and recommendations of it are acceptable in a
country as diverse as India.
The journey is only 1% done so far, and the clock
resets every single day, enabling us to start our AI
race afresh.
He attended the inauguration ceremony of
John Adams, his vice president, to show his
support. At its conclusion, he offered a
symbolic gesture of subservience, waiting
for Adams to exit the room before he did.
Unfortunately, Adams struggled to fol-
low Washington’s patriotic lead, turning
the peaceful transition of power into a
stage for his own insecurities and pettiness.
He wouldn’t be the last leader to act out
during these critical moments for Ameri-
can democracy.
On his first full day as president, John
Adams found the time to complain to his
wife in a letter about Washington’s mag-
nanimous behaviour. His predecessor, he
wrote, “seemed to enjoy a triumph over
me. Methought I heard him say, ‘Ay, I am
fairly out and you fairly in! See which of us
will be happiest!’”
Adams soon became engulfed in contro-
versy. He waged a vicious war on the politi-
cal opposition, using the Alien and Sedition
Acts to prosecute followers of Thomas Jef-
ferson for the crime of mocking Adams in
their public writings and private corre-
spondence. Thin-skinned and vindictive,
Adams tried to stay in power—and failed.
Jefferson ultimately defeated Adams.
Well before dawn on Inauguration Day,
Adams decamped from Washington in a
horse-drawn carriage, gloomily returning
home to Massachusetts.
Some of his more charitable biographers
have argued that this flight was simply an
attempt to avoid stealing the limelight. But
his son John Quincy Adams did something
very similar in 1828 when he lost to Andrew
Jackson. Unlike his dad, his decision was
based on the cabinet’s advice, almost all of
whom hoped to avoid further embarrass-
ment after an absolutely brutal campaign.
The younger Adams therefore exited the
White House the night before Jackson’s
inauguration, moving into a rental in the
city. The day of the big event, he went
horseback riding with some friends on the
outskirts of the city. In his diary, he dwelled
on his own predicament rather than the
nation’s. “I can yet scarcely realize my situ-
ation,” he wrote.
When Jackson stepped down, he gave
way to Martin Van Buren, his hand-picked
successor. No conflict there. In fact, the two
men invented a new transition tradition:
outgoing and incoming presidents riding
together to the inauguration in a carriage.
Presidential transitions remained
remarkably civil until Andrew Johnson’s
Presidents viewed as the worst are usually
the ones who exit badly AP
disastrous term. Much like President
Trump, Johnson proved a terribly divisive
figure. His eventual replacement, Ulysses
S. Grant, loathed him as much as anyone.
In the end, though, it was Grant who
came off looking like a sore loser—despite
winning the election. When Johnson cele-
brated his 60th birthday at the end of 1868,
he decided to throw a party for his grand-
children, inviting hundreds of the kids
from the elite families of Washington.
The man who had brought the Confed-
eracy to its knees refused to allow his kids
to join the fun. Johnson’s secretary of the
Navy, Gideon Welles, reported the inci-
dent in his diary, blaming Grant for “mani-
festing … his rancorous and bitter personal
and party animosity. Not much that is good
can be expected for the country from such
a character.”
But Grant wasn’t done taking swipes at
Johnson. He also blew off an invitation to
Johnson’s New Year’s Day reception a cou-
ple days later, sending a few low-level staff-
ers instead. When it came time to plan for
Inauguration Day, Grant declared that he
would not share a carriage with the outgo-
ing president. The two sides began a pre-
posterous series of negotiations that ended
with a plan to have two carriages that
would pass each other on the street. John-
son eventually opted out of the day’s festiv-
ities entirely. Though Johnson is routinely
listed as one of the worst presidents, Grant
is often lumped in with him as well.
Though subsequent transitions have
been tense, they never degenerated to this
degree. Herbert Hoover despised Franklin
Delano Roosevelt, but they still shared a
carriage on the way to the ceremony.
Dwight Eisenhower and Harry Truman
squabbled a great deal, but they rode
together in a limousine.
It may not be a coincidence that presi-
dents who behave badly during transitions
usually share something else in common,
too: They’re viewed as the worst presidents
overall, which suggests that the behaviour
that marred their exit from the White
House may have been symptomatic of
deeper deficiencies.
As for outgoing President Trump, he’s a
throwback to a less civilized, more acrimo-
nious era of petty partisanship. Expect him
to go all out in his attempts to rain on
Biden’s parade. ©BLOOMBERG

MY VIEW | IN THE MARGINS

A redux of the Modi government’s Thatcher moment

exchange crisis. One notable and important
VIVEK DEHEJIA exception was the set of reforms pushed
under the Atal Bihari Vajpayee government
(1998-2004), which seemed to carry a genu-
ine ideological conviction. Of course, the
long tenure of the Manmohan Singh govern-
parties. In the face of Congress leader Rahul
Gandhi’s “suit boot ki sarkar” jibe, alleging
corporate influence, the Centre blinked.
When the land-acquisition reform was
hanging in the balance at the time, I argued
in these pages (‘Modi’s Thatcher moment’,
and services tax (GST), the government held
back on crucial labour law and agricultural
sector reforms during its first term. One
might have thought that Modi’s thundering
re-election in 2019 would encourage the
government to push ahead with aggressive
supporters win critics over. Even less useful
is to blame India’s messy democracy for the
difficulty in carrying forward reforms, as at
least one prominent government official
appeared to recently. Helpful or not, India’s
brand of democracy, which requires the care-

T
he government of Prime Minister Nar-
endra Modi (2014-present) deserves
credit for seizing the economic crisis
induced by the covid pandemic and related
lockdown as an opportunity to push through
difficult but necessary structural or “supply-
side” reforms—in particular on labour and
agriculture. I leave aside the more conten-
tious proposal to allow corporatization of the
is a Mint columnist banking sector, which raises some uniquely
thorny issues.
The firestorm of protests from a select
group of farmers, who have received a mega-
phone from the domestic and international
press, as well as opportunistic support from
opposition parties, which finally see a possi-
ble wedge issue to use against Modi’s gov-
ernment, is a salutary reminder of what I
have previously called, invoking a classical
Christian metaphor, the “original sin” of
reforms. Going back to the original reforms
of 1991, important reforms in India have
been undertaken under the cloud of an eco-
nomic crisis—in that instance, a foreign
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X
ment (2004-2014) was marked by a com-
plete absence of major structural reforms.
The problem of reforming under the gun
of a crisis is that policymakers do not need to
articulate why they are necessary and make
a reasoned case to voters. Another allied
mode of doing reform in India has been by
stealth—do a reform and hope that no one,
especially would-be critics, notices. This has
the same feature. The problem is that, when
reforms are done in crisis mode or by stealth,
one misses the opportunity to build a
national consensus around reforms, and on
liberal economic policy more generally.
Opportunistic reforms are more likely to
give way under pressure than ideology-
driven, principled reforms. Thus, the origi-
nal reforms under the P.V. Narasimha Rao
government (1991-1996) lost steam midway
through the administration’s term, after
electoral reverses. Likewise, the Modi gov-
ernment, in its first term, abandoned a con-
troversial land-acquisition reform in 2015
after pushback from farmers and opposition
15 March 2015) that it was a golden opportu-
nity for the Modi govern-
ment to make a principled
case that the change would It must seize this
be good for everyone, as a
way to defang the political- chance to make
ly-motivated opposition.
Alas, this did not happen,
a principled
and we know the sequel to case for farm
that story.
It is also my belief that its
bad experience in pushing
reforms and
the land acquisition bill win support for
dampened the Modi gov-
ernment’s enthusiasm for liberal policies
further structural reforms
in its first term in office,
again, leaving aside the controversial
“demonetization” decision of 2016, which,
whatever it was, cannot be called a conven-
tional economic reform. Apart from some
important technocratic reforms (the mone-
tary policy framework and insolvency and
bankruptcy code), and, of course, the goods
reforms, but, again, we were disappointed.
The government, rather,
seemed to put the economy
on the back burner and
concentrate on its non-
economic, cultural agenda.
The turning point evi-
dently came with the covid
crisis and its aftermath,
which seemed to give a new
sense of urgency to the gov-
ernment in pushing ahead
with its unfinished reforms
agenda. For this, as I said at
the outset, it deserves
credit. However, the lessons
of 2015 bear recalling today.
Reforms pushed opportunistically during a
crisis are more fragile, and vulnerable to a
U-turn under pressure, than principled
reforms. Nor do they durably build a political
constituency for further reforms, as Rao dis-
covered in the mid-1990s. Nor will banners
and charts tweeted by the government and its
ful creation of a consensus among disparate
interest groups, places automatic checks and
balances on any government that attempts to
ram through even good reforms that are
insufficiently well “sold” to the public and
directly affected groups.
Back in 2015, I argued that the land acqui-
sition bill and the opposition it faced was
Modi’s “Margaret Thatcher moment”. Here
was an opportunity to make a principled
case to the electorate, and then to hold one’s
resolve in the face of politically-motivated or
parochial opposition to a reform self-evi-
dently in the national interest—just as
Thatcher had stared down the UK’s coal
miners in 1984-85, and ultimately won.
Unfortunately, in 2015, faced with the
Thatcher test, Modi backed down, and the
cause of reforms was set back.
We’re at a turning point again. One could
argue that Modi in 2015 was new in power
and cautious in picking his battles. Modi in
2020 is a seasoned, powerful leader. Let’s
hope he fulfils the promise of the moment.
 HYDERABAD, NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, CHANDIGARH*, PUNE*
DON’T MISS
Online FMCG
shopping picks up
More consumers bought
goods of daily use online
during this festive
season than in the
previous yearSee Page 5
MTAR Tech to file
for ₹650 crore IPO
The Hyderabad-based
precision engineering
company is planning to
file its draft IPO papers
soon. See Page 6
Loan collections
uptick brings relief
Most banks and even
NBFCs reported a rise in
repayments after the
economy unlocked from
June. See Page 4
Viatris plant on
sale amid rejig
Viatris, the entity formed
by the merger of Mylan
and Pfizer’s arm Upjohn,
+ aims to sell its API plant
at Taloja. See Page 3
*In North India as per the Technopak Report. **During FY ended Mar 31, 2020. ***Source: Technopak Report - Indian biscuit export market share in calendar year 2019.
#
Source: Technopak Report. ##For the period between Apr 1 – Sep 30, 2020. $Source: Primary and Secondary Research - Processed and semi-processed dough-based offerings.
Mrs. Bectors Food Specialities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, an initial public offering of its equity shares and has filed the Red Herring Prospectus with the Registrar of Companies, Chandigarh. The Red
Herring Prospectus is available on the website of SEBI as well as on the websites of the book running lead managers, SBI Capital Markets Limited, ICICI Securities Limited and, IIFL Securities Limited at www.sebi.gov.in, www.sbicaps.com, www.icicisecurities.com and www.iiflcap.com,
respectively. Investors should note that investment in equity shares involves a high degree of risk and for details refer to the Red Herring Prospectus, including the section titled “Risk Factors”.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws in the United States, and unless so registered, may not be offered or sold within the United States except pursuant
to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on
Regulation S under the U.S. Securities Act and applicable laws of the jurisdictions where such offers and sales are made. There will be no public offering in the United States.
This PDF was originally uploaded to Mint Newspaper - ePaper (https://t.me/mint_epaper). Subscribe now to get this edition before anyone else!! Backup channel: @news_backup
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MONDAY, DECEMBER 14, 2020
LIVEMINT.COM
Centre open to innovative
models to decongest cities
The regulatory sandbox framework will help firms develop fresh mobility solutions
Shreya Nandi
shreya.n@livemint.com
NEW DELHI
S
tartups could soon get to
Shun try out novel transport
arrogance and
scrap farm
models in cities under
laws: Kejriwal so-called regulatory sand-
to Centre boxes to live-test promis-
bit.ly/2WcihxK ing services, as the government
bets on innovation in mobility to
ease urban congestion.
This will be similar to the central
bank recently proposing such
sandboxes for the fintech sector to
introduce new products in a limited
environment, without a wider and
expensive rollout.
“We are ready to provide a regu-
latory sandbox to any company that
comes with a better (transport)
model and help them to fine-tune
their model. We will ensure that
regulation does not kill innova-
tion,” road transport and highways
secretary Giridhar Aramane said in
an interview.
The government is open to the
idea of startups or companies intro-
ducing fresh mobility models
beyond cab aggregation which has
already become established over
the last decade.
“We are willing to look at that.
Innovative models will be given a
VOL. 14 NO. 300 Rs 15.00
FARMERS FEAR ABOLISHMENT AUTO HIRING SUSTAINS PACE
OF MSP, SAYS SIRAJ HUSSAIN uP8 POST FESTIVE SEASON uP3
‘Building
synergies key
TWITTERVERSE
to combating
security woes’
Elizabeth Roche
Joe Biden
@JoeBiden
elizabeth.r@livemint.com
Wear a mask. It’s the
NEW DELHI easiest thing you can do
to reduce covid cases,
F
oreign minister S. Jais- hospitalizations, and
hankar on Sunday made a deaths. It’s not a politi-
HT strong case for building cal statement—it’s a
tested in the transportation space. synergies among various arms
patriotic act.
While there can be one common of the government as well as the
idea, implementation will have to military to meet security chal-
vary from state-to–state depending lenges, such as unsettled bor-
on mobility requirements. ders and terrorism.
Ola Mobility Institute, a think Jaishankar pointed out that
tank set up by cab aggregator Ola, the current day national secu-
said that India needs to implement rity challenges require speciali-
artificial intelligence and new tech- zation and integration. The
Kamala Harris
nology-based mobility innovations “scale and intensity of challen-
@KamalaHarris
to improve road safety, efficiency ges mandate that we go beyond
and build sustainable mobility sys- halfway house solutions” to In 39 days the Biden-
tems. achieve synergy, the minister Harris administration
“The government could take the said while delivering the sec- will rejoin the Paris
Agreement and once
lead in framing a regulatory sand- ond Manohar Parrikar Memo-
again be global leaders
box similar to one adopted by rial lecture in New Delhi. This
Reserve bank of India for the fin- will also help use resources in the fight against the
tech sector. These guidelines may optimally, he said. The challen- climate crisis.
India needs AI, new tech-based mobility innovations to improve road safety. specify objectives, eligibility crite- ges include the use of connec-
ria, areas of application, imple- tivity, trade, data, debt, tour-
chance to experiment and mature gaining popularity. menting department, role of cen- ism, and education as “instru-
in a limited space and time,” he Experts said a regulatory sand- tral and state governments, criteria ments of influence and
explained. box will need the involvement of for evaluation and process for scal- sometimes even of coercion”,
His comments ing up of successful Jaishankar pointed out. The
come against the MOBILITY SOLUTIONS innovations. A reg- statement, a reference to the
backdrop of the ulatory sandbox use of such tactics recently by
government intro- STARTUPS can soon THIS will be similar THE framework will approach would China against Australia, set the Narendra Modi
ducing national test novel transport to central banks’s need involvement of help industry to test context for increased coopera- @narendramodi
models in cities recently proposed both the govt and the
guidelines to regu- under regulatory sandboxes for the industry, according to and scale new tech- tion. India’s “rise will evoke its We will never forget the
late vehicle aggre- sandboxes fintech sector experts nologies in collabo- own reactions and responses. cowardly attack on our
gators. While cab ration with regula- There will be attempts to dilute Parliament on this day
aggregation has tors in a controlled our influence. Some of the con- in 2001. We recall the
become popular, car pooling, bike both the government and the environment before scaling up,” as testations can be directly in the valour of those who lost
taxi and other micro mobility industry as new technology and per Ola Mobility Institute spokes- security domain, while others their lives.
options offered by startups are also business models will have to be person. in economics,” he said.
Our Growth Story
One of the leading companies in the premium &
mid-premium biscuit and premium bakery segments*
One of the leading exporters of biscuits from India and
exported to 64 countries** with approx. 12% market share***
Strong distribution network supplying to a wide range of
customers through 458,000 retail outlets# and 4,422
preferred outlets##
Widespread network of 196 super-stockists and 748
distributors## in India across 26 states**
‘English Oven’ is one of the fastest growing, large-scale,
premium bakery brands in India with breads, buns, pizza
bases and cakes#
Breads business has grown at a CAGR of 29.07% in the
last 3 financial years
Supplier of bakery products to leading QSRs in India with
11% market share in processed doughs$
6 manufacturing facilities strategically located in proximity
to our target markets#
Adfactors
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