NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 16 NO.

23

Thursday, January 27, 2022

Vanguard, Nippon India, Axis Recovery fails to accelerate in

livemint.com in race for IDFC MF uP1 December uP1
92 THURSDAY, 27 JANUARY 2022
NEW DELHI
LIVEMINT.COM

NOT EVERY GROWTH STORY

IS PRINTED IN INK.
OURS IS

In just 20 years, you've made One of the fastest growing packaged food companies in India*
us an integral part of your 1 No.1 brand in edible oils business as of March 31, 2021#
home. An essential on your Fortune brand is one of the top 100 most trusted brands in India^

plate. We are Adani Wilmar. Part of every third household in India as of March 31, 2021**

And, we are proud to play our Present in over 1.6 million retail outlets as on September 30, 2021*
India’s largest manufacturer of stearic acid, glycerin and the largest exporter of
part in making India grow
castor oil as on March 31, 2020*
healthy and strong.
Among the three largest exporters of oleochemicals in India as of March 31, 2020*

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BAKERY FATS

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ECONOMY EDIBLE OILS VANASPATI FRYING OIL

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“Adani Wilmar Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares (“Issue”) and has filed the Red Herring Prospectus (“RHP”) in relation to the Issue with the Registrar of
Companies, Gujarat at Ahmedabad. The RHP is available on the website of the SEBI at www.sebi.gov.in as well as on the websites of the book running lead managers, Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited, BofA Securities India Limited, Credit
Suisse Securities (India) Private Limited, ICICI Securities Limited, HDFC Bank Limited, and BNP Paribas at http://www.investmentbank.kotak.com, www.jpmipl.com, www.ml-india.com, www.credit-suisse.com/in/en/investment-banking-apac/investment-banking-in-india/ipo.html,
www.icicisecurities.com, www.hdfcbank.com and www.bnpparibas.co.in respectively, and the websites of the stock exchange(s) at www.nseindia.com and www.bseindia.com, respectively. Any potential investor should note that investment in equity shares involves a high degree
of risk and for details relating to such risk, see "Risk Factors" of the RHP.”
The equity shares offered in the Issue have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S. Securities Act”), or any state law of 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 state securities laws. Accordingly, the equity shares are being offered and sold (i) within the United States only to persons reasonably believed
to be “qualified institutional buyers” (as defined in Rule 144A under the U.S. Securities Act) under Section 4(a) of the U.S. Securities Act, and (ii) outside the United States in offshore transactions as defined in and in compliance with Regulation S under the U.S. Securities Act and
the applicable laws of the jurisdiction where those offers and sales are made. There will be no public offering of the equity shares in the United States.
Source: *Technopak Report. #Nielsen Retail Index – MAT March 2021. ^The Economic Times Brand Equity in 2020. **IMRB.
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 16 NO. 23

Thursday, January 27, 2022

livemint.com

mint primer QUICK EDIT

Can India take on Omicron’s

global tech giants dominant
Almost two months since the
with its own OS? first Omicron case was detected
in India, we have data showing
that it has achieved dominance.
BY PRASID BANERJEE Reported numbers from a covid
On 25 January, Rajeev Chandrasekhar, minister of state for electronics variant tracker run by GISAID,
and IT, said the government is looking to facilitate the creation of an a Munich-based global set-up
Indian operating system (OS) to rival companies such as Apple Inc. that keeps watch of various viral
and Google LLC. But can India build an OS? Mint explores: genomes, suggest that more
than three-fourths of Indian
Undisputed edge cases by 10 January had been of
According to most market estimates, Apple’s iOS and Google’s Android this highly infectious strain.
account for 99% of the world’s smartphone market. They also have The latest bulletin of India’s
ChromeOS and MacOS platforms that run on computers. genome watcher, Insacog, had
Operating system market share (in %) noted earlier this week that
Mobile (Global) Desktop (Global) Mobile (India) Omicron is now in “community
KaiOS
transmission”. This explains our
ChromeOS Linux KaiOS
Samsung 0.13 (Google) 2.09 0.77 Others
week’s average having crossed
Others Others iOS
0.43 2.18 6.68 3.76 0.32 311,000 daily infections.
0.19
29.24 While this covid mutation is
15.33
iOS
MacOS clearly proving to be less lethal,
(Apple) the notion that its spread is
70.01 73.72 95.24 benign, as some had argued,
Android Android
Windows needs to be dispelled. A study in
Source: Statcounter (as of December 2021) Delhi has shown that it could be
fatal for those with underlying
Why an Indian How can an OS help vulnerabilities. Virus genomes
1 operating system?
The thinking among the industry
2 the government?
Primarily, an OS that falls under
sequenced by a lab revealed that
every covid fatality in the city
and governments across the world the purview of the Indian between December-end and
is that technology giants like Apple government can be tailored to its the first week of January had
and Google wield too much control policies from the beginning. been an Omicron case. Daily
over the internet ecosystem as they Policies being formulated around covid deaths recorded across
own the operating systems that technology today have to take into India, at a seven-day average of
run on today’s smartphones and account global regulations like the
a little above 500, have risen
computers. According to most European General Data Protection
market estimates, Apple’s iOS and Regulations (GDPR). Such an OS even if they’ve not spiked as
Google’s Android account for 99% could also have implications for they did during our Delta wave.
of the world’s smartphone market. the startup ecosystem, which has Today’s leading bug is milder,
They also have ChromeOS and long complained about the charges sure, but only in relative terms.
MacOS platforms, respectively, Google and Apple levy for selling
which run on computers. Control apps and services through their
over these platforms gives them a respective app stores. Lastly, an OS
degree of control on how apps are could be used by the government
made, data flows, data sharing, and
more. This control is also at the
to mine data about the country’s
citizens and use that for various
MINT METRIC
core of many anti-trust cases. purposes. by Bibek Debroy
AFP

A robot vacuum cleaner

3 Is there any indigenously
developed OS?
A government-mandated or supported OS
Went looking for a pasture greener.
doesn’t exist yet. However, in 2013, a group
When a hotel’s door was ajar,
of IIT graduates created Indus OS, which Its stroll in Cambridge took it far.
still exists. In November 2021, the firm
claimed that its app store, the Indus App
Now returned, despite the minor misdemeanor.
Bazaar, had over 200 million users. There
are other isolated examples too, like Paytm’s
mini app store, which was launched in
September 2020. QUOTE OF THE DAY
On Republic Day, we recall the
Will an Indian OS What could be an
4 work?
Google and Apple are powerful
5 Indian OS’ downsides?
Government surveillance is one of
great women and men who
worked towards the making of
because their operating systems the key concerns for an OS that’s our Constitution. We also
are preferred by users. Giants like driven by the government. But
Microsoft Corp. have tried to take Google and Apple’s operating reiterate our commitment
on these two firms and failed. The systems also come with certain to fulfil their dreams for
impact of not having Google’s important services like Maps, Mail,
support, for instance, is well- and app stores. These service our nation
documented through Huawei. The plugins act as windows into the
company withdrew Huawei’s world wide web, and a new OS
access to Android after the US could struggle to bring alternatives
sanctions in 2019, which swiftly to these services. For instance,
resulted in a drop in the latter’s Microsoft’s now defunct Windows NARENDRA MODI
market share. The firm’s market Phone OS lacked many key apps, PRIME MINISTER
share globally had dropped to 4% and experts pointed out that
in the first quarter of 2021, from scarcity as one of the main reasons
17% in the same period in 2019. for the platform’s failure.

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 PLAIN FACTS

The poorest bear brunt

of paralysing price rise
BY MANJUL PAUL & TANAY SUKUMAR

H igh inflation due to supply-side pressures was one of the biggest pain points of 2021 across the world. In India, expensive
vehicle fuel also got into the mix, with petrol and diesel crossing ₹100/litre in several cities. Households bore the brunt
as wallets came under stress. At least 76% urban Indians feel their household expenses increased in 2021, a sharp rise
from 57% in 2020, the latest YouGov-Mint-CPR Millennial Survey has found.
Various expense heads, including essential ones, came under pressure. Most people reported increased expenses across
grocery, utilities, transportation and healthcare. Each category got substantially dearer in 2021, and fuel costs rose for 75%
respondents, more than any other item.
No wonder then, when asked to rank expenses based on how much they pinched their budgets, fuel turned out to be the worst
villain. But the impact varied based on income level. A lower monthly income made one more likely to struggle to pay for essen-
tials, while richer groups were more likely to be pinched by rising medical expenses and prices of luxury and consumption goods.
The latest round of the biannual survey covered 12,900 respondents across 206 cities during November-December 2021.
It was the seventh such survey conducted jointly by the Indian arm of the global market research firm YouGov, Mint, and Delhi-
based Centre for Policy Research (CPR). Roughly 45% of the samples were millennials, one-third post-millennials (aged 18-24),
and the rest were pre-millennials (40+).

Fuel biggest worry as over 75% urban Utility bills a price pinch for low earners,
Indians see expenses rise in 2021 healthcare and luxury goods for high earners
% respondents who experienced rise in expenditure Top five 'price pinch' expenses (% of respondents in each
income group who named the given item#)
2020 2021 Monthly income
Less than 20,000- 50,000- More than
House rent 20,000 1,00,000 1,00,000
50,000

Utility bills Fuel 52% 57% 55% 54%

Transport/commute
Home
Groceries/essentials essentials* 47% 49% 48% 47%

Consumption goods
Utility bills 45% 43% 42% 38%
Leisure activities

Medical expenses Healthcare 32% 35% 38% 39%

Educational expenses
Consumption
goods**
31% 30% 32% 35%
Fuel cost

Overall 57 76
Based on a sub-sample of 7,869 respondents who are working and reported their
monthly salary. # Respondents were asked to pick top 3 out of a list of nine item
categories in which price rise "personally impacted" them the most. * includes
0 20 40 60 80 groceries; ** includes clothes, footwear, luxury goods, electronics, etc.
The sample size was 12,900 in 2021 and 9,839 in 2020. Responses that said 'not
applicable' excluded. Fuel cost was not presented as a question in 2020.
Source: YouGov-Mint-CPR Millennial Survey (Nov-Dec 2021 and Oct-Nov 2020)

Income No Solace Low earners more likely to lose pay

further, high-earners saw pay hikes
AHEAD OF Budget 2022 next week, the survey findings offer a % of respondents, by change in income in past year
disturbing glimpse of how the first and second covid-19 waves
Increased 7
have put income and inflation pressures on Indian households. 29
Nearly 60% respondents attributed their swelling budgets to Decreased
Income
an increase in the cost of living. But another reason behind the Same
44 <20,000
Prefer not to say 2
crisis could be income reshuffle—and its gross inequality. People 20
3
who already earned less were a lot more likely to lose pay further
last year and only 29% of those in the lowest income category saw Income 35 Income
pay hikes. Further, a sizeable minority of respondents in all 47 20,000- 42 50,000- 44
50,000 2 100,000
income brackets—around 40%—reported no change in their
monthly earnings. On the contrary, nearly half of those in high- 15 13
income groups got hikes in pay. 38 Income 49
Based on a >100,000
This shows how the poorest in India’s income pyramid were hit sub-sample of 7,869
respondents who are
particularly hard by inflation. Although the employment working and reported 11
numbers have improved since the first lockdown, the distress has their salary.
Source: YouGov-Mint-CPR Millennial Survey (Nov-Dec 2021)
not fully gone, and remains unequal.

Future savings suffered as expenses rose

% of respondents who faced financial difficulty in
Financial Woes
meeting certain expenses MOST OF those polled (81%) claimed that they faced some sort
Maintaining monthly
44 of financial difficulty in 2021, and the primary cause was
savings/investments inflation. The biggest casualty of this inflation headache was the
Paying utility bills 34 ability to maintain one’s planned savings and investments, with
44% of the 7,869 working respondents saying they faced
Paying for difficulty doing so. Since savings are a hedge against future
medical care 32
crises, the impact on households’ spending power could outlast
Paying EMIs on 2021 unless incomes increase substantially.
32
loan/mortgage
There’s hardly any silver lining there: while two in three
Meeting education respondents do expect an increase in income in the coming
related expenses 27
year, low-earners are more likely to expect income to decrease
Paying house rent 24 (12%) than high-earners (6%). Worse, the income insecurity is
Based on a sub-sample of 7,869 respondents who
set to persist longer: 84% of those whose earnings increased in
are working and reported their salary. 2021 expect it to rise further in 2022, but among those whose
Source: YouGov-Mint-CPR Millennial Survey (Nov-Dec 2021)
incomes declined, just 47% expect a hike.

Purchasing Power Appetite for buying property or car low;

gadgets, laptops dominate plans
THE PANDEMIC has taken away the appetite for big-ticket % of respondents who intend to buy these household
purchases such as property or cars. While 22% respondents assets/items in coming year
Pre-pandemic round Previous round Latest round
planned to buy a house within a year of the 2019 survey, the share (Oct-Nov 2019) (Oct-Nov 2020) (Nov-Dec 2021)
dropped to 15% in 2020 and improved only marginally to 16% in
0 5 10 15 20 25 30 35
late 2021. For cars, the share was 30% in 2019, followed by 21%
and 22%. The appetite for two-wheelers has not changed much. House/apartment
The new work-and-study-from-home reality has shifted the Car
focus to electronic purchases. One in every three persons Two-wheeler
surveyed plans to buy a gadget or a laptop in the coming year. Home appliances*
Purchases of other consumer durables are expected to be limited, Laptop
similar to 2020.The hints of inequality in how Indians perceive High-value furniture
inflation pose a challenge for policymakers as they wade through Gadgets**
the lasting household distress left by the pandemic. The sample size was 12,900 in 2021, 9,839 in 2020, and 9,325 in 2019. * Shows share of
respondents who planned to buy at least two out of a list of six appliances: TV, fridge,
manjul.paul@livemint.com AC, water purifier, air purifier, washing machine. ** Includes smartphone, smartwatch,
This is the fourth of a five-part data journalism series based on the tablet, etc. (option was not there in 2019 survey).
Source: YouGov-Mint-CPR Millennial Survey (Nov-Dec 2021, Oct-Nov 2020, Oct-Nov 2019)
biannual YouGov-Mint-CPR Millennial Survey. The concluding
part will appear on 9 February. AHMED RAZA KHAN/MINT

PEANUTS by Charles M. Schulz

 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*
Thursday, January 27, 2022
SENSEX 57,858.15 0.00
Vanguard, Nippon India,
Axis in race for IDFC MF
About 15 entities said to be in fray for deal valued at ₹10,000 cr
Anirudh Laskar
anirudh.l@livemint.com
MUMBAI
V
anguard Group Inc.,
besides local asset man-
agers Nippon Life India
Asset Management Ltd
and Axis Asset Manage-
ment Co. Ltd, are contenders to
acquire IDFC Ltd’s mutual fund
business in a deal that could be
worth ₹7,000-10,000 crore, three
people directly aware of the discus-
sions said.
“Vanguard is a top contender.
About 15 entities, including foreign
asset management companies,
financial services firms, and private
equity funds, have shown interest in
buying IDFC Mutual Fund. But the
bidding process is still on. Once the
bids are opened, IDFC will examine
and shortlist the buyer,” one of the
three people said.
Vanguard is one of the world’s top
money managers, with $8.5 trillion
in global assets as of December end.
The group, founded by John Bogle,
is a pioneer in low-cost investing
through index funds.
The proposed sale is in line with
IDFC’s plan to merge with IDFC First
Bank Ltd and focus on banking oper-
ations after shedding its non-core
assets, including IDFC AMC.
On 30 December, IDFC First Bank
Packaged goods sales PMC a/c holders
dip amid covid curbs to move courts
Suneera Tandon
suneera.t@livemint.com
NEW DELHI
S A
ales of fast-moving con-
sumer goods fell 9.9% in
the first fortnight of Janu-
ary from a month ago, as curbs
aimed at containing the spread
of Omicron and a sharp drop in
mobility crimped demand for
packaged foods and beverages.
Data from retail intelligence
platform Bizom, which tracks
sales across 7.5 million retail
stores, showed sales in active kir-
ana outlets declined 8.4% during
this period. Active kiranas refer
to fully operational outlets.
“We’re seeing close to a dou-
ble-digit drop in sales in the
opening two weeks, driven by a
drop in active kirana outlets,”
said Akshay D’Souza, chief
marketing officer at Bizom.
Demand for packaged foods
and beverages plunged 22.8%
Windows upgrade lifts Microsoft results
Dan Gallagher
feedback@livemint.com
I
t’s an interesting time for
Microsoft to go old school.
The first of the big tech
giants to report results for the
December quarter seemed to
face a daunting task ahead of its
quarterly results announce-
ment on Tuesday afternoon.
Market turbulence has slashed
market values; Microsoft,
Apple, Amazon and the parent
companies of Google and Face-
book have
collectively
shed nearly
$1.3 trillion
since the start of the year. And
while much of that action has
been driven by broad fears over
inflation, interest-rate increases
and the economy’s health, there
has been some worry specifi-
cally about Microsoft’s ability to
sustain what has been an
incredible run of accelerating
sales growth while also expand-
livemint.com
NIFTY 17,277.95
VALUE PERCEPTION
IDFC is expecting 7-10% of its assets under management as fair valuation for
IDFC MF. A look at valuations and major deals in the mutual fund industry:
LISTED MUTUAL FUNDS
Market cap
(in ₹ cr)
20,703
47,567
DEALS IN MUTUAL FUNDS INDUSTRY
Year Company
2008 Standard Chartered AMC
2013 Fidelity AMC
2015 Deutsche AMC
2019 Reliance Nippon Life
2021 L&T MF
*75% stake
said its board is considering a pro-
posal to merge promoter entities—
IDFC Ltd and IDFC Financial Hold-
ing Co. Ltd—with itself.
“Even though IDFC Mutual
Fund’s debt portfolio is bigger than
its equity assets, the exposure is
entirely in AAA-rated papers, which
is why inflows to its debt schemes
steadily increased after the IL&FS
crisis. In the equity portfolio, even
though the mix of equity schemes is
REUTERS
Sales in kirana stores fell 8.4%
in the first fortnight of January.
and 12.5%, respectively. Confec-
tionery sales, too, dropped by
12%, the data showed. These cat-
egories are linked to out-of-
home consumption, wherein
consumers tend to purchase
such products while on the
move. State and city-wise
restrictions on mobility and
operating hours for stores
impacted consumption outside
TURN TO PAGE 6
ing operating profit margins.
In that light, the company’s
fiscal second-quarter results
and accompanying forecast
were good enough—but barely.
Revenue rose 20% to $51.7 bil-
lion, beating Wall Street’s fore-
cast by about $1 billion. That
beat came entirely from strong
PC sales that lifted revenue for
the company’s More Personal
Computing segment by 15% to
nearly $17.5 billion. Microsoft’s
cloud and business software
segments were in line with
expecta-
tions, but
they also
showed
some deceleration from the
growth rates seen in the previ-
ous quarter. Microsoft Cloud,
which combines all of the com-
pany’s cloud-related ventures,
saw revenue rise 32% year over
year to $22.1 billion compared
with a 36% jump in the Septem-
ber quarter.
The company projected a
0.00 DOLLAR ₹74.78
Nippon India Mutual Fund HDFC Mutual Fund
AUM Mcap as a % of AUM
(in ₹ tn) 4.5
(in %)
2.8
7.4
AUM: Assets under management
Amount
Buyer
(in ₹ cr)
IDFC MF 820
L&T MF 550
DHFL Pramerica MF 400
Nippon Life 6,000*
HSBC MF 3,200
Source: BSE, companies, Mint Research
SARVESH KUMAR SHARMA/MINT
low in the overall portfolio, the 1-3
year returns from the equity
schemes are about 100%. That’s why
IDFC is expecting 7-10% of the assets
under management as a fair valua-
tion for the asset management com-
pany business,” the person cited ear-
lier said.
That translates into a deal valua-
tion of ₹8,000-10,000 crore for
Gopika Gopakumar
gopika.g@livemint.com
MUMBAI
ggrieved deposit holders
of Punjab and Maharash-
tra Co-operative Bank
have decided to approach the
courts against implementing the
final scheme of amalgamation
between PMC and Unity Small
Finance Bank (SFB), approved by
the government on Tuesday.
PMC bank depositors led by
Sahakar Bharati, an umbrella
body for cooperative societies
founded by Reserve Bank of
India board member Satish
Marathe, have decided to peti-
tion the Supreme Court against
the scheme.
In a press release on
Wednesday, Sahakar Bharati
argued that the terms of amal-
gamation are one-sided and
unfair to depositors.
It also urged the RBI and the
Microsoft CEO Satya Nadella
said the company is seeing a
‘PC renaissance’. MINT
similar pattern for the current
quarter ending in March, with
revenue from the PC-related
segment expected to come in
nearly 5% ahead of Wall Street’s
forecasts. Chief Executive Offi-
cer Satya Nadella said on the
company’s conference call that
Microsoft was experiencing a
“PC renaissance,” helped by the
recent launch of a major update
to its Windows operating sys-
VOL. 16 NO. 23 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 18 PAGES
Can Uttar Pradesh remain a Google rolls out interest-based
BJP bastion? uP10 tracking system for ads uP3
₹0.00 EURO ₹84.40 ₹0.30 OIL $89.09 $1.48 GOLD ₹48,687 ₹0.00
Recovery fails to NITI Aayog
plans new index
DON’T MISS
accelerate in Dec to rank states on
Tanay Sukumar
tanay.sukumar@livemint.com
for rural economic recovery,
grew just 1.9% annually over the
competitiveness
Gireesh Chandra Prasad
last two years, the most subdued gireesh.p@livemint.com
T
he early impact of the third growth since the lockdown NEW DELHI
covid wave weakened month of May 2021.
Markets bet on budget to spur
F
India’s recovery trajectory Domestic airlines carried 11.2 ederal policy thinktank
in December, according to a million passengers in December,
group of high-frequency indica- the most since February 2020.
NITI Aayog will develop a
state competitiveness
demand, create jobs amid covid
As stock markets remain volatile ahead of
tors compiled as part of Mint’s This was also just 7.1% lower index that will go beyond the next week’s Union budget, analysts and
monthly macro tracker. (annualized) than the same ease of getting approvals and brokerages expect finance minister Nirmala
Just four of 16 indicators month two years ago. However, licences and rank states on Sitharaman’s proposals to be fiscally prudent
considered in the tracker were travel may have been hit due to their overall resourcefulness in and growth-supportive, amid concerns that it
may also take a populist turn. >P6
green. This was a notch below higher infections in January. attracting investments.
November. Nine indicators Most comparisons in the The idea is to pit states against
were red in both months, while tracker are with the same month one another in becoming more Oil breaches $90 mark after 7 years
10.6
the number of amber indica- two years ago to avoid the base competitive, which could acceler-
on political tensions, tight supply
tors were two in November and effect. ate economic growth and help
Oil hit $90 a barrel for the first time in seven
three in December. The third The producer economy seg- achieve the $5 trillion economy years on Wednesday, supported by tight supply
wave-induced decline in eco- ment had two indicators in green goal, said a person familiar with and rising political tensions in Russia that raised
nomic activity will and one each in red the development, adding that it
Market value concerns about further disruption in an already-
as a % of AUM reflect in the tracker M A C R O and amber. Business was in the spirit of competitive tight market. The OPEC+ meets on 2 February
5.2 next month.
m TRACKER confidence contin- federalism. to consider another output increase. >P4
Launched in Octo- ued to improve at a Details of the new index are
2
ber 2018, Mint’s macro tracker robust pace though it has slowed yet to be drawn, but the broad Mattel wins Disney toy deal, joining
2 provides a comprehensive state- with the purchasing managers’ idea is to capture a comprehen-
6.9 of-the-economy report every index (PMI) at 56.4 against a near- sive picture of the state’s socio-
Cinderella, Elsa, others with Barbie
month, based on 16 indicators decade high of 59.2 in November. economic position and incre- Cinderella, Elsa, and their friends are moving back
4
covering four segments: con- However, there was a broad- mental progress annually. This in with Barbie. Mattel Inc. has won the licence to
produce toys based on Walt Disney Co.’s princess
sumer economy, producer econ- based decline in employment would go beyond the indicators
lineup and from the recent blockbuster Frozen
omy, external sector, and ease of numbers and firms remained of ease of doing business. franchise, wresting the properties back from its
living. Its colour-coding—red, choked by rising costs, reported NITI Aayog already has a few rival Hasbro Inc., Mattel executives said. >P8
green and amber—is based on the IHS Markit, the agency that pub- indices, including a sustainable
performance relative to the five- lishes PMI data. development goals index, an
year average trend. The automo- Non-food credit extended by innovation index and an export PE firm Actis looks to invest about
tive sector has been the worst hit banks rose 6.4%, the strongest preparedness index that rank $400 mn to acquire road assets
by the global semiconductor sup- since February 2021. The rise states. The rankings and annual lobal private equity investor Actis is looking to
ply crisis since mid-2021. While in credit demand has even changes enable states, including make long-term yield-focused investments of
car sales—part of the consumer encouraged some lenders to front-runners in certain indica- up to $400 million in India, primarily to acquire
segment—rose since November, start raising term deposit rates, tors, to learn from others. The operating road assets. The money will be
there was a drop compared to the Mint reported earlier. rankings also are a policy tool for invested from the $1.2 billion Actis Long Life
same month two years ago. Trac- Infrastructure Fund. >P5
TURN TO PAGE 9 tor sales, often considered a proxy TURN TO PAGE 6 TURN TO PAGE 6
Depositors say amalgamation
terms are unfair to them.REUTERS
government to review the plan,
which proposed a staggered
payment to all depositors over
10 years, zero-interest payment
against deposits for five years
after 31 March 2021, and a max-
imum of 2.75% interest paid on
unpaid deposits after that.
“Sahakar Bharati will take
TURN TO PAGE 6
tem. Projections for the com-
pany’s Intelligent Cloud seg-
ment, by contrast, were less
than 2% ahead of analysts’
expectations.
The forecast was deemed good
enough to lift Microsoft’s stock
after hours following an initial
slip. But the PC burst might prove
short-lived; market tracking firm
IDC projects PC shipments will be
flat this year after a 12% jump in
2021. And Microsoft’s cloud busi-
ness also faces more challenging
comparisons in the year ahead
after averaging 34% year-over-
year growth per quarter in calen-
dar 2021.
Microsoft’s stock has been a
star, averaging 50% annual
gains over the past three years
and lifting the company’s mar-
ket value past $2 trillion. But in
a market that is re-evaluating its
taste for risk—and the concen-
tration of that risk on a few tech
giants—the next trillion may
prove harder to come by.
©2022 DOW JONES & CO INC.
02 THURSDAY, 27 JANUARY 2022
NEW DELHI ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
State-run TCIL’s 30% stake in
Budget may propose record Nine states
oppose govt
proposal on
Bharti Hexacom valued at ₹8.9k cr
New Delhi: The government has valued the 30% stake of state-
run TCIL in Bharti Hexacom at around ₹8,900 crore, based on
a formula suggested by SBI Capital Markets, an official source
7K km of track electrification IAS officers’
deputation
said. Bharti Airtel holds 70% stake in Bharti Hexacom, which
provides telecom services in Rajasthan and Northeast. The gov- PTI
ernment holds the remaining 30% stake in the company feedback@livemint.com
through Telecommunications Consultants India Limited The proposal will be part of plans to achieve full electrification of BG lines by December 2023 NEW DELHI
(TCIL) .A proposal for TCIL selling its stake and exiting the joint

A
venture has been pending for over 15 years. PTI s many as nine non-BJP
Subhash Narayan ruled states have opposed
subhash.narayan@livemint.com the Centre’s proposal that
Aviation ministry notifies new NEW DELHI gives it an overriding power
while deciding on central depu-
drone certification scheme

T
he Union budget to be pre- tation of IAS officers, whereas
sented on 1 February may eight others have given their
propose a record 7,000 km of consent, officials said on
rail track electrification in Wednesday. A reminder will
FY23 as part of plans to soon be sent to the states and
achieve full electrification of broad Union Territories which have
gauge railway lines by December 2023. not yet responded to the pro-
According to a person privy to the posal on making changes in the
development, the budget is also relevant service rules, they said.
expected to retain the highest-ever allo- Odisha, West Bengal, Maha-
cation of close to ₹10,000 crore for elec- rashtra, Kerala, Tamil Nadu, Tel-
trification in FY23. This will enable the angana, Chhattisgarh, Jhark-
Central Organization for Railway Elec- hand and Rajasthan have raised
trification to complete electrification their voice against the amend-
New Delhi: The ministry of civil aviation (MoCA) on work on at least 7,000 route km in FY23. ments, the officials said.
Wednesday notified a drone certification scheme to More electrification work may also be On the other hand, Arunachal
ensure minimum safety and quality requirements as it will taken up for completion during the year, Pradesh, Manipur, Tripura,
boost indigenous manufacturing, an official statement as the target of 100% electrification has The budget is also expected to retain the highest-ever allocation of close to ₹10,000 crore for electrification in FY23. MINT Madhya Pradesh, Uttar Pradesh,
said. “The drone certification scheme notified on January been advanced by three months to Gujarat, Haryana and Himachal
26, 2022, under Rule 7 of the liberalized Drone Rules, December 2023 from March in the fol- FY23 will leave just 5,800 km for full of ₹7,452 crore for electrification pro- contribute to “net-zero” emissions by Pradesh have given their con-
2021 will help in simpler, faster and transparent type-cer- lowing year. electrification of the railways’ total jects. In the last seven years, railways the year 2030 by drawing its entire elec- sent, they added.
tification of drones,” the MoCA said on Twitter. PTI Queries sent to the ministries of rail- broad gauge network of 64,689 km. stepped up electrification work, finish- trical load from renewable energy. The Karnataka and Meghalaya had
ways and finance on the matter By the end of FY21, 45,881 km — that ing more than five times the work com- target for the national transporter is also opposed the proposal initially sent
remained unanswered at pleted in the seven years driven by this goal. Full electrification of to them last month but are
India slams Pak at UN, says 26/11 press time. But the person POWERING CHANGE before. A record 24,080 the broad gauge system will not only expected to send a revised pro-
cited above said 100% km (37% of broad gauge help reduce emissions from diesel-run posal, the officials said, adding
perpetrators enjoy its patronage electrification would be a MORE works could THE electrification of THE rail budget for lines) have been electri- trains but would also result in annual that Bihar had also opposed the
United Nations: Perpetrators of the heinous 26/11 Mumbai ter- priority during FY23, be taken up this year 7,000 km in FY23 will
as target of 100% leave just 5,800 km
FY22 had given an
outlay of ₹7,452 crore
fied since 2014 against savings on the fuel bill of about ₹13,500 move earlier.While the nine states
ror attacks continue to enjoy Pakistan’s patronage, India has when the bulk of the work electrification has for full electrification for electrification 4,337 km (7% of broad crore. Even at around 75%, railways is opposed the suggested changes
told the UN Security Council, saying that most terrorist attacks would be completed with- been advanced of the BG network projects gauge lines) during saving close to ₹8,000 crore on its saying they were against the fed-
around the world have their origin, in some form or the other, out pushing much work 2007-14. Of the total annual fuel bill. eral structural of the country, the
in that country. PTI for the last year. This 45,881 km electrified till Apart from the Central Organization Centre has defended its proposal
would mean that the planned 6,500 km is, 71% of the broad gauge network— had March 2021, 34% has been electrified in for Railway Electrification, some electri- asserting that the states are not
for electrification in FY23 may be scaled been electrified. This is expected to just the last three years. fication projects have been entrusted to sparing sufficient number of IAS
‘UN is supporting India’s vax up beyond 7,000 km. reach over 56,881 km by March 2022. The railway ministry had earlier said other agencies also such as Rail Vikas officers for deputation which is
The electrification of 7,000 km in The rail budget for FY22 gave an outlay that the total rail electrification would Nigam Ltd. affecting its functioning
drive, the largest in the world’

E-way bill generation picks up in mid-Jan HT Republic Day quiz

Staff Writer
NEW DELHI
ends on a high note struction sector activity
backed by a spurt in cement
production and demand for
Staff Writer

E
lectronic permits needed residential units. ogy partner for the event.
for goods transport However, uncertainty due feedback@l;ivemint.com The finale saw 175 contestants
within and across states to the pandemic still lingers, competing for the title. There

showed an uptick in the last
United Nations: The United Nations is supporting two weeks, but not enough to
India’s vaccination drive, which is the largest in the world, raise the daily average so far
and the global body and its partners have reached some this month to the level seen in
600 million people in the country with covid prevention December, official data
and mitigation messages, spokesperson for UN secretary showed.
General Antonio Guterres has said. Stephane Dujarric, After an initial moderation
Spokesman for the secretary-general, at the daily press to 2 million permits a day on an
briefing on Tuesday said the UN team in India led by Resi- average up to 9 December,
dent Coordinator Shombi Sharp continues to support e-way bill generation has
authorities to curb the spread of the virus. PTI clawed back to 2.16 million a
day on an average, as per data
up to 23 January available
CPSEs under coal ministry report from GSTN, the company that
processes tax returns.
28% growth in capex in FY22 Since last May, goods ship-
New Delhi: The central public sector enterprises (CPSE) under ments within the country have
the ministry of coal have registered a growth of 28.33% in capi- improved steadily, recovering
tal expenditure at ₹12,605.75 so far in the current financial year. from the regional mobility
During the April-December period of FY21, these state-run restrictions imposed to com-
companies had recorded a capital expenditure of ₹9,822.28 bat the second wave of the
crore, said statement from the ministry. RITURAJ BARUAH pandemic.
The impact of the current
wave of the pandemic on sup-
Delhi govt to suggest reopening of ply chains has been limited, as
both state administrations and
schools in DDMA meet: Sisodia businesses were prepared to
New Delhi: The Delhi government will recommend the deal with the challenges seen
reopening of schools in the national capital in a DDMA meeting on the previous two occasions.
on 27 January as it has now become necessary to prevent further Around 40% of all goods ship-
damage to the social and emotional well-being of children, dep- ments above ₹50,000 is inter-
uty chief minister Manish Sisodia said on Wednesday. PTI state.
The limited downside to
T
turning many economists rue to its vision of having were 150 finalists from the sen-
sceptical about the robustness fun while learning, HT ior category (grades 6 to 12) and,
of the economic recovery. School hosted ClassAct as a surprise, the quizmasters
The government had earlier 2022, The Hindustan Times decided to include the top 25
this month forecast a 9.2% Republic Day Quiz, which students from the junior cate-
gross domestic product (GDP) started with the preliminary gory (grades 1 to 5). The finalists
growth this fiscal in its first round on 23 January and ended were chosen based on their per-
advance estimate. with the Grand Finale on formance in the prelims.
It had also indicated that Wednesday. The finale was hosted by cele-
household expenditure, the The quiz saw 50,611 students brated quizmasters Dr. Navin
Shipments within the country have improved steadily since May, biggest driver of growth, is of grades 1 to 12 from across the Jayakumar and Avinash Mudal-
show data. unlikely to surpass pre-pan- globe register on HT School. iar. Dr. Jayakumar is the found-
demic levels this year. Private Students regis- ing member of The
consumption during the cur- survey that consumer confi- final consumption expendi- tered from 32 Winners of ClassAct Quiz Foundation
rent wave of the pandemic as dence was gradually return- ture projected at ₹8 trillion countries across 2022, The Hindustan of India and is also
indicated by e-way bills and ing. this fiscal, will cross the level five continents. the quizmaster for
Times Republic Day
GST, a tax on consumption, The overall outlook seen in FY21 of ₹7.5 trillion, There was par- Quiz, will be declared reputed national
would offer com- remained opti- but not the ₹8.3 trillion seen in ticipation from the quizzes. Mudaliar
on the HT School
fort to policy E-way bill mistic on the gen- FY20. UAE, Singapore, from HT Labs is a
makers. eral economic sit- “Those suffering income UK, Canada, Indo- ClassAct 2022 event renowned quiz-
generation has
Besides a clawed back to uation, it said. loss are clearly consuming less nesia, Uzbekistan, page in 2 working days master with dec-
recovery in eco- 2.16 million a day For the year and those who used up their Iraq, Mozambique, ades of quizzing
nomic activity
on an average, as ahead, consum- savings are prioritising South Africa, experience.
after the first ers are buoyed by rebuilding buffers,” said an Switzerland, Guatemala, Ethio- At the end of the finale, 40
quarter of the fis- per data up to sentiments on analysis from rating agency pia, Ghana, Vietnam, Nigeria, winners of the junior category
cal year, what has 23 January income and CRISIL shared on Tuesday. Mexico, Tanzania, and the US, to were announced, based on their
aided buoyant tax employment, the Job losses and lower earn- name a few. A total of 32,644 stu- performance in the prelims.
collections is sus- report said. ings over recurrent waves, and dents participated in the prelims The winners of ClassAct
tained enforcement by central The central bank also the pressure on medical conducted on the Quizizz plat- 2022, The Hindustan Times
and state agencies. pointed to improving mobility expenditure during the pan- form. Republic Day Quiz, will be
The Reserve Bank of India indicators, hiring activity led demic, have taken a toll on Quizizz, a popular teacher- declared on the HT School
had said last month in a state of primarily by telecom and household savings, the report powered learning and engage- ClassAct 2022 Event Page in two
the economy report quoting a internet services, and con- said. ment platform was the technol- working days.

Customs duty rejig, easier import compliance among likely budget steps CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Rajeev Jayaswal and to safeguard the interests ate significant scale in key sec- ceuticals, telecom, textiles, “There could be some suggestions or complaints
rajeev.j@livemint.com of Indian farm sector, environ- tors, nurture global champi- automobiles, and auto compo- changes in a few general about errors.
NEW DELHI ment, and micro, small, and ons, and generate nents. exemptions on import of capi-
Readers can alert the
medium enterprises (MSMEs), employment. “There are also proposals to tal goods and raw materials
newsroom to any errors in the

T
he Union budget may
further overhaul cus-
toms duties and proce-
dures with the twin objectives
of protecting and encouraging
domestic value addition as
part of the global supply chain
and having reasonable tariff
space to offer concessions
under free trade agreements
(FTAs) currently under negoti-
ation, people aware of the
development said.
The tweaking will be done
to reduce import dependence
on manufactured products
the people said requesting
anonymity.
The government is consid-
ering reduction of import
duties on a range of inputs,
including raw material for
manufacturing steel, alumin-
ium, textiles, jewellery, phar-
maceuticals, medical devices,
electronic components, tele-
com network products, and
electric vehicles (EVs), along
with imported energy such as
liquefied natural gas (LNG) to
reduce fuel cost, one of them
said. India is the fourth largest
“We’ve had a very successful
experience on the PLI front,
particularly in mobile phone
manufacturing, and we are
hoping to replicate it in other
sectors such as semiconduc-
tors and container manufac-
turing. As many as 14 sectors
The government is mulling reducing import duties on a range of now have PLI schemes.” com-
inputs, and duty cuts for sectors under PLI scheme. BLOOMBERG merce and industry minister
Piyush Goyal told the Mer-
importer of LNG. second person said. The bud- chants’ Chamber of Com-
“Duty reductions for several get may also expand the list of merce & Industry (MCCI) on 21
sectors under the production- PLI sectors, the person said. January. Sectors under the PLI
linked incentive (PLI) scheme The government gives incen- scheme include solar PVs,
are under consideration,” a tives worth ₹1.97 trillion to cre- white goods, steel, pharma-
raise customs duty on certain
items to check cheap imports
of products (that are also) man-
ufactured domestically.
Besides, the government is
negotiating FTAs and may
have to keep differential tariffs
for FTA countries and other
nations. This may require rais-
ing tariffs of some items,” the
first person mentioned above
said. Sectors likely to see tariff
hikes include solar modules,
steel, and aluminium prod-
ucts, and consumer electron-
ics.
considering these FTAs (that paper by emailing us, with your
are) in the pipeline. More full name and address to
importantly, the FTAs would feedback@livemint.com.
clear the decks for further
exports of manufactured It is our policy to promptly
respond to all complaints.
goods from India,” said Readers dissatisfied with the
Mahesh Jaising, partner at response or concerned about
consulting firm Deloitte India. Mint’s journalistic integrity may
India is working on half-a- write directly to the editor by
dozen FTAs with countries sending an email to
and blocks such as the UAE, asktheeditor@livemint.com
the EU, Australia, Israel and Mint’s journalistic Code of
the Gulf Cooperation Council. Conduct that governs our
Earlier this month, India and newsroom is available at
the UK formally launched FTA www.livemint.com
negotiations.

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LIVEMINT.COM DEALS, TECH & STARTUPS THURSDAY, 27 JANUARY 2022
NEW DELHI 03

TCS world’s
m MINT SHORTS
Kinetic Green to invest around
Google to follow interests of 2nd valuable
₹100 cr in electric two-wheeler biz
New Delhi: Kinetic Green Energy & Power Solutions, which has
partnered with Chinese EV major Aima Technology Group to
co-design and develop electric two-wheelers for the Indian mar-
users in new way to show ads IT services
brand
ket, plans to invest around ₹80-100 crore on the project, which
entails three new models this year itself, its founder-chief execu- Nikhil Patwardhan
tive Sulajja Firodia Motwani has said. Pune-based Kinetic Green nikhil.patwardhan@livemint.com
entered the rapidly-growing domestic electric two-wheeler The new system, called Topics API, creates interest-based categories such as fitness or travel MUMBAI
space last year, after establishing its presence in the e-three-

T
wheeler segment, with two scooter models—Zing and Zoom. PTI ata Consultancy Services
Abhijit Ahaskar & Vignesh Anantharaj user’s device and no data will be sent to Ltd (TCS) is now the
NEW DELHI/BENGALURU external servers, including that of Goo- world’s second most val-
o9 Solutions raises $295 mn gle. It also claimed that the topics will be uable brand in the information

G
oogle has announced a transparent, and the user will have the technology (IT) services sector
from General Atlantic, others new way to track users on option to delete them from the list or according to Brand Finance, a
the internet and gather disable the features altogether. Topics global brand valuation firm.
data for targeted advertis- won’t consider sensitive interests such Accenture leads the IT service
ing. The new system, as sexual orientation or race. sector ranking.
called Topics API, will play a significant “Based on the information available, According to the Brand
role in how the internet giant targets it appears to be a significant improve- Finance 2022 Global 500 IT
advertisements towards users in the ment in privacy terms over cookies, and Services Ranking report, TCS
future. more acceptable to privacy advocates grew its brand value by $1.84
Along the lines of web browsers like than FloC,” said tech policy analyst Pras- billion or 12.5% to $16.786 bil-
Mozilla’s Firefox, which blocks third- anto K. Roy. lion over the last 12 months. It
party cookies, Google, too, will start “Both FloC and Topics will group attributed the growth to the
doing so on Chrome from 2023. Last people, anonymizing and aggregating company’s investments in its
year, the company had said it will move the data reflecting their interests. Topics brand and its employees, cus-
to an interest-based system for tracking is simplifying it further with fewer broad tomer equity and performance.
New Delhi: o9 Solutions on Wednesday said it has instead of the existing system that iden- topics, and leaving out topics that are TCS becomes the first Indian
received equity investments totalling $295 million from tifies users more closely. Topics API sensitive like gender and race, and doing IT services company to rank in
General Atlantic, including its climate investing venture offers that platform. all this on your device, not on Google the top two of Brand Finance’s
BeyondNetZero, Generation Investment Management and Topics servers,” he added. IT Services Ranking report.
existing investor KKR, valuing the enterprise AI software takes into Google will start blocking third-party cookies on Chrome from 2023. AP However, even this system may not Infosys Ltd is ranked third,
platform at $2.7 billion. PTI account the be ideal, he said. “It will tell third-party pushing IBM behind.
interests of most harmful” replacement of third- if some of the concerns are addressed, trackers about what kind of sites (broad TCS has made long-term
users and creates interest-based catego- party cookies. It said while it would do but you still need to see whether the topics, for a start) you browse, and it efforts over the past decade to
FIR filed against Google, Pichai and ries, such as fitness or travel. The com- away with the privacy risks of third- more fundamental questions around could potentially help websites and increas
pany said initially there will be 300 top- party cookies, it could potentially create data collection, processing and usage advertisers identify people across devi- e its
others in copyright `violation’ case ics, which will be expanded later. The new ones. Privacy experts said FLoC’s are being adhered to,” said Isha Suri, ces enough at least to give more targeted brand
Mumbai: A First Information Report (FIR) has been registered users’ web browser will collect data on clustering algorithm could group peo- senior researcher at Centre for Internet advertising than intended.” value,
here on court orders against Google, its chief executive Sunder users for three weeks to create the top- ple based on sensitive attributes such as and Society (CIS). Google did not say when the system including investing in brand
Pichai and five other employees of the company in an alleged ics, which will then be shared with race, sexual orientation and disability. It Suri said more clarity is required on will be implemented, but said a global sponsorships, the report said.
copyright violation case, city police said on Wednesday. The advertisers. also used browser fingerprinting which the amount and type of information developer trial for Topics on Chrome In 2021 alone, TCS added the
search engine giant said in its reaction that it has a set mechanism The tech major has been criti- will be conducted “soon”. TCS London Marathon and the
which copyright owners can use to protect their content on plat- cized for its existing system of track- FRESH APPROACH Phasing out cookies will change TCS Toronto Waterfront Mar-
forms such as YouTube. As per a police official, the case was regis- ing users, with privacy advocates online advertising. Regulators in athon to its roster of 11 running
tered at the MIDC Police Station in suburban Andheri on the often criticizing it as too intrusive. It GOOGLE said THE tech major has TOPICS, Google said, GOOGLE didn’t say several countries are sceptical about sponsorships, the report said.
orders of a magistrate’s court on Tuesday evening. PTI had introduced Federated Learning initially there will be
300 topics, which
been criticized for its will be transparent,
existing system of
when the system will
and the user will have be implemented, but
the plan to replace it with sand- TCS also announced its part-
of Cohorts, or FLoC, which was first will be expanded at a tracking users for the option to delete said a developer trial boxes. In 2021, UK’s Competition nership for the Jaguar TCS rac-
proposed in August 2019 to replace later stage being too intrusive. topics from lists sent will be held “soon” and Markets Authority launched an ing team in Formula-E motor-
IIT Delhi firm SWATRIC develops third-party cookies, and was investigation into it. Suri said, Goo- sports, and forayed into golf by
designed to track users and data gle’s efforts to replace cookies partnering with the Dutch
all-weather fabric for national flags across websites. But that initiative was could reveal a user’s identity. being shared with third-party advertis- should not impede access to user data Open.
New Delhi: IIT Delhi’s startup SWATRIC claimed to have devel- also slammed by peers and privacy “We all agree by now that there were ers. In a blog post, the company said solely for its competitors, while the com- TCS has also made signifi-
oped an advanced fabric structure for the monumental national advocates. some serious concerns with FLoC. Goo- Topics will share three topics, one each pany keeps accessing and using it for cant investments in its brand by
flags, that can stay even in extreme weather conditions. At the lab At the time, the Electronic Frontier gle has said that under the new policy from the past three weeks, with websites own gains. It could lead to a host of anti- developing ‘Building on Belief’
scale, the researchers have enhanced the strength of the fabric Foundation (EFF) called it “perhaps the they would not be tracking sensitive visited by users. trust issues for Google in the future. brand positioning to build rela-
by 100%, said an IIT Delhi statement. TECHCIRCLE most ambitious, and potentially the information. So, prima facie, it looks as This process will occur entirely on the abhijit.ahaskar@livemint.com tionship with customers.

Venture Catalysts to launch fintech fund Biz accounting startup Vyapar raises $30 mn
Anuj Suvarna
anuj.s@livemint.com
in Series B round led by WestBridge Capital Council, and founder, ItzCash
(now EbixInc) is also part of the
BENGALURU core founding team.
The Mumbai-based venture Joseph Rai currently have over 1 lakh pay-

S
tartup incubator Ven- capital firm, which was set up joseph.rai@livemint.com ing customers,” said Dinesh
ture Catalysts is launch- in 2015, invests $250,000 to NEW DELHI Agarwal, founder and manag-
ing a fintech fund, called $2 million in seed and pre-se- ing director, IndiaMart.

Beams FinTech, to invest in
growth-stage companies, it
said on Wednesday.
It seeks to raise $100 million
(around ₹748 crore), and will
have a greenshoe clause. It will
write cheques for $8-$10 mil-
lion for Series B and C stages.
Venture Catalysts is in the
final stages of talks with banks,
non-banking financial compa-
nies, fintech founders, family
offices and ultra-high net-
worth individuals to mark the
first close, when the fund starts
investing, it added.
“Fintech is consuming an
increasingly larger slice of the
software pie. We are in fintech
3.0 right now in India, with the
first wave of lending and pay-
ments companies having
received a significant amount
of capital. Now the capital is
moving across segments. Sea-
soned professionals and high-
quality founders are moving
out of large firms to target new
categories to solve the long-
tail financial services demand
in India,” said Sagar Agarvwal,
S
ries A rounds. It has incubated imply Vyapar Apps Pvt. Sandeep Singhal,
and led investments in over 117 Ltd, which runs business Co-Founder and Managing
startups to date, according to accounting startup Vya- Director, WestBridge Capital,
its website. par, on Wednesday said it has noted that micro, small and
Others VC investors, too, raised $30 million as a part of its medium-sized enterprises
have launched fintech funds. Series B funding round led by (MSMEs) are the backbone of
IIFL Fintech, for instance, WestBridge Capital. the economy and Vyapar aims
launched a ₹100 crore fund in Existing investors IndiaMart to digitize them to help them
The startup incubator is targeting $100 million for the fund. August to back fintech start- and India Quotient also partici- grow.
ups. Earlier this week, pay- pated in the round, said Vyapar “We have been very
partner, Beams FinTech. “We finance, enterprise SaaS prod- ment solutions provider Pine in a statement. Fortytwo.vc, a Vyapar plans to use part of the funds to hire new workers. ISTOCK impressed with Sumit and
estimate that the maximum ucts, neo banks and platforms Labs Pvt Ltd’s founder and new investor, also contributed Shubham’s understanding of
number of unicorns in India catering to MSMEs,” said chief executive offi- to the investment and value. be on growth, efficiency and the challenges faced by Indian
will be from the fintech space Apoorva Ranjan Sharma, cer Amrish Rau, round, it said. Agrawal, co-founder and profitability,” he said. MSMEs and insights around
over the next decade.” co-founder and investment along with his angel Vyapar said it will chief technology officer at Vya- Vyapar’s business has grown how to solve them in the right
India has more than a dozen committee member, Beams. investor wife Sweta use the fresh funds to par, said the company wants fivefold and its workforce has way,” he said.
fintech unicorns, The founding Rau and neobank Jupiter’s grow its business through digi- every small busi- expanded from WestBridge invests out of its
including Bhar- The fintech fund team members of co-founder Jitendra Gupta, tal and distribution channels. A ness in India to Vyapar said it will around 60 to evergreen fund as against a
atPe, Meesho, called Beams Beams—Agarv- announced plans to jointly portion of the capital will also have a technolo- use the fresh more than 300 conventional private equity
Groww, Digit, Fintech will write wal, Sharma, Anuj launch White Ventures, a $40 be used to hire new workers gy-based business funds to grow its since its Series A fund that raises a fixed sum and
Cred, Zeta Five cheques for Golecha, Anil million (around ₹300 crore) and scale up work on new reve- m a n a g e m e n t business through funding round in returns the money along with
Star Finance, and
$8 mn-$10 mn for Jain and Gaurav fund, also backed by other nue streams, the company said. solution that is
digital and 2019 that was led either gains or losses to the lim-
Chargebee. Jain—had earlier investors (limited partners) Vyapar was founded in 2016 very simple to use by IndiaMart. ited partners towards the end of
“We expect Series B and C backed BharatPe, such as TVF Capital, Sequoia by Sumit Agarwal, Ruqiya while being distribution “We had ini- its life cycle, usually 10 years.
nearly $200 bil- stages Dukaan, Impact India, 3one4 Capital, and Irum, and Shubham Agrawal. accessible and channels tially invested in Earlier in January, West-
lion of new value Guru, Suryoday, founders including Beenext’s The startup provides account- affordable. Vyapar with a Bridge co-led a funding round
creation by exist- Flobiz, Esskay, Teruhide Sato. Last October, ing and inventory management “A good part of strong belief in the in LEAD that catapulted the
ing and new fintechs in India Klub, GetVantage, and Len- homegrown private equity platform for small businesses. business operations can be product and in the team’s abil- school edtech platform into the
over the next five-seven years. DenClub, the VC firm said. firm True North said it will Its services are available offline managed quite easily through ity to execute at scale. It is really unicorn club, or privately-held
Beams will primarily focus on Naveen Surya, the chairman focus on digital-first, fintech and helps businesses under- tech and as a result the whole heartening to see Vyapar grow startups that have a valuation of
segments such as embedded of the Fintech Convergence companies. stand their assets and liabilities focus of a business owner can several times since then – they at least $1 billion.

Agritech startups pivot to advisory services to onboard more users

Shouvik Das as E-Feed look to target a nas- lytics to learn the ideal crop for their farm, and the target prices milk per animal every day,” offered by agritech startups.
shouvik.das@livemint.com cent sector, existing players are a field, and yield estimates. they can afford. Once this is Ranjan claimed. “Agritech startups in India are
NEW DELHI also pivoting into this offering. Based on this, we’re offering selected, they can draw out a Driven by the advisory endeavouring to solve multiple
One such startup is the online advisories to farmers registered farm feed composition tailored model, E-Feed now claims to challenges in the agricultural

K
umar Ranjan, chief exec-
utive of agritech venture
E-Feed, built ludo and
other casual games into his app,
which he has distributed
among farmers. His core busi-
ness, though, is selling advisory
services to dairy, poultry, and
aqua farmers in the country.
The advisory model is a
growing trend among agritech
startups in India. Nasscom’s
Indian Tech Startups Report,
2021, reflects this. “Farm advi-
sory” was the top solution-
driven startup category in
agritech through the previous
year, according to the report.
As early-stage startups such
agri-trading marketplace
Agribazaar, which has grown a
new vertical in its business that
offers analytics-driven data to
its registered farm-
ers—and charges a
premium on prod-
ucts that customers
buy on its platform by promis-
ing better quality of produce.
“We’re trying to use artificial
intelligence (AI) and machine
learning (ML) to analyze the
satellite-based soil data that we
have, to see if we can help
improve the produce quality,”
said Amith Agarwal, chief exec-
utive of Agribazaar. “We’re
drawing data from these ana-
on our platform,” he added.
Agarwal claims that Agriba-
zaar already has over 700,000
registered farmers on its plat-
form, of which over
half are returning
users—and regular
users of its adviso-
ries. While Agribazaar does not
collect a subscription fee from
farmers using the advisories
yet, it adds a premium on the
produce sold through its
direct-to-consumer (D2C) mar-
ketplace.
“Consumers do not mind
paying a premium, and the effi-
ciency of our data-based farm
advisories is 99.99%, which
Nasscom’s Indian Tech Startups Report, 2021, says farm advisory
was the top solution-driven startup category in agritech. ISTOCK
works for all parties involved,”
Agarwal claimed.
E-Feed, too, is relying on
advisories as the key model for
its business. It has a team of sci-
entists, augmented by the
involvement of “ration balan-
cing software” that is inte-
grated into its mobile app. “The
software lets farmers select
their geographical location,
choose the type of animals on
to their needs,” said have more than value chain. These include sub-
Ranjan. BETTING ON 10,000 dairy, optimal productivity, low effi-
Based on a com- ADVICE 30,000 poultry and ciency in the supply chain, lack
bined output of sci- 100,000 aqua of access to markets and insti-
entist advisories A January 2022 farmers using its tutional credit, low penetration
and the software agritech startup
report by PwC and
services. Ranjan of crop insurance, poor-quality
data, dairy, poultry Ficci noted the rising said roughly 1-3% of inputs and lack of market linka-
and aqua farmers trend of advisories its users were pay- ges,” the report stated.
are recommended ing membership Ashish Aggarwal, vice-presi-
the right feed for NASSCOM said fee for full access to dent and head of public policy
agritech advisories
animals, which can are showing their its feed advisories. at Nasscom, said data-driven
be purchased impact on farming in A January 2022 agritech advisories are showing
directly through short time spans agritech startup their impact on farming within
E-Feed’s app. report by Pricewa- shorter time spans than earlier
“There’s a clear terhouseCoopers farming techniques. “We also
return on investment, too. and the Federation of Indian have drone startups working
Dairy farmers using our data to Chambers of Commerce & with the agritech sector in India
purchase feeds are already see- Industry also noted the rising to offer greater insights,” he
ing almost three litres more of trend of advisories being said.
04 THURSDAY, 27 JANUARY 2022
NEW DELHI MARK TO MARKET LIVEMINT.COM

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

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PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

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9.22 19.67 8.97 21.34 8.37 26.3 4.29 23.94 8.5 21.89 5.32 30.72 9.25 58.53

m MINT SHORTS
European junk bonds head for
Is global stock sell-off Expansion mode
Burger King added 20 stores in Q3FY22, which took its total store count to 294.

300
Store count

worst month since March 2020

European junk bonds are heading for their worst
monthly performance since March 2020, as expectations
that US interest rates are poised for liftoff and simmering
only a tantrum rerun? 250

200

150
294

Harsha Jethmalani 100 129

tensions over Ukraine weigh on risky assets. The Bloom-
berg High Yield Euro Index, which tracks more than 600 harsha.j@livemint.com
Party poopers Out of comfort zone
50
euro-denominated bonds across Europe, is down 0.86% Majority of global fund managers see a After remaining subdued in calendar

T
hawkish stance by global central banks year 2021, volatility indices have seen a 0
as of 25 January, with four trading days left. While small he recent sell-off in global FY18 FY19 FY20 FY21 Q1FY22 Q2FY22 Q3FY22
by comparison, that’s the worst showing since the 12.9% equities has shaken investors as the biggest risk to their portfolios. spike this year.
Note: These are end of period numbers net of closure/relocation Source: company presentation
rout seen 22 months ago when governments were out of their complacency, sug- Dec 2021 Jan 2022 % of respondents CBOE VIX India NSE VIX
enforcing strict lockdowns to stem the spread of the gesting 2021’s stellar run may 800 SATISH KUMAR/MINT

emerging coronavirus pandemic. The slump in the index

comes as investors anticipate central bank rate hikes with
the market’s focus trained on the meeting of US Federal
well come to an end. So far in
2022, the MSCI US and the MSCI World
indices are down by about 20% and 8%,
Hawkish central
bank hikes 700 Burger King posts strong
600
Reserve policymakers on Wednesday. Adding to the
more cautious mood are concerns about the risk of an
outbreak of hostilities in the Ukraine. BLOOMBERG
respectively. In 2021, they had rallied 37%
and 20%, respectively.
The MSCI India index has performed
Inflation
500 Q3, but consistency is vital
relatively better and is down by only Asset 400
1.32% in 2022. This compares with a 27% bubbles Pallavi Pengonda accelerated during the quarter with
rally in 2021. Consequently, fear gauges, 300
pallavi.pengonda@livemint.com the net addition of 20 new stores. This
the CBOE volatility index (VIX) and NSE Global
245.35 increased the total store count to 294

The trade gap of US increased to $101 billion last month
from a revised $98 billion in November 2021.
US goods-trade gap widens to
fresh record as imports jump
The US merchandise-trade deficit unexpectedly wid-
ened in December to a fresh record as imports continued
to rise, outpacing shipments overseas. The gap increased
to $101 billion last month from a revised $98 billion in
November, according to commerce department data
released on Wednesday. The figure exceeded all esti-
mates in a Bloomberg survey of economists, and the data
aren’t adjusted for inflation. The goods-trade shortfall
reached new records in 2021, consistent with solid con-
sumer demand and business investment. US importers
are struggling to meet demand as inventories remain lean
and supply chains are strained to move unprecedented
amounts of cargo. That’s also making it difficult for
exporters to ship goods out of the country.The value of
imports increased 2% to a fresh high $258.3 billion, led by
a record value of consumer goods. Capital equipment and
motor vehicles imports also picked up. Exports advanced
to $157.3 billion. BLOOMBERG
B
India VIX indices have risen 66% and growth scare
200 urger King India Ltd’s perform- at Q3-end. The company plans to
32%, respectively, so far in calendar year ance in the December quarter grow this figure to 320 stores by
2022 (CY22). In CY21, they fell 24.31% and Covid- 100
184.16 (Q3FY22) is encouraging. Aver- March-end. Burger King has nine res-
23.10% respectively. resurgence age daily sale (ADS) recovery in Q3 taurants under construction and 65
Against the backdrop of elevated infla- 0 10 20 30 40 50
0
1 Jan 2020 25 Jan 2022
stood at 104% of full-year FY20 ADS. more in the pipeline.
tion, worries remain about faster-than- Source: BofA Securities Values rebased to 100 Source: Bloomberg
This was driven by continued growth Post Q3 results, Burger King’s
anticipated interest rate hikes by the US in the delivery business while the shares were flat, although the stock
Federal Reserve and the end of its bond SATISH KUMAR/MINT SATISH KUMAR/MINT
dine-in segment put up a muted has lost about 30% of its value from
repurchase programme. Nearly 44% of rus variants. “Even as markets have con- This is a metacrisis that will see an accel- show. As such, delivery ADS recovery the 52-week highs seen in August on
global fund managers surveyed this cluded that Omicron does not pose a sub- eration towards a different globalization is 160% of FY20 levels vis-à-vis 78% the NSE. On Tuesday, the stock closed
month by BofA Securities said they see stantial long-term threat, we still expect in which the US can still thrive, but with for dine-in. at ₹133.10, marginally lower than ₹135
hawkish central banks as the biggest tail volatility to spike with each related head- huge challenges for many others, includ- “As per management, restrictions it closed on its listing day on 14
risk to their portfolios. In the December line. The fear of economic restrictions ing the EU,” analysts at Rabobank said in on malls as well as lower traction on December 2020. The issue price dur-
survey, this number stood at 42%. could remain an unwelcome overhang a report on 25 January. stores near Metro stations in the north ing the initial share sale was ₹60.
AP
“The sell-off that we are seeing in for global equity markets,” Malik said. Jasani sees any escalation in the Rus- has kept the dine-in recovery a little Going ahead, the pace of sales
global equities may have started as a taper In its latest outlook, the International sia-Ukraine conflict as a key risk for India, subdued,” pointed out improvement will be a
tantrum that may get followed by deeper Monetary Fund (IMF) has cut its forecast especially with regard to oil prices, which analysts from JM Finan- Going ahead, the key factor to monitor. It
cuts if the downside risks play out,” said for global economic growth due to an are already high. Brent crude oil prices cial Institutional Securi- pace of sales helps that recovery in
Deepak Jasani, head of retail research, anticipated slowdown in growth in China have risen by nearly 60% in the past year ties Ltd in a 25 January improvement and December was higher
HDFC Securities Ltd. The to about $89 per barrel, report. “This was also revival in the versus Q3FY22 at 111% of
crucial, two-day FOMC RISKS GALORE which is detrimental for a evident in its regional
dine-in segment FY20 ADS.
meeting was on when this large oil importer like India. growth,” the analysts The revival in the
article was being written. WITH inflation at a EQUITY investors ANY escalation in the But that’s not all. “Corpo- said. Note that region- will be key factors dine-in segment also
“Bears are winning the high, worries remain are also worried Russia-Ukraine rate earnings have been wise Q3 ADS recovery to monitor needs to be watched and
about faster-than- about slowing global conflict is a key risk
game of tug of war with bulls anticipated rate growth and covid for India, mainly with mixed, with more negative versus FY20 level for so would be the margin
to start 2022, as uncertainty hikes by the Fed related uncertainty regard to oil prices surprises so far. If the Bud- north stood at 95%, west trajectory.
around covid, earnings, get disappoints, we may see 119% and 108% for both south and east. “With the acquisition of BK Indo-
inflation and (central) bank foreign investors reducing Overall, Burger King’s ebitda, or nesia, also now approved by share-
policy fuels selling. Downward pressure and the US. The global economy is now exposure in Indian stocks, which means earnings before interest, taxes, depre- holders, sustaining historical growth
on equities is not necessarily signalling seen growing by 4.4% in 2022, lower than longer periods of market falls and high ciation and amortization, rose by 28% rates and steady margin improvement
the end of the current bull market, but the previous forecast of 4.9%. volatility, leading to moderation in valua- sequentially to ₹32.8 crore. Q3 ebitda here would also remain the other key
rather the arrival of a “tantrum 2.0”, said Also, geopolitical tensions have made tions of Indian equities,” said Jasani. margin expanded to 11.7%, a 130 basis monitorables,” the JM Financial ana-
Saira Malik, chief investment officer and a comeback with a looming conflict Currently, valuations of Indian stock points (bps) increase over Q2. One lysts said.
head of equity at Nuveen Asset Manage- between Russia and Ukraine. “Markets markets are pricey. Bloomberg data shows basis point is 0.01%. However, higher On the brighter side, BK Café out-
ment in a weekly note on 25 January. significantly misprice the odds of an MSCI India trades at a one-year price-to- depreciation and finance costs meant lets (18 opened in Q3) offer incremen-
Equity investors are faced with other impactful war happening over Ukraine, earnings (PE) multiple of 21, a steep pre- the company incurred a Q3 net loss of tal growth opportunities. Even so,
concerns, too, such as slowing global with major volatility implied for energy, mium to MSCI Asia Ex-Japan’s 12 times ₹15 crore. increase in the overall competitive
growth and uncertainty about coronavi- grains, fertilizer, metals, rates, and FX. PE. Meanwhile, network expansion intensity remains a key risk in general.

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

Goldman, Oil hits seven-year high on Ukraine issue Traders dump EM bonds as Fed,
Citi experts Reuters
Russia stand-off jitters intensify limited due to heightened ten- 19000 GMT from the US Fed-

say it’s time feedback@livemint.com

LONDON
sions between Russia and eral Reserve. The Fed is
Ukraine and the threat to expected to signal plans to
infrastructure in the UAE,” raise interest rates in March as Bloomberg downturn. Those expectations
to buy stocks
O
il rose to a seven-year said Hiroyuki Kikukawa, gen- it focuses on fighting inflation. feedback@livemint.com have led to a volatile start of the
high close to $90 a eral manager of research at In another key develop- year for US bonds, to which

M
barrel on Wednesday, Nissan Securities. ment, the Organization of the oney managers are their developing-world peers
Bloomberg supported by tight supply and Underlining a Petroleum pulling money from are traditionally sensitive.
feedback@livemint.com geopolitical tensions in tight supply and Brent crude rose Exporting Coun- emerging-market “Spreads widen out as the Fed
Europe and West Asia that demand balance, $1.37, or 1.6%, to tries and allies, (EM) bond funds at the fastest gets more hawkish,” said Win

A
fter a sell-off that put
global stocks on course
for their worst month
since the start of the pandemic,
strategists from Goldman
Sachs Group Inc. to Citigroup
Inc. say it’s now time to buy.
“Any further significant
weakness at the index level
should be seen as a buying
opportunity, in our view,”
Goldman strategists including
Peter Oppenheimer wrote in a
note on Wednesday. Citi strate-
gists including Robert Buck-
land, in turn, said the “rapid
de-rating of growth stocks may
slow as real yields stabilize.”
Equities have had a rough
start to 2022, amid a rise in
bond yields, expectations for
Federal Reserve tightening and
the threat of a war in Ukraine.
The global MSCI ACWI Index
is down about 7% in January,
raise concerns about further
disruption.
US President Joe Biden said
on Tuesday he would consider
personal sanctions on Presi-
dent Vladimir Putin if Russia
invades Ukraine. On Monday,
Yemen’s Houthi movement
launched a missile attack on a
United Arab Emirates base.
“Anxiety over potential sup-
ply disruptions in the Middle
East and Russia is providing
bullish fodder for the oil mar-
ket,” said Stephen Brennock of
Bitcoin profit measures suggest a prolonged bear market is quite likely
Bloomberg
feedback@livemint.com
Oil rose to nearly $90 a barrel
on Wednesday. REUTERS
oil broker PVM.
Brent crude rose $1.37, or
1.6%, to $89.57 at 13.19 GMT
after reaching $89.60, the
highest since October 2014.
US West Texas Intermediate
(WTI) crude was up $1.13, or
1.3%, to $86.73.
“The market downside is
wrote in a new report. “With
the bulls now firmly on the
back foot, such a heavy draw-
the weekly US $89.57 at 13.19 known as Opec+, pace in months as anxiety Thin, global head of currency
inventory report GMT after meets on 2 Febru- builds over tighter monetary strategy for Brown Brothers
from the Ameri-
reaching $89.60, ary to consider conditions and the threat of a Harriman & Co. in New York.
can Petroleum another output conflict over Russia’s troops at Meanwhile, a possible con-
Institute on the highest since increase. the Ukraine border. flict between Russia and the
Tuesday showed October 2014 Opec+ has been The $18.4 billion iShares J.P. Russian troop buildup near West over Russian troop
crude stocks fell gradually Morgan USD Emerging Mar- Ukraine has hit markets. AP buildup near Ukraine has sent
by 872,000 bar- unwinding kets Bond ETF (EMB) lost $387 shockwaves through markets.
rels, market sources said. 2020’s record output cuts, million on Monday, the largest brace for Federal Reserve poli- Morgan Stanley strategists
The official Energy Infor- raising its monthly target by outflow since March. The $2.5 cymakers to signal a rate hike in Simon Waever, Pascal Bode,
mation Administration (EIA) 400,000 barrels per day, billion Invesco Emerging Mar- March at the end of their meet- Emma Cerda, Belle Chang
supply report is due at 1530 though the actual increase in kets Sovereign Debt ETF (PCY) ing on Wednesday, as inflation wrote in a note Monday that the
GMT. supply has fallen short of that had a $50 million withdrawal, roars in the US amid supply tension buildup could drag
Investors across the markets as some countries struggle to the largest in over a year. bottlenecks and a rebound down developing-world bonds
are also awaiting the update at raise production. The losses come as investors from the pandemic’s economic in the near term.
favour the bears”, the note says. use any one indicator to defini- supply, excluding tokens held
And third, an on-chain tool tively call a bear market. NUPL by exchanges. As of this week,
named the realized-to-liveli- measures may be going down almost all of their supply is

and is set for its worst month
since March 2020. The S&P
500 Index, meanwhile, nar-
rowly avoided a correction on
Tuesday, closing more than 9%
off its record high on Jan. 3.
“The key thing for equities
from here is how much any of
this shift upward in interest
rate expectations and indeed in
financial conditions will hit
growth,” Goldman’s Oppen-
heimer said in an interview
with Bloomberg Television.
“That’s going to be key to deter-
mine where equity markets
stabilize.”
A
hefty debate is under
way in the crypto space
about whether bitcoin
is mired in a drawn-out bear
market.
Proponents of the notori-
ously volatile token say a
bounce could be around the
corner after it shed half its value
from an all-time high in
November. But a few industry
metrics suggest a crypto winter
is already here, according to
market-intelligence firm Glass-
node.
“A prolonged bear market is
in play,” analysts at the firm
down is likely to change inves-
tor perceptions and sentiment
at a macro scale.”
Glassnode cites a few indica-
tors to back up its assertion.
First, something called the
net unrealized profit/loss (or
NUPL) metric, which shows the
overall market profitability as a
proportion of market capitali-
zation. Standing at 0.325, it
suggests nearly a third of bit-
coin’s market value is held as an
unrealized profit, and typically
such low profitability is seen in
the early-to-mid phase of a bear
market.
ness ratio (or RTLR)—some- but “it’s too soon to tell if that underwater, which could put
thing of a hodler-fair-value means we are heading into a further pressure on prices.
model—which bear market”, she “This yet again creates a psy-
shows the market MVRV ratio said. Likewise, chological barrier whereby the
is below the RTLR suggests that the MVRV is signal- coins that are already the most
price of $39,200 bulls need to step ling market weak- likely to be spent and sold, are
but above the up in a big way, ness, but it’s diffi- now also holding an unrealized
realized price of cult to use that as loss, which further increases
else the
$24,200, a devel- an argument for the chances of a sale,” Glass-
A few industry metrics suggest that a crypto winter is already opment also typi- probabilities proving we’re in node analysts wrote.
here, according to market-intelligence firm Glassnode. REUTERS cally observed favour the bears the midst of a pro- Memories of the last crypto
during early-to- longed downturn, winter—a term that refers to a
Second is a measure known and poor investor profitability, mid stages of bear she said. sharp slump—are renewing
as the MVRV ratio, which is cal- according to Glassnode. Going markets. But if we are, it doesn’t look fears a repeat is currently play-
culated as market cap divided by its current reading, “the Noelle Acheson, head of good for short-term holders, ing out. Back then, bitcoin’s
by realized cap. It’s a useful tool bulls need to step up in a big market insights at Genesis currently in possession of price plunged by more than
for identifying periods of high way, else the probabilities Global Trading, said it’s hard to approximately 18.3% of the coin 80% to as low as $3,100 in 2018.
LIVEMINT.COM CORPORATE THURSDAY, 27 JANUARY 2022
NEW DELHI 05

Actis looking to invest Budget to incentivize green energy shift

even as auto firms bat for more PLI sops
$400 mn in Indian roads Alisha Sachdev
alisha.sachdev@livemint.com
NEW DELHI
to increase capital investment
in the components industry.
“Facilitating investments for
capacity building in newer

T
he budget for fiscal year technologies and encouraging
2023 will likely lay out a R&D and new product devel-
PE fund plans to acquire operating road assets and is in talks with several firms roadmap for transition- opment will be steps in the
ing to green energy, two gov- right direction,” said Sunjay
ernment officials said, even as Kapur, President, Acma.
Swaraj Singh Dhanjal auto manufacturers demanded Although demand for pas-
swaraj.d@htlive.com that incentives be widened to senger cars has been resilient
MUMBAI boost the production of electric following the outbreak of
vehicles (EVs). covid, the two-wheeler market

G
lobal private equity (PE) Budget proposals, aimed at in India has been under pres-
investor Actis is looking to supporting India’s commit- sure after the second wave.
make long-term yield-fo- ment to reduce carbon dioxide The auto sector is seeking a wider and more inclusive PLI scheme Sales of two-wheelers contin-
cused investments of up to emissions by 1 billion tonnes by and an extension of cut-off date to avail tax incentives. BLOOMBERG ued to see double-digit decline
$400 million in India, prima- 2030, could include incentives in December, after demand for
rily to acquire operating road assets, two for the creation of EV infra- March 2025 from March 2023 The officials cited above, entry-level of two-wheelers
people aware of the plans said. The money structure, fostering R&D and as covid-related issues have however, indicate that the pur- failed to revive.
will be invested from the $1.2 billion Actis skill development in the sector, delayed production. pose of the scheme is to create “From a two-wheeler per-
Long Life Infrastructure Fund. and an allocation for the “We’ve got strong policies ‘Champion OEMs’ and to initi- spective, over two-thirds of our
The investor is already in discussions National Green Hydrogen Mis- already in place at the central ate a market shift. They say this customers have average
with several construction firms that have sion announced in August last and state levels that are good to makes it unlikely that there will monthly incomes of less than
operating road projects and even other PE year, according to the two peo- create demand and to encour- be changes to the criteria ₹50,000 and this segment has
investors looking to sell their road portfo- ple cited above. Both spoke on age manufacturing. But when it required for manufacturers to got considerably weakened in
lios. “Actis is investing in the roads sector the condition of anonymity. comes to the PLI scheme, our be eligible for the scheme. the last two years. Measures to
through Actis Long Life Infrastructure The auto sector, meanwhile, ask would be to make it more These officials said the budget increase disposable income
Fund. This fund has the mandate to is batting for a wider and more inclusive and wider to enable is also unlikely to incentivize and bolster confidence in this
acquire long-term contracted, stable cash inclusive PLI (production- more EV makers to benefit the adoption of hybrid vehicles. segment of the population will
flow generating infra assets. Previously, linked incentive) scheme. from it. Currently, it is a highly The Automotive Compo- manifest in demand improve-
they did one transaction in renewables In 2010, Actis had tied up with Tata Realty and Infrastructure Ltd to develop road Automakers have also been selective scheme,” Naveen nents Manufacturers Associa- ment for us,” Rakesh Sharma,
through this fund last year when they projects in India, but sold its stake back to Tata in 2013. MINT seeking an extension of the cut- Munjal, managing director of tion (Acma) is looking to the Executive Director, Bajaj Auto,
acquired 500 megawatts (MW) of solar off date to avail tax incentives to Hero Electric, told Mint. budget to announce measures told Mint.
operating assets from Acme Solar, but diligence is in an advanced stage. They are global capital seeking higher returns, and
now, they are primarily looking at road also having conversations with a construc- roads are one of the few sectors in India
projects for this fund,” said one of the two tion firm on forming a platform that will that has a linkage to inflation; so, there is
people cited above, both of whom spoke acquire and manage operating road a sort of inflation protection that is not the
on condition of anonymity.
Actis is looking to deploy up to $400
assets,” the person cited above said. case in power. So, from a yield point of
An email sent to a spokesperson for view, if you are getting inflation protec-
Essar JV to build UK’s largest hydrogen hub
million from the fund into India. “So India Actis remained unanswered. tion, then it makes it very attractive. Plus,
is a very important part of this the whole InvIT (infrastruc- Subhash Narayan bonisation cluster. lent to domestic heating energy use fossil fuels by industries for
fund, but this amount will INVESTMENT PLAN ture investment trust) struc- subhash.narayan@livemint.com The move is core to Essar’s used by a major British city heating homes as well as run-
only go up in the next fund, ture is more tested in roads NEW DELHI global strategy of investing in region, such as Liverpool. ning buses, trains, and trucks
which will be much bigger,” ACTIS is investing THE fund has the ACTIS is in talks to and transmission than in energy transition The waste fuel across the HyNet region.
in the roads sector mandate to acquire acquire road assets

E
he added. through Actis Long long-term contracted, from Brookfield and
renewables; it’s a proven ssar has formed a joint by transforming Essar will help gases from Essar Around £1 billion will be
Mint has earlier reported Life Infrastructure stable cash flow Welspun Group’s case,” the second person venture, Vertex Hydrogen existing portfolio transform the Stanlow and natu- invested to run the hydrogen
that Actis is one of the suitors Fund generating infra assets infrastructure arm added. Ltd, with Progressive firms, and invest- hydrogen ral gas will be con- production hub. Essar will use
in the final lap of negotiations He added that after roads, Energy, to build the UK’s larg- ing in new ven- economy across verted by Vertex hydrogen to reduce its carbon
to acquire a portfolio of road the investor is also keen on est hydrogen hub at the Stan- tures, it added. into hydrogen, footprint at Stanlow Manufac-
North West
assets from Brookfield and is also in talks This is not the first time Actis has shown digital infrastructure investments in India low Manufacturing Complex, The UK’s first and the carbon turing Complex. Besides, Ver-
to acquire six road projects from Welspun interest in Indian road projects. and that the firm will soon be raising a new the company said on Wednes- low-carbon England and dioxide will be tex will provide low-carbon
Group’s infrastructure arm. Both road In 2010, the investor had tied up with fund for such investments. day. hydrogen facility North Wales safely captured hydrogen to chemicals, paper,
portfolios are worth over $1 billion in Tata Realty and Infrastructure Ltd to “Actis is a real assets-focused fund and As a majority shareholder in at Essar Stanlow and stored by its glass, ceramics, and flexible
enterprise value. develop road projects in India, but sold its is keen on sectors such as power, roads, Vertex Hydrogen, Essar will will sit at the heart HyNet partner power generation firms like
“The Welspun discussion is at the most stake back to Tata in 2013. real estate, and digital infrastructure. help transform the hydrogen of the HyNet low carbon clus- Eni SpA’s offshore fields in Liv- Tata Chemicals Europe, Inter-
advanced stage among the various con- “Since then, they have invested a lot in They can also invest in sectors adjacent to economy across North West ter, to produce 1GW of hydro- erpool Bay. The hydrogen pro- Gen, Glass Futures, Encirc, Sol-
versations they are having. Currently, the power sector, but roads are also a focus power such as transmission or city gas dis- England and North Wales, the gen per year, across two units, duction hub will provide low vay, Ingevity, Novelis, and
they are in exclusivity on that, and the due sector for Actis. Today, there is a pool of tribution,” he added. central part of HyNet decar- starting 2026, which is equiva- carbon energy to replace the Saica Paper.
06 THURSDAY, 27 JANUARY 2022
NEW DELHI CORPORATE LIVEMINT.COM

NITI plans
new index
for states
FROM PAGE 1
central ministries and states in
designing schemes, budgets and
assessing the outcomes of exist-
ing schemes.
Industry representatives
pointed out that scaling up the
size of the economy to $5 tril-
lion would not be possible
without the efforts and
progress of states. In addition to
Markets bet on budget to PMC a/c holders to
move courts against
spur demand, create jobs amalgamation plan
FROM PAGE 1 restrictions after it was found
guilty of misreporting loans given
the lead, along with PMC to developer Housing Develop-
Analysts wary budget may also take a populist turn ahead of assembly elections in seven states depositors/associations, and ment and Infrastructure Ltd
will appeal to the Supreme (HDIL). According to the final
Court to take suo moto cogni- plan, Unity SFB will take over the
Nasrin Sultana the limit of standard deduction and zance of the hardships PMC assets and liabilities of PMC Bank,
nasrin.s@livemint.com home loan tax deductions. Overall, we depositors are facing on its branch network and staff. As of
MUMBAI believe that policy reforms and govern- account of long lock-in period 31 March 2020, PMC Bank had a
ment spending on infrastructure devel- of a minimum of 10 years and deposit base of ₹10,727 crore and

ease of doing business, they
said it would need adequate
social infrastructure for their
people. According to Pradeep
Multani, president of industry
chamber PHDCCI, states must
focus on five growth pillars --
ease of doing business, reduced
business costs, quality educa-
tion, adequate health infra-
structure and skill develop-
ment and employment crea-
tion.
“States need to focus on
improving the quality of educa-
tion and health infrastructure,
facilitating agriculture infra-
structure, enhancing rural
development and entrepre-
neurship, single-window sys-
tems and ease of doing business
for the competitiveness of
enterprises,” said Multani. This,
he said, will support industriali-
zation for creating massive job
opportunities.
Experts said that states have
for far too long used land and
tax benefits to attract invest-
ments, but with the introduc-
tion of GST, very few states can
offer substantial state GST ben-
efits to attract investments.
“Investment attractiveness will
largely be driven through the
perception of governance, util-
ity cost, logistics cost, and qual-
ity of social infrastructure. Cur-
rent ease of doing business
indices really don’t capture
these,” said Nilaya Varma,
co-founder and chief executive
officer, Primus Partners, a con-
sulting firm.
A
s stock markets remain opment will boost economic recovery, ridiculously low rates of inter- loans worth ₹4,473 crore.
volatile ahead of next giving ample opportunities to retail est ranging from 1% to 2.75%,” In June last year, RBI cleared
week’s Union budget, ana- investors for growth,” Gopkumar said. said the release. the decks for its takeover by Cen-
lysts and brokerages However, some remain concerned Instead, the body demanded trum Group and payments com-
expect finance minister about the budget turning populist that the maximum lock-in pany BharatPe, and a banking
Nirmala Sitharaman’s proposals to be instead of a growth-focused one. period be five years for all licence was issued to set up a
fiscally prudent and growth-suppor- “With seven states going into elec- depositors and a minimum small finance bank in October.
tive, amid concerns that it may also take tions in 2022 and five of them gearing interest of 6% be paid to deposi- Centrum’s micro, small and
a populist turn. up for it in February, concerns around tors during this period. In addi- medium enterprise (MSME), and
Investors are optimistic that the gov- this budget turning into a populist one tion, the deposit insurance microfinance businesses will be
ernment will continue its growth are simmering. Despite the polls’ pres- guarantee corporation scheme merged with the new Unity SFB.
agenda through higher capex alloca- sure, we expect the budget to stick to (DICGC) be invoked to provide The payout plan will work out
tion, which will accelerate the invest- the reform agenda. While budget-mak- liquidity support to the bank to in the following manner: The
ment cycle and employment. ing is always a challenging exercise, the make full repayments. first payment of ₹5 lakh to all
Divestment, focus on tax compli- demand for continued support to It claimed that depositors will be
ance, ease of doing business and sup- growth, especially during the current the stress at PMC Depositors made as soon as
port for micro, small and medium pandemic-struck times, makes this task Bank was not a demanded that the DICGC transfers
enterprises (MSMEs) and the rural even more daunting. While there are usual bank failure the funds. The
maximum lock-in
economy are also some factors that headwinds to direct tax revenue collec- but a case of fraud. repayment clock
markets will watch out for in budget tion, we are quite hopeful for a big turn- S e p a r a t e l y , period be five years starts ticking Tues-
this year. Stock markets have been volatile ahead of next week’s Union budget. BLOOMBERG around on the divestment front. At the PMC Bank and a minimum day, the so-called
Analysts at ICICI Direct expect fiscal same time, pressures of elevated reve- Account Holder interest of 6% be appointed date. At
conservatism to return gradually, given With disinvestment of only ₹12,030 as new covid variants and related nue expenditure, particularly subsidy, Forum, a body of paid for this period the end of the first,
the likely inclusion of India in global crore in FY22, including Air India, ana- uncertainties keep markets on the are expected to moderate as we go into depositors, has second, third,
bond indices. lysts believe many of the large-ticket edge, the Union budget is expected to FY23. Capex spend will remain a key decided to move fourth and fifth
The brokerage firm sees fiscal deficit stake sales will happen only in FY23. bring about some confidence and sta- focus area in our view,” said BofA Secu- the high court. “This is our plight years, retail depositors will
to be contained at 6.3% of GDP against Divestment of Bharat Petroleum bility. rities. that even after the final scheme, receive an additional amount of
the 6.8% budgeted for FY22. Corp. Ltd, IDBI Bank, Shipping Corp., “With state elections lined up in over Nikhil Gupta, an analyst at Motilal it is detrimental for retail deposi- ₹50,000, ₹50,000, ₹1 lakh, ₹2.5
“With a goal to reach a $5-trillion Pawan Hans and BEML are expected in five states in 2022, we believe that a Oswal Financial Services, said the tors too as well as institutional lakh and ₹5.5 lakh, respectively.
economy by FY25, we expect capi- lower spending growth in the first and long-term depositors. It is Eighty per cent of uninsured
tal expenditure allocation to con- FOCUS AREAS eight months of FY22 is puzzling, totally against shareholders as it deposits outstanding to the credit
tinue to remain higher for FY23 as given that tax collections have been wiped the whole share capital. of each institutional depositor
well, while healthy tax revenues INVESTORS are DIVESTMENT, tax FISCAL conservatism HEALTHY tax buoyant. The entire scheme benefits the will be converted into perpetual
and a mega disinvestment pipeline optimistic the govt will compliance, ease of
continue its growth doing biz, support for
may return gradually,
given the likely
revenues and a mega
disinvestment pipeline
Besides critical macro numbers, SFB as they not only got a licence non-cumulative preference
may help contain fiscal deficit to agenda through higher MSMEs are factors inclusion of India in may help contain fiscal Gupta will closely track the budget but the whole PMC Bank assets shares (PNCPS) of Unity SFB with
5%,” it said. capex allocation that markets will watch global bond indices deficit to 5%, say analysts for announcements in three areas: in charity,” said Dipika Sahani, a dividend of 1% per annum paya-
ICICI Direct expects FY23 capi- self-liquidating temporary per- coordinator of PMC Bank ble annually. At the end of the
tal expenditure outlay to increase sonal job/income supporting Account Holder Forum. 10th year, Unity will use net cash
26.8% to touch ₹7 trillion, with signifi- FT23, besides privatization of two pub- focus on job creation and investment- measures to boost private consumption The lender was on the brink of recoveries from assets pertaining
cant allocation in roads, defence, rail- lic sector banks and the initial public driven growth would be paramount. in the immediate future; measures to collapse when the banking regu- to HDIL in excess of the principal
ways, water and urban infrastructure. offering of Life Insurance Corp. of We see that asset monetization and support the rural economy amid its lator seized it on 24 September loans to the group outstanding as
Disinvestment proceeds for FY22 India. higher disinvestment will continue to weakening and the impending state 2019, capped withdrawals and of 31 March 2021 to buy back
are expected to fall far short of budget According to B. Gopkumar, manag- fund development projects. To boost elections; and measures to revive the launched a probe into accounting these PNCPS at face value on a
estimates. ing director and CEO of Axis Securities, consumption, we expect an increase in residential real estate sector. lapses. It was placed under pro-rata basis.

Packaged goods sales dip amid covid curbs Recovery fails to accelerate in December
FROM PAGE 1 hygiene products. Consumer discretionary products. For on business will be significantly MINT MACRO TRACKER
interest in the hygiene cate- instance, demand for personal lower in this wave. MACRO TRACKER SNAPSHOT
homes. gory, especially household care products fell by 18.7%. “We Meanwhile, FMCG firms Parameter value Average band (five-year mean) As of December, four of the 16 indicators in the
tracker are above the five-year trend (highlighted
“As out-of-home consump- cleaning products, continues to continue to see the stress on have started to declare Decem- Performance better than five-year average in green) and 9 are below (red). Three
Performance worse than five-year average maintained the trend (amber). This is same as
tion reduces, we see packaged wane. This is despite a signifi- social interactions and regular ber quarter earnings. Sales of the reading from six months ago.
Performance in line with five-year average Now 6 months ago 1 year ago 2 years ago 3 years ago
foods and beverages products cant surge in daily caseload. school, college and office going Hindustan Unilever Ltd (HUL),
show a drop in sales. We’re also There seems to be almost no that have affected personal care India’s largest consumer goods
seeing a drop in mobility, with panic and hygiene products,” firm, rose 10% in the December
travel services being impacted. obsession, unlike Demand for Bizom said. quarter to ₹12,900 crore from CONSUMER ECONOMY PRODUCER ECONOMY
This has affected sales of ready- in earlier waves, home care Like in earlier ₹11,682 crore a year ago. Under-
to-eat products within pack- according to waves of the pan- lying volume growth, however, Passenger vehicle sales Tractor sales PMI composite Core* growth
products fell (growth in %) (growth in %) (in %)
aged foods that were the fast- Bizom. as consumers demic, consumer slowed to 2% from 4% in the pre- 20 -7.7 20 60 1
1.9 56.4 10
est-growing category in “The reason for interest in essen- vious quarter. HUL raised prod- 0 0
went easy on 40 0
December,” Bizom said. sluggish demand is tials and at-home uct prices last quarter to offset a -20 -20
However, with several large not just Omicron purchasing products saw an steep rise in input costs. Chair- -40 -40 20 -10

restrictions but a hygiene products uptick. “We do

-60 -60
cities reporting a decline in man and managing director 0
-20
*8 core infrastructure industries
Jan Dec 2021 -80
infections, beverages will start slowdown in see renewed Sanjiv Mehta said inflationary 2020 -100 Jan 2020 Dec 2021 Jan 2020 Dec 2021 Jan 2020 Nov 2021
seeing “aggressive” placement demand in January interest in rice, pressures may keep volume
on shop shelves by companies as compared to December. We edible oils, blended spices, atta, growth expectations in check. Broadband subscriber base Domestic air passengers Banks’ non-food credit Rail freight traffic
(growth in %) (growth in %) (growth in %) (growth in %)
next month in anticipation of a are seeing demand pick up etc.,” D’Souza said. Also, business conditions are
60 20 15 6.4 10 7.9
strong summer season, accord- since mid-January and expect Though consumer spending expected to remain tough amid 50 10.1
0
-7.1
ing to Bizom. it to continue in February,” said remained focused on need- a slowdown in the rural market, 40 -20
10 0
Demand for home care prod- Krishnarao Buddha, senior cat- based products as they eschew Mehta said in a post-earnings 30 -40 5 -10
ucts, too, dropped in the first 15 egory head at Parle Products. discretionary expenditure, media call on 20 January. 20 -60
0
10 Jan -20
days of the month as consum- Meanwhile, Bizom data also D’Souza said business recovery Pallavi Pengonda contributed Jan 2020 Nov 2021 2020 Dec 2021 Jan 2020 Nov 2021 Jan 2020 Dec 2021
ers went easy on purchasing indicated lower spending on would be faster, and the impact to the story. -100

EXTERNAL SECTOR EASE OF LIVING

RegTech can help improve compliance Import cover
(forex reserves in months)
20
13.2
Rupee vs dollar
(m-o-m in %)
2
-1.2
CPI
(inflation in %)
8 5.1
Core CPI
(inflation in %)
6
5.8
1
15 0 6 5

T
he financial industry is Sudipta Bhattacharjee, part- -1
-2 4
10 4
no stranger to complying ner, Khaitan and Co, said there -3
-4 2 3
with regulatory require- are concerns over technology 5
Jan 2020 Dec 2021 Jan 2020 Dec 2021
Jan 2020 Dec 2021 Jan 2020 Dec 2021
ments via technology. Reg- outpacing laws and regulation,
Tech, or managing regulatory and thee regulatory vacuums
processes via innovative digital can hurt live technologies. He Labour-intensive sector exports Trade balance Real wage growth Labour force participation rate
(growth in %) (as a % of total trade) (in %) (in %)
solutions using artificial intelli- said a regulatory sandbox is key 10 10 40.9
2 -0.7 45
gence, biometrics, machine because if useful disruptive 0 7.5 -22.3
0
40
learning, and big data, can help technology is banned, then it -20 -10 0
in compliance, monitoring, and would just be driven under- -40 -20
35

regulatory reporting effi- ground but it would not disap- -60

ciently.
However, it is not just about
innovation that undergirds the
rise of RegTech, there is also a
massive cost attached to it that
reflects in the cost of doing
business. India has a long way
to go to acclimate to this digiti-
zation and disruptions such as
the emergence
of cryptocur-
rencies.
So, how will PRESENTS
India unleash
the potential of
blockchain and IN ASSOCIATION WITH
its cross-sector
applications?
Will features
like trade finance be able to
adhere to monitoring obliga-
tions, even if India were to
quickly adapt to the RegTech
revolution? And, how will it
Khaitan and Co. partners Sudipta Bhattacharjee and Sanjay Khan Nagra.
cope with de-bureaucratiza- these concerns. Besides, con-
tion and automation? sidering that it is an evolving
In the first dispatch of Mint’s technology changing almost on
Demystifying Regulation in a daily basis is it possible to
Technology, track the innovations and
experts deliber- address them with relevant
ated on crypto- changes in regulatory norms?
currency regu- The governments can clas-
lation. sify crypto the way they classi-
Sanjay Khan fied wallets, defining it as a new
Nagra, partner, category as it creates different
Khaitan and Co, sets of problems, Nagra said.
said a key Considering that India is a
dilemma of semi-open economy with no
innovation is not knowing if an robust capital flight, the regula-
idea would impact the world. tory framework for cryptocur-
However, for cryptocurrencies, renicy must be formulated with
the regulatory concerns are the help of a cross-section of
real, and it is time to address experts, he added.
pear. He said the success of
Unified Payments Interface, or
UPI, and other digital payment
platforms shows that India was
ready for cryptocurrencies. It
cannot be considered in bina-
ries, wherein the government
introduces its own digital cur-
rency, but bans the rest, as this
is a dangerous approach, he
said. The government is aware
of the hundreds of use cases of
blockchain wants to leverage
the technology to ensure tar-
geted delivery of benefits and
subsidies, he said. The crypto
bill must have a broad-based
approach, and consider issues
associated with currencies like
Bitcoin, he said. India’s renew-
able energy policies must also
be integrated and policymak-
ing has to intervene if cryptos
take an ecological toll.
Jan
-30 -2 30
2020 -77.4 Dec 2021 Jan 2020 Dec 2021 Jan 2020 Nov 2021 Jan 2020 Dec 2021
All growth/inflation figures (except for rupee vs dollar) are calculated as the compounded annual growth rate (CAGR) since the same month two
years ago. The rupee vs dollar growth is with reference to the previous month. The grey band denotes an average range constructed around the
five-year mean value. A wider grey band reflects higher volatility.
All data as of 25 January 2022. Source: Centre for Monitoring Indian Economy, Bloomberg, Mint calculations
AHMED RAZA KHAN/MINT
FROM PAGE 1 Strong core imports in the festive to the base effect. Compared est (40.9%) since August 2020.
season could be a sign of recover- with the same month two years Several indicators may see a
The external sector, which ing domestic demand, though it ago, inflation slowed in Decem- dip in January due to curbs in
includes trade and foreign may also hint at domestic supply ber. Though less than the first some states. A business resump-
exchange, has been lax for a few bottlenecks, said an ICICI Securi- two waves, the third wave could tion index run by Nomura has
months, with imports outpacing ties report on 4 January. still be inflationary, said analysts saw a substantial drop due to a
exports. In December, exports Aditi Nayar, chief economist at Nomura, pointing to rising drop in public movement. Ana-
recovered to a record $37.8 bil- at ICRA, said the third wave crude prices and a significant lysts have downgraded GDP
lion amid the Christmas season. could squeeze wedding demand build-up of input cost pressures. growth projections for the Janu-
Labour-intensive sectors such as for gold and, in turn, help the Real wages in rural India ary-March quarter but said the
tobacco and gems and jewellery trade deficit to scale back. stayed below pre-covid levels, impact of the third wave will be
posted their best growth in four The ease of living segment but the gap is narrowing. The smaller than earlier. However,
years, indicating a gradual easing was in red for the eighth straight labour participation rate, as with Mumbai and Delhi already
of labour market stress. But none month. The headline inflation measured by a survey by the past their third wave peaks, the
of this could narrow the trade figure jumped from 4.9% to Centre for Monitoring Indian economic hit may remain lim-
deficit as core imports surged. 5.6%, but that was primarily due Economy, improved to the high- ited.
LIVEMINT.COM CORPORATE THURSDAY, 27 JANUARY 2022
NEW DELHI 07

Tourism industry seeks sops TELEVISION NEWS RATINGS:

A THEATRE OF THE ABSURD
from budget to reboot sector ORDINARY
channels during peak elections when the stakes
are high. On the other hand, what continues to
intrigue media experts is the troubling silence
of advertisers which have a presence on BARC’s
POST board. Advertising and broadcasting veteran
Chintamani Rao has pointed to this big anomaly
The relief sought include tax breaks and extending the LTA exemption limit for taxpayers SHUCHI BANSAL over and over again. As TV ad pie grows, nearly
₹5,000 crore is spent on news channels by
Respond to this column at advertisers. “If it’s their money fuelling the sys-
Varuni Khosla shuchi.b@livemint.com tem; why hasn’t anyone heard from them on the
varuni.k@livemint.com matter? At the risk of repeating myself, it is

T
NEW DELHI he curtains are not yet down on the televi- strange that Indian Society of Advertisers and
sion news channel ratings drama. It’s an Advertising Agencies Association if India—

T
he travel and tourism indus- ongoing saga involving manipulation of which are 40% stakeholders—remain silent on
try, hammered by the pan- television rating points (TRP), mysterious sus- the issue,” he said.
demic, is hoping the budget pension of news ratings, their prolonged Officially, BARC did not respond to Mint’s
will offer tax breaks and absence, and, now, the reluctance to restart queries on the ratings delay and whether it’s sid-
other incentives to help it them despite the government’s intervention. ing with a few channels.
rebound from the worst slump on Add to this the bitter rivalry between the two However, speaking on condition of anonym-
record. news channel associations—the News Broad- ity, a BARC executive denied that the measure-
Among the industry’s demands is casters & Digital Association (NBDA) and the ment firm was taking sides. He explained that
extending the leave travel allowance News Broadcasters Federation (NBF)—with during parleys with the ministry, very early on,
(LTA) exemption limit for taxpayers, some members of the latter alleging that mem- BARC had said it will take 8-10 weeks to resume
said travel firms, including MakeMyT- ber channels of the NBDA are stalling the rat- news genre data. “The delay in resumption is
rip, Ixigo and Thomas Cook. ings despite the mandate from the ministry of being politicized and the larger overhaul sug-
“We request the government to con- information and broadcasting (I&B). gested by the ministry
sider extending the LTA exemption Earlier this month, the I&B ministry asked Though some and accepted by
limit and bring it under the yearly the Broadcast Audience Research Council say news ratings BARC has got lost in
allowances list for taxpayers. Currently, (BARC) India, the TV viewership measurement conspiracy theories,”
one can apply for a leave travel exemp- company, to resume publishing data for the will resume in he said. Taking a leaf
tion once in two years or twice in a four- news genre. Access protocols for data have been March, so far, from the Shashi She-
year block. We request it to be made revamped and tightened, the ministry said, they have not khar Vempati report
yearly,’’ said Rajesh Magow, directing BARC to release data with immediate surfaced on improving BARC’s
co-founder, MakeMyTrip. effect. The directive has been followed by dead functioning and the
The tax-exempted LTA can cur- silence from BARC, which has been at the cen- Telecom Regulatory
rently only be claimed twice in four tre of controversy ever since the alleged TRP Authority of India’s recommendation on the
years. However, MakeMyTrip said it The tourism industry wants leave travel allowance to be brought under the yearly allowances list of employees. MINT scam surfaced in 2020 and its former officials matter, the ministry, under a new secretary, has
would be better to claim this benefit were arrested briefly in the aftermath. asked for four independent directors to be
annually instead of every alternate total operating cost of an airline) will are required to collect 5% TCS on bill- rip. Though some say news ratings will resume in appointed to BARC’s 10-member board.
year. bring much-needed relief to the avia- ing to foreign tour operators or individ- SOTC Travel, too, expects the gov- March, so far, they have not surfaced, irritating It has also advised the induction of independ-
Online travel portal Ixigo’s tion sector,” Bajpai said. ual foreign travellers to India despite ernment to consider further economic several news broadcasters. TV9 Network’s chief ent members in the technical committee where
co-founder Aloke Bajpai expects the The budgetary allocation for the the fact they are not liable to pay relief for the industry such as lower executive officer (CEO) Barun Das has been the broadcasters should not be in the majority.
government to strategize a sustainable tourism ministry was cut to ₹2,026.77 income taxes here. The FTOs or foreign taxes and incentives to help drive the most vocal among them. He has repeatedly said “BARC is finalizing the ratio,” the executive
long-term plan to help revive road to recovery. vested interests of two or three news channels said. Similarly, the oversight committee should
inbound international travel, WISH LIST Vishal Suri, managing director, enjoying the advertising revenue advantage of not have paid employees of BARC on board.
which is currently disrupted by SOTC Travel, said rationalizing the their old rankings and viewership have pre- That the ministry has also constituted a com-
ongoing waves of the pandemic. THE tourism sector IT also expects the TAX breaks and ALSO, it wants the tax structure would reduce com- vailed in stalling the ratings for so long. mittee to study the Return Path Data (RPD)
He said that the industry alos expects a long-term, budget to allot
sustainable plan to incentives for
waivers for the airline government to drop
sector to help faster TCS of 5% on the
plexities and enable the industry to Speaking in support of Das, a person familiar methodology to boost the sample size is also in
expects the upcoming budget to help revive inbound domestic tourism recovery, is also a sale of overseas focus and accelerate businesses with the operations of BARC said BARC’s board the public domain. “These are building blocks
offer incentives to promote international travel and its promotion wish of the sector. holiday packages further. He said also that corpo- appears to be succumbing to pressure as usual. to revamp the ratings firm. And to those asking
domestic tourism. “IT deductions rates should be offered incentives “Why else do you think BARC went dark on if the systems have been strengthened, I’d say,
on domestic travel and tourism for organizing meetings and con- news ratings in the first place,” he said, declining BARC systems are kosher; it’s people in the
spends will help incentivize tourism crore for 2021-22 from ₹2,500 crore in nationals are not residents in India and ferences such as partial or full tax to be named. The urgent need for viewership news business themselves who violate panel
and boost domestic travel further. Tax 2020-21. This year, the Indian Associa- hence are not liable to pay income tax. exemptions on expenses incurred to data is understandable. With elections in five homes,” he said. Clearly, the only solution to put
breaks and waivers for the airline sector tion of Tour Operators hopes the gov- “We request the government to con- boost travel and tourism. states in the next two months, news viewership an end to this off-screen drama is integrity of
will also help aid faster recovery of the ernment will withdraw tax collection at sider withdrawing Tax Collected at “The government should reboot the is bound to spike, allowing channels a chance to purpose of all stakeholders.
industry. Bringing in aviation turbine source (TCS) for foreign tourists to Source (TCS) of 5% on the sale of over- tourism economy on a stronger, fairer revise their ad rates and pump up volumes. Shuchi Bansal is Mint’s media, marketing and
fuel under the ambit of GST (which encourage inbound tourism. Starting seas holiday packages by Indian tour and more sustainable footing,” Suri Some say BARC may be trying to avoid a situ- advertising editor. Ordinary Post will look at pre-
currently comprises 40-45% of the October 2020, domestic tour operators operators,” said Magow of MakeMyT- said. ation where it gets caught between sparring ssing issues related to all three. Or just fun stuff.

Boeing posts loss as 787 jet deliveries stall

Uday Sampath Kumar & the hands of the FAA,” said remains at a low production
Eric M. Johnson Vertical Research Partners rate, with an expected gradual
feedback@livemint.com analyst Rob Stallard. return to five per month over
Reuters reported last week time, Boeing said. Calhoun
that deliveries of the 787 are and chief financial officer

B
oeing Co said on
Wednesday it incurred
$4.5 billion charges in
the fourth quarter on its side-
lined 787 program, obscuring
the US planemaker’s long-
awaited return to positive cash
flow fueled by rebounding 737
MAX deliveries.
The planemaker sank to a
loss after two quarters of prof-
its because of the charges.
Shares in Boeing fell 3.6% as
the array of charges and
uncertainty over the 787 pro-
gram dwarfed a surprise
return to positive free cash
flow and plans to increase pro-
duction on the 737 and 777.
The quarterly results under-
score the challenges Boeing
faces as it seeks to rebound
from the coronavirus pan-
demic and 737 MAX safety cri-
expected to remain frozen for Brian West later told investors
months as US regulators on a call 737 MAX deliveries
review repairs and inspections and service would resume in
over structural flaws in the China’s crucial aviation mar-
jets, while designs for the ket in the first quarter.
larger 777X face B o e i n g
further regula- The quarterly unveiled a $3.5
tory pushback results underscore billion pre-tax
Boeing Co incurred $4.5 bn from Europe. the challenges non-cash charge
charges in Q4 on its sidelined “ W hi le we Boeing faces as it related to 787
787 programme. AFP never want to dis- delivery delays
seeks to rebound and customer
appoint our cus-
ses, while navigating industrial tomers or miss from the covid concessions, and
and regulatory currents on its expectations, the pandemic another $1 billion
bigger 787 and 777X flagship. work we’re put- in abnormal pro-
Its ability to resume deliver- ting in now will duction costs.
ies to airlines depends on build stability and predictabil- Boeing had previously fore-
approvals from the US Federal ity going forward,” Boeing cast low production rates and
Aviation Administration. chief executive Dave Calhoun rework for the 787 due to manu-
“Here we go again. Just as told employees in a memo facturing flaws and required
we saw with the 737 MAX, seen by Reuters. inspections and repairs to result
Boeing is now racking up mas- Calhoun stopped short of in about $1 billion of abnormal
sive charges on the 787 with no saying when deliveries of 787 costs—putting the overall price
firm end in sight, and its fate in would resume. The program tag at some $5.5 billion. REUTERS

OTT viewership rise slows despite wave 3

Lata Jha across India and is turning into
lata.j@livemint.com a family service, said Balk-
NEW DELHI rishna Hari Singh, founder and
chief executive officer (CEO),

W
ith online content
viewing habits now
established after a
big jump in the first lockdown
in 2020, video streaming plat-
forms and media industry
experts said the ongoing third
wave of covid-19 may see only
a small jump of 4-5% in viewer-
ship or subscriber additions
for over-the-top (OTT) plat-
forms. This may be because of
the absence of stringent coun-
trywide lockdown as well as of
people recovering faster from
Omicron and resuming work.
Services, too, have access to
fewer films as many of them
postponed their release in the-
atres because of the restric-
tions during the ongoing wave
and will not be available for
premiere on OTTs.
“The biggest spike for servi-
ces happened during March
and April of 2020 and viewer-
Media industry experts said the ongoing third wave of covid-19
may see only a small jump of 4-5% in viewership for OTT.
ship did not revert (to pre-
covid levels). People have been
working from home and many
have figured out a way to
watch OTT content on smart
TVs,” Ajit Thakur, chief execu-
tive officer at Telugu stream-
ing service aha said.
On the other hand, fresh
content and new releases
always lead to a spike in view-
ership, said Siddhartha Roy,
ISTOCK
chief operating officer, Hun-
gama Digital Media, which has
just released the third season
of its psychological drama
Damaged to good traction and
which had been seeing organic
growth in metros such as
Delhi, Mumbai, and Benga-
luru even before the Omicron
wave.
OTT is becoming the first
choice for many households
Frenzi, a single window search
and recommendation app for
streaming content.
“As the country moves
towards cord-cutting over a
period of time, choosing to
stream even television shows
according to convenience as
catch-up content has gained
ground,” he said. The ease of
using the platforms has helped
people stick on.
“A large part of the shift hap-
pened in 2020 during the first
lockdown when many came
on to platforms that had begun
premiering films that had
skipped theatrical release. By
the second lockdown, though,
more original content was
being pushed,” said Singh.
Many viewers opt for annual
subscriptions that take time to
expire, he said, explaining the
reason behind marginal addi-
tions in subscribers.
08 THURSDAY, 27 JANUARY 2022
NEW DELHI GLOBAL LIVEMINT.COM

Fed expected to signal rate Intel wins EU court bid to

annul $1.2 bn antitrust fine
increases to start in March Kim Mackrael
feedback@livemint.com

I
ntel Corp. won an annul-
ment of a $1.2 billion fine
issued by the European
High inflation raises questions over how fast the central bank plans to tighten policy Union’s antitrust regulator
more than a decade ago over
allegations the microchip pro-
Nick Timiraos ducer had used its commercial
feedback@livemint.com power to squeeze out a compet-
itor.

F
ederal Reserve officials are set
to keep interest rates near
zero Wednesday, at the con-
clusion of their two-day pol-
icy meeting, while likely sig-
nalling they are preparing to raise
rates at their following gathering in
mid-March.
The central bank is also poised to
approve one final round of asset pur-
chases and resume deliberations over
how and when to reverse the pandem-
ic-driven expansion of its $9 trillion
securities portfolio later this year.
The Fed will release its policy state-
ment at 2 pm ET. Most of the focus is
likely to center on Chairman Jerome
Powell’s news conference at 2:30 pm.
Here’s what to watch:
Marching On
The Fed slashed interest rates to
near zero in March 2020, when the
coronavirus pandemic upended
global commerce. In September 2020,
Fed officials said they would hold rates
there until inflation was forecast to
moderately exceed 2% and until the
labor market returned to levels con-
sistent with maximum employment.
The Fed could use its postmeeting
statement on Wednesday to declare it
has essentially met both goals. Using
the Fed’s preferred gauge, inflation
surged last year, to 4.7% in November
from a year earlier, excluding volatile
food and energy categories, easily sur-
passing the first objective. Most Fed
officials have suggested that the sharp
drop in unemployment in the second
half of last year, to 3.9% in December,
together with strong wage growth has
nearly achieved the second goal.
Such an acknowledgment would
allow the Fed to provide its clearest
signal yet that it is prepared to raise
interest rates by a quarter percentage
point at its meeting 15-16 March .
Pressure Points
Mr. Powell is likely to be pressed on
his inflation outlook, which could
shape how many times the Fed lifts
rates. He provided his latest thinking
in testimony on Capitol Hill this
month, where he said inflation is high
because supply and demand are out of
whack.
The Fed can’t solve shipping or sup-
ply-chain bottlenecks, but higher
interest rates can eventually cool
demand by slowing hiring and income
growth. Officials are hoping that infla-
tion declines as the supply problems
ease and demand shifts from goods,
The Fed slashed interest rates to near zero in March 2020.
where prices rose sharply last year,
toward services, where inflation has
been less extreme.
Central-bank officials last month
penciled in three quarter-percentage-
point interest rate increases this year
and three more next year. They based
the projections for the increases on a
forecast that sees inflation falling
below 3% by December and to slightly
more than 2% by the end of next year.
Still, several officials have stressed
that there is great uncertainty around
that forecast, and investors are hungry
for clues about how the Fed would
react if inflation looks likely to stay
above 3% around the end of this year.
Rate Guidance
Given the uncertainty, officials will
also have to debate whether to offer
any meaningful forward guidance, the
words they use to describe their inten-
tions for interest rates over the next
few years. Forward guidance has been
an important part of the Fed’s mone-
tary-policy arsenal for most of the past
two decades, a period in which infla-
tion and interest rates have generally
been low.
The Fed first relied on such condi-
tional promises—often cloaked in
adjectives that became fraught with
significance—in the early 2000s.
Before commencing rate rises in
2004, the Fed said such increases
were likely to proceed at a “measured”
pace. In 2015, the Fed prepared mar-
kets for an even milder path of rate
rises by telegraphing such increases
would be “only gradual.”
The economic environment today—
one with much greater uncertainty
about how labor markets, wages, and
inflation will unfold—may limit the
types of clues or assurances the Fed
can provide. In addition, Mr. Powell
could face questions over the
prospects for rate rises at consecutive
meetings, held roughly every six
weeks—something the central bank
hasn’t done since 2006—or for larger,
half-point rate increases. The Fed
hasn’t done that since 2000.
Asset Purchases
After the Fed cut rates to near zero
two years ago, it started buying Trea-
surys and mortgage-backed securities
to provide additional stimulus. Offi-
cials began decreasing those pur-
chases last November, and in Decem-
ber quickened the wind-down of the
bond buying. They are likely to
approve one final tranche of pur-
chases at their meeting this week
while signaling that this would con-
clude the expansion of the Fed’s hold-
ings by March.
Asset Reductions
Officials are likely to receive brief-
ings from Fed staff on proposals to
begin shrinking their nearly $9 trillion
bond portfolio. Mr. Powell and his col-
REUTERS
leagues have suggested that this proc-
ess is likely to start sooner than it did
after the Fed stopped buying bonds in
2014. They have also indicated that
the process of shrinking those hold-
ings—by allowing securities to mature
without reinvesting their proceeds
into new ones—is likely to proceed
faster than it did the last time the Fed
reduced its holdings in 2017.
It is possible offi-
cials could release
high-level princi-
ples to guide inves-
tors around how the Fed will manage
its asset portfolio after the holdings
stop increasing in March, but officials
are unlikely to release more specifics
about how the reduction would pro-
ceed. Mr. Powell has said it could take
another two or three meetings to firm
up such plans, suggesting the process
is likely to start no sooner than the
middle of the year.
Several Fed officials, including Mr.
Powell, have indicated that they want
adjustments of the Fed’s short-term
benchmark interest rate, the federal-
funds rate, to be the primary way that
the central bank responds to changes
in the economic outlook. This means
they are likely to again prefer a path
for unwinding their asset holdings
that runs on a premapped schedule
once they have raised rates somewhat.
©2021 DOW JONES & COMPANY, INC
The court’s decision is a blow
to the European Commission,
the bloc’s main antitrust regu-
lator, which is seeking to
expand its reach through new
regulations and a reinterpreta-
tion of its existing powers. Law-
yers said a ruling in favour of
Intel could put a greater bur-
den on the commission in pur-
suing some antitrust cases.
The EU’s General Court in
Luxembourg on Wednesday
struck down much of a 2009
finding by the regulator that
Intel had abused its dominant
position by issuing loyalty
rebates and payments that
restricted rival chip maker
Advanced Micro Devices Inc.
from competing.
The court said that “analysis
carried out by the commission
is incomplete” and didn’t make
it possible to establish a requi-
site legal standard for judging
the competitive impact of
rebates. Significantly, the court
said it couldn’t identify the
damages linked to Intel’s prac-
tices and so completely
annulled the portion of the
commission’s decision that
related to the fine.
A central question for the
court was whether the commis-
sion had completed a sufficient
economic
analysis to
show that
Intel’s
alleged behaviour harmed
competition. Although the
commission carried out an eco-
nomic analysis of the case
before imposing its fine, that
work wasn’t assessed by the
General Court when it dis-
missed Intel’s initial appeal in
2014.
Intel appealed to the Euro-
pean Court of Justice, the EU’s
top court, which in 2017 sent
the case back to the lower
court, saying it should have
examined the commission’s
assessment of whether the
company’s rebates shut out
competitors.
A commission spokes-
woman said the regulator “will
carefully study the judgment
and reflect on possible next
The court said it couldn’t identify the damages linked to Intel’s
practices. BLOOMBERG
steps.” actually harmed an equally effi-
An appeal of the decision is cient competitor.
possible, and would return the The commission’s initial
case to the Court of Justice. decision took issue with rebates
The ruling comes on the Intel offered to four major com-
same day that Intel is set to puter manufacturers that used
report fourth-quarter earnings. its microchips between 2002
The company is expected to and 2007. It also said Intel
post lower quarterly sales amid made payments to a retailer on
a time of booming chip reve- the condition that it would only
nue, highlighting that chief sell computers that contained
executive Pat Gelsinger’s Intel’s microprocessors.
efforts to revive the semicon- The court’s criticism of the
ductor giant’s fortunes are a commission’s initial economic
multiyear undertaking. analysis could make it harder
The chip company is for the regulator to pursue
expected to post $19.2 billion in cases alleged abuse of domi-
sales, down 4% from the year- nance in the future, said Matt-
earlier period, according to an hew Levitt, a partner at law firm
average of analysts surveyed on Baker Botts. “The inevitable
FactSet, in part reflecting the consequence would be that it
sale of its memory business. Net would increase the burden on
income is expected to be down the commission in pursuing
more than 45% from a year ear- these cases,” he said.
lier, clocking in at $3.2 billion, The Intel case, which deals
as Intel ramps up investments with practices that took place
in new plants and products. more than a decade ago, dem-
Intel in recent onstrates how
years has fallen The European long it can take for
behind rivals in Union is also some antitrust
chip making after attempting to cases to be
slip-ups, and pass new resolved.
competitors have The EU is
regulations that
taken market attempting to pass
share in some take aim at big new regulations,
semiconductor tech companies including the Dig-
categories. Gel- ital Markets Act,
singer, who took that take aim at
over as CEO in February 2021, big tech companies that some
has been trying to reverse the lawyers say could reduce the
decline and said in December overall volume of cases that
that “it’s a five-year assignment require separate antitrust
to get all of that well and investigations.
healthy again.” It has also expanded its
An Intel spokeswoman said authority to review more
the company is reviewing the merger cases through a reinter-
decision. The company had pretation of a longstanding law,
argued that the General Court’s which allows member states to
previous judgment had failed refer smaller deals to the com-
to account for the broader cir- mission if they view them as
cumstances of the case. Intel concerns.
said the court had assumed that Neither of those moves likely
any loyalty rebates by a com- would have a direct impact on
pany in a dominant position the Intel case, but could affect
would restrict competition, the commission’s ability to
rather than analyzing whether handle such cases.
the rebates that were offered ©2021 DOW JONES & COMPANY, INC

Russian, Ukrainian officials Mattel wins Disney toy deal, joining Elsa with Barbie
meet in bid to ease tensions Paul Ziobro
feedback@livemint.com
The fallout started soon
after. In early 2015, Mattel fired
action figures. The Disney
characters will slide into the
CEO Bryan Stockton. His suc- doll division and be managed
AFP

C
ton would give a written
feedback@livemint.com response to Russian demands
PARIS and also floated the idea of a
presidential meeting.
inderella, Elsa, and their cessor, Chris Sinclair, focused by the same group that has
friends are moving back on plugging revenue lost from overseen Barbie’s comeback.
in with Barbie. the license with a range of items Barbie has a more open-
Mattel Inc. has won the without staying power, which ended play pattern than the

R
ussian and Ukrainian
delegations met in Paris
for talks on Wednesday
in a bid to defuse soaring ten-
sions, with France seeking to
usher both sides down a “path
to de-escalation”.
The high-level meeting,
attended by senior diplomats
from France and Germany,
brings together the four coun-
tries in a format that has been
used repeatedly since Russia’s
2014 annexation of the
Ukrainian province of Crimea.
Russia is represented by
vice-prime minister Dmitri
Kozak and Ukraine by presi-
dential advisor Andriy Yer-
mak, with diplomatic advisors
to President Emmanuel
Macron and German Chancel-
lor Olaf Scholz also taking part
in the talks that began at 1100
GMT.
Russia warned Wednesday
it would quickly take “retalia-
tory measures” if the US and its
allies reject its security
demands over NATO and
Ukraine, raising pressure on
the West amid concerns that
Moscow is planning to invade
its neighbour.
France, which floated ideas
for a “de-escalation” on Mon-
day and is keen for Europe to
try to solve the crisis, is hoping
that Russia is prepared to
engage in talks at a time when
it has massed 100,000 troops
on Ukraine’s border.
“It’s very encouraging that
Russian President Vladimir
Putin REUTERS
the Russians agreed to enter
into this diplomatic format
again, the only one in which
the Russians are stakehold-
ers,” an aide to Macron said on
Wednesday on condition of
anonymity.
“This meeting will give us a
clear indication of the Rus-
sians’ mindset before the call
between Emmanuel Macron
and Russian President Vlad-
imir Putin on Friday,” the aide
added.
Each side is expected to
brief the media later in the day.
Separate talks between Rus-
sia and the US have been held
in recent weeks to discuss Rus-
sian security demands in
Europe, including that
Ukraine should never become
a member of the US-led NATO
military alliance.
After discussions last Friday
in Geneva, US Secretary of
State Antony Blinken prom-
ised his Russian counterpart
Sergei Lavrov that Washing-
The talks in Paris on
Wednesday come as Western
powers keep up their warnings
of massive economic sanctions
in the event of a Russian attack
on pro-Western Ukraine.
US President Joe Biden
warned Tuesday of personal
sanctions on Putin, while the
White House says the risk of a
Russian invasion of Ukraine
“remains imminent.”
Concerned about the rhe-
toric in Washington and Lon-
don, and their decision to
withdraw some embassy staff
and families in Kyiv, an aide to
Macron warned on Monday
about “creating any ambiguity
or creating any additional vol-
atility.”
“We want a de-escalation,
which means both dialogue
and dissuasion,” the aide said
on Wednesday.
“Discussions about sanc-
tions with our European and
American partners, with insti-
tutions, is taking place to
ensure that this dissuasion is
sufficiently credible, so that
the dialogue is credible. They
are linked,” the aide added.
“But the sanctions must not
lead to retaliation that will
boomerang on us and have a
cost,” the aide said. “Sanctions
are not be-all and end-all of the
response.”
The US has also been draw-
ing up plans to shore up Euro-
pean gas supply.
AP contributed to this story.
licence to produce toys based
on Walt Disney Co.’s princess
lineup and from the recent
blockbuster Frozen franchise,
wresting the properties back
from its rival Hasbro Inc.,
according to Mattel executives.
The deal reunites the char-
acters with their previous
home. Mattel lost the licence to
Hasbro in 2016, a financial and
symbolic setback that precipi-
tated a period of four chief
executive officers at Mattel and
compounding challenges as
they tried to fill the $440 mil-
lion hole from losing the busi-
ness.
Much has changed since
then. Mattel CEO Ynon Kreiz,
who joined in 2018, has stabi-
lized operations with over $1
billion in cost cuts, overhauled
leadership, revived key brands
such as Barbie and rebuilt rela-
tionships with Hollywood stu-
dios. Since the day the Disney
properties walked away, Mattel
executives vowed to win them
back.
“It was an important priority,
and it’s something we worked
hard to win,” Mr. Kreiz said.
Mattel showed it could manage
evergreen brands that aren’t
dependent on big movies, he
said.
Mattel will start selling new
Disney toys in 2023, and the
business will be managed by
the same group that has over-
seen Barbie’s comeback.
Financial terms of the deal
Mattel Inc. has won the licence to produce toys based on Walt
Disney Co.’s princess lineup.
weren’t disclosed.
For Hasbro, the change
comes as the maker of Nerf
guns and Monopoly games is
making the transition to a new
CEO following the death of its
longtime leader, Brian Gold-
ner, last year. Under his watch,
Hasbro surpassed Mattel in
annual sales and made an
unsuccessful approach to take
over its rival.
Hasbro declined to com-
ment on losing the Disney prin-
cess and “Frozen” line but said
it renewed its Star Wars license
recently and will soon start
making Indiana Jones toys too.
Both are properties of Lucas-
film, which is owned by Disney.
Mattel’s loss of the Disney
license originally represented a
high-profile fracturing of a
relationship between one of the
largest toy manufacturers and
one of the most powerful com-
panies in entertainment. It was
a rare dust-up between compa-
nies whose founders worked
together since the 1950s, when
Mattel advertised toys during
the Mickey Mouse Club show.
AFP
In the early 2010s, Barbie
was floundering, with sales
dropping for several years.
Mattel devoted more resources
to shoring up its marquee prop-
erty. Disney’s princess dolls,
meanwhile, were managed by a
separate team in a competing
unit.
Then, in 2013, Mattel came
up with a toy line called Ever
After High, which featured
dolls based on the children of
classic fairy tale characters,
including Cinderella, Sleeping
Beauty and Snow White. That
flew too close to the Disney
princess orbit. The following
year Disney notified Mattel that
it was going to Hasbro. (Mattel
no longer sells the Ever After
High toys.)
“Losing the franchise was
not only a financial challenge
for us but a really emotional
one,” said Mattel President and
Chief Operating Officer Rich-
ard Dickson, who rejoined Mat-
tel for a second stint months
before Disney made its deci-
sion. “It was a wake-up call for
Mattel.”
added complexity and extra
costs to operations. Another
CEO, former Google executive
Margo Georgiadis, lasted about
a year before leaving.
Mr. Kreiz has brought stabil-
ity to the top job at Mattel. The
former television executive cut
one-third of jobs and closed
several factories to stem ongo-
ing losses. He helped patch up
Mattel’s fractured relationships
with retailers and Hollywood
studios. Key brands such as
Barbie and Hot Wheels
responded to new marketing
and items. Fisher-Price has sta-
bilized too.
Though
sales are
still below
their peak
of $6.5 billion in 2013, Mattel is
on pace for more than $5.3 bil-
lion in revenue for 2021,
according to analysts, up more
than 15% from 2020. Projec-
tions for net income of $789
million is the highest since
2013. Analysts expect Hasbro
will bring in more than $6 bil-
lion in 2021 sales, according to
FactSet estimates.
A bit of corporate restructur-
ing allowed Mattel to present a
stronger case to Disney that the
properties would get appropri-
ate attention, Mr. Kreiz said.
Instead of organizing its busi-
ness around boys, girls and
infant products, Mattel is now
structured around categories
such as dolls, vehicles and
Disney characters, whose sto-
ries are imprinted on film and
in books. “Side by side, we
know that we can exponentially
create more value, more play
and more business by comple-
menting the narrative rather
than competing with it,” Mr.
Dickson said.
The transition raises some
questions for Hasbro, which
aimed to use the Disney prin-
cess and Frozen licence to build
up its catalogue of toys geared
toward girls. But the property
faltered a bit under its new
owner, people in the toy indus-
try said.
Jim Sil-
ver, CEO of
TTPM, an
online toy-
review site, estimates that the
Disney property is about half as
big as it was when it left Mattel,
in part because of a lack of new
content to boost consumer
interest in the characters. The
Disney deal didn’t reach the
levels Hasbro was hoping to
achieve, he said.
Mr. Silver said Hasbro has
other toys for girls on the
upswing, including My Little
Pony toys boosted by a recent
Netflix movie, so the shift of the
Disney license might not be as
dramatic as it was when Mattel
lost it. “I think Mattel will do
very well with it, and for Has-
bro, I don’t think the econom-
ics made sense,” he said.
©2021 DOW JONES & COMPANY, INC
LIVEMINT.COM NEWS WRAP THURSDAY, 27 JANUARY 2022
NEW DELHI 09

TWEETS & QUOTES Kalavathi GV Kunal Bahl Rajashree R

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Shriram Transport CELEBRATION TIME India initiates anti-

sees demand rising dumping probe

S I
ignaling a return to normalcy, India’s ndia has initiated an anti-dumping probe
largest truck lender, Shriram Transport against imports of a certain type of tiles, used
Finance Company on Wednesday said its for covering the floors in residential and
collection efficiency returned to 100% in the commercial buildings, from China, Taiwan and
second half of January after undergoing a brief Vietnam following a complaint by domestic
blip in the first fortnight. players.The commerce ministry’s investigation
Shriram Transport Finance Company vice- arm Directorate General of Trade Remedies
chairman and managing director Umesh (DGTR) is probing the alleged dumping of
Revankar said the collection rates would rise in “Vinyl Tiles other than in roll or sheet form”.
February and March as more people get Welspun India Ltd, Welspun Flooring Ltd
vaccinated and the Omicron variant was less and Welspun Global Brands Ltd had filed a
impactful on business than originally feared. petition before the directorate to impose anti-
Collections rates reflects confidence levels in dumping duty on the imports from China,
borrowers, often seen as a proxy of economic Taiwan and Vietnam, according to a notification
activity. “Third wave was only temporary. of the DGTR.The applicants, it said, have alleged
Doctors advise normal treatment and people that the dumping of the product is materially
have come out of fear and business has affecting the domestic industry which started
returned to normal. Some state governments commercial production in September
imposed some restrictions but later it was 2019.They have submitted that the industry and
reversed, by most of them. Everything appears the product are at a nascent stage. PTI
normal now”, he said. PTI

Artistes perform during the Republic Day Parade at Rajpath in New Delhi on Wednesday. PTI

Top Indian metros continue to

One of the country’s largest electric vehicle

As of now, Covishield costs ₹780.

Covishield, Covaxin
be India’s busiest airports in Dec charging hubs was opened in Delhi.

Jio-BP opens new

to be capped at ₹275 EV charging hub

A
joint venture of billionaire Mukesh

T
he price of Covishield and Covaxin, the
covid vaccines which are expected to soon
get regular market approval from India’s
drug regulator, is likely to be capped at ₹275 per
dose plus an additional service charge of ₹150,
official sources said.
According to them, the National
Pharmaceutical Pricing Authority (NPPA) has
Ambani’s Reliance Industries Ltd (RIL)
Indian airports catered to 25.12 mn passengers in Dec, compared to 23.23 mn in Nov and energy super major BP has opened
one of the country’s largest electric vehicle
(EV) charging hubs in Delhi, as the duo scale up
Rhik Kundu from 20.72 million in November, while interna- tional Airport and Kolkata’s Netaji Subhash Chan- the fuel retail network, offering multiple fuel
rhik.k@livemint.com tional passengers rose from 2.51 million to 2.99 dra Bose International Airport registered 2.03 choices including electric vehicle charging
NEW DELHI million in the same period. million and 1.45 million domestic passengers, infrastructure.
New Delhi, Mumbai, Bengaluru, Kolkata, and respectively, during December, against 1.89 mil- Reliance BP Mobility Limited, operating

been directed to start working towards capping
the price to make the vaccines affordable.
As of now, Covaxin is priced at ₹1,200 per
dose while Covishield costs ₹780 in private
facilities. The prices include ₹150 service
charge. Both the vaccines are only authorised
for emergency use in the country.
A subject expert committee on covid-19 of the
Central Drugs Standard Control Organisation
on 19 January recommended granting regular
market approval to covid vaccines Covishield
and Covaxin for use in the adult population
subject to certain conditions. “The NPPA has
been asked to work towards capping the price of
the vaccines. The price is likely to be capped at
₹275 per dose along with an additional service
charge of ₹150,” an official source said.
A
irline passenger traffic in India con- Hyderabad were the top airports in terms of lion and 1.32 million passengers, respectively, in under the brand name Jio-bp, is working with
tinued to grow in December, with the domestic traffic, while New Delhi, Mumbai, November. multiple demand aggregators, original
airports at the top metropolitan cities Kochi, Chennai, In terms of inter- equipment manufacturers (OEMs) and
remaining the busiest, according to and Hyderabad national passenger technology partners with a vision of being the
the latest data from the Airports were the busiest for New Delhi, Mumbai, Bengaluru, traffic, New Delhi leading EV charging infrastructure player in
Authority of India (AAI). international traffic Kolkata, and Hyderabad recorded 842,582 India, RIL had said in its third quarter earnings
Indian airports catered to 25.12 million passen- during December. passengers in announcement last week.
gers in the month, compared to 23.23 million pas- In December, were the top airports in terms of December, up from “Jio-bp has constructed and launched one of
sengers in November. There were 19.64 million New Delhi’s Indira domestic traffic in December 724,784 passengers the country’s largest EV charging hubs in
passengers in October, compared with 15.44 mil- Gandhi Interna- in November, while Dwarka, Delhi with BluSmart as its primary
lion in September and 14.26 million in August. tional Airport Mumbai reported customer,” it had said. PTI
However, the growth in air passenger traffic hosted more than 4.17 million domestic passen- 451,212 passengers during the month, up from
has seen a slowdown since December-end gers, up from 3.98 million in November. 370,850 passengers during the previous month.
because of the third wave of the covid-19 pan- Mumbai’s Chhatrapati Shivaji International Kochi and Chennai airports registered 301,338
demic, with the rapid spread of the Omicron vari-
ant of coronavirus. The country recorded 22.13
Airport recorded about 2.54 million passengers and 246,387 international passengers, respec-
in December, compared with 2.43 million in tively, during December, up from 243,379 and
Accountant held for
PTI million domestic passengers in December, up November. Bengaluru’s Kempegowda Interna- 182,123 passengers during November.
issuing bogus bills

T
he GST officials have arrested an
Vedanta demerger call to be taken by March-end: Anil Agarwal Railways’ panel to accountant for allegedly issuing bogus
invoices of more than ₹1,000 crore and
check CBT results committing tax credit fraud of ₹181 crore, said an

M
etals and mining group Vedanta Ltd will announce the contours of a official statement.
proposal to spin off key businesses into separate listed companies by Officers in Mumbai received specific inputs

March-end, its chairman Anil Agarwal said, as he looks to simplify and
streamline the corporate structure to create value.
While the zinc business is already housed in a listed subsidiary, the plan is to
demerge the aluminium, iron and steel, and oil and gas businesses into stand
alone listed entities.This will unlock value for all stakeholders as well as create
businesses that are positioned better to capitalise on their distinct market
positions and deliver long-term growth and enable strategic partnerships, he
said.It will also help tailor capital structure and capital allocation policies based
on business-specific dynamics as also create distinct investment profiles to
attract deeper and broader investor bases.
“It (demerger) is a natural thing to do. Market is very good and production (at
different divisions of Vedanta) is going well. And so we think having separate
companies will create valuation,” he said. “I think, maybe in a month and a half,
sometime before March-end we will announce the full (contours).”
R
ailway has constituted a high power
committee to look into the concerns and
doubts raised by candidates in regard to
the results of 1st Stage Computer Based Test
(CBT ) conducted for non-technical popular
categories (NTPC). The centralized
employment notification of NTPC was issued by
Railway Recruitment Boards (RRBs) on 14
January-15 January 2022. The issues include
Results of 1st Stage CBT of CEN 01/2019 (NTPC)
and methodology used for shortlisting
candidates for 2nd Stage CBT without affecting
Vedanta chairman Anil Agarwal. The demerger will unlock value for all existing candidates; introduction of 2nd Stage
PTI stakeholders as well as create businesses. MINT CBT in CEN RRC 01/2019. RITURAJ BARUAH
from data mining that an entity was suspected to
be engaged in availing of and passing on fake
input tax credit by issuing fake invoices without
actual receipt or supply of goods or services.
They conducted investigations and noticed
that a 27-years-old person, who has studied till
12 standard and now works as a freelance
accountant cum GST consultant, allegedly stole
the identity of one of his clients for committing
the GST fraud. His confession and evidence
collected during the investigation led to his
arrest by the CGST officers on Tuesday for
violations punishable under CGST Act, the
statement said. STAFF WRITER

Vanguard, Nippon, Axis in talks to buy IDFC’s mutual fund biz in up to ₹10,000 crore deal
FROM PAGE 1
IDFC Mutual Fund, the person
added.
However, the actual valua-
tion of IDFC AMC may turn out
to be different from IDFC’s
expectations and fetch a value
of ₹7,000-10,000 crore, the
second person said.
A spokesperson for Nippon
India Mutual fund said the
company does not respond to
market speculation.
Emails sent to Axis Mutual
Fund and a Vanguard group
spokesperson in the US
remained unanswered.
IDFC Ltd and IDFC Asset
Management Co. declined to
comment on the deal.
In the mutual fund space,
valuation is decided based on
the proportion of equity funds
to debt schemes.
It also depends on the AMC’s
profitability, network, distribu-
tion strength and parent’s
financial ability.
Typically, an AMC with a
higher proportion of equity
schemes attracts better valua-
tions since it earns higher asset
management fees and commis-
sions.
“While shortlisting the
acquirer for IDFC AMC, the
banker and the board of IDFC
have to keep in mind that the
value of none of the existing
mutual fund schemes of IDFC
AMC gets destructed due to
duplication of scheme cate-
gories. If the acquirer has
schemes similar to the MF
schemes of IDFC, only one
IDFC Mutual Fund’s average
assets under management
for the December quarter
stood at ₹1.25 trillion (around
₹90,891 crore in debt-ori-
ented schemes and ₹30,257
crore in equity schemes,
while the rest are in
exchange traded funds),
according to the Association
of Mutual Funds in India
(Amfi).
Axis Mutual Fund’s average
assets under management
was ₹2.53 trillion (around
₹95,381 crore in debt
The proposed sale is in line with IDFC’s plan to merge with IDFC schemes, ₹1.5 trillion in equity
First Bank Ltd and focus on banking operations after shedding its schemes), while Nippon India
non-core assets, including IDFC AMC. BLOOMBERG Mutual Fund’s average assets
under management stood at
scheme can be alive after the may hurt the interest of unit- ₹2.8 trillion (₹1.09 trillion in
merger. Duplication of holders,” said the first person. debt schemes and ₹1.15 tril-
schemes is not allowed as it Excluding fund of funds, lion in equity schemes, while
the rest are in exchange equity assets under manage- There have been a few deals
traded funds) for the Decem- ment. Around ₹1 trillion of in the mutual fund industry in
ber quarter, according to assets under management are the recent past.
Amfi. in debt schemes of IDFC AMC, In 2019, Nippon Life
IDFC has hired Citigroup and 3-5% of these assets under acquired 22.49% in Reliance
Global Markets as the invest- management should be the Nippon Life Asset Manage-
ment banker to ideal valuation of ment (now named Nippon
shortlist an An AMC with a these debt India Mutual Fund), valuing
acquirer for IDFC higher proportion schemes, which the asset management com-
Mutual Fund, said of equity schemes a m o u n t s t o pany at 6.86% of its assets
the first person. attracts better ₹3,000-5,000 under management.
A Citigroup crore. IDFC Nippon India Mutual Fund,
valuations as it
Global spokesper- Mutual Fund has whose market cap is ₹20,703
son declined to earns higher asset been recording a crore on Tuesday, is valued at
comment on the management fees steady profit 7.4% of its December quarter
deal. growth. For the assets under management.
“Considering half year, the net The market cap of HDFC
the way IDFC’s equity profit was at around ₹90 crore. AMC is at ₹47,567crore as of
schemes have grown and the So, the valuation has to com- Tuesday, which translates to a
bullishness in equity markets, mand a premium compared to valuation of 10.57% of its aver-
₹3,500-4,000 crore should past deals,” said the second age assets under management
come from the sale of equity person, who is close to the worth ₹4.5 trillion for the
schemes, around 10% of the board of IDFC. December quarter.
10 THURSDAY, 27 JANUARY 2022
NEW DELHI LONG STORY LIVEMINT.COM

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

CAN UTTAR PRADESH

REMAIN BJP’S BASTION?
A cocktail of nationalism, Hindutva, publicity and welfare politics may swing it for Yogi Adityanath

Parth M.N.
feedback@livemint.com
MUMBAI

W
hen Swati Pathak’s hae-
moglobin dropped a bit
during her seventh
month of pregnancy,
covid-19 was the last
thing on her family’s mind. “But the hospi-
tal had to get her tested before admitting
her,” says Rohit, 34, her brother-in-law.
“She tested positive.”
It was the first week of April 2021 when
the second wave of covid-19 had begun to
take an ominous turn. They found an oxy-
gen bed at the Banaras Hindu University
Hospital (BHU) in Varanasi, eastern Uttar
Pradesh. But it all went downhill soon
after.
Swati’s health deteriorated as rapidly as
the caseload at the hospital increased.
“She had an oxygen mask on and so she
couldn’t speak,” says Rohit. “She would
write in her diary, imploring the doctors to
tend to her. We could sense panic in her
writing. On the fifth day, she started writ-
ing ‘sita-ram’, ‘sita-ram’.”
The chanting didn’t work. About a week
after being admitted to the hospital, Swati
died on 10 April 2021. She was 28.
When the hospital returned Swati’s
belongings to the family, her diary was
missing. “We told them we won’t take the
body until we get the diary back,” says
Rohit. “They were probably afraid that the
diary would expose the chaos inside the
hospital.” The unpleasant altercation
went on for a while. Eventually the hospi-
tal relented, and gave back her diary. “But
the pages where she had been writing in
the hospital were conspicuously torn,”
Rohit says.
Rohit, a Brahmin, is a farmer based in
the village of Narayanpur–about 30 kilo-
metres from Varanasi. His harrowing
experience isn’t even a year old even as the
state of Uttar Pradesh goes to polls in
seven phases with results on 10 March. He
personally witnessed and deeply suffered
the consequences of inadequate health
infrastructure and lack of forward plan-
ning by the state government.
Yet, he believes the state government
led by chief minister Yogi Adityanath
deserves a second term. “It is not like
nothing has happened in the past five
years,” says Rohit. “In our village, the elec-
tricity supply is far more regular. Earlier,
we would get electricity either during the
day or at night. The roads have gotten bet-
ter. We used to live in Varanasi city until
about three years ago. But we shifted back Prime Minister Narendra Modi with Uttar Pradesh chief minister Yogi Adityanath. The BJP may look formidable on the ground, but incumbent governments haven’t got a second chance in Uttar Pradesh for many years..
to the village after the regularization of
electricity and improvement in infrastruc-
ture.”
When the second wave devastated the to covid-19. He was a teacher. The state says. “But with limited resources in the mint increased since 2014, while reversing the the BJP had done exceedingly well in the
countryside, it didn’t spare a single state in government had decided to go ahead with state, you can only do as much.” SHORT progress made in education, healthcare 2017 assembly elections.
India. However, the images from Uttar the panchayat polls in the middle of the Aadesh, who is also a Thakur, says Uttar STORY and nutrition. Calling it “New Welfarism”, Vaibhav Verma, 27, a farmer in Buland-
Pradesh—of mass graves and bodies float- raging second wave and teachers were Pradesh wasn’t the only state that suf- former chief economic advisor to the gov- shahr, and a member of the Bharatiya
ing in the water—were particularly scary, being asked to attend schools. “They had fered. “Even developed countries had ernment Arvind Subramaniam wrote that Kisan Union–among the organizations at
suggesting the state had downplayed also carried out training of teachers who people dying in large numbers,” he adds. WHAT the centre’s focus is on delivering tangible the forefront of the protest–says the BJP
covid death toll far more than any other would conduct the polls,” he says. “Compared to that, Uttar Pradesh handled goods over intangible ones. will pay a heavy price for how it treated
state. Many thought this would be the His brother, who used to teach at one of it quite well.” People of UP witnessed and It has certainly secured Channar Ram’s farmers for a year. “If they feel they can
downfall of the incumbent government. the primary schools in western Uttar Pra- Aadesh is a finance professional who suffered the consequences of vote. get our votes by repealing the farm laws,
However, among the reasons why the desh, was among them. He was infected works in Noida–50 kms away. He says the the state’s inadequate health A 70-year-old Dalit man from Jalalabad, they are wrong,” he says. “We have all
Bharatiya Janata Party (BJP) would be dif- during one of those days, and soon died highway’s condition has improved con- infrastructure during the second Ram lost everything after the lockdown. supported the BJP in the past. But we
ficult to dislodge in Uttar Pradesh is that gasping for breath. “I was very close to my siderably in the past five years. “I reach the covid wave. And yet, many root He would go from door to door, colony to can’t get behind this dictatorship. This
many of the Hindu voters continue to brother,” he says. “He is survived by his office in under an hour,” he says. “The law for the incumbent government. colony, cleaning up people’s goods or government hasn’t created any jobs
repose faith in the incumbent, despite wife and two little kids. I don’t earn much. and order in the state has also improved. working as a labourer. “With the lock- either.”
having faced or witnessed multiple trage- I wonder how we will get back on our feet. The police operates more independently, down, that stopped entirely,” he says. “For In March 2017, when Adityanath took
dies. But I don’t think it would have much of an and is receptive to people’s complaints. WHY two years, I have had almost zero income. over as the chief minister, the state’s
The two main challengers to the BJP impact on our voting.” That was not the case under the previous My kids work as labourers too. But they unemployment rate, according to CMIE,
are the Bahujan Samaj Party (BSP) led by He is a Thakur. The community has tra- government.” Hindu voters continue to repose can’t look after their own families prop- stood at 2.4%. In December 2021, it dou-
Mayawati and the Samajwadi Party (SP) ditionally voted for the BJP, which has had Those are among the most common faith in the BJP government. erly. How will they look after me?” bled to 4.9%. The data is visible on the
led by Akhilesh Yadav. Mayawati, who Rajnath Singh as a prominent Thakur lines heard on the ground but activists Stable power supply, better Strangely, Ram doesn’t blame the state ground.
became the chief minister in 2007, has leader in the past. Currently, their Thakur differ. Ever since Adityanath has taken roads in the hinterland, a police for the lack of employment for him and his Every morning, battling the biting win-
since seen her voteshare erode consist- face is the chief minister himself. “If I vote over the state of Uttar Pradesh, they machinery that is responsive to kids. But he is grateful to the state for ters, labourers from in and around
ently. Observers, therefore, believe it is for someone else because this govern- claim, the law-and-order machinery has complaints are other factors. “helping him survive” during this period. Bulandshahr gather at the Numaish
largely a bipolar contest between the BJP ment didn’t provide jobs or oxygen, that become an extension of the radical right- “We got free ration from the government ground, in the hope of landing a day’s
and SP. In 2017, the BJP swept the state by vote won’t be valid,” he says. wing outfits. Muslim vendors and cattle during these tough times,” he says. “This work. On most occasions, they go home
winning a massive majority of 312 constit- I ask him to elaborate. “Would an MLA traders have been attacked. Fake encoun- BUT government also doubled the senior citi- disappointed. “I spend ₹25 every day to
uencies out of 403. It rose to prominence from another party believe I voted for him ters have been on the rise and human zen’s pension from ₹500 to ₹1,000 per come here,” says Deepak Kumar, 25, a
in the state by mobilizing the non-Yadav if I said so?” he asks. “My community rights violations were reported during The ruling government has to month.” labourer from a nearby village of Baral. “I
OBC votes and non- mostly votes for the BJP. the anti-Citizenship Amendment Act deal with disgruntled farmers and feel if I just sit at home, I
Jatav Dalit votes–on top Everybody knows that. (CAA) and National Register of Citizens unemployed youth. A large ‘GIVE US WORK’ would at least save ₹25.
In 2017, the BJP swept UP by chunk of those who protested Observers believe the
of the Hindu upper
caste that formed their
core votebank. For Akh-
winning 312 of the 403
So, we make excuses to (NRC) protests.
vote for the person that
represents our commu- ‘NEW WELFARISM’
against farm laws before it was
repealed were from western UP.
H
owever, as formi-
dable as the BJP
might look on the
elections will largely be a
Because there is no
work.”
The moment some-
ilesh to make a come- constituencies. It successfully nity.” ground, it is important to bipolar contest between the one walks in to Numaish
back, he would have to
make a dent in this con-
mobilized the non-Yadav “The state govern- S avitri Verma, 60, who belongs to the
Sonar community among the Other note that the incumbent BJP and the Samajwadi Party; ground wanting to hire
ment could have done Backward Class (OBC), sits on a charpoy spreaders,” he says. “The media and sev- has not gotten a second labourers, a bunch of
stituency, which would OBC votes and non-Jatav better during covid,” he outside her hut in Ghazipur’s Jalalabad eral right-wing outfits here demonized us chance in Uttar Pradesh the vote share of Bahujan them gather around,
form his incremental adds. “But at least Adity- village. She declares she is a fan of Aditya- after the Tablighi Jamaat incident. We for many years. In 2022, hoping their faces would
vote on top of Muslims Dalit votes. anath doesn’t have a cor- nath because of his Hindutva politics. have been relegated as second-class citi- that change could be Samaj Party is eroding. be noticed. “This has
and Yadavs. ruption case against “The BJP built Ram Mandir,” she says. “It zens.” (In March 2020, Tablighi Jamaat, ushered in from two meant that the employ-
himself. Even if Akhilesh Yadav had been didn’t happen under any other govern- an Islamic missionary movement, held a quarters: disgruntled farmers and unem- ers end up exploiting us,” says Deepak.
‘LAW & ORDER IMPROVED’ the chief minister, the state would have ment. We waited for it for so many years. congregation in Delhi despite of a ban on ployed youth. It took over a year’s protest “They know we have no work. So, they

I n the opposite corner of Uttar Pradesh, suffered equally during the pandemic.”
about 800 kms from Varanasi, a man
No other party looks after Hindus like the public gatherings. More than 4,000 covid and alleged 700 deaths for the central end up paying ₹300 for a job that would
In the village of Partapur in Hapur dis- BJP does. If Adityanath loses, it is difficult cases were subsequently linked to the government to repeal the three farm laws normally get us ₹800.”
requesting anonymity explains why the trict’s Dhaulana block, Aadesh Singh, in to find a chief minister like that.” gathering. ) introduced in September 2020. Deepak, who studied two years of
mismanagement during covid, rising his 40s, says the state lacks resources, The rise of Adityanath has marginalized The BJP’s rise in the state has been The farm bills sought to reset the way computer science before dropping out
inflation, or unemployment won’t make which caused the chaos during covid. He Muslims in the state like never before. through a cocktail of nationalism, Hin- farm produce is traded within India— due to financial reasons, says the state
much of a difference. “We end up having lost three elderly members of his joint Mohammad Imran, an Ola driver from dutva, publicity and welfare politics. farmers would have had the freedom to government has done nothing to help
more hope from leaders who come from family during the second wave. He Ghaziabad, says that passengers have can- According to the recent findings of the sell their produce to any buyer outside the the unemployed. “They are taking us for
our caste,” he says. “Even if that leader is couldn’t find an oxygen bed in his district, celled the ride after seeing his name. “The National Family Health Survey, people’s state-regulated wholesale markets. a ride,” he says. “Instead of giving free
making our life miserable.” or the neighbouring ones. “We made calls, first few months after the outbreak of cov- access to clean cooking fuel, sanitation A huge chunk of the protesting farmers ration, give us work so that we can buy
The man lost his brother in April 2021 ran from pillar to post. It didn’t matter,” he id-19, Muslims were treated like super- and drinking water has significantly were from western Uttar Pradesh, where our own ration.”
LIVEMINT.COM MINT MONEY THURSDAY, 27 JANUARY 2022
NEW DELHI 11

Are differently-abled treated MINT 20 MUTUAL FUND

SCHEMES TO INVEST IN
differently for insurance? 20
We have hand-picked 20 mutual funds for your portfolio that have jumped
through hoops of good returns, low risk, good portfolio hygiene and our own
qualitative research. We have restricted the choice universe to 10 categories out
of the total 37 and given you at least two options to pick from each.

3-years return 5-years return Corpus

EQUIT Y (%) (%) (₹ cr)

There are no health insurance products specifically tailored for differently-abled people LARGE-CAP
UTI Nifty Index 17.43 16.14 5,841
ISTOCK HDFC Index 17.13 15.94 4,434
Aprajita Sharma also,” he adds. Category average 16.87 15.54
mintmoney@livemint.com Getting health cover is difficult in
Key things to know cases where individuals suffer 100% EQUITY FLEXICAP

G
etting an insurance cover MORTALITY risk due
physical disability. “There are also Canara Robeco Flexi Cap 21.14 18.46 6,598
for the differently-abled to a disability defines some chronic medical conditions that Parag Parikh Flexi Cap 27.66 21.44 19,933
is an arduous task, espe- if a life cover is to be are often incurable or require long- Category average 19.17 15.62
cially if the policy pro- issued or not term care and the chances of multiple
posal has been rejected The premium could be medical complications arising out of EQUITY SMALL AND MIDCAP
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Yet, Amit Sharma, head of insurance at viduals in such circumstances may find SBI Small Cap 28.12 22.37 11,250
GETTING health cover
Finway FSC, managed to get a policy is difficult in cases it difficult to get a medical cover,” says Category average Midcap 22.72 16.42
for one such client . where physical Kamdar of Digit Insurance.
Category average Smallcap 26.50 18.69
“He (the client, who did not want to disabilities are nearly Essentially, the underwriters try to
be identified) was well-qualified and 100% analyse different system abnormalities EQUITY (TAXSAVER)
working with a multinational firm as a SOME insurers cover which may happen in combination
Canara Robeco Equity Tax Saver 23.06 19.16 3,098
senior manager. His lower body was mental disorders such with what the disability is. “The under-
Mirae Asset Tax Saver 23.05 20.35 10,660
paralysed after an accident, but he as anxiety, bipolar, writing team studies the correlation
would still drive to work. He had an dementia, OCD and with other organ systems and accord- Category average 18.46 15.12
automatic wheelchair and car. I rea- autism ingly a proposal is accepted or denied,”
soned with the underwriters that this UNLESS excluded, says Dr S. Prakash, managing director, HY BR ID
disability is not a threat to his life. They disabilities in group Star Health and Allied Insurance. BALANCED ADVANTAGE
reconsidered the proposal and issued insurance are covered If somebody is planning a treatment Edelweiss Balanced Advantage 16.21 13.61 7,048
the policy, albeit with higher mortality from day one for a specific disability in the near ICICI Prudential Balanced Advantage 12.81 11.17 37,879
charges,” says Sharma. Source: Industry future, then they will not get the insur- Category average 11.84 10.51
His client thus got an unit-linked ance cover. Prakash says “planned
insurance policy (ULIP) and later also treatment cannot be covered obvi- ARBITRAGE
managed to get term insurance from a ously, but in cases where there is no Kotak Equity Arbitrage 4.79 5.34 24,642
different insurer. But his troubles are the underwriters,” says Sharma. may cause a higher mortality risk, the requirement for a specific treatment, Tata Arbitrage 4.98 NA 11,119
still not over. Now, he is trying to get a premium can be levelled up. “In most for example a person having polio with Category average 4.59 5.12
health cover but insurers are rejecting AWARENESS IS KEY cases, it is about providing life cover, some limb weakness, then they can get
the proposal due to his spinal problem. Financial underwriting holds supreme not how much incremental premium the coverage.” 1-year return* 3-years return Corpus
in the case of life insurance. In the case we should charge,” points out Chakra- In the case of congenital diseases, DEBT (%) (%) (₹ cr)
THE MISSING GAP of differently-abled, there is the mor- borty. while externally visible conditions are SHORT TERM
Anecdotal evidence suggests that tality risk as well. “First, the differently- generally excluded, all internal condi- HDFC Corporate Bond 4.07 8.41 28,109
24,430
insurance penetration among differ- abled person has to be gainfully ON HEALTH INSURANCE tions are usually covered. “Birth defects IDFC Corporate Bond 4.22 7.67 19,999
11,980
ently-abled people, who comprise employed and have a doc- There are no health insur- which are visible externally like spina
Category average 4.17 8.06
more than 2% of the country’s popula- umented source of If the disability is ance products that are bifida, additional digits, hydrocepha-
tion, is meagre. While insurance com- income. Second is the not worsening, specifically tailored for lus, limb deficiency, etc are often
CREDIT RISK
panies do issue them policies, the proc- extent of disability. If a insurers may differently-abled people. excluded. Some Internal congenital
HDFC Credit Risk Debt 6.79 8.76 8,979
24,430
ess takes a lot of time and rejections are person is unable to move issue standard In most cases, regular pol- anomalies like atrial septal defect (hole
ICICI Prudential Credit Risk 6.39 8.42 8,416
11,980
higher. or requires help for daily in the heart), transposition of blood
“Insurance for differently-abled tasks, we would obviously
policies without icies are issued after nec- vessels, atresia of the intestine, etc Category average 8.58 5.16
essary medical underwrit-
depends on the underwriting norms of review those cases in a dif- rating up the ing. might be covered in the fresh retail pol-
different insurers. No insurance com- ferent manner. If some- premium “It is evaluated if the icy after a specified waiting period,” DEBT (LESS THAN 1 YEAR)
6-month 1-year Corpus
return* (%) return* (%) (₹ cr)
pany has a specific product designed one’s disability is not wor- disability of the individual says Kamdar.
HDFC Money Market 1.84 3.89 14,598
for this segment. There is lack of data sening, not involving should be considered as a To be sure, disabilities are covered in
and the underwriting is done mostly on mental faculties or is stationary in pre-existing disease (PED) or not. In the group insurance policies from day one, Kotak Money Market 1.85 3.83 10,993
qualitative inputs that we have,” says nature such as an injury to the leg, we case of PED, the waiting period or unless permanently excluded. Employ- Category average money market 1.76 3.75
Nikhil Kamdar, appointed actuary, would insure them,” says Atri Chakra- exclusions may apply,” says Amit Chha- ees who get group insurance should
Returns since Date of Corpus
Digit Insurance. borty, chief operating officer, India- bra, business head - health, PolicyBa- enquire with their employers about the OU T OF T HE BOX launch launch (₹ cr)
Another challenge is the right advice First Life Insurance. zaar.com. cover for their specific disability, if any.
BHARAT Bond ETF - April 2031 4.01 23 July 2020 10,565
and support that they need to commu- If the disability is not going to worsen “Policies for differently-abled are not Industry players accept there is a
nicate better with insurers. “Agents or hurt the individual’s earning poten- very restrictive. In some cases, for need to collect quantitative data on dis- Motilal Oswal S&P 500 Index Fund 24.74 28 April 2020 2,737
themselves are not that knowledgeable tial, insurers may issue standard poli- example, if one has hearing disability, abilities to ensure better penetration *Absolute Returns
or do not want to put time and effort to cies without rating up the premium. In or is speech impaired or is an amputee, and wider coverage for differently- Returns as on 24 January 2022; Corpus data as of December 2021; Growth option in regular plans has been used
Data and analysis by CRISIL Research Compiled by Neil Borate
strongly present the proposer’s case to cases where certain health parameters they can get comprehensive policies abled people.
ISTOCK

Which SIPs should I Understand covid specifications before buying travel policy
go for to increase my
monthly investment? W
Shrikanth Meenakshi
I am 27 years old and cur-
rently investing ₹10,000
every month in mutual
funds via systematic
investment plan, or SIP, as
given below:
- Axis Small Cap Fund
(₹3,000)
- Mirae Assets Emerging
Bluechip (₹3,000)
- UTI NIFTY Index Fund
(₹2,000)
- UTI NIFTY NEXT 50
Index Fund (₹1,000)
- Motilal Oswal S&P 500
Index Fund (₹1,000)
I have already invested
₹1.5 lakh so far and my risk
profile is aggressive.
I am looking to increase
monthly SIP outgo to
₹15,000. Can you please
suggest which of these
fund should get more
weight?
Do I need to stop SIP in
any of the above funds and
start investing in a new
fund, especially flexi-cap
fund.
Yash
ISTOCK
ASK MINT
m MUTUAL FUNDS
funds to stay with for the long
haul.
For the additional ₹5,000
that you want to bring in, you
can do so by more or less
keeping your current alloca-
tion profile. You can add
₹500 to the Nifty Index fund,
₹1,500 to the Nifty next 50
fund and ₹1,000 to the inter-
national fund.
The remaining ₹2,000 can
be split between the two mid
and small cap funds. After
Navneet Dubey
navneet.d@livemint.com
hat happens if you
have to travel and
then be in quaran-
tine for a few days? This ques-
tion usually troubles travellers
who travel abroad amid the
spread of covid.
An unexpected rise in covid
cases has shaken the travel and
tourism industry. Travellers
who had pre-booked their trips
or were already on their way
faced losses because travel
insurance didn’t cover any
changes due to the pandemic.
As a result, people spent more
money cancelling or postpon-
ing their trips.
Even with vaccinations and
safety precautions in place,
WILL ACQUI-HIRE DEALS GET ANY RELIEF IN THIS BUDGET?
POWER
POINT
SA N D E E P J H U N J H U N WA L A
Respond to this column at
feedback@livemint.com
travellers are highly cautious
about ensuring that their travel
insurance protects them from
the pandemic’s uncertainties.
However, policy buyers should
read the policy document care-
fully and look out for those that
GETTY IMAGES
omicron wave, your trip can get
cancelled or delayed if the cases
rise. Therefore, when purchas-
ing travel insurance, select the
Cancel for Any Reason (CFAR)
add-on. It will allow the insured
to use the option to cancel
travel plans other than those
specified in the policy. The
add-on generally provides
70-75% reimbursement of your
non-refundable trip costs. Amit
Chhabra, head- health and
travel insurance, Policyba-
zaar.com, said, “CFAR provides
flexibility and freedom when
exclude hospitalizations due to taking decisions on travel res-
covid. Here are some specifica- ervations. In addition, the rider
tions you should take note of covers the scope of coronavirus
when buying a travel insurance accommodation and flight can-
policy. cellation benefits.”
Trip cancellation: If you Baggage delay: Baggage
plan a trip during the covid- delays, or even worse, losses
M&A spectrum is, among other things, wrinkled with complex
compensation matrices and related income tax uncertainties.
Compensation structures of acqui-hired founders are
designed differently to include components that discharge the
consideration for the intangible benefits that they confer to the
buyer. Enhanced cash incentives or bonuses is one such com-
monly adopted mechanism. These are likely to enter the salary
net of acqui-hired founders, for income tax purposes, as they are
paid under an employment arrangement with the buyer and
hence, get taxed at applicable slab rates, which in most cases, is
an exorbitant 42.74%! In arrangements involving IP transfers, the
en-route are always a possibil- tickets through your travel cov-
ity. However, this situation will erage.” However, you must
only exacerbate the stress of read the fine print before sign-
testing positive for covid-19. So, ing up for it.
if you have insured your Medical expenses: If the
checked-in luggage against loss insured has a medical emer-
and delay, your gency due to
travel insurance While purchasing covid, the travel
will compensate a travel insurance, insurance will
you financially if it select the CFAR reimburse them
is lost. add-on, which for the costs paid
Quarantine during the trip.
allows you to
expenses: Some Chhabra said, “If
countries still cancel your the covid-19
enforce quaran- travel plans impacts the
tine rules; hence insured and he
covering this cost gets hospitalised
is also critical. Chhabra said, “If while on international
you test positive for the omi- travel, the insurer will also pay
cron virus after arriving at your outpatient expenditure.
destination or while returning However, the insured will get
from it, you will be able to book the coverage as per the policy
accommodation and airline limit.”
The magnitude of tax challenges is amplified with valuations
of tech start-ups multiplying at prodigious rates. Parties to an
acqui-hire arrangement may find themselves engulfed in a situa-
tion where tax on perquisite value may probably exceed salary of
the employee and discharging taxes on ESOP exercise becomes
a glaring impossibility both for the employer and the employee.
The Finance Act 2020 had provided relief to employees of eli-
gible start-ups to defer income tax payment on exercise of ESOPs
to the earlier of five years from end of the year in which they are
exercised, or until an employee leaves
Clarifications in the start-up, or when the shares are

You have a well-diversified,
aggressive portfolio that
would suit your aggressive
risk profile, if and only if you
are investing for the long term
(greater than 7-10 years).
Over such a lengthy period,
market volatility will even out
and you will be able to realize
the gains from the various
equity asset classes that you
are investing in.
You are presently investing
30% in large-cap funds, 60%
in mid and small-cap funds,
and 10% in a well-diversified
international fund. The funds
you have chosen are good
these allocations, you will
have a third of your portfolio
in large caps, 53% in mid and
small cap, and the remaining
14% in international funds.
This will moderate the risk of
your portfolio slightly, while
still keeping with your
aggressive outlook.
Shrikanth Meenakshi is
founder of Primeinvestor.in.
Do you have a personal
finance query? Send in your
queries at
mintmoney@livemint.com
and get them answered by
industry experts.
T
he technology start-up ecosystem in India has witnessed
a meteoric growth in the recent past. This growth, together
with an exponential increase in start-up funding, has given
room for start-ups to go on a hiring spree. The rise of start-ups has
also lured well-established corporates to get a share of the pie,
who are keen to add the brains behind these successful ventures
to their own talent pool. High demand for techies has triggered
a talent war in the Indian IT industry. A novel strategy which is
being adopted by corporates to win this talent war and ergo,
strengthen teams, ideas and technology is to acqui-hire a
start-up.
In an acqui-hire deal, the main stimulant is to hire the talent
pool, including founders, of the company thus acquired as
against a typical acquisition involving share or business purchase.
In some cases, such arrangements are bewitched by appendages
such as transfer of IP or technology developed by founders,
which the buyer perceives as a valuable asset for integrating into
its own business. This relatively new-fangled contraption in the
consideration could be sliced into two with one part being attrib-
uted to the IP transfer and the other for talent acquisition, still
leaving questions around its income tax intricacies.
ESOPs, or employee stock ownership plans, continue to be
relied upon by emerging business players especially when cash
flows are a damp squib. Conventionally, ESOPs partake the
nature of perquisites as they emanate from an employment
arrangement and are taxed at the event of their exercise by the
employee. Income tax rules in India prescribe the differential
between fair market value of shares allotted on exercise and or
strike price to be taxable perquisite value for ESOPs. Hence,
although there is no real income or cash inflow to the employee
on exercise, the income tax liability is definite and immediate.
This creates significant cash crunch both for the employer, who
is obligated to deduct taxes on perquisite value and deposit such
taxes withheld with the Exchequer, and for employees, who suf-
fer taxation despite the fact that the benefit accruing to them is
only notional.
the budget can sold. The flurry of expectations with
go a long way in Budget 2022 round the corner,
includes an ask for a similar relief by
resolving I_T enabling deferment of ESOP taxation
uncertainties on for all employees. Buyers, in an IP
acqui-hire deals transfer cum acqui-hire arrangement,
may be inclined to treat the gains from
the deal as capital gains rather than as
salaries as the consideration could be said to derive its value pre-
dominantly from the IP. This stalemate further warrants amend-
ments in tax laws that acknowledge and clarify tax treatments of
these innovative and evolving deal contours.
Clarifications in the upcoming budget could go a long way in
resolving income tax uncertainties surrounding acqui-hire deals,
which is the need of hour to keep the Indian start-up engine run-
ning smoothly.
Sandeep Jhunjhunwala is a partner, Nangia Andersen LLP.
(With inputs from Amita Jivrajani and Ankur Agarwal)
12 THURSDAY, 27 JANUARY 2022
NEW DELHI
OUR VIEW
The IMF’s assessment
of Omicron disruption
Its downgrade of global economic growth suggests this variant may pose a bigger threat than
we had hoped. India’s economy seems better placed, but that must not generate complacency
I
t was hoped that the Omicron variant of
covid may prove no more than a pin-prick
for economic activity. The latest gross
domestic product (GDP) growth forecasts
by the International Monetary Fund (IMF),
however, suggest its impact may not be all
that feeble after all. In the January release of its
World Economic Outlook (WEO) published on
Tuesday, the IMF downgraded its growth fore-
cast for the global economy to 4.4% in 2022
from 4.9% projected by its previous update last
October. That’s a big downgrade in a matter of
a few months. For India too, its GDP estimate
has been cut by 50 basis points to 9% from
9.5% three months ago, though this is for the
fiscal year 2021-22. The IMF’s latest projection
is less than both the government’s advance
estimate of 9.2% put out earlier this month and
our central bank’s forecast of 9.5%, an earlier
calculation that it stuck with in its December
policy review. Since Omicron cases flared up
only in the past couple of fortnights, it seems
likely that our data crunchers would not have
adequately assessed this variant’s full impact
and might need to notch their numbers down.
For 2022-23, however, the IMF’s WEO has
raised our expected growth from 8.5% to 9%.
As the Fund sees it, while both the US and
China are likely to lose pace over calendar
2022, India may be able to keep going. This
could make India the world’s fastest-growing
major economy by a wide margin. As China
watches its real estate sector slump and its
zero-covid policy compress commerce in a
dicey battle against Omicron, its growth fore-
cast for 2022 was reduced to 4.8% from 5.6%.
America could face not just supply-chain
disruptions and rising capital costs as high
inflation demands monetary policy action, but
Storm in a Tesla cup and cues we can take from China
DIVA JAIN
R
ecent comments by Elon Musk on the
challenges that Tesla Inc faces in India
sparked a wave of excitement in the
country, with politicians of various hues fall-
ing over one another to roll out a red carpet
to welcome the world’s most valuable auto-
maker to their respective states with over-
whelming and open-ended promises of sup-
is a director at Arrjavv and a
port and sops. What has been puzzling about
this outpouring of investor-friendly blan-
‘probabilist’ who researches
and writes on behavioural
dishments has been the fact most of these
politicians have failed to display an iota of
finance and economics.Her coherence on the quality of investment they
Twitter handle is @DivaJain2 are seeking from Tesla, and the nature,
rationale and scope of the incentives that
they are willing to provide it. While a high-
profile deal with a marquee investor may be
a valuable tool for political signalling, unless
these investment deals are crafted skillfully,
they are unlikely to deliver on the promise of
creating an “electric vehicle hub”, which
they are premised on.
Despite doubts about the net carbon
impact of electric vehicles (EVs), given that
VIEWS
AP
Our budget policies should aim
for the creation of quality jobs
Apply this test: Will it help create productive and appealing employment for those in their twenties?
VIDYA MAHAMBARE
is professor of economics, Great Lakes
Institute of Management, Chennai
Y
oung adults (aged 20-29 years)
form the backbone of a dynamic
economy and hence government
policies must focus on the creation of
good- quality jobs for them. India’s
upcoming budget should create a con-
ducive environment for that across both
services and manufacturing, without
excessively focusing on either, while
avoiding the temptation to announce an
urban job-guarantee scheme.
For policy formulation, we first need
to look beyond the standard unemploy-
ment rate, the unemployed-to-labour-
force ratio, to understand what’s needed.
also a political cloud over a big fiscal package. By definition, the labour force leaves out
The US economy’s 2022 forecast was revised adults who stop searching for work,
women who are not in paid work, and
to 4%, down from 5.2% projected in the WEO’s also young people who continue to study
October update. Clearly, Omicron has erupted either because they can’t find jobs or
at a particularly bad time for the world’s two expect better jobs with higher academic
largest national economies. Both look poised qualifications. As we argued earlier
to drag global growth down. The Eurozone, (bit.ly/3G2FnuU), a less widely used
measure, the employment-to-popula-
which has its own set of covid worries, is also tion ratio, offers a more accurate under-
expected to fare worse this calendar year than standing of whether the economy is
expected earlier. In such a scenario, if rapid generating jobs fast enough to keep a
Indian growth holds up, it would be a matter of constant proportion employed.
some satisfaction. Our leaders, however, ought At an all-India level, from 2004-05 to
2018-19, while young adults in farm
not to make a big deal of it before we have clear work as a proportion of their population
signs that a 9% clip will be achieved this fiscal fell from 34% to 14%, those in non-farm
year and sustained in 2022-23, the budget for employment remained largely constant
which is to be unveiled next week. at around 29%. While some states such
We must remember that growth in 2021-22 as West Bengal, Gujarat, Karnataka and
Bihar (from a low base) have managed to
only represents a recovery of the output lost in
2020-21 after the pandemic struck. While our
overall resilience has been noteworthy, our
revival remains uneven. Moreover, the actual
test of economic expansion lies ahead. High-
frequency scanners of activity showed a slight
dip as a third wave of covid arose. Omicron’s www.livemint.com
effects are yet to fully play out, as the ongoing
wave, while milder than last year’s, is yet to
subside. We have had lighter restrictions this
SENSEX 17,233.98 Æ 156.80
REACHING COMPROMISE
Aadhaar
time, but the virus has dug in its claws hard
gets a fresh
enough to disrupt parts of the economy, travel
lease of life
Home ministry accepts
and tourism being a prime example. We can-
UIDAI’s biometrics;
in case of overlap,
National Population
Register will prevail
B Y S URABHI A GARWAL &
S ANGEETA S INGH
not shrug-off an adverse shift in global condi-
·························
T he Aadhaar project,
which has been in the
eye of a storm for its dis-
pute with the home ministry’s
National Population Register
(NPR), received a shot in the
arm on Friday, with the Cabi-
net Committee on Unique
tions either. An enlarged oil-import bill looks
Identification Authority of In-
dia (UIDAI) extending its man-
date to collect biometrics for a
total of 600 million residents of
the country.
This was made possible after
NPR agreed to accept biometrics
enlisted under Aadhaar, with
the caveat that where there is an
like a distinct possibility, and even more so, a
overlap and a conflict in the da-
tabase, NPR-compiled metrics
would prevail.
However, it is not clear as to
whether the parliamentary
standing committee on finance,
which had opposed the UIDAI
legislation, would go along with
reversal of easy money by the US, which could
the compromise.
Earlier, UIDAI which is spear-
heading the project was sup-
posed to collect biometrics for
200 million people, a task which
it has already completed. The
NPR project is being run by the
Registrar General of India (RGI),
which comes under the purview
cause capital outflows and weaken the rupee.
of the home ministry.
The decision, which comes af-
ter a long stand-off between
UIDAI and NPR, means that In-
dia’s two flagship projects will
continue to coexist, and also
that UIDAI will be able to meet
its original target of giving
unique identities to 600 million
Our foreign exchange reserves offer a cushion,
people by 2014.
The two projects, which have
almost similar objectives, have
been at loggerheads over who
will collect biometrics for the
entire population of the country.
With the cabinet extending
the mandate of UIDAI to issuing
another 400 million numbers,
but there could still be trade-offs we haven’t
the project will continue to en-
NOTE TO READERS
The Media Marketing Initiative on
Page 7 is the equivalent of a
paid-for advertisement, and no
Mint journalists were involved in
creating it. Readers would do well
had to contend with in recent years. All said,
to treat it as an advertisement.
Mint is also available for R9.50 with
Hindustan Times under a combo offer
we mustn’t take rapid growth for granted.
THEIR VIEW
they use energy which could be generated in The US-based company would have to
either clean or unclean ways, they are widely develop Shanghai as its export hub and
seen as the vanguard of the technological source locally. They reasoned that this would
change that is sweeping through the global kill three birds with a single stone. It would
auto industry. Their development is also not only bolster exports, but also make local
likely to yield several positive externalities component suppliers more competitive and
that can transform mobility as we know it. help them acquire sophisticated manufac-
Therefore, cultivating a robust and well- turing knowhow. Lastly,
developed EV industry is a laudable and nec- Tesla would put pressure
essary objective of our industrial policy. on other local manufactur-
However, this objective cannot be ers to upgrade their stan-
achieved via investments in import-depend- dards and act as the prover-
ent assembly plants with minimal local sour- bial aggressive catfish that
cing, as Tesla plans to do in India, according forces other fish in the
to many reports. Developing a viable domes-
tic EV industry would require widespread
pond to swim faster. To
achieve this, Tesla was pro-
diffusion of technical knowhow and the
development of an ecosystem of local com-
vided with lavish incen-
tives, including cheap land,
ponent suppliers that could be leveraged by low cost loans, subsidies,
other domestic carmakers to compete with tax breaks and 100% own-
Tesla in the EV market. ership of the factory ( a first
Tesla has invested in China, and Shang- in China where all foreign
hai’s deal with Tesla offers a classic template automakers need domestic
of how a ‘carrot and stick’ investment policy partners). There was plenty of stick as well.
can lead to the development of a powerful EV Tesla would have to invest at least $2 billion
ecosystem. When China started negotiations over 5 years, for example, and start paying
with Tesla, its local market was plagued with Chinese taxes of at least $323 million from
low-quality EVs (mostly hybrids) of limited 2023 onwards, failing which Tesla would
capability. Chinese policymakers were clear- lose its factory to the Chinese government.
headed about how they wanted to use Tesla. China’s strategy has yielded phenomenal
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune*
EXCLUSIVE PARTNER
NIFTY 5,204.70 Æ 46.40
rol people in 16 states and union
territories, while NPR will do it
in other states.
“We are very happy with Mr.
Chidambaram’s suggestions,
and by doing this, we will be
combining the strength of both
the models...we now have the
best of both worlds,” said Nan-
dan Nilekani, chairman of UID-
AI. P. Chidambaram is India’s
home minister.
After Aadhaar’s mandate to
collect biometrics ended at 200
million, it was supposed to wait
for the NPR data to come in to
remove duplications and issue
the UIDs.
On the other hand, the home
ministry had stated that UIDAI
data can’t be trusted for “securi-
ty” purposes and it wanted to
collect its own biometrics. The
government would have spent
an extra `6,000 crore if NPR and
UIDAI collected their own bio-
metrics.
Home minister Chidambaram
said that both agencies collect-
ing data separately would have
meant a lot of duplication.
“Now one authority will col-
lect the biometrics and the other
can issue Aadhaar. NPR would
accept the biometrics of 60 crore
people covered by UIDAI.” He
added that this would reduce
the chances of duplication to
just 5%. “People who will come
to the camps for NPR data col-
lection will be asked if they have
already given biometrics to UID-
AI. The duplication will only be
in the case of those who give
their biometrics again.”
Even though Chidambaram
said that NPR would “accept”
Aadhaar data, he added that
UIDAI will have to go back and
review a few aspects of its model
and it will make changes if re-
quired. A UIDAI official said the
agency will take a break after it
completes 200 million enrol-
ments and resume its activity
from 2 April.
“During this period, we will
refresh our entire technological
and other processes and see
what needs to be fine-tuned,” he
said.
The home ministry had
raised concerns about the
multi-registrar model followed
by the authority and also the
introducer system of enrol-
ment, where people with no
documents can be enrolled
through introduction by an-
other Aadhaar holder. The offi-
cial who did not wish to be iden-
tified said that the concept of the
introducer system was meant to
bring about inclusion. The con-
cept in itself was fine, but fal-
TURN TO PAGE 3®
India should
craft a strategic
lure for this
EV-maker and
not roll out a
red carpet just
to score a win
DOLLAR `49.3 æ `0.79
POLL PROMISES
The Bharatiya Janata Party (BJP) and the Congress came out with their vision statements for
Uttar Pradesh on Friday, reiterating their pre-poll positions. The Congress reviewed reservation
for minorities, while the BJP opposed it. Though, it served as a signal to respective vote banks.
BJP manifesto
 Wants removal of “all obstacles"
to the construction of Ram temple
in Ayodhya
 Opposes 4.5% sub-quota
reservation for minorities within
the 27% quota for backward
communities
 One milch cow to be given free to
each family below the poverty line;
Congress' Vision
Document 2020
 To create two million jobs for the
youth along with 1,000 skill
development centres
 To set up sub-quota for socially
and economically backward
minorities, sub-quota for most
backward classes, and explore the
possibility of sub-quota for most
backward Dalits
 To work toward fair and balanced
UPA signals
intent to
deregulate
sugar industry
B Y S ANGEETA S INGH,
A MAN M ALIK &
A PPU E STHOSE S URESH
·························
NEW DELHI
T
he Congress-led United Pro-
gressive Alliance (UPA) on
Friday signalled its intent to de-
regulate the sugar industry, a
move that could potentially
stoke a political backlash, espe-
cially at a time when states like
Uttar Pradesh, Punjab and Utta-
rakhand—all sugarcane-growing
regions—are in the middle of an
election campaign.
The opposition claimed that
not only was it anti-farmer, it
also violated the electoral code
of conduct prevalent in five
states, while sugar stocks of com-
panies that produce the com-
modity rallied.
Prime Minister Manmohan
Singh set up an expert commit-
tee, headed by C. Rangarajan,
chairman of the Prime Minister’s
Economic Advisory Council
(EAC), to examine the merits of
deregulating sugar. “It will look
into all the issues relating to de-
regulation of the sugar sector
and it has been requested to
complete its task as early as pos-
sible and give its recommen-
TURN TO PAGE 3®
Saturday, January 28, 2012
Sandy Angus talks
Q&A:
about the India Art Fair >4
FOREIGN AFFAIRS: US aims to ease
tourism, business visa norms >2
TECHNOLOGY: Twitter can selectively
censor content by country >16
INTERNATIONAL: US growth quickens,
but speed bumps ahead >16
EURO `64.83 æ `0.18
will strongly implement complete
ban on cow slaughter
 Will construct a "spiritual Disney-
land", keeping in mind Lord Krishna
and the sanctity of Mathura-Vrindavan
 Will create 10 million new
employment and self-employment
opportunities. Provide for R18,000 as
unemployment allowance
land acquisition law. Land losers to
be made full partners in development
projects
 Will create new green revolution in
the state, offer better prices to
farmers, provide agricultural loans at
6% interest and revive cooperatives
 Will set up strong and independent
Lokayukta keeping the chief minister
under its purview
Source: BJP manifesto, Congress Vision Document 2020
AHMED RAZA KHAN/MINT
Vol.5 No.23 `5.00
GOLD `27875 Æ `635
Sebi reviewing QUICK EDIT
promoter Under
lock-in norms attack
B Y V YAS M OHAN & ny sponsor lending
S NEHA S HAH
·························
MUMBAI
I ndia’s stock market regula-
tor is reviewing norms that
govern the pledging or transfer
of shares by promoters during
the lock-in period after listing,
three people familiar with the
development said.
Under the existing rules,
promoters should hold at least
20% of equity after a public
float and these shares can’t be
sold for a minimum three years
from the date of allotment.
The Securities and Exchange
Board of India (Sebi) is review-
ing the minimum contribution
and the lock-in period, apart
from the shares changing hands.
Discussions are at an early stage
and the matter has not been tak-
en up by the Sebi board yet.
In several foreign markets,
while the lock-in period is 6-12
months, promoters are not al-
lowed to pledge shares during
that time. In India, though
there are restrictions on pledg-
ing or transferring shares, there
are exceptions.
Shares that are counted un-
der the minimum contribution
can be pledged with any sched-
uled commercial bank or public
financial institution if the loan is
TURN TO PAGE 2®
LIVEMINT.COM
THEIR VIEW
raise this ratio marginally, it fell in Uttar three-fourths of young women (aged
Pradesh (UP) and also in the better-off 20-29) were not looking for work. With
states of Maharashtra and Kerala. greater education and changing gender
Why did the share of young adult norms, we may expect this proportion
employment in industry and services to fall with more women entering the
not rise during a largely good period of country’s job market.
growth for the economy? A combination In this context, how do we overcome
of three factors may explain it. First, India’s job problem? While the Centre
more young adults are staying in educa- launched its ‘Make in India’ campaign in
tion longer; second, unemployment has 2014 to expand local manufacturing, we
risen; and third, more women are either now need to spread efforts wider and
leaving or not taking up paid work. create a level playing field for the expan-
The share of young adults in higher sion of services such as telemedicine,
education in India has more than dou- online education, data centres and other
bled over the years. However, increased fields where the covid pandemic has
variation is visible among young adults opened up an export market. To partici-
in education across states. Also, Bihar pate in the world market for services, we
(13%) and UP (15%) are among those with need our regulatory framework on
a higher share of young adults in educa- issues such as data privacy to match
tion, compared to Gujarat (10%), Karna-
taka (11%) and Tamil Nadu (12%). Punjab,
Haryana, Maharashtra and Kerala have
also seen larger increases of young adults
international standards, and the upcom-
ing budget can make a push towards it.
We also need an increased focus on
vocational, technical and skill-based
still studying. It is far from clear if the education. This must become a more
majority of highly-educated young socially-acceptable form of education,
adults are generally employable, given while popular demand for old-fashioned
the low average quality of education. degrees needs moderation.
While more are studying for longer, Even within manufacturing, we need
unemployment among young men as a to expand newer sectors, as youth with
proportion of the population in this age degree-level education do not want to
group also rose by 8% from 2004-05 to settle for jobs in older industries such
12.4% in 2018-19, although UP continues as textiles. Further, along with produc-
to record a relatively low joblessness rate tion-linked incentives currently in place,
among young adults. The rise in young we also need to lower import tariffs for
adult unemployment has been led by an our firms to be able to source inputs
increase in educated unemployment around the world at the best prices and
across Indian states. remain globally competitive.
With high educated unemployment Every policy tweak in the upcoming
along with a further expected rise in the budget should apply this test: Will it help
supply of educated young people, the create productive and appealing jobs for
following scenario is likely to continue. young adults? That is the only way to
First, educated adults will continue to raise prosperity for the majority of
look for aspirational jobs and wait for Indians. An urban job-guarantee
roles that suit them. Second, employers scheme, which is almost sure to become
will find most such applicants unsuitable permanent once announced, will not
for available jobs, resulting in a much achieve this objective. In the meantime,
smaller effective pool. Third, as eco- those who need support should be
nomic growth picks up, the lack of a helped with a temporary expansion of
suitable workforce will hasten a shift direct income transfers.
towards higher capital intensity and The article is based on a joint ongoing
automation, accompanied by higher research project with Sowmya Dhanaraj
employee turnover. Fourth, in 2019-20, and Sankalp Sharma
16
12 PAGES
+ 20 PAGES LOUNGE + 4 MARKETS PAGES
OIL $111.49 Æ $0.94
With bad laws and
good civil servants, it’s
A
its name to the
London Olympics would
have been justified in
assuming that the move
would help burnish its
image. But Dow
Chemicals hasn’t been
still possible to govern.
able to shake off the taint
associated with having
bought the assets of a
company that used to run
the plant in Bhopal that
was the source of the
1984 gas leak that killed
thousands. The higher
profile due to the
Olympic sponsorship has
served to make it a bigger
But with bad civil
target for a lot more
people. The resignation
of a volunteer member of
the event’s sustainability
commission has
intensified the clamour
to scrap the company’s
sponsorship role.
Dow has maintained
that it wasn’t the owner
of the plant when the
servants, even the best
leak took place and
shouldn’t be held
responsible for it. The
Olympic’s organizing
committee has said it
won’t drop the company
as a sponsor. But as the
event draws closer, the
attacks could get sharper.
laws can’t help.
OT TO VON B I SMA R K
results. Shanghai is now Tesla’s largest and constrained in competitively pricing its out-
most important manufacturing facility. It put from the Shanghai plant. This is why it
sources 86% of its components domestically, wants to use its Shanghai plant to export to
compared to 73% for the California factory. other Asian countries, including India, and
Local component manufacturers have is lobbying for lower import duties instead of
acquired extraordinary technical expertise, incentives to manufacture locally.
like the LK group which has developed the Indian policymakers and sundry politi-
largest casting machine in cians should be aware that domestic manu-
the world for Tesla. And facturing is critical for the country to lever-
the catfish effect has led to age our burgeoning demand for cars and
a deluge of new and more develop new production capabilities. Even
sophisticated models from free-market economies like the US under
local automakers, making radical free-trade adherents like President
China the EV Mecca of the Ronald Reagan hammered Japanese auto-
world.
This brings us to why
makers with quotas and tariffs to force them
to manufacture vehicles in the US.
Tesla is now keen to enter
India with imports instead
India too should use Tesla as a catalyst for
setting off a chain reaction that transforms
of local manufacturing. A domestic EV manufacturing, instead of sur-
large part of the output rendering our vast market for myopic politi-
from the Shanghai factory cal gains. Indian politicians right now ought
is exported to EU. With to be driving a hard bargain for a Giga Ludhi-
Giga Berlin (Tesla’s Ger- ana, Giga Hyderabad, Giga Kolkata, Giga
man factory) and Giga Texas on the anvil, Bengaluru or a Giga Chennai, instead of ser-
Giga Shanghai will no longer be needed to enading Elon Musk with ballads of unre-
export products to the EU. Moreover, Tesla quited incentives and open-ended promises.
is facing stiff competition (and eroding mar- The original Tesla (Nikola) is said to have
ket share) in China from established players remarked, “A new idea must not be judged
like BYD as well as upstarts like Nio. With tax by its immediate results.” Neither should a
breaks expiring in 2023, Tesla will also be new investment.
LIVEMINT.COM VIEWS THURSDAY, 27 JANUARY 2022
NEW DELHI 13

MY VIEW | CAFE ECONOMICS M I N T C U R AT O R

A brief history of Indian budgets Bitcoin may lack an economic

anchor but that’s not relevant
as economic constraints shifted The views of contrarians, technophiles and sceptics matter more

Our post-1947 economy has seen old structural hold-backs ease and new ones arise but the state remains woefully underfunded

AARON BROWN
is a former managing director and head of
financial market research at AQR Capital
Management. He is the author of ‘The Poker
NIRANJAN RAJADHYAKSHA Face of Wall Street’.
is CEO and senior fellow at Artha India Research
Advisors, and a member of the academic
advisory board of the Meghnad Desai Academy
of Economics.

B
itcoin has fallen 50% since Novem-
ber. This is not unusual for a crypto-
currency; it did the same from April to

I
ndia completes 75 years as an independent
nation this August. Finance minister Nirmala
Sitharaman will present the annual budget of
the Union government against the backdrop
of this anniversary. The long journey since
1947 has had its inevitable successes, failures
and disappointments. It is difficult to look at
history these days without a partisan lens, but if
political loyalties can be kept aside for a moment,
then the fiscal history of the past 75 years can tell us
a fascinating story.
I have read through the budget numbers,
finance minister speeches and macroeconomic
data for four milestone years: 1948, 1972, 1997 and
2021. These cover Independent India’s first full
budget, presented by R.K. Shanmukham Chetty,
the budget presented before the silver jubilee of
our independence by Y.B. Chavan, the budget
presented before the golden jubilee celebrations
by P. Chidambaram, and the one presented by the
current finance minister last year. What do these
budgetary vignettes tell us?
Independent India began its development
journey with very weak fiscal capacity. The
amount of tax collected by the Indian state as a
proportion of its economic output was abysmally
low (see table). More than half of all annual tax
revenues came from direct taxation of individual
incomes and company profits. The narrow tax
base as well as conservative budgeting gave the
government very few financial resources to spend.
The budget deficit in 1948 was minimal.
The Nehruvian strategy of rapid industrializa-
tion led by the state couldn’t be based on such a
weak fiscal base. Tax rates were increased. Higher
fiscal deficits were funded by new money created
by the Reserve Bank of India. Foreign aid was
needed, since domestic financial resources were
not enough to fund the government’s plans. Fiscal
deficits were still modest compared to what India
experienced after the 1980s.
Economic policy was severely constrained by
shortages in foodgrain supplies, domestic savings
and foreign exchange. Chetty made this clear in his
1948 budget speech itself: “The money required for
the purchase of food is of course a first charge on
our available foreign exchange resources.” How-
ever, a lot had changed by 1972. Fiscal capacity had
almost doubled in terms of the tax/GDP (gross
domestic product) ratio. Much of that now came
from indirect rather than direct taxes, which meant
that the Indian tax system was most regressive just
when slogans of socialism were at their loudest.
Two of the three big macroeconomic constraints
began to get loosened by the time India was cele-
brating 25 years of independence. The Green
Revolution had helped ease the food constraint.
India became self-sufficient in food. The domestic
savings constraint was loosened from the 1970s.
Unshackled but undertaxed
India’s economy has broken free from most of its early structural constraints but low tax
collections as a proportion of GDP still constrain budget-making.
1948 1972 1997 2022
Gross domestic savings (% of GDP) 9.5 14.1 24.2 31.4
Tax/GDP (%) 2.8 5.1 6.8 7.1
Direct tax/total tax revenues (%) 52.8 17.5 35.2 50
Fiscal deficit (% of GDP) 0 2.53 5.66 6.8
Population (million) 361 548 990 1,380
Foodgrains production (million tonnes) 50 97 193 308
Import cover (months) NA 2.9 6.5 17.8
Agriculture/GDP (%) 54.7 41.2 24.3 16.7
Sources: MOSPI, RBI, UN Population Division, ministries of finance and agriculture,
Report of the National Income Committee (1951), author estimates
SATISH KUMAR/MINT
Finance minister Chavan said in his 1972 budget tional quality. Chidambaram touched on some of
speech that higher deposit mobilization by the these challenges in his 1997 budget speech. The tax
banks nationalized in 1969, Life Insurance Corp reforms of the 1990s also helped push up the con-
and provident funds has “greatly facilitated market tribution of direct taxes in total tax collections. In
borrowings” by the government. What he left other words, the Indian tax system became more
unsaid was that very little money was left for the progressive. The fiscal deficit would continue to be
country’s private sector. uncomfortably high by international standards.
The money being soaked up by planners was not Sitharaman will present her new Union budget at
being used well either. India had by then built a a time when the economy is recovering from the
diversified industrial sector, though an inefficient covid shock. The recovery in domestic demand is
one. Chavan spoke about shortages in steel, fertil- still uneven, inflationary pressures are building up,
izers, power and agricultural raw materials. Many the global economy is preparing for higher interest
capital goods and intermediate goods sectors were rates and crude oil prices are close to their highest
operating below capacity. There was still not level in seven years. Budget 2022 will obviously be
enough foreign exchange to import goods that focused on these challenges even as moderate fiscal
were in short supply. India had enough foreign consolidation continues.
exchange to cover only 2.9 months of imports. There is also a lesson to be taken from the past
Cut to 1997. The 1991 economic reforms recon- 75 years. India’s economy has broken free of many
nected India with the world economy. The 1997 of its old structural constraints. It now faces new
budget has now gone down in history because of its constraints. However, one unchanging fiscal fact is
new policy initiatives as well as tax cuts. The three that the Indian state continues to be underfunded.
old macro constraints on Indian economic policy— The tax/GDP ratio, net of what the Centre shares
inadequate domestic savings, shortages of wage with states, has barely moved over the past 30 years.
goods such as food, and the unavailability of Increasing it, so that the state’s growing infrastruc-
enough foreign exchange for imports—had eased ture, development, subsidy and welfare commit-
by the late 1990s. The situation on all three fronts ments are funded, is a looming challenge.
has further improved over the past 25 years. Note: Some of the data in the table above is based
There were new constraints on the horizon. on estimates or from the closest year for which
These were energy, infrastructure and institu- credible data is available.
July 2021, and quickly rebounded. From a
statistical viewpoint, Bitcoin looks like a
very high volatility asset without strong
medium- or long-term tendencies to trend
or revert. It’s not a perfect random walk with
its future direction independent of past
price movements, but it’s closer to one than
most major assets. This background is
important for evaluating a tweet by Nassim
Nicholas Taleb of Black Swan fame that
generated considerable attention: “For a
contagion-driven asset with no economic
anchor such as #BTC, a falling price does
not make it ‘cheaper’ and more attractive.
A falling price makes it less desirable [and],
paradoxically, more [expensive]. Why?
Because price is its only information.”
This is not true empirically over Bitcoin’s
short history. In the past, buying Bitcoin
when the price was falling has been equally
attractive as buying it when its was rising.
But Taleb made an economic claim, not a
statistical one.
The first thing to note is that there are lots
of other “contagion-driven” assets without
an “economic anchor.” Art, diamonds, gold
and many other things have value only
because other people value them, not from
any direct economic use. A particularly
important contagion-driven asset lacking
an economic anchor is the US dollar. Unlike
Bitcoin, it has a strong tendency to trend. If
the dollar’s value is falling due to inflation,
it’s likely to continue to fall. No one buys the
greenback because it’s cheap during infla-
tion or sells because it’s expensive during
depressions. The opposite happens.
The dollar has something that Bitcoin
doesn’t, which is a government and banking
system that sometimes acts to stabilize its
value. But it’s not an anchor, and the US
Federal Reserve does not try to return the
dollar to pre-inflation values. Rather, it’s an
engine to keep the ship from drifting too
fast. If the dollar is losing value rapidly, the
Fed would generate forces that may slow
the decline, but not reverse it to bring it
back to its previous value.
The world’s primary reserve currency
gave up any economic anchor in 1971 when
President Richard Nixon ended the gold
standard—and that was only a loose anchor
to gold, which itself lacks an anchor—and
after a decade of mismanagement estab-
lished a rough faith that its value would not
erode too quickly, to make it useful for
transactions and savings. That faith was
shaken in the 2007-09 financial crisis, but
due to fears of institutional collapse and not
Crypto adoption has tracked mainstream
financial repression globally REUTERS
inflation. Another major currency, the euro,
went through an even deeper crisis from
2009 through 2014, driven mainly by fear of
government and central bank defaults.
This is the world in which Bitcoin was
born and gained trust among technophiles,
financially-repressed people and those
sceptical of government and banks. Bitcoin
was a lifeboat for people thrown overboard
by the government ship, and for everyone in
case the traditional financial system’s lack of
an anchor caused it to flounder. Lifeboats
don’t need anchors.
However, as Bitcoin’s value and accept-
ance grew, it acquired an initial economic
anchor in the form of faith that some official
currencies and financial institutions would
be unattractive enough to many for signifi-
cant demand to exist for Bitcoin transac-
tions and savings. Later, as crypto projects
delivered real services to willing customers,
the value anchor for Bitcoin became faith
that it would be a major store of value for the
crypto-economy and a main exchange cur-
rency with the traditional financial system.
Over the last two years, progress in the
crypto-economy has been roughly about as
expected, without major breakthroughs or
setbacks. It is the traditional financial sys-
tem that has been upended by the pan-
demic, lockdowns, supply chain issues,
aggressive fiscal and loose monetary poli-
cies, political dysfunction and threats of
war. Therefore, it seems to me that volatility
in the number of dollars people will pay for
Bitcoin has more to do with uncertainty
about the long-term value of dollars than
reappraisals of the prospects for the crypto-
economic sector. When Bitcoin’s price falls
in terms of dollars, it doesn’t say much about
whether Bitcoin is cheap or expensive, but
it does suggest people are placing more faith
in dollars, perhaps due to anticipated Fed
monetary policy tightening, reduced expec-
tations of government spending and also
declining pandemic and war fears.
Mainstream financial markets give their
opinions on such things via interest rates,
equity volatility, exchange rates and infla-
tion break-even rates. These are good indi-
cators of median views. Bitcoin and crypto
markets help us understand the opinions of,
say, a 5% tail of contrarians, sceptics, tech-
nology experts and also those who are finan-
cially repressed. Wise investors would listen
to both voices. ©BLOOMBERG

GUEST VIEW

A proposal that has stirred up questions of IAS control

officers of high quality with valuable experi-
AMITABHA BHATTACHARYA ence in field conditions and the actual func-
tioning of governments at different levels....”
The exchange of officers between their
allotted state cadres and the Centre is a basic
feature of the IAS. Direct recruits are allotted
The proposal urges each state to send a list
of names to meet the Centre’s requirements,
and in case of any disagreement, the matter
would be decided by the Centre and the state
must effect that decision “within a specified
time”; further, in case of any delay by the
crossfire of political battles have raised the
basic issue of who really controls members of
India’s higher bureaucracy and thereby the
administrative machinery at both the central
and state levels.
The willingness of officers to go on deputa-
planning should be scientific and future-
looking, with more recruitment if need be.
Second, each officer should be motivated to
work at the Centre, and this should be made
clear during their induction training itself.
Third, in an annual joint exercise between

T
he Centre’s proposed amendments to
the Indian Administrative Service (IAS)
cadre rules have met with opposition
from the chief ministers of certain states.
Given India’s political environment, strident
objections to the proposal are understanda-
ble, though the heat so generated clouds a
dispassionate analysis of the issues involved.
a state cadre (with a 2:1 outsider: insider ratio)
and deputed to the Centre for specific peri-
ods, after which they’re expected to return.
Thus, at all times and at senior levels, the
Centre should have adequate officers repre-
senting the experience of various states. This
maintains the all-India character of the servi-
ces, broadens their perspective and reduces
state, the officers shall stand relieved; also, in tion from their state to the Centre is also an the states and the Centre, the list of those to
the specific situation where important factor. The pro- be deputed should be finalized. Since the
officers are required in pensity of many officers to selection for senior positions is done by chief
“public interest”, the state An earnest lobby with political leaders ministers at the state level, or by the con-
must effect the call within a to retain or attain coveted cerned minister and Prime Minister at the
specific time frame. dialogue among postings adds to the prob- Centre, the latter should not be left with a fait
On the face of it, none of lem. A central job appears accompli list of officers considered ‘incon-
this appears unreasonable.
all stakeholders attractive mostly to the venient’ or ‘sparable’ by states.

is a former Indian
Administrative Service officer
who has also worked in the
private sector and with the
United Nations Development
Programme
The All-India Services (AIS), such as the
IAS, Indian Police Service and Indian Forest
Service, were set up under our Constitution
with noble and practical objectives. Members
of the AIS, especially the IAS, were to occupy
leadership positions in the bureaucracy, from
the sub-district to the state and central levels.
As P.S. Appu noted, “[The] idea was that
members appointed to the Services would
resolutely stand by the Constitution and the
law and tender frank and fearless advice to
the politicians... that they would play a pivotal
role in holding together a country of great
disparity and diversity. Another expectation
was that these Services.... would make availa-
ble to both central and state governments
parochialism. While calculating the strength
of a state cadre, a central deputation reserve
upto 40% is built in. Every year, the Centre
asks the states to send a list of officers in dif-
ferent seniority bands to be considered for
deputation, and the Centre makes a selection
from such ‘offer lists’.
Unfortunately, many states do not offer
enough numbers for consideration. Conse-
quently, over the years, an unfortunate situa-
tion has arisen, wherein central ministries
and departments are facing an acute shortage
of IAS officers at middle and senior levels.
That is apparently the reason why the Centre
wrote to states proposing a change of rules
and seeking their response.
What then do certain states
fear? How does it enfeeble
will be needed
the states’ political control
over the bureaucracy? How
to resolve a
does it go against the spirit problem we
of cooperative federalism
and affect the administra- can’t ignore
tion of states? Would it be in
the public interest to ‘pro-
vincialize’ the IAS and threaten its all-India
character? What do such states propose to sat-
isfactorily resolve this issue?
The fears seem to stem from a trust deficit,
between governments as much as among
individual officers. Recent episodes involving
senior IAS and IPS officers caught in the
more ambitious lot, to those
not in the good books of a
state’s political leadership,
or those who have personal
reasons for a move to Delhi.
Many others prefer to spend
their careers in their home
state. Is this desirable?
To resolve this problem,
the Centre must play a more persuasive role.
Making stricter rules and adopting a high-
handed approach may not be of much help.
All states should appreciate that it is in their
interest to have officers with exposure to
work at the Centre.
Firstly, therefore, the cadre and career
IAS associations, which do precious little,
can perhaps volunteer to help government(s)
in this exercise. Once a mutually-agreed list
is finalized, it should be the responsibility of
the Centre to find appropriate postings for all
of them, ‘within a specified time’. The prac-
tice of reverting officers prematurely to their
states should be avoided.
What is needed is the cooperation of all
stakeholders. The proposed rule changes,
apparently well intended, will succeed if the
Centre can convince the states as well as IAS
officers of the merits of this move. Otherwise,
the current confrontation will continue,
minor issues will get blown out of proportion
and individual officers will suffer.
14 THURSDAY, 27 JANUARY 2022
NEW DELHI BUSINESS OF LIFE CULTURE LIVEMINT.COM

PHOTO: COURTESY THE ESTATE OF SUNIL JANAH, THE KIRAN NADAR MUSEUM OF ART, AND EXPERIMENTER, KOLKATA PHOTOS: COURTESY THE ESTATE OF SUNIL JANAH AND EXPERIMENTER, KOLKATA

‘Shane’, unlike its

outgoing subject,
opts to play safe
The film appraises Shane Warne the
star, but misses important details

A fresh look at Sunil Janah’s

industrial photography Arun Janardhan

A decade after artist work from the 1940s highlighting the plight of
the vulnerable millions, his shift towards the
Sunil Janah’s death, depiction of robust industrial landscapes may
seem jarring. But this stylistic suppleness was a
Experimenter in Kolkata trait of his photographic arsenal. A typical Janah
photo seemed to combine a keen eye behind the
is opening a new lens with the photographic film’s ability to
exhibition of his urban interact with the changing light, scenario and
context of the frame. The outcome was a deftly
and industrial work calibrated image, where emotions were teased
out by colour, texture and reproduction.
It was this special gift of making his technique
Somak Ghoshal interact with aesthetics that Janah picked up
from Adams. In the pre-digital era, with limited
T
he new documentary Shane, streaming on Bookmyshow,
is a deep dive into the Australian leg-spinner Shane
Warne’s career and life, but one that stays mostly in clear
waters. It’s a tribute to the star rather than a breakdown of his
career, skimming as it does over some of the less laudatory parts
from his playing days, missing out on small details that would
have made it informative: How did he get that good? Why was he
a rebel? How many hours did he practice?
Nicknamed “Hollywood” for his bleached hair and flamboyant
lifestyle, Warne’s journey as a cricketer was a rollercoaster ride.
Besides the wildly spinning deliveries and some obdurate bat-
ting, there was a stream of women, deals with bookmakers,
banned diuretics and a subsequent year-long suspension, weight
gains and losses, which are all part of the film.
“I wouldn’t like to play against me. I was nasty,” Warne says in
Shane. He narrates an incident in which he told a defensively bat-

I
n 2012, after Sunil Janah died at the age
of 94, tributes poured in from all over
the world, celebrating the Assam-born
photographer’s luminous, although
relatively unsung, career. Indeed, it
was likely that several generations of Indians
heard his name for the first time with the news
of his death—which was deeply ironic, consid-
ering how woefully poorer the visual history of
20th-century India would be without Janah’s
uniquely original contribution.
A decade after Janah’s death, Experimenter
gallery’s Ballygunge Place wing in Kolkata is
poised to open a new exhibition of his work,
Making a Photograph. The title draws on the
title of a book by Ansel Adams, the great Ameri-
can landscape photographer Janah had idol-
ized. But instead of Janah’s humanitarian pho-
tography, which is historically rich and emo-
tionally accessible, this show turns its attention
to a less-obvious facet of his career: urban and
industrial photography.
The decision to focus on this specific aspect of
Janah’s oeuvre is brave. His cityscapes and pho-
tographs of newly independent India are strik-
ing, but not as quickly arresting as, say, the
architectural photographs of Madan Mahatta,
an outstanding chronicler of Nehruvian India.
Instead of clean lines and elegant frames,
Janah’s photographs of the bustling steel plants
in Bhilai and Rourkela, or the dark and dingy
coal mines of Bihar, seem to have been captured
in great haste. Each frame—smoky, grainy,
grimy, a bit askew—throbs with motion. A life-
long communist, Janah’s approach was very
much of and for the proletariats.
Until he moved to the UK in 1980, and then to
the US in 2003, Janah worked with a range of
subjects during his years in India. Deeply
attached as he was to the arts, especially cinema
(Satyajit Ray, a close friend, designed Janah’s
first photobook, The Second Creature), the
human was central to his frame.
In 1998, a major exhibition of Janah’s works
from 1942-78 was organised by photographer
scope of experimentation in the dark room,
Adams expertly used natural light and weather
conditions as his raw materials to get to the
effect he desired. His early photographs taken
at Yosemite National Park bear the imprint of
this distinctive style, where black-and-white
film interacts with misty weather and the liquid
glow of sunlight to create poetry in the develop-
ment room.
Janah’s industrial photography ventures into
similar terrain, where the mastery of technique
interacts with ways of looking to give depth and
amplitude to what he captures. It is easier to
experience this body of work as a celebration of
the Nehruvian idyll of a new India. Machines
and men work together to lay its foundations on
(clockwise from top) Untitled; Transporting jute bales, Bengal, 1960s; Burn and Company factory, the ruins of colonialism. The interiors of the fac-
casting iron water tanks. Howrah, near Calcutta, early 1960s. tories and coal mines, full of colossal equipment
operating with great urgency, seem of a piece
Ram Rahman in New York. The show displayed morsel, dogs gnawing at corpses, every con- with a post-war European aesthetic. In 1950s
the audacious variety of Janah’s interests: left- ceivable shade of assault on human dignity, Germany, Bernd and Hilla Becher, an artistic
wing politics, Partition, travel, ethnography, were caught on Janah’s unsparing lens. Some couple, had set out on a project like Janah’s on
famines, citiescapes, you name it. But one set of of these photographs were turned into post- the outskirts of Düsseldorf. As they went around
photographs left both the crowds and the critics cards and sent around the world to raise funds photographing gigantic water towers, gas tanks
reeling. These were the images of the 1943 Ben- for the victims. and coal bunkers, they not only created an
gal famine, a man-made tragedy of epic propor- Janah’s work caught the eye of Margaret archive of a nation picking itself up from the
tions Janah had documented along with his Bourke-White, an American photojournalist devastations of two wars—they also pushed the
comrade, the artist Chittoprasad Bhattacharya. who became one of the most iconic chroniclers boundaries of conceptual photography.
Commissioned by P.C. Joshi, then general of the Partition for Life magazine. She travelled Janah’s images, too, acted as jigsaw puzzles
secretary of the with Janah, in that coalesce to convey a glimpse of a newly
Communist Party 1945, to the Raya- independent India, where the human hand is
of India, for an
assignment for
His images acted as jigsaw puzzles lMysore aseema and
region of
very much at work—be it in the form of men on
a riffing of a Swedish ship anchored on Indian
the party’s maga- that coalesce to convey a glimpse south India, as the waters or a solitary individual riding a cargo car
zine People’s War, of a newly independent India, famine spread in the depths of the coal mine. If there is a desire
the two men cre- beyond Bengal. to elevate the poetry of such everyday scenarios
ated some of the where the human hand is at work Their work, a mas- to the level of art, it is never achieved at the
most affecting terly combination expense of the characters central to the making
visual records of of documentary of the work.
the famine that exist to this day. Bhattacharya instincts and humane artistic vision, appeared
made unforgettable prints of scenes of starva- in Life to international acclaim. As Janah’s ‘Making A Photograph’ is on at Experimenter
tion and misery, while Janah created work friendship with Bourke-White grew, he went Ballygunge Place in Kolkata from 3 February to
that’s unsurpassed in its ability to evoke pity on to collaborate with her on the Partition 26 March.
and horror. Skeletal adults and babies reduced project, too.
to skin and bones, daily struggles to secure a For those familiar with Janah’s heart-rending Somak Ghoshal is a Delhi-based writer.
ting Sourav Ganguly that people have not come to watch him bat,
but the non-striker, Tendulkar. A few overs later, a presumably
instigated Ganguly promptly bounces out of the crease for a big
strike only to lose his wicket.
Warne’s story, told by him, his family including parents,
brother, ex-wife and three children (“He is a dorky, blokey dad”),
does mention some of his indiscretions. He is candid about his
“wild” ways, like the time when he played club cricket in England
before being selected for Australia, subsisting on tens of pints of
beer, chicken and chips. But the film directed by David Alrich,
Jon Carey and Jackie Munro brushes over the incident in which
he and Mark Waugh shared information with a bookmaker.
There is obviously sufficient time
He was spent on the Mike Gatting “ball of the
instrumental century”, told through a delightful
sequence of different cricketers
in turning describing the moment in short sen-
Australia into an tences with quick cuts. The camera
all-conquering stays on present-day Gatting, sitting in
machine silence for a moment. It’s as if nearly 30
years later, he is still trying to figure out
how the ball, which pitched outside
the leg-stump, spun in to clip the off-stump. “It was a fluke,”
Warne says in the film, because he never did it again.
While credible talking heads include some of his Australian
and English contemporaries, like Mark Taylor, Allan Border,
Darren Gough, Andrew Strauss, and older ones like Ian Botham,
Ian Chappell, only one Asian, Tendulkar, is included. It is also
here that the narrative feels incomplete because Warne played
over a dozen Tests against countries like South Africa, New Zea-
land, West Indies and Pakistan.
Another notable absence in the nearly one-hour, 40 minute
documentary is fast bowler Glenn McGrath, with whom Warne
formed a potent bowling partnership, gathering a cumulative
1,011 wickets from 104 Tests.
Shane may, however, be able to contemporise a cricketer
whose value to the sport will last longer than his career. Warne
not just revived the fading art of leg-spin, he also gave the dour
world of cricket, suffering from the slow decline of the West
Indies, a larger-than-life character who could dictate headlines
without bowling a ball. He was instrumental in turning Australia
into an all-conquering machine that dominated the sport.
Not really known for humility, Warne puts his over two dec-
ade-long career in perspective in Shane: “I liked loud music, I
smoked, drank and bowled a bit of leg-spin. That’s me.”

INHERITANCE OF FLAVOURS

How the street foods of Amritsar inspire Vikas Khanna

The chef and writer talks It had a yellow door, and there was one favourite street food. 2 tablespoons raisins
window through which sunlight would Apart from street vendors, did you go
about food and memory, stream in and fall on the gas range. When to restaurants in Amritsar? Method:
and explains why a food would be cooking, it’d make the oil Growing up, I was barely exposed to In a heavy saucepan, combine the jaggery
shimmer. restaurants. There used to be an air-con- with water and stir till jaggery dissolves.
‘stinky’ kulcha is his We had customised wooden cabinets— ditioned family restaurant called Crystal, Place the pan over a medium flame and
like most people from my era—where len- and an expensive dining space in a hotel bring the water to a boil.When water starts
favourite street food tils would be kept and they absorbed the named Mohan International. When I was boiling, add the milk and skim off any
woody smell. Then there was the commu- a hospitality student and visited Maurya scum that rises to the surface.
Jahnabee Borah nity kitchen or the langar at the Golden Sheraton in Delhi, their coffee shop Add the saffron and cook the jaggery
jahnabee.b@livemint.com Temple, which was like an extension of became my foundation in many ways of water, stirring constantly till syrup thick-
my home kitchen. I got fortunate because what a restaurant could be. When I started ens. Remove from flame and keep warm.

L
ast month, chef Vikas
Khanna released his book Barkat,
which chronicles how he mobilized
the initiative Feed India to provide grocer-
ies and cooked meals to feed millions
across the country at the peak of the pan-
demic. Feed India is touted to be one of
the largest food movements in the world
in the last two years. The book highlights
the chef’s philosophy of food as service
and is filled with nostalgic stories from his
childhood. In an interview with Lounge,
Khanna fondly recalls his food memories
of growing up in Amritsar and how they
continue to define his menus.
Describe the kitchen of your child-
hood?
it was that community kitchen which
made me understand that food is essential
to seva (service).
Did you eat out?
Eating out was not regular fare in the
1970s and 1980s in Amritsar. Only when
guests visited, and they weren’t from our
city, we would take them out for kul-
chas, chaats, or chicken. I was born in
Lawrence Road, and most of the popular
street foods I grew up eating were from
there.
There was pithi ki puriwala, barbeque
chicken, chicken makhani and more. If
you go to the old city or inner city even
today, there are iconic dhabas selling las-
sis that should be eaten and not
sipped, kulchas… every single one of these
food spots has its own technique and that
gets passed on through generations.
What’s your favourite street food?
When I say kulcha, one would assume
it’s the ghee-laden stuffed Amritsari kul-
cha. But I am talking about bowalla kul-
cha, translated as stinky kulcha. It’s double
fermented, baked and eaten with pakoras,
meats and chickpeas. These are differ-
ent kulchas which you only get in Amrit-
sar. There used to be a shop on Lawrence
Road that served tikkas with goat meat cut
very small and simmered in caramelised
onions with spices. They were served with
those kulchas. So, bowalle kulchas are my
travelling around the world, my idea of Heat ghee in a heavy kadhai (or wok), over
restaurants changed. But my heart would medium low flame. Add semolina and
always be in those small places in Amrit- cook stirring constantly till semolina turns
sar. When I create menus, I always bring in an even golden color. Add the almond
inspiration from there. powder and cook for 1 more minute. Care-
fully stir in jaggery syrup and raisins and
GUD KA HALWA (POPULAR AT mix very well to ensure that no lumps are
KANHA SWEETS, AMRITSAR) formed. Cook the mixture till all the syrup
Recipe by Vikas Khanna is absorbed and mixture achieves the con-
Ingredients: sistency of thick pudding. Cover and cook
Three-fourth cup jaggery (grated) for 2 minutes, then remove from flame.
1 cup water Serve warm.
2 tablespoons whole milk
Half teaspoon saffron (powdered) Inheritance of Flavours is a series in which
1 cup ghee chefs, restaurateurs, hospitality experts and
1 cup semolina professionals talk about their food memo-
3 tablespoons almond powder ries and tastes of home.