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

122

Monday, May 23, 2022

Centre may cut revenue Sebi aims to tighten disclosure

livemint.com spending, borrow extra uP1 rules on fund manager exits uP1
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HyDERABAD, CHANDIGARH*, PUNE* VOL. 16 NO. 122

Monday, May 23, 2022

livemint.com

mint primer QUICK EDIT

What does India’s Belated

inequality report relief The government, over the
card have to say? weekend, took some measures
to ease inflationary pressures. It
slashed the central levy of excise
JAGADISH SHETTIGAR & POOJA MISRA duty on petrol and diesel by ₹8
Is inequality getting worse in India, and what does it mean for the and ₹6, respectively, which will
poor in the country? These are some of the questions that arise bring down their prices by ₹9.5
following the release of the State of Inequality in India report by the and ₹7. It also extended a ₹200
Institute for Competitiveness. Mint examines the report’s findings. subsidy per gas cylinder to 90
million beneficiaries and cut
Within reach import duties on certain inputs
The State of Inequality in India report shows a declining trend in share of
for plastic products and steel.
income of the top 10% and a rise in access of households to necessities. There were a few other steps
Share in income (in %) 2015-16 2019-21 % households with these facilities too. Broadly, these seem aimed
40 0 25 50 75 100
at cooling down prices to shield
Top 1% Top 10%
Electricity access
household and business bud-
30 gets from cost escalation caused
Improved sanitation access by a mix of factors, including the
20 Improved drinking water Ukraine war’s fallout on food
and fuel prices globally. Fuel tax
Clean cooking fuel
relief was long overdue. Much
10
Bank and saving accounts damage may have already been
done. Cost-push effects of high
0 Mobile phones
2017-18 2018-19 2019-20 fuel bills appear to have set in, as
Source: PLFS and NFHS (via State of Inequality in India Report) seen in the broad rise of Indian
SATISH KUMAR/MINT inflation. Perhaps the Centre
What does the What are some of was waiting for confirmation of
1 report say?
The report states that while
2 the findings?
As per Periodic Labour Force
robust GST collections before it
could bear a fuel-excise loss of ₹1
income deprivation can increase Survey (PLFS) 2019-20, the top 1% trillion, as estimated. Better
probability of descent into poverty, earns almost thrice as much as the forecasts could have allowed
a multidimensional understanding bottom 10%. It also states that top such a response months ago
is important to assess the degree of 10% earn more than 30% of total when inflation was flashing red.
deprivation in terms of lack of income, while bottom 50% hold Still, it’s better late than never.
basic necessities, such as quality about 22% of the total income.
Even at this stage, signals of
education and healthcare, which While the Labour Force
can improve living standards. Participation Rate (LFPR) has seen action against rising prices from
Raising minimum income, a rise from 49.8% in 2017-18 to India’s fiscal as well as monetary
introducing a universal basic 53.5% in 2019-20, female LFPR authorities should help contain
income scheme and an urban still remains low and has increased inflationary expectations.
equivalent of the MGNREGS, from 23.3% to 30% in the same
allocation of a higher percentage period. Also, a worrisome 85.9% of
of expenditure towards social people from rural areas and 80%
services, equitable access to from urban areas are not covered
education and creation of more
jobs with long-term growth are
under health schemes, and
household income and savings
MINT METRIC
some of its key recommendations. remain the chief financing source. by Bibek Debroy

In Churu, a groom got drunk

3 What is the trend
in poverty ratio?
World Bank says India has made progress
And partied till he was sunk.
in reducing poverty since the 2000s.
As he tarried, the bride was wed
Poverty headcount ratio as a percentage of To someone else instead,
the population has declined from 37.2% in
2004 to 13.6% in 2015. Aided by higher
The original baraat in blue funk.
economic growth, over 90 million people
improved their living standards between
2011 and 2015. However, 176 million
Indians were still below the poverty line. QUOTE OF THE DAY
While consumers are seeking
What helped narrow Do investments rise
4 the poverty ratio?
In short, economic reforms. For
5 with higher incomes?
If the poor become better-off
comfort, they are also opting for
energy efficient products. There are
example, economic liberalization while the rich become richer, interesting trends emerging from
removed the ceiling on salary, should that be a matter of categories beyond ACs and
giving employees a chance to earn concern? Marginal propensity to
in proportion to their productivity, save is high in upper income levels refrigerators, as entertainment,
unlike pre-reforms era when their while marginal propensity to hobbies and personal care take
return was limited to the ability of consume is more at the lower precedence during summer.
trade unions to negotiate. Also, rung. One cannot spend beyond a
robust economic and inclusive limit. The surplus goes into
growth have aided socio-economic savings, which, in turn, get
development. Thus, despite transformed into increased
inequality, earnings at lower levels investments for the economy AVIJIT MITRA
MANAGING DIRECTOR &
have improved drastically. through financial intermediaries.
CEO, CROMA
Growing income inequality should Jagadish Shettigar and Pooja
worry if the rich become richer Misra are faculty members at
while the poor become poorer. Bimtech.

STO C K TA L K DOWNLOAD THE

MINT APP
JK LAKSHMI CEMENT LTD PIDILITE INDUSTRIES
We estimate the cur- Changes to our
rent low leverage model have resulted
(net debt/Ebitda 0.7x in a 5% lower EPS
BUy NEUTRAL
in Mar-22) and estimate for Pidilite
TARGET PRICE TARGET PRICE
healthy cash flows of
₹735 JK Lakshmi
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FY23 as we factor in
CURRENT PRICE CURRENT PRICE
₹493.70 Cement Ltd to keep ₹2,138.90 near-term impact
its return on equity at material cost hike.
a healthy level and net debt/Ebitda Once costs stabilize, earnings growth
under 1x. could be healthy beyond FY23.
HDFC SECURITIES (ON 20 MAY) MOTILAL OSWAL (ON 19 MAY)

LUPIN LTD BHARTI AIRTEL

We cut our FY23E We maintain “buy” SUBSCRIBE TO
earnings per share recommendation OUR NEWSLETTER
(EPS) estimates by for Bharti Airtel TOP OF THE MORNING
HOLD BUy
46% and FY24E EPS stock on expectation
TARGET PRICE TARGET PRICE
by 35% to factor in of improvement in
₹600 lower margins of
₹905 the company’s
CURRENT PRICE CURRENT PRICE
₹638.40 Lupin Ltd. Margins ₹687.70 cash flows and
in base business of return ratios as
the firm continue to disappoint, and Arpus improve with tariff hike and
recovery remains elusive. premiumization of subscriber base.
PRABHUDAS LILLADHER (ON 20 MAY) YES SECURITIES (ON 19 MAY)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
 PLAIN FACTS

Watch for this week:

Monsoon, forex, IPL
BY PRAGYA SRIVASTAVA, NANDITA VENKATESAN, & TANAY SUKUMAR

E very Monday, Mint’s Plain Facts section features key data releases and events to look for in the coming week. All eyes
will be on the weekly foreign exchange reserves data, which is under pressure because of the volatility in rupee, while
Indonesia’s decision to lift the ban on palm oil exports could lead to a correction in prices. An early onset of the mon-
soon will provide relief from extreme heat and may bode well for the Indian economy.

Rupee volatility to keep India's foreign

exchange reserves under pressure
1 Forex Reserves
Forex reserves in $ billion THE RUSSIA-UKRAINE war has given India cause for much
660 worry. India’s heavy reliance on crude oil prices, which are still
trading above $100 per barrel, has caused severe risk to the
593 rupee and current account deficit. India’s foreign exchange
620 reserves, which had hit $642 billion in September, are acting as
a buffer against the external risks, leading to a significant
decline. In the week ended 13 May, forex reserves had fallen to
580 $593 billion.
The pressure on the Indian currency and, consequently,
forex reserves, is likely to continue because of the continuing
540 heavy outflow of foreign investors along with the inflationary
pressures of the war in Europe. The forex reserves had already
recorded the 10th weekly drop in the previous week and the
500
Mar May decline likely continued in the week ended 20 May, data for
2021 2022 which is due on Friday, as the rupee continues to hover near a
Source: CMIE
record-low.

2 Indonesia’s Palm Oil Exports Indonesia's decision to withdraw ban

on palm oil export will offer relief
INDONESIA, THE world’s largest producer of palm oil, has Top five countries from where India imports palm oil,
decided to lift the ban on the export of the commodity from Apr 2021 to Feb 2022 (in $ billion)
Monday. The move is likely to bring down the prices of edible 4
oils around the world. More importantly, it comes as a big relief 3.7
for India as the country is already facing sharp inflationary
pressures from edible oils and is also heavily reliant on
Indonesian palm oil to meet domestic needs. In April 2021 and
February 2022, Malaysia was the biggest supplier of palm oil,
but Indonesia still accounted for 40–45% of total palm oil
imports.
As palm oil is used as raw material in several household goods
such as soaps and biscuits, a shortage would have intensified the 0.6
0.4 0.3
cost of manufacturing these goods. The short-lived ban, which
began on 28 April, led to a sharp surge in prices. However, the
lifting of the ban is now unlikely to ease overall inflation as other Malaysia Indonesia Thailand Singapore Nepal
factors may keep prices elevated. Source: Commerce ministry

3 Early Onset Of Monsoon Monsoon likely to hit western coast earlier

than usual, bringing some cheer
INDIA MAY get some respite from the heatwave that Date of onset of monsoon
has prevailed over the past few weeks. The southwest May June
monsoon could reach Kerala’s shores on Friday, which 25 26 27 28 29 30 31 1 2 3 4 5 6 7 8
is four days earlier than the normal onset date of 1 2010
June, according to the India Meteorological 2011
Department. 2012
The monsoon entered the Andaman Sea last week, 2013
2014
with the favourable weather conditions being
2015
attributed to cyclone Asani. The four-month seasonal 2016
rains are crucial for India’s agrarian economy. It 2017
accounts for 70% of India’s annual rainfall and 2018
irrigates more than half of India’s cropland. With the 2019
country reeling from the impact of high inflation, 2020
2021
particularly elevated food prices, improved sowing
2022*
may also lead to higher yields. This, in turn, could *forecast
soften runaway inflation levels. Source: IMD

The best teams in IPL history failed to

reach the final four this season 4 IPL Final
IPL teams over the years THE INDIAN Premier League’s (IPL’s) 15th edition enters its
Won Finished runner-up Finished 3rd or 4th business end this week, with the final match to be played in
Chennai Super Kings 4 5 2 Ahmedabad on Sunday. The first qualifier is between table-
Mumbai Indians 5 1 3 toppers Gujarat Titans (GT) and Rajasthan Royals on Tuesday,
Kolkata Knight Riders 2 1 4
Royal Challengers and the winner will seal its spot in the final. This will be followed
3 4
Bangalore
1 5
by an “eliminator” between Lucknow Super Giants (LSG) and
Delhi Capitals
1 1 4 Royal Challengers Bangalore on Wednesday. The loser in the
Sunrisers Hyderabad
Rajasthan Royals 1 3 first qualifier will get another shot at the final when it plays the
Punjab Kings 1 1 winner of the eliminator on Friday. This will then lead us into the
Deccan Chargers 1 1 final.This is the first season when none of the three most succ-
Gujarat Lions 1 essful teams in IPL history have reached the last four, whereas
Rising Pune Supergiant 1
both the new franchises—LSG and GT—have made it in their first
Excludes the two teams that have never reached the final four (Kochi Tuskers
Kerala and Pune Warriors India), and the two newcomers this year, both of
attempt. Jos Buttler and Yuzvendra Chahal of Rajasthan Royals
which have made it to the top four (Gujarat Titans and Lucknow Super Giants). are the top contenders for the orange and purple caps so far,
Source: Mint research
given to the leading run-scorer and wicket-taker.

5 In Other News Uttar Pradesh may look to focus

on capex to revive economy
THE UTTAR PRADESH government is set to present its first Total size of annual budget, in  trillion
full budget since re-election on Thursday. Both the governor’s Capital expenditure Revenue expenditure
address and the budget would be tabled digitally through the 6
National e-Vidhan Application (NeVA) centre, an application
developed by the Centre for paperless functioning of legislatures. 5
The budget will be presented against the backdrop of Uttar
4
Pradesh emerging from the covid-19 pandemic that hit the state
hard. The state’s finance minister, Suresh Khanna, said that the 3
budget will focus on “infrastructure creation, jobs and youth”.
Elsewhere, Prime Minister Narendra Modi will participate in 2
the third Quad leaders’ summit in Tokyo on Tuesday. Modi is also
1
expected to hold bilateral talks with US President Joe Biden. The
Quad is an informal strategic alliance formed in 2007 between 0
India, Japan, the US, and Australia to ensure better cooperation 2012-13 ‘21-22* ‘22-23**
among the four Indo-Pacific nations and is commonly viewed as a * Revised estimates used ** Budget estimates used
Source: CMIE
response to China’s rising power.
pragya.s@livemint.com AHMED RAZA KHAN/MINT

PEANUTS by Charles M. Schulz

 NeW DelHI, MUMbAI, bENGALURU, KOLKATA, CHENNAI, AHMEDAbAD, HYDERAbAD, CHANDIGARH*, PUNE* VOL. 16 NO. 122 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 10.50 (FOR DELHI & NCR) 18 PAGES

Monday, May 23, 2022

Investment mistakes to avoid Foreign outflows, falling yuan

livemint.com in hard times uP10 test China’s markets uP8

SENSEX 54,326.39 0.00 NIFTY 16,266.15 0.00 DOLLAR ₹77.55 ₹0.00 EURO ₹82.14 ₹0.00 OIL $112.55 $0.51 GOLD ₹50,544 ₹0

Govt may cut revenue Sebi aims to tighten Apple looks

to step up
DON’T MISS

disclosure rules on
spend, borrow extra fund manager exits
production in
India, SE Asia
Yang Jie
MINT

Cuts in fuel duty, higher fertilizer sops may upset Centre’s fiscal math Jayshree P Upadhyay feedback@livemint.com
jayshree.p@livemint.com
NHPC in talks with state govts to

A
MUMbAI pple Inc. has told some
Gireesh Chandra Prasad & of its contract manu- set up 20.8GW of storage plants
COurSe COrreCtION
T
Rituraj Baruah he Securities and facturers that it wants NHPC Ltd plans to set up 20.8GW of storage
Exchange Board of India to boost production outside plants at an investment of around ₹62,400 cr
NEW DELHI will soon announce dis- China, citing Beijing’s strict in Maharashtra, Andhra Pradesh, Odisha,
closure norms for asset manage- anti-Covid policy among other Jammu and Kashmir, Jharkhand and

T
he government may bor-
row more than budgeted
this fiscal, reduce revenue
expenditure, or do both,
as the recent duty cuts and
subsidy hikes threaten to upset its
fiscal math, an official aware of the
discussions in the government said.
The additional borrowing
requirement will be worked out later
as the fiscal year has just started, the
person said on the condition of ano-
nymity.
The government expects the tax
cuts on fuel over the weekend to cool
inflation, which shot up to an eight-
year high in April.
Following a fertilizer subsidy hike
in April, the Union government on
Saturday reduced duties on petrol,
diesel and imported inputs to make
steel and petrochemicals.
However, these measures to tame
inflation also mean the gross market
borrowing of ₹14.3 trillion budgeted
for FY23 won’t be enough for the
year.
“The additional fertilizer subsidy
announced in April was roughly bal-
ancing against the expected addi-
tional tax revenue collection this fis-
cal. But this time, with the excise and
import duty cuts, the government
ment companies, annoyed with
the way Axis Mutual Fund has
handled the suspension and the
eventual termination of two
fund managers allegedly
involved in front-running.
“Sebi is working on when and
how disclosures should be made
in such circumstances,” a senior
regulatory official said on the
condition of anonymity. “Sebi
believes the more disclosures,
the better. So, something similar
(to norms applicable to listed
companies) would be made
BALANCING ACT mandatory for fund houses if
GOvt sees tax cuts on tHe cuts mean govt’s FISCal deficit may fund managers are asked to exit,
fuel over the weekend budgeted borrowing overshoot the target or the fund house/specific
cooling inflation will fall short in FY23 in the current fiscal schemes go through some major
management changes. Sebi’s
mutual fund department is
has to cut certain revenue expendi- loss because of excise duty cut on working on something. These
ture or go for additional borrowing auto fuels, besides an extra ₹1.1 tril- new norms will be announced
or do both,” the official said. lion in fertilizer subsidy outgo, in soon,” the person said.
In April, the government addition to the ₹1.05 trillion subsidy Axis Mutual Fund last week
announced higher nutrient subsidy announced in the budget. terminated two fund managers—
rates for the kharif season to absorb Saturday’s cooking gas subsidy Viresh Joshi and Deepak Agarwal,
import costs, which have soared due announcement will add an addi- who were suspended on 4 May on
to the war in Ukraine, given India’s tional ₹6,100 crore to the subsidy charges of alleged misconduct,
complete import dependence on bill. pending investigations.
some fertilizers. With growth projections for India The fund house issued two
Finance minister Nirmala Sithara- statements announcing the
man pointed to a ₹1 trillion revenue TURN TO PAGE 6 change in fund managers, but the
Sebi is said to be annoyed with
how Axis Mutual Fund handled
an alleged front-running case.
disclosure lacked details about
why these changes were made.
The statement issued on the
termination of their services
did not shed any light on
whether Axis Mutual Fund had
completed the suo-moto inves-
tigation and on what grounds
were they terminated, leaving
room for speculation on
whether they were front-run-
ning or there were kickbacks
and on the size of the manipu-
lation.
“Axis started the suo-moto
investigations against the two
officers in the month of March,
but it suspended them and
issued a press statement only
after there was media scrutiny.
Considering that Sebi is work-
ing on industry-level changes,
Axis will also be forced to issue
TURN TO PAGE 6
reasons, people involved in the
discussions said.
India and Vietnam, already
sites for a small portion of
Apple’s global production, are
among the countries getting a
closer look from the company
as alternatives to China, the
people said.
More than 90% of Apple
products such as iPhones,
iPads and MacBook laptops
are manufactured in China by
outside contractors, according
to analysts. Apple’s heavy
dependence on the country is
a potential risk because of Bei-
jing’s authoritarian Commu-
nist government and its
clashes with the U.S., analysts
have said.
Any move by Apple, the
largest U.S. company by mar-
ket capitalization, to empha-
size production outside China
could influence the thinking of
other Western companies that
have been considering how to
TURN TO PAGE 8
Mizoram to aid India’s energy transition,
chairman Abhay Kumar Singh said. >P2
Infosys extends chief executive
Salil Parekh’s term by five years
Infosys, India’s second-largest software services
company, has reappointed Salil Parekh as its chief
executive and managing director for another five
years through March 2027. The decision was taken
at a board meeting of the company on Saturday,
Infosys said in a filing to the stock exchanges. >P3
Global oil firms post big profits
but Indian OMCs stare at losses
Indian oil refiners are staring at huge losses as
they have failed to pass on higher costs of crude
to consumers, even as global oil giants report
outsized profits. A Mint compilation of earnings
data shows some global oil giants have recorded
their best profit figures in years. >P4
Centre imposes export duty on
11 iron and steel intermediates
The finance ministry has notified export duties on
11 iron and steel intermediates and lowered
import duties on three key raw materials for steel
production and three inputs for making plastic
items as part of a broader effort by the Centre to
control inflationary pressures. >P2

Jindal arm plans defence foray, Now, government to issue

looks to build armoured vehicles health IDs to newborns
Subhash Narayan only make the surface of the Priyanka Sharma tunity to track their kid’s
subhash.n@livemint.com vehicle bullet-proof, but will priyanka-sharma@livemint.com growth and development right
NEW DELHI also prevent rusting of the body NEW DELHI from their birth. It was also
in extreme climatic conditions. observed that when a baby is

J N
SL Lifestyle Ltd (JSLL), a Steel for this product will ewborn babies and born, he/she does not have any
unit of India’s largest inte- come from the parent Jindal young children will be ID or document, and generat-
grated stainless steel pro- Stainless Ltd and will be fabri- issued their own ing a birth certificate for a baby
ducer, plans to build cated at JSLL’s facilities. Ayushman Bharat Health may take up to 30 days. Now,
India is seeking amendments in the formula to calculate a country’s armoured and bullet-proof Though the company is sup- Account (ABHA) numbers, the idea is to enable parents to
food subsidy limit, which current WTO rules state should not breach 10% vehicles for the country’s plying components and fabri- also known as health IDs, create an ABHA ID for their
of the value of production based on the base price of 1986-88. ALAMY armed forces. cated stainless steel to defence allowing parents to track their babies by integrating their
The company, along with its sector customers, armoured children’s health records. own ABHA number with the

India may push partner, is testing the prototype

of the new vehicle, and once
the product is approved, it will
Rajesh Mohata, chief executive
and executive director, JSLL.
vehicles would be its first big
push in the segment.
The defence ministry has set
The National Health
Authority is developing a
mechanism under which par- The ABHA number will enable
system. This will empower
parents to have access to their
child’s health record and gen-

for permanent
start manufacturing parts of
this vehicle at a new plant
located near its existing facility
near Gurugram.
a revenue target of ₹1.75 trillion ents can generate ABHA num- parents to upload all personal erate a longitudinal health his-
director, JSLL, said in an inter- from aerospace, defence goods bers for their newborns and health records from birth. MINT tory right from the birth of
view. “India is looking to and services by 2024. young children. their baby,” said a government
become atmanirbhar (self-reli- A large portion of this will The ABHA number will POSHAN Abhiyan, Reproduc- official familiar with the mat-

food stock rules “We are developing a host of

Ravi Dutta Mishra by a developing nation.
ravi.dutt@livemint.com In essence, developing
NEW DELHI countries cannot be taken to
arbitration as they are pro-
products for the defence sector,
but most are at the prototype or
testing stage. In a year’s time,
this line will become stronger
with the company looking to
become a major supplier of
ant), and our initiative in
defence is aimed at providing
this.”
“We will be submitting the
first prototype of a bullet-proof
stainless steel armoured vehi-
cle in 42 weeks from now. Pro-
come from the private sector
either through alliances with
ordnance factories or on their
own.
JSLL will also supply stain-
less steel water tanks for border
areas and manufacture bullet-
enable parents to upload all
personal health records from
birth, as well as all healthcare
benefits availed, ranging from
public health programmes to
insurance schemes.
Currently, only individuals
tive and Child Health, and
Rashtriya Bal Swasthya Kary-
akram, catering to young chil-
dren and newborns.
These programmes monitor
the development of children
from birth and address child
ter, requesting anonymity.
In the later stage, the system
will also accept the birth certif-
icate of the child, along with
other ID documents such as
Bal Aadhaar, as and when
those are available to the par-

I
ndia may seek a permanent
solution to the issue of pub-
lic stockholding for food
security during the 12th World
Trade Organization (WTO)
ministerial conference start-
ing on 12 June in Geneva.
According to current WTO
rules, a member country’s
food subsidy bill should not
breach 10% of the value of pro-
duction based on the base
price of 1986-88, but India is
seeking amendments in the
formula to calculate the food
subsidy limit.
tected under the peace clause. equipment to the defence sec- duction details will be worked proof stainless steel barricades. above 18 years of age are enti- healthcare issues such as mal- ents.
However, the clause is applica- tor, and entities that already out later after defence gives Mohata said that once tled to enrol for ABHA cards. nutrition and childhood obe- “Once a baby is born in a
ble till a permanent solution is have large-scale presence in orders post thorough testing,” defence orders are received, To be sure, the central gov- sity. hospital, there are multiple
reached. the sector,” Rajesh Mohata, Mohata said. ernment runs several pro- “The need was felt that par-
“Currently, the peace clause chief executive and executive High-grade steel would not TURN TO PAGE 6 grammes and schemes, such as ents should also get an oppor- TURN TO PAGE 6
only includes the government
programmes started before
2013. India wants government
programmes started after 2013
to be included in the calcula-
tion,” the official said.
Hybrid work is driving more women out of the workforce
Queries sent to the com-
merce and industry ministry Devina Sengupta Then we moved to a culture against just 60% of women care facilities is leading to the
spokesperson remained unan- devina.s@livemint.com where calls were done any time compared with pre-pandemic drop in diversity numbers,”
swered until press time. MUMbAI of the day. Although now one is days. Abraham added.
Last year, India invoked the transitioning back to the office, “Tentative evidence shows The last three quarters have

“We are facing pressure
from other countries to reduce
the subsidy given to our farm-
ers. But the subsidy we give is
far less than what the US and
EU give. Indian government
subsidy to farmers comes in at
$300 per farmer, compared to
$40,000 per farmer in the
US,” an official said.
India is also seeking to add
government programmes that
were started after 2013 in the
peace clause agreed in the Bali
ministerial meeting.
Under this clause, WTO
members agreed to refrain
from challenging any breach
of the prescribed ceiling of 10%
P
peace clause at the WTO for
exceeding the 10% ceiling on
the support it offered to its rice
farmers.
However, government offi-
cials said that India had not
breached the ceiling for wheat,
the export of which was
banned earlier this month.
India had informed WTO
that the value of its rice pro-
duction in 2019-20 stood at
$46.07 billion and that subsi-
dies worth $6.31 billion, or
13.7%, were given, above the
10% limit.
India is not the only country
TURN TO PAGE 6
ressures of the hybrid
work regime are prompt-
ing more women to quit,
taking a toll on India Inc.’s
attempts to foster workplace
diversity. Among the primary
reasons: Lack of childcare infra-
structure in offices and pressure
from schools for dedicated
focus on child’s education as in
the days of online schooling.
Diversity analysts note that
many companies moving from
work-from-home to hybrid
work continue to expect workers
to be available at all times, even if
they physically attend the office.
“Timelines of work were
scheduled before the pandemic.
there is an expectation that
work-from-home will continue
without any cutoff time,” said
Mitali Nikore, an economist.
Despite overall employment
in India nearing pre-pandemic
levels by January, employment
among urban women fell 10%
between January and April
2022, against a 2% increase for
urban men, data from the Cen-
tre for Monitoring Indian Econ-
omy (CMIE) showed. Accord-
ing to Nikore’s estimates, an
analysis of historical trends
shows urban women’s employ-
ment levels may fall another
10-15% in the coming months.
The exits come even as many
that educated women have not
returned, which means this is a
distress-led recovery and not a
healthy one. Those in the lower
economic strata working in the
unorganized sector have come
back,” said Abraham.
She has observed that in the
hiring frenzy that is taking
Employment among urban women fell 10% between January and place in many sectors such as
April, against a 2% increase for urban men, data from the Centre IT, retail, ITES and pharma, in
for Monitoring Indian Economy showed. MINT families where men are earning
very high packets, women are
companies create roster sys- get acclimatized to the work backing out.
tems where employees need to culture of the new firm. “As the family’s net worth
attend the office a few days According to Rosa Abraham, increases, more women in the
every week. In many sectors, associate professor at Azim household are stepping back.
there is more emphasis on Premji University, 90% of the Alongside, a combination of
newcomers attending offices to male workforce is back to work poor infrastructure and child
seen a surge in hiring, where
India Inc. is making up for the
two years of a covid-induced
lull in manpower numbers.
But, as of now, it is an
employee’s market, and they
are being wooed with high pay-
ing offers, counteroffers,
bonuses and hikes.
“It is a Catch-22 that is hap-
pening, especially in tech
recruitments. Women who had
taken a career break are com-
ing back, but less than 10% of
our women candidates are will-
ing to get back to a physical
office,” said Saran Balasunda-
TURN TO PAGE 6
02 MONDAY, 23 MAY 2022
NEW DELHI ECONOMY & POLICY LIVEMINT.COM

STRAIGHT
F O R WA R D
NHPC in talks with states for Delhi gets
its unified
SHASHI SHEKHAR

Respond to this column at

feedback@livemint.com
₹62.4k cr storage plants push MCD after
a decade
PTI
WILL INDIA MAKE These plants may come up in Maharashtra, Andhra, Odisha, J&K, Jharkhand and Mizoram
feedback@livemint.com

HISTORY OR BE T
he unified Municipal
Corporation of Delhi
Rituraj Baruah & Utpal Bhaskar According to the Central Electricity (MCD) formally came
Authority, India will need 10GW of into existence on Sunday, with
ENGULFED BY IT? NEW DELHI
hydro-pumped storage plants by 2030 IAS officers Ashwani Kumar

S
tate-run NHPC Ltd plans to set and 27GW of battery storage with four and Gyanesh Bharti assuming
up 20.8 GW of pumped stor- hours of storage. charge as the new civic body's

W
hile transferring the Gyanvapi legal dispute to the Dis- age plants at an investment of Mint earlier reported India’s plans to special officer and commis-
trict Judge of Varanasi, the Supreme Court ordered around ₹62,400 crore in de-licence the building of standalone sioner, respectively.
that the case be heard on a priority basis. The apex Maharashtra, Andhra Pradesh, battery storage systems; allow their sale, The MCD was trifurcated in
court will hear the case in the second week of July, and the district Odisha, Jammu & Kashmir, Jharkhand lease or hire; and permit the sale of 2012 during Congress leader
administration must maintain the status quo until then. and Mizoram to aid the country’s energy stored power through power-purchase Sheila Dikshit's tenure as the
This is merely the start of a judicial battle, and the matter will not transition, according to the top execu- agreements on exchanges. chief minister. It is now reuni-
end here at Gyanvapi alone. From Mathura’s Shri Krishna Janma- tive at India’s largest hydropower firm. A discussion paper on the policy also fied by merging the three civic
bhoomi to Qutub Minar, Taj Mahal and Bhojshala, many disputes are The idea is to store cheap green said the government could waive power bodies - North, South and East
being pushed forward from the back burner. Are we about to experi- power during off-peak hours by raising transmission fees to sell and purchase municipal corporations.
ence another period of turbulence like the one we had from 1989 to water to a height and then releasing it electricity from these storage facilities. With the special officer and
1992? Those who believe that just one religion is to blame for every- into a lower reservoir to generate elec- The Union budget for FY23 proposed the new commissioner taking
thing should remember that in our country, members of various tricity when demand increases. Such including energy storage systems such charge, the exercise to reshuf-
faiths used to fight each other long before Jesus and Muhammad pumped storage plants help integrate as dense charging infrastructure and fle and reorganise the munici-
were born. According to legend, Chanakya left his disciple emperor renewable energy into the power sys- The idea is to store cheap green power during off-peak hours by raising water to a height grid-scale battery systems in the harmo- pal staff will begin.
Chandragupta and his court for a brief period. Reason? The youthful tem, as large storage facilities can help and then releasing it into a lower reservoir when demand increases. REPRESENTATIONAL/AP nized list of infrastructure. The erstwhile SDMC's cen-
ruler had been swayed by the Jain muni Bhadrabahu. keep power grids stable since electric- “Energy storage systems will benefit tral establishment department
Returning to Gyanvapi. Aurangzeb, who destroyed Lord ity is produced intermittently from state PSU. and 6.6GW in Andhra Pradesh. Odisha, generating companies, distribution will act as the nodal department
Mahadev’s temple, contributed financially to the construction clean energy sources such as solar and NHPC has approached Maharashtra Jammu & Kashmir and Mizoram have a companies of the states, grid operators, for the transfer and posting of
of Kashi’s Aparnath Math and Tekra Math. The demolition of the wind. to prepare pre-feasibility reports and proposed capacity of 2.5GW, 1.65GW and other players in the electricity value officials and staff for the unified
Vishwanath temple and the construction of a mosque were “We are working a lot on new detailed project reports. and 1GW, respectively. This assumes chain. They will facilitate peak shifting, MCD. According to municipal
opposed by Baba Aparnath. So, what made this king so humble? pumped storage plants. As part of this, “We are doing some pre-feasibility significance given that NHPC has an peak shaving, ramp up/ramp down, and officials, Kumar will be the top
Did he intend to confuse by eliminating one centre of religion our discussions are ongo- installed power genera- frequency control in the system and authority in handling the civic
while extending royal support to others in order to put an end to ing with Andhra Pradesh ENERgY TRANSITION tion capacity of 7.071GW enhance the utilization of the Transmis- affairs till a new House is
the rebellion? Or was he yearning for his zenith in a way? for signing an MoU (mem- through 22 projects. It has sion System. elected. He said providing the
We should recall that Aurangzeb made a proclamation when he orandum of understand- THE pumped OF the planned ODISHA, J&K and another 7.539GW capac- “ESS (energy storage system) is con- best civic amenities to the pub-
was a prince. “Abul Hasan (the warlord posted in Varanasi) should ing). These plants are in storage plants help
integrate renewable
plants, 9.05 GW will
be in Maharashtra
Mizoram have a
proposed capacity of
ity under construction sidered essential for a smooth energy lic and improving sanitation
know this... it has been decided by our holy legislation that existing Andhra Pradesh,” said energy into the and 6.6GW in 2.5GW, 1.65GW and and projects totalling transition from coal-based to renewable services will be among the
temples should not be demolished and new temples should not be NHPC chairman and power system Andhra Pradesh 1GW, respectively 7.652GW in various sta- sources and to a cleaner environment. focus areas.
established,” says the text, which can be found in the Bharat Kala managing director Abhay ges of clearance. Highlighting the elements of the pro- "Sanitation is a basic and
Bhawan of Banaras Hindu University. “Some people are tormenting Kumar Singh. India has an installed posed policy, (power minister) R.K. obligatory function of any civic
some brahmins in Banaras and its neigh- As the proposed projects in Andhra reports for similar projects in Madhya renewable energy capacity of 156.6GW Singh stated that storage would hence- body and its impact is always
Are we about bouring areas due to malice and enmity, Pradesh are under the New & Renewa- Pradesh, Maharashtra, Jharkhand and and has set an ambitious target to raise forth be a part of the Renewable Pur- clearly visible on ground. So,
to experience according to news that has recently ble Energy Development Corp. of AP Odisha,” Singh added. this to 500GW by 2030. Around 96GW chase Obligation,” union power minis- my priority will be to further
reached our very ideal and holy court. In Ltd, NHPC has approached the state Of the planned pumped storage has been identified as a potential capac- try said in a 27 January statement. improve sanitation services in
turbulence addition, the temple’s caretakers seek to government for a joint venture with the plants, 9.05 GW will be in Maharashtra ity for hydro pump storage schemes. rituraj.baruah@livemint.com the city," Kumar told PTI.
like the one remove the Brahmins from their posi-
we had from tions, which could cause discontent
1989 to 1992? among the sect. That’s why its my royal
order that as soon as the Farman appears,
you will be warned that in the future,
Brahmins and other Hindus will not be subjected to any form of injus-
₹500 cr infra projects Export duty imposed on 11 iron, steel inputs
tice. In this way, people can all go about their work in peace and wor-
ship in the kingdom given to us by the grace of Allah (which will last
forever). This should be considered as soon as possible.”
to route through NPG Gireesh Chandra Prasad
gireesh.p@livemint.com
Sunday, showed a separate
order.
You’ve probably figured out the politics of demolition and con- NEW DELHI Finance minister Nirmala
struction by now, but the story doesn’t end there. PTI ponents of logistics or infra- Sitharaman said in a tweet that

T
Thousands of temples, including the three holiest holy sites of feedback@livemint.com structure connectivity; and he finance ministry has the duty revision on iron and
Hindus, have been razed, and mosques have been built in their whether it has been examined notified export duties on steel and their raw materials

A
stead. As a result, the majority of the country’s people are express- ll logistics and connectiv- by NPG for convergence and 11 iron and steel inter- was meant to tame prices.
ing their sorrow and indignation. How may their feelings be ity infrastructure pro- integration at the conceptuali- mediates and lowered import “We are calibrating customs
healed? During the Ram Mandir movement, LK Advani and Late jects, entailing invest- sation or feasibility study stage. duties on three key raw mate- duty on raw materials and
Ashok Singhal said that if we have Ayodhya, Mathura, and Kashi, ment of over ₹500 crore, would The PM GatiShakti plan rials for steel production and intermediaries for iron and
we will be content and will not make any other such demands. This now route through the network was announced last year with three inputs for making plastic steel to reduce their prices,”
is something that Muslim politicians and religious leaders do not planning group (NPG) consti- an aim to break departmental items as part of a broader effort the minister said in a series of
believe in. Even if they accept this assertion, they think there is no tuted under the PM GatiShakti silos and bring in more holistic by the government to control tweets.
guarantee that over three thousand so-called contentious Muslim initiative with the finance minis- and integrated planning and inflationary pressures. Separately, the government
shrines will remain unaffected in the coming years. The All India try issuing the necessary instruc- execution of projects with a To reduce the cost of is also taking steps to improve
Muslim Personal Law Board has demanded that the Places of Wor- tions and creation of the national view to addressing the issues of domestic production of steel the availability of cement. This
ship (Special Provisions) Act approved on September 18, 1991, be master plan digital platform,an multi-modal and last-mile con- products, import duty on cok- To reduce the cost of production of steel products, import duty is being done through better
implemented as soon as possible. This Act prohibits the conver- official said. nectivities. ing coal and anthracite (high on coking coal and anthracite has been cut to zero. MINT logistics to reduce the cost of
sion of any place of worship and ensures that the religious charac- According to PM GatiShakti is This will help energy coal) has been cut from cement.
ter of the building remains as it was on August 15, 1947. an office memo- aimed at breaking bring down the 2.5% to zero while the same on above 58% iron content. In the a host of petrochemicals with Sitharaman had on Friday
Sure, it’s a case of suspension. There can be a middle ground if we randum of the departmental logistics cost and coke and semi-coke has been case of iron ore pellets, which commercial and industrial expressed concern at the
follow the correct examples from our shared culture and history. department of silos and bring in promote effective brought down from 5% to zero. currently does not attract application has been lowered possible impact the rising
This was done to put an end to a feud in Madhya Pradesh’s Bhojshala. expenditure The import duty on ferro- export duty, a 45% duty has from 2.5% to 1%. The import cost of construction inputs
more integrated and efficient plan-
On Tuesdays, Hindus worship and Muslims offer Namaz on Fridays, dated April 28, a ning of infrastruc- nickel, an alloy containing iron been imposed. In the case of duty on propylene oxide, used can have on infrastructure
however, in the past, a lawsuit was filed to prevent the erection of a revised format execution ture projects. and nickel, has been lowered nine other classes in making items creation at a time the govern-
Saraswati statue and the practice of Namaz there. has been issued of projects ”We have cre- from 2.5% to zero, according to of iron ore and In the case of like foams in fur- ment is pursuing an infra-
Clearly, the problem is not limited to places of worship. We for Public Invest- ated the national an official order. steel intermedi- iron ore and niture, has been structure-investment led
need to bridge a wide divide. For centuries, emperors and politi- ment Board (PIB)/ master plan digital The duty revision is effec- ates, a 15% export concentrates, the halved to 2.5%. economic recovery.
cians have used many methods to create large fissures in society. Delegated Investment Board platform. We have provided tive from Sunday. duty has been export duty has The import duty “Today, the world is passing
Why shouldn’t the country’s responsible citizens and leaders (DIB) project proposals. training to people concerned To increase local availability imposed. This on polymers of through difficult times. Even
been raised to
take action in this regard? The relationship between Japan and "The revised format of the and now we have this manda- of iron ore and a few steel includes flat- venyl chloride as the world is recovering from
US can teach us many things. Once, America responded with PIB/DIB memorandum...will tory provision from the finance intermediates, export duty has rolled products of 50% on all has been lowered covid-19 pandemic, the
atomic bombs to Japan’s attack on Pearl Harbor, but both the apply to all the PIB/DIB pro- ministry. So, now all logistics been raised on one item and iron or non-alloy categories from 10% to 7.5%, Ukraine conflict has brought
countries went on, forgetting any kind of anger. posals for new projects submit- and connectivity projects will imposed on 10 other items steel. showed the order. in supply chain problems and
Here I remember Mahapandit Rahul Sankrityayan. He said ted on or after April 28, 2022," it be approved on the principles afresh. In the case of iron ore To lower the The reduction shortages of various goods.
“Those who do not comprehend history become history itself.” has said. of PM GatiShakti. All those pro- and concentrates, the duty has cost of domestic production of on central excise duty of Rs 8 a This is resulting in inflation
It is now up to us to decide whether 21st-century India wishes to As per the revised format, jects, costing over ₹500 crore been raised to 50% on all cate- plastic products, import duty litre on petrol and Rs 6 a litre and economic distress in a lot
make history or be engulfed by it. proposals should include will be considered by NPG," the gories, up from 30% that is on naphtha, a hydrocarbon on diesel announced on Satur- of countries,” the minister
Shashi Shekhar is editor-in-chief, Hindustan. Views are personal whether the project has com- official said. now applicable on lumps which goes into production of day are also effective from said.

EESL to lease out EV charging infra ops, to set up 1,800 more points CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Rituraj Baruah its charging infrastructure. vehicle would travel after full Municipal Corporation (AMC) press time. suggestions or complaints
rituraj.baruay@livemint.com An official aware of the charge of its battery; now the and Greater Hyderabad Under the Centre’s National about errors.
NEW DELHI development said that under concern has turned to where Municipal Corporation Mission on Electric Mobility
Readers can alert the
the plan, the company will set one can charge and that is (GHMC). launched in March 2018, EESL
newsroom to any errors in the

S
tate-run Energy Effi-
ciency Services Ltd
(EESL) is set to lease out
operations of its electric vehi-
cle charging infrastructure
across the country.
The company, which has set
up more than 400 charging
points, has floated a tender for
operations of charging points
across 1,800 locations going
forward. Many of the existing
charging points are run by
charging point operators.
The company plans to com-
pletely exit the operations of
up the charging points and
lease out operations across
1,800 locations.
“We have a tender open for
1,800 locations across the
country. Earlier we were oper-
ating also. Now we will not get
into operations. We will pro-
vide the platform and people
can come in, because now the
purpose has been solved. Our
purpose was the adoption,”
the official said.
He said the idea behind leas-
ing is for EESL to work as an
asset-light organisation, now
where the business models are
coming up.”
Over the past few years,
EESL has been developing
electric vehicle charging infra-
structure and has signed
agreements with several
stakeholders across munici-
palities for conducting loca-
Many of the existing charging points, owned by EESL, are run tional assessment studies and
by charging point operators.. REPRESENTATIONAL/BLOOMBERG setting up charging infrastruc-
tures in their jurisdiction.
that the business has grown for 2030. That itself is a huge They include New Delhi
other participants to come in. number. To support that you Municipal Council (NDMC),
“A total of 30% of govern- need infrastructure. Earlier South Delhi Municipal Corpo-
ment vehicles have to be EV by the concern was how much a ration (SDMC), Ahmedabad
The official said the com-
pany will tie up with public
sector units and other institu-
tions in order to set up more
EV charging stations.
He also said that with more
and more EV charging infra-
structure providers coming in,
the company is looking at
coming up with an app which
would allow consumers to
avail of services from any
charging provider or charging
station of their choice.
Queries sent to the com-
pany remained unanswered at
has also procured 10,000 elec- paper by emailing us, with your
tric cars. full name and address to
Till date, 1,514 e-cars have feedback@livemint.com.
either been deployed or are
under deployment to govern- It is our policy to promptly
respond to all complaints.
ment organizations. These Readers dissatisfied with the
cars are given on lease or sold response or concerned about
to replace the existing petrol Mint’s journalistic integrity may
and diesel vehicles. write directly to the editor by
India currently has over 1 sending an email to
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LIVEMINT.COM DEALS, TECH & STARTUPS MONDAY, 23 MAY 2022
NEW DELHI 03

m MINT SHORTS
No funds to pay salaries, MFine
Firms push for digital Deal numbers dip
Companies raised $528 million in venture capital (VC) and
private equity (PE) funding this week, nearly half than the

radio, face challenges

lays off over 50% employees
New Delhi: Digital health platform MFine has become the latest
venture capital-backed startup to lay off staff due to lack of funds,
two former employees said. Bengaluru-based MFine, operated
by Novocura Tech Health Services Pvt. Ltd, has laid off over 50%
of its staff, one of the employees said, seeking anonymous. New-
sportal Inc42 said Mfine has fired around 600 employees, or
75-80% of the workforce. An MFine spokesperson declined to
comment. Mfine, founded in 2017 by former co-founder of Myn-
tra Ashutosh Lawania and former chief business officer at Myntra
Prasad Kompalli, offers consultation with specialists on its plat-
form, apart from partnering with hospitals, diagnostics and radi-
ology service providers to generate online demand. JOSEPH RAI
$1.04 billion raised in the preceding week, according to an
analysis by VCCircle.
Three investments in new age companies involving deal
value of at least $100 million accounted for a significant
portion of the total fundraise.
The number of PE and VC deals dropped to 30 this week
from 41 in the previous week, underlining funding squeeze
already felt in the startup ecosystem in the wake of the
current volatility in the equity markets, potential layoffs to
Xperi and DRM are trying to push radio stations in India to switch to digital cut costs and ongoing correction in the valuations.
By Anuj Suvarna and Joseph Rai
anuj.s@livemint.com
Shouvik Das
shouvik.das@livemint.com
Top funding deals
NEW DELHI Private companies raised $528 mn during the week.
Deal value ($ mn) Investors

T
itas Basu, a 30-year-old resident GreyOrange
Google to allow alternative of Noida, misses the Bangla FM Inflection.io
 Mithril Capital
Management, Neso Brands
stations she used to listen to back  MHS Capital,
billing on Match’s dating apps in her hometown of Kolkata. FM Version One
Blackrock  Lenskart
Fashinza
MINT
radio, currently, is analog and Repos Energy 100  Prosus*,
broadcasts using terrestrial antenna, which  Ratan Tata, Westbridge
others Capital*, Accel
works over short distances only. As a result, 100
the Bangla version of a FM station can only Karbon Card 5 BDR
be heard in West Bengal.  Northern Pharmaceuticals
Arc Capital, 7.2  Multiples PE-led
This is among a host of problems that Inclusive 110 88 consortium
firms are trying to solve by modernizing Credit 7*
FM radio for the digital age. Firms such as Melorra
Ninjacart 9 16  Axis Growth*,
Xperi Corporation and standard body Digi-  STIC, SRF Family Office*,
13 15
tal Radio Mondiale (DRM) are trying to Mainstreat 15 15 N+1 Capital
push radio stations in India to switch to dig- Digital
Coinshift
ital radio, which can allow them to take on Smytten  Tiger Global*,
streaming services like Spotify, Apple  Eight Wint Wealth Sequoia Capital India,
road BlissClub
New Delhi: Google has agreed to allow alternative billing Music and Gaana.  Eight Road Polygon Studios
Ventures*,  Elevation Ventures*,
arrangements for Match Group’s dating apps such as Tin- DRM is a consortium of radio broadcast- Fireside* Capital*, Eight Billion Brains
der, Hinge and OkCupid. In return, Match has withdrawn ers, including the UK’s British Broadcast- Road Ventures*
its request for a restraining order that it had filed earlier this ing Corp. (BBC), France’s Radio France *Lead investors **Debt funding Source:VCCEdge, VCCircle
month after Google threatened to remove the apps if they Internationale and Germany’s Deutsche
do not comply with the Play Store billing rules. As part of Welle, which designed a set of digital audio
the agreement, Match will not pay any commission to Goo- broadcasting technologies. American Xpe-
gle for payments through third-party billing, however, it ria, on the other hand, owns digital radio
has set aside $40 million in an escrow account till the mat-
ter is resolved in court. STAFF WRITER
services provider HD Radio.
According to Ashruf El-Dinary, senior
vice president of digital platforms at Xperi,
Infosys CEO Parekh
New ransomware forces victims
to feed kids, donate to homeless
digital radio will
allow radio stations
to display album art
gets nod for 2nd term
in songs and run
New Delhi: A new ransomware has been detected in India that banner ads, just like platforms that stream Sohini Bagchi other senior executives as it
makes victims donate new clothes to homeless, feed kids in music. He also said that it will let broadcast- sohini.bagchi@livemint.com sought to retain top leadership
branded pizza outlets and provide financial help to anyone who ers “push up to four programmes” on the The DRM has already started digital radio services in partnership with India’s national NEW DELHI amid the ongoing talent war in
needs urgent medical attention but cannot afford it, according same channel. This means that Basu will be radio broadcaster, All India Radio (AIR), back in 2017. ISTOCK major IT firms. Infosys said the

I
to digital risk monitoring firm CloudSEK. The company warned able to listen to both Delhi and Kolkata ver- nfosys, India’s second-largest decision to grant stock options
that the Goodwill ransomware could also result in temporary, sions of the same radio station, irrespective quality. However, he said that while there Dinary said that the government needs software services company, was taken “to ensure continuity
and possibly permanent, loss of company data and a possible of where she is based. were “primary-level conversations” to set “clear directions” in terms of digital has reappointed Salil Parekh and commitment of the leader-
shutdown of the company’s operations and accompanied reve- They can also include information on between digital radio providers and broad- broadcasting standards that India should as its chief executive and man- ship of the organisation for driv-
nue loss. “GoodWill ransomware was identified by CloudSEK artists and song lyrics through external casters over the past two years, the talks adopt. Policy clarity will help firms like HD aging director for another five ing the growth journey over the
researchers in March 2022. As the threat group’s name suggests, partnerships, and provide clickable links to have somewhat tapered off lately. Radio leverage smartphone users and part- years through next few years”.
the operators are allegedly interested in promoting social justice sponsor pages and more. He requested anonymity since the talks ner with phone makers, while radio firms March 2027. Parekh began his
rather than conventional financial reasons,” CloudSEK said in a The DRM has already started digital are still in progress. can move on deals too. The executive The decision was current stint at Info-
report. Once infected, the GoodWill ransomware worm encrypts radio services in partnership with India’s “There’s interest among users, too, but a quoted above said that adopting digital taken at a board sys in January 2018.
documents, photos, videos, database, and other important files national radio broadcaster, All radio is affordable for radio meeting of the company on Sat- He has nearly three decades of
and renders them inaccessible without the decryption key. PTI India Radio (AIR), back in 2017. MIXED SIGNALS stations, even as they face urday, Infosys said in a filing to experience in the global IT ser-
It has also partnered with Hyun- pressure from internet- the stock exchanges. vices industry with a strong
dai, Maruti Suzuki, Mahindra TALKS between THERE is a lack of A lack of usage based entertainment means. The board also approved a track record of driving digital
‘Govt must establish rules on crypto and MG Motors to bring DRM digital radio providers clarity and direction
and broadcasters from the govt as
standards has
previously hurt
To be sure, digital radio is grant of 104,000 shares to six transformation for enterprises
radio to in-car infotainment over the past 2 years different from internet radio. key management personnel and and executing business turn-
to resolve regulatory uncertainty’ units, since 2018. HD Radio, have tapered off
well, which
hampers adoption
the Indian radio
industry as well The latter uses data connec- another 375,760 shares to 88 arounds, according to Infosys.
Switzerland: Government must establish rules on cryptocur- meanwhile, has held a test pilot tivity to live-stream radio
rencies to resolve regulatory uncertainty, protect investors and with AIR in 2020 and 2021, but programming over the inter-
boost its crypto sector, CoinSwitch chief executive Ashish Sin- is yet to launch commercial radio services lack of clear direction from the govern- net, while digital radio transmits digital sig-
ghal said. Although India’s central bank has backed a ban on in the country. ment has held this sector back,” said nals over the regular FM frequencies by
cryptocurrencies over risks to financial stability, a federal gov- But digital radio services face major chal- Dinary. adding a layer of new equipment on top of
ernment move to tax income from them has been interpreted by lenges in India too, and none of these part- According to the executive cited above, traditional radio transmitters, and hence
the industry as a sign of acceptance by New Delhi. “Users don’t nerships yielded any major outcome so far. there is a lack of clarity and direction from doesn’t need data connectivity.
know what will happen with their holdings - is government going A senior executive with a leading private the government as well, which hampers Noel Keymer, a former radio jockey with
to ban, not ban, how is it going to be regulated?,” Singhal, a radio broadcaster in India agreed that digi- adoption from both broadcasters, partner AIR and Red FM, said that a lack of usage
former Amazon engineer who co-founded CoinSwitch, told Reu- tal radio does indeed bring advantages, and firms like automakers, and users, who will standards has previously hurt the Indian
ters at the World Economic Forum in Davos. REUTERS also offers better signal strength and audio have to buy the right kind of devices. radio industry as well.

DeHaat looks at acquisition

to expand, diversify offering
Anuj Suvarna was acquired recently will
anuj.s@livemint.com operate independently.
BENGALURU “Y-Cook deal was for value
addition as it is into food pro-

A
gritech platform
DeHaat will continue
to take the inorganic
route, making strategic bets to
expand its footprint and scale
its offerings rapidly to become
the go-to platform for all agri-
culture-related activities, a
top company executive said.
“Though we are full-stack,
our vision is to bring every-
thing related to Indian farm-
ing under one roof. As India
differs from region to region,
we are looking at acquisitions
so that our journey does not
start from zero. Our first deal,
Veza Mart, and the recent one,
Helicropter, were executed
for expanding across regions,”
Shashank Kumar, co-founder
and chief executive, DeHaat,
said.
The soonicorn (soon to be
valued at $1 billion-
plus) has so far
acquired four com-
panies.
DeHaat is flexible with its
acquisition strategy and is
willing to invest significant
sums depending on the stage
of the startup and intellectual
property. “Our merger and
acquisition thesis is focused
on geographical, category and
functional integration,” he
added.
After launching operations
in eastern India, it replicated
the model in Madhya Pradesh
and Rajasthan, and is looking
Shashank Kumar, co-founder
and CEO, DeHaat. LINKEDIN
to make inroads in South India
where it has no presence. “For
instance, with Helicropter, we
now have a presence in Maha-
rashtra and Gujarat as well.”
In its efforts to become a
one-stop shop for Indian
farmers, DeHaat is scouting
for strategic partners to also
foray into the financial servi-
ces space. At present,
it offers crop advi-
sory services based
on precision farming
technologies, giving access to
inputs at right times, and
helps farmers sell produce at a
higher margin. DeHaat has
over 1,000 registered institu-
tional buyers on its platform.
It also offers access to financ-
ing and insurance solutions.
The company looks to orga-
nize the market, which has so
far been dominated by unor-
ganized players. While
DeHaat integrated Helicrop-
ter with itself, Y-Cook, which
cessing. The thesis is that the
raw material we receive from
our farmers’ network, which is
around 4,000 tonnes every
day, finds the right synergy.”
“While we are into primary
processing and cater to both
domestic and international
clients, we were also looking
at some advanced food pro-
cessing and value addition so
that we could be in a position
to pass on better prices to the
farmers. That is why we col-
laborated with Y-Cook,” said
Kumar.
“In the first seven years, we
built the entire model. When
I say model, it means the advi-
sory content and financing
model. This includes unit eco-
nomics, deriving value propo-
sition for each actor on our
platform, be it farmers, agri
input companies or micro-en-
trepreneurs. During this time
we didn’t bother about scale.
Until 2019 March, we just had
farmers in thousands and our
franchise network was less
than 50 and we were present
in just a few districts.“
“Scaling began in the last 36
months. From a few thousand
farmers we grew to more than
a million. Our DeHaat centres
are now close to 7,000, and we
have raised over $161 million.
We were laying down a strong
foundation in the initial years
as we knew this will be the tra-
jectory,” he said.
04 MONDAY, 23 MAY 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 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%)

54,326.39 2.9 16,266.15 3.07 13,895.05 3.14 38,569.15 2.83 16,476.70 3.07 22,506.85 3.17 26,351.29 4.09
1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%)

-3.78 -6.06 -4.08 -5.85 -5.65 -5.54 -9.25 -5.26 -4.93 -5.7 -7.95 -5.32 -8.72 -5.03
6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%)

-8.9 8.86 -8.44 8.22 -9.2 8.48 -11.57 4.33 -8.76 7.88 -13.16 5.44 -8.5 14.93

m MINT SHORTS Ashok Leyland gains Investors are waiting

China banks make record rate for GCPL turnaround
cuts to boost ailing economy
Chinese banks cut a key interest rate for long-term loans
by a record amount, a move that would reduce mortgage
costs and may help counter weak loan demand caused by
share; holding on key Pallavi Pengonda
pallavi.pengonda@livemint.com
Muted show
Godrej Consumer Products’ revenue
Vineetha Sampath growth in Q4FY22 was lacklustre.

G
a property slump and covid lockdowns. The five-year odrej Consumer Products
loan prime rate, a reference for home mortgages, was vineetha.s@livemint.com
Gaining speed Ltd’s (GCPL) results for the Revenue growth (in %)

lowered to 4.45% from 4.6%, the People’s Bank of China Ashok Leyland’s Ebitda margin Backed by increasing demand, Ashok Leyland’s March quarter (Q4FY22) have Year-on-year Three-year revenue CAGR

A
said on Friday. This is the largest reduction in the rate shok Leyland Ltd’s efforts to in the March quarter stood at volumes in the March quarter rose by 10.6% been rather subdued. International 30
that has been made since a revamp of the rate in 2019. A regain domestic market 8.9%, which was higher than year-on-year. business performance was a sore
analysts’ estimates.
majority of economists surveyed by Bloomberg had pre- share in the medium and Medium and heavy Light commercial vehicles point. Indonesia Ebitda margin con- 25
Ebitda margin (in %) commercial vehicles
dicted a cut by five to 10 basis points. The reduction is a heavy commercial vehicle tracted sharply year-on-year (y-o-y)
20 50,000 20
significant move to boost loan demand, as consumer and (M&HCV) segment have because of higher commodity infla-
business confidence has been battered by covid lock- borne fruit. The automaker captured 9.4 8.9 tion, adverse mix, and a high base. 15
downs and a downturn in the property sector. The lower 30.6% of the market in the March quarter 40,000 Ebitda is earnings before interest, tax,
rate will be applied to new mortgages immediately, while (Q4FY22), a multi-quarter high, riding on 0 depreciation and amortisation. Africa 10
6.8
existing mortgages will not be repriced until next year at the introduction of compressed natural business Ebitda margin excluding
30,000
the earliest. BLOOMBERG gas (CNG) vehicles and an expansion in one-off inventory pilferage fell by 630 5
5.9
the distribution network. This compares -20 basis points (bps) y-o-y on higher costs 2.2
well with the market share of 28.9% in and rise in advertisement spends. One 0
20,000
Q4FY21. basis point is 0.01%. -0.9
-5
Ashok Leyland’s M&HCV volumes in -40
The bright spot has been the mar- Q1FY21 Q4FY22
Q4 rose about 50% more than industry 10,000 gin expansion in India business even Note: Consolidated numbers;
growth, the management said in a post as volumes fell by 3%. Growth was CAGR is compound annual growth rate.
Source: Company data, Nomura research
earnings call. weak in the domestic homecare seg-
-60 0
The company, which had a market Q1FY20 Q4FY22 Q1FY21 Q4FY22 ment and household insecticides (HI) SATISH KUMAR/MINT

share of 30% in April, plans to launch four performance was soft. Britannia Industries, and Dabur India
Ebitda is earnings before interest, tax, depreciation and amortization Source: Company data,
more CNG vehicles during the year Q1FY21 was impacted on account of lockdowns due to the first covid wave Motilal Oswal Financial Services
Overall, consolidated revenue, stands at 55.6 times, 47.4 times. 46.4
across different tonnage categories. In including other operating income, times and 43.4 times, respectively.
general, CNG constitutes 40% of the SATISH KUMAR/MINT rose by 6.8% y-o-y to Rs2,916 crore, However, margin pressures are
intermediate commercial vehicle (CV) FY20 and FY21, post which FY22 has segment has emerged largely unscathed. driven by pricing. Reported Ebitda likely to cap substantial near-term
segment at present. seen a recovery. “Industry volumes grew “Demand tailwinds evident from an margin fell by 407 bps to 16%. gains in the GCPL stock. The com-
It remains to be seen if the company 49% y-o-y in FY22 and we believe trucks increase in freight utilization have out- Understandably, investors were pany expects to see some margin
can sustain this position in the highly- are at the early stage of a long upcycle, weighed fuel concerns. With the cut in discouraged. On Friday, the stock fell expansion in the second half of FY23.
competitive market. If it does, this could which have lasted four years on average excise duty on fuel prices, the deal has by 4.7% on NSE compared to the 2% This would also depend on the mod-
The S&P 500 Index this week reached levels 20% off its rub off positively on the stock. in the past. We factor truck volumes ris- become sweeter for fleet operators,” said rise in the sectoral Nifty FMCG index. eration in palm/crude oil prices from
record high amid consumer spending woes. AP
Analysts reckon margin expansion to ing 34%/15% y-o-y in FY23/FY24. Our Varun Baxi, analyst at Nirmal Bang Equi- For FY23, GCPL anticipates double- current levels.
be a key driver. In Q4, Ebitda (earnings FY24 volume is similar to the FY19 peak,” ties. digit revenue growth Further, category
before interest, taxes, depreciation and said analysts at Jefferies India in a report The company also sees increased trac- with low-single digit vol- The GCPL stock development growth is
amortization) margin at 8.9% rose by 1.24 on 20 May. tion in export markets such as Africa and ume growth. Analysts had staged a in focus with new offer-
Hawkish Fed talk is unlikely to percentage points year-on-year (y-o-y), Increased infrastructure activity by the the Middle East. Total exports in FY22 remain upbeat on ings at attractive price
smart run after
reverse volatility in bonds beating analysts’ estimates grew by 38% y-o-y. While GCPL’s growth pros- Sitapati’s points in HI and hair col-
After a violent rally in bonds, Treasury traders are debat- by a mile. Better operating ON THE COMEBACK TRAIL demand is strong, the semi- pects under the leader- our. “There is a lot of
appointment was anticipation about how
ing whether recent tough talk by the US Federal Reserve leverage amid a high infla- conductor shortage contin- ship of new managing
on its commitment to cooling prices is enough to reverse tionary environment led ADDITION of CNG THE commercial BUT higher input ues to weigh on the light CV director and chief exec- announced in the company would be
the trend. The hot inflation readings that helped drive this expansion. vehicles helped vehicle segment is costs means margin segment. utive officer (CEO), May 2021 re-staging the India HI
Ashok Leyland expected to benefit pressures, which
Treasury rates across the maturity spectrum to multi- However, elevated com- regain market share from the cyclical remains a cause for Investors will watch if the Sudhir Sitapati who took business to spur growth
year highs earlier this month have given way to economic modity costs are a point of in Q4 upturn concern company’s market share charge in October. The therein, ‘category-devel-
growth concerns that have drawn money back into worry. Even so, the soften- trajectory continues. Ashok GCPL stock had staged a smart run opment’ being the key theme set by
bonds. The S&P 500 Index this week reached levels 20% ing in steel prices bode well Leyland’s shares closed up after Sitapati’s appointment was CEO Sudhir Sitapati here, as it is for
off its record high amid consumer spending woes and for margins. The company hopes to government, robust growth in e-com- 6% on Friday on NSE following the Q4 announced in May 2021. the company as a whole,” pointed out
expectations of how much the Fed might raise interest achieve double-digit Ebitda margin. It merce, and impending replacement results. “Valuations at 19.8 times FY24E However, amid rising cost pres- JM Financial Institutional Securities
rates over the next year have ebbed. The 10-year note’s has taken price hikes in Q4 and in April, demand augurs well for the segment. The price to earnings and 10.9x EV/Ebitda are sures, GCPL’s shares are now down by Ltd analysts. Hereon, investors will
yield reached 2.77%, the lowest level this month. How- too. The management said on a price hike management sees headroom for growth reflecting in the early recovery cycle. Any 33% from the 52-week high seen on 15 watch for signs of positive turn-
ever, the path of yields this week included jumps of 10 of 2%, they are retaining 1.6-1.7% net after as the average age of trucks at 9.9 years is fundraise in Switch Mobility can serve as September on NSE. Valuations are around. “The execution machinery
basis points for the 10-year and 14 basis points for the five- discounts, which is good, but the dis- nearly at an all-time high. Further, a re-rating catalyst,” said analysts at Moti- lower now. The stock trades at 39.4 being put in place will yield fruits over
year in a single day. There’s more potential for market count is slightly high. reopening of colleges and offices means lal Oswal Financial Services in a report on times estimated earnings for FY23, the medium-term though stock is
volatility ahead after Fed Chair Jerome Powell commit- The CV segment is set to benefit from more opportunities for the bus segment. 21 May. EV is enterprise value. Switch according to Bloomberg data. Peers likely to be lacklustre till some signs of
ted to hike until there is “clear and convincing” evidence a strong cyclical upturn after the last Elevated fuel prices were expected to Mobility is the company’s electric vehicle trade at higher valuations. This meas- success start to become visible,” said
that inflation is in retreat. BLOOMBERG downcycle. Industry volumes fell y-o-y in have a bearing on the demand but the business. ure for Hindustan Unilever, Marico, JM’s analysts.

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

Global oil firms report huge profits but
Indian marketers are left high and dry
Tauseef Shahidi & Niti Kiran
tauseef.s@livemint.com
Bandhan ‘Axis MF not only case of front
to pivot to running being probed by Sebi’
secured Jayshree P. Upadhyay &
Corp. Ltd who were unable to Neil Borate
Well oiled
Year-on-year growth in Jan-Mar 2022 (in %)
pass on the high cost to con-
sumers, they are taking a hit.
loans: MD NEW DELHI/MUMBAI

I
ndian oil refiners are staring Revenue PAT IOCL and HPCL reported a
PTI

A
at huge losses as they have Saudi Aramco (Saudi Arabia) 71.6 80.1 31.4% and 40.5% decline, xis Mutual fund is not
failed to pass on the higher respectively, in their March feedback@livemint.com the only case the Secu-
ExxonMobil (US) 52.4 219.9
costs of crude to fuel consum- quarter earnings. KOLKATA rities and Exchange
ers, even as global energy pro- Chevron (US) 68.3 254.9 Fuel retailers are allowed to Board of India (Sebi) is probing

ducers report outsized profits
in the March quarter.
A Mint compilation of earn-
ings data reported by global oil
giants shows some have
recorded their best profit fig-
ures in years, even decades, as
crude oil prices soared after
the Russia-Ukraine war broke
out.
Saudi Aramco, the world’s
largest oil company, is now
neck-and-neck with Apple as
the most valuable company
globally and is ranked on top as
of Friday’s closing. The com-
pany also reported more than
80% growth in its profit in the
March quarter.
Oil majors ExxonMobil,
Chevron, Shell, TotalEnergies,
and ConocoPhillips have also
reported a year-on-year (y-o-y)
earnings growth of 80-255%.
National producers from
China and Russia are not
behind.
Brent crude prices crossed
$100 per barrel in late Febru-
ary and remained above that
mark for almost throughout
March. The prices have fur-
ther surged in May after the
EU’s proposed tightening of
sanctions on Russia. On Fri-
day, Brent crude was trading
around $113 per barrel.
Indian oil producers Oil and
Natural Gas Corp. (ONGC) and
Oil India are also likely to
P
Shell (UK) 51.3 146.6 set rates, but they have so far rivate lender Bandhan following allegations of fund
TotalEnergies (France) 65.5 187.1 shied away from increasing Bank will gradually managers and dealers front
ConocoPhillips (US) 382.7 80.8 prices commensurate with the increase its exposure to running stocks. The regulator Front running leads to people with information about the trades
PetroChina (China)
rise in crude oil prices. secured loans by enhancing is investigating at least three ending up making outsized gains. MINT
44.3 44.6
Bringing some relief, the advances to the housing and other cases, said a senior Sebi
BP (UK) 42.6 14.5
Union government, on Satur- MSME sectors, an official said. official. in-law as they are not defined as operate through multiple
Petrobras (Brazil) 72.4 4,818.9 day, reduced central excise At present, the bank’s expo- Front running is the practice connected persons under the accounts in small quantities.
Gazprom (Russia) 23.5 129.3 duty on petrol by ₹8 per litre sure to MFI loans, which are of trading in securities ahead of companies act. However, in the The new algo looks at smaller
Enbridge (Canada) 24.3 6.6 and on diesel by ₹6 a litre. This unsecured, is 47%, and the large client orders. latest twist to this method, trades ahead of big trades and
would give fuel retailers some share of its advances to the Sebi’s increased scrutiny of fraudsters are using ‘accounts narrows down on the pattern,”
Companies are sorted as per their market capitalisation.
leeway to cope up with the vol- housing segment is 24%, retail the so-called front running by for hire’,” said the Sebi official. said the official.
ONGC and OIL likely to report strong numbers, atility in crude oil prices and is 2%, and the micro, small and fund managers and dealers is These tend to be KYC-com- The algo was developed 2-3
but OMCs staring at losses could lead to a reduction in medium enterprises (MSME) largely because of the changes pliant accounts of real individ- years ago and is equipped to
Year-on-year growth in PAT in Jan-Mar 2022 (in %) their under-recoveries. sector is 27%. in surveillance norms to adapt uals who are willing to hire out catch the new modus operandi.
Declared
If the government allows Bandhan Bank managing to new ways manipulators are their accounts for a fee. Some of Sebi has detected multiple
Estimated
the upstream companies to director and chief executive gaming the system and evolv- them are also high net worth instances of front running.
Reliance Industries 45.6 reap the benefits of the high officer Chandra Shekhar ing methods of fraud, the offi- individuals and it is possible to These are being investigated
Gujarat Gas 27.9 crude oil prices, it will defi- Ghosh said that “the lender will cial said. rent as many as and detailed orders will be
Petronet LNG 20.3 nitely be very positive for increase its exposure to Besides being a Besides being a 300 accounts in passed outlining the modus
IOCL -31.4 ONGC and Oil India, said secured loans and has set a tar- serious securities serious securities just two days, the operandi soon, the official said.
HPCL -40.5 Swarnendu Bhushan, senior get to increase disbursements market offence, it market offence, person said. “These orders will lay the
Adani Total Gas -47.7 group vice-president and oil to housing and medium-size can affect the net front running can If a front runner groundwork for the regulator
ONGC 157.5 and gas analyst at Motilal MSME loans. Advances to MFIs asset value (NAV) is using 300 to seek more powers equivalent
Oswal Financial Services and small-ticket MSME loans
also affect the
OIL 129.2 of a fund as the accounts to trade to those available to enforce-
GAIL (India) 47.6 However, fuel retailers are los- are unsecured”. trades in securi- net asset value of in small quantities ment agencies.”
ing ₹8.8 per litre on petrol and About 25% of its MFI loans ties would have a fund it is almost impos- ED and IT have the powers
BPCL -63.1
₹12.9 on diesel. will be converted to formal already run up the sible to detect to seek whatsapp and other
PAT: profit after tax
OMCs: Oil marketing companies; Estimates are from Motilal Oswal Financial
This could mean that profit- MSME advances as the interest stock, making it since most of the social media chat records that
Services reports. Standalone figures have been considered. ability of Indian oil marketing rates in the segment are similar expensive for the fund to buy surveillance will look at trades Sebi does not have. Now mar-
Source: Bloomberg, Capitaline, Motilal Oswal Financial Services companies will not be in sync to micro-credit or the loans and thereby affecting the NAV which would be equivalent to a ket manipulators use What-
with similar companies in the given to self-help groups, and leading to losses or inferior trade placed by an institutional sapp, Signal or Telegram.
free-market regime abroad, Ghosh said. prices for customers. People investor. “Once some of the orders come
report strong quarterly earn- because fuel prices during the Bhushan said. There will be “no impact on with information about the “Sebi made the mistake of into the public domain Sebi will
ings this week, reaping the election season, from Novem- “So will the government allow the profitability” of the bank as trades end up making outsized thinking too small at first. It be in a position to demonstrate
benefits of high oil prices. ber 2021 to March 2022, these OMCs to take this whole there is no difference in the gains. would assume that the institu- that in this digital age, fraud
However, the companies remained unchanged. burden of under-recovery or ask interest rates, he said. In “Front-runners would at one tion’s trade would be large and and fraudsters have become
down the value chain, which Fuel retailers such as Indian ONGC and Oil India or maybe Q4FY22, the bank clocked a time use own accounts or those the front runner’s trade will be sophisticated and to catch
engage in midstream and Oil Corp. Ltd (IOCL), Hindu- GAIL to participate in this shar- net profit of ₹1,902 crore with of their families to trade. This more or less the same size. Sebi them the regulator needs ade-
downstream operations, are stan Petroleum Corp. Ltd ing of under-recovery? That is no provisioning for bad loans, later changed to using the worked on removing that myth quate tools,” the official said.
staring at sharp losses. This is (HPCL), and Bharat Petroleum the big question,” Bhushan said. he said. accounts of insider’s brother- since the front runner would jayshree.p@livemint.com
LIVEMINT.COM
MONDAY, 23 MAY 2022
NEW DELHI 05

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• Gujarat has already surpassed its 5-year cumulative score, from year 2014-2019, in just 2 years i.e., from 2020-2021 Chief Minister of Gujarat

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and brighter tomorrow with its the country. Gujarat made its foray #2 in Water List Generation, Grievance
successes in the coming years. into the sector with #10 rank in With highly impactful projects like Management and Hostel
It is imperative to mention 2020. The pandemic days proved Sujalam Sufalam Jal Abhiyan 3.0, Management System are the
here at the onset that the study to be the game-changer, with thestateismakingstridesinsectoral state’s contributions to the niche.
has found Gujarat as one state going full throttle to harness development with considerable
of the frontline states in the the power of technology to bring innovative approaches. Top-5 For Urban Development
implementation of e-governance relief to the masses, the state saw The implementation of the eNagar
policies and projects in India. its spectacular rise to the #1 spot #2 in Ease-of-Doing Business Gujarat: e-Enabling Citizen-
The 2021 edition of SKOCH in e-Governance in 2021. Always ahead of time, Gujarat Centric Services in Urban Local BFSI
assessment proves it yet again GujaratStateWideAreaNetwork is called the bastion of an ideal Bodies project by the Gujarat
that year after year, Gujarat has (GSWAN), State Data Center, the Ease-of-Doing Business model. Urban Development Mission is GOLD
come to be known as one of the ServerFarm,SachivalayaIntegrated Khoj - A Scientific Search Open a compelling example of leading
consistently high-ranking states. Communication Network Innovation Science Museum is an work in the sector in the whole of Vidal Health Insurance TPA Pvt Ltd
(SICN), Integrated Workflow and impactful project from the sector, the country. for
REMAIN IN TOP-5 Document Management System one of several well-performing Pradhan Mantri Jan Arogya Yojana
Gujarat has the distinction of (IWDMS) and many such models initiatives in the sector in 2021. COMEBACK IN FINANCE
clinching on to the coveted developed by the state have become & REVENUE Conferred This Honest Independent Honour in India on 9th April 2022 at New Delhi

grouping of Top 5 best performing role models for others to follow. As #2 in Forest & Environment In 2021, Gujarat has made
states consistently from 2019 to per the SKOCH study, the Gujarat The initiatives dedicated to the a remarkable comeback by
2021. In the year 2019, Gujarat CMDashboardisahighlyimpactful Conservation of Asiatic Lion and climbing to the #4 rank. The Garvi
achieved the #1 rank. There was e-Governance project. Whale Shark have helped Gujarat (Automation of Administration
a slip in position thereafter owing make a mark in the Forest and of Registration, Valuation &
to various factors including that of #4 in Municipal Governance Environment sector. Indexing in Gujarat) by the
lesser project participation in the Affirmative actions on governance Inspector General of Registration
SKOCH study. Nevertheless, even matters can drive change and #2 In Labour and Superintendent of Stamps is
after the decline, Gujarat continues Gujarat has been a testimony Labour is the backbone of an an important intervention. �

NOMINATE NOW: award.skoch.in info@skoch.in skochgroup skochgroup skochtv @skochgroup @skochsameer

06 MONDAY, 23 MAY 2022
NEW DELHI CORPORATE LIVEMINT.COM

Don’t view us with a cricket lens, Fund manager exits

India invoked the peace clause at
WTO for exceeding the ceiling on
the aid it offered rice farmers. MINT
on regulator’s radar
says Disney+ Hotstar’s Shakdher FROM PAGE 1 “The thumb rule should be
to disclose everything and in
a more detailed statement,” the precise details as the fund
Lata Jha we will be working with him again. said a person with knowledge managers expect from listed
lata.j@htlive.com How is the overall marketing split of the matter. entities. So, relying on LODRs
NEW DELHI between sports and general enter- “For listed companies, we with certain exceptions and
tainment? have the LODR (Listing Obliga- additional standards would be

AT WTO, India
seeks lasting
solution to
row over food
stockholding
FROM PAGE 1
looking for a permanent solu-
tion to public stockholding
programmes.
Developing nations such as
China and African nations part
of the G33 group have also
raised this issue at WTO.
Last year at WTO, G-33
countries stated that govern-
ment procurement made
under minimum support price
(MSP) would not be used for
exports.
“WTO rules do not allow
export of commodity from
W
ith around 50 mil-
lion subscribers, Dis-
ney+Hotstar is the
leading video
streaming company
in India, but its dominance is con-
stantly being threatened by the 60 plat-
forms, which are upping their game by
investing in content and marketing. In
an interview, Sidharth Shakdher, exec-
utive vice-president and chief market-
ing officer, Disney+, shared his insights
on establishing the brand in India and
how it is looking beyond sports to
establish a connection with audiences
across segments: Edited excerpts:
It’s been two years since Hotstar
was rebranded as Disney+Hotstar
in India. How has the brand jour-
ney been?
We are now at par (with Hotstar) in
terms of recognition and top of mind
recall, and the perception has grown
more positive with Disney+ coming in. It
I would categorize our marketing tion and Disclosure Require- in the interest of the unithold-
efforts into three kinds. At the most
functional level, we have specific titles,
ment), which takes care of the ers,” Tandon said.
disclosures for listed companies. However, when a whistle-
whether they are entertainment or
sport. Then we have category builders
But there isn’t
anything similar Axis Mutual
blower complaint
becomes material
like Multiplex, which is direct-to-digi- for mutual funds Fund’s statement a n d w h e n i t
tal movies. The third is about the pur- for events that did not shed any should be dis-
pose of the brand. But we have reduced impact unithold- light on whether closed remain
our reliance on cricket in those com- ers. Having said
it had completed questions even for
munications. Three years ago, cricket that, there are listed companies.
would have been 60 -70% of that com-
munication; now, it is 20-30%. Also,
things to be con-
sidered when the
its suo-moto
investigation
“There could
be many whistle-
while cricket was so big then, we didn’t information blowers’ com-
really have our own originals, and we becomes material plaints, and many
didn’t have Disney as a library. Now we for a unitholder,” said the official would be dismissed without
have the best of international content cited above. merit, making the disclosures a
and local originals. If you’re a sports According to Amit Tandon, tad tricky. Listed companies
lover, of course, there’s cricket as well, chief executive of Institutional typically disclose complaints
but we don’t have to hammer that point Investor Advisory Services (IIAS), (whistleblower or otherwise) in
anymore. What we need to build on is a proxy advisory firm, fund their annual reports. But is that
that we are one platform which has the houses should make the same enough, is something the regu-
best of Indian and international con- disclosures as they expect from lator is debating,” said the sec-
tent, so that’s why there’s a larger skew the companies they invest in. ond person cited above.
other cornerstone of our marketing is You have done promotional films towards it in our campaigns now.
being meaningful to people’s lives in not with Shah Rukh Khan. Is he your Does this become even more
just one or two segments, or metro and brand ambassador? important as the IPL media rights
urban areas, but across India. When we He’s not a brand ambassador in the
marketed in the first two or three years, it typical sense. I feel he’s somebody who
was more about building the category— brings to light the message that this is
are up for grabs again?
Absolutely. We started as a destination
for cricket, but we are now a destination
More women leaving

‘ workforce, study says

public stock because it distorts
prices, which affects other
countries. However, the same
is allowed if exports are done at
market prices. Other countries
argue that you (India) give sub-
sidy on the production as well
as at the distribution end,” the
official further explained.
Another issue that could be
raised by other WTO countries
could be with regard to India’s
contribution to the World
Food Programme (WFP).
“But India has been giving
grains for WFP. It must be
noted that grains given under
WFP are excluded from the
wheat export banned
announced earlier,” the offi-
cial further added.
has opened up new segments and found
broader acceptance, for example, among
people with children. While earlier, it
used to be young adults, families have
now come into the fold. So, in that sense,
there’s been a positive addition to our
brand equity, thanks toDisney+.
How did your marketing strategy
evolve during the pandemic as
more subscribers came into the
OTT fold?
What has been very clear and impor-
tant for us from the get-go has been the
fact that Disney+Hotstar should be mean-
ingful to people’s lives. Our goal in the
past six years has been to be a purpose-
driven brand that helps you talk to all
audiences in a similar fashion. Otherwise,
you are talking to different people in dif-
ferent ways in your brand positioning,
and recall and equity go nowhere. The
talking about modes of convenience, the platform that has the best quality for any entertainment that’s meaningful
mobility, control, and content and adds to to you. So we shouldn’t be viewed with a
so on. Over the years, it your life in terms of you cricket lens. When we started with Hot-
has changed to being a We have clutter- being exposed to dif- star, it was a transactional relationship
more experience-re- breaking stories ferent things and where consumers would come when FROM PAGE 1 “This is an intermittent
lated, meaningful life- across Indian and growing as a person. there was cricket or Koffee With Karan, phase, and more diversity
driven push. We have We’re not going to but when one generally wanted enter- ram, founder of technology recruitments are coming in
clutter-breaking stories international content. shoot hoardings or tainment, it may not have been the brand recruitment firm HanDigital. where companies necessarily
across Indian and inter- Plus, we are spreading plaster his face on bill- that popped into one’s mind. Now it’s The hiring agency has started want women on board. The gig
national content. Plus, regionally. boards and have him very different, with the brand being in a mapping the leaders whose economy is not getting factored
we are spreading stand and endorse Dis- meaningful and purposeful space in peo- teams have open mandates to in, and many women have
Sidharth Shakdher
regionally. Chief marketing officer, Disney+ ney+ Hotstar. The
ple’s lives, where it’s not linked to one see if they are following the joined that workforce instead
With more people agreement we have is particular piece of content. WFH/hybrid or complete of the regular jobs,” said Ritu-
coming on OTT, we around using him to return-to-office mode. parna Chakraborty, co-founder
started looking more at micro-markets, meaningfully deliver messages in build- “Depending on what the leader and executive vice-president of
and things like micro-influencers and ing the purpose of the brand. Because in Scan the code prefers, we are approaching TeamLease Services.
regional print became a much more the end, we want the brand to be the to watch Mint’s candidates,” he added. Chakraborty said after two
important part of our agenda. And hero, and Shah Rukh is somebody who’s Brand Talk However, this could still be years of covid, the struggle to
while for four-and-a-half years, we helping the brand become that. I can’t interviews. just a phase as more firms stress get women candidates across
never thought of getting a celebrity on really reveal our other plans with him, their need to raise gender hierarchies remains the same,
board, we did get Shah Rukh Khan. but he’s with us for a little bit more, and diversity. and it is no worse.

All newborns to get health IDs Jindal arm to venture Future directors’ narrative on
FROM PAGE 1 government official.
“Currently, people have
into defence sector store transfer a sham: Amazon
vaccination sessions for baby multiple ID documents, and
and mother. In this case, we this becomes problematic FROM PAGE 1 PTI retained the amount.“ would be incapacitated from
can track the health record of when it comes to the health- feedback@livemint.com “Surprisingly, FRL had man- making such a statement," Ama-
the mother and the baby as care sector. Each hospital will the company would set up a NEW DELHI aged to do so without discon- zon said.
well. This will help a doctor to have its own unique ID for its new facility with a defence pro- tinuing any of its operations or “The purported handover of

access their previous health
records for the duo when they
come back to the hospital
again for follow-up checks,”
the official cited above said.
The provision will also be
available to people without
Aadhaar numbers and infants
who do not have a name yet.
While the child’s ABHA will
be linked to their parents’
number, only parents will have
access to the health records of
their children till the child
turns 18.
NHA is likely to complete
work on the project in the next
few months.
Queries mailed to the Union
health ministry’s spokesper-
son on Saturday evening
remained unanswered at press
time.
Any parent will be able to
generate the ABHA number
Only parents will have access
to the health records of their
children till the child turns 18. MINT
for their children from multi-
ple sources such as the Ayush-
man Bharat Digital Mission
(ABDM) website, hospitals
integrated with ABDM,
Arogya Setu and Paytm apps
and other ABDM compliant-
healthcare providers and gov-
ernment health schemes.
“The objective is to take the
benefits of ABHA to the last
citizen and increase the pene-
tration of ABHA, empowering
people to have access to their
personal health records on a
mobile phone,” said another
patients, irrespective of the
public and private sector. And
all of these systems have multi-
ple health data for a person
generated at those health facil-
ities. Patients have to take all
the physical files and docu-
ments to doctors. There are
chances that sometimes
patients can misplace these
physical files. Therefore,
ABHA (health ID) is envi-
sioned to serve as an ID for a
person across all healthcare
ecosystems regardless of any
public or private hospital or
diagnostic labs, etc., wherein
patients go to avail healthcare
services,” the official added.
So far, over 223 million
ABHA Health IDs have been
created under the ABDM
scheme, which aims to support
the integrated digital health
infrastructure of the country.
duction line near its existing
manufacturing facility in Path-
redi near Gurugram.
The company is also looking
at setting up manufacturing
operations in states where such
facilities are available under
plug-and-play mode. It has
already started work on a new
manufacturing facility in
Chennai that will cater to its
railway business of coaches and
wagons.
After slowing during the
covid period, JSLL’s revenue
grew by about 52% in FY22.
“Covid disruptions are behind
us, and right now, we are in a
much better position even
compared to our pre-covid
levels. We have set a target of
20-22% growth in FY23, and
this would be achievable given
our strong order book size of
₹500-600 crore,” Mohata
The Centre has set a revenue target
of ₹1.75 tn from aerospace, defence
goods and services by 2024. AP
said, adding that a major
chunk of growth this year will
come from the real estate seg-
ment that is again seeing a
rapid revival.
JSL Lifestyle mainly caters to
the lifestyle segment with its
niche brands Arttd’inox and
Arc and has manufacturing
capabilities in Pathredi and
Rohad in Haryana and Chen-
nai.
A
mazon has accused handing over its stores,” it retail assets of FRL is, thus, not
Future Retail Ltd’s wrote. “Consequently, any nar- on account of non-payment of
independent directors rative that there was a pur- outstanding lease rentals.”
of facilitating “fraudulent strat- ported transfer on account of “The purported handover is
agem”, saying the narrative of failure to pay huge outstanding nothing but an intentional
the transfer of 835 rent for as many as fraudulent action in further-
stores to Reliance Amazon said the 835 retail stores, ance of the stratagem to osten-
Industries—on purported that, too, as sibly alienate the retail stores,
account of failure handover of FRL quickly as on Feb- without following the rule of
to pay huge out- retail assets was ruary 26, 2022, is law. It has been carried out
standing rent—
not on account of nothing but a without notice to the courts,
was a “sham” as sham and a false regulators, lender banks and
the retailer had a non-payment of narrative to regu- solely motivated by the desire
month prior to outstanding rentals lators, creditors, to defeat any final award passed
such move stated the shareholders in the arbitration proceedings
that outstanding and the courts." in favour of Amazon," it said.
rent was only ₹250 crore. ”On January 22, 2022, FRL An FRL spokesperson did
The US retailer wrote on 19 issued a letter to Bank of India, not immediately offer any com-
May to independent directors of State Bank of India and Saraf and ments on the story.
FRL stating that the firm had in a Partners, wherein FRL reiterated “The stratagem to alienate
meeting with core lender banks its stand on selling the small store the retail stores grossly under-
on 1 January 2022, “categorically formats, in blatant disregard of values the retail stores and
admitted that the unpaid rental the binding injunctions operat- moreover falls under acts
dues was ₹250 crore only. FRL ing against it. If the retail stores amounting to wrongful trading
further stated that it voluntarily were not available with FRL, FRL to defraud creditors,” it alleged

Centre may slash revenue spending, borrow more than budgeted

FROM PAGE 1
lowered by various agencies,
including the Reserve Bank of
India (RBI), the reduced revenue
collections and increased sub-
sidy outgo are expected to drive
India’s FY23 fiscal deficit beyond
the budgeted ₹1.6 trillion.
The duty cuts have implica-
tions at the state level as well.
Kerala finance minister K.N.
Balagopal said that in response
to the Centre’s excise duty
reduction, the state would pass
on the benefit of the resultant
value-added tax (VAT) reduc-
tion in rupee terms to the peo-
ple. States levy VAT as a per-
centage of the price refineries
charge to dealers, inclusive of
excise duty (ad valorem rate),
while some states have a com-
bination of ad valorem rate and
a specific duty in terms of
rupees per litre.
“We (LDF government)
never raised VAT on petrol and
diesel in the last six years, and
once we reduced the rates. The
practice during the earlier
United Democratic Front gov-
ernment was to slightly raise
the VAT rates when the central
government lowered excise
duty, which limited the benefit
to consumers to the extent of
the Centre’s excise duty reduc-
tion, a practice we have never
done,” Balagopal said in an
interview.
Since his government never
adjusted VAT rates like that, it
was not reducing the ad valo-
rem rate now and instead was
passing on resultant relief on
VAT in rupee terms to consum-
ers as well, Balagopal said. The
benefit to consumers in Kerala
is ₹2.41 a litre on petrol and
₹1.36 a litre on diesel.
Rajasthan chief minister
Ashok Gehlot tweeted on Sat-
urday that following the central
duty cut, VAT levied by the
state, too, comes down by ₹2.48
a litre on petrol and by ₹1.16 a
litre on diesel.
ernment can do as it is fuelled
by the global situation, and we
may have to wait patiently until
these factors abate,” the official
cited above said.
Terming the excise duty cut
a sensible move, Pranab Sen,
former chief statistician of
India, said that on the one side,
the move would help reduce
the “cost-push” factor of infla-
tion, and on the other, it would
also lead to the expansion of fis-
cal deficit. “It has possibly cre-
ated space for the RBI to get
more aggressive on their rate
Saturday’s cooking gas subsidy announcement will add an hikes,” he said.
additional ₹6,100 crore to the subsidy bill. MINT “Now the real question is
how RBI does it because what is
Tamil Nadu finance minister hoping a normal monsoon going to happen is, if every-
Palanivel Thiaga Rajan said on would ease food price inflation. thing else is left unchanged, the
Sunday that it was not fair to However, on other items, the fiscal deficit will go up. It is still
expect states to reduce taxes, scope of government interven- too early to have any idea on
while Maharashtra said it was tion is limited, except, for how the government is plan-
passing on the benefit in rupee instance, by increasing the sup- ning to adjust because this is
terms to consumers. ply of certain items by making going to lower government
The central government has logistics easier. revenue,” Sen said.
already cut import duty on edi- “This is imported inflation. Sen pointed out that a public
ble oils to tame inflation and is There is a limit to what the gov- spending cut could be contrac-
tionary, which may not leave of the Centre’s duties on petrol reduce their prices,” he said.
RBI with much room to crack and diesel and that their reve- Although fuel prices
down on inflation. The govern- nue was from VAT on the two declined on Sunday after the
ment, however, is looking at fuels. “I wonder if they can previous day’s duty cut, experts
only a revenue spending cut, afford to give up that revenue said a further decline in retail
while productive capital unless the Centre devolved prices is unlikely as oil market-
spending remains the priority. more funds or gave them more ing companies are already reel-
Sen said that states face a grants. The situation is like ing under high oil prices and
“hard budget constraint”, being between ‘the devil and under-recoveries.
which means if the deep sea’,” he Debasish Mishra, a partner at
they cut the tax on The Centre has said. Deloitte, said that although the
fuel, they have no cut import duty Tamil Nadu ₹10 per litre increase in diesel
option but to cut on edible oils to minister Thiaga and petrol prices during
expenditure as tame inflation Rajan said, “It is March-April must have cov-
well. “That pertinent to point ered about $16-18 a barrel
and is hoping
doesn’t really out that the Union increase in crude prices, other
help,” he added. for a normal had never con- factors such as rupee deprecia-
In a series of monsoon sulted the states tion, accumulated under-re-
tweets, Sithara- when they covery and elevated crack
man said the fuel increased taxes on spreads must be adversely
tax cut on Saturday, as well as petrol and diesel multiple impacting margins of the oil
last November, was on a cess, times. The exorbitant increase marketing companies.
and, hence, the loss due to the in taxes by the Union govern- “The Indian basket of crude
cut was entirely on the central ment has been only partially is hovering around $105 and
government. reduced through their cuts, and $110 a barrel. Second, the rupee
Former finance minister P. the taxes continue to be high as has depreciated to 78 (per dol-
Chidambaram said in a tweet compared to the 2014 rates. lar). All these taken together,
on Sunday that states are get- Therefore, it is neither fair nor there would still be some
ting very little by way of a share reasonable to expect states to under-recovery,” he said.
LIVEMINT.COM
Baring PE Asia to raise $350 mn debt, fund IGT Solutions buyout
Swaraj Singh Dhanjal
swaraj.d@htlive.com
MUMBAI
A
sia-focused pri-
vate equity firm
Baring PE Asia
which is acquir-
ing BPO firm IGT
Solutions from Apollo Global
is in the process of raising
$350 million in debt to
finance the $800 million buy-
out, said two people aware of
the development.
Baring emerged as the
highest bidder for IGT Solu-
tions, formerly known as
InterGlobe Technologies.
IGT is Baring’s third acquisi-
tion in the technology servi-
ces space in the last one year,
following the acquisition of
Hinduja Global Solutions and
Straive.
Aion Capital Partners, a
joint venture between Apollo
Global and ICICI Ventures,
had acquired IGT Solutions
for $230 million in 2019.
IGT Solutions, established
in 1998, is a business process
management (BPM), technol-
ogy and digital services and
solutions company in the
travel, transportation and
hospitality domain.
The company’s client base
comprises hotels, airlines,
online travel agencies (OTAs)
and travel management com-
panies.
CORPORATE
“Baring has tied up the debt
financing arrangement for
the buyout. They are raising
$350 million in debt for this
transaction. The financing
arrangement has a maturity of
6 years, carrying an interest
rate of Libor plus 650 basis
points. This will result in a
leverage of around 6-6.25
times,” said the first person
cited above, requesting ano-
nymity as he is not authorized
to speak to the media.
“Investors such as Barclays,
Nomura, Canadian pension
funds CPPIB and OMERS,
KKR Credit and Tor Invest-
ments are participating in this
debt financing. Buyout funds
like Baring have been part-
funding their acquisitions
through debt for a while now
and this has now become a
common practice among for-
eign PE funds that are looking
to buy out Indian companies,”
he added.
Baring PE Asia declined to
comment on Mint’s queries.
Last month credit rating
agency Icra upgraded the
company to A- from BBB+.
“The rating upgrade factors
in the strengthening of IGT
Solutions Pvt. Ltd.’s (IGTS)
credit profile, supported by
widening of its global delivery
footprint and scaling up of its
business process outsourcing
(BPO) services, with support
from its IT and digitisation
MONDAY, 23 MAY 2022
NEW DELHI 07
services. These factors have rating agency said.
supported the company’s “The rating is, however,
strong financial risk profile, constrained by the high expo-
marked by healthy revenue sure to sectoral-concentra-
growth, improvement in tion risks, as most of the reve-
profit margins and strong nue is generated from the
debt protection metrics in travel and tourism industry.
FY2022. Moreover, the reve- However, Icra has taken note
nue growth momentum is of the company’s initiatives to
likely to be sustained over the diversify its sectoral concen-
near to medium term, sup- tration through new clients in
ported by considerable uptick the retail and e-commerce
in airline passenger traffic sectors in FY2022,” the rating
and the tourism sector,” the agency added.
08 MONDAY, 23 MAY 2022
NEW DELHI GLOBAL LIVEMINT.COM

China shares tested by FII Apple looks to step up output

in India and Southeast Asia
outflows, currency slide FROM PAGE 1

reduce dependence on China

for manufacturing or key
materials. Such consideration
has stepped up this year after
Beijing refrained from criticiz-
While there are echoes of an earlier bout of stress, market participants say it’s different now ing Russia for its invasion of
Ukraine and carried out lock-
downs in some cities to fight
Rebecca Feng ties and a former senior SAFE official. Covid-19.
feedback@livemint.com But he said China’s trade surplus is An Apple spokesman
sufficient to offset the outflows, and declined to comment. Asked
More than 90% of iPhones,
militaries fought a deadly
clash along their disputed bor-
der in 2020, and recently have
had a diplomatic dispute over
Indian regulators’ treatment of
Chinese smartphone maker
Xiaomi Corp.
For that reason, China-
based manufacturing contrac-
tors that do business with
Apple are looking more to
Vietnam and other Southeast
Asian nations, according to

A
withdrawal of foreign
capital from China and a
weaker yuan have
prompted comparisons
with 2015, when Beijing
faced a vicious cycle of outflows and
currency depreciation.
China has plugged many of the
holes that once allowed its citizens and
companies to move money out of the
country, making a destabilizing exo-
dus of homegrown funds less likely
this time around.
But after years of heavy interna-
tional buying of yuan-denominated
stocks and bonds, some market partic-
ipants are asking if those foreign flows
could dry up, depressing asset prices
and the currency. A second pillar of
the yuan’s strength is also shaking, as
the phenomenal export boom China
enjoyed during the pandemic recedes.
In China’s bond markets, April was
the third straight month of substantial
outflows, data from Chinese clearing-
houses show. Over the three months,
foreign investors reduced their hold-
ings by about 301.4 billion yuan,
equivalent to $45.03 billion.
Foreigners have been pulling out of
China’s equity markets, as well, selling
a net 33.2 billion yuan, equivalent to
$4.9 billion, of Chinese onshore stocks
through the Stock Connect trading
link with Hong Kong between the start
of March and Friday.
The yuan has weakened rapidly
since mid-April, after trading in a nar-
row range for months, and for the year
is down nearly 5% to about 6.69 to the
dollar, according to FactSet. On May
12 it touched its
weakest level in
nearly 20 months,
beyond 6.82 to the
dollar. “Inevitably, the questions have
started. Is this a repeat of the summer
of 2015?” analysts at Barclays wrote in
a note to clients in late April.
That year, a modest depreciation of
the yuan during a stock-market selloff
was followed by a rush of capital for
the exits. By the end of the year, China
had spent about $700 billion of its for-
eign-exchange reserves supporting
the currency.
The Barclays team, however,
argued the comparisons were over-
done. This time, Chinese policy mak-
ers haven’t pumped huge sums of
money into the financial system,
meaning there isn’t the same excess
liquidity looking for a way out. And
Beijing has become much better at
domestic capital controls, they wrote.
That helps explain why a 2019 depre-
the longer-term movement into Chi- generally about Apple’s supply iPads and MacBook laptops people familiar with the mat-
nese markets would continue. chain in April, Chief Executive are made in China by outside ter.
“China’s financial market has just Officer Tim Cook said, “Our contractors. BLOOMBERG Vietnam borders China and
opened up, and most of the foreign supply chain is truly global, and is already a smartphone manu-
capital is still in the state of increasing so the products are made adequate land, labor and sup- facturing hub for Apple’s lead-
allocation,” he said. “A large amount of everywhere.” He also said, “We plies to assemble iPhones and ing global rival, Samsung Elec-
foreign capital is about to come in.” continue to look at optimizing.” other electronics in giant fac- tronics Co. South Korea-based
Likewise, SAFE said China’s growth Apple was seeking to diver- tories. Samsung has generally limited
remains relatively rapid, with yuan sify away from China before Chinese Premier Li Keqiang its exposure to China manu-
assets offering diversification and Covid-19 spread around the said Thursday that Beijing facturing.
comparatively high returns. It said the globe in early 2020, but those wants to be a hot spot for for- India made 3.1% of the
recent depreciation was mostly driven plans were complicated by the eign investment and will work world’s iPhones last year, and
by international market trends and pandemic. Now the Cupertino, closely with foreign compa- the proportion is forecast to
short-term shifts in sentiment. “The Calif., company is pushing nies to make sure its rules are increase to 6% to 7% this year,
trend of foreign capital’s long-term again and telling contractors predictable. according to research firm
allocation to yuan-denominated assets where they should be looking Another advantage is that Counterpoint. China accounts
hasn’t changed,” the regulator said. to build new manufacturing Apple can sell many of its for almost all of the rest.
Like Mr. Guan, many market- capacity, the people involved made-in-China phones and One China-based manufac-
watchers argue that global investors in the discussions said. computers in the same coun- turing contractor, Luxshare
are likely to remain long-term buyers Lockdowns in Shanghai and try, with China often account- Precision Industry Co., has
Foreigners have been pulling out of China’s equity markets, selling a net of Chinese assets. They say the global other cities as part of China’s ing for about one-fifth of been making AirPods earbuds
33.2 billion yuan, equivalent to $4.9 billion. BLOOMBERG investment community is still under- anti-Covid policy have caused Apple’s global sales. Apple’s for Apple in Vietnam.
weight onshore assets, given the size supply-chain bottlenecks for Mr. Cook said in January that On recent calls with inves-
ciation past seven yuan to the dollar Still, global investors have plenty of of China’s economy and its markets, many Western companies. the company had the top four tors, Luxshare executives said
didn’t lead to major capital flight. reasons for caution. Beijing’s zero- and say that Chinese securities help Apple cautioned in April that bestselling phones in urban some clients were worried
Before the 2015-16 crisis, China’s Covid policies are causing economic make portfolios more varied. the resurgence of Covid-19 China. about problems with power
focus was curbing inflows of hot strains, and the effects of its numerous Others are less sanguine. “Is this threatens to hinder sales by as “Given the size of the supply and pandemic restric-
money betting on a rising yuan rather corporate crackdowns are still rever- reversal a blip or is it a major inflection much as $8 billion in the cur- domestic market and the well- tions–a reference to China’s
than stopping outflows, said Becky berating. The yield advantage Chinese point? That is the question that is con- rent quarter. established ecosystem for challenges. The executives
Liu, head of China macro strategy at bonds offer over U.S. equivalents has fronting markets right now,” said China’s travel restrictions manufacturing, China would didn’t name the clients.
Standard Chartered Bank. evaporated. And China’s reluctance to Logan Wright, director for China mar- have meant that Apple has stay at the head of the pack and Luxshare said these clients
That meant there were lots of chan- break with Russia over Ukraine has kets research at Rhodium Group. curtailed sending executives handle more value-added were asking manufacturing
nels for unauthorized outbound pay- heightened questions about geopoliti- Mr. Wright said it is too early to and engineers into the country work for companies like partners to look outside China
ments, Ms. Liu said. But no longer, she cal risk. answer that question, or to see if China over the past two years, mak- Apple,” an industry executive when they carry out key pre-
said: “These loopholes have now been The outflows are modest compared was also suffering significant domestic ing it hard to check production involved in the Apple supply liminary work for mass pro-
closed, and outflows under the legiti- with overall foreign holdings. As of outflows. But sustained outflows sites in person. Power outages chain said. duction, a stage known as new
mate channels have been, and will December, overseas entities held would be bearish for the currency and last year also dented China’s People who have spoken product introduction, or NPI.
likely continue to be, manageable.” some $1.2 trillion of Chinese asset values, he reputation for reliability. with Apple about its manufac- In this stage, contractors
China’s State Administration of onshore assets in yuan, Over the three said. Already, the People’s While many Western com- turing plans said the company translate a brand’s product
Foreign Exchange said it took a zero- data from China’s central months, foreign Bank of China is having to panies face similar issues in sees India as the closest thing blueprints and prototypes into
tolerance approach to violation of for- bank shows, split roughly investors reduced weigh trade-offs between China, Apple’s size gives it bar- to the next China, owing to its a detailed manufacturing plan.
e i g n - e x c h a n g e equally between stocks their holdings by the internal and external gaining power with contrac- large population and low costs. Apple has told its manufac-
rules. The regula- and bonds.
about 301.4 billion effects of changes in its
tors, said Ming-chi Kuo, a sup- Taiwan-based assemblers turing partners that it wants
tor, known as SAFE, The benchmark monetary policy, he said. ply-chain analyst at TF Inter- Foxconn Technology Group them to do more NPI outside of
said it had stepped Shanghai Composite has yuan, equivalent In trying to generate national Securities. “Only a and Wistron Corp. have China, people familiar with the
up efforts to prevent and control fund rebounded about 9% to $45.03 billion. robust growth while company like Apple can press already set up factories in India discussions said. If that hap-
transfers through illegal channels. since hitting its lowest simultaneously pursuing for such supply-chain shifts,” to produce iPhones mainly for pens, the non-Chinese sites
The pandemic has curtailed tour- point in nearly two years a zero-Covid approach, Mr. Kuo said. that country’s domestic mar- would be more likely to develop
ism, a previous source of household in April, and this past week the yuan China’s government is “fighting a los- Still, people in the industry ket, where Apple sales are into full-scale production hubs
outflows, said Gene Ma, the chief regained a little ground. Net stock ing battle, and something has to give,” said many of the reasons Apple growing rapidly. In April, rather than simply copying
China economist at the Institute of flows have recently turned positive. said Freya Beamish, head of macro has long kept China as its man- Apple said it has begun pro- plans developed in China.
International Finance. And while Some international investors are research at TS Lombard. ufacturing hub remain in ducing the latest generation of Such steps require consid-
there are legal routes for individuals to also sounding less pessimistic, sug- China is likely to end up expanding place: a well-trained work- iPhones, the iPhone 13 series, erable investment by suppli-
convert money, such as a personal gesting foreign buying could pick up the money supply, which it has held force, low costs relative to the in India. ers, analysts and suppliers
exchange quota of $50,000 a year, again. relatively steady recently, said Ms. U.S. and a deep network of Apple is now speaking to said, which makes them
banks have a lot of discretion in how “The outlook for Chinese equities Beamish. That in turn would pressure parts suppliers that is hard to some existing suppliers about uneasy at a time when the
they handle these operations, he said. has improved,” said Andrew Swan, the yuan, also known as the renminbi. recreate elsewhere without expanding in India, including global economic outlook is
Chinese policy makers have head of Asia ex-Japan equities at Man “Whichever way you cut it, you end years of effort. potentially production for clouded by high commodity
pledged to support the economy, GLG. He said the recent yuan selloff up with liquidity being created, either With the exception of India, export, the people said. prices, the war in Ukraine and
including the beleaguered internet- wasn’t too large or concerning, and to put a floor under growth or as a the pool of qualified workers One problem with India is stock-market gyrations.
technology sector. They have recently Chinese policy makers realized “now result of the fact that growth has in China exceeds the entire the difficulty China-based Cash is important in uncer-
taken steps to aid the moribund hous- is the time to stimulate the economy.” slowed and the financial sector can’t population of many alternative assemblers have setting up tain times, a contractor execu-
ing market, such as cutting longer- Foreign investors’ actions can take it. Either way, you get renminbi countries in Asia. Local gov- shop there because of chilly tive said, but suppliers need to
term benchmark loan rates and mak- weigh on domestic market sentiment, depreciation,” she said. “Capital out- ernments in China have relations between New Delhi go where Apple goes if they
ing mortgages cheaper for first-time said Guan Tao, global chief economist flows are a serious risk this year.” worked closely with Apple to and Beijing, analysts and sup- want to keep the business.
home buyers. at Bank of China International Securi- ©2022 DOW JONES & COMPANY, INC ensure its contractors have pliers said. The two countries’ ©2022 DOW JONES & COMPANY, INC

CHHATTISGARH TOURISM BOARD

2nd Floor, Udyog Bhavan, Ring Road-1, Telibandha, Raipur (C.G.) 492006
Tel. : 0771-4224611/22, Fax : 4066425, E-Mail : operations@visitcg.in
No. 507/III/OPS/CTB/2022 E-Tender Notice Date : 20.05.2022

Chhattisgarh Tourism Board invites tender for “Selection of Agency

for Refurbishment and Operations of Properties on Lease Owned by
Department of Tourism at Multiple Locations in Chhattisgarh” and
“Selection of Agency for Leasing of Properties Owned by Department of
Tourism at Multiple Locations in Chhattisgarh”.
Bid Publish Date Pre-Bid Meeting Bid Due Date
23.05.2022 06.06.2022 Time 14:00 Hrs. 23.06.2022 Time 15:00 Hrs.
Interested bidders can download tender documents from the official Website
https://eproc.cgstate.gov.in or www.chhattisgarhtourism.in Any revision,
clarification, corrigendum, addendum etc. will be updated only on the above
website and shall not be published in the newspaper. Sd/-
Managing Director
Chhattisgarh Tourism Board
LIVEMINT.COM NEWS WRAP MONDAY, 23 MAY 2022
NEW DELHI 09

TWEETS & QUOTES

David Sacks Nirmala Sitharaman Santosh Meena
Kal Patel @DavidSacks @nsitharaman Head of research, Swastika
@KalPatel Co-founder, Craft Ventures Union finance minister Investmart
Resident advisor, Oxford Startups: Instead of thinking We’ve taken steps to Market may remain volatile
Foundry about whether you are help poor & middle this week due to May month
Counting unicorn start- “default alive” vs “default class.Avg inflation expiry. On global front, min-
ups as a measure of dead”, think about whether during our tenure has utes of FOMC meeting will be
corporate success of a you are “default investable” remained lower than released on 25 May, which will
country is meaningless vs “default uninvestable” previous govts be an important trigger

LML plans to invest DESTINATION DAVOS SJVN portfolio

₹350 cr to expand jumps to 32k MW

L S
ohia Motors Ltd (LML) Electric, which has
announced its plans to roll out three
products next year in its second coming, is
looking to invest ₹350 crore in the business,
including in setting up a new manufacturing
plant, a top company executive has said.
LML earlier used to make the iconic Vespa
Scooter in collaboration with Italy’s Piaggio and
C Spa. The company in September last year
announced its plans to re-enter the market with
electric vehicles. In April this year, it said the
company is looking to unveil three EV products
— a hyperbike, an e-bike and an electric scooter
— by September and their subsequent launch
between February and August next year.
“We are looking at our first investment of
₹350 crore. This investment is planned for
product expansion, setting up a new
manufacturing facility and collaborations,
among others,” LML chief executive officer
Yogesh Bhatia .
tate-run SJVN’s portfolio has risen sharply
by four times to 32,000 mega watt (MW)
from 8,000 MW in a year, its chairman
Nand Lal Sharma said on Sunday.
While flagging off a mini-marathon from
Himachal Pradesh government secretariat,
Chhota Shimla, Sharma said that the last year
proved to be the best year in the journey of SJVN
so far.
During this year portfolio of SJVN grew
almost by four times, he said, adding that the
portfolio which was around 8,000 MW last year
is now around 32,000 MW.
The Mini Marathon was organized to
commemorate 35th Raising Day of SJVN under
Azadi ka Amrit Mahotsav, a company statement
said. The marathon was organized for seven
different categories consisting of SJVN
Employees, their family members and
outsourced workforce employed in SJVN. PTI
PTI

The Infosys Ltd pavilion at the World Economic Forum (WEF) in Davos, Switzerland..Political leaders, top executives and celebrities from the across
the world will be attending the Davos gathering, being held from May 22 to 26. BLOOMBERG

Lightstorm to invest $1 bn in Paytm Payments Bank expects RBI to allow it to

NCLAT has upheld orders of NCLT.

NCLAT dismisses
REUTERS
fibre, cable landing stations resume taking on new customers.

Paytm expects RBI

MINT

plea of Hinduja curbs to be lifted

P
aytm Payments Bank, which facilitates

T
he National Company Law Appellate
Tribunal (NCLAT) has dismissed the plea
of Hinduja Leyland Finance Ltd to
initiate insolvency proceedings against its
creditor Fly Express Logistics.
A three-member bench of the appellate
tribunal upheld the earlier orders of the
transactions on mobile commerce
Lightstrom to launch a network-as-a-service model in Indonesia, Nepal & Bangladesh platform Paytm, expects the central bank
to allow it to resume taking on new customers in
the next few months, a top executive told
Gulveen Aulakh “In the last 18 months, we have set up a state-of- access to the landing parties, bringing down the Reuters.
gulveen.aulakh@livemint.com the-art digital network in India spanning 12,000 cost of internet access by reducing overdepend- In March, the Reserve Bank of India (RBI)
plus km fibre network, 200 nodes connecting ence on a few locations and captive landing sta- ordered a comprehensive audit of the

Allahabad bench of the National Company Law
Tribunal (NCLT), which had on 5 April rejected
the plea of Hinduja Leyland Finance.
The NCLT had said the date of default was 24
December which falls within prohibition
period mentioned in section 10 A of the
Insolvency & Bankruptcy Code (IBC) and no
petition can ever be filed for initiation of
Corporate Insolvency Resolution Process
(CIRP) for a default occurring in such period.
This was challenged by the Hinduja Group
firm before the NCLAT contending that 24
December was wrongly mentioned as the date
of default in the petition before NCLT.
It wanted to file an amendment application
but since the petition was dismissed by NCLT
on the first day of the hearing, it could not do
so, contended Hinduja Leyland Finance.
L
ightstorm, a provider of infrastructure
platforms, aims to invest $1 billion over
the next three to five years in India and
Southeast Asia to increase its fibre net-
work capacity and cable landing stations,
a top executive said.
The company plans to double its number of
data centres and expand its fibre capacity by over
60% by December this year, as it anticipates a rise
in demand from telecom service providers, enter-
prises and startups ahead of 5G services launch-
ing in India.
Chief executive Amajit Gupta said that the Del-
hi-based company would also launch a network-
as-a-service model in Indonesia, Nepal and Bang-
ladesh later this year, part of the investments
aimed at India’s bustling data infrastructure sec-
PTI tors.
almost 50 multi-tenant data centres in the coun- tions. Currently, India has two main CLS in Mum- company’s IT systems, citing “material”
try’s five major economic hubs. We plan to bai and Chennai, which is not enough, Gupta said. supervisory concerns, without elaborating
expand this to 100 data centres and cloud loca- This will enable the provider to provide low-cost further, and barring it from taking on new
tions by the end of access to high-speed customers. The bank is working with the RBI to
this year,” Gupta fibre capacity from complete the IT audit and address the
said in an email. Lightstrom will build a network of open-access cable regulator’s concerns.
Fibre capacity open CLSs in India to launch new landing stations. “The process is underway and we think it
will rise to cover
20,000 km by the routes & provide neutral access to we“Later this year,
will be launching
should take three to five months from where we
are right now,” Madhur Deora, group chief
end of the year, the landing parties our network in financial officer at Paytm said.
while the number of Indonesia, connect- The central bank did not immediately
cable landing sta- ing 40 plus data respond to an email seeking comments. REUTERS
tions will also go up. The company tied up with centres, and offer high-quality fibre-to-the-home
US-based Cinturion Corp, a provider of subsea (FTTH) infrastructure on a Network-as-a-service
and terrestrial networks, for the Trans Europe (NaaS) model to service providers and internet
Asia System in India. The company will build a service providers in Indonesia. We will shortly
network of open Cable Landing Stations (CLSs) in connect services to Nepal and Bangladesh soon,”
JK Cement plans to
India to launch new routes and provide neutral Gupta said.
raise up to ₹500 cr

J
K Cement Ltd plans to raise up to ₹500
AMCs collect ₹1.08 crore via non-convertible debentures
GST Council may modify tax form (NCDs) on a private placement basis in one
trillion via 176 NFOs or more tranches.
The company’s board has recommended the
official said. proposal in this regard for approval of

R
iding on intense retail investors’ interest
and a sharp rally in equity markets, asset
management companies (AMCs)
launched 176 new fund offerings (NFOs) in 2021-
22, garnering a whopping ₹1.08 lakh crore.
With liquidity tightening, interest rates on the
rise, stock market consolidation in progress,
return to work from office, there could be
subdued interest in NFOs going forward. While
fixed maturity plans (FMPs) category could see
considerable launches, the same cannot be
expected from other categories, Gopal
Kavalireddi, head of esearch at FYERS, said.
Also, almost all AMCs have launched new
schemes across most categories, thereby fillings
The GST Council may consider modification
in monthly tax payment form. AFP
According to officials, the modified
form will provide clarity with regard to
gross input tax credit (ITC) due to the
taxpayer, the amount claimed in a
particular month and the net amount left
in the taxpayer’s ledger.
The modified form will help in
checking bogus ITC claims and ensure
that honest taxpayers are able to timely
avail the ITC benefit.
“The law committee of the GST Council
is looking at streamlining the GSTR-3B so
that there is further clarity on ITC
disclosure. The modified GSTR-3B is
expected to be put up before the Council
DLF’s net debt stood at ₹4,885 crore at the end of
FY21. It now stands at ₹2,680.
DLF net debt dips
shareholders in the next AGM of the company.
The fund raising will be at an interest rate
that will be determined by the prevailing
money market conditions at the time of
borrowing, said JK Cement in a regulatory
filing.
Besides, the board has forwarded the request
from certain individual/company belonging to
persons acting in concert with Promoters
Group seeking reclassification of their
shareholding in JK Cement to Public Category.
MINT For the quarter ended 31 March 31, JK
Cement, the promoter & promoter group, held
45.82% stake in the company. PTI

the earlier existing product gaps that was
created post-recategorization, he said.
“Gaps in investment objectives, interest of
investor in specific themes, availability of funds
for deployment, credibility and reputation of
fund managers, and performance of stock
markets could dictate the quantum of new
T
he Goods and Services Tax (GST)
Council is likely to consider
modification in summary return
and monthly tax payment form, GSTR-
3B, in its meeting next month, with a view
to check fake input tax credit claims and
expedite settlement of genuine ones, an
45% to ₹2,680 cr
in its next meeting,” the official said.
GSTR-3B, which is a summary
statement and monthly GST payment
Prestige to pump
R
form, is filed in staggered manner ealty major DLF’s net debt fell 45%
between 20th, 22th and 24th of every
month for different categories of
during the last fiscal year to ₹2,680 crore
on the back of better sales of residential at least ₹7,500 cr
taxpayers. PTI properties that improved its cash flow.

launches,” he added. PTI According to an investor presentation, DLF’s
net debt stood at ₹2,680 crore as on 31 March.
Its net debt stood at ₹4,885 crore at the end of
2020-21 financial year.
One million all-women ASHA volunteers honoured by WHO The net debt reduction of ₹2,205 crore in
FY22 was possible due to the consistent
reduction from operational surplus.
T
he Bengaluru-based Prestige Group,
which is entering the financial capital, has
drawn plans of investing at least ₹7,500
crore over the next four-five years to get a
foothold in the foremost realty markets in the
country, a top official has said.
The listed company, which has a presence in

I
ndia’s one million all-women ASHA volunteers were honoured by the World
Health Organization (WHO) on Sunday for their “crucial role” in providing
direct access to healthcare facilities in rural areas and their indefatigable
efforts to rein in the coronavirus pandemic in the country.
Accredited Social Health Activists (ASHA) volunteers are Indian
government’s affiliated health-care workers who are the first point of contact in
rural India.
Most of them gained spotlight during the peak of the pandemic in India for
conducting door-to-door checks to trace coronavirus patients.
The WHO director-general Dr Tedros Adhanom Ghebreyesus announced
six awards on Sunday to recognize outstanding contributions to advancing
global health, demonstrated leadership and commitment to regional health
issues. The ceremony for the awards, which were established in 2019, was part
of the live-streamed high-level opening session of the 75th World Health
Assembly.
DLF said that it is committed to further debt
reduction in the medium-term.
The cash flow from the sale of completed
properties and receivables from sale of
ongoing projects would be sufficient to
discharge all current liabilities.
The company said the launch of new
projects would help generate healthy cash
flows.
During the last fiscal, DLF’s sales bookings
jumped over two-fold to ₹7,273 crore, driven
by better demand for its properties, especially
luxury homes.
Its sales bookings stood at ₹3,084 crore in
PTI ASHA workers are government’s affiliated health-care workers. PTI the 2020-21.
the southern market and has delivered over 250
projects, will develop both residential and
commercial projects in the financial capital, its
managing director Irfan Razack said.
Razack said the group envisages developing at
least 16 million square feet of space in six
projects spread across the city and will be
conservative in its approach in the market,
which has seen quite a few developers facing
troubles. The projects include developing one
commercial property each in the Bandra Kurla
Complex business district and one in central
Mumbai’s Mahalaxmi as well, along with a 6
million sq ft integrated development project in
PTI the northeastern suburb of Mulund. PTI
10 MONDAY, 23 MAY 2022
NEW DELHI LONG STORY LIVEMINT.COM

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

INVESTMENT MISTAKES
TO AVOID IN HARD TIMES
Diversification was and continues to remain the most basic rule at the heart of investing

Stock market crashes can be followed by a weak economic scenario as well. In such a situation, it always makes sense to have some money in the bank because it allows you to make better decisions in life. MINT

Vivek Kaul annual return between 30 June 1999 and
feedback@livemint.com 18 October 2021, the day the Nifty 50 total
MUMBAI returns index reached its peak level, the
return is at 14.6% per year. And this after
three years is that investors should avoid
investing in fixed deposits. The logic
offered is pretty straightforward. The after
tax rate of interest on fixed deposits is
dictions” means “foregoing the pleasure At the same time, there was absolutely
mint
SHORT of being treated like gurus and prophets”. no talk about how governments which
STORY And that is something they cannot afford had the right to create money out of thin
to do. air, would go after cryptos. As it has turned

A
few days back a video went the stock market has gone really berserk lower than the rate of inflation and given Incentives are also at play. Investment out, bitcoin was no digital gold. It has
viral on the social media. One over the last two years. that, your investment is actually losing WHAT experts who represent financial institu- fallen by more than 55% from the peak
‘investment expert’ made a Clearly, the assumption of a return of value. Why do that when stocks can give tions make money when retail and other price it achieved in early November. Of
case for investing in stocks. 26% per year is totally random and has no you double digit returns in a year and Investment experts have investors go out there and buy stocks. The course, the price of gold has also fallen in
He first said that in India, on historical basis. Further, as writer and cryptos in a month (or even a day or two, mushroomed, thanks to the larger the assets under management of the the recent past, but the fall is nowhere as
an average, everyone owns a house worth author Morgan Housel says in a recent who knows)? spread of social media. Some of institution they work for, the more the high as that of bitcoin and other cryptos.
₹15-20 lakh. Next, he suggested that if blog: “Past performance increases confi- A lot of the younger crowd fell for this their advice, which seemed to money they make. There is reason why gold has been a store
such an individual were to sell this house dence more than ability.” and it worked for a while, until it didn’t. work well during the bull market, Further, social media gurus these days of value across centuries.
for ₹15 lakh and invest the money in qual- Also, it is worth remembering that the The crypto bros made snide remarks at is a strict no-no now. have deals with stock brokerages which Along similar lines was the story sold
ity stocks which earn 26% per year, he data availability of the Indian stock market those who invested in fixed deposits ask- incentivizes them to encourage their fol- before the initial public offerings of many
would be sitting on ₹15 crore at the end of is limited to only the past two to three dec- ing them to have fun staying poor. lowers to continue buying stocks. In this digital platforms, from Paytm and Zomato
20 years. If the house was worth ₹1.5 crore, ades and that’s too small a period to be Such behaviour stems from overconfi- AND scenario, it is important to remember the to PB Fintech and Nykaa. We were told
the value of the investment would be ₹152 making confident forecasts based on past dence. As Dan Gardner writes in Future specious association of money and intelli- that a great digital future awaits us— these
crore at the end of 20 years. data, as many experts tend to do. Babble–How to Stop Worrying and Love the Many investment experts gence that John Kenneth Galbraith talks companies would possibly be monopolies
Dear reader, please hold this thought Across the world, the returns from Unpredictable: “Overconfidence is a uni- advised that investors should about in his book A Short History of Finan- or duopolies in their area of business.
for a while. investing in stocks, over a longish period versal human trait closely related to an avoid FDs as stocks can give cial Euphoria. Hence, we should pay a very high price for
In the monetary world as it has existed of time tends to be better than other equally widespread phenomenon known double digit returns. Many fell for Other than the incentive of experts, these stocks.
post 2008, the central banks of the rich investment classes. Nonetheless, there as “optimism bias.” Ask smokers about the this, especially those who there is also the incentive of TV channels As it turned out, the high prices were
world have printed a lot of money and can be very long periods where the stock risk of getting lung cancer from smoking haven’t seen a bear market. and other forms of visual media at play. just a reflection of too much money chas-
driven down interest rates. At the start of market does not give any returns. Take the and they’ll say it’s high. But their risk? Not Jim Crammer, a popular host on CNBC in ing stocks. Once that stopped happening,
2020 as the covid-pandemic spread, the case of the Dow Jones Industrial Average so high. Starting a new business? Most fail, the US, once explained this succinctly with the foreign institutional investors
central banks of the developing world (DJIA), the most famous American stock but mine won’t.” MOREOVER when he said: “Look, we’ve got 17 hours of selling out, the stock prices crashed. And
started doing the same. market index. It took 25 years from 1929 to Investors have a similar overconfi- live TV a day to do.” The easiest and the so did the stories.
This dynamic has essentially ensured 1954 to recover from the stock market dence, especially those who have rarely Buy on dips is another favourite cheapest to fill up time on TV is to get The point: stories about company earn-
that investors looking for higher returns crash of October 1929. Similarly, the Nik- seen a bear market. The trouble is that with market experts. For experts on and let them say what they ings not mattering can be sold for some
have poured money into stocks, sending kei 225, Japan’s premier stock market when you are young and have seen only someone with limited savings want to say. time, but not all the time. Ultimately,
stock prices soaring and in the words of index, reached its all-time high in Decem- one market cycle, you like to assume that or a lot of debt or a job which every company needs a business model
Ted Lamade, managing director at The ber 1989. More than three decades later, things will continue to be as they are and is on a shaky ground, this is a STORIFICATION where its revenues are greater than its
very risky strategy.
Carnegie Institution for Science, this has it’s still nowhere near that level. The point
“created a generation or
two (or even three) of
is there are no guaran-
tees despite what stock
you will not make the same mistakes as
people have made in the past. As Housel
puts it: “I don’t think there’s any way to
S tories appeal more to the human mind expenses and it makes a profit. As Lamade
than complicated
calculations. Many
puts it: “Twenty and
thirty-something inves-
investors with an ele- Stories appeal more to the market experts like to understand what a bear market feels like ground, buying on dips is a very risky investment experts It is important for millennials tors are going to experi-
vated opinion of their human mind than say when the bull market until you’ve lived through one.” strategy. The other important thing to understand this and use and zoomers to understand ence a world in which
abilities”. is on and even when it Many millennials and zoomers haven’t understand here is that every person can it to the hilt to sell an stocks need more than a
The investment complicated calculations. goes away. lived through a bear market. Hence, it’s mentally and financially take on a certain investment. that while return on good story to go up.”
expert whose story we Many investment experts It’s their job to be posi- important for them to understand that amount of risk in their lives. The trouble is Take the case of the capital is important, the They would need solid
started this piece with is tive and sound confident while return on capital is important, the most investors do not think this through. bitcoin. The story sold earnings.
an excellent example of understand this and use it to all the time. In doing this, return of capital is even more important. Also, stock prices never fall in isolation. was that government return of capital is even To conclude, diversi-
this kind of overconfi- any nuance that should In this scenario, it always makes sense Stock markets are falling now because backed central banks fication was and contin-
dence. the hilt to sell an investment. come with the investing to invest a part of your savings in fixed central banks all across the world are rais- have the liberty to print more important. ues to remain the most
But is there a real process goes out of the deposits. Also, it is worth remembering ing rates to rein in inflation. High inflation paper money. This lib- basic rule at the heart of
basis for this? Let’s look at the Nifty 50 window. Nuance makes experts sound that stock market crashes can be followed can derail the most robust economic erty would ultimately lead to high infla- investing. Or as the old cliché goes, don’t
Total Returns Index and the kind of weak and confused, which is something by a weak economic scenario as well and growth. tion. Hence, you should buy bitcoin put all eggs in one basket. The realization
returns that it has generated over the investors don’t like. in this situation, it always makes sense to Further, at the beginning of 2020, stock because there is an overall limit to the of how important this cliché is sets in only
years. A total returns index, along with In the last few years, investment experts have some money in the bank because it prices fell due to the spread of the covid number of bitcoins that can be created. when things start to go wrong, as they
capital gains, also takes dividends given by have popped up all over the place, thanks allows you to make better decisions in life. pandemic dragging down global eco- Bitcoin was also compared with gold. have with stock prices and the crypto
stocks into account. The Nifty 50 is an to cheap internet and spread of the social nomic growth. Similarly, in 2008, stock Like the supply of gold does not go up sud- crash in the recent weeks. If you had bet all
index which is a good broad representa- media. Some of their advice which seemed ‘BUY ON DIPS’ prices crashed after it became clear that denly by a huge amount, so was the case your money on stocks and cryptos, you
tion of the overall stock market as it repre- to work well during the bull market is a
sents around two-thirds of the free float strict no-no now. In fact, it was a strict
market capitalization of the stocks. The no-no even during a bull market, but
T his is a favourite with market experts
particularly on days when stock pri-
ces are falling big time. On the face of it, it
some of the biggest financial institutions
in the world were in trouble. The point is
that it isn’t easy to be brave when others
with bitcoin. would be in trouble right now. If you had
What these story-tellers avoided telling spread it across, stocks, mutual funds,
was that while there was a limit to the fixed deposits and gold, the value of your
data for this index is available from 30 investors fell for it and many of them are in is a very safe thing to say. The trouble is no are fearful simply because there is a reason number of bitcoins that could be created investment would have taken some beat-
June 1999 onwards, a period of close to 23 a mess now because of it. one really knows where the dip will end. why others are being fearful. there was no limit to the number of differ- ing, but you would still be sleeping rea-
years. Also, investing is a very individual thing But experts don’t bother with such ent cryptos that could possibly be created. sonably well at night. And what is possibly
Between then and now, the average ‘DON’T DO FIXED DEPOSITS’ with the situation varying from person to nuance. The trouble with the experts In fact, if one were to put this simplisti- more important than that?
annual return on the Nifty has been
around 13.6%. If we calculate the average O ne advice many investment experts
have given out over the last two to
person. For someone with limited savings
or a lot of debt or a job which is on a shaky
being nuanced as Gardner puts it is that
“toning down the confidence of their pre-
cally, anyone who has the technical
knowledge can do so in their backyard.
Oh! Definitely don’t sell your house.
Vivek Kaul is the author of Bad Money.
LIVEMINT.COM MINT MONEY MONDAY, 23 MAY 2022
NEW DELHI 11

‘Index funds are low-cost, simple POWER

POINT
for retail investors to understand’ NITESH BUDDHADEV

We welcome your views and comments at

mintmoney@livemint.com

Neil Borate
neil.b@livemint.com
portfolio where someone is able to
take a lot more risk. So it’s personal-
ized and low cost.
DO YOU HAVE TO PAY

P TAX ON FOREIGN
ratik Oswal, head, passive What kind of AUM (assets under
funds at Motilal Oswal AMC, management ) or customer base
says goal-based investing is do you have?
the best form of investing.
Glide Invest, the robo advi-
sory firm that he has set up, suggests
We have about 40,000 customers
right now. We built that over the last
year and a half. Most of these custom-
TRAVEL EXPENSES?
portfolios for passive funds and is ers are already invested in direct plans

A
aimed at retail investors. Edited in mutual funds. So that is the segment s the pandemic recedes, traveling is on everyone’s mind.
excerpts from an interview. that we are looking for. We also offer a As foreign travel gains momentum in 2022, it helps to be
platform on the app that helps you aware of the implications of foreign travel on income tax
When did you start Glide Invest? invest in direct funds. return filing and disclosures.
I was actually working for an auto- You don’t accept customers of Individuals are required to disclose any foreign travel
mated wealth advisory platform in the Motilal Oswal group entities? expenditure above ₹2 lakh in their income tax return (ITR). This
US where we were doing pretty well. If you’re already a customer of Moti- expenditure may be incurred by the individuals themselves or
We raised a lot of venture capital, all of lal Oswal broking or any other busi- spent on behalf of any other person. For example, Madhu trav-
that. And when I came back, I saw the ness, then technically you’re not els to Dubai in March 2022 and spends ₹ 2.1 lakh on this. Her
power of helping investors automati- allowed to also be a customer or client income from business/profession is ₹2.4 lakh and so she
cally invest in savings into capital mar- of Glide Invest, as per Sebi regulations believes she is not required to file her tax returns.
kets. I think direct plans were just separating distribution and advice. So Generally, individuals are required to file tax returns only if
introduced at around that time. But I we are not able to onboard any cus- their total income exceeds the maximum amount not chargea-
saw that there were not that many tomers who are already within the ble to tax, subject to certain conditions. In the Finance Bill,
products available in the market. ecosystem, which has been a bit of a 2019, with the objective of ensuring better governance, the gov-
That’s what prompted me to launch challenge because those are obviously ernment has through an amendment included the following
these passive funds. And that’s how easier to convert. AMC (asset manage- categories and widened the scope of income tax-return filing
I’m here and heading the passive funds ment company) investors can, of requirement for individuals/HUFs who were otherwise not
business at Motilal Oswal AMC. course, be clients of Glide invest. required to file a tax return:
We started working on this at the the core of your portfolio, and this is on the debt side. So far, the innovation ing. So a lot of the growth that you’ve How do you maintain a sort of a 1. Those with an electricity consumption bill of over ₹1 lakh.
end of 2019. The product is very simi- because they’re very long term. has happened on the held to maturity seen is completely organic. The idea is Chinese wall between the AMC 2. Those with foreign travel expenditure for self or someone
lar to a robo advisor in the US. But There’s really not any need for inves- (target maturity) sort of debt funds that potential investors come to the and Glide Invest? else of ₹2 lakh or more.
unlike the US where there’s a market tors to sell index funds, because they which expire. And the problem with app and answer a few questions there. The teams are completely separate. 3. Those with a deposit of an amount or an aggregate of the
for wealth management across differ- don’t underperform the market. Obvi- expiring debt funds is that, as a long- Those questions allow us to under- There will be some Motilal Oswal amounts exceeding ₹1 crore in a current account.

‘
ent spectrums, wealth management in ously, you have some tracking error, term investor investing for, say, stand the type of investor you are funds in our portfolio but we offer 4. Persons claiming the benefit of tax exemption for long-
India is fairly concentrated at the top, but over time, it’s basically betting on 10-15 years, you will and, depending on other AMC funds as well. Our backend term capital gains (LTCG) under various provisions of section
say, 1% or 2% of the population. You market returns. So there’s no bad per- end up having a tax that, we will offer rec- engine also offers some tax optimiza- 54 of the income tax (I-T) Act.
have to be able to invest ₹30-40 lakhs formance of index funds. They’re low event when the fund Unlike most startups, ommendations. The tion. Your incremental investments This amendment ensured that peo-
to be able to get the services of some- cost, and they’re relatively simple for a matures. Then you we don’t spend on second thing is when will change, depending on where Foreign travel ple who have the ability to incur large
one who comes to your retail investor to invest that back into marketing. So a lot of a customer comes in money should go. So suppose tomor- expenditure expenditure do not evade the liability
house or comes to your
office and gives you
m INTERVIEW understand. So that’s
why we’re offering
debt funds. So we
use those funds as the growth that you’ve mind. I strongly
with a certain goal in row, you have a 50:50 portfolio
between equity and debt and it above ₹2 lakh of filing tax returns or escape from
paying tax.
personalized advice. these index fund port- the debt allocation. seen is completely believe that goal- becomes 60:40, automatically your has to be Now, since for FY 2021-22, Madhu
And what about the investor who folios. But compared to say organic based investing is the fresh investments will get deployed in disclosed has spent more than ₹2 lakh on for-
wants to invest say ₹10,000 or Index funds have built a track about four years ago,
Pratik Oswal
best form of invest- debt rather than equity. Most of our in the ITR eign travel, she will be required to file
₹20,000? There is no help. And this is record in India on the equity side there are a lot more CEO, Glide Invest ing. Even retirement investors are SIP investors and hence tax returns and disclose the expendi-
going to be most of India’s population. and debt side, what is your think- options today. is actually a goal, this kind of tax-efficient rebalancing ture in her ITR.
So that was the sort of opportunity that ing? So how do people technically. And, we works well for them. Let’s take another example. Suppose, Mina travels to Dubai
we are targeting. On the debt side, to be honest, there invest through Glide? also account for a customer’s risk pro- What are your charges? in March 2022 and spends ₹2.1 lakh. She does not have any
You offer index funds in your port- are not many index funds. So I think Glide invest is primarily a business- file. We recommend a conservative Currently, it’s free. But we are hop- income and hence does not regularly file income tax returns
folios? you will see over the next two or three to-consumer (B2C) app. Unlike most portfolio for someone who is not able ing to start subscription plans over the (ITR). All the expenses for the trip are sponsored by her son,
Yes, exactly. Index funds are used as years a lot more innovation happening startups, we don’t spend on market- to take as much risk and an aggressive next 8-10 months. Alpesh. Now, since for the FY 2021-22, Alpesh has spent more
than ₹2 lakh on foreign travel, he will be required to file an ITR
and disclose the expenditure in his ITR even though he has not
travelled but has only spent the amount.

Save Now Pay Later startups seek to tie savers to brands Here’s another example. Say, Asha travels to Dubai on a com-
pany sponsored trip in March 2022 and the company incurs an
expense of ₹2.1 lakh on this trip. She believes that since it is for-
eign travel, she will have to file an ITR and disclose this in it.
Neil Borate lakh and you can set aside (Ample) and partners in the funds. Multipl has a Sebi regis- money with a payment gate- However, the requirements stated above are only for expendi-
neil.b@livemint.com ₹10,000 per month over 10 travel and electronics category tered investment advisor (RIA) way but plans to eventually ture incurred from one’s own source of income and hence com-
months for it. There are multi- also. We will initially focus on licence in one of its group enti- remit your money to the mer- pany-sponsored foreign travel is out of its purview. Now, sup-

A
new generation of
startups is turning the
concept of ‘Buy now
pay later’, or BNPL, on its
head. Fintechs such as Multipl,
Hubble and Tortoise operate
on the ‘Save now pay later’, or
SNBL, model in which users
save money with merchants
and benefit from the discounts
that come with advance pay-
ments. All three platforms,
Multipl, Hubble and Tortoise
have raised funding. On 12
May, Multipl announced a pre-
series round from Kotak Secu-
rities and others.
Here’s how it works
Let’s say you want to buy an
iPhone. The phone costs ₹1
ple ways in which you can buy
the phone.
First, you can buy it now
using a credit card or buy
BNPL loan and pay back the
lender in 10 instalments
(EMIs). Second, you can put
the money in a bank FD or
debt mutual fund and buy it
when your savings reach ₹1
lakh (helped along by interest).
However, there is a third
option. In this option, your
instalments go to the mer-
chant as advances or they sit in
an escrow account with a third
party designated for a specific
product from a specific mer-
chant (for example, an
iPhone). In return the mer-
chant gives you a discount. If
you factor in the merchant dis-
count, your ‘return’ on savings
is a lot higher than just keeping
aside money in the bank.
“Our users for iPhones plan
will get a cashback of 10%. We
partnered with Imagine Stores
travel, electronics and jewel-
lery. Your money will go to
merchants as advance, but you
can change your mind and
withdraw your savings at any
time before the actual pur-
chase is completed.”, said
Vardhan Koshal, co-founder,
Tortoise.
The startups have embraced
differing models. According to
Hubble’s website, your money
is deposited in an escrow
account with its partner bank
and you get a 10% discount on
your purchases through the
platform. Hubble is able to
offer this flat percentage off
through a mixture of using
merchant offers and its own
ties. It allows you to either
invest your money in mutual
funds, using portfolios sug-
gested by it or to use the
money as payment advances.
In the former option, you can
‘tag’ merchants and allow
them to make you offers for
discounts. These offers get
crystallised when you eventu-
ally buy from them. However
since the money sits in a
mutual fund in your name, you
are free to buy from a third
party altogether or not buy at
all. Multipl also permits you to
save money directly with the
merchant concerned and avail
discounts. The third platform
Tortoise currently holds
chant straight away.
As a consumer though,
there are some risks. The plat-
forms say you can change your
mind anytime. However the
merchant may get into a dis-
pute with the platform and not
honour the discount or return
your money. Also, the plat-
forms do not pay out any inter-
est if you change your mind
and withdraw your money.
You only get your principal
back. You might lose out on
competing deals once you
start paying advances to a par-
ticular merchant. However,
for fans of particular brands,
this may be a savvy method of
bagging some discounts.
pose after her official trip, she plans to extend her visit and go
to Abu Dhabi and her personal expenditure comes to ₹2.5 lakh.
She will have to file ITR and make the disclosure for ₹2.5 lakh
spent out of her own source of income.
It is pertinent to note that even if the amount is spent in for-
eign currency and is equivalent to ₹2 lakh or more, the afore-
mentioned income tax-return filing and disclosure require-
ments are applicable. Also, the limit of ₹2 lakh stated above is
the aggregate limit for a financial year.
Suppose, during FY 2021-22 Harsh travelled to Nepal and
spent ₹80,000 and then he travelled to Dubai where he spent
₹1 lakh. After that, he visited Singapore and spent ₹90,000. He
believes that he is not required to file an ITR or disclose these
expenses as he spent less than ₹2 lakh on each trip. This belief
of Harsh is incorrect as the limit of ₹2 lakh is at the aggregate
level for the financial year.
Since his aggregate foreign travel expenditure exceeds ₹2
lakh, Harsh will be required to file an ITR and disclose these
expenses.
Nitesh Buddhadev is founder of Nimit Consultancy.

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12 MONDAY, 23 MAY 2022
NEW DELHI VIEWS LIVEMINT.COM

OUR VIEW MY VIEW | THE INTERSECTION

BLOOMBERG

A Rajya Sabha rebalance must

go with Lok Sabha expansion
India’s federal interests demand that our less populous states get an equal voice in the Upper House

Rejecting charges of centralism, Ambed-
kar explained that “The States, under
our Constitution, are in no way depend-
ent upon the Centre for their legislative
or executive authority. The Centre and
the States are co-equal in this matter.”
The Constitution strikes a balance
between popular will, exercised by
the Lok Sabha, and the interests of states
NITIN PAI through the Rajya Sabha. This is mod-
is co-founder and director of The elled more on the US Senate than on the
Takshashila Institution, an independent British House of Lords. Our Upper
centre for research and education in House doesn’t represent the interests of
public policy hereditary lords and theocrats, but as its
accepted. However, this is only half the
story. The principle also demands that
the standing of states not get diminished
relative to each other, or to the Union.
For this, we must first correct a grave
mistake made by the Parliament and
Supreme Court. The 2003 amendment
to the Representation of People’s Act
that did away with domicile require-
ments for Rajya Sabha candidates and
the 2006 apex court verdict in Kuldip
Nayar vs Union of India that upheld it
have undermined the federal balance.
As much as I respect Manmohan Singh’s

Time for us to work out

name suggests, it is a chamber where intellectual and political credentials, I
states negotiate their interests. The Lok cannot accept that he was in any position

M
y previous column on how Sabha can be constituted on the basis to advocate the interests of Assam, which
India’s enlightened adoption of of population, but the Rajya Sabha’s he represented in the Rajya Sabha. The
linguistic pluralism has allowed capacity to stand up for the states’ inter- Upper House has become an instrument

a universal basic income it to escape the fate of its subcontinental

neighbours was published, coinciden-
tally, the day angry mobs stormed the
Sri Lankan prime minister’s official resi-
ests was to remain unchanged. Even if
the Rajya Sabha makes for an unequal
federation—Upper House seats are also
allocated on the basis of population—to
in the hands of party leaders, like the Lok
Sabha after the anti-defection law. Par-
liament has been reduced to a mere
numbers game, with special effects.
dence, forcing him to resign and seek the extent that it functions as the voice of Students have to prove they have lived
refuge in a military facility. The triggers states, it serves a federal purpose. in a state for seven years before they can
A report on inequality has revived India’s debate over an income transfer as a primary safety of the island’s crisis might be recent, but Like the Tamil adage on garlands in get admission to professional courses
the roots go back to 1956 and its failure to the hands of monkeys, we have allowed under the state quota. A citizen must
net for all except opt-outs. If inequality is to be addressed, we need to rethink redistribution construct an equitable republic for its popular fashions and political exigencies provide proof of residence to register as a
two main ethnic groups. I’m underlining to undermine the federal structure. If we voter in the local and state elections.
this again because the basic structure of had stuck to the design, then delimita- Many states have domicile requirements
the state can propel a society’s growth, tion exercises would not have raised the for government jobs and welfare entitle-

I
ndia’s debate on the need and feasibility
of a universal basic income (UBI) as an
elementary safety net for all our citizens—
except opt-outs—got fresh wind last week
after the Economic Advisory Council to
the Prime Minister released a report on
inequality prepared by the Institute for Com-
petitiveness. While its broad focus is on the
nature of inequality and poverty in the country,
two suggestions made have caught attention. It
advocates fallback job options for urban Indians
along the lines of the Mahatma Gandhi National
Rural Employment Guarantee Scheme, which
assures rural residents 100 days of pay-for-work
each year for the asking. More significantly, the
report also supports a UBI, an idea that is still
seen as somewhat radical in policy circles. Little
is known of the government’s receptivity to
these proposals, but they should both be on the
Centre’s agenda for a good reason. Regardless
of divisions in opinion over the reality and
angularity of a ‘K-shaped’ recovery from covid,
or over poverty levels in the country, inequality
demands a bold policy response.
economic classes. Credible reports suggest that development and satisfaction, or their deep anxieties, fears and grievances as ments. Yet, the Rajya Sabha now does
even middle-class homes were pushed into opposite. In political organizations, as they have since Indira Gandhi’s times. not. We thus have people who cannot
with much else, design matters. States in the south and the east are con- vote in or stand for a local election
penury. In times of hardship, practical objec- Linguistic pluralism is the first of the cerned about the prospect of the more in a state representing it in the Rajya
tions raised by critics must not stand in the way three major design elements responsible populous north gaining Lok Sabha seats. Sabha. Domicile requirements must be
of an urban job guarantee for the needy. for Independent India’s unity, develop- The fact that delimitation has been brought back.
Inequality is a more complex problem than ment and dynamism. The second is our postponed twice since the 1970s sug- The Upper House must also be
poverty, but it accentuates India’s need for an federal structure. gests there are deep misgivings among reformed in line with Ambedkar’s vision
When I was a high school student, our states over their status and power within of equality among states. In the US, tiny
even more foundational safety net. For welfare civics curriculum taught us that India is the federal structure. These qualms are Rhode Island and giant California both
efficiency, we should institute leak-proof direct “federal in structure but unitary in re-emerging now that delimitation is in have the same number of representa-
transfers covering all adults. No doubt, a UBI spirit”. Contemporary public discourse the offing. That is why it is crucial to take tives in the federal Senate. Here, Mani-
scheme would be expensive. For about a billion celebrates “cooperative federalism” as a an enlightened national approach to the pur has a single Rajya Sabha member,
beneficiaries, it would cost an annual ₹12 trillion positive model of governance. matter, not partisan or parochial ones. who does not even have to be from the
Indian federalism differs from Ameri- The Lok Sabha must be expanded and state, while Uttar Pradesh has 31. Design
just for each adult to get a monthly ₹1,000. But can or European federalism in that pre- constituted on the basis of population: has consequences. Perhaps the Supreme
what looks like premature welfarism today existing states did not come together and We can devise an optimum formula for Court was right to opine that the Rajya
could well be affordable tomorrow as central constitute a federation. It is also true that this, but our Constitutional principle Sabha is not akin to the US Senate, but in
coffers expand, especially if we snip inefficient the unitary spirit of the Indian republic is demands that population be the basis. If the interests of national unity, we should
fiscal expenses and urge the non-needy to opt a deliberate act of nationalism. Yet this means highly populated northern make it so. Let all states have the same
Indian federalism is still federalism. states get more seats, then that has to be number of seats in the Rajya Sabha.
out. An eligibility cut-off is sure to be proposed,
but a denial criterion could defeat its inclusivity
and pose barriers to upward mobility at that
level. As for the worry of workers slackening off,
an assured income would act as a belly-filler
at best, so that should not deter an Indian UBI
plan. In general, misgivings over a backward www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Wednesday, May 23, 2012 Vol.6 No.121 `3.00

16,338.99
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An inflation-led widening of our glaring gaps bend in an economy’s labour-supply curve Where justice is denied,
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Lenders give

where ignorance prevails,

IITs pitch for QUICK EDIT
ultimatum
Numbers game subjective JEE
to improve
Half a

expansion that boosted asset values as a side Ioana Marinescu on the behavioural effects of to Haldia
Petrochem
B Y A NIEK P AUL &
student quality
B Y P RASHANT K . N ANDA
prashant.n@livemint.com
reprieve
F inally, the Union
government has
introduced the Micro

and where any one class is

R OMITA D ATTA ························· Finance Institutions
························· NEW DELHI (MFI) Bill in Parliament,
KOLKATA

T
effect, even as the brunt of the pandemic shock cash transfers (bit.ly/3sPRRm2) found just a 1%
he Indian Institutes of nearly one-and-a-half

T he lenders of Haldia Petro-

chemicals Ltd (HPL) on
Monday told the firm’s sparring
Technology (IITs) are plan-
ning to switch to a subjective
question-based test from the
years after an Andhra
Pradesh law that severely
curbed the industry.
co-promoters—US-based ven- current multiple-choice-based A central law to
ture capitalist Purnendu Chat- joint entrance examination regulate MFIs will be
terjee and the West Bengal gov- (JEE) after criticism over the de- much better than a
ernment—that working capital teriorating quality of students. collection of many state
loans wouldn’t be forthcoming The new test will seek to eval- laws any day. In the

was borne by the asset-poor. Large numbers drop in labour supply induced by a 10% income made to feel that society is in
unless they made a “commit- uate the knowledge and analyt- latter, the compliance
ment in writing” to yield control ical ability of aspiring students. costs alone would have
to “an investor with deep pock- Critics of the current format, killed MFIs. Yet, the
ets” or themselves infused cash which comprises two multiple- measure may be too late.
into the beleaguered firm. choice papers, include Infosys By now, MFIs have been
Though the state government Ltd chairman emeritus N.R. demonized so badly that
is keen to sell its 40% stake in Narayana Murthy and other ex- it will take them years and
HPL, The Chatterjee Group ecutives and alumni. a patient slog to establish
(TCG) isn’t willing to cash out. The move is also being seen themselves, leave alone

suffered a severe income squeeze. For our vast boost. Earlier research by Abhijit Banerjee and
TCG owns 41% in the firm. For by some academicians as a arrive at profitability.
nearly seven years, the two compromise between the gov- The episode should

have been fighting legal battles
over HPL’s control, and at the
core of the dispute is TCG’s
claim to a majority stake in the
firm.
“In view of the ongoing legal
battle, it is unlikely that the co-
ernment and the IITs over a
common entrance exam for all
Setting the stage: Despite its back to the wall, the Congress party used its third anniversary celebration engineering schools. The gov-
to signal that it had nosed ahead in the electoral game to elect the 13th President of India. The ernment wants to conduct a na-
presence of Samajwadi Party (SP) chief Mulayam Singh Yadav and Rashtriya Janata Dal (RJD) chief tionwide objective-type selec-
Lalu Prasad on the dais alongside the political supremo of the Congress-led UPA, Sonia Gandhi, was a tion test for millions of students
clear signal that the ruling coalition had outwitted the opposition and had cobbled up the requisite aspiring for such colleges, in-
an organized conspiracy to
teach the government
something: although its
reach is vast, it cannot
deliver services—in the
instant case, financial
services—effectively.
The law needs to be

informal sector, it has been a triple whammy. others, outlined in ‘Debunking the Stereotype
promoters will agree to bring in
cash,” said an HPL director.
“The only way to save HPL now
is by selling it to an investor with
numbers to ensure election of its nominee. Gandhi has been working the phones and personally meeting cluding the IITs. debated carefully.
allies as well as ‘friendly’ political parties such as the SP and RJD to gauge the mood and rally support The IITs themselves now fa- While regulation by
for the Congress party’s choice. In the political battle with an increasingly aggressive opposition, vour a two-tier selection pro- the central bank is
ensuring the election of its candidate is vital not only for the coalition, but also for the Congress, which cess, where the top rank hold- fine, any regulatory

oppress, rob and degrade

deep pockets.” This person did
not want to be identified.
Time is running out for HPL,
which has already drawn nearly
`2,000 crore of working capital
has witnessed a sharp decline in its political profile following back-to-back defeats in recent elections to ers in the objective test will be discretion on the part
state assemblies. It would provide it a crucial breather ahead of a predictably stormy monsoon session eligible to appear for a final of the government
of Parliament and the onset of the next round of elections to the state assemblies. See Page 24 should be avoided.
TURN TO PAGE 2®

Modest earners had been hit hard by a shock- of the Lazy Welfare Recipient’ (bit.ly/3G7zOgw),
loans, and “desperately” needs
more money to keep its plant
running, said another director, REGULATORY ISSUES LIMITED RESOURCES
who also declined to be named.
Unless the co-promoters
“principally agree” to yield con-
trol and make a firm commit-
Vodafone may skip Families find few avenues for care
IPO this year and treatment of the mentally ill
them, neither persons nor
ment to take steps in that direc-
tion, the company may have to

and-awe drive for formalization a few years had similar findings for emerging economies.
soon suspend operations, ac-
cording to the two persons cited
above, because it wouldn’t have
money to buy naphtha—the
main feedstock.
HPL’s debt is approaching
RAMESH PATHANIA/MINT
B Y M AKARAND G ADGIL tariffs would soar if Trai’s rec- BY M A L I A P O L I T Z E R &
makarand.g@livemint.com ommendation was accepted. V IDYA K RISHNAN
························· Trai has also proposed re- ·························
MUMBAI farming, or switching, superior NEW DELHI

TURN TO PAGE 2® V odafone Group Plc’s India

unit said on Tuesday it
may not go ahead this year
quality spectrum bands of es-
tablished carriers such as
Vodafone India with a relative-
S antosh Kumar Bhowmik, a
67-year-old retired profes-
sor, sits erect on a marble bench

earlier, while an overall slowdown of India’s Even if it does induce some laziness, it would be
NOTE TO READERS
The Media Marketing Initiative on
Pages 15 is the equivalent of a
paid-for advertisement, and no
Mint journalists were involved in
creating it. Readers would do well
to treat it as an advertisement.
with plans for an initial public
offering (IPO) of shares be-
cause of uncertainty over the
rules for the auction and pric-
ing of radio waves.
“If we see the Telecom Regu-
latory Authority of India (Trai)
recommendations happen,
then it, for sure, would be diffi-
ly inferior band before their
permits are renewed starting
in 2014. A panel of ministers
has the final say on the auction
rules.
Vodafone has previously
talked about plans for an India
IPO without setting a definite
time frame. The British phone
property will be safe.
at a cafeteria at Dilli Haat, an
outdoor food plaza and handi-
crafts bazaar in Delhi, sipping
Sprite from a plastic cup while
keeping a watchful eye on his
son.
At 33, the son conducts him-
self with the shy deference of an
adolescent. At the moment, he is

economy worsened a job scarcity that is yet to a price worth paying. It’s time for a plan to share
cult to do this year,” Marten
Pieters, managing director and
chief executive officer of Voda-
fone India Ltd, said at a news
conference to announce the
company’s earnings.
“We would also need some
certainty around the valuation
of the business and, of course,
company has been embroiled
in a tax dispute with the Indian
government over its 2007 pur-
chase of Hutchison Telecom-
munications International
Ltd’s Indian business that gave
it entry into the rapidly grow-
ing mobile phone market.
Expressing concern over
facing a metal pole, muttering
quietly under his breath to peo-
ple no one else can see or hear.
Bhowmik’s son Surjit suffers Support network: Santosh Kumar Bhowmik (in background) with his
from schizophrenia, a mental ill- wife and son Surjit, who suffers from schizophrenia.
ness that typically makes it diffi-
cult for an individual to think
logically, have normal emotion- mint SERIES-I people with incurable mental
ailments can be admitted.
al responses, and distinguish be- “For 18 years, I have cared for

ease. To be sure, free food rations and job hand- public funds with all citizens in need. Let’s aim
pricing and availability of lack of consistency and pre- tween real and unreal experi- least 7% of the population is esti- my son at home because I do not
spectrum is a very important dictability in the regulatory en- ences. mated by the ministry to suffer have a choice,” said Bhowmik.
issue for every operator,” he vironment, Pieters said that “I do not know what will hap- from “severe” mental illness. “It is not enough to give medi-

said.
Trai in April proposed that
the minimum price for air-
waves to be auctioned be set at
`18,110.9 crore for 5 mega-
despite an average 26MHz be-
ing available in each telecom
circle, only 5-10MHz had been
recommended for auction, po-
tentially creating an artificial
pen to him after I am no more,”
Bhowmik said. “I leave it up to
God.”
He is not alone in his anxiety.
The ministry of health and
Yet, with only 37 government
institutions to care for the men-
tally ill in a nation of more than
one billion people, there are
limited long-term resources for
F R E D E R I C K D OU G L ASS
cine to patients suffering from
schizophrenia. They require
special care, which we cannot
give at home, but I do not have
the money to institutionalize

outs played vital roles in offering the poor relief. to redesign redistribution, employ a digital
hertz (MHz) of 2G spectrum in
the 1,800MHz band across the
country. Telecom operators
Mint is also available for R6.50 with said their business would be-
Hindustan Times under a combo offer come unviable and telecom
scarcity that could distort auc- and family welfare estimates
tion prices. that as many as one out of four
The high spectrum reserve Indian families will have at least
one member diagnosed with
TURN TO PAGE 3® some sort of mental illness. At
families struggling to look after a
relative who needs psychiatric
treatment. In northern India,
there isn’t a single government-
run rehabilitation centre where
him in a private facility. I don’t
like to think about what will
happen to him after I am gone.”
TURN TO PAGE 3®

But the distress has spanned multiple socio- rupee and give the concept a literal makeover.

MY VIEW | MODERN TIMES

Four major national flaws that unite Indian citizens

that defines the country’s upper classes.
MANU JOSEPH Across the nation and a vast swathe of time,
women in urban India have lamented that
Indian men are eager boyfriends, but when it
comes to marriage, they go with their
mother’s pick. If Indian women dated poor
competence, they achieve in informal ways. tend to overrate that nonsensical Indian phe- This is why we do not have any order when
3) Indians are misers: Before the advent of nomenon called ‘jugaad’, which is a cheap we drive or plan cities. Chaos comforts us as
taxi-hailing apps and cheap rides in white and eventually expensive way of doing some- something innately human. As a conse-
cars, people had a foe in the auto-rickshaw thing by bending rules. Also, our rich give quence, Indians are among those who have
guy. One of the most irritating things about away very little in organized charity; they are the poorest quality of life. There is not a single
Indian life was this guy asking for “something more likely to donate money to God. city that promises natural beauty, clean air,

M
any of us have wondered, on days we
were underemployed, what unites
India. For some reason, when people
want to understand what unites a society,
they think the reasons have to be virtuous or
beautiful. As a result, we have been given spu-
rious reasons for what binds us together—like
Hindi cinema, cricket, English and democ-
men, they may not face this. The richer the over the metre”. But then, we should have 4) Everyone thinks he is Chanakya: Not ease of travel or easy access to outdoor activi-
boyfriend, the more difficult his parents. thought of the matter in a many in India have read the ties. I know captive animals in Europe that
2) The reason that India is safest for the rich: different way. Travel in Arthashastra, but almost live better than most Indian millionaires.
There is something odd about how safe India India is cheap; it is probably We actually everyone knows or thinks Yet, most of our protests are about esoteric
is for its middle classes and rich. Street mug- underpriced. Many prices he knows a synopsis of this matters that will not transform our lives. That
ging is nearly unheard of, deaths from violent are pegged to affordability have a lot that ancient treatise. In the is another thing which unites Indians—the
crime for money are rare. This could be by the poor. As a result, the national imagination, its stamina for useless issues.
because the well-off in India, do not walk poor actually subsidize our
binds us all author Chanakya is a cun- India’s national flaws are not always grand.

is a journalist, novelist, and the

racy. In reality, what often unites people are
their vices.
creator of the Netflix series,
‘Decoupled’
Here is a list of India’s national flaws.
1) The Indian family is a cartel: When your
nation is richer than your family, you can
rebel against your family and claim inde-
pendence. But when your family is rich and
your nation poor, you assume “family values”
and conform to traditions. The importance of
the Indian family, from what I have seen first-
hand in Madras, Kerala, Mumbai and Delhi,
is that when the country is undependable,
only the family can give you an unfair advan-
tage over others. It is the power of the family
that has created a certain meekness among
India’s elite, especially its men. It’s a quality
enough on the streets to be mugged. We min-
imize the time we have to spend in a public
space, and we generally fear the worst, so take
precautions. But there is another reason why
India is safe: the informal suspension of
human rights in police stations and the gen-
eral cruelty of the justice system.
For most criminals in India, getting caught
by the police is an extremely expensive devel-
opment. This is true across regions. Until
recently, Kerala, despite its reputation for
communist-grade healthcare and education,
had a very cruel police force. There is proba-
bly no part of India where the police are not
feared by common people. What the police
and justice system cannot achieve through
lives. So, the auto guy ask-
ing for more money is only
together if one ning practical man. No one
wants his frugal diet; but
There are smaller things that affect all of us as
much. I wish to particularly defame the fact
a request to not be fleeced
by those of us who can
cares to take many are eager to adopt his
rumoured practicality, his
that across India, people invite you to dinner
but will not serve food until very late in the
afford to pay. Ideally, we a closer look at “statecraft”, which is usually night; also, everywhere in the country, if
should be leaking money. a melodramatic justification there are two gates, one will be kept shut
Instead of arguing with the our behaviour for doing some nasty things. because of a national belief that if some hard-
auto guy, we should be To follow a man and not fol- ship is imposed on people, some good comes
stuffing notes in his pocket. low his diet is to completely out of it. Also, you know you are in India when
But then, we are a miserly society. Most of misunderstand him. a cop and a culprit walk hand-in-hand to
what Indians hail as austerity and “price con- We speak a lot about morality, bloviate on court. And, during every political rally, any-
sciousness” is merely a form of small-mind- spirituality as though we are all very divine, where in our country, when a guy is giving a
edness born out of long years of insecurity. but in practice, at any given point in time, speech, his side-kick will come and whisper
Our corporations, too, are stingy. They do not there is probably a subconscious national something in his ear as though it can’t wait.
have the heart to invest in research and devel- feeling in all of us that there are advantages in There is much that unites us. We have
opment. That is a reason why industrialists twisting rules. been looking in all the wrong places.
LIVEMINT.COM VIEWS MONDAY, 23 MAY 2022
NEW DELHI 13

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

Judicial delays and the need for Indigenous weapons will have
to wean India off Russian arms
intervention at the district level American aid cannot resolve India’s impossible trinity on defence

A geographical mapping of cases pending for over 10 years in India throws up a pattern that requires a well focused response

HT

MIHIR SHARMA
is a Bloomberg Opinion columnist, a senior
fellow at the Observer Research Foundation
in New Delhi, and author of ‘Restart: The
SMRITI JALIHAL & YUGANK GOYAL Last Chance for the Indian Economy.’
are, respectively, a research associate at Centre
for Knowledge Alternatives; and associate
professor and founding director of the Centre
at Flame University.

T
he Indian government’s unwilling-
ness to condemn Russia forcefully for
its invasion of Ukraine seems to have

R
ecently, Bihar’s Bhojpur district court
was in the news. It delivered a judge-
ment on a land dispute case filed 108
years ago, making it one of the oldest
cases in the country. The case was filed
in 1914, the year that Mahatma Gandhi
returned to India from South Africa!
This is, of course, one of many such cases lan-
guishing in Indian courts for decades. By some
estimates, at the current rate of disposal, district
courts will take 324 years to dispose of all their
pending cases. Just last month, Prime Minister
Narendra Modi and Chief Justice of India
N.V. Ramana, in a joint conference of state chief
ministers and chief justices of high courts
emphasized the need for “speedy” justice.
A range of explanations for this unusually large
amount of judicial pendency has been given. A
prominent view is about judicial vacancies. Until
two years ago, around 37% of judicial posts in high
courts and 21% in subordinate courts were lying
vacant. India has 20 judges per million people,
which is extremely low (the corresponding figure
in the UK is 51 and in the US, 107). There are also
discussions on the need to increase working days
of the judiciary, adopt technology, and on creating
specialized tribunals (for instance, the govern-
ment’s recent proposal to set up special courts
to close 3.3 million cheque-bounce cases).
Reducing the complexity of legal procedures is
another popular cry.
Then there are other, demand side explanations.
Pendency rates will be closely related to filing
rates, which may in turn depend on population,
legal awareness, education, and income levels of
the people. But it requires empirical research,
which is scanty in this field of inquiry. Some work
done in Western countries suggests that higher
incomes increase litigation rates (if more contracts
are signed, more get broken). The answer is not
so clear in low-income regions. Recent studies
in Kenya and India, for instance, indicate that
congestion in court cases is lower in higher-in-
come regions. This could be due to the better
capacity of richer-area courts, money-driven case
acceleration, or maybe because a rising economy
has much to offer people so fewer feel the need to
break any law.
Despite their urgent need, such useful empirical
studies, are hard to come by, given constraints of
data inadequacy in India. Others are focused on
bigger courts and mostly propose one-size-fits-all
theories. We make an attempt to map district-level
caseload in the country. Of the 470 million cases
pending in Indian courts, around 87% are in dis-
trict and subordinate courts. We wanted to see if
there are spatial patterns at the district level that
can inform policymaking.
We used data in the National Judicial Data
Overburdened courts
District-wise spread of cases pending for more
than 10 years in India.
Number of cases
0-2,000
2,000-20,000
20,000+
Note: Blank
districts mostly
indicate data not
available
Source: Authors’ compilation of data from National
judicial data grid
Grid to map the number of cases (both civil and
criminal) pending for over 10 years in district
courts in 2021. The map shows the total. We
noticed that the total number of criminal cases
(2.5 million+) with 10+ years of pendency is 3.5
times that of civil cases (almost 700,000).
But three other findings were more striking.
First, district-level pendency in criminal and
civil matters are highly correlated. Courts that have
delays in one type of matter are likely to have it in
the other type as well. This implies that pendency
may be a better function of which district court the
case is filed in than whether it is civil or criminal.
Secondly, there are a few concentrated pockets
of ‘high-pendency’ courts (see for instance Uttar
Pradesh and Bihar). This implies that there may
be some spillover of district court cultures in
terms of delays. If the spillover rates are high
(more research is needed to find this out), then
arresting this spread should be done urgently in
these regions. When we mapped the district-level
figures for cases pending for more than 10 years,
per 100,000 population, the clustering and other
visuals did not change much.
Third, and perhaps most importantly, despite
some clustering of ‘high-pendency’ courts, there is
no state-wide pattern. Some districts in the same
state do very well, while adjoining ones perform
poorly. This random distribution of ‘high-pend-
ency’ courts implies that district-level interventions
rather than state- or national-level policies may
yield quicker and better results to address the
problem. Pendency is a district-level problem,
and not state or national level.
The last point deserves a deeper engagement.
For far too long, policymaking in most fields has
been dominated by country or state design ideas
plastered over a large number of districts without
considering their unique challenges. What if each
district is telling us a different story?
Our districts are huge. They are also historic
and each has had its own development and social
trajectory. It is thus important to decentralize
both identification of policy problems and their
solutions to Indian districts. At our Centre for
Knowledge Alternatives, we do district-level data
and culture mapping for policy application. In the
available data, for instance, we realize that almost
62% of cases pending for 10+ years are lying in just
10% of the districts. Focusing on these would be
most efficient and impactful.
woken up leaders in Washington an old
problem: How to wean India’s military off its
dependence on Russian arms. According to
Bloomberg News, the US is considering a
$500 million defence package for India to
finance the purchase of US weapon systems.
While half a billion dollars may seem like
a lot of money, it really isn’t when compared
to the scale of the problem. Until recently,
India bought almost all its frontline weap-
onry from Russia. Researchers at the Stim-
son Center calculate that India’s major
weapons are still overwhelmingly—about
85%—of Russian origin. The Stockholm
International Peace Research Institute says
that “new orders [from India] for a variety of
Russian arms in 2019–20 … will probably
lead to an increase in Russian arms exports
in the coming five years.”
Fixing the problem is going to take time.
And it won’t happen unless the Indian
defence establishment is willing to make
some hard choices. Like all developing
nations, New Delhi confronts an impossible
trinity: It cannot simultaneously achieve
autonomy, affordability and quality.
Shifting toward buying more Western
weaponry and lessening its dependence on
Russia, for instance, would bolster India’s
autonomy. But the country would have to
sacrifice affordability, so it wouldn’t be able
to buy as much. India is spending $5.5 bil-
lion on Russia’s S-400 surface-to-air missile
platform. The US-made Terminal High-Al-
titude Area Defense system costs about six
times that much and isn’t even as versatile.
Suppose India wants both affordability
and quality? Well, some countries have his-
torically gotten by with fewer but more
potent weapons, often because they’re
closely tied to the West or China and benefit
from the protective shields of their allies.
But India—with one prickly neighbour to
its north and a smaller but still nuclear-
armed neighbour to its west, and continents
away from friends who could help in a con-
flict—is unlikely to want to rely on anyone
else for essential defence requirements. In
its last full-scale war with Pakistan, in 1971,
India found itself short of artillery shells and
had to secretly import mortars from an
Israel it didn’t even recognize at the time.
Defence planners’ memories are long.
Insufficient weapons on hand represent a
loss of autonomy that no Indian govern-
ment could possibly countenance.
For decades, India has tried to establish a
local defence industry, building its own bat-
tle tanks and jets. Unfortunately, our mili-
India’s $5.5 billion bill for Russia’s S-400
missile platform counts as a bargain REUTERS
tary hates the results—the Arjun tank and
the Tejas fighter. The Arjun, the Indian
Army complains, can’t be part of any battle
plans on the canal-heavy, militarized border
with Pakistan: It weighs almost 70 tonnes
and would collapse most bridges in Punjab.
By contrast, Russia’s T-90 tank weighs less
than 50 tonnes. Meanwhile, the Indian Air
Force has a long list of reasons why the Tejas
fighter jet is not good enough: Its payload is
smaller than the F-16’s, the plane takes too
long to service, and so on.
In the short run, indigenization offers
affordability and autonomy at the cost of
quality. The question is whether India has
the patience and political will to fight
through early stumbles. China’s govern-
ment invested for decades in the Shenyang
J-8 fighter jet, which was significantly less-
sophisticated than other interceptors of its
time. Indian defence analysts might point
out that it’s only through buying large num-
bers of subpar equipment, for decades, that
China finally built the Chengdu J-20 stealth
jet, which may well be a “near peer” of US
fifth-generation fighters.
Of course, Chinese leaders didn’t have to
deal with constant leaks to a free press from
an incensed air force. And then there’s the
fact that, in India at least, you are going to
have to produce many, if not most, of these
new jets and tanks and ships in the private
sector. Are Indian politicians—and, more
importantly, voters—willing to accept the
delays and opacities associated with a bigger
defence industry?
Oddly, it’s probably politically safer for
literal boatloads of cash to go to Russian or
Western defence companies than for a
much smaller sum be paid to some Indian
oligarch. The Indian state’s toxic relation-
ship with the private sector is one of the
biggest obstacles to indigenizing weapons
production.
Nevertheless, that’s what needs to be
done. If Indian leaders want a reliable and
affordable pipeline of weapons of decent
quality that arrive quickly enough to deter
an aggressive China, they are going to have
to fund homegrown defence companies,
convince voters of the need for big military
budgets, suffer failures and scandals, and
field less powerful weapons until they can
develop better ones. The task will be messy
and politically difficult. India should proba-
bly get started. ©BLOOMBERG

GUEST VIEW

Potential impact of the apex court’s GST Council ruling

expected to offset any inclination of either
S.R. PATNAIK & SHIVAM GARG the Centre or states to dominate the other,
and also to help resolve conflicts on the basis
of consensus. Statutorily, of the total votes
cast, the Centre holds one-third while states
hold the rest, with no compulsion for the
ommendations morph into legislation under
Article 246A is implausible.
Both the Centre and states have entrusted
the council with binding advisory powers.
India has a multi-party system, in which the
ruling party may or may not govern many
The Supreme Court also observed that the
GST Council, being a delegated authority,
must strictly act within the limits of the
authority granted to it under the GST Act.
The concept of implied intent or incidental
and ancillary power will not be appropriate in
including instances of states disagreeing with
council decisions, particularly now that the
centrally-committed GST compensation is
coming to an end. While no state has exer-
cised its power to reject council recommen-
dation in the past five years, increasing politi-

T
he Supreme Court, while dealing with
a case of the levy of Goods & Service
Tax (GST) on ocean freight, delivered
an important ruling last week covering the
scope, power and limitations of the GST
Council. The GST Council is a Constitutional
body tasked with providing advice and rec-
ommendations on matters of GST. India’s
Council to provide ‘unanimous’ recommen-
dations. However, those present and voting
must have a three-fourths majority to provide
a recommendation.
Cooperative federalism: The GST regime
clearly defines the functions of the GST
Council, Centre and the states. India follows
a model of cooperative federalism, in which
states. Thus, there is a high probability of dis- the exercise of fiscal power, since it impacts cal polarization may throw up a conflict that
agreement. While the idea numerous taxpayers. challenges the one-nation-one-tax principle.
of uniform taxation could Absence of binding nature: There is a high probability that the GST
fall apart in the absence of India will need The apex court noted that Council will be forced to create a dispute res-
consistency among states, the Constitution would’ve olution system to deal with possible GST con-
the council can only oper- a GST dispute had an express provision if flicts between the Centre and state govern-
ate in the manner pre- the council was intended to ments. As a council recommendation would
scribed in the Constitution
resolution be a body whose recom- be non-binding for primary legislation, the

are, respectively, partner &

Head - taxation; and senior
associate; at Cyril Amarchand
Mangaldas
apex court has held that the GST Council’s
suggestions are mere recommendations and
have only persuasive value.
The GST regime was designed to subsume
existing indirect taxes on manufacturing, the
provision of services, sale of goods, state
entry, etc, under a single taxable event: the
supply of goods or services. The system has
continued to evolve on several fronts since its
implementation on 1 July 2017. It has under-
gone rate rationalization and several changes
on exemptions, procedures and so on.
As GST subsumed all applicable indirect
taxes in every state, a GST Council was consti-
tuted to provide a level playing field between
states and the Centre. This council was
the Centre and state governments partner to
resolve conflicts. In the instant case, the apex
court examined the Constitutional architec-
ture and framework, and alluded to “cooper-
ative” and “fiscal” federalism. The verdict
serves as a reminder to the Union govern-
ment that GST legislation is the combined
responsibility of the states and Centre. The
Council’s recommendations are not binding
because both have equal authority to legislate
on GST. The Centre should not legislate uni-
laterally, as it would contradict the idea of
‘cooperative federalism’. To treat them as
enforceable edicts would jeopardize fiscal
federalism, as committed to by the Union and
states. The assumption that the council’s rec-
with support of the Centre
and states. The apex court
mechanism as
clarified that the council’s
Constitutional position and
disagreements
powers must be read in the could become
light of the legislative
authority granted by Par- more likely
liament and state legisla-
tures, wherein both the
Centre and states have equal powers to legis-
late on GST and are required to carefully
examine the consequences and benefits
before enacting any amendments or adjust-
ments. It is clear that the council’s proposals
must be the outcome of a collaborative dia-
logue among them.
mendations translate into
legislation without any
intervening act. It clarified
that although the govern-
ment is bound by the coun-
cil’s recommendations
while exercising its rule-
making power under the
GST Acts, not all its recom-
mendations would be regarded as legislation.
Impact on the future of GST legislation: The
judiciary may have to be more proactive in its
evaluation of GST legislation, which may lead
to a deluge of lawsuits challenging GST
Council decisions. This could also have far-
reaching repercussions on a variety of issues,
possibility of some states failing to amend or
enact the same cannot be ruled out. It may
disturb tax harmony and may partially lead to
the operation of different provisions in differ-
ent states, or see conflicts between state and
central GST laws. It could impact taxpayers
operating in multiple states. This is why the
apex court has clearly stated that both the
Centre as well as state legislative assemblies
have the power to draft their respective reso-
lutions and they should do it after detailed
study, due consultations and negotiations.
One should hope that both the Centre and
states follow the advice of the apex court to
ensure that the business of taxpayers working
in multiple states is not impacted.
14 MONDAY, 23 MAY 2022
NEW DELHI BUSINESS OF LIFE WORKPLACE LIVEMINT.COM

Is cut-throat competition
at work worth the hustle? ISTOCKPHOTO

clinical psychologist at Masina Hospital in

Mumbai.
“It can feel forced and fake and can be a very
invalidating experience. The need to con-
stantly be okay can invalidate all our other
emotions. Negative emotions are thus viewed
as inherently bad. When we judge ourselves for
our primary emotions of sadness and loneli-
ness, it can lead to secondary emotions such as
shame,” she says. “It can also make one feel Vishakha R.M, the head of IndiaFirst Life Insurance Company.
guilty for experiencing the emotions they are
feeling. They may feel guilty for not feeling MONDAY MOTIVATION
grateful or for feeling upset. It can hamper
growth.”

THE WORK PRESSURE

A hypercompetitive work environment could
The fine art of
result in continuous undermining from man-
agement and colleagues. “Rivalries can be
healthy too, provided one is willing to help
the other and motivate them to do better. If
looking after
you instead spend your days plotting your
team member’s downfall so that you can get to
the coveted position, it is ultimately not going
to help either you or the company,” says the
mood-o-metre
HR manager. “Toxicity breeds more toxicity. How ‘Bhagavad Gita’ helps IndiaFirst
If companies push too hard to make cut-
throat competition culture the corporate cul-
Life’s managing director grow
ture, it often results in employee exodus. Peo-
ple who can afford to leave the company, will Rashmi Menon
look for better options and leave. Unfortu- rashmi.m@livemint.com
nately, those who can’t leave the job for finan-

cial or personal reasons will hold on to it, but
the toxicity will result in poor employee per-
formance,” he says. “In a toxic work culture,
everyone is a loser.”
In a large company, there are various employ-
ees, which by definition, means that you have to
do better than your colleagues if you want to
“make it”. This need to “make it” often translates
into an atmosphere that does more harm than
one can imagine. The organisation starts to
over-value competition, with an aim to achieve
It may sound like a small to be deeply toxic. Those two years “were a har- THE DARK SIDE
rowing time. While almost everyone in my A popular belief in today’s workplace hustle cul-
maximum profit.
As mentioned earlier, cut-throat competition
V
ishakha R.M., the managing director and chief executive
of IndiaFirst Life Insurance Company, tries to live by the
IPOD mantra: inner peace and outer dynamism. That’s
because she believes one of the jobs her position entails is being
the mood-o-metre of her company. “I may be in a bad mood
because of some non-work reason, but the people around the
office looking at you, may assume the worst. So you should be vis-
ibly dynamic and energetic but also peaceful and calm inside,”
she says.
She speaks to Lounge about why having competent second
rung leaders is crucial, learning to let go and not being hung up
on perfectionism. Edited excerpts:

price to pay to be part of office was fighting similar battles, they were not ture is: to stay ahead, you have to be ruthless. It’s can be a powerful driver of employee dissatis- Who do you consider your mentor?
willing to quit what they thought was a lucrative a dog-eat-dog world that encourages the faction. There are, however, simple ways to I have never had any formal mentor in my career. However,
a dream workplace, but position,” confesses Dabade, who’s presently “I-work-longer-hours-than-you” mantra, tackle this kind of atmosphere in the office. one person who helped me grow is John Holden, a former boss.
working in a start-up. It is a smaller place, but he something that became more evident during Venkatesh Babu, consultant psychiatrist, He had the least amount of insecurity in having a competent sub-
the win-at-all-costs has no complaints so far. “At least there is cama- the pandemic when there were massive job and Fortis Hospitals, Bengaluru, says, “It might ordinate. I have always told my team that they need to keep on
mentality in the office raderie in the office instead of people trying to pay cuts across sectors and industries.
push the other down all the time.” Competition can be healthy too, but there is
sound difficult to do, but one should acknowl-
edge their own emotions and experiences and
growing because that’s the only way I will grow and the company
will grow. It will push me to constantly upskill and contribute
can be deeply toxic Mohit Aggarwal, 33, had a similar experience a fine line between healthy and toxic, explains
while working at a bank in Mumbai. “Work the HR manager of a leading Gurugram-based
try to learn how to let go of those emotions. Try
to talk to others, express and if required seek
something more.
What does being a mentor mean to you?
pressure was going through the roof. To top it IT firm, who wishes to remain anonymous. help, he recommends. “What may seem like a Being a mentor is about placing the
Medha Dutta Yadav all, there would always be this hush-hush thing “There is competition in the professional life at normal competitive attitude of the moment may ‘Being a mentor interest of the mentee first and being
in the office like some secret was in the offing every level. It’s not a new thing, but after covid soon skyrocket into toxic cut-throat competi- is about placing always contextual. It is about ensuring

C
an a win-at-all-costs mentality
force workers to leave their job?
Sameer Dabade would agree. Just
before the pandemic, the 29-year-
old IT engineer joined what he
thought would be his dream job and moved to
Bengaluru from Nashik.
“During my month-long initiation pro-
gramme, I would be constantly told by the train-
ers how my present office was the best place to
work in, resulting in the best work being put
forth by the best team, the best performance by
each team member that would lead to the maxi-
mum profit… ,” he recalls. “We were constantly
told how we had to be better than the next per-
son. I didn’t realize it then, but this kind of work
culture messed up my work-life balance. I
would pull all-nighters, catching a few winks at
my desk in between work commitments.”
Dabade soon realised the expectation to
thrive in a high-pressure work environment was
affecting his mental and physical health—he
wasn’t eating proper meals, was always stressed,
no social life. He thought it would get better and
he needed the steady flow of income. But it
never got better.
What initially sounded like a small price to
pay to be part of his dream workplace turned out
that would lead to job cuts,” he says, adding how and hybrid work culture, there’s much more tion before you even realise it. Know where to that the company gets the best out of
the senior managers would encourage the feel- competition; people now want to move ahead draw the line.” the interest of the mentee and vice versa.
ing of expecting the worst as a means to drive in the smallest time possible,” says the man- Cut-throat culture starts from the top-down, the mentee first A work routine you have devel-
their subordinates to put in more hours. ager, who has been in the field for close to two says Sardesai, who often sees patients stressed and being oped during the pandemic?
“We were con- decades. “This is giv- and worried because of overcompetitive work contextual’ One of the things that I became
stantly on our toes. ing rise to a toxic environment. If the management of a company more considerate about is stress levels.
There was always this ‘Rivalries can be healthy too, work environment believes in winning by all means, then it I was and am a perfectionist, and I
fear of ‘what if’,” he provided one is willing to help and ultimately affect- becomes the corporate culture. Age, gender and made a conscious effort to tone that down. I started to “let go” and
recalls. ing employee pro- seniority play their part, she says. “This is noth- “not allow perfection to become the enemy of the good”.
Then there was the the other. In a toxic work ductivity and also ing but an aggressive, macho work environ- Your key productivity principles?
office rivalry. culture, everyone is a loser.’ adversely affecting ment. Everyone is in search of the alpha male.” One of the big productivity principles I follow is to keep asking
Both Aggarwal and the company.” Babu adds: “With covid and hybrid work, the myself, ”Why are you doing this?” It gives me clarity of objective
Dabade realised that What’s needed, he cut-throat culture is partly in hibernation, but and helps in decision making. This particularly helps when I have
acing the cut-throat competition was the only suggests, is more push for healthy teamwork.” that’s only in some offices. It is not going away to make difficult decisions.
way forward. People vied for the highest-paying “It’s simple actually,” he explains. “When anytime soon. Such workplace atmosphere I believe in concepts of dharma (duty) and karma (actions).
clients to achieve monthly targets, which were employees help each other to do better, it is don’t change unless there is a CEO-led culture What’s the right thing for you to do in a situation? Sometimes I
often always impossible. Employees were made healthy competition, and that is what is needed. change initiative. Even then, it is a slow process may not like what I am doing but if it’s right for the company then
to fight hard to stay ahead in the game. The Excessively competitive workspaces are just and can take years. Not many people have the I have to take the decision accordingly. As a CEO, at the end of the
manager would add to the toxic atmosphere by bad news at every level.” time for that.” day, my job is the company.
repeatedly emphasizing how the bottom 15% of There’s ample research to show that a high- Change is indeed hard to come by. This is the Any books you would recommend for growth in life
performers would not be with the company for stress, cutthroat culture is bad for productivity. reason people like Aggarwal and Dabade and work?
long. “It was hell,” recalls Aggarwal. After four According to a 2015 Harvard Business Review decided to quit and take things slow. “I didn’t The Intern is a beautiful movie on reverse mentoring. And the
years of being part of the rat race, he quit to article, “engagement in work — which is associ- want to lose my peace of mind to the age-old rat Bhagvad Gita is such a brilliant handbook on duty, responsibili-
become a financial consultant. ated with feeling valued, secure, supported, and race,” says Dabade. “Success is important, but ties, principles and expectations.
“Working independently has its share of respected — is generally negatively associated not at the cost of pushing others down the
drawbacks, but it definitely is better than being with a high-stress, cut-throat culture.” snake pit.” Monday Motivation is a series featuring business leaders and
in a job that drains you mentally and physically. Working in such an environment can make creative individuals who tell us about the people they look up to
After I quit, I heard two others also left,” he says. you feel unempathetic, adds Tanvi Sardesai, Write to us at businessoflife@livemint.com and their work ethics.

BUSINESS OF TRAVEL

Revenge travel might make you late for that meeting ISTOCKPHOTO

Whether you are That is over 80% of pre-pandemic bests. I spent a couple of weeks getting a new than three months and at some consu-
As opposed to earlier times, one key dif- Schengen Visa for a business trip. That lates, not before December 2022. And
planning to travel for ference now is that more people prefer to was when demand was picking up. Now, once you submit your paperwork, it could
work or leisure, plan your fly in the premium cabins. In fact, many as demand has returned to a more whole- take anywhere between one to three
airline executives claim business cabins some level, it is a challenging task just to weeks to get your passport back. More
itinerary now, not three are selling out faster, even before the get an early appointment to submit papers reason to take a long view on that vacation
weeks before departure economy seats start to fill. So, if you are for visa processing. or business trip.
planning to head out of the country to Appointments frequently take 15-20 Finally, let’s look at booking and plan-
Europe or the US, the time to plan your days, and the processing takes up to a cou- ning hotels and experiences. I recently
Ajay Awtaney itinerary is now, not three weeks before ple of weeks, stretching the whole process tried getting a reservation at two Miche-
departure. to a month. lin-starred restaurants and they informed

T
ravel trends have changed manifold
since covid entered our lives. With
more countries removing travel
restrictions and more people getting fully
vaccinated, life seems to be returning to
normalcy, to an extent. Executives in the
aviation and hospitality industry are sur-
prised how quickly, over the months,
demand has returned for travel, both
domestic and international.
International air travel restrictions,
lifted about two months ago for India,
have seen the return of significant carriers
to the subcontinent. The likes of Emirates
and Singapore Airlines have also commis-
sioned their A380s to fly people to/from
India again. Close to 400 international
flights operate daily, and some 70,000
passengers depart from India every day.
CHANGING TIMES
Statutory warning: be ready to pay almost
double the pre-pandemic price because
airlines have limited supply, and the
demand is high. So, they no longer feel the
need to run discounts or promotions, at
least for now.
Sixty-eight per cent of travel leaders in
a recent survey conducted by Sabre, a
travel technology company providing
core backbone solutions for airlines, say
they are forecasting higher spending from
customers on their future travel plans.
Revenge travel seems to be a real phe-
nomenon.
If you still wish to look for a deal, your
American Express Platinum or Centurion
card might have hope for you. Amex
works with all sorts of airlines, and the
current members of their International
Airline Programme include the likes of
United, Qatar Airways, Air France and
British Airways. If you hold one of their
top-tier cards, it will not hurt to ask for a
quote because sometimes they have some
good deals on international airfares.
VISA BLUES
The other reason to put your pen to paper
right now is visa processing. Last August,
And if, like many others, your US visitor
visa expired during the pandemic, tough
luck. The US Embassy and Consulates
across India are witnessing a big rush for
new visa applications and renewals.
What’s more, throughout 2022, the US
Embassy and Consulates in the country
intend to operate only at two-thirds of the
usual capacity. To address the rush, the US
has waived requirements for an interview
for US Visa (B1/B2, and some other catego-
ries) as long as your visa expired no more
than four years ago.
Called the US Visa Dropbox, the waiver
is only applicable if you are applying for
renewal in the same country where your
original visa processing was done and for
the same class of visa. But such is the rush
that appointments are available no less
that they were fully booked till August.
You might be able to get a room at promi-
nent hotels, but it is expected to be quite
the summer for them. This means rates
will be high unless you make the booking
now.
In a nutshell, luxury travel is back with
a bang. So, if you don’t want to settle for
the second-best options or pay through
your nose, you shouldn’t push off plan-
ning that summer trip.
Business of Travel is a column for travellers
by a frequent traveller on all things air
travel, hotels and loyalty.
Ajay Awtaney is the founder and editor of
LiveFromALounge.com, an India-focussed
frequent-travel website.